Russia’s invasion of Ukraine has caused thousands of deaths, the biggest population displacement since World War II, and devastated an economy the World Bank says will need a minimum $411bn ten-year repair bill. Maksym Khaulin, Director Odesa-based INTRESCO global ship management company, tells Colin Chinery how his company is succeeding in facing these challenges.
Early on February 24th, 2022, and in a major escalation of the eight-year Russo-Ukrainian war, Russian forces, massing across an east-to-west arc, launched a full-scale invasion of Ukraine.
Maksym Khaulin, Director of Odesa-based INTRESCO global shipping company, left Ukraine one week before that for a holiday in Europe, but on February 25th he headed for Greece.
Today, Mr Khaulin is directing his premium global ship management operation from offices in Athens and Odesa, which has been functioning normally throughout the war. INTRESCO is one of many Ukrainian shipping companies that de-camped to Piraeus; the capital of the world’s third-biggest ship-owning nation. From there, Mr Khaulin surveys the future with resolution and cautious optimism.
INTRESCO ever ready
“The war brought about many bad things, but our company was ready for any scenario,” Mr Khaulin explained, “and our strategy and growth – including the upgrading and development of our fleet – are not really connected to the war.”
Co-founded by Mr Khaulin in 1997, INTRESCO delivers integrated quality ship management services including vessel operations and maintenance, chartering, crewing, finance, purchase and sales.
“Cost efficiency, professionalism, safety and environmental pollution prevention are among our core attributes,” he continued.
A specialist in dry bulk, the 14-vessel fleet carries grain and grain products, steels, fertilisers and other commodities along worldwide shipping routes. Russia’s effective blockade of the Black Sea has put a near stranglehold on exports of steel – Ukraine is a major supplier to European markets – and grain.
Steel, once the top earner with 40 to 60% of cargoes, has now been replaced by fertilisers. This now accounts for 60% of INTRESCO’s business, trading into the UK, Germany, France, Italy, Poland, the Baltic states and North Africa.
Opportunity knocks
For Mr Khaulin, entry into the dry bulk market was a matter of ‘opportunity knocks’. He joined a local tanker shipping company where he was taught different aspects of the industry. “And since it didn’t have a dry cargo department,” he said, “I was invited to make a go of it. I started to liaise with charterers, and having gained that experience in nine months, I opened my own company in 1995.”
Two years on, he met his two future business partners and launched INTRESCO (International Repair and Shipping Company), specialising in ship repair and modernisation. Commercial management soon followed, and five months into business INTRESCO bought its first general cargo vessel, the shallowdraft single-decker Sagitta for operations in the Black Sea, the Sea of Azov and the Mediterranean.
Eighteen months later, increasing activity in technical management services saw the opening of a branch in Odesa. A natural transit point for goods traveling between
Europe and Asia, shipping accounts for almost 10% of Ukraine’s GDP. In 2001 the company took management of the first Handymax bulk carrier – the Selecta, and by the summer of 2006 was managing six vessels of this type, with the addition of the Supramax-class Santana.
A crewing facility opened in Odesa the next year. “Ukraine seafarers are in big demand because they are highly experienced, trained, versatile and speak excellent English,” Mr Khaulin said.
Then, four months before the 2008 global financial crisis, INTRESCO switched from ship repair to traditional ship management services, operating 20 vessels including 10 Handymax and Supramax bulk carriers. On order were a further four bulk carrier vessels.
Crash and re-focus
Then came the crash and a shipping meltdown that triggered cut-throat completion and corporate fatalities.
“INTRESCO suffered during that crisis,” explained Mr Khaulin. “Eight years on, despite battling to keep our bulk carrier division, we sold our last two bulk carriers.
“The financial crisis taught us many things: when we reactivated INTRESCO in 2016, we determined we would focus on smaller Handysize vessels to enable us to find our niche and become a player in the market.”
Today’s 14 vessel bulk and general cargo fleet ranges from 10,000 to 20,000dwt. 2023 is also seeing a major restructuring, according to Mr Khaulin:
“Starting from this year, we will be replacing the old tonnage; renewing it so that we will have no vessel older than 2008 or 2009.
“In addition, we are going to sell all vessels up to 12,000 dead weight, leaving us to manage vessels only between 12,000 and 20,000. Those below 12,000 will be sold and replaced with modern and bigger vessels. Fleet numbers will remain about the same, 14 to 15.”
With 20 sailors on board a typical vessel, and changes every six months, INTRESCO has a crew count of 500. And if quality crewing and recruitment are a constant challenge, the war has brought major new difficulties.
“Currently we have a big problem,” Mr Khaulin explained. “Many Ukrainian seafarers are living abroad now and cannot return because they might be mobilised, leaving their families without income.
“So, when you are looking for a Ukrainian crew – and 99 per cent of ours are Ukrainian – you must search all over the world to find them. It’s a big issue, and even with Skype
and Zoom interviews, the process is more difficult now.”
As well as crewing, INTRESCO covers every aspect of vessel performance, focusing on safe and environmentally sound operations, high-quality maintenance programmes and achieving customer goals. This includes everything from chartering, operation, repairs and dry docking, upgrading, technical maintenance and safety, to peripheral activities such as insurance, professional indemnity insurance, claims handling and accounting, plus quality bunker and lubricants supply.
Experience and excellence
“We have a reputation for providing excellent and expert technical support; our staff are highly trained and dedicated,” continued Mr Khaulin. “We have the experience necessary – the number one priority in the marine industry today. What makes our company special is our people; they have been with us for many, many years, indeed a minimum average of 10 years – when somebody comes to our company, they don’t leave.
“Ever since 1997, we maintained longterm relations with charterers, and this will drive us into the future. They know they can rely on us to deliver their cargo without any problems.”
Meanwhile, the war that began with the 2014 covert invasion of the Ukrainian autonomous republic of Crimea by disguised Russian troops, was entering a new phase with Ukrainian forces poised for a counteroffensive. Strategic necessity goes beyond “regaining what is ours,” said Mr. Khaulin, dismissing Russian claims about language and ethnicity.
“When the war started, we, along with other shipping companies, provided a lot of assistance to the army and to the people, buying medical supplies and helping refugees,” he concluded. “This was quite an achievement for our company.
“I’m a positive man, I am Ukrainian, and want to go home to Ukraine and move all our team back to Odesa. So yes, I think we will have only good news. Everybody is working towards this.” In early May, Mr Khaulin returned to Odesa and continues his business activity from the Odesa office. n
