Friday, August 8, 2008

Seabourn Brings Technical and Marine Operations In House...What's With V.Ships?

In 2006 Seabourn contracted with V.Ships to operate its technical and marine operations on its three ships. This created a good bit of upset with the non-hotel crew and officers and, quite frankly, puzzled me. Well, obviously Seabourn was not happy with the V.Ship operations and/or costs. (Neither was Prestige Cruise Holdings re: Oceania and Regent who will take back its operations when its contract with V.Ships expires in November.)

Seabourn has finished the process of receiving the regulatory approvals to move the operations in house. While, as with Prestige Cruise Holdings, the politic thing to state is that with a larger stable of ships (three on the way) the efficiencies make in house the way to go, Larry Rapp, Vice President of Fleet Operations, made a couple of comments that - at least to me - make it clear that V.Ship was not going a good enough job either in communications or performance.

He stated that this significant change will result in closer oversight of the maintenance and safety. ‘That is not to imply that there were any shortcomings in the past... However, we are expected to comply in detail not only to all relevant statutory requirements, but also to Carnival standards as well. Having our operation in house makes achieving that standard far more efficient.’ Mr. Rapp also commented that was a desire for direct control of marine and technical matters.

Those comments indicates to me that there were probably some "discussions" by Seabourn about certain things not being good enough and V.Ship asserting it complied with the required statutory standards so it was "good enough". I have no information that was, in fact, the case; it just seems to me to be the obvious conclusion...especially when the relationship ended so quickly.

Reading further between the lines, it seems to me that V.Ship took on huge responsibilities and, as short term profit was its motivation, it utilized its contracted for control over the technical and operational matters in order to create an immediate profit center for itself (hence the application of the minimum standards required) rather than a long term relationship based upon exceeding those minimum performance standards (coupled with excellent communication) that ultimately would have grown its operations...and therefore its long term profits.

I also think it is interesting that V.Ship personnel have migrated to both Seabourn and PCH. This makes me believe V.Ship had the talent pool and that the conflicts arose on the financial side of things.

One other interesting point: As Seabourn and PCH literally are "jumping V.Ships" (sorry!), Silversea is on the gangway about to sign up with V.Ship not only for its technical and marine operations, but for V.Ships to oversea its new build operations; migrating some of its staff over to V.Ship. Interesting.