Pivoting the Maritime Supply Chain to Embrace the New Normal

By Chris McMenemy – CEO of Cleanship

Whilst almost every sector is suffering as a result of COVID-19, the maritime sector has faced a particularly tumultuous 2020 – with the impact being felt across the entirety of the sector’s supply chain. What was billed as a high growth year for the supply chain – owing to the introduction of the game-changing IMO2020 legislation – very quickly became a year of sharp contraction, with most maritime suppliers struggling for survival.

However, unlike other sectors, the maritime sector’s economic crisis was not initiated due to the global lockdowns of mid-March. Indeed, the maritime sector started to feel the pain of COVID-19 long before this – in mid-January – as COVID-19 gripped tightly on mainland China, and production, shipyard capacity and dockings ground to a halt.

Even as China started to recover from its COVID-19 crisis in late Q1, the rest of world was only beginning theirs – with much of the western world having to very suddenly transition to working from home - creating a snowball effect of slow production and low shipping demand in Q1, into the inability of shipping professionals to travel and, as a result, delayed and postponed contract awards to the supply chain from Q2 onwards.

Whilst some aspects of shipping have started to see some recovery from Q3 onwards, from our own experience, there has been little to no positive impact on the down-stream supply chain. Owners and operators are, understandably, continuing to postpone or outright cancel non-essential expenditure – which, given the state of the global economy, is unlikely to change any time soon.

There also remains a serious doubt on whether any international travel, and, more importantly, any maritime conferences will take place whatsoever throughout 2021 - creating an existential threat to the very way that the majority of maritime suppliers generate business – shaking hands…

This, unfortunately, looks set to be the “new normal” for the maritime industry – no conference parties, no shaking hands, and, critically, commoditisation of the majority of the supply chain as “unnecessary expenditure” by our collective end-clients.

The maritime sector is not alone in this regard – the majority of traditional sectors are facing a paradigm shift in how business is generated, conducted and delivered, and, like those sectors, the measure of success, or indeed simply survival, will be in our supply chain’s willingness to embrace this new normal and run with it.

On an almost collective basis, world leading CEOs and leaders agree that the fundamentals of business have changed for good. Working from home, minimised business travel and an accelerated shift towards digitalisation have and will continue to become be the norm, and companies who are simply hoping to ride out the COVID-19 storm and return to the status-quo are likely to be the ones left behind.

Businesses need to transition quickly to this new normal, and pivot and innovate not only their product offerings, but in many cases, the entire way they conduct their business – and this is no truer than in the maritime sector.

Whilst the sudden collapse of the supply chain hit us fairly hard at Cleanship, we sought to embrace the new normal as early as possible and focused on innovation and diversification as our strategy for not only survival, but to flourish on the other side. Thankfully, our company ethos was already somewhat departed from the maritime status-quo – we have always sought to push the boundaries in innovation and disruption anyway – which helped our own transition.

One of the first things we sought to achieve was to diversify our product and service range, and indeed our brand as a whole, away from being exclusively an “unnecessary expenditure” service supplier to the maritime industry, into other industrial sectors. We re-defined and re-trained several our existing personnel groups, and brought in one or two cross sector specialists, which has helped transform our service portfolio.

By pivoting our existing capabilities into other sectors, we have not only de-risked our revenue streams, but opened a whole new range of opportunities that we were not even considering 12 months ago.

We were also blessed with having a very modern, digitally focused business development and marketing department pre-COVID too, which helped us overcome one of the biggest transitions facing most maritime supplies; pivoting from the traditional maritime business development approach (such as exhibiting at large maritime trade shows, mingling with potential clients at conferences and “doing the rounds” with clients) to an environment where none of that is possible.

We, like many other suppliers, have discovered that prospective clients are considerably less likely to agree to a virtual sales pitch than a physical pitch – and are largely shifting their buying habits as a result of no longer having their attention taken up by sales visits. The next generation of decision makers (whom are already ascending to key roles) are also much less focused on brand and/or sales-person loyalty and are more focused on value proposition, brand purpose and quality of digital content. This means that companies need to transition from traditional hand shaking, “relationship-builder” selling techniques to proactive digital engagement.

Indeed, in many ways our business development and marketing had been following this approach for several years, which led us to diversify further, and launch Tide Business Growth (www.tidecreative.io) – our new brand and marketing company, which specialises in helping maritime businesses transition their business development, branding and marketing to the new normal.

Finally, we realised that a lot of the journeys that we have had to make on our own over the years -  building a reliable client base, implementing advanced IT systems and software and piecing together a very diverse and capable engineering team - were all things that we could provide to other organisations - be it startups or even existing businesses struggling to rebound. Placing external value on traditional business functions, or departments, has, for us at least, unearthed a number of new and exciting opportunities.

History has shown that the organisations that best survive an economic crisis, are the ones that innovate and pivot in the midst of adversity. Time will tell if this is strategy is equally as valid in the present, and whether the steps that we have taken will succeed, but one thing is for sure, waiting for the status-quo to return is a very risky strategy.