the Baltic
the
Finding finance
S P R ING 2 0 1 2
Baltic bomb - 20 years on Green legislation looms Maritime security - armed approach
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
Spring 2012
COMMITTED TO QUALITY EVERY STEP OF THE WAY ROSNEFT MARINE UK SUPPLIES HIGH QUALITY 1% LOW SULPHUR FUEL IN RUSSIAN PORTS Arkhangelsk / Kozmino / Murmansk Nakhodka / St. Petersburg / Tuapse Vladivostok / Vostochny
www.rosneftmarine.com Address: One Kingdom Street / Paddington Central / London, W2 6BD Tel. +44 (0) 203 402 3633 Fax. +44 (0) 203 402 3501
the
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 Spring 2012 www.thebaltic.com
1
Contents Chairman’s message 7 Mark Jackson Baltic briefing 8 Building Baltex growth 7
9
Opening China to FFA trading
10 Baltic/ASBA reception 11 Supporting the National Maritime Museum 12 Anthem for seafarers 13 Advance Australia fair? 10
14 Contacts Baltic bomb – 20 years on 16 Surviving the blast Logbook 18 Down memory lane
29
People, places, plcs 20 Troubled times Baltic comment 23 Michael Grey State of the market
41
24 Tankers 25 S&P 29 BIMCO 33 Dry Bulk 35 Heavylift and Offshore
44
40 Towage and salvage 44 Shipmanagement, crewing and education FFA 46 Steel challenges
53
Environment 51 Time pressure for owners as new green legislation looms theBaltic Spring 2012 www.thebaltic.com
3
www.imarex.com
Optimal solutions for freight clearing NOS Clearing is the specialised clearing house for the freight industry: • • • • • • •
The most complete product suite for Risk Management. Successfully launched FX clearing services to complement the freight product offering. Offering the most Competitive Clearing Fees and Volume Discount Schemes in the freight market. Providing the most Flexible Clearing Platform with prompt introduction of new routes according to market needs, first class back office and risk management applications. First to offer clearing of Iron Ore Options, cash settled contracts enthusiastically welcomed by the industry. Accessible through Direct Membership or General Clearing Members. A neutral clearing service open to all Approved Brokers (Now also included Baltex and Cleartrade Exchange).
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Contents Oxford Analytica 56 WTO role in dispute settlement looks resilient Maritime security 59 Armed approach 57
Risk management 66 Understanding risk in order to manage it Ship finance 70 New credit lines 59
Ship registries 73 Ship registries must be proactive Marine software 78 Software revolution Breakbulk
  77
81 Breakbulk bouncing back? US ports 83 Obama budget digs deep for ports Belgium 87 Strikes halted in Belgian ports
  83
Canada 89 The good times are back for Canadian ports Maritime law 92 Swedish briefing
91
Insurance news 95 Insurance parlance 97 ITIC Legal news 99 Should the seas stay free?
93
108 Events theBaltic Spring 2012 www.thebaltic.com
5
Chairman’s message Mark Jackson
Chairman’s message O
n 10 April it will be 20 years since an IRA bomb exploded in a van parked outside the Baltic Exchange. Three people died,
including Baltic attendant Tom Casey and many more were injured as the bomb ripped through the Baltic destroying the offices of major companies in the building and rendering the trading floor unusable. Baltic member Jeffrey Blum was badly injured in the blast and you can read an account of what happened to him on that fateful night further on in this issue. We will be commemorating this sad anniversary with an evening service at St Botolph-without-Bishopsgate to which all Baltic Exchange members are invited. On 12 April the Felix Fund, a bomb disposal charity will be holding a fundraising evening on top of 30 St Mary Axe, the ‘Gherkin’ which stands on
the site of the old Baltic Exchange. Exactly six years after the Baltic Exchange bombing, the Good Friday Agreement was signed by most of Northern Ireland’s political Tradewinds
parties and the British and Irish governments. It led to power-sharing in the Province and an end to the bloodshed. Between 1968 and 2007 over 3,500 men, women and children lost their lives in the Northern Ireland conflict, but thanks to the brave decisions of politicians
Mark Jackson
and people to put their differences and past to one side and work together in the name of peace, life there has greatly improved.
However, like the people of Northern
The Baltic community still meets regularly,
Ireland, the Baltic Exchange has moved on
but more informally than before at sporting
The Baltic Exchange and its members
and reconciled itself to the past. Reconciliation
and social gatherings. Our indices, market
have also been able to move on from the dark
does not mean forgetting, but moving forward.
reports and FFA trading platform are used on
days of 1992. Of course, the attack on 30 St
The building may have been destroyed, but
a daily basis by our members in their work.
Mary Axe was more than just an attack on a
its community was not. At its heart, the
Our membership is more international than
beautiful building. For our members it was an
Baltic Exchange is an idea which enables
ever before and today we have an office in
attack on a way of life and our community.
international trade. It is an idea of co-operation
Singapore to support our growing Asia focus.
The trading floor was a place where business
which is encapsulated in our 300-year-old
The Baltic is not a place, but a shared set of
was done and lifetime friendships forged. It
motto “our word our bond”. Today the Baltic
values which keeps the market together.
was a community with an important place in
Exchange is still the focus of the shipbroking
the history of London and at the centre of the
world. It takes more than a bomb to destroy
international shipbroking market.
an idea.
theBaltic Spring 2012 www.thebaltic.com
7
Baltic briefing
Building Baltex growth T
multi-lateral
most robust.” He adds that Baltex offers truly
behavioural change is never going to happen
trading facility for dry freight derivatives
anonymous trading and that while the freight
overnight and gaining the initial part of market
has been up and running for over six
market is still slow in coming to screens, it is a
share is hardest, but we are working hard to
months and has been making steady
“very easy way of trading.”
demonstrate to the market that this is a good
he
Baltic
Exchange’s
way to trade.”
progress. Launched in June 2011 and supported
Another regular Baltex user, Joe Radmore,
by a team of five, the Baltex system provides the
Morgan Stanley’s London-based vice president
He notes that at a recent meeting of FFA
FFA market with a regulated environment in
of iron ore and freight, notes that while the
traders in Geneva, one of a series undertaken
which to trade and now has 25 principals and
system is still gaining traction, “it’s simple to use
by the Baltic Exchange team, there was real
five brokers signed up and authorised to trade.
and a natural progressive step for the industry.”
support for the development of Baltex and an acknowledgement by many present that it was
But against a backdrop of depressed levels of
Charles Maltby, managing director of Pacific
overall FFA volumes and the inherent difficulties in
Basin UK, the world’s largest owner and
effecting change in the way in which a company
operator of handysize bulk carriers, says that
To arrange for a demonstration of Baltex
handles its trading activity, the centralised
Baltex offers him a “systemised and auditable
please contact Paul Stuart-Smith. E-mail:
screen has still yet to become the main way
way of trading derivatives.” He says that for a
pstuartsmith@balticexchange.com or see www.
in which the market trades freight. However, a
publicly listed company like Pacific Basin this is a
balticexchange.com/baltex for further details.
number of significant players including Toepfer,
far better way of trading than
Cargill, Morgan Stanley and Pacific Basin do
on the telephone. “I’d love
strongly believe in the importance of having a
it if all trades were handled
neutral screen which allows them to offer prices
on a screen,” he remarks.
anonymously, trade in a regulated environment
He believes that “any big
and have a good view of the market.
company should have a
According to Stefan Albertijn, head of risk
preference for using Baltex
management at Hamburg-based commodity
over any other method of
house Alfred C. Toepfer International, his shipping
FFA trading” and that to a
team is putting panamax prices onto the system
certain extent it is individual
on a daily basis and is very happy with the user-
traders’ preferences, rather
friendliness of the system, which gives users
than
the ability to nominate a broker and clearing
which are standing in the
house of choice. He believes that Baltex’s key
way of the marketplace’s
strength is the regulated environment it offers
rapid growth.
company
Baltex advert_Layout 1 05/08/2011 02:22 Page 1
interests,
his company to trade within, without forcing
There is a steep hill to
companies to ditch their brokers. “It’s critically
climb, a point which Baltex’s
important for this market to be on one platform
chief
operating
officer
and still allow companies to preserve their
Paul
Stuart-Smith
readily
relationships with their value-adding partners,
acknowledges. “We’ve got a
the FFABA brokers.”
great system, great support
in all of their interests to help this market grow.
Cargill’s Geneva-based head of dry freight
from some key players in
derivatives, George Wells, confirms that his
the FFA market, but we still
team is putting prices on the screen and trading
have to encourage more of
regularly and that Baltex offers him another view
those 30 companies who’ve
of the market. “While we use other screens, this
signed up to put prices
one is the only one which is a true exchange
on the screen consistently
and from a regulatory point of view is the
and trade more. Effecting
8
theBaltic Spring 2012 www.thebaltic.com
Baltic briefing
Opening China to FFA trading W
ith Chinese companies dominating
Barry Rogliano Salles and Seamaster, launched
Kong based firms in particular have the biggest
the bulk trades, both as charterers
a project in the summer of 2010 to look at
potential to benefit from the arbitrage opportunities
and increasingly as the owners
developing an RMB-denominated FFA market. This
presented by the discrepancy between a local
and operators of vessels, the
has resulted in the SHCH developing a complete
RMB denominated market and the bigger dollar
absence of the Chinese in the freight derivatives
counterparty and risk management system which
denominated international market.
market is notable. This may, however, be about
meets international trading standards.
According to the management of the SHCH,
to change with the Baltic Exchange working
The Shanghai Clearing House (SHCH) was
the market will initially focus on a limited number
with the Shanghai Clearing House to develop
launched in 2009 under the authorisation of the
of routes. “We will choose the contracts that
renminbi (RMB) denominated Forward Freight
People’s Bank of China (PBC) and the Ministry of
enjoy large trading volumes in the international
Agreement (FFA) products. The project is still under
Finance. It provides centralised and standardised
market. These include the capesize, panamax and
development, but it is hoped that the market will
clearing services for a range of spot and derivatives
supramax timecharter average. Second, those
open later this year.
transactions in RMB and foreign currencies, as
routes that are related to China, such as C3 and
well as RMB cross-border transactions approved
C5, although they are not heavily traded in the
by PBC.
international FFA market.”
There are two reasons why Chinese companies are not active in the market: the serious losses incurred on derivatives markets by some in
Freight derivative trading is high on the agenda
The concept received a warm reception at
2008/9 and the difficulties of trading in a US dollar
of the Shanghai Municipal Government as the city
the Baltic’s recent Asia Freight Derivatives Forum
denominated market.
takes steps to develop as a leading maritime centre.
in Shanghai in November with a range of private
Prior to 2008 a number of Chinese companies,
While there are signs that Chinese currency
owners, operators, trading houses and investment
including the shipping conglomerate COSCO,
and regulatory control will be lifted at some point
were highly active in the FFA market. However,
in the not too distant future, many believe that
According to Baltic Exchange chief executive
in the wake of the financial market crash and
launching an RMB denominated FFA market
Jeremy Penn, the move will create business
the subsequent dramatic collapse of dry bulk
will develop a valuable trading habit amongst
opportunities for FFA brokers. “Although this
freight rates, a number of Chinese state-owned
Chinese companies and result eventually in a larger
market may take time to develop, the long term
enterprises found themselves nursing heavy
international FFA market.
prospects are bright, especially if state owned
funds showing a real interest.
enterprises are given clearance to trade.”
losses. This led to a government ban on derivatives
The fundamentals of the RMB will be broadly
trading, including FFAs, by all state-owned entities.
similar to the main US dollar denominated market
For further details on this project, please
While this ban is still in place, there are expectations
currently centred in London. It will be voice-
contact Sun Wei, business development manager.
that the market will open up in the not too distant
brokered with brokers bringing together trading
Tel: +44 (0)20 7369 1663 or e-mail wsun@
future and that controls will be loosened.
counterparties; products will be freight swaps
balticexchange.com.
The currency control issue is one which
based on Baltic Exchange
has made Chinese participation in US dollar
indices and assessments;
denominated markets, including FFAs, near
the
impossible for many. Currently, privately held
denominated in RMB and
Chinese companies that wish to trade FFAs require
a daily exchange rate used
overseas offices and foreign currency accounts.
to reconcile prices with the
Only a limited number of companies have such
US dollar denominated Baltic
facilities and of those that do, many do not feel
data and products will be
comfortable giving their overseas arms free reign to
cleared by the SHCH, with
trade FFAs. This is understandable given the niche
qualified banks working as
nature of these products and the specialist skills
General Clearing Members.
required to trade them.
Initially the market will only
products
will
be
In a move designed to clear some of these
be open to China registered
hurdles and bring more Chinese companies into
organisations, but in the
the FFA market, the Baltic Exchange, Shanghai
longer term it is hoped that the
Clearing House (SHCH), Shanghai Pudong
market will be made available
Development Bank and Shanghai Shipbrokers’
to international players with an
Li Ruiyong, deputy general manager of the Shanghai
Association, along with two Baltic member firms
RMB currency account. Hong
Clearing House at last year’s Asia Freight Derivatives Forum
theBaltic Spring 2012 www.thebaltic.com
9
Baltic briefing
Scottish celebrations C T
South Pole
ongratulations to Baltic member Ben Boyne of EDF Trading who recently
wo hundred and fifty members of the Baltic
walked to the South Pole, braving average
Exchange Caledonian Society celebrated St
temperatures of minus 30 degrees and
Andrew’s Day in the traditional manner aboard
14-hour days. He was a member of a team
HMS President in London. Guest of honour
taking part in a 30-day trek raising money
and founding Caledonian Society member Peter
for the homeless charity Centrepoint and
“Jock” Wilson (below), who recently celebrated
one of only nine of 17 competitors who
his 90th birthday, addressed the haggis.
successfully made the full 900km journey.
For Society,
further please
details contact
the
Other competitors pulled out suffering from
Robson.
frostbitten fingers, snow blindness, double
about Mike
E-mail: mike@brownjenkinson.co.uk
pneumonia and severe malnutrition. The team raised £162,000.
Baltic/ASBA reception T
he Baltic and Association of Ship Brokers
Tickets are available for additional members
and Agents (ASBA) are once again teaming
and their guest for $85 per person.
up to host a reception during the annual
The Baltic will also be hosting a meeting for
Connecticut Maritime Association’s Shipping
ASBA members on 21 March at the Delamar
2012 conference and exhibition. The reception
Hotel in Greenwich, Connecticut.
takes place at Butterfield8 in Stamford on 19 March. Attendance is free for up to two
Contact Robin King for further details.
employees from each member company.
E-mail: rking@balticexchange.com
Founder of the Caledonian Society, Peter Wilson
Baltic Irish Society marks R 30th anniversary T
Cocktail party tickets now available eserve your place at the Baltic Chairman’s Cocktail Reception, which takes place on 23 May at Christ Church, Spitalfields, London. Tickets are priced at £37 + VAT and are available for purchase by calling
+44 (0)20 7369 1654 or e-mailing events@balticexchange.com.
his year sees the Baltic Irish Society celebrate
its 30th anniversary at the St Patrick’s Day
celebrations on 15 March. This evening of dinner and songs at the Brewery in London’s
Chiswell Street is a hugely popular event in the Baltic diary and has already sold out. Look out for photographs and a report in the next issue.
The Chairman’s Cocktail Reception is always a big draw for Baltic members
10
theBaltic Spring 2012 www.thebaltic.com
Baltic briefing
Supporting the National Maritime Museum
T
he 100 guests attending the Royal
Exchange members will be aware of the general
start at £2,500 and go up to £20,000. She
Museums Greenwich reception this
ignorance surrounding the workings of the
adds: “We have many individuals from the
February at London’s marble walled
modern shipping industry, and institutions like
shipping industry who support us too, and
Mandarin Oriental Hotel were able to
the National Maritime Museum, which sees
who very much enjoy their relationship with
admire a set of magnificent maritime oil paintings
over one and half million visits a year, help give
the museum – in addition the Patrons Events
from the National Maritime Museum’s archives.
the sector, its work and people a face. With
programme gives them great social and
Greenwich Park hosting the equestrian events at
networking opportunities.”
The paintings from the museum’s unique collection,
which
numbers
over
4,000
pieces, as well as 3,000 ship models, flags,
the London Olympics this summer, the museum
The support given by these individuals and organisations is not only financially significant, it
will be busier than ever before.
uniforms, figureheads and other artifacts, are
Companies in the shipping sector can help
also helps ensure that the contemporary role of
not just available on loan to large hotels, but
support the work of the museum by becoming
the UK shipping industry finds a voice within the
to companies large and small to display in
corporate
exhibitions and collections.
their offices and meeting areas. Indeed, Baltic
Clarksons, BP Shipping, General Maritime
member firm SSY boasts a number of paintings
Corporation, Evergreen, Lloyd’s Register and
on loan in its board room.
Shell Shipping already.
members,
as
have
Braemar,
For further details contact Susannah Coster
The collection, largely assembled since 1930,
According to Susannah Coster, a fundraiser
is remarkable for both its artistic quality and the
at the museum, corporate support packages
on +44 (0)20 8312 8629 or e-mail Susannah Coster, scoster@rmg.co.uk.
variety of subject matter. Its main elements include
early-Dutch
and
Flemish
marine
paintings, British marine paintings, portraits, history and genre paintings, and ships portraits. Artists who are represented include, the elder and younger Willem van de Velde, Dominic Serres, Charles Brooking and Abraham Storck. With the collection otherwise languishing in a basement, the museum’s curators are keen that its contents are seen by as many as possible. According to the museum, provided a premises has appropriate security and environmental conditions for valuable historic works, loans can be arranged for as little as £3,000. Recently collectively rebranded as Royal Museums Greenwich, 2012 is an important year for the National Maritime Museum, Royal
A huge range of paintings from the National Maritime Museum are available on loan
Observatory and the Queen’s House. The National Maritime Museum celebrates its 75th anniversary and the Queen’s Diamond Jubilee with the opening of a new exhibition “Royal River: Power, Pageantry and the Thames” which explores the relationship between the monarch, the City and people. Featuring over 300 objects, the exhibition will be of interest to many Baltic Exchange members as the museum highlights the link between the Thames and the growth of London as a maritime trading centre. The National Maritime Museum plays an important role showcasing not only Britain’s great maritime past to the general public, but also explaining the relevance of the sea to our way of life today. All too many Baltic
Left to right: Ravi Mehrotra, Peter Cowling and Capt Peter Swift
theBaltic Spring 2012 www.thebaltic.com
11
Baltic briefing
Anthem for seafarers
New FFABA tanker chair N
ils Arnesen of Marex Spectron has been elected as the new chairman of the Tanker
FFA Brokers’ Association (FFABA). He succeeds Andrew Jamieson of ACM/GFI who chaired the association for the previous two years. The Baltic and FFABA will be running its next Tanker Derivatives Forum in Geneva on 17 November 2012.
T
he “Anthem for Seafarers”, commissioned
album will be completed in March and April for
by the Baltic Exchange in 2010, is to be
commercial release this autumn.
recorded. Following its use last year by
The Baltic hopes to address three main
the Shipwrights’ Company for the
purposes in this project. First, through the
admission of Prince Charles, as well as for
medium of music, it will introduce our name to
the Annual National Service for Seafarers at St
new communities associated with the business
Paul’s Cathedral, there have been many requests
of shipping, people whose knowledge of the
for a recording.
Baltic and its role is perhaps only a distant
This setting by Malcolm Archer, formerly
concept at present. Secondly it will benefit
the director of music at St Paul’s, is based on
the seafaring charities that the Baltic supports
the hymn “Eternal Father, strong to save” and
by providing copies of the recording to them
is to be recorded by Convivium Records. The
at no cost for onward sale in support of their
combined choirs of Portsmouth Cathedral and
respective missions. Finally, through engaging
the Convivium Singers will work together with
talented young musicians in choral schools and
input from choral directors Dr David Price,
colleges around the country, it will underline
Malcolm Archer and Alexander Norman.
England’s strong musical tradition which so
The project is being overseen by Michael Drayton and will include high quality recordings
often draws upon the sea for inspiration through Anglican texts and hymns.
of sea-themed music for choir, organ and instrumentation. As the “cathedral of the sea”
www.portsmouthcathedral.org.uk
Portsmouth Cathedral is ideally suited to take
www.malcolmarcher.com
on this work and recording sessions for the
www.conviviumrecords.co.uk
Sadly departed T
he Baltic Exchange regrets to announce the deaths of the following members:
Donald Blewett
David Demeza
Patrick Shovelton
Mr Blewett was first elected to the Baltic in 1956.
Mr Demeza was first elected to the Baltic in
Mr Shovelton was elected a member of the
During his membership he represented J E Hyde
1955, representing Galbraith’s from 1968 until
Baltic in 1978 through to 1982, representing
& Co, ICAP Shipping and Daiichi Chuo Shipping.
becoming a retired member in 1987.
the Chamber of Shipping.
In 1992 he became a retired member.
George Herdman
Christopher Wick
Roger Broome
Mr Herdman was first elected to the Baltic in
Mr Wick was first elected a member for Spillers Ltd
Mr Broome was elected a Baltic member in
1946. Until his retirement in 1982 he represented
in 1974. He went on to represent Alpha Cereals
1960 and represented Overseas Farmers
Denholm Coates.
Ltd and became a retired member in 2008.
Co-operative Federations Ltd.
David Shepherd Richard Crafter
Mr Shepherd was a long-term member of
Mr Crafter was first elected to the Baltic
Baltic Air Charter Association and its Honorary
Exchange in 1969. An active member of the
Executive for many years. Mr Shepherd was
Baltic Charitable Society, he continued to
elected a member of the Baltic in 1960.
represent R G Jones Price & Co Ltd until January 2011.
12
theBaltic Spring 2012 www.thebaltic.com
Baltic briefing
Advance Australia fair? Years of over-production, a world financial crisis plus a strong Australian dollar are causing many problems, but its winemakers’ optimism prevails, writes David Hughes
A
ustralia’s first vine cuttings were shipped
now?” was the question I put to Yvonne May,
By hook or by crook the resourcefulness of
from the Cape of Good Hope to the
director of Wine Australia for the UK and Europe
the Australian wine-maker will prevail. So when it
penal colony of New South Wales on
just before heading into a wine-tasting session
comes to the red varieties, Australia is the garden
the First Fleet in 1788. And in 1822,
on Australia Day.
of choice.
when Gregory Blaxland became the first person
“Change, or inspire the thought on the street
Shiraz, still the flagship, comes in many
to export wine from Australia, it seems he had
and educate the new wine generation” she said.
guises, notably McLaren Vale, the big boys from
started Australia’s slow but sure climb towards
Yvonne continued, “We still hold 20% of the UK
The Barossa, while the style changes in Clare
the pinnacles of the world of wine-making
market and the spend is gradually rising and in
Valley and again high up in Victoria’s King Valley.
and export.
time folks here will find that middle market – and
All offer stunning examples of the variety.
By the mid 1980s French and Italian bottles
be happily surprised.”
Cabernet-Sauvignon, though widely planted,
in supermarkets and wine shops gave way
And the flagship of that surprise – new wave
excels particularly in Coonawarra’s terra rossa
to Australian Chardonnays, Semillon-Sauvignon
Chardonnay, the famous variety that has been
(red soil) with ripe blackcurrants reminding one
blends, Cabernet-Sauvignons, Shiraz (Australia’s
over-run here by Kiwi Sauvignon and generally
of its native Bordeaux.
name for Syrah) and indeed the blending of the
indifferent Pinot Grigio.
A favourite of mine is Grenache, the grapes
latter two. And, at the top end with “wines of
And many will be surprised, for the tasting
spring from the branches of individual bush vines
greatness” in Penfold’s Grange and Hensche’s Hill
that unfolded indeed showed Chardonnays
in the Barossa Valley and give a powerful red
of Grace, the French, in particular, were looking
now made with the oak harmonising, rather
berry wine.
nervously over their shoulders. In the New Age of
than dominating, and mouth-filling flavours of
The alcohol volume can be hard to control
Wine, everything it seemed, had to be “Aussie”.
butterscotch, peaches, vanilla, figs and much,
and at best will be 14%, but it’s a wine that offers
much, more.
up something different.
Also at that time there were powerful wine storms in the making on both sides of the
So forget the £4.99 from the corner shop,
Australia, in the cool climate regions, is
South American Andes that were to blow winds
please, and head off to your local wine shop. Be
making some simply wonderful examples from
of competition not only to the European wine
prepared to go up to a tenner and seek out how
the difficult Pinot Noir variety. I defy anyone not
countries, but also to Australia.
great Chardonnay should taste from the cool-
to ooze at any of Sexton’s Giant Steps, four
It is from these heady days that Australia
climate regions of Adelaide Hills (South Australia),
different vineyard offerings in the Yarra Valley.
increased vine planting to match its global
Mornington Peninsular and the Yarra Valley (both
Simply Pinot Noir heaven!
popularity, but this has led to serious over-
Victoria), Margaret River (Western Australia) and
production. The early 2000s saw a worldwide
northern Tasmania.
Just some names of obtainable, reliable producers: Cape Mentelle and Moss Wood
downturn in Australian wine consumption thanks
Staying with white but really ‘changing the
(Margaret River), Peter Lehman (Barossa Valley),
to both increased competition domestically with
thought’, I beg you be brave and grab a bottle of
Brown Brothers (Victoria), Tyrrells (NSW). And
favourably priced wines from Chile, France and
Riesling from Clare or Eden Valleys; chill it down,
if you like a full-bodied rosé, hunt out Charles
the rest of Europe and the strong Australian dollar
pull the cork and get ready for some steely dry,
Melton’s Rose of Virginia (Barossa).
inhibiting its wines rushing out the other way.
lime infused nectar.
I have had the privilege to have been on two
Today the everyday UK wine drinker has
The Hunter Valley (New South Wales) is the
Australia Wine Flight tours around the country’s
the same thought: Australian wine equals oaky
true home to a white variety that wears two coats
vineyards and I was asked last week if I would
Chardonnays and blockbuster Shiraz; cheap
– Semillon. The ‘youngster’ will give a lovely dry
go again? You bet!
supermarket offers or very expensive reds from a
wine with vibrant citrus flavours, but as it ages it
Hang on in there Australia, advance Fair
place called Barossa with, in both cases, nothing
brings on wonderful complexities with nuances of
Lady for you are a nation of great joy – and you
in between. So, “what are the prospects right
honey, nuts and citrus.
bottle it!
theBaltic Spring 2012 www.thebaltic.com
13
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
Golfing Society
Sub-Aqua Club
Stephen Calafti
Chris Cox, c/o Frank Symons Ltd
Lorraine Burns
Anglo Greek Chartering, The Baltic Exchange
Devonshire House
The Baltic Exchange
38 St Mary Axe, London EC3A 8BH
146 Bishopsgate, London EC2 M4J
38 St Mary Axe, London EC3A 8BH
Tel: +44 (0)20 7283 9621
Tel: +44 (0)20 7377 5423
Tel: +44 (0)20 7369 1638
E-mail: info@balticgolf.co.uk
E-mail: lburns@balticexchange.com
Jamie Freeland
Lawn Tennis Club
Young Baltic Association
AM Nomikos, 4th Floor
Crispin Eccleston
Crispin Eccleston
40 Grosvenor Gardens, London SW1 0EB
Tel: +44 (0)20 7369 1654
The Baltic Exchange
Tel: +44 (0)20 7591 1800
E-mail: ceccleston@balticexchange.com
38 St Mary Axe, London EC3A 8BH
Cricket Club
E-mail: jf@amnomikos.com
Tel: +44 (0)20 7369 1654
Sailing Association
E-mail: ceccleston@balticexchange.com
Simon Cox Howe Robinson Shipbrokers 77 Mansell Street, London E1 8AF Tel: +44 (0)20 7457 8421
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
The Baltic website
Duncan Bain
Tel: +44 (0)20 7369 1621
www.balticexchange.com
Tel: +44 (0)20 7369 1627
E-mail: jbradford@balticexchange.com
E-mail: dbain@balticexchange.com
14
theBaltic Spring 2012 www.thebaltic.com
Baltic bomb – 20 years on
Surviving the blast Next month marks the 20th anniversary of the Baltic bomb blast that killed three people. The Baltic talks to Jeffrey Blum, the most severely injured of the survivors
I
f luck is a contributing factor to survival in the
into the air and for sufficient time for the General
face of a terrorist incident, Jeffrey Blum can be
Council of British Shipping headquarters, which
considered to have had his fair share, although
was seven stories high, to collapse and for me
the luck in question is not necessarily of the
to land on its rubble.” As he was carrying a brief case at the time,
order that everyone would appreciate. Paul Butt aged 29, Baltic Exchange employee
the force of the blast exposed his inner arm,
Thomas Casey aged 49 and 15-year old Danielle
which eventually had to be rebuilt using muscle
Carter were killed when a white van carrying a
from his back. Hitting the ground head first, one
bomb made from Semtex and fertiliser exploded
of the more unlikely strokes of luck occurred.
late on Friday evening 10th April 1992.
Whilst his brain started to swell as a result of
At the time when the IRA bomb exploded
the impact, a flying brick cracked his skull open
outside the Baltic Exchange building that night,
wide, thereby allowing his brain to continue to
Jeffrey was working for Prochart Services, a
expand and not implode due to unsustainable
shipbroking company located on the second
internal pressure. However, a piece of glass
floor of the Baltic Exchange in St Mary Axe in
embedded in his brain had to be removed by
the City.
neurosurgery.
Prochart was instrumental in moving most of
The second bit of luck occurred because he
the UN peacekeeping forces’ equipment round
was found within 10 minutes by police officers
the world, so Jeffrey says it was an extremely
and an eye surgeon who happened to be in
busy time, not least because this time saw
the Underground at the time of the explosion
the beginnings of problems in Somalia and
and who went up to street level to provide
also the time when the UN was pulling out of
Jeffrey Blum
assistance. When Jeffrey was found, he was conscious
Cambodia. “We had a lot of administration and a lot of fixing of ships. It was a massive project
tube station but only reached what was then
and asked the surgeon to “stop this bloody
and I was therefore working late on that Friday
the General Council of British Shipping building
tickling in my ear”. Jeffrey says he doesn’t swear,
night.” He left the office at about 9.20 in the
adjacent to the former Baltic Exchange when the
although the doctor evidently did not know
evening and said goodnight to one of the two
bomb exploded a few feet behind him.
that. “In fact I was being accurate without even knowing it, because my ear drums had been
Baltic employees, Ron Brooks, who was on
Coded warnings had been issued by the
duty that night with Tom Casey , who died in
IRA but these were not specific enough to
the explosion.
identify the Baltic Exchange, as opposed to
Recognising that the brain injury was the
Ron Brooks let him out of the building. “Ron
any other exchange in London, as the target.
most severe, the eye surgeon recommended
and I have a particularly special relationship
The police had raced to the Stock Exchange.
taking Jeffrey to St Bartholomew’s Hospital
because, if I hadn’t left then, he would have
Road work outside the Baltic Exchange for the
where he was treated by Peter Hamlyn, a
been in the back room with Tom.” Ron was also
previous week had meant that the builders’ van
“brilliant neurosurgeon “.
severely injured in the blast. Having left the Baltic
which exploded did not attract prior notice.
building, Jeffrey walked towards Liverpool Street
16
“The force of the blast catapulted me high
theBaltic Spring 2012 www.thebaltic.com
perforated by the sound of the blast”.
Hamlyn intervened at a time when Jeffrey had lost a total of seven out of his eight pints
Baltic bomb – 20 years on of blood. Critical response in such situations is
whilst he had been unconscious, although those
Baltic Exchange (on the 4th floor of Lloyd’s) on
limited to the so-called “golden hour” following a
looking after him worried that the meeting would
8th September, which was a remarkably short
major accident. “You have to start work on the
be a strain both on him and also on the Queen,
time after the bomb, considering the extent of
brain within an hour or the patient dies”. More
because victims of major head injuries are apt
his injuries. He worked part time until his medical
important than repairing the head injury and
to become garrulous, a point which he says he
checks permitted him to return to full time
the brain was the need to infuse blood into him
proved during their meeting !
employment in January 1993.
before any surgery could be performed. With no
Jeffrey eventually left hospital on May 23rd,
He has also kept in contact with others who
knowledge of Jeffrey’s blood type, the hospital’s
exactly 6 weeks after the blast changed his life.
have been involved (as survivors or victims) with
specialists had to experiment with 27 pints of
The support of good friends and a strong
the violence in Northern Ireland and England
different groups of blood before they found the
family were crucial to his recovery ~ and he is
but also with more recent non-IRA terrorist
correct one.
acutely aware of the enormous debt he owes to
events like the 7/7 bombings in London as part
During the blood replacement process,
them all but most especially to his wife, who also
of the “LIVE” group: Let’s Involve the Victims’
Jeffrey had a massive seizure. He was given
had to take on the burden of full care for many
Experiences. Organisations like this not only
a sedative and an amnesic drug which wiped
months after he was released from hospital.
bring together survivors and victims of acts of
his immediate memory clean. “That, as far
He returned to the temporary home of the
violence but also their perpetrators.
as I was concerned, was very good, because I didn’t then and don’t now have nightmares.” Although he says he has been told what happened in detail, his last recollection is of leaving the Baltic building and his next is when he woke up after nine days. He counts this as a blessing. Establishing
Jeffrey’s
identity
was
initially a problem but his friend and colleague Jonathan Marks, having heard news of the bomb, paged him repeatedly and eventually left a phone number, which the police used. Mr Marks then broke the news to Jeffrey’s family. Twenty four hours after the operation on his head, reconstructive surgeon Dalia Nield rebuilt his arm with muscle from his back. His family were told to expect the worst. On the sixth day of his coma, he moved his right arm, which was considered to be a hopeful sign of recovery. As Jeffrey explains, the last part of the brain to shut down is hearing and the neurosurgeon had told his family to keep talking to him. On the seventh day of his nine days in a coma, his sister came to visit him. She told him a joke and he smiled. This was tremendously significant, he says, not only because he had heard her but also because it proved that his brain had worked out that what she had said was amusing. “Thirdly,” he explains, “it meant that the many facial muscles were also working and that the brain was able to send signals.” Jeffrey pays tribute to the incredible service provided by the hospital and the quality treatment provided by the National Health Service which included hiring a special and very expensive ripple bed for him in order to ensure that bed sores did not develop during his coma. The Queen visited the hospital 2 days before he left. He was keen to thank Her Majesty for her concerned telephone calls
Damage caused by the IRA’s one-ton bomb
theBaltic Spring 2012 www.thebaltic.com
17
Logbook
Down memory lane Here in a photographic essay, Ambrose Greenway takes a nostalgic look at some of the tankers that passed in front of his lens during the 1960s and 1970s
A
large amount of tonnage visiting Southampton is bound for the Esso refinery at Fawley on the southern side of Southampton Water, most of
it entering via the deep water Nab Channel and Spithead before negotiating the sharp S-bend turn between Cowes and Calshot. Over the last 50 years, many different tanker types of all shapes and sizes have visited these enclosed waters so beloved of yachtsmen, but here large vessels take precedence over yachts due to restricted room for manoeuvre. Even so there have been a number of collisions over the years, the most recent during Cowes Week last August. Jacob Kjode’s 15,300 dwt Horn Clipper, seen following the Canberra out to sea, was one of the last examples of a typical ‘Skandywegian’ motor tanker design that could be traced back to the 1930s.
The 68,000 dwt Dutch-flag Sepia was one of three distinctive twin-funnelled turbine tankers completed for the Shell Group in three different British yards in 1961, sisters Solen and Serenia going to Shell Tankers (UK). When built they had attractive eau-de-nil painted hulls.
18
theBaltic Spring 2012 www.thebaltic.com
Logbook
The 25,423 dwt Texaco Maryland, depicted overtaking Esso’s 86,100 dwt
Fred Olsen’s 87,700 dwt motor tanker Borgen, built at Sasebo in late 1966,
Esso Warwickshire as she pounds past the Spithead forts, was one of four
typified the owner’s predilection at the time for a stylised tower block
fast turbine tankers built for the US oil company by Bethlehem Steel at
combining bridge and funnel. Prominent also is the traditional Olsen
Sparrows Point between 1963 and 1965.
‘figurehead’.
Surrounded by yachts, the 50,000 dwt George Georgiu-Dezhwas one of a
A meeting of Esso tankers at Spithead: Belgium’s outbound Esso Antwerp
class of more than 20 large turbine tankers built for Soviet Russia at the
(1967/ 75,600 dwt) passes the inbound German VLCC Esso Europa
Admiralty and Baltic shipyards in Leningrad between 1963 and 1969.
(1969/253,900 dwt).
The 90,150 dwt Carlo Cameli, built by CRDA Monfalcone in 1964, was
BP Shipping’s 253,840 dwt, turbine-driven VLCC British Patience drifts
Italy’s largest merchant ship and propelled by the world’s then largest
up Spithead ‘escorted’ by Esso coastal tanker Esso Lyndhurst. She was
diesel, a 12-cyl large bore Fiat with a testbed output of 32,500 bhp. Note
completed by Verolme Rozenburg in 1974, four months after
her unusual two column bridge structure, the result of the original bridge
sister British Promise, and was broken up at Ulsan, South Korea after
amidships design being changed during construction.
trading for a mere eight years.
theBaltic Spring 2012 www.thebaltic.com
19
People, places, plcs
Troubled times I
worse thing we need is fear about the future.”
nternational Chamber of Shipping chairman
any definitive comment on the incident. However,
Spyros Polemis, highlighted some of challenges
this disaster seems likely to have implications
While the shipping industry had to some
the industry faces at the FT World Shipping
for all types of ships, and not just the cruise
extent been cushioned against the economic
Congress recently, not least the effect that the
sector, and will almost certainly have a major
crisis by Chinese growth, “even this beacon
Costa Concordia tragedy is likely to have on
influence on the immediate regulatory agenda of
of light cannot be guaranteed,” he warned.
the IMO’s regulatory agenda.
the International Maritime Organization.”
“If, as seems likely, the Eurozone goes into a
“I believe everyone recognised that 2012
Other challenges facing the industry included
full recession – or, even worse, implodes – the
was going to be a very difficult year for shipping
the “unprecedented economic turmoil” of recent
implications will almost certainly be global, and
financially, and that we should always be
times, Mr Polemis said. “Much of the industry is
may well reduce demand for shipping services
prepared for the unexpected.
still struggling with the serious consequences of
from China, and the other BRIC nations too.”
“What we had not foreseen, however, was
a truly massive contraction in economic activity,
Many of the problems confronting shipping have
that the year would begin with the tragedy of
with global trade estimated to have declined by
undoubtedly been exacerbated by shipowners
the Costa Concordia and that the safety record
nearly 10%.”
placing orders for far too many ships, with far too few cargoes to carry.
of the industry would be put under the spotlight
Mr Polemis said it was his view that “the
in the most dramatic way imaginable,” Mr
emphasis given by Western governments to
He urged a moratorium on new orders for
Polemis told the conference in Athens.
austerity programmes without an accompanying
ships that have no economic purpose until
“It is still far too early to know what the detailed
aggressive strategy to promote economic
the crisis was over. “Current markets would
outcome of the accident investigation will be, and
growth will simply be self-defeating. What is
appear to be demonstrating just how seriously
Rightship CLIENT it is therefore not appropriate for me to provide
Apex needed is an injection of FONTS: serious optimism. The
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20
theBaltic Spring 2012 www.thebaltic.com
People, places, plcs shipowners’ revenues, with many now struggling
But the key for this potential rise in rates
According to Ms Bill, “The minister’s remarks
to meet operating costs. In the current climate
is the demand supply gap, which will work in
referred to HMRC’s reinterpretation of the rules
of massive uncertainly, rates are as volatile as
favour of owners to a considerable extent. The
relating to the requirement that strategic and
ever. Rates for all bulk carriers, for example, are
supply of MR tankers declined marginally by the
commercial management of the ships is located
a fraction of what they were a few months ago.”
end of 2011 to 23.5 million dwt. Further, with
in the UK. HMRC has published revised, interim
Overcapacity in shipyards, he suggested,
the MR orderbook equating to 8.5% of the fleet,
guidance which broadly reinstates HMRC’s pre-
Drewry forecasts a supply demand balance of
2009 position. Further consultation with the
“Even if some shipyards go bankrupt, it is
2.3 million dwt (or 9.8% of supply) for 2012.
shipping industry has been promised, although
almost certain that their governments will step
However, it is the reduction of this balance to 0.5
no additional information has been provided
in to support them so that they can continue to
million dwt (or 2.1% of supply) come 2016 that
regarding the scope and timing of the consultation.
produce ships which few people want – other
will push rates upwards.
was perhaps an even greater danger.
than speculators.”
“The minister’s comments are a very
This demand supply balance should be
encouraging development, but it is not yet the
And shipping banks may increasingly start to
looked on enviously by others in the shipping
end of the story. It is important that the consultation
lose their patience with any companies in breach
world, none more so than the container sector as
goes ahead, so that final guidance can be issued,
of their existing covenants, he said.
these figures showcase the positive affects a well-
in order to give further reassurance to the shipping
managed supply of tonnage can have on rates.
industry. The government should take the
“The debt crisis means that banks are
opportunity to simplify and improve the regime.
expected to tighten lending to the shipping
“In addition, HMRC needs to act in a
industry as they are required to improve their balance sheets and reduce their debt to capital
EU tonnage tax stability
reasonable and consistent manner with regard to
ratios. The majority of shipping banks are still
International accountant and shipping adviser
all matters relating to the UK tonnage tax regime,
European and are already being affected by the
Moore Stephens has called for stability for
not just the strategic and commercial management
Euro crisis.
European tonnage tax regimes now that the
test. As the UK government is required to act
European Commission has begun its review of
within the EU guidelines, the outcome of the EC
EU State Aid Guidelines to Maritime Transport.
review will also be important,” she adds.
“But all shipping banks will have to comply with the stricter capital requirements of the Basel III banking rules, which are due to be phased‐in
The start of the Commission’s review was
over the next few years. As banks are forced
announced on 14 February this year. The EC
to strengthen their balance sheets, this
says the objective of the consultation is to
Piracy centre
may further reduce the finance available to
invite member states, other institutions and
A new anti-piracy centre has been unveiled in
shipowners,” he concluded.
stakeholders to provide information on industry
Portsmouth. The centre, which was set up by
developments, feedback on the application of
analysts Dryad Maritime, will monitor and analyse
the 2004 Community Guidelines on State Aid
the movements, assaults and trends of pirate
Surplus tonnage
to Maritime Transport (due for review within
action groups around the world. To seafarers,
Surplus tonnage is placing a burden on crude
seven years of their date of application) and their
the centre is a lifeline. It tells them where the
tanker freight rates in the short and medium
effects, as well as any comments and proposals
pirates are, where they are headed and what
term, however, product tankers especially MR
regarding state aid for maritime transport.
they look like. When too close for comfort, the
tankers, are expected to perform better in the
The Commission will analyse the outcome of
centre warns ships and they are diverted to safer
coming years according to Drewry Maritime
the consultation before deciding to what extent
waters. It will be manned 24 hours a day, 365
Research’s latest Tanker Forecaster report.
changes to the current rules are necessary and,
days a year by a team of ex-Royal Navy warfare
“Freight rates for MR product carriers
if appropriate, come forward with a proposal for
specialists and intelligence experts.
improved in the last quarter of 2011 owing to
revised guidelines. At this stage, the Commission
“Our new Operations Centre is a great asset
an increase in chartering activity across major
has not taken a position concerning a possible
to Dryad and to our clients in the shipping, super
trade routes in this segment. Overall, reported
modification of the existing guidelines.
yacht and energy industries. Not only does the
spot chartering activity increased by 18% in
Moore Stephens tax partner Sue Bill
new technology help with the scalability of our
4Q11. Considerable improvement was observed
says, “We hope the EC will bear in mind the
operations, but it gives the Centre a true futuristic
in the Mediterranean region where the activity
importance of stability to European tonnage
feel, something that people always associate
increased by 49% over the quarter, followed by
tax regimes. This is particularly important given
with intelligence,” says Graeme Gibbon Brooks,
North West Europe (26%) and Singapore (17%).”
the current difficult economic climate, and the
managing director of Dryad Maritime.
MR tankers stand out as having the greatest
fact that EU tonnage tax regimes are competing
earnings potential in the long term. Drewry
with other jurisdictions, such as Singapore,
Maritime Research expects that the fleet
which offer very attractive tax breaks to the
Sovcomflot
growth is likely to be restricted on account
shipping sector. It will be important for all
Sovcomflot has agreed a further joint project
of low ordering in this segment. In the short
interested parties in the EU to ensure that
with Glencore International to own, operate and
term, a marginal improvement in the Atlantic
they are involved as much as possible in the
manage four coated LR1 type product tankers
trade is anticipated, although downside risks
consultation process.”
(74,000 tonnes dwt/42,400 grt). The vessels
include the closure of several refineries in the
Shipowners in the UK tonnage tax regime
SCF Plymouth, SCF Pacifica and SCF Pearl built
US Gulf due to a lack of cash flow and the
were recently encouraged by positive remarks
in 2010 at Hyundai Mipo Dockyard Co, in South
Eurozone debt crisis. However, the demand
made at the UK Chamber of Shipping’s annual
Korea, will immediately be managed by the joint
for MR tankers is likely to grow steadily in Asia
dinner by Shipping Minister Mike Penning, who
venture. The fourth vessel, SCF Prudencia will
and Middle East regions with upcoming refinery
said the UK government had no intention of
be delivered from the same shipyard at the end
capacity additions.
touching the UK tonnage tax regime.
of February this year.
theBaltic Spring 2012 www.thebaltic.com
21
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Comment – Michael Grey
Confidence in cruising those trying to establish the truth; regulating in
If you wish to carry oil around the world in
haste, and regulating wrongly?
large quantities, you must use a tanker. Similarly a dry bulker, in whatever might be the appropriate
There are clearly a number of important
size, will be necessary if quantities of ore, or coal
elements to this particular casualty. Firstly it
need to be shipped, and if containers are your
would seem necessary to closely investigate the
business, then specialist ships are designed for
navigational procedures and bridge management
this very purpose.
of the ship herself, and the compliance with
This may appear to be stating the obvious,
company safety management systems. Big cruise
but the point is that there is no choice for
ships frequently sail close to the land to provide
the shipper but to use the specialist transport
the travelling experience their customers wish,
shipowners helpfully provide for the carriage of
but these ships are getting bigger and bigger
their cargo. But on the other hand, if you are in
and while they are amazingly manoeuvrable, the
the business of offering holidays afloat in cruise
places they squeeze into appear more constricted
ships, the usage of your vessels is entirely at the
than ever.
discretion of the potential customers. They have
There are questions about evacuation
all the choice in the world over the holiday they
in emergency, which need to be answered.
are planning.
Emergency drills need to leave no-one in any
Nobody is forced to take a cruising holiday,
doubt about their course of action when alarms
as we see from the astounding number of travel
sound. We might think of the difficulties imposed
supplements and brochures that crash onto
by the multi-lingual situation on so many cruise
our doormats. It may well be that the events of
ships and the famous advice that “everyone
the night of Friday 13th January off the coast of
panics in their own language”! It is all very well
Tuscany, and the astonishing pictures of the Costa
Michael Grey
modelling evacuation plans and even rehearsing them aboard actual ships, but how can we
Concordia lying on her side the following morning, could in some way influence the spending of
The ship grounded and sank, and people lost
really verify their effectiveness without subjecting
those discretionary holiday budgets. And while
their lives, even if somehow more than 4,000
elderly, handicapped or bewildered people to
it could be that seasoned cruise aficionados will
were saved, and we will not easily banish those
real risks. And 100 years after the Titanic, should
shrug their shoulders and note with sangfroid
astonishing scenes transmitted by the “citizen
we once again start having debates about the
and maturity that such an accident is unlikely to
journalists” who were obviously too close to the
effectiveness of lifeboats as opposed to other
happen again, those perhaps considering dipping
action for comfort. It is not easy to dispel even the
means of evacuation? But maybe we need to try.
their toes in the world of holidays afloat for the first
more fanciful suggestions from the tabloid press
And is this attractive concept of “safe return to
time, may find their attention deflected elsewhere.
about what was going on in the wheelhouse of
port” still valid? These are the sort of questions
The world is a dangerous enough place, people
the huge ship as she cruised up the Italian coast
that need a positive answer.
of a nervous disposition may conclude, without
and the sequence of events after she came so
There are clearly issues to be addressed
risking one’s life on the high seas when enjoying
violently to grief. But if confidence in cruising is to
about floodability and damaged subdivision, with
a vacation.
be quickly re-established, efforts must be made.
the problems stemming from the vessel’s listing
It is neither tasteless nor irrelevant to recall the
An expert, independent and prompt inquiry,
condition. There has been a great deal of time
mid-80s and terrorist attacks on cruise ships in the
focusing fiercely on causation and what can
and effort spent by regulators and naval architects
Middle East, which did considerable harm to the
be learned from the loss of this huge ship,
on the problems of damaged stability. But have
Mediterranean cruise trades, with US passengers
rather than apportioning blame, would do more
they all come to the right conclusions, with
electing to spend their money elsewhere for a
than anything else to provide the information
these huge hulls and their towering multi-decked
number of years. So it is thus important that every
needed for reassurance. How often have we
superstructure? Worried potential customers
effort is made to quickly restore any confidence in
seen important inquiries bogged down in legal
merely look at the pictures of the Italian ship on
cruising which may have been dented badly by
nonsense, or deflected by criminal prosecutions,
her beam ends, count the huge number of decks
the alarming pictures from the largest peacetime
while the world waits for some sort of authoritative
on ships in their cruise brochures and ask the
loss of a passenger ship since the ill-fated last
statement that will enable it to take the necessary
obvious questions. They need reassurance, but
plunge of the Titanic, a century ago.
action? How often do regulators move faster than
in plain and comprehensible language.
theBaltic Spring 2012 www.thebaltic.com
23
Tankers
Getting a result Mixed fortunes for the tanker market as many of the major tanker companies announced their results in February
A
s some companies struggle to deal
Eastern oil, has diversified its supplies of energy
with demanding conditions, others
with important effects for the VLCC market.
suggest that there may be a small ray of hope in the tanker market.
China, meanwhile, has become the world’s
In presenting its results, Eitzen Chemical said it “expects a continued challenging chemical tanker market, however, the
fundamental
second largest consumer of oil and, with
outlook for 2012 is more optimistic than for 2011 due to easing supply growth”.
Ole Hjertaker, chief executive of Ship
an extensive refinery building programme
Finance Management commented recently
underway, is in line to match US oil consumption
The company suggests that: “Only a
that: “In 2011 we experienced the weakest
within this decade, Braemar Seascope suggests.
moderate increase in demand is required for
tanker market for 12 years, but there was still a
“Consequently, the VLCC spot market has
a recovery” however the “uncertain macro
positive profit share generated by the Frontline
swung eastwards; in 2005, 20% of VLCC spot
outlook is a concern for demand growth”. It
vessels for the year. With the recent adjustment
fixtures discharged in China; in January 2012,
predicted first quarter 2012 figures to be up
in the chartering agreements, Frontline is in a
that had increased to 40%. Chinese oil refiners
on the previous quarter, albeit on a moderate
position to withstand a prolonged downturn
have swept into leading positions in the VLCC
basis, but said that the company was looking
in the tanker market and Ship Finance will
charter market. Discharges east of Suez now
to ensure its longer term financial strength
be more than compensated if the market
account for 85% of VLCC voyages out of the
in the face of the “continued slow rate of
continues at the 2011-level or above.”
AG compared to 71% in 2005.”
improvement in the chemical tanker market”. Meanwhile,
OSG
announced
that
no
to
Braemar Seascope research director Mark
Clarksons, average VLCC earnings year-to-
Williams believes this swing to the East is
dividends would be paid during the first quarter
date have been well in excess of this level.
now firmly entrenched. He says, “As Chinese
of 2012, with chief executive Morten Arntzen
Our fleet is diversified across four main market
refiners will probably add over 6m bpd of
saying: “The downturn in our international
segments, of which offshore is the largest. We
domestic refinery capacity in the next five years,
flag markets has been deeper and has lasted
currently have 65 vessels in operation which are
their presence in the VLCC spot market is likely
longer than we anticipated, as evidenced by
chartered to 13 customers, and all are current
to increase further as China makes efforts to
a fairly tepid winter market. At the same time,
with their charter payments to us.”
secure its energy supplies.”
economic uncertainty in the world persists
Mr
Hjertaker
added:
“According
Braemar Seascope research points to a
Meanwhile, Torm and its bank group have
and the banking markets have become more
changing face for the VLCC spot market.
extended the deferral of instalments and the
challenging. Therefore, to preserve liquidity
According to the shipbroker, since 2005 there
covenant standstill announced on 17 January
and maintain financial flexibility, the board
has been a 25% reduction in reported AG/
2012. The agreement is, after the extension,
suspended the quarterly dividend until further
West spot VLCC voyages from 291 in 2005 to
valid until 1 March 2012 when the company
notice. The board will reassess the dividend as
216 in 2011. Some 11 AG/West fixtures were
publishes its annual report.
our markets improve.”
recorded in January 2012; if annualised the
“I am satisfied to have agreed a new
Mr Arntzen added that the company has
total would be 180, only 62% of the number
extension with the bank group. The negotiations
made a concerted effort to reduce costs, which
recorded just seven years earlier.
continue towards a comprehensive financing
included eliminating cash bonuses and salary
The US, the world’s largest oil consumer
solution,” Torm’s chief financial officer Roland
increases for the senior management team.
and traditionally the major customer for Middle
Andersen said at the time of the announcement.
24
theBaltic Spring 2012 www.thebaltic.com
S&P
Financial squeeze One question facing those seeking to buy ships is where to get funding
A
able to sell for scrap and reinvest.
ccording to Quentin Soanes, Braemar Shipping Services executive director,
Going forward Mr Soanes predicts “quite a
the major issue as far as the sale and
thin market” for the next 12 months, dominated
purchase market at the moment is one
by cash players who are in charge of their own
of financing. “I think there is a body of thinking
destiny and can buy ships and borrow the
that the lack of finance out there may squeeze
money back afterwards. “If an owner is trying to
the values further down.”
buy a vessel subject to financing, it can get very
However he says that values haven’t come
complicated. As far as loan to value agreements
off significantly and the market was in the zone
are concerned banks will tend to look at the
where “for most ship types it is an interesting
quality of their clients rather than the agreement,
time to look and to buy”. Whether or not the
while loan to value clauses, Mr Soanes says, do
position will change over the next year as so
not seem to take the employment of the vessel
the precise timing of a good buy, Mr Soanes
into consideration. When, for example the ship
says there are a “some very serious names
has a profitable charter to an oil major one ought
out there that are beginning to buy ships, and
to be taking that cash flow into account”. According to Simon Hobbs, MD London,
their historical track record shows that they are
S&P at brokers and analysts SSY, “I think
normally good at getting their timing right”. While there have been suggestions that
that like many things, it depends a little bit on
those planning on investing in the shipping
one’s view in life, the glass is either half full or
industry might look for alternative sources of
Quentin Soanes
half empty. Obviously prices have come down but with the freight market where it is there is
finance, Mr Soanes says it is a “slightly harder sell nowadays as the freight market does not
Values are coming down to levels which
still little incentive for buyers to jump in, and
lend any support to the values”. Everyone
probably reflect the medium to long term
finance is also very, very difficult. However if you
knows that the chances are they will be
earnings of the vessel but at the same time the
are a buyer who requires to buy a number of
paying a price while having to subsidise that
price that owners are required to pay will reflect
quality ships there are not so many candidates
purchase for a period of time until the freight
a modest freight market. In a boom time the
available. No one wants to sell at what they
markets recover. The long established shipping
strength of the market justifies the values but
consider today’s lower prices, so all in all that
companies understand that process. “It could
clearly this does not hold true in the downturn.
makes for quite a thin market. However there are people who are still interested to move on
be more difficult to sell to the new investor on
As far as shipping scrapping ahead of the
the basis of a purchase that would not produce
life of the vessel is concerned, Mr Soanes says
a reward in the short term.”
this is driven less by technical factors than by
Recent comment from Fearnleys suggests
Although there may be players like this in
financial ones. There are some serious surveys
the S&P market is still slow for most ship types.
the market Mr Soanes says the main players
coming up for 20 year old tankers, he says. “If
“The price for steel plates and main engines
will be the normal ones that have been active
the market dictates that they pass that survey
is still on a declining trend leading to a further
in the marketplace. Much will be down to
then they will, if they don’t they get scrapped.” It
weakening of newbuilding prices. We currently
reputation and status as long term players in
is not a question that the ship is falling apart, but
see a major focus on fuel efficiency for tankers,
the shipping market.
with steel prices holding up some owners are
bulkers and container carries, however, the price
theBaltic Spring 2012 www.thebaltic.com
25
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S&P gap between a newbuilding and modern second
MR product tanker at Hyundai Mipo’s yard in
delivered in May 2012. The agreement includes
hand vessel is still in favour of used tonnage,”
South Korea. It also announced the sale of three
three consecutive options to extend the charter,
the analyst said last month.
of its handymax vessels, and said it was time
each for an additional year.
Availability
of
finance
for
newbuilding
chartering in two further MR product tankers.
HOCHTIEF
programmes and where it will come from was also
Scorpio’s contract with HMD is worth $36
a major feature of international law firm Norton
million, its seventh 52,000 dwt MR product
HOCHTIEF
Rose’s most recent transport survey with partner
tanker newbuilding with HMD. The vessel is
commissioned the construction of a further
Mauro Mattiuzzo commenting that, “In 2011,
scheduled to be delivered to the company in
heavy-lift jack-up vessel from the Crist shipyard
we saw a continuation of the trend for financial
April 2013.
in Poland for the installation of offshore wind
Solutions
meanwhile
has
investors, including those new to the shipping
Vessel sales include: the STI Conqueror for
farms. The vessel, Vidar, is to start operating
industry, to team with established and financially
$21 million, the STI Gladiator for $16.2 million,
in 2013 to meet the huge demand for special-
secure shipping operators to take advantage of
and the STI Matador for $16.2 million, with all
purpose equipment in this booming market. The
the upturn in the shipping market when it comes
three sales expected to close in April 2012.
Vidar will be HOCHTIEF’s fourth heavy-duty craft,
and/or to provide those operators with access
The two chartered-in MR product tankers:
following its sister vessel, the Innovation, and the
to capital which was no longer available from
include the Pacific Duchess, a 2009 built MR
Odin and Thor jack-up platforms. It will be used
traditional ship-finance banks. We predict that this
product tanker of 46,697 dwt, which will be
for the company’s own offshore construction
type of activity will continue in 2012.”
chartered-in for one year and is expected to be
contracts and will also be chartered out. Rainer
delivered in early March 2012. The agreement
Eichholz, a member of the HOCHTIEF Solutions
Scorpio Tankers
includes an option to extend the charter for
Executive Board, says, “We are banking on
S&P
an
an additional year. The Targale, is a 2007 built
the move to alternative energy sources and
announcement by Monaco-based Scorpio
MR product tanker of 49,999 dwt, and will be
accommodating market players’ huge demand
Tankers that it planned to build a 52,000 dwt
chartered in for two years and is expected to be
with our special-purpose vessel.”
activity
in
February
included
Ship scrapping © IMO
theBaltic Spring 2012 www.thebaltic.com
27
S&P RFA order to Daewoo
heavy-duty
STX will build six 50,000 dwt tankers for
equipment, the new special-purpose jack-
approximately $35m each with an option on
A new generation of 37,000-tonne tankers
up vessel will also speed up installation and
another four vessels.
is to be ordered for the Royal Fleet Auxiliary
Like
HOCHTIEF‘s
other
servicing times for the latest generation of
(RFA) to support future Royal Navy operations
offshore power plants. The Vidar’s main
Imabari
around the globe, the MOD has announced.
features will be a 1,200-metric-ton crane, a
In Japan’s Imabari Shipbuilding has won an
Minister for Defence Equipment, Support and
loading capacity of up to 6,500 metric tons, a
order for two new energy-efficient kamsarmax
Technology, Peter Luff, announced that Daewoo
powerful engine allowing speeds of up to 12
bulkers which are due for delivery from 2014
Shipbuilding and Marine Engineering (DSME) is
knots, and the ability to work in water depths
onwards.
the Government’s preferred bidder for the deal.
of up to 50 meters. These properties make the
The yard said that “In spite of increased
This represents the best value for taxpayers’
Vidar one of the most powerful lifting vessels in
size and deadweight, the vessel has achieved
money, with £452m to be spent on the four new
Northern Europe.
superior performance in fuel oil consumption,
vessels to support the Royal Navy on operations
The financing of the vessel is by means of
namely about 28 ton/day at 14.5 knots service
around the world.
an operate-lease structure with a subsidiary of
speed. Various sort of energy saving technologies
“A number of British companies took part in
Santander acting as the lessor, and with the
have been applied including ‘Highbrid Fin’ which
the competition, but none submitted a final bid
involvement of KfW IPEX Bank, Norddeutsche
is our own technology enabling better propulsion
for the build contract. In light of this, the best
Landesbank, the Spanish CaixaBank, and
efficiency.
option for Defence, and value for money for
Bankhaus Lampe.
“The vessel is highly environmentaly friendly design. The effect of such energy saving in
Navios Acquisition
terms of CO2 emission is equivalent to about
In January Navios Acquisition concluded the
a 1,800 ton reduction per year (about
acquisition of three newbuild MR2 product
7%
tankers scheduled to be delivered from a South
conventional panamax bulk carrier. The
Korean shipyard in the second, third and fourth
vessel’s EEDI is about 25% below the
quarter of 2014, respectively. The acquisition
reference line, satisfying the phase II
price is $106.5 million and will be partially
reference figure which is to be applied
financed with two new credit facilities totalling
to the vessels to be delivered from the
$84.4 million.
year 2020.” No details were given of
Navios Acquisition also took delivery of the
reduction)
compared
with
taxpayers, is for the tankers to be constructed in South Korea by DSME.”
a
the orderer’s identity or the price paid.
Nave Estella, a 75,000 dwt LR1 product tanker, from a South Korean shipyard. The vessel was
DryShips
immediately chartered-out to an oil-major at
DryShips meanwhile announced last
a net rate of $11,850 per day for a period of
month that it had signed a $87.7
three years plus two one year options. The
million firm offer letter from HSH
charter also provides for 90% profit sharing up
Nordbank to partially finance the
to $15,000 plus 50/50% profit sharing above
construction costs of three dry bulk
$15,000. The profit sharing formula is calculated
vessels. The agreement is subject to
monthly and incorporates a $2,000 premium
documentation. The company also
above the relevant index.
has a $122.6 million credit facility with China Development Bank to partially
Frontline
finance the construction costs related
With a reorganisation of Frontline’s activities
to three VLOC’s.
in recent months, John Fredriksen revealed
It also announced that it had agreed
plans to invest in new fuel efficient VLCCs for
the sale of the vessels Avoca and Padre
Frontline 2012.
for a sales price of $80.5 million. It has
The restructuring included the sale of five VLCC newbuilding contracts, six modern
also sold the 73,288 dwt Positano for an undisclosed sum.
VLCCs, including one on time charter, and four
George Economou, chairman and
modern Suezmax tankers to Frontline 2012
chief executive officer of the company
Ltd. at fair market value of $1,120.7 million.
commented:
In addition, Frontline 2012 assumed $666.3
Peter Luff
“On the shipping side, we continue
million in bank debt attached to the vessels
to execute our defensive strategy by renewing
Precious Shipping
and newbuilding contracts and $325.5 million
our fleet as evidenced by our recent decision
Precious Shipping, meanwhile has purchased
in remaining newbuilding commitments. The
to built four high-spec ice class bulkers as
a second handysize bulker from Goodearth
sale of these assets resulted in a loss of $307.0
replacements for the sale of older vessels such
Maritime.
million, which was recorded in the fourth quarter.
as the Avoca and the Padre. We believe we are
The 30,100 dwt Good Princess is understood
STX Offshore and Shipbuilding has confirmed
well positioned to weather the current market
to have cost $16.7m amd follows the purchase
that Mr Fredriksen has placed orders to for
downturn with 56% of our 2012 operating days
of the Good Pilgrims in January. Cash funding for
Won235.5bn worth of medium range product
in the drybulk segment under fixed rate charters
the purchase was supplemented by an existing
tankers.
at an average rate of about $34,720 per day.
loan facility, reports say.
28
theBaltic Spring 2012 www.thebaltic.com
BIMCO
BIMCO prioritises security guard contract Grant Hunter looks at work in progress to provide insurance cover for security firms protecting ships transiting piracy danger zones, plus other developments
W
GUARDCON is designed to ensure that
on the vessel is concerned, GUARDCON is
giving
adequate insurance cover is in place and that
careful to address this important issue through
approval for the carriage of
permits and licences are obtained as required.
emphasising that any force used has to be
armed
The contract can be used for single transits or
graduated and proportionate. The Master retains
as a framework agreement for multiple transits.
authority at all times while the security guards
ithin a very short space of time of
some
flag
guards
states on
merchant
ships, a proliferation of private maritime security companies has entered the market, offering
BIMCO has been working on this project with
are on board and retains the right to call for the
their services to shipowners. At the last count
a team of top lawyers, insurance underwriters,
guards to cease firing if he believes that their
there were nearly 200 such companies open for
P&I Clubs and shipowners, with input provided
continued action may in fact place the crew and
business; some highly professional with many
by some major maritime security firms. Many
the vessel at even greater risk of harm.
years’ experience in the security business, some
shipowners and their P&I Clubs (who review
The Rules for the Use of Force (RUF) that
very much less so.
and approve their security contracts) are eager
regulate the conduct of the security guards in
Many shipowners are now using armed
for the publication of GUARDCON as it will
response to a threat or actual attack are a matter
guards to protect their ships and crew when
bring a much needed harmonisation and
to be agreed between the owners and the
passing through areas at high risk from piracy
standardisation to security guard contracts.
security contracts. In many cases the vessel’s
attack. The concept of placing armed civilians on
While owners and security contractors are free
flag state may also wish to approve the RUF.
board otherwise unarmed merchant ships brings
to vary the commercial terms of the contract,
While BIMCO cannot draft a “standard”
with it a number of complex legal and insurance
such as the payment provisions, care should
RUF because it is a matter of national law,
issues. At present there is no internationally
be taken to avoid amending the key provisions
it is offering to assist owners in this task by
recognised formal accreditation system for
relating to insurances, liabilities and indemnities,
producing a guidance note on RUF, separate
maritime security firms, which makes it doubly
and Master’s authority. As far as the use of force
from GUARDCON. The note will be published
important that owners carefully vet any security company and carry out a thorough due diligence before agreeing to any contract for services. The sheer number of different security companies operating in the market, each offering its own in-house contract, has prompted BIMCO to develop a standard contract for engaging security services. At the heart of the new contract, which has been given the code name GUARDCON, are the insurance and licensing requirements. It is absolutely fundamental that security companies should be adequately insured to cover their risks and liabilities in performing security services. Equally important are the licensing and permit requirements – security firms need to have the appropriate licences and permits in place to allow them and their individual employees to lawfully transport weapons and ammunitions to and from the vessel and to carry those weapons on board during the agreed transit.
Grant Hunter
theBaltic Spring 2012 www.thebaltic.com
29
BIMCO clause to deal with the removal of marine growth caused by vessels lying idle over a prolonged period of time. The clause addresses hull fouling issues under a time charter party, in particular who arranges and pays for inspection of the vessel’s underwater parts and subsequent cleaning, if necessary. The drafting group is also considering potential responsibilities if the vessel’s anti-fouling system is damaged as a result of the bottom being cleaned on charterers’ instructions; and appropriate damages/compensation to owners if the vessel is redelivered without being cleaned. The new clause will be presented to BIMCO’s Documentary Committee when they meet in April in Singapore.
BIMCO House
Slow steaming clauses In December 2011, BIMCO published the Slow
along with explanatory notes for GUARDCON
Sub-committee of owners, brokers, charterers
Steaming Clause for Time Charter Parties. The
when the contract is published in March.
and club representatives from around the world
object of this highly topical project has been to
BIMCO believes that GUARDCON will be
to revise this important time charter party. The
develop a suitable charter party provision for
warmly welcomed by the industry and hopefully,
revision process is due to start in March and
general industry use.
with the full backing of P&I Clubs and insurance
a preliminary draft will be put before BIMCO’s
underwriters, could quickly become a new
Documentary Committee in April for its review.
Many owners and operators faced with high bunker prices are considering implementing slow steaming regimes to save fuel and to assist
standard in the maritime security sector.
with capacity planning. In the scheduled liner trade, slow steaming and “super” slow steaming
SALEFORM 2012 launch
Shippers join volume contract project
February saw the launch of the much anticipated
BIMCO’s efforts to develop a standard service
Other sectors of the industry are now looking
revised SALEFORM 93. A set of explanatory
contract for use in the liner industry for carriers
at the possibility of slow steaming as well, but
notes showing the differences between the 93
and shippers to agree volume shipments has
are aware of the need for a special provision to
edition and the 2012 edition accompanies the
been given a boost with the agreement of
incorporate into their charter parties to deal with
new agreement. The revision, although modest
the Global Shippers’ Forum to join the Sub-
the legal and technical aspects of this practice. It
in nature, brings SALEFORM up to date through
committee. The original Sub-committee of
was in response to this demand that the project
the incorporation of a number of commonly
major liner operators was very keen from the
of developing two charter party provisions, one
made amendments. The wording of a number of
outset that this contract should be an open
for time charter parties and one for voyage
clauses has also been reviewed and updated to
development between shippers and carriers and
charter parties, was initiated.
bring greater clarity to the agreement. The
that it would only be through such co-operation
The Specialist Working Group consists
resulting amended SALEFORM builds upon the
that the agreement will achieve the success it
of representatives from some of the largest
international and long-standing success of the
deserves in harmonising volume contracts used
operators
current edition.
by small to medium-sized shippers.
slow steaming, and valuable input has been
has been a common practice for several years.
with
hands-on
experience
of
To accompany the release of SALEFORM
provided by brokers, lawyers and P&I Club
2012 a number of one-day seminars have
representatives. BIMCO has also consulted with
been planned. Oslo and Hamburg have already
New hull fouling clause
major engine designers to ensure that the
hosted very well attended seminars even before
Over the past years vessels have been prone
technicalities of slow steaming are properly
the official launch of the forms. Further seminars
to encounter longer periods of inactivity, partly
reflected in the provisions.
are planned during the year to introduce
as a consequence of a decrease in goods to
The Slow Steaming Working Group has
SALEFORM 2012 to the market and explain
be transported, as well as the current over-
now turned its attention towards drafting a slow
what’s new.
supply of trading vessels. These circumstances
steaming clause for the use in voyage charter
have
disputes
parties and also a “virtual arrival clause”. A
relating to underperformance of the vessel
final draft of the voyage charter party clause
NYPE time charter gets an update
and overconsumption of bunkers caused by
will be presented to the Documentary Committee
the vessel’s bottom being fouled – disputes
in April along with a first draft of the virtual
Hot on the heels of the revision of SALEFORM
that could have been avoided if owners and
arrival clause.
is an update of another internationally used and
charterers had agreed beforehand on how to
well-known standard form – NYPE 93. Working
deal with bottom fouling and cleaning following
Grant Hunter
together with ASBA, who are the copyright
prolonged idling on charterers’ orders. BIMCO
Chief officer legal and contractual affairs
holders of NYPE 93, BIMCO has formed a
has recently started work on a new standard
BIMCO
triggered
an
increase
in
theBaltic Spring 2012 www.thebaltic.com
31
Dry bulk
Challenging times continue Over-tonnaging still dogs the dry cargo market as disputes continue to reach the courts, although scrapping is good business
H
yundai Merchant Marine has filed a
year the BIFFEX bottomed out at 554 points on
subsequent fixing volumes”. Newbuildings are
claim against Grand China Shipping
31 July. Last year was not a record-breaking
continuing to pour out of yards, which “combined
(Hong Kong) in the US district court in
year for tanker recycling despite the poor freight
with a high number of units drifting or anchored
Alabama over a time charter contract
markets. For four years from 1982 to 1985 over
off Singapore, South African or major Continent
20m dwt of tankers were recycled while 14m
ports, keep major routes at rock-bottom rates
The company alleges that GCS had failed to
dwt was sold for demolition in 2010. Last year
far from sufficient to cover operating expenses.”
pay charter hire totalling $16.9m although the
saw 8.4m dwt of tankers recycled, with the
figure now claimed is closer to $20m.
figure for January 2012 maintaining the trend.
for the bulk carrier Global Commander.
In announcing its results Golden Ocean predicted another challenging year for owners
Claims under the charterparty are subject to
Scrapping of all types reached 41m dwt
of dry bulk tonnage in 2012. “It is expected
arbitration proceedings in London, but Hyundai
in 2011, making it the third biggest year for
that net supply growth could almost reach the
is seeking to freeze assets of GCS in the hands
demolition ever. The second biggest was
same levels as in 2011, while demand growth is
of agents Norton Lilly International, which is
1986 when 43m dwt were scrapped, and
expected to be slightly lower resulting in lower
based in Mobile, Alabama.
the biggest ever was 1985 with 44m dwt
spot earnings and further downward pressure
According to Braemar Seascope, with the
sent to the beaches. Mark Williams, Braemar
on asset values. Further out on the curve,
Baltic Dry Index plumbing the depths, “steel
Seascope research director in London, says: “If
analysts are giving good reasons for a potential
traders can look forward to a bumper year
macro-economic conditions in 2012 continue
positive fundamental trend shift. In 2013 the
of supply of vessels for recycling this year, if
to underwhelm and if scrap prices stay at their
order book is considerably smaller and in spite
previous experience offers a guide for the 2012
recent high levels, this year could easily surpass
of a bleak outlook for the European economies
outlook. Bets are now being taken about how
1985 as a peak year for demolition.”
in particular, demand growth is expected to remain robust.
many vessels will be forced by the weak freight
Dry cargo shipping company Paragon
markets into the arms of recyclers,” the broker
announced its results for the year to 31 December
and analyst says.
2011, last month in what chief executive Micahel
mentioning in this context:
Bodouroglou said had been a “challenging” year
• A combination of poorer quality in the
“Scrap prices for ships of around $500 per light displacement tonne remain, suggesting that demand for the steel content in ships remains strong.
“There are a couple of reasons worth
Chinese iron ore production and a substantial
for the shipping industry. “For 2011, our EBITDA was negative $242m,
new capacity of international iron ore entering
while we report a net loss of $283.3m. The main
the market will most likely give a positive arbitrage for Chinese steel producers.
“Meanwhile, ship recycling capacity could
item that impacted our results was a non-cash
grow further in coming years. The China State
impairment loss of $277.3m related to the write
• It is expected that Indian ore exports will
Shipbuilding Corporation president said recently
down to market value of the carrying amounts
continue to diminish, which in turn will
that half of China’s shipyards could go bust
of seven of the company’s vessels,” he said.
result in longer sailing distances for iron ore
in the next two to three years. Many of these
The company reported adjusted EBITDA for the
yards could switch to recycling as, theoretically,
fiscal year of $54.1m.
in general. • Imported coal to China is only accounting for
the
Mr Bodouroglou said that despite the
6% of the total Chinese coal consumption
economics of recycling in Europe are currently
continued decline in the chartering market,
and, similarly with iron ore, it is expected that
not encouraging.”
the company had successfully re-chartered
could
European
shipyards,
though
positive arbitrage will stimulate imports.
it
• India will continue its strong growth in coal
24.2m dwt of bulk carriers were sold for scrap,
is sufficiently protected from any further
imports and could potentially be forced to
surpassing the 12m dwt scrapped in 2009
deterioration in the market.
import iron ore as well if analysts are right
Braemar Seascope estimates that, in 2011,
redelivered
vessels
and
believes
that
during the credit crunch, and the 11.5m dwt
“The misery continues” in the capesize
when they forecast Indian steel production
scrapped in 1998 after the Asian financial crisis,
segment according to Fearnleys, “despite
in the years to come,” the Golden Ocean
as well as the 15m dwt scrapped in 1986, the
markedly
statement concludes.
increased
spot
demand
and
theBaltic Spring 2012 www.thebaltic.com
33
Heavy lift & Offshore
Semi-submersibles shine A round-up of some recent heavylift activity
F
airstar Heavy Transport has been awarded
“The Forte and the Finesse tick all of these
“This is an innovative arrangement which
two contracts by Saipem to provide
boxes as well as having important redundancy
brings distinct benefits for both COOEC and
marine transportation services for the
features in the propulsion and ballast systems
Dockwise. COOEC will engage the world’s
Golden Eagle Project in the North Sea.
which are highly valued by our clients. The
leading heavy marine transport firm to secure
The first voyage is scheduled in early
current global fleet of marine heavy transport
profitable cargoes for their vessel and Dockwise
2013 with the Finesse. The second voyage is
vessels is largely made up of single screw,
gains access to further, premium, new-build
scheduled in early 2014 and will involve the
converted oil tankers, over 20 years old and
resource for our own clients, as demand in
Fjord. The total contract value is €11.99 million.
incapable of open stern loading operations.
the sector moves into rapid growth. COOEC’s
Fairstar has announced that it will take
Forte and Finesse will consolidate Fairstar’s
vessel will complement our own fleet capacity
delivery of the 50,000 dwt semi-submersible
competitive fleet advantage and position Fairstar
during a phase of accelerated offshore project
vessel Forte, currently under construction by
to win a series of multi-voyage contracts that are
installation and development.”
Guangzhou Shipbuilding International (GSI) in
expected to be awarded in the coming months.
China, in May this year.
Our investment decision to build these vessels
According to Willem Out, chief operating officer of Fairstar, who visited the Forte just before
will reward our shareholders with consistent and
Jumbo delivery
predictable returns for many years to come.”
Jumbo Shipping has recently transported two
the Chinese New Year holiday commented: “GSI
huge ship-to-shore Kalmar cranes, combined
has done an exceptional job. We have agreed
with a total of seven knocked down RTGs from
to take delivery of the Forte on 23 May. The
Dockwise developments
Taicang, China to Cartagena, Colombia for its
quality of the construction and the performance
Dockwise has announced an agreement with
client Cargotec. Since the STS cranes were too
features of this ship have impressed us from the
Offshore Oil Engineering Co Ltd (COOEC) to
big to handle in their fully assembled shape,
beginning of our collaboration with GSI. Forte will
act as manager of COOEC’s new build type 1
both cranes were shipped in (still respectable)
sail straight away to a module fabrication yard in
marine transportation vessel for all third party
parts to fit Jumbo Javelin’s deck and cargo
North Asia to load her first cargo for the Gorgon
projects.
hold. Because of the enormous width, height
LNG Project and is under contract for as long as
The new vessel, a semi-submersible, that is
and weight of the cranes and in order to
currently under construction at China Merchants
remain within all safety margins during the long
energy
Yard in Shenzhen, is due for delivery by the end
sea voyage, special support and sea fastening
infrastructure projects are the focus of our future
of March 2012. At 222 metres in length and with
structures were engineered by Jumbo, together
strategy. Energy majors and the engineering
a deadweight of 53,500 tonnes, the vessel will
with the client.
companies managing the construction of multi-
be capable of carrying loads of up to 50,000
billion dollar energy projects are becoming
tonnes.
twenty six months. “High
value,
multi-voyage
The crane structures, weighing up to 1,000 tonnes per piece, reached 80 metres above deck
increasingly selective in the vessels qualified to
Dockwise will operate the vessel under a
and protruded 30 metres on the starboard side
provide marine transportation services of large
management contract in close cooperation with
of the vessel. Smart engineering and precision
modules. Most of the tender pre-qualification
COOEC as part of the total Dockwise fleet of
planning made it possible for Jumbo to transport
documentation we have seen in the last year
semi submersible vessels. Dockwise will be
the two STS cranes for Cargotec in one voyage
requires vessels to be less than fifteen years old
responsible for marketing the vessel and will be
from China to Colombia. The lower portal and
and asbestos free, as well as having an open
training the permanent crew.
upper structure of the first crane were lifted and
stern capable of accommodating modules 43
Speaking at the signing ceremony, at
placed on deck separately. The complete middle
meters wide, 80 meters long and weighing up
the Marintec convention in Shanghai, Andre
piece of the second crane was lifted on deck at
to 12,000 tonnes.
Goedee, chief executive of Dockwise, said:
once in a tandem lift.
theBaltic Spring 2012 www.thebaltic.com
35
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heavy lift
expert
• Global tramp and liner services
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Heavy lift & Offshore
At the mercy of the weather Alex Blomfield and Guy Leonard, lawyers with Wikborg Rein in Oslo, look at how weather-related risk in offshore wind project constructions can be dealt with contractually
O
NE
of
the
greatest
the appropriate project participants at the various
challenges
stages of the project.
involved in delivering offshore wind projects on time and on budget is
A contractor who has not adequately
managing the risk of adverse weather
protected itself contractually may suffer the
and coping with the transportation, logistical and
consequences of adverse weather in the form
other difficulties which adverse weather can bring.
of a reduction in its profit margin or, worse still,
Severe weather conditions, wave heights,
through the payment of liquidated damages,
sea currents and extreme wind have the
increased labour and other costs arising from the
potential to significantly disrupt the construction
disruption to its works.
and installation of offshore wind projects. In terms of construction, the challenge of shipping massive components to the quayside for storage,
The contractual regime
assembly and then deployment to site, is often
No single standard-form contract exists for the
dwarfed by the task of actually installing these
offshore wind sector. To date, BIMCO, LOGIC
same components within a limited weather
and FIDIC contract forms have proved popular in
window, particularly where this takes place at
the UK offshore wind market.
long distances from the shore. Adverse weather may also have a knock-on
Under Alex Blomfield
the
BIMCO
Supplytime
2005,
payment of hire continues irrespective of delays
effect on other parties and will commonly have a
or stoppages caused by adverse weather
significant impact on the project schedule. Thus,
conditions. However, if weather conditions are
for example, if a vessel has been reserved for a
unexpected and exceptionally bad, then the
particular time slot, and bad weather prevents
company may be able to claim relief under the
work from being carried out during that period,
force majeure provisions in the charter. Under
it may be some time before another slot for that
the Supplytime, neither party is liable for any
vessel can be reserved. Additionally, variations
loss, damage or delay if the party invoking force
in the weather tolerances of different vessels
majeure is hindered from performing any of its
and the windows of good weather required
obligations under the charter. However, the party
for different scopes of work can create major
relying on an event of force majeure is expected
challenges for the scheduling of multi-vessel
to make all reasonable efforts to minimise or
installation contracts.
avoid the effect of a force majeure event. Further,
On a project basis, the multiple contracts
a force majeure event may result in termination if
in place with various stakeholders, such as
it prevents the performance of the charter for an
equipment suppliers and vessel operators, make
extended period.
the likelihood very real that one party’s delay will
The FIDIC Conditions of Contract (Red and
cause serious delay to other parties. Weather
Yellow Books) deal with the matter differently
risks need to be quantified at the time when the contract is negotiated and the risk allocated to
and allow for an extension of time for completion Guy Leonard
theBaltic Spring 2012 www.thebaltic.com
of construction if there is a delay caused by
37
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Heavy lift & Offshore ‘exceptionally adverse climatic conditions’.
Alternative strategies
Another consideration is how adverse weather
However, the contractor has no entitlement to
None of the three contractual regimes provides
delay should be reflected in the remuneration of
compensation for such conditions, and may
a satisfactory solution as to how to deal with the
a contractor, in cases where the contractor
even suffer the cost of any acceleration methods
risk of delay and disruption caused by adverse
does not assume the weather risk. This issue is
designed to mitigate the effects of such delay.
weather. So parties who use these forms as the
straightforward in the case of day-rate contracts
The FIDIC conditions do not define what
basis for their agreements will need to negotiate
such as the Supplytime, where each day of
weather events fall within ‘exceptionally adverse
specific provisions to deal with weather risks and
adverse weather is compensated at the day rate
climatic conditions’, nor is there a universally
with the impact that these risks may have on
(or perhaps a reduced rate), as a further day of
accepted definition of this term. Parties when
time and cost incurred during a project. These
hire. For lump sum contracts where instalments
negotiating a contract based on the FIDIC
provisions will need to be tailored to the specific
of a lump sum contract are paid against specified
conditions are therefore advised to define what
project and may need to be quite creative to
milestones, the picture is more complicated. In
constitutes adverse weather conditions as well
mitigate the potential impact of adverse weather
such cases, the contractor may risk liquidity issues
as the location where the applicable weather
to the project as a whole.
where completion of the relevant milestones is
When entering into negotiations, due diligence
delayed due to adverse weather. It is possible to
compare
should be carried out as to the weather conditions
solve this issue by including an ‘adverse weather
actual weather conditions experienced during
at the relevant site so that parties can negotiate
day’ payment milestone.
construction with historical weather data for the
an approach tailored to those conditions. This
Another way might be to maintain a minimum
site in question. Whether or not this is feasible
would facilitate a better understanding of the
monthly payment under the contract in addition to
depends on the availability of historical data.
potential impact of adverse weather risk at the
the milestone payments. In the former case, if the
Given that the first offshore wind project in
outset of the project and reduce the risk of
period of adverse weather exceeds the stipulated
Europe dates back to the early 1990s, the data
significant schedule and/or costs adjustments
allowance, the contractor will be reimbursed
available to permit a comparison of current and
being introduced further down the line.
on the basis of the additional ‘adverse weather
measurements are to be taken. One
approach
could
be
to
day’ milestone.
historical weather information is limited and may
An allowance for adverse weather conditions
not be conclusive. For instance, metmasts, which
can also be built into a construction schedule.
Contractors will need to be careful to observe
are used to collect wind data, have only been
Calculating a realistic allowance can however be
any notice or other formal requirements relating
installed in recent years, thereby limiting the
extremely challenging. Weather data may provide
to claiming an extension of time due to adverse
empirical value of such data.
predictions of likely conditions over the course of
weather. Daily weather logs should be kept as
The FIDIC conditions also contain force majeure
a fixed period of time. However, each operation
well as records of the work which has been
provisions, the definition of which includes natural
may require specific windows of ‘good’ weather,
affected by weather, the nature and cost of the
catastrophes such as earthquakes, hurricanes,
for example a specified number of hours to
delay and the steps taken to minimise such delay.
typhoons and volcanic activity. Although force
relocate from one location to another, or to install
These records should be as detailed as possible
majeure events do not affect the obligation to
one or more blades on a turbine. At times or
so as to ensure there is sufficient evidence of the
make payments to the contractor, the challenge
locations where weather is typically changeable,
severity of the weather conditions.
lies in establishing that the adverse weather
such weather windows may take substantially
Developing a market standard approach
conditions being experienced are sufficiently
longer to appear than can be deduced from the
to the issue of adverse weather risk in the
serious to constitute natural catastrophes.
mean weather readings.
construction of offshore wind projects should
The LOGIC General Conditions of Contract
The potential margins of error in building
be a priority for the offshore wind sector. It
2003 also deal with adverse weather as part
contingency into a project schedule are enormous.
is likely that some degree of tailoring would
of the force majeure clause. However, in these
Where there are multiple vessels working on an
remain necessary to reflect the peculiarities of
conditions force majeure only extends to
integrated schedule, errors in these calculations
the individual projects. Nevertheless, all parties
physical disasters and excludes all other weather
are likely to prove costly. Where a contractor is
would benefit from the reduced negotiation time
conditions regardless of severity. In contrast to
contracting on the basis of a lump sum, fixed
and increased certainty that this would bring, not
the FIDIC conditions, the LOGIC form does not
schedule contract, it would be prudent to include
least given the complexity of multi-contracting
have a general extension of time clause. Instead,
significant contingency in terms of time and cost
structures for offshore wind projects.
the contractor will be held responsible for the
to reflect this risk. If the weather is favourable, the
timely completion of all work done and will have
contractor may receive a considerable windfall
to notify the company of any proposed or actual
and the employer may face substantial wasted
An interesting development
stoppages of work and any other matter likely
costs in terms of the rest of the spread.
BIMCO has announced that its drafting
to affect its completion. The LOGIC contract
Employers,
therefore,
may
attempt
to
committee is working on a new standard
does favour the contractor in so far as it has the
carve out adverse weather in general, or some
contract for offshore wind farm maintenance
unilateral right to suspend works in the event
excess of adverse weather, from the lump-sum
service vessels. Although this will not be tailored
that such suspension is necessary for the proper
contract price and include it as a reimbursable
to the larger vessels that need to be used for
execution or safety of the work in question.
element. This enables the project schedule to
the installation of turbines, foundations, cables
Unless work is suspended due to contractor
be calculated against the most realistic projected
and substations, it will be interesting to see if
default, the LOGIC contract stipulates that the
weather patterns, thereby minimising the risk
this form provides any progress on a market-
contract price shall be adjusted in accordance with
of wasted spread costs where the weather
standard approach to dealing with weather
the relevant provisions relating to remuneration.
follows the projections. This will not cut out
risk. However, no amount of clever contractual
Parties will need to take this into consideration
all of the fat, however, as the employer will still
drafting will eliminate the dramatic impact that
and allow for appropriate rates in the event of
need to ensure the availability of the spread
adverse weather can have on the timely and
suspension due to weather-related conditions.
in case the projections are wrong.
on-budget completion of offshore wind projects.
theBaltic Spring 2012 www.thebaltic.com
39
Towage and salvage
Salvage industry must prepare for new challenges In tough market conditions, salvors face tackling the new generation of mega container and cruise ships
R
ecent, widely publicised casualties
to unload the containers, and where to store
as best it can. Proper planning and research,
involving
the
any boxes which are salvaged. And how would
and a commitment to invest in new initiatives,
containership Rena off the coast of
you go about unloading boxes from some of
will help. But it may be the case that the wider
New Zealand, and of the cruise ship
the current stacks, which are extremely high?
shipping industry will have to fully consider the
Costa Concordia in Italy, have focused public
Do we even have the cranes to handle this sort
implications of how we respond to casualties
attention once more on the dangers inherent in
of situation?
involving ever larger merchant vessels.”
the
grounding
of
operating ships.
“One thing we do know is that it will take
The fact is that, whether employed as
a significant level of investment to equip the
workhorses in the international transportation
salvage industry to the level which is likely to
Deepwater Horizon moment
of goods, or as floating hotels for the leisure
be required to respond to such a situation.
Andrew Chamberlain, a partner at law firm
industry, ships – and those on board them –
Multraship continually invests in the maintenance
Holman Fenwick Willan told Maritime London
are never far removed from potential danger.
and improvement of its fleet, its equipment and
delegates in January that “We are going to have
The shipping industry is highly regulated, and
its personnel. Other operators do the same.
a shipping case that is our Deepwater Horizon
has an excellent safety record, but – like any
This is despite the fact that the salvage industry
and the only surprising thing is that it hasn’t
other industry – it is vulnerable to operational
is hurting as badly in the current economic
happened yet”.
disasters. It is the job of the international salvage
downturn as is the wider shipping industry which
Sadly the event took place only two days
industry to respond when things go wrong in
it serves. Even so, new investment alone may
before the Costa Concordia tragedy. Salvors
shipping, but it could be argued that the nature
not be enough.
have repeated raised concerns about salvage
of the challenge faced by the salvage sector
“The salvage industry is putting a great deal
operations involving large cruise ships as well as
has now changed, to the extent that a rethink
of thought into this issue, and trying to prepare
mega containerships, the subject for discussion
is required.
at the Maritime London event.
Leendert Muller, managing director of
In discussing whether the industry was ready
Netherlands-headquartered towage and salvage
for a casualty involving the new generation of
specialist Multraship, says, “The Rena was by
mega containerships, Mr Chamberlain, like Mr
no means one of the larger containerships.
Muller, pointed to the fact that casualties such
There are ships with five times that capacity
as the MSC Napoli, the MSC Chitra and most
in operation today, and if one of those were
recently the Rena, did not involve very large
to suffer a similar fate to the Rena then we
container vessels. At 4,688 teu, the Napoli was
really might be testing the boundaries of the
the largest containership in the world when she
salvage industry’s resources. The same, or
was built and now ships are being built which
similar arguments, could be advanced in terms
can carry three times as many containers.
of the increasing capacity and size of today’s
Compared to the past, when a major casualty
cruise ships.
would have had 10-15 bidders from the salvage
“The salvage industry is assessing the
industry, there were now only a handful of global
challenges posed by the development of mega-
players and the salvage industry was “in the
sized containerships, but it is not necessarily the
eye of the perfect storm,” Mr Chamberlain said.
size of such ships which might be the problem.
He described the salvage industry as being “in
There are already some very large tugs out
crisis” with not only revenues, but the number of
there, and arguably sufficient numbers of them
cases down on previous figures.
available to respond to a major casualty. More
Not only was the industry facing a global
to the point, perhaps, is the issue of where
recession but the dynamics of salvage cases
40
Leendert Muller
theBaltic Spring 2012 www.thebaltic.com
Towage and salvage had changed dramatically because, while in the
New appointment
past most of the value was in the ship, 80-90%
The International Salvage Union last month
of value now centred on the cargo. Added to
announced that it has appointed Mark Hoddinott
this, the environmental lobby was becoming
to succeed its secretary general, Mike Lacey, on
increasingly vocal and political pressures had
his planned retirement at the end of 2012. He
also increased.
will start with ISU in April 2012 and he will work
In considering which salvage contract is
closely with Mike Lacey for the rest of the year
appropriate, Lloyd’s Open Form (LOF) is more
to ensure a smooth transition of responsibilities
relevant than ever, Mr Chamberlain said, as
between them before he takes up the position
it was the only contract that could be agreed
formally in October.
instantly, and best endeavours obligations on
Mark Hoddinott will be general manager
salvors were very tough. These mean that
and will combine the role of secretary general
the salvor has an obligation to “throw all his
with that of general manager which will be
resources at the problem”.
vacated this spring on John Noble’s planned
The introduction of the Special Compensation
retirement. He is well-known in the shipping
P&I Club (Scopic) clause has given LOF a
sector and has extensive experience of the
“rejuvenatory boost,” he added. However
salvage industry. He started his career at sea
claims were rising, as were clean-up costs, and
and holds a Master Mariner’s Certificate. He
disposal and recycling of wrecks was practically
joined the UK’s United Towing as a salvage
impossible under the terms of the London
Mark Hoddinott
Dumping Convention protocol and the Ospar Convention. Another challenge was managing to get general average and salvage security in
officer in 1982 and subsequently served as salvage master, performing a number of notable
allowed into the River Scheldt.
salvage operations. He later moved into senior
Salvors, Mr Chamberlain told Maritime delegates,
faced
a
number
management with Howard Smith, then Adsteam,
cases where hundreds of cargo claims might
London
of
before joining US-owned Titan Salvage as its
be involved.
challenges, not least because of the “fashion”
managing director for Europe. Mark Hoddinott
With 140 mega container vessels at sea, Mr
for accusing them of negligence which made it
has also served on the ISU’s Lloyd’s Open Form
Chamberlain expressed surprise that a major
“hardly surprising” if they did not rush to assist
Sub-Committee since its inception in 2006 and
casualty had not yet occurred. Last year’s
a casualty. The issue of whether big players will
has been the chairman of that committee for the
grounding of the 11,660 teu MSC Luciana
be averse to taking risks, and the difficulties of
past three years.
fortunately resulted in a successful salvage
recruiting and training new salvage masters are
The president of the ISU, Andreas Tsavliris,
operation within hours, however the vessel was
just two problems. Investment in equipment
said: “Mark is just the right person to take
in real danger of breaking her back, and has
is also necessary as equipment may not be
over from Mike. He knows the salvage industry
sparked a “vigorous debate” in Holland and
available to deal with offloading cargo during an
extremely
Belgium as to whether big vessels should be
incident where all the value is in the cargo.
operations as a salvage master and he also has
well
having
conducted
many
impressive experience in senior management roles. It is with great pleasure that I welcome him aboard. “I should also like to thank Mike Lacey for the huge contribution he has made to the ISU over many years. His achievements are immense – too many to list – suffice it to say he has been at the forefront of our work and his legacy lies in the numerous documents, contracts,
conventions,
and many other aspects of
the
marine
salvage
business in which he has been involved, as well as the
successful
meetings
that
general he
has
organised since 2006 for ISU. He will leave the ISU in very good shape and on very good terms.” MSC Luciana
theBaltic Spring 2012 www.thebaltic.com
41
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Participants study the material in between sessions and write an assignment for each module. These assignments, as far as possible, will be focused on a problem related to the candidate’s own firm. For the final integrating strategy project, topics should be chosen for their strategic purpose and integrating function, giving participating companies a valuable and practical analysis.
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Pre-MBA (optional) Module 00
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Shipping as a Business and a Market Module 01
Shipping as a business and a market + Leadership
Understanding the Global Environment Module 02 Module 03
Supply-chain management – new logistical challenges International economics and market analysis + Leadership
10-15 Feb. 2014
Focus on Maritime Issues Module 04 Module 05
Ship design 07-11 April 2014 The maritime legal framework Operational management and information technology 23-28 June 2014 + Leadership
Hamburg Germany Copenhagen Denmark
Core Management Issues Module 06
Investment analysis, risk management and finance
01-05 Sept. 2014
Module 07
International marketing and organization Introduction to ISP Process Managing strategy and change Introduction to Industry Analysis + Leadership
03-07 Nov. 2014
Module 08
12-17 Jan. 2015
London UK Copenhagen Denmark Copenhagen Denmark
Integrating Strategy Project (ISP/Thesis) Presentation of Industry Analysis Introduction to Company and Issue Analysis Presentation of Company and Issue Analysis Introduction to Implementation Plan Presentation of the ISP with Implementation Plan (oral defence)
18-20 March 2015
Graduation
08 August 2015
20-22 May 2015 05-07 August 2015
Copenhagen Denmark Copenhagen Denmark Copenhagen Denmark Copenhagen Denmark
Shipmanagement, crewing and education
Slow-steam ahead as ship manager defends claim Liability for engine damage or cargo shortages are just two areas which ship managers and operators have to tackle
S
hip managers face exposure to liability
engine was not caused fundamentally by the
completion of discharge are always based on
on a number of different fronts. By way
slow-steaming and that the late replacement of
the difference between the net bill of lading and
of example, International Transport
the piston-ring had a negligible impact.
outturn quantities in the first instance.
Intermediaries Club (ITIC), the specialist
This analysis was the basis for a strong
Even if both terminals carry out their
mutual which provides professional indemnity
defence and settlement was agreed for a
measurements diligently, each will, quite legally,
insurance in the transportation sector, cites a
nominal amount.
round off temperature and ullage readings in
case involving main engine damage suffered by
its favour, so differences are only to be expected.
a gas carrier managed by one of its members.
The bill of lading quantity may be overstated
Tanker cargo shortages
and the outturn quantity may be understated. In
engine and found that the piston ring had been
One of the major sources of cargo-related
the absence of a like for like comparison, the
subject to excessive use and caused damage to
claims in the tanker sector is the focus of a new
ship is the only common factor and therefore
the main engine. The manufacturer of the piston
publication from the UK P&I Club entitled ‘How
the measurements that are taken on board are
ring recommended a working life of 8,000 hours
to prevent tanker cargo shortage claims’.
extremely important.
The owners conducted a survey of the main
but the manager allowed it to be used for slightly
The new publication explores the causes of
The checklist also points out that cargo
longer. The owners claimed that the ship manager’s
claims and how to avoid them during pre-loading,
inspectors are, like all of us, human and therefore
negligence caused the engine damage.
loading and unloading. It identifies the main
do from time to time make errors. Causes of
The ship was slow-steamed during the
causes of cargo loss, the discrepancy between
errors and how to avoid them are detailed.
member’s management and it was suggested
what was loaded and what was discharged,
When unloading, again a good relationship
that this had also added to the damage. When
arising from both on board and shoreside failings
with the cargo inspector at the discharge port
the damage to the main engine came to light, the
and compiles the key points to consider in
is essential.
manager replaced the piston ring but, to save
several distinct sections, running from the pre-
fuel, the ship continued at 50% speed.
loading phase through to discharge.
ITIC obtained technical analysis of the claim,
The checklist begins by considering whether
which confirmed that slow-speeding over
the ship is suitable for the nominated cargo or
extended periods is widely known to risk
cargoes to be loaded to ensure, as far as is
damaging the engine. The decision to slow-steam
practical, whether charterers have provided
was taken by the owner, with whom rested
adequate
ultimate responsibility. In addition, the owner’s
and maintaining records during loading and
representative on board, the chief engineer,
on passage.
would have seen the damage as it developed and should have reported it to the owner.
information
on
cargo
The checklist, was produced with the assistance of Captain David Payne of Associated Petroleum Consultants Ltd.
planning
Any meeting with terminal staff should not be limited to filling out cargo and safety checklists,
It also came to light that the ship had been
the club says. It’s in the ship’s interest for the
slow-steamed under a previous manager for a
chief officer to take these opportunities to build a
longer period. In view of the fact that the ship
strong working relationship with shore personnel.
was slow-steamed for a longer period before the
Likewise, a good relationship should be
member took over its management, most of
developed with the cargo inspector.
the damage would already have occurred. There
Establishing the amount of cargo loaded is of
was no conclusive proof that the damage to the
course critical. Claims for alleged shortages after
44
theBaltic Spring 2012 www.thebaltic.com
UKP&I tanker shortages
Shipmanagement, crewing and education New InterManager members
were put in prison for environmental incidents
Ship
over which they had little control.
management
trade
association
The
InterManager is expanding with new members
shipping
industry
has
become
including ship management companies Histria
increasingly alarmed that new entrants will be
and Green Wave, international law firm Hill
put off by fears of becoming embroiled in court
Dickinson and crew communications provider
cases relating to pollution incidents, or face
SMART Link.
gaol sentences. At a time when retention of key
InterManager has also appointed Captain
shipping personnel is vital, the industry is also
Paddy McKnight as its International Maritime
concerned that experienced crew members will
Organisation
decide to find alternative sources of employment
permanent
representative.
rather than face the risk of prosecution.
InterManager was previously represented at the
INTERTANKO will be working with the World
IMO by Svein Sorlie of Wilh. Wilhelmsen Holding
Maritime University and with the individual
ASA, who has now retired from shipping.
student chosen to undertake the new study.
Captain William (Paddy) McKnight spent 37 years in the Royal Navy, during which time he
The association has identified criminalisation
Commanded three warships – HMS Shetland
as a high priority item for its work plan. In
and frigates HMS Leander and HMS Brave –
addressing this issue, INTERTANKO’s insurance
and was second-in-command of The Royal
and legal committee has sought to study
Yacht Britannia.
emerging cases, case law and national, regional and international law which supports this ‘blame
On leaving the Royal Navy he spent 15 years as the UK representative at the Japanese
Joe Angelo
culture’ trend. “It is this blame culture that has led to
Shipowners’ Association and was a member of the shipowners’ delegation throughout the
Oil spill software
the criminalisation of our seafarers simply for
genesis and development of the Maritime Labour
The Great Lakes International Marine Training
doing their job,” says Ken Marshall, chairman of
Convention at the ILO in Geneva.
and Research Centre has recently launched its
INTERTANKO’s insurance and legal committee.
PISCES II oil spill software.
“We believe that this work will be a tangible
Commenting
on
his
appointment
benefit to our members and indeed to seafarers
InterManager secretary general Kuba Szymanski
The simulation equipment is an addition
said: “We are delighted to welcome Paddy
to the TRANSAS bridge simulation equipment
to InterManager’s team and look forward to
already in service and means that oil, fuel and
It is to assist this study that the association
working with him. He is an industry veteran
almost any other type of spill can be modelled
is establishing from January 2012 a PhD
with the characteristics we believe this position
and trained through this software.
Fellowship in Marine Pollution Law at the World
and the whole shipping industry worldwide.”
Maritime University in Malmo, Sweden.
demands and his presence at the IMO will
“This new equipment and software uses
enable us to ensure our organisation is fully
very realistic current and other meteorological
“INTERTANKO has taken every opportunity
appraised of key industry matters and that our
information so that companies and their teams
to highlight the unfair treatment that is frequently
members views are suitably represented.”
can participate in highly accurate exercises and
meted out to seafarers after an unfortunate
test plans to a level not previously possible,”
accident,” says Joe Angelo, managing director.
says Captain Peter Buell, director of the centre.
“The association is keen to bring to an end
“Features include the same high level of charted
the common infringement of seafarers’ basic
accuracy as the TRANSAS bridge system. Real-
human rights.”
time reactions are used and exercises can be
The fellowship programme will research into
time-lapsed to move from event to event quickly,
the growing trend of criminalising seafarers
but with realistic results, and consequences to
in marine pollution incidents. By conducting
decisions made.”
a comprehensive analysis of existing judicial
Management training also has the same high
decisions relating to marine pollution incidents,
level of realism. The six-day course covers all
it will look at whether such criminal proceedings
elements needed to manage a spill event and
are in compliance with existing international
culminates in a full-day exercise putting into
law. In particular it will examine the notion of
practice what has been learned.
criminal liability in marine pollution law, and the implementation of international conventions (UNCLOS, MARPOL) under domestic laws and
Criminal liability organisation
“Seafarer welfare has always been a
INTERTANKO is to fund a three-year PhD study
matter of prime concern in the development
into the emerging law and policy on criminal
and delivery of the WMU curriculum” says
liability for marine pollution and the effects of this
Proshanto Mukherjee, professor of maritime
on seafarers.
law and policy “WMU therefore welcomes this
Independent
Kuba Szymanski
EU law.
tanker
owners’
The issue of criminalisation of seafarers has
fellowship opportunity generously provided by
become of increasing concern in recent years,
INTERTANKO in pursuit of intensive analysis of
with a number of high profile incidents like that
the criminalisation of seafarers through doctoral
of the Hebei Spirit or the Prestige when masters
research at this university.”
theBaltic Spring 2012 www.thebaltic.com
45
FFA
Steel challenges John Banaszkiewicz considers how utilising risk management software could benefit every player in the steel industry, from the producer to the end user
T
he global steel industry is facing the
freight and steel products, each tradable on
biggest challenge in its history and is
their own or linked to provide hedging along the
set for a period of radical change not
supply chain. We think the time is right for the Virtual
seen since the Iron Age.
Over the years, steel has been seen as
Steel Mill based on the changes we see going
traditional and conservative, particularly in
on in the steel industry. On the demand side,
procurement, favouring a combination of long-
there is a growing marketplace comprised of
term contracts and annual pricing to secure its
financial players (banks and funds), physical
supply chain.
players (mills and mines) and service providers
This system worked well when prices were
(shipowners and trading houses). Macro-
stable and demand certain, but the future will
economic uncertainty is creating interest to trade
not be like that. The future of steelmaking and
on both a speculative and hedging basis.
trading will require the use of risk management
In Asia in particular, there is increased interest
across all raw materials and finished products.
in trading freight and commodities together,
The drivers of this are a huge increase in spot
with dedicated teams of traders emerging. As
price visibility for iron ore, steel, coking coal and
John Banaszkiewicz of Freight Investor
noted above, volatility and volume is increasing,
freight and increased volatility in prices, not just
Services
creating the conditions for improved risk management.
of raw materials but of finished products, too. For example, in 2011 iron ore delivered into
Steel mills are opposed to frequent changes
On the supply side are hybrid voice/screen
China has seen highs of $191.90 per tonne and
in pricing but will increasingly find themselves
brokers such as FIS, regulated electronic trading
lows of $116.90 per tonne, a difference of 39%.
dealing with suppliers whose prices are index-
platforms such as Cleartrade, clearing houses
Australian origin coking coal has seen highs of
linked to provide transparency.
with freight and commodity expertise such as
$336.25/t and lows of $246.15/t (27%). Chinese
This has created the conditions for increased
LCH.Clearnet and SGX AsiaClear. Don’t forget
reinforced bar steel has seen highs of $786.36/t
use of cash-settled iron ore swaps by producers,
that these are regulated markets (by the FSA in
and lows of $677.47/t (14%).
traders and mills alike. The growth in this market
the UK, MAS in Singapore) that are in step with
So for a 50,000-tonne iron ore cargo, the
has been phenomenal. More than $8.7bn or
changes taking place in financial regulations.
$75 difference between the high and the low of
56m tonnes of iron ore swaps, options and
After iron ore, coking coal is the second
2011 represents a potential loss (or saving)
futures contracts have been traded against the
‘new’ ingredient in the Virtual Steel Mill with an
of $3.75m. In 2009 some 80-85% of iron ore
TSI contract alone, with considerable additional
established physical market which is moving
was sold under annual, fixed price agreements,
volumes settled against the Metal Bulletin and
towards spot pricing and embracing risk
with just 15-20% sold spot. By 2011, just
Platts indices. In 2011, total liquidity in cleared iron
management. Global steel production is highly
15-20% was being sold on a spot basis and
ore swaps was some 47m tonnes with substantial
dependent on coking coal, with 70% of the
70-80% under index-linked pricing. Just a tiny
additional tonnage traded over the counter.
steel produced today using it as a raw material.
Steel success in future will derive from
World crude steel production was 1.4bn tonnes
The move to index pricing, driven by the iron
improved market intelligence and research
in 2010, accounting for around 721m tonnes of
ore producers, was made to reflect the volatility in
and the greater use of risk management
coking coal demand.
pricing caused first by increased demand then by
through access to derivatives markets. To help
Just like iron ore, a swaps market is emerging
price weakness. Major iron ore producers are
steelmakers, traders and importers come to
to help producers and consumers manage risk.
increasingly keen to move from quarterly pricing to
terms with the new reality, Freight Investor
The first coking coal swap was traded in August
index-linked sales as they seek to track the spot
Services (FIS) has developed the Virtual Steel Mill,
2011 and total volume of swaps traded so far is
price. The iron ore majors have made clear that
a concept that encompasses risk management
around 87,000 tonnes.
this move is a one-way process, with limited
from producer to end user, combining cash-
The liquidity of the physical market means
opportunities to revert to quarterly pricing in future.
settled swaps for iron ore, coking coal, scrap,
there are some 26 coking coal price indices
46
theBaltic Spring 2012 www.thebaltic.com
fraction is still sold under long term contract.
FFA produced daily by Argus and Platts. Alongside the OTC
TSI Iron Ore China Delivery 62% Fe
market, there are three contracts listed on CME for mid and
200
low vol products all basis FOB Australia. Coking coal swaps
190
participants include coal suppliers, steel mills, commodity
180
traders and financial institutions.
170 160 $/dmt
The less mature parts of the Virtual Steel Mill like coking
150
coal, scrap and finished steel can learn from the experience
140
of the freight market. The volume of cleared Forward Freight
130
High: $191.90/dmt Low: $116.90/dmt
120
Agreements in 2011 fell, but only slightly. FFA volume totalled
110
just over 1 million lots – Capesize FFA volumes were up
100 Jan‐11
by 12% and options climbed by 28%, meaning that the
Feb‐11
Mar‐11
Apr‐11
May‐11
Jun‐11
Jul‐11
Aug‐11
Sep‐11
Oct‐11
Nov‐11
Dec‐11
Source: The Steel Index, Freight Investor Services
aggregate decline was just 0.19%. Key FFA players already include many of the same
Coking Coal Spot Prices ( fob Australia)
participants who are looking at the Virtual Steel Mill, spanning
350
the supply chain from mine to mill. FIS believes that steel industry players need new ways of
325
working. Volatility means price risk and the chance that your producing finished steel.
300
High: $336.25/dmt Low: $230.09/dmt
$/tonne
margins will be wiped out between buying raw materials and
275
The physical and derivatives markets are closely linked, so that the forward curve, which shows prices at a range of
250
future dates provides not just a view on price direction but 225
a real competitive advantage in the physical market. Using
Jan‐11
Feb‐11
Mar‐11
Apr‐11
May‐11
Jun‐11
Jul‐11
Aug‐11
Sep‐11
Oct‐11
Nov‐11
Dec‐11
Source: Argus Media, Freight Investor Services
hedging means that users can shift the focus in physical negotiations away from purely price and onto an added value
Capesize Freight Tubarao ‐ Qingdao
relationship – physical relationships are not only maintained 31
but strengthened.
29
Hedging is accomplished by means of a cleared, over
27
the counter, cash-settled swap. The OTC swap is traded in swap is submitted for clearing to a clearing house meaning
High: $30.73/t Low: $16.56/t
25 $/tonne
conjunction with and not in place of a physical trade. The
23
that default risk is covered. The swap is cash-settled,
21
meaning there will be no physical delivery associated with
19
it. By trading OTC swaps in parallel to trading a physical
17
product, a buyer can lock in the future price they pay and
15 Jan‐11
Feb‐11
Mar‐11
Apr‐11
May‐11
Jun‐11
Jul‐11
Aug‐11
Sep‐11
Oct‐11
Nov‐11
Dec‐11
Source: Bal;c Exchange, Freight Investor Services
a seller can lock in the future price at which they sell in the physical market.
Cape Freight W Aus ‐ Qingdao
Trading OTC swaps without a parallel physical position is 14
term, most experts agree that markets need a certain amount
13
of speculation to generate liquidity and volume. Speculators
12
are there to absorb the risk that hedgers offload.
11
Comparing freight and metals to other commodity
$/tonne
known as speculation. Despite the bad associations of that
High: $13.46/t Low: $6.34/t
10
markets, the first FFA trade was concluded in 1992 and it
9
took another 10 years for clearing to emerge. Today physical
8
and paper market volumes are close to 1:1 parity. The first
7
iron ore swap trade took place in 2008, with clearing added
6 Jan‐11
Feb‐11
Mar‐11
Apr‐11
May‐11
Jun‐11
Jul‐11
a year later. Physical to paper parity is around 1:0.16. In the
Aug‐11
Sep‐11
Oct‐11
Nov‐11
Dec‐11
Source: Bal;c Exchange, Freight Investor Services
thermal coal market, the ratio is 1:4 and in crude oil 1:10.
Chinese Rebar
Taking steel as a single commodity market, it is second only to oil in size and therefore represents a huge opportunity
790
for increased risk management. We foresee a situation in the
770
not too distant future where steel industry participants are 750
products in the same way that other commodity producers
$/t
trading a ‘blast spread’ across raw materials and finished
730
and consumers trade ‘crack spread’ in the oil market, or
710
‘crush spread’ in agricultural products.
690
This new reality is still emerging but the direction is set. All
670
serious steel market participants need to embrace the Virtual
650 Jan‐11
High: $786.36/t Low: $677.47/t
Feb‐11
Mar‐11
Apr‐11
May‐11
Steel Mill and all the benefits it will bring.
Jun‐11
Jul‐11
Aug‐11
Sep‐11
Oct‐11
Nov‐11
Dec‐11
Source: Cleartrade, Freight Investor Services
theBaltic Spring 2012 www.thebaltic.com
47
Corporate viewpoint Triple Point Technology
Staying afloat in rough waters: conquering mark-to-market valuation challenges By Javier Navarro, freight risk solutions manager, Triple Point Technology
H
ow confident are you that you know – really
to use complex formulas to “adjust” the indices to
Furthermore, many companies will limit
know – the true value of your business on
account for the proper vessel sizes and routes.
themselves to using the simplistic in-the-money/
any given day? Are you 100% certain that the
This is frequently done using antiquated
out-of-the-money calculation to drive valuations
methods and tools you’re using to calculate
spreadsheets, which is a very dangerous method
rather than other, more complex methods that
your fleet’s mark-to-market value are providing
for calculating freight rates. Spreadsheets are
are more accurate – purely because the more
accurate results?
prone to human and formula errors that cause
complex methods are difficult to manage in a
If you have to stop and think about your
inaccuracies, which in turn affect the MTM
spreadsheet. Companies using the in- and–
answers to either of these questions, then your
valuation of the entire portfolio. Overvalue the
out-of-the money calculation stand to lose a
company’s future may be at risk.
fleet and there will be a very rude awakening
significant amount of capital, especially when the
when an unexpected event requires funds
market is close to the level of the contracted hire
which, to the company’s surprise, don’t exist.
rate, because the formula is not sophisticated
In the turbulent seas of the shipping industry, understanding the true market value of your fleet
enough to effectively account for the frequent
is the difference between sinking and swimming.
Challenge 2: Calculating the value of multiple voyages
swings of the market.
cargoes and vessels, operating expenses such as bunker fuel costs, and other variables mean
Another component of MTM valuations is the
The solution
that a fleet’s value has the potential to swing
number of voyages that a vessel is expected to
The good news is that charterers and operators
wildly from one day to the next.
make. It’s often uncertain as to what a vessel’s
can maximise profitability and minimise exposure
Performing frequent mark-to-market (MTM)
activity will be. If there is only one trip, then
to risk with chartering and vessel operations
valuations is an integral part of doing business,
usually it’s clear what voyage will be undertaken.
solutions that are designed specifically to
and is critical to ensuring the financial health of
If there are multiple voyages, a valuation must
address these challenges.
a commercial shipping operation. However, due
be made using a best guess on what the
Softmar Chartering and VesselOps™ from
to the highly unpredictable nature of the industry,
subsequent voyages will be. This uncertainty,
Triple Point Technology® is the leading software
the complexity of calculating freight rates, and
compounded with the use of spreadsheets, can
solution for comprehensively managing freight
flaws inherent in popular valuation methods and
make producing an accurate MTM valuation
risk, chartering and vessel operations on one
tools, companies often end up with inaccurate
exceptionally difficult.
integrated platform. Error-prone spreadsheets
Volatility related to the number of available
numbers. This provides an erroneous picture
are eliminated, enabling companies to operate
of financial standing that can result in lost
Challenge 3: Maintaining objectivity
with a complete picture of enterprise position
profits, faulty decision-making, and ultimately the
Perhaps even worse than performing calculations
and exposure. The solution also empowers
demise of an entire business.
with antiquated spreadsheets is performing
charterers and shipowners to make more
challenges
calculations based on subjective information.
informed and proactive decisions, streamline
associated with calculating accurate MTM
Some companies perform MTM valuations using
day-to-day operations, and protect profits by
valuations and how to address them is critical to
numbers based on personal and often skewed
providing a global view of vessel movements,
staying afloat in the rough waters of the cutthroat
views of the market. It should go without saying
market cargo availability and existing cargo
shipping industry.
that this subjective input can result in very
commitments. With Chartering and VesselOps,
inaccurate numbers that obliterate all hope for a
the commercial maritime community can:
valid MTM valuation.
• Quickly and accurately determine freight
Fully
understanding
the
Challenge 1: Freight rate adjustments
rates: Optimised for dry cargo, gas, tanker
The value of commodities in most markets is
Challenge 4: Determining how long to keep a vessel
and parcel operations, Chartering and
time by looking at an index such as NYMEX. On the other hand, in the shipping industry, the
Unlike the previous challenges, this one is a
and accurately with just a few mouse clicks.
freight rates that play a large part in determining
result of having inaccurate MTM valuations.
“Non-standard” individual routes can be saved
a fleet’s MTM valuation are not so crystal clear.
Time charter contracts specify the minimum
in the system and used to drive valuations
The indices for freight rates, which are
and maximum time a charterer will use a vessel.
based on any combination of cargoes,
provided on the Baltic Exchange, only take into
The accurate market value of a vessel must be
vessels, load, and discharge operations on a
account certain “standard” vessel sizes and a
known in order to determine whether it should
limited number of “standard” routes. In reality,
be kept for the minimum contracted time, or
very few vessels are of a standard size or
longer. If the data driving the valuation is faulty,
voyages:
perform standard voyages. This presents a
then the resulting decision is likely to be faulty
handles consecutive voyages and voyage/
challenge for operators and charterers, who, in
as well, and a charterer may end up hanging on
time charter combinations with ease. A
order to determine accurate freight rates, have
to a vessel that is losing money.
unique “next open voyage” feature uses
48
theBaltic Spring 2012 www.thebaltic.com
transparent – easily determined at any point in
VesselOps can calculate freight rates quickly
voyage and/or time charter relet basis. • Easily
value
multiple
Chartering
consecutive
and
VesselOps
Corporate viewpoint Triple Point Technology portfolios in real-time as daily prices and forward curves are published. The solution automatically recalculates the forward book value and provides an expected P/L based on forward expectations. Advanced technology automatically analyses the potential profit or loss before an agreement is made to transport cargo.
Protecting the bottom line Accurate MTM valuations are critical to protecting profits and remaining competitive in the maritime industry. However, many companies are unwittingly jeopardising their bottom lines and incurring significant enterprise risk by using inaccurate information to determine their fleets’ value and make important business decisions. Companies that don’t know their fleets’ true value operate in dangerous waters, risking lost profits that could ultimately cause their entire business to go into an irreversible decline. In order to minimise risks, maximise profits and remain competitive, commercial owners, charterers and operators must embrace technology solutions that ensure accurate MTM valuations and provide complete transparency across enterprise operations. Used daily by over 2,500 shipping industry personnel worldwide to control fleets of five to over 250 vessels in the tanker, gas and dry markets, Softmar Chartering and VesselOps from Triple Point Technology is the shipping industry’s leading solution for controlling costs and risk. operations
With Chartering and VesselOps, charterers
the MTM value of a voyage based on best
management: Chartering and VesselOps
and operators have fast and easy access to
available information.
effectively manages all post-fixture activities
accurate information for better decision-making,
• Quickly determine how long to keep
of a commercial operation and enables
increased operator productivity, and ultimately a
a vessel: Automatically and accurately
operators to keep track of day-to-day
bigger bottom line.
calculate whether you are in- or out-of-the-
operations:
money, or apply physical option intrinsic
discharging, bunkering and disbursement
valuation calculations with the click of a
accounting. Schedules can be maintained
button in order to determine whether to keep
manually or retrieved directly from the
a vessel or turn it in for another one. Intrinsic
vessel reporting system. A P/L summary
valuation calculations are performed by the
is automatically maintained, showing the
system as if they are call options, since there
variance between actual and estimated
is the right, but not the obligation, to extend
charges. A detailed breakdown of individual
the time charter duration for a certain price.
charges can be viewed with one click.
In addition, Chartering and VesselOps
Voyage results are updated in real-time as
sophisticated and unique logic to adjust
provides a wide range of other features and
• Extensive
vessel
arrival,
departure,
loading,
new information is entered.
functions designed to provide fast access to
• Complete freight risk management:
actionable information that manages supply
Analyse position including vessels, Freight
chain margins and enterprise risk, including:
Forward
• Comprehensive chartering management:
Affreightment, cargo bookings, cargo relets
Manages all pre-fixture activities of a
and options. See where you stand with
commercial operation, including voyage
a consolidated view of total physical and
estimating, cargo management and vessel
paper freight risk exposure, MTM analysis,
management. Chartering and VesselOps
and long/short position. Calculate option
allows an unlimited number of ports and
premiums specifically aimed at the shipping
Tel: +1 203 291 7979
cargoes per voyage and displays all key
industry and perform MTM based on the
E-mail: info@tpt.com
information on a single screen.
next open voyage. Traders can monitor
www.tpt.com
Agreements,
Contracts
of
theBaltic Spring 2012 www.thebaltic.com
49
WE UNDERSTAND BALLAST WATER TREATMENT
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www.thebaltic.com bbc chartering BIO Friendly breakbulk events CANFORNAV CLASS NK cam conference coli shipping copenhagen business school E. a. gibson fednav galleon insurance HADCON LIMITED HYDE MARINE INC ibc asia
Environment
Time pressure for owners as new green legislation looms As deadlines approach owners and operators have to decide which route to take, low-sulphur fuel, which could be limited in supply, or to install costly new technology
H
amworthy Krystallon, who signed
annum, an annual saving of over $800,000 is
a contract in January with Hyundai
possible, based on a fuel premium of $40 per tonne
Heavy Industries for a full scrubber
against low-sulphur fuel oil,” Mr Jenssen says.
system on a VLGC under construction
“From 2015, when ECAs in Europe and
for Solvang, delivered the first ever commercial
North America will require a sulphur limit of
scrubbing system to Ignazio Messina & Co. It is
0.1% the premium will be $330 per tonne, the
the first of four to be fitted on the Italian shipping
savings climb to $6.6 per annum. In other words
company’s ro-ros.
ferry operators fitting exhaust gas scrubbers in December 2012 will have recovered their whole
According to Sigurd Jenssen, managing
investment by 1 July 2015.
director of Hamworthy Krystallon: “There is real concern over the 2015 ECA regulations, and we
“For vessels with less engine power, such
are starting to see more owners and operators
as tankers, bulkers or container feeders, the
actively consider what solution they will employ
savings are lower, but so are the installation
to remain compliant, but time is running out.
costs. A tanker burning 10,000 tonnes of fuel
Shipowners and operators are increasingly
inside the ECA will have seen its investment paid
aware of the impending supply chain issue
back by 1 October 2015.” Wärtsilä completed its
facing the market, but many fail to consider
acquisition of Hamworthy at the end of January
that once a scrubber system is installed, it is
and it claims that the combined companies’
important to develop operational experience
strengths will improve the savings it can make
prior to using it on a daily basis.”
for its customers. operators
The growing emphasis on port-led corporate
operating in ECAs will have a simple choice –
social responsibility has prompted carbon
either pay the $300 to $400 price differential for
management consultancy Carbon Positive
costly distillate fuel or install a scrubber, which
to launch the first emissions management
typically has a payback of less than two years.”
programme specifically to help ports to adopt
There have been negative opinions voiced
a single, long-term strategy to manage their
about scrubbing technology and according to Mr
energy and natural resource requirements. This
“By
2015,
shipowners
and
Jenssen “it is perhaps a lack of detail that has
Helena Athoussaki
will enable them to reduce their carbon footprint and ultimately contribute to carbon emissions
caused consternation in the industry and created a misleading perception of scrubbers, and distorted
3.5% sulphur HFO 380cSt fuel, “more than 97%
reduction targets for the shipping industry as
the reality that they are the most cost-effective and
of SOx and 85% of particulates are removed.”
a whole.
So what are the benefits of using scrubbing
Environmental CSR is becoming increasingly
“There is no question of operational viability
technology? “For a ferry operating wholly within
significant for ports and stakeholders, including
of the technology in terms of reducing sulphur
an ECA where the compliance limit is currently
terminal operators, refineries and logistics
and particulate matter emissions.” By using a
1.0%, and burning just over 20,000 tonnes per
partners, as financial institutions consider this
theBaltic Spring 2012 www.thebaltic.com
51
efficient way to reduce sulphur emissions.”
3 Annual Asia rd
Held In Conjunction With:
greenshipping conference
23 – 26 April 2012 • Raffles Convention Centre, Singapore
REPLY FORM
Produced by
International Marketing Partner
Tabletop Sponsors
Official Media Partners
Lanyard Sponsor
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Supporting Media Partners
Supporting Organisations
Environment an essential element of assessing maritime
carbon emissions will have a competitive
variety of ship sizes and types. Applications for
investments. In response, the climate change
advantage as further regulations come into force
the system include bulk carriers, oil tankers,
challenge is driving ports to explore sustainable
and fuel prices continue to fluctuate.
survey ships, passenger ferries and even
business development opportunities and take a
“Working with an expert to handle a
unmanned surface vessels,” the company says.
proactive approach towards energy efficiency
comprehensive
programme
In addition to the Aquarius MRE System,
and innovatively greening the supply chain.
including live, on-board energy audits is an
a future Aquarius Eco Ship would also be
measurement
Commenting on changes taking place in the
investment in the competitive advantage of your
fitted with other fuel-saving measures such as
shipping industry as a whole Helena Athoussaki,
fleet and one that more shipowners are taking
an advanced electrical propulsion system, an
chief executive of Carbon Positive explains: “The
seriously at a time when ensuring compliance
optimised hull design and waste heat recovery
ongoing discussions of both global and regional
with new environmental regulations and keeping
technologies.
regulatory developments is a contributing factor
a competitive edge are vital for success,”
to an industry-wide lack of understanding of
she adds.
The company claims that the combination of technologies could lead to fuel savings of 40% or more and also dramatically reduce the emission
emissions management, but this serves to
Eco Marine Power Co Ltd, based in
highlight the importance of getting ahead of
Fukuoka, Japan, which designs eco-friendly
of noxious gases
regulation. EEDI and SEEMP alone will not be
ship concepts that incorporate the latest green
“An Aquarius Eco Ship could include enough
the last carbon regulation shipping will face over
energy technology is currently working on a
solar panels for 1MWp solar system or larger
the next few years, with both UNFCCC and the
number of design projects including the solar-
and enough energy storage modules so that
European Union currently deliberating over market-
electric hybrid marine power (HMP) vessel Tonbo
the ship would not need to use auxiliary diesel
based measures. With this in mind, it is imperative
and eco-solar ferry Medaka.
generators whilst in port. These energy storage
including SOx and NOx.
The company has recently unveiled a
modules could be charged via the solar panels
concept ship design incorporating its Aquarius
or by the ship’s main generators. Importantly the
“Taking a holistic approach to emissions
Marine Renewable Energy (MRE) System. This
Aquarius Eco Ship and Aquarius MRE System
management is critical to ensuring that
concept design is called the Aquarius Eco Ship,
have been designed to take into account the
shipowners can maximise these commercial
which is the result of a comprehensive study
reality of operating rigid sails on ocean-going
benefits of fuel and cost savings that can result
project that focused on optimising the design of
ships and include a range of specially developed
from running more efficient vessels.
a large ocean-going ship, such as a bulk carrier
safety features.”
that shipowners plan ahead and take action to measure and reduce their carbon emissions.
“This approach ranges from understanding that carbon has a price, the importance of
or oil tanker, to harness the power of the wind and sun by using the Aquarius MRE System.
Eco Marine Power is now seeking to work with a shipyard or shipping company in order to
measuring your carbon footprint and monitoring
The system incorporates a variety of elements
develop the Aquarius Eco Ship concept further,
this on an ongoing basis, right through to
including solar panels, energy storage modules,
and, it is hoped, lead to new design concepts.
achieving emissions reductions. Investing in
a computer control system and an advanced
The company will also begin test activities
efficient vessels is the first step in a long-term
rigid sail design.
related to the Aquarius MRE System this year
programme of managing carbon emissions, and
“This green shipping focused solution
and is seeking to co-operate with additional
shipowners that plan ahead for a three-phase
has been designed to be highly flexible and
development partners and strategic investors in
programme of measuring, reducing and offsetting
configurable so that it can be installed on a
order to produce a commercial version.
Aquarius ECO-SHIP
theBaltic Spring 2012 www.thebaltic.com
53
Corporate viewpoint Biofriendly
“As a Biofriendly customer we have been monitoring our fleet since October 2008. In that time, monitored ships have shown an average improvement of 2% to 3% in fuel economy. We have seen the cost of IFO 380 rise significantly recently making the return on investment from Green Plus attractive.” What is Green Plus? Green Plus® liquid fuel catalyst is an increasingly adopted technology that is garnering attention from marine companies worldwide. Biofriendly Corporation is an environmental company that created Green Plus to help fuel users improve air quality.
How does Green Plus work? Green Plus is a product that improves the performance of fuel. This is a critical concept that Biofriendly Corporation addressed in developing Green Plus. When you improve the performance of fuel, it behaves in an engine as if it were a much higher quality fuel. Arafura emissions testing
What is meant by higher quality fuel? In the United States and Europe, motor vehicle fuel is generally refined to very high specifications;
SOx
NOx
CO
PM
Fuel Sulphur %
Basline
9.42
18.48
0.43
0.50
2.3
Treated
9.43
14.43
0.40
0.44
3.2
thus we see much lower harmful emissions
Change
0.01
-4.05
-0.03
-0.06
0.90
in those areas. However, that super fuel is
% Change
0.1%
-21.9%
-7.0%
-12.0%
39.1%
considerably more expensive than standard fuels
Baseline and Treated data measured in grams per kilowatt hour
and it is hard to find in less developed countries. The highest quality consumer fuel in the world can be found in California, where residents pay
earlier in the combustion cycle. At the same time
Emission Diesel (TxLED) programme. Here Green
a premium of up to $0.50 per gallon over what
it smoothes out the combustion. More complete
Plus showed that it significantly improved lower
fuel costs in the rest of the country.
combustion results in a reduction of CO2, NOx,
quality Texas diesel to match the performance
SOx and the telltale smoke associated with poor
of California diesel, which is the highest quality
combustion.
consumer diesel in the world. The exhaustive
How does Green Plus make standard fuels perform like high quality fuels?
testing
was
supervised
by
independent
Rather than changing the available energy of
Can Green Plus prove that it does improve fuel?
inspectors and the results were reviewed
the fuel itself, as is done in the refining of higher
Absolutely – one example is that Green Plus is
Environmental Quality (TCEQ) after consultation
quality fuels, Green Plus changes the combustion
approved by the State Government of Texas
with the US Environmental Protection Agency.
characteristics to release more of the energy
for use in diesel fuel sold under its Texas Low
The result was that consumers in Texas now
and approved by the Texas Commission on
enjoy the same quality of diesel fuel that can be Results summary Baseline Ship Tromso
Treated with Green Plus
with other prod.
found in California for much less money. % Change
% Change
over other prod.
Total GP effect
6.75
7.00
3.70%
5.70%
Petropavlovsk
8.65
9.09
3.45%
5.45%
Vanguard
12.64
13.19
4.31%
6.31%
Confidence
54
theBaltic Spring 2012 www.thebaltic.com
How does a government approval for diesel emission reductions apply to heavy fuel oil? Green Plus has been used in marine applications across the globe and the results have matched what has been proven in diesel applications.
Corporate viewpoint Biofriendly
Why are customers choosing Green Plus? Green Plus will consistently lower greenhouse gas emissions with reductions in CO2, CO, NOx, SOx, as
mile to 1.04 litres per prop mile, a decrease
Emissions Testing Consultants (ETC) of Victoria,
in oil consumption of 0.13 litre per prop mile
Australia and Scientifics in the UK have been
or 11.1%.
Accredited
testing
companies
such
smoke and soot build-up. Green Plus is easy to implement as it is used at the rate of 1 litre treating 25 tons
on board ships using Green Plus to collect
“With the scavenge doors removed, I was
the data that confirms this. Furthermore, it
afforded an excellent close-up view, and was
Green Plus is easy to deliver. It can either
has been proven that using Green Plus in
able to confirm that the scavenge and under-
be added directly into the bunker tanks via
marine applications improves fuel economy and
piston spaces were in a comparatively clean
the sounding tubes or with a metering pump
reduces maintenance costs.
state with little combustion residue after almost
that treats the fuel as it’s transferred to the
400 running hours, certainly the best condition
day tank.
Are there examples of test results?
I have witnessed on this type of engine in normal service.
of fuel.
Green Plus has undergone extensive endurance
testing
to
show
it
reduces
“The same was true of the finned tubes of the
maintenance, oil use and overhaul intervals.
Emissions example
exhaust gas boiler on which very little deposition
Wartsila and Man B&W have both written
Test data on the containership, Arafura, was
was observed, especially compared with
“Letters of No Objection” stating that Green
gathered by ETC (see table, opposite). This data
previous inspections. Attached to this message
Plus does not harm their engines.
came from its report:
are photographs supporting the above findings.”
“Note
that
SOx
emissions
remained
See photographs below.
applications.
essentially the same yet the vessel was using fuel with sulphur 39.1% higher compared to
Green Plus has been used for billions of kilometres in on-road and on-ocean
Fuel economy
Efficiency improvements from using Green
the Baseline period without Green Plus. NOx
Green Plus has been tested for its effects on fuel
Plus tend to balance out the effects of hull
emissions were down substantially.”
economy in several shipping fleets. In those
fouling. This allows a significant increase in the
tests, Green Plus has shown a 2%-5%
intervals between dry docking.
Maintenance example
improvement. Some of the results that users
Green Plus is inexpensive to buy, offering
Man B&W conducted a 4,778-hour test on a
typically find with varying vessels can be seen in
users upwards of a 600% return on investment.
7S50MC Hitachi engine using Green Plus. Data
the results summary, opposite.
from its report says: “The piston No. 5 was overhauled in connection with end of test with the fuel additive Green Plus from the company Biofriendly. This piston was also overhauled at the start of the test and at that time as now the condition was good with low wear rates for all parts.” The following quote on Green Plus comes from a test report written by a technical superintendent: “Average exhaust cylinder temperature dropped 1.3% or 4.2 degrees Celsius from 332.3 to 328.1. Ratio of cylinder lubricating oil to prop miles fell from 1.17 litres per prop
theBaltic Spring 2012 www.thebaltic.com
55
Oxford Analytica
WTO role in dispute settlement looks resilient W
ith the WTO’s Doha Round
The
initial
elements
in
the
dispute
blocked, and possibly dead,
procedures – now as under the General
there is no immediate prospect
Agreement on Tariffs and Trade (GATT), the
of
WTO’s predecessor – are that:
multilateral
negotiations
to liberalise world trade or overhaul trading
• every member stands ready to discuss
rules. This means that WTO rules that govern
(“consult on”) any rule-related issue that
world trade will stand unchanged, while trade
another member may raise with it; and
itself evolves and new issues and problems
• if the parties cannot reach agreement, the
arise. In this context, WTO arrangements for
membership as a whole will help achieve a
handling disputes between its members will be
settlement, normally through establishment
increasingly crucial to keeping trade growing
of an independent “panel” of (normally three)
and restraining protectionism.
trade experts, to review the complaint and make findings and recommendations. In their simple GATT form, these elements
What next
could produce satisfactory outcomes. However,
While lack of prospects for progress in the
if major interests were at stake, or the panel’s
medium term in multilateral trade negotiations
judgement was challenged, the losing party
has damaged the international reputation of the
could ignore panel recommendations and veto
WTO as a venue for rulemaking, the importance
any follow-up action.
of the organisation’s dispute settlement system
This changed with the new WTO dispute
• Countries will increasingly look to the WTO as a venue for dispute settlement rather than rule-making. • The WTO dispute settlement system will be under increasing pressure to become more flexible.
Historically, the United States and the EU are the most active users of the WTO dispute settlement mechanism Key players These
binding
dispute
rules
are
widely
will not decline. Countries will continue to use it
rules, which:
considered the most effective feature of the
due to its efficiency in resolving most disputes
• added a standing professional Appellate
WTO. Nearly 430 disputes have been brought
within agreed norms. Furthermore, its existence
Body (AB) to review panel reports on request;
is key to preventing protectionist escalation in
• introduced time limits for each stage of the dispute process;
difficult economic times.
• removed the possibility of veto by the loser; and
Analysis
to the WTO since January 1995:
1. United States and EU Almost half (211) of these have involved the United States, either as initiator (98 cases) or
• authorised retaliatory trade measures by the
target (113) of complaints. The EU has initiated
The immediate purpose of the WTO dispute
injured party if offending measures are not
85 WTO complaints, and been the target of 70
settlement system is to adjudicate cases in
removed or compensated.
– several more cases have involved individual
governments
EU members. The prominence of the United
challenge other members’ trade practices that
States and EU reflects their importance in world
which
individual
member
they believe breach the trade rules and thereby
Impact
trade, as markets or suppliers. Both economies
damage their trading interests. Its broader aim
• Even if there is an unlikely agreement at the
have also each been the other’s most frequent
is to reassure all members that the rules will
Doha Round, this will change little in the
remain effective.
WTO’s dispute settlement system.
56
theBaltic Spring 2012 www.thebaltic.com
opponent.
Oxford Analytica 2. Other important players Canada, involved in 50 disputes, most often as complainant, is in third place, followed by Brazil and India (both 39) and, in descending order, Mexico, Argentina, China, Japan and South Korea.
3. Record since 2008 In the 50 disputes launched since mid-2008 (the beginning of both the Doha Round stalemate and the global economic crisis), the United States and EU have remained major players, involved in 23 and 15 cases respectively, though facing each other in only two. China (a member only since 2001), has been involved in 20 of the 50 cases, in 13 instances as defendant.
40% of disputes since mid-2008 have involved China either as a defendant or initiator
A container ship enters Europe’s largest port, Rotterdam
• Another 39 disputes concerned such traditional GATT issues as tariffs, national treatment, border restrictions, customs valuation and taxes and charges
4. Developing countries
• may discourage future efforts to negotiate multilateral solutions to trade problems. While
these
criticisms
point
to
real
difficulties, overall trade issues raised in
• ‘New subjects’ – services, intellectual
disputes demonstrate that the system can
property and environmental measures –
help restrain protectionist pressures, even
prompted just eleven disputes.
when multilateral negotiations are blocked
Few disputes have been between developing
(see
countries, and those have been mostly among
protectionism set to rise - September 21,
INTERNATIONAL:
WTO-compliant
neighbours. Of the 100 complaints since
Success or failure?
2011). Furthermore, delays are generally
March 2005, only 19 have not involved the
The WTO dispute settlement system has critics.
shorter than in international commercial
EU, the United States, other developed WTO
Some complain of the long time it takes to
litigation (see INTERNATIONAL: Changes
members, or China. Of these, 13 were between
move from an initial complaint to an AB ruling
increase ICC court appeal - November 11,
Latin American countries, 2 between Asian
and final compliance by a government found
2011). The system has other advantages
countries, 3 between CIS countries, and just
at fault. Others go further, suggesting that
for countries:
one (between South Africa and Indonesia)
the system:
• As under the GATT system, many disputes
between regions.
• is too rigid (see INTERNATIONAL: WTO disputes to become more flexible - June
5. Trade flows and rules uses The trade flows covered by these disputes vary widely, though most concern goods (often agricultural products) rather than services or intellectual property. The trade rules principally
17, 2010). • substitutes legalism for diplomatic efforts to seek practical compromises; • cannot handle disputes in which losers refuse to comply with rulings; and
are resolved through consultation, or through acceptance of panel reports or AB rulings. • Since legal argument is given priority over economic clout, the WTO system can achieve results impossible under the old GATT rules – examples are the EU banana case (see INTERNATIONAL: Banana deal
involved are far fewer:
creates winners and losers - December 31,
• Of the 100 recent disputes, 44 have
2009) and the US administration’s recent
concerned dumping, subsidies or safeguard
decision to abandon the ‘zeroing’ principle that inflates estimates of dumping.
actions, the same measures most cited
• Even the most complex and commercially
in inventories of current protectionist
significant cases make progress – for
pressures.
example, an arbitrator’s ruling next month
Disputes that reveal weakness in trade rules could lead to future multilateral negotiations
© Oxford Analytica 2012. All rights
in the Airbus subsidy case will decide the
reserved. No duplication or transmission
level of retaliatory measures that the United
of this document is permitted without the written consent of Oxford Analytica.
States may take against the EU. • Individual
disputes
often
highlight
Contact us: www.oxan.com/about/
weaknesses in trade rules, providing the
contacts/ or call +44 1865 261 600 or
basis for later multilateral negotiations.
in North America 1-800 952 7666
theBaltic Spring 2012 www.thebaltic.com
57
Maritime Protection
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Maritime security
Armed approach Maritime security may be a relatively new topic on the agenda, but it is generating plenty of headlines
M
aritime security continues to top
demonstrably operating within existing legal and
integrity and probity – basic stuff when running a
the agenda with concerns over
regulatory frameworks. Indeed, so far, few
company which most of these security providers
Somali piracy growing. However
companies seem to have even a rudimentary
don’t seem to understand. It is almost as if for
the use of armed guards on
understanding of the insurance and contractual
them it is enough to be able to shoot guns over
ships have been highlighted by the recent
issues that P&I Clubs, for example, have been
the side of ships at potential hostiles.”
shooting off the coast of India. A number of
highlighting. There are companies providing armed
Such outfits are “writing cheques for the
international and company initiatives to combat
maritime security services safely, lawfully and
shipowner that can’t be cashed” he believes.
the problem have been put forward; meanwhile,
professionally, but at present they are a notable
Security companies are not reading the guidance
the underlying political situation in Somalia
minority. This should be a concern to shipowners.”
that is out there, he maintains. While criminal and
shows no sign of being resolved any time soon.
Mr Wilkes says the company’s clients back
civil liability issues are important, if just the basic
Issues like the payment of ransoms and the
its dissatisfaction with the quality of security
standards of safety are adhered to that will start
abilities – or lack of them – of security firms being
personnel which are based on the body of
to mitigate the risk of an accidental discharge
employed to provide armed guards to ships
evidence provided by the vetting of a substantial
of weapons, he says. “If you don’t address the
continue to be of concern, not least as far as
number of them. “If it was just a question of
basics you will never get to grips with them. If
qualifications are concerned.
some grey areas in weapons’ licencing and
we work it up from first principles we shut out
According to Gray Page, which provides
accountability, I think we would be sharing the
90% of the risk. Someone once told me ‘never
specialist maritime intelligence, investigation
same view as many. Actually we are talking
let the perfect get in the way of the very good’.”
and crisis management services, regulations
about more rudimentary issues like corporate
The International Group of P&I Clubs, he
and guidelines are already there to assess the
structure, insurance provisions, contractual
says, must be very clear about the level of
suitability of armed maritime security providers (AMSPs) for use on ships transiting the piracy danger zones. The company has put together an Armed Maritime Security Provider Vetting Programme which incorporates not only UK and EU legislation on the issue of ownership, licensing and control of firearms and ammunition, but also those regulations laid down in IMO conventions, as well as flag state and insurers own rules. According to James Wilkes, managing director of Gray Page, “It is a misconception that there are currently no standards against which the legitimacy and competency of AMSPs operations can be measured. There is a plethora of criterion that can reasonably be applied in vetting the activities of an AMSP. We support the call for maritime-specific regulation, but on-going industry deliberations in that respect do not obviate the regulations and laws that already exist with which AMSPs should comply. “Our vetting programme is exposing the fact that a significant majority of AMSPs are not
Captured pirates © IMO
theBaltic Spring 2012 www.thebaltic.com
59
Maritime security insurance it expects security firms to carry. The IMO also needs to remind firms of their responsibilities which are not just a question of drawing up a “snazzy brochure” but should provide client references. “That is in the IMO guidelines, but we need to keep driving this home. It is like security for your house, you can have all sorts of fancy equipment like lasers, but the first thing you do is lock your doors and windows. That is the ethos Gray Page has.” John Thompson, a director at Ambrey Risk, comments: “As the number of companies in the armed maritime security market continues to grow, it is inevitable that there will be significant variances in the integrity of the services being offered. “At Ambrey we are keenly aware of our legal and regulatory obligations in providing armed guards and pride ourselves on raising standards in the maritime security industry. We have taken the time to deeply understand the environment in which we operate and we have a duty to our clients to do so. By virtue of helping shipowners
Mike Salthouse
with their background due diligence on prospective armed maritime security companies,
“Similarly, using double layers of standard
Claus Hyldager, group chief executive,
Gray Page’s Armed Maritime Security Provider
mesh fencing to counter the threat of an RPG
ISS, concluded: “Piracy is one of the greatest
Vetting Programme is actually setting high
attack will actually increase the chance of a lethal
challenges the industry faces. While the
benchmark standards in our rapidly expanding
detonation.
legislative debate continues on how to best
“Products provided include a light armour
tackle the issue in relation to armed guards, it
system again shaped ordnance, which involves a
is vital that shipowners have access to the best
Mike Salthouse, director of the North of
high tensile steel mesh that short circuits an RPG
equipment and onboard vessel and crew armour
England P&I Association, which is a prominent
projectile rendering its explosive shape charge
that provides appropriate protection, right now.
supporter of Gray Page’s says: “Gray Page vets
inert. Ramor 500 is a specially designed light
Our VPS operation and our expertise in this area
armed maritime security providers on behalf of
weight armoured steel that offers comprehensive
is testament to our commitment to helping our
North and its members, and the results to date
protection to the bridge and vessel’s access
customers meet these challenges that serve to
demonstrate that a number of companies are
points. The armour is able to withstand multiple
impact the efficiency of their operations and the
not meeting the generally accepted standards
hits from high velocity rifle rounds including
wellbeing of their crews.”
required of an armed maritime security provider.
AK47, making it ideal for citadel construction.
Meanwhile the SaveOurSeafarers Campaign
“While it is a concern that standards in the
The system does not require class recertification
has been targeting business leaders in an
as it is lightweight and easily removable.”
attempt to get them to increase pressure on
industry. Ambrey welcome the Programme and the transparency it brings to the market.”
armed maritime security sector are not what they should be, our members can be assured that the
Other products include the composite
governments to take action against Somali
vetting programme will help them identify those
ArmourA range of ultimate lightweight armour
piracy. The campaign estimates that this is
companies that operate professionally, safely
protection that has been designed specifically
costing the world economy about $12bn a year.
and, crucially, within the law.”
for the maritime industry. Products include
Inchcape Shipping Services and Vessel
fully certified Lloyd’s approved ballistic doors,
SOS SaveOurSeafarers Campaign chairman Giles Heimann says:
have
weapon cabinets and removable ballistic panels.
“These criminal gangs are holding the world
announced the launch of a new anti-piracy
Graham Fee, project manager, Inchcape
economy to ransom. Hundreds of seafarers
partnership which they claim “will provide
Shipping Services commented: “While Best
have been held hostage and the physical and
the ultimate protection for vessels and
Management Practices provide useful guidelines
mental ill-treatment they are forced to suffer
their crews while operating in known piracy
and recommendations to combat pirate attacks,
makes horrifying reading. Sixty-five seafarers
regions” including providing customers with
when it comes to ballistic protection, shipowners
have died as a direct result of Somali piracy
“highly effective fully certified systems that are
need real counsel on the kind of solutions to
in the past five years, through torture, murder,
designed to combat RPG (Rocket Propelled
adopt. Budgets are tight given the current
suicide, malnutrition and disease. The potential
Grenade) and small arms fire.”
economic climate, however there’s no point in
economic impact of the crisis is hugely
“Time and again we see bulletproof vests
just going for the cheapest material that may
disturbing given the knife edge on which the
issued to crews without hard armour plates,
tick a compliance box but doesn’t work during
global economy is currently perched.
and vessels using 8mm mild steel to protect
an attack and invalidates insurance; ultimately
the bridge, internal doors and citadels, which
costing more in the long-term. Our focus is
conducts trade though the Suez Canal and
will do nothing against a round from an AK47,”
to provide solutions that save lives, are cost
across the Indian Ocean to the Indian sub-
said Edward Unwin, sales director for Vessel
efficient and are proven by both military and civil
continent and Asia and Australasia is at
Protection Solutions.
agencies.”
risk. That’s about one-fifth of global trade.
60
theBaltic Spring 2012 www.thebaltic.com
Protection
Solutions,
meanwhile,
“Any
business
or
organisation
that
Maritime security The payment of ransoms has been one of the issues that has been raised in the UK following the publication of a government report which dealt with the impact of piracy. “Piracy off the coast of Somalia has escalated over the last four years and is a major concern for the UK. The threat is not primarily to UK ships as very few have been captured. Rather, the threat is to the UK’s economy and security. Piracy affects the UK’s banking, insurance and shipping industries, and threatens the large volume of goods which are transported to the UK by sea. In light of these concerns, and as a state whose strengths and vulnerabilities are distinctly maritime, the UK should play a leading role in the international response to piracy,” the report said. It concluded that “the Government should engage with the shipping industry to explore options for the industry to pay for vessel protection detachments of British naval or military personnel on board commercial shipping” and welcomes the Prime Minister’s recent announcement that the Government’s position would be reversed and that private armed guards will be permitted on UK-flagged vessels. “We agree that the evidence in support of using private armed security guards is compelling and, within legal limits and according to guidance, shipowners should be allowed to protect their ships and crew by employing private armed security guards if they wish to do so.”
Koji Sekimizu © IMO
Other recommendations in the report include We feel that businesses which rely on these
them of the threat to their businesses posed
the risk that private armed security guards and
routes remaining safe will be keen to offer
by severe restrictions to one fifth of the world’s
ships’ masters might face extradition to another
their support. They rely on the movement of
major sea trade routes.
state following an armed incident “particularly
manufactured goods, raw materials, food and fuel to operate. “We need help from the world’s business
“We hope that in turn, they will bring pressure
where that state may not be able to assure a fair
upon their respective governments to eliminate
trial. The Government should set out the steps it
the piracy threat.”
intends to take to minimise this risk.”
leaders who have the foresight to understand
IMO secretary-general Koji Sekimizu met the
Other conclusions included “guidance on
the future impact of this progressively escalating
UN secretary-general Ban Ki-moon in January to
the use of force, particularly lethal force, is
problem. In business parlance, the pirate gangs
discuss the piracy issue.
very limited and there is little to help a master
have discovered the meaning of scalability – their
Mr Ban agreed with the view of Mr
make a judgement on where force can be used
criminal ‘business model’ now extends across
Sekimizu that capacity-building in Somalia and
and the fact that the government “must provide
an area of ocean twice the size of Europe.
neighbouring countries should be enhanced
clearer direction on what is permissible and what
“If this situation continues, there is a real risk
through cooperation between the IMO and UN,
is not. It is vital to ensure that armed guards
that the Gulf of Aden, the Arabian Sea and the
UN specialised agencies and other relevant
are properly trained and deployed in sufficient
entire Indian Ocean could become restricted
international organisations.
numbers.”
zones for shipping; that seafarers could simply
This initiative will build on IMO’s existing
Banning the payment of ransoms to pirates
refuse to sail into war-like attacks, captivity
capacity-building activities under the Djibouti
has also been a topic much in the press in
and the nightmare of suffering that follows; or
Code of Conduct, funded by the Djibouti Code
recent times. While the practice may have been
that shipowners will not put ships and crews
Trust Fund.
criticised, and is frowned upon by governments,
at risk. Using alternative routes will play havoc
Mr Sekimizu further informed Mr Ban about
so far no other solution to the problem has been
with costs and there is no alternative to sailing
plans to organise a counter-piracy capacity-
put forward. Banning the payment of ransoms,
through the area for over 40% of all seaborne oil
building conference on 15 May at IMO’s London
as law firm Holman Fenwick Willan pointed
which originates from the Arabian Gulf region.”
headquarters, as well as a high-level policy
out, would put shipowners in the position of
“Part of the role of business leaders is to
debate on arms onboard to take place on the
being unable to extricate crews from a hostage
seek opportunities and identify threats, “says Mr
first day of the 90th session of the Maritime
situation. As the time crews spend in captivity
Heimann. “Shipping industry representatives are
Safety Committee on 16 May. Mr Sekimizu
has lengthened, this is a serious consideration
in a position to make direct contact with world
encouraged high-level participation to these
as an onshore solution to Somalia’s problems
business leaders. We see it as our duty to warn
events from the UN.
seems likely to take many years.
theBaltic Spring 2012 www.thebaltic.com
61
Corporate viewpoint
HADCON
MARITIME INCIDENTS There have been two significant incidents that were covered by the media and the results al‐ though very different will influence the maritime industry. The tragic events of Costa Concordia illustrated that an incident can happen anywhere and at any time. An investigation is ongoing that will scruti‐ nize the companies, the actions of the crew, the lay out of the vessel and the processes. If failings and weaknesses are identified and depending on the severity of the outcome and how it is pre‐ sented by the media the results could have a devastating impact on the image and the reputa‐ tion of the companies. Those clients that have vessels operating in a High Risk Area (HRA) the likelihood of an incident is increased. In our experience of operating in any HRA, it is paramount that stakeholders have an effective and developing risk management system, sound security and safety policies and a rehearsed emergency incident management plan for potential emergency situations. The second incident was the audacious mission executed by the American Navy SEALs to rescue two foreign aid workers kidnapped in Somalia. At the time of the raid there were a total of eight vessels and one yacht under pirate control with more than one hundred seventy crew, a UK tour‐ ist and two Spanish medics being held for ran‐ som. Although the raid is viewed as a success by the political powers in Washington, the raid raises a number of issues. Will the behaviour and the attitude of the pirates change towards the crew? Is the safety of the crew at risk? Will the pirates orchestrate wider separation between the groups of crew? Could the ransom demands increase? Will the pirates increase their opera‐ tions at sea and attack ships in increasing num‐ bers? Or, could the effects of the attack initiate the pirates to be cautious and wary? Could other Governments consider similar rescue attempts in Somalia? Hadcon analyses all maritime incidents and we assess all eventualities assisting our clients. HADCON Is a leading international maritime risk consul‐ tancy. Our distinctive methodology, work ethics
Managing Maritime Risk & delivering bespoke security solutions and our portfolio of services have been de‐ signed to meet the changing operational chal‐ lenges and support clients in recognising and managing the risks to succeed when operating in intimidating theatres and adverse condi‐ tions.
OUR SERVICES The services are bespoke to help clients at each stage of the project focusing on the de‐ sign, management of the build, company op‐ erations and re‐evaluation. OUR PEOPLE Hadcon is supported by a dedicated profes‐ sional management team that is highly experi‐ enced with professionals and specialists from the United Kingdom Special Forces, military and the maritime industry. We have high val‐ ues and the team exhibits the essential skills that are necessary in delivering a quality ser‐ vice that exudes confidence and builds long lasting relationships with our clients. ACCREDITATION Hadcon holds professional certification and accreditation with the Department for Trans‐ port (DfT) and the Maritime and Coastguard Agency (MCA). We have represented the International Mari‐ time Organisation (IMO) on mission risk analy‐ sis of the major ports of contracting Govern‐ ments and delivered the train the trainer courses. We are a member of the Security Association for the Maritime Industry (SAMI) with repre‐ sentation on the board of Governance and also a signatory company with the International Code of Conduct (ICoC). We have ISO 9001‐2008 certification and our management team operates under the quality management system ensuring the control of our processes.
RISK MANAGEMENT We have the experience and expertise in mari‐ time operations to assist clients identify, evalu‐ ate, prioritise and mitigate the operational risks to a level that is acceptable to all stakeholders. In the event of an incident; our emergency response and incident management strategies effectively manages the initial impact and the potential escalation of the risks. We can assist clients with: • Creating and establishing operations in new theatres. • Production of a risk management plan and anticipating risks of the future. • Production of security policies, procure‐ ment and an incident management strat‐ egy. • Production of a training regime that sup‐ ports personnel in the effective manage‐
PROJECT CONSULTANCY To meet the challenges within the maritime industry physical assets are becoming sophisti‐ cated and have the integrated technical sys‐ tems that are increasingly intricate and auto‐ mated. Our management team has the knowl‐ edge and proficiency to review the projects design and technical specifications package and create projected security solutions that are tailored to the requirements of the client and incorporated into the build programme. We can assist clients with: • Review of the design, major systems and the technical specifications package. • Production of a security integration policy for the design and build stage of the project ensuring approval from the international and national agencies. • Propose a procurement plan that meets the technical specifications and coordination of maintenance and spares package. • Coordination of demonstrations, trials and commissioning package. • Production of a security training package for the effective operation of the integrated technical systems.
HADCON
Corporate viewpoint
VESSEL ESCORT SERVICE (VES) Hadcon’s unparalleled know‐how and experience has developed and tailored the VES for all types of vessels including specialised heavy lift and towing operations transiting through the high risk sea areas and providing support to compa‐ nies that have projects operating in areas of high risk.
Our VES layered security program mitigates the risks that stands the ultimate chance of success. Our PCASPs have passed our selection criteria that meets the standards of the IMO MSC circu‐ lars. We have robust Standard Operating Proce‐ dures (SOPs) and Rules of Force (ROFs) that fo‐ cuses on continuous assessment and using force that is appropriate to the situation. We can as‐ sist clients with: • A thorough risk assessment. • The provision of armed or unarmed security teams with specialist weapon systems and security equipment. • On‐scene survey of the vessel including the vessel’s existing defences; the operational systems aboard and recommend a treatment plan utilising BMP4 as guidance. • Passage planning and coordination with MSCHOA and UKMTO and National convoys. • Intelligence reports and piracy updates. • 24/7 monitoring and operational support. • Delivery of an anti‐piracy training package and practical drills. SECURITY PLANS & AUDITS The physical assets within the maritime industry can be multifaceted with many agencies working
to a standardised framework within the secu‐ rity management system. Hadcon’s methodology is proven with all ves‐ sel and port facility security plans being ap‐ proved and verified by the Designated Authori‐ ties and Flag States. We can assist clients with: • Production of security and incident man‐ agement plans and management of inte‐ grated technical security systems. • Arrange and coordinate table‐top and an‐ nual exercises combining all agencies. • Coordinate management inspections and annual audits. TRAINING Prevention of a safety / security incident is paramount and it is the responsibility of the companies that a robust training regime is in place ensuring personnel have the relevant competencies to carry out their duties and responsibilities effectively and efficiently. Hadcon’s training delivery demonstrates the highest quality instruction utilising a variety of training techniques. The training courses en‐ sure the delegates meet the commercial and operational standards of the Maritime Indus‐
try. Training Courses include: Company Security Officer (CSO) Course. Ship Security Officer (SSO) Course. Incident Management Course. Recognition and Search Course. Anti‐Piracy Induction Course. Team Leaders Initiative Course MNTB Elementary First Aid Course. Technical Systems Training Course.
• • • • • • • •
PROCUREMENT Hadcon is able to evaluate the design and tech‐ nical specifications of the project and recom‐
mend appropriate equipment solutions. We will manage the warranties and tailor a comprehen‐ sive maintenance, spares and training package to the client and the manufacturer statutory requirements. We can assist clients with: • Integrated technical security systems. • Hardening & Protective equipment. • Communications and tracking systems. • Specialist lighting systems. • New or chartered vessels for specialist pro‐ jects. • Navigation, radar and small target detection systems. DRUG / ALCOHOL SCREENING As part of the quality management control and duty of care policies; companies are incorporat‐ ing random drug & alcohol screening pro‐ grammes ensuring personnel have no health or personal issues. We deliver a drug & alcohol screening pro‐ gramme including a male / female team that adheres to the human rights of personnel and medical ethics preventing cross contamination prior to, during and post the screening proce‐ dure. When required specific samples are taken and sent to an independent laboratory for fur‐ ther analysis. We can assist clients with: • Designing a drug and alcohol screening policy. • Conduct crew/staff random drug and alco‐ hol screening tests.
Hadcon Limited Arena Business Centre, Holyrood Close, Poole, Dorset, BH17 7FJ, UK www.hadcon.com
Corporate viewpoint MAST
Keeping safe with MAST M
offices in Malta, UK, Djibouti, Sri Lanka, Oman,
Piracy concerns and commercial maritime security capability
South Africa, Hong Kong and China.
“..Maritime piracy is costing the international
AST is a leading maritime security company with a strong international presence and
The company is a global supplier of specialist
economy between $7- $12 billion per year “
maritime security services, operating in difficult
One Earth Future Foundation, Working Paper,
and dangerous environments.
December 2010
Its underlying ethos is to deliver an exemplary security service to its clients while respecting
The concerns over Piracy continue and
the environment, local and international law and
it remains an intractable problem for the
Mauritius, Kenya, Tanzania and South Africa
human rights.
shipping community.
thus ensuring support throughout the region.
It is also clear that the problem is not only
MAST also has a track record of extricat-
key stakeholders in the following ways:
spreading further across the Indian Ocean and
ing ships and crews from arbitrary detentions
l Customers: to deliver a consistently reliable
as far south as the Madagascar channel, but
and deadlocked situations in many of the most
appropriate and effective security service.
also that the pirates’ tactics are changing, with
challenging places around the world. The com-
l Employees: to provide rewarding and chal-
pirated vessels now being used in an attempt to
pany has a dedicated response capability with
lenging work and development opportunities.
capture more ships.
on-scene advice and negotiation, dealing with
The company aims to fulfil the needs of its
l Partners: to develop trustworthy and valuable
relationships with key partners in support of MAST’s global services.
Comprehensive security support
All these facts provide a unique challenge for the shipping community.
Ship hijacks and arbitrary detentions present
at sea and the changing political environment,
a unique challenge to marine underwriters and
more ship owners and charterers are being directed to provide for their own security. Private security companies provide part of
security service for its clients within the maritime
the answer to the problem, when used in con-
community.
junction with the support offered by the inter-
• Yacht security • Design and installation of security systems • Commercial shipping security
national community and the various naval task forces operating in the region. For over six years, MAST has been delivering a responsive, cost-effective security service. MAST is currently in support of in excess of
• Explosives Ordnance Survey and Disposal
70 shipping clients, ranging from specialist tug
• Intelligence support
and tow, dredging and towed array operations
• Training
to tanker and bulk carrier operations.
• Hijack/Kidnap and Ransom (K&R)Response Service • lnsurance / research and support
It provides on-board protection teams, which embark ships or yachts in areas of high risk. The teams are comprised of British ex-Royal Marines or of equivalent experience. Once onboard, they use their training and skills to train the crew and increase the defences of the ship. Depending on the threat, insurer approval, peculiarities of jurisdiction and flag state, armed protection is provided during a passage. The company has permission to operate with firearms from Djibouti, Oman, Sri Lanka,
64
with the vessels recovery and crew repatriation.
In response to the increasing threat to assets
MAST provides a comprehensive, integrated
Its key services areas include:
ransom delivery arrangements to assistance
theBaltic Spring 2012 www.thebaltic.com
Corporate viewpoint MAST shipowners as no two hijacks are quite the same. There is always a complex web of different local and commercial interests at play. MAST‘s negotiation department is led by a former P&I Club director and Somali specialist, who have conducted 11 negotiations on behalf of shipowners.
Explosives ordnance disposal in the marine environment MAST also provides unique explosives ordnance survey and disposal service in support of pipeline, dredging and port development work and has specialist teams capable of deploying around the world. There remains a latent threat of unexploded mines and ordnance in numerous areas of the world’s coastal and deep sea oceans. In certain parts of the world during any exploratory sea bed operation, pipeline construction or port development, there is often a need to ensure that the area is free from explosives before com-
force in these unique circumstances is an exten-
mencement of work.
sion of that principle. With careful research and clear operating procedures including Rules of
The solution
Engagement based on a proportionate and rea-
A systematic survey and clearance operation
sonable response to the threat, it is arguable that
is essential prior to the commencement of full
the carriage of firearms represents a pragmatic
operations in areas where contamination is likely.
decision that can sometimes be justified.
Detailed feasibility studies outlining the size
MAST is also a signatory to the International
and scope of the operation will be conducted to
Code of Conduct for Private Security Service
acquire ordnance data on land or underwater.
Providers signed on the 9th November 2010 in
MAST EOD has the necessary combina-
Geneva. This vital step will give confidence to
tion of experience and expertise in the use
the shipping community when deciding on the
of underwater survey equipment to ascertain,
selection of a security partner.
plan, recover and dispose of historic ordnance if revealed during the survey phase.
Providers (the “Code”) endorse the principles
The Signatory Companies to this International
of the Montreux Document and the aforemen-
Code of Conduct for Private Security Service
tioned “Respect, Protect, Remedy” framework as they apply to PSCs. In so doing, the Signatory
Consultancy and research
Companies commit to the responsible provision
Working in conjunction with our client’s
of Security Services so as to support the rule of
engineers and experts, MAST will ascertain
law, respect the human rights of all persons, and
the level of contamination and likelihood of
protect the interests of their clients.
the presence of ordnance. MAST has clear the search and classification of land and under-
An effective partnership and appropriate response
water ordnance.
It is becoming increasingly clear that private
expertise, understanding and awareness in
After a comprehensive review of each par-
security companies in partnership with the inter-
ticular threat scenario, survey and clearance
national coalition authorities and the shipping
plans will be formulated.
community can ameliorate the effect of the current scourge of Piracy. Solving the problem of
Private security companies and the use of firearms
Piracy, however, remains a political conundrum
There are many valid arguments for and against
medium term evidence of a solution.
for which there does not appear to be any
the carriage of firearms on ships and a number of key factors that must be addressed before a decision is taken, including the legalities and rules of engagement. MAST provides armed security where the law permits and if it is appropriate to the threat. The inherent right of self-defence exists as a principle in most jurisdictions and the use of
www.mast-commercial.com
theBaltic Spring 2012 www.thebaltic.com
65
Risk management
Understanding risk in order to manage it As often as not risk management is about down-to-earth practicalities
S
hipping is currently in the grip of
viability of a shipyard and associated guarantor
become more sophisticated in recent years.
a prolonged downturn. Against the
when entering into a newbuilding contract?
Moore Stephens, for example, has developed
background of a struggling global
“These are all situations where a focused
new software, accessible via the internet for
economy, freight rates are tumbling
approach to risk management could have
multi-location application, to help clients embed
and many owners and operators are struggling
significant benefits. Risk management itself has
risk management procedures into their day-today
to keep their heads above water.
business
Parties to contracts signed in a healthier
activities.
But,
market and a more buoyant economy are now
ultimately,
effective
looking to renegotiate deals and restructure
risk management is
their finances. For some, it is likely to be too
about understanding
late, but for others there may still be room for
the business you are
restructuring.
in, and understanding
Michael Simms, a partner at shipping
the areas where your
accountants Moore Stephens, says, “We are
business is at risk. If
currently working with clients and, in a number
you understand the
cases, with banks on risk management-
risks, then you can
related
deal
projects,
including
restructuring,
with
them
going-concern, cashflow, impairment and loan
properly
and,
covenant reviews. As finance is very tight in
some cases, avoid
today’s market, the ability to produce a sound
them altogether.” According
and realistic business plan going forward is still
James
likely to meet with an encouraging response.
in
to
Wilkes,
managing director of
“There are lessons to be learned from the current downturn. Shipping is an industry which
Gray
can benefit greatly from reducing its exposure
company is not just
Page,
the
to risk, not least because it is a significant user
involved in maritime
of outsourced services. And risk management
security
has become an increasingly important part of
management
the industry. A mixture of prudence and
piracy issues. “We
optimism, together with close attention to risk
have a long history of
management, may prove to be invaluable.
working with clients
risk or
to mitigate all kinds
“Time spent at an early stage assessing the potential risk involved in long-term charterparty
of
agreements, for example, could well prove to
financial
be money in the bank further down the line.
claims risks as well
Similarly, it is wise to evaluate other counter-
as physical risks.”
party risks. Does the counterparty owe money
While piracy work is
under a derivatives contract, for instance?
a
And have you assessed the ongoing financial
issue, much of the
66
Michael Simms
theBaltic Spring 2012 www.thebaltic.com
risks,
public
be risk
they or
domain
Risk management Wilkes explains, “I would argue that had there not been Somali piracy maritime security would not have been on anybody’s radar.” Investigation and business intelligence work is very strong he says. However, he does not believe that detailed, investigative due diligence has ever been a strong feature of the shipping market. Credit reports and brief checks on charterparty counterparties have taken place “but in terms of getting stuck into counterparty due diligence, it is not what the shipping industry is known for. Just because the markets have plunged doesn’t mean people are taking their due diligence more seriously.” The claims area has got very busy again because there is a hostile claims environment and all the P&I Clubs and insurers recognise that, Mr Wilkes explains. The nature of Gray Page’s work has changed somewhat. At one time a lot of the company’s investigative work related to electronic transfer attachments by proving that companies were affiliated. Now that Rule B attachments are not so readily available, the traditional tracing of assets and arresting of ships has become more prevalent again. For example, in Gibraltar ship arrests get priority in the Supreme Court. A lot of Gray Page’s work is now more focused on ship arrests in arrest-friendly jurisdictions like South Africa. He suggests that there are junior lawyers coming through who have not had experience in ships arrests
James Wilkes
because of the concentration on Rule B company’s work involves due diligence and
right diplomatic channels. Other issues, he
attachments for the past five years or so, and
claims litigation on which it does not comment.
says, include the loan book for newbuildings.
are having to learn from scratch.
“We are a genuinely broad-based provider, the
Banks have been lending to individuals, who
With the advent of the Arrest Convention
only thing we are exclusive to is the maritime
have in turn promised part of the ownership
last year, arrests are taking place in more
industry. Our work is all maritime trade related.”
to third parties, with the result that if the bank
jurisdictions and if a club or a fixed premium
Mr Wilkes says that the firm continues to
decides to foreclose it will find that three or four
underwriter is not prepared to put up a letter
support maritime law firms, P&I Clubs, owners
different individuals might have a claim on the
of indemnity or guarantee, the ship could be
and insurers dealing with corporate malfeasance
vessel. Gray Page aims to assist clients to settle
detained for months. Developing countries are
issues. Gray Page does defence, plaintiff work
their claims preferably without having to take
flexing their muscles and, as they mature, have
and expert witness work – in the commodities
expensive legal action. “People don’t apply a
more leverage over the cargo going in and out
field among others, in many different jurisdictions.
lot of common sense to risk management, they
of the country. “How do you prove something
“I suppose you could say that the economic
just hammer away on the legal side, and have
didn’t happen, which is what you are left with
and security and political climate creates the
a massive legal bill at the end of the day for
in many cases?”
ideal market for risk management companies
something that could have been sorted out with
The Bribery Act introduced in the UK is an
like ours. When the markets were at their
a few hours of decent common-sense thinking
additional hurdle that companies have to get
highest, freights were huge and everyone was
and a settlement.”
over. Mr Wilkes says Gray Page reviews its
earning a lot of money, nobody was thinking
There are plenty of countries in the world
Bribery Act compliance on a monthly basis,
about the down side.” In the current climate
where assets have been taken over by the
which he believes gives clients the assurance
things have changed and it also has to be
state, for example. Mr Wilkes believes that when
that the company operates lawfully.
acknowledged that natural resources and new
everything is going wrong people will get into a
The market situation at the moment provides
market growth may be in places where it is
crisis mentality, and want the perfect outcome
for a “fascinating working environment” he
difficult to operate. “Our clients look to us to
rather than the best outcome possible.
adds. Gray Page is working all over the world on
help them operate there safely and limit the
Business is growing across the board and
all sorts of different issues.The interesting thing
amount of exposure they have to risk and also
the company’s corporate investigation side is
about the investigator’s role, he says, is being
to help extract them if needs be.”
bigger in revenue and activity than the maritime
in the shadows of big cases, although sadly this
This help could involve advising them on
security side. The latter has really only become
cannot be used for marketing purposes.
security personnel, or plugging them into the
such an issue because of Somali piracy, Mr
theBaltic Spring 2012 www.thebaltic.com
67
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
R
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.
68
theBaltic Spring 2012 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 Spring 2012 www.thebaltic.com
While some people feel EEDI is just for new
69
Ship finance
New credit lines Owners are seeking new sources of ship finance according to law firm Norton Rose’s latest report on the transport industry
T
he shipping sector is looking to new
of fronts, from a reduction in the amount of
On the one hand, he said, shipping
sources of finance in place of bank
debt available to an oversupply of vessels
companies expected their finance to come from
funding. While 43% of respondents
within some areas of the market. Despite
banks, whereas on the other, the cost of that
said that they expect their primary
this, the sector is proactively putting plans
borrowing could potentially destabilise their
source of funding will continue to come from
in place to adapt to market conditions and
business. He thinks that this message from the
bank debt over the next two years, 31% said
a significant number are seeking opportunities
survey suggested a lack of ambition on the part
that they expect this would come from private
in new markets and planning joint ventures
of owners in looking more widely for finance.
equity and 18% from export credit agencies.
and mergers.”
One thing the survey did throw up is that most
The
Forty two per cent of respondents to the
survey,
entitled
Norton Rose Group survey believe that a lack of
‘The Way Ahead’ is the
available funding poses the greatest threat to
third
the stability of their business and 40% say that the
released by Norton Rose
cost of borrowing is their primary concern.
Group. It details the views
Other findings from the research were that
of
transport
1,100
report
international
56% are planning joint ventures, mergers or
respondents from a range
pools over the coming year and 55% said that
of companies involved in
their key priority is to maintain cash reserves
transport, including owner/
and secure funding lines.
operators, manufacturers,
Commenting on the report, Harry Theochari,
government entities and
global head of transport, Norton Rose Group,
professional services firms.
says: “The past three years has seen a notable
Of the respondents, 263
decline in the availability of bank lending to the
are from the shipping sector.
shipping sector and this has had a considerable
According
to
Mr
businesses.
Theochari, he found it
Shipping companies are now looking beyond
interesting that 42% of
traditional forms of finance and are readying
people said the biggest
their businesses to weather further economic
threat to their business was
uncertainty over the next 12 months.”
a lack of available finance,
impact
on
many
shipping
“The key priority post-2008 has been to
whereas a similar number
ensure secure funding lines are in place. The
of respondents said that
sector is drawing on the experience of the past
their finance was to come
three years and preparing to attract new forms
from bank lending.
of finance by reducing operating costs further
“There
is
no
lending
more and more opportunities for new equity
moment. It is very difficult
investors to enter the market, particularly from
to find anything to borrow
private equity which is showing growing interest
from a bank. Even if you
in the sector.”
could find a bank, the cost
Simon Hartley, head of shipping adds:
around
bank
and disposing of non core assets. We’re seeing
at
the
of borrowing is so high that
“Shipping is facing challenges on a number
most people turn away.”
70
theBaltic Spring 2012 www.thebaltic.com
Harry Theochari
Ship finance Mr Theochari says Norton Rose has something of the order of $3-4bn worth of deals involving private equity players. He says that with all the bankers leaving the shipping sector there are plenty of good quality people available to advise private equity concerns. “We are seeing ex-bankers coming in on the private equity side, and ex-bankers moving into investment advisor roles, particularly in New York. I suspect we will see much more private equity business coming into the shipping business.” However, he says he doesn’t believe that private equity finance can provide all that is needed to finance shipping, or at least fill the void created with shipping banks coming out of the game. While big players can afford to provide the cash backing necessary, this is obviously not a position that everyone can emulate as many will simply run out of money, or the banks will not provide support. “It will be very difficult for people who have over-expanded or overextended to try and keep going unless this market cycle turns pretty quickly,” Mr Theochari says. “I have a horrible suspicion we are going to see a lot more blood on the table.” He predicted
in
September last year that there would be at least four US publicly listed companies that would go to the wall or into Chapter 11 before the end of 2012. So far there have been three companies. There are a lot of shipowners whose cash returns are shrinking, while at the same time there has been no upturn in rates. “That’s just down to over supply. It is a very simple
Shipping trends (source Norton Rose)
dynamic, too many ships pushes the price down.”
people in shipping are looking to their
There have been a number of directed sales by
shareholders and equity for finance. “I think
banks, Mr Theochari says, but not big numbers
Up until recently there were very few arrests
they have realised they are going to need
of private equity players, or vulture funds picking
of vessels partly because banks were trying to
money from their shareholders. A lot of people
up assets in volume.
work their way out of the cycle and secondly
were thinking they could grow their business
“The other problem with the early private
because there was no point in arresting ships
through mergers, acquisitions and other
equity players is that they are not really long
which were only worth half of what they were
strategic alliances”. He says that this harks
term players and shipping is a very cyclical
when the bank financed the transaction. “We
back to the old style shipowning method,
business. It is not a question of buying and
have seen many more arrests and many more
where there were 64 shares in a ship “and you
selling assets at a fixed time. This meant that
foreclosures than we saw 12 months ago.
could buy your percentage of them.”
they had difficulty in keeping investors happy
Don’t be surprised if there is a glut of arrests
Another interesting point he highlights
because if you don’t have a beginning or end
in the next few months”. South Africa, Belgium
from the survey is the private equity element.
date it is very difficult to work out what your rate
and Singapore are perceived to be friendly
When the financial crisis first blew up, he says,
of return might be.”
jurisdictions.
there were a lot of so-called “vulture funds”
According to Mr Theochari, the approach
“We’ve all gone back to basics, you must
in evidence. These are concerns with money
now is more sophisticated. “We are seeing some
have cash available or credit lines available,” he
looking to buy assets cheaply and move them
more high quality players coming into the market
says. Credit terms are not what they were either
on relatively quickly to make a profit.
and it is really exciting as these people really
and cash or nothing may be the requirement.
“They didn’t do well in the shipping market
know what they are doing.” Admittedly some of
In terms of bunker supply “there are some
for 2008 and to the end of last year because we
the new players do not know shipping well but
companies that can’t get bunkers unless they
haven’t really seen any real distressed sales.”
“they learn fast.”
pay cash, that is really killing them.”
theBaltic Spring 2012 www.thebaltic.com
71
The Marshall Islands Registry
Photo courtesy of Eagle Shipping International (USA) LLC
service and quality are within your reach
We look forward to seeing you at CMA 2012 Visit us at booth #15 International Registries, Inc.
in affiliation with the Marshall Islands Maritime & Corporate Administrators
tel: +1 703 620 4880 | maritime@register-iri.com
www.register-iri.com
Ship registries
Ship registries must be proactive Countries that flag ships need to deal with issues ranging from armed guards on their vessels to prevent pirate attacks through to complying with an increasingly complex regulatory environment
S
hipping is going through one of the
regulatory compliance. Our aim is to help
commitment to quality and to ensure the lives
toughest periods in its recent history.
shipowners comply, rather than to sit back
and conditions of seafarers on our ships are to
Low freight rates and the continuing
and react to non-compliance. For example,
the standards we expect. We have consulted
worldwide economic downturn are
we have been conducting training seminars
widely on our policies and expect to have the
conspiring to pile pressure upon owners and
for our global network of Maritime Labour
legislation ready for mid 2012. We are providing
operators, at a time when they are required to
Convention inspectors and have certified well
regular updates to our owners and operators on
comply with stringent regulations covering safety
over 100 individuals to date. Our global network
what to expect and have made these available
and the environment, and when piracy continues
of inspectors is available to shipowners and
on our website. We see this as the biggest
to pose a major threat to ships and their crews.
masters in every major and most minor ports of
shake-up in the industry for a number of years
Scott Bergeron, chief executive officer of the
the world in case vessels experience difficulties
and aim to ensure we have the necessary
Liberian International Ship & Corporate Registry
prior to or upon arrival. These investments by
framework for our owners to achieve compliance
(LISCR), the US-based manager of the Liberian
the registry have proven to increase compliance,
ahead of time.
Ship Registry, believes that, now more than ever,
which in turn prevents accidents and detentions.”
“We will continue to do what we do best and
owners and operators need a ship registry which
Liberia has more than doubled the size of
expect to continue the kind of steady managed
is capable of adopting a proactive approach to
its fleet over the last ten years. It now numbers
growth from quality owners and operators
the problems they face and, where possible,
over 3,800 ships aggregating in excess of
as well as the registration of some of the
identifying the problems before they occur. He
125m gross tons. Liberia features on the White
world’s most prestigious superyachts which are
says, “We regard ourselves as partners with
List of all Port State Control Memorandums of
operating commercially. We believe the Isle of
our clients and we work extra hard for them
Understanding, worldwide. It is rated as a low-
Man offers a low cost registry option whilst still
during difficult times. While it is our responsibility
risk flag by the Paris MoU, and features in the US
providing client-focused and pragmatic solutions
to ensure that regulatory standards are met,
Coast Guard’s Qualship 21 programme.
to owners and operators. The government is
we have also developed innovative concepts
2011 has not been without its challenges,
committed to the success of the register and
to help shipowners conserve money, yet still
says Dick Welsh, director of the Isle of Man
is prepared to run it on a not-for-profit basis
maintain high standards. These initiatives
Ship Registry. “The industry is facing difficult
providing it upholds the reputation of the Isle
include a progressive lay-up concept, drydock
economic times and there is the ever present
of Man and creates economic development
extensions, harmonised audit programmes and
threat of piracy in the Gulf of Aden and the
opportunities within the professional support
fleet consolidation opportunities.
Red Sea. To support our owners, we have
services on the Isle of Man.”
“The escalating incidence of piracy is a
continued to develop our low cost fee structure
According to Mr Welsh: “This year saw
troubling challenge. Liberia is determined to
to cover our operating costs, whilst maintaining
a continuation of the kind of growth (12%
help identify and implement a global solution to
our competitive advantage. We have worked
GRT over 2011) we experienced last year,
this growing epidemic. This includes our efforts
closely with the UK authorities and shipowners
adding some very significant vessels and new
at the IMO in the development of guidelines for
to facilitate the carriage of armed guards to
companies to our portfolio. The register is the
seafarers, shipowners, ports and security staff.
protect our ships and seafarers against the
second fastest growing register in Europe and
threat of piracy.
has increased its position in Clarksons’ Flag
“In terms of safety, pollution prevention and seafarers’ welfare, the Liberian Registry
“Work continues on the Maritime Labour
will continue with its proactive approach to
Convention which is a key element in our
theBaltic Spring 2012 www.thebaltic.com
State world rankings (by GRT) to 15th place amongst the world’s registers.
73
“A very informative, enjoyable and well run event – thanks!” K Pike, Southampton Solent University
AdvANcE NOticE
“Bringing people together exchanging ideas to stimulate the development of green technologies.” O Steenweg, Wagenborg
the 9th annual green ship technology conference
Tuesday 27th, Wednesday 28th &Thursday 29th March 2012 Crowne Plaza CopenhagenTowers, Copenhagen
www.greenshiptechnology.com
Plus
two seminars on Friday 30th March 2012: Understanding EEDI and Putting SEEMP into practice
For 10% Baltic Magazine discount quote VIP Code: FKT2274BMAD Over 300 people from 25+ countries worldwide decided that their valuable time and money was well spent at GST 2011 - what an amazing testimonial for the event in these times! Join your colleagues at GST 2012 and discuss the most important green ship technology challenges shaping the success of your business and focus on future opportunities. A must attend event for all shipping stakeholders concerned with improving the marine environment. • Hear from leading shipping industry speakers on their strategies for improving the maritime environment • Focus on key themes of reducing emissions and maintaining energy efficiency • Analyse the impact of new regulations such as EEDI and SEEMP • Discuss the shipowner/operator and charterers’ perspectives on meeting the operational and regulatory challenges New expanded programme: now extended to 3 full days to allow more time for discussion, debate, networking and information-gathering
NEW FOR 2012
• Learn from the latest ship design options and technology for greener shipping • Benefit from in-depth discussions on prospects for alternative power sources • Gain detailed knowledge of ports and terminals’ developments in improving environmental performance • Understand the challenges of business development for new technologies
Official Publication:
Supporting Organisations
For further information on the programme or to register your interest in attending please contact: Trina Chakravarti on: +44 (0)20 7017 6444 or email: trina.chakravarti@informa.com Organised by:
Official Publication:
Ship registries
Scott Bergeron
“As the register grows, it is ever more
Dick Welsh
event of a fire at sea.
Clay Maitland
technological marvel but on the other hand you are in an environment, namely the sea, where
important to maintain the levels of service
The RO Code, he says, is going to place
for which the register is renowned. We have
quite a large number of explicit responsibilities on
developed and introduced new systems to help
the flag state. While he says that the prevailing
He wonders whether this may be the
support this and are expanding our network of
mantra is that the ship is its own best lifeboat
beginning of a realisation by P&I Clubs and hull
appointed surveyors in key locations to support
“there are questions as to whether that in fact
underwriters that large passenger ships are
what we can achieve with our surveyors based
will prove to be the case” he says. Many naval
uninsurable. Some insurance companies have
in the Isle of Man. In addition, our representatives
architects say that it is the case “but I have heard
been quoted as saying that they are reconsidering
in Tokyo are working with Japanese owners and
from naval architects who say they disagree with
whether to provide cover for larger ships.
operators to provide registration services locally.”
that, I think we have to confront these issues
The liability on the Cost Concordia accident
The registry has retained its White List
and ask whether we are satisfied with a ship that
Mr Maitland estimates at $1bn and it is, he
positions on the world’s port state control lists
heels to a great extent in heavy winds or rough
believes “a harbinger of things to come”.
and accreditation by the USCG in its Qualship
seas as I have seen these ships do”.
Limitation of liability “does not exist in the US”
things can happen.”
21 programme. It also has ‘Low Risk’ recognition
Mr Maitland says he has seen and
he says. “I don’t care what any lawyer tells you
by the Paris MOU for ships visiting European
experienced the effect on “these high wedding
to the contrary, there is no limitation here at all.”
ports and shared top place in the industry’s Flag
cake-style structures that you see on modern
The big passenger ship disaster is yet to come,
State Performance table for 2011.
passenger ships”. Are these ships likely to
he says, “and I hope I never live to see it, but
While the Costa Concordia has focused
remain upright after a fire or a collision at sea,
what everyone needs to understand is we have
attention on issues like safety management practice
he asks? Flag states need to know what the
a sword of Damocles hanging over our head
and communications, there is another aspect of
expert opinion is on this and what a computer
which is liability generally, but most spectacularly
the accident that has concerned the Marshall
simulation will show in the event of a collision
visible with passenger shipping. I don’t think
Islands Registry, according to Clay Maitland,
or a fire.
the modern passenger ship business model,
managing partner of International Registries Inc.
The issue facing flag states, class societies
meaning these big cruise ships, is sustainable.”
A code for recognised organisations is in
shipbuilders and naval architects is how to get
“I think it is extremely unwise to go from
the process of being drawn up – the RO Code
4,000 people off a ship in an emergency. In the
casualty to casualty and from disaster to disaster
– which is coming through the auspices of
case of the Costa Concordia this was achieved
always taking that as the model for what is the
the IMO. “The RO Code is the section which
in the most part because the ship was close to
ultimate in marine safety. You see very clearly that
I think we should be looking at in connection
land and rescue was at hand, Mr Maitland adds.
the disaster that hasn’t happened yet, the one
with the Costa Concordia,” Mr Maitland says.
“What do you do in very bad weather in the
that is coming, is something we should prepare
Classification societies – which act as rec-
Pacific, the Atlantic or the Mediterranean?”
against and deal with and we are not doing
ognised organisations – have a considerable
There are issues of stability, Mr Maitland
that. We are not looking at the demographic of
impact on the design of passenger vessels
continues, “and that is where the rubber meets
four, five or six thousand passengers who think
he
equipment,
the road because we have to certify these
they are in a gambling casino in Las Vegas and
and “evacuation egress” for thousands of
things.” He says he has always been a critic of
who have no idea how to get off the ship if the
passengers. Several issues arise, according to
passenger ships with anything up to eight
ship starts to heel, who have no idea what a life
Mr Maitland, the first being stability. The new
thousand people on board. He is concerned
saving appliance is, and who think the best thing
generation often have 15-16 decks and popular
about the fact that cruise ships are treated as
to do is to go to their cabin, if they can find their
design features include atriums, which could
floating hotels. “We have all lost sight of the fact
cabin, and wait for rescue. All of that is based on
themselves extend upward over many decks.
that this is a large piece of magnificent technology
a series of hypotheses which may not be valid in
Such features could prove hazardous in the
moving through the water. It is mechanical and
a given case.”
says,
including
lifesaving
theBaltic Spring 2012 www.thebaltic.com
75
Corporate viewpoint ClassNK
More Than Just Shipping In his more than 30 year career in the Japanese government, Koichi Fujiwara worked his way up from Ship Inspector to Director-General of the Maritime Bureau ofJapan’s powerful Ministry of Land, Infrastructure, Transport & Tourism (MLIT). After stepping down as the Japanese government’s top man in maritime in 2010, he joined ClassNK where as Executive Vice President he has helped the world’s largest classification society launch a new range of training and certification programs focused on the human side of the shipping industry.
Could you give us a brief overview of your educational background as well as your career?
organisations from any number of nationalities
I joined Japan’s Ministry of Transportation
to agree in order to move things forward. As
(now the Ministry of Land, Infrastructure,
the number of players increases, however,
Transportation
after
it’s easy to lose sight of who is ultimately
Maritime training is an important issue that affects the entire maritime industry. How is ClassNK contributing to this, and what milestones in terms of certification do you hope to achieve?
graduating from the University of Tokyo with a
responsible, and the potential risk increases
With the rapid growth of the global commercial
Master’s degree in Naval Architecture in 1975.
too.
fleet over past few years, as well as the
&
Tourism)
shortly
involved. With the debates over safety and the environment, a large number of players have
I then worked as a ship inspector, as well
Equally, with a large number of players,
technical revolution being brought out about
as assisting with the development of new
creating an agreement is a difficult and time-
by the introduction of ECDIS systems and
ship safety standards. After the oil crisis, I
consuming process. I’ve experienced this
other requirements, the difficulty in maintaining
helped to develop the stabilisation policy for
personally, but luckily in the maritime industry
highly competent crews is something that is
the Japanese shipbuilding industry, which had
we have an international quality assurance
being felt throughout the industry.
been devastated by the global recession. I
system unlike anything found in other industries
At NK, we now offer a maritime training
also took part in international negotiations at
in the form of classification societies. I think
programme certification to help address this
the OECD and the IMO.
these societies play an incredibly important
need. In order to carry this out, we brought
role in reducing risk in this industry.
together leading maritime training experts
Finally, as Director-General of the Maritime Bureau, I was responsible for Japan’s maritime
Japan has one of the world’s largest
who are active in Japan and overseas, and
industry, and I oversaw every aspect of policy,
maritime clusters and, in my long career in
created a new Maritime Training Committee to
from industrial development, to maritime
Japanese government, I have worked with
ensure that our maritime training certification
safety and environmental protection, as well
organisations and companies from every
programmes suit the realities of the industry.
as seafarer policies.
sector of the maritime industry. It is my hope
We also established the new ClassNK Maritime
After retiring from the government, I
that I can use these relationships, and, in
Training & Education Standard.
joined ClassNK, where as an executive vice
order to promote safety, protect the marine
president, I am directly involved in the Society’s
environment and promote the development of
management and day-to-day operations.
the maritime industry, strive to make NK play a
incredible support for our effort in this new
larger and more active role in this environment.
field, and we have already certified ECDIS
What key lessons or experiences from your previous career do you bring to NK? In your new role, what areas of ClassNK do you hope to contribute to?
Fortunately,
the
industry
has
shown
training courses for NYK Shipmanagement
What sectors of NK’s activities are you currently in charge of?
Pte Ltd (NYKSM), a subsidiary of NYK based
I
management-related
Philippines Inc., a subsidiary of “K” Line based
convention-related
in Philippines, among others. These approvals
As a government official, I was not only able to
certification like ISM, ISPS and MLC (which
certify that each company’s ECDIS training
observe the ongoing changes in the maritime
is nearing ratification), as well as ISO, OSHAS
courses comply with the IMO’s model course,
industry, but also to actively participate in
and other management system certification. As
as well as our own standards.
them. What I have gained from that experience
part of these activities, we have recently begun
We have also certified the ECDIS training
is an understanding of just how borderless the
certification for maritime training programmes,
courses provided by training centres of ECDIS
maritime industry has become.
and GHG emission certification as well.
manufacturers, such as Furuno Electric, Japan
primarily
certification,
oversee including
While the maritime industry was always
As the industry becomes increasingly multi-
one of the most global of industries, if you
national and diverse, there is more demand at
just look at a single ship operating today,
every level for managers to maintain quality,
from the operator, to the owner, the crew,
including within human resources. At ClassNK
and the financiers, you have individuals and
we want to help address that demand.
76
theBaltic Spring 2012 www.thebaltic.com
in Singapore, and “K” Line Maritime Academy
Marine Science and Tokyo Keiki.
Corporate viewpoint ClassNK DNV, with its Seaskill programme, and more recently Lloyd’s, have been very active in Seafarer training. Why has NK entered this area and what can it offer that others can’t? I have the utmost respect for what DNV has been able to do in the maritime training field up until now. At the same time, I think it’s only natural for other classification societies to be investing in this field as well. As crews become increasingly multi-national, finding ways to ensure quality in order to maintain safety will become increasingly important. We hope to provide a practical certification system that will help make high-quality training a reality. In order to do that, we send qualified and experienced auditors to training facilities to carry out audits of the actual training programmes and contents. Luckily, Japan has a long tradition of seafarer training and education, and the majority of seafarers are trained in Asian countries. Training and education are closely linked with culture,
so
understanding
Asian
viewpoints is beneficial to creating effective training programmes.
Where do you see ClassNK being in five years time, and what is your vision for ClassNK as a global organisation? It might not be possible to achieve this in five years, but I would like ClassNK to grow and adjust to the changing nature
of
the
Koichi Fujiwara
maritime
Age: 63
industry, and become an organisation creating
capable
Current position:
of
Executive Vice President, ClassNK
wide-ranging
solutions to ensure maritime
Education :
safety and environmental
MSc in Naval Architecture from the
protection.
University of Tokyo
Classification
societies
Career History:
have the incredible ability
1 April 1975 – Technical Staff, Safety Planning
to create standards that go
Office, Inspection & Measurement Division,
beyond a nation’s borders. I think
Ministry of Transport (MOT)
we are entering a period where we
1 July 1998 – Director, Shipbuilding Division,
will be called upon to make even
Maritime Technology & Safety Bureau, MOT
greater use of that ability, to ensure the safety of life and property at sea and
1 July 2003 – Deputy Director-General for
protect the marine environment.
Engineering Affairs(Maritime Bureau), Minister’s Secretariat, MLIT 1 July 2007 – Director-General, Maritime Bureau, MLIT 1 July 2011 – Executive Vice President, ClassNK Hobbies: Golf
theBaltic Spring 2012 www.thebaltic.com
77
Marine software
Software revolution At a time when shipping companies desperately need to cut costs and mitigate risks, innovative software solutions are offering help
O
ne firm that recently expanded its
commodity supply chain. After a rigorous review
“Most of the world’s traded goods are
operation is Triple Point Technology,
of all the shipping solutions in the market, Triple
transported by sea, so the shipping industry
which
Point decided to purchase Softmar because
will definitely benefit, with the need for more
risk
its Chartering and VesselOps™ solution clearly
commodities driving the need for more ships.
management software. In January 2010, it
possessed more comprehensive functionality
This in turn will drive the need for technology that
announced the acquisition of Softmar, which
than competitive solutions, in addition to its
can optimise profitability by providing full visibility
provides software for vessel operations.
superior architecture.
into all areas of chartering and vessel operations,
provides
commodity
and
multi-market enterprise
and deliver the analytical tools to make better
“With roughly 90% of the world’s traded
“The acquisition has been a win-win for both
goods transported by sea, a critical component
companies. Softmar has been able to leverage
of
management
Triple Point’s extensive engineering, account
The most obvious challenge facing the
is the ability to manage vessel movements
management, sales and marketing resources.
shipping industry is market volatility due to
and operations and freight rate volatility. The
This has enabled implementation of mature
weather,
acquisition of Softmar singularly positions Triple
enterprise software processes and the delivery
availability, among many other factors, Mr Larsen
Point to immediately and comprehensively
of significant incremental value to clients. I see
says. “A fleet’s value can swing wildly from one
optimise freight management in its core markets,
many of our competitors still operating as “mom
day to the next. Another is a glut of vessels.
including crude oil and petroleum products,
and pop” shops, which creates a tremendous
New vessels that were ordered some time ago
chemicals, metals and mining, agriculture, and
amount of risk for their customers. Prior to being
when the market was better are just now being
food and beverage,” the company said when
acquired, Softmar had 45 customers and was
delivered. Because the number of available
announcing the acquisition.
very focused on EMEA. Two years later, we have
cargoes is much smaller than the number of
over 80 shipping customers across the world.”
available ships, many of these vessels are sitting
successful
supply
chain
“Supply chain management has historically
business decisions.”
operating
expenses,
and
cargo
been about transparency, automation, efficiency
Commodity movements have been driven
idle and eroding profits by leaving their owners
and cost reduction; all of which are necessary,
by demand in centres such as China, India and
without the means to make back the significant
but not sufficient to optimise profitability,” said
South America, so how does Mr Larsen see
sums of money they paid for them.”
Peter Armstrong, president and ceo of Triple
those markets developing in the coming years?
Mr Larsen adds that there are also challenges
Point Technology. “With the need to manage
“There are two major trends that significantly
associated with accurately determining the
sharp commodity price volatility, supply chain
affect how these markets will develop. One is
mark-to-market (MTM) value of a fleet, including
solutions must be market-based and provide
population growth. The United Nations estimates
the use of spreadsheets that are prone to errors.
analysis and risk management tools to best
that the world population reached seven billion
“This can cause inaccurate MTM valuations
determine when to source, how to move,
at the end of 2011, and that it will surpass nine
that provide a false picture of financial standing.
whether to store, and when to hedge using
billion by 2050, with most of those additional
Triple Point’s Softmar Chartering and VesselOps
financial derivatives. Through the acquisition of
people coming from developing countries. The
solution helps address all of these challenges by
Softmar, Triple Point’s ability to provide market-
other trend involves the growing middle class
providing one integrated platform that eliminates
based supply chain solutions, including freight
within those countries. They have the desire for
spreadsheets and enables companies to operate
rate risk management, is unmatched.”
more consumer durables and more high protein
with a complete picture of enterprise position and
Commenting on the acquisition: Michael Lolk
foods. Because of these trends, there is and
exposure. The solution provides a global view of
Larsen, managing director of chartering and
will continue to be tremendous growth in the
vessel movements, market cargo availability and
vessel operations at Triple Point explained: “Triple
demand for raw materials and commodities.
existing cargo commitments. It comprehensively
Point’s goal is to deliver the deepest functionality
These are long term trends, so despite the fact
manages freight risk, chartering and vessel
across all commodity classes, so it was vital to
that the economy is in a downturn right now,
operations, providing powerful tools that enable
provide customers with a solution for shipping
this growth is still occurring and will continue to
more profitable decision-making and streamline
since it’s an extremely important part of the
occur over the coming years.
day-to-day operations.”
78
theBaltic Spring 2012 www.thebaltic.com
Marine software New technologies are being developed to
hectic schedules, and secondly that SEEMP
address specific issues related to the biggest
will not have any real-world impact on a vessel’s
challenges in the shipping industry – volatility
efficiency in day-to-day operation.”
and complexity – Mr Larsen adds. “Shipowners,
According to Mr Henttinen “These concerns
operators, and charterers are at the mercy of
might gather credence if you accept the central
hundreds of complex events that can impact
assumption that SEEMP will be a paper-based
the cost of sea transport, and they need to
report compiled by crew members recording the
have the ability to efficiently manage all of them
required measurements from across the ship.
in order to maintain profit margins. Take piracy.
However, if you instead consider that many
Charterers and operators must take extra care
owners and operators are already choosing a
to route around piracy zones, which can result
software solution to SEEMP, you begin to realise
in delays and increases in bunker fuel costs.
the tangible benefits that this initiative could deliver.
“Intelligent” software solutions that can run
“With a digital solution, data can be
multiple routing scenarios that take into account
monitored remotely and automatically compiled
piracy zones, as well as time zone and pilot-
into reports, which can then be uploaded online
point to port distances, will help quickly and
– everyone in the chain of responsibility has
accurately determine the optimal route, and
access to the same report as soon as it is
provide accurate estimates of voyage times,
compiled. Should the vessel show inefficiencies,
distances and bunker fuel costs.”
either viewed independently or compared against sister vessels, proactive management
Weather events are another big cause of market volatility, he continues, and as a result
Esa Henttinen
can take immediate effect.” Computer and web-based solutions are
new technologies are being developed that use historic and real-time weather information to
Esa Henttinen, vice president, development
becoming standard, if not indispensable, for a
estimate the impact of potential weather events
at NAPA comments that “the implementation
multitude of applications, across the majority of
on voyage time and costs. While the specifics of
of the Ship Energy Efficiency Management Plan
the worlds industries, he says. “Software has
new technologies are still up in the air, one thing
(SEEMP) is set to be an issue of increasing
consistently proven to be a timesaving, efficient
is certain: companies that don’t implement some
urgency during 2012. By 1 January 2013, it will
method of managing tasks from simple calendars
kind of technology platform to mitigate the risks
be mandatory for every ship within the global
to the complex realms of medical science – it is
associated with market volatility and complexity
fleet of 400 gross tonnage and above to have a
fundamentally suited to monitoring, recording,
will have a very difficult time staying in business.
SEEMP in place.
comparing and analysing data – and in ‘realon
time’. Indeed as world-renowned software
called Mobile Voyage Estimator, a mobile
establishing a mechanism for owners and
developer, Tom DeMarco famously stated: ‘You
application available to Chartering and VesselOps,
operators to measure, benchmark and plan
can’t manage what you can’t control, and you
which provides accurate quotes from anywhere.
for improving the efficiency of each vessel and
can’t control what you don’t measure’.”
Triple Point recently released an application
“Initially
SEEMP
will
be
focused
therefore the entire global shipping fleet. “However, there has been criticism from some within the industry that this concept –
NAPA developments
TracPhone V11
innovative
while admirable in principle – will not prove
Meanwhile, leading UK distributor of marine
solutions to deal with changing regulatory
effective in practice. Detractors see the problem
electronics C A Clase is set to announce a major
requirements is the NAPA Group, a world-
as twofold; firstly that the implementation will
upgrade to its mini-VSAT Broadband network,
leading software house supplying safe and eco-
have a significant negative impact on those
and launch the brand-new TracPhone V11.
efficient solutions for ship design and operation.
onboard by adding further duties to already
Another
company
developing
VSAT market leader KVH will upgrade its mini-VSAT Broadband network for 2012 with the addition of global C-band satellite coverage overlaying its industry-leading Ku-band footprint. This first-of-its-kind unified dual-band maritime satellite communications network will provide multi-megabit service covering 95% of the Earth’s surface, including all of the world’s major shipping routes, offshore oil fields and commercial fishing grounds. C A Clase says this development represents the creation of the first next-generation global VSAT network using a single, relatively small antenna to provide offshore connectivity to vessels almost anywhere they travel. It is set to be a welcome development to those needing to replace expensive legacy services. “The TracPhone V11 satellite communication system is a revolutionary onboard terminal which
KUVA
theBaltic Spring 2012 www.thebaltic.com
79
Marine software It
uses a single stabilised antenna with a unique
will
provide
dual-band transmit and receive capability,
below-deck equipment
allowing it to seamlessly switch between the
and provide operation
mini-VSAT Broadband network’s global C-band
services,
and Ku-band satellite coverage. The 1m
seven-year subcontract
antenna delivers robust and seamless worldwide
to Ericsson Denmark.
under
Globecomm
broadband connectivity at all times and is 85%
a
will
smaller and lighter than other solutions available
provide its se@FLEX
on the market,” the company says.
VSAT service, including integration of shipboard
Unlike competing products, the V11 is one system and is much more reliable than multi
terminals
antenna systems. It also uses the same below-
Ku-band satellites as
accessing
deck modem for both the C-band and Ku-band
a part of Ericsson´s
for a unified solution, ensuring users are not
rollout, and will utilise
contending with trying to use different networks,
Globecomm’s Hosted
settings or protocols to run onboard applications.
Wireless Services. The
Andy Banting, responsible for commercial
global se@FLEX VSAT
marine sales at C A Clase, commented: “This is
platform will provide
a significant announcement for the industry and
automatic
roaming
highlights KVH’s technological capabilities in the
between
Ku-band
market. It also marks the creation of a truly next
satellite
generation service for commercial vessels. KVH
a global basis at a
has already seen significant interest for the new
flat rate. The global
global offering and we expect a full service to be
system
available for commercial use at the end of June.”
over 20 satellite beams
beams
will
on
access
operating through 13 teleports and including
One Horizon accreditation
fibre backhaul to the
One Horizon Group, meanwhile has announced
Globecomm
that its wholly-owned subsidiary, Horizon
Centre in New York.
Globex, has been accredited by Thrane &
The Hosted Wireless
Thrane for its Horizon VoIP PBX solution to be
Service
used with SAILOR FleetBroadband.
hosted BSC services,
provide
BTS/BSC monitoring
To gain accreditation, the Horizon VoIP PBX was submitted to extensive testing to ensure
will
Data
and
SAILOR FleetBroadband
performance
management by using
seamless integration with Thrane & Thrane Ericsson equipment.
SAILOR 500/250/150 FleetBroadband terminals.
to offer our customers even greater bandwidth
It will enable maritime customers to
efficiency and reduced satellite call costs via
The Globecomm Maritime solution offers
significantly reduce the cost and improve the
the Horizon VoIP PBX,” says Casper Jensen,
Ku-band maritime service coverage which
performance of voice services. The Horizon
vice president of Thrane & Thrane’s maritime
reaches the global shipping lanes and a
VoIP PBX allows simultaneous calling for up to
business unit.
worldwide managed network of fibre-linked teleports for transmission and management of
the
Mark White, ceo of One Horizon Group,
FleetBroadband standard data link – more than
comments: “This is an important endorsement
any other system for the bandwidth available.
from the leading manufacturer of mobile satellite
Keith Hall, Globecomm president and coo,
Horizon also offers users the flexibility to choose
communications equipment. It further validates
commented in January: “This contract is a great
from three different call settings for optimal
Horizon’s quality and reliability, and brings
example of how far Globecomm has come as a
cost/quality control.
significant incremental benefits to the users of
global managed network services provider. We
SAILOR FleetBroadband.”
take great pride in becoming a major player in
eight
analogue
telephones
over
Managing the cost of satellite communications
customer traffic.
has long been a concern for the maritime
the next generation maritime market and this
industry. A highly affordable solution like the
contract is a major stepping stone. We look
Horizon VoIP PBX is important for oil and gas,
Globecomm contract
forward to the opportunities that will arise from
shipping, coast guard and maritime patrols, to
Globecomm Systems announced in January
this contract and our partnership with Ericsson.”
manage ship operations more efficiently and
that it has been selected by Ericsson as a
Andy Silberstein, Globecomm senior vice
enhance crew welfare by reducing the cost of
subcontractor of the maritime GSM/VSAT
president and general manager, said: “Our
calls to friends and family.
managed operation for an Ericsson mobile
collaboration with Ericsson on this important
“Thrane & Thrane is committed to providing
communication network. The network will be
project enables us to utilise Globecomm’s global
shipping companies and offshore industries with
implemented on up to 400 container vessels
maritime VSAT network together with our hosted
maritime broadband solutions that enhance their
worldwide over the next two years, providing
wireless GSM services, bringing together two
existing investment in SAILOR FleetBroadband.
end-to-end 24/7 automated monitoring and
core Globecomm capabilities to provide a total
After extensive testing, we are happy to be able
real-time information control.
solution for our customer.”
80
theBaltic Spring 2012 www.thebaltic.com
Breakbulk
Breakbulk bouncing back? Clive Woodbridge reports on developments
T
he past 12 months have remained
Marko Stampehl, marketing and sales
testing for the breakbulk and project
manager for Rickmers-Linie similarly reflects
cargo sectors. However there are some
on some positive indications that the market
encouraging signs that the demand for
is on the way back up. He says, “Generally
multi-purpose and heavy lift ships is once again
speaking we saw the first signs of recovery in
on the increase worldwide.
the breakbulk, project and heavy-lift shipping
As Raymond Fisch, senior vice president,
businesses in 2011, with power generation
BBC Chartering and Logistic, observes, “The
equipment and oil and gas related projects
recent economic struggles have had a severer
showing healthy activity. We expect further
impact in developed countries than in emerging
growth in cargo volumes in 2012 mainly driven
economies, such as Brazil, China, India and
by energy, oil and gas and infrastructure projects,
Russia. These economies are still very bullish,
continuing the trend on from the past year.”
especially in the oil and gas, mining and energy
It is perhaps, though, too soon to say
related sectors, and it is their development
that a full scale recovery is underway in the
programmes and investment projects that
breakbulk market segment, as the delivery of a significant number of new multi-purpose and
are driving demand for project and breakbulk shipping now, and for the foreseeable future.”
Raymond Fisch
heavy lift ships is clearly affecting the balance
BBC Fuji, part of BBC-Chartering’s newbuilding programme: eight 9,300 dwt vessels of this type will be in service by the end of the year
theBaltic Spring 2012 www.thebaltic.com
81
Breakbulk
Rickmers Yokohama sailing through the English Channel
between supply and demand, putting downward
Mr Fisch says of the strategy behind the
vessels, with a similar lift capacity, have been
pressure on rates. Coupled with the fact that
newbuilding programme, “We believe in a healthy
deployed to strengthen sailings between the US
container and drybulk vessels are also seeking
mix of multipurpose and heavy lift tonnage. This
and West Africa. The naming ceremony for one
employment within this sector, it seems likely
gives us the flexibility to also deploy vessels
of the vessels, Safmarine Sahara, was held this
to remain very much a buyer’s market for some
with a higher lifting capacity for lower paying
February in the port of Savannah, Georgia.
time to come.
breakbulk cargoes, where this makes sense.”
Mr Flamant says, “We have improved our
Vincent Flamant, Safmarine’s multi-purpose
Rickmers is another operator that has been
breakbulk services by deploying more efficient
vessel trade manager accepts the injection of
investing in vessels with breakbulk capability.
new vessels designed to fit our market and West
breakbulk capacity into the market will remain
The 17,000 dwt Rickmers Yokohama and
African port limitations. They are all tween deck,
ahead of demand in 2012. However, he takes a
Rickmers Tianjin have recently been added to
box shaped, double skin-vessels with a strong
slightly different view on rate patterns and says
the company’s fleet and are now serving the
lift capacity.”
he expects that levels will actually increase over
trade between Europe and India
the coming months. “This upward trend will be
and the Middle East. Mr Stampehl
driven by the cost of operations that carriers
adds, “These have replaced short
cannot absorb any longer, such as bunker costs,
term chartered tonnage in this
and in our particular market, port delays in West
service
Africa,” he suggests.
long-term commitment to India
One of the biggest newbuilding programmes for vessels with breakbulk capability is being
and demonstrate our
and other areas catered for by this service.”
taken forward by BBC Chartering, the market
Rickmers has also established
leader with more than 140 vessels in its portfolio.
a joint venture with Maersk Line
The company continues to add to its fleet
to carry breakbulk and project
and in January this year took delivery of three
cargoes originating from the US
newbuildings as part of an ongoing fleet renewal
on a global basis. Maersk Line
and modernisation programme. The BBC
has acquired two multipurpose,
Amethyst is the second in a series of 14 14,360
US-flagged vessels, the 19,600
dwt vessels that the company has on order,
dwt Maersk Illinois and Maersk
and which have a combined lift capacity of 800
Texas, for the Maersk-Rickmers
tonnes; BBC Belem is the third of a series of eight
operation and both can lift up to
new 8,000 dwt multipurpose vessels with a total
480 tonnes.
lift capacity of 160 tonnes; and BBC Mont Blanc
Safmarine
continues
to
is the fourth out of an eight-vessel programme for
upgrade its niche multi-purpose
9,300 dwt vessels that BBC Chartering describes
vessel services, which are geared
as ‘flexible workhorses’, offering a combined
largely around the requirements
lifting capacity of 700 tonnes.
of West African breakbulk and
Also in January, its Caytrans BBC joint venture
project shippers. The carrier now
added a sixth vessel to its fleet. The 4,820 dwt
has eight vessels of 12,300 dwt
BBC Anglia is now operating between the US
to 18,000 dwt with a combined lift
Gulf and the North Coast of South America,
capacity of 144 tonnes deployed
allowing Caytrans BBC to provide more regular
on two Europe-West Africa strings,
sailings to Colombia, Venezuela and Trinidad.
while two brand new 18,000 dwt
82
theBaltic Spring 2012 www.thebaltic.com
Safmarine Sahara loading in Savannah, Georgia
US ports
Obama budget digs deep for ports Clive Woodbridge looks at Federal funding
P
resident Obama has recently released
dredging needs that have gone unheeded.”
contributed to a 3.2% drop in container volumes
his fiscal 2013 budget and it contains
The fiscal 2013 budget also includes
to 6.1 million teu last year. However, adjusting
some positive news for the country’s
further provisions for transport infrastructure
the figures for CUT’s departure, the remaining
seaports. In particular there is increased
improvements, some of which will be spent
six container terminals in Long Beach saw a
funding for maintenance dredging which should
on seaport related projects. This follows on
container throughput gain of 8.1% last year.
allow ports to maintain their competitive position
from the announcement in December that four
The Port of Long Beach plans $4 billion in
and handle the increasingly large vessels calling
port projects have been awarded a total of
capital improvement projects over the next ten
at US ports safely and efficiently.
$62 million under the TIGER (Transportation
years including the building of the Middle Harbor
The budget includes a request for the US
Investment Generating Economic Recovery)
facility, which will combine two older container
Corps of Engineers, which handles all dredging
grants programme. This includes over $18
terminals into one that has double the capacity.
in US ports, to receive $848 million from the
million for South Jersey port rail improvements,
It has recently been announced that OOCL, and
Harbor Maintenance Trust Fund. This represents
as part of a larger effort to repair the rail network
its Long Beach Container Terminal subsidiary
an increase of around 12% compared with the
connecting the ports of Salem, Paulsboro and
will lease the Middle Habor terminal, investing
fiscal 2012 budget.
Camden, upgrading them to accommodate an
around $500 million in the process.
Kurt Nagle, president and chief executive
anticipated increased demand in both rail and
Long Beach is also evaluating plans to
of the American Association of Port Authorities
port traffic. Other projects involve spending to
build a new grain terminal at Pier T in the port.
(AAPA) welcomes the move. He says, “While still
improve rail facilities in the ports of Long Beach,
This would be operated by Total Terminals
not close to the $1.4 billion collected annually
New Orleans and Jacksonville.
International and would be designed to
from importers and domestic shippers in Harbor
The positive Federal funding news comes
transfer grain from rail cars into ocean shipping
Maintenance Tax for deep draft navigation
after US ports achieved a mixed set of results
containers, with a design capacity of 0.75 to 1.5
maintenance dredging, the Administration’s
for 2011. While there has been an underlying
million tonnes of grain a year.
fiscal 2013 request is a significant increase from
recovery from the effects of the global financial
On the Pacific North West, Tacoma port
prior years.”
crisis, many ports achieved limited, single-digit
handled 1.49 million teu, up 2% compared with
The AAPA argues that maintaining navigation
growth at best in container traffic, although
2010. Much like Los Angeles, this was due to a
channels to their required dimensions will help
breakbulk and automotive movements in many
marked improvement in the exports sector, with
make
cases were significantly higher.
increased shipments of agricultural products
US
exports
more
competitive the
The port of Los Angeles recorded a container
Administration and Congress continue to seek
throughput of 7.94 million teu last year, up
ways to reduce spending it is imperative to focus
from 7.83 million teu in 2010, consolidating its
scarce federal dollars in those areas, such as
position as the US’s busiest container port, but
seaport-related infrastructure, that can have the
with a fairly modest rise of 1.46%. This was
greatest impact on economic growth, job
largely the result of record-breaking container
creation
exports, which jumped by 14.5% over 2010.
internationally.
and
Mr
our
Nagle
adds,
current
“As
and
future
competitiveness in the global economy.”
The Port of Los Angeles plans to invest $1.5
The budget represents something of a victory
billion in capital improvements over the next
for the AAPA which has long argued that money
five years. One of the key projects for the port
collected for the Harbor Maintenance Tax should
is a significant expansion of the APL terminal,
be used solely for its intended purpose of
including the construction of a 380 metre-long
dredging navigational channels in US ports. It
berth that will be equipped with 12 new ship-to-
plans to continue to press this home. Mr Nagle
shore container cranes.
points out that currently importers and shippers
Los Angeles’ main West Coast rival for
pay around double the amount drawn annually
container traffic, the Port of Long Beach, fared
from the fund, leaving a $6.3 billion surplus.
less well in 2011, but this was mainly due
“Because this surplus has been used for other
to a decision of one of its tenants, California
The Port of Los Angeles continues to be the
programmes,” says Mr Nagle, “there are serious
United Terminals (CUT), to leave the port. This
leading container port in the US
theBaltic Spring 2012 www.thebaltic.com
83
Tuesday 24th, Wednesday 25th and Thursday 26th April 2012 Scandic Continental Hotel, Helsinki, Finland
arcticshippingforum.com
Informa Maritime Events is delighted to announce details of the 8th annual Arctic Shipping International Conference and Seminar 2012
For 10% Baltic Magazine discount quote VIP Code: FKT2287BMAD In 2012 the conference returns to Finland and Helsinki will again host this industryacclaimed, event which provides a gateway to the Arctic. The three day conference and one day seminar has grown in size and scope and offers attendees access to the industry’s latest information.
• Hear leading shipping industry speak about their strategies for operating in icecovered waters • Focus on experiences and voyage planning for the Northern Sea Route • Analyse the impact on shipping and commercial developments of climate change • Discuss the shipowner/operator and charterers’ perspectives on meeting the operational and regulatory challenges • Learn from the latest ship design options and technology for ice-going shipping and offshore operations • Benefit from an in-depth discussion on emergency response, safety issues and aids to navigation • Gain detailed knowledge of developments in ice navigation, ice management and simulator training • Update yourself on the latest developments in regulations for environmental protection and navigation in ice
For further information on the programme or to register your interest in attending please contact: Trina Chakravarti on: +44 (0)20 7017 6444 or email: trina.chakravarti@informa.com Organised by:
Official Publication:
US ports work to deepen the ports access channels to 48 feet (14.6 metres). The port authority says the project is necessary to prepare for larger container vessels which are expected to call at Savannah once the Panama Canal widening project is completed in 2014. Georgia’s nearest rival, the South Carolina Ports Authority (SCPA), closed its calendar year in 2011 with volume increases across most business segments. Container volume for calendar year 2011 was up 1.2% from 2010 at 1.38 million teu, while breakbulk tonnage in Charleston and Georgetown was up by a A computerised rendering of how Long Beach’s Middle Harbor project will look when completed
highly significant 54.9% in 2011 compared with 2010 figures.
helping lift the port’s containerised exports by
PANYNJ is also committed to a major
A key priority for SCPA in 2012 is to
around 11% last year. Most notably the export
infrastructure programme. Over $1 billion is
make progress on the planned 45 feet (13.7
of fresh or frozen potatoes through Tacoma
to be spent on raising the Bayonne Bridge, to
metres) harbour deepening project, which is
jumped by 106% compared with 2010 levels in
allow larger post-panamax ships to pass under
at the feasibility stage. The port authority has
response to growing international demand.
on the way to the port’s terminals; various
also recently approved $5.2 million in capital
Tacoma performed well in other trade
port road improvements and enhancements
improvements, including the construction of a
segments as well. Breakbulk cargoes were up
to ExpressRail, the port’s on-dock rail system.
new, $3.05 million warehouse at the Columbus
68%, automobile shipments rose 34% and log
Work also continues on a harbour deepening
Street Terminal to serve growing customer
exports jumped by 45% driven by demand
project which will be competed in Port Newark,
demand. This comes hard on the heels of major
in China. The total cargo tonnage moved via
Port Elizabeth and Port Jersey by the end of
investments totalling $23 million to improve the
Tacoma was up 5%, to 17.2 million tonnes, as
2012, facilitating access for larger container and
terminal, which serves the Port of Charleston’s
a result.
other vessel types.
non-container trades.
Over on the East Coast the dominant
Another US North East port, Baltimore,
Recent investment announcements for
gateway is the Port of New York/New Jersey
rebounded strongly from the recession by
Florida ports have also focused on non-container
(PANYNJ) which set an all-time record for cargo
handling a record numbers of containers and
shipping sectors. A 50-50 partnership between
volumes, surpassing the previous high set in
automobiles. The port moved 632,000 teu, up
the State of Florida and the Port of Tampa will
2007 before the start of the global economic
3%, and 446,400 automobiles, 12% higher than
enable the port to handle up to five million more
downturn. The 5.5 million teu handled in 2011
in 2010. The 515,400 tons of wood pulp imports
tons of petroleum products a year after the
represented a nearly 4% increase over 2010,
was also a record, while the 939,000 tonnes
completion of an expansion project in 2014.
strengthening the port’s position as the third
of ro-ro traffic was the second highest in the
largest box port in the country, behind Los
port’s history.
Angeles and Long Beach.
Further south the Georgia Ports Authority
term agreement whereby Stonerock will operate
(GPA) ports of Savannah and Brunswick also
the first large scale bulk metals export logistics
experienced a record-breaking year, handling
and shipping service out of the port. Stonerock
26.1 million tons of cargo, 4.3% higher than the
will receive the bulk metals by road, rail and
year before, and 2.95 million teu of container
sea and then store and load them onto its own
traffic, a 3.5% increase. Brunswick recorded
ships for carriage to major international steel
a 23% growth in automotive and machinery
companies in China, Malaysia, Turkey and other
shipments, another all-time record.
destinations. The operation, which will eventually
The GPA is pressing on with the Savannah Harbor Expansion Project, which will include
New York’s Port Elizabeth container terminal
Meanwhile, the Port of Palm Beach and Stonerock Shipping have entered into a long-
handle around 500,000 tonnes a year, is due to start later this year.
The federal budget for fiscal 2013 makes greater provision for harbour dredging works
theBaltic Spring 2012 www.thebaltic.com
85
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31/01/2012 16:50:20
Belgium
Strikes halted in Belgian ports In spite of recent industrial unrest figures for throughput were up last year
B
elgium’s ports went back to work
needed to establish LNG bunkering infrastructure
during the fourth quarter did not last. The recent
in February after strike action was
at the ports.
significant decline in the freight markets – and
called off at Antwerp and Zeebrugge,
“The Flemish ports authorities are optimistic
the capesize market in particular – is partly
although not before MSC was reported
about the potential for safe and efficient
due to the serious disruption in the export of
as saying that it might reconsider its investment
LNG bunkering operations and DNV’s multi-
Brazilian iron ore following local flooding and
in Antwerp.
disciplinary analysis will help them move forward
to the continuing growth of the world fleet. The
confidently,” says Mohamed Houari, DNV head
handysize markets, however, are much more
of solutions for Central Europe.
stable and are less prone to volatility.”
The dispute arose over pension grievances of port pilots, which are now being considered by a working group headed by minister Hilde Crevits.
“Shipowners are working hard to meet
In 2011 the Bocimar fleet was expanded
The port of Antwerp can ill afford disruption
the increasingly strict emissions requirements
with a total of 12 vessels: nine handysize, two
to its services. Estimates for 2011 said Antwerp
of the Baltic and North Seas and ports are
post panamax vessels in joint venture and one
handled 186.4 million tonnes of freight – an
now responding as the popularity of LNG is
capesize vessel.
increase of 4.6% compared with 2010, when the
becoming apparent,” says Torgeir Sterri, DNV
volume was 178.2 million tonnes. All-time records
regional manager Central Europe.
Bocimar says it expects the capesize markets to return to normal as soon as exports from Brazil reach their usual levels again.
were set this year for containers and liquid bulk,
Meanwhile, CMB announced its results in
with estimated volumes of 104,779,157 and
January with the consolidated result for 2011
“Taking into account the age profile of the
46,095,431 tonnes respectively.
estimated to be €96.3m compared to €120.9m
handysize world fleet, prospects for this type
for the previous year.
of market are more propitious and significantly
Conventional/breakbulk
freight
also
experienced growth: during the past year
Dry bulk operation Bocimar’s contribution to
more stable. Bocimar employs its handysize
12,772,956 tonnes of freight in this category
the 2011 consolidated result amounts to €76.1m
fleet mainly on the spot and short-term market.
was loaded and unloaded, 14.8% more than
compared to €94.8m for 2010.
Bocimar is endeavouring to protect itself from
the previous year. These growth figures show
Commenting on the results CMB said: “The
volatility in the markets by covering its fleet in
that the difficult situation in which this segment
strong recovery of the dry bulk markets seen
the medium term with blue chip counterparties.”
found itself has partially improved, the port says. “The Port Authority is therefore satisfied with the passage in the government agreement that states ‘the system of dock labour will be modified in consultation with the parties involved (the employers, union organisations, industrial relations mediators and port authorities) in order to modernise it’.” “This initiative should reinforce the competitive position of Antwerp, which is still the largest breakbulk port in Europe,” says port authority ceo Eddy Bruyninckx. Meanwhile, Norwegian classification society DNV has won a contract from the Flemish government for a feasibility study for the provision of bunkering facilities at Antwerp, Zeebrugge and Ghent. The work will consist of a market survey, a risk and safety analysis, and modelling of the logistics, legal and regulatory requirements
Zeebrugge port
theBaltic Spring 2012 www.thebaltic.com
87
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Canada
The good times are back for Canadian ports Most Canadian ports saw cargo throughput growth in 2011, with some recording very strong double-digit rates of increase
L
ast year was a very positive one for
There are further developments planned
volumes in 2011, handling close to 29 million
Canadian ports, as the country’s economy,
at the port of Nanaimo, on Vancouver Island.
tonnes of cargo in total, 18% higher than in 2010.
and in particular its export trades, staged a
Recently DP World Vancouver was selected by
According to Mario Girard, president and chief
strong recovery.
the Nanaimo Port Authority to operate its cargo
executive of the Quebec Port Authority (QPA),
On the West Coast, Canada’s largest and
terminals and plans include the development of
“This is an exceptional performance for the Port of
most diverse port, Metro Vancouver, has
short sea shipping services moving containers
Quebec. No less than four terminals – St Lawrence
released figures which show increases in
between the island and the mainland. The current
Stevedoring, IMTT-Quebec, Beton Provincial and
most key cargo sectors last year. Overall, Port
commodities handled at the three-berth Port of
Ultramar – all enjoyed an unprecedented year.
Metro Vancouver (PMV) handled 122.5 million
Nanaimo facilities include forest products along
This growth positions the Port of Quebec in first
tonnes of cargo last year, a 3.4% increase
with salt and kaolin. The facility also handles
position as far as tonnage handled in 2011 on the
compared with 2010. Its dry bulk business
cruise ship passengers at a newly built berth
St Lawrence is concerned.”
performed well, with new records set for coal
opened for the 2011 cruise season.
The versatility of the Port of Quebec’s
and potash, where volumes were up by 7.8%
Vancouver Island is one of the world’s highest
terminals, as well as the wide range of products
and 30% respectively. The forest products
population, non-road connected islands without
handled within the port, are considered by the
sector also produced record-breaking figures,
any lo-lo container terminal facilities, instead
port authority to be key strengths. QPA believes
with breakbulk lumber exports up 107% due to
relying on inefficient ro-ro services. The short sea
that traffic moving to and from the Great Lakes
strong demand in China.
shipping project will ensure greater connectivity
will present opportunities in years to come, as will
The port also reports growth in loaded
for trade to and from Vancouver Island. According
several mining projects in its hinterland. “The
export container volumes, as a result of stronger
to Bernie Dumas, president, Nanaimo Port
prospects for the future are very interesting for the
demand for Canadian products in Asian markets.
Authority, “The port wants to import and export a
Port of Quebec,” says Mr Girard. “We have every
Overall though, the port achieved a throughput
greater variety of commodities and our agreement
reason to believe that we will remain a hub in the
of 2.5 million teu last year, more or less the same
with DP World, with its extensive experience in
transshipment of liquid and dry bulk cargoes for
as in 2010.
both container and commodity handling allows
Eastern and Central Canada.”
According to Robin Silvester, PMV president and chief executive, “What we have seen in 2011
us to explore new business opportunities and to reduce our reliance on a single market.”
The QPA says it is committed to a significant programme of investment in new infrastructure to
is resiliency in the Canadian export market, and
While Vancouver is Canada’s dominant west
capitalise on these emerging opportunities, while
as international economies continue to face many
coast gateway, Prince Rupert Port in British
also improving and refurbishing existing facilities.
difficult challenges, Canada’s natural resources
Columbia is growing in regional importance. The
In total around CAN$40 million is expected to be
sectors stand as a cornerstone of the Canadian
Prince Rupert Container Terminal has proved a
invested in various projects during 2010. “From a
economy. Our natural geographical advantage
success story since it opened in 2007, offering
financial point of view this is probably the largest
as the closest major gateway to the Asia Pacific
direct intermodal rail connections to the Mid
series of investments related to harbour assets
regions presents continuing opportunities for
West. Last year the port’s container terminal,
since the construction of the Beauport area of the
growth in coming years.”
operated by Maher Terminals, handled 410,000
port in the 1960s,” suggests Mr Girard.
One of the biggest development projects
teu, up 20% compared to the year before. Plans
The Port of Montreal has also strengthened its
underway at present in Metro Vancouver is the
to expand the container terminal, and to increase
east coast market position, handling 28.5 million
so-called Gateway Infrastructure Programme.
capacity to around 2 million teu a year, are now at
tonnes of cargo in 2011, up 10% compared with
The port authority is collaborating with federal
the evaluation stage.
the 25.9 million recorded in 2010. Liquid bulk
and other industry partners to make a series of
Prince Rupert’s Radley bulk terminal, which
traffic was up by over 30% last year and container
infrastructure improvements designed to improve
mainly handles coal and coke, saw throughput
throughput was up 2.4%, to 1.36 million teu,
the supply chain, in the North Shore, South Shore
rise by 18% last year, to 19.3 million tones, while
consolidating Montreal’s position as Canada’s
and Roberts Bank areas of the port. Based on the
grain shipments were up 17% to 5 million tonnes.
second busiest box port after Vancouver. These
preliminary design of the projects, the total capital
Over on the East Coast, the leading multi-
positive trends were offset to some extent by
purpose port of Quebec achieved record cargo
a 7.5% dip in the volume of dry bulk goods
theBaltic Spring 2012 www.thebaltic.com
89
cost of the improvements is CAN$717 million.
Corporate viewpoint Canfornav
Canfornav W
hat do ducks and Canfornav’s bulk
worked with them to attempt to use this same
Sugar for placing its trust in us by awarding us
carriers have in common, apart from their
program to capture all the raw data needed to
a contract to carry sugar to Toronto for another
calculate and report our air emissions.
three years.
names? Both operate on the water with finesse
Comprehensive
Our ships service the St Lawrence Seaway
Canfornav has taken a special conservation
Emissions Performance Reporting Module
from the opening of the season. The first ship
focus by naming its ships after breeds of ducks.
(CEPR). Every day a series of reports are
in Toronto, the MV Tundra, made its maiden
This association with water and nature has
generated by each of our vessels. Masters
voyage to the lakes. The MV Whistler exited the
resulted in a strong determination to achieve
e-mail them to us, but at the same time the data
system on 27 December, 2011 just two days
greater sustainability and remain at the forefront
goes into the Ship Decision system, where it is
before the closing of the system for the winter
when it comes to environmental performance.
tabulated and analysed for subsequent reporting.
on 29 December, 2011.
As our vessels trade in the Great Lakes, it is only
On the business side, we were able to do
This year, we welcome to our fleet the MV
this without changing our internal structure. We
Scoter, which is being delivered from Yangfan
and refinement.
natural that the environment is our top priority.
Stelvio
conceived
the
As an active participant in the Green Marine
did not have to implement new software on our
shipyard, China, in March. One of two supramax
Initiative, Canfornav has to comply with its
vessels or even in the office. The new module
vessels joining us, its sister, the MV Pintail, is
emissions reporting requirements. This was
basically lets us monitor the heartbeat of each
already in service. Canfornav’s new building
initially done manually, but it soon became
vessel’s performance on a live day-to-day basis
program remains on schedule with 6 x 33,000
apparent that an automated system would be
and we can provide a carbon footprint to any of
dwt expected to deliver from mid-2012 to mid-
a huge benefit.
our customers who may require it.
2013 with another 4 x 36,000 dwt on order for
Stelvio had already provided us with the Ship
Canfornav is ready to face any new
Decision system, an off-line reporting system
challenges, trading the St Lawrence Seaway
that we use successfully across our fleet. So we
and Great Lakes, and wish to thank Redpath
delivery in 2013.
MANDARIN in the Welland Canal
90
theBaltic Spring 2012 www.thebaltic.com
Canada handled, which fell to just under 5.2 million tonnes, and also a 13.6% fall in non-containerised general cargo flows. Another Quebec port, Port of Sept-Isles, claims that 2011 was a ‘remarkable year’. Although the port registered modest growth of close to 4%, this took total volume to 26 million tonnes, a level not seen at the port since 1981. Increased iron ore shipments, totalling 22.8 million tonnes, accounted for most of the growth, with the Pointe-Noire terminal in particular boasting an impressive 49% increase in activity, handling a record 9.4 million tonnes. Significant infrastructure investment was also delivered last year to expand capacity at Sept-Iles. This included developments at the Relance and Point-Noire terminals, which involved combined capital spending in excess of CAN$60 million. A further significant increase in volume is expected as a result of these investments. “With a projected volume of 34 million tonnes in 2012,
Roberts Bank terminals, part of the Gateway Infrastructure Programme development plan
we expect to reclaim our position as Canada’s second largest port,” says Pierre Gagnon, its challenges await us again this year as we begin
Algoma partners with farmers
CSL bulk carrier order continues to grow
construction of a multi-user berth to meet the
Prairie farmers are to become owners of
Canada Steamship Lines (CSL) has extended
growing needs of current and future users.”
ships that move their wheat on the Great
its newbuilding programme by exercising
Last November the Port of Sept-Iles became
Lakes, under an agreement reached last year
an option on two new self-unloading bulk
the first in North America to get all terminals and
between the Canadian Wheat Board (CWB)
vessels, bringing to four the number of
users to sign on to the Green Marine environmental
and the Algoma Central Corporation.
ships on order. The Montreal-based Great
president and chief executive.” A number of
programme, while more recently the port has
The CWB is purchasing two new lake
Lakes-Seaway carrier has two self-unloading
become only the third in North America to
vessels that will be ready for service in 2013-
Lakers currently under construction at
join the international Green Award programme.
2014, as part of a larger purchase by Algoma,
Chengxi Shipyard in China, scheduled for
This seeks to recognise and encourage vessels
which is buying a total of two gearless
delivery in the autumn.
certified
environmentally-sound
and four self-unloading bulk carriers of the
The newly announced vessels will enter
practices and environment-friendly technology by
same design. All eight Equinox class vessels
service in the spring of 2013. CSL has
offering discounts on harbour fees.
as
having
are being built in China at the Nantong
also indicated that it has options for four
Coast
Mingde Heavy Industries shipyard and will be
additional vessels for delivery during the
gateways, including both the port of Saint
faster, more fuel efficient and environmentally
2013 shipping season.
John and Halifax, fared less well than those
friendly than existing tonnage. The CWB and
The 35,500 dwt self-unloaders will
in Quebec. Saint John’s total cargo volume
Algoma ships will be operated by the Algoma
measure a Seaway maximum 225.6m by
edged up slightly, from 30.45 million tonnes to
division, Seaway Marine Transport.
23.8m, and will feature custom hull design
Other
leading
Canadian
East
31.01 million tonnes, largely as a result of higher
According to Algoma president and
for increased cargo lift, EPA Tier II compliant
liquid bulk shipments. Dry bulk cargoes were,
chief executive, Greg Wright, “These are
main engines, automated cargo handling
however, down, from 1.08 million tonnes in 2010
truly important vessels as they will set new
equipment and advanced environmental and
to 0.93 million tonnes in 2011.
standards for environmentally sustainable
safety systems.
At the Port of Halifax, overall port tonnage
shipping on the Great Lakes.” It has recently
CSL sister company CSL International
was down by 0.3% compared with 2010, to 9.49
been announced that the six Algoma Equinox
(CSLI) also has three 71,900 dwt Panamax
million tonnes. Container throughput fell 5.7%, to
ships will be fitted with Wärtsilä scrubbers
vessels on order at Chengxi. All of the ships
410,649 teu, while breakbulk cargoes, including
that will remove 97% of the sulphur oxide
will share similar design and technology,
forest products, reduced by over 11% against
emissions generated by the vessels’ engines.
and collectively will be known as Trillium
2010 levels. More positively the port’s bulk traffic,
Last August Algoma brought into service
including oil and grains, was up by 3.1%.
Class vessels.
the 35,000 dwt Algoma Mariner, the first
CSL and CSLI are divisions of The CSL
The container traffic figures in particular are a
completely new Canadian flag bulk carrier to
Group of Montreal, the world’s largest owner
disappointment for Halifax, after a strong recovery
start trading on the Great Lakes in 25 years.
and operator of self-unloading vessels.
in 2010 when throughput was up by 26%.
The vessel, built by the Chengxi Shipyard
The Group delivers more than 80 million
The exposure of east coast ports to weak
in Jiangyin, China, carries dry bulk goods,
tonnes of cargo annually for its customers in
demand in Europe appears to have undermined
including iron ore, coal, salt, aggregates and
the construction, steel, energy and agri-
containerised export levels, and this will probably
grain on the Great Lakes-Seaway system.
food sectors.
continue to be the case for 2012 as well.
theBaltic Spring 2012 www.thebaltic.com
91
Maritime law
Swedish briefing Mixed fortunes for insurers, plus changes at the top of Sweden’s law firms
O
ne case that is likely to attract the
The Rena has been the subject of ongoing
attention of lawyers from some time
salvage operations, not least to remove
to come is that of the containership
containers from the ship.
Rena, which is entered with the
Announcing The Swedish Club’s results before Christmas, managing director Lars
Swedish Club. Costamare Shipping, owners of the Rena,
Rhodin pointed to a year of mixed fortunes.
like other clubs, an upturn in claims. “The Swedish Club continued to grow throughout 2011 and, certainly, the attainment of the 50 million gt mark is a significant achievement. “At the same time, on a broader front, all International Group Clubs have seen a
In his report to the club’s board, Mr Rhodin
recent upturn in claims severity as well as
13 members of the International Group of
gave his overview of progress, with the club
frequency. Additionally, claims inflation is also
Protection and Indemnity Clubs, responsible for
reaching the 50m gt mark for registered
gaining ground. While it is too early to draw
shipowners’ third party liability risks worldwide.
tonnage, but on the other hand experiencing,
conclusions from these emerging trends, the
A team of English and German qualified lawyers, dedicated to serving the international maritime industry.
FLEET HAMBURG LLP, WiLLy-BRAndT-STR. 57, 20457 HAMBURG, GERMAny PHonE +49 (40) 5 700 700 FAx +49 (40) 5 700 70 200 WWW.FLEET-HAMBURG.coM
92
theBaltic Spring 2012 www.thebaltic.com
Image by thomasfuer / photocase.com
are members of The Swedish Club, one of
Maritime law overall
situation
does
require close monitoring. “Nevertheless,
The
Swedish Club is benefiting from a positive momentum with a continued positive feedback and
from
from
owners
the
broking
community,” he added. The club agreed a general increase of 5% for the 2012-2013 P&I policy year, in addition to
changes
to
cover
group reinsurance costs. Deductibles are to be increased
with
$1,000
in respect of cargo and crew claims. In the case of FD&D, a general Increase of 5% will apply, together with
an
increase
in
standard deductibles from $7,500 to $10,000. Mr
Rhodin
commented:
“These
increases are much in line with claims inflation and do not contrast with other
© svitzer
leading members of the International Group of P&I
The Rena breaks up off the coast of New Zealand
Clubs. This is a prudent approach. The increases reflect the current
There has been a drive in recent times
for the continued development of the firm’s
realities in the market: an upsurge in claims
to generate interest from Danish businesses
dispute resolution practice. I feel inspired and
frequency and severity, together with claims
wishing to establish themselves in Sweden,
hope to contribute to the development of
inflation now in the 3-5% range.”
and this in turn has been providing legal
MAQS’ dispute resolution practice, while I
There have been a number of changes at
business for Swedish law firms. MAQS Law
shall primarily focus on work as arbitrator in
the top of Swedish law firms operating in the
Firm Advokatbyrå, which has offices in Malmo
international cases.”
maritime industry in recent months.
and Copenhagen, has been helping the Danish
Setterwalls is another local firm that is
authorities put together material targeting
strengthening its expertise in the dispute
business that want to set up in Sweden.
resolution field. The company hired Jesper
Advokatfirman Lindahl, one of Sweden’s largest law firms, appointed Mikael Smedeby
Grünbaum, formerly a partner at Wistrand,
from Lindahl’s Uppsala office as the firm’s new
MAQS has also been expanding its services
managing partner while Vinge announced that
in the Nordic region, and currently has offices in
Maria-Pia Hope has been appointed as the
Stockholm, Gothenburg, Malmö, Copenhagen,
Dispute resolution is one of Setterwalls’
new managing partner in Stockholm to replace
Tallinn, Riga and Vilnius. Dispute resolution
largest practice areas. The litigation group
Michael Wigge, who has been managing the
is one of the areas in which MAQS has
specialises in dispute resolution and conflict
firm since 2007.
strengthened its position in recent years and
management and has long experience and
Lindahl recently announced figures showing
Hans Bagner, one of the founding partners
solid competence in litigation, arbitration
that it continued to grow with a turnover for
of Swedish law firm Vinge, joined the firm at
and mediation.
2011 that amounted to SEK607 million. “This
the beginning of the year to strengthen its
implies that Lindahl now is twice as big as it
litigation department.
before Christmas.
Backed up by the legal know-how and industry expertise of the other practice groups,
was five years ago. At the same time our growth
“Hans will be an immense addition to our
the litigation team advises on everything from
strengthens my belief that it is competence
dispute resolution practice. He is a renowned
risk assessment and strategic planning to
paired with our no-nonsense approach in our
Swedish lawyer with a global network, and
managing the entire range of commercial law
communication that is appreciated by clients,”
with him we can develop and transform our
disputes. The aim is always to identify
Mr Smedeby said on his appointment.
international presence,’ said managing partner
commercially viable and well-prepared solutions.
The increase in turnover in 2011 was 7%
Torbjörn Lindmark.
compared to 2010. Lindahl currently employs
Mr Bagner commented, “MAQS has an
250 lawyers and a total of 370 employees at six
established presence in Sweden and the Nordic
offices in Sweden.
region, which should serve as a solid foundation
theBaltic Spring 2012 www.thebaltic.com
Amongst its clients are both Swedish and foreign companies, organisations, public authorities and municipal companies.
93
Insurance parlance
Reducing claims The UK Club introduces its bow tie approach while liquefaction continues to concern
A
fter much study and only after in-depth
“How can we reduce the frequency of these
trials with certain shipowners, the
‘accidents waiting to happen’? What ‘controls’
UK P&I Club is now launching an
should we be looking at to ensure the ’threat’
innovative risk management scheme
is contained and an ‘incident’ does not occur?” The
utilising a ‘BowTie’ approach to identifying
Club’s
approach
offers
strategic
areas of risk and minimising the occurrence of
guidance to owners and operators on tackling
incidents. The Club’s loss prevention director,
the root cause of expensive claims. Using
Karl Lumbers, explains:
quantified real-life case examples, owners and operators are able to invest proportionately in
“Working with those members who wish
risk management and loss prevention activity.
to identify the various threats to the smooth (claim-free) running of their vessels, we conduct
The detailed reports and reviews enable
reviews on those areas which may cause
information to be shared across the fleet and
claims. Thomas Miller, the manager of the UK
operational departments, enhancing credibility,
P&I Club, has access to an incomparable
co-operation and effectiveness. The result will
amount of claims data resulting from extensive
be a consistent and inclusive approach that
analysis of previous incidents over a period of
encourages sustained and measured loss
23 years and it is this that has enabled the Club
prevention activity over the longer term.
to identify ‘threats’, ‘consequences’ and
Teamwork and focus assists with Port State
‘controls’, the foundations of developing
Control compliance, speeding up that process
BowTie reports on individual vessels.”
and reducing the delay to ships and the burden
As an example, on one vessel, a panamax
on masters and crew during port calls. The
bulk carrier, five ‘hazards’ were selected as
transparency of approach enables owners and
being the most frequent liability claim areas
operators to demonstrate good practice to their
seen by the Club. These were:
customers, contractors, maritime agencies and
• Crew hazardous activities – personal injury
other third parties. Mr Lumbers reports that several members
• Carriage of cargo by sea – cargo damage • Ship in transit – collision/grounding damage
Karl Lumbers
who have been briefed on this BowTie approach have been enthusiastic and have
• Ship/crew actions – third party property common threats, which if not contained could
requested surveys that they can consider and
cause an incident; and 450 controls which
discuss amongst their management teams and
damage.
need to be in place and effective if the threats
sea-going employees. He concludes:
Following an extensive on-board survey,
are to be contained. He states:
damage • Carriage of pollutants by sea – pollution
“With this system you can also look beyond
‘threats’ relating to all five hazards were
“Although 60% of UK Club claims are
its primary role (for the Club and owners),
assessed, ‘controls’ that needed attention were
caused by ‘human error’, human error is often
namely the reduction in claims levels, to the
identified and recommendations for changes in
only ‘the straw that breaks the camel’s back’ –
bigger picture. It should always be remembered
working practices were proposed to the master
the last event in a chain of causal events.
that behind so many claims are incidents
“These causal events can normally be
that lead to serious bodily injuries and loss of
According to Mr Lumbers, while analysing
traced back to failures in one or more areas of
life. For those affected, including families and
claims dating back many years, the UK Club
ship operation; we sometimes refer to them as
friends of the victims, anything that helps make
has identified seven primary risk hazards; 76
‘accidents waiting to happen’.
life safer at sea has to be welcome.”
and owner/manager.
theBaltic Spring 2012 www.thebaltic.com
95
Insurance parlance Cargo liquefaction The loss-prevention department of the North P&I Club has marked the start of 2012 with a renewed campaign to warn shipowners of the potentially lethal dangers of cargo liquefaction. The club’s latest issue of its loss-prevention newsletter Signals is accompanied by a new safety poster and information sheet on the topic. “The loss of the bulk carrier Vinalines Queen on Christmas Day and three bulk carriers a year earlier, with consequent loss of seafarers’ lives, is a stark reminder of the catastrophic consequences that can arise from loading liquefiable cargoes,” says North’s head of loss prevention, Tony Baker. “In reality there are very few ships that can safely carry a bulk cargo that can change from a solid to a liquid state. Until our knowledge of the behaviour of liquefied cargo and its impact on ship stability improves, shipowners and masters must take all proper precautions when presented with such a cargo for carriage.” The International Maritime Solid Bulk Cargoes Code, which became mandatory a year ago, identifies the steps that should be taken when carrying cargoes that can liquefy. North
has
previously
published
comprehensive guidance and advice to its members on liquefaction risks. This includes a
Tony Baker
10-page loss-prevention briefing on the topic in March 2010, along with more specific briefings on carrying nickel ore and iron ore fines – the two cargoes apparently involved in the six liquefaction tragedies that have occurred during the last two years. Repeated warnings and recommendations have also appeared in Signals and its online Industry News pages. The latest initiatives include a new A3 colour poster – the first in a new series of ‘Cargo Wise’ posters designed for use on members’ ships – and an A4 ‘Hot-Spots’ quick-reference, illustrated information sheet for ships’ officers and shore-based managers. Both
provide
timely
reminders
about
the importance of not loading potentially liquefiable cargoes without a valid shipper’s declaration together with supporting certificates of transportable moisture limit and moisture content. ‘Can tests’ should be performed throughout loading along with simple visual checks for any signs of splattering. If masters are in any doubt, North says, they must stop loading and seek additional advice. “Masters need to remember that the risk of liquefaction is a fundamental ship safety issue. As such they are fully backed by the International Convention for the Safety of Life at Sea part V regulation 34, which sanctions any decision necessary in their professional judgement for safe navigation,” says Mr Baker.
96
UK Club risk management: keeping the tiger caged
theBaltic Spring 2012 www.thebaltic.com
ITIC
What’s in a name? Andrew Jamieson of the International Transport Intermediaries Club explains how legal issues created by inaccurate or erroneous names can often give rise to costly and protracted litigation
I
n the case of the Sibohelle, the brokers had
company as the ‘T/C owners’ and (iii) that
Sailor not sunk. The owners wanted to rectify
recorded the claimant’s parent company, and
the brokers did not have instructions or authority
the charter party to show the correct company
not the claimant, as the vessel’s ‘T/C Owners’.
to enter into a contract on behalf of the
while the charterers (presumably wanting a
The reason given for the error was that the
parent company.
contractual party with an asset) refused.
broker had consulted an industry website to
The first question considered by the High
In an industry in which the use of single-
obtain details of the Sibohelle. The website
Court was whether the naming of the parent
purpose companies is common, the identity of
erroneously named the parent company as the
company as the ‘T/C Owners’ meant that no
the people behind the venture is often regarded
vessel’s time-chartering owner. The error was
contract had come into existence at the time of
as commercially more important than its precise
repeated in the broker’s recaps, and was not
the recap as the brokers did not have authority to
legal style. In The Double Happiness the owners’
spotted and corrected. No formal charter party
act for the parent company. The court held that
brokers told the charterers’ brokers that the
was ever signed or drawn up.
no contract had been concluded at that stage.
vessel being fixed was controlled by a well-
The fixture was performed. The identity used
In the majority of cases dealt with by
known group but did not name any particular
in post-fixture matters was inconsistent. Notices
International Transport Intermediaries Club (ITIC),
company as the owner. While this approach may
of Readiness were accepted in the name of
the fixture will not have been performed. In the
reflect what is commercially important, getting
claimants, while statements of facts named the
Sibohelle, the court went on to consider whether
the correct style right is essential if disputes are
parent company as the time charterers. Finally,
a contract had been formed by conduct,
to be avoided.
the freight invoice was issued on the parent
because the voyage had been performed and
In the cases handled by ITIC, it is unlikely
company’s paper but specifically stated that the
freight paid to the claimants. The judge found
that anyone has set out to practice deception,
amount was due to the claimant whose bank
that such a contract had been concluded and
they are simply occasions on which no-one
account was identified. The freight was paid to
the matter was remitted to the arbitrator.
has really got to grips with the issue. Vague
In the Sibohelle, the origin of the misnaming
company names or the use of initials can make
The issue that gave rise to the proceedings
was the broker’s use of information obtained
it difficult to establish the legal party responsible
was a demurrage claim of over $320,000. The
from a website. Sometimes the mistake can be
for the fixture. As was the case in the Sibohelle,
claimant had commenced arbitration against the
a simple error. In The Rhodian River and The
a variety of descriptions may be used pre and
voyage charterers but the case had been struck
Rhodian Sailor, separate one-ship companies
post-fixture. Such inconsistencies will be seized
out by the arbitrator because the fixture had
owned the two vessels and the same brokers
upon by lawyers to try to extract their clients
been made between the parent company and
acted for both companies. After the fixture
from the fixture. ITIC has in the past dealt with
the voyage charterers. The claimant challenged
of The Rhodian Sailor (owned by ‘the Sailor
disputes involving the correct translation of
the arbitrator’s ruling.
company’) was agreed, the charterers’ brokers
Arabic and Chinese company names. In these
The application to the High Court was made
asked for the full name of the owners and
cases the charter party had not been performed
on the basis of three factual assumptions.
the owners’ brokers mistakenly gave them the
and the owners were alleging that the broker
These were (i) that the claimant had instructed
name of ‘the River company’, which owned The
had fixed the ship to non-existent companies. As
the brokers to fix the vessel (ii) that the brokers
Rhodian River. This would probably not have
in many fixture disputes, a little attention to detail
had made a mistake when naming the parent
been of much significance had the Rhodian
at the time of fixing would have paid dividends.
that account.
theBaltic Spring 2012 www.thebaltic.com
97
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www.rosneftmarine.com Address: One Kingdom Street / Paddington Central / London, W2 6BD Tel. +44 (0) 203 402 3633 Fax. +44 (0) 203 402 3501
Legal news
Should the seas stay free? Under the doctrine of mare liberum, environmentalist Eelco Leemans argues that building a coherent and enforceable legal framework to protect the environment is compromised, as Julian Macqueen reports
E
elco Leemans maintains that the
even though the accidental spillage of oil
management of the ship in their registries”. The
freedom of the seas doctrine is not
from their ship was not their fault. Marine
role of shipowners is key.
fit for purpose. Is it time, he says, for
litter, ships’ ballast tanks which can spread
“This status quo is maintained by the shipping
mare restrictum?
invasive species to other marine environments,
companies, which determine the tonnage a flag
underwater noise and ship-breaking are all the
state represents.” In this way shipowners “can
focus of the green lobby.
play an important role in accepting or preventing
The object of his concern – the world’s
oceans. Shared between all nations, marine life and the shipping industry, he believes they are not getting the protection they deserve.
But in contrast to the mounting sense of urgency surrounding marine pollution, action
the entry into force of regulation that is essential for the protection of the marine environment”.
A shipowner reading this might dismiss his
is being hampered by outdated legal notions
Legal instruments – such as Marpol – exist
argument, after all, isn’t the industry swamped
and the nature of the system for controlling the
to protect the marine environment. However,
with regulations and getting more so with each
ships themselves.
measures to combat pollution – the Marpol
passing year? True, regulations cover all manner
The stumbling block is down to another
of shipping operations – from the treatment of
Dutchman, jurist Hugo Grotius, who devised the
ballast water to watchkeeping. According to
17th century doctrine of mare liberum.
annexes – can be subject to interminable delay before they enter into force. “When Annex VI (on air pollution) entered into
Leemans, who heads the Clean Shipping
“Grotius considered the right of free passage
force in May 2005, the shipping companies that
Coalition at the IMO, the 1990 Oil Pollution Act in
a necessary precondition for international trade,”
dominate the flag states’ registries that control
the US that followed the Exxon Valdez spill, and
says Leemans. Therefore, Grotius reasoned, no
some 45% of the shipping tonnage worldwide
the measures put in place in Europe after the
country should be allowed to control the high
managed to hinder its entry into force for eight
1999 Erika oil disaster, are good as far as they
seas. Mare liberum remains a leading principle
years,” says Leemans.
go, but they do not go far enough.
of the international law of the sea.
“All these and other legislative measures have not been able to eradicate the negative
This has important implications when coastal states act to protect their seas and coastlines.
This is because annexes require two thirds of parties comprising not less than 50% of the merchant fleet gross tonnage to enter into force.
effects of the international maritime trade. Global
When Spain closed its ports to single-hull
Most pollution from ships takes place out-
regimes do not in themselves offer sufficient
oil tankers following the Prestige incident, it
of-sight on the high seas making enforcement
guarantees for safeguarding the oceans from
provoked a “barrage of criticism” on the grounds of
“problematic”. But even though that is the case,
ship-source pollution,” he believes.
inconsistency with the international law of the sea.
the principle of mare liberum doesn’t help.
The crack in what should be a solid wall
Coastal states can and do act to protect
This concept “still seriously limits effective
protecting the seas is, according to Leemans,
their marine environments but mare liberum is a
enforcement of the regulation of various, often
“lack of enforcement” and “the weak link between
constraint on that action.
untraceable, ways in which ships damage the
ownership of a vessel and its flag state”. A large proportion of the world’s tonnage is registered under non-EU flags. The trouble
“The application of the pollution standards of the coastal state must not have the practical effect of denying ships innocent passage,” he says.
with these registries, he says, is that standards
If a ship’s right of passage on the high seas
vary. This, makes “it easier – and cheaper – for
can come into conflict with a state’s right to
shipowners to register”.
protect its coastline, the system for registering
“Between flag-states, there are substantial
ships also leaves a lot to be desired.
oceans”, argues Leemans. Mare liberum, along with the system of open registers, needs to be evaluated, he says. Is shipping at the start of a new regulatory era, mare restrictum? This is a shortened version of the argument
differences in the control of ships,” notes
The way the open registries operate is “an
Leemans. He suggests that such a lax system
important reason for the slow progress in setting
might be of benefit to shipowners but it does the
strong international regulation of pollution and
Restrictum? Challenges for the Maritime Industry
environment no favours at all.
establishing the necessary enforcement of these
by Eelco Leemans and Thomas Rammelt, from
rules”, argues Leemans.
The World Ocean in Globalisation edited by Davor
The Erika oil spill signalled the start of a tougher attitude to pollution from coastal
Open registry states are unlikely to be
states. The officers of the tanker Hebei Spirit
counted among those “states with ambitious
in Korea were arrested by the authorities
goals in the field of environmentally-sound
theBaltic Spring 2012 www.thebaltic.com
presented in the essay, Mare Liberum or Mare
Vidas and Peter Johan Schei, (Leiden/Boston: Martinus Nijhoff Publishers/Brill, 2011).
99
Commercial profiles
Orient Project Shipping (Singapore) Pte Ltd A
fter 21 years of flying the Coli flag, the com-
is the perceived satiety, current and future, or
scurrying behind ( the two are inextricably linked
pany re-branded on 31 December 2011 and
where financial uncertainty raises the bar on
in a patron-client relationship).
is now Orient Project Shipping (S) Pte Ltd. This
required returns, making investment non-viable
The exciting prospect is Africa. It is
reflects an earlier adjustment to shareholdings
in the short term. In a non-command economy
geographically blessed, facing the developed
which were effected mid-year, and that now
capital investment is rarely undertaken evenly
economies of Europe and the Americas, as
sees the company fully-owned in Singapore by
and follows bell-curve peaks and troughs with
well as the tiger economies of south and south
the existing management.
demand ever-trailing installed capacity. On a
east Asia and Australia. Moreover, it straddles
However, this is the extent of the change;
global basis this may be expected to level out
the important north-south divide and it is where
the company continues to offer a boutique
– as one invests less the other more. However,
political, social and economic conditions –
project and heavy lift shipbroking platform,
increased globalisation means increased inter-
assisted by burgeoning mobile phone coverage
which includes the agency of the specialist
dependency and such investment decisions
and the world’s hunger to develop untapped
Carrier Biglift (www.biglift.com), in Asean, ie
have a tendency to fall into step, meaning
resources – are changing the shape and
Singapore,
periods of plenty (2007-2010) permute into
expectations of a continent. Tigers may yet
periods of want (2011-?).
return to Africa and prove to be every bit as
Indonesia,
Malaysia,
Brunei,
Thailand, Philippines, Vietnam, Cambodia, Laos and Myanmar, although Project Orient’s reach
An equal influence on demand is technological
Project shipping is predicated on capital
substitution, both of commodity and source
expenditure, whether this is for the expansion of
of supply (one need only look at the impact of
existing facilities or the development of new. The
landlocked Mongolia in this respect). The energy
focus is largely directed at the extraction and
market, which is the building block of economic
refining of resources, within this category we
growth, is impacted by all. Power generation
include the harvesting of energy from fossil fuels
has historically been coal and oil-fired although
and the elements (sun, wind, and wave).
LNG is increasingly important. Hydro-electric
The current turmoil in financial and commercial
has geographical limitations (and increasingly
markets is impacting on all the shipping sectors
environmental concerns); nuclear – the current
and while the project market has held up far
environmental bad boy – has come and gone
better than the wet or bulk trades, there are
and is waiting in the wings to be re-introduced,
worrying signs of storms looming. Investment
while windpower is in the ascendant.
is predicated on financial stability and market
Much investment has gone into LNG
predictability and currently there is little evidence
processing and it has been an important
of either – currencies are under pressure, while
supporter of the project market. However, with
inter-bank lending and project financing are
the discovery of ubiquitous unconventional
becoming more selective.
sources (ie shale gas) this market stands at a
Developed economies are under strain
crossroads, although increasing environmental
with demand falling, and emerging economies
concerns about the recovery of shale gas may
are feeling some of that backlash while
mitigate in LNG’s favour. Equally, wind power,
simultaneously contending with the problems
which supplies a huge amount of seaborne
caused by their own rising wealth-inequality and
trade, relies heavily on subsidies and were it
asset inflation.
forced to compete on a financially even playing-
Most
global
resilient as their Asian cousins.
advance combined with political whim and
and remit is global.
indicators
have
negative
sentiment going forward and that is quite apart
field could well become a shadow of its current importance.
from the shipowning/operating community’s
Finally, it is worth noting the influence of
self-inflicted wounds caused by flotillas of
infrastructure companies (EPC/EPCM) domiciled
new tonnage streaming onto the market to
outside the traditional preserves of Europe, North
exacerbate supply side pressure.
America and Japan. New entrants from tiger
It is not that world trade is diminishing
economies, perhaps with different commercial
nor that the imperative of growth has been
imperatives and of a mildly protectionist nature,
removed – the global population continues to
are cutting swathes through market accessible
expand and human expectations are seemingly
project cargo.
limitless – rather that certain pressures have the
So from where may we expect deliverance?
capability to reshape demand and impact on
Certainly China will continue to be the dominant
Managing Director – Orient Project Shipping (S)
the project shipping sector. The principal culprit
driver in the project shipping scene, with Australia
Pte Ltd
100
theBaltic Spring 2012 www.thebaltic.com
Patrick Evans
Commercial profiles
Fednav Limited F
ednav Limited, headquartered in Montreal, is a privately-owned shipping company and the
largest international dry-bulk shipping group in Canada. Together with its associated companies, it engages in several areas of transportation: ship owning; ship chartering for short and longterm periods; marine transportation of bulk and breakbulk cargoes worldwide, including the Canadian Arctic; ice navigation services; stevedoring at terminals owned and operated by the Group; and provision of logistics services including warehousing and ground transportation. The Fednav Group directly employs 250 office staff worldwide, with about 145 in the Montreal headquarters and remainder in commercial offices located in Antwerp, Brisbane, Charlotte,
of Japan – two Ice-Class 1C Handy-size Lakers
on the US East and Gulf Coasts and in the
Hamburg, London, Rio de Janeiro, Singapore,
for delivery in 2012 and four Ice-Class 1C
Great Lakes, providing bulk and general cargo
and Tokyo. Another 1,200 personnel work under
Supramax bulk carriers for delivery in 2013-2014
handling and warehousing services to customers
contract on the Group’s owned vessels and in
– as well as six of a series of eight Ice-Class
worldwide.
its terminals.
1C Handy-size bulk carriers from the Ouhua
Fednav Group Business Units include Fednav
Fednav Direct offers comprehensive oncarriage transportation management solutions
Shipyard of China for delivery in 2012.
including warehousing and just-in-time delivery.
International Ltd (FIL), a wholly-owned subsidiary
Fednav has been active in the Arctic since
of Fednav Limited, responsible for the Group’s
the early 1950s when it carried components of
Fednav is aware that its activities impacts
international freight activities. Although FIL has
the DEW line system, and today it owns and
the environment and is therefore committed
significant experience trading in and out of the
operates the only ice-breaking bulk carriers
to conducting its business in an ethical and
St Lawrence River and the Great Lakes, where
in Canada. The Group transports about two
sustainable way. It is dedicated to continuously
it is the largest deep-sea operator, it services
million tonnes annually and offers year-round
improving operational performance in order
international trade routes with its fleet of about
service in northern waters. Offering support to
to reduce its environmental footprint. It is
75 Handysize, Supramax, and Panamax-size
the Group’s projects, Enfotec Technical Services
committed to conducting business thoughtfully
vessels. Transporting roughly 28 million tonnes
Inc, a subsidiary of Fednav Limited, specialises
and conscientiously with an aim to prevent
of cargo per year, the combination of long and
in providing ice analysis and vessel routing
pollution and safeguard the natural environment.
short-term charters, including 29 ships owned
services for ships operating in ice-covered
Fednav was the first shipping company
by the Group, and a great number of ice-class
waters. The Group is the leading carrier in the St
in Canada to make its environmental policy
ships, allows FIL to be able to ensure a reliable
Lawrence and other ice-covered regions through
accessible online and is a founding participant
service for its customers, while maintaining
winter months and is able to offer customised
of Green Marine, a voluntary, Canada-US
operational flexibility.
solutions developed with the mining industry and
environmental programme covering the Great
community partners in Northern regions.
Lakes-St Lawrence corridor
The Group currently has 12 vessels on order including six from the Oshima Shipyard
Federal Atlantic Lakes Line (FALLine), a
The Group’s objective is to continue to
division of Fednav
develop the niche markets in which it has built
International
Ltd,
significant expertise while diversifying in related
operates a steel
areas. It believes that the maintenance of strong,
and general cargo
long-term relationships with customers, partners
liner service from
and suppliers is critical to its success and that
North
European
the profitability of the Group is directly related
ports including the
to the challenge and satisfaction that employees
Baltic to ports in
derive from their work.
the St Lawrence
Fednav is committed to providing consistent,
River and the Great
high-quality service with an aim to be the carrier
Lakes.
of choice.
Federal Marine Terminals is
a
(FMT)
fully-owned
subsidiary Fednav
of
Limited.
The Fednav Group 1,000 de La Gauchetière Street West Suite 3500 Montreal, QC H3B 4W5
FMT
operates
Tel: +1 514.878.6500
twelve
terminals
info@fednav.com
theBaltic Spring 2012 www.thebaltic.com
101
Commercial profiles
Rosneft Marine poised for growth in 2012 and beyond I
n 2010, Rosneft Marine UK was established as the international trading office of Rosneft Oil
Company’s marine fuel division. Rosneft Marine UK has been tasked with expanding Rosneft’s marine fuel business and is in line with the company’s commitment to provide access and support to its customers throughout the world. The company focused on growing its fleet in 2011 and received two modern barges in Tuapse and Murmansk. It aims to continue this process by adding vessels in the ports of St Petersburg and Arkhangelsk in the months to come. This will boost the efficiency of its fuel deliveries at St Petersburg, which is the main shipping gateway between Russia and the Baltic Sea. In addition, Rosneft Marine is planning to introduce a 6,000 deadweight tonne (dwt) tanker to meet the growing demand for bunkers in ports in the Far East.
price than in any other major port in the region.
“2011 was an extremely successful year for
In 2012, Rosneft Marine will be positioning
Rosneft Marine as we implemented many of our
Vladimir Brezhnev, director of Rosneft Marine
itself to explore the Chinese market with supplies
strategic plans to grow Rosneft’s bunkering
UK, said: “Rosneft Marine has made a number
of DMA, which is in strong demand in the
division. We managed to both increase our
of investments in the last year to modernise
Chinese North-Eastern and Eastern provinces.
operational capacity as well as extend our global
our fleet and increase our operational capacity.
It is also examining plans to open an office in
network and grow our coverage for our
We intend to continue this trend and are
Beijing with Chinese-speaking staff to better
customers,” Mr Brezhnev said.
constantly seeking to improve our control of the
serve its Chinese clients.
supply chain.”
“This year we intend to focus on implementing
Rosneft Marine believes that there is strong
better standards throughout our supply chain. By
As part of its goal to form more strategic
demand for high quality low-sulphur fuel oil
continuing to build on our strengths and improve
alliances with global partners, Rosneft Marine
(LSFO) in the Mediterranean and is looking for
our operations, we believe that Rosneft’s success
signed an agreement with Sakhalin Energy
potential partners in the region.
in bunkering can only grow,” he concluded.
Investment Company (SEIC) in October 2011.
Since 2008, Rosneft has gone from strength
The agreement is for Rosneft Marine to supply
to strength and become a leading player in
SEIC’s fleet of three crude tankers and five
the Russian domestic bunkering market. The
LNG carriers in the Russian Far East port of
company has recorded steady growth since its
Nakhodka. To better service this agreement,
inception and signs suggest that it will continue
Rosneft Marine intends to add a 5,000-6,000
this successful trajectory in the years to come.
dwt ice-class barge that can supply fuel directly to the ports on Sakhalin Island. The agreement with SEIC marks Rosneft Marine’s first term formula contract and has been followed by term formula contracts being negotiated with other major players in the shipping industry. Term formula contracts are favourable to both the supplier and customer as they not only guarantee that volumes will be supplied but also that they are at a fair price for both parties. Rosneft is the only supplier in the Russian Far East that is able to guarantee volumes, as it controls the whole supply chain from the oil well to the barge. This has made it an attractive partner, as formula based contracts can guarantee clients that they are getting a better
102
theBaltic Spring 2012 www.thebaltic.com
Commercial profiles
‘Move to improve’ with BBC Chartering W
ith more than 140 vessels in its portfolio,
Along with the suitable vessel, the company
shipments, and on one of the regular liner
solutions,
services the company offers around the world.
heavy lift and multipurpose tonnage segment,
develops stowage and lashing concepts, handles
Any tonnage can be assigned flexibly to any type
with vessels ranging from 3,500 to 37,300 dwt.
the cargo, and arranges required materials and
of service as may be required.
It operates the single largest fleet in the market
paperwork.
BBC Chartering is a global leader in the
with lifting capacities reaching up to 800 mt.
also
delivers
appropriate
lifting
Founded in 1997, BBC Chartering could
Experienced teams at BBC Chartering deliver
be considered to be a young company. As a
The fleet can cater for project cargo, break
the expertise needed to ensure the transport
consequence of its attractive business concept,
bulk, bulk, or any other non-standardised cargo.
is managed to the client’s demands without
it has grown from operating 10 vessels to
The overall number of vessels, their shallow
compromising operational quality, environmental
over 140 ships today. This development has
drafts, large cargo holds, overall compact
aspects or occupational health and safety issues.
been supported by its team, who embrace the
vessel dimensions and high lifting capacities
With dedicated tender management and
company’s aim of becoming the leading supplier
are important fleet features that allow BBC
transport
engineering
capabilities,
BBC
Chartering to offer flexibility and reliability for any
Chartering also seeks to support clients in the
assignment. The company can also respond to
offshore oil and gas industry.
of tonnage in the multipurpose and heavy lift market, people that ‘move to improve’. More than 300 people are available in 25
any project demand, ensuring that the required
The company also plays an important role as
offices around the world to assist charterers in
resources are aligned so the shipment is
a high quality carrier for the wind industry, where
planning and executing their transport projects.
delivered within time and budget.
it has helped numerous clients turn their projects
BBC Chartering representatives look forward to
into successes.
discuss project opportunities with you.
With ships averaging below five years of age, BBC Chartering employs one of the youngest
Typically, BBC Chartering offers its ships
and most efficient MPP/HL fleets in the world.
through three lines of service: clients can book
This policy ensures that ships with the most
cargoes on tramp services for full charters
up-to-date technical characteristics can be
or part cargoes, on affreightment contracts in
offered to charterers.
order to secure shipping capacity over multiple
More information can be found at www.bbc-chartering.com.
GIBSON SHIPPING CONSULTANCY AND RESEARCH
G
ibson Shipbrokers has an experienced
shipowners and charterers to banks, investment
international energy trades for tankers, dry cargo
Consultancy and Research team covering
groups, energy consultancies and government
and gas. We have offices in London, Oslo, Hong
crude and product tankers, dry bulk, LPG and
agencies. Services include the provision of
Kong, Shanghai and Singapore, and are part
LNG transportation sectors. We provide market
shipping data, analysis, market forecasts and
of the Hunting Group, a fully listed company
consultancy services to many of the world’s
tailor-made in-depth studies. We also act as an
on the London Stock Exchange and a leading
leading companies, and our knowledge and
external shipping research resource, providing
energy services company in the upstream oil
expertise make us ideal partners in delivering
various companies with access to our expertise
and gas industries.
industry analysis, forecasts and studies.
through an annual retainer arrangement.
Being an integral part of one of the world’s
In addition, Gibson consultants give high
leading shipbroking companies gives us direct
level presentations, seminars and training
access to market intelligence from experienced
sessions to individual companies, international
spot brokers, experts in period and projects,
conferences and universities, as well as industry
through to sale and purchase specialists. At
and government bodies.
Gibson, our combination of first-hand industrial
Gibson Consultancy and Research offers
knowledge together with the expertise on the
access to detailed shipping information on
research desk gives us a major competitive
supply, demand and rate assessments, as well
For further information about Gibson
edge in shipping consultancy. With more
as strong support, market expertise and a
Consultancy and Research please contact us:
regulation, shifts in commodity supply, demand
forward looking view of the industry. Visit our
by e-mail (research@eagibson.co.uk) or call
and trade, together with recent huge investment
website (www.gibson.co.uk) for sample copies
(+44 (0) 20 7667 1233)
programmes in new tonnage, this understanding
of our Tanker Register, Gas Register and Weekly
Gibson Shipbrokers Ltd
is vital in today’s ever challenging and changing
Tanker Market Report.
16-20 Ely Place
shipping industries.
Our Consultancy and Research team draws
London EC1P 1HP
Our consultancy clients range from oil, gas,
on the strength of Gibson Shipbrokers Ltd, with
Tel: +44 (0) 20 7667 1000
coal and iron ore companies, traders, end-users,
a global presence, operating in all the main
www.gibson.co.uk
theBaltic Spring 2012 www.thebaltic.com
103
Commercial profiles
Galleon Marine Insurance Agency G
alleon provides liability insurance for marine
even be made personally (outside the protection
Most importantly, we are there for you when
and offshore professionals such as (but not
of your company name). It is times such as these
it counts. Galleon also covers cargo and third
limited to) shipbrokers, agents, managers, marine
that you need protection, support and peace
party liability for logistic providers, freight
surveyors and consultants.
of mind.
forwarders and transport operators as well as cargo “all risks” insurance.
What is it?
Why Galleon?
This insurance is designed to protect firms and
Galleon’s extensive cover provides protection
individuals within the maritime industry from
from, (but is not limited to), responsibilities for
allegations and claims made by customers or
errors and omissions, fraud of employees, loss of
third parties arising from an error or omission
documents, libel, slander and breach of warranty
made whilst performing an insured service.
or authority. Extra extensions are also available depending on the service you provide.
Why do I need it?
Unlike a mutual insurance underwriter our
For those who have never had a professional
premiums are fixed at the start of the policy period.
negligence claim you will no doubt argue the risk
Our policies are supported 100% by underwriters
is low – but our experience would beg to differ.
at Lloyd’s of London and our Insureds benefit
It is often hard to imagine as professionals, a
from continuity credits.
Galleon Marine Insurance Agency is a trading name of Crispin Speers & Partners Ltd which is authorised and regulated by the Financial Services Authority (FSA). Our registration number is 311507.
claim being made against you, but unfortunately
We understand the unique and broad roles
as our culture becomes ever more litigious it
within the maritime industry and our wording is
James Munn (Deputy Underwriter)
seems to be an increasing trend.
tailored to cater in this respect. Every firm
Galleon Marine Insurance Agency,
Whether you are responsible or not, the cost
is different and we want to work with you to
10 Fenchurch Avenue, London, EC3M 5BN
of investigation and defence can rise very quickly
ensure that your insurance needs have been met
Tel: +44(0) 20 3178 8868
and even the best business relationships can
– our team is flexible and we can construct
E-mail: contactus@galleon.uk.com
experience claims. In some cases claims could
bespoke insurance schedules in response to this.
Website: www.galleon.uk.com
Contact: Chris Curran (Underwriter) or
Maximise profit and minimise risk with Triple Point
I
from physical contracts and bunker swaps.
n today’s volatile economy, enterprise-wide
an agreement is made to transport cargo. Any
transparency and fast access to actionable
combination of cargoes, vessels, load, and
information can make the difference between
discharge operations on a voyage and/or time
Mobile Voyage Estimator
sinking and swimming. Triple Point Technology®
charter relet basis may be evaluated. Extensive
Chartering and VesselOps customers can take
provides the leading software for owners,
cargo
functionality
advantage of Mobile Voyage Estimator, a powerful
operators and charterers to comprehensively
provides a full view of all upcoming cargo
mobile application that enables charterers to win
manage chartering, vessel operations and freight
commitments or open tonnage positions.
more business and stay ahead of the competition
tonnage
management
risk on an integrated platform.
by quickly providing accurate quotes from
Vessel Operations
anywhere. This one-of-a-kind solution analyses
empowers the commercial shipping community
Chartering and VesselOps manages all post-fixture
any combination of cargoes, vessels, routes, load
to maximise profits and minimise risk by providing
activities. Operators can keep track of day-to-day
locations and discharge ports.
complete transparency into enterprise position
operations: arrival, departure, loading, discharging,
The Softmar Chartering and VesselOps
and exposure, eliminating the need for antiquated,
bunkering and disbursement accounting. Voyage
solution is used by over eighty companies and
error-prone
results are updated in real-time as new information
more than 2,500 daily users worldwide, including
is entered.
Allied Maritime, Marubeni, Merit Chartering,
Softmar
Chartering
and
spreadsheets.
VesselOps™
Sophisticated
technology provides fast access to accurate, real-time information that drives better business
Navig8, Ocean Tankers, Ultrabulk and U-Sea
decisions, streamlines day-to-day operations and
Freight Risk Management
Bulk. Founded in 1993, Triple Point employs
protects cash flow performance.
Softmar Freight Risk Management analyses
over 700 staff in 17 offices across the globe.
position including vessels, Freight Forward
Chartering
Agreements, Contracts of Affreightment, cargo a
bookings, cargo relets and options. The solution
comprehensive system for managing pre-fixture
displays a consolidated view of total physical
activities including voyage estimating, cargo
and paper freight risk exposure, mark-to-market
Tel: +1 203 291 7979
management and vessel management. Potential
analysis and long/short position. It also manages
E-mail: info@tpt.com
profit or loss is automatically analysed before
bunker exposure by combining the exposure
Web: www.tpt.com
104
theBaltic Spring 2012 www.thebaltic.com
Chartering
and
VesselOps
provides
Commercial profiles
International Registries, Inc. International Registries, Inc. and its affiliates (IRI)
Republic of the Marshall Islands is not only white
of engagement, and work closely with military
provide administrative and technical support to
listed with the Paris and Tokyo Memorandums of
forces operating in the area.
the Republic of the Marshall Islands maritime and
Understanding (MoUs) but also has maintained
IRI has a network of 25 worldwide offices
corporate registries. IRI has been administering
Qualship 21 status with the United States Coast
located in Baltimore, Dalian, Dubai, Fort
maritime and corporate registries since 1948.
Guard (USCG) for seven consecutive years. The
Lauderdale, Geneva, Hamburg, Hong Kong,
The Republic of the Marshall Islands registry (the
Registry supports increased PSC schemes such
Houston, Imabari, Istanbul, London, Long Beach,
“Registry”) is the world’s third largest registry,
as the Paris MoU’s New Inspection Regime (NIR)
Mumbai, New York (mid-town and downtown),
reaching nearly 78 million gross tons and 2,560
and is among the few flag States to be included
Piraeus, Rio de Janeiro, Roosendaal, Seoul,
vessels by the end of 2011 and consisting of
on the NIR’s Low Risk Ships list.
Shanghai, Singapore, Taipei, Tokyo, Washington
owners and operators primarily from Greece,
The Republic of the Marshall Islands is active
DC/Reston and Zurich that have the ability to
the United States, Germany, Norway, Japan and
in the United Nations (UN) Contact Group on
register a vessel or yacht, record a mortgage,
the Middle East, among others. In this sense, it
Piracy off the Coast of Somalia (CGPCS) and
process seafarer documentation and service
is truly an international registry.
its various working groups. It also works closely
clientele. The Registry is committed to the safety
with governmental, military, intelligence and
and security of personnel ashore and afloat, the
service-oriented
industry interests to combat piracy. The Registry
Registry’s vessels, and the marine environment.
philosophy and the quality of the fleet. It maintains
is working with international partners, both in
The most important asset to the Registry is its
a continuing commitment toward working
government and in the industry, to foster better
customers. IRI strives to provide them with full
through the International Maritime Organisation
programmes to protect vessels that transit high
service from any office, 24 hours a day.
(IMO) to develop sound international regulatory
risk areas. With the increase in the use of
instruments and seeks to develop a close
armed guards aboard ships, the Republic of the
working relationship with shipowners, operators
Marshall Islands seeks to ensure that guards
and other industry stakeholders.
working aboard ships and those aboard any
The Registry is highly regarded for its decentralised
operations,
Port State Control (PSC) is the key indicator
escort vessels are properly vetted and trained,
with respect to the quality of a registry. The
use agreed-upon codes of conduct and rules
St. Lawrence Seaway Management H
ighway H2O is a 3,700 kilometre marine
Highway H2O is an alliance of transportation
highway that offers shippers direct access
stakeholders in the Great Lakes/Seaway System
to the commercial, industrial and agricultural
region, working to develop business and deliver
heartland of North America.
greater awareness about the System, locally
Highway H2O is strategically positioned, with
and internationally. Working with its members
access to:
and partners in a stewardship capacity, Highway
• A market of over 150 million people
H2O leverages its collective knowledge about
• A vast network of over 40 ports with key
the System to offer innovative services and
intermodal connections • Incentive programs for new and existing
incentive programs to ensure the System remains a competitive gateway into the future.
cargo The Great Lakes St. Lawrence Seaway
St. Lawrence Seaway Management
System is serviced by a variety of international
Corporation
and domestic vessels that contribute to the
Tel: 905-641-1932 Ext. 5438
efficiency of the System. These include multi-
E-mail: gdelleroseash@seaway.ca
purpose ocean vessels, tug and barge units,
www.greatlakes-seaway.com
and a specialised lake fleet, many of which are
Sponsor of: www.hwyh2o.com
equipped with self-unloading devices.
Twitter: @hwyh2o
A wide range of cargoes move on Highway H2O, including grain, iron ore, pig iron, coal aggregates, chemicals, semi-finished steel, heavy lift and project cargo. Short-sea shipping is gaining momentum and Highway H2O delivers new supply chain solutions.
theBaltic Spring 2012 www.thebaltic.com
105
Commercial profiles
The world needs risk P
opulations, technologies and data are
our opportunity: to unleash the world’s capacity
Facts and figures
growing faster than ever. Today’s emerging
to advance. To make our clients’ worlds go.
We focus our business on P&C (non-life)
market could be tomorrow’s super power. Today’s prototype could be tomorrow’s mainstream
insurance and reinsurance activities.
Insurance
Our Insurance businesses participate in more
product. Needs change as the world moves
Businesses that are moving the world forward
than 1,600 global programmes and lead more
forward faster.
choose us as their partner.
than 70% of these.
Whether it’s properties, transport, energy, art,
Because we analyse the numbers but listen
We have about 4,000 employees worldwide.
manufacturing, aerospace, contracts, people,
to their dreams. Because we’re solid but fast.
About 600 underwriters, 400 claims experts,
or insurance, moving things forward is what our
Because we’re experts in our field, but always
more than 200 engineers. And growing.
clients do. And moving forward means risk.
open to new possibilities. And because we make top service and fast, fair claims handling
We do risk like no one else
We can serve clients in more than 100 countries. We have clear and focused corporate
our priority.
Change is changing. Problems are greater. The
It’s all thanks to the widely experienced
responsibility activities at XL. Focused on
stakes are ever higher and answers are harder
underwriters who are experts in the industries
community and philanthropy, environmental
to find.
they serve, engineers who work all across the
stewardship, ethics and governance.
We’ve got what it takes to find answers where others don’t dare to search. We have the
globe and support teams that help them do what they do best.
knowledge and experience. Global capabilities.
From large corporations to mid-sized
Local experts. Scale and financial strength. The
businesses, even some inspirational individuals,
people, the drive and the technology.
we cover clients in more than 100 countries.
What we do sets ideas free, changes
Our capacity means we can work across their
industries and turns plans into reality. What we do
Casualty, Property, Professional and Specialty
invents the new and fixes the broken. We see it as
Risks.
Port of Zeebrugge A
s a major coastal port on the Belgian
to the Middle and Far East with 10 fixed weekly
Zeebrugge as their distribution hub and new
North sea coast, Zeebrugge offers a highly
services. With these frequencies, the port is well
agreements are constantly being realised.
productive hub for a wide range of shipping
geared to offer its customers daily shipment
Furthermore, in order to be able to face the
companies. It is one of the few ports that can
possibilities. Zeebrugge is grateful to serve all
expected traffic growth, new port areas are
easily handle the larger container vessels, due
the major shipping lines, and its container trade
continuously being developed.
to substantial water depth and the sophisticated
has more than doubled since 2003. It ranks No 1 on the world scale in car trade;
terminal equipment. With an array of both deep-sea and short-sea distribution capacities, a network of intermodal
in 2011, 1.7 million units were handled for the global automotive industry.
services to reach the markets, and distribution
Zeebrugge offers its network and expertise to
facilities within the port area, the site is a logistic
the emerging markets and is also an important
turntable that meets the demands of a very
platform for receiving liquefied gas from the
diverse customer base.
Middle East.
In the short-sea trade, Zeebrugge is the
The port is a major gateway into Europe.
prime continental port serving the UK and Irish
All types of goods, general cargo, reefer trade
markets in transshipment. Fourteen daily freight
and project cargoes amongst others, can be
services cover all major destinations along the
treated within the port area with the necessary
UK’s east coast, while Scandinavia and the
personalised value-added services. Moreover,
Baltic in the north, and Spain and Portugal in the
frequent competitive and reliable logistics deliver
south are also served with frequency.
and receive cargoes throughout Europe. The container
port is always looking to provide its unique and
transshipment hub; in 2011 it handled 47 million
specialised advantages and to offer its export
tonnes of cargo and 2.2 million teu. It serves
tools to the European market.
Zeebrugge
is
a
top-class
many deep-sea destinations and is connected
106
International
companies
have
chosen
theBaltic Spring 2012 www.thebaltic.com
For more information, visit: www.portofzeebrugge.be
Commercial profiles
We understand water and wastewater treatment A
s the market leader in the design and
BALPURE system is designed with easy-to-
sludge and solids management system that
manufacture
separate
the
removes concentrated solids automatically
disinfection systems, Severn Trent De Nora
requirement for design changes to the ship’s
while in situ. Accommodating varying crew
brings over 35 years of marine equipment
engine room. BALPURE received IMO Type-
complements, the largest individual OMNIPURE
experience to the treatment of ballast water and
Approval in July 2011.
unit treats a peak flow of 65m3 per day of human
of
electrolytic
seawater
sub-assemblies,
eliminating
At Severn Trent De Nora we understand
wastewater. The systems have received BV
Ballast water is the most cited cause of the
the importance of providing safe and effective
Certification of Approval and USCG Certificate
introduction and transfer of non-indigenous
treatment of grey and black water. That’s why
of Approval to IMO Resolution MEPC.159(55).
species
water
we’ve designed the OMNIPURE™ Series 55
treatment systems, especially those based on
sewage treatment systems to provide wastewater
electrochlorination disinfection, are a proven
effluent quality well below MEPC.159(55)
approach to limiting their introduction and transfer.
requirements,
marine sewage.
into
waterways.
Ballast
while
eliminating
the
need
The patented BALPURE® system is an
to handle waste solids from raw, untreated
effective and economical electrolytic disinfection
influent. Electrolytic treatment of marine sewage
solution to meet the most stringent ballast
eliminates chemical storage issues, dosing
water discharge requirements. Environmentally
equipment and costs associated with the use
Severn Trent De Nora
safe and easy to maintain, BALPURE can offer
of hazardous chemicals since the disinfection
1110 Industrial Blvd
energy savings of more than 60% compared
solution is produced on site while the unit is
Sugar Land, TX 77478 USA
with competing technologies. Ideal for high
in operation
Tel: +1 (0) 281 2406770
ballast water flow rate applications, BALPURE
The OMNIPURE system boasts minimal
uses a slip stream treatment approach that
maintenance, a small equipment footprint and
E-mail: sales@severntrentdenora.com
offers process and design advantages. The
a lightweight package design, plus a unique
Website: www.severntrentdenora.com
theBaltic Spring 2012 www.thebaltic.com
Fax: +1 (0) 281 2406772
107
Events
What’s on where A round-up of conferences, exhibitions and events in the shipping world 6-7 March, London
14 May, Sorrento
4th Chemical and Product Tankers
8th Mare Forum Italy 2012
Annual gathering for owners covering commercial and operational issues.
World economy, trade and commodities outlook, geopolitics, shipping, shipping innovations, ship-finance and ship-investments.
www.navigateevents.com
www.mareforum.com
14-16 March, Singapore
24-28 May, London
Asia Pacific Maritime
Freight Derivatives & Shipping Risk Management Advanced Freight Modelling & Trading
www.apmaritime.com
19-21 March, Stamford
Baltic Exchange courses looking at the use of derivatives in shipping.
CMA Shipping 2012 This is the Connecticut Maritime Association’s major international conference. www.shipping2012.com
www.balticexchange.com/training
30-31 May, Jakarta 10th ASEAN Ports & Shipping Conference
26-27 March, Amsterdam Platts 3rd Annual European Bunker Fuel Conference www.platts.com/ConferenceDetail/2012
The biggest annual ports, shipping and logistics exhibition in the ASEAN region. Enquires@transportevents.com
4-8 June, Athens
27-29 March, Copenhagen Greenship Technology Conference Challenges for sustainable shipping.
Posidonia 2012 The world’s largest maritime event taking place at the Metropolitan Expo Centre this year.
maritimecustserve@informa.com
www.posidoniaevents.com
4-6 April, Mumbai
19-20 June, Antwerp
SMM India
Shortsea-Euro
www.biztradeshows.com
Europe’s leading shortsea event covering liquid-bulk, dry-bulk, feeders, shortsea containers, vehicle and barge.
18-20 April, Tokyo
www.navigateevents.com
Sea Japan 2012 www.seajapan.ne.jp
25-28 April, New York Freight Derivatives & Shipping Risk Management Advanced Freight Modelling & Trading Baltic Exchange courses looking at the use of derivatives in shipping. www.balticexchange.com/training
108
theBaltic Spring 2012 www.thebaltic.com
E D I R P FEDNAV / Expert Partner
www.fednav.com We are committed to environmentally responsible business and operating practices. View our environmental policy at www.fednav.com