Refocus on: Controlling the cost of crew travel
Crew travel has always been an area of significant spend for most marine and energy organisations, but the pandemic has only served to exacerbate this.
Refocus on: Controlling the cost of crew travel
After working closely with our marine and energy clients throughout the pandemic, we’ve seen that there has been a collective refocus on the elements of a travel programme that are absolutely essential in helping business to continue – one of these being controlling the cost associated with crew travel.
Although the early days of the Covid-19 pandemic felt intense, frantic and fractious, the ensuing months have given us all a chance to focus on what really matters – and this is particularly true for those operating in the marine and energy sectors.
While much of the world was in some form of lockdown and everyday life as we knew it ground to a halt, marine and energy organisations had no choice but to continue operating and find ways to enable crew changes and wider organisational travel to continue.
After working closely with our marine and energy clients throughout the pandemic, we’ve seen that there has been a collective refocus on the elements of a travel programme that are absolutely essential in helping business to continue – one of these being controlling the cost associated with crew travel.
Crew travel has always been an area of significant spend for most marine and energy organisations, but the outbreak of Covid-19 has only served to exacerbate this.
A combination of decreased airline capacity, strict and ever-changing travel restrictions and a volatile economy has placed more strain on marine and energy organisations’ travel budgets, however that doesn’t mean that there is no way for those operating in these sectors to control their travel spend over the coming months.
By understanding why fares have become more expensive as a result of the pandemic and taking note of the practical measures that can be taken in order to control travel spend, marine and energy organisations can implement a cost-effective approach to crew travel.
Why have fares increased?
As a result of the global pandemic, airline capacity fell to 40% in September 2020 and unfortunately frequent national lockdowns and quarantine requirements are not conducive to a quick recovery to pre-pandemic volumes. The situation is expected to fluctuate over the next 6- months, as flight frequencies remain a fraction of 2019 schedules and current government restrictions discourage full re-deployment of routes and larger aircrafts by major airline suppliers.
In addition to this, the airline industry is expected to shrink further due to bankruptcy or survival mergers, which will bring more seat capacity shortages, particularly in areas with already limited seat capacity such as South America and Africa.
With the future so uncertain, and recovery currently seeming like a slow process, fare pricing is currently more 'simplistic' (fewer service classes and/or more restrictions) and more expensive as a result of airline-specific priorities such as profitability and/or liquidity considerations. There also may be new or hidden costs related to extra airport taxes and airline surcharges levied in relation to enhanced coronavirus airport and aircraft checks, sanitation and cleaning. You can read more about fare increases and the outlook for the future here.
Although the future is set to be challenging, it’s still important that marine and energy organisations feel empowered to take control of their crew travel costs, which is why we’re sharing practical advice about how to monitor and reduce travel spend…
How can the cost of crew travel be controlled?
Working with a travel supplier who can source fares globally provides the best chance of securing favourable rates, but it’s also important to pay attention to the types of fares that your organisation is booking.
There’s a misconception that all bookings are unchangeable once confirmed and therefore many marine and energy organisations are reluctant to book too far in advance, as they know they itineraries can quickly change – particularly with newly imposed travel restrictions and quarantine rules coming into effect. However, marine and energy fares are incredibly flexible and can be changed quite easily and so there’s everything to be gained by trying to increase lead times.
The right global fare brokerage service can give you direct access to all available published and private fares, as well as exclusive marine and energy rates. Specialist travel suppliers who have experience of both the marine and energy sectors should be able to offer you locally-priced fares, regardless of where you’re booking from.
Analytics and travel data
Understanding how your organisation travels today is the best way of predicting how it will travel in the future, even if the future itself feels unpredictable. Gaining greater understanding of how your crew are travelling will enable you to make more confident decisions about future strategies and cost-saving initiatives.
The travel of both crew and onshore personnel is a huge expense for most marine and energy organisations and so, during times when achieving profit is a challenge, securing long term savings on travel spend becomes a top priority. Travel analytics, such as total cost of operation, most travelled routes and booking lead time, can provide organisations with the chance to spot trends and then leverage these to secure more favourable fares.
There is an immense amount of data involved in crew changes and personnel travel – all of which needs to be reported on if it’s to be used strategically as part of cost and time saving initiatives. Being able to run your own reports on everything from duty of care and tracking, to lead times and delays and even the cost of meals and ground transport provides you with greater control of both your time and spend.
Working with a specialist travel management company (TMC) that has a far-reaching global footprint is essential at a time like this. Not only can they provide you with the latest in travel and security updates from their on-the-ground teams from more remote locations, but can also help you to drive changes that will help to control spend.
A global structure will give your TMC access to local fares, which it will then be able to pass on to you no matter where you’re booking travel from, providing an instant opportunity for cost-saving. In addition to this, a global footprint will bring more consistency to crew travel, ensuring that all bookings and crew changes are made in line with any new policies or initiatives that are introduced by your business as a whole.
ATPI Marine & Energy will be appearing at Crew Connect Global Virtual 23-26 November 2020. The conference agenda will bring together the global crewing community to inform and inspire change in recruitment & retention, training & safety at sea, and mental health & wellbeing. Find out futher details here
