the Baltic
the
March 2010
Ship finance under pressure 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
March 2010
the
BALTIC The Baltic is the official magazine of the Baltic Exchange Tel: +44 (0) 20 7623 5501 E-mail: enquiries@balticexchange.com Website: www.balticexchange.com
Publisher
W H Robinson
editor
Lucy Budd The Baltic is published for the Baltic Exchange by Maritime Media (a division of Roxby 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
Tel: +44 (0) 20 7386 6120 E-mail: lucy.budd@mar-media.com
SALES manager
David Scott E-mail: david.scott@mar-media.com
DESIGNER
Keith Clark ISSN 0967-0394 This publication is printed on PEFC certified paper. PEFC Council is an independent, non-profit, non-governmental organisation which promotes sustainable forest management through independent third party forest certification.
The Baltic is published on behalf of the Baltic Exchange
the Baltic
and is supplied to members as part of their annual
the
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
MARCH 2010
Ship finance under pressure
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
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
MARCH 2010
deal with them. The responsibility rests solely with the publisher.
theBaltic March 2010 www.thebaltic.com
1
Contents Chairman’s statement 7 Mark Jackson Industry News 7
9 People, places, plcs Interview 13 Dorian Benson and Andrew Jamieson FFA
13
16 Market on the mend 18 Freight options Baltic briefing 22 A helping hand 23 Poppy appeal raises over £5,000
17
24 Greek wines 25 Baltic Air Charter Association 26 Arbitrary success 28 Sporting contacts 24
Logbook 30 The tanker race Baltic Comment 31 Michael Grey
31
State of the market 33 Tankers 35 S&P 38 Dry bulk
37
40 BIMCO
theBaltic March 2010 www.thebaltic.com
3
Contents 42 Heavylift 49 Towage & salvage 52 Shipmanagement, crewing and education 49
Oxford Analytica 60 Anti-piracy results are mixed Green Technology 63 Making a difference
63
IT 75 Marine software Ship Finance 84 Credit crunch hits home
85
87 Where’s the money? Geographical focus 88 Latin America 91 Middle East
89
Cargo focus 93 Iron ore Insurance 96 Insurance parlance
93
99 Insurance ITIC Legal news 101 Legally speaking 103 Commercial profiles 112 Events
101
theBaltic March 2010 www.thebaltic.com
5
Reducing risk across the world’s freight routes
With over 85% of cleared dry FFA transactions and around 25% of cleared wet freight transactions, LCH.Clearnet is the world’s leading clearing house for freight. We’re also the only one with OTC default experience. Our OTC Freight service covers the most actively traded routes – twelve dry and eight wet – and is open to all brokers who are members of the Forward Freight Agreement Brokers Association. We also clear fertilizers, iron ore and emissions. Operators in all these marketplaces – the chartering companies, ship owners and trading companies – are increasingly keen to manage their risk through cleared trading opportunities. The stability and security of the LCH.Clearnet default fund makes clearing through us an attractive proposition. Find out more at www.lchclearnet.com
COMMODITIES | EQUITY & FINANCIAL DERIVATIVES | ENERGY | FIXED INCOME | FREIGHT | SECURITIES | INTEREST RATE SWAPS
Chairman’s statement Mark Jackson
Chairman’s statement 2
Maritime
from a shipowner. Will the owner take a single
Arbitrators Association (LMAA) cele-
voyage on delivery of the newbuild on the
brating its 50th anniversary and the
basis of positive sentiment from the forward
Baltic Exchange is delighted to be lend-
market? Will the noises from the forward market
ing the LMAA its full support at its anniversary
exert pressure on the owner to take a longer
conference and dinner in London this March.
term contract? Is there pressure from auditors,
The histories of the Baltic and the arbitrators
financial institutions and regulators who are using
are inextricably intertwined. The LMAA first
the forward curve to assess the risk or future
came into existence in 1960 at a “meeting of
PnL? This is particularly relevant to arbitrators
the Arbitrators on the Baltic Exchange Approved
and expert witnesses who are being asked to
List”, but its roots stretch back to the earliest
take a view on the physical market. Lawyers
days of the Baltic Exchange and its coffee house
hiring expert witnesses must ensure that their
origins. Rather than calling in the lawyers, dis-
experts understand the interconnection between
putes between shipowners and charterers had
the physical and forward markets in the dry bulk
often been settled informally by Baltic Exchange
and tanker sectors. Indeed, as members of the
brokers on the trading floor and failing that over
Baltic Exchange Panel of Experts recently heard
a good lunch.
at a meeting of the group in February, they are
010
sees
the
London
not immune to costly litigation for any testimony
Today of course, the system of arbitration
or advice they provide.
has grown-up, developed and is a cornerstone
I would also remind readers that the Baltic
of shipowners and charterers to resolve their
and LMAA have established a mediation service
disputes outside of the courts and to refer to
which offers companies an alternative means
Tradewinds
of the international shipping business. The ability
arbitrators by whose decision they agree to be bound, is fundamental to the smooth functioning of the international trading system. London’s arbitrators remain the shipping world’s most
Mark Jackson
of resolving disputes. Governed by the LMAA/ Baltic Exchange Mediation Terms (2009), the mediations may be conducted either physically in one location or in by video link or correspondence between the parties and the mediator. The great
popular by a considerable distance, with 3567 This is a relatively rare occurrence and means
advantage of using mediation is the way it can
The UK is the leading centre for maritime
that English Law is not evolving as quickly as it
be used to bring about a resolution by involving
dispute resolution through arbitration, with
should. If English Law is to avoid being stuck in a
issues which strictly speaking have no legal
English Law underpinning this. However, for the
rut and remain relevant to shipping practitioners,
relation to the dispute. The wider business
system to continue to be relevant to the shipping
then the a way must be found for arbitration
relationship often offers the opportunity to solve
market, English Law must continue to evolve.
cases to support the evolution of the law.
a narrow, specific problem. Mediation is of
appointments made in 2008.
With most shipping related disputes settled
The issues facing arbitrators have changed
course non-binding and inexpensive, so should
through arbitration rather than through the
over the past 50 years, not least in dealing with
often be worth trying before moving to arbitration
courts, this is potentially a problem. Under the
factors arising from the freight derivatives market,
or litigation. The Baltic website contains details
terms of the 1996 Arbitration Act, the findings
a market which has developed hugely in the past
of a mediation clause which we hope will
of arbitration tribunals do not develop the law in
decade. The Baltic Exchange’s forward curve,
be increasingly included in charterparties. See
the same way that the decisions of the courts
an essential daily service providing FFA brokers’
www.balticexchange.com/mediation for further
do. Arbitration proceedings and awards are
view of the prices available for forward trading, is
details. These are just some of the challenges
deemed confidential and are seldom published.
increasingly being used by the shipping market
which I believe that London arbitrators will need
The only way for findings from arbitration cases
to gauge physical market perception. The
to face in the coming years, and ones which they
to make their way into law is for the arbitration to
forward market’s view represents a legitimate
are uniquely placed to face. I wish the LMAA
go to appeal before the courts on a point of law.
view of the behaviour which could be expected
every future success.
theBaltic March 2010 www.thebaltic.com
7
Commodities and Energy
Web-based service, updated monthly with new features, instruments & commodities
NEW
On-demand price discovery Accurate and independent pricing Enhanced productivity & transparency
SuperDerivatives now offers FFAs and options on FFAs on a wide range of vessel size and ocean routes. To find out more about our range of solutions, go to www.sdgm.com or contact sales@sdgm.com.
The Derivatives Benchmark
People, places, plcs
Industry news Copenhagen Accord
shipping is a uniquely international industry that
the reduction of CO2 emissions by the global
The shipping industry has responded with
can only work efficiently when operating within
shipping sector as a whole.”
disappointment to the most recent rounds
a framework of uniform global regulation that
A similar response came from the UK
of climate change talks in Copenhagen,
applies equally to all ships regardless of flag.
Chamber of Shipping, which said that the UK
which failed to address the role of shipping
‘Common But Differentiated Responsibility’, at
shipping industry, which “has led the way in
in combating climate change. One point in
least at ship or company level, will “simply not
terms of practical solutions with its advocacy
particular which may cause difficulties in future
work” according to the Chamber. It argues
of a cap-and-trade system as the only way to
was that COP15 did not give IMO the mandate
that shipping companies would simply migrate
guarantee reductions”, remains firmly committed
to oversee the industry’s response to the need
their fleets to developing countries. Around
to
to cut greenhouse gas emissions., potentially
65% of the world fleet is already registered with
“Although shipping is the most carbon-efficient
leaving the door open to unilateral regulation
“Non-Annex I” nations under the existing Kyoto
mode of transport, with about 500 times less
from outside the industry.
Protocol. The shipping industry is still firmly
carbon impact than air freight per tonne mile,
IMO secretary-general Efthimios Mitropoulos
committed, the Chamber says, to helping IMO
it is such a large industry – carrying about 80%
said: ‘Like many others who have made
develop a global solution for shipping on CO2 at
of world trade – that its emissions are close to
comments on the outcome of COP 15, I have
the next meeting of the IMO Marine Environment
3% of the global total,” said Mark Brownrigg,
viewed the end result of the Copenhagen
Protection Committee in March 2010. “But,”
director-general of the Chamber of Shipping.
Conference with mixed feelings: with concern
it warned, “it is vital for all governments to
“We had hoped that the UNFCCC would at least
that the target initially pursued, following the
understand that, in the absence of a global
empower the International Maritime Organization
2007 Bali Conference, of a legally binding
package agreed by IMO, there is a serious
to set some clear targets and agree a process by
instrument, was not achieved; with measured
risk that some countries will develop unilateral
which the Kyoto Protocol principle of ‘Common
satisfaction that, through the Accord tabled
measures to regulate at national or regional
But Differentiated Responsibility’ could be
at the end of the deliberations, a step in the
level the CO2 emissions of ships trading
reconciled with the important need for global
right direction was taken enabling progress to
internationally. Such unilateral measures would
rules on CO2 reductions for the carriage of
be made towards a legally binding instrument;
result in serious market distortions and – most
world trade.”
and with hope that, following new rounds of
importantly – be far less effective in ensuring
reducing
shipping’s
carbon
footprint.
consultations to be held post-Copenhagen, the required consensus on action needed to be taken to save the planet will be reached at the next Conference – possibly in Mexico one year from now.’ He emphasised that COP15 has given the industry more time to make “real progress in our work. At the same time it creates an increased obligation on IMO to intensify its efforts so that it may be able to present, to COP 16/17, concrete results as evidence not only of its determination to play its part in the world efforts to stem climate change and global warming, but also of its continued capability to serve the environment, as it has successfully done over the years”. The International Chamber of Shipping said it was disappointed that the text of the “Copenhagen Accord” is silent on the treatment of international shipping in the delivery of further CO2 emission reductions. The ICS argues that
Copenhagen – The location for COP15
theBaltic March 2010 www.thebaltic.com
9
People, places, plcs Norway
since 2008 have yet to be tested in the courts.
with a fleet in service of 64 vessels and a
A case brought by three shipowners against the
It now looks as if the industry will have a further
renewal programme consisting of about 20
Norwegian government’s demand for 10 years
wait for clarity on the matter.
vessels on order. MOL has been a shareholder
of retrospective tax has been successful. Farstad
Shipping,
Odfjell
Shipping
in Gearbulk since 1991. According to an and
MOL spokesman, the increased shareholding
SGX
of MOL reflects the long-standing partner
rules passed by the Norwegian Parliament in
Singapore Exchange (SGX) will start trading
relationship between the shareholders. It also
December 2007, concerning transition from the
fuel oil 380-centistoke futures contract (FO 380
demonstrates the firm future commitment of
then existing to the new tonnage tax system,
Contract) on Monday 22 February 2010. The
MOL to Gearbulk.
broke section 97 of the Norwegian Constitution.
new contract is based on Residual Marine Grade
The Supreme Court awarded in favour of the
380 ISO8217, primarily bunker fuel supplied
shipping companies that the retroactive tax
to ships. Physical delivery will be via Free-
American Shipping Company
imposed in 2007 for the years 1996-2006
On-Board or inter-tank transfer at Exchange-
American Shipping Company, ASA (AMSC)
was in breach of the Norwegian Constitution.
designated Singapore oil installations. The
has appointed Gregory J. Matecki as its new
“This confirms that retroactive taxation is not
minimum tradable contract size is 100 metric
president and ceo. He succeeds Rob Kurz, who
legal. Further, the verdict provides the basis
tonnes per lot and the minimum deliverable
recently resigned from the company. Matecki
for predictable conditions for shipping activities
size is 2,000 metric tonnes or 20 lots. Market
was previously the company’s chief financial
based in Norway,” said Farstad Shipping in a
markers and liquidity providers will be available
officer, and will continue to hold that position.
statement.
for this contract.
Rieber Shipping claimed that the transitional
“During the past year and a half, Greg has
The effect for Odfjell will be an increase in
The trading session for the new contract
been a key member of our executive team and
the equity of about $110 million, including
starts from Singapore time 9.30am to 6.30pm
has been instrumental in the management of our
refund of about $27 million already paid taxes
(Tsession) followed by 7.30pm to 1.00am (T+1
business. We look forward to Greg continuing to
and interest. “In an industry hard pressed by
session). The extended trading hours provides
establish American Shipping Company as the
recessionary times this was most welcome
participants, such as shipping companies,
premier owner and lessor of Jones Act product
news,” said Odfjell.
bunker suppliers and oil trading companies,
tankers,” stated Robert Caruso, chairman of
For Farstad, the payable tax claim – which
an efficient and transparent pricing mechanism
the board. AMSC currently has a series of 10
corresponds to the increase in equity – was
for the Singapore fuel oil market from Asia
tankers on order. When the current series of 10
some $107.6 million, while Rieber Shipping
open to Europe close, and is in line with recent
tankers is completed in 2011, AMSC will own
expects its equity capital to increase by some
moves from SGX to extend trading times on
the most modern product tanker fleet in the
$21 million.
certain products to provide greater international
United States.
availability. Chong Lit Cheong, chief executive officer
EU focuses on liner shipping
of International Enterprise Singapore said:
Dubai Port World
The EU Commission announced in January
“Singapore has been one of the leading physical
DP World has confirmed that it will continue to
that it would be launching a formal antitrust
commodities trading hub in Asia Pacific, in
fund the London Gateway project, a £1.5 billion
investigation into the Baltic Feedermax pooling
particular for the oil trading sector. The launch
development to create Europe’s biggest deep-
scheme proposed by Germany’s Anchor
of SGX’s FO 380 contract will undoubtedly
sea container port and logistics park on the north
Steuerberatungsgesellschaft (Anchor).
further strengthen our value proposition to the
bank of the River Thames near Thurrock in Essex.
The Commission said that it would particularly
global oil trading community. We are supportive
There had been doubts over the future of the
examine whether the scheme, whereby owners
of such market initiatives as they provide long-
project after DP World’s parent company, Dubai
would collectively cover laying-up costs, would
term solutions for risk management and greater
World Corp., requested a freeze on some $26
have “the explicit aim of reducing the available
pricing transparency.”
billion of debt payments while it restructures the
capacity of feeder vessels in Europe, which in
Lam Yi Young, chief executive of Maritime
group. On a visit to the port construction site,
turn could increase the rates of chartering feeder
and Port of Authority of Singapore (MPA) said:
Prime Minister Gordon Brown said: “The London
vessels.”
“SGX’s fuel oil futures contract will encourage
Gateway is a significant foreign investment into the
However, it emphasised that opening
greater participation in Singapore’s marine fuel
UK. It is a massive vote of confidence in the UK’s
antitrust proceedings was no evidence of an
market from both local and international shipping
economic recovery and in this region. UK Trade &
infringement. No date was set for the conclusion
and bunkering communities. This complements
Investment and other government departments
of the inquiry.
Singapore’s position as a top bunkering port and
have worked closely with DP World over a number
Anchor subsequently announced that it had
is in line with MPA’s effort to develop a conducive
of years to make this project possible. I am
been unable to secure financial backing for the
and progressive environment for the bunkering
delighted with the decision to locate this world-
scheme, which would not now go ahead. It cited
industry.
class project here in the UK. It will help bring the
the EU enquiry as a factor, but said that it was
largest deep-sea vessels here and improve the
one of a number of circumstances contributing
efficiency of the UK’s freight distribution, creating
MOL
thousands of jobs, future growth and economic
This would have been the first investigation
Mitsui O.S.K. Lines (MOL) announced at the
prosperity.” According to an independent survey
into the liner industry since lost its exemption
beginning of the year that it has increased its
commissioned by DP World, the development will
from general EU anti-competition rules in 2006.
investment share in Gearbulk Holding Limited
generate 36,000 jobs in total, including 12,000 jobs
Specific maritime guidelines on co-operation
(“Gearbulk”) from 40% to 49%. Gearbulk is the
in logistics and construction that will be created in
and pooling agreements have been available
world’s leading open hatch shipping company,
the short term.
10
theBaltic March 2010 www.thebaltic.com
to the decision.
People, places, plcs In a separate development DP World is
service and help us promote the importance of
planning a premium listing on the London
sharing knowledge through training and other
Stock Exchange in the second quarter of 2010.
events, such as seminars and conferences.”
The company publicly cites its dissatisfaction with its market valuation and sees the move
The register also plans to open an office in Singapore early in 2010.
brokers increased slightly, from 5.6 to 5.7. Once again, the survey revealed a continuing level of concern over the newbuilding orderbook. “There are too many ships already in operation, and even more to come, so there will be very
offering access to investors, improved liquidity
little scope to increase freight rates,” said one
and a higher share price. “The listing will give
respondent, echoing the thoughts of a number
us more exposure to international markets.
Shipping confidence up
of others who responded to the survey. Other
As far as investors are concerned,the listing
Overall confidence levels in the shipping
comments included: “There is only enough cash
in London will provide regional investors with
industry have stabilised, according to the
to fund half the orderbook, so something has to
confidence,” said Mohammad Alhashimy of
latest Shipping Confidence survey by Moore
give”; and, “The massive orderbook is a great
DP World’s PR team.
Stephens, although a sustainable recovery in
cause for concern”. One respondent said that
the markets still appears to be some way off.
the key to the massive orderbook crisis was for
The depression in freight rates seems likely to
“the banks not to finance any more projects and
IRI
persist amid continued concerns about the level
for shipyards to agree to delays in delivery dates”.
International Register of Shipping has opened
of newbuildings set to enter the market over the
an office in Norway. The office in Bergen will be
next two years.
For the fourth successive survey, respondents identified demand trends as the most important
run by Noralf Lekva and Kjell Jensen, a master
On a scale of 1 to 10, the average confidence
factor likely to affect their business performance
mariner. Both have extensive experience in
level expressed by respondents in November
over the coming year, followed by competition
the maritime industry, including shipowning,
2009 in the markets in which they operate was
and the cost and availability of finance.
brokering and management.
5.7, the same as in the previous survey in August
Julian Padilla, chairman of the International
2009, which itself was the highest level recorded
Register of Shipping, says it is important to have
for 12 months. But this is still significantly down
a presence in Norway, one of the world’s leading
on the 6.8 recorded in the first Moore Stephens
shipping nations. “We are committed to building
survey, in May 2008.
closer relationships with our shipowners and the
Charterers showed the most significant drop
maritime centres of excellence. This will ensure
in confidence over the latest three-month period,
we can offer the highest possible standards of
down from 5.8 to 5.6, while confidence among
Improve your operational efciency Our experience and competence enables us to offer ships agency services at a global standard, adapted to local requirements. Our focus is to help you get your vessels in and out of port quickly and efciently.
www.wilhelmsen.com/shipsservice
H124x178_Agency WSS ad.indd 1
28.01.10 11.36
theBaltic March 2010 www.thebaltic.com
11
Asia Pacic Maritime 2010 24 - 26 March 2010 • Singapore Expo w w w. a p m a r i t i m e . c o m / T h e B a l t i c
Opportunity is in your hands With over 900 leading participating companies from more than 50 countries converging with the latest in marine equipment, technologies and services, there are now more reasons to take your place at this Asia Pacic’s premier exhibition. Join us at the 11th edition of Asia Pacic Maritime! For more information, contact us at apm@reedexpo.com.sg or +65 6780 4672
Organised by:
A member of:
Supported by:
Endorsed by:
Ofcial Media Partner:
Logistics Partner:
Held in:
Interview
Market maturity comes a step closer The Baltic talks to the new chairmen of the FFABA
D
potentially more valuable for the market.
orian Benson and Andrew Jamieson of GFI and ACM GFI have been
Benson points out that the buy-in on a full
elected the new chairmen of the
VLCC means an enormous cash exposure,
Forward Freight Agreement Brokers’
particularly at times when rates are very high,
Association (FFABA), representing the dry and
precluding many trades. “Smaller clip sizes
wet markets respectively. After a year which saw
bring in more trade – the flip side is that if you’re
profound changes for both the shipping industry
using FFAs primarily as a risk management tool,
and the derivatives industry as a whole, there
there is an element of frustration if you can’t get
are new challenges to be tackled, but many of
coverage for the whole ship.” Introducing larger
the most important questions remain the same.
clip sizes gives potential for a two-tier market, which Benson feels could be misleading. Jamieson, however, is more optimistic: “I think
Dry – the switch to clearing
we could almost get used to a two-tier market. I
According to Benson, the main change to the
like the idea that people can flip around and buy
market last year was the avoidance of OTC risk,
smaller amounts.”
and the consequent move towards a fully cleared market. “It has been well documented that there were issues with certain counterparties, but
FFABA focus
I don’t think that there was an issue with the
Despite a difficult time in 2009, the issues which
market itself. There is still confidence that FFAs
face the FFABA have not really changed, Benson
are the best tool for risk management.”
says. Instead, the FFABA will largely focus on
As a result of the move towards clearing,
maintaining and developing the status quo. This
OTC counterparty risk is “almost an irrelevance
will mean:
now,” says Benson. However, along with that
• Maintaining the efficiency and professionalism
comes the need for a constant monitoring of
Dorian Benson
clearing, to make sure that it is both professional
of the market. “Brokers are an absolutely integral part of the FFA market, and the
and efficient. So far, Benson emphasises, there
players who were “willing to take a punt on the
have been no issues with the clearing houses,
market”, 2009 saw players using the market for
but, with new players constantly rumoured to be
risk management, rather than for speculation.
• Monitoring the efficiency of the Baltic indices.
joining the market, including LME, Nymex and
In addition, says Jamieseon, the new dynamic
• Developing the high potential for Asian
CME, the FFABA “needs to remain in a constant
in storage economics, with larger tankers being
customers. While there has not been a huge
process of adaptation’ to these changes.”
chartered as floating storage, brought in a
influx of new counterparties over the last year,
whole different side to the market. Overall,
there has been increased involvement from
he says, the markets stood up to the test of
producers on the Chinese side in particular,
a difficult year.
partially in response to the introduction of iron
Wet – market profile changes
professionalism of the brokers is a reflection of that market.”
ore swaps. There may be some regulatory
On the tanker side, Jamieson says that the FFA
issues to be addressed as a result.
market suffered hugely from the lack of volatility in the physical market last year. While volumes
Clip sizes
were overall probably the same, the pattern of
One issue which has been raised is the need
trading was very different. Whereas previously
for bigger clip sizes in the tanker market, but
there had been a large number of smaller
Jamieson says that he thinks smaller sizes are
theBaltic March 2010 www.thebaltic.com
• Ensure screen trading continues to be a positive for the market.
13
When will the storm pass? The TradeWinds Marine Risk Forum is now established as the melting pot for ideas and interaction between shipowners, risk managers, underwriters, brokers and club managers. Opinions are freely exchanged and common ground sought on solutions. The 4th Forum in the series takes place at a time of unprecedented challenges and changes for shipowners and their insurers. Spanning two days, the Forum tackles the hot topics for both H&M and P&I and will look in detail at the issues and controversy surrounding valuations, the explosion in FD&D claims, bring new thinking on Loss of Hire and as whether the insurance industry is doing enough for shipowners in the current climate.
Sponsors
Delegates at Forum will benefit from a full business programme, but also from the high level networking opportunities, including the Forum Gala Dinner, kindly hosted by the American Club, in the ballroom of the Vier Jahreszeiten. Join us and the global marine insurance industry in May to learn, make contacts and do business.
Supporter
For more information regarding the Forum and sponsorship: +44 207 842 2727 info@nhstevents.com www.nhstevents.com
Corporate viewpoint LCH.Clearnet Ltd
LCH.Clearnet Ltd Reducing risk across the world’s freight routes
One million plus contracts cleared for the second year running
Driving efficiencies
Concerns about counterparty risk kept cleared
LCH.Clearnet is improving the
volumes at LCH.Clearnet high throughout
procedure for manual entry
2009, despite a record 50% drop in freight
of voice brokered trades.
volumes. With over one million contracts cleared
Responding
in 2009 and an 85% market share of dry
introduction of screen
cleared FFA trades, LCH.Clearnet remains the
trading for FFAs, which
Iron ore pro-
clear market leader. The year ahead looks
has been explored by
ducers, steel mills,
set to see even more focus upon the value of
the industry for some
centralised clearing as regulatory developments
time, LCH.Clearnet is
are discussed and users increasingly look to
working on demands for
minimise their counterparty risk.
straight through processing.
Market Share 2009
In a move which will make the end to
Growth opportunities Always looking to extend the
end processing of trading far quicker,
Screen
to
trading
broad range of asset classes cleared,
OTC Other clearing houses
the
LCH.Clearnet
introduced clearing for OTC iron ore and fertilizer swaps in 2009.
traders,
LCH.Clearnet Ltd
banks
and dry bulk shipping companies can now clear both iron
generally
ore swaps and their dry
results in higher volumes and in
FFAs, benefitting from a
Robust risk management tackles regulatory concerns
the case of freight, small clip sizes
With a robust risk management framework, and
current traditional voice broking method.
35% margin reduction between
may well migrate to screen trading from the
the two markets. The iron ore contract is a monthly cash-settled swap, traded out to two
as the only clearing house to have managed
whole calendar years, using The Steel Index (TSI)
an OTC default, LCH.Clearnet has unequalled
iron ore reference price (62% Fe C+F) for settle-
Providing enhanced transparency
ment.This service has seen tremendous support
of markets. As regulators increasingly focus on reducing risk in OTC derivatives markets, the value
More information on the activity of the freight
a monthly basis. LCH.Clearnet is also a member
of clearing freight derivatives has been a topic of
market will soon be available, to both members and
of the Iron Ore and Steel Derivatives Association
much discussion. With over 10 years’ experience
brokers, as LCH.Clearnet provides daily volumes
(IOSDA) which seeks to promote the market
of clearing OTC derivatives, LCH.Clearnet is well
and market data via its website. Providing up-to-
together with brokers and market participants.
placed to deliver increased transparency and
date statistics will enhance transparency, allowing
security to the freight marketplace.
users to keep track of volatility and facilitating
experience for reducing risk across a wide span
from market participants, with volumes growing on
calculation of their market share. 200,000
450,000
175,000
400,000
150,000
350,000
200,000 75,000 50,000
Nov-09
150,000
Isabella Kurek-Smith
100,000
Director, Head of Energy & Freight Markets
50,000
LCH.Clearnet
0
+44 20 7426 7460
Dec-09
Jul-09
Sep-09
May-09
Jan-09
Mar-09
Nov-08
Jul-08
Sep-08
May-08
Jan-08
Mar-08
Nov-07
Jul-07
Sep-07
May-07
Jan-07
Volume
Mar-07
Nov-06
Jul-06
Sep-06
May-06
Jan-06
Mar-06
0
Nov-05
25,000
Sep-05
Volume (lots)
250,000 100,000
Max OI (lots)
300,000
125,000
Isabella.kurek-smith@lchclearnet.com
Maximum Open Interest
theBaltic March 2010 www.thebaltic.com
15
FFA
Market on the mend 2009 was a better year than predicted for the FFA sector, says Neville Smith
I
f the FFA market were to be awarded marks
C5 and C7 iron ore routes, a potentially huge
out of 10 for its performance in 2009, it would
source of fresh liquidity when teamed with the
receive a better grade than was widely pre-
iron ore swap. “These routes have the potential to be
dicted at the start of the year. True, volumes in the dominant dry market
much more heavily traded as principals look to
took a big hit, falling 45% to 1.1 million lots
manage the freight exposure within iron ore. The
worth around $34.8 billion, but 2009 was far
drop-off in liquidity has been a big challenge but
from a disaster.
a cleared C3-C5 market is a chance to kick-
Rather, the fall was magnified by the
start volumes on routes which represent such a
exceptional market in 2008. Firm demand from
big component of the physical ore price,” says
China for bulk commodities buoyed the physical
FIS managing director John Banaszkiewicz.
market and supported paper, helping the iron ore swap find its feet as a result. In the tanker market, volumes held up too, though at lower
Tanker volatility rises
volatility levels, making it a harder year in terms
The positive mood extends to tankers, with GFI-
of managing risk versus return.
ACM’s Andrew Jamieson noting an increase in
Last year was also the one where clearing
volatility in the early part of 2010. The drivers
became entrenched, as risk management slid
for this, he says, are the fall in the Worldscale
back onto the traders’ agenda. The majority of
flat rate and a physical market, “where brokers
trades are now cleared.
know they can negotiate a deal and where
The dry market also found itself scratching a
deals are moving by several Worldscale points
familiar itch, but got little nearer to treating the
at a time”.
cause. The announcement by the London Metal
Tanker traders work to strict risk management
Exchange that it sought to launch an exchange-
routines and the dry market followed suit last
traded FFA market, rekindled the debate that
year, fully embracing clearing and paying for
many hoped had gone away – whether the dry
The Baltic Exchange is monitoring
the privilege. Clarksons’ Alex Gray notes the
market should embrace an electronic, screen-
proceedings
cost of trading is a potential stumbling block
traded future. It was far from dull. And 2010 promises to be just as gripping – perhaps more so – as these trends evolve and the issues raised work
to increased volumes but says the market is levels, perhaps to two million lots or above, albeit at lower values.
finding solutions. “We are seeing deals where counterparts
SSY’s Duncan Dunn says that with smaller
fix a contract of affreightment and are happy
lot sizes emerging: “Smaller counterparties can
to exchange paper because the physical deal
cover their exposure and this is a welcome
offsets the credit risk. It’s not a solution for
evolution. At the same time the market has good
the entire market but it’s a workable hybrid for
Dry market looks up
levels of capacity, with deals being structured
some.”
Dry FFA brokers are united in seeing an
out to 2020.”
themselves through.
encouraging trend to volumes in the last quarter
FIS is similarly bullish, predicting lot levels
of 2009 and January 2010. This has led SSY
above two million and a potential market value of
Looking forward
and FIS among others to suggest that volumes
$60-$70 billion. The broker has also succeeded
Whether or how screen trading will find traction
this year could bounce back to near 2008
in encouraging capesize traders to fix on the
in the dry market looks set to be a defining issue
16
theBaltic March 2010 www.thebaltic.com
FFA this year. Jeremy Penn confirms that attempts to
has longer term plans which discuss “trading
Clarksons believes “the sky is the limit” in terms
provide a third-party “aggregator” screen by the
venues” for swaps and options. The Baltic is
of potential counterparts.
Baltic proved technically difficult and not much
monitoring the Brussels process but says the
Clarksons spent two years working with
desired by users.
market has no clear picture yet of what the
the Shanghai Shipping Exchange on its index
changes might mean.
methodology. A panel of 15 carriers and 15
The market’s reaction to the LME proposals has been lukewarm at best except among a
“What I hope is that regulation doesn’t make
service providers has been established to
handful of traders, but there is a feeling that the
it harder for the FFA market to develop,” says
draw up route assessments. The broker is in
momentum for change is building again.
Jeremy Penn. “I’m a believer in the evolution of
discussion with clearing houses and hopes to
“Talking in terms of a solution suggests
markets and enterprise. Increased transparency
be able to offer the product on a cleared basis
something is broken and this market is not
is something we should sort out ourselves
from the second quarter of 2010.
broken. There are four screens today and
rather than having someone else tell us how it
probably more will emerge in 2010,” says Alex
should work.”
This year could see tanker FFAs start to deliver on their long-held promise of a market
Gray. “There is a temptation for people to say
New products have become the watchword
to rival their bigger dry bulk sibling. A shot of
that brokers don’t want screens, but all the
of the freight derivatives market, but with dry
volatility in the physical market over the turn of
screens out there are broker screens, so it’s not
bulk, tanker and commodity markets maturing
the year has given hope that new Time Charter
an argument I agree with.”
there remained one unconquered frontier.
Equivalent (TCE) contracts will be ready to ride a fresh wave of liquidity.
Andrew Jamieson says the dry market could
Attempts to design a container swap had
demonstrate maturity by accepting that screens
been going on for years until Clarkson Securities
Baltic Exchange chief executive Jeremy
have their place. “It’s a great tool which gives
surprised the market with the launch of the
Penn says he is optimistic that 2010 is the year
you a firm market, shows transparency and
Container Freight Swap Agreement (CFSA) in
that trading in TCEs “really starts to happen”,
shows you are in the game, even if most of the
early January.
once the final wrinkles in the methodology are
Designed to take advantage of China’s
work goes on behind screen.”
ironed out.
all-or-nothing
massive container export volumes, the swap
“We have perhaps tended to focus on the
argument, that for a screen to be successful it
mirrors established freight derivatives by offering
difficulties but we are very close to resolving
should be dominant, is spurious too. A screen
a dollars per day contract per 20ft equivalent
the problems. We’ll go on working through the
could be successful if it had 30% of the market
unit on the most liquid routes out of Shanghai.
issues until there are no issues,” he says.
Jeremy
Penn
says
the
representing the liquid trades in near dates while
This is a departure from previous attempts to
GFI-ACM’s Andrew Jamieson, who is chair
the more difficult longer dated business is done
develop a paper market in boxship charter rates,
of the wet FFABA says the work will continue.
by phone, he suggests.
a deliberate policy, according to Clarksons’ Alex
A meeting in February will attempt to decide
There is perhaps only one dark cloud on
Gray. “Boxship charters are long term and
whether to continue with TCE development,
the horizon. 2010 is supposed to be a year
there’s no spot market like in dry or tanker FFAs
switch to a dollars-per-tonne alternative or try to
of regulatory change for the FFA market,
and even when an index was produced we
develop a happy medium.
with proposals to monitor derivatives trading
couldn’t see who it was useful to.”
“There are few people willing to price the
emerging from the European Commission
Instead, the aim of the CFSA is to provide
deferred market at present,” he says. “Unless we
and the US Commodity Futures Trading
a product that is useful to owners, operators,
get the methodology right and get transparency
Commission.
exporters and importers, as well as to financial
on bunkers, then it’s never going to be liquid
In outline, the EU at least wants to promote
institutions keen for an instrument that allows
because the users are not hedging risk, they are
clearing as a means of standardisation and
them to trade a highly liquid underlying market.
taking on another risk.”
A container ship derivative has recently been launched
theBaltic March 2010 www.thebaltic.com
17
FFA
Freight Options Ola Strand Andersen, managing director, Imarex Asia on a useful
risk if traded via a clearing house. As liquidity increases, freight options will get more atten-
$40,000
ible, easy to unwind and carry no counterparty
$36,000
ideal for this purpose because they are flex-
$32,000
disputes and mitigate risks. Freight options are
$28,000
than ever to find ways that eliminate contractual
$24,000
contracts. Consequently, it is more important
$20,000
many counterparties were not honouring their
Net Payout
rates in 2008 created serious challenges as
$16,000
overshadowed by defaults and law-
suits. World recession and the collapse in freight
$12,000
of trust and good faith have been
$30,000 $28,000 $26,000 $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0
$8,000
face of the shipping industry. Principles
$4,000
R
ecent events have forever changed the
$0
tool in a complex world
tion from the shipping community due to their Underlying Market
dynamic nature and practical application in hedging strategies. It is essential for companies exposed to
buyer of a put option, a protection from rates
a profit split up to a certain threshold level. The
deep-sea shipping to analyse the inherent
collapsing, and at the very least ensure rates are
owner intuitively prefers the latter alternative, but
optionality attached to any contract. In the
covering break-even cost of operating a vessel.
has to consider the relative value between the
freight market, this can be divided into physical
To be in possession of this right, an options
two alternatives.
and synthetic. Physical optionality is manifested
premium or “insurance premium” has to be
Let’s assume the reliable charterer offers
by contractual fine-tuning, such as duration of
paid. This premium is determined by the market
a rate of $20,000 per day whilst the other
a timecharter, redelivery window, counterparty
and reflects the perceived probability of rate
proposed profit sharing agreement guarantees
vetting and percentage fleet coverage. Synthetic
fluctuations at a point in time. Freight options
the owner a minimum of $18,000, but a split
optionality on the other hand can be represented
are what we define as Asian or Average options,
that is dependent on the spot shipping rates.
by freight options and can be used to support
because they are settled against the average
If the spot turns out to be between $18,000
the strategy and manage the risk profile of a
of a future period, eg a month, quarter or year.
and $30,000 the profit is split 50% between the
company.
Whilst options can be concluded bilaterally
owner and the charterer. The owner reaches
between two counterparties, the majority are
his maximum threshold at $30,000, hence will
now traded cleared.
not be gaining any additional profit if the market
Options – the basics
turns out to be stronger. Since the owner will
An option is the right but not the obligation
only gain 50% of the upside, they have the
to buy or sell something in the future at a
Profit sharing
potential to gain another $6,000 in addition
predefined level called the strike price or exercise
To illustrate the benefits of freight options,
to the floor of $18,000. This is equivalent to
price. Freight options can simply be regarded as
imagine an owner interested in timechartering
$24,000 per day. The chart above illustrates the
insurance on freight rates, whereupon one pays
out a vessel for one year, being approached by
two alternatives. Net payout received (vertical
an agreed price to be insured against adverse
two charterers with the following alternatives:
axis) versus the spot market (horizontal axis).
rate movements. For example, a trader that
one charterer with a good reputation in the
The black line shows alternative one for the
knows that their profit margin will be significantly
market offers a flat daily hire rate for the year,
owner, a flat payout of $20,000 regardless of spot
reduced or even negative if the cost of shipping
whilst the smaller and less known charterer
market movements. The red line illustrates the
rises, could consider buying a protection against
offers a seemingly attractive profit sharing
second alternative, a profit sharing agreement
higher rates, or what is named a call option.
agreement where the owner will receive a lower
between the owner and the charterer.
On the contrary, a shipowner will be a natural
18
minimum rate but will be able to participate with
theBaltic March 2010 www.thebaltic.com
An owner, naturally interested in the best
Extending a timecharter contract A charterer might take a ship for one year at a given rate, and at the same time offer the owner a lump sum of money for the option to extend the timecharter for another year. Both the owner and the charterer agree to a date where the charterer must decide whether he will declare the option, and thereby keep the ship. This is in effect an owner selling a “call option” since the potential to participate in a stronger market
$40,000
$36,000
$32,000
$28,000
$24,000
$20,000
$16,000
$12,000
$8,000
is exchanged with the benefit of colleting a $4,000
$30,000 $28,000 $26,000 $24,000 $22,000 $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0
$0
Net Payout
FFA
Underlying Market
premium. There is little doubt that the charterer will extend the contract if the market is strong. Similarly, the ship will be redelivered if rates subside. Whether this is a prudent strategy is a separate discussion to the relative value of
deal possible, should look at freight options to
occur, and the physical exposure for the owner
entering into such agreement on the physical
value any profit sharing strategy. The seemingly
changes, the option strategy can be easily
side as opposed to what value can be realised
good profit sharing alternative turns out to
unwound in the market.
from selling a cleared freight option. By doing the
be less attractive, because it is undervalued
The blue line shows payoff if a vessel is
latter, the trade rightfully demands a margin to
relative to what could be obtained using freight
timechartered out at $20,000 and profit sharing
be posted with the clearing house. Nevertheless,
options. In the example below, it is assumed the
is replicated with options. For an additional
it is an attractive alternative as the additional
owner charters out their vessel at the flat rate of
$750 per day invested, the owner will have a
premium received could easily outweigh the cost
$20,000 and replicates the profit sharing payoff
significantly higher payout if the spot market is
of margin financing.
by buying a “call spread” (simultaneous purchase
strong.
It is important to realise that all physical
and sale of two call options with different strikes).
It is important to remember that the example
optionalities have a value and are often directly
At approximately $750 extra per day, the owner
above is only one of many possible strategies
linked to shipping rates. Freight options can
is able to receive an additional $3,250 per day
that the owner can choose from. Adjusting
be used as a supplement, a valuation tool
if the market turns out to be stronger. This is
for volumes would, for instance, reduce the
or as a substitute for many types of contract
clearly a viable alternative to the initial strategy.
additional cost but at the same time decrease
arrangements in the physical market. Although
Firstly, the owner will incur less counterparty
the payoff if physical rates remain strong. In
not applicable to all circumstances, any
risk by timechartering out the vessel to a more
other words, it would bring the strategy more
company related to ocean freight should explore
reputable charterer. Secondly, a cleared option
in tune with the charterer proposing the profit
how freight options can assist in improving
will completely remove the risk of default and
sharing, but still with a preferential payoff.
decision making and overall risk management.
thirdly, if any unforeseen circumstances do
Freight options can help guarantee smooth sailing in a troubled market
theBaltic March 2010 www.thebaltic.com
19
Corporate viewpoint SuperDerivatives
SuperDerivatives Effective management of freight risk using derivatives – a user guide – by Leor Jivotovsky, SuperDerivatives
T
he shipping industry is one of the lead-
inherent part of the commodity value chain.
the contract period, as determined by reference
ing indicators of the state of the global
Managing freight market risk remains a
to the relevant index, the seller of the FFA is
economy. Trading volumes of forward
significant issue for the shipping industry but
required to pay the buyer an amount equal to
freight agreement contracts, or FFAs,
also for the banks and corporates with an
the difference between the contract rate and
interest in this evolving market.
the settlement rate multiplied by the number
experienced seven years of rapid growth as the economy boomed, with a peak in 2008 when
One method of managing this risk is through
of days specified in the contract. Conversely, if
2.1bn tonnes of freight in FFA contracts worth
the purchase and sale of FFAs, the value of
the contract rate is greater than the settlement
$155 billion were traded.
which is derived from the value of an underlying
rate the buyer is required to pay the seller the
asset.
settlement sum.
The tanker and dry freight markets have experienced record highs and lows over the
In the shipping industry, the underlying asset
FFAs can be bilateral between two principals
past 18 months, reflecting the wider economic
is the freight rate for a specific physical trade
or can be cleared. A bilateral transaction exposes
downturn, yet as the financial markets recover,
route, based on a daily assessment provided by
the counterparties to a risk on non-performance
an upswing of trade in FFAs is widely considered
the Baltic Exchange.
throughout the life of the transaction. As
These freight derivatives serve as a means
a way to reduce or eliminate counterparty
Already, a marginal uptick in world trade in
of hedging exposure to freight market risk by
credit risk, participants have overwhelmingly
the last six months has been driving shipping
providing for the purchase and sale of a freight
embraced clearing mechanisms for freight
activity, with the dry bulk market proving more
along a named voyage route or timecharter over
products, Clearing mechanisms have been
resilient than many expected in 2009, especially
a specified period of time.
provided by NOS, Singapore Exchange (SGX),
to be imminent.
Using a simple example of a buyer of an
CME Clearport and others for the standard
Fundamental supply and demand drivers
FFA swap, a formula determines the settlement
freight products such as swaps and options.
such as vessel supply, vessel construction,
amount for the transaction at expiration. On
Clearing mechanisms replicate the structure in
export growth, oil flows, refinery utilisation, and
settlement, if the contract rate at which the
place at a regulated futures exchange in that
demand for bulk raw materials contribute to
buyer entered into the swap is less than the
participants trade standardised products, must
establishing global freight rates. Shipping is an
average of the rates for the contract route over
post margins, and report their positions and
towards the end of the year.
abide by position limits in place. The freight derivatives market began with the trading of voyage rates for dry cargo routes in the early 1990s and later was expanded to include wet tanker routes. Forward Freight Agreements were originally used almost exclusively by participants in the shipping industry, such as shipowners and charterers, to hedge against fluctuations in freight rates. Banks stepped in to offer greater intermediation and provide hedging services to the shipping community. Financial hedging allows for an efficient management of freight exposure and cash flow. Participants can flexibly react to spot market volatility using financial contracts rather than timecharters. Trading in and out of contracts prior to settlement is also possible. Since then, the attractiveness of trading freight has greatly evolved. The advent of
20
theBaltic March 2010 www.thebaltic.com
Corporate viewpoint SuperDerivatives clearing has created greater transparency and promoted liquidity, while market volatility has remained very high. These factors have attracted a large number of non-traditional players to this market. Today, participants include shipowners, refiners, physical traders, banks, brokers, hedge funds, and asset managers. The result of increased participation is that the total volume of financial trading today is a multiple of the underlying physical market. There is more extensive use of risk management techniques
and
instruments,
whether
standardised or bespoke. The market now actively trades swaps, route spreads, time spreads, Asian options, and strips on both dry and wet freight. As the level of sophistication and customer need increases, new products and structures will eventually be developed. In light of these developments and to reflect
produces prices that are observed in the market.
structure, allowing them to more effectively
the growing market, SD realised that participants
In freight, the industry has not embraced just
hedge any exposures that may affect their
active in the markets require sophisticated
one model, creating associated model risk when
capacity to do business.
pricing, analytics and risk management tools
pricing options.
Western Bulk, one of the world’s largest
to support their freight trading operations. Tools
To support market participants through these
shipping companies with a 60-strong commercial
were needed for supporting hedging or trading
trading conditions, SD has added dry and wet
fleet, has signed up for the service to strengthen
decisions, to collect reliable market data, and
cargo FFAs and options on FFAs on a very wide
its ability to set a market-accurate future price for
accurately and efficiently calculate the values of
range of ocean routes to its commodities and
carrying commodities at sea.
financial instruments.
energy solution, giving users access to real-time
International shipping company Gearbulk
Valuing shipping derivatives also has its set
independent pricing, risk management, mark to
recently joined the growing list of shipping
of challenges. The market is still relatively young
market valuations, pre-trade analysis tools and
companies using SD’s data to gain an accurate
when compared to the more established energy
extensive portfolio management capabilities
and
and metals markets.
These cover both wet and dry freight
independent
view
for
commodities
derivatives pricing and management.
Although clearing and settlement have
derivatives, designed to provide coal, ore, oil
Gearbulk hedges its exposure to bunker
provided much needed price transparency,
and other commodity producers, timecharterers,
fuel costs for its fleet of vessels and chose SD’s
the intra-day market is still relatively opaque.
shipowners and financial institutions with an
commodities solution, SD-CM, for its ability to
Price discovery is provided by shipping brokers
in-depth understanding of market trends and
provide extremely accurate independent price
but quotes oftentimes contain wide bid-offer
potential trading opportunities.
checks for fuel markets before going to market.
spreads to reflect the uncertainty of where the market is trading.
SD’s freight derivatives service enables
Ilias Angelidis, treasury analyst, Gearbulk,
shipping firms to access accurate pricing and
comments: “After surveying the market for a
Second freight is volatile. Spot volatility and
manage risk in the volatile shipping market to
solution to accurately price our fuel exposure,
option implied volatility for freight can easily
benchmark and manage their exposures to
we went with SD for its residual fuel oil coverage
be trading above 100% consistently. Compare
freight costs.
and its scalable pricing system supported by
this with 10% annualised implied volatility in the
SD provides the widest coverage of
robust risk analytic tools. Our ability to price and
foreign exchange market; 100% implied volatility
commodity and energy derivatives on a real-
manage our positions across the life cycle has
is akin to saying that the market believes that
time basis, from vanilla to the most advanced
improved dramatically since deploying it.”
within a given time frame, in this case one year,
structures, across a huge range of underlying
SD aims to develop its presence in the
freight rates can double or head to 0.
assets. The addition of FFAs builds on the
shipping industry further by providing members
company’s existing presence in commodity
of the Baltic Exchange with risk management
derivatives.
and valuation services.
Volatility reflects the fundamentals of the market. Demand for freight is inelastic and in the short run there are limitations on how much
Overall coverage of commodities derivatives
Through its technology, it directly provides
supply can increase in order to catch up with
includes over 65 options and structures across
additional market transparency which ultimately
demand.
more than 105 underlying assets, including
leads to better information and to better
With this in mind, obtaining accurate volatility
precious metals, base metals, oil and refined
decision making. Finally, it raises awareness and
quotes is challenging as options volume are
products, natural gas, electricity, emissions and
education about the shipping market to get new
more thinly traded than swaps and wide bid-
agricultural markets and freight.
players into the market.
offer spreads are prevalent.
This ensures shipping companies have
Third, choosing the appropriate financial
access to accurate, independent and real-
models to value options is also key. The
time pricing for almost any commodity and
appropriate model is ultimately the one that
commodity-related products and instrument or
theBaltic March 2010 www.thebaltic.com
21
Baltic briefing
A helping hand Richard Butler explains the role and history of the Baltic Charitable Society
B
and who might be reluctant to ask.
enevolent societies can provide an
or related backgrounds, who at some point in
extremely useful and encouraging sup-
their lives have joined the Society and who now
The main source of income for the Society’s
plement to any help that the state is
have financial, medical or any other problems.
activities comes from its investment portfolio,
able to give. Such funds were often set
The Society has recently been able to provide
but donations and occasional legacies from
up by trust deed many years ago and devoted
help with heating bills to older members over the
the wills of grateful and generous old members
to helping members of a particular trade or
cold snap in January. It has given practical and
are regularly received and are always welcome.
industry. The Baltic Exchange Charitable Society,
financial support to a member going into a care
Membership subscriptions can also be a steady
for shipping and related occupations, came
home. It has helped with the prompt provision of
source of income and the Society is keen to
into existence as a result of the gradual merg-
mobility aids; with help in adapting a home and
welcome new members. With a remarkably low
ing together of the Baltic Exchange Benevolent
with funeral expenses and physiotherapy outside
one-off subscription of £50 for life membership,
Society (founded 1912), the Cereals and Baltic
the National Health Service.
it is hoped that all employees of Baltic member
Friendly Society (1906) and the Oil and Oilseeds
The Society also provides many older
companies join the society to support its work,
Feedingstuffs Trades Benevolent Association
members, long since retired, with a way of
and, of course, to qualify for assistance should
(1971). Its objects have long been to help a wide
keeping in touch with the Baltic, and also with
some disaster ever strike or serious need arise.
range of families with shipping and commodity
a source of advice on problems they encounter,
You never know what’s round the corner.
related backgrounds.
in moving house, or in making arrangements for
Details about applying for either membership
The Society continues to do what it has
power of attorney. There may be many we do
or assistance can be obtained from Richard
always done. Governed by a committee of
not hear about who need advice or support of
Butler.
trustees who are all current or recently retired
some sort, and we always ask members to let
members of the Baltic Exchange, it is actively
the Society know if ever they hear of a colleague
Tel: +44 (0)20 7283 6090
assisting a wide range of people from shipping
or ex-colleague who might need some help –
E-mail: Richard.butler@baltic-charities.co.uk
Mediation clause for charterparties C ompanies wishing to include a provision for
claim or difference arises under or in connection
Mediation Procedure as published on the Baltic
mediation procedures within their charter-
with this Agreement (a “Dispute”), then the
Exchange website.”
parties may use the following wording:
Parties will attempt to settle the Dispute by
“Without prejudice to any other right or
mediation in accordance with the mediation
remedy under this Agreement, if any dispute,
procedure set out in the Baltic Exchange
New spring menus at the Baltic W
The full clause can be found in the mediation
section of www.balticexchange.com
ith spring around the corner, the Baltic
used our rooms for shipping related functions
A stone’s throw away from Liverpool Street
Exchange has updated its menus for
and meetings, whilst a range of small and large
station and smartly appointed, the Baltic
functions and meetings. Housed on the first,
firms have taken advantage of our modern
Exchange has in-house catering provided by
second and ground floors of 38 St Mary Axe, the
facilities in the heart of the City of London.”
Balls Brothers who can cater for a wide range of functions.
Baltic Exchange has a number of rooms which
He adds: “With prices starting from as low
can be hired for meetings, dinners and seminars.
as £50 per head for a full day’s meeting and a
See www.balticexchange.com/venue for
“We’ve played host to a wide range of
30% room hire discount available to members,
further details including photographs, room
companies in the past few months,” says venue
the Baltic Exchange makes a good choice for
dimensions and prices.
manager Cris Eccleston. “Member firms such as
anyone looking to run a professional event or
SSY, Howe Robinson, Bimco and Bunge have
meeting.”
22
theBaltic March 2010 www.thebaltic.com
Baltic briefing
Poppy appeal raises over £5,000 O
Diving around the UK T
he Baltic’s Sub-Aqua Club has announced a diverse programme of dives for 2010. With over a dozen dives around the British Isles including dives in Kerry, Kimmeridge,
Plymouth, the Farne Islands and Bognor Regis, membership of the club is open to any Baltic Exchange member. For further details, see www.besac.org.uk
nce again Baltic member Derek Prentis MBE spent November tirelessly rattling his
collection box and managed to raise £5,355 for the 2009 Poppy Appeal. Derek Prentis has been a member of the Baltic Exchange since 1952 and is the honorary appeal organiser of the Royal British Legion’s Baltic Exchange branch.
Chairman’s Cocktail Party: 19 May T
ickets are now available for the Baltic Exchange Chairman’s Cocktail Party which is being held on 19 May at Christ Church Spitalfields (London). Always a highlight of the Baltic Exchange calendar,
subsidised tickets are priced at £35 + VAT for members and their guests. To book your place, please contact Cris Eccleston.
Greenwich, CT meeting: 24 March T
he Baltic is holding a meeting for its North American members and others in Stamford
for the Connecticut Maritime Association conference on 24 March. The meeting offers members an opportunity to discuss recent Baltic Exchange developments, including new routes and vessel descriptions. The meeting takes place at the Delamar Hotel, Greenwich from
E-mail: ceccleston@balticexchange.com
New Baltic Exchange companies The Baltic is delighted to welcome the following companies into membership EnBW Trading GmbH
Houston Refining LP
Nom (UK) Ltd
KAMCO
Cosmos Shipbroking (HK) Ltd
S A G L Gault
www.enbw.com
www.lyondellbasell.com
www.nomuk.com
CLSA Asia-Pacific Markets www.clsa.com
12.30. Lunch will be provided. To confirm your attendance, please contact Janet Sykes. E-mail: jsykes@balticexchange.com
Sadly departed The Baltic is sad to report the passing of the following
Joint Baltic ASBA party T
Baltic Exchange members:
Sir Charles Alexander
Ron Rider
Sir Charles had been a member of the
Mr Rider was first elected to the Baltic in 1983
Baltic for many years, representing Houlder
representing Howard Houlder & Partners until
Brothers & Co Ltd before becoming a retired
he became a retired member in 1988.
he Baltic Exchange and the Association
member in 1980. He also served as a Baltic
of Shipbrokers & Agents (USA) will once
Director between 1964 and 1968.
again be holding a party during the Connecticut
Jens Gran Mr Gran was first elected to the Baltic in
Maritime Association week this March. This
Tony Crawford
1974. His memberships included Marmaras
is always a popular party, so members are
Mr Crawford was first elected to the Baltic
Shipbrokers and J Gran & Partners
advised to book as soon as possible. The event
Exchange in 1976. During his membership
takes place on Monday 22 March, at 65 Bank
he represented Worldtrade Shipbroking Ltd,
Leslie Slow
Street, Stamford 1830-2130. A limited number
Silver Line and V.Ships.
Mr Slow was first elected to the Baltic in 1947.
of tickets are available for Baltic members.
Between 1972 and 1982 he represented E A
Please contact Janet Sykes.
Gibson Shipbrokers until he was elected a retired member.
E-mail: jsykes@balticexchange.com
theBaltic March 2010 www.thebaltic.com
23
Baltic briefing
Greek wines Greece: Yesteryears of Retsina and oxidised, indifferent wines. Today, an exciting world of modernity, rediscovered indigenous varieties and an optimistic future
A
sk people today about Greek wine
to promote indigenous varieties and it was he
and they will still almost certainly say
who rescued the virtually extinct Malagousia, a
“Retsina (‘ugh’)” and those of a certain
delicious peachy, aromatic white variety now so
age will recall “Demestica”. This down-
fashionable and much sought-after.
beat view was upheld by eminent wine writers
Predominant white varieties to look for are
up to the early 1990s. However, EU membership
the important Sauvignon-like Assyrtiko, with
brought financial winds of change to the Greek
mineral, crisp citrus fruits – best from Santorini
wine industry, allied with new-thinking wine mak-
where the vines are nest-like to the ground to
ers heading off to France and, the ultimate
absorb any moisture and to avoid the strong
paradox, the New World, to see how things have
winds. Moschofilero is a pink-skinned aromatic
progressed since the time of Dionysus the god of
variety which excels in the Peloponnese & Ionian
wine, some 6,500 years ago.
Islands. Cephalonia’s pride is Robola, where
A few years ago, after tasting some clarets
the limestone-rich soil gives intensely flavoured
together, Matheos Los gave me a bottle of
bone-dry wines. Unique to central Crete; Vilana is
Syrah from the north of Greece and a fine bottle
a lovely fresh wine with gentle spice. Savatiano,
it was, emphasising that Syrah and other such
understated, aromatic and floral is the variety for
‘noble’ French varieties – Cabernet-Sauvignon,
‘Retsina of Attica’.
Merlot, Chardonnay & Sauvignon blanc – are
Red varieties to seek out are cultivated
successfully produced. However, it is with the
mainly in Nemea. The Peloponnes Agiorghitiko
indigenous varieties that Greek winemakers are
(‘St George’) is the most adaptable of varieties,
rightly excelling.
yielding exciting young wines, fresh ‘roses’, soft
In the mid 60s John Carras, a shipowner well known to many Baltic members, created
reds, yet its tannin-rich skins have the ability to make quality reds worthy of ageing.
David Hughes
Domaine Porto Carras at Halkidiki in the
Xinomavro (‘black acid’) is the opposite of
north. The winery, under oenologist Evangelos
Agiorghitiko. Predominately grown in Macedonia,
Oh, and finally, at the Gaia winery, instead
Gerovassilious, orchestrated the owner’s wishes
Goumenissa & Naoussa, it is difficult to cultivate,
of the Savitiano grape, Karatsalous and
needing light, water-retaining soils. However, it
Parakevopoulos have chosen the noble Roditis,
can produce wine of amazing depth, complexity
thus giving a subtle, delicious wine with citrus
and character and its tomato/dried plum style
aromas with just a hint of pine – a complete joy.
has often been likened to Italy’s famous Barolo.
The wine? Retsina … just goes to show you!
Goumenissa Central Macedonia
Naoussa
Halkidiki
Mavrodaphne is associated with a pale, tawny-
Ionian Islands
Cephalonia
Patras
Attica
Corinthia
Samos Nemea
Peloponnese
Crete
red style of sweet fortified wines grown in the
David Hughes was a shipbroker from 1961
Peloponnese and when blended with Corinthian
to 1983 when he “moved from shipping to
resin produces the well-known Mavrodaphne of
sipping” – opening a wine bar-restaurant in Old
Patras.
Spitalfields in 1984. After 25 years, the business
One of the world’s greatest sweet wines is
sold, and he is now a wine consultant. A retired
made on the island of Samos where local Muscat
member of The Baltic Exchange, he conducts
produces rich, mellifluous wines. There’s also a
corporate, company and private wine tastings
delicious dry orange-flower aroma option called
and is available for information and supply of
‘Samena’. Both are well worth searching out.
wines.
Greek wines are generally not cheap and, in truth, need to be better marketed for they have
www.thewine-enthusiast.co.uk
Map of Greece
much to offer.
david@thewine-enthusiast.co.uk
24
theBaltic March 2010 www.thebaltic.com
Baltic briefing
The view from above News from the Baltic Air Charter Association
A
nnus Horribilis’ is the phrase which
of Scottish company Globespan, which was
seem to go one better. This latter case will
aptly describes 2009 for the whole
a tour company and also an airline. Hundreds
involve a heavy cost to airports, and therefore to
aviation industry, be they manufactur-
of passengers were left stranded just before
airline fares, but will hopefully be effective, until
ers, airlines, airports or the ancillary
Christmas 2009 and the resultant fall-out of this
the next time!
companies who rely on these for their business.
and other difficulties has not done the travel
‘
The year started with the first part of the world’s worst financial crisis, which seriously hit the aviation market. Production of goods from
industry any favours. How such tour companies will fare in 2010 is anyone’s guess.
Threats to the airline industry are of course not a new phenomenon. The first aircraft hijack took place on 21 February 1931 in Peru. Byron Rickards, flying a Ford Trimotor, was approached
the main manufacturing areas such as the EU,
by a band of revolutionaries. He refused to fly
China and USA was dropping month by month,
them anywhere and the stand-off lasted 10 days
which had an adverse effect on air freight.
Rise in alliances
when he was told that the revolution had been
Passenger figures were down because of falls
As airlines around the world struggle with the
successful and he could go in return for giving
in incomes plus the gradual upward trend again
global turndown, there has been a rise in
one group member a lift to Lima. Between 1948
of fuel prices and, in November 2009, by the
airline alliances as carriers cling together for
and 1957 there were 15 hijackings all over the
increase in Airport Departure Tax levied by the
survival. KLM and Air France merged their
world; between 1958 and 1967, this climbed
UK government. This latter was originally hailed
operations, although they each retain their own
to 48. In 1969 there were 82. By this time
as a tax to alleviate climate change, but the
name and identity. They claim a cost saving of
governments around the world agreed certain
authorities belatedly agreed that it was just a tax.
£110 million by rationalisation of fleets, better
airport measures for screening passengers, and
Whilst the low cost airlines in Europe did have
use of equipment and the synergies from their
the rest is history.
reasonable passenger loads, they also suffered
respective route structures.
The airline industry, in general, remains mired
from increased costs and did all they could
In November 2009, BA and Iberia announced
in recession, despite better economic hopes for
by charging for ‘extras’ such as hold baggage
that they would merge and operate as a single
the USA and EU. This recession is forcing the
and other incidental extras. One airline even
entity. BA is strong on the North Atlantic and Far
pace of change in the industry, but remaining
suggested that it might charge passengers for
East routes while Iberia’s strength is on routes to
national controls on ownership, and the likely
using their toilets on board!
South American destinations.
pressure to protect national jobs will continue
The result of the success of the low cost
Lufthansa has now bought BMI (with its large
carriers was that scheduled airlines had to
percentage of Heathrow slots) and also Austrian
compete in price with them and thus the
Airlines and the ailing Alitalia.
to impede the speedy emergence of truly global airlines.
revenue of the latter was considerably lower
BACA Lunch
than forecast. Due to the turndown in traffic and gloomy
Security
To end on a happier note, BACA celebrated
forecasts for future growth, many airlines
The word heard most in 2009 was ‘Security.’
scaled down their aircraft purchases with either
Every security scare increased security at
London’s Guildhall in October 2009 where a
cancellation of orders or a deferment in delivery
airports worldwide and this effect was magnified
record number of 322 members and guests
until the future looked brighter.
by the media showing pictures of long queues
enjoyed a celebratory lunch.
its 60th anniversary by hosting a lunch at
The business sector of the industry was also
at airports with consequent aircraft delays. The
hit with less demand for executive travel. One
latest was the – fortunately failed – alleged
US company, which had been expanding its
attempt by a Nigerian passenger on an American
the interests of
operations at what seemed an alarming rate,
aircraft about to land in Detroit from Amsterdam.
commercial aviation
announced in January that it was laying off
It appears that this man was carrying a device
companies, particularly
495 pilots and cancelling a large order for new
which could not be detected by the current
in the aircharter
business jets.
x-rays made on passengers. This has now led
industries and markets. Membership is around
Passenger charter traffic generally worldwide
to airports round the world having to invest in
135 companies, including airbrokers, charter
has suffered severely as has the movement of
very expensive new detection equipment which
air cargo. The downturn in passenger traffic
hopefully will be effective. But every time there
airlines, airports, business aircraft operators,
was not helped by the failure of several UK
is an incident and airports upgrade their search
tour companies, culminating in the collapse
machinery, the worldwide terrorist movements
theBaltic March 2010 www.thebaltic.com
BACA represents
freight forwarders, consultants and others. See www.baca.org.uk for further details.
25
Baltic briefing
Arbitrary success As the LMAA celebrates its 50th anniversary, John Maskell looks back on a lifetime’s involvement with the Association
M
y earliest introduction to the LMAA
Early days
judicially was expected to advocate the case on
came in 1965 when, as an articled
Arbitration had always taken place, usually
behalf of their appointor, especially if the case
clerk in Norton Rose Botterell &
between brokers on the Baltic Exchange. If there
went to an umpire. The arbitrators would meet,
Roche, I was taken to an arbitra-
was a dispute the shipowner would appoint
often in the evening, with a stack of cases where
tion in the Institute of Chartered Shipbrokers’
his broker and the charterer his; they would
the two were involved and they would sit down
Chamber at the back of the Baltic Exchange.
meet (probably over a drink or three) to see if
and work through them methodically, reaching
This introduction was one of the factors that led
they could resolve the problem. If they failed,
joint decisions in most cases and then issuing
me into the maritime field rather than commercial
they would call in a third for a good lunch who
short awards.
law, which I told my interviewing panel when
would make the decision and the two originally
applying for articles.
appointed arbitrators would act as advocates
My second introduction came a few weeks
for their respective appointors. What caused
Changing the system
later when somebody came to the office and
the change to the system we recognise today?
There were one or two problems with this
asked for a copy of the London Rules. These
I would suggest that it was the existence of the
system. In one case, one of the arbitrators – an
Rules were the precursor of the present Terms
full time arbitrator. Of the original members of
engaging personality, but not beyond a little
and had been drafted by Noel Davies (a former
the LMAA, most were part timers who also ran
skulduggery – suddenly introduced an argument
partner of Norton Rose) for the then members
their own broking companies; this was certainly
that had never been mentioned before and
of the newly formed LMAA. I cannot, therefore
true of such people as Clifford Clark and Ralph
also some documents that had never been
claim to be in at the birth of the LMAA, but came
Kingsley, but there was an embryonic core of
disclosed. I am not certain whether the decision
on the scene soon after. From then on the story
dedicated arbitrators such as John Chesterman,
went in my clients’ favour or not, but I was a little
of the LMAA is well known to me.
an ex-broker and Dick Clyde, a retired solicitor.
perturbed at the way things were done.
It is difficult to remember how much the
Later, the famous Cedric Barclay, a shipowner of
On another occasion, there was a case being
maritime field of law has changed in the last
Turkish extraction and Donald Davies, a mariner
dealt with on documents alone. There were two
50 years. London had always been a leading,
turned barrister and later P&I Club representative
points. On the first, I had advised my clients that
if not the leading maritime centre, but even
also offered their services on a full time basis.
they were rock solid, but the second was much
allowing for this, the Commercial Court sat as
For my first year or so in the maritime world,
more arguable. It was with immense surprise
and when required with one dedicated judge
if I had a charterparty dispute I would prepare
that I learned I had lost on the first, but won the
dealing with commercial summons on Friday
something equivalent to a brief for Counsel and
second. When I saw the reasons, I saw that,
morning. Compare that with the Court’s high
send it off to the arbitrator whom I had appointed.
once again, evidence had been accepted at the
spot with at least eight dedicated judges in the
My opposite number would do likewise and we
hearing that was factually wrong, and that my
1990s. This explosion of work was in part due
would then wait until we were told the decision
clients had not been afforded the opportunity to
to the existence of the Special Case (a particular
was ready. No appointment fee was paid.
present the true facts.
procedure of appeal in arbitration) and to the fact
There were no interlocutory charges. A simple
It was clear that the old system was not
that more people seemed to want their disputes
award was issued, without reasons in many
working as well as it should and I decided to
decided by arbitrators. How was it that this new
cases or with privileged reasons. The arbitrator’s
advocate some cases myself. I was not alone
body was able to contribute so much?
fees were subsumed within the costs of the
in this, as gradually a number of solicitors also
award. Most parties regarded the arbitrator as
decided that they were quite capable of handling
“their” arbitrator who, although expected to act
the smaller disputes. I suspect we were all a little
26
theBaltic March 2010 www.thebaltic.com
Baltic briefing nervous of how the arbitrators would react, but
the CSSR, France, USA, and Germany and
less rigid approach to the banning of appeals,
we need not have worried. All of them made us
many others. The only notable absentees were
is a personal choice, but there is no doubt
feel very welcome and I think that some were
the Chinese, which was a pity given the support
that the increasingly professional approach of
indeed relieved. Our inexperience was accepted
they have given recently. It was a prototype of
the LMAA over the past 50 years has led to
and we were gently but firmly guided into the
the very successful Congresses that took place
courts interfering less in arbitrations. Indeed,
right way of doing things.
over the next few years.
the number of retired judges who have joined the LMAA as full members is a testament to the fact that there has been a sea change from
The social side
Capacity troubles
the somewhat informal approach of the early
It was at one early hearing that I saw what the
As the increase in the workload of maritime
founders of the LMAA. Fifty years ago I suspect
arbitration lunch really meant. Normally the lunch
solicitors developed in the late 1960s and
no retired judge would have even considered
took place at the Baltic Exchange and would
the early 1970s, it was clear that there were
applying for full membership.
often consist of what was called “the arbitrators’
insufficient arbitrators, and the increasingly
lunch”. Potted shrimps, smoked salmon and
professional approach that was being adopted
some wine, Piesporter, if Dick Clyde was buying,
meant that it was becoming increasingly difficult
Looking back
with some cheese and biscuits to follow was
to be a part-time arbitrator. It was also a
I have said a little about some of the personalities
the least one was offered. The lunch period
major complaint that some of the fashionable
of the early days. I think that with the death of
might exceed an hour, but not by much, and I
arbitrators were too busy and delays were
Clifford Clark last year, all the founder members
would still maintain that many of them did have
becoming so lengthy as to be scandalous.
are no longer alive. Many of my contemporaries
a useful function. All arbitrators insisted that
This problem was only solved in 1984 by the
will have different memories of those early
the parties sat together at one table and it was
introduction of cancellation fees, later changed
members and I suspect in these politically
surprising how many cases were settled before
to booking fees, which diminished the size of
correct times some of the attitudes of some
conclusion, especially if the clients were present.
the log jam.
of the members would cause eyebrows to be
Commercial men who had spent the previous
raised. They were without doubt their own men.
two years snarling at each other, either directly
They obviously managed to make more right
or through their lawyers, often found that they
A Special Case?
decisions in every sense than wrong ones or the
had interests in common and once they had
The other area of complaint was the misuse
Association would have folded years ago.
started talking, they often followed through to
of the Special Case. This was a procedure by
This is very much a personal recollection, but
a settlement.
which one could appeal an arbitration award
I look back with fondness to those days when I
Interestingly, I am not certain cases lasted
on a point of law. As more and more lawyers
was starting out, very green and with very little
any longer in those days and in many cases
became involved in arbitration as opposed to
practical experience of the maritime world. Little
were somewhat shorter than those which I
brokers, more and more parties realised they
did I know that I would end up as a full member
have seen in my arbitral career, where the prime
could avoid the fatal day when they had to
of the Association and performing the tasks
object of many lawyers seems to be to keep the
satisfy an award, by asking for the award to be
which my illustrious predecessors did. In spite
time sheets filled and the bean counters in the
stated in the form of a Special Case. This meant
of criticisms of the Association that occur from
accounts’ departments happy. Of course, there
that the tribunal made findings of fact that were
time to time, it has survived for 50 years and
were clients who could not see the purpose of
unappealable and then posed the question to
is still a major force in the arbitral world. The
such feasts and there must have been cases
the Court as to whether, on the facts found,
people mentioned herein have all contributed in
of abuse, but they were much maligned and
A or B was correct. There has been a marked
no small way to the success of the LMAA and
frequently achieved much at comparatively little
shift in attitudes to arbitrators by the Courts over
their successors in a very different world have
cost.
the past 50 years. Notwithstanding the fact that
adapted to a very different form of arbitration
The other social event was the Annual Dinner.
Lord Denning often used to attend the Annual
from the one I saw when I started. Many others
There were only about 15 active members and
Dinner and say how marvellous arbitrators were,
will have their own stories and memories and will
after some years it was felt that this was too
his judicial pronouncements did not always
look back to those lovely days when maritime
much of an imposition on the full membership.
back up those views. A clear example of this
law was fun and the timesheet was not the be
A new category of LMAA membership, the
occurred in the early 1970s when some of the
all and end all of life.
supporting member, was born, primarily to
arbitrators decided that the way to stop the
ensure that the cost of the Annual Dinner was
abuse of the Special Case procedure was to
To mark its 50th anniversary, the LMAA
more evenly spread, but it had the beneficial
require the defendant party asking for this to
will host a major conference at the newly
effect of widening the influence of the LMAA,
provide security for the claim. This view was
renovated Old Museum in Guildhall, London
and supporting members have had an increasing
supported by Kerr J. but was overruled by
on 18 March. The conference will be followed
status in liaising with the full membership over
Lord Denning in the Court of Appeal and so
by a celebration dinner (incorporating the
matters such as new Terms and cost issues.
the abuse went on until the procedure was
LMAA Annual Dinner) in Guildhall’s Great
Finally, on the semi-social side, it would be
abolished in the 1979 Act. The 1996 Act has
Hall.
impossible to cover the events of the early years
caused an even greater change in the attitude
of the LMAA without dealing with the creation of
that the judiciary has adopted to arbitrators,
ICMA. Although the original delegates state that
since it is very difficult for arbitrators’ decisions
it was created in Moscow, for most of us the first
to be appealed. Whether one wants marginally
real Congress was in Athens in 1974. It was well
incorrect law to go unchallenged for the sake
attended by delegates from all over the world,
of certainty or whether one wants a somewhat
theBaltic March 2010 www.thebaltic.com
27
Baltic briefing
Sporting contacts There are many sports clubs associated with the Exchange and in most cases they are open to both members and staff of member companies Baltic Association Football Club
Lawn Tennis Club
Sub-Aqua Club
Mr S Calafti
Mr N D F Hubbard
Lorraine Burns
Anglo Greek Chartering
Galbraith’s Ltd
The Baltic Exchange
The Baltic Exchange
Bridgegate House
38 St Mary Axe, London EC3A 8BH
38 St Mary Axe, London EC3A 8BH
124-126 Borough High Street,
Tel: +44 (0) 20 7369 1638
Tel: +44 (0) 20 7283 9621
London SE1 1BL
E-mail: lburns@balticexchange.com
Tel: +44 (0) 20 7378 6363
Cricket Club
Young Baltic Association
Jamie Freeland
Sailing Association
Bill Lines
AM Nomikos
Simon Cox
The Baltic Exchange
4th Floor
Howe Robinson Shipbrokers
38 St Mary Axe, London EC3A 8BH
40 Grosvenor Gardens, London SW1W 0EB
77 Mansell Street, London E1 8AF
Tel: +44 (0) 20 7369 1653
Tel: +44 (0) 20 7457 8421
E-mail: blines@navigatepr.com
Golfing Society
Tel: +44 (0) 20 7488 3444
Chris Cox, c/o Frank Symons Ltd Devonshire House 146 Bishopsgate, London EC2M Tel: +44 (0) 20 7377 5423 E-mail: info@balticgolf.co.uk
Key Baltic Exchange contacts Management
Head of Finance
Membership Manager
Tel: +44 (0) 20 7283 9300
Duncan Bain
Jackie Harrison
Fax: +44 (0) 20 7369 1622/1623
Tel: +44 (0) 20 7369 1627
Tel: +44 (0) 20 7369 1633
VPN 171 2000
E-mail: dbain@balticexchange.com
E-mail: jharrison@balticexchange.com
E-mail: enquiries@balticexchange.com
Government Broker
Marketing, Events and Room Hire
Chief Executive
Pat Swayne
Crispin Eccleston
Jeremy Penn
Tel: +44 (0) 20 7369 1668
Tel: +44 (0) 20 7369 1654
Tel: +44 (0) 20 7369 1624
Fax: +44 (0) 20 7623 6644
E-mail: ceccleston@balticexchange.com
E-mail: jpenn@balticexchange.com
E-mail: pswayne@balticexchange.com
PA to Chairman and Chief Executive
Dispute Resolution
Willy Lyth
Barrie Wooderson
Tel: 020 7369 1625
Jill Bradford
Tel: +44 (0) 20 7369 1674
E-mail: wlyth@balticexchange.com
Tel: +44 (0) 20 7369 1621
Fax: +44 (0) 20 7623 6644
E-mail: jbradford@balticexchange.com
E-mail: bwooderson@balticexchange.com
Baltic Exchange Charitable Society
Communications
8 Eu Tong Sen Street
Bill Lines
#17-87 The Central
Richard Butler
Tel: +44 (0) 20 7369 1653
Singapore 059818
Tel: +44 (0) 20 7283 6090
E-mail: blines@navigatepr.com
Tel: +65 6377 0654
Freight Market Department
The Baltic Exchange (Singapore) Philip Williams
E-mail: pwilliams@balticexchange.com
E-mail: richard.butler@baltic-charities.co.uk
Baltic website: www.balticexchange.com
28
theBaltic March 2010 www.thebaltic.com
Logbook
The tanker race Ambrose Greenway looks at some of the larger Greek tankers that dominated the post-war period
G
reek shipowners had traditionally operated in the dry cargo tramp trades but this position began to change after WWII when their atten-
tion was drawn to the increasing demand for Middle East crude oil to feed the hungry industries of North America and Europe, where many new refineries were under construction. Up to that time the tanker market had been the preserve of the major oil companies, who not only operated considerable fleets of their own but also chartered in ships from independent Scandinavian owners, mainly Norwegian. However, the dominance of that country was soon to come under increasing threat once many Greek owners started to
Atlantic Emperor
order new tankers. Many of these were already well established but leading the field were two
part of shipping legend but would also deliver a
starting with four ships of 18,000 dwt, of which
new entrants from non-shipping backgrounds,
sharp shock to the oil majors.
Onassis’ Olympic Games was the first, followed by Atlantic Prince, Atlantic Princess for Stavros
Aristotle Onassis and Stavros Niarchos, whose
The first orders for new Greek tankers were
intense rivalry and ultimate financial success
placed with Bethlehem Steel for delivery between
Livanos and World Peace for Niarchos. The
would not only make them household names and
1948 and 1950. These comprised two series
second comprised five larger 28,000 dwt units, all for Onassis and illustrated here by Olympic Star completed at Sparrows Point in October 1949. It is worth recording that four months after the delivery of the final ship, Olympic Thunder in May 1950, the 16,325 dwt London Pride, first of a number of smaller Greek motor tankers, was completed on the Tees for London & Overseas Freighters. Olympic Star went to breakers in Taiwan in 1973. Concurrent with the above orders, Newport News Shipbuilding & Drydock Co completed 11 27,000 dwt ships to an Esso design of which the fifth was completed as Livanos’ 27,000 dwt Atlantic Emperor, shown here transiting Suez in ballast. She was broken up in Taiwan in 1972.
Olympic Star
theBaltic March 2010 www.thebaltic.com
29
Logbook
Tina Onassis
World Gratitude
Named after his wife, Onassis’ supertanker
Niarchos split his orders between American
followed by others, including Costas Lemos who
Tina Onassis was delivered by Howaldtswerke,
and a number of European yards. Completed
took delivery of the conventional-looking 38,600
Hamburg towards the end of 1953. At just over
in March 1954, World Gratitude was the first of
dwt Chrysanthi L from Kawasaki Dockyard in
46,000 dwt, she was the largest tanker in the
a quartet of 32,600 dwt ships built in Kiel by
June 1955. The similar-sized Largo, completed
world until eclipsed by Ludwig’s ore-oil carrier
Howaldtswerke. Photographed leaving the Bitter
by the same yard 17 months later, was the
Sinclair Petrolore in 1955 and set new standards
Lakes in the Suez Canal during her first year of
first large Greek tanker with all accommodation
of elegance, both externally and internally. Seen
operation, she was lengthened and deepened
aft, a concept pioneered by Johnson Lines’
passing Kabrit signal station northbound in the
10 years later, deadweight capacity being raised
Oceanus two years earlier, and one which Lemos
Suez Canal, she fell prey to the oil price hike in
to 44,650 tons, and her sisters were treated
continued with a number of subsequent tankers
the 1970s and was scrapped in Taiwan in 1975.
likewise. She was broken up in Scotland in 1974
and ore/oil carriers. Seen here calling at Las
A slightly larger sister Al-Malik Saud Al Awal
and two of her sisters were later converted to
Palmas for bunkers, she was laid up in Piraeus in
was registered in Saudi Arabia as part of a deal
storage tanks.
1976 and demolished in Taiwan two years later.
negotiated by Onassis to transport Saudi crude.
John Carras was the first Greek owner to
Aware of the advantages of economies of
This so annoyed the major oil companies that
order tankers in Japan and his example was soon
scale, Niarchos and Onassis had vied with each
they blacklisted his ships but he had the last
other for ownership of the largest Greek tanker
laugh when the Suez Crisis closed the canal in
throughout most of the 1950s but in 1959 the
1956 and his unemployed tonnage was quickly
former’s 71,300 dwt Princess Sophie put the
snapped up, earning him millions in a matter of
matter beyond doubt. By then, however, the
months.
question was academic as the overall title had
Photographed outbound off Cowes IOW after
passed to the 100,000 dwt Universe Apollo
delivering her cargo of crude to Esso’s Fawley
owned by that other great independent tanker
refinery, the 29,400 dwt John PG was one
owner D K Ludwig. Launched by Queen Frederica
of five turbine-driven sisters delivered to the
at Bethlehem’s Quincy yard on 15 November
Goulandris family’s New York subsidiary Orion
1959 and completed the following March with
Shipping & Trading by Bethlehem Sparrows Point
Niarchos’ traditional grey hull, Princess Sophie
in 1953/54. The lead ship of the series was Gulf
was designed to carry oil from the Middle East
Oil’s Las Piedras and Livanos also received the
to the US West Coast. She was switched from
Eugenie Livanos. John PG went to Taiwanese
Greek to Liberian registry in 1974 and was broken
breakers in 1974 after just 20 years in service.
John PG
30
up in Taiwan in 1977.
Largo
Princess Sophie
theBaltic March 2010 www.thebaltic.com
Baltic comment Michael Grey
Ship valuation science or art? H
ow long is a piece of string? If you
among people of his profession, with people
can answer this, without turning to
who specialise in undertaking specialist and very
sarcasm or philosophy, maybe you
expensive casting repairs following the voyages
could give me a value on a 1991
these ships undertake with intensity and enthusiasm, ready to offer instant quotations.
suezmax, with three careful owners. I have enormous admiration for those quick-
There is a similar pessimism lurking in the
witted brokers who work in the sale and purchase
heart of the master mariner, who, being well-
world, but have had a lifelong blockage in any
read and with a retentive memory, recalls the
understanding of how they can provide a precise
enormity of the salvage award after the ship
value for a ship. I thought of this recently, when I
had been washed up on a particularly rocky
read that a major shipbroker was going to return
coast, albeit under a different name, some years
to the ship valuation business after sensibly
previously. The marine surveyor, who is also
opting to stay well away from this cesspool and
interested in the latent structural strains of this
destroyer of reputations, after the 2008 crash
earlier contretemps, is more concerned with the
had broken everyone’s dreams.
state of the ballast tank interiors, having had a
“Value? It is what we believe somebody
Michael Grey
beer the night before with a chum who works for the vessel’s classification society. He knows that
might pay for it.” Now there is an honest person speaking, in contrast to those who suggest it
answer with a shrewd assessment of how much
for some owners, beauty might be in the eye of
is a determination of a price plucked out of the
the owner will be prepared to pay.
the beholder, but such may be but skin-deep.
ether, assisted by druidical incantations over the
The owner may want the ship for a number
So perhaps anyone who is bold enough to
entrails of a goat, backed up with differential
of different reasons. He may have the promise of
give a valuation on something as complex as
calculus, rounded off with a couple of neat, but
business for it, which will give him a reasonable
a large ship, deserves a medal for his or her
totally incomprehensible phrases about liability
return, but the urgency of the case may have a
courage in the face of considerable odds. Of
collected from the company lawyer.
tremendous influence on his assessment of the
course, in an environment as volatile as the
People used to say that when a Greek
ship’s “value”, being the price he is prepared to
shipping market, where memories are short
looked at a ship, he regarded it in different way
pay. He may (although unlikely in the present
and hope springs eternal, the chances are
to any other man. I wouldn’t dispute this at all,
state of the market) want this ship at any price,
that the value of a ship one week will be barely
but suggest that the nationality of the onlooker
or, on the other hand, he might believe he can
recognisable the next. Stability in this business
was secondary to his occupation. A shipbroker,
get it cheap, and hold it as an asset until some
is probably unknown, which if nothing else, is
a shipowner, a marine engineer and a master
mug wants it more than he does.
a tremendous face-saver, after the new chief
mariner, along with a surveyor may stand on the
The other spectators on the quayside are
engineer staggers up the ladder and informs
quayside, looking at my 1991 suezmax, placidly
more likely to weight their answers with more
the new master that the engine is shot to bits,
swinging around its anchor in the roadstead.
technical considerations, and however much the
an e-mail from the expected charterer’s broker
How much is it worth? The bank manager, who
owner might wish to hoist his houseflag on the
reveals that he has changed his mind, and Port
has been entreated to lend money on this ocean
mast of the unsuspecting vessel, he would be
State Control telephone to say that the ship has
greyhound, wants to know, and you need to
well advised to listen to their specialist take on
been detained.
provide answers, not philosophical statements.
the notion of value.
The trouble is that your bankers and
But each of these professionals is likely to give
The marine engineer may well hazard a
accountants insist that the value of your ship,
you an answer different by millions of dollars
guess that the consumption figures offered by
and your fleet, and even your “goodwill” (how
to the others. To a certain extent this will be
the seller are rich in artifice and imagination.
ephemeral is that?) is ascertained on a regular
decided by knowledge and experience. The
He has yet to set his eyes upon the well-used
basis. It may not be art, it is difficult to define as
broker looks at the sort of money that has been
engine and auxiliaries that propel the vessel, but
science. Would science-fiction be an appropriate
paid recently for other ships of that vintage, and
he knows that it is driven by a type of machinery
category in which to place this curious business
what is also on the market, but also weights his
that has enjoyed a somewhat dubious reputation
of valuation?
theBaltic March 2010 www.thebaltic.com
31
Linking strategy, operations and IT Learn more from our video at www.bassnet.no Maintenance Procurement Operations Document management Safety management (SAFIR) Risk management Self assessment (TMSA) Crew/HR management Payroll Accounting Report Generator
BASS at APM 2010: Visit us at Stand 3G24
State of the market Tanker Update
Too soon to celebrate? An optimistic beginning to the year for the tanker market – but there could still be hard times ahead
A
s the world economy seems to be
other tankers were ordered in the first month
heading for recovery, tanker own-
of 2010; again all sub-aframax size. There
ers and analysts expect to see oil
was, however, considerable activity on the
consumption – and therefore tanker
S&P market, with Platou commenting that:
demand – on the rise throughout 2010 and
“we have seen more activity than in a very long
2011, although demand is not expected to
time and new benchmarks are set in many
return to pre-slump levels until at least 2012. An
segments”. This was probably due to the pick-
unusually cold winter in Northern Europe and
up in freight rates over the course of the month,
the USA has boosted demands for heating oil
the brokerage said.
and briefly sent tanker rates soaring in January.
Demolition prices rose sharply at the end
However, given projected overcapacity and high
of 2009, from $275 per tonne in November to
delivery levels over the next few years, this
$315 per tonne in January in the Far East, and
does little to brighten what is still a fairly gloomy
from $330 to $400 in the Indian subcontinent.
outlook.
With 0.69 million dwt removed from the tanker market in January – one VLCC and 12 smaller tankers – it seems owners are taking advantage
Challenging and volatile
of the high prices.
In its annual tanker outlook, published at the end of January, McQuilling suggested that while the shipping market is still in the downward stage of
Building for the future?
its cycle, it was likely to reach the bottom “a bit
The suezmax sector was attracting a lot of
faster and [at] a lower minimum than in previous
attention towards the end of last year, following
cycles”, and warned that excess tonnage supply
reports just before Christmas that Almi had
would continue to challenge a recovery in freight
placed an order for 10 suezmaxes with Hyundai.
rates, even as oil demand picks up, with a net
The deal was said to be worth some $650
increase in tonnage across all sectors. “2010
million, with the tankers due for delivery between
and beyond will most certainly be challenging and volatile,” the company warned.
2011 and 2013. sector dodging the overcapacity bullet by means
Stena Bulk confirmed that it is to order
of cancellations. Some 54.6 million dwt is slated
two suezmaxes from Samsung shipyard. The
for delivery in 2010, of which 21 million dwt are
two 158,700 dwt vessels will be the largest
On schedule?
VLCCs, and 15.8 million dwt are smaller tankers,
tankers in Stena Bulk’s fleet when delivered in
While some 18% of the tanker tonnage scheduled
ie below aframax size.
2011. The order also included a option for two
for delivery in 2009 was not, in fact, delivered,
sister vessels. Both vessels will be employed
there is none of the uncertainty surrounding bulk
in the Stena Sonangol suezmax pool, run in
carrier contracts and newbuildings. According
S&P picks up
partnership with the state-owned Angolan oil
to Platou, most of the non-deliveries were the
Platou reports two orders for VLCCs placed
company Sonangol. The pool consists of around
result of negotiated postponement, with delivery
in January this year – possibly owners taking
15 tankers, which will be expanded to about 25
in 2010 and 2011. There is thus little hope of the
advantage of lower building prices. Just five
large tankers over a three-year period.
theBaltic March 2010 www.thebaltic.com
33
State of the market S&P
All change Basil M Karatzas, managing director for projects & finance with Compass Maritime Services, looks at vessel valuation methodology in a changing world
T
he history of the maritime industry is a
of a new owner. Placing an appropriate value
present market value is related to the cost of
long and illustrious one, and strongly
on vessels is an academic exercise, but, in this
“replacing” or having the vessel “rebuilt” and
correlated with the developments of
case, it is also a practical matter. Given i) lenders
“restored” to its present state. This method is
the human race. The progress of the
unwilling to underwrite nothing less than very
mostly applicable to vessels that are purpose-
maritime industry, the primal disseminator of
strong credits, ii) the cost of equity increasing, iii)
built, transact fairly infrequently and where there
information and undisputable mass conduit of
an orderbook level that is projected to multiply
is a lack of sufficient commercial information.
international trade since historical times, has
the size of the fleet of certain types of vessels in
The principal critique of this method is that it
been based both on the technological innova-
the coming years, and iv) a projected demand
is retroactive (historical) and assumes that just
tions of shipbuilding and naval architecture over
for cargo transport rather imperiled in the near
because a vessel cost a certain amount to build,
the centuries (ie building bigger, safer, more
and intermediate future, placing the “right” value
a buyer would actually pay a similar price. On the
economical and specialised vessels) but also on
on vessels might hold the key to clearing the
other hand, the replacement cost method, with
the establishment of sound commercial prac-
excesses of a burst bubble and starting the
all its embedded imperfections, indicates that
tices, not least of them the progress of financial
new cycle on a more even keel. If world trade
the market value of an asset cannot substantially
innovation.
is to continue increasing in the decades to
vary from what it would cost to replace it. If there
come, shipowners will have to be compensated
is a major dislocation in the secondary market in
sufficiently for the risk of their investments, and
terms of pricing, a similar vessel can always be
Accelerating change
financiers will have to be ensured that they
“built” anew, or so the logic goes.
While naval architecture and marine engineering
will receive their principal repayments with fair
have progressed over the last couple of decades
compensation throughout the business cycle.
Market Comparable Approach
to the extent that now they are taken for granted,
This means that placing a value on vessels is
The Market Approach is the most popular
the magnitude, and possibly the significance, of
becoming a crucial but nevertheless sensitive
valuation method. Put simply it is based on the
events in the commercial aspect of the maritime
assignment.
most recent similar transaction, or ideally set of
industry in the last few years has dwarfed those
transactions. The strongest argument in favour
of previous business cycles.
of this valuation methodology is that what a
What is value?
buyer paid for the acquisition of a similar asset is
the growth of world trade and the subsequent
When referring to the “value” of an asset, a
simple and “tangible”; no more or less than the
monumental increases in freight rates, and
vessel in this case, the generally accepted
price last time a similar asset was transacted.
in turn vessel asset prices and the multiplier
definition of the value refers to the price at
Although such a method (also known as “last
effect on vessel orderbook, has bequeathed
which a “willing buyer” and “willing seller” at
done” method) is as pure as it gets, the devil
us recently with commercial, financial, legal,
an “arm’s length” transaction “cognisant of all
is in the details. What if the previous deal had
and to a certain extent, regulatory issues that
relevant facts” and under “no compulsion to act”
happened six months ago, in which case,
require urgent but fair and practicable answers.
would agree to exchange the vessel alone in a
freight, financial and asset markets may have
For instance, the outstanding vessel orderbook
prompt manner. This definition is normally called
changed substantially? What if the previous
has a nominal contract value of as high as $500
the “Fair Market Value” (FMV) of the vessel.
transaction was for a vessel of the same class,
billion, by some estimates, while only part of
Although there are several variations on this to
but 10 years older? There is a great degradation
this orderbook has in place sufficient equity
accommodate for certain intricacies, there are
of asset pricing within the same asset class
and debt commitments for contract fulfillment.
three main valuation methods that have been
by vessel age, and thus a “significantly” newer
With anaemic freight markets and possibly still
academically arrived at, but also have sustained
or older vessel would not exhibit the same
dysfunctional financial markets, there is great
the test of the commercial applicability:
desirability. What if the seller was keen to accept
In particular, since the beginning of 2004,
uncertainty over the true value of still-to-be-
a lower payment for a prompt transaction if they
financed contracts, vessels under construction,
Replacement Cost
were in financial dire straits? The definition of
and also vessels already on the water in search
The guiding principle of this method is that the
Fair Market Value quoted above clearly states a
theBaltic March 2010 www.thebaltic.com
35
Internet-based and interactive tools & databases for shipping and chartering professionals - Market Positions - Fixtures - Daily News - Orderbook / Sales - Owner / Operator Info - Market report - Voyage Estimator - Vessel Manager - Cargoes Manager - Fixtures - Port library - Distance Table - Support any vessel database - Data migration - Sales / valuations and enquieries - Commitments - Integration with MS Outlook - Complete AHTS/PSV database - Data migration - Sales and valuations - Market Positions and Fixtures - Integration with MS Outlook * For brokers only ! - Complete crude/clean spot market - Real time position lists - Controlled fleet - Voyage Estimator - Distance Table
Your complete commercial chartering information solution
www.axsmarine.com Paris +331 53 43 05 70 | Singapore +65 6225 3115 Commercial@axsmarine.com | Support@axsmarine.com
State of the market S&P transaction under “no compulsion” and a seller
Tanker Vessel Type
experiencing financial difficulties is keener to take compulsory action. Despite the shortcomings of this valuation approach, it is difficult sometimes to argue otherwise when there is an example of a similar transaction that happened recently. The Baltic Exchange Sale & Purchase Assessment (BSPA), published weekly, is strictly based on the market comparable approach for
Dry Bulk Type
AFRAMAX Tanker (105,000 dwt)
VLCC (300,000 dwt)
PANAMAX Bulker (70,000 dwt)
CAPESIZE Bulker (170,000 dwt)
Market Approach (FMV)
$52.00
$96.00
$40.00
$65.00
Replacement Cost
$50.00
$94.00
$35.00
$55.00
Income Approach
$46.00
$91.00
$42.00
$105.00
Valuation Method
Note: Values in US$ millions for vessel delivered in January 2010. Author's estimates, without prejudice
five-year old vessels in both the tanker and dry bulk markets. For the benefit of full disclosure,
“Hamburg Rules”, specific guidelines provided
raw material, and iron ore in particular. In other
our company, Compass Maritime Services, is
by the Hamburg Shipbrokers’ Association for
words, if the average freight rate for capesize
a panel member of the BSPA. Additionally, as
applying the income approach method.
vessels over a newbuilding’s economic life were
a rule of thumb, standard loan agreements with
to equal the average of the last 10 years, then
Loan-to-Value (LTV) clauses usually stipulate
capesize vessels are strongly undervalued by
that the Market Comparable Approach is to be
Comparing like with like?
the replacement cost and market comparable
utilised for determining the value of the vessels
For terms of comparison, the above table
approaches.
for loan purposes.
provides the author’s assessment, with no
There is usually no definite and easy
prejudice, of the value for four types of prompt
agreement of the value of an asset or a vessel
Income Approach
resale vessels in both the tanker and dry bulk
in advance of originating a project. It usually
From a financial perspective, if one were to
sectors, based on each valuation method.
takes the liquidation of the investment after
acquire an asset as an investment, what would
For the Income Approach, standard industry
the projected investment horizon to definitely
be a fair price to pay in order to acquire the
assumptions were utilised in terms of operating
determine whether the price paid for the vessel
asset, a vessel in this case? Apparently, no more
expenses,
mortgage
was close enough to her intrinsic value. Similarly,
than the expected cash flows the investment
financing with 15% discount rate was applied;
there cannot be complete agreement on the true
(vessel) would generate, properly adjusted to
as a proxy of future freight rates, the average
value of a vessel, especially in such illiquid and
reflect the amount of risk undertaken, the cost
one-year timecharter for each type of vessel for
uncertain times as these. Value is intrinsic and
of financing and the opportunity cost. The
the (approximately) past 10 years was utilised.
ultimately is a measure of whether an investment
importance of this method is that a “rational”
Each methodology renders a fairly similar result
has achieved its projected profitability and
investor would seek intrinsic “value” instead
for each type of vessel, with the exception of
objectives.
the current market “price” of the vessel, a clear
capesize vessels. The sizeable aberration for this
subtlety in terminology that has made fortunes
value is a reflection of the historically high freight
Website: BKaratzas@CompassMar.com
for investors in many an industry besides
rates of the last 10 years, which included the
E-mail: Basil@BMKaratzas.com
the shipping industry. As with each valuation
super-cycle and China’s insatiable appetite for
Tel: +713-545-5990
and
also
traditional
methodology, the income approach is also subject to limitations and interpretations. How much profit a vessel would generate over its remaining life depends on many factors such as freight rates and the financial cost of owning the asset. For a buyer, the implicit assumption is that freight rates would be sufficiently high (otherwise, they would steer clear of the acquisition); however, it is also a case of getting the future “strength” of the freight market fairly accurate since another, more optimistic, buyer would offer and acquire the vessel at a higher price. Similarly, the cost of owning and operating the vessel entails fine assumptions on the availability and competitiveness of financing and vessel operating expenses. It’s apparent, then, that although the Income Approach is academically the most rigorous among the three valuation methods, it requires an in-depth understanding and projection of a series of inputs both on the revenue and the expense side of future income statements. And such inputs, when projected over the vessel’s total economic life, can have a material impact on the value of the vessel. There are several variations on the Income Approach Method, the most notable being the
One vessel, three values?
theBaltic March 2010 www.thebaltic.com
37
18/01/2010
21/12/2009
BCI
arch 2010 www.thebaltic.com
Vanishing act Missing bulkers continues to puzzle analysts
A
t the beginning of 2010, it looked as
particular looked to be entering a new slump,
advantage of the drop in both second-hand
though optimism was gradually return-
with the Baltic Cape Index (BCI) closing on 12
and newbuilding prices, and that move now
ing to the dry market, with reviving
February at 3259 points, posing a loss of -215
seems to be underway. Angelicoussis is said
ore and grain trades again pushing
points or -6.19% below the previous week’s
to be in talks to add a further two capesizes
prices upwards in late 2008. Port congestion,
closing at 3474 points. With the Chinese New
to its existing order book, which comprises at
responsible for at least some of the astonishing
Year responsible for a quiet couple of weeks
least 12 further capesizes. The rate of fall of
leaps in the market back in early 2008, again
at the beginning of the month, however, it was
newbuild prices has been slowing, and may now
played a role in briefly pushing the BCI to above
hoped that activity – and rates – would pick up
be stabilising, prompting more owners to return
8,000 in mid-November. According to Arctic
towards the end of February.
to the market.
Securities, nearly one in five of the world cape-
While this is scarcely a surge of orders,
size fleet, equivalent to 4 million dwt, was caught
according to Platou orders were placed for three
in delays off Australia and Brazil in early January.
Bargain hunting?
capesizes, four panamax and post-panamax
By February, rates in all sectors had been in a
Against this background, some owners are
bulker and 36 handysizes during January, a
continuous slide since the beginning of the year,
cautiously beginning to return to placing orders.
total of 2.3 million tonnes, but it shows that the
indicating that market recovery will continue to
Brokers have long predicted that there would
revival of interest in ordering towards the end of
be a long and slow process. Capesize rates in
be a move by established shipowners to take
last year is continuing. Other owners are looking
Baltic Exchange capesize index 8,000 7,500
Index
7,000 6,500 6,000 5,500 5,000 4,500 4,000
BCI
Capesize rates peaked in November, but have been steadily declining
38
theBaltic March 2010 www.thebaltic.com
09/02/2010
22/01/2010
04/01/2010
11/12/2009
23/11/2009
19/10/2009
3,500
05/11/2009
23/11/2009
28/10/2009
State of the market Dry bulk
8,000 7,500 7,000
State of the market Dry bulk 6,500
Index
6,000 5,500 5,000 4,500 4,000
to acquire resale newbuldings – Navios recently
phenomenon further, but are confident that the
cycle, coinciding with the market peaks of 2007
acquired a capesize newbuilding on resale, its
actual number of contracts that has been or will
and 2008, rather than earlier strong rates in
seventh in the past year.
be cancelled is significantly higher,” said Platou
2003-4. As a result, the first major deliveries
analyst Jorn Bakkelund, writing in Platou’s
occurred just as the market was crashing. He,
monthly report.
too, emphasises the uncertainty of how much of
How much to come?
Piraeus-based broker N Cotzias Shipping
3,500 3,000
28
the order book will actually be delivered.
took a more cautious view, estimating that,
Arctic Securities took a particularly gloomy
to which the current order book has been
despite the high degree of delay, only about 10%
view of the situation, announcing in January – at
delayed or cancelled. According to estimates
of the overall dry bulk order book has actually
the same time that it highlighted the effects of
from Platou, 40% of the dry bulk order book due
been cancelled. He puts the total cancelled
port congestion on the cape fleet – that it was
for delivery in 2009 was not delivered according
tonnage at 434 vessels, or 27 million tonnes,
downgrading stock across the entire dry bulk
to schedule (similar delays were seen in the
and says that private resale deals account for
sector to ‘sell’ ahead of what it described as
container market). In Korea, 25% of vessels due
much of the rest of the tonnage. According
a ‘tsunami’ of newbuildings. “Current market
for delivery in 2009 were not, in fact, delivered.
to Cotzias, the pain will be felt mostly in the
momentum can continue boosting dry bulk
Further uncertainty is caused by no-one being
supramax market, which faces a prospect of up
equities in the short run. In our view, however,
quite sure whether these are attributable to
to 116% surplus tonnage by 2015. Despite this,
even the most optimistic longer term market
yard delay, negotiated postponement – in which
however, Cotzias points out increased second-
scenario is reflected in the share prices,” said
case the market faces the prospect of an
hand prices in the supramax market, with an
Arctic analyst Martin Sommerseth Jaer, quoted
unexpected peak at some point in the future – or
almost 7% increase in prices for similar vessels
in Lloyd’s List. “We consider the risk as being on
cancellations.
in just two months time. The capesize fleet is
the downside and hence downgrade the entire
expected to peak at 90% surplus.
sector to sell.”
16 million dwt – 27% – was unaccounted for
Whether this degree of pessimism is
and “a major share of this was most likely
warranted is unclear, but 2010 will still be a year
cancelled”. Platou further estimates that at least
Cautious outlook
10% of the tonnage due for delivery in January
Taking the long view, Martin Stopford of
2010 was not handed over, and only about
Clarksons Research points out that much of the
half of that was confirmed as cancelled. “We
problem was caused by the bulk ordering boom
have unsuccessfully strived to document this
occurring relatively late in the recent shipping
where the dry sector will step very carefully.
www.griegstar.com
Grieg Star Shipping is providing high quality transportation and logistic services for a number of industries for both bulk and breakbulk cargoes. The Star fleet includes more than 40 ships, totalling 1,8 million deadweight tons. Long term commitment, specialized vessels for breakbulk cargoes and efficient and damage free cargo handling are essential to fulfil the high quality demands of our customers. The Star organization is highly skilled and experienced. With 18 offices world wide we provide our customers with excellent service when and where required.
C. Sundts gate 17/19, P.O. Box 1088 Sentrum, N-5809 Bergen, Norway, Telephone: +47 55 23 96 00, E-mail: starbgn@griegstar.com, www.griegstar.com
theBaltic March 2010 www.thebaltic.com
23/11/2009 BCI
theBaltic March 2010 www.thebaltic.com
What no-one is sure of, however, is the extent
Of its own order book, Platou says some
28/10/2009
28/09/2009
01/09/2009
04/08/2009
2,500
39
State of the Market BIMCO update
Documentary matters A round-up of the most recent developments; dealing with piracy, stowaways, pooling agreements and more
A
t BIMCO’s Documentary Committee
98 revisions have been made with the aim of
on the timecharter edition. The key difference
meeting in Copenhagen in November
producing a consistent set of documents by
between the two clauses is that while the
the revision of one of BIMCO’s most
using, where possible, the same principles,
vessel is under the orders and directions of the
widely used forms, SHIPMAN 98, was
definitions
charterers under a timecharter and therefore
approved. In addition, new version of the stand-
and
wordings
throughout
the
should bear any costs related to piracy, it was
documents.
ard crew management agreements, CREWMAN
Revision work on all three agreements
felt that in a consecutive voyage/COA scenario
A and B were adopted, along with a number of
has been done in close consultation with the
it would be more equitable if costs were shared
new standard clauses. BIMCO’s documentary
industry and BIMCO owes particular thanks to
between the owners and the charterers.
work programme remains as extensive as ever
the Cyprus Shipping Chamber for their important
with ongoing projects including the development
input throughout the revision process.
The significant difference between the single voyage charter version and the two other
of a standard pooling agreement for the tramp
SHIPMAN 2009 and CREWMAN A & B
clauses is that the owners are not entitled to
sector; a revision of its standard wreck removal
2009, accompanied by explanatory notes, will
invoke this clause if the piracy risk existed at the
service agreements; a green recycling contract;
be published in the February edition of the
time of the fixture.
and work on devising standard clauses for slow
BIMCO Bulletin.
All three clauses were published in special circulars in November 2009 and are available to
steaming, marine risk assessment, and bunkers.
download free of charge from BIMCO’s website
Piracy Clauses
at www.bimco.org
SHIPMAN 98 and CREWMAN
In November 2009 BIMCO published a
The revision of SHIPMAN 98 has been ongoing
revised piracy clause for timecharters and two
for two years and was initiated to take account
additional piracy clauses – one for single voyage
of the changes in shipmanagement practice and
charterparties and one for consecutive voyage
the law to bring this important document up
charterparties and COAs.
AMS/AES Clauses – automated manifest provisions for the US and Canada
to date. The revision has focused on bringing
Generally, the publication of the first piracy
A revised AMS (Automated Manifest System)
greater clarity to the agreement and great
clause for time charterparties in March 2009 was
clause was also adopted at the Documentary
care has been taken not to change the basic
well received by the industry. However, BIMCO
Meeting in November, taking into account new
principles of the agreements.
also received criticism from some quarters that
and harmonised US and Canadian legislation.
Among the key changes are the inclusion
the clause was not as well balanced as it could
The intention is that the clause can be used for
of references to the ISPS Code and greater
be. BIMCO decided to do an early revision
trade throughout North America.
clarity in respect of the relationship between
concurrent with drafting two more clauses for
To comply with the newly implemented
the management agreements and the ISM/
voyage charterparties. A measure of a successful
export rules equivalent to AMS – the Automated
ISPS Codes. The drafters have exercised great
BIMCO clause is that it comes into widespread
Export System (AES) – a draft AES Clause for
care in the amendments to the co-assurance
and common usage in the industry. Primarily
Voyage and Time Charterparties has also been
arrangements and the final review of the
due to the provision in the clause that the vessel
drafted and approved.
insurance provisions in SHIPMAN has been
would remain on hire in the event it was detained
done with the main focus on the issue of the
by pirates, the clause was considered to be
shipmanager’s potential liability for the owner’s
potentially more favourable to owners to gain
P&I Club release calls.
widespread usage by all parties.
Parallel amendments to streamline the
The
clause
for
consecutive
voyage
CREWMAN agreements with the SHIPMAN
charterparties and COAs is closely modelled
40
theBaltic March 2010 www.thebaltic.com
Liberty and Deviation Clause for Voyage Charterparties This
clause,
which
was
also
adopted
in November, has been developed in close
State of the Market BIMCO update cooperation with the International Group of
technical, commercial and legal backgrounds
WRECKFIXED 99. Whilst the BIMCO wreck
P&I Clubs as it concerns important issues in
to ensure that every aspect of the challenging
removal forms are very well established and
relation to what may or may not be a reasonable
task is properly considered and thought through.
used worldwide, the need for amendment
deviation under the terms of Clubs’ cover. The
The aim is to examine the technical and legal
has arisen chiefly in the light of the technical
clause also addresses a charterer’s request for
complexities of implementing such provisions
difficulties and high costs of removing bunkers
a deviation under a voyage charter and what
in charterparties. The needs of the liner sector
prior to other salvage work (such as cargo and
indemnities and insurances should be in place
differ from those of dry cargo and tanker, but
wreck removal).
to cover such an event.
there are nevertheless common elements that
The revision of these forms will be done with
can be embraced by a common clause. The
a view to addressing the above issues but whilst
group will also develop a charterparty clause
retaining their current appeal.
Revised Stowaways Clause for Time Charterparties
suitable for the Virtual Arrival Project initiated
This clause has been one of BIMCO’s standard
terminals by agreeing to adjust the vessel’s
New projects
clauses for many years but an update which
speed en route to the discharge port to match
A new subcommittee has been formed to look
provides a more clearly worded division of
the anticipated berth date.
at the development of a new green recycling
by BP which seeks to reduce waiting time at
The clauses will be designed to reflect the
contract for the sale of vessels for recycling in
fact that there may well be sound commercial
the light of the impending coming into force of
reasons to reduce speed, such as reducing
the IMO Recycling Convention. The contract
bunker consumption/fuel costs and, possibly,
will take into account the new provisions of the
Bunker clauses
to increase demand for tonnage. It will also
Convention such as the Inventory of Hazardous
Work is underway to draft a “suite” of bunker
consider issues such as due dispatch, deviation
Materials, Ship Recycling Plan and certification.
related clauses for use in time charterparties.
and vessel performance warranties. Not least,
The intention is to develop a contract so that
The project will in many ways consolidate various
consideration will be given to the use of slow
it can be used commercially both before (during
clauses produced by BIMCO in recent years for
steaming as part of company environmental
the transitional period) and after the Convention
this purpose and will provide a useful basket of
policies to help reduce CO2 emissions.
comes into force.
obligations and responsibilities was approved at the last Documentary Committee meeting.
Work is also expected to begin shortly on
up-to-date provisions covering this increasingly
the development of a standard lay-up contract.
regulated area.
Marine Vessel Risk Assessment Clause Pooling Agreement
A specialist working group has been reviewing
A specialist working group has started work
the issue to determine how BIMCO may assist
Publication of online forms and documents
on the challenging task of drafting a standard
the industry with the development of a balanced
The
pooling agreement for the tramp sector. The
and generic risk assessment clause for the dry
BIMCHEMVOY 2008, which was published in the
intention is to draft a generic agreement that will
cargo sector. BIMCO feels that it is appropriate
BIMCO Bulletin October 2009, is now available
provide a useful template for those contemplating
to develop a standard charterparty clause for
on idea, together with BIMCHEMVOYBILL and a
entering into pooling arrangements. The working
marine risk assessments that clearly establishes
set of Explanatory Notes. The Explanatory Notes
group is working closely with expert competition
a fair balance between the expectations, rights
to BIMCHEMVOY 2008 provide a clause-by-
lawyers to ensure that the provisions adhere
and obligations of the owners and the charterers.
clause comparison with ASBATANKVOY, which
to competition laws and that recently issued
Drafting is in progress on a clause for time
is the form currently used by the trade, as well
guidelines on pooling agreements by the
charterparties and one for COAs
as a comparison with the recently released
revised
chemical
carrier
charter
Another reason for attending to this issue
ASBACHEMTANKVOY, which is a minor tailored
Work is at a preliminary stage during which
is the fact that there seems to be some
amendment of the ASBATANKVOY form for the
a suitable structure for the agreement will be
misconception on the market as to how exactly
chemical sector.
agreed. This could take the form of an agency
operators such as RightShip operate their vessel
Sample copies of the above new contract, as
agreement or a limited company arrangement or
assessment system. There is a need to underline
well as the explanatory notes, will be available to
an agreement which offered each method as an
that a vessel risk assessment company provides
download free of charge from BIMCO’s website.
option (as many of the core clauses to such an
a dynamic vetting system and that a so-called
agreement will be common to both structures).
European Commission are closely followed.
“approval” is valid only for the point in time in
Susanne Købler Carstens
It is hoped to have a first draft of a standard
which it is requested for a specific nominated
Documentary Affairs Officer
pooling agreement ready to be reviewed by
task, ie, a vessel being nominated for a particular
BIMCO
the Documentary Committee when it meets in
voyage. If the owners have agreed to maintain
Brussels in May.
approval during the period of a time charterparty it can cause significant problems for the owners to face a lowering of the vessel’s rating as this
Slow Steaming Clause
could lead to breach of contract.
Work has begun on this highly topical but complex issue by a group of industry experts. The objective is to draft a set of standard slow/
Wreck Removal Agreements
economical steaming clauses for use by the
Drafting work continues on the revision
general industry. The experts are drawn from
of WRECKHIRE 99, WRECKCON 99 and
theBaltic March 2010 www.thebaltic.com
41
Heavylift Update
Competition intensifies The heat is on
W
hile several sectors in the mari-
D-vessels� (D4 type) this year, with the first to be
Flexibility key for cranes
time industry continue to struggle
delivered in mid August. The others will follow
In a few months time, Seaway Heavy Lifting will
and try to pull back from orders,
in six-week intervals. Under construction at the
take delivery of its $460 million second heavylift
many of those in the heavylift
Ouhua yard in China, all five newbuilds are fitted
crane vessel, the HLV Oleg Strashnov. With an
sector are demonstrating their faith in the long-
with two 400 tonne and one 120 tonne crane.
engineering office in Zoetermeer, the Netherlands,
term prospects by pressing on with orders. 2010
BigLift also has two vessels, the Happy Sky and
Seaway Heavy Lifting is originally a Norwegian/
will see a number of newbuild heavylift vessels
Happy Star, being built at Hazira in India. These
Russian firm, founded by Stolt-Nielsen-Seaway
arrive in the market and certainly the year is likely
two vessels will be equipped with two 900 tonne
A/S and PO Kaliningradmorneftegaz in 1991.
to see competition intensify.
cranes, representing a total lifting capacity of
Willem van der Velde, chief operating officer,
1,800 tonnes. These two will come into service
comments on the reasons why the company
in 2011.
decided to invest in a second heavylift vessel:
Amsterdam-based heavylift operator BigLift Shipping will take delivery of all five of its “Happy
One of the latest deliveries to the heavylift fleet
42
theBaltic March 2010 www.thebaltic.com
Our competitors view
· Global tramp and liner services
· Local experience
· 120 Vessels
· Powerful versatile fleet
· World wide setup - 24 offices
· new wave - lifting capacity up to 900 mtons
• S A L | F U L L - S E R V I C E H E AV Y L I F T S H I P P I N G • A joint venture with
INNOVATIVE TRANSPORTATION AND OFFSHORE S O L U T I O N S
• • • •
VESSELS ISM CERTIFIED ISO 9001 REGISTERED ISO 14001 REGISTERED OHSAS 18001 REGISTERED
SAL Schiffahrtskontor Altes Land GmbH & Co. KG • Bürgerei 29 • 21720 Steinkirchen/Germany Phone +49 4142 81810 • Fax +49 4142 810281/82 • sal@sal-shipping.com • www.sal-shipping.com
Ad_WWPC_Heavy Lift_HP_Hi res.pdfPage 1 08/09/2009 05:16:56 PM
specializing in oversized, break-bulk and heavy lift cargo! C
M
Y
CM
MY
CY
CMY
K
“Worldwide Project Consortium (WWPC) offices provide professional project logistics planning and freight forwarding services for all kinds of large and difficult cargo, by land, sea and air, anywhere in the world. WWPC is the largest dedicated Project Freight Forwarding and logistics management company and only the most experienced and viable experts in project forwarding, with proven track record, will be admitted to the WWPC.”
www.wwpc.eu.com
Worldwide Project Consortium Ltd. Headoffice/Europe Wolfgang Karau Director Operational
Worldwide Project Consortium Ltd. Regional Office/Hong Kong Stuart Murdoch Director Administration
Phone : +34 690 708 964 Fax : +34 952 663 014 Email : wolfgang.karau@wwpc.eu.com
Phone : +852 212 67138 Fax : +852 212 67134 Email : stuart.murdoch@wwpc.eu.com
®
Heavylift Update “The world’s crane vessel fleet is relatively
high sailing speeds. The vessel has a unique
Beluga
old,” he points out. Even though the company’s
patented hull shape – the dual draught – that will
As newbuilds head into service, several new
first heavylift vessel, the Stanislav Yudin, was
allow it to sail at a speed of 14 knots. Uniquely,
arrivals have already joined the world’s heavylift
built in 1985 it is still actually quite modern, he
Seaway Heavy Lifting and MSCGusto have
fleet.
stresses, with the average age of the fleet above
designed the vessel so it can be ballasted in
Beluga Shipping’s new flagship, the Beluga
25 years. There is a great deal of future potential
and out of the water depending on the motion
Houston, performed its maiden voyage in
in the market, he adds. “New platforms need
behaviour.
December last year, loading two reactors in
to be installed and many platforms built in the
Workability and flexibility were key factors
Yokohama, Japan. Destined for Aratu in Brazil,
1970s and 1980s will need to be removed in the
when deciding on the design, says Richard
each reactor weighed 485 tonnes and measured
coming decades.” The Stanislav Yudin has also
den Hollander, marketing manager, Middle
21 metres. Then in the next port of loading
been working flat-out but it has now reached
East & India. Oleg Strashnov has much faster
in South Korea, another three reactors were
its technical limits after going through several
mobilisation/demobilisation abilities compared
loaded.
upgrades. Starting life with a 1,600 tonne crane
to competitors. And it has a special, hinged
Beluga Houston is the first representative
capacity, this was gradually increased to its
A-frame that is designed to fold so the vessel
of a new generation of multipurpose heavylift
present 2,500 tonne capability.
can easily transit under bridges and transit the
project carriers. The vessels have a maximum
Oleg Strashnov has been built at IHC
Suez Canal, the Bosphorus and Baltic easily.
lifting capacity of 1,400 tonnes and belong to
Merwede in the Netherlands. The new vessel
“Many of our competitors cannot do this and
the P1/P2-series of the Bremen-based shipping
takes the company into the market for very large
have to sail around the Cape in Africa,” stresses
company.
structures because it will be fitted with a huge
den Hollander.
A total of 16 units of the two new P-types,
crane capacity of 5,000 tonnes in revolving
The hook height is also very high as it is able
with loading capacities of up to 20,000 tonnes,
mode and this is combined with a very fast
to reach 102 metres above sea level and the
will be in operation by 2011, meaning that
sailing speed.
auxiliary block can reach heights of 134 metres
Beluga will have the largest super heavylift fleet
As well as installation and decommissioning
above sea level. The new vessel has dynamic
in the world.
work, Seaway Heavy Lifting is also considering
positioning capability, as well as an eight-point
All of these vessels possess an extra deck for
kitting out the vessel with full pipe laying
mooring system, meaning it can either get very
cadets and at least two of the P-series vessels
capabilities. A semi-submersible was considered
close to a structure or stand-off at anchor. Den
will be equipped with the towing kite system
but the company was keen that the new vessel
Hollander says dynamic positioning capabilities
SkySails to increase efficiency and so they can
should be able to mobilise very quickly so chose
are important with oil and gas exploration going
be more environmentally friendly.
a “ship shape”, enabling the vessel to achieve
into deeper and deeper waters.
Stanislav Yudin installing a platform in India
theBaltic March 2010 www.thebaltic.com
45
TOUW B&B HOLDING
Waalhaven ZZ 10 3088 HH Rotterdam tel: +31 (0) 10-2836666 fax: +31 (0) 10-2836660 www: www.touw-bb.com e-mail: holding@touw-bb.com
WWW.COMBI-LIFT.EU
· Lifting capacity upto 900 tonnes per unit. · Rolling and floating cargo upto 7500 tonnes per unit. · Dangerous/hazardous cargoes : IMO/INF · In-house engineering department for loadplanning and risk assesment.
WWW.COMBI-LIFT.EU
K/S Combi Lift (Head office) • Phone: +45 5816 2030 • mail@combi-lift.eu
Heavylift Update Jumbo
caissons of 320 tonnes each, measuring 21 x
China, of which four will enter the Combi-Lift
Meanwhile, Jumbo Shipping’s latest newbuild,
10 x 11.50 m in Penglai, China destined for a
pool, while the remaining two will go on long-
HLV Jumbo Jubilee, completed its maiden
new mining project in Cape Preston, Australia.
term charter to another operator. Prospects
voyage after loading, transporting and installing
The four caissons, which were contracted on
for the vessels currently under construction
two 1,250 tonne shiploaders for FLSmidth.
a last in-first out voyage, were directly lowered
in China look “quite promising,” says Anders
Jumbo Jubilee, which is capable of 17 knots
into the water and installed onto a foundation
Poulsen, due to the high standard of the fleet
service speed, started its first voyage from its
beneath the water surface at Cape Preston by
and capabilities of the crew. “We have a couple
home port of Rotterdam and set sail for Vitória,
the ship’s own gear.
of letters of intent, and there are some quite
Brazil. Two shiploaders, with a processing
promising associations going on.” However,
capacity of 16,000 tonnes of iron ore an hour,
the effects of the worldwide slowdown became
were loaded relatively easily. But in Tubarão,
BBC Chartering
noticeable in the last two or three months of
where offloading and installation were due, there
At the beginning of 2010, BBC Chartering
2009, and 2010 is likely to be difficult for the
was more of a challenge.
predicted in its annual review and lookout that
industry as a whole, he says. Overcapacity will
Tubarão port is half open to the sea and is
2010 could be a difficult year for the industry.
be a serious issue. “Competition is very heavy
continuously subjected to swell which can vary
Whilst some 80% of the $1 billion plus projects
as some companies have been building too fast
between 0.20 metres and 1.10 metres. Jumbo’s
that had been stopped due to frozen credits have
just to get turnround,” Poulsen warns. “There is
Engineering Department analysed swell statistics
been released again, and oil and gas exploration
no reason to bring so much tonnage to market
of the last 10 years and used detailed weather
are driving a number of major infrastructure
– particularly given the need for the right crews
forecasts and computer analysis to predict
projects: “all these positive indicators are not
and people to run the technical department.”
behaviour. To leave nothing to chance, a Motion
changing the fact that we have to face a tough
Reference Unit was used to register actual ship
year. The existing tonnage is more than capable
movements. The shiploader was lifted on board,
to cover the present and medium term market
Building for the future
brought to Tubarão and installed safely on its
volumes,” said a spokesperson for the company.
Although all the heavylift operators expect
rails.
Despite this, BBC has itself embarked on what
increasing competition, many of them are
it describes as an “aggressive” newbuilding
showing their confidence in the future. As Van
programme, aimed at the long-term needs of
der Velde from Seaway Heavy Lifting says:
the market.
“We are building for the next 20-25 years.”
SAL SAL Shipping is another company that is looking
Den Hollander adds that the market for larger
to the future by ordering vessels with the
topsides and jackets is growing, so higher
capability to take on larger and more complex
Combi-Lift
capacity heavylift vessels are needed. The new
jobs. In July this year, the company placed orders
Combi-Lift, a JV between Denmark’s Poulsen
vessels means that less offshore hook-up work
with the Sietas shipyard for the construction of
Shipping and Germany’s Harren & Partner, took
is needed, so schedules can be met more easily.
two new-generation Type 183 heavylift vessels.
delivery in January of the Combi Dock IV, the
Arie Peterse, BigLift managing director, says
SAL claims that the newbuildings, slated for
final vessel in a series of four multipurpose
that 2010 and 2011 will certainly be years
delivery in December 2010 and March 2011, will
heavylift newbuildings with semi-submersible
where the market will become more competitive.
be the largest and most modern heavylift ships
capabilities. These vessels were ordered as a
However, he adds, “investments in newbuildings
in the world, with a combined lifting capacity of
joint venture between the two partners. Harren
are long term, BigLift is confident that there will
2,000 tonnes (2 x 1,000 tonnes) and a speed
has a further six pure heavylift vessels with
be a future for good, well run, heavylift vessels”.
of up to 20 knots. The vessels can trade with
a lifting capacity of 900 tonnes on order in
an open hatch and accommodate exceptionally large loads, giving the flexibility to cope with a wide range of tasks, including wind energy, offshore/oil and gas industries, industrial plants and other sectors. The vessels will be equipped with DP1, allowing them to take on sub-sea installation work. Over the course of 2009, SAL has opened two additional offices, one in Australia and one in Finland. The Australian office, in Fremantle, was opened in August, and is part of a wider strategic plan to accommodate the growing shipping demand from the resources sectors in Australasia, said director Berndt R. Olesen. “Many of our large clients, including BHP and Woodside, are based in Western Australia and with around $200 billion worth of oil and gas projects in the pipeline, the future of the Australian industry looks certain despite the downturn in international oil and gas production.” In September, SAL’s Maria loaded four
Oleg Strashnov – artist impression
theBaltic March 2010 www.thebaltic.com
47
Global leader in ocean towage
Hofpoort 16th Floor, 3032 AC Rotterdam Hofplein 20 The Netherlands
phone + 31 10 240 25 00 fax + 31 10 240 25 99
email sales@fairmount.nl www.fairmount.nl
Towage & salvage
Changing the landscape Smit Boskalis merger makes headlines, but 2010 poses stiff challenges
I
n the towage and salvage sector, Dutch firm Smit Internationale was very much in the spotlight as nearly two years of courting by the giant dredging group Royal Boskalis have paid off as
a merger is announced. At the end of January, the two said that they had signed a protocol for a full merger. Based in Rotterdam, Smit is recognised as one of the top two in the business, so the move represents a considerable coup for Boskalis. The transaction will be realised through a public offer of E60 million in cash, ex-dividend, for all outstanding shares in Smit. Boskalis expects to launch the offer in the second half of February. The two companies have stated that all four divisions of Smit would be secured. Boskalis will declare the offer unconditional if more than 75% of the outstanding Smit shares are tendered. The two firms say the combination will create
Peter Berdowski
a world-class maritime service provider and that existing plans form the basis for further
Ben Vree, chief executive officer of Smit,
Financing of the formal offer will consist
expansion. Current activities will be supported
said: “We are very thrilled with the support
of a combination of senior debt and around
and the well-known Smit name will be retained.
from Boskalis for the Smit strategy and its
E300 million of equity/junior debt. Part of the
Smit will also continue to operate from its current
four divisions. We have a clear agreement
financing is expected to include the issuance of
headquarters.
regarding the continuity of Smit’s identity and
E200 million of new Boskalis shares.
Boskalis’ original target – Smit’s terminal activities – will be integrated with its own
its strategy, thereby securing the continuity of Smit’s activities.”
This deal has taken quite a time to emerge. Originally
in
September
2008,
Boskalis
associate company, Lamnalco. Here, the
The companies have stated that direct
announced an intended cash offer for Smit of
companies believe that there will be several
implications for the workforce will be limited
E62.50 per share that was rejected out of hand
synergies realised such as those concerning
because of the complementary nature of the
by Smit at the time. Boskalis later abandoned
procurement and crewing.
merger. Boskalis and Smit will make their best
this bid.
Peter Berdowski, chief executive officer
efforts to avoid any forced redundancies, the
In February of the same year, Boskalis had
of Boskalis, commented: “The merger fits
two firms stated. Vree will become a member of
already approached Smit with a view to acquiring
excellently with our strategy aimed at reinforcing
the board of the new combined group.
its terminals division. But Vree always remained
I
Boskalis and Smit are currently obtaining all
support the strategy of Smit, which aligns and
the necessary approvals from the competition
complements well with our strategy.”
authorities.
and
expanding
our
maritime
services.
theBaltic March 2010 www.thebaltic.com
adamant that the group should remain intact.
49
ShipTek 2010
International Conference on Shipping, Marine and Offshore Industry
fsh Of ore i n
, Marine and ping Ship n eo nc re fe
na tio l con
y str du
Interna
Dubai- April 18-19
April 19
Hotel Crowne Plaza, Dubai Two day International Conference on Shipping, Marine and Offshore Industry
International Maritime Expo
2010 April 18-22 UAE
4 International Maritime Video & Excellence Awards th
(Benchmark events under Middle East Marine & Maritime Summit-3MSummit)
Silver Sponsors
Bronze Sponsors
Badge & Lanyard Sponsor
Award Sponsors
Registration Area Sponsor
Event Associate Partners
Whitesea Shipping & Supply LLC
Media Partners
Organized by
Supported By
Event Managed by
BizTVEvents
The concepts division of Marine BizTV
P.O Box 94354, Dubai, UAE, Tel : +971 4 2997939, Fax: +971 4 2997940 contact@shiptek2010.com www.shiptek2010.com
Towage & salvage Newbuilds pose challenge
improvement yet, although some are mentioning
Offshore market stronger
Meanwhile, in the towage and salvage market,
that there are a few positive signs, he says. “My
Overall, Timmermans says, the company’s
uncertainty seems to prevail, with many unsure
personal feeling is that 2010 will be a challenging
offshore vessels do much better than the
about the impact of an influx of newbuilds. Most
year; however, the construction season in the
traditional ocean-going tugs. These can easily
believe that 2010 will be a challenging year.
North Sea, which usually starts around April,
move around in various market segments, like
could positively influence our markets.”
offshore, anchor handling and towing, while
Kotug chief executive officer Ard-Jan Kooren says: “2010 is not looking better than 2009.
However, he stresses that 2009 was not one
the traditional ocean-going tugs are restricted
I expect improvements by the end of 2010,
of the worst years ever, as many predicted. The
to ocean towage only, which make them less
beginning 2011.” Too many newbuildings are
trouble is that everyone compares 2009 with
flexible, he says.
coming into the market and the market is just
2007/2008 and these were exceptional years,
“Our two Shoalbusters/dredging support
not growing at the same pace, he stresses.
he says. “If you take 2002/2003 as a reference
vessels are doing reasonably OK and it seems
point, then 2009 does not look so terrible.”
that this market segment is stabilising.” The
Based in Rotterdam, Kotug itself has four newbuildings due to arrive, all of which are
ITC has enough work in its current portfolio,
80 tonne BP Rotortugs coming from Niigata
he adds, even though it is considerably down
Shipyard
on 2009 levels. “We have some quite nice long-
in
Japan.
In
addition,
Kooren
Shipbuilding and Trading (KST), holder of the Rotortug patent, has eight other deliveries of
term employment for a number of vessels.” The
company
has
recently
been
major dredging companies seem to be picking up contracts again, he says. But at the same time, he adds that it is difficult to see which way the market is going and what impact the newbuilds will have.
the Rotortug for third parties. Kooren says
subcontracted by Titan Marine to assist on a
There are a lot of questions over developments
currently the company is focusing on employing
wreck removal job. A ro-ro vessel, the Vinca
in the coming months. “Will owners take delivery?
its vessels in a more flexible way. For instance,
Gorthon, which was carrying paper, sank in
Some orders seem to have been placed with the
Kotug is using its newbuild tugs coming from
1988 near Petten off the Dutch coast. Lying at
idea of selling vessels on before delivery, so
the yard in Japan to tow newbuild hulls and
the entrance of a traffic separation area, around
will these be delivered? Will yards take the risk
pontoons from the Far East to Europe.
30 metres down at the deepest point, the Dutch
and build them anyway? There is just a lot of
government is keen to see the wreck removed,
uncertainty,” says Timmermans.
Joop Timmermans, managing director of ITC, agrees that 2010 is not looking particularly buoyant so far but he says the year may pick up in the second half.
so contracted Titan. Work is set to start in March and expected to take around six months.
In general, there has been no sign of an
International Salvage Union announces new vice president
T
he International Salvage Union has
Shipbrokers (FICS); an associate member of the
announced that Mr Andreas Tsavliris has
Institute of Arbitrators (AIArb); a member of the Chartered Insurance Institute (CII) and a member
been elected as its Vice President.
President of the ISU, Mr Todd Busch, said:
of European Tugowners’ Association. He was
“I am delighted to welcome Andreas as the
also an underwriting member of Lloyds for over
ISU’s new Vice President. He brings energy and
30 years.
a wealth of knowledge and experience having
Mr Tsavliris said: “I am honoured to have
worked in the salvage industry for some 40
been chosen by the executive committee and
years. I look forward to working with him as we
members of the ISU to serve as Vice President.
tackle the many issues facing our industry.”
Salvage is in my blood and it is an industry I am
Mr Andreas Tsavliris is one of the principals
passionate about. We provide a vital service to
of Tsavliris Salvage. He joined the firm in 1970
the shipping industry and I want to make sure
and has worked in many different departments
that salvors and salvage are understood and
in the company. Mr Tsavliris has been a member
valued in the marine world. I look forward to
of the ISU Executive Committee since 2006.
working with Todd, the executive committee and
He is also a member of the executive board
the membership.”
of the Greek Shipowners’ Union in London (GSCC); a Fellow of the Institute of Chartered
Mr Andreas Tsavliris
theBaltic March 2010 www.thebaltic.com
51
Shipmanagement, crewing and education update
Improving service to seafarers IMO has declared 2010 the year of the seafarer. What does that mean in practical terms?
Does your international medical insurance go this far?
“1.5
million seafarers serving the daily needs of more then 6.5 billion citizens of the world! It is a fact that goes unnoticed or is taken for granted by most, but one that should be trumpeted loud and clear,” said IMO secretary general Efthimios
Mitropoulos, in a statement to mark the beginning of what IMO has dubbed the Year of the Seafarer. In recognising the vital importance of the role played by the world’s seafarers in achieving safe, secure and efficient shipping on clean oceans, and the facilitation of more than 90% of the world’s trade, he said: “We also seek to reassure [seafarers], at the ‘sharp end’ of the industry, that we, who are responsible for the international regulatory regime and who
Evacuation to the nearest centre of medical expertise.
serve shipping from ashore, do understand the extreme pressures that you face and that, as a result, we approach our own tasks with a genuine sympathy for the work that you carry out.
The Cape of Good Hope or the Suez Canal. Wherever you are. You’re just a phone call away. Our 24/7 multilingual helpline is ready and waiting. To get you to the nearest medical centre. As soon as possible.
Bupa International Healthcare. Everywhere. +44 (0) 1273 322 091 www.bupa-intl.com
Out of sight, out of mind?
52 Bup_Tanker_270x86_Col_TheBaltic_Spring10.indd 1
theBaltic March 2010 www.thebaltic.com 20/1/10 14:00:15
Shipmanagement, crewing and education update “Last, but mostly importantly, we want to convey to you a clear message that the entire shipping community understands and cares for you – as shown by the efforts we make to ensure that you are fairly treated when ships on which you serve become involved in accidents; are looked after when you are abandoned in ports; are not refused shore leave for security purposes; are protected when your work takes you into piracyinfested areas; and are not left unaided when you are in distress at sea.”
LEARN FROM THE EXPERTS
Training and education One of the major projects to be completed by IMO in the course of the year is the revision of the 1995 Standards of Training, Certification and Watchkeeping (STCW) Convention. This is currently the only comprehensive instrument that provides for universal training and certification for seafarers around the world. The main revisions are currently being finalised and the revised STCW Convention will be presented for approval to the IMO’s Diplomatic Conference in Manila in June. Once the Convention is adopted, the IMO plans to hold a series of seminars and workshops to familiarise seafarers with the new and amended standards. “The rapid march of technology and the changing demands of an industry striving to be ever more competitive has meant that the global rules governing the training and certification of today’s and tomorrow’s seafarers had to be revised. It is therefore apt that the revision of the 1995 STCW Convention and Code should be completed in a year when the efforts and the professionalism of the world’s seafarers are embraced worldwide,” said Rear Admiral Peter Brady, director general of the Maritime Authority of Jamaica and chairman of the STCW subcommittee. “The revised STCW rules will offer all relevant stakeholders the proper instruments by which to
Norway is one of the leading shipping nations in the world and BI Norwegian School of Management (BI) has a long tradition of teaching and doing research in the Shipping area. Recently, BI added a Bachelor of Shipping and Finance to its portfolio. Bachelor of Shipping and Finance The Bachelor of Shipping and Finance at BI will give you a taste of an exciting and globalised industry: The Shipping Industry. Executive MBA Shipping, Offshore and Finance The Executive MBA in Shipping, Offshore and Finance is a unique programme combining the latest research and theory with a good practical exposure to cutting-edge real-life challenges. To find out more about our Shipping programmes, visit www.bi.edu
recruit, train and retain their sea staff. At a time when the role of the seafarer is becoming even more respected, this can only be a good thing.”
Increasing security For InterManager, one of the key issues to be addressed in the coming year will be the question of criminalisation: “Last year we were heartened by the support we received from throughout the shipping world as we fought for the release of the unjustly‐jailed officers from the Hebei Spirit. Now, in the Year of the Seafarer, our campaign will be even stronger and I am sure we can count on even greater support from the industry,” said InterManager president Roberto Giorgi. Increasing security for crews in the face of the piracy threat must also be a key concern for shipmanagers and international organisations alike, he continued. “I believe in 2010 and 2011 there will be much more effort and commitment from everybody, the IMO included, to try to find a solution not just on criminalisation but also on piracy. What we need is to have one way to fight piracy rather than different approaches from different countries,” Giorgi said, calling for international legislation to harmonise the approach shipowners and managers can take to protect their crews and ships from pirate attacks. “We need to define international legislation so that all shipowners are able to access the same tactics rather than some being forbidden by their individual nations’ laws,” he said.
Healthcare While criminalisation and piracy have become of increasing concern over recent years, other issues that have always been of concern to operators and seafarers alike are also getting more attention. A new trade association armed with a broad mandate to represent and promote the health and
EFMD
medical interests of the world’s seafarers was launched in London at the beginning of January. The International Maritime Medical Association
theBaltic March 2010 www.thebaltic.com
53
Shipmanagement, crewing and education update well as from an employers’ standpoint,” he said.
(IMMA), will look after the medical interests
A fully-employed secretary general has been
of those involved in the shipping industry
recruited and a nine-strong board of directors
Full membership of IMMA is open to all
worldwide. It will work alongside, and draw
bringing together expertise from the medical
stakeholders interested in seafarer and maritime
on the medical expertise of, the International
as well as shipowning, P&I, port agency and
health, fitness and medicine, notably: port
Maritime
medical auditing spheres is being assembled.
and shipboard doctors; port clinics; hospitals;
Health
Association,
an
existing
members’ association for maritime doctors and
Michael van Hall, president of Gezellig, Inc.
medical and speciality medical groups such
port clinics, to lobby politicians and regulators.
and formerly president of van Hall Health Inc.
as dentists and orthopaedists; pharmacists
With a mandate to highlight the health and
and managing director Maritime Sector at Health
and medical equipment and drug supply and
medical issues of the world’s seafarers equally
Systems International, Indiana, has been elected
testing companies; P&I Clubs; port agents and
from an owners’ and managers’ perspective, as
as the association’s first president. “Seafarer
port operators, as well as shipowning and
well as through the eyes of the seafarer and the
health has become such a crucial issue as
shipmanagement shipping companies.
unions, IMMA will bring the views of the ship and
concern over the seafarer shortage problem
In a reflection of the increasing concern
crew manager and the seafarer to the forefront
impacts on lengthening sea-time, longer working
about crew health, the American P&I Club
when influencing future regulation of this key
hours and less relaxation time. Conversely, crew
has expanded and further developed its Pre-
area of the global shipping industry. In addition
managers and shipowners are findi ng it hard
Employment
to acting as a lobbying organisation, IMMA
to balance the demands for higher operational
programme. The programme was previously
will also operate as a central point for advice
output from their seagoing workforce with the
only mandatory for seafarers originating from
and services on, for example, pre-employment
needs for a healthy and contented crew base.
India, Indonesia, Latvia, the Philippines, Poland,
medical examinations (PEME), nutrition/diet,
And that is before we consider the insurance
Romania, Russia and Ukraine. From February 20,
keeping a crew fit and healthy, immunisations,
implications of rising health costs in a sector
2010, however, PEME will also be mandatory for
training of the “medical” person on-board,
that suffers from a lack of understanding and
Bulgarian seafarers. EME facilities have been set
telephone and web-based medical advice, and
empathetic regulatory structure.
up in Varna to handle the expanded programme.
advice and guidance relating to the operation of doctors and hospitals in the major ports of call.
“IMMA has been formed to represent and tackle all of these issues from a practitioners’ as
IMO secretary general, Efthimious Mitropoulos, called for greater support for seafarers
54
theBaltic March 2010 www.thebaltic.com
Medical
Examination
(PEME)
Do we know the ropes? Yes. From top to bottom. Years of experience. At your disposal. Of course, experience doesn’t count for much on its own, you need knowledge, understanding and flair to be successful. And we wouldn’t have been in business for 120 years without having plenty of all three. So if you’d like to talk to a ship management company that will exceed your expectations call: 0207 575 6000 or email: shipman@aws.co.uk
You’re in good hands Client ProjeCt File Size / Stage StaFF / Date
Rightship Baltic half page Ad RIG0024_Baltic Ad_FA.indd 124mm x 178mm / FA1 DV / 15.01.2010
MANAGING MARINE RISK Environmental Rating System including EEDI & EEOI Petroleum and dry bulk vetting specialists Online tanker vetting information system Database of over 70,000 vessels Global inspection team Tailored service to customers Hosted + barge vetting systems
Font FaMilY USeD: ConDUit itC, aPex new
Client: whilst all care is taken in preparing this artwork the client assumes sole responsibility for printed artwork and copy accuracy. Print SUPPlier: You are responsible for checking artwork before plates are made for accuracy in measurements, plate requirements, registration and construction detailing.
C M Y K
ColoUrS are a guide only – refer to Pantone colour chips.
TRADERS CHARTERERS SHIP OWNERS TERMINALS / REFINERS PORT AUTHORITIES INSURANCE FOR MORE INFO CONTACT: Australasia | Melbourne P +61 3 8686 5741 Europe | London P + 44 207 868 1620 Americas | Houston P +1 (281) 245 3380 E petroleum@rightship.com
WWW.RIGHTSHIP.COM
h2O
satellite
wherever you are we are
The complete maritime communications solution Welcome to technology with a human face H2OSatellite offer a full suite of packages from stand alone to large networks onboard. What makes us unique is our absolute focus on providing personal, first class customer service and our industry leading H2OSatellite 24/7-365 operation and support guarantee. That’s why more than 2,000 ships on the world’s oceans have already chosen us as their communications partner. These days many companies are beginning to realise just how important their customers are; at H2OSatellite we always have. Contact us for a free, no obligation communications review. Competitive airtime for Inmarsat, Iridium and VSAT
Crew web browsing
Range of satellite antenna hardware, usually fitted within a day
SMS (2 way)
Antivirus protection for standalone and networks
Tracking
News from various countries worldwide
Automatic data transfers
Crew messaging including SMS, e-mail and postal
Commercial ships email
T: +44 1925 818 918 www.h2osatellite.com
Shipmanagement, crewing and education update
A step further The shipping industry is embracing the MBA
I
t is well documented that the shipping industry
with the skills they will need to be managers.
adopted by the shipping industry as a popular
was hit harder than most during the recession
In some cases, people simply want to change
and credible means of attaining qualificiations.
last year, but it has been interesting to see how
their job role. Most courses aim to provide a
Until recently, however, a credible MBA option
the sector reacted during those difficult times.
well-rounded course of study that is relevant
has not existed. Middlesex University and
Despite all the doom and gloom, one area that
across the industry as a whole, although some
Lloyd’s Maritime Academy have now developed
has continued to develop is staff education.
provide greater levels of specialisation. Modules
the sector’s first MBA course delivered solely
Because of the global economic downturn,
may include management skills, accounting,
by distance learning – the MBA in Shipping
many people have, unfortunately, lost their jobs
global economics, maritime law, international
& Logistics. The programme consists of six
and found themselves in a situation where
marketing, brand establishment, logistics and
modules delivered over a two-year period.
they have the opportunity and the necessity to
supply chain management, risk management
update and renew their skills, and perhaps even
and leadership techniques, amongst others.
More than 4,500 industry executives from across the globe enquired about the first
gain new ones. In addition to that, employers
distance learning MBA, with 60% of successful
have increasingly been demanding evidence of
applicants being self-funded students. “This
high-level current qualifications and expertise,
Part time
clearly confirms the maritime sector’s strong
yet they continue to be reluctant to allow staff
Because of the level of experience required
demand for the best higher-education distance
time away from the workplace to study.
before embarking on an MBA, many of the
learning courses to develop skills for the future,
All of these factors combined have led
courses have been tailored to allow course
in a cost and time efficient manner,” says Gina
to an increase in applications for part time
participants to study without taking extended
Tucker, head of distance learning at Lloyd’s
and distance learning courses as employers
study leave, or even leaving their jobs. Most
Maritime Academy. “As a global industry, it
seek cost efficient ways to improve the skills
maritime MBAs are formed around this pattern.
has been vital for the maritime sector to adopt
of their staff, and industry executives try to
For example, the Shipping and Logistics MBA
distance learning programmes, to allow seafaring
‘recession proof’ their careers. Lloyd’s Maritime
offered at the Copenhagen Business School
staff the chance to study, minimise travel
Academy, for example, reports a 9% increase in
consists of eight week-long modules over two
expenses and maximise efficiency. And after
applications to distance learning courses over
years, taught in Copenhagen, Hamburg and
much deliberation, there is now a consensus in
the past year.
London, as well as an ongoing project. Likewise,
the industry that distance learning courses can
BI Norwegian School of Management offers
provide a credible, affordable, manageable route
an MBA in Shipping, Offshore and Finance
to gaining qualifications and boosting expertise.”
Why an MBA?
that is taught in six two-week courses over a
For many, particularly those who are looking
year and a half period. The course, which is
to move ashore, this may mean a business
run in conjunction with Nanyang Technological
qualification, such as an MBA, generally
University in Singapore, is split between the two
regarded as the most popular and highest
campuses. The course is “structured in such a
level business qualification available. There are
way that it should be taken as part of one’s job
different motivations for those in the maritime
in shipping,” the university says.
sector to take on the challenge of an MBA. Some people have been promoted to a managerial role but do not feel they have the necessary
At a distance
skills. Others want to be in a managerial role
For some professionals, however, it may not be
and feel that an advanced qualification will
possible to take eight to twelve weeks out of
help them achieve that, either by being more
the office, even over a two-year period. For this
sellable on the market or by equipping them
reason, distance learning has long since been
theBaltic March 2010 www.thebaltic.com
57
is ateno iver c n o C del d to timely e t s u tr nd rate a y over u c c a ts b resul mpanies co 750 ldwide wor
Concateno A partnership with Concateno gives you access to our wide-ranging product and service portfolio. Our support structure provides training from Account Managers, general help from our team of Customer Services Advisers and technical support from our specialist laboratories. Altogether, you can be confident of a level of care and attention that will complement your testing programmes.
What steps are you taking to protect your employees? We help you comply with all major international regulations on drug and alcohol testing.
Drug and alcohol testing products and services •
Comprehensive worldwide collection network
•
Legally defensible testing
•
High volume, on-site screening tests
•
Emergency self collection drug test kits
•
Breathalyser systems
•
Fully accredited procedures
•
Employee Assistance Programmes
•
Education and policy advice
Tel: +44 (0)20 7712 8000 Email: enquiries@concateno.com www.concateno.com
•
Benzene exposure biomonitoring
•
Unique self collection kit now available
Concateno Harbour Quay, 100 Preston’s Road, London, E14 9PH, UK
CGP7376 Ed.001
To help your employees we now offer occupational chemical testing
Corporate viewpoint Concateno
Concateno Steering a course to health and safety
O
ne of the main driving forces behind
The changing market of drugs
The deterrent
the testing of vessels for drugs and
The market for new drugs is also constantly
A drug and alcohol policy needs rules, education
alcohol was the spillage of oil from the
evolving; different geographical regions have very
and a threat to ensure that people take notice
Exxon Valdez off the coast off Alaska in
noticeable preferences for their taste in recreational
of the policy. The “threat” can be provided by
1989. A number of issues became apparent after
drugs, such an example would be the increase
the constant reminder of a random drug testing
this disaster, resulting in Exxon putting together a
in Ketamine abuse, especially in the UK and the
programme. It is important that offshore locations
Charterparty Clause so any tankers chartering their
Far East. But Ketamine abuse has associated
are not seen as a “safe” location out of the reach
oil must test for drugs and alcohol. This instigated
bladder dysfunctions such as shrunken bladder
of drug testing.
an industry-wide shake-up to eliminate preventable
and ulcerative cystitis, leading to high frequency
The need to have a fully comprehensive drug
accidents by introducing the simple and effective
and urgency of urination, bladder pain, matter
and alcohol testing service from a single supplier
safeguard of drug and alcohol testing.
passing through the urinary tract, kidney damage
with a global outreach and adhering to the highest
and bladder cancer.
industry standards is essential in the maritime
The dangers of abuse
New drugs will lead to new problems; this
industry.
The impairment effects of alcohol and drugs are
can impact on the crew’s health as much as the
The advantage of using a single provider
well documented and can put your vessel, crew
dangers of being “under the influence” whilst on
ensures for all maritime drug and alcohol testing
and your company’s reputation at risk. All shipping
duty.
the security of supply and a consistency of service, and will result in reduced administration costs
companies need to ensure that their officers and crew are fit for duty, and this includes both their
Alcohol versus drugs
for you. To achieve these benefits, your supplier
awareness of the dangers of drug and alcohol
The signs of alcohol misuse are readily recognised.
must be an expert in global logistics such that
misuse and a process to help support and assist
In contrast, some effects of drugs, for example
sample collections can be carried out across an
compliance to shipping guidelines and regulations.
amphetamine’s apparently endless energy, can
international collection network in all major ports as
A drugs and alcohol policy that includes a test
initially appear beneficial, disguising the associated
well as in secondary ports. Collections need also to
programme does both – it helps raise awareness
elements of risk taking, depression and paranoia.
adhere to full chain of custody requirements so that
so that crew understand the seriousness of the issues and it also acts as a deterrent.
Regulations
Alcohol comes in bulky or fragile containers,
samples are handled correctly, are never mixed and
difficult to hide. Illicit drugs for personal consumption
never lost, and therefore legally defensible. It is also
are lightweight and inconspicuous.
the responsibility of the provider to know regulatory
We have social rules governing the use of
frameworks affecting maritime drug and alcohol
a
alcohol. Drugs such as cannabis (marijuana),
testing and to adjust procedures accordingly.
comprehensive drug and alcohol testing policy with
amphetamine and cocaine are “outlaws” – the
Finally, the laboratories in which analysis is carried
having to adhere to local legislation on drugs and
users make their own rules and consequently
out will need to have the highest standards of
alcohol, and ensuring compliance with regulatory
push the barriers of safety to satisfy their own
accreditation to ensure that the test results you
bodies, such as:
preferences.
receive are correct every time.
There
is
a
complexity
of
introducing
Drugs and alcohol usually get considered under
• ISM Code
These
attributes
are
embedded
into
• USCG
the Health and Safety banner but there is also
Concateno’s 20 years of maritime experience and
• ExxonMobil
a security risk. The desire for these products
have made us the world’s largest single supplier of
“All seafarers must be able to respond at any
can place the purchaser in circumstances where
drug and alcohol testing services to the industry.
time to an emergency situation.” (Oil Companies
they may unintentionally, deliberately or through
International Marine Forum Guidelines for the
blackmail give away information that the dealer
Concateno
control of drugs and alcohol onboard ship).
could sell on to interested parties. The complexity
Harbour Quay
Labour
of international drug trafficking and its links
100 Preston’s Road
Convention, which was adopted by the ILO in
with criminal activities could attach enormous
London, E14 9PH
February 2006, has been designed to ensure the
ramifications to the purchase of a small amount of
Tel: +44(0)20 7712 8000
highest standards of healthcare, safety and welfare
an illegal drug.
Fax: +44(0)20 7712 8001
In
addition,
the
new
Maritime
for seafarers. This will also be brought into force in the near future.
As part of an overall security strategy it makes sense to ensure that personnel are not the weak
E-mail: enquiries@concateno.com www.concateno.com
point in an organisation’s defences. An effective deterrent is required to convince them that the risks of even occasional drug use are not worth taking.
theBaltic March 2010 www.thebaltic.com
59
Oxford Analytica
Anti-piracy results are mixed A range of measures have been instituted to counter and contain piracy in Somalia – but success appears to be as far off as ever
D
espite a concerted international naval
December 2010. NATO has also sent vessels
On the legal front, the United States,
presence, the Horn of Africa has again
to the Horn. The first mission, code-named
United Kingdom and EU have all entered into
been identified as the most pirate-
Operation Allied Provider, was dispatched to
agreements with Kenya, whereby it will act as a
prone region anywhere in the world.
work with Atalanta in protecting vessels carrying
third party to prosecute individuals suspected of
In 2009, the International Maritime Bureau (IMB)
World Food Programme (WFP) aid to Somali
engaging in armed maritime crimes.
logged 116 actual and attempted attacks in
ports. The current deployment, Operation Ocean
The UN has been instrumental in moving to
the Gulf of Aden, compared with 92 in 2008,
Shield, commenced operations on August 17.
foster collective action against armed maritime
and 80 off Somalia, compared with 19 in
Apart from CTF-151, EU NAVFOR and NATO,
violence around the Horn. In January 2009,
2008. Altogether, the wider vicinity, including
a number of other states have sent frigates to
the Contact Group on Piracy off the Coast of
the southern Red Sea, accounted for 217 of the
protect or escort shipping off the Horn. About 14
Somalia (ICGPCS) was created to address the
406 incidents recorded throughout the world by
national navies are operating in the Gulf of Aden,
regional situation. The UN Security Council
end-2009.
with a collective deployment of about 30 ships.
(UNSC) has passed three resolutions germane
While the concentration of piracy remains greatest near Somali shores, incidents are now taking place as far as 500-1,000 nautical miles off Mogadishu. In a number of cases ships have been taken as far south as the Comoros, Madagascar and the Seychelles.
International response In an attempt to deal with the incidence of piracy off the Horn of Africa, the international community has instituted a far-reaching strategy aimed at containing the activities of Somalibased maritime gangs. In January 2009, the United States announced the formation of Combined Task Force (CTF)-151 to monitor a predefined Maritime Security Patrol Area (MPSA) in the Gulf of Aden. The aim is to have this form the basis of an international coalition anti-piracy naval flotilla, although at the time of writing only the United States, United Kingdom and Australia had provided naval assets. CTF151 complements the EU combined Naval Force (EU NAVFOR) Operation Atalanta that was deployed in December 2008 and is now led by Spain. Its current mandate runs to end-
Can a naval flotilla solve the piracy problem?
60
theBaltic March 2010 www.thebaltic.com
Oxford Analytica to piracy off the Horn (1816, 1846 and 1851),
about $1.3 million a month; in 2009, the
Root causes
which collectively sanction “cooperating” states
EU budgeted $450 million to help run the
Perhaps the most fundamental weakness of
to take all necessary measures that are deemed
Atalanta flotilla. Costs of this magnitude
the international strategy response is that it is
appropriate to suppress Somali-sourced piracy
bring into question the sustainability of the
premised on containing piracy where it emerges,
and armed robbery at sea.
current naval flotilla, especially if there is no
at sea, rather than addressing its roots on land.
discernible decline in attacks.
Frigates have little, if any, relevance to many
• The judicial agreements with Kenya pose
of the territorial “push” factors that give rise to
Successes and shortcomings
difficulties. The country’s court structure is
persistent armed maritime crime and violence
To a certain extent, the various measures
inefficient and, with over 800,000 cases still
off the Horn.
outlined above have met with some success. EU
pending, already stretched to its limit. As of
Insufficient attention is being devoted to
and NATO escort ships have helped to ensure
June 2009, of the 111 pirates sent to Kenya
ameliorating the underlying socio-economic
the safe delivery of World Food Programme
for trial, only 10 had been fully processed
drivers that give rise to piracy. In Somalia, these
relief supplies, while coalition forces have been
through the penal system.
include poverty, underdevelopment and lack of
instrumental in thwarting several attempted
• The ICGPCS has only met sporadically
governance. More targeted initiatives, including
hijackings in the Gulf of Aden. The IMB notes
and has yet to yield any significant action.
“soft” socio-economic objectives aimed at
that although total incidents have nearly doubled,
One reason for this is that the group’s
protecting local fishing grounds and supporting
actual hijackings by Somali pirates have not
deliberations have not embraced two main
those small-scale industries and cooperative
risen in proportion – from 42 in 2008 to 47 in
groups that are central to Horn piracy: the
businesses that do not rely on piracy’s “financial
2009. It attributes this to the naval presence
owner-operators of the small feeder-craft that
lifeline”, might help local coastal communities
and the “robust” response of ships’ captains.
make up the bulk of the victims in the Gulf of
play a prominent role in supporting pirates to
However, international anti-piracy initiatives fall
Aden, and the Somalis themselves.
desist.
• UNSC resolutions are likely to give rise
short in several respects: • The MPSA monitors roughly 2 million square
to equally difficult challenges, especially if
miles, and at least 20,000 vessels transit the
they are used to sanction military raids
Somali responses
region every year. To cover this expansive
and air strikes in Somalia itself. Pirates
The first 500 recruits to the nascent Somali
and
space
are largely indistinguishable from ordinary
Coast Guard graduated in September. Although
comprehensively would require a massive
fishermen within the wider local communities
a positive development, the force is completely
naval deployment – far more than the 30
with which they interact; military action would
dependent on international funds and with only
ships currently patrolling the Gulf of Aden.
probably result in civilian collateral damage
a dozen vessels at its disposal is nearly devoid
and an anti-Western backlash.
of assets.
heavily
trafficked
maritime
• A related problem has to do with cost. The direct expense associated with deploying
The self-declared Republic of Somaliland
a single frigate to the Horn amounts to
has already demonstrated an ability to institute a durable and efficient onshore remedy against piracy. The neighbouring semi-autonomous region of Puntland has – under a new administration since early 2009 – attempted to garner international support for its own antipiracy force. Most pirate attacks are launched from bases in Puntland, and the financial and criminal networks through which ransoms flow have links into the Puntland administration. Although the international response to Horn piracy may be making it more difficult for the pirates to commit their crimes, attempted attacks have still risen rapidly, suggesting that if the purpose of the naval presence is to deter, it is not deterring enough.
Report by Oxford Analytica www.oxan.com © 2010 Oxford Analytica E-mail: dgautrey@oxford-analytica.com
Too soon to celebrate success
theBaltic March 2010 www.thebaltic.com
61
The Answer is
YES
with
BVS
AWT’s BonVoyage System (BVS) and Ship Routing Services deliver the answer you need. • Save time? Yes. • Save fuel? Yes. • Save money? Yes. • Safer voyages? Yes. • Reduce carbon emissions? Yes. The combination of AWT’s BVS on-board voyage optimization software and Ship Routing Services allow Captains to thoroughly evaluate all routing options and come up with the optimum route saving time, fuel and money, and enhancing safety while also reducing carbon emissions. To learn more and get the answer you’re looking for, visit www.awtworldwide.com/Yes
AWT Worldwide Headquarters 158 Commercial St. Sunnyvale, CA 94086 U.S.A. T: +1 408 731 8600 F: +1 408 731 8601
AWT New Jersey T: +1 609 275 5488 F: +1 609 750 9793
AWT Europe T: +44 1224 857920 F: +44 1224 582168
AWT Germany T: +49 4182 287132 F: +49 4182 287133
AWT Hong Kong T: +852 2865 0282 F: +852 2865 0228
AWT Shanghai T: +86 21 6103 4824
AWT Korea T: +82 2 739 3464 F: +82 2 739 3404
AWT QuWeather T: +82 2 737 7007 F: +82 2 737 8521
Copyright © 2010 Applied Weather Technology. All Rights Reserved.
Green technology
Making a difference Sometimes it’s not the grand gestures, but the detail in the day to day running of the ship that makes all the difference
W
hile the Copenhagen conference
Hull efficiency
company DK Group has developed a system
may have failed to produce any
Reducing the friction between the hull and
that does exactly this, by integrating an air cavity
clear guidance on the reduc-
the water is one of the most effective ways of
into the midship and box section of the vessel.
tion of emissions for shipping,
increasing the efficiency of a vessel. In the long
An air injection system pumps compressed air
scrutiny on the industry’s environmental record
term, improved hull design will be responsible
into the cavity through a system of automated
remains as close as ever. Environmental aware-
for the most change in this area. Given the
compressors and valves. This creates a layer of
ness is far more than the question of what is
lifespan of the average vessel, however, it is also
air between the vessel and the hull, designed
coming out of the ship’s funnel – although that
important to develop methods to improve the
both to minimise the hull/water contact area and
is, of course, important – and items as diverse
efficiency of existing hull forms. One of the most
minimise air consumption. An automatic control
as paint, fuel cells and satellites are playing a
effective ways of doing so is to encase the hull
system monitors the volume and pressure of
part in reducing the environmental impact of the
in a layer of air, or bubbles – a technique that
air and maintains the optimal air level in the air
industry as a whole.
has been known for some time, but that is not
cavity. According to figures from DK Group,
generally practical for large scale use. Danish
the system can reduce fuel consumption and
theBaltic March 2010 www.thebaltic.com
63
Viking Lady
We are the experts: • • • •
Sale and Purchase Second Hand/Recycling Vessels Financing Surveying
• Green recycling - Surveying - Localisation/Analysis and inventory of hazardous material - Waste Management Scheme - Ship Recycling Plan - Selection of suitable and certified recycling yards - Supervision/Monitoring and Reporting of the ship recycling project
Pioneer of Green Recycling Projects Guarantee of Good Performance Worldwide Postal Address: Eckhardt Marine GMBH P.O. Box 101746 D-20012 Hamburg
Phone: +49 40 328 102-0 TELEFAX: +49 40 335 783 / +49 40 331 576 E-MAIL: sandp@eckhardt-marine.de
OFFICE: Eckhardt Marine GMBH 13 Ballindamm D-20095 Hamburg
Green technology related emissions by 15% for tankers and
icebreakers are still in operation today – the
bulkers, 7-9% on an LNG tanker and 7.5% on
concept has never become mainstream. “The
a containership.
steady increase in the price of fuel oil – and the probable introduction of either a carbonemissions trading scheme or a related tax – now
Paint and coatings
presents the possibility that nuclear propulsion
While the system can be retrofitted, new
could be more competitive,” the classification
developments in antifouling mean that simply
society said in a statement earlier this year. As
repainting a vessel with the right coating can
a result, Lloyd’s Register’s research programme
have a similar effect. MOL, for example, has
is revisiting the technical challenges of nuclear
made research into high-performance antifouling
propulsion for ships, as well as refuelling and
paints that improve vessels’ fuel efficiency,
waste-disposal issues.
one of the key elements of its CO2 reduction technology R&D initiative. According to research
Avoiding bad weather can cut emissions
carried out by MOL, the drag of seawater
dramatically
Preventing alien invasion
50% to 80% of all resistance, including wind
and many of them are looking to reduce CO2
though ballast water discharge, while not
and wave resistance. By developing a super-
as well.” He estimates that owners can save
as high profile CO2 emissions, is one of the
slick antifouling paint for ship bottoms, MOL
between 5-10% on fuel costs with weather
most environmentally contentious issues in
hopes to reduce CO2 emissions by 8% to 12%
routing and reduce emissions on a California-
the shipping industry. According to the IMO
compared to conventional antifouling paints.
Asia route, although savings are not as large on
“Invasive aquatic species are one of the four
north-south routes.
greatest threats to the world’s oceans.” The
over the vessel’s wetted surface accounts for
Similar predictions are made by International
The spread of pollution and invasive species
Paint, which estimates that, over a five-year
German government estimates that invasive
period, a single VLCC currently coated with a
species such as the Chinese mitten crab have
self polishing copolymer antifouling could reap
Ship of the future?
caused up to R85 million damage in German
savings of 9,000 tonnes of fuel if coated with the
Fuel cells, a cleaner and more efficient way of
waters alone.
most modern generation of antifouling, reducing
producing energy from existing fuel sources,
The first stage of the Ballast Water
its CO2 emissions by 31,000 tonnes and saving
have often been predicted as the future of
Management Convention came into effect
around $3.6 million. In-service experience on a
electricity generation on land. That concept
last year. Under the Convention, vessels
range of vessels has shown savings of up to 9%
had now been expanded to ships. During the
constructed from 2009 onwards which have a
on fuel usage and emissions, the company said.
United Nations Climate Change Conference
ballast capacity of less than 5,000 cubic metres
in Copenhagen (COP15), the offshore supply
must be fitted with ballast water treatment
vessel Viking Lady was docked in central
systems. From 2012, new vessels with a ballast
Work with the weather
Copenhagen and shown off to the press and
capacity of 5,000 cubic metres or more must be
Even with the most efficient hull design possible,
COP15 delegates as the “only ship with a fuel
equipped with such systems.
it is still possible to reduce emissions even
cell integrated as part of its power generation”. It
There had been some debate about whether
further by choosing a route that works with the
was claimed that, compared to a traditional ship,
technology was sufficiently advanced to allow
weather, rather than against it. Similarly, the use
the Viking Lady’s advanced technology enabled
implementation of this convention. However,
of a “just in time” slow steaming route that takes
her to reduce harmful NOx emissions by 180
during MEPC 59 in London in July 2009, the
the best advantage of the time available to arrive
tonnes and CO2 emissions are reduced by 20%.
IMO determined that sufficient type approved
at port just before the vessel is due rather than
The Viking Lady’s LNG-powered engines emit no
technologies are currently available for ships
the “hurry up and wait” approach, can save
smoke or sulphur.
constructed in 2010 that there is no need
large amounts of fuel. The IMO says that fuel
Classification society Det Norske Veritas’s
for changes to the existing resolution and,
savings of up to 2-4% can be made using this
chief operating officer Tor Svensen used the
therefore, no changes to Assembly Resolution
method. Rich Brown, VP of products at Applied
vessel as a venue for a press conference
A.1005(25) are needed.
Weather Technologies, which provides routing
announcing the results of a study which points
Tom Mackey, chairman of HydeMarine, said
services and develops BVS weather routing
to potential emission reductions of up to 25%
that “ships with smaller volumes of ballast water
software, describes weather routing as “one
for the existing merchant fleet, which could
will be the first ones who must comply with
of the industry’s best kept secrets,” saying that
translate into annual reductions of more than
coming regulations. These early adopters are
many owners are not aware of the savings that
250 million tonnes of CO2. He said that the
an indication that shipowners and yards now
can be made.
potential for emission reduction in newbuildings
recognise that the IMO BWM Convention will
is even higher.
soon be ratified and that newbuildings need to
One reason weather routing is likely to be
install IMO Type Approved BWT systems”.
particularly popular with shipoperators is that
Indications are that owners are aware of
it is a means of reducing fuel, emissions and costs at the same time, whereas most emission
Nuclear ships?
this need, with Hyde Marine receiving orders
reduction technologies are costly to implement.
Lloyd’s Register, more controversially, has been
for six ballast water treatment systems in a
In fact, it is likely to be the cost savings, as
looking at the feasibility of nuclear-powered
single week, for example. Of these, five were for
much as the emission savings, that are the
merchant ships. While several nuclear powered
newbuilding projects on offshore supply vessels
initial selling point, Brown says. “More and more
merchant ships have indeed been built and
and one deep-water survey vessel, and one for
companies are looking to control fuel costs –
operated in the past – and nuclear powered
retrofit on a marine research vessel.
theBaltic March 2010 www.thebaltic.com
65
Corporate viewpoint Eckhardt Marine GmbH
Responsible recycling N
o industry has been left untouched by
management
a growing pressure to demonstrate an
Eckhardt Marine’s commercial division enables
awareness and responsibility to the natu-
the company to hire and operate tugs if ships
ral environment. Many industrial sec-
have to be repositioned under tow or to
tors have been impacted deeply by “sustainable
commercially manage vessels for a period of
development” policies. The shipping industry is
time prior to demolition. This is usually achieved
no exception, where one of the main focuses has
through a sale and leaseback arrangement
been on ship recycling activities. These have suf-
with the previous owner or on Eckhardt’s own
fered from a considerable bad image and reputa-
account in the international freight market,
tion over the last decades, often being linked with
where the company has developed very close
low industrial standards, pollution and poor social
relationships with charterers that employ
safeguards for yard workers.
elderly ships.
NGOs,
state-bodies
and
international
and
crewing
requirements.
The core activities and services provided by
organisations are addressing this issue and are
Eckhardt include:
working on an international convention for ship
• Sourcing
recycling. But international law-making is a long-
“end-of-life”
vessels
through
owners, brokers and insurance companies.
term process and the sudden drop in freight
• Sale and purchase of “end-of-life” ships on
rates has made it very obvious that solutions are
a regular basis, and second-hand ships for
needed now.
further trading for selected clients.
Who better than a company that has more
• Managing the towage and last voyages of
than a century’s involvement in this activity to
vessels, with or without cargoes, to different
face up to the future of ship recycling by offering
recycling destinations.
its experience and knowledge to meet the
• Establishing ad-hoc or long-term joint
immediate demands of the shipping industry?
ventures in every country where ships can be broken up.
An industry pioneer
• Development and introduction of new
Eckhardt Marine enjoyed the professional
rigs) totalling 1,500 vessels for a light-weight
recycling standards to meet “green recycling
backing and dedication of the traditional German
displacement (actual steel weight) of more than
objectives”. This effort has already been
industry as a subsidiary of Klöckner, VIAG/
12.5 million metric tons during the last 15 years.
successfully implemented in China and for a number of shipbreaking yards in India.
Deutsche Bank and ThyssenKrupp before management buy-out initiated by Briac Beilvert
Global network for tailoredservices
and Guenther Werle.
being taken over by FIS Holding GmbH via a
• The sale and purchase of all types of European navy vessel which are destined
Head office operations in Hamburg include a
for recycling and which are handled under
Having its roots in 1901 – the date of
trading team to acquire and place ‘end-of-life’
a “special notification procedure”. Eckhardt
inception of its former parent company –
vessels, a post-fixture department to handle
also follows up and reports on the recycling
Eckhardt Marine GmbH has experienced all
the detailed transactions following the trade,
and decontamination process to the relevant
periods of the ship recycling industry and has
and an administration team. Vessels sales can
a presence in all ship recycling countries where
be concluded in as little as two hours, although
• Trading of scrap products (heavy melting
it has a current involvement in all aspects and
others might take up to three weeks. Once
scrap, shredded scrap, billets and such like)
functions of ship recycling projects. In the past,
the sale is completed, the selling owner will
the company operated ship recycling yards in
generally arrange for the vessel to be delivered
• Conducting a sourcing programme to
Germany, the USA and Spain before becoming
to the recycling yard although, if required,
secure additional tonnage by purchasing
the most successful and reliable trading house
Eckhardt will organise the repositioning voyage
older vessels and chartering them back, via
in demolition tonnage, handling all types and
through its shipmanagement division. This
bareboat charters, for periods of two or three
sizes of floating structures (merchant ships,
team has a deep knowledge of rapidly taking
years, whilst also securing the ultimate sale
navy ships, submarines, barges, pontoons, oil
over elderly ships, including their technical
to the recycling market.
66
theBaltic March 2010 www.thebaltic.com
authorities.
to recycling clients.
Corporate viewpoint Eckhardt Marine GmbH Track record and strong relationships
conditions and a rational organisation of the
and analysis of the hazardous materials during
work.
the first boarding through to the dismantling of
Due to its unique background, Eckhardt
• Monitoring and advice to recycling yards
the ship’s last plate. Documented with pictures,
Marine GmbH is privileged to enjoy a network
for being compliant with ISO 30 000:2009
drawings, protocols of the work progress and
of long-standing direct relationships with
(Ship Recycling Management System) which
statements of compliance, this report gives
shipowners, selected brokers and recycling
is the new ISO standard for ship recycling
full details of the depollution and dismantling
yards. Continued good service, reliability and
facilities. This demonstrates how Eckhardt
process, quantities of waste removed and where
commitment to quality have enabled Eckhardt
Marine GmbH is fully compliant with the
and how they were ultimately disposed of.
Marine GmbH to offer a complete range of
Basel Convention and all existing technical
ship recycling services, from the processing of
guidelines (IMO, ILO etc). Early in this decade,
clients which include:
trading transactions to delivering environmental
the company became registered as a waste
• A guarantee for the complete and efficient
and engineering recycling solutions, in often
broker under the European Union notification
management of commercial and technical
complex legal and economic circumstances.
procedures and legislation for the control
green recycling processes in China and
Eckhardt Marine’s professionalism and
of trans-boundary movement of hazardous
reliability has allowed the company to foster
waste, including their disposal from both the
close relationships with a number of financial
disposing and receiving countries.
partners, including some of the major German
As
a
long-term
partner
to
This brings a range of benefits to Eckhardt’s
India. • Continuous monitoring of the dismantling and recycling processes as well as the
breaking
subsequent depollution and disposal work. • Best-practice
green
recycling
services
commercial banks. This enables it to secure
yards, Eckhardt has been able to convince
sufficient debt financing to purchase “end-
several yards to enter exclusive cooperative
in accordance with the most modern
of-life” vessels from those environmentally
joint ventures in China and India, where
international and domestic standards at a
responsible
with
the company’s technical procedures can
maintaining and enhancing their public image.
be implemented under its own monitoring
• Reliable client orientated services which
These include most of the world’s oil majors
systems. All yards working with Eckhardt under
reduce the client’s exposure to liability and
and publicly traded shipowning companies,
the green recycling procedures are certified
damage to their reputation and company
and more generally all shipowning companies
under ISO14001 (Environmental Management
image.
acknowledging accountability in the way their
System), OHSAS18001 (Occupational Health
Safe and responsible ship recycling is fast
vessels will be disposed of.
and Safety Management System), and many
moving up the corporate agenda for all shipping
also hold the ISO9001 Quality Management
companies. Eckhardt Marine has abundant
Still one step ahead: green recycling
System certificate.
knowledge, experience and competence to
Eckhardt Marine is in the process of
ensure that vessels are dismantled without
Eckhardt Marine has established a set of technical
practicing and implementing the new ISO30
causing undue harm to the environment and
procedures for the ecological and sound recycling
000 certification in cooperation with yards’
without endangering life. That should be the aim
of ships for owners that have a particular concern
management. These yards, specially selected
of everyone involved in the international ship-
for the disposal of their elderly ships, in compliance
by Eckhardt, differ from others as they:
operating sector.
with the Hong Kong International Convention for
• Are of new construction and functionality,
the Safe and Environmentally Sound Recycling of
meeting the standards of the western world.
Ships, 2009. Although this legal framework has
• Have a lay-out and technical infrastructure
successfully. Eckhardt Marine GmbH has been
not entered into force since its adoption on 19th
for the segregation and optimum sequence
able to exploit its genuine knowledge and deep
May 2009, Eckhardt Marine GmbH has already
of green recycling procedural steps.
experience of the ship recycling industry and is
owners
concerned
adjusted the standard of its Green Recycling Scheme to comply with this convention. The technical procedures cover the following issues:
on board. • The analysis and examination of hazardous materials in accordance with MEPC (Maritime
green
recycling
a range of resources to meet social and quality standards to help preserve the environment. That is what sustainable development is all
management system.
about.
of the workforce. • Provide appropriate accommodation and healthcare facilities for personnel. • Employ specially trained staff for safety procedures and accident avoidance. • Maintain
an
excellent
reputation
for
dependability and efficiency.
Environmental Protection Committee of IMO)
Contact: Briac Beilvert / Guenther Werle
A recycling plan
Managing Directors
• An appropriate removal and collection of
Eckhardt Marine monitors ship recycling projects
Eckhardt Marine GmbH
each type of hazardous waste for proper
in a very similar way to the supervisory process
Ballindamm 13
disposal or neutralisation in dedicated
employed for the construction of new ships.
D-20095 Hamburg, Germany
landfills or facilities.
Regular reports are made by Eckhardt Marine
Tel: +49 403281020
• A dismantling plan of the ship structure,
to the vessel owner, detailing the steps involved
Fax: +49 40335783
ensuring the implementation of safe labour
in the dismantling process from the inventory
E-mail: sandp@eckhardt-marine.de
179 (59) adopted 17/07/2009.
projects
onward transportation in an advanced waste
code for the individual and collective safety
of the hazardous materials and substances
50
a prime example of a company bringing together
ships’ components made of hazardous
localisation, analysis and condition reporting
than
facilities for hazardous waste prior to
• Have strict adherence to a protective dress
these tasks encompasses identification,
Since 1999, Eckhardt Marine has handled more
• Have secure intermediate special storage
• A waste-management scheme for handling materials or substances. The scope of
competitive price.
theBaltic March 2010 www.thebaltic.com
67
Case Study: The Valles Group
The Valles Group Manages Fleet Safety and Efficiency with Applied Weather Technology’s BonVoyage (BVS) Software Background The Valles Group has been in the shipping business for nearly 100 years. Founded in Shanghai in the 1910s, Valles originally provided cargo liner services along the Yangtze River and Northern Coast of China. Over the years, the company has grown in size and scope and continues to expand its fleet. Now headquartered in Vancouver, Canada, today Valles owns and operates 12 vessels, including a fleet of two panama bulk carriers and ten Aframax tankers. Valles vessels are chartered by major companies including ExxonMobil, ENI, NYK and Chevron. Situation – A Need for Better Weather and Voyage Routing Information For many decades, captains piloting Valles vessels only had access to paper-based, non-graphical weather forecast reports, which made charting voyage routes, optimizing fuel efficiency, and staying abreast of shifting weather forecasts a challenge. As a result, some vessels incurred heavy weather damage and delays. In addition, every extra hour at sea due to inefficient routing added to fuel costs. With Valles’ commitment to providing safe and cost-effective shipping services, the company wanted more accurate weather and routing information. In 1999, Valles’ Director of Fleet Safety, Oscar Pinto, viewed a demonstration of AWT’s Bon Voyage System (BVS) and became convinced that he had found the right solution to the problem. Solution – Valles Group Deploys BVS Across Entire Fleet “I immediately recognized the value of BVS and realized that it would not only be a tremendously useful tool for our company, but would also change our entire industry,” said Pinto. “We initially tested BVS on two of our vessels.” BVS was extremely well received by the captains and crew of the test vessels. “They found that BVS’ graphical, colorful and simple interface made weather patterns much easier to see, simplifying voyage planning and routing. The ability to interact with data was a refreshing change and they all agreed that the system was very user-friendly.” The Valles team also appreciated the accurate, up-to-date BVS weather reports. Within a month, the company decided to deploy BVS across their entire fleet. “The 16-day forecasts and consistent updates give us the ability to map our routes safely and more cost-effectively,” Pinto explains. “BVS is much more than a weather forecaster; it’s a voyage planner. We view it as a useful resource to our business.” BVS is also installed on every new ship that Valles acquires.
“With BVS’ timely weather forecasts, our ship captains plan routes that use the winds and currents most favorably, thereby ensuring the quickest, safest and most costeffective routes. As a result, our fleets use less fuel, which reduces costs while making the least possible impact on the environment.” – Oscar Pinto, Director of Fleet Safety, The Valles Group
Results – Valles Group Saves Time and Money with BVS “With BVS’ timely weather forecasts, our ship captains plan routes that use the winds and currents most favorably, thereby ensuring the quickest, safest and most cost-effective routes. As a result, our fleets use less fuel, which reduces costs while making the least possible impact on the environment,” says Pinto. Pinto, a former captain whose leadership role with Valles now keeps him mostly shore side, also uses BVS’ powerful fleet management tool to monitor the positions and routes of Valles’ entire fleet to ensure vessels are operating efficiently and safely. “It gives us complete visibility into all of our shipping
www.awtworldwide.com
activities going on around the world,” he says. “It provides us the big picture and helps us manage and monitor overall performance of our fleet.“
AWT Worldwide Headquarters 158 Commercial St. Sunnyvale, CA 94086 U.S.A. T: +1 408 731 8600 F: +1 408 731 8601
AWT New Jersey T: +1 609 275 5488 F: +1 609 750 9793
AWT Europe T: +44 1224 857920 F: +44 1224 582168
AWT Germany T: +49 4182 287132 F: +49 4182 287133
AWT Hong Kong T: +852 2865 0282 F: +852 2865 0228
AWT Shanghai T: +86 21 6103 4824
AWT Korea T: +82 2 739 3464 F: +82 2 739 3404
AWT QuWeather T: +82 2 737 7007 F: +82 2 737 8521
Copyright © 2010 Applied Weather Technology. All Rights Reserved.
Green Trend in Shipping: Reducing Fuel Costs and CO2 Emissions with Weather Routing Technology With pressure increasing on the shipping industry to curb CO2 emissions, many companies are exploring innovative new breakthroughs--everything from installing sails and scrubbers to building more fuel-efficient vessels. But what many organizations might not realize is that weather routing and voyage optimization technology available today can enable them to immediately reduce carbon emissions, at a relatively low cost compared to other measures. In this article, Skip Vaccarello, CEO of Applied Weather Technology (AWT), explains why weather routing and voyage optimization makes financial and environmental sense.
one voyage, for a service that typically costs $1,000 or less. For a company that has 70 ships in its fleet, it’s easy to see the return on investment. It makes financial and environmental sense. This is much more cost effective than alternatives that require ship modifications, additional equipment and significant capital outlay. Q: How does weather routing help companies save fuel on voyages?
Q: To what extent can companies reduce carbon emissions from shipping by using technology available today?
A: To ensure on-time arrivals, Captains often take a get-there-as-fastas-possible approach at the start of the voyage, and then slow down at the end. Accurate and effective weather routing diminishes the need for Captains to hurry up on the early portion of a voyage to create a cushion should they encounter foul weather. In fact, AWT data shows that with better weather routing and a clearer picture of likely sea conditions, Captains can smooth out their speed regimens and capture fuel savings in the process.
A: Det Norske Veritas (DNV) recently concluded that by using current technology alone, shipping could realize a 30 percent decrease in greenhouse gas emissions by 2030.
With BVS, they can plan courses designed to help them arrive on time and conserve fuel by traveling at more constant speeds, which benefits both the ships’ engines and the environment.
Among the technologies mentioned that could reduce carbon emissions were those that help companies identify more efficient routes—this is one of the biggest green trends in shipping today. AWT, which routes greater than 30,000 voyages per year, more than any other company, specializes in providing these technologies via our shore-based routing services and our BonVoyage (BVS) on-board software.
Q: What are the other main benefits of weather routing and voyage optimization?
Q: How much money, fuel and carbon emissions can companies save using ship routing and voyage optimization?
Q: What are the latest technological advances included in BVS?
A: Various studies by the International Maritime Organization (IMO) and its consultants from 2000 to 2009 have reported that significant gains in fuel and emission reduction can be achieved by weather routing. The range reported is 2 to 4 percent. In AWT studies, fleets have realized savings of 5 to 10 percent. We estimate that if every ship routed by AWT closely followed our recommended routes, our customers could achieve a combined fuel savings of approximately 450,000 metric tons of bunker oil per year. At current fuel rates, that translates to potential cost savings of over $180 million per year and reduction in CO2 emissions of approximately 1,400,000 metric tons annually, the equivalent of removing 320,000 cars from the road for a year. Q: Don’t companies have to spend a small fortune to significantly reduce carbon emissions? A: Actually with AWT’s voyage optimization software and routing services, companies can save money by reducing fuel consumption, which results in the reduction of carbon emissions. The cost of routing is very low compared to the amount of money that fleets can save via the reduction of fuel. It’s clear how they can achieve a significant return on their investment. Here’s one example: A ship might use as much as $500,000 of fuel to cross the Pacific. AWT can demonstrate how we can save between 5 and 10 percent of that fuel. That’s $25,000 to $50,000 saved on just
A: In addition to saving fuel, money and CO2, we find that fleet managers use our services and software to enhance safety and prevent heavy weather damage.
A: BVS recommends routes intended to minimize fuel consumption, fuel costs and CO2 emissions given the vessel’s target ETA. BVS is the only on-board software to offer 16-day forecasts updated four times daily. And BVS utilizes high resolution Naval Coastal Ocean Model (NCOM) current data, which allows ship Captains to view real-time analyses and forecasts of ocean current conditions at a quarter by quarter degree. This can contribute to fuel conservation by enabling Captains to make betterinformed decisions, particularly on coastal routes, about whether to sail with or avoid specific currents. In addition, resonance alerts warn Captains of the potential for severe motions. Q: Why should the shipping industry choose AWT over competitors? A: Exceptional service is one of the main reasons customers choose AWT. AWT is the largest company that exclusively specializes in providing the shipping industry with voyage optimization services and on-board software. Unlike competitors, AWT goes beyond delivering weather data by developing technology innovations in voyage optimization from its Silicon Valley headquarters. These innovations give Captains and fleet managers advanced yet easy-to-use tools for enhancing safety, reducing fuel and CO2. Q: How can companies get more information about how AWT can help them reduce carbon emissions and fuel costs, and enhance safety? A: To get more information, they can go to www.awtworldwide.com or call +1.408.731.8600.
Intersleek 900 ®
Better for the environment Better for your business Intersleek®900 is the latest generation foul release coating for vessels over 10 knots. Offering proven fuel savings of up to 9%* and corresponding reductions in greenhouse gas emissions. It’s biocide-free and has high volume solids, which means less paint, less waste disposal and lower VOC emissions at subsequent drydockings. Isn’t it time your most precious assets were under our protection? To find out more visit www.international-marine.com/intersleek900 * Depending on application and in-service conditions
Corporate viewpoint International Paint Ltd
How a coating can cut carbon and cost I
nternational Paint Ltd is part of AkzoNobel, one of
This “Seatrade” Awards winning and Queen’s
Lines, proves the savings. “We had monitored the
the world’s leading industrial companies and the
Awards winning, biocide free, silicone based
Prem Pride’s fuel consumption closely,” explains
largest global coatings manufacturer.
technology works on a foul release basis by providing
Mercator Lines’ Mr Amit Agarwal, general manager.
According to a leading shipping operator,
a very smooth, slippery, low friction surface onto
“At corresponding engine speeds, the vessel was
“Coatings are an integral part of today’s vessel
which fouling organisms have difficulty attaching.
consuming up to 6% less fuel, depending on weather
operation, helping maximise ship performance and
Any which do attach, normally do so only weakly
conditions, after the application of Intersleek®900.
preserving assets”.
and can usually be easily removed. With proven
We originally calculated projected savings based on
Vessel fuel efficiency and environmental impact
average fuel savings of 4% and a corresponding
a bunker price of $450 and found we were saving
is an area where coatings have and will continue to
reduction in emissions, Intersleek®700 has become
nearly three tonnes of fuel a day. And whilst bunker
have a significant role. With an estimated 350 million
firmly established as the industry benchmark in
prices continue to climb, our payback period just
tonnes of fuel consumed annually by the world’s
silicone foul release technology.
gets shorter. The added advantages of no biocides,
fleet, there is an ever-increasing focus on shipping’s
In 2007, we introduced the next generation of
environmental footprint. At this level of consumption
foul release technology, Intersleek®900. This is a
the industry currently emits some 1.1 billion tonnes
new, unique patented biocide free fluoropolymer foul
The owner went on to apply the coating on
of CO2 and over 10 million tonnes of SO2 annually.
release coating. Fluoropolymer chemistry represents
a larger hull area on board the Prem Divya in
reduced drydocking times and lower CO2 emissions convinced us that this is the technology we need.”
The industry has tried to find viable means of
the very latest advances in foul release technology,
June 2008. Amit Agarwal said: “We continued to
energy saving for decades. One way to do this is
significantly improving upon the performance of the
closely monitor the performance of both vessels
through the use of antifouling coatings. Antifouling
best silicone based system, Intersleek®700.
in service. Whilst we continue to be happy with
coatings are used to improve the speed and energy
Exceptionally smooth with unprecedented
the performance of Intersleek®900 on the Prem
efficiency of ships by preventing organisms such as
low levels of average hull roughness combined
Pride, we fully expected an improvement on the
barnacles and weed sticking to the underwater hull,
with excellent foul release capabilities and good
Prem Divya, as we had increased the areas of the
restricting the ship’s movement through the water.
resistance to mechanical damage means that,
underwater hull coated to include the flat bottom.
If ships didn’t use antifouling coatings, fuel
for the very first time, all vessels above 10 knots
The detailed monitoring of the performance of
consumption could be increased by as much as
can now benefit from foul release technology, eg
the Prem Divya has confirmed that we are now
40% – with current fuel use consequently rising
bulk carriers, tankers, general cargo vessels and
achieving up to a 9% reduction in fuel consumption
by 140 million tonnes per year to a total of almost
feeder containers. Intersleek®900 also provides
under comparable conditions.” Fuel savings of this
500 million tonnes per year. It is estimated that
excellent performance on high speed/high activity
order add up to an environmental benefit equivalent
antifouling coatings provide the shipping industry
scheduled ships. The low surface roughness, good
to almost 11,000 tonnes less CO2 emitted, 100
with annual fuel savings of $70 billion and reduced
coefficient of friction and advanced surface energy
tonnes less SOx and 200 tonnes less NOx.
emissions of 450 million tonnes and 4.2 million
characteristics improves fuel efficiency and reduces
With an Intersleek®900 track record of over
tonnes respectively for CO2 and SO2 annually.
slime build-up on container vessels, reefers, LNG/
300 ships, conservative estimates indicate that the
LPG carriers, cruise liners, ro-ros and vehicle
technology is already delivering, in comparison to
International Paint has supported the shipping industry with pioneering antifouling technology
carriers.
SPC antifoulings, reduced CO2 emissions of almost
In terms of reduced CO2 emissions and
600,000 tonnes per year. If every ship in the world
copolymer (SPC) antifouling in 1974. Since then, our
improved fuel efficiency, Intersleek®900 offers
was coated with Intersleek Foul Release technology
contribution to the fuel and emissions efficiency of
predicted savings of up to 9% in comparison to
the potential exists for additional, annual CO2
the global fleet has been hugely significant. In 1996
biocide containing SPC antifoulings. The potential
emission reductions of 90 million tonnes.
we introduced Intersleek®425, the first commercially
exists for even greater savings in comparison to
available biocide free foul release technology for
controlled depletion antifoulings.
since the introduction of the first self polishing
fast craft, and in 1999 introduced the revolutionary Intersleek®700 for deep sea, scheduled ships.
A recent example on an aframax tanker, the
For more information, visit: www.international-marine.com/intersleek900
Prem Pride, belonging to Mumbai-based Mercator
theBaltic March 2010 www.thebaltic.com
71
LEAVE NOTHING BUT YOUR WAKE
IMO TYPE APPROVED BALLAST WATER MANAGEMENT SYSTEM
• Simple and reliable filtration and UV treatment • Compact, modular, robust design • Easy to install on existing ships and into new construction +1 440.871.8000 • info@hydemarine.com • www.hydemarine.com Meet us at: CSM/Seatrade. Miami, 15-18 Mar. 2010 CMA Shipping. Stamford, 22-24 Mar. 2010 Europort Romania. Constanta, 20-22 April 2010 RORO Exhibition. Bremen, 18-20 May 2010 POSIDONIA 2010. Athens, 7-11 June 2010
• Capacity 60 to 6,000 m3/hr • Low pressure drop • Low operating costs • Fully automatic • No chemicals
Making Water and Air Safer and Cleaner
Freight Lite. Sometimes, you only need “fast and light” functionality for trading and risk management in freight. Navita gives it to you with a new lightweight version of our powerful POMAX Freight solution as an ASP solution. All the basics, up and running in weeks—at far less cost. Details at www.navita.com
First-tier functionality, right out of the box.
Marine software
Maximising profitability O
wners and operators are increas-
they can make the most of the potential that the
ingly seeing the potential of the right
products offer.
Triple Point itself is set to considerably expand its range of shipping-specific solutions, having
The last year has seen the introduction of
announced in January that it had acquired
several new products at AXS, in particular the
competitor, Softmar, a provider of software
While the shipping industry had a hard time
development of a series of tools for S&P brokers,
solutions for commercial chartering and vessel
last year, several service providers found that
This is now in place, and has already been sold
operations covering the broad ranges of
there was a silver lining. An increasing focus on
to six shipbrokers, including one Japanese client,
commercial activities for shipments of dry, tanker,
cost control was leading owners and operators
says Fletcher.
gas, and chemical cargos. The acquisition of
software to improve management of everything from finance to routes.
to focus on solutions that allowed them to make
Another major innovation over the last year
Softmar allows Triple Point to optimise freight
the most of the money and information available
has been the introduction of an online help
management in its core markets, including crude
to them. Providers of everything from routing
system. While dedicated support teams are
oil and petroleum products, chemicals, metals
software to chartering software and financial
available round the clock, it has cut down a great
and mining, agriculture, and food and beverage.
analysis tools have benefited as a result.
deal on calls to this desk, making it swifter and
“Supply chain management has historically
easier to resolve problems in the office without
been about transparency, automation, efficiency
outside help.
and cost reduction, all of which are necessary,
AXS Marine
There are also some ‘interesting projects’
but not sufficient to optimise profitability,” said
Global chartering software and database provider
going on in the tanker and dry sectors. “There
Peter F. Armstrong, president and ceo of Triple
AXSMarine recently opened an office in London
are lots of opportunities we have yet to explore,”
Point Technology. “With the need to manage
to expand its services to a wider range of clients.
says Fletcher. “It’s all about focus; if you try and
sharp commodity price volatility, supply chain
The new office, to be based at 60 Cannon
cover all the areas at once, you’re not going to
solutions must be market-based and provide
Street, will manage all of AXSMarine’s commercial
be as successful.”
analysis and risk management tools to best
activities for the EMEA markets. The office will be
determine when to source, how to move, whether
headed up by Hugo Rousse, who has relocated
to store, and when to hedge using financial
Triple Point/Softmar
derivatives. Through the acquisition of Softmar,
“From our experience in Singapore, we
As cost and risk management become an
Triple Point’s ability to provide market-based
realised that being based in the same city as your
increasingly urgent issue for shipowners, an
supply chain solutions, including freight rate risk
clients is a major advantage,” says Steve Fletcher,
increasing number are becoming aware of the
management, is unmatched.”
commercial director of AXS Marine. “We want to
need for specialist software to deal with these
All 45 Softmar employees from its chartering
be the go-to providers of databases and tools for
issues. In December, risk management specialist
and vessel operations business have joined Triple
the shipping industry, and the only way we can
Triple Point Technology announced that Chiquita
Point, and Softmar co-founder, Michael Lolk
do that is to have a team in place at the heart of
had purchased its suite of software for hedging its
Larsen, has been named Triple Point’s managing
that industry.
bunker fuel expenses.
director of chartering and vessel operations.
from AXSMarine’s Paris office.
“London is a very important shipping centre,
Chiquita’s core ships utilise some 300,000
Softmar’s other co-founder, David Marais, will
for example the majority of the world’s broking
metric tons of bunker fuel annually. A 1% move in
retain Softmar’s ship brokering business under a
houses are either headquartered here or have
the fuel rate would represent a $1.3 million impact
new and separate entity.
a presence here. Our London team will add
to its cost in the absence of hedging – in 2008,
that crucial hands-on element our clients
the average price volatility of bunker fuel was
organisation like Triple Point gives Softmar the
need, whether it is on-site training, contract
over 12%. According to Triple Point, Chiquita’s
immediate resources and reach to accomplish
discussions or just keeping them abreast of
move to using this software is part of an ongoing
its goals of continued growth and support of
latest developments or new products we may be
trend in which industries such as shipping are
existing and new clients,” said Mr Larsen. “This
launching,” he emphasised. Above all, Fletcher
moving towards the same sophisticated solutions
is an exciting time in the commodity and freight
says, AXSMarine wants to make sure that existing
that have previously been used by energy and
markets, and becoming part of Triple Point is the
clients are aware of what is available, and that
commodity trading companies.
perfect next step in Softmar’s maturation.”
theBaltic March 2010 www.thebaltic.com
“Integrating
with
a
larger,
successful
75
Marine software AtoBviaC For effectively managing voyage costs and times, however, it is not only risk management software, but route management, that plays a vital part. Shipowners are relying more and more on realistic distance tables to calculate the most efficient routing, says Bill Morris, Director of AtoBviaC. “The industry needs to know what these distances are, to have confidence in their computation and to have immediate access to the calculation of new distances and routings whenever they are required,” he said. Unfortunately, many of the commercially available route management solutions are not accurate, he continues. Some suggest routes that, whilst feasible on paper, cut straight through traffic separation schemes, oil fields or dangerously shallow water. Others are not updated frequently enough to take changes into account. For example, the distance between Rotterdam and Port Said has increased by 3 Worldscale points due to changes in the navigational requirements. The key to AtoBviaC’s success has been the
Bill Morris, Director of AtoBviaC
emphasis on safely navigable routes that are continually updated. As of this year, that also
Using an accurate set of distance tables not
board ship. “In the past the industry has shown
means the introduction of a new feature that
only creates consistency between the back office
a reluctance to invest in quality software and to
allows users to select routes avoiding the Gulf of
and the bridge, but can help avoid performance
an extent this reluctance still exists,” he says.
Aden. The 2010 Worldscale tanker flat rates have
disputes between charterers and owners, points
“Our problem is competing with people whose
been calculated using round voyage distances
out Trevor Hall, also a director of AtoBviaC. Whilst
distances are impossible to achieve.”
taken from tables developed by AtoBviaC,
the software is currently primarily used ashore,
At a time when accuracy and accountability is
highlighting the trust the shipping industry has in
the company is trying to demonstrate to owners
increasingly important, perhaps that is an attitude
the accuracy of these tables.
and operators that it also has applications on
that has begun to change.
theBaltic March 2010 www.thebaltic.com
77
Corporate viewpoint SpecTec Group Holdings Ltd
SpecTec turns 25 years old And IT in shipping becomes an adult
S
pecTec turns 25 this year. It is a quarter of a century. When SpecTec was started, Microsoft had just released v.1 of Windows, and Internet, Google,
mobile phones, iPod were words not yet created. SpecTec was started with the vision of providing the Maritime world with a tool which would simplify coping with maintenance and purchasing of spares on board. It was as simple at this. In 1985, the Maritime world had very few rules: SOLAS, STCW 74, LL66, MARPOL 78 … that was basically it. Yet, the SpecTec people had created a software, called AMOS, which would help the crew in knowing how many spares they had on board, would tell them which maintenance was overdue, and later would allow them to easily create a requisition to be sent ashore and be processed to become a Purchase Order. The initial years were so tough that SpecTec risked bankruptcy many times; we were creating something completely new, with the challenge that AMOS had to work over satellite lines when e-mail did not exist, and we had to tell crews what a PC was, as in those times PCs were, simply told, an unknown element of life
SpecTec ceo, Giampiero Soncini
on board. Our first PC has a machine with an incredible 640Kb of RAM, and a whopping 20Mb
good dose of luck too.
more regulated, and we need to become more
hard dtisk, a storage far superior to whatever
Many companies were started roughly in the
serious and professional in the way we conduct
had been available until that time. Yet, no-one
same period, or even before: NSOS, Consult
our business. Shipping people are at times
really knew what to do with PCs. Compaq was
AS, Isherwood, NTC to name the few that come
too complacent of the “heroism” behind our
created by some IBM engineers because IBM
to mind. All these companies, and the ones
activity. We work endless hours, travel endless
thought that PCs were only toys and would have
which came after, Marinor, Rast, MMS, and
trips to the most unknown edges of the world
never succeeded in the “real” work world. It took
many more, have all shared the same sweat and
(Caripito ring a bell to anyone?) to cope with the
vision, guts, stamina, energy, and intelligence to
tears, and at SpecTec we respect all of them and
adventures of our work. But around us the world
create a company like SpecTec in 1985. And it
all the ones who worked with them.
has changed. Yes, a company will always need
has taken a tremendous amount of work and
But now times have changed enormously.
heroes to perform heroic tasks, but only when,
sacrifice to make it work for 25 years … and a
The shipping world is becoming more and
once every now and then, heroism is needed.
78
theBaltic March 2010 www.thebaltic.com
Corporate viewpoint SpecTec Group Holdings Ltd If this becomes a daily feature, then it simply
kept at ransom by some pathetic buggars to
and dearly. Too many think that software should
means that the company lacks the know-how
which the word “pirate” is an honour, simply
be cheap without understanding what it implies
and the organisational skills to work the way it
because our weak European Governments lack
to build good software which has to cope with
should.
not the guts (they never had them), but the
all the complexities of shipping life. Let’s get
So it is not time anymore for people setting
interest in saving these people because, after
serious, guys.
up their IT company to provide the “ultimate”
all, they are simply some sailors, coming from
software for shipping, because there are simply
nowhere and disappearing into nowhere.
From the outside it is easy to see the good companies: they are efficiently organised. And
too many in the market, and simply too many
If shipping is treated this way, while we are
I see some of even the largest ones which are
have disappeared without a trace in the last 25
the blood and the veins of the world, it is simply
enormously inefficient; they know how much
years, leaving the users with empty pockets and
because we often (not always, often) fail: we fail
money they spend and maybe even where
useless software. It is time for consolidation,
to act like a serious industry, we fail to show
they spend it, but have no idea why they spend
for coordination of activities, specialisation of
data, records, analysis, structure, organisation;
it. This is what a product such as AMOS can
products, aggregation of forces. And it is time
we fail in becoming modern and efficient in the
do; there are two, three, maybe four software
for the shipowners and shipmanagers to get
way we work.
systems in the market which can do it as well.
serious about IT in shipping. If anyone expects to
Information Technology is not THE key to
The other companies should focus on service
buy something valuable when paying one or two
efficiency, it is only a tool. But it is a key element
and consultancy, and not in developing another
thousand dollars (or even less!!) for a software
in organisation nowadays. To the inefficient
“best-of-the-world-never-done-before-one-
which is supposed to control EVERY possible
people I often meet in my worldwide tours, I
click-and-it-does-all” software …
activity on a ship, this anyone should get out of
ask if they would fly on the planes of an airline
the industry and try to fix bicycles instead.
managed the way they manage their ships.
I hope that in my next 25 years in SpecTec (and maybe here some of my staff will faint …)
Shipping is a vital industry. It transports
So I take it upon myself to call the IT industry
I will see the changes which I have highlighted
99% of the oil worldwide, and probably 90% of
in shipping to become more serious, to follow the
above. We all need this. We all work hard in
any other goods. It has a very small amount of
changes which the shipping world is facing and
shipping, we all face the consequences of this
incidents compared to the goods it transports.
help it get a better image. And I call on shipping
hard work. It is time we got recognition from the
It is now much more organised and efficient,
companies also to pay more attention to IT as a
whole world for what we do and how we do it.
and much more regulated. Still, it is incredibly
vital tool to conduct business. Anywhere in the
But if we want this to happen, we have to
vilified in the eyes of public opinion. If a ship is
land-based industry world an IT manager who
invest in organisation, in transparency, in abiding
in distress, like the Prestige, it finds not a single
would propose the ceo of his company to build
by the rules of corporate governance seriously
port to welcome it to safety (10 years ago, like
the company’s own software rather than buying
and not hiding behind magic pipes. Otherwise
now). If drugs are found in a box of bananas
one of the many existing ERP systems would
there would be no difference between the pirates
out of 150,000 embarked on board, the Master,
be fired without mercy. In shipping, too many
attacking our ships, and us.
Chief Officer and Bosun are arrested and kept
still think they can build better software without
in jail for one year until they become insane,
even realising what it means in terms of Cost of
without the shipping world staging a boycott
Ownership. Too many think that software which
Giampiero Soncini,
of the country which allows such a thing to
comes free of charge is a good deal, without
Chief Executive Officer
happen. And to date, close to 300 sailors are
understanding that the price will be paid later,
The SpecTec Group
SpecTec Managers at the Sandefjord meeting in 1993, a moment which defined the shape of SpecTec forever
theBaltic March 2010 www.thebaltic.com
79
Corporate viewpoint Triple Point Technology
Freight rate volatility churns like a raging sea Those caught off guard get a proper burial at sea
T
alk to an old sea salt and he’ll give you
markets, the level of complexity grows each day.
Point to provide not only an integrated solution
a list of superstitions as long as his
Having advanced systems to identify, measure,
for chartering and vessel operations, but the
beard about how to survive at sea. Any
and manage freight rate risk is increasingly
only commodity and trading risk management
number of factors can court disaster,
important, especially when measuring the
platform that pre-integrates chartering and vessel
including having flowers or a priest on board. On
impact of freight rate variability on cash flow
operations. This unmatched level of enterprise
the other hand, pour wine on the deck for good
performance. As the freight derivatives market
integration provides companies with the ability
luck during a long voyage or follow the adage,
grows in sophistication, so does the range of
to profitably manage a comprehensive Source-
“Sunday sail, never fail,” and you’re pretty much
strategies used.
to-Cash P/L and gain competitive advantage.
assured a smooth voyage.
Additionally, companies wishing to operate
Those of us conducting business, however,
with a complete picture of enterprise position
are well-served not to rely on superstitions
and exposure must manage freight market risk in
and gut feelings to navigate the volatile
tandem with the risks associated with chartering
sea. Controlling freight market risk is a key
and vessel operations. Principals with large
Triple Point’s integrated solution for chartering and vessel operations
component to managing enterprise risk and, in
fleets must keep tight control of tonnage and
Triple Point’s commercial operations solution,
turn, operating a profitable supply chain. The
cargo commitments and be prepared for likely
Softmar Chartering and VesselOps™, provides
most successful companies will be those best
changes in tonnage demands. An integrated
the leading software for owners, operators, and
prepared to identify risk and model its dynamics;
solution for chartering and vessel operations
charterers to comprehensively manage freight
measure and quantify the impact of risk across
provides real-time information exchange and
risk, chartering, and vessel operations on an
the enterprise and on financial results; and
enables companies to make better and more
integrated platform.
manage and mitigate risk with an integrated
proactive freight decisions.
platform that enables better and more proactive decision-making.
Chartering and VesselOps™ provides a
Yet industry surveys show that many
global view of vessel movements, availability
companies are still attempting to manage
of
chartering
commitments.
and
vessel
operations
with
market
cargoes,
and
Chartering
existing and
cargo
VesselOps
spreadsheets. This creates information silos and
enables the commercial maritime community to
Integrating freight management with chartering and vessel operations
presents greater risk of human error.
make more informed and proactive decisions,
With roughly 90% of the world’s traded goods
information is the difference between sinking
by volume transported by sea, the ability for
and swimming.
In today’s volatile shipping markets, complete transparency and fast access to actionable
streamline day-to-day operations, and protect cash flow performance.
Freight Risk Management
shipowners, operators, and charterers to
The Freight Risk Management solution analyses
control the cost and risk of transporting freight
position, including vessels, Freight Forward
Triple Point Technology acquires Softmar
Agreements (FFAs), Contract of Affreightments
managing supply chain margins and enterprise risk.
– including freight rate volatility – is a key to
(COAs), cargo bookings, cargo relets, and
Triple Point’s recent acquisition of Softmar –
options. The advanced solution graphically
Whether you run a trading desk, are a risk
the premier provider of software solutions for
displays a consolidated view of total physical
manager, trade FFAs, or invest in the shipping
commercial maritime operations – enables Triple
and paper freight risk exposure, mark-to-market
80
theBaltic March 2010 www.thebaltic.com
Corporate viewpoint Triple Point Technology sion of when to hedge.
analysis, and long/short position. Additionally,
maintained manually or retrieved directly from
the solution provides a monthly breakdown of
the vessel reporting system. A profit and loss
A company’s ability to successfully manage
total days and value exposure, coupled with
summary is automatically maintained, showing
commodity and freight volatility – from source to
yearly and grand totals for the entire exposure
the variance between actual and estimated
cash – ultimately determines the profitability of
period selected. The system also manages
charges. The system displays a detailed
the supply chain.
bunker exposure by combining the exposure
breakdown of individual charges with one click.
“Softmar’s technology was developed for big
from physical contracts and bunker swaps.
Voyage results are updated in real time as new
shipowners, operators, and charterers. Because
Customers can calculate option premiums
information is entered.
its client list includes global and extensive ocean
specifically aimed at the Shipping Industry and
freight providers, the acquisition by Triple Point is
perform mark to market based on the next open
a boon to supply chains that need to monitor the
port.
entire raw material, source-to-deliver process, including ocean freight.”
Freight derivatives, including FFAs, bunker swaps, and options, are primarily used
—AMR Research
by shipowners and operators, oil and trading companies, and grain
Only Triple Point preintegrates commercial operations with commodity management
houses as tools for managing freight rate volatility. The
Freight
Management
Risk
solution
enables traders to monitor portfolios in real time as
Integrating
daily prices and forward
VesselOps into Triple Point’s
curves are updated. The
commodity
solution
risk
automatically
Chartering trading
management
and and
platform
recalculates the forward
provides an all-encompassing
book value and provides
view of the enterprise. The
an expected P/L based
sophisticated suite of multi-
on forward expectations.
market commodity and risk
Customers are able to record
FFA
trades
management solutions provides
and
a diverse set of industries with the
efficiently manage settlement.
advanced systems and risk-analysis models, including VaR, Greeks, and
Chartering
stress tests, to manage overall exposure.
Chartering and VesselOps provides the
With a single click, a customer gains a
most comprehensive system to manage the
view of physical position, financial position, and
pre-fixture activities of a commercial operation,
combined exposure. Having the ability to turn
including voyage estimating, cargo manage-
layers of commodity trading and freight data into actionable information drives holistic portfolio
bination of cargoes, vessels, load, and discharge
The profitable supply chain – successfully managing the source-to-cash P/L
operations on a voyage and/or Time Charter
With the critical requirement to manage
areas of enterprise risk — market, operational,
(TC) relet basis. The solution is optimised for
sharp commodity price and freight volatility,
counterparty
dry cargo, gas, tanker and parcel operations
supply chain solutions must be market-based
implementing Triple Point’s integrated platform
and handles consecutive voyages and voyage/
and provide business intelligence and risk
for commercial operations and commodity
TC combinations. Chartering and VesselOps
management tools at each touch point in the
management, companies are able to manage
allows unlimited numbers of ports and cargoes
supply chain. Companies wishing to succeed
enterprise risk holistically; a key requirement for
per voyage and displays all key information
require solutions to profitably determine: when
smooth sailing in rough times.
on a single screen. Unlike time-intensive and
and where to source raw materials; the cost of
error-prone spreadsheets, the advanced system
transporting them; whether to store; processing
automatically analyses the potential profit or loss
and conversion costs; and the marketing of
of market or controlled business before making
outputs.
ment, and vessel management. Chartering and VesselOps analyses any com-
an agreement to transport cargo.
management and offers huge competitive advantage. Freight rate volatility affects all key credit,
and
regulatory.
By
Woven into each supply chain touch point is commodity volatility at the component level:
Vessel Operations
power to run plants, freight rate volatility and
Chartering and VesselOps effectively manages all
fuels to transport goods, emissions, foreign
post-fixture activities of a commercial operation
exchange, and packaging, to name a few – all of
and enables operators to keep track of day-
which must be carefully managed in a Source-
to-day operations: arrival, departure, loading,
to-Cash P/L to provide an enterprise-view of
Tel: +1 203 291 7979
discharging, bunkering, and disbursement
physical and financial exposure. Underlying all of
E-mail: info@tpt.com
accounting. The operation’s schedule can be
these supply chain activities is the critical deci-
www.tpt.com
theBaltic March 2010 www.thebaltic.com
81
Corporate viewpoint AXSMarine
AXSMarine Work faster and more efficiently with information at your fingertips
T
ime is definitely money in today’s fast
we have a simple vision: allow each of our clients
estimators,
moving shipping industry and being
to bring their own personalised order to a vast
research and more, let users run their day-to-
able to gather, assimilate and act on the
array of data,” says AXS Marine’s CEO, Fabrice
day businesses more effectively.
right information at the right time can be
Demichel. “Our products are designed to bring
The type and nature of decision-critical data
crucial to ensuring success over failure as well as
all information pertaining to a particular shipping
varies across the different sectors of shipping,
a healthy profit margin.
deal together in one place, organised in such a
and AXSMarine has specific tools covering the
way that an individual or group can quickly and
principal five: AXSDry, AXS-Alphaliner (container),
effectively reach a decision,” he adds.
AXSTanker, AXSS&P and AXSOffshore.
But in this internet age, the problem we all face is having access to too much information:
distance
tables,
calculators,
we need to know quickly, what is important and
With one click to connect to AXSMarine, users
AXSMarine now provides the required
what can be rejected. We can also find ourselves
access a complete catalogue of online analytical
expertise to shipping companies and shipbrokers
wasting time trying to locate and retrieve that
programmes such as voyage estimators, freight
to correctly configure MS Outlook/Exchange with
precise piece of data that we actually need.
matrices, distance calculators, vessel position
the correct common folder functionality and filing
That is where AXSMarine comes in. Its
or cargo order listings, commercial and sales
needs previously only made available in bespoke
services are designed to take advantage of what
advices, valuations, and market and statistical
messaging systems. In addition, AXSMarine
is now referred to as ‘Web 2.0’, the second
reports. These programmes can be tailored to
has developed a state-of-the-art address book
generation of internet-based communities which
the individual user’s requirements and have strict
(AXSAddressbook), far outweighing anything
aim to facilitate collaboration and information
data management “rules” imposed for privacy,
available from MS. They also deploy and develop
sharing between users.
enabling in the right instances, users to share
MS plug-ins for various parts of the AXSMarine
some or all of the data with colleagues and/or
product suite.
AXSMarine produces a complete set of interactive,
internet-based
decision-making
tools and databases for shipping industry
clients – or even with all AXSMarine subscribers. Stephen
J.
Fletcher
is
AXSMarine’s
AXSDry
professionals. AXSMarine’s online tools are
commercial director. He draws attention to a
AXSDry is a complete set of online tools and
secure, fast and easy to use, and the databases
principle that underlies AXSMarine’s product
databases designed for the dry bulk shipping
they source are always up to date. Because
developments: “It is essential that users have
industry. Hundreds of operators, brokers,
they are internet-based, they are available from
their own critical data at their fingertips and
charterers and financial institutions save time and
any computer, anywhere; there is nothing to
are able to manipulate this data as required.
make better decisions by easily interacting with
download or install.
AXSMarine’s ‘view-and-do’ interfaces make
data from the suite’s powerful assessment and
industry
it simple to perform numerous searches
analysis tools. AXSDry enables its users to have
professionals can transform their massive
and calculations with changing variables; for
a complete view of the dry bulk shipping market
overload of raw data into useful, searchable
example, by creating standard assumptions in
— without having to sort through thousands of
information. As a result, they can work faster,
voyage calculations; vessel position and cargo
e-mails, or manage multiple programmes on their
manage more efficiently and make faster
search criteria can also be saved and reused
computer desktops. AXSDry offers subscribers
decisions. All of AXSMarine’s products enable
over and over.”
a wide variety of features, including Vessel
With
AXSMarine,
shipping
users to securely and selectively manage,
Manager, Cargo Manager, Voyage Calculator,
share, receive and publicise data with affiliates
How does it work?
FFA Manager, Fixtures, Distance Calculator,
or partners. Users decide which information
AXSMarine has teams of product specialists
Freight Matrices, Port Library and MOPS (Marine
to share, and with whom, by simply clicking
collecting raw data from reputable sources.
Operations Performance System).
on easy-to-recognise symbols. AXSMarine
AXSMarine subscribers also add their own
employs state-of-the-art security to provide the
information – always privately, and sometimes
AXSTracker facilitates the updating of incoming
highest integrity concerning the capture and
to share with other members. AXSMarine’s
tonnage e-mails without having to read them
maintenance of data.
purpose-designed algorithms transform this
all. Also available in an MS Outlook plug-in
All companies users’ privacy is guaranteed
raw data into databases of searchable and
is a facility where the original e-mail can be
at all times. Permanent availability is ensured
sortable information. These databases, when
saved and retrieved from the vessel database.
through rigorous redundancy and back-up
used and combined with their high-performance
In this way, a broker can transform thousands
routines. “In a complex and changing market,
online tools such as vessel searches, voyage
of positions into his own personal, searchable
82
theBaltic March 2010 www.thebaltic.com
AXSDry’s
Vessel
Manager
featuring
Corporate viewpoint AXSMarine file. AXSDry’s MOPS was launched in January
may take advantage of AXSMarine’s reselling
brokers and charterers to stop making all their
2009. With it vessel operators can enter voyages
agreement with LR Fairplay. Data migration from
calculations by hand or Excel. Instead, they can
and issue access to their agents to their online
prior systems is also available.
now use AXSTanker’s calculators to perform secure and simple T/C and freight calculations,
Statement of Facts manager, thus finalising the port expenses directly in their own database
AXSOffshore
automatically linking in information from the
saving re-keying of critical information.
Developed together with two high profile
suite’s vessel, distance, port DA, draft, bunkers,
shipbrokers, AXSOffshore has taken AXSMarine
and indices databases.
AXSAddressbook
further into the realms of a common platform
Many shipbroking, chartering and operating
which is database independent. Stephen J.
AXSMarine in Asia
organisations are considering, or have already
Fletcher explains: “In the offshore supply vessel
AXSMarine has been present in Asia since it
migrated to, an MS Outlook exchange messaging
industry there are many different kinds of vessels
opened an office in Singapore in early 2007.
platform. About 95% of required functionality,
which cannot simply be categorised like one
Incorporated in 2008, AXSMarine Pte. Ltd.
which has only been available in industry-specific
does dry bulk or tankers by size and dwt, or
manages product promotion and provides
message system offerings, is configurable off-
as container vessels are by size and teu intake.
dedicated user and technical support for
the-shelf within MS Outlook. The remaining
There are many specialised vessels and users
customers
functions are supported by developing specific
need to be able to manage a subjective view of
region. Since January 2009, existing product
plug-ins. One previously unresolvable issue has
the vessel’s category.”
enhancement responsibilities have also been
across
the
entire
Asia-Pacific
been how to manage company-wide contacts
AXSOffshore comes with a pre-populated LR
migrated to the Singapore office. AXSMarine SA
in MS Outlook – which does not provide an off
Fairplay database but it is commonly known that
in Paris focuses on new product development
the shelf company address book. AXSMarine
this will only cover around 60% of the technical
and technologies. Stephen J. Fletcher relocated
has developed its AXSAddressbook to function
needs of the company, therefore AXSMarine
to Singapore in early 2008 and performs the
seamlessly with MS Outlook exchange server,
will add any required technical and commercial
company’s commercial directorship’s role from
completing the tool set to confidently move from
information prior to the client’s commencement.
there.
AXS-Alphaliner
technical staff during the 4th quarter of 2008
AXS-Alphaliner is an enhanced version of
and early 2009, forming a cohesive team of
Free Distance Table
Alphaliner, which joined forces with AXSMarine
eight people, adding to its team of 12 in Paris.
Bucking the market trend, AXSMarine is now
in 2005. AXSMarine’s powerful data sorting,
“Singapore is quickly becoming a hub for all
providing the industry with a free distance table
processing and sharing technologies transform
sectors of the shipping industry,” says Stephen.
from its public website. Stephen J. Fletcher
Alphaliner’s rich databases into true productivity
“We have established ourselves here to be
draws attention to the fact that there were a
tools. AXS-Alphaliner provides its subscribers
closer to our current and future customers in this
couple of ‘free’ alternatives available on the
with a unique picture of the liner industry,
exciting and fast-growing region.”
market which began charging last year. “Our
unparalleled in its accuracy. Members benefit
Seeing is believing for AXSMarine customers:
distance table has been integrated within our
from features such as Vessel Fixtures, Sales
contact the company to benefit from a free trial
products for more than five years and it has
& Orderbook, forward open Vessel Positions,
subscription to AXSDry, AXS-Alphaliner, AXSS&P,
never been our intention to charge for the
and Vessel Descriptions, as well as daily
AXSOffshore, AXSTanker or AXSAddressbook.
service,” he says. Over 6,000 individuals have
news updates, searchable news archives, a
subscribed to this free service since it was
weekly newsletter and a whole series of very
launched at the beginning of June 2008.
detailed market reports and statistics. AXS-
industry-specific messaging to an MS Outlook exchange environment.
AXSMarine added sales, support and
Alphaliner is now fast becoming the shipping
AXSS&P
industry’s standard database from which supply
AXSS&P is the first AXSMarine product to
forecasting and predictions are made. Their
maintain the common platform theme, but
Alphaliner Monthly Monitor was launched in May
AXSMarine Headquarters
this time without providing a sharing capability
2009, providing a detailed statistical view of key
80 rue Taitbout
between different clients. Encompassing all of
container market indicators.
75009 Paris FRANCE
their standard search and database features and
Tel: +33 1 53 43 05 70
many more, AXSS&P allows users to override
AXSTanker
technical specifications, add their own vessels,
AXSTanker is a set of up-to-date knowledge
AXSMarine Pte Ltd
incorporate their own proposal templates, and
databases and high performance interactive
10A Trengganu Street
importantly the system was designed with full
tools designed for the specific needs of
Singapore 058464
integration to MS Outlook, allowing users to add
competitive tanker brokers. Several hundred
Tel: +65 6225 3115
e-mails and attachments directly to vessels in
individual shipbrokers use the AXSTanker suite
the database.
to indicate the positions of some 8,000 ships,
AXSMarine Limited (London)
Conversely, users may retrieve e-mails and
update tonnage, prepare position lists, or consult
60 Cannon Street
attachments directly from the AXSS&P database
the tanker register, port database and distance
EC4N 6NP
– ultimately reducing the need to search and
tables. The exclusive membership of tanker
Tel: +44 207 002 1089
search e-mail archives. Clients may choose
brokerages votes to approve the admission
which technical registry database(s) they wish
of any new applicant. The recent and much-
E-mail: commercial@axsmarine.com
to subscribe to and AXSMarine will incorporate
lauded additions to AXSTanker are AXSTanker
MSN Messenger: support@axsmarine.com
these
and Gas Calculators, which are tools allowing
Yahoo! Messenger ID: axstanker
subscriptions.
Alternatively,
clients
theBaltic March 2010 www.thebaltic.com
83
Ship finance
Credit crunch hits home Trust was a commodity in short supply at the Ship Finance Forum in Amsterdam, reports Helen Hill
R
estoring trust between the maritime
only that it had a more modern fleet – the banks
done deals, leaving the yards in deep problems.
community and the banks was the
themselves had seen their credit profile change,
Yards were hurt and desperately worried about
theme of the recent annual Mare
yet the owners were the ones paying for it.
where the cash is going to come from and if
Forum Ship Finance Forum, but par-
owners will let orders slip, he stressed. And if
ticipants left with the distinct feeling that there is
they do renege on deals, who will pay for the
Yards fear default
work in progress? “Are European owners going
Tineke Netelenbos, president of the Royal
Clarksons managing director, Martin Stopford,
to prove trustworthy enough?” he asked.
Association of Netherlands Shipowners (KVNR)
gave a thought-provoking speech demonstrating
Stopford said generally, the tanker sector
and a former Dutch transport minister, pointed
there is also a distinct lack of trust when it comes
was not as bad as other sectors, partly because
out in her opening speech that “trust comes on
to the shipyards’ view of owners. Referring to
of the phase-out of the single hulls. But there
foot and leaves on horseback”. She called on
recent trips to Asia, he said there were real
was no doubt that the dry bulk and container
the Dutch government to consider a temporary
heartfelt worries that western owners would
sectors face massive over-supply.
suspension of loan repayments for struggling
walk away from what the yards thought were
still a long way to go.
shipowners, similar to measures put in place by the Italian government. Chiara de Poli, an Italian chemical tanker owner, operating out of the Netherlands, backed the idea. But the many Dutch banks present showed little enthusiasm. Banks said they prefer to look at cases on an individual basis rather than take a blanket approach to the matter. De Poli also made sure that bankers heard the message that the banks themselves seemed to show little trust in shipowners. She said there was a terrific amount of bureaucracy nowadays, with the company having to spend significant amounts of management time on unnecessary paperwork every three months, even though the owner is a well-established customer. Over-regulation of the banks was mentioned several times. Hugo Modderman of DVB Bank said that German banks could not do business because the regulator is taking up so much time with constant demands. George Gordomichailis, shipowner, said because of state intervention German banks were only in the business of saying “no” at the moment. He said while the owners’ risk profile had not really changed –
Lender confidence is at a low
84
theBaltic March 2010 www.thebaltic.com
Ship finance Over-supply takes hold
interest, he told delegates. The industry should
tough times ahead. Owners want more support
John D’Ancona of Howe Robinson said 2010
try to work together to solve this problem. “If
from banks but banks think shipping risk needs
would certainly be a year when the pain of over-
they do not, then the ‘Black Hole’ could last for
to be repriced.
supply is felt. Even if more scrapping takes place
five or more years...”
and if it happens at a younger age, this would
And banks believe they are facing more risky
Addressing the issue of trust, Hubbard said
markets and they have to be more wary about
that it is very difficult to do so after all the parties
who they lend to. Taco Van der Mast of NIBC
Nicholas Hubbard, managing director of
had let each other down so badly. “Can we
Bank, stressed that it was wrong to try and solve
Galbraith’s Ltd, presented a similarly gloomy
trust the judgement of the management of
problems caused by lack of equity by using
picture in the container sector. Describing the
liner companies, who almost all either over-
senior debt. He also pointed out that one reason
box market as a “right royal mess”, Hubbard
ordered themselves or provided the charters for
banks were being so prudent was because they
said there had been horrendous 15% fleet
shipowners to finance an extensive newbuilding
are essentially “shell-shocked”.
growth projected for 2008 – most of which was
order book?
not solve the problem, he warned.
Van der Mast also pointed out that owners
delivered. “This was the first wave of SLCC –
“Can we trust the banks that continued to
had made huge amounts of money in the
Stupidly Large Container Carriers!” he claimed.
finance this ever-increasing orderbook that was
boom years. What had happened to this? An
But if this overcapacity wasn’t bad enough, it
clearly based on an excessively optimistic cargo
uncomfortable silence fell on the room.
was then followed by a further 12.8% growth
growth profile?
A leading Dutch shipowner, Coco Vroon, said
in 2009, with 11.3% and 10.1% increases in
“Can we trust the shipowners, or should I
in his mind the gap of trust was within banks.
the fleet for the next two years, “at a time when
say primarily the shipmanagers, who could not
Personal relationships are still important in the
demand had fallen off a cliff”.
resist the opportunity to take the commissions
industry and owners and bankers in the room
If the market is to return to some form of
and management fees from contracting huge
said they trusted each other on a one-to-one
normality, cancellation is the only way forward,
numbers of newbuildings of ever-increasing
level. But as Vroon said, above them is a gap
he urged. This was obvious but so far the yards
sizes?”, Hubbard asked.
within the bank itself, with the boards no longer
had held firm unless the ordering party had gone
trusting the lenders at the coal face. For the
bust or owners had managed to get out on a
moment, trust certainly seems to have galloped
technicality, he said. It is in the shipowner’s, liner
An industry in shock?
off into the sunset, although everyone was
company’s and bank’s favour to cancel, and it
Trust is clearly lacking. Owners and bankers all
too polite to say so. It may be a while before
could be argued that it was also in the yard’s
recognise the problem and expect increasingly
it is back…
Not quite an SLCC?
theBaltic March 2010 www.thebaltic.com
85
Ship finance
Where’s the money? Ship finance is still available under certain circumstances – but there are no easy answers
C
an an owner get funds to finance
Traditional sources
bridge the newbuildings on order. We don’t see
a new ship in today’s market? The
Any light on the horizon for traditional bank
a queue of new banks wanting to enter shipping.
answer, according to Janos Koenig,
funding? “There is some easing of credit but far
Talk of Chinese banks stepping in is rife and
managing director of London-based
from enough to cater for the needs of the industry.
there have been a number of well publicised
financial consultants Eurofin, is yes. But it is
However, transactions that are supported by
transactions but whether the Chinese banks will
a highly qualified yes. “There are some banks
Export Credit Guarantees are still available,
actively support foreign owners who have no
lending some money to some owners,” he says.
but here, of course, the banks are taking
financing in place, or allow the shipyards to use
“Those owners who have committed facilities
State risk, not shipping risk,” explains Koenig.
their deposits and then support local shipowners
are getting funds, albeit either in a reduced
“Some new projects may attract financing from
to build up the Chinese fleet, is open to question.
quantity or at a higher price, because the loan
governmental or quasi governmental banks and
In the US there have been some well publicised
to value ratio is no longer what it was. This is
institutions, and there is evidence that Chinese
bond issues recently at very high coupons. And
perfectly normal and understandable behaviour
banks will provide funding to international owners
that will be the key, high returns will always find
by the banks. If you are looking for new money
where Chinese newbuildings are involved, but
some money, somewhere.”
then you need to be an established company
a good corporate and transparent structure,
Koenig explains that mezzanine financing
and an existing core and profitable client of a
solid financial status and good reputation are
could be useful and grow in today’s conditions.
good bank. Plus you need a lot of equity to
essential. Again in southeast Asia there is some
“Mezzanine financiers can obtain mezzanine
invest before the bank will part with anything,
anecdotal evidence that regional banks may be
returns for what has been considered as senior
and you need employment, a good corporate
able to fund regional projects. In other instances,
lending in the past,” he says. “In general, the
and transparent structure, solid financial status,
shipping
emerging
overall remuneration including fees, spreads,
a good reputation and a willingness to offer the
markets can fall within the lending parameters
and equity participation will have to produce
banks ancillary business such as swaps, bunker
of specialised institutions such as EBRD. And
yields in excess of 10% for the financier.”
hedging, M&A business or significant deposit
there are a few commercial banks that are still
Looking to the future, Koenig is not over-
balances to increase the returns. Balance sheet
liquid for special cases such as target sectors
optimistic in the short term. “For as far as we can
lending, if not dead, is a dying breed.”
and
transportation
in
in emerging markets, but these banks have the
see ahead credit will remain tight and there will
Koenig says for the relatively few deals being
pick of available transactions and the loan costs
simply not be enough money available anywhere
done today, loans are between 40% and 60%
are high. Overall, the total availability of funding
to meet the demand for all the new ships which
of today’s valuation. “Tenors are also shrinking,”
barely scratches the surface and falls short of
are still being built,” he says. “But who knows,
he continues. “We have seen tenors reduced
the known requirement by a very long way.”
Goldman Sachs sees world growth at 4% plus,
to below 10 years for newbuildings albeit with
and in a shorter time than we can see now, we
longer profiles. Margins in general are north of
may see much softer lending terms. In today’s
250 basis points and fees 100 plus, which does
Outside the box
fragile, volatile economic environment, where
not create huge overall problems in today’s low
What about new sources of funding, coming
counterparty risk has increased tremendously,
interest environment. As for the start-up owner,
in to fill the gap left by shipping banks with no
the ship financing landscape has changed
they can no longer get off the ground without a
credit? “There has been a lot of talk about new
dramatically. Shipowners and ship financiers
lot of equity.”
sources and peripherally they do play a part,”
alike need to think outside the box.”
says Koenig. “However, they can certainly not satisfy the demand for funding required to
theBaltic March 2010 www.thebaltic.com
87
Geographical focus Latin America
Stage set for recovery in 2010 Almost all Latin American economies have suffered as a result of the global recession, and this has adversely affected regional trade with the rest of the world. There are signs, however, that the coming year will see a sustained recovery in export and import cargo flows
A
ccording to the latest figures produced
The region’s mining and oil sectors fared the
Latin America and the Caribbean. The region’s
by the UN’s Economic Commission
worst, with the value of exports dropping by
economies are estimated to have contracted by
for Latin America and the Caribbean
over 42% in the first nine months of last year.
around by 1.8% last year compared to 2008,
(ECLAC), the total value of exports
Exports of manufactured goods, by contrast, fell
with GDP per capita falling by about 2.9%.
from Latin America and the Caribbean fell by
by around 25%, while livestock exports dipped
24% in 2009 compared to the previous year, as
by 18%.
Economic performance is mirrored by cargo throughput at the region’s main container ports.
a result of the global economic crisis, while the
According to figures from the Association of
value of exports from the region contracted by
American Port Authorities (AAPA), container
around 25%. Moreover, the region was hit by
Pace of recovery picks up
throughput at ports in Central and South
a slump both in export prices and volumes, a
ECLAC
economic
America increased from 16.4 million TEU in
combination which, ECLAC says, has not hap-
recovery will be quicker than it expected just
2005 to 27.2 million TEU in 2008, a rise of 66%
pened since 1937.
a few months ago, and the commission now
in just five years. While final year statistics for
While these figures are alarming, ECLAC
projects that regional economic growth will
2009 are not available as yet, it is likely that
does see some positive trends. In particular,
be around at 4.1% over the coming year. The
they will show a double-digit rate of contraction
the organisation points out that exports and
commission anticipates positive growth rates
compared to 2008.
imports fell even more sharply, by 31 and 29%
for most countries, but suggests that Brazil will
As an indication of this negative trend,
respectively, in the first half of last year, indicating
experience the fastest rate of economic growth
the region’s biggest container port, Santos in
a relative recovery in the second half of 2009.
in 2010, at 5.5%, followed by Peru and Uruguay
Brazil, recently released 2009 figures and these
This trend, it suggests, is the basis for a much
(5%), Bolivia, Chile and Panama (4.5%) and
showed a drop in throughput of 16.8% to 2.23
better outlook in 2010.
Argentina (4%).
million TEU, from 2.67 million TEU in 2008. Other
says
Latin
American
According to ECLAC, the regional economic
While generally upbeat about prospects for
container ports in the region are likely to have
recovery in the latter part of last year was largely
2010, the commission expresses doubts about
experienced similar, and possibly even higher
due to a rise in commodity prices affecting
whether the recovery is sustainable in the longer
rates of downturn as a result of the slump in
exports of copper, zinc, oil, wheat and soya.
term, without structural changes to reduce
international trade.
Furthermore, Latin America benefitted from
dependence on external markets. “The worst
Indeed, the port authority of Buenos Aires
strong demand from China in the second half
of the crisis is behind us. The motors of growth
has reported that container volumes at its
of 2009 for a range of goods, including iron ore.
have been turned on again, but we don’t
terminals slumped by over 25% in the first 11
The economic downturn has hit trade across
know how long the fuel will last,” says ECLAC
months of last year to 0.83 million TEU, from
executive secretary, Alicia Bárcena.
1.12 million TEU in the equivalent period in
Latin America, but some countries have suffered more than others. For example, while exports
2008. Meanwhile, in the Peruvian port of Callao,
from Venezuela fell by around 42% in 2009, Chile
container traffic levels were down 12% in 2009
and Mexico experienced a 22% contraction, and
2009 - A grim year
at 1.08 million TEU compared to 1.12 million the
Central American countries outside of Mexico
The global economic crisis put an an end to
year before.
recorded only a 6% fall in exports.
six consecutive years of economic growth in
88
theBaltic March 2010 www.thebaltic.com
Geographical focus Latin America Investment prospects
Manila, which has interests in facilities in Suape,
TCP may soon face local competition, as
Longer term prospects for Latin American ports
Brazil; Guayaquil, Ecuador; and Buenaventura in
the Uruguayan government is now looking at
are rated highly, however, and container volumes
Colombia. The company has, moreover, recently
developing a second container terminal in the
are expected to recover strongly in 2010 in line
been named as the preferred bidder for a terminal
port and has indicated it will open a new tender
with economic growth. As a result, investment in
concession in the key Mexican port of Manzanillo.
this year. Potential bidders are expected to
regional port infrastructure seems unlikely to be
The new three berth facility will have a depth
include HPH of Hong Kong and APM Terminals.
derailed by the global crisis.
alongside of 16m and will be capable of handling
Not all investment projects in Latin American
about two million TEU a year, doubling the port’s
container ports involve global players, however.
existing throughput capacity.
In Valparaiso, for example, the local terminal
One of the biggest investors in Latin American ports at the present time is DP World, which is cutting back spending in some areas of the
operator, TPS, announced in January that it
world, but not in Latin America. The group
would be investing in capacity to accommodate
is, for example, making a major commitment
Lines expand capacity
larger vessels. This project, which will primarily
to Embraport, Empresa Brasileira de Terminais
The world’s second container shipping line,
involve dredging three of its berths from 12 to
Portuários, a terminal complex which is being
MSC, is also extending its container terminal
14 metres in depth, should be finished by April
developed near to Santos in Brazil, in partnership
portfolio through investment in Latin America.
2010. Since 2000, TPS has invested around
with a local company called Odebrecht.
The company has a 50% stake in the port of
$80 million in various projects which have helped
The first phase of Embraport is scheduled
Navegantes in Brazil, which was almost certainly
make Valparaiso one of the leading gateways for
to be completed in 2012, at which point the
the fastest growing container terminal in the
containers and general cargo on the west coast
terminal will have a throughput capacity of around
region last year, with throughput up 73% to
of Latin America.
one million TEU. When fully developed the new
413,000 TEU in 2009, and this facility is to be
terminal will be able to handle 1.8 million TEU
expanded to keep pace with demand.
annually, making it one of the biggest gateways for regional container traffic.
In addition, the MSC affiliate GTL-Europe
Bulk cargoes give Santos a lift
Terminal is backing a new development in Santos,
Last year the port of Santos in Brazil posted a
DP World is also investing heavily in the port
called Brasil Terminal Portuario (BTP). This is due
highly satisfactory cargo throughput result overall,
of Callao in Peru, where its new terminal at Muelle
to be operational in 2012 and will involve around
given the prevailing economic circumstances.
Sur is set to open in the first half of this year,
$680 investment in a terminal with a 1.1 million
The 82.8 million tonnes handled by the port, the
around 12 months ahead of schedule. Maersk
TEU annual capacity, which will be equipped with
biggest in Latin America, compares with 77.8
Line is reported to have been lined up to be the
12 super-post-panamax gantry cranes. Alongside
million tonnes in 2008, an increase of 2.2%.
terminal’s first key customer.
this, BTP is to develop a new liquid bulk terminal
DP World Callao will incorporate 650 metres
capable of handling 1.2 million tonnes a year.
This rise in cargo traffic was due to an unexpected upturn in both dry and liquid bulk
of quay and will be able to handle post-panamax
The development of container facilities in
traffic. Whereas the port authority was originally
vessels. The terminal will have an annual capacity
the Uruguayan port of Montevideo has largely
forecasting a 7% drop in dry bulk goods and
of around 850,000 TEU in the first phase, and a
been the preserve of TCP, a subsidiary of the
a 3% fall in liquids, the final 2009 year figures
maximum of around 1.4 million TEU in the second
Antwerp stevedore, Katoennatie. The company
showed an upturn of 12 and 10.6% respectively.
phase.
has recently opened up a new quay and taken
This was, however, offset by an 11.4% drop in
delivery of three new ship-to-shore container
general cargo traffic, much higher than initially
cranes.
forecast.
Another global terminal operator with a significant Latin American portfolio is ICTSI of
Movements of sugar represented one of the biggest dry bulk increases seen at Santos last year, with almost 14 million tonnes handled, 36% more than the year before. Shipments of maize were up 48%, to 3.5 million tonnes, and salt by over 19%, to 0.8 million tonnes. Wheat traffic was down, however, by over 11%, at 1.2 million tonnes. The port of Santos has completed a number of infrastructure projects over the past year, most notably dredging the depth of water in the main navigation channel to 15 metres to facilitate access by larger ships. Looking to the future, the port authority has recently announced that a joint venture between Louis Dreyfus and Cargill has been named as the preferred bidder for a new grain terminal concession, called Tegran. Final negotiations are now understood to be in progress with regards to this project, which would enhance the port’s dry bulk cargo handling capacity quite significantly, through the development of a 40,000m2 site in the port. Guayaquil, Ecuador
theBaltic March 2010 www.thebaltic.com
89
Port focus Middle East
Mixed messages from Middle East box ports A
s the well-documented financial prob-
optimism generated by a likely growth in imports
out that Jebel Ali handled significantly more
lems of the emirate of Dubai have
is underpinning ongoing investment in container
containers in the second half of last year than in
demonstrated, the Middle East is cer-
port infrastructure, although some planned
the first, indicating that a recovery is underway,
tainly not immune from the effects
projects have been put on hold, temporarily at
which bodes well for 2010.
of the global economic crisis. However, the
least.
A second phase of expansion at the Jebel
performance of ports across the region suggests
Dubai’s Jebel Ali port remains the Middle
Ali container terminal was completed in the
that the impact on the region’s containerised
East’s biggest container gateway by some
first quarter of 2009, taking annual throughput
cargo flows has been uneven.
considerable distance, but last year experienced
capacity at the port to around 14 million TEU.
Longer term prospects for the Middle East
a downturn, after over 13 years of constant
As a result, Jebel Ali has more than enough
port sector are still rated highly though, especially
growth. Jebel Ali handled around 11 million TEU,
capacity for the immediate future and plans
with oil prices on the rise again. This trend will
6% down on 2008, which was perhaps a better
for further phases of development at the port
give a boost to consumer spending and also
performance than many analysts predicted.
have consequently been put on hold, pending a
government-backed infrastructure projects. The
Furthermore, the port operator, DP World, points
recovery in the market.
The red Sea Gateway terminal in Jeddah began cargo operations in December
theBaltic March 2010 www.thebaltic.com
91
Port focus Middle East Instead work continues on another UAE
container terminal expansion last year and now
project in which DP World has an involvement,
has an estimated annual throughput capacity
the development of a multipurpose port at
of 5.5 million TEU, which should be sufficient
Taweelah in Abu Dhabi. Progress on this facility,
for the short term at least. The next phase of
which includes a major new container terminal,
development at the container terminal, which will
rapidly, the UAE east coast port of Fujairah
had been delayed by technical issues but is now
involve the creation of three more berths, adding
is poised to raise its profile in the liquid bulk
reported to be on course to become operational
a further three million TEU of capacity, will not
sector through the development of new oil
in 2012.
now proceed until industry prospects are more
tanker handling facilities. Four additional oil
positive, the Port of Salalah has confirmed.
berths are under construction and are due
In contrast to DP World, the Sharjah-based terminal operator, Gulftainer has announced that
Salalah does, however, have a number
throughput at its UAE facilities – Khorfakkan
of non-container port projects in hand. For
Container Terminal (KCT) and Sharjah Container
example, Salalah Methanol Company is due to
Terminal (SCT) – increased by nearly 10% to 2.75
start operations soon and the port has plans
million TEU in 2009.
Fujairah ups bulk investment While its container business is shrinking
to be commissioned in June this year. These will total 1500m in length and will have an 18m draft, allowing the new berths to handle
to develop a new terminal specifically for the
loaded VLCCs. The throughput capacity of
This impressive performance in a difficult
company which should be operational by early
the four oil berths, which are each equipped
year, when many container terminals throughout
2012. In another key project, Tata Steel of India
with eight loading arms, will be around 25
the world saw substantial downturns, perhaps
plans to start exports of limestone through the
million tons a year.
reflects the fact that KCT in particular has the
port in 2011, and a dedicated loading facility is to
reputation of being one of the region’s fastest
be constructed on the new general cargo berth
and most productive terminals. This has led to
to handle this traffic.
a number of carriers increasing their use of the
One of the Middle East ports that has been
port for “hub and spoke” type transhipment
most affected by the recession is Jeddah in
operations.
Fujairah is also expanding its dry bulk handling capacity, largely to meet the requirements of its important aggregates trades. A second bulk loader should be
Saudi Arabia. Over the first nine months of 2009,
operational by June 2010 and this will have
Over the past year, Gulftainer has continued
container throughput at Jeddah was 2.28 million
double the loading capacity of the existing
to expand its terminals. KCT received six new
TEU, 9% down on the first three quarters of
loader in the port. Although Fujairah’s dry
ship-to-shore gantry cranes in 2009 and a 400m
2008, and the full year figures are expected to
bulk business was affected last year by the
long new berth, with a draft alongside of 16.5m,
show a similar level of contraction.
regional downturn in construction, the port
is now almost ready and will be able to handle container vessels up to 13,000 TEU size.
Considerable investment has recently been made in Jeddah, with DP World taking delivery
points out that its major markets are Qatar, Kuwait and Bahrain, all economies which are
At the Omani port of Salalah, container
of six new quayside gantry cranes for its Jeddah
volumes have also remained relatively buoyant.
South terminal in the last quarter of the year.
Throughput in the first half of last year was
Moreover, in December the new Red Sea
The main infrastructure development
around 7% up on the equivalent months of 2008,
Gateway Terminal, built on a greenfield site in
completed in 2009 in Fujairah was the
and this is reported to have been sustained in
Jeddah, handled its first vessels. The new facility
commissioning of 900m of new general
the second half of 2009 as well, as a number
has raised capacity in Jeddah by around 1.5
cargo berths. Since completion, these have
of new liner services were attracted to the port.
million TEU annually. Competition in the port
Local traffic from the adjoining free zone has also
is sure to increase as a result, and this may
been used for conventional general cargo
picked up strongly.
raise efficiency levels still further, strengthening
The Port of Salalah completed Phase II of a
Jeddah’s position as a Red Sea trade hub.
KCT has a reputation as one of the most efficient terminals in the region
92
theBaltic March 2010 www.thebaltic.com
expected to recover relatively quickly.
handling, but also to accommodate vessels requiring alongside repairs.
Cargo focus Iron ore
Iron ore trades in China’s hands? China remains crucial to the global iron ore trades, driving investment in new tonnage and port facilities. Market developments in 2010 may show whether it is the Chinese importers, or the world’s leading mining groups, that really call the shots
T
here is no doubting where the focal
play. If that happens, then, while seaborne iron
point of the world iron ore industry is
ore volumes are still likely to rise over the course
right now and will continue to be for
of the coming year, the increase may well be less
the foreseeable future. China is the
than many bulk shipowners are hoping for.
world’s economic powerhouse – a fact that has
If the big three mining groups, BHP Biliton,
been brought into even sharper relief by sluggish
Rio Tinto and Vale, do seek to use their market
economic recovery in the world’s developed
power to push up prices, China may also start
economies – and surging steel output from
to cultivate alternative sources of supply, to
the country’s steel plants is driving demand for
improve its relative bargaining power, including
imported iron ore.
Russia, Ukraine, South Africa, Chile and Canada.
According to data from Chinese Customs,
As these regions involve relatively long haul
China’s iron ore imports jumped by around 42%
ocean transportation, the impact of any sourcing
in 2009, to hit 628 million tons, compared with
changes on the bulk shipping market is not likely
444 million tons in 2008. The country’s biggest
to be too significant.
supplier of iron ore continues to be Australia, followed by Brazil and India.
Prices to rise?
Forecasts suggest Chinese steel output is likely to rise further this year, from a record 570
It has to be said that there is still a wide
million tons in 2009 to around 600 million tons
divergence of opinion within the market when
in 2010, and this trend will suck in more iron ore
it comes to likely iron ore price trends, and this
imports as well. However, the extent to which
reflects the volatility in the market over the past
this increased steel output will be translated into
year. In December The Steel Index (TSI) daily
higher seaborne iron ore volumes depends on a
iron ore reference price hit its highest level in
number of factors, most notably price.
12 months, reaching $107.40 per dry metric
At the time of going to press, sensitive
Capesize demand patterns are changing
discussions were reportedly underway between
tonne, having reached a low point of $76.10 in September.
the leading iron ore producers, including BHP
hike in benchmark prices compared with 2009.
Overall, the prevailing view within the market
Biliton, Rio Tinto and Vale SA of Brazil, and
(China was reportedly not being included in
is that iron ore prices will rise in 2010, having
Japanese steel companies. There is a suggestion
the initial talks after one of Rio Tinto’s Chinese
dropped back in 2009 as a result of the global
that an annual contract price agreed through
executives was arrested on “spying” charges.)
recession. The World Bank Commodity Price
these discussions may well be presented
Higher import prices might bring Chinese
Data Report in fact suggests that the average
to Chinese steel mills as a “fait accompli”,
domestic iron ore, which is of a lower quality to
iron ore price in 2010 could rise to its second
and some analysts are forecasting a substantial
that produced in Australia and Brazil, more into
highest level ever, behind only 2008.
theBaltic March 2010 www.thebaltic.com
93
to Key m ct ee opp ic t y or pr ou tun of r es fe ity sio llo na w ls
6th Annual
Ar
Shipping Summit Examining the latest opportunities and developments
International Conference and Seminar Tuesday 27th, Wednesday 28th and Thursday 29th April 2010 Helsinki Congress Paasitorni, Helsinki, Finland
£100 off for Baltic online readers, quote KT0111BOAD to claim
Event Highlights
New for 2010
• Implications of increasing Arctic development on security, sovereignty and the environment
• Two breakfast briefings focus on environmental developments and technical system designs
• Operational challenges: ice management, crew training and logistics
• Industry stakeholder panels analysing ice management and crew training
• Technical solutions and ship designs: • Speedy Business Card new designs and concepts for ice going Exchange ships, icebreakers and Arctic LNG • Choice of concurrent streams • Breakout sessions on key topics for for Arctic LNG, icebreakers and indepth discussion offshore
Pre-Conference Seminar Monday 26th April 2010
Understanding the Challenges of Arctic LNG Technical Innovations and Practical Solutions
Chairmen and speakers will include Keynote Speaker: Sergey Donskoy, Deputy Minister, Ministry of Natural Resources of the Russian Federation > Anders Backman, Rederi AB Transatlantic > Josep A. Casanovas, DG TREN, European Commission > Reidun Haahjem, GARD AS > Jan Fredrik Hammer, Beluga Projects (Norway) AS > Dr Mikhail Grigoriev, GECON > Professor Frédéric Lasserre, Laval University > Malcolm Lowings, Golder Associates > Wilhelm Magelssen, DNV > Mikko Niini, Aker Arctic Technology Inc > Capt David Snider, Martech Polar Consulting > Dr Kirsi Tikka, ABS > Professor Peter Wadhams, DAMTP, University of Cambridge
Sponsors and Exhibitors to date:
Supporting Organisations:
Registration Hotline: +44 (0)20 7017 5511 For more information and for the latest programme visit: www.arcticshippingsummit.com Organised by:
This brochure has been produced using environmentally friendly paper sourced from sustainable forests and is chlorine free.
Cargo focus Iron ore It is against this background that there has been a significant increase in the use of iron ore
last October and will involve the movement of
tonnage will allow it to transport at least 70%, and
around 1.5 million tons of iron ore a year.
possibly up to 85% of Brazil’s iron ore exports. In
swaps (as reported in the last issue of The Baltic)
K Line has also signed two contracts with
a report last year the company suggested that,
as steel manufacturers, traders and mining
Rio Tinto, with a view to facilitating the latter’s
“Shipowners of capesize tonnage have to plan
companies seek to minimise their exposure to
increased iron ore exports to China. These
for a future where the iron ore trade from Brazil
price swings. TSI describes the growth in iron
involve an estimated shipment of three million
to China to a large degree is being industrialised
ore swaps using its index as “nothing short of
tons of iron ore a year through the charter of two
and has less impact on the spot market.”
spectacular”.
capesize bulkers from 2011.
In September 2008 Vale had just three
One of the leading proponents of the iron ore
Rio Tinto has also entered into an arrangement
capesize bulkers in its fleet. Within the next two-
swap concept is London Commodity Brokers,
with NYK, this time with a 20-year contract
three years the company is forecast to control
which set up its London Dry Bulk (LDB) division
to transport iron ore from Western Australia
around 50 bulk carriers of various sizes. Vale’s
in 2008. This relatively new venture aims to
to China. Shipments will start in 2013 using a
emergence as a major provider of tonnage for
replicate London Commodity Brokers’ successful
250,000 dwt bulk carrier, and the anticipated
its own iron ore trades represents a big change
thermal coal trading model, which combines
annual volume is around 2.7 million tons. This
for the bulk shipping business, and will inevitably
both physical broking and swap products, in the
is the first long-term deal between NYK and Rio
have a significant impact on the short-term
iron ore sector.
TInto and also involves a three-year charter on a
charter market.
LDB’s Richard Herselman says: “Our focus is on developing the prompt physical iron ore
smaller 170,000 dwt bulk carrier that will start in April 2010.
Infrastructure expands
market, while broking an iron ore swap based
Last October another leading Japanese
on CIF China fines (62% FE). The two-pronged
carrier, MOL, signed an agreement with China’s
As well as having an effect on bulk carrier
approach has benefits, as the development of
Baosteel group aimed at strengthening their
investment patterns, China’s iron ore import
the physical iron ore market will add robustness
relationship, while in the same month becoming
needs are also behind some important port
to the swap market and facilitate liquidity in
the first overseas shipowner to sign a long-term
infrastructure developments. Iron ore shipments
both.”
iron ore transport contract with the Jiangsu
from Port Hedland in Australia are reported
The LDB approach appears to have already
Shagang Group of China. Under the terms of
to have increased by almost 23% in 2009
paid dividends, as the company claims to have
the latter deal, MOL will transport iron ore from
compared with 2008, and the port authority
taken up to 40% of the Singapore Exchange
Australia and Brazil for Jiangsu Shagang, under
has indicated that iron ore shipments could
(SGX) market in iron ore swaps based on the
a 10-year contract starting late 2011. A 207,000
double over the next three years, as BHP Billiton
TSI index. Mr Herselman adds: “The concept
dwt iron ore carrier is to be constructed at
expands its export activities. BHP itself is building
has generally been well received as companies
Japan’s Universal Shipbuilding Corporation for
two new iron ore berths in Port Hedland which
are looking for tools that can help them manage
the contract.
should be operational in 2011 as part of the
price risks. There are some parties in China
One of the biggest winners to emerge from
so-called RGP5 expansion project, while the
who do not want to see the development of
the burgeoning Chinese iron ore import trade,
port authority has plans to develop a further new
iron ore swaps, but markets evolve and we see
however, is South Korea’s STX Pan Ocean, which
facility, capable of handling 400 million tonnes a
the emergence of iron ore swaps in the Chinese
last September signed what is claimed to be the
year in the outer harbour after 2014.
iron ore trades as inevitable. Certainly if you look
largest consecutive voyage contract (CVC) with
Meanwhile, Vale has confirmed that it plans to
at the coal sector, no-one would want to go
Vale. This will see STX Pan Ocean transport iron
construct a fourth pier at the Ponta da Madeira
back to the days of fixed annual contracts only,
ore from Brazil to China in a 25-year contract
Seaport terminal in Brazil. Proposed investment
compared to the flexible trading arrangements
running from 2011 that is estimated to be worth
in the port is estimated at around $2.6 billion,
that are now in place, and in a few years time
around $5.84 billion.
making this probably the biggest current port
the iron ore market will be similarly won over,
infrastructure development in South America.
even in China.”
Vale also has plans to build distribution
Vale develops fleet
centres on Asia which will be run as “virtual
While signing contracts with operators like STX
mines”, enhancing its flexibility in servicing
Capesize forecast
Pan Ocean, and also with NYK and Star Bulk
markets that are long distances away from its
Whatever happens in 2010, there is no real doubt
Carriers in the past year, Vale’s main focus is
production facilities. In 2010 the company plans
that in the longer term China’s iron ore imports
on building up its own fleet of bulk carriers
to start construction of a distribution centre at
will continue to move upwards and the need to
to support the expansion of Brazilian iron ore
Teluk Rubia in Malaysia. This will include building
provide capacity to meet the country’s growing
exports to China.
a new terminal capable of handling vessels up
trade with Australia and Brazil in particular is
Vale has orders for 20 Very Large Ore Carriers
to 400,000 dwt and able to handle up to 30
increasingly underpinning demand for bulk
(VLOCs) in hand, including 12 400,000 dwt
million tons of iron ore a year in the initial phase,
carriers.
“Chinamax” bulk carriers at Jiangsu Rongshen
with scope for expansion up to 90 million tons
Japanese owners are marketing hard in this
Heavy Industries in China, which are due to
in future. Operations are likely to start in 2013,
sector, as reflected by a number of significant
be delivered in 2011 and 2012. In addition,
Vale says.
deals which they have secured in recent months.
the company is reported to have purchased
In China, also, iron ore reception facilities
K Line, for example, has concluded a long-term
16 existing bulk carriers and oil tankers for
are being upgraded. As an example, the port of
iron ore transport agreement with the Anshan
conversion into ore carriers over the past 12
Qingdao has signalled its intention to build three
Iron and Steel group, based in Lioning Province,
months.
new berths for iron ore traffic in the next two
to transport iron ore from Australia in capesize
The Norwegian broker Lorentzen & Stemoco
bulkers. The 10-year agreement commenced
has estimated that Vale’s investment in new
theBaltic March 2010 www.thebaltic.com
years. More Chinese ports are likely to follow suit.
95
Insurance news
Insurance parlance “Customary shortage” no excuse
carrier’s right in some jurisdiction to rely on
quality of bunker fuels are of vital concern. If
expressions such as ‘weight unknown’, or by
onboard fuel management goes wrong, there
The combined effects of a global economic
placing the ultimate responsibility for bill of lading
can be potential catastrophic consequences.
slowdown and rising commodity prices means
figures on the shipper – it is vital that shipowners
“Of equal concern is the impact on machinery
shipowners are increasingly at risk of claims being
ensure load-port draught and ullage surveys are
from the growing trend of slow steaming,
made against them for bulk cargo shortages,
as accurate as possible,” says Baker. “However,
now being strongly advocated by a number
even when they are within what is sometimes
as many mariners will note, determining the
of operators as the way ahead to combat
referred to as a “customary shortage”, according
quantity of bulk cargo loaded on board is more
high fuel prices until seaborne trade picks up.
to advice from the North of England P&I Club
of an art than a science.”
However, many large, high-speed diesel engines are designed to operate only at sustained high
(NEPIA).
service speeds.
“Cargo ‘loss’ due to physical changes such as evaporation can occur during a voyage,
IUMI faces up to slump
“In another area, underwriters, through
added to which are measurement errors at load
Marine underwriters are braced to tackle new
surveyors, need to monitor the standard of
and discharge ports,” says the Club’s head of
problems which are emerging as a result of
repairs carried out at yards which have been
loss prevention, Tony Baker. “Yet with reduced
the ongoing slump, said IUMI president Deirdre
equipped for new construction only but which
profit margins and larger and more expensive
Littlefield. While the surge of newbuildings is
are now desperate for work.
shipments, shipowners need to ensure mates’
one of the biggest challenges facing marine
“Laid-up ships is another worrying factor.
receipts and bills of lading are properly claused
insurers, others are a direct result of shipowners
Underwriters need to pay close attention to
– and have very good explanations and evidence
looking to cut operation costs. She identified
the various degrees of lay-up we are seeing,
for any differences between load and discharge
fuel management, along with ships entering or
including the conditions of cover for trading
figures – to avoid costly claims.”
emerging from lay-up, as two areas that could
for vessels which have been idle without being
The traditional notion of a “customary
cause particular problems. More than ever, the
deactivated, or just lying at anchor or drifting
shortage” first arose when cargo underwriters
IUMI president concluded, there is an acute
awaiting firm orders, often with minimum
applied a depreciation on their goods-in-
need for underwriters to focus clearly and
maintenance and prone to collisions or typhoon
transit policies and, though the figure was not
selectively on the risks presented to them, and
damage.
determined scientifically, it was used because
aim for a price that is realistic yet fair.
“Last, but by no means least, underwriters
it was convenient. Customs authorities around
She said: “Newbuild cancellations and
need to be careful as to whether onboard
the world compounded the misconception by
deferments are increasing, but a huge amount of
standards have dropped in the past year through
allowing other differences between received and
tonnage is still due to be delivered this year and
owners cutting corners to reduce operating
manifested quantities before imposing penalties.
next. Regrettably, we have not seen a significant
costs. The slump has helped the seafarer
“In reality, both US and English courts reject
leap in the scrapping rate of old ships, which is
shortage problem to some extent, but there is
almost beyond belief in the present crisis.
still an urgent need to recruit and train good
the idea of a customary allowance but accept there are a multitude of reasons why the quantity
“Understandably, owners and charterers
of bulk cargoes – both wet and dry – may be
are doing all they can to reduce costs. If
different,” says Baker. “It is generally possible
this means skimped maintenance and deferred
to defend small shortages due to physical
repairs, however, it’s bad news for insurers who
changes in the cargo during the voyage, but this
cover hull, cargo and liability risks. The situation
requires accurate records such as ventilation,
is compounded by the emergence of new
temperatures and bilge water removal during
problems. These are mainly technical but could
voyages as well as a detailed understanding of
lead to big headaches for underwriters.
what is accepted local industry practice.
“For example, fuel management is quickly
“While the law and Hague Visby Rules
developing into an urgent issue. The evermore
recognise the problem and afford the carrier
stringent requirements of MARPOL rules for
some leeway – for example, by upholding the
reducing emissions means that the type and
96
theBaltic March 2010 www.thebaltic.com
quality officers. Owners are under great pressure but training budgets should not be reduced.”
XL Insurance is a registered trademark of XL Capital Ltd and the global brand used by its insurance company subsidiaries. Ratings accurate as at 7 August 2009.
The expertise to insure from warehouse to warehouse
Blue Water Hull Brown/Green Water Hull Cargo Inland Marine Marine Hull War Marine Liability Marine Risk Engineering Ports and Terminals
Whether you’re transporting dry bulk or liquids, raw materials or finished products, you need specialist insurance cover you can rely on. Our global experience and strong focus on client service can support you at every stage from origination to destination. Expertise. Commitment. Strength. Just a few of the reasons to choose XL Insurance. +44 (0) 20 7933 7000 www.xlinsurance.com
The XL Insurance companies have one or more of the following ratings: A (Excellent) by A.M Best, A (Strong) by Standard & Poor’s.
Insurance ITIC
The devil is in the detail Andrew Jamieson of the International Transport Intermediaries Club explains why brokers should not assume that the main terms they have negotiated will automatically override those of the pro-forma charterparty
T
here is no point in reinventing the wheel.
case of the Lowlands Orchid, in which the
The owners argued that the exclusion of
In many negotiations, once the parties
negotiations for a voyage charter had culminated
“Super Holidays” was inconsistent with the
have agreed the main terms of the
in a fixture recap which included the following
phrase “SHINC” in the recap, but the court held
fixture, the remaining provisions will be
provisions:
in favour of the charterers. The phrase “SHINC” in and
the recap was not in clear and direct conflict with
‘EUROSAILOR-CP
the words, “excluding Super holidays” in Clause
The parties may simply incorporate the terms of
DTD 02/MAR/2004’ WITH CLS.42 LAST PARA
63. The two provisions could “be read together
a printed form. More often, the parties have their
DELETED LOGICALLY AMENDED TO REFLECT
sensibly and in a commercially satisfactory way
own sets of standard clauses which they wish
MAIN TERMS AGREED AS ABOVE…”
with the former qualifying the latter”.
taken from a previous named charterparty. There are of course variations on this practice.
“Scale
load/25.000
“OTHERWISE
AS
PER
MT
SHINC”
to apply to the printed form in addition to, or
The pro-forma was a previous charterparty
In the context of the agreement as a whole,
instead of, the terms of a previous fixture. There
used by the charterers in a fixture with a different
“SHINC” was qualified by a detailed set of
is obviously the risk that these clauses will clash.
owner. It contained the following provision:
provisions in the pro-forma, including those
ITIC dealt with a case where a charterparty
“Clause 63. Discharging Rate: 25,000 metric
providing that the rate of discharge only applied
form had been expressly altered to provide for
tons Sundays and Holidays included, excluding
per weather working day and that time did not
English law. Attached was a set of charterer’s
Super Holidays.” Other clauses in the pro-forma
count during shifting.
additional clauses that provided for US law.
provided that the rate of discharge only applied
The court reviewed some of the previous
The agreement was negotiated via a broker in
per weather working day and that time did not
cases in this area, including the 2008 case of
Norway and between owners and charterers,
count during shifting.
The Northgate, in which the recap allowed for the
both based in offshore jurisdictions. The problem
The charterparty was for a voyage to two
tender of a notice of readiness “whether in berth
was that there was a difference of $105,000,
named discharge ports. The vessel discharged
or not, whether in port or not…” (a clause that
depending on which law applied.
the balance of the cargo between 23 December
would include a ship at the outer anchorage).
It is generally understood by shipbrokers
and 28 December, 2007. The central issue in
The pro-forma provided that NoR could not be
that, where there is an inconsistency between
the arbitration which followed was whether time
tendered at the outer anchorage if there was
negotiated terms – such as the main terms in a
counted during the period of 24-27 December
room at the inner anchorage. The judge held that
recap and incorporated pro-forma or standard
24-27. The arbitrators therefore had to decide
there was no inconsistency, and the WIBON/
terms – the negotiated terms will prevail. But it is
whether, and to what extent, terms from Clause
WIPON provision in the recap could work where
important to remember that the circumstances in
63 of the pro-forma charterparty were part of the
there was no room at the inner anchorage.
which this rule applies are very limited.
contract. In essence, the issue was whether the
The lesson from these cases is that brokers
expression “excluding Super Holidays” should be
should not assume that the main terms they have
applied to the laytime calculation.
negotiated will automatically override those of
The court will give effect to the document as a whole. There is a danger in assuming that statements in the recap will automatically
If “excluding Super Holidays” did not apply,
the pro-forma charterparty. The priority given to
override provisions in the pro-forma covering
the owners were entitled to approximately
negotiated clauses is only in instances of clear,
the same topic. If two provisions can work
$142,000 in demurrage. If, however, the words
direct and irreconcilable conflict with the pro-
together, then that is how the court will interpret
did apply, then the charterers were entitled to
forma. The terms of fixture as a whole need to
the document. The rule giving preference to
$106,500 in despatch money. The arbitrators
be reviewed, otherwise the broker may find that
negotiated terms only applies if there is a clear
found, by a majority of 2-1, that the words
the devil is in the detail.
and direct conflict between the two terms.
“excluding Super Holidays” were part of the
This point was well illustrated by the recent
agreement. The owners appealed.
theBaltic March 2010 www.thebaltic.com
99
ACI’s 4th Maritime Risk Management Conference will address the most relevant risk management and safety issues currently faced by the maritime industry and examine how the industry is managing those risks to maintain onboard safety standards and drive profitability.
WHY YOU CANNOT MISS THIS EVENT Throughout the 2 days you will have the opportunity to hear industry peers and discover the hottest developments in ship management that includes: • • • • •
Understand better how to motivate crew to consistently carry out safer operations Determine how to restructure risk management strategies to deal with current perils Learn how best to deal with Safety Audits and Portside Inspections Recognise how changes to risk assessment practices due to the increased piracy threat will effect insurance policies Examine practical case studies regarding root cause analysis of shipping accidents
The current financial climate is forcing many to make cut backs but safety and risk management should retain the level of importance that keeps standards high and the frequency of accidents low whilst improving your long term profitability. By attending this conference you will understand the mechanism of risk management and know what is required to ensure consistently high safety standards and how to effectively manage modern risks in order to survive these times of economic strain.
28th – 29th January 2010 Conference
London, UK
What will you get from the 2010 event? Topic 1:
Topic 2:
Topic 3:
MITIGATING THE RISKS – STAYING COMPETITIVE
MEETING REQUIREMENTS IN RISK CRITICAL SECTORS
CREW TRAINING COMPLIANCE AND MANAGEMENT
Topic 4:
Topic 5:
Topic 6:
UPDATE REGULATIONS AND PROTOCOL
CRISIS PREPERATION AND EMERGENCY RESPONSE
PIRACY – RISK MANAGEMENT, INSURANCE AND CRISIS STRATEGIES
EXCLUSIVE PRIORITY INVITATIONS INCLUDE SPEAKERS FROM: Jamie Young Risk Manager BP Shipping Ltd
Dr Gopinath Chandroth Inspector Of Marine Accidents Marine Accident Investigation Branch
Kuba Szymanski Risk Secretary General Elect InterManager Matt Dunlop Chief Operating Officer V.Ships
Captain Siva Ganesan Regional Manager For Fleet Operations AET Tankers UK Limited Karl Lumbers Loss Prevention Director Thomas Miller
…and many more…
Kuba Szymanski, General Manager, INTERMANAGER Nikitas Nikitakos, Head of the Department - Dept. Shipping Trade and Transport, University of the Aegean Karl Lumbers, Loss Prevention Director, Thomas Miller
FOR MORE INFORAMTION & FOR REGISTRATION SIMPLY CONTACT MARISA MAGTULTOL: Tel: +44 (0)20 7981 2503 – Email: mmagtultol@acieu.net Web: www.acius.net
Legal news
Legally speaking Odfjell “disappointed” by arbitration award
Wikborg Rein
Odfjell has expressed “serious disappointment”
law capability in the maritime sector with the
over the damages awarded to the company in
recruitment of three new partners to its London
a shipbuilding arbitration proceeding against
office. Simon Tatham has joined from Bentleys,
the Russian state-owned shipyard Sevmash.
Stokes and Lowless to lead the team, while
According to Odfjell, the company signed
Clare Calnan and Rob Jardine-Brown have been
contracts with Sevmash in 2004 for the delivery
recruited from Curtis, Davis Garrard.
Wikborg Rein has increased its global English
of 12 ships. The first ship should have been
The newly recruited partners join forces
delivered in September 2007. “By the time
with the existing Norwegian legal team based
we felt compelled to cancel the contracts, in
in London led by Henrik Hagberg, a partner
February 2008, by the shipyard’s own account
of Wikborg Rein who has wide experience of
the first ship was then delayed by 14 months,”
maritime law, international trade and marine
said a spokesman for the company.
insurance law. Hagberg says: “We are delighted to have recruited people of the quality of Simon,
The arbitration case was heard in Stockholm. Although Odfjell won its main point that Sevmash
Inline with its move to new offices within those of
Clare and Rob as part of our international
had been guilty of willful misconduct, damages
Reynolds Technological Inquiries at International
strategy to further strengthen the English law
were awarded at $43.76 million. “This figure is
House, 1, St. Katharine’s Way, London E1, the
capability that Wikborg Rein can offer, not only
but a fraction of the value of our lost bargain, and
Centre has just assumed a broader title: London
to Norwegian clients but also to international
of our trading losses,” Odfjell said. The cost of
Shipping Law Centre – Maritime Business
clients. By bringing into our London operation
the arbitration was apportioned 75% as against
Forum.
an English law team experienced in litigation
The Centre hopes to be associated with and
and dispute resolution, we are responding to
to provide a London base for other maritime
client demand. This is a natural and important
institutions committed to the advancement of
development of the firm’s international shipping
Hill Dickinson
maritime education and research. “We blend
and offshore practice.”
Hill Dickinson has published a comparative
the specialist knowledge of judges, lawyers,
Wikborg Rein also plans to recruit further
guide to the clauses of the Hague, Hague-Visby,
commercial operators, academics, regulators,
English law expertise in Singapore, as part of its
Hamburg and Rotterdam Rules. The publication
insurers and ship professionals. By doing so,
expansion plans there.
is available for free download in pdf form from
we promote the talents which exist across our
www.hilldickinson.com
industry,” said Dr Sheppard.
Sevmash.
Simon Tatham concludes: “Wikborg Rein has had a London office since 1987 and is a leading
The Centre’s steering committee has been
player. We are convinced that the time is right
superseded by a council with more members
to develop an English law practice with London
London Shipping Law Centre
elected to represent the Centre’s widening
at its centre. This is a major step towards
The London Shipping Law Centre says that it
membership. Sir Anthony Colman is its new
providing a truly one-stop shop to the firm’s
will be placing even greater emphasis on its role
chairman in succession to Archie Bishop.
clients. That practice will integrate with the firm’s
in marine business, following its move to new
Inaugurated in 1997, the Centre has
English lawyers in Norway and Singapore to pool
premises in the City of London. According to
gained a reputation for addressing the legal,
resources and know-how, and in the process
founding director Aleka Mandaraka Sheppard,
regulatory, commercial and political issues
provide a unique international practice.”
the move to the City brings the Centre closer
affecting merchant shipping. It has contributed
to those using its services. The Centre is now
to multidisciplinary education and the pursuit
planning a membership drive to enlist more
of quality shipping, largely through educational
brokers, insurers, bankers and shipowners.
events and debates.
theBaltic March 2010 www.thebaltic.com
101
Corporate viewpoint ClassNK
ClassNK The technical appraisal of the environmental performance of ships
I
n response to increasingly strident demands for environmental protection from around the globe, the maritime industry has begun a number of important initiatives intended to help better
protect the environment. These include measures to prevent marine pollution from oil spills and discharges caused by disasters or ship casualties, measures to prevent atmospheric pollution from ship exhaust gasses, measures to prevent destruction of eco-systems, measure to prevent marine pollution from maritime paints, measures to conserve energy, and so on. Many of these efforts are driven by international conventions, the IMO and other international bodies. However, the actual implementation of these efforts is often a
Ships that perform similarly in sea trials can perform differently in real conditions
difficult and time-consuming task. At the same time, although maritime companies are increas-
water. While ships are evaluated during sea trials,
gained were compared with actual data taken
ingly developing their own environmental initiatives
these trials are conducted in calm ocean conditions,
from a ship in service. From this comparison, it
above and beyond existing regulations, questions
and ship performance can vary markedly from
was confirmed that the hybrid calculation method
remain as to how to best assess and certify such
these levels in real ocean conditions. As a result,
effectively reflects actual ocean conditions. This
practices.
two ships which have the same efficiency in calm
new performance evaluation method will finally
As a class society dedicated to not only
seas can have different performance profiles when
allow shipbuilders to conduct more realistic
preventing marine pollution, but supporting the
operating in actual winds and waves. At the same
performance evaluations for ships at the design
activities of the entire maritime industry, ClassNK
time, differences in weather, trading routes, and
stage. It will also further allow shipowners to make
works both independently and with other maritime
loading conditions make it difficult to compare
better-informed decisions about the ships they are
stakeholders to find the best solutions to these
performance once ships enter operation.
purchasing, and lead to more efficient ship designs.
challenges. This is part of ClassNK’s holistic
In order to develop a more realistic performance
ClassNK will release new guidelines on the
approach to supporting the maritime industry’s
evaluation for ship designs prior to construction,
application of this 10 Mode Performance Index
efforts to protect the environment. One of the many
ClassNK began working on a new 10 Mode
for Ships and will begin offering an appraisal
services currently being developed by the Society
Performance Index for Ships in cooperation with
certification service in accordance with the method
in this regard is the 10 Mode Performance Index for
the Japan Ship Technology Research Association,
later in 2010. While the initial guidelines will only
Ships. The aim of this work is to develop a method
the National Maritime Research Institute, and other
be applicable to containerships and vehicle
for assessing the environmental performance of
interested parties in the maritime industry. This
carriers, the performance evaluation method will
containerships and vehicle carriers and develop
new performance index takes its inspiration from
be expanded to other vessels in the future. In
guidelines on its application, accordingly, as
the automotive industry, which uses a multiple
this way, ClassNK hopes to support the design
summarised below.
mode (i.e., an environmental/operational condition)
and development of more environmentally friendly
system for determining fuel efficiency, as opposed
ships.
ClassNK’s 10 Mode Performance Index for Ships
to the single mode system (calm seas during sea trials) currently used by the maritime industry.
While ships can be made more environmentally
As part of this research, ClassNK together
friendly through the addition of equipment like
with other research partners developed a hybrid
ballast water treatment plants, the most dramatic
calculation method, which combines theoretical
ClassNK Head Office
improvements to emission levels and ship efficiency
calculations and practical tank tests, capable of
4-7 Kioi-cho, Chiyoda-ku, Tokyo
are likely to be made at the design stage. Research
replicating and evaluating a ship’s performance in
102-8567 Japan
on the propulsion performance of ships has been
sea conditions during the design stage. In order
Tel: +81-3-3230-1201
carried out in the past, but most of these studies
to ensure that the hybrid calculation method
Fax: +81-3-5226-2012
focused on performance improvements in still
accurately reflects actual conditions, the results
Website: www.classnk.or.jp
102
theBaltic March 2010 www.thebaltic.com
Commercial profiles
XL Insurance Global insurance solutions for the marine market
XL
Insurance is the global brand used by
Dedicated marine insurance
XL Capital Ltd’s insurance companies
For its marine and offshore energy clients XL
offers practical loss mitigation solutions and
and underwriting divisions. With offices in 23
Insurance offers many years’ underwriting
helps
countries and a partner network in over 100, XL
expertise, efficient service and unrivalled capacity
the world reduce their exposures. This risk
Insurance gives clients and brokers the broadest
on a global basis. Its marine underwriters are
mapping and benchmarking approach looks at
possible access to a wide portfolio of insurance
based in 11 countries across four continents.
threats from theft, fire or natural catastrophes
and risk mitigation services.
The focus is on providing tailor-made insurance
and damage, assessing the impact on both
With a reputation for handling complex risks
solutions as well as loss mitigation services
transporters and the supply chain.
anywhere in the world, XL Insurance offers
according to best practice from around the
commercial property, casualty, professional and
world. Specialist
Energy, Aviation and Fine Art & Specie insurance.
provided for:
Coverage can also be provided through
• Blue Water Hull
Syndicate 1209 at Lloyd’s of London.
• Brown/Green Water Hull
• Coverage in approximately 100 countries worldwide through offices or fronting partners. • Reputation for top-class service, offering a timely response to submissions. • Loss mitigation services, including marine risk
Its
owners
and
dedicated
shipmanagers
marine
claims
around
handling
team focuses on effective and efficient claims
specialty cover, including Marine & Offshore
Advantages of working with XL Insurance:
A specialist Marine Risk Engineering team
insurance
coverage
can
be
management, with experience to support a clients’ loss anywhere in the world.
• Cargo • Inland Marine • Marine Hull War • Marine Liability • Marine Risk Engineering
For more information please call us on
• Ports and Terminals
+44 (0) 20 7933 7000
engineering.
or visit www.xlinsurance.com
AXSMarine arnessing the ‘bespoke’ power of the internet
H
professionals includes modules such as Vessel
Position Lists, Tanker Registry, Distance Tables,
to enable clients to refine, collate and extract
Manager, Voyage Calculator, Cargo Manager,
and our high-performance Voyage Calculator.
the precise information needed to be ahead of the
Fixtures, Port Library, Distance Table, Indices,
game is what has driven leading global software
and MS Outlook plug-ins, all drawing upon
AXSOffshore
provider AXSMarine to develop some of the fin-
comprehensive and always up-to-date databases.
AXSOffshore is a fast and easy-to-use platform.
est proprietary chartering software and database
Users enter their own private data realtime in virtually
packages available for the global shipowning, brok-
AXS-Alphaliner
all fields. Data entry plug-ins are available with
ing and chartering sectors.
AXS-Alphaliner combines the world-renowned
MS Outlook. Access Vessel Technical Databases
Speed and efficiency is crucial when it comes to
databases and information of Alphaliner with the
& Commercial Histories, Data-migration, Sales,
data assimilation, but as important, is knowing that
equally lauded data treating and data sorting
Valuation, Enquiry, Commercial Advice, Working
the data you receive exactly fits your requirements,
technologies of AXSMarine. Users benefit from
Us, Market Summary, Commitments, User-defined
when you need it.
Daily News, Weekly Newsletter, Market Reports,
similar vessels and Positions and Fixtures.
That is where AXSMarine comes in. Its services
Vessel Orderbook, Sales & Deliveries, Fixtures,
are designed to take advantage of what is now
Owner/Operator Details, Vessel Deployment,
AXSAddressbook
referred to as ‘Web 2.0’, the second generation of
Services & Rotations, and Top 100.
AXSMarine now provides the required expertise
internet-based communities which aim to facilitate
to shipping companies and shipbrokers to
collaboration and information sharing between
AXSS&P
correctly configure MS Outlook/Exchange with
users.
AXSS&P (Sale & Purchase) is a fast and easy-to-
the correct common folder functionality and filing
AXSMarine produces a complete set of
use platform. Users enter their own private data
needs previously only made available in bespoke
interactive, internet-based decision-making tools
realtime in virtually all fields. Data entry plug-ins are
messaging systems. It has developed a state-of-
and databases for shipping industry professionals.
available with MS Outlook. Access Vessel Technical
the-art address book far outweighing anything
Its online tools are secure, fast and easy to use,
Databases & Commercial Histories, Data-migration,
available from MS.
and the databases they source are always up to
Sales, Valuation, Enquiry, Commercial Advice,
date. Because they are internet-based, they are
Working Us, Market Summary, Commitments and
available from any computer, anywhere; there is
User-defined similar vessels.
nothing to download or install.
AXSTanker
E-mail: commercial@axsmarine.com
AXSDry
In this exclusive service offering reserved for tanker
MSN Messenger: support@axsmarine.com
Our complete offer for dry bulk shipping
brokers only, members benefits from Real-Time
Yahoo! Messenger ID: axstanker
theBaltic March 2010 www.thebaltic.com
103
Commercial profiles
SAL Schiffahrtskontor Altes Land GmbH & Co KG Full-service heavy lift shipping
F
ounded in 1980, SAL has emerged into one
newbuildings have been ordered with delivery
vessels. In the main office, SAL’s clients are
of the leading heavylift carriers in the world.
dates in 2010 and 2011. These vessels will
served not only by commercial and operational
In 2007, SAL entered a 50/50 joint venture with
maintain the unrivalled speed of 20 knots and
specialists but also by a professional engineering
the Japanese “K” Line group. The company’s
will be equipped with two cranes of 1,000 mt
team in charge of developing innovative and
main office is located in Steinkirchen, just out-
SWL each. The unprecedented lifting capacity of
custom-made transportation solutions. SAL’s
side Hamburg, Germany. In addition, SAL has
2,000 mt SWL, their crane outreach of 38 m as
own crewing agency in Manila is responsible for
developed an extensive international network
well as their ability to trade with an open hatch,
careful recruitment and continuous training of
of agencies and subsidiary offices in Japan,
make these vessels an important asset in the
qualified crew.
China, Great Britain, Italy, Australia and Finland.
heavylift market.
Including the crew onboard the vessels, SAL today employs a team of more than 500.
The newbuildings will further promote SAL’s dedication to a safe and environmentally
The SAL fleet currently encompasses 14
friendly setting on board. All recent and
modern heavylift vessels with a high service
upcoming newbuildings are equipped with an
speed of 20 knots each, featuring its own onboard
“environmental passport” which certifies that
cranes. The types of cargoes transported range
they comply with the highest environmental
from heavy machinery, floating cargo, windmills,
protection specifications. In addition, the ships
(power) plant equipment to cranes and (offshore)
are certified in accordance with ISO 14001 and
oil and gas equipment.
OHSAS 18001. These technical and ecological
SAL Schiffahrtskontor Altes Land
As of 2008, a comprehensive newbuilding
preconditions ensure that the vessels are
GmbH & Co KG
program has been launched. In 2008 and 2009,
prepared for deployment in future markets,
Bürgerei 29
four vessels with a combined crane capacity of
which include offshore windparks, offshore oil
21720 Steinkirchen
1400 mt SWL have been delivered. Despite the
and gas industries, and industrial plants.
Tel: +49 (0) 41 428 1810
global financial crisis, which has also affected
Besides the technological hardware, SAL also
the heavylift sector, SAL decided to further invest
places a heavy emphasis on the development
E-mail: sal@sal-shipping.com
in innovative shipbuilding. Therefore, two more
of its staff, both onshore and on board the
Website: www.sal-shipping.com
Fax: +49 (0) 41 4281 0281
Worldwide Project Consortium T
he Worldwide Project Consortium (WWPC) is
full range of project planning and forwarding
responsibility for a multi-million dollar mining or
the leading dedicated network for project cargo
support services:
industrial relocation; WWPC's combined expertise
freight forwarders; you will find the experts of the
• Project & logistic freight management
and worldwide resources can be brought to bear
WWPC all around the world, providing a full range
• International project forwarding by sea and air
to help you achieve your objectives. On time, on
of project planning and forwarding support services
• Door to door multimodal freight management
target, least risk, no problem.
for all kinds of large and difficult cargo, by land, sea
• Inland Transportation
and air, worldwide.
• Cargo consolidation
reputation in International Project Forwarding
• Customs Clearances
and Logistics Management services around
• Customs Tariff and By-Law advice and
the world, and the directors are pleased to
WWPC Ltd is a franchise company for project cargo movers and supplies supportive network functions to its members, who are all holders of
consulting
WWPC companies have gained a steadfast
advise that not a single complaint has ever been
their respective franchises. The group’s members
• Warehousing, Storage and Distribution
received in relation to the performance, conduct
are the best in their trade in their respective
• Cargo computer documentation, cargo
or activity of any WWPC office.
countries and geographical areas. The Worldwide Project Consortium has been founded to enhance the global presentation and
tracking, and EDI services • Supervision of heavylifts, outsized and hazardous cargo
WWPC offices gain admission on their knowledge and experience. Each formally undertakes to operate under a strict Code
activities of its members and that’s exactly what
• Chartering by sea and air
of Conduct and only the most dedicated,
the management of the WWPC is committed
• Planning and consulting services.
experienced and viable experts in project
to support and deliver. The WWPC also is a member of the Baltic Exchange.
WWPC offices are accustomed to success. Through the strength of our global presence, all
forwarding, with a proven track record, will be admitted to the WWPC.
A world of project-forwarding connections,
kinds of WWPC projects are being undertaken
know-how and resources; with WWPC you will
every day, everywhere, in all kinds of conditions.
World wide Project Consortium Ltd
find our experts around the world, providing a
Big task or small; one-off shipment or full turnkey
www.wwpc.eu.com
104
theBaltic March 2010 www.thebaltic.com
Commercial profiles
BASS AS F
ounded in 1997, BASS is a leading provider
and add new suite modules, if desired, according
of fleet management software for shipowners,
to priority. The modules will be configured to fit
Ease of implementation, ease of use
their business processes.
Introducing a new system is a major challenge
shipmanagers, and operators of rigs, FPSOs and offshore units worldwide. More than 100 cus-
While customers can build up module by
to an organisation with no capacity set aside
tomers – including many of the world’s leading
module, data is entered into the BASSnet
for trial and error. With experience from large
shipping and offshore support companies – run
central database once so it can be reused
projects for industry players like CMA CGM,
fully integrated BASSnetTM Fleet Management
in one process after the other and ensure
NYK, “K” Line, Taiwan Maritime Transportation,
Systems on over 1,000 vessels around the globe
efficient workflow between the other modules for
Stolt Tankers, the Royal Norwegian Navy and
to ensure regulatory compliance, improve asset
applicable departments and units. This allows
the Wilh.Wilhelmsen group, BASS has a proven
management and enhance document control.
the entire organisation to share the same data –
track record for structured implementation. Once
and enables management to deal with problems
implemented, BASS has the structure to make
Linking strategy & operations
proactively, streamline work processes and
its software easy to master – including built-
Operational goals are always a part of company
identify best practices. The end result is improved
in program training tutorials and close to 100
strategy – but what about IT? Software should
transparency, process efficiency, profitability and
interactive tutorials on its website.
help to deliver efficient operations and provide the
operational reputation.
basis for making informed decisions. Additionally,
Website: www.bassnet.no
it should be built up with systems that integrate
BASSnet’s modular advantage
E-mail: contact@bassnet.no
properly and share data.
The BASSnet integrated software suite covers
Europe/Americas: BASS AS
A full suite for fleet management and ship
all main areas of maritime operations through
Lysaker Torg 8,
operations, seamlessly integrated for safe and
its range of application modules – Maintenance,
P O Box 68 1324 Lysaker, Norway
secure data flow between vessels and onshore
Procurement,
Tel: +47 6710 5520
offices, BASSnet software give users a total
Management, Safety Management (SAFIR), Risk
Fax: +47 6710 5516
overview and control over their operations ashore
Management, Self Assessment (TMSA), Reviews
Asia/Pacific: BASS Sdn Bhd
and on board. The modular applications system
and Improvements, HR/Crew Management,
19th Floor, Menara Atlan, 161B Jalan Ampang,
allows customers to begin with the modules that
Payroll, Accounting and Report Generator.
50450 Kuala Lumpur, Malaysia
Operations,
Document
they need most and where the benefits are most
Tel: +603 2173 6488
obvious. Thereafter, they can continue as needed
Fax: +603 2173 6499
Concateno C
subject to a range of external and internal quality
oncateno is the leading drug and alcohol
There is local legislation on drugs and
testing organisation: a service provider with
alcohol, international agreements (eg OPA 90),
the facilities and expertise to genuinely deliver
maritime guidelines (eg ISM and ISPS Codes)
We also provide chemical testing, with a
test programmes to meet any requirement –
and Charterparty Clauses (eg ExxonMobil).
benzene exposure biomonitoring test. This
from point-of-care instant tests, through to
The expectation is that shipping companies
simple test can help you manage your health
state-of-the-art laboratory analysis for any bio-
should have random and emergency ‘for cause’
and safety procedures for staff that may be in
logical specimen, including urine, oral fluids
drug and alcohol testing in place, as well as
contact with this highly toxic chemical.
and hair.
testing during routine medicals. Concateno’s
Concateno’s 300 staff support more than
programme
management
service
from
8,000 customers globally, and the group
Medscreen mobilises an international network of
performs approximately eight million tests
collecting officers to keep your random alcohol
annually. An integrated network of more than
and/or drug screening programmes on target,
500 sample collection officers, trained in-house
and our emergency test kits are designed for the
in chain-of-custody procedures, supports clients
occasions when our on-call drug/alcohol testing
around the world.
service cannot be deployed.
The maritime industry uniquely has to provide
Committed
to
the
highest
assurance programmes.
Concateno levels
of
Harbour Quay
its own emergency services whilst at sea – “all
accreditation and quality assurance, and
100 Preston’s Road
seafarers must be able to respond at any time
working actively within the industry to improve
London
to an emergency situation” (Oil Companies
existing best practice, Concateno maintains
E14 9PH
International Marine Forum Guidelines for the
the international quality benchmark ISO 17025
Tel: +44(0)20 7712 8000
control of drugs and alcohol onboard ship). The
standards for drug testing (independently
Fax: +44(0)20 7712 8001
industry also has a high awareness of the threat
audited by UKAS), ISO9001:2000, Link-Up, and
E-mail: enquiries@concateno.com
of drug trafficking.
ISO13485:2003. In addition, the company is
www.concateno.com
theBaltic March 2010 www.thebaltic.com
105
Commercial profiles
Wilhelmsen Ships Service Worldwide ships agency Improving your operational efficiency
Performance consistency from port to port
The best of both worlds
Many worldwide operators still use a variety of
We have standardised our procedures to ensure
streamline operations and bring about economies
small local agents in different ports, leading to
that customers receive consistent service in all
of scale. However, many vessel operators want
duplication of effort, inefficient documentation and
2,200 ports where we operate around the world.
to continue to use local agents with personal
unreliable financial accountability.
In practical terms, this means that customers
knowledge of the port, fluency in the local language
Wilhelmsen Ships Service believes that there
only need to define their requirements once, and
and contacts with all local service providers.
is a better way of optimising the performance of
the service delivery will be performed in the same
Through our Service Agreements, we provide
ships agents. We have defined global operational
way and the same format in each port where
the best of both worlds. Because of our wide
standards that ensure a predictable quality level,
they operate. Especially when calling at new and
international spread, we are able to offer a cost-
wherever you operate in the world.
unfamiliar ports, it is essential to know which agent
effective global service to customers with multiple
can be trusted. The time saved on instructing and
port calls. However, every stopover is still treated
Dealing with dozens of local agents is time-consuming and unsystematic
monitoring new agents can be spent on more
as a special event by our local officers, who are
essential tasks.
able to use their unique knowledge to arrange
International companies who deal with a variety of
port service agreement is allocated a single point-
local agents often find themselves repeating their
of-contact to oversee their global business. The
instructions over and over again for every port call.
contact person coordinates all the customer’s
The agent in one port does not know what the
port
agent in the previous port did, and may have no
Service, anywhere in the world. The customers’
experience in handling the customer. The customer
requirements are registered into our operational
has to spend time instructing and following up
system, thereby becoming an integrated part of
each agent, to ensure that all requirements are fully
their business processes when working on a port
understood and will be catered for.
call for that particular customer.
Every customer who enters into a multiple
calls
handled
by
Wilhelmsen
Dealing with one company on a worldwide basis can
hassle-free port calls.
Ships
Website: www.wilhelmsen.com/shipsservice
LCH.Clearnet The world’s leading independent clearing house
O
ur experience as a clearing house goes back over a century, and today we clear
The benefits to trading parties are clear: • Significantly reduced counterparty risk.
loss to any other members. By
constantly
evaluating
counterparty,
more asset classes than anyone else globally,
• Increased trading opportunities.
market, legal and liquidity risk, we ensure that
both exchange traded and over the counter
• Ability to net-off long and short positions.
margin cover is set at appropriate levels.
leading to:
dedicated team of over 50 risk managers, who
Driving all our risk management activities is a
(OTC). • Uniquely, we have over 10 years’ experience of clearing OTC. • We have a track-record of five defaults
• Reduced costs of trading.
share a wealth of experience and a convincing
• Enhanced liquidity.
record of successfully managed defaults – both exchange-traded and OTC.
successfully managed, and in fact we’re the only clearing house to have managed an OTC default. • Our standards of risk management are second to none. • Our technologies are very, very intelligent. • And we’re independent – so ‘conflict of interest’ issues don’t arise.
Risk management is at the heart of what we do We have an unequalled reputation for reducing risk across a wide span of markets globally. We’re committed to setting and maintaining the very highest standards, across all our services and all the asset classes we clear. Our robust risk management framework
Isabella Kurek-Smith
Why use a clearing house?
affords exceptional levels of protection to
Director, Head of Energy & Freight Markets
A clearing house acts as a go-between when
clearing members, as demonstrated by our
LCH.Clearnet
two parties trade. As guarantor of the trade, the
successful handling of the Lehman Brothers
Tel: +44 20 7426 7460
clearing house bears any monetary risk involved.
default well within the margin held, and without
E-mail: Isabella.kurek-smith@lchclearnet.com
106
theBaltic March 2010 www.thebaltic.com
Commercial profiles
Touw B&B Holding BV T
ouw B&B Holding BV is the mother company
The company’s general manager is Maup
• Organise in-house courses for governmental
of the following maritime service companies:
Hoppzak BSc CEng CMarEng MIMarEST
bodies, shipowners and managers, and
• D. Touw Expertise- en Ingenieursbureau
MCMS, who has been working in the company
salvage companies on the same subject.
BV, hull and machinery and marine liability
for over 32 years, and the company’s operational
• Offer a wide range of consultancy in the
surveyors and consultants.
manager is Leo van Houwelingen BSc.
same field.
• Marinco Survey BV, specialists in condition
Except for the traditional hull and machinery
Recently the two companies have published
surveys, appraisal, management consultancy.
and cargo survey, the company is growing
a book Pocket Salvage, a 178-page book with
• Binnendijk Bree BV, marine and aviation
in the fields of salvage consultancy and risk
all relevant conventions, contracts, guarantees
consultancy.
and various maritime information. This book can
cargo surveyors. • Touw Salvage Consultants, salvage and wreck removal consultants. • Touw Risk Consultants, risk management
The risk consultancy manager is Arnold
be ordered via the website www.touw.nl.
Warmerdam BSc MNI, and the salvage consultancy manager is Maup Hoppzak.
consultants acting for shipping companies,
Since 2008 Touw B&B Holding BV has been
underwriters, shipyards etc (a.o. JH 143 and
working closely together with Koffeman Consult
JH 115 surveys).
BV, a Rotterdam-based consultancy firm. The
The main office of Touw B&B Holding
managing director of this company is Geert
BV is located in Rotterdam and the aviation
Koffeman, former commercial director of SMIT
Touw B&B Holding BV
branch office is located at Schiphol Airport in
Salvage.
Waalhaven ZZ 10
Amsterdam.
In combination with Koffeman Consult, Touw
3088 HH Rotterdam
B&B Holding BV, and especially Touw Salvage
Tel: +31 (0) 10-2836666
working worldwide with in total 12 surveyors /
Consultants can:
Fax: +31 (0) 10-2836660
consultants, each specialists in their own field,
• Organise
The company was founded in 1908 and is
and eight staff members.
general
courses
on
Crisis
Management in Shipping.
Website: www.touw-bb.com E-mail: holding@touw-bb.com
BI Norwegian School of Management Self-owned foundation
Accreditation and ranking
programmes and management programmes. BI
BI Norwegian School of Management is a self-
BI obtained the status of ‘Specialized University
offers special study provision within insurance,
owned foundation whose purpose is to conduct
Institution’ in 2008, after NOKUT (the Norwegian
commodity trading, banking and finance and
education and research at a high international level
Agency for Quality Assurance in Education) gave
shipping.
within management, administration, economics
its approval on 27 February 2009. BI has been
and marketing.
EQUIS accredited since 1999 as one of only
International activities
110 business schools in the world. We are one
Collaboration agreements with 148 universities
Vision
of the 100 most recognised business schools of
and business schools in 40 countries around the
Its professional strength and relevance makes
a total of over 4,000 such colleges in the world
entire world, and many exchange students. Special
BI Norwegian School of Management a leading
(one of 35 in Europe) in the “Top Business School
MBA programme in China in collaboration with
business college in Europe.
Worldwide 2008” survey. We are amongst the 65
Fudan University School of Management. Chief
best suppliers of tailor-made in-house programmes
owners of the ISM University of Economics and
Values
in the world and provide the 117th best MBA
Management in Lithuania with 2,000 students.
BI takes quality and independence as the basis for
programme in the world (2008) according to the
Strategic collaboration with Nanyang University
its optimum research, education and intermediation
Financial Times.
of Technology in Singapore, ESCP/EAP European School of Management in Paris, and University of
for students, the business community, the public sector and positive social development. We are
Education and research
an independent business school, which is future
BI has one of Norway’s leading academic
orientated, research based, business orientated,
environments within the core areas of financial
and international. We conduct our work with quality,
economics, strategic management, marketing,
integrity, relevance and the ability to adapt and
leadership and organisation, and innovation and
change. BI creates effective and highly professional
entrepreneurship. We offer bachelor programmes,
Study info: + 47 810 00 500
training by coordinating its resources across the
Executive MBA studies, eight master’s studies
E-mail: study@bi.no
organisation. Our managers and employees are
and five doctoral programmes, two bachelor
Address: Nydalsveien 37, 0484 Oslo
aware of ethical dilemmas and challenges, and
programmes, extensive continuing and further
Phone: + 47 06600/+47 4641 0000
take personal responsibility for handling these.
education, Internet studies, tailor-made in-house
E-mail: info@bi.no
theBaltic March 2010 www.thebaltic.com
California – Berkeley.
107
Commercial profiles
Combi Lift K/S C
ombi Lift’s main activities are worldwide ocean
Mission: Combi Lift’s mission is to put
transportation of heavylift and project cargoes,
customers and clients first, through meeting
and today Combi Lift is one of the world leaders
and exceeding their expectations. We do this
within this segment. The current fleet consists of 14
by providing tailor-made heavylift transportation
heavylift carriers, including four semi-submersible
solutions which are characterised by being safe,
dock vessels with the ability to load and discharge
innovative and reliable. Our mission also extends
cargoes by means of lifting, rolling or floating the
to our employees and our fleet, both aspects of
same. In addition to the existing fleet, Combi Lift
our business in which we will continue to invest
currently has a newbuilding programme for two
substantially.
heavylift vessels which will be delivered during
Vision: Our vision is to position Combi Lift as a
2010. The main philosophy of Combi Lift is to combine the best expertise allowing us to lift the various
QHSEP Policy: On 5 September 2007 K/S
leading company in heavylift ocean transportation
projects with the highest standards and quality.
Combi Lift and Combi Lift (Germany) GmbH
and logistics, setting the highest standards through
were the first companies worldwide, within
sound business ethics, inspirational leadership and integrated QHSEP best practices.
Chartering & operation: The Chartering &
their segment, to obtain DNV certifications
Operation departments are situated in Korsoer;
for fully implementing all three Management
the two departments comprise a team of skilled
System Standards, both ashore and onboard
personnel. Combi Lift is able to provide customers
their vessels. In addition to the certification,
with a service that suits their requirements.
Combi Lift updated the OHSAS 18001 standard
Contact details :
certification from the 1999 standard to the new
Anders Poulsen - C.O.O.
Engineering: The Engineering & technical
2007 standard. Once again Combi Lift is the first
Combi Lift K/S
management is run by Combi Lift (Germany)
heavylift carrier in the world to obtain this updated
Batterivej 7-11
GmbH in Bremen. Working with an experienced
standard. Combi Lift views the ISO certifications
4220 Korsoer
staff of master mariners, naval architects
as a key to upholding and maintaining good
Denmark
and welding experts, Combi Lift is able to
business practices. The company’s QHSEP
Tel: +45 5816 2030
provide tailor-made solutions that suit individual
policy ensures continuous improvement in
Fax: +45 5816 2025
customers’ demands and expectations.
its Quality, Health, Safety, Environment and
E-mail: mail@combi-lift.eu
Pollution Prevention management activities.
Website: www.combi-lift.eu
Grieg Star Shipping AS G
rieg Star Shipping AS (Star) is in charge of
fleet grows. The most recent addition is a service
Both divisions enjoy the support of skilled
the worldwide marketing and operation of
from Chile to the Mediterranean with forest
operations managers and port captains located
products and project cargoes.
both in the headquarters and in the branch
the Grieg Group’s fleet of advanced open hatch
Star has designed and built cargo handling
offices. This allows for quick and accurate
equipment ranging from pulp frames capable
solutions to the often-complicated stowage.
Based in Bergen, Norway and with 16 offices
of loading 56 tons in one lift, to vacuum clamps
They also frequently attend to the load and
in strategic locations in Asia, Australia, USA,
for paper rolls with capacity upto 35 tons.
discharge to ensure safe and efficient operations.
Canada and Europe, Star’s open hatch division
These, as well as grabs and other special
In addition to the advanced ships and cargo
runs specialised ships in regularly scheduled
cargo handling gear, are serviced in their own
handling equipment, Star provides IT solutions
break bulk parcel trades. Export trades based
workshops in Vancouver and Rotterdam.
enabling shippers, forwarders and agents
vessels, as well as a fleet of conventional bulk carriers.
on North American forest products, aluminium
The Gothenburg-based subsidiary Atlanti
and other break bulk cargoes to Asia, north
cargo AB uses available space on the regularly
and south Europe as a substantial part of their
scheduled open hatch vessels to move project
business.
cargoes worldwide.
The design features of the open hatch ships
The Grieg group has just taken delivery of two
(removable tween decks, gantry cranes up
new state-of-the-art open hatch vessels, and two
to 68 mt, rain protection over unobstructed
more will be delivered during the spring of 2010.
to handle everything from documentation to customs papers.
holds, cell guides) allow for fast and safe
The Conventional Division of Star operates
handling of project cargoes, pipes, windmills,
a modern fleet of about 20 geared and grab-
Grieg Star Shipping AS
metals, newsprint, containers and bulk cargoes.
supplied conventional ships ranging from 25,000
C. Sundts gate 17/19
Shippers welcomed these features when Star
to 55,000 dwt trading worldwide, combining
P.O. Box 1088, 5809 Bergen
built up their successful trades from Asia and
contracts and tramping. The flexible ships carry
Tel: +47 55 23 96 00
Europe back to both coasts of North America.
a variety of cargoes such as coal, coke, alumina,
Fax:+47 55 23 25 30
fertilisers, ores etc.
Website: www.griegstar.com
New trades are evaluated and added as the
108
theBaltic March 2010 www.thebaltic.com
All Star-offices welcome your freight inquiries:
Commercial profiles
H2OSatellite
Wherever you are, we are
F
rom supertankers and super container-
the fastest most compact VSAT solution on the
are ideally placed to help them. An investment
ships to fishing vessels and yachts there are
market, H2OLiteSpeed providing 2MB voice,
in the new IP technology is about a canny
more than 2,000 ships which already rely on
data and web browsing for a fixed fee of under
marriage of hardware and software, and a
H2OSatellite’s complete maritime communica-
E500 per month.
communications partner who understands the innovative
requirement and offers the most innovative
Ltd the company has been in the vanguard of
products aren’t the whole story though. In
software can often save a company thousands
satellite communications software development.
an industry where the alternative is often a
by making their airtime work smarter not harder.
A full suite of packages covering everything from
faceless corporation, their personal, individually
For companies looking to gain real competitive
commercial messaging, spam, virus protection
tailored approach to customers’ needs and
advantage from their communications, a free
and crew messaging, to hardware sales, instal-
the 24/7 365 support commitment has led to
no obligation communications review from
lation and airtime are combined to offer a fully
strong and lasting personal relationships. The
H2OSatellite is the first step.
integrated, simple and cost-effective solution.
company has always been technology with
Enabling customers to communicate via any
a human face and wherever and whenever
transmission package available including major
customers need them, H2OSatellite are there.
satellite systems such as Inmarsat, Iridium and
Headquartered in the UK a comprehensive
Contact details :
VSAT and also GSM, broadband and ISDN, the
network of partners with offices worldwide
H2OSatellite
highly skilled and committed development team
allows H2OSatellite to service customers and
Global Technology House
work hand in hand with sales and customer care
vessels around the globe, all of whom receive
11 Padgate Business Park
to constantly refine and improve the H2OSatellite
the same first-class products and customer
Green Lane, Warrington
product range, ensuring that the company con-
service. Improving onboard communications,
UK WA1 4JN
tinues to offer customers industry leading returns
managing crew expectations and saving money
on their communications investment. Such inno-
is the ultimate challenge, but it can be met.
www.h2osatellite.com
vation has seen H2OSatellite become the first in
Shipowners and managers are becoming more
E-mail: info@h2osatellite.com
the industry to offer new IP packages, including
aware that maritime communications is all about
Tel: +44 (0) 1925 818 918
crew web browsing, and in Europe to provide
optimisation, and companies like H2OSatellite
Fax: +44 (0) 1925 814 192
tions solution. Since 1998 as Global Technology
H2OSatellite’s
robust
and
DREAMTECH Software Ltd D
REAMTECH is a leading software vendor of
shipbrokers conduct their work faster and more
COMPASSng. Data can be sent on-demand to
maritime messaging and shipbroking solu-
effectively:
any mobile device providing the user with up-to-
tions. The flagship product of the company is
1. The Sale & Purchase module provides
date access to vessels, cargoes and positions
COMPASSng, a powerful messaging software
two-way matching of vessels and inquiries,
as stored in the database in real time, anywhere
tool for shipping companies with extensions
including newbuildings and contract resales and
in the world.
for the shipbroking community. Designed with
helps you locate inspectable vessels worldwide.
DREAMTECH was founded in 1999 and
the continuing help of shipping professionals,
Brokers can quickly and easily update vessels
the company is expanding its business in the
COMPASSng is a diverse tool that is constantly
with any commercial advice received through
maritime sector worldwide. An ever growing list
evolving to suit the needs of the shipping market.
messages.
of shipping firms based in Europe, the USA and
The core functionality of COMPASSng
2. The Chartering module enables the
is messaging which allows users to search
update and search of available vessel positions
efficiently
of
and cargoes which helps the broker match
messages (e-mail, fax, telex, text messages).
open positions and quickly meet the needs
COMPASSng helps you create and manage
of their clients. Furthermore, COMPASSng
circular lists to distribute information to hundreds
provides a full set of chartering utilities such
of people at the touch of a button, using the fully
as voyage calculator, laytime calculator and a
integrated Address Book and Activity Planner.
comprehensive fixture book.
through
massive
quantities
the Far East are already using COMPASSng.
Messaging power is further extended by means
3. Integration with PABX for automation
of instant messengers, advanced HTML editors,
with the company address book and the user
115 26, Athens, Greece
spam handling and much more.
office phone.
Telephone: +30 210 6754150
COMPASSng also features specialized,
4. Mobile Queries provide shipbrokers with
fully integrated modules, designed to help
innovative remote access to all data stored in
theBaltic March 2010 www.thebaltic.com
Head Office address: 5 Mesogeion Avenue,
E-mail: info@dreamtech-software.com Web: www.dreamtech-software.com
109
Commercial profiles
GFI Freight Summary of 2009
intertwined which has brought increased levels of
NOS. At GFI we remain committed to offering clients
Will Leslie: Given the relatively poor volatility
complexity to the physical market.
an enhanced and efficient method of trading and as such we are working towards introducing additional
in 2009, the market was surprisingly resilient in terms of volumes. Year on year Q1 & Q2 were
Drivers and challenges for 2010
functionality to EnergyMatch® Europe.
comparatively the same in 2009 as in 2008. It was
Terry Parmenter: The market has been wary of
Will Leslie: I feel liquidity will continue to improve in
not until September that markets started to slow
2010 for some time, with the anticipated volumes
a higher tanker rate environment. The combination
down. However, the increase in freight rate volatility
of new builds expected to deliver and the global
of a large number of tankers being on storage, a
from October fuelled improved interest, particularly
economy still not out of the depths of the previous
cold winter and delays of discharging into China,
from the financial community.
18 months. The developmental drive of the Far
combined with various other factors, have all
Whilst a strong market was priced into the 2010
East, in particular China, together with other regional
contributed to the positive start to the year. If
forward curves, the spike in January exceeded
factors such as climatic changes affecting crop
volatility remains in the market we are confident that
intitial expectations. In some instances, round
yields and the piracy issues in the Persian Gulf,
liquidity will be sustainable.
voyage returns (Time Charter Equivalent returns) for
will play a part in directing the trends; however,
Furthermore, quoting markets in $/day continues
certain routes surpassed the timecharter rates for
the relationship between the actual market and the
to be a hurdle still facing the market. Whilst the
similar vessel classes. This subsequently attracted
sentiment surrounding it will dictate how the year
market trades and is priced on $/day, which in the
significant hedging interest from the world’s larger
plays out.
current flat rate period isn’t a problem, potential
owners, particularly on crude routes.
Dorian Benson: I see 2010 being an interesting
issues arise during periods where the flat rate is
Dorian Benson: The increase in volatility during
and challenging time for the dry FFA market. Whilst
unknown. ACM/GFI along with other participants
2009 renewed interest from financial institutions
the market is backward dated, there has been
will be trying to bring a viable $/day product to the
keen to hedge and trade proprietary positions, and
some improvement in underlying rates, although
market, which I believe will bring further growth to
this, once again, allowed for interaction with traders
this needs to be taken in the context of the sharp
the market.
from within the shipping community. FFAs also
declines witnessed at the end of 2008.
remained integral in the field of risk management
With counterparty risk remaining an integral
for participants with exposure to freight market
factor in the market, there has been an inevitable
fluctuations.
shift in focus of FFA trading from OTC onto cleared
Terry Parmenter: The physical freight market has
trades. This trend, which looks set to continue,
Wet Freight (FFAs): futures@acmshipping.co.uk
experienced considerable change in recent years,
is viewed as a positive at GFI, as our hybrid
Dry Freight (FFAs): dryfreight@GFIgroup.co.uk
coupled with increased utilisation of the FFA market.
commodity trading platform EnergyMatch® Europe
Dry Freight: drycargo@GFIgroup.co.uk
Shifts and trends in the two markets are significantly
has existing clearing links to both LCH.Clearnet and
www.GFIgroup.com/freight
* GFI Freight operates as a division of several subsidiaries of GFI Group, Inc.
Bupa International
B
upa International has 38 years’ expertise
them, speak 34 languages. This is all backed
and home transportations. They also have
in caring for the insurance needs of expats
up by direct settlement of bills where possible
extensive experience of diagnosing and treating
and their families around the globe. Covering
as well as a prompt turnaround of claims,
cancer, heart disorders and musculoskeletal
over 800,000 people in 190 countries, Bupa
with Bupa International processing over 15,000
conditions. Bupa International’s medical team
International is the largest international expatri-
claims a week.
is available around the clock to customers,
ate health insurer in the world, supplying quality
Understanding that not all expats are the
individual and group medical cover to people
same, and providing products tailored to suit the
who are in their home country or living abroad
needs of differing groups, is also key to Bupa
for six months or more. The company is part of
International’s success.
ensuring they receive immediate and correct treatment, when the need arises.
Industry leader
Bupa International offers tailored products for
In 2009, we were delighted to receive the Best
the oil and gas industry for example, covering
International Private Medical Insurance Provider
employees both offshore and onshore, as well as
award at the UK’s Health Insurance Awards, for
Expat understanding
a maritime policy, designed for crew employees
the ninth time since 1999.
Bupa International understands that expats want
who live and work aboard yachts, super yachts
peace of mind about their health while abroad –
or ocean-going vessels.
the leading international health and care group, Bupa.
and a health insurer they can rely on to provide
For more information, please visit www.bupa-intl.com or if you’re interested in
a high quality service and comprehensive
Medical expertise
Maritime group cover please call:
coverage. That is why it has developed an
Bupa International is also set apart by the
+44 (0) 1273 322 091.
unrivalled worldwide network of over 7,500
medical expertise it offers customers. Its
participating hospitals and a 24-hour helpline,
emergency medical team consists of highly-
open 365 days a year, which is manned by a
trained doctors who are experts in high altitude
team of experienced advisers who, between
diseases, tropical infections, patient evacuations
110
theBaltic March 2010 www.thebaltic.com
Commercial profiles
Fairmount Marine BV F
airmount’s main activities are long-distance ocean towage, salvage and heavy-lift trans-
portation. In order to meet the highest quality standards imposed by our worldwide clientele – an absolute requirement when it comes to the towage and installation of the largest and most valuable floating units in the world such as F(P) SOs, gravity base structures, semi-submersible and jack-up rigs – Fairmount Marine operates five long-distance towing vessels with anchorhandling capacities of no less than 205 tonnes bollard pull and an average age of less than two years. In addition to these five supertugs, we operate – together with our Japanese partner
in remote areas or areas where no large dry-
transportation, Fairmount Marine has positioned
Fukada Salvage & Marine Works Co., Ltd – a
dock is available.
itself in the premier league.
fleet of multipurpose offshore support vessels
Fairmount’s staff of professionals both onshore
and semi-submersible barges. Amongst them is
and offshore is entirely dedicated to providing
the biggest semi-submersible barge in the world,
Fairmount’s
the 50,000 dwt giant Gavea Lifter. These barges
solutions for demanding towage and transportation
are perfectly suited for the transport of jack-up
assignments, worldwide. Fairmount’s quality
rigs, modules, topsides and any other (general)
management system and safety, health and
heavy and oversized cargoes. Furthermore, in
environment protection measurements are second
addition to providing a means of transport, they
to none and form an integrated, vital part of all
tel: +31 10 240 2500
have proven to be a perfect platform for dry-
operations. Building on the legacy of Holland as
E-mail: sales@fairmount.nl
docking of semi-sub rigs, drillships and vessels
the cradle of ocean towage and special marine
Website: www.fairmount.nl
P World is one of the largest marine terminal
closely with customers and business partners
to Asia. With a pipeline of expansion and
operators in the world, with 49 terminals and
to provide quality services today and tomorrow,
development projects in key growth markets, RECREATE LOGO AND PMS including India, China and the Middle East,
clients
risk-free,
It is our goal and our duty to surpass clients’ expectations, every day.
high-standard
DP World D
12 new developments across 31 countries. Its
when and where customers need them.
dedicated, experienced and professional team
In taking this customer-centric approach, DP
of nearly 30,000 people serves customers in
World is building on the established relationships
some of the most dynamic economies in the
and superior level of service demonstrated at
world.
its flagship Jebel Ali facility in Dubai, which has
DP World aims to enhance customers’ supply chain efficiency by effectively managing container, bulk and other terminal cargo.
capacity is expected to rise to around 95 million TEU over the next 10 years.
been voted “Best Seaport in the Middle East” for 15 consecutive years. In 2009, DP World handled more than 43.4
The company constantly invests in terminal
million TEU (twenty-foot equivalent container
infrastructure, facilities and people, working
units) across its portfolio from the Americas
theBaltic March 2010 www.thebaltic.com
www.dpworld.com
111
Events
What’s on where A round-up of conferences, exhibitions and events in the shipping world March 3-4 Ship Management www.acieu.net
London
March 9-10 London Chemical & Product Tankers Covering charter market, commercial, operational and regulatory issues, this top quality conference promises to be the sector’s leading forum. www.navigateconferences.com March 16-17 Athens 7th Greek Shipping & Ship Finance Conference 2010 This international Green Ship Technology conference, meeting the green technology challenges for sustainable shipping. www.lloydslist.com/ll/events/index.htm March 16-18 China Maritime www.bairdmaritime.com
Hong Kong
March 22-24 Conneticut CMA Shipping The CMA is the largest commercial shipping association in the US, which means that leaders of industry and government come to share their ideas, voice concerns, or explore answers to today’s new issues. www.shipping2010.com March 23-24 London Offshore Support Vessel Summit A look at the issues that are currently dominating the market, including the best operational and technical practices. www.acius.net March 24-26 Singapore AP Maritime 2010 Asia Pacific Maritime (APM) is the one-stop market for the region’s maritime community, showcasing the latest in marine engineering and port technology. www.apmaritime.com/en
April 11-23 Cambridge Anatomy of Shipping For those needing the big picture, whether through changing roles, entering the shipping industry for the first time or as a refresher. www.seatrade-global.com/Anatomy/aintro.htm April 12-13 Beijing Coaltrans China A look at China’s changing coal markets, including demand growth, emerging technology, and the effect on global freight markets. www.coaltrans.com April 13-14 Dubai 6th Maritime HR Crew & Development www.acius.net April 18-19 Dubai ShipTek 2010 A two-day international conference on shipping, marine and offshore industry and ShipTek Expo 2010. www.shiptek2010.com April 25-30 Singapore Singapore Maritime Week A week of conferences, dialogues, exhibitions and social events in celebration of all things maritime. www.smw.sg April 26-27 New York Freight Derivatives and Shipping Risk Management Managing freight, bunker, interest and counterparty risk www.balticexchange.com/training April 26-27 Singapore 2nd Annual Offshore Support The 2nd Annual Offshore Support Vessels Asia-Pacific conference examines the tough economic realities and developments in the OSV market and how they will impact the stakeholders. www.osvconference.com
March 25 New York Invest in Shipping International Forum www.capitallinkforum.com/shipping
April 27-29 Helsinki Arctic Shipping summit 2010 A two-day conference highlighting the most crucial developments and updates in the field of Arctic Shipping. www.arcticshippingsummit.com
112
theBaltic March 2010 www.thebaltic.com
April 28-29 New York Advanced Freight Modelling & Trading Trading strategies for FFA players www.balticexchange.com/training April 28-29 Martech 2010 www.smw.sg/cal_Martech.asp
Singapore
April 28-29 4th Maritime Risk Management
London
May 10-11 Hamburg Tradewinds: Marine Risk Forum The melting pot for ideas and interaction between shipowners, risk managers, underwriters, brokers and club managers. www.nhstevents.com June 1 Oslo Tradewinds: Oslo Shipping Forum Designed and produced for shipping ceos from listed and private shipping companies, brokers, key investors in shipping, bankers and entrepreneurs. www.nhstevents.com June 28-29 Singapore Freight Derivatives and Shipping Risk Management Managing freight, bunker, interest and counterparty risk www.balticexchange.com/training July 1-2 Singapore Advanced Freight Modelling & Trading Trading strategies for FFA players www.balticexchange.com/training August 24-27 Stavanger Offshore Northern Seas A look at the political, economic and technological issues surrounding the international oil and gas industry. www.ons.no
BROAD COVERAGE, TAILORED SOLUTIONS
No.1 ENERGY & COMMODITY BROKER 2010 ENERGY RISK COMMODITY RANKINGS No.1 WET FREIGHT (FFA) BROKER 2009 ENERGY RISK COMMODITY RANKINGS No.1 COMMODITY BROKER 2008 ENERGY RISK COMMODITY RANKINGS GFI’s Freight division, together with ACM Shipping and McQuilling Brokerage, is renowned for offering tailored and value-added solutions. Global synergies between our wet FFA, dry FFA and physical freight desks and other commodity markets in which GFI operate enable us to provide valuable insight into these interrelated markets. We help market participants manage their freight exposure more effectively by providing customised hedging strategies.
GFI ENERGYMATCH® EUROPE
GFI’s multi-commodity hybrid trading platform allows market participants to execute both wet and dry FFA transactions with speed and efficiency. Clearing links to LCH.Clearnet and NOS minimise the effects of counterparty exposure while providing transparency of market pricing.
DATA & ANALYTICS
GFI’s analytics tool FENICS ® Freight, coupled with GFI’s independent market data, provides an in-depth understanding of market movements and potential trading opportunities by facilitating price discovery, trends and route analysis. www.GFIgroup.com/freight
WET FREIGHT FFA
DRY FREIGHT FFA
DRY FREIGHT
LONDON +44 20 7422 1180 NEW YORK +1 212 968 2050 SINGAPORE +65 6820 2980 futures@acmshipping.co.uk
LONDON +44 20 7877 8090 SINGAPORE +65 6435 0469 CAPE TOWN +27 21 410 8876 dryfreight@GFIgroup.co.uk
LONDON +44 20 7877 8151 NEW YORK +212 968 2211 SINGAPORE +65 6435 0471 SHANGHAI +86 21 6859 6721 drycargo@GFIgroup.co.uk
©GFI Group Inc. 2010. This advertisement has been approved by GFI Brokers Ltd, which is regulated by the FSA in the UK. GFI Securities LLC, a FINRA and NFA regulated firm.
www.imarex.com
Managing your counterparty risk NOS Clearing is the specialized clearing house for the freight industry. We are providing flexible solutions and products, first-class customer service and quick responses to customer and market needs. Clearing at NOS eliminates counterparty risk in derivatives trading and ensures you prompt and full payment of all amounts due under all contracts. NOS is established by the industry for the industry. Our innovative service, brought to you by our customer service teams and IT systems, will support, simplify and improve risk management functions, book keeping and back office activities. Offering a full range of derivatives contracts in all market segments, NOS offers both standardized and tailor-made futures and options for the dry and tanker market. These products create unique possibilities to effectively manage risk, through trading on exchanges as well as through OTC brokers. You may access our clearing services via a Direct Membership or via the global General Clearing Members.
Contact us today at: Tel: +47 23 25 93 01 • +65 64 13 00 47 Email: operations@nosclearing.com www.nosclearing.com