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Part of Wilhelmsen Maritime Services, a Wilh. Wilhelmsen group company

Wilhelmsen Ship Management Business Area Strategy 2011-2015 June 11th, 2010

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Marine Money London Ship Finance Forum – 28th Jan 2015 Top 5 Technical considerations for Shipping Investor


Top 5 Technical Considerations for Shipping Investor

Maintenance philosophy Dry docking Transparency

KPIs imposed to ship managers Training for competent personnel


Maintenance philosophy

Maintenance philosophy can greatly influence the total cost of ownership and reliability throughout a vessel lifecycle :

3 Typical kinds of maintenance philosophy :

• Breakdown Maintenance : Run to failure maintenance (Not commonly

practiced in Shipping) • Planned Maintenance : Fix it before it breaks / Preventive Maintenance • Condition Based Maintenance : If it ain’t broke, don’t fix it / Predictive

Maintenance


Maintenance philosophy vs failure rate

Breakdown Maintenance

Planned Maintenance

Condition based maintenance

FAIL

UR

E R

ATE

CHANGE IN MAINTENANCE PHILOSOPHY

Source : Ship Repair and Refit Conference – Aug 2014


Centralized planned maintenance system (PMS)

Best Practices in maintenance philosophy

Establish a PMS that is the central communication platform that connects all stakeholder onboard and on shore • All technical matters and task are recorded in

the system • Fully integrated with other support services

on-shore such as procurement and quality & safety

Following conditional based maintenance approaches become more wide spread among technical managers in ship management companies • Conditional based maintenance in large

industry pilot projects have proven the advantages of the concept

• Benefits do not so much lie in saving maintenance work, but more in reducing defects, especially defects stemming from badly executed maintenance

Customize your PMS to include some conditional based maintenance approaches


Influencing vessel ownership cost D

evel

opm

ent /

En

gine

erin

g Operations Recycling

Year 0 Year 5 Year 20 Year 15 Year 10 Year 25 Time • Possibility to influence on vessel ownership cost and lifecycle surges at every intermediate (every 2.5 years)

and special ( every 5 years) survey (dry dock) • It is important to ensure docking objectives are met when vessels undergoes dry dock

- 02 Years

-01 Year 25 Years

Con

stru

ctio

ns

Possibility to influence on vessel ownership cost and lifecycle

Intermediate Survey

Special Survey

Source : WSM drydock team analysis, 2014


Best practices in dry docking

Deployment of a dedicated team to ensure ship owner’s interest are protected and represented throughout the entire docking process : Ensure all dry dock objectives are met

Ensure dry dock is executed within budget and in a most cost efficient way

Project management documentation and audit trails

Vessel reliability improved

Returns from Owner’s investment in docking is maximized


Vessel lifecycle cost analysis – Total cost of ownership

Tota

l Cos

t of v

esse

l ow

ners

hip Dev

elop

men

t /

Engi

neer

ing

Operations Recycling

Year 0 Year 5 Year 20 Year 15 Year 10 Year 25 Time

- 02 Years

-01 Year 25 Years

Con

stru

ctio

ns

40%

Owners pay HIGHER total cost of ownership : • Poor repair and maintenance management • Dry docks are not well managed

100%

Owners pay LOWER total cost of ownership : • Good repair and maintenance management • Dry docks are well managed

100%

Source : WSM drydock team analysis, 2014


Transparency

It is important that ship owner have complete visibility and knowledge of vessel financials and operations Accurate and timely financial records are

accessible at all times Savings achieved by bulk purchasing

from third party ship owners are fully realized

Accessibility to technical and shipboard

management condition


Best practice : Preparation and tracking of operating budget

WSM practices below : • VM initiates budgeting process 3 months in advance and seeks inputs from vessel

• VM finalizes budget with FM prior sending to Owner

• VM monitors budget at each order placement and on monthly basis

• VM discusses budget performance with FM during weekly meetings

• Any unplanned expenditure is discussed with FM prior proposing to Owner

*VM = Vessel Manager/Superindentent *FM = Fleet Manager


KPIs imposed to ship managers

KPIs imposed to ship managers as an incentive to ensure vessels are well operated and minimal budget deviation WSM practices below :

KPI’s - 10 % - 5 % +/- 0 + 10 % + 15 %

Number of Offhire Events per vessel 2 - 1 - 0

Vessel individual OPEX deviation

+/- 6% and above +/- 3% to 6% +/- 2% to 3% +/-1% to 2% +/-1%

Lost Time Injuries per vessel 1 - - - 0

Port state control deficiency ratio per vessel

Detention 1,5 1,0 0,5 0,0


Online access : Salesforce WSM’s customer portal through Salesforce, an interactive web based interface that allows customer to view financial reports and vessel performance

Best practice : Owner’s accessibility to KPIs and financial reporting

Financial data – updated every 2 hours Vessel Performance data – updated weekly

Drill down functionality until invoice level

Drill down functionality until individual vessel


Training for competent personnel

WSM’s recommends that training matrix should be subject to continuous improvement based on : • Feedback from shipboard management review • Authority requirements

- Flag state - Port states - Classification societies

• Market requirements

• Vessel budget

• Customer’s specific requirements


Best practice : Effective performance appraisal system

The performance appraisal system for WSM seafarers is designed to be a continuous evaluation process Appraisal session is conducted after the end of each seafarer tenure

Stakeholders involved in the appraisal process : • Shipboard management • Onshore organization • Crew

Objective of appraisal : • Monitor individual performance • Identify areas for improvement and

assess training needs • Provide constructive feedback on

personal performance and the • Opportunity for further improvement • Assist career planning • Enhance overall shipboard efficiency • Leadership development for officers


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