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Remembering a Champion of Seafarer Rights, Software Changes Class & Mission-led Funds · UnDocked: The Maritime Transformation Show

• Nick Chubb: Hello everyone and welcome to Undocked for another week. Hello Raoul Harris, how are you? Raal: Hello Nick Chubb. Yeah, I'm doing good. I'm doing all right. Yeah, it's Tuesday here. It's kind of misty and sort of a bit bleak. Yeah. Nick Chubb: kid. I like your weekly weather report. It doesn't often make it into the edit, but I always get a weather report from Ryle at the beginning. Raal: Yeah, definitely take it out. No one cares. Nick Chubb: You So what's been catching your eye this week? Raal: Well, obviously, micro updates ⁓ the the Iran war situation and the sort of various changing sort elements of we'll try and do our best to of demystify, I guess. the things I noticed really, I guess, big takeaway, no real sign of de-escalation. Nick Chubb: Yep. Raal: 11 merchant ships have been hit since the start of the conflict. from the very north of the Persian Gulf off Kuwait ⁓ down to the Gulf of Oman, which is very, very concerning. And attacks from shipping might come from the Iranian coast. I think they continue to operate large number of small attack boats as well. with an inventory of missiles and drones and so on. And also well read something quite concerning that the use of limpet mines cannot be ruled out as they have been used in previous Iranian attacks as well. So huge number of reasons for ships be ⁓ operating at the of security levels we talked about last week and being very alert to dangers. The threat level is set to Nick Chubb: ⁓ wow. Raal: critical, which I was very to read basically means an attack is almost certain. So, ⁓ know, that's how bad things ⁓ there. our ⁓ thoughts, obviously, with all of the the seafarers there, I'm getting mixed reports on number of casualties, but certainly there have been some, I think, for again since the one that was reported last week. So. You know, it's a it's an awful situation and ⁓ and we do really feel for for everybody that's that's there and in region. But as we said last week as well, the knock ons are far wider than just those that are in the area as well. We talked about seafare mobility last week. We said we thought this would be one of the things that would be an issue. The Middle East being such a big hub, places like Dubai and so on, being big transfer hubs, lots of flights break there as we've seen. And the are being talked around ⁓ for crew travel, four 500 % up. So, ⁓ you know, people are money. We did say that some people would be making money here, but I mean, obviously, Nick Chubb: Yeah. Wow. Yeah. Raal: some supply and demand, but there's also a huge amount of disruption. these are the kind of knock-on effects that we're seeing. And obviously, people wanting to get seafarers home and get them out of those regions as well, not just to kind of do to facilitate crew change and things like that. So huge, huge kind of disruption that we see in there. I think one of the things that's that's good a sense is that shipping is in the news. There was that fantastic piece I shared with you, Nick, that was in the The Guardian. I'm sure it's still up there if you want to see it. I think what I liked about that piece is it was really you in shoes of a seafarer. which I think we tried to do last week, but we sort of went quite technical, didn't we, to sort of talking about all the different elements. But that article sort of really brought it home to you, sort of stood on the deck and things unfold from there, Nick Chubb: We should put it in the show notes because it's a really good article but what's interesting about that to me is I think this is the first crisis, for want of a better term, low-Earth ⁓ have existed seafarers have access to... ⁓ the internet and can share on social media their experiences. They can speak to reporters from The Guardian or any other publication. And it kind of reminds me of, going back to the sort of early 2000s, Iraq and Afghanistan, of soldiers being able to share their experiences much more fluidly than they used to and people getting a real picture of what life is like on the ground. Even if you wind back to COVID. where seafarers got trapped, many for months and some even for a year plus, the ability to share those stories with the world just wasn't there. And so actually we've kind of reached a new frontier of seafarer communication, which has been really fascinating to watch. And I'm pleased, really pleased to see mainstream media kind of picking up on that kind of human interest part of it, because I think it's super important. ⁓ Raal: Yeah, thought amidst everything else going on, the fact that they certainly zoomed in and who knows how that article came to be. It may be that seafarer actually instigated that or it could be, ⁓ somebody meeting from shipping industry who knows. But I think it's great to see that they're looking at that dimension, putting the seafarer's voice into that because Nick Chubb: Yeah. Raal: I think what it brought home to me, and there was some footage also I saw online, like you were saying, Nick, with the ability to kind of get connectivity, to get clips out there. And it was from Seafarer's View on, guessing it would have been the bridge wing because they had the camera there rather than the deck, but it looked like the deck. But ⁓ were watching, you know, those war going over. ⁓ you like, ⁓ as said last week, these are big, Nick Chubb: Yeah. Yeah, yeah. Raal: big vessels, they're very, very vulnerable carrying explosive materials, oil, all that sort of thing. So ⁓ to see and to see that from a seafarers point of view ⁓ really brought home to me along with that article as well. ⁓ Less edifying elsewhere. I read ⁓ in Tradewinds, Donald Trump, famous ⁓ for his telling shipping ⁓ that ⁓ should show some guts and drive ships through the Gulf, which got my back up and it probably did lots of other people's as well. But I'm not sure that ship owners will need huge incentives on top of what they've already got from a market perspective. We talked about this last week. The spike was record ever, suppose it $420,000 a day I Nick Chubb: I don't think this has been published anywhere, but I've been told privately by people that rates have gone as high as 600,000 per day for a VRCC on a spot. Raal: Wow. Well, that's pretty breathtaking. think when you look at the main trade route from Middle East out to China, I think it's called the TD3C route. I'm not very good on these things, but I think the one to watch really. whatever's happening there tends to drive markets. for crude oil, is for ⁓ the biggest. Nick Chubb: So. Raal: Today's episode is to you by Fortec. crude oil shipping lane, I think it is. So when that's a high point, it has knock-ons all over across in the market. And yeah, the figure I was creating, not as dramatic as the one that you were seeing, but 420 a day, it peaked, I think the oil price has gone down a little bit from a peak of $120 a barrel. But when you look at that, if you're talking about that kind of 420 a day, Nick Chubb: Yeah. Raal: and you're looking at that particular route, I think it's around about 45 days. So that's one voyage is about 18 million. I think that's right, isn't it? About 18 million. Now look at the, should say not profit because you've got OPEX in there is probably, I don't know, four or 500 a day and then bunker costs on top probably is 45 is a long voyage, big ships, I don't know, two, two, two and a half. Nick Chubb: Yeah, yeah. Raal: million of that will be in bunkers and port costs and all that sort of stuff. But it's still a sizable amount of money, right? Nick Chubb: It's worth saying that until a few weeks ago, you could buy a VLCC carrier for about 50 million US. So you're near enough talking about the ship being sort of paid off in 12 months for a ship that might last another 10 to 15 years. So yeah, so the market economics have gone a little bit. Raal: Yeah. Yeah. In marine environments, power variability and efficiency are critical. Yeah, and I think a lot of people looking at this who don't follow this side of shipping, know, probably scratching their heads a little bit like why is supply and demand? you know, how can this kind of happen? I think there's a few things just to make you aware of. Fortex N-Line panel mount glass monitors are built for operational stability across diverse vessel setups. normally it's almost that capacity anyway. So it doesn't take much to kind of knock it back basically, small changes in what availability can shift markets. And of course, this is availability in terms of ships not going there or ships being stuck there. Combine this with robust engineering, DNV approval, and global trust from ship owners, and you have a display platform built for real-world reliability. But also as well, longer voyages means that ships are out of action on if they have to go on longer routes So that can change it as well and tart the market. A of lot of ships will be under long ⁓ as well. So they may not be able to jump in win this ⁓ business straight away. And I think the other thing is that the itself can't wait refineries are on this very, quick turnaround. Their team of technology specialists helps ensure smooth integration from video input matching to lifecycle planning and support. Whether you're specifying systems for new builds or retrofits, Fortec delivers marine monitors that enhance performance while reducing risk. Visit the full product range at Fortec UK. It's the whole thing is predicated on this kind of very ⁓ fast changing supply chain. on top of all that, you mentioned ⁓ buying tankers there, ⁓ a new one take what two or three years or something like that probably. And that's if the shipyard can do it, if you can find someone with capacity. Nick Chubb: Yeah, to give you some sense of scale of how big these things are, I used to run laps around. the VLCC I worked on when we were at Anchorage. Seven laps was a 10 kilometer run. it's, it took me, I wasn't very fast, took me about an hour. So it's a serious bit of kit. And as you say, well, it takes best ways kind of 18 months to build, but the order books, generally speaking, are kind of two, three years ahead. So if you order a brand new ship today, you might get it sort of back end of 2028, 2029. And so yeah, we have a of near enough there is a fixed supply of ships in the market and then you also need those ships to be in the right place. So if a ship is on a voyage charter, it gets essentially hired out to move oil from one place to another, once it's finished that charter, it then sort of goes back to the ship owner and the commercial operator and the ship owner will then sort of make a judgment call, should I send this ship to the Middle East? Should I send the ship to West Africa? and somewhere else in the world. And then now the ship will start steaming in whatever direction that's chosen. And ideally, you will find a cargo that you can pick up and fix while you're en route. If you don't, if you end up not finding a cargo, then you will sort of be sat waiting at anchorage waiting for a cargo. So a lot of ships end up anchored in Fajira for weeks at a time. Raal: Thank you so much. Nick Chubb: The demand fluctuates, the actual supply ⁓ fairly static for ships themselves. Raal: like a sort of taxi rank. They have to go and wait, wait it out and see. Yeah. And, and, and that's the thing about fixing assets as well. I mean, the other thing to bear in mind is that somebody may need you at a certain time. You may be weeks away in voyage from that. So, you know, and, and then on top of that, you've got to make sure you crew that vessel. And if you can't get crew because of all the reasons that we've talked about already and the complications of that, then, then yeah, there's a lot of dimensions here. Nick Chubb: Yeah, exactly. If you're interested in the commercial operations of tankers, I'd recommend you check out the interview we did with Michael Skow. He's the CEO of Hafnir, the world's largest tanker operator. And he actually went into detail on commercial operations, tanker pooling, why it's important to have ships positioned all over the world for when the right cargoes come up so you can get them at the right price. So it's a really good episode to go back to. Raal: Yeah. Yeah, I think so because apart from anything else, Michael has made it an art to work the spot market. know, this kind of volatility in the markets that would keep most of us up at night and one way, know, desperate for a nice long term, you know, long term container run or something like that. That's not Michael's bag. likes to kind of, he's worked out to succeed in that sort of ambiguity of the spot market. So yes, do check out that episode. Nick Chubb: Yeah, yeah. sure. Raal: And the last thing, just to say about this as well, is that there's money on the table, right? Nick Chubb: you Raal: there will be a lot of people looking at this and are looking at this and saying, this is a great opportunity. This is ⁓ a time to really kind of make our fortunes as it were. And so, you know, there is pressure from some owners at least ⁓ people to sell through those. time when pressure is put on to managers. Managers, certainly all of the managers that I know and work with, ⁓ very much put seafarers first. I've never heard anything different, you know, from closed door meeting. I've never heard anybody change direction from saying this. Absolutely seafarers safety is absolutely paramount. If you look at all of the ⁓ messaging from Ockham who represent all of the energy majors and Nick Chubb: Yeah. Raal: into TANCO, who represent all the TANCO operators, again, the message is clear. The safety of the seafarers is absolutely paramount. So those people will be having some difficult conversations at the moment around those owners who are looking at this with a purely commercial eye those that have duty to protect and care for their seafarers. Nick Chubb: odds with Donald Trump which is a you know it's always an interesting place you fight to find yourself I think if you don't find yourself odds with Donald Trump at some point in your life and maybe you're doing something wrong Raal: you're probably not doing something right. But if I may, this gives me a very nice segue that we finished there on just on that point about seafarers and care for seafarers. This is a topic that we talk about a lot, know, and seafarers we've discussed and many years and on this podcast around ⁓ any transformation being fundamentally about people. So I really wanted this week to spotlight somebody ⁓ who has been part of some of the big transformations in our industry, particularly around crew and around crew welfare. And that's ⁓ a gentleman called David Dearsley, who sadly passed away last month. thoughts go to his family and friends ⁓ and ⁓ But he an ⁓ important industry as well. ⁓ privileged enough to have worked alongside him and call him a friend. And I think it's worth us really maybe digging into some of the transformation that happened and how he kind of approached that around the way in which, know, seafarers rights, labor, and really around the way in which employers and, kind representatives coming together for the good of ⁓ the industry So he was absolutely one of the biggest figures in that. 45 years in shipping at sea and ashore as well. Really instrumental in building some of the global frameworks that govern seafarer welfare and employment today and respected by both the owners and ⁓ unions as well, which is not a given ⁓ because those forces can sometimes be By default, the units run on 12V DC with a 115-230V AC power supply. 9-36V DC input with galvanic isolation for greater compatibility. EMC filtering in line with IEC 60945. Nick Chubb: That's rare. Raal: Yeah, they can be in juxtaposition as well. So and I think, you know, much as an industry figure, also an amazing guy as well. ⁓ was privileged to to work with him at end of his tenure when he was ⁓ leaving his role ⁓ ⁓ IMEC where he'd working on the Maritime Labour Convention. And I'll go into ⁓ some of the detail around this for so they understand. ensuring safe and compliant operation. why I'm saying this is such an important contribution. He went from that role and went into being consultant. And he was a consultant to us at VideoTel. I remember him as being extremely kind of sharp guy. very economical in what he had to say, he really kind of listened, he really got things, very thoughtful ⁓ and you know and really sort of really generous with his sort of time ⁓ and helping you know people like me, this was back right at my start of my journey to sort of understand you know what was going on there. So a great guy, you will see nothing but good words about him. I'm sure there's a really nice tribute to him from the on the ITF website. There's plenty of stuff on LinkedIn, but let's dig into some of the milestones of the career maybe. So he was the first Secretary General of IMEC, which is the International Maritime Employers Council. You know IMEC of course, Nick, Nick Chubb: It's fascinating because I didn't know David. But obviously, I joined the industry in 2011. And lots of the things that you look at when you look at his career profile, when the tribute posts started to come out, are things that I've sort of taken for granted as always being there. know, Maritime Labour Convention. Raal: Yeah. Nick Chubb: the work done at IMEC. So IMEC is the International Maritime Employers Council, ⁓ is a representative body of employers of seafarers. ⁓ don't actually know ⁓ many seafarers they're responsible for, but it's well into the tens of thousands, ⁓ think possibly as high as sort of 80,000 or so seafarers. ⁓ ⁓ know some of the work that IMEC has done over the years that I've followed has been ⁓ centered around ⁓ role ⁓ or the ability of the seafaring profession to kind of lift people out of poverty. And so I may spend a lot of their time going out to places that... where poverty can be quite extreme and looking at how you can find a kind next generation of seafarers that will be able to go and earn a fantastic wage that will be sort of totally transformative for their family. I've met at various conferences over the years, I've met many of the seafarers who've sort of come from those backgrounds from South Africa, from the Philippines and the... What is provided in terms of a career structure by IMEK I think is actually quite remarkable. Raal: Yeah, I make so I make representing the employers as you might expect, they'd sort of shipping companies in various, you know, labor negotiations. That's kind of where it started from. And I think, I think that's the thing with David, I think it was there 25 years, I think, yeah, 25 years. You mentioned ⁓ Nick, the training that they do, they invest very heavily ⁓ MAP, the training center there in the Philippines, really pushing innovation there. They have a training fund which their members can access ⁓ specifically for innovation to try and push. So when you're, as an individual company, if you're looking to like in early days of VR, for example, ⁓ quite expensive to kind of bring in that expertise and stuff like that, that fund is available if it's justified. you know, to sort of ⁓ help with seafarer training. they do interesting things like that. And David was really ⁓ instrumental in setting up, ⁓ setting the for them to then take on they have. So yeah, ⁓ really ⁓ good ⁓ organization and a proud sort of record for him to ⁓ have started that. ⁓ One of the key things that they do and they still engage on today's collective bargaining agreements, for example, so they work very, very closely with the trade unions. And again, you see that as something throughout his career that he was able to do, was able to look, to be able to get those people around the table, to get them focused and to get, he was a good negotiator, you know, getting good outcomes. And I saw that. Nick Chubb: Hmm. Raal: even when there was conflict in any of the things that we had, he would cut very quickly to what was really important there and so on. So as well as IMEC, his tenure at IMEC, he also was Deputy Secretary General of the International Shipping Federation, which was ISF, is the abbreviation there, we love our abbreviations, which I think became ICS, I'm pretty sure it evolved into the ICS. ⁓ and, and he was, you know, did, did a lot of really important work as well while he was there. He was very active as well in training. ⁓ so looking at revisions of SDCW and things like that. I'm almost certain that he was one of the people that ⁓ was foundational in doing what is now the industry benchmark for English language testing, the Marlins English language test. Nick Chubb: ⁓ wow. Raal: Marlins, which was spun out of V Group, so that's a test to basically see if people have a good enough of English to work on ships where English is the working language. ⁓ I believe David was instrumental in putting all of that together as well, as as lots of other sort of training standards. So he was a good force on that. And he worked very closely with ⁓ Nick Chubb: Yeah. Raal: us, I think just before, which is one of the reasons he became an advisor on the MLC, which was one of his ⁓ really big achievements there, which is the Maritime Labour Convention. You mentioned there, Nick, that you kind of feel like you took that for granted, that was always around as a young man, but really called the Seafarers' Bill of Rights. And it was a major milestone when it came in. ⁓ I think, you know, what does it look at? looks at things like employment contracts, wages, working hours, hours of work and rest, the accommodation, healthcare, welfare protection, stuff in there around making sure people have balanced meals and different meals and meals that are, you know, part of their culture, all that sort of stuff. So really sort of some really foundational things that affect pretty much all of the seafarers ⁓ in the world today and that they can rely on. it was an important piece of legislation from a lot of angles. think one of the key things there is the fact that there were lots and lots and lots of different little bits of legislation that all kind of existed piecemeal. And it brought it into one framework. And it's sometimes referred to as the fourth pillar of international maritime regulation. So you got SOLAS for safety more broadly, MARPOL, SDCW obviously on training. And MLC is really like a global baseline for seafarer treatment and welfare really. So regardless of the flag state involved, this is something that applies to everyone. Nick Chubb: When you look back on someone's career like that who's made such a big impact in so many areas, what are the standout things that you remember in terms of ⁓ how he went about creating that change? Because that's big, systemic, industry-wide change that takes many decades to complete, and it looks like he's done it three, four times over the course of a career. Raal: Yeah, I I didn't even mention, I mean, just again, because it backs up what you're saying. There was also the International Bargaining Forum, which I wasn't even aware of. think it predates by, you know, time, and IBF, which is known. And again, that was really, I think that was in the late 1990s that was established. And that's really about a ⁓ collective framework for seafarers to actually get fair treatment and stuff like that. So it had... ship owner representation through IMEC, which he was part of, and then working closely with the ITF. And that's looking at, yeah, like I said, global agreements, employment conditions, welfare provision, all that sort of stuff. And I think that David's role in that was representing the ship owners, we say. ⁓ I think that, ⁓ ⁓ of ducked your question a little bit just to kind of make that extra point about it. But the question you asked me was, what is it? about somebody's ability to do that. And I think the thing with David was I don't know what his politics were. I have no idea. He was a very down to earth And I would he was very treatment. So he was pro-worker and all those sorts of things. ⁓ Nick Chubb: ⁓ Raal: But clearly he was representing commercial interests there. And these are sort of this ability to be able to see both sides and understand what a win is for both sides and to carefully bring that about through almost through a process of kind of elimination, if you like, but real pragmatism would be, and you know, not getting emotional, Nick Chubb: Yeah. Raal: what was there to be won ⁓ and seeing that through. And I that's what I would say ⁓ his crowning achievement, I guess, if were trying to put it all into one thing, was to get a good outcome for both parties that was workable. And guess what? It is, it's working, it's out there. Things are much improved, still, know, pockets where we have to go. But those who are... Nick Chubb: Yeah. Raal: let's say call it the good operators are focused on these things in a way that they they weren't previously. And there is some sort of consistency around there and some and some global ideas around what good looks like and what fair treatment looks like and all that that weren't in place before. And all of that would have been very hard fought, you know. But but the fact that David is loved by the likes of ITF, Steve Cotton wrote a very nice piece about him on their website. and the employers as well, Simon Spacey, represents CMA CGM, he wrote very, very nice piece about him, as they both knew him as a friend as well, but they representing very, very different interests there. And they both looked to him as someone ⁓ with, you with integrity and honesty. And I think that's the thing, if you really wanna someday someone to talk about you like this on a podcast. think those are two things that should be really on your mind having absolute integrity, reliability. ⁓ If you say got a deal, then we've got a deal. So an honest broker someone who can be pragmatic and get things done. And I think that's what we're missing lot of in the world today. is a lot of people are digging into positions that will never be reconciled. And I think that the ability to not let perfection the of good is something that's missed as well these days. that would be my thoughts. Nick Chubb: I was on holiday a couple of years ago and ended up sat in a bar with a stranger who was politically on, who couldn't be further from me in terms of points of view. And actually it was fascinating to spend a couple of hours, I think we probably went on for like three, four hours. discussing with them on a very, very human level, you know, kind of where their point of view comes from and where my point of view comes from. And actually, you know, there are so many more points of common ground than you would ever get through something like social media where opinions just get more and more polarized. so I think it's a, it's a, I kind of, my read from that is it's a nice. ⁓ reminder of two things. One is to actually sit down and build relationships with people who may be on the opposite side of a debate. And then the second is that actually pragmatism often in reality is the thing that carries the day rather than getting hugely ideological about it. It's one thing to be right, it's another thing to be effective. And I think sometimes you've got to sacrifice a bit of one for the other. Raal: 100%. Yeah. And his recognition, just to say as well, ⁓ he also ⁓ awarded the Navy Medal, which was recognition to the services of the shipping and to seafarer welfare. And I should also say on that seafarer welfare ⁓ part, he very closely with people Ice Swan And, ⁓ you know, was a champion for ⁓ that, as well. last point I'll just make ⁓ about David his family have put out that he is having a memorial at the end of this month. should you wish to attend, can. you can write to them for the details. And they are also going to be holding the memorial online as well. So maybe we can put the details of that in there for anybody who's watched this and interested to find out a bit more about David. So rest in peace, David, and thank you for everything that you've done for the industry. Nick Chubb: Yeah, what lovely tribute. And from someone who was a beneficiary of what you did but didn't know you, thank you. It's a ⁓ nice thing to think about that these things just didn't exist 20 years ago. All right, should we a software story? Raal: Yes, we had better. Pay the bills. Nick Chubb: question for you. Which of the class you would most associate being ⁓ software vendors? Raal: Ooh, an interesting one. ⁓ would have said brand level in the past. ⁓ first would have been to say ⁓ DNV because DNV always felt to me to be the most kind of digital first of ⁓ group. But having obviously worked closely with Lloyd's Register and mainly through their acquisition of One Ocean and now ⁓ Ocean Technologies Group, they I think edge it in terms of actual capabilities for me. But I think from a brand positioning point of view, thought DNV probably had the edge. Nick Chubb: Yeah, yeah, I was expecting DMV, I was expecting LR. I would have maybe expected ABS because they've obviously went down their sort of wavesight route. But open up a new tab on your computer. Raal: Hmm. live everyone. Nick Chubb: Yeah, this is like an unboxing. Raal: What am I typing in? Nick Chubb: and go to Ctrust, S-E-A Trust, .kr. .kr. Raal: Sea trust. So that's Korean, isn't it? Nick Chubb: Yeah. Raal: The Korean registry. Is it? Nick Chubb: and have a look at their brand new software hub. Raal: It's going like it's creeping along so I reckon everyone must be hitting their website right now. Here we go. So what should I look at Nick? Nick Chubb: Are you in? Are you on? So this is quite interesting. I would never called the Korean registry out being ⁓ a ⁓ software driven registry ⁓ or even having software products. And I thought it was interesting. They have ⁓ in the last couple of ⁓ pulled all of their software ⁓ into a single place, which this software hub. Raal: I'm on, Software Hub, yes. Nick Chubb: And what they plan to do with it is use the hub. First off, it's like a way for people to access how many they've got. They've got 10 different software packages that do various things from ⁓ supporting with shaft alignment, supporting with LNG filling loading limits. ⁓ ship structural strength analysis against the Korean registry rules, file management solution ⁓ that supports the rest of their software to work. They're pulling it all into a single software hub. So obviously I'm assuming, I don't know for sure, but I'm assuming what's happened is over the last 10, 15 years, they've built various kind of point solutions to support their members. And then never at any point had any kind of overarching strategy about how all of this comes together until today. And they launched it a couple of weeks ago. And what's quite interesting is that they... are leaning on AI to do a lot of heavy lifting in terms of two things. One is ⁓ dealing with customer inquiries and basically when a customer inquiry comes in, directing them to the right piece of software and the right part of the business to engage with. then two, using all of that data to produce new software that will then be released to the hub. like looking for pockets of demand that they're not quite fulfilling with their existing software. And they're going to launch new products directly into this software hub over the coming months. months and years. So I just thought it was quite an interesting point around how you position yourself as a class society or as any organization, whether you're positioning yourself as a tech company or not, or just as a service provider. But it certainly seems like Korean Registry has joined the software arms race that we've seen across all the other class societies in the industry. Raal: from class. Yeah. like, I'm just looking at basically what I'm looking at here, ladies and gentlemen, is a series of sort of apps coming together in a suite, not unlike Creative Cloud or, or the Microsoft Office suite, something like that. But I'm attracted. Yeah. C Trust fanzies I'm into fanzies. The ship fatigue analysis system, simplified direct and spectral. Nick Chubb: And they've got some quite cool ones. What the? Raal: I'm not sure what we would find in there, presumably this fatigue analysis is actually about the vessel fatigue, surely, rather than sea fellow fatigue, structural fatigue. Nick Chubb: I think so, structural fatigue, yeah. I want to have a go on KR Real 360, which is their extended reality ship-based familiarization training, which I would have thought that would be the thing that would have grabbed you. Raal: ⁓ it's a training platform, Yeah, I didn't see that that was that was what was going on there is it's a passenger vessel in the in the picture. I have to have a look. But yeah, it's interesting, isn't it? Because I think one of the things that technology does ⁓ and the digitization of things, I'm pretty sure we've talked about this before, but perhaps it bears a comment. ⁓ you get convergence, you get natural convergence of things and it reaches into that. There comes a point where any of these businesses in maritime, think any business really, will start to look at redefining themselves and asking themselves, is our core business? What is it that we do? And I see some really smart moves happening in the industry as well, where people are really bold and they'll just kind of go, Nick Chubb: Hmm. Raal: Yeah, we've got these two or three products, but this is not core. This is not core to our mission. Let's just divest ourselves with that. Get rid of it. There was one in the news. nearly talked about it. I couldn't find enough intelligent things to say about it. But just the other day there was one and they gave that very smart reason. They were just like, well, we're focused on environment and this doesn't really fit in that. It's a good product, but better if someone else takes it forward. And versus kind of saying actually, You know, we have now got a suite of products here. We can offer services in a different way. And class is interesting because it's already quite, they're quite sprawling businesses typically anyway. And I think one of the other things that's kind of interesting is you look at what they did with classification typically. And advisory kind of grew out of classification. But actually if you look at, the way businesses are structured and what they're really about, you know, you do actually see a flip and it's actually their advisory businesses, which can classify your vessel, as we move into different frontiers you're having to think about all of this. It's not just about the structural concerns of the vessel. It's also about all the digital capabilities and what you're putting in place and where your business is going to go in the future and all these sorts of things. I think there's a lot to still work out that as well, because these are very, these are very traditional, very entrenched businesses that are ⁓ innovating and are looking at kind of ways that they can differentiate and stuff like that. But they're big, most of them are really big. I don't know about the KR, I don't know what sort of size they are, you know, they're big physical dependent businesses and all of those makes it quite tricky to move quickly. Nick Chubb: think that point around ⁓ understanding what your core business is ⁓ then ⁓ of throwing everything at ⁓ you deliver that core business well I think is a really valuable point. actually LR are a great example ⁓ this ⁓ quite well to their credit back in 2020, ⁓ 21. ⁓ used to have a massive business assurance and a massive cyber risk management arm. ⁓ that had nothing to do with Maritime. ⁓ And they sort of turned around and said, actually, our core business is Maritime. We're going back to our kind of route. And they sold it. think they sold it for about $100 million. ⁓ That's what kind of gave them the firepower to then start buying up software businesses in the maritime space. And now they've become this kind of you know, sort of working towards perhaps becoming a vertically integrated software and services and class provider for the maritime industry. And I think, you know, you can sit there and think, you know, what business am I in? I'm in the services business. Or you can sit there and think what business am I in? I'm in the... know, vessel safety and performance business and the delivery mechanism may be services, it may be software, it may be providing class. And I think that's a much more interesting way of thinking about your business. It's very easy to kind of fall into the trap of thinking that the business you're in is the kind of delivery method for the business rather than the actual core value you provide to the market. Raal: Yes. Yes, it's classifying the end product of what you do and letting that decide what your business is about is probably the most dangerous thing you could possibly do. I've been working with quite a lot of different businesses. And one the discussions that typically I don't provoke but ends up happening is what is your business actually for? What is core And the that that's important is if you misclassify, your messaging and everything will never be right. The conversations that you have with your customer and everything ⁓ be all over the place as Whereas once you get it right, Nick Chubb: Yeah. Raal: everything becomes easy. The ⁓ &A that you're interested in becomes easy. The new products that you develop become, you know, easy choices. I mean, not easy to necessarily execute, but everything, the way in which the talent that you need becomes simple. The structure and operating model, everything becomes simple. And very often businesses will get kind of, you can tell sometimes they're chomping at the bit and they want to, yeah, but we just want to get this new product out there. Nick Chubb: Yeah, yeah. Raal: And I'll say to them, hang on, let's just go right back. Let's go right back to the very fundamentals of the brand. And they might, it might not be that we're doing a rebrand. It might not be that it's visual branding or anything like that, but conversation and invariably at that point, that's when it starts to get really interesting. And you start to see. And in one case, there was one company I was looking at and working with, they thought their business was about something completely different. disclosing ⁓ but ⁓ Nick Chubb: Have you seen? Have you seen the founder? The Founder is brilliant film and it's about the founding story of the. guy who founded the McDonald's Corporation and he didn't actually found the first restaurant. That was the McDonald's Brothers. It's this guy called Ray Kroc. ⁓ he loved it so much ⁓ they'd done in this one site that he wanted to franchise it across the country. ⁓ so he started doing it, started opening these franchise restaurants, but the quality was really poor ⁓ the business model just wasn't working. I think he was earning, it's like something like half a cent on the dollar that he was taking in franchise fees from all of these restaurants. ⁓ of starting to drown in debt, not covering his costs. And then he meets this finance guy who goes, you're not in the restaurant business, you're in the land business. You need to buy the site, then rent it to the franchisees so that you've got full control over the quality. And then you're effectively just taking a mortgage payment and you get some franchise fees on top. And McDonald's today is one of the largest landowners in the world. They own prime real estate in London, New York, Tokyo, Singapore. They own the land out of the majority of the restaurants they operate from because they had this kind of realization actually. the core business of McDonald's is actually going to be land. It's not running restaurant franchises. Yeah, it's a really, really good watch. It's well worth a couple of hours of your time. Raal: Yeah, Yeah, I can see that. Yeah, that sounds really interesting. The other thing as well is just to say it's kind of involved, it kind of wound into that as well is what do people actually buy from you? I think that's the other, you know, the other thing. If you think they're buying product from you, then you're, you're, you know, and features, you're probably doing it wrong. They're buying it for a purpose, right? They're to be, you know, compliant to Nick Chubb: Right. Raal: to have security, peace of mind, to be able to kind of keep lean margins in their own business. There'll always be, there's always something that's motivating them to do it that's not about the nuts and bolts of your product. And which is why it doesn't really help a lot of the time to go into conversations talking about features and bells and whistles, which is tempting when that's what you've been, you know, wearing your fingers to the bone making. You kind of feel like everyone needs to. Nick Chubb: Yeah. Raal: but they're buying something else and yeah. Nick Chubb: On the subject of entrepreneurship, another story, sort of my other story this week is a new fund that's launched. Mare Liberum Capital Partners, have you heard of them? So they've been around for a while and they did a first fund, but they've now come back to launch their second fund and they're really interesting. Obviously, Raal: No, I haven't actually. Mm-hmm. Nick Chubb: I think, I've never actually done any Latin, but I think mare is sea and liberum is free. They're all about, yeah, okay, good. They're all about enabling the freedom of the seas, which has obviously become very, very timely in the last few weeks, certainly. But they are a ⁓ venture fund. Raal: Yes, that was good. Nick Chubb: that wants to ⁓ target solutions that support free trade. So half of that is what I would call commercial trade. And then half of that is actually kind of maritime defense. So their kind of manifesto kind of opening sentence is, is yeah, exactly. Yeah. They've said stability at sea is the foundation of the modern modern economy. Maritime power shapes global peace and prosperity. Raal: Timing. Timing is everything. Nick Chubb: preserving free and open seas requires sustained investment in capability, resilience and cooperation. And I did a little bit of digging into some of past investments. They're quite interesting actually. Wynwood is one of their previous investments. Regent Craft, I don't know whether you've seen Regent Craft. Have you seen any of their videos? They're really cool. They are developing wing and ground effect vehicles. Raal: Okay. nice. Nick Chubb: Yeah, exactly. So wing and ground ships, which anyone who's been to sea on the deck side will know them from the Colerakes because they have special rules in the Colerakes, despite the fact that they haven't really existed for the last 30, 40 years around the world. But they effectively use something called wing and ground effect to fly very, close to the surface of the sea. And so they can go at speeds of up to 500 miles an hour. They do it about 15, 20 foot off the surface of the sea and they're highly, highly efficient. So you've got the speed of a plane, but with the fuel efficiency of a ship. That's the kind of idea. They were invented and used quite widely through the Soviet Union. And there were some really big experimental Soviet Union wing and ground effect ⁓ vehicles. And then when the Soviet Union collapsed, all the development stopped. This company, Region, have decided they'd to revive that. And they've started working on, initially, passenger vessels that will be able to do a kind of LA to San Francisco run a little bit slower than a commercial plane, but for a much, much cheaper ticket price. And then there's a whole host of kind of defense implications to that as well. Raal: And what kind of, for that sort of ringing ground, one assumes that this is a lot sort of cheaper from a fuel perspective, uses a lot less fuel than that. Yeah. Nick Chubb: Yes, yeah, yeah, you get the kind of fuel. It's not quite the fuel efficiency of a ship, but you sort of get the relative fuel efficiency of a ship. So the amount of energy that has to go into lift. We're venturing well out of my field of expertise here, but the amount of energy that has to go into lift is significantly reduced because of the way the wing interacts with the surface of the ocean. And you're very welcome to comment on actual explanation if you're either from Regent or if you know more about this than me. Raal: Yeah. Come on, come on and tell us. Give us an education live on air. Nick Chubb: no, it's much more fuel efficient than a plane. Raal: So the fund is not just software, this is actually looking at actual vessels as well. Nick Chubb: One of their other investments is a company called Saronic, who are one of the more advanced autonomous surface vessel providers that primarily works in defence. They've actually just been awarded a 392 million dollar... contract by the US government to produce autonomous vessels for the defense market. So they're another very interesting company. they've now closed another fund, and the plan is that this new fund will advance the adoption of advanced technologies across the maritime sector with a focus on digitalization. with the aim of reshaping how vessels operate and how maritime infrastructure is managed. And they seem to have, I don't know a great deal about this specific scheme, but they seem to have match funding up to $150 million from the US government as well. So yeah, really interesting. It'll be really interesting to see what they back in the coming sort of 18 months or so. Raal: But also the other thing that's really interesting for me around that is that that fund, literally the discussion we just had about businesses, really knowing what their core is and what their, you know, a real sense of mission and so on. It's quite unusual, isn't it, for a fund to have what looks like a very kind of clear sort of brand promise. you know, I think probably the only other time I can remember Nick Chubb: Yeah, yeah. Raal: when we had Manish on from Maris Investments and they had a very clear ⁓ vision where they wanted to play and where they were going to add value and so on. But this sort of sounds very, very polished in terms of knowing exactly what they want. That's unusual. But like I said, it gives them a very clear idea of what businesses are of interest and what opportunities and obviously, you know, a good platform on which to connect these things in the market. Nick Chubb: Yeah and I think it is a... a very forward thinking move when you think about whole state geopolitics. The state of the world today, a few people have called out 10, 15 ago. Fewer people actually got themselves into a position where they can make a real impact on that, but I think actually this fund's probably ⁓ of them. ⁓ yeah, I think you're absolutely right. think ⁓ ⁓ concept of freedom of navigation ⁓ building a fund around it that supports both the economic and defense, ⁓ could sort of say, well, ⁓ two very different markets and they are, but it is a kind of singular mission. So yeah, that's a good point. I hadn't really thought about that. ⁓ Raal: interesting because there are clearly a number of big moves to be made and looking at that future. And you mentioned there the people who 10, 15 years ago saw the way the wind was blowing on some of these things. If you look at the geopolitical situation that we're in now, you're honest with yourself, Has that been a huge surprise of what's happened in the last 12 months? The signs have been there for some time. So it's interesting to think about what are the kind of things that could happen, that could fall, that could radically transform and change things? And I saw not in the maritime press, but a maritime story, which I like to share with you. Nick Chubb: Damn. Raal: effectively that you could use the equivalent of an antacid tablet to drop into the sea to deacidify it and to thereby allow it to absorb much more CO2. So back to basics just quickly. the sea absorbs a huge amount of carbon dioxide So think of it as a sponge. It fills up with the CO2 it can't absorb any more and consequently that stays in the atmosphere. If you can rinse the sponge, ⁓ let's say, and it can absorb a lot more And this is exactly, they don't describe it in the terms. They don't mention a sponge, for example. This is all you're getting off all this straight from me. Yeah, they call it ocean alkalinity enhancement. Of course, that sounds much more scientific, doesn't it? Adding alkaline chemicals to seawater to increase the ocean's ability to absorb carbon dioxide, which is kind of what I said. In a recent experiment in the Gulf of Maine, lobster, tasty lobster country, researchers released Nick Chubb: This is a Raoul Harris improvisation. ⁓ Yeah. engine. Raal: about 65,000 liters of sodium hydroxide, caustic soda, into the ocean marked with red dye so they could track how it dispersed. So presumably it doesn't need to be red. So it's basically antacid for the ocean, know, GAVA scone for the ocean. Completely mad, But this is just a test. It's just an experiment. The experiment appears to show, it's a delicate, as I mentioned, lovely tasty lobsters and so on off the coast of Maine, it appears to show absolutely no harm to plant onto fish or to lobster larvae, There was some nerves in there around who is it people like Friends of the Earth saying, you know, this cannot possibly be a be a be a good idea. But in theory, if indeed it does work, and if indeed the trials do show that there's no damage, then it potentially opens up the way for an enormous role for shipping to play in the antacidification of the oceans. Now, As far as anyone watching this will know, what you can put off over the side of a ship is extremely highly regulated, much more so than on land, right? Anything that goes over the side. You've got the oil record book, which reconciles how much oil was taken on board, how much was used. There should be no delta. If there is, the suspicion is that it's gone over the side. You're in big trouble. Garbage all of this stuff highly regulated that you don't put anything in the ocean. The ocean is there to be To be protected from that point of view and this is this would be the opposite way around because of course if this works it would come down to the world's shipping to put that into the seas all over the ocean. Nick Chubb: So what, the shipping industry will have to drop antacid tablets sort of along the way when you're crossing the ocean. I about geoengineering, that's it. Raal: Yeah, yeah, yeah, yeah, it's geoengineering basically, isn't it? ⁓ could get it out. Nick Chubb: I get slightly nervous about these. I've seen quite a lot of these sort of geoengineering concepts. I don't think anyone's really sort of looked at doing them at any scale yet, but it kind of takes you into the realm of unintended consequences. And actually a really interesting case study in unintended consequences is the sulfur cap. Because the industry switched from heavy... fuel oil that was high sulfur to bring in caps on sulfur in 2020. ⁓ oil with a high sulfur content also throws up lot of particulate matter. ⁓ you know, kind of tiny microscopic bits ⁓ solids that go up into the atmosphere. ⁓ actually, it turns out, act as something of a cooling blanket against sun. Raal: Yes. Nick Chubb: When the sulfur cap came into force and ships to either very low sulfur fuel oil ⁓ marine gas oil, the major was the impact on ⁓ human particularly in cities around the world. But ⁓ it was there something like 50,000 premature deaths per year ⁓ because of sulfur in atmosphere from shipping ⁓ that was ⁓ But... ⁓ climate change actually got massively accelerated this particular matter was no longer being put into the atmosphere. And so ⁓ various Raal: Yeah. Nick Chubb: I've seen various scientific papers looking at, can you put a less harmful particulate matter into the atmosphere to help slow down climate change again? But it all feels like if you try and over-engineer it, you may end up causing some other disaster somewhere else. Often, there's sort of no good options. But if antacid in the sea works, then let's go for it. but I think a large merchant vessel carries somewhere in the region of 100 million litres of water is ballast when it's in a ballast condition. So actually 65,000 litres is nothing to a... to a container ship or to a tanker that's in ballast. actually, there's a whole host, this is a discussion for another day, but there's a whole host of unintended consequences that you do get, or at least you did get. when you pick up ballast in one part of the ocean and you take in lots of creepy crawlies and all sorts of things when you pick the ballast up and then you drop it off in another part of the ocean, you end up with invasive species sort of crossing oceans and going and taking over coastal regions and all sorts of stuff, which has been fixed by the Ballast Water Management Convention. But that is a topic that is so dull that there is no way I would ever talk about it on this podcast. So I'm going to shut up. Oh, God, can you? Can you? Raal: Well, actually, I can make it, I can jazz it up for you nicely. Yeah, yeah, the zebra mussel. The zebra mussel, I think it's a New Zealand mussel, the zebra mussel, an innocuous little mussel, dropped in ballast water into the Great Lakes, which it flourished much nicer, much happier there than where it started out in New Zealand. Nick Chubb: big claim. Okay. Right. Yeah, I bet. Raal: I'd be quite happy there as well, I think it sounds lovely. But the one thing that they really love is a little bit of warm water and they got themselves all into cooling ducts of the power stations. So they all kind of gathered and thrived, crusting the whole vents for power stations, causing ⁓ masses of Nick Chubb: Wow. Raal: Not as dull as you think. Nick Chubb: stretching the definition of interesting here. ⁓ Raal: Yeah, yeah, but just on just to come back to it, initial results from the trial local pH increase from from 7.95 to about 8.3, which is roughly pre industrial levels, which is pretty amazing. And around 10 tons of carbon were absorbed during the experiment. So there's something in it with we have to watch this space. We'll see what happens. Nick Chubb: I will. Very cool, very cool. Raal: So I think that's ⁓ it for this week's Undocked. and we'll see you all soon. Nick Chubb: Awesome. Thanks everyone.