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File image courtesy Peter Froehner

By The Maritime Executive 06-11-2020 09:38:44

The COVID-19 pandemic makes travelling impossible for the moment. Postponement of planned dockings may be possible in some cases, but sooner or later one will run into hard, rule-based deadlines. (Here are overviews of the current policies from flag- and port-states as well as classification societies.)

Will it be at all possible to run remote docking management without physical attendance from the superintendent? Can the officers onboard be trusted with the task? What about finding some local consultant who can take care of business? Is it better to dock now in any case, rather than waiting for the end of the restrictions when yards will be overrun? Can we manage the risks if we dock without attendance from our own people and specialists? These, and other similar questions are spinning around shipping offices at the moment. One thing is clear, somebody has to be nominated to represent the owner if it is decided to go ahead with the docking.

Even with attendance by an experienced superintendent, docking projects are notoriously difficult to control. Technical surprises pop up at the most inconvenient of times, the cost escalates and delays are common. Important jobs are being cancelled to keep the budget and the final invoice is frequently higher than expected. Invoice negotiations, sometimes done without documentation about what has been agreed, leaves too much money in the pot to be settled at the end of the docking. The current situation will only accentuate these challenges and is likely to expose shortcomings in the methodologies and tools used to manage docking.

Trust

The overriding concern of any owner having to hand over the execution of a docking to a third-party will be trust. The concern may not necessarily be related to outright corruption, but rather if the third-party truly will have the fundamental interest of the owner in mind. Local consultants who may have a too cosy relationship with the yard should be handled with caution. The “Docking” group on LinkedIn can be a suitable place to look for reliable partners. Marine consulting companies with a global network who specialize in docking management would be another safe option. Make sure to ask the difficult questions about the methodology, transparency, forecasting and reporting.

Objectives

Under the current circumstances, owners/managers should aim for lowering of the risk of the project as far as possible. That means working with their regular yards and business partners as far as possible and employ methodologies and tools which leads to transparency and control. It also means clarifying the technical objectives for the docking and minimizing the complexity of the scope of work. It’s good practice to document such high-level objectives in a Project Charter document.

Methodology

Many shipping companies approach docking management in a very person-centric way. Typically, the superintendent is in charge of everything and works according to personal preferences, using his own Excel sheets and so on. In a situation where the execution of the docking may have to be handed over to someone else, it would be better to work according to a defined methodology using standardized processes and tools. 

Scope of Work and the Specification

Uncertainty regarding the scope of work is the greatest enemy of solid docking management. The uncertainty sometimes translates into vague and open-ended specifications, allowing the yard to overcharge and take advantage of the owner having no choice but to go ahead with the job. Reducing this uncertainty and producing a specification which is detailed, precise and complete should be a priority. Ship-inspection companies with a global network, offering UTM, vibration analysis and thermography services may be able to help.

Scope-risk

No matter how good the specification is, until thorough inspections are carried out there will always be residual uncertainty regarding the condition and the required repairs – Scope-risk. Owners should systematically manage this risk, starting early in the planning phase. Conduct an early risk assessment meeting for the upcoming docking. Invite anyone who may have relevant insights, preferably including the top-three officers. Identify the main uncertainties, rank them and suggest risk response strategies. Follow up as the planning progresses. Under the current situation, it’s more important than ever that the management of scope-risk is systematic and explicit.

Tendering

Ship repair is a highly competitive industry in which the business model of most shipyards appears to be based on winning projects through low but sometimes confusing and incomplete tenders where the real costs are hidden in the footnotes. The shipyards then hope to make a good profit through changes and additional work and through invoicing of the owner according to minimum quantities of work done, not according to the contract with variation orders. This approach makes cost control difficult.

When comparing quotations, be careful to include realistic or conservative estimates whenever a yard has submitted an incomplete quotation. The aim should be to reach a fair apples-to-apples comparison where deviation costs, etc. are being taken into consideration. Yards submitting a thorough quotation, having a record of a straight-forward approach to invoicing should be preferred. Such soft factors may be evaluated using a balanced scorecard. 

In the current situation where the person communicating with yard(s) during the tendering stage may not be the same as the one actually attending the docking, it’s even more important that it’s clear what has been agreed. If such clarifications and agreements are hidden deep in email threads, the attending superintendent will have a hard time navigating such issues. Better to record all clarifications in a clarification log, available to the parties from a shared location. 

Both shipyards and owners normally have a set of Terms & Conditions which they try to get the other party to accept. Very often, these Terms & Conditions are extremely one sided, and may not lend themselves to support good docking management and control. Better to use BIMCO’s standard docking and repair contract format REPAIRCON. Used well, it is a powerful contract which will facilitate a professional execution of the docking.

Execution

At the yard, it is particularly important how cancellations, changes and additions are being handled and how the associated cost and time implications are being calculated, communicated and approved by the owner. It’s worth being aware that overly bureaucratic processes may slow down the progress. A modern web/app-based docking management system will greatly enhance both transparency and control. Video conferencing has been a great hit lately and can be used for anything from meetings to remote inspections. Be careful not to treat the owner’s representative as a glorified cameraman, though.

Reporting

Whoever is executing the docking should be able to answer two essential questions at any time: When will the docking be finished and what will it cost in the end? This assessment should be independent from the yard’s and based on solid methodology. As with everything in life, there will be uncertainties and any risks should be reported, along with the measures put in place to manage those risks. Significant deviations from the schedule should be treated in the same way.

Having followed a solid process, the variances to cost and time should be minimal in the end. Owners should expect nothing less!

Øystein Wikeby is CEO of Cap Marine Consultants and was previously docking director of Meratus Line. Cap Marine Consultants are recognized as the thought leaders in the field of docking management and developed the docking management courses of DNV GL and Lloyd’s Maritime Academy.

The opinions expressed herein are the author’s and not necessarily those of The Maritime Executive.

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