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Why safety and sustainability are shipping’s licence to operate

Shipping companies have the opportunity to re-establish themselves favourably and be ready to navigate changes in the future

‘A great safety performance results in a great business performance — if you get the safety right, you get everything right’

EVERY company, regardless of its size and shipping sector, should put operational excellence, and particularly safety, as their very top agenda item.

In a sentence: operational excellence is not something you do, but everything that you do.

Shipping is vital to the world. In all weathers, shipping keeps the economy moving from tankers to cruise liners, from ferries to cargo and containerships, some 100,000 ships with over 10bn tonnes of cargo sail from port to port every year.

That is more than one tonne of cargo for every person on the planet, delivering 80% of the food we eat, the energy we use and the things we buy every day.

As a result, you all play a staggeringly important role in the world with huge responsibilities. But, as we all know, it comes with immense challenges.

Supply chains have been shortened with just in time delivery. There are increasingly large amounts of data and real-time analysis, with information moving quickly around the world.

Consumers and customers are very well informed and have a large choice of who they can buy from.

Employees have increasingly different expectations of their livelihood, and have choices about what work they do and who they work for.

Shareholders and lenders are being scrutinised by regulators and the market, to prove they are acting and investing responsibly.

It is important to be well positioned to take advantage of the opportunities and not to be left behind. But how do you do this… the answer is, through operational excellence.

To demonstrate the importance of operational excellence, let us look at the shipping world from three perspectives — change, investment and decarbonisation.

All are interlinked, but let’s consider them separately.

Firstly, the perspective of change. As we look back, it is almost unbelievable how the world around us has changed so dramatically. That change is moving at a scary pace that doesn’t seem to show signs of slowing down. Add to this, the massive changes that have taken place through the pandemic. How can you build the resilience to face the future with confidence, and be ready to take on any change and at short notice?

The second perspective is investment and for this, let’s consider ESG (environmental, social and governance), which is a hot topic. While there are critics and concerns around ESG, there is no doubt that the various elements will have a major impact on business and commercial success, with greater transparency. Companies need to be ready.

Each stakeholder uses ESG to look at your business through their own lens. Are you acting responsibly in looking after the environment? How do you treat your employees and what do you contribute to the communities that you operate in? How do you conduct yourself, and do you act responsibly and ethically? These questions and many more, to determine that your company is a good investment for the future?

The third perspective is decarbonisation. It is vital to address the impact of your business on climate change, including greenouse gas emissions. What are the opportunities now and, in the future, for improved energy efficiency across all areas of the operation? How might regulatory developments, such as carbon pricing, impact your business?

Safety is fundamental to delivering decarbonisation. While the debate continues about which fuel to use and how to pay for the additional costs, the most important challenge is around the operational aspects and in particular, the safety implications.

The answer to all of these questions on change, investment and decarbonisation…and more, is through operational excellence.

Operational excellence must be a key component of every shipping company’s business strategy and owned by the Board. It needs to be communicated and understood by the employees, so that they are empowered to make continuous improvements and help to build your company for future prosperity.

Shipping companies have the opportunity to re-establish themselves favourably and be ready to navigate changes in the future.

In all areas of your operational activities, you must evaluate if the processes are efficient and embrace the use of digital technologies and data, to better understand the business and areas for improvement.

Company employees need to have clearly defined roles and responsibilities, and there needs to be open and honest communications, with all stakeholders.

It is important to care for your people and put them at the centre of all improvement programmes. People need to be trained for the tasks, with continuous learning for personal and professional development.

This is just a small list and I am sure you will have many more areas of operational excellence that you could add. So, how do you lead the way for real change and actually make things happen, beyond headline-grabbing news items, and discussions… and even more discussions?

How do we turn these discussions into delivery, and ambitions into actions? How do you move from plans, processes and promises, into an improved performance to make your business thrive and propel it forwards? How do you make operational excellence actually happen?

The answer is through safety… by making safety the number one agenda item in your company. This is because safety is all encompassing and fundamental to everything that we do. The mindset and skills that are needed to deliver a great safety performance are the same for all other aspects of operational excellence.

The traits of a great safety leader are the same as for a great business leader. Both require leaders who have the vision to develop and deploy an effective strategy, and take accountability to deliver results. Leaders that have empathy, and can empower and inspire employees. Leaders that ask questions and listen, and value the contribution from others.

Put simply, a great safety performance results in a great business performance. If you get the safety right, you get everything right.

Through safety, you will be able to build an energised workforce. Safety will motivate your people to do a great job every day.

By making safety the single most important subject, your company will change and thrive, and become a force for good in the world.

This article is an edited version of a speech delivered by Dr Grahaeme Henderson to the Capital Link conference in Athens.

Dr Henderson is the chairman of Together in Safety, a non-regulatory industry consortium connecting the maritime sector with the common purpose of working together to improve safety performance.

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