In conversation with Hein Velema

The programme came from a need expressed by the shipyards. They reported that some owner’s representatives had no clear idea of what their role was, or what the yard expected of them. There are very good and very experienced owner’s representatives in the industry, but the role itself did not have a clear definition. People came into the role from family offices, from law firms, from captaincy, and they figured the job out while doing it.

The failure modes were ordinary. On smaller boats, some representatives did not know that the yacht had to be registered, or that it had to be prepared for operations. Some thought the role was signing off on change orders, or organising. It was not clear.

The gap had real costs. Unclear roles led to projects running over time and over budget for the yards. They also damaged the owner’s perception of the yard, because the representative in between could not communicate clearly who needed to do what. Shipyards prepare their clients to buy a second yacht with them, so a happy owner matters. The owner’s representative plays a central part in that perception.

The first work of the programme was to define the role; before any curriculum was written, we interviewed project managers at the yards, and we interviewed the owner’s representatives those yards respected. The role definition came out of those conversations.

The course is built in four parts.

Understanding the shipyard comes first. To deal with the yard, to negotiate with it, you have to understand what they are doing, where their interests are, where their sensitivities sit. The representative is in between the owner and the yard, and when the yard says no, or becomes difficult, you need to understand where they are coming from. Bringing the two parties together is one of the things the representative is there to do.

The second course is the representative’s own job: responsibilities, the team you need around you, the discipline around progress and change orders, the preparation of the yacht for operations. The role contains something like twelve or thirteen specific tasks, and people often confuse one of them for the whole.

Then the legal layer. Big money, big interests, written into contracts. The aim is to avoid conflict; if it arrives, the work is in managing it well.

Last, and the part I would say matters most, is managerial leadership. Communication, negotiation, the skills that take a project to a good end. The technical and legal disciplines of the role can be taught; the leadership and the judgement carry the project.

We did not delete all the inflated CVs. We are trying to contribute to clarity.

The CV problem in the industry has a shape. People say: I built that boat. If the boat is anything bigger than an Optimist, nobody builds it on their own. Hundreds of people, sometimes thousands, are involved on a single new build. The honest question is what your part in it was.

On the representative role specifically, people sometimes claim that they represented the owner on a new build when what they did was arrive seven months before delivery to prepare the boat for operations. That is an important part of the job, and we do not underestimate it. It is one of perhaps twelve or thirteen things you need to do. It is not the whole role.

The register applies several filters. The application form asks for detail: not whether you were involved in a project, but in which parts of the owner’s representation you were involved, what you were responsible for, who else was on the owner-side team. Some applicants ask for the documentation, see the form, and do not sign up. That is the first filter.

The second is the reference. We ask for one, and we call it. Knowing that the reference will be called improves the accuracy of what people put on the form. There have been one or two cases where the reference described a different role than the form did. Some projects are downgraded: this is good experience and you learned from it, but you cannot claim you were the owner’s representative on that project, because it was not your responsibility.

The owner’s representative and the broker are two different roles.

One case the committee dealt with: a course graduate who was also an active broker. He had taken the course in good faith, and there was real value in his doing so. The committee, made up of owner’s representatives with one SYBAss member, said it was a conflict of interest. He could not join the register while continuing to broker.

I want to be careful with how that is read. I have managed brokers. I have trained brokers to sell new build. A broker can bring real added value to a new build project. If a broker has access to a client, that means he has value: it is difficult to get the ear of an owner, and where you have it, you have added value. The role is legitimate; the work is legitimate. It is a different role from the owner’s representative role.

The structural piece is the one that creates the friction. In a new build, the broker is often representing the owner in the deal, but the broker is being paid by the shipyard. That is a mismatch. Owners generally know that a broker works on commission. They do not always know how much, or on what.

The code of conduct is more about behaviour than about knowledge. A knowledgeable and experienced representative who takes ten percent commission on the tender is a problem. We do not say it is forbidden. We say if you do it, you have to be completely transparent about it with the owner. In general, the position is that you do not.

In the future, we may have a separate register for new build brokers. The role exists; it is real work; it warrants the same professionalisation the owner’s representative role has been through.

One line on the broker side. A broker does not own clients. That is not how this industry works. The work is the work, and the relationship is earned. Where that is clear, the broker’s role in a new build can be a strong one.

The yard pricing test is the one I would start with.

Some yards make offers that are just too low. The cost of building a yacht has direct costs and overhead. The overhead is not money the yard throws away; the overhead is what produces a quality boat. If you know one yard well, you know roughly what its profit margins look like, and they are typically not large. If another yard quotes fifteen percent below for a comparable build, with similarly thin margins, something is wrong. Brokers sometimes describe that quote as a great deal. The alarm bell should ring.

The historical case is the one we sat through at the founding of SYBAss. New yards came into the market with very deep capital backing. They sold large hulls at prices the established yards knew were below cost. Some sold seven hulls before delivering the first. When the first was delivered, they realised they had underestimated. The eligibility rule that came out of that period was the SYBAss test: a yard needed to have delivered at least three boats over forty metres to join. Once you have delivered, you know what they cost.

For a first-time buyer, the answer to the order-book question is not only wait or go brokerage. There are proper yards beyond the big names, in the Netherlands, in Italy, in Turkey, in Germany. Some are good. Some are not.

What I would look at, in this order: have they delivered? What did they deliver? Is the boat you want similar in size to what they have built before? If you want fifty metres and the largest they have completed is thirty, you have questions. Do they have an order book at all? An empty shed is a different signal. The good yards beyond the big names know what they are doing, and their prices reflect that.