The Baltic - Winter 2011

Page 1

the Baltic

the

Maritime Security

W IN T E R 2 0 1 1

Baltic moves to simplify wet freight trading UAE ports sector on road to recovery Going green in Gothenburg

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

WINTER 2011


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the

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

Publisher

W H Robinson editor

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

SALES manager

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

DESIGNER

Justin Ives

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

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

theBaltic Winter 2011 www.thebaltic.com

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Contents Chairman’s message 7 Mark Jackson Baltic briefing  7

8

Dry derivatives forum

9

Move to dollar per tonne for tanker FFAs

10 New Baltic vice chairman 11 Lifeboat crew visits Baltic 12 Baltic Exchange honours Maersk Mc-Kinney Møller   10

13 Rigel lifts Baltic 2011 Cup 14 BECC tie with bankers, but battered by Braemar at Lords 15 YBA night 16 Friends reunited 17 Christmas crackers

11

18 Contacts Logbook 20 The short sea pioneers People, places, plcs

17

22 Scary times for shipping Baltic Comment 24 Michael Grey State of the market

33

25 Tankers 26 S&P 28 BIMCO 31 Dry Bulk 33 Offshore 35 Towage & salvage

37

37 Shipmanagement, crewing and employment

theBaltic Winter 2011 www.thebaltic.com

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Contents FFA 39 Baltic moves to simplify wet freight trading Environment 43

43 Going green Oxford Analytica 47 Global commodity ‘financialisation’ increases risks Insurance special 49 Reducing risk

47

Maritime security 57 To arm or not to arm? Maritime safety 70 Putting safety first

57

UAE 73 UAE ports sector on road to recovery Maritime cluster 80 Rock resilience

73

Scandinavia 83 Going green in Gothenburg German law 87 Going for growth in Germany Insurance news

80

91 Insurance parlance 93 ITIC Legal news 94 Rotterdam redrafting

87

104 Events theBaltic Winter 2011 www.thebaltic.com

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Chairman’s message Mark Jackson

Chairman’s message A

s I sit down to pen this message to readers, the UK’s Chancellor of the Exchequer stands before the House of Commons delivering his Autumn

Statement, giving a gloomy assessment of the state of the nation’s finances and its short term economic outlook. Eurozone woes, rising youth unemployment, lower global growth and higher government borrowing than expected mean difficulties for us all. In these tough times, strong leadership and an understanding of the needs of the various key sectors which make up UK plc are very necessary if we are to find our feet again. The UK’s maritime sector is one of these key sectors and growth here will play a role in growing our economy. Our government and public should be proud of the achievements of the maritime sector and its ability to bring in overseas earnings. The latest report on our industry by the CityUK shows that the UK’s maritime services sector alone generates a GDP of £1.5bn; provides employment for nearly Tradewinds

12,000 people; raises tax revenue of £483m; and produces overseas earnings of £2.2bn. According to the authors of “Maritime Services November 2011” this contribution is enhanced by the multiplier impact both from business

Mark Jackson

procured through the supply chain and also from spending of those employed in maritime

is important that we demonstrate the breadth

to prevent further damage to shipping from

services and the supply chain. Taking this impact

and depth of the many businesses which make

changes to the Non-Dom tax regime and the

into account, it is estimated that the broad

up what we call the City. The City is not just

tinkering with the Tonnage Tax. As we have

contribution to GDP and tax revenue is more

about banking, but also shipbroking, commodity

watched businesses diminish their presence in

than doubled to £3.9bn and £1.4bn respectively,

trading, legal advice, insurance services and

the UK and increase it elsewhere, our continued

while employment dependent on maritime

shipowning. We must not allow a breakdown

message to Government must be that they

services is increased more than fivefold to over

in trust between the public, politicians and the

need to understand the reality of international

63,000. If we also take our ports, manufacturing

financial sector impact us. To this end, the Baltic

competition.

and shipping industry and service sectors into

Exchange will continue to highlight the needs

The UK and the City provide world beating

consideration, the statisticians say that the

of our sector at the highest levels. The freight

maritime services and we need to make sure

GDP contribution rises to £6.1bn and provides

derivatives sector is directly impacted by the

that our leaders understand what we need to

employment for 117,000.

transition of the Financial Services Authority to

remain at the heart of the international shipping

At a time when the role of the UK’s financial

new structures next year and the implementation

industry.

services sector is being questioned by many, it

of MiFID2 will take place soon. We have tried

theBaltic Winter 2011 www.thebaltic.com

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Baltic briefing

Dry derivatives forum P

resentations from October’s Baltic Exchange

Hotel and once again pulled in a large audience

and FFA Brokers’ Association Dry Freight

of FFA brokers and traders. Topics on the agenda

Derivatives Forum are now available in the FFA

included discussion of screen trading, an over-

area of www.balticexchange.com. This year’s

view of the latest regulation for this market and

forum took place at London’s Royal Garden

advice on recovering FFA hedging losses.

Michael Saverys (Bocimar Int), K Carsten (Klaveness), George Wells (Cargill), John Banaszkiewicz (FIS)

Janet Sykes, FFABA chairman

Isabelle Kurek-Smith (LCH Clearnet) and Tom Cutler (Swissmarine)

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theBaltic Winter 2011 www.thebaltic.com


Baltic briefing

Move to dollar per tonne for tanker FFAs T

anker freight derivative traders meeting at the Freight Market Information Users’ group

A working group was formed to resolve some details of future market practice.

has been a problem for derivative traders in the past.

at the Baltic Exchange agreed that from the

Traders are already pricing contracts

The move does not in any way affect the

New Year all Tanker FFA contracts which are

for settlement on a $/MT basis for trades

use of Worldscale in the physical market and

traded in Worldscale would be converted to

which settle in the next and subsequent

the Baltic Exchange will continue to provide its

a dollar per metric tonne ($/MT) price when

calendar years, and the decision removes the

daily index tanker assessments on a Worldscale

presented to the clearing houses. The move

uncertainty faced by the market when using

basis.

is designed to help spur trading and follows a

the Worldscale points based system. With the

Attendees at the Forum which followed

successful transition of most trading of FFAs

calculation of Worldscale flat rates changing

the User Group meeting also heard a market

from Worldscale to $/MT. It will allow trad-

at the end of each year to reflect movements

presentation from Henry Curra at ACM and

ers who prefer to continue to quote trade in

in bunker prices, port costs and exchange

independent analyst Aage Figenschou talk

Worldscale for near-dated contracts to execute

rates, and occasional ad hoc changes during

about dealing with financially distressed shipping

against $/MT prices from counterparties.

the year, uncertainty about the future flat rate

companies.

Lord Mayor of London commends UK maritime services N ewly elected Lord Mayor of London David

us to retain international shipping investors and

that the Baltic Exchange would work with the

Wooton highlighted the £26bn contribu-

attract new business.”

Lord Mayor to ensure that central government

tion made by maritime businesses to the UK

Baltic Exchange chairman Mark Jackson

policy towards the sector was supportive, high-

economy during a visit to the Baltic Exchange

called on the Lord Mayor to help communicate

lighting the tonnage tax, non-dom tax regime

in November.

the UK’s leadership position within the global

and the implementation of MiFID 2 as particular

maritime industry to the general public and said

areas of interest.

In the first visit of his mayoralty, the Lord Mayor said: “The UK has a uniquely strong maritime services sector built on 300 plus years of experience. It is one of the UK’s biggest earners, delivering over £26bn to the UK economy and employs half-a-million people. It could play an even greater role in the future assisting the Government objective of reducing debt.” He noted that during his term in office, one of his priorities would be ensuring that the City and its institutions are fit for the future. London today is the world’s foremost chartering, financial, insurance and legal centre for the global maritime industry, thanks to the presence of international shipowners, Lloyd’s of London,

the

Admiralty

and

Commercial

Courts and the United Nation’s International Maritime Organization. The Lord Mayor commended the Baltic Exchange’s work, saying: “The Baltic’s specialist knowledge and experience is vital in providing a strong and stable environment in the UK, helping

Lord Mayor David Wooton and Baltic Exchange chairman Mark Jackson

theBaltic Winter 2011 www.thebaltic.com

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Baltic briefing

New Baltic vice chairman T

he

Baltic

Exchange

Board of Directors has elected Quentin Soanes to serve as its vice chair-

man. He replaces Paul Over, who continues to serve on the Baltic Exchange Board and as chairman

of

Baltic

Exchange

Derivatives Trading, the subsidiary company that runs the Baltex Multilateral Trading Facility for dry freight derivatives. Quentin Soanes said: “I am honoured to have been appointed to this position and look forward to supporting current chairman Mark

Jackson

as

ably

as

my predecessor.” Paul Over said: “As is widely known, my core raison d’être for participation at the Baltic has been in the development of the freight futures business. With the successful launch of Baltex, it is natural for me to wish to focus my energies in that direction. The expansion of the Baltic’s activities through

Baltex

has

greatly

increased the time commitment of all those involved, especially in respect to the responsibilities for FSA regulatory requirements that Baltex has secured and must hold and maintain.” Quentin Soanes is a founding shareholder and main board director of Braemar Seascope PLC, where he is head of business development. He is also joint managing director of Braemar Seascope Ltd. He has worked in the shipbroking and shipping services industry since 1977 and specialises in sale & purchase. He joined the Baltic Exchange Board in 2005. Quentin Soanes

10

theBaltic Winter 2011 www.thebaltic.com


Baltic briefing

Lifeboat crew visits Baltic

C

rew members of the Salcombe lifeboat were the guests of honour at the Baltic Exchange in October. The Baltic Exchange and its members

are keen supporters of the RNLI and have sponsored lifeboats for nearly 150 years. Baltic members raised over £500,000 towards the purchase of a new lifeboat for RNLI Salcombe, The Baltic Exchange III, which entered into service in 2008 and is stationed at Salcombe. The Tamar class vessel has a range of 250 nautical miles and a top speed of 25 knots. See www.salcombelifeboat.co.uk for updates from the Salcombe station.

Lifeboat crew enjoyed lunch at the Baltic

Salcombe yawl weekend T

he Baltic held a weekend of yawl racing in Salcombe at the beginning of October, raising £6300 for the Salcombe lifeboat and £1000 for the Salcombe Yacht Club. The Salcombe Yawl is a small sailing dinghy restricted class native to Salcombe in south Devon. Built traditionally by hand from mahogany with wooden spars and varnished decks, the Salcombe

yawls are serious racing boats attracting fierce competition.

There were various events throughout the weekend, including fund-raising dinners and lunches, with the main focus being on yawl racing between the Baltic members and the Salcombe lifeboat crew. Organised by a Baltic Exchange member Mike Robson and the Yawl Owners Association, 12 yawls were provide by, and skippered by, their owners a very generous loan of boats and time. Lifeboat operations manager Graham Parker said: “We were very lucky with the weather – even if there could have been a bit more wind at times. I’d like to say a huge thanks to the Baltic Exchange members, Yawl Owners Association and Salcombe Yacht Club. I hope that this will become an annual event but can’t promise such wonderful weather every time.” Position

Team

Boat

Helm

1st

Baltic Exchange

Astraea

Dan Bridger

2nd

Howe Robinson

Firecrest

Andrew Savell

3rd

Platou 179

Pas Encore

Richard Fulford Smith

4th

Nomikos

Lobster

Michael Webster

5th

Pacific Basin

Zenga

AJ Squire

6th

Gray Page

Ladybird

Davis Edmonds

7th

Offshore Cox

Sula

Chris Winzar

8th

Clarksons

Kingfisher

Michael Knowles

9th

Baltic Ladies

La Chouette

Ian Savill

10th

Brown Jenkinson

Quince

Andrew Sterling

11th

Holman Fenwick

Blinkie

Philip Smith

12th

Inshore

Skylark

David Sworder

theBaltic Winter 2011 www.thebaltic.com

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Baltic briefing

Baltic Exchange honours Maersk Mc-Kinney Møller T

he achievements of Maersk Mc-Kinney Møller, aged 98, were celebrated at a lunch attended by the legendary Danish ship-

owner and held in his honour at the Baltic Exchange this October. The occasion marked his 20 years as a Life Honorary Member of the Exchange. Welcoming Mr Mc-Kinney Møller to the Baltic Exchange, chairman Mark Jackson said: “It is a delight that you have been able to accept our invitation and I very much hope that you will feel that you are back among friends.” Referring to Mr Mc-Kinney Møller’s speech of 1991 when he accepted his Life Honorary Membership, Jackson continued: “During your speech in October 1991, you talked about the professionalism of the Baltic membership, their thoroughness and attention to detail, but nonetheless the way in which everyone was expected to stand by the arrangements they had agreed verbally. I am pleased to say that the Baltic still demands these standards of behaviour and remains a firm proponent of the highest possible standards in all matters in shipping.” Mr Mc-Kinney Møller first visited the Baltic Exchange in 1936 as an apprentice to the British shipping firm H.Hogarth & Sons. AP Møller-Maersk has conducted its business through Baltic Exchange members since the early 20th century and its London company has been a member since 1951. Previous recipients of Baltic Exchange life membership awards have included IMO Secretary-General Efthimios Mitropoulos (2010), Sammy Ofer (2009), the Duke of Edinburgh (1953) and Winston Churchill (1954). Maersk Mc-Kinney Møller

Gibsons summer party B

altic member firm EA Gibsons held its summer staff party in London, with 200 guests from its offices around the world attending.

Class of 1954 F

ormer Baltic chairman Eric Shawyer and friends met for lunch aboard HQS Wellington this November for the tenth such gathering of ship-

brokers who first joined the Baltic Exchange in 1954.

Left to right: Arild Brune (Gibson Oslo), Patrick Allen (Specialised Gibson), Maria Allen, Ellen Brune, Julian Robinson (S&P, Gibson)

12

theBaltic Winter 2011 www.thebaltic.com

Class of 1954


Baltic briefing

Charity Baltic quiz night

Rigel lifts Baltic 2011 Cup R

igel was the victorious team at the Baltic

evening

tournament

Exchange five-a-side football tournament

Clarksons,

Howe

with

Rigel

Robinson,

the

beating

A

total of 16 teams competed in the Baltic’s Quiz Night in November, raising over £700

Baltic,

for the charity Cancer Research. A Baltic

which took place in November on London’s Old

Lykiadpolous, Maersk Broker along the way,

Exchange team consisting of Willy Lyth, Pat

Street pitches. 11 teams participated in the

before beating L Dens 2-1 in the final.

Swayne and Duncan Bain were the winners of

?

the Charles Macmillan Trophy, narrowly beating HSBC by half a point.

Sadly departed W

e regret to announce the recent passing of the following Baltic members:

The winning Rigel team

Malcolm Beard

New Year wine tasting competition T

Members will learn with regret of the death of Malcolm Beard, aged 81. Mr Beard was first elected a member of the Baltic in 1952. From 1968 until his retirement in 1994, he was the Principal for M D Beard & Co Ltd.

Derek Cook he Baltic will be running a wine tasting com-

Mr Cook was first elected a member of the Baltic

petition evening on 2 February, led by David

on 16 November 1954 and represented Howard

Hughes. The evening will involve tasting eight

Houlder & Partners throughout his membership.

different wines followed by a curry and will be

He was a Baltic retired member between

held in the Baltic Bar. To book your place, please

1987-2002.

contact Crispin Eccleston.

Nicolaos J Hadjipateras

Email: ceccleston@balticexchange.com

Mr Hadjipateras was first elected a member of the Baltic Exchange in 1969 representing John C Hadjipateras & Sons Ltd. He also served at the Council of the Greek Shipping Co-operation Committee.

Lumir Kubat Mr Kubat was first elected to the Baltic Exchange in 1986 for Intrasped (London) Ltd until 1994, when he became a Retired Member.

Jim Sibree Mr Sibree was elected a member of the Baltic Exchange in the 1970s representing James A McLaren & Co Ltd.

theBaltic Winter 2011 www.thebaltic.com

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Baltic Briefing

BECC tie with bankers, but battered by Braemar at Lords

T

he City Twenty 20 competition this

high as the bowlers took up the challenge.

BECC on a pitch moistened by a handy

year re-located to the iconic JP Getty’s

Unfortunately the Lloyd’s batsman proved

September shower.

estate at Wormsley, a venue that hosts

typically formidable, and in conjunction with a

Bang! The carnage was terrible as the

county cricket as well as test match

pedantic no ball controversy (their star batsman

vaunted BECC top order, slayers of Stock

touring sides and is generally considered among

being caught off a bouncer with three fielders

Exchange and Lloyd’s, were cut down by a

the finest cricket grounds in the world.

outside the ring) they were able to cruise home

variety of S&P, Dry Cargo and IT demons, and

A fitting setting therefore for some Baltic

in the last over despite two wickets for Freeland

apart from some defiant stroke-play by HSBC’s

Exchange CC heroics against their mighty (well

and another tidy spell from man of the match

Charlie Russell, the innings subsided largely

funded) foes from the Stock Exchange and

Procter.

without trace to an extent that need not be recorded in this report.

whom boast a number of

Lloyd’s went on to beat the Stock Exchange

recent first class players within their ranks.

in the last game to retain the trophy in front of a

However, we are generous enough to

However, as their portfolio disclaimers testify,

rapturous, sun-baked crowd, and the success

acknowledge the ease and style in which

past performance is no guarantee of future

of the event immediately led to a return invitation

Braemar’s Guy Newton and Billy Price were able

gains, and SECC captain James Bruce (ex

from the Getty family for 2012.

to knock of the runs in only 11 overs, despite

Lloyd’s, both of

Hampshire and England A fast bowler, now

Having graced one of the finest cricket

an impressive debut from fast bowling hope

RBS banker) found himself credit crunched

grounds, the Baltic was privileged to end its

Paul Farren, to record a victory celebrated by

as BECC’s openers got off to a blazing start

season at undoubtedly the greatest of them

Captain Kidd in the style of Henry V at Agincourt.

in the opening game, reaching 65 from the

all in St John’s Wood, for a match at Lords

As masters of the gentlemanly art of graceful

first seven overs. Henry Walpole continued the

against the corporate cricketing colossus

defeat, the Baltic was pleased to have the

carnage with a 30 ball 50 as the Baltic reached

that is Braemar Seascope. After months

chance to share a conciliatory drink with their

a competitive 167 from their allotted 20 overs.

of kidology about the relative strengths of

hosts and commence negotiations for a return

Bowling has always been viewed with

their XIs, Braemar captain Henry Kidd won

to Lords next year.

suspicion by most Baltic players (and usually the

the toss and had no hesitation in inserting

Jamie Freeland reports

reverse by opposition batsmen), however some clever off-spin from new cap Ollie Dannatt (ICAP) and Angus Proctor (ACM/GFI) kept the SECC largely in check until a nail-biting final over saw seven required, then three off the final ball after an inspired series of non-turning deceptors from Dannatt. A spliced blow, some manic running and a fumbled return saw the Stock Exchange record a two with an unprecedented tie resulting – heartily celebrated by the Stock Exchange. Frustrated but inspired, the Baltic immediately tore into City T20 cup holders Lloyd’s, and the opening fireworks exploded with even greater ferocity as the 100 was brought up in the tenth over. This time the undoubted star of the show was the princely Proctor, who in partnership with Walpole peppered the hospitality tents with towering sixes to record 52 off 37 balls to add to the century recorded against the same opponents in the all day game earlier in the year. A cameo from Chris Owen (HFW) saw the total to 174 in the 20th over and hopes were

14

The Baltic boys at JP Getty’s estate

theBaltic Winter 2011 www.thebaltic.com


Baltic Briefing

YBA night A

nother successful Young Baltic night took place at Pause in central London earlier this year. With over 200 shipping professionals aged 35 and under

attending, the gathering was one of a series of get-togethers organised by the Baltic throughout the year. A Christmas lunchtime drink is planned in the City for Young Baltic members. Contact Cris Eccleston for further details. Email: ceccleston@balticexchange.com Callum Beaumont (SSY), Fivos Ilyadu (SSY), Alexander Tsavliris (ICAP), George Gravanis (PLATOU), Eleana Danga (Vogt & Maguire), Stefanos Altsitzoglou (SSY)

Guy Heskin (Howard Houlder), Jonathan Crawford (L Dens), Kevin Havis (Howard Houlder), Adam Cook (L Dens)

Thomas Skogstad (Clarksons), Paul Farren-Rigel (Clarksons), Peter Love (Clarksons), Phil Harding (Stemcor), Jonathan Braham-Everett

Suraj Kamdar (ICAP Tanker Projects), Alexander Tsavliris (ICAP),

Mark al-Agraa & Jacqueline Norde (Clarksons) and

Jo Simmonds (Howe Robinson), Paal Norenberg (MOL London)

Sam Edwards (Beaufort Shipping), Sarah Anthony (Howe Robinson) &

Dimitrios Georgantis (Howe Robinson)

Fotis Mourikis, Jacqueline Norde & Mark al-Agraa (Clarksons)

Sam Round (PCL)

theBaltic Winter 2011 www.thebaltic.com

15


Baltic Briefing

Friends reunited T

of

he annual lunch for retired Baltic members took place in the fine surrounds

London’s

Merchant

Taylors Hall this autumn. Former shipbrokers came from as far away as Australia came to renew old friendships and relive the good old days. Michael Attwood, Tim Brown

Bernie Miles, John Wood, Laurie Castle

Tim Patridge, Derek Webb, Richard Seal

Michelle Pink and Julian Gretby

Martin Hill, Derek Smith, John Maskell

John Lemos, Diamantis Lemos, David Cleveland

16

John Proctor, Perry Perera

Eric Spall, Terry Northwood, RK Till, Ken Amess

theBaltic Winter 2011 www.thebaltic.com


Baltic Briefing

Christmas crackers David Hughes proposes some wine matches for your festive fare

W

ell, here we are at that time of year

Medoc (left side). For good value, look for the top

vibrancy of a steely, minerally crisp white wine, try

again and in not too many days

Châteaux, many of which have ‘second labels’.

a Riesling from Australia’s Clare or Eden Valleys or

time, Santa’s call will light up our

2000 to 2006 were all exceptional vintages

the rising star from Austria, Grüner-Veltliner.

households with merriment and

and most can drink now. South America offers

Puddings: Here, custard does for puddings

less expensive options: look for the excellent

as gravy to our main treat. With Christmas pud-

the gift of giving. And part of that giving is also to ourselves, for

Cabernets from Chile or Malbecs from Argentina.

ding, I find best matches are a glass of Spain’s

it is this time of the year that we decide to treat

Game: Here, I’m for the Northern Rhône

rich Oloroso Sherries, a Muscat from Rutherglen

ourselves and look to pay that bit more than usual

with its wonderfully structured wines made from

in Australia’s Victoria State, LBV Port and/or for

for our glass of Christmas cheer.

the Syrah grape. Good value comes from vil-

an additional kick to your custard – blend in a

Now what do we splash out on to match our

lages such as Saint-Joseph, Cornas and Crozes-

large glass of Advocaat.

festive feasts? Traditionalists will have turkey, oth-

Hermitage. Southern Rhône, primarily made with

Mince pies: Go best with a cup of tea!

ers seek a pairing for game, goose, roast beef,

Grenache grapes, has excellent value offerings:

However, if alcohol is still the vogue of the

pork or an eye-catching array for vegetarians.

Vacqueras, Lirac, Rasteau, Gigondas or a good-

moment, again a rich Sherry or Malmsey (and

All’s fine then with all these options until we

name Côtes du Rhône. This is also the home of

they are so good!) or even try a cold beer from

add the killer touch – gravy! Wine is meant to

a humdinger of a Rosé – Tavel. Not cheap, it has

the fridge!

match food not a hot, sometimes rich and spiced

the character to match most dishes.

concoction made to granny’s ageless recipe.

Roasted pork: Another favourite and if you’re

This is the last article of the year and I wish

But still, it’s a must. And then on to the plate go

indulging in salty crackling and a good brambly

to thank the many of you who have sent very

pickled onions, red cabbage, gherkins and my

apple sauce, then do give my surprising match

kind and supportive messages in response to

favourite, pickled walnuts – all of them soaked

a go: Gewurztraminer from Alsace; the lychee,

these missives.

in vinegar. Add to this that what is about to be

honey and spice combination really do work.

poured at the table will not be the first glass of the day...

Duck and goose: have a big following. Here, acidity is needed to counter the fatti-

And so, whatever your choice of tipple, it is Christmas, which does justify spending just a bit more for those bottles. I wish you all a most enjoya-

So what do we do? Well, in my household,

ness, especially if gooseberry compôte is on

at exactly 10.30am (or the opening of the third

show. Sauvignon Blancs from New Zealand and

ble Christmas and health and

present – whichever is earlier) we twist the cork

South Africa or the Loire Valley where Sancerre,

happiness for 2012.

from a good bottle of Champagne. I then enjoy

Quincy, Menetou-Salon & Pouilly Fumé come up

a large, pre-lunch glass of Sherry, preferably the

trumps. If red, I’d go for a good Pinot Noir from

salty-dry Manzanilla, happily knowing my wine

the New World or Burgundies from the lighter

choices are at the ready.

Santenay, Rully, Mercurey up-to the ‘big boys’ -

Wine is very much a personal desire. One

Chambertins etc., if you pocket allows.

will say game must be matched with Claret,

The cold cuts: Gammon is a big favourite on

another will shout the corner of Burgundy. So

Boxing Day in our household joined on the plate

what I am going to propose are purely my per-

by cold turkey. After the previous day’s excesses,

sonal thoughts, based on the fact that we’ll all

a vibrant, fruity red wine, preferably lightly chilled,

be pouring gravy over the food and indulging in

is required and here look to a Beaujolais-Villages,

the odd pickle.

Chiroubles or other favourites, made with the

Turkey: White – Chardonnay from Australia,

Cabernet-Franc grape from the Loire valley, the

California or France’s Mâconnaise, preferably with

wines from Chinon, Saumur-Champigny and

a little oak, will add some structure and be a fine

St-Nicolas- de-Bourgueil have delicious dry

match. If red, one of the weightier cru-Beaujolais

raspberry nuances.

such as Morgon or Brouilly and do try for 2009. Beef: Cabernet-Sauvignon from Bordeaux’s

Cheers!

These wines will also match the late-night sandwiches where, should you prefer the

theBaltic Winter 2011 www.thebaltic.com

17


Baltic Briefing

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

Golfing Society

Sub-Aqua Club

Stephen Calafti

Chris Cox, c/o Frank Symons Ltd

Lorraine Burns

Anglo Greek Chartering, The Baltic Exchange

Devonshire House

The Baltic Exchange

38 St Mary Axe, London EC3A 8BH

146 Bishopsgate, London EC2 M4J

38 St Mary Axe, London EC3A 8BH

Tel: +44 (0) 20 7283 9621

Tel: +44 (0) 20 7377 5423

Tel: +44 (0) 20 7369 1638

E-mail: info@balticgolf.co.uk

E-mail: lburns@balticexchange.com

Jamie Freeland

Lawn Tennis Club

Young Baltic Association

AM Nomikos, 4th Floor

Crispin Eccleston

Crispin Eccleston

40 Grosvenor Gardens, London SW1 0EB

Tel: +44 (0) 20 7369 1654

The Baltic Exchange

Tel: +44 207 591 1800

E-mail: ceccleston@balticexchange.com

38 St Mary Axe, London EC3A 8BH

Cricket Club

E-mail: jf@amnomikos.com

Tel: +44 (0) 20 7369 1654

Sailing Association

E-mail: ceccleston@balticexchange.com

Simon Cox Howe Robinson Shipbrokers 77 Mansell Street, London E1 8AF Tel: +44 (0) 20 7457 8421

Key Baltic Exchange contacts Management

Government Broker

Baltex

Tel: +44 (0) 20 7283 9300

Pat Swayne

Paul Stuart-Smith

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

Tel: +44 (0) 20 7369 1668

Tel: +44 (0)20 7369 1670

VPN 171 2000

Fax: +44 (0) 20 7623 6644

pstuartsmith@balticexchange.com

E-mail: enquiries@balticexchange.com

E-mail: pswayne@balticexchange.com

Chief Executive

Dispute Resolution

Robin King

Jeremy Penn

Barrie Wooderson

Tel: +44 (0)20 7369 1637

Tel: +44 (0) 20 7369 1624

Tel: +44 (0) 20 7369 1674

E-mail: rking@balticexchange.com

E-mail: jpenn@balticexchange.com

Fax: +44 (0) 20 7623 6644

Marketing

E-mail: bwooderson@balticexchange.com

Freight Market Department

PA to Chairman and Chief Executive

Communications

Tel: +44 (0)20 7369 1625

Jill Bradford

Bill Lines

E-mail: wlyth@balticexchange.com

Tel: +44 (0) 20 7369 1621

Tel: +44 (0) 20 7369 1653

E-mail: jbradford@balticexchange.com

E-mail: blines@navigatepr.com

Baltic Exchange Charitable Society

Membership Manager

8 Eu Tong Sen Street

Jackie Harrison

#17-87 The Central

Richard Butler

Tel: +44 (0) 20 7369 1633

Singapore 059818

Tel: +44 (0) 20 7283 6090

E-mail: jharrison@balticexchange.com

Tel: +65 6377 0654

Willy Lyth

The Baltic Exchange (Singapore) Philip Williams

E-mail: pwilliams@balticexchange.com

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

Events Room Hire Head of Finance

Jill Bradford

The Baltic website

Duncan Bain

Tel: +44 (0)20 7369 1621

www.balticexchange.com

Tel: +44 (0) 20 7369 1627

Email: jbradford@balticexchange.com

E-mail: dbain@balticexchange.com

18

theBaltic Winter 2011 www.thebaltic.com



Logbook

The short sea pioneers Although the roll-on, roll-off principle isn’t new, pure freight-carrying roros only started to emerge after WWII, as Ambrose Greenway explains

T

he roll-on, roll-off principle is certainly

in 1950 after the addition of a fourth ship.

National Line took delivery of the similar-sized

not new and I have a picture post-

The company was taken over by the British

Bass Trader from Newcastle NSW for service

card of a stagecoach crossing Lake

Transport Commission in April 1954 and three

between Melbourne and North Tasmanian

Windemere on a rudimentary wooden

more LSTs chartered to start up services from

ports. She could carry 1,400 tons of cargo

pontoon ferry fitted with ramps. Trains began to

Tilbury to Antwerp and Rotterdam in place of

including cars, packs of processed timber,

be transported across water on ferries as early

the original Hamburg service. All seven were

general cargo and loaded semi-trailers and

as 1833 and the first car ferry, Canadian Pacific’s

taken up by the government in late 1956

was propelled by twin aft-located 18 cylinder

diminutive wooden Motor Princess, began oper-

during the Suez crisis.

Napier Deltic turbo-charged diesels. In addition she was stabilized and had controllable pitch

ating between Vancouver Island and the main-

BTC’s increased financial muscle led to the

land in 1924. Pure freight-carrying roros, how-

delivery by noted ferry builders Wm Denny &

ever, only began to emerge after WWII.

Sons in 1957 of the first purpose-built, stern-

The next developments in short-sea roros

The freight roro was really a development

loading freight roro Bardic Ferry, a 2,550gt

came with Wallenius Lines 5-ship Aniara series

of the US designed bow-loading Tank Landing

vessel with accommodation for 17 first- and

of bow-loading car carriers between 1963

Craft (LST) and its use was pioneered by

38 second-class passengers in addition to

and 1965, the latter year also witnessing

Colonel Frank Bustard, an army transportation

13 private cars, 48 trailers, two vans and

the delivery of Holland Steamship Company’s

officer who witnessed landing trials at New

19 freight containers, crane loaded on to

Rijnstroom for a twice weekly Amsterdam-

Brighton by UK-built LSTs prior to D-Day.

the long after upper deck. She was fitted with

Shoreham shuttle. As both terminals were

An enterprising man, he had quit his job as

twin rudders and driven at 14 knots by two

within locked areas, she was fitted with

passenger manager for White Star Line before

Sulzer diesels.

twin side ramps aft. A year later near sister

propellers and a bow thruster.

its merger with Cunard in the early 1930s

Sister Ionic Ferry followed a year later and

Amstelstroom was completed for the Hull route

and established the Atlantic Transport Steam

improved sisters Cerdic Ferry and Doric Ferry

while Denmark’s DFDS introduced the first of

Navigation Co with the idea of offering cheap,

in 1961-62. Gaelic Ferry was added in 1964,

several different types of freight roro, the small

no frills transatlantic travel using two former

inaugurating the shorter Felixstowe-Rotterdam

bow-loading Suffolk which carried 25 trailers of

30,000gt Red Star Line ships. Sadly the plans

service, and over the next two years two

Carlsberg lager across the North Sea.

of this would-be Freddy Laker of his day were

US-built landing ships were purchased, the

In Germany, Henry Stahl’s Washbay Line

scotched, partly by the government, which

LST Baltic Ferry and the former LPD Celtic

built the 1,000dwt stern-door roros Alster

had invested heavily in the Cunard-White Star

Ferry, both of which had twin funnels. The final

and Lynn in 1967/68 for its Hamburg-Kings

merger and did not appreciate funding the

ASN roro was the 18-knot, 4,190gt Europic

Lynn/Boston service, the roro deck being

purchase of potential competition, and then by

Ferry, completed by Swan Hunters in 1967 for

principally for agricultural machinery, whilst

the outbreak of WWII.

the Felixstowe-Europort service, which later

Argo Line built the similar-sized Antares

saw service in the Falklands campaign.

and Arcturus to transport rolling cargo and

When peace returned, Frank Bustard & Sons Ltd’s Transport Ferry Service chartered

Meanwhile, across the Atlantic a short-lived

containers between Bremen/Hamburg and Hull

three LSTs in 1946 and modified them to

service between Florida and Puerto Rico in the

in association with Associated Humber Lines.

operate as military leave ships between

late 1950s with the trailership Carib Queen,

An internal hinged ramp allowed roro access to

Hamburg and Tilbury, their black, white and

a converted landing craft, had bankrupted

the upper deck.

blue funnel colours being those chosen for

her owners, but in 1960 Containerships Inc

France, Italy and Sweden placed freight

the projected transatlantic venture. On 21 May

introduced the first new US trailerships, the

roros in service towards the end of the

1948 a commercial service for road trucks

4,680gt/2,100dwt Floridian and New Yorker

1960s and the design concept mushroomed

and trailers was inaugurated between Preston

designed by George C Sharp and built in

during

and Larne, effectively offering a door-to-door

Baltimore in 1960 to carry both vehicles and

being greatly boosted by Per Hendriksen’s

service, and Belfast was added to the schedule

containers. The following year, Australian

Mercandia series.

20

theBaltic Winter 2011 www.thebaltic.com

the

next

decade,

its

popularity


Logbook

The Canadian-built LST Empire Baltic opened Frank Bustard’s

ASN’s Denny-built Bardic Ferry was the

Tilbury-Hamburg service in September 1946

first purpose-built freight ro-pax

Floridian and New Yorker of 1960 were the first

ANL’s trans-Tasman roro Bass Trader (1961)

US-built trailer ships

reversing into her Burnie berth

HSM’s Amstelstroom of 1966 in her second guise as Vroon’s

DFDS’s Suffolk (1966) ended her days as the Saudi Nawaf,

Mediterranean Express

seen entering Jeddah

Washbay Line’s Lynn of 1968 approaching the Elbe estuary

Argo Line’s Arneb joined sisters Antares and Arcturus in 1969

theBaltic Winter 2011 www.thebaltic.com

21


People, places, plcs

Scary times for shipping Orders – or a lack of them – for new ships have been at the centre of discussions in recent times and the orderbook is “quite scary”, according to Moore Stephens partner Richard Greiner. However, in the current economic climate, cost control is very much in focus

T

he “most important thing to notice was

survey were dominated by Europe (34%) and

the remorseless climb in operating costs

Asia (46%).

“no magic solutions”, he told delegates. While the past decade was the most prosperous shipbuild-

stopped in 2009” as owners brought

According to the latest survey, the main

ing supercycle, he said, 10 years ago there was a

costs under control, Richard Greiner

factors influencing operating cost were finance

“pretty grim outlook” in the aftermath of 9/11 and

says. He made his remarks at a conference to

costs at 26% followed by crew supply at 25%,

the dot-com crisis. At that time, the problem area

discuss the shipping accountant’s Operational

with demand trends at 14%, labour costs at

was Asia not Europe and since then there has

Costs survey for 2011, which included 26 ves-

12%, competition at 11% , raw materials at 9%,

been a complete reversal, with a decade of sus-

sel types.

with other costs amounting to 3%.

tained growth in Asia. This was an indication he

However, Moore Stephens’ quarterly surveys

Operating costs for repairs and maintenance

of confidence in the shipping sector show that

were highest for container ships this year at 8%

the industry is downbeat, with confidence at a

year on year. For bulk carriers the figure was 7.6%

The oil price was another key issue. “The

three-and-a-half year low and a downward trend

and tankers 0.8%. Operating costs for stores had

whole of the world was economically engineered

for the past six quarters.

dropped for tankers and container ships during

around $30 per barrel,” Dr Stopford said. In the

the year, with companies making savings due to

past five years “we have suddenly gone from an

using alpha type lubrication systems.

environment where energy and particularly oil

In the latest confidence survey, which ended in August 2011, concerns were expressed over

said that the economy “does change tack” and perhaps other countries should be considered.

As far as dry docking costs were concerned,

was very cheap – and we built our ships accord-

there was little differentiation as to the location of

ingly – to one in which oil costs $100 per barrel”.

Overall expected cost increases for this year

the yard doing the work or the age of the vessel.

IEA forecasts have also changed from these low

are 3.8%, with at 3.7%, a similar expectation

However, there was a small decrease for dry-

levels to as much as $140 per barrel.

for 2012, Greiner said. Respondents to the

docking for tankers and dry cargo vessels, with

In consequence, Dr Stopford said, from an

strong increases in costs

economic point of view “our society is out of tune

for container ships.

with the current price of oil”, with all that it implies

the orderbook, rising costs of marine fuels and the global economy.

in terms of cost when moving cargo by sea. The

Cost decade

other key issue is burgeoning Chinese imports.

SHIPPING’S next dec-

“We have a very strong trend here which was

ade will be a cost decade

totally unpredicted,” he said and it is becoming

not a revenue decade,

problematic to know where the volume of trade

according to Clarksons’

is going to go next. However, he said “we are

director Martin Stopford.

moving into the 2010s with a scenario which is

While the past decade

During the 2000s, the “only possible strategy

on the water, the empha-

was to get ships on the water”. In the effort to get

sis now was to search

ships, the price was negotiated upwards and for

for solutions to get costs

a panamax topped $90m. Today, he said $27m

down, he told a Moore

was “a bit optimistic” but he added “we are not

Stephens conference on

down to real distress levels yet”.

operating costs.

Richard Greiner, Moore Stephens partner

22

not so different from the last decade”.

was about getting ships

The issue now for ship yards is that they

The emphasis on the

have nearly doubled capacity during the boom

environment, and new

time and “are now getting geared up to compete

environmental regulation

with each other to maintain their capacity during

will mean more costs and

the coming years when probably there won’t be

theBaltic Winter 2011 www.thebaltic.com


People, places, plcs Shipyard

over-capacity

pollution incident involved the duty officer

will mean cheaper ships,

attempting to make a Skype call on his laptop

lower earnings and a

during his watch. A VDR playback revealed that

strategic focus on cost

the officer of the watch was listening to a news

control. Bunker prices

bulletin from his home country, which was being

might now be $500 per

streamed through a laptop computer. The officer

tonne when the ship was

appears to have missed a radar target and a VHF

designed for $50 per

warning call while listening to the breaking news

tonne, and low sulphur

from home.

alternatives might push

This is far from the first time that the clubs

the prices to $900, with

have warned about technological distractions,

IEA forecasts of $1000 to

the follow-on from the ARPA assisted collision,

$1500.

where bridge teams simply fail to look out of

“Cost

management

the window.

will have a much greater

The club says: “On-board communication

urgency than in the past

has improved significantly over the past few

decade.”

years, with technological advances enabling crew to use mobile phones and laptops to stay

IMO measures reduce CO2

Clarksons’ director Martin Stopford

enough ships to fill all the yards”.

in contact with their family and friends who are ashore.

A NEW study commissioned by the IMO on the

“However, the use of such equipment at inap-

impact of mandatory energy efficiency measures

propriate moments may distract crew from the navigation or operation of the ship.

The position of the forward order book is

for shipping shows that they will lead to “signifi-

looking a “bit thin” he said. From 2012 “the order

cant” reductions in greenhouse gas emissions, in

“Another issue is the risk of being exposed to

book falls away fairly sharply and that is going

particular as far as carbon dioxide is concerned.

excessive information and simply being unable

to put a lot of pressure on prices”. According

The study found that by 2020 an average

to process it all. Bridge equipment is increas-

to Dr Stopford, after the credit crisis yards

of 151.5m tonnes of annual CO2 reductions are

ingly sophisticated and it can provide the crew

dropped their prices to “somewhere not far off

expected which the study estimates will increase

with access to extensive information regard-

break-even”.

to an average of 330m tonnes annually by 2030.

ing the relative positions of other ships. But,

There has been a renaissance in the off-

The measures, the report says will mean a sig-

unless it is used in a focused manner, it can

shore oil business and at the moment offshore

nificant reduction in fuel consumption, saving fuel

confuse, rather than clarify, and ultimately prove

represents 30% in value of the order book.

costs in the industry.

counter-productive.”

In terms of future trends, “everybody is feeling

Mandatory measures to reduce emissions were agreed at the IMO’s Marine Environment

Club warns

Substantial over-capacity is one issue, with a

Protection Committee meeting in July this year,

Panama Maritime Chamber has opened up its

lot of yards trying to get capacity under control.

with a new chapter on regulation on energy

membership to international shipowners with

What happens in terms of future investment

efficiency for ships added to the MARPOL con-

vessels registered in Panama – making it

and whether ship yards are closed is a matter for

vention. The rules are expected to come into

the

speculation.

force on January 1,2013. They make the Energy

owners’ Association.

a bit nervous”, he said.

equivalent

of

a

Panamanian

Ship-

The second issue, according to Dr Stopford,

Efficiency Design Index mandatory for new ships

José Digeronimo, chairman of the Panama

is going to be the oil price. “It looks like oil and

and also a Ship Energy Efficiency Management

Maritime Chamber said: “There are over 9,000

energy are going to be much more expensive”.

Plan for all ships.

vessels registered under the Panama flag, and

This is coupled with a fleet of ships which were

The report was prepared for IMO by classifi-

our aim is to involve and help shipowners with

designed for a much lower oil price environment.

cation societies Lloyd’s Register and Det Norske

representation, information, education, network-

Three years is not very long for a massive indus-

Veritas. Among the findings, the report estimates

ing, trade missions and most important, lobbying

try like shipping to get to grips with this. With a

that estimated reductions of CO2 for combined

on their behalf”.

quadrupling of the price of bunker oil “you are

EEDI and SEEMP from the world fleet mean a

Digeronimo added: “I am sure that by joining,

going to change the business”, he said.

fuel cost saving of around $50bn in 2020 and

shipowners will realise added value, as we are

The focus on ships and logistics is going to

$200bn by 2030, if using fuel price increase

the shipowners’ representatives in all the tri-

change over the next 10 years. The IMO is targeting

models taking into account the switch to low

partite meetings being held in Panama in respect

this area, which includes the Energy Efficiency

sulphur fuel in 2020.

of the Maritime Labour Convention.”

Club warns on costly distracting technology

ILO member states, representing over 54 per

taking existing technology, looking very carefully

THE London P&I Club has warned that improve-

parties to the Convention.

at how we want to apply it today and getting the

ments in telecommunications technology on

“Of the 20 ratifications, nine have been

technology right. We have to search for solutions

board ships can create unwelcome distractions,

received in 2011. It is expected that the addi-

to get our costs down.”

leading to casualties.

tional 10 ratifications will occur in the next two

Design Index and emissions. Dr Stopford’s view is “we are being driven back to the basic economics of improvement engineering, which is

He continued: “With the latest ratification, 20

Shipyard over-capacity, energy costs and

In its StopLoss Bulletin, the club notes

the environment are all correlated, he said.

that an alleged causative factor in a recent

theBaltic Winter 2011 www.thebaltic.com

cent of the world gross tonnage of ships, are now

months making it possible for the MLC, 2006 to enter into force in 2012.”

23


Comment – Michael Grey

A maritime key to recovery? I

f you are a certain age, and hail from the United

selling from a manufacturing industry for too

Kingdom, you might well remember the post

long regarded as passé , when compared to the

war export effort, with which it was hoped

fashionable products of the City.

to retrieve this kingdom from the depths of

We could also start getting a bit more

desperate indebtedness that had accompanied

celebratory about the balance of payments and

the cessation of hostilities. Creative minds in

the contribution of invisibles like shipping and

the ministry of propaganda (there was a less

tourism to the national wealth-making machine.

pejorative name for it) who had spent the war

It is not that long ago that the publication of

years dreaming up campaigns to help us win

the “invisibles” figures was seen as a major

by chopping up aluminium saucepans to build

event in the Chamber of Shipping and the

Spitfires and warning us to keep our secrets

Baltic Exchange, with press conferences

to ourselves, now urged every manufacturer to

attended by city scribes who would gasp at

“Export or Die!”I suspect it was more of a threat

the ways in which our ships and shipbrokers

of commercial extinction than being dragged

were generating wealth for the nation, with

away from the lathe to face a firing squad for

TV broadcasts showing the same queue of

concentrating on domestic production, but there

lorries outside the dock gates shown every

was no equivocation.

year, illustrating the staggering sums that were

And it was an immensely successful

being earned for chartering and hauling goods

campaign, as there was an immediate surge in

around the world in British bottoms. There was

overseas exports; quite remarkable considering

always a special paragraph emphasising the

the privations on the home front, which saw

importance of the “Cross Trades”, which always

rationing maintained for many years, and a curb

deserved an explanation for the benefit of those

on domestic consumption. Firms which had

Michael Grey

ill-informed hacks who thought it was some sort of market in international anger.

been effective in selling goods overseas were lauded to the skies in Pathé Newsreels and in

about 10 high and two miles long at Felixstowe,

the newspapers. There was something heroic

waiting to be shipped back to the east.

But would it work today, after a generation when such matters became almost peripheral

and patriotic about exporting, filling up all those

And while we had the same sort of mad

and the UK merchant navy withered away to

crates which would soon be on their way to the

imbalances in the Pacific trades, it was clear that

so very little, and the money the “Red Ensign”

docks to get us out of hock.

the only commodity that Europe was shipping

fleets were earning found its way to bank

So it is interesting to see that there is

to China was money. Now the Chinese have

accounts in Tel Aviv and Copenhagen, Paris and

increasing attention being given to the way in

it all, and they are hard put to spend it, being

Miami, along with all those remittances to Manila

which Europe’s mostly negative trade balance

sensibly reluctant to purchase European debt,

and Mumbai?

might be shifted to reduce the terrible debt

no matter how beguiling the bonds are dressed

burden that spills over from the Eurozone to

up to appear.

It’s not that long ago there was a living to be made in international shipping, and the UK was

all the surrounding countries in the EU. It is

So it is international trade that will get us

the carrier to the world. Is it just fanciful to think

clear that we cannot go on the way we have

out of the fix we are in, just like it did in the

that shipping, which is every bit as important

been, with these great post-Panamax argosies

1940s and 50s. It is a riposte to all those

as the principal conduit of trade, could return

from the east arriving at our ports stuffed with

sandal-wearing vegetarians who want us to buy

to these shores? A huge proportion of all those

consumer durables and all the trappings of a

only home-produced goods and to subsist on

exports that dragged the UK out of the depths

comfortable life, returning to the Orient with

locally grown turnips. It is a powerful spur to

following the last great conflagration were in

thousands of empty containers and those with

manufacturers who, for too long, have dallied

ships, which were earning for this country. Sea

cargo in them filled with shredded plastic and

with the domestic markets, or those across the

trade is every bit as legitimate a way of wealth

waste paper, with the odd box full of Cheddar

Channel, when they should have been learning

creation now as it was then, only today, alas, it

cheese or Scotch whisky. It is not that long ago I

Mandarin and Cantonese, Portuguese (for the

tends to be building wealth for others. “Export

went to see the “Great Wall of China” which was

Brazils, of course) and leaping on aircraft with

or die!” said the urgent posters of the post-war

not the ancient monument stretching thousands

their order books for these distant places.

years. It’s a bit dramatic for the 21st century, but

of miles from Beijing, but a stack of empties

Always supposing they have something worth

the message is clear enough.

24

theBaltic Winter 2011 www.thebaltic.com


Tankers

Torrid times for tankers Frontline, Hoegh and Genmar are just some of the tanker companies feeling the heat as the market meltdown continues

T

anker shipping’s biggest players have

deficit rise almost three-fold in the first nine

this year and the orderbook is now at its lowest

been struggling to restructure their

months of the year although the company’s boss

level in six years.

finances. As Frontline put it, when

Sveinung Stohle remained upbeat on prospects

announcing its third quarter results last

going forward.

“This is encouraging, as continued ordering discipline combined with earlier scrapping of

Last month also saw the announcement

vintage double hull tankers will be required to

that Danish owner Erria’s negotation with Uni-

bring about a recovery in our crude transportation

“Rates are currently at operating cost levels

Tankers looks set to result in a sale of Erria’s nine

markets.”

with no contribution to capital and vessel values

strong fleet of chemical carriers in exchange for

have fallen approximately 25-50%, depending

a 15% stake in Uni-Tankers.

month, “The tanker market has shown a strong negative development in the last two years.

The woes of the tanker market have led some observers to suggest that scrapping

on age, during the last year. If the weak market

Scorpio Tankers announced last month that

is the route to follow. Some analysts predict

continues it is likely to lead to significant financial

it is planning a public offering of 7m shares of

that the larger tankers will not survive past

problems for the whole tanker industry.“

common stock to fund the purchase of two new

their fourth survey because of, among other

In announcing its results, Frontline said

52,000 dwt tankers that form part of negotiations

issues, their un-ecofriendliness in the current

that while it had secured funding for two of

with Hyundai Mipo yard in South Korea. Part of

regulatory environment. However according to

its newbuildings, another five remained to be

the proceeds of the offering, the company says

a report by Bloomberg, analyst Alex Adamou, of

funded and if solutions were not found the

are to be used to repay outstanding debts

VesselsValue, believes that a number of vessels

company could run out of cash early in the new

under the company’s revolving credit facility with

are now more attractive for their scrap value as

year.

Nordea Bank.

asset values fall and freight rates plunge.

None would doubt the commitment of the

In announcing OSG’s results chief executive

company to finding the necessary solution to

Morten Arntzen revealed that: “Our international

its problems although this may result in a

flag tanker markets deteriorated further in the

Cargo contamination

substantial restructuring of the way it and its

third quarter as new deliveries outpaced the

Contamination is one of the major sources of

subsidiaries operate.

market’s ability to absorb them and our Asian

cargo claims in the tanker sector, the UK Club

Problems at Frontline, ratings agency

customers continued to substitute shorter

has warned.

Moody’s was quoted as saying last month might

haul Middle East crudes at the expense of

lead US Stock Exchange Listed Ship Finance

West African crudes. Economic and political

contamination Claims Checklist” which identifies

International to revisit its charter contracts.

The

club

has

prepared

a

“tanker

uncertainty continue to run high across the

the main causes of cargo contamination arising

Meanwhile last month also saw General

globe, with European sovereign debt issues

from both on board and shoreside and compiles

Maritime and its subsidiaries, except those in

and an uncertain fiscal and monetary picture in

the key points to consider in seven sections

Portugal, Russia and Singapore file for relief

Washington impacting consumer and business

running from the pre-loading phase through to

under Chapter 11 of the US Bankruptcy Code

confidence.

discharge and sampling.

and in conjunction with the filing says that it has

“The potential fallout has prompted analysts

Key points to be considered include whether

secured new capital of at least $175m as a result

to trim their global growth and oil demand

different grades of cargo can be arranged

of agreements with key lends, including Nordea

forecasts. This has also resulted in much tighter

to maintain the degree of separation required

Bank on a financial restructuring of the company.

lending markets for the shipping industry. As a

and whether the ship can maintain the required

Gas carrier Hoegh LNG also saw its net

result, new tanker orders have fallen dramatically

cargo carriage and discharge temperatures.

theBaltic Winter 2011 www.thebaltic.com

25


S&P

Making a market Basil M Karatzas offers a ‘seakeeping analysis’ of vessel asset prices

A

lthough the second half of 2008

mental way. The limited transactions that took

blowing wind as possible. Actually, it seems

raised sea-changing developments in

place then were from owners who got taken

that headwinds in some shipping segments

the shipping industry that brought

by surprise by the vertigo of the perfect storm,

and crosswinds in other have caused vessels to

a vertical dive to the very bottom of

and thus most of those transactions were under

keep operating at below break-even levels burn-

distress and usually at rock bottom prices.

ing cash and depleting working capital for about

the abyss for freight rates, within nine months

Almost three years later, the economic recov-

the markets bounced respectably back to

ery has been agonisingly slow, almost like a

approximately break-even freight levels.

a year now, and thus have started pressuring downwards asset prices.

At that stage of the cycle, most companies

slightly leftwards tilted L-shaped graph that

Although 2011 started on a even keel and

and shipowners still had working capital aplenty,

some economists had expected. With new

with full sail dreams in terms of vessel pricing,

and the drop to the bottom had been as swift as

vessel deliveries flooding the market on a daily

the momentum has been deteriorating ever

the ensuing rebound, and thus held out a sliver

basis, a “jobless recovery” depending on mon-

since, even more so since the end of the sum-

of hope for a more fundamental recovery.

etary policies running out of funding in the West

mer. The volume of deals has remained sub-

In addition the “priming” of the world econo-

and a slowing Chinese economy, and a political

dued overall with a “buyers’ strike” in effect for

mies and the generous “quantitative easings”

crisis brewing in the Continent, freight rates have

transactions at prices that are not clearly in deep

was at “full steam ahead” setting, and there were

been hovering low, bouncing along the bottom,

“value-territory” for any type of vessel. “Market

extenuating circumstances in certain market

well below levels sufficient to make payments for

noise” has been on an increasing trend with

segments. For example, in the first half of 2009,

interest and amortisation; and, in certain seg-

“chat” of circulation in the market of candidate

30% of the VLCC world fleet was tied up for

ments, most notably in the crude tanker market,

vessels for “distressed” sales or restructurings.

storage projects on behalf of financiers playing

even below vessel daily operating expenses.

For modern vessels, however, it cannot be

the oil contango game and thus artificially main-

While 2008 saw abrupt changes in the

said with absolute certitude that asset prices are

taining a higher tanker tonnage demand than in

markets, since last year the markets have been

falling in an “expected”, sizeable, quantifiable

actual terms. All these factors meant that vessel

experiencing the doldrums, a complete apnea

manner, since the activity for the sale of such

asset prices didn’t fluctuate as dramatically as

as far away from any prevailing winds, tailwinds,

vessels is as thin as a spider’s web. An obvious

one might have expected, at least in a funda-

tradewinds, westerlies or any type of forward

limitation of any value assessment for very

ASSET CLASS

JAN O1, 2011

JUNE 30, 2011

PROMPT RESALE

10-YR VESSEL

PROMPT RESALE

VLCC

$108.0

$60.0

$105.0

OCT 30, 2011

10-YR VESSEL

PROMPT RESALE

10-YR VESSEL

$58.0

$99.0

$35.0

TANKER SUEZMAX

$69.0

$40.0

$70.0

$40.0

$63.0

$25.0

AFRAMAX

$52.0

$28.0

$52.0

$27.0

$52.0

$23.0

MR TANKER

$36.0

$19.0

$38.0

$19.0

$36.0

$19.0

DRY BULK CAPE

$59.0

$38.0

$55.0

$35.0

$53.0

$28.0

PANAMAX

$36.0

$28.0

$34.0

$26.0

$33.0

$20.0

SUPRAMAX

$31.0

$24.0

$31.0

$22.0

$29.0

$20.0

HANDYSIZE

$28.0

$21.0

$27.0

$19.0

$26.0

$17.0

Table 1: Selective asset prices. Data source: Karatzas Marine Advisors

26

theBaltic Winter 2011 www.thebaltic.com


S&P modern vessels is that such numbers have more

changes in asset prices is performed for both

drop in price translates to a much higher loss

of an “indicative” than “predictive” merit. There

prompt resale and ten-year old vessels for the

in absolute money for more expensive (mod-

have been four transactions for modern VLCCs

first half of 2011, the period between July and

in 2011, with two of them at the beginning of

end of October 2011, and year-to-date until

• Further to this point, modern vessels with

the year under the auspices of the creditors to

the end of the October. The first half of the year

high cost basis present a higher risk for price

a buyer provided with generous financing even

has shown that asset prices have held better

finding as an equitable percentage spread

by pre-Lehman Bros excess liquidity standards,

than the later part of the year; modern vessels,

between “bid” and “ask” can translate to

and two vessels to an industrial buyer six months

especially tankers, held better than older or dry

a much higher aberration from the market

ago. At least there have been four transactions

bulk vessels. MR tankers and supramax and

price, a risk not well bearable by buyers.

in the VLCC market that are deemed enough

handysize vessels seem to outperformed the

• At a time when banks are not cheaply funded

to “make a market”. However, there have been

remaining sectors in terms of least amount of

and have to be conservative with their liquidity,

zero sales whatsoever for resale suezmax

decline, an observation also verified by the over-

usually modern, expensive vessels are more

tankers year-to-date and thus any assessments

all optimism (or better phrased, lesser extent of

difficult to be debt financed; banks prefer

are based in last year’s benchmarks when

pessimism) in those sectors.

smaller loans and cheaper vessels rather

more than $5bn were invested in this particular

ern) vessels than cheaper tonnage.

than concentrating their financing on smaller

However, year-to-date the situation has been

number of sectors or assets.

a bit more sober as it seems that modern

market sector. For smaller or older tanker, dry bulk and

(prompt resale) tanker and dry bulk vessels lost

• Modern tonnage is usually technologically

containership vessels, there has been more

6-10% of their value, while ten-year old vessels

up-to-standards and therefore provides a

activity in the open market and at arm’s length

have dropped in price much more drastically.

lower risk of technological obsolesce and

transactions than modern, expensive tonnage.

Ten-year old VLCCs and suezmax tankers lost

thus better prospects to weather out the

Surprisingly enough, since the end of the sum-

close to 40% of their value since the beginning

cycle and any new regulations that might

mer an increased volume of transactions took

of the year, while equally sized dry bulk vessels

place for the first and second generation of

showed a “better” performance with a loss of

• Finally, modern vessels, even those with a

double-hull tankers, and all such transactions

only about 26%. Overall, MR tankers for both

high cost basis, make much better candi-

took place at levels significantly below ‘last

prompt resale and 10-year old vessels retained

dates for restructuring, equity injections, and

done’. Most of such transactions, in our opinion,

their value, a corollary to the fact that the MR

soft financing than candidates for outright

do not satisfy the definition of Fair Market Value

tanker was the first to take off like a rocket after

sales in the open market; and, of course,

(FMV) since they mostly took place for either tax

Hurricane Katrina and the first to crash down to

“sales” on such bases are far apart from

reasons (leases) or under the strong ‘encourage-

earth, with most of the pain behind the sector, at

the parameters for the definition of the Fair

ment’ of the creditors.

least at tonnage supply and demand dynamics

Market Value (FMV).

Based on market data compiled by Karatzas

appear on the horizon.

are concerned.

Marine Advisors, Table 1 depicts “market

Again, these calculations are based on

Vessel asset prices have fallen more precipi-

expected” asset prices for prompt resale and

observable data and under the assumption

tously for 10-year old vessels than prompt

10-year old vessels in both the tanker and

that such transactions are always open market,

resale tonnage. It’s to be seen whether the

dry bulk markets at three points in 2011: dur-

arm’s length transactions, an assumption that

‘market’correctly discounts a prolonged and

ing the first week of this year, the end of the

has to be questioned in certain circumstances.

anaemic recovery in shipping.

second quarter and the end of October of this

Modern vessels have not been transacted

year. Such data are based on observations

as frequently as older tonnage so far this year. A

Basil M Karatzas is Senior Managing Director with

from

cursory list of explanations may include:

Karatzas Marine Advisors & Co, a maritime advi-

represent arm’s length asset exchanges taken

• They tend to have a higher cost basis and

sory firm based in New York, and specialising in

place under no compulsion either from the buyer’s

therefore their transaction might entail a

shipping finance advisory, restructurings and place-

or seller’s side.

bigger loss of money (equity and debt) in

ments, vessel brokerage and appraisals. E-mail:

absolute terms; an equitable percentage

info@BMKaratzas.comand at +1 713 545 5990.

market

transactions

assumed

to

On Table 2, a basic calculation of percentage

ASSET CLASS

H1 2011 PROMPT RESALE

Q2 2011 10-YR VESSEL

PROMPT RESALE

Y-T-D 2011 10-YR VESSEL

PROMPT RESALE

10-YR VESSEL

TANKER VLCC

-2.78%

-3.33%

-5.71%

-3.33%

-8.33%

-41.67%

SUEZMAX

1.45%

0.00%

-10.00%

0.00%

-8.70%

-37.50%

AFRAMAX

0.00%

-3.57%

0.00%

-3.57%

0.00%

-17.86%

MR TANKER

5.56%

0.00%

-5.26%

0.00%

0.00%

0.00%

CAPE

-6.78%

-7.89%

-3.64%

-7.89%

-10.17%

-26.32%

DRY BULK

PANAMAX

-5.56%

-7.14%

-2.94%

-7.14%

-8.33%

-28.57%

SUPRAMAX

0.00%

-8.33%

-6.45%

-8.33%

-6.45%

-16.67%

HANDYSIZE

-3.57%

-9.52%

-3.70%

-9.52%

-7.14%

-19.05%

Table 2: Percentage changes in asset prices. Data source: Karatzas Marine Advisors

theBaltic Winter 2011 www.thebaltic.com

27


BIMCO

Taking time to make the change Revising BIMCO’S SALEFORM is a hot topic for S&P brokers, as Grant Hunter explains

T

he revision of any standard contract

would certainly benefit from a modest update

misunderstandings and uncertainty. Given the

as internationally used and univer-

to reflect commonly applied amendments and

agreed modest scope to the revision, the team

sally accepted as SALEFORM is not

rider clauses. Of equal importance to those

were able to prepare a “consultation” draft

a matter lightly undertaken. For the

consulted was that the general principles and

in just a few months of beginning the

past year, a drafting team from BIMCO, work-

structure of SALEFORM should be retained.

project. The first draft was reviewed and well-

ing together with brokers from the Norwegian

It is a contract that is very familiar to those in

received by BIMCO’s Documentary Committee

Shipbrokers’ Association, (the original authors

the S&P sector and its provisions are very well

in June 2011.

of the form) have carried out a thorough

tried and tested. The drafting team’s challenge

From the outset, BIMCO felt that an

review of this contract under the watchful gaze

was, therefore, how to make this well-used

essential part of the revision process for such a

of the industry.

international sales contract even better.

universally used contract as SALEFORM should

The process began with market research

Armed with pages of comments and

be to give the end-users of the contract an

among users of the contract worldwide to

suggestions from the initial industry consultation,

opportunity to comment on the updated draft

establish whether an update was needed and,

the drafting team began its work in December

version before it was put forward for publication.

if so, to what extent the form should be revised.

2010. The team identified the key clauses

A series of international open seminars were

From this initial research the feedback was

most commonly amended in SALEFORM

arranged in Asia and Europe during September

very clear – while the present SALEFORM

and identified areas where ambiguity in

and October where buyers, sellers, brokers and

largely met the current needs of the industry, it

the existing version had led occasionally to

lawyers were able to review and comment on the draft revised contract. All the seminars were well attended and provided an excellent forum for discussion of SALEFORM. The feedback received was constructive and positive towards the revised draft. In a series of final meetings during October, the drafting team went through all of the comments received from those who attended the seminars – many of those comments simply affirming the decisions already made by the drafting team in terms of the scope and extent of the revision. Some of the key features of the revised SALEFORM include: • Clause 2 (Deposit) – the lodging of deposits is no longer limited to “joint” accounts – other types of account acceptable to the parties may be used, such as an escrow account held by a broker or lawyer. • Clause 3 (Payment) – the ’93 edition of the agreement required the buyer to pay the purchase price on delivery of the vessel,

Contract end-users had the opportunity to comment on the updated draft version of SALEFORM

28

theBaltic Winter 2011 www.thebaltic.com

but made no provision for the fact that a


BIMCO deposit had already been lodged. The new edition makes it clear that the buyers are to release the deposit and pay the “balance” of the purchase price, as well as any additional sums due (such as cost of bunkers). • Clause 5 (Time and place of delivery and notices) – to assist the parties, the revised agreement contains new notice requirements for the sellers to notify the buyers of the vessel’s itinerary 20, 10, five and three days from intended date of tendering notice of readiness. • Clause 6 (Divers inspection/drydocking) – this Clause has perhaps received the most attention during the revision. The order of the sub-clauses had been changed so that underwater inspection is now the primary option, as this reflects the common practice in the industry. The buyers are to give the sellers sufficient notice of their intention to carry out a divers’ inspection – at least nine days before the vessel’s intended date

The seminars provided an excellent forum for discussion

of delivery. • The Clause 6 now contains a clear

• Clause 7 (Spares, bunkers and other items)

now be faxed or e-mailed to the closing

statement that the sellers cannot tender

– this Clause has been partially re-drafted to

meeting with the original to be sent as soon

notice of readiness before completion of

make a clearer distinction between items on

as possible after delivery. This reflects a

the underwater inspection. This is an issue

hire or owned by third parties and which are

common timing issue with this document in

on which the ‘93 edition is silent and which

not part of the sale, and items that were on

has been the source of uncertainty and

board at the time of inspection that were hired

• A more detailed provision relating to the

occasional dispute.

ship sales.

or belonged to third parties, which are to be

vessel’s Continuous Synopsis Record has

• The allocation of costs and expenses for

replaced by the sellers before delivery takes

been added to Clause 8 as well as a

the underwater inspection and, if required,

place. The distinction is made to ensure that

provision that requires the sellers to provide a

drydocking has been made much clearer

the buyers are not left without items essential

letter stating that the vessel is not, to the best

in the new edition. The basic principle is

to the safe and legal operation of the vessel,

of their knowledge, blacklisted.

that the buyers pay for inspections and

which would prevent the vessel from sailing

drydocking unless any damage or defects

once sold (such as lifeboats and lifejackets).

The final draft of what will be codenamed

are found, in which case the costs and

• Clause 8 (Documentation) – here the

SALEFORM 2012 took priority place on the

Certificate of Transcript of Registry may

agenda for adoption when BIMCO’s 60-strong

expenses pass to the sellers.

Documentary Committee meet in Copenhagen on 10 November. The

industry

consultation

process during the development of SALEFORM 2012 and the huge interest it has generated in this project has spurred the drafting team to get the new edition completed within the space of a year. This is no mean feat when it is considered that the average time taken to revise an existing standard form or develop a new one is around two years. Although we cannot promise to have SALEFORM 2012 “in the shops by Christmas”, BIMCO will be working very hard to have the revised contract, accompanied by detailed explanatory notes, available by January 2012 in electronic format on idea – BIMCO’s online charter BIMCO is aiming to have the revised contract available at the beginning of 2012

theBaltic Winter 2011 www.thebaltic.com

party editing system.

29


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Dry Bulk

Capesize confidence falters PricewaterhouseCoopers report warns of a distorted shipping market

A

ccountant PricewaterhouseCoopers is

Orders of capesize tonnage have remained

Vale and Rio Tinto are two companies that

warning that there are risks of a dis-

high because of confidence in the growth of the

are carrying an increasing amount of iron ore on

torted shipping market, particularly as

Chinese market, the report suggests. However,

their own ships. According to the report, Vale

far as capesize tonnage is concerned

it warns: “The market also faces longer term

already carries 25% of its iron ore and its VLOC

as the industry attempts to tackle the burdens of

demand side problems. Capesize demand is

fleet will increase to 19 in the next two years,

a sizable orderbook and stagnating demand for

dominated by the prospects for Chinese infra-

with a further 16 VLOCs being built for Berge

iron ore deliveries. The dry bulk shipping report

structure spending.”

and Oman Shipping, which will be chartered to

Capes of no hope? suggests there will be a 40%

Infrastructure investment in China has been

the Brazilian giant. Rio Tinto, meanwhile, has

increase in the existing capesize fleet within the

significantly higher in recent years when com-

three VLOCs on order and, the report says:

next three years.

pared with other high-growth Asian economies,

“Since the iron ore producers will ensure high

The report says that while there are 1,200

with the report suggesting a Chinese investment

utilisation of their own vessels first, the effect

capesize ships with a value of $45bn, a further

of 13.5% points more of GDP each year than the

of falling capacity utilisation on the rest of the

450 are on order over the next three years.

average of its closest peers.

market will be magnified.” The report concludes, however that acquisition of large fleets of VLOCs

Although some of these orders may be can-

“During the long economic life of much of this

celled, the accountant warns that any assump-

investment, this can largely be seen a cumulative,

tion that demand for iron ore and coal will

suggesting China has invested twice as much

When the report was produced, Smith

continue its upward trend – with all that implies

during this period as its peers did. At the same

said: “While rates in the capesize sector have

for capesize tonnage – seems over-optimistic.

time, the consumption side of GDP necessarily

improved over the past three months, we see

grew more slowly, meaning the consumption to

this as a temporary respite. Continued over-

investment ratio was even poorer.”

capacity is likely to push rates back towards

According to the report, China has significantly over-invested in recent years “leading to

“is unlikely to be advantageous”.

operating costs, creating significant pressure for

excess capacity across a range of fixed assets.

PricewaterhouseCoopers says that due to

Current levels of investment are so high that

high levels of spending on infrastructure projects,

even the government’s ambitious infrastructure

economic targets can be achieved simply by

While it has been suggested that increases

plans can be met with no additional input growth.”

“maintaining the current level of output of new

in coal imports could provide a glimmer of hope,

owners trading in the spot market.”

PricewaterhouseCoopers

roads, rail, and so on. This implies no growth will

China has a number of initiatives to limit the need

says, other emerging markets are not big

occur in demand for the key raw material inputs

for coal imports. With its own supplies of coal,

enough to replace China in terms of demand.

for these types of investment.”

the government has been investing in railways

In

addition,

“The increasing fleet sizes of the major iron

According to David Smith, assistant direc-

and canals to transport it round the country and

ore miners will exacerbate the effect on the

tor of PricewaterhouseCoopers strategy, the

also developed a high voltage power network to

capesize market” .

expected growth in iron ore demand is unlikely

transmit coal powered electricity.

Although India has been highlighted as a

to materialise and “will be exacerbated by

PwC expects that rates are likely to fall

potential alternative source for iron ore imports,

the vessel building programmes being under-

further in the medium term because of over-

it has its own domestic supplies and the report

taken by the large mining companies. This

tonnaging and “owners should continue exist-

considers that even very rapid growth “would

will decrease the amount of cargo available

ing despite current valuations”. Alternatively, it

have a minor effect, compared to small changes

on the spot market, at a time when the fleet is

suggests, long term charters might be a good

in Chinese demand”.

increasing dramatically”.

strategy despite current rates.

theBaltic Winter 2011 www.thebaltic.com

31


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Offshore

Offshore upbeat Offshore companies remain upbeat on prospects, although there was a warning from the US House of Representatives over Deepwater Horizon

U

S House of Representatives Sub-

marine environmental protection mission has

cannot afford to sit back and take our time in

Committee on Coast Guard and

withered over the past decade as a result of

implementing the lessons learned”.

Maritime Transportation held a meet-

an emphasis on homeland security missions,”

ing last month to review the latest

LoBiondo said.

Dockwise results

investigations into the causes of the Deepwater

He also said he was concerned that officials

Horizon oil spill and the US Coast Guard’s

at all levels were unfamiliar with the National

Heavylift specialist Dockwise posted a net profit

response to it.

Contingency Plan, which covers oil spill

of $8m for the third quarter of the year, compared

According to sub-committee chairman Frank

response. “I am particularly alarmed that senior

to $3m in the second quarter of the year, with

LoBiondo, nearly all reports noted that area

leaders at the Department of Homeland Security

revenues of $113m, up from $109m despite

contingency plans were not adequate for a spill

were either unaware or simply misunderstood

tough market conditions. Operational highlights

of the magnitude of the Deepwater Horizon and

how the plan functions.” He added that units

for the third quarter included contract awards

needed to be updated to include protocols for

like the Deepwater Horizon continue to operate

of $135m, including the Claire Ridge project for

the use of dispersants and other spill response

in US water and will shortly be deployed in

BP, and the start of steel cutting for Dockwise

technology, as well as the latest information on

Cuban waters. “Each of these operations, if not

Vanguard, which already has the FOSO Goliat

environmentally sensitive areas.

properly regulated by the Coast Guard with the

booked as cargo, which the company says at

“I am also concerned with findings indicating

support of the department, could potentially

60,000 tonnes is a transport record.

that the Coast Guard’s oil spill response and

cause another catastrophic spill. As such we

According to chief executive Andre Goedeé: “Tendering activity continues to be strong, and in a period which has seen several successes, security the transport of the FPSO Goliat on the Vanguard is an outstanding achievement. Dockwise will be proud to break its own record for the world’s heaviest single cargo, and the award is the best endorsement of our decision to proceed with our new vessel”. According to the company revenues in the heavy marine transport segment for 12% lower in the third quarter than in the second, with static demand from the military and port and marine industry. The company said it expected to see “subdued revenues in the conventional heavy marine transport market persisting into 2012. Measures taken to mitigate the impact of market conditions include changes to contractual terms with clients, an adjustment to the payment schedule on the Vanguard and the sale of Dockwise subsidiary Dockwise Yacht Transport to Coby Enterprises Corp. According

to

Goedee,

Dockwise

is

now focused on the oil and gas industry and its core business of heavy marine transport, transport and installation, and also logistical management.

Sub-committee chairman Frank LoBiondo

theBaltic Winter 2011 www.thebaltic.com

33


Offshore Bourbon upbeat

Farstad finances

The Jack and St Malo fields are located within

Although some owners may be feeling the pain

Offshore services operator Farstad posted

25 miles (40km) of each other approximately 280

of rising oil prices, Bourbon was upbeat about

operating income of NIOK970.2m for the third

miles (450km) south of New Orleans, Louisiana,

prospects in the fourth quarter. As Bourbon

quarter against NOK867.9m for the same period

in water depths of 7,000 feet (2,100m). The

chief executive Christian Lefevre put it: “In a

last year.

project will comprise three subsea centres tied

favourable oil and gas environment, the price

It said in is quarterly report that while the

back to a hub production facility with a capacity

per barrel of Brent – $113 over the quarter

financial and political situation in Europe has

of 170,000 barrels of oil and 42.5 million cubic

– remains at a high level and the North Sea

not resulted in uncertainty over oil prices, “the

feet of natural gas per day.

activity stated to recover before the steady

uncertainty is first and foremost related to idle

“Winning this major power umbilical contract

upturn in rates for offshore vessels worldwide.

tonnage and the newbuild activity, especially for

for the Jack and St Malo fields is an important

Prospects for increasing utilisation rates and

the markets in Asia. The rate level and the utility

development for Nexans since Chevron is one

daily rates are set fair for the fourth quarter in

rate for supply vessels in Asia have been at low

of the leading leaseholders in the Deepwater

deep and shallow water offshore”.

levels the whole year as a consequence of the

Gulf of Mexico, which is a region where we are

overcapacity of tonnage.

establishing a significant reputation as a key

Revenues were up 17% in the first nine

supplier of subsea technology,” says Ragnvald

months of the year compared to the same

In Brazil, the rate level has improved through

period last year, which the company attributes

2011, while the spot market in the North Sea

to good performance in the shallow water

has performed well during the quarter. A general

“This contract award is also a vital step

offshore segment and the crewboat segment.

recovery in the market is not likely to happen

forward in our strategic approach to this region

Bourbon took delivery of 15 new vessels during

before further into 2012 as a consequence of

with the introduction of the new long-term

the third quarter.

the large number of newbuilds that are still to be

storage carousel that now improves the level of

delivered and seasonal variations.

local logistical support we can provide.“

As far as the outlook is concerned, Bourbon

Graff, sales and marketing director of Nexans.

anticipates increase demand for offshore service vessels in the future.

Cable contract

Going for offshore growth

and their four year prospects have been scaled

Nexans, a worldwide leading expert in the

Global shipbuilding should be seeking growth

up. The outlook for a greater number of active

cable industry, has been awarded a contract

opportunities

drilling rigs and offshore construction companies’

by Chevron USA to design, manufacture and

according to Oh Kong-gyun, chairman and chief

strong order books confirms the sharp rebound

supply a total of 138,000 feet (42km) of power

executive of the Korean Register.

expected on the market,” it said.

umbilicals and terminations for the Jack and

Speaking at the 4th Seoul International

The market is expecting an improvement

St Malo fields in the Deepwater Gulf of Mexico.

Shipbuilding and Maritime Conference (SIMS) in

in the rates of offshore vessels and a continuing

The umbilicals will be loaded out from the

Korea, Oh explained that while the world fleet is

improvement

the

new long-term storage carousel in Mobile,

continuing to grow, the number of new orders

fourth quarter of 2011 and in 2012,” the

Alabama dedicated to providing enhanced

decreased within the period 2006-2009.

company added.

logistical support for customers in the Gulf of

“Significant investment by oil and gas clients

in

daily

rates

during

Mexico region.

from

the

offshore

industry,

“It can be assumed,” he said, “that over the coming 10 years, the yearly average newbuilding order book will be less than that of the past 10 years. The demand for containers, tankers and LNG carriers will decrease, while the construction of offshore platforms will show strength in the market place owing to a high demand for energy, increased investment in the exploitation of oil and gas and higher oil prices. The increased demand for deep-sea crude oil and natural gas will also lead to heightened newbuilding activities for deep-sea oil platforms. The operational areas for these platforms will be mainly in Africa and the Gulf of Mexico” Oh-Yoon Kwon general manager, of Korean Shipbuilders’ Association added that the markets were still uncertain, Korean shipbuilders had experienced a recovery in new orders during the first half of 2011. To assist with securing further new business, the yards were concentrating

on

innovation

and

maintaining top quality management. Oh Kong-gyun, chairman and chief executive of the Korean Register

34

theBaltic Winter 2011 www.thebaltic.com


Towage and salvage

New president at ISU Todd Busch steps down to make way for Andreas Tsavliris. Plus: ETVs, specialised tugs and silver-bearing wrecks

A

ndreas Tsavliris, a principal of Tsavliris

firm supporter of Lloyd’s Open Form, which has

cost-effective insurance policy for the British

Salvage Group, was appointed as

recently been revised.

taxpayer. It would take just one major accident

president of the International Salvage

Tsavliris was awarded the first LOF 2011

and any savings that had been made by the

Union at the ISU recent meeting in

contract to salve the bulker Magnum Power,

decision to cease the contract would be wiped

Cartagena at the end of September, replacing

which ran aground in the Magdalena River in

out in a stroke. We urge the government to

Todd Busch who remains on the ISU committee.

Columbia.

reverse its decision to terminate the provision of ETVs through the MCA. “

Leendert Muller, chief executive of Dutch

The committee further suggested that use

salvage company Multraship was elected as vice

ETV response

of commercial tugs would not be a

Commenting on his time in office, Busch

Two of the emergency towing vessels due to

alternative

said that “it has been a great honour to be

be phased out as part of the UK government’s

“Unless the government can provide a

the president of the ISU and to represent out

spending cuts have received a stay of

persuasive case that such capacity exists in

members as we have tackled many important

execution pending government consideration

appropriate form and at appropriate locations,

issues. I have greatly enjoyed my presidency and

of alternatives.

it should recognise that the solution it has

president to replace Mr Tsavliris.

look forward to continuing to work for the benefit

There has been considerable industry

suitable

proposed is unviable and potentially reckless.”

concern about the phasing out of ETVs, which

Concerns have also been raised about the

“I am delighted to be handling over to Andreas

have been kept on station round the UK coast

decision to axe the Maritime Incident Response

Tsavliris, who has vast experience of salvage and

to respond in cases where a salvage tug is

Group (MIRG), which has been used in fighting

has demonstrated great commitment to the ISU

needed urgently.

fires at sea. Many maritime commentators

of all marine salvors.

and to the salvage industry”.

The Parliamentary Transport Committee

consider that the demise of MIRG is more serious than that of ETVs.

Tsavliris, for his part, said: “It is a great honour

warned that the decision to stop the Martitime

and I am proud to have been elected president

and Coastguard Agencies provision of ETVs was

Viscount Younger of Leckie was one

of the International Salvage Union. I am grateful

made against the findings of an independent risk

member of the House of Lords calling for an

to the members for entrusting this prestigious

assessment and is “unwise and shortsighted”.

effective replacement for ETVs. The government

the

argument has been that it is not only cost saving,

committed member of ISU for many years and I

recommendation of the late Lord Donaldson

but the fact that ETVs must be able to respond

will undertake to uphold its ideals and will always

following the Braer oil spill and the committee

immediately and therefore cannot be used for

try my hardest in the best interests of the ISU”.

said it was not convinced that anything

had

any other purpose. He has been quoted as

The Tsavliris group’s origins go back to the

changed since Lord Donaldson’s report to lead

saying the decision means a return to the pre-

1920s and Andreas Tsavliris joined the company

to the conclusion that ETVs were no longer

Donaldson state of affairs.

in 1970. The company is one of the few salvors

needed.

position to me. As a company, we have been a

to keep tugs on station and has long been a

The

ETVs

were

introduced

on

The government has given an interim stay

“ETVs represent a prudent and seemingly

of execution for the Scottish ETVs pending

theBaltic Winter 2011 www.thebaltic.com

35


Towage and salvage finding a long-term replacement. A Scottish office report is expected by the end of the year on an alternative solution to the problem.

Pulling power Multraship has added to its fleet of specialised tugs and multi-purpose vessels in recent months with the addition of the Damen newbuilding ASD 3213 tug Multratug 3. The tug will be employed principally in the River Scheldt in a harbour towage and salvage role. With a maximum bollard pull of 94.7 tonnes, an overall length of 32.14 m, and a beam of 13.29 m, the vessel is capable of a speed of 14.3 knots. Multraship

managing

director

Leendert

Muller

commented: “Multraship’s commitment to the Scheldt area is well-known and was further reinforced two years ago when it launched Antwerp Towage NV, a 50/50 joint venture with Fairplay Towage. “Antwerp Towage has been a great success, and we have increased our client base and number of calls in Antwerp significantly. Multratug 3 represents the latest phase in our overall strategic plans for renewal and expansion. We believe that it is now the strongest tug on the Scheldt and, with its FiFi1 capabilities, it is set to play an important role in future emergency response operations in the area.”

Silver find Odyssey Marine Exploration found its second silver-bearing wreck – that of the SS Mantola which was torpedoed during the First World War. The ship was found about 100 miles from another wreck – that of the Gairsoppa, which was also carrying a cargo of silver. A war risk insurance claim for £110,000 (at 1917 values) was paid out for the silver on the vessel in the year that she sank. Odyssey has been awarded a salvage contract by the UK Department for Transport, under which the company will retain 80% of the net salved silver value recovered. “The incremental costs to search for the Mantola were low as this was a contingency project in the event that our team successfully completed the Gairsoppa search early,” said Mark Gordon, Odyssey president and chief operating officer. “We are planning to conduct the recovery expedition in conjunction with the Gairsoppa recovery, which will also make the operation very cost efficient. Securing our ownership rights prior to recovery and funding our business from cash-flow produced from operations has been a key focus for us. Our share of this successful recovery in 2012 will contribute significantly to our operational funding.” “The Mantola project is located at a depth range that we have a lot of experience in. We have information on the location of the cargo that should make this a great target for testing some new technology, which will be useful for a number of new deep-ocean projects we have planned,” said Greg Stemm, Odyssey’s chief executive. “As we push deeper and deeper, a lot

of new and

interesting opportunities are presenting themselves.” The salvage expedition for the Gairsoppa and Mantola will begin in spring 2012, as soon as the weather window begins to open up in the North Atlantic.

36


Shipmanagement, crewing and employment

Food for thought Ensuring seafarers have healthy food to eat and cooks are properly trained is an important consideration for seafarers. Plus: training senior staff, armed guards, insurance and enclosed spaces

G

ood training for ships’ cooks is

Manpower

for the centre which is dependent on the

essential if crew members are to

According to Douglas Lang, managing director

shipping industry.

stay healthy and that is the drive

of Anglo-Eastern (UK), commenting on the ICS/

According to Lang, he finds people looking

behind the Sea Chefs project, which

ISF manpower study for 2010, “the situation in

at a career at sea to be better informed than

was launched two years ago, a pilot scheme

2010 was one of approximate balance between

ever before. “They know they will get a sound

that has input from Germany, Cyprus, Latvia

supply and demand”, although shortages were

education and they will be in demand at sea

and the UK.

more acute for certain types of vessels and

and ashore. It is not like coming out of university

As Ralf Becker-Heins, managing director of

senior officer demand has “grown apace, despite

burdened with debt. The sell is not that hard.”

MSG Marine Serve, a private maritime training

the financial crisis”. He said it was essential to

provider based in Hamburg put it, ships’ cooks

double the effort on training in the past five years

are in an exposed position, subject to the

“if we are to see a healthy industry in the future”.

“economic arm of the owner” and also being

Brian Ingpen, who heads Lawhill Maritime

Piracy has been very much on the agenda for

Centre in South Africa – which started life

InterManager and the ship managers’ trade

Professor Becker-Heins told the International

working out of empty containers provided by

association declared itself to be delighted

Chamber of Shipping conference in September

Teekay – told delegates there was a need to

to hear the UK government’s recent public

that it was “amazing that there have been so

interest thousands of young people in order

condemnation of piracy.

few poisoning cases. Shipowners should ensure

to get one master or one chief engineer. “The

Alastair Evitt, President of InterManager, said

that those engaged as cooks are trained and

starting place to promoting the industry is

that it was a quantum leap in public perception to

are competent”.

encouraging vibrant young people,” he said.

hear the issue of piracy and merchant shipping

responsible for crew health.

Armed intervention

Key issues include knowing what certificates

Lawhill Maritime Centre opened in Simons

an owner or manager needs to see and whether

Town in March with Safmarine as a major

the flag state has defined the requirements for

sponsor. The school, Ingpen said, is looking

InterManager has campaigned for the

cooks, he says. Good nutrition is vital for future

for something different. “It is about giving your

freedom of owners and managers to choose

health and some diseases might not appear

people in South Africa an opportunity”. With

to deploy armed guards on-board ships they

for several years, Professor Becker-Heins

unemployment figures running at up to 40%,

manage. “The UK government’s recognition of

told delegates.

the school has been attracting a broad range

the value of armed guards and the right of the

There are no common standards for training

of young people. “Some youngsters haven’t

owner and manager to deploy them, in the right

and certification of seagoing chefs, he said. The

seen the sea. They haven’t got the background

circumstances and in accordance with BMP4,

Sea Chefs project was launched two years ago

and the knowledge”. After three years of study,

is a great lead by the UK government and it is

and focuses on a fast-track system for training

the students will have a broad background

InterManager’s firm belief that this stance should

ships’ cooks. It is only a pilot scheme and “needs

in the maritime industry, including the basic

be adopted by all flags and charterers that still

to be followed up by an experienced training

elements of maritime law and insurance, but

do not openly support it. “

provider,” he said. There is a shortage of ships’

also maritime economics, nautical sciences and

InterManager says it is not calling for every

cooks and, in many countries, he explained

coastal navigation, so they get exposure to a

vessel to have armed guards on-board, “rather

“cook training is not an issue and offered only

wide range of sectors.

that when a detailed risk assessment deems

addressed by the UK Prime Minister David Cameron so openly and frankly.

sporadically”. Even STCW is “missing content

The majority of students end up in either

this the preferred option, then individual flag

on ships cooks”, Professor Becker-Heins added,

shoreside shipping jobs or at sea. The aim is

state legislation or charterparty clauses should

and it is only with the advent of the Maritime

to put the cadets on ships as soon as possible,

not obstruct owners and/or managers in taking

Labour Convention that “all flag states will have

he says. Safmarine has helped with containership

this decision.

to take action”.

training voyages. There is no state funding

“InterManager further supports on-going

theBaltic Winter 2011 www.thebaltic.com

37


Shipmanagement, crewing and employment initiatives to licence the companies providing

and returned home, the shipmanager received

defence had reached $659,000 by this stage.

armed

qualification,

an anonymous fax from the vessel, advising

According to the club, in 2011 the owner made

competence and experience), to define the rules

that it had actually hit a wreck. When the vessel

an offer to settle the claim on a “drop hands”

of engagement in the event of a pirate attack

reached its final destination it was drydocked,

basis, with each side bearing its own costs.

and to control the type and flow of weapons

and damage was noted. Under the terms of

Although the shipmanager felt that it had

deployed both on-board and while in transit to

the management agreement, the shipmanager

been presented with an extremely weak case,

and from vessels.

was a co-assured under the hull policy, but the

it was not possible to completely rule out the

owner started arbitration proceedings against

possibility of adverse findings. Accordingly, the

it, claiming that substantial additional costs

offer was accepted.

guards

(based

on

Bad vibrations

had been incurred. The claim was based on an

ITIC says: “This case shows how important it

International Transport Intermediaries Club has

allegation that the shipmanager was vicariously

is to use the right contract and to have insurance

warned that shipmanagers need to use the right

liable for the actions of the master.

and knowledgeable assistance to cover the

contracts and have appropriate insurance in

The defence of the shipmanager was that,

legal costs and support and time needed

place to cover the legal costs of defending even

under the terms of the management agreement,

to defend even weak claims. The defence

weak claims.

it had no liability for the negligence of the crew.

of a shipmanager is always expensive and

Rather, the manager’s sole obligation was to

very time-consuming.”

In its Claims Review, ITIC relates the case of a shipmanager which took on the management

provide an appropriately qualified crew.

of a vessel. One of its duties under the BIMCO

In 2009, the owner served an revised claim,

Shipman 98 management agreement was to

focused on the shipmanager’s application of the

Enclosed spaces

provide crew for and on behalf of the owners.

ISM code and the role of the designated person

While many warnings have been issued about

In 2004, while the vessel was heading towards

ashore. A further allegation was made that the

the dangers of entering enclosed spaces, and

Shanghai, the master reported that it had

bridge team, or at least the principle members

in some cases masters have been brought to

experienced “excessive vibration” after passing

of it, were suffering from fatigue at the time of

trial on manslaughter charges, fatal accidents

close to a buoy marking a wreck.

the incident and that the shipmanager should

continue to occur.

After the master had left the ship at Shanghai

have been aware of this. Costs of preparing the

Videotel

Marine

International

has

joined forces with Mines Rescue Marine to launch a training series entitled “Entry into Enclosed Spaces”. “There is no excuse for the unacceptable casualties we have seen recently,” Stephen Bond, deputy chairman of Videotel said at the launch. “Again and again, we hear of seafarers coming to grief in enclosed spaces. These incidents could have been avoided by an understanding of the dangers of entering enclosed spaces and the critical importance of following proper procedures. We are convinced that the “Entry into Enclosed Spaces” Training Series will help save lives. “We are delighted to have been able to work with Mines Rescue Marine to create this programme. For over 100 years, its Mines Rescue Service has developed its specialist skills, experience and knowledge gained from working in a difficult and potentially dangerous environment to effect the rescue and escape of mineworkers from underground. This experience has proven invaluable in helping to construct the training programme, ensuring it is both realistic and practical.” With

comprehensive

written

material,

including case studies and student exercises, the package consists of six programmes covering awareness;

preparation

and

procedures;

equipment; enclosed spaces entry; emergency procedures and rescue; and the correct use of breathing apparatus. It is available in a range of formats: interactive CD-ROM, through Videotel on Demand (VOD) and VHS/DVD with A healthy diet is essential for seafaring staff

38

theBaltic Winter 2011 www.thebaltic.com

supporting booklets.


FFA

Baltic moves to simplify wet freight trading Jeremy Harris recently became chairman of the Baltic Exchange’s Freight Market Information Users’ Group’s (FMIUG) ‘wet’ section and talks about developments for tanker derivative traders

I

ncreasing liquidity and encouraging new market participants to enter the Forward Freight Agreement (FFA) market are two objectives for Jeremy Harris, new chairman of the ‘wet’

FMIUG. These objectives moved a step forward last month when tanker freight derivative traders, meeting at the FMIUG, agreed that from the New Year all tanker FFA contracts which are traded in Worldscale would be converted to a dollar per metric tonne price ($/MT) when presented to the clearing houses. This standardisation measure will help to improve clarity about how FFA trading works and is designed to encourage new participants to join. The FMIUG annual meeting on November 17 met to discuss a number of issues but the critical one, Harris says, “was how we are going to trade in 2012, and whether the market is going to trade Worldscale or dollars per metric tonne”. At the same meeting last year, it was agreed that for future calendars where the Worldscale flat rate had not been published by the Worldscale Association, all trades would occur in $/MT. This decision was taken to get around the fact that nobody knew what the Worldscale flat rate would be and therefore had an exposure on what they would be settling against. The Worldscale Association takes into account issues like bunker prices and exchange rates and other costs when setting the flat rate. “As an example, if you trade Cal 12 today at 46 Worldscale points for TD3 AG/Japan VLCC you

Jeremy Harris

theBaltic Winter 2011 www.thebaltic.com

39


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FFA don’t actually know what flat rate that is and

$/MT, Harris explains, so as to cater for those

increment of 0.1 of a Worldscale point to reflect

what freight rate that is. On the other hand if the

that do not understand or want to trade in

the expected increase in Worldscale flat rates

trade was made in $/MT for Cal 12, the freight

Worldscale because they are not players in the

next year. Future years will be traded in $/MT.

rate would be clear,” he says.

physical tanker shipping market.

For the prompt year there will be a separate screen displaying prices in $/MT but they will not

This fixed approach offers a lot more certainty.

The expectation is that this might attract

“Risk managers are much happier with that than

financial institutions outside those who already

having something that was unknown,” Harris

participate in the physical market. The hope is

The Baltic Exchange will continue to publish

says, “so last year a decision was made that all

that providing the $/MT option will make it easier

forward curves in dollars per metric tonne and

future year contracts would be traded in dollars

for new entrants. “We need to wait and see. We

Worldscale going forward, even for the prompt

per metric tonne to remove that uncertainty of

want to make the market as liquid as possible.”

year, Harris says.

be executable.

Harris is working closely with the Baltic

The meeting also considered a new tanker

“This year we have been trading Cal 12 in

Exchange’s new business development group

route for 2012 and reviewed routes implemented

dollars per metric tonne and anything in 2011

to publicise the tanker FFA market, and the

this year including TC12 (India to Japan) and

on a Worldscale basis because in 2011 we know

group will be approaching new entrants and

on this route it was considered it was too early

the flat rate as published by the Worldscale

encouraging them to trade tanker FFAs. He

to comment although liquidity has not been as

Association in December last year.”

is one of a number of people potential new

good as people hoped. The Baltic will continue

Coming to the end of this year, the point

entrants can turn to in order to find out how the

to monitor it. The second route is TD19 which

has been reached where next year all the open

market works. “One of the feelings in the market

was introduced to replace TD11 which had

interest swaps will be in $/MT. A decision needed

was that the dollar per metric tonne is an easier

been hit by sanctions on Syria. The feedback

to be made as to whether to continue with $/MT

unit to understand than Worldscale.”

from the group was that TD19 was a “more

the unknown flat rate.

representative route to be marketing,” according

because of the open interest swap position

It was clear from November’s meeting that

or alternatively revert to Worldscale because

contact needed to be maintained with the

that is what the “physical” shipping world

physical world, because the swaps are settled

The new route is TC22 which is a backhaul

operates in. “We obviously need to maintain the

against physical fixtures. “It was felt that we

route for TC2 which links Europe to the US

communication to the physical world in order to

needed to continue to talk in Worldscale and

North Atlantic coast. The Baltic will go through

maintain interest in the FFA market.”

dollars per metric tonne in the prompt year and

the process of assessing the new route from the

A few years back there was a situation

there were quite a number of issues raised in the

point of view of load and discharge points with

where on certain routes traded in the swaps

meeting about how that would practically work

the aim of start publishing the route, between

market, the Worldscale Association needed to

in the market place.”

three to six months if the route is considered

to Harris.

viable.

adjust the flat rate mid-year. People with open

A sub group was convened to work with

interest positions on those routes, assuming a

broking houses and trading houses and

Harris says that he has found his role as

certain flat rate, saw those open interest swaps

Trayport, who handles the software side of some

chairman very interesting and enjoyable so far,

values change. Harris explains that this created

of the screens being used by traders. Harris

and welcomes views from all sides on how to

a number of problems, not least from the risk

chairs the sub group. The issue came down to

make the FFA market work as effectively as

management perspective. “It is exactly that

how to present Worldscale and $/MT on a single

possible. “The Baltic Exchange is the institution

situation that moving to dollars per metric tonne

screen and to avoid ambiguity or confusion as

that calculates the numbers that the FFAs settle

would get rid of.”

to which trading method was being used. The

against and we must have a system that works

The critical decision taken last month was

group decided that for the prompt year trades

well. Our door is always open.”

that even if trading in Worldscale points, the

would still be in Worldscale with a minimum

contract would be sent to the clearing house in $/MT. “This means that if the Worldscale Association do adjust any of the flat rates, it would have no impact on contracts that are already in place, so everybody is comfortable with the risk, they know what they are going to settle against and they can mark to market appropriately.” It is well understood how the conversion is handled and those present at the meeting accepted it, he says. A discussion took place at the meeting as to how individuals wished to trade – whether Worldscale or $/MT – for prompt business. Harris says that views depending on the institution from which the trader came. Most of those who were active in the physical market on a day to day basis prefer Worldscale, “but we are hoping to attract some more non-traditional participants into the market who may find it more interesting to trade dollars per metric tonne.” Aside from the risk angle, this is a main driver for moving to

theBaltic Winter 2011 www.thebaltic.com

41


The single answer

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IHM & Ship Recycling Plan

Yard Assessment & HSETraining

With years of experience in the recycling industry we have a reliable network of brokers and vast legal knowledge to ensure quick action and prevent unwanted surprises.

Be prepared for the future by knowing what you’re dealing with in your own fleet. A full Inventory of Hazardous Materials will be required in the near future as will the Ship Recycling Plan.

For new yards looking to become a top player in the ship recycling industry we can assess the facilities, recommend upgrades and train workers and staff to raise safety awareness and working efficiency and safety.

About Sea2Cradle The industry’s first professional ship recycling team now has a new name. As Sea2Cradle we are more flexible, more focussed and overall better prepared to meet your needs concerning the disposal of old tonnage. With new regulations just around the corner there is no better time to prepare your fleet with an up-to-date Inventory of Hazardous Materials. Feel free to contact us for any questions or to make an appointment. address: Scheepmakershaven 59 3011 VD Rotterdam the Netherlands

telephone: +31 (0) 6 5367 7232 e-mail: blankestijn@sea2cradle.com


Green shipping

Going green Interferry’s recent conference in Barcelona was just one where regulation and the challenges it presents was at the top of the agenda

A

s the shipping industry faces an ever-

Interferry conference, Jesus Bonet Company,

snowball effect resulting in a vicious cycle of

increasing tide of regulation on the

head of maritime safety and environment at the

fewer services, lower frequency, less capacity and

environment, there are some serious

European Commission, denied that the EU was

greater cost.”

doubts about the cost of introducing

intent on deviating from IMO environmental tar-

Guinier also raised concerns over the future

the new low sulphur requirements in emission

gets. Commenting on the move to 0.1% fuel sul-

availability of distillate fuels and use of scrubbers

control areas.

phur content in Emission Control Areas (ECAs) by

he suggested might affect the stability of some

Introduction of emission control areas in the

2015, he declared: “We support the IMO because

ship types. For those ships converting to LNG,

Baltic and North Sea and North America and the

they are right – sulphur gas is bad for citizens’

there remains the issue of bunkering facilities and

Caribbean are a source of considerable concern

health. We know this is going to be a challenge

safety concerns have been raised over the place-

to shipowners, operators and governments who

for the sector but there are ways.”

ment of LNG tanks on vessels.

As far as greenhouse gases were concerned,

Deltamarin concept design manager Esa

The situation was outlined in a submission to

he told delegates: “It’s not the regulator’s job to

Jokioinen reported on work to find a ferry-friendly

the UK government by Maritime UK earlier this

substitute the judgement of scientists. Our White

EEDI formula within two years of it becoming

year, when the industry body warned that while, it

Paper on transport aims to cut shipping emis-

mandatory for other vessels in January 2013.

supported the overall provisions of Marpol Annex

sions by 40% by 2050 because the evidence

Studies for the European Maritime Safety Agency

VI “these are presenting severe short-term chal-

says CO2 is ruining the planet and will have a

(EMSA) had shown that the current formula pro-

lenges for the ferry and cruise sectors”. Maritime

disastrous effect on our children.” Likewise the

duced up to 300% scatter in ferry index values

UK described the economic impact as “massive”,

Energy Efficiency Design Index (EEDI) – although

depending on their speed and capacity.

with potential bunker cost increases of 87% for

not yet adopted for ferries – was “a great step

ships operating in ECAs. “This will mean, from

ahead”.

are preparing to implement the proposals.

“The EEDI represents a power limit that is, in effect, a speed limit,” he explained. “It might be

2015, up to £3.6bn additional annual cost for

He acknowleged progress was slow on the

okay for some ships to reduce engine power and

shipping within 200 miles of the UK,” it told the

many proposals for controlling emissions through

slow down, but how would this work for ferries

Transport Select Committee in a submission.

Market Based Measures (MBM) but said an

taking into account schedules, redundancy and

According to the submission, a German study

impact assessment would be finalised in the

safety margins?” Ferries needed a formula that

pointed to ferries in the Baltic States losing

second quarter of 2012. “This is not about draw-

recognised their speed dependency and defined

40% of their traffic with nearly 1m containers

ing money from the sector,” he stressed. “We

capacity on measures like deadweight tonnage

and 600,000 trailers moving from sea to land

are trying to use the market as an optimiser of

and lane metres rather than the “possibly mis-

transport. Lost port revenues and tourism for the

the system and strongly support a global solu-

leading” gross tonnage calculation.

cruise industry, and closures of longer routes and

tion. But we have said many times that, if this

Commenting on the challenges ahead, he

price increases for the ferry industry were also on

is not achieved, we will come up with a way to

said that varying design speed of ro-pax ships is

the cards, warned Maritime UK.

meet our targets that can be integrated with and

the main reason for big scatter of index values.

strengthen the international process.”

Capacity of the ro-pax vessel is difficult to meas-

The issue was evidently high on the agenda at trade association Interferry’s recent conference

Alfons Guinier, secretary general of the

ure and using gross tonnage may be misleading

in Barcelona. Interferry CEO Len Roueche noted:

European Community Shipowners’ Associations

for many of the vessels. Additionally, there are

“Very little is in black or white when searching for

(ECSA), insisted that a regional approach to

challenges with reserve power, hotel load calcula-

relief from the ferry sector’s mounting economic

MBM must be avoided, warning: “Shipping may

tion, he told delegates, but they should be easier

and political pressures. Fuel costs are frighten-

become the milk cow for funding. The fair way is a

to clarify if the two main points are solved.

ing and regulations to slash shipping emissions,

compensation-based levy but it has to be a global

although well-intentioned, are potentially cata-

solution that can be applied to all flags.”

A session on dealing with sulphur revealed issues over the maturity of marine scrubber tech-

strophic in both commercial and environmental

On sulphur content restrictions in European

nology. The size and weight of equipment was a

terms. Assessing the complex array of operation-

ECAs, he said that no impact assessment had

major concern among delegates, while one fleet

al and technical options often raises more ques-

been carried out on the threat of a modal shift

director complained that trial installations of sea-

tions than answers on the best way forward.”

from sea to road. “This could be anything up

water scrubbers had shown failings in reliability,

EU regulation, or indeed any regulation, con-

to 50% depending on the type of goods,” he

compliance and corrosion.

tinues to be of concern to the industry. At the

warned, “but even at 10-20% there will be a

The latest systems were outlined by two

theBaltic Winter 2011 www.thebaltic.com

43


®

Among the greatest challenges imposed by the BWM Convention and the requirement to fit type approved BWT systems are finding space and power, and managing the installation onto existing ships. A BWT system must be selected that is well suited to the particular vessel, whether it is a retrofit or a newbuilding. Because of the significant investment involved, an established technology supplier with proven operational reliability, IMO type approval and possibly other approvals from the flag state or port states should be chosen. The system must be compatible with the planned or existing ballast system and ballast pumps. Particularly in the case of retrofit, the system should be designed for adaptability with modular components for installation flexibility and preferably suitable for transport onto the ship and to the installation space through existing accesses. The owner/ operator and supplier need to work closely with the installers and class. Many installation challenges must be met, particularly on existing vessel retrofits, including: Capacity and discharge pressure of existing pump • How does the vessel normally conduct ballasting operations (number and capacity of treatment systems needed)? • Are there ballast stripping pumps or eductors used? • Available power for treatment system • Available space for equipment • What will be the optimal BW piping arrangement? • Access to get the BWTS into the machinery space • Is a dry-docking needed to install? • Integration of the BWTS into the ballast control system • If chemicals are required, consider tanks, neutralization process and monitoring • Special considerations for installation in hazardous areas • Total purchase and installation cost of the BWM solution •

The space available on an existing ship is almost always extremely limited. Equipment that is modular in design allows greater flexibility to fit components into the existing machinery space and creates an opportunity for the system to be installed during normal operation of the vessel. A truly modular configuration may also allow the components to be carried into the vessel through existing access hatches and assembled in place, minimizing total installation cost. Hyde Marine, Inc.

The retrofit process will normally require a ship check to determine the most suitable location for the system components and to develop the necessary engineering information and drawings to meet the owner and class requirements. An evaluation of the degree of automation and the control system modifications required to integrate the BWT system controls into the ship’s ballast control system should be made, together with material estimates for pipe runs, foundations and cabling. An experienced supplier will be helpful with the vessel inspection and data collection. Complex retrofit projects will benefit from detailed planning and engineering, in close cooperation with an experienced marine engineering firm. Lessons learned from previous installation experiences can be particularly helpful. Hyde Marine had the advantage of five prototype systems installed in 2000 and 2001 on three cruise ships, a containership with a slow speed diesel, and a parcel tanker. The lessons learned from these experiences were not only excellent background for future installations, but are reflected in the design of the IMO Type Approved Hyde GUARDIAN® System. Selection of ballast water treatment solution The shipowner/operator will be presented with many different ballast treatment options. They will need to choose carefully in order to ensure the selected equipment provides best overall economy, compliance with BWM regulations, and reliable operation for the life of the vessel. Careful consideration must be given to the initial costs, meeting the installation challenges discussed above, and what are the total life cycle costs of the equipment. Among the operational challenges that should be considered in selecting BWT technology: What are the operating costs of the BWT system? • Does the BWT affect the operation or turnaround time of the ship? • What are the maintenance requirements intervals and downtime? • Is their any specialised training for crew and officers and how will it be provided? • Does the system operate in all water salinities or is it necessary to carry sea water or brine?

If the system uses chemicals for any purpose, what are the safety and logistical considerations to purchase, transport, handle and store the chemicals? • What are the risks of environmental damage that could be associated with the operation of the BWT system? • How can the operator be assured that any active substance is fully neutralized before overboard discharge? •

The shipowner/operator should seek a trusted technology partner with a proven record of successful installation and a suitable reference list, who is able to provide technical support before and during installation, commissioning, and after sale service. The technology should be fully tested and have received IMO type approval, meet Class requirements, and have the capability to meet more stringent regulations if needed. The Hyde GUARDIAN® System is a fully automatic and totally chemical-free ballast water management solution. The system’s robust design includes an efficient, auto-backflushing filter, which efficiently removes sediment and larger plankton, and a powerful UV disinfection system, which destroys or inactivates the smaller organisms and bacteria. The combination of these technologies has proven to be a cost-effective, safe, and environmentally friendly ballast water management solution.

2000 McClaren Woods Dr, Coraopolis, PA 15108

Thomas P. Mackey, Hyde Marine, Inc.

+1 724 218 7001

sales@hydemarine.com • www.hydemarine.com


Green shipping manufacturers. Wartsila’s closed-loop freshwater

According to Graham Greensmith, lead

former ocean-going casino which has now been

unit was relatively small and therefore had a lower

specialist on the ballast water issue at Lloyd’s

converted into a ferry which will be used to take

impact on vessel stability and payload, accord-

Register the increasing number of available sys-

visitors to view the Statue of Liberty or Ellis Island.

ing to head of environmental services Leonardo

tems – 17 are currently on the market, with oth-

The vessel is the first in the US to be powered

Sonzio, who said payback time based on a

ers going through the approval process – means

by diesel, hydrogen, batteries, wind and solar

30,000gt Baltic ro-pax was around 2.5 years.

greater choice for the owner. However the deci-

energy. The 600-passenger Hornblower Hybrid

Lodder

sion making process he says is a complex one

cuts fossil fuel use and lowers emissions by

described a dry scrubber using limestone granu-

and for some ships there may be difficulties in

combining clean power from multiple sources. A

late costing E250 per tonne. He said a typical

both selecting and fitting a system.

flexible, innovative power management system

MAN

project

manager

Marcel

load lasted three weeks, pegged the increase in operating costs to between 2% and 6% and

Supply, he suggests, is likely to be outstripped by demand ,coming to a peak in 2017.

ensures efficient use of available power – automatically switching from diesel to batteries when

Classification society Bureau Veritas has pub-

appropriate, for example – with reclaimed and

Speaking at the International Chamber of

lished a comprehensive set of guidelines on

recycled materials incorporated throughout the

Shipping conference in September, Don Gregory,

Ballast Water Management Systems intended

vessel.

director of the Exhaust Gas Cleaning Systems

to help shipowners, shipyards and equipment

The Hornblower Hybrid runs on renewable

Association outlined some of the challenges

manufacturers facing complex choices when

power generated by hydrogen fuel cells, solar

delivered payback after one year.

ahead. He warned that the demand for low sul-

deciding how to implement the IMO convention

panels and wind turbines. Most comes from

phur fuel will drive prices beyond $500 per tonne

and also local rules on ballast water which apply

a 32-kilowatt proton exchange membrane fuel

and said that typical short sea shipping in the EU

in some areas of the world.

cell that turns hydrogen into electricity, heat and

will witness fuel cost increases of millions.

According to Jean-Francois Segretain, deputy

distilled water; the electricity then runs an electric motor and charges 192 batteries.

“Bankruptcies are inevitable,” he told the

technical director in Bureau Veritas’s marine divi-

conference. Diesel demand will also hit forecourt

sion, says: “Ballast water management is becom-

In addition, 20-kilowatt solar panels and two

prices and “ship operators will be blamed” A

ing a major challenge for shipowners. There is

5-kilowatt wind turbines propel and power the

transition system is desperately needed, he said

some uncertainty over the exact implementation

vessel. Efficient Tier 2 diesel engines also kick in

in order to reward early investors and short sea

dates of the BWM convention, and there is also

to cover additional needs. Cold ironing provides

operators that fit EGCS and retain HFO will have

a growing patchwork of local regulation, with the

for battery charging and offsetting other power

a “significant competitive advantage”.

possibility of even more stringent rules on ballast

sources while the ferry is alongside.

Ballast water management to prevent the

in the US.

The vessel has a total horsepower of 1400

propagation of invasive species has been high on

“One thing is certain, shipowners will very

generated by two 700 hp shafts. It carries a

the agenda in recent times as the Ballast Water

soon have to have in place a means of meeting

32 kW proton exchange membrane fuel cell by

Convention may come into force in the next year

very strict ballast water conditions. There are a

Hydrogenics, two Helix Wind 5kW wind turbines,

or so.

number of ways to meet stringent standards on

20 kW SunPower Corporation solar panels and

While the necessary number of flag states –

ballast water, but not all are as yet proven technol-

two Scania tier 2 diesel engines two power two

30 – have signed up to the convention, there is

ogy. That is why we are publishing these guide-

Baldor Reliance 700 HP variable speed genera-

still a shortfall as far as the 35% of world tonnage

lines now, to draw attention to what needs to be

tors.

specification is concerned. While rumours sug-

done and to provide some clarity on the choices

gest that Panama might be on the verge of sign-

facing owners and operators,” he concluded.

ing up – which would mean the entry into force of

One recent project that has been setting

the convention one year later – so far there has

green headlines is the Hornblower Hybrid, a

The Hornblower Hybrid has an operating speed of 12 knots and was converted at Derecktor Shipyards in Bridgeport, Connecticut.

been no announcement. Unless Panama or China decide to ratify, any shortfall in tonnage will have to be made up among the smaller member states. According to a paper submitted by the International Chamber of Shipping to the Marine Environment Protection Committee last year, Convention requirements that all ships be fitted with ballast water management systems by mid 2017 at the latest will mean retrofitting equipment to about 50,000 ships, in addition to newbuilding requirements. This would mean fitting 20 ships a day until 2017. The ICS has also raised concerns about the availability of equipment for ships with a very large ballast water capacity.

Hornblower Hybrid, a former ocean-going casino

theBaltic Winter 2011 www.thebaltic.com

45


Corporate viewpoint Sea2Cradle

Why make an Inventory of Hazardous Materials now? The legislation for Inventories of Hazardous Materials

will not get involved in the creation of the IHM

The IMO Hong Kong International Convention

preparing themselves to issue these certificates,

for the safe and environmentally sound recycling

ahead of the ratification process of the IMO

of ships 2009 is awaiting implementation. The

convention. Whether the certificate should be

convention requires the creation of the Inventory

valid for five years, as per IMO requirements, or

of Hazardous Materials (IHM) onboard all

if they should issue these certificates with an

existing ships. In addition to IMO, we are now

annual survey is a question that can be debated

seeing increased activity from governments

between the owners and their class. In the end

requesting an IHM as a first step towards

this will come down to a matter of efficiency

recycling. There are also voices being heard in

and the cost involved.

themselves. All major classes are already

government departments who would like to see the creation of IHM mandatory through regional

Timing of the IHM

or national legislation, even before the IMO

If a shipowner waits until the creation of an IHM

convention enters into force. This requires

becomes a legal requirement, there is a huge

action from shipowners to start the process

risk involved concerning the quality and price,

sooner rather than later.

due to the fact that there will not be enough inspectors available to perform this job, and it is

What options do shipowners have for the creation of an IHM?

Tom Peter Blankestijn,

expected that last-minute opportunists will be

managing director, Sea2Cradle

offering these services, without having the expertise required. This means the shipowner

At first shipowners may try to arrange it

runs the risk that class refuses to issue the

themselves with their own staff. This, however,

necessary certificates. What’s more, prices of

requires specific skills, training and investment.

the IHM are expected to increase drastically

So the question is whether this investment in

because of this simple supply-and-demand

experienced staff will be worth the money for a

issue due to the pressure of the requirement

limited number of vessels.

being in place.

Shipowners can also hire trained third-party

For shipowners to have the maximum value

experts who can perform the inventory and

for money, timing is of the essence. Good

create the IHM. But what makes one a trained

planning today in equipping a fleet with an IHM

and experienced expert? For example, a person

will mean solid compliance with the legislation

that is qualified to carry out an asbestos

tomorrow. This planning will ensure that the

inspection ashore is not by definition an expert

small pool of inspectors, who are available

onboard ships. At present there are only a

today, can inspect your vessels over the years

handful of inspectors around the world who can

to come and at reasonable price levels. Sea2Cradle was established to assist and

provide a solid professional inventory.

add value to your Environmental Policy and

The involvement of classification bureaus Classification

bureaus

will

organise

create your Inventory of Hazardous Materials. the

certification of the inventory in the future, but

46

theBaltic Winter 2011 www.thebaltic.com


Oxford Analytica

China might deliberately choose slower growth T

show

“shadow” financial sector. However, re-expand-

clampdown imposed by the government over

China’s GDP expanded 9.1% year-on-

ing credit would risk further increasing already

the last year, reinforced by higher bank reserve

year in June-September, falling for the

high levels of non-performing loans (NPLs). To

ratios, has cut off the ready supply of bank

sixth consecutive quarter to the lowest

avoid another boom-bust cycle, China may

credit, leaving many property businesses strug-

prefer to grow more slowly.

gling to find finance to complete projects or

hird-quarter

growth

figures

level in two years. Yet officials gave few indica-

provide working capital.

tions that they intend to relax measures that

Simultaneously,

have tightened bank credit over the past year. A

potential

buyers

have

government-induced “credit crunch” continues

Analysis

become reluctant to purchase new proper-

to weigh on borrowers and banks alike.

The credit crunch is a response to the preced-

ty. Rocketing prices put houses beyond the

ing surge in the domestic economy, fuelled by

reach of most ordinary urban Chinese. Amid

stimulus measures implemented during the

purchase restrictions and other well-publicised

Impact

2008-09 global financial crisis to offset a mas-

measures to cool the market, potential buyers are

• Strategic, high-value added sectors may

sive fall in exports. This stimulus was funded

choosing to ‘wait and see’, rather than rushing

largely by bank lending.

to buy.

benefit from selective easing. • Slower investment growth, particularly in

Poor lending practices, absence of due-

A sharp fall in property prices would place

property and construction, would reduce

diligence

illegality

local governments under financial stress. The

global demand for commodities such as

associated with this lending are now feeding

value of the security they could offer for loans

iron ore.

into higher rates of NPLs (see CHINA: Beijing

would fall, as would the revenue they could

• China’s policy-driven cycle has strained its

fails to quell fears over banks, October 26,

generate from land sales (estimated at around

financial system, prompting fears of banking

2011). In mid-2009, the authorities began

half, or more, of their total revenue), making it

sector instability.

subtly to tighten lending rules, and credit

hard both to repay existing loans and sustain

• Banks may eventually receive ‘selective’

and cost pressures in the small and medium

their current high level of investment, which

recapitalisation, in recognition that bad

enterprises (SME) sector began to mount (see

constitutes a significant share of GDP.

debts have been incurred for policy pur-

CHINA: Rising costs and falling demand threaten

poses.

SMEs, September 23, 2011). Over the past

and,

in

some

cases,

year, policy shifted decisively from encouraging credit growth to reining it in, and economic

What next

growth has slowed.

If the credit crunch deepens, investment, which accounts for almost half of GDP, could collapse, leading to a sharp drop in economic

Property boom

growth and stress in the banking sector. To

The post-2008 credit boom is bound up with

avoid this, Beijing could ease credit restrictions

the property market. Much bank lending went

and attempt to stimulate lending. This would

to developers rushing to build, and a con-

lift the economy out of immediate danger and

struction boom supplemented ‘traditional’

might also curb the rise of a potentially unstable

investment in infrastructure and industry. The

theBaltic Winter 2011 www.thebaltic.com

47


Oxford Analytica Beyond banks Negative real interest rates on traditional bank accounts have encouraged investors and depositors to pursue an array of alternative lending arrangements. These promise higher returns by lending to cash-starved private businesses, often at elevated rates of 20-25%. Distressed borrowers, especially SMEs, have turned to this alternative credit market, which comprises an assortment of lending arrangements that range from bank-intermediated lending that exploits loopholes to circumvent regulations, to largely unregulated ‘private’ lending, to illegal loan-sharking. Estimates of the scale of “informal” or “shadow” lending are inherently difficult and also vary depending on how it is defined, but a figure of around 4 trillion renminbi is common, around 6-7% of the bank deposit base and 10% of GDP. Although a relatively small share of the overall financial sector, the rapid growth of alternative financing fuels official concerns about financial stability, prompting a recent statement by the banking regulator about bringing it under “strict” control. State-owned banks remain dominant and are unlikely to see large-scale outward migra-

Exceptions have already been permitted for

exchange reserves could provide resources

tion of deposits. However, problems or scan-

some smaller financial institutions. However,

for this.

dals in the informal sector could trigger a rush

before these lending restrictions were imposed,

Financial sector woes elsewhere in the

of money back into formal bank deposits,

most loans went to the state sector. If they are

world fuel doubts overseas about China’s ability

extending a “credit crunch” to informal lend-

relaxed again, this must be in a way that avoids

to deal with its post-stimulus financial prob-

ing. Informal lending is already implicated by

simply channeling further credit into local-level

lems. There are also long-standing concerns

recent heavy media coverage of distressed

policy lending.

about transparency and the persistence of high

borrowers, in Wenzhou in particular, where

Premier Wen Jiabao last month announced

levels of NPLs.

a rash of disappearances and suicides has

a

encourage

However, another risk is that Beijing might

reportedly occurred among the owners of

specific lending to SMEs. More could follow.

decide to keep policy tight and choose to grow

troubled businesses.

However, such schemes may prove rather

more slowly. This is the implicit, if not stated,

unattractive to the banks.

intention of the 12th Five Year Plan (2011-15),

package

of

measures

to

To address fears of banking sector instabil-

which has lowered China’s growth target from

Policy options

ity, the government could shore up the banks,

8% to 7% and emphasises more “balanced”’

Problems in the “informal” lending sector could

as it did in the late 1990s, by buying tranches

growth. A strengthened welfare system, which

drive deposits back to the “safe haven” of

of their NPLs, implicitly recognising that many

the government could probably fund even with

formal banks, causing an “informal-credit

of these loans were the result of the sector

somewhat slower growth, would both make

crunch”. To assist cash-starved SMEs and

undertaking stimulus policies at the govern-

rapid growth less crucial for state legitimacy,

boost economic growth, Beijing could relax its

ment’s behest. The sovereign wealth funds that

and rebalance it, improving its quality even if

restrictions on bank lending. One option is to

manage a small share of China’s vast foreign

reducing its speed.

cut prudential reserve ratios, allowing banks to

Yet Beijing cannot be sure how the economy

extend new loans and improve their earnings.

would react – not only to lower growth, but to the withdrawal of the government’s guarantee to support growth “by any means”. The risks to Beijing of taking such unprecedented steps amid the current serious global uncertainty would be considerable. © Oxford Analytica 2011. All rights

It is likely that the authorities are still

reserved. No duplication or transmission

weighing their options, which include expanding

of this document is permitted without

recently announced efforts to target aid to

the written consent of Oxford Analytica.

SMEs in certain sectors. However, achieving

Contact us: www.oxan.com/about/

stability and regaining control over the finan-

contacts/ or call +44 1865 261 600 or

cial sector might be prioritised above growth,

in North America 1-800 952 7666

since,

with

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overshot in 2009.

48

theBaltic Winter 2011 www.thebaltic.com

growth

promotion


Insurance special

Reducing risk Kidnap and ransom, multi-modal transport and ferries are just some of the areas insurers have to deal with

Kidnap and ransom

effective cover than that offered by a hull

buy a policy that covers the loss of that money

With the ongoing problems of piracy in West

and machinery policy or a war risk policy?

in transit, and that policy could cost quite a

Africa, kidnap and ransom (K&R) insurance is

“Obviously, a ship needs a hull and machinery

bit”. Kissel says he has drafted those kinds of

one way owners can cover themselves.

policy and war risk policy – there is no debate

policies in the past, but that they were incredibly

According to Leo Kissel, managing director

about that as there are several risks covered

expensive, so he had decided to go down the

of Hamburg-based Trident Special Risks,

that it needs to have.” A tailor-made kidnap

route of having everything incorporated in a

what most people don’t realise is that the

and ransom policy, he believes, is becoming a

single policy.

underwriting market for kidnap and ransom

“must have” policy. “When you have a marine

So ransom payments go adrift often?

is very international – there are a number of

kidnap and ransom policy you have guaranteed

According to Kissel it is not a common

players outside London that the firm is in

access to risk consultants. These are specialist

occurrence, but a possibility. Following a

contact with and who can provide such cover.

companies and if your ship is hijacked, you

prolonged negotiation between the shipowner

One of these is based in Germany.

call one number and the specialist will fly out

and the hostage takers to reach a position that

Pricing for such policies, he says, is

to your company and if necessary sit with you

both parties can accept “you are desperate to

extremely competitive, “but whenever I sit down

24 hours a day and guide you through the

get your people out”, he says. In cases where

with clients, I am always talking about the value

whole scenario.”

negotiations may have lasted six months and

that you get out of what you buy because this is

While specialists will provide guidance

the ransom money has been despatched and

such a specialised product. You have to know

during ransom negotiations, Kissel says it is

lost in transit “you are going to have to come

what you are buying.”

important that the final decision is taken by the

up with another $5m very quickly”.

If in nine cases out of 10 ships can transit the Indian Ocean safety “in the one instance

shipowner. “It shouldn’t be something that is done by third parties or the underwriter”.

As far as escalation in ransom payments is concerned, Kissel acknowledges that the size

The other benefit, he says, of having a

of ransoms is going up and crews are spending

K&R policy is “you are protecting your hull and

more time in captivity. However, he believes

If you are going to be transiting such areas

machinery and war claims records”. If separate

that the size of ransoms is increasing because

“you want to find the right prices and value for

cover is not in place, premiums would go

the success rate of the pirates is going down.

your money”, Kissel says. Underwriting cover

through the roof.

“They are trying to get the most out of the

that something does happen you at least want to know that you are well covered.”

assets that they do have. This means they are

on offer ranges from the lowest to the highest, so the client needs to be sure he is buying

Loss of ransom

trying to bloat that number up. They have been

something viable, he says.

Average ransom amounts, he says, are of the

successful in doing that, which also means that

So how does Trident position themselves

order of $5-5.5m plus costs of around $4m,

the negotiation time can be longer and longer,

cost-wise? “Take into account we are brokers,

which would result in “your hull and machinery

especially if negotiators on the pirates’ side

so we scan the market. Because of my network

policy being blown for the next several years.”

change. Right now we are looking at something

I have a very good idea about what kind of risk

Another benefit is avoiding lengthy or costly

like 150 days to 180 days”.

is placed, where and at what price. I am not

general average negotiations.

Kissel says that he warns his clients that

hooked to one underwriter – that is something

One thing a lot of people don’t realise, he

buying a K&R policy for $5m might not be

I refuse to do – because I am working for

says, is that K&R policies also provide cover

enough. He advises his clients not to get policy

my clients. My clients are shipowners and

for the loss of the ransom in transit, which he

cover for less than that and would probably

charterers, so I am always looking for balance

believes would not be covered under general

suggest around $7.5m “to be on the safe side”.

in pricing and value for money. For me to say ‘I

average. In the event of being about to make

One recent trend that Kissel highlights, and

can get the cheapest product’ is not correct.”

a ransom drop for, for example, $5m “a lot

one he says has not had as much coverage

of people would suggest that you go out and

as it should do, is that of pirates separating

theBaltic Winter 2011 www.thebaltic.com

49

So is the K&R offering providing more


THE MARINE KIDNAP AND RANSOM INSURANCE SPECIALIST

Let our expertise be your piece of mind.

TRIDENT SPECIAL RISKS

Trident Special Risks Versicherungsmakler GmbH Ochsenwerder Landscheideweg 12 21037 Hamburg, Germany Phone: +49 40 30 89 30 29 E-Mail: info@trident-sr.com www.trident-sr.com


Insurance special the crew off from the ship and holding the crew themselves for ransom after the vessel has been freed. He believes that this trend is likely to escalate. However, K&R policies react to such cases, he says. “If your piracy cover is under hull and machinery or war, that element of general average is questionable because the vessel has been freed and the cargo has been freed so where is the interest of hull and machinery and war to come in and help you?” In the case of the crew being separated from the ship, the question is then raised as to what the role of the P&I Club is in that case? According to Kissel, that depends on the P&I Club rules in question, but he believes “nobody knows”. He says he has spoken to a lot of industry players – hull and machinery and war underwriters – and using general average and sue and labour clauses are accepted market practice when considering the payment of a ransom for the return of the ship and cargo.

Clarity of coverage In the event of only the crew being involved, the question then arises as to whether general average is applicable to the situation. Kissel says he tells his clients that the marine K&R policy “should always provide for clarity of coverage. Whether the crew is on board, or taken away separately does not matter. You get what you pay for.” He quotes Berkshire Hathaway boss Warren Buffett as saying “price is what you pay, value is what you get”. As far as armed guards are concerned, Kissel says that in the K&R world they are seen as a deterrent, but “history has shown that

Alexander Brewster

pirates adapt to changing situations”. While

Multimodal

freight forwarders operating around the world

the success of using armed guards has been

Michael Else & Company’s new insurance cover

and a lot of these new companies don’t yet buy

demonstrated by the fact that no ship using

for multimodal operators and intermediaries

the insurance cover or sometimes their local

them has been captured, the caveat he says

has

markets can’t provide the same kind of cover

is that things are likely to escalate with the use

from developing countries, according to

of higher calibre weapons and this will have

the managers of the Charterers P&I Club

legal effects, for example triggering war risk

and Transmarine.

been

attracting

widespread

interest

that we can provide”. Having worked in the cargo and cargo liability markets for a number of years, and

The company believes that its new offering

knowing other underwriters in similar positions,

There is also a rumour circulating, Kissel

fills a gap in the market in providing innovative

Brewster says that the bigger companies have

says, that there are likely to be cutbacks

insurance solutions worldwide for small- and

focused much more on the top end of the

in naval support to protect ships transiting

medium-sized multimodal transport operators

market and the higher margins.”I saw a good

the danger zone and the impact of that is a

and shipping intermediaries such as freight

opportunity for a focused and efficient product

serious consideration.

forwarders, NVOCCs and ship agents.

to concentrate on the small end of the market”.

exclusions in P&I Club policies.

And what of the possibility of ransom

The new product, Portside Insurance

With Portside forming part of the Michael

payments being made illegal?” Kissel says

Management Services, operates as a brand

Else group, it can take advantage of the group’s

that is always a possibility, but the question

within Michael Else & Company’s existing

worldwide network, contacts and distribution to

is

ransom

structure and the security is provided 100 per

promote the product round the world.

payments do lead to further hijacks but on

cent by Torus Insurance (UK) Ltd, rated A M

the other hand “what at the moment is the

Best A- (Excellent).

what

happens

then?

While

Legal issues have sometimes caused problems for multimodal transport where

According to Alexander Brewster, who has

different rules apply to different legs of the

If a shipowner has his crew taken hostage,

been appointed as the class underwriter for

journey, so does the same thing apply to

he says, he is going to do everything to get his

Portside, multimodal operations are a growing

insurance products?

people out safely.

market worldwide. “There are a lot of new

Brewster says: “Our cover is basically in line

theBaltic Winter 2011 www.thebaltic.com

51

viable alternative?”



Insurance special

Simon Swallow

with the contractual obligations of the insured

terms of premium income. He declines to identify

insurers were prepared to accept ferry hull &

with their client so it covers their contractual

the broker but they hope to work together.

machinery business after consistently losing

liability. In terms of legal issues raised between

Emerging markets and less developed

the freight forwarder and their client, as the

markets are particularly interested in the

insurers it would involve us as well.

product, he says. “We are looking in the

One market leader had revealed loss ratios

“We have a fantastic legal team here who

Far East. Most of this business will come

of 153% on ferries and 189% on ro-ro ships

have been dealing with liability claims for 25

from east of Suez. The European market,

compared with 115% across all sectors. This

years, with the Charterers P&I Club and we are

and certain parts of the Far East and Middle

was mainly due to machinery incidents, notably

lucky enough to have the same team handling

East are already well serviced by freight

because of the strain of maintaining tight

Portside as well.”

forwarders’ cover but I think worldwide there

schedules and because “there are a lot of old

is still this gap for a product focused on the

ferries out there”.

There has been a very positive response to the new product from around the world, with a wide distribution network for the initial launch, using the contacts Michael Else & Company.

money and failing to achieve the required increase in premiums.

smaller operators”. According to his definition, a medium-sized

Hull and machinery insurers did not like high-speed

craft

because

engines

were

enterprise would have up to 250 employees,

working at full capacity and spares costs were

“It has been very positively received around

with turnover of up to $15m a year, but smaller

high. Liability insurers preferred fast ferries

the world, but maybe less so in London

operations could have a turnover of less than

to conventional vessels because passengers

because some people think there are a lot of

$1m.”We want to be able to support all these

were strapped in, there was high technology

people doing the same thing in London, but if

accounts and all the brokers’ business from the

on

you look at the worldwide market the opinion is

smallest ones up.”

were short, but were alarmed at major

board

and

stopping

distances

increases in exposure under the EU passenger

very different”.

liability convention due in force late next

London sees a lot of the big business with

Insuring ferry risks

year.

bespoke cover, he says. “That’s what London

What do underwriters really think about insuring

over-familiarity with scheduled routes were

has always been good at. I saw a gap for

ferry industry risks? Simon Swallow, commercial

common concerns.

something focusing on a less obvious path”.

director of the UK-based Shipowners P&I Club,

One of the big brokers in London, he says, has

told delegates at the Interferry conference

company’s solvency could depend on the

approached him saying he thinks the idea was

recently that his informal research had revealed

quality of your insurance company. Work with

a good one because it identifies a less obvious

increasing anxiety in the market.

them, show them your attention to safety and

huge accounts requiring very complicated,

source of business, albeit with lower volume in

He found that only three or four Lloyd’s

theBaltic Winter 2011 www.thebaltic.com

Crew

Swallow

fatigue,

advised:

competence

“Ultimately,

and

your

you will see your costs reduce.”

53


Providing complete security and peace DELIVERING EXCELLENCE IN ALL THAT WE DO Solace Global Maritime, a United Kingdom based Limited company, provides worldwide maritime security services to the international shipping industry. We believe in the consistent delivery of excellence and an unrivalled knowledge of our client’s requirements. Solace Global Maritime provides in excess of 1200 transits annually and we pride ourselves on setting the standard for maritime security in the modern marine environment. At Solace Global Maritime our ethos of the delivery of excellence is evident in the personnel we provide, the equipment we use and the ongoing support that we offer. DEALING WITH THE THREAT MARITIME SERVICES The threat of piracy and hijack is real, fast-moving and constantly evolving. As of September 27th, 2011, the IMB Piracy Reporting Centre noted 346 attacks and 35 hijackings worldwide. Even more notable than this is the 15 vessels and 277 crew

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ce of mind for your crew and company. security and peace of mind for your crew and company is our number one priority. FIREARMS Company firearms are specifically procured with Counter-Piracy operations in mind. All are purchased new from the supplier, chambered for large calibre, high velocity ammunition and operate under SemiAutomatic action - outperforming in range and accuracy those employed by the pirates. INSURANCE & LEGAL We ensure we are protected for every eventuality. At immediate disposal we can call upon legal counsel from our Specialist Maritime lawyers. Our comprehensive insurance policies provide our clients and the Company with the following extensive coverage: Personal liability involving all aspects of the use of firearms up to £5 million. Personal accident, medical expenses,

hospitalisation and repatriation up to £250,000. INDUSTRY STANDARDS Solace Global Maritime strictly adheres to the following standards, industry guidance and recommendations: • IMO MSC.1/Circ. 1405, 1406 & 1408 • BSN EN ISO 9001:2008 Certificate No. 9596 • Signatory Company to the International Code of Conduct for Private Security Service Providers (ICoC) • Member of The British Marine Federation (BMF) • Member of the British Association of Private Security Companies (BAPSC) • Member of the Security Association for the Maritime Industry (SAMI)

security teams to ports throughout the High Risk Areas and beyond. Our highly skilled operations team, along with their state of the art 24hr operations facility, allow us to coordinate and accomplish even the most complex of missions wherever they may be in the world. No matter where your requirements stretch Solace Global Maritime will endeavour to create a service that is tailored to suite your needs. Our commitment to the delivery of excellence in all that we do extends with us across the globe, and we promise accountability and legality in keeping with national and maritime industry rules and guidelines in all the services that we provide.

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Security

To arm or not to arm? While most owners and trade organisations believe that arming vessels is now the solution, concerns remain

H

igh profile interventions like those of

that shipowners privately hire armed private

criminal prosecution. Furthermore, shipowners

UK prime minister David Cameron

security guards, an option which should only be

could be faced with local legislation covering the

in favour of arming vessels have

considered “in case of special conditions”.

import and export of weapons in the event that the vessel has weapons on board and enters the

been greeted with acclaim by some,

If the government uses its own resources,

but the danger of escalation continues to

or engages reservists or hires armed private

cause concern.

security guards who will temporarily be given

The use of military personnel on vessels does,

military status, the committee argued, this would

however, bring with its own set of problems.

For example, in the wake of an independent

jurisdiction of another country.”

Netherlands

not constitute privatisation of security duties. By

Francesco Lauro of Italian law firm Studio Legale

government to provide Dutch shipowners

creating additional defence capacity in this way,

Lauro told a recent conference organised by his

with better levels of protection against piracy,

no amendment of legislation and regulations will

firm on Shipping and the Law that in Italy use

including the hiring of armed guards, Netherlands

be required.

of armed guards has recently been approved

report

recommending

the

law firm AKD said that shipowners who directly

If

leaving

shipowners

to

hire

private

in Italy, either in the form of Military Protection Detachments or private contractors.

hire armed personnel themselves could face

security guards, the report suggested that this

criminal prosecution.

would require drastic amendment of Dutch

Powers of MPD commanders and masters of

legislation and regulations, which under normal

vessels are outlined. For example, although the

circumstances could take years.

master is responsible for safety of navigation and

P&I Clubs have also raised concerns that owners might eventually end up paying in “friendly fire” incidents involving armed guards

Jan Kromhout, a partner with AKD in

manoeuvring including for passive defence, the

and crew members while, if the pirates decide

Rotterdam, commented, “Clearly, it is the duty

master is not liable for decisions taken in order

to use increasingly sophisticated weaponry in

of government to do its utmost to protect the

to fight pirate attacks.

their attacks, war risk exclusions in P&I policies

merchant fleet from attacks by pirates. In the

Other jurisdictions, however, do not allow

may be triggered.

event that the government is not able to fulfil

military personnel on merchant vessels, generally

De

its duties, for whatever reason, it will have

for political or historical reasons, and therefore

Wijckerslooth Committee report was designed

to employ outside help. It is not desirable

would be obliged to go down the private security

to assess the desirability and possibility of

that privately owned companies hire armed

route. Insurers also suggest that the use of

deploying private sector armed security to help

protection to perform the duties which are the

armed military personnel reduces the risk of

protect Dutch ships from the threat of attack

responsibility of government, which should retain

claims in the event, for example of a friendly

by pirates. It recommended that the Dutch

its monopoly of force. Furthermore, the cost of

fire incident.

government moves towards a higher level of

providing protection against piracy should be

According to North P&I Club director Mike

protection of its merchant fleet including, “if

borne by the state. Shipowners should only be

Salthouse, who also spoke at the Studio Legale

necessary”, the use of armed private security

allowed to hire private armed guards in special

Lauro conference: “Average cost of ransoms

guards. The report, however, warned that

situations, in the event that the government is

increased significantly from around $600,000 in

such security guards should only be hired

not able to fulfil its duties.

2008 to more than $5m in 2010, with a reported

The

Netherlands’

commissioned

figure of $ 13.5m paid to release an unidentified

by the government, and should only perform

“In the event that Dutch shipowners do hire

their security duties as soldiers under the

armed personnel, or provide weapons to those

full authority of the Ministry of Defence. The

on board, those directly involved, as well as

“The average period of detention has also

authors of the report added that, under the

shore-based personnel (including the ultimate

risen significantly from around 55 days three years

current circumstances, it was not desirable

management of the company) could face

ago, to more than 200 days in late 2010, falling

theBaltic Winter 2011 www.thebaltic.com

57

vessel in April 2011.


Security As he points out: “For every shipowner, the security advantage offered by the use of armed maritime security providers has to be set against concerns centred on the risks posed by such guards to the crew, to the AMSPs themselves (if they are not familiar with vessel operations) and to other vessels. Confusion has reigned over rules of engagement and the role and authority of the master during an attack. The simplistic solution of the security team commander seeking instructions from the master as to whether or not to use lethal force, is fraught with complications and at worst could risk making the master criminally responsible for an unlawful killing.” Another issue the owner has to contend with is flag state requirements in relation to the carriage of weapons and ammunition on board vessels. South Africa is one country with strict Mike Salthouse, North P&I Club director

regulations on the carriage of firearms in its ports and while Cameron may now back the

somewhat recently as pirates have increased

through danger zones, it must not be forgotten

use the armed personnel on merchant vessels,

the throughput of vessels and ransoms. Clubs

that because of defence cuts around Europe

it should not be forgotten that, at one point, the

have experienced claims for personal injury and

there is the prospect of naval assets in the

UK government was reported to be considering

loss of life, medical expenses, personal effects,

Gulf of Aden being substantially reduced in the

stopping maroons being fired to launch lifeboats,

trauma counselling and for damage to and loss

near future.”

while question marks were raised as to whether

The need to provide armed guards has

the Royal Yacht Squadron’s use of a cannon to

The pirates have adapted their tactics, he

inevitably given rise to a burgeoning security

start races to start yacht races at Cowes might

said, and using merchant vessels as mother

industry, with quality being something of a

infringe UK gun laws.

ships enabled them to continue operating in the

hit and miss affair, and vetting is a major

Another issue to be considered, which

monsoon season as well as expanding the range

issue. According to Salthouse: “There are some

Salthouse highlighted is that the shipowner

of operations. “There are reports of increasing

companies that approach the task professionally

could not avoid the fact that “in some cases

sophistication in the military equipment used by

and legally. There are undoubtedly others that

additional personnel on board will prejudice a

pirates and most commentators believe such

have little appreciation of the legal and legislative

vessel’s compliance with SOLAS”.

activity is likely to continue to escalate for the

environment in which they and the shipowner

However the fact remains that to date no

foreseeable future,” he warned.

operate. It is often difficult for the shipowner to

vessel on which AMSPs are deployed has been

differentiate between such companies.”

seized by pirates. Increasingly, and where Flag

of cargo.”

Furthermore, the use of naval assets to protect ships targeted by pirates is a slow

State permits, the use of AMSPs is being seen

process. “In practical terms, this means that a

by shipowners as the most effective means of

ship targeted by pirates must plan to be able

resisting a pirate attack.

to defend itself against assault by the pirate

Most of the clubs provide guidance on was is

teams for up to 24 hours before naval assets

or is not acceptable when drawing up contracts

can arrive to assist the vessel. Further, the

with security companies. They also recommend

economic cost of making such assets available

that members provide their clubs with copies of

is inevitably the subject of review in the difficult

the contract before they sign it so as to ensure

economic times we find ourselves in. It is this

that it is not likely to contravene the terms of the

fact – that shipowners have in effect to look after

insurance.

themselves – which has more than anything

According to Salthouse: “P&I cover does

else has caused the rise in use of security

not prohibit the employment of armed security

contractors and increasingly armed maritime

guards however the deployment of AMSPs

security providers.”

on board a member’s vessel could prejudice

This view has doubtless been strengthened

cover if their use is in breach of Flag State,

by rumours circulating that naval operations in

Port State or other legislation. Shipowners

the danger zone are likely to be scaled down in

should also ensure that the embarkation of

the near future as political attention continues

additional security personnel does not place

to be centred on the Middle East. Ole Wikborg,

them in breach of SOLAS safety equipment and

president of the International Union of Marine

certificate requirements.” Some rules of engagement contain provisions

Insurance warned recently: “Although there is still a clash of views about placing armed

Ole Wikborg, president of the International

that require the AMSP team commander to

security personnel on board for the ship’s transit

Union of Marine Insurance

obtain the approval of the master for the use of

58

theBaltic Winter 2011 www.thebaltic.com


Security whole fleet.” In addition to entry and exit alerts, Fleet Management users can receive automaticallyincreased frequency of reporting via email or SMS while the ship remains in a selected zone. SSAS Alert Advanced users receive automatic entry and exit notification and ships can be polled on demand for latest position reports. Predefined security zones include the UKMTO and the International Recognised Transit Corridor as well as designated War Risk zones for insurance purposes.

P-Trap Another security product on the market is Westmark’s anti-piracy device P-Trap Westmark, based in the Netherlands, created the P-Trap as a passive non-lethal ship protection measure. Once deployed, it protects seagoing vessels from boarding attempts by pirates. The reusable system carries thin lines that float at the waterline around the sides and at the stern of a vessel. Pirates that enter the P-Trapsafety zone will run into the lines, which are

Anti-piracy device P-Trap

designed to become entangled in their engines, force to repel an attack, a provision Salthouse

Islands, Liberia, Australia, and Canada, as well

disabling their vessel. The P-Trap is designed

said is inappropriate. “Seafarers have no training

as providing LRIT Conformance Testing and

to defend against multiple simultaneous attacks

in the use of firearms and/or the circumstances

Certification for more than 90 Flags. In addition,

and does not require crew involvement once it

in which lethal force may be justified in preventing

the combined company’s increased technology

is deployed.

an attack. Rules of engagement that require the

resources will enable the group to deliver

“The P-Trap concept is as simple as locking

master to sanction the use of force unnecessarily

superior, cutting edge products more quickly to

your doors and windows before going to bed

expose the master and crew to the possibility of

its customers.

at night. It’s practical and it makes sense,” said

being prosecuted in the event the use of force

“Our goal is to be the world’s leading provider

Lodewijk Westerbeek van Eerten, creator of

was not warranted. Ideally, rules of engagement

of fleet management, ship security and vessel

P-Trap. “The option to lock the perimeter of a

should set out in advance the circumstances in

monitoring systems to the maritime industry

ship offers seafarers an extra layer of protection

which force will be used without reference to the

as a whole. This merger is a big step towards

and peace of mind so that they can focus on

master or crew while respecting the master’s

achieving that,” said Colin Hook, the newly

their core business – the transport of goods.”

overriding right to intervene to prevent the use

appointed CEO of Pole Star.

Heavy lift company Dockwise, purchased and

of force on board the vessel. Such rules of

Pole Star recent launched its Industry Zones

tested the system this year on one of its ships.

engagement should be agreed by the shipowner

product which allows users to select from a

Following three successful transits through the

prior to the deployment of the AMSP and then

series of pre-defined areas that carry additional

Gulf of Aden using the P-Trap Dockwise is

notified to the master and crew as part of an

environmental

or

expanding the use of the system on board

initial security briefing.”

security risks and apply them to their voyage

its entire fleet. “We welcome the opportunity

If the use of armed security personnel is

management and reporting procedures. Industry

to provide additional tools and resources to

one area of the maritime security business, the

Zones provides automatic notification when a

our crews to reduce the risk of piracy attacks

other is coming up with technical solutions to

vessel enters and exits the pre-defined zone

at sea,” said Marco Schut, Dockwise vice

protect ships.

and can be configured to increase frequency of

president of operations. Four Dockwise vessels

reporting while in the zone.

are equipped with a P-Trap.

regulatory

requirements

Paul Morter, Pole Star director of sales said:

Perhaps a more traditional means of

Pole Star

“Shipowners today face both increased security

combating piracy is the Knowsley SK EVICTOR,

Security related services are offered by a number

threats and a greater regulatory burden, so there

which uses the ship’s fire main or any other high-

of companies one of which is Pole Star who has

is a need to simplify compliance while at the

capacity water supply to provide a water shield

recently merged with Absolute Maritime Tracking

same time sharpening security monitoring. To

via twin 70 degree operating in a 90 degree arc.

Services to provide a monitoring and security

manage these issues effectively, they need tools

According to the company: “The nozzles have

serve to more than 35,000 vessels.

that bring together all the information needed

been selected to provide a powerful jet of water

The merged company will now operate

for voyage planning and execution. Pole Star

and a water mist curtain, giving a tremendous

Long-Range Identification and Tracking (LRIT)

Industry Zones provides that functionality within

visiual presence, inhospitable atmosphere and

data centres for 40 maritime administrations

a proven and widely-adopted system and in a

a physical force cable of deterring the most

including Panama, Singapore, the Marshall

single screen view, vessel by vessel, across a

determined of pirates.”

theBaltic Winter 2011 www.thebaltic.com

59


Corporate viewpoint Securewest International

A comprehensive solution to maritime security Securewest International explains why taking a comprehensive approach to maritime security will ensure your vessels and crew are fully protected.

W

ing threat of international piracy

Understanding the environment

and vessel hijack, ship owners

A core service is to provide teams of security

are faced with the difficult task

guards, both armed and unarmed, onboard

of deciding how to properly protect their people

ships. Securewest International’s long experience

and assets. The number of companies offering

has equipped them with an in-depth working

security services appears to be growing by the

knowledge of all types of commercial vessel

day so how can you be sure you chose the best

and they recognise that the actions required to

company to safeguard your precious assets?

safeguard a chemical tanker differ from those

ith the ever present and increas-

Securewest International is a worldwide

needed to keep a RoRo vessel or container ship

organisation and has been a leading specialist

safe. They also fully understand the regulatory

in maritime security since 1987. The company

environment and provide detailed advice to ship

believes that effective vessel security is about

operators on the requirements of the relevant

a range of measures to create layers of barrier

port , flag state, insurance and other authorities.

against potential threats and it is the provider

It is vital that vessel operators are aware of their

with sufficient depth and experience of service

corporate liabilities when opting to place security

provision that will be best placed to offer the

teams onboard their vessels and Securewest

most appropriate solutions. With more than

as well as the military processes and actions

International is extremely well placed to provide

20 years exclusive experience in the maritime

required to ensure vessels and crew remain

expert advice and counsel.

sector, Securewest International has developed

protected.

a comprehensive range of security services that

The

Implementing

physical

security

should

Securewest

involve much more than simply placing guards

will ensure your vessels and crew are kept as

International service is to assist ship operators

on vessels and the teams from Securewest

safe as possible.

take a holistic view of the risks and threats that

International begin their work well before

its vessels might face. Piracy hot-spots are top of

embarking on the ship. A thorough, up to

Combining military and commercial experience

the list but so are adjacent coastlines the vessels

date route threat assessment is provided0

will pass or ports it will visit during its voyage. A

prior to the voyage which, coupled with a

The operational management and security

thorough assessment of the potential threats

vessel assessment, forms the basis of the

teams at Securewest International all have

likely to be encountered is made and advice

solutions proposed. Securewest International is

military backgrounds but, importantly, the

given. Combating piracy is a complex challenge

a signatory to the International Code of Conduct

company’s longevity in the market has given

and circumstances will change from week-to-

for Private Security Providers and the clearly

its people the ability to successfully combine

week, even for the same vessel transiting the

defined and mission specific Operational Orders

military experience with commercial needs and

same waters. Securewest International is expert

and Rules of Engagement drawn up by its

imperatives. Securewest International people

at continually re-assessing and updating the

operations team reflect current best practice.

have a full understanding of commercial shipping

potential risks facing each vessel.

60

theBaltic Winter 2011 www.thebaltic.com

cornerstone

of

the

Once onboard, the team will provide the


Corporate viewpoint Securewest International

Master with a full brief and threat update and

Securewest International’s experience allows

Maritime Assistance Center (MAC) on a 24/7

talk the entire crew through the security plan.

them to provide enough training to ensure a ship

basis to provide real-time, high-quality security

Training will be given and drills undertaken.

operator is confident in times of crisis. Planning

advice to all its clients. Piracy and other security

This ensures that, in the event of an incident,

is of the utmost importance and Securewest

alerts are tailored to client requirements and sent

everyone is confident of exactly what to do and

International will assist the vessel operator

to the relevant ships. Immediate advice is also

how to act to stay safe. Securewest International

through this process. Often, in a crisis situation,

given on vessel routing, port conditions, ISPS

believes that it is important that all personnel

the ship operator is solely responsible for

issues and any other urgent security issue. MAC

understand the risks they face and the mitigating

handling the incident for an hour or more before

is currently used by over 16 million tonnes of

measures to defend against it. Experience has

the authorities become involved. Managing this

international shipping.

shown that crew understanding and involvement

“golden hour” correctly is vital for the safety

MAC is also available to provide a fully

engenders a greater degree of assurance and

of the crew and the vessel operator must

SOLAS compliant Ship Security Alert System

confidence.

understand exactly what actions are to be taken.

(SSAS) monitoring facility to ensure all alerts are

As well as liaising with the hijackers, the operator

managed securely, verified, authorities contacted

Escort vessels

must inform and provide support for families,

and mandated routine testing conducted.

An alternative to placing a team onboard is to

put measures in place to ensure the crew are

Achieving a high level of maritime security is

utilise an escort vessel. This is not an option

safe when released, deal with any media interest

a challenging and complex activity that requires

that Securewest International will recommend

and, of course, maintain business continuity.

a thorough understanding of the commercial

until a thorough threat assessment has been

Securewest International can ensure all relevant

shipping sector as well as the environment

undertaken but it can be particularly useful

training is given to prepare the vessel operator

that poses the risk. It is essential that security

for slow moving vessels such as rig-tows or

for this taxing and stressful process.

activities are comprehensive and fully integrated expert,

into all areas of the business. Securewest

International is an expert at identifying and

Securewest International is also in demand as

International, with its extensive experience of

sourcing the most appropriate vessel to

an ISPS consultant. Services include providing

operating in the maritime sector, is extremely

undertake escort duties and for ensuring the

full training to all company employees to raise

well placed to deliver these services to all those

vessel can operate in all the sea-conditions the

awareness of their own personal security as well

involved in international shipping.

client vessel is likely to encounter. The company

as the security of their vessel or facility. A range

will also place a well equipped and highly trained

of drills are also offered to test employees in live

team onboard and advise on the optimum

situations.

underwater

exploration

craft.

Securewest

As

an

international

security

operating pattern to discourage a pirate attack.

Knowledge is key Training is vital

Maintaining a good knowledge of the threat

A further element in security management is to

environment is central to ensuring the safety

fully train the client’s shore team responsible for

of a ship that is transiting a security hot-spot.

For more information visit:

managing a hijack or other security incident.

Securewest International operates its unique

www.securewest.com

theBaltic Winter 2011 www.thebaltic.com

61


Corporate viewpoint MAST

Keeping safe with MAST M

offices in Malta, UK, Djibouti, Sri Lanka, Oman,

Piracy concerns and commercial maritime security capability

South Africa, Hong Kong and China.

“..Maritime piracy is costing the international

AST is a leading maritime security company with a strong international presence and

The company is a global supplier of specialist

economy between $7- $12 billion per year “

maritime security services, operating in difficult

One Earth Future Foundation, Working Paper,

and dangerous environments.

December 2010

Its underlying ethos is to deliver an exemplary security service to its clients while respecting

The concerns over Piracy continue and

the environment, local and international law and

it remains an intractable problem for the

Mauritius, Kenya, Tanzania and South Africa

human rights.

shipping community.

thus ensuring support throughout the region.

It is also clear that the problem is not only

MAST also has a track record of extricat-

key stakeholders in the following ways:

spreading further across the Indian Ocean and

ing ships and crews from arbitrary detentions

l Customers: to deliver a consistently reliable

as far south as the Madagascar channel, but

and deadlocked situations in many of the most

appropriate and effective security service.

also that the pirates’ tactics are changing, with

challenging places around the world. The com-

l Employees: to provide rewarding and chal-

pirated vessels now being used in an attempt to

pany has a dedicated response capability with

lenging work and development opportunities.

capture more ships.

on-scene advice and negotiation, dealing with

The company aims to fulfil the needs of its

l Partners: to develop trustworthy and valuable

relationships with key partners in support of MAST’s global services.

Comprehensive security support

All these facts provide a unique challenge for the shipping community.

Ship hijacks and arbitrary detentions present

at sea and the changing political environment,

a unique challenge to marine underwriters and

more ship owners and charterers are being directed to provide for their own security. Private security companies provide part of

security service for its clients within the maritime

the answer to the problem, when used in con-

community.

junction with the support offered by the inter-

• Yacht security • Design and installation of security systems • Commercial shipping security

national community and the various naval task forces operating in the region. For over six years, MAST has been delivering a responsive, cost-effective security service. MAST is currently in support of in excess of

• Explosives Ordnance Survey and Disposal

70 shipping clients, ranging from specialist tug

• Intelligence support

and tow, dredging and towed array operations

• Training

to tanker and bulk carrier operations.

• Hijack/Kidnap and Ransom (K&R)Response Service • lnsurance / research and support

It provides on-board protection teams, which embark ships or yachts in areas of high risk. The teams are comprised of British ex-Royal Marines or of equivalent experience. Once onboard, they use their training and skills to train the crew and increase the defences of the ship. Depending on the threat, insurer approval, peculiarities of jurisdiction and flag state, armed protection is provided during a passage. The company has permission to operate with firearms from Djibouti, Oman, Sri Lanka,

62

with the vessels recovery and crew repatriation.

In response to the increasing threat to assets

MAST provides a comprehensive, integrated

Its key services areas include:

ransom delivery arrangements to assistance

theBaltic Winter 2011 www.thebaltic.com


Corporate viewpoint MAST shipowners as no two hijacks are quite the same. There is always a complex web of different local and commercial interests at play. MAST‘s negotiation department is led by a former P&I Club director and Somali specialist, who have conducted 11 negotiations on behalf of shipowners.

Explosives ordnance disposal in the marine environment MAST also provides unique explosives ordnance survey and disposal service in support of pipeline, dredging and port development work and has specialist teams capable of deploying around the world. There remains a latent threat of unexploded mines and ordnance in numerous areas of the world’s coastal and deep sea oceans. In certain parts of the world during any exploratory sea bed operation, pipeline construction or port development, there is often a need to ensure that the area is free from explosives before com-

force in these unique circumstances is an exten-

mencement of work.

sion of that principle. With careful research and clear operating procedures including Rules of

The solution

Engagement based on a proportionate and rea-

A systematic survey and clearance operation

sonable response to the threat, it is arguable that

is essential prior to the commencement of full

the carriage of firearms represents a pragmatic

operations in areas where contamination is likely.

decision that can sometimes be justified.

Detailed feasibility studies outlining the size

MAST is also a signatory to the International

and scope of the operation will be conducted to

Code of Conduct for Private Security Service

acquire ordnance data on land or underwater.

Providers signed on the 9th November 2010 in

MAST EOD has the necessary combina-

Geneva. This vital step will give confidence to

tion of experience and expertise in the use

the shipping community when deciding on the

of underwater survey equipment to ascertain,

selection of a security partner.

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

Providers (the “Code”) endorse the principles

The Signatory Companies to this International

of the Montreux Document and the aforemen-

Code of Conduct for Private Security Service

tioned “Respect, Protect, Remedy” framework as they apply to PSCs. In so doing, the Signatory

Consultancy and research

Companies commit to the responsible provision

Working in conjunction with our client’s

of Security Services so as to support the rule of

engineers and experts, MAST will ascertain

law, respect the human rights of all persons, and

the level of contamination and likelihood of

protect the interests of their clients.

the presence of ordnance. MAST has clear the search and classification of land and under-

An effective partnership and appropriate response

water ordnance.

It is becoming increasingly clear that private

expertise, understanding and awareness in

After a comprehensive review of each par-

security companies in partnership with the inter-

ticular threat scenario, survey and clearance

national coalition authorities and the shipping

plans will be formulated.

community can ameliorate the effect of the current scourge of Piracy. Solving the problem of

Private security companies and the use of firearms

Piracy, however, remains a political conundrum

There are many valid arguments for and against

medium term evidence of a solution.

for which there does not appear to be any

the carriage of firearms on ships and a number of key factors that must be addressed before a decision is taken, including the legalities and rules of engagement. MAST provides armed security where the law permits and if it is appropriate to the threat. The inherent right of self-defence exists as a principle in most jurisdictions and the use of

www.mast-commercial.com

theBaltic WInter 2011 www.thebaltic.com

63



Corporate viewpoint HADCON

Managing risk ABOUT HADCON

Detection (early warning); Deterrent; Defence

techniques. The training courses include the

HADCON is a leading international business risk

and the Management of an Incident.

CSO, SSO, Anti-Piracy, Team Commanders, Search Techniques and Incident Management

consultancy that specialises exclusively in the Maritime Industry. We are recognised for our

SECURITY SERVICES

ensuring the delegates meet the commercial

expertise and innovative approach to develop

Using the experience, knowledge and the

and operational requirements of the vessel,

our portfolio of services to meet the changing

approach of our people we help clients with:

the port and the various agencies involved

(VES)

in the maritime industry. The courses can be

- provision of armed and unarmed security

conducted in the United Kingdom or overseas

HADCON is supported by a dedicated

teams. The VES has a layered security program

depending on the client requirements.

professional management team that is highly

ensuring the Master, crew and the vessel is

RANDOM DRUG TESTING - at the Owner’s

experienced with professionals from the United

ready and prepared for the transit. Our PCASPs

or Management Company or Captain’s request

Kingdom Special Forces, Royal Marines and

have passed our selection criteria and have met

and as part of their safety/security policy and

specialists within the maritime industry. We

the standards required by MSC Circ 1405 and

duty of care we carry out a random drug test

operate under an ISO 9001 quality management

ICoC. We have robust Rules of Force (ROFs)

on crew or staff ensuring the safety and the

system that ensures control of our processes.

and Standard Operating Procedures (SOPs)

well being of all personnel. The samples taken

that have been proven and reviewed by our

are urine and hair samples, but can be tailored

legal team.

to the client requirements. The samples taken

operational

challenges

within

the

marine

environment.

ACCREDITATION

VESSEL

ESCORT

SERVICE

and

VESSEL DEFENCE SURVEY - we carry

are tested against all the major groups of

accreditation for our core maritime services

out an on-scene survey viewing the vessel

recreational drugs. The hair samples are sent to

with the Maritime Coastguard Agency. Hadcon

specifications and documentation. The survey

an independent laboratory that will test the hair

is a signatory company International Code of

includes a review of the defences in depth, full

sample for usage of drugs over a three month

Conduct (ICoC) and a member with Security

lock down, location of the citadel, lighting and

or longer period of time. The results from the

Association for the Maritime Industry (SAMI) and

communication systems in line with BMP4.

laboratory are delivered in two weeks.

has representation on the SAMI Governance

A report is then produced with enhancement

board. Hadcon has assisted the International

measures.

We

hold

professional

certification

EQUIPMENT PROCUREMENT - as an enhancement to our maritime services we are

Maritime Organisation (IMO) on mission risk

NEW PROJECTS - we believe security

able to source specialist equipment through

analysis of the major ports of contracting

consultancy conducted at the design stage that

our network of reputable companies that can

Governments.

is managed effectively and within the constraints

be designed to the client requirements. The

of the project will safeguard the vessel, port and

equipment ranges from; small target detection

OUR APPROACH

staff from the present day and future threats to

radar systems, integrated technical security

Our methodology is tailored towards delivering

the maritime industry and will ultimately reduce

systems with CCTV including thermal imagery

a robust ‘Layered Security System’ which

long term security costs.

and night vision, access control and intruder

combines physical security with an integration

SHIP / PORT SECURITY PLANS - the Ship

alarm systems, vessel hardening equipment

of technical security systems that stands the

Security Assessments (SSA), Ship Security Plans

including ballistic materials and personnel

ultimate chance of success giving our clients the

(SSP), Port Facility Security Assessments (PFSA)

protection equipment.

confidence in our solutions not only for today but

and Port Facility Security Plans (PFSP) approved

for the future. We follow four basic principles:

by Flag States and Contracting Governments. The

security

plans

encompasses the security operational and emergency

CONTACT US

HADCON

procedures providing the

For further information regarding our services,

A Maritime Leading International Business Risk Consultancy

Ship and Company Security

please contact HADCON, quoting HAD11:

Officers (SSO, CSO), Port

HADCON Limited

Facility

Arena Business Centre

Security

Officer

(PFSO) and staff with the

Holyrood Close

necessary

Poole, Dorset

when

contingencies

managing

various

BH17 7FJ

emergency situations.

Safe - Secure - Reassurance

SECURITY COURSES

Phone: +44 1202 60 60 70

- delivery of the highest

Fax:

quality instruction utilising

Email: enquiries@hadcon.com

a

Web: www.hadcon.com

variety

of

training

theBaltic Winter 2011 www.thebaltic.com

+44 1202 60 60 64

65


Corporate viewpoint Aspida Maritime Security

Tailor-made security A

spida Maritime Security is an experienced

ping and its complexities. They adapt to your

considered an additional layer of defence, not

Private Maritime Security Company (PMSC)

needs without expecting you to adapt to theirs.

a replacement of vigilance and passive Ship

offering a comprehensive range of Maritime

Aspida is in a position to assist you with all

Protection Measures. Personnel are thoroughly

Security and Risk Mitigation Solutions to cus-

your security requirements, reliably providing

vetted, all having solid backgrounds in the

tomers worldwide. Being the first Greek Maritime

a custom-designed solution for your company

Military or Armed Police and clean criminal

Security Company, and set up from the ground

needs. Aspida’s services range from long term

records.

up to work exclusively on Maritime Security,

contracts for multi-vessel armed transits to a

man’s books and STCW 95 certification.Records

Aspida provides flexible, high quality, cost-effi-

single transit of a mega-yacht; from a secu-

of such certificates give confidence to clients

cient and, most importantly tailor-made mari-

rity assessment and training to operational and

that the PCASP have been provided with appro-

time security. Aspida’s services focus on armed

decision support intelligence. At Aspida, you will

priate knowledge and skills through initial and

security teams fulfilling all recent IMO Guidelines

find straightforward, flexible, high quality and

refresher training.

for “the use of armed security guards onboard

cost-efficient security services for your vessels

Aspida’s insurances and policies are robustly

merchant vessels”. Other services range from

transiting high risk areas globally. On-board

worded and clearly include clauses regarding

training and security consultancy to intelligence.

and off-board personnel is alert 24/7, 365 days

the use and carriage of firearms, leaving no grey

Aspida carries a Public Liability and Professional

a year to ensure that your crews, vessels and

areas. Similarly, for the company, it is common

Indemnity insurance up to US$5,000,000.00

cargo reach their destination safely.

sense that lack of proper licenses and docu-

Additionally all employees hold sea-

as well as Personal Accident and Employers

Operating in 12 ports including ,but not lim-

mentation of the equipment and weaponry may

Liability insurance. Aspida is also a signatory of

ited to Muscat, Oman, Suez, Egypt, and Galle,

result in Master arrest and vessel delays. It also

the International Code of Conduct for Private

Sri Lanka, Aspida’s services cover the entire

acknowledges that each Port State has different

Security Companies and one of the first compa-

East Africa High Risk Areas (HRA), incorporat-

restrictions and requirements regarding the use

nies to be accepted in the Security Association

ing the Red Sea, Gulf of Aden, Arabian Sea

of firearms. Aspida has successfully completed

for the Maritime Industry (SAMI).

and Indian Ocean, making Aspida a pioneer

armed missions on vessels of all Flag States

contributor when it comes to tackling piracy, a

permitting armed security on-board.

True to its Greek heritage, and with offices in Greece, Cyprus and the United Kingdom, Aspida has a deep understanding of ship-

contemporary and fast-growing problem.

In conclusion, Aspida offers competitive yet

Employing almost 150 personnel – mainly

realistic prices. They provide suitable insurance,

Greek and British – to ensure success in every

proper and legal weaponry and equipment as

mission, Aspida certifies that the personnel its

well as appropriately trained and vetted person-

properly trained and vetted. Security teams add

nel. Following all procedures and regulations

value to the transit beyond holding firearms.

of Port and Flag states, Aspida, manages to

Vessel hardening, crew training, passage risk

reduce complications, vessel delays, arrests

assessment, supervision of bridge watches are

and liability claims. Meanwhile ensuring always

all part of the security teams’ duties. Arms are

the well-being of the crew and the arrival of the vessel and her cargo to their destination. Aspida does not simply offer armed personel on your vessels, they offer complete solutions capable from a single vessel to your whole fleet.

aspida 66

theBaltic Winter 2011 www.thebaltic.com


Corporate viewpoint Ambrey Risk

Security matters T

he continued surge in piracy attacks related

appropriately licenced weapons can taint a

liability at no less than $5m USD. In terms of

to East and West African piracy have seen

voyage with illegality and presents a considerable

risk management, owners and managers must

a corresponding growth in companies offer-

physical and reputational risk to the vessel’s

also check that providers have well thought out

ing armed maritime security services. Whilst

owners and managers. Well established maritime

and practiced Standard Operating Procedures

the maritime security industry remains largely

security companies will undergo thorough vetting,

as well as legally approved Rules for the Use

unregulated, without a list of approved security

to show their operations are compliant in terms

of Force.

companies, owners and management compa-

of how their weapons, ammunition, body armour

nies responsible for the safety and security of

and night vision goggles are licensed, purchased

experienced in the delivery of armed security

vessels are faced with the difficulty of choosing

and moved.

teams will often enjoy excellent relationships with

compliance, insurances, the quality of person-

WHAT INTERNATIONAL STANDARDS OF PRACTICE SHOULD BE FOLLOWED?

nel, and the company’s operational experience.

With no international code of conduct for maritime

which need to be considered include regulatory

who

are

established

and

insurers, which enable their clients to benefit from

a professional, appropriately licenced company with a proven track record on delivery. Factors

Providers

discounts of up to 50 per cent on premiums.

security providers, the minimum requirement

WHAT QUALIFICATIONS AND TRAINING SHOULD THE PERSONNEL DEMONSTATE?

WHAT SHOULD OWNERS EXPECT IN TERMS OF COMPLIANCE?

should be full implementation of the International

In addition to conducting interviews, personnel

Code of Conduct for Private Security Providers

must have clean records of discharge from their

(ICOC) as well as full compliance with the recent

military service, and clearance from the Criminal

To

security

IMO guidance on the use of armed guards.

Records Bureau. ISPS SSO qualifications should

companies must fully comply with the regulations

This should be demonstrable in the company’s

be considered an absolute minimum training

of the countries in which they operate. Security

Standard Operating Procedures. Respectable

qualification. Ambrey additionally form teams

providers which employ UK nationals must also

companies will have considered how the UN

to include SCTW ’95 qualifications, ENG 1

fully adhere to UK firearms and export legislation,

Principles of Human Rights, UNCLOS, SOLAS

Medical certification and anti-piracy, weapons

irrespective of where the company is registered.

and flag state regulations impact their operations,

and trauma training. Some providers offer their

By way of example of the licences required,

the procedures of their personnel and Rules for

clients cost savings by using teams of varied

Ambrey Risk holds a UK Registered Firearms

the Use of Force.

nationalities, but it is well recognised that the

operate

legally,

all

maritime

gold standard in maritime security is from single

Dealer Certificate that allows the purchase of

WHAT EXPERIENCE AND CAPABILITY SHOULD PROVIDERS HAVE?

nationality, experienced teams from reputable

and an Open Individual Export Trade Control

Reliability is key and as part of this a security

maintain high standards of safety. This training

Licence (OITCL) to allow them to move this

company must demonstrate that they have

should cover Standard Operating Procedures,

equipment between the ports of embarkation

excellent logistics and operational management

Rules for the Use of Force, and Weapons

and disembarkation.

processes, including a particularly strong

Handling Procedures as a minimum.

weapons in the UK, Single Individual Export Licences (SIELs) to export weapons, body armour and night vision goggles from the UK,

Using a low-budget service provider without

Armed Forces such as the British Military. Thorough training of personnel is essential to

relationship with their shipping agents. Good account management is vital to respond to the pressures of commercial shipping. Less well established security providers will struggle to provide their clients

Ambrey Risk is a leading security services

with relevant information and

provider working with a number of large owners

advice gained from their operating

and ship management companies, in addition

experience and will not have the

to smaller owners who rarely transit the region.

flexibility to respond quickly to

For an informal discussion on the content of this

requests.

article, please contact a member of our Account Management team.

WHAT ARE THE INSURANCE IMPLICATIONS?

Ambrey Risk Ltd, Berkeley Square House, Berkeley Square. London, W1J 6BD

Contractually, knock for knock liability

clauses

are

industry

T: +44 (0) 203 503 0330 E: enquiries@ambreyrisk.com

standard and companies should be able to provide evidence of their insurance, with limits of

theBaltic Winter 2011 www.thebaltic.com

67


Corporate viewpoint Hart Security Limited

Safe and sound W

ith approximately 80% of traded goods

demand for reliable security

being transported by sea, maritime

measures in areas that are

transportation is the backbone of international

vital to keeping the global

trade. Because the sea represents the main

supply chain flowing safely.

artery for the global supply chain, it is clear that

For example, the formation of the Combined Task Force

it needs to be protected.

(CTF) 150, a multinational anti-piracy naval task force that has been operating off the Horn of Africa since 2002, has

not

alleviated

the

escalation of piracy in this crucial shipping zone. Thus,

private

security

companies have developed and thrived, providing security packages for clients and operating with a lower profile than most government forces. With over a decade of experience, Hart Security is an industry leader and an internationally

recognised

provider

specialised

of

maritime security services. Through

our

global

network of 16 offices, we offer a comprehensive range Given its impact on the globalised economy,

of security services, including

it can be argued that maritime security is

security teams, sea marshals,

inherently

the regulatory compliance

the

responsibility

of

national

governments and international bodies. However,

programmes (BMP 4), training for company and

Hart provides professional, cost-effective and

the demand (particularly in high risk areas) can

ship security officers, International Ship and Port

commercially viable solutions to meet our clients

often outstrip resources. The scope of challenges

Facility Security (ISPS) audits, monitoring

maritime security needs. By understanding the

presented by the combination of terrorist

through a 24/7 maritime response centre and

ebb and flow of the maritime market, we

activities, organised crime and piracy has meant

security consultancy.

understand the commercial realities that shape

that governments have been unable to meet the

Our

and

our clients’ requirements. Hart offers the

onboard security services provide

maritime market responsible and legal solutions

protection for ships and their

to the growing problem of piracy. Safeguarding

crews. Hart has trained over

your reputation is critical, which is why planning

2,000 ship, company and port

and preparation with experienced long-standing

facility

security companies is imperative to success.

renowned

anti-piracy

conducted

security more

escort

officers, than

400

assessments and completed over 250 missions in high risk areas (almost half of which have been in the Gulf of Aden) with just 5%

68

involving confrontations and all of

Tom Naude

which were successfully repelled

Tel: +971 566966097

without the loss of lives or assets.

TNaude@hartsecurity.com

theBaltic Winter 2011 www.thebaltic.com


Corporate viewpoint MIRIS International Ltd

Total security M

Scoping and procedures

security

guidance. Based on the three core pillars of

to

the

readiness, response and recovery, Trident

MIRIS undertake meticulous planning and

requirements of shipowners and shipping agents

courses equip maritime professionals with the

preparation for all tasks, ensuring that the

operating in the high risk piracy area of the Indian

important knowledge and skills to understand

delivery of services meets individual client

Ocean. The company has established a

the requirements to develop readiness for

requirements. All operations are supported by

reputation for attention to detail and a

operations in high risk waters; to mitigate the

task specific standard operating procedures,

personalised service, operating in full compliance

likelihood of an adverse event; and to formulate

which are reviewed regularly by MIRIS Operations

with UK and overseas applicable laws and

appropriate responses and recovery activities.

to reflect the developing threat and feedback

IRIS

delivers

consultancy

key

maritime

services

tailored

Trident training is widely recognised and

licensing requirements.

from deployed operatives and the client.

MIRIS is fully committed to delivering the

endorsed by private maritime security companies,

highest professional standards of service,

shipowners and operators. The Trident Maritime

Compliance

and adopting established best management

Security Operator course is a Buckinghamshire

MIRIS operates in accordance with local

practices, captured in bespoke company

New University-accredited NQF Level 4 short

regulatory requirements throughout the Indian

standard operating procedures.

course and has been vetted by the International

Ocean. All firearms and related equipment

Association of Maritime Security Professionals.

transfers are subject to the company’s UK Open

Management

No other training provider can offer this level

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MIRIS is characterised by a strong management

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and operation of firearms are governed by

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secure firearms and ammunition storage and embarkation, firearms handling and testing, rules

maritime security services, the team has experience in the following areas: UK special

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for the use of force and post incident reporting.

forces maritime counter terrorism and law

MIRIS maritime security consultants deliver

Comprehensive

enforcement operations, management of Royal

comprehensive

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professional and general liabilities, and provide

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requirements, including vessel security reviews

wide-ranging personal accident and injury cover

intelligence operations, plus the regulatory

aimed at piracy protection and maritime security,

for all deployed operatives.

expertise of an international lawyer.

and identifying requirements for protective

solutions

to

meet

insurance

policies

cover

measures. Management and crew training

Client focus

Consultants

sessions include piracy and maritime security

MIRIS is committed to developing long term

MIRIS undertakes comprehensive recruitment,

awareness briefings, hostile environment and

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vetting and training of its consultants, and is

incident

evacuation

Following initial introductions, all engagements

committed to building strong relationships with

planning and scenario training. Passage planning

are scoped and detailed in a services agreement,

known and proven operatives with the highest

support focuses on interpretation of intelligence

and are subject to continual review. Operational

credentials. All potential recruits are invited to a

reports, preparing passage risk and threat

services are supported by MIRIS Operations,

company induction day, covering company

assessments, and transit planning.

who maintain regular contact with the client

management

training,

providing intelligence and situation updates, with

ethos and approach to maritime security operations, and outlining key legal, financial and

Operational services

the ability to adapt the provision of services as

commercial considerations for operatives.

MIRIS maritime security operatives (MSOs)

situations develop. Client feedback is critical to

provide ship protection measures, preparing

MIRIS service delivery, and allows MIRIS to

Training

vessels for transit in high risk areas, implementing

continually improve the scope of service to meet

MIRIS operatives undertake a specialist maritime

physical protection measures, and testing and

client requirements.

security operative course delivered in conjunction

adapting existing ship emergency response

with Trident at the MIRIS headquarters in

systems. MSOs liaise closely with the master of

Liverpool. Advanced training is provided to

the vessel to ensure that minimal disruption and

selected team leaders.

maximum protection are achieved, monitoring

Trident is also able to offer a series of courses

radar and providing permanent observation in

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order to maintain a high alert state. MIRIS is

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licensed to deploy armed MSOs, and works

of

closely with the client and the master of the

delivering training that incorporates recent

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For further information please visit our website at

changes in international security regulation and

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www.miris-int.com.

Trident

recognises

the

importance

theBaltic Winter 2011 www.thebaltic.com

69


Maritime safety

Putting safety first Lifeboat hooks, lifting equipment and mooring accidents are just some of the issues facing shipowners

A

lot of shipowners have been con-

the due dates? “We face a few issues and it is

cerned about the safety of lifeboat

both a big challenge and a big investment for

hooks for some time. They felt there

us,” says Bradley. “We have to test hooks in

were too many accidents during life-

service by 1 July 2013, and we have to have

boat drills. Now, after a long period of delib-

ready new systems for new boats, or boats

eration, IMO has acted with new rules and

requiring replacement hooks, by July 2014.

guidelines. Those rules pose a challenge for

We then face a window for replacements to

all owners, because they apply new standards

older boats and non-compliant systems which

retrospectively to existing equipment.

depends on dry-dock dates and could run until 2019.

The IMO has a new name for lifeboat hooks and has issued clear guidelines on how they

“So we have an eight year window ahead of

should be designed and operate. Unusually,

us, during which demand for hooks will come

the IMO has backdated the new rules to

in waves. We foresee that some owners will

cover existing hooks and these will have to

want to get future proof hooks as soon as pos-

be replaced or upgraded if they don’t meet the

sible and we already meet quite a high level of

new standards.

demand for that. Then there will be owners who will leave things until the last minute.”

Shipowners face choices. They need to get all the lifeboat hooks on all their vessels examined, they need to replace ones that don’t meet the new standards and they need to decide

Mooring and lifting accidents

which new standards they will opt for. They have

Accidents to crew members during the moor-

some time in which to do this, but if they leave it

ing process has long been a major concern to

too long they risk running out of options if there

David Bradley

is a backlog of refits.

shipowners and insurers alike. Now

the

European

Harbour

Masters’

added advisory requirement over and above the

Committee has released a DVD entitled The

at Schat-Harding Service, says, “IMO has now

international regulations as agreed by IMO. So

missing link: improving the mooring process, a

issued clear guidelines for lifeboat release and

owners will have another choice to make, basic

training video which it is hoped will promote best

retrieval systems under MSC.1/Circ.1392. They

regulation or industry recommended standard?

practice and reduce the number of accidents.

David Bradley, vice president of operations

will become mandatory under SOLAS and will

Says Bradley: “As the leading manufacturer,

According to the UK P&I Club, who has

apply to new boats from 1 July 2014. There are

Schat-Harding recognises that with two different

long campaigned on this issue, the new DVD

also clear tests to be applied to existing hooks,

standards globally we will have to be ready to

is welcome.

and these will have to be upgraded at the first

meet demand for both. Therefore we will design

“The UK Club has for a long time been very

dry-dock after 1 July 2014 if they do not meet

an optional SSS (training lock) for our SeaCure

concerned about the number and severity of

the set standards. IMO’s guidelines do not call

LHR hook range, and we will then be able to

accidents which occur when ships are under

for a Secondary Safety System (such as a pin)

supply new hooks with or without the SSS, at

tow or are engaged in mooring alongside. Even

or a Fall Prevention Device for new boat or

the request of the owner or yard. We have to

fatalities to crew and to shoreside mooring

upgraded hooks.”

supply what regulations demand and what our

gangs are not rare occurrences, while far too

customers want.”

many incidents result in injuries that will end a

That is clear, but separately the shipping industry will be issuing guidelines that recom-

Should shipowners be worrying about the

mend that owners should only fit hooks with

ability of lifeboat and hook system manufacturers

Despite much publicity regarding the risks,

Secondary Safety Systems. This SSS will be an

to test and replace the hooks in service before

the do’s and the don’ts when working as

70

theBaltic Winter 2011 www.thebaltic.com

seafarer’s or stevedore’s career.”


Maritime safety ally not always covered by the class

SeaCure hook installed as replacement

system – it is optional,” Lumbers says, “so there needs to be a lot more attention paid to maintenance of the crane on board”. Annual mally

a

checks requirement

are of

norflag

states, but “nobody is looking at cranes in a detailed way, and this is a big issue,” he says. A lifting applicance he adds, has no redundancy and if a crane goes, “it goes with a hell of a bang”. At the moment, the issue is not covered by the SOLAS convention although a paper is due to be submitted to the next DE subcommittee.

Safe boarding Although many may consider the issue of boarding and leaving a vessel as straightforward, it can be dangerous and Videotel’s new training programme, Boarding and leaving a vessel at sea, has been designed to tackle this issue and address the need for better working practices in this area. “Seafarers often have to deal with hazardous situations before they even get on to a vessel,” says Nigel Cleave, CEO of Videotel part of a mooring party, the Club says the claims

“These are key safety issues,” says Townsend.

still keep coming in, often accompanied by

“This pocket guide has been designed so that it

”Not only is the actual boarding itself

horrific photographs.

is handy to use, inexpensive to produce and will

sometimes difficult and hazardous, but the

be free to the industry. We highly recommend

equipment – from the launch itself to the per-

its use.”

sonal protective equipment supplied – may not

Although accidents involving ships’ lifting appliances are rare, they are nonetheless a

Marine International.

The rocking test is one of the most critical

meet required standards. This is especially hard

survey items, used to measure the wear of the

to control when contractors and third parties

Classification society Lloyd’s Register, in con-

slew bearing and related structures. Its excess

are involved.”

junction with the UK Club and manufacturers

wear combined with bolt failure can lead to a

MacGregor and Liebherr, has published a new

deck crane toppling over.

source of concern as when a lifting appliance fails the consequences can be fatal.

This programme has been designed in conjunction with BG LNG Services and is intended

guide to help shipowners and operators understand

“Personal injuries to crews from breaking

to help individuals board ships at sea in a

the importance of professional maintenance and

wires or a lack of maintenance on stores and

safe manner. It raises contractor awareness of

survey preparation for lifting appliances.

cargo cranes hit P&I Clubs the hardest because

safety standards and other issues and ensures a

“Lifting appliances need to be thoroughly

personal liability claims can be very costly,” says

more consistent quality of service among third-

examined and it is important that operators

Karl Lumbers, the UK P&I Club’s loss prevention

party suppliers.

understand the seriousness and consequences

manager. “The guide is a very good way to help

of failure, as well as what they need to do to sup-

address this.”

Addressing a range of maritime safety regulations, the programme is especially valuable

port the safety framework,” Joanna Townsend,

Lumbers acknowledges that while crane

for those joining a ship for the first time, but is

fleet services manager for Lloyd’s Register,

accidents are not frequent, “the consequences

targeted at all maritime professionals needing to

explains. “Poor preparation before surveys is

can be horrific”

board or alight from a vessel at sea.

a common problem among operators. Other

Crane accidents can occur for many rea-

Videotel also recently produced new mate-

issues include a lack of knowledge about rock-

sons, including corrosion, insufficient training, or

rial to advise on best practice when entering

ing tests, difficulties in obtaining maintenance

crew members losing their balance and falling

enclosed spaces. This remains a major problem

records and problems accessing the key areas

from the crane, for example .

despite all the warnings and advice put out by

that need to be surveyed.”

“People tend to forget cranes are gener-

theBaltic Winter 2011 www.thebaltic.com

owners and insurers alike.

71


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UAE

UAE ports sector on road to recovery Plenty of investment is taking place on port and infrastructure projects in the Emirates. Clive Woodbridge reports

C

argo handling activity at ports in the

quarter delivering excellent growth, as Dubai

the end of 2012. The idea is that this investment,

United Arab Emirates (UAE) con-

continues to strengthen its position as a global

which will boost the port’s annual capacity from

tinues to recover strongly this year,

trading hub for the fast growing economies of

14 million teu to 15 million teu, will allow Jebel Ali

despite concerns over the health of

the Middle East, India and Africa.”

to handle six 15,000 teu vessels simultaneously.

the shipping industry globally. Container volumes

Jebel Ali is being called up on to handle a

The second biggest container hub in the UAE

moving through the country’s ports in particular

greater number of very large container ships

is Khorfakkan, which is operated by Gulftainer

are increasing at a much more heathy rate,

and, to ensure it can fully accommodate this

under an agreement with the Sharjah Ports

reflecting both a steady improvement in the local

trend, DP World has recently announced that

Authority. The operator indicates that volumes

economy and strong demand in other Middle

it will build a 400m extension to its Terminal 2

were running at around 10% higher than in 2010

East Gulf countries, such as Saudi Arabia, Qatar,

facility, with work due to be completed towards

over the first nine months of the year. Khorfakkan

Bahrain and Kuwait, which are served through the UAE hubs. The generally buoyant trade picture is encouraging continued investment in port infrastructure and equipment. A number of projects are well underway, and others have been announced in recent times, as UAE ports look to meet changing shipping company requirements as well as longer term demand for port capacity in the region. Dubai’s Jebel Ali port is the dominant container hub in the Middle East and has experienced a strong upswing in volume this year. The latest figures released by DP World show that the port handled around 9.5 million teu in the first 9 months of 2011, 11% up on the same period of 2010. Jebel Ali consequently seems well on its way to a record-breaking full year throughput in excess of 12 million teu. As Sultan Ahmed Bin Sulayem, DP World chairman, reflected in announcing the results: ”The UAE region has continued to do well, with the third

KCT

theBaltic Winter 2011 www.thebaltic.com

73


RAS AL KHAIMAH, UNITED ARAB EMIRATES

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RAK Ports - driving the economic development of the Northern Emirates. For more information contact: Group General Manager RAK Ports. E: gm@rakports.ae

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UAE Container Terminal (KCT) has benefitted from picking up some significant new business from CMA CGM in recent months, the French carrier having transferred some of its regional transhipment work from Salalah in Oman. Gulftainer also operates the Sharjah Container Terminal (SCT), where the rate of growth in container throughput over the first three quarters of this year is reported to have been even higher than that seen at KCT. The ability of SCT to handle larger container vessels will be enhanced by a berth renovation and dredging programme which will increase the available draft to around 12.5m, when it is completed in early 2012. This should provide the basis for another strong growth performance next year. Jebel Ali and, to a certain extent Khorfakkan as well, face a tough new challenger, in the shape of the new Khalifa Port which is being built by the Abu Dhabi Ports Company (ADPC)

Jebel Ali Port

at Taweelah, just 30km from the Dubai hub. Work is well underway on building phase one

initial storage capacity of 250,000 tonnes. The

relatively heavily to make sure that the country

of the new port, which is designed to handle

purpose of the project is not only to provide

has the port infrastructure needed to take

two million teu of containers and 12 million tons

sufficient grain reserves for the UAE but to

advantage of available opportunities and to

of general cargo annually. The container and

provide an important grain transfer hub for other

sustain this role in the face of competition from

multipurpose part of the port is all set to be

countries in the Persian Gulf.

other locations.

operational by the end of 2012 and ADPC will

The strategic location of Fujairah was critical

be looking to attract some major container lines

in the decision to establish the grain reserves in

into its deepwater, and highly automated facility.

the eastern Emirate. Fujairah is located outside

The intention is that cargo operations

the Gulf and the Strait of Hormuz, which has

Newbuilding projects highlight shipping ambition

currently at the existing Mina Zayed port in

in the past been blocked in times of conflict,

Shipping companies based in the UAE are

Abu Dhabi will be transferred to the new port

affecting the flow of trade.

undertaking some important fleet development

in the course of 2013. Further reflecting the

The port of Fujairah is also a significant

initiatives at the present time. Most notably

buoyancy of the UAE market, and in particular

gateway for liquid bulk traffic, a role that will

perhaps, the United Arab Shipping Company

the investments taking place in the emirate of

be further strengthened with the imminent

(UASC) – which has its operational HQ in

Abu Dhabi, container volumes moving through

completion of a pipeline linking Abu Dhabi and

Dubai – will next year take delivery of eight new

Mina Zayed this year have increased at an

Fujairah, again with the strategic aim of providing

13,500teu capacity containerships from South

extremely rapid rate. During the first seven

an outlet outside of the straits of Hormuz. A

Korean yard Samsung Heavy Industries, having

months of this year, the port handled 408,000

second oil terminal at the port was opened in

taken on the first in this A13 class series, the

teu, around 65% more than in the equivalent

mid-2010, and this has an 18m draft and a 25

Umm Salal, earlier this year. The remaining

months of 2010. The new port will clearly have

million tons a year capacity. Plans to build further

sisterships will enter service during the first four

a healthy base flow to begin with, of probably

oil berths to the north of the port are being

months of next year.

close to 750,000 teu annually.

considered, the port says.

Umm Salal is initially being deployed within

The UAE has other significant port operations

The government of Ras al Khaimah earlier

the new AEC8 service that UASC launched in

in Fujairah and Ras al Khaimah and in both

this year launched the RAK Maritime City port

March this year, together with China Shipping

locations significant investments are being made

and free zone adjacent to Saqr port, one of

Container Line, CMA CGM and Evergreen, and

to boost capacity. Fujairah handles substantial

the UAE’s leading dry bulk ports. The project,

which connects ports in China and Malaysia with

volumes of rock aggregates, which are shipped

which has involved an investment of around

Le Havre, Rotterdam, Hamburg and Zeebrugge

for construction projects mainly in the Gulf

£100 million, covers an area of 800 hectares and

in northern Europe. When the full fleet of nine

region. To keep pace with demand, the port of

includes a new dedicated harbour and 5000m of

A13 vessels has been delivered, however, UASC

Fujairah has this year commissioned a new bulk

quay wall, with zones set aside for general cargo

will use its latest newbuildings to establish a

loader that has double the handling rate of the

handling, shipbuilding and repair and other

standalone service covering the Europe-Asia

existing loader.

activities. The port authority is now marketing

trades, with direct calls in the Middle East, the

the Maritime City to prospective tenants, offering

company’s core market.

Other projects include the development of grain silos, with associated loading and

lease agreements of up to 25 years. With

all

the

turmoil

surrounding

UASC’s

sister

company,

United

Arab

the

Chemical Carriers (UACC) has six MR type

be operational by early 2012. This investment is

Arab Spring, the UAE’s position has a safe

45,000 dwt chemical tankers on order at the

part of the UAE’s Strategic Grain Reserve project

and stable centre for regional trade has been

Shina Shipyard in South Korea and the naming

and the first phase involves the establishment

enhanced. The governments of the respective

ceremonies for the first two in the series, UACC

of 14 wheat silos and six rice silos with an

emirates are taking the opportunity to invest

Masafi and UACC Messila took place this

theBaltic Winter 2011 www.thebaltic.com

75

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UAE Delivery of the Liwa-V marks the end of an intense period of deliveries that started with the bulk carrier Shah, handed over in October 2010. According to Ali Obaid Al-Yabhouni, general manager, “This major expansion of our fleet reflects the growing strategic importance attached by ADNOC to owning and operating its own ships. All our vessels have been employed from the day they were delivered.” Also included in the newbuilding programme completed in 2010-11 were a number of 57,000 dwt bulkers, 73,000 dwt tankers and two 1100teu containerships. The ADNATCO-NGSCO fleet now comprises a total 30 vessels, including eight LNG carriers. UMM Salal UASC

Also based in Abu Dhabi, Eships does not have any newbuild projects at the moment. It

September. The remaining four are expected to

Emarat Maritime, part of the Sharaf group,

has, though, added a 2005-built 46,000 dwt

join the UACC fleet, which currently comprises a

and Gulf Energy Maritime (GEM) are among

MR products tanker to its fleet this year and

total of 12 MR and Panamax LR1 type tankers,

other Dubai-headquartered companies with

has also chartered in a similar vessel to further

in the first half of 2012.

newbuilding programmes in hand. Emarat

increase its capabilities in the MR products

Another Dubai-based company that is active

has four 60,000 dwt bulk carriers which are

tank segment. Eships now has six modern MR

in the newbuilding market is Gulf Navigation

contracted with the Oshima yard in Japan, while

type tankers; two LPG carriers and nine small

Holding, which owns and operates a fleet of 12

GEM has two 115,000 dwt Aframax tankers on

product and chemical tankers. In addition Eships

crude oil and chemical tankers, totalling around

order for delivery in 2012. Emarat has, though,

is at present chartering up to eight panamax

1.6 million dwt. During 2011 the company has

also been selling some of its existing tonnage,

and handymax bulkers to fulfill various bulk

purchased, and chartered out, a 300,000dwt

to trim the fleet in advance of the arrival of

transport commitments, including new contracts

VLCC, Gulf Eyadah, and has also placed orders

these new ships. Disposals this year include the

of affreightment for shipping alumina and iron ore

to build two new 320,000 dwt VLCCs which will

sale of the Dubai Energy and Dubai Jewel, two

secured in the past year.

join the fleet in 2012 and 2013. The company

supramax bulkers, reportedly to the Pakistan

says discussions are underway with regard to

National Shipping Company.

Chief financial officer Richard Coxall echoes the sentiments of many regional players when

Shipping companies based in Abu Dhabi

he says: “While these are challenging times in

have also been actively investing in new tonnage.

most of the shipping markets, Eships is well

Gulf Navigation’s five year strategic plan

In October this year ADNATCO, which together

positioned to take advantage of opportunities

calls for the expansion of the VLCC fleet to nine

with NGSCO makes up the shipping arm of

in the MENA region, which has been resilient

vessels, the chemical tanker fleet to 12 ships

the ADNOC group, took delivery of its fifteenth

to economic pressures and where trade levels

and the development of a fleet of Aframax and

newbuild vessel, Liwa-V, a 105,000 dwt oil

continue to increase.

offshore support vessels. The company has this

tanker built by HHI of South Korea. The Liwa-V

year, however, withdrawn from the OBO market,

and the sister Abu Dhabi III, delivered in July,

seabourne trade growth and our role within

selling its six strong fleet, which was suffering

are the largest new tankers yet acquired for the

that growth.”

significant losses.

ADNATCO-NGSCO operation.

possible orders for two more VLCC newbuilds at a Chinese yard.

“We

remain

optimistic

about

regional

Eships Dgon

theBaltic Winter 2011 www.thebaltic.com

77


Corporate viewpoint Port of Gibraltar

Gibraltar Port – one stop shop T

he Port of Gibraltar is seeking to expand its

possible. We are constantly seeking to upgrade

and Bunkers Gibraltar to offer extremely

bunkering capacity with a range of innovative

our facilities and services and are currently in the

competitive prices. Gibraltar enjoys a unique

proposals currently under consideration. Already

middle of an Environmental Impact Assessment

tax-free status within the European Union and

the busiest bunkering port in the Mediterranean,

(EIA) on whether bunkering should be allowed to

charges low ports dues. Its four bunkering

handling 4.3m tonnes of bunkers in 2010,

take place on the Eastern side of Gibraltar. Once

companies can supply all grades of marine fuel

the port is seeking to further capitalise on its

the EIA has been completed, it will be opened to

from 30 cSt to 380 cSt and there are constant

strategic location by potentially opening up its

public debate, after which the Government will

quality checks by each company. Bunkers are

eastern anchorage as well as examining propos-

take a decision on the best way forward.”

normally delivered by barge while the vessel is at anchor in Gibraltar Bay, but they can also be

als to move floating storage facilities out of the

With its strategic location on the edge of one

harbour. The move comes on top of the port’s

of the world’s busiest shipping routes - some

recent successful implementation of a new VTS

110,000 vessels transit the Strait of Gibraltar

However, whilst around three quarters of

system which enables Gibraltar to manage the

each year - the Port of Gibraltar has always

all Gibraltar port calls are for bunkers. the port

vessels entering its port efficiently by warning

benefited from the geographical advantages

offers far more than a convenient fuelling point

them 24 hours in advance of any delays and

afforded by its natural deepwater bay setting.

for ships. Tony Davis is keen to emphasise that

significantly cutting congestion.

Just over 11,000 vessels called at the port in

it is a “one stop shop for shipping.” He points

2010.

out that Gibraltar, whose laws are based on the

Gibraltar’s Director of Maritime Affairs Tony

delivered at berth in the harbour.

Davis explains: “We are a port which is limited

Not only is it conveniently located, but its

UK legal system, is a very prominent place for

in size and our focus has to be on dealing

high turnover of vessels enables its bunker

ship arrests and home to a huge legal fraternity.

with the ships which call here as efficiently as

suppliers, Vemaoil, Cepsa, Aegean Bunkering

Its ship repair facilities, operated by Gibdock are

78

theBaltic Winter 2011 www.thebaltic.com


Corporate viewpoint Port of Gibraltar currently busier than ever before. The climate,

Tony Davis cites the example of the swift

with mild winters and warm dry summers, is

changing of legislation to ensure that cruise

North Mole, P O Box 1179

ideal for year round repairs and thanks to its

ships can open their casinos and retail facilities

Gibraltar

work force’s many years of experience, the

after 1800 when in port.

Tel: +350 200 46254

quality of workmanship and expertise is second to none.

“Speaking to cruise ship operators this March at the Cruise Shipping event in Miami this year,

Gibraltar Port Authority

Fax: +350 200 51513 Email: gpaenquiries@portofgibraltar.gi

Ships transiting the Strait of Gibraltar, but not

we were struck by the number of companies

wishing to come off charter or leave international

who told us of the financial implications of

Ministry for Enterprise, Development,

waters can take advantage of the significant

shutting down many of their commercial

Technology and Transport, 771 Europort

off-port limit operations undertaken by local

on-board operations when in port and how

Gibraltar

companies. These services include supplying

they were forced to leave Gibraltar at around

Tel: +350 200 52052

charts, stores, spares etc… and even a change

1700 and circle in the Mediterranean before

Fax: +350 200 47677

of crew while still offshore, avoiding the time

calling at Cadiz or Malaga the following morning.

Email: info@medt@gibraltar.gov.gi

and expense of putting into port. Tugs and

Parliament passed the relevant legislation in

other vessels can bring the required stores and

August!” Tony Davis believes that it is this kind

Gibraltar Maritime Administration

personnel out from Gibraltar and effect a transfer

of attention to detail and swift resolution of a

Watergate House, 2/8 Casemates Square

while the ship is still on the high seas.

problem which has enabled Gibraltar to stay

Gibraltar

ahead of the pack.

Tel: +350 200 46861

Gibraltar is a popular cruise ship destination with a record 330,000 passengers from 190

“We can never afford to be complacent

calls, visiting last year. “We are currently in

and are always on the lookout for further

the early planning stages of creating a new

opportunities.”

Fax: +350 47770 Email: maritime.registry@gibraltar.gov.gi

dedicated cruise berth and also refurbishing

Gibraltar Tourist Board

the cruise terminal opened in 1997,” says Tony

Duke of Kent House, Cathedral Square

Davis.

Gibraltar Tel: +350 200 74950

With the opening of a new £55m air terminal, the number of flights to and from Gibraltar looks

Fax: +350 74943

set to swell significantly, further boosting the

Email: information@tourism.gov.gi

attraction of the peninsula for crew changes. Gibraltar Chamber of Commerce

The small size of Gibraltar and the very close connections between the Port Authority,

Watergate House

Maritime Administration and government work

2/6 Casemates Square

hugely in its favour when it comes to ensuring

Gibraltar

that legislation and working practices support

Tel: +350 78376

the needs of shipowners and operators using

Fax: +350 200 78403

the port.

Email: info@gibraltarchamberofcommerce.com

theBaltic Winter 2011 www.thebaltic.com

79


Maritime cluster

Rock resilience Diversification has been a key element in Gibraltar as the Rock hopes that a new 10% corporate tax rate will encourage investors, while it continues to build up the shipping registry and attract ship repair and offshore work

L

ike many other sectors, Gibraltar ship-

docked the 3,000gt offshore survey vessel Boa

Terminal refurbishment

yard Gibdock has been targeting the

Galatea in September, with work including wet

The Gibraltar government is keen to encourage

offshore industry, notably clients in the

blasting and service work to the ship’s aszimuth-

cruise business to the Rock and announced in

jack-up and semi-submersible segment,

ing thrusters. Refitting work for the former Royal

October that it planned to start a major refur-

and October saw the arrival of the semi-sub-

Navy vessel Dunster for use as a medical ship for

bishment and extension of the existing cruise

mersible Etesco Millennium, the first rig into the

the Vine Trust is also underway.

terminal so that it can handle larger ships and

yard since 1998.

Gibdock chief executive Joe Corvelli has

more passengers.

Gibdock will be carrying out remedial work

said that despite the uncertain global economic

The first phase of the project will include

on the rig and also conducting a survey to deter-

position, the sectors that the yard has chosen to

demolition of the ex-Ice Box building and

mine whether further work is needed as the rig

focus on are “showing resilience” and good cus-

a 800m2 extension to the existing building.

has been in continuous operation offshore for a

tomer relationships should see the yard through

According to deputy chief minister Joe Holliday:

five-year period.

the next year in “reasonably good shape”.

“The cruise terminal is a major entry point for

The yard’s location makes it ideal for han-

The yard has also been carrying out repair

visitors to Gibraltar and has handled around

dling rig repairs, whether they are from the

and conversion work for the cruise industry,

2,500 cruise ship calls and three million passen-

Mediterranean, Black Sea or West Africa. It is

including Pullmantur and Louis Cruises. Location

gers since it opened on 17 July 1997”.

also seeking more work from the offshore survey

is once again an important factor for cruise

However, the extension is essential in view of

vessel segments and cites among its customers

companies in the Mediterranean, which have

the increasing size of cruise ships, with average

Solstad and Boa Offshore.Boa Offshore dry-

seen locally based repair facilities closing down.

numbers of passengers rising 85% between 1996 and 2012. “This means that over a 15-year period, ships have effectively doubled in size and the cruise terminal is being refurbished and extended to be able to handle these vessels more efficiently and provide a more contemporary look and feel”. The government has been lobbying cruise lines to encourage them to consider Gibraltar for “partial turnarounds”, the government said.

List of flags of low risk The Gibraltar Ship Registry has received a boost with the news that it has now achieved a place on the list of flags of low risk by the Paris Memorandum of Understanding on Port State Control. The Gibraltar registry was audited earlier in the year. There was a 4% increase in the commercial fleet registered in Gibraltar last year and new additions were relatively young in age. New legislation has also enabled 24m-plus yachts to be registered in Gibraltar, which should prove an attractive proposition for the Rock if it targets the Rock of Gibraltar

80

source: Gibraltar government

theBaltic Winter 2011 www.thebaltic.com

superyacht market.


Maritime cluster Borders and Coastguard change The government has also been making changes to the Borders and Coastguard Agency, which will be responsible for a number of tasks including immigration control at points of entry and security controls at the cruise terminal and air terminal. The body will also have responsibility for pollution response and search and rescue operations. This should streamline activities, which have in the past been hampered by political interventions in salvage operations or paralysis during government elections. The Borders and Coastguard Agency takes over responsibility for those functions previously carried out by private concern Security and Immigration Limited, and Andrew Bonfante has been appointed as chief executive of the agency.

Fire findings released One of the highest profile incidents in Gibraltar this year has been the fire and explosion in May at the Nature Port reception facilities. The findings of an investigation carried out by Capita Symonds on behalf of the government have just been released. The investigation looked into the causes of the incident, as well as the management systems and health and safety procedures of the plant operators and the condition of tanks and plant. Two welders were injured in the blast, as well as 12 passengers on board the Royal Caribbean ship Independence of the Seas. According to the government: “The cause of the explosion has been attributed to the holes in the roof of the tanks that allowed flammable vapour to escape from the tank and into the atmosphere. The welder, who had been welding a piece to the guardrail at one of the two main tanks struck an arc when he began welding and, in the opinion of the investigator, that arc caused the escaping vapour to ignite.” Findings of the investigation include failure to

Local attraction

source: Gibraltar government

manage contractors when undertaking welding operations, failure to repair corrosion perforation

assessment was underway. The government

by government statements on any commercial

on tanks, departures from a “sound health and

has said commercial activity within the southern

activity taking place within the southern waters

safety management system expected of any

waters of Gibraltar’s special area of conservation

of the Gibraltar Special Area of Conservation

organisation operating a potentially hazardous

must comply with the Habitats Directive and if

(SAC) an EU protected area.

plant such as this” and lack of transparency in

“any significant impact is identified during the

vetting procedures. Nature Port’s licence was

Environmental Impact Assessment”.

The government says that if any significant impact on the SAC is identified, a full “appropri-

suspended following the publication of the report

The bunkering issue has been a topic for

ate assessment” will be carried out. According

and is not due to be lifted until a final decision

debate in Gibraltar, not least because of election

to deputy chief minister Joe Holliday: “While it is

has been taken on the licence and whether defi-

campaigning. On one hand, the intention is to

understandable for environmental groups to be

ciencies have to be remedied.

provide refuelling during limited time frames, but

concerned about any impact that bunkering on

on the other, the proposals have to take into

the east side may have on the marine SAC, they

Environmental impact

account opposition from environmental groups.

may rest assured that this will not be allowed

Bunkering activities on the east side of Gibraltar

Competition from other regional ports has made

to proceed until the government has fully con-

have also been the focus of environmental

the development of Gibraltar a prime initiative if

sidered the results of the EIA. The government

activity, following a government decision that

the Rock wants to stay in contention with local

will publish the EIA when completed and will

the Gibraltar Port Authority was considering

rivals, notably Spanish ports.

encourage a public debate on this issue. The

allowing bunkering and an environmental impact

Conservationists have not been reassured

theBaltic Winter 2011 www.thebaltic.com

government decision will be taken thereafter”.

81


PORT OF The Port of Gibraltar offers: A prime location at the southern tip of Europe

READY AND WAITING

Safe anchorage High quality bunkers at competitive prices State-of-the-art cruise facilities Proximity to International Airport Duty-Free provisions A wide range of maritime services

Gibraltar Port Authority North Mole, Gibraltar Tel: +350 20046254 Fax: +350 20051513 E-mail: gpaenquiries@portofgibraltar.gi

www.gibraltarport.com

@

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www.thebaltic.com AMBREY RISK ASPIDA MARITIME SECURITY DEUTSCHE BANK DP WORLD FLEET HAMBURG LLP HADCON LIMITED HART SECURITY LIMITED HYDE MARINE INC IMS MARINE SURVEYORS & ANALYTICAL LABORATORIES LTD KTK TUGS LCH CLEARNET LIMITED MACS BENELUX B.V. MAST ASSET SECURITY & TRAINING (MAST) LIMITED MINISTRY OF ENTERPRISE, DEVELOPMENT, TECHNOLOGY & TRANSPORT


Scandinavia

Going green in Gothenburg Scandinavian firms have always been at the forefront of new initiatives to make shipping greener, whether it be port incentives for green ships, or innovative engine designs

A

s fuel costs continue to rise, one

with new regulations are not going to come

process, meets ECA requirements and is also

example of making shipping greener

cheap. Many are considering duel fuel systems

an economic winner since methanol and LNG

is the initiative by the Swedish port of

using LNG.

are about the same price alongside ship.

Gothenburg, which has developed a

Ingvald Fardal, president and CEO of

“Will we win a delay? I don’t know, but the

plan to encourage ship owners and operators

Norway’s Fjord Line, told the recent Interferry

most positive thing about our campaigning is

to choose cleaner fuel for their vessels, offering

annual conference in Barcelona that his

general awareness of what short-sea shipping

reimbursements for increased fuel costs.

company is planning a dual fuel LNG upgrade

is about and a realisation that the one-size-fits

Shipping lines that choose a fuel containing

within a year of two newbuilds being delivered

-all mentality is not always prudent.

a maximum of 0.1 % sulphur can receive up to

in late 2012. “Where we operate is the strictest

“Our efforts have rubbed off in that, if we

SEK 250,000 in compensation for increased

control area in the world and it’s going to get

had not had this big fight on sulphur, I think

fuel costs and other fuels, like LNG can also

even tighter,” he said. “We know that switching

we would have been dragged into EEDI, where

qualify for financial support. Gothenburg has

from HFO to distillate is going to cost a lot of

we have now won a two-year extension to find

been charging supplements for vessels with

money and we are not attracted to the scrubber

a workable formula that does not penalise the

more than 0.5% sulphur content for a number

option, so LNG seems a very good alternative.

special requirements of ferries. Regulators are

of years and the revenue serves to compensate

“But where can you fill your ship? There

very willing to listen, but they need facts and

aren’t many facilities in Europe today. And can

figures, not sentiment, which is something

When announcing the new incentives,Magnus

you fill with passengers on board? This is a

our industry needs to work harder on. Lack of

Kårestedt, Port of Gothenburg chief executive,

crucial consideration and we need confirmation

knowledge is the real enemy, not the ambitions

said: “We have worked with our customers to

of indications that we will get approval.”

of regulators.”

those owners using cleaner fuels.

arrive at proposals for how this revenue should

Per Stefenson, marine standards advisor

Former Stena group director of sustainability

be used. Providing support for low-sulphur fuel

and R&D manager at Sweden’s Stena group,

Johan Roos, who became Interferry’s executive

is one of several initiatives.

highlighted another concern over LNG at the

director of EU and IMO affairs in September, told

“Through this environmental measure, we

conference – that the risk of methane slip could

conference that he recalled raising objections to

aim to demonstrate that it is possible to

have consequences 20 times worse than CO2

the sulphur content proposals at the IMO in

take important steps towards cleaner shipping

– and suggested that methanol could be the

2008: “I felt very small with 168 governments

through voluntary collaboration and our hope is

fuel of the future.

thinking I wanted to kill every child, lake and

He described a retrofit project with Danish

flower in northern Europe. But where were the

company Haldor Topsoe in which methanol is

impact assessments? Only ECSA looked at the

Scandinavian

reformed on-board to user-friendly Di-Methyl-

cost of putting freight back on the roads”.

companies know that the cost of compliance

Ether, explaining: “It’s perfect for the diesel

A future with “a much more diverse palette

theBaltic Winter 2011 www.thebaltic.com

83

that, in this way, we will facilitate the transition to low-sulphur fuels.” However,

as

elsewhere,


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

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Scandinavia of fuels” was the vision of Finnish engine manufacturer Wartsila’s director of concept design Oskar Levander. The right choice involved a difficult equation based on issues such as area of operation, time spent in ECAs, whether it was a newbuild or retrofit project, the space required for LNG tanks or scrubbers and fuel price predictions. Marine gas oil was the technically easy, but high cost solution for meeting the 0.1% sulphur content limit in ECAs from 2015 meant other options were “clearly better” for such

Norwegian tonnage tax regime comeback

T

he overhaul of the Norwegian tonnage tax regime in 2007 was infamous due to the protests and law suits that followed the government’s decision

operations. Levander said that LNG delivered

to retrospectively tax previously tax-exempted

the lowest emissions and low price – a third

income, write Are Zachariassen and Anders

cheaper than MGO. Although there were space

Myklebust, partners at Wikborg Rein, Norway.

and availability issues, he added: “LNG has

In 2010, the Norwegian Supreme Court

great potential for newbuilds, offering enhanced

ruled that retrospective taxation was not

value and short payback time.” The better

permissible and should be reversed. With this

retrofit option was to use scrubbers to clean

decision, confidence has been restored in the

SOx from HFO exhaust gas – “it’s existing

tonnage tax regime. All in all, the Norwegian tax

technology and it works.”

package has now become very competitive and shipowners, both in Norway and internationally,

Targeting the Nordic region

are showing an increased interest in the

Meanwhile, international law firm Norton

country’s tonnage tax system.

Are Zachariassen

Rose recently launched a new internal group

Norway’s tonnage tax regime was first introduced in the mid-1990s, but since then has

headed by London based Tomas Gärdfors

undergone a number of changes. The overhaul that took place in 2007 considerably improved

to target business in the Nordic region.

the tonnage tax regime, in particular by introducing a final tax exemption for shipping income.

Norton Rose believes that the trend of

Although the new rules and final tax exemption were welcomed as being competitive and a

outward investment from Nordic countries

step in the right direction, the retrospective taxation of previously untaxed profits was seen

into Canada, Africa and Australia mirrors its

as unconstitutional and indicated a risk of further politicisation of the Norwegian tax system.

own expansion in these regions, which it

It was thought that many shipowners would look elsewhere to establish themselves as it

has been making through major mergers in

could no longer be said with confidence that the Norwegian tonnage tax system offered

the past couple of years. Recent years have

the desired certainty and stability.

seen a constant trend of outbound investment

Since then, views have changed. Shipowners – at least those who were not hit by the

from Nordic countries into economies such

retrospective taxation – have embraced the Norwegian tonnage tax system as it currently

as Canada, Africa and Australia – the same

operates today. The emphasis is on the beneficial features of the scheme and not on the political

regions in which Norton Rose has made recent

risks associated with it. The Norwegian Supreme Court’s decision to set aside the retrospective

deals, including advising on two of the largest

taxation as unconstitutional has now further significantly contributed to faith being restored in

energy wind farm transactions in Sweden,

the Norwegian tax system.

and a number of recent mining transactions

There is a growing interest in the Norwegian tonnage tax system from both Norwegian and

in Sweden and Finland. The law firm has also

international shipowners. Considering the historical background, and the fact that Norway is

been heavily involved in the Icelandic financial

often deemed to be “high tax” territory, the interest from international shipowners is perhaps

crisis since 2008 and Swedish based Stena,

surprising. However, such interest makes greater sense when assessing the combined benefits

and energy giant Vattenfall are also long-

of the tonnage tax regime and the general Norwegian tax system.

standing clients of the practice.

The tonnage tax regime offers full tax exemption on shipping income, including bareboat

According to Tomas Gärdfors, partner at

income and gains from the sale of vessels, as well as related management activities. The

Norton Rose: “It’s no secret that the Nordic

tonnage tax regime also allows a wide range of offshore vessels to be included, which is not

economies are among the strongest in Europe.

possible in some EU countries.

Our understanding of the region, alongside our

Dividends can be distributed without taxation to Norwegian and EU shareholders as a

own growing global footprint, has meant we

result of the Norwegian participation exemption. Norway does not impose withholding tax on

have been able to play our part in this fast-

interest. Overall, the regime offers flexibility on holding structures and financing and Norway also

increasing flow of business between the Nordic

has a broad set of double-tax treaties, generally creating a good framework for international

countries and international growth economies.

shipping activities.

“Until now, most of our work there has been

Overall, the Norwegian tax package can now be considered very competitive in comparison

done fairly opportunistically. It’s meant we’ve

to other jurisdictions. Added to this competitive advantage is the fact that Norway is an

been able to develop a prominent reputation as

attractive place for international shipping activities due to the well-developed Norwegian

one of the most active international practices

maritime cluster of shipowners, yards, equipment producers, banks, insurers and a wide range

in the region, but such an approach can only

of service providers, which provide a sophisticated infrastructure that is difficult to better in other

take you so far. Establishing this internal Nordic

tax-friendly countries.

group will help take us to the next level.”

theBaltic Winter 2011 www.thebaltic.com

85


Corporate viewpoint Fleet Hamburg

A new port of call With the launch of Fleet Hamburg, a strong maritime law practice emerges

O

n 1 December 2011, a new maritime law

is important to stand firmly on the side of ship

team: an equal number of fee earners and staff

practice, with an initial crew of eight law-

owners or other operators when it comes to

came originally from Taylor Wessing and Ince

yers qualified in England and Germany, was

the conflict interface between ship owners or

& Co Hamburg. Almost half the partners are

launched in Hamburg. It is comprised of the

operators on the one hand and banks and other

women and the age range is balanced. As well

entire four-man strong team of the practice

investors on the other.

as German-qualified lawyers, there is both an

area Transport & Logistics at international law

“Unlike larger legal practices, we are not

English-qualified solicitor and a barrister, with a

firm Taylor Wessing, who left the firm to open

primarily interested in clients from the financing

further English lawyer joining the team in early

a new practice with four colleagues from the

business and are thus in a position to focus

2012. All lawyers in the new practice have many

Hamburg office of Ince & Co – going by the

on advising and representing ship owners

years, even decades, of professional experience

name of “Fleet Hamburg”. This will be a new

and operators as clients when dealing with

in specialist areas, primarily in shipping and

port of call for all legal matters relevant to the

transactional or financing matters. Naturally, and

cross boarder or international commercial law,

maritime industry. The following lawyers will be

in the interest of our clients, we co-operate and

and as a result are well connected globally.

part of Fleet Hamburg: Christoph Hasche, Axel

liaise with banks, investors and other financial

The offices of Fleet Hamburg are precisely

Salander, Klaus Kostka, Ann-Kathrin Burchard,

institutions to find solutions to problems that

where the seed for the port of Hamburg was

Eva Bodenbach, Arthur Steinmann, Dharshini

find the long term support of all partners in a

planted in 1188, at the Nikolaifleet, set in

Bandara and Philipp Drömann.

business. This is where the in depth knowledge

the immediate vicinity of venerable Hamburg

of the maritime industry and experience of the

ship owners, brokers and related business,

lawyers of Fleet Hamburg comes into its own.”

between the churches of Sankt Nikolai and

Christoph Hasche, Managing Partner at Fleet Hamburg, says: “We shall concentrate on

Sankt Katharinen, only a short distance from the

advising the German and international maritime

Dharshini Bandara, an English qualified

industry, with our focus being ship owners

barrister, with Christoph Hasche also Managing

and managers, charterers and operators of

Partner of Fleet Hamburg, adds: “We have a

ships and other means of transport, terminal

strong team in place that complements itself

For more information, contact:

operators, as well as their insurers. As such,

perfectly. Fleet Hamburg is big enough to belong

Dr. Christoph Hasche, Rechtsanwalt:

we see ourselves as partners for our clients’

to the leading maritime law practices and small

c.hasche@fleet-hamburg.com

day-to-day business and as counsel in complex

enough to be fast, agile and cost conscious

Axel Salander, Rechtsanwalt & Solicitor:

disputes or contractual matters, ranging from

when meeting clients’ needs. We are in an

a.salander@fleet-hamburg.com

ship design through to building and construction

excellent position to operate internationally out

Dr. Klaus Kostka, Rechtsanwalt: k.kostka@fleet-

of any vessels or maritime structures.

of Hamburg. Those we have introduced our

hamburg.com

concept to, and also their insurers, have reacted

Dr. Eva Bodenbach, Rechtsanwältin:

very positively. ”

e.bodenbach@fleet-hamburg.com

“Of course, a large part of our practice consists of charter party disputes, cargo claims

Rathausmarkt and HafenCity.

Dharshini Bandara, Barrister: d.bandara@fleet-

or other disputes arising out of contracts of

Highlighting the depth of legal qualifications

affreightment, bills of lading or ship management

in the team, ranging from German qualified

hamburg.com

contracts, although our aim will be to resolve

Rechtsanwälte to an English qualified barrister

Dr. Ann-Kathrin Burchard, Rechtsanwältin:

disputes in the interest of our clients before

and

a.burchard@fleet-hamburg.com

matters are litigated.”

Hamburg, we can advise on and conduct

Dr. Arthur Steinmann, Rechtsanwalt:

Discussing Fleet Hamburg in the context

litigation before the German and the English

a.steinmann@fleet-hamburg.com

of the current economic climate, Christoph

courts, allowing for a more direct and effective

Philipp Drömann, Rechtsanwalt: p.droemann@

Hasche further sets out the role of his partners

representation of our clients’ interests in the

fleet-hamburg.com

in assisting clients with the often very difficult

respective

assignment of how to deal with economic

represent clients in cases brought before any

solicitor,

Dharshini

proceedings.

continues:

Further,

“From

we

can

problems experienced within a client’s business:

arbitration tribunals involving English or German

“We have partners who are experienced in

law, whether located in England, Germany or any

Fleet Hamburg LLP

dealing with insolvencies and the restructuring

of the arbitration centres worldwide. It follows

Willy-Brandt-Str. 57, 20457 Hamburg, Germany

of companies, and who will be able to guide a

from this that we serve the shipping community

Tel: +49 (40) 5 700 700

client in finding possible ways out of a difficult

and maritime industry doing business in Northern

Fax: +49 (40) 5 700 70 200

situation before a business becomes insolvent.

and Central Europe and internationally.”

info@fleet-hamburg.com

In this increasingly volatile economic climate, it

86

Fleet Hamburg consists of a well balanced

theBaltic Winter 2011 www.thebaltic.com

www.fleet-hamburg.com


German Law

Going for growth in Germany International law firms have been expanding their presence in the German market with some new ventures and an international approach to serving their clients

N

orton Rose has had a presence

there will be a “larger mix

in Germany for 10 years, recently

of financing in the future”.

expanding by opening an office in

Given the economic climate,

Hamburg, its third in the country. It

there is a move towards

is building up its shipping practice, which was

more

previously centred on Munich.

a broader base of equity

London-based partner Gordon Hall came to

syndication

and

participation.

Hamburg to manage and develop the shipping

Senior associate Timo

practice in the new office, which opened on

Noftz, who is based in

1 May this year. Although Hall says it might

Munich but is in the process

seem strange that Norton Rose has only recently

of moving to the Hamburg

opened in Hamburg, “a lot of the issue is finding

office, acknowledges that

the right opportunity at the right time”.

there had been difficulties

Norton

Rose

is

undergoing

a

large

persuading

people

that

international expansion and Hall said the

“shipping business can be

Hamburg office was already receiving new client

done out of Munich” there is

instructions after its second week in operation.

a strong transport practice.

The practice will offer a combination “not so

He advises, among other

often seen in Germany”, he says, providing both

areas,

German and English law advice and seeking

leasing transactions covering

involvement in cross border syndicated finance.

shipping, as well as railways

The legal practice pulled off something of a

on

international

and aviation.

coup early this year when it hired eight partners

According to Verfuerth,

from DLA Piper’s German operation, seven of

there is a lot of restructuring

whom are based in the new Hamburg office.

going on in the KG market.

According to Ludger Verfuerth, the move from

Funds

DLA was partly with the aim of building up an

approximately 2/3 to 1/3

international shipping practice.

divided into fresh money

He says that 80-90% of German shipping

for

being

new

raised

funds

and

are

for

Dr Christoph Hasche of Fleet Hamburg

believes the outlook for raising funds has

law firms are “boutique” practices and more

restructuring work, he says. Given banks’

changed dramatically and it can take as much

nationally focused, and the only truly international

hesitation to provide fresh funding, the loan

as a year to arrange the necessary funding,

shipping practices based in Germany (aside

profile has changed from a debt/equity split of

which has a significant impact on many projects.

from Norton Rose) were those of Ince & Co and

70%/30% to 60/40 or even 50/50. With the

In the past, there was a large base of retail

Watson Farley & Williams, although the latter is

equity portion being much higher, Verfuerth

customers who were more than willing to give

more geared to the ship finance side alone.

adds that “bridge financing is the difficult part”.

the money. This funding base has now shrunk.

Verfuerth says the KG market in Germany

Bridge financing had been done by the banks in

“We now see more private placement and KG

is changing. There are a lot of challenges and

the past but this is no longer the case. Verfuerth

houses are now targeting institutional investors

theBaltic Winter 2011 www.thebaltic.com

87


German Law Verfuerth adds that many

Along with German-qualified lawyers, there is

brokers

both an English-qualified solicitor and a barrister,

have been affected by the

with another English-qualified lawyer set to join

sanctions and “feel unsecure

the team early next year. The partnership is

about the situation”.

further strengthened by a lawyer specialising

Hamburg-based

in restructuring and insolvency matters, which is particularly valuable in light of the continuing

Fleet Hamburg

shipping crisis.

Meanwhile, a new maritime

The German Maritime Arbitration Association

law practice has been set up,

(GMAA), for which Hasche acts as secretary,

drawing on personnel from

and the Society for Hamburg Lawyers (GHJ) will

Ince

have premises in the offices of Fleet Hamburg.

&

Co

and

Taylor

Taylor Wessing, meanwhile, is not planning to

Wessing. The new practice was

offer legal advice in merchant shipping law, but

launched at the beginning

will remain active in the areas of yacht building,

of this month with eight

marine shipbuilding and the offshore-industry.

lawyers drawn from the

Dr Wolfgang Rehmann, managing partner at

transport & logistics team

Taylor Wessing comments: “We wish Christoph

of Taylor Wessing and a

Hasche and his team all the best and express

further four lawyers from

our thanks for many years of helping to establish

Ince & Co’s Hamburg office,

our Hamburg office, which enjoys a reputation

trading under the name Fleet

as one of the top names in Hamburg.”

Hamburg. The

team

Hasche,

Salander,

Klaus

Anniversary at Ince Ince & Co Hamburg celebrated its tenth

Burchard,

anniversary in September. In the 10 years since

Eva Bodenbach, Arthur Steinmann, Dharshini

it opened, the office has grown significantly, with

Bandara and Philipp Drömann.

the overall number of lawyers increasing to more

Ann-Kathrin German shipyards have been building up

Axel

Kostka,

Jan Heuvels, Ince & Co Hamburg

more,” says Verfuerth.

includes

Christoph

their expertise in the areas of specialist ships

Commenting on the new venture, Hasche,

to support the offshore industry and Norton

previously of Taylor Wessing and now managing

Work from the Ince & Co office in Hamburg

Rose has been providing advice to clients

partner at Fleet Hamburg said: “We shall

is very international in nature with recent

on contractual matters, as well as obtaining

concentrate on advising the German and

work including advising a major German liner

finance from German banks for these specialist

international maritime industry – whereby we

company on a E1.2bn turnaround, including

projects. Another source of work comes from

seek to be a competent and reliable partner

loan agreements, finance lease, and an asset

the cruise industry as German yards take orders

to medium-sized ship owners, managers and

backed commercial paper securitisation.

for new ships.

operators in their day-to-day business and in

The partners coming from DLA also brought

complex disputes.

than 20.

Ince has also been advising Hamburgbased shipowners and their banks in relation

a strong energy practice. Project finance for

“In this increasingly volatile economic climate

wind farms and the specialist ships to maintain

for ship owners and operators, it is important to

and build them is a niche area for German

stand firmly on the side of the ship owner when

Other recent work includes advising Far

shipyards, and one that fits well with the shift

it comes to the conflict interface between ship

Eastern yards and banks on restructuring

towards cross border syndicated transactions.

owners, banks and other investors. Unlike those

newbuilding

Norton Rose’s expanding network of offices,

large legal practices, who are primarily interested

international syndicate of banks in restructuring

which includes strengthening links in South

in the transaction and financing business of

fleet financing.

Africa, Canada, Australia and Latin America, will

the big players and are thus hardly in a position

According to Jan Heuvels at Ince & Co

help accelerate the internationalisation process.

to also advise and represent the ship owner

Hamburg: “We are very pleased to be celebrating

as a beneficiary.”

our tenth year in Hamburg with significant

When

asked

about

expansion

plans

to cancellation of newbuilding contracts and newbuilding disputes.

finance

and

assisting

an

in Germany, Hall says the Hamburg office is

Dharshini Bandara, until recently senior

growth in the office, in response to our clients’

moving to new premises with almost double the

associate at Ince & Co and now also managing

requirements for excellent legal advice. I am

space of the existing office, so they are looking

partner at Fleet Hamburg, adds: “We have a

delighted that we maintain our close links to the

to expand. The company will be covering the

strong team in place that complements itself

shipping and insurance markets and the banking

full range of shipping services, but he says it is

perfectly. Fleet Hamburg is big enough to belong

community, and are extending our reach into the

still assessing market requirements: “the market

to the leading maritime law practices and small

energy and offshore sector.”

is a strange place at the moment”. Services

enough to be fast, agile and cost-aware when

Ince & Co’s senior partner, James Wilson,

will obviously include advice on operational

meeting clients’ needs. Those who we have

comments: “Ince & Co Hamburg demonstrates

matters and claims, but also on regulatory

been able to introduce our concept to, and

the breadth of our practice and our commitment

issues, embargoes and sanctions. Norton Rose

also their insurers, have reacted very positively.

to clients in Germany and Northern Europe. We

has been advising a bank dealing with Iran on

We are in an excellent position to operate

have an energetic and capable team here that

their situation with regards to sanctions.

internationally out of Hamburg.”

continues to develop and expand.”

88

theBaltic Winter 2011 www.thebaltic.com



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Insurance parlance

In the danger zone The International Union of Marine Insurance continues to highlight emergent dangers in shipping operations for the benefit of insurers and shipowners, as Denzil Stuart reports

T

he programme for IUMI’s annual confer-

the body “puts its weight behind any means that

ore. The master halted the loading of the cargo

ence, held in Paris in September, could

will reduce the risk to seafarers, the ship and

a week later when it was discovered to have a

be viewed as a catalogue of various

her cargo”.

high moisture content, raising the risk of lique-

incipient problems that the industry is

Elsewhere, in a pot-pourri of topical sub-

faction at sea. In October, it was reported that

up against. Although planning the annual forum

jects, IUMI focused on vessel vetting and cri-

the dispute was ongoing and the vessel was

starts months beforehand, the programme is

sis management, perishable goods in store,

still at Mobile.

gradually brought together by IUMI’s seven

the development of technology on ships and

As Todd emphasised, cargo may not be

technical committees, each of which arranges

its impact on insurers, LNG applications for

immediately dangerous, but could have a

a workshop during the three days. These cover

modern ro-pax ferries, nuclear-powered ships,

propensity to become dangerous in certain

risks associated with hull and machinery, cargo,

changing risks in the offshore energy market,

circumstances. Under common law, he said,

offshore energy, fishing, inland waterways and

overweight containers and misdeclared contents

charterers/shippers impliedly undertook not to

yachting, loss prevention, facts and figures

by shippers, IUMI’s work at the IMO, cargo

ship dangerous cargo without first notifying the

(stats), and legal and liability matters.

theft, Solvency II, and the enlargement of the

carrier of its characteristics. But notice was not

Panama Canal.

required when the carrier knew or ought to have

This year, as might be expected, piracy

known of the dangerous nature of the cargo.

was a major topic and expert speakers and

One very urgent issue was thoroughly exam-

panellists examined the current situation from

ined and brought close interest among the 600

The speaker explained that the carriage

several different aspects. Payment of ransoms

delegates present, mostly marine underwriters

transaction involved the head owner (hull/P&I),

falls to hull and cargo underwriters under

from IUMI’s 54 member associations. We are

time charterer (charterers’ liability), and voyage

the General Average principle, while the P&I

talking about the causes and effects of cargo

charterer/contract of affreightment holder (char-

clubs have not normally been involved. But in

liquefaction affecting bulk cargoes such as

terers’ liability/traders’ liability/cargo cover).

Paris, the signal was hoisted that this situation

iron ore fines, nickel and so on, and how it can

Daniel Sheard, of marine chemists Brookes

could soon change, particularly as the Somali

endanger the ship, crew and cargo. Indeed,

Bell, said that the IMSBC Code (the essential

gangs have started taking hostage crews ashore

this has become a global concern in shipping

document published by the IMO to ensure

for detainment.

following the dramatic loss of several ships and

safety of ships carrying bulk cargoes) places

their crews.

a responsibility on the shipper to provide

Meanwhile, the use of armed security personnel placed on board during a vessel’s pas-

In Paris, Simon Todd, a maritime lawyer from

before loading: a description of the cargo and

sage through the danger zones continues to be

Ince & Co, said that claims arose in two distinct

its properties, including whether the cargo

hotly debated. Those in favour found a surprise

areas. First, liabilities, affecting crew/dependants

is Group A; for Group A cargoes a certificate

supporter in Britain’s Prime Minister when David

for loss of life and injury, wreck removal, and pol-

of the moisture content and transportable

Cameron announced the government would

lution. Other claims came from loss of the ship or

moisture limit, TML. Moisture must be measured

permit armed guards on British-flagged ships.

repair costs, and loss of time/profit.

on samples taken no more than seven days

The debate continues to rage as this report is written.

Coincidentally, a recent example of the last point occurred when the bulker Red Gardenia

before loading, but TML is not restricted to seven days.

IUMI made clear in Paris that it was sticking

(39,964gt, built 2005), which had arrived at

It was made clear in Paris that industry pres-

to its guns in that it is not opposed to armed

Mobile in early August, was delayed because

sure is intensifying to eliminate the problem, with

guards in principle, a decision it announced

of a dispute between its owners, charterers

the important support of marine insurers and the

early in 2011. IUMI president Ole Wikborg said

and shipper of its cargo of China-bound iron

P&I clubs.

theBaltic Winter 2011 www.thebaltic.com

91


Insurance parlance Marine Shipping Mutual run-off North P&I Club has bought eight million gt hull and machinery club Marine Shipping Mutual Insurance, which has been in run-off since 1 July 2011. MSMI was managed by North’s management

company,

North

Insurance

Management Limited. According to North’s chairman Pratap Shirke, “North will now proceed to manage the run-off of MSMI’s outstanding liabilities. Claims will continue to be handled by North’s claims handling team in substantially the same manner as they have been prior to completion, and former members and brokers should continue to contact the relevant member of North’s team in respect of all ongoing matters.” The club said that “the acquisition does not affect North’s decision earlier this year to defer the launch of a fixed-premium hull and machinery product, though this remains under review. We remain firmly committed to our long-standing strategic aim of expanding North’s product range beyond its core protection and indemnity service, and will continue to consider the possibility of launching a hull and machinery product in the future.”

War risk Strong demand from both owners and charterers for its fixed-premium war risks insurance that offers cover to a limit of $200m is continuing, according to the Strike Club. The club attributes this to its ability to offer a ‘one stop shop’ war risks insurance to cover traditional hull & machinery risks, while also providing additional features including loss of hire due to piracy even in the absence of a hull & machinery incident, or charterers’ loss of

Bill Milligan, chief executive of the Strike Club’s manager

bunkers resulting from a hijacking. The Strike Club plans a general increase of

will continue to have a serious and erosive

no general increase to our premiums for the

10% for the 2012/13 policy year commenc-

impact on shipping operations,” he said. “The

coming year. Despite a recognition that claims

ing February 1 next year for Classes I and II

directors are determined that the club’s financial

are starting to increase again, Shipowners con-

(shore-related risks), and a general increase of

position remains robust and adequate to meet

tinues to grow, reserves are strong and the

5% for Class lll (ship-related risks). In addition,

future challenges and obligations.”

underwriting performance for the first half of the

there will be a full review of each member’s

year is producing some encouraging signs. We

exposure, cover, deductibles and record across

are also conscious that many of our members

Shipowners increase

continue to experience very difficult operating

The increases for the three classes are

The Shipowners’ Club has held its premiums to

conditions, and we believe it is part of a club’s

the same as those applied to the 2011 year.

2010 levels, with an increase of 7.3% in earned

role to help owners keep insurance costs to

A release call of 30% was set for 2012/13

premiums for the half-year ended August 2011.

a minimum.”

for Classes I and II, while the same rate was

The club says its strong results are a “reflec-

Despite announcing no general increase

tion of the organic growth it has experienced

in premiums, Hume said that: “maintaining the

all three classes.

maintained for Class III. Bill Milligan, chief executive of the Monaco-

during the 2010 policy year, principally from the

financial stability of Shipowners is essential.

based club’s manager, said the its results were

offshore sector”. Entered tonnage increased by

We will review closely the record and risk of

considered satisfactory when seen against the

6.5% to 19.45m gt.

each member, working with the broker to ensure

ongoing turmoil in world shipping and financial

Commenting on the results, Shipowners’

that the premiums and terms of entry are

markets. “There seems little doubt that strikes

chief executive, Charles Hume, said: “We

commensurate with the risks that each

and other forms of industrial and political unrest

are very pleased to announce there will be

operation brings.”

92

theBaltic Winter 2011 www.thebaltic.com


ITIC

Simple mistakes can lead to costly claims Charlotte Kirk of the International Transport Intermediaries Club (ITIC) looks at recent examples of costly mistakes leading to claims against brokers and agents

T

he first rule that used to be drummed

recently by a chartering broker who arranged

comment from the shipper that the “consignee

remorselessly into trainee carpenters

a contract of affreightment (CoA) between a

will pay” as confirmation that the consignee in the

was “measure twice, cut once”. It was

Japanese owner and an American charterer.

UK had accepted the cargo on a freight-collect

sound advice, because wood is an

Under the terms of the CoA, the owner had

basis and accordingly issued a freight-collect

expensive commodity and the time to correct

to offer one ship per month to the charterer,

bill of lading. Unfortunately, while the final bill of

mistakes is before they happen. The equivalent

which had a minimum obligation to make eight

lading was issued showing freight-collect, the

term in the shipping industry is “check before

shipments in a year.

agent failed to update the line’s computer system,

fixing”. Merchant ships are no longer made

By the time the broker had received a nomi-

which still showed “prepaid”. Upon arrival in the

of wood, but the consequences of making a

nation from the owner, the charterer had already

UK, the discharge port agent checked the liner’s

mistake can be very expensive.

met the minimum requirement under the CoA.

computer system, saw the prepaid status and

Shipbrokers are particularly at risk in this

It therefore had no obligation to accept the new

released the cargo.

regard. Witness the case of a broker acting for

nomination and said it did not require the ship. In

It soon became apparent that neither the

the owner of a vessel trading in the Mediterranean

fact, the charterer did have a cargo, but had pur-

shipper nor the consignee had paid the freight,

who was asked to consider an offer from charter-

chased it from another trading house (the second

which amounted to approximately $40,000. The

ers that included the term “time from 1700hrs

charterer) on CIF terms. The second charterer

shipper argued that it had sold the cargo FOB

Thursday or a day preceding a holiday until

also had a contract with the same owner through

and provided a commercial invoice and evidence

0800hrs next working day not to count even if

the same broker and had nominated the cargo

of payment to support this. Accordingly, the ship-

used”. When asked by the owner for the week-

under its own contract with the owner.

per argued that the consignee should pay the

The broker’s operations department made a

outstanding freight. The consignee in turn argued

mistake and thought the cargo had been nomi-

that it had bought the cargo CIF, and produced

nated under the first charterer’s CoA. In effect, the

emails to show that CIF terms were discussed/

same cargo was booked twice on the same ship.

negotiated. But it failed to provide evidence that

Negligent advice

The owner was unsuccessful in obtaining an alter-

confirmed the final movement of the cargo was

The broker told the owner that the weekend

native cargo to fill the space on board and claimed

carried out on these terms, claiming that such

working times in Algeria were 1700hrs Thursday

from the broker the full freight it had not received

evidence was “commercially sensitive”.

to 0800hrs Saturday when, in fact (as set out in

on the booking, less the broker’s commission.

end working times in Algeria, the broker responded without checking. Sadly, he got it wrong.

BIMCO’s holiday calendar), the correct answer

ITIC argued that the claim for freight did not

should have been 1700hrs Thursday to 0800hrs

take into account saved expenses, such as

Need for care

Sunday – a difference of 24 hours.

the time and cost involved in cargo working.

With the assistance of ITIC, the agent was able

These costs were deducted, and a settlement of

to persuade the consignee that, even though the

$70,000 was finally agreed.

cargo had been released prior to freight being

The owner agreed to the fixture following this negligent advice and calculated the freight rate on the basis of the shorter period that the broker had

Of course, it is not just brokers who are prone

paid, under the terms of the bill of lading the con-

given. The vessel was delayed in port, and laytime

to making mistakes. In a case handled recently

signee was still liable for the outstanding freight. It

started later than the owner had anticipated. The

by ITIC, a liner agent in South America had to

was also highlighted that, if legal action needed to

eventual shortfall in demurrage was claimed from

reissue an original bill of lading six times, due to

be taken in order to recover the freight, ITIC would

the broker. The result was a claim in the amount

various amendments required by a shipper, in

also seek to recover the legal costs incurred. The

of $25,527, which was ultimately settled by ITIC.

respect of a consignment of bananas headed for

agent offered to accept 95 per cent of the freight,

This is a classic example of how a claim could

the UK. The initial three versions of the original bill

which the consignee ultimately paid.

have been avoided if the broker had checked

of lading provided that freight was to be prepaid,

This is a classic example of the greater need

before answering.

while the subsequent three versions showed

for care. Many claims result from very simple

‘freight-collect’, meaning that the freight would be

housekeeping issues that are overlooked due to

payable by the consignee.

time pressures, or short cuts, which often result

A slightly less classic – indeed, rather unusual – example of a mistake on the part of a broker leading to an expensive claim was provided

The agent had mistakenly interpreted a

theBaltic Winter 2011 www.thebaltic.com

in very large settlements.

93


Legally speaking

Rotterdam redrafting A submission to the EU is calling for it to intervene on the controversial Rotterdam Rules A panel of international maritime lawyers is urging

Alcantara, Dr Juru Milos Pohunek, Douglas

that it will never come into force as few countries

the EU to tell its members not to sign or ratify

Schmitt, Frazer Hunt, Kay Pysden, Professor

have come forward to sign.

the Rotterdam Rules unless amendments to the

William Tetley, Barry Oland, Professor Jan

convention are made.

Ramberg and Julio Vidal.

The group feels the EU is well placed to offer an alternative to the Rotterdam Rules, which is

The legal group believes that the EU “should

Other issues the group highlights are that the

only partially multi-modal, but says it should only

either support an initiative by Uncitral/CMI to

rules expand beyond the contractual parties to

take action if Uncitral/CMI are unable to deal with

draft suitable amendments and protocols to

include anyone acting as a “maritime performing

the problem because it has experience in drafting

the current conventions in placed and give the

party”, which could mean anyone performing

a worldwide convention in order to encourage

trading world a more than credible alternative to

part of the carrier’s obligations during the period

worldwide consensus.

what is a flawed proposal that clearly numerous

between the goods arriving at the load port

“There is no doubt that the Hague-Visby

countries are uncomfortable with, if not have

and their departure from the port of discharge.

Rules need updating, but they do not need to

entirely rejected the same, or take up the initiative

This could include stevedoring companies and

be replaced with a convention that attempts

itself if Uncitral/CMI do not proceed with some

cargo terminals, which could cause problems for

to be multi-modal without quite achieving this

degree of urgency”.

multi-purpose cargo terminals at ports because it

objective,” the group said.

The UN Convention on Contracts for

would be difficult for them to determine to what

“What the trading world needs is transparency,

International Carriage wholly or partly by Sea –

extent goods stored in the terminal were covered

certainty and predictability. Traders do not engage

known as the Rotterdam Rules – was intended to

by the rules.

in reading contract terms and should be guarded

bridge the gap between the Hague and Hague-

There is also the question of the rules’

against the risk of being caught by ‘fine print

Visby Rules on the one hand and the Hamburg

imbalance between shippers and carriers, the

modification’ Also insurers need a need a firm

Rules on the other “by removing the error in

group says. “Although the carrier enjoys the

basis for setting appropriate premiums and for a

navigation defence available to the maritime

privilege of a monetary limitation of liability for

smooth claims handling procedure.”

carrier under the Hague and Hague-Visby Rules

a breach of any of its obligations, the shipper

and by increasing the monetary limits of liability to

would incur an unlimited liability, [for example]

account for world inflation since the 1920s”, the

in the case of incorrect information given to the

Common sense decision

group explained in a submission to the EU.

carrier. Whilst it might be understandable that the

London’s Supreme Court ruled in favour of a

However, one controversial aspect of the new

maritime carrier would prefer to have a joint and

common sense decision in shipbuilding contract

convention is its expansion to cover not only

several liability comprising everyone acting as

disputes in November in the case of Rainy

the maritime segment by also pre-carriage and

shipper and consignee, it may be considered less

Sky SA and others v Kookmin Bank [2011]

post-carriage by other forms of transport, which

acceptable that a party having had nothing to do

UKSC 50.

the group says raises the possibility of conflict

with the contract of carriage as such should be

with other regulations applied to those forms

liable under the convention.”

At issue were questions relating to the construction of contractual provisions in a bond

The convention contains a definition of

guaranteeing the refund of instalments under

The group suggests that “it is unhelpful to

“documentary shipper” and to qualify as such

shipbuilding contracts. Paul Herring of Ince and Co

expand a unimodal transport convention to

is sufficient to agree to be named as shipper in

LLP acted for the successful buyers in the case.

cover other modes as well, since nowadays the

the transport document or electronic transport

The Supreme Court held that in cases where

important factor for customers is not exactly how

record, and “this might be particularly harmful for

there were two different interpretations of a

goods have been carried and which mode of

ex-works and FOB sellers who without realising

contractual provision, “the construction which is

transport has been used, but rather the desire to

the consequences may agree to be named as

consistent with business common sense is to be

get the goods in the right condition to the right

shippers in bills of lading”.

preferred”, Ince said in its online analysis.

of transport.

place at the right time”. The authors of the report include: José

94

With all the potential problems contained in

Terms of advance payment bonds issued by

the convention, the group says that it is possible

Kookmin Bank to the buyers, at the shipbuilder’s

theBaltic Winter 2011 www.thebaltic.com


Legally speaking request were considered. According to Ince,

In a recent presentation by North P&I Club

in favour of the owners, who had decided to

Paragraph 2 of the bonds entitled the buyers

claims manager Henry Woods: “the discovery

take the ship round the Cape as opposed

to repayment of pre-delivery instalments upon

of illegal narcotics on board a ship will in most

to transiting the Suez Canal as instructed by

rejection of the vessel, but did not refer expressly

jurisdictions trigger a criminal investigation. The

charterers Pacific Basin. The Triton Lark was

to repayment in the event of the insolvency

problem presented by Venezuela is that the

carrying a cargo of potash from Hamburg to

of the shipbuilder. This was, however, stated

possession of drugs on board a vessel is, of itself,

China. Conwartime clauses were included

in the shipbuilding contract to be an event

sufficient evidence to result in the confiscation of

in the charterparty. The arbitrators held that

requiring repayment to the buyers. Paragraph

the vessel and lengthy gaol sentences for the

the additional costs of going by the longer

3 of the bond then referred to “the pre-delivery

officers and crew.”

route, which amounted to close to $500,000 should be paid by Pacific Basin, which appealed

instalments under the Contract…” and went on to

Venezuela enacted the Organic Drugs Law

state that Kookmin Bank must “pay all such sums

just over a year ago, which, explained Woods,

due to you under the Contract”.

“appears to increase the evidential burden and

Hearing the appeal, Mr Justice Teare

The issue to be decided by the Supreme

potential penalties imposed on shipowners and

considered the issue of whether the Conwartime

Court was whether, on a true construction of

their crews. Under the ODL, a crew member will

clauses, which say that a vessel cannot be

paragraph 3 of the bonds, the buyers were

commit a crime if he is involved in the illicit traffic,

ordered to pass through an area where the ship

entitled to repayment under the bonds in such an

commerce, sale and distribution, concealment,

is likely to be exposed to war risk, applied. Pacific

insolvency situation.

carriage by any means, storage or brokerage of

Basin’s argument was that the arbitrators were

illegal narcotics.”

wrong to say that taking the longer routes did not

At first instance, Mr Justice Simon found

the decision.

fall under the heading of a deviation.

in favour of the buyers. The Court of Appeal

Seafarers convicted of an offence under the

reversed this decision. The Supreme Court has

new legislation face prison sentences of between

Mr Justice Teare has referred the matter

now allowed the buyers’ appeal and restored the

15 and 25 years, while judges and prosecutors

back to arbitration so that the parties can make

first instance judgment.

who are deemed not to have properly applied

further submissions.

According to Ince: “The decision of the Supreme Court in this case has a wide application,

the legislation could face sentences of four to eight years.

The case is an interesting one as there have been concerns among owners that obligations to

extending beyond the interpretation of refund

The new law, Woods said, means that vessels

complete a voyage “with utmost despatch” might

guarantees and advance payment bonds to the

employed in the commission of an offence can be

lead to ships being forced to transit the danger

construction of commercial agreements generally.

confiscated and judges can order the preventive

zone. BIMCO has been drafting new guidance

In his judgment, Lord Clarke sets out in detail the

seizure of a ship concealing or trafficking drugs

on the issue for incorporation into charterparties.

approach, which should be taken by the courts

for up to three months until a preliminary hearing,

when construing contractual provisions in the

at which the owner must “demonstrate a lack of

event that there is more than one meaning.

intention to commit an offence”.

In so doing, Lord Clarke has clarified the law in

According to Woods, this places the burden

this area, firmly concluding that “where a term of a

of proving lack of intention on the owner. “It

contract is open to more than one interpretation it

is highly unusual to compel a party to prove a

is generally appropriate to adopt the interpretation

negative – in this case a lack of intention. It is

which

not yet clear, what if any, evidence would be

is

most

consistent

with

business

common sense…” In the context of drafting refund guarantees

accepted by the court as sufficient to discharge this difficult concept of lack of intent.”

and bonds, the law firm said “the key point to

Woods suggested that factors that might

take away from the Supreme Court judgment

assist the owner in this respect could include the

is that clear and careful drafting is required and

fact that the vessel was on bareboat charter and

that the commercial intentions of the parties must

therefore the owner had insufficient control of

be taken into account. Otherwise, where the

its use, the vessel was time or voyage

meaning of a provision is ambiguous, a party may

chartered so the owner did not control the

seek to argue for an overly literal construction

ship’s itinerary and the existence of a third party

of the provision in question. In particular, the

management contract.

events entitling the buyers to a refund under the

Owners failing to enter an appearance or

shipbuilding contract must be clearly covered in

who are believed to have abandoned the vessel

the bond or guarantee.

will have it confiscated one year after the ship’s

“Finally and more generally, it is clear that

preventive seizure.

the court can and will consider the commercial purpose of a provision when being asked to interpret ambiguous contractual provisions.”

Piracy dilemma As shipowners continue to face the threat of piracy of the African coast, the issue of whether

Venezuela drugs law concerns

or not owners are justified in taking a longer

Venezuela’s tough anti-drugs legislation continues

route around the Cape of Good Hope to avoid

to alarm the maritime industry, with masters and

the problem has been tested in the English High

crews of vessels in risk of imprisonment even if

Court recently.

they had no knowledge of drug trafficking.

At issue was an arbitration tribunal decision

Ince and Co’s Paul Herring

theBaltic Winter 2011 www.thebaltic.com

95


Corporate viewpoint RAK Ports

RAK Ports – five niche facilities that service the Middle East sector Saqr Port

pontoon berth marina, the Barasti Sailing Club,

RAK Khor Port

Located 25 kilometres (km) north of Ras Al

catering for large luxury yachts, private leisure

RAK Khor Port is a unique city centre port

Khaimah City, this is the largest bulk commodity

vessels and visiting sailing yachts. It is the ideal

located at the entrance of the Creek in Ras Al

port in the Middle East, handling a range of

gateway to the fjords of the Musandam.

Khaimah City. The port estate is 323,858m2 ,

dry bulk materials. Aggregates and rock from

and provides a multifunctional facility handling

quarries, and cement from cement works

Al Jazeera Port

all types of cargo. Offering a range of modern

adjacent to the port, are exported to the major

This shipyard is the Emirate’s new “one-stop-

facilities and services, the port provides for

construction projects in the Gulf. The port

shop” for dry docking and ship repairing in the

local importers and exporters. Facilities are also

handled 27 million tonnes (t) of cargo in 2010,

UAE. The port also provides a complete range of

available for specialist companies undertaking

and is on course to handle 35,000,000t in 2011.

maritime and shipping services.

ship repairs and maintenance, together with

Currently Saqr Port has 12 berths with

The port covers a total area of over 450,000

general warehousing and temperature controlled

a draft of 12.2m, but there are plans to

square metres (m2), including the new 50,000m2

storage. A new passenger/cruise terminal is also

construct additional berths with a 15.5m draft to

dry dock and ship lifting system area. This new

operational, handling small cruise liners servicing

accommodate cape-size vessels. The port has

facility has 12 dry berths – eight of which are

the increasing tourist activities in Ras Al Khaimah.

ISO9001 and ISPS certification.

67.5m long x 30m wide and four berths that are

The port has a total covered warehouse area

77.5m long x 30m wide. The facility’s lifting dock

of 28,000m2, comprising five units at 1,512m2

Al Jeer Port

has a synchronized lifting capacity of 1,100t and

each, nine units at 1,944m2 each, and two cold

Located on the border with the Sultanate of

can accommodate vessels up to 55m in length

store units at 1,512m2 each. There is also an

Oman, Al Jeer has a 270-metre quay wall with

x 18m wide. Adjacent are nine wet berths, with

open storage area of 60,000m2 that is available

a 6m draft, 30,144m2 of warehouses, including

a total length of 1,100m. The port has an open

for short or long term contracts.

hard frozen and temperature controlled storage

storage area of 74,000m2 and warehouses

units. Al Jeer Port has a newly opened 266

totalling 6,200m2.

96

theBaltic Winter 2011 www.thebaltic.com


Corporate viewpoint RAK Ports RAK Maritime City Free Zone Occupying an area of 8,000,000m2, this new maritime industrial park boasts a dedicated harbour covering 820,000m2 of water, and almost 5km of new quay wall, with private/ exclusive use jetties. The harbour entrance approach depth is 9m and there is a depth of 7m alongside at all the new berths. Plot sizes range from 25,000m2 to over 1 million m2. Plots are available with an exclusive jetty of 100 linear metres, which require a minimum leased area of 40,000m2 . RAKMC Free Zone is able to incorporate companies either as FZE and FZC entities, and is issuing industrial, commercial and general trading licences, along with work permits and UAE residence visas. RAK Ports, and the services offered, is rapidly driving the economic development of Ras Al Khaimah, which in turn is reinforcing the Emirate’s global business footprint. For more information contact: Group general manager RAK Ports E-mail: gm@rakports.ae www.rakports.ae Saqr Port Al Jeer Port Al Jazeera Port RAK Khor Port RAK Maritime City

theBaltic Winter 2011 www.thebaltic.com

97


Commercial profiles

Solace Global Maritime Ltd S

olace Global Maritime is a worldwide

global footprint and wide-ranging industrial and

piracy is real and fast-moving and that its impact

provider of bespoke security services for the

operational insight, our services cover every

on shipping is acute. We allow your vessels

maritime industry. These services are the

facet of maritime security, from armed protection

freedom

resultant product of experience from the UK

and fleet management, to crew training

threatened waters, saving you time and providing

Military and Special Forces combined with an

packages and vessel recovery. All of our working

the freedom that you demand.

intimate and sympathetic understanding of the

practices are in line with current industry

requirements of today’s commercial user. We

guidelines, including IMO Best Management

believe in the consistent delivery of excellence

Practice 4. We also hold the ISO9001

and an unrivalled knowledge of our client’s

accreditation and are registered with the BMF,

requirements. We set the standard for security in

the ICoC, SAMI and BAPSC.

the modern marine environment.

passage

through

otherwise

Solace Global Maritime provides guidance

Solace Global Maritime conducts over 1200

and training for your crews while our teams are

transits annually through the high risk area and

on board your vessels, but we also conduct staff

currently provides a service for between 70-90

training exercises. These exercises are based on

vessels. Our UK-based Operations Team delivers

previous actual maritime security incidents and

round-the-clock incident management, maritime

will help your personnel plan for a security

intelligence and vessel tracking services. We

incident. They will also help you to develop your

deliver exclusively to the maritime industry,

own security guidelines, which can be used in

meaning that you will receive a focused, pertinent

concert with the security teams that we provide.

product – not a service that has been adapted

of

At Solace Global Maritime our ethos is the delivery of excellence in all that we do. This

Solace Global Maritime Ltd. (UK)

We offer a range of consultancy and security

is evident in the personnel we provide, the

Tel: +44 (0) 1202 308810 UK office

services for all types of vessel and user, from

equipment we use and the on-going support

Email: info@solaceglobalmaritime.com

commercial fleets to private yachts. With a

that we offer. We understand that the threat of

Web: www.solaceglobalmaritime.com

from elsewhere in the security sector.

Going an extra mile V

ega ship management DMCco (VSM),

monitoring,

and

the cargo during the voyage to ensure minimum

incorporated in Dubai in July 2008, is an

claims, monitoring ship’s SIRE/CDI approvals,

voyage/transit loss. At discharge ports, its

and so on.

superintendents work in conjunction with the

independent and ISO-9000 certified company that is involved in various commercial shipping

In

performance

operations

calculations

management

work,

the

activities. The company is managed and run

company strives towards improving client

by shipping professionals with over 100 years

returns with savings in time and cost.

ship’s crew for efficient discharge operations ensuring minimum time on board. It offers a cargo tank cleaning supervision

It offers a port captaincy service in the

service in the Arabian Gulf, Indian Sub-continent

70 years of accumulated experience of working

Arabian Gulf and Indian subcontinent area. The

and the Far East for chemical tankers, which

ashore in the shipping industry.

scope of work involves attending the vessel at

require complex tank cleaning routines.

of accumulated sea going experience and over

VSM’s employees are its core strength,

the load/discharge port and ensuring that the

VSM’s superintendents and managers are

working in a safe and environmentally friendly

vessel utilises its resources to maximum effect

extremely experienced and are always up to

environment. The company is committed to

to load/discharge her cargo in an efficient and

date with the relevant rules, regulations and

going that extra mile in order to exceed its

smooth manner.

requirements of operating ships commercially,

It also offers gassing up and cooling down of

customer’s expectations. Strategically located in Dubai, VSM works

gas tankers. It is well placed to offer this service

with the Far East as well as the West during its

in the Arabian Gulf and the Indian sub-continent

working hours.

area for vessels that need expertise in gassing

It currently provides a wide range of services.

Its

operation

management/post-

including complex operations of oil, chemical and gas tankers.

up and cooling down after dry-docking, repairs, or during gas-change operations.

fixture operations service involves the day-to-

Its loss control of cargo service in the area

day commercial running of ships, such as

(Arabian Gulf and the Indian sub-continent)

Tel: +971-4-3516969

loading, discharging, agency, bunkers, charter-

involves supervising the loading and discharge

Mob: +971-50-6510094

party administration, demurrage/dispatch, cargo

operations of cargo and, if required, it will place

E-Mail: ranjan.mookherjee@vegaship.ae

related claims, off-hires, daily noon position

one of its superintendents on board to monitor

E-Mail: ops@vegaship.ae

98

theBaltic Winter 2011 www.thebaltic.com


Commercial profiles

DP World – putting customers first D

P World operates in more than 60 termi-

been voted “Best Seaport in the Middle East” for

nals across six continents*, with container

17 consecutive years.

handling generating around 80% of its revenue.

In 2010, DP World handled nearly 50 million

In addition, the company currently has 10 new

TEU (20-foot equivalent container units) across

developments and major expansions underway

its portfolio from the Americas to Asia. With a

in 10 countries.

pipeline of expansion and development projects

The company aims to enhance customers’

in key growth markets, including India, China

supply chain efficiency by effectively managing

and the Middle East, capacity is expected to rise

container, bulk and other terminal cargo.

to around 95 million TEU by 2020, in line with

Its dedicated, experienced and professional

market demand.

www.dpworld.com

team of nearly 30,000 people serves customers in some of the most dynamic economies in

* As of September 2011.

the world.

Includes non-container terminals

The company constantly invests in terminal infrastructure, facilities and people, working closely with customers and business partners to provide quality services today and tomorrow, when and where customers need them. In taking this customer-centric approach, DP World is building on the established relationships and superior level of service demonstrated at its flagship Jebel Ali facility in Dubai, which has

IMS Marine Surveyors & Analytical Laboratories Ltd. Vancouver, BC IMS was established in January 1992 and has

is a FOSFA Superintendent and CFIA certified

which facilitate International Trading according

grown to become one of Western Canada’s

sampler for Phytosanitary Certification, and is

to governing standards and legal requirements.

largest independent marine surveying and cargo

also the Flag State Ship Inspector representing

IMS Laboratory is a FOSFA Analyst L1 (the only

inspection organisations. IMS has earned a

Bahamas, Barbados, Cyprus and Panama, and

one in Canada) and a COPA referee Laboratory.

reputation as being unbiased, objective and

Class Surveyor for CR Taiwan, OMCS Panama

IMS’s achievements in research and method

professional. Based in Vancouver, Canada’s

& Qualitas Panama. IMS is an IICL Container

development have been recognised by USA

largest port, IMS offers a comprehensive range

Inspector and the only certified ultrasonic hatch

and Canadian authorities and producers in

of professional consulting, superintendence,

cover tightness testing firm on the West Coast.

chemistry and oil testing. The application for

inspection,

The company is widely used by most major P&I

direct testing for sulphur and phosphorus by

and H&M Clubs for their various surveys.

ICP-OES has quickly become one of the most

testing

and

marine

surveying

services across Canada, USA and worldwide for International Traders, Brokers, Producers,

In today’s highly competitive and challenging

widely-used method in North America for the

Buyers, Charterers, Owners, Insurances and

shipping industry, losses can materialise in many

quality of vegetable oil, beef tallow and biodiesel

Legal Entities.

ways. Lost time, damage, leaking hatch covers,

testing, and is available online at: http://las.

IMS offers a full-service surveying and

cargo contamination, unprofessionally performed

perkinelmer.ca/Content/applicationnotes/far_

analytical laboratory, providing professional

inspection/surveying work, unfamiliarity with local

sulphurandphosphorusbiodiesel.pdf

testing, certification and consultation in the

conditions etc can be major cost factors. IMS

grain, oilseed, meals, fats & oils, biodiesel,

could reduce your exposure to costs and claims

chemicals, marine, environmental and food-

by being your on-site representative, providing

related fields. The company has developed

experience, prompt, factual, and competitively-

For more info visit: www.ims-van.com

sophisticated computer software for different

priced marine surveys, cargo inspections and

Captain Jostein Hoddevik, President

kinds of surveys and is fully compliant with

testing.

Dr. Tatiana Hoddevik, Head of Laboratory

relevant international standards. IMS became

IMS

offers

a

first-class,

reliable

and

Tel: (1604)298-9968 (24 hrs.)

ISO certified in 2001 and is currently certified

rapid analytical service based on modern

Fax: (1604)298-4862

under the ISO 9001:2008 standards by BSI. IMS

instrumentation and cutting-edge techniques,

E-mail: admin@ims-van.com

theBaltic Winter 2011 www.thebaltic.com

99


Commercial profiles

FX4Cash – so good it sells itself ord of mouth is often hailed as one of the

W

as the word has spread around the industry,

currency payment as if it were a $10 million FX

most powerful methods of marketing. It’s

numerous other shipping companies from Europe,

trade – in other words instantly traded at live

hardly surprising that we would rather take advice

the US and Asia are exploiting FX4Cash to handle

market rates.

from colleagues or friends, than the company

high volumes of cross-currency payments, which

By executing FX payments at live market

that is enthusiastically promoting its products or

often need to be made in distinctly exotic places

rates, costs can be driven down as less spread

services to us.

and currencies.

needs to be built in to the exchange rates. This

The best products and services should sell

Being a fully automated solution, transactions

is because there is no need to cover FX volatility

themselves, because customers will voluntarily

are processed faster, with an extremely high level

during the delay between when a bank receives

recommend their good experiences to others.

of accuracy (as there is no manual handling), and

the payment instruction, and when it can execute

This, say Deutsche Bank, is what it is seeing

typically funds reach the beneficiaries faster than

the FX conversion.

happen with its FX4Cash solution in a number

ever before – this is a very welcome benefit in a

You could say that FX4Cash is to pre-existing

of industry sectors, and in particular in the

sector where speedy delivery of funds can be

cross-currency solutions, what the iPhone was to

shipping industry.

critically important.

the earlier generations of mobile phones – not a

FX4Cash, put very simply, is Deutsche Bank’s

Being accessible via electronic (web based)

new idea altogether, but an existing idea that is

start of the art, highly flexible cross-currency

channels, SWIFT or secure file transfer, means

taken to a far higher level of sophistication and

payments platform.

most organisations can access FX4Cash with

client experience.

Launched in 2008, the platform enables

minimal changes to existing processes.

When marketing budgets are tighter than ever, it must be great bonus to have a solution

clients to process international (or domestic)

In developing FX4Cash, one of the biggest

cross-currency payments (and receipts) to or

challenges Deutsche Bank faced was to build a

from almost anywhere in the world, with more

real time linkage between its payment processing

Find out why so many of the world’s leading

than 125 payment currencies reaching almost

architecture in its Transaction Bank and its FX

organisations are already using FX4Cash. Contact

180 countries.

trading platforms in Global Markets.

Deutsche Bank at fx4cashteam@db.com

One of the first companies to adopt the

By overcoming that challenge, the result is

platform was a UK shipping company, and now,

a payments platform that can treat a $50 cross-

that sells itself!

The world needs risk P

opulations, technologies and data are

our opportunity: to unleash the world’s capacity

Facts and figures

growing faster than ever. Today’s emerging

to advance. To make our clients’ worlds go.

We focus our business on P&C (non-life)

market could be tomorrow’s super power. Today’s prototype could be tomorrow’s mainstream

insurance and reinsurance activities.

Insurance

Our Insurance businesses participate in more

product. Needs change as the world moves

Businesses that are moving the world forward

than 1,600 global programmes and lead more

forward faster.

choose us as their partner.

than 70% of these.

Whether it’s properties, transport, energy, art,

Because we analyse the numbers but listen

We have about 4,000 employees worldwide.

manufacturing, aerospace, contracts, people,

to their dreams. Because we’re solid but fast.

About 600 underwriters, 400 claims experts,

or insurance, moving things forward is what our

Because we’re experts in our field, but always

more than 200 engineers. And growing.

clients do. And moving forward means risk.

open to new possibilities. And because we make top service and fast, fair claims handling

We do risk like no one else

our priority.

We can serve clients in more than 100 countries. We have clear and focused corporate

Change is changing. Problems are greater. The

It’s all thanks to the widely experienced

responsibility activities at XL. Focused on

stakes are ever higher and answers are harder

underwriters who are experts in the industries

community and philanthropy, environmental

to find.

they serve, engineers who work all across the

stewardship, ethics and governance.

We’ve got what it takes to find answers where others don’t dare to search. We have the

globe and support teams that help them do what they do best.

knowledge and experience. Global capabilities.

From large corporations to mid-sized

Local experts. Scale and financial strength. The

businesses, even some inspirational individuals,

people, the drive and the technology.

we cover clients in more than 100 countries.

What we do sets ideas free, changes

Our capacity means we can work across their

industries and turns plans into reality. What we do

Casualty, Property, Professional and Specialty

invents the new and fixes the broken. We see it as

Risks.

100

theBaltic Winter 2011 www.thebaltic.com


Commercial profiles

KTK Tugs W

ith a fleet of powerful tugs, The Curacao

most effective and professional service.

kinds of ships manoeuvring in difficult conditions.

Towage Company provides superior tow-

As experts in the towage & salvage field,

They are all equipped with state-of-the art

age & salvage services not only in the bus-

our employees are involved in every stage

fire fighting, salvage and telecommunications

tling Curacao harbour, but also throughout the

of client service, from the towage & salvage

equipment. We pride ourselves on the proven

Caribbean, Central America and the northern

request implementation to completion, offering

raw, pure strength of our tugs, the engines and

coastal regions of South America.

continual functional and technical support.

the machinery we have used effectively since

Our services include: ocean towage, harbour

They have degrees from Dutch nautical schools

1985.

and coastal services, barge and dredger

and are constantly brought up-to-date on the

We have the expertise to turn strength into

transportation, fire fighting assistance, port

latest technological developments. Our close

the power to tow thousands of vessels a year

and terminal towage, crew management and

relationship with the Dutch Marine Division

and have the power to provide a range of

training, and technical maintenance, all based on

makes its expertise, support and guidance

professional, reliable and efficient services.

the Lloyd’s Register Quality Standards.

readily available.

Exceptional

functioning

and

effectively

Our mission statement is “Through expertise,

Our extensive skills encompass all aspects of

directing team members with Nautical, Technical

strength becomes power” and the our vision

implementation and operation, including business

and Management skills, coupled with extensive

is to position itself as a strong and reliable

requirements definition and development of

maritime knowledge make the Curacao Towage

towage company, serving both the domestic

functional specifications for client approval. The

Company strong and reliable.

and international sectors.

Curacao Towage Company is always available

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

online for handling client contact. We possess operational and technical

greater

experience that makes us strong and reliable.

Pletterijweg z/n, Willemstad, Curaçao,

value, thus optimising system functionality

Our powerful tugboats stand ready 24 hours a

Tel: (+599(9) 461-1055

and improving operational efficiency. This

day, able to rush out under any circumstances.

Fax: (+599(9) 461-2055

expertise combined with hands-on experienced

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

E-mail: s.reenis@ktktugs.com

employees, ensures that our clients receive the

angle, making them exceptional guides for all

Website: www.ktktugs.com

service,

increased

flexibility,

and

Trident Special Risks Versicherungsmakler GmbH – the marine kidnap and ransom insurance specialist

T

oday’s world of political and economic

privately

highly

such risks should have access to a network of

instability has unfortunately increased the

specialised in Marine Kidnap and Ransom

the best service providers, such as professional

level of risk of kidnap and hijack for ransom,

insurance and very well positioned to provide our

crisis management advisors, legal advisors,

especially for the maritime industry. The threat is

ever growing maritime client base access to the

media response advisors and maritime security

undoubtedly real and the losses, be it financial,

constantly changing international kidnap and

companies, just to name a few, should the need

personal or reputational, are greater than ever.

ransom insurance market.

arise. Because of this, we are constantly in

owned

insurance

broker,

contact with certain service providers that we feel

2011 has been a record year for pirate

We strongly believe that, next to ensuring

hijackings, with more than 30 hijacked vessels

robust preparation and preventative measures,

already in 2011 with ransom payments averaging

putting the right Marine Kidnap and Ransom

between US$5-US$5.5 million. Despite an

(and/or Marine Loss of Hire for Piracy) cover in

estimated US$1.3-US$2 billion being poured

place is essential in safeguarding extremely

annually into a complex naval counter-piracy

high-value

operation, pirate attacks are still at an all-time

Nevertheless, buying such a highly specialised

high. The Indian Ocean is plagued with piracy,

product has been and always will be, an

this phenomena is also spreading to new

extremely delicate matter for everyone involved.

Trident Special Risks

territories in the Gulf of Guinea. Armed security

Being long-standing Industrial, Maritime and

Versicherungsmakler GmbH

on board the vessels has, on the one hand,

Kidnap and Ransom insurance professionals, it

Ochsenwerder Landscheideweg 12,

proven to be a deterrent, on the other hand

is our strong belief that such matters should

21037 Hamburg

though, history does show that pirates adapt to

therefore only be handled by truly independent

Office: +49 40 30 89 30 29

changing situations.

and dedicated specialists, who operate in a

Mobile: +49 176 127 077 71

highly confidential and sensitive manner, which

Skype: leo.kissel

is also in-tune with the clients needs.

E-mail: leo.kissel@trident-sr.com

Based in the vibrant maritime city of Hamburg, Germany, we, at Trident Special Risks, are proud to be an independent and

human

and

shipping

assets.

We also strongly believe that anyone facing

theBaltic Winter 2011 www.thebaltic.com

provide the best possible solution in their field. Let our expertise be your peace of mind.

TRIDENT SPECIAL RISKS

www.trident-sr.com

101


Commercial profiles

MV “Lone” performs SAL’s heaviest-ever lift

O

n its maiden voyage, the company’s latest

of 1,719 tonnes was set ashore in just 2.5 hours.

which means it meets the highest environmental

new building MV Lone performed SAL’s

The speed and performance of the loading and

standards. It is also ISO14001 and OHSAS

heaviest-ever lift. With its lifting capacity of 2 x

discharging operation resulted from a successful

18001 HSE certified. The heavy lifter measures

1,000 tonnes SWL the vessel loaded eight

interplay and extensive preplanning between the

160.5 metres in length and 27.5 metres in width,

reactors weighing up to 1,719 tonnes and

joint team of SAL and Mammoet, the highly

and has a loading capacity of 11,000 tonnes and

measuring 45 x 8 x 8 metres.

skilled and experienced crew, and the state-of-

40,000 cubic metres.

As part of the RPLC Deep Conversion Project

the-art lifting equipment on board. The human

SAL ranks among the world’s leading heavy

Phase II in Venezuela these massive reactors

expertise of the SAL crew was accompanied by

lift shipping companies. From its head office in

were manufactured in Japan. They are destined

the necessary infrastructure on board the Lone:

North Germany, SAL operates an international

for the PDVSA Puerto La Cruz refinery in

a lifting arrangement of 40 tonnes and shackles

network of agencies and maintains its own

Venezuela. The project was awarded to SAL

weighing about 4 tonnes – equaling the weight

offices worldwide. The company has a total of

by the Dutch heavy lift specialist Mammoet

of two passenger cars. With this job, the vessel

570 employees across the world. It operates a

Logistics BV.

almost fully exploited its unrivalled lifting capacity

fleet of 16 heavy lift ships. The vessels’

On its voyage, the MV Lone first called at the

only weeks after being introduced into the market.

management is fully handled in-house. SAL’s

Japanese port of Higashi-Harima where two

Together with its sister vessel, MV Svenja, the

internal engineering department deals with all

reactors were loaded, it then continued on to

Lone is one of the two largest heavy-lift vessels

technical load-related matters, while developing

Muroran to take a further six reactors on board.

in the world. It has a lifting capacity of 2,000

innovative transportation solutions for individual

From Muroran the vessel sailed through the

tonnes, a speed of 20 knots and a DP2 system.

customer needs. With effect of 30 June 2011,

Panama Canal directly on to the port of

With these features, the Lone has all the

the K-Line Group acquired another 50% of the

Chaguaramas in Trinidad where the reactors are

necessary elements for undertaking highly

SAL Group and with that became the sole

temporarily stored before being carried to their

complex projects for the oil and gas industry as

shareholder of the company.

final destination of Puerto La Cruz in Venezuela.

well as for the offshore sector.

After careful preparation, the reactors were

Apart from its high performance, the Lone

discharged in record time: the heaviest reactor

also possesses an Environmental Passport,

www.sal-heavylift.com

Taking a hands-on approach S

ince 1979, West Atlantic Marine Limited has

We are also proud to have on our staff

Please visit our website www.wamcoltd.net or

provided the Bahamas and International

qualified surveyors recognised by the Society

www.westatlnaticmarine.net.

Insurance and Marine Industry with quality

of Accredited Marine Surveyors (SAMS), the

We look forward to serving you and

marine surveying and consultancy services. We

National Association of marine Surveyors

your clients.

are a full-service Marine Survey and Consultancy

(NAMS), and the International Institute of Marine

company that provides a very “hands on” station

Surveyors (IIMS).

that is somewhat different from the norm.

Our diverse marine services include – but

For the past 22 years, we have represented

are not limited to – marine surveying of a variety

the flag state requirements as inspectors

of marine craft, ranging from small private

and surveyors (non-exclusive agents) for

pleasure

ship registry within the Bahamas (Bahamas

ships of all sizes and types; cargo damages

Maritime Authority).

and structural damages to marinas, harbours

West Atlantic Marine is poised and ready

vessels

through

to

commercial

and ports.

to provide all marine interests (underwriters

Rescue, marine emergency, salvage and

and owners) with efficient and quality services

towage services, and loss adjusting are also

throughout the Bahamas, Turks and Caicos

available through our group of companies.

Islands and throughout the Caribbean. Our team comprises quality, internationally

Our aim is to provide our clients with fast, efficient and economical results, while

recognised general marine and engineering

maintaining

surveyors who possess maritime experience

service. We are proud to be a part of our

a

high

quality

product

and

and expertise in excess of 100 years combined.

clients’ solutions.

102

theBaltic Winter 2011 www.thebaltic.com


Commercial profiles

Worldwide Project Consortium The leading brand for project professionals

T

he Worldwide Project Consortium Ltd

• Warehousing, storage and distribution

to shippers of heavy and outsized cargo is also

(WWPC) is the leading dedicated network

• Cargo computer documentation, cargo

represented through Heavy Cargo News, an

for project cargo freight forwarders. Founded in 1998, WWPC deliveres a global marketing and network platform, based on a franchise agreement. Through annual membership conferences

tracking and EDI services hazardous cargo • Chartering by sea and air • Planning and consulting services.

and exhibiting at international trade fairs, WWPC

WWPC offices gain admission on their

has rapidly gained a very solid reputation among

knowledge and experience. Each formally

those who are actively involved in heavy and

undertakes to operate under a strict code

outsized cargo movements.

of conduct and only the most dedicated,

Our experts from around the world provide

experienced and viable experts in project

a full range of project planning and forwarding

forwarding, with a proven track record, will be

support services:

admitted to the WWPC.

• Project and logistic freight management

online publication and magazine.

• Supervision of heavy lifts, outsized and

Our companies have gained a steadfast

• International project forwarding by sea and air

reputation in international project forwarding and

Wolfgang Karau

• Door-to-door multimodal freight management

logistics management services around the world.

Director WWPC Ltd

• Inland transportation

The network is operated by transport-qualified

• Cargo consolidation

directors, assisted by a members’ elected board

wolfgang.karau@wwpc.eu.com

• Customs clearances

of advisors. WWPC is a member of the Baltic

www.wwpc.eu.com

• Customs tariff and by-law advice and

Exchange in London, United Kingdom.

Heavy Cargo News

consulting

The WWPC and its international marketing

Tel: +34 (0) 690 708 964

www.heavycargonews.com

Sea Marshals Ltd S

ea Marshals Ltd is a UK limited company

disembarking men and weapons in Muscat

Qualifications of guards include STCW95,

that provide security solutions to merchant

and Richards Bay, S.A. Sea Marshals Ltd are

SSO, Firearms certs, Anti-piracy course, first aid

vessels travelling through high risk areas in the

fully licensed members of SAMI - Security

and criminal records checked.

Indian Ocean, Arabian Sea, Red Sea and the

Association for the Maritime Industry.

Gulf of Aden.

Sea Marshals Ltd also has its own fleet of 5

Sea Marshals Ltd can supply both armed

vessels that can be provided for vessel escort

Fully licensed in Djibouti for services and

and unarmed security guards facilities and all

services. These vessels can hold between 20

weapons and also licensed in Galle & Sri Lanka

men are European nationals with a minimum of

and 40 men at one time. The vessels have a

Sea Marshals Ltd have facilities for embarking/

3 years military experience.

range of up to 5000NMs. Sea Marshals Ltd has a dedicated 24 hour operations centre located in the UK.

www.seamarshals.com/

theBaltic Winter 2011 www.thebaltic.com

103


Events

What’s on where A round-up of conferences, exhibitions and events in the shipping world January 16-17 Singapore February 7-8 London April 23-24 New York

February 21-22 London LNG Shipping Current and future opportunities in a market which many believe holds the key to emissions control.

Freight Derivatives & Shipping Risk Management

Maritimecustserv@informa.com

A course providing an introduction or shipping risk, freight rate, bunker and ship prices risk, freight rate options and clearing and settlement of shipping derivatives contracts.

March 6-7 London

www.balticexchange.com/training

Annual gathering for owners covering commercial and operational issues.

January 18-19 Singapore February 9-10 London New York 25-26 April

www.navigateevents.com

4th Chemical and Product Tankers

March 19-21 Stamford

Advanced Freight Modelling & Trading Spot freight rate dynamics, spot and time charter markets, modelling freight volatility and pricing options in freight markets are some of the topics. www.balticexchange.com/training

CMA’s Shipping 2012 This is the Connecticut Maritime Association’s major international conference. wwwshipping2012.com

March 27-29 Copenhagen

January 30-31

Greenship Technology conference

Middle East Liner Shipping Conference

Challenges for sustainable shipping.

What does the future hold for Middle East liner services? Maritimecustserve@informa.com

Maritimecustserve@informa.com

May 30-31 Jakarta

Feburary 7-8 Copenhagen

10th Asean Ports and Shipping Conference

Ro-ro Shipping Conference

The biggest annual ports, shipping and logistics exhibition in the Asean region.

Optimising environmental performance and financial viability. Maritimecustserve@informa.com

Enquiries@transportevents.com

June 4-8 Athens Posidonia 2012 The world’s largest maritime event will be taking place at the Matropolitan Expo Centre this year. www.posidoniaevents.com

104

theBaltic Winter 2011 www.thebaltic.com


Posidonia 4-8 June 2012, Metropolitan Expo, Athens Greece

A unique blend of business and social interactions at the heart of Shipping Be part of the great Posidonia experience at a state of the art new venue

The International Shipping Exhibition

Organisers: Posidonia Exhibitions SA, e-mail: posidonia@posidonia-events.com

www.posidonia-events.com


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