the Baltic
the
Maritime Security
W IN T E R 2 0 1 1
Baltic moves to simplify wet freight trading UAE ports sector on road to recovery Going green in Gothenburg
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
WINTER 2011
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BALTIC The Baltic is the official magazine of the Baltic Exchange Tel: +44 (0) 20 7623 5501 E-mail: enquiries@balticexchange.com Website: www.balticexchange.com The Baltic is published for the Baltic Exchange by Maritime Media Ltd The Diary House, Rickett Street London SW6 1RU Tel: +44 (0) 20 7386 6100 Fax: +44 (0) 20 7381 8890 E-mail: inbox@mar-media.com The Baltic annual subscription rates £110 for UK, Europe or the world, sent airmail including P&P
Publisher
W H Robinson editor
Sandra Speares Tel: +44 (0) 1483 527998 E-mail: sandra.speares@mar-media.com
SALES manager
David Scott E-mail: david.scott@mar-media.com
DESIGNER
Justin Ives
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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 Winter 2011 www.thebaltic.com
1
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Contents Chairman’s message 7 Mark Jackson Baltic briefing 7
8
Dry derivatives forum
9
Move to dollar per tonne for tanker FFAs
10 New Baltic vice chairman 11 Lifeboat crew visits Baltic 12 Baltic Exchange honours Maersk Mc-Kinney Møller 10
13 Rigel lifts Baltic 2011 Cup 14 BECC tie with bankers, but battered by Braemar at Lords 15 YBA night 16 Friends reunited 17 Christmas crackers
11
18 Contacts Logbook 20 The short sea pioneers People, places, plcs
17
22 Scary times for shipping Baltic Comment 24 Michael Grey State of the market
33
25 Tankers 26 S&P 28 BIMCO 31 Dry Bulk 33 Offshore 35 Towage & salvage
37
37 Shipmanagement, crewing and employment
theBaltic Winter 2011 www.thebaltic.com
3
Contents FFA 39 Baltic moves to simplify wet freight trading Environment 43
43 Going green Oxford Analytica 47 Global commodity ‘financialisation’ increases risks Insurance special 49 Reducing risk
47
Maritime security 57 To arm or not to arm? Maritime safety 70 Putting safety first
57
UAE 73 UAE ports sector on road to recovery Maritime cluster 80 Rock resilience
73
Scandinavia 83 Going green in Gothenburg German law 87 Going for growth in Germany Insurance news
80
91 Insurance parlance 93 ITIC Legal news 94 Rotterdam redrafting
87
104 Events theBaltic Winter 2011 www.thebaltic.com
5
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Chairman’s message Mark Jackson
Chairman’s message A
s I sit down to pen this message to readers, the UK’s Chancellor of the Exchequer stands before the House of Commons delivering his Autumn
Statement, giving a gloomy assessment of the state of the nation’s finances and its short term economic outlook. Eurozone woes, rising youth unemployment, lower global growth and higher government borrowing than expected mean difficulties for us all. In these tough times, strong leadership and an understanding of the needs of the various key sectors which make up UK plc are very necessary if we are to find our feet again. The UK’s maritime sector is one of these key sectors and growth here will play a role in growing our economy. Our government and public should be proud of the achievements of the maritime sector and its ability to bring in overseas earnings. The latest report on our industry by the CityUK shows that the UK’s maritime services sector alone generates a GDP of £1.5bn; provides employment for nearly Tradewinds
12,000 people; raises tax revenue of £483m; and produces overseas earnings of £2.2bn. According to the authors of “Maritime Services November 2011” this contribution is enhanced by the multiplier impact both from business
Mark Jackson
procured through the supply chain and also from spending of those employed in maritime
is important that we demonstrate the breadth
to prevent further damage to shipping from
services and the supply chain. Taking this impact
and depth of the many businesses which make
changes to the Non-Dom tax regime and the
into account, it is estimated that the broad
up what we call the City. The City is not just
tinkering with the Tonnage Tax. As we have
contribution to GDP and tax revenue is more
about banking, but also shipbroking, commodity
watched businesses diminish their presence in
than doubled to £3.9bn and £1.4bn respectively,
trading, legal advice, insurance services and
the UK and increase it elsewhere, our continued
while employment dependent on maritime
shipowning. We must not allow a breakdown
message to Government must be that they
services is increased more than fivefold to over
in trust between the public, politicians and the
need to understand the reality of international
63,000. If we also take our ports, manufacturing
financial sector impact us. To this end, the Baltic
competition.
and shipping industry and service sectors into
Exchange will continue to highlight the needs
The UK and the City provide world beating
consideration, the statisticians say that the
of our sector at the highest levels. The freight
maritime services and we need to make sure
GDP contribution rises to £6.1bn and provides
derivatives sector is directly impacted by the
that our leaders understand what we need to
employment for 117,000.
transition of the Financial Services Authority to
remain at the heart of the international shipping
At a time when the role of the UK’s financial
new structures next year and the implementation
industry.
services sector is being questioned by many, it
of MiFID2 will take place soon. We have tried
theBaltic Winter 2011 www.thebaltic.com
7
Baltic briefing
Dry derivatives forum P
resentations from October’s Baltic Exchange
Hotel and once again pulled in a large audience
and FFA Brokers’ Association Dry Freight
of FFA brokers and traders. Topics on the agenda
Derivatives Forum are now available in the FFA
included discussion of screen trading, an over-
area of www.balticexchange.com. This year’s
view of the latest regulation for this market and
forum took place at London’s Royal Garden
advice on recovering FFA hedging losses.
Michael Saverys (Bocimar Int), K Carsten (Klaveness), George Wells (Cargill), John Banaszkiewicz (FIS)
Janet Sykes, FFABA chairman
Isabelle Kurek-Smith (LCH Clearnet) and Tom Cutler (Swissmarine)
8
theBaltic Winter 2011 www.thebaltic.com
Baltic briefing
Move to dollar per tonne for tanker FFAs T
anker freight derivative traders meeting at the Freight Market Information Users’ group
A working group was formed to resolve some details of future market practice.
has been a problem for derivative traders in the past.
at the Baltic Exchange agreed that from the
Traders are already pricing contracts
The move does not in any way affect the
New Year all Tanker FFA contracts which are
for settlement on a $/MT basis for trades
use of Worldscale in the physical market and
traded in Worldscale would be converted to
which settle in the next and subsequent
the Baltic Exchange will continue to provide its
a dollar per metric tonne ($/MT) price when
calendar years, and the decision removes the
daily index tanker assessments on a Worldscale
presented to the clearing houses. The move
uncertainty faced by the market when using
basis.
is designed to help spur trading and follows a
the Worldscale points based system. With the
Attendees at the Forum which followed
successful transition of most trading of FFAs
calculation of Worldscale flat rates changing
the User Group meeting also heard a market
from Worldscale to $/MT. It will allow trad-
at the end of each year to reflect movements
presentation from Henry Curra at ACM and
ers who prefer to continue to quote trade in
in bunker prices, port costs and exchange
independent analyst Aage Figenschou talk
Worldscale for near-dated contracts to execute
rates, and occasional ad hoc changes during
about dealing with financially distressed shipping
against $/MT prices from counterparties.
the year, uncertainty about the future flat rate
companies.
Lord Mayor of London commends UK maritime services N ewly elected Lord Mayor of London David
us to retain international shipping investors and
that the Baltic Exchange would work with the
Wooton highlighted the £26bn contribu-
attract new business.”
Lord Mayor to ensure that central government
tion made by maritime businesses to the UK
Baltic Exchange chairman Mark Jackson
policy towards the sector was supportive, high-
economy during a visit to the Baltic Exchange
called on the Lord Mayor to help communicate
lighting the tonnage tax, non-dom tax regime
in November.
the UK’s leadership position within the global
and the implementation of MiFID 2 as particular
maritime industry to the general public and said
areas of interest.
In the first visit of his mayoralty, the Lord Mayor said: “The UK has a uniquely strong maritime services sector built on 300 plus years of experience. It is one of the UK’s biggest earners, delivering over £26bn to the UK economy and employs half-a-million people. It could play an even greater role in the future assisting the Government objective of reducing debt.” He noted that during his term in office, one of his priorities would be ensuring that the City and its institutions are fit for the future. London today is the world’s foremost chartering, financial, insurance and legal centre for the global maritime industry, thanks to the presence of international shipowners, Lloyd’s of London,
the
Admiralty
and
Commercial
Courts and the United Nation’s International Maritime Organization. The Lord Mayor commended the Baltic Exchange’s work, saying: “The Baltic’s specialist knowledge and experience is vital in providing a strong and stable environment in the UK, helping
Lord Mayor David Wooton and Baltic Exchange chairman Mark Jackson
theBaltic Winter 2011 www.thebaltic.com
9
Baltic briefing
New Baltic vice chairman T
he
Baltic
Exchange
Board of Directors has elected Quentin Soanes to serve as its vice chair-
man. He replaces Paul Over, who continues to serve on the Baltic Exchange Board and as chairman
of
Baltic
Exchange
Derivatives Trading, the subsidiary company that runs the Baltex Multilateral Trading Facility for dry freight derivatives. Quentin Soanes said: “I am honoured to have been appointed to this position and look forward to supporting current chairman Mark
Jackson
as
ably
as
my predecessor.” Paul Over said: “As is widely known, my core raison d’être for participation at the Baltic has been in the development of the freight futures business. With the successful launch of Baltex, it is natural for me to wish to focus my energies in that direction. The expansion of the Baltic’s activities through
Baltex
has
greatly
increased the time commitment of all those involved, especially in respect to the responsibilities for FSA regulatory requirements that Baltex has secured and must hold and maintain.” Quentin Soanes is a founding shareholder and main board director of Braemar Seascope PLC, where he is head of business development. He is also joint managing director of Braemar Seascope Ltd. He has worked in the shipbroking and shipping services industry since 1977 and specialises in sale & purchase. He joined the Baltic Exchange Board in 2005. Quentin Soanes
10
theBaltic Winter 2011 www.thebaltic.com
Baltic briefing
Lifeboat crew visits Baltic
C
rew members of the Salcombe lifeboat were the guests of honour at the Baltic Exchange in October. The Baltic Exchange and its members
are keen supporters of the RNLI and have sponsored lifeboats for nearly 150 years. Baltic members raised over £500,000 towards the purchase of a new lifeboat for RNLI Salcombe, The Baltic Exchange III, which entered into service in 2008 and is stationed at Salcombe. The Tamar class vessel has a range of 250 nautical miles and a top speed of 25 knots. See www.salcombelifeboat.co.uk for updates from the Salcombe station.
Lifeboat crew enjoyed lunch at the Baltic
Salcombe yawl weekend T
he Baltic held a weekend of yawl racing in Salcombe at the beginning of October, raising £6300 for the Salcombe lifeboat and £1000 for the Salcombe Yacht Club. The Salcombe Yawl is a small sailing dinghy restricted class native to Salcombe in south Devon. Built traditionally by hand from mahogany with wooden spars and varnished decks, the Salcombe
yawls are serious racing boats attracting fierce competition.
There were various events throughout the weekend, including fund-raising dinners and lunches, with the main focus being on yawl racing between the Baltic members and the Salcombe lifeboat crew. Organised by a Baltic Exchange member Mike Robson and the Yawl Owners Association, 12 yawls were provide by, and skippered by, their owners a very generous loan of boats and time. Lifeboat operations manager Graham Parker said: “We were very lucky with the weather – even if there could have been a bit more wind at times. I’d like to say a huge thanks to the Baltic Exchange members, Yawl Owners Association and Salcombe Yacht Club. I hope that this will become an annual event but can’t promise such wonderful weather every time.” Position
Team
Boat
Helm
1st
Baltic Exchange
Astraea
Dan Bridger
2nd
Howe Robinson
Firecrest
Andrew Savell
3rd
Platou 179
Pas Encore
Richard Fulford Smith
4th
Nomikos
Lobster
Michael Webster
5th
Pacific Basin
Zenga
AJ Squire
6th
Gray Page
Ladybird
Davis Edmonds
7th
Offshore Cox
Sula
Chris Winzar
8th
Clarksons
Kingfisher
Michael Knowles
9th
Baltic Ladies
La Chouette
Ian Savill
10th
Brown Jenkinson
Quince
Andrew Sterling
11th
Holman Fenwick
Blinkie
Philip Smith
12th
Inshore
Skylark
David Sworder
theBaltic Winter 2011 www.thebaltic.com
11
Baltic briefing
Baltic Exchange honours Maersk Mc-Kinney Møller T
he achievements of Maersk Mc-Kinney Møller, aged 98, were celebrated at a lunch attended by the legendary Danish ship-
owner and held in his honour at the Baltic Exchange this October. The occasion marked his 20 years as a Life Honorary Member of the Exchange. Welcoming Mr Mc-Kinney Møller to the Baltic Exchange, chairman Mark Jackson said: “It is a delight that you have been able to accept our invitation and I very much hope that you will feel that you are back among friends.” Referring to Mr Mc-Kinney Møller’s speech of 1991 when he accepted his Life Honorary Membership, Jackson continued: “During your speech in October 1991, you talked about the professionalism of the Baltic membership, their thoroughness and attention to detail, but nonetheless the way in which everyone was expected to stand by the arrangements they had agreed verbally. I am pleased to say that the Baltic still demands these standards of behaviour and remains a firm proponent of the highest possible standards in all matters in shipping.” Mr Mc-Kinney Møller first visited the Baltic Exchange in 1936 as an apprentice to the British shipping firm H.Hogarth & Sons. AP Møller-Maersk has conducted its business through Baltic Exchange members since the early 20th century and its London company has been a member since 1951. Previous recipients of Baltic Exchange life membership awards have included IMO Secretary-General Efthimios Mitropoulos (2010), Sammy Ofer (2009), the Duke of Edinburgh (1953) and Winston Churchill (1954). Maersk Mc-Kinney Møller
Gibsons summer party B
altic member firm EA Gibsons held its summer staff party in London, with 200 guests from its offices around the world attending.
Class of 1954 F
ormer Baltic chairman Eric Shawyer and friends met for lunch aboard HQS Wellington this November for the tenth such gathering of ship-
brokers who first joined the Baltic Exchange in 1954.
Left to right: Arild Brune (Gibson Oslo), Patrick Allen (Specialised Gibson), Maria Allen, Ellen Brune, Julian Robinson (S&P, Gibson)
12
theBaltic Winter 2011 www.thebaltic.com
Class of 1954
Baltic briefing
Charity Baltic quiz night
Rigel lifts Baltic 2011 Cup R
igel was the victorious team at the Baltic
evening
tournament
Exchange five-a-side football tournament
Clarksons,
Howe
with
Rigel
Robinson,
the
beating
A
total of 16 teams competed in the Baltic’s Quiz Night in November, raising over £700
Baltic,
for the charity Cancer Research. A Baltic
which took place in November on London’s Old
Lykiadpolous, Maersk Broker along the way,
Exchange team consisting of Willy Lyth, Pat
Street pitches. 11 teams participated in the
before beating L Dens 2-1 in the final.
Swayne and Duncan Bain were the winners of
?
the Charles Macmillan Trophy, narrowly beating HSBC by half a point.
Sadly departed W
e regret to announce the recent passing of the following Baltic members:
The winning Rigel team
Malcolm Beard
New Year wine tasting competition T
Members will learn with regret of the death of Malcolm Beard, aged 81. Mr Beard was first elected a member of the Baltic in 1952. From 1968 until his retirement in 1994, he was the Principal for M D Beard & Co Ltd.
Derek Cook he Baltic will be running a wine tasting com-
Mr Cook was first elected a member of the Baltic
petition evening on 2 February, led by David
on 16 November 1954 and represented Howard
Hughes. The evening will involve tasting eight
Houlder & Partners throughout his membership.
different wines followed by a curry and will be
He was a Baltic retired member between
held in the Baltic Bar. To book your place, please
1987-2002.
contact Crispin Eccleston.
Nicolaos J Hadjipateras
Email: ceccleston@balticexchange.com
Mr Hadjipateras was first elected a member of the Baltic Exchange in 1969 representing John C Hadjipateras & Sons Ltd. He also served at the Council of the Greek Shipping Co-operation Committee.
Lumir Kubat Mr Kubat was first elected to the Baltic Exchange in 1986 for Intrasped (London) Ltd until 1994, when he became a Retired Member.
Jim Sibree Mr Sibree was elected a member of the Baltic Exchange in the 1970s representing James A McLaren & Co Ltd.
theBaltic Winter 2011 www.thebaltic.com
13
Baltic Briefing
BECC tie with bankers, but battered by Braemar at Lords
T
he City Twenty 20 competition this
high as the bowlers took up the challenge.
BECC on a pitch moistened by a handy
year re-located to the iconic JP Getty’s
Unfortunately the Lloyd’s batsman proved
September shower.
estate at Wormsley, a venue that hosts
typically formidable, and in conjunction with a
Bang! The carnage was terrible as the
county cricket as well as test match
pedantic no ball controversy (their star batsman
vaunted BECC top order, slayers of Stock
touring sides and is generally considered among
being caught off a bouncer with three fielders
Exchange and Lloyd’s, were cut down by a
the finest cricket grounds in the world.
outside the ring) they were able to cruise home
variety of S&P, Dry Cargo and IT demons, and
A fitting setting therefore for some Baltic
in the last over despite two wickets for Freeland
apart from some defiant stroke-play by HSBC’s
Exchange CC heroics against their mighty (well
and another tidy spell from man of the match
Charlie Russell, the innings subsided largely
funded) foes from the Stock Exchange and
Procter.
without trace to an extent that need not be recorded in this report.
whom boast a number of
Lloyd’s went on to beat the Stock Exchange
recent first class players within their ranks.
in the last game to retain the trophy in front of a
However, we are generous enough to
However, as their portfolio disclaimers testify,
rapturous, sun-baked crowd, and the success
acknowledge the ease and style in which
past performance is no guarantee of future
of the event immediately led to a return invitation
Braemar’s Guy Newton and Billy Price were able
gains, and SECC captain James Bruce (ex
from the Getty family for 2012.
to knock of the runs in only 11 overs, despite
Lloyd’s, both of
Hampshire and England A fast bowler, now
Having graced one of the finest cricket
an impressive debut from fast bowling hope
RBS banker) found himself credit crunched
grounds, the Baltic was privileged to end its
Paul Farren, to record a victory celebrated by
as BECC’s openers got off to a blazing start
season at undoubtedly the greatest of them
Captain Kidd in the style of Henry V at Agincourt.
in the opening game, reaching 65 from the
all in St John’s Wood, for a match at Lords
As masters of the gentlemanly art of graceful
first seven overs. Henry Walpole continued the
against the corporate cricketing colossus
defeat, the Baltic was pleased to have the
carnage with a 30 ball 50 as the Baltic reached
that is Braemar Seascope. After months
chance to share a conciliatory drink with their
a competitive 167 from their allotted 20 overs.
of kidology about the relative strengths of
hosts and commence negotiations for a return
Bowling has always been viewed with
their XIs, Braemar captain Henry Kidd won
to Lords next year.
suspicion by most Baltic players (and usually the
the toss and had no hesitation in inserting
Jamie Freeland reports
reverse by opposition batsmen), however some clever off-spin from new cap Ollie Dannatt (ICAP) and Angus Proctor (ACM/GFI) kept the SECC largely in check until a nail-biting final over saw seven required, then three off the final ball after an inspired series of non-turning deceptors from Dannatt. A spliced blow, some manic running and a fumbled return saw the Stock Exchange record a two with an unprecedented tie resulting – heartily celebrated by the Stock Exchange. Frustrated but inspired, the Baltic immediately tore into City T20 cup holders Lloyd’s, and the opening fireworks exploded with even greater ferocity as the 100 was brought up in the tenth over. This time the undoubted star of the show was the princely Proctor, who in partnership with Walpole peppered the hospitality tents with towering sixes to record 52 off 37 balls to add to the century recorded against the same opponents in the all day game earlier in the year. A cameo from Chris Owen (HFW) saw the total to 174 in the 20th over and hopes were
14
The Baltic boys at JP Getty’s estate
theBaltic Winter 2011 www.thebaltic.com
Baltic Briefing
YBA night A
nother successful Young Baltic night took place at Pause in central London earlier this year. With over 200 shipping professionals aged 35 and under
attending, the gathering was one of a series of get-togethers organised by the Baltic throughout the year. A Christmas lunchtime drink is planned in the City for Young Baltic members. Contact Cris Eccleston for further details. Email: ceccleston@balticexchange.com Callum Beaumont (SSY), Fivos Ilyadu (SSY), Alexander Tsavliris (ICAP), George Gravanis (PLATOU), Eleana Danga (Vogt & Maguire), Stefanos Altsitzoglou (SSY)
Guy Heskin (Howard Houlder), Jonathan Crawford (L Dens), Kevin Havis (Howard Houlder), Adam Cook (L Dens)
Thomas Skogstad (Clarksons), Paul Farren-Rigel (Clarksons), Peter Love (Clarksons), Phil Harding (Stemcor), Jonathan Braham-Everett
Suraj Kamdar (ICAP Tanker Projects), Alexander Tsavliris (ICAP),
Mark al-Agraa & Jacqueline Norde (Clarksons) and
Jo Simmonds (Howe Robinson), Paal Norenberg (MOL London)
Sam Edwards (Beaufort Shipping), Sarah Anthony (Howe Robinson) &
Dimitrios Georgantis (Howe Robinson)
Fotis Mourikis, Jacqueline Norde & Mark al-Agraa (Clarksons)
Sam Round (PCL)
theBaltic Winter 2011 www.thebaltic.com
15
Baltic Briefing
Friends reunited T
of
he annual lunch for retired Baltic members took place in the fine surrounds
London’s
Merchant
Taylors Hall this autumn. Former shipbrokers came from as far away as Australia came to renew old friendships and relive the good old days. Michael Attwood, Tim Brown
Bernie Miles, John Wood, Laurie Castle
Tim Patridge, Derek Webb, Richard Seal
Michelle Pink and Julian Gretby
Martin Hill, Derek Smith, John Maskell
John Lemos, Diamantis Lemos, David Cleveland
16
John Proctor, Perry Perera
Eric Spall, Terry Northwood, RK Till, Ken Amess
theBaltic Winter 2011 www.thebaltic.com
Baltic Briefing
Christmas crackers David Hughes proposes some wine matches for your festive fare
W
ell, here we are at that time of year
Medoc (left side). For good value, look for the top
vibrancy of a steely, minerally crisp white wine, try
again and in not too many days
Châteaux, many of which have ‘second labels’.
a Riesling from Australia’s Clare or Eden Valleys or
time, Santa’s call will light up our
2000 to 2006 were all exceptional vintages
the rising star from Austria, Grüner-Veltliner.
households with merriment and
and most can drink now. South America offers
Puddings: Here, custard does for puddings
less expensive options: look for the excellent
as gravy to our main treat. With Christmas pud-
the gift of giving. And part of that giving is also to ourselves, for
Cabernets from Chile or Malbecs from Argentina.
ding, I find best matches are a glass of Spain’s
it is this time of the year that we decide to treat
Game: Here, I’m for the Northern Rhône
rich Oloroso Sherries, a Muscat from Rutherglen
ourselves and look to pay that bit more than usual
with its wonderfully structured wines made from
in Australia’s Victoria State, LBV Port and/or for
for our glass of Christmas cheer.
the Syrah grape. Good value comes from vil-
an additional kick to your custard – blend in a
Now what do we splash out on to match our
lages such as Saint-Joseph, Cornas and Crozes-
large glass of Advocaat.
festive feasts? Traditionalists will have turkey, oth-
Hermitage. Southern Rhône, primarily made with
Mince pies: Go best with a cup of tea!
ers seek a pairing for game, goose, roast beef,
Grenache grapes, has excellent value offerings:
However, if alcohol is still the vogue of the
pork or an eye-catching array for vegetarians.
Vacqueras, Lirac, Rasteau, Gigondas or a good-
moment, again a rich Sherry or Malmsey (and
All’s fine then with all these options until we
name Côtes du Rhône. This is also the home of
they are so good!) or even try a cold beer from
add the killer touch – gravy! Wine is meant to
a humdinger of a Rosé – Tavel. Not cheap, it has
the fridge!
match food not a hot, sometimes rich and spiced
the character to match most dishes.
concoction made to granny’s ageless recipe.
Roasted pork: Another favourite and if you’re
This is the last article of the year and I wish
But still, it’s a must. And then on to the plate go
indulging in salty crackling and a good brambly
to thank the many of you who have sent very
pickled onions, red cabbage, gherkins and my
apple sauce, then do give my surprising match
kind and supportive messages in response to
favourite, pickled walnuts – all of them soaked
a go: Gewurztraminer from Alsace; the lychee,
these missives.
in vinegar. Add to this that what is about to be
honey and spice combination really do work.
poured at the table will not be the first glass of the day...
Duck and goose: have a big following. Here, acidity is needed to counter the fatti-
And so, whatever your choice of tipple, it is Christmas, which does justify spending just a bit more for those bottles. I wish you all a most enjoya-
So what do we do? Well, in my household,
ness, especially if gooseberry compôte is on
at exactly 10.30am (or the opening of the third
show. Sauvignon Blancs from New Zealand and
ble Christmas and health and
present – whichever is earlier) we twist the cork
South Africa or the Loire Valley where Sancerre,
happiness for 2012.
from a good bottle of Champagne. I then enjoy
Quincy, Menetou-Salon & Pouilly Fumé come up
a large, pre-lunch glass of Sherry, preferably the
trumps. If red, I’d go for a good Pinot Noir from
salty-dry Manzanilla, happily knowing my wine
the New World or Burgundies from the lighter
choices are at the ready.
Santenay, Rully, Mercurey up-to the ‘big boys’ -
Wine is very much a personal desire. One
Chambertins etc., if you pocket allows.
will say game must be matched with Claret,
The cold cuts: Gammon is a big favourite on
another will shout the corner of Burgundy. So
Boxing Day in our household joined on the plate
what I am going to propose are purely my per-
by cold turkey. After the previous day’s excesses,
sonal thoughts, based on the fact that we’ll all
a vibrant, fruity red wine, preferably lightly chilled,
be pouring gravy over the food and indulging in
is required and here look to a Beaujolais-Villages,
the odd pickle.
Chiroubles or other favourites, made with the
Turkey: White – Chardonnay from Australia,
Cabernet-Franc grape from the Loire valley, the
California or France’s Mâconnaise, preferably with
wines from Chinon, Saumur-Champigny and
a little oak, will add some structure and be a fine
St-Nicolas- de-Bourgueil have delicious dry
match. If red, one of the weightier cru-Beaujolais
raspberry nuances.
such as Morgon or Brouilly and do try for 2009. Beef: Cabernet-Sauvignon from Bordeaux’s
Cheers!
These wines will also match the late-night sandwiches where, should you prefer the
theBaltic Winter 2011 www.thebaltic.com
17
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: +44 207 591 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
Email: jbradford@balticexchange.com
E-mail: dbain@balticexchange.com
18
theBaltic Winter 2011 www.thebaltic.com
Logbook
The short sea pioneers Although the roll-on, roll-off principle isn’t new, pure freight-carrying roros only started to emerge after WWII, as Ambrose Greenway explains
T
he roll-on, roll-off principle is certainly
in 1950 after the addition of a fourth ship.
National Line took delivery of the similar-sized
not new and I have a picture post-
The company was taken over by the British
Bass Trader from Newcastle NSW for service
card of a stagecoach crossing Lake
Transport Commission in April 1954 and three
between Melbourne and North Tasmanian
Windemere on a rudimentary wooden
more LSTs chartered to start up services from
ports. She could carry 1,400 tons of cargo
pontoon ferry fitted with ramps. Trains began to
Tilbury to Antwerp and Rotterdam in place of
including cars, packs of processed timber,
be transported across water on ferries as early
the original Hamburg service. All seven were
general cargo and loaded semi-trailers and
as 1833 and the first car ferry, Canadian Pacific’s
taken up by the government in late 1956
was propelled by twin aft-located 18 cylinder
diminutive wooden Motor Princess, began oper-
during the Suez crisis.
Napier Deltic turbo-charged diesels. In addition she was stabilized and had controllable pitch
ating between Vancouver Island and the main-
BTC’s increased financial muscle led to the
land in 1924. Pure freight-carrying roros, how-
delivery by noted ferry builders Wm Denny &
ever, only began to emerge after WWII.
Sons in 1957 of the first purpose-built, stern-
The next developments in short-sea roros
The freight roro was really a development
loading freight roro Bardic Ferry, a 2,550gt
came with Wallenius Lines 5-ship Aniara series
of the US designed bow-loading Tank Landing
vessel with accommodation for 17 first- and
of bow-loading car carriers between 1963
Craft (LST) and its use was pioneered by
38 second-class passengers in addition to
and 1965, the latter year also witnessing
Colonel Frank Bustard, an army transportation
13 private cars, 48 trailers, two vans and
the delivery of Holland Steamship Company’s
officer who witnessed landing trials at New
19 freight containers, crane loaded on to
Rijnstroom for a twice weekly Amsterdam-
Brighton by UK-built LSTs prior to D-Day.
the long after upper deck. She was fitted with
Shoreham shuttle. As both terminals were
An enterprising man, he had quit his job as
twin rudders and driven at 14 knots by two
within locked areas, she was fitted with
passenger manager for White Star Line before
Sulzer diesels.
twin side ramps aft. A year later near sister
propellers and a bow thruster.
its merger with Cunard in the early 1930s
Sister Ionic Ferry followed a year later and
Amstelstroom was completed for the Hull route
and established the Atlantic Transport Steam
improved sisters Cerdic Ferry and Doric Ferry
while Denmark’s DFDS introduced the first of
Navigation Co with the idea of offering cheap,
in 1961-62. Gaelic Ferry was added in 1964,
several different types of freight roro, the small
no frills transatlantic travel using two former
inaugurating the shorter Felixstowe-Rotterdam
bow-loading Suffolk which carried 25 trailers of
30,000gt Red Star Line ships. Sadly the plans
service, and over the next two years two
Carlsberg lager across the North Sea.
of this would-be Freddy Laker of his day were
US-built landing ships were purchased, the
In Germany, Henry Stahl’s Washbay Line
scotched, partly by the government, which
LST Baltic Ferry and the former LPD Celtic
built the 1,000dwt stern-door roros Alster
had invested heavily in the Cunard-White Star
Ferry, both of which had twin funnels. The final
and Lynn in 1967/68 for its Hamburg-Kings
merger and did not appreciate funding the
ASN roro was the 18-knot, 4,190gt Europic
Lynn/Boston service, the roro deck being
purchase of potential competition, and then by
Ferry, completed by Swan Hunters in 1967 for
principally for agricultural machinery, whilst
the outbreak of WWII.
the Felixstowe-Europort service, which later
Argo Line built the similar-sized Antares
saw service in the Falklands campaign.
and Arcturus to transport rolling cargo and
When peace returned, Frank Bustard & Sons Ltd’s Transport Ferry Service chartered
Meanwhile, across the Atlantic a short-lived
containers between Bremen/Hamburg and Hull
three LSTs in 1946 and modified them to
service between Florida and Puerto Rico in the
in association with Associated Humber Lines.
operate as military leave ships between
late 1950s with the trailership Carib Queen,
An internal hinged ramp allowed roro access to
Hamburg and Tilbury, their black, white and
a converted landing craft, had bankrupted
the upper deck.
blue funnel colours being those chosen for
her owners, but in 1960 Containerships Inc
France, Italy and Sweden placed freight
the projected transatlantic venture. On 21 May
introduced the first new US trailerships, the
roros in service towards the end of the
1948 a commercial service for road trucks
4,680gt/2,100dwt Floridian and New Yorker
1960s and the design concept mushroomed
and trailers was inaugurated between Preston
designed by George C Sharp and built in
during
and Larne, effectively offering a door-to-door
Baltimore in 1960 to carry both vehicles and
being greatly boosted by Per Hendriksen’s
service, and Belfast was added to the schedule
containers. The following year, Australian
Mercandia series.
20
theBaltic Winter 2011 www.thebaltic.com
the
next
decade,
its
popularity
Logbook
The Canadian-built LST Empire Baltic opened Frank Bustard’s
ASN’s Denny-built Bardic Ferry was the
Tilbury-Hamburg service in September 1946
first purpose-built freight ro-pax
Floridian and New Yorker of 1960 were the first
ANL’s trans-Tasman roro Bass Trader (1961)
US-built trailer ships
reversing into her Burnie berth
HSM’s Amstelstroom of 1966 in her second guise as Vroon’s
DFDS’s Suffolk (1966) ended her days as the Saudi Nawaf,
Mediterranean Express
seen entering Jeddah
Washbay Line’s Lynn of 1968 approaching the Elbe estuary
Argo Line’s Arneb joined sisters Antares and Arcturus in 1969
theBaltic Winter 2011 www.thebaltic.com
21
People, places, plcs
Scary times for shipping Orders – or a lack of them – for new ships have been at the centre of discussions in recent times and the orderbook is “quite scary”, according to Moore Stephens partner Richard Greiner. However, in the current economic climate, cost control is very much in focus
T
he “most important thing to notice was
survey were dominated by Europe (34%) and
the remorseless climb in operating costs
Asia (46%).
“no magic solutions”, he told delegates. While the past decade was the most prosperous shipbuild-
stopped in 2009” as owners brought
According to the latest survey, the main
ing supercycle, he said, 10 years ago there was a
costs under control, Richard Greiner
factors influencing operating cost were finance
“pretty grim outlook” in the aftermath of 9/11 and
says. He made his remarks at a conference to
costs at 26% followed by crew supply at 25%,
the dot-com crisis. At that time, the problem area
discuss the shipping accountant’s Operational
with demand trends at 14%, labour costs at
was Asia not Europe and since then there has
Costs survey for 2011, which included 26 ves-
12%, competition at 11% , raw materials at 9%,
been a complete reversal, with a decade of sus-
sel types.
with other costs amounting to 3%.
tained growth in Asia. This was an indication he
However, Moore Stephens’ quarterly surveys
Operating costs for repairs and maintenance
of confidence in the shipping sector show that
were highest for container ships this year at 8%
the industry is downbeat, with confidence at a
year on year. For bulk carriers the figure was 7.6%
The oil price was another key issue. “The
three-and-a-half year low and a downward trend
and tankers 0.8%. Operating costs for stores had
whole of the world was economically engineered
for the past six quarters.
dropped for tankers and container ships during
around $30 per barrel,” Dr Stopford said. In the
the year, with companies making savings due to
past five years “we have suddenly gone from an
using alpha type lubrication systems.
environment where energy and particularly oil
In the latest confidence survey, which ended in August 2011, concerns were expressed over
said that the economy “does change tack” and perhaps other countries should be considered.
As far as dry docking costs were concerned,
was very cheap – and we built our ships accord-
there was little differentiation as to the location of
ingly – to one in which oil costs $100 per barrel”.
Overall expected cost increases for this year
the yard doing the work or the age of the vessel.
IEA forecasts have also changed from these low
are 3.8%, with at 3.7%, a similar expectation
However, there was a small decrease for dry-
levels to as much as $140 per barrel.
for 2012, Greiner said. Respondents to the
docking for tankers and dry cargo vessels, with
In consequence, Dr Stopford said, from an
strong increases in costs
economic point of view “our society is out of tune
for container ships.
with the current price of oil”, with all that it implies
the orderbook, rising costs of marine fuels and the global economy.
in terms of cost when moving cargo by sea. The
Cost decade
other key issue is burgeoning Chinese imports.
SHIPPING’S next dec-
“We have a very strong trend here which was
ade will be a cost decade
totally unpredicted,” he said and it is becoming
not a revenue decade,
problematic to know where the volume of trade
according to Clarksons’
is going to go next. However, he said “we are
director Martin Stopford.
moving into the 2010s with a scenario which is
While the past decade
During the 2000s, the “only possible strategy
on the water, the empha-
was to get ships on the water”. In the effort to get
sis now was to search
ships, the price was negotiated upwards and for
for solutions to get costs
a panamax topped $90m. Today, he said $27m
down, he told a Moore
was “a bit optimistic” but he added “we are not
Stephens conference on
down to real distress levels yet”.
operating costs.
Richard Greiner, Moore Stephens partner
22
not so different from the last decade”.
was about getting ships
The issue now for ship yards is that they
The emphasis on the
have nearly doubled capacity during the boom
environment, and new
time and “are now getting geared up to compete
environmental regulation
with each other to maintain their capacity during
will mean more costs and
the coming years when probably there won’t be
theBaltic Winter 2011 www.thebaltic.com
People, places, plcs Shipyard
over-capacity
pollution incident involved the duty officer
will mean cheaper ships,
attempting to make a Skype call on his laptop
lower earnings and a
during his watch. A VDR playback revealed that
strategic focus on cost
the officer of the watch was listening to a news
control. Bunker prices
bulletin from his home country, which was being
might now be $500 per
streamed through a laptop computer. The officer
tonne when the ship was
appears to have missed a radar target and a VHF
designed for $50 per
warning call while listening to the breaking news
tonne, and low sulphur
from home.
alternatives might push
This is far from the first time that the clubs
the prices to $900, with
have warned about technological distractions,
IEA forecasts of $1000 to
the follow-on from the ARPA assisted collision,
$1500.
where bridge teams simply fail to look out of
“Cost
management
the window.
will have a much greater
The club says: “On-board communication
urgency than in the past
has improved significantly over the past few
decade.”
years, with technological advances enabling crew to use mobile phones and laptops to stay
IMO measures reduce CO2
Clarksons’ director Martin Stopford
enough ships to fill all the yards”.
in contact with their family and friends who are ashore.
A NEW study commissioned by the IMO on the
“However, the use of such equipment at inap-
impact of mandatory energy efficiency measures
propriate moments may distract crew from the navigation or operation of the ship.
The position of the forward order book is
for shipping shows that they will lead to “signifi-
looking a “bit thin” he said. From 2012 “the order
cant” reductions in greenhouse gas emissions, in
“Another issue is the risk of being exposed to
book falls away fairly sharply and that is going
particular as far as carbon dioxide is concerned.
excessive information and simply being unable
to put a lot of pressure on prices”. According
The study found that by 2020 an average
to process it all. Bridge equipment is increas-
to Dr Stopford, after the credit crisis yards
of 151.5m tonnes of annual CO2 reductions are
ingly sophisticated and it can provide the crew
dropped their prices to “somewhere not far off
expected which the study estimates will increase
with access to extensive information regard-
break-even”.
to an average of 330m tonnes annually by 2030.
ing the relative positions of other ships. But,
There has been a renaissance in the off-
The measures, the report says will mean a sig-
unless it is used in a focused manner, it can
shore oil business and at the moment offshore
nificant reduction in fuel consumption, saving fuel
confuse, rather than clarify, and ultimately prove
represents 30% in value of the order book.
costs in the industry.
counter-productive.”
In terms of future trends, “everybody is feeling
Mandatory measures to reduce emissions were agreed at the IMO’s Marine Environment
Club warns
Substantial over-capacity is one issue, with a
Protection Committee meeting in July this year,
Panama Maritime Chamber has opened up its
lot of yards trying to get capacity under control.
with a new chapter on regulation on energy
membership to international shipowners with
What happens in terms of future investment
efficiency for ships added to the MARPOL con-
vessels registered in Panama – making it
and whether ship yards are closed is a matter for
vention. The rules are expected to come into
the
speculation.
force on January 1,2013. They make the Energy
owners’ Association.
a bit nervous”, he said.
equivalent
of
a
Panamanian
Ship-
The second issue, according to Dr Stopford,
Efficiency Design Index mandatory for new ships
José Digeronimo, chairman of the Panama
is going to be the oil price. “It looks like oil and
and also a Ship Energy Efficiency Management
Maritime Chamber said: “There are over 9,000
energy are going to be much more expensive”.
Plan for all ships.
vessels registered under the Panama flag, and
This is coupled with a fleet of ships which were
The report was prepared for IMO by classifi-
our aim is to involve and help shipowners with
designed for a much lower oil price environment.
cation societies Lloyd’s Register and Det Norske
representation, information, education, network-
Three years is not very long for a massive indus-
Veritas. Among the findings, the report estimates
ing, trade missions and most important, lobbying
try like shipping to get to grips with this. With a
that estimated reductions of CO2 for combined
on their behalf”.
quadrupling of the price of bunker oil “you are
EEDI and SEEMP from the world fleet mean a
Digeronimo added: “I am sure that by joining,
going to change the business”, he said.
fuel cost saving of around $50bn in 2020 and
shipowners will realise added value, as we are
The focus on ships and logistics is going to
$200bn by 2030, if using fuel price increase
the shipowners’ representatives in all the tri-
change over the next 10 years. The IMO is targeting
models taking into account the switch to low
partite meetings being held in Panama in respect
this area, which includes the Energy Efficiency
sulphur fuel in 2020.
of the Maritime Labour Convention.”
Club warns on costly distracting technology
ILO member states, representing over 54 per
taking existing technology, looking very carefully
THE London P&I Club has warned that improve-
parties to the Convention.
at how we want to apply it today and getting the
ments in telecommunications technology on
“Of the 20 ratifications, nine have been
technology right. We have to search for solutions
board ships can create unwelcome distractions,
received in 2011. It is expected that the addi-
to get our costs down.”
leading to casualties.
tional 10 ratifications will occur in the next two
Design Index and emissions. Dr Stopford’s view is “we are being driven back to the basic economics of improvement engineering, which is
He continued: “With the latest ratification, 20
Shipyard over-capacity, energy costs and
In its StopLoss Bulletin, the club notes
the environment are all correlated, he said.
that an alleged causative factor in a recent
theBaltic Winter 2011 www.thebaltic.com
cent of the world gross tonnage of ships, are now
months making it possible for the MLC, 2006 to enter into force in 2012.”
23
Comment – Michael Grey
A maritime key to recovery? I
f you are a certain age, and hail from the United
selling from a manufacturing industry for too
Kingdom, you might well remember the post
long regarded as passé , when compared to the
war export effort, with which it was hoped
fashionable products of the City.
to retrieve this kingdom from the depths of
We could also start getting a bit more
desperate indebtedness that had accompanied
celebratory about the balance of payments and
the cessation of hostilities. Creative minds in
the contribution of invisibles like shipping and
the ministry of propaganda (there was a less
tourism to the national wealth-making machine.
pejorative name for it) who had spent the war
It is not that long ago that the publication of
years dreaming up campaigns to help us win
the “invisibles” figures was seen as a major
by chopping up aluminium saucepans to build
event in the Chamber of Shipping and the
Spitfires and warning us to keep our secrets
Baltic Exchange, with press conferences
to ourselves, now urged every manufacturer to
attended by city scribes who would gasp at
“Export or Die!”I suspect it was more of a threat
the ways in which our ships and shipbrokers
of commercial extinction than being dragged
were generating wealth for the nation, with
away from the lathe to face a firing squad for
TV broadcasts showing the same queue of
concentrating on domestic production, but there
lorries outside the dock gates shown every
was no equivocation.
year, illustrating the staggering sums that were
And it was an immensely successful
being earned for chartering and hauling goods
campaign, as there was an immediate surge in
around the world in British bottoms. There was
overseas exports; quite remarkable considering
always a special paragraph emphasising the
the privations on the home front, which saw
importance of the “Cross Trades”, which always
rationing maintained for many years, and a curb
deserved an explanation for the benefit of those
on domestic consumption. Firms which had
Michael Grey
ill-informed hacks who thought it was some sort of market in international anger.
been effective in selling goods overseas were lauded to the skies in Pathé Newsreels and in
about 10 high and two miles long at Felixstowe,
the newspapers. There was something heroic
waiting to be shipped back to the east.
But would it work today, after a generation when such matters became almost peripheral
and patriotic about exporting, filling up all those
And while we had the same sort of mad
and the UK merchant navy withered away to
crates which would soon be on their way to the
imbalances in the Pacific trades, it was clear that
so very little, and the money the “Red Ensign”
docks to get us out of hock.
the only commodity that Europe was shipping
fleets were earning found its way to bank
So it is interesting to see that there is
to China was money. Now the Chinese have
accounts in Tel Aviv and Copenhagen, Paris and
increasing attention being given to the way in
it all, and they are hard put to spend it, being
Miami, along with all those remittances to Manila
which Europe’s mostly negative trade balance
sensibly reluctant to purchase European debt,
and Mumbai?
might be shifted to reduce the terrible debt
no matter how beguiling the bonds are dressed
burden that spills over from the Eurozone to
up to appear.
It’s not that long ago there was a living to be made in international shipping, and the UK was
all the surrounding countries in the EU. It is
So it is international trade that will get us
the carrier to the world. Is it just fanciful to think
clear that we cannot go on the way we have
out of the fix we are in, just like it did in the
that shipping, which is every bit as important
been, with these great post-Panamax argosies
1940s and 50s. It is a riposte to all those
as the principal conduit of trade, could return
from the east arriving at our ports stuffed with
sandal-wearing vegetarians who want us to buy
to these shores? A huge proportion of all those
consumer durables and all the trappings of a
only home-produced goods and to subsist on
exports that dragged the UK out of the depths
comfortable life, returning to the Orient with
locally grown turnips. It is a powerful spur to
following the last great conflagration were in
thousands of empty containers and those with
manufacturers who, for too long, have dallied
ships, which were earning for this country. Sea
cargo in them filled with shredded plastic and
with the domestic markets, or those across the
trade is every bit as legitimate a way of wealth
waste paper, with the odd box full of Cheddar
Channel, when they should have been learning
creation now as it was then, only today, alas, it
cheese or Scotch whisky. It is not that long ago I
Mandarin and Cantonese, Portuguese (for the
tends to be building wealth for others. “Export
went to see the “Great Wall of China” which was
Brazils, of course) and leaping on aircraft with
or die!” said the urgent posters of the post-war
not the ancient monument stretching thousands
their order books for these distant places.
years. It’s a bit dramatic for the 21st century, but
of miles from Beijing, but a stack of empties
Always supposing they have something worth
the message is clear enough.
24
theBaltic Winter 2011 www.thebaltic.com
Tankers
Torrid times for tankers Frontline, Hoegh and Genmar are just some of the tanker companies feeling the heat as the market meltdown continues
T
anker shipping’s biggest players have
deficit rise almost three-fold in the first nine
this year and the orderbook is now at its lowest
been struggling to restructure their
months of the year although the company’s boss
level in six years.
finances. As Frontline put it, when
Sveinung Stohle remained upbeat on prospects
announcing its third quarter results last
going forward.
“This is encouraging, as continued ordering discipline combined with earlier scrapping of
Last month also saw the announcement
vintage double hull tankers will be required to
that Danish owner Erria’s negotation with Uni-
bring about a recovery in our crude transportation
“Rates are currently at operating cost levels
Tankers looks set to result in a sale of Erria’s nine
markets.”
with no contribution to capital and vessel values
strong fleet of chemical carriers in exchange for
have fallen approximately 25-50%, depending
a 15% stake in Uni-Tankers.
month, “The tanker market has shown a strong negative development in the last two years.
The woes of the tanker market have led some observers to suggest that scrapping
on age, during the last year. If the weak market
Scorpio Tankers announced last month that
is the route to follow. Some analysts predict
continues it is likely to lead to significant financial
it is planning a public offering of 7m shares of
that the larger tankers will not survive past
problems for the whole tanker industry.“
common stock to fund the purchase of two new
their fourth survey because of, among other
In announcing its results, Frontline said
52,000 dwt tankers that form part of negotiations
issues, their un-ecofriendliness in the current
that while it had secured funding for two of
with Hyundai Mipo yard in South Korea. Part of
regulatory environment. However according to
its newbuildings, another five remained to be
the proceeds of the offering, the company says
a report by Bloomberg, analyst Alex Adamou, of
funded and if solutions were not found the
are to be used to repay outstanding debts
VesselsValue, believes that a number of vessels
company could run out of cash early in the new
under the company’s revolving credit facility with
are now more attractive for their scrap value as
year.
Nordea Bank.
asset values fall and freight rates plunge.
None would doubt the commitment of the
In announcing OSG’s results chief executive
company to finding the necessary solution to
Morten Arntzen revealed that: “Our international
its problems although this may result in a
flag tanker markets deteriorated further in the
Cargo contamination
substantial restructuring of the way it and its
third quarter as new deliveries outpaced the
Contamination is one of the major sources of
subsidiaries operate.
market’s ability to absorb them and our Asian
cargo claims in the tanker sector, the UK Club
Problems at Frontline, ratings agency
customers continued to substitute shorter
has warned.
Moody’s was quoted as saying last month might
haul Middle East crudes at the expense of
lead US Stock Exchange Listed Ship Finance
West African crudes. Economic and political
contamination Claims Checklist” which identifies
International to revisit its charter contracts.
The
club
has
prepared
a
“tanker
uncertainty continue to run high across the
the main causes of cargo contamination arising
Meanwhile last month also saw General
globe, with European sovereign debt issues
from both on board and shoreside and compiles
Maritime and its subsidiaries, except those in
and an uncertain fiscal and monetary picture in
the key points to consider in seven sections
Portugal, Russia and Singapore file for relief
Washington impacting consumer and business
running from the pre-loading phase through to
under Chapter 11 of the US Bankruptcy Code
confidence.
discharge and sampling.
and in conjunction with the filing says that it has
“The potential fallout has prompted analysts
Key points to be considered include whether
secured new capital of at least $175m as a result
to trim their global growth and oil demand
different grades of cargo can be arranged
of agreements with key lends, including Nordea
forecasts. This has also resulted in much tighter
to maintain the degree of separation required
Bank on a financial restructuring of the company.
lending markets for the shipping industry. As a
and whether the ship can maintain the required
Gas carrier Hoegh LNG also saw its net
result, new tanker orders have fallen dramatically
cargo carriage and discharge temperatures.
theBaltic Winter 2011 www.thebaltic.com
25
S&P
Making a market Basil M Karatzas offers a ‘seakeeping analysis’ of vessel asset prices
A
lthough the second half of 2008
mental way. The limited transactions that took
blowing wind as possible. Actually, it seems
raised sea-changing developments in
place then were from owners who got taken
that headwinds in some shipping segments
the shipping industry that brought
by surprise by the vertigo of the perfect storm,
and crosswinds in other have caused vessels to
a vertical dive to the very bottom of
and thus most of those transactions were under
keep operating at below break-even levels burn-
distress and usually at rock bottom prices.
ing cash and depleting working capital for about
the abyss for freight rates, within nine months
Almost three years later, the economic recov-
the markets bounced respectably back to
ery has been agonisingly slow, almost like a
approximately break-even freight levels.
a year now, and thus have started pressuring downwards asset prices.
At that stage of the cycle, most companies
slightly leftwards tilted L-shaped graph that
Although 2011 started on a even keel and
and shipowners still had working capital aplenty,
some economists had expected. With new
with full sail dreams in terms of vessel pricing,
and the drop to the bottom had been as swift as
vessel deliveries flooding the market on a daily
the momentum has been deteriorating ever
the ensuing rebound, and thus held out a sliver
basis, a “jobless recovery” depending on mon-
since, even more so since the end of the sum-
of hope for a more fundamental recovery.
etary policies running out of funding in the West
mer. The volume of deals has remained sub-
In addition the “priming” of the world econo-
and a slowing Chinese economy, and a political
dued overall with a “buyers’ strike” in effect for
mies and the generous “quantitative easings”
crisis brewing in the Continent, freight rates have
transactions at prices that are not clearly in deep
was at “full steam ahead” setting, and there were
been hovering low, bouncing along the bottom,
“value-territory” for any type of vessel. “Market
extenuating circumstances in certain market
well below levels sufficient to make payments for
noise” has been on an increasing trend with
segments. For example, in the first half of 2009,
interest and amortisation; and, in certain seg-
“chat” of circulation in the market of candidate
30% of the VLCC world fleet was tied up for
ments, most notably in the crude tanker market,
vessels for “distressed” sales or restructurings.
storage projects on behalf of financiers playing
even below vessel daily operating expenses.
For modern vessels, however, it cannot be
the oil contango game and thus artificially main-
While 2008 saw abrupt changes in the
said with absolute certitude that asset prices are
taining a higher tanker tonnage demand than in
markets, since last year the markets have been
falling in an “expected”, sizeable, quantifiable
actual terms. All these factors meant that vessel
experiencing the doldrums, a complete apnea
manner, since the activity for the sale of such
asset prices didn’t fluctuate as dramatically as
as far away from any prevailing winds, tailwinds,
vessels is as thin as a spider’s web. An obvious
one might have expected, at least in a funda-
tradewinds, westerlies or any type of forward
limitation of any value assessment for very
ASSET CLASS
JAN O1, 2011
JUNE 30, 2011
PROMPT RESALE
10-YR VESSEL
PROMPT RESALE
VLCC
$108.0
$60.0
$105.0
OCT 30, 2011
10-YR VESSEL
PROMPT RESALE
10-YR VESSEL
$58.0
$99.0
$35.0
TANKER SUEZMAX
$69.0
$40.0
$70.0
$40.0
$63.0
$25.0
AFRAMAX
$52.0
$28.0
$52.0
$27.0
$52.0
$23.0
MR TANKER
$36.0
$19.0
$38.0
$19.0
$36.0
$19.0
DRY BULK CAPE
$59.0
$38.0
$55.0
$35.0
$53.0
$28.0
PANAMAX
$36.0
$28.0
$34.0
$26.0
$33.0
$20.0
SUPRAMAX
$31.0
$24.0
$31.0
$22.0
$29.0
$20.0
HANDYSIZE
$28.0
$21.0
$27.0
$19.0
$26.0
$17.0
Table 1: Selective asset prices. Data source: Karatzas Marine Advisors
26
theBaltic Winter 2011 www.thebaltic.com
S&P modern vessels is that such numbers have more
changes in asset prices is performed for both
drop in price translates to a much higher loss
of an “indicative” than “predictive” merit. There
prompt resale and ten-year old vessels for the
in absolute money for more expensive (mod-
have been four transactions for modern VLCCs
first half of 2011, the period between July and
in 2011, with two of them at the beginning of
end of October 2011, and year-to-date until
• Further to this point, modern vessels with
the year under the auspices of the creditors to
the end of the October. The first half of the year
high cost basis present a higher risk for price
a buyer provided with generous financing even
has shown that asset prices have held better
finding as an equitable percentage spread
by pre-Lehman Bros excess liquidity standards,
than the later part of the year; modern vessels,
between “bid” and “ask” can translate to
and two vessels to an industrial buyer six months
especially tankers, held better than older or dry
a much higher aberration from the market
ago. At least there have been four transactions
bulk vessels. MR tankers and supramax and
price, a risk not well bearable by buyers.
in the VLCC market that are deemed enough
handysize vessels seem to outperformed the
• At a time when banks are not cheaply funded
to “make a market”. However, there have been
remaining sectors in terms of least amount of
and have to be conservative with their liquidity,
zero sales whatsoever for resale suezmax
decline, an observation also verified by the over-
usually modern, expensive vessels are more
tankers year-to-date and thus any assessments
all optimism (or better phrased, lesser extent of
difficult to be debt financed; banks prefer
are based in last year’s benchmarks when
pessimism) in those sectors.
smaller loans and cheaper vessels rather
more than $5bn were invested in this particular
ern) vessels than cheaper tonnage.
than concentrating their financing on smaller
However, year-to-date the situation has been
number of sectors or assets.
a bit more sober as it seems that modern
market sector. For smaller or older tanker, dry bulk and
(prompt resale) tanker and dry bulk vessels lost
• Modern tonnage is usually technologically
containership vessels, there has been more
6-10% of their value, while ten-year old vessels
up-to-standards and therefore provides a
activity in the open market and at arm’s length
have dropped in price much more drastically.
lower risk of technological obsolesce and
transactions than modern, expensive tonnage.
Ten-year old VLCCs and suezmax tankers lost
thus better prospects to weather out the
Surprisingly enough, since the end of the sum-
close to 40% of their value since the beginning
cycle and any new regulations that might
mer an increased volume of transactions took
of the year, while equally sized dry bulk vessels
place for the first and second generation of
showed a “better” performance with a loss of
• Finally, modern vessels, even those with a
double-hull tankers, and all such transactions
only about 26%. Overall, MR tankers for both
high cost basis, make much better candi-
took place at levels significantly below ‘last
prompt resale and 10-year old vessels retained
dates for restructuring, equity injections, and
done’. Most of such transactions, in our opinion,
their value, a corollary to the fact that the MR
soft financing than candidates for outright
do not satisfy the definition of Fair Market Value
tanker was the first to take off like a rocket after
sales in the open market; and, of course,
(FMV) since they mostly took place for either tax
Hurricane Katrina and the first to crash down to
“sales” on such bases are far apart from
reasons (leases) or under the strong ‘encourage-
earth, with most of the pain behind the sector, at
the parameters for the definition of the Fair
ment’ of the creditors.
least at tonnage supply and demand dynamics
Market Value (FMV).
Based on market data compiled by Karatzas
appear on the horizon.
are concerned.
Marine Advisors, Table 1 depicts “market
Again, these calculations are based on
Vessel asset prices have fallen more precipi-
expected” asset prices for prompt resale and
observable data and under the assumption
tously for 10-year old vessels than prompt
10-year old vessels in both the tanker and
that such transactions are always open market,
resale tonnage. It’s to be seen whether the
dry bulk markets at three points in 2011: dur-
arm’s length transactions, an assumption that
‘market’correctly discounts a prolonged and
ing the first week of this year, the end of the
has to be questioned in certain circumstances.
anaemic recovery in shipping.
second quarter and the end of October of this
Modern vessels have not been transacted
year. Such data are based on observations
as frequently as older tonnage so far this year. A
Basil M Karatzas is Senior Managing Director with
from
cursory list of explanations may include:
Karatzas Marine Advisors & Co, a maritime advi-
represent arm’s length asset exchanges taken
• They tend to have a higher cost basis and
sory firm based in New York, and specialising in
place under no compulsion either from the buyer’s
therefore their transaction might entail a
shipping finance advisory, restructurings and place-
or seller’s side.
bigger loss of money (equity and debt) in
ments, vessel brokerage and appraisals. E-mail:
absolute terms; an equitable percentage
info@BMKaratzas.comand at +1 713 545 5990.
market
transactions
assumed
to
On Table 2, a basic calculation of percentage
ASSET CLASS
H1 2011 PROMPT RESALE
Q2 2011 10-YR VESSEL
PROMPT RESALE
Y-T-D 2011 10-YR VESSEL
PROMPT RESALE
10-YR VESSEL
TANKER VLCC
-2.78%
-3.33%
-5.71%
-3.33%
-8.33%
-41.67%
SUEZMAX
1.45%
0.00%
-10.00%
0.00%
-8.70%
-37.50%
AFRAMAX
0.00%
-3.57%
0.00%
-3.57%
0.00%
-17.86%
MR TANKER
5.56%
0.00%
-5.26%
0.00%
0.00%
0.00%
CAPE
-6.78%
-7.89%
-3.64%
-7.89%
-10.17%
-26.32%
DRY BULK
PANAMAX
-5.56%
-7.14%
-2.94%
-7.14%
-8.33%
-28.57%
SUPRAMAX
0.00%
-8.33%
-6.45%
-8.33%
-6.45%
-16.67%
HANDYSIZE
-3.57%
-9.52%
-3.70%
-9.52%
-7.14%
-19.05%
Table 2: Percentage changes in asset prices. Data source: Karatzas Marine Advisors
theBaltic Winter 2011 www.thebaltic.com
27
BIMCO
Taking time to make the change Revising BIMCO’S SALEFORM is a hot topic for S&P brokers, as Grant Hunter explains
T
he revision of any standard contract
would certainly benefit from a modest update
misunderstandings and uncertainty. Given the
as internationally used and univer-
to reflect commonly applied amendments and
agreed modest scope to the revision, the team
sally accepted as SALEFORM is not
rider clauses. Of equal importance to those
were able to prepare a “consultation” draft
a matter lightly undertaken. For the
consulted was that the general principles and
in just a few months of beginning the
past year, a drafting team from BIMCO, work-
structure of SALEFORM should be retained.
project. The first draft was reviewed and well-
ing together with brokers from the Norwegian
It is a contract that is very familiar to those in
received by BIMCO’s Documentary Committee
Shipbrokers’ Association, (the original authors
the S&P sector and its provisions are very well
in June 2011.
of the form) have carried out a thorough
tried and tested. The drafting team’s challenge
From the outset, BIMCO felt that an
review of this contract under the watchful gaze
was, therefore, how to make this well-used
essential part of the revision process for such a
of the industry.
international sales contract even better.
universally used contract as SALEFORM should
The process began with market research
Armed with pages of comments and
be to give the end-users of the contract an
among users of the contract worldwide to
suggestions from the initial industry consultation,
opportunity to comment on the updated draft
establish whether an update was needed and,
the drafting team began its work in December
version before it was put forward for publication.
if so, to what extent the form should be revised.
2010. The team identified the key clauses
A series of international open seminars were
From this initial research the feedback was
most commonly amended in SALEFORM
arranged in Asia and Europe during September
very clear – while the present SALEFORM
and identified areas where ambiguity in
and October where buyers, sellers, brokers and
largely met the current needs of the industry, it
the existing version had led occasionally to
lawyers were able to review and comment on the draft revised contract. All the seminars were well attended and provided an excellent forum for discussion of SALEFORM. The feedback received was constructive and positive towards the revised draft. In a series of final meetings during October, the drafting team went through all of the comments received from those who attended the seminars – many of those comments simply affirming the decisions already made by the drafting team in terms of the scope and extent of the revision. Some of the key features of the revised SALEFORM include: • Clause 2 (Deposit) – the lodging of deposits is no longer limited to “joint” accounts – other types of account acceptable to the parties may be used, such as an escrow account held by a broker or lawyer. • Clause 3 (Payment) – the ’93 edition of the agreement required the buyer to pay the purchase price on delivery of the vessel,
Contract end-users had the opportunity to comment on the updated draft version of SALEFORM
28
theBaltic Winter 2011 www.thebaltic.com
but made no provision for the fact that a
BIMCO deposit had already been lodged. The new edition makes it clear that the buyers are to release the deposit and pay the “balance” of the purchase price, as well as any additional sums due (such as cost of bunkers). • Clause 5 (Time and place of delivery and notices) – to assist the parties, the revised agreement contains new notice requirements for the sellers to notify the buyers of the vessel’s itinerary 20, 10, five and three days from intended date of tendering notice of readiness. • Clause 6 (Divers inspection/drydocking) – this Clause has perhaps received the most attention during the revision. The order of the sub-clauses had been changed so that underwater inspection is now the primary option, as this reflects the common practice in the industry. The buyers are to give the sellers sufficient notice of their intention to carry out a divers’ inspection – at least nine days before the vessel’s intended date
The seminars provided an excellent forum for discussion
of delivery. • The Clause 6 now contains a clear
• Clause 7 (Spares, bunkers and other items)
now be faxed or e-mailed to the closing
statement that the sellers cannot tender
– this Clause has been partially re-drafted to
meeting with the original to be sent as soon
notice of readiness before completion of
make a clearer distinction between items on
as possible after delivery. This reflects a
the underwater inspection. This is an issue
hire or owned by third parties and which are
common timing issue with this document in
on which the ‘93 edition is silent and which
not part of the sale, and items that were on
has been the source of uncertainty and
board at the time of inspection that were hired
• A more detailed provision relating to the
occasional dispute.
ship sales.
or belonged to third parties, which are to be
vessel’s Continuous Synopsis Record has
• The allocation of costs and expenses for
replaced by the sellers before delivery takes
been added to Clause 8 as well as a
the underwater inspection and, if required,
place. The distinction is made to ensure that
provision that requires the sellers to provide a
drydocking has been made much clearer
the buyers are not left without items essential
letter stating that the vessel is not, to the best
in the new edition. The basic principle is
to the safe and legal operation of the vessel,
of their knowledge, blacklisted.
that the buyers pay for inspections and
which would prevent the vessel from sailing
drydocking unless any damage or defects
once sold (such as lifeboats and lifejackets).
The final draft of what will be codenamed
are found, in which case the costs and
• Clause 8 (Documentation) – here the
SALEFORM 2012 took priority place on the
Certificate of Transcript of Registry may
agenda for adoption when BIMCO’s 60-strong
expenses pass to the sellers.
Documentary Committee meet in Copenhagen on 10 November. The
industry
consultation
process during the development of SALEFORM 2012 and the huge interest it has generated in this project has spurred the drafting team to get the new edition completed within the space of a year. This is no mean feat when it is considered that the average time taken to revise an existing standard form or develop a new one is around two years. Although we cannot promise to have SALEFORM 2012 “in the shops by Christmas”, BIMCO will be working very hard to have the revised contract, accompanied by detailed explanatory notes, available by January 2012 in electronic format on idea – BIMCO’s online charter BIMCO is aiming to have the revised contract available at the beginning of 2012
theBaltic Winter 2011 www.thebaltic.com
party editing system.
29
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Dry Bulk
Capesize confidence falters PricewaterhouseCoopers report warns of a distorted shipping market
A
ccountant PricewaterhouseCoopers is
Orders of capesize tonnage have remained
Vale and Rio Tinto are two companies that
warning that there are risks of a dis-
high because of confidence in the growth of the
are carrying an increasing amount of iron ore on
torted shipping market, particularly as
Chinese market, the report suggests. However,
their own ships. According to the report, Vale
far as capesize tonnage is concerned
it warns: “The market also faces longer term
already carries 25% of its iron ore and its VLOC
as the industry attempts to tackle the burdens of
demand side problems. Capesize demand is
fleet will increase to 19 in the next two years,
a sizable orderbook and stagnating demand for
dominated by the prospects for Chinese infra-
with a further 16 VLOCs being built for Berge
iron ore deliveries. The dry bulk shipping report
structure spending.”
and Oman Shipping, which will be chartered to
Capes of no hope? suggests there will be a 40%
Infrastructure investment in China has been
the Brazilian giant. Rio Tinto, meanwhile, has
increase in the existing capesize fleet within the
significantly higher in recent years when com-
three VLOCs on order and, the report says:
next three years.
pared with other high-growth Asian economies,
“Since the iron ore producers will ensure high
The report says that while there are 1,200
with the report suggesting a Chinese investment
utilisation of their own vessels first, the effect
capesize ships with a value of $45bn, a further
of 13.5% points more of GDP each year than the
of falling capacity utilisation on the rest of the
450 are on order over the next three years.
average of its closest peers.
market will be magnified.” The report concludes, however that acquisition of large fleets of VLOCs
Although some of these orders may be can-
“During the long economic life of much of this
celled, the accountant warns that any assump-
investment, this can largely be seen a cumulative,
tion that demand for iron ore and coal will
suggesting China has invested twice as much
When the report was produced, Smith
continue its upward trend – with all that implies
during this period as its peers did. At the same
said: “While rates in the capesize sector have
for capesize tonnage – seems over-optimistic.
time, the consumption side of GDP necessarily
improved over the past three months, we see
grew more slowly, meaning the consumption to
this as a temporary respite. Continued over-
investment ratio was even poorer.”
capacity is likely to push rates back towards
According to the report, China has significantly over-invested in recent years “leading to
“is unlikely to be advantageous”.
operating costs, creating significant pressure for
excess capacity across a range of fixed assets.
PricewaterhouseCoopers says that due to
Current levels of investment are so high that
high levels of spending on infrastructure projects,
even the government’s ambitious infrastructure
economic targets can be achieved simply by
While it has been suggested that increases
plans can be met with no additional input growth.”
“maintaining the current level of output of new
in coal imports could provide a glimmer of hope,
owners trading in the spot market.”
PricewaterhouseCoopers
roads, rail, and so on. This implies no growth will
China has a number of initiatives to limit the need
says, other emerging markets are not big
occur in demand for the key raw material inputs
for coal imports. With its own supplies of coal,
enough to replace China in terms of demand.
for these types of investment.”
the government has been investing in railways
In
addition,
“The increasing fleet sizes of the major iron
According to David Smith, assistant direc-
and canals to transport it round the country and
ore miners will exacerbate the effect on the
tor of PricewaterhouseCoopers strategy, the
also developed a high voltage power network to
capesize market” .
expected growth in iron ore demand is unlikely
transmit coal powered electricity.
Although India has been highlighted as a
to materialise and “will be exacerbated by
PwC expects that rates are likely to fall
potential alternative source for iron ore imports,
the vessel building programmes being under-
further in the medium term because of over-
it has its own domestic supplies and the report
taken by the large mining companies. This
tonnaging and “owners should continue exist-
considers that even very rapid growth “would
will decrease the amount of cargo available
ing despite current valuations”. Alternatively, it
have a minor effect, compared to small changes
on the spot market, at a time when the fleet is
suggests, long term charters might be a good
in Chinese demand”.
increasing dramatically”.
strategy despite current rates.
theBaltic Winter 2011 www.thebaltic.com
31
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Offshore
Offshore upbeat Offshore companies remain upbeat on prospects, although there was a warning from the US House of Representatives over Deepwater Horizon
U
S House of Representatives Sub-
marine environmental protection mission has
cannot afford to sit back and take our time in
Committee on Coast Guard and
withered over the past decade as a result of
implementing the lessons learned”.
Maritime Transportation held a meet-
an emphasis on homeland security missions,”
ing last month to review the latest
LoBiondo said.
Dockwise results
investigations into the causes of the Deepwater
He also said he was concerned that officials
Horizon oil spill and the US Coast Guard’s
at all levels were unfamiliar with the National
Heavylift specialist Dockwise posted a net profit
response to it.
Contingency Plan, which covers oil spill
of $8m for the third quarter of the year, compared
According to sub-committee chairman Frank
response. “I am particularly alarmed that senior
to $3m in the second quarter of the year, with
LoBiondo, nearly all reports noted that area
leaders at the Department of Homeland Security
revenues of $113m, up from $109m despite
contingency plans were not adequate for a spill
were either unaware or simply misunderstood
tough market conditions. Operational highlights
of the magnitude of the Deepwater Horizon and
how the plan functions.” He added that units
for the third quarter included contract awards
needed to be updated to include protocols for
like the Deepwater Horizon continue to operate
of $135m, including the Claire Ridge project for
the use of dispersants and other spill response
in US water and will shortly be deployed in
BP, and the start of steel cutting for Dockwise
technology, as well as the latest information on
Cuban waters. “Each of these operations, if not
Vanguard, which already has the FOSO Goliat
environmentally sensitive areas.
properly regulated by the Coast Guard with the
booked as cargo, which the company says at
“I am also concerned with findings indicating
support of the department, could potentially
60,000 tonnes is a transport record.
that the Coast Guard’s oil spill response and
cause another catastrophic spill. As such we
According to chief executive Andre Goedeé: “Tendering activity continues to be strong, and in a period which has seen several successes, security the transport of the FPSO Goliat on the Vanguard is an outstanding achievement. Dockwise will be proud to break its own record for the world’s heaviest single cargo, and the award is the best endorsement of our decision to proceed with our new vessel”. According to the company revenues in the heavy marine transport segment for 12% lower in the third quarter than in the second, with static demand from the military and port and marine industry. The company said it expected to see “subdued revenues in the conventional heavy marine transport market persisting into 2012. Measures taken to mitigate the impact of market conditions include changes to contractual terms with clients, an adjustment to the payment schedule on the Vanguard and the sale of Dockwise subsidiary Dockwise Yacht Transport to Coby Enterprises Corp. According
to
Goedee,
Dockwise
is
now focused on the oil and gas industry and its core business of heavy marine transport, transport and installation, and also logistical management.
Sub-committee chairman Frank LoBiondo
theBaltic Winter 2011 www.thebaltic.com
33
Offshore Bourbon upbeat
Farstad finances
The Jack and St Malo fields are located within
Although some owners may be feeling the pain
Offshore services operator Farstad posted
25 miles (40km) of each other approximately 280
of rising oil prices, Bourbon was upbeat about
operating income of NIOK970.2m for the third
miles (450km) south of New Orleans, Louisiana,
prospects in the fourth quarter. As Bourbon
quarter against NOK867.9m for the same period
in water depths of 7,000 feet (2,100m). The
chief executive Christian Lefevre put it: “In a
last year.
project will comprise three subsea centres tied
favourable oil and gas environment, the price
It said in is quarterly report that while the
back to a hub production facility with a capacity
per barrel of Brent – $113 over the quarter
financial and political situation in Europe has
of 170,000 barrels of oil and 42.5 million cubic
– remains at a high level and the North Sea
not resulted in uncertainty over oil prices, “the
feet of natural gas per day.
activity stated to recover before the steady
uncertainty is first and foremost related to idle
“Winning this major power umbilical contract
upturn in rates for offshore vessels worldwide.
tonnage and the newbuild activity, especially for
for the Jack and St Malo fields is an important
Prospects for increasing utilisation rates and
the markets in Asia. The rate level and the utility
development for Nexans since Chevron is one
daily rates are set fair for the fourth quarter in
rate for supply vessels in Asia have been at low
of the leading leaseholders in the Deepwater
deep and shallow water offshore”.
levels the whole year as a consequence of the
Gulf of Mexico, which is a region where we are
overcapacity of tonnage.
establishing a significant reputation as a key
Revenues were up 17% in the first nine
supplier of subsea technology,” says Ragnvald
months of the year compared to the same
In Brazil, the rate level has improved through
period last year, which the company attributes
2011, while the spot market in the North Sea
to good performance in the shallow water
has performed well during the quarter. A general
“This contract award is also a vital step
offshore segment and the crewboat segment.
recovery in the market is not likely to happen
forward in our strategic approach to this region
Bourbon took delivery of 15 new vessels during
before further into 2012 as a consequence of
with the introduction of the new long-term
the third quarter.
the large number of newbuilds that are still to be
storage carousel that now improves the level of
delivered and seasonal variations.
local logistical support we can provide.“
As far as the outlook is concerned, Bourbon
Graff, sales and marketing director of Nexans.
anticipates increase demand for offshore service vessels in the future.
Cable contract
Going for offshore growth
and their four year prospects have been scaled
Nexans, a worldwide leading expert in the
Global shipbuilding should be seeking growth
up. The outlook for a greater number of active
cable industry, has been awarded a contract
opportunities
drilling rigs and offshore construction companies’
by Chevron USA to design, manufacture and
according to Oh Kong-gyun, chairman and chief
strong order books confirms the sharp rebound
supply a total of 138,000 feet (42km) of power
executive of the Korean Register.
expected on the market,” it said.
umbilicals and terminations for the Jack and
Speaking at the 4th Seoul International
The market is expecting an improvement
St Malo fields in the Deepwater Gulf of Mexico.
Shipbuilding and Maritime Conference (SIMS) in
in the rates of offshore vessels and a continuing
The umbilicals will be loaded out from the
Korea, Oh explained that while the world fleet is
improvement
the
new long-term storage carousel in Mobile,
continuing to grow, the number of new orders
fourth quarter of 2011 and in 2012,” the
Alabama dedicated to providing enhanced
decreased within the period 2006-2009.
company added.
logistical support for customers in the Gulf of
“Significant investment by oil and gas clients
in
daily
rates
during
Mexico region.
from
the
offshore
industry,
“It can be assumed,” he said, “that over the coming 10 years, the yearly average newbuilding order book will be less than that of the past 10 years. The demand for containers, tankers and LNG carriers will decrease, while the construction of offshore platforms will show strength in the market place owing to a high demand for energy, increased investment in the exploitation of oil and gas and higher oil prices. The increased demand for deep-sea crude oil and natural gas will also lead to heightened newbuilding activities for deep-sea oil platforms. The operational areas for these platforms will be mainly in Africa and the Gulf of Mexico” Oh-Yoon Kwon general manager, of Korean Shipbuilders’ Association added that the markets were still uncertain, Korean shipbuilders had experienced a recovery in new orders during the first half of 2011. To assist with securing further new business, the yards were concentrating
on
innovation
and
maintaining top quality management. Oh Kong-gyun, chairman and chief executive of the Korean Register
34
theBaltic Winter 2011 www.thebaltic.com
Towage and salvage
New president at ISU Todd Busch steps down to make way for Andreas Tsavliris. Plus: ETVs, specialised tugs and silver-bearing wrecks
A
ndreas Tsavliris, a principal of Tsavliris
firm supporter of Lloyd’s Open Form, which has
cost-effective insurance policy for the British
Salvage Group, was appointed as
recently been revised.
taxpayer. It would take just one major accident
president of the International Salvage
Tsavliris was awarded the first LOF 2011
and any savings that had been made by the
Union at the ISU recent meeting in
contract to salve the bulker Magnum Power,
decision to cease the contract would be wiped
Cartagena at the end of September, replacing
which ran aground in the Magdalena River in
out in a stroke. We urge the government to
Todd Busch who remains on the ISU committee.
Columbia.
reverse its decision to terminate the provision of ETVs through the MCA. “
Leendert Muller, chief executive of Dutch
The committee further suggested that use
salvage company Multraship was elected as vice
ETV response
of commercial tugs would not be a
Commenting on his time in office, Busch
Two of the emergency towing vessels due to
alternative
said that “it has been a great honour to be
be phased out as part of the UK government’s
“Unless the government can provide a
the president of the ISU and to represent out
spending cuts have received a stay of
persuasive case that such capacity exists in
members as we have tackled many important
execution pending government consideration
appropriate form and at appropriate locations,
issues. I have greatly enjoyed my presidency and
of alternatives.
it should recognise that the solution it has
president to replace Mr Tsavliris.
look forward to continuing to work for the benefit
There has been considerable industry
suitable
proposed is unviable and potentially reckless.”
concern about the phasing out of ETVs, which
Concerns have also been raised about the
“I am delighted to be handling over to Andreas
have been kept on station round the UK coast
decision to axe the Maritime Incident Response
Tsavliris, who has vast experience of salvage and
to respond in cases where a salvage tug is
Group (MIRG), which has been used in fighting
has demonstrated great commitment to the ISU
needed urgently.
fires at sea. Many maritime commentators
of all marine salvors.
and to the salvage industry”.
The Parliamentary Transport Committee
consider that the demise of MIRG is more serious than that of ETVs.
Tsavliris, for his part, said: “It is a great honour
warned that the decision to stop the Martitime
and I am proud to have been elected president
and Coastguard Agencies provision of ETVs was
Viscount Younger of Leckie was one
of the International Salvage Union. I am grateful
made against the findings of an independent risk
member of the House of Lords calling for an
to the members for entrusting this prestigious
assessment and is “unwise and shortsighted”.
effective replacement for ETVs. The government
the
argument has been that it is not only cost saving,
committed member of ISU for many years and I
recommendation of the late Lord Donaldson
but the fact that ETVs must be able to respond
will undertake to uphold its ideals and will always
following the Braer oil spill and the committee
immediately and therefore cannot be used for
try my hardest in the best interests of the ISU”.
said it was not convinced that anything
had
any other purpose. He has been quoted as
The Tsavliris group’s origins go back to the
changed since Lord Donaldson’s report to lead
saying the decision means a return to the pre-
1920s and Andreas Tsavliris joined the company
to the conclusion that ETVs were no longer
Donaldson state of affairs.
in 1970. The company is one of the few salvors
needed.
position to me. As a company, we have been a
to keep tugs on station and has long been a
The
ETVs
were
introduced
on
The government has given an interim stay
“ETVs represent a prudent and seemingly
of execution for the Scottish ETVs pending
theBaltic Winter 2011 www.thebaltic.com
35
Towage and salvage finding a long-term replacement. A Scottish office report is expected by the end of the year on an alternative solution to the problem.
Pulling power Multraship has added to its fleet of specialised tugs and multi-purpose vessels in recent months with the addition of the Damen newbuilding ASD 3213 tug Multratug 3. The tug will be employed principally in the River Scheldt in a harbour towage and salvage role. With a maximum bollard pull of 94.7 tonnes, an overall length of 32.14 m, and a beam of 13.29 m, the vessel is capable of a speed of 14.3 knots. Multraship
managing
director
Leendert
Muller
commented: “Multraship’s commitment to the Scheldt area is well-known and was further reinforced two years ago when it launched Antwerp Towage NV, a 50/50 joint venture with Fairplay Towage. “Antwerp Towage has been a great success, and we have increased our client base and number of calls in Antwerp significantly. Multratug 3 represents the latest phase in our overall strategic plans for renewal and expansion. We believe that it is now the strongest tug on the Scheldt and, with its FiFi1 capabilities, it is set to play an important role in future emergency response operations in the area.”
Silver find Odyssey Marine Exploration found its second silver-bearing wreck – that of the SS Mantola which was torpedoed during the First World War. The ship was found about 100 miles from another wreck – that of the Gairsoppa, which was also carrying a cargo of silver. A war risk insurance claim for £110,000 (at 1917 values) was paid out for the silver on the vessel in the year that she sank. Odyssey has been awarded a salvage contract by the UK Department for Transport, under which the company will retain 80% of the net salved silver value recovered. “The incremental costs to search for the Mantola were low as this was a contingency project in the event that our team successfully completed the Gairsoppa search early,” said Mark Gordon, Odyssey president and chief operating officer. “We are planning to conduct the recovery expedition in conjunction with the Gairsoppa recovery, which will also make the operation very cost efficient. Securing our ownership rights prior to recovery and funding our business from cash-flow produced from operations has been a key focus for us. Our share of this successful recovery in 2012 will contribute significantly to our operational funding.” “The Mantola project is located at a depth range that we have a lot of experience in. We have information on the location of the cargo that should make this a great target for testing some new technology, which will be useful for a number of new deep-ocean projects we have planned,” said Greg Stemm, Odyssey’s chief executive. “As we push deeper and deeper, a lot
of new and
interesting opportunities are presenting themselves.” The salvage expedition for the Gairsoppa and Mantola will begin in spring 2012, as soon as the weather window begins to open up in the North Atlantic.
36
Shipmanagement, crewing and employment
Food for thought Ensuring seafarers have healthy food to eat and cooks are properly trained is an important consideration for seafarers. Plus: training senior staff, armed guards, insurance and enclosed spaces
G
ood training for ships’ cooks is
Manpower
for the centre which is dependent on the
essential if crew members are to
According to Douglas Lang, managing director
shipping industry.
stay healthy and that is the drive
of Anglo-Eastern (UK), commenting on the ICS/
According to Lang, he finds people looking
behind the Sea Chefs project, which
ISF manpower study for 2010, “the situation in
at a career at sea to be better informed than
was launched two years ago, a pilot scheme
2010 was one of approximate balance between
ever before. “They know they will get a sound
that has input from Germany, Cyprus, Latvia
supply and demand”, although shortages were
education and they will be in demand at sea
and the UK.
more acute for certain types of vessels and
and ashore. It is not like coming out of university
As Ralf Becker-Heins, managing director of
senior officer demand has “grown apace, despite
burdened with debt. The sell is not that hard.”
MSG Marine Serve, a private maritime training
the financial crisis”. He said it was essential to
provider based in Hamburg put it, ships’ cooks
double the effort on training in the past five years
are in an exposed position, subject to the
“if we are to see a healthy industry in the future”.
“economic arm of the owner” and also being
Brian Ingpen, who heads Lawhill Maritime
Piracy has been very much on the agenda for
Centre in South Africa – which started life
InterManager and the ship managers’ trade
Professor Becker-Heins told the International
working out of empty containers provided by
association declared itself to be delighted
Chamber of Shipping conference in September
Teekay – told delegates there was a need to
to hear the UK government’s recent public
that it was “amazing that there have been so
interest thousands of young people in order
condemnation of piracy.
few poisoning cases. Shipowners should ensure
to get one master or one chief engineer. “The
Alastair Evitt, President of InterManager, said
that those engaged as cooks are trained and
starting place to promoting the industry is
that it was a quantum leap in public perception to
are competent”.
encouraging vibrant young people,” he said.
hear the issue of piracy and merchant shipping
responsible for crew health.
Armed intervention
Key issues include knowing what certificates
Lawhill Maritime Centre opened in Simons
an owner or manager needs to see and whether
Town in March with Safmarine as a major
the flag state has defined the requirements for
sponsor. The school, Ingpen said, is looking
InterManager has campaigned for the
cooks, he says. Good nutrition is vital for future
for something different. “It is about giving your
freedom of owners and managers to choose
health and some diseases might not appear
people in South Africa an opportunity”. With
to deploy armed guards on-board ships they
for several years, Professor Becker-Heins
unemployment figures running at up to 40%,
manage. “The UK government’s recognition of
told delegates.
the school has been attracting a broad range
the value of armed guards and the right of the
There are no common standards for training
of young people. “Some youngsters haven’t
owner and manager to deploy them, in the right
and certification of seagoing chefs, he said. The
seen the sea. They haven’t got the background
circumstances and in accordance with BMP4,
Sea Chefs project was launched two years ago
and the knowledge”. After three years of study,
is a great lead by the UK government and it is
and focuses on a fast-track system for training
the students will have a broad background
InterManager’s firm belief that this stance should
ships’ cooks. It is only a pilot scheme and “needs
in the maritime industry, including the basic
be adopted by all flags and charterers that still
to be followed up by an experienced training
elements of maritime law and insurance, but
do not openly support it. “
provider,” he said. There is a shortage of ships’
also maritime economics, nautical sciences and
InterManager says it is not calling for every
cooks and, in many countries, he explained
coastal navigation, so they get exposure to a
vessel to have armed guards on-board, “rather
“cook training is not an issue and offered only
wide range of sectors.
that when a detailed risk assessment deems
addressed by the UK Prime Minister David Cameron so openly and frankly.
sporadically”. Even STCW is “missing content
The majority of students end up in either
this the preferred option, then individual flag
on ships cooks”, Professor Becker-Heins added,
shoreside shipping jobs or at sea. The aim is
state legislation or charterparty clauses should
and it is only with the advent of the Maritime
to put the cadets on ships as soon as possible,
not obstruct owners and/or managers in taking
Labour Convention that “all flag states will have
he says. Safmarine has helped with containership
this decision.
to take action”.
training voyages. There is no state funding
“InterManager further supports on-going
theBaltic Winter 2011 www.thebaltic.com
37
Shipmanagement, crewing and employment initiatives to licence the companies providing
and returned home, the shipmanager received
defence had reached $659,000 by this stage.
armed
qualification,
an anonymous fax from the vessel, advising
According to the club, in 2011 the owner made
competence and experience), to define the rules
that it had actually hit a wreck. When the vessel
an offer to settle the claim on a “drop hands”
of engagement in the event of a pirate attack
reached its final destination it was drydocked,
basis, with each side bearing its own costs.
and to control the type and flow of weapons
and damage was noted. Under the terms of
Although the shipmanager felt that it had
deployed both on-board and while in transit to
the management agreement, the shipmanager
been presented with an extremely weak case,
and from vessels.
was a co-assured under the hull policy, but the
it was not possible to completely rule out the
owner started arbitration proceedings against
possibility of adverse findings. Accordingly, the
it, claiming that substantial additional costs
offer was accepted.
guards
(based
on
Bad vibrations
had been incurred. The claim was based on an
ITIC says: “This case shows how important it
International Transport Intermediaries Club has
allegation that the shipmanager was vicariously
is to use the right contract and to have insurance
warned that shipmanagers need to use the right
liable for the actions of the master.
and knowledgeable assistance to cover the
contracts and have appropriate insurance in
The defence of the shipmanager was that,
legal costs and support and time needed
place to cover the legal costs of defending even
under the terms of the management agreement,
to defend even weak claims. The defence
weak claims.
it had no liability for the negligence of the crew.
of a shipmanager is always expensive and
Rather, the manager’s sole obligation was to
very time-consuming.”
In its Claims Review, ITIC relates the case of a shipmanager which took on the management
provide an appropriately qualified crew.
of a vessel. One of its duties under the BIMCO
In 2009, the owner served an revised claim,
Shipman 98 management agreement was to
focused on the shipmanager’s application of the
Enclosed spaces
provide crew for and on behalf of the owners.
ISM code and the role of the designated person
While many warnings have been issued about
In 2004, while the vessel was heading towards
ashore. A further allegation was made that the
the dangers of entering enclosed spaces, and
Shanghai, the master reported that it had
bridge team, or at least the principle members
in some cases masters have been brought to
experienced “excessive vibration” after passing
of it, were suffering from fatigue at the time of
trial on manslaughter charges, fatal accidents
close to a buoy marking a wreck.
the incident and that the shipmanager should
continue to occur.
After the master had left the ship at Shanghai
have been aware of this. Costs of preparing the
Videotel
Marine
International
has
joined forces with Mines Rescue Marine to launch a training series entitled “Entry into Enclosed Spaces”. “There is no excuse for the unacceptable casualties we have seen recently,” Stephen Bond, deputy chairman of Videotel said at the launch. “Again and again, we hear of seafarers coming to grief in enclosed spaces. These incidents could have been avoided by an understanding of the dangers of entering enclosed spaces and the critical importance of following proper procedures. We are convinced that the “Entry into Enclosed Spaces” Training Series will help save lives. “We are delighted to have been able to work with Mines Rescue Marine to create this programme. For over 100 years, its Mines Rescue Service has developed its specialist skills, experience and knowledge gained from working in a difficult and potentially dangerous environment to effect the rescue and escape of mineworkers from underground. This experience has proven invaluable in helping to construct the training programme, ensuring it is both realistic and practical.” With
comprehensive
written
material,
including case studies and student exercises, the package consists of six programmes covering awareness;
preparation
and
procedures;
equipment; enclosed spaces entry; emergency procedures and rescue; and the correct use of breathing apparatus. It is available in a range of formats: interactive CD-ROM, through Videotel on Demand (VOD) and VHS/DVD with A healthy diet is essential for seafaring staff
38
theBaltic Winter 2011 www.thebaltic.com
supporting booklets.
FFA
Baltic moves to simplify wet freight trading Jeremy Harris recently became chairman of the Baltic Exchange’s Freight Market Information Users’ Group’s (FMIUG) ‘wet’ section and talks about developments for tanker derivative traders
I
ncreasing liquidity and encouraging new market participants to enter the Forward Freight Agreement (FFA) market are two objectives for Jeremy Harris, new chairman of the ‘wet’
FMIUG. These objectives moved a step forward last month when tanker freight derivative traders, meeting at the FMIUG, agreed that from the New Year all tanker FFA contracts which are traded in Worldscale would be converted to a dollar per metric tonne price ($/MT) when presented to the clearing houses. This standardisation measure will help to improve clarity about how FFA trading works and is designed to encourage new participants to join. The FMIUG annual meeting on November 17 met to discuss a number of issues but the critical one, Harris says, “was how we are going to trade in 2012, and whether the market is going to trade Worldscale or dollars per metric tonne”. At the same meeting last year, it was agreed that for future calendars where the Worldscale flat rate had not been published by the Worldscale Association, all trades would occur in $/MT. This decision was taken to get around the fact that nobody knew what the Worldscale flat rate would be and therefore had an exposure on what they would be settling against. The Worldscale Association takes into account issues like bunker prices and exchange rates and other costs when setting the flat rate. “As an example, if you trade Cal 12 today at 46 Worldscale points for TD3 AG/Japan VLCC you
Jeremy Harris
theBaltic Winter 2011 www.thebaltic.com
39
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FFA don’t actually know what flat rate that is and
$/MT, Harris explains, so as to cater for those
increment of 0.1 of a Worldscale point to reflect
what freight rate that is. On the other hand if the
that do not understand or want to trade in
the expected increase in Worldscale flat rates
trade was made in $/MT for Cal 12, the freight
Worldscale because they are not players in the
next year. Future years will be traded in $/MT.
rate would be clear,” he says.
physical tanker shipping market.
For the prompt year there will be a separate screen displaying prices in $/MT but they will not
This fixed approach offers a lot more certainty.
The expectation is that this might attract
“Risk managers are much happier with that than
financial institutions outside those who already
having something that was unknown,” Harris
participate in the physical market. The hope is
The Baltic Exchange will continue to publish
says, “so last year a decision was made that all
that providing the $/MT option will make it easier
forward curves in dollars per metric tonne and
future year contracts would be traded in dollars
for new entrants. “We need to wait and see. We
Worldscale going forward, even for the prompt
per metric tonne to remove that uncertainty of
want to make the market as liquid as possible.”
year, Harris says.
be executable.
Harris is working closely with the Baltic
The meeting also considered a new tanker
“This year we have been trading Cal 12 in
Exchange’s new business development group
route for 2012 and reviewed routes implemented
dollars per metric tonne and anything in 2011
to publicise the tanker FFA market, and the
this year including TC12 (India to Japan) and
on a Worldscale basis because in 2011 we know
group will be approaching new entrants and
on this route it was considered it was too early
the flat rate as published by the Worldscale
encouraging them to trade tanker FFAs. He
to comment although liquidity has not been as
Association in December last year.”
is one of a number of people potential new
good as people hoped. The Baltic will continue
Coming to the end of this year, the point
entrants can turn to in order to find out how the
to monitor it. The second route is TD19 which
has been reached where next year all the open
market works. “One of the feelings in the market
was introduced to replace TD11 which had
interest swaps will be in $/MT. A decision needed
was that the dollar per metric tonne is an easier
been hit by sanctions on Syria. The feedback
to be made as to whether to continue with $/MT
unit to understand than Worldscale.”
from the group was that TD19 was a “more
the unknown flat rate.
representative route to be marketing,” according
because of the open interest swap position
It was clear from November’s meeting that
or alternatively revert to Worldscale because
contact needed to be maintained with the
that is what the “physical” shipping world
physical world, because the swaps are settled
The new route is TC22 which is a backhaul
operates in. “We obviously need to maintain the
against physical fixtures. “It was felt that we
route for TC2 which links Europe to the US
communication to the physical world in order to
needed to continue to talk in Worldscale and
North Atlantic coast. The Baltic will go through
maintain interest in the FFA market.”
dollars per metric tonne in the prompt year and
the process of assessing the new route from the
A few years back there was a situation
there were quite a number of issues raised in the
point of view of load and discharge points with
where on certain routes traded in the swaps
meeting about how that would practically work
the aim of start publishing the route, between
market, the Worldscale Association needed to
in the market place.”
three to six months if the route is considered
to Harris.
viable.
adjust the flat rate mid-year. People with open
A sub group was convened to work with
interest positions on those routes, assuming a
broking houses and trading houses and
Harris says that he has found his role as
certain flat rate, saw those open interest swaps
Trayport, who handles the software side of some
chairman very interesting and enjoyable so far,
values change. Harris explains that this created
of the screens being used by traders. Harris
and welcomes views from all sides on how to
a number of problems, not least from the risk
chairs the sub group. The issue came down to
make the FFA market work as effectively as
management perspective. “It is exactly that
how to present Worldscale and $/MT on a single
possible. “The Baltic Exchange is the institution
situation that moving to dollars per metric tonne
screen and to avoid ambiguity or confusion as
that calculates the numbers that the FFAs settle
would get rid of.”
to which trading method was being used. The
against and we must have a system that works
The critical decision taken last month was
group decided that for the prompt year trades
well. Our door is always open.”
that even if trading in Worldscale points, the
would still be in Worldscale with a minimum
contract would be sent to the clearing house in $/MT. “This means that if the Worldscale Association do adjust any of the flat rates, it would have no impact on contracts that are already in place, so everybody is comfortable with the risk, they know what they are going to settle against and they can mark to market appropriately.” It is well understood how the conversion is handled and those present at the meeting accepted it, he says. A discussion took place at the meeting as to how individuals wished to trade – whether Worldscale or $/MT – for prompt business. Harris says that views depending on the institution from which the trader came. Most of those who were active in the physical market on a day to day basis prefer Worldscale, “but we are hoping to attract some more non-traditional participants into the market who may find it more interesting to trade dollars per metric tonne.” Aside from the risk angle, this is a main driver for moving to
theBaltic Winter 2011 www.thebaltic.com
41
The single answer
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IHM & Ship Recycling Plan
Yard Assessment & HSETraining
With years of experience in the recycling industry we have a reliable network of brokers and vast legal knowledge to ensure quick action and prevent unwanted surprises.
Be prepared for the future by knowing what you’re dealing with in your own fleet. A full Inventory of Hazardous Materials will be required in the near future as will the Ship Recycling Plan.
For new yards looking to become a top player in the ship recycling industry we can assess the facilities, recommend upgrades and train workers and staff to raise safety awareness and working efficiency and safety.
About Sea2Cradle The industry’s first professional ship recycling team now has a new name. As Sea2Cradle we are more flexible, more focussed and overall better prepared to meet your needs concerning the disposal of old tonnage. With new regulations just around the corner there is no better time to prepare your fleet with an up-to-date Inventory of Hazardous Materials. Feel free to contact us for any questions or to make an appointment. address: Scheepmakershaven 59 3011 VD Rotterdam the Netherlands
telephone: +31 (0) 6 5367 7232 e-mail: blankestijn@sea2cradle.com
Green shipping
Going green Interferry’s recent conference in Barcelona was just one where regulation and the challenges it presents was at the top of the agenda
A
s the shipping industry faces an ever-
Interferry conference, Jesus Bonet Company,
snowball effect resulting in a vicious cycle of
increasing tide of regulation on the
head of maritime safety and environment at the
fewer services, lower frequency, less capacity and
environment, there are some serious
European Commission, denied that the EU was
greater cost.”
doubts about the cost of introducing
intent on deviating from IMO environmental tar-
Guinier also raised concerns over the future
the new low sulphur requirements in emission
gets. Commenting on the move to 0.1% fuel sul-
availability of distillate fuels and use of scrubbers
control areas.
phur content in Emission Control Areas (ECAs) by
he suggested might affect the stability of some
Introduction of emission control areas in the
2015, he declared: “We support the IMO because
ship types. For those ships converting to LNG,
Baltic and North Sea and North America and the
they are right – sulphur gas is bad for citizens’
there remains the issue of bunkering facilities and
Caribbean are a source of considerable concern
health. We know this is going to be a challenge
safety concerns have been raised over the place-
to shipowners, operators and governments who
for the sector but there are ways.”
ment of LNG tanks on vessels.
As far as greenhouse gases were concerned,
Deltamarin concept design manager Esa
The situation was outlined in a submission to
he told delegates: “It’s not the regulator’s job to
Jokioinen reported on work to find a ferry-friendly
the UK government by Maritime UK earlier this
substitute the judgement of scientists. Our White
EEDI formula within two years of it becoming
year, when the industry body warned that while, it
Paper on transport aims to cut shipping emis-
mandatory for other vessels in January 2013.
supported the overall provisions of Marpol Annex
sions by 40% by 2050 because the evidence
Studies for the European Maritime Safety Agency
VI “these are presenting severe short-term chal-
says CO2 is ruining the planet and will have a
(EMSA) had shown that the current formula pro-
lenges for the ferry and cruise sectors”. Maritime
disastrous effect on our children.” Likewise the
duced up to 300% scatter in ferry index values
UK described the economic impact as “massive”,
Energy Efficiency Design Index (EEDI) – although
depending on their speed and capacity.
with potential bunker cost increases of 87% for
not yet adopted for ferries – was “a great step
ships operating in ECAs. “This will mean, from
ahead”.
are preparing to implement the proposals.
“The EEDI represents a power limit that is, in effect, a speed limit,” he explained. “It might be
2015, up to £3.6bn additional annual cost for
He acknowleged progress was slow on the
okay for some ships to reduce engine power and
shipping within 200 miles of the UK,” it told the
many proposals for controlling emissions through
slow down, but how would this work for ferries
Transport Select Committee in a submission.
Market Based Measures (MBM) but said an
taking into account schedules, redundancy and
According to the submission, a German study
impact assessment would be finalised in the
safety margins?” Ferries needed a formula that
pointed to ferries in the Baltic States losing
second quarter of 2012. “This is not about draw-
recognised their speed dependency and defined
40% of their traffic with nearly 1m containers
ing money from the sector,” he stressed. “We
capacity on measures like deadweight tonnage
and 600,000 trailers moving from sea to land
are trying to use the market as an optimiser of
and lane metres rather than the “possibly mis-
transport. Lost port revenues and tourism for the
the system and strongly support a global solu-
leading” gross tonnage calculation.
cruise industry, and closures of longer routes and
tion. But we have said many times that, if this
Commenting on the challenges ahead, he
price increases for the ferry industry were also on
is not achieved, we will come up with a way to
said that varying design speed of ro-pax ships is
the cards, warned Maritime UK.
meet our targets that can be integrated with and
the main reason for big scatter of index values.
strengthen the international process.”
Capacity of the ro-pax vessel is difficult to meas-
The issue was evidently high on the agenda at trade association Interferry’s recent conference
Alfons Guinier, secretary general of the
ure and using gross tonnage may be misleading
in Barcelona. Interferry CEO Len Roueche noted:
European Community Shipowners’ Associations
for many of the vessels. Additionally, there are
“Very little is in black or white when searching for
(ECSA), insisted that a regional approach to
challenges with reserve power, hotel load calcula-
relief from the ferry sector’s mounting economic
MBM must be avoided, warning: “Shipping may
tion, he told delegates, but they should be easier
and political pressures. Fuel costs are frighten-
become the milk cow for funding. The fair way is a
to clarify if the two main points are solved.
ing and regulations to slash shipping emissions,
compensation-based levy but it has to be a global
although well-intentioned, are potentially cata-
solution that can be applied to all flags.”
A session on dealing with sulphur revealed issues over the maturity of marine scrubber tech-
strophic in both commercial and environmental
On sulphur content restrictions in European
nology. The size and weight of equipment was a
terms. Assessing the complex array of operation-
ECAs, he said that no impact assessment had
major concern among delegates, while one fleet
al and technical options often raises more ques-
been carried out on the threat of a modal shift
director complained that trial installations of sea-
tions than answers on the best way forward.”
from sea to road. “This could be anything up
water scrubbers had shown failings in reliability,
EU regulation, or indeed any regulation, con-
to 50% depending on the type of goods,” he
compliance and corrosion.
tinues to be of concern to the industry. At the
warned, “but even at 10-20% there will be a
The latest systems were outlined by two
theBaltic Winter 2011 www.thebaltic.com
43
®
Among the greatest challenges imposed by the BWM Convention and the requirement to fit type approved BWT systems are finding space and power, and managing the installation onto existing ships. A BWT system must be selected that is well suited to the particular vessel, whether it is a retrofit or a newbuilding. Because of the significant investment involved, an established technology supplier with proven operational reliability, IMO type approval and possibly other approvals from the flag state or port states should be chosen. The system must be compatible with the planned or existing ballast system and ballast pumps. Particularly in the case of retrofit, the system should be designed for adaptability with modular components for installation flexibility and preferably suitable for transport onto the ship and to the installation space through existing accesses. The owner/ operator and supplier need to work closely with the installers and class. Many installation challenges must be met, particularly on existing vessel retrofits, including: Capacity and discharge pressure of existing pump • How does the vessel normally conduct ballasting operations (number and capacity of treatment systems needed)? • Are there ballast stripping pumps or eductors used? • Available power for treatment system • Available space for equipment • What will be the optimal BW piping arrangement? • Access to get the BWTS into the machinery space • Is a dry-docking needed to install? • Integration of the BWTS into the ballast control system • If chemicals are required, consider tanks, neutralization process and monitoring • Special considerations for installation in hazardous areas • Total purchase and installation cost of the BWM solution •
The space available on an existing ship is almost always extremely limited. Equipment that is modular in design allows greater flexibility to fit components into the existing machinery space and creates an opportunity for the system to be installed during normal operation of the vessel. A truly modular configuration may also allow the components to be carried into the vessel through existing access hatches and assembled in place, minimizing total installation cost. Hyde Marine, Inc.
•
The retrofit process will normally require a ship check to determine the most suitable location for the system components and to develop the necessary engineering information and drawings to meet the owner and class requirements. An evaluation of the degree of automation and the control system modifications required to integrate the BWT system controls into the ship’s ballast control system should be made, together with material estimates for pipe runs, foundations and cabling. An experienced supplier will be helpful with the vessel inspection and data collection. Complex retrofit projects will benefit from detailed planning and engineering, in close cooperation with an experienced marine engineering firm. Lessons learned from previous installation experiences can be particularly helpful. Hyde Marine had the advantage of five prototype systems installed in 2000 and 2001 on three cruise ships, a containership with a slow speed diesel, and a parcel tanker. The lessons learned from these experiences were not only excellent background for future installations, but are reflected in the design of the IMO Type Approved Hyde GUARDIAN® System. Selection of ballast water treatment solution The shipowner/operator will be presented with many different ballast treatment options. They will need to choose carefully in order to ensure the selected equipment provides best overall economy, compliance with BWM regulations, and reliable operation for the life of the vessel. Careful consideration must be given to the initial costs, meeting the installation challenges discussed above, and what are the total life cycle costs of the equipment. Among the operational challenges that should be considered in selecting BWT technology: What are the operating costs of the BWT system? • Does the BWT affect the operation or turnaround time of the ship? • What are the maintenance requirements intervals and downtime? • Is their any specialised training for crew and officers and how will it be provided? • Does the system operate in all water salinities or is it necessary to carry sea water or brine?
•
If the system uses chemicals for any purpose, what are the safety and logistical considerations to purchase, transport, handle and store the chemicals? • What are the risks of environmental damage that could be associated with the operation of the BWT system? • How can the operator be assured that any active substance is fully neutralized before overboard discharge? •
The shipowner/operator should seek a trusted technology partner with a proven record of successful installation and a suitable reference list, who is able to provide technical support before and during installation, commissioning, and after sale service. The technology should be fully tested and have received IMO type approval, meet Class requirements, and have the capability to meet more stringent regulations if needed. The Hyde GUARDIAN® System is a fully automatic and totally chemical-free ballast water management solution. The system’s robust design includes an efficient, auto-backflushing filter, which efficiently removes sediment and larger plankton, and a powerful UV disinfection system, which destroys or inactivates the smaller organisms and bacteria. The combination of these technologies has proven to be a cost-effective, safe, and environmentally friendly ballast water management solution.
2000 McClaren Woods Dr, Coraopolis, PA 15108
Thomas P. Mackey, Hyde Marine, Inc.
•
+1 724 218 7001
•
sales@hydemarine.com • www.hydemarine.com
Green shipping manufacturers. Wartsila’s closed-loop freshwater
According to Graham Greensmith, lead
former ocean-going casino which has now been
unit was relatively small and therefore had a lower
specialist on the ballast water issue at Lloyd’s
converted into a ferry which will be used to take
impact on vessel stability and payload, accord-
Register the increasing number of available sys-
visitors to view the Statue of Liberty or Ellis Island.
ing to head of environmental services Leonardo
tems – 17 are currently on the market, with oth-
The vessel is the first in the US to be powered
Sonzio, who said payback time based on a
ers going through the approval process – means
by diesel, hydrogen, batteries, wind and solar
30,000gt Baltic ro-pax was around 2.5 years.
greater choice for the owner. However the deci-
energy. The 600-passenger Hornblower Hybrid
Lodder
sion making process he says is a complex one
cuts fossil fuel use and lowers emissions by
described a dry scrubber using limestone granu-
and for some ships there may be difficulties in
combining clean power from multiple sources. A
late costing E250 per tonne. He said a typical
both selecting and fitting a system.
flexible, innovative power management system
MAN
project
manager
Marcel
load lasted three weeks, pegged the increase in operating costs to between 2% and 6% and
Supply, he suggests, is likely to be outstripped by demand ,coming to a peak in 2017.
ensures efficient use of available power – automatically switching from diesel to batteries when
Classification society Bureau Veritas has pub-
appropriate, for example – with reclaimed and
Speaking at the International Chamber of
lished a comprehensive set of guidelines on
recycled materials incorporated throughout the
Shipping conference in September, Don Gregory,
Ballast Water Management Systems intended
vessel.
director of the Exhaust Gas Cleaning Systems
to help shipowners, shipyards and equipment
The Hornblower Hybrid runs on renewable
Association outlined some of the challenges
manufacturers facing complex choices when
power generated by hydrogen fuel cells, solar
delivered payback after one year.
ahead. He warned that the demand for low sul-
deciding how to implement the IMO convention
panels and wind turbines. Most comes from
phur fuel will drive prices beyond $500 per tonne
and also local rules on ballast water which apply
a 32-kilowatt proton exchange membrane fuel
and said that typical short sea shipping in the EU
in some areas of the world.
cell that turns hydrogen into electricity, heat and
will witness fuel cost increases of millions.
According to Jean-Francois Segretain, deputy
distilled water; the electricity then runs an electric motor and charges 192 batteries.
“Bankruptcies are inevitable,” he told the
technical director in Bureau Veritas’s marine divi-
conference. Diesel demand will also hit forecourt
sion, says: “Ballast water management is becom-
In addition, 20-kilowatt solar panels and two
prices and “ship operators will be blamed” A
ing a major challenge for shipowners. There is
5-kilowatt wind turbines propel and power the
transition system is desperately needed, he said
some uncertainty over the exact implementation
vessel. Efficient Tier 2 diesel engines also kick in
in order to reward early investors and short sea
dates of the BWM convention, and there is also
to cover additional needs. Cold ironing provides
operators that fit EGCS and retain HFO will have
a growing patchwork of local regulation, with the
for battery charging and offsetting other power
a “significant competitive advantage”.
possibility of even more stringent rules on ballast
sources while the ferry is alongside.
Ballast water management to prevent the
in the US.
The vessel has a total horsepower of 1400
propagation of invasive species has been high on
“One thing is certain, shipowners will very
generated by two 700 hp shafts. It carries a
the agenda in recent times as the Ballast Water
soon have to have in place a means of meeting
32 kW proton exchange membrane fuel cell by
Convention may come into force in the next year
very strict ballast water conditions. There are a
Hydrogenics, two Helix Wind 5kW wind turbines,
or so.
number of ways to meet stringent standards on
20 kW SunPower Corporation solar panels and
While the necessary number of flag states –
ballast water, but not all are as yet proven technol-
two Scania tier 2 diesel engines two power two
30 – have signed up to the convention, there is
ogy. That is why we are publishing these guide-
Baldor Reliance 700 HP variable speed genera-
still a shortfall as far as the 35% of world tonnage
lines now, to draw attention to what needs to be
tors.
specification is concerned. While rumours sug-
done and to provide some clarity on the choices
gest that Panama might be on the verge of sign-
facing owners and operators,” he concluded.
ing up – which would mean the entry into force of
One recent project that has been setting
the convention one year later – so far there has
green headlines is the Hornblower Hybrid, a
The Hornblower Hybrid has an operating speed of 12 knots and was converted at Derecktor Shipyards in Bridgeport, Connecticut.
been no announcement. Unless Panama or China decide to ratify, any shortfall in tonnage will have to be made up among the smaller member states. According to a paper submitted by the International Chamber of Shipping to the Marine Environment Protection Committee last year, Convention requirements that all ships be fitted with ballast water management systems by mid 2017 at the latest will mean retrofitting equipment to about 50,000 ships, in addition to newbuilding requirements. This would mean fitting 20 ships a day until 2017. The ICS has also raised concerns about the availability of equipment for ships with a very large ballast water capacity.
Hornblower Hybrid, a former ocean-going casino
theBaltic Winter 2011 www.thebaltic.com
45
Corporate viewpoint Sea2Cradle
Why make an Inventory of Hazardous Materials now? The legislation for Inventories of Hazardous Materials
will not get involved in the creation of the IHM
The IMO Hong Kong International Convention
preparing themselves to issue these certificates,
for the safe and environmentally sound recycling
ahead of the ratification process of the IMO
of ships 2009 is awaiting implementation. The
convention. Whether the certificate should be
convention requires the creation of the Inventory
valid for five years, as per IMO requirements, or
of Hazardous Materials (IHM) onboard all
if they should issue these certificates with an
existing ships. In addition to IMO, we are now
annual survey is a question that can be debated
seeing increased activity from governments
between the owners and their class. In the end
requesting an IHM as a first step towards
this will come down to a matter of efficiency
recycling. There are also voices being heard in
and the cost involved.
themselves. All major classes are already
government departments who would like to see the creation of IHM mandatory through regional
Timing of the IHM
or national legislation, even before the IMO
If a shipowner waits until the creation of an IHM
convention enters into force. This requires
becomes a legal requirement, there is a huge
action from shipowners to start the process
risk involved concerning the quality and price,
sooner rather than later.
due to the fact that there will not be enough inspectors available to perform this job, and it is
What options do shipowners have for the creation of an IHM?
Tom Peter Blankestijn,
expected that last-minute opportunists will be
managing director, Sea2Cradle
offering these services, without having the expertise required. This means the shipowner
At first shipowners may try to arrange it
runs the risk that class refuses to issue the
themselves with their own staff. This, however,
necessary certificates. What’s more, prices of
requires specific skills, training and investment.
the IHM are expected to increase drastically
So the question is whether this investment in
because of this simple supply-and-demand
experienced staff will be worth the money for a
issue due to the pressure of the requirement
limited number of vessels.
being in place.
Shipowners can also hire trained third-party
For shipowners to have the maximum value
experts who can perform the inventory and
for money, timing is of the essence. Good
create the IHM. But what makes one a trained
planning today in equipping a fleet with an IHM
and experienced expert? For example, a person
will mean solid compliance with the legislation
that is qualified to carry out an asbestos
tomorrow. This planning will ensure that the
inspection ashore is not by definition an expert
small pool of inspectors, who are available
onboard ships. At present there are only a
today, can inspect your vessels over the years
handful of inspectors around the world who can
to come and at reasonable price levels. Sea2Cradle was established to assist and
provide a solid professional inventory.
add value to your Environmental Policy and
The involvement of classification bureaus Classification
bureaus
will
organise
create your Inventory of Hazardous Materials. the
certification of the inventory in the future, but
46
theBaltic Winter 2011 www.thebaltic.com
Oxford Analytica
China might deliberately choose slower growth T
show
“shadow” financial sector. However, re-expand-
clampdown imposed by the government over
China’s GDP expanded 9.1% year-on-
ing credit would risk further increasing already
the last year, reinforced by higher bank reserve
year in June-September, falling for the
high levels of non-performing loans (NPLs). To
ratios, has cut off the ready supply of bank
sixth consecutive quarter to the lowest
avoid another boom-bust cycle, China may
credit, leaving many property businesses strug-
prefer to grow more slowly.
gling to find finance to complete projects or
hird-quarter
growth
figures
level in two years. Yet officials gave few indica-
provide working capital.
tions that they intend to relax measures that
Simultaneously,
have tightened bank credit over the past year. A
potential
buyers
have
government-induced “credit crunch” continues
Analysis
become reluctant to purchase new proper-
to weigh on borrowers and banks alike.
The credit crunch is a response to the preced-
ty. Rocketing prices put houses beyond the
ing surge in the domestic economy, fuelled by
reach of most ordinary urban Chinese. Amid
stimulus measures implemented during the
purchase restrictions and other well-publicised
Impact
2008-09 global financial crisis to offset a mas-
measures to cool the market, potential buyers are
• Strategic, high-value added sectors may
sive fall in exports. This stimulus was funded
choosing to ‘wait and see’, rather than rushing
largely by bank lending.
to buy.
benefit from selective easing. • Slower investment growth, particularly in
Poor lending practices, absence of due-
A sharp fall in property prices would place
property and construction, would reduce
diligence
illegality
local governments under financial stress. The
global demand for commodities such as
associated with this lending are now feeding
value of the security they could offer for loans
iron ore.
into higher rates of NPLs (see CHINA: Beijing
would fall, as would the revenue they could
• China’s policy-driven cycle has strained its
fails to quell fears over banks, October 26,
generate from land sales (estimated at around
financial system, prompting fears of banking
2011). In mid-2009, the authorities began
half, or more, of their total revenue), making it
sector instability.
subtly to tighten lending rules, and credit
hard both to repay existing loans and sustain
• Banks may eventually receive ‘selective’
and cost pressures in the small and medium
their current high level of investment, which
recapitalisation, in recognition that bad
enterprises (SME) sector began to mount (see
constitutes a significant share of GDP.
debts have been incurred for policy pur-
CHINA: Rising costs and falling demand threaten
poses.
SMEs, September 23, 2011). Over the past
and,
in
some
cases,
year, policy shifted decisively from encouraging credit growth to reining it in, and economic
What next
growth has slowed.
If the credit crunch deepens, investment, which accounts for almost half of GDP, could collapse, leading to a sharp drop in economic
Property boom
growth and stress in the banking sector. To
The post-2008 credit boom is bound up with
avoid this, Beijing could ease credit restrictions
the property market. Much bank lending went
and attempt to stimulate lending. This would
to developers rushing to build, and a con-
lift the economy out of immediate danger and
struction boom supplemented ‘traditional’
might also curb the rise of a potentially unstable
investment in infrastructure and industry. The
theBaltic Winter 2011 www.thebaltic.com
47
Oxford Analytica Beyond banks Negative real interest rates on traditional bank accounts have encouraged investors and depositors to pursue an array of alternative lending arrangements. These promise higher returns by lending to cash-starved private businesses, often at elevated rates of 20-25%. Distressed borrowers, especially SMEs, have turned to this alternative credit market, which comprises an assortment of lending arrangements that range from bank-intermediated lending that exploits loopholes to circumvent regulations, to largely unregulated ‘private’ lending, to illegal loan-sharking. Estimates of the scale of “informal” or “shadow” lending are inherently difficult and also vary depending on how it is defined, but a figure of around 4 trillion renminbi is common, around 6-7% of the bank deposit base and 10% of GDP. Although a relatively small share of the overall financial sector, the rapid growth of alternative financing fuels official concerns about financial stability, prompting a recent statement by the banking regulator about bringing it under “strict” control. State-owned banks remain dominant and are unlikely to see large-scale outward migra-
Exceptions have already been permitted for
exchange reserves could provide resources
tion of deposits. However, problems or scan-
some smaller financial institutions. However,
for this.
dals in the informal sector could trigger a rush
before these lending restrictions were imposed,
Financial sector woes elsewhere in the
of money back into formal bank deposits,
most loans went to the state sector. If they are
world fuel doubts overseas about China’s ability
extending a “credit crunch” to informal lend-
relaxed again, this must be in a way that avoids
to deal with its post-stimulus financial prob-
ing. Informal lending is already implicated by
simply channeling further credit into local-level
lems. There are also long-standing concerns
recent heavy media coverage of distressed
policy lending.
about transparency and the persistence of high
borrowers, in Wenzhou in particular, where
Premier Wen Jiabao last month announced
levels of NPLs.
a rash of disappearances and suicides has
a
encourage
However, another risk is that Beijing might
reportedly occurred among the owners of
specific lending to SMEs. More could follow.
decide to keep policy tight and choose to grow
troubled businesses.
However, such schemes may prove rather
more slowly. This is the implicit, if not stated,
unattractive to the banks.
intention of the 12th Five Year Plan (2011-15),
package
of
measures
to
To address fears of banking sector instabil-
which has lowered China’s growth target from
Policy options
ity, the government could shore up the banks,
8% to 7% and emphasises more “balanced”’
Problems in the “informal” lending sector could
as it did in the late 1990s, by buying tranches
growth. A strengthened welfare system, which
drive deposits back to the “safe haven” of
of their NPLs, implicitly recognising that many
the government could probably fund even with
formal banks, causing an “informal-credit
of these loans were the result of the sector
somewhat slower growth, would both make
crunch”. To assist cash-starved SMEs and
undertaking stimulus policies at the govern-
rapid growth less crucial for state legitimacy,
boost economic growth, Beijing could relax its
ment’s behest. The sovereign wealth funds that
and rebalance it, improving its quality even if
restrictions on bank lending. One option is to
manage a small share of China’s vast foreign
reducing its speed.
cut prudential reserve ratios, allowing banks to
Yet Beijing cannot be sure how the economy
extend new loans and improve their earnings.
would react – not only to lower growth, but to the withdrawal of the government’s guarantee to support growth “by any means”. The risks to Beijing of taking such unprecedented steps amid the current serious global uncertainty would be considerable. © Oxford Analytica 2011. All rights
It is likely that the authorities are still
reserved. No duplication or transmission
weighing their options, which include expanding
of this document is permitted without
recently announced efforts to target aid to
the written consent of Oxford Analytica.
SMEs in certain sectors. However, achieving
Contact us: www.oxan.com/about/
stability and regaining control over the finan-
contacts/ or call +44 1865 261 600 or
cial sector might be prioritised above growth,
in North America 1-800 952 7666
since,
with
hindsight,
overshot in 2009.
48
theBaltic Winter 2011 www.thebaltic.com
growth
promotion
Insurance special
Reducing risk Kidnap and ransom, multi-modal transport and ferries are just some of the areas insurers have to deal with
Kidnap and ransom
effective cover than that offered by a hull
buy a policy that covers the loss of that money
With the ongoing problems of piracy in West
and machinery policy or a war risk policy?
in transit, and that policy could cost quite a
Africa, kidnap and ransom (K&R) insurance is
“Obviously, a ship needs a hull and machinery
bit”. Kissel says he has drafted those kinds of
one way owners can cover themselves.
policy and war risk policy – there is no debate
policies in the past, but that they were incredibly
According to Leo Kissel, managing director
about that as there are several risks covered
expensive, so he had decided to go down the
of Hamburg-based Trident Special Risks,
that it needs to have.” A tailor-made kidnap
route of having everything incorporated in a
what most people don’t realise is that the
and ransom policy, he believes, is becoming a
single policy.
underwriting market for kidnap and ransom
“must have” policy. “When you have a marine
So ransom payments go adrift often?
is very international – there are a number of
kidnap and ransom policy you have guaranteed
According to Kissel it is not a common
players outside London that the firm is in
access to risk consultants. These are specialist
occurrence, but a possibility. Following a
contact with and who can provide such cover.
companies and if your ship is hijacked, you
prolonged negotiation between the shipowner
One of these is based in Germany.
call one number and the specialist will fly out
and the hostage takers to reach a position that
Pricing for such policies, he says, is
to your company and if necessary sit with you
both parties can accept “you are desperate to
extremely competitive, “but whenever I sit down
24 hours a day and guide you through the
get your people out”, he says. In cases where
with clients, I am always talking about the value
whole scenario.”
negotiations may have lasted six months and
that you get out of what you buy because this is
While specialists will provide guidance
the ransom money has been despatched and
such a specialised product. You have to know
during ransom negotiations, Kissel says it is
lost in transit “you are going to have to come
what you are buying.”
important that the final decision is taken by the
up with another $5m very quickly”.
If in nine cases out of 10 ships can transit the Indian Ocean safety “in the one instance
shipowner. “It shouldn’t be something that is done by third parties or the underwriter”.
As far as escalation in ransom payments is concerned, Kissel acknowledges that the size
The other benefit, he says, of having a
of ransoms is going up and crews are spending
K&R policy is “you are protecting your hull and
more time in captivity. However, he believes
If you are going to be transiting such areas
machinery and war claims records”. If separate
that the size of ransoms is increasing because
“you want to find the right prices and value for
cover is not in place, premiums would go
the success rate of the pirates is going down.
your money”, Kissel says. Underwriting cover
through the roof.
“They are trying to get the most out of the
that something does happen you at least want to know that you are well covered.”
assets that they do have. This means they are
on offer ranges from the lowest to the highest, so the client needs to be sure he is buying
Loss of ransom
trying to bloat that number up. They have been
something viable, he says.
Average ransom amounts, he says, are of the
successful in doing that, which also means that
So how does Trident position themselves
order of $5-5.5m plus costs of around $4m,
the negotiation time can be longer and longer,
cost-wise? “Take into account we are brokers,
which would result in “your hull and machinery
especially if negotiators on the pirates’ side
so we scan the market. Because of my network
policy being blown for the next several years.”
change. Right now we are looking at something
I have a very good idea about what kind of risk
Another benefit is avoiding lengthy or costly
like 150 days to 180 days”.
is placed, where and at what price. I am not
general average negotiations.
Kissel says that he warns his clients that
hooked to one underwriter – that is something
One thing a lot of people don’t realise, he
buying a K&R policy for $5m might not be
I refuse to do – because I am working for
says, is that K&R policies also provide cover
enough. He advises his clients not to get policy
my clients. My clients are shipowners and
for the loss of the ransom in transit, which he
cover for less than that and would probably
charterers, so I am always looking for balance
believes would not be covered under general
suggest around $7.5m “to be on the safe side”.
in pricing and value for money. For me to say ‘I
average. In the event of being about to make
One recent trend that Kissel highlights, and
can get the cheapest product’ is not correct.”
a ransom drop for, for example, $5m “a lot
one he says has not had as much coverage
of people would suggest that you go out and
as it should do, is that of pirates separating
theBaltic Winter 2011 www.thebaltic.com
49
So is the K&R offering providing more
THE MARINE KIDNAP AND RANSOM INSURANCE SPECIALIST
Let our expertise be your piece of mind.
TRIDENT SPECIAL RISKS
Trident Special Risks Versicherungsmakler GmbH Ochsenwerder Landscheideweg 12 21037 Hamburg, Germany Phone: +49 40 30 89 30 29 E-Mail: info@trident-sr.com www.trident-sr.com
Insurance special the crew off from the ship and holding the crew themselves for ransom after the vessel has been freed. He believes that this trend is likely to escalate. However, K&R policies react to such cases, he says. “If your piracy cover is under hull and machinery or war, that element of general average is questionable because the vessel has been freed and the cargo has been freed so where is the interest of hull and machinery and war to come in and help you?” In the case of the crew being separated from the ship, the question is then raised as to what the role of the P&I Club is in that case? According to Kissel, that depends on the P&I Club rules in question, but he believes “nobody knows”. He says he has spoken to a lot of industry players – hull and machinery and war underwriters – and using general average and sue and labour clauses are accepted market practice when considering the payment of a ransom for the return of the ship and cargo.
Clarity of coverage In the event of only the crew being involved, the question then arises as to whether general average is applicable to the situation. Kissel says he tells his clients that the marine K&R policy “should always provide for clarity of coverage. Whether the crew is on board, or taken away separately does not matter. You get what you pay for.” He quotes Berkshire Hathaway boss Warren Buffett as saying “price is what you pay, value is what you get”. As far as armed guards are concerned, Kissel says that in the K&R world they are seen as a deterrent, but “history has shown that
Alexander Brewster
pirates adapt to changing situations”. While
Multimodal
freight forwarders operating around the world
the success of using armed guards has been
Michael Else & Company’s new insurance cover
and a lot of these new companies don’t yet buy
demonstrated by the fact that no ship using
for multimodal operators and intermediaries
the insurance cover or sometimes their local
them has been captured, the caveat he says
has
markets can’t provide the same kind of cover
is that things are likely to escalate with the use
from developing countries, according to
of higher calibre weapons and this will have
the managers of the Charterers P&I Club
legal effects, for example triggering war risk
and Transmarine.
been
attracting
widespread
interest
that we can provide”. Having worked in the cargo and cargo liability markets for a number of years, and
The company believes that its new offering
knowing other underwriters in similar positions,
There is also a rumour circulating, Kissel
fills a gap in the market in providing innovative
Brewster says that the bigger companies have
says, that there are likely to be cutbacks
insurance solutions worldwide for small- and
focused much more on the top end of the
in naval support to protect ships transiting
medium-sized multimodal transport operators
market and the higher margins.”I saw a good
the danger zone and the impact of that is a
and shipping intermediaries such as freight
opportunity for a focused and efficient product
serious consideration.
forwarders, NVOCCs and ship agents.
to concentrate on the small end of the market”.
exclusions in P&I Club policies.
And what of the possibility of ransom
The new product, Portside Insurance
With Portside forming part of the Michael
payments being made illegal?” Kissel says
Management Services, operates as a brand
Else group, it can take advantage of the group’s
that is always a possibility, but the question
within Michael Else & Company’s existing
worldwide network, contacts and distribution to
is
ransom
structure and the security is provided 100 per
promote the product round the world.
payments do lead to further hijacks but on
cent by Torus Insurance (UK) Ltd, rated A M
the other hand “what at the moment is the
Best A- (Excellent).
what
happens
then?
While
Legal issues have sometimes caused problems for multimodal transport where
According to Alexander Brewster, who has
different rules apply to different legs of the
If a shipowner has his crew taken hostage,
been appointed as the class underwriter for
journey, so does the same thing apply to
he says, he is going to do everything to get his
Portside, multimodal operations are a growing
insurance products?
people out safely.
market worldwide. “There are a lot of new
Brewster says: “Our cover is basically in line
theBaltic Winter 2011 www.thebaltic.com
51
viable alternative?”
Insurance special
Simon Swallow
with the contractual obligations of the insured
terms of premium income. He declines to identify
insurers were prepared to accept ferry hull &
with their client so it covers their contractual
the broker but they hope to work together.
machinery business after consistently losing
liability. In terms of legal issues raised between
Emerging markets and less developed
the freight forwarder and their client, as the
markets are particularly interested in the
insurers it would involve us as well.
product, he says. “We are looking in the
One market leader had revealed loss ratios
“We have a fantastic legal team here who
Far East. Most of this business will come
of 153% on ferries and 189% on ro-ro ships
have been dealing with liability claims for 25
from east of Suez. The European market,
compared with 115% across all sectors. This
years, with the Charterers P&I Club and we are
and certain parts of the Far East and Middle
was mainly due to machinery incidents, notably
lucky enough to have the same team handling
East are already well serviced by freight
because of the strain of maintaining tight
Portside as well.”
forwarders’ cover but I think worldwide there
schedules and because “there are a lot of old
is still this gap for a product focused on the
ferries out there”.
There has been a very positive response to the new product from around the world, with a wide distribution network for the initial launch, using the contacts Michael Else & Company.
money and failing to achieve the required increase in premiums.
smaller operators”. According to his definition, a medium-sized
Hull and machinery insurers did not like high-speed
craft
because
engines
were
enterprise would have up to 250 employees,
working at full capacity and spares costs were
“It has been very positively received around
with turnover of up to $15m a year, but smaller
high. Liability insurers preferred fast ferries
the world, but maybe less so in London
operations could have a turnover of less than
to conventional vessels because passengers
because some people think there are a lot of
$1m.”We want to be able to support all these
were strapped in, there was high technology
people doing the same thing in London, but if
accounts and all the brokers’ business from the
on
you look at the worldwide market the opinion is
smallest ones up.”
were short, but were alarmed at major
board
and
stopping
distances
increases in exposure under the EU passenger
very different”.
liability convention due in force late next
London sees a lot of the big business with
Insuring ferry risks
year.
bespoke cover, he says. “That’s what London
What do underwriters really think about insuring
over-familiarity with scheduled routes were
has always been good at. I saw a gap for
ferry industry risks? Simon Swallow, commercial
common concerns.
something focusing on a less obvious path”.
director of the UK-based Shipowners P&I Club,
One of the big brokers in London, he says, has
told delegates at the Interferry conference
company’s solvency could depend on the
approached him saying he thinks the idea was
recently that his informal research had revealed
quality of your insurance company. Work with
a good one because it identifies a less obvious
increasing anxiety in the market.
them, show them your attention to safety and
huge accounts requiring very complicated,
source of business, albeit with lower volume in
He found that only three or four Lloyd’s
theBaltic Winter 2011 www.thebaltic.com
Crew
Swallow
fatigue,
advised:
competence
“Ultimately,
and
your
you will see your costs reduce.”
53
Providing complete security and peace DELIVERING EXCELLENCE IN ALL THAT WE DO Solace Global Maritime, a United Kingdom based Limited company, provides worldwide maritime security services to the international shipping industry. We believe in the consistent delivery of excellence and an unrivalled knowledge of our client’s requirements. Solace Global Maritime provides in excess of 1200 transits annually and we pride ourselves on setting the standard for maritime security in the modern marine environment. At Solace Global Maritime our ethos of the delivery of excellence is evident in the personnel we provide, the equipment we use and the ongoing support that we offer. DEALING WITH THE THREAT MARITIME SERVICES The threat of piracy and hijack is real, fast-moving and constantly evolving. As of September 27th, 2011, the IMB Piracy Reporting Centre noted 346 attacks and 35 hijackings worldwide. Even more notable than this is the 15 vessels and 277 crew
Certificate Number 9656
members are currently being held hostage by pirates off the coast of Somalia. These figures show that the impact of piracy on shipping, both commercial and leisure, is acute and the threat is only set to increase significantly over the coming year. Solace Global Maritime offers a range of consultancy and security services for all types of vessel and user, from commercial fleets to private yachts. With a global footprint and wide ranging strategic and tactical insight our services include but are not limited to: • Armed & unarmed vessel security • Fleet/Vessel security assessment & consultancy • Fleet /Vessel security management • Port security assessment/ consultancy • Incident & emergency management with 24hr global shore side support • Crew & staff security training packages • Offshore oil & gas security • Vessel recovery • Super yacht security including close protection services
MARTIME SECURITY LIASON OFFICERS Solace Global Maritime’s Operations Team and Maritime Security Liaison Officers are recruited exclusively from the United Kingdom Military and Special Forces. Nearly all are former Royal Marine Commandos with experience in maritime operations, vessel boarding and ship defence. Every member of our team is scrutinised individually for professional experience, background, interpersonal skills and conduct. Every Maritime Security Liaison Officer provided by Solace Global Maritime holds qualifications in accordance with IMO and other industry guidelines, whilst our Maritime Operations Team has been handpicked and is comprised of some of the United Kingdom’s finest Special Forces Operatives. COMPLIANCE Solace Global Maritime is an Industry leader in all aspects of export control, compliance and host nation legislation. Providing complete
ce of mind for your crew and company. security and peace of mind for your crew and company is our number one priority. FIREARMS Company firearms are specifically procured with Counter-Piracy operations in mind. All are purchased new from the supplier, chambered for large calibre, high velocity ammunition and operate under SemiAutomatic action - outperforming in range and accuracy those employed by the pirates. INSURANCE & LEGAL We ensure we are protected for every eventuality. At immediate disposal we can call upon legal counsel from our Specialist Maritime lawyers. Our comprehensive insurance policies provide our clients and the Company with the following extensive coverage: Personal liability involving all aspects of the use of firearms up to £5 million. Personal accident, medical expenses,
hospitalisation and repatriation up to £250,000. INDUSTRY STANDARDS Solace Global Maritime strictly adheres to the following standards, industry guidance and recommendations: • IMO MSC.1/Circ. 1405, 1406 & 1408 • BSN EN ISO 9001:2008 Certificate No. 9596 • Signatory Company to the International Code of Conduct for Private Security Service Providers (ICoC) • Member of The British Marine Federation (BMF) • Member of the British Association of Private Security Companies (BAPSC) • Member of the Security Association for the Maritime Industry (SAMI)
security teams to ports throughout the High Risk Areas and beyond. Our highly skilled operations team, along with their state of the art 24hr operations facility, allow us to coordinate and accomplish even the most complex of missions wherever they may be in the world. No matter where your requirements stretch Solace Global Maritime will endeavour to create a service that is tailored to suite your needs. Our commitment to the delivery of excellence in all that we do extends with us across the globe, and we promise accountability and legality in keeping with national and maritime industry rules and guidelines in all the services that we provide.
GLOBAL FOOTPRINT As the threat of piracy and maritime terrorism continuous to spread across the globe, so does Solace Global Maritime. Government approved licenses permit us to move armed
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Maritime Protection
MAST is a leading maritime security company with a strong global presence and offices in the UK, Malta, Djibouti, Oman, Sri Lanka, China and South Africa. We can deliver a cost effective security service in the Gulf of Aden and Indian Ocean and provide onboard protection teams who will sail with your ship through the areas of concern. The Company is also active in support of large maritime security projects including exploration, dredging and construction projects in difficult and dangerous environments. MAST is a member of the British Association of Private Security Companies, SAMI and a signatory to the International Code of Conduct for Private Security Companies. MAST has various divisions including an explosives ordnance and survey capability, a specialist security system design and installation department and a mega yacht department. For further information please contact MAST’s UK or Malta office. MAST Malta 12 Tigne Place Mezzanine Level M1 Tigne Street Sliema Malta Tel: +356 21 323 773/4 enquiries@mast-security.com
www.mast-security.com
MAST UK Endeavour House Coopers End Road Stansted Essex United Kingdom Tel: +44 (0)1279 669 480 enquiries@mast-security.com
Security
To arm or not to arm? While most owners and trade organisations believe that arming vessels is now the solution, concerns remain
H
igh profile interventions like those of
that shipowners privately hire armed private
criminal prosecution. Furthermore, shipowners
UK prime minister David Cameron
security guards, an option which should only be
could be faced with local legislation covering the
in favour of arming vessels have
considered “in case of special conditions”.
import and export of weapons in the event that the vessel has weapons on board and enters the
been greeted with acclaim by some,
If the government uses its own resources,
but the danger of escalation continues to
or engages reservists or hires armed private
cause concern.
security guards who will temporarily be given
The use of military personnel on vessels does,
military status, the committee argued, this would
however, bring with its own set of problems.
For example, in the wake of an independent
jurisdiction of another country.”
Netherlands
not constitute privatisation of security duties. By
Francesco Lauro of Italian law firm Studio Legale
government to provide Dutch shipowners
creating additional defence capacity in this way,
Lauro told a recent conference organised by his
with better levels of protection against piracy,
no amendment of legislation and regulations will
firm on Shipping and the Law that in Italy use
including the hiring of armed guards, Netherlands
be required.
of armed guards has recently been approved
report
recommending
the
law firm AKD said that shipowners who directly
If
leaving
shipowners
to
hire
private
in Italy, either in the form of Military Protection Detachments or private contractors.
hire armed personnel themselves could face
security guards, the report suggested that this
criminal prosecution.
would require drastic amendment of Dutch
Powers of MPD commanders and masters of
legislation and regulations, which under normal
vessels are outlined. For example, although the
circumstances could take years.
master is responsible for safety of navigation and
P&I Clubs have also raised concerns that owners might eventually end up paying in “friendly fire” incidents involving armed guards
Jan Kromhout, a partner with AKD in
manoeuvring including for passive defence, the
and crew members while, if the pirates decide
Rotterdam, commented, “Clearly, it is the duty
master is not liable for decisions taken in order
to use increasingly sophisticated weaponry in
of government to do its utmost to protect the
to fight pirate attacks.
their attacks, war risk exclusions in P&I policies
merchant fleet from attacks by pirates. In the
Other jurisdictions, however, do not allow
may be triggered.
event that the government is not able to fulfil
military personnel on merchant vessels, generally
De
its duties, for whatever reason, it will have
for political or historical reasons, and therefore
Wijckerslooth Committee report was designed
to employ outside help. It is not desirable
would be obliged to go down the private security
to assess the desirability and possibility of
that privately owned companies hire armed
route. Insurers also suggest that the use of
deploying private sector armed security to help
protection to perform the duties which are the
armed military personnel reduces the risk of
protect Dutch ships from the threat of attack
responsibility of government, which should retain
claims in the event, for example of a friendly
by pirates. It recommended that the Dutch
its monopoly of force. Furthermore, the cost of
fire incident.
government moves towards a higher level of
providing protection against piracy should be
According to North P&I Club director Mike
protection of its merchant fleet including, “if
borne by the state. Shipowners should only be
Salthouse, who also spoke at the Studio Legale
necessary”, the use of armed private security
allowed to hire private armed guards in special
Lauro conference: “Average cost of ransoms
guards. The report, however, warned that
situations, in the event that the government is
increased significantly from around $600,000 in
such security guards should only be hired
not able to fulfil its duties.
2008 to more than $5m in 2010, with a reported
The
Netherlands’
commissioned
figure of $ 13.5m paid to release an unidentified
by the government, and should only perform
“In the event that Dutch shipowners do hire
their security duties as soldiers under the
armed personnel, or provide weapons to those
full authority of the Ministry of Defence. The
on board, those directly involved, as well as
“The average period of detention has also
authors of the report added that, under the
shore-based personnel (including the ultimate
risen significantly from around 55 days three years
current circumstances, it was not desirable
management of the company) could face
ago, to more than 200 days in late 2010, falling
theBaltic Winter 2011 www.thebaltic.com
57
vessel in April 2011.
Security As he points out: “For every shipowner, the security advantage offered by the use of armed maritime security providers has to be set against concerns centred on the risks posed by such guards to the crew, to the AMSPs themselves (if they are not familiar with vessel operations) and to other vessels. Confusion has reigned over rules of engagement and the role and authority of the master during an attack. The simplistic solution of the security team commander seeking instructions from the master as to whether or not to use lethal force, is fraught with complications and at worst could risk making the master criminally responsible for an unlawful killing.” Another issue the owner has to contend with is flag state requirements in relation to the carriage of weapons and ammunition on board vessels. South Africa is one country with strict Mike Salthouse, North P&I Club director
regulations on the carriage of firearms in its ports and while Cameron may now back the
somewhat recently as pirates have increased
through danger zones, it must not be forgotten
use the armed personnel on merchant vessels,
the throughput of vessels and ransoms. Clubs
that because of defence cuts around Europe
it should not be forgotten that, at one point, the
have experienced claims for personal injury and
there is the prospect of naval assets in the
UK government was reported to be considering
loss of life, medical expenses, personal effects,
Gulf of Aden being substantially reduced in the
stopping maroons being fired to launch lifeboats,
trauma counselling and for damage to and loss
near future.”
while question marks were raised as to whether
The need to provide armed guards has
the Royal Yacht Squadron’s use of a cannon to
The pirates have adapted their tactics, he
inevitably given rise to a burgeoning security
start races to start yacht races at Cowes might
said, and using merchant vessels as mother
industry, with quality being something of a
infringe UK gun laws.
ships enabled them to continue operating in the
hit and miss affair, and vetting is a major
Another issue to be considered, which
monsoon season as well as expanding the range
issue. According to Salthouse: “There are some
Salthouse highlighted is that the shipowner
of operations. “There are reports of increasing
companies that approach the task professionally
could not avoid the fact that “in some cases
sophistication in the military equipment used by
and legally. There are undoubtedly others that
additional personnel on board will prejudice a
pirates and most commentators believe such
have little appreciation of the legal and legislative
vessel’s compliance with SOLAS”.
activity is likely to continue to escalate for the
environment in which they and the shipowner
However the fact remains that to date no
foreseeable future,” he warned.
operate. It is often difficult for the shipowner to
vessel on which AMSPs are deployed has been
differentiate between such companies.”
seized by pirates. Increasingly, and where Flag
of cargo.”
Furthermore, the use of naval assets to protect ships targeted by pirates is a slow
State permits, the use of AMSPs is being seen
process. “In practical terms, this means that a
by shipowners as the most effective means of
ship targeted by pirates must plan to be able
resisting a pirate attack.
to defend itself against assault by the pirate
Most of the clubs provide guidance on was is
teams for up to 24 hours before naval assets
or is not acceptable when drawing up contracts
can arrive to assist the vessel. Further, the
with security companies. They also recommend
economic cost of making such assets available
that members provide their clubs with copies of
is inevitably the subject of review in the difficult
the contract before they sign it so as to ensure
economic times we find ourselves in. It is this
that it is not likely to contravene the terms of the
fact – that shipowners have in effect to look after
insurance.
themselves – which has more than anything
According to Salthouse: “P&I cover does
else has caused the rise in use of security
not prohibit the employment of armed security
contractors and increasingly armed maritime
guards however the deployment of AMSPs
security providers.”
on board a member’s vessel could prejudice
This view has doubtless been strengthened
cover if their use is in breach of Flag State,
by rumours circulating that naval operations in
Port State or other legislation. Shipowners
the danger zone are likely to be scaled down in
should also ensure that the embarkation of
the near future as political attention continues
additional security personnel does not place
to be centred on the Middle East. Ole Wikborg,
them in breach of SOLAS safety equipment and
president of the International Union of Marine
certificate requirements.” Some rules of engagement contain provisions
Insurance warned recently: “Although there is still a clash of views about placing armed
Ole Wikborg, president of the International
that require the AMSP team commander to
security personnel on board for the ship’s transit
Union of Marine Insurance
obtain the approval of the master for the use of
58
theBaltic Winter 2011 www.thebaltic.com
Security whole fleet.” In addition to entry and exit alerts, Fleet Management users can receive automaticallyincreased frequency of reporting via email or SMS while the ship remains in a selected zone. SSAS Alert Advanced users receive automatic entry and exit notification and ships can be polled on demand for latest position reports. Predefined security zones include the UKMTO and the International Recognised Transit Corridor as well as designated War Risk zones for insurance purposes.
P-Trap Another security product on the market is Westmark’s anti-piracy device P-Trap Westmark, based in the Netherlands, created the P-Trap as a passive non-lethal ship protection measure. Once deployed, it protects seagoing vessels from boarding attempts by pirates. The reusable system carries thin lines that float at the waterline around the sides and at the stern of a vessel. Pirates that enter the P-Trapsafety zone will run into the lines, which are
Anti-piracy device P-Trap
designed to become entangled in their engines, force to repel an attack, a provision Salthouse
Islands, Liberia, Australia, and Canada, as well
disabling their vessel. The P-Trap is designed
said is inappropriate. “Seafarers have no training
as providing LRIT Conformance Testing and
to defend against multiple simultaneous attacks
in the use of firearms and/or the circumstances
Certification for more than 90 Flags. In addition,
and does not require crew involvement once it
in which lethal force may be justified in preventing
the combined company’s increased technology
is deployed.
an attack. Rules of engagement that require the
resources will enable the group to deliver
“The P-Trap concept is as simple as locking
master to sanction the use of force unnecessarily
superior, cutting edge products more quickly to
your doors and windows before going to bed
expose the master and crew to the possibility of
its customers.
at night. It’s practical and it makes sense,” said
being prosecuted in the event the use of force
“Our goal is to be the world’s leading provider
Lodewijk Westerbeek van Eerten, creator of
was not warranted. Ideally, rules of engagement
of fleet management, ship security and vessel
P-Trap. “The option to lock the perimeter of a
should set out in advance the circumstances in
monitoring systems to the maritime industry
ship offers seafarers an extra layer of protection
which force will be used without reference to the
as a whole. This merger is a big step towards
and peace of mind so that they can focus on
master or crew while respecting the master’s
achieving that,” said Colin Hook, the newly
their core business – the transport of goods.”
overriding right to intervene to prevent the use
appointed CEO of Pole Star.
Heavy lift company Dockwise, purchased and
of force on board the vessel. Such rules of
Pole Star recent launched its Industry Zones
tested the system this year on one of its ships.
engagement should be agreed by the shipowner
product which allows users to select from a
Following three successful transits through the
prior to the deployment of the AMSP and then
series of pre-defined areas that carry additional
Gulf of Aden using the P-Trap Dockwise is
notified to the master and crew as part of an
environmental
or
expanding the use of the system on board
initial security briefing.”
security risks and apply them to their voyage
its entire fleet. “We welcome the opportunity
If the use of armed security personnel is
management and reporting procedures. Industry
to provide additional tools and resources to
one area of the maritime security business, the
Zones provides automatic notification when a
our crews to reduce the risk of piracy attacks
other is coming up with technical solutions to
vessel enters and exits the pre-defined zone
at sea,” said Marco Schut, Dockwise vice
protect ships.
and can be configured to increase frequency of
president of operations. Four Dockwise vessels
reporting while in the zone.
are equipped with a P-Trap.
regulatory
requirements
Paul Morter, Pole Star director of sales said:
Perhaps a more traditional means of
Pole Star
“Shipowners today face both increased security
combating piracy is the Knowsley SK EVICTOR,
Security related services are offered by a number
threats and a greater regulatory burden, so there
which uses the ship’s fire main or any other high-
of companies one of which is Pole Star who has
is a need to simplify compliance while at the
capacity water supply to provide a water shield
recently merged with Absolute Maritime Tracking
same time sharpening security monitoring. To
via twin 70 degree operating in a 90 degree arc.
Services to provide a monitoring and security
manage these issues effectively, they need tools
According to the company: “The nozzles have
serve to more than 35,000 vessels.
that bring together all the information needed
been selected to provide a powerful jet of water
The merged company will now operate
for voyage planning and execution. Pole Star
and a water mist curtain, giving a tremendous
Long-Range Identification and Tracking (LRIT)
Industry Zones provides that functionality within
visiual presence, inhospitable atmosphere and
data centres for 40 maritime administrations
a proven and widely-adopted system and in a
a physical force cable of deterring the most
including Panama, Singapore, the Marshall
single screen view, vessel by vessel, across a
determined of pirates.”
theBaltic Winter 2011 www.thebaltic.com
59
Corporate viewpoint Securewest International
A comprehensive solution to maritime security Securewest International explains why taking a comprehensive approach to maritime security will ensure your vessels and crew are fully protected.
W
ing threat of international piracy
Understanding the environment
and vessel hijack, ship owners
A core service is to provide teams of security
are faced with the difficult task
guards, both armed and unarmed, onboard
of deciding how to properly protect their people
ships. Securewest International’s long experience
and assets. The number of companies offering
has equipped them with an in-depth working
security services appears to be growing by the
knowledge of all types of commercial vessel
day so how can you be sure you chose the best
and they recognise that the actions required to
company to safeguard your precious assets?
safeguard a chemical tanker differ from those
ith the ever present and increas-
Securewest International is a worldwide
needed to keep a RoRo vessel or container ship
organisation and has been a leading specialist
safe. They also fully understand the regulatory
in maritime security since 1987. The company
environment and provide detailed advice to ship
believes that effective vessel security is about
operators on the requirements of the relevant
a range of measures to create layers of barrier
port , flag state, insurance and other authorities.
against potential threats and it is the provider
It is vital that vessel operators are aware of their
with sufficient depth and experience of service
corporate liabilities when opting to place security
provision that will be best placed to offer the
teams onboard their vessels and Securewest
most appropriate solutions. With more than
as well as the military processes and actions
International is extremely well placed to provide
20 years exclusive experience in the maritime
required to ensure vessels and crew remain
expert advice and counsel.
sector, Securewest International has developed
protected.
a comprehensive range of security services that
The
Implementing
physical
security
should
Securewest
involve much more than simply placing guards
will ensure your vessels and crew are kept as
International service is to assist ship operators
on vessels and the teams from Securewest
safe as possible.
take a holistic view of the risks and threats that
International begin their work well before
its vessels might face. Piracy hot-spots are top of
embarking on the ship. A thorough, up to
Combining military and commercial experience
the list but so are adjacent coastlines the vessels
date route threat assessment is provided0
will pass or ports it will visit during its voyage. A
prior to the voyage which, coupled with a
The operational management and security
thorough assessment of the potential threats
vessel assessment, forms the basis of the
teams at Securewest International all have
likely to be encountered is made and advice
solutions proposed. Securewest International is
military backgrounds but, importantly, the
given. Combating piracy is a complex challenge
a signatory to the International Code of Conduct
company’s longevity in the market has given
and circumstances will change from week-to-
for Private Security Providers and the clearly
its people the ability to successfully combine
week, even for the same vessel transiting the
defined and mission specific Operational Orders
military experience with commercial needs and
same waters. Securewest International is expert
and Rules of Engagement drawn up by its
imperatives. Securewest International people
at continually re-assessing and updating the
operations team reflect current best practice.
have a full understanding of commercial shipping
potential risks facing each vessel.
60
theBaltic Winter 2011 www.thebaltic.com
cornerstone
of
the
Once onboard, the team will provide the
Corporate viewpoint Securewest International
Master with a full brief and threat update and
Securewest International’s experience allows
Maritime Assistance Center (MAC) on a 24/7
talk the entire crew through the security plan.
them to provide enough training to ensure a ship
basis to provide real-time, high-quality security
Training will be given and drills undertaken.
operator is confident in times of crisis. Planning
advice to all its clients. Piracy and other security
This ensures that, in the event of an incident,
is of the utmost importance and Securewest
alerts are tailored to client requirements and sent
everyone is confident of exactly what to do and
International will assist the vessel operator
to the relevant ships. Immediate advice is also
how to act to stay safe. Securewest International
through this process. Often, in a crisis situation,
given on vessel routing, port conditions, ISPS
believes that it is important that all personnel
the ship operator is solely responsible for
issues and any other urgent security issue. MAC
understand the risks they face and the mitigating
handling the incident for an hour or more before
is currently used by over 16 million tonnes of
measures to defend against it. Experience has
the authorities become involved. Managing this
international shipping.
shown that crew understanding and involvement
“golden hour” correctly is vital for the safety
MAC is also available to provide a fully
engenders a greater degree of assurance and
of the crew and the vessel operator must
SOLAS compliant Ship Security Alert System
confidence.
understand exactly what actions are to be taken.
(SSAS) monitoring facility to ensure all alerts are
As well as liaising with the hijackers, the operator
managed securely, verified, authorities contacted
Escort vessels
must inform and provide support for families,
and mandated routine testing conducted.
An alternative to placing a team onboard is to
put measures in place to ensure the crew are
Achieving a high level of maritime security is
utilise an escort vessel. This is not an option
safe when released, deal with any media interest
a challenging and complex activity that requires
that Securewest International will recommend
and, of course, maintain business continuity.
a thorough understanding of the commercial
until a thorough threat assessment has been
Securewest International can ensure all relevant
shipping sector as well as the environment
undertaken but it can be particularly useful
training is given to prepare the vessel operator
that poses the risk. It is essential that security
for slow moving vessels such as rig-tows or
for this taxing and stressful process.
activities are comprehensive and fully integrated expert,
into all areas of the business. Securewest
International is an expert at identifying and
Securewest International is also in demand as
International, with its extensive experience of
sourcing the most appropriate vessel to
an ISPS consultant. Services include providing
operating in the maritime sector, is extremely
undertake escort duties and for ensuring the
full training to all company employees to raise
well placed to deliver these services to all those
vessel can operate in all the sea-conditions the
awareness of their own personal security as well
involved in international shipping.
client vessel is likely to encounter. The company
as the security of their vessel or facility. A range
will also place a well equipped and highly trained
of drills are also offered to test employees in live
team onboard and advise on the optimum
situations.
underwater
exploration
craft.
Securewest
As
an
international
security
operating pattern to discourage a pirate attack.
Knowledge is key Training is vital
Maintaining a good knowledge of the threat
A further element in security management is to
environment is central to ensuring the safety
fully train the client’s shore team responsible for
of a ship that is transiting a security hot-spot.
For more information visit:
managing a hijack or other security incident.
Securewest International operates its unique
www.securewest.com
theBaltic Winter 2011 www.thebaltic.com
61
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,
62
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 Winter 2011 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 WInter 2011 www.thebaltic.com
63
Corporate viewpoint HADCON
Managing risk ABOUT HADCON
Detection (early warning); Deterrent; Defence
techniques. The training courses include the
HADCON is a leading international business risk
and the Management of an Incident.
CSO, SSO, Anti-Piracy, Team Commanders, Search Techniques and Incident Management
consultancy that specialises exclusively in the Maritime Industry. We are recognised for our
SECURITY SERVICES
ensuring the delegates meet the commercial
expertise and innovative approach to develop
Using the experience, knowledge and the
and operational requirements of the vessel,
our portfolio of services to meet the changing
approach of our people we help clients with:
the port and the various agencies involved
(VES)
in the maritime industry. The courses can be
- provision of armed and unarmed security
conducted in the United Kingdom or overseas
HADCON is supported by a dedicated
teams. The VES has a layered security program
depending on the client requirements.
professional management team that is highly
ensuring the Master, crew and the vessel is
RANDOM DRUG TESTING - at the Owner’s
experienced with professionals from the United
ready and prepared for the transit. Our PCASPs
or Management Company or Captain’s request
Kingdom Special Forces, Royal Marines and
have passed our selection criteria and have met
and as part of their safety/security policy and
specialists within the maritime industry. We
the standards required by MSC Circ 1405 and
duty of care we carry out a random drug test
operate under an ISO 9001 quality management
ICoC. We have robust Rules of Force (ROFs)
on crew or staff ensuring the safety and the
system that ensures control of our processes.
and Standard Operating Procedures (SOPs)
well being of all personnel. The samples taken
that have been proven and reviewed by our
are urine and hair samples, but can be tailored
legal team.
to the client requirements. The samples taken
operational
challenges
within
the
marine
environment.
ACCREDITATION
VESSEL
ESCORT
SERVICE
and
VESSEL DEFENCE SURVEY - we carry
are tested against all the major groups of
accreditation for our core maritime services
out an on-scene survey viewing the vessel
recreational drugs. The hair samples are sent to
with the Maritime Coastguard Agency. Hadcon
specifications and documentation. The survey
an independent laboratory that will test the hair
is a signatory company International Code of
includes a review of the defences in depth, full
sample for usage of drugs over a three month
Conduct (ICoC) and a member with Security
lock down, location of the citadel, lighting and
or longer period of time. The results from the
Association for the Maritime Industry (SAMI) and
communication systems in line with BMP4.
laboratory are delivered in two weeks.
has representation on the SAMI Governance
A report is then produced with enhancement
board. Hadcon has assisted the International
measures.
We
hold
professional
certification
EQUIPMENT PROCUREMENT - as an enhancement to our maritime services we are
Maritime Organisation (IMO) on mission risk
NEW PROJECTS - we believe security
able to source specialist equipment through
analysis of the major ports of contracting
consultancy conducted at the design stage that
our network of reputable companies that can
Governments.
is managed effectively and within the constraints
be designed to the client requirements. The
of the project will safeguard the vessel, port and
equipment ranges from; small target detection
OUR APPROACH
staff from the present day and future threats to
radar systems, integrated technical security
Our methodology is tailored towards delivering
the maritime industry and will ultimately reduce
systems with CCTV including thermal imagery
a robust ‘Layered Security System’ which
long term security costs.
and night vision, access control and intruder
combines physical security with an integration
SHIP / PORT SECURITY PLANS - the Ship
alarm systems, vessel hardening equipment
of technical security systems that stands the
Security Assessments (SSA), Ship Security Plans
including ballistic materials and personnel
ultimate chance of success giving our clients the
(SSP), Port Facility Security Assessments (PFSA)
protection equipment.
confidence in our solutions not only for today but
and Port Facility Security Plans (PFSP) approved
for the future. We follow four basic principles:
by Flag States and Contracting Governments. The
security
plans
encompasses the security operational and emergency
CONTACT US
HADCON
procedures providing the
For further information regarding our services,
A Maritime Leading International Business Risk Consultancy
Ship and Company Security
please contact HADCON, quoting HAD11:
Officers (SSO, CSO), Port
HADCON Limited
Facility
Arena Business Centre
Security
Officer
(PFSO) and staff with the
Holyrood Close
necessary
Poole, Dorset
when
contingencies
managing
various
BH17 7FJ
emergency situations.
Safe - Secure - Reassurance
SECURITY COURSES
Phone: +44 1202 60 60 70
- delivery of the highest
Fax:
quality instruction utilising
Email: enquiries@hadcon.com
a
Web: www.hadcon.com
variety
of
training
theBaltic Winter 2011 www.thebaltic.com
+44 1202 60 60 64
65
Corporate viewpoint Aspida Maritime Security
Tailor-made security A
spida Maritime Security is an experienced
ping and its complexities. They adapt to your
considered an additional layer of defence, not
Private Maritime Security Company (PMSC)
needs without expecting you to adapt to theirs.
a replacement of vigilance and passive Ship
offering a comprehensive range of Maritime
Aspida is in a position to assist you with all
Protection Measures. Personnel are thoroughly
Security and Risk Mitigation Solutions to cus-
your security requirements, reliably providing
vetted, all having solid backgrounds in the
tomers worldwide. Being the first Greek Maritime
a custom-designed solution for your company
Military or Armed Police and clean criminal
Security Company, and set up from the ground
needs. Aspida’s services range from long term
records.
up to work exclusively on Maritime Security,
contracts for multi-vessel armed transits to a
man’s books and STCW 95 certification.Records
Aspida provides flexible, high quality, cost-effi-
single transit of a mega-yacht; from a secu-
of such certificates give confidence to clients
cient and, most importantly tailor-made mari-
rity assessment and training to operational and
that the PCASP have been provided with appro-
time security. Aspida’s services focus on armed
decision support intelligence. At Aspida, you will
priate knowledge and skills through initial and
security teams fulfilling all recent IMO Guidelines
find straightforward, flexible, high quality and
refresher training.
for “the use of armed security guards onboard
cost-efficient security services for your vessels
Aspida’s insurances and policies are robustly
merchant vessels”. Other services range from
transiting high risk areas globally. On-board
worded and clearly include clauses regarding
training and security consultancy to intelligence.
and off-board personnel is alert 24/7, 365 days
the use and carriage of firearms, leaving no grey
Aspida carries a Public Liability and Professional
a year to ensure that your crews, vessels and
areas. Similarly, for the company, it is common
Indemnity insurance up to US$5,000,000.00
cargo reach their destination safely.
sense that lack of proper licenses and docu-
Additionally all employees hold sea-
as well as Personal Accident and Employers
Operating in 12 ports including ,but not lim-
mentation of the equipment and weaponry may
Liability insurance. Aspida is also a signatory of
ited to Muscat, Oman, Suez, Egypt, and Galle,
result in Master arrest and vessel delays. It also
the International Code of Conduct for Private
Sri Lanka, Aspida’s services cover the entire
acknowledges that each Port State has different
Security Companies and one of the first compa-
East Africa High Risk Areas (HRA), incorporat-
restrictions and requirements regarding the use
nies to be accepted in the Security Association
ing the Red Sea, Gulf of Aden, Arabian Sea
of firearms. Aspida has successfully completed
for the Maritime Industry (SAMI).
and Indian Ocean, making Aspida a pioneer
armed missions on vessels of all Flag States
contributor when it comes to tackling piracy, a
permitting armed security on-board.
True to its Greek heritage, and with offices in Greece, Cyprus and the United Kingdom, Aspida has a deep understanding of ship-
contemporary and fast-growing problem.
In conclusion, Aspida offers competitive yet
Employing almost 150 personnel – mainly
realistic prices. They provide suitable insurance,
Greek and British – to ensure success in every
proper and legal weaponry and equipment as
mission, Aspida certifies that the personnel its
well as appropriately trained and vetted person-
properly trained and vetted. Security teams add
nel. Following all procedures and regulations
value to the transit beyond holding firearms.
of Port and Flag states, Aspida, manages to
Vessel hardening, crew training, passage risk
reduce complications, vessel delays, arrests
assessment, supervision of bridge watches are
and liability claims. Meanwhile ensuring always
all part of the security teams’ duties. Arms are
the well-being of the crew and the arrival of the vessel and her cargo to their destination. Aspida does not simply offer armed personel on your vessels, they offer complete solutions capable from a single vessel to your whole fleet.
aspida 66
theBaltic Winter 2011 www.thebaltic.com
Corporate viewpoint Ambrey Risk
Security matters T
he continued surge in piracy attacks related
appropriately licenced weapons can taint a
liability at no less than $5m USD. In terms of
to East and West African piracy have seen
voyage with illegality and presents a considerable
risk management, owners and managers must
a corresponding growth in companies offer-
physical and reputational risk to the vessel’s
also check that providers have well thought out
ing armed maritime security services. Whilst
owners and managers. Well established maritime
and practiced Standard Operating Procedures
the maritime security industry remains largely
security companies will undergo thorough vetting,
as well as legally approved Rules for the Use
unregulated, without a list of approved security
to show their operations are compliant in terms
of Force.
companies, owners and management compa-
of how their weapons, ammunition, body armour
nies responsible for the safety and security of
and night vision goggles are licensed, purchased
experienced in the delivery of armed security
vessels are faced with the difficulty of choosing
and moved.
teams will often enjoy excellent relationships with
compliance, insurances, the quality of person-
WHAT INTERNATIONAL STANDARDS OF PRACTICE SHOULD BE FOLLOWED?
nel, and the company’s operational experience.
With no international code of conduct for maritime
which need to be considered include regulatory
who
are
established
and
insurers, which enable their clients to benefit from
a professional, appropriately licenced company with a proven track record on delivery. Factors
Providers
discounts of up to 50 per cent on premiums.
security providers, the minimum requirement
WHAT QUALIFICATIONS AND TRAINING SHOULD THE PERSONNEL DEMONSTATE?
WHAT SHOULD OWNERS EXPECT IN TERMS OF COMPLIANCE?
should be full implementation of the International
In addition to conducting interviews, personnel
Code of Conduct for Private Security Providers
must have clean records of discharge from their
(ICOC) as well as full compliance with the recent
military service, and clearance from the Criminal
To
security
IMO guidance on the use of armed guards.
Records Bureau. ISPS SSO qualifications should
companies must fully comply with the regulations
This should be demonstrable in the company’s
be considered an absolute minimum training
of the countries in which they operate. Security
Standard Operating Procedures. Respectable
qualification. Ambrey additionally form teams
providers which employ UK nationals must also
companies will have considered how the UN
to include SCTW ’95 qualifications, ENG 1
fully adhere to UK firearms and export legislation,
Principles of Human Rights, UNCLOS, SOLAS
Medical certification and anti-piracy, weapons
irrespective of where the company is registered.
and flag state regulations impact their operations,
and trauma training. Some providers offer their
By way of example of the licences required,
the procedures of their personnel and Rules for
clients cost savings by using teams of varied
Ambrey Risk holds a UK Registered Firearms
the Use of Force.
nationalities, but it is well recognised that the
operate
legally,
all
maritime
gold standard in maritime security is from single
Dealer Certificate that allows the purchase of
WHAT EXPERIENCE AND CAPABILITY SHOULD PROVIDERS HAVE?
nationality, experienced teams from reputable
and an Open Individual Export Trade Control
Reliability is key and as part of this a security
maintain high standards of safety. This training
Licence (OITCL) to allow them to move this
company must demonstrate that they have
should cover Standard Operating Procedures,
equipment between the ports of embarkation
excellent logistics and operational management
Rules for the Use of Force, and Weapons
and disembarkation.
processes, including a particularly strong
Handling Procedures as a minimum.
weapons in the UK, Single Individual Export Licences (SIELs) to export weapons, body armour and night vision goggles from the UK,
Using a low-budget service provider without
Armed Forces such as the British Military. Thorough training of personnel is essential to
relationship with their shipping agents. Good account management is vital to respond to the pressures of commercial shipping. Less well established security providers will struggle to provide their clients
Ambrey Risk is a leading security services
with relevant information and
provider working with a number of large owners
advice gained from their operating
and ship management companies, in addition
experience and will not have the
to smaller owners who rarely transit the region.
flexibility to respond quickly to
For an informal discussion on the content of this
requests.
article, please contact a member of our Account Management team.
WHAT ARE THE INSURANCE IMPLICATIONS?
Ambrey Risk Ltd, Berkeley Square House, Berkeley Square. London, W1J 6BD
Contractually, knock for knock liability
clauses
are
industry
T: +44 (0) 203 503 0330 E: enquiries@ambreyrisk.com
standard and companies should be able to provide evidence of their insurance, with limits of
theBaltic Winter 2011 www.thebaltic.com
67
Corporate viewpoint Hart Security Limited
Safe and sound W
ith approximately 80% of traded goods
demand for reliable security
being transported by sea, maritime
measures in areas that are
transportation is the backbone of international
vital to keeping the global
trade. Because the sea represents the main
supply chain flowing safely.
artery for the global supply chain, it is clear that
For example, the formation of the Combined Task Force
it needs to be protected.
(CTF) 150, a multinational anti-piracy naval task force that has been operating off the Horn of Africa since 2002, has
not
alleviated
the
escalation of piracy in this crucial shipping zone. Thus,
private
security
companies have developed and thrived, providing security packages for clients and operating with a lower profile than most government forces. With over a decade of experience, Hart Security is an industry leader and an internationally
recognised
provider
specialised
of
maritime security services. Through
our
global
network of 16 offices, we offer a comprehensive range Given its impact on the globalised economy,
of security services, including
it can be argued that maritime security is
security teams, sea marshals,
inherently
the regulatory compliance
the
responsibility
of
national
governments and international bodies. However,
programmes (BMP 4), training for company and
Hart provides professional, cost-effective and
the demand (particularly in high risk areas) can
ship security officers, International Ship and Port
commercially viable solutions to meet our clients
often outstrip resources. The scope of challenges
Facility Security (ISPS) audits, monitoring
maritime security needs. By understanding the
presented by the combination of terrorist
through a 24/7 maritime response centre and
ebb and flow of the maritime market, we
activities, organised crime and piracy has meant
security consultancy.
understand the commercial realities that shape
that governments have been unable to meet the
Our
and
our clients’ requirements. Hart offers the
onboard security services provide
maritime market responsible and legal solutions
protection for ships and their
to the growing problem of piracy. Safeguarding
crews. Hart has trained over
your reputation is critical, which is why planning
2,000 ship, company and port
and preparation with experienced long-standing
facility
security companies is imperative to success.
renowned
anti-piracy
conducted
security more
escort
officers, than
400
assessments and completed over 250 missions in high risk areas (almost half of which have been in the Gulf of Aden) with just 5%
68
involving confrontations and all of
Tom Naude
which were successfully repelled
Tel: +971 566966097
without the loss of lives or assets.
TNaude@hartsecurity.com
theBaltic Winter 2011 www.thebaltic.com
Corporate viewpoint MIRIS International Ltd
Total security M
Scoping and procedures
security
guidance. Based on the three core pillars of
to
the
readiness, response and recovery, Trident
MIRIS undertake meticulous planning and
requirements of shipowners and shipping agents
courses equip maritime professionals with the
preparation for all tasks, ensuring that the
operating in the high risk piracy area of the Indian
important knowledge and skills to understand
delivery of services meets individual client
Ocean. The company has established a
the requirements to develop readiness for
requirements. All operations are supported by
reputation for attention to detail and a
operations in high risk waters; to mitigate the
task specific standard operating procedures,
personalised service, operating in full compliance
likelihood of an adverse event; and to formulate
which are reviewed regularly by MIRIS Operations
with UK and overseas applicable laws and
appropriate responses and recovery activities.
to reflect the developing threat and feedback
IRIS
delivers
consultancy
key
maritime
services
tailored
Trident training is widely recognised and
licensing requirements.
from deployed operatives and the client.
MIRIS is fully committed to delivering the
endorsed by private maritime security companies,
highest professional standards of service,
shipowners and operators. The Trident Maritime
Compliance
and adopting established best management
Security Operator course is a Buckinghamshire
MIRIS operates in accordance with local
practices, captured in bespoke company
New University-accredited NQF Level 4 short
regulatory requirements throughout the Indian
standard operating procedures.
course and has been vetted by the International
Ocean. All firearms and related equipment
Association of Maritime Security Professionals.
transfers are subject to the company’s UK Open
Management
No other training provider can offer this level
Trade Licence. The procurement, management
MIRIS is characterised by a strong management
of training.
and operation of firearms are governed by
team that brings together a unique skill set. Ideally suited to managing the delivery of
For further information about Trident, see: www.tridentoperations.com
secure firearms and ammunition storage and embarkation, firearms handling and testing, rules
maritime security services, the team has experience in the following areas: UK special
standard operating procedures covering local
Consultancy services
for the use of force and post incident reporting.
forces maritime counter terrorism and law
MIRIS maritime security consultants deliver
Comprehensive
enforcement operations, management of Royal
comprehensive
client
professional and general liabilities, and provide
Marines ship security and boarding teams, naval
requirements, including vessel security reviews
wide-ranging personal accident and injury cover
intelligence operations, plus the regulatory
aimed at piracy protection and maritime security,
for all deployed operatives.
expertise of an international lawyer.
and identifying requirements for protective
solutions
to
meet
insurance
policies
cover
measures. Management and crew training
Client focus
Consultants
sessions include piracy and maritime security
MIRIS is committed to developing long term
MIRIS undertakes comprehensive recruitment,
awareness briefings, hostile environment and
relationships with its clients from the outset.
vetting and training of its consultants, and is
incident
evacuation
Following initial introductions, all engagements
committed to building strong relationships with
planning and scenario training. Passage planning
are scoped and detailed in a services agreement,
known and proven operatives with the highest
support focuses on interpretation of intelligence
and are subject to continual review. Operational
credentials. All potential recruits are invited to a
reports, preparing passage risk and threat
services are supported by MIRIS Operations,
company induction day, covering company
assessments, and transit planning.
who maintain regular contact with the client
management
training,
providing intelligence and situation updates, with
ethos and approach to maritime security operations, and outlining key legal, financial and
Operational services
the ability to adapt the provision of services as
commercial considerations for operatives.
MIRIS maritime security operatives (MSOs)
situations develop. Client feedback is critical to
provide ship protection measures, preparing
MIRIS service delivery, and allows MIRIS to
Training
vessels for transit in high risk areas, implementing
continually improve the scope of service to meet
MIRIS operatives undertake a specialist maritime
physical protection measures, and testing and
client requirements.
security operative course delivered in conjunction
adapting existing ship emergency response
with Trident at the MIRIS headquarters in
systems. MSOs liaise closely with the master of
Liverpool. Advanced training is provided to
the vessel to ensure that minimal disruption and
selected team leaders.
maximum protection are achieved, monitoring
Trident is also able to offer a series of courses
radar and providing permanent observation in
to clients worldwide, carefully designed and
order to maintain a high alert state. MIRIS is
delivered by current, competent professionals.
licensed to deploy armed MSOs, and works
of
closely with the client and the master of the
delivering training that incorporates recent
vessel to coordinate their deployment and
For further information please visit our website at
changes in international security regulation and
control measures.
www.miris-int.com.
Trident
recognises
the
importance
theBaltic Winter 2011 www.thebaltic.com
69
Maritime safety
Putting safety first Lifeboat hooks, lifting equipment and mooring accidents are just some of the issues facing shipowners
A
lot of shipowners have been con-
the due dates? “We face a few issues and it is
cerned about the safety of lifeboat
both a big challenge and a big investment for
hooks for some time. They felt there
us,” says Bradley. “We have to test hooks in
were too many accidents during life-
service by 1 July 2013, and we have to have
boat drills. Now, after a long period of delib-
ready new systems for new boats, or boats
eration, IMO has acted with new rules and
requiring replacement hooks, by July 2014.
guidelines. Those rules pose a challenge for
We then face a window for replacements to
all owners, because they apply new standards
older boats and non-compliant systems which
retrospectively to existing equipment.
depends on dry-dock dates and could run until 2019.
The IMO has a new name for lifeboat hooks and has issued clear guidelines on how they
“So we have an eight year window ahead of
should be designed and operate. Unusually,
us, during which demand for hooks will come
the IMO has backdated the new rules to
in waves. We foresee that some owners will
cover existing hooks and these will have to
want to get future proof hooks as soon as pos-
be replaced or upgraded if they don’t meet the
sible and we already meet quite a high level of
new standards.
demand for that. Then there will be owners who will leave things until the last minute.”
Shipowners face choices. They need to get all the lifeboat hooks on all their vessels examined, they need to replace ones that don’t meet the new standards and they need to decide
Mooring and lifting accidents
which new standards they will opt for. They have
Accidents to crew members during the moor-
some time in which to do this, but if they leave it
ing process has long been a major concern to
too long they risk running out of options if there
David Bradley
is a backlog of refits.
shipowners and insurers alike. Now
the
European
Harbour
Masters’
added advisory requirement over and above the
Committee has released a DVD entitled The
at Schat-Harding Service, says, “IMO has now
international regulations as agreed by IMO. So
missing link: improving the mooring process, a
issued clear guidelines for lifeboat release and
owners will have another choice to make, basic
training video which it is hoped will promote best
retrieval systems under MSC.1/Circ.1392. They
regulation or industry recommended standard?
practice and reduce the number of accidents.
David Bradley, vice president of operations
will become mandatory under SOLAS and will
Says Bradley: “As the leading manufacturer,
According to the UK P&I Club, who has
apply to new boats from 1 July 2014. There are
Schat-Harding recognises that with two different
long campaigned on this issue, the new DVD
also clear tests to be applied to existing hooks,
standards globally we will have to be ready to
is welcome.
and these will have to be upgraded at the first
meet demand for both. Therefore we will design
“The UK Club has for a long time been very
dry-dock after 1 July 2014 if they do not meet
an optional SSS (training lock) for our SeaCure
concerned about the number and severity of
the set standards. IMO’s guidelines do not call
LHR hook range, and we will then be able to
accidents which occur when ships are under
for a Secondary Safety System (such as a pin)
supply new hooks with or without the SSS, at
tow or are engaged in mooring alongside. Even
or a Fall Prevention Device for new boat or
the request of the owner or yard. We have to
fatalities to crew and to shoreside mooring
upgraded hooks.”
supply what regulations demand and what our
gangs are not rare occurrences, while far too
customers want.”
many incidents result in injuries that will end a
That is clear, but separately the shipping industry will be issuing guidelines that recom-
Should shipowners be worrying about the
mend that owners should only fit hooks with
ability of lifeboat and hook system manufacturers
Despite much publicity regarding the risks,
Secondary Safety Systems. This SSS will be an
to test and replace the hooks in service before
the do’s and the don’ts when working as
70
theBaltic Winter 2011 www.thebaltic.com
seafarer’s or stevedore’s career.”
Maritime safety ally not always covered by the class
SeaCure hook installed as replacement
system – it is optional,” Lumbers says, “so there needs to be a lot more attention paid to maintenance of the crane on board”. Annual mally
a
checks requirement
are of
norflag
states, but “nobody is looking at cranes in a detailed way, and this is a big issue,” he says. A lifting applicance he adds, has no redundancy and if a crane goes, “it goes with a hell of a bang”. At the moment, the issue is not covered by the SOLAS convention although a paper is due to be submitted to the next DE subcommittee.
Safe boarding Although many may consider the issue of boarding and leaving a vessel as straightforward, it can be dangerous and Videotel’s new training programme, Boarding and leaving a vessel at sea, has been designed to tackle this issue and address the need for better working practices in this area. “Seafarers often have to deal with hazardous situations before they even get on to a vessel,” says Nigel Cleave, CEO of Videotel part of a mooring party, the Club says the claims
“These are key safety issues,” says Townsend.
still keep coming in, often accompanied by
“This pocket guide has been designed so that it
”Not only is the actual boarding itself
horrific photographs.
is handy to use, inexpensive to produce and will
sometimes difficult and hazardous, but the
be free to the industry. We highly recommend
equipment – from the launch itself to the per-
its use.”
sonal protective equipment supplied – may not
Although accidents involving ships’ lifting appliances are rare, they are nonetheless a
Marine International.
The rocking test is one of the most critical
meet required standards. This is especially hard
survey items, used to measure the wear of the
to control when contractors and third parties
Classification society Lloyd’s Register, in con-
slew bearing and related structures. Its excess
are involved.”
junction with the UK Club and manufacturers
wear combined with bolt failure can lead to a
MacGregor and Liebherr, has published a new
deck crane toppling over.
source of concern as when a lifting appliance fails the consequences can be fatal.
This programme has been designed in conjunction with BG LNG Services and is intended
guide to help shipowners and operators understand
“Personal injuries to crews from breaking
to help individuals board ships at sea in a
the importance of professional maintenance and
wires or a lack of maintenance on stores and
safe manner. It raises contractor awareness of
survey preparation for lifting appliances.
cargo cranes hit P&I Clubs the hardest because
safety standards and other issues and ensures a
“Lifting appliances need to be thoroughly
personal liability claims can be very costly,” says
more consistent quality of service among third-
examined and it is important that operators
Karl Lumbers, the UK P&I Club’s loss prevention
party suppliers.
understand the seriousness and consequences
manager. “The guide is a very good way to help
of failure, as well as what they need to do to sup-
address this.”
Addressing a range of maritime safety regulations, the programme is especially valuable
port the safety framework,” Joanna Townsend,
Lumbers acknowledges that while crane
for those joining a ship for the first time, but is
fleet services manager for Lloyd’s Register,
accidents are not frequent, “the consequences
targeted at all maritime professionals needing to
explains. “Poor preparation before surveys is
can be horrific”
board or alight from a vessel at sea.
a common problem among operators. Other
Crane accidents can occur for many rea-
Videotel also recently produced new mate-
issues include a lack of knowledge about rock-
sons, including corrosion, insufficient training, or
rial to advise on best practice when entering
ing tests, difficulties in obtaining maintenance
crew members losing their balance and falling
enclosed spaces. This remains a major problem
records and problems accessing the key areas
from the crane, for example .
despite all the warnings and advice put out by
that need to be surveyed.”
“People tend to forget cranes are gener-
theBaltic Winter 2011 www.thebaltic.com
owners and insurers alike.
71
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UAE
UAE ports sector on road to recovery Plenty of investment is taking place on port and infrastructure projects in the Emirates. Clive Woodbridge reports
C
argo handling activity at ports in the
quarter delivering excellent growth, as Dubai
the end of 2012. The idea is that this investment,
United Arab Emirates (UAE) con-
continues to strengthen its position as a global
which will boost the port’s annual capacity from
tinues to recover strongly this year,
trading hub for the fast growing economies of
14 million teu to 15 million teu, will allow Jebel Ali
despite concerns over the health of
the Middle East, India and Africa.”
to handle six 15,000 teu vessels simultaneously.
the shipping industry globally. Container volumes
Jebel Ali is being called up on to handle a
The second biggest container hub in the UAE
moving through the country’s ports in particular
greater number of very large container ships
is Khorfakkan, which is operated by Gulftainer
are increasing at a much more heathy rate,
and, to ensure it can fully accommodate this
under an agreement with the Sharjah Ports
reflecting both a steady improvement in the local
trend, DP World has recently announced that
Authority. The operator indicates that volumes
economy and strong demand in other Middle
it will build a 400m extension to its Terminal 2
were running at around 10% higher than in 2010
East Gulf countries, such as Saudi Arabia, Qatar,
facility, with work due to be completed towards
over the first nine months of the year. Khorfakkan
Bahrain and Kuwait, which are served through the UAE hubs. The generally buoyant trade picture is encouraging continued investment in port infrastructure and equipment. A number of projects are well underway, and others have been announced in recent times, as UAE ports look to meet changing shipping company requirements as well as longer term demand for port capacity in the region. Dubai’s Jebel Ali port is the dominant container hub in the Middle East and has experienced a strong upswing in volume this year. The latest figures released by DP World show that the port handled around 9.5 million teu in the first 9 months of 2011, 11% up on the same period of 2010. Jebel Ali consequently seems well on its way to a record-breaking full year throughput in excess of 12 million teu. As Sultan Ahmed Bin Sulayem, DP World chairman, reflected in announcing the results: ”The UAE region has continued to do well, with the third
KCT
theBaltic Winter 2011 www.thebaltic.com
73
RAS AL KHAIMAH, UNITED ARAB EMIRATES
RAK Ports offer prime locations, quality services, speed of handling, competitive pricing, state-ofthe-art security, and unique opportunities for private industrial development in a maritime environment.
RAK Ports - driving the economic development of the Northern Emirates. For more information contact: Group General Manager RAK Ports. E: gm@rakports.ae
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UAE Container Terminal (KCT) has benefitted from picking up some significant new business from CMA CGM in recent months, the French carrier having transferred some of its regional transhipment work from Salalah in Oman. Gulftainer also operates the Sharjah Container Terminal (SCT), where the rate of growth in container throughput over the first three quarters of this year is reported to have been even higher than that seen at KCT. The ability of SCT to handle larger container vessels will be enhanced by a berth renovation and dredging programme which will increase the available draft to around 12.5m, when it is completed in early 2012. This should provide the basis for another strong growth performance next year. Jebel Ali and, to a certain extent Khorfakkan as well, face a tough new challenger, in the shape of the new Khalifa Port which is being built by the Abu Dhabi Ports Company (ADPC)
Jebel Ali Port
at Taweelah, just 30km from the Dubai hub. Work is well underway on building phase one
initial storage capacity of 250,000 tonnes. The
relatively heavily to make sure that the country
of the new port, which is designed to handle
purpose of the project is not only to provide
has the port infrastructure needed to take
two million teu of containers and 12 million tons
sufficient grain reserves for the UAE but to
advantage of available opportunities and to
of general cargo annually. The container and
provide an important grain transfer hub for other
sustain this role in the face of competition from
multipurpose part of the port is all set to be
countries in the Persian Gulf.
other locations.
operational by the end of 2012 and ADPC will
The strategic location of Fujairah was critical
be looking to attract some major container lines
in the decision to establish the grain reserves in
into its deepwater, and highly automated facility.
the eastern Emirate. Fujairah is located outside
The intention is that cargo operations
the Gulf and the Strait of Hormuz, which has
Newbuilding projects highlight shipping ambition
currently at the existing Mina Zayed port in
in the past been blocked in times of conflict,
Shipping companies based in the UAE are
Abu Dhabi will be transferred to the new port
affecting the flow of trade.
undertaking some important fleet development
in the course of 2013. Further reflecting the
The port of Fujairah is also a significant
initiatives at the present time. Most notably
buoyancy of the UAE market, and in particular
gateway for liquid bulk traffic, a role that will
perhaps, the United Arab Shipping Company
the investments taking place in the emirate of
be further strengthened with the imminent
(UASC) – which has its operational HQ in
Abu Dhabi, container volumes moving through
completion of a pipeline linking Abu Dhabi and
Dubai – will next year take delivery of eight new
Mina Zayed this year have increased at an
Fujairah, again with the strategic aim of providing
13,500teu capacity containerships from South
extremely rapid rate. During the first seven
an outlet outside of the straits of Hormuz. A
Korean yard Samsung Heavy Industries, having
months of this year, the port handled 408,000
second oil terminal at the port was opened in
taken on the first in this A13 class series, the
teu, around 65% more than in the equivalent
mid-2010, and this has an 18m draft and a 25
Umm Salal, earlier this year. The remaining
months of 2010. The new port will clearly have
million tons a year capacity. Plans to build further
sisterships will enter service during the first four
a healthy base flow to begin with, of probably
oil berths to the north of the port are being
months of next year.
close to 750,000 teu annually.
considered, the port says.
Umm Salal is initially being deployed within
The UAE has other significant port operations
The government of Ras al Khaimah earlier
the new AEC8 service that UASC launched in
in Fujairah and Ras al Khaimah and in both
this year launched the RAK Maritime City port
March this year, together with China Shipping
locations significant investments are being made
and free zone adjacent to Saqr port, one of
Container Line, CMA CGM and Evergreen, and
to boost capacity. Fujairah handles substantial
the UAE’s leading dry bulk ports. The project,
which connects ports in China and Malaysia with
volumes of rock aggregates, which are shipped
which has involved an investment of around
Le Havre, Rotterdam, Hamburg and Zeebrugge
for construction projects mainly in the Gulf
£100 million, covers an area of 800 hectares and
in northern Europe. When the full fleet of nine
region. To keep pace with demand, the port of
includes a new dedicated harbour and 5000m of
A13 vessels has been delivered, however, UASC
Fujairah has this year commissioned a new bulk
quay wall, with zones set aside for general cargo
will use its latest newbuildings to establish a
loader that has double the handling rate of the
handling, shipbuilding and repair and other
standalone service covering the Europe-Asia
existing loader.
activities. The port authority is now marketing
trades, with direct calls in the Middle East, the
the Maritime City to prospective tenants, offering
company’s core market.
Other projects include the development of grain silos, with associated loading and
lease agreements of up to 25 years. With
all
the
turmoil
surrounding
UASC’s
sister
company,
United
Arab
the
Chemical Carriers (UACC) has six MR type
be operational by early 2012. This investment is
Arab Spring, the UAE’s position has a safe
45,000 dwt chemical tankers on order at the
part of the UAE’s Strategic Grain Reserve project
and stable centre for regional trade has been
Shina Shipyard in South Korea and the naming
and the first phase involves the establishment
enhanced. The governments of the respective
ceremonies for the first two in the series, UACC
of 14 wheat silos and six rice silos with an
emirates are taking the opportunity to invest
Masafi and UACC Messila took place this
theBaltic Winter 2011 www.thebaltic.com
75
discharge arms within the port, which are due to
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Confirmed speakers to date: Captain Peter Jodin Safety Manager, D.P., CSO Wallenius Marine AB Geoff Hunt Quality Assurance Superintendent “K” Line LNG Shipping (UK) Ltd Giles Noakes Chief Maritime Security Officer BIMCO Tony Foster Chief Security Officer Gardline Marine Nigel Carden Deputy Chairman Thomas Miller P&I
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UAE Delivery of the Liwa-V marks the end of an intense period of deliveries that started with the bulk carrier Shah, handed over in October 2010. According to Ali Obaid Al-Yabhouni, general manager, “This major expansion of our fleet reflects the growing strategic importance attached by ADNOC to owning and operating its own ships. All our vessels have been employed from the day they were delivered.” Also included in the newbuilding programme completed in 2010-11 were a number of 57,000 dwt bulkers, 73,000 dwt tankers and two 1100teu containerships. The ADNATCO-NGSCO fleet now comprises a total 30 vessels, including eight LNG carriers. UMM Salal UASC
Also based in Abu Dhabi, Eships does not have any newbuild projects at the moment. It
September. The remaining four are expected to
Emarat Maritime, part of the Sharaf group,
has, though, added a 2005-built 46,000 dwt
join the UACC fleet, which currently comprises a
and Gulf Energy Maritime (GEM) are among
MR products tanker to its fleet this year and
total of 12 MR and Panamax LR1 type tankers,
other Dubai-headquartered companies with
has also chartered in a similar vessel to further
in the first half of 2012.
newbuilding programmes in hand. Emarat
increase its capabilities in the MR products
Another Dubai-based company that is active
has four 60,000 dwt bulk carriers which are
tank segment. Eships now has six modern MR
in the newbuilding market is Gulf Navigation
contracted with the Oshima yard in Japan, while
type tankers; two LPG carriers and nine small
Holding, which owns and operates a fleet of 12
GEM has two 115,000 dwt Aframax tankers on
product and chemical tankers. In addition Eships
crude oil and chemical tankers, totalling around
order for delivery in 2012. Emarat has, though,
is at present chartering up to eight panamax
1.6 million dwt. During 2011 the company has
also been selling some of its existing tonnage,
and handymax bulkers to fulfill various bulk
purchased, and chartered out, a 300,000dwt
to trim the fleet in advance of the arrival of
transport commitments, including new contracts
VLCC, Gulf Eyadah, and has also placed orders
these new ships. Disposals this year include the
of affreightment for shipping alumina and iron ore
to build two new 320,000 dwt VLCCs which will
sale of the Dubai Energy and Dubai Jewel, two
secured in the past year.
join the fleet in 2012 and 2013. The company
supramax bulkers, reportedly to the Pakistan
says discussions are underway with regard to
National Shipping Company.
Chief financial officer Richard Coxall echoes the sentiments of many regional players when
Shipping companies based in Abu Dhabi
he says: “While these are challenging times in
have also been actively investing in new tonnage.
most of the shipping markets, Eships is well
Gulf Navigation’s five year strategic plan
In October this year ADNATCO, which together
positioned to take advantage of opportunities
calls for the expansion of the VLCC fleet to nine
with NGSCO makes up the shipping arm of
in the MENA region, which has been resilient
vessels, the chemical tanker fleet to 12 ships
the ADNOC group, took delivery of its fifteenth
to economic pressures and where trade levels
and the development of a fleet of Aframax and
newbuild vessel, Liwa-V, a 105,000 dwt oil
continue to increase.
offshore support vessels. The company has this
tanker built by HHI of South Korea. The Liwa-V
year, however, withdrawn from the OBO market,
and the sister Abu Dhabi III, delivered in July,
seabourne trade growth and our role within
selling its six strong fleet, which was suffering
are the largest new tankers yet acquired for the
that growth.”
significant losses.
ADNATCO-NGSCO operation.
possible orders for two more VLCC newbuilds at a Chinese yard.
“We
remain
optimistic
about
regional
Eships Dgon
theBaltic Winter 2011 www.thebaltic.com
77
Corporate viewpoint Port of Gibraltar
Gibraltar Port – one stop shop T
he Port of Gibraltar is seeking to expand its
possible. We are constantly seeking to upgrade
and Bunkers Gibraltar to offer extremely
bunkering capacity with a range of innovative
our facilities and services and are currently in the
competitive prices. Gibraltar enjoys a unique
proposals currently under consideration. Already
middle of an Environmental Impact Assessment
tax-free status within the European Union and
the busiest bunkering port in the Mediterranean,
(EIA) on whether bunkering should be allowed to
charges low ports dues. Its four bunkering
handling 4.3m tonnes of bunkers in 2010,
take place on the Eastern side of Gibraltar. Once
companies can supply all grades of marine fuel
the port is seeking to further capitalise on its
the EIA has been completed, it will be opened to
from 30 cSt to 380 cSt and there are constant
strategic location by potentially opening up its
public debate, after which the Government will
quality checks by each company. Bunkers are
eastern anchorage as well as examining propos-
take a decision on the best way forward.”
normally delivered by barge while the vessel is at anchor in Gibraltar Bay, but they can also be
als to move floating storage facilities out of the
With its strategic location on the edge of one
harbour. The move comes on top of the port’s
of the world’s busiest shipping routes - some
recent successful implementation of a new VTS
110,000 vessels transit the Strait of Gibraltar
However, whilst around three quarters of
system which enables Gibraltar to manage the
each year - the Port of Gibraltar has always
all Gibraltar port calls are for bunkers. the port
vessels entering its port efficiently by warning
benefited from the geographical advantages
offers far more than a convenient fuelling point
them 24 hours in advance of any delays and
afforded by its natural deepwater bay setting.
for ships. Tony Davis is keen to emphasise that
significantly cutting congestion.
Just over 11,000 vessels called at the port in
it is a “one stop shop for shipping.” He points
2010.
out that Gibraltar, whose laws are based on the
Gibraltar’s Director of Maritime Affairs Tony
delivered at berth in the harbour.
Davis explains: “We are a port which is limited
Not only is it conveniently located, but its
UK legal system, is a very prominent place for
in size and our focus has to be on dealing
high turnover of vessels enables its bunker
ship arrests and home to a huge legal fraternity.
with the ships which call here as efficiently as
suppliers, Vemaoil, Cepsa, Aegean Bunkering
Its ship repair facilities, operated by Gibdock are
78
theBaltic Winter 2011 www.thebaltic.com
Corporate viewpoint Port of Gibraltar currently busier than ever before. The climate,
Tony Davis cites the example of the swift
with mild winters and warm dry summers, is
changing of legislation to ensure that cruise
North Mole, P O Box 1179
ideal for year round repairs and thanks to its
ships can open their casinos and retail facilities
Gibraltar
work force’s many years of experience, the
after 1800 when in port.
Tel: +350 200 46254
quality of workmanship and expertise is second to none.
“Speaking to cruise ship operators this March at the Cruise Shipping event in Miami this year,
Gibraltar Port Authority
Fax: +350 200 51513 Email: gpaenquiries@portofgibraltar.gi
Ships transiting the Strait of Gibraltar, but not
we were struck by the number of companies
wishing to come off charter or leave international
who told us of the financial implications of
Ministry for Enterprise, Development,
waters can take advantage of the significant
shutting down many of their commercial
Technology and Transport, 771 Europort
off-port limit operations undertaken by local
on-board operations when in port and how
Gibraltar
companies. These services include supplying
they were forced to leave Gibraltar at around
Tel: +350 200 52052
charts, stores, spares etc… and even a change
1700 and circle in the Mediterranean before
Fax: +350 200 47677
of crew while still offshore, avoiding the time
calling at Cadiz or Malaga the following morning.
Email: info@medt@gibraltar.gov.gi
and expense of putting into port. Tugs and
Parliament passed the relevant legislation in
other vessels can bring the required stores and
August!” Tony Davis believes that it is this kind
Gibraltar Maritime Administration
personnel out from Gibraltar and effect a transfer
of attention to detail and swift resolution of a
Watergate House, 2/8 Casemates Square
while the ship is still on the high seas.
problem which has enabled Gibraltar to stay
Gibraltar
ahead of the pack.
Tel: +350 200 46861
Gibraltar is a popular cruise ship destination with a record 330,000 passengers from 190
“We can never afford to be complacent
calls, visiting last year. “We are currently in
and are always on the lookout for further
the early planning stages of creating a new
opportunities.”
Fax: +350 47770 Email: maritime.registry@gibraltar.gov.gi
dedicated cruise berth and also refurbishing
Gibraltar Tourist Board
the cruise terminal opened in 1997,” says Tony
Duke of Kent House, Cathedral Square
Davis.
Gibraltar Tel: +350 200 74950
With the opening of a new £55m air terminal, the number of flights to and from Gibraltar looks
Fax: +350 74943
set to swell significantly, further boosting the
Email: information@tourism.gov.gi
attraction of the peninsula for crew changes. Gibraltar Chamber of Commerce
The small size of Gibraltar and the very close connections between the Port Authority,
Watergate House
Maritime Administration and government work
2/6 Casemates Square
hugely in its favour when it comes to ensuring
Gibraltar
that legislation and working practices support
Tel: +350 78376
the needs of shipowners and operators using
Fax: +350 200 78403
the port.
Email: info@gibraltarchamberofcommerce.com
theBaltic Winter 2011 www.thebaltic.com
79
Maritime cluster
Rock resilience Diversification has been a key element in Gibraltar as the Rock hopes that a new 10% corporate tax rate will encourage investors, while it continues to build up the shipping registry and attract ship repair and offshore work
L
ike many other sectors, Gibraltar ship-
docked the 3,000gt offshore survey vessel Boa
Terminal refurbishment
yard Gibdock has been targeting the
Galatea in September, with work including wet
The Gibraltar government is keen to encourage
offshore industry, notably clients in the
blasting and service work to the ship’s aszimuth-
cruise business to the Rock and announced in
jack-up and semi-submersible segment,
ing thrusters. Refitting work for the former Royal
October that it planned to start a major refur-
and October saw the arrival of the semi-sub-
Navy vessel Dunster for use as a medical ship for
bishment and extension of the existing cruise
mersible Etesco Millennium, the first rig into the
the Vine Trust is also underway.
terminal so that it can handle larger ships and
yard since 1998.
Gibdock chief executive Joe Corvelli has
more passengers.
Gibdock will be carrying out remedial work
said that despite the uncertain global economic
The first phase of the project will include
on the rig and also conducting a survey to deter-
position, the sectors that the yard has chosen to
demolition of the ex-Ice Box building and
mine whether further work is needed as the rig
focus on are “showing resilience” and good cus-
a 800m2 extension to the existing building.
has been in continuous operation offshore for a
tomer relationships should see the yard through
According to deputy chief minister Joe Holliday:
five-year period.
the next year in “reasonably good shape”.
“The cruise terminal is a major entry point for
The yard’s location makes it ideal for han-
The yard has also been carrying out repair
visitors to Gibraltar and has handled around
dling rig repairs, whether they are from the
and conversion work for the cruise industry,
2,500 cruise ship calls and three million passen-
Mediterranean, Black Sea or West Africa. It is
including Pullmantur and Louis Cruises. Location
gers since it opened on 17 July 1997”.
also seeking more work from the offshore survey
is once again an important factor for cruise
However, the extension is essential in view of
vessel segments and cites among its customers
companies in the Mediterranean, which have
the increasing size of cruise ships, with average
Solstad and Boa Offshore.Boa Offshore dry-
seen locally based repair facilities closing down.
numbers of passengers rising 85% between 1996 and 2012. “This means that over a 15-year period, ships have effectively doubled in size and the cruise terminal is being refurbished and extended to be able to handle these vessels more efficiently and provide a more contemporary look and feel”. The government has been lobbying cruise lines to encourage them to consider Gibraltar for “partial turnarounds”, the government said.
List of flags of low risk The Gibraltar Ship Registry has received a boost with the news that it has now achieved a place on the list of flags of low risk by the Paris Memorandum of Understanding on Port State Control. The Gibraltar registry was audited earlier in the year. There was a 4% increase in the commercial fleet registered in Gibraltar last year and new additions were relatively young in age. New legislation has also enabled 24m-plus yachts to be registered in Gibraltar, which should prove an attractive proposition for the Rock if it targets the Rock of Gibraltar
80
source: Gibraltar government
theBaltic Winter 2011 www.thebaltic.com
superyacht market.
Maritime cluster Borders and Coastguard change The government has also been making changes to the Borders and Coastguard Agency, which will be responsible for a number of tasks including immigration control at points of entry and security controls at the cruise terminal and air terminal. The body will also have responsibility for pollution response and search and rescue operations. This should streamline activities, which have in the past been hampered by political interventions in salvage operations or paralysis during government elections. The Borders and Coastguard Agency takes over responsibility for those functions previously carried out by private concern Security and Immigration Limited, and Andrew Bonfante has been appointed as chief executive of the agency.
Fire findings released One of the highest profile incidents in Gibraltar this year has been the fire and explosion in May at the Nature Port reception facilities. The findings of an investigation carried out by Capita Symonds on behalf of the government have just been released. The investigation looked into the causes of the incident, as well as the management systems and health and safety procedures of the plant operators and the condition of tanks and plant. Two welders were injured in the blast, as well as 12 passengers on board the Royal Caribbean ship Independence of the Seas. According to the government: “The cause of the explosion has been attributed to the holes in the roof of the tanks that allowed flammable vapour to escape from the tank and into the atmosphere. The welder, who had been welding a piece to the guardrail at one of the two main tanks struck an arc when he began welding and, in the opinion of the investigator, that arc caused the escaping vapour to ignite.” Findings of the investigation include failure to
Local attraction
source: Gibraltar government
manage contractors when undertaking welding operations, failure to repair corrosion perforation
assessment was underway. The government
by government statements on any commercial
on tanks, departures from a “sound health and
has said commercial activity within the southern
activity taking place within the southern waters
safety management system expected of any
waters of Gibraltar’s special area of conservation
of the Gibraltar Special Area of Conservation
organisation operating a potentially hazardous
must comply with the Habitats Directive and if
(SAC) an EU protected area.
plant such as this” and lack of transparency in
“any significant impact is identified during the
vetting procedures. Nature Port’s licence was
Environmental Impact Assessment”.
The government says that if any significant impact on the SAC is identified, a full “appropri-
suspended following the publication of the report
The bunkering issue has been a topic for
ate assessment” will be carried out. According
and is not due to be lifted until a final decision
debate in Gibraltar, not least because of election
to deputy chief minister Joe Holliday: “While it is
has been taken on the licence and whether defi-
campaigning. On one hand, the intention is to
understandable for environmental groups to be
ciencies have to be remedied.
provide refuelling during limited time frames, but
concerned about any impact that bunkering on
on the other, the proposals have to take into
the east side may have on the marine SAC, they
Environmental impact
account opposition from environmental groups.
may rest assured that this will not be allowed
Bunkering activities on the east side of Gibraltar
Competition from other regional ports has made
to proceed until the government has fully con-
have also been the focus of environmental
the development of Gibraltar a prime initiative if
sidered the results of the EIA. The government
activity, following a government decision that
the Rock wants to stay in contention with local
will publish the EIA when completed and will
the Gibraltar Port Authority was considering
rivals, notably Spanish ports.
encourage a public debate on this issue. The
allowing bunkering and an environmental impact
Conservationists have not been reassured
theBaltic Winter 2011 www.thebaltic.com
government decision will be taken thereafter”.
81
PORT OF The Port of Gibraltar offers: A prime location at the southern tip of Europe
READY AND WAITING
Safe anchorage High quality bunkers at competitive prices State-of-the-art cruise facilities Proximity to International Airport Duty-Free provisions A wide range of maritime services
Gibraltar Port Authority North Mole, Gibraltar Tel: +350 20046254 Fax: +350 20051513 E-mail: gpaenquiries@portofgibraltar.gi
www.gibraltarport.com
@
For more information on these companies and to view this publication online using the latest Page-Turning technology, visit:
www.thebaltic.com AMBREY RISK ASPIDA MARITIME SECURITY DEUTSCHE BANK DP WORLD FLEET HAMBURG LLP HADCON LIMITED HART SECURITY LIMITED HYDE MARINE INC IMS MARINE SURVEYORS & ANALYTICAL LABORATORIES LTD KTK TUGS LCH CLEARNET LIMITED MACS BENELUX B.V. MAST ASSET SECURITY & TRAINING (MAST) LIMITED MINISTRY OF ENTERPRISE, DEVELOPMENT, TECHNOLOGY & TRANSPORT
Scandinavia
Going green in Gothenburg Scandinavian firms have always been at the forefront of new initiatives to make shipping greener, whether it be port incentives for green ships, or innovative engine designs
A
s fuel costs continue to rise, one
with new regulations are not going to come
process, meets ECA requirements and is also
example of making shipping greener
cheap. Many are considering duel fuel systems
an economic winner since methanol and LNG
is the initiative by the Swedish port of
using LNG.
are about the same price alongside ship.
Gothenburg, which has developed a
Ingvald Fardal, president and CEO of
“Will we win a delay? I don’t know, but the
plan to encourage ship owners and operators
Norway’s Fjord Line, told the recent Interferry
most positive thing about our campaigning is
to choose cleaner fuel for their vessels, offering
annual conference in Barcelona that his
general awareness of what short-sea shipping
reimbursements for increased fuel costs.
company is planning a dual fuel LNG upgrade
is about and a realisation that the one-size-fits
Shipping lines that choose a fuel containing
within a year of two newbuilds being delivered
-all mentality is not always prudent.
a maximum of 0.1 % sulphur can receive up to
in late 2012. “Where we operate is the strictest
“Our efforts have rubbed off in that, if we
SEK 250,000 in compensation for increased
control area in the world and it’s going to get
had not had this big fight on sulphur, I think
fuel costs and other fuels, like LNG can also
even tighter,” he said. “We know that switching
we would have been dragged into EEDI, where
qualify for financial support. Gothenburg has
from HFO to distillate is going to cost a lot of
we have now won a two-year extension to find
been charging supplements for vessels with
money and we are not attracted to the scrubber
a workable formula that does not penalise the
more than 0.5% sulphur content for a number
option, so LNG seems a very good alternative.
special requirements of ferries. Regulators are
of years and the revenue serves to compensate
“But where can you fill your ship? There
very willing to listen, but they need facts and
aren’t many facilities in Europe today. And can
figures, not sentiment, which is something
When announcing the new incentives,Magnus
you fill with passengers on board? This is a
our industry needs to work harder on. Lack of
Kårestedt, Port of Gothenburg chief executive,
crucial consideration and we need confirmation
knowledge is the real enemy, not the ambitions
said: “We have worked with our customers to
of indications that we will get approval.”
of regulators.”
those owners using cleaner fuels.
arrive at proposals for how this revenue should
Per Stefenson, marine standards advisor
Former Stena group director of sustainability
be used. Providing support for low-sulphur fuel
and R&D manager at Sweden’s Stena group,
Johan Roos, who became Interferry’s executive
is one of several initiatives.
highlighted another concern over LNG at the
director of EU and IMO affairs in September, told
“Through this environmental measure, we
conference – that the risk of methane slip could
conference that he recalled raising objections to
aim to demonstrate that it is possible to
have consequences 20 times worse than CO2
the sulphur content proposals at the IMO in
take important steps towards cleaner shipping
– and suggested that methanol could be the
2008: “I felt very small with 168 governments
through voluntary collaboration and our hope is
fuel of the future.
thinking I wanted to kill every child, lake and
He described a retrofit project with Danish
flower in northern Europe. But where were the
company Haldor Topsoe in which methanol is
impact assessments? Only ECSA looked at the
Scandinavian
reformed on-board to user-friendly Di-Methyl-
cost of putting freight back on the roads”.
companies know that the cost of compliance
Ether, explaining: “It’s perfect for the diesel
A future with “a much more diverse palette
theBaltic Winter 2011 www.thebaltic.com
83
that, in this way, we will facilitate the transition to low-sulphur fuels.” However,
as
elsewhere,
the 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
Visit the Baltic’s re-designed website. Featuring a new daily news service compiled by the Baltic editor Sandra Speares
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Scandinavia of fuels” was the vision of Finnish engine manufacturer Wartsila’s director of concept design Oskar Levander. The right choice involved a difficult equation based on issues such as area of operation, time spent in ECAs, whether it was a newbuild or retrofit project, the space required for LNG tanks or scrubbers and fuel price predictions. Marine gas oil was the technically easy, but high cost solution for meeting the 0.1% sulphur content limit in ECAs from 2015 meant other options were “clearly better” for such
Norwegian tonnage tax regime comeback
T
he overhaul of the Norwegian tonnage tax regime in 2007 was infamous due to the protests and law suits that followed the government’s decision
operations. Levander said that LNG delivered
to retrospectively tax previously tax-exempted
the lowest emissions and low price – a third
income, write Are Zachariassen and Anders
cheaper than MGO. Although there were space
Myklebust, partners at Wikborg Rein, Norway.
and availability issues, he added: “LNG has
In 2010, the Norwegian Supreme Court
great potential for newbuilds, offering enhanced
ruled that retrospective taxation was not
value and short payback time.” The better
permissible and should be reversed. With this
retrofit option was to use scrubbers to clean
decision, confidence has been restored in the
SOx from HFO exhaust gas – “it’s existing
tonnage tax regime. All in all, the Norwegian tax
technology and it works.”
package has now become very competitive and shipowners, both in Norway and internationally,
Targeting the Nordic region
are showing an increased interest in the
Meanwhile, international law firm Norton
country’s tonnage tax system.
Are Zachariassen
Rose recently launched a new internal group
Norway’s tonnage tax regime was first introduced in the mid-1990s, but since then has
headed by London based Tomas Gärdfors
undergone a number of changes. The overhaul that took place in 2007 considerably improved
to target business in the Nordic region.
the tonnage tax regime, in particular by introducing a final tax exemption for shipping income.
Norton Rose believes that the trend of
Although the new rules and final tax exemption were welcomed as being competitive and a
outward investment from Nordic countries
step in the right direction, the retrospective taxation of previously untaxed profits was seen
into Canada, Africa and Australia mirrors its
as unconstitutional and indicated a risk of further politicisation of the Norwegian tax system.
own expansion in these regions, which it
It was thought that many shipowners would look elsewhere to establish themselves as it
has been making through major mergers in
could no longer be said with confidence that the Norwegian tonnage tax system offered
the past couple of years. Recent years have
the desired certainty and stability.
seen a constant trend of outbound investment
Since then, views have changed. Shipowners – at least those who were not hit by the
from Nordic countries into economies such
retrospective taxation – have embraced the Norwegian tonnage tax system as it currently
as Canada, Africa and Australia – the same
operates today. The emphasis is on the beneficial features of the scheme and not on the political
regions in which Norton Rose has made recent
risks associated with it. The Norwegian Supreme Court’s decision to set aside the retrospective
deals, including advising on two of the largest
taxation as unconstitutional has now further significantly contributed to faith being restored in
energy wind farm transactions in Sweden,
the Norwegian tax system.
and a number of recent mining transactions
There is a growing interest in the Norwegian tonnage tax system from both Norwegian and
in Sweden and Finland. The law firm has also
international shipowners. Considering the historical background, and the fact that Norway is
been heavily involved in the Icelandic financial
often deemed to be “high tax” territory, the interest from international shipowners is perhaps
crisis since 2008 and Swedish based Stena,
surprising. However, such interest makes greater sense when assessing the combined benefits
and energy giant Vattenfall are also long-
of the tonnage tax regime and the general Norwegian tax system.
standing clients of the practice.
The tonnage tax regime offers full tax exemption on shipping income, including bareboat
According to Tomas Gärdfors, partner at
income and gains from the sale of vessels, as well as related management activities. The
Norton Rose: “It’s no secret that the Nordic
tonnage tax regime also allows a wide range of offshore vessels to be included, which is not
economies are among the strongest in Europe.
possible in some EU countries.
Our understanding of the region, alongside our
Dividends can be distributed without taxation to Norwegian and EU shareholders as a
own growing global footprint, has meant we
result of the Norwegian participation exemption. Norway does not impose withholding tax on
have been able to play our part in this fast-
interest. Overall, the regime offers flexibility on holding structures and financing and Norway also
increasing flow of business between the Nordic
has a broad set of double-tax treaties, generally creating a good framework for international
countries and international growth economies.
shipping activities.
“Until now, most of our work there has been
Overall, the Norwegian tax package can now be considered very competitive in comparison
done fairly opportunistically. It’s meant we’ve
to other jurisdictions. Added to this competitive advantage is the fact that Norway is an
been able to develop a prominent reputation as
attractive place for international shipping activities due to the well-developed Norwegian
one of the most active international practices
maritime cluster of shipowners, yards, equipment producers, banks, insurers and a wide range
in the region, but such an approach can only
of service providers, which provide a sophisticated infrastructure that is difficult to better in other
take you so far. Establishing this internal Nordic
tax-friendly countries.
group will help take us to the next level.”
theBaltic Winter 2011 www.thebaltic.com
85
Corporate viewpoint Fleet Hamburg
A new port of call With the launch of Fleet Hamburg, a strong maritime law practice emerges
O
n 1 December 2011, a new maritime law
is important to stand firmly on the side of ship
team: an equal number of fee earners and staff
practice, with an initial crew of eight law-
owners or other operators when it comes to
came originally from Taylor Wessing and Ince
yers qualified in England and Germany, was
the conflict interface between ship owners or
& Co Hamburg. Almost half the partners are
launched in Hamburg. It is comprised of the
operators on the one hand and banks and other
women and the age range is balanced. As well
entire four-man strong team of the practice
investors on the other.
as German-qualified lawyers, there is both an
area Transport & Logistics at international law
“Unlike larger legal practices, we are not
English-qualified solicitor and a barrister, with a
firm Taylor Wessing, who left the firm to open
primarily interested in clients from the financing
further English lawyer joining the team in early
a new practice with four colleagues from the
business and are thus in a position to focus
2012. All lawyers in the new practice have many
Hamburg office of Ince & Co – going by the
on advising and representing ship owners
years, even decades, of professional experience
name of “Fleet Hamburg”. This will be a new
and operators as clients when dealing with
in specialist areas, primarily in shipping and
port of call for all legal matters relevant to the
transactional or financing matters. Naturally, and
cross boarder or international commercial law,
maritime industry. The following lawyers will be
in the interest of our clients, we co-operate and
and as a result are well connected globally.
part of Fleet Hamburg: Christoph Hasche, Axel
liaise with banks, investors and other financial
The offices of Fleet Hamburg are precisely
Salander, Klaus Kostka, Ann-Kathrin Burchard,
institutions to find solutions to problems that
where the seed for the port of Hamburg was
Eva Bodenbach, Arthur Steinmann, Dharshini
find the long term support of all partners in a
planted in 1188, at the Nikolaifleet, set in
Bandara and Philipp Drömann.
business. This is where the in depth knowledge
the immediate vicinity of venerable Hamburg
of the maritime industry and experience of the
ship owners, brokers and related business,
lawyers of Fleet Hamburg comes into its own.”
between the churches of Sankt Nikolai and
Christoph Hasche, Managing Partner at Fleet Hamburg, says: “We shall concentrate on
Sankt Katharinen, only a short distance from the
advising the German and international maritime
Dharshini Bandara, an English qualified
industry, with our focus being ship owners
barrister, with Christoph Hasche also Managing
and managers, charterers and operators of
Partner of Fleet Hamburg, adds: “We have a
ships and other means of transport, terminal
strong team in place that complements itself
For more information, contact:
operators, as well as their insurers. As such,
perfectly. Fleet Hamburg is big enough to belong
Dr. Christoph Hasche, Rechtsanwalt:
we see ourselves as partners for our clients’
to the leading maritime law practices and small
c.hasche@fleet-hamburg.com
day-to-day business and as counsel in complex
enough to be fast, agile and cost conscious
Axel Salander, Rechtsanwalt & Solicitor:
disputes or contractual matters, ranging from
when meeting clients’ needs. We are in an
a.salander@fleet-hamburg.com
ship design through to building and construction
excellent position to operate internationally out
Dr. Klaus Kostka, Rechtsanwalt: k.kostka@fleet-
of any vessels or maritime structures.
of Hamburg. Those we have introduced our
hamburg.com
concept to, and also their insurers, have reacted
Dr. Eva Bodenbach, Rechtsanwältin:
very positively. ”
e.bodenbach@fleet-hamburg.com
“Of course, a large part of our practice consists of charter party disputes, cargo claims
Rathausmarkt and HafenCity.
Dharshini Bandara, Barrister: d.bandara@fleet-
or other disputes arising out of contracts of
Highlighting the depth of legal qualifications
affreightment, bills of lading or ship management
in the team, ranging from German qualified
hamburg.com
contracts, although our aim will be to resolve
Rechtsanwälte to an English qualified barrister
Dr. Ann-Kathrin Burchard, Rechtsanwältin:
disputes in the interest of our clients before
and
a.burchard@fleet-hamburg.com
matters are litigated.”
Hamburg, we can advise on and conduct
Dr. Arthur Steinmann, Rechtsanwalt:
Discussing Fleet Hamburg in the context
litigation before the German and the English
a.steinmann@fleet-hamburg.com
of the current economic climate, Christoph
courts, allowing for a more direct and effective
Philipp Drömann, Rechtsanwalt: p.droemann@
Hasche further sets out the role of his partners
representation of our clients’ interests in the
fleet-hamburg.com
in assisting clients with the often very difficult
respective
assignment of how to deal with economic
represent clients in cases brought before any
solicitor,
Dharshini
proceedings.
continues:
Further,
“From
we
can
problems experienced within a client’s business:
arbitration tribunals involving English or German
“We have partners who are experienced in
law, whether located in England, Germany or any
Fleet Hamburg LLP
dealing with insolvencies and the restructuring
of the arbitration centres worldwide. It follows
Willy-Brandt-Str. 57, 20457 Hamburg, Germany
of companies, and who will be able to guide a
from this that we serve the shipping community
Tel: +49 (40) 5 700 700
client in finding possible ways out of a difficult
and maritime industry doing business in Northern
Fax: +49 (40) 5 700 70 200
situation before a business becomes insolvent.
and Central Europe and internationally.”
info@fleet-hamburg.com
In this increasingly volatile economic climate, it
86
Fleet Hamburg consists of a well balanced
theBaltic Winter 2011 www.thebaltic.com
www.fleet-hamburg.com
German Law
Going for growth in Germany International law firms have been expanding their presence in the German market with some new ventures and an international approach to serving their clients
N
orton Rose has had a presence
there will be a “larger mix
in Germany for 10 years, recently
of financing in the future”.
expanding by opening an office in
Given the economic climate,
Hamburg, its third in the country. It
there is a move towards
is building up its shipping practice, which was
more
previously centred on Munich.
a broader base of equity
London-based partner Gordon Hall came to
syndication
and
participation.
Hamburg to manage and develop the shipping
Senior associate Timo
practice in the new office, which opened on
Noftz, who is based in
1 May this year. Although Hall says it might
Munich but is in the process
seem strange that Norton Rose has only recently
of moving to the Hamburg
opened in Hamburg, “a lot of the issue is finding
office, acknowledges that
the right opportunity at the right time”.
there had been difficulties
Norton
Rose
is
undergoing
a
large
persuading
people
that
international expansion and Hall said the
“shipping business can be
Hamburg office was already receiving new client
done out of Munich” there is
instructions after its second week in operation.
a strong transport practice.
The practice will offer a combination “not so
He advises, among other
often seen in Germany”, he says, providing both
areas,
German and English law advice and seeking
leasing transactions covering
involvement in cross border syndicated finance.
shipping, as well as railways
The legal practice pulled off something of a
on
international
and aviation.
coup early this year when it hired eight partners
According to Verfuerth,
from DLA Piper’s German operation, seven of
there is a lot of restructuring
whom are based in the new Hamburg office.
going on in the KG market.
According to Ludger Verfuerth, the move from
Funds
DLA was partly with the aim of building up an
approximately 2/3 to 1/3
international shipping practice.
divided into fresh money
He says that 80-90% of German shipping
for
being
new
raised
funds
and
are
for
Dr Christoph Hasche of Fleet Hamburg
believes the outlook for raising funds has
law firms are “boutique” practices and more
restructuring work, he says. Given banks’
changed dramatically and it can take as much
nationally focused, and the only truly international
hesitation to provide fresh funding, the loan
as a year to arrange the necessary funding,
shipping practices based in Germany (aside
profile has changed from a debt/equity split of
which has a significant impact on many projects.
from Norton Rose) were those of Ince & Co and
70%/30% to 60/40 or even 50/50. With the
In the past, there was a large base of retail
Watson Farley & Williams, although the latter is
equity portion being much higher, Verfuerth
customers who were more than willing to give
more geared to the ship finance side alone.
adds that “bridge financing is the difficult part”.
the money. This funding base has now shrunk.
Verfuerth says the KG market in Germany
Bridge financing had been done by the banks in
“We now see more private placement and KG
is changing. There are a lot of challenges and
the past but this is no longer the case. Verfuerth
houses are now targeting institutional investors
theBaltic Winter 2011 www.thebaltic.com
87
German Law Verfuerth adds that many
Along with German-qualified lawyers, there is
brokers
both an English-qualified solicitor and a barrister,
have been affected by the
with another English-qualified lawyer set to join
sanctions and “feel unsecure
the team early next year. The partnership is
about the situation”.
further strengthened by a lawyer specialising
Hamburg-based
in restructuring and insolvency matters, which is particularly valuable in light of the continuing
Fleet Hamburg
shipping crisis.
Meanwhile, a new maritime
The German Maritime Arbitration Association
law practice has been set up,
(GMAA), for which Hasche acts as secretary,
drawing on personnel from
and the Society for Hamburg Lawyers (GHJ) will
Ince
have premises in the offices of Fleet Hamburg.
&
Co
and
Taylor
Taylor Wessing, meanwhile, is not planning to
Wessing. The new practice was
offer legal advice in merchant shipping law, but
launched at the beginning
will remain active in the areas of yacht building,
of this month with eight
marine shipbuilding and the offshore-industry.
lawyers drawn from the
Dr Wolfgang Rehmann, managing partner at
transport & logistics team
Taylor Wessing comments: “We wish Christoph
of Taylor Wessing and a
Hasche and his team all the best and express
further four lawyers from
our thanks for many years of helping to establish
Ince & Co’s Hamburg office,
our Hamburg office, which enjoys a reputation
trading under the name Fleet
as one of the top names in Hamburg.”
Hamburg. The
team
Hasche,
Salander,
Klaus
Anniversary at Ince Ince & Co Hamburg celebrated its tenth
Burchard,
anniversary in September. In the 10 years since
Eva Bodenbach, Arthur Steinmann, Dharshini
it opened, the office has grown significantly, with
Bandara and Philipp Drömann.
the overall number of lawyers increasing to more
Ann-Kathrin German shipyards have been building up
Axel
Kostka,
Jan Heuvels, Ince & Co Hamburg
more,” says Verfuerth.
includes
Christoph
their expertise in the areas of specialist ships
Commenting on the new venture, Hasche,
to support the offshore industry and Norton
previously of Taylor Wessing and now managing
Work from the Ince & Co office in Hamburg
Rose has been providing advice to clients
partner at Fleet Hamburg said: “We shall
is very international in nature with recent
on contractual matters, as well as obtaining
concentrate on advising the German and
work including advising a major German liner
finance from German banks for these specialist
international maritime industry – whereby we
company on a E1.2bn turnaround, including
projects. Another source of work comes from
seek to be a competent and reliable partner
loan agreements, finance lease, and an asset
the cruise industry as German yards take orders
to medium-sized ship owners, managers and
backed commercial paper securitisation.
for new ships.
operators in their day-to-day business and in
The partners coming from DLA also brought
complex disputes.
than 20.
Ince has also been advising Hamburgbased shipowners and their banks in relation
a strong energy practice. Project finance for
“In this increasingly volatile economic climate
wind farms and the specialist ships to maintain
for ship owners and operators, it is important to
and build them is a niche area for German
stand firmly on the side of the ship owner when
Other recent work includes advising Far
shipyards, and one that fits well with the shift
it comes to the conflict interface between ship
Eastern yards and banks on restructuring
towards cross border syndicated transactions.
owners, banks and other investors. Unlike those
newbuilding
Norton Rose’s expanding network of offices,
large legal practices, who are primarily interested
international syndicate of banks in restructuring
which includes strengthening links in South
in the transaction and financing business of
fleet financing.
Africa, Canada, Australia and Latin America, will
the big players and are thus hardly in a position
According to Jan Heuvels at Ince & Co
help accelerate the internationalisation process.
to also advise and represent the ship owner
Hamburg: “We are very pleased to be celebrating
as a beneficiary.”
our tenth year in Hamburg with significant
When
asked
about
expansion
plans
to cancellation of newbuilding contracts and newbuilding disputes.
finance
and
assisting
an
in Germany, Hall says the Hamburg office is
Dharshini Bandara, until recently senior
growth in the office, in response to our clients’
moving to new premises with almost double the
associate at Ince & Co and now also managing
requirements for excellent legal advice. I am
space of the existing office, so they are looking
partner at Fleet Hamburg, adds: “We have a
delighted that we maintain our close links to the
to expand. The company will be covering the
strong team in place that complements itself
shipping and insurance markets and the banking
full range of shipping services, but he says it is
perfectly. Fleet Hamburg is big enough to belong
community, and are extending our reach into the
still assessing market requirements: “the market
to the leading maritime law practices and small
energy and offshore sector.”
is a strange place at the moment”. Services
enough to be fast, agile and cost-aware when
Ince & Co’s senior partner, James Wilson,
will obviously include advice on operational
meeting clients’ needs. Those who we have
comments: “Ince & Co Hamburg demonstrates
matters and claims, but also on regulatory
been able to introduce our concept to, and
the breadth of our practice and our commitment
issues, embargoes and sanctions. Norton Rose
also their insurers, have reacted very positively.
to clients in Germany and Northern Europe. We
has been advising a bank dealing with Iran on
We are in an excellent position to operate
have an energetic and capable team here that
their situation with regards to sanctions.
internationally out of Hamburg.”
continues to develop and expand.”
88
theBaltic Winter 2011 www.thebaltic.com
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Insurance parlance
In the danger zone The International Union of Marine Insurance continues to highlight emergent dangers in shipping operations for the benefit of insurers and shipowners, as Denzil Stuart reports
T
he programme for IUMI’s annual confer-
the body “puts its weight behind any means that
ore. The master halted the loading of the cargo
ence, held in Paris in September, could
will reduce the risk to seafarers, the ship and
a week later when it was discovered to have a
be viewed as a catalogue of various
her cargo”.
high moisture content, raising the risk of lique-
incipient problems that the industry is
Elsewhere, in a pot-pourri of topical sub-
faction at sea. In October, it was reported that
up against. Although planning the annual forum
jects, IUMI focused on vessel vetting and cri-
the dispute was ongoing and the vessel was
starts months beforehand, the programme is
sis management, perishable goods in store,
still at Mobile.
gradually brought together by IUMI’s seven
the development of technology on ships and
As Todd emphasised, cargo may not be
technical committees, each of which arranges
its impact on insurers, LNG applications for
immediately dangerous, but could have a
a workshop during the three days. These cover
modern ro-pax ferries, nuclear-powered ships,
propensity to become dangerous in certain
risks associated with hull and machinery, cargo,
changing risks in the offshore energy market,
circumstances. Under common law, he said,
offshore energy, fishing, inland waterways and
overweight containers and misdeclared contents
charterers/shippers impliedly undertook not to
yachting, loss prevention, facts and figures
by shippers, IUMI’s work at the IMO, cargo
ship dangerous cargo without first notifying the
(stats), and legal and liability matters.
theft, Solvency II, and the enlargement of the
carrier of its characteristics. But notice was not
Panama Canal.
required when the carrier knew or ought to have
This year, as might be expected, piracy
known of the dangerous nature of the cargo.
was a major topic and expert speakers and
One very urgent issue was thoroughly exam-
panellists examined the current situation from
ined and brought close interest among the 600
The speaker explained that the carriage
several different aspects. Payment of ransoms
delegates present, mostly marine underwriters
transaction involved the head owner (hull/P&I),
falls to hull and cargo underwriters under
from IUMI’s 54 member associations. We are
time charterer (charterers’ liability), and voyage
the General Average principle, while the P&I
talking about the causes and effects of cargo
charterer/contract of affreightment holder (char-
clubs have not normally been involved. But in
liquefaction affecting bulk cargoes such as
terers’ liability/traders’ liability/cargo cover).
Paris, the signal was hoisted that this situation
iron ore fines, nickel and so on, and how it can
Daniel Sheard, of marine chemists Brookes
could soon change, particularly as the Somali
endanger the ship, crew and cargo. Indeed,
Bell, said that the IMSBC Code (the essential
gangs have started taking hostage crews ashore
this has become a global concern in shipping
document published by the IMO to ensure
for detainment.
following the dramatic loss of several ships and
safety of ships carrying bulk cargoes) places
their crews.
a responsibility on the shipper to provide
Meanwhile, the use of armed security personnel placed on board during a vessel’s pas-
In Paris, Simon Todd, a maritime lawyer from
before loading: a description of the cargo and
sage through the danger zones continues to be
Ince & Co, said that claims arose in two distinct
its properties, including whether the cargo
hotly debated. Those in favour found a surprise
areas. First, liabilities, affecting crew/dependants
is Group A; for Group A cargoes a certificate
supporter in Britain’s Prime Minister when David
for loss of life and injury, wreck removal, and pol-
of the moisture content and transportable
Cameron announced the government would
lution. Other claims came from loss of the ship or
moisture limit, TML. Moisture must be measured
permit armed guards on British-flagged ships.
repair costs, and loss of time/profit.
on samples taken no more than seven days
The debate continues to rage as this report is written.
Coincidentally, a recent example of the last point occurred when the bulker Red Gardenia
before loading, but TML is not restricted to seven days.
IUMI made clear in Paris that it was sticking
(39,964gt, built 2005), which had arrived at
It was made clear in Paris that industry pres-
to its guns in that it is not opposed to armed
Mobile in early August, was delayed because
sure is intensifying to eliminate the problem, with
guards in principle, a decision it announced
of a dispute between its owners, charterers
the important support of marine insurers and the
early in 2011. IUMI president Ole Wikborg said
and shipper of its cargo of China-bound iron
P&I clubs.
theBaltic Winter 2011 www.thebaltic.com
91
Insurance parlance Marine Shipping Mutual run-off North P&I Club has bought eight million gt hull and machinery club Marine Shipping Mutual Insurance, which has been in run-off since 1 July 2011. MSMI was managed by North’s management
company,
North
Insurance
Management Limited. According to North’s chairman Pratap Shirke, “North will now proceed to manage the run-off of MSMI’s outstanding liabilities. Claims will continue to be handled by North’s claims handling team in substantially the same manner as they have been prior to completion, and former members and brokers should continue to contact the relevant member of North’s team in respect of all ongoing matters.” The club said that “the acquisition does not affect North’s decision earlier this year to defer the launch of a fixed-premium hull and machinery product, though this remains under review. We remain firmly committed to our long-standing strategic aim of expanding North’s product range beyond its core protection and indemnity service, and will continue to consider the possibility of launching a hull and machinery product in the future.”
War risk Strong demand from both owners and charterers for its fixed-premium war risks insurance that offers cover to a limit of $200m is continuing, according to the Strike Club. The club attributes this to its ability to offer a ‘one stop shop’ war risks insurance to cover traditional hull & machinery risks, while also providing additional features including loss of hire due to piracy even in the absence of a hull & machinery incident, or charterers’ loss of
Bill Milligan, chief executive of the Strike Club’s manager
bunkers resulting from a hijacking. The Strike Club plans a general increase of
will continue to have a serious and erosive
no general increase to our premiums for the
10% for the 2012/13 policy year commenc-
impact on shipping operations,” he said. “The
coming year. Despite a recognition that claims
ing February 1 next year for Classes I and II
directors are determined that the club’s financial
are starting to increase again, Shipowners con-
(shore-related risks), and a general increase of
position remains robust and adequate to meet
tinues to grow, reserves are strong and the
5% for Class lll (ship-related risks). In addition,
future challenges and obligations.”
underwriting performance for the first half of the
there will be a full review of each member’s
year is producing some encouraging signs. We
exposure, cover, deductibles and record across
are also conscious that many of our members
Shipowners increase
continue to experience very difficult operating
The increases for the three classes are
The Shipowners’ Club has held its premiums to
conditions, and we believe it is part of a club’s
the same as those applied to the 2011 year.
2010 levels, with an increase of 7.3% in earned
role to help owners keep insurance costs to
A release call of 30% was set for 2012/13
premiums for the half-year ended August 2011.
a minimum.”
for Classes I and II, while the same rate was
The club says its strong results are a “reflec-
Despite announcing no general increase
tion of the organic growth it has experienced
in premiums, Hume said that: “maintaining the
all three classes.
maintained for Class III. Bill Milligan, chief executive of the Monaco-
during the 2010 policy year, principally from the
financial stability of Shipowners is essential.
based club’s manager, said the its results were
offshore sector”. Entered tonnage increased by
We will review closely the record and risk of
considered satisfactory when seen against the
6.5% to 19.45m gt.
each member, working with the broker to ensure
ongoing turmoil in world shipping and financial
Commenting on the results, Shipowners’
that the premiums and terms of entry are
markets. “There seems little doubt that strikes
chief executive, Charles Hume, said: “We
commensurate with the risks that each
and other forms of industrial and political unrest
are very pleased to announce there will be
operation brings.”
92
theBaltic Winter 2011 www.thebaltic.com
ITIC
Simple mistakes can lead to costly claims Charlotte Kirk of the International Transport Intermediaries Club (ITIC) looks at recent examples of costly mistakes leading to claims against brokers and agents
T
he first rule that used to be drummed
recently by a chartering broker who arranged
comment from the shipper that the “consignee
remorselessly into trainee carpenters
a contract of affreightment (CoA) between a
will pay” as confirmation that the consignee in the
was “measure twice, cut once”. It was
Japanese owner and an American charterer.
UK had accepted the cargo on a freight-collect
sound advice, because wood is an
Under the terms of the CoA, the owner had
basis and accordingly issued a freight-collect
expensive commodity and the time to correct
to offer one ship per month to the charterer,
bill of lading. Unfortunately, while the final bill of
mistakes is before they happen. The equivalent
which had a minimum obligation to make eight
lading was issued showing freight-collect, the
term in the shipping industry is “check before
shipments in a year.
agent failed to update the line’s computer system,
fixing”. Merchant ships are no longer made
By the time the broker had received a nomi-
which still showed “prepaid”. Upon arrival in the
of wood, but the consequences of making a
nation from the owner, the charterer had already
UK, the discharge port agent checked the liner’s
mistake can be very expensive.
met the minimum requirement under the CoA.
computer system, saw the prepaid status and
Shipbrokers are particularly at risk in this
It therefore had no obligation to accept the new
released the cargo.
regard. Witness the case of a broker acting for
nomination and said it did not require the ship. In
It soon became apparent that neither the
the owner of a vessel trading in the Mediterranean
fact, the charterer did have a cargo, but had pur-
shipper nor the consignee had paid the freight,
who was asked to consider an offer from charter-
chased it from another trading house (the second
which amounted to approximately $40,000. The
ers that included the term “time from 1700hrs
charterer) on CIF terms. The second charterer
shipper argued that it had sold the cargo FOB
Thursday or a day preceding a holiday until
also had a contract with the same owner through
and provided a commercial invoice and evidence
0800hrs next working day not to count even if
the same broker and had nominated the cargo
of payment to support this. Accordingly, the ship-
used”. When asked by the owner for the week-
under its own contract with the owner.
per argued that the consignee should pay the
The broker’s operations department made a
outstanding freight. The consignee in turn argued
mistake and thought the cargo had been nomi-
that it had bought the cargo CIF, and produced
nated under the first charterer’s CoA. In effect, the
emails to show that CIF terms were discussed/
same cargo was booked twice on the same ship.
negotiated. But it failed to provide evidence that
Negligent advice
The owner was unsuccessful in obtaining an alter-
confirmed the final movement of the cargo was
The broker told the owner that the weekend
native cargo to fill the space on board and claimed
carried out on these terms, claiming that such
working times in Algeria were 1700hrs Thursday
from the broker the full freight it had not received
evidence was “commercially sensitive”.
to 0800hrs Saturday when, in fact (as set out in
on the booking, less the broker’s commission.
end working times in Algeria, the broker responded without checking. Sadly, he got it wrong.
BIMCO’s holiday calendar), the correct answer
ITIC argued that the claim for freight did not
should have been 1700hrs Thursday to 0800hrs
take into account saved expenses, such as
Need for care
Sunday – a difference of 24 hours.
the time and cost involved in cargo working.
With the assistance of ITIC, the agent was able
These costs were deducted, and a settlement of
to persuade the consignee that, even though the
$70,000 was finally agreed.
cargo had been released prior to freight being
The owner agreed to the fixture following this negligent advice and calculated the freight rate on the basis of the shorter period that the broker had
Of course, it is not just brokers who are prone
paid, under the terms of the bill of lading the con-
given. The vessel was delayed in port, and laytime
to making mistakes. In a case handled recently
signee was still liable for the outstanding freight. It
started later than the owner had anticipated. The
by ITIC, a liner agent in South America had to
was also highlighted that, if legal action needed to
eventual shortfall in demurrage was claimed from
reissue an original bill of lading six times, due to
be taken in order to recover the freight, ITIC would
the broker. The result was a claim in the amount
various amendments required by a shipper, in
also seek to recover the legal costs incurred. The
of $25,527, which was ultimately settled by ITIC.
respect of a consignment of bananas headed for
agent offered to accept 95 per cent of the freight,
This is a classic example of how a claim could
the UK. The initial three versions of the original bill
which the consignee ultimately paid.
have been avoided if the broker had checked
of lading provided that freight was to be prepaid,
This is a classic example of the greater need
before answering.
while the subsequent three versions showed
for care. Many claims result from very simple
‘freight-collect’, meaning that the freight would be
housekeeping issues that are overlooked due to
payable by the consignee.
time pressures, or short cuts, which often result
A slightly less classic – indeed, rather unusual – example of a mistake on the part of a broker leading to an expensive claim was provided
The agent had mistakenly interpreted a
theBaltic Winter 2011 www.thebaltic.com
in very large settlements.
93
Legally speaking
Rotterdam redrafting A submission to the EU is calling for it to intervene on the controversial Rotterdam Rules A panel of international maritime lawyers is urging
Alcantara, Dr Juru Milos Pohunek, Douglas
that it will never come into force as few countries
the EU to tell its members not to sign or ratify
Schmitt, Frazer Hunt, Kay Pysden, Professor
have come forward to sign.
the Rotterdam Rules unless amendments to the
William Tetley, Barry Oland, Professor Jan
convention are made.
Ramberg and Julio Vidal.
The group feels the EU is well placed to offer an alternative to the Rotterdam Rules, which is
The legal group believes that the EU “should
Other issues the group highlights are that the
only partially multi-modal, but says it should only
either support an initiative by Uncitral/CMI to
rules expand beyond the contractual parties to
take action if Uncitral/CMI are unable to deal with
draft suitable amendments and protocols to
include anyone acting as a “maritime performing
the problem because it has experience in drafting
the current conventions in placed and give the
party”, which could mean anyone performing
a worldwide convention in order to encourage
trading world a more than credible alternative to
part of the carrier’s obligations during the period
worldwide consensus.
what is a flawed proposal that clearly numerous
between the goods arriving at the load port
“There is no doubt that the Hague-Visby
countries are uncomfortable with, if not have
and their departure from the port of discharge.
Rules need updating, but they do not need to
entirely rejected the same, or take up the initiative
This could include stevedoring companies and
be replaced with a convention that attempts
itself if Uncitral/CMI do not proceed with some
cargo terminals, which could cause problems for
to be multi-modal without quite achieving this
degree of urgency”.
multi-purpose cargo terminals at ports because it
objective,” the group said.
The UN Convention on Contracts for
would be difficult for them to determine to what
“What the trading world needs is transparency,
International Carriage wholly or partly by Sea –
extent goods stored in the terminal were covered
certainty and predictability. Traders do not engage
known as the Rotterdam Rules – was intended to
by the rules.
in reading contract terms and should be guarded
bridge the gap between the Hague and Hague-
There is also the question of the rules’
against the risk of being caught by ‘fine print
Visby Rules on the one hand and the Hamburg
imbalance between shippers and carriers, the
modification’ Also insurers need a need a firm
Rules on the other “by removing the error in
group says. “Although the carrier enjoys the
basis for setting appropriate premiums and for a
navigation defence available to the maritime
privilege of a monetary limitation of liability for
smooth claims handling procedure.”
carrier under the Hague and Hague-Visby Rules
a breach of any of its obligations, the shipper
and by increasing the monetary limits of liability to
would incur an unlimited liability, [for example]
account for world inflation since the 1920s”, the
in the case of incorrect information given to the
Common sense decision
group explained in a submission to the EU.
carrier. Whilst it might be understandable that the
London’s Supreme Court ruled in favour of a
However, one controversial aspect of the new
maritime carrier would prefer to have a joint and
common sense decision in shipbuilding contract
convention is its expansion to cover not only
several liability comprising everyone acting as
disputes in November in the case of Rainy
the maritime segment by also pre-carriage and
shipper and consignee, it may be considered less
Sky SA and others v Kookmin Bank [2011]
post-carriage by other forms of transport, which
acceptable that a party having had nothing to do
UKSC 50.
the group says raises the possibility of conflict
with the contract of carriage as such should be
with other regulations applied to those forms
liable under the convention.”
At issue were questions relating to the construction of contractual provisions in a bond
The convention contains a definition of
guaranteeing the refund of instalments under
The group suggests that “it is unhelpful to
“documentary shipper” and to qualify as such
shipbuilding contracts. Paul Herring of Ince and Co
expand a unimodal transport convention to
is sufficient to agree to be named as shipper in
LLP acted for the successful buyers in the case.
cover other modes as well, since nowadays the
the transport document or electronic transport
The Supreme Court held that in cases where
important factor for customers is not exactly how
record, and “this might be particularly harmful for
there were two different interpretations of a
goods have been carried and which mode of
ex-works and FOB sellers who without realising
contractual provision, “the construction which is
transport has been used, but rather the desire to
the consequences may agree to be named as
consistent with business common sense is to be
get the goods in the right condition to the right
shippers in bills of lading”.
preferred”, Ince said in its online analysis.
of transport.
place at the right time”. The authors of the report include: José
94
With all the potential problems contained in
Terms of advance payment bonds issued by
the convention, the group says that it is possible
Kookmin Bank to the buyers, at the shipbuilder’s
theBaltic Winter 2011 www.thebaltic.com
Legally speaking request were considered. According to Ince,
In a recent presentation by North P&I Club
in favour of the owners, who had decided to
Paragraph 2 of the bonds entitled the buyers
claims manager Henry Woods: “the discovery
take the ship round the Cape as opposed
to repayment of pre-delivery instalments upon
of illegal narcotics on board a ship will in most
to transiting the Suez Canal as instructed by
rejection of the vessel, but did not refer expressly
jurisdictions trigger a criminal investigation. The
charterers Pacific Basin. The Triton Lark was
to repayment in the event of the insolvency
problem presented by Venezuela is that the
carrying a cargo of potash from Hamburg to
of the shipbuilder. This was, however, stated
possession of drugs on board a vessel is, of itself,
China. Conwartime clauses were included
in the shipbuilding contract to be an event
sufficient evidence to result in the confiscation of
in the charterparty. The arbitrators held that
requiring repayment to the buyers. Paragraph
the vessel and lengthy gaol sentences for the
the additional costs of going by the longer
3 of the bond then referred to “the pre-delivery
officers and crew.”
route, which amounted to close to $500,000 should be paid by Pacific Basin, which appealed
instalments under the Contract…” and went on to
Venezuela enacted the Organic Drugs Law
state that Kookmin Bank must “pay all such sums
just over a year ago, which, explained Woods,
due to you under the Contract”.
“appears to increase the evidential burden and
Hearing the appeal, Mr Justice Teare
The issue to be decided by the Supreme
potential penalties imposed on shipowners and
considered the issue of whether the Conwartime
Court was whether, on a true construction of
their crews. Under the ODL, a crew member will
clauses, which say that a vessel cannot be
paragraph 3 of the bonds, the buyers were
commit a crime if he is involved in the illicit traffic,
ordered to pass through an area where the ship
entitled to repayment under the bonds in such an
commerce, sale and distribution, concealment,
is likely to be exposed to war risk, applied. Pacific
insolvency situation.
carriage by any means, storage or brokerage of
Basin’s argument was that the arbitrators were
illegal narcotics.”
wrong to say that taking the longer routes did not
At first instance, Mr Justice Simon found
the decision.
fall under the heading of a deviation.
in favour of the buyers. The Court of Appeal
Seafarers convicted of an offence under the
reversed this decision. The Supreme Court has
new legislation face prison sentences of between
Mr Justice Teare has referred the matter
now allowed the buyers’ appeal and restored the
15 and 25 years, while judges and prosecutors
back to arbitration so that the parties can make
first instance judgment.
who are deemed not to have properly applied
further submissions.
According to Ince: “The decision of the Supreme Court in this case has a wide application,
the legislation could face sentences of four to eight years.
The case is an interesting one as there have been concerns among owners that obligations to
extending beyond the interpretation of refund
The new law, Woods said, means that vessels
complete a voyage “with utmost despatch” might
guarantees and advance payment bonds to the
employed in the commission of an offence can be
lead to ships being forced to transit the danger
construction of commercial agreements generally.
confiscated and judges can order the preventive
zone. BIMCO has been drafting new guidance
In his judgment, Lord Clarke sets out in detail the
seizure of a ship concealing or trafficking drugs
on the issue for incorporation into charterparties.
approach, which should be taken by the courts
for up to three months until a preliminary hearing,
when construing contractual provisions in the
at which the owner must “demonstrate a lack of
event that there is more than one meaning.
intention to commit an offence”.
In so doing, Lord Clarke has clarified the law in
According to Woods, this places the burden
this area, firmly concluding that “where a term of a
of proving lack of intention on the owner. “It
contract is open to more than one interpretation it
is highly unusual to compel a party to prove a
is generally appropriate to adopt the interpretation
negative – in this case a lack of intention. It is
which
not yet clear, what if any, evidence would be
is
most
consistent
with
business
common sense…” In the context of drafting refund guarantees
accepted by the court as sufficient to discharge this difficult concept of lack of intent.”
and bonds, the law firm said “the key point to
Woods suggested that factors that might
take away from the Supreme Court judgment
assist the owner in this respect could include the
is that clear and careful drafting is required and
fact that the vessel was on bareboat charter and
that the commercial intentions of the parties must
therefore the owner had insufficient control of
be taken into account. Otherwise, where the
its use, the vessel was time or voyage
meaning of a provision is ambiguous, a party may
chartered so the owner did not control the
seek to argue for an overly literal construction
ship’s itinerary and the existence of a third party
of the provision in question. In particular, the
management contract.
events entitling the buyers to a refund under the
Owners failing to enter an appearance or
shipbuilding contract must be clearly covered in
who are believed to have abandoned the vessel
the bond or guarantee.
will have it confiscated one year after the ship’s
“Finally and more generally, it is clear that
preventive seizure.
the court can and will consider the commercial purpose of a provision when being asked to interpret ambiguous contractual provisions.”
Piracy dilemma As shipowners continue to face the threat of piracy of the African coast, the issue of whether
Venezuela drugs law concerns
or not owners are justified in taking a longer
Venezuela’s tough anti-drugs legislation continues
route around the Cape of Good Hope to avoid
to alarm the maritime industry, with masters and
the problem has been tested in the English High
crews of vessels in risk of imprisonment even if
Court recently.
they had no knowledge of drug trafficking.
At issue was an arbitration tribunal decision
Ince and Co’s Paul Herring
theBaltic Winter 2011 www.thebaltic.com
95
Corporate viewpoint RAK Ports
RAK Ports – five niche facilities that service the Middle East sector Saqr Port
pontoon berth marina, the Barasti Sailing Club,
RAK Khor Port
Located 25 kilometres (km) north of Ras Al
catering for large luxury yachts, private leisure
RAK Khor Port is a unique city centre port
Khaimah City, this is the largest bulk commodity
vessels and visiting sailing yachts. It is the ideal
located at the entrance of the Creek in Ras Al
port in the Middle East, handling a range of
gateway to the fjords of the Musandam.
Khaimah City. The port estate is 323,858m2 ,
dry bulk materials. Aggregates and rock from
and provides a multifunctional facility handling
quarries, and cement from cement works
Al Jazeera Port
all types of cargo. Offering a range of modern
adjacent to the port, are exported to the major
This shipyard is the Emirate’s new “one-stop-
facilities and services, the port provides for
construction projects in the Gulf. The port
shop” for dry docking and ship repairing in the
local importers and exporters. Facilities are also
handled 27 million tonnes (t) of cargo in 2010,
UAE. The port also provides a complete range of
available for specialist companies undertaking
and is on course to handle 35,000,000t in 2011.
maritime and shipping services.
ship repairs and maintenance, together with
Currently Saqr Port has 12 berths with
The port covers a total area of over 450,000
general warehousing and temperature controlled
a draft of 12.2m, but there are plans to
square metres (m2), including the new 50,000m2
storage. A new passenger/cruise terminal is also
construct additional berths with a 15.5m draft to
dry dock and ship lifting system area. This new
operational, handling small cruise liners servicing
accommodate cape-size vessels. The port has
facility has 12 dry berths – eight of which are
the increasing tourist activities in Ras Al Khaimah.
ISO9001 and ISPS certification.
67.5m long x 30m wide and four berths that are
The port has a total covered warehouse area
77.5m long x 30m wide. The facility’s lifting dock
of 28,000m2, comprising five units at 1,512m2
Al Jeer Port
has a synchronized lifting capacity of 1,100t and
each, nine units at 1,944m2 each, and two cold
Located on the border with the Sultanate of
can accommodate vessels up to 55m in length
store units at 1,512m2 each. There is also an
Oman, Al Jeer has a 270-metre quay wall with
x 18m wide. Adjacent are nine wet berths, with
open storage area of 60,000m2 that is available
a 6m draft, 30,144m2 of warehouses, including
a total length of 1,100m. The port has an open
for short or long term contracts.
hard frozen and temperature controlled storage
storage area of 74,000m2 and warehouses
units. Al Jeer Port has a newly opened 266
totalling 6,200m2.
96
theBaltic Winter 2011 www.thebaltic.com
Corporate viewpoint RAK Ports RAK Maritime City Free Zone Occupying an area of 8,000,000m2, this new maritime industrial park boasts a dedicated harbour covering 820,000m2 of water, and almost 5km of new quay wall, with private/ exclusive use jetties. The harbour entrance approach depth is 9m and there is a depth of 7m alongside at all the new berths. Plot sizes range from 25,000m2 to over 1 million m2. Plots are available with an exclusive jetty of 100 linear metres, which require a minimum leased area of 40,000m2 . RAKMC Free Zone is able to incorporate companies either as FZE and FZC entities, and is issuing industrial, commercial and general trading licences, along with work permits and UAE residence visas. RAK Ports, and the services offered, is rapidly driving the economic development of Ras Al Khaimah, which in turn is reinforcing the Emirate’s global business footprint. For more information contact: Group general manager RAK Ports E-mail: gm@rakports.ae www.rakports.ae Saqr Port Al Jeer Port Al Jazeera Port RAK Khor Port RAK Maritime City
theBaltic Winter 2011 www.thebaltic.com
97
Commercial profiles
Solace Global Maritime Ltd S
olace Global Maritime is a worldwide
global footprint and wide-ranging industrial and
piracy is real and fast-moving and that its impact
provider of bespoke security services for the
operational insight, our services cover every
on shipping is acute. We allow your vessels
maritime industry. These services are the
facet of maritime security, from armed protection
freedom
resultant product of experience from the UK
and fleet management, to crew training
threatened waters, saving you time and providing
Military and Special Forces combined with an
packages and vessel recovery. All of our working
the freedom that you demand.
intimate and sympathetic understanding of the
practices are in line with current industry
requirements of today’s commercial user. We
guidelines, including IMO Best Management
believe in the consistent delivery of excellence
Practice 4. We also hold the ISO9001
and an unrivalled knowledge of our client’s
accreditation and are registered with the BMF,
requirements. We set the standard for security in
the ICoC, SAMI and BAPSC.
the modern marine environment.
passage
through
otherwise
Solace Global Maritime provides guidance
Solace Global Maritime conducts over 1200
and training for your crews while our teams are
transits annually through the high risk area and
on board your vessels, but we also conduct staff
currently provides a service for between 70-90
training exercises. These exercises are based on
vessels. Our UK-based Operations Team delivers
previous actual maritime security incidents and
round-the-clock incident management, maritime
will help your personnel plan for a security
intelligence and vessel tracking services. We
incident. They will also help you to develop your
deliver exclusively to the maritime industry,
own security guidelines, which can be used in
meaning that you will receive a focused, pertinent
concert with the security teams that we provide.
product – not a service that has been adapted
of
At Solace Global Maritime our ethos is the delivery of excellence in all that we do. This
Solace Global Maritime Ltd. (UK)
We offer a range of consultancy and security
is evident in the personnel we provide, the
Tel: +44 (0) 1202 308810 UK office
services for all types of vessel and user, from
equipment we use and the on-going support
Email: info@solaceglobalmaritime.com
commercial fleets to private yachts. With a
that we offer. We understand that the threat of
Web: www.solaceglobalmaritime.com
from elsewhere in the security sector.
Going an extra mile V
ega ship management DMCco (VSM),
monitoring,
and
the cargo during the voyage to ensure minimum
incorporated in Dubai in July 2008, is an
claims, monitoring ship’s SIRE/CDI approvals,
voyage/transit loss. At discharge ports, its
and so on.
superintendents work in conjunction with the
independent and ISO-9000 certified company that is involved in various commercial shipping
In
performance
operations
calculations
management
work,
the
activities. The company is managed and run
company strives towards improving client
by shipping professionals with over 100 years
returns with savings in time and cost.
ship’s crew for efficient discharge operations ensuring minimum time on board. It offers a cargo tank cleaning supervision
It offers a port captaincy service in the
service in the Arabian Gulf, Indian Sub-continent
70 years of accumulated experience of working
Arabian Gulf and Indian subcontinent area. The
and the Far East for chemical tankers, which
ashore in the shipping industry.
scope of work involves attending the vessel at
require complex tank cleaning routines.
of accumulated sea going experience and over
VSM’s employees are its core strength,
the load/discharge port and ensuring that the
VSM’s superintendents and managers are
working in a safe and environmentally friendly
vessel utilises its resources to maximum effect
extremely experienced and are always up to
environment. The company is committed to
to load/discharge her cargo in an efficient and
date with the relevant rules, regulations and
going that extra mile in order to exceed its
smooth manner.
requirements of operating ships commercially,
It also offers gassing up and cooling down of
customer’s expectations. Strategically located in Dubai, VSM works
gas tankers. It is well placed to offer this service
with the Far East as well as the West during its
in the Arabian Gulf and the Indian sub-continent
working hours.
area for vessels that need expertise in gassing
It currently provides a wide range of services.
Its
operation
management/post-
including complex operations of oil, chemical and gas tankers.
up and cooling down after dry-docking, repairs, or during gas-change operations.
fixture operations service involves the day-to-
Its loss control of cargo service in the area
day commercial running of ships, such as
(Arabian Gulf and the Indian sub-continent)
Tel: +971-4-3516969
loading, discharging, agency, bunkers, charter-
involves supervising the loading and discharge
Mob: +971-50-6510094
party administration, demurrage/dispatch, cargo
operations of cargo and, if required, it will place
E-Mail: ranjan.mookherjee@vegaship.ae
related claims, off-hires, daily noon position
one of its superintendents on board to monitor
E-Mail: ops@vegaship.ae
98
theBaltic Winter 2011 www.thebaltic.com
Commercial profiles
DP World – putting customers first D
P World operates in more than 60 termi-
been voted “Best Seaport in the Middle East” for
nals across six continents*, with container
17 consecutive years.
handling generating around 80% of its revenue.
In 2010, DP World handled nearly 50 million
In addition, the company currently has 10 new
TEU (20-foot equivalent container units) across
developments and major expansions underway
its portfolio from the Americas to Asia. With a
in 10 countries.
pipeline of expansion and development projects
The company aims to enhance customers’
in key growth markets, including India, China
supply chain efficiency by effectively managing
and the Middle East, capacity is expected to rise
container, bulk and other terminal cargo.
to around 95 million TEU by 2020, in line with
Its dedicated, experienced and professional
market demand.
www.dpworld.com
team of nearly 30,000 people serves customers in some of the most dynamic economies in
* As of September 2011.
the world.
Includes non-container terminals
The company constantly invests in terminal infrastructure, facilities and people, working closely with customers and business partners to provide quality services today and tomorrow, when and where customers need them. In taking this customer-centric approach, DP World is building on the established relationships and superior level of service demonstrated at its flagship Jebel Ali facility in Dubai, which has
IMS Marine Surveyors & Analytical Laboratories Ltd. Vancouver, BC IMS was established in January 1992 and has
is a FOSFA Superintendent and CFIA certified
which facilitate International Trading according
grown to become one of Western Canada’s
sampler for Phytosanitary Certification, and is
to governing standards and legal requirements.
largest independent marine surveying and cargo
also the Flag State Ship Inspector representing
IMS Laboratory is a FOSFA Analyst L1 (the only
inspection organisations. IMS has earned a
Bahamas, Barbados, Cyprus and Panama, and
one in Canada) and a COPA referee Laboratory.
reputation as being unbiased, objective and
Class Surveyor for CR Taiwan, OMCS Panama
IMS’s achievements in research and method
professional. Based in Vancouver, Canada’s
& Qualitas Panama. IMS is an IICL Container
development have been recognised by USA
largest port, IMS offers a comprehensive range
Inspector and the only certified ultrasonic hatch
and Canadian authorities and producers in
of professional consulting, superintendence,
cover tightness testing firm on the West Coast.
chemistry and oil testing. The application for
inspection,
The company is widely used by most major P&I
direct testing for sulphur and phosphorus by
and H&M Clubs for their various surveys.
ICP-OES has quickly become one of the most
testing
and
marine
surveying
services across Canada, USA and worldwide for International Traders, Brokers, Producers,
In today’s highly competitive and challenging
widely-used method in North America for the
Buyers, Charterers, Owners, Insurances and
shipping industry, losses can materialise in many
quality of vegetable oil, beef tallow and biodiesel
Legal Entities.
ways. Lost time, damage, leaking hatch covers,
testing, and is available online at: http://las.
IMS offers a full-service surveying and
cargo contamination, unprofessionally performed
perkinelmer.ca/Content/applicationnotes/far_
analytical laboratory, providing professional
inspection/surveying work, unfamiliarity with local
sulphurandphosphorusbiodiesel.pdf
testing, certification and consultation in the
conditions etc can be major cost factors. IMS
grain, oilseed, meals, fats & oils, biodiesel,
could reduce your exposure to costs and claims
chemicals, marine, environmental and food-
by being your on-site representative, providing
related fields. The company has developed
experience, prompt, factual, and competitively-
For more info visit: www.ims-van.com
sophisticated computer software for different
priced marine surveys, cargo inspections and
Captain Jostein Hoddevik, President
kinds of surveys and is fully compliant with
testing.
Dr. Tatiana Hoddevik, Head of Laboratory
relevant international standards. IMS became
IMS
offers
a
first-class,
reliable
and
Tel: (1604)298-9968 (24 hrs.)
ISO certified in 2001 and is currently certified
rapid analytical service based on modern
Fax: (1604)298-4862
under the ISO 9001:2008 standards by BSI. IMS
instrumentation and cutting-edge techniques,
E-mail: admin@ims-van.com
theBaltic Winter 2011 www.thebaltic.com
99
Commercial profiles
FX4Cash – so good it sells itself ord of mouth is often hailed as one of the
W
as the word has spread around the industry,
currency payment as if it were a $10 million FX
most powerful methods of marketing. It’s
numerous other shipping companies from Europe,
trade – in other words instantly traded at live
hardly surprising that we would rather take advice
the US and Asia are exploiting FX4Cash to handle
market rates.
from colleagues or friends, than the company
high volumes of cross-currency payments, which
By executing FX payments at live market
that is enthusiastically promoting its products or
often need to be made in distinctly exotic places
rates, costs can be driven down as less spread
services to us.
and currencies.
needs to be built in to the exchange rates. This
The best products and services should sell
Being a fully automated solution, transactions
is because there is no need to cover FX volatility
themselves, because customers will voluntarily
are processed faster, with an extremely high level
during the delay between when a bank receives
recommend their good experiences to others.
of accuracy (as there is no manual handling), and
the payment instruction, and when it can execute
This, say Deutsche Bank, is what it is seeing
typically funds reach the beneficiaries faster than
the FX conversion.
happen with its FX4Cash solution in a number
ever before – this is a very welcome benefit in a
You could say that FX4Cash is to pre-existing
of industry sectors, and in particular in the
sector where speedy delivery of funds can be
cross-currency solutions, what the iPhone was to
shipping industry.
critically important.
the earlier generations of mobile phones – not a
FX4Cash, put very simply, is Deutsche Bank’s
Being accessible via electronic (web based)
new idea altogether, but an existing idea that is
start of the art, highly flexible cross-currency
channels, SWIFT or secure file transfer, means
taken to a far higher level of sophistication and
payments platform.
most organisations can access FX4Cash with
client experience.
Launched in 2008, the platform enables
minimal changes to existing processes.
When marketing budgets are tighter than ever, it must be great bonus to have a solution
clients to process international (or domestic)
In developing FX4Cash, one of the biggest
cross-currency payments (and receipts) to or
challenges Deutsche Bank faced was to build a
from almost anywhere in the world, with more
real time linkage between its payment processing
Find out why so many of the world’s leading
than 125 payment currencies reaching almost
architecture in its Transaction Bank and its FX
organisations are already using FX4Cash. Contact
180 countries.
trading platforms in Global Markets.
Deutsche Bank at fx4cashteam@db.com
One of the first companies to adopt the
By overcoming that challenge, the result is
platform was a UK shipping company, and now,
a payments platform that can treat a $50 cross-
that sells itself!
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
our priority.
We can serve clients in more than 100 countries. We have clear and focused corporate
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.
100
theBaltic Winter 2011 www.thebaltic.com
Commercial profiles
KTK Tugs W
ith a fleet of powerful tugs, The Curacao
most effective and professional service.
kinds of ships manoeuvring in difficult conditions.
Towage Company provides superior tow-
As experts in the towage & salvage field,
They are all equipped with state-of-the art
age & salvage services not only in the bus-
our employees are involved in every stage
fire fighting, salvage and telecommunications
tling Curacao harbour, but also throughout the
of client service, from the towage & salvage
equipment. We pride ourselves on the proven
Caribbean, Central America and the northern
request implementation to completion, offering
raw, pure strength of our tugs, the engines and
coastal regions of South America.
continual functional and technical support.
the machinery we have used effectively since
Our services include: ocean towage, harbour
They have degrees from Dutch nautical schools
1985.
and coastal services, barge and dredger
and are constantly brought up-to-date on the
We have the expertise to turn strength into
transportation, fire fighting assistance, port
latest technological developments. Our close
the power to tow thousands of vessels a year
and terminal towage, crew management and
relationship with the Dutch Marine Division
and have the power to provide a range of
training, and technical maintenance, all based on
makes its expertise, support and guidance
professional, reliable and efficient services.
the Lloyd’s Register Quality Standards.
readily available.
Exceptional
functioning
and
effectively
Our mission statement is “Through expertise,
Our extensive skills encompass all aspects of
directing team members with Nautical, Technical
strength becomes power” and the our vision
implementation and operation, including business
and Management skills, coupled with extensive
is to position itself as a strong and reliable
requirements definition and development of
maritime knowledge make the Curacao Towage
towage company, serving both the domestic
functional specifications for client approval. The
Company strong and reliable.
and international sectors.
Curacao Towage Company is always available
Our mission is to exceed the expectations of every client by offering outstanding customer
online for handling client contact. We possess operational and technical
greater
experience that makes us strong and reliable.
Pletterijweg z/n, Willemstad, Curaçao,
value, thus optimising system functionality
Our powerful tugboats stand ready 24 hours a
Tel: (+599(9) 461-1055
and improving operational efficiency. This
day, able to rush out under any circumstances.
Fax: (+599(9) 461-2055
expertise combined with hands-on experienced
The ASD tugs that we possess can pull at a 360o
E-mail: s.reenis@ktktugs.com
employees, ensures that our clients receive the
angle, making them exceptional guides for all
Website: www.ktktugs.com
service,
increased
flexibility,
and
Trident Special Risks Versicherungsmakler GmbH – the marine kidnap and ransom insurance specialist
T
oday’s world of political and economic
privately
highly
such risks should have access to a network of
instability has unfortunately increased the
specialised in Marine Kidnap and Ransom
the best service providers, such as professional
level of risk of kidnap and hijack for ransom,
insurance and very well positioned to provide our
crisis management advisors, legal advisors,
especially for the maritime industry. The threat is
ever growing maritime client base access to the
media response advisors and maritime security
undoubtedly real and the losses, be it financial,
constantly changing international kidnap and
companies, just to name a few, should the need
personal or reputational, are greater than ever.
ransom insurance market.
arise. Because of this, we are constantly in
owned
insurance
broker,
contact with certain service providers that we feel
2011 has been a record year for pirate
We strongly believe that, next to ensuring
hijackings, with more than 30 hijacked vessels
robust preparation and preventative measures,
already in 2011 with ransom payments averaging
putting the right Marine Kidnap and Ransom
between US$5-US$5.5 million. Despite an
(and/or Marine Loss of Hire for Piracy) cover in
estimated US$1.3-US$2 billion being poured
place is essential in safeguarding extremely
annually into a complex naval counter-piracy
high-value
operation, pirate attacks are still at an all-time
Nevertheless, buying such a highly specialised
high. The Indian Ocean is plagued with piracy,
product has been and always will be, an
this phenomena is also spreading to new
extremely delicate matter for everyone involved.
Trident Special Risks
territories in the Gulf of Guinea. Armed security
Being long-standing Industrial, Maritime and
Versicherungsmakler GmbH
on board the vessels has, on the one hand,
Kidnap and Ransom insurance professionals, it
Ochsenwerder Landscheideweg 12,
proven to be a deterrent, on the other hand
is our strong belief that such matters should
21037 Hamburg
though, history does show that pirates adapt to
therefore only be handled by truly independent
Office: +49 40 30 89 30 29
changing situations.
and dedicated specialists, who operate in a
Mobile: +49 176 127 077 71
highly confidential and sensitive manner, which
Skype: leo.kissel
is also in-tune with the clients needs.
E-mail: leo.kissel@trident-sr.com
Based in the vibrant maritime city of Hamburg, Germany, we, at Trident Special Risks, are proud to be an independent and
human
and
shipping
assets.
We also strongly believe that anyone facing
theBaltic Winter 2011 www.thebaltic.com
provide the best possible solution in their field. Let our expertise be your peace of mind.
TRIDENT SPECIAL RISKS
www.trident-sr.com
101
Commercial profiles
MV “Lone” performs SAL’s heaviest-ever lift
O
n its maiden voyage, the company’s latest
of 1,719 tonnes was set ashore in just 2.5 hours.
which means it meets the highest environmental
new building MV Lone performed SAL’s
The speed and performance of the loading and
standards. It is also ISO14001 and OHSAS
heaviest-ever lift. With its lifting capacity of 2 x
discharging operation resulted from a successful
18001 HSE certified. The heavy lifter measures
1,000 tonnes SWL the vessel loaded eight
interplay and extensive preplanning between the
160.5 metres in length and 27.5 metres in width,
reactors weighing up to 1,719 tonnes and
joint team of SAL and Mammoet, the highly
and has a loading capacity of 11,000 tonnes and
measuring 45 x 8 x 8 metres.
skilled and experienced crew, and the state-of-
40,000 cubic metres.
As part of the RPLC Deep Conversion Project
the-art lifting equipment on board. The human
SAL ranks among the world’s leading heavy
Phase II in Venezuela these massive reactors
expertise of the SAL crew was accompanied by
lift shipping companies. From its head office in
were manufactured in Japan. They are destined
the necessary infrastructure on board the Lone:
North Germany, SAL operates an international
for the PDVSA Puerto La Cruz refinery in
a lifting arrangement of 40 tonnes and shackles
network of agencies and maintains its own
Venezuela. The project was awarded to SAL
weighing about 4 tonnes – equaling the weight
offices worldwide. The company has a total of
by the Dutch heavy lift specialist Mammoet
of two passenger cars. With this job, the vessel
570 employees across the world. It operates a
Logistics BV.
almost fully exploited its unrivalled lifting capacity
fleet of 16 heavy lift ships. The vessels’
On its voyage, the MV Lone first called at the
only weeks after being introduced into the market.
management is fully handled in-house. SAL’s
Japanese port of Higashi-Harima where two
Together with its sister vessel, MV Svenja, the
internal engineering department deals with all
reactors were loaded, it then continued on to
Lone is one of the two largest heavy-lift vessels
technical load-related matters, while developing
Muroran to take a further six reactors on board.
in the world. It has a lifting capacity of 2,000
innovative transportation solutions for individual
From Muroran the vessel sailed through the
tonnes, a speed of 20 knots and a DP2 system.
customer needs. With effect of 30 June 2011,
Panama Canal directly on to the port of
With these features, the Lone has all the
the K-Line Group acquired another 50% of the
Chaguaramas in Trinidad where the reactors are
necessary elements for undertaking highly
SAL Group and with that became the sole
temporarily stored before being carried to their
complex projects for the oil and gas industry as
shareholder of the company.
final destination of Puerto La Cruz in Venezuela.
well as for the offshore sector.
After careful preparation, the reactors were
Apart from its high performance, the Lone
discharged in record time: the heaviest reactor
also possesses an Environmental Passport,
www.sal-heavylift.com
Taking a hands-on approach S
ince 1979, West Atlantic Marine Limited has
We are also proud to have on our staff
Please visit our website www.wamcoltd.net or
provided the Bahamas and International
qualified surveyors recognised by the Society
www.westatlnaticmarine.net.
Insurance and Marine Industry with quality
of Accredited Marine Surveyors (SAMS), the
We look forward to serving you and
marine surveying and consultancy services. We
National Association of marine Surveyors
your clients.
are a full-service Marine Survey and Consultancy
(NAMS), and the International Institute of Marine
company that provides a very “hands on” station
Surveyors (IIMS).
that is somewhat different from the norm.
Our diverse marine services include – but
For the past 22 years, we have represented
are not limited to – marine surveying of a variety
the flag state requirements as inspectors
of marine craft, ranging from small private
and surveyors (non-exclusive agents) for
pleasure
ship registry within the Bahamas (Bahamas
ships of all sizes and types; cargo damages
Maritime Authority).
and structural damages to marinas, harbours
West Atlantic Marine is poised and ready
vessels
through
to
commercial
and ports.
to provide all marine interests (underwriters
Rescue, marine emergency, salvage and
and owners) with efficient and quality services
towage services, and loss adjusting are also
throughout the Bahamas, Turks and Caicos
available through our group of companies.
Islands and throughout the Caribbean. Our team comprises quality, internationally
Our aim is to provide our clients with fast, efficient and economical results, while
recognised general marine and engineering
maintaining
surveyors who possess maritime experience
service. We are proud to be a part of our
a
high
quality
product
and
and expertise in excess of 100 years combined.
clients’ solutions.
102
theBaltic Winter 2011 www.thebaltic.com
Commercial profiles
Worldwide Project Consortium The leading brand for project professionals
T
he Worldwide Project Consortium Ltd
• Warehousing, storage and distribution
to shippers of heavy and outsized cargo is also
(WWPC) is the leading dedicated network
• Cargo computer documentation, cargo
represented through Heavy Cargo News, an
for project cargo freight forwarders. Founded in 1998, WWPC deliveres a global marketing and network platform, based on a franchise agreement. Through annual membership conferences
tracking and EDI services hazardous cargo • Chartering by sea and air • Planning and consulting services.
and exhibiting at international trade fairs, WWPC
WWPC offices gain admission on their
has rapidly gained a very solid reputation among
knowledge and experience. Each formally
those who are actively involved in heavy and
undertakes to operate under a strict code
outsized cargo movements.
of conduct and only the most dedicated,
Our experts from around the world provide
experienced and viable experts in project
a full range of project planning and forwarding
forwarding, with a proven track record, will be
support services:
admitted to the WWPC.
• Project and logistic freight management
online publication and magazine.
• Supervision of heavy lifts, outsized and
Our companies have gained a steadfast
• International project forwarding by sea and air
reputation in international project forwarding and
Wolfgang Karau
• Door-to-door multimodal freight management
logistics management services around the world.
Director WWPC Ltd
• Inland transportation
The network is operated by transport-qualified
• Cargo consolidation
directors, assisted by a members’ elected board
wolfgang.karau@wwpc.eu.com
• Customs clearances
of advisors. WWPC is a member of the Baltic
www.wwpc.eu.com
• Customs tariff and by-law advice and
Exchange in London, United Kingdom.
Heavy Cargo News
consulting
The WWPC and its international marketing
Tel: +34 (0) 690 708 964
www.heavycargonews.com
Sea Marshals Ltd S
ea Marshals Ltd is a UK limited company
disembarking men and weapons in Muscat
Qualifications of guards include STCW95,
that provide security solutions to merchant
and Richards Bay, S.A. Sea Marshals Ltd are
SSO, Firearms certs, Anti-piracy course, first aid
vessels travelling through high risk areas in the
fully licensed members of SAMI - Security
and criminal records checked.
Indian Ocean, Arabian Sea, Red Sea and the
Association for the Maritime Industry.
Gulf of Aden.
Sea Marshals Ltd also has its own fleet of 5
Sea Marshals Ltd can supply both armed
vessels that can be provided for vessel escort
Fully licensed in Djibouti for services and
and unarmed security guards facilities and all
services. These vessels can hold between 20
weapons and also licensed in Galle & Sri Lanka
men are European nationals with a minimum of
and 40 men at one time. The vessels have a
Sea Marshals Ltd have facilities for embarking/
3 years military experience.
range of up to 5000NMs. Sea Marshals Ltd has a dedicated 24 hour operations centre located in the UK.
www.seamarshals.com/
theBaltic Winter 2011 www.thebaltic.com
103
Events
What’s on where A round-up of conferences, exhibitions and events in the shipping world January 16-17 Singapore February 7-8 London April 23-24 New York
February 21-22 London LNG Shipping Current and future opportunities in a market which many believe holds the key to emissions control.
Freight Derivatives & Shipping Risk Management
Maritimecustserv@informa.com
A course providing an introduction or shipping risk, freight rate, bunker and ship prices risk, freight rate options and clearing and settlement of shipping derivatives contracts.
March 6-7 London
www.balticexchange.com/training
Annual gathering for owners covering commercial and operational issues.
January 18-19 Singapore February 9-10 London New York 25-26 April
www.navigateevents.com
4th Chemical and Product Tankers
March 19-21 Stamford
Advanced Freight Modelling & Trading Spot freight rate dynamics, spot and time charter markets, modelling freight volatility and pricing options in freight markets are some of the topics. www.balticexchange.com/training
CMA’s Shipping 2012 This is the Connecticut Maritime Association’s major international conference. wwwshipping2012.com
March 27-29 Copenhagen
January 30-31
Greenship Technology conference
Middle East Liner Shipping Conference
Challenges for sustainable shipping.
What does the future hold for Middle East liner services? Maritimecustserve@informa.com
Maritimecustserve@informa.com
May 30-31 Jakarta
Feburary 7-8 Copenhagen
10th Asean Ports and Shipping Conference
Ro-ro Shipping Conference
The biggest annual ports, shipping and logistics exhibition in the Asean region.
Optimising environmental performance and financial viability. Maritimecustserve@informa.com
Enquiries@transportevents.com
June 4-8 Athens Posidonia 2012 The world’s largest maritime event will be taking place at the Matropolitan Expo Centre this year. www.posidoniaevents.com
104
theBaltic Winter 2011 www.thebaltic.com
Posidonia 4-8 June 2012, Metropolitan Expo, Athens Greece
A unique blend of business and social interactions at the heart of Shipping Be part of the great Posidonia experience at a state of the art new venue
The International Shipping Exhibition
Organisers: Posidonia Exhibitions SA, e-mail: posidonia@posidonia-events.com
www.posidonia-events.com
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