The Baltic - Autumn 2011 by Maritime Media

the Baltic

the

Going green

AUTUMN 2011 T h e O f f i c i a l M a g a z i n e o f t h e B a lt i c E x c h a n g e

AUTUMN 2011

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BALTIC The Baltic is the official magazine of the Baltic Exchange Tel: +44 (0) 20 7623 5501 E-mail: enquiries@balticexchange.com Website: www.balticexchange.com The Baltic is published for the Baltic Exchange by Maritime Media Ltd The Diary House, Rickett Street London SW6 1RU Tel: +44 (0) 20 7386 6100 Fax: +44 (0) 20 7381 8890 E-mail: inbox@mar-media.com The Baltic annual subscription rates £110 for UK, Europe or the world, sent airmail including P&P

Publisher

W H Robinson editor

Sandra Speares Tel: +44 (0) 1483 527998 E-mail: sandra.speares@mar-media.com

SALES manager

David Scott E-mail: david.scott@mar-media.com

DESIGNER

Justin Ives

ISSN 0967-0394 This publication is printed on PEFC certified paper. PEFC Council is an independent, non-profit, non-governmental organisation which promotes sustainable forest management through independent third party forest certification.

The Baltic is published on behalf of the Baltic Exchange and is supplied to members as part of their annual membership package. However, the views expressed in The Baltic are not those of the Baltic Exchange, its directors, its officers or the publishers unless expressly stated to be such. The Baltic Exchange is the world’s premier and oldest international shipping market. Most of the world’s open market bulk cargo chartering is negotiated at some stage by Baltic members who represent leading international companies. Other activities include the world’s most important market for buying and selling ships, specialist freight by air and commodity dealing. The Baltic Exchange operates a strict code of business ethics encapsulated in its motto ‘Our Word Our Bond’. The Baltic Exchange disclaims any responsibility for the advertisements contained in this magazine and has no legal responsibility to deal with them. The responsibility rests solely with the publisher.

theBaltic Autumn 2011 www.thebaltic.com

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Contents Chairman’s message 7 Mark Jackson Baltic briefing 7

Building Baltex

11 FFA training course programme 12 National Maritime Museum opens Sammy Ofer wing 13 Hamburg Shipping Risk Management Symposium 8

14 Baltic Chairman’s Cocktail Party 15 Fehr Cup Tennis 2011 16 Champagne – wine of kings and king of wines 17 Baltic Exchange helps City & Sea Exchange

18 Contacts Logbook 21 Eastern sisters People, places, plcs

23 Commodity price pressure Baltic Comment 25 Michael Grey State of the market 27 Tankers

28 S&P 31 BIMCO 35 Dry Bulk 38 Heavy lift, project cargo and offshore 43 Towage & salvage

47 Shipmanagement, crewing and employment

theBaltic Autumn 2011 www.thebaltic.com

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Contents Environment 51 Going green Software 61 Cloud formation 51

Oxford Analytica 64 Global commodity ‘financialisation’ increases risks FFA 66 Backing brokers Classification

71 Changing face of class Maritime security 75 Up in arms 81 Ship registries must make proactive contribution

Ship agencies 85 Tough times for agents Maritime cluster 91 ARA: cause for optimism Cargo focus

98 Breakbulk operators extend service networks Port focus 107 Mixed fortunes for Med box ports Brazil law 111 Burgeoning Brazil

Insurance news 114 Insurance parlance 116 ITIC Legal news 117 Avoiding negative headlines

132 Events theBaltic Autumn 2011 www.thebaltic.com

Chairman’s message Mark Jackson

Chairman’s message T

he reality of a low freight rate environment is now beginning to make itself felt across the shipping markets. After a relatively strong 2010, the effects of

an oversupply of vessels ordered in the boom years are now becoming all too obvious to see. The remainder of 2011 will be tough for everyone. Capesize vessels which were on average earning close to USD28K per day last August, were only able to command less than half of this amount this August – USD12.6K per day. Tankers are being hired at rates below operating costs and the impact of dwindling consumer confidence is making itself felt on the container industry. Against a backdrop of high bunker prices and the possibility of the retraction of the global economy lurking on the horizon, the inevitable shipping company bankruptcies, ship arrests and charterparty disputes are taking their toll on the shipping industry and its reputation for creditworthiness. Tradewinds

During tough times, it is important that the Baltic Exchange exerts its influence ensuring that contracts are honoured and the spirit of the Baltic Code is adhered to. Our stance on this has never wavered for without trust and

Mark Jackson

proper conduct the shipping industry could not function. We expect our members to not only

potentially have a real impact on their ability to

launched in June is now beginning to see tighter

meet the letter of the law, but also to meet the

do business with shipowners and charterers.

spreads and more companies signing up. It

standards summed up in our motto our word

We advise any company, large or small, to think

is still very early days for the system, but the

our bond.

very carefully before reneging on a contract.

signs are that the dry freight derivatives market

Charterparties negotiated and agreed at

Members are also reminded that the Baltic has

is taking real notice of the benefits offered by a

the height of the boom cannot simply be torn

a very effective service for helping to deal with

neutral, centralised screen. The freight derivative

up and ignored because it is in the short-term

contractual disputes and that we can exert

industry will be gathering in London at the Royal

interest of one party. In the longer term, backing

pressure at the highest levels on your behalf.

Garden Hotel in London on 19 October for the

out of previously agreed contracts and choosing

The timely payment of commission to brokers is

latest Baltic & FFA Brokers Association Freight

not to meet your obligations is in the interest of

also a matter of great importance. Where there

Derivatives Forum. As well as an opportunity

no-one.

The Baltic Exchange has the power

is an expectation that charterers will deduct

for FFA players to meet and network it is also

to censure, suspend or expel a member if, in

commission from freight payments, it is vital that

a chance for us to showcase the sector to

our opinion, the principles set out in the Baltic

this is clearly stated and well understood by all

financial and commodity market professionals.

Code are not met. In these rare circumstances

parties at the outset.

Further details of this event can be found on

the damage done to company’s reputation

On a more positive note, I am pleased to

in the commercial market is huge and can

report that the Baltex trading screen which was

theBaltic Autumn 2011 www.thebaltic.com

www.balticexchange.com

Baltic Briefing

Building Baltex The Baltic meets Baltex chief operating officer, Paul Stuart-Smith

ith a healthy backing of 20 major FFA trading companies (August 2011), the Baltic Exchange’s long-awaited dry cargo freight

derivatives trading screen has now been up and running since early June. Trades have been clearing in as little as eight seconds and Baltex’s chief operating officer, Paul Stuart-Smith, says that so far the system has been operating well. “All the members seem happy with the way in which it is operating and we’ve received lots of compliments about how easy it is to use and its straightforward functionality,” he says. The system was designed with the backing of major principals in the FFA market who were looking for a regulated, central screen that would enable them to trade dry freight derivatives in an anonymous, simple way, and that would also meet the tougher regulatory requirements being imposed by the European and US financial authorities on derivatives trading. Principals told the Baltic Exchange that they wanted to see more transparency in this market and greater liquidity. The result has been Baltex, a Financial Services Authority (FSA) regulated Multilateral Trading Facility, with live FFA prices and online execution

that

supports

straight

through

processing to international clearing houses. Housed at the Baltic Exchange, the Baltex system is built on tried and tested technology and backed by a team consisting of five staff whose role it is to supervise the market and ensure orderly trading. Companies signed up to the system include Bocimar, Cargill, Dry Log, Glencore, Morgan Stanley, Noble Chartering and Vitol. The development of Baltex has also led to new companies such as Greece’s Marfin Popular Bank, shipowner Gearbulk, and hedge fund Castalia joining the Baltic Exchange in recent weeks. Paul Stuart-Smith admits that it has been a long road to get here and that meeting the requirements of both the regulators and Baltic

Paul Stuart-Smith is focusing on building liquidity on Baltex

theBaltic Autumn 2011 www.thebaltic.com

Baltic Briefing members was at times a difficult balancing act.

develop from a niche to a mainstream commodity

Baltex is currently regulated by the UK’s

“I first got involved with the project in November

market. Most of the Baltex members signed-up

Financial Services Authority and therefore across

2009 and developing a business model that

to date have been European based and with

the entire European Economic Area. It is also

would appeal to all was a challenge. However,

a natural interest in shipping, but Paul Stuart-

regulated by Switzerland’s FINMA. The Monaco

we are now up and running, have a sustained

Smith believes that once Baltex is delivering

and Singapore regulators did not require further

commitment to Baltex from a range of major FFA

higher trading volumes, hedge funds with no

authorisation and the final touches are currently

traders and although we’re not there yet, we’re

exposure to the shipping markets will also

being put to Baltex’s application to trade in

growing to plan.”

participate.

Hong Kong. Baltex is also in discussion with the

“There have already been a number of

USA’s Commodity Futures Trading Commission,

serious enquiries from US hedge funds,” he

but the delays in the implementation of the

“I’d be happy if by this time next year, there

says. “Hedge funds are always on the look-

Dodd Frank Act and the unclear status of swap

was general acceptance of Baltex as a market

out for new instruments to trade, but both

execution facilities has meant that this process

by all principals and brokers involved with FFAs.

transparency and historical data need to be

is still ongoing.

Trading would be at a reasonable level, perhaps

available. They need the liquidity to be able to

several thousands of lots per week, and we

get in and out of trades instantly.”

What then does success look like for the Baltex chief operating officer?

There are currently two clearing houses set up with Baltex: London’s LCH Clearnet and

would have involvement from companies outside

Paul Stuart-Smith was himself a bond

Oslo’s NOS, who between them handle the

the shipping sector. We would be seeing the

trader in the 1990s and says that he can see

majority of the FFA market, but according to

bid/offer spread narrowing slightly and liquidity

similarities between the development of the

Paul Stuart-Smith, Baltex hopes to have the

would be growing. Our aim has never been to

freight derivatives market and the way in which

Singapore Exchange and CME Group up and

grab market share from brokers, but to grow

the market changed the way in which it traded

running by early autumn.

volumes,” says Paul Stuart-Smith. He also adds

German government bonds from open-outcry at

However, it is building up liquidity on Baltex

that whilst the cost of trading is an important

LIFFE to the electronic Deutsche Termin Boerse.

that is at the front of its coo’s mind. Ensuring that

factor, trading fees on Baltex have been set at a

He notes: “Whilst I’m not suggesting that

there are competitive prices on Baltex at most

level which he believes “strikes the right balance

Baltex will take over the entire OTC market, there

and doesn’t drive down commission rates in the

came a point when the bond market suddenly

“We are looking at all sorts of ways to make

market as a whole”.

switched over. Today in the FFA market we

this happen. Whether it is offering concessions

times is critical to success.

So far, most of the trading activity on Baltex

have fragmentation – lots of broker screens

and rebates to market makers or working ideas

has been on shorter dated contracts covering

and different ways of trading. We now have

to make the system more attractive to brokers,

capesize and panamax timecharter averages.

a centralised screen run by a reputable and

we need to continue to make sure that Baltex

Against a backdrop of a market trading around

neutral organisation based on tried and tested

serves the market it was set up to serve.”

18-20,000 lots per week and a low freight

technology. Volumes will inevitably pick up and

rate environment, Paul Stuart-Smith believes

more people will be attracted to participating in

that Baltex offers the FFA market a chance to

this market.”

Changes to panamax vessel description The Baltic Exchange is planning to change the basis of its standard panamax vessel

• In port consumption 3 mts IFO plus 0.1 mt MDO

description from 74,000 dwt to 76,600 dwt

Mooted changes to the Baltic’s capesize

in January 2012. The move follows a detailed

index, will not be implemented in January due

analysis of the current and future global fleet

to the difficulties in establishing warranted

and lengthy consultations with the industry.

vessel speeds and fuel consumption against a

The Baltic Exchange will, however, continue

backdrop of very high bunker prices. The Baltic

to publish assessments based on 74,000 dwt

Exchange plans to look again at potentially

vessels for a number of years until all open

increasing its capesize vessel description from

interest based on any of the constituent routes

172,000 dwt to 180,000 dwt in 2012.

For further details see www.balticexchange. com/baltex

New associate membership status for students T

he Baltic Exchange has introduced a new class of free membership for students and

of the Baltic Panamax Index (BPI) has been

Changing any of the Baltic Exchange’s

legal trainees. Open to anyone studying for a

closed out. A successful private trial of the new

vessel descriptions has a potentially large

professional business related maritime degree

panamax vessel description was undertaken

knock-on effect to both clearing houses and

at an approved educational establishment or

over the summer.

their clients using the Baltic’s indices as the

legal trainees aged 25 or under, the member-

basis for freight derivative trade settlements, as

ship enables students or trainees to access

described as follows:

well as companies using Baltic assessments

Baltic Exchange data and other Baltic services.

• 76,600 mt dwt on 14.14 m draft

for index linked physical charterparties.

Currently only Cass Business School and the

• Max 12 years

The Baltic Exchange will ensure an orderly

University of Hamburg have approved status,

• 225 m LOA and 32.26 m beam

transition to its new index.

but the Baltic hopes to grow the range of eligible

The new proposed BPI vessel type is

educational establishments.

• TPC 66

For further details, please contact Crispin

• 90,700 cu m grain

Eccleston:

• 14 on 36 mts fuel oil laden and 34 mts fuel

Email: ceccleston@balticexchange.com or

oil ballast no do at sea

call +44 (0)20 7369 1654

theBaltic Autumn 2011 www.thebaltic.com

Baltic Briefing

Freight derivative forums T

he Baltic and FFA Brokers’ Association will once again be running a series of forums

over the coming months aimed at bringing together the freight derivatives market, discussing relevant issues as well as showcasing the sector to potential participants.

The forums

consist of a range of workshops, presentations and reception or dinner.

Dry Forum London 19 October at the Royal Garden Hotel Tanker Forum London 17 November at the Baltic Exchange Dry Forum Shanghai Late November – date and venue to be confirmed For further details please contact Robin King. Email: rking@balticexchange.com The Baltic & FFABA have run numerous forums in London, Hamburg, Athens, Singapore, Oslo, Hong Kong and Shanghai

FFA training course programme

he Baltic Exchange will be holding freight derivative training courses in Singapore and London over the coming months.

Freight

Derivatives

Shipping

Risk

Management is a more basic course, covering the fundamentals of FFA trading as well as bunker, ship price and financial risk management. Advanced Freight Modelling & Trading is aimed at more experienced FFA traders and looks at modelling freight rate volatility, options pricing and constructing forward curves. Both courses are led by Prof Nikos Nomikos and Dr Amir Alizadeh.

Freight Derivatives & Shipping Risk Management 6-7 September – Singapore 10-11 October – London 23-24 January – Singapore 9-10 February – London

Advanced Freight Modelling & Trading 8-9 September – Singapore 12-13 October – London 25-26 January – Singapore 11-12 February - London

See www.balticexchange.com/training for further details and booking form

theBaltic Autumn 2011 www.thebaltic.com

Baltic Briefing

National Maritime Museum opens Sammy Ofer wing T he UK’s National Maritime Museum, the largest museum of its kind in the world, has opened a new £35m build-

ing to the public. The Sammy Ofer Wing, made possible

thanks to a £20m donation from renowned shipowner

and Baltic Exchange honorary member, Sammy Ofer, as well as an award of £5m from the National Lottery Fund, was officially

opened by HRH The Duke of Edinburgh in July. Sammy Ofer sadly passed away at the age of 89, just a few weeks before the completion of the project. During his life Sammy Ofer pledged in excess of £40m in support of education, medicine and medical treatment facilities around the world. Located in Greenwich, London, the Sammy Ofer Wing includes a special exhibitions gallery, a permanent gallery called Voyagers, which introduces the story of Britain and the sea, a new state of the art library and archive housing 100,000 books, as well as a restaurant and café with views over Greenwich Park. Lord Sterling, chairman of the National Maritime Museum said: “Our maritime story is Britain’s national story. And understanding the way the past has shaped the present has never been more important in enriching our understanding of the world and providing inspiration for the future. In the Sammy Ofer Wing, our new exhibition space will introduce a new generation of visitors to the many rich narratives bound up in our maritime story. This visionary transformation would not have been possible without

The Duke of Edinburgh opened the new wing in July

the support of Sammy Ofer and the Heritage Lottery Fund.” Kevin Fewster, National Maritime Museum director, said: “The Sammy Ofer Wing creates a spectacular, contemporary environment in which more people can appreciate the wonders of our world-class collections and their stories of human endeavour and discovery.” The Sammy Ofer Wing has opened with a six month special exhibition High Arctic, which looks at what the icy archipelago Svalbard, better known by the name of its biggest island, Spitsbergen, might look like in 2100. This autumn there will also be a new exhibition, Traders: the East India Company and Asia, which will explore the history and continuing relevance of Britain’s trade with Asia, looking at this complex story through the lens of the East India Company and the commodities it traded. Over the next few years the Museum will also open a redeveloped Royal Navy gallery, a new Maritime London gallery, and a new children’s gallery.

The new building features new galleries and a state of the art library and archive

theBaltic Autumn 2011 www.thebaltic.com

Baltic Briefing

Hamburg Shipping Risk Management Symposium T

he University of Hamburg and the Baltic

This free event takes place at:

Exchange are running a Shipping Risk

Lecture Room C, University of Hamburg Edmund-Siemers-Allee 1 (Main Building) 20146 Hamburg

Management Symposium in Hamburg on 6 October.

Topics under discussion will include

freight options, bunker levies vs trading, and the future of ship finance. The evening programme

Baltic hosts arbitrations T

he Baltic Exchange hosted a number of arbitrations this summer in its purpose built

conference centre at its London headquarters. Home to the London Maritime Arbitrators Association as well as the Baltic Expert Witness Committee, the Baltic has a first-class set of rooms specifically designed for arbitration

will feature both academics and industry players, including Prof Nikos Nomikos (Cass Business

To confirm your attendance, please contact

hearings. Located on St Mary Axe, a stone’s

School),

Bettina Kourieh:

throw from Lloyd’s of London and some of the

Piraeus), Dr Wolfgang Drobetz (University of

Tel: +49-40-42838-2421

UK’s leading solicitors, the Baltic Exchange can

Hamburg), Stefan Albertijn (Alfred C. Toepfer

Email: bettina.kourieh@wiso.uni-hamburg.de

provide a neutral and reputable venue for both

Prof Andreas Merikas (University of

International), Robin Das (HSH Nordbank),

arbitrations and mediations. The rooms can seat

Stefan Otto (Deutsche Schiffsbank), and Klaus

up to 35, an arbitration hearing of up to 15 and

Stoltenberg (NORD/LB).

20 observers – and the break-out rooms work perfectly for the private discussions needed by

New FMIUG chairmen T

Market

market place is key to the delivery of the Baltic’s

Information Users’ Group (FMIUG) has elect-

independent services and I would encourage

Baltic

Exchange’s

Freight

ed two new chairmen for its dry and wet market

the various parties. See www.balticexchange.com/venue for booking details.

Deaths

principals to join this group.”

sections. Philippe van den Abeele, managing

Jeremy Harris said: “The tanker FFA market

director of Castalia Fund Management (UK), now

is now well established and despite the previous

heads the dry section and Jeremy Harris, freight

chair’s excellent work in promoting the market, it

derivatives trader – crude, at Shell Trading &

still has significant growth potential. As chair, I will

Shipping, leads the wet section.

he Baltic reports with regret the passing of the following:

ensure the user group continues to work with the

Stephen Evans

The group, made up of shipowners, charterers,

Baltic Exchange to look at new ways of increasing

Stephen Evans passed away on Saturday

operators, and freight derivative traders, provides

liquidity and encouraging new market participants

25 June following an illness. Stephen joined

the Baltic Exchange with regular advice on its

to continue the growth of the FFA market. Work

the Baltic in 1975 representing Kuwait Arab

freight market indices and route assessments.

will continue towards dollar per tonne contracts,

Chartering. He became a Director of the Baltic

as settling trades against Worldscale, a floating

Exchange in 2002, serving as Chairman of

number, is clearly a barrier to many potential

the Membership Committee, and stepped

market participants. Like Philippe, I encourage all

down from the Board at the 2007 AGM.

principals to join this group.”

He became a Retired Member in October 2007.

Commenting on his appointment Philippe van den Abeele said: “As chair I will be continuing to ensure that the FMIUG provides the Baltic Exchange with the support it needs to develop its indices and ensure the success of the Baltex electronic trading

The pair replaces Stefan Albertijn of Toepfer (dry) and Matthew Holme of Trafigura (wet).

platform for the dry FFA market. Input from the

David Mockett David Mockett died in Yemen on 20 July 2011. Mr Mockett was first elected to the Exchange on

New members T

he Baltic is delighted to welcome the following new firms into membership:

Brouwer Shipping & Chartering GmbH www.brouwership.de Chongqing Shipping Exchange

Gearbulk Pool Limited www.gearbulk.com

22 April 1996 for Arabian Establishment for Trade and Shipping. Until he passed away, Mr Mockett had been an individual member since 1998.

Ioannis Kontoyannis Members will learn with regret of the death of

M.I.T. Chartering & Agency Co., Ltd

Commodore Ioannis L Kontoyannis (HCG) of the Baltic Exchange based Greek Shipping

Olam International Limited www.olamonline.com

Cooperation Committee, on 30 May. Commodore Kontoyannis graduated from the Hydra Captains School, having first been at

CITIC Pacific Limited www.citicpacific.com CSC Nanjing Tanker Corp www.njtc.com.cn

Wah Kwong Maritime Transport Holdings Ltd www.wkmt.com.hk

sea, and then joined the Limeniko Soma (Hellenic Coast Guard) where he had a distinguished career, rising to the rank of Commodore. During that time he graduated from the Athens Law

Seasure Shipping www.seasure.co.uk

theBaltic Autumn 2011 www.thebaltic.com

University and joined the GSCC in 1995, where he remained until he passed away.

Baltic Briefing

Baltic Chairman’s Cocktail Party B

altic members from far and wide once again gathered in London for the Baltic Exchange Chairman’s Cocktail Party.

The evening of champagne

and canapés was held at Christ Church in Spitalfields. Guest of honour was the Lord Mayor of London, Alderman Michael Bear.

Robin Summerell

Nadia Mirza, Siri Sundal (Clarkson Securities), Gemma Mills (NJ Goulandris)

Anthony Grenfell and David Beard (SSY)

Duncan Dunn (SSY Futures) and Isabella Kurek Smith (LCH Clearnet)

Alderman Michael Bear, Lord Mayor of London

theBaltic Autumn 2011 www.thebaltic.com

Baltic Briefing

Fehr Cup Tennis 2011

Sports roundup

Richard Fehr, grandson of Frank E Fehr CBE, reports

ongratulations to the Baltic Golfing Society, which in recent months

espite the gloomiest weather forecast

It was good to see Chris and Clark Sergeant of

for many years, 15 pairs contested

Cabot Shipping returning to the tournament after

the Baltic Inter Firms Fehr Cup Tennis

a year’s break, winning the American Tournament

Tournament at the Surbiton Tennis

Section 2, and congratulations go to Howe

The Baltic Go-Karting Club looks set for

Robinson 1 (Guy Hindley, back after a long break,

a revival this autumn with a series of races

and Fitness Club in July.

has beaten both the London Stock Exchange, after a 16-year wait, and

Lloyd’s of London.

Heavy rain showers throughout the morning

and his partner, Sam Palmer) for winning section 1.

planned. Contact Cris Eccleston for further

failed to dampen the enthusiasm of the players,

Rumours circulating before the tournament

details. Email: ceccleston@balticexchange.com

but by limiting the early round matches to one

that more ladies than men were taking part

The Baltic Exchange Cricket Club took on

set per match, and having the use of the fast-

proved to be unfounded, but even with the

the Stock Exchange and Lloyd’s of London in

drying hard courts at the Club, all was up to

absence of the Vogt sisters (temporary, we hope),

the 5th annual City Twenty20 tournament at the

schedule by lunchtime when prolonged rain

some six ladies represented their companies in

world famous JP Getty estate on 1 September.

restricted players to the Club house.

either same-sex or mixed pairings.

Report to follow in the next issue.

However, come the business end of the

Richard Fehr presented the Cup and prizes

The Baltic Exchange Sub Aqua Club is

tournament, the sun came out, and for the first

to the deserving winners and thanked Perry

always on the look-out for new members.

time in living memory, the final was contested

Perera, the match referee, who had done

This active club runs a full training programme

between two teams from the same company,

so much behind the scenes organising the

throughout the year and runs dives around

Braemar Seascope 1 and 2. The in-form first

tournament and finally getting the sun to shine.

the UK including Devon, Dorset and Sussex.

pair of Charles Morrison and Richard Wetzki –

Costas Maramenides was also thanked for

Annual club holidays have taken members

attempting a second consecutive tournament

kindly umpiring the Final in addition to organising

to Russia, the Red Sea and South Africa

victory, having won last year – were a little too

the two-section American Tournament, no easy

in recent years. The club holds regular try

good for their opponents, Ben Jeans and James

task given the weather conditions.

dives at Guys Hospital swimming pool on

Allen. It was nevertheless a match worthy of the

Proceedings were wound up with Fehr

Wednesday evenings and has its own 7 metre

final, umpired in his usual calm way by Costas

thanking the Surbiton Club for looking after us so

boat for inshore dive sites. For further details

Maramenides.

hospitably and we’re looking forward to seeing

call Graham Nash on 07774 193519.

everybody again on 12 July 2012.

Umpire, Costas Marimenides, flanked on left by runners-up Braemar

Left to right: Richard Fehr, tournament winners Charles Morrison &

2 (Ben Jeans & James Allen), and right, winners Braemar 1 (Charles

Richard Wetzki holding Fehr Cup, and match referee Perry Perera

Morrison and Richard Wetzki)

theBaltic Autumn 2011 www.thebaltic.com

Baltic Briefing

Champagne – wine of kings and king of wines There are other excellent, good-value sparklers to be had, but when that special moment comes, we still cast our eyes towards that unique region of northern France, says David Hughes

id you know the internal pressure of a

Montagne de Reims; Epernay has directly to its

this year’s weather pattern may bring the earliest

bottle of Champagne is that of the tyre

west the Vallee de la Marne. Both these regions

harvest on record (currently noted as 2003),

of a London double-decker bus? That

are noted for the two black grape varieties: Pinot

with most grapes being brought into the winery

when you twist and pull the cork from the

Noir (for fruit and elegance) and Pinot Meunier

before August’s end (harvest is usually early to

bottle, you’ll release around 250 million bubbles?

(structure). To Epernay’s south-east sits the Côte

mid September).

In 1988 I had the privilege of being one of just

des Blancs, noted for Chardonnay plantings (for

12 people selected from the UK and Ireland to

acidity and finesse).

Styles: brut zero or ultra brut is the driest; then ‘brut’ (dry), ‘demi sec’ (semi dry or semi

attend the Académie du Champagne’s course

The making: The juice from all three is clear,

at Epernay and Reims in Champagne’s heart-

thus Champagne is a white wine that is usually

Recognised bottle sizes: half bottle

land where, for centuries, the Kings of France

a blend of all three varieties. Blanc de Blancs is

(37.5cl), bottle (75cl), Magnum (two bottles),

were crowned. The week’s course was one of

made just from Chardonnay grapes; Blanc de

Jeroboam (double magnum – four bottles),

the most fascinating of my life, visiting the cha-

Noir is made from one or both black grapes.

Methuselah (eight), Salamanzar (12), Balthazar

sweet), and rich (sweet).

teaux, houses, caves and vineyards of all the 12

Rose Champagne is made either by the

Grande Marque Houses in or around these two

pressed wine being in limited contact with

One thing is certain; we in the UK quite like

towns (Bollinger and Laurent-Perrier are based

red grape skins or, and usually, the addition

the stuff! We are consistently Champagne’s

at nearby Aÿ and Tours-sur-Marne respectively).

of a small amount of still red wine (Pinot Noir)

biggest export market. In 2010 we imported

to the cuvee prior to bottling and the second

35,488,401 bottles (up 16.3% on 2009). The

fermentation.

USA is next (16.9m), Germany (13.3m). Whilst

Who ‘invented’ Champagne?

Well, we’re

pretty sure it wasn’t Dom Perignon, the

(16), Nebuchadnezzar (20).

famous monk popularly given the moniker as

To induce the second fermentation in the

‘the inventor’ when he joined the Abbey of

bottle, each House adds its own few grams of

89.9% up on the previous year – a further

Hautvillers, Epernay as cellar master in 1668.

yeast and rock sugar. The bottles are crown

mark of China’s entry into the world of

Prior to his time, it is documented in 1662 that

capped (like a beer bottle) and must rest for a

wine (both as importer and, as we all

the Englishman Christopher Merrett instigated

minimum of 1.5 years (three years for a vintage

shall see, producer).

the addition of sugar “to create a sparkling of the

year). During this time, the bottles are constantly

wine”. Also around this time we can add the fact

moved to slope upside down so that the lees

Champagne is best enjoyed when

that Sir Robert Mansell created the thicker glass

(dead yeasts) collect at the neck which is then

it’s either the first drink of the day

bottle to “withstand the wine’s internal pressure”

frozen and ejected from the bottle. The final

(no matter what time that may be!)

(exploding bottles blighted the Champenoise).

addition of secret liqueur is added and the bottle

or the first drink prior to lunch or

So, whilst other suitors, including Limoux’s

corked, capsuled, wired (six twists, by the way),

supper. However, I leave the last

Blanquette in France’s south-west, stake their

labelled and boxed.

words of this article to the much

China imported just 1.1m bottles, this was

humble

opinion,

loved Madame Lily Bollinger,

claims, perhaps it is also England’s call?

Some facts:

whose famous statement of

has been ravaged by war, particularly during

Champagne has but one controlling body

Champagne reads thus:

the major French offensive here in September

(Appellation Contrôlée), whereas Burgundy has

“I drink it when I’m happy and

1915, when property and vineyard alike were

800!

when I’m sad. Sometimes I

Region and grapes: The Champagne region

devastated with bullet holes still to be seen at the famous windmill at Verzenay. Situated

the

north-east

Paris,

Champagne is France’s most northerly wine

A non-vintage Champagne can be a blend of

drink when I’m alone. When

the current year of harvest and reserve wine from

I have company I consider it

previous years. A vintage Champagne must be

obligatory. I trifle with it if I’m

made 100% from the harvest of that year.

not hungry and I drink it when

region with three main producing areas, generally

Dramas are afoot! August holidays in

on chalk sub soils. Just south of Reims is the

Champagne have been cancelled for it seems

theBaltic Autumn 2011 www.thebaltic.com

I am. Otherwise I never touch it, unless I’m thirsty.”

Baltic Briefing

Baltic Exchange helps City & Sea Exchange

he Baltic Exchange played host to a

wharf in Silvertown. Whilst in London the group

put the programme together. We believe that by

group of teenagers from two very dif-

also visited the National Maritime Museum and

showing people first-hand what opportunities

ferent, but deprived, areas of the UK

the Thames Barrier. The group from London

are out there and how fundamental the sea is to

this August, showcasing the shipping

also spent five days in Cornwall, staying at

our way of life we can in our own small way help

industry, the importance of the sea, and the

Trinity House’s Lizard Lighthouse, meeting local

to improve these young people’s futures.”

many career opportunities available to them.

fishermen and learning how this community

The programme was supported financially

The City & Sea Exchange brought together a

depends on the sea, as well as visiting the

by the Baltic Exchange Charitable Fund,

group of 24 young people from London’s Tower

Marconi Centre, windsurfing and kayaking.

Trinity House and the Worshipful Company

Hamlets and Cornwall’s Lizard Peninsular to

Course leader Abdul Azim said: “This course

of Shipwrights. Futureversity is looking for

not only raise awareness of the wider maritime

really helps to break down barriers and bring

further companies to get involved with its 2012

sector, but also learn about each other and their

together people from very different parts of

programme. Contact Duncan Bain at the Baltic

very different ways of life.

the country. People who would normally not

Exchange for further details.

Run by Futureversity, a London-based charity

know about the maritime industry and all the

that offers hundreds of short courses ranging

opportunities it can offer are able to have

from business to sport during the summer

their horizons broadened thanks to the Baltic

holidays, in partnership with the Lizard Outreach

Exchange and all its support in arranging the

Trust, the City & Sea Exchange saw the group

presentations and visits.”

Email: dbain@balticexchange.com or call 020 7369 1627.

visit shipbrokers Clarksons, hear from Lloyd’s

Baltic Exchange chief executive Jeremy Penn

said: “We have been involved with this course for

www.futureversity.org

as well as look at operations at the Tate & Lyle

five years now and have greatly enjoyed helping

www.lizardoutreachtrust.org

For further details on the programme see:

A diverse group of young people learnt about careers in the shipping industry

theBaltic Autumn 2011 www.thebaltic.com

Baltic Briefing

Sporting contacts There are many sports clubs associated with the Exchange and in most cases they are open to both members and staff of member companies Baltic Association Football Club

Lawn Tennis Club

Sub-Aqua Club

Stephen Calafti

Crispin Eccleston

Lorraine Burns

Anglo Greek Chartering, The Baltic Exchange

Tel: +44 (0) 20 7369 1654

The Baltic Exchange

38 St Mary Axe, London EC3A 8BH

E-mail: ceccleston@balticexchange.com

38 St Mary Axe, London EC3A 8BH

Tel: +44 (0) 20 7283 9621

Tel: +44 (0) 20 7369 1638

Sailing Association

E-mail: lburns@balticexchange.com

Cricket Club

Simon Cox

Jamie Freeland

Howe Robinson Shipbrokers

Young Baltic Association

AM Nomikos, 4th Floor

77 Mansell Street, London E1 8AF

Crispin Eccleston

40 Grosvenor Gardens, London SW1 0EB

Tel: +44 (0) 20 7457 8421

The Baltic Exchange 38 St Mary Axe, London EC3A 8BH

Golfing Society

Tel: +44 (0) 20 7369 1654

Chris Cox, c/o Frank Symons Ltd

E-mail: ceccleston@balticexchange.com

Devonshire House 146 Bishopsgate, London EC2 M4J Tel: +44 (0) 20 7377 5423 E-mail: info@balticgolf.co.uk

Key Baltic Exchange contacts Management

Government Broker

Baltex

Tel: +44 (0) 20 7283 9300

Pat Swayne

Paul Stuart-Smith

Fax: +44 (0) 20 7369 1622/1623

Tel: +44 (0) 20 7369 1668

Tel: +44 (0)20 7369 1670

VPN 171 2000

Fax: +44 (0) 20 7623 6644

pstuartsmith@balticexchange.com

E-mail: enquiries@balticexchange.com

E-mail: pswayne@balticexchange.com

Chief Executive

Dispute Resolution

Robin King

Jeremy Penn

Barrie Wooderson

Tel: +44 (0)20 7369 1637

Tel: +44 (0) 20 7369 1624

Tel: +44 (0) 20 7369 1674

E-mail: rking@balticexchange.com

E-mail: jpenn@balticexchange.com

Fax: +44 (0) 20 7623 6644

Marketing

E-mail: bwooderson@balticexchange.com

Freight Market Department

PA to Chairman and Chief Executive

Communications

Tel: +44 (0)20 7369 1625

Jill Bradford

Bill Lines

E-mail: wlyth@balticexchange.com

Tel: +44 (0) 20 7369 1621

Tel: +44 (0) 20 7369 1653

E-mail: jbradford@balticexchange.com

E-mail: blines@navigatepr.com

Baltic Exchange Charitable Society

Membership Manager

8 Eu Tong Sen Street

Jackie Harrison

#17-87 The Central

Richard Butler

Tel: +44 (0) 20 7369 1633

Singapore 059818

Tel: +44 (0) 20 7283 6090

E-mail: jharrison@balticexchange.com

Tel: +65 6377 0654

Willy Lyth

The Baltic Exchange (Singapore) Philip Williams

E-mail: pwilliams@balticexchange.com

E-mail: richard.butler@baltic-charities.co.uk

Events Room Hire Head of Finance

Jill Bradford

Duncan Bain

Tel: +44 (0)20 7369 1621

Tel: +44 (0) 20 7369 1627

Email: jbradford@balticexchange.com

E-mail: dbain@balticexchange.com

theBaltic Autumn 2011 www.thebaltic.com

Baltic website: www.balticexchange.com

10 - 12 October Trident Hotel, Nariman Point, Mumbai

www.indiashippingsummit.com

The next decade:

a maritime crossroads for India

 Hard talk debate hosted by BBC’s Nisha Pillai  Live interactive voting  New venue in Mumbai’s finance & maritime district

Principal sponsors

Sponsors

FNSA Fuel Ltd

Logbook

Eastern sisters Ambrose Greenway charts the widely differing histories of two luxurious little passenger ships built to the same basic design in the inter-war years for service in the Malacca Strait and the Philippines, respectively.

n 1927 the Vickers shipyard in Barrow deliv-

to Manila via Iloilo on Sunday morning, a round

ered the prestigious new twin-screw steamer

voyage of approximately 1,200 miles.

was

then

sent

Malta

accommodation ship and returned to Barrow

Kedah to the Straits Steamship Co for its

Both ships served their owners well during

early in 1946 for a refit. Straits Steamship

Singapore-Penang express service. A shade

the 1930s but following the outbreak of war in

declined to have it back (its pre-war benefits

under 2,500 gross tons, it was the largest in

1939, Kedah was requisitioned by the Admiralty

had been prestigious rather than economic)

the company’s 36-ship fleet, and twin Parsons

and fitted out as an anti-submarine patrol vessel

and accepted £125,000 in compensation.

steam turbines developing 5,800shp in service

with two four-inch guns, a three-inch anti aircraft

It was then bought for £75,000 by Harris &

coupled with fine hull lines provided an easy

gun and two depth charge throwers. At the

Dixon, acting in partnership with the newly

18 knots, though it could make over 20 when

same time, the top section of its funnel was

formed Zim Palestine Navigation Co and was

pressed. Accommodation for 80 first-class pas-

removed and new masts fitted either side of its

towed to Antwerp for reconstruction, narrowly

sengers was provided amidships with three pub-

midships deckhouse.

averting being wrecked on the Cornish coast when the tow rope broke and its crew

lic rooms, including a dining saloon, arranged

It patrolled North Borneo waters before

vertically below the navigating bridge. In addi-

becoming caught up in the evacuation of

tion, some 960 deck passengers could be car-

Singapore, finally leaving under Japanese

It eventually emerged from a 10-month refit

ried on the main deck, which was accessed by

artillery fire on 14 February 1942, just two days

with enlarged accommodation in four classes

shell doors and ventilated by large openings.

before the city capitulated. Initially, its convoy

and three boats on either side in gravity davits,

Three galleys catered for European, Malay and

was repeatedly bombed and only the skill of its

raising gross tonnage to 3,504. The shortened

Chinese food.

master saved it, though near misses damaged

funnel was retained and speed reduced to

Known as the ‘Little Queen of the Malacca

its machinery and speed fell to 7 knots before

a more conservative 17 knots. Renamed

Straits,’ its Singapore anchorage was marked

it reached Batavia. It was then ordered to

Kedmah it left London for Palestine, where it

on the local charts in deference to its status.

Tjilitjap to pick up General Wavell’s staff and

received a great welcome as the ‘first Hebrew

It sailed at 11:30 every Tuesday and reached

400 refugees and take them to Colombo but

ship’ and was placed in service between

Penang with great regularity at 08:30 the

its boilers finally failed due to poor feed water

Haifa and Marseilles via Naples and Genoa,

following morning, the journey being cooler,

and it ended the voyage on 9 March in tow of

transporting passengers and emigrants. One

more comfortable and faster than the train.

HMS Danae. Just 10 days earlier, Mayon had

of its crew during this early period was Matti

At weekends it crossed to Belawan before

been bombed and sunk by Japanese aircraft

Morgenstern, who later became a respected

departing Penang at 16:30 on Monday for a

off Butuan, Mindanao, having earlier evacuated

president of Zim Line.

13:30 arrival in its homeport on Tuesday.

US Air Corps personnel southwards from Manila

In 1952 it was damaged on the wreck of the

Bay and survived an unsuccessful bombing

Patria in Haifa harbour and beached but Harris

attack off Mindoro.

& Dixon’s took it over and after being repaired

An early passenger was Captain Robert Dollar, an expatriate Scot who had made a fortune in

abandoned it.

the US West Coast lumber trade and gone on to

After being repaired in Colombo, HMS Kedah

in Genoa it embarked on its third career as the

establish the Dollar Line, forerunner of American

spent the next two years patrolling the Bay of

Sterling Line cruise ship Golden Isles, carrying

President Lines. So impressed was he that he

Bengal, during which time its armament was

first and tourist class passengers between

ordered a near sister from Vickers, which was

extended to two multi-barrelled pom-poms.

Marseilles, Malta, Piraeus, Cyprus and the

delivered to the Philippine Inter-Island SS Co

It was a headquarters ship for the invasion

Lebanon.

as Mayon in 1930. It differed in having its boats

of Malaya and on 5 September 1945 had

It was chartered back by Zim in 1954 but

mounted on gravity davits and light derricks

the distinction of leading the fleet back into

laid up in Genoa in mid 1955 and put up

in place of steam cranes. Its weekly schedule

Singapore with Rear Admiral Morse, Combined

for sale. Bought for scrap by BISCO, it was

involved leaving Manila every Tuesday afternoon

Operations staff and the Chairman of Singapore

towed to Newport, Mon by the tug Turmoil and

for Iloilo, Zamboanga and Cebu and then returning

Harbour Board embarked.

demolished by John Cashmore in its 29th year.

theBaltic Autumn 2011 www.thebaltic.com

Logbook

Kedmah’s smart livery included black, blue and white funnel and mahoganyboats

The buff-funnelled Mayon on trials, note lower promenade deck plated over

Mayon’s yacht-like qualities are evident in this Zamboanga view

HMS Kedah in warpaint

Kedmah, Zim Lines’ first ship, leaves Antwerp following her

A rare picture of Sterling Line’s cruise ship Golden Isles

postwar refit

theBaltic Autumn 2011 www.thebaltic.com

People, places, plcs

Commodity price pressure Price increases expected to put up owners costs.

ommodity price rises have put more

claims, such as the earthquakes in New Zealand

World Container Index, the first Europe-based

than a little pressure on shipoperating

and Japan.

assessment of container freight rates and index

costs. Fleet owners and managers

“P&I cover in 2010 saw standard surcharges

are certainly feeling the squeeze in

falling to an average 3.5%. Stock markets rallied

The index will provide a new facility for the

2011, according to shipping consultants Drewry.

and so this had a positive effect on P&I rates.

global market to hedge freight rate risk and see

production, has been launched this month.

Drewry has just published its latest annual

The exception is the offshore sector, where

major improvements in forward price discovery

analysis of ship operating costs, covering eight

increases of up to 40% in P&I rates have been

through the container derivatives market.

vessel sectors and over 35 different sizes of

reported. Deepwater Horizon has been the

The new index will report weekly freight

vessel plus detailed operating budgets for a

main cause, and the problems this year. Excess

rates on backhaul as well as headhaul routes,

range of oil tankers, chemical tankers, gas

loss reinsurance rates, on the other hand, were

and will provide increased efficiencies in

carriers, dry bulk vessels, container vessels,

reduced for all vessel categories.”

hedging strategies for freight users dealing in

Increases in commodity prices, particularly

bulk, commoditised and recovered cargoes.

Paula Puszet, managing editor, commented:

steel, have had an effect on the cost of

Contracts will be available with at least one

“In 2010, vessel operating costs overall

maintenance and repair, and increases in the oil

clearing house at or soon after the launch date,

remained static. However, in 2011 commodity

price have made lubes, paints and coatings more

and subscriptions to the index were available

price increases will push up lube, repair and

expensive. Drewry warns that there is a concern

from 22 August 2011.

maintenance costs. With some owners having

that lube prices “could become disconnected

Richard Heath of the WCI said ahead of

to take additional insurance cover for kidnap

from oil prices, heralding a significant increase

the launch: “We are pleased to announce this

and ransom, overall costs are forecast to rise by

in lube prices”. Those owners and managers

important step in the process of bringing a

between 4% and 6%, depending upon vessel

that had pinned down lube prices with forward

viable, tradable container index to market. We

sector.”

contracts may find those agreements run out

are now working with a number of parties

this year and so the cost benefit will likely

on final feedback to ensure that we deliver a

disappear.

product which is tailored to the requirements of

ro-ro, general cargo and reefer vessels.

The key change as far as manning is concerned is that low market demand has kept wage levels down across the globe. This

Tighter sulphur emission controls for vessels

the market. Interest in the potential of the WCI

has also had the effect of narrowing the gap

sailing within ECA areas came into effect last

has been very encouraging, and we already have

between demand and supply for experienced

year. This raises fuel costs and has made record

a number of pre-orders for subscriptions.”

seafarers. While this is no new problem, Drewry

keeping on ozone depleting substances on

warns that “as more newbuilds come on stream,

board mandatory.

The WCI reports agreed spot container freight rates for major East West trade routes

the gap will no doubt widen again, forcing wages

Fleet operators know that the many

and consists of 11 route-specific indices

up. With the next STCW round, as well as ILO

conventions that abound on safety, emissions

representing individual shipping routes and a

MLC regulations cutting in next year, owners

and manning will result in increased costs.

composite index. Routes include: Shanghai to

and managers will come under wage and staff

Like low demand and high commodity prices,

Rotterdam; Rotterdam to Shanghai; Shanghai

cost pressure – particularly in the areas of travel,

regulation is a brutal fact of maritime life.

training and victualling”. Turning to insurance, hull and machinery

to Genoa; Genoa to Shanghai; Shanghai to Los

“Ship Operating Costs 2011/12” by Drewry

Angeles; Los Angeles to Shanghai; Shanghai to New York; New York to Rotterdam; Rotterdam

Shipping Consultants.

premiums have barely risen, Drewry says. Vessel

to New York; Los Angeles to Rotterdam; and

values have become more stable, the consultants

Rotterdam to Los Angeles.

say, and the outlook points to premiums rising to

New World Container Index

The WCI assessments are reports of the value

reflect the pressures the insurance market will

Drewry

The

of agreed freight rates between major container

find itself under following non-marine related

Cleartrade Exchange have announced that the

lines and shippers or freight forwarders. Only

Shipping

Consultants

and

theBaltic Autumn 2011 www.thebaltic.com

People, places, plcs freight rates that are agreed between participants

considered view.

and on which cargo is, or is expected, to move

“We have been working with the industry,

will form the assessments. Rates for quotes,

and in particular the Chamber of Shipping,

tariffs, estimates, bids or offers are excluded.

in campaigning for some time, and we are

Rates are collected from organisations based in

delighted at this positive development.”

Asia, Europe and North America.

broker base here, which requires us to increase significantly our office personnel.”

HFO ban in Antarctic Amendments to IMO’s MARPOL Convention for

The rates reported by the index are spot rates

the prevention of pollution from ships came into

with a validity of seven days to one calendar

Syrian sanctions tighten

force on 1 August 2011, banning heavy fuel oil

month from the date the assessment is reported.

There has been a further tightening of the

from the Antarctic and creating a new North

Agreed freight rates are to be reported in USD

EU sanctions against Syria with a ban on

American Emission Control Area (ECA).

per forty-foot equivalent unit (FEU), equivalent to

imports of Syrian oil into the EU. Purchase,

A new MARPOL regulation to protect the

a 40ft-long 8ft 6in-high ISO maritime container

import and transport of oil and other petroleum

Antarctic from pollution by heavy-grade oils is

as a full container load.

products from Syria are prohibited and no

added to MARPOL Annex I (Regulations for

The value of agreed freight rates is defined

financial or insurance services can be provided

the prevention of pollution by oil), with a new

as the total ocean freight, including bunker

for transactions. The arms embargo imposed

chapter 9 on special requirements for the use

adjustment factor and all other applicable

on Syria on 9 May continues to remain in place.

or carriage of oils in the Antarctic area.

surcharges, plus terminal handling charges

According to law firm Clyde & Co’s on line

Regulation 43 prohibits both the carriage

when it is common market practice to include

shipping bulletin: “The oil import ban is likely to

in bulk as cargo and the carriage and use as

them, but excluding any surcharges related to

hit the Syrian regime hard, particularly now the

fuel of: crude oils having a density, at 15°C,

inland transportation.

country’s tourist industry has all but collapsed.

higher than 900 kg/m3; oils, other than crude

Oil exports account for about 25-30% of Syria’s

oils, having a density, at 15°C, higher than

hard currency revenue and in recent years over

900 kg/m3, or a kinematic viscosity, at 50°C,

Reassessment on UK tonnage tax

90% of those exports have gone to the EU.

higher than 180 mm2/s; or bitumen, tar and

Accountant Moore Stephens says HM Revenue

$4bn would be a challenge because Syria’s

This means, in effect, that ships trading to

& Customs has agreed to re-examine, in

production is mainly sour and heavy crude,

the area, whether passenger or cargo ships,

consultation with the shipping industry, its

which very few refineries outside Syria, the US

would need to switch to a different fuel type

earlier intention to unilaterally reinterpret the UK

and the EU can handle; and transport costs

when transiting the Antarctic area, defined as

Tonnage Tax rules to the potential detriment of

will be high, if indeed many companies with

“the sea area south of latitude 60°S”.

many shipowners.

interests in Europe are willing to get involved. In a

An exception is envisaged for vessels

separate development, EU governments are also

engaged in securing the safety of ships or in a

unspecified ‘legal advice’ were set out in HMRC’s

considering whether to impose an investment

search-and-rescue operation.

tonnage tax manual in September 2009. These

ban on European companies operating in Syria’s

focused in particular on a reinterpretation of the

energy sector.”

Widely

disputed

changes

based

“Making up for this lost market of perhaps

their emulsions.

North American ECA

strategic and commercial management tests that are fundamental to qualification for the

Amendments to MARPOL Annex VI (Prevention

Shipowners Club expands in Singapore

of air pollution from ships) will formally establish

says: “HMRC’s reinterpretation of the rules

Growth in demand for its liability insurance cover

which emissions of sulphur oxides (SOx),

created a lack of certainty and sent completely

for small and specialist vessels of all types is

nitrogen oxides (NOx) and particulate matter

the wrong signals to international shipowners

cited as a major imperative behind Shipowners’

from ships will be subject to more stringent

who had relocated to the UK to take advantage

moves to expand its team of underwriters

controls than the limits that apply globally.

of its tonnage tax regime. It would therefore be

and claims handlers at its Singapore branch.

The ECA will take effect 12 months after the

excellent news if, as we understand to be the

Improved customer service to members and

amendments enter into force on 1 August

case, HMRC decides to consider the matter

their brokers based on local, time zone based

2012.

afresh, and to consult fully with the shipping

expertise is another goal of the expansion,

The entry into force will mean there are

industry. This would be seen as an indication

as is the development of new products and

currently three designated ECAs, the other two

that the government means to continue to act

simplification of existing cover more appropriate

being sulphur oxide ECAs: the Baltic Sea area,

fairly and reasonably, not least by protecting

to the market’s needs.

and the North Sea area.

tonnage tax regime. Sue Bill, a tax partner with Moore Stephens,

a North American Emission Control Area, in

shipowners who elected into the regime for a

In announcing a raft of new employees and

In July 2011, IMO adopted MARPOL

10-year period based on the original HMRC

some changes in the responsibility of personnel,

amendments to designate certain waters

rules and clearances.

Shipowners general manager of the Singapore

adjacent to the coasts of Puerto Rico (United

“While no formal change to HMRC’s position

branch, Steve Randall said: “Since opening our

States) and the Virgin Islands (United States)

has yet been confirmed, it is understood

Singapore branch in 2009, we have continued

as another ECA (United States Caribbean Sea

that any changes to the rules will now be

to provide our customers with a global service

ECA). The MARPOL amendments adopted in

assessed carefully. HMRC has warned that this

but on a local basis. This has allowed us to

July 2011 are expected to enter into force on 1

re-examination may not result in any change in

forge closer bonds with our members and

January 2013, with the new ECA taking effect

its position at all. But we are hopeful that HMRC

their brokers in the region. As a result, we are

12 months later.

and the UK government will let us have a more

seeing a constantly growing membership and

theBaltic Autumn 2011 www.thebaltic.com

Comment – Michael Grey

Captain, you are in BIG trouble! I

The choice, Captain, is yours!

t is sometimes not that easy, I was reflecting the other day, to export ethics and change

It has always seemed somewhat ironic that

the behaviour of people in far-off countries to

in a shipboard society where smoking is now

that reflecting our own mores. By this observa-

disapproved of and indeed on UK ships, illegal

tion I don’t mean that we should not attempt

within the accommodation, and the ships are

to remonstrate with peoples who eat dogs, or

‘dry’, with the crew toasting each other with

throw goats off tall towers to commemorate a

fruit juices and high-energy drinks at the weekly

local saint’s day. Rather I was thinking of the

barbecue, whole lockers full of the forbidden

difficulties of those aboard ships flying the Red

fags and booze have to be carried to satisfy the

Ensign now the UK Bribery Act (which came into

demands of corrupt officials.

effect at the beginning of July) as they wander

But try offering the head of the Customs in

about the world’s sealanes, inevitably mooring in

one of these places a warm handshake and a

ports where what the Act defines as “corruption”

small box of high fibre cereal or a large carton

is normalcy itself.

of fruit yoghurt and see how the progress of the

It is the poor old shipmaster who will bear

ship through that port is accelerated. Explain, in

the brunt of this attempt to clamp down on

simple terms, perhaps translated by the horrified

what is regarded as regular behaviour in oiling

local agent, that the British government has

the wheels of industry in such places. He is not

ruled the giving of gifts illegal and if the official

attempting to sell a squadron of fighter planes

has any problem with this he must take it up

and a 200-year servicing agreement to some

with the UK Solicitor-General, through the good

grim government, or ink in a deal to build 2,500

offices of the British consul.

miles of railway. He just wants to get his ship in

Will this polite and diplomatic approach bear

and out of a port as quickly as can be expected,

fruit in ports where officials pay other officials for

with the minimum of trouble, and to resume his

the jobs that enable them to go aboard visiting

voyage.

ships and shake down the master? Do fish fly aeroplanes? A man has to live, Captain!

The ‘customs of the port’ around the world are many and varied, but in many places the

Of course, it is important to try and stem

arrival of a deep-sea ship is an opportunity for

this corruption. But one doesn’t halt the tide

officialdom to have its palms greased. This may

single-handed. In the most outrageous places it

take the form, if one is reasonably fortunate, of

Michael Grey

is sometimes possible for shipping organisations like BIMCO to take up the matter at the highest

a ‘gift’ of a carton of Lucky Strike cigarettes, which have become a sort of currency of their

menaces for some small infraction of a local

level. A government to government approach

own, or perhaps a bottle of whatever spirits will

byelaw invented specifically for the purpose of

may damp down the level of extortion. But one

suitably slake the local taste buds. There may be

their enrichment.

wonders whether the UK Bribery Act will be an

a queue of officials half way down the gangway

“Captain – you are in big trouble!” The official

effective weapon to change behaviour at this

to obtain such largesse, this being regarded as

approaches rolling his eyes, revealing that the

sort of level. And what we don’t want to see is

the normal fee for doing what they are required.

inspection of the medicine locker has shown

shipmasters having to complete comprehensive

In many places we have seen a sort of

up a deficiency of a couple of aspirin, or that

records of what gifts were given to whom and

wage inflation taking place over the years and

the paperwork, or the cargo outturn, has fallen

where, to be submitted along with the hours of

the officials will now demand a dozen cartons

short of expectations. The ship, he says, will be

rest logs to the department’s inspector when

or more, or even a whole case of scotch to

arrested, the master will be conducted to the

the ship docks at a British port. Where will

ensure that the paperwork will be dealt with

local gaol, where home comforts are somewhat

this record end up? In the magistrate’s court,

expeditiously. And in the more corrupt parts of

limited and a bond will be set at half the value of

most likely, where the master will possibly find

the globe, the gift-giving and wheel-oiling has

the ship, and many months are likely to elapse

himself, perhaps along with a member of his

moved into the realms of extortion, with the

before even an appeal for bail is heard. Or .... a

management, having to answer Bribery Act

opportunities presented to customs and port

lesser offence can be dealt with by an “on the

charges. And don’t offer the magistrate a carton

state control officials to demand money with

spot fine” of $500 in greenbacks, sans receipt.

of Lucky Strike. He probably will not be amused.

theBaltic Autumn 2011 www.thebaltic.com

Technical Program ◦ Exhibition ◦ Sponsorship ◦ Advertising

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Tankers

Summertime blues Bad news for owners on costs.

ecent weeks have seen more gloom

Ocean Tankers is in dispute with Royal Bank of

He expects to see a further 12 to 18 months

for tanker owners, with many taking

Scotland over loans worth just under $329m

of growing over-capacity in the tanker market

substantial beatings on the New York

plus interest, and its vessel Stavrodromi was

and hopes this will peak at 7-8% in 2012, with

Stock Exchange, with share prices for

arrested in the US last month.

improved market conditions the following year.

tanker giant Frontline slumping to $6.88 by close

There was better news at Golar LNG last

Platou has recently been quoted in the press

on August 19, and with analysts predicting that

month when the company announced improved

as saying it sees no need for ship lay-ups, as

the company might have to put its newbuilding

second quarter figures. Revenues were $74

slow steaming means that owners could offset

programme on hold.

million in the second quarter as compared to

higher operating costs.

Euronav announced an agreement with

$67.5 million for the first quarter of 2011. “The

Samsung Heavy Industries of South-Korea that

improvement reflects the fact that the company’s

the deliveries of its newbuilding suezmaxes Hull

four modern vessels were all fully employed

1860, to be named Maria (2011 – 159,000 dwt),

during the quarter at improved rates, partly offset

and Hull 1893, to be named Captain Michael C.

by the effect of Golar Maria being in drydock,”

(2012 – 159,000 dwt), the remaining two of the

the company said in a statement.

iberian flag tanker owner Epps Shipping was sentenced to pay a $700,000 crimi-

nal penalty to include a $100,000 payment towards community service projects to reha-

four suezmax tankers owned in a 50-50 joint

In its latest financial report, analyst Global

bilitate and protect coral reefs in Guanica Bay,

venture with JM Maritime, will be postponed

Risk Management says it expected more oil

Puerto Rico for making false statement to the

to the second half of 2011 and first half of

price volatility to come. According to the report:

US Coast Guard over a “magic pipe” case.

2012, respectively. Similarly, the delivery of the

“Market memory is often very short, especially

“This sentence puts the international

newbuilding VLCC, Hull 1894, initially intended

where a huge number of speculators and

shipping industry on notice that there are

for 2011 has been postponed to the first half

computer trading are involved.

serious consequences for violations of the

“We therefore expect oil prices to increase in

Act to Prevent Pollution from Ships and

Fearnley reported recently: “There is growing

volatility over the coming months. As September

making false statements to the United States

concern among shipowners about how to

and October are months where equities and oil

Coast Guard,” Ignacia Moreno, Assistant

confront a market with rate levels that do not

usually move upwards, we recommend clients

Attorney General of the Justice Department’s

afford a living wage. One major VLCC owner is

to consider using the expected volatility to enter

Environment and Natural Resources Division

reported to have placed two modern VLCCs in

hedging agreements.

said.

of 2012.

warm lay-up, whilst others are refusing to accept

“In a longer timeframe we urge clients to

“For its criminal violations of the law, Epps

rate levels which do not cover operational

consider the rather large cash holdings laying

will pay a significant criminal penalty, serve five

costs. It remains to be seen if other owners

around in hedge funds and banks. At the first

years of probation, institute an environmental

will consider similar measures. At present, this

sign of the slightest turn in the underlying

compliance plan designed to prevent further

meagre resistance has had little impact, and the

economy, they will jump into oil once again,

violations, and will be subject to independent

supply of vessels continues to grossly exceed

sparking volatility.”

monitoring. Epps will also fund projects to

Erik Andersen of RS Platou Economic

protect coral reefs in Puerto Rico.” The case

Ocean Tankers issued a statement to the

Research has dismissed as “nonsense” the

involved the Carib Vision, which was involved

Cyprus Stock Exchange last month denying

suggestion that tanker over-capacity is as high

in carrying cargoes of molasses throughout

press reports that its tankers had been arrested

as it was in the 1970s.

the Caribbean.

the demand for them”.

by Lukoil for non payment of fuel bills. “At times,

The analyst calculates that over-capacity

however, there were detainments of ships by

during the first half of 2011 was of the order of

other creditors and it is likely to occur in the

6-7% compared to 20-30% “in most of the years

future, too, in order to claim the amounts due.”

between 1975 and 1987”.

theBaltic Autumn 2011 www.thebaltic.com

S&P

Automated valuation models: an appraisal Valuation of tanker prices is moving on.

Chris Rivlin

development in shipping. So what exactly is

range of more or less measurable factors, the

an AVM? How does it compete with traditional

broker has to use a blend of skill, intuition and

methods for valuing ships? What can be learnt

experience. Not surprisingly, ship valuation is

from AVMs in other fields?

often thought of as an art as much as a science.

Knowing how much a ship is worth is a vital

An AVM can be described as the application

part of maritime economics. Itâ&#x20AC;&#x2122;s necessary not

of mathematical techniques to determine the

just for the sale and purchase of vessels but

market value of an asset at a specific date

for many other reasons, including accounting,

without subsequent human intervention, along

loan security, investment reports and insurance.

with a measure of the accuracy of the derived

Valuations, sometimes called appraisals, are

figure. The notion of accuracy is particularly

usually carried out by shipbrokers. Typically they

intriguing as it suggests it may be possible to

are desktop valuations, meaning no physical

judge the quality of the valuation. There are

inspection of the vessel is carried out and the

two key components to an AVM â&#x20AC;&#x201C; a database

value is based on recorded details of the ship.

and a mathematical model incorporated in

Brokers normally assess the fair market value of

software. In an AVM for ships, the database

a ship, i.e. the amount it would sell for. This can

will contain details of the vessels. Ideally, this

be defined more elaborately as the best estimate

will comprise every currently registered ship

of the price that would be obtained at that time

of each type along with a fully comprehensive

in an armâ&#x20AC;&#x2122;s length transaction between a willing

set of their features, including the year of build,

buyer and willing seller for a vessel in sound

deadweight, yard, engine, survey record and

condition and free of charter.

so on. The database will need to hold a record

n May 2011, VesselsValue.com launched an

The method traditionally used to establish

of the date and price of every sale. It will also

online subscription service which provides an

the market value of a vessel is sometimes called

store a range of market information such as

instant valuation of tankers over 29,500 dwt

the comparable sales method. A small number

the published freight rates. VesselsValue.com

and bulkers over 20,000 dwt. At its heart is

of recent sales of the same type of ship are

uses a technique known as multiple regression,

an Automated Valuation Model (AVM). Dr Chris

selected. The value of the vessel is determined

which continually recalibrates the relationship

Rivlin considers the new tool.

by taking account of the effect on price of

between price, vessel specification and market

AVMs have been around for some time. They

variations in age, size or any other features

conditions, thereby enabling the latest value to

have been used to value domestic property for

between the sold ships and the vessel to be

be computed.

over 20 years. There are many websites that

valued, whilst at the same time considering the

A significant distinction between a broker

will give you the value of your second-hand

changing state of the market. There is no manual

valuation and an automated valuation will be

car. More recently, some aircraft valuations

explaining how this should be done. In order

the volume of data each is able to bring into

have become automated. But this is a new

to calculate the quantitative implications of a

play. When a broker carries out a valuation he

theBaltic Autumn 2011 www.thebaltic.com

S&P or she selects a few, hopefully similar, ships that have been sold recently. The ideal would be to find an identical sister ship that had just been sold. The broker may be limited by the quantity of information they can access from their desk but the real constraint is the human ability to process data. In contrast, an AVM would expect to retrieve and use the full details of every ship sold over an extended period of time. Two of the most commonly recognised xxxxxxxxxxxx

benefits of any AVM are speed and price. This

xxxxxxxxxxxx

is not surprising given that an AVM is virtually instantaneous and cost is often a function of

Alerts

time. For instance, the day or two an estate agent would need to visit the property, determine the value and prepare the paperwork is replaced by the few moments it takes to supply the address to the AVM and print out the report. Likewise, a shipbroker might expect to take a

• Create and manage automated e-mail alerts for ships and portfolios. • Alerts can be set for value or time. • Set value alerts to be notified when a ship or portfolio exceeds or falls below a specified value. • Set time based alerts to be notified at a particular time, day of the week or date of the month.

few hours to perform a formal valuation and

out multiple valuations at a fraction of the fee a

placed under pressure to raise or lower the

be available during working hours but an AVM

broker would charge.

figure. However, an automated valuation, arrived

can output the result whenever required. Of

Another key virtue of AVMs is their

at without human intervention, is purely a

course, the saving increases with the number

independence and objectivity. Human nature

function of predetermined data and rules. This

of valuations. Frequent broker valuations of a

being what it is, the same car is likely to be

means that the computed value will be the same

large portfolio of ships done by hand are a time

valued by the same person at a higher sum

whoever requests it. It will be entirely objective.

consuming and costly affair. Often they have to

for sale than for purchase. Similarly, when a

It’s all very well to list the advantages of

be substituted with simple book values or other

broker is asked to value a vessel, the purpose

AVMs, but if we want to arrive at a balanced

approximations which give a poor indication

of the valuation might influence the outcome. A

picture of how they may be applied to shipping

of the prices that would be reached on the

client may reject one valuation and commission

we need to consider the potential disadvantages

market. In contrast, an AVM can instantly carry

another. It is not unknown for brokers to be

as well. Two drawbacks of using AVMs to value property are widely cited. One is the quality of the data used by the AVM, which may be uneven in accuracy, availability and timeliness and may vary markedly by country and district. The other is the lack of a physical inspection, since it can reveal factual inaccuracies, the state of repair, improvements, adjacent buildings and so on that may significantly affect the value of a property. Turning to ships, it is certainly true that, as with any asset, the accuracy of the value arrived at will be highly dependent on the accuracy of the information used to calculate it – garbage in, garbage out! A range of data for many ships is available through classification societies and other public sources. Brokers will also have various resources and some companies have established their own databases. The situation facing an AVM provider is much the same, with the advantage that the numerous operations

V V Matrix • View a matrix of daily valuations for generic ship types by age and deadweight. • Ship types included are: VLCC, Suezmax, Aframax, LR1, MR, Capesize, Panamax bulker, Supramax and Handysize. • Ages include every year of build from resale to 25 year old. • Deadweights for different ages represent the most common deadweight for the age and type. For example, resale Capes are valued at 180k dwt while 25 year olds are valued at 140k dwt. • Standard ships features are used for the generic valuations. • Values are recalculated each day to represent most up to date market circumstances. • Calendar allows you to view VV Matrix values back to January 09

theBaltic Autumn 2011 www.thebaltic.com

they perform on their records to calculate values enables them to make comparisons, reveal outliers and improve the overall quality of the data. A broker may be privy to special information on a vessel provided by the owner or other party who asked for a valuation to be carried out, but unless this is also available for comparable ships it is of limited use. On balance then, data quality does not appear to be an issue and may in fact be improved by automation. For the valuation of a house, a physical

S&P inspection, internal and external, that has been performed by the appraiser and before the estimate is arrived at is, for the reasons given above, considered to be the gold standard. Any

Nyla 9513182 AFRAMAX TNKR DH

DWT 104,300 BLT 2011 Sumitomo, Japan

Ex Barley Mow

AVM for property will thereby

Barley Mow

10th Feb 11

48.2

necessarily fall short. In the case of shipping the circumstances

XXXXXXXXXXXXXXXX

are rather different. For reasons

XXXXXXXXXXXXXXXX

of cost and practicality, a broker

XXXXXXXXXXXXXXXX

valuation is a desktop valuation.

XXXXXXXXXXXXXXXX

It is true that a serious buyer

XXXXXXXXXXXXXXXX

will almost always request an

XXXXXXXXXXXXXXXX

inspection although this would only occur if the ship was to XXXXXXXXXXXXXXXXXX

be bought and, as mentioned

XXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXX

earlier, valuations are required for many other reasons. But, most tellingly, the inspection of the

Ship valuation screen

vessel will occur, if at all, after the certified valuation and, therefore, cannot affect

shipyard is not that different from another. For

valuation should be independent of the sale, the

the figure arrived at. So in this respect too, the

these reasons, most of what may vary on a ship

estimate should be obtained immediately prior

situation for a broker or for an AVM valuing a ship

by ship basis can in principle be determined

to the sale date, and as many sales as possible

is much the same.

from the data records for that vessel.

should be included. However, to perform such

There are other reasons why an inspection

The appraisal can be summed up so far.

an exercise with broker valuations looks to be

can only contribute so much. All ships have

The widely accepted benefits of AVMs, namely

extraordinarily difficult. Selecting an unbiased

to undergo a dry dock survey every five years,

high speed, low cost and objectivity, apply to

sample of such valuations is hardly likely to be

and an additional survey every two-and-a-

ships; however, two widely cited drawbacks,

possible. Carrying out valuations on ships that

half years when older, with required repairs

ie low quality data and lack of an inspection,

were about to be sold would necessitate seeing

being carried out in order to stay ‘in class’,

it seems do not. This leads us on to consider

into the future (in order to know which will be

ie remain registered to transport cargo. It is

what many would argue is the ultimate test

sold!) And valuing ships after sale is no test at

for this reason that the accepted definition

for any valuation system of whatever kind – its

all. One idea that has been tried is to test the

of market value, mentioned earlier, specifies

accuracy. Intuition may suggest to many that a

accuracy of published values of generic ships.

that the vessel is in sound condition. It is also

broker will outperform a computer programme.

Unfortunately, this greatly reduces the number of

important to appreciate that, in contrast to many

But in business the proof of the pudding is in

ships as only newbuilds, five-year-olds, 10-year-

other assets, merchant ships within a particular

the eating.

olds, etc can be tested, it ignores the specific

type are relatively homogenous. A house, for

Market value is essentially an estimation of

features of individual ships which clearly affect

instance, can undergo changes which make it

price. So the obvious way to test the accuracy

their value and it leaves unresolved how the

unrecognisable and unique; but one five-year-

of any means of valuation is to compare the

sample should be selected.

old aframax of 105,000 dwt built at a major

estimate with the price. For the test to be fair the

The situation for an AVM is entirely different. They are characterised by their capacity to measure the accuracy of their valuations. VesselsValue.com values the entire fleet of tankers and bulkers on a daily basis. This enables it to compare the price for each recorded sale with the market value calculated on the day before the sale. Figure 1 shows just how closely their values match this year’s prices. Although we can assess the accuracy of automated valuations of ships, it appears we cannot do the same for broker valuations. Could this mean that when it comes to ships, an AVM might be more accurate than a broker? It makes you wonder. Chris Rivlin is a Professorial Fellow at the

Figure 1. Distribution of valuation differences (defined as valuation minus sale price) of all

University of Salford and an academic consultant

recorded sales from 1 January to 25 July 2011, in US$ millions (left) and as a percentage

for VesselsValue.com. He has a special interest

of sale price (right). Source: VesselsValue.com.

in Information Design.

theBaltic Autumn 2011 www.thebaltic.com

BIMCO

Radioactive to Recycling Laying up vessels, and selling them for green recycling were the focus of two new contracts agreed in June, Pernille Kærvad Jacobsen reports.

Committee

following the situation at the Fukushima nuclear

recycling yards who share the same common

met in June 2011 in Vancouver,

plant, and to counter the circulation of potentially

objective of wanting ships recycled in an

British Columbia, and at the meeting

onerous ‘home-made’ radiation clauses, which

environmentally safe and socially responsible

approved two newly developed stand-

were generally framed largely in favour of the

manner.

IMCO’s

Documentary

ard contracts: an agreement for the laying up of

Even though a small but growing number of

party that drafted them. and

owners are willing to take the green route when

the sale of vessels for green recycling, named

charterers with a balanced contractual solution

disposing of their older ships, so far no existing

RECYCLECON.

which addresses the potential risk of exposure

contracts used in the sale of vessels for recycling

to high levels of radioactivity based on thresholds

fit the bill. The newly adopted contract, code

established by competent authorities.

named RECYCLECON, is intended to meet

vessels, named LAYUPMAN, and a contract for

In addition, a suite of bunker clauses for time charterparties was adopted. The documentary

The

clause

provides

shipowners

work programme remains substantial, including

Since the publication of the clause, a few

this demand by providing owners and recycling

a number of large projects such as the

issues have emerged and these will be addressed

yards with a contractual platform that reflects the

development of a standard pooling agreement

in an early revision during late summer/autumn

principles of the Hong Kong Convention.

for dry and liquid bulk cargoes carried on a

2011. Among issues to be considered is who

The agreement is designed for use during

tramp basis, a joint BIMCO and Norwegian

should bear the risk of loading radioactive

the interim period leading up to the coming into

Shipbrokers Association revision of SALEFORM

ballast water and how to deal with the fact that

force of the Hong Kong Convention and is due

1993, and slow/economical steaming clauses

the radioactive level of hydrocarbons (either

for revision once the convention has entered

for both time charterparties and voyage

cargo or bunkers) may naturally be higher than

into force. The sub-committee, appointed to

charterparties. Furthermore, work has begun

the background radiation levels in the local

tackle the difficult task of reflecting the Hong

on an OFAC (US Office of Foreign Nationals)

area. Furthermore, the need for a similar clause

Kong Convention in a commercial agreement,

compliance clause, and early revisions of the

for voyage charterparties and shipmanagement

believes that RECYCLECON will provide a useful

radioactivity risk clause for time charterparties

agreements will be discussed.

stepping stone in implementing Convention

and the EU advance cargo declaration clauses

The clause, including Special Circular no. 3

requirements.

of 28 April 2011, can be downloaded free of

RECYCLECON, accompanied by explanatory

charge from BIMCO’s website at www.bimco.

notes, will soon be published on the BIMCO

org.

website.

RECYCLECON: green recycling contract

LAYUPMAN contract

Radioactivity risk clause for time charterparties

The initiative to develop a green recycling

year and was initiated by the Documentary

contract stems from the anticipated entering into

Committee in view of the increasing number of

In April 2011, BIMCO published the radioactivity

force of the IMO Hong Kong (Ship Recycling)

vessel lay-ups and in the absence of any existing

risk clause for time charterparties. This clause

Convention. The aim of the new contract is to

standard agreement. The sub-committee, which

was developed in response to industry demand

provide a specialised agreement for owners and

includes representatives from lay-up specialists

are underway. Finally, two new projects have been initiated: a service contract for offshore wind farm maintenance vessels and a time charterparty for roll-on-roll-off (ro-ro) vessels.

theBaltic Autumn 2011 www.thebaltic.com

This project has been ongoing for only one

BIMCO Wilhelmsen Ship Management, Maersk Vessel Management and International Shipcare, has been working at full throttle to complete its task, and the new contract was approved by BIMCO’s Documentary Committee in June 2011. The new contract, code named LAYUPMAN, is designed for the laying up of vessels using the services of third party lay-up managers, who act on behalf of the owners to lease a suitable mooring from port authorities, as well as providing physical lay-up support services such as watchmen and monitoring, and maintenance functions. LAYUPMAN is modelled on the widely used SHIPMAN agreement and applies the same principles of agency and co-assurance. LAYUPMAN, accompanied by explanatory notes, will soon be published on the BIMCO website.

Bunker clauses for time charterparties Also adopted at the June meeting of the Documentary Committee was a suite of bunker clauses for time charterparties. The intention behind this project is to provide the industry with a pick list of bunker related clauses that can be incorporated as appropriate to supplement whatever bunker provisions are found in older standard forms of timecharter. The clauses cover a variety of topics, ranging from sampling and testing to low-sulphur fuel requirements.

The aim is to complete the revision of SALEFORM

be openly discussed. In due course, BIMCO will

1993 by autumn 2011.

make the draft publicly available to the industry for comments. It is expected that this project will

SALEFORM 1993

be finalised by November 2011.

Following industry consultation, BIMCO and the

Pooling Agreement

Norwegian Shipbrokers’ Association (NSA) have

The BIMCO Standard Pooling Agreement is

undertaken a modest revision of the industry

now close to completion. The working group

OFAC compliance clause

standard international contract for the sale and

has completed a full review of the agreement,

The use of so-called OFAC clauses in maritime

purchase of second-hand vessels, SALEFORM

which was well received by the Documentary

contracts, particularly those involving a US

1993. The objective of the revision is to bring

Committee in June 2011, and the drafting

entity, is increasing. Such clauses often place a

SALEFORM in line with present commercial and

group is currently working on the underlying

considerable burden of compliance on owners

legal requirements in the sale and purchase of

charterparties that will be used by the pool

and charterers, and the intention is to draft a

second-hand tonnage, while maintaining the

managers to charter in pool vessels from the

standard wording that appropriately addresses

fundamental principles of the contract.

participants. The purpose of the project is to

the application of OFAC and similar legislation in

To maintain the commercial flexibility as a

develop a voluntary and negotiable standard

other countries.

platform agreement that SALEFORM enjoys,

agreement for tramp shipping pools. It is being

BIMCO will be working with the International

the drafting team has been careful not to upset

drafted as a standard form that can be used

Group of P&I Clubs to produce this clause and

the current balance of the form or to introduce

in most jurisdictions with competition laws

drafting work has now begun. It is expected

provisions which may be considered overly

because many states have used European

that work on this clause will be completed in

prescriptive. The changes proposed are chiefly

competition laws as a model for their own

November 2011.

concerned with incorporating commonly made

system.

amendments and adding greater clarity to some

BIMCO plans to liaise with ECSA to consult

The current draft was well received by the

authority, DGCOMP, on the agreement. It is

Standard timecharter guarantee

committee and it has been agreed that a series

hoped that consultation with DGCOMP will help

This project of developing a standard guarantee

of seminars in Asia and Europe should be

in ensuring transparency for the project, and that

for timecharterers’ performance has been

organised to explain the proposed changes to

any issues the drafters may have in respect of

initiated due to it becoming increasingly common

the industry and to encourage early feedback.

compliance with the guidelines on pooling can

for owners to require charterers to provide some

of the more loosely worded provisions.

with the European Commission’s competition

theBaltic Autumn 2011 www.thebaltic.com

BIMCO The increase in the construction of offshore wind farms in various locations around the world has given rise to a request for the development of a standard service contract for the vessels used to maintain the wind farms. At present, many service vessel operators use an amended version of SUPPLYTIME, which is not an ideal contractual platform for this type of operation because of the knock-for-knock liability provisions. The new contract will borrow from the structure of SUPPLYTIME but will be tailored to specifically address the needs of this specialised sector. Work on the project will begin during the summer and service vessel operators and their clients will be invited to participate. Regarding ro-ro vessels, there is currently no standard form available to the industry for the timechartering of such vessels, for which reason owners and charterers commonly rely on heavily amended versions of general purpose time charterparties or charterparties developed with a different trade in mind. The intention is to develop a time charterparty to suit the special conditions of ro-ro vessels. A subcommittee of experts involved in the ro-ro trade will be formed shortly with the aim to have a first draft ready for consideration by the Documentary Committee in November 2011. Documentary Committee in Vancouver

Future work programme form of written guarantee of performance. Such

arrival’ whereby the key stakeholders agree to

Further to the above projects, BIMCO is also

guarantees have to be carefully worded to

a fixed discharging date and adjust the speed

working on developing a clause relating to the

ensure that they can be called on by owners

of the laden vessel accordingly. To ensure

apportionment of costs and responsibilities with

in the event the charterers fail to meet their

that every aspect of this challenging task is

regards to bottom fouling and a recommended

contractual obligations. Based on input received

properly considered, the working group consists

NAABSA (Not Always Afloat But Safely

from the industry and the committee, the drafting

of industry experts with technical, commercial

Aground) wording to take into consideration

group has amended the guarantee to cover only

and legal backgrounds.

issues of indemnity for loss or damage arising

The clauses will be designed to reflect the

out of lying aground. The NAABSA provision

fact that there may well be sound commercial

is additional wording to be added to the berth

A draft guarantee was presented to the

reasons to reduce speed, such as reducing

provision of charterparties. Finally, it has also

Documentary Committee on 6 June 2011 and it

bunker consumption/fuel costs and, possibly,

been decided that the EU advance cargo

is expected that a final version of the document

to increase demand for tonnage. It will also

declaration clauses for time charterparties

will be presented to the committee for adoption

consider issues such as due despatch, deviation

and voyage charterparties should undergo an

in November 2011.

and vessel performance warranties. Not least,

early revision. The clauses will be reviewed to

consideration will be given to the use of slow

take into account export requirements and to

steaming as part of company environmental

incorporate transhipment provisions.

the charterer’s payment responsibilities under the timecharter.

Slow/economical steaming clauses

policies to help reduce CO2 emissions.

The object of this highly topical project is to

clauses will be finalised in November 2011.

The working group expects that work on the

develop two suitable charterparty provisions for general industry use, one for time charterparties and one for voyage charterparties. It is the

New projects

ambition to address slow steaming for economic

Following the adoption of LAYUPMAN and

purposes (fuel saving and capacity building)

RECYCLECON, BIMCO has undertaken two

and for environmental purposes (emission

entirely new projects: development of a service

control). Furthermore, the slow steaming

contract for offshore wind farm maintenance

Pernille Kærvad Jacobsen

clause for voyage charterparties will embrace

vessels and a time charterparty for ro-ro

Documentary Affairs Officer

other slow steaming initiatives such as ‘virtual

vessels.

BIMCO

theBaltic Autumn 2011 www.thebaltic.com

Dry Bulk

Dry cargo woes Some operators fear for capesize spot cargoes.

uly saw the arrival of the first of the

Bunge filing

Demand evidently continues to be centred

world’s largest ore carrier to discharge

A filing by commodities giant Bunge against

on China, and to some extent India. Coal and

in Italy, but not everyone was happy to

COSCO for unpaid charter hire for the Coal

iron ore imports to China are clearly price

see the new vessel.

Gypsy was bound to be greeted nervously by

sensitive, and while coal imports to India are set

Vale Brasil may have won the Nor-Shipping

the dry cargo market. In a civil action against

to increase strongly, India is “in the wrong place”,

green award for reducing emissions, but many

Cosco Bulk Carrier Company, in the US District

according to Mr Svenning.

market observers are more concerned about

Court for the Eastern District of Louisiana,

Commenting on vessel values, Dr Adam

the effect on freight rates at a time when there

Bunge allege that COSCO Bulk Carrier had

Kent of Maritime Strategies International, told

is already over-capacity in the market.

failed to pay charter hire worth $294 million in

the conference he believed “Yard forward cover

accordance with the timecharter agreement.

will fall below two years by 2013 and yard costs

“With our own fleet and chartered ships

will support newbuilding prices in the near term”.

we reduce exposure to volatility in the freight

Bunge had been seeking an attachment

market. Volatility doesn’t only affect freight

on the cargo vessel Yu Lan Hai, which is to be

Weakening bulker rates will add additional

costs but also the price of ore. As the new

found within the jurisdiction of the court under

pressure to second-hand values, he said and

ships start to operate, stability of freight and

Rule B regulations. Cosco Bulk Carriers’ Jia Li

“prices for smaller vessel will remain relatively

ore will become even greater, helping Vale and

Hai was the subject of an arrest order last month

higher than larger vessels, although capesize

its steel industry clients,” said Vale executive

in a $2.7million dispute with Monaco-based

bulker prices have already felt much of the pain”.

director of marketing, sales and strategy, José

Classic Maritime.

Commenting on the market for iron ore, Dr Plamen Natzkoff of Ronly said that the annual

Carlos Martins, in July.

benchmark system allowed for a dislocation

Vale has 12 very large ore carriers with capacity of 400,000 tons from the Rongsheng

Fleet growth

between market fundamentals and price, and

Shipbuilding and Heavy Industries shipyard

Strong fleet growth looks set to continue

steel mills effectively had a free option to buy

in China. These vessels, being built at the

through 2012 as far as the dry bulk segment is

cheap iron ore in tight markets and default on

Chinese shipyard, have a total investment

concerned, and according to Sverre Svenning,

annual benchmark contracts when spot market

of $1.6 billion. Besides 19 very large ore

director with Fearnley Consultants, with the

price was lower. Iron ore producers, therefore,

carriers, Vale will also have 16 other ships

freight market remaining “subdued” for the next

had strong incentives to move closer to spot-

with the same dimensions, which will operate

18-24 months.

based pricing.

exclusively for the company under long-term

Mr Svenning told a recent Dry Bulk Shipping

Tight markets have led to increased pricing

contracts signed with shipowner partners.

Insight conference that “asset values were

power of iron ore producers; since January

These 35 ships will be delivered between 2011

expected to fall considerably” and Fearnleys did

2009, iron ore price has risen 117%, while steel

and 2013.

not anticipate an upturn before the end of 2013.

price has risen 25%, he told the conference.

With Vale’s new ships, the equivalent of two

While the seasonal downturn would, he

The change in pricing mechanism has been

capesizes, there has been widespread criticism

predicted, be “very negative” for supramax and

vital in allowing market fundamentals to be

of their entry into the market amid fears that

panamax tonnage, longer term demand growth

reflected in the price, and steel mills have lost

spot cargoes for capesizes would dry up if they

was promising, with the caveat that it was

pricing power, according to Dr Natzkoff.

were deployed on the China-Brazil run. Given

commodity price sensitive. He was speaking

Ron Beveridge of Ronly gave his opinion

the number of new capesizes coming into the

at an event organised by Navigate Events in

that the coal industry was going through

market, this is a serious concern.

London.

changes – some are short term, including price

theBaltic Autumn 2011 www.thebaltic.com

Dry Bulk arbitrage, and others longer term, including

time. This can only be positive news (one of the

sub-suppliers remained in distress and caused

Chinese import levels, US exports and the rise

few cases) for the troubled freight market.”

global disruption. As a result, a high number

of Mongolia as a source of supply. There is

ICAP also noted that since the lifting of

of vessels dedicated to the trading in and out

much conflict between large Australian miners

the wheat export ban in Russia, “we have

of Japan became open in the market, thereby

and their big Japanese/Korean customers, he

seen an increase in the supply of wheat to the

affecting other trades.

said.

world markets. However, this grain is old crop,

“The signs of a stronger grain season at

“This is causing the latter to look elsewhere

coming from the 2010 strategic reserves, and

the end of the first quarter of 2011 did not

for coal, and diversify their sources. Can they cut

is therefore selling at lower prices, reflecting its

materialise due to a higher number of vessels

Australia out of the mix? No. They are simply too

lower quality. We have seen an increase in grain

ballasting from the Far East to South America.

dependent on Australian coal. They can reduce

flows from the Black Sea to the Far East where

The number of newbuilding deliveries in the

dependence though.

demand for grain, including that of lower quality,

second quarter of 2011 continued at high levels

Australia depends on the Far East to sell their

remains high. The current freight rate differential

for handymax and panamax, with 83 and 73

material, and would struggle to diversify their

between USG-Far East and Black Sea-Far East

vessels, respectively. This corresponds to a

client base. They depend on each other.”

still favours exports from the Black Sea area.

global bulk fleet growth of roughly 4% in the

According to ICAP in July, the dry bulk

However, once the new crop from the Black

second quarter of 2011.

fleet saw another month of relatively steady

Sea comes onto the market, we do expect a

TORM’s panamax TCE earnings were USD/

numbers of newbuilding deliveries, with the

convergence of the FOB prices, making US

day 16,015 in the second quarter of 2011 or

number of capesize deliveries falling for the

grains more attractive once again. This suggests

14% below the second quarter of 2010. The

second month in a row. “Such slowdown of

that longer haul trades and larger stems will lend

realised second quarter 2011 TCE earnings

the rate of deliveries, many of which have

much needed support to the freight market”.

for handymax were USD/day 12,554, which

been ordered at the top of the market, can be

is slightly up compared to the first quarter of

partially explained by poor spot market earnings

2011, the company said.

and therefore strong incentives to push back

TORM’S take

The bulk division’s results were negatively

ship deliveries as much as possible. This is no

Commenting on its second quarter performance,

affected by market conditions in the second

easy task, bearing in mind the various interests

Danish owners TORM said: “The impact of the

quarter of 2011, as TORM’s bulk fleet on short-

involved – investors, financiers and shipbuilders.

Japanese earthquake had a negative influence

term contracts was increased in anticipation of

High slippage, however, is part of the market

on the market in the second quarter of 2011 and

a seasonal upturn.

reality and it looks like it is here to stay for some

affected the global production, as Japanese

Cargo loading operations

theBaltic Autumn 2011 www.thebaltic.com

Corporate viewpoint Canfornav

Canfornav F

lexibility, responsibility and accountabil-

and Canfornav has been working closely with

easy; we have endured many hardships, but

ity are Canfornav trademarks that have

environmental groups, as well as government

with the hands-on approach of the owners,

stood us in good stead over the years

organisations, to improve and minimise our

the diligence and hard work of the employees,

and established us as an important

environmental footprint, and to set standards,

some solid decisions and a bit of luck, it has

player in the Baltic, Atlantic, South America,

especially in environmentally sensitive areas

put us in a good strategic position for many

the East, West and US Gulf coasts, and the

such as the St Lawrence Seaway and the

years to come. We are committed to handysize

Great Lakes.

Great Lakes. Canfornav has partnered with

tonnage for the future and basically operate as

Today, Canfornav operates 31 vessels, with

Ducks Unlimited, the leading conservation

‘old style’ shipowners, concentrating foremost

an average age of three-four years, 25 of

organisation in Canada, to help ensure that

on contract movement within the Great Lakes/

which are owned; annually they carry some 6.5

healthy wetland habitat and enhanced water

Atlantic and West Coast market.

million tons of cargo. We have two supermaxes

resources are guaranteed far into the future.

delivering this year and also six 33,000 dwt bulk

We are members of the Green Marine Initiative,

Canfornav

carriers on order for delivery between October

which requires environmental performance

800 René-Lévesque Blvd. West, Suite 2300

2011 and October 2012, which will increase

improvements on a year to year basis, with

Montreal, Québec

the fleet to a total of 39 vessels with 33 owned.

results being independently audited and verified.

H3B 1X9

This gives us a credible and transparent means

Canada

of assessing our environmental performance.

Tel: +1 514 284 9193

The

company

instituted

Quality

Management program over 12 years ago and is ISO 9001 (2008) certified. With a growing

We are proud to achieve 35 years as a

fleet comes responsibility for the environment,

company this year. It has not always been

Saint Lawrence River, Montreal

theBaltic Autumn 2011 www.thebaltic.com

Fax: +1 514 499 1030 www.canfornav.com

Heavy lift, project cargo and offshore

Offshore investment New contracts but concern for the future.

n spite of market conditions, recent months

Songa finance

more than 40,000 ft (12,200 m).

have seen a number of new contracts for

That said, in an interview with Bloomberg

Songa Offshore says the company has finalised

offshore installations, although there are signs

there were suggestions that Maersk Drilling

a new bank arrangement for $420 million.

that investment will be coming down a gear.

might put a brake on further expansion because

The new facility has a repayment profile of 8.5

of rising costs of building platforms.

years and will be used to finance the delivery of

Maersk Drilling is to build two ultra deep-water

drillships at Samsung Heavy Industries in South

Hemmingsen was quoted as saying: “We

the ultra deep-water semi-submersible Songa

Korea, scheduled for delivery in the second and

see newbuilding orders being at a fairly high

Eclipse, currently ready for delivery from Jurong

third quarters of 2014. The total project cost

price and we will certainly not go out and order

shipyard in Singapore.

for the two drillships is approximately US$1.3

something tomorrow or in the near future. We

“Additionally, Songa has received a firm offer

billion, which includes a turnkey contract with

would have to watch the market; they’re very

on a bank facility of $100 million. This facility will

the yard, owner furnished equipment, project

expensive, currently.” The company has been

be used to part-finance the first instalment on

management, commissioning, start-up costs,

watching for acquisition opportunities, he told

the two semi-submersibles currently on order

and capitalised interest. Simultaneously, Maersk

Bloomberg.

from Deawoo Shipbuilding & Marine Engineering

Drilling has obtained a new option for the construction of two additional drillships.

“I would say that while valuations may

Co,” the company said in a statement.

have been low, the end purchase prices are

“We have an ambition of becoming one

not particularly low,” he said. “We have been

of the leading drilling contractors in the ultra

following the markets and have not found that

Dockwise deals

deep-water segment and this order is another

it was the right thing for us to pursue corporate

Dockwise has signed contracts totalling $42

important step in taking a bigger share of

acquisitions at this time,” he added.

million for transportation of dredging equipment

this attractive market segment,” Maersk Drilling

Another recent investment by Maersk

to Spain and Uruguay, a power barge and jack-

ceo Claus Hemmingsen, said at the time of

Drilling and Maersk Training includes a state-

up barges to the Dominican Republic and Egypt,

the announcement.

of-the-art

Drilling

jack-up rigs to Gabon, Mexico and Trinidad,

commitment to grow our rig fleet, enabling us

Systems (UK) Ltd. The fully immersive drilling

a semi-submersible to Vietnam and three

to serve our customers in the ultra deep-water

simulator will provide a real-life experience

contracts pertaining to the transportation of

segment on a more regular basis.” So far Maersk

and will be customised to incorporate the

multiple barges and tugs to Brazil and Colombia.

Drilling has invested $3.8 billion in two new jack-

specific designs of Maersk Drilling’s latest

Dockwise has also been awarded a contract

up rigs and four drillships.

newbuilding series and existing deepwater

on the Chevron-operated Gorgon Project

“The order reflects our

drilling

simulator

from

Hemmingsen sees a strong market for deep-

semis. The drilling simulator is expected to

on Barrow Island, off the coast of Western

water drilling rigs as the global demand for oil

be fully operational by mid 2012 and will be

Australia. The contract will start in early 2012

is increasing while at the same time production

housed in a purpose-built complex at Maersk

and encompasses the transport of onshore

from mature fields is declining.

Training in Svendborg.

LNG modules. Dockwise’s Mighty Servant III has

“This means that about six times the current

“We have one of the youngest and most

Saudi production must be brought on stream

advanced fleets of drilling rigs in the world. With

over the next 20-25 years, which will drive a solid

highly advanced equipment comes the need

André Goedée, chief executive officer of

growth in the demand for drilling services. The

for more advanced training and competency

Dockwise, commented: “Operating activity

main part of this growth will take place in frontier

assessment to ensure safe operations, which

remained subdued in the second quarter of 2011,

areas such as deep water,” he says.

is our top priority,” Hemmingsen says. “This

reflecting industry-wide conditions. However,

The two drillships will be of similar design to

simulator provides the most sophisticated and

compared to the first quarter, Dockwise noted

the two Maersk Drilling orders from Samsung in

individualised training available in the market,

a further upturn in enquiries and bookings

April 2011. The 228-metre long drillships will be

and will enable our crew to train specifically in

for spot market projects, be it still on low

able to operate at water depths up to 12,000 ft

the surroundings they will meet when going to

cycle pricing levels. We continue to be actively

(3,650 m) and will be capable of drilling wells of

the rig.”

engaged in tendering for longer term projects.

theBaltic Autumn 2011 www.thebaltic.com

been assigned to the Gorgon Project. The value of the contract is approximately $26.7 million.

Heavy lift, project cargo and offshore Gulf. In addition, relocating

Lifting activity

two rigs for term work and at attractive market rates serves our strategic desire to increase our long- term presence in this active oil and gas region.” Keppel

Shipyard

Ltd

(Keppel Shipyard) is on track

complete

the

modification and upgrading works on FPSO OSX-1, the first floating production storage

and

offloading

(FPSO) unit for OSX Brasil S.A. (OSX). C h a r t e re d OGX

Petroleo

to e

Gas

Participacoes S.A. (OGX), FPSO

OSX-1

will

deployed in the Waimea field, in Campos Basin, offshore Brazil. This project will deliver OGX’s first oil, just four years after the company

was

founded.

Production is expected to commence in the last quarter of this year.

In that respect, the Gorgon award is considered

the share of project cargo in the overall cargo

another important ingredient in improving our

mix of the vessels, which had deteriorated to a

Sponsor Cristina Pinto named the vessel

long-term backlog.”

ratio of 80% bulk and 20% project cargo under

today in the presence of Joao Ziccardi Navajas,

Beluga’s operations, he said.

Minister Counsellor at the Embassy of Brazil

The Gorgon Project is operated by an

in Singapore, and Reinaldo Belotti, production

Australian subsidiary of Chevron and is a joint

The commercial management agreement

venture of the Australian subsidiaries of Chevron

is for an initial 12-month period and will be

(approximately 47%), ExxonMobil (25%) and

renewed automatically if certain earnings targets

Carlos Bellot, director of engineering, leasing

Shell (25 %), Osaka Gas (1.25%), Tokyo Gas

are met. Ownership’s Thomas Wenzel said

and operations of OSX, said: “FPSO OSX-1 is

(1%) and Chubu Electric Power (0.42%).

German Project Carriers might place more

our first unit, and was developed to meet OGX´s

vessels with Scan-Trans pending contract

demand. With a strong track record in FPSO

performance and approval from other consortia

projects, Keppel Shipyard is the choice yard

Scan-Trans

members. German Project Carriers represents

for the modification and upgrading of FPSO

DANISH project carrier Scan-Trans Worldwide

23 multi-purpose vessels in total, most of which

OSX-1. The unit was accorded dedicated and

has won commercial management contracts

are currently chartered out on period.

professional services, and I am confident that it

director of OGX.

for six German multi-purpose vessels formerly

will be an asset to OGX and the Brazil’s oil and

operated by Beluga Shipping. The four 12,700

gas industry.”

dwt E/F class vessels – Elegance, Efficiency,

Seadrill

Keppel Shipyard’s work scope on FPSO

Federation and Foundation, and two 17,000

Seadrill has been awarded two new contracts

OSX-1 includes fabricating, modifying and

dwt tweendeckers – Generation and Gravitation

by KJO (AL-Khafji Joint Operations) in the

upgrading the topside process modules. The

– will be operated in the project and breakbulk

joint development zone between the Kingdom

yard had partnered sister company DPS (Bristol)

markets alongside its existing fleet of 30 smaller

of Saudi Arabia and Kuwait for the jack-up

Ltd to undertake detailed engineering and

multi-purpose and bulk carriers. The new

rigs West Triton and Offshore Resolute. The

procurement work for the topside modules.

contract will increase its total operated capacity

assignments, which will commence in direct

Keppel FELS Limited has secured a repeat

by over 40% to 285,000 dwt, according to the

continuation of their current contracts in South

order from Transocean Offshore Deepwater

company. The expansion will take the Danish

East Asia, are each for a firm period of three

Holdings Ltd, a subsidiary of Transocean Ltd for

group “into a whole different league”, said Scan-

years plus the time required to mobilise to the

US$195 million.

Trans chief executive Kim Vestergaard-Hansen.

Arabian Gulf. Each contract also includes an

Following its order of two jack-up rigs from

option for KJO to extend the term for a further

Keppel FELS on 17 February 2011, Transocean

year.

is exercising its option to build another high

The ships are owned and technically managed by the members of a consortium named German Project Carriers, including Hamburg

Alf Thorkildsen, chief executive at Seadrill

KG houses Ownership and ElbeEmissionshaus.

Management,

Ownership’s managing director Thomas Wenzel

contracts will strengthen the relationship with

said the consortium expects Scan-Trans to lift

KJO, one of the key customers in the Arabian

commented:

“These

new

theBaltic Autumn 2011 www.thebaltic.com

specification jack-up rig based on the KFELS Super B Class Bigfoot design for delivery in Q3 2013.

Corporate viewpoint Zamil Offshore

News Update Z

amil Offshore is known in the Middle East and Arabian Gulf as a leading player in the offshore industry. The company currently

operates a fleet of 53 vessels, of which 46 are owned and seven chartered. Its plan to expand its fleet includes newbuildings, partnership with other offshore vessel owners, and acquisition of new vessels. It has started an aggressive plan to expand regionally and into other areas such as west of India, South East Asia and west of Africa. Last April Zamil re-activated its branch in Singapore with the

Hassan Abouraya

intention of using it to spearhead the company’s global aspirations. Zamil Offshore shipbuilding division has recently completed and delivered its new building M/V Zamil-63, the largest vessel ever built in Saudi Arabia, to work for Saudi Aramco, and has launched its sister MV Zamil-64. These 1,500 dwt new vessels are multipurpose DP-2 offshore AHTSS/diving support/ROV support/oil recovery support with moon pool, and 7,200 horsepower/81 T-BP/18 ton bow thrusters. The vessels are designed to meet the highest international standards.

Zamil’s

shipyard

building

program includes nine more vessels under construction.

NEW SHIPBUILDING/ SHIP REPAIR FACILITY Zamil’s success in establishing shipbuilding in Saudi Arabia has whetted its appetite for expanding its shipbuilding and ship repair facilities. The design of the new shipyard is complete and the construction work is expected to commence during the last quarter of this year. The total budget allocated for this expansion alone is almost

control, and acquisition of lift barges for use in

$130million.

the maintenance of the platforms and installation of wind farms.

MORE DIVERSIFICATION AND EXPANSION

to the south-east Asian offshore sectors, it is

Zamil is gearing up for more diversification in

confident that there will also be substantially

shipbuilding and is preparing for building fast

more work coming its way in the Middle East.

P. O. Box 1922, Khobar 31952, Kingdom of

patrol boats and naval vessels with US and

Furthermore, Saudi Aramco is growing its

Saudi Arabia.

European partners. At the same time, it is

offshore activities to the tune of about $200bn

Tel:+966 3 882 2494 Ext 213

working for more diversification in the scope of

in the Middle East Gulf and the Red Sea,

Fax: +966 3 882 3235

its rendered services to include drilling, oil spill

presenting plenty more opportunities.

Web: www.zamiloffshore.com

While Zamil expands regionally and eventually

theBaltic Autumn 2011 www.thebaltic.com

Towage and salvage

Steel to replace Teare as appeal arbitrator It is all change for salvage arbitration at the moment with a new head of branch and a new appeal arbitrator.

ir David Steel has been appointed

QC, who is a member of the salvage arbitration

as the next Lloyd’s Open Form (LOF)

panel, said: “Good news? Of course.

appeal arbitrator to hear salvage

was much admired as editor of two editions

David

cases arising under the Lloyd’s Form

of Kennedy on Salvage, so knows as much

of Salvage Agreement. In October he succeeds

as anyone about salvage law and salvage

Nigel Teare, who has held the position since

arbitration practice: he rewrote the 5th edition

2009.

boldly and intelligibly (including, controversially,

Sir David is the current Admiralty judge

‘publication’ of a table of awards data which

who hears appeals to the Court from LOF

infuriated the then appeal arbitrator, Gerald

arbitrations. He also served as an LOF arbitrator

Darling).

from 1981 until his appointment as the Admiralty

“He has been an incisive and lucid judge,

judge in 1998; he is due to retire from the bench

who has a strong record of ‘getting it right’.

in mid-October.

There are advantages and disadvantages for

Newly appointed Lloyd’s Controller of

someone coming back who has not been

Agencies, Mark Patterson, said: “I am delighted

involved for some time with grass roots work.

to welcome Sir David Steel, who brings extensive

‘Out of touch’ or ‘fresh perspectives’? In David’s

experience and support to the LOF. I would also

case I have no doubt that he will get to grips

like to thank Mr Justice Teare for his invaluable

with his major responsibility of setting the level

assistance at an important time for the LOF.”

of awards. That will take a lot of mugging up on

Lloyd’s panel of salvage arbitrators was

what has happened over the last few years and

reconstituted last year under contentious

how the arbitrators have responded to some

circumstances – one result being the non

major changes in the salvage world and salvage

reappointment of arbitrators John Reeder and

cases, but a man of David’s intelligence and

Elizabeth Bucknell QC. The appointment of

wisdom can be relied upon to do just that. I think

Michael Howard QC to the new panel was

that it sends a clear and confident message to

swiftly followed by his resignation, although he

the international market that LOF is to be taken

had support for the potential appointment as

very seriously and has an arbitrator team – I can,

appeal arbitrator.

Sir David Steel

of course, speak only of my colleagues – of the highest quality.”

Lloyd’s Open Form provides a regime to determine the amount of remuneration awarded to salvors for their services in salving property

expenses, and new procedures in relation to

at sea and minimising or preventing damage to

containerships. The aim of publishing awards is

FCAP changes

the environment. Originating in the late 1800s,

to make the system more transparent, although

Lloyd’s also announced a number of changes

it is the most widely used international salvage

in certain circumstances the publication might

to the Fixed Cost Arbitration Procedure (FCAP)

agreement in the world today. A new version of

be delayed because of legal action still in

from June 20. Under the changes, the level of

the form LOF 2010 has recently been adopted

progress.

the security demand referred to in section 1

which provides for the publication of awards, and also for guarantees for salvage arbitrators’

Commenting

whether

Sir

David’s

appointment was good news, Simon Kverndal

theBaltic Autumn 2011 www.thebaltic.com

of the FCAP has been increased from $1m to $1.5m.

16 October 2011 The Address Dubai Marina, Dubai, UAE

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Where Finance meets the Shipping industry Sponsored by

Organised by

Towage and salvage The cap on party and party costs in a matter

the back of the vessel was too great. The

closely involved in developments at the port

before a First Instance Arbitrator has been

Con Zelo was lowered to the harbour bottom

of Antwerp. It has a dedicated presence in

increased from £10,000 to £15,000, and the cap

again and cut into three pieces, which were

Bulgaria and Romania, too, serving the Black

on the First Instance Arbitrator’s fees has been

subsequently removed by Cormorant’s wreck

Sea. “We are positioned in strategic areas,” says

increased from £3,000 to £4,500, plus any fees

grab, put onto a barge and transported to

Muller, “because we need to be where shipping

associated with interlocutory work.

Flushing for scrap.

volumes are increasing and where harbour and

The cap on Lloyd’s fees will remain

Another operation involved the Z700, a small

unchanged at £1,000, as will the cap on costs

Zeebrugge fishing vessel, which sank off the

associated with an appeal.

Belgian coast near Thornton Bank during May.

infrastructural developments are taking place.”

Multraship lifted and parbuckled the vessel with

Braemar expansion

Cormorant, then delivered it to Flushing.

Braemar, who snapped up BMT Marine Services

Multraship covers all the bases

Cormorant has also been successfully used

– which includes the Salvage Association –

in an asphalt mattress-installing test operation at

earlier this year, says it is planning to expand its

A number of jobs recently carried out by Dutch

the Thornton Bank Windfarm project in Belgium,

global network.

towage and salvage specialist Multraship have

and will be involved in another project to lay

The plan is to expand its marine surveying

underlined the value of the investment made

about 28 asphalt mattresses at Thornton Bank

and consultancy services following its recent

this year in upgrading the floating sheerlegs

this year.

buy-out by Braemar Shipping Services plc. The

Multraship managing director, Leendert

company is looking forward to taking advantage

The Cormorant, which is stationed in the

Muller, says: “Cormorant helps make us more

of the wider group’s extensive global office

Flushing/River Scheldt area, has been fitted

versatile. The sheerlegs can be used for

network to broaden its existing international

with a new A-frame and upgraded to 600

emergency response/salvage, wreck removal

expert marine surveying and consultancy

tonnes lifting capacity. Shortly after the

and all kinds of heavylift operations. We are

service.

upgrading it was engaged in a challenging

heavily engaged in a wide range of harbour

The Salvage Association, which boasts

and successful operation to salvage the fishing

towing activities and other port-related initiatives,

a maritime history of more than 150 years,

trawler Nieuwpoort 28 (N28), which capsized off

working under contract with major operators

plans to expand its world renowned specialist

Dunkirk in March.

on long-range projects. You have to have the

maritime services through its close association

Cormorant was next in action in connection

equipment, manpower and resources, and you

with complementary businesses in the Braemar

with the wreck removal of the Con Zelo, a

have to continue to invest, in order to both fulfil

Group, while maintaining its market-leading

laden Belgian cement tanker, which sank in the

such contracts and to respond to emergencies

range of marine surveying and technical

outer harbour at Hansweert. Multraship won the

when required. That’s what makes this such a

consultancy operations, Braemar says.

tender in combination with Polderman, a salvor

demanding job.”

Cormorant.

The association has had to contend with

from Hansweert. Cormorant was mobilised from

Multraship is headquartered in Terneuzen,

tremendous pension difficulties in recent years,

Flushing, whereafter divers preparing slings for

where it services the Terneuzen-Ghent/ Flushing

with much blame being placed at the feet of

a lifting operation found that the risk of breaking

area. As part of Antwerp Towage, it is also

Lloyd’s market players, who profited from the

Hyundai Fortune

theBaltic Autumn 2011 www.thebaltic.com

Towage and salvage association’s expertise without providing them with any financial backup when the financial situation became difficult. Nigel Clark, managing director of Braemar said: “The Salvage Association is the standard bearer for the provision of damage survey reports and we are rightly proud of this. While this work remains our core business, we also provide a broad range of other technical and in-depth expert services to the maritime industry and we are excited to have this opportunity to expand our capabilities even further. “We plan to continue the great work of the Salvage Association as well as growing our marine consultancy businesses, and the backing of Braemar’s extensive network of global offices will enable us to further extend its worldwide services,” he said, highlighting India and South America as key areas for expansion. Braemar has highly qualified and experienced marine surveyors, some of whom have been with the Salvage Association for more than 25 years. All have the expert level of capability that the Salvage Association has always required. In addition, the company boasts marine consultants able to offer a broad range of expert services to insurers, P&I Clubs, shipowners, ship charterers and marine lawyers.

European Marine Casualty Information Platform Marine accidents involving EU member states ships or occurring in territorial waters of an EU country will be registered in the European Marine Casualty Information Platform (EMCIP) system as of this summer, a project by the Joint Research Centre (JRC) and the European Maritime Safety Agency (EMSA). EMCIP is an electronic database which governs the investigation of maritime transport accidents in the maritime sector and information on marine casualties and incidents is logged, stored and exchanged using the database. As of 17 June 2011, member states were obliged to have independent safety investigative bodies in place to investigate serious marine casualties, to publish investigation reports within 12 months, and to notify marine casualties and incidents via EMCIP. The ECF part of the EMCIP reporting system allows for the analysis of the stored information using tools and methods already applied in the aviation community. From now on, the European aviation and maritime sectors are sharing the same basic software platform developed by the JRC for their reporting system applications.

New development Jensen Maritime Consultants recently completed the custom design work for the Bob Franco, a new azimuth stern drive tug for Harley Marine Services. The vessel – measuring 120 feet in length and 35 feet in width – is one of the first to be powered by Tier III CAT C175 engines, which have lower emissions than Tier II models, making it a more environmentally friendly option. Construction on the vessel is underway at Diversified Marine in Portland, Ore., and is expected to be completed in 2012. “The construction of a tugboat that meets Tier III emissions compliance is a great step forward in environmental protection for our industry,” said Jensen’s Johan Sperling, vice president. “It was important for us to design a powerful and capable tugboat for Harley, but also one that takes care of the environment in the process.”

theBaltic Autumn 2011 www.thebaltic.com

Shipmanagement, crewing and employment

Level playing field Salaries scales for owners and managers have varied in the past but are now level pegging. Phil Parry of recruitment specialists Spinnaker talks to the Baltic about money and other crew issues.

here was a time 10-12 years ago when

superintendents who are former deck officers.

Parry spoke at the Seafarers 2011 conference

salary levels in shipowning and ship-

There is a slight premium paid for chief

in June and says it was an almost unanimous

management companies for technical

engineers when coming ashore compared to

conclusion of the audience of shipowners,

staff, for example for superintendents,

master mariners. Technical superintendents,

shipmanagers, crew suppliers and class societies

were at noticeably different levels, according to

Parry says, have a ship-specific role whereas

present that lack of good management skills and

Spinnaker chairman Phil Parry.

mariners have a more company-wide and policy

good management training is quite possibly

Since the shipping boom of the last decade,

oriented one. More engineers are needed per

the most causative issue of dissatisfaction with

he says, that salary differential has disappeared

ship than mariners, he explains. On the other

seagoing careers. “And all of this at the same

and now staff in shipmanagement companies

hand, Parry says, the mariners have a greater

time we are trying to cope with external issues

earn comparable salaries to those in shipowning

propensity to advance up the ranks ashore than

like criminalisation and piracy”.

ones. “That is a natural consequence of the supply

the engineers. This may be because deck officers

and demand situation. There is no discernable

have a much more externally focused role than

management is more keenly felt these days than

difference between a shipowning organisation

engineering officers. “They have to deal with port

perhaps it was in the past. He cites comments

and a shipmanagement organisation. Obviously

authorities and charterers, and although both

from the Seafarers 2011 conference notably:

there may differences between companies.”

engineers and deck officers have to deal with

“Competence can be assured via people with

So why were salaries different originally? Parry

the office, arguably it is the deck officers who

the right attitude; seafarers are human beings

says he assumes that, because of the desire

have more management communication than

with families and spiritual needs; and a happy

to be competitive on costs, shipmanagement

the engineers.” Deck officers are responsible for

crew is a competent crew and a safe crew.”

companies had to work harder to keep salaries

cargo planning, dealing with ship agents and

Life on board ship now is very different from

attractive to owners. “One of the issues whereby

passenger planning, and it is the master with

30 or 40 years ago. Crews are smaller, they

shipmanagers have traditionally competed with

whom the buck stops. All this means that they

spend less time ashore, in nationality terms they

owners for the outsourcing of their business is

are likely to move faster up the management

are less homogenous and they are more likely to

cost.”

ranks ashore.

spend time alone on board ship, firstly because

Parry

says

that

the

impact

core

In a market which allows shipmanagers to

Parry says that his involvement in industry

of the small size of the crew itself, but also

be keener on costs than owners, then owners

conferences and the Maritime HR Forum –

because they spend more time on computers,

will outsource. Because of the supply and

for which Spinnaker acts as the secretariat

computer games and emailing. There is less

demand situation during the boom time, staff

– points to a fairly widely held view that one

social interaction on board, firstly to develop

could easily move jobs to a higher salary. Some

of the biggest problems faced by the industry

relationships and secondly to cope with their

people do express a preference, Parry says,

at the moment is lack of good management

reaction to the way they are being managed,

for working with owned tonnage rather than

skills among both the officer and shore-based

Parry says. There may also be no outlet for a

managed tonnage and “if they can do that and

shipmanagement community. Parry quotes from

reaction to how they are being managed.

earn a higher salary, why wouldn’t they?” In

a recent presentation by Anglo Eastern chief

Parry believes the other aspect is “because we

order to compete, therefore, shipmanagers had

executive Peter Kremers who said “shortage of

have smaller and, we are told, less experienced

to respond by raising salaries.

crew, especially officers, is the biggest concern

crew, if they are demoralised or unhappy then

for crewing management today”.

the risk of human error undoubtedly increases”.

Spinnaker, he says, has “a list as long as my arm” of vacancies for shipmanagement

In Parry’s view if that is right “and I believe it

While there has been a lot of talk about over-

staff, particularly superintendents, whom he

is, then the way we treat crew is quite naturally

promotion leading to lack of experience, Parry

says are the mainstay of the shipmanagement

going to have a significant impact, not only on

said that when he asked the question at the

company and the demand is high for technical

the behaviour and performance of crew but also

Seafarers conference he was told it was more a

superintendents – those, for example, with

on the way those crew develop into tomorrow’s

question of measuring competence rather than

engineering backgrounds as opposed to marine

managers and on retention and wastage”.

time served. Parry has a mentoring relationship

theBaltic Summer 2011 www.thebaltic.com

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Shipmanagement, crewing and employment with some young seafarers and the impression

The companies that responded to the survey

China produced 46,000 maritime graduates

he gets from them is that they are on the

pointed out that there were already significant

last year. The industry view may be that Chinese

receiving end of “unenlightened management

difficulties in obtaining particular seafarer types

seafarers are not yet sufficiently commercial,

practices from the school of ‘it didn’t do me

and nationalities, Parry says. The BIMCO/ISF

Parry says, but in 15 years’ time the question

any harm’”.

scenario regarding 2020 is based on an annual

is whether there will be a growth in the

All this is important, he says, because it is the

growth in the world fleet of 3% per annum, he

shipmanagement community in China and India.

right thing to do to treat seafarers well, not just

says, whereas industry analysts are suggesting

Some Spinnaker clients are already doing quite

for their own sake but for the sake of the industry

a growth rate of 8-9% per annum, unless

a lot of work in this area.

in the future: “Tomorrow’s superintendent is

scrapping rates increase.

Spinnaker runs the Maritime HR Forum,

today’s cadet. His/her experiences will follow

“As an industry we have to try very hard to

which is a membership association of 50

him or her ashore, so it is a never-ending cycle.

keep attracting seafarers, and when we have

prominent shipping employers. “An interesting

However, it is also important because of the fact

done that we need to work even harder to keep

outcome from market salary research carried out

that seafarer shortages are the biggest concern

them and manage them such that they have a

by the Maritime HR Forum is the demonstration

for the industry.” The BIMCO/International

decent career experience.”

that in salary terms the world is flat, by which I demographics?

mean the world has become a uniform place in

said that “if wastage rates for the industry as a

According to Parry: “If you bear in mind the

terms of salary levels. This does not just apply

whole were increased by one percentage point

changing demographics of seafarers and the

to shipmanagement. For junior superintendents

per annum across the board, then the stock of

inexorable shift towards Asia, and you combine

we see almost identical salary levels between

officers in 2020 would be reduced by around

that with the fact that there is a desire on the

European countries, the US and Singapore,

70,000”. The reverse is obviously true.

part of employers to get away from expensive

with the UAE lagging somewhat behind,” Parry

Parry believes anyone reading the BIMCO/

expatriate packages, then you have to ask

says. For marine and technical superintendents,

ISF 2010 update, which said that the situation

yourself what future planning companies should

the world is very uniform but with a noticeable

in 2010 is one of “a modest overall shortage of

be making as to the location of shipmanagement

anomaly which is that UK superintendent

officers”, and who considers that there is not a

offices.”

salaries tend to plateau at around $100,000

Shipping Federation Manpower Survey for 2010

And

what

seafarer

problem, would be making a big mistake. “Were

Singapore has made a huge success in

whereas they continue to rise above that in other

it not for the fact we have had a recession plus

attracting shipowners and managers and

locations. A similar pattern emerges for fleet

some quite favourable outcomes of various

commercial institutions to its shores. However

managers where the UK plateau is $125,000,

countries’ promotional campaigns to attract

Parry says it has become an expensive place to

“but the anomaly is less clear above that”.

people into the industry, we would be in serious

live and work and is by definition an expatriate

trouble today.”

community.

On the level

theBaltic Summer 2011 www.thebaltic.com

Ready, set, change!

Itâ&#x20AC;&#x2122;s been called the box that changed the world and yet the industry that transformed the face of global trade and transport in the space of just 50 years now stands on the brink of another era-defining moment: whether to continue with entrenched habits, or rediscover its desire and capacity for innovation and change.

Our industry and our customers benefit every day from the time, effort, money and sheer belief in the future that went into building the global container transport system as we know it today. When containers came along, we had to change everything and we believe the time has come to make that change again.

Maersk Line has identified three key challenges that we believe the whole container shipping industry must now address to ensure that it has a prosperous future: on-time delivery, ease of business and environmental performance.

We want to start the debate that will redefine our future and help us add tremendous new value to our customersâ&#x20AC;&#x2122; supply chains worldwide. We have to become an integrated part of our customersâ&#x20AC;&#x2122; promise to their customers to act as responsibly as possible in the marketplace. But why wait to be asked? Why not lead the way?

Join the debate on Changing the way we think about shipping.com

Green shipping

Going green With soaring fuel prices pushing operators to cut costs, there are plenty of innovative projects underway.

ardiff-based Graig Group says its radically new design of containership will reduce fuel cost per TEU by 30%. To back its research and develop-

ment, Graig has ordered a series of up to 26 fuel-efficient new generation MARLIN 2000 Blue design container feeders to be built at the major Jin Hai shipyard complex in China. The first two vessels are scheduled for delivery in August and September 2013, with subsequent vessels to be delivered in pairs every two and half months. According to Hugh Williams, Graig’s ceo, these ships are what the industry needs to fill a gap, especially for the high growth intra-Asia trades. And he expects to launch further fuel efficient designs with specific emission reduction technology and gas power to mark a step change in cleanliness and efficiency for the European container trades. “We have worked closely with liner majors and other end users to work out what the industry needs, then started from a clean sheet of paper to provide it,” explains Williams. “There is a gap in the containership market for quality, fuel efficient, competitively-priced and environmentally-friendly feeder ships and regional traders to complement the ultra large containerships now being brought into service by the major lines. This advanced MARLIN family of designs will fill that gap, and we expect this order to be the first of several series of larger capacity future-proof vessels, backed by the strength of the MARLIN consortia.” The MARLIN series of designs has been developed by Wärtsilä, working closely with Graig and classification major, DNV. The designs are the product of extensive research and tank testing, and consultation with end users. With a number of design variants, the series delivers approximately 30% improved fuel efficiency per TEU carried, improved capacity and slow

Bio lubes

theBaltic Autumn 2011 www.thebaltic.com

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Green shipping steaming potential, better loading flexibility for

compact size of the engine is ideal for the narrow

different container types, including a high reefer

engine room that the vessel design calls for.

intake, and lower emissions when compared to

delivered at regular intervals thereafter. “We selected the electronically controlled

“We are proud to set the standard for these

Wärtsilä engine because the flexibility in the

Bangkok-max design container vessel engines.

matching of the engines’ specific consumption

Wärtsilä will supply the main engines

The benefits of the Wärtsilä RT-flex engines

with the vessel’s demands was very important to

for the first series of eight ‘Bangkok-max’

are well known to the Guangzhou Wenchong

us. Thanks to the optimised specific consumption,

containerships being built at the Guangzhou

shipyard, and they are clearly the right solution

we are able to offer an environmental friendly,

Wenchong shipyard in China, thus establishing

for this design. We very much appreciate the

low fuel consuming vessel, which also gives

these engines as the standard for this type of

excellent co-operation with our licensee HHM

many benefits to charterers,” says Carsten

vessel. The ships will serve as feeder vessels in

and their having secured this valuable order,”

Meyer, fleet manager of Reederei Gebrüder

Asian waters.

says Lars Anderson, vice president, merchant,

Winter, the technical advisor for Buss Shipping

Wärtsilä Ship Power.

in this project.

vessels currently in service.

Eight Wärtsilä RT-flex60C main engines will be built by a Wärtsilä licensee, Hudong

Four of the ships are being built for Buss

“Electronic engines have been selected

Heavy Machinery (HHM), based in Shanghai.

Shipping, part of Buss Group from Hamburg,

by our company in order to better meet

According to Wärtsilä: “In meeting the needs of

with the other four ships destined for Eastern

the environmental requirements with high

the new Bangkok-max container vessel design,

Mediterranean

ship

flexibility and efficiency throughout the entire

the Wärtsilä RT-flex engine technology offers

management company with its head offices

engine load range and vessel speed,” says

excellent fuel consumption, exceptional reliability,

in Athens. The machinery for the first of these

Stefanos Tsonakis, Technical Manager, Eastern

and the possibility to incorporate environmental

1,700 TEU container vessels is scheduled to

Mediterranean Maritime Ltd.

upgrades at a later date. Furthermore, the

be delivered in 2012, with the remainder being

Maritime

Limited,

Wärtsilä has been awarded a five-year technical management contract, based on dynamic maintenance planning, covering six LNG carriers for Greek shipmanagers Ceres LNG Services Ltd. The

five-year

contract

covers

engine

Dynamic Maintenance Planning for a total of 24 Wärtsilä 50DF dual-fuel engines in six LNG carriers. Dynamic Maintenance Planning offers owners a significant reduction in operating costs by applying predictive maintenance principles and by optimising engine performance. With this order, a total of 80 Wärtsilä 50DF engines powering LNG carriers are under Wärtsilä Dynamic Maintenance Planning contracts. “Wärtsilä’s Dynamic Maintenance Planning will enable our company and our customers to benefit from optimised availability, increased lifecycle efficiency, and reduced maintenance costs for our engines. Wärtsilä’s technology, global presence, and local support will help us to achieve this task,” says Sallis Theofanis, Ceres LNG technical manager. Dynamic Maintenance Planning is based on the Condition Monitoring (CM) system developed

Wärtsilä.

The

company

explains that “the engines’ operational data and parameters are continuously fed into a database and then evaluated at Wärtsilä’s CBM (condition based maintenance) centre. The maintenance needs are thus predicted based on the actual condition of the equipment, while the optimal operational parameters can also be determined. The flexibility of this system – in conjunction with annual visits and inspections on board the vessels, allows maintenance intervals to be amended according to actual need. Service work and spare parts availability can be arranged accordingly, which enables better service planning and the avoidance of unnecessary costs and downtime.”

Wärtsilä RT-flex60C main engine

theBaltic Autumn 2011 www.thebaltic.com

Green shipping

Bio lubes in warehouse

The future for lubes is green

problem. Charterers and operators also face

The demands of slow steaming mean that a

Ongoing measures to reduce emissions in the

problems resulting from the gap between the

high BN (base number) lubricant is required. But

shipping industry have clear implications for the

rise in operating costs and freight rates. One

engine manufacturers recommend that a low-BN

suppliers of marine fuels, but their impact on

consequence of this is that slow steaming

lubricant is used in ECAs. It has become clear

the lubricants market is sometimes overlooked.

and

that a new generation of specifically designed

The type of lubricant used on board ships can in

commonplace.

ultra-slow

steaming

are

becoming

marine lubricants is needed to address the

fact be a vital piece in the anti-emissions jigsaw,

changing operational environment. This new

writes Patrick Havil, global marketing manager,

generation must not only offer significant cost

TOTAL Lubmarine, Paris.

savings, but must be safer and preferably be capable of use with fuel of any sulphur content,

Currently, we have ECAs in the Baltic, the

under any conditions.

North Sea and the English Channel, with the

New

North American ECA to become effective in 2012.

lubricant

technology

needed

Areas where ECAs are being planned include the

to produce an accurate BN with a specific

Mediterranean and Tokyo Bay for 2015. In 2020,

detergency level. Shipoperators simply canâ&#x20AC;&#x2122;t

it is expected that Australia, Alaska, Hong Kong,

afford to ignore potential cost savings which do

Singapore, Korea and the Gulf of Mexico will also

not adversely affect reliability of operation. Total

have emissions controls in place.

Lubmarineâ&#x20AC;&#x2122;s Talusia Universal cylinder oil, for of

example, can be used with both high-sulphur

containership voyages next year will involve

fuel and low-sulphur fuel, under any conditions.

has

been

estimated

that

50%

transit through an ECA at some point. In 2015,

Meanwhile, Lubmarine is already developing

the figure could be over 80%, and by 2020 we

a universal lubricant for the 2015 market that

could be looking at 95%.

will give optimum assured performance from the state

highest sulphur content heavy fuel oils (HFOs) to

that lubricants that are suitable for use with

the lowest sulphur content HFOs, while being

high-sulphur fuel are not suitable for use with

capable of being matched with all distillates and

Engine

manufacturer

guidelines

low-sulphur fuel. But this is only part of the

Patrick Havil

theBaltic Autumn 2011 www.thebaltic.com

heavy fuel oils.

Corporate viewpoint RWO GmbH

RWO GmbH D

evelopments and news on the RWO ballast

footprint

service group, Veolia Environnement, which has

water treatment system CleanBallast

additional power generator, which may be

more than 330,000 employees and a turnover

required for large power-consuming BWTS.

of about €35 billion, clearly provides us with

Further

major

developments

the

CleanBallast system during the last 12 months • Type Approval was received from the German Authority BSH early September 2010. • The footprint of the CleanBallast systems has been substantially reduced, by up to 50%, depending on the system capacity. • Investment costs were substantially reduced by up to 30%. To date, RWO has received orders for more than 44 CleanBallast systems. As of the end of June, 26 CleanBallast units were already for

periphery

equipment,

• Much lower carbon footprint. The CleanBallast technology further stands

include the following:

commissioned

for

successful

commercial

operation. CleanBallast is one of the few

out as a system: material damage. • Simple installation and operation; fully automatic.

For further information, clarification or details, please contact us: RWO GmbH - Marine Water Technology E-mail: CleanBallast@veoliawater.com

• Safe, efficient and reliably in waters with

Tel: +49 421 53705-0

higher sediment load as well as in low salinity waters. • Modular design, thus suitable for newbuildings and retrofitting. • Filters can be installed horizontally as well as vertically leading to a safe footprint.

One of the most important advantages of

RWO has been a water and wastewater

the CleanBallast system is the very low power

technology supplier and partner to the

consumption of 0.03 kWh/m³ in seawater: 0.1

maritime industry for more than 35 years.

kWh/m³ in low saline water, eg a 1,000 m³/hr

The global availability of service and our

system requires only 30 kWh in seawater and

long-term history and relations with all

the power consumption can be further optimised

major shipyards and shipowners, clearly

with RWO’s unique control philosophy. This

means that we understand the specific

clearly leads to:

needs of the marine industry.

systems.

• Requires minimum maintenance.

operation in commercial applications.

• No additional CapEx and no additional

and availability during the entire lifetime of the

• With no increase in corrosion and no coating

systems that can demonstrate a longer-duration

• Extremely low operational costs.

the financial background for sustainability

Being part of the world’s largest

environmental

theBaltic Autumn 2011 www.thebaltic.com

www.rwo.de

Green shipping Bio-lubricants are also set to assume

in fuel efficiency. Mathematical models are then

increasing importance. For a biodegradable

built to express this. “The relations between

The vessels operate in oil and gas extraction,

product to perform as effectively and efficiently

the ship’s speed and consumption, as well

production and transportation, and include semi-

as a mineral oil-based product, its formulation

as a range of internal and external factors,

submersible drilling rigs, drill ships, mobile oil

has to be completely redeveloped. After

are learned through the use of sophisticated,

and gas platforms, as well as floating production

extensive testing over a period of years, Total

specially developed software. Obtained from this

storage and offloading vessels.

Lubmarine has produced a full range of high-

is a system that is able to provide continuously

performance biodegradable products. The cost

updated advice on optimal settings of controls.

FPSO in South-Korea and Singapore.

“This group of important orders underscores ABB’s

excellent

reputation

for

delivering

of these may be higher, but this is more than

“GreenSteam is able to react dynamically to

comprehensive, reliable solutions that help our

compensated for by improved performance and

changes in the ship’s condition and environment,

marine customers operate at the highest levels

better environmental credentials.

thereby making it possible to always operate

of efficiency, as well as our vast oil and gas

with the greatest possible fuel efficiency. Every

industry expertise,” said Veli-Matti Reinikkala,

second, the current conditions are measured

who heads ABB’s process automation division.

Keeping in trim

and input to GreenSteam Optimizer, which

ABB’s technology will assist the ships to

While acknowledging that optimising fuel costs

immediately finds a new setting for trim and

maximise their energy efficiency, as well as

is vital for today’s owners Danish company

propeller(s) that is optimal in the current situation.

provide a reliable power supply to improve

GreenSteam says that this is more complex

This advice is continuously supplied to the user

the use of onboard equipment. The scope of

than might be realised. The company gives,

interface on the bridge,” the company says.

supply includes complete electrical systems

as an example, that “the trim of a vessel is an

It claims that the GreenSteam Optimizer can

and related equipment such as generators,

important factor for propulsion resistance. But

improve fuel efficiency by 4-5% on average.

distribution switchboards, and transformers, as

the effect of changing the trim depends on the

well as drives and motors to power the ships’

current draft of the vessel. Increasing propeller

thrusters and drilling systems.

RPM or pitch also changes the effect of any

ABB orders

ABB has also recently won an order worth

Power and automation technology group ABB

more than $40 million to provide complete

GreenSteam, which is part of research

has snapped up several orders totalling $200

energy-efficient power and propulsion systems

company Decision3, solves the problem by

million from Samsung Heavy Industries, Hyundai

for two new ice-breaking vessels to be built by

collecting sensor readings on board the ship

Heavy Industries, Keppel FELS and Jurong

the Arctech Helsinki shipyard in Finland.

over a long period to establish the relationship

Shipyard Pte Ltd., to supply equipment for 23

between changes in conditions and changes

new jack-up and DP drilling vessels and one

trim setting”.

Designed

for

extreme

environmental

conditions in the Arctic Sea, the vessels will

Queen Mary 2

theBaltic Autumn 2011 www.thebaltic.com

Corporate viewpoint Sea2Cradle

Ship recycling is none of your business? F or many decades shipowners have acted

You have sold the vessel under certain

in a way that we sell ships, for further

conditions and now you get a statement of

trading or demolition, to another ship-

ending the contract. But is this enough? Without

owner or buyer who is specialised in ship

proof, these statements can be questioned.

demolition, also known as cash buyer. Normally,

Compare it with the requirements of a new build

that is the end of the story. Here stops the

project. To make sure that what you ordered is

responsibility and liability for you as shipowner

what is delivered, you place a site team at the

for the vessel involved. Today, most owners still

new build facility. This team follows the building

act in this way. The question is: can we continue

process according to the contract specifications

this for the years to come?

and international regulations, so the new vessel

The very dangerous working conditions and

can be accepted as safe and environmentally

heavy environmental pollution in the traditional

sound. With recycling it is more or less the

ship breaking countries were the reasons why

same. As shipowner, you have identified the

IMO started work on ship recycling in 2000.

hazardous materials (IHM) of the vessel, created

This has resulted in the Hong Kong International

the ship recycling plan, and negotiated the

Convention for the safe and environmentally

contract with the recycling facility as buyer of the

sound recycling of ships 2009. This convention

vessel. Any environmental pollution or accidents

requires pre-operational work by the shipowner

during dismantling due to missed declaration of

for vessels going for recycling. In addition, it puts

materials or incorrect description of the vessel

requirements for new build vessels and existing

can still result in claims towards the previous

vessels with the owner. The main requirement

owner. We recommend that you have someone

is the Inventory of Hazardous Materials (IHM)

Tom Peter Blankestijn

from your company or a neutral observer to

of ships. The effect is that a neutral inspector

Managing Director Sea2Cradle

follow the recycling process. This way you can get the documented proof required. If any

needs to make this inventory while physically checking the vessel and take specific samples of

of the ship recycling plan is that there needs to

question arises in the future by governments,

materials, which need to be tested in approved

be a full match of the inventory of hazardous

NGOs, shareholders or (even worse) court, you

laboratories. As long as the convention has not

materials and potentially hazardous materials

will have all proof at hand.

entered into force, this is not mandatory.

with the ship recycling facility plan. This allows

Almost all responsible shipowners have a

So can we wait for governments to ratify

the flag state, or class on its behalf, to provide

strong statement on corporate governance and

the convention? As soon as it enters into force,

you with an International Ready for Recycling

environmental policies. In the case of ship

many owners will have to comply. With the large

Certificate. This certificate is your legal permit to

recycling the question is “do we wait for IMO or

number of vessels involved, there will not be

allow recycling as per the convention.

will we voluntarily implement?” Our company’s viewpoint:

sufficient inspectors to carry out the creation

Any materials identified which cannot be

of these IHMs. Supply and demand will cause

handled by the facility will result in non approval.

the prices for these inspections to be out of

The alternative is that the material(s) are removed

proportion, or will mean that the inspections

at an earlier stage at a facility that can handle

will be of very poor quality. We suggest that

the particular hazardous material involved. It is

owners act now and voluntarily implement the

worth mentioning that the role of the cash buyer

IMO convention. A good professional team with

has been identified as that of a shipowner; will

a clear visual and sampling plan can provide

the cash buyer handle this responsibility or will

you with the IHM you require for your ships, at a

they demand that you, as seller, provide all the

• It needs to be crystal clear when the

reasonable price.

• IMO adopted the convention on Ship Recycling for a very valid reason. • New

requirements

can

complied

with; owners can get assistance from professionals. • Recycling can be as safe as new building; all it takes is proper planning.

information required? The latter is the most likely.

responsibilities for you, as shipowner, end,

Another requirement of the Convention is

At the end of recycling, you will need to

because the contract requirements go

a ship-specific ship recycling plan. This plan

receive, according to the convention, a

beyond the date of delivery of the vessel.

will be part of the sales contract between

Completion of Recycling Statement, that all

• Documented proof is strongly recommended.

the shipowner and the recycling facility. As a

recycling activities have been carried out as per

shipowner, you have to be aware of the ship

the ship recycling plan. With this statement, your

Sea2Cradle is established to assist and add

recycling facility and its capabilities. The basis

responsibility ends under the convention.

value to your green environmental policy.

theBaltic Autumn 2011 www.thebaltic.com

Green shipping operate in drifting ice of up to 1.7 metres thick

power, so the owner is saving fuel costs and

and temperatures as low as minus 35 degrees

remaining competitive, the company says.

performance.” Cunard has also said it has made significant

Celsius. Both vessels are scheduled for delivery

savings on Queen Mary 2 since converting from

in the spring of 2013.

a silyl-based TBT-free self-polishing copolymer

Coatings

antifouling in November 2008 to International

vessels to transport supplies to the Sakhalin-1

Marine coatings have been a vital component in

Paint’s fluoropolymer foul release coating

platform that will be developing the Arkutun-Dagi

reducing ships’ resistance through the water and

Intersleek®900.

field off Sakhalin Island in the Russian Far East.

therefore cutting fuel costs and maintenance

Shipping company Sovcomflot will use the

“ABB’s extensive marine industry experience,

costs.

From its own detailed studies on the propulsion efficiency of Queen Mary 2, Cunard

and in particular our track record of supplying

Stolt-Nielsen is the first company set to

has confirmed that since the application of the

reliable and efficient solutions for ice-breaking

benefit from International Paint’s new chemical

Intersleek®900 system to the vertical sides,

vessels, were important factors in winning this

tank coating, Interline®9001.

vessel efficiency has improved by over 10%, International said.

order,” Veli-Matti Reinikkala said when the order

The Stolt Jade was the first chemical tanker to

was announced. “Our combination of robust,

trial the paint when the ship drydocked at Dubai

Ronnie Kier, chief engineer of Queen Mary

reliable technologies and competent marine

Drydocks World, where International’s latest

2, explained how this was calculated: “Prior

engineering and service resources will help

high performance tank lining was applied to

to the drydocking, in order to achieve the

ensure successful and safe operation of these

one of its 600m2 tanks. “From the development

necessary speeds to meet our demanding

vessels in the harshest environments.”

of the first parcel tanker in the 1960s and the

schedule, we would need to utilise all four

The order comprises power generation and

pioneering of the tank container market in the

14.5MW diesel generators and supplement that

distribution systems, thruster motors, and two

early 1980s, Stolt-Nielsen has been a leading

with our 8MW gas turbine running on gas oil.

6.5 megawatt propulsion systems, including

player in liquid cargo transportation. Its decision

After the drydocking, we only required the

drives and the Azipod energy-efficient electric

to apply Interline®9001 was perfectly in keeping

four diesel generators, which gave us a direct

propulsion units.

with its position at the forefront of the industry,”

saving of approximately 36 tonnes of gas oil

International said in a statement.

per day or around $30,000 per day at today’s

Aalborg Industries, meanwhile, has also been

“Reducing port time – and increasing

prices. What is more important to us is that

The company has provided

efficiency – is a major strategic focus for Stolt,

those initial efficiency improvements have been

thousands of waste heat recovery units, which

given that a deep-sea parcel tanker spends

effectively maintained over the 30 months since

allow waste heat to be used productively rather

roughly one-third of each voyage in port

application.”

than being lost. The company estimates that the

loading and unloading. The company’s Energy

The lower fuel consumption seen on Queen

use of such a system can reduce the amount

Management Project, launched in 2006, is

Mary 2 since the application of Intersleek®900

of fuel being used by 11.5% and means that

dedicated to improving the energy efficiency of

represents a reduction in CO2 emissions of over

owners can get the same output by reducing

its existing and future fleets, aiming to reduce

50,000 tonnes – equivalent to taking 16,000

input. Waste heat recovery generates additional

fuel consumption whilst improving environmental

cars off the road for 12 months.

developing green technology to reduce fuel costs on ships.

Queen Mary 2

theBaltic Autumn 2011 www.thebaltic.com

Green shipping Green ships

• Reduction in fuel consumption

There have been a number of projects in progress,

• A reduction in the engines’ lifecycle costs.

not only to develop green ships for the future but

Work carried over from the Hercules Beta project

area where cruise companies have been

also to explore the use of alternative fuels, which

includes research on:

concentrating their efforts to reduce costs.

it is hoped will ultimately enable the ships to

• Maximum engine operating pressure

Royal Caribbean estimates that with an optimal

run more cost-effectively. German classification

• Optimum combustion processes

hull shape and innovative propeller designs,

society Germanischer Lloyd is involved in the

• Model verification

the company can make energy savings of

conversion of the product tanker Bit Viking – the

• Turbochargers

around 8% in comparison to traditional hull/

first order for Wartsila’s LNGPac system. Bit

• Emissions reduction through exhaust gas

propeller configurations. Other energy savings

Viking runs on LNG with an endurance of 10-12

• Electronic control systems. Propulsion and hull designs are another

include tinted windows, centrally controlled air

recirculation

days with two cylindrical gas tanks, and dual

• Recovery of waste heat

conditioning systems that automatically adapt to

fuel engines. It will be the first GL class vessel

• Tribology and materials

the temperature in the room, and solar panelling, which has been used to power

running on LNG in international voyages. Other projects in progress include Hercules

the passenger lifts on board some

Beta, the second phase of a project sponsored

of RCCL’s newer tonnage. Water

by the EU and Switzerland aimed, among other

reduction technology has been

things, at finding technological solutions for

introduced throughout the fleet

compliance with future emissions legislation. The

in order to reduce the use of

project began in September 2008. The leading

water producing equipment and

companies, as on the previous Hercules Alpha

thus reduce the use of fuel or

project, are MAN Diesel & Turbo and Wärtsilä.

electricity.

Together with universities and companies from

With bunker prices continuing

the shipping sector, as well as mechanical and

to rise, owners and operators

plant construction firms, project goals include:

will have to consider even more

• The development of new, and use of

measures to ensure that the 60%

existing, technologies to significantly reduce

of costs that bunkers represent

emissions in marine engines (nitric oxides,

does not prove crippling to

sulphur oxides, carbon dioxide)

companies’ bottom line.

Greentug

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theBaltic Autumn 2011 www.thebaltic.com

Software

Cloud formation What’s new and what’s relevant in IT for shipping in the next few years? Dimitris Lyras, founder of global software company Ulysses, gives his view. categorising information, which is even more

use of BI was, and still is, statistics on customer

important to an enterprise than search itself.

trends under a variety of circumstances that

Categorising information is actually what we

could lead to a better product related sales or

do all our lives and what makes a person with

distribution strategy, for example. Today, the

experience able to make good decisions. We

critical element is getting the BI projects deployed

categorise past experiences in order to assess

much quicker than before, which in turn is about

a current decision. Even a dog categorises

making new reports and graphs more quickly

experience about his master in order to predict

from vast amounts of currently generated data,

his master’s behaviour. Categorising information

without slowing down the company servers and

is also what we do when we co-ordinate to solve

databases.

a problem. To co-ordinate we have to know what

Social media is still getting a lot of attention in

relevance the problem has to each stakeholder in

main stream software. We in shipping have our

a company so as to get them all to contribute in

share of social media – discussion groups, Twitter

time to minimise risk.

and blogs – as do other industries and the value

Categorisation is also what can make

of such places to discuss things has some benefit

statistically derived data useful. Those of us who

over writing to your friends via email or some

have worked with accident statistics know that it is

such alternative. The importance and power of

notoriously difficult to agree and assign categories

grouping people with interests in common cannot

to incidents. Do you assign the accidents to

be overestimated.

their root causes, do you assign the accident

The cloud is another major development in

to its effect, for example fire or explosion, do

the mainstream software industry. The cloud

you assign it to their immediate causes etc?

is really about mobile devices having protocols

More importantly, do you assign context to each

to engage with applications anywhere in the

accident so that you don’t confuse a fire during

he mainstream IT industry is paying a

world without the user having to log on and off

repairs in a yard with a fire during normal ship

lot of attention to text analytics. This

a website ad infinitum, while moving around in a

operation.

means searches that detect discus-

car for example.

Dimitris Lyras

obvious by general observation. A very popular

So the fact that analytics is big business

sions that require the attention of the

These are not the only main stream popular

means that soon categorising information will be

company or enable the classification of typical

developments or the newest ones, but they

big business, which will change everything in how

documents. Things like customer complaints on

represent where the big money is going.

we manage information.

blogs, customer complaints that have not been answered or indexing of legal documents. An

So how does all this mainstream technology

So watch this space!

expenditure apply to shipping?

indication of this is that Hewlett Packard bought

Business Intelligence

a leader in the field of text analytics, a company called Autonomy or for over eight times its rev-

Text analytics

Business Intelligence is most useful when

enue, US$10 billion.

All industries can make use of search to

there are hundreds of thousands of pieces

Analytics is relevant to any enterprise,

categorise and find textual information. We all

of information gathering every day and telling

including shipping. Everyone wants to keep track

face this when we have to look through emails of

people about their business. In shipping, internal

of emails, and content and search tools don’t

more than a week to find an internal discussion.

information useful for business intelligence is

help much. There have even been a few users of

categorising

much more coarse-grained and much less

information is perhaps more important than

frequent and, considering the small volume of

Business Intelligence (BI) is also still a vast

anything; even more important than the issue of

information, it is staggeringly varied. There are

and popular development in the mainstream

finding information easily, ferreting out emails or

at least 1,000 different events and associated

software industry. Originally, it was a study of

say finding and reusing wording for legal clauses.

data-points, ranging from a deck crane that

Autonomy in our industry.

numbers to arrive at conclusions that were not

However,

text

the

concept

analytics

gets

involved

with

theBaltic Autumn 2011 www.thebaltic.com

is overheating to a fuel barge that is running

Corporate viewpoint Chinsay

Chinsay – the winning concept for optimising risk management Poor document management means freights worth millions of dollars are at risk. The Recap Manager®, Chinsay’s innovative online system, holds the key to minimising that risk. And in the process you’ll make major gains in productivity.

hat is the true cost of poor document

and allows principals to upload and control their

5. Put a stop to piles of old paper CPs

management? Dealing with chartering

own forms and riders to be used by approved

Chinsay enables clients to run a paperless office

documents in their traditional paper format

counterparts. Clients can also get customised

by creating an online library of fixtures. Users

involves manually tracking amendments, ver-

CP forms for internal fixtures.

can share information between departments,

sions and approvals. The time and resources

offices and across continents without the risk of

to calculate but what is the cost of having

2. An end to poorly validated documents

incomplete, unvalidated or even erroneous CPs,

Amendments made to the documents in

should they be needed in a legal dispute? What

Chinsay are traced, highlighted, and locked in

“Chinsay Recap Manager is a bold step down

if you cannot manage your risk exposure? And

pdfs to support the approval process. Checking

the road of modernising the freight contracting

how do you calculate the cost of poor compli-

is quicker, as mistakes are easily noticeable.

process; one we believe should be embraced

ance to shareholders, regulative bodies, or even

Double-checking is avoided, as fixtures made

by charters, brokers and owners alike.”

the SOX-act?

by clients’ brokers are approved online before

The Strategy and Compliance Manager at Rio Tinto

spent searching for old charterparties is easy

sending illegible faxes or circulating paper copies across the globe.

being sent to all parties for signatures.

Get organised with Chinsay

6. Make it easy to track performance

Chinsay, a Stockholm-based independent

“The Chinsay system is a good tool that will

The digitised and standardised data in Chinsay

software service provider, has developed a

help the whole industry get more disciplined

fuels reports and dashboards that track the

solution to manage risk in shipping. The Recap

and organised; this is essential in today’s

performance of offices, desks, individual users

Manager offers a secure platform for creating,

environment.”

and even counterparts. This information can

validating and storing recaps and charterparties

The Vice President Freight at BHP Billiton

be used to increase efficiency and quality

online. BHPBilliton, Cargill, Koch Shipping, Rio

throughout the ship chartering processes.

companies in 37 countries, which have already

3. Prevent key details missing in recaps and CPs

adopted the system and seen the benefits:

The standardisation of recaps, clauses and

Tinto and UNIPEC are among the more than 150

CP forms speeds up charterparty creation “What is the cost of having incomplete,

and information retrieval for all parts of the

unvalidated or even erroneous CPs, should

organisation. Standardization of main terms

they be needed in a legal dispute?”

recaps allows clients to make items mandatory.

1. No more use of incorrect CP versions

4. Reduce the cost of uncertainty

Chinsay is used to draw up fixture documents

Chinsay who facilitates internal and external

using the latest version of clients’ terms and

communication. Fixtures have complete audit

a correct original CP form. Chinsay hold

trails back to the creation of the recap, through

distribution rights to all BIMCO and ASBA CPs

subjects lifted and approvals of documents.

Every fixture has a responsible individual in

theBaltic Autumn 2011 www.thebaltic.com

To learn more about Chinsay and the Recap Manager®, visit us at www.chinsay.com

Software not the same as those in other industries where this technology is most popular. We need to make statistics but we need to break them down into meaningful categories, and non external technology is going to do that for us. It’s a business issue not a technology issue. That, for example, is the reason Intemanager has worked so hard to provide KPIs for quality.

Social media Every industry and every person needs a group of people to discuss different interests. We also all need to network so as to leverage each other’s knowledge and efforts, meet the right people etc. In shipping we have no less reason to do so than in any other industry. There are many obvious examples of the value of social media. However, the technology enablers will develop in aspects of social media that gain widespread revenue for the software companies involved. One size fits all will come first, long before the specialisation needed to really serve an industry. LinkedIn was sold for $6 billion or so, and we are seeing Hollywood movies about the success of Facebook. These are one size fits all systems, the kind that make the most money for the developers. But it is not where the real value lies. Despite all the success of Facebook and LinkedIn, how come we are asked questions such as “Like” “Don’t Like” to categorise a new posting? When did an unqualified “like” or “don’t like” ever help us find the right article to read? How often does a simple discussion group, as we often see in social media, provide us with discussions we really care about? So it will be a while before we see the real value of social media but there is no doubt it will provide more and more value as the categorisation and qualification of the social groups and discussions becomes more sophisticated. So we mentioned categorisation again. Of course the future lies in categorisation. Would Making connections

we not all find social media more useful if before reading something from the stacks of information available every morning, we knew what the point of

late that could each potentially change the

be categorised by ships draft, absolute speed,

the discussion was and how people like us might

revenue of a ship’s voyage by say $10,000.

through the water speed, wind, currents, sea

find it useful? Let’s not forget that the mainstream

However, each of these events has frequency

condition etc. Breaking it into the right categories

media, which is having attention diverted from it

that is so low that you could hardly ever make

and gathering enough information about each

by social media, has a publication name that is

statistics out of it. In short, shipping has too

category is much harder than making graphs and

at risk when publishing an article, and journalists

many processes and too few repetitions of each

preventing your data server from grinding to a

with experience, knowledge and expertise. All this

process to benefit from Business Intelligence the

halt from the load. For example, accurate through

is qualification and categorisation that needs to

way retail industries can, for example. Sure, we

water speed is very difficult to achieve from the

be put back into the social media.

like to see graphs of daily fuel consumption, say,

hardware, and once you reel all the consumption

but this hardly requires cutting edge Business

information into the categories provided, it is

Intelligence.

difficult to gather the millions of data points in

The cloud

More importantly, BI is in need of categorisation

each category so as to justify state-of-the-art BI.

What does shipping really need in the next few

as well. Even daily fuel consumption needs to

So our BI problems in the maritime industry are

years from the technology available?

theBaltic Autumn 2011 www.thebaltic.com

Oxford Analytica

Global commodity ‘financialisation’ increases risks S

upply and demand factors have tradi-

otherwise curb growth in the global economy

boosted by partial deregulation of commodity

tionally been seen as the key determi-

over the coming decade.

markets in the United States under the 2000

nants of price formation in commod-

Commodity

ity markets. However, evidence of the

Investment in commodity futures and derivatives

Futures

Modernization

Act.

‘financialisation’ of commodity markets and an

Analysis

increasing correlation between commodity price

All asset markets, whether equities, bonds,

movements and other asset prices have led

currencies,

other

of investing, investor interest in taking up these

some economists to challenge this view – and

investments, have historically experienced

options has been driven by a number of factors,

encouraged some governments to look for an

‘bubbles’

namely:

opportunity to raise tax revenues.

financial flows drive prices away from what

has subsequently risen sharply. property,

–

gold,

periods

art

when

speculative

While new instruments provided the means

• periods of low returns in other markets that

might be considered a normal range based

prompted a search for new asset classes;

on fundamentals. However, bulk commodity

• the view that commodities as an asset class

Impact

markets, such as energy, food and basic raw

represented a play on emerging market

• The instruments for investing in commodities

materials, have generally been considered

growth and/or a hedge against inflation; and

are changing as traders try to find a means of

in some way exceptional. Prices were seen

• evidence suggesting that commodity prices

profiting from both price volatility and trends.

as predominantly reflecting basic supply and

were not correlated with movements in other

• Governments are increasingly likely to

demand factors rather than any financial or

markets – although this view has waned in

intervene in commodity markets when

speculative influences:

the last three years.

deemed expedient.

• This ‘exceptionalism’ has its historic roots in

• A slowdown could provoke price declines,

the view that commodity markets are largely

but would not change the underlying

driven by physical prices rather than futures,

Speculation influence

situation.

and that market actors have been primarily

A number of studies have concluded that financial

producers and consumers that actually trade

speculation does not play an important role in

the physical commodity.

determining commodity prices, forming what

What next

• Financial speculators typically played a lesser

The increased ‘financialisation’ in commodity

role, providing useful liquidity but generally

markets has been significant and influences price

shying away from involvement in physical

movements. However, fundamentals remain

markets on the grounds that if contracts

key, and commodity markets are particularly

could not be settled financially, they would

susceptible to price instability because of rigidity

become involved in storage, shipping and

in supply and demand. Under such conditions

other activities for which they were ill-

of tight capacity and weak controls, speculators

equipped.

are able to influence prices more easily.

However,

commodity

markets

have

Governments will show increasing willingness to

undergone a rapid process of ‘financialisation’

raise taxes from commodity market speculators.

in the last decade. The creation of financial

Only investment in additional commodity supply

derivatives and index funds has provided the

can reduce speculative influences in commodity

means for a wide array of financial investors to

markets and avoid supply constraints that will

access commodity markets. This process was

theBaltic Autumn 2011 www.thebaltic.com

500 400 300 200 100 0 Jan 94 Jan 98 Jan 02 Jan 06 Jan 10 Commodity prices, Jan 94 - Aug 11 Thomson Reuters/Jefferies CRB Index Source: Thomson Reuters/Jefferies

Oxford Analytica “may have been exacerbated by the formation and collapse of an oil price bubble”.

2. BIS In June, the Bank for International Settlements (BIS) noted in its 81st Annual Report that, while supply demand and factors remain important to price formation in commodity markets, “there is growing evidence” of patterns traditionally observed in financial markets – such as impacts of “herd” behaviour (‘autocorrelation’) and sudden changes in risk aversion.

3. FAO-OECD The Agricultural Outlook 2011 published by the UN Food and Agriculture Organization (FAO) and the OECD in July acknowledged that financial investment has also become a feature of commodity markets, but cautioned that the effect on price movements was still unclear.

New governance stance In June, under French presidency, G20 agriculture ministers met for the first time to discuss measures to address food-price volatility (see INTERNATIONAL: French agenda makes life hard for G20 – February 17, 2011). In the same month, the IEA announced the release of 60 million barrels of oil from members’ reserves to curb high oil prices. These two has been the dominant viewpoint up to now.

Shifting opinions

For example, in July 2008, just before the crude

The

the global governance of commodity markets,

oil price hit its all time high, the Interagency

commodity markets has influenced price

driven by increasing concern about the long-

Task Force on Commodity Markets published its

movements is finding a more receptive audience

term issue of improving commodity supply, but

Interim Report on Crude Oil, finding that “to date,

among important decision-making and opinion-

also by the growing determination to curb the

there is no statistically significant evidence that the

forming bodies:

influence of speculators (see INTERNATIONAL:

hypothesis

that

moves signalled the emergence of a change in ‘financialisation’

OPEC cracks facilitate IEA intervention – June

position changes of any category or subcategory of traders systematically affect prices”.

1. EIA

24, 2011).

Nonetheless, in 2009, Princeton economists

In May, a presentation by Richard Newell,

Efforts appear to be directed towards curbing

Ke Tang and Wei Xiong presented a working

administrator of the US Energy Information

exaggerated short-term price movements and

paper – “Index Investment and Financialization

Administration (EIA), indicated that the agency

demanding greater transparency and information

of Commodities” (formally published in 2011) –

was looking into the linkages between physical

flows in commodity markets rather than towards

arguing that the correlation between oil and non-

and financial markets. He argued that some

limiting (or reversing) the ‘financialisation’ of

energy commodities in the United States had

evidence suggests that volatility in 2007-08

commodity

markets.

This

points

the

grown in tandem with the significant increase

acceptance of a role for financialisation, but

in index investment in these commodities. The

also greater vigilance in examining the potential

authors asserted that the process of commodity

effects on price volatility and speculation.

market ‘financialisation’ explained the increase

Increased information and the testing of

in price volatility in non-energy commodities

methods to reduce speculative bubbles (such as

around 2008.

increases in official emergency stocks and well-

Other papers challenging the consensus

timed interventions) may allow the authorities to

have emerged. For example, Stanford University

gain sufficient control over commodity markets

Professor Kenneth Singleton recently published

to dampen future price volatility. The imposition

“Investor Flows and the 2008 Boom/Bust in

of trading taxes will also be an attractive policy

Oil Prices”. He argues that financial markets

Report by Oxford Analytica

option. However, if such measures damage

amplify small errors by investors in their optimal

www.oxan.com

long-term growth in commodity supply, the

investment policies, generating “price changes

negative effects of rising long-run price trends

that are unrelated to fundamental supply/

E-mail: dgautrey@oxford-analytica.com

will rapidly outweigh the benefits of short-term stability.

demand information”.

theBaltic Autumn 2011 www.thebaltic.com

FFA

Backing brokers New FMIUG chairman, Philippe van den Abeele, talks about the evolution of FFAs and the new Baltex screen.

(UK)

in the freight derivatives environment, van den

managing director Philippe van den

Abeele explains. “It really took off in a major

Abeele is certainly someone who

way, whereby 95% of the trades were done on

is not afraid to stand up and be

a cleared basis.”

astalia

Fund

Management

With the advent of the 2008 financial

counted.

the

crisis, there were defaults on bilateral business

chairmanship of the dry section of the Baltic

as companies went bust “creating large,

Exchange’s Freight Market Information User

gaping holes in people’s cash flow because

Group (FMIUG) with Jeremy Harris, crude freight

counterparties were not performing,” he says.

derivatives trader at Shell Trading & Shipping

Clearing took off completely between the end of

leading the wet section.

2008 and 2009, he says, because of the risk of

has

only

recent

taken

over

The group, which is made up of shipowners,

counterparty default. Freight rates also dropped

charterers, operators, and freight derivative

from the order of $130,000 per day to $11,500

traders, provides the Baltic Exchange with

per day for capesize vessels. “The size of

regular advice on its freight market indices and

these contracts was enormous and the volatility

route assessments.

very great, so clearing had to take over. But

In accepting the appointment, van den

what is remarkable with freight, if you compare

Abeele said that: “As chair I will be continuing

it to other OTC markets, is that the freight

to ensure that the FMIUG provides the Baltic

derivatives market has been way in advance of

Exchange with the support it needs to develop

other markets in embracing clearing very quickly

both its indices and ensure the success of the

because it was faced with real counterparty

Baltex electronic trading platform for the dry FFA

Philippe van den Abeele

problems.” Increasing regulatory scrutiny is a fact of life.

market. Input from the market place is key to the delivery of the Baltic’s independent services and

overall standing in the market. He says that this

“There is obviously going to be more scrutiny of

I would encourage principals to join this group.”

has developed well over time. “If you look back

the size of the position you hold and whether you

Van den Abeele has been a member of

to the very first futures that were developed in

have the money to pay the margins; all that will

the user group since he set up Castalia Fund

the shipping market in May 1985, Biffex was

lead to further transparency in the market and

Management in 2006. Prior to that, he was

then an exchange trader who cleared futures

hopefully for everybody, meaning more security

managing director of Clarkson Securities Limited

contracts in an old-fashioned way. This basically

in being able to trade”.

and was responsible for the expansion of the

meant physical brokers operating in a pit or

So will smaller operations suffer as a result?

freight derivatives brokerage business for the

an open environment. Clearly the environment

According to van den Abeele “if you can’t afford

Clarkson Group. He was also actively involved

has changed tremendously since then. The

to play, you shouldn’t be there. I don’t care how

in the management of the shipbroking activities

relationship between the users and the Baltic

large or small you are, within your own means

of the Clarkson Group as a member of the

Exchange is paramount in continuously trying to

you have to understand what the risks are. That

Executive Committee, and reporting directly to

improve the products we are trying to create.”

has been the problem in shipping for the last 10

the Clarkson PLC Board. He maintained that

The move from over the counter to cleared

or 15 years of freight derivatives trading”. Some

position until March 2006 when he resigned from

transactions has been another development.

companies, he said, saw it as a “cheap ride” into

the Clarkson Group to set up his own business.

The over the counter with credit risk side grew

the market. If only a margin had to be put down

The FMIUG gives its opinion on matters which

from 1992 until 2006 when LCH Clearnet and

on the full face value of the contract, and if the

relate to freight trade derivatives to improve their

SGX, for example, decided to introduce clearing

market went aggressively against them, they

theBaltic Autumn 2011 www.thebaltic.com

FFA could end up in a position of trading two or three

the major problem that the Baltex screen has at

FSA, so the alternative of an option to nominate

times the value of the company.

the moment is that it is competing with the major

a broker was established. This was not attractive

FFABA brokers”.

to the FFABA because it would lose control of

There are a number of ongoing legal cases

business that it was trying to transact.

relating to FFAs at the moment. Van den Abeele

The Baltic does not give any particular

suggests that lawyers were not happy when the

incentive to existing FFABA brokers to make

He is not a buyer of the idea of a Baltex

clearing mechanism came into play “because it

sure Baltex works. The ownerships of Baltex

screen without broker involvement. His message

meant they had nothing more to do”. He says

are not representative of those who are actually

is that it is very much in the interest of the

attempts to revise the contractual terms of OTC

transacting business as brokers, he says. “I am

Baltic to come to an agreement that everyone

contracts are a waste of time. “At the end of the

afraid the Baltex cannot be successful without

is happy with. “I’m a great believer in what

day you can put any clause you like in there and

the positive and aggressive participation of

they are doing, but there is one major element

pay any lawyer as much as you want but if the

the FFABA brokers. The position is, as far as

missing.” During the process, he says, the

guy doesn’t perform, you are in trouble.”

the users group is concerned, whether the

Baltic has not endeared itself to the brokerage

Shipping lawyers, he predicts, are going

Baltic Exchange board is prepared to offer a

community “and therefore there will have to

to be very busy for the rest of the year, with

substantial shareholding in Baltex in order to

be a hell of a lot of work done to convince the

shipping bankruptcies, defaults, and attempts

give a financial incentive to FFABA brokers”.

major brokers to be involved with it”. At the

at renegotiation of contacts put together three

Part of the problem, van den Abeele says, is that

end of the day, he says, he would prefer to

years ago.

members of the FFABA say they will not help

concentrate on a single particular environment

Baltex because it is in competition with them.

rather than on several different screens. That

Cayman-registered hedge fund Castalia Springs Limited is a principal as far as the new

The argument went “sideways”, van den

said, “every broker is trying to protect revenues

Baltex screen is concerned. Van den Abeele

Abeele explains, because the FFABA stipulated

and business. Anything that goes against that

says he is in favour of a neutral screen and the

to the Baltic that they had to create a screen

mantra, they will not support”.

Baltic initiative was strongly supported by the

where the trader would have the obligation to

users group. “What I have said very clearly is that

nominate a broker. This was rejected by the

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2/2/11 16:47:30

theBaltic Autumn 2011 www.thebaltic.com

Corporate viewpoint Rightship

RightShip One area of concern is RightShip’s independence – can people have faith in your system when you are owned by three major dry bulk shippers?

industry know-how to maintain and apply it.

Originally RightShip was formed to pool the

advice, and get the same level of support and

vetting resources and expertise of BHP Billiton

information as high volume charterers who vet

and Rio Tinto. Soon other shippers asked us to

5,000+ vessels per annum.

By offering RightShip as a third party service, we give organisations of all sizes access to a very sophisticated system and group of experts. If you think about it, a one-person start up can search for any vessel in the system, or call for

vet ships for them as a third-party provider, and four years later Cargill became an equal one-third owner.

Warwick Norman

Is the star rating system a bit simplistic?

RightShip would not exist if we could not

The one to five star rating is a quick summary of a

operate independently to equally support the

huge amount of detailed data, across more than

competing interests of our owners. And our

50 risk factors, which has been analysed and

third party business has grown bigger and more

processed by a sophisticated risk algorithm. So

diverse every year. As large as our owners’

while the rating might look simple, it represents a

shipping operations are, they now represent

complex evaluation of risk. We also present the

less than 50% of our vetting activity. That says

data behind the rating, to encourage users to

to me that around 200 customer organisations

understand the risks.

are pleased with the benefits they get out

But the most important thing to say about

of subscribing and are comfortable with our

the rating system is that it is not the end of the

independence.

story. It’s a signpost along the way. We will look,

ightShip has been welcomed across

We see a common acknowledgement among

with our customer, at what has led to a ship

the industry for its comprehensive,

our shareholders and our customers that a

being rated perhaps two stars, and often with

easy-to-use online vessel evaluations,

market with higher standards, where fewer low

updated information we may decide the risk is

24/7 phone and e-mail vetting sup-

cost-high risk vessels are employed, is a healthier

manageable and the ship is suitable for the task.

port from experienced maritime professionals.

market for them all to operate in.

We have all worked in commercial shipping operations, at sea and onshore, and our

Its customer base has grown and widened

Is RightShip suitable for smaller organisations?

customers know the goal of our recommendation

has recently launched an environmental rating to complement its existing risk rating and bring

A system like this is expensive and difficult to

the end, the decision is in their hands.

sustainability to the forefront of the selection

create and maintain. We developed the online

It’s getting the right balance and being both

process.

system and enhance it regularly, and we have

systematic and pragmatic. The human element

built a pool of people with the experience and

is vital in getting the best commercial result. But

every year in its decade of operations, and it

But the rise of RightShip has also been accompanied – at times, and in some quarters – by confusion and even suspicion. CEO Warwick Norman says the vetting agency takes that response seriously and works hard to be transparent about its operations, its motives and its plans.

RightShip continues to be a strong commercial success – do you need to worry about your critics? RightShip has always had the ultimate aim of raising shipping quality standards worldwide. Clearly that goal needs industry players working in the same direction, so we listen and respond openly, and tell anyone who is willing to listen how the system works.

theBaltic Autumn 2011 www.thebaltic.com

is the best commercial outcome for them. And, in

Corporate viewpoint Rightship using a rigorous, independent vetting system means you should get the same decisions, whether it’s 10.00 on Monday morning or 16.30 Friday afternoon, whoever is using the system and whatever their personal level of expertise.

Isn’t your system tough on owners and operators? It’s fair to say some owners have had reservations, although most feel more comfortable when we explain the system. Our vetting is designed to target vessels – and by extension owners and operators who offer them – that carry high risk and do not perform safely and reliably. We do not apologise for that. The flipside is that our approach rewards and gives incentives to owners and operators who invest in their ships, demonstrate good PSC and safety performance, associate their vessels with better-performing flags and class societies and/or link with reputable organisations like AUSMEPA and Green Award. We are always ready to give owners and operators advice and information about how to use RightShip as an opportunity to achieve those commercial rewards. That offer is open, not just to owners and operators who are customers and use our system to benchmark their vessels’

‘approval’ because our system vets each ship

performance, but to all owners and operators.

from scratch each time it’s nominated. New

It just makes sense for organisations to set a

The FAQs on www.rightship.com are a good

data is added every day so a ship’s rating may

common approach to marine risk management

place to start.

change from one nomination to another – which

across their business, not to scrutinise one type

of course is good news for owners, flags, class

of vessel more rigorously than another.

growing significantly over recent years.

How reliable is the data? And how can owners check and fix errors?

societies and others who are acting to remedy can apply their own vetting criteria to determine

How does the environmental rating work?

RightShip acquires reliable data from many

a ship’s suitability, which may have nothing to do

Similar to the risk rating, it analyses a range of

independent sources, including IHS Fairplay,

with the Rightship risk rating – for example, ports

detailed data to give users a rating and displays

casualty data, Port State Control and terminal

and terminals may set specific beam or draft limits

other information they can use in vessel selection

performance information. Owners who are

or receivers may have age or other restrictions.

and benchmarking. In this case the data is

deficiencies and minimise risks. Also, customers

customers can check the system any time,

The simplest answer is that owners make

based on environmental performance, so it helps

while other owners may have concerns raised

their ships more attractive to our customers by

customers meet their sustainability policies and

by charterers or other customers. We encourage

demonstrating good performance, associating

other targets.

owners, whether customers or not, to give us

with higher-performing flags and class societies

We’ve been asked if it is the same as

more data if they wish and tell us if they think

and attending thoroughly and quickly to any

shippingefficiency.org. It uses the same EEDI

anything is incorrect.

identified deficiency. We’re happy to give owners

data – which of course is used by many third

more detailed advice any time.

parties, including the IMO – and the same MEPC

How do owners get their ships recommended or ‘approved’ by RightShip?

vessel types, but gives a much bigger picture of

Isn’t RightShip really designed just for dry bulk ships?

each ship’s total environmental footprint.

Remember that our rating is a signpost, not an

That was the original driver. When we started

vessels, we and many of our customers are

inflexible pass or fail mark. Our recommendation

there were systems for tanker vetting, but on

convinced of the value of using it for comparing

comes down to whether the user, with our

the dry side there was no easy way of collecting

the relative efficiency of existing vessels in the

advice, believes the identified risks have been

the disaggregated data that was all over the

fleet. And, of course, engine efficiency and

addressed or can be managed. A higher-rated

world. However, we’ve always vetted tankers

bunker costs have been a focus in vessel

ship is likely to be accepted more readily than a

as well, adding value to existing regimes for our

selection decisions and charterparty rates for

lower-rated one, but, as mentioned previously,

customers, and are pleased to provide vetting as

some time.

the lower-rated ship can be acceptable on further

a third party contractor under the most recent

Early days, but we’re very pleased with the

investigation, possibly including an inspection.

OCIMF guidelines. In fact, RightShip’s online

level of interest and see this as a growing area of

vets and inspections for tankers have both been

demand for data, advice and support.

It’s also more complicated than a one-off

theBaltic Autumn 2011 www.thebaltic.com

While some people feel EEDI is just for new

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Class

Changing face of class Pavel Shikhov of the Russian Maritime Register took over as president of the International Association of Classification Societies in July.

Quality Systems Certification Scheme (QSCS)”,

The second objective for the next year is to

he said. The scheme has been amended so

strengthen ties and maintain dialogue with the

that audits and assessment of compliance with

industry on a global basis, he said, with one of

the QSCS are now carried out by (currently)

the most important joint working groups being

six independent Accredited Certification Bodies

that dealing with the Energy Efficiency Design

(ACBs), rather than IACS’ own auditors.

Index, as well as close cooperation with the ship

IACS is enhancing its presence in Brussels

The third objective, Mr Shikhof said, is

to the EU this month: Astrid Grunert. Based in

to strengthen positive relationships with the

Brussels, she will be responsible for liasing with

regulators, in particular with the IMO, maintaining

EU bodies and promulgating IACS aims to the

the role of IACS as the principal technical adviser

EU regarding safe and environmentally friendly

to the Organization.

shipping”, Mr Shikhov said.

Pavel Shikhov

industry and industry associations.

and will have its own permanent representative

In this area, IACS will closely follow and

Commenting on IACS’ objectives for the

contribute towards the development of IMO

coming year, he said: “The first objective is to

instruments, applicable to IACS’ activities, in

enhance the quality of IACS’ technical work, and

particular the IMO Recognised Organisations

maintain the Association’s technical leadership

(RO) Code, “so that IACS views are taken into

in the maritime industry.” This specifically

consideration and its members are prepared to

involves the ongoing common structural rules

properly implement the provisions of the IMO

harmonisation work.

instruments when they come into force. Not

“I believe that the new harmonised CSR will

only is development of the new instruments

“The Association of which I took the helm on 1

be of great benefit to industry as they will provide

important for IACS; what is equally important

July differs from what it was a year ago,” Pavel

a set of Rules based on an holistic and common

is to promote and facilitate the implementation

Shikhov said. The Croatian and Polish Registries

set of principles for both ship types (oil tankers

of existing IMO instruments by IACS members,

have come back into membership, which now

and bulkers)”, he said. The first draft of the

Flag states and relevant stakeholders. With

totals 13, the others being: American Bureau of

harmonised CSR text for external review by the

regard to the EU, I have already mentioned that

Shipping; Korean Register of Shipping; Bureau

industry will be released in January 2012, to be

IACS’ presence in Brussels is set to grow”.

Veritas; Lloyd’s Register; China Classification

followed by presentations to the industry during

Society; ClassNK; Det Norske Veritas; RINA;

the first six months of the year.

And last, but not least, the final objective is to promote continual improvement of members’ performance in the pursuit of high quality.

Germanischer Lloyd; the Russian Maritime

In parallel, IACS will continue preparation of

the harmonised CSR for future GBS compliance

“IACS Council has decided to put in

Shipping.

verification by IMO experts to comply with the

place measures to improve further the IACS

IMO’s schedule for the Goal-based Standards

quality system and has tasked the appropriate

implementation.

IACS bodies to detail them. One example of

“The second important change in IACS is the completion of the transition period of its

theBaltic Autumn 2011 www.thebaltic.com

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Class improvement measures is further development

CAP inspection of bottom plates

of Common Performance Indicators (CPIs). CPIs are an important aspect of continual improvement and IACS has decided to adopt CPIs based on PSC data and include these in IACS’ Procedures so that members’ PSC performance is an integral part of QSCS.”

BV slashes CAP time and grows fleet Leading international classification society Bureau Veritas has slashed the reporting time for a Condition Assessment Programme report from three months to one month, and at the same time improved the accessibility and usability of the report. The dramatic shortening of time for the CAP programme reduces costs for shipowners and makes the Bureau Veritas CAP

the UTM (ultrasonic thickness measurement)

RINA attacks bulker losses

a useful tool for risk assessment of vessels and

service provider. At the same time it has revised

Genoa-based classification society RINA has

offshore units for life extension or conversion.

the report to make it deliverable by web to

established rigorous design standards for the

Vincent Lefebvre, head of CAP Section,

the client and, if required, the clients of the

modification or newbuilding of dry bulk cargo

Bureau Veritas, says: “CAP used to be

client, such as charterers, or banks and other

carriers to enable them to carry fine ores safely at

something forced on tanker and bulker owners

stakeholders.

any moisture content. A number of recent bulker

by charterers. Not anymore. Today it is a useful

The Bureau Veritas classed fleet has grown

losses have been attributed to the liquefaction of

risk assessment tool for every form of offshore

strongly during 2011 and in June passed 80

wet nickel ore cargoes. Using RINA’s standards,

structure and vessel. We are seeing increased

million tonnes. Today 9,730 seagoing vessels

ships would be safe even if the cargo liquefied

demand as owners realise they can get a really

and 1,864 inland navigation ships are classed

and the vessels would no longer have to depend

good picture of their asset in a very reasonable

by Bureau Veritas. The growth has been led by

on unreliable moisture tests at the load port to

time. Only this month we have been contracted

the delivery of 400 new vessels and the transfer

determine if the cargo is safe to load or not.

by an owner to perform CAP assessments on

of 198 vessels in service since the beginning of

RINA has also introduced new standards for

two VLCCs, which are candidates for conversion

the year. The fleet is expected to grow in the

other bulk cargoes to complement the IMSBC

to FPSO. And we are also using CAP as a

future as more owners move to benefit from

Code.

building block in life extension programmes

BV’s services.

for gas carriers, FSUs, a dredger and a containership.”

Today the fleet is well balanced in tonnage

Paolo Salza, head of RINA’s technical department

head

says:

“The

mandatory

with 36.8% bulk carriers, 16.7% tankers, 8.3%

application of the International Maritime Solid

Bureau Veritas has cut the CAP reporting

gas carriers, 4.8% passenger vessels, 13.4%

Bulk Cargoes (IMSBC) Code enhances the

time dramatically by completely renewing the

containerships, 3.2% specialised and offshore

safety of bulk carriers through the setting of

reporting software used by the surveyor and by

vessels, and 8.3% for other types of vessels.

constructional and operative requirements. But they don’t set out details of how to safely carry nickel ore and other unprocessed ores, which may liquefy during transportation. Essentially, the rules say vessels may load these ores if the Transportable Moisture Limit is not exceeded. That is fine, but establishing that is difficult, and the TML is easily affected by recent rain or other factors. It is much safer to design or convert the ship to withstand liquefaction of the cargo. That is what our new notation permits.” Says Salza: “Fine ores cargoes such as nickel ore at any moisture content can be safely carried on ships specifically designed or modified to the RINA criteria. Cargo sampling and testing for the purpose of verifying moisture content is not necessary when cargo is loaded on ships complying with RINA criteria. To meet RINA’s new standards, vessels may have to install additional longitudinal bulkheads in some holds. The estimated investment for converting a supramax bulk carrier is around US$3m, but

CAP report

theBaltic Autumn 2011 www.thebaltic.com

Class Water ballast tool

the vessel retains full deadweight capability and flexibility for other trades.” RINA is developing a service for certifying the actual moisture content of cargoes prior to loading for those ships which are not able to meet the standards set out in the RINA notation. RINA has also developed guidelines for the firefighting equipment needed to carry some nitrate cargoes in Group B of the Code. RINA notation IMSBC- Nitrate covers cargoes which possess a chemical hazard which could give rise to a dangerous situation on a ship. For nitrate cargoes a fixed gas fire-extinguishing system is ineffective and a fire extinguishing system giving an equivalent protection is to be provided. The notation IMSBC-Nitrate covers a water fire extinguishing system equivalent to a gas-based one, and the stability criteria to deal with the free surface created in cargo holds by the water used for firefighting. A third new notation, IMSBC-Non Cohesive Cargoes, covers some nitrate cargoes listed by the IMSBC Code as non-cohesive cargoes with an angle of repose less than or equal to 30 deg. These cargoes may be transported with an actual angle of repose less than or equal to 30 deg if the ship is assigned the Additional Class Notation IMSBC-Non Cohesive.

Vision of the future at ABS At ABS, we see that that the ‘business’ of classification is changing, writes Christopher Wiernicki, ABS ceo and president.

The push for energy efficiency is clearly another force driving a change in the business of classification. More stringent environmental regulations

But let me stress the word business – there is a difference in saying

are generating some innovative thinking and discussions that will in turn

class is changing and that the business of class is changing. A change

create the next generations of ship design. We are working closely with

in business means a shift in the products and services offered by an

other key stakeholders to provide the industry with the guidance, tools

organisation to meet market demands. However, it does not mean a

and resources to meet business needs and society’s expectations.

change in its fundamental mission and purpose.

The growth of the offshore industry is also impacting the business

ABS has been a mission-focused organisation for nearly 150 years –

of classification. ABS has been a resource for offshore industry since

marine and offshore safety is and will continue to be our core business

its beginning and we are the leader in the offshore classification sector.

line.

Through this long-term experience, we have witnessed and supported

So, yes, I see our business at ABS changing just as the entire

the transfer of knowledge from the offshore operators to the shipping

shipping and offshore industries are changing. And in many ways I see

industry – in terms of both technology and risk based management.

us not only reacting to market forces, but shaping them.

With more shipowners now entering the offshore market, this knowledge

Data management in particular is one area where ABS differentiates

transfer will increase in terms of speed and scope. Classification societies

itself from other societies. This unique capability helps our customers

need to alter their business operations in a manner that facilitates this

improve operational and safety performance.

transfer to best serve their customers. We have been part of this transfer

ABS has been a leader in data management from the first generation of SafeNet developed two decades ago. Add to that the experience of

of technology from offshore to shipping during the past six decades and will continue to be so.

our Nautical Systems division, and ABS offers shipowners unparalleled

We will keep looking for ways we can provide value-added services to

knowledge of class and operational data management. Our clients clearly

our customers, either through leveraging our Nautical Systems division or

see value in ABS’ integrated service offerings.

through the technology developed through our global research centres.

Our service approach is what is needed by our clients as the

However, we strongly believe that innovation cannot come at the

industry deals with the convergence of three critical areas: equipment

expense of safety. Classification should be an independent entity rather

maintenance, safety and environmental management systems, and

than a large conglomerate, otherwise you run the risk of losing safety as

performance management. As the industry places greater emphasis

your compass. Here at ABS, while we will always enhance and improve

on risk-based decision making, the data available to them will become

the services offered within the realm of marine and offshore safety, our

increasingly important.

business is classification – just as it has been for nearly 150 years.

theBaltic Autumn 2011 www.thebaltic.com

Maritime security

Up in arms Views on the use of armed guards in vessels have changed in recent months. The Baltic talks to Nigel Carden of the UK Club about some of the insurance issues.

s the piracy problem of the coast of

Another area he highlights is Rules for the

Somalia has escalated, the use of

Use of Force. This is of interest because of the

armed guards on vessels has been

debate in the IMO, flag states and the UN about

the focus of attention.

who is responsible for the use of weapons on

While most international bodies were initially

board ships. SOLAS states that the master is

firmly opposed to the use of armed guards on

responsible for the safety of the ship. However,

vessels, in part because of fears of escalation,

the master is not likely to be trained on how to

the stance has changed as they have had to

conduct operations with firearms “and other

acknowledge that their use may be the only

rights should not infringe the basic right of self

way to ensure the safety of crews and ships,

defence as a practical proposition,” Mr Carden

and it is now deemed preferable to leave the

says. “An armed guard is not going to let himself

issue to the individual shipowner.

be captured,” so he could fire in self defence.

How to vet the quality of armed guards

To put the onus on the master in these

is one of the major issues owners face and,

circumstances is an over-simplification. The

contrary to some press reports, Nigel Carden

Norwegian authorities have produced draft

deputy chairman of Thomas Miller, managers

guidelines for the use of armed guards on the

of the UK P&I Club, says the Club does

country’s vessels which discuss the issues in

not operate a “white list” of armed guard

detail. Section 40 of the Norwegian Ship Safety

companies. “We are not experts on auditing

and Security Act gives the master special

armed guard companies,” he says. The Club

authority to implement measures and use force

does ask to see contracts between owners and

to protect the ship against unlawful actions.

the companies, however, “in case the owners

The section also says that all people on

take on additional indemnity liability”, where the

board, including hired armed guards, have

basis of liability needs to be approved by the

to respect the measures implemented by the

Club to provide cover.

Nigel Carden

master. At the same time, the master may have to issue standing orders in relation to the

Quite often, agreements between armed guard companies and owners are knock

in one case, clauses lifted from a contract

night watch or situations where he cannot be

for knock contracts by which any injury of

covering piracy of software. “Alternatively, they

consulted.

the armed guard is the responsibility of the

could be well thought through.” The Club has

company who employs him, while any injury

seen a spectrum of contracts, from the very

responsibilities, Mr Carden says: firstly, the

to the crew is down to the owner, Mr Carden

amateur to the very professional, he says. It is

master’s authority under SOLAS; and secondly,

explains. So in the case of an injury to a crew

not so much interested in the operational aspect

the right of the guards to self defence. Rules for

member by an armed guard, the owner could

of the contract – the owner is expected to deal

the use of force need to be agreed between the

be asked to indemnify the guard company for

with that side – “our interest is in the liabilities,

master, the security company and the owner

any claim brought by the crew member.

especially those that arise by way of indemnity.

under the contract which allow the master to

While knock for knock contracts are

Has, for example, the armed guard company got

exercise his authority but at the same time use

acceptable, Mr Carden says, the Club will

any insurance”. The Club recommends that the

the expertise of the security commander who

look closely at the contracts as “these tell us

company has at least $5m worth of insurance.

is trained in the appropriate measures to take.

something about the armed guard company”.

If they do not, it will not stop the owner using

Despite industry opposition to the use of

Examples he cites of poor contracts include those

the company but will draw his attention to the

armed guards because of the risk of escalation

containing inappropriate boilerplate clauses and,

risks involved.

or crew members being caught in friendly fire,

theBaltic Autumn 2011 www.thebaltic.com

There

are

overlapping

rights

and

Maritime Protection

MAST is a leading maritime security company with a strong global presence and offices in the UK, Malta, Djibouti, Oman, Sri Lanka and South Africa. We can deliver a cost effective security service in the Gulf of Aden and Indian Ocean and provide onboard protection teams who will sail with your ship through the areas of concern. The Company is also active in support of large maritime security projects including exploration, dredging and construction projects in difficult and dangerous environments. MAST is a member of the British Association of Private Security Companies, SAMI and a signatory to the International Code of Conduct for Private Security Companies. MAST has various divisions including an explosives ordnance and survey capability, a specialist security system design and installation department and a mega yacht department. For further information please contact MASTâ&#x20AC;&#x2122;s UK or Malta office. MAST Malta 12 Tigne Place Mezzanine Level M1 Tigne Street Sliema Malta Tel: +356 21 323 773/4 enquiries@mast-security.com MAST UK Endeavour House Coopers End Road Stansted Essex United Kingdom

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Maritime security “because no ship has been taken with armed

and have not been excluded under war risk

guards, it has factually proved to be an effective

clauses.

means of protection,” Mr Carden says.

The level of ransom payments has also been

While some pirates are named on a list of designated persons in the US, it is true to say there is little way of knowing who is receiving a payment dropped onto the deck of a ship.

The International Group of P&I Clubs also

rising this year, with the total so far already

began by opposing the use of armed guards,

exceeding the whole of 2010. Although there

The Save Our Seafarers campaign has

but is currently updating its FAQ sheet on piracy,

have been rumblings about the legality of paying

been trying to keep the issue of crews taken

which includes what the Club covers, definitions

ransoms, and the possible links to terrorist

hostage in the public eye. Another particularly

of weapons of war, the issue of armed guards,

groups, Mr Carden says he does not expect

unpleasant aspect of the current situation is

piracy versus terrorism, club cover when armed

a change, as payment of ransom currently

that pirates are continuing to feather their nests,

guards are used, encouragement to comply

appears to be the only way of obtaining the

as their compatriots starve.

with BMP, ransom payments, general average

release of captive crews.

and the like. Given the enhanced risk of loss of life or escalation of the crisis, the UK Club prefers the use of military vessel protection detachments (VPDs) to privately contracted

armed

security

personnel (PCASP), where the choice exists. A serving member of a military force will have the training and backing of a state for appropriate use of force, which means the owner is less likely to be exposed. There are, however, differences between

jurisdictions

whether serving military personnel are allowed on merchant ships – in Spain, for example, they are not and only PCASP can be permitted. According to Mr Carden, a thorough voyage risk assessment needs to be carried out when deciding whether or not to deploy armed guards. If the conclusion following a risk assessment is that they should be used, then the IMO Interim Guidance on use of PCASPs (MSC.1/Circ.1405 23 May 2011) should be followed on how to go about contracting and how to vet the company. While

there

are

war

risk

exclusions in club rules, the seizure of a ship is not necessarily a war risk. There is also the issue of weapons of war, as damage done by certain weapons, eg mines, torpedoes, bombs, rockets and shells, could result in an exclusion. “Our view is that arms typically used for piracy to date, such as hand guns, AK 47s and basic rocket-propelled grenades, do not trigger the exclusion,” Mr Carden says. The numbers of claims to the Club are rising, but they have still been relatively few,

Secure alongside

theBaltic Autumn 2011 www.thebaltic.com

Corporate viewpoint MAST

MAST – the company M

AST is a leading maritime security

of 60 shipping clients, ranging from specialist tug

company with a strong international

and tow, dredging and towed array operations,

presence and offices in Malta, UK,

to tanker and bulk carrier operations. MAST provides onboard protection teams

Djibouti, Oman and South Africa.

The company is a global supplier of specialist

who embark ships or yachts in areas of high

maritime security services operating in difficult

risk. The teams’ men are all British ex-Royal

and dangerous environments. The company’s

Marines or of equivalent experience and once

mission statement is to deliver an exemplary

on board will use their training and skills to

security service to its clients whilst respecting

train the crew and increase the defences of the

the environment, local and international law and

ship. Depending on the threat, insurer approval,

human rights.

peculiarities of jurisdiction and flag state, armed protection is provided during a passage.

MAST aims to fulfil the needs of its key stakeholders: Customers: to deliver a consistently reliable, appropriate and effective security service. Employees: to provide rewarding and challenging work and development opportunities. Partners: to develop trustworthy and valuable relationships with key partners in support of

Piracy concerns and commercial maritime security capability

Djibouti and Salalah with firearms as well as Sri

“Maritime piracy is costing the international

ensuring support throughout the region. There is

economy $7 to $12 billion per year”

also an option to embark and disembark teams

One Earth Future Foundation, Working Paper, December 2010

between 15 and 18 degrees north in the Red

At the beginning of 2011, over 500 seafarers

The company has permission to operate from Lanka, Mauritius, Kenya and South Africa, thus

Sea.

are being held hostage by Somali pirates. The

Additionally, MAST has a track record of

trend looks set to continue. It is also clear

extricating ships and crews from arbitrary

Comprehensive security support

that the problem is not only spreading further

detentions and deadlocked situations in many

across the Indian Ocean and as far south as the

of the most challenging places around the

MAST provides a comprehensive, integrated

Madagascar channel, but also that the tactics

world. The company has a dedicated response

security service for its clients within the maritime

of the pirates are changing, with pirated vessels

capability with on-scene advice and negotiation,

community.

now being used in an attempt to capture more

dealing with ransom delivery arrangements to

ships.

assistance with the vessels recovery and crew

MAST’s global services.

The company’s key service areas include: • Commercial shipping security

The Lloyd’s of London Joint War Committee

repatriation.

• Yacht security

have also recently extended the excluded areas

Ship hijacks and arbitrary detentions present

• Design and installation of security systems

to the southern areas of the Red Sea, as far east

a unique challenge to marine underwriters and

• Explosives ordnance survey and disposal

as Latitude 78° E and as far south as 12° S. All

shipowners, as no two hijacks are quite the

• Intelligence support

these facts provide a unique challenge for the

same. There is always a complex web of

• Training

shipping community.

different local and commercial interests at play.

• Hijack/Kidnap and Ransom (K&R) response service • Insurance/research and support

In response to the increasing threat to assets at sea and the changing political environment, more shipowners and charterers are being directed to provide for their own security. Private security companies provide part of the answer to the problem, when used in conjunction with the support offered by the International Community and the various naval task forces operating in the region. For over five years, MAST has been delivering a responsive, cost effective security service. Currently, the company is supporting in excess

theBaltic Autumn 2011 www.thebaltic.com

Corporate viewpoint MAST MAST‘s negotiation department is led by a former P&I Club director and a Somali specialist, who have conducted 11 negotiations on behalf of shipowners.

Consultancy and research

Providers signed in November 2010 in Geneva.

Working in conjunction with our clients’

This vital step will give confidence to the shipping

engineers and experts, MAST will ascertain

community when deciding on the selection of a

the level of contamination and likelihood of

security partner.

the presence of ordnance. MAST has clear

The signatory companies to this International

Explosives ordnance disposal (EOD) in the marine environment

expertise, understanding and awareness in the

Code of Conduct for Private Security Service

search and classification of land and underwater

Providers (the “Code”) endorse the principles of

ordnance. After a comprehensive review of each

the Montreux Document and the aforementioned

MAST also provides a unique explosives

particular threat scenario, survey and clearance

“Respect, Protect, Remedy” framework as they

ordnance survey and disposal service in support

plans will be formulated.

apply to PSCs. In so doing, the signatory companies commit to the responsible provision

of pipeline, dredging and port development work

Private security companies and the use of firearms

of Security Services so as to support the rule of

There remains a latent threat of unexploded

There are many valid arguments for and against

protect the interests of their clients.

mines and ordnance in numerous areas of the

the carriage of firearms on ships, and a number

world’s coastal and deep-sea oceans. In certain

of key factors that must be addressed before

parts of the world during any exploratory sea

a decision is taken, including the legalities and

bed operation, pipeline construction or port

rules of engagement.

and has specialist teams capable of deploying around the world.

law, respect the human rights of all persons, and

Private security: an effective partnership and appropriate response

development there is often a need to ensure

MAST provides armed security where the

It is becoming increasingly clear that private

that the area is free from explosives before

law permits and if it is appropriate to the threat.

security companies in partnership with the

work commences. A systematic survey and

The inherent right of self-defence exists as

international coalition authorities and the

clearance operation is essential prior to the

a principle in most jurisdictions and the use

shipping community can ameliorate the effect

commencement of full operations in areas where

of force in these unique circumstances is an

of the current scourge of piracy. Solving the

contamination is likely.

extension of that principle.

problem of piracy, however, remains a political

Detailed feasibility studies outlining the size

With careful research and clear operating

and scope of the operation will be conducted to

procedures, including Rules of Engagement

acquire ordnance data on land or underwater.

based on a proportionate and reasonable

MAST EOD has the necessary combination

response to the threat, it is arguable that the

of experience and expertise in the use of

carriage of firearms represents a pragmatic

underwater survey equipment to ascertain, plan,

decision that can sometimes be justified.

recover and dispose of historic ordnance if revealed during the survey phase.

conundrum for which there does not appear to be any medium-term evidence of a solution.

MAST is also a signatory to the International Code of Conduct for Private Security Service

www.mast-security.com

theBaltic Autumn 2011 www.thebaltic.com

service & quality are within your reach

WWW.REGISTER-IRI.COM TEL: +1 703 620 4880 MARITIME@REGISTER-IRI.COM

INTERNATIONAL REGISTRIES, INC. providing administrative support to the

Marshall Islands Maritime & Corporate Programs

Ship registries

Ship registries must make proactive contribution The Baltic talks to two registries about the challenges they face.

he profile of international ship registries

“Ships need to keep moving or, failing that,

are very workable because when you have a

has changed over the years. National

to be looked after and maintained properly

situation with piracy, it is in effect a combat

identity remains important to some for a

when they are not. A responsible ship registry

situation, but they have basically said that

variety of reasons, but the fact remains

can help achieve those objectives, and much

except in self defence, defence of others or

that open registries today have a two-thirds

else besides. Serious owners and operators are

against the imminent threat of death or injury,

majority of the world’s gross tonnage.

looking for more than a mere tick-box registry

or to prevent the perpetration of a particularly

Irrespective of their sovereignty, ship registries

function. They want help with the likes of ISM

serious crime, firearms should not be used.”

are fundamental to the safe and efficient

and ISPS audits and compliance. They want

From what Mr Maitland says, he is hearing

operation of the world fleet. Scott Bergeron is

proper, timely advice about how to protect their

“firearms will be used as soon as the pirates

chief operating officer of the US-based Liberian

ships against piracy attacks, and practical help

get close to the ship”. There is still a risk, he

International Ship & Corporate Registry, under

in the event that such advice fails to prevent an

says, of security personnel being prosecuted for

whose management the Liberian Registry has

attack. They want to be ahead of the game with

murder or serious injury either by the flag state,

more than doubled in size in the last 10 years

the likes of MLC compliance, and environmental

or any other state asserting legal jurisdiction for

to more than 3,600 ships, the average age

regulations. They want to know about the pros

the crime. “The problem is not the flag state; the

of which has fallen to just 12 years. He says:

and cons of going into lay-up. They might need

problem is the other states,” he says.

“Ship registries have a duty to be proactive,

help with ship finance. And they want to know

By this he means that ships are not only

more than at any time in the history of shipping.

that their flag state is properly represented – and

flagged in flag of convenience states. “A lot of

The pace of legislative and regulatory change,

making a valid contribution to debate at IMO.

these ships are flagged in France or Greece

affecting everything from safety of life at sea to

“These are all factors that owners with

and the like, and there is a lack of clarity as to

protection of the environment, is now such that

newbuildings coming onto the market will need

what they would do if there was an engagement

ship registries have to be the eyes and ears of

to consider carefully, as will owners with ships

between armed security personnel and a bunch

shipowners and operators. They can’t merely

already operating. Ticking boxes – even the right

of pirates that went wrong.”

respond to issues as they arise. They need to

ones – is no longer enough.”

This could well open the floodgates to

be well-informed, proactive and demonstrably

prosecutions because in ‘friendly fire’ incidents

committed to safety and efficiency.

more than one jurisdiction could be involved.

Combating piracy

South Africa, for example, has very strict

needs look no further than the records of the

Piracy is an issue that has been exercising the

requirements as regards the use of firearms.

world’s Port State Control regime, and of other

minds of flag states, and the response has

Different jurisdictions’ approach to the use of

independent arbiters of safety, to assess the

turned to the use of armed guards on vessels.

firearms could put owners or armed guards in

“So far as safety is concerned, the industry

a difficult legal position in the event of a serious

performance of individual registries. The degree

According to Clay Maitland, senior partner

and frequency of inspections has never been

International Registries Inc, which runs the

more onerous in the shipping industry, and that

Marshall Islands registry, everyone has been

As far as the Marshall Islands registry is

is just as it should be. It is the job of good ship

looking closely at the IMO guidelines on the use

concerned, armed guards are allowed on its

registries – sometimes with the help of others,

of privately contracted security personnel in high

ships. However, Mr Maitland cited a recent

such as classification societies – to ensure that

risk areas.

Lloyd’s List article by Clyde & Co partners,

ships are not detained for reasons which are not beyond their control.

incident.

“What they have done is come up with rules

Andrew Preston and Nick Purnell, which warned

for the use of force which frankly I don’t think

that unlawfully using force could expose security

theBaltic Autumn 2011 www.thebaltic.com

Ship registries Another concern is who to hire as a security

Another issue Mr Maitland raises is the hard

One of Mr Maitland’s concerns is that there

firm and are background checks adequate?

line position being taken by the US on ransom

is no international convention which states what

“Some of these flag states, even today, are

payments, which means that payments made

measures can lawfully be used to defend against

distinctly dodgy; they would approve any

to people with links with Al Qaeda or Al Shabab

a pirate attack. “It is basically a free for all to do

security company and you could get a really

would be the subject of prosecution if proved.

whatever you want, as long as you get away

bad bunch of guys. You could even get armed

He believes that if the US tried to prosecute

with it.”

guards who were working for the pirates. Some

on those terms, it might turn out to be a “double-

personnel to criminal sanctions.

The guidance to shipowners, he feels is

of these pirate groups are rather well connected

edged sword and in a court of law they might

vague and “set parameters which sound like

and are sophisticated enough to know that if

get blamed for having caused the problem in

they were written for liability for loss of cargo.

they can get people onto one of these ships in

the first place”.

They don’t correspond to a group of people

a security capacity, it is going to make their job

shooting at each other.”

a lot easier.”

There are concerns that foreign powers, including the US, might have another agenda in Somalia, to cement links with groups in Somalia who are not tied up with Al Qaeda, but may be pirate groups. Mr Maitland believes that the “Americans are willing to turn a blind eye to piracy if the pirates would help them against real Osama Bin Laden types ashore”. Another concern is the Yemen, and he says he feels that the US might not be averse to doing a deal with some of the pirates if it helps to deal with groups in the Yemen. He suggests that there is a lack of military enthusiasm on the part of the US to deal with piracy. “It is entirely possible that if we do ever get some form of stabilised government in Mogadishu that the people running it are going to be the same pirates that we are talking about now.” Mr Maitland believes that a decision may have been made at foreign ministry level that the pirates might service a useful purpose later on. “The big picture is somewhat different,” he says. “We don’t support it but it is a reality. We don’t live in little compartmentalised cubicles or boxes. There are a lot of political issues involved.” He believes that keeping alleged terrorists away from control in Somalia and Yemen is “more important than losing a few tankers” and that the issue has been thought through in Washington and London, to name but two governments. “If we are going to engage with the great powers to suppress piracy, we are going to have to talk to them on these terms. This is a more complicated political issue than is generally understood.” The Marshall Islands, he says, has been saying for the last two or three years that a convention is needed on the suppression of piracy. “There is a notable lack of enthusiasm for a convention that would deal with the arrest and trial of pirates.” He believes that the reason for this is a decision made tacitly “to go easy on the pirates. We don’t want a convention because that would force governments’ hands”. If private armed guards are used, there is not a political issue. Vetting of armed personnel will depend on the quality of the flag state, he says, but as far as the use of armed guards is concerned “it is

Tight recording procedures are essential for registries

theBaltic Autumn 2011 www.thebaltic.com

still better to have them, than not have them”.

Ship agencies

Tough times for agents The life of a ship agent is not easy in the current climate, according to agency network Multiport.

ultiport executive secretary Anna

and perhaps additional shore side services.

network include pre and post-loss marine

Aresti says: “In reality many ship

The Multiport network now covers more

cargo surveys, hull and machinery surveys,

agents are struggling to keep their

than 2,200 ports in over 110 countries and

settlement of claims and conduct recovery

heads above water.

They face a

handles about 10% of the worldwide agency

action on behalf of principals, and a range of

number of the challenges due to the changing

business by port call. It believes that only

non-marine surveying and claims activities.

nature of the shipping industry as a whole.

locally based, independent agents can provide

In welcoming Mr Patterson to his new role,

Mergers and consolidations, for example, have

the value added service that owners and

Tom Bolt, Lloyd’s director of performance

considerably altered their client base.

operators need.

management, said: “I am delighted to welcome

As a

result, competition for new work, and even

“We use ‘Ship Trak’ as our bespoke,

Mark on board and I have high hopes that he

holding on to existing work, is fiercer than

internet-based port agency management

will continue the great work of Karen Bizon and

ever.”

system; which can include a single accounting

her team over the past few years. His wealth

and management centre for any contract, “ Ms

of experience and knowledge of the industry

Aresti explains.

will be a great asset in building the business.”

“Agents have had to become more proactive, flexible and multi-disciplined to convince principals they still have an important

The ship agency is introducing more

Speaking about his new position, Mr

service to offer. A good ship agent not only

measures aimed at streamlining customer

Patterson said: “This appointment is a great

takes care of things when they go wrong, he

services through IT systems.

honour for me. Throughout my time in the

also ensures things do not go wrong in the

“Promoting and maintaining high standards

first place. In the face of these challenges, it is

in the industry is something owners and

Lloyd’s Agency has been known to me. I look

not hard to see why some players have been

operators have to work on every day. But it’s

forward to working with the team to build upon

forced out of the agency market.”

marine insurance industry the work of the

not just about investing time and money in

the solid foundations that have been forged

For those who remain, she says offering

the hardware – such as ships, it’s also about

over the past 200 years.”

the highest standard of service and added

investing in the software – such as people,”

value has never been so important.

Ms Aresti says.

“The

Lloyd’s Agency was established 200 years ago to protect the interests of Lloyd’s marine

biggest challenge is to maintain the support of

underwriters overseas. It now has over 300

principals at a worthwhile level of remuneration.

Lloyd’s agents and 340 sub-agents located in

New boss for Lloyd’s agents

every major port around the globe, forming the

results in the last few years, few agents have

As Lloyd’s Agency Network celebrates its

world’s most extensive surveying and adjusting

shared the same experience because there is

200th anniversary, Mark Patterson has taken

network.

constant pressure on agents to provide more

over the role of controller of agencies from

In recent months there has been some

for less.” First class agents, she says need to

Karen Bizon, and David Lawrence has been

controversy over reforms that Ms Bizon wanted

be able to provide added value services if they

promoted to deputy controller.

to be put in place at the Salvage Arbitration

Whereas most owners have had very lucrative

Branch, which is overseen by the Agency

are mutually beneficial. This can include much

Mr Patterson has over 30 years’ experience

more proactive marketing for their principals

in the insurance industry with INA, AIG

than was previously the case, a need to

and CV Starr. As controller of agencies he

The panel of salvage arbitrators was stood

demonstrate that they have well trained staff,

is responsible for Lloyd’s network of 300

down last year, when Ms Bizon announced the

knowledgeable in all the regulatory imperatives,

agents worldwide. Services offered by the

changes and the arbitrators had to reapply for

theBaltic Autumn 2011 www.thebaltic.com

Network.

Barbados

Maritime Agencies Pvt.Ltd. Barbados Maritime Agencies Pvt Ltd is a leading shipping name engaged in serving all major ships owners of the world, with their well establishment all west Coast of Indian Ports. We provide efficient and hassle free services which are related to various shipping and cargo handling, Ship Agency, Protective Agency as well as Clearing & forwarding. At all Ports of West coast of Indian ports.

For more information on Barbados Maritime Agencies Pvt Ltd Please Visit at: http://www.indiamart.com/barbados & www.barbados.co.in

Ship agencies their positions. Two of them, John Reeder and Belinda Bucknell QC, were not reappointed and sued Lloyd’s for compensation, with an out of court settlement being made.

Iranian sanctions blow for Johnson Stevens Leading liner agency Johnson Stevens went into administration in May after the company fell foul of Iranian sanctions through its representation of Iranian state owned tanker company IRISL. Kestrel Liner Agencies, run by Andrew Thorne has already made deals with administrators PKF to take of agency contracts which were previously handled by Johnson Stevens, under the banner JSA Global Limited. Mr Thorne already owns a number of successful shipping companies in the UK and overseas, and said at the time of the acquisition:

“This

purchase

makes

our

business the UK’s largest liner agency with a group turnover in the region of £50 million and employing over 150 people. This acquisition of Johnson Stevens’ assets and the lines it represents is good news for our company, the staff of Johnson Stevens and for all our principals.”

Exceeding authority A recent judgment in the US Court of Appeals for the Fifth Circuit represents a warning to ship agents not to exceed their authority. According to the Association of Ship Brokers and Agents (USA): “The case is important to remind agents that they should carefully examine the extent of their authority and consider the consequences of acting beyond the precise authority given to them.” The case of QT Trading v Saga Morus & others involved a cargo of steel pipe, with the seller contracting with Daewoo Logistics Corp to transport it from Dalian to Houston. The master had sent a letter to Daewoo authorising it to sign the bills of lading on his behalf in accordance with the mate’s receipts, the ASBA said. However, Daewoo’s agent signed the pipes off as clean on board, in spite of the fact that a P&I inspection prior to loading had found the pipes to be damaged and the information had been noted in the mate’s receipts. The court held that because the agent had signed the bills of lading “as agent for the carrier Daewoo Logistics Corp” he was not signing on behalf of the master and had exceeded his authority by issuing clean bills of lading. More details on the case can be found on www.asba.org

Lloyd’s building

theBaltic Autumn 2011 www.thebaltic.com

Corporate viewpoint Seahorse Ship Agencies Pvt Ltd

The local difference

Indian shipping agency Seahorse Ship Agency is part of the country-wide professional Seahorse Group and offers overseas shipowners a trusted partner in ports across the region The company’s core specialty is its ability to offer in-depth knowledge on local port operating conditions, close but cordial relationships with the port, trade & statutory authorities, a close supervision of cargo and stevedoring operations, thus ensuring minimal cargo damage and claims, as well as offering quick dispatch. The company has a loyal customer base and strong relationships with the trade and has the ability to source and secure cargoes with maximum yield for its principals and partners. The company has a very sound financial standing and is committed to the security of its principals’ funds and prompt remittance of surplus freight, while providing agency services at the most cost effective rates. Working with a reliable and knowledgeable ship agency network can make the ‘difference’ for any shipping company calling at an Indian

Captain Avinash Batra

Captain Somesh Batra

ndia’s buoyant economy and rapid growth has

Founded in 1981 by two ex-ship masters,

Agency has been making the difference for

caused its maritime traffic and cargo volumes to

Captain Avinash Batra and Captain Somesh

its Asian, European and American principals,

soar. According to India’s Ministry of Shipping,

Batra, the company has grown into a multi-

partners and associates for the last 30 years.

cargo handled at its 13 major ports is likely to

faceted Group with container leasing, container

Today it employs 800 staff in all major ports,

more than double from the 561 million tonnes

storage depots, ship manning, vessel chartering

including Nhava Sheva, Mundra, Chennai,

seen in 2009-10 to 1,215 million tonnes by

and capital equipment leasing activities, in

Kolkata and Cochin, as well as various inland

2019-20. Whilst the government has formulated

addition to its major ship agency and freight

locations, including New Delhi, Ahmedabad,

ambitious plans to meet the challenges stemming

forwarding and logistics business. The company

Bangalore and Hyderabad.

from this expected growth, including the develop-

has service diversity to live up to customers’

With its first-hand involvement in international

ment of new terminals, procuring state-of-the-art

expectations and has succeeded in becoming

trade and a full understanding of what a shipowner

cargo handling equipment and instigating an

one of the most recognised and respected

needs, the company also offers representation to

improvement in transport logistics across the

brands in India. As a young and dynamic

overseas foreign ports looking to market their

nation, shipowners wanting quality representation

company, Seahorse has the reputation of

port facilities in India. Seahorse currently markets

and a result oriented Indian partner with a can-do

continuously innovating to provide tailor-made

the Grand Port Maritime Du Havre to its wide

attitude and equipped to meet the demands of

solutions, and acts as agents for all major vessel

customer contacts across India.

International Shipping, need look no further than

types, including container, breakbulk, liquid and

Seahorse Ship Agencies (SSA).

dry bulk vessels.

port. Headquartered in Mumbai, Seahorse Ship

theBaltic Autumn 2011 www.thebaltic.com

Chairman of the Seahorse Group, Avinash Batra, says it is his company’s local knowledge

Corporate viewpoint Seahorse Ship Agencies Pvt Ltd Industry leadership has been both a responsibility and recognition of Seahorse’s market reputation as is evident from its representation on the Board of various Chambers of Commerce and the World Trade Centre.

Seahorse Group

Seahorse has also had the honour of sitting on

Ludhiana

the government’s Port Trusts and over the years has headed various Ship Agents’ Associations & Federation of Ship Agents Associations, and

New Delhi

other important bodies. Capt Batra concludes by saying that as a value statement: “Seahorse always strives

Mundra

to deliver on its promises and endeavours

INDIA

Kandla Ahmedabad

Pipavav Mumbai Nhava Sheva

to live up to the long standing excellent

Kolkatta

Vadodara Nagpur

reputation and brand equity that we enjoy in the market place.”

Haldia

For further details see www.seahorseshipagencies.com

Hyderabad

‘Seahorse Group’ companies

Bangalore

Chennai

Mangalore Cochin

Visakha

Seahorse Offices

Seahorse Ship Agencies Pvt. Ltd. – (ISO 9001-2008)

Associate Offices

Coimbatore

Ship Agency

Depots

Tuticorin

Marine Container Services (I) Pvt. Ltd. Ship Agency

and professionalism which have been at the heart

which Captain Batra believes sets it apart from

of the ongoing Seahorse success story and the

many of its local competitors. The company’s

reason that Seahorse is such a well-known and

pricing structure is predictable, with all fees

trusted name across the shipping industry. He

being agreed in advance.

further states that Seahorse is proud to have on

“We act as facilitators, not middlemen for

board highly qualified motivated managers and

our principals,” notes Captain Batra. “With our

staff who are able to provide customers with real

intellectual capital of value system, knowledge of

value added and insider knowledge, which can

business and vendor bargaining power, we can

be gained only after many years of experience

get the best possible price with quality service

and expertise in the region.

suppliers, stevedores and others, by leveraging

“To

meet

the

ever-changing

business

environments, we are constantly upgrading our business processes with advanced IT systems to

Bay Container Terminal Pvt. Ltd. – (ISO 9001-2008) Storage Depots + Repairs & Equipment Management

Omega Intermodal Container Services Pvt. Ltd. Marine Container Leasing

our agency’s reputation in a very cost effective way.” Combined with a personalised customer

simplify work processes to achieve transparency,

service,

greater efficiency and cost savings. Also, we give

handling skills and simplified procedures,

expeditious

and

efficient

cargo

much importance to integrity of proprietary data

Capt Batra says that the Seahorse Agency

processing systems and have the ability and

network is second to none when it comes to

resources to interface with our principals’ and

the quality of its service. The company, with

industry systems.”

its inherent drive and commitment, ensures

He adds: “In the perpetual quest to provide

accurate handling of all details for ships under

quality service of global standards, Seahorse is

its care, expediting all ship operations in port

a ISO 9001:2000 certified company and always

and turnaround.

Yang Ming Line (India) Pvt. Ltd. – a JV Company Ship Agency – General Agents in India for Yang Ming Line, Taipei

Sanko Kisen Seahorse (India) Pvt. Ltd. – a JV Company Chartering,

COAs,

Offshore,

Coastal

Cargoes and Ship Manning & Management

“I recognise that principals have a choice

agency arrangements with a number of major

Seahorse Buss Infrastructure Pvt. Ltd. – a JV C ompany

of agencies in India, but we believe we offer all

reputable principals, including Korea Marine

Infrastructure Projects & Financing

our business partners not only real expertise,

Transport Co Ltd. Seoul, ANL Container Line,

but also a high degree of business integrity and

Australia, Ceylon Shipping Corp. Ltd, Colombo,

transparency.”

The Sanko Steamship Co Ltd., Tokyo, BHPB

aims to exceed industry quality standards.

It is the transparency offered by Seahorse when it comes to handling client disbursements,

The company has the privilege of having

Singapore, Pacific Basin Shipping, Australia and others.

theBaltic Autumn 2011 www.thebaltic.com

Tristar Container Services (Asia) Pvt. Ltd. – a JV Company Domestic Container Leasing

PORT OF AMSTERDAM MAKE IT YOURS What sort of people do you want to work with? Enthusiastic, committed, involved? People who care about their company and yours? People who work with you to find the best possible solution to your supply chain needs? People who help you keep your customers happy? Then come to the Port of Amsterdam. The port with great accessibility. The port where people are passionate about your cargo. The port where you matter.

Please contact:

Tel: +31 (0)20 523 4560 E-mail: cargo@portofamsterdam.nl LinkedIn: Port of Amsterdam Network

www.portofamsterdam.com

Maritime cluster

ARA: cause for optimism Legal expertise keeps ARA-range trade moving

Handling

he Port of Rotterdam is a strategic

arrest

disputes

than 350 million consumers. Its cargo

clients at judicial auction is just

throughput is estimated at about 430

one aspect of the expertise

million tons of cargo per annum. So you would expect to find in the city of

and

ship

gateway to a European market of more

representing

offered by AKD. It has a thriving shipping,

trade,

transport,

Rotterdam a law firm which is able to offer the

aviation and insurance team,

shipping, trade and transport industries the full

extensively experienced on a

range of professional services which they will

national, European and global

inevitably need.

level. It also has recourse to

Haco van der Houven van Oordt, head of the

other departments within the

shipping, trade and transport team at AKD, says:

firm where there may be a

“Rotterdam is a great maritime city, and the right

cross-over of interests.

place for a serious shipping law firm to be. We are

Van der Houven van Oordt

also in Amsterdam and in other strategic Dutch

explains: “We have direct,

locations. There is nothing like being close to your

in-house access to the skills and

customers – and there is no shortage of those.

experience of our colleagues

“From here, also, we are ideally placed to

other

departments

represent ships coming from the sea and sailing

the firm which, due to the

up the River Scheldt to Antwerp, which can easily

increasingly complex nature of

be arrested on the Dutch part of the river, without

both shipping and the law, is

any special requirements, in connection with a

becoming a key requirement.

legitimate claim against the vessel. In addition,

In the event of a crew-related

counter-security is seldom required. For a number

issue, for example, we can

of reasons, claimants have considered it to be

call on the skills of our labour

a most attractive proposition to seek security

law team, in our work for

through the arrest in the Netherlands of a ship in

shipyards we can collaborate

transit on the Scheldt to, for example, Antwerp.

with our public law specialists,

“The Dutch courts have over many years

while our ship finance team

gained a reputation as a haven for ship arrest,

works closely together with the

and for the swift judicial auction of ships. A

general finance department.

number of mortgagees have even taken active

Haco van der Houven van Oordt

“This helps us greatly to

steps in the past to direct vessels to the ARA

maintain – and improve – the service we are

Chapter 11

(Amsterdam–Rotterdam–Antwerp) region for the

able to offer our clients in what is truly one of the

AKD says that while shipowners may be looking

specific purpose of bringing themselves within the

world’s great maritime clusters.”

increasingly to Chapter 11 filings in the United

ambit of the Dutch courts.”

States to protect their financial interests, Chapter

theBaltic Autumn 2011 www.thebaltic.com

ZEEBRUGGE A NETWORK FOR EUROPE

 49.6 million tonnes of cargo throughput  growing containerhub : 2.5 million TEU  1.6 million new cars  20 daily shortsea links : 12 million tons of roro  excellent distribution opportunities to the markets of the UK and continental Europe

www.portofzeebrugge.be ©luchtfotografie henderyckx - d.neyts/vhc - h.snijkers/la comapnia

Maritime cluster 11 does not enjoy the force of law in the

Several tugs and support vessels, assisting a huge container

Netherlands.

ship to moor off at the quay in Rotterdam Harbour

Van der Houven van Oordt says: “Nobody – and that includes the banks – wants to see shipping companies forced out of business. On the other hand, one cannot expect the banks to forgo the opportunity to ring-fence their losses in cases where they deem this to be the most propitious course of action. “Some observers have predicted an increase by owners in the use of bankruptcy protection filings, and evidence from the banks suggests that a number of owners have indeed threatened to take such steps absent an agreement to restructure their debt. “In this respect it is worth noting that Chapter 11 or similar protection does not enjoy worldwide currency. It works in those countries – including the US, the UK, and in fact many others – that adopt a universal approach to cross-border insolvencies. But there are other countries, most notably the Netherlands, which adopt a territorial approach to bankruptcy. “Banks can take action against the assets of a debtor in the Netherlands, even if the debtor is in liquidation or subject to similar proceedings. Under Dutch law, it is possible to act for banks and to auction vessels in the Netherlands, despite insolvency and/or liquidation proceedings being in place in other countries. Such proceedings do not prevent a bank from enforcing a mortgage in the Netherlands.” The Netherlands is also a jurisdiction in which very few claims enjoy priority over mortgage claims. Moreover, it is widely recognised as a haven for those looking to attach ships and/ or to arrange for their swift judicial auction, and counter-security is seldom required. There are very few legal hurdles to pass in order to obtain leave for attachment and, in addition, there is no obligation for the claimant to pursue its claim in the courts of the Netherlands following the

million tonnes, with outgoing cargo decreasing

attachment.

by 1% to 61 million tonnes, and throughput of

He adds: “While most mortgages are enforced

bulk cargo fell by 4% to 140 million tonnes.

quarter of 2010. “Maintenance

work

refineries

was

also relatively high. The seven million tonnes

in Rotterdam, a significant number are also dealt

According to port statistics, general cargo

decrease in the oil sector was almost entirely

with in Amsterdam. All ships proceeding to

figures were 12% higher at 75 million tonnes but

compensated by the more than double-digit

Antwerp have to transit the River Scheldt, where

throughput of iron ore and scrap metal was down

growth of containers. Just in the first half year,

they are also subject to Netherlands jurisdiction.

7%, crude oil by 8% and mineral oil products

for the first time in decades, an entirely new

In the light of recent events, many observers are

by 9%. Other cargoes’ performance improved,

cargo category was conveyed. LNG will not

predicting a rush on the part of shipowners to

notably agribulk, which was up 26%, coal up 6%,

only contribute to transfers but especially to the

seek Chapter 11 protection. But the Netherlands

other dry bulk up 26%, with other general cargo

structural strengthening of the industrial sector in

is a place where creditors can still pursue the

up 28%, and containers up 12%.

the port and in the strategic energy position of the

attachment of assets, despite a Chapter 11 filing.”

Commenting on the statistics, Hans Smits,

Netherlands and Western Europe.

ceo of the Port of Rotterdam Authority, said: “On

“The Port of Rotterdam’s positive development

the whole, throughput has maintained the high

is connected strongly to world trade, especially

Rotterdam throughput

level of 2010. This also applies to investments

that related to China and Germany. The significant

During the

first half of the year, 215 million

from both the Port of Rotterdam Authority and

unrest on the financial markets and its influence

tonnes of cargo were handled in the Port of

companies. The growth in total throughput was

on the trust of consumers and producers can

Rotterdam, 1% more than in the first half of 2010

hindered mainly by the loss in handling of oil

have a negative influence on world trade and thus

and incoming cargo increased by 2% to 153

products, which was very strong in the first

on our throughput.

theBaltic Autumn 2011 www.thebaltic.com

Maritime cluster

ARAS Shipbrokers, established in 1994 and run by ex seafarers, is active as shipbroker in the field of: •

Sale and Purchase of seagoing vessels (dry cargo, mpp, container, tankers etc), secondhand as well as newbuilding

•

Vessel valuations

•

Consulting

‘Brokers with sea legs’

“There is a significant need for quicker and

lukewarm. Stocks remained high in power

Europe, the US and China (in this case for heavy

clearer political decision-making to sway negative

stations as hot weather reduced energy demand,

fuel oil), in the first half. Overhauls are also going

sentiments. I expect that throughput in the third

a lot of solar and wind energy was generated, and

on in four of the larger refineries which purchase

quarter will stay on target. July was a good month

electricity was imported from the Czech Republic

crude oil via Rotterdam, the authority said.

and the cargo for August and September is

and France. In the third quarter, coal throughput

As far as mineral oils have been concerned

already in the pipeline. In spite of insecurity about

probably remains level because of stock-piling

this year “little was to be earned on futures or

the fourth quarter, I expect throughput for the

for the winter. Further increase is dependent

on regional price differences (arbitrage). Traders

entire year to show a light growth.”

on winter temperatures in Germany,” the port

became less active because of this and the

authority said.

intermediate traders, for example in domestic

Handling of agribulk products increased by more than a quarter, to 4.6 million tonnes,

“Throughput of ore and scrap metal fell

fuel oil in Germany, purchased only what was

according to the port. “The yield of wheat and rape

by 6.9% to 19.4 million tonnes. The German

needed immediately. In general, there was no

seed in France and Germany was disappointing

production of crude steel increased significantly

large demand for products such as gas oil/

because of drought, and the export of Russian

in 2010, but as good as stabilised in the last half

diesel, kerosene and fuel oil. The exception was

grain suffered because of an embargo. Imports

year. In the second half of the year, an increase

naphtha, a feedstock for the chemical industry,

from the United States compensated for this. A

in ore imports is expected. Continued strong

+20%.”

temporary reduction of the EU import tax on feed

demand from the Turkish steel industry stimulated

Other liquid bulk products were up 1.1% to

grains also had a positive effect on transfers.”

the export of scrap metal rise in the first half year.

15.9 million “mainly thanks to chemical production

Port statistics estimated that 12.7 million

The handling of other dry bulk (especially minerals

through which the transfer of methanol and

tonnes of coal (up 5.5%) were handled. Imports

for glass, paper, steel and chemical production)

benzene increased. The transfer of vegetable oils

were disrupted in the first quarter by weather

increased by a fifth to 6.4 million tonnes. “

remained stable. There was a plus for rape seed

conditions in Australia and Columbia, and thick

Refinery margins in North West Europe remain

oil, which compensated for the German decrease

ice in the Baltic Sea. However, they improved in

moderate to poor, according to the port authority.

in production resulting from the drought. Less

the second quarter although the inland transport

“The refinery position in Europe has been

palm oil was actually imported because of its

by water stagnated because of low water levels

causing concern, not least to those companies

high price. The transfer of biofuel decreased,

on the Rhine.

anticipating a need to shift to low-sulphur fuels in

especially because Brazilian producers currently

“On balance, stock increased because

the years to come.” Currently, however, the port

earn more producing sugar than bio-ethanol.”

demand for energy coal from Germany remained

said, there was also a downturn in demand from

theBaltic Autumn 2011 www.thebaltic.com

Good

financial

results

are

important

Maritime cluster This year has seen significant expansion

Port of Antwerp

of storage facilities for oil derivatives, due to investments by, among others, Sea-invest, Oiltanking and ATPC. ITC Rubis and NoordNatie Terminals built large new amounts of tank storage for the chemical industry, which coincided with the general revival of the sector. The volume of dry bulk rose by 2.3% to 10 million tonnes. Growth in coal was up 8.4% to 2.8 million tonnes, fertilisers up 7.4% to 2.5 million tonnes, and sand and gravel up 0.8% to 0.8 million tonnes. However, volumes of ore were down 3.7% to 1.6 million tonnes and scrap metal down 11.3% to 0.6 million tonnes. The number of seagoing ships calling at the port rose by 7.3%, to 7,745. The gross tonnage rose by 13.4% to 158,678,748 GT, whilst the number of freight handling jobs expanded in the first half of 2011 by 4.8%, to 794,232. By way of comparison, the number at the end of the first half of 2010 was 757,674. Operation of INEOS Oxide’s new one million tonne per annum ethylene terminal, expected to start in 2012, will significantly change the shape of the ethylene market in Europe, the company says. Once completed, the new INEOS Terminal will be connected directly to INEOS’ ethylene consuming facilities in the Antwerp-Rotterdam considering the port authority’s extensive middle

unloaded from January to June than in the same

area and into Europe via the ARG ethylene

and long-term investment programme. This

period last year. The total amount for the first six

pipeline

concerns investments in both the existing port

months was 6.4 million tonnes.

Gesellschaft pipeline) linking Antwerp to Cologne

area and Maasvlakte 2.

At 4.4 million tonnes, steel experienced

(formerly

Aethylen-Rohrleitungs-

and the Ruhr industrial areas.

The authority invested €186 million in the first

particularly strong growth of 48%. Steel imports

“By connecting INEOS Olefins & Polymers

half year, against €200 million in the first half year

more than doubled. However, the results for

Europe and the INEOS Oligomers LAO/PAO

in 2010. The expectation is that investments in

conventional/breakbulk were mixed: the volume

facility in Belgium to the new terminal, INEOS

the second half year will increase substantially

of paper and cellulose (0.4 million tonnes) was

will be able to efficiently balance its ethylene

and rise to some €520 million in total this year:

down by 44.5%, while the fruit volume (0.7 million

requirements over its facilities in Europe.

approximately €150 million in the existing port

tonnes) was up by 3.2%. The fruit trade in any

area and €370 million in Maasvlakte 2. In 2010,

case remained stable during the recession.

the port authority invested €445 million.

In the ro-ro sector the port of Antwerp

“It is also clear the new INEOS Ethylene Terminal will re-shape the ethylene market in Europe, opening up a new gateway to world markets,” the company said.

EECV is investing €20 million in the expansion

experienced an expansion of 15.8%, to 2.1

of the terminal in the Europoort for handling

million tonnes. The number of cars handled rose

The Breakbulk Antwerp show in June,

coal. This increases the storage capacity by

by 19.1%, with 526,841 cars being loaded or

organised by JOC, was attended by over 4,100

around 50% and transhipment of coking coal

unloaded during the past six months.

visitors at the conference and tradeshow. This number shows that the maritime and logistics of

can increase by a third. The expansion should be

The volume of bulk freight rose by 21.5% in

ready in 2013 and is a reaction to the reduction

the first half of 2011, to 34.3 million tonnes. The

of coal extraction in Germany, which should be

increase was mainly due to the strong growth in

According to the Amsterdam port authority:

completed in 2018.

liquid bulk, which was up by 31.8% to 24.2 million

“The generic outlook for the short sea and

tonnes, according to the port authority.

breakbulk is positive on the midterm, because

the breakbulk market is moving forward.

The volume of oil derivatives (15.7 million

of the right balance between fleet and growing

Port of Antwerp

tonnes) expanded by 42.2%. Crude oil (2.5 million

demand. More close cooperation in the supply

During the first six months of this year the

tonnes) and chemicals (5.8 million tonnes) also

chain will have a favourable influence on short

port of Antwerp handled 96 million tonnes of

expanded, by 17.1% and 16.8% respectively.

sea.

freight (95,869,516 tonnes). This represents an

According to the port “the excellent figures

Developments in the project cargo segment

increase of 10.4% compared with the first half

reflect Antwerp’s position as the largest integrated

are derived from industrial investments worldwide.

of 2010, when the volume reached 87 million

petrochemical cluster in Europe. The sector

The huge growth in energy demand will certainly

tonnes.

continues to develop rapidly, with companies

push the volumes in, for instance, gas powered

investing in infrastructure and in sustainable

energy plants and further development of offshore

energy solutions”.

wind parks in Europe,” the authority said.

Conventional/breakbulk freight experienced growth, with 16.9% more being loaded and

theBaltic Autumn 2011 www.thebaltic.com

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Cargo focus

Breakbulk operators extend service networks Clive Woodbridge reports on developments.

hile there may be concerns about

whom have responded by announcing new

term chartered by Rickmers, while the Rickmers

the long-term durability of the

services to meet the requirements of breakbulk

Yokohama and Rickmers Tianjin are two 17,000

economic recovery in some parts

cargo shippers serving such regions. Many of

dwt vessels recently delivered by the Xinshun

of the eurozone and in the United

these services are being established using new

Shipyard in China. As these are smaller than the

vessels.

nine 30,000 dwt vessels operated by Rickmers

States, in other regions there are fewer worried

on its round-the-world Pearl String service, they

about the future, it seems. In Asia, and especially

Rickmers-Linie, for instance, has upgraded

China, South America and India, for example,

its services for the Indian market and is now

will give the revamped Indian service greater

this greater optimism is reflected in higher

providing a direct connection between Europe

flexibility when serving ports like Mumbai, where

demand for project cargoes, as investment in

and India with calls in Pakistan and the Middle

locks restrict the size of the vessels that can be

offshore, mining and infrastructure develop-

East on inducement. The base ports served by

utilised.

ments picks up again after the global financial

the enhanced operation are Hamburg, Antwerp,

crisis.

Genoa, Mumbai and Chennai.

Gerhard

Janssen,

Rickmers

director,

marketing and sales, believes the timing

This is good news for operators of

Four vessels will be used on this service. The

of the Indian service upgrade is ideal. He

multipurpose and heavylift tonnage, several of

12,800 dwt Linde and Martine have been long-

says: â&#x20AC;&#x153;We are seeing increasing demand for

AAL Brisbane

theBaltic Autumn 2011 www.thebaltic.com

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AUSTRAL ASIA ASIA LINE LINE pRojEcTS

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Cargo focus breakbulk space on this route. Eastbound we

BBC Everest, the first of a series of eight new

vessels of 15-30,000 dwt to operate mainly

expect steel products as a base load, while

9,280 dwt vessels, each with a lift capacity of

between Odessa in Ukraine and Hereke, Turkey,

westbound there are more and more non-

700 tonnes. In total, the company has around

and the discharge ports of Manzanillo, Panama;

containerisable shipments as India’s engineering

30 vessels still on order for delivery in 2011 and

Barranquilla and Buenaventura, Colombia;

and manufacturing capabilities develop.”

2012, ranging in size from 8,000 to 17,000 dwt

Esmerelda, Ecuador; Callao, Peru; Antofagasta

and with lift capacities of 160 tonnes to 800

and San Antonio, Chile; Montevideo, Uruguay;

tonnes.

Buenos Aires, Argentina; and various Brazilian

Another German shipping company, BBC Chartering, has started a new monthly liner

ports.

service connecting Asia and North America,

The growing significance of the Papua

an initiative aimed at further strengthening its

New Guinea market for breakbulk and project

A key player in the South American breakbulk

position in the liner segment of the breakbulk,

cargoes is reflected in a service enhancement

trades is the US-based TBS International, which

project and heavylift sectors. Svend Andersen,

announced by Swire Shipping this August on

in June this year took delivery of the Maya

managing director, says: “Over the past few

the route between Australia, Papua New Guinea

Princess, the sixth and final vessel in a series

years we have introduced many dedicated liner

and the Solomon Islands. From September, the

of six Roymar-class, 34,000 dwt multipurpose

services, allowing smaller project parcels to be

company is adding a fifth vessel to the service

ships, each of which has box-shaped holds,

shipped around the world. These reliable and

to increase capacity and improve schedule

open hatched and fully retractable hydraulic

regular services are a response to the demands

reliability. George West, line manager, says:

tween decks. With this latest delivery, TBS’ fleet

of global clients in this market segment.”

“The addition of this vessel will enable us to

now stands at 52 vessels, with an aggregate of

BBC Chartering’s new transpacific service

offer a weekly frequency between Australia and

1.6 million dwt. Of these, 30 are tweendeckers

will be calling in Shanghai, Masan, Kobe and

Papua New Guinea and a 14-day frequency

and 22 are handymax bulkers.

Yokohama, as well as Long Beach, Charleston

to the Solomon Islands. Papua New Guinea is

Joseph Royce, chairman, chief executive

and Houston in the US.

central to a number of our trades and the region

and president, says: “These newbuildings were

In recent months, BBC Chartering has also

is a key focus for the group.” The fifth vessel

specifically designed by a TBS team of experts to

joined forces with Teras Cargo Transport to

will be named Coral Chief and is a sister to the

accommodate the needs of our customer base.

launch a service between South East Asia and

four 13,500 dwt Miho class vessels currently

They have been utilised predominantly within

Papua New Guinea to meet a growing demand

deployed on the trade.

our TBS Pacific trade route, which connects the

for breakbulk and project cargo services on

Another new service has been introduced

growing economies of Latin America and East

this route. Furthermore, in May this year BBC

from StederGroup Liner Agency, based in the

Asia, regions where TBS has a long-established

Chartering increased the frequency of its

Netherlands. The Dutch company has set up an

involvement.”

services between Asia and South America.

independent steel and breakbulk cargo service

Alongside South America and Asia, West

With Shanghai, Masan and Kobe as base ports,

operating between Black Sea and Mediterranean

Africa is another increasingly important market

Andino Line operation, which calls at West

ports and the South American east and west

for breakbulk cargoes and one of the key players

Coast South American ports, now has sailings

coast. The service is using handysize geared

in this sector is Safmarine, which operates

every 28 days, while the sailing frequency on the American Line, which caters mainly for the Brazilian market, is now every 21 days. BBC Chartering operates the world’s largest heavylift multipurpose fleet with over 145 vessels having lift capacities up to 800 tonnes. The company has a substantial newbuilding order book and in March this year took delivery of

Rickmers Yokohama, seen here shortly before delivery, is now deployed on the line’s revamped Indian service

100

theBaltic Autumn 2011 www.thebaltic.com

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Cargo focus BBC Everest, the first in a new series of ships for breakbulk and project cargoes

six regular multipurpose vessel (MPV) services

however, now launched a new carrier from the

Asia – Australia West Coast Service, initially on

linking West Africa with Europe, Asia, North

remnants of Beluga. Hansa Heavy Lift is taking

a monthly basis.

America and South Africa. The Safmarine fleet

over seven ships and 50 employees from Beluga

Copenhagen-listed DFDS has sold its

currently consists of 15 chartered vessels and

and the intention is that the fleet will eventually

breakbulk and ro-ro terminal at Maasvlakte

a new, owned vessel, the Safmarine Sumba,

increase to 23 vessels.

in Rotterdam to Rhenus Logistics as a result

which was delivered in October last year. The

In another notable development Austral Asia

of the integration of the ferry company with

company is in the process of expanding its MPV

Line (AAL) has announced the establishment of

Norfolkline’s operations on the North Sea. DFDS

fleet and will add a further five new owned ships

a dedicated project and tramp shipping division

estimates that it made a gain on the sale in the

to its MPV fleet in the second half of 2011 and

based in Singapore. This division will be headed

order of DKK45m and the group’s expected pre-

2012.

up by two former Beluga Projects employees,

tax profits for 2011 increased to an estimated

According to Grant Daly, Safmarine MPV

Nami Khanbabi and Grant Bell. The new initiative

DKK595m compared to the previous estimate

executive: “Our vessels are built to accommodate

is intended to allow AAL to offer a combination

of DKK550m.

the full range of cargoes, including breakbulk,

of liner and tramp shipping solutions within the

“The consolidation of port terminals on the

principally cocoa and coffee, neo-bulks like

Asia-Australia trades and coincides with the

North Sea, in both Holland and England, was

timber and steel, project modules, oil and gas-

delivery of a series of 14 new multipurpose

an important part of our integration plan and this

related cargoes and containers. Safmarine is

heavylift/project cargo ships. Ten of these are

has now been accomplished with synergies on

of the firm belief that our new MPV vessels are

31,000 dwt A-class ships, specifically designed

track. In addition to these operational synergies,

ideally suited to the African business we focus

for the breakbulk and heavylift cargo segments,

we are very pleased to be able to reduce our

on.”

with AAL Brisbane, the first in the series, having

invested capital and create further value from

A key development affecting the breakbulk

entered service in late 2010. These will be

the Norfolkline acquisition by the sale of the

shipping market in the first half of 2011 was the

deployed on AAL’s North Asia – Australia East

Maasvlakte port terminal,” Niels Smedegaard

collapse of one of the leading operators in this

Coast Service gradually replacing the existing

ceo of DFDS said in a statement when the deal

sector, Beluga Shipping, after alleged financial

D-class vessels that have serviced the trade well

was announced.

irregularities, which are still being investigated.

for many years. The remaining four ships are

DFDS Seaways Maasvlakte BV, the company

The US private equity fund Oaktree Capital has,

19,000 dwt sisters which will be deployed in the

that owns and operates the port terminal

theBaltic Autumn 2011 www.thebaltic.com

103

We are committed to environmentally responsible business and operating practices. View our environmental policy at www.fednav.com

Cargo focus concession, was sold to Rhenus for a debt-free

• Dry bulk volumes increased by 5%

volume demand on long haul routes to overseas

consideration of €24.5m (DKK 182m).

• The tanker/liquid bulk market was down 6%.

markets such as the USA and Asia, with less

DFDS entered the concession agreement for

“The strong volume recovery in dry bulk

growth on Intra-European short haul trades

operating the Maasvlakte port terminal in 2002

volumes though Irish ports for agricultural

and following terminal development, operations

products and other core products – coal, grain

“Ro-ro traffic declined on an all-island basis

commenced in 2003. The terminal covers an

and fertilizers – slowed during the second

by 1% in the second quarter of this year, with

area of 200,000m2, including three warehouses.

quarter, with a 5% increase to 3.4 million

413,727 freight units handled, resulting in no

tonnes. This growth compares to strong growth

overall growth for the first six months of 2011.

levels over the previous four quarters as the

The ro-ro sector is heavily weighted to traffic

Irish shipping volume down

sector recovered from the heavy volume erosion

movement to and from the United Kingdom,

The volume of shipping and port traffic declined

suffered in 2008 and 2009.

our largest trading partner. The static volume is

being observed.

during the second quarter of 2011 compared

Liquid bulk volumes such as oil, declined by

likely to have been impacted by weaker demand

to growth rates witnessed over the first three

6% in the second quarter due to weaker domestic

in the UK due to the slower than expected

months of the year, according to traffic figures

and international transhipment demand at the

economic recovery being experienced there.

released last month by the Irish Maritime

main refinery facilities. The breakbulk sector is

“A major factor impacting on all market

Development Office.

the smallest of the five market segments and is

segments has been the steady rise of bunker

The second quarter data indicates that only

primarily made up of shipments of construction

fuel prices, which have increased by more than

one of the five principal freight segments had any

related materials; this decreased by 6% for the

$120 per mt since the start of the year.

growth over the second quarter, while the other

second quarter but increased by 9% for the

“The outlook for the remainder of the year

modes remained flat or recorded some volume

first six months for a total of 477,191 million

is less optimistic than at the beginning of

tonnes,” the IMDO’s director Grant Murphy said

2011, given the slowdown in the wider global

in a statement.

economy. Freight forward agreements (FFAs) for

decline compared to the same period last year. Among the main findings: • Break bulk volumes were down by 6% • Lift on-Lift off (lo-lo) trades remained static at 0% • Roll on-Roll off export traffic was down by

“The lo-lo container sector remained flat

positions to the year-end also indicate weaker

over the second quarter with total volume

demand on the key international shipping trade

rising by 1% for the first six months to 305,867

lanes and a sense of a slower market pulse

TEU. Exports as a subset of these figures grew

beginning to emerge.”

by 6% during the first six months with strong

Your Breakbulk Port

Find out what we can do for you by contacting us at 1-800-776-6652.

theBaltic Autumn 2011 www.thebaltic.com

105

Corporate viewpoint Port of Amsterdam

Port of Amsterdam

– ready for the future

he Amsterdam port area is one of the

area and, once the Westrandroad is completed,

use of the port, its cargo and location. Port of

world’s key international logistics

it will be possible to reach Amsterdam Airport

Amsterdam embraces sustainable companies

Schiphol in 10 minutes from the port.

such as biodiesel factory Vesta Biofuels

hubs. It ranks as Europe’s number

Rail facilities within the port area are also

Amsterdam, which will be converting vegetable

million metric tons of cargo annually.

being constructed and expanded. A new rail

crops into 200,000 tonnes (about 230 million

The port has facilities for handling, storing

yard has been constructed which will be directly

litres) of biodiesel a year, and biodiesel factory

and transshipping all types of goods – from

connected to the main railway network and

Greenmills which will produce sustainable

cocoa beans to coal, from paper to oil –

operational from mid 2011.

biofuels and green energy from organic residues

four port and handles a little over 90

and a quantity of these commodities are also

Another rail yard is being expanded, allowing

such as used frying oil and organic waste.

longer freight trains to depart and this will again

In the port of Amsterdam sustainable energy

The strategic and central location in Europe

be operational from mid 2011. An overpass rail

is also produced through biogas, wind energy

makes the port of Amsterdam easy to reach

junction is also being constructed (operational

and recycling, providing 400,000 households

and ensures excellent connections to all the

in 2014), with the aim of creating a smooth link

with ‘green power’. Port of Amsterdam will

major European markets through deep sea,

to the rail line in the Utrecht and Amersfoort

continue to invest in sustainable energy and,

short sea, inland shipping, rail and road. There

(eastbound) direction.

because of its position in the energy market,

processed in the port area.

are direct connections with the hinterland

To further reduce congestion on the roads,

through the ‘Betuweroute’ (rail) and Amsterdam-

Port of Amsterdam is encouraging, facilitating

Rhine canal (inland waterway). Together with

and investing in additional water and rail

Amsterdam Airport Schiphol (the fourth largest

transport schemes such as the possibility of a

European airport), Port of Amsterdam is part

new high-speed rail line for freight trains going

Reliable port for your containers

of the largest ‘airport-seaport’ combination in

to Milan, with a loading and unloading station at

The port of Amsterdam is centrally located in

Europe, combining air and sea logistic flows of

Amsterdam Airport Schiphol.

Western Europe, right in the economic heart of

both cargo and passengers. Both Amsterdam

its expertise and its innovative infrastructure, is ready for the future transition to biofuels.

Europe. With its excellent connections to the

Airport Schiphol and the metropolitan city of

Front runner in energy

hinterland and ports of Rotterdam and Antwerp,

Amsterdam are within 15 minutes travel from

The Port of Amsterdam stands out as an

the port of Amsterdam offers shipping companies

the seaport.

‘energy’ port and is a significant player within the

the opportunity to service their customers in a

worldwide energy market. Europe and countries

fast, efficient, reliable and sustainable manner.

Infrastructure & accessibility

in other parts of the world have a great need for

With the exemplary service of its terminals,

Port

works

energy and the Port of Amsterdam is a leader

outstanding connections via water, rail and road,

on the maintenance and improvement of its

for delivering the raw material (much of it fossil

sufficient capacity and a personal approach,

infrastructure and accessibility. Together with

energy from oil products and coal) to satisfy this.

Port of Amsterdam strives to create tailor-

the Dutch government, the Province of Noord-

Oil products and coal account for 70%

made solutions for its customers and give every

Holland and the City of Amsterdam, the port of

of transshipments in the port area. A small

Amsterdam is in agreement about the funding

portion of this is used to generate energy for

of a large new sea lock to simplify access to the

the city of Amsterdam – the major part is for the

Amsterdam port region. On 27 November 2009

European and world markets. With an annual

a covenant was signed to this effect and, under

transshipment of 35 million tonnes Amsterdam

the terms of the covenant, the new lock will be

is the largest petrol port in the world. In recent

operational in 2016.

years the port has also become one of the

Amsterdam

continuously

customer ‘the red carpet treatment’.

Port of Amsterdam – make it yours

In the meantime, bottlenecks in the road

leading ports in coal (number two within Europe),

infrastructure are being addressed by the

providing 10 million Dutch households with

construction of the Westrandroad (highway) and

energy.

1013 AA Amsterdam

two main highways surrounding Amsterdam,

Sustainable energy

1000 GK Amsterdam

allowing the Amsterdam port even better access

Port of Amsterdam intends to be one of the

Tel: + 31 20 5234 500

to the hinterland. Two connections to the

most sustainable ports in Europe by 2020. This

Fax: + 31 20 6209 821

Westrandroad will be constructed in the port

will require cleaner operations and intelligent

www.portofamsterdam.nl

the Second Coentunnel. The tunnel will connect

106

De Ruijterkade 7 P.O. Box 19406

theBaltic Autumn 2011 www.thebaltic.com

Port focus

Mixed fortunes for Med box ports Clive Woodbridge looks at the ports’ performance.

ver the past 18 months or so, traffic

The Port of Valencia is investing heavily in its

decline of the port’s container operations has

trends have generally been posi-

so-called northern extension project, which will

continued into 2011, with a further 2.4% fall

tive for the leading Mediterranean

allow the port to double its current operational

in the first five months of 2011. The opening

container ports. However, some

container capacity. Construction of the first

of a new terminal in Algeciras, Total Terminal

hubs in particular face a more uncertain future,

phase, which includes new breakwaters, should

International (TTI) by Hanjin in June 2010, has

as competition from rival transhipment centres

be completed in the autumn of 2011 and

not so far been sufficient to offset the amount

intensifies.

the port authority says it is looking to forge

of business lost to the lower cost North African

partnerships with private investors to build and

hub.

Last year, the Port of Valencia not only cemented its position as the leading Spanish

set up new container facilities within this area.

Spain’s third most important container port,

container port, with a 15% increase to around

One of Valencia’s strengths is that it is not

Barcelona, has been through a difficult period

4.2 million TEU, it also became the busiest

exclusively dependent on transhipment traffic,

in recent years, but last year recovered strongly

container port in the entire Mediterranean region.

as it handles a significant volume of import and

with an 8% increase in throughput to 1.9 million

While the rate of growth may be slowing in 2011,

export business as well as feeder business.

TEU. The port has managed to build further

a 7.7% increase in throughput to 1.76 million

By contrast, Algeciras is almost exclusively a

on this success with an increase in container

TEU for the first five months of 2011 suggests

transhipment centre and last year competition

traffic of more than 18% in the first half of 2011.

that Valencia will still be well ahead of its nearest

from the new Tanger Med hub facility in Morocco

This is attributed in particular to strong growth

rivals for the Mediterranean top spot this year

was primarily responsible for an 8% contraction

in container movements between Barcelona

as well.

in volume to around 2.8 million TEU. The steady

and China, as well as dynamic growth in

Turkish port of Ambarli

theBaltic Autumn 2011 www.thebaltic.com

107

Port focus

containerised trade with countries in the Eastern

TEU, seemingly as a result of lower demand in

gateway, the port of Genoa, pushed its container

Mediterranean, North Africa and the Americas.

France for imported goods.

traffic up by 15% in 2010, to 1.76 million TEU,

Currently, Barcelona has an annual capacity

The port will get a big boost later this year

and has sustained a relatively high rate of

of around 2.5 million TEU a year and so has

with the opening of the new Fos2XL terminal, a

increase in the first five months of this year. The

no urgent need for any further expansion.

joint venture between CMA CGM and DP World,

758,000 TEU handled between January and

Instead it is focusing on initiatives aimed at

while an adjacent facility is being developed for

May represented a 7% increase compared with

improving efficiency, such as the development

the shipping line MSC, which should commence

2010. The transhipment orientated Italian port

of a ‘paperless port’, and moves to improve rail

operations in early 2012. These two terminals

of Gioia Tauro followed a static performance in

connections with its hinterland.

will double Marseille’s current capacity to around

2010, when it handled 2.85 million TEU, the

The leading French Mediterranean port of

2.5 million TEU a year. Looking further ahead,

same as in 2009, with a 6% increase in the

Marseilles has not fared as well as in 2011 as its

another terminal, Fos4XL, has been granted

first five months of 2011. However, Maersk

Spanish counterparts, despite recording a 9%

on a long-term concession to global ports

Line has announced that it is pulling almost all

increase in throughput last year, to just under 1

group HPH. This is currently scheduled to come

its services out of Gioia Tauro, starting in July,

million TEU. In the first half of 2011, container

on-stream around 2018.

with the result that it could lose up to 25% of

traffic slumped by more than 9% to 463,000

Malta Freeport

108

Italy’s

most

important

Mediterranean

Gioia Tauro

theBaltic Autumn 2011 www.thebaltic.com

its container business in the second half of this

Port focus increase in throughput, which can be attributed primarily to the arrival of Cosco Pacific as the new operator of two of the port’s three container terminals. A 35-year concession agreement got underway in October 2009, with sister company, Cosco Container Line, agreeing to use the port as a regional transhipment hub, as well as a gateway into Greece and the Balkans. The Cosco Pacific facility handled 684,000 TEU in 2010, and a further substantial increase is projected for 2011, given a 28% surge in volume in the first half of the year. Four existing container berths at Pier 2 are being extensively upgraded by Cosco Pacific, a project that is expected to be finished by April 2014, while the company is also due to finish

Port of Valencia

building two new berths at Pier 3 by October year. Consequently, the future looks bleak for

back of strong growth in the Turkish economy.

2015. Cosco also has plans to buy a total of 13

the port, which has been beset with industrial

Last year the port handled 2.54 million TEU,

new quay cranes to improve terminal facilities,

disputes, and will almost certainly see a double-

a 38% increase compared with the 1.8 million

and the first six of these are now in use at the

digit rate of decline for the year overall.

TEU handled in 2009. The biggest operator in

port.

Italy has two other significant container

Ambrali is Marport, part of the Arkas group,

The port of Piraeus’ Pier 1 is currently

transhipment centres, Taranto Container Terminal

which handled 1.66 million TEU at its three

operated by OLP, the port authority. However,

and Cagliari International Container Terminal

terminals, compared with 1.26 million TEU the

the Greek’s government’s austerity plans to meet

(CICT), which both saw their business contract

year before. The company now faces tougher

its debt restructuring obligations include further

sharply in 2010. Taranto handled around 584,000

competition from another terminal operator,

privatisation of the port, and the remaining state-

TEU, 21.4% less than in 2009, while CICT’s

Kumport, which took delivery of three new ship-

owned part of the container terminal is expected

throughput shrunk by almost 20% to 680,000

to-shore container gantry cranes in early 2011.

to be included in the sell-off.

Mersin International

TEU. This year the two central Mediterranean hubs have experienced contrasting fortunes,

Port

with Taranto seeing a 17.5% increase in the first

subsidiary

Turkey,

half of 2011, while CICT’s decline continues with

International, also did

a 15.3% lower result than in the first six months

very well in 2010. The

of 2010.

terminal achieved an

PSA

One of the main winners from developments

all-time record high of

at Gioia Tauro is Malta Freeport, which is

1 million TEU for the

expected to handle many of the North Europe-

first time ever, and there

Asia services being transferred by Maersk from

are plans for further

its former Italian hub. Malta Freeport, owned

investment in the facility

by CMA CGM, has seen a steady increase in

traffic over the past four years, reaching 2.37

demand.

keep

pace

with

million TEU last year. With the new Maersk

For many years the

traffic, as well as new business from other

Greek port of Piraeus

carriers, including CSAV Norasia and OOCL,

was

the port could get close to 3 million TEU this

eastern Mediterranean

year, potentially making it the second busiest

container hub, but it

container port in the Mediterranean, ahead of

has fallen from grace

Algeciras and Gioia Tauro.

since reaching a peak of

the

dominant

Malta Freeport is now undertaking dredging

around 1.4 million TEU

works to so that it can berth larger container

in 2007. A succession

vessels with a 16m draught, and will soon be

labour

disputes

expanding the West Quay of Terminal One,

persuaded

several

which is presently used as a lay-by berth, to

shipping lines to move

provide additional capacity. There are also plans

business

to install a 325m quayside crane rail on Terminal

with the result that in

One’s North Quay, and to buy four super post-

2009 the port handled

panamax quay cranes for this facility.

less than 665,000 TEU.

elsewhere,

In the eastern Mediterranean, the Turkish

Last year, however,

port of Ambarli continues to achieve very high

there was a notable

rates of container throughput increase on the

recovery, with a 30%

theBaltic Autumn 2011 www.thebaltic.com

Port of Marseilles

109

Corporate viewpoint Clyde & Co

Clyde & Co a leading international law firm

o other international firm can match

Our international network enables us to act

Clyde & Co’s combination of size,

fast in handling matters and proceedings in

global presence and expertise. We

more than one jurisdiction, offering clients an

have over 150 specialist marine law-

international legal service.

yers worldwide. Our lawyers are qualified in 17

tirling Leech is the Head of the Latin American team and has considerable expe-

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• Shipbuilding, conversion and repair

to offer local knowledge and expertise – we have

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ance and reinsurance.

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complex cross-border matters and for our work

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in emerging markets.

• Commodities trading and finance

We are acknowledged leaders in the maritime industry and provide a full commercial

• Energy • Ports & terminals: multimodal/logistics

legal service to charterers, commodities traders,

att Hannaford works in the London office and specialises in commercial shipping

tanker owners, oil majors, energy companies,

Dispute resolution

governments, P&I clubs, hull and cargo

We adopt the most appropriate method (or

ship sale and purchase (including newbuilding

insurers, shipbuilders, shipyards, shipowners

combination of methods) whether by negotiation,

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and operators in marine transportation, port

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on mergers and acquisitions, joint ventures and

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is adopted, the threat of legal proceedings is

contentious and non-contentious, transactional,

a real and immediate one that enables Clyde &

regulatory and advisory work. The team consists

Co to negotiate from a position of strength. We

of a range of experience and expertise at

have market-leading expertise and resources to

all levels of seniority, led by market leading

pursue cases to final trial where necessary.

law, with particular expertise in ship finance and

specialists recognised for their in-depth industry

Matt Hannaford

knowledge. Our capability is enhanced by the

Tel: +44 (0) 20 7623 1244

in-house technical skills of our Master Mariners.

E-mail: matt.hannaford@clydeco.com

For more on our people, services and locations, visit www.clydeco.com

110

theBaltic Autumn 2010 www.thebaltic.com

Brazil law

Burgeoning Brazil Law firms are showing an increasing interest in a vibrant market.

he dynamism of the Brazilian maritime

market makes it an important one for

considerable experience of supporting clients

lawyers, not least those specialising in

in Brazil. He says: “VRBG is internationally

the offshore oil industry, and the coun-

recognised as one of Brazil’s leading law firms,

Shipyards and other US manufacturers increasingly look to Brazil for an export market

Wikborg

Rein’s

London

office,

has

with an excellent track record in the offshore

While the US Congress was teetering on the

With increasing interest centred on the

oil and gas sector. It is ideally placed to work

brink of a cliff and deciding whether the US

development of Brazil as a marketplace, there

with international clients looking to develop

government, for the first time in its history,

is plenty of work for both local and international

opportunities in a market with such great

should default on its debts, some US shipyards

law firms. Escritório Jurídico Carbone, Farinon,

potential.”

and many manufacturers are looking to Brazil

try has a good deal of legal expertise to offer.

Carvalho da Silva & Advogados Associados,

For a number of years, Wikborg Rein has

for selling ships and other large assets, writes

Law Offices Carl Kincaid and Shipping

supported its clients as they have developed

Joan Bondareff, OF Counsel at Blank Rome

Consultoria are top ranked by Chambers for

their Brazilian business interests, specifically

LLP’s Washington, DC office. These yards

their work in the maritime sector but also in

in the offshore oil and gas sector. But with an

and manufacturers are being assisted in their

areas such as the environment, which has

increase in offshore oil and gas investment

marketing plans by two US agencies, the

become an increasingly important sector, not

in Brazil, it recognised that there was a need

US Maritime Administration and the Export-

least because of offshore oil development.

to provide high-quality, on-the-ground legal

Import Bank (Ex-Im Bank). Both agencies

support.

offer favourable financing terms for companies

A recent alliance reflecting the growing importance of maritime Brazil is that of

Wikborg Rein now has one senior lawyer

international law firm Wikborg Rein with one

working out of the VRBG office in Rio de

of Brazil’s leading law firms, Vieira, Rezende,

Janeiro, and VRBG has one lawyer working out

Barbosa e Guerreiro Advogados (VRBG). The

of the Wikborg Rein office in Shanghai.

seeking foreign sales and Brazil is one of the top targets for these sales. In April 2011, the Maritime Administration approved a $241m loan guarantee to Boldini

alliance agreement between the two firms will

The alliance will have major benefits for the

SA, for the construction of five offshore supply

include cooperation on client referrals and

international clients of both firms. Geir Sviggum,

vessels to be built at Eastern Shipbuilding

joint assignments, and will also involve the

the partner who heads up Wikborg Rein’s

Group in Panama City, FL. The ships are to be

exchange of lawyers and competence building.

Shanghai office, sees significant advantages

deployed in the burgeoning Brazilian oil and gas

Wikborg Rein Global Managing Partner,

in this relationship as links between China and

market and ultimately chartered to Petrobras,

Susanne Munch Thore, says: “Brazil has

Brazil develop. He says: “The transfer of skills,

the Brazilian state-run oil and gas company. With

developed into a high-priority market for many

knowledge, and people will provide clients of

the expansion of the Brazilian oil market, the

of our clients, and it is important that, as a

both firms with access to advisers who have

Maritime Administration was able to find the deal

leading provider of international legal services,

extensive offshore oil and gas experience, and

“economically sound”. It may be a little known

we have the capacity to support our clients

who really understand the key issues in two of

fact but the title XI programme, under which this

wherever business takes them.

the world’s most significant developing markets

guarantee was approved, can approve financing

“This is the first time one of the top

– China and Brazil. Our Shanghai office already

for vessels built for the export market provided

international shipping and offshore oil and

provides support to Chinese clients looking to

the ships are built in a US shipyard. Financing

gas firms has made a commitment like this.

develop their interests in Brazil.”

terms include a guarantee of up to 85% of the

It demonstrates our understanding of the

Chris Grieveson, a partner in Wikborg

project and up to 25 years – a deal that is not

commercial realities of the market, and where

Rein’s Singapore office, meanwhile notes: “I

available at most, if any, US banks. The Boldini

growth will come from for our clients.”

believe we are now in a position to provide an

deal is expected to create at least 300 new jobs

unrivalled service.”

at the yard over the next three years.

Partner Finn Bjørnstad, who will shortly be taking up the role of managing partner

A larger source of financing for export sales

theBaltic Autumn 2011 www.thebaltic.com

111

For more information on these companies and to view this publication online using the latest Page-Turning technology, visit:

www.thebaltic.com AMET UNIVERSITY ARAS SHIPBROKERS B.V. AUSTRAL ASIA LINE BARBADOS MARITIME AGENCIES PVT LTD BBC CHARTERING & LOGISTICS CANFORNAV CHINSAY AB CLYDE & CO D’ALESSANDRO AGENT DEPARTMENT OF MERCHANT SHIPPING (CYPRUS) ERASMUS UNIVERSITY ROTTEDAM FEDNAV LIMITED GRIEG STAR SHIPPING AS INTERNATIONAL MARITIME OFFSHORE SAFETY TRAINING INSTITUTE INTERNATIONAL REGISTRIES INC KTK TUGS LCH CLEARNET LIMITED MAST ASSET SECURITY & TRAINING (MAST) LIMITED

Brazil law comes from the US Export-Import Bank. Ex-Im

Blank

Rome

actively

representing

the region”.

Bank finances its loans and guarantees through

significant Brazilian companies, including a

Increasing client demand for services in Brazil

fees and interest paid on all transactions. Ex-Im

major steel company. The firm also represents

led to Clyde partner, Stirling Leech, relocating to

Bank is the main implementer of President

the owners of the MV Kyla, a bulk carrier which

Rio de Janeiro in 2008.

Obama’s goal of doubling US exports in five

was in a collision in Santos. Blank Rome has

The firm’s planned merger with Barlow Lyde

years. A major target of Ex-Im deals is the

developed close relationships with local Brazilian

& Gilbert means there will be some overlap in the

Brazilian market. For example, in March 2011,

law firms in Sao Paulo and Rio de Janeiro, and

Brazilian legal arena as Barlows has an office in

Ex-Im Bank announced the availability of $1bn

assists companies to secure financing for their

São Paulo.

in financing for the State of Rio de Janeiro

projects in the Brazilian market. It also services

for the acquisition of US infrastructure for the

the offshore sector.

Barlow Lyde & Gilbert gained regulatory approval to operate in Brazil in 2009 and the

2014 World Cup and 2016 Olympics, which

According to John Kimball, head of the

office was formed to meet clients’ increasing

Rio will host. Another Ex-Im facility was used to

firm’s maritime litigation practice, Blank Rome

needs for representation in the region, not least

guarantee $300m in export sales, financed by JP

considers Brazil to be among the most important

arising from the deregulation of the Brazilian

Morgan Chase, and used to finance Petrobras’

areas in the world for future growth in the

reinsurance market in 2008, the law firm said. It

general purchases of US oil and gas equipment

shipping industry.

will also provide a platform to grow relationships

and services. Some of the beneficiaries of

with Latin American-based clients in relation to

this financing are Edison Chouest of Galliano,

their wider international requirements, particularly

LA, Otto Candies of Des Allemands, LA, and

Clyde developments

FMC Technologies of Houston, TX. For further

Clyde & Co first opened an office in Latin

BLG senior partner, Simon Konsta, said at

information, see http://www.exim.gov/brazil.

America in 1988 and lists its core practice areas

the time: “This is a very exciting development for

petrobrasfacts.cfm

within the UK and Asia.

as “aviation, oil, gas and power related matters,

BLG as we look to expand our market-leading

While Rome – or Washington, in this case

insurance and reinsurance, shipping, trade, and

aviation and insurance practices. Our presence

– appears to be burning, savvy US companies

now corporate and finance. A recent growth

in the region will also enable us to extend our

are turning their eyes to opportunities in Brazil

area in the office has been our work in carbon

international arbitration, marine, energy, and trade

and receiving assistance from US agencies

issues and offshore construction contracts. Our

offering in response to client demand.” Clyde &

positioned to help.

Rio office acts as the co-ordinator for work in

Co also has a major aviation practice in Brazil.

theBaltic Autumn 2011 www.thebaltic.com

113

Insurance news

Insurance parlance Rising demand for umbrella insurance, concerns with container safety, and some good results for 2010 are on the insurance agenda.

ith shipping activity again in the

alarming rise in port closures.

Of course, many of these incidents cause

doldrums, the last thing those

This is why The Strike Club, the mutual one-

expensive delays which last fewer than 14

owners and charterers who are

stop-shop for delay cover, has seen a rising

days, and here the Club’s mutual Class III cover

still trading at some kind of profit

demand for its ‘umbrella’ insurance covers.

can provide very valuable protection following

want is for their vessels and cargoes to de

The Club, now in its 54th year, provides

collision, grounding, stranding, or striking fixed

delayed through social and industrial unrest. But

protection for a wide variety of marine trade

and floating objects, for up to 10 days excess four

in the increasingly turbulent economic and trading

delays and vessels going off-hire. Indeed, an

days, for a premium that is less than the vessel’s

environment that has characterised the last two

increasing number of owners are purchasing

one-day operating costs.

years there have been many incidents of strikes

loss-of-hire insurance, typically with a 14-day

hitting ports and terminals, and a somewhat

deductible.

114

theBaltic Autumn 2011 www.thebaltic.com

Additionally, Class III offers cover against the cost of time lost during P&I incidents such as

Insurance news pollution, drugs, illness, quarantine or fines if the

to none. The progress that has been made by

According to Club chairman Donald MacLeod,

ship is arrested, where the P&I cover does not

the American Club during 2010, financially, and

the Club’s success is due to the diversity of

extend to time lost. These situations, and several

in terms of membership development and service

its members and the results of organisational

more, can be covered in excess of, usually, a one-

delivery, point to a bright future.”

changes over the last two years that are now

Joe Hughes, chairman and ceo of the

coming to fruition. “Our strong performance

When the Club’s directors met in Helsinki at

American Club’s managers, SCB Inc, said that

coincides with the culmination of a period of

the end of June they noted that the combined

favourable trends “have continued into 2011.

change for the Club. The most significant of

financial statements showed free reserves

Growth in the Asian sector has been particularly

which was the process of rationalising activities

continuing to exceed $30m, despite the

robust, and owners from this region now account

between our London, Singapore and Vancouver

persistent low level of market interest rates on

for some 34% of the Club’s entered tonnage, up

branch offices, which has brought us closer to

investment grade assets. The Club’s renewal at

from 25% a year earlier. However, the Club’s other

more of our members and their brokers,” he said

January 31 was very successful, with a retention

core constituencies in Europe and North America

in his chairman’s statement.

rate of around 97%, reflecting the fact that Club

continue to advance and remain a vibrant source

members appreciate the value of mutual delay

of membership support and development”.

day deductible.

“The Club is uniquely suited to volatile conditions. Our members, by and large, are

insurance for land/shore-related incidents and

not dependent on freight rates or commodity

also for ship-related incidents.

pricing. Club vessels can be found throughout the

Container safety

world, engaged in a broad spectrum of activities,

their first layer mutual cover could be extended to

Container operators MSC and Maersk are leading

from fishing to offshore, to passenger carriage,

cover more war perils, and the Club’s managers

a drive to enhance container safety – a move that

dredging and towage. Such geographic and

are considering rule changes for 2012/2013 to

has been welcomed by marine insurers. The aim

sectoral diversification acts as a natural hedge

widen the scope of cover.

is to reduce the number of accidents caused by

for the Club against regional, industry-specific

hazardous cargoes, poor stowage in boxes, and

trading volatility,” said MacLeod.

A number of members have asked whether

The Club has also reported continuing strong demand from both owners and charterers for its fixed-premium war risks insurance that offers

inaccurate weight declarations. According to the International Union of Marine Insurance (IUMI) any initiative to improve the

Radioactivity risks

safety of property and human life deserves the

North P&I Club has been advising its members

fullest support. “It will be of positive benefit to

on radioactivity risks following concern being

Good year for American Club

ship and cargo owners and to insurers, who are

expressed on visiting Japanese ports after

Despite the difficult market conditions, the

concerned about the rising number of dangerous

damage to a nuclear power station at Fukushima

American Club says it had a very good year

containerised cargo incidents.

in March 2011.

cover to a limit of $200m.

in 2010 and began 2011 with a strong and

“Marine insurers have over many years been

According to North associate director Mark

stable membership and significantly increased

much more involved in promoting maritime safety.

Robinson: “While official information states

free reserves. Statutory surplus grew by 50% to

GDV, the German marine insurance association,

that levels of radiation outside the Fukushima

$72.2m during the year to December 31, while

has carried out extensive work, again over many

exclusion zone are not harmful, a level of anxiety

the GAAP figure increased by 32% to $63.6m.

years, on container transport and safety.”

is understandable and many shipowners have

“The Club posted an investment return for

The database project, the Cargo Incident

2010 of 7.7% in spite of the difficult economic

Notification System Network (Cinsnet), could go

climate. This was supported by strong earnings in

live this month. The International Group of P&I

“However, shipowners planning to use the

the equities sector and a continuingly favourable

Clubs, the Container Owners’ Association, and

clause to avoid potentially contaminated areas

municipal bond performance.”

mutual insurer for the transport industry, The TT

need to bear in mind that the test of whether a

Club, are also involved in the project.

ship, cargo or crew may be exposed to radiation

Although the Club told its members that

Mike

Davies

clause into their time charterparties.

(Zurich

risk is an objective one. It is not sufficient merely

persistent volatility likely” the Club’s strategy had

Insurance), chairman of IUMI’s cargo committee,

for the master or owner to form a view; any

served to reinforce its overall results, contributing

said that in addition to leading to the improvement

judgement has to be supported by relevant official

to an increase in the value of its cash and funds

of safety on board box ships, Cinsnet will also

authorities, such as the International Atomic

under investment, which grew by about 17% over

reduce the number of significant losses relating to

Energy Authority or World Health Organization,”

the period.

hazardous cargo, poorly stowed containers, and

says Robinson.

“investment prospects remained uncertain, with

Singapore-based

started incorporating BIMCO’s radioactivity risk

Net premium earnings grew by about 2%

inaccurate cargo data supplied to shipping lines,

An EU directive requires, the Club says,

to $105m compared with the prior year, but

all of which have impacted cargo underwriting

employee exposure to be limited to 10,000

net incurred claims fell to $69m from $76m, a

results in recent years.

millirem (mrem) in any period of five successive years, equivalent to an average of 2,000 mrem

reduction of over 9%.

a year, and a maximum annual dose of 5,000

Commenting on the year, the Club’s chairman,

Strong performance by Shipowners

mrem.

been consistently the case over recent years, a

The Shipowners Club has recorded a strong

remains much international disagreement over

significant improvement in the Club’s fortunes

performance for 2010 with more vessels entered

how radiation measurements are calculated, what

was achieved. The Club’s technical fundamentals

with the Club and an increase in gross earned

they mean in reality, what can be considered

are sound, its core business is performing well,

premiums to US$196.8 million (up 13% on last

safe, and the level to which people can protect

its operational capabilities are at the leading edge

year) and an underwriting surplus of US$25.2

themselves.

of market practice, and its global reach is second

million.

Arnold Witte of Donjon Marine, said: “2010 was another challenging year.

However, as has

theBaltic Autumn 2011 www.thebaltic.com

However, the Club points out that there

115

Insurance ITIC

The demise of the daybook and keeping records Andrew Jamieson of the International Transport Intermediaries Club (ITIC) explains why it is important for brokers to keep proper records

ne aspect of handling claims for ITIC

brokers had a contemporaneous note, so his

is that you get to read a fair number

evidence would be preferred.

changed desks, the company’s IT department had simply wiped the machine. In another

of transcripts from arbitrations. A

There is much to be said for the traditional

case the company had lost all messages when

common exchange goes something

approach. Legible, timed and dated entries can

it moved offices and changed computers.

be invaluable in reconstructing events. It is just

Obviously, records should be archived centrally,

that these days the evidence is unlikely to be

and preserved.

like this:

Barrister: “And you recorded this conversation in your daybook?” Broker giving evidence: “No.” Barrister: “Do you keep a daybook?”

found in the pages of a notebook.

requests for their ‘files’, along with aggressive

conversations, these are more often made

messages from the parties’ lawyers alleging that

directly on to copies of emails containing the

the disclosure made was incomplete. Obviously,

relevant offer or counter to which the note refers.

you cannot produce what no longer exists, but

The way business is conducted has

clearly brokers are vulnerable to suggestions

developed, and a large number of fixtures are, Broker: “Not really … just a diary.”

In both these cases, the brokers had received

When there are handwritten notes of

that their failure is convenient.

at least in part, negotiated via MSN exchanges.

In Earles v Barclays Bank, the position in

Often the fixture negotiation can be seen from

relation to litigation was summarised as being

The Baltic Code provides that a daybook

a combination of MSN exchanges and emails.

that, before proceedings are commenced, there

“should always be used by brokers”. This is

These are, of course, direct evidence of the

is a duty not to destroy documents deliberately,

a quotation that the barrister will put to our

exchanges, rather than a person’s note of what

but no duty to preserve documents, whereas

broker in the witness box as evidence of his

they think they said. Making sure that these

after

professional shortcomings.

are retained has become vital in the event of a

documents must be preserved. If they are

dispute.

not preserved, adverse inferences may be

The reality is, however, that the broker’s

the

proceedings

have

commenced

response that he doesn’t keep a daybook

A central feature of English proceedings,

drawn.The obligations of brokers are likely to

appears to reflect the modern practice of many

whether arbitration or litigation, is the obligation

be more extensive. Agency law imposes a

brokers. This is not an attack on a perceived

of disclosure. In essence, the parties will be

duty to keep records of transactions made

failing by newcomers to fixing. A great many

required to disclose to each other all documents

on behalf a principal. ITIC is often asked how

senior brokers do not keep a daybook in the

that bear any relevance to the issues in dispute.

long charterparty documentation should be

traditional manner. To draw a negative inference

It is not open to the parties to pick and choose

kept. There is no absolutely correct answer. A

from the lack of such a book has become unfair

– they have to include not only the documents

common retention policy for those subject to

in respect of many established professional

which assist their case, but also those

English law is not to destroy documentation

brokers.

documents which may be to their detriment.

before seven years from the completion of a

It is important that brokers maintain proper

The concept of a document is not limited to

transaction. The rationale for this policy is that

records to safeguard their position. Cases can

something printed, but also includes something

the standard limitation period for actions in

turn on such records. A few years ago, ITIC

stored electronically.

contract and tort is six years from the date on

was involved in a trial in which the judge was

In the past few months, ITIC has seen a

which the cause of action arose. A claim form

faced with two brokers who had a very different

number of cases where electronic records have

must be issued within that time for it to be valid.

recollection of a telephone conversation. The

been inadvertently lost. One company found

It may not, however, be served until after the

judge commented that both had struck him as

that the messages had only been stored on

limitation period has expired, and it is for this

giving their honest recollection, but one of the

the broker’s individual PC. When the broker

reason that the extra year gives a safety margin.

116

theBaltic Autumn 2011 www.thebaltic.com

Legal news

Avoiding negative headlines Holman Fenwick Willan partner Brian Perrott* considers the implications of the UK Bribery Act. Likewise, Italian operators include contractual

covering the actions of “associated persons”.

protections against Italian Legislative Decree

If “a relevant commercial organisation” fails

231/2001, which places liability on companies

to prevent a person “associated with it” from

for offences committed by its representative.

paying bribes on its behalf, the commercial

Yet with the Bribery Act’s extra territorial reach,

organisation will be in breach of the Act. The

severe financial penalties and potential for

definition of “a relevant commercial organisation”

imprisonment of up to 10 years, operators

includes not only UK companies but also any

would do well to give the Bribery Act equal

company or partnership “which carries on a

consideration. Indeed, a company’s directors

business, or part of a business, in any part of the

and senior officers may be held personally liable

UK”. This offence has a far wider territorial scope

if offences are committed with their consent or

than pre-existing offences under English law

collusion.

and it remains to be seen whether the language

Indemnity clauses are recommended but they can only offer a certain level of protection, and the reputational risk a prosecution under the Bribery Act would bring cannot be quantified.

Brian Perrott

of Section 7 is wide enough to include non-UK companies listed in the UK. A defence exists to Section 7 if the commercial organisation can show it had put

The Bribery Act consolidates existing laws

in place “adequate procedures designed to

prohibiting bribery into three key offences: (i)

prevent” other people from paying bribes on

bribing another person (including individuals and

its behalf. The adequacy of those procedures

companies that operate in the public sector);

will depend on the countries in which operators

(ii) being bribed; and (iii) bribing a foreign public

perform. Of concern to the shipping industry are

ith alleged newspaper practices

official (FPO). There is no requirement that a

dominating the headlines recent-

bribe actually be paid; offering or promising a

facilitation

ly, the coming into force of the

bribe is sufficient to invoke the Act’s provisions.

payments” made to public officials to secure

payments,

called

“grease

Bribery Act 2010 on 1 July could

Offences are committed if any of the above

or accelerate their duties. Whilst the industry is

be considered opportune. Whilst the Act has

acts or omissions occur in the UK. Yet the

strongly opposed to corruption and any form of

no retrospective effect, going forward, it has

Act goes further. It is enough that acts or

facilitation payments, it has to be recognised that

implications for the energy and shipping industry

omissions are committed by a person “with a

without them, it may be practically impossible for

as a whole.

close connection to the UK”, which includes

shipping companies to perform their legitimate

UK citizens, UK residents and UK incorporated

activities in certain parts of the world. Indeed, in

companies.

some ports, facilitation payments are endemic

A survey commissioned by the City of London Corporation in May 2010 highlighted that the shipping industry is at “high risk” of

The offence of bribing a foreign public official,

and a fact of life. In certain jurisdictions, it is

falling foul of the Act, where known corruption

as codified in Section 6, has been drafted widely.

often a local requirement for a ship’s master

risks exist in the jurisdictions where the industry

An offence will have been committed even if it

or agent to make payments to port officials

operates.

cannot be proved that the person intended to

to ensure priority berthing and that customs

induce the FPO to perform his job improperly.

clearance of cargo occurs expediently. Without

Owners and charterers will be used to navigating the provisions of the US Foreign

Demonstrating that payments are permitted

Corrupt Practices Act, routinely including

under local written law is a defence, but

indemnity clauses in contracts and charterparties

unwritten local custom or practice will not suffice

to protect themselves against the actions of

as a defence under the Act.

agents, joint venture partners and counterparties.

A new offence is codified under Section 7,

theBaltic Autumn 2011 www.thebaltic.com

local cooperation, expensive delays may well occur. Unlike the US Foreign Corrupt Practices Act, the Bribery Act makes no exception for facilitation payments. The Act is very clear that

117

nortonrose.com FINANCIAL INSTITUTIONS ⋅ ENERGY ⋅ INFRASTRUCTURE, MINING AND COMMODITIES ⋅ TRANSPORT ⋅ TECHNOLOGY AND INNOVATION ⋅ PHARMACEUTICALS AND LIFE SCIENCES

Norton Rose Group – Global shipping experts Norton Rose Group is one of a few global legal practices able to provide all the services needed by today’s sophisticated shipping companies. Shipping has been at our core throughout our 200-year history, and today we have over 100 specialist shipping lawyers working from our 39 offices throughout the world. We work with clients in all sectors within the global shipping industry, including commercial and investment banks, lessors, shipowners, charterers, shipyards, P&I clubs and ship managers. For more information, visit www.nortonrose.com/expertise/shipping NR10506

For more information on these companies and to view this publication online using the latest Page-Turning technology, visit:

www.thebaltic.com MAERSK LINER MEDSEA SHIPPING AGENCY NORSAFE AS NORTON ROSE LLP NOS CLEARING ASA PORT AUTHORITY ZEEBRUGGE PORT OF AMSTERDAM PORT OF NEW ORLEANS RIGHTSHIP RHB STEVEDORING & WAREHOUSING RWO GMBH SEAHORSE SHIP AGENCIES PVT LTD SEATECH SHIPPING & PROJECTS (I) PVT. LTD. SEA2CRADLE SEVERN TRENT SERVICES SOUTH OF ENGLAND MANAGEMENT AG SOVCOMFLOT STEDER GROUP B.V. ZAMIL OFFSHORE

Legal news any such payment made by a company, or an

suitable contractual clauses and protections.

agent on the company’s behalf, will be caught

If you would like any further information or

There have been a number of different

by the Act. Whilst it is unlikely a small, one-off

assistance please contact Brian Perrott at

events in which German arbitrators explained

payment would be investigated, a number of

brian.perrott@hfw.com or William Hall-Jones at

the advantages of having disputes decided

similar payments over a period of time could

william.hall-jones @hfw.com

by arbitration in Germany. The overwhelmingly

result in prosecution.

resolution tool for the maritime industry.

* With acknowledgement and thanks to

positive response received by the GMAA

William Hall-Jones for his contributions to this

confirms how much the shipping industry is in

article.

need of a fast, cost efficient and competent

Recommendations

arbitration format. On 5 April 2011, the GMAA was invited by

• Owners and charterers should review their insurance, to ensure they have adequate

German arbitration on the campaign trail

the German Ship Owners’ Association (VDR) to

cover. Cover should include the costs of

Difficult economic circumstances and slow

over arbitration in London. Following a paper

investigating and defending allegations of

business have lead to an increase in the number

presentation session, GMAA members engaged

corruption and bribery.

of disputes writes GMAA secretary Christoph

in a mock arbitration involving a dispute between

• Operators who deal with FPOs should put

Hasche. Creditors pursue their claims more

a shipowner and a shipyard to show “in the

robust procedures in place to ensure that

vigorously and debtors try more often to delay

flesh” the efficient workings of GMAA. Just as

bribes are not offered, promised or given.

payments – to “string their creditors along” – or

in the majority of GMAA cases, this dispute was

• Operators seeking to rely on local written

even to avoid payment altogether on the basis of

settled amicably after the parties presented their

laws as a defence should take local legal

quite creative excuses. Either scenario triggers

case and the arbitrators made a well-reasoned

advice to ensure the relevant laws fall within

tenacious disputes requiring resolution – ideally

proposal for an amicable settlement. About

the Act’s definition of written law.

swiftly, at low costs and without disrupting

20 young delegates attending from different

• Owners and charterers with a UK listing,

business relations between the parties more

shipowning companies were very interested in

branch or subsidiary should review all

than necessary. The topic “dispute resolution”

the advantages of GMAA arbitration, and a lively

business practices to determine if they have

is commonly ignored when new contacts are

discussion with the panellists followed.

a UK connection and if they could be said

negotiated, thereby thoroughly underestimating

On 6 April 2011, the first ‘GMAA Academy’

to be carrying on a business or part of a

its factual – and legal – significance. It is often

session kicked off at the office of the GMAA

business in the UK.

only when the parties end up at loggerheads

secretariat in the Hanseatic Trade Centre in

that they realise their dispute resolution system

Hamburg, attended by about 50 delegates from

commercial

is inadequate. The German Maritime Arbitration

the core of the maritime industry – technical

organisation” must carefully consider their risk

Association (GMAA) has thus organised a

experts and representatives from shipping

management and compliance procedures.

series of presentations and seminars to show

companies – being introduced to the ins and

The larger the company, the more stringent

the importance of arbitration in Germany to

outs of GMAA procedure by experts and veteran

the procedures should be. Due diligence

the international shipping world to give an

arbitrators.

should be carried out on counterparties,

inside view of procedural areas of interest and,

Finally, on 25 April 2011, six GMAA members

agents,

and

generally, to assist in the better understanding of

travelled to Istanbul to present GMAA, including a

employees, and all transactions should be

German arbitration and its suitability as a dispute

mock arbitration session at the Turkish Chamber

insurance, including Directors and Officers

• Owners and charterers who fall within the

definition

joint

“relevant

venture

partners

expand on the advantages of German arbitration

reviewed and the risks assessed. Procedures

of Shipping. The Turkish shipping community

preventing bribery should be put in place and

was very interested in the efficient, professional

communicated to all employees with training

and fair procedure under the GMAA Rules.

given where necessary. All procedures

We were very pleased to see that the GMAA

should be monitored and regularly reviewed.

procedure fully meets the expectations and

• Ensure

contracts

and

needs of the international shipping community.

charterparties

with associated persons include specific

The GMAA continued its campaign for

contractual protections to the owners

German maritime arbitration in May. On 11 May

Act,

2011 ‘GMAA 40’ had its first meeting. The ‘sub-

together with more general “anti-bribery”

40s’ is an informal group of younger professionals

clauses. Obligations should be placed on

with an interest in maritime arbitration, who

counterparties and agents to impose similar

meet to exchange their views and experiences.

responsibilities and duties in their own

The main topic of the event was the legal

contracts with other businesses who will be

impact of the nuclear catastrophe in Japan on

performing services on behalf of the operator.

the shipping industry. On 20 May 2011, the

This practice is commonplace in contracts

Hamburg Chamber of Commerce organised the

and charterparties for owners and charterers

China Arbitration Day 2011 in cooperation with

with a US link, and the same caution is

the GMAA. Just a few days later, on 26 May

strongly recommended.

2011, the GMAA was invited to the Maritime

Holman Fenwick Willan is actively involved in

Competent Centre in Leer (East Freesia) to show

advising clients on compliance with the Bribery

how arbitration works under GMAA Rules. This

Act. We are able to offer guidance on corporate

event was organised together with the University

charterers

liability

under

the

compliance procedures and the inclusion of

Dr Christoph Hasche

theBaltic Autumn 2011 www.thebaltic.com

of Emden/Leer, Faculty of Shipping. Finally, a

119

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29 expert speakers including His Excellency, President Abdirahman Mohamud Farole President Puntland State of Somalia Hon. Saeed Mohamed Rage Minister of Maritime Transport, Ports and Counter Piracy Puntland State of Somalia Rt Hon. John F. Spellar MP Deputy Opposition Spokesman Foreign Affairs UK Government Colonel John Steed Principal Military Advisor to SRSG UNPOS & Chief of Counter Piracy Unit United Nations Political Office for Somalia Alan Cole Counter Piracy Programme Coordinator United Nations Office of Drugs and Crime (UNODC) Henrik Ehlers Kragh Head of Anti-Piracy Coordination Maersk Line

Captain Keith Blount Chief of Staff EUNAVFOR

Chris Trelawny Deputy Director, Marine Safety Division IMO Donna Hopkins Coordinator, Counter Piracy and Maritime Security, Bureau of Political Military Affairs U.S. Department of State

Tel: +44 (0)20 3141 8700 Fax: +44 (0)20 7222 2685 Email: info@hansonwade.com

www.piracy-europe.com

Legal news special highlight was the seminar on arbitration conducted by Germanischer Lloyd; the German Classification Society and the GMAA agreed to cooperate on the topic of dispute resolution on a worldwide basis. Why are German shipping lawyers and the members of the GMAA so convinced of the advantages of German arbitration? The German Maritime Arbitration Association – GMAA for short – has, for the past few decades, provided the global maritime sector with high-quality arbitration facilities for resolving disputes in all areas of shipping. Germany is becoming more and more popular as a venue for international arbitration. In international shipping in particular, the large majority of contracts provide for disputes to be settled by arbitration – above all charterparties, shipbuilding contracts, management agreements and bills of lading. An increasing number of parties, in particular from

outside Germany, are agreeing that disputes between them should be settled or determined

The clause can have, for example, the following

legal representation) are consistently lower than

in accordance with the GMAA Rules.

wording where the desired national law is inserted

those of lawyers in other countries. All this saves

Based on German procedural law and the

in the blank (if no national law is stated, German

time and money.

UNCITRAL rules, the GMAA has established

law applies to the substantive questions of law,

The more than 140 members of the GMAA,

sector-oriented arbitration rules which ensure

including international conventions incorporated

who come from Germany, England, the USA,

high quality, legally certain, independent, quick,

into German law):

France and Switzerland, are specialised maritime

efficient and cost-effective proceedings, resulting

“All disputes arising out of or in connection

law lawyers, or professionals from the shipping

in awards which are enforceable worldwide.

with this contract or concerning its validity shall

industry, experts and former judges. They

These arbitration rules have stood the test

be finally settled by arbitration in accordance with

have great experience in maritime arbitration,

of time for nearly three decades. They are

the Arbitration Rules of the German Maritime

are familiar with GMAA proceedings, and are

adapted as necessary to current developments

Arbitration Association. [________] law to apply.”

available to the maritime sector the world over

The arbitration clause is also valid in its short

for appointment as party representatives or

in practice and case law. Proceedings under the GMAA compare

form:

arbitrators.

favourably with those in other jurisdictions. But

“GMAA Arbitration, [________] law to apply.”

GMAA has recently entered into a coorperation

they differ from arbitration proceedings in other

Even where a foreign substantive law is

agreement with the Association of German

countries in a number of respects. At the

applicable, the proceedings still reflect German

Marine Experts – Verband Deutscher Schiffahrt-

heart of these differences is Section 13 of the

principles of thoroughness and effectiveness.

Sachverständiger . Whereas arbitrators and the

GMAA Arbitration Rules, according to which the

In contrast to the position under US or English

parties under a GMAA arbitration remain strictly

arbitrators work towards an amicable settlement

law, proceedings in Germany do not provide

independent as to which expert is chosen to

at all stages of the proceedings and, when it is

for pre-trial discovery or disclosure, with the

support or decide a case, GMAA and VDSS will

possible, even suggest to the parties the terms

result that the parties are not obliged to provide

cooperate in certain marketing activities and in

of settlement. Thus, an arbitral award is made

a comprehensive exchange of documents.

joint seminars.

only if the arbitrators do not succeed in steering

German procedural law can dispense with

On 21 September 2011 there will be a special

the parties towards a compromise. This does

such pre-trial procedures without a loss of

workshop for experienced GMAA members

not turn GMAA proceedings into mediation, but

quality because of the different standard of

discussing the means to speed up arbitration.

it does introduce mediatory elements into the

proof required. In addition, in Germany, a strict

Under the heading “time is of the essence” the

arbitral proceedings. As a result of this, a quick

test of relevancy slims the proceedings down

workshop will try to establish recommendations

and therefore cost-effective amicable solution

by ensuring that anything which is irrelevant

for lawyers and arbitrators to overcome delaying

to the problem can be achieved in the majority

is thrown out. It is not only the oral hearing,

tactics and to safeguard that a dispute is solved

of cases. If the settlement talks initiated by the

but also the entire procedure which is much

as quickly as possible.

arbitrators fail, the arbitral tribunal delivers a

shorter than in other countries, as a result of

GMAA has founded a sub-committee called

worldwide enforceable award quickly and in

the amicable settlements which are frequently

“GMAA 40”. Twice or three time a year younger

a completely impartial manner, without being

reached.

people being interested in maritime arbitration

The arbitrators’ fees are fixed in accordance

(whether or not they are GMAA members)

Whether or not the substantive questions of

with a schedule which is applied at the outset of

will meet in a casual athmosphere in order to

law forming the basis of the dispute are to be

the case, based on the value of the claim. The

discuss a specific issue.

decided under German law or that of another

hourly rates of German lawyers (it is not actually

Further information on GMAA arbitration and

country, for example English law, is decided

necessary to retain lawyers, because any party

on the GMAA can be found, in English, on the

solely by the parties in the arbitration clause.

can appear before the arbitral tribunal without

following website: www.gmaa.de.

bound by its previous suggestions.

theBaltic Autumn 2011 www.thebaltic.com

121

Commercial profiles

Japanese shipyard orders ‘CleanBallast’ S

umitomo Heavy Industries (SHI-ME) decides

advanced disinfection systems operating in

two further RWO ballast water treatment plants

for the RWO ballast water treat-ment system

parallel. This allows the system to cater for

with discussions for additional ships in the series

differing rates of ballasting and de-ballasting.

at an advanced stage.

RWO Marine Water Technology, a part of

Veolia Water Solutions & Technologies, has

“Besides its very low energy consumption,

The fully IMO type-approved CleanBallast

received an order for three of its ballast water

high product quality and simple system configu-

technology has been developed by RWO since

treatment systems CleanBallast from the

ration, its disinfection performance in low

2003, technologically refined over the years and

Japanese shipyard Sumitomo Heavy Industries

conductivity water without dosing chemicals and

extensively tested in real-life conditions. Even

Marine & Engineering Co. Ltd. (SHI-ME). The

no risk of re-growth of organism during voyage

under extreme situations, such as high sediment

shipyard located in Yokosuka, Japan, has built in

are the reasons SHI-ME decided applying

concentrations, CleanBallast exceeded the IMO

excess of 1,300 ships. Specialising in medium-

CleanBallast,” says Akihiko Masutani, Project

test requirements. The design and the testing of

sized tankers with high added value SHI-ME

Manager of SHI-ME. “In addition, CleanBallast

the plant under realistic environmental conditions

has a reputation in the industry as one of the

also works in intermittent operation or even

is an essential prerequisite in order to guarantee

technology leaders. The ballast water treatment

in turbid water and has a number of further

a rapid and safe intake of ballast water and short

plants of the long-established Bremen company

positive features” he added.

Akihiro Shirai,

times in port. In addition, the efficient removal of

RWO will be installed in 2012 in three Aframax

Deputy General Manager of SHI-ME, says

the sediments considerably lowers tank clean-

tankers which will be built for a European

“RWO’s long time experience in the marine

ing costs and prevents the loss of valuable load

shipowner.

water treatment business field and its excellent

capacities.

The CleanBallast ballast water treatment

technical background will promise us good

system, with a maximum capacity of 3,000

future and mutually beneficial relationship.” The

m³/h, will be equipped with several of RWO’s

shipyard has already signed a letter of intent for

ARAS Shipbrokers A

RAS Shipbrokers is involved in the Sale and

ARAS Shipbrokers B.V. was founded in 1994

Purchase brokerage of sea-going vessels

(at that time under the name Amels Shipbrokers

Calandstraat 2

such Multipurpose dry-cargo vessels, Heavylift-,

B.V.) as an independent shipbrokerage company

3016 CB Rotterdam

container and shortsea dry cargo vessels. Apart

with an office in the city of Rotterdam, The

The Netherlands

from brokerage of secondhand tonnage also

Netherlands. Earlier this century the company

contracting of newbuildings is within the scope

was joined by two new full time brokers; first

T: +31 (0)10 4363410

of the activities of ARAS Shipbrokers.

Roderick Schlick and later on Daan Pijls which

F: +31 (0)10 4367678

both have a sea-going career background and

E: brokers@arasship.nl

are currently ‘manning’ the company.

W: www.arasship.nl

Located in the centre of the shortsea shipping

market

NW-Europe,

ARAS

Shipbrokers is specialized in (but not limited to)

We are looking forward to your inquiries and

tonnage from 1.500 upto 25.000 dwt and has

you are always welcome to visit us in our office.

excellent contacts with both the ship owners and brokerage community around Europe and the rest of the world.

122

Rotterdam Office

theBaltic Autumn 2011 www.thebaltic.com

“BROKERS WITH SEA LEGS”

Commercial profiles

AUSTRAL ASIA LINE – The Regional Project/Heavy-Lift Specialist ustral Asia Line (AAL) is the leading multi-pur-

lift/project vessels, with long, open hatches, box-

pose/ breakbulk liner shipping operator in the

shaped cargo holds, height adjustable twindecks,

Asia-Australia trade. We specialise in the ocean

huge unobstructed deck space and cargo cranes

transportation of very heavy and over-dimensional

providing a lifting capacity of up to 700 metric

project parcels, general breakbulk cargoes, steel

tonnes. From our Head Office in Singapore, regional

products, machinery, containers and even bulk

offices in Brisbane and Shanghai, representative

commodities. We operate a fleet of large and medium-

offices and an extensive agency network

sized, modern, multi-purpose, heavy-lift/project

throughout the region, our team of specialists

vessels, specifically designed to accommodate

has the local presence as well as the commercial

the most diverse mix of cargoes – from light

and operational competence to offer tailor-made shipping solutions – including the most complex

and small-packaged to the heaviest or oversized aggregate or module. Our ships are deployed in

driven special charter voyages, either for single

transport engineering demands.

dedicated, scheduled liner services connecting

sailings or contract commitments.

For further information and shipping enquiries

main ports in North Asia and South-East Asia

Our parent company, Schoeller Holdings of

with key locations on the Australian East Coast

Cyprus, has recently commenced taking delivery

AUSTRAL ASIA LINE, SINGAPORE

and West Coast, with inducement calls within the

of the first units of their substantial 14-ship new

E: enquiries@australasialine.com

wider region including Papua New Guinea and

building programme. A total of 10 vessels of

T: +65-6248 3600

New Caledonia. Inter-Asia services linking North

31,000 tonnes deadweight are delivered from

AUSTRAL ASIA LINE, BRISBANE

Asia and South-East Asia add another service

China and another 4 ships of 19,000 tonnes

T: +61-7-3332 8555

dimension to the framework. These scheduled

deadweight are built in South Korea. These

AUSTRAL ASIA LINE, SHANGHAI

services are being complemented by customer-

vessels are state-of-the-art multi-purpose/heavy

T: +86-21-6135 9600

please contact:

Barbados Maritime Agencies Pvt Ltd I

ndia-based Barbados Maritime Agencies Pvt Ltd. is a leading shipping agent which provides

a complete range of shipping services at all west coast ports of India. The company also has branch or associated offices at most east coast ports of India, and thus covers all Indian ports in order to better serve its valued principals. We specialise in providing agency support at anchorage ports to protect owners’ interests, prevent time loss for vessels, and we offer round the clock safeguard support to shipmasters, deploying vessel to vessel special onboard representatives who monitor complete loading and unloading operations. We have good contacts with all local concerned parties and are able to liaise successfully on our clients’ behalf. “We have a strong and independent work ethic.”

For more about us visit www.barbados.co.in

Fax: +91 288 2663982

Mr Sanjay Chauhan, MD

Cell: +91 98242 12312

Barbados Maritime Agencies Pvt Ltd,

Email: barbados@barbados.co.in

103, 1st Floor, Cams Corner,

barbados@sancharnet.in

Bedi Port Road, Jamnagar

sanjay.dc11@gmail.com

361002 Gujarat, India

www.barbados.co.in

Tel: +91 288 2673982, Direct: +91 288 2553982

theBaltic Autumn 2011 www.thebaltic.com

123

Commercial profiles

KTK Tugs W

ith a fleet of powerful tugs, The Curacao

most effective and professional service.

kinds of ships manoeuvring in difficult conditions.

Towage Company provides superior tow-

As experts in the towage & salvage field,

They are all equipped with state-of-the art

age & salvage services not only in the bus-

our employees are involved in every stage

fire fighting, salvage and telecommunications

tling Curacao harbour, but also throughout the

of client service, from the towage & salvage

equipment. We pride ourselves on the proven

Caribbean, Central America and the northern

request implementation to completion, offering

raw, pure strength of our tugs, the engines and

coastal regions of South America.

continual functional and technical support.

the machinery we have used effectively since

Our services include: ocean towage, harbour

They have degrees from Dutch nautical schools

1985.

and coastal services, barge and dredger

and are constantly brought up-to-date on the

We have the expertise to turn strength into

transportation, fire fighting assistance, port

latest technological developments. Our close

the power to tow thousands of vessels a year

and terminal towage, crew management and

relationship with the Dutch Marine Division

and have the power to provide a range of

training, and technical maintenance, all based on

makes its expertise, support and guidance

professional, reliable and efficient services.

the Lloyd’s Register Quality Standards.

readily available.

Exceptional

functioning

and

effectively

Our mission statement is “Through expertise,

Our extensive skills encompass all aspects of

directing team members with Nautical, Technical

strength becomes power” and the our vision

implementation and operation, including business

and Management skills, coupled with extensive

is to position itself as a strong and reliable

requirements definition and development of

maritime knowledge make the Curacao Towage

towage company, serving both the domestic

functional specifications for client approval. The

Company strong and reliable.

and international sectors.

Curacao Towage Company is always available

Our mission is to exceed the expectations of every client by offering outstanding customer

online for handling client contact. We possess operational and technical

greater

experience that makes us strong and reliable.

Pletterijweg z/n, Willemstad, Curaçao,

value, thus optimising system functionality

Our powerful tugboats stand ready 24 hours a

Tel: (+599(9) 461-1055

and improving operational efficiency. This

day, able to rush out under any circumstances.

Fax: (+599(9) 461-2055

expertise combined with hands-on experienced

The ASD tugs that we possess can pull at a 360o

E-mail: s.reenis@ktktugs.com

employees, ensures that our clients receive the

angle, making them exceptional guides for all

Website: www.ktktugs.com

service,

increased

flexibility,

and

D’Alessandro Logistics W

e are a shipping agency based in Rades,

Our activities include:

For more information please contact:

Tunisia.

• air freight

D’ALESSANDRO LOGISTICS

• dry and liquid bulk

Espace Méditerranée

Vito D’Alessandro started business in the

• exceptional transport

Zone Portuaire Commerciale

shipping field while the company grew to be one

• project cargo

2040 Rades - TUNISIE

of the most important shipping agencies in the

• door-to-door solutions

Tel. +216 71 44 80 50

country. We decided to split its activities into two

• break bulk

Fax.+216 71 44 82 23

Our roots date back to 1924 where founder

distinct entities: D’Alessandro Agent will carry

We are members of the MSAN (Multiport

on liner activities and D’Alessandro Logistics

Shipping Agency Network) and the GPLN

will deal mainly with tramp vessels and logistics-

(Global Project and Logistics Network).

related activities. D’Alessandro Logistics was created in 2004. Since then, we have endeavoured to provide our customers with convenient solutions to their transportation needs. Our staff of professionals are entirely dedicated to efficiently handling complex assignments.

124

theBaltic Autumn 2011 www.thebaltic.com

Email : contact@daa.com.tn www.daa.com.tn

Commercial profiles

Port of New Orleans – the port of choice L

ocated at the center of the world’s busi-

All cargo is served by 75 truck lines, 16

est port complex – Louisiana’s Lower

barge lines and all six Class One railroads.

Mississippi River – the Port of New Orleans

The port’s facilities offer more than 22 million

is the gateway to America’s heartland via a

square feet of cargo handling area and

14,500 mile inland navigable waterway sys-

six million square feet of covered storage

tem, six Class One railroads and the interstate

space. A diverse general cargo port, volumes

highway system. This intermodal connectivity

averaged seven million tonnes in recent years

makes New Orleans ‘the port of choice’ for

and are growing.

the movement of cargoes such as steel and

To learn the latest on the movement of

iron, natural rubber, forest products, coffee,

general cargoes, the Port of New Orleans is

non-ferrous metals, project cargo and manu-

hosting the 2011 Breakbulk Transportation

factured goods.

Conference & Exhibition 25-27 October.

Breakbulk commodities are the raw

The event focuses on traditional breakbulk

materials that drive the US economy, and

logistics, heavy-lift transportation and project cargo issues.

the Port of New Orleans is the ideal port for these cargoes. It is the nation’s top port for

is also big business in New Orleans and in 2011

imported natural rubber, handling more than

the LME named New Orleans an entry point for

350,000 tonnes of the material in 2010. Forest

its steel billets – providing a new dimension to

products like lumber and plywood also account

the port’s breakbulk portfolio. Imported steel is a

For more information on the

for over 1 million tonnes of both import and

stalwart cargo at the port, coming from Japan,

Port of New Orleans,

export cargo for the port. Non-ferrous metals

South Korea, Brazil, Turkey, Italy, Taiwan, India

visit www.portno.com or

traded on the London Metals Exchange (LME)

and China.

call 1 (800) 776-6652.

Grieg Star Shipping AS (Star) G

rieg Star Shipping AS (Star) is in charge of

services from Chile to the Mediterranean and

offices. This allows for quick and accurate

the worldwide marketing and operation of

from Brazil to the Far East, with forest products

solutions to the often-complicated stowage.

and project cargoes.

They also frequently attend to the load and

the Grieg Group’s fleet of advanced open hatch vessels, as well as a fleet of conventional bulk

Star has designed and built cargo handling

discharge to ensure safe and efficient operations.

equipment ranging from pulp frames capable of

In addition to the advanced ships and cargo

Based in Bergen, Norway and with 16 offices

loading 56 tonnes in one lift, to vacuum clamps

handling equipment, Star provides IT solutions,

in strategic locations in Asia, Australia, USA,

for paper rolls with capacity up to 35 tonnes.

enabling shippers, forwarders and agents

Canada and Europe, Star’s open hatch division

These, as well as grabs and other special

to handle everything from documentation to

runs the specialised ships in regularly scheduled

cargo handling gear, are serviced in their own

customs papers.

break bulk parcel trades. Export trades based

workshops in Vancouver and Rotterdam.

carriers.

on North American forest products, aluminum

The Grieg Group has ordered 10 new open

and other break bulk cargoes to Asia, north

hatch conventional crane general cargo carriers,

and south Europe is a substantial part of their

which are due for delivery during 2012-2014. The Conventional Division of Star operates

business. The design features of the open hatch ships

a modern fleet of about 20 geared and grab-

(removable tween decks, gantry cranes upto

supplied conventional ships ranging from 25,000

68 mt, rain protection over unobstructed holds,

to 55,000 dwt trade worldwide, combining

cell guides) allow for fast and safe handling

contracts and tramping. The flexible ships carry

of project cargoes, pipes, windmills, metals,

a variety of cargoes such as coal, coke, alumina,

newsprint,

cargoes.

fertilizers, ores etc. In addition, the Grieg Group

Shippers welcomed these features when Star

has ordered two supramax dry bulk vessels to

built up their successful trades from Asia and

be delivered in the second half of 2012.

containers

and

bulk

Europe back to both coasts of North America.

Both divisions enjoy the support of skilled

New trades are evaluated and added as

operations managers and port captains located

All Star offices welcome your freight enquiries.

the fleet grows. The most recent additions are

both in the headquarters and in the branch

www.griegstar.com

theBaltic Autumn 2011 www.thebaltic.com

125

Commercial profiles

Fednav stays the course M

ontreal-based Fednav Group is on a roll. With an expanding fleet of more efficient

ships, increases in trade and tonnage, and a growing team of experts spread out in more offices, Fednav does not shy away from expansion in difficult times. The Group builds on what is known as the largest ice-class fleet of dry bulk carriers in the world and remains Canada’s largest ocean-going, dry-bulk shipowning and chartering group. Fednav is also stepping up its environmental efforts by meeting and even surpassing government-regulated norms. You could say that Fednav continues to grow strong. This privately owned company, founded in 1944, has committed close to $400 million in 14 new ice-class vessels, including four supramax, eight handymax, and two handysize bulk carriers.

The group’s invaluable experience, including

Vital to the Group’s success are dedicated

The two handysize are sister ships to the

its expertise in navigating in ice-covered waters,

and experienced employees. A highly- trained,

recently delivered Federal Yukina, built at the

has been acquired since the company’s early

growing team of experts ensure continuity,

Oshima shipyard in Japan, that was in the news

days trading to Canada’s far north for community

stability, and dependability. Individuals strive to

in June for being a ‘green’ vessel. Upon delivery

resupply and the provisioning of DEW Line sites.

take operational, environmental standards, and

in 2012 and 2013, these two handy vessels are

This has allowed the company to participate in

efficiency up a notch, while seeking to exceed

expected to join Fednav’s fleet of seaway-sized

all major tide-water mining projects in Canada’s

customer expectations. The growing number

carriers designed to transport steel and other

Arctic, including nickel, copper, and lead mines

of commercial offices ensures Fednav remains

general cargo, along with bulk inbound into the

in Little Deception Bay, Cornwallis, Nanisivik,

close to its market and distinctive clientele.

St. Lawrence River and Great Lakes ports, and

and Voisey’s Bay. Fednav performed the trial

Fednav today has offices on most continents and

bulk cargoes on the outbound voyage.

shipments of iron ore to Europe from the

has, within the last few months, opened a new

Another series of eight handysize ships is

Baffinland Iron Mine’s Mary River deposit on Baffin

office in Singapore – itself, a nation experiencing

currently under construction at the Chinese

Island, and is working in partnership with the

economic growth.

Ouhua shipyard and will deliver between late

company to develop a long-term shipping model.

Ever conscious of minimising its environmental

2011 and early 2012, while four supramaxes,

Fednav was the first and only shipping company

ripples, each new vessel added to the owned fleet

to be built by Oshima shipyard in Japan, are

to design in-house the strongest icebreaking

will consume less fuel, maximise cargo intake,

expected to deliver in 2013 and 2014. These

bulk carrier in the world, the Umiak I. The ship

and yet never compromise safety or quality

new additions will increase the group’s already

was built to trade in ice-covered water north of

standards. Partnering with various environmental

impressive fleet of 27 owned carriers and some

60 degrees year round. In fact, this vessel won

groups, ballast-water management companies,

50-55 other vessels on long-term charter to

a prestigious award for Best Bulk Carrier of the

and as part of the USA-Canada Green Marine

Fednav International Ltd (FIL), a wholly-owned

year in 2009.

initiative, Fednav continues to show its strong

subsidiary of the company. The total fleet of

Support for these voyages includes navigation

commitment to the environment and the marine

80-85 vessels includes a significant number of

software designed and developed internally,

community. The Group was the first Canadian

St. Lawrence Seaway max-size bulk carriers, a

providing navigators with near-real-time satellite

shipping company to make its environmental

growing number of handymax/supramax bulk

imagery, along with ice and weather data that

policy public on its website.

carriers, some multipurpose tween-deck ships,

enhances the safety of voyages in extreme-

and panamaxes.

weather conditions. Fednav’s reputation in the

Fednav stays on course and continues to grow stronger than ever.

Already one of the most modern, the Fednav

Arctic is widely known and has led the company

fleet features newer ships. Newer ships mean

to provide cargo services to ice-bound ports

UMIAK I in Montreal

safer, more fuel-efficient engines, larger cargo-

in the St. Lawrence and Baltic ports during the

FEDERAL SETO in ice

carrying capacity, stronger cranes and reinforced

winter months.

Bulk operation

decks. Winner of the Bulk Ship Operator of the Year at the International Bulk Journal first awards ceremony in 2009, FIL is highly regarded as a dependable and resourceful marine carrier, innovative, and responsive to the needs of a solid customer base. Nearly 70 years of reliable service has allowed FIL to continually venture into new markets and new opportunities to expand its client network.

126

theBaltic Autumn 2011 www.thebaltic.com

Commercial profiles

Medsea Shipping – Malta M

Bunkering

alta, strategically located within the major

As shipbrokers we can offer a complete

trade routes of the Mediterranean, and with

service, from finding the right ship or cargo,

All types of fuel and gas oil are available at

the main ports of Valletta and Marsaxlokk, offers

the charter negotiations, right through to the

competitive prices, delivered on/offshore 24/7

a complete set of maritime services, offered with

invoicing and final payments.

by barge or truck. Furthermore, internationally

commitment and expertise, at very competitive

approved surveying companies can attend on

prices in the interest of today’s shipowners,

Liner agency

operators and charterers.

Being the pioneers in the local container

Medsea Shipping Agency was set up 1999

transhipment

trade,

demand. we

represent

major

and although quite young as a company, all our

shipping lines and feeder operators in our

staff have vast experience in their profession,

area. Our office is geared-up with the latest

ranging between 10 and 30 years. We strive

software for container control, edi and reports

to give a high-quality and economical service;

generation.

it is our intention to build solid and long-lasting relations with our clients.

In addition to containers, we also handle general cargo, bulk, lo-lo, ro-ro, domestic

We are well-known for ship husbandry

and transhipment cargoes. Storage and

services such as crew changes, supply of

warehousing is also available at very competitive

spares, provisions, charts, lubricants and cash

prices, making Malta the Med Hub for many

to master, either when vessels are in port, or

customers.

by service launch while the vessel is passing off

G. Debono Square Msida, MSD 1250

Malta. We even arrange transit visas for crew

Liquid cargoes/ship-to-ship

Malta

members to sign on/off in Malta at a minimal

Crude, product, chemicals, and gases can be

Tel: + 356 25580250 / 25580550

cost.

handled either at oil tanking terminals or by

Fax: + 356 23711010

Other services include on/off hire surveys,

ship-to-ship transfer outside port limits. We can

AOH: + 356 79235199 / 79830195

underwater surveys, hull cleaning and propeller

offer a full package of fenders, hoses, mooring

E-mail: ops@medsea.com.mt

polishing, ship repairs and technical assistance.

masters and surveyors for STS operations.

Web: www.medsea.com.mt

Norton Rose Group is growing A

t the start of 2010, Norton Rose Australia

Shipping has, of course, been at our core

our capabilities and our reach to the benefit of

joined the Group, giving us an unparalleled

throughout our 200-plus-year history, so our

our transport clients. But the sun still never sets

presence and transport capability in the Asia

recent growth could be seen as strengthening a

on the shipping world. We will continue to seek

Pacific region, which has quickly translated into

strength when looking at our capabilities in the

out ways to grow, both our footprint and our

real instructions including our shipping teams

market. But it’s more than that. It’s the practical

expertise, to ensure we remain at the forefront

in London, Singapore and Australia working on

outcome of a dogged belief that global industries

of this industry.

the Gorgon Project. In this very short period we

need to be serviced in a global way. It’s not

have become acknowledged market leaders in

enough to have highly regarded teams clustered

Asia Pacific.

in a few central offices. Shipping is a vast

In May this year, we opened our third German

industry, spanning the world’s continents and

office in Hamburg. Transport (and shipping in

demanding the full spectrum of legal services.

particular) was again one of the key drivers

Meeting that demand requires a capability that

behind the move. With a 25-strong presence in

matches the industry itself.

Hamburg, we’ve added another key international

We believe our recent growth shows our commitment to creating and maintaining that

Harry Theochari, Global Head of Transport,

And then on 1 June this year, we went

sort of capability. It puts us in a position to work

Norton Rose Group

live with a combination that brought a leading

with the shipping industry in a way that no one

3 More London Riverside

South African firm and a leading Canadian firm

else can. We’ve always been recognised as

London

into the Group. Not only has this extended our

market leading shipping experts, and our size

SE1 2AQ

global reach, but it has also given the Group

now means we can apply that expertise in more

increased access to the mining and commodity

jurisdictions than ever before.

Tel: +44 (0)20 7444 3648

maritime base to our global footprint.

trading activities in the whole of Africa and North

Our ambition has seen Norton Rose Group

America. These activities inevitably result in the

become one of the top ten legal practices in the

Email: harry.theochari@nortonrose.com

need for new and improved shipping links.

world by headcount. It’s seen us bolster both

Website: www.nortonrose.com

theBaltic Autumn 2011 www.thebaltic.com

Fax: +44 (0)20 7283 6500

127

Commercial profiles

rhb stevedoring & warehousing rhb Rotterdam specialises in project cargoes,

number of shore cranes, means we can handle

cargoes, industrial cargoes, general cargoes,

heavy lifts, industrial break bulk, metals, steel

several vessels at the same time.

steel products, plastics and all other packed or unitised cargoes, either short or long term.

cargoes, general cargoes and the storage of

Project cargo and heavy lift storage space

storing large cases and crates, project cargoes,

in 1930 and has developed into a modern,

We have 30,000m2 of project cargo and heavy

huge beer tanks, the biggest anchor chains in

dynamic, private independent company with

lift storage space, fenced and paved.

the world, and heavy items such as generators,

project cargoes and heavy lifts. rhb stevedoring & warehousing was founded

transformers,

experienced management and skilled staff. tonnes. The 730m-length quay, with a maximum

Project cargo and heavy lift handling

draft of 10.25m, is railway connected. All our

Project cargo often contains a lot of boxes and

berths are quiet in a calm harbour basin. On

cases. We handle them very quickly, using our

the terminal we have 12,000m2 of L.M.E. quality

208t heavy lift crane in combination with our high

warehouse space, fitted with electronic alarm

speed multipurpose shore cranes and our own

systems.

high speed handling system, including skilled,

We can handle heavy lifts of up to 1,500m/

Our open storage area is well suited to

engines,

super

shovels,

excavators, non ferrous metals, and dismantled cranes; you name it, we store it.

professional and, very importantly, flexible labour.

208 tonne mobile harbour crane

You can save up to 50% of transhipment time; in light of todayâ&#x20AC;&#x2122;s costs for seagoing vessels and

rhb stevedoring & warehousing

rhb has purchased the worldâ&#x20AC;&#x2122;s most powerful

barges this is a big advantage.

Waalhaven n.z. 4

mobile harbour crane, which has a lifting

3087 BL Rotterdam

capacity of 208t and is designed for safe and

Warehouses

Tel: +31(0)10 429 94 33

fast handling of project cargoes, heavy lifts,

All our warehouses are of L.M.E. quality and are

Fax: +31(0)10 429 02 61

industrial break bulk and general cargo. The

fitted with electronic alarm systems. It is possible

E-mail: office@rhb.nl

length of our quay, in combination with the

to store non ferrous metals, ferro alloys, project

www.rhb.nl

Port of Zeebrugge A

s a major coastal port on the Belgian North

connected to the Middle and Far East with 10

international companies have chosen Zeebrugge

Sea coast, the port of Zeebrugge offers a

fixed weekly services.

as their distribution hub and new agreements are

highly productive hub for a wide range of ship-

With these frequencies, the port is well

constantly being realised. Furthermore, in order

ping companies. Zeebrugge is one of the few

geared to offer its customers daily shipment

to be able to meet the expected traffic growth,

ports that can easily handle the larger container

opportunities. Zeebrugge is grateful to serve all

new port areas are continuously being

vessels due to substantial water depth and its

major shipping lines, and its container trade has

sophisticated terminal equipment.

more than doubled since 2003.

With an array of both deep-sea and short-sea

It ranks No 1 on the world scale in car trade;

distribution capacities, a network of intermodal

in 2010, 1.6 million units were handled for the

services to reach the markets, and distribution

global automotive industry. Zeebrugge offers its

facilities within the port area, the site is a logistic

network and expertise to the emerging markets

turntable that meets the demands of a very

and is also an important platform for receiving

diverse customer base.

liquefied gas from the Middle East. The port is

In the short-sea trade, Zeebrugge is the

thus a major gateway into Europe.

prime continental port serving the UK and Irish

All types of goods, general cargo, reefer

markets in transhipment. Fourteen daily freight

trade, and project cargoes, amongst others,

services cover all major destinations on the UK

can be treated within the port area with all the

east coast, but Scandinavia and the Baltic in the

necessary personalised value-added services.

north, and Spain and Portugal in the south are

Moreover, frequent competitive and reliable

also served with frequency.

logistics deliver and receive cargoes throughout

Zeebrugge

top-class

container

Europe.

transhipment hub; in 2010 it handled 50 million

The port is always looking to provide its

tonnes of cargo and 2.5 million TEU. The

unique and specialised advantages and to offer

port serves many deep-sea destinations and is

its export tools to the European market. Many

128

theBaltic Autumn 2011 www.thebaltic.com

developed. For more information, please visit: www.portofzeebrugge.be

Commercial profiles

IMOSTI The International Maritime & Offshore Safety

quality and safety management, research and

Our dedication to providing value-adding

Training Institute (IMOSTI) provides training

development, trade relations, and business

services is not only aimed at the satisfaction of

services for personnel serving in the maritime

development.

our customers but also to the promotion and

and offshore petroleum industries. IMOSTI

We believe that the crucial element of

preservation of the industry and to the proper

operates an institution for learning, education

business success is our people, so at IMOSTI

formation of personnel who are working or

and the enhancement of maritime and offshore

we encourage our people to act with pride

intending to work within it. Our success can be

personnel skills.

and responsibility. Through industry-based

measured through the positive contribution of

IMOSTI aims to become the most valued

collaboration IMOSTI can better understand

our services to our customers’ businesses, and

partner of the maritime and offshore petroleum

the needs of our customers; we use this as our

to the professional success and development of

industry in providing training and education for

baseline in the development and delivery of our

the industry.

its human resources, and aims to maximise

services.

clients’ ability to contribute positively to business success, while also endowing them with the characteristics essential to the improvement of quality of life and preservation of the environment.

Industry-established specifications on offshore personnel training and education

International Maritime & Offshore Safety Training Institute Inc.

Maritime training and administration, safety management and business development

IMOSTI always adheres to industry-established

1104 11th Floor Victoria Building

specifications

United Nations Avenue

independently evaluate against appropriate

Philippines

IMOSTI

standards. We strive to maintain a pioneering

Tel: +63 2 310 3168

leading practitioners in maritime training and

attitude towards the development of products

Fax: +63 2 524 7983

administration. Our collective experience covers

and services that add value to our clients and

E-mail: sales@imosti.com

training

the industry in which they work.

URL: www.imosti.com

managed

administration

and

operated

education,

management,

while

personnel

training

allowing

ourselves

and to

Ermita 1000, Manila

Severn Trent De Nora WE UNDERSTAND WATER & WASTEWATER TREATMENT

process and design advantages. The BALPURE

Accommodating varying crew complements,

system is designed with easy-to-separate subassemblies, eliminating the requirement for

the largest individual OMNIPURE unit treats a peak flow of 65 m3/day of human wastewater.

s the market leader in the design and manu-

design changes to your engine room. BALPURE

Systems have received BV Certification of

facture of electrolytic seawater disinfection

has received Final Approval from the IMO.

Approval and USCG Certificate of Approval to

systems, Severn Trent De Nora brings more than

At Severn Trent De Nora we understand

30 years of marine equipment experience to the

the importance of providing safe and effective

treatment of ballast water and marine sewage.

treatment of grey and black water. That’s

Ballast water is the most frequently cited

why

we’ve

designed

the

IMO Resolution MEPC.159(55).

OMNIPURE™

cause of the introduction and transfer of non-

Series 55 sewage treatment systems to

indigenous species (NIS) into waterways. Ballast

provide wastewater effluent quality well below

water treatment systems, especially those based

MEPC.159(55) requirements while eliminating

on electrochlorination disinfection, are a proven

the necessity to handle waste solids from raw,

approach to limiting the introduction and transfer

untreated influent. Electrolytic treatment of

of NIS.

marine sewage eliminates chemical storage

The patented BALPURE® system is an

issues, dosing equipment and costs associated

effective and economical electrolytic disinfection

with the use of hazardous chemicals since the

solution to meet the most stringent ballast

disinfection solution is produced on site while

Severn Trent De Nora

water discharge requirements. Environmentally

the unit is in operation.

1110 Industrial Blvd

safe and easy to maintain, BALPURE can

The OMNIPURE system boasts minimal

offer energy savings of 60% compared against

maintenance, small equipment footprint, a light-

Tel: +1 281 240 6770

competitive technologies. Ideal for high ballast

weight package along with a unique sludge

Fax: +1 281 240 6772

water flow rate applications, BALPURE uses a

and solids management system that removes

E-mail: sales@severntrentdenora.com

unique slipstream treatment approach that offers

concentrated solids automatically, in situ.

Web: www.severntrentdenora.com

theBaltic Autumn 2011 www.thebaltic.com

Sugar Land, TX 77478 USA

129

Commercial profiles

BBC Chartering BBC

Chartering

one

the

world´s

leading companies in transportation of Non-

and abilities, necessary to handle all types of

has been in this business since the start,

complex transportation projects.

obtaining a tremendous amount of knowledge and expertise as a result.

Containerized Goods. With more than 140

The “new wave” of vessels, soon to be

vessels, and 25 offices around the globe, BBC

joining the BBC Chartering fleet, represents their

The strength of the fleet and the capabilities of

is able to offer short reaction times and tailor-

commitment to the future and to growth. This

their professionals crew are critical components

made solutions.

series of new generation super heavy lift vessels,

in meeting the manufacturing and installation

some with a lifting capacity of up to 900 mts, will

deadlines that the customers and industry

be fully deployed by 2013.

demands.

With the global office Network, BBC offers local knowledge and understanding. Quality of service is their hallmark; dedicated shipping

BBC is also giving a strong commitment

Following the philosophy of Six-Sigma and

professionals are handling all kind of projects

to its Bulk Customers by providing new bulk

combining it with the framework of ISO 9001,

–large or small- with consistency and care

vessels of the BBC Neptune type, which can

BBC Chartering continuously balance all relevant

from the initial booking, to stowing and lashing

carry 37,300 dwat. Furthermore the BBC Bulk

key factors to realize maximum customer

analysis, preparation for loading, all the way to

Division – Headquartered in Leer, Germany-

satisfaction and efficiency.

the actual handling, stowing and securing.

coordinates and provides customised and highly

Operating a fleet, ranging from size 3,500 dwat to 37,300 dwat with lifting capacities up

efficient solutions by utilizing the global set-up

For further information visit www.bbc-

of 25 Offices.

chartering.com

to 700 mts and the shallow draft characteristics

BBC is also proud to play a leading role

allows us to serve almost any port and offshore

in the carriage and handling of wind turbine

operation. That is why the company is perfectly

power as it continues to grow in popularity

geared for every break bulk, heavy lift, project

and is embraced by governments and energy

and bulk cargo requirement. Specialised in

companies worldwide.

heavy lifts and project cargoes, BBC Chartering

As one of the Pioneers in transporting

has the commercial and technical resources

windmills, with the first shipment in 1998, BBC

Norsafe AS N

effort. Norsafe currently run fully owned service

orsafe AS - Jørgensen & Vik AS is one

davits, all integrated into a total safety solution

of the oldest boat-building companies in

for the merchant and offshore markets. Norsafe

stations in Norway, Greece, China, Singapore,

Norway. The company began building lifeboats

has grown rapidly over the past 10 years; a

Brazil, Korea, Japan, USA and Mexico, along

in Grimstad on the south coast of Norway in

small Norwegian company has evolved into an

with 40 authorised service partners worldwide

1903.

international group, with operations worldwide.

As part of the overall service concept, the

The first boats produced were wooden,

The Norsafe headquarters and research and

Norsafe Academy offers training for service

followed by aluminium until 1958 when

development is still located in Norway, with

agents, crew, inspectors etc. at our training

fibreglass took over completely. In the beginning,

full production and development locations in

facilities in Norway. Refurbishment of existing

only open lifeboats were manufactured. Totally

Greece, China and Mexico, bringing production

equipment is done both in Norway, China and

enclosed lifeboats were introduced in the 1960s,

closer to our customers.

in Greece.

and in the 1980s the company started the

Our wide product range covers most

development of a range of free-fall boats and

requirements for lifeboats, rescue boats,

fast rescue boats with davits.

daughter crafts and davits:

In 1990, Jørgensen & Vik AS relocated its

• Conventional lifeboats up to 140 persons

operations in south Norway from Grimstad to

• Free-fall lifeboats up to 70 persons

Arendal, where the company has three large

• Fast rescue boats up to 12 metres

factories. The company changed its name to

• Military and professional boats up to 12

Norsafe AS in 1992 and markets the products

metres.

around the world under this name. Since it was

Norsafe manufactures the largest free-fall

founded in 1903, the company has supplied

lifeboats in the world, certified for a drop height

For more information

more than 20,000 lifeboats to the global ship

of 40 metres, and has also received several

Tel: +47 37 05 85 00,

and offshore markets.

Design Awards for its products.

Fax: +47 37 05 85 01,

Norsafe is the global market leader in marine

Our worldwide service is a growing business

life-saving systems – lifeboats, rescue boats and

segment, into which Norsafe puts a lot of

130

theBaltic Autumn 2011 www.thebaltic.com

E-mail: mail@norsafe.com www.norsafe.com

image: Farstad

plan now to attend

Seeing the market from a different perSpective Following the success of the TradeWinds Offshore Marine conference held in Oslo during Nor-shipping 2011, this high-level event comes to the Asia-Pacific, and will be held in the maritime hub city of Singapore. Companies that featured at Offshore Marine Oslo included Topaz Energy & Marine,UNO Offshore, Eidesvik, Havyard Group, DVB Bank, R S Platou Finance and many other key owners, financiers and brokers in the offshore sector. The Asian edition of this conference will bring together the movers and shakers of this region, and tackle the key opportunities and challenges in the markets of Southeast Asia, North Asia, the Middle East and Australia. Hear from offshore leaders on: Silver lining: Will the current downturn be enough to purge the market of old vessels? Activity is up but when will abysmal rates rise? The rise of PSVs in Asia: Will these ships gain a bigger market share next to AHTS vessels? What is sustaining the offshore industry in this region? Offshore trends to keep an eye on Charterersâ&#x20AC;&#x2122; growing demands Investment: who dares wins? The latest on the cabotage situation For enquiries about this conference, contact: Banu Kannu | banu.kannu@nhstevents.com For further details and to register, visit: www.nhstevents.com/events

Events

What’s on where A round-up of conferences, exhibitions and events in the shipping world Spetember 13-15 London

September 28-30 Miami Beach

October 10-12 India

Lloyd’s Sale and purchase

Association of Shipbrokers and Agents (USA) Annual Cargo Event.

India Shipping Summit 2011

Explore the complete process of ship sale and purchase for successful transactions. Examine the most effective contracts for newbuildings and second hand tonnage to make informed commercial decisions. Understand the latest trends in ship sale and purchase for up-to-date knowledge. Consider jurisdiction issues for a detailed awareness of arbitration and dispute resolution. Discuss practical solutions for contract breaches and negotiation to minimise costs, risks and delays. www.lloydsmaritimeacademy.com/ saleandpurchase

September 14-15 London ICS International Shipping Conference A high profile list of speakers will debate the key issues facing the industry today, including IMO secretary-general Efthimios Mitropoulos and International Chamber of Shipping president Spyros Polemis. www.marisec.org/icsconference

September 16-17 Macao Heavy cargo and equipment For details contact Horseshoe Media in London at: www.horseshowmedia.com

September 18-21 Paris International Union of Marine Insurance annual conference More than 500 marine underwriters, and senior representatives from many international maritime organisations, will attend this event, The conference title is ‘the Evolution of Risk, Safety and Security’, and many of the topics will be harnessed to this theme. For details contact: E-mail: iumi2011@clq-group.com

132

Talking tankers, dry cargo and future market trends. www.asba.org

September 28-30 Dublin International Marine Claims Conference Iranian sanctions, German hull clauses, Nordic claims handling and US firefighting developments are just some of the events on the agenda for discussion in Ireland at the key networking event of the insurance year. For details visit: www.marineclaimsconference.com

www.indiashippingsummit.com

October 16 Dubai Money and Ships Middle East A lively one day conference and networking event that brings together international financiers, insurers, lawyers, bankers, ship owners and investors to discuss and debate maritime and related finance sector issues regionally and internationally. www.moneyandships.com

October 17-18 Singapore Smart Shipping 2011 www.smartshipping.com

October 17-20 London

September 30 Singapore

Combating Piracy Week

GST Asia

www.piracy-europe.com

www.greenshiptechnology.com/asia

8-11 November Rotterdam

October 3-5 Adu Dhabi

Europort 2011

Seatrade Middle East Workboats

www.europort.nl

www.middleeastworkboats.com

Tradewinds Offshore Marine

October 4-6 Brazil

Following the success of the TradeWinds Offshore Marine conference held in Oslo during Nor-Shipping 2011, this high-level event comes to the Asia-Pacific, and will be held in the maritime hub city of Singapore. www.nhstevents.com/events

The OTC Brasil 2011 Technical programme presents solutions for a wide assortment of topics and issues. These topics range from updates on major projects to new technologies and techniques to HSE and regulatory issues. At the topical luncheons and panel sessions, companies such as Shell, OGX, Total, BP, Cameron, GE, Schlumberger, Baker Hughes, and Halliburton will discuss current and future projects in the region. www.OTCBrasil.org

theBaltic Autumn 2011 www.thebaltic.com

24 November Singapore

“Very interesting and comprehensive, covering all the aspects related to S&P” (A. Lolota, Newlead Shipping SA)

Practical guidance for secure sale and purchase transactions

Lloyd’s Maritime Academy presents the highly acclaimed annual training seminar

SALE AND PURCHASE Tuesday 13th – Thursday 15th September 2011, Bonhill House, London

Officially supported by

Exclusive access to Lloyd’s List online for 3 months!

COMMERCIAL AND CONTRACTUAL ANALYSIS OF SHIP SALE AND PURCHASE THREE DAYS OF PRACTICAL GUIDANCE TO EFFICIENTLY EXECUTE COMMERCIAL TRANSACTIONS

Explore the complete process of ship sale and purchase for successful transactions

£100 DISCOUNT FOR ALL READERS OF THE BALTIC – simply quote VIP code: KT0235BALTAD NEW EXTENDED PROGRAMME FOR 2011 TO INCLUDE:

Panel discussion of sale process with four different perspectives on the industry

The impact of the UK Bribery Act 2010 and the Fiona Trust litigation

Understand the latest trends in ship sale and purchase for up-to-date knowledge

Practical sessions considering newbuilding contracts and standard form contracts for second hand tonnage

Consider jurisdiction issues for a detailed awareness of arbitration and dispute resolution

Jurisdiction choices for registration including tax incentives and arbitration forums

Examine the most effective contracts for newbuildings and second hand tonnage to make informed commercial decisions

Discuss practical solutions for contract breaches and negotiation to minimise costs, risks and delays ★ BOOK BY FRIDAY 10TH JUNE AND SAVE £200! ★ 50% DISCOUNT FOR 3RD AND SUBSEQUENTLY REGISTERED DELEGATES

Official Publication:

Supporting Associations:

Official Charity:

12 Hours CPD The Solicitors Regulation Authority

For latest programme or to register please visit: www.lloydsmaritimeacademy.com/saleandpurchase Tel: +44 (0)20 7017 5510

This brochure has been produced using environmentally friendly paper sourced from sustainable forests and is chlorine-free

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