The shipping industry's crew travel budgets are facing significant structural inefficiencies, leading to unmanaged costs that are not reflected in financial reports. Niklas Weidmann, managing director of Tilla, highlights these issues in a recent article for Splash247.
Structural Issues in Crew Travel
Crew travel costs are typically the second-largest expense after salaries in crewing budgets. However, the process of managing these costs is flawed. When vessel schedules change, the competitive process for booking flights often disappears, leading to higher expenses. Weidmann points out that flight prices fluctuate continuously, and without a system to monitor these changes, operators miss opportunities to reduce costs.
Accountability Without Control
Crew operators are responsible for managing the entire process of crew changes, yet they lack the tools to control the inputs. This results in accountability without leverage, as operators depend on various external entities like travel agencies and port agents. These agencies are incentivized to complete bookings quickly rather than cost-effectively, further exacerbating the issue.
Organizational Blind Spots
At an organizational level, there is a lack of visibility into how decisions are made across different offices. This learning gap prevents consistent application of cost-saving strategies and hinders the ability to replicate successful practices. Weidmann argues that the industry must treat crew change as a comprehensive operation involving planning, execution, and reconciliation to address these challenges.
Recommended Actions for Shippers
To mitigate these issues, shippers and logistics managers should:
- Implement systems to monitor flight price fluctuations and re-tender bookings competitively.
- Enhance visibility into decision-making processes across all offices.
- Treat crew change as a holistic operation rather than a simple travel procurement function.
Watch List
- Geopolitical disruptions and compliance requirements could further complicate crew travel logistics.
- Multi-office crewing structures may require more robust coordination mechanisms.
- Technological advancements in travel management systems could offer new solutions to these structural issues.
Sources:
