The career opportunities for MBAs in shipping may be a little unorthodox, but they are as rewarding and challenging as any other industry, say MBAs from leading business schools in the UK.
….You just have handle being anchored at sea for up to 25 days at a time, stagnant and (I imagine) quite bored. And occasionally fight off Somali pirates, says MBA student Kiran Benny.
When it comes to the shipping industry, there are few better placed to comment. He began his career at sea at the age of 18 and, now well into the full-time program at Henley Business School, put his nine-year career as a Captain on hold.
Part of his motivation was to improve the way the industry operates. Kiran wasn’t always stuck in the ocean for days on end, but he recalls it with a degree of pain.
He was, in all senses of the phrase, a Captain prepared to go down with his ship. And they were sinking, in a financial sense, fast.
"We were losing about 30K a day – at a conservative estimate,” says Kiran, as he steps out of class at Henley’s Reading campus. “Someone was losing a hell of a lot of money, efficiencies and profit.”
Part of the problem was a lack of storage space at port, a common problem in the shipping industry. “There is a lot of cargo, and a limited docking and storage facility, so the ship had to wait until they were empty. And this can take over 20 days.”
Did that not make your job difficult? “Oh yes, quite difficult,” he says. “The industry is a mix between a perfect example of a dynamic movement of business operations, versus the ‘big money’: people who are chartering these ships.
“The people who are planning these routes and sailing ships have got to get their forecasts and planning right, or a company will end up in trouble pretty quickly.”
Of course not all MBAs in shipping are quite as senior as Kiran. What attracts business school grads to the industry are the wide array of career options, says Nitin Tyagi, a graduate of Lancaster University Management School.
“In the ship-construction segment, one can look for project management, engineering management or operation management opportunities,” he says. “In the shipping-segment, there are asset management or technical management roles available.”
Although these require previous experience, he adds. “But if you do not have industry-specific experience, there are other opportunities such as shipping finance, business development, and marketing or account management roles,” says Nitin.
Both he and Kiran already have a great deal of experience in the industry, however; Nitin of five years and Kiran quite a bit more. MBAs crave international exposure, but how many can boast of working in more than 80 different countries?
“Sailing takes you to different countries, you learn about new cultures and working patterns. I’ve been to 84 countries so far,” says Kiran. I have no doubt that number will continue creep upwards.
Although many argue the shipping boom came to a steady halt in 2008, due to years of overcapacity that have depressed freight rates, a recovery appears to be underway. According to Barclays Research, the global dry bulk seaborne trade is forecast to grow 5.8 per cent this year to 4.37 billion tons.
Tanker rates will also rise as fleet growth is slowing, while strategic oil reserve projects in China and India should boost already solid Asian demand. "While there will be potholes, here and there, as always, the worst is over based on the market fundamentals," said Ong Choo Kiat, president of U-Ming Marine Transport, one of Taiwan's largest listed shipping companies, in a press release this month.
Some of you may not have much of a clue as to how this impacts the average MBA student. But the shipping industry can provide a reliable indicator of economic instability. After all, it provides 90 per cent of world trade.
For such a huge industry, it is hard to believe it receives such as small amount of attention. As Rose George, author of Ninety Percent of Everything, one of the most celebrated books on shipping, points out, the industry has quadrupled in size since 1970 and we are “more dependent on it now than ever”.
And, as group of Harvard Business School students pointed out in a “best business model of the year”, the industry is one of the last bastions of modern-day piracy in the world; as is the wealth to be had on cargo ships.
Kiran shows me a document entitled “GUIDELINES FOR ACTIONS TO BE TAKEN INCASE OF AN ATTACK”. There are extensive plans on what to do if attacked by pirates, most of which I make little sense of.
In May 2012, he was the Master of a VLCC that was crossing the Indian Ocean. He completed a safety training drill in the evening and at 5AM the next morning, their ship was set upon by Somali pirates.
According to the World Shipping Council, in 2011 there were 439 pirate attacks. Kiran’s ship narrowly avoided capture that day. “Not many people will have met a person who was actually chased by Somali pirates. We carried out response drills and eventually came out successful and avoided capture,” Kiran says.
For those undeterred and brave enough to climb aboard, an MBA will give you a significant advantage, says Nitin. “I know I have a competitive advantage because of the skills I gained at Lancaster. The MBA has helped me grow,” he says.
He was employed at the American Bureau of Shipping within months of graduating. He provides services to the shipping and offshore oil and gas industry, and has even been groomed into a consultancy role. “Within six months, management entrusted me with more responsibilities to manage prospective clients,” he explains. “Now, I am managing engineering projects and providing technical consulting to new clients.”
Kiran is more diplomatic. He says an MBA is more useful when backed-up by an MSc in shipping management (or similar degree). He moved from India to the UK to begin an MBA in-part because he saw a “lack of long-term forecasting” in the industry. “I want to be able to contribute to new ideas in making profitability more efficient – tying together the concept of sustainability,” he adds.
For Kiran, an MBA is already paying dividends. You certainly can teach an old dog new tricks. “Already, the level of exposure from the MBA is coming together with my practical experience,” he says.
“I can connect everything about shipping to our operations management module, and my understanding of marketing, finance and international business and strategy has vastly improved.”
It may be dangerous at times, but it is one of the most interesting industries out there. MBAs can enter many of the traditional functions – in a strange, off-shore place.
With global demand still significant, and shipping able to turn the economic tide, there has never been a better time to climb aboard.