Avraham Ariel

Shipping management

MBA, 1979

About Avraham

An Israeli ship apprentice at 16 and Captain at 25, Avraham Ariel’s long and successful career has seen him never far from the sea. An MBA from the then brand new AGSM @ UNSW Business School​ ​​in 1979 helped him cement a new career in shipping management. Since then Avraham has completed a PhD, written seven books and invented the influential BIBO method for sugar transportation by sea.

What was your career plan after completing your MBA and PhD? How did your MBA shape your career?

I commenced my MBA studies at the mature age of 42, after a 16-year sea-going career and 10 years in shipping management. After additional ten years in shipping I went for my PhD, which I completed in two and a half years. Both MBA and PhD studies took place while I was running my business full-time.

I had no special career plans before and after my academic studies. The MBA provided me with management tools, especially in marketing and operation management, which was my major interest. Those tools were devolped further in my PhD, which contributed considerably towards the economics of maritime transport both in Australia and overseas. The application of the ideas on which my PhD was based also provided me with financial security and enabled me to switch over to an academic career.

You were in one of the first AGSM MBA graduating classes in 1979. What are your most vivid memories of that time?

I am in fact the first graduate (alphabetically) of the AGSM!

Vivid memories? There are plenty, mostly good ones. First, gratitude to the school which -- after reading my application -- gave me the opportunity to study for a Master’s degree without having a bachelor’s degree. I am pleased to recall that I did not let the school down.

Second, the hard work. In the early years of the AGSM, students had to take twenty units, which were later reduced to 16. Considering English is not my mother tongue, things were especially difficult for me. Fortunately, my sea-going years had taught me to work under pressure. My only regret is that I somewhat neglected my family in those years.

Third, the small congested classrooms, the intimate atmosphere, the very dedicated group of staff and students and... my amazement at some academics, who had never made a dollar in the real world, teaching me – a manager of a leading shipping line -- how to run a business!

Both your children are MBA graduates and your son also graduated from AGSM. Why do you think an MBA education is important?

An MBA education opens its graduates to thinking, in general, and to analysing and solving different business situations, in particular. But it is of value only when it follows education in disciplines such as science, engineering and economics and matching work experience. In many cases it is overrated.

Your career has centred around the maritime industry in Australia and Israel. When did you first become interested in the maritime industry? What has been your experience of living and working between the two countries?

Since the age of 12 I dreamt of being a ship master. I suppose Jack London, Jules Verne and Joseph Conrad should be blamed for that. I went to sea as an apprentice at the age of 16 and became a Captain at 25. This is an Israeli record that I have been holding for over 50 years.

I retired from active sea-going at 31, after realising that while I enjoyed my job immensely, I was marking time and my brain was no longer being challenged. I then embarked on my second career – shipping management, or “sending other people to sea”, as I called it.

Shipping is international and its major aspects are fairly similar world-wide. There are some exceptions, mainly bad ones. When I moved to Australia in 1970, the Australian waterfront was notorious for its militant unions which generated trouble for the sake of hurting “the capitalist shipowners”. I learned to live with it, as did the whole shipping industry. Superfluous industrial disputes reigned supreme and the Aussie public payed the tab in increased cost of goods and services.

What are the major challenges the maritime industry currently faces?

Commercially it is the imballanced supply and demand of ships that result in significant and very painful trade cycles.

Operationally, safety aboard ships is a major challenge, mainly regarding the training of crews. As shipowners strive to cut costs, the actual sailing of ships is now entrusted mainly to Third World crews, who are not sufficiently educated and trained. The recent Rena affair is a vivid example of this. I fear that we will soon see tremendous disasters with tankers spilling hundreds of thousands of tons of crude oil, which will pollute our oceans. The question in not where it will happen, but when.

Another pollution is modern piracy, which the West demonstrates extreme weekness in fighting, as it does with other acts of international terrorism. Unless proper anti-pirate measures will be soon taken, eg pirates summarily shot and their bases and havens bombed from the air, piracy will become a world-wide plague that will make life miserable for many many innocent people at sea and ashore.

What would you say is your most impressive achievement?

My most impressive achievement is the invention of the BIBO concept and ships. BIBO [Bulk In Bagged Out] vessels are the first and only carriers of white (refined) sugar in bulk. These hi-tech and highly ecomonic vessels, the invention of which was the topic of my PhD work, have revolutionised the international sugar trade.

You were responsible for innovating the way sugar is transported by sea. Why were you able to solve this problem that others struggled with?

For two reasons: First, I come from Israel, a country under a threat of annhilation, which has to continously invent and innovate in order to survive.

Second, because the conservative shipping community, backed by the sugar industry, which was no less conservative, was locked into the fixation that it couldn’t be done.

Third, because necessity is the mother of invention. In the 1980s I acted as a maverick single-handed shipping operator in Sydney and made my living by identifying special niches where the “big boys”-- mainly the container carriers -- could not beat me. Slowly, slowly, I was pushed out by those “big boys”, who used standover tactics to force my clients (Australian exporters) to consign their cargoes to them only . One day I realised that my business was all but lost. The following day I declared a “thinking day”. I locked myself in my den, disconnected the telephone and telex and lay on the couch with my eyes shut, thinking. By the end of the day the BIBO concept was born, supported by a complete business plan.
This experience demonstrates that managers engaged in their day-by-day tasks do not have the opportunity to do the ample thinking that their jobs demand.

You’ve written seven books. What can you tell us about your most recent ‘Plotting the Globe’?

Plotting the Globe is the fruit of my love and interest in navigation and its history. It tells the stories of the meridians, parallels and the International Date Line and the stories behind those stories. I have written it together with my daughter Nora Ariel Berger, who has a BA in journalism from the University of Technology, Sydney, and an MBA from London Business School.

People, and travellers in particular, use concepts such as time, date and distance to structure their lives on a daily basis, yet most do not understand the origin and history of these terms and the tales of the intrepid adventurers, scientists, and seafarers who shaped our picture of the world today. The book transports readers to faraway lands and ancient cultures that span more than 3500 years of exploration. Phoenicians, Spaniards, Portuguese, British, French, and many others star in an epic that stretches from Lapland to Cape Horn, via Greenwich, Paris, the Andes and the Fortunate Islands.

This book is a collection of stories and myths about geography, navigation, and geodesy—the science that deals with the Earth's figure and the interrelationship of selected points on its surface—that reaches far beyond dry scientific texts, to concentrate on the people behind the discoveries. The knowledge and understanding of abstract notions such as the Prime Meridian, the Equator, and the International Date Line is conveyed through emphasis on the human spirit that motivated the pioneer scientists and sailors. It is a tale littered with heroes and villains, battles, tragedies and international intrigue. Readers will learn of a time when nothing was certain—even the shape and size of the earth were the subjects of fierce competition, conflict and politics.

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