Crew Travel – a Round Table Debate

The annual SMI Crew Travel Round Table Debate saw seven crew travel representatives give their views on the latest developments and issues facing the Marine & Offshore travel market. Kindly hosted by ATPI and with questions from SMI Editor Samantha Giltrow, participants were: Mark Taylor, Operational Director, GMT; Pippa Ganderton, Director of Global Account Management and Strategy, ATPI; Sverre Gade Husby, Managing Director, G Travel International; Dmitrii Beliakov, Chief Executive Officer, C Teleport; Tony Sofianos, Chief Executive Officer, Wings Travel Management; Eleftheria Letsiou, Head of Global Account Management for Shipping, ATPI; Donna Jefferies, Marine Project Manager, Cresta Marine Travel.

Samantha Giltrow
Obviously there has been a lot in the media in general, recently, about the carbon frootprint and the impact it is having on the environment. Travelling is obviously essential for people to move around the world and flying is a way of doing that. How are you addressing your clients’ concerns and the cultural rise of Flygskam, or ‘flight shaming’?

Pippa Ganderton

Travel, and flying in particular, is essential for the marine industry and the crew especially. It is a must to have the expertise that is required to man vessels, but of course we need sustainability programmes to reduce the amount of travel to necessary travel. There are certainly sustainability programmes that can help the industry. We work closely with a lot of our clients on their sustainability programmes to help them measure their CO2 emissions, look at clever routings, airlines, airports and such. When we look at shipping, there are areas where shipping should be focused on sustainability in terms of the vessels, and their environmental impact, and not just focus on the travel piece. 


Dmitrii Beliakov

The global airline industry produces only 2% of the world’s CO2 and at the same time, the largest source of CO2 is energy production and if we look at the stats for bigger economies like the UK or US, the UK produces more than 50% of its energy from fossil fuels and in the US about 80%. I think it is much more reasonable to address issues of using fossil fuels in energy production on a country level, where we can actually make some difference instead of focusing on a very niche market. So, the global airline industry is just 2% but marine travel is just a tiny, tiny fraction. On top of that, we as managers of travel agencies already optimise CO2 in a sense that we help shipping companies who contribute to CO2 production to optimise their port calls, not to call ports where the crew is but rather make their trips more efficient. As C Teleport, we work on routing improvements so whenever our customers request a flight we have a certain algorithm that calculates the efficient time and we actually filter out the flights that are inefficient even if the flight is very cheap.

Samantha Giltrow

Are more people more conscious about taking direct flights now would you say?

Mark Taylor

I think they are starting to look at other modes of transport. As rail might improve, not necessarily in the UK but in other areas, they are looking at maybe investigating the options of moving people around on rail or ground transportation which might be more effective than doing air travel. We have started getting requests about maximising rail and maximising how you ensure that you are not doing multiple transfers for the same crew. It has become quite a big topic within the shipmanagement companies as well. On the shipmanagement side there is a lot of office-based travel. People going around for training etc. So, the rise in virtual training is building.

Samantha Giltrow

So, people are really thinking do I need to travel for this?

Mark Taylor

100%, but the technology needs to be up to scratch as well.

Sverre Gade Husby

Whether we like it or not, this is affecting our industry quite a lot. In the Swedish market, air travel was down by close to 12% in 2019 compared to 2018. When people have meetings now they go by train. Recently, Goldman Sachs said it was stopping funding for exploration of the Arctic Circle – the change is happening. We are seeing the banks in Norway give better rates to green companies. How many of the TMCs here actually put the clients CO2 emissions into their own company reports?

Mark Taylor

Currently we do it ad hoc when we get asked for it, but we are collecting that data too. I think it is going to become more prevalent. You can actually submit the CO2 at the point of offering the flight so they can make an informed decision.

Sverre Gade Husby

As a company, we have put all the clients’ emissions into our business statement. It doesn’t matter if we reduce 20 flights for our sales people. It has to be a change with the clients.

Pippa Ganderton

I think there’s an element here of the typical dilemma of shipping that you’ve got some bigger, maybe more internationally established, shipping companies and shipmanagement companies that have embraced a sustainability programme. Then you’ve got others that are not quite there yet or they don’t dare to make the changes or have that focus because they are very cost-driven still and impacted by other things in the industry. What we’ve seen from our corporate clients, was that there was a demand for CO2 emission reporting a lot earlier because they are being driven to demonstrate what they are doing with those things, and shipping is now catching up.

Mark Taylor

If you are doing a crew change or a port change inefficiently, that has a massive impact on their budgeting for the ship as well.

Samantha Giltrow

Sverre, how will you counteract that 12% drop?

Sverre Gade Husby

You can’t counteract that. You just have to have a proper solution in the TMC. We see a lot of the Swedish near coast carriers now not doing flights for a crew change. They have started to use buses and trains. We see the demand for flights in some markets is low. My fear is that we as an industry, as always, are running late. We haven’t sat down as an industry and said ‘how can we tackle this, how should we embrace it, and how can we take a lead on it?’ We have smart routing for smart changes. It’s also about sitting down with the client and saying have you thought about how you can reduce your flights?

Pippa Ganderton

There is an element of the sustainability piece that goes over into wellbeing because if you are that crew member and you are being changed in Asia and you’ve got a three, four, five-hour journey home rather than a journey with a change and 13 or 15 flight hours, that is a massive difference on your morale and wellbeing. I appreciate this is often not possible.

Tony Sofianos

I just think economics is driving everything at this point. The oil and gas and marine industries are incredibly under pressure and if they can get a Filipino for half the price versus an American, that is what they are going to do. The pressure on costs at the moment is just incredible.

Dmitrii Beliakov

As soon as we make it a financial problem for ship owners it will self-regulate. One of the things we are promoting amongst our customers is that your financial spending is composed of two elements – how many miles you are flying and what is the cost per mile. What is interesting is no matter how you slice it, the cost per mile is fairly static across the board. I would agree with Tony that it is purely a financial topic.

Sverre Gade Husby

It is becoming a financial topic for ship owners. One of the biggest problems is that ship owners can save a lot of CO2 just by pulling back the throttle of the vessel by two knots. They are going full speed down to Lagos and waiting three weeks just to get into the harbour. So, yes we can optimise their travel but there are other factors.

Eleftheria Letsiou

My understanding is that shipping companies have had to concentrate on the sulphur cap deadline in January 2020 so they may not have put the time or resources into looking at other types of CO2 emission reductions. But, yes, it could be our advice that could help them add something on top of that. A lot of shipping and shipmanagement companies produce their yearly sustainability reports, and it is up to TMCs to make them a little bit more conscious on environmental-friendly things options. It’s up to them to add sustainability to their travel initially but it’s up to us to follow.

Samantha Giltrow

How could you address this as a sector?

Sverre Gade Husby

We need to do something that we don’t often do which is to sit down and discuss this. We should have at least an industry standard. The marine travel industry is a fairly small playground really so it should be doable to have a task unit to sit down and address this. Sustainability isn’t just about CO2. If you follow the UN charter there are 14 topics on sustainability.

Pippa Ganderton

It has been a huge topic at all the business events recently.

Donna Jefferies

We have found that a lot of people, especially in France, who are flying out to meet ships – rather than flying from the domestic airports, they are using rail much more.

Sverre Gade Husby

It is easier to deal with clients if it is a ship owner that is operating the vessel. When you have a ship owner that has a shipmanagement company and a crew management company the responsibility becomes grey.

Samantha Giltrow

Although Duty of Care and corporate responsibility has always been a major focus and high on most companies’ agendas with the recent escalation of tensions within the Middle East and ongoing kidnapping and ransom from piracy in this region amongst other issues around the world, how robust and essential is the DOC service provided by TMCs today?

Pippa Ganderton

It is hugely essential. Clients have high expectations. Right now, we have got everything from purely political to geopolitical to environmental issues that are on the table at the beginning of a new decade. There are bush fires in Australia, the Iran situation, the volcano in Manila, and Coronavirus, so it’s a really big and important topic and obviously there’s an expectation that the travel management company will provide information about those events that inform the client what the impact is on their crew.

Sverre Gade Husby

Duty of Care has been very important, especially for the oil majors and shipping companies, since the law was put on the table but on the TMC part, probably everyone around this table has a DOC partner that has the capability to do everything including security and extraction. Is the client interested in it? No.

Pippa Ganderton

I think they are, to a degree.

Sverre Gade Husby

It’s very rare that an oil major is buying their Duty of Care programme from us.

Pippa Ganderton

That’s fine if they are buying it from a third party. We work together with them.

Mark Taylor

Or they have their own. They are all doing slightly different things but at the end of the day it’s just taking the data in and seeing where those people are.

Eleftheria Letsiou

For many of our clients it is important that they can rely on us to get correct and timely information when a risk or threat arises. This includes knowing within minutes which travellers may be affected and getting accurate updates and advice on how they could handle things, and that we will put control in place to follow their instructions.

Mark Taylor

I think it is about being proactive as opposed to reactive.

Tony Sofianos

I think Duty of Care is as strong as your weakest link. It is not our business strategy. We chose not to partner with anyone because if, for example, you have a partner in Lagos, there is literally a sticker on the door. I think there needs to be more careful consideration in choosing partners and standards need to be maintained.

Pippa Ganderton

A number of TMCs will be called out if they are not good enough on the due diligence and compliance because a lot of RFPs will demand visibility of those elements for all of the offices they are operating with. You’ve got to choose carefully.

Dmitrii Beliakov

Being a new kid on the block, a couple of years ago we were thinking how we could approach the problem and we were researching who might be the provider of such services for our platform and we were not happy at all with the quality of services because the P & R push is not enough at all. They have no clue about real-time information, or they fail to provide it to the extent that we require. Even the airlines fail to update us on what is really happening. We ended up doing something on our own. We have a mobile app where seafarers that are travelling, we can get their location information and improve the information that we get from airlines. In order to fix this on a global scale, I think there is still a technology question. I think it can be solved by technology. We probably can talk with airlines to improve their data so we can much more precisely determine where passengers are, and as the adoption of apps improves amongst passengers themselves when the apps have this capability, we will have the perfect picture.

Donna Jefferies

I have found that the security companies that I look after, obviously since piracy died down a bit, needed to broaden their reach to keep their business going. So, what a lot of them have started to do is they offer personal protection for people who are onboard the ships, and this comes down to sustainability as well. A lot of them employ people on the ground in other countries to man and look after the ships in port, so maybe tying up with one of the security companies might be worthwhile, plus they have the money to invest in the technology which a few have already done.

Samantha Giltrow

Have we reached the point in the client/TMC relationship cycle whereby a ‘fit for purpose’ marine specific product is essential to the day to day requirements of crew managers and travel bookers within the shipping industry and has the time come that a marine centric self-booking tool will be mandatory on all future RFPs?

Dmitrii Beliakov

I think it’s not really the question of if but when. We don’t have a non-online solution for our customers so everything we sell is purely online. What we see is there is a huge adoption on the smaller and medium size businesses. The loyalty of these customers is pretty extraordinary. Larger customers are usually pretty loyal to their current providers, for many reasons. Sometimes it is just personal relationships and sometimes it is just the risk assessment because the larger TMCs have a fantastic level of service and a very personal service and this is exactly the product they are buying. The tasks that we are solving as a TMC are really complicated but they can be automated. It is just a matter of how soon the technology will catch up with the quality of service that the offline travel agent provides. I think we are somewhere at the level of 85% or so and I would argue that in three to five years it will be very close to 99%. My vision for five to 10 years would be that we will make another step in TMC businesses. Travel doesn’t really happen from airport A to airport B but it happens from the home location of the passenger to the port or to the vessel. The travel solution must be much more integrated and much better analysed. I would argue that in five to 10 years more than half of the business in the marine industry will be moved by online solutions, but it is just the beginning.

Sverre Gade Husby

Where you say you are struggling with the larger client is that while you provide travel for them, we provide a full solution and have done for the last 10 to 15 years. We call it ‘from home to cabin’. Online travel for marine has been available since around 2008. For the larger clients, now they tend to push more and more of the in-house offices’ workload over to us because of cost reduction. So, there is a lot of work that we do on behalf of the client. Yes, it can be automated down the line, but will there be a proper return on investment, I’m not sure. All around the table here we have fit for purpose tech, but that is just a fraction of the business.

Pippa Ganderton

The obvious thing is that technology has grown and technology in what we do every day has definitely increased from where it was five to 10 years ago. We do embrace it and it drives efficiencies for us as well. Where it makes sense, for the right type of itinerary, and as long as the content is there for rail and various other things, yes, but it will never fulfil everything in my opinion.

Tony Sofianos

We had a client who changed the reservation 29 times! Technology can solve anything but I think the traditional marine agent will be one of the last industries to go.

Mark Taylor

The end-to-end technology has been a dream for many years.

Tony Sofianos

I agree the crew management side is technology driven but I’m talking about getting the people on and off the ships. It is pretty complex.

Mark Taylor

There is going to be a definite ramp up of online adoption but there will still be elements of our different businesses that ultimately need a person.

Donna Jefferies

I don’t think technology can get away from reservations consultants who are so experienced in the world of marine. Technology can’t match someone’s experiences on routes and destinations. Yes, it is great for point to point but anything a bit more complex, you need your staff there.

Dmitrii Beliakov

I completely agree – until it is actually possible. Marine travel is extremely complicated and that’s why all the tools on the market previously failed miserably because they were not able to do changes and cancellations. We came up with the algorithm that does it automatically.

Mark Taylor

The flip problem is the experience. It’s getting people who want to go into marine travel. Generally, there is limited pool of people.

Dmitrii Beliakov

Customers will always demand a lower fee. There is always a massive pressure on our margins and the problem is that no matter how you look at it, the biggest driver of our fees is the cost component so I think software actually gives us all opportunity to reduce this cost.

Donna Jefferies

Although we have the technology there, I still look at everything that is done online. Clients then have the human intervention and know somebody is looking to make sure they are getting the best.

Samantha Giltrow

With the political Brexit issues seemingly resolved and the UK exit looming, how ready are shipping companies and their TMCs for the potential consequences of this and what needs to be done now to ensure minimum disruption to the seafarer?

Mark Taylor

I don’t think much has changed since this time last year.

Pippa Ganderton

Because, other than Brexit is going to happen, nothing has been agreed or passed legislation yet. There will be a period of change and during that period, as things get decided, there will be decisions and communications that go out but there will be nothing that happens from one day to another that would upset trade and industry.

Sverre Gade Husby

For the seafarers, I don’t see anything changing.

Samantha Giltrow

There has been a lot of consolidation of TMCs over the past few years. Is that going to continue?

Mark Taylor

Yes.

Sverre Gade Husby

What you see is other TMCs coming into the market and trying to take our elephant share quite quickly.

Pippa Ganderton

Sometimes they will go in with price, and over time clients realise the service and the expertise isn’t there and business comes back again.

Mark Taylor

It has always been cyclical as well. When corporate travel goes down, they start looking at other areas where they can make money.

Sverre Gade Husby

I don’t think consolidation will stop and the smaller players will struggle. I think we will see more alliances.

Pippa Ganderton

It is not just unique to the travel industry. The shipping industry is rife with consolidation.

Samantha Giltrow

Has the demand for credit facilities grown from your clients and how are you handling such requests?

Pippa Ganderton

We are driven by airline BSP by and large. It is the biggest invoice we carry every month and it is non-negotiable. It differs by country and can range from fortnightly, weekly to even daily, but it is going to go down rather than up and clients, irrespective of the industry, need to understand that.

Mark Taylor

Clients don’t appreciate that we are effectively acting as a bank in this scenario. We are towards the end of the payment cycle but without the crew the ship doesn’t move.

Sverre Gade Husby

We are seeing in the US part of the market, especially for the public listed companies, it is easier to embrace the payment cycles and then if they don’t have the card solution they are willing to put a six-week credit into our account.

Pippa Ganderton

The biggest problem is where you agree 30 days but they still don’t take that seriously.

Mark Taylor

It’s assessing that risk on whether you want  to take that business on or not.

Eleftheria Letsiou

This is related to the previous topic. There have been a lot of acquisitions for survival because some competition were very light on credit terms. What I would like to see happening is competitors learning from such mistakes and becoming more strict.

Mark Taylor

I think there is an opportunity to collaborate on more information sharing between us.

Samantha Giltrow

Ladies and gentlemen, thank you for your time.