Shipping moving at its own pace

As the biggest supplier of ship management services in the world, V.Group knows a thing or two about staying profitable. The group’s Chief Technology Officer Andrea Zito spoke to Generations about present and future prospects for the shipping industry.

Andrea Zito

How do you explain the success of V.Group?

Our success is, very simply, based on the quality of the service we render. We are uncompromising on safety and quality, and this has been widely recognized by the industry. The choice we took years ago to be independent has paid off. We are one of the few independent service providers, so we don’t have any vested interest in the vessels or their assets. The market recognizes this as an advantage.

Another success factor is our worldwide footprint. With offices around the world, we have always been flexible and close to our client. Our biggest asset is the competence of our people. We have the largest global network of recruiting agents, moving about 30,000 seafarers all over the world. Almost 95 percent of them come through our own recruiting offices.

Finally, we are one of the few companies that cover the entire spectrum of the shipping industry – not just cargo, but also passenger vessels. We are the largest independent passenger vessel manager with about 50 vessels under management. A few years ago we successfully entered the offshore market, where we manage about 20 large offshore units. So we are expanding into that market as well.

Turning to profitability and decision-making: Why is capital expenditure still the main consideration, rather than operational efficiency, when it comes to ordering newbuilds?

That’s largely true, but, lately, I think we’re seeing a big change. But it’s a slow change because shipping is a traditional industry. However, we do see the focus shifting towards operational efficiency among some of the leading operators. I think this will accelerate in coming years. There’s a lot more awareness of operational efficiency, and this has gained pace over the last five to ten years. We also see more awareness of the reliability of vessels. You can’t have the luxury of not being compliant anymore. 

Capital is invested for return on a given time horizon, and efficiency gains only make sense for the long perspective – what is the typical time horizon of a shipowner?

That’s difficult to answer because we’ve just come out of a lot of turmoil in the shipping industry. The dust hasn’t settled well enough yet to give us a clear scenario on time horizons. The market is still dominated by private investors. Private groups can move much more quickly than larger organizations with slower decision making and heavier governance. If you are a publicly listed company, you can’t sell your business and buy another according to gut feel or a quick swing of the market. So, the traditional ship owners are still very successful, namely the Greeks, the Japanese, the Norwegians. They move quickly from one type of vessel to another. 

There are areas, like the cruise business or offshore, where you have mainly long perspective investments – because it’s a steadily growing market with some strong fundamentals. But for other sectors, like oil tankers or bulkers, the roller coaster of the last few years is far too recent for long perspectives.

What is the future outlook for shipping?

We may have steadier freights in the future so that investors can make more long-term plans. I think we will see trends for consolidation. We’ll see traders or mining companies entering the market and being involved more heavily with ownership of assets – for example, the large VLOC market – to secure their long- term routes. We have seen a lot of activity from financial investors planning their investment for medium- to long-term returns. So, the industry will evolve slowly towards consolidation and a more settled pattern of long-term investment. We are moving out from the turmoil but not yet. 

How should equipment manufacturers and providers of new technology stay profitable in the current climate? Should they take bigger risks? For example, look at performance-based compensation?

 We have several projects going with some manufacturers where we see the focus staying on operating costs but a longer-term strategy coming back in. I’m talking about ships on long-term charters managed by top-class operators more interested in the long-term financial return. There you may have space for performance-based compensation based on key performance indicators (KPIs) or other forms of turnkey management, where the technical operational expenditure is wrapped and guaranteed. We already have agreements based on KPIs, as well as lump sum crew costs. We are now considering some scenarios where the technical running costs are also in a form of a lump sum. Obviously, we are thinking of turnkey management together with some selected manufacturers. And I think that this could be an interesting development for ship management in cases where there is a strong partnership between the manager and owners/operators.

The industry isn’t mature yet, but it will get there because nobody wants to take risks on operational costs any more. Compromising on reliability, safety and environmental considerations isn’t an option any more. I think there will be a clearer and more transparent commitment between charterers and owners – so that owners who are investors will have certainty about long-term returns. The panorama may change but I don’t know how quickly. 

Will this affect key performance indicators (KPIs)?

Yes, definitely. We have been working through InterManager on a big project to look at the sharing and setting of KPIs for various ship types. A better understanding of KPIs will lead to more transparency and better recognition and reward for quality and performance. 


– Leading ship management services provider
– Established in 1984   
– Headquartered in London , Glasgow and Monaco
– Provides marine and offshore maritime personnel
– Offers technical, engineering, consulting, inspection, testing, repair and maintenance support services
– Provides a range of commercial services, such as procurement and contracting
– Operates in the commercial shipping, cruise, energy and defense sectors
– 80 offices around the world


InterManager is the international trade association of the ship management industry. Members are in-house or third-party ship managers, crew managers or related organizations and businesses from throughout the shipping industry.

Collectively, InterManager members are involved in the management of almost 5,000 ships and responsible for some 250,000 seafarers.

The association represents its members at international level and is committed to improving transparency and governance in the shipping world and ensuring high standards are maintained throughout the ship management sector.

The dust hasn’t settled well enough yet to give us a clear scenario on time horizons.

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