Martin Helweg, CEO of P&O Maritime Logistics, spoke exclusively to Julian Walker about the impact of COVID-19 on the offshore sector and how the newly merged company has found resilience during the pandemic
How will the COVID-19 pandemic change the future of the offshore energy sector?
As we continue to face the most significant global crisis of our lifetime, our industry and others alike, face a growing set of challenges, some which could be planned for, others less so. Amid this pandemic, we must adapt quickly and make sense of the rapid geopolitical, social, and economic shift unfolding globally. One such change which, without a doubt, will shift the industry, is the histrionic drop in oil prices, the lowest in history.
With Brent Crude at an all-time low, driven in part by the dramatic fall in consumption, oil majors and supply chain companies are presented with a unique set of challenges. For example, since the start of the pandemic, oil companies had to cut activities significantly - leaving a huge negative impact on service providers and supply chain companies. An oversupply of vessels and a dip in demand is catastrophic to many OSV players, some of whom were playing catch up even before the crisis.
Volatile oil prices have also meant a drop in demand from an investor perspective. This has meant that investors are now turning to other opportunities. This cycle adds pressure to oil companies as they scramble to cope with these new realities, which will shift the industry for decades to come. Essentially, this forces oil majors and supply chain businesses to change the way they operate. Those who succeed will be the ones with the most exceptional agility in changing business models and strategies.
What has the impact been on P&O Maritime Logistics operations?
The extent to which P&O Maritime Logistics has been affected by COVID-19 results from our ability to take the cost of the business, and offer more value with fewer resources. In a volatile industry such as ours, P&O Maritime Logistics has long been working towards a business model that reflects innovation, incomparability, and efficiency to capture more entities of the supply chain at reduced capital expenditure. As a result, our financials are holding up well.
We have also done lots of work in the past to plan for emergencies. Going into the pandemic, we had an Emergency Response/Business Continuity (ERBC) plan that was flexible and well-circulated throughout the business. As details of the spread of COVID-19 became clear, we were able to adapt this plan to meet the changing COVID landscape swiftly. We are currently working with the fifth iteration of our ERBC plan at the corporate level, and some of our business units are working with a 10th version as teams adapted the procedures to fit their local requirements. Having an existing ERBC plan in place has meant we were several steps ahead at the beginning of COVID-19, and this preparation has allowed us to continue with most of our operations throughout the crisis.
However, that is not to say that COVID-19 has not impacted the business. Our seafarers have experienced extremely tough conditions, working out on the oceans without the opportunity to return to their families for many months. Our ability to effect crew change has been severely impacted: while we have been conscious of keeping everyone informed of what is, or in this case, is not happening, we have been met with nothing but dedication and loyalty from our crews. We are primarily a people business, and our human capital consistently proves to be our most valuable asset. It has been tough, but our team has proved more valuable than ever, securing the energy supply chain and delivering critical supplies around the world. Without them, delivering for our clients would have been much more difficult.
You must have been glad that the merger was completed when it was?
Very much so – the combined forces of Topaz Energy & Marine and P&O Maritime under the DP World umbrella have given us incredible resilience during the COVID-19 crisis. DP World already owned P&O Maritime when they acquired Topaz in 2019. Both companies were strong, with an extensive market profile, and so we are enjoying greater financial strength that allows us to navigate challenging periods.
The merger has also allowed us access to increased investment in both the fleet and in technology and innovation, to the benefit of current and future stakeholders. This translates to an excellent deal for our employees and customers. Being part of a world-leading group such as DP World ensures that we will continue to be an employer of choice for talented individuals and will bring greater strength and benefits to our customers.
Despite the crisis, we are still looking towards growth. As our clients’ demands evolve, we are adapting our service-led offering to stay at the forefront of industry needs and remain as the preferred provider of marine logistics services and solutions. The merger of Topaz and P&O Maritime has increased our focus on providing end-to-end logistics solutions. Throughout COVID, we have been able to focus on delivering large-scale, bespoke services in collaboration with our customers and partners.
How is your embrace of digital technology going to help you navigate the new energy landscape in the post COVID world?
A central part of our evolving business model is digital transformation, and digitalising our business has been critical to us for a long time – long before COVID-19 emerged. We are already capable of collecting and processing data in real-time from our offshore operations, while also connecting our offshore and onshore personnel. We are even assisting some of our clients in their business continuity efforts with the technology we can provide.
Now that we are five months into the pandemic, adapting to handle this new landscape is proving quite seamless. Our advanced technology has meant that we have been able to continue delivering across industries during challenging times – be it within one segment such as offshore or port services, or a logistics offering. By understanding each customer’s changing needs, and drawing on our maritime heritage, technology has given us the ability to offer our customers the same value of services, without disruption.
Being part of the DP World Group, we are uniquely positioned to weather this storm and to continue to deliver value for our customers and our shareholders alike – and to add to DP World’s incredible vision of being an enabler of digitalisation within global trade and, now also the energy sector.
How are you focusing on operational excellence?
Ensuring operational excellence is something we have questioned extensively throughout this challenging period. We have reviewed all our tools and adapted them for new working conditions – e.g., tools that were meant for use in person, have been adapted to work in a virtual environment. We have discovered ways to conduct virtual Management Vessel Visits, virtual audits – both internally, and externally with ABS - and held virtual Town Halls with our teams around the globe.
We have made sure that we continue to execute and conduct these visits, audits, and meetings as usual, because now it is more important than ever that we not only stay consistent in our communications and performance but also maximise our connectivity. As a result, we have ended up with a whole new set of tools at our disposal, by merely adapting what we already had in place. Our clients participate in many of these events, and the feedback has been very positive.
Going forward, we know that we can deploy our teams anywhere, virtually or physically, and be able to have a cohesive, functional business. We treat each vessel as another business office, providing them with the tools they need to operate, and fine-tuning and enhancing them with every use. This capability is to ensure continuity in energy and supplies across the world – where people need resources, now more than ever.
How will large-scale marine operations work in a post COVID world?
All large-scale marine operations must adapt to use technology effectively to drive efficiency in a post-COVID world. I believe P&O Maritime Logistics is already there, and I would like to encourage the rest of the industry to do the same. I want to share our findings and learnings so that the rest of the industry can innovate: one of the ways we can do this is by ensuring we share a common set of data standards to provide further value to all of our customers.
We have launched a website to do just that. MaritimeStats.com provides a single, open-source platform for vessel operators to share data and collaborate on solutions that actively improve the safety, sustainability, operational excellence, and technical reliability of seafarers and vessels across the globe. All the data is free to access, and as more data is contributed to the site, we are hoping to see large-scale marine operations work more collaboratively in whatever ‘new normal’ emerges.
Fundamentally, the industry must embrace data-sharing to strengthen its capacity to cope with an extended economic downturn and to endure global issues on an unprecedented scale. If industry players continue to operate in isolation, they will not survive in a post-COVID world.
Will the aftermath of COVID see a great adoption of digitalisation?
Focusing on innovation, proactivity, and control are critical pillars for all businesses in our sector to weather the current storm. Change is inevitable – change in technology, organisational structure, and strategy. By adopting a truly transformative strategy, maritime businesses can deliver on technology’s potential – and succeed in radically altering our industry. Indeed, I hope COVID acts as the impetus other businesses in the sector need to adopt more digitalisation.
P&O Maritime Logistics is driving sector-wide change, and we inherently believe that the last 4-5 years in the OSV industry have created structural changes in the market. Since 2012, we have increasingly moved further away from our older strategy as a vessel operator, and we accelerated those change strategies at the outset of the current downturn in anticipation of a brighter, more digital future. Our transformation was tough, and it will now become tougher as we cultivate adaptability and put in place new norms for our businesses. This is a true test of our preparedness to survive and highlights the strength and character of our employees.
This interview appeared in the August issue of Pipeline Magazine