Richard Janssen, ISU President
The ISU in 2019
This morning I am going to give a slightly different speech. I am not going to give a full assessment of the operational issues or the business environment and the financial state of the salvage industry. Having said that, I am bound to say here, that the environment remains difficult for our members and the operational challenges we face, such as containership fires, are very real and dangerous.
Instead, I am going to discuss how the ISU, and the salvage industry which it represents, is regarded by its stakeholders and how it is responding and trying to adopt an approach that recognises the realities of the business environment. The process starts here with a demonstration of our willingness to be transparent and tell you what the shipping industry thinks of our industry.
The context for this is the strategy work which ISU undertook last year. Those of you who were here at the last Salvage and Wreck Conference will remember Charo setting out the ISU’s analysis of the current situation from the perspective of both our clients who need salvage services and the ISU’s members who provide those services.
This analysis made us decide to gently “re-position” our industry. I say “gently” because there was no sense that the ISU or its members needed fundamental change. But we did agree that the old model of tugs on station and the pursuit of LOF above other considerations did not match the realities of the current environment.
We decided to make an unequivocal statement that the ISU’s purpose is to be the credible, trusted and unified global voice of its members who facilitate world trade by providing marine services which save life, protect the environment, mitigate risk and reduce loss.
And we said we would encourage high standards of operation and conduct; promote the value of our members’ services including protection of the marine environment. We would be a source of information and expertise and work with relevant organisations to improve delivery of marine services and safety at sea.
We have also produced a new visual identity for ISU – not a re-branding, but a “re-fresh.” I hope that you have already seen the new logo.
And we said we would engage with shipowners, insurers and other key stakeholders to represent our members’ interests. And today I will describe some of the work that we have done to create the foundations for that improved engagement.
Professional opinion research
The ISU Executive Committee already had a good idea last year of how the ISU and the salvage industry are regarded but we also recognised the value of undertaking formal research into opinions and perceptions about the industry.
So we decided to commission research from a professional, accredited market research organisation. The project was in two stages. First a set of qualitative, in-depth interviews were conducted with a small number of key stakeholders and then a quantitative survey was undertaken of a wider set of responders. This was an online survey using our research firm’s own platform and analytics. We approached some 400 respondents directly and after several prompts received just over 100 responses.
25% were ISU full members, 37% were associate members, 2% affiliate members, 14% P&I Club representatives, 4% property insurers and 18% wider shipping industry representatives. There was a good mix of professionals but clearly property insurers were not so well represented which is a shame and a missed opportunity given their historic concerns about the salvage industry.
We wanted the survey to be international. Inevitably with a UK based organisation and a high concentration of shipping related services in the UK there was a UK-bias which represented about half of the respondents. The rest were split evenly between Europe and the rest of the world including Asia, the Middle East, Africa and the Americas.
I am sure many of the audience here today participated in the research and, if you did, thank you very much for taking the time to complete the survey. Response levels were certainly satisfactory and statistically valid.
The headline results of the survey can be assessed under the overall satisfaction that respondents have with the ISU and this was high at 7.44 out of a maximum score of 10.
By stakeholder category, satisfaction levels were 7.76 for full ISU members, 7.19 for associate ISU members and 7.49 for wider industry participants. Our research partner assured us that a commercial, consumer-facing organisation receiving these kind of results would be very pleased.
The results showed that ISU is considered credible and trustworthy; is thought to participate in appropriate forums and that it promotes the industry and has an international outlook and provides networking opportunities. Overall, 40% of respondents felt their relationship with ISU was improving; 54% said the relationship was static and 6% reported it to be declining.
These are strong results which suggest the ISU is preforming well and is well regarded. But of course, we must guard against complacency and there is always more that can be done to improve.
The survey’s detailed results showed us that the most important areas of focus for ISU should be: to work in the best interests of its members; to add value to industry; to engage in environmental protection issues and to demonstrate transparency.
One of the analyses that we conducted was to identify where the widest gaps were between respondents’ perception of ISU performance against the importance of the issue at hand and these were: to be accessible; to demonstrate transparency and dialogue; to be supportive of other organisations; to provide value to the salvage industry and in engagement on environmental protection issues. This is at the heart of the findings and shows us where we need to concentrate our efforts.
Regarding communications, 100% of ISU members find the new core purpose interesting and engaging and overall the score for the question “Does ISU provide effective communications?” is high at 7.32 out of 10. Wider industry stakeholders have the lowest perception of ISU providing effective communications, but this is still high at 7.19.
On the question of “how does ISU communicate compared with your expectations?” 67% of respondents said “as expected”; 20% “better”; 8% “worse” and the balance said they “don’t know.”
The survey also explored perceptions of the salvage industry as well as the ISU as a trade association. For the overall perception of the professional salvage industry the highest scores were for the industry being: competent; reliable and safe. I find that very encouraging and it should be the foundation of our activities and messaging. It would be very worrying if those scores were low.
However, there were lower scores for professional salvors being trustworthy and providing value for money. That is not comfortable for us and is offered here in the spirit of transparency.
The ISU response to the findings
Of course with any work like this the value is in how you respond to what you are being told and how you use the findings. One of the great positives is that the survey confirms that the ISU strategy is appropriate for the business context in which we find ourselves. Nothing in the results suggests that we have mis-understood the important issues or attitudes.
The scores are generally high and the results do not give major cause for concern about the ISU’s behaviour and direction. The survey confirms that there is no need for a fundamental shift or “re-think” about strategy and activities. However we must guard against complacency and still look for ways in which we can improve ISU performance and perceptions of the salvage industry.
Specifically, I suggest, we need to increase our representation and engagement with key stakeholders in the wider shipping industry and in particular with owners and the insurance sector. Issues like weaker perceptions of the value for money offered by our members must be tackled and also we must continue our drive to ensure high ethical and operational standards. Good progress has been made in that area.
Part of the re-positioning of the industry is to recognise that many of our members have chosen to diversify and offer other services in addition to their core salvage work. But we must also keep making the case for the high standards and technical excellence of the core services of the professional salvor – the members of ISU. After all it is one of our key messages that ISU members can help to mitigate risk and, when the worst does happen, help to prevent or reduce loss. We want to be seen as part of the wider team involved in ensuring that shipping is conducted safely and that peoples’ property is protected and gets to where is needed on time and in-tact. We are much more than just an ambulance service.
In this regard I also want to engage more about the investment that the professional salvors make. We accept that keeping tugs on station is not, on its own, a realistic business model any more. However, as an industry we are investing. We replenish and renew our stockpiles of equipment: welding sets, pumps, generators hydraulic drive units, chain pullers, cutters, diving sets, hot tapping gear, barges, sheerlegs, ROVs, special firefighting kit. And of course people: the naval architects, engineers, tug masters and salvage masters who are our lifeblood. We train them and nurture them – and we have to pay them even when work is short. All of this represents a huge and credible investment and a commitment to provide services professionally when and where they are needed.
Recruitment and retention of skilled and experienced staff is difficult and we need to tackle the reality that we are an ageing industry. We are caught in a difficult situation: we need to attract new entrants to the industry but with fewer cases opportunities to learn and develop are constrained and it is harder for junior staff to get experience and to move on up in the organisation. And at the same time the age profile of the more senior staff means we may soon face an significant experience gap. This is a serious, industry-wide issue and ISU must consider what it can do as the trade association to help make the industry attractive and to support professional development.
Turning now to an issue very much “of the moment”. We are all aware that there has been a paradigm shift regarding environmental issues. Zero tolerance of large marine spills has been established for some time but we have yet to see the reaction to a major incident in this era of Extinction Rebellion. The adverse public reaction to the next big spill will, I believe, be huge. And I do not think that our industry has been a strong enough advocate for the great environmental benefit provided by the salvors.
I want us to engage more proactively so that wider civil society recognises and values the importance of our contribution to marine environmental protection.
I am sure many of you will be familiar with the ISU’s annual pollution prevention survey, but let me remind you that in 2018 our members provided services to vessels carrying more than 3 million tonnes of potential pollutants. Of course not all of that was at imminent risk of going into the sea. But it is a huge total and anyone of those casualties could have caused a major environmental incident. By comparison, the Deepwater Horizon disaster in the Gulf of Mexico released about 700,000 tonnes of oil – the largest spill on record.
One of the findings of the survey is that full ISU members are well-served by ISU but our associate members feel a little less well-served. I am sure there are a number of ISU associates in the room today and I do want to make sure that your membership of ISU is worthwhile and meaningful. A simple but important step is for us to ensure that we have the right contact details and to ensure that our communications actually reach our associates. It sounds rather basic but it is critical and we have been working to update all contact details and that will help. We also want to offer more networking opportunities and we have made a good start be inviting more associates to the opening receptions of our Annual General Meetings and giving associates more speaking opportunities at our annual associates’ day conference.
Additional initiatives might, for example, include more opportunities for our associates to demonstrate their capabilities to full members through new events or communications.
The survey showed that ISU communications activity is considered to be effective but there are certainly areas to work on, such as our use of social media channels in order to be more responsive; to publish more news and ideas and to create opportunities for dialogue and exchanges of views.
I have focused today on some of the softer issues but I can’t finish my talk without reassuring you that ISU will also continue to focus on core business and operational issues. For example, we are working with the Lloyd’s Salvage Group to revise LOF for its 2020 edition. We are working with the Clubs to consider issues in wreck removal tendering, especially the correct use of Quantitative Risk Assessment and making sure that the risks and opportunities associated with major projects is treated fairly.
In operational matters there is the perennial issue of providing services to the largest classes of ships. Containership fires continue to be a major concern and we are pleased to see IUMI taking that subject so seriously. Container weights and mis-declaration of cargo continues to be an important issue not least as the ISU statistics show a clearly rising trend in the number of containers involved in our members’ services.
And, in mentioning our statistics, I should also say that we are considering how best we should present our annual industry statistics – what numbers would be most relevant, how do we gather them and how do we ensure that they are accessible and easy to understand?
I am going to draw to a close now and I hope that you have found it refreshing that we have shared with you the results of our opinion research and I hope that you will support us as we try to translate the findings into meaningful actions to make both the ISU and the salvage industry better engaged with its stakeholders and more responsive. We are service providers.
I have tried hard not to use this slot to complain about difficult conditions but to recognise that it is up to us as the leaders of the industry to present ourselves as creative and providing value and useful services. To show that we accept that the old ways of doing things are not really possible in the modern business environment.
I do feel confident that the industry has a good future because we provide a highly specialised, professional service that does provide real benefit for ship owners and insurers but which is largely unseen and therefore not properly recognised by wider society.
It is up to us to engage with stakeholders with strong messages about their upcoming challenges, how we can support them with that and stress the value provided by ISU’s members and in particular about environmental protection. Nobody else is going to do that for us so we must do it ourselves…. We are coming to get you!