Shaping the Maritime Industry

Case study vessel

By Tony Munoz 2016-11-10 13:09:34

(Article originally published in July/Aug 2016 edition.)

With its global infrastructure and diversified portfolio, Wilhelmsen is much more than a shipping company. It’s a maritime powerhouse.

By Tony Munoz

Thomas Wilhelmsen has a vision. The fifth-generation leader of his namesake company wants it to be a center of excellence for the entire industry. He wants it to offer something – a product, a service – to all 50,000+ merchant ships sailing the seas today. Wilhelmsen serviced 26,000 of them in 2015, so he’s well on his way.

      But more than that, he wants his company to be a moral and ethical leader as well, a model corporate citizen, shaping the industry in areas like sustainability and the environment, workforce diversity, accountability and openness, and the ability to add value for customers, employees and the global community.

       It’s a tall order. But he knows how to get there, and he’s already delivering results. The company today operates car and ro-ro vessels, produces a wide variety of maritime products, has ship agencies all over the world and oversees an extensive ship management business. It also has subsidiaries involved in maritime safety, logistics, insurance and training. Few, if any, companies can match the extent and depth of its services.

      On the corporate citizenship side, it’s been running its fleet on low-sulfur fuel for many years now, entirely on its own initiative and expense. In 2013, Wilhelmsen began publishing a Sustainability Report in accordance with the Global Reporting Initiative to accompany its Annual Report, one of the few companies in any industry to do so. And there’s more, but let’s start at the beginning.

The Seeds of a Global Icon

In 1861 Morten Wilhelm Wilhelmsen established a small ship chandlery and brokerage company, which he aptly named Wilh. Wilhelmsen, in the small town of Tonsberg, Norway. In 1865 he bought his first vessel, the Mathilde, a wood sailing ship, and twenty years later his first steamship, the Talabot, which quickly proved to be a huge success. Named with the letter “T,” Talabot initiated the Wilhelmsen nomenclature.

      As the business prospered, it continued to modernize with the newest and smartest ship technologies of the day. Wilhelmsen soon became the largest cargo carrier in Norway as well as a major transporter of crude oil and petroleum products.

      During World War II, the company lost twenty-six cargo ships and fifty-two sailors. While operating mainly in Europe, it also sent ships to the Pacific theater to transport U.S. troops to the Far East. After the war, many of the ships returned to commercial service to assist in the massive task of rebuilding a war-torn Europe.

      In the 1960s, a sea-change took place at Wilhelmsen as it invested in a fleet of roll-on, roll-off (ro-ro) vessels to take advantage of the new and growing export trade in automobiles. At the time, autos were transported on ordinary cargo ships and simply stowed on top of the other cargoes or lifted onto the ship by a crane using special slings. The new ro-ro vessels had side-ports and shipborne ramps to allow easy access to cars and other drivable units.

      In 1999, the company formed a joint venture with Swedish company Wallenius Lines, which was the prime exporter for Volkswagen, and expanded its fleet to more than seventy auto carriers and ro-ro vessels. It marked the beginning of a long and beautiful relationship. The joint venture was called Wallenius Wilhelmsen Lines, later renamed Wallenius Wilhelmsen Logistics (WWL).

      Other joint ventures and partnerships followed, including EUKOR Car Carriers (a joint venture with Wallenius, Hyundai Motor Company and Kia Motors Corporation) and American Roll-On Roll-Off Carrier. Today, the company and its partners control roughly a quarter of the global car carrier business. Joint ventures and partnerships have been a way of life at Wilhelmsen over the years, allowing the company access to additional resources – and revenue – through local expertise.

      During the 2000s the company’s strategy expanded to buying and consolidating well-known brands and then renaming them. It bought Unitor and merged it with Barwil Agencies to become Wilhelmsen Ships Service. Barber Ship Management became Wilhelmsen Ship Management. The Callenberg Technology Group was added to Wilhelmsen Maritime Services.

      In 2010, at the age of 35, Thomas Wilhelmsen became CEO of the parent company, a position he laughingly acknowledges he has been “brainwashed for” his entire life. Taking the helm at a difficult time for the industry, which has only gotten worse, he has demonstrated a steady hand and a compelling vision.

      Operating on six continents, in seventy-one countries, and employing 23,800 employees, the company posted revenues of $3.3 billion last year and operating income of $165 million. It has operations in 2,200 ports around the world and handled 75,000 ship calls last year while transporting more than 74 million metric tons of cargo. With 310 offices worldwide, Thomas Wilhelmsen is determined to make the most of his far-flung and deeply embedded infrastructure.

A Balanced Portfolio

The ups and downs of the international maritime industry are a perennial concern and danger, and the company has structured its portfolio of offerings to include as many different products and services as possible. Why? To minimize the impact of downturns and maximize the benefit of upturns. It doesn’t always work, but most of the time it does.

      “While many people think of Wilhelmsen as a shipping company,” Thomas Wilhelmsen likes to say, “more than 50 percent of our operating profits came from maritime services and logistics in 2015.” And they will be a major focus for the future, he adds. One of his major goals is to maintain a balanced portfolio so that the company is not too reliant on one particular business area.

      The service businesses are all grouped under Wilhelmsen Maritime Services and include ship management and agency, technical solutions, and third-party services such as health and safety, quality assurance, vessel accounting and purchasing, drydocking, newbuild supervision and green recycling. Almost all are industry leaders.

      The ship agency business, which is part of Wilhelmsen Ships Service, is the largest in the world and recently added a new Panama and Suez Canal service to facilitate clients’ operations in those two newly expanded and heavily travelled waterways. The first client for the new Wilhelmsen Panama Canal service, Avance Gas, is a major operator of VLGCs. Its Neopanamax gas carriers Passat and Breeze were two of the first ships to transit the new third set of locks.

      Wilhelmsen Ships Service also includes marine products, and the company has integrated some of the industry’s best-known brands including Unitor (est. 1943), Timm (est. 1772) and Nalfleet (est. 1986). The company’s products are globally distributed to the cruise and shipping industry and include cleaning solutions, chemicals, gases and cylinders, refrigerants and maintenance supplies, welding equipment, traditional and new high-performance ropes, and water treatment solutions. If it exists, Wilhelmsen probably has it.

Ensuring Excellence

Corporate governance has long been a focus for the Wilhelmsen organization. Along with issuing an annual Sustainability Report, the company says that ninety-five percent of its land-based employees and eighty percent of active seafarers have participated in the “I Comply” campaign, which is formalized training on subjects like anti-corruption, theft and fraud.

      Thomas Wilhelmsen acknowledges that the 2012 antitrust investigation of the auto transport industry demonstrated how misconduct can affect a company’s reputation and bottom line. But he is proud of how the company stood firm against facilitation payments in the Suez, a policy that has yielded substantial results. “This is encouraging and strengthens our belief in our long-term ambition, which is for a corruption-free industry,” he says. “Being a shaper of the industry means being at the forefront of sustainability. Being a shaper is not something we can turn on and off at will. It is a true commitment. It is just how we do business.”

      Wilhelmsen recognizes that, in today’s marketplace, human resources and management talent are vital strategic issues for multinational companies. It’s all about competency, he says. To be a leader requires competency in everything you do. Last year the company sent its first group of executives to the Thunderbird School of Global Management at Arizona State University to assist managers in their understanding of global economic trends and their development of the leadership skills needed to run a diversified and balanced portfolio of businesses. And all employees receive at least four days of job-related training each year.

      Nearly 30 percent of the company’s total employees are women, an unusually high percentage in what is traditionally a male-dominated industry. Wilhelmsen says improving the overall diversity of the company will enrich future management teams and help the company achieve its global ambitions. The philosophy is that a learning organization with motivated employees contributes to efficient operations and has a positive impact on revenues, earnings and the global environment.

      When asked about his biggest challenge right now, he replied, “We have quite a few challenges.” But he also recognizes that, in a global economy that is limping along and a maritime industry that is under water, there are significant opportunities. The way forward requires patience and continued investment in people and new businesses. It also means unlocking the potential of the company’s unrivaled infrastructure.

      Building a solid platform is what Wilhelmsen has always done since its inception more than a century and a half ago, and it’s what this new generation of leadership is committed to as well. – MarEx

Tony Munoz is Publisher & Editor-in-Chief of The Maritime Executive.

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