Svitzer Steadily Builds a Maritime Behemoth

Operating one of the world’s largest marine fleets of any kind, it is Svitzer’s local footprint that speaks volumes for its diverse and far-flung workforce and assets. Strengthened by a multi-national team, providing value in more than three dozen countries, Svitzer stands out every day.  

On 30 April 2024, Svitzer was listed on Nasdaq Copenhagen (SVITZR) as a result of the previously announced separation from its former parent company, A.P. Møller - Mærsk A/S. Danish national Kasper Karlsen has been Global Chief Operating Officer of the Svitzer Group since December 2022. Prior to that, Karlsen held various senior leadership positions within Operations, performance improvement and business transformation while employed by Maersk Drilling dating back to 2007. He holds a Master of Science in Naval Architecture and Marine Engineering from Technical University of Denmark and has completed management and leadership programs at IMD Business School, the Massachusetts Institute of Technology – Sloan School of Management and DTU Executive School of Business.

Mr. Karlsen leverages all of those professional assets and experience, every day, as COO of the world’s largest and most diverse workboat operator. In late February, he sat down with MarineNews to provide a state-of-the company report, and a candid glimpse of what’s coming next.

Founded in 1833 as a salvage company, Svitzer has over time gone into harbor towage and then, just as deliberately, they exited the pure salvage business. “Today,” Karlsen says, “we focus on the core, which is harbor towage and terminal towage. Salvage is unpredictable. Waiting for the next disaster is not a business model that suits us.”

The Svitzer global footprint is varied, and deep. Nevertheless, Kasper Karlsen insists that all its different moving parts is the real strength of the firm. “It is definitely a challenge. We operate in many countries with many nationalities, many cultures. We hire local crew as much as at all possible.” He adds, “We also train local crew as much as possible and obviously that poses challenging challenges in actually making sure that the service delivered to our customers will remain at a consistently good level.” To do that, he says, means organizing Svitzer’s global operations to four regions.

“We cover the entire globe,” he says, continuing, “We are on all six continents and our corporate culture is very much about giving empowerment to the regions, but actually all the way up to the vessels because we believe that actually when it comes to towage and keeping each other safe and delivering to our customers, our people on the tugs are actually the experts. We also want to make sure that we can say that we have a ‘Svitzer DNA’ throughout the organization. That's where my function comes into the picture, being responsible for our safety culture and systems.” This entails having a Svitzer standard on safety and training, that then allows local leaders to always use that as a measuring stick.

All of that, says Karlsen is obviously important from a safety and procedural point of view, but, he admits, “We also use our global footprint in many other ways. It's an advantage to have a scale like we have and examples of where we use that is when it comes to engagement with key vendors – particularly for new buildings.” When it comes to the shipyards, engine and thruster OEM’s, the tug designers, the world's largest towage company can use that leverage to impact quality and the pricing of newbuild tugs. That advantage also extends to after-sales service, especially when something goes wrong on the maintenance side.

“We have looked at different future fuel solutions and also electrification. We've deselected ammonia, because of toxicity. We have deselected hydrogen for now, because of space constraints. Methanol, we have looked closer into and, yes, we are building a dual-fuel methanol tug, as we speak. “It'll actually not be a fuel cell because we, for now, deselect the fuel cell technology and went into batteries instead. So, it'd be a battery, dual-fuel methanol tug.” – Svitzer’s COO, Kasper Karlsen Image © Svitzer

Svitzer took delivery of 11 vessels in 2024, and 23 in the year prior, with 13 more in the pipeline for 2025 and 2026. There is a definite pattern for these newbuildings. Kasper explains, 

“We're building for the markets we're in. As an example, Brazil, because of the tax machine there, we build tugs for Brazil in Brazil; for Europe, the Middle East, Asia, we build a lot in Turkey. We are working closely with top tier yards in Turkey, but we also have a pipeline in China with a top tier yard there. Historically we build in other locations also, but those are the main locations we build in right now.”

That global reach and market leverage is especially important today, as operating margins are constantly being pressured. “Labor costs are up; inflation levels fluctuate, and the geopolitical climate is changing. So, there is always a price pressure and a cost focus that we need to take into account and, obviously, as the largest, we are trying to use that advantage to the best of our ability.”

Beyond that, Svitzer creates partnerships and works closely with the yards, equipment manufacturers and the tug designers. This Karlsen says, is an effort to lead and “move” barriers of the industry. He adds, “We have embarked on a proprietary tug design, the TRAnsverse tug, that we believe is a big innovative leap in the tug industry actually going forward.”

The Svitzer Taurus, part of the TRAnsverse Tug series, represents a groundbreaking leap in tugboat design, setting new standards for manoeuvrability, fuel efficiency, and operational safety. Image © SvitzerDecarbonization: Svitzer’s Deliberate, and Ambitious Plan

Today, the elusive goal of the “net-zero, decarbonized” Promised Land dominates the waterfront. When it comes to this moving target, Svitzer is anything but tone deaf. The first methanol hybrid fuel cell tugboat recently made news, and Svitzer was at the heart of that project. At the same time, Svitzer’s corporate efforts to “green” the planet are anything but new.  

“First of all, we have already five years ago defined our decarbonization strategy and targets. We are aiming to reduce our direct emissions by 50% in 2030, compared to 2020 levels, so we're halfway there and did actually achieve reductions of 24% in 2023. We are also aiming at becoming carbon-neutral in 2040. That's quite an ambitious target that we’ve set for ourselves, especially considering that we have 450+ vessels, many of which will actually keep operating throughout until 2040 and beyond.”

How Svitzer approaches this challenge is telling. “We have looked at different future fuel solutions and also electrification. We've deselected ammonia, because of toxicity. We have deselected hydrogen for now, because of space constraints. Methanol, we have looked closer into and, yes, we are building a battery hybrid dual-fuel methanol tug, as we speak,” explains Karlsen, adding, “It'll actually not be fitted with a fuel cell as first announced because we, for now, deselect the fuel cell technology as we did not find it mature enough for our desired application.”

Karlsen also points to the rapid development and evolution within the electrification area, but, with caveats. “It is becoming more and more evident that that electrification is a part of the end solution; not everywhere, but it will be a solution that is applicable many places and most places in the longer term. We started with the first battery hybrid tugs actually more than 10 years ago in Australia with small batteries. So, we have extensive experience with those. We just recently bought another battery hybrid tug that will be delivered this summer and then we have the next one which is the one with the dual-fuel methanol engines also. So, we are definitely embarking on the electrification journey and we are convinced that that's the part of the end game.”

Karlsen admits, “It is very challenging. I would be lying if I said that it was easy getting our customers and their customers to pay a premium for green towage. But I'm also confident that we can move the needle further. Obviously, there are areas in our operations where it's less mature and in other areas where it's more mature. But just by the mere fact that we have around 450 vessels where many will be operating way beyond the target deadlines that we set, we will rely heavily on drop-in fuels to reach those targets and we rely heavily on finding commercial solutions to fund this, bearing in mind that green towage will assist our customers in decreasing their emissions in their value chain – their scope 3 emissions. We are also welcoming the right regulations helping the transition on the way.”