This post was previously seen in New Orleans City Business.
For all who have been in the industry long enough, its current state is not much of a shock – crude oil prices go up, and they must come down.However, as long as oil is a main energy source, it’s safe to bet the prices will eventually go up again. In fact, the U.S. Energy Information Administration reports that while U.S. crude oil production fell 140,000 barrels per day between July and August 2015, demand has risen to 19.52 million barrels per day. Moreover, the last two months of the summer saw demand jump above 20 million barrels per day for the first time in years.
As someone with over 40 years’ experience in industry, the key to success is not about the high price of crude oil – it’s about strategic planning for the future through ensuring efficiencies, increasing safety and cultivating a unique company culture. This will guarantee that when the pendulum swings again, you are indeed set up for success to reach goals you may not have even thought possible. Below are a few trends and tips that you can capitalize on in 2016 that will set you up for decades of sustainability and increased profits.
- Upgrade your equipment
New technologies are launched daily that can increase efficiencies and save you millions – so the investment is worth it and the ROI happens quickly. For example, the introduction of the azimuthing-stern-drive system (Z-drives) to the towboat industry has allowed new design elements into towboat construction, an area that has been static for over 50 years. According to Professional Mariner, Z-drives provide a 360° directional option and are more efficient than a traditional rudder configuration because they focus all of the engine’s force toward pushing the boat in the direction the pilot wants. Ultimately, this improves speed and maneuverability, which significantly reduces fuel costs.
- Comply with new and improved safety regulations
The oil and gas industry suffers from 110 deaths per year (higher than any other industry in the U.S.), while the maritime freight industry’s death toll is much lower at eight per year, but it’s still a number we would all like to zero out. Recently, the U.S. Coast Guard introduced 46 CFR Subchapter “M”, created to establish safety regulations governing the inspection, standards, and safety management systems of towing vessels. Once the impact of the regulations are fully known and implemented (whispers are that it will begin in February of this year with a phased-release), they could cause earlier retirement for some towboats. It’s my belief that safety and compliance should never stop at minimum regulations. We all want to keep our employees and the waterways where they live and work safe. Utilizing this mindset ensures you are investing in both the future of your company as well as your personnel.
- Create a unique and satisfying company culture
No, the results of developing a strong company culture will not appear in your annual profit reports, but they are key to obtaining those profits. Why? Because your employees are the ones who keep the lights on – without them, there would be no company. Not to mention, a lower turnover rate equals a better bottom line. Remember, a happy crew is a productive crew. Enhancing employee work environments and initiating company celebrations are just a couple ways this can be accomplished.
- Strategically increase your manpower
The evolution of our industry as a whole has been slow to say the least, and we’ve been quite comfortable with that. However, over the past couple of years, innovations to make our industry safer, more secure and more efficient have developed. It’s very important to keep a temperature check on the latest trends to ensure you are set up for the next “big thing.” For example, tank barge fleets have grown significantly since 2010, even though the requirements grew stricter. So perhaps it would be in a maritime transportation company’s interest to consider strategically investing in this part of the business to position the company for success once the proverbial pendulum swings back up again.
Bottom line is this: 2016 will, without uncertainty, be a year of ups and downs and shakeups. But we can’t sit on the sidelines and wait – being proactive by running your business as efficiently and effectively as possible, and continuing to nurture and motivate your employees, are a few business strategies that will never go out of style.