Navigating Horizons - Catalyst Maritime Trend study 2010

NAVIGATING HORIZONS
Version 1.00

Catalyst │Maritime Trend Study 2010 ©

INTRODUCTION Background / Prologue / Highlights (2-5)

INDUSTRY CHARACTERISTICS The inertia imperative /
characteristics (6-14)

TREND STUDY Wake-up call / Platform thinking / Eastern hotspots /
Apples and oranges / Carbon gamble / Safe shipping (15-34)

OPPORTUNITY DISCOVERY Niche princes / Process innovators /
Globalizers / Integrators / Adaptors / First movers / Epilogue (35-44)

Catalyst │Maritime Trend Study 2010 © 2

BACKGROUND Over the years, Catalyst has been engaged with a
broad range of international clients in the maritime industries, working on
an even wider pool of projects. Most projects have comprised elements of
market analysis, business development, innovation and strategic planning.

The study is neither exhaustive nor definitive. Change seldom is. It is a
snapshot of our most notable experience with a group of industries that we
see facing a number of exciting changes in the horizon.

We invite you to navigate freely through the presentation, trusting you will
be entertained and inspired to explore new future growth avenues.


OPENING If the owner is king, where does that leave the customer?
Maritime industries have long represented a market of commodities and
global competition, full of twists and turns due to its titanic size and the long
tail of stakeholders fighting day to day for a piece of an uncertain sized pie.

But when the market is pulling for deeper logistical solutions and legislation
bodies require still more stringent compliance standards, the only way
forward seems to be a focus on sustaining competitiveness by sound
strategic focus, new technologies, and innovation in all possible shapes.

The call for new business and market development has never been louder.


HIGHLIGHTS – a brief synopsis
The maritime industries are made complex by their titanic size, the
significant number of stakeholders involved, and the correlation with world
trade levels. However, their complexity should not become an excuse to
address diverse customer segments alike.

A number of key trends reveal a rising group of specialized players
that serve latent customer needs and form strategic partnerships. Others
exploit digitalization to enable transparency and efficiency gains. And new
innovators look towards growing legislation and emerging markets.

Navigating these new horizons requires a change in focus. 2009
separated the wheat from the calf in this highly fragmented industry, but
now leading companies are fine-tuning, sometimes even redefining, their
strategic focus. Management of change and new growth is thriving.


Industry characteristics │ Introduction

Shipping is the product of world trade, typified by its global width
as well as its depth of influence across industries. Though processes are
simple and demand-driven, the result is restricted strategic agility.

• Commodity shipping is fragmented and characterized by fierce price competition
• Short-term speculation runs in parallel with long-term stable growth
• Numerous customer segments are catered to by each industry player

THE INERTIA IMPERATIVE


Industry characteristics │ Drivers

GDP MEANS TON-MILES There’s a positive linear correlation
between GDP and ton-miles. A steady growth in production headed by
emerging markets, by default leads to a proportional growth in shipping.

Exhibit: Development of G20 GDP relative to cargo growth, index 1999
145 Notes:
• The index graph highlights the close relationship
140
between the growth of major economies (G20)
135
and ton-miles.
130
125 • It reveals that the relative distance of goods
120 shipped is increasing slightly
115
110 • Finally it points to the fact that shipping in general
105 is growing relative to the general economy,
100 regardless of the growing share of service
industries.
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
G20 GDP Cargo ton-miles Cargo tons

Source : EIU, UNSTATS, Fearnley Review (Various Issues), Clarkson, Catalyst analysis


Industry characteristics │ Size

BIG, BIGGER The collective value of the maritime industry is a
stunning USD1,3 trillion. It spans multiple value chains and markets,
whose bread-and-butter primarily depend on world trade levels.

Exhibit: Estimated breakdown of maritime industries 2009
Notes:
• The pie chart breaks down the largest marine
Ports Other industries, revealing that shipping and transport
Shipbuilding services amount to only 41% of all maritime
≈ USD 417 billion industries excluding maritime tourism
Marine fishing Shipping & (USD268bn).
transport
• The ‘Other’ category representing 12% of the
Marine market includes smaller industries such as cruise,
equipment R&D, IT, commerce, etc.

Seafood Offshore
processing oil & gas

Source : Douglas-Westwood (2007) excl. private yachting & marine tourism


Industry characteristics │ Diversity

DIVERSE BUSINESS LOGICS Vessel types are many and cargo
types plenty. Each combination often represents yet another business
logic. For multi-segment players this means that one size never fits all.

Exhibit: Snapshot of the shipping segments
Notes:
Shipping Bulk Dry Grain
Tank Forrestry
• The chart serves to highlight the significant
Coal amount of segments that occur from a breakdown
Liner Celluar Pig Iron of categories.
MPP
Tweendeckers Crude Oil • The graph does not distingush between e.g. ship
Generel Cargo Product Oil owners and charterers, long/short/spot, regions
Gas
operated or niche industries such as special
Specialized Heavy Lift Chemical
Ro-Ro
cargo.
Reefer
Projects • Most of these sub-segments have their own
Offshore Platform Supply business logics, which emphazises that e.g.
Windmill Supply service providers should cater to each segment
Passenger Ferry Anchor Handling differently.
Cruise Subsea Cables

Source : Catalyst analysis


Industry characteristics │ Globalization

GLOCAL BUSINESS Trade is often global, but the business remains
local. Upon winning the cargo, the game changes to an array of local
requirements and opportunities. Until the next call, when they change again.

Exhibit: Average no. of employees per select company office, 2010
Notes:
Inchcape (Port Agency) • The chart illustrates the average number of
255 Offices
employees per office location for four major
players in different value chains.

MSC (Liner) • The chart demonstrates that the requirement for
441 Offices local presence depend on position in the value
chain. – As an equipment manufacturer Wärtsilä
TeeKay (Wet) does not need the same presence as Inchcape,
25 Offices who make it a key part of their value proposition.

Wärtsilä (Equipment) • In contrast, other players reduce local presence
57 Offices
as they come to realize that their business is
dependent, or that they are able to better exploit
0 100 200 300 400 the scope of partnerships.

Source : Company websites


Industry characteristics │ Complexity

TOO MANY CHEFS Simple maritime business processes are
complicated by the large pool of stakeholders involved, which gear
up complexity and reverse the level of transparency and efficiency.

Exhibit: Conceptual mapping of stakeholders involved in voyage operations
Notes:
Cargo Owner/ Vessel Operator/ • The chart aims to break down a voyage from
Freight Forwarder
Broker
Vessel Owner fixture to final settlement. It highlights the
significant amount of dependencies between
various stakeholders, which complicate voyage
operations.
Vessel/
Voyage Port Cargo Voyage Port Cargo Voyage Voyage
Cargo
Fixture
Planning Operation Loading Operation Operation Discharge Reporting Settlement • The broker and the port agent take key role in
orchestrating the different stakeholders.

Terminal Port Port Ship
Inspectors
Operator Authorities Agent Suppliers

Source : Catalyst Analysis


Industry characteristics │ Fragmentation

A VERY LONG TAIL Volatility, low entry barriers and numerous market
segments. The result? – A significant fragmentation of the industry and its
players alike, complicating standards, innovation, and sales.

Exhibit: Distribution of operators controlling different no. of chemical tankers
# Vessels / Operator Notes:
50+ • The graph illustrates the significant fragmentation
of operators in the chemical tankers segment.
49-40

39-30 • Half of the segment controls just a single vessel.
29-20
• The picture is evident across many shipping
19-10
segments, which inhibit e.g. efficient sales
9-5 activities for players catering to these fragmented
4-3 segments.
2

1

0 50 100 150 200 250 300 350 400
# Operators

Source : Fairplay 2010


Industry characteristics │ Conclusion

UNCERTAIN CERTAINTY The relationship between world trade and
shipping fuels short-term speculation but also ensures long-term equilibrium

SHIPPING, AND Although shipping by itself represents an enormous
market, the collective size of the maritime industries is much greater

BUSINESS MODELING Everyone’s different due to vessels, markets and
cargos. Differentiation requires recognition of each segment’s uniqueness

LOCAL EVERYWHERE Depending on customer segment and position
in the value chains, maritime industries require significant local knowledge

ANTHILL OF PLAYERS The complexity is driven, not by the business
processes, but by the pool of different stakeholders involved in operations

MOM & DAD The result of low entry barriers is a predominant pool of
family businesses, which distinguish and complicate industry development


Trend study │ Wake-up call

A tough period with over capacity and declining freight rates has led a
wave of core business focus and cash management. Clever outsourcing
partners will find ways to provide flexibility and overhead savings.

• Third party service providers facilitate owners’ overhead reductions
• Professionalized procurement practices lead to supplier price pressure
• Several M&A opportunities is calling for accelerated consolidation

WAKE-UP CALL



SIZE MATTERS Big players will become better at exploiting scale and
financial strength. Professional procurement will replace outdated supplier
contracts, which may increase downstream price pressure and consolidation.

Exhibit: Growth in market shares for major liner companies, 2000-2008

Notes:
Top 5 carriers 35% • The graph highlights the significant
consolidation happening in the liner market.
Top 10 carriers 22% • Top 5 liner companies controlled a 43% market
share in 2008, making it the most consolidated
major shipping segment.
Top 11-25 carriers -2%
• High growth companies are MSC growing their
market share from 4,3% in 2000 to 12% in
Top 26-50 carriers -48% 2010 and CMA CGM growing from 2,3% in
2000 to 7,9% in 2008
Top 51-100 carriers -49% • In the same period, the world TEU capacity
grew from 4,5 million to more than 12 million.

Source : AXS Alphaliner (2008), Catalyst analysis



LEAN MACHINES The economic downturn facilitated severe
cost-cutting among owners and operators, affecting players across the
value chains. Business process redesign is a differentiating discipline.

Exhibit: Summary of Maersk Line strategic initiatives late 2008
Notes:
Productivity increase • Maersk Line is the leading liner company in the
world, serving customers all over the globe.
- Staff reductions focusing on sales/employee and other drastic
overhead cost reductions • The Maersk Line fleet comprises more than 500
vessels and a number of containers
Competitiveness corresponding to more than 1,9m TEU and
- Re-focus on high-profit routes (Far East Asia), securing return representing a 16,3% market share.
freight, avoiding delays and fuel cost savings
• In 2009, the group-level ‘Project One’ cut costs by
USD2bn, focusing primarily on liner.
Customer orientation
- A change of focus from speed to regularity enabling fuel • Maersk Line turned a USD-995m gross loss to a
savings, accessibility and improved customer satisfaction USD1,23bn gross profit between 1st half 2009-10.

Source : Maersk annual report (2009), Lorange (2009)


Trend study │ Platform thinking

While captains connect their vessels online, service providers will
be busy building and maintaining a growing base of digital platforms that
offers global scale, locally and at sea.

• Data, information and instruments are digitalizing fast and online
• New business models are evolving around digital information assets
• Data & decision modeling drive transparency and process management

PLATFORM THINKING



#REFERENCE ! The digitalization of information challenges the broker
and his spreadsheet. The new face of competition lies in managing the
digital information asset, improving processes and coping with transparency.

Exhibit: Examples of shipping functions being digitalized
Notes:
Chartering Voyage Estimator, Cargo Demurrage Real Time Risk exposure, • The table is an indicative set of examples of
Schedule, Fixture Notes, COA Processing of claims …
traditional shipping activities, which can now be
carried out digitally by various systems.
Operations Vessel & Port Schedule, Voyage Pooling Vessel Performance, Pool
mgt, Laytime Calculations, Bunker Financial Statements,
mgt, Time Charter … Allocation of Pool Revenues .. • In addition to efficiency gains, the digitalization
wave opens up opportunities for new business
Financials Tracking, processing , Auditing … Data Service Data Capturing, Disbursement
Accounts, Data platforms … models based on the digital information assets
that many players now possess.
Planning Job Planning, Cargo Matching … Procurement Procurement Platforms,
RFQ,…

Trading Monitoring, Report Compliance Remote Engine performance, Fuel
Confirmation, Invoicing … Consumption …
Monitoring




SPACE SHIPS Today’s vessels are no longer solitary whales. The rapid
growth in broadband access enables shore-based stakeholders to access
information directly and to manage the optimization of vessel performance.

Exhibit: VSAT operators and penetration
6000 70 Notes:

# Operators
# Vessels

• The graph highlights the trend in broadband
5000 60 connections on vessels, which reveal a
50 penetration growth that is expected to accelerate
4000 even further in the coming years.
40
3000
30 • It should be noted that the graph only depicts
2000 active vessels for the VSAT technology, which is
20 currently considered high-end. Thus the
1000 10 incorporation of other Internet technologies would
reveal a much greater penetration of connected
0 0 vessels.
2002 2003 2004 2005 2006 2007
Active vessels VSAT operators

Source : Comsys report (2009)


Trend study │ Eastern hotspots

Entire supply chains continue to move East, creating new global
strategic trade hubs. In response, ship builders, owners and commodity
traders are relocating group operations to enjoy closer proximity.

• Intra-Asia trade represents the single largest global trade volume
• The number of port calls yields big business beyond shipping itself
• Far East Asia is quickly becoming the strategic shipping location

EASTERN HOTSPOTS



NON-STOP ASIA As GDP levels grow, emerging markets will
gradually shift from producers to consumers. The result will be still
larger intra-Asia trade as well as discharge of finished goods.

Exhibit: Regional Trade Comparison, 2009
Notes:
• Far East (FE) intra-regional trade alone amounts
N. America to 12% of the world’s total.
-Europe
3.3 FE- N. America
Intra-regional Intra-regional • Trade between FE, the Middle East and India
N. America Far East 3.4
regions amounts to 12,5% of the world’s total.
2.7 3.2 MEI - FE 8.7
2.9 2.6 Europe - MEI
N. America –
S. America
Europe – 9.1
3.2
• From 1994 -2004 the intraregional trade in Asia
S. America
3.4 grew 417%, which is approximately 30% more
6.4 FE- S. America
than the world average growth in this period.
Europe - FE FE -
Australia

Unit: Hundred Million Tonnes traded in either direction
(total)
Source : Clarkson



DEAR MR. PRESIDENT A significant share of the world economy is
controlled by governments, especially in the East. Navies, NGOs and
government-owned companies call for a careful re-thinking of maritime
value propositions and sales strategies.

Exhibit: State-owned share of Top 10 oil enterprises in major economies, 2010
Notes:
European Union • There is a significant correlation between BRIC
countries/Middle East and state-control of natural
USA resources as opposed to the Western countries.
Middle East
• The correlation is also present for coal, although
Russia less significant.

India
Brazil
China

State-owned Enterprises Public Enterprises

Source : OneSource, company websites and Catalyst analysis


Trend study │ Apples and oranges

Segmentation and specialization is the new array of competition.
Leading companies will intensify their parallel search for core capabilities
and attractive market niches to finally kill the commodity tiger.

• Cargo types and legislative diversity across markets drive differentiation
• The integrated shipping companies are accompanied by specialized players
• High-end segments such as offshore pose new market opportunities

APPLES AND ORANGES



COAST GUARD, COME IN The chronic difference in legislation across
regions will drive specialized operators to seek cost advantages by
targeting specific market segments with barely compliant fleets.

Exhibit: Complexity of Regulation
Notes:
“It is well known that the current legal regime • Global shipping is primarily regulated by UN
governing the international carriage of goods agencies. IMO and ILO are examples of these.

by sea is characterized by complexity, a
• Flagstates will regulate issues not regulated by
UN – resulting in uneven competitive terms for
lack of uniformity and a failure to take fleets of different flagstates. As a result, many
fleets operate under ‘flags of convenience’.
into account modern developments in, • The unevenness will be particularly apparent for
and requirements of, the industry due to the intra-regional trade, which does not neccesarily
age of the existing conventions.” involve IMO regulations.
• The Rotterdam Rules aim to unify the international
- The United Nations Commission on International Trade Law regulations for carriage of goods by sea. So far
this convention has been signed by 15 states.

Source : UNCITRAL



BUSINESS CLASS Not all cargo owners will settle for travelling
coach. A new wave of specialized players will seek to break with
commodity margins through differentiated value propositions that meet
latent segment needs and require more special competencies.

Exhibit: Dimensions of specialization in value chains, industries and markets
Notes:
• The chart conceptualizes possible high-level
dimensions of specialization; i.e. a fully integrated
shipping company would encompass all
dimensions, whereas the red lines indicate a
“TCC example” highly specialized company (TCC) only chartering
The Containership Company, p. 41
liners between US & FE and with limited ops.

• The more specialized a company is, the deeper
solutions it can provide for its core segments
through e.g. cost advantages, bespoke services
or horizontal integration of value-add services.

• Several other dimensions of specialization exist
such as vessel size, high/low-end, long/short, etc.



Trend study │ Carbon gamble

Future premiums on carbon emissions hold the power to alter
shipping altogether. Whether an opportunity or a risk, leading companies
are taking decisive action to prepare their fleets for a new competitive edge.

• IMO and cargo owners are defining a new competitive regime
• Fuel costs and CO2, NOX and SOX emissions are risk managed
• Shipping denotes a new high-growth segment to green innovation companies

CARBON GAMBLE



ANCHORS AWEIGH The barriers to business are growing as IMO
gains stronger international foothold and cargo owners pull still greater
compliance standards. Do-it-smarter companies will invest in obliging and
efficient processes.

Exhibit: MARPOL timeline for reductions of SOx, NOx, CO2 and bio-invasion
Notes:
Bio-invasion • The chart highlights the signifcant emission
Reduction

100%
90% NOx reduction requirements set by MARPOL.
80% SOx
• In order to comply with the standards, many fleets
70%
are required to carry significant investments in
60%
upgrading fleet equipment and engines.
50%
40%
30%
20%
10%
0% CO2
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source : MARPOL



GREEN IS THE NEW BLUE A fast-growing range of green innovations
targeted at ship owners is defining a new industry niche with tremendous
potential. It serves to both limit the risks of emissions and to cut fuel costs.

Exhibit: Market forecasts for green shipping technologies, 2010-2016
Notes:
16
• Catalyst has forecasted the market sizes for
Billion USD

14 shipping equipment within three select green
12 technologies.
10
• Supporting the MARPOL timeline for emission
8 reductions, this graph highlights the future
6 importance of shipping to green technology
4 providers.
2
-
2010 2011 2012 2013 2014 2015 2016

Heat Recovery Ballast Water treatment Scrubbers



Trend study │ Safe shipping

Insurance premiums in terms of investments in various security
measures are on the rise. Hazardous cargo represents a significant
business risk, but also an opportunity to differentiate through TMSA ratings.

• Significant future security investments; especially among Western fleets
• Active risk management of cargo and environmental protection
• High-end fleets will differentiate through safety investments

SAFE SHIPPING



PRICING LIFEBUOYS The cost of safety is becoming a known factor
in the industry. As a result, the industry will invest heavily in state-of-the-
art safety systems, which unite cargo and environmental protection.

Exhibit: US Administration on recent BP accident
Notes:
“The way safety is measured is generally • Although not a shipping accident per se, the BP
offshore disaster in the Mexocan Gulf is the latest
around worker injuries and days away from example of failure to recognize the potential
work, and that measure of safety is severity of accidents involving casualities and
environmental disasters at sea.
irrelevant when you are looking at the • The trend to address risk management proactively
likelihood that a facility like an oil refinery was highlighted, when one of the world’s largest
could explode. This is comparable to saying enterprises, BP, was in jeopardy of going down.

that an airline is safe because the pilots and
mechanics haven’t been injured.”
David Michaels, assistant secretary of labor for occupational safety and health

Source : NY Times, 13 July 2010



SWIMMING LESSONS Interest organizations are driving a new
ambitious safety regime, which will require significant future investments in
security such as crew training, vessel safeguard systems and sea patrols.

Exhibit: Amendments to IMO Safety Convention SOLAS
Notes:
7 50 • Investments in security and crew training are
45 expected to rise significantly in the coming years,
6
40 which is supported by the rising complexity of IMO
5 35 safety regulations.
4 30
25 • At the same time, TMSA ratings have become a
3 20 differentiating discipline, which serve as a
2 15 competitive edge in some high-end segments.
10
1
5
0 0
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Amendments per year Accumulated Amendments

Source : IMO


Trend study│ Conclusion

CONCIERGE SERVICES The future will bring specialized players, who
provide vertical and bespoke solutions to customers and competitors

COLLISION AVOIDANCE Fighting externalities will change to
managing risk proactively based on green and safe innovations

E-SHIPPING Digitalization of data and services will translate into
widespread efficiency gains and development of new core competencies

WALL STREET The dynamics of the maritime industries call for a new
set of management competencies focused on change and progress

EXPEDIA A combination of shorter lead times, IT and management will
drive transparency, simpler processes and lower industry complexity

JACKIE CHAN The industry is more demand-driven than ever before.
Asia, especially China, will establish itself as the trade hub of the decade


Opportunity discovery │ Case studies introduction

The future role model of the industry isn’t one but many. The horizons
suggest several promising positions to take. In concert they characterize an
industry growing in both speed, strategic focus, and customer orientation.

• Specialized players will offer higher value add to select customer segments
• The increasing pace of legislation and competition provide room for innovators
• Global integration of the industry will facilitate new business development

OPPORTUNITY DISCOVERY


Opportunity Discovery │ Case study

NICHE PRINCES Players successful in identifying attractive specialized
positions in the value chains will gain market share. They compete on
strategic customer understanding and narrow, industry-leading services.

Exhibit: DA Desk case study
DA DESK has quickly grown to be the leading Company description:
DA-Desk is the largest independent provider of port
provider of port cost management services. cost management services to the shipping industry.
Focused on port disbursement control, DA-Desk
Starting of with handling disbursement offers effective process management, early error
accounts, DA DESK today offers a fully detection and a near paperless workflow. With more
than 80 customers DA-Desk handles 80,000 port
integrated chartering, operations, calls annually

financials and port disbursement system.
The value proposition is clear and a good
example of growth through horizontal
integration.
Source : Company website; The maritime executive



PROCESS INNOVATORS Foresight and speed is key for these service
& equipment providers. Their success is decided by a lasting ability to drive
legislation and cargo owners, and by providing cost and risk reductions.

Exhibit: Aalborg Industries case study
Company profile:
In 2010, an EU Directive specified that fuel with Aalborg Industries is at the forefront of green
a maximum sulphur content of 0.1% can be innovation and able to assist ship owners to meet
the new emission and ballast water requirements.
used when in port or at anchorage, and in order With respect to environmental and operational
to be compliant, Low Sulphur Fuel Oil needs to enhancements, Aalborg Industries provides a range
of green solutions to support customers in building
be used. Aalborg Industries has developed and operating their commercial fleet to the highest

burner upgrading kits to ensure that safe
standard for low environmental impact.

operation can be maintained and that boiler
plants remain in compliance with the
classification society requirements.
Source : The Maritime Executive



GLOBALIZERS To be truly global in shipping, one must be local. The
long tail of the industry offers great opportunities for those, who succeed in
providing the market with an intelligent platform of scope and scale.

Exhibit: Inchcape Shipping Services case study
Inchcape Shipping Services to acquire Global Company profile:
Inchcape Shipping Services is the world's leading
Marine Travel: “We see strong scope for using marine services provider. Through its proprietary
the ISS network to build on GMT’s current network of some 255 offices employing over 3,800
people across 63 countries, ISS provides its
office footprint. We share many common customers with an unparalleled global resource
customers with GMT and have no doubt that delivered locally and tailored to each customer's
individual needs.
bringing together the services of the (crew)
travel provider and the agent providing marine
husbandry services, will lead to a stronger
value proposition and increase the strategic
partnership value to our customers.”
Source : The Maritime Executive; Quote by CCO Jon Corner



INTEGRATORS The integrated shipping company is not dead. The
demand for one-stop solutions, portfolio risk management and several
M&A openings offer new space for conglomerates that match scale with
focused management of each division.

Exhibit: A. P. Moeller Maersk case study
Company profile:
The A.P. Moller - Maersk Group is a worldwide
The Maersk Group includes liner, logistics, conglomerate. It operates in some 130 countries
terminals, tanker and offshore supply, oil & gas, and have a workforce of some 115,000 employees.
In addition to owning one of the world’s largest
retail and technology. “For all these shipping shipping companies, the Group is involved in a wide
range of activities in the energy, logistics, retail and
activities, with their unique business models, manufacturing industries

there is a built-in commodity element (with a
heavy cost focus) versus a niche
element (with a strong service focus).”

Source : Company website; Lorange (2009)



ADAPTORS The grasshoppers of the industry bypass the inertia
imperative thanks to limited balance sheets. They jump from one latent
segment to the next, exploiting volatility and low barriers to operate.

Exhibit: TCC case study

TCC "Company of the Year" Finalist
Company profile:
The Containership Company (TCC) was founded in
TCC is honored to be short-listed as one of just 2009 by Jakob Tolstrup-Møller and Captain Franck
Kayser, who both have a long history in container
4 finalists for "Company of the Year" by Lloyds shipping. The first sailing left Taicang port close to
List Global Awards 2010. The award is for the Shanghai, on 17th April. In September 2010 Ningbo
will be added to the service portfolio providing a
shipping firm that best adapted to the direct service to Los Angeles. The business model

conditions in 2009 by trimming costs,
is focused on simplicity and transparency.

proving nimble in negotiations with partners
and generally finding creative solutions to
prepare the business for a more robust market.

Source : Lloyds



FIRST MOVERS Fast and agile market developers are able to exploit
the delay in commoditization of new market openings. With high growth
emerging economies in Asia, and eventually Africa, the potential is great.

Exhibit: Seaspan case study

As with its first-mover advantage in China’s
Company profile:
Seaspan Corporation charters containerships
exploding container market, serious financial pursuant to long-term, fixed-rate time charters to

problems facing Germany’s container ship
major liner companies. It currently owns a large
modern fully contracted fleet of 68 vessels that are
owning companies will “play into the hands” of entered into long-term contracts. All vessels are

Seaspan, one of the world’s largest non-German
deployed on fixed rate charters to take advantage of
the stable cash flow and high utilization rates that
container ship owners, its chief executive says. are associated with long-term time charters.

“We prefer to go for new ships, because there
are certain advantages to going for your own
ship design. We’re looking at opportunities and
we’re quite bullish.” Mr Wang tells FT.
Source : Financial Times, 16 August 2010


Opportunity Discovery │ Conclusion

NEW MARGINS New business development will become the channel to
sustaining profitability, as traditional markets commoditize further

SUCCESSION TO THE THRONE The customer will finally be king, as
specialized players dive deeper into the value creation of their clients

HOLDING HANDS Horizontal rather than vertical integration enables a
new wave of strategic partnerships with clients, suppliers and competitors

STRATEGIZING As players begin to leverage their lean operations,
management will require a change focus towards new growth avenues

MANDATORY CREATIVITY The time is over when shipping could
ignore R&D. Senior executives are, and should be, frantic about innovation

NAVIGATING HORIZONS The changing landscape entails an ongoing
opportunistic mapping of internal strengths and new market opportunities


CLOSING Inertia is deadly, but is it dead? The collective size of the
maritime industries may appear so gigantic that some people don’t observe
its movements. Instead they choose to focus on nurturing status quo – the
operations, the fleets, and the current market positions.

However, quick change of focus from latitude to altitude reveals some
remarkable new horizons: Markets defined by segment, not commodity;
Shipping companies with no ships; Digital voyage management, etc.

To navigate the new horizons successfully, requires a determined
management of change. This begins with management accepting change.


ABOUT CATALYST Catalyst is an international management consulting
firm focusing on strategy, innovation and change. The company was
founded in Copenhagen in 2001 with the ambition to create a different
consulting offering. - An offering based on growth-driven business model
innovation, go-to-market strategies, and strong client involvement.

Catalyst caters to a wide range of international companies, primarily within
the maritime, energy, and green technology industries.

For more information, please contact us directly by e-mail or phone.
info@catalyst.dk or +45 3543 3277.


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Navigating Horizons - Catalyst Maritime Trend study 2010

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