the Baltic
the
Lessons from the Titanic
SUMMER 2012
Ravi Mehrotra: risk taker Panama Canal woes Dubai back on track
T h e O f f i c i a l M a g a z i n e o f t h e B a lt i c E x c h a n g e
SUMMER 2012
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the
BALTIC The Baltic is the official magazine of the Baltic Exchange Tel: +44 (0) 20 7623 5501 E-mail: enquiries@balticexchange.com Website: www.balticexchange.com The Baltic is published for the Baltic Exchange by Maritime Media Ltd The Diary House, Rickett Street London SW6 1RU Tel: +44 (0) 20 7386 6100 Fax: +44 (0) 20 7381 8890 E-mail: inbox@mar-media.com The Baltic annual subscription rates £110 for UK, Europe or the world, sent airmail including P&P
Publisher
W H Robinson editor
Sandra Speares Tel: +44 (0) 1483 527998 E-mail: sandra.speares@mar-media.com
SALES manager
David Scott E-mail: david.scott@mar-media.com
DESIGNER
Justin Ives
ISSN 0967-0394 This publication is printed on PEFC certified paper. PEFC Council is an independent, non-profit, non-governmental organisation which promotes sustainable forest management through independent third party forest certification.
The Baltic is published on behalf of the Baltic Exchange and is supplied to members as part of their annual membership package. However, the views expressed in The Baltic are not those of the Baltic Exchange, its directors, its officers or the publishers unless expressly stated to be such. The Baltic Exchange is the world’s premier and oldest international shipping market. Most of the world’s open market bulk cargo chartering is negotiated at some stage by Baltic members who represent leading international companies. Other activities include the world’s most important market for buying and selling ships, specialist freight by air and commodity dealing. The Baltic Exchange operates a strict code of business ethics encapsulated in its motto ‘Our Word Our Bond’. The Baltic Exchange disclaims any responsibility for the advertisements contained in this magazine and has no legal responsibility to deal with them. The responsibility rests solely with the publisher.
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Contents Chairman’s message 7 Mark Jackson Baltic briefing 8 7
The risk taker
10 Cutty Sark reopens 11 ASBA/Baltic cocktail party 12 Forza Italia 13 Sporting contacts
8
Logbook 16 Crossing guards People, places, plcs 19 Word games
10
Baltic comment 22 Michael Grey State of the market 23 Tankers
19
25 S&P 27 BIMCO 30 Dry Bulk 31 Heavylift and Offshore 34 Towage and salvage
31
38 Shipmanagement, crewing and education FFA 42 Steel challenges Environment 44
44 Going Green? theBaltic Summer 2012 www.thebaltic.com
3
Contents Oxford Analytica 48 Rough ride on the Panama canal Maritime security 48
51 Counting the cost of piracy Risk management 56 Risky business Shipbuilding
51
60 Backs to the future Consultancy and surveying 62 Surveying the future Forest products
  62
64 Paper trail Maritime Cluster 67 Dubai is back on track Libya
  64
72 Time of change Finland 73 Applying the Finnish-ing touch Insurance news
67
76 Insurance parlance 78 ITIC Legal news 79 Flying the flag?
73
88 Events theBaltic Summer 2012 www.thebaltic.com
5
Chairman’s message Mark Jackson
Chairman’s message W
ith my retirement from the Baltic Board rapidly approaching, it is with a mixture of sadness and relief that I find myself penning
my last Chairman’s Message for the Baltic magazine. The past three years have been difficult for an industry facing a high probability of a prolonged period of low freight rates, high costs, piracy, sanctions and an increasing regulatory burden on both its vessel operations and financial transactions. We have endeavored to support our worldwide membership through these tough times by providing advice, blacklisting those who have failed to honour their contractual obligations to our members, lobbying governments to ensure a level playing field for shipping and keeping our subscription fees down. We have also successfully launched a trading facility for dry FFAs. Baltex has been up and running for a year now and has made good progress. We now have 30 principals Tradewinds
signed up and trading on the system and all the FFA brokers are able to use it. But the key challenge remains to convince the FFA market to incorporate screen trading into their everyday thinking and transactions before external forces make them. Most trades are still telephone
Mark Jackson
brokered, but the advent of greater government regulation of OTC derivatives coupled with
member can take a “level 3” subscription to our
much stricter regime covering the use of Baltic
the many advantages for end-users including
tanker and dry market services and instantly
data deliver greater profits and therefore greater
speed of transaction and transparency mean
redistribute the information to their clients who
dividends for panelists and members, or would
that change is inevitable. I remain confident that
may or may not be members. This means
it be counter-productive? I don’t pretend to
the Baltic will not regret its decision to develop
that there is a large group of companies out
have the answers to these questions, but I do
a multi-lateral FFA trading system.
there who see little value in joining the Baltic
know that in our information age, much of the
Another key challenge still facing the Baltic
Exchange as they receive our data for free
value of the Baltic Exchange lies in its data.
Exchange is extracting greater value from its
directly from our members. Should a member
This is an issue which the Baltic Exchange will
indices and freight market information services.
who has not participated on the panels which
continue to look at.
Whilst we continue to clamp down on any
enable the Baltic to produce such a well
It has been a pleasure serving as Baltic
unauthorised publishing of our data, under
respected source of independent freight market
Chairman and I wish my successor all the best.
the current arrangements any shipbroker
data continue to be allowed to do so? Would a
theBaltic Summer 2012 www.thebaltic.com
7
Baltic briefing
The risk taker Bill Lines meets Indian entrepreneur and Baltic Exchange member Ravi Mehrotra, CBE
W
ill we see the likes of Ravi
the reefer sector as well as setting up drilling
to greet the guest, but a small friendly team
Mehrotra again? Probably not.
operations. However, it was this rapid high yield
ushers the visitor to the chairman’s unassuming
An Indian born marine engineer
bond financed expansion that was nearly his
office. The office reflects Foresight’s pragmatic
turned entrepreneur whose ven-
downfall as his company’s bond value collapsed
attitude to business. Indeed it has served as
tures over the years have included shipowning,
in 2002 and the company went into Chapter
the company’s headquarters since its founding
oil exploration, cruises, restaurants and now
11 administration. The company emerged from
in September 1984 and many of the team
shoe manufacturing, Ravi Mehrotra is a man
the ashes and moved into the containership
members have been with Foresight since its
who bought his first ship in 1984 and has never
and tanker markets as well as an unsuccessful
early days.
let an opportunity slip since.
attempt to develop luxury Indian cruises in 2006.
The lively, with a jaunty smile, 70 year old
His rise from a Shipping Corporation of India
The latest development has seen Foresight form
Mehrotra is charm personified and disarmingly
(SCI) technical superintendent to multi-millionaire
a joint venture with British shoe brand Pavels in
open about both his successes and his
shipowner is a fascinating story. Following a few
an attempt to crack the Indian shoe market and
failures. It is probably his bruising experience
years at sea and then an unhappy stint at SCI’s
become a leading player.
with the bond markets in the early 2000s
head office, it was his posting to Iran in the
and subsequent successful emergence from
1970s which was the making of Mehrotra.
Chapter 11 bankruptcy protection proceedings
He was sent to Iran to be part of the team running Irano Hynd Shipping, a joint Iranian Indian venture operating under the Shah’s regime. However, the Iranian Revolution of 1979 saw the removal of the Shah and the expulsion of most foreigners, but not Mehrotra. Iran was, and still is, reliant on revenue from the oil industry and needed to develop its shipping industry to get its oil on the international markets. At the personal request of the Ayatollah Khomeini, Ravi Mehrotra , then aged only 38, was appointed as the “Principal Advisor on Shipping”, to post
“Shipping really isn’t a brain-teaser, success is just down to hard work”
number of shipowners finding themselves in a similar unfortunate position grows. Mehrotra puts his successful escape from the clutches of predatory investors down to two factors. “I went to the best bankruptcy law firm in the US and spent nearly $5m with them. They had never previously lost a bankruptcy case and I had to persuade them to take us on board. They advised us to go to Chapter 11 voluntarily and we managed to convince the judge that the company still had a life. We were sitting on a
revolution Iran. Mehrotra
which are of particular interest today as the
describes
the
Ayatollah
cash pile and no ship had ever been arrested.”
as
The second factor was his refusal to give up.
“intelligent and capable” and someone who
The whole story can be read in Ravi
recognised the importance of shipping “to
Mehrotra’s new book What’s in it for You?.
Reliving his experiences with Wall Street, he
ensure the continuing flow of petro-dollars”.
Covering some of the most turbulent times of the
recounts: “I said to hell with you! I didn’t struggle
Despite being a non-Muslim Indian national, it
shipping era, the autobiography gives an insight
all my life to hand over this company, so I rolled
was Ravi Mehrotra who nationalised and then
into how someone without access to personal
up my sleeves and fought them.”
built up the Arya National Shipping Line - today’s
wealth became an independent shipowner,
Islamic Republic of Iran Shipping Lines (IRISL).
survived near bankruptcy and much more.
His description of the workings of the bond markets in his autobiography makes
Stepping into Foresight’s unremarkable
salutary reading to any shipowner. In it we
offices in the City of London to meet the man,
read of vulture funds, restless investors and a
In 1984 he left Iran for Europe and set up
little would the unprepared visitor know that
predatory rival shipowner.
Foresight, buying a $5m tween-decker at an
this is the headquarters of a $1bn international
Understanding Mehrotra’s story is important
auction in 1986 and rapidly expanding into
operation. No grand lobby or wood paneling
to any shipowner seeking third party investment
During his time there the Iranian fleet grew from 28 to 131 ships – larger than India’s own fleet.
8
theBaltic Summer 2012 www.thebaltic.com
Baltic briefing
Freight derivative forums 2012 T
he Baltic and FFA Brokers’ Association will be running a series of forums in Europe and
Asia this year. Covering both the dry and tanker markets, the forums are designed to bring together senior traders and brokers as well as potential market participants. Entry is free to all Baltic members and their guests.
Dry FFA Forum, Amsterdam, 20 September Tanker FFA Forum, Geneva, 15 November Dry FFA Forum, Singapore, end Nov (date tbc) For further details please contact Robin King. Tel: +44 (0)20 7369 1637 or email: rking@balticexchange.com
Baltic team enters 3 Peak Challenge
Ravi Mehrotra
and students of ship finance today wanting to
British handover back to China, there were just
learn more about the failure of junk bonds.
too many uncertainties. According to Mehrotra,
T
he Baltic Exchange is entering a team into the 3 Peak Challenge, a race up three of the
But could someone of Mehrotra’s ilk emerge
India just was not open to business then and
UK’s highest peaks (Ben Nevis, Helvellyn and
today? Could someone with expertise, a thick
New York was considered to be difficult to
Snowdon) within a 24 hour period in support
contacts book and a willingness to work hard
crack for a new player. After a stint in both
of the Sailors Society. The team will be made
and take some risks, but no personal wealth
Zurich and London, London was established.
up of Laurie Campbell, Paul Stuart-Smith and
But would an entrepreneurial shipowner make
Anastasis Mouktaris. The team is aiming to raise
Mehrotra says probably not. “Today’s
the same choice today? No, says Mehrotra. He
over £11K for the Sailors Society in support
entrepreneurs find it easier to be brokers and
says that although he has no plans to leave, if he
of work sustaining a network of profession-
ship managers rather than owners,” he notes.
were the same position today, then Singapore
ally trained chaplains working as ship visitors in
“In today’s culture, the cost of sweat is never
would probably have the edge.
ports around the globe providing welfare sup-
become a successful shipowner?
calculated. Shipping really isn’t a brain-teaser, success is just down to hard work.” He also notes that the complexity of safety
“London is losing ground,” he says. “There
port to merchant seafarers. To make a donation
are no new local entrepreneurs and the non-
please visit www.justgiving.com/Balticexchange
dom taxation issue doesn’t help.”
and environmental regulations today, mean
I leave Mehrotra to make his preparations for
that any shipping company needs at least half
a one month trip to his offices in India and work
a dozen technical superintendents, whatever
on his foray into the shoe business. Even at 70
its size.
his appetite for risk is as great as ever.
Mehrotra set up Foresight in London back
What’s in it for You? is published by Macmillan
in the eighties after careful consideration of
Publishers India, www.macmillanindia.com, at
a range of shipping centres. Singapore was
£12.00. All proceeds from the sale of the book
out of the question due to a lack of banking
will be donated to the Amer Maritime Training
facilities at the time; he felt that Hong Kong was
Academy.
dominated by the Chinese and with the looming
theBaltic Summer 2012 www.thebaltic.com
9
Baltic briefing
Baltic at Commemorating the 20th Posidonia 2012 anniversary of the Baltic bomb T T he Baltic Exchange will be exhibiting at the
he Baltic commemorated the 20th anniversary of the bombing of the Baltic Exchange in April with
Posidonia trade show this June, together
with the Institute of Chartered Shipbrokers. We will be showcasing all our services, so do come and see us on stand 3510 in Hall 3.
a service at St Botolph-without-Bishopsgate. Baltic Exchange vice chairman Quentin Soanes
addressed the congregation with the following words:
“This service marks 20 years since the lives of all Baltic members and many others besides were turned upside-down by the bombing of the Baltic Exchange by the IRA. Three people were killed, and we are pleased to see Margaret Casey and other members of Tom’s family here today and two
New shareholder directors S
people here today, Jeffrey Blum and Ron Brooks were seriously injured. In the months and years that followed the explosion that Friday night, many Baltic members mourned. Of course they mourned the loss of life. However, they often appeared to mourn the building itself, which perhaps seems a strange thing. It was indeed a beautiful building and we felt honoured to visit daily. In fact, we loved the place. But I think that to assume it was the building we mourned is to misread the situation. The Baltic generated an extraordinary sense of community. At the Baltic Exchange we did our business together;
tefan Albertijn (Alfred C Toepfer International)
we ate and drank together; we gossiped, planned and reviewed weekend activities, planned and
and Anthony Carroll (Gray Page), will be
reviewed sports, often playing in the name of and on behalf of the Baltic. Here were our friends; our
joining the Baltic Board of Directors as share-
other family, our second home. It was the sense of community which we mourned.
holder directors at the conclusion of the next
However, we have all moved on. The Baltic has moved on and to some extent re-invented itself,
Annual General Meeting. They will replace Mark
whilst we hope retaining the essence of what it always was. Offices have moved, the business has
Jackson and Paul Over.
changed, but much of the sense of community, as evidenced by the turnout here today, remained firmly intact, despite our continuing sense of loss. Our service this evening is about moving on. There is no need to forget anything, but it is important
Sadly departed W
to be reconciled, to look forward, and to continue to seek peace and to celebrate it where we find it, especially of course in the Good Friday Agreement.”
e are sorry to report the passing of the
Cutty Sark reopens
following Baltic members:
Antonios K. Antoniou Mr Antoniou was elected a member of the Baltic in 1964, representing Pergamos Shipping Co Ltd until he became a retired member in 1989.
T
he Cutty Sark, once the world’s fastest merchant sailing ship, has been restored following a fire and is now open to the public in Greenwich, London. The Baltic Exchange was one of many
organisations and individuals who contributed towards the vessel’s £50m restoration. The vessel caught fire in 2007 when an original phase of restoration work, for severe corrosion, had already
John Louis-Marc
begun and the Cutty Sark was almost lost. Nearly a tenth of the ship was destroyed, but fortunately
Mr Louis-Marc was elected a member of the
many of the important historical parts had already been removed.
Baltic in 1965 representing Panchripol Ltd until he became a retired member in 1989.
The 143-year-old Grade-I listed vessel has been lifted 11 feet off the ground, allowing
Leslie Dorey
visitors to walk beneath the
Mr Dorey was first elected a member of the Baltic
dramatic contours.
Exchange in 1962. From 1976 he represented
Baltic
Exchange
chief
Tatham Bromage & Co Ltd and became a retired
executive Jeremy Penn said
member in 1993.
that the vessel was “an important symbol of the UK’s
Jonathan Allyson
maritime and trading legacy
Mr Allison was first elected to the Baltic in 1964.
and helps explain why London
From 1976 he represented Tatham Bromage &
has such a breadth and depth
Co Ltd and then Cornavin Shipping from 1993
of maritime services today.”
until his retirement in 1999.
Built and launched in Dumbarton
in
Scotland
David Turner
in 1869, the clipper visited
Members will learn with regret of the death of
most of the major ports in
David Gordon Turner at home in Johannesburg.
the world, making her name
Mr Turner was a member of the Baltic
transporting tea from China
Exchange between 1970-1980 representing
but also carrying everything
Continental (London) Ltd.
from wool to coal.
10
theBaltic Summer 2012 www.thebaltic.com
© Telegraph Media Group Limited 2012
Baltic briefing
ASBA/Baltic cocktail party A
SBA and the Baltic Exchange held a cocktail party during the CMA week this March in Stamford, CT. As ever this was one of the parties
of the week, attended by over 300.
Baltic Exchange chief executive Jeremy Penn and ASBA president Bill Stewart
Craig, Brendan and Robert Dillon
Sandi Ennor, Jeanne Cardona (ASBA) and Meghan McCurdy
James Russell-Walling, Andrew Swan, Van Tsagaris and Ed Lundin
This year’s reception was held at Butterfield8 in Stamford
theBaltic Summer 2012 www.thebaltic.com
11
Baltic briefing
Forza Italia Prosecco and Pinot Grigio are leading the charge, but it’s the diversity of her grape varieties that is returning Italy to centre stage, says David Hughes
T
he Italian vineyards are vast, stretch-
such as Lake Garda for the northern vineyards
increasing production from her south and her
ing from the snowy embraces of the
of Valpolicella.
islands, particularly Sicily.
Tyrolean Alps that border Austria to the
Aspect and vineyard plantings are also
Sicily’s wine development has been nothing
southern islands where, if the wind is
determined by height. Italy has the Alps to
short of sensational. First thought to be too hot,
behind you, you’d be heard on the beaches of
the north and the Apennines as a backbone
careful plant selection and modern technol-
Tunisia.
down the centre, giving options galore to plant
ogy has raised Sicily to become Italy’s largest
on south-facing slopes to maximise all the
wine producing region and, for the time being,
daylight hours.
offering exceptional value and range.
The country produces more wine than any other country and Italians, per capita, drink more wine than any other country. However, they don’t
There are some 2,500 grape varieties and it
Sicilian white varieties in your wine shop to
drink all the stuff, for they are the world’s biggest
has been my mission to discover some of the
look for are Grecanico (planted by the Greeks),
exporters. In fact 22% of all wines consumed in
stunning varieties that have lain hidden.
Catarrato, Inzolia, Grillo and Fiano – all pleasant
the world are Italian.
In the “old days”, we were brought up with
and easy drinking.
Historically, Etruscan and Greek settlers
(white) Frascati – from the hills around Rome,
The dark, rich red variety Nero d’Avola (black
produced wine in the country long before the
Soave, made near Verona and Verdicchio in the
devil) is the indigenous king and there are also
Romans developed their own vineyards in the
amphora shape bottle from the Adriatic coast-
the Nerello varieties that blend in reliable brands
2nd century BC. However, in truth, much of
line – all fairly light and easy-drinking with the
like Corvo (which also makes a white wine).
the pioneering towards modern day wine mak-
latter two making some stunning fight-backs.
We must also pay recognition to Sicily’s wonderful dessert wine Marsala, invented by an
ing is due to the foundations set by the Romans,
We have now been overrun by (mainly)
particularly vineyard management, which led
very ordinary Pinot Grigio, which hails from the
to large scale production and, in 3 AD, from
region just north of Venice, or we splash out
The south also gives us notable regions,
the occupied Gauls, they learned barrel-
on Gavi di Gavi, which consists of mainly good
such as Puglia, just above Italy’s heel where
making which replaced the ancient amphora
production from Cortese grapes from the very
reds from the Primitivo and Negroamaro grapes
for storage.
north-west of the country.
give mouth-filling stunners.
Englishman, John Woodhouse, in 1796.
They took the vine to all their conquered
Our reds were (the now excellent) Chianti
A favourite region of mine is Campania,
territories and thus to this day the term “New
from Tuscany and the big, chunky Barolo, from
south of Rome, where extraordinary – although
World” refers to any wine-making country that
the same region (Piedmont) as Gavi. One of the
pricey – food-matching whites such as Greco di
was not ruled by Rome.
biggest misunderstandings is with regard to
Tufo, Falanghina & Fiano d’Avellino prevail with
Some say that the French are obsessed by
Valpolicella, but not the old-days corner shop
the main red from the berry-infused Aglianico.
terroir – the influence soil has on the vine – and
bottle. The northern region of Valpolicella’s
Sardinian wines are also excellent, the native
while this applies with Italy, I feel it is aspect –
grape varieties – of which Corvina is the main
varieties being the white Vermentino and red
where the vineyard is planted – that prevails,
star – makes stunning wines. I love the region’s
Canonnau (Grenache in France).
and Italy, like no other wine-growing country,
easy-drinking, fresh red cherry Bardolino by lake
It was the Chinese, not the Italians who
has aspect aplenty.
Garda, all the way up-to the massive Amarone-
invented ice cream and pasta. However, when it
Water’s influences on climate are essen-
made Appassimento (grapes dried on racks in
comes to the vine, legend says: “Dionysus [aka
tial for wine-growing, creating micro-climates,
the sun or upper levels of a barn to concentrate
Bacchus] was the god who brought pleasure to
counter-acting threats of frosts and chilling
the fruit and sugars,) which, when pressed
mankind and wine to Italy”... and who’s to argue
winds and, particularly in the case of lakes
make the wonderful, rich wine to accompany
with a god?
and rivers, providing both cooling mists and a
rich game/meat dishes.
source of reflection of the sun’s heat.
And with Prosecco – Italy’s current must-
David Hughes welcomes any wine enquiries
Italy is surrounded by water, only five of its
have sparkler, which also comes from the north
readers may have. He also conducts company
20 authorised wine regions do not border on
– one might think that’s the country’s produc-
and private wine tastings. Contact: david@
the four local seas and those five that are land-
tion tied up. But no, Italy’s march back on to
thewine-enthusiast.co.uk or visit:
locked have the benefits of lakes and rivers
the world’s stage is very much driven by the
www.thewine-enthusiast.co.uk
12
theBaltic Summer 2012 www.thebaltic.com
Baltic briefing
Sporting contacts There are many sports clubs associated with the Exchange. In most cases, they are open to both members and staff of member companies Baltic Association Football Club
Golfing Society
Sub-Aqua Club
Stephen Calafti
Chris Cox, c/o Frank Symons Ltd
Lorraine Burns
Anglo Greek Chartering
Devonshire House
The Baltic Exchange
The Baltic Exchange
146 Bishopsgate, London EC2 M4J
38 St Mary Axe, London EC3A 8BH
38 St Mary Axe, London EC3A 8BH
Tel: +44 (0)20 7377 5423
Tel: +44 (0)20 7369 1638
Tel: +44 (0)20 7283 9621
E-mail: info@balticgolf.co.uk
E-mail: lburns@balticexchange.com
Cricket Club
Lawn Tennis Club
Young Baltic Association
Jamie Freeland
Crispin Eccleston
Crispin Eccleston
AM Nomikos
Tel: +44 (0)20 7369 1654
The Baltic Exchange
4th Floor
E-mail: ceccleston@balticexchange.com
38 St Mary Axe, London EC3A 8BH
40 Grosvenor Gardens, London SW1 0EB
Tel: +44 (0)20 7369 1654
Tel: +44 (0)20 7591 1800
Sailing Association
E-mail: jf@amnomikos.com
Simon Cox
E-mail: ceccleston@balticexchange.com
Howe Robinson Shipbrokers 77 Mansell Street, London E1 8AF Tel: +44 (0)20 7457 8421
Key Baltic Exchange contacts Management
Government Broker
Baltex
Tel: +44 (0)20 7283 9300
Pat Swayne
Paul Stuart-Smith
Fax: +44 (0)20 7369 1622/1623
Tel: +44 (0)20 7369 1668
Tel: +44 (0)20 7369 1670
VPN 171 2000
Fax: +44 (0)20 7623 6644
pstuartsmith@balticexchange.com
E-mail: enquiries@balticexchange.com
E-mail: pswayne@balticexchange.com
Chief Executive
Dispute Resolution
Robin King
Jeremy Penn
Barrie Wooderson
Tel: +44 (0)20 7369 1637
Tel: +44 (0)20 7369 1624
Tel: +44 (0)20 7369 1674
E-mail: rking@balticexchange.com
E-mail: jpenn@balticexchange.com
Fax: +44 (0)20 7623 6644
Marketing
E-mail: bwooderson@balticexchange.com
Freight Market Department
PA to Chairman and Chief Executive
Communications
Tel: +44 (0)20 7369 1625
Jill Bradford
Bill Lines
E-mail: wlyth@balticexchange.com
Tel: +44 (0)20 7369 1621
Tel: +44 (0)20 7369 1653
E-mail: jbradford@balticexchange.com
E-mail: blines@navigatepr.com
Baltic Exchange Charitable Society
Membership Manager
8 Eu Tong Sen Street
Jackie Harrison
#17-87 The Central
Richard Butler
Tel: +44 (0)20 7369 1633
Singapore 059818
Tel: +44 (0)20 7283 6090
E-mail: jharrison@balticexchange.com
Tel: +65 6377 0654
Willy Lyth
The Baltic Exchange (Singapore) Philip Williams
E-mail: pwilliams@balticexchange.com
E-mail: richard.butler@baltic-charities.co.uk
Events Room Hire Head of Finance
Jill Bradford
The Baltic website
Duncan Bain
Tel: +44 (0)20 7369 1621
www.balticexchange.com
Tel: +44 (0)20 7369 1627
E-mail: jbradford@balticexchange.com
E-mail: dbain@balticexchange.com
theBaltic Summer 2012 www.thebaltic.com
13
65, Gagarina str., Svetliy, Kaliningrad Region, 238340, Russia www.sodrugestvo.com Tel: +7 (4012) 305-544; +7 (4012) 305-500
Chartering Department chart@sodru.com Agency Department agency@sodru.com Transhipment Service Department tranship@sodru.com
@ For more information on these companies and to view this publication online using the latest Page-Turning technology, visit:
www.thebaltic.com
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Logbook
Hellenic arteries Ambrose Greenway chooses a selection of some of the older ferries he captured on camera over the past 35 years, sailing everywhere from Crete to the Ionian Islands
I
n 1952, Greece received four small passenger
Luanda, Somalia and Haiti. Mediterranean Sea
1975 and broken up in 1982. However, in June
ferries as war reparations from Italian yards,
was eventually demolished at Aliaga in 1998
1980 Constantine Ventouris had bought Zeeland
referred to by a good friend somewhat dis-
after briefly being renamed Tutku and then
Line’s 20 year-old Harwich-Hook ferry Koningin
paragingly as the ‘tin taxis’. Kanaris, Miaoulis
Alice. However her sister had been arrested in
Wilhelmina for the route. Briefly named Captain
and Karaiskakis were quickly snapped up at
Patras in 1996, by then sporting a white hull,
Constantinos and then Panagia Tinou, she car-
auction by Petros Nomikos, while Kolokotronis,
and later towed to Elefsis Bay. In November
ried a few cars loaded through a side door and
which also carried the unofficial name George
2002 she was beached in a leaking condition,
for the next 16 years cut an elegant swathe
Potamianos, went to Epirotiki Steamship Co.
but capsized two months later, becoming a
through the increasing numbers of box-like car
Renamed Achilles by George Kousouniadis in
Constructive Total Loss.
ferries. Sold to Minoan Cruises and employed
Tor Lines’ distinctive 24-knot Tor Anglia and
as the day cruiser Artemis between Crete and
Tor Hollandia brought new standards to the
Santorini, she was finally scrapped in India as
In 1961, Hellenic Mediterranean Lines together
North Sea when delivered by Lübecker Flender-
Themis in 2001.
with Italy’s Adriatica inaugurated a ground-
Werke in 1966/67. The latter was acquired by
breaking car ferry service between Patras and
Minoan Lines in 1975 for the Piraeus-Crete
Brindisi via Igoumenitsa and Corfu with the pur-
run before being transferred to the Adriatic in
Voluptuous looks
pose-built Egnatia and Appia, named after old
1986. She later ran between Italy and Turkey,
The unmistakably voluptuous looks of Sealink’s
Roman roads. The former was built on the Seine
but switched back to the Aegean in 1996 on
three class ferries, built at Brest’s Naval Arsenal
in 1960 and the unmatched pair ran with remark-
a Piraeus-Santorini-Heraklion schedule, briefly
in 1972-3, remained little changed following their
able consistency for many years until Appia was
interrupted by a Libyan charter the following
transfer to Greek waters save for minor deck
sold in 1992, renamed Fibi and scrapped in
year. In 1999, she became Fraglines’ Ouranos
extensions aft. The Newhaven-Dieppe service
1995, a year that heralded great change with the
for Adriatic service and in 2007 F Lines’ Maltese
Senlac went to Constantine Ventouris as Apollo
arrival of Pericles Panagopoulos’ sophisticated
flag F Diamond. Arrested in Genoa in 2009, she
Express in December 1987, sisters Hengist
Superfast I. Egnatia was finally broken up as
was sold to Turkey as an accommodation ship
and Horsa following in 1992 as Gerasimos
Natia at Alang in 2001 after a remarkable career
and was scrapped at Aliaga in 2010.
Agoudimos’ Penelope A and Romilda, the latter
1971 (as illustrated), she was broken up at Perama in 1984.
of over 40 years.
In 1976, Loucas Nomikos took delivery of the smart homebuilt car ferry Lemnos from Hellenic
quickly joining the former Senlac in the Ventouris fleet as Apollo Express 2.
General Enterprises at Perama. She became a
After several changes of name and ownership,
Startling appearance
familiar feature in the Aegean and from 1999 to
the former Senlac was broken up in 2010 but
Attracted by the success of the above, Michael
2002 sailed under the Sporades Lines banner
Penelope A still sails as such for Agoudimos,
Karageorgis bought Ellerman Lines’ City of
as Panagia Tinou, but was burnt out at Lavrion
having been Minoan Flying Dolphins Express
Port Elizabeth cargo/passenger quartet in 1971,
in 2003. Rebuilt by A K Ventouris, she sailed
Penelope from 1999 to 2004, and third sister
planning to rebuild them as side-loading car
around the Cyclades for the next four years
Agios Giorgios was still running last summer on
ferries. In the end, only two were converted
first with a white, then a red hull, but then
the Milos run for Ventouris Sea Lines.
at Perama, City of Exeter and City of York
changed to NEL Lines’ blue livery. In 2009, she
Greece’s first Japanese-built ferry was bought
emerging in 1972 as Mediterranean Sea and
was bought by Moldovan owners and still trades
secondhand by Constantine Efthymiades in
Mediterranean Sky for a new Patras-Ancona
as Trabzon.
1966 but later the Cretan company ANEK
service. Their startling appearance, courtesy
The daily ‘Cyclades Express’ run from
came to rely heavily on such vessels, starting
of renowned yacht designer Jon Bannenberg,
Piraeus to Tenos and Mykonos required fast
with Candia and Rethymnon in 1970. Lissos,
together with a bold colour scheme suited the
ships and was inaugurated in 1965 by Petros
acquired in 1987, was a typical ‘long-bodied’
local waters very well, but enraged a few UK
Nomikos’ Leto, the former Newhaven-Dieppe
Japanese long distance car ferry, having been
traditionalists. Plans to convert the other two
channel steamer Arromanches. A year later
built for Shin Nipponkai as Ferry Hamanasu
to luxury cruise ships came to nothing but
she was joined by former running-mate Lisieux,
in 1972. She mainly sailed to Crete but also
the two ferries soldiered on with occasional
renamed Apollon, both being capable of 24
between Patras and Ancona and was finally
charters taking them elsewhere, notably to
knots. The latter was sold to Agapitos Bros in
scrapped at Alang last summer.
16
theBaltic Summer 2012 www.thebaltic.com
Logbook
War reparation Achilles at Piraeus in 1977
HML’s long-serving and successful car ferry Egnatia
Karageorgis’ brightly painted Mediterranean Sea at Corfu in 1975
Minoan Lines’ Ariadne at Piraeus in April 1977
Nomikos’ smart little Lemnos off Vouliagmeni
Ventouris’ elegant and popular Panagia Tinou
Agoudimos’ Penelope A still sails on the Rafina-Mykonos route
ANEK’s Lissos made short cruises to Syros in her later years
theBaltic Summer 2012 www.thebaltic.com
17
People, places, plcs
Word games London needs to take action on marine wordings says the Association of Average Adjusters chairman, Paul Silver. Plus: adjuster demand, rising claims, safety risks and piracy
T
he London insurance market needs to
for Loss of Hire “do not constitute a modern fully
documentation fills in the obvious cracks and
address shortcomings in standard Loss
thought through set of policy conditions that the
stops up the holes,” he told members.
of Hire wordings if it is to be a “go-to”
more adventurous London insurers might use to
“If London wishes to remain the pre-eminent
market for this important type of marine
build up the current level of activity for the Loss
market, then it needs to be at the forefront in all
of Hire market to a more vigorous level.
aspects of marine insurance.”
business, the Chairman of the Association of Average Adjusters (AAA) has warned.
“If the London market is to think of increas-
Addressing the AAA’s annual general meet-
ing its share of this class of business or even
ing, Paul Silver said the so-called ABS conditions
expanding the market, it may need a sounder
Demand for the services of average adjusters
of some modern, well-
remains at high levels despite increased com-
drafted market conditions.”
petition and changes in the marine industry,
ABS wordings emerged
according to Silver.
in the Lloyd’s market and
“It is clear from talking to colleagues that
have become a London
there is no shortage of work out there. The insur-
standard wording despite
ance industry continues to value the set of skills
a number of efforts to
that average adjusters offer, which you simply
develop alternatives. As
cannot obtain elsewhere,” he said.
well as being an important
“However, I am concerned as to what will
strand of insurance in its
happen when people like me call it a day – will
own right, Loss of Hire is
there be enough qualified practitioners to take
often seen as an essential
over? There are exciting career prospects for a
part of a wider package
young average adjuster, and we urgently need
required by ship owners.
more of them.”
The Norwegian market,
It can take about four to five years of part-
which has specialist Loss
time study with some claims experience to
of Hire insurers, is a leader
pass the necessary exams and achieve the
in this area.
gold standard of Fellowship of the AAA. Silver
While
AAA Chairman Paul Silver
Industry shortage
long-term base in the form
acknowledging
estimates that the market will require around
that the ABS wordings
two new Fellows a year for the next decade to
were fit for purpose, Silver
meet demand and replace those who are likely
said they were lacking in
to cease practising.
clarity and comprehensive-
According to Silver, as an average adjuster it
ness and created unneces-
helps to start young, but it offers a career that is
sary work. “ABS conditions
intellectually challenging. It also offers the oppor-
are still workable, but it
tunity for overseas travel to younger people he
requires assureds, brokers
says and because they are studying for a profes-
and insurers to ensure
sion and becoming highly skilled “we hope there
that the covering policy
is reasonable financial reward at the end of it”.
theBaltic Summer 2012 www.thebaltic.com
19
People, places, plcs He acknowledged there is a “bit of a generation
office or somewhere where you have experience
agers not only for their own fees, but also for
gap” with the older fellows of the association but
of claims in real life.”
disbursements paid on owners’ behalf. When
this presents a great opportunity. Even if newcomers don’t wish to spend their whole career
One of the attractions, he says, of the career is you can work and study at the same time.
ship managers try to collect the funds due, they are faced with a claim for negligence in the
in the industry, it still represents a “wonderful
But there are no signs of average adjust-
management of the ship. In ITIC’s experience,
training for careers in the marine insurance and
ing dying out, said Silver. “The profession has
once shipowners fail to put managers in funds,
shipping environment”.
changed and there are rather fewer. However, in
the situation rarely improves and usually deterio-
Possibilities to move on to working with
the past eight or nine years, the demand for our
rates. The resulting claims are time-consuming
owners, charterers and the like obviously exist.
services has been pretty steady, if not growing.
and costly to defend.
However, Silver says that if starting off training
We don’t see much change in demand despite
ITIC says that it is of the utmost impor-
as an average adjuster, the individual has to
the ups and downs of the shipping economy in
tance that ship managers’ records and cor-
consider it as a long term opportunity.
years since 2008.”
respondence with shipowners are clear and
The natural inclination is to look for university
New entrants have to understand they are
in good order. By way of illustration it cites a
graduates, he says. For people coming ashore
not in a huge industry, he said, but they can
dispute between the manager and owner of a
it is a suitable career provided you can cope
become experts in the area which they are work-
ship involving a balance of funds owed to the
with starting again at the bottom. The insurance
ing in, and that is quite an attractive proposition.
manager. It was agreed that those funds would
market as a whole may also present prospective
be put into an escrow account. The matter
candidates, he adds and people who are drawn
remained idle for five months, until the owner
to this kind of claims work from the general
Claims on the rise
raised a claim against the ship manager, through
insurance market.
International Transport Intermediaries Club (ITIC)
its lawyers, for alleged negligence. The owner
“Theoretically you could study for the asso-
says it has seen a noticeable increase in claims
claimed that the ship manager was in breach
ciation exams in complete isolation, but I think
against ship managers by shipowners who are
of its duty to maintain the ship in an efficient,
you would have difficulty passing the fellowship
going through difficult financial times.
employable state and that, as a result, it had suffered significant losses.
exams, particularly when you have a practical
In the latest issue of its Claims Review, ITIC
paper at the end of it,” said Silver. “You do need
notes that, as result of their financial difficulties,
The claim put forward by the ship owner was
claims experience, ideally
within an average
owners resist paying for the full maintenance of
in excess of $17m and included alleged losses
adjusters office, or within a broker or insurers
their ships and also end up owing ship man-
in respect of the vessel’s future employment,
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20
theBaltic Summer 2012 www.thebaltic.com
People, places, plcs expenses paid by the shipowner for repairs/
and elsewhere; and the emer-
spares/drydockings, reduction in the vessel’s
gence of ice shipping and its associ-
market value, and other additional damages.
ated navigational and environmental
The ship manager rejected these allegations
complications.
in full and lawyers were appointed by ITIC to
Commenting on the findings
defend its position. The manager maintained
of the report, Dr Sven Gerhard,
that the vessel’s condition had deteriorated due
AGCS’s Global Product Leader Hull
to age, constraints of trade, and expenditure and
& Marine Liabilities, says: “While the
maintenance restrictions imposed by the owner.
seas are safer than ever today, the
The manager further stated that the owner was
industry needs to address these
fully aware of the deficiencies and the condition
new risks proactively. For example,
of the ship when it was taken under manage-
ultra-large ships pose challenges for
ment. Despite this, the owner had not taken the
insurers due to their sheer size and
necessary steps to facilitate remedial action.
value, while others raise concerns on
Lawyers for the owner aggressively pursued
structural integrity and failure. While
the claim against the manager. However, the
scale alone does not make these
manager’s files and correspondence on the ship
ships riskier, the increased sizes
were in good condition and a thorough audit
introduce specific risks that need to
trail existed for every decision regarding the run-
be addressed, such as salvage and
ning and maintenance of the ship. The ship was
recovery considerations and emer-
eventually scrapped, but the owner continued to
gency handling.”
maintain that it had a claim against the manager,
The largest modern contain-
even though it was unable to provide any proof
er ships under construction are
or to document its losses.
so big that there is space below
Eventually, after two years, the claim was
deck for a basketball court, a full
finalised on a drop-hands basis. The total cost
sized American football stadium,
of the legal fees to defend the innocent ship
and a spectator-filled ice hockey
manager was $250,000.
arena. Ships of this size raise questions of
Safety risks
Senior partner IRI Clay Maitland
adequate loss coverage in the event of an
convention, what are we going to do when other
incident and potential structural limitations,
issues come to the fore?”
says AGCS.
There should be an international convention
Despite greatly improved safety records in the
The report also highlights the continued chal-
century since the Titanic, the maritime industry
lenge of human error in maritime operations – a
faces new challenges driven by the continued
factor which remains critical despite 100 years
The fear of giving offence and trying to do
growth of worldwide shipping, according to
of technological and regulatory improvements in
things by committee is “absolutely disastrous,”
specialist marine insurer Allianz Global Corporate
safety. Over 75% of marine losses can be attrib-
he continued. It is possible for the industry to act
& Specialty (AGCS).
uted to a wide range of human error factors,
fast, he said, citing the example of the US follow-
In the 100 years since the sinking of the
including fatigue, inadequate risk management
ing 9/11 when a new convention was pushed
Titanic, the world commercial shipping fleet has
and competitive pressures, as well as potential
through in four months. However, “not one effort
trebled to over 100,000 vessels, yet overall ship-
deficiencies in training and crewing levels.
has been made by any government at the IMO
that provides for a place where pirates can be tried, he said.
ping loss rates have declined from one ship per
Dr Gerhard explains: “As technological
to secure an international convention that will
100 per year in 1912 to one ship per 670 per
improvements reduce risk, so does the weak-
give us a legal framework to deal with the crime
year in 2009.
est link in the system – the human factor
of piracy,” Maitland said. He agreed with the
While factors such as new technology and
– become more important. This is where the
union position that seafarers, particularly foreign
regulation have tremendously improved marine
industry should focus most closely, so that best
seafarers, are not a matter of concern.
safety, new risks have emerged. AGCS’s report,
practice risk management and a culture of
Maitland renewed his call for a spokesperson
Safety and Shipping 1912-2012: From Titanic
safety becomes second nature across the
for the shipping industry who could get these
to Costa Concordia, based on research from
world fleet.”
issues across. “This piracy issue is an issue
Cardiff University’s Seafarers’ International
where the unions, flag states and many others
Research Centre (SIRC), highlights several key
in the industry are in agreement. But instead of
challenges for the industry including the growing
Piracy convention call
saying let’s do something about piracy, we are
trend to “super size” ships and cost pressures
Clay Maitland, senior partner of Marshall Islands
not doing it. Let’s talk about what can be done.”
pushing ship-owners to source crews from
manager IRI, has renewed his calls for a conven-
Statements are being made at IMO about
emerging economies where standards of train-
tion of piracy, saying that not enough is being
defensive measures, but, he said “we need to
ing and assessment can be inconsistent.
done and priracy is spreading.
get beyond that and say what we are going to
Other significant safety risks include reduced
The piracy issue, he believes, has revealed
do to suppress piracy. Simply saying we are
crewing numbers, which may compromise
“how ineffectual our own institutions are.
eventually going to put forces on land is not
margins of safety and encourage human error
This does not bode well for the future. If we
going to solve the problem. I think we should
risks; increasing bureaucracy on board ships;
can’t all get together on the suppression of
ransom the crews, but I think we should go after
the continued threat of piracy off Somalia
piracy including agreeing on an international
the pirates”.
theBaltic Summer 2012 www.thebaltic.com
21
Comment – Michael Grey
Pass the port W
hat do we understand by “infra-
who may have nothing to do with the port, but all
structure”? It’s a curiously mod-
ears will be closed to these arguments. Ports are
ern word, that certainly wasn’t
not alone in this. In the small town where I live, we
around when my faithful Imperial
have been waiting nearly 20 years for a bypass,
Reference Dictionary (complete with thumb-
which the government has persuaded a developer
holes) was published. It is also one of those
to build, when he can raise the substantial
words that can probably mean pretty well what
sums from selling sufficient numbers of houses –
you want it to mean, which makes it notably
difficult in current economic circumstances. But
attractive to politicians.
governments are adamant. Having managed to offload their perceived responsibility for roads,
Utilities, like waterworks and pipelines,
they are not willingly going to take this back.
motorway networks and canal systems are understood to be part of the national infrastructure,
British ports point out, quite reasonably, that
with “infrastructure funds” happy to take them off
on the Continent, it is the governments that
the hands of governments when they are put up
provide the infrastructure for port improvement,
for sale. Thus, infrastructure has acquired a sort
with the ports (or usually their customers in the
of subsidiary meaning in that these elements are
case of “landlord” ports) building the terminals
part of the system required for civilised life and,
on the nice new quays and dredged accesses.
because we cannot do without them, they take
They also point out that they have to compete
on an attraction of their own in investment terms.
for business with the ports of the near continent,
Is a port infrastructure? In that ports are
which are not paying for miles of motorways and
essential to a nation’s well-being, undeniably
railways, out of the sums they can prise out of
necessary to facilitate the flow of trade, ports
Michael Grey
the hands of shipowners. It always seems to me that British ports do astonishingly well, when you
surely could be so defined. Can a fleet of ships be collectively defined in such a fashion? Shipping is
the extortionate sums raised from that paid
consider these handicaps, but it must be like
of course derived demand in that their just being
in the various taxes imposed on road users.
batting with one hand behind your back.
around cannot necessarily persuade a shipbroker,
That system, which has probably served us
Doesn’t the European Union, which is
or anyone else, to use them. They have to
reasonably well since the Roman legions laid
supposed to have some sort of regulatory role
compete for business in a way that motorways or
down the first national road network, we are
in the management of ports and their subsidies,
water distribution companies clearly do not.
given to understand by recent transport ministers
have a responsibility for more of a level playing
Ports raise virtually all their revenues from
of various political persuasions, is very much old
field in this matter? There must be more to
ships coming and going, so one might suggest
hat. Thus, if an expanding port discovers that its
Brussels life than the Habitats Directive? Hasn’t it
that their operation is even more a derived
expansion plans are handicapped by a grossly
any policy about infrastructure that can make port
demand activity than shipping itself and thus
inadequate road system, it can offer every kind of
life throughout Europe more equal. There is a bit
could not be termed “infrastructure”. So one
supplication to government, but all will be deaf to
of a deafening silence here too.
of the great mysteries of the universe is why
its entreaties. The port must build it itself.
There is a sort of confused logic in government
ports are apparently so attractive to infrastructure
This can be very big money, which is
circles which suggests that the UK policies (if they
funds, when their revenue stream is so uncertain.
why it was deemed once part of the national
can be deemed such) are more “fair” in that they
You could argue about these matters for ever.
government’s responsibility and it has really
are unhelpful to everyone. If, for instance, the
But ports, at least in the UK, find that, whether
grown exponentially. We are not talking about a
government could be persuaded to build a third
they are part of the national infrastructure or
short access improvement to the main road from
lane on a trunk road to Port A, then it would be
not, the government of the day is increasingly
a new dock gate, but miles of dual carriageway,
grossly unfair to Ports B and C. If all are equally
interested in having them paying for chunks of
cloverleaf accesses or roundabouts and the
disadvantaged in terms of infrastructure, then the
that aforesaid national infrastructure, in the shape
government makes it clear that port expansion
policy is clearly working admirably. Some may
of access to and from those ports.
plans will be conditional upon such investments.
say it is no way to approach our national port
Once the national road system was thought
The port managers can argue until they are blue
infrastructure.
to be part of the government’s responsibility,
in the face that such road improvements will be
with its repair and improvement paid for by
used by all the delighted inhabitants of the region,
22
theBaltic Summer 2012 www.thebaltic.com
As the PPS to the Minister would say: “I couldn’t possibly comment.”
Tankers
Challenging times Confidence is building in a tanker rate increase, according to accountants Moore Stephens but the next 12 months will be very challenging for owners
T
he latest Moore Stephens confidence
slowing Chinese economy, where authorities have
ticated tonnage in the short sea Far Eastern
survey asked respondents about likely
instituted austerity measures to curb rising inflation.
markets and, to a lesser extent, South East Asia.
movements in freight rates over the
Chinese economic growth is slowing. Having
Taking a broader view, demand for chemi-
next 12 months. The survey revealed
peaked at 11.9% in Q1 2010, according to ana-
cal tankers is expected to exceed supply over
that respondents are now more confident of rate
lysts GDP, it is expected to fall below 9% in 2012,
the next three years, with demand increasing
increases than they were three months previously.
dampening demand for chemical tankers in Asia,
by more than double the fleet’s growth in the
In the tanker sector, the number of respondents
Stalmans said.
median scenario.
expecting rates to increase was up from 30% to
Regional volume flows saw only modest
Demand will grow 5% and 5.7% in 2012 and
35%. Charterers were alone in recording a fall
growth in 2010, due largely to a downturn in
2013 respectively, compared to a fleet expansion
(from 40% to 35%) in expectation of higher rates,
Chinese imports. In 2011, regional volume flows
of 2.3% and 2% in the equivalent period.
against an 8% increase to 15% in their numbers
saw a moderate increase of 2.23% with Chinese
who thought that tanker rates would fall.
imports improving 6.05%.
“In the high fleet supply and demand scenario, 2013 is expected to see the increase in demand
One respondent emphasised: “Oil company
According to Stalmans, Saudi exports grew
outstrip supply by an extra 3.7%, while in the low
charterers are very strong and can push rate lev-
almost 28.71% in 2011 and “this upturn has
fleet supply and demand scenario, fleet supply is
els down. For more than three years, most tanker
underpinned demand for chemical tankers over
expected to decrease,” Stalmans said.
owners have not made a profit.”
the past year”. Demand for tonnage has spurred
Demand for petrochemicals continues to
Naturally enough, concerns have centred not
a steady improvement on most Inter Asia trade-
grow, he said, especially in emerging markets.
just on the effect of sanctions against oil produc-
lanes, which have seen freight levels rise over the
Demand is expected to increase by 5% in 2012
ing nations like Iran, but also on the strength of
past 12 months, despite modest volume growth
and 5.7% in 2013, compared to a fleet growth of
national economies. In a recent presentation to
in 2010 and 2011, he said.
2.3% and 2% in these two years.
the Chemical and Parcel Tankers Conference,
“During the last peak cycle, cheap debt, plen-
organised by Navigate Events in March, Rudy
tiful bank liquidity and eagerness of some ship
Stalmans of SPI Marine (Asia) outlined issues from
Improvements in Asia
finance players to buy market share, led to an
the Asian perspective.
Taking average freight developments on various
order-book for chemical tankers stretching into
With geopolitical tensions between the West
routes throughout the region, overall freight
2012. Despite an uncertain demand outlook, we
and Iran resulting in higher crude prices and with
levels in Asia have improved by over 12% from
expect freight rates will continue to recover into
the prospect of further sanctions on the horizon
Q1 2010 to Q4 2011.
2012, as the number of newbuilding deliveries dwindle, while scrapping picks up.”
– not to mention a potential lack of international
Some 56% of Saudi volumes moved east-
group cover going forward on carriage of Iranian
bound to Asia (plus another 11% to India), while
petroleum products – tanker owners have plenty
47% of Iranian chemical volumes ship eastbound.
to think about.
Volumes eastbound from Iran are expected to
Challenging year ahead
grow further due to upcoming EU sanctions.
The coming 12 months will remain very
Demand for tonnage in the Inter Asia routes
challenging for owners, who will have to rely on the
Higher volumes expected
has spurred a steady improvement in the SE
support of banks to survive and it is reasonable
According to Stalmans, the volume of bulk chemicals
Asia Northbound and NE Asia southbound freight
to assume that some may not, given that
carried on tankers is forecast to rise 4.4% on the
rates, with figures increasing 5.88% and 8.06%
operational and bunker costs remain high.
year to 189.6m, tonnes in 2012, then a further
respectively over the past 12 months.
Given high operating costs as well as finance
5% to 199.1m tonnes in 2013 according to DVB
Historically, many Asian owners have pre-
costs to lenders, as the supply/balance for
statistics. Expected higher volumes on long-haul
ferred to operate their vessel for easy chemicals
chemical tankers tips. It is likely that owners
routes, specifically Middle East to Asia, will boost
where possible, avoiding the high intensity multi-
will aggressively seek to improve freight levels,
tonne mile demand, he told conference delegates.
parcel trades, Stalmans said.
Stalmans said.
Global economic conditions are weak, with
The current trend towards better economies
Threats of a double dip recession, war and
Europe facing a sovereign debt crisis, while
of scale has resulted in a lack of renewal in the
unrest in the Middle East and natural disasters, as
political polarisation in the US is impeding imple-
smaller vessel sector which, Stalmans suggested
well as slow growth in the Chinese market remain
mentation of reforms. This is coupled with a
will lead to a shortage of quality modern sophis-
the “swing factors”.
theBaltic Summer 2012 www.thebaltic.com
23
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S&P
Vessel value Basil M Karatzas looks at the valuation of vessels – and the value of reporting
A
few years ago, in the booming days of
overnight in the middle of the financial typhoon,
overhaul of the price reporting has been trig-
the super-cycle, the London interbank
in order to conceal their cost of funds and alter
gered by signs that certain numbers may have
Offered Rate (LiBOR) was primarily
the perception, provided to the market, their
been ‘manipulated’.
mentioned in shipping circles as a pre-
counter-parties implicitly placed on their credit risk.
Our daily lives are strongly interweaved with
fix to a number, preferably a two-digit number,
However, in a more recent full blown investi-
the worlds of finance and energy, and price
or the “spread”, at which rate a borrower/ship
gation in the matter, it seems that certain finan-
reporting in these two industries affects our lives
owner was able to borrow funds.
cial institutions (or at least their agents) were pur-
whether we are aware of it or not. As with any
For example, “LIBOR + 75 basis points” was
posefully mis-reporting market data, given that
reporting, it is expected that there is always a
indicating a rate of 0.75% above LIBOR, the rate
even a small aberration on the LIBOR rate could
certain degree of bias involved, certain judg-
that banks can borrow funds from each other for
translate into serious money for the settlement
ment, certain inaccuracy. After all, there are
a very short period of time; the borrower, ship
of contracts, especially when the reporting party
more colours than just black-and-white in our
owner in this case, had to pay a rate related to
has an open position in the market. Again, for
lives, and there is sometimes a very fine line that
LIBOR plus the spread as total (floating) cost for
every change of LIBOR by just 1 bp, the nominal
separates facts.
their debt financing. LIBOR has been produced
translation on settlements could be $35bn;
And, of course, facts do not always happen
under the auspices of the British Bankers’
in a timely, predictable fashion or in a conspicu-
Association (BBA) by polling daily market bank-
ously observable manner and transactions in
ing participants, computing an average rate
Overhauling the process
certain markets can be very, very infrequent.
(based on a standard formula and calculation)
Recently, the International Organization of
Sometimes, a “judgment call” or a “guestimate”
and reporting the average rate.
Securities Commissions (IOSCO) produced a
or a “professional opinion” has to substitute for
The necessity of a LIBOR number is, of
circular aimed at overhauling the process of
the lack of data points in order to produce a time
course, of paramount importance since numer-
reporting energy prices. Similar to reporting on
series. Therefore, it is to be expected that there
ous aspects of daily life are settled based on
interest rates in the form of LIBOR, daily data in
is always a certain imperfection in reporting. It’s
such rates (from car loans to house mortgages
the energy markets are produced, published and
just human nature. And, when the stakes are
to credit card rates to commercial loans). It is
used for settlement in the energy markets. Of
so high and the value of the contracts are so
estimated that $350tn of financial contracts are
course, there are clearing houses and exchanges
monumental, besides the “honest” error and
benchmarked or settled against the LIBOR rate,
in the energy markets and their closing prices
expected “inaccuracy”, one may also expect
that is, for each basis point (bp) or 0.01% change
are fairly well accessible.
that there might be a motivation for a deviation in the price reporting to reflect a bit more than
in LIBOR rates, the nominal impact from the
However, there are several more energy
settlement of financial contracts is worth $35 bn.
numbers on less liquid contracts that are col-
Since the early post-Lehman days, it has
lected, tabulated and reported by the Price
The shipping industry, at the whirlpool of
been reported in the business press that the
Reporting Agencies (PRAs), primarily Platts,
the financial and the energy markets, in a
LIBOR reporting and calculation has not been
Argus Media and ICIS; for instance, Platts oil
post-Lehman world of constrained liquidity, and
as straightforward as it seemed and that there
prices are typically utilised for bunker pricing
anaemic economic growth compounded by
were observed unexplained discrepancies in
in the shipping industry. It is estimated that
the Damoclean sword of a series of sovereign
the marketplace.
60-70% of the over-the-counter (OTC) swaps
crises in Europe and possibly an insipient political
Most obviously, weak banks were under-
and options in the energy markets are settled
crisis in China and ensuing economic and
reporting the rate at which they could borrow
against the prices of these three PRAs. IOSCO’s
banking deterioration, has been facing several
theBaltic Summer 2012 www.thebaltic.com
just “human error”.
25
S&P challenges, not least of them, a very illiquid mar-
in the present illiquid market, often the tables
and PRA numbers, with which we have to live,
ket for the sale and purchase of vessels, and
produced from different sources show strong
standardised vessel asset prices are quite often
a yawning gap in “bid” and “ask” for shipping
aberrations, and sometimes transactions take
irrelevant even to shipping market participants; it
assets. In general, the second-hand market for
place well beyond any level of normalcy that
only takes one buyer and only takes one seller
shipping assets has been fairly subdued in the
such reports would predict.
at one point of time to agree on the price for
last year, reflecting weak freight rates, a substan-
Given that the shipping industry consists of
the physical exchange of the shipping asset.
tial overhang of newbuilding deliveries, lack of
a small atoll in the ocean of the industries of
At times when buyers can exert most pres-
debt financing, and an overall lack of conviction
finance and energy, any inaccuracies in report-
sure during a transaction, whether in a weak or
(“buyers’ strike” may be called) from the part of
ing vessel asset prices are of little importance
strong market, they end up with a better value
the buyers; from the part of the sellers, any sale
to the broader markets. Despite BSPA’s popu-
proposition. At times when the seller can resist
at today’s “perceived” market levels will entail
larity, there are no standardised contracts (that
the buyer’s pressure, or, even better, incite a bid-
loss of some or all equity investment, a short sale
is residual value guarantees, and so on) set-
ding war, whether in a weak or strong market, a
and, quite possibly, a loss for the lenders.
tled against any vessel price indices or broker
strong asset price can be achieved.
The lack of market activity in the sale and
reports. Whether we like it or not, as consumers
Although a price reporting mechanism in
purchase market is even more accentuated for
we have to live with LIBOR (that is check your
shipping, similar to LIBOR and the PRAs,may be
modern tonnage younger than five years reflect-
credit card statement, your mortgage note, and
a good thing to have, we doubt that such a sys-
ing the high cost basis of the assets. It does not
so on) and energy prices as reported by the
tem will ever be widely recognised or followed,
come as a surprise then that there are few data
PRAs (that is, check your heating oil bill, and
or even be considered consistently accurate
points in the sale and purchase market, and
so on). However, in shipping any inaccuracies
and dependable. And, as a reporting asset price
a great deal of the existing data points, espe-
in presenting asset values, whether inadvertent
mechanism in shipping, it will be hard to attract
cially for modern tonnage, are neither “trans-
due to the bias of the reporter or purposefully
the scrutiny of regulators and investigators for its
parent” (mostly bi-lateral, off-market deals) nor
due to cognizant error, are only pertinent for dis-
accuracy or lack thereof.
“clean” (vessel employment or soft financing or
cussion and academic purposes.
“compulsion” to sell may be involved).
First of all, the shipping markets are just too
For instance, where vessel valuations are
small to matter, as compared to the finance
Several investment banks, research and
required,such as by banks for loan documenta-
and energy industries. After all, there are no
advisory firms, ship brokerage houses, and so
tion purposes and loan-to-value clause testing,
standardised underlying assets (all vessels are
on produce regularly asset value tables. In a
rarely is there a reference to a certain index
different, even sistership vessels – just take a
similar manner, the Baltic Exchange produces
(such as the BSPA) or standardised tables, but
look at modern Chinese vessels ordered at the
the weekly Baltic Exchange Sale & Purchase
each time the banks require fresh vessel valua-
top of the market).
Assessment (BSPA) index for five-year old ves-
tions, specific to each vessel, from recognised
Second, the market for shipping asset prices
sels only in certain asset classes. In active and
valuators. And once again, there is a very limited
is too parochial to even attract a derivatives
liquid markets, all these data points more or less
derivatives market in shipping or contractual
market. The derivatives market doesn’t seem
converge to the same numbers and, quite often,
obligations on asset prices that are normally set-
to have worked exceptionally well in the more
accurately reflect the market itself. However,
tled again indexed prices. And unlike the LIBOR
liquid freight market and the Forward Freight Agreements (FFAs). Third, in a very illiquid market such as at present, supplementation of actual data points based on actual sales with “professional estimates” may be an event of little consequence. Finally, no two transactions are identical – the nature of the buyer and the seller and the circumstances of each transaction are very important, or even more important, we may dare say, than the asset per se. As proof, take a look at how fortunes were made (and lost) in shipping in the past decade(s): by taking a position against the indexed, the standardised, the consensus opinion one can find in the papers. After all, indexed prices are good for historical information and contract settlement, but that’s not how money is made. Basil M Karatzas is the CEO of Karatzas Marine Advisors & Co, a shipping finance advisory and vessel brokerage firm based in Manhattan, New York, representing financial institutions and institutional investors, lenders and ship owners worldwide. Contact him email: Info@ BMKaratzas.com; Tel: +1 713 545 5990. Opinion and comments in the article herewith
Any inaccuracies in reporting vessel asset prices is of little importance to the broader markets
26
theBaltic Summer 2012 www.thebaltic.com
are strictly the author’s.
BIMCO
Issues and ideas BIMCO’s Documentary Committee discussed a range of new contracts, clauses and systems at its spring meeting in Singapore
B
Committee,
topical issue of solid bulk cargoes that
list and that the ship is not a blocked vessel.
chaired by Karel Stes, gathered in
liquefy. The “Solid Bulk Cargoes that can
However, the reporting requirements proposed
Singapore for its spring meeting on
Liquefy” clause has been developed together
in the clause were felt by the Committee mem-
23 April. Its contract experts reviewed
with the International Group of P&I Clubs to
bers to go beyond what is normally expected in a
a number of new contracts and clauses deal-
address the very serious concerns about loading
commercial agreement.
ing with a variety of topical subjects, ranging
bulk cargoes that may be subject to liquefaction,
The Committee also reviewed a first draft of
from wind farms to solid bulk cargoes that can
but which are not categorised under the IMSBC
the WINDTIME time charter party being devel-
liquefy. A new standard pooling agreement
Code as such.
oped for the offshore wind farm industry. This
IMCO’s
Documentary
Of particular concern are iron ore fines
new contract is based on SUPPLYTIME 2005,
and nickel ore. In numerous cases shipowners
but with many updated provisions tailored to this
According to BIMCO’s chief officer for
and their representatives have been prevented
sector of the industry. The Committee provided a
legal and contractual affairs, Grant Hunter:
by shippers, sometimes by intimidation, from
lot of useful feedback and suggestions that will
“POOLCON is a voluntary and negotiable stand-
sampling cargoes prior to loading.
be relayed to the drafting team. It is hoped that
was adopted following two and half years of development work.
ard agreement for establishing tramp shipping
In addition to the adoption of a
pools and is based on the pool managers time
new contract and three new claus-
chartering in ships in their own name from the
es, the Committee also discussed
pool participants. We have had a lot of requests
a number of on-going projects, as
to develop a tramp pooling agreement in recent
well as adding several new tasks
years and I am delighted that we can now meet
to its busy work programme. There
that demand with the new POOLCON. We also
were two clauses considered by
plan to develop and publish later this year an
the Committee that were returned
‘agency based’ version of POOLCON, where the
to their respective drafting groups
pool manager manages the pool fleet.”
for further work because consenof
sus could not be reached on their
pooling agreements in relation to EU competi-
adoption. The clauses deal with hull
tion regulations, BIMCO is liaising with the
fouling and compliance with OFAC.
European Community Shipowners Association
As far as hull fouling goes, the
(ECSA) to set up a meeting with the European
Committee members felt that further
Commission’s
DG
consideration needed to be given to
COMP to discuss the key principles of the
the duration of idling as a result of
agreement prior to publication.
charterers’ orders, following which
Given
the
highly
sensitive
competition
nature
directorate
POOLCON will be published along with detailed explanatory notes during the summer.
the owners’ performance warranty would be suspended pending inspec-
Also adopted by the Committee were three
tion and/or cleaning of the hull by
new standard clauses covering EU advanced
the charterers. The proposed OFAC
cargo declaration requirements under voy-
Clause provides a mutual obligation
age charter parties; slow steaming under a
on owners and charterers to warrant
voyage charter; and a clause addressing the very
that they are not on the OFAC SDN
theBaltic Summer 2012 www.thebaltic.com
Grant Hunter
27
Corporate viewpoint Canfornav
Innovative approach Canfornav discovered the ideal system to guide it through the forthcoming ECA zone requirements
I
t is no secret that shipowners are under pres-
could easily disappear if the vessel’s voyage
This was interesting enough for us to look
sure to cope not only with the escalating cost
was extended due to bad weather. Therefore,
into AWT’s innovative, on-board weather
of fuel, but also stringent legislative and environ-
we felt that in addition to a fuel management
routing program, BonVoyage system (BVS),
mental demands, that will require large monetary
plan, we had to implement a proper voyage
which provides high resolution wind, wave and
outlays, in the near future.
management plan.
current forecasts to captains, with forecast
Fuel costs account for 70-75% of the
An article by John Eaton of Applied Weather
data for 10-16 days, updated four times a day.
daily running cost of a ship today and these
Technologies (AWT) caught our eye, in which he
Contained in BVS are tools to optimise voyages
costs will dramatically increase once the North
stated, and we quote in part:
that can save 5-8% of fuel costs on voyages.
American “ECA” zone comes into effect on
“Can a 7% savings from economical steaming
In addition, vessels can send their tracks to
1 August, 2012 where ships will be required to
increase voyage costs by 10%? Economical
AWT’s global view fleet management system,
burn fuels not exceeding 1% of sulphur in a 200
steaming is increasingly used by ships trading
where operators can view positions and overlay
nautical mile “wrap-around” exclusion zone, at
in a high fuel cost/low freight rate shipping
forecast conditions ahead .
a premium of between US$75-100 per metric
market. While there are benefits, operators must
tonne and more.
evaluate potential problems: the ramifications
Hausheer of AWT resulting in a trial period
After
various
discussions
with
Carl
All this is giving shipowners a massive
of speed instruction while considering weather
on board one of our vessels, we are pleased
headache and transportation managers are
conditions en route, and that fact that ships
with the results and our captains, who have
facing numerous challenges to use limited
sailing at slower speeds will spend more
been involved in this pilot project, speak highly
resources, in the most economical way, to
time at sea and are more likely to encounter
of its capability as an additional tool at their
reap the maximum benefits. The impact of
adverse weather.
disposal to plan optimal vessel route safety and fuel conservation.
fuel prices and slow steaming, to reduce
“In some cases, it may be prudent to
consumption, immediately jump to the fore,
consider alternate speed options during portions
Driven by necessity, shipowners are looking
but is this the optimum solution? Canfornav
of a voyage to avoid weather situations that
for ways to reduce costs and future success will
did not think so and felt that whatever gains
can lead to excessive steaming time and extra
depend on embracing innovative technologies to
made in fuel reduction by slow steaming
fuel consumption.”
accomplish this.
Mandarin in the Welland Canal
28
theBaltic Summer 2012 www.thebaltic.com
BIMCO a final draft of this contract will be ready to be
and then uploading that file to idea before being
contract template. Using a “trusted partner”
adopted in November.
able to insert it into a document. With the new
process, users will, in the future, be able to pro-
Virtual arrival was another issue discussed
version of idea, users will at last be able to cut
vide other nominated idea users with permission
at the meeting. It had originally been planned to
and paste text directly from any file on their
to review and amend their contracts. Each user
draft a slow steaming clause for voyage charter
desktop directly into a contract template in idea.
will be allocated a different colour coding when
parties that incorporated a virtual arrival provi-
Chief among the new features of idea 2 is
they make changes to the document so that the
sion. However, the drafting group quickly con-
“smart documents”. These are new versions of
negotiating process can easily be followed by
cluded that this would result in an overly com-
the 115 templates of standard contracts availa-
the parties until a final agreement is reached on
plex clause and that the issue of slow steaming
ble to idea users. The new templates guide users
the wording. This new feature will be released
under a voyage charter and virtual arrival should
through the completion of a contract by prompt-
later this year.
be dealt with in two separate clauses. The
ing the user with recommendations to insert
The new version of idea will be available to
Committee reviewed the draft virtual arrival
the latest versions of standard clauses, such
all users in May. There will be no change in the
clause and provided positive feedback to the
as War Risks, into older contracts; by ensuring
pricing structure for the pay-per-print features of
drafting group to assist it in the completion of
that users fill in certain important boxes, such
idea – it is a free upgrade.
this task by later this year.
as the choice of applicable law and arbitration,
The next meeting of BIMCO’s Documentary
Following the publication of the highly suc-
before they can finalise and print the contract;
Committee will be in November in Copenhagen.
cessful GUARDCON contract and the adoption
and by recalling details of names, addresses and
in Singapore of the standard Pooling Agreement
ship details previously entered by
and three new clauses, the Committee has freed
the user. Further enhancements,
up some resources to enable it to tackle new
such as built-in context sensitive
projects. The new projects will include a revision
explanatory notes for each clause,
of the BIMCO War Risks Clauses; a review of the
are under development.
Piracy Clauses; and the possible development
Another request from many
of some recommended clauses to address con-
users has been to allow the PDF
cerns with possible liability issues related to the
files produced by the system to
maritime Labour Convention 2006, in respect
be combined with other docu-
of crew provided by crew managers on a lump
ments, such as ships’ plans and
sum basis and charterers’ personnel employed
drawings, so that a single PDF file
on offshore vessels.
containing all the material relevant Resolution
to a particular fixture or agreement
Clause is also to be revised to incorporate a
can be produced. idea 2 has this
new Asian arbitration venue – Singapore – as
feature built-in which allows an
a fourth choice of arbitration venue under the
unsecured image file of the con-
clause (the others being New York, London and
tract to be produced that can be
a free choice).
easily added to another PDF using
BIMCO’s
Standard
Dispute
At the meeting in Singapore a new version of
software such as Adobe Acrobat.
its widely used online contract editing system,
Perhaps the most revolution-
idea, which was first launched in Beijing in 2001
ary feature of the new version
and is now regularly used by over 2,500 compa-
is the ability for more than one
nies. Users, on average, conclude around 2,500
subscriber to work on the same
contracts per month on idea.
Idea in action Idea 2 is built around Microsoft’s Word 2010 word processing application, which brings with it not only the power and stability of much more modern software, but also the ability to introduce features to idea that are beyond the capabilities of the current version. Possibly the feature most requested by users has been the ability to cut and paste text from other applications, such as e-mails and word processed documents. The security software used to protect the underlying text of BIMCO contracts in idea has, up until now, prevented the cut and paste function from being enabled – which has meant that users wanting to add text to a document in idea have had to use a rather laborious process of copying the text to a file via the BIMCO website
theBaltic Summer 2012 www.thebaltic.com
29
Dry bulk
Battle of the giants The ongoing battle of iron ore giant Vale to trade its very large ore carriers in the Chinese market has taken another turn, as the Brazilian company retaliated by refusing to use Cosco’s vessels. Plus: first quarter results and Chinese contracts
A
s the dispute between Vale and Cosco
freight rate environment improves. As we remain
been in the past. We remain returns-orientated
continues, Cosco said it expected
focused on preserving the ability to capitalise on
and will not seek growth at unjustified prices by
the impact of Vale’s refusal to use
future rate increases, Genco’s large and modern
assuming excessive market risk.
its vessels to be substantial, and
fleet positions it well to continue to provide mul-
told Bloomberg that it was considering filing a
tinational charterers with high-quality tonnage.”
“Going forward, our contracted cash flow, combined with our conservative capital struc-
complaint with the Chinese Ministry of Commerce.
In further results, Safe Bulkers net revenue
ture, put us in a position to execute quickly,
Cosco president Ma Zehua told the press:
for the first quarter of 2012 increased by 4% to
should attractive opportunities arise in a down
“Many recent steps taken by Vale aren’t rational.
$44.1m from $42.3m during the same period in
market, or to remain firm and benefit from the
We believe its decisions are based on its per-
2011. Net income for the first quarter of 2012
upside of a healthy market environment.”
ception that Cosco is doing something to lobby
decreased by 21% to $21.6m from $27.3m,
Meanwhile, an early May casualty was Italian
the government to not allow Valemaxes into
during the same period in 2011. Adjusted net
shipping company Deiulemar Compagnia di
Chinese ports.”
income for the first quarter of 2012 decreased
Navigazione, which was declared bankrupt with
While recent comments about the Valemax
by 16% to $22.9m from $27.4m, during the
debts estimated at about €860m. A judge had
vessels have centred on potential safety con-
same period in 2011. Vessel operating expenses
previously rejected an arrangement with creditors
cerns, the company’s decision to invest in
increased by 42% to $8.1m for the first quarter
proposed by the company.
400,000 dwt iron ore carriers is worrying dry
of 2012, compared to $5.7m for the same
cargo operators because of the potential
period in 2011.
However, there was some good news from the latest Moore Stephens survey of business
There was also a positive message from
confidence, which found that in the dry bulk
Costamare, whose CFO Gregory Zikos com-
sector all the indicators pointed upward. There
mented on the company’s first quarter results.
was a 15% increase from the all-time survey low
“Since the beginning of 2012, we have been
of 23% to a more optimistic 38%, in the overall
Results good and bad
prudently renewing our fleet by taking advantage
number of respondents who thought that dry
Dry cargo woes continued at Genco, which
of attractive steel prices and charter-free values.
bulk rates would rise over the next 12 months.
recorded a loss of $33.1m for the first quarter,
At the same time, we have reduced our re-
with the company continuing to pursue its short
chartering risk with only four vessels coming out
time charter strategy.
competition threat in an already weak market suffering from over-capacity.
of charter during the year, excluding two vessels
Bocimar contract
According to president Robert Buchanan:
for which the charterer has the option to extend.
The dry cargo concern of CMB group Bocimar
“During the first quarter, management main-
The charters for those four vessels account for
has recently concluded a contract for the
tained a short-term time charter approach in
less than 2% of our 2012 contracted revenues.
acquisition of two 176.000 dwt Capesize vessels
a challenging drybulk market. By securing our
“In March, we completed a follow-on public
on very competitive conditions. It concerns
vessels on short-term or spot market-related
equity offering with net proceeds of approxi-
two units under construction at the Chinese
contracts, combined with an efficient cost struc-
mately $100m. The Konstantakopoulos family
Zhoushan Jinhaiwan yard. Delivery is scheduled
ture, we expect to generate significant operating
participated by buying 10% of the shares. We
for June 2012. The ships will be named Mineral
leverage and drive future performance when the
will be selective in our investments, as we have
Hope and Mineral Faith.
30
theBaltic Summer 2012 www.thebaltic.com
Heavylift and Offshore
Heavylifts muscle in Heavylift companies have been benefiting from investments by oil, gas and power companies as well as port development. Plus: transportation projects and the world’s largest stinger ramps
T
owned
he Russian heavylift market has been
Experienced operator
going from strength to strength.
offices and branches in 38 countries.
Russian heavylift operator Sovfracht was
In 1992, Sovfracht was reorganised into a
invest-
established in 1929 by the council for work
joint stock company as part of the Sovfracht
ments of the private and state-
and defence of the USSR as exclusive general
Group – one of the Russia’s largest independ-
agent of the Soviet Merchant Marine with the
ent transportation services providers, operating
monopoly for chartering tonnage.
in nearly all segments of the transportation mar-
The oil
total
and
volume
power
of
companies
of
Russia in 2010 was 688 billion roubles – 19% up on 2009 (580 billion roubles). In 2011,
Up to 1991, Sovfracht provided freight
ket (including rail and container freight forward-
the total volume of investments by oil, gas
transportation of USSR foreign trade and was
ing, ocean freight, port infrastructure, project
and power companies increased by 54% com-
a structural division of the Ministry of Merchant
cargo and heavy lift logistics), with cargo turno-
pared to the previous year, totalling one trillion,
Marine of the USSR, the exclusive broker and
ver of 31 million tons and revenue of over €1bn,
60 billion roubles according to Sovfracht.
lines operator for all the Soviet fleet, and also
with a nationwide network of branches, foreign
The forecast for 2012 is one trillion, 139 bil-
the exclusive agent for Soviet shipping abroad,
subsidiaries and 1500 employees now.
lion roubles, and for 2013 it is one trillion, 126
with more than 400 companies, representative
Delivery of heavylift cargo to Vankorskoe
billion roubles. Investment by Russian oil companies in modernisation and reconstruction will amount to about 1.5 trillion roubles by 2015. In particular, Rosneft expects to spend about 302 billion roubles; Surgutneftegaz some 261.5 billion roubles; Lukoil more than 200 billion roubles; Slavneft 1,015 billion roubles; and Bashneft 314 billion roubles. Total investment in offshore projects will reach 7 000 billion roubles by 2030. The main consumers of heavylift equipment are located in the European part of Russia, but the points of intensive growth of heavylift transportations will be in uninhabited regions of Siberia and the Russian far east including offshore, according to Sovfracht. The tendency to increase the weight of each heavylift unit, deterioration and, on occasion, a total absence of transport infrastructure in Russia make the problem of transporting heavy lift units a very real one. Conditions of roads and vessels have been deteriorating and there are no sea-going heavylift vessels under Russian flag to call at Russian Arctic ports.
Ice class
theBaltic Summer 2012 www.thebaltic.com
31
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A member of the
Group
PRECISION WORK: POSITIONING WHARF MODULES UP TO 700 MTONS AT KARARA IRON ORE PROJECT (GERALDTON, AUSTRALIA)
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Heavylift and Offshore and Priobskoeoil gave the company unique experience of transporting cargoes through the North-East Passage and some of Siberian rivers with navigation two weeks per year only. “We are sure that our experience will be demanded on implementation of projects on the Arctic shelf,” said a company spokesperson. “Now, we are engaged in federal transportation projects for ROSATOM, the Ministry of Defence and major oil companies that need investment into transportation infrastructure. Our engineering centre, established in 1986, evaluates all possible means of transportation, surveys conditions of the route – roads, bridges, river depth and navigation equipment, railway crossings and berths – and reconstructs, reinforces or build new infrastructure, including roads and temporary berths.” To realise this project, the company is increasing its fleet and starting negotiations for three special river barge newbuildings, and bareboat charter a HL-vessel.
Stinger ramp shifting With a fleet of 16 heavylift vessels, SAL provides customised and reliable sea transportation solutions for all types of project cargoes, including heavy machinery, equipment for the oil and gas industry, (offshore) wind energy, cranes
Geraldton
and floating cargo. SAL was awarded the contract to trans-
which the module carriers like Dockwise and
others familiar with the difficult conditions at the
port the largest stinger ramps ever built from
the seven other deck carriers later needed to
port expected it to take at least 10.
Rotterdam to Singapore. MV Annette carried
use for discharging of the modules. SAL was
Despite the challenging conditions, the SAL
out this challenging shipment in April 2012. For
bidding against Jumbo and Biglift, but due to
team managed to perform a safe and very
the oversized cargo with a unit weight of up to
an aggressive pricing strategy was awarded the
efficient operation. Thanks to the high stability
880 tonnes and dimensions of up to 42.50m ×
contract, worth in excess of US$15m. Regine
characteristics of Svenja and the skills of the
15.10m × 18.00m, SAL’s engineering depart-
was the vessel which SAL nominated for the
vessel’s master and crew, all modules were
ment designed a complex understructure for
Gorgon project.
discharged to their position in just five days –
weight distribution on deck.
The project in Geraldton was successfully
accident free, and with no damage to the cargo.
Both engineering and manufacturing of the
completed in February 2012. MV Svenja has
weight spreading system had to be done in a
completed the transportation and positioning
So what are the prospects for further port
very short time. The stinger ramps were then
of five wharf modules weighting up to 700 tons
work? According to Eike Hemp, operations
loaded and discharged by floating crane.
for the new iron ore export facility (berth
manager for SAL Heavy Lift Australia, oppor-
In Singapore, the stinger ramps will be
number 7) in the Port of Geraldton. The mod-
tunities are particularly good in the remote
assembled by Keppel Shipyard in order to com-
ules were loaded in Thailand and transported to
locations of Australia, where qualified labour
plete the building of MV Castorone, which will
site in Geraldton, where they were discharged
is rare, and to which locations it is difficult and
become the world’s largest pipe laying vessel.
on to stabbing piles.
expensive to transport construction machinery and materials.
Heavylift operator SAL has also been work-
Two major issues had to be overcome in
ing on two projects at Gorgon and Geraldton .
order to make this happen. First, an innova-
Port developments offer potential for SAL
Among the trademarks of the fleet are its
tive mooring solution had to be developed to
and other heavylift companies. Large parts, like
high crane capacity of up to 2,000 tonnes SWL
ensure a safe and stable position for the vessel
concrete caissons, wharf modules and berth
and their speed of 20 knots, imperative for the
alongside the unfinished berth. Second, the
dolphins, can be pre-fabricated and shipped
safe delivery of time-sensitive cargo.
Port of Geraldton is very exposed to swell and
to the site.
Sune Thorleifsson, senior director of the
statistically only one in four days is suitable
Future port projects in Australia that might
project department at SAL Heavy Lift’s head-
for heavylift crane operations. Therefore, any
be interesting for the company include: Port
quarters, explains that the Gorgon project was
low swell windows had to be used to ensure
Hedland SW Creek, the Geraldton berth 6
awarded by Chevron to Boskalis, to Murray &
completion on time.
extension and James Price Point (for Browse)
Roberts and then to a local forwarder for the
The target to complete the operation was
caissons and wharf dolphins for the ro-ro jetty,
six days, but the Geraldton Port Authority and
theBaltic Summer 2012 www.thebaltic.com
as well as the Wiggans Island Coal Terminal.
33
Salvage
Salvors take the bull by the horns Efthimios Mitropoulos has praised the efforts of salvors in protecting lives, property and the environment as the number of operations rises
F
ormer IMO secretary-general Efthimios
self confidence attempt what sometimes looks
the accident happened nonetheless. Once the
Mitropoulos
impossible or unachievable – and most of the
evacuation was completed, the parties turned to
time you succeed”
the salvage industry – “most certainly you know
saluted
the
efforts
of
salvors at the International Salvage Union’s Associate Members day, saying
Although the number of ships lost and
better than me how difficult and complete the
that the services of the salvage industry cannot
pollution to the marine environment has declined,
operation to salvage what is left from that once
be overestimated.
Mitropoulos said that the danger of an accident
proud and majestic ship is going to be”.
“While you may not be very popular when
with serious repercussions on human life,
Mitropoulos paid tribute to salvors and crews
shipping goes about its business uneventfully, it
property and the environment is always there,
who, he said, did not hesitate to risk their lives
is to you and your specialised service everybody
“either because something goes dramatically
in order to save others, safeguard property
turns at time of crisis – to safeguard life and
wrong on a ship or because of the omnipresent
and prevent pollution under the spotlight of
property at sea and to protect the marine
fear of a human error”.
public and political scrutiny. He expressed anger
environment,” Mitropoulos told members. “It
Commenting on the Costa Concordia
that salvors could occasionally find themselves
is when others admit there is little they can do
accident, Mitropoulos asked who would have
facing criminal prosecutions when they should
that you take the challenge on, take the bull
expected the ship to ship to hit the rocks
instead be praised for their work.
by the horns and with sheer determination and
on a calm evening in the Mediterranean, yet
Salvage services by International Salvage
2011 ISU pollution prevention survey
34
theBaltic Summer 2012 www.thebaltic.com
Salvage 2011 ISU pollution survey
Union members rose last year compared to
tonnes of potential pollutants salved per year.
ISU members. The Lloyd’s Open Form salvage contract continued to be the most widely used
2010 according to the ISU’s annual pollution
In 2011, the major change was a significant
prevention survey released to coincide with
decrease in the quantity of “other pollutants”
the event.
salved – down 75% from 257,158 tonnes in
Some 71 services were carried out under
Although the number of services increased,
2010 to 63,338 tonnes this time. However, the
other salvage contracts – a major increase
the quantity of pollutants salved overall was
figure for 2010 was larger than is typical due
probably as a consequence of the Japanese
down on 2010, despite a significant rise in most
to salvage services provided by ISU members
Tsunami of March 2011. The number of wreck
categories. The overall decrease from last year
to two vessels carrying large cargoes totalling
removals in 2011 was up to 17 from niine the
is explained by the 2010 numbers, including two
170,000 of kerosene which is recorded by ISU
previous year.
large oil product tanker cargoes.
under the “other pollutants” category.
The total of all pollutants salved in 2011
The quantity of crude oil salved went up by
was 496,331 tonnes, compared with 574,386
32% from 195,300 tonnes in 2010 to 258,647
tonnes in 2010 – a fall of 14%. The average
tonnes in 2011, which is a more typical figure
annual figure for the 17 years for which data
than that of the 2010 survey.
is available continues to exceed one million
There were 221 services carried out by
contract, with 55 services (57 in 2010).
Four other types of salvage contracts were used and 82 services were carried out on a fixed price or daily rate basis. A total of 23 casualties needed to be lightened of all or some of their pollutants by ship-to- ship transfer, a slight decrease on 2010.
PICTURE Pollutants salved in the past year
theBaltic Summer 2012 www.thebaltic.com
35
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Executive MBA in Shipping and Logistics (The Blue MBA)
Program Overview The program consists of eight one-week modules plus a final integrating strategy project (thesis). All modules will deal with leadership issues and personal development. In the process of working with the integrating strategy project (ISP) the participants will give three presentations and the last presentation will function as the oral defence of the ISP/thesis.
Participants study the material in between sessions and write an assignment for each module. These assignments, as far as possible, will be focused on a problem related to the candidate’s own firm. For the final integrating strategy project, topics should be chosen for their strategic purpose and integrating function, giving participating companies a valuable and practical analysis.
Each module presents theories and gives a thorough introduction to reading material and motivates participants for their independent studies.
Pre-MBA (optional) Module 00
Accounting and international economics
18-20 Sept. 2013
Copenhagen Denmark
23-28 Sept. 2013
Copenhagen Denmark
02-06 Dec. 2013
Copenhagen Denmark Copenhagen Denmark
Shipping as a Business and a Market Module 01
Shipping as a business and a market + Leadership
Understanding the Global Environment Module 02 Module 03
Supply-chain management – new logistical challenges International economics and market analysis + Leadership
10-15 Feb. 2014
Focus on Maritime Issues Module 04 Module 05
Ship design 07-11 April 2014 The maritime legal framework Operational management and information technology 23-28 June 2014 + Leadership
Hamburg Germany Copenhagen Denmark
Core Management Issues Module 06
Investment analysis, risk management and finance
01-05 Sept. 2014
Module 07
International marketing and organization Introduction to ISP Process Managing strategy and change Introduction to Industry Analysis + Leadership
03-07 Nov. 2014
Module 08
12-17 Jan. 2015
London UK Copenhagen Denmark Copenhagen Denmark
Integrating Strategy Project (ISP/Thesis) Presentation of Industry Analysis Introduction to Company and Issue Analysis Presentation of Company and Issue Analysis Introduction to Implementation Plan Presentation of the ISP with Implementation Plan (oral defence)
18-20 March 2015
Graduation
08 August 2015
20-22 May 2015 05-07 August 2015
Copenhagen Denmark Copenhagen Denmark Copenhagen Denmark Copenhagen Denmark
Shipmanagement, crewing and education
Titanic technique How does the way the ship’s loss was investigated in 1912 compare to today’s accident investigation techniques? Plus the importance of mentoring, a new training series and key performance indicators
R
ear Admiral John Lang, former chief
in apportioning blame”. One hundred years ago,
for not responding to the Titanic’s rockets.
inspector of marine accidents for the
he said, people wanted stories of heroes, but
Blaming the Californian, and effectively one man
UK’s Marine Accident Investigation
also scapegoats and somebody to blame. “In
– Captain Lord – for the great loss of life was a
Branch said that while he was in the
many ways not much has changed, instead of
“monstrous miscarriage of justice” in view of the
role he took an interest in the Titanic and found
heroes and self sacrifice we have scandal, hand-
British Board of Trade failure to regulate for an
himself comparing the way the ship’s loss was
held video cameras, trial by media and the fear of
adequate number of lifeboats.
investigated in 1912 with the way accidents are
being prosecuted”.
investigated today.
This, he told PYNDA delegates, set an
“The Titanic foundered not just because
unfortunate example that persists to this day,
Speaking at the Plymouth Nautical Degree
of excessive speed, hubris, the intervention of
namely the compulsion to pin the blame for any
Association (PYNDA) conference at the IMO
J Bruce Ismay or even a poor lookout. It was
accident on the master and “too often charging
in April one question that concerned him was
created by a number of factors, all coming
him with a criminal offence. Criminalisation of
what a modern investigator might make of the
together to create the accident chain that is
the seafarer is, in my opinion, the least helpful
evidence and whether, given today’s techniques,
a common denominator in every accident,
measure of all to improve safety at sea. I won’t
an investigator would reach the same conclusions
Lang said.
go so far as to say it does nothing to improve
as 100 years ago. The techniques he had in
While he said he was not going to dissect the
safety, but the aim pour encourager les autres
mind were “for the investigator to be led by
original Titanic findings, he did take issue with
is a poor substitute for an in-depth analysis as
the evidence, have no preconception as to the
one aspect of the outcome, notably the targeting
to what went wrong and, more importantly, why.
outcome, eschew hindsight and have no interest
of the cargo ship Californian for special blame
“The great weakness of apportioning blame is it gives the prosecuting authority a wonderfully warm feeling that it has satisfied the political need for heads to roll and yet does hardly anything to uncover the real underlying reasons as to why the accident has happened.” The premise that 80% of accidents at sea are caused by human error is common. However, according to Admiral Lang, “the reference to error is a curious one, as it suggests that the problem is entirely due to a stupid and unforgiveable mistake by one person. Whenever human error is identified as a cause, the instinctive solution today is to sack the poor man involved, bring in new regulations or fit another computer.” Despite huge improvements in technology, training and awareness of crew needs, “we still don’t really understand the human factor in the maritime world.” He suggested that what needed to happen was learning more about the psychology of crew members, how they responded to information with which they were presented and removing some of the pressures under which they work. “So often, we do nothing
Dealing with the human factor (source Videotel)
38
theBaltic Summer 2012 www.thebaltic.com
Shipmanagement, crewing and education more than pile on the commercial pressure give
accident proved, personal video recordings were
learn from the accident or “will it be another case
[the crew member] another DVD to watch in his
appearing on TV screens while the event was still
of ‘all’s well, it’s only human error and somebody
cabin and deny him shore leave.”
be played out, he said procuring “instant and
has been fired’,”.
On sighting the iceberg that caused the Titanic accident, the first officer of the watch
seriously misinformed analysis of what might have happened”.
Mentoring matters
ordered to go hard starboard. “How you think
What will benefit safety at sea most is to bear
the officer of the watch should react if, for even
in mind that no accident is caused by a single
André le Goubin of London Offshore Consultants
good reason, he had to give the same order in a
event. “We need properly trained, independent
described himself as “a mariner with a concern”.
modern cruise ship doing 20 knots plus?”
investigators to find out what went wrong.
He told the PYNDA conference that he believed
He cited the accident in 2006 involving the
The compulsion to apportion blame, and even
that the underlying cause for accidents and
Crown Princess when an officer corrected what
worse, criminalise the seafarer is aggravating
incidents aboard vessels today was due to a lack
he thought was a malfunction and put the wheel
the problem not helping it. It is persuading some
of knowledge, which was traditionally passed on
hard over. The result was a list of 24 degrees and
mariners to cover up what they have done and
from one to another through mentoring.
298 crew and passengers were injured.
that is where the problem lies”.
He conducted research as part of a
Reports said the incident resulted from
“Safety at sea could be greatly improved
master’s degree with a view to showing that
human error and the National Transportation
by having casualty investigations carried out
a contributory factor to marine accidents was
Safety Board of the US found a lot that was
by investigators that have no vested interest
a lack of knowledge gained from professional
wrong, Admiral Lang said. Princess Cruises
in the outcome and are totally independent of
on-the-job experience and knowledge not being
took measures to prevent it happening again
the regulators. Evidence given to investigators
transferred from senior to junior officers on
and “everybody went home happy, except the
needs to be treated in complete confidence
board modern merchant navy vessels. It was,
second officer who, I believe, lost his job. There
and it should be mandatory to have findings
and still is, his aim to engage the industry in a
must be something wrong with the system
made public. Investigators need to understand
conversation about mentoring and the transfer
whereby the officer of the watch, who may feel
the human element in a marine environment,
of experiential knowledge, he said. He defined
the need to put the wheel hard over for whatever
he added. Technology, he said, has made a
mentoring as “the act of sharing knowledge
reason, but hesitates to do so because of the
massive contribution to improving safety “but I
without a designated reward”.
possible consequences.”
sometimes think that we have forgotten the man
The key element, he said, is to learn from an
who has to live with it.”
In researching responses to the question of what was the most significant lack of
accident and make real improvements to safety
IMO has to do more to make sure that
knowledge that leads to accident or incidents,
at sea. Turning to the Costa Concordia, Admiral
investigations are properly carried out. In the
he expected to see issues like application of
Lang said it would be naive to think that we
case of the Costa Concordia, the question he
collision regulations, standards of certification
will never have another marine disaster. As the
said he wanted answered was whether we shall
training and reliance on technology, to be some of the issues raised. Although these responses were made in research, 53% of respondents cited “lack of feel, seamenship, intuition,
practical
knowledge
and experience”. Other examples of responses included “ships’ officers have ceased to be trained to think and act independently, make decisions based on their own judgement and be accountable for them”. Inability to act intuitively and inability for modern officers to use their own senses, for example sight and sound as well as their brains to make decisions, were also cited. The North of England P& I Club recently highlighted the number of claims at anchorage and the lack of understanding of anchoring issues, Captain le Goubin told delegates. There was a need to indentify barriers to the exchange of information between senior and junior crew members. Language, he said constituted the greatest barrier on ships and the problem was more prevalent
Costa Concordia
theBaltic Summer 2012 www.thebaltic.com
39
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Shipmanagement, crewing and education on vessels with two nationalities than on vessels
Key performance indicators
companies’ and vessels’ performance. Now
with multinational crews as both sides would
The Shipping Key Performance Indicator Project,
established as the independent, not-for-profit
tend to speak in their own language. One
initiated by InterManager but now administered
KPI Association Ltd, the project is working with
important factor Captain le Goubin said was
by the independent KPI Association Ltd, has
a wide range of industry stakeholders and aims
to have a common language spoken in the
passed an important milestone.
to develop a standard for ships’ performance
mess room and to try and bring everyone
Performance statistics from more than 1,000
measurement that is common to the industry.
vessels are now being inputted into the project’s
The data that each company inputs is
website – enabling the KPI system to produce
completely confidential and cannot be accessed
lack the experience and knowledge to pass on
informative
by any other user of the service. However,
down the line. By reintroducing mentoring, it
measurements for the industry.
together socially. The challenge occurs when senior officers
and
meaningful
performance
the combined data enables the KPI Project to
was possible to introduce knowledge transfer
Captain Kuba Szymanski, on behalf of the
as old as seafaring itself and get back to a
KPI Association, said: “This is excellent progress
brighter future, he believed.
for the project and indicates a great deal of
calculate industry averages to enable companies to benchmark their vessels’ performance. The KPI Project is a voluntary industry
industry involvement and support. By collating
initiative that:
performance data from a wide range of shipping
• provides user-friendly tools that can more
Leadership and team working
companies, we are able to calculate key
effectively identify areas to focus on for
Accident investigation is a painstaking and often
performance indicators to enable benchmarking
internal
painful process and, more often than not, the
against industry averages. The more information
companies engaged in ship operation
outcome is a raft of new policies and measures
we have, the more accurate these indicators are,
to avoid reoccurrence. Yet, if well-thought-
which will help to ensure the standards within
out and established company procedures are
our industry are kept high.”
followed in the first place, tragic consequences can be avoided. In response to the renewed focus on training in this area, Videotel has launched a new training
Norwegian Research Council, Marintek and Wilhelmsen ASA, the Shipping KPI Project standard
tools
improvements
in
activities • provides a more effective communication platform of ship operation performance to
Started by InterManager, together with The
developed
performance
for
measuring
internal and external stakeholders • increases transparency on quality, safety and environmental performance in ship operation • enhances governance in ship operation.
series, “Leadership and Team Working Skills”, which takes as its foundation the importance of good resource management and how it can be achieved. “With continuing improvements in technology, human factors feature more and more frequently in the causal chain,” explains Nigel Cleave, CEO of Videotel Marine International. “Forty years ago, the average cargo ship was manned by 40-50 crew – nowadays, even on VLCCs, we are seeing crews numbering in the low twenties. Individuals are required to operate ever more efficiently adding further pressure on board. This series addresses many of the key issues defined by the STCW and SOLAS conventions, which provide a framework for safe and effective working practices.” Produced in conjunction with Steamship Mutual, Leadership and Team Working Skills is aimed at all sea-going personnel, having special relevance to the work of the watchkeeping officers in both deck and engineering departments, and is available on DVD and Interactive CD-ROM. Topics include: the voyage plan; bridge and engine room watchkeeping; working with pilots and resource management and accident prevention. There is also a module featuring case studies of five incidents where the bridge team failed to keep the ship out of danger as a result of poor resource management. Incidents are re-created using actors and showing the data available to the bridge team. The audience are invited to view each incident and then to stop and analyse what went wrong and discuss how things could have been done better.
Captain Kuba Szymanski
theBaltic Summer 2012 www.thebaltic.com
41
FFA
Reducing the risk Steady trading volumes. Plus: route assessments and FIS bunker swaps
T
he use of FFAs has significantly reduced
would otherwise fall due on that date. Section
FIS bunker swaps
the risk of taking on tonnage and FFA
2(a)(iii) therefore suspends a Non-Defaulting
Meanwhile, Freight Investor Services has
trading volume has been steady since
Party’s payment obligations to protect it from the
expanded its commodity broking business into
January 2009 even if proprietary trad-
credit risk of paying a party that may be unable
cleared, over-the-counter bunker swaps. The
ing activity is down, according to Georgi Slavov,
to fulfil its payment obligations in return. The
new service comes in response to escalating
managing director of global research at ICAP.
Court of Appeal’s judgment provided guidance
bunker prices which are hurting shipowner
The FFA market has established itself as
on the effect of this suspension and, in particular,
margins at a time of historically low freight rates.
a useful tool in recent years, he told del-
whether it extinguishes the obligation to make
The new FIS offering will include three fuel
egates at the recent PYNDA conference at the
payment or suspends it and, if so, for how long,”
oil contracts: Singapore 380 centistokes (CST),
International Maritime Organization.
the law firm said.
Singapore 180 CST and Rotterdam 3.5% sul-
While in an upturn everyone will benefit, mak-
“The Court of Appeal’s judgment has clarified
phur barges FOB. In contrast to existing swaps,
ing money in a downturn is much more prob-
several much-debated aspects of the Master
these contracts will be traded in lot sizes of
lematic, he told conference delegates. Modern
Agreement and has provided clarity to deriva-
just one tonne, enabling easier access to these
day operators are proving extremely success-
tives traders. The judgment has been welcomed
markets for smaller players such as shipowners
ful, he says because while operating ships is
by ISDA and, to the extent that it protects the
who need to manage their fuel cost risk for small
nothing new, the way business is being done
expectation interest of parties who enter into
fleets or even individual vessels.
has changed, with the deployment of shipping
derivatives transactions, should be welcomed by
FIS managing director John Banaszkiewicz
market hedge funds. Freight rate levels are
the market in general. It is not yet known whether
commented: “Today’s bunker prices are more
evidently important for the investor because he
there will be an appeal to the Supreme Court.”
than five times greater those seen 10 years
needs cash flow to justify the rate of return on
ago. Market participants cannot afford to ignore
the investment and therefore it is very important
this cost. Interest in trading bunker swaps has
Route assessment
become much stronger recently, with many of
There has been a steady increase of hedging
Two World Container Index route assess-
our clients asking us to help out.
using paper contracts through the FFA market.
ments, covering Los Angeles to Shanghai and
“FIS is delighted to offer this innovative brok-
“While people might talk about the level of FFA
Rotterdam to Shanghai will now be cleared by
ing service, which will enable any counterparty,
trading falling from 2007 and 2008 levels, when
LCH.Clearnet. The addition of clearing, which
whatever their size, to trade as many or as few
you consider the bank trading has been cut
provides risk management for over-the-counter
bunker swaps as they want.”
off due to new regulation, volume has actually
container freight swap trades, has been made
“For the first time, the market has access to
stabilised,” he said.
in response to increased demand to manage
bunker risk management with live prices via our
freight price risk and reflects the growing market
multi-commodity trading screen, making these
acceptance of the WCI.
swaps simple and easy to trade,” he added.
for bank financing.
FFA action
WCI director Richard Heath said: “From its
Court decisions on the interpretation of the 1992
foundation, the World Container Index has been
ISDA Master were handed down by the English
working closely with freight buyers and sellers to
Risk management strategy
Court of Appeal in April when the appeal from
ensure that our products satisfy their needs for
According to OW Bunker’s Serge Laureau,
the judgment in Lomas v JFB Firth Rixson was
risk management. These first cleared contracts
manager for risk management sales: “There
heard with those from Pioneer Freight Futures
represent another step forward for the WCI and
are a number of hedging instruments that can
Company Limited (in liquidation) v Cosco Bulk
for the growing container freight derivatives mar-
be used as part of a holistic risk management
Carrier Company and two others. ISDA was
ket, helping to bring new solutions to a wider
strategy that is tailored to meet the specific
granted permission to intervene.
number of shippers, carriers and intermediaries.”
needs of a customer’s business, as well as their
According to Holman Fenwick Willan: “The
The contracts are similar to Asia-Europe
most interesting issue arising in the appeal
routes already listed by LCH.Clearnet, but differ
“Our focus is on creating a total end-to-end
concerned the interpretation of Section 2(a)(iii)
in that WCI contracts are marked in FEU rather
procurement strategy for our customers, based
of the Master Agreement, which states that if
than TEU, to more accurately reflect the physical
on their immediate and future requirements,
a party is affected by an Event of Default (as
market. Contracts are settled monthly and initially
continuously looking at locking in costs,
defined in Section 6), the other party is under
will be available across the front three months,
managing cash flow and maximising their levels
no obligation to make payment of sums which
four quarters and front calendar periods.
of profitability.”
42
theBaltic Summer 2012 www.thebaltic.com
appetite for risk.
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Environment
Going Green? Whether there will be enough low sulphur fuel to meet the new regulatory deadlines is just one issue that came under discussion at the recent International Bunker Conference in Oslo
S
hipping faces immense challenges
technology with HFO, MGO and perhaps LNG
cannot burn that fuel coming into the ECA?
with a whole raft of new environmental
for newbuildings.
What if it isn’t possible to source 1% sulphur fuel?
measures, for which in some cases they are not prepared.
“Putting your toe in the water is expensive
Supply of low sulphur fuels is evidently
and Wilhelmsen has been doing this with scrub-
a source of considerable concern. As Adam
Melanie Moore, vice president of environ-
bing technology. Regulations set the playing
Titchie of Shell Trading put it, the provisions
ment at Wallenius Wilhelmsen Logistics, told the
field and we have to play there,” she said. Some
of Marpol Annex VI are not to be taken lightly.
International Bunker Conference in Oslo, organ-
operators will choose to play at the regulatory
While he says that at a global level there is not a
ised by BI Norwegian Business School, that
limits and others will chose to add on their own
supply problem for low sulphur at present, sup-
there are five big regulatory changes coming.
environmental regimes, she believes.
plies may not be in the right area. “If you know
Aside from global SoX regulations and SoX
Some “what ifs” include if Marpol Annex
where the 0.1% fuel is, we want to know,” he
regulation in emission control areas or in individ-
VI is not translated into national legislation or
told the conference. The big shift will be to
ual states like California, there are also NoX reg-
is not enforced, she said. And she raised the
a global cap of 0.5% in 2020.
ulations coming into play from 2016, the start of
question of what happens when entering the
He told the IBC conference that desul-
GHG regulations with the Ship Energy Efficiency
North American ECA if the sulphur content on
phurisation is a costly business, as will be the
Management Plan and the Energy Efficiency
the bunker delivery note matches the regulatory
introduction of scrubbing technology. To make
Design Index from next year. Another layer of
requirement, but for quality reasons the ship
the transition to creating low sulphur fuel might,
regulation will be the Ballast Water Treatment Convention which is undergoing ratification. The fifth issue was particularly sensitive sea areas, ship strike, noise and black carbon regulation. Wallenius Wilhelmsen Logistics consumes between 500,000 and a million tonnes of fuel, and Moore estimates that it will cost $1m per vessel (with 60 vessels) to fit ballast water treatment systems. The company is also taking a look at what it needs to do to comply with NoX regulations. The group is having to consider where the price will go not only for HFO, but also low sulphur and MGO, as well as the use of scrubbing technology. Another consideration is where the company will grow in the future and if it will be shifting from the northern to the southern hemisphere, where the regulations differ. Moore says the company believes that it is possible to come up with solutions, but not a single solution, with a mixture of scrubbing
44
MV Don Quijote
theBaltic Summer 2012 www.thebaltic.com
Environment according to some estimates, involve $100bn of capital. The cost of turning high sulphur fuel oil into gasoil is of “about the same order of magnitude”, he said. “Shipping companies would prefer not to use gasoil, they would prefer to use the low sulphur fuel oil, but it isn’t going to be there”. The alternative is scrubbing technology, in itself an expensive option, he said, with a $20-$30bn price tag put on achieving scrubbing technology according to some analysis. Asklak Suopanki, solutions life cycle manager at Warsila Finland, outlined the various options available. These included fuel switching, which was flexible and required a small investment, but meant higher operational costs in the ECA.A complete change to MGO would be the most convenient solution, he said, but operating costs would be high and there was a question of availability. LNG is another solution, but infrastructure is not there at the moment.
Rear Adm. Kevin Cook, director of Prevention Policy for the U.S. Coast Guard, signs a
According to Arnaud Leroy, senior project
memorandum of understanding with the Environmental Protection Agency while the
officer at the European Maritime Safety Agency
EPA’s Cynthia Giles (centre), the assistant administrator for the Office of Enforcement and
(EMSA), some members of the European parlia-
Compliance Assurance, and Gina McCarthy, the assistant administrator for the Office of Air
ment are thinking of introducing an ECA similar
and Radiation, wait to add their signatures in a ceremony,
to that around the US coast for Europe because of concerns over competition, especially for the short sea sector.
the scrubbing route, LNG, or biofuels.
According to Simon Chattrabhuti, director
According to Jeffrey Lantz, director of com-
and head of tanker market analysis at Clarkson
There have been some problems with the
mercial regulations and standards at the US
Shipbroking, a huge amount of refining capacity
0.1% sulphur content for ships at berth in the
Coast Guard, Marpol Annex VI is very important
is being shut down in the US on the east coast.
EU. In Europe, so far, there is no global cap in
to the US and the US only ratified it when the
From 2011 to the first part of 2012, there has
EU regulations. Revisions to the EU regulation
IMO amended it to introduce stricter standards.
been the equivalent of 1m bpd of refinery shut
include aligning it with IMO guidelines with two
As far as the North American ECA is con-
downs, he told IBC delegates. The Philadelphia
schemes proposed for abatement technology.
cerned, the USCG will not be going 200 miles
refinery is expected to shut down a month
The introduction of the 0.1% requirement in the
offshore to inspect ships to ensure they are in
before the North American ECA comes into
ECA resulted in a “battlefield” and a lot of pres-
compliance with fuel regulations, but it will be
force, meaning that bunker fuels will have to be
sure to get the EU to go back to the IMO and
important that ships can demonstrate compli-
imported in greater volumes. On the US Gulf ,the
change its stance, Leroy said. EMSA was work-
ance and if discrepancies are found “they will be
opposite is true, with refining capacity increases.
ing with all sectors to try and see what support
taken further”. Commenting on fuel availability
The problem is that the Jones Act prohibits mov-
they need, he concluded, whether they go down
he said that if ships came in with non compliant
ing supplies from the US Gulf to the east coast,
fuel, the USCG would seek to establish what
unless this is on a US flagged ship. The US
steps were taken to prevent that from hap-
Gulf, Chattrabhuti said, could supply product to
pening. As the new ECA rules come into force
Europe and other sources he mentioned include
on August 1, he advised ships to keep “robust
the Middle East and India, which he believed
logs” and “good fuel samples”. He added
was the real potential source going forward.
that ships should be “upfront on how they stand on compliance”.
MV Boheme
Jane Dahl Christensen , executive vice president of physical supply at OW Bunker, said the
As in northern Europe, concerns have already
key issue to be faced with the new regulations
been raised about the effect the North American
was preparation and owners and operators
ECA will have both on short sea shipping viabil-
needed to start thinking of what to do. While
ity and the environment. US short sea operator
the use of scrubbing technology is one possible
CSL International presented a submission to
solution, there was nervousness in the market
a House of Representatives sub-committee in
about whether manufacturers would be able
April raising concerns about the ECA and calling
to meet the deadline. In addition, she said the
for changes.
desulphurisation process was expensive and
According to CSL president Paul Cozza,
will have an impact on pricing. There is also a
compliance with ECA requirements in 2015
perception in the market that there is a high
would jeopardise the short sea shipping
proportion of substandard fuel in the market.
industry and prices for compliant fuels could
She believed a lot of smaller suppliers will
double. CSL wants to see the ECA reduced from
have difficulty in securing supplies of the low
200 miles to 50 miles for 0.1 % fuels in 2015.
sulphur product.
theBaltic Summer 2012 www.thebaltic.com
45
Corporate viewpoint Advanced Polymer Coatings
APC continues tank coating success
MarineLine® 784 coating system used for chemical tankers now also specified for the growing product tanker market
A
dvanced Polymer Coatings (APC),
tect against a wide range of chemical cargoes,
formation of free fatty acids that can attack and
Avon, Ohio, USA, has developed a
including methanol, acetic acid, and caustics.
corrode exposed coating surfaces. Bioethanols, derived from the fermenting of
successful business by providing the
A growing business
sugar cane, sugar beet, sorghum, corn, wheat
coating system to line and protect the tanks of
The company is now realising further MarineLine®
and cassava, or starch crops, remain as a single
chemical carriers. Today, more than 350 mari-
growth by serving the product tanker market.
chemical compound. A problem occurs if small
time tankers are employing MarineLine® to pro-
Shipowners are now retrofitting and refurbishing
quantities of water are dissolved in gasoline/
older product tankers to carry a host
bioethanol blends, causing a highly corrosive
of newer cargoes such as biofuels,
situation within the tank.
high-performance MarineLine® 784
a particular sector growing at an
for Chemical/Product Tankers THE tank coating system for carrying CPPs, PFADs, Methanol, and Bio-Fuels. Rely on MarineLine® 784 tank coating to handle a wide range of cargoes carried by chemical and product tankers. MarineLine® 784 offers enhanced corrosion resistance compared to phenolic epoxies or zinc silicates, at a similar cost. It is faster and easier to clean, with higher cargo purity. Advanced Polymer Coatings Avon, Ohio 44011 U.S.A.
estimated 15% annually. However, due to the corrosive nature of the cargoes and their detrimental effect and breakdown of conventional tank
coatings,
shipowners
are
concerned about carrying biofuels. MarineLine®’s
unique
corrosion-
resistant coating is an ideal answer. Biofuels comprise two categories, each with separate corrosive issues: Biodiesels
or
FAMES
(fatty
acid methyl esters), derived from vegetable
oils
(palm,
coconut,
rapeseed, soyabean and tallow, and
animal
fats),
have
higher
viscosities and are more unstable than conventional diesel fuel. Water contamination is a key problem as FAMES absorb water through seawater ingress, tank washing residues, humidity in tanks, and
+01 440-937-6218 Phone +01 440-937-5046 Fax www.adv-polymer.com
46
other sources. Water can promote
The newly coated MarineLine® 784 cargo
hydrolytic reactions, leading to the
tank coating
theBaltic Summer 2012 www.thebaltic.com
Corporate viewpoint Advanced Polymer Coatings by structural issues, such as weld seams, edges, corners and others. That is why it is vital to ensure surface preparation is done in accordance with recommended specifications, and care is taken to avoid contamination during the coating application. Following
the
pre-work,
blasting
and
application phases, the cargo tanks are heat cured with forced hot air, to exacting specifications, to fully cross-link the coating to provide unmatched chemical resistance. Inspection of the coating process is performed during the entire process of the application by experienced, qualified personnel, to ensure the cargo tanks have been coated to high quality standards. After final inspection and A
MarineLine®
approval, the vessel is ready to carry cargoes
inspector spark testing the top coating application
recommended by the coating manufacturer after leaving the shipyard.
The most effective solution is to line the tanks
all excellent environmental advantages. Faster
of the product carriers with MarineLine® 784.
cleaning also leads to prompt turnaround, so
MarineLine® 784 is provided with a semi-
This coating uses a tightly knit, cross-linked
chemical carriers can go back into service
gloss finish, in either standard grey, or a new
organic-inorganic polymer structure to create a
quickly, maximising the usage of the vessels,
ivory colour. The coating is offered in 5 gallon
nearly impermeable barrier. The coating resists
another green benefit.
(19 litre) and 1 gallon (4 litre) kits with catalyst.
chemical and corrosive attack from a wide range
MarineLine® 784, which is sometimes
of aggressive cargoes and assures product
referred to as ‘liquid stainless steel’, is coated
purity from port to port, virtually eliminating
directly onto the carbon steel substrate of the
tainted cargoes from occurring, a real problem
ship’s tanks. This replaces the need to fabricate
for conventional coatings that are trying to
tanks made of stainless steel, which can be
For more information on the MarineLine®
carry biofuels and other cargoes such as CPPs,
very costly. It is estimated by APC that a carbon
784 tank coating systems, contact:
PFADs, and methanol.
steel tank coated with MarineLine® 784 costs
Advanced Polymer Coatings
less than one-sixth of the price for an equivalent
Avon, Ohio 44011, USA
A proven resource
tank fabricated in stainless steel, thus further
Tel: +01 440 937-6218
MarineLine® 784 is already the chosen coatings
preserving resources of the shipowner and
www.adv-polymer.com
solution in the chemical tanker industry, carrying
shipyard.
thousands of different types of aggressive chemicals, including the full range of IMO chemicals.
Proper application a key
Many benefits separate MarineLine® 784
One of the most important aspects
from other types of coatings, and also from
to the success of MarineLine®
stainless steel tanks. These include ease of
784 is proper preparation and
cleaning, assurance of high cargo purity, and the
application. APC has developed a
flexibility to carry and then switch many different
six-step application programme to
types of cargoes. The market for MarineLine®
ensure the tanker owner has many
784 continues to expand as more shipowners
years of profitable service with the
and chemical producers in the industry realise
vessel. These steps include:
the high performance and versatility of this
1.
Pre-blast preparation
protective coating for handling hazardous
2.
Blasting
cargoes.
3.
Spray application
4. Inspection
A ‘green’ coating The
MarineLine®
784 cargo tank lining system
5.
Heat cure, and
6.
Final inspection.
delivers on green principles that have become
Not all other tank coating
so necessary in today’s business environments.
manufacturers employ these steps;
The extremely smooth, hard, slick surface of
however, they have been proven
MarineLine® 784 makes tank cleaning an easy
very effective for MarineLine®.
process. During port changeover, no extensive
Every coating faces inherent
cleaning chemicals are needed to wash the tank
problem areas within a cargo tank.
walls, thus greatly reducing the use of cleaning
In certain locations, breakdowns
chemicals, requiring less fuel consumption for
may be more prevalent; areas
cleaning equipment, and lowering emissions,
where excessive stress is caused
for Chemical Tankers THE tank coating system for handling aggressive chemical cargoes. Transport all IMO cargoes, especially aggressive acids, solvents and alkalis, with MarineLine® 784 tank coating system. The coating uses a virtually impermeable polymer-based technology to ensure cargo product purity from port to port.
Base Coat
Top Coat
Advanced Polymer Coatings Avon, Ohio 44011 U.S.A.
+01 440-937-6218 Phone +01 440-937-5046 Fax www.adv-polymer.com
theBaltic Summer 2012 www.thebaltic.com
47
Oxford Analytica
Rough ride on the Panama canal The troubled expansion of the canal continues six months behind schedule, putting the completion deadline of 21 October in doubt
W
Analysis
corporate headquarters of choice (see Panama:
the Panama Canal is running six
The outgoing head of the Canal Authority
Business hub aspirations face obstacles –
months behind schedule, and
(ACP), Alberto Aleman, has been playing down
17 February, 2011).
may not meet the completion
the impact of scheduling problems, saying that
Labour conflicts that have dogged the
deadline set by the government of 21 October.
any delay in finishing the expansion work will be
undertaking from the beginning have also been
Some reports say the new sets of locks
a matter of months. However, this is optimistic:
much more severe than expected. Workers’
may not be tested until April 2015, although
• Deficiencies in the quality of the concrete
considerable bargaining power was reflected in
the situation will not be entirely clear for
mix to be used in the two sets of locks,
the government’s decision in January to inter-
several months.
which have slowed down the entire project,
vene in a dispute and decree a 17% increase
were unforeseen, and have led to some
in the minimum pay rate, after 6,000 workers
questioning of the government’s decision
downed tools for six days. However, this
What next?
to accept the lowest bid for the work
initiative has not stopped conflicts:
The Canal administration is putting pressure on
submitted by the Grupo Unidos por el
• In March, a group of workers announced
the contractors to make up delays, with threats
Canal (GUPCSA) consortium, made up of
an indefinite strike over the demand for
of financial penalties of up to $54m if targets are
Spanish, Italian, Belgian and Panamanian
a new collective agreement that would
missed. It will also need to mediate in a continu-
companies. GUPCSA won the locks con-
have included an increase in overtime pay,
ing series of labour conflicts, which continue to
tract in July 2009 with a bid $36m lower
which was called off when the workers’
slow the project.
than ACP’s own estimate.
union, Suntrac, negotiated an agreement
ork on expanding the capacity of
• Pouring the concrete should have begun
with GUPCSA executives.
last January, but this operation was delayed
• Over 4,000 walked out this month in protest
Impact
until July. GUPCSA now says that it is bring-
at poor safety conditions after the death of
• Official statements that delays in finishing
ing in more equipment and skilled techni-
a worker.
expansion work will be a matter of months
cians to recover the lost time.The ACP says
are optimistic.
it has asked the consortium several times for an updated timetable for completion of
Economic concerns
this work, presumably without any result.
Panama is highly dependent on world market
Delays in completion of the expansion project
conditions for continuing growth, but so far has
would not be fatal and some US Gulf and East
emerged relatively unscathed from the global
Coast port authorities scrambling to upgrade
economic crisis. Cargo volumes handled by
their facilities to receive Post-Panamax ships
the Canal reached a record 322 million tonnes
may welcome them – as well as those on the
in 2011, according to Aleman, which expects
West Coast seeking to remain competitive with
around 330 million tonnes to pass through the
the Canal. However, they would undermine
waterway this year.
• Government bargaining power is unlikely fully to overcome labour conflicts that have dogged the undertaking. • Corruption allegations risk undermining foreign investor confidence.
“Delays in completion of the expansion project would not be fatal”
48
the businesslike image of the government of
As far as Panama is concerned, continuing
President Ricardo Martinelli, which has based
dynamism in the Chinese economy and some
its growth strategy on turning Panama into
sound economic performances in Latin America
the
largely have offset low growth in the US and
logistics
hub
of
the
Americas
and
theBaltic Summer 2012 www.thebaltic.com
Oxford Analytica • One recent outbreak involved dockers
Rome of an Italian businessman, Valter Lavitola,
employed by the Panama Ports Company
who has close links to former Prime Minister
Nonetheless, some aspects of the economy
at the ports of Balboa and Cristobal, who
Silvio Berlusconi – who had been close to
are giving cause for concern (see Panama:
only agreed to call off a three-day strike and
Martinelli.
Martinelli faces long-term challenges – 8
enter negotiations with employers after the
• Italian prosecutors have linked Martinelli’s
December, 2011):
government agreed to arbitrate in the dispute.
name, along with that of the mayor of
Europe (see Panama: Growth has minimal downside risk – 13 May, 2011).
• Rising inflation has been a factor behind
Panama City, former Interior Minister Roxana
growing labour discontent. Panama has no
Mendez, to bribes that Italian companies
central bank and Martinelli has conceded
Corruption allegations
allegedly paid through Lavitola to secure
that the government is virtually powerless to
In addition to problems with Canal expan-
a number of contracts awarded by the
do anything to control consumer price rises,
sion and rising prices, the latest in a series
which were 6.3% higher in March than a
of corruption scandals, which have seriously
• These included one for the construction of
year earlier, according to official figures. The
dented Martinelli’s initial popularity, has embar-
four prisons for 176 million dollars – which
government consequently has been forced
rassing global ramifications (see Panama:
eventually fell through – and another for the
to intervene in conflicts over wage demands
Government faces corruption pressure –
supply of 250 million dollars’ worth of radars
as they flare up.
8 August, 2011). It involves the recent arrest in
and helicopters by three companies belong-
Panamanian government.
ing to the Italian Finmeccanica group. Martinelli has denied improper involvement with Lavitola, saying that he was merely a facilitator of his relationship with Berlusconi, and has accused the Panamanian opposition press, notably La Prensa, of conspiring to undermine his
government
and
damage
Panama’s
international image by reproducing information published in Italian newspapers. For its part, La Prensa has quoted evidence from former Italian Foreign Minister Franco Frattini that Lavitola and Martinelli were extremely close. The Panamanian leader, who insists that Lavitola had no business interests in Panama, was forced to send the acting foreign minister, Jose Raul Mulino, to Italy to clarify matters. As Martinelli was elected on an anti-corruption platform, his alleged involvement in a succession of scandals is deeply embarrassing. Implications could be far-reaching. Foreign investment has been pouring in to Panama’s booming economy, and Martinelli himself has been praised on trips to Europe and elsewhere. However, following the arrest of Lavitola he felt obliged to cancel a scheduled trip to a World Economic Forum meeting in Mexico, where he had been due to meet prospective investors.
© Oxford Analytica 2012. All rights reserved. No duplication or transmission of this document is permitted without the written consent of Oxford Analytica. Contact us: www.oxan.com/about/ contacts/ or call +44 1865 261 600 or in North America 1-800 952 7666 Panama is highly dependent on world market conditions for continuing growth
theBaltic Summer 2012 www.thebaltic.com
49
marsh.com
SUPPORTING THE RAPIDLY DEVELOPING MARITIME SECURITY SECTOR Rapid market developments in the growing maritime security industry have led to increasingly divergent insurance requirements. To meet the needs of the sector, Marsh, a global leader in insurance broking and risk management, has launched a new insurance facility that provides comprehensive insurance coverage for the Private Maritime Security Company (PMSC) industry.
Developed to support the requirements of the Security Association for the Maritime Industry (SAMI), Marsh’s new facility meets the insurance recommendations of the International Maritime Organization (IMO) circular 1405 and also complies with the insurance requirements of Guardcon.
In the United Kingdom, Marsh Ltd. is authorised and regulated by the Financial Services Authority for insurance mediation activities only. Copyright Š 2011 Marsh Ltd. All rights
Partnering for impactSM Marsh is one of the Marsh & McLennan Companies, together with Guy Carpenter, Mercer, and Oliver Wyman.
Marine SAMI Advert Half Page_2012_124x178_FINAL.indd 1
30/03/2012 14:35:38
Maritime security
Counting the cost of piracy With incidents on the increase in West Africa, what are the steps being taken to counteract piracy?
O
ne hundred and two incidents of
Somalia continues to dominate figures, with
Elsewhere, there has been a noticeable
piracy and armed robbery have been
43 attacks, including the hijacking of nine ves-
increase in the number of armed robbery attacks
reported for the first quarter of 2012,
sels and the taking hostage of 144 crew. Four
in the Indonesian archipelago, up from five in the
with dangerously increasing num-
dhows and a fishing vessel, softer targets that
first quarter of 2011 to 18 in 2012.
bers in West African waters, according to figures
make for ideal motherships, were among the
The report shows that all types of ves-
released in April International Maritime Bureau’s
highjacked vessels. Somali pirates were also
sels in Indonesia have been targeted and that
(IMB) global piracy report.
responsible for the hijacking of a Panamax bulk
the attacks aimed at theft from those ves-
carrier at the end of March.
sels. Fifteen vessels were boarded – 13 while
In total, 11 vessels were reported hijacked worldwide, with 212 crew members taken hos-
But while the number of 2012 incidents and
anchored, one while berthed and one underway.
tage and four crew killed. A further 45 vessels
hijackings are less than reports for the same
Five crew members were taken hostage overall.
were boarded, with 32 attempted attacks and
period in 2011 (97 incidents, 16 hijackings), it
14 vessels fired upon – the latter all attributed to
is unlikely that the threat of Somali piracy will
either Somali or Nigerian pirates.
diminish in the short to medium term unless
GUARDCON contract
further actions are taken.
BIMCO’s long awaited GUARDCON contract
Ten reports were received from Nigeria at the beginning of 2012, equalling the same
The report attributes the reduction in over-
was published at the end of March providing
number reported in Nigeria for the whole of last
all attacks to the disruptive actions and pre-
a standard contract for the employment of
year. A further attack in neighbouring Benin has
emptive strikes by the navies in the region,
armed guards on vessels transiting piracy
also been attributed to Nigerian pirates. The
which disrupted numerous pirate action groups,
danger zones.
reports include the hijackings of one product and
emphasising the importance of the navies in
one chemical tanker, between which 42 crew
both deterring and combating Somali piracy. Management
time security companies (PMSC) with a clearly
“Nigerian piracy is increasing in incidence and
Practices and the increasing use of privately
worded and comprehensive standard contract
extending in range,” said Pottengal Mukundan,
contracted armed security personnel (PCASP)
to govern the employment and use of secu-
Director of the IMB Piracy Reporting Centre,
also contributed to the decrease in the hijack-
rity guards, with or without firearms, on board
which has been monitoring piracy worldwide
ings. In the incidents reported to the Piracy
merchant vessels. While BIMCO would not like
since 1991. “At least six of the 11 reported inci-
Reporting Centre, more vessels with PCASP
to see the use of armed security guards on
dents in Nigeria occurred at distances greater
have been reported in the first quarter than
ships becoming institutionalised, it recognises
than 70 nautical miles from the coast, which
those not armed.
that while the industry awaits a more perma-
members were taken hostage.
suggests that fishing vessels are being used as motherships to attack shipping further afield.”
The
application
of
Best
This brand new contract has been developed to provide ship owners and private mari-
Until a comprehensive legal framework is in place, however, owners and masters should
nent, long-term solution, armed guards currently provide an effective deterrent to piracy attacks.
Two crew members were killed when armed
make sure that they follow the International
BIMCO’s Chief Officer Legal and Contractual
pirates boarded their bulk carrier 110 nautical
Maritime Organization and industry guidelines on
Affairs Grant Hunter said: “In response to ship
miles off Lagos, Nigeria.
the carriage of PCASP.
owners’ increasing demand for security services,
Attacks in Nigerian coastal waters have
“The EU announcement to expand its anti-
an ever-growing number of private maritime
further resulted in at least three crew kidnapped
piracy mission to target pirates ashore is another
security companies have entered the market to
from their anchored vessel.
welcome move that could further threaten the
meet that demand.
“While the number of reported incidents in
Somali piracy model,” Mukundan said.
“In the absence of a standard contract for
Nigeria is still less than Somalia, and hijacked
As of 31 March 2012, suspected Somali
these services, ship owners and their P&I Clubs
vessels are under control of the pirates for days
pirates still held 15 vessels with 253 crew mem-
are currently faced with the difficult and time
rather than months, the level of violence against
bers as hostages, with an additional 49 crew
consuming task of assessing large numbers of
crew is dangerously high,” added Mukundan.
members being held hostage on land.
contracts from these security companies, all with
theBaltic Summer 2012 www.thebaltic.com
51
Corporate viewpoint Marsh
Security counsel The Marsh SAMI facility brings administrative simplicity – and peace of mind for PMSCs
M
any shipowners are concerned that their
to provide a solution for these various industry
together a jigsaw of policies written independently
Private Maritime Security Companies
groups. From the outset, Marsh focused on
by different insurers nor do they have to try to
(PMSCs) may have inadequate insurance to pay
creating a comprehensive product that not only
work out whether the EL and the MEL dovetail.
for any problems they may bring to a transit.
provides PMSCs with the insurance provision
They can now demonstrate a common cover
Shipowners need to know that their PMSC can
they need, but the inherent reassurances
and enjoy the financial advantages of being part
stand behind a hold-harmless, pay for damage
and comfort leading shipowners require from
of a “bulk buying” group.
they cause and care for their people, regardless
prospective security providers. For many, Marsh’s facility will be a welcome
of the reason.
This is good news for the industry and will help PMSCs continue to play a vital role in ensuring safety at sea for our shipping fleets.
Conditions in the maritime security industry
development, as there are a number of PMSCs
have changed rapidly in the past 12 months.
that are barely clad in insurance terms through
For example, new flag state requirements mean
gaps in their policies and gaps between policies.
that today unarmed escorts are an exception,
Those that begin to fail audits, find themselves
For more information, contact:
despite being commonplace one year ago. In
struggling to win business, or face a suit for
Nick Roscoe at nicholas.roscoe@marsh.com
response, various organisations that support
underinsurance now have an alternative that has
Mark Jonas at mark.jonas@marsh.com
shipowners and PMSCs have sought to
been designed to avoid these pitfalls.
establish best practice in a number of fields,
The Marsh SAMI facility brings administrative simplicity. The PMSCs no longer have to patch
including insurance. Valuable contributions have been made by the Security Association for the Maritime Industry (SAMI), the International Maritime Organisation (IMO), the Baltic and International Maritime Council (BIMCO), insurers and P&I Clubs and a number of other organisations, which include many of the PMSCs themselves. The BIMCO ‘Guardcon’ insurance conditions consolidate many of the conclusions of these initiatives.
However,
an
insurance
clause
can never be as comprehensive as a policy and a PMSC intent on carrying out a “tick box exercise” against these clauses can potentially leave themselves and their client exposed. While, at times, shipowners may fail to identify the exclusions and limitations that underwriters have imposed, there are greater dangers arising from the different interpretations that may be applied. In the context of Guardcon, questions that will be addressed differently in different policies
include
whether
the
costs
of
medical evacuation are included in “medical expenses and repatriation costs”; when the employers’ liability cover should become effective and cease; what a “reasonable deductible” is; and which clause insures the PMSC for their negligent advice that leads to a kidnap and ransom situation. Marsh’s SAMI facility, developed with a number of the key stakeholders, is designed
52
Nick Roscoe
theBaltic Summer 2012 www.thebaltic.com
Maritime security varying terms and conditions. GUARDCON’s
the solution may turn out to be the problem. This
last year. The number of successful hijackings
objective is to create a contractual benchmark
issue was highlighted by the shooting of two
fell last year, but eight people were killed and
for the employment of security services so that
Indian fishermen by Italian security personnel
hostages were held for 178 days on average.
minimum levels of insurance cover for PMSCs
on the Enrica Lexie. GUARDCON, he said, was
While the number of attacks is increasing, the
are established and that adequate safeguards
not intended to be a substitute for the proper
number of successful hijackings has fallen and
are put in place to ensure that liabilities and
exercise of due diligence when selecting a
there has been an increase in violence against
responsibilities are properly addressed and that
security company.
the crew. At the time of the presentation, there were 277 maritime companies in the security
all necessary permits and licenses are obtained.”
business, with 60% based in the UK.
According to BIMCO Deputy Secretary General, Søren Larsen: “GUARDCON has been
Vulnerable groups
With the growth in the number of maritime
drafted in just a little over three months by a
According to Sven Hanson, director of the PGS
security companies at the moment, it is worth
small group of experts drawn from ship own-
Group, when researching who the vulnerable
looking into the management of the company
ers, underwriters, P&I Clubs and lawyers with
people were in piracy attacks, maritime security
and what their experience is. “There are manag-
first-hand experience of working with con-
providers were one of the vulnerable groups. He
ers of security companies out there without any
tracts for security services. The speed at
told Maritime London delegates: “If you under-
experience of security at all. That is something to
which GUARDCON has been drafted is a con-
stand the nuances involved in the reputational
be concerned about,” said Hanson.
siderable credit to the drafting group whose
risk and the use of force, the very last that you
While the use of armed guards on ships has
members devoted many long hours free of
want to do is engage with lethal force a pirate on
been successful in avoiding hostage-taking,
charge to the project.”
the open sea”.
there is always going to be the test case and the
The arrival of contractual guidelines on the
What is needed is to project strength and
Italian incident is one “genre of a test case”, he
use of armed guards on vessels has come
have systems and operating procedures in place
said. The possibility that pirates will adapt their
at a time when the number of security firms
to deter the pirates, he said. “Strength and guile”
tactics, techniques and procedures also needs
employed by the industry is multiplying rap-
was the name of the game, as well as a projec-
to be considered, he said, and whether security
idly. Introducing a presentation organised by
tion of force and “a demonstration that you have
firms are capable of emergency response plan-
Maritime London, Stephenson Harwood partner
an intent to protect the vessel, while having the
ning.
Alex Davis said it may be that the placing of
guile to know that lethal force is the last thing
armed guards on merchant vessels will provide
you want to use.”
You need people who understand the tactical issues, Hanson said, but also people who
There were 237 Somali attacks last year, up
understand the reputational risks involved. The
While governments have given varying
from 219 in 2010. The largest ransom was paid
security person needs to understand “that the
degrees of support to the placing of armed
last year, which was $13.5m, with the average
last thing he wants to do is shoot a pirate dead
guards on vessels, there is also growing concern
ransom jumping 25% to an average of $5m
on a skiff. He is representing a multinational
a telling blow in the fight against piracy.
© IMO
Djibouti Code: IMO’s counter piracy programme
theBaltic Summer 2012 www.thebaltic.com
53
Expertise and understanding I
n 1980 RFIB set up business in the heart of the City of London, personal computers were
launched, Jimmy Carter authorised legislation giving $1.5 billion in loans to bail out Chrysler Corporation, and Björn Borg won his fifth
consecutive Wimbledon. The world has changed a lot since then and so has RFIB. But one thing has remained constant – RFIB’s commitment to build business through personal relationships, listening to clients and building a deeper understanding of their requirements. The opportunities and challenges that businesses face have never been greater than they are today. Factors such as globalisation, the regulatory environment and the pace of emerging technologies have all contributed to the changing environment in which RFIB now operates. As a successful and growing
together the capabilities of specialist service
However, the value of quality insurance has
business, RFIB works with clients of all sizes
teams, and drawing on networks and alliances,
to be matched by the quality of the insurance
across all geographies and markets to deliver
RFIB creates competitive and robust solutions
broker’s claims service. Its claims service marks
tailored risk solutions that meet and adapt to
for our clients. Solutions are anchored in know-
RFIB as a foremost marine insurance broker. It
their business objectives
how and delivered by a personal service.
has a team of qualified staff who offer a pro-
An established Lloyd’s broker with an
It is RFIB’s people, approach and capabilities
active claims service and can exercise influence
international network, RFIB is a British business.
that has earned the company enduring
to ensure prompt settlement of claims to clients
The company handles all classes of insurance
relationships worldwide with insurance and
in the shortest possible time.
and reinsurance broking together with risk
reinsurance companies, Lloyd’s syndicates and
management advisory services. By bringing
corporate clients.
Since 2008, there have been 167 reported hijackings of merchant ships and 78 reported
It is a proper analysis
crew fatalities. Periods of negotiations have been
of the risks to which an
extended and the sums paid for the release of
individual shipowner is
these vessels have been increasing.
exposed that marks the
RFIB has been at the forefront in assisting
personal care that RFIB
ship-owners against these potential perils. With
takes in ensuring that a
unrivalled access to the major Lloyd’s of London
client is comfortable with
syndicates specialising in this class and long-
the risks that are insured
standing relationships with some of the most
and those that the client
established maritime security companies, RFIB
chooses not to cover.
can facilitate the requirements of all shipowners.
RFIB
has
standing
long-
relationships
From single transits to longer multi transit arrangements,
RFIB
has
the
expertise,
with all of the major
understanding and client focus that sets it apart
international commercial
from other insurance brokers.
and
mutual
marine
insurers – including the P&I
clubs
they
are
–
whether
in
London,
Scandinavia, elsewhere
For more information, contact:
in Europe, the US and
RFIB Group Limited
the Pacific Basin. RFIB publishes
its
well-
respected
P&I
Report
annually,
which
gives
Marine: Nigel Russell – direct tel: +44 20 3004 2861 Email: nigel.russell@rfib.co.uk
a comprehensive analysis of this important insurance
K&R:
sector
Shane Ruddy – direct tel: + 44 20 7621 8359
for
shipowners
and charterers.
Email: shane.ruddy@rfib.co.uk
Maritime security company and their reputational risk and liability.”
but ultimately those costs will be passed on to
Selection and relevant maritime experience are
the end user”.
RFIB also does write land-based K&R policies, for individuals, for example in Latin America.
two issues, also the ability to rise above any
He cites as an example the case of the
It has been writing K&R for the maritime indus-
experience gained in the military, Hanson said.
Pacific Adventurer in Australia, where pressure
try for the last three years. Last year was the
Skills may also not be up to date: “If you haven’t
was put on owners the Swire Group to pay for
firm’s busiest year and this year has been a
picked up a weapon for five years, you will have
the cost of the clean up.
little quieter, perhaps because of the use of
skill fade”. The aim, he said was to get the
One of the problems, he suggests, is that
armed guards on vessels and also the advent of
pirates to turn round perhaps using laser target-
the shipping industry does not have one voice.
BMP 4 outlining best practices for those
ing rather than indiscriminate shooting over the
The logic of liability being limited is to make the
transiting the danger zones.
side of the vessel with an AK47.
environment one in which shipowners can trade
Commenting on the quality of armed guard
Another issue he raised is the fact that
reasonably, he said. Countries with a coastline
operations Ruddy said insurers will not agree to
the ship’s master is in charge and the secu-
benefit enormously from shipping, with the
insure all vessels, particularly if the freeboard or
rity personnel will have to take orders from him.
pendulum moving very much in the direction
speed is too low, but if they do offer coverage,
Movement of weapons around the world and
of “governments riding roughshod over inter-
they will offer a discount if there is a reputa-
the necessary licencing involved is another issue
national conventions”. In the case of the Rena,
ble security company on board. Underwriters
to be considered as is vetting of personnel. “It
costs are liable to be over $100m. He feels there
ensure that they have the required licences
takes a long time to vet every individual.”
must be one voice with political clout to take the
and therefore get on an approved list with the
industry’s part.
underwriters, so there is no incentive for owners
On the kidnap and ransom side, director of
to use a company that is not on the approved
Kidnap, ransom and liability
wholesale and direct Shane Ruddy is respon-
list because they will not get the discount,
Kidnap and ransom cover is evidently a key
sible for placing insurance for single transit
he explained.
feature of the current shipping environment,
vessels going through the danger areas, or multi
Eric Ashley Conway UK Managing Director
notably, but not exclusively, off the Somali coast.
transit deals for shipping companies against
of Protection Vessels International (PVI) said
RFIB was set up in 1980 and now, among its
piracy attacks.
“the maritime security industry is overseen by
other products, provides K&R cover to the mari-
RFIB does not get involved in the ransom
a patchwork of national, supranational and
time industry. It has also been building its insur-
negotiations, as underwriters put this work in
industry-led guidance, regulation and legislation.
ance side and Nigel Russell director, marine, has
the hands of specialist firms. There have been
As a result there are real concerns about widely
a number of concerns in this respect.
ransoms that have gone over the $10m mark,
divergent standards in the industry. The quality
The point Russell makes relates to liability.
but typically ransoms are not of that size, Ruddy
of service provision can vary from a highly pro-
There are a number of conventions that deal with
said, and they tend to be around the $5m region.
fessional, vetted, regulated and trained compa-
this including those covering pollution and wreck
“The insurances that we can easily offer are a
ny, to an opportunistic start-up that chooses not
removal. However, while governments are happy
$5m sum insured but we offer up to $10m. It
to comply with any existing standard and offers
to sign up to the conventions, when an incident
all comes back to capacity and risk appetite for
low cost maritime security to hard-pressedship-
happens on their own doorstep they put all sorts
underwriters.” To put together a $10m ransom,
owners.
of pressure on an owner in order to make sure
one would need a consortium as no single
“The IMO’s Intersessional Maritime Security
that they and their insurers pick up the whole bill.
underwriter would take on the risk, he explained.
and Piracy Working Group of the Maritime
“In the longer term, that is only going to
Associated costs would be added on to the
Safety Committee’s guidance and recommenda-
increase the cost of liability insurance, which is
ransom being typically about $2m-$2.5m. RFIB
tions on the use of Privately Contracted Armed
not only a problem for the ship owning industry,
places all its risk in the Lloyd’s market.
Security Personnel – 1405 and 1406 – represents progress However, until agreed, regulated and enforceable standards are brought in across the board, shipowners will still need to conduct significant due diligence and vetting to ensure the safety of their crews and vessels is in the best hands”. According to Peter Cook of the Security Association for the Maritime Industry (SAMI), the total cost to the maritime industry of Somali piracy last year was $5.3bn. Speaking at the International Parcel Tankers Association chemical and product tankers event organised by Navigate Events in March, Cook was quoting from the Oceans Beyond Piracy 2011 report. Costs included : • Increased speed $2.713bn • Security equipment and PMSC $1.112bn • Insurance $635m • Re-routing of ships $583m
© IMO
• Ransoms $160m SAMI estimates that there are more than 200 private military security companies in the Indian Ocean
theBaltic Summer 2012 www.thebaltic.com
• Labour $195m.
55
Risk management
Risky business Management of risk is central to the shipping industry, whether it is credit risk, protecting against rising fuel prices or the challenge of new environmental legislation
R
isk for some is an opportunity for oth-
incident and if this fails to satisfy them, or
on any casualty and the potential duty down the
ers, Georgi Slavov, managing direc-
does not identify causes, contributory factors
line to disclose any such document to opposing
tor of global research at ICAP, told
or measures to ensure that the incident does
parties – such as cargo claimants – in any
the PYNDA conference in April. Sharp
not reoccur, the oil major may withdraw
related litigation.”
deleveraging of the financial system has taken
“With practical and prudent steps any
chartering approval.
place in the years since the market collapse.
Hill Dickinson partner Ian Maclean says in
post incident report produced will be clear
Excessive debts combined with deleverag-
the newsletter that “in-house risk management
and accurate, but carefully worked so that it
ing mean less funds for lending, Slavov said.
plays a vital role in reconciling what can be
satisfies managerial and commercial require-
Lending is scarce and practically unavailable
conflicting obligations: the need to satisfy the oil
ments without laying the owner/operator open to
and the industry is beginning to feel the effects
majors request for a detail post-incident report
detrimental consequence should that docu-
of this. There are challenges facing the industry going forward, he said, including the issue of climate change and global urbanisation – excessive debt is a risk. Protectionism is rising, “it is a possibility in difficult markets”. A “hard landing” in China he also considered as a risk, although an unlikely one. Sanctions, higher energy and food prices were also to be considered. Climate change will also have its role to play, notably with phenomena like La Nina, which will cause above average rainful in Australia and Indonesia, with consequent disruption to the coal and iron ore markets. Another form of risk management highlighted by law firm Hill Dickinson is that of reporting to oil majors following a casualty. As the company reports in its online newsletter covering marine, trade and energy issues, following a casualty, an oil major will expect the owner or operator to provide them with a detailed report of the
56
Georgi Slavov, managing director of global research at ICAP
theBaltic Summer 2012 www.thebaltic.com
Risk management ment become subject to disclosure in subsequent litigation,” Maclean warns. Meanwhile, announced that its
it suite
Platts
in
February
had
expanded
of
European
forward-dated assessments oil
and
ucts, than
price for
crude
refined
prod-
adding 1,100
new
more data
points to more than 40 forward curves. The launch of the Platts Valuation Hub means that instead of just being a provider of the risk data “we are also providing companies with the team of people who will do the valuations of their transactions. If a shipping company knows it wants to manage its risk and can’t hire the team to do it for it, it can outsource that work to us,” explains
Paul Waine
Paul Waine, director of risk purported to manage the upside risk, but where
side of it, but understanding that if the regulatory
Advising on how to set up a risk manage-
the market has fallen leaving them locked in to
rules are put in place that a bank undertaking
ment operation is something Platts can do with
a price to which they had not understood they
a hedge for a company which isn’t in a central
a small team, Waine said.
were locking in.
clearing arrangement would have to hold more
data services.
capital and therefore would charge more for
The ship operator looking for that advice
In terms of hedging market risk, it is a ques-
would build that into their own organisation
tion of identifying a suitable counterparty to
going forward. We always like to start with the
hedge that risk: “One of the things we would be
One of the concerns is that if it is more expen-
governance right from the top, that is a very
doing would be to identify that the credit issues
sive to enter into these transactions, it therefore
important message with any risk management
should be thought about.”
makes it less desirable to enter into them and
the transaction.
activity that gets into derivatives, whether physi-
This would be by guiding companies in
companies remain unhedged. One problem is
cal, futures, forwards, swaps or options and
the right documentation to use and also the
the fact that the industry is dealing with a situ-
be able to advise a firm on the effective way
way
ation that has not yet been fully defined, and a
to manage their risk, whatever risk profile the
that documentation.
business has got.
to
structure
credit
protection
into
The emphasis of Platts’ product is on how
regulatory regime whose implementation has been delayed, and which may well change again before it is finally implemented.
This service is tailored to the individual firm
to manage the market risk. “If you manage
and Platts can offer support through the initial
market risk and convert it blindly to credit risk,
stages of hedging activity and make sure it is
you have not done a very good job, so you need
embedded in the business, in a way in which it
to understand how to handle the credit aspects
Under pressure
will be successful.
of the transaction as well which for some com-
There has been a lot of pressure from the
panies can be very small, but for others can be
regulators and the government towards clearing
very problematic.”
transactions, particularly in the US and Europe.
Bad experience
Impact of new regulations has also to be
The question remains as to whether this will
Platts has been involved with a number of firms
considered, including the Dodd Frank rules in
that have had bad hedging experiences in the
the US and the European Market Infrastructure
Cost is one issue, which might put people
past and who want to understand why they
Regulation (EMIR) rules in Europe, which are
off, meaning they may undertake transactions
haven’t worked out.
bring the benefits that regulators believe it will.
aimed at financial transactions, but would require
outside the relevant regulatory regimes, or not
One of the issues is that companies might
in a lot of cases, derivatives to be put in place to
undertake the transaction at all .
be taking and managing risks that they do not
hedge physical oil transactions which might have
fully understand.
to be cleared centrally.
Platts has seen a this phenomenon in the oil
It is question of understanding that process
sector, notably in the transportation of fuel where
and the cost benefits of entering into a centrally
companies have undertaken transactions which
cleared operation as opposed to keeping out-
theBaltic Summer 2012 www.thebaltic.com
Waine warned: “Neither of those is desirable because they won’t be managing their risk, which might lead to more shipping companies going bust.”
57
Corporate viewpoint Rightship
RightShip One area of concern is RightShip’s independence – can people have faith in your system when you are owned by three major dry bulk shippers?
industry know-how to maintain and apply it.
Originally RightShip was formed to pool the
advice, and get the same level of support and
vetting resources and expertise of BHP Billiton
information as high volume charterers who vet
and Rio Tinto. Soon other shippers asked us to
5,000+ vessels per annum.
By offering RightShip as a third party service, we give organisations of all sizes access to a very sophisticated system and group of experts. If you think about it, a one-person start up can search for any vessel in the system, or call for
vet ships for them as a third-party provider, and four years later Cargill became an equal one-third owner.
Warwick Norman
R
Is the star rating system a bit simplistic?
RightShip would not exist if we could not
The one to five star rating is a quick summary of a
operate independently to equally support the
huge amount of detailed data, across more than
competing interests of our owners. And our
50 risk factors, which has been analysed and
third party business has grown bigger and more
processed by a sophisticated risk algorithm. So
diverse every year. As large as our owners’
while the rating might look simple, it represents a
shipping operations are, they now represent
complex evaluation of risk. We also present the
less than 50% of our vetting activity. That says
data behind the rating, to encourage users to
to me that around 200 customer organisations
understand the risks.
are pleased with the benefits they get out
But the most important thing to say about
of subscribing and are comfortable with our
the rating system is that it is not the end of the
independence.
story. It’s a signpost along the way. We will look,
ightShip has been welcomed across
We see a common acknowledgement among
with our customer, at what has led to a ship
the industry for its comprehensive,
our shareholders and our customers that a
being rated perhaps two stars, and often with
easy-to-use online vessel evaluations,
market with higher standards, where fewer low
updated information we may decide the risk is
24/7 phone and e-mail vetting sup-
cost-high risk vessels are employed, is a healthier
manageable and the ship is suitable for the task.
port from experienced maritime professionals.
market for them all to operate in.
We have all worked in commercial shipping operations, at sea and onshore, and our
Its customer base has grown and widened
Is RightShip suitable for smaller organisations?
customers know the goal of our recommendation
has recently launched an environmental rating to complement its existing risk rating and bring
A system like this is expensive and difficult to
the end, the decision is in their hands.
sustainability to the forefront of the selection
create and maintain. We developed the online
It’s getting the right balance and being both
process.
system and enhance it regularly, and we have
systematic and pragmatic. The human element
built a pool of people with the experience and
is vital in getting the best commercial result. But
every year in its decade of operations, and it
But the rise of RightShip has also been accompanied – at times, and in some quarters – by confusion and even suspicion. CEO Warwick Norman says the vetting agency takes that response seriously and works hard to be transparent about its operations, its motives and its plans.
RightShip continues to be a strong commercial success – do you need to worry about your critics? RightShip has always had the ultimate aim of raising shipping quality standards worldwide. Clearly that goal needs industry players working in the same direction, so we listen and respond openly, and tell anyone who is willing to listen how the system works.
58
theBaltic Summer 2012 www.thebaltic.com
is the best commercial outcome for them. And, in
Corporate viewpoint Rightship using a rigorous, independent vetting system means you should get the same decisions, whether it’s 10.00 on Monday morning or 16.30 Friday afternoon, whoever is using the system and whatever their personal level of expertise.
Isn’t your system tough on owners and operators? It’s fair to say some owners have had reservations, although most feel more comfortable when we explain the system. Our vetting is designed to target vessels – and by extension owners and operators who offer them – that carry high risk and do not perform safely and reliably. We do not apologise for that. The flipside is that our approach rewards and gives incentives to owners and operators who invest in their ships, demonstrate good PSC and safety performance, associate their vessels with better-performing flags and class societies and/or link with reputable organisations like AUSMEPA and Green Award. We are always ready to give owners and operators advice and information about how to use RightShip as an opportunity to achieve those commercial rewards. That offer is open, not just to owners and operators who are customers
‘approval’ because our system vets each ship
It just makes sense for organisations to set a
and use our system to benchmark their vessels’
from scratch each time it’s nominated. New
common approach to marine risk management
performance, but to all owners and operators.
data is added every day so a ship’s rating may
across their business, not to scrutinise one type
The FAQs on www.rightship.com are a good
change from one nomination to another – which
of vessel more rigorously than another.
place to start.
of course is good news for owners, flags, class
How reliable is the data? And how can owners check and fix errors?
deficiencies and minimise risks. Also, customers
How does the environmental rating work?
can apply their own vetting criteria to determine
Similar to the risk rating, it analyses a range of
a ship’s suitability, which may have nothing to do
detailed data to give users a rating and other
RightShip acquires reliable data from many
with the Rightship risk rating – for example, ports
information they can use in vessel selection
independent sources, including IHS Fairplay,
and terminals may set specific beam or draft limits
and benchmarking. In this case the data is
casualty data, Port State Control and terminal
or receivers may have age or other restrictions.
based on environmental performance, so it
societies and others who are acting to remedy
performance information. Owners who are
The simplest answer is that owners make
customers can check the system any time,
their ships more attractive to our customers by
while other owners may have concerns raised
demonstrating good performance, associating
We offer a metric called the Existing Vessel
by charterers or other customers. We encourage
with higher-performing flags and class societies
Design Index, or EVDI, based on the EEDI for new
owners, whether customers or not, to give us
and attending thoroughly and quickly to any
ships but made more fair and reliable for vessels
more data if they wish and tell us if they think
identified deficiency. We’re happy to give owners
already operating. RightShip subscribers and
anything is incorrect.
more detailed advice any time.
others (through the www.shippingefficiency.org
helps customers meet sustainability policies and targets.
site) can use it to measure individual ships, and
How do owners get their ships recommended or ‘approved’ by RightShip?
Isn’t RightShip really designed just for dry bulk ships?
subscribers can also compare and benchmark
That was the original driver. When we started
our GHG Emissions Rating.
Remember that our rating is a signpost, not an
there were systems for tanker vetting, but on
Early days, but we’re pleased with the level
inflexible pass or fail mark. Our recommendation
the dry side there was no easy way of collecting
of customer interest in using these metrics. Of
comes down to whether the user, with our
the disaggregated data that was all over the
course, engine efficiency and bunker costs were
advice, believes the identified risks have been
world. However, we’ve always vetted tankers
already a focus in vessel selection decisions and
addressed or can be managed. A higher-rated
as well, adding value to existing regimes for our
charterparty rates, so users value data to support
ship is likely to be accepted more readily than a
customers, and are pleased to provide vetting as
those decisions.
lower-rated one, but, as mentioned previously,
a third party contractor under the most recent
This is a growing area of demand for data,
the lower-rated ship can be acceptable on further
OCIMF guidelines. In fact, RightShip’s online
advice and support and we continue to talk with
investigation, possibly including an inspection.
vets and inspections for tankers have both been
customers, peak bodies, regulators and other
growing significantly over recent years.
industry organisations about our system.
It’s also more complicated than a one-off
theBaltic Summer 2012 www.thebaltic.com
ships based on relative energy efficiency using
59
Shipbuilding
Backs to the future Developments in ice class ships have led to new ‘Stern First Ice Class’ rules. Plus: cuts in cruise industry orders and eco-tankers
R
ecent orders for ice-going ships have
LR’s Technical Manager for New Construction
seen an increased trend in the use
in Asia.
of podded propulsion systems and
The Stern First Ice Class rules offer the
Important aspects of the rule development effort for Stern First Ice Class were the validation of the rules with industry by leading icebreaking
following key interpretations:
tanker designers, key regulators and operators,
ing in ice, providing a unique capability to go
• The ship is considered as a bow first and
and the confirmation of the interpretation of reg-
astern, or stern first, so improving icebreaking
stern first vessel for application of ice class
ulatory and other rule requirements, and valida-
and reducing ice resistance.
rule requirements for hull and machinery
tion of strength level for the hull and propulsion
Lloyd’s Register (LR) has been very involved
• It is considered as a stern first ship in addition
unit with a review of the current fleet of double
in the development and understanding of
to a bow first ship for application of naviga-
acting ships. This enabled the experience of
requirements for stern first in ice. The Mastera
tion related rules and regulations
all ice class ships to be built into the rule
azimuthing thrusters for ships navigat-
and Tempera – 106,000dwt Neste-owned, so-
• For all other rules and regulations the rule is
called Double Acting Tankers (DATS) were built
applied considering the ship as a bow first
to LR Class in 2002 and 2003 at Sumitomo.
ship only.”
development process. LR expects that more double-acting tankers will be employed in the Baltic. “If the
They regularly operate in the Baltic, stern first and independent from icebreakers in seasonal heavy ice conditions. In harsher conditions, tankers dedicated to all-year Arctic operations, such as Sovcomflot’s Mikhael Ulyanov and Kiril Lavrov vessels, are also double-acting vessels that sail stern first through ice. These tankers, dual classed by LR with Russian Maritime Register (RS), will be used to shuttle crude from the Prirazlomnoye platform in the Pechora Sea to the Belokamenka storage and offloading ship moored off Murmansk. Experiences from classing these tankers has contributed to the development of the first dedicated rule set for “Stern First Ice Class” ships, which was published by Lloyd’s Register in November 2011. Key elements of the Stern First Ice Class rules include the use of standard operational scenarios to provide designers with a basis for prescriptive rule application that are validated with designers and operators of stern first ice class ships. They include the provision of a framework for alternative load scenarios, where unusual operations are envisaged and the interpretation of international regulations and classification rules based upon past precedents,” explained Robert Tustin,
60
Lloyds Register expects more double-acting tankers in the Baltic to cope with severe ice conditions
theBaltic Summer 2012 www.thebaltic.com
Shipbuilding periodicity of severe ice in the Baltic leads
consequence order intake is not enough to feed
tend to be higher. “Today 15% of the fleet (in
to more frequent occurrence of heavy ice
the specialised European cruise shipbuilding
lower berths) is over 20 years old and major
conditions, then the existing fleet of adapted
industry, which is suffering, in some locations,
refits are needed to extend the commercial life,
conventional tankers with ice class may not
a severe lack of work, also because of the re-
while 28% are aged between 11-20 years offer-
be able to operate throughout the winter
entering of far east competitors.
ing good opportunities for major refurbishments
“The present decline in new-building demand
[and] new interiors or retrofits and upgrades to
“Last winter, the Neste tankers demonstrated
lets us foresee that orders will remain well below
new safety features or introduction of new tech-
the advantages of the double-acting concept
pre-crisis levels (6/8 ships per year compared to
nologies for energy savings and better emission
for severe ice conditions being able to continue
12 on yearly average in the period 2004-2007)
controls,” Antonini said.
navigation season,” a spokesperson said.
operations when large numbers of ships were stuck in heavy ice conditions with insufficient
“Ships’ size increase can only marginally
icebreakers available to break out and escort all
According to Antonini, the introduction of
the commercial shipping in the Gulf of Finland.
more efficient production methods, still offering
This situation could possibly actually worsen in
customers ships of the highest quality, is vital to
future as higher volumes of oil are to be shipped
survive in a highly competitive market.
through a major new oil exporting terminal at
“It is no ordinary work in terms of complexity and value, but European shipyards and
mitigate this gap.”
This means implementing concepts adopted
their suppliers are well equipped for this kind of work.”
Going green
in other industrial sectors, “such as the applica-
Recognising the ever-increasing demand for
tion of lean manufacturing principles developed
more fuel-efficient and environmentally friendly
by the automotive industry and to stimulate inno-
vessels, leading tanker owner/operator, AET has
Cruise control
vation both in production methods and products
taken delivery of the first of four “eco-design”
European shipyards are facing a tough time as
in our wide network of suppliers, since their
suezmax tankers. These are the first Suezmax
heavy investors in tonnage, such as the cruise
contribution to cruise ship production stands at
vessels to be owned by the company.
industry, have reined back on orders.
80% of the value chain”, he said
Ust Luga.”
Built by Samsung Heavy Industries in Korea,
Speaking at the Seatrade cruise conference
In coming years, he said, “the cruise industry
the first 157,000 dwt vessel was delivered and
in Miami in March, Fincantieri chairman Corrado
will be affected by the introduction of up-to-date
named Eagle San Antonio at a ceremony on
Antonini said: “Notwithstanding the big potential
technical solutions on new platforms developed
26 April 2012. The remaining three sister ships
of the cruise industry, for the time being lasting
in line with the differentiation targets and the
will be delivered during the course of this year.
uncertainty about the economic scenario and
green and safety standards – a big chance for
AET has made a significant investment in
financial constraints make cruise lines more
the renewal and revitalisation of the sector. This
these new “eco-design” vessels to maximise fuel
cautious about their investment policy. As a
process requires a strong collaboration between
efficiency and to minimise harmful emissions.
shipowners and shipyards
Innovations include hull form optimisation and
with their suppliers’ network.”
de-rating of the main engine power for low load
However, new designs that
optimisation. The application of energy saving
are compliant with the up-to-
devices include saver fins, a star propeller and
date rules and requirements,
rudder bulb which will substantially reduce the
involve additional content and
amount of fuel used.
Fincantieri chairman Corrado Antonini
complexity. Consequentially,
Speaking at the naming ceremony, AET pres-
ship costs may be expected
ident & ceo Hor Weng Yew said: “Our partner-
to increase.
ship with Samsung, coupled with an investment
Fincantieri is a front runner
in industry-leading technology and innovation,
to secure a share in STX OSV,
has resulted in a new generation of vessels that
although the European yard is
deliver significant environmental benefits and fuel
not commenting publicly on
savings. This is good for the environment, good
the issue. STX Group, which
for our customers and good for our business.
took over Aker Yards four
“Our customers demand that we offer a
years ago, has announced
flexible service for the transportation of their
plans to sell a 51% stake
cargoes. Moving into the suezmax sector allows
in STX OSV. If Fincantieri
us to deliver a more rounded and complete solu-
is the successful bidder, it
tion to the world’s oil companies,” he concluded.
will put it in a strong posi-
The new suezmax tankers are AET’s first
tion as the deep sea drilling
owned vessels of this size and represent a
market expands.
significant step in AET’s continuing move to
Antonini has also stressed
rejuvenate and re-shape its tanker fleet. Other
opportunities in the field of
recent innovations include the introduction of
refitting and revitalisation of
two newbuild DP shuttle tankers, two newly
ships. New ships in the cruise
converted specialist marine capture vessels, a
fleet are both bigger and con-
fleet of the world’s first purpose built lightering
siderably more fuel efficient
support vessels and four newbuild VLCCs to
than the average ship in the
replace older tonnage in 2013.
fleet, so the returns for those
theBaltic Summer 2012 www.thebaltic.com
61
Consultancy and surveying
Surveying the future Consultancy and surveying work is a key part of ensuring the safety of the maritime industry and the crews that man vessels, but while there is an impressive network of experts available, concerns have been repeatedly raised about a shortage of trained personnel
C
onsultants BMT De Beer is just one
personnel from other industries. Others claimed
lacking, evidence unavailable, crucial pieces of
company that is actively taking steps
such a measure could increase the risk profile of
the jigsaw missing. Before meaningful legal advice
to combat an industry-wide shortage
projects and affect funding. Particular skills short-
can be obtained or strategies developed, it is
of experienced surveyors, putting in
age hotspots were identified in Brazil, Tanzania
sometimes essential that these missing jigsaw
and Australia.”
pieces be brought together. Our role in these
place a three-year strategic action plan aimed at
Peter Russell-Smith, Executive Vice President
cases is to identify and gather information – and
Business Development and General Manager of
in particular evidence – that will enable our clients
BMT De Beer says it works together with
GL Noble Denton, said: “The first few months
to determine liabilities with a high degree of con-
many other survey offices around the world.
of this year have revealed that the executives
fidence and so achieve a satisfactory and early
“The surveyors employed by these offices have
surveyed for Big Spenders were right to forecast
result with the minimum of disruption to their
been carefully selected on the basis of either their
improved performance for the oil and gas industry
business relationships.
quality standards, their service provided to us in
in 2012. But the industry leaders who attended
“We have witnessed the evidence we have
the past or people who have been working with
our event in London have clearly articulated that
obtained in marine disputes withstand varying
(or against us) during our overseas surveys,” the
the sector has not overcome all of its hurdles yet.
levels of attack in negotiations, mediations, arbi-
company says. “All these non-exclusive surveyors
“The discussions that took place have given
tration and court hearings – both in the UK and
around the globe are subject to a monitoring and
us a real insight into the opportunities and pitfalls
abroad. We know how evidence is used and the
evaluation process in accordance with our ISO
that our clients expect to face during the remainder
relative value of different kinds of evidence. Most
9001 standards.”
of the year and beyond,” he continued.
importantly, we know how to get it.”
recruiting, training, mentoring and retaining key surveying and technical support talent.
Skills shortages were also identified at a
“It is clear that, alongside the oil and gas
Marex Marine and Safety Services specialises
roundtable event organised by consultants
industry’s confidence for the future, there is an
in marine and safety consultancy, safety man-
GL Nobel Denton, following the publication of
element of uncertainty over a wide range of
agement systems, audits, risk assessment and
an Economist Intelligence Unit report it com-
issues. Whether the challenge is the success of
studies, technical authorship, safety case reviews
missioned on prospects oil and gas industry
production, the unpredictable nature of energy
and rig moves.
prospects in 2012.
prices, or an impending shortage of the skilled
Formed in 1998, Marex, whose core business
The roundtable discussion found: “Skills
professionals needed to meet the world’s grow-
is Safety Case authorship – introduced in UK
shortages are becoming more acute. The chal-
ing demands for oil and gas, GL Noble Denton
under the Cullen Report following the Piper Alpha
lenge in plugging the oil and gas industry’s gap
stands ready to provide our clients with the
platform disaster in 1988 – now has two expand-
in skilled professionals was identified as a major
essential technical advice that will help them to
ing safety and marine departments, operating
issue in the Big Spenders report. Participants at
grow in testing conditions.”
from harbour-side offices in Aberdeen, Scotland.
the roundtable event recognised that the acceler-
“The worldwide oil and gas market is chang-
ated learning programmes, introduced by some
ing and has opened up to Marex as more coastal
oil companies to speed up the time it takes for
Safety first
states now have a requirement for drilling com-
new graduates to develop necessary skills, were
The investigation of marine casualties is one of
panies to have safety cases,” the company says.
important. However, some argued that more
London-based Marine Professionals main areas
“This is coupled with the fact that the oil majors
needed to be done now to meet the industry’s
of expertise and experience.
are requesting drilling companies to have safety
immediate need for more experienced workers
When an accident, liability may not be clear-
cases even if there is no coastal state legislative
in their 30s and 40s, and suggested bringing in
cut, the company says. “Information may be
requirement. The horrendous Macondo incident
62
theBaltic Summer 2012 www.thebaltic.com
Consultancy and surveying in the Gulf of Mexico will no doubt result in a more prescriptive legislative regime worldwide and a requirement for the expertise of companies such as Marex Marine and Safety Services to become involved in the risk assessment process worldwide. Regardless of legislation there is a need to provide a safe place of work.” The Marex risk assessment techniques ensure that the workforce is better able to understand the safety case and the implementation of its related regulations. Greater involvement of the workforce is a key point made much of at the joint industry conferences on the topic. Marex employs QRA specialists who have developed robust qualitative risk assessment techniques to fit all levels of hazard, increasing their strength and reputation in this field.
The clean-up operation continues on the Rena since her accident off the New Zealand coast
According to Ian McDougall, managing director of Marex: “Over the past two years, there
retrieved from the wreck and brought to shore is
the impact of debris on the shoreline is most
has been a big development overall in that
fast approaching the 600 mark and container
significant. “It is crucial to target the high impact
work is now being undertaken on a worldwide
and debris recovery company Braemar Howells
areas where debris is likely to be re-floated with
basis rather than formerly only the North Sea.
has been responsible for retrieving these. The
rising tides and deposited further along the coast
Consequently, the team is working in worldwide
company says good progress is being made
– we are working to prevent that happening.”
locations and growing fast.”
on the clean-up of loose debris washed up on
While extensive clean up efforts have already
Coromandel beaches after huge swells pounded
seen a great reduction in debris, Braemar will
the Rena wreck earlier in April.
continue to have a presence in the Coromandel
Consultants Braemar Howells have been deployed to deal with containers from the wreck of the Rena since her accident off the New
Braemar operations manager Neil Lloyd says
for the “foreseeable future,” Lloyd says. Beaches
Zealand coast last year. The number of containers
the priority remains to clear the beaches where
already cleared will be revisited and re-surveyed.
theBaltic Summer 2012 www.thebaltic.com
63
Forest products
Paper trail Cargo diversity is the name of the game for the Port of Tilbury, the market leader for handling forest products and paper in the UK. Plus: decline for pulp and paper products
T
ilbury celebrated its 125th anniver-
bases of production, most notably in Europe and
of significant importance to the industry. The
sary last year and in November got
North America where closures and consolidation
country is now the biggest importer of wood
the green light from the government
have become commonplace.
and wood-based raw material. Through its back
for Project Next, which involves the
“One of the most significant developments
door, Russia is supplying much of China’s need
development of 30 hectares of land to north of
in recent years has been the mass emigra-
for wood and this trend looks set to continue.
Tilbury’s existing port estate.
tion of key players’ capacities to the Southern
China’s construction industry is booming and
The Next development is expected to create
Hemisphere, particularly to South America,
its economic growth is continuing,” Drewry said.
more than 1,100 new jobs and will offer oppor-
where conditions are conducive to production
“Demand for forest products in North
tunities for warehousing, logistics and haulage
and pricing and where long-term prospects are
America, Europe and Japan has taken a severe
activities, the Port of London Authority says in
brighter,” the report continued. “Nearly all the
battering. The demand for printing and writing
its latest handbook for 2012.
global giants have established themselves there,
papers has been weakening since the mid-
Kimberly-Clark, meanwhile, imports wood
often at the cost of heavy job losses at home.
1990s with the onset of electronic media.
pulp for its own use and for third parties through
The pro-business attitudes of governments in
“Apart from overcapacity, the collapsing
the Northfleet Terminal near Gravesend and
these emerging countries, their competitiveness
demand for paper has left these paper-pro-
processes about 75,000 tonnes of imported
in wages and their bounteous yields have all
ducing regions struggling to deal with prob-
wood pulp into paper products at its Northfleet
contributed to the attractiveness of this region
lems caused by low prices and weak earnings.
Mill facility.
as a new manufacturing base.”
The recession was particularly harmful to the
Another 5,000 tonnes of pulp was handled
As in many other areas, the rise of China is
demand for basic materials, such as paper
for third party customers, while the terminal has a pulp barn that offers 5,000 cubic metres of undercover storage with a further 5,000 tonne
source Stora Enso
storage capacity. Seacon Terminals also specialises in the carriage and handling of forest products and the company operates a fleet of four 2,000 dwt coastal vessels handling cargoes mainly from north European ports and has its own foreign products terminal at Tower Wharf. Forest products represent about 25% of the cargo throughput at Tower Wharf. The Seacon terminal at Northfleet allows the discharge of steel and paper under cover using up to three 40 tonne gantry cranes. There is also a deepwater berth for vessels up to 50,000 dwt. However, the past decade has been a demanding one for the forest products sector with the decline in demand for pulp and paper. According to a report on the sector produced by Drewry Shipping Consultants earlier this year, “The forest products industry has been left with a severe overcapacity problem in its traditional
64
The past decade has been a demanding one for the forest products sector
theBaltic Summer 2012 www.thebaltic.com
Forest products for print advertising, which is evaporating. It is
According to chief executive Jouko Karvinen:
first quarter results, said: “Despite the season-
unlikely that the demand for these products will
“Our first quarter earnings performance was
ally weak first quarter, we managed to improve
ever recover its previous strength.”
overall in line with our guidance in February.
the profitability of our operations from the level
According to the consultants: “Much of the
However, the return on capital employed
of the second half of 2011. By decreasing costs
outlook for the forest products industry depends
was below cost of capital, which shows the
and maintaining stable pricing across UPM
on the general economic revival. In the case
never-ending need to improve our cost posi-
businesses we were able to improve our per-
of China and much of Southeast Asia, it has
tion and operational performance. In addition
formance. We were also able to maintain a solid
already returned to sustainable growth. But the
to the expected price pressures and varia-
cash flow throughout the quarter.
recovery in the developed world is still fragile
ble cost reductions only slowly improving our
“Even though the low profitability of the
and will take a long time. In any case, in the
profit, we also had operational issues in several
European paper industry as a whole is unac-
post-recession world the forest industry will look
of our mills.”
ceptable, our paper business is heading to the
very different.”
“Cash generation, including further improve-
right direction.”
ment in working capital, remained relatively strong, with improved and very strong liquidity.
Long term contracts
Keeping our cash engines going strong has
Le Havre expansion
While vessel overcapacity continues to dog the
been and remains a key target to finance our
The port of Le Havre has also been extending
shipping sector and affect rates, there have
growth investments in Uruguay and China.
its range of services to the forest products
been some suggestions that forest products
“I am very excited about our most recent
may be less affected because of typically long
investment decision to build a world-class inte-
term contracts between shippers and carriers
grated consumer board and pulp mill in China,
Hermann-du-Pasquier,
that are less affected by steep short term
based on locally grown renewable materials for
Services (HNS) provides treatment services
fluctuations in the market.
the benefit of local Chinese consumers in the
for wood products that are destined for export.
sector. Installed since February 2012 at Chaussée Héron
Nettoyage
The strengthening of links with the Asian
fastest-growing market,” he continued. “Both
markets was underlined in April when Japan’s
these announced investments are significant
Itochu bought a 24.9% stake in Finland’s Metsä
steps in transforming our company into a value-
A second enterprise should shortly be
Fibre for €472m. “Metsä Group and Itochu have
creating renewable materials company in mar-
installed in Le Havre: Agronet. The development
been in a commercial relationship for decades
kets with significant growth. This is a journey
of this sector follows the treatment of logs in
and the companies have had close marketing
that will take several years, but we are well on
forests being forbidden by ONF owing to the risk
and sales co-operation since 2004,” said Kari
our way, and plan only to accelerate the pace
of pollution of ground water.
Jordan, president and CEO of Metsä Group on
of change.”
announcing the deal. “The new arrangement is an excellent oppor-
This is the first Le Havre enterprise specialised in this sector.
Henceforth, this operation must be offered by
Meanwhile, Jussi Pesonen, President and
specialised services.
CEO of UPM, commenting on the company’s
tunity for Metsä Group to create more value and stability through co-operation with a strong commercial partner in the growing Asian market and, at the same time, strengthen our position as one of the leading pulp market operators globally. Both parties can pursue significant synergies in sales and marketing of each other’s products and the co-operation shall be enhanced even further in the coming years. “In addition, the deal sets the right value for our pulp asset. This transaction is also one of the biggest foreign investments in Finland during the past decade,” he continued. New merged Finnish port HaminaKotka saw wood pulp exports rise by 10.4% during the first four months of this year compared to last year, but paper exports were down by 20%. The two ports of Hamina and Kotka officially merged just over a year ago.
Quarterly results Paper giant Stora Enso recently announced that operation EBIT for the first quarter of the year was down to €147m compared to €258m last year, mainly due to lower prices in printing and reading and biomaterials and lower volumes in renewable packaging.
Demand for paper products has fallen dramatically due to electronic media
theBaltic Summer 2012 www.thebaltic.com
65
Maritime Cluster – Dubai
Dubai is back on track Dubai has had its share of financial troubles in recent times, but things are now looking up. Clive Woodbridge reports on current developments
F
ew parts of the Middle East suffered from
could have an adverse impact on local traders.
teu of capacity by 2014, through the conversion
the global financial crisis in 2008-9 more
According to the IIF report: “Dubai is more
of an existing general cargo berth into a new
than Dubai. At one point, it appeared that
vulnerable to global economic developments
dedicated container facility. This will add 1860m
the emirate, and its various state-backed
than Saudi Arabia, Qatar, Kuwait, and Abu Dhabi
of quay, with a draft of 17m alongside, designed
enterprises, would implode under the weight
due to its debt, its diversified economy and its
to handle the largest container vessels in service
of a colossal amount of debt, which the crisis
strong links to global trade. However, Dubai’s
or on order.
had left it less able to service. Dubai’s booming
excellent infrastructure and its prime location
DP World has also moved to assure markets
construction sector ground to a halt, real-estate
as a global hub for trade and tourism should
of its improved financial health, by recently
prices plummeted, and expatriates left in droves
continue to underpin diversification and robust
announcing that it will use its existing cash
for more promising pastures abroad.
growth over the medium term.”
resources to repay all US$3 billion of outstanding
Now, though, Dubai seems to be back on
The fact that double-digit container traffic
debt under a revolving credit facility due to
track, albeit with more modest levels of growth
growth returned to Dubai’s Jebel Ali port last
mature in October 2012. This move reduces the
than those seen in the pre-crisis boom years.
year, with DP World reporting a 12% increase
group’s total debt to around US$4.7 billion.
Furthermore, the process of restructuring state-
to 13 million teu in 2011, underlines the extent
DP World chairman Sultan Ahmed bin
backed ventures is proceeding well and there is
of recovery that has taken place in the local
Sulayem said: “We are delighted to be in a
a strong sense of confidence that much greater
economy. Encouraged by this positive trend, DP
position to be able to repay our revolving credit
stability is returning to Dubai.
World has decided to implement a fresh phase
facility six months ahead of schedule. DP World
First quarter 2012 data recently released
of investment at Jebel Ali. This includes a 400m
has a very strong balance sheet, because of
by the Dubai Chamber of Commerce (DCC)
quay extension at Terminal 2, which will increase
the strong cash generating nature of our global
suggests that Dubai’s economy is on course
capacity by around 1 million teu, to 15 million
operations, that allows us to meet the long term
to achieve a sustained recovery. According to
teu annually and which should be operational
strategic requirement for investment in profitable
the DCC, in the first three months of this year
by the end of 2012. Furthermore DP World has
growth opportunities.”
its members saw a 7.8% rise in the value of
announced the development of a further 4 million
DP World achieved a profit in 2011 of
exports and re-exports compared with the first quarter of 2011. Hamad Buamim, Director General, DCC, reflected that,“The first quarter results are quite encouraging and point to the continued strength of Dubai’s economy and the emirate’s position as a thriving investment destination. The trade sector is responsible for the overall health of Dubai’s economy, supported by its strategic location, advanced infrastructural and financial facilities, unconditional government support and a competitive and safe business environment.” The Washington Institute of International FInance (IIF) has recently issued a regional GCC report, which estimates Dubai’s economy grew by around 3.2% in 2011. However, it warns of lower growth of around 2.5% in 2012, partly because of international sanctions on Iran, which
DP World Jebel Ali
theBaltic Summer 2012 www.thebaltic.com
67
Maritime Cluster – Dubai Holding, the only listed crude oil tanker operator in Dubai, achieved a much improved result last year, with losses narrowing from Dh237 million (US$ 64.6 million) in 2010 to Dh73 million (US$19.87 million) in 2011. The ongoing weakness of the shipping market globally saw revenues fall by around 18%, however, compared with the previous year, as freight rates declined. Speaking at the announcement of these results, Gulf Navigation chairman Abdullah Al Shuraim said it had been a tough year for the company. However he added: ”We remain focused on the key strategic targets that we have set ourselves and, in particular, the continued expansion of the VLLC fleet.” Gulf Navigation has said it aims to add two more VLCC tankers, taking its fleet to nine ships, and also to expand the number of chemical tankers it operates to 12. Drydocks World Dubai
One of the biggest shipping companies to have an operational base in Dubai is United
US$751 million, 67 per cent up on 2010. “Since
for the year to December 2011 was 65%
Arab Shipping Company (UASC). In May this
the decline in global container volumes in 2009,
above expectations and it achieved a net profit
year, the company took delivery of the ninth and
DP World has worked hard to build a more
of around US$118 million. In addition, strong
last vessel in a new fleet of 13,500teu container
robust and profitable portfolio. Our 2011 results
growth has been witnessed by the group in
ships, an initiative that will greatly strengthen
reflect this,” adds Sultan bin Sulayem.
recent months with DWD winning contracts said
the company’s position within the liner shipping
to be worth more than US$250 million since the
trades. The vessels, all built at Samsung
turn of the year.
Heavy Industries in South Korea, represent an
Another shipping-related business that is effectively controlled by the government of Dubai
investment of around US$1.5 billion.
is the region’s leading shiprepair and conversion
Key contracts in-hand include a deal
yard, Drydocks World Dubai (DWD). An ill-timed
signed with Singapore-based AET to convert
The nine new ships will be deployed on
expansion overseas left DWD with a substantial
two newbuild 107,000dwt aframax tankers
UASC’s main trade routes between the Far East,
amount of debt, around US$2.2 billion, but there
into Modular Capture Vessels (MCVS).The
Arabian Gulf, Red Sea and Northern Europe.
now appears to be light at the end of the tunnel.
two vessels, Eagle Texas and Eagle Louisiana,
According to Jorn Hinge, president and chief
DWD has reached agreement with a majority
arrived in Dubai in early 2012 and will both be
executive officer of UASC: “The ships that are in
of the group’s syndicated lenders, giving it the
completed before the end of this year.
service already are living up to expectations and
necessary level of support to implement the
DWD has also secured an order from the
are providing substantial savings in operational
restructuring of its debt over a five year period.
Norwegian firm, Aibel, to build a platform
costs. Combined with recent freight rate
While a minority of the lenders have still to
structure to receive power generated by offshore
increases, this has resulted in a substantial
indicate their backing for the plans, the group
wind farms in the German sector of the North
improvements in results for UASC.”
says it is confident the absence of support from
Sea. Work starts this July at DWD on building the
The investment in the so-called A13
this minority will have no impact on the process
new platform and is expected to be completed
class vessels is expected to yield significant
of getting the business back on a secure
by December 2013.
economies of scale, substantially reducing
Shipping companies based in Dubai are
per teu transportation cost. This should allow
However, to ensure the restructuring goes
also seeing signs of a recovery and a return
UASC to compete more effectively on the main
ahead without any threat from the minority
to greater financial stability. Gulf Navigation
east-west trades over the next few years.
long-term financial footing.
of debtors that have still to agree, the company has filed for protection under Dubai’s Decree 57. The Government of Dubai passed Decree No. 57 in 2009 to allow groups such as DWD, a Dubai World Group subsidiary, to implement restructuring where proposals have the support of a significant majority of lenders, but where there is an absence of the 100% buy-in needed to implement its plans successfully. The DWD Plans now will go before a special Tribunal, but with over 75% of lenders now reported to be behind the plans, the restructuring is expected to get the go-ahead. DWD points out its as yet unaudited EBITDA
One of UASC’s latest newbuildings
theBaltic Summer 2012 www.thebaltic.com
69
Corporate viewpoint Karbal & Co
World of experience Established by a New York lawyer, Karbal & Co is a full-service international law firm specialising in all aspects of maritime law
K
• Marine insurance
Healthcare
firm that serves the needs of businesses, gov-
• P & I and defence matters
Karbal & Co’s has experience in healthcare
ernments in Libya and the United Arab Emirates.
• Ship sales and purchases
compliance issues while providing comprehensive
It was first established by New York Lawyer
• Ship registrations
legal services to clients in various segments
Dr Mohamed Karbal through a special license
• Finance
of the healthcare industry. Dr Karbal served as
arbal
& Co is a full-service international law
granted to him by Dubai government authorities. Karbal & Co provides its international and
the General Counsel for the Abu Dhabi Health
Oil and gas
Authority. Our experience and practice in this field
local clientele with corporate and commercial
Karbal & Co’s vast experience in oil and gas
legal consultancy focusing on oil and gas and all
sectors has encompassed legal consultation on
includes:
aspects of maritime law.
sales, storage and transportation agreements
• Drafting
Dr Mohamed Karbal, licensed in New York,
relating to oil and gas. We have assisted our
Libya and Dubai, specializes in corporate,
clients with their negotiations while providing the
maritime, and oil and gas laws in the Middle
necessary documentation of oil and gas leases
East especially the Arabian Gulf Area . Dr Karbal
and production sharing agreements.
for
international
facilities in the UAE. • Assisting health authorities in the UAE in
reviewing
proposals
submitted
by
international healthcare providers to manage
is capable of providing an exceptional legal analysis while drafting documents concurrently
contacts
management and operation of healthcare
Corporate and commercial
and operate healthcare facilities.
in English and Arabic. His vast experience is
Karbal & Co brings experience, technical
• Advising on government tender process.
in both private and government sectors in the
capabilities and creativity to each project. These
• Reviewing proposed employment contracts
United Arab Emirates and Libya.
qualities enhance our reputation as a firm that
Dr Karbal received a Doctor of Philosophy
assists clients to identify and effectively pursue
(Ph.D.) from the University of Missouri-Columbia,
their commercial objectives.
Missouri, US; a Master of Laws (LLM) in Maritime
Our experience includes:
Law from the University of London (UCL); a
• Formation
Master of Laws (LLM) in International Law from
companies
of
domestic
systems. • Advising on health insurance and health and
Indiana University, Indiana, US. He is also a
• Foreign investment
member of the Chartered Institute of Arbitrators,
• General corporate representation
London, UK.
• Mergers and acquisitions
In addition to practicing law, Dr Karbal has
for medical staff. • Drafting contracts on healthcare information
litigation issues.
offshore
• Franchising
Contact us:
held the position of Associate Professor in
• Copyrights and trademarks
Tripoli
various US and international universities.
• International business transactions
Karbal & Co
• Insurance
Suite 163/16th Floor
• Joint ventures
Section 1
Areas of practice Maritime
Tripoli Tower
Karbal & Co maintains a solid knowledge and
Information technology
experience in providing legal advice on local and
Karbal
international shipping and maritime issues.
enables it to represent clients in agreements
Mob: 218 91 713 7002 or
for technology development, procurement,
• Shipping litigation
licensing, distribution and transfer of software
E-mail: tripoli@karbal.net
• Maritime mortgages
and hardware.
Our firm provides advice on the following:
• Arrests
&
Co’s
extensive
Tel: 218 21 336 2536 IT
knowledge
Our IT practice covers all aspects of this
Fax: 218 21 336 2537 218 091 416 1549
Dubai
• Charterparties
developing industry:
Karbal & Co
• Bills of lading
• Software maintenance
Saeed Tower No. 2
• Cargo claims
• Software mupport
Sheik Zayed Road
• Shipbuilding contracts
• Licensing
PO Box 73868
• Arbitration
• Software development
Tel: 971 4 343 2611
• Pollution
• Copyright
Fax: 971 4 343 5644
• Salvages
• Website development
Mob: 971 50 443 4286
• Collisions
• Hardware maintenance
E-mail: dubai@karbal.net
70
theBaltic Summer 2012 www.thebaltic.com
Managing Partner: Dr. Mohamed Karbal Attorney at Law: New York, Libya and Dubai
AREAS OF SPECIALISATION • Maritime/Shipping Law • International Arbitration and Dispute Resolution • Oil & Gas • Commercial and Corporate law BACKGROUND Dr Mohamed Karbal is a licensed lawyer in New York, Dubai and Libya. Dr Karbal specialises in corporate, maritime, and oil and gas laws. He has extensive knowledge and experience in international and maritime law issues. Dr Karbal has held various legal positions in the UAE such as legal counsel for the health authority and the transportation department of Abu Dhabi. In addition to practicing law, Dr Karbal has held the position of tenured Associate Professor in various American and international universiti es. LEGAL EXPERIENCE Provided advice to an Abu Dhabi government authority on acquiring the management and operation of healthcare facilities on PPP approach . Served as a member of tendering committee in awarding Abu Dhabi major hospitals to international healthcare providers on PPP approach. Provided advice to an Abu Dhabi government authority on the managem ent and operation of public schools on PPP approach. Provided advice to an Abu Dhabi government authority on acquiring buses for the use of the public. Represented an Abu Dhabi investment company to conduct a due diligence and negotiating process to acquire and develop a large plot of land in Algeria. Represented an Abu Dhabi investment company to negotiate with the Yemeni authorities in obtaining permissions to develop a plot of land in Aden. Represented an Abu Dhabi government authority in selecting a bidder to construct a major highway on PPP concept basis. Monitored the performance of a hotel management agreement with a prominent hospitality provider for two years. Represented a client in arbitration procedure regarding a hotel managem ent dispute. Represented a client in negotiating a hotel management agreement with one of the most prominent international hotel chains. Represented an Abu Dhabi group of companies in negotiatin g and drafting joint venture agreements, agency agreements, sponsorsh ip, and memorandums of understanding, licensing agreements and articles/ memorandums of association of corporations. Represented an Abu Dhabi group of companies in negotiating and drafting establishing an Islamic investment project. Partners in this project include prominent Gulf business establishments and an Islamic Bank. Represented an Abu Dhabi Gas company in negotiation with the Iranian authorities regarding the importation of natural gas from Iran. Provided advice to a Dubai oil and gas company on various oil projects.
ACADEMIC TEACHING EXPERIENCE Gulf Institute For International Law, Dubai, United Arab Emirates 1998. Lecturer, subjects: international trade and maritime law. International Islamic University-Malaysia, Kuala Lumpur, Malaysia 199396. Associate Professor, subjects: public international law, UN law and international economic relations. Mount Mercy College, Iowa, US 1989-1993. Associate Professor-tenured, subjects: public international law, UN law and the American political and legal systems. University of Missouri-Columbia, Missouri, US 1988. Instructor, subject: public international law. EDUCATION Master of Laws (LLM. in Commercial/Maritime Law University of London, (UCL), London, United Kingdom. Doctor of Philosophy (PHD) in International Relations. University of Missouri-Columbia, Missouri, US. Maaster of Laws (LLM) in International Law. Indiana University, Indiana, US. Bachelor of Laws (LLB) University of Benghazi, Benghazi, Libya. LICENSES A Licensed Lawyer-New York. A Licensed Lawyer-Libya A Licensed Legal Consultant-Dubai PROFESSIONAL MEMBERSHIPS, SCHOLARSHIPS An Associate Member of the Chartered Institute of Arbitrators, UK. Member of Board of Advisory, Middle East Affairs Journal, Virginia, US. Received a five years scholarship from the University of Missouri to study a Ph.D. LANGUAGE SKILLS Fluency in English and Arabic: speaking, reading and writing. PUBLIC LECTURER Guest speaker at the following organisations: University of Missouri, US. Oxford Academy for Advanced Studies, Oxford, UK. Rotary Club International, US. United Nations Chapter/ Iowa, US. Iowa and Missouri (US) secondary schools and churches. Guest columnist in Iowa (US) and Malaysian newspapers. Dubai Shipping Agents Association Future Libya Development Form, Dubai Dr Mohamed M Karbal Managing Partner Karbal & Co LLB, LLM, LLM. PhD. Attorney at Law/New York, Libya and Dubai Managing Partner mohamed@karbal.net Mobile Tripoli: (218) 91 713-7002 Mobile Dubai: (971) 50 443-4286 www.karbal.net
Libya
Time of change Major legal changes and a focus on development are expected in Libya in the near future
W
ith the fall of the Gaddafi regime,
industry in the Mediterranean?
Libyan revolution, the Gaddafi regime focused
Libya is set to go through a
Dr Karbal refers to some of the smaller ports
the various branches of government to serve
period of rapid change and the
that serve the surrounding community. “The
himself and his aides,” said Dr Karbal. “Due to
country attends to develope as a
ports, before the start of the revolution, were
the lack of strategic planning, Libya’s maritime
well equipped and the old regime had made
industry is underdeveloped in comparison to its
Established by New York lawyer Mohamed
investments to improve them, thereby increasing
neighbouring states. Libya has to develop new
Karbal who is licensed to practice in New York,
efficiency and productivity in recent years,” he
infrastructure for the sea ports. As the Libyan
Dubai and Libya, Karbal and Co specialises in
said.
economists predict that Libya will serve as a
hub between Europe and Africa.
hub between Europe and Africa, the new ports
corporate, maritime and oil and gas laws, and
With an economy primarily dependant
the Baltic asked Dr Karbal about the changing
upon revenue from hydrocarbons, which
situation in Libya.
contribute about 95% of export earnings,
“While the ports have long been used
“Activities at the ports are slowly returning
65% of GDP, and 80% of government revenue,
for the transport of oil, the new government
again after fighting and sanctions hampered
Libya intends to serve as a hub between
is intending to widen the mix of exports.
the flow of oil during the civil war to oust
Europe and landlocked countries of Africa, Dr
That requires the formation of new alliances
Qaddafi,” he said. “Libya will witness, in the near
Karbal said. Yet to fulfill this ambitious goal,
with foreign investors regarding upgrading
future major legal changes in all aspects of the
the country has to upgrade the network of
infrastructure and dredging the waterways to
economy. The vision and trend of the new Libya
roads that link the Libyan ports and points of
enable bigger ships to dock.
is focused around development and prosperity.
destination in Africa. Libya is also embarking
“With the new regulations that will liberalise
The maritime and shipping sector reflecting this
on building a network of railroads, which will
the economy, Libya will witness an increase
vision will be one of the first sectors to witness
be utilised for such a hub.
in the volume of shipping activities, as well
such a change. With a Mediterranean coast of
What are the needs for future developments
2000 kilometres, seven commercial ports, seven
in the Libyan maritime industry? “Before the
should reflect it.
as rebuilding and equipping ports with new technology.“
petroleum ports, two mixed ports and a port just for the steel, Libya is destined for prosperity.” Dr Karbal says that the firm’s specialisations will be more in demand in view of current market conditions. “We
undertake
all
maritime
and
shipping issues. Currently, there is a slowdown in the demand of services due to the new authorities’ policies. After the elections, which will be held in June this year, a new government will be appointed and major changes in laws and economic policies are expected to take place. There will be positive degree of liberalisation and an expected increase in international trade as a direct result of new liberalised policies. So what is the importance of Libya’s geographical location to the maritime
72
Libyan ports and points of destination in Africa
theBaltic Summer 2012 www.thebaltic.com
Finland
Applying the Finnish-ing touch Ongoing fleet and port upgrades underline the commitment of Finnish organisations to play their part in supporting regional trade growth
F
inland has long been a pivotal player in
These ships offer a much higher specification
these new ships will provide Finnlines with
the Baltic trades, both as a result of its
that other ro-ros in the fleet and are particularly
much greater operational flexibility and enable
huge forest product exports, in particular,
designed to meet tough environmental standards
the company to compete for a wider range of
but also its role in providing a gateway
in the Baltic region. They feature advanced
container, ro-ro and breakbulk cargoes.
for Russian transit cargoes. To help sustain and
technology designed to reduce CO2 emissions,
develop that position, one of Finland’s leading
for example, as well as greater fuel efficiency.
The new series of ships, the first two of which, Finnbreeze and Finnsea, entered service
shipping companies, Finnlines, is in the process
The new vessels are built to Ice class 1A
in 2011, will replace expensive chartered-
of significantly upgrading its fleet through the
standards and offer 3326 lane metres of ro-ro
in tonnage. Consequently, they will not just
introduction of a series of six newbuildings. The
cargo capacity, offering space for more than
improve the quality of the Finnlines operation,
third and fourth ships in this series, Finnsky and
200 trailers. The lo-lo capacity for containers
but provide a financial boost to the company’s
Finnsun, were delivered in April this year from
on deck is 398 teu and the hoistable car decks
fortunes as well. Uwe Bakosch, president and
China’s Jinling yard and the remaining two are
can accommodate around 600 cars, more
chief executive of Finnlines, says: “These ships
due to be handed over later this year.
than usual with vessels of this size. As a result,
are indelibly associated with Finland. They not
Finnlines latest newbuilding Finnsky
theBaltic Summer 2012 www.thebaltic.com
73
Finland
Mussalo Port in Kotka
only fly the Finnish flag, but are highly innovative
supporting Finland’s international trade, Finnlines
significant for the port, which is situated a short
vessels both operationally and in terms of
is also committed to remaining one of the
distance from the border with Russia.
environmental sustainability.”
country’s biggest operators of port terminal
There are also plans to expand the
Finnlines believes its investment in the new
facilities, handling unitised cargo in Helsinki,
capacity of Kotka’s Mussalo container terminal,
ships will send a powerful signal to the market
Turku, Naantali and Kotka-Hamina, through its
strengthening its position as the country’s largest
that the ro-ro segment, like its traditional ro-pax
Finnsteve subsidiary. This business is under
box port. Last year, HaminaKotka handled a total
operations, will continue to be a core part of its
some pressure, however, and last year suffered
of 612,000 teu, up from 598,000 teu in 2010.
business in future. Bakosch adds: “The new
from lower volumes and increased competition.
Throughput in the two months of 2012 has seen
vessels will also strengthen our already excellent
This prompted a degree of rationalisation,
an acceleration of this positive trend, with the
relations with the major Finnish paper companies
especially in Kotka, with the company selling its
port handling over 98,000teu, compared with
and with Europe’s automobile manufacturers,
two cranes and closing its depot within the port
71,000 teu in the equivalent period of 2011, an
providing benefits in terms of cost efficiency and
towards the end of 2011.
increase of around 38 per cent.
reliability that will enhance their export initiatives and open a window to the future.”
There has been some more positive news
Helsinki, which now handles containers
from other operators in the Port of Kotka, which
through its Vuosaari facilities to the east of the
Alongside the new vessels, Finnlines is
merged with Hamina in May last year, to form the
capital, is also a significant container gateway for
revising its service strategy to create improved
Port of HaminaKotka Limited. One of the most
Finland and last year handled a total of 392,000
connections
One
important developments has been the opening
tee, which is virtually the same as in 2010. Traffic
important initiative is the linking of Helsinki and
of the new Fertilog fertiliser terminal in Kotka’s
in the first quarter of the year has shown an
Kotka ports with the main Russian gateway St
Mussalo harbour, which is handling products
encouraging upward trend, with an increase of
Petersburg through a series of new scheduled
from Russia brought in by rail and then shipped
9.5% compared to January-February 2011.
vessel services. Furthermore, these cargo
overseas. The terminal, which started operations
The fastest growing Finnish container port,
streams will be linked, via Antwerp, to the
in early 2012, is expected to handle around
however, is the Port of Rauma, which last year
international network provided by Finnlines’
1.5 million tonnes of fertiliser a year. This was
achieved an all-time record high of 223,000
parent Grimaldi Group.
previously shipped via Russian ports which were
teu, 35.2 per cent higher than the year before.
served by the state-owned railway company
The volume of cargo shipped in con tainers
OAO RZD at a “special” price.
surged by over 27% to 1.9 million tons. A further
between
key
markets.
In addition, in March this year, Finnlines started a new service connecting the Swedish
increase of 14 per cent was recorded in the first
port of Wallhamn and Ust-Luga in Russia. As a
Russia’s future membership of the World
mark of the importance Finnlines attaches to this
Trade Organisation means that the country
service, it will be operated by one of the large
will have to harmonise rail transport tariffs so
Overall Rauma handled 6.1 million tons of
Jinling newbuildings. Bakosch says: “Russia is
that geographical distance is the main factor
cargo in 2011, an increase of around 10 per
a market we believe will continue to grow fast
influencing costs. This change has made
cent. This was mainly the result of higher
as the local transport infrastructure improves. In
shipping via Finnish ports a more attractive
cellulose exports and grain shipments, as well as
Ust-Luga, good road and rail connections will
option. The new fertiliser traffic will make up
round wood imports. According to port director
allow us access to Moscow and far beyond.”
around 10 per cent of HaminaKotka’s total cargo
Hannu Asumalahti: “Despite the threats in the
throughput and so this investment is hugely
worldwide economic situation, the outlook for
As well as being an important vessel operator,
74
theBaltic Summer 2012 www.thebaltic.com
two months of this year as well.
Finland
Oulu Port
the Port of Rauma is very positive, especially
by building new terminals, as well as upgrading
of bulk ore exports. One of the main incentives
with regards to container traffic.”
existing facilities.”
to increase the depth of the access channel is that it will allow us to accommodate deeper draft
To the north of Finland, the Port of Oulu is
In recent years, Oulu has experienced a
another that achieved record breaking figures
significant growth in traffic related to industrial
last year, with a total throughput of 3.57 million
projects in Northern Finland and, with the
All the signs are that Oulu will capitalise
tons. While this was only about 0.5 per cent up
development of additional wind farms, nuclear
on investments being made in its hinterland
on 2010 overall, there were some very strong
power plans and mining ventures, there are
to achieve another all-time high in 2012.
increases in certain cargo segments which have
expected to be significant further opportunities
Cargo throughput over the first two months
continued into 2012.
for the port of Oulu to provide the specialised
of the year amounted to 489,000 tons, which
cargo handling services required.
was more than double that seen in the same
Forest
products
make
up
the
port’s
vessels, including bulk carriers, at our port.”
biggest cargo flows, but last year Oulu port
Himanen says: “As well as handling imports
period of the year before, and makes Oulu
saw significant growth in dry and liquid bulk
of project cargo for construction sites, we are
the country’s fastest growing major port at this
and container traffic, the latter rising by by 5
very much in the market to handle large volumes
point in time.
per cent, to 33,000 teu. Cement imports were a key factor behind the overall increase, growing by around 30 per cent compared with 2010. Finnsementti is in the process of building new cement silos with increased capacity in the Vihreasaari area of the port, moving from existing facilities in Topilla, in the city centre. This part of the port will be closed this year and converted to other uses. A new bitumen terminal is being developed in the port and work is also underway dredging the access channel from 10m to 12m. Port manager Kari Himanen says: “We have continued to enhance the port’s infrastructure by investing in quays, storage areas and equipment. With cargo traffic
still
growing
and
new
types of cargoes passing over our quays, we have responded
Rauma Port containers
theBaltic Summer 2012 www.thebaltic.com
75
Insurance news
Sanctions deadline looms From 1 July the International Group of P&I Clubs will no longer to be able to offer cover for ships carrying Iranian crude, plus insurance regulation is on the rise and TT Club announces growth
S
anctions are a growth industry and
states of the vessels involved – into Iran.”
resulting in shipping not being provided with P&I insurance.
with new measures set to come into
There is a certain ambiguity about what
force in July this year, shipowners
“directly and significantly contribute to the
As far as Europe is concerned, the
trading with states that are deemed
enhancement of Iran’s ability to import refined
regulations are coming through by way of
to be undesirable may be deprived of cover by
petroleum products actually means” said
statutory instruments. Penalties for con-
the International Group of P&I Clubs.
Salthouse. Would cargoes of cement to be
travening the rules include fines and also
Mike Salthouse, who chairs the International
used to build the refinery in Iran be covered by
prison sentences.
Group’s sanctions working group as well as
the sanctions? Would medical supplies des-
acting as a director of the North of England
tined for the refinery be caught by CISADA?
Different measures
P&I Club’s management, told delegates at
The Europeans have taken a difference
the Plymouth Nautical Degree Association
approach, both in relation to Syria and Iran, he
Measures introduced in Europe are different
(PYNDA) conference that the main area of
said. Once again, the coverage is extra-terri-
from those that have gone before because
concern with the US’s Comprehensive Iran
torial and does not only cover oil cargoes but
they target the accidental sanctions breaker,
Sanctions, Accountability, and Divestment Act
also Iranian bunkers. “If you as a shipowner
Salthouse said. In the case of the North of
of 2010 (CISADA) was section 102.
inadvertently stem Iranian bunkers, that will
England P&I Club, there are about 6,000 ships
Other regulations announced recently
mean that your insurance will cease.” Blended
on the books and it is impossible to know
include EU regulation 878/2011 targeting
cargoes will also be covered. “If you are lifting
what any individual ship is doing at a particular
exports of Syrian exports of crude oil and
a cargo out of Egypt which is 90% Egyptian/
time, before there is an incident. “We don’t
their insurance, while EU regulation 267/2012
Libyan crude and 10% Iranian crude, your
have satellites, we don’t have spies. No delib-
targets exports of Iranian crude, petroleum
insurance will cease”.
erate sanctions breaker is going to pick up the
products and petrochemicals.
The measures come into force in relation to crude oil on 1 July 2012 and from that date
phone and say they are going to take crude oil out of Iran bound for China,” he said.
clubs that are domiciled in Europe or obtain
“There is nothing illegal if after 1 July a
Club position
reinsurance within Europe and who form part
Japanese tanker owner takes a cargo of crude
At issue under section 102 is the clubs’
of the International Group will not be able to
from Iran to Japan. It is illegal for us to insure
position on whether it should enter into a
provide cover to 95% of the world’s tanker
it, but there is nothing illegal about the underly-
contract to provide insurance or reinsurance
tonnage if they are carrying Iranian crude oil.
ing trade,” he said.
for activities that can directly contribute to the
Even those insurers not part of the
Another issue is that the burden of proof
enhancement of Iran’s ability to import refined
International Group, but who reinsure into the
has been reversed, Salthouse said. As far as
petroleum products, including the provision of
group do not provide an alternative mecha-
the EU regulations are concerned, Salthouse
ships to supply those products to Iran.
nism, Salthouse said. If a club is in contraven-
explained that he had not found a defence of
Salthouse stressed that these measures
tion of CISADA, it could potentially be put
due diligence. If the club insures a ship car-
were extra-territorial. “The target for this particu-
out of business, because it relies on dollars,
rying Iranian crude after I July “we commit a
lar measure are those people who are insuring
which is the world currency of shipping. Any
criminal offence, end of story”.
perfectly legitimate trades – according to the flag
appeal against the process would take time
76
theBaltic Summer 2012 www.thebaltic.com
In the US, the onus is on the insurer to
Insurance news prove it has compliance systems in place to
at is how the business is managed, not just
TT Club
stop it happening.
the underwriting but the whole business. He
The TT Club announced an 8.5% growth in
The clubs, he said, have “overreacted” on
described the decision making audit as the “spy
premium income, resulting from new business,
the issue because of the seriousness of the
in the camp” and the underwriter will need to
increase in volumes and a continued high level
consequences of getting it wrong. The pooling
justify his or her decisions to management. In
of member retention, in its financial results
agreement has rules dealing specifically with
the event of making a profit on a certain class of
for 2011.
sanctions which say if a ship is traded in such
business, management needs to know why that
a manner to put the club in breach of sanc-
profit was made.
The Club has maintained a stable financial platform and good underwriting results,
tions, club cover will cease with immediate
Underwriting in the past was “by the seat
despite challenging market conditions for the
effect. Similarly, if payment of a claim puts a
of the pants”; now, he said, it is a much more
transport and insurance industries, reinforcing
club in breach of sanctions the policy holder
linear process.
its very strong capital position equivalent at
It is very important, he believed, to get
cannot make a recovery.
A++, the highest rating on the AM Best capital
What is important to bear in mind is the
the capital loading right otherwise it could be
demand is still there and simply by taking away
detrimental to return on capital. Changes in
In his statement, Knud Pontoppidan,
insurance, demand for Iranian crude will not
capital will affect the cost and availability of the
chairman, TT Club, highlighted the challenging
go away. Either vessels will have to trade with-
insurance capacity Insurer.
trading environment the insurance industry
adequacy model, the Club said.
out insurance, or put in place alternative insur-
The hull market is losing money, he told
faced during 2011 that saw heavy losses
ance. Parties who suffer will not be the state
delegates, and it could be argued that hull
in the first part of the year, comprising the
of Iran or the person committing the trade, but
underwriters have been making a loss for
second of the Christchurch earthquakes,
third party victims of accidents, who benefit
the past 15 years. The first quarter of 2012
flooding in Queensland, the earthquake
from third party liability insurance.
was the worst ever for hull insurers, he said,
and tsunami in Japan and the extensive flooding
IMO has crafted a series of treaties based
not only because of the Costa Concordia,
in Thailand:
on P&I insurance cover. “If you take that away
but other casualties including two chemical
those treaties are not going to work in the way
carriers and a container ship off China.
“In difficult insurance market conditions, the Club has performed well. The overall
they were intended to,” Salthouse said. States
Access to the person who writes the
combined ratio continues to be below 100%
will be left to pick up the tab in the event of a
cheque may become for restricted in shipping
(98.6%), meaning that the Club’s outgoings
big oil pollution casualty. If it is not possible to
insurance in the future as shipping companies
in
take away demand for Iranian oil, either ships
become more corporate, he said. Owners will
expenses are more than offset by premium
will have to go uninsured, or have $50m worth
have to show financial transparency. If they
income – which is a very important and
of cover and “wing it”.
can’t show that, they will be penalised. As
a very healthy position to be in with the
far as loans were concerned, these went up
current market conditions as they are,”
in 2011, but mainly because of activity in the
Pontoppidan said.
Rising regulation
cruise industry, he said, but in commercial
According to Simon Stonehouse, class under-
shipping they were down significantly.
claims
payments
and
administrative
UK Club
writer, hull for Brit Insurance, insurance regula-
Today in shipping, assets are reducing and
tion has increased significantly over the past
owners have to obtain credit ratings to obtain
UK P&I Club announced its results for the year
few years, with corporate failures of companies
money. New accounting regulations also mean
ended 20 February 2012 on 10 May with an
like Enron and the World Trade Center, which
that shipowners have to show they are worthy
operating surplus of $11m for the 2012 financial
basically meant the insurance industry was bust,
of a credit rating.
year with free reserves and capital increasing to
he told the PYNDA conference. Interestingly,
With insurance regulation, transparency
in 2005, when the hurricanes hit the US Gulf
in terms of the environment means that small
The club reported an improved claims
Cost, the monetary loss was much greater than
shipping companies will struggle and they will
trend supported by falling claims frequency
the World Trade Center, but “nobody batted an
either have to consolidate, or use third party
since 2008. Investment returned was reduced
eyelid”. Insurers , he said, looked smug.
managers. With the new environmental regu-
to 1.5% as the club de-risked its portfolio.
With the advent of emissions legisla-
lations, what insurers are afraid of is that “we will
and
chairman said: “We are very pleased that for
ing now, Stonehouse said. Shipping loans
development of all this new equipment,”
the second financial year running, the UK Club
are down. The name of the game in insur-
Stonehouse said.
is announcing a balanced underwriting result
capital employed.
up
paying
for
research
Commenting on the results Dino Caroussis,
tion, neither insurers nor owners are laugh-
ance and the shipping industry is return on
end
$486m.
Training will be needed and the fear is that
with a combined ratio, the ratio of claims and
there is a divergence between the people
expenses to premium received, of 97 per cent”
Solvency II is about protecting the policy
designing the equipment and those that are
Hugo Wynn-Williams, chairman of man-
holder, he explained, and more needs to be
actually using it, which may in turn lead to
agers Thomas Miller P&I found the results
done to protect the policy holder. While the UK
moiré accidents at sea.
“particularly satisfying as they come in a year
insurance industry is looking good, he said,
Shipowners want from financial strength
that has seen results elsewhere in the market
European insurers are looking fragile at the
their insurers, but corporate shipowners will
adversely affected by an increase in claims
moment. Solvency II, which comes into force
also require new added value and a insurer
and volatile investment returns.
in 2014, has three main pillars, Stonehouse
to hold their hand in the event of a claim,
“Since 2008, the ongoing shipping reces-
explained:
he said. This could essentially mean that
sion has significantly dampened the volume
the insurer becomes part of the owner’s risk
of claims.
quantitative,
supervisory
and
disclosure requirements. What the FSA and the EU will be looking
management department.
theBaltic Summer 2012 www.thebaltic.com
77
ITIC
Secondhand woes Andrew Jamieson of the International Transport Intermediaries Club (ITIC) looks at holding deposits under SALEFORM 2012
T
his year has seen the publication by
required to operate a separate bank account
If a dispute arises, the broker should seek
BIMCO and the Norwegian Shipbrokers
for clients. Escrow agreements often specify
advice. Most court systems have a process
Association of SALEFORM 2012, a
that the money will be held separately from the
whereby a person holding funds as a
revised version of the industry’s main
funds of the broker. The parties will accordingly
stakeholder can either pay disputed funds into
be protected if the broker becomes insolvent.
court, or ask the court to determine the issue.
contract for the sale of secondhand tonnage. One of the new features of SALEFORM
Under SALEFORM 2012, the confirmation
Sometimes a provision that the broker has the
2012 relates to the holding of deposits. The
by the deposit holder that the account has
option at any time to pay the funds into court is
explanatory notes explain that, in recent
been opened is one of the triggers for the
added to an escrow agreement.
years, opening a bank account has become
buyers’ obligation to lodge the deposit. If the
There are a number of other protections that
increasingly difficult and time-consuming. This
broker is using a general client account, as
can be built into a specific escrow agreement.
means that other parties, including brokers, are
opposed to setting up a specific account,
Brokers frequently ask about obtaining an
holding funds in escrow. And in recent years,
the provisions of SALEFORM 2012 should be
indemnity from principals. This will not prevent
ITIC has seen an increasing number of sale and
amended to reflect this.
the broker being liable “come what may”,
purchase brokers being asked to hold deposits
but it is common to see something along the
on behalf of buyers and sellers.
following lines:
The deposit provisions of SALEFORM
Interest bearing
2012 cover the needs of a variety of escrow
SALEFORM 2012 states the account is to
account providers (such as banks and law
be “interest bearing”. The explanatory notes
firms) and were not written specifically for
observe, “The account must be capable of
brokers. Historically, shipbrokers providing this
earning interest which is to accrue to the
service have usually done so under the terms of
deposit, though it must be appreciated that the
a written side-letter signed by both the buyers
interest rate may be as low as 0%”. The obligation
and the sellers. These escrow agreements
is likely to be interpreted as an obligation to
normally cover both the manner in which the
have the money held on the terms available for
money is to be held and the grounds upon
immediately available deposits. Any interest on
which it is to be released.
the money is to be credited to the buyers. Once the deposit has been lodged, the most obvious concern is that the broker could
The buyers and sellers jointly and severally agree: i) to indemnify the broker upon first demand against all losses, liabilities, costs and claims and demands arising out of and in connection with our holding of the funds in accordance with his escrow agreement; and ii) that the broker’s only obligation is to hold the funds upon the terms set out in this escrow agreement. We will have no liability for any act or omission taken or not taken by us in good faith. For the avoidance of doubt it is the burden of the party alleging
Escrow agreements
incorrectly release the funds and therefore face
Although SALEFORM 2012 provides a space
a liability. SALEFORM 2012 refers to the deposit
for the identity of the “deposit holder” to be
being released in accordance with joint written
inserted, that does not make such deposit
instructions by the parties. That is simple and,
The potential for a claim against the broker
holders parties to the agreement. There is
with most closings, there is little risk. The situation
for negligence can be reduced – but not wholly
nothing to stop brokers from continuing to
becomes far more complicated, however, if
eliminated – by appropriate wording. It is not,
have a separate “escrow agreement” with the
there is a dispute. The contract may provide
however, simply a question of being at fault. If
parties. If they do so, then it is important that
that one party receives the deposit if the other
a dispute arises, the wholly innocent deposit
the SALEFORM 2012 provisions are reviewed
is in default. But the broker, faced with accusation
holder can be faced with aggressively worded,
and, if necessary, amended to avoid any issues.
and counter-accusation, cannot be expected to
conflicting legal demands for the funds. Legal
adjudicate on the issue of who is right.
costs can quickly increase. Deposit holders
SALEFORM 2012 has been drafted on the
we have acted in bad faith to produce evidence thereof.”
basis that the deposit holder will open a specific
Many escrow agreements in current use
account for the transaction. This provision is
provide that, as an alternative to a joint written
obviously applicable when a bank or other
instruction, the deposit holder will release
ITIC treats holding deposits as part of
deposit holder opens a separate account in the
the funds in accordance with a final and
the usual course of business of a sale and
names of both parties. In practice, shipbrokers
un-appealable decision of an arbitration tribunal
purchase broker and would assist the broker.
(and others) may not open a specific account.
or court. The difficulty with such wording is that
Other insurers may not consider that acting as
the broker is not in a position to assess whether
a deposit holder is covered under their policies,
such an award is final and un-appealable.
and the position should be checked.
The Baltic Code provides that members of the Baltic Exchange acting as brokers are
78
theBaltic Summer 2012 www.thebaltic.com
need to make sure they are covered by their insurers if they are dragged into a dispute.
Legal news
Flying the flag? The Rotterdam Court has recently delivered judgment on an interesting case under the 1952 Arrest Convention. Plus: disputes and the Athens protocol
I
t has been a subject for discussion among
a contracting state, meanwhile, may be attached
Charterparty disputes
contracting states under the 1952 Arrest
for all sorts of claims if permitted by local rules.
Pitfalls and loopholes in charterparties in rela-
Convention whether the forum arresti rule also
The Rotterdam Court deduced that the
tion to bunker disputes was the subject of
applies to vessels that are not flying the flag of a
Arrest Convention also provides for rules in
a presentation by Olav Vikoren, a partner in
contracting state, writes Ellen Saman-Kole, AKD
respect of vessels which are not flying the
Norwegian law firm Thommessen. Speaking at
law offices, Rotterdam.
flag of a contracting state. It considered that
the BI Norwegian Business School conference in
The Rotterdam Court recently confirmed that
this interpretation was in line with that of many
Oslo in April, he said that bunkers have always
this is indeed the case. The Court delivered a
other contracting states. For that reason, the
been a source of disputes between owners
judgment that confirms that a party can start
court concluded that Article 7 also applied to
and charterers.
proceedings on the merits in the Netherlands on
vessels that do not fly the flag of a contract-
Enhanced refining techniques in the past few
the basis of forum arresti (jurisdiction) under the
ing state and that the matter could be brought
decades have resulted in a decline in quality of
1952 Ship Arrest Convention.
before the court in whose district the attachment
residual fuels used on board vessels. With the
was made.
increased demand for low sulphur bunkers, he
The dispute that led to this ruling had its origins in a collision on 29 April 2010 between
That being the case, the second question
said there has been much more focus on quality
the 25,560 dwt Maltese-flag bulk carrier Kaliakra
to be answered was whether the Brussels I
requirements. Bunkers also make up a substan-
and the UK 143, a Dutch fishing boat, off the
Regulation (EG 44/2001) could prevent the
tial proportion of ships’ voyage costs.
Dutch coast near Den Helder. The Kaliakra col-
Rotterdam Court from recognising jurisdiction
There are rarely disputes involving bareboat
lided with the UK 143 while the latter was fishing.
on the basis of the Arrest Convention. The
charters of vessels, Vikoren said, and the same
Due to the impact of the collision, one fisherman
Rotterdam Court, referring to the Tatry case,
applies to voyage charters. However, 70% of
was washed overboard. Luckily, he was able
noted that Article 71 of the convention stipulates
ships are operating on time charters, with the
to save himself by holding on to a rope from
that it will not affect other conventions to which
charterer responsible for supply of bunkers.
the UK 143.
member states are a party and which also
Cost and quality disputes often arise, he said.
deal with the jurisdiction of the court on
About 70% of marine disputes are settled under
special occasions.
English law, however the solution to a problem
As a consequence of the collision, the UK 143 suffered severe damage and, on 13 January
The Rotterdam Court considered the Arrest
under a charterparty will depend on which law
Convention to be a special convention as intend-
governs the charterparty and the results of the
On 26 January, 2011, the UK 143 started
ed under Article 71 of the Brussels I Regulation.
dispute could vary.
proceedings before the Rotterdam Court on
It was also of the opinion that under Article 71
Disputes on bunkers are basically divid-
the basis, among other things, of Article 7 of
paragraph 2 of the Brussels I Regulation the
ed in to quality and quantity issues, with the
the 1952 Arrest Convention (forum arresti). The
fact that Malta was not a party to the Arrest
quality issue being predominant in recent times,
jurisdiction of the Rotterdam Court was chal-
Convention did not prevent the court from
said Vikoren, particularly in view of new require-
lenged by the Kaliakra, whose Maltese owners
taking recognition of this matter on the basis of
ments for low sulphur fuels. Many owners and
argued that their vessel was flying the flag of a
the Arrest Convention.
charterers, he said, fail to set out the fuel specifi-
2011, the Kaliakra was attached in Rotterdam in respect of claims arising out of the collision.
non-contracting state to the Arrest Convention.
In summary, the Rotterdam Court ruled that
cation in the charterparty. Standard charterparty
The Rotterdam Court, however, held that
Article 7 of the Arrest Convention provided
it did have jurisdiction. It noted that, under the
forum arresti jurisdiction for vessels flying the
Due to the decline in quality it is now much
terms of Article 8 of the Arrest Convention, it
flags of both contracting and non-contract-
more common to include clauses which specify
followed that, if the vessel was flying the flag of
ing states and that the Brussels I Regulation
bunker quality.
a contracting state, it could only be attached for
allows a party to rely on forum arresti under the
maritime claims as stipulated in Article 1 of the
Arrest Convention.
Arrest Convention. A vessel not flying the flag of
forms are not specific on this point.
“Even without bunker quality clauses or fuel specification in the charterparty there seems to be a global consensus that the charterers
theBaltic Summer 2012 www.thebaltic.com
79
Legal news are under an absolute obligation provide
was not at issue, bunkers needed to be law-
be necessary for a number of lawyers in an
bunkers which are fit for the vessel’s engine,”
fully purchased and not put the vessel at risk
number of jurisdictions to apply different sets of
Vikoren said.
of detention.
rules to liability, limitation of liability, time bars and
This is regardless of whether there is an
The owner also has responsibility to ensure
agreement on the bunker specification, the
the vessel is fit for purpose and can burn the
bunkers must be fit for purpose. However, if
fuel specified to meet the regulations. If the
“The regulation implements the IMO guide-
the vessel has a non standard engine requiring
vessel has sensititive machinery that requires
lines which address terrorism regulated damage
non standard fuel owners have to advise the
specific fuel it is the owner’s obligation to inform
and applies an overall limitation of liability which
charterers they have to provide specific bunkers.
the charterer of that fact.
is the lower of 250,000 SDRs per passenger or
so on”. Under the protocol, liability is increased to 400,000 SDRs per passenger per carriage.
Vikoren said his firm had also seen cases
The vessel’s fitness for service also covers
340,000,000 SDRs per ship on each distinct
where there had been issues with ignition and
fitness from a regulatory perspective, and there
occasion,” she explains. “The compulsory insur-
combustion with low sulphur fuels as well as an
is a risk that the owner would be required to
ance provisions for 250,000 SDRs per pas-
increased presence of catalytic fines that can
pay for the cost of implementing new regulatory
senger evidenced by blue cards (allowing with
damage the vessel.
requirement, he warned.
few exceptions direct actions against insurers)
He cited one London arbitration case where
which apply to the performing carriers for ships
it was held that although the bunkers were within
registered to a Member State have caused great
the specification, they were not fit for purpose
Athens countdown
because of ignition and combustion problems,
13 December 2012 will see the entry into
“The clubs have agreed to provide a blue
and therefore the charterers were held liable for
force of EU Regulation 392/2009, which imple-
card for the liability for death and injury already
the consequences of the engine problems.
ments the Athens Protocol 2002 in the 27 EU
covered by them. The market is expected to
member states.
provide blue cards for liabilities arising from war
charterers had bought bunkers in breach of
Maria Pittordis of Hill Dickinson explains in
sanctions, leading to the detention of the vessel.
the firm’s marine, trade and energy bulletin that
The case was interesting, he said, but it
by adopting the protocol on an EU wide basis,
found that while the quality of the bunkers
“in the wake of major casualties it will no longer
and terrorism. This is where there is still some controversy and uncertainty for the industry”.
A team of English and German qualified lawyers, dedicated to serving the international maritime industry.
FLEET HAMBURG LLP, WiLLy-BRAndT-STR. 57, 20457 HAMBURG, GERMAny PHonE +49 (40) 5 700 700 FAx +49 (40) 5 700 70 200 WWW.FLEET-HAMBURG.coM
80
theBaltic Summer 2012 www.thebaltic.com
Image by thomasfuer / photocase.com
In another arbitration, it was said that the
difficulty,” she said.
Commercial profiles
Rosneft Marine – Raising Standards, Expanding networks R
osneft Marine, Rosneft’s international marine fuel trading office, has achieved significant
growth in its first year of operation. The company supplied more than 700,000 metric tonnes of fuel in its first 12 months and achieved a turnover of almost US$400 million. The company has continued to enjoy phenomenal growth as the international demand for high quality Russian marine fuel rises. Rosneft’s bunkering division has become one of the top three suppliers in the Russian market since it established its bunkering division in 2007. By having access to its parent company’s facilities, including more than 14 refineries and terminals as well as 36 bunker fuel tankers all over the Russian Federation, Rosneft Marine is able to provide unparalleled assurance of fuel quality on establishing long-term partnerships. The
Far East. Rosneft Marine’s UK office in London
As part of its strategy to provide a supply of
company works with its customers to design
will focus on the global and European markets.
high quality fuel, Rosneft Marine, together with
and implement strategies for a secure and
Mr Brezhnev said: “We are very pleased to
its sister company RN-Bunker, is embarking on a
sustainable supply of bunker fuel, ensuring
announce the opening of our Beijing office. It will
pilot project to establish Rosneft’s first full quality
a mutually beneficial arrangement that has
have Mandarin speakers and this will help us to
management standard in the port of Nakhodka
been received favourably by the market. Last
provide a localised service to our customers in
(NQMBS). This will create an internal bunker
year, Rosneft Marine signed formula based
the Far East.”
delivery standard that is specifically tailored to
term contracts with several major shipping
The company will continue to look at
the needs of the local market while being based
companies. The ability to guarantee the quality
expansion plans in different geographical areas
on existing international standards – the first of
of its fuel and supply at competitive prices is one
where it hopes to capitalise on its multinational
its kind in Russia.
of the reasons why more shipping companies
and multilingual team and offer a superior service
are choosing Rosneft Marine as their preferred
to its global clients, while still delivering premium
partner in Russia.
quality fuel in Russian ports.
while continuing to supply at competitive prices.
Explaining
the
rationale
behind
the
move, Vladimir Brezhnev, director of Rosneft Marine UK, said: “Standards have become
Rosneft Marine is also keen to expand its
an increasingly recognised way of ensuring a
international network to support its global client
reliable and consistent supply of high quality
base. In March this year, Rosneft Marine set up
fuel. Introducing these standards in our ports
an office in Beijing, China, to service the growing
will enable all our operational personnel to be on
demand for premium quality marine fuel in the
the same page and provide our customers with even greater confidence that they are receiving what they pay for.” Mr Brezhnev also said that the company aims to have similar quality management standards implemented in its operations in all the other ports it supplies in. “Transparency is one of the core tenets of our business and we believe that standardising our bunker supplying process will set us apart from most of the other suppliers in the Russian bunker market,” he added. “This is part of Rosneft commitment to ensure that high quality bunker fuel is delivered transparently, providing unparalleled assurance of quantity and quality.” One of the major changes in Rosneft Marine’s marketing strategy has been to focus
theBaltic Summer 2012 www.thebaltic.com
81
Commercial profiles
Leading the Way to Professional Competence stablished in 2009, Competent Maritime
E
(TOTS) for ship practical simulator verification
and Radar/ARPA Simulator from India-based
Professional and Sea Staff (COMPASS) Training
and training courses, which makes COMPASS
ARI Simulator. Furthermore, COMPASS recently
Center Inc was set up through the shared initiative
as the very first training centre in the Asia
linked up with FURUNO to offer type specific
of maritime professionals and practitioners intent
Pacific to be accredited as TOTS provider as
ECDIS training, with the use of FURUNO ECDIS
on having a learning institution dedicated to the
assessed by DNV.
model FEA-2107/FEA-2807.
development and improvement of human resources
COMPASS
training
COMPASS offers a groundbreaking curriculum
in the maritime industry. The Filipino-owned corpo-
provider for ECDIS type-specific by Japan
that delivers globally accepted and best maritime
ration delivers competency-based training and
based manufacturer FURUNO NavSkills™.
practices. Its training programmes are company
assessment programs with the latest technology.
Our competence in the field of medical care
specific and are chosen with the unique needs of
COMPASS Training Center aims to be
has merited COMPASS Training as the official
the individual company in mind and are developed
globally-recognised and the leading valued
host of the Danish Medical Care programme as
to go beyond the basic transmission of skills and
partner of the maritime industry for human
authorised by the Danish Maritime Authority.
theories. Each programme is carefully selected
is
also
an
official
resource development because it adheres to
These recognitions and partnerships with
and developed based on IMO standards and is
international standards in maritime education and
several key players in the global maritime industry
taught by a competent faculty who are active
skills advancement of all personnel in the maritime
are a strong indications that COMPASS Training
seafarers with a long professional and training
field. Its competency-based training programmes
Center ensures the delivery of value added
experience in the maritime industry.
are compliant with the requirements of the STCW
training programmes that promote and maintain
78 as amended under the accreditation of the
the competence of seafarers, both Filipino and
Maritime Training Council of the Philippines. Also
foreign-based nationals.
COMPASS has gained certifications ISO 9001:
Our training services are all aided by state-
2008 QMS requirements and maritime training
of-the-art technologies such as DNV Type-A
standards from DNV, the Swedish Club Academy
approved integrated Bridge System; a fully
for the Maritime Resources Management (MRM)
functional Liquid Cargo Handling simulator for
For more information,
course, and is compliant with the standards of
product/oil, chemical, LPG and LNG tankers;
email us at sales@compass.ph
INTERTANKO’s Tanker Officer Training Standards
full mission engine room simulator; and ECDIS
Website: www.compass.ph
Department of Merchant Shipping C
yprus is today a fully fledged maritime centre, combining both a sovereign flag and
a resident shipping industry, which is renowned for its high quality services and standards of
• Registration, training and certification of seafarers, • Control of coastal passenger vessels and small craft,
and environmental protection standards, is the foundation on which Cyprus builds its reputation as a serious maritime flag and as a base for international operations. The
implementation
of
a
series
of
safety. The Cyprus registry today ranks tenth
• Investigation of marine accidents,
among international fleets and third within the
• Continuous updating of the merchant
legislative and administrative measures for the
shipping legislation and its harmonisation
enhancement of maritime safety and security,
with that of the European Union,
which are in line with the European guidelines
European Union. Responsibility for the development of maritime activities lies with the Ministry of Communications and Works. Its authority and jurisdiction are exercised through the Department
• Coordination of the EU Integrated Maritime Policy, • Administration of the State Aid Scheme for
of Merchant Shipping, whose activities include:
Maritime Transport and the Tonnage Tax
• Registration of ships,
System,
• Administration and enforcement of the Merchant Shipping Laws, • Control of ships and enforcement of international conventions ratified by the Government of Cyprus, • Protection of the marine environment, • Vessel
traffic
monitoring
in
the
sea
around Cyprus and information system implementation, • Monitoring the conditions of living and work on board Cyprus ships,
82
and the objectives of the local shipping industry, are the measures enabling Cyprus to maintain the “White List” status in the flag assessment systems on port state control. Cyprus provides a competitive edge to its
• Promotion of Cyprus as an International
clients, with regard to taxes, fees and service
Registry and a base for international maritime
following registration. The New Tonnage Tax
operations.
System secures a stable fiscal environment for
Merchant shipping is a business sector which
Cyprus shipping in the long term.
Cyprus is proud of. It represents an invaluable
It also introduces incentives for new shipping
asset for Cyprus, with significant political and
activities and extends the implementation
economic advantages.
of the EU maritime transport policy beyond the
At the same time, Cyprus has established
European boundaries. This, in fact, provides
itself as a quality registry. The maintenance of a
a new impetus for the shipping industry of
high quality fleet and the effective implementation
the island and creates great prospects for
of the internationally applicable safety, security
future growth.
theBaltic Summer 2012 www.thebaltic.com
Commercial profiles
IMS Marine Surveyors & Analytical Laboratories Ltd. Vancouver, BC IMS was established in January 1992 and has
is a FOSFA Superintendent and CFIA certified
which facilitate International Trading according
grown to become one of Western Canada’s
sampler for Phytosanitary Certification, and is
to governing standards and legal requirements.
largest independent marine surveying and cargo
also the Flag State Ship Inspector representing
IMS Laboratory is a FOSFA Analyst L1 (the only
inspection organisations. IMS has earned a
Bahamas, Barbados, Cyprus and Panama, and
one in Canada) and a COPA referee Laboratory.
reputation as being unbiased, objective and
Class Surveyor for CR Taiwan, OMCS Panama
IMS’s achievements in research and method
professional. Based in Vancouver, Canada’s
& Qualitas Panama. IMS is an IICL Container
development have been recognised by USA
largest port, IMS offers a comprehensive range
Inspector and the only certified ultrasonic hatch
and Canadian authorities and producers in
of professional consulting, superintendence,
cover tightness testing firm on the West Coast.
chemistry and oil testing. The application for
inspection,
The company is widely used by most major P&I
direct testing for sulphur and phosphorus by
and H&M Clubs for their various surveys.
ICP-OES has quickly become one of the most
testing
and
marine
surveying
services across Canada, USA and worldwide for International Traders, Brokers, Producers,
In today’s highly competitive and challenging
widely-used method in North America for the
Buyers, Charterers, Owners, Insurances and
shipping industry, losses can materialise in many
quality of vegetable oil, beef tallow and biodiesel
Legal Entities.
ways. Lost time, damage, leaking hatch covers,
testing, and is available online at: http://las.
IMS offers a full-service surveying and
cargo contamination, unprofessionally performed
perkinelmer.ca/Content/applicationnotes/far_
analytical laboratory, providing professional
inspection/surveying work, unfamiliarity with local
sulphurandphosphorusbiodiesel.pdf
testing, certification and consultation in the
conditions etc can be major cost factors. IMS
grain, oilseed, meals, fats & oils, biodiesel,
could reduce your exposure to costs and claims
chemicals, marine, environmental and food-
by being your on-site representative, providing
related fields. The company has developed
experience, prompt, factual, and competitively-
For more info visit: www.ims-van.com
sophisticated computer software for different
priced marine surveys, cargo inspections and
Captain Jostein Hoddevik, President
kinds of surveys and is fully compliant with
testing.
Dr. Tatiana Hoddevik, Head of Laboratory
relevant international standards. IMS became
IMS
offers
a
first-class,
reliable
and
Tel: (1604)298-9968 (24 hrs.)
ISO certified in 2001 and is currently certified
rapid analytical service based on modern
Fax: (1604)298-4862
under the ISO 9001:2008 standards by BSI. IMS
instrumentation and cutting-edge techniques,
E-mail: admin@ims-van.com
JSC Sovfracht J
SC Sovfracht was formed in 1929 and during
railroad wagons, river-sea ships, port complexes,
the Soviet period was the only governmental
container terminals and lorries.
body in the USSR associated with the chartering
Together with Russian Navy fleet, Sovfracht
of the whole Soviet fleet and all types of cargo,
also participates in Russian and international
For more information, please contact:
both export and import.
projects in oil and gas research in the Russian
JSC Sovfracht,
Far East areas of Sakhalin and Kamchatka.
Marine House
Sovfracht is the oldest and one of the most experienced companies in Russia, and is a
Furthermore, Sovfracht is one of the top 10
member of both BIMCO and the Baltic Exchange.
transport companies in Russia. The company
127994 Moscow
constantly develops strategies and tactics to
Tel: +7 (495) 258 2870
• Dry cargo chartering
meet market challenges. It has ambitious goals
Fax: +7 (495) 258 2889
• Handysize and handymax, coasters and
for the future, and all the opportunities and
E-mail: shipping@sovfracht.ru
capabilities to reach them.
www.sovfracht.ru
The company’s fields of activity include:
river-sea ships
Rakhmanovsky per. 4, bld. 1
• Projects and heavy-lift cargos • Shipmanagement • Agency • Sale and purchase Additionally,
Sovfracht
is
the
general
worldwide agent for Russian Navy. Currently, Sovfracht has 25 affiliated transport companies and regional representative offices which provide a full range of shipping and logistic services in Russia, CIS and the western world. The company owns and efficiently operates
theBaltic Summer 2012 www.thebaltic.com
83
Commercial profiles
Safe and secure at sea T
he economic impact of piracy – as well as
The company serves on the government’s
consultations, and associated intelligence
its dangers – are clear. Increased freight
Security in Complex Environments Group
analysis capabilities – quickly and efficiently.
costs and insurance premiums, higher fuel
(SCEG), in partnership with ADS – the trade
costs and the risk of hijacking. These must all
organisation advancing the UK aerospace,
be considered in any transit passing through
defence, security and space industries – to
the High Risk Area in the Arabian Sea, Gulf
regulate the UK security industry. We strongly
of Aden and Indian Ocean. Neptune Maritime
support an industry-wide standard for all
Security can help. Neptune seeks to reduce
maritime security providers. Our company
risk using its teams of highly trained, armed
directors are invited to speak on key issues at
maritime security specialists to protect vessels,
many conferences around the world.
crews, cargo and corporate reputations.
Neptune believes that intelligence and
Our depth and breadth of experience adds
preparation are essential for a successful
more value than just armed teams – there
maritime security firm. The company believes
is also constant operational support from
that this approach not only reassures clients,
headquarters, operational centres in both UK
but ship Masters and crews, where it can often
and Dubai, and the latest intelligence reports
matter most. Founded by experienced former members
For more information, contact:
In addition, we have a client-accessible
of the UK’s Special Boat Service (SBS), and
Neptune Maritime Security UK
online information centre and intelligence bank
supported by other specialists, Neptune
Tel: +44 (0) 1202 743 357
to study the latest intelligence reports, review
Maritime Security offers a comprehensive
Website: www.neptunemaritimesecurity.com
contracts and conduct due diligence in a
service to the maritime industry. From its UK
client’s own time and convenience.
(http://www.neptunemaritimesecurity.com/).
and Dubai operations and support centres, the
Neptune Maritime Security UAE
Neptune Maritime Security is a leader in the
company is able to supply clients with armed
Tel: +971 (0) 444 87 580
development of accreditation and compliance.
vessel protection teams, maritime security
Website: www.neptunemaritimesecurity.com
Nordic IT’s superior solution ordic IT is one of the leading communication
N
customer relationship management and other
software providers for the maritime industry.
shipping applications in one unified solution.
Nordic IT currently has direct and indirect pres-
Key components
ence in the UK, Germany, Norway, Finland,
• MARK5’s document management and
• Advanced shipping functionality with the fully integrated sale & purchase module, Position-list & cargo module, position
With headquarters in Copenhagen, Denmark,
database module.
France, Dubai, Hong Kong, Shanghai, Singapore,
workflow
North America, Eastern Europe and Russia.
processes, improves working routines and
Cost cutting and time saving
enhances flow control.
• Replaces stacks of paperwork
Given the highly customer-focused service delivery and technical superior nature of its applications, Nordic IT enjoys a very high degree of customer loyalty and reputation worldwide.
module
& cargo matcher module and shipstreamlines
internal
• E-mail client for individual and group-based messaging.
• Avoids repetitive work
• Delivers full mobility on a group and individual level without the need for message forwarding.
MARK5
• MARK5 can be set-up as a stand-alone solution
Nordic IT’s latest product is the state-of-the-art
or co-exist fully integrated with exchange.
communication software MARK5 – a software
• Corporate and individual contact directory
product especially designed to serve the needs of companies within the maritime industry, who all need reliable and fully supported document and message management software in order to run a
applications.
84
system
load
and
storage
requirements • Eliminates the need for forwarding, copying and disguised rules.
and corporate planning and scheduling. • Whiteboard for virtual meetings, enhanced
small as well as large companies, locally based or
incorporate massaging, document management,
• Reduces
• Time and task management for individual
collaboration
With MARK5, Nordic IT has managed to
• Super-fast searches
for customer data at your fingertips.
successful business. The system is designed for with affiliates around the globe.
• Streamlines business processes
• Customer
and
instant
messaging
Copenhagen-London-St. Petersburg-DubaiHong Kong-Shanghai-Singapore E-mail: sales@nordic-it.com
relationship
management
Tel: +45 3940 3997
functionality for improved marketing, sales
Fax: + 45 3940 3798
and service towards customers .
Website: www.nordic-it.com
theBaltic Summer 2012 www.thebaltic.com
Commercial profiles
Bringing innovation to the surface PG’s has a well-established reputation in the
P
and accelerated weathering to simulate real-
Innovative coatings solutions
shipping market. Founded in 1722, PPG’s
life exposure conditions, ensuring that product
The working life and profitability of all marine
SIGMA COATINGS® brand has been a symbol
performance meets the challenges of each
vessels is highly dependent upon the coating
of sustainable success built on strong core foun-
specific environment.
systems applied. The SIGMA COATINGS range product
meets these commercial challenges with the
customer demands and provide unique solu-
development and placement from cradle to
latest fouling release technologies, chemically
tions in an ever-changing global market. SIGMA
grave, including a detailed business plan, product
resistant coatings for aggressive and toxic
COATINGS remains firmly at the forefront of the
profile, proper verification and trial launch. The full
cargoes, impact and abrasion-resistant cargo
marine protection market due to our product
process, described in ISO procedures and forms,
hold coatings, superior ballast tank protection and
range that meets every marine requirement.
is the cornerstone of PPG’s high standards and
easy maintenance systems for superstructures
delivers optimal product performance.
and decks.
dations, demonstrated by our ability to anticipate
Visionary quality processes
Our
quality
processes
follow
As a manufacturer, PPG has been certified by
All our coating solutions are built on an in-depth
A complete focus on quality and innovation are
international organisations for compliance with
knowledge of the industry, our customers’ day-
PPG’s integral brand values. By monitoring the
ISO 9001 and ISO 14001 standards. Meticulous
to-day challenges, and the environmental, health
industry and continuously enhancing systems,
strategic planning also ensures that production
and safety standards in the market. By working
supply chain and after sales services, we
facilities meet the demand for products without
closely with our customers we maintain a high
have developed an expert and holistic quality
compromising quality, consistency or reliability.
level of understanding of their constantly changing
approach, constantly investing in R&D to offer the
However, our intention is not limited to simply
needs – not just for today, but also for tomorrow.
supplying high-quality products. We are also
most innovative coating solutions. The development of any marine coating
committed to providing customers with expert
system requires careful and time-consuming
field service worldwide through our Global
work. Before introducing a new product into the
Field Technical Services department, with most
market, our R&D laboratories carry out extensive
inspectors having undergone special training and
product testing. This includes field-testing
received Frosio, or comparable, certification.
Progress means taking risks T
he world needs risk. Because moving for-
globe and support teams that help them do
ward is about risk. And that’s the business
what they do best. From large corporations to
we’re in. Change is changing. Problems are
mid-sized businesses, we can serve clients in
greater. What we do helps change industries
more than 100 countries. Our capacity means
and turns new ideas into reality.
we can work across their Casualty, Property,
From ships and planes to artwork and
Professional and Specialty risks.
thoroughbreds we are one of the largest Specialty Lines insurers in the world by breadth
Facts and figures
of product range and geographical reach.
We focus our business on P&C (non-life)
As well as knowing what’s already happened,
insurance and reinsurance activities. Our
we’re also tuned into what’s next. Scanning the
companies have strong relationships with the
horizon for new trends. Always watching out for
world’s leading global, regional and independent
new threats.
brokers.
We do risk like no one else
than 1,600 global programmes and lead more
Businesses that are moving the world forward
than 70% of these.
Our insurance businesses participate in more
choose us as their partner. Because we analyze
We have approximately 4,000 employees
the numbers but listen to their dreams. Because
worldwide. Including about 600 underwriters,
we’re experts in our field, but always open to
400 claims experts and more than 200
new possibilities. And because we make top
engineers. And we are continuing to grow.
service and fast, fair claims handling our priority. It’s
all
thanks
to
widely
experienced
underwriters who are experts in the industries they serve, engineers who work across the
theBaltic Summer 2012 www.thebaltic.com
85
Commercial profiles
Protection Vessels International P
VI is a maritime security company, special-
The company was founded in 2008 by
ising in the provision of embarked security
Dom Mee, a former Royal Marine, and has
teams and escort vessels for merchant ship-
over 100 permanent employees in offices in
ping transiting high risk areas of the world’s
Tiverton, Devon and Caddington, Bedfordshire,
oceans. PVI currently carries out more than
as well as representatives and offices in the US,
180 armed transits of the High Risk Area each
Singapore and Hong Kong.
month and has an extensive logistics footprint throughout the region. PVI is the leading provider within the sector with more than 2,700 armed transits completed between Jan 2010 and May 2012 by over 850 experienced maritime security professionals, all British, former Royal Marines. In addition PVI owns and operates a fleet of 4 patrol boats supporting the onboard teams and escorting vulnerable shipping assets through the HRA. PVI consults and advises on all aspects of maritime security and training for ship’s crews to deal with various security situations. Through deterrence and prevention, PVI is
Tel: +44 (0)1884 842 878
capable of providing robust physical defence
E-mail: customerservices@pviltd.com
for vessels as and where required.
Web: www.pviltd.com
About DP World D
P World operates more than 60 terminals
In 2011, DP World handled nearly 55 million
across six continents as of March 2012.
TEU (twenty-foot equivalent container units)
Includes non-container terminals., with con-
across its portfolio from the Americas to Asia.
tainer handling generating around 80% of its
With a pipeline of expansion and development
revenue.
In addition, the company currently
projects in key growth markets, including
has 11 new developments and major expan-
India, China and the Middle East, capacity is
sions underway in 10 countries.
expected to rise to around 103 million TEU by
DP World aims to enhance customers’
2020, in line with market demand.
supply chain efficiency by effectively managing container, bulk and other terminal cargo. Its
www.dpworld.com
dedicated, experienced and professional team of more than 30,000 people serves customers in some of the most dynamic economies in the world. The company constantly invests in terminal infrastructure, facilities and people, working closely with customers and business partners to provide quality services today and tomorrow, when and where customers need them. In taking this customer-centric approach, DP World is building on the established relationships and superior level of service demonstrated at its flagship Jebel Ali facility in Dubai, which has been voted “Best Seaport in the Middle East” for 17 consecutive years.
86
theBaltic Summer 2012 www.thebaltic.com
Commercial profiles
SAL sets the heavy-lift standard O
wned by SAL – one of the world’s lead-
Together with its sister vessel, MV Lone, the
operates an international network of agencies
ing heavy-lift organisations – MV Svenja
MV Svenja is one of the two largest heavy-lift
and offices worldwide. It has a total of 570
has successfully completed the transportation
vessels in the world. Both vessels have a lifting
employees across the world and operates
and positioning of five wharf modules of up
capacity of 2,000ts, a speed of 20 knots and
a fleet of 16 heavy-lift ships. The vessels’
to 700 mtons unit weight for the new Iron
a DP System. With these features, the vessels
management is fully handled in-house. SAL’s
Ore Berth (Berth No 7) in the port of
have all the necessary elements for undertaking
internal engineering department deals with all
Geraldton, Australia.
highly complex projects for the oil and gas
technical load-related matters, while developing
industry, as well as for the offshore sector.
innovative transportation solutions for individual
The modules were loaded in Thailand and transported to the site in Geraldton, where they
In November 2011, Mv Lone got DP2
were discharged on to stabbing pile, requiring
upgrade, which means the vessel received one
a very accurate and careful cargo handling.
additional 1,200 kW bowthruster, two retractable
Despite challenging swell conditions, the
azimuths of 1,200 kW each and three 1,600 kW
operation was completed safely and fast.
auxiliary engines to secure the power supply for
customer needs.
the redundant dynamic positioning system. To optimise the functionality of the high
SAL Heavy Lift GmbH
capacity cranes in offshore operations, the vessel
Buergerei 29
was further equipped with a motion monitoring
21720 Steinkirchen
system. Apart from its high performance, the
Germany
heavy-lifter also possesses an Environmental Passport, which means it meets the highest
Tel: +49 4142 81810
environmental standards. It is also ISO 14001
Fax: +49 4142 810281
and OHSAS 18001 HSE certified.
sal@sal-heavylift.com
From its head office in North Germany, SAL
theBaltic Summer 2012 www.thebaltic.com
www.sal-heavylift.com
87
Events
What’s on where A round-up of conferences, exhibitions and events in the shipping world 30-31 May, Jakarta
11-12 September, Singapore
10th ASEAN Ports and Shipping Conference
Global Liner Shipping Asia Conference
The biggest annual ports, shipping and logistics exhibition in the ASEAN region. Enquiries@transportevents.com
Focusing exclusively on Asia’s liner shipping industry. www.informaglobalevents.com
26 September, London Lloyd’s List Global Awards 2012
4-8 June, Athens Posidonia 2012 The world’s largest maritime event taking place at the Metropolitan Expo Centre this year. www.posidoniaevents.com
Independently judged and designed to recognise excellence in the shipping industry, The Lloyd’s List Global Awards 2012 acknowledges the successes of top class performance. http://awards.lloydslist.com/global-awards-2012
26-27 September, Singapore
12 June, Cyprus
Green Ship Technology Asia Conference
1st Mare Forum Cyprus
The largest Asia Green Shipping and Green Ship Technology event for the maritime industry www.informaglobalevents.com
Eastern Mediterranean Oil & Gas: Offshore Exploration, Production, Maritime Transportation, Maintenance, Sustainability, Investments and Finance. To register for the conference please click on: www.mareforum.com/Mare_Forum_Cyprus_Registration_2012.htm
19-20 June, Antwerp Shortsea-Euro Latest in a series of conferences designed to bring together European shipping companies and their customers as well as a range of service providers including ports, terminals, forwarders and 3PLs. www.navigateevents.com
2-3 July, Singapore Freight Derivatives & Shipping Risk Management An introduction in to the use of derivatives in the management of financial risk in shipping. FFAs, bunkers, interest rate, credit, ship value. www.balticexchange.com/training
15-16 November, London Tanker Safety Conference A two day event focused on all aspects of operational safety and emergency response in the tanker industry, and of direct relevance for charterers, owners, regulators, industry associations, finance and insurance, class, system suppliers and service providers. www.rivieramm.com
31 January – 1 February 2013, London Passenger Ship Safety Conference A two day event focused on all aspects of operational safety, security and emergency response in the passenger shipping industry and offering an opportunity to discuss current and future issues, gather intelligence and network with key industry stakeholders. wwwrivieramm.com
4-5 July, Singapore Advanced Freight Modelling & Trading Training course covering forward curves, freight rate volatility, VaR, options pricing and risk models. www.balticexchange.com/training
88
theBaltic Summer 2012 www.thebaltic.com
www.imarex.com
Optimal solutions for freight clearing NOS Clearing is the specialised clearing house for the freight industry: • • • • • • •
The most complete product suite for Risk Management. Successfully launched FX clearing services to complement the freight product offering. Offering the most Competitive Clearing Fees and Volume Discount Schemes in the freight market. Providing the most Flexible Clearing Platform with prompt introduction of new routes according to market needs, first class back office and risk management applications. First to offer clearing of Iron Ore Options, cash settled contracts enthusiastically welcomed by the industry. Accessible through Direct Membership or General Clearing Members. A neutral clearing service open to all Approved Brokers (Now also included Baltex and Cleartrade Exchange).
Markets cleared by NOS: • Freight Derivatives (Dry and Tanker products) • Bunker Derivatives • Iron Ore Derivatives • FX Derivatives • El-certificates • Salmon Derivatives • Power and UK Gas Derivatives Contact us at: Tel: +47 23 25 93 01 Email: operations@nosclearing.com www.nosclearing.com