Selling to the Marine Industry

By Diane M. Calabrese / Published May 2016

 

Coastlines vary dramatically. Sandy beaches and natural harbors captivate us, and so do stretches of boulders and steep cliffs. A coastline contributes to the economic well-being of a nation. The more miles of coastline that are amenable to recreation and commerce, the bigger the economic boost to a nation.

The 95,471 miles of U.S. shoreline, as measured by the National Oceanic and Atmospheric Administration (NOAA), include shoreline areas of all states, U.S. territories, and possessions. (Whichever way coastline is measured—and there are many intricacies such as general coastline or tidal coastline—the great extent of coastline contributes to the vigor of our nation.)

Technically, marine coastline is just the shoreline that meets an ocean, or saltwater, and therefore is only about 93 percent of the total shoreline. It’s a large expanse with equally large possibilities for distributors, manufacturers, and contractors.

Cargo vessels, cruise ships, and recreational boats are among those coming and going at ports. According to a report, America’s Maritime Industry, which was completed at the beginning of this decade, the industry accounts for $100 billion in economic activity. (See www.seapowermagazine.org/pdf_files/americas-maritime-industry.pdf.)

Moreover, legislation has been designed to ensure that a fair portion of the economic activity encompasses U.S. companies and their employees. The Jones Act is one example. It aims to keep U.S.-owned carriers and U.S.-built vessels moving cargo between contiguous U.S. ports. Other laws give preference to U.S. carriers when government cargo is being moved.

Selling to the marine industry makes a great deal of business sense. Much money circulates and there are many places to gain an entry. Of course, the marine industry is as unique a niche as it is a large opportunity. For those who are not selling to the marine industry yet, Roy Pennington, the owner of Hi Pressure Cleaning Systems Inc. in Houma, LA, shares some of his extensive knowledge about the sector.

Time and Talk

“The limited amount of time to make a sale” in the marine industry makes it unique, says Pennington. “In years past, when Greyhound bus lines ran ‘next bus out service,’ we frequently delivered a unit to the bus terminal so that it could get 300 miles away to another port as soon as possible.”

It’s quite different now, explains Pennington. Time in port is restricted, cut to what’s absolutely necessary. The reason: the operator is trying to maximize profit. “When a boat is in port, it is the only time they have to take on materials and supplies,” says Pennington. “And in-port time is expensive. If that vessel is not moving cargo, someone is not making any money.”

Being able to match the quick turnaround required by vessel operators is a must. “When the need was critical, we have even had to charge the customer for our company truck to deliver a unit from New Orleans to the Houston port overnight,” says Pennington.

Time is not the only challenge. A seller must also be willing to help a buyer flesh out the specifications on a purchase. “Communications are a major issue,” says Pennington. “We are often dealing with a ship chandler or buyer who is looking at a catalogue torn out of ‘somewhere’ and has been faxed to him to have us quote.”

The ship chandler often has called without first having a conversation with the technical expert onboard. “He has no idea what he is asking for a quote on and does not know what questions to ask the engineer on the boat,” says Pennington. “Invariably, the dimensions are in metric, bars, and various non-standard U.S. voltages. For instance, 400 volts, 50 hertz are frequent requests.”

Part of the required communication is being able to query the chandler so the chandler can query the engineer. The give and take takes time and patience. Yet the entire process is still going along at a brisk pace, one that will meet the needs of the buyer to get what’s needed and get moving.

Ebb and Flow

There are many positive dimensions in selling to the marine industry. One is the short interval it takes to complete a sale when sales are there to be made. At other times, though, there are doldrums, a definite downside.

“Marine sales to international carriers can be frequently ‘free money sales,’ as most of the time the customer comes to you,” says Pennington. “That said, normal profit margins generally are not applicable, plus inventory turns swing like a pendulum… sometimes at rest.”

To be prepared for a strong flow of business, a distributor must also be ready to meet a request without delay. “You have to keep 15 to 20 cold-water units in stock, ranging in voltages of 230 volts, 230-volt three-phase, and 480 volts,” says Pennington.

“You cannot sell from an empty truck is the applicable watchword for this type of sale,” says Pennington. A waiting period for the buyer is not an option. “When you tell the purchasing agent, ‘delivery three to five days,’ it will not work. The ship is long gone, en route to another port by that time.”

There’s much to like about being immersed in selling to the marine industry. “The somewhat immediate gratification of making a sale, especially when you are dealing with a ship chandler,” is high on the list, says Pennington. “There is simply no discussion involving pricing, nor delivery dates. If you have it in stock and they need it, pretty frequently it’s a done deal.”

A degree of caution is needed, too. Not all equipment that leaves a distributorship will simply sail away. “Be prepared for some equipment to ‘be returned’ because, due to various logistical issues, it could not get from dock to the vessel before sailing time,” says Pennington. That’s not surprising because of the steps involved.

“Frequently, supplies, groceries, and perishables must be transferred via a small charter vessel to reach a ship anchored in the river,” says Pennington. “Not all vessels come to the dock. Some unload and load from bulk barges mid-river to their bulk cargo tanks.”

To be sure, not having equipment taken to sea is a disappointment on the books. But it’s better than having the equipment sail away and the payment not come in. “Investigate your buying agency or ship chandler, as it is impossible to repossess a machine that has left the port,” says Pennington.

Contractors Too

It’s not just distributors and manufacturers that sell to the maritime industry. Contractors anchored in coastal regions can extend their repertoire by cleaning recreational boats and commercial vessels.

For contractors that do residential cleaning, the addition of recreational boats makes a great deal of sense as an ancillary, especially when an owner takes the boat out of the water and stores it at home during winter months. Offering commercial cleaning services for maritime vessels requires more planning and equipment.

Contractors that want to get involved in selling services to the marine industry should think in the broadest possible terms about what services they currently offer that might easily transfer. Not only do boat hulls require cleaning, but boats being readied for recoating require surface preparation.

In addition to the boat itself, there are the ancillaries, which include dry docks, cranes, travel lifts, and heavy equipment in a boatyard. A contractor thinking about selling services to the maritime industry can spend some time around a harbor or a marina and use it to brainstorm.

Small contractors may get a foothold in the industry by starting with cleaning a privately-owned boat perhaps of a client whose house or deck is regularly cleaned. Then, use a referral to gain other clients.

Another good way to get to know the civilian side of the maritime industry is to attend boat shows of which there are many in both sea and inland coastal communities. Also, look at some of the online promotion done by groups such as the National Marine Manufacturers Association (NMMA, www.nmma.org) to begin learning about the industry.

Yacht, sailboat, and speedboat owners will want to be assured that the contractor understands the construction of their vessels and the exacting attention that it requires. If a boat has a wooden hull, know the type of wood and the recommended care, and so on. Washing a boat requires just as much attention to detail as does washing a house.

Bids are the path to commercial and military cleaning jobs. To submit a bid, a contractor will have to have all needed certifications, such as working in confined spaces, in hand.

A contractor should always think in terms of gathering certifications that will allow expansion—whether it’s in the marine industry or another sector. Just take it one certification at a time, building the foundation for a bigger business.

Finally, remember that there are inland coasts along with inland vessels that present possibilities for sales everywhere. Michigan has more shoreline than any other state except Alaska. Then there are the pleasure craft on inland waters, such as Utah’s Great Salt Lake and the many state lakes in Kansas, two land-locked states.