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A shipowner’s experiences with PSS
12/12-2013
Allan H Rasmussen

2. TORM’s share price development over the past three years…
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Copyright © 2013 Dagbladet Børsen A/S

3. “Karo ya Maro”
3Mahatma Gandhi

4. The restructuring agreement with banks and T/C-in partners concludes
TORM’s comprehensive finance solution
4
Deferral of debts
Extension of maturities until 31 December
2016
New capital
USD 100m in working capital over two
years
Newbuilding program
Elimination of newbuilding program
completed
Internal cost and cash initiatives
Implementation of cost and cash initiatives with a cumulative effect of at least USD100m
over three years
Realigning time charter portfolio
T/C-rates adjusted to market level
or contracts terminated
Compre-
hensive
finance
solution
for TORM
 
 


5. One TORM
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6. When looking at the past year only…
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Copyright © 2013 Dagbladet Børsen A/S

7. 7
FBB
VSAT

8. The VSAT/FBB story – the past
• TORM was first mover on implementing internet on board vessels
• Lack of demand and competition on the market
• Limited technical solutions available (high cost due to low demand)
• Main purpose: Seafarer welfare
• Initiative sponsored by TORM foundation
• Buying and owning the equipment
• No strategy as such was stipulated
• A long term binding contract with customer penalty was entered
• No SLA (Service Level Agreement)
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9. The VSAT/FBB story – the future
• Lease agreement on all equipment
• VSAT + FBB combo unit
• Monthly service charge/flat fee agreement
• 99,5% guaranteed uptime with penalty clause
• Future proofed solution by hardware upgrades included
• Market price benchmark agreement
• Cost volatility reduced significantly
• Depreciation over three years, if TORM wants to opt out of contract
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10. Average communication costs for the TORM fleet – actual vs budget
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11. An exploration of the customer’s perspective of
product/service-systems – the case of TORM
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Source: Master Thesis 2013 by Lars B Jørgensen & Christian H P Johannesen

12. PSS from the customer’s perspective – can TORM use PSS and how?
1. Yes, TORM can use the tools to determine which of the PSS
concepts defined will be the ”best fit” – and use this as reference for
discussions/negotiations with vendors
2. TORM might have some strategic considerations restricting the use of
some PSS concepts
3. TORM is taking a TCO perspective, or even ”total life cycle cost” and
needs to have all deliverables as measureable KPI’s
4. We encourage close partnerships and relations as long as we can
quantify ”added value”
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13. Learnings being investigated and implemented
• Lubricating oil
– Now partnership with only one supplier world wide
• Main engine spare parts
– Partnering up with MAN Diesel for genuine parts
• Navigation equipment
– Intensive negotiations with various vendors
– No world wide vendor covering all equipment
• Safety equipment
– World wide agreement on life raft servicing
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14. Cooperation between TORM and DTU Mechanical Engineering
Until now:
• Professor Tim C. McAloone
• Ph.d. Researcher Jakob Axel Bejbro Andersen
• Two students doing their master project in TORM Technical Division
– Lars Jørgensen & Christian Johannesen
Starting soon:
• 2 x PhD for three years
• Partly founded by the TORM foundation and partly by DTU
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15. PhD research focus areas
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