Bjørn Højgaard: Meeting challenge with flexibility and focus
Bjørn Højgaard, CEO of shipmanager Anglo-Eastern, talks to Leadership Insights about post-pandemic crewing challenges and supporting shipowners on the path to decarbonisation.
You manage close to 700 vessels and more than 33,000 crew. Did that scale help or hinder your business during the pandemic, the supply chain crisis and the Ukraine conflict?
Ship management is as global as a business can be. That gives us some unique challenges but also opportunities. The lesson from the last two or three years is to make sure you’re not too tethered to one specific place and that you have the flexibility to adjust your plans to the situation on the ground. That goes for where we have offices, where we do banking and where we make crew changes.
How did you deal with the ever-shifting restrictions on crew movements caused by Covid and subsequent geopolitical tensions?
One of the ripple effects of COVID has been a propensity to shop around. People get their crews from wherever makes more sense for them. A good example would be in April 2021 when the Delta variant was prevalent in India. Every owner in the world was trying to get away from Indian crew and replace them with seafarers from China, which had zero COVID. Later China locked down and India overcame Delta, so everyone had to quickly reverse that position.
Then when Ukraine was invaded in February, people who had a very large part of their crewing contingent from Russia and Ukraine were scrambling to find alternatives. Perhaps from other places in East Europe, or India or the Philippines. At that time China wasn’t really an option because of the difficulties of moving Chinese crew around the world.
So, we’ve seen growing intensity in making crew choices in response to restrictions in different countries. And if suddenly you’re going around and offering jobs elsewhere, it changes the market. We have felt the need to be more proactive in making sure both that the crewing pool remains intact, and that the people in the pool are not left behind.
Has the need for future skills for decarbonisation and digitalisation also affected how you recruit seafarers?
I don’t think we’re recruiting different skills because we always train from the ground up. But we have adjusted training programmes to address future fuels. The first big area is LNG and dual-fuel ships, especially on dry ships where the crew has not been used to dealing with gaseous fuels. There’s a lot to be done to make sure that they’re comfortable and competent when handing those fuels.
But those programmes are not rocket science. You need to have simulators, you need some onboard familiarisation and some bunkering experience. We are rolling out that training to make sure that people are ready for it. The next thing will be ammonia, methanol, and hydrogen – we already have a couple of small ships that deal with hydrogen – but again, it’s not an insurmountable challenge to train the people that are in the workforce today to manage that transition.
A couple of things are working in our favour. One is that we are going to see sort of a plethora of low-Earth orbiting satellites deployed. That means that connectivity at sea is going to go up by a hundred times in terms of bandwidth in the next two years. People on board are going to be connected in a very real sense with colleagues on shore – and owners, charterers, and suppliers of technology and fuels – in a way that just hasn’t been possible before.
And how are you and your clients viewing that technology transition – increased connectivity as well as the energy transition?
We have around 60 clients. Some have no interest in leading that development, but others are very cutting edge. By working with these cutting-edge clients we have an insight into each of these fields and we have workstreams covering all those areas.
In our case ammonia seems to be more popular. We have probably 20 ships under construction or contracted to be built that are prepared for ammonia as a dual-fuel solution A few are looking into methanol and we also have vessels with Flettner rotors or air lubrication.
That’s still quite a broad range. What will determine how those choices are narrowed down in the future?
When the fuel is available in the right places at the right time, driven by green transformation and finance. Market-based measures are the real key to the transition. We must get to a place where economics drives the imperative for change. We don’t know where it will go but that trend is unmistakable. And I think ship owners by and large, probably want certainty more than low cost.
Carbon markets will be useful for ship owners to reduce their exposure to volatility through market-based measures over time. That can only be positive; one of the biggest challenges to shipowners only is the fact that shipping is exceptionally volatile. If you can somehow manage that, then you can be a very successful protagonist in the in the industry.
What about your own efforts to make operations greener?
In the short term, it’s all about operational efficiencies. No matter how these market-based measures are going to be rolled out, the one conclusion you cannot escape is that the cost of propulsion will go up. So, we are making sure that each ship and each leg of every voyage is looked at in a way that optimises speed versus fuel consumption, taking advantage of seasonality, weather and currents. On the engine side, it’s about making sure that you optimise your equipment to burn as little as possible and make sure that maintenance is also optimised.
In the medium term we’re going to see the transition to new fuels. That’s going to mean a lot in terms of design and technology and training. And long-term, maybe 50 years from now, I think nuclear is going to be part of the solution. We are quite involved with companies like Core Power and Seaborg. We need something that is firm as a baseload that isn’t intermittent like renewables, that is low carbon and that is safe. Nuclear [power] fits all those requirements.
What’s your approach to advancing your digital capabilities?
The enemy of machine learning is poor data, and that’s where we want to start. Luckily, communication, processing power and sensors are progressing very fast. Ships managed by Anglo-Eastern carry two and a half percent of the world’s goods, so the data is enormous. It’s about ensuring the quality of that data and then attacking it with the proper machine learning.
Returning to the seafarer and society in general – how are you working to ensure a just transition alongside the technical changes that are coming to shipping?
A just transition means leaving no one behind. That comes back to good training and good politics, making sure you embrace diversity and are equitable and inclusive in everything you do. Unfortunately, that is one thing in shipping that is always difficult, with people at sea doing fantastic work but being out of sight. I’m very mindful that we shouldn’t make victims out of seafarers, but we have to continue to ensure they have the resources and conditions on board that allow them to be successful – and thereby impact all our lives through improved trade and global collaboration.
What we have seen in terms of globalisation in last 30-40 years is down to shipping being so efficient, cost effective and seamless. And through that we have grown the economic pie and taken people out of poverty. Shipping continues to play a positive role that would not be possible without seafarers.
In a world where we seem to have bigger challenges than I can remember in the last 50 years, it is easy to forget the best that everyone can do is to get the small things right. We need to get on with it and make sure our little part of the picture gets solved in a constructive way that helps the bigger picture resolve.