21 February 2011
This month’s Digital Energy Journal features an extensive article on how ShipServ has developed tools to help marine purchasers learn more about suppliers they are considering doing business with. It includes coverage of ratings & reviews plus our new Brand Management functionality. ShipServ Founder & CEO Paul Østergaard is interviewed as well as ShipServ customers Wärtsilä and Merseyside Ship Stores and industry partner IMPA.
You can read the full article below or visit the Digital Energy Journal website.
ShipServ: finding the best suppliers
Maritime and offshore e-marketplace ShipServ, has developed new services to help marine purchasers learn more about new suppliers they are considering doing business with.
A purchaser looking for spare parts for products from a certain manufacturer will soon be able to see if the supplier has been verified by that manufacturer and is authorised to sell genuine spare parts.
The purchaser can already see which other marine purchasers that supplier has transacted with recently, either the full name of the purchasing company, or the name in general terms (such as ‘a ship management company in Germany’).
The purchaser can also see reviews from other purchasers who have actually transacted with that supplier.
All of this should help improve confidence in electronic commerce – a lack of trust between trading partners is usually one of the biggest obstacles to online trading – if a buyer is asked to transact with a supplier they don’t know at all, just on the basis of a low quote.
“We’re building mechanisms where trustworthy suppliers can float to the top,” says ShipServ CEO Paul Østergaard.
Marine purchasers often have to find new suppliers, to provide a new product in a new port, and don’t have time to investigate them fully. This service should speed the process up.
The total volume of supplies traded over ShipServ during 2010 was worth $1.7bn, with 4 million transactions (which includes requests for quotation, purchase orders and order confirmations), a 31 per cent increase compared to 2009.
ShipServ currently has 155 shipowners and 36,000 suppliers on the system.
New shipowners signing up with the company in 2010 included ABCmaritime, Alpha Shipmanagement, BW Gas, Chellaram Shipping, Mowinckel Ship Management, OSM Ship Management, Pacific Basin, Prestige Cruise, Reederei F. Laeisz, SeaCor Dubai, Regent Seven Seas Cruises, Star Cruises, Tai Chong Cheang Steamship, Tolani Shipping and Wah Kwong.
The company claims that it now has 24 per cent of world’s cruise ship capacity connected to the network; 40 per cent of container carrying capacity and 43 per cent of world’s LNG fleet. Shipowners connected to the network put on average 80 per cent of all of their shipboard purchasing requirements through the network.
The company is also expanding into the offshore and oil and gas industry. Offshore companies using the system include DOF, REM Offshore, RK Offshore Management, SeaCor, Solstad Shipping, TideWater Marine, Vroon Offshore Services.
See who the customers are
ShipServ developed a rating measure called TradeRank to help buyers find new suppliers they could trust as well as help suppliers promote themselves. Buyers evaluating new suppliers can quickly see the popularity of the suppliers based on TradeRank’s 5-star grading system, helping them to make better informed decisions. The same buyers can also see customer reviews of that supplier and their trading history.
Every supplier in the ShipServ Pages supplier directory has an indication of its trading history based on how much they actually trade via ShipServ, the size of the orders and how many different buyers work with that supplier. Also reflected is the supplier’s ratio of orders won to Requests for Quote (RFQs).
So, for example, if you are considering using a new Chinese supplier, “if you see the Chinese supplier is trading with 10 companies in Western Europe, that is telling you something, says ShipServ’s SVP product management Stuart May.
Without tools like this, a top quality supplier in a large market like China can be buried – but on Pages, “the quality will be exposed,” adds Mr Østergaard.
The information is fully verified, because it is based on trades which have actually been conducted over ShipServ’s platform.
Ratings and reviews
After a trade is completed, shipping company purchasing managers are given an opportunity to score the supplier (from 1 to 5 stars), on the basis of delivered as described; on time; and customer service. Only companies which have actually transacted with the supplier on TradeNet are able to provide reviews. The buyer can also provide textual information.
In a survey, 40 per cent of suppliers on TradeNet said they thought online reviews would be a good thing, and 75 per cent of buyers said they would pick a supplier that had better reviews.
“Many review systems are at best marginally useful because you don’t know who wrote them,” says Mr Østergaard.
ShipServ’s advice to suppliers is that they shouldn’t worry about getting one or two bad reviews – since everybody has mishaps – and having genuine feedback can actually increase their credibility. The important thing is that most reviews are positive.
The brand verification tool simply means that if a ship supplier claims on its profile page to be an authorised agent of a brand owner, such as Wärtsilä, then the brand owner is asked to verify this.
The purchasing manager can see all the brands which a ship supplier claims to be an agent for, and whether the brand owner has agreed that they are. If a ship supplier falsely claims to be an authorised agent of a brand, then the brand owner is able to request that the claim is removed from the ship supplier’s profile page.
The tool has proved very popular with brand owners so far. “We haven’t met a brand owner that didn’t want to take control of their brand,” Mr Østergaard says.
Wärtsilä has been one of the first companies to take advantage of the brand verification, and it immediately discovered many suppliers incorrectly claiming to be authorised Wärtsilä distributors, and it was able to remove these claims from their ShipServ Pages profile pages, says Wärtsilä e-solutions consultant Tuomo Livonen.
Wärtsilä manages 20 different brands, including companies which it has acquired, and this tool makes it much easier to manage them, rather than have to resort to lawyer’s letters every time it wants to stop a supplier falsely using a Wärtsilä brand.
Wärtsilä transacts ‘tens of millions of Euros’ over ShipServ TradeNet every year, Mr Livonen says.
The company started using ShipServ Pages itself as a supplier, significantly expanding its presence on the directory in December 2010. “In the beginning we were a bit sceptical, but our first impressions are positive,” he says. “We can see we have buyers looking at our services.”
Wärtsilä is very well known as a supplier of engines, but it also provides many other services around the world to the marine and offshore industry which are not so well known, and ShipServ Pages provides an opportunity to advertise those.
Steven Alexander, chief operating officer of the International Marine Purchasing Association (IMPA), plans to use the brand verification tool so he can stop suppliers falsely claiming to be IMPA members.
IMPA provides a level of policing over its members, for example suspending suppliers from the organisation if they use a manufacturers’ brand without authorisation. “What we’re going to do is use this to manage the IMPA brand, which is fantastic,” he says.
Merseyside Ship Stores
Merseyside Ship Stores, one of the largest suppliers to UK vessels (including providing 40 per cent of supplies to offshore vessels in Aberdeen), currently takes around 30 per cent of its orders through ShipServ, says director of sales Ulfar Norddahl.
80 per cent of all its enquiries are converted into orders, he said, despite the fact that most purchasing managers send requests for quotes to three different suppliers.
The company aims to be a top quality supplier, providing only top quality products, and ShipServ’s reviews and ratings provide an objective means to telling this to the market, he says.
“Good clean business is what we’re promoting, and ShipServ is the best way for shipowners to have good clean business. It’s a guarantee that you’re dealing with good people.”
Chauncy Maples challenge
ShipServ is involved in a charity challenge to provide parts and services to the vessel “Chauncy Maples” which is being reconditioned to serve as a hospital on Lake Malawi, a 560km long lake located between Malawi, Mozambique, and Tanzania, on the East Africa Great Rift Valley.
The renovation project is being run by UK-based P&I Club manger Thomas Miller, which is a shareholder in ShipServ.
Thomas Miller is looking for GBP 3m (USD 4.5m) in total to renovate the vessel and fund its operations, and it has already raised GBP 1m, including funding from the Malawi government, which should ensure its support of the scheme.
The vessel has a very interesting history. It was built in the UK in 1898, designed by Henry Brunel, son of Isambard Kingdom Brunel, in memory of Chauncy Maples, an Anglican missionary who set up clinics and schools for released slaves in Zanzibar, and drowned in 1895 when his vessel capsized on Lake Malawi.
From Glasgow, the vessel was disassembled into 3481 parts and shipped to Mozambique, for transportation to Lake Malawi. Because the river from the coast to the lake is only part navigable, the vessel had to be carried part of the way by land, carried by 450 Ngoni tribesmen.
From 1901 to 1953 the vessel served as a missionary school, emergency refuge from Arab slave traders and a hospital ship, also serving during the first world war as a troop carrier and gunboat. The vessel subsequently served as a ferry (until 1992) then as a bar.
The hull of the vessel is still sound because it is on a freshwater lake (only salt water corrodes). The renovation project will replace the entire superstructure with a new aluminum one.
Once renovated, the vessel will serve as a hospital ship, making a monthly rotation of the lake and visiting villages where people currently have to paddle 50 miles through waters full of crocodiles and hippos to see a doctor. It will help patients with AIDS and Malaria and aim to help reduce infant mortalities.