How tug operators can deliver high-quality services in a competitive market

The towage sector holds a unique position within the supply chain, carrying out an essential, though often underappreciated and overlooked service. As the shipping industry comes under new and increasing pressures – higher fuel costs, inflation and a global economy moving towards recession – the towage sector is uniquely positioned to be shaped by these pressures, but also mitigate some of the consequences for others in the value chain.

As custodians of the first and last mile of vessel journeys, towage providers can be vulnerable to changing market forces and trends. However, there are also benefits, as tug and towage operators also have the opportunity to actively shape the sector’s own evolution to best deliver on its customers’ demands both today and in the long-term.

Providers must balance the improvement of the operational capabilities of crews and vessels with evolving their business models, processes and technical capabilities to deal with these market challenges, all without compromising on the expectations of its customers regarding cost, timeliness or safety of the service. This challenge is particularly acute as the global port ecosystem has been directly impacted by rising costs and inflationary pressures, forcing towage operators to face hard decisions about how to recover costs through increased tariffs.

Raising tariffs may be essential to ensure business operations can carry on as usual, but it could produce a knock-on effect on costs through the value chain. This means there is even more expectation for towage providers’ services to be of the highest standard when customers call at a port. Standardised operations and efficient service delivery, from the smallest procedural considerations to planning for the largest jobs, are therefore becoming an even more important differentiator in a highly competitive market.

Towage operators must use their experience across sectors, ports and vessels to prioritise the development of standardised processes and procedures across the full span of their operations. This helps to ensure there are ‘no surprises’ when operating and servicing customers and is also the basis and prerequisite for any successful commercial differentiation. It is increasingly important to apply lessons learned and experiences from different ports and sectors across the operations of a global towage fleet – especially as services become more commoditised around the world.

Having the right people and a future proof fleet composition is fundamentally important for the modern towage sector’s success. Svitzer benefits from a global reach and operates a fleet of around 450 tugs in more than 120 ports on five continents. In each market, Svitzer remains at the mercy of the volatile situation that other operators face. Prices will rise at different rates in different markets around the world as a result of the varying combination of factors in each location, but they will nevertheless increase.

However, Svitzer is able to deploy proven strategies from across its global business, alongside local knowledge, to tackle the challenges faced by the business and ensure customers’ needs are always met in the first and last mile of their voyages. Across ports, Svitzer has taken action to mitigate price rises by restricting speed to eight knots during mobilisation and demobilisation when at all possible. This has an immediate effect on fuel consumption and fuel costs, but very importantly it also significantly reduces CO2 emissions. As such, it resonates well with Svitzer’s ambitious decarbonisation strategy and target of reaching net zero CO2 emissions. At Svitzer, we are convinced that driving concrete action to decarbonise is a valued differentiator for our customers and a necessity for the markets and societies we operate in.

Constantly reviewing the fleet set up helps to ensure cost efficiency without sacrificing commitments on safety and customer service. Professional operations are essential in the towage sector and must include crew training, maintaining healthy relationships with regional port authorities, pilots and other stakeholders to navigate the local environment, complying with new and emerging regulations, and not least meeting sustainability commitments. As the towage sector becomes increasingly visible to charterers and their stakeholders, a greater onus is needed on efficiently run operations that deliver high-quality customer service.

Some level of raising tariffs is the right response to increased cost pressures on the towage sector, as it helps ensure that operators can continue to deliver services safely and efficiently for our customers. But the towage sector also needs to do its part, by continuously adopting a more professional approach to operations, to advance standards, improve customer service and tangibly contribute to carbon emissions reduction. This is a serious and very real challenge, but also one that the sector needs to tackle as it continues to fulfil its vital role in the supply chain during especially challenging times in the global economy and society.
Source: By Kasper Karlsen, Global COO at Svitzer, arranged on behalf of Hellenic Shipping News Worldwide (www.hellenicshippingnews.com)