Maritime CEO Issue Two 2015

ISSUE TWO 2015

www.maritime-ceo.com

Nor-S hip Speciaping l

Norw offsho egian ow ne travel re, finance rs, plus o and Rich Lur annual ist

Fredriksen’s new front man Robert Macleod and the revival of Frontline

www.classnk.com

Manifest

3 At The Prow

Economy 5 6 7 8 9

US EU China India Brazil

42 Masterbulk 43 Essar Shipping 44 Valles Steamship 45 Tiger Group Investments 47 Atlantic Container Line 48 Western Bulk 49 dACC Maritime 50 Giovanni Visentini 51 Siem Offshore OSV

Markets

Recreation

11 Dry Bulk 13 Tankers 15 Containers 17 Offshore 19 Finance

52 Wine 53 Gadgets 54 Books 55 Travel 56 Golf 57 Yachting

The Rich List 20 The most valuable fleets

Executive Debate 32 Navigating through ECAs

Opinion 58 Secret Container Lessor 59 The Contrarian 60 MarPoll

Profiles 36 Cover Story Frontline Management 39 Ardmore 40 Euronav 41 Avance Gas

Issue TWO 2015

56 1

At the prow

An ASM publication Editorial Director: Sam Chambers sam@asiashippingmedia.com Associate Editors: Jason Jiang jason@asiashippingmedia.com Katherine Si katherine@asiashippingmedia.com Correspondents: Athens: Ionnis Nikolaou Bogota: Richard McColl Cairo: Camelia Ewiss Cape Town: Joe Cunliffe Dubai: Yousra Shaikh Genoa: Nicola Capuzzo Hong Kong: Alfred Romann London: Holly Birkett Mumbai: Shirish Nadkarni New York: Suzanne Smith Oslo: Hans Thaulow San Francisco: Donal Scully Shanghai: Colin Quek Singapore: Grant Rowles Sydney: Ross White-Chinnery Taipei: David Green Tokyo: Masanori Kikuchi Contributors: Nick Berriff, Andrew CraigBennett, Paul French, Chris Garman, Lars Jensen, Jeffrey Landsberg, Dagfinn Lunde, Mike Meade, Peter Sand, Neville Smith, Eytan Uliel Editorial material should be sent to sam@asiashippingmedia.com or mailed to Office 701, 9 Renmin Lu, Zhongshan District, Dalian, China 116001 Commercial Director: Grant Rowles grant@asiashippingmedia.com Sales Director: Helen Ong helen@asiashippingmedia.com Maritime ceo advertising agents are also based in Japan, Korea, Scandinavia and Greece — to contact a local agent email grant@asiashippingmedia.com for details MEDIA KITS ARE AVAILABLE TO DOWNLOAD AT: www.asiashippingmedia.com All commercial material should be sent to grant@asiashippingmedia.com or mailed to 30 Cecil Street, #19-08 Prudential Tower Singapore 049712 Design: Tigersoft Design Printers: Allion Printing, Hong Kong Subscriptions: A $120 subscription is charged for 2015’s four issues of Maritime ceo magazine.

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Issue TWO 2015

Shipowner forum

W

e held one of our regular exclusive shipowner lunches in late April at the Fullerton Hotel in Singapore.

Sponsored by Univan Ship Management, the event drew 12 shipowners who, combined, control more than 100m dwt. The idea behind these gatherings is that they are informal – a chance for owners to speak freely about their gripes without fear that they will be quoted in the media. They won’t be, but, dear reader, it would be remiss of me not to impart some of the nuggets of information from the two-hour session, without mentioning names.

Too much shipbuilding capacity and way too much easy money sloshing around continue to make life hard for “irresponsible” owners, one leading bulker player said.

Consolidation in dry bulk was deemed less likely than many other sectors as the cost of entry – how much it’ll set you back to go out and buy ships – is so low. Consolidation might come, however, from private equity pushing owners together as terms for restructuring.

Restructuring formed a fair chunk of the discussion in the end.

Why there has not been more bankruptcies in this prolonged downturn was deemed down to the high number of restructurings. “Banks are kicking the can down the road because they have so much invested in shipping. In a normal dog-eatdog world there should be more bankruptcies,” one owner reckoned, adding: “It won’t happen because the banks have such a vested interest.”

The current craze for pooling vessels was also criticised rather memorably as “a chicken’s way out of getting a steady revenue without having to enter the spot market”.

Chinese shipyards came in for heavy criticism about build quality, especially for ships built in the boom

years, when steel prices were high and corners cut. Similarly newbuild supervisors took some stick – one person attending dismissing many of them as “ex-chief engineers looking for a cushy number”.

Much of the debate provided us with the necessary food for thought to come up with this issue’s set of topical questions for our regular MarPoll survey. You, the reader, seem to blame these “irresponsible” shipowners too for the pickle they are in. Results from the survey are on page 60.

This is a decidedly Scandinavian themed issue of the magazine, given its distribution at Nor-Shipping in Oslo this June. For those coming to the show and unsure what to do, head on over to page 55 for our handy travel guide to the Norwegian capital.

As ever, any questions, quibbles or comments, please drop me a line at sam@asiashippingmedia.com. ●

Sam Chambers Editor Maritime ceo

3

ECONOMY REGULAR US

A broader recovery?

Washington is predicting an ambitious 3% growth this year

A

nalysts are now talking about a broader recovery in the US economy. To highlight this they point to continued job growth in the first quarter, particularly the growth in higher paying positions, as a sign of a broadening labour market recovery.

Most of the US economy’s recent job growth has been in the lower waged service and hospitality industries – jobs that do not add swiftly to a rebound in consumption across the board. However, a growth in higher waged employment should lead to a concomitant boost in retail sales over the remainder of 2015 and into 2016, if the pattern continues.

Better employment and wages numbers have jump-started the stagnant construction industry. At first this is for lower income housing – single family housing starts and multifamily building was up 27% in the first quarter, according to the trade group, Associated General Contractors. Office construction is also up sharply as companies consolidate locations and renovate, the association believes. More job security seems to be encouraging more ‘big-ticket item’ expenditure by consumers and SMEs with stronger then expected car and truck sales in the first quarter of 2015 prompting many manufacturers to build or

Issue TWO 2015

expand factories. Still the economy needs to create jobs at all levels.

The Center for Economic and Policy Research has said that large numbers of low-paying, part-time jobs in the restaurant and retail sectors are still needed, especially to provide entry-level work experiences for teens.

US retail petrol prices Dollars per gallon 2011

2.6

2012

3.1

2013

3.2

2014

3.1

2015

2.2

Source: US Energy Information Agency

Certainly the 0.2% rise in GDP in the first quarter (following the so-called ‘winter wipeout’ of the last quarter of 2014) is small and reflects America’s weaker trade performance, falling business investment and still cautious consumers. But the last quarter of 2014 saw a contraction of 2.1% and this appears to have been corrected.

The analyst consensus is that low export orders are now the biggest drag on the American economy.

Exporters have been hard hit by the stronger US dollar and the lingering

effects of the labour dispute that slowed activity at West Coast ports.

Net exports fell 7.2% in the first quarter, which shaved nearly a full point off the overall growth figure.

This led manufacturers to pull back on investment and growth plans.

While the lower global oil price has been helpful to manufacturers it has meant that some oil companies have shelved new drilling plans and so reduced production until there is a price correction in their favour. Still gas prices at the pumps have fallen (as the chart to the left shows).

However, many believe that exports will rebound throughout the summer and into the second half of 2015. The Department of Commerce in Washington has predicted an ambitious 3% growth overall for the American economy in 2015.

This is based on a belief that several things will happen this year – first, higher employment levels and job security will boost consumer spending and therefore retail sales and employment; secondly, energy related spending will eventually level out and; three, the dollar will fall somewhat in relation to the euro.

That places a lot of expectation on the coming six months in America; expectations that require global prices to shift as well as American enterprise to kick-start. ●

5

ECONOMY REGULAR EUROPE

Spring or winter?

Analysts cannot make up their minds what season best describes the continent’s economy

P

olitically the EU faces a raft of challenges – from trade agreements and relations with Russia through to the reality that now the UK, following the re-election of David Cameron’s Conservative Party, will have a referendum on EU membership before the end of 2017.

That last argument will be for the British people ultimately but will have reverberations throughout the union. Early reports state that both major partners – France and Germany – are concerned both about which way the British decision will go and also what they may spur politically in their own nations among those disenchanted with the union.

However, the EU continues to build bridges – most recently with Turkey and Mexico to expand trade as well as a free trade agreement (FTA) with India. Additionally, the snafu over Greece and debt appears to have been largely resolved amicably and has calmed fears of the imminent collapse of the Eurozone.

Anti-Russia sanctions remain more fraught with belligerence from Moscow and disagreement within the union on how far to go with the sanctions regime.

Still, arguably, the EU is on the The EU’s GDP Annual % growth/decline rate Annual

% growth/decline rate

Jan 2013

-0.7

July 2013

-0.1

Jan 2014

1.0

July 2014

1.2

Jan 2015

1.3

Source: Eurostat

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road to economic recovery. Slight improvements in GDP growth, the implementation of structural reforms and declining unemployment are all positive factors though many EU member states retain high debt to GDP levels. Many in the Eurozone remain bullish believing that a combination of a lower global oil price, weakness in the Euro and greater trade stability internationally will give the zone a boost with an anticipated 0.5% pick up across the area. If this happens then it will be the fastest growth in the Eurozone for four years. This would also outstrip American growth and Britain’s (in the EU; outside the zone). UK GDP growth for the first quarter of the year came in at just 0.3%, after a growth of 0.6% for the last quarter of 2014. The US managed only 0.2%.

Among the finance ministers of the zone this rebound is being heralded as the Eurozone’s ‘Bright Spring’.

But there are also reasons why spring may not blossom quite as expected in the Eurozone. China,

and its import demands, remain a major question and, while calm at the moment, the Greek debt situation and the possibility of contagion infecting neighbouring Eurozone partners is not finally decided yet. The European Commission is cautiously welcoming this projected growth though notes that further structural reforms are needed in many countries, that investment needs to be boosted and that ‘fiscal irresponsibility’ still needs to be addressed in many member states.

This lack of structural reform and investment applies not just to smaller states and newer members but also – the commission has pointed out – to major payers such as France.

While much of the rest of the year will inevitably be taken up with politics – Britain’s referendum, Greek debt scheduling, Russian sanctions – analysts will look to the export numbers and employment gains to reveal whether or not the EU is out of the woods yet economically. ● maritime ceo

ECONOMY CHINA

The contradictions of cooling

A rebalanced economy marches to a different beat

T

here’s a contradiction regarding China’s economy at the moment. A lot of international pressure, and some internal too, was put on Beijing’s policy makers to ‘cool’ their red-hot economy. By and large China has achieved this – the state sector (though still considerable by most global standards) has shrunk considerably from what it was 20 years ago while private enterprise now accounts for 80% of total employment. Most prices are set by market apparatus and not central government fiat; investment flows have modified and, as Beijing was urged and promised, domestic consumption has become the driver of the economy and not export outflows or investment inflows. In short, China has effectively rebalanced its economy.

However, as a consequence of this rebalancing GDP growth has dropped from the heady days of a decade or more ago. It now hovers around 7%, which, for those old enough to remember, was a dip that was supposed to crash the economy.

But no crash has come and China seems to be living with 7%.

In part this is due to strong wage growth – and wages are still growing.

Income rose by 8.1% year-on-year

Issue TWO 2015

during the first quarter of 2015, down slightly from 8.6% during the first quarter of 2014. Crucially income for migrant workers, those who move from the countryside to staff the nation’s factories and construction sites, rose a significant 11.9%, up from 10.1% a year ago, reflecting a tight labour market. Jobs are still being created.

Growth of retail sales in China Year-on-Year % growth March 2012

10%

December 2012

10.7%

September 2013

10.8%

June 2014

10.9%

March 2015

11%

Source: CEIC

This wage growth has now filtered into the consumption economy and retail sales are growing at almost 11% per annum. People are continuing to buy property and this is reflected in furniture sales outstripping overall retail growth at nearly 21%. The gradual shift in retailing from bricks-and-mortar stores to online is progressing rapidly with online ecommerce business up more than 40% since the start of the year.

Not everyone is enjoying this

strong growth rates though, and some of those affected sectors could impact on shipping and logistics.

Mining rose only 1.4% in March and this will have an impact on the volume of commodities being shipped out of China over the rest of the year. However, technical equipment manufacturers still seem to be finding orders – telecommunications equipment shipments rose by 12% in March as did shipments of IT and computers. This means things are not as rosy in the northern portions of the country – home to most commodities extraction and refining businesses as well as older state-owned industries – as the eastern seaboard and south – where most of the hi-tech production is concentrated.

The first quarter numbers don’t look good for exports – China’s exports fell 15% year-on-year in US dollar terms in March. But the huge difference is explained largely by the lunar new year effect and monthly volatility. There is no evidence of collapse in China’s main export markets, nor is there reason to believe that China’s exports suddenly became far less competitive. Most analysts expect export numbers to pick up in the second quarter. ●

7

Economy India

Welcome but marginal growth Red tape must be cut as promised

T

he Indian economy is expected to grow marginally higher at 7.5% during 2015 compared with 7.2% in 2014.

Analysts expect interest rate cuts will buttress private sector spending, which will be further boosted by the cut in world oil prices. Moody’s, the International Monetary Fund and the World Bank all seem to concur with this assessment. This means that India has (or will, if it stays on track) surpass China’s growth rate this year and be the world’s fastest emerging economy.

In stark contrast to India’s South American BRIC partner, Brazil, low inflation rates have enabled the Reserve Bank of India to cut interest rates by 50 basis points, easing pressure on the private sector. Lower rates as well as the government’s infrastructure and disinvestment programs should provide a boost to domestic-oriented industries. As ever the government says it wants to increase foreign investment – though analysts caution that this is a

8

sentiment regularly proffered though rarely backed up with necessary policy changes to facilitate it actually happening. The Modi government has vowed to cut the red tape that has prevented so much investment, particularly in sectors such as retail and consumer, but this is still largely to be enacted.

India’s inflation rate % April 2014

8.59

July 2014

7.96

October 2014

6.46

January 2015

5.19

April 2015

5.17

Source: Ministry of Statistics and Programme Implementation

However, the government’s stated plans to divest itself of key holdings in many businesses is progressing, offering encouragement. Approximately 5% of the Rural Electrification Corp, a state-owned power company, was sold in early April. Strong investor demand for

the electricity company suggests that the government should have few problems selling its other assets.

This means divestment is adding to the treasury in New Delhi and appears popular with the public and investors. Similarly the government has reiterated that it will introduce a goods and sales tax (GST) by April next year, a move that is widely expected to meaningfully increase India’s tax to GDP ratio. While a GST could dampen spending it is felt that the growth of the Indian middle class and low inflation should offset any price rises and allow retail spending to power on while also earning the treasury a new and important source of revenue.

Still, exports could be better. The World Bank has noted recently that the potential for rapid export growth in the near term remains constrained by both supply and demand conditions across India. On the supply side, Indian merchandise exports have not been able to keep pace with the growth in world exports. On the demand side, the global export market seems to have peaked. The bank believes that India will need to increase its manufacturing competitiveness significantly to carve a space for itself among the world’s large exporters. For this, the country will require an infrastructural boost to bring it at par with the world’s manufacturing hubs, in addition to the competitive supply of labour, land, finance, and skills, as well as a friendly business environment.

The Modi government appears to be largely delivering on what it promised when elected. But, as analysts, rating agencies and international lenders have warned – the pressure to maintain structural change needs to be kept up. ● maritime ceo

Economy Brazil

‘The old days of the commodities boom are over’

Structural problems such as inflation are reining in the country’s chances

B

razil continues to disappoint.

Central Bank analysts in Sao Paulo expect Brazil’s gross domestic product (GDP) to contract 1.2% this year, slightly worse than many private analysts have been predicting. Worryingly, but not wholly unexpectedly, the inflation rate was 0.71% in April and came in at 4.6% during the first four months of this year, a figure that was above the government’s target for the entire year.

The government’s official inflation target is 4.5% for the year, with a 2% band, a band that now looks like it might be exceeded by year-end. Some believe inflation could go as high as 8%, the highest since 2003, when prices surged 9.3%.

The basic problem seems to be that with structural problems such as inflation the economy is struggling to take off. Economists now expect Brazil’s gross domestic product to contract 1.18% this year and to perhaps manage growth of just 1% in 2016. The old days of optimism and growth fuelled by a commodities boom, that saw the economy reach 7.6% GDP growth in

Issue TWO 2015

2010, are decidedly over. With global energy prices slumping and major buyers, such as China, reducing their purchasing, the commodities sector is struggling. Add to this that the sector is mired in scandal currently – it is claimed that hundreds of millions of dollars were allegedly skimmed from Brazil’s state-run oil giant, Petrobras by the country’s top construction companies.

Reports are growing that Brazilian industries are increasingly offshoring and moving production now to China, as well as Turkey and Russia. Most of this is low end – textiles, footwear, etc – but these sectors are significant employers and constitute a major part of Brazil’s exports when commodities and agricultural products are factored out. The real has dropped more than 13% against the dollar since the beginning of the year.

Brazil’s GDP

% change y-o-y

2012

0.8

2013

0.9

2014

-0.2

Source: Instituto Brasileiro de Geografia e Statistica

Looking to the rest of 2015 the Central Bank likes to accentuate the positive. Arguably this is a good time to invest in Brazil and the bank has forecast an increase in foreign investments for the year from $57bn to $57.5bn, and to $60bn in 2016. But notoriously poor infrastructure, corruption and the mass of bureaucratic red tape that still holds Brazil back from attracting investors may mean that despite fiscal conditions this influx of investment doesn’t happen.

Much of the country’s rebound, if it happens, will be down to the decisions taken by president Dilma Rouseff. It appears that she has managed to make enough policy changes to protect Brazil’s international credit rating – junk status has been avoided. Yet she still has to tackle both large scale subsidies to unproductive state industries and high tax levels that dampen consumer spending. As ever it seems Brazil’s economy is potentially on the cusp of being unleashed – but, for Rouseff, making the necessary decisions to allow the leash to be loosened is proving hard politically. ●

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Markets REGULAR Dry Bulk

Capes more vulnerable as Vale admits weakness The Big Four miners are likely to cut production targets, warns Jeffrey Landsberg from Commodore Research

J

ust a few months ago, FMG was the first of the Big Four iron ore miners (which include Vale, Rio Tinto, BHP, and FMG) to finally break away from the Big Four’s long-held united front of insisting on keeping robust iron ore production expansion plans intact. FMG finally flinched first in late March when FMG’s chairman, Andrew Forrest, publicly advocated that each of the Big Four miners should cap iron ore production. His position was met by a large amount of push back, but the weeks that have followed have seen two other Big Four miners change their tune as well.

A few weeks after FMG’s announcement, BHP announced that it had decided to defer its plan to debottleneck Port Hedland. This means BHP will achieve its expansion target at a slower place than originally planned. BHP publicly continues to target reaching the 290m annual production level, but deferring plans to expand Port Hedland’s inner harbour means the original target of being able to ship 290m tons of iron ore on an annual basis by the middle of 2017 is no longer in play. A date for when BHP now plans on being capable of shipping that amount has not been yet been announced.

Overall, iron ore prices have continued to become a very nationalist issue in Australia and Commodore Research continues to believe that Australia’s three major iron ore producers could be forced and/or convinced to lower their robust iron ore production targets by a considerable amount.

We remain extremely concerned for global iron ore prices for the second half of this year (as the second half

Issue TWO 2015

of every year is when Australian and Brazilian iron ore production rises by very large amounts due to seasonal factors). During the second half of this year another wave of extreme nationalism from Australian politicians could surface, as iron ore prices are likely to again come under heavy pressure then.

What is equally disturbing for global iron ore production prospects, and therefore the capesize market, is that Vale has also recently made a change and has strayed from its own long-held insistence that it will keep its robust iron ore production expansion targets intact. At the end of April, Vale announced it is now open to cutting as much as 30m tons of iron ore production from its most expensive mines.

As of now, though, Vale’s 340m ton production target for 2015 remains intact. However, Vale finally conceding that it could slow its iron ore production growth is very troubling for an already struggling capesize market.

Vale reported a loss of $3.1bn in the fist quarter, which has prompted the company to finally concede that robust iron ore expansion targets must be at least reconsidered.

Overall, the capesize market could awake any morning to find Vale (or one of the other Big Four iron ore miners) having announced lower iron

ore production targets.

Long-haul Brazilian iron ore shipments remain a vital part of the capesize market, and the potential for robust iron ore production (and shipments) from Brazil remains a very positive potential development to look forward to for the capesize market.

However, robust Brazilian iron ore production growth is not at all guaranteed. For now, though, Vale’s iron ore production is expected to increase this year by 13m tons and the huge 450m ton mark still is part of Vale’s current plan. However, this could change. In addition, Anglo American continues to forecast that its new Minas Rio Brazilian mine will produce up to 14m tons of iron ore this year and up to 26m tons by 2016. In comparison, less than 1m tons of iron ore was produced from the Minas Rio mine last year. However, Anglo American’s plans also could ultimately change. ●

Vale’s Current Iron Ore Production Forecast (2014-2018) 460mt 420mt 380mt 340mt 300mt

2014

2015

2016

2017

2018

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Markets REGULAR Tankers

Is this run sustainable?

Erik Broekhuizen from Poten & Partners assesses the chances for VLCCs going forward. Overall, he gives them a thumbs up

T

he freight market for tankers in general and for VLCCs in particular has been strong so far this year. Earnings for the year 2015 to date on the benchmark AG-East route are significantly higher than during the same period in previous years and pundits expect rates to remain solid throughout the year and into next, even though there will be seasonal fluctuations. What are the key underlying drivers for the strong market and what are the risks?

Despite earlier expectations to the contrary, world oil demand growth has been relatively strong so far this year. This is in part due to unexpected factors, such as a rebound in European product demand as well as increased growth in India and higher demand for transport fuels in the US. Lower oil prices have also supported oil demand.

The International Energy Agency recently raised its forecast of global oil demand for 2015 by 90,000 barrels a day to 93.6m barrels a day, a gain of 1.1m barrels a day relative to 2014. Growing oil demand is obviously supportive for the tanker market.

Despite sharply lower prices, global oil supply is showing impressive

S/Day 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 -­‐10,000 -­‐20,000

annual gains of 3.5m barrels a day, split between OPEC and non-OPEC production. Since OPEC announced during its November 2014 meeting in Vienna that they would not cut their quotas, production has been on a tear and shows no sign of letting up. OPEC crude oil output soared by 890,000 barrels a day in March, driven by sharply higher supplies from Saudi Arabia, Iraq and Libya, and production exceeded 31m barrels a day. This was the highest monthly increase in OPEC production in nearly four years. Since oil supply growth far exceeds increases in oil demand, crude oil stocks continue to build worldwide, in particular in the United States.

There are also signs that the use of Tankers for floating storage is on the rise, despite the fact that the level of oil price contango does not seem to justify storage economics.

Another positive for VLCC owners is that commercial control has been consolidating in fewer hands. At the end of 2013, Euronav agreed to buy the Maersk VLCC fleet. Shortly thereafter, General Maritime, which also had their eyes on the Maersk vessels, bought the VLCC orderbook of Scorpio Tankers. This deal was later followed

Arabian Gulf -­‐ Far East VLCC Rates

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 2012 2013 2014 2015

Issue TWO 2015

by the merger of Genmar with Navig8 Crude Tankers in 2014. Earlier in the same year, VLCC Chartering was established, bringing together the VLCC fleets of Frontline and Tankers International. These deals have levelled the playing field somewhat, as it gives owners more information and creates more discipline in the market.

Fleet growth has been fairly subdued so far this year. Six VLCCs have been delivered year to date, with another 28 newbuildings scheduled to enter service during the remainder of the year. However, deliveries will pick up in 2016 and this could pose a risk to tanker rates if ton-mile demand growth slows down. So far, the overall tanker orderbook remains reasonable and expectations are for modest fleet growth through 2017. The risk is, however, that the high rate environment will cause owners to contract too many new vessels, especially since shipyards still have ample capacity available and second tier yards in particular may offer discounted pricing to secure forward cover.

In conclusion, the VLCC market is fairly balanced and if the oil keeps flowing and if the shipowners avoid ordering too many vessels (two big ‘ifs’), the outlook for the large crude tankers remains favourable. ●

13

Markets REGULAR Containers

Decline and fall Freight rates are plummeting to record lows on the Asia – Europe trades, writes SeaIntel’s Lars Jensen

S

hippers of spot freight from Asia to Europe have in the past months enjoyed constantly declining freight rates, while carriers are entering a state of crisis. In the span of 14 weeks, the spot rate from Asia to North Europe declined 73%.

And despite the increase on May 1, the rate to the Mediterranean is still down by 53% in the same period. The North Europe rate of $343 per teu as reported by the Shanghai Shipping Exchange is the lowest on record – with the previous low point being in the midst of the global financial crisis, which had caused container demand to collapse.

It must be clear to all involved that these freight rates are untenable for the carriers. Even though the oil price has been essentially cut in half since October 2014, the associated cost savings for the carriers are insufficient to make such low freight rates viable in the long term. When the reported spot rates are ‘cleaned’ from the Bunker Adjustment Factor Spot rate Asia-North Europe

Issue TWO 2015

(BAF), we find that the current spot rate exclusive of BAF has dropped below $100 per teu. And this is a level including additional surcharges such as the Aden Gulf and Suez surcharges.

This low level is in itself not a guarantee that rates will not drop even further – we have previously seen negative base rates on the Asia-North Europe trade, but it does clearly show that such rates will not last.

The carriers are forced to react to this development, and their reaction is entirely predictable.

They will move to reduce capacity in order to restore freight rates to more viable levels. This is typically done through the cancellation of individual sailings – so-called ‘blank’ sailings – which have a disruptive impact on shippers’ supply chains.

Additionally, carriers will attempt to cascade surplus tonnage into trades that appear to be more profitable.

An example of the latter can be seen in the North Atlantic where freight rates have remained fairly stable despite the decline in oil prices. In the past few weeks several service changes have been announced on the North Atlantic, which will increase capacity in this market by 20%. This will, in all likelihood, result in destabilising freight rates in yet another trade lane.

It is easy to blame the carriers for ordering too much tonnage,

hence causing the underlying supply/ demand imbalance and associated freight rate instability. However, one might just as well look at the behaviour amongst many, though not all, of the shippers. We find a clear tendency of shopping around for lower rates in search of additional cost savings. However, the logical end-point of this endeavour are the sudden blank sailings and associated supply chain disruptions.

For those shippers who do have a desire to remain loyal to their carriers, and contracts, the problem is that if sufficiently many other shippers act opportunistically, the carriers will still be forced into the blank sailing scenario.

On this background it appears that the instability in both rates and blank sailings are a new normal for the industry. ●

15

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Markets REGULAR Offshore

A more rational industry is bound to materialise Mike Meade from brokers M3 Marine suggests the pain offshore is going through is necessary and will make the sector stronger in the long run

I

’ll be honest – this column was lucky to see the light of day, given how frantically busy the M3 team and I have been of late. It is a fact that everyone in offshore these days is having to work harder for our coin.

The dollar we earn today is twice as hard as before.

There’s plenty of OSV statistics that make for grim reading in this altered offshore universe. Utilisation rates are, of course, down, with a 40% drop off in Asia and greater still in the North Sea. There’s been a 20% drop in rates across the board, while asset prices have fallen somewhere between 15 to 20%. There is an interesting dichotomy in terms of the falling asset prices – older AHTSs are falling faster, where as newer PSVs are falling faster than older

Issue TWO 2015

ones. This is down to the fact there are simply too many PSVs being built. By my reckoning there are somewhere between 70 to 80 PSVs being built in China with no place to go to work.

So that’s the bad news out the way. The following is reason to be more cheerful.

We are in a state of change at the moment. Six months ago when oil was at $50 a barrel, people were saying it could go to $40 – the reality is it is in the high $60s now, so you are only 35% off what you were at last year. My take, however, is that we are unlikely to see a return to the $100 a barrel scenario for a long, long time. Why? Because shale oil will flood the market once the price of oil creeps into the $70 territory.

The huge cost savings program by oil companies is working.

Moreover, I am seeing more positive sentiment – more tenders, smiles returning to people’s faces.

The cost containment drive was needed. It will be beneficial to the industry. There is clearly a different offshore world coming where outlays are fit for purpose, cheaper and more realistic.

Nowhere will this drive for lower costs be felt greater than in Norway.

The country is the world’s top destination for research and development in offshore support, especially around Møre, the so-called ‘Silicon Valley of offshore shipping’.

Norway has suffered in the oil

shock from having too many ships, the vast majority of which are also just too expensive. There has been and will continue to be a lot of pain in the Norwegian offshore sector, ships being laid up and people being laid off by the thousands. However, the industry will come out of this painful transition as a leaner and smarter entity. ●

“Because of the short-term approach to life that is adopted by the offshore businesses in general, they have allowed the industry to become overpriced” — Neil Carrington, chief executive, Confiànce Employment Services

17

Markets REGULAR Finance

Why Norway works so well as a maritime cluster

As he gets ready to head to Nor-Shipping, Dagfinn Lunde sings the praises of the Scandinavian nation

N

or-Shipping is upon us. My calendar is full of receptions to attend in Oslo and I am looking forward to the show.

Norway has done a fantastic job at developing its maritime cluster – it reminds me of the Dutch model in fact. The NIS registry was a smart move and just about every facet of shipping is covered in this Scandinavian country. You have two very strong banks, two P&I Clubs, lawyers and it’s important to remember also all the marine technology developed in Norway. I’ve been at naming ceremonies for $750m drillships in South Korea where up to 40% of the value of these giants is coming from innovative Norwegian manufacturers.

From a finance point of view, Oslo has a huge amount to offer.

There’s a noticeable closeness to the business by the regulatory authorities, which helps smooth transactions. It is also a quicker market for finance. Bear in mind, too, that this is very much an international ship finance centre – more than half of the over the counter (OTC) deals done in Oslo are with foreign firms.

The OTC market is most

Issue TWO 2015

interesting as a stepping stone to bigger IPOs such as the recently announced move by OTC-listed Hafnia Tankers to seek a New York listing.

The other great aspect about raising funds here is that Norwegian capital tends to be more knowledgeable than other markets, there’s a real understanding of shipping and offshore, which is a very big difference compared to other places such as New York.

Moreover, the market is pretty big while the maturities are pretty short, so the money gets invested regularly and rapidly – snowballing as such.

The other nice thing is that, unlike certain other nation’s banks, Norwegians tend to pay you back.

Beyond Norway, a quick look at the markets – and I want to start by stating how sick I am of people overplaying the doom and gloom in the dry bulk sector. People are too overwhelmed by the dry bulk depression. Dry bulk and offshore aside, the markets are actually okay, there are more than 20 other sectors to be looking at – people, including the media, need to stop getting hung up about the misfortunes of dry bulk.

“

The OTC market is most interesting as a stepping stone to bigger IPOs

”

Offshore, I admit, is wildly overbuilt and overpriced. There will be plenty more pain in this segment. My take is the oil price should be lower.

The oil price at $60 is on the high side, in my mind it should be $40 – there is a complete oversupply of oil.

Finally, for those who are new to Nor-Shipping, a couple of bits of useful advice – try to snap up as many invites to the myriad receptions.

Secondly, hope for good weather. ●

19

RICH REGULAR LIST

The Maritime CEO

Rich List

2015

There’s been plenty of movers and shakers in the past volatile 12 months.

Over the next 11 pages we detail the world’s 50 most valuable fleets

O

nce again Maritime CEO has teamed up with VesselsValue. com to provide a unique look at the world’s richest fleets. Readers can find out about the leading global fleets with details on value and size, broken down into ships afloat and on order.

Out in first place this year, climbing four places from its 2014 ranking, is Japan’s Mitsui OSK Lines (MOL),

What’s in Containers Bulkers Tankers LPG LNG Combo

having placed orders for 22 ships in the past 12 months. Unsurprisingly, this year’s biggest falls have been in dry bulk fleets, while those in the tanker trades have enjoyed quite an appreciation.

Richard Rivlin, CEO of VesselsValue.com, commented: “The Euronav fleet has doubled in value, with only a few purchases

throughout the year, showing the surge in tanker values.”

Meanwhile, Maritime CEO’s editor, Sam Chambers, noted: “The tough times in the Chinese shipping sphere, being forced to scrap ships, have seen the top lines from the People’s Republic drop back, while canny investors, especially from Greece, have jumped up the list.”●

What’s not Offshore Car carriers Reefers Passenger/Cruise

In association with:

20

maritime ceo

RICH REGULAR LIST

Issue TWO 2015

21

RICH REGULAR LIST

1

MOL

S

11.73bn

#

207

DWT

24.42m

Fleet Breakdown Bulker

S

1.69bn

DWT

9.13m

#

Combo

2.28bn

DWT

0.3m

14m

S

DWT

0.046m

#

1

DWT

DWT

0.2bn 3 0.2m

Tankers

S

2.54bn

DWT

10.15m

#

30 4.63m

64

A.P. Møller Maersk

S

11.24bn

#

316

DWT

4.79m

Tankers

S

#

244 1.6m

DWT

#

5bn

10.03bn

#

S

38

Fleet Breakdown Containers

S

LPG

LNG

S

2

S

#

72

#

Containers

DWT

1.2bn 72 3.36m

Key S

Total value of owned fleet including afloat

and on order

#

Total number of owned ships including afloat

and on order

DWT

Total owned tonnage including afloat

and on order

Company’s fleet value position this year compared to 2014 ranking

data taken on April 2, 2015

Issue TWO 2015

23

RICH LIST

3

NYK Line

S

4

#

247

DWT

24.05m

China Shipping

S

5

#

DWT

23.07m

DWT

151

Euronav

100 88

Eastern Pacific

82

Evergreen

72

9.64bn

28

Hanjin Shipping

459

29

Doun Kisen

32.29m

31

Peter Dรถhle

33

Oldendorff

47

Sinotrans&CSC

K Line

S

#

DWT

8

Star Bulk

Teekay

Cosco

#

7

9.76bn 337

S

6

10bn

Biggest Climbers & Losers In Last 12 Months By Fleet Value %

7.93bn 188 19.27m

Fredriksen Group*

S

7.49bn

#

193

DWT

25.8m

BW Group

S

7.23bn

#

117

DWT

11.49m

Key S

Total value of owned fleet including afloat

#

Total number of owned ships including afloat

DWT

Total owned tonnage including afloat data taken on April 2, 2015

* Fredriksen Group includes 11 different companies

24

maritime ceo

RICH LIST

TOP

5

Tanker Owners

By Value S Sovcomflot

3.4bn

Scorpio

3.2bn

Gener8 Maritime

2.98bn

Dynacom

2.84bn

NITC

2.73bn

Teekay LNG Partners 6.85bn 45

#

6.6m

DWT

Petronas** 6.14bn

2014

207.28bn

2015

226.87bn

#

13.46m

DWT

Scorpio 6.11bn 178

6.09bn 98 10.17m

5.89bn

Company’s fleet value position this year compared to 2014 ranking

5.47bn 106 0.79m

11

DWT

S

12

#

DWT

S

13

#

DWT

Seaspan

and on order

10

#

MSC

1.36m

and on order

S

Sovcomflot

188

and on order

S

111

14.01m

Global Tanker Fleet Value Growth Year-On-Year $

S

9

S

14

#

DWT

** Petronas includes MISC and AET Issue TWO 2015

25

RICH REGULAR LIST

15

16

TOP

Nakilat

S

5.14bn

#

27

DWT

6.36m

5

Dry Bulk Owners

By Value S

Evergreen

S

#

DWT

4.98bn 103 0.65m

K Line 2.49bn Star Bulk 2.17bn

17

18

19

20

Scorpio 2.1bn

BP

S

Oldendorff 2.06bn

4.86bn

#

77

DWT

7.92m

China Shipping 1.78bn

Economou Group*

S

Global Dry Bulk Fleet Value Drop Year-On-Year $

4.44bn

#

122

DWT

16.41m

Zodiac Maritime

S

4.15bn

2014

275.76bn

#

111

2015

180.24bn

DWT

8.67m

Maran Gas Maritime

S

#

DWT

4.07bn 23 3.82m

Key S

Total value of owned fleet including afloat

#

Total number of owned ships including afloat

DWT

Total owned tonnage including afloat data taken on April 2, 2015

* Economou Group includes eight companies

26

maritime ceo

RICH REGULAR LIST

TOP

5

Containership Owners

By Value S Maersk 10.03bn

Shoei Kisen 4.15bn

S

135

#

8.02m

DWT

GasLog 3.79bn 22 3.55m

S

21

22

#

DWT

MSC 5.84bn Seasapn 5.47bn China Shipping 4.98bn Hapag Lloyd & CSAV 3.78bn

Global Container Fleet Value Growth Year-On-Year $

Hapag Lloyd 3.78bn 85

#

0.57m

DWT

UASC 3.73bn 44 0.49m

2014

129.08bn

3.69bn

2015

151.67bn

90

Company’s fleet value position this year compared to 2014 ranking

3.68bn 80 3.55m

Issue TWO 2015

24

#

DWT

25

S

#

DWT

Eastern Pacific

and on order

and on order

S

CMA CGM

0.59m

and on order

S

23

S

26

#

DWT

27

RICH REGULAR LIST

27

Claus-Peter Offen

S

#

3.55bn

1.94m

SK Shipping

S

5

96

DWT

28

TOP

3.34bn

#

70

DWT

10.49m

LNG Owners

By Value S Teekay 6.55bn Nakilat 5.06bn

29

30

31

Gener8 Maritime

S

#

46

DWT

11.06m

Oman Shipping

S

45

DWT

8.65m

Hamburg S端d

S

DWT

S

DWT

Maran Gas 4.2bn GasLog 3.79bn

Global LNG Fleet Value Growth Year-On-Year $

2.92bn

2014

66.13bn

47

2015

77.7bn

0.32m

Costamare

# 28

2.981bn

#

#

32

2.982bn

MOL 5bn

2.9bn 70 0.46m

Key S

Total value of owned fleet including afloat

#

Total number of owned ships including afloat

DWT

Total owned tonnage including afloat data taken on April 2, 2015

maritime ceo

RICH REGULAR LIST

TOP

5

LPG Owners

By Value S BW LPG 2.57bn Dorian LPG

Thenamaris 2.89bn

#

7.51m

DWT

Dynacom 56

#

9.6m

DWT

1.8bn

Petredec

1.75bn

Solvang

1.22bn

Global LPG Fleet Value Growth Year-On-Year $

OOCL 2.83bn

S

57

#

0.43m

DWT

NITC 2.75bn 56 13.61m

S

2014

32.83bn

2.68bn

2015

39.8bn

70

DWT

37

S

#

APL

Issue TWO 2015

36

DWT

and on order Company’s fleet value position this year compared to 2014 ranking

35

#

Hanjin Shipping

3.33m

and on order

S

34

1.89bn

Navigator Gas

and on order

S

77

2.84bn

33

2.56bn

S

47

#

0.38m

DWT

38

29

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RICH REGULAR LIST

Tsakos 2.51bn 60 6.35m

S

106 10.5m

97 8.02m

44 10.98m

S

96 7.76m

42 10.96m

Issue TWO 2015

7.48m

84 0.99m

S

42

#

96 11.06m

DWT

S

43

154 7.7m

DWT

S

#

DWT

44

S

#

S

67 7.63m

47

#

DWT

S

48

#

DWT

S

49

#

T DWT

Formosa Plastics 2.09bn

46

DWT

Sinotrans&CSC 2.17bn

#

#

Star Bulk 2.17bn

45

DWT

Peter Dรถhle 2.25bn

DWT

Maran Tankers 2.35bn

104

41

S

Doun Kisen 2.26bn

#

Ocean Tankers 2.42bn

40

DWT

Euronav 2.42bn

0.97m

#

Nisen Kaiun 2.44bn

61

DWT

S

Yang Ming 2.34bn

#

Sinoko 2.46bn

39

S

50

#

DWT

31

EXECUTIVE In profile Debate

Entering ECAs Maritime CEO interviews top lines on switching fuels and lubes across the seven seas

S

hipping knows only too well the difficulties of handling fuel and lubes in 2015’s cluttered, complex seas.

“Shipping is so much more complicated in every aspect than just a few years ago,” comments Caroline Huot, managing director of UniMarine Lubricants, citing as an example how ships today trading worldwide need to carry five different grades of lubes onboard, a far cry from a decade ago.

Managing fuel and lubes has always been and will be about finding the most suitable and cost effective solution in the face of changing regulations.

Regulations form the benchmark, says Captain Samir Fernandez, global operations and fuel efficiency manager at X-Press Feeders. They must be understood and evaluated both technically and commercially and followed up with early planning by considering the various options for compliance.

Fernandez cites the 0.1% sulphur cap in European waters this year as an example. Vessel operators had a varied choice between marine gas oil (MGO), alternative fuels, scrubbers or LNG. “To date the alternate fuels do not have an ISO specification and the jury is still out on whether they are fully compatible with residual fuels,” Fernandez says, adding: “The trick for us was to evaluate the cost effectiveness of a heavy fuel oil (HFO)/MGO mix or be adventurous with a new product.”

Kevin Smith, vice president at Masterbulk, says planning is key, having things like the right additives

32

onboard so owners do not get caught out if the voyage orders change. It is vital too to have good communication with the commercial team and charterers to facilitate the planning, and proper analysis of the fuel.

Sanjeev Samal, a VP at the same firm, has some tricks of the trade including regular energy audits and energy conservation actions.

Retrofitting, though capital intensive, can reap huge fuel savings too, he says.

Cesare d’A mico, who heads up d’A mico Group, says: “Nowadays, in the present market, first class shipping companies cannot avoid considering the eco-compatibility side of shipping and these issues must be top priorities especially when building new ships.”

Carisbrooke Shipping, which has been trading in the Baltic ECA this year, has managed to perform “without a hitch”, says the firm’s CEO, Robert Wester. The compliance process has been expensive, he admits.

Carisbrooke’s fleet technical director, Martin Henry, says: “Knowing what kind of serious failures and problems can occur during the extremely critical period of fuel change-over, if not managed well, we decided that careful preparation was a priority, not least because the regulations were to enter force at the very worst time of year when weather conditions are often at their most severe.”

Carisbrooke seconded two serving senior chief engineers to head office and between them, they visited all of the line’s vessel series, carrying out actual change-overs to and from

MGO in order to draw up suitable detailed procedures.

“The procedures vary,” Henry says, “because onboard some of our older vessels, there is limited tank capacity for distillate fuel, and more time is required for the change-over process. On others, we had to reorganise fuel supply pipework where

“

It’s too early to say what impact a prolonged consumption of MGO will have on older engines

”

maritime ceo

EXECUTIVE In profile Debate

“

Shipping is so much more complicated in every aspect than just a few years ago

this was economically viable.”

Delphis, best known as an intra-European box player, has been one of the companies most affected by this year’s introduction of an ECA in Europe. “From a technical point of view,” says Alex Saverys, the line’s CEO, “it’s too early to say what impact a prolonged consumption of MGO will have on the engines of 10 to 15-year-old ships.”

For Jan Hanses 2015 has been

Issue TWo 2015

”

all about getting used to operating within an ECA. The ceo of ferry firm, Viking Line, has six of his seven vessels sailing in the new Baltic ECA. These ships are now running on MGO, the cost of which will hit the line for an additional EUR10m-15m this year alone, according to Hanses.

Viking Line’s 2013-built Viking Grace is the exception to the rest of the fleet. It is the first vessel in the Baltic Sea – and the first large passenger

vessel in the world – to be powered

by LNG. Finally in this operators’ roundup, Clipper has decided to convert one HFO tank on six of its 30,000 dwt Trader-type bulk carriers into MGO tanks.

The conversion reduces unnecessary costs of frequent bunker operations and delays, the Danish line says. Simultaneously, it makes the vessels compliant with current legislation. As an extra benefit, Clipper says the physical separation of piping makes it very unlikely to mix the two fuel grades by mistake. ●

33

In profile

Paddy Rodgers p.40

Anthony Gurnee p.39

Paul Stevens p.44

Andrew Abbott p.47

Giovanni Visentini p.50

In profile this issue Maritime CEO’s 17 correspondents around the world have been in touch with many of the world’s top shipowners. Highlights are carried over the next 17 pages

34

maritime ceo

In profile

Robert Macleod p.36

Christian Andersen

Kingsley Koo p.44

p.41

Jens Ismar

Julian Proctor

p.48

p.45

Idar Hillersøy p.51

Anoop Sharma p.43

Paolo Clerici p.49

Nick Fisher p.42

Issue TWo 2015

35

In profile

The comeback kid Aged just 35, Robert Macleod took the reins at Frontline Management in November last year as many speculated the John Fredriksen tanker vehicle was in jeopardy. He has masterminded a dramatic turnaround

T

ankers are famously volatile – few can have observed that more closely than Robert Macleod over the past seven months.

The Norwegian was appointed as CEO of John Fredriksen’s Frontline Management last November at a time when many were writing the company off, suggesting it was close to bankrupt extinction. Now, however, just over half a year into his reign and the company is smelling of roses.

Macleod took over from one of Fredriksen’s key lieutenants, Jens Martin Jensen, just as many were questioning whether the company would be able to pay back its bonds which were coming up for maturity.

Macleod had been with Maersk from 2001 to 2004, then Glencore through to 2011, before running his own company, Highland Tankers, until Fredriksen came knocking, taking on the CEO role at one of Fredriksen’s flagships at the age of just 35.

He took the reins at Frontline with five months to go until its bond was due to mature, and with the company weighed down with $1bn of debt and lease obligations. VLCC and suezmax rates were still low and speculation was rife that restructuring was on the cards.

However, as is the often the case with John Fredriksen-related companies, the fat lady did not sing.

36

Rates rallied, initially with a number of VLCCs including Frontline ones going out as floating storage.

The bond is just about paid to the astonishment of many. Commented local newspaper Dagens Næringsliv: “Whoever one or two years ago had said that the owners of the convertible bond in the tanker company Frontline at maturity today would come to get back all their money were probably taken away by men with white coats.”

“

says, outlining how with less capital available the risk of oversupply should be reduced. “We are now seeing a strong spot market, without prices being pushed, which is a healthy sign,” he observes.

The main reason for the uptick in tanker rates is the lengthening ton/ mile scenario, Macleod reckons with plenty more long voyages from the Atlantic Basin to Asia. Moreover, he thinks a two-tier market is developing between older and newer vessels.

We are constantly looking for opportunities in the market and we are likely to grow going forward

The suddenly firmer footing now looks like Frontline will merge with Frontline 2012, the vehicle Fredriksen spun off four years ago.

Fredriksen has been in a merging mood of late – bulker firms Golden Ocean and Knightsbridge Shipping have joined forces while Frontline Management itself tied up with Tankers International last October to create VLCC Chartering.

Tanker owners across the world are in consolidation mode as rates firm. For Macleod, the recent tanker bull run is, he says, the beginning of a recovery.

“The next five years will be a lot better than the previous five,” he

”

“Modern vessels are in demand and the market is finally not in oversupply,” Macleod says.

Another factor is port delays, which has taken out capacity. Basra is one example given by the Frontline CEO where delays can last up to 25 days.

The final reason for the uptick is down to owners’ confidence, which is strong after many years with a weak market. “Sentiment is important,” Macleod says.

In terms of making investments in the fleet, Macleod still feels prices will actually decline more and he says he will be patient before buying much more tonnage. Product tankers maritime ceo

In profile

make for the best investment at the moment, Macleod thinks.

Frontline Management currently controls 67 vessels. Two thirds are crude – a mix of VLCCs and suezmaxes, and the rest are product carriers.

“We are constantly looking for

“

opportunities in the market and we are likely to grow going forward,” Macleod tells Maritime CEO. His take on the tanker markets as a whole is perhaps a sign of things to come from this Fredriksen vehicle.

“Consolidation will only increase, which is healthy,” he concludes. ●

We are now seeing a strong spot market, without prices being pushed, which is a healthy sign

Issue TWo 2015

”

Spot on

Frontline Management John Fredriksen-controlled tanker vehicle. Currently operates 67 vessels, a mix of VLCCs, suezmaxes and product tankers. Signed with Tankers International last year to form VLCC Chartering.

37

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In profile

Product and chemical mix The president and CEO of Ardmore Shipping explains why his company has a different approach to others

A

fter a career spent working for other people, president and CEO Anthony Gurnee founded Ardmore Shipping in 2010 with his business partner Mark Cameron. Gurnee says founding the chemical/product tanker company with Cameron, his COO, has been “a fantastic experience and the highlight of our careers – so far anyway.”

But it was a tough beginning.

“Not only did we face a challenging chartering and finance market, but we were also building a company from scratch and had to establish an operating reputation,” he tells Maritime CEO. “I think our success at that early stage was the result of our constant focus from day one on operational excellence, a service mindset, a transparent organisation, and the backing of a very experienced and well-regarded private equity firm, Greenbriar.”

The chemical tanker segment is a tough nut to crack, being persistently overtonnaged, technically complex and stringently regulated – but Ardmore is beginning to see an upside, especially through cross-trading in the product tanker market.

“We are reaping the benefits of a modern, high-quality fleet in a strong product tanker market at the

Spot on

Ardmore Shipping Founded five years ago in Ireland, the company has grown fast, with the aid of private equity money, and now boasts 18 ships, a mix of chemical and product tankers.

Issue TWo 2015

moment, and are beginning to see a similar upturn begin in the chemical sector. We operate our fleet in both sectors, and we will continue to do so,” he says.

“Our strategy is to focus on the more complex end of the product market and the simpler end of the chemical market, where there is a lot of overlap. The challenge is to make the most of this strong market and plan for the next stage – what that is going to be, we don’t know yet but I doubt it will be a big departure from our current strategy.”

Gurnee had already had a long career in executive positions before Ardmore, having spent time as CFO of Teekay, president of Nedship International, and president and COO of Singapore’s MTM Group, among other positions.

Both he and Cameron have also spent many years at sea, Gurnee in the US Navy and Cameron as a merchant seaman. Ardmore’s fleet was established with the purchase of a 45,700 dwt product tanker they renamed Ardmore Seafarer, “named after the most important person in our company”, as Gurnee told delegates a recent conference.

Today, Ardmore has 18 vessels in operation. Eleven ships are MR tankers of between 45,000 to 50,000 dwt; the other seven vessels are 17,000 to 37,000 dwt product and chemical tankers. All Ardmore’s fleet has been built or modified to a fuel-efficient specification, which is a key component of the company’s strategy.

“When it comes to fuel efficiency, we really think of it two ways,” Gurnee explains. “One is from a technical point of view, which really relates to the engine itself, hull coatings and modifications made

“

Our strategy is to focus on the more complex end of the product market and the simpler end of the chemical market

”

to the propeller etcetera. But there’s also an operational component to focus on, and we don’t think that too many people do that. That’s really optimising the voyage itself, making sure the ship is optimally trimmed to reduce fuel consumption, and routing the ship on the voyage in a way that makes the best use of not just the weather conditions but also currents on the way.”

The recent drop in oil price wouldn’t deter Ardmore from going for fuel-efficient newbuildings again in the future, but Gurnee says placing new vessel orders isn’t an option right now. “I think the more interesting opportunities are in ships that have already been ordered or are in fact on the water,” he says. “We’re evaluating acquisition opportunities all the time.” ●

39

In profile

Jolly Rodgers Tankers are in the early stages of a multi-year cycle of stronger freight rates, argues the boss of Euronav

P

addy Rodgers, CEO of tanker giant Euronav, is in an understandably jovial mood when Maritime CEO comes knocking. A brilliantly timed cheap fleet build up – including snapping up Maersk’s VLCC fleet – was followed by a listing in New York this January as VLCC rates rallied, which has seen Rodgers’ own stock rise. At the start of May Rodgers unveiled Euronav’s best quarterly results since 2008. What’s more, he is adamant that the current uptick in tanker fortunes is just the start of a prolonged rate boom.

“We believe we are in the early stages of a multi-year cycle of stronger freight rates driven by several supportive factors,” Rodgers says.

Vessel supply is limited over the next two years, he reckons, pointing to Clarksons data that estimates only 31 net VLCCs will be added to the global fleet in the next two years and only 15 suezmaxes equating to less than 2.5% of net additions in each of the next two years.

This comes at a time when oil demand is likely to jump. “With the oil price 50% lower than the summer of 2014 this should transmit over time into strong demand,” Rodgers says, picking up on the IEA’s figures that show 1m barrels per day (bpd) growth for 2015 and 1.2m bpd in 2016. A million extra barrels would

Spot on

Euronav

New York-listed tanker giant with 49 suezmaxes and VLCCs on its books.

Fleet average of less than eight years.

Bought out Maersk’s VLCC fleet in January last year.

require 45 new VLCCs, Rodgers says.

“Given the limited supply of new ships this provides strong support for our outlook,” he adds.

The ton-mile effect is also supportive to Rodgers’ sunny outlook.

Trade lanes are changing. Asia is increasingly having to source oil from the Atlantic rather than the Middle East.

“To put this into context,” Rodgers says, “Arabian Gulf to China is 5,500 miles versus Latin American to China which is 11,500 miles.”

Rodgers started out at a lawyer in 1982 before joining CMB as its in-house counsel in 1989. He became CFO at Euronav in 1998 and CEO two years later.

Despite all this seemingly good news for the tanker sector, Rodgers is circumspect on adding more ships to his fleet. Indeed at his quarterly results he beseeched fellow owners

“

not to order new ships as that might upset the delicate supply/demand balance in the VLCC trades.

“We have no firm plans at present regarding our fleet as we have effectively done our shopping in 2013 and 2014 with the purchase of 19 VLCCs during that period in anticipation of strong freight rates that we now are experiencing,” Rodgers tells Maritime CEO. “Our outlook is simple and disciplined,” says the former lawyer, “if we can add to our fleet by an accretive addition then we will closely consider it. However, it will have to mean acquiring assets at NAV or a discount to NAV and for the additional fleet to at least match or more likely reduce the breakeven cost of the enlarged fleet.”

It is this discipline that has seen Euronav become one of the top tanker tips for investors. ●

If we can add to our fleet by an accretive addition then we will closely consider it

40

”

maritime ceo

In profile

Making advances The founder of Avance Gas uses Maritime CEO as a platform to seek out potential takeover targets

F

rom his Oslo office, Christian Andersen, 54, founder of Avance Gas, seems at ease, confident that the coming years are destined to be strong ones for VLGCs despite the naysayers who worry about the orderbook and the falling oil price. Indeed, such is his strong belief in the sector he even uses the Maritime CEO platform to seek out potential acquisition targets.

Commenting on the collapse in crude price and its impact on the LPG availability in the US, Andersen sees sufficient refinery capacity and export of natural gas, combined with a continued development of crude oil production, suggesting LPG volumes will be solid.

Andersen, whose CV includes stints at BW Gas as well as founding Amanda LPG Trading, points to Cheniere Energy’s recent green light to expand its $18bn Sabine Pass natural gas liquefaction facility, as another source of optimism. The Sabine Pass is the first facility to ship LNG from the continental US. The global orderbook of 85 ships with delivery from 2015 to 2017 does not faze him either as the ton/mile scenerio will jump when the US starts exporting to Asia.

Up to 2012 the Middle East was the main exporter of LPG with more

Spot on

Avance Gas VLGC owner listed in Oslo. A joint venture between Frontline 2012, StoltNielsen and Sungas. Founded in 2009, the company now has 14 ships.

Issue TWo 2015

than 35m tons a year. The US started out exporting 3.5m tons, this doubled in 2013, and exports reached close to 11.5m tons in 2014, and are expected to reach close to 20m tons this year and up to 30m tons next year.

“We will continue to have exports from the Middle East at around 32 to 33m tons and the same number of exports coming out of the US,” Andersen reckons.

Avance is a spot player. All the ships are spot focused bar one on time charter, albeit even this one is priced on a spot basis.

“We will continue to work on flexible or floating pricing rather than fixed pricing, as this is better for the shareholder, so it is not likely that we will change strategy in the near future,” Andersen maintains.

Avance is a three-way venture between Norway’s Stolt-Nielsen, Saudi Arabia’s Sungas Holdings and Bermuda-based shipowner Frontline 2012. The company has made clear it wants to grow.

Avance has actively looked for mergers and acquisitions, but has not

found the right candidate to date.

“We have not done anything since we took over two ships from Angelicoussis a couple of years ago and we have a less active approaching policy right now. We are, however, very interested in building up the size of the company, so if anyone wants to talk to us, they are welcome,” says Andersen.

Avance took on its first ship in 2009. In late 2010, it acquired three VLGCs in a share/cash transaction and Sungas became a 50% shareholder in the company. In mid-2012, Avance acquired Maran Gas’s LPG ships in a cash transaction, adding two ships to the fleet, then consisting of six modern VLGCs. In the summer of 2013, Avance did a private placement to Frontline 2012, whereby the Fredriksen vehicle became a 33% shareholder alongside Stolt-Nielsen and Sungas. In October of the same year, Avance acquired Frontline 2012’s newbuilding program at Jiangnan Shipyard, building the fleet to 14 units. That same month it listed on the OTC market at the Oslo Stock Exchange and in April last year it became a publicly listed company on the Oslo Stock Exchange.

The ships Avance took on at Jiangnan Shipyard in China have been Andersen’s biggest source of consternation. The VLGC Breeze and VLGC Monsoon are two Chinese newbuilds that have had to go for urgent repairs within weeks of being delivered.

“We do not see that the incidents on Monsoon and Breeze say anything on ships built in China on a general matter. However, we are working to sharpen up the delivery procedures on the five remaining ships in the series of eight ships,” Andersen concludes. ●

41

In profile

Masterbulk switches tack Singapore offshoot of Westfal-Larsen ditches shipmanagement

M

asterbulk’s plans to diversify earnings by adding third party management to shipownership have come to a sudden halt. The 20-year-old Singapore offshoot of Westfal-Larsen has handed over management of its own fleet of 16 open-hatch supramaxes to Rickmers Shipmanagement.

Masterbulk’s CEO Nick Fisher tells Maritime CEO that the economics of running a standalone shipmanagement business for the number of vessels involved can no longer be justified in the current depressed market.

“For Masterbulk there will be significant financial benefits both in overheads and in opex, the business of shipping is, of course, all about economies of scale,” he says.

Fisher thinks many other shipowners will follow suit.

On the markets, Fisher warns of plenty more trouble to come.

“There is,” he says, “considerable pain out there now and there will be casualties: consolidation, company closure and sales of distressed assets will continue. Recently published first quarter results from well-known dry bulk players tell the story.” ●

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maritime ceo

In profile

Banking on a young fleet Essar Shipping’s vessels are half the average age of the Indian merchant fleet, something that should stand it in good stead

F

or a little under seven years since August 2008, Captain Anoop Kumar Sharma has been functioning as CEO of India’s third largest private sector shipowner, Essar Shipping, whose fortunes he has been guiding through one of the most turbulent periods in the history of shipping.

On March 31 this year, the 55-year-old Sharma also took over the functions of managing director from the retiring A R Ramakrishna, with whom he had forged the perfect partnership designed to keep the company in good financial health. Ramki’s wizardry with numbers was well complemented by Sharma’s practical knowledge of shipping, garnered over three decades in the industry before he joined Essar.

A native of Jhansi, Uttar Pradesh, the 1960-born Sharma came to Mumbai as a teenager and started at Training Ship T.S. Rajendra. It was inevitable that, upon completion of his training in 1978, he would join the fount of Indian shipping talent, Shipping Corporation of India (SCI).

For the next three decades, he remained an SCI man, sailing on the state-owned company’s vessels until late-1992, and then coming ashore on

Spot on

Essar Shipping India’s third largest private sector shipowner. Has 15 ships as well as many tugs and barges.

Issue TWo 2015

December 14 1992, the day after the demolition of the Babri Masjid, that resulted in enormous political commotion and violence in India. Over the subsequent 15 years, Sharma gained rich and varied shore experience at SCI, moving from one department to another.

“When I joined Essar Shipping as CEO in August 2008, the company had just seven vessels,” he reminisces.

“Today, we have 15 ocean-going ships – apart from numerous tugs and barges – with an average age of 11.5 years, that is almost half the average age of the Indian merchant fleet.”

The company today owns and operates two VLCCs, three capesize vessels, six mini-cape bulk carriers (all newbuilds from STX Dalian), two supramaxes and two handysize vessels; and has four supramax vessels on order at ABG Shipyard’s facility in Dahej, Gujarat.

One of these ships, which are to be acquired on a bareboat charter basis, will join the fleet in the ongoing financial year, while the others will be delivered within six months of one another. Once all of them have been

added to the fleet, the company’s total tonnage will touch 2.2m dwt.

“Our vision for Essar Shipping is to have a young, balanced fleet,” says Sharma. “With so much oversupply of vessels the world over, everyone is looking to charter younger vessels. So, in recent times, we have replaced our entire older tonnage with reasonably young vessels.”

The company has generally adopted a policy of entering into a mix of long-term, medium-term and spot market contracts with reputed global oil and industrial majors, allowing it to have a hedge against spot market volatility and industrial cyclicality.

“But a policy correction has been forced on us due to the state of the bulk freight market,” says Sharma.

“Our chartering policy used to be 60% employment on long-term basis, and 40% on short-term.

“However, in the current bad market, all long-term contracts for our bulk carriers have been long completed, and predictably not renewed.

Bunker prices are so low at the moment that there is no advantage to slow steaming.

“The BDI is at its lowest point in its history. Rates are now so poor that I advise my chartering wing to avoid locking in our vessels for long periods, because we are bound to get better rates in a few months’ time.”

Starting from October 2015, over the following 15-18 months, Sharma sees the bulk sector improving – even if not drastically, to at least allow the company to recover interest costs.

It has therefore become a matter of riding out this prolonged difficult period until shipping sails into a new dawn. ●

43

In profile

A swipe at private equity ‘There is too much speculation in shipping,’ says the chairman of the Hong Kong Shipowners Association

T

he director of one of Hong Kong’s oldest shipping lines, Valles Steamship, is not happy with private equity’s intervention in the industry, arguing that the downturn is far more harsh as a result of all the new money in shipping.

“In many ways, the shipping industry is exposed to more levels of corruption than any other industry” — Alexandra Wrage, president, TRACE

Kingsley Koo, the current chairman of the Hong Kong Shipowners Association, tells Maritime CEO: “There is too much speculation in shipping.” He says there are too many funds with too much money investing in the industry. While Valles typically orders one or two ships at a time, private equity is ordering “by the hundred”, Koo says.

Koo urges fellow owners not to build new ships, as the markets are too fragile too absorb more tonnage.

Valles’s fleet sees 12 ships on the water plus three product tankers on order, which Koo stresses is replacement tonnage.

While he feels tankers are picking up, Koo, whose past career included a lengthy stint at American class society ABS, is concerned

about dry bulk prospects.

“I worry for some of the owners on the dry side,” Koo admits. ●

Foss Marine heads for the Arctic With oil prices remaining at low levels, Foss Marine is focusing on new areas to keep busy, principally the Arctic. Seattle-based Foss Marine has more than 200 tugs and barges. Its latest addition to the fleet is a 360 ft barge built specifically for transporting large modules in shallow draft regions of the Arctic, while the first of three Arctic-class tugs built at its own shipyard in Oregon was christened on April 9.

“When it comes to our harbour service business,” Paul Stevens, the firm’s ceo says, “what we see immediately before us is a west coast market that has been adversely impacted by a labour disruption, congested terminals and a further

44

continuation of vessel alliances. This, along with a drop in tanker calls as a result of crude oil deliveries by

railcar to west coast oil refineries, has reduced tanker escorts and put a strain on operating efficiencies.”

As a result the harbour service group remains very focused on cost control.

Looking ahead, Stevens is optimistic that the US ban on oil exports will be lifted and his tugs will support the various tankers that are required to carry these exports.

As for Foss Marine’s marine project business, activity is on the rise as it positions itself to serve the activities in the Arctic.

“There are maritime opportunities in Russia, Alaska and Canada that match Foss’s capabilities,” Stevens says. ●

maritime ceo

In profile

Opportunities in all trades Julian Proctor, managing director of Tiger Group Investments, ponders what sectors have the best potential

C

ontainer shipping is set to go through a “great renaissance”, unlike dry bulk which will remain an “uncertain” market for years to come, claims Julian Proctor, managing director at Tiger Group Investments, the firm behind names such as Seaspan, Greathorse Shipping, POSH Terasea and GC Industrial Investments (GCI).

Tiger, via Seaspan and GCI, has links to more than $10bn in containership assets. For Proctor, the sector is primed for strong growth. “Those businesses are entering into a great renaissance as liners report better results,” he says, adding: “The next 12 months will be very favourable for containership lessors.”

The trend to order ever-larger boxships is likely to lead Seaspan back to Korea for some big ships soon. “We think the large ship trend will continue. There’s a lot more liners who will come in for them,” he says from his office overlooking Victoria Harbour in Hong Kong.

Container’s glad tidings are not replicated however in dry bulk, something Tiger is exposed to via holdings Greathorse Shipping and

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Issue TWo 2015

“

We think tankers are very fully valued, we will not be investing here

”

Tiger Bulk.

“Dry bulk is going to have a very tough time for a few years,” concedes Proctor, “but this will create lots of opportunities.” Proctor admits concern at all the money coming into the sector from New York. “No one knows how they will behave,” he muses, adding, “This will add to an already uncertain market.”

Tiger, by and large, has been very savvy at its market timings in what ever sector it has entered – with the possible exception of tankers, something Proctor admits.

“We sold a bunch of VLCCs to Greek shipowners last year – the timing was off,” he concedes.

Nevertheless, Proctor thinks that boat has now sailed; investment opportunities lie elsewhere.

“We think tankers are very fully

valued, we will not be investing here apart from in stainless steel chemical tankers,” the UK national says.

Greathorse Chemical is the group’s tanker vehicle at present – it boasts a fleet of 12 ships, and Proctor says the company will add to that, but only on a selective basis. ●

Spot on

Tiger Group Investments Private investment vehicle based in Hong Kong involved in shipping names such as Seaspan, Greathorse Shipping, POSH Terasea and GC Industrial Investments.

45

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In profile

‘Carriers obsessed with market share over profits’ The veteran boss of Atlantic Container Line has some advice for his peers

C

ontainer carriers continue to chase market share much to the detriment of their bottom lines, says the head of one of America’s top boxlines.

“The vast majority of carriers are still obsessed with vessel size and market share instead of profitability,” says Andrew Abbott, the president and CEO of Atlantic Container Line (ACL).

With the alliances becoming bigger and more concentrated, alliance carriers can no longer differentiate themselves on service versus their competitors on the same ships, Abbott, a 35-year veteran in the industry, contends. They can only differentiate themselves on price, which is why many rates are still non-compensatory. “I guess some people like to carry containers for practice,” quips Abbott.

With ships getting larger and larger, and companies automating to cut costs, the big lines can no longer provide the level of customer service that once endeared them to their customers, the American says.

“When you have a weekly

Spot on

ACL

Atlantic Container Line is part of the Grimaldi Group. It owns 12 conros and PCTCs.

Issue TWo 2015

“

The Asian lines have severely damaged the transatlantic

”

capacity of 25,000-plus teu, it is impossible to babysit everyone’s cargo,” Abott says, adding: “So middlemen like 3PLs and NVOCCs have sprung up to deal with the end customer, but taking a big chunk of the profit margin in the process.”

Another big change in the industry that Abbott believes is hurting many is that fewer lines today are being run by businessmen, with bureaucrats taking the top posts.

“It is interesting to note that the lines whose top management have proven track records in business – lines like Maersk, OOCL and a few others – seem to be building a track record of profitability versus those bogged down with political baggage,” Abbott says.

Overcapacity is hitting almost every container tradelane these days, the American national reckons.

“There are too many ships in the world today, and lines are too focused on the headhaul trades around the world,” Abbott says, noting: “The Asian lines have severely damaged the transatlantic, treating it the same as the transpacific or Europe-Far East.”

Historically, the Atlantic rates were always within 20% of each other in both directions because the volumes have always being within 20% of each other. But that fact has been ignored, and today the rates mirror the transpacific, with US import rates much higher than export rates.

“Transatlantic profitability is much lower than what it could be, if people would only treat it as a stand alone trade,” Abbott says.

ACL owns 12 conros and PCTCs. The five largest conros in the world are operated by ACL in its core North Atlantic trade. The remaining seven conros and PCTCs are chartered to its parent company, Italy’s Grimaldi Group.

ACL is replacing all of its five conros with vessels that have double the container capacity and 50% more roro capacity. Today ACL has a 4% market share of the North Atlantic container market; the new vessels will enable the company to reach 8% market share, making it one of the top four carriers in that relatively small trade.

ACL’s status as a niche carrier has seen it become the envy of the liner world. It has been one of the five most profitable carriers in the world every year since 1994, according to the line’s boss. ●

47

In profile

‘We got the market wrong’ It’s rare to hear a shipowner admit mistakes – and rather refreshing

T

here is something refreshingly humble and frank about Jens Ismar, the CEO of Western Bulk, a characteristic rather uncommon in the world of shipowning. Take, for instance, his most recent annual report, in which he admitted: “We got the market wrong.” Said wrong assumptions resulted in a $57m loss last year, something Ismar is desperate not to repeat, though he has already gone on record to warn 2015 will likely be another year in the red.

The Oslo-listed dry bulk player is one of the top operators of supramax-sized vessels in the world.

Ismar acknowledges the grim dry bulk market at present and admits the bad times might last for quite a while yet with plenty of pain to come.

“We are definitely at a low point in the cycle,” he says, musing: “The question is more how much longer we will be at this historical low level? This time, contrary to what happened during the financial crisis, it seems we will not get any help from the demand side. The industry therefore has to take the long road to rebalance the markets by scrapping and cancelling tonnage. This is always a painful journey.”

As previous head of shipbroker, Lorentzen & Stemoco, as well as a former director of chartering and operation with BW Gas, he

Spot on

Western Bulk Oslo-listed Western Bulk was established in 1982. It is controlled by the Kistefos Group and is focused on bulkers ranging in size from handy to ultramax.

48

is remaining conservative in fleet growth plans.

“We are an asset light company and will not invest in assets the way we are structured today. This being said asset values are on the way down so it is still too early as of today to invest in tonnage,” Ismar elaborates.

The Oslo outfit is using the current downturn to strengthen areas where it has the most experience.

“The key before the market turns– which is likely to take some time – is to sharpen the organisation and to fight for every dollar to try to make some margin,” he says, adding: “We will focus on the sizes where we have real strength and scale – handies to ultramaxes. In these segments we have proven we can create value.”

As a part of the ongoing ‘sharpening’ process, the company recently closed one desk shortly after opening another office.

“The closure of the panamax desk,” Ismar explains, “was due to the fact we were unable to create

synergies and leverage with the other Western Bulk units. The remaining business units work well together and leverage on each other’s strengths.”

To stay on track WB Chartering is looking to capture short-term trends in the market with a new office in Miami targeting business in the US Gulf area.

“Looking beyond 2015, we firmly believe we have the right ships at still attractive rates and optionality,” Ismar concludes. ●

“Open data and transparency can eventually contribute positively to the overall competitiveness of the industry” — Demitris Memos, managing director, MarineTraffic

maritime ceo

In profile

Paolo Clerici’s dry bulk return with d’Amico The Coeclerici boss has teamed up for a supramax joint venture

P

aolo Clerici is a well-known name in the international shipping market as chairman of Coeclerici, the Italian group based in Milan focused on coal trading and logistics with an annual turnover of more than EUR600m. In 2002 Clerici decided to sell all his fleet of panamax and capesize bulk carriers – 20 ships owned by Coeclerici Ceres Bulk Carriers – to the Greek owner Peter Livanos in order to further invest and strengthen his trading and transhipment business areas.

From June 2013, however, Clerici is back in the dry bulk business through a newly formed and equally participated joint venture called dACC Maritime, built up with d’A mico Group with a mission to invest in supramax bulk carriers.

“The joint venture set up together with d’A mico Group has a hedge approach for Coeclerici in order to balance a future sea freight increase and represents an important step in the growth strategy of the group, which after 10 years is investing again in the dry bulk shipping sector” says Clerici, dACC Maritime’s chairman. “We are particularly pleased with this operation, in which we are joined by a leading

Spot on

dACC Maritime A joint venture between d’Amico and Coeclerici focusing on supramaxes. Ordered four ships in Japan with plans for more.

Issue TWo 2015

“

Building industrial partnerships makes it possible to achieve significant results

”

shipping company and one of Japan’s leading shipyards. The joint venture is proof that building industrial partnerships makes it possible to achieve significant results, thanks to the combination of different types of know-how and managerial experience.”

The first series of two newbuildings, with an option for further two ships already exercised, were ordered in Japan to Nagasaki-based Oshima Shipbuilding at a price of less than $30m each, via the trading house Sumitomo Corporation and the brokerage firm Banchero & Costa of Genoa. The first ship, named dACC Tireno (60,000 dwt, 200 m long and 32.26 m wide), has just

been delivered and will enter the new Medi Supra Pool just launched by d’A mico Group. Tirreno is the same name of the first ship bought

by Clerici’s grandfather in 1911. The delivery of dACC Maritime’s second sister ship is expected in September, while the third and fourth units will come in the second half of 2016.

“We are certain that this joint venture is destined to grow,” adds Clerici, emphasising that after the first series of four ships, more ships might be ordered if market conditions are similar to a couple of years ago.

Coeclerici controls a mine in Russia with an overall annual capacity of some 1.2m tons of coal. The aim is to more than double that in the next 10 years. As it stands, Coeclerici charters 90 ships a year to move Russian coal, a figure set to rise soon.

Since 1895, Coeclerici has been sourcing, marketing and transporting raw materials – primarily coal – from mines to final end-users, serving the power and steel industries internationally. The logistics division has promoted and patented the use of floating terminals and transfer stations throughout the world. At present the Italian trading and logistics company controls a fleet of seven floating coal transhipment terminals deployed in Indonesia and in Mozambique with a structure specifically conceived to transfer coal coming from the mainland on local barges to panamax and capesize bulkers.

“For the future we have a new M&A project with an Indonesian partner that will create a big coal transhipment company to be listed on the Jakarta and Singapore stock exchanges,” Clerici reveals. ●

49

In profile

Roro newbuilds coming Italy’s Giovanni Visentini has a shortlist of yards ready for a sizeable order

I

talian shipowner Giovanni Visentini Trasporti Fluviomarittimi has just taken delivery of the first of four handymax bulk carrier newbuildings in China, while a further four roro ships will be ordered soon. Visentini Giovanni is a shipping company based in Milan, controlled by the Visentini family who are mainly active in the agribusiness in Italy and in North Carolina in the US. The company is the owner of a dozen ships made up of bulkers and roros.

The 38,000 dwt Korean-designed bulkers being built at China’s AVIC Weihai shipyard cost less than $20m

“How many times do we see abuses registered, recorded and promulgated by flag states, or a ship arrested for alleged deprivation of liberty of a seafarer” — David Hammond, founder, Human Rights at Sea

per unit.

“Each of these units can consume 25 to 30% lower bunker consumptions compared to other bulk carriers of the same class,” Giovanni Visentini tells Maritime CEO. Each of the new bulkers is equipped with four cranes and four grabs.

“At the present moment we are experiencing a terrible dry bulk market, but a big help to us comes from these new ecoships which burn 18 tons of bunkers a day instead of 25,” Visentini says.

Since his company took the plunge ordering this novel ship type, a further 20 identical units have been ordered at the same yard by European owners.

The technical and commercial

management of the new ships will be carried out by Levantina Bulk, a company based in Genoa, 90% owned by Visentini and headed

by Pietro Repetto. The ships are going on a one-year time charter to Hamburg Bulk Carrier.

Next up for Visentini are more roros.

“Three Chinese shipyards are on the short-list for the construction of two – with options for a further two – roro units capable of carrying 150 passengers, with 2,300 lane metres capacity garage and 20 knots speed.

The propulsion will be both diesel and LNG. I presume we will sign the newbuilding contract before the end of 2015 with delivery schedule starting from 2017 onwards,” the Italian reveals. ●

Spot on

Giovanni Visentini Part of Milan-based agribusiness giant. Fleet is made up of a dozen ships, a mix of bulkers and roros.

www.splash247.com Splash - for incisive, exclusive maritime news and views 24/7.

50

maritime ceo

In profile

Hillersøy remains sanguine The veteran head of Siem Offshore OSV on today’s depressed market

I

n a last minute call to reach an offshore owner not occupied with docking vessels, and cutting staff Maritime CEO reaches Idar Hillersøy.

He is willing to stick his neck out, despite the lowest point in offshore history. The friendly CEO of Siem Offshore OSV picks up the phone in an upbeat mood despite the fact that he is in airport in Poland after a long day’s work visiting Remontowa shipyard and haggling over delivery delays.

Siem Offshore OSV is among the largest and most important Norwegian offshore owners. Its diverse fleet today stands at 55 ships.

Hillersøy, only recently installed at the helm as CEO with Siem Offshore OSV, is a man with decades of offshore shipping experience, both as an owner and a broker.

“We are looking further out in the sea and deeper,” he says, on where opportunities lie in today’s depressed market. He highlights Statoil’s success outside Newfoundland and the largest oil discovery in this area in 30 years.

Hillersøy knows this area well as he is a former CEO of Secunda Canada.

Other firms on Hillersøy’s impressive CV include Simon Møkster Shipping, Norwegian Contractrors and Stolt

Spot on

Siem Offshore OSV Part of the Kristian Siem empire, Siem Offshore OSV today operates a diverse fleet of 55 ships with another nine on order.

Issue TWo 2015

Offshore.

Siem Offshore OSV in one of many owners who has lost business in the Kara Sea, north of Siberia, due to sanctions imposed on Russia.

Siem Offshore OSV also recently had to send home four AHTSs from Brazil, and the seamen on the ships to the unemployment office .

Providing a fillip, the company recently won a tender from the Norwegian government to send a PSV to help the EU’s migrant-saving Operation Triton in the Mediterranean. The Siem ship was one of 48 vessel offers submitted to the Norwegian government from local owners, a sure sign of a desperate market.

Hillersøy fears PSVs will struggle

most in the offshore support arena thanks to a torrent of new vessels that will soon hit the water, launching into an already oversupplied market. How the market is going to absorb all the ships will be difficult for many years to come, he reckons. The subsea segment also looks dire, he warns, noting in particular Subsea 7’s reduced activity and the cutting of thousands of jobs.

While his company is hit by the falling oil price like all OSV players, Hillersøy says one advantage he has is that that the company is backed by Kristian Siem, the founder of Siem Industries, who thinks long-term in everything he does.

Siem Offshore OSV has nine newbuildings on order at Remontowa, nearly half of these (three PSVs and one cableship) will now be delayed. ●

“Ship grounding is the top cause of loss by value, accounting for 50% of all marine insurance claims in excess of €1m” — Bob Couttie, founder, Maritime Accident Casebook

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gadgets

E-type drool

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here are two types of Jaguar cars: you can either own ‘a Jag’ or you can own ‘the Jag’. Enzo Ferrari described the E-type Jaguar as the most beautiful car in the world, and the Eagle recreation of the Low Drag GT is probably the most beautiful E-type there is. Eagle has also a few mod cons, including insulation, air con, a five-speed transmission, and a long range fuel cell. They aim for it to weigh-in at 38kg over a tonne, which apparently gives you the same power to weight ratio as a shiny new 911 Turbo. This is necessarily a guesstimate, as each build is bespoke. But it’s the most gorgeous E-type ever, so whatever you put in it, it will make all but those with a cast-iron will salivate.

$1,071,000+ www.eaglegb.com

On target

F

onderie 47 has taken one of the world’s most famous, most iconic and most deadly gadgets — the Kalashnikov assault rifle — and transformed it into a beautiful watch.

Available in red or white gold, the Inversion Principle Timepiece is a limited edition of 20 pieces, ten of each type with jumping hours, retrograde minutes, and a three-minute tourbillon. Each timepiece bears the serial number of the AK-47 assault rifle from which the steel in the watch was made and each purchase funds the destruction of a further 1,000 assault rifles in Africa.

$195,000 www.fonderie47.com

Hover fun

C

ompared to the Jag at the top of the page, 95 kmh sounds a bit tame. But it’s quite outrageous in an open-topped hovercraft. Powered by a 60 hp twostroke, two-cylinder petrol engine, spinning a 36” pulley-driven prop fan, this two-seater hovercraft will hit 95 kmh eight inches above the ground or water, and can even manage a 20% slope. Lined with US Coast Guard compliant floatation foam, it also floats on water.

You’ll need to check your local laws as to what sort of registration is required, but the ride should be well worth the paperwork.

$19,500 Hammacher.com

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maritime ceo

REGULAR WINE

In the pink Neville Smith gets ready for summer

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s the international conference circuit moves inexorably northwards to Oslo, we must face an eternal question: what to drink with herring.

Let’s be clear from the outset: wine is not the answer to that question. Beer and aquavit make much better companions; so instead let’s assume that you will eschew the pickled for the fresh and summery from the smorgasbord.

Do that and you will be on much firmer ground and in the territory of the season’s most suitable tipple: rosé.

There was a time when such a suggestion would have been met with either unconcealed mirth or downright disdain. I know people

Two to try For a classic, classy Provencal rosé, try Chateau La Tour de l’Evêque 2014 (£10.95, corneyandbarrow. com), certified organic since 2005 and showing plenty of ripe summer fruit.

Issue TWO 2015

who still won’t drink rosé, but for the most part the snobbishness and naff factor have long since been dispelled.

It’s not that I blame the 1970s for everything, but the marketing budget of Mateus rosé, not to mention those squat bottles that made such ‘romantic’ candle holders had a devastating effect on our attitude to the pink stuff.

But for those who know, rosé has always had its place in the drinking year, however short and seasonal it may be. They may not age and they may not have the same pedigree that attaches to reds and whites but the pink ‘uns have plenty to offer.

The best examples – from Bordeaux and Provence as well as increasingly from the New World Old Plains Longhop Rosé, Mount Lofty Ranges, 2014 (bbr. com, £14.95) from South Australia is a New World take, straight Grenache with an appealing freshness and strawberry-driven fruit. ●

– are serious wines with structure and considerable style.

The style you go for is a personal choice of course, but don’t be led into thinking that deep colour and quality always go together. Longer time in contact with the skins will impart the former to the juice, but it can also result in some pretty lurid colours.

When accompanied by a fermentation style, which leaves a lot of residual sugar in the wine, the result can be cloying, with a hot finish indicative of too much alcohol.

There are plenty of sturdy-looking Bordeaux rosés but they will be normally dry and well balanced. The best looking for my money are the ‘onion skin’ examples of Provence – delicate salmon pinks, though with a touch more alcohol from the warmer growing season.

Very high alcohol is no guarantee of anything save a hangover and a wine of 12% ABV is capable of delivering the perfect accompaniment to the smoked salmon, shrimp you will be scarfing down as you graze the buffets and groaning boards of Nor-Shipping. Just avoid the herring if you can. ●

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REGULAR Books

Learning to live together Paul French looks at Sino-US ties

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he world has changed in the first 15 years of the 21st century. China has risen; America has been perceived to have stumbled somewhat. In reality the 20th century was not all American and similarly the 21st won’t be, despite some predictions, all Chinese. Ultimately the two nations will have to learn to live together, facing each other across the Pacific and with a myriad of maritime concerns, regional issues and partners and trade. A number of new books look at this new, sometimes uneasy, sometimes tangential relationship.

Gordon Chang’s Fateful Ties: America’s Preoccupation with China is perhaps a good starting point. Chang, working within various American think tanks, has a somewhat uneasy relationship with China – he famously predicted its Coming Collapse in his book of the same name published in 2003. That didn’t happen. His new book looks at America’s long relationship with China back to first contact and the trading ships of the 19th century.

Chang’s right – America has long been fascinated with the Middle Kingdom – as a potentially vast market, a massive enemy, a possible ally in the Cold War and now an economic rival. However, a

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similar book could be written arguing that China has long been fascinated by America – republican, economically successful, militarily strong. Chang sees the relationship as uneasy but that those historical ties of mutual fascination could prove to be what binds the two continental economies together this century.

Henry Paulson’s book, Dealing With China: An Insider Unmasks the New Economic Superpower, is more detailed in terms of policy conflicts and so-called ‘hot button’ issues. This is as might be expected from a former head of Goldman Sachs and Treasury Secretary.

Paulson’s account is highly anecdotal and, it has to be said, anecdotes are useful when coming from someone who has had the access Paulson has. Part how-to-do business book, part guide to diplomacy in China, part explanation of China’s rise, Dealing with China is highly useful. A criticism might be that Paulson’s intimate dealings with Beijing are somewhat dated now in the era of Xi

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Jinping, anti-corruption and the ‘China Dream’, but he still remains one of the highest level interlocutors with Beijing since Kissinger.

Some authors do see problems that could lead to conflict. Ted Galen Carpenter’s America’s Coming War with China posits the scenario that the conflict point will be Taiwan. Galen Carpenter sees Taiwan (backed by the US) and mainland China on a collision course, and unless something dramatic changes, an armed conflict is virtually inevitable within a decade. He offers remedies but many will argue that he overstates the case as Beijing learns to live with a vibrant Taipei and vice versa.

From a different perspective Lyle J. Goldstein’s Meeting China Halfway offers points on how Washington and Beijing could diffuse tensions and come to see their reciprocal need for each other in this new century. Goldstein suggests a ‘cooperation spiral’ rather than a downward spiral of conflict. As ever with history – time will tell. ●

America has long been fascinated with the Middle Kingdom as a potentially vast market and now an economic rival

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maritime ceo

Travel

Endor had similar feelings about the Death Star sitting overhead.

Take a short walk down the hill to the Holmenkollen Park Hotel.

This hotel is perhaps Norway’s finest example of dragestil (Dragon Style!) architecture. It’s as impressive as anything named after a dragon should be and boasts stunning views and top food. It is a good accommodation option if the centre city isn’t your thing.

Not just herrings

City of surprises As Nor-Shipping kicks off Graeme SomervilleRyan picks out parks, palaces and pubs in the Norwegian capital

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ew cities in Europe have the ability to surprise quite like Oslo. The views, the waterfront ambience, the rapidly developing restaurant scene, and a stubborn refusal to let go of its connection to nature all leave an indelible impression on visitors. In summer, waterfront Oslo has a decidedly antipodean feel to it: not too big, relaxed, and fun. For so long the underappreciated, slightly less pretty sister of Bergen, Oslo has found her own sense of style.

Winter is another story. But this is Maritime CEO, and we’re talking about Nor-shipping. So what to do in Oslo if you’ve arrived a day early and you’re steeling yourself for an entire week of meetings, seminars, presentations, and entertainment?

Oslo offers an array of easily accessible parks and gardens. In summer these are popular local escapes for a quick run, brisk walk, or a place to hang out in the summer sun. The dress code can best be described as business casual/ athletic/minimalist.

Frogner Park, which is 35

Issue two 2015

minutes walk from Oslo City Hall, is the largest park in central Oslo and is known locally as the ‘Naked People Park’. Before you get your hopes up, this is due to the statues, which are a feature of these beautiful and popular gardens.

The Royal Palace and park which is just five minutes walk from Oslo City Hall is a perfect place to get away from the urban bustle. Take a sandwich and relax in the gardens.

Guided tours of the palace are available.

Next up is Holmenkollen Ski Jump/Ski Museum/Holmenkollen Park Hotel Rica. To get there take train line T1 to Holmenkollen Station, it’s about 25 minutes and a short walk.

At around 10 km from the City Hall, the Holmenkollbakken ski jump sits ominously above the central city.

One thousand tons of steel reaching 60 m into the air. It’s a constant reminder of either sporting insanity, or that there are people in this world with far greater powers than the average man. I imagine the Ewoks of

The Oslo food and beverage scene now offers something for every taste – from Italian, Thai-Norwegian fusion food, though to rooftop bars and microbreweries. There is no shortage of good food and drink. It is always wise to take a jacket (it can get on the chilly side), and inform the company finance team of your location.* Solsiden (Akershusstranda 13) is one of the best seafood restaurants in town...and the Norwegians know how to do seafood. Rustic, popular, and only open in the summer – get in while you can.

Amundsen Bryggeri & Spiseri (Stortingsgaten 20) is situated in the middle of town, opposite the National Theatre. Amundsen offers a very good range of in-house craft beers.

Bølgen & Moi (Løvenskiolds Gate 26 is the perfect ‘wet-lunch’ venue.

Great atmosphere, outdoor seating (weather permitting), and potentially a lot of fun.

What better way could there be to celebrate modern Norwegian cuisine… than by grabbing some Thai. But the locals hold the Thaifusion food and garden setting of Sawan (President Harbitz Gate 4) in high regard.

The Thief/Thief Roof (Landgangen 1) is part of a hotel, but this is one of Oslo’s few roof-top bars.

Enjoy great views of the Oslo fjord. *Norway is not a cheap place to visit (Editor’s note: severe understatement), and no prices are quoted in this article. ●

55

REGULAR GOLF

Chipping onto paradise

Ian Claxton, the head of Thoresen Shipping, takes the Maritime CEO golf challenge, outlining his favourite hole in the world

W

hat a question! What a challenge! What a quandary!

My membership of the ‘Happy Hackers’ club is about 10 years now, but still there’s so many great courses to choose from, let alone holes.

At one end of the spectrum, my mind goes back to the Willingdon Golf Club, in the very centre of Mumbai, a par 68 course, where rain stops play every monsoon and there’s a ‘growing’ rock sitting by the ninth hole, par four green - I kid you not, it actually gets bigger year on year.

At the other end my experiences on championship courses such as Amata Springs in Thailand, a floating green on the 17th, par 3, which varies in length depending on the groundsman’s mood that day, or the par four, fourth hole of Sentosa’s Serapong course

56

hitting out to what must be the most spectacular setting of any green in Asia with the financial centre and mammoth working containerships as background.

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The buggy coolbox holds up to six silver tumblers full of G and Ts

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I should be most biased towards Thai courses, the caddies clearly making this a great golfing favourite. Yes, hot and sticky weather can be a setback, but compensated by the umbrella caddy and, of course, not forgetting the massage caddy, there are plus points. There are many great and challenging Thai courses too – Black Mountain, Hua Hin, Blue Canyon and Siam Waterside, to name just a few.

So surprisingly in fact, my choice is to go with the fourth at Anahita Golf Course in Mauritius (pictured).

Ernie Els designed the course, volcanic mountains backing, white sun bleached coral sand fronting and a turquoise blue reef ahead. May/June temperatures at a dry 25 degrees means no need for my umbrella or massage caddy,

unfortunately leaving me to manage my own cigar, but at least the buggy coolbox holds up to six silver tumblers full of G and Ts. The hole itself? Par four, arrow straight, 425 yards off the blue tees.

The tee box nestled back into mature trees takes away any indications of the windage to come. A relatively wide fairway lined with villas on the left and flowering 12 ft high sugar cane on the right, both out of bounds.

My pathetically average drive at 230 yards is a perfect distance to land in bunkers both left and right, so its best I go left and allow for my usual slice.

Second shot to the green, a good 190 yards direct towards the ocean, which, depending on the time of day can be blowing a gale either into your face or your back. Be careful then, a four iron takes you either on the green for two or to Madagascar for the summer. Best go two short of the green with a five iron. Chipping on for three, to putt what is a beautiful green surrounded by coral sea on three sides. Fantastic, except for the howling wind, and three putts later, I’m happy with my double.

The biggest issue with this hole is keeping the cigar lit. Mauritian golf - c’est beau! Happy hacking! ● maritime ceo

Yachting REGULAR

Away from the hustle and bustle The boss of Bengal Tiger Line, Bill Smart, heads out from Singapore to neighbouring Malaysia, highlighting his favourite boating haunts

P

eninsular Malaysia’s east coast is close enough for a long weekend escape yet far enough from any industrial shores to enjoy crystal clear waters and some tranquil spots to overnight in one’s boat.

On departing Singapore one gets reminded just how busy our shipping approaches are and how diverse the transiting and anchored tonnage really is – from containers, bulk, wet to roros and ferries, let alone offshore’s rigs and supply tenders.

The approximate 120 nautical mile journey to Tioman, the largest inhabited island in the area, takes roughly eight hours including an immigration stopover. Whilst a small destination marina exists most overnight at Pulau Tulai, which boasts a combination of beautiful coral beaches, mangrove swamps (nursing baby sharks) to a deep diving bay for

Issue TWO 2015

scuba action.

Brilliant sunset evenings allow for sundowner cocktails – by then a welcome change from the voyage’s Tiger beer – and of course a barbecue sporting the finest cuisine that the local Singapore supermarket can supply.

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What is boating without some variety and survival success?

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Being just north of the equator the occasional tropical storm gives rise to some sailing decisions and the sudden accompanying strong winds often test one’s anchoring skills – but what is boating without some variety and survival success?

A return cruise via Pulau Aur

where Napoleon fish chomp at the corals and from where many a dive exhibition is mounted, is a pleasant journey breaker although some rough seas out of season can deter the feint/seasick hearted.

The relatively busy return route, which joins commercial shipping traffic through the straits, was once made more exciting by an accompanying surfaced submarine, which graciously slid through the slight swells.

In summary, the ability to escape from the hustle of modern commercial Singapore via a short soothing sea passage to some remote peaceful tropical island somehow justifies the financial burden of boat ownership – defying the adage that the best two days of owning a boat are the day you buy it and the day it is sold. ●

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The Secret REGULAR Container Lessor

Jack of all trades Every issue we seek someone brave to reveal all about their sector. This time, we’re talking boxes

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ow here is an occupation, which enjoys a certain modernity. Your container lessor is what modern youth calls a mash up. Part banker, part shipping company operator, accountant, repairer, logistician, credit expert, international trader and even, now and again, swashbuckler. Think Robert Sherwood of Sea Containers, a man who spun $100,000 into a mighty shipping and leasing empire.

Or Robert Montague of Tiphook, back in the good old days of the 1990s, the second largest container and trailer lessor in the whole wide world. Or the wily Ian Karan of Clou Container Leasing, Ceylonese, Brit and recently naturalised German, a man who has bought and sold many container leasing companies and made a number of fortunes. A man who suffered many assaults on his dignity by the misinformed.

The high towers of container leasing are in places where the ocean intermingles with more clerkly industries. If you are a big player in

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container leasing or a wannabe you go to places like London, San Francisco, Hamburg or Hong Kong. It is in such places that the small pool of industry expertise is of largest depth and circumference. In San Francisco there is even a skyscraper dedicated to the industry, the elegant and pointy Trans America building. In the offices of container lessors there will be many dramatic pictures on the wall having a unit load, containerised or maritime theme. This is because there is nothing much to see outside the offices.

The boxes are scattered all around the world, en route or en depot, they are bland and painted in functional leasing company livery. In the past the quicksilver nature of leasing fleets made the industry attractive to those who would launder money, or ponzi investments in boxes. When historians of East Germany came to chart the organisation of the Stasi, the feared security apparatus, one of the more recondite divisions was based in Switzerland, charged with container maintenance.

For container leasing is a business where attention to detail cannot be too exacting. All those daily charges or boxes off lease in storage, those $15 dent repairs, the daily lease charges from customers. Your container lessor aims to be a master of the universe when it comes to credit and debt. He has every shipping line listed in his little computer, and the maximum he is prepared to lease on credit to such companies. It can be very volatile, when economies are in great flux, or it can be a rather dull money machine in times of high shipping demand for boxes. For years and years, as long as can be remembered the price of a standard 20 footer has been $2,000. And always with the innovation. What computers can do to help the lessor? All those bitty transactions, each container running with dozens of bits of transaction papers evidencing costs for repair, cleaning, storage, repositioning and so forth. When there is a legal or insurance dispute, you should see the banker boxes all piled high on serried ranks of sack barrows.

And world affairs come into it as well. The draw down of forces in Afghanistan has involved the stowing of all manner of outbound kit in around 60,000 teu. A lot of those boxes were leased to Uncle Sam and allies and kind of requisitioned for improvised houses and offices. Just think of the winding down — how many days on hire, residual value, drop off locations, quite a list of contentious subjects.

You don’t need a great big staff for offices. But they do need to be comfortable with spread sheets. What is the sound you will here in the offices of the world’s great container lessors?

Murmer murmer. Tap tap. Whirring of solenoids in industrial grade laser printers. ● maritime ceo

The REGULAR Contrarian

Paper, paper, everywhere In the age of the internet, Andrew Craig-Bennett wonders why ships have to carry so many outdated certificates

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hat is the point of issuing the master of a ship with bits of paper and requiring him to show them to people who turn up onboard and insist on their right to look at them?

The correct answer is, “To enrich corrupt port officials”.

I know a ship, which recently put into a Russian port for bunkers; the agent came on board and insisted that he needed to take the folder with the trading certificates ashore with him. Soon afterwards two gentlemen from Port State Control turned up and asked for the certificates, and on being told where they were – ashore with the agent – imposed a fine of $500.

There is only one sensible place for a ship’s trading certificates, and that is on the internet. If governments can keep their motor vehicle tax records on the internet, surely the same can be done for merchant ships? If the trading certificates are on the internet, national authorities, port officials, even charterers and underwriters can look them up when they first have to think about the ship rather than waiting until a ship arrives in port.

If the IMO cannot be trusted to keep a website up to date, no doubt IACS can do so, since most of the bits of paper are issued by its members.

This leads me to the most useless bit of paper yet devised by the IMO; the Nairobi Convention Wreck Removal Certificate, required as of February 14 this year. Like the other ‘evidence of financial responsibility’ certificates, this is issued by the

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ship’s flag state, against a fee and a ‘blue card’ (in reality, a PDF) issued by the ship’s P&I Club.

So why do we call a PDF, an electronic document, which is not blue, a ‘blue card’? Nobody knows.

Some people trace an analogy with the US permanent residence certificate, which was green when it first appeared in 1946, while some people think it was because the paper used by early computer printers was sometimes blue. At all events, this system has been with us since the Civil Liability Convention of 1969, which created a system for paying for oil pollution from tankers which was indeed a wonderful thing in its day, and which created the system.

1969 was 46 years ago. The Vietnam War was at its height, the Beatles were still making records… and the IMO has not come up with a better system, but has just multiplied the old one with Bunker Convention Certificates, Athens Convention

If governments can keep their motor vehicle tax records on the internet, surely the same can be done for merchant ships?

Issue TWO 2015

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Certificates and now Wreck Removal Certificates.

Talking of certificates, the UK Chief Inspector of Marine Accidents, Captain Steve Clinch, says that it would not be a bad idea if anyone who holds a certificate of competency as officer in charge of a navigational watch should be required to undergo a practical exam in a simulator once every five years, to make sure that they are up to speed with the Collision Regulations.

Can anyone think of a good reason why this should not be done?

For the avoidance of doubt, may I say that the reason given for not requiring oral examinations as a part of STCW, namely that, in many nations, the candidate will slip a wad of notes to the examiner, is not a ‘good reason’. Like many things in merchant shipping, that is a bad reason.

Bureaucratic inertia, as demonstrated by the IMO sticking with a 46-year-old idea, which was elegant when mainframe computers had less power than your phone has today, is always a bad reason.

Is there intelligent life at the IMO? There is very little evidence for it. ●

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MARPOLL REGULAR

Your thoughts More than 500 people voted in our latest topical survey. Results and key comments below Is overcapacity at shipyards now a permanent feature of shipping?

Will all these new pools continue to operate once rates pick up?

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Shipyards have become very much more productive, and they have political influence which other parts 77% ofYes the industry lack No 23%

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Shipping is a field of the most unscrupulous, opportunist scoundrels, rogues and pirates. They go Yes 41% No 59% where money is. There is no honour, even among thieves

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Yes 77%

Yes 41%

No 23%

No 59%

What is the best bargain in the secondhand market now?

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Should all seafarers have access to broadband internet at sea?

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As an industry we need to make more effort to attract, develop and retain

You can get cheap ships in all segments Handysize bulk carriers 17%

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Handymax bulk carriers 24% VLCCs 22%

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Product carriers 13%

Yes 71%

Containerships up to 3,000 teu 24%

No 29%

Handysize bulk carriers 17%

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Yes 83%

Handymax bulk carriers 24%

No 17%

VLCCs 22% Product carriers 13% Containerships up to 3,000 teu 24%

Is India ‘the new China’ for shipping?

Is the IMO doing enough to protect the lives of seafarers?

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Too inefficient and lack of synchronised efforts across the entire value chain to pull 42% China has done offYeswhat No 58%

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Yes 42%

Yes 43%

No 58%

No 57%

There are many simple initiatives that take too long for the IMO to endorse and of new Yes implementation 43% No 57% safety regulations are patchy as some PSC jurisdictions are more vigorous than others

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maritime ceo

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