Moving In The Right Direction

[ 00:00:06 ] Today we're hosting a round table talking about the maritime and offshore industry. We're going to be talking about topics such as ESG and sustainability, partnerships, and the importance of resilience within the sector. My name is Adam, and I'm joined today by three industry experts from within RS. To my left today, we've got Gorn Bradshaw coming from Scandinavia, we've got Kate Bradshaw, no relation, coming from RS Exports, and then Dave van der Stel from the Benelux business. Hi guys, and welcome. Thank you. Thank you so much. So together you've got over 35 years' worth of experience working within the maritime industry. I'd like to start today by asking you if you could explain to me how the industry has changed during that time and some of the changes that you've seen and experienced. [ 00:00:57 ] Well, it started a long time ago. The offshore maritime industry is a typical offline business; it was then an offline business, asking a lot of RFQs before sending the purchase order. And the biggest change that we have noticed at this moment is that they're getting from offline business into an online business. So they are starting to use the web more and more often to place their orders or get the right information regarding data sheets. So that's the biggest change. Care to build on that, anyone? Yeah, I've been working for 12 years within maritime, and I've seen the biggest shift probably in buyer behavior and global reach of product requirements. We are finding that vessels now are sending fewer RFQs because data is available online, and it's available to the end user and the vessel directly. [ 00:01:49] Also, we are finding that the use of integrated platforms is increasing over the years, and this is something that RS has been engaging with and keeping up with within the industry to support. And circling back to what you mentioned, Dave, when you see the whole industry is going more and more towards an online approach, and that also opens up that we can have a much better dialogue with the people actually working on board the vessels, and not just the purchase department as middlemen, and I think that is really giving for us, of course. And we are able to service them in a whole different way. [ 00:02:30 ] And thinking about not only the changes that you've experienced and seen, but the challenges. Have the challenges remained the same within the industry, or are we seeing new challenges start to surface and emerge in recent years? The biggest challenge within the offshore maritime industry is still availability of the products because time is money. Vessels are coming in for a short period of time in a dock or harbour, and they leave the next day in the morning or the same day. So stock availability and delivery services are getting more important than in the past. We want to be seen as a more trusted partner regarding delivery and services. And how are we addressing that challenge within RS? Can I answer that? Please do. [ 00:03:23 ] So we're working as a global team now, which gives us the opportunity to engage with our colleagues overseas, but also it gives us access to buyers and vessels globally, not just within our markets. So we're taking combined knowledge, as an example here today, to really service the customer and become a partner. So we've realized over the last few years that actually a partnership within the maritime industry is massive. Our buyers tell us, you know, buying for a vessel is a whole different world from buying for an onshore factory, for example. It's hard work, quite frankly. And they're looking for a partnership that can just deliver, that we can just support and deliver. And that's what we've been working with for a long time to support. [ 00:04:09 ] And the results are great feedback from our customers that actually, wherever the vessel is in the world, you know, we can assist them, whether it's ourselves, our team, or the wider global team. One of the biggest changes that we also noticed in the world of the offshore maritime industry is that in the past, they saw us as a competitor, and now they can see us as a partner. And that's a big change. Can I ask you about that? Why were we perceived as a competitor, and what steps have we taken to reposition ourselves as a partner? Well, you have to... The thing is that, and I'm not speaking for Cater Department, but as a part of the Benelux and also Scandinavia, we are not allowed to do export. [ 00:04:58] So we need the local suppliers that supply directly to the vessel to get our range and our brand awareness on board of that vessel. So the first, in the first, a long time ago, is that RS can also supply directly to vessels, but in the Benelux we can't. So we have to convince the customer that we don't supply directly, but we need them to get our products on board of the vessel. So we build up a trusted relationship with them, a partnership, because we need them to get our products on board. So you've spoken about partnerships, and it's something that I'd like to go back to, but I would just like to try and conclude that area around challenges. [ 00:05:44] So are there any other challenges that are either new or are consistent across your careers other than stock availability that you feel it's worth calling out in this discussion? I think stock availability is a big one. A vessel is in port for such a short amount of time, whether we work directly with the buyers and the vessel owners or whether we work with our chandlers for onward forwarding. Of course, the product still needs to be on the vessel at the time it needs to be. So it's a massive, massive challenge for us, something that actually, as a global team, we're working well to support. We're finding that if one market cannot support another, maybe can a little quicker. So that's why working across borders really works for us. [ 00:06:34] I think a big challenge is confidence in RS. And RS has worked over the past few years to really improve our brand, our network within the maritime industry to improve our credibility. And we're at a good point where we can confidently say that we, RS Maritime, are a key player within global supply. From a product perspective, are there any changes that we've seen within the industry in recent years that are becoming more prominent now? When I started just five years ago, I was the junior here. Yeah. We mainly just sold tools. Yes. To Maritime and that was it. Some test and measurement, but not that much more. But now we see they're buying electrical components; they're buying PPE, the steel tools, of course. [ 00:07:25 ] And RS Pro, I think our RS Pro share is about 30 to 40% in Scandinavia now, which especially in the tool section, because at sea they will lose their tools, it will go rusty, it will be dropped in the sea. It's just a better option than buying the expensive branded ones if it's basic tooling. And also, good to mention is that when you have a normal factory and you look at the breadth of the purchase over the total supersections that we have within the offshore maritime, they buy in every supersection. And when you have a normal factory, maybe they're buying in 10, 15 supersections, and that's it. But within the offshore maritime, they use the complete range of all 34 supersections. [ 00:08:10 ] And especially within RS Pro, it's one of the most important brands that we are selling globally to the offshore maritime customers. Do we think that this is a change in customer behaviour, that we're seeing customers consolidate orders and therefore looking for one supplier or one distributor that can do more for them? Or is it in fact the impact of our credibility, reliability and range? Or is it a bit of everything? The traditional way of purchasing, where they would go to a ship chandler with a list, the ship chandler would turn around and buy everything, have it packed and sent. But it might be a cost issue; but they're now trying to skip that middleman, those middlemen, and buy more and more directly, which kind of changes the purchases all day. [ 00:09:09 ] Suddenly, they have a million suppliers all over the world. And that's what we see locally, that when we come in and we have that one million items, they start to see us as a one-stop shop. And also to mention that when you look at the difference between the countries, Scandinavia, and we talked about it yesterday, is more a ship-owner country where a lot of ship companies are based. And when you look at the port of Rotterdam, 33,000 vessels coming in each year, it's more a ship-chandler environment instead of a ship-owner environment. So the big difference is there; the influence that you can have with the ship owner is much bigger than the influence that you can prove into the ship chandlers because they're only looking at availability, range, and price, and delivery time, and that's it. [ 00:10:00 ] Yeah, to answer your initial question, I think it's a bit of everything. I think it's a bit of our brand awareness within the maritime industry. I think it's improved credibility. I think it's some of the partnerships that we've been forming with some of our big clients, our big global clients, are helping us to increase client base through word of mouth, through networking, through marketing efforts. But also, it's back to the partnership; it's gaining that partnership, and it's having relationships directly with our buyers to understand their requirements. Try RS, try us out, see what we can do. And actually, our pricing is pretty good, but actually, to get your product there is more important, and that's something we can do for you. [ 00:10:48 ] I'd like to understand a little bit more about how we define partnerships or how you guys define partnerships, and what the requirements are from our customers that mean that partnerships are so important to them and to us. From my point of view, what kind of effort are the customers willing to do to get the RS brand and the RS range to their customers and to their end users? And if they are willing to put effort into that, like marketing or promotion on the website, or a combined marketing tool like Showpad, or like their interactive PDF or combined catalog, then they are willing to create more awareness with the end user instead of just being a supplier. [ 00:11:37 ] So a partnership is not only about getting the RFQ and delivering the purchase order, but we are looking further than only the basic relationship that you can have with the customer. With an export, we have a little saying: leave the how to us, and that's what we are driving to our customer. So our customers, they want the product when and where they want it. And actually for us as a business, a global business, it's up to us to get it there. It's up to us to prove our worth, if you like. And I think great results, great sales, great communication with our contacts shows that we're doing that. And I think feedback from our buyers actually is a partnership is about, you know, let RS drive us, almost. Let RS drive us. [ 00:12:25 ] So I think historically, maybe the customer has come to us with a shopping list, we've serviced, you know, job done, if you like. But actually, it's now about driving. It's about understanding the next port of call. It's about understanding the next stop and actually future planning, maintenance planning, all of those good things actually help our, it just helps our buyers out, really. Puts us in the forefront of their minds, really. Just go to RS; they'll just help you. And that's the sales pitch I tend to use within my market. You know, leave the how to us. What do you think the non-negotiables are for our customers when they're looking to work with a business like RS? They need confidence. They need confidence within our business. They need in the product. [ 00:13:11 ] They need to ensure full compliance wherever the product is going to be in the world. They need data. They need product specs. And I think that is the key requirement. And I think without any of that, the buyers are going to struggle. The thing is also that when they are placing the order, they don't want to get, they don't want to get bothered by delivery times or back orders, et cetera. So, they expect from us that we deliver as soon as possible, as we can, to complete that purchase order because the vessel is coming in that day and going away the same day. So, a reliable, trusted partner to make their life much easier instead of creating a lot of trouble. And also, just the safety of having a point of contact if something comes up. [ 00:14:04 ] So, if something is really, really urgent, they can always call Dave in Benelux, they can call you in the UK, or they can call me in Scandinavia and we can sort it out for them. So 24 hours, that's too long very often. Yeah, yeah. The thing is that I always compare it with the normal business. When you look at a factory, normal factory, they are going to be closed at six o'clock or 5:30. But within the offshore maritime, it's 24/7. And that's the big, big difference between the normal business and the offshore maritime business because it keeps on going globally 24/7, not only with our market, but it's globally. If you look at a traditional factory setting, you know, the buyer potentially is in the same room as the end user, potentially, you know. [ 00:14:54 ] And if an item is out of stock, here's an alternative, let's discuss. that. You have a buyer maybe in one market, a vessel in the sea somewhere in another part of the world, and actually they're looking for suppliers that will find suitable technical alternatives. I think that is key for customers, driving the customer, almost foreseeing the problems. I think probably sums that comment up, actually. Do you think that our customers look at as local businesses, or do they look at us as a global entity that can help support them wherever they are in the world? I think it's a classic one. I mean, we have the local presence, but the global reach. And especially when I talk to my customers in Norway, they all know that we have an export department. [ 00:15:47 ] I make sure to tell them that. They know we have a huge maritime operation in Benelux as well. But if they're buying locally, they will think of us as a local one. Where we absolutely support, as a business on global purchasing, is vessels' movement. Vessels move between markets, between countries. And at the end of the day, we want our customers to think RS Global. And actually, the point of servicing our customers between the three markets and other markets that we work with, of course, is to ensure that it's seamless, that pricing is okay between markets. So, for example, Gorm and I share, and Dave and I share numerous customers, actually, where one day they're in your market, Gorm; they're over in Stavanger, and another day they're in Aberdeen or in Southampton. So we share these customers. So we talk about their pain points, and we put in contracts and agreements and share calls with our customers. Because actually, for our customers, we're just, and we just want to be RS. We can support you globally. And that's the work we're doing between our markets. [ 00:17:04 ] So you're all here in London because you attended the IMPA Fair yesterday. What are the key trends and topics that came out of yesterday? I think the key topic was sustainability and ESG in general. And we see that there's a strong focus on that in the whole industry. I have a lot of customers, ship owners, that is, that have this local competition between the ships also, which is to see which ship can travel a certain distance the most fuel efficient. So they have a strong focus on that. And we saw some seminars yesterday, all talking about ESG, talking about CO2 emissions and recording those, and of course, reducing those. Of course, we hear a lot from our vessels directly, I think globally. [ 00:17:57 ] Recycling, I think, is a big one that came out yesterday within our sessions, but also over the past year or so. Hazardous materials, of course, our vessels are buying paints, batteries, glues, all those good things that we sell, but actually a big focus on recycling and what to do with them when they're disposed of from the vessels. So lots of green topics, I think, came out of yesterday. We launched the Better World Products range around 18 months ago. So the appetite's there; customers are actively looking to see how they can bring more sustainable products into their operations. I will absolutely say so. Last week, I got an RFQ from a shipbuilder. And in the RFQ, it stated that if the supplier has any suggestions or alternatives that are more sustainable, then they're absolutely open to that. [ 00:18:55 ] So they're actually not just open to it, but actually chasing it as well. They want us to come up with better alternatives. But it's an active consideration for customers these days. Definitely. I think they are actively thinking about where the goods are coming from. Location-wise, market-wise, are we shipping these products halfway across the world unnecessarily? Is it something they can buy locally, potentially? Because that all adds to the CO2 and the carbon footprint. And I think Better World Products, I think there is definitely more awareness. And that's the work that our local sales teams and our marketing teams, the efforts going into the brand awareness and those kinds of things. But I think also our credibility as a sustainable supplier helps this. They put their trust in us. [ 00:19:50 ] Of course, these products need to come with data, which we can provide them, for them to make their own calculations and their own decisions with regards to recycling and hazardous materials and all these kinds of good things. So there's lots of factors that go into Better World Products and sustainability. And that's something that RS really are on the journey with the maritime industry to support. Buyer behaviour is changing. The industry is going more online. Maybe it's a little bit behind the times, potentially, and catching up with some of the other industries. But actually, some of the data platforms that we engage with as a business are helping our buyers give our buyers more options, not just one route of purchase. It's helping them with data. But actually, that shift in buyer behaviour will, of course, dictate the future of the market. But those were good topics of yesterday's discussions, for sure, making buyers' lives easier, I guess. So if we're talking about operational support and trust, reliability is crucial within the maritime industry. And downtime, we know, can cause and cost so much money. So how is RS best placed to support customers when they're facing downtime, whether it's either preventive or reactive maintenance? [ 00:21:47 ] We know downtime is costly, but what kind of cost are we looking at from a customer's perspective if they have to delay vessels, even if it's by an hour or up to a day? We've been discussing the importance of downtime and how to avoid that for this talk. I have a story from Norway. It happened, I think it's about three years ago now. One of our offshore clients had a rigged-down situation, and they needed a small piece with a small relay, and they needed it now. The rig was not producing anything, and they were losing approximately, let's say, £100,000 an hour. After a few meetings there, we managed to send that small relay to our local in Uniten. [ 00:22:36 ] Then the offshore company booked a private plane flying all the way down to pick that up and had it in the rig within eight hours. So they spent probably £2 on the component itself and tens of thousands of pounds on the freight costs. Crazy. The only experience that I have is a cooperation between the export department and the Benelux; is that the vessel is based in Aberdeen for a short period of time, and they need products with a local customer in the Netherlands. The first question that we have is, can we deliver directly into Aberdeen? The first answer that we normally used to say is, no, we can't. We have to deliver it first in the Netherlands. But I said to the customer, I'm going to call my colleague in England to see what's possible. [ 00:23:29 ] They ordered, I think, about €10,000 or €50,000, only about Cobamets, I remember. And to Kate, we have a direct delivery into Aberdeen instead of the normal process that we have. So it's very important; the experience that I have is that the cooperation between the countries that we have built up over the last years is the most important thing to look forward to and working together. Is reducing downtime something that customers talk to you about? Is it a concern for them that they're trying to mitigate within their daily operations? They need to know that they will get the part as promised. That's one of their major concerns, I would say. And if we can't deliver, then be up front with the customer; give them options, give them support, give them alternatives, which RS can support, of course, lead the customer to the next question. [ 00:24:29 ] And how do we work with our suppliers to support our customers? What is that relationship like? Can I answer that? Yeah, go ahead, go ahead. So, over the years, we've worked closely with our suppliers with regarding to providing additional data for our customers. So, a lot of our maritime customers, of course, need ATEX-approved products. That's something that the supply team has been working with for many years to improve the amount that the quality of the data is available to our customers, so they can make decisions on products that are right for the industry. We hold very rich data within our library, whether it's online or behind the scenes. And that's something that we pull on as salespeople to really make sure that the customer is buying suitable items for the environment and the requirements for the vessel. [ 00:25:23 ] Yeah, and if I can just add to that, I think we have a great relationship with all of our suppliers, I would say. And we have several cases where the customer needs a bigger solution, not just single components. And then we can always contact our supplier again, and we can all together find the best solution for the customer. Very important also is to mention the strategic suppliers. We had a good relationship with them. And if the customer has a question about a product that we don't have in our range or whatever, we can contact them to request the information and then send it to the vessel. And they say, okay, this product is available to RS, but it has a delivery time of two weeks or three weeks because it's not standard in our range. [ 00:26:10 ] So the most important thing is that we give the customer an option instead of a no. Because when you're saying no, they are gone and they won't come back. But when you give them an option, they will say, okay, it will take two weeks. It's fine. I will order it and then wait. Otherwise, you're going to say, no, just go to the competitor. Make it easy. Make it easy for the buyer. Make it easy for the vessel to trade with us. With the increased focus on sustainability in ESG, do you think that the focus on data, accreditations, and certifications will increase for our customers? It's a trend we're seeing already. It's a trend that any seminars or conferences that we attend, it's what we're hearing. It's something that RS is actively seeking from our suppliers. [ 00:27:05 ] Fantastic, with regards to ESG, but also with regards to export controls, customs documentation, all those good things that vessels require when they're going from port to port. So, yeah, to answer your question, it will increase. RS are in a good position because we're already on that journey. And now the customer's asking more and more about ESG, but we already have started that journey instead of having to go back to the suppliers and say, okay, do you know something about ESG? Because we get that question, but we can answer them now directly. Say, okay, this is a product, 80,000 products, better world, go to the website and you'll find all the information that you need, data sheets, etc. I think that's a really important point, Dave. I mean, our online store is not just somewhere you go to purchase something; it's also an information library. So you have all the documentation there straight away, and you will have it accessible. Yeah. And that's why, again, the end user needs to create more awareness of RS, go to the website. And it doesn't matter if you are in Singapore, in China, or Kuala Lumpur, or Norway; you can use RS anywhere. And you can buy those products anywhere, but buy it through RS. Great answer, guys. Thank you. [ 00:28:34 ] So looking ahead, what do you see as the biggest challenges for the maritime industry and how can RS continue evolving to meet those needs? It's all depending on what is going on in the world. Like, what is oil going to do? Is the price increasing or decreasing? Are we going to get more green vessels? It's all depending on the world economy instead of the local economy. Because when you have an oil crisis, all vessels, especially in Rotterdam, there are more vessels outside of the port waiting until the price will go up, then going into the port and redocking their products. So it's all, yeah, it's a little bit the same as a stock. When you look at your shares, either it goes up or it goes down. It's the same within the offshore maritime. [ 00:29:31 ] It's all depending on the world economy. Import, export, automotive, yeah. I absolutely agree with you, Dave. And I think the most important thing for us as a partner to them is just to be adaptable. Keep on adapting. And just the small differences that you see; a lot more electric vessels are coming out for short distance, especially like the ferries in Norway and stuff. It's basically only electric ferries now. That's a whole nother business than running an old diesel ferry. So yeah, just keep being adaptable, I think. I think the future of maritime is reducing carbon emissions. That's the key theme that I think we've all learned over the years and NRS are engaging with. I think buyer behavior is changing. I think products are, the data and the information are now readily available to our buyers, to our end users. [ 00:30:25 ] The internet is our friend and their friend too. And I think as a business, we need to continue to stay close to the maritime industry, support where we can with regards to partnerships, understanding pain points, offer the right product at the right time. And I think working together, we'll work with the maritime industry to improve and grow. So how impactful are economic changes to the maritime industry? Maritime industry is susceptible to economic influences and changes. However, 80% of the world's products are moved by the sea. We saw it in COVID, and actually we saw demand increase in COVID. So, we saw a lot of industries. In COVID, we saw a lot of demand reduce. However, maritime is not impacted in that respect. [ 00:31:28 ] So people still need to move goods, people still need oil and gas, people still need cargo, people will still fly and go abroad. So it's not impacted, kind of, less impacted. Of course it is if oil, in your example, of course it is if oil goes up; we get that. But actually, realistically, maritime is not going away. That's what I'm trying to say. So you can kind of shut the world down in COVID, but the vessels are still going to sail. COVID was impactful for so many different industries. And as you said, many failed and some rose through that. How resilient is the maritime industry to outside economic changes? And everywhere you are, it's all depending on import export. [ 00:32:11 ] So as long as Europe is doing a lot of import, there will be coming a lot of tariffs are up and there's less import. But cargo still needs to move. So cargo still moves, whether you're paying, you know, a hundred percent increase in tariffs, whatever. Cargo still moves. And there's still a global demand, and 80% of, you know, the world's cargo is moved by sea. So that's not going away. The thing is, also within the offshore maritime industry, when a country is in economic decline, the maritime industry is in a later stadium in decline. So it's not at the same time. It's a period of half a year later or a year later when we get the influence of a pandemic or a crisis. So it's not really impacted directly. [ 00:33:02 ] So when the country is in decline because of their economic results, the offshore maritime will come in a later period because the vessels are already, and the orders are already being placed in a far country. So the vessel is taking maybe three or four months to get into the port of Rotterdam or whatever. So it's a little bit later on in a year where the decline is a little bit palpable. In our experience, the maritime industry is very resilient. We've seen lots of economic changes over the past years that we've been working within this industry combined. The pandemic, global pandemic, is one of them. We've seen increasing demand in our services and our support and driving our vessels and our customers accordingly. We've also seen that product quality and service quality outshine any of those concerns. [ 00:34:03 ] And I think with regards to the maritime industry as a whole, massive industry, 80% of the world's cargo is moved by sea, and that's only gonna get more. That's only gonna get bigger. So before we conclude today, guys, firstly, thank you very much for your time. But is there anything that you guys would like to talk about or add, to highlight any of the issues or challenges or opportunities within the maritime industry? I think for me, I thoroughly enjoy working with our vessel clients. I look forward to growing with some of our clients over the next few years and supporting them, offering all the good services that Export Solutions and RS Global can offer. And a message to all our customers at the moment is continue working with us. We thoroughly enjoy your company. Well, that concludes our round table discussion today on the maritime and offshore industry. Thank you all so very much for your participation. You're welcome. Thanks a lot. Thank you.