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Shipper's Consultancy Mindset a Plus

Pavel Hernández - OH Maritime
Director General

STORY INLINE POST

Wed, 01/18/2017 - 09:22

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Q: What sets OH Maritime apart from other port agents and what problems does it solve for its clients?

A: One problem with working with port agencies is that they do not share any risk with the company venturing on a new project. OH Maritime, on the other hand, takes legal control of the vessels, chartering them from suppliers or parent companies. After obtaining nationalization and authorization from the different entities, we either sublet those vessels to their Mexican operators or operate them directly, ensuring that a local who is well known in the market interacts with the new players.

Immigration could be a potential issue for some clients. If a crew member is detained by immigration, an agent would usually report this information and then a hired lawyer takes over. The agents don’t get involved. Because OH Maritime is the legal tenant of the vessels, we are also the legal representatives, so we deal with the authorities directly and immediately on any legal situation that may arise.

Q: What does OH Maritime do to mitigate the risks it takes on from its clients?

A: It is correct that OH Maritime takes on a lot of our clients’ risks. To mitigate these we have a varied team specializing in different disciplines to assess projects from the very beginning to determine the financial, tax and legal exposure in advance. We then endeavor to explain these to the client and assure them that OH Maritime will deal with all aspects. They do not need to hire separate sets of lawyers to tackle each. We also help with authorizations from the Ministry of Energy, CRE and ASEA. The set of requirements we deal with is increasing so we must broaden our expertise to match this. The ideal situation is for our clients to see OH Maritime as one point of contact for their Mexican operations and a reliable, local partner that is available at any time of the day.

Q: What are the details of your new venture, Maritime Fuel Supply?

A: Maritime Fuel Supply is a venture that OH Maritime started in 2016. As the offshore industry was slowing down, we decided to launch a joint venture with three partners. 

One is a distributor for PEMEX in the northeast covering Tamaulipas, Nuevo Leon and Coahuila. That partner is primarily an inland distributor but it wanted to launch a maritime operation. Because it lacked experience, OH Maritime offered know-how in operating a vessel and settled the purchase for a vessel. Now we are joint ship owners of a tanker selling fuel in Manzanillo. Our original plan was to be in the Gulf of Mexico but we changed our strategy due to the market’s slowdown and moved to the Pacific. We began operations there in May 2016, so we are the new kids on the block selling bunker fuel to vessels coming to Mexico.

Q: Will OH Maritime eventually expand Maritime Fuel Supply to the Gulf of Mexico?

A: The name of our jointly owned vessel is Lobos Tuxpan, since that is its original home port. In fact, the vessels currently carrying out seismic studies in the Perdido area source their fuel from Tampico or Tuxpan, so we wanted to use that as the core business for this company. Due to the two-year delay of the deepwater projects there, we decided to start selling fuel to regular container vessels instead. We definitely want to expand to the Gulf in the future. We have many connections there and a good idea of how the Port of Matamoros will look. This port may take up to 10 years to fully develop but once it does, it will have all the capabilities needed for home services like ours.

Q: What are the main priorities for OH Maritime?

A: Our core objective is to launch new projects and diversify our business. At the moment, we are dependent on one client. We started with CGG but it subsequently entered a joint venture with Fugro called Seabed. We were its main providers, covering vessel chartering and obtaining navigation permits. At OH Maritime we know that the arrival of new players is imminent and we want to make sure they know about us.

We are starting to review a project in Tamaulipas where I want to introduce our clients to the services we can offer them. There are few private terminals and OH Maritime is one of the few companies in Mexico with the relevant experience. Some companies may simply think that if they have storage facilities in Houston, they can replicate them easily south of the border but they often forget the issues in doing so. Problems with language barriers, cultural distinctions and other factors come in to play, and this is where OH Maritime can step in as a local partner. 

Q: What other challenges do new players face as the market opens up in Mexico?

A: A problem companies face in Mexico is that the deadlines of the different rounds are not fixed and this is often difficult for them to comprehend. PEMEX has a monolithic mindset and wants to keep the fields it feels are in the nation’s best interest. Most fields chosen by PEMEX were the most promising. 

One thing OH Maritime has learned from directors of large companies is that they are not able to open their budgets to the Mexican market yet because of political uncertainty surrounding the next general election in 2018. Large companies like Shell and BP have already suffered in countries like Venezuela, where legal problems arose as the country opened its market. They need to be assured that Mexico’s Energy Reform is well-planned and offers stability. In any case, for those players who have good faith in the Mexican market as it is now, many opportunities will arise when the government changes.

Q: What is the profile of your perfect client?

A: The profile of our ideal client is any company with complex logistics that require a small fleet of vessels. There are a couple of submarine pipeline projects planned that will require dredging vessels, rock laying vessels and supply vessels. There are very few companies with the knowledge to provide these complex logistics, and most are agents.

The difference between a traditional agency and OH Maritime is our focus on the overall result of the project. Port agencies know the drill, but fail to see the big picture and the reasons why it may be better financially or logistically to take certain actions instead of others. Agents base their activity on commands and fixed principles, with which they always comply. Our mindset is different, resembling that of a consultancy. Most of the new players entering the market here are not familiar with Mexican ways. They have the layout of their project and its timeline but most often it is unrealistic, which translates into expensive. OH Maritime helps them to narrow their scope and set the right goals so they can achieve the overall objective of their project, which is always doing the best job at the lowest price possible.

Q: Why should clients trust OH Maritime?

A: Clients can rest assured that OH Maritime is trustworthy. We have international instruments spanning bonds, contracts and insurance agreements covering all the risks that can be managed. OH Maritime offers companies a safety net. It is not a safety net simply made up of words and goodwill but of experts and professionals offering clients the results they need.

Q: A key factor to OH Maritime’s success is diversification. What is your strategy to reach out to new companies?

A: We have not been overly aggressive with our marketing to reach out to new players due to our focus on launching Maritime Fuel Supply. The next part of our project will be to visit potential clients directly. One of the keys that led to our success in winning the CGG contract was that we visited the company directly. CGG was surprised because after 10 years operating in Mexico it was the first time a provider had visited its offices to thank them and review the project. This was a game changer for them. On our part, it was a bold move that paid off. We have started using this strategy with Maritime Fuel Supply too. It is extremely useful as many companies that have been spending millions of dollars on fuel in Mexico for 30 or 40 years have never been visited by their providers before.

Q: What would your ideal 2017 look like?

A: We would like to get involved in pipeline projects. When OH Maritime enters into a project our clients are usually already at an advanced stage of planning. Looking at the Texas to Tuxpan pipeline project, we know that we are in a good position to offer our services there. There is also another pipeline project planned, going from Topolobampo in Sinaloa to La Paz in Baja California Sur.

For OH Maritime it is an optimal moment to start interacting with new companies and letting them know about our different approach. Consortiums are going to become more and more prevalent, so companies that source their services locally will have to face at least 10 or 12 different service providers for smooth logistics. It would be beneficial to narrow that to one or two suppliers. OH Maritime is also focused on reducing costs. The profits in this type of market are often low so companies are keen on cutting costs. We can help them do this.

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