Steaming ahead

Created in April 2014 through the merging of Christian F Ahrenkiel Group with a joint venture established by the MPC Group, Ahrenkiel Steamship is a newly formed shipping group that boasts the expertise and history of three integrated organisations – MPC Steamship, Thien & Heyenga and Ahrenkiel Shipmanagement. Operating under the traditional Ahrenkiel banner, the group pools the fleet of the three companies and its focal activities include ship management and ownership of maritime assets, for which each of the companies has decades of maritime experience.

“We are essentially three streams of history merged together under one roof; the name Ahrenkiel was chosen because it is a well regarded and international, while MPC and Thien & Heyenga are more German players. However, in order to also reflect the ‘new coating’ of the structure, we added Steamship because it is the history of the MPC Group, who were the driver throughout the merger. Although we are a brand new organisation we have the long term expertise of all three wholly independent companies, which we aim to combine not only to our benefit, but to the benefit of a challenging and demanding market,” begins Constantin Baack, managing director of Ahrenkiel Steamship GmbH & Co. KG.

“MPC Group began as a trading house in the 19th century, however, in the late 1990s, the group established its own ship management entity to fuel the requirements of the German markets in terms of KG capital. This was the driver for MPC Steamship, which means that quite a number of ships that were financed through capital raised by MPC Capital and the German banks have been subsequently managed by MPC Steamship. Meanwhile, Thien & Heyenga was established in 1977 and has decades of experience in managing vessels, mainly container vessels, but also reefers and Ro-Ro vessels. In the early 2000s the company had a fleet of 40 to 50 vessels under management, while MPC Steamship had approximately 30 vessels under management. Beginning with the economic crisis in 2008 until today all ship management companies lost some ships; it was then that MPC Steamship and Thien & Heyenga began to pool certain activities in order to not only gain some synergies, but also meet tougher market requirements such as increased cost pressure, quality pressure and innovation.”

The commercial activities of Thien & Heyenga and MPC Steamship were put together under the roof of Contchart Hamburg/Leer GmbH & Co KG, a German commercial shipping management entity that was founded by Thien & Heyenga in March 2012. Established with the aim of gaining a stronger market position, Contchart’s goal of boosting its global presence and enhancing efficiency was strengthened further when MPC took a 50 per cent share of the company in October 2012. Subsequently, GB Shipping & Chartering GmbH & Co KG became a new partner of the joint venture in November 2012, with all three partners as equal shareholders.

“In 2012 MPC Steamship and Christian F Ahrenkiel agreed to jointly market their vessels through Contchart; however, by then the Ahrenkiel Group was already in a severe financial situation. A substantial restructuring was required, so we at MPC, along with Thien & Heyenga took part in that process as well as a bidding process that involved up to six parties. In the end we were the successful party because of our restructuring plan for the Ahrenkiel Group and the strategy to consolidate all three entities under one roof, not only on the commercial side, but also the technical management side. This strategic development has thus created a player that overall has in excess of 60 ships under technical management and through Contchart about 120 ships under commercial management. Moreover, this new ship management group is completely free of any contingent liabilities or big debts as a shipping entity; we see this as a unique selling point, particularly in the German market, but also the global market following the economic crisis,” highlights Constantin Baack.

The acquisition of Ahrenkiel Group has not only resulted in the pooling of Ahrenkiel Shipmanagement, MPC Steamship and Thien & Heyenga’s fleets, but also led to creation of a new, financially stable shipping group that ranks among the top 15 managing owners in the global container sector. Furthermore, the merger will integrate long-term shipping experience and leverage economies of scale, which will boost the group’s competitiveness in a challenging market and safeguard jobs in Hamburg.

“The establishment of Ahrenkiel Steamship means we have the opportunity to start with a blank sheet so we can set up a structure that matches the challenging market requirements of today. So far the integration process has progressed beyond expectations,” says Constantin Baack. “For example, we have a large sized fleet that gives us good negotiating powers with suppliers who have supported us as separate entities so far and will navigate through the difficult markets with us in the future by offering competitive prices so we, in turn, can be cost competitive moving forward. In addition to this, we also are specifically focused on asset quality and asset value; since 2008 ship managers have managed their ships with the aim of offering cost savings, but this can really run down a ship in five years.”

One way the group aims to be cost effective is to focus on fuel efficiency through measuring the consumption on board its ships; so far a third of its vessels have onboard measurement fuel systems installed, with the rest being upgraded with enhanced fuel efficiency in 2015. Another way the group aims to strengthen its service is through the implementation of DNV GL’s ShipManager software, which will be installed on its entire fleet of 60 plus vessels. Following an in-depth tendering process, DNV GL’s ShipManager software was selected as it will enable the group to streamline systems and benefit from industry best practice. Moreover, it will enable to company to consolidate its legacy systems with a common, centralised, cutting edge ship management solution that fulfils all technical, procurement, crewing and QHSE requirements.

Moving forward, Ahrenkiel Steamship faces a challenging yet positive future as it establishes a quality focused and cost efficient organisation that meets the changed requirements of a slowly recovering market. “We have more than 80 highly qualified employees ashore and around 1200 crew members at sea, who are all having to follow a new set of rules and procedures; this is something we are working on keenly because this is not just an issue in Germany, but in fact spreads globally to all ships we have under management,” says Constantin Baack. “Overall our growth outlook is very positive – we have already executed new projects and together with investment partners seek to expand our fleet. Further acquisitions are in progress, and we are looking forward to developing further.”

Ahrenkiel Steamship
Asset owner and leading provider of ship management
Established in 2014 from a merger between three shipping firms
Aims to meet specific requirements in challenging market