EMSA pollution call - Ship Management International

Transcription

THE MAGAZINE OF THE WORLD’S SHIPMANAGEMENT COMMUNITY
ISSUE 1 MAY/JUNE 2006
SHIPMANAGEMENT FEATURES
42 Questioning industry ethos
- a round table exclusive
28 Getting to grips with the bottom line
16 How I work
A vital ingredient influencing the planning of shipping
operations, whether directly or with third party involvement,
is understanding the competitive cost base in the key areas of
operating expenses
SMI talks to four industry
achievers, and asks the
question: How do they
keep up with the rigours
of the shipping industry?
32 Glamorising the art of shipmanagement
It’s hard to imagine there are any celebrities in shipmanagement but there is something about V.Ships’ ebullient and flamboyant president that brings in the crowds
37 Third party shipmanagement
Is it the panacea to the industry’s woes?
China’s impact on the global shipping industry is not
lost on the crew travel sector with an anticipated
growth in travel demand forcing many managers
to take more operational control.
62 InterManager
InterManager is 15 years old this year. We examine the association's development and analyse its achievements and objectives
78 Crew travel
SHIP MANAGEMENT INTERNATIONAL
3
6 STRAIGHT TALK
OWNER PROFILE
58 ASTUTE PURSUIT
NOTEBOOK
8 Crew health
ONMYMIND
Being aware of the effect poor seafarer
health and safety has on a fleets'
efficiency
9 Boxports
The pace of growth in the European
and Mediterranean container trades
continues at a dynamic pace, driven
by globalisation, larger vessels and
expansion in the intra-regional trades
9 Annette Malm Justad
CEO of EMA
13
Homeland Security
US Dept. of Defense
There are some in the shipping
industry who remain concerned that
the Bush administration's Homeland
Security policy lacks any clear
strategy including who is going to
foot the bill
Mercator Lines - a true success story.
The market opportunity that Mercator Lines
exploited to the hilt was by way
of acquiring and running
single-hulled tankers for
crude carriage, at a time
when these tankers had
been condemned by the
IMO for phase-out by the
year 2010
REGULATORY RADAR
60
Mitropoulos ‘fatigue’ worry
EMSA pollution call
Brussels backs Lithuanian seafarers
EC competition probe
International initiative on Baltic pilotage
LAW
LETTERS
14 HONEST COMMENTARY
PROACTIVE ENGAGEMENT
74 Repeal of Regulation 4056
MAILBOX
SMI asked two leading law firms from either side of the Atlantic to give
their views on the European Commission’s plans to abolish Regulation
4056/86 (European Liner Shipping Conference Regulation)
BUSINESS OF SHIPPING
GREECE
21 Ad Hoc 22 P&I
76 Spotlight
Frankly speaking
Fraud and overcharging of seafarer medical bills is a pill very bitter
to swallow
Costamare Shipping
Diamantis N. Manos
80 Finance and Banking
Recently published research shows
that banks continue to trust Greek
shipping especially as their lending
to it has risen yet again. We look at
the facts
MARKET WATCH
Making it
the old
fashioned way
LIFESTYLE
24
The noble art of the asset play was once considered the only way
to make money in shipping and, traditionally, a nobleman never
tarnished himself with something as vulgar as trade. So is the
traditional asset player dead?
TRADE
40 Dun and Bradstreet
China - The financial indicators
and risk factors
4
88 Vantage V8
FIRST shown as a
concept car at the 2003
North American
International Auto Show
in Detroit, but with
deliveries to customers
not starting until late
2005, the Vantage
immediately caused a
worldwide sensation
STRAIGHT TALK
Welcome to
Ship Management International
May/June 2006
Issue No. 1
www.shipmanagementinternational.com
The Shipping Business Magazine
today's owners and managers
have been waiting for
Published by
Elaborate Communications
Acorn Farm Business Centre
Cublington Road, Wing,
Leighton Buzzard, Bedfordshire LU7 0LB
United Kingdom
Sales/Accounts
+44 (0) 1296 682241/682051
Editorial
+44 (0) 1296 682356
Fax:
+44 (0) 1296 682156
Email: [email protected]/[email protected]
www.elabor8.co.uk
Ship Management International Editorial Board
Rajaish Bajpaee
(Eurasia Group of Companies)
Stephen Chapman
(InterManager)
Nigel Cleave
(Dobson Fleet Management)
Andreas Droussiotis
(Hanseatic Shipping Company)
Dirk Fry
(Columbia Ship Management)
Sean Moloney
(Elaborate Communications)
Svein Pedersen
(Thome Ship Management)
Editorial Director:
Sean Moloney
Advertisement Director: Jean Winfield
Sales Manager:
Mark Howe
Sales Support:
Martine Frost
Research Manager:
Roger Morley
Accounts:
Irene Morley
Design & Layout:
Phil Macaulay
Editorial contributors:
The best and most informed writers currently serving
the global shipmanagement and shipowning industry.
ABC application approved March 2006
Ship Management International is published six times
a year and is entirely devoted to reporting on the
dynamic and diverse in-house and third party
shipmanagement industry.
Subscriptions UK and ROW – 1 year: £85 ($153);
2 years: £160 ($288).
Send all subscription enquiries and/or address
corrections to:
Elaborate Communications, Acorn Farm Business
Centre, Cublington Road, Wing, Leighton Buzzard,
Bedfordshire LU7 0LB, United Kingdom.
Tel: +44 (0)1296 682051/682241/682403
Printed in the UK by Cambrian Printers. Although every effort has
been made to ensure that the information contained in this publication is correct, Elaborate Communications accepts no responsibility or liability for any inaccuracies that may occur or their consequences. The opinions expressed in this publication are not necessarily those of the publishers. All rights reserved. No part of this
publication may be reproduced whole, or in part, stored in a
retrieval system or transmitted in any form or by any means without prior permission from Elaborate Communications.
Approved and Supported by
6
A NeverEnding Story
T
he shipping industry has a habit of
moving in cycles. The markets are
cyclical, we all know that, and the
good times follow the bad times as
sure as night follows day. But the
debating of key issues influencing, and holding
back, the shipping industry is as predictable as
it comes. Indeed, whether it is the role of class,
the need for greater information transparency or
the call for urgent action to plug a widening seafarer recruitment and retention gap, it seems we
have heard it all before.
But the time has now come for action. Tough
action that needs to be taken to safeguard the
future of the shipping industry and ensure there
are no further vessel casualties, oil spills or seafarer deaths. I am talking about investing in a
qualified and plentiful pool of seafarers with the
stakeholders being the entire shipping community. A prominent shipping executive summed
it up perfectly when he told me: "You cannot
have only one guy carrying out a good training
programme, everybody has to do it. If as an
industry we are moving ahead in the same
direction then all players will benefit because a
seafarer on your ship today may be working on
my ship tomorrow.”
And he is right. Today's seafarer is a free
agent and can come and go as he pleases from
one employer to another taking his hard earned
and expensive training with him. He may also
leave the industry if he feels the financial
rewards are not justified. A bit of a waste you
will all agree. But the problem does not end
there. Some managers are fearful that the rapid
promotion rates currently being witnessed in
some corners of the industry could have detrimental effects on the quality of the seamanship
onboard the world's ships. Also there have been
cases where a seafarer sacked from one company has immediately walked into a more prestigious job with another competitor. Worrying
times ahead.
But act we must and in-house and third party
managers must accept they have to cooperate
on this issue to benefit all. Having highly qualified, competent and hardworking crews
onboard ship is not about corporate or commercial one-upmanship, it is about safety, clean
seas and projecting a positive image about the
shipping industry. So open up the doors to your
training establishments, work together to recruit
and retain your shipboard staff and above all
lets start doing what we have been talking about
for years.
Your SMI
I have great delight in welcoming the world's
in-house and third party managers to the launch
issue of Ship Management International.
Published every two months, we will use only
the best writers there are to bring you the objective and hard-hitting shipping business coverage and analysis you have demanded. If you
have any views or comments about our first
issue then please forward them to me at
[email protected]. I would like to thank
the shipping industry for supporting this magazine, in particular the members of InterManager
who have chosen it as their preferred shipmanagement reading and also many of the world's
owners who have craved a magazine that will
objectively cover this vibrant and exciting industry that is shipmanagement. I would also like to
thank the members of SMI's editorial board
whose job it is to ensure we report accurately and
in an unbiased way and to the tremendous
and professional team that is Elaborate
Communications who are every bit as passionate
about the shipping industry as I am.
Good reading!
Sean Moloney
NOTEBOOK
SHIPMANAGEMENT NEWS AND REPORTS FROM AROUND THE WORLD
Crew health
desperate for a much needed shot in the arm
S
hipowners and managers should be
more aware of the effect poor seafarer health and safety is having on their
fleets' efficiency as they face losing
hundreds of thousands of dollars through
unnecessary vessel deviations and stoppages
due to accidents onboard, brand new figures
suggest.
Different surveys published by two separate and highly respected seafarer health service providers in the US claim that not only is
seafarer health and safety a growing concern
for shipowners but the number of mental
health problems among the world's seafarers
is growing at an alarming rate. And this is all
having an effect on owners' bottom line.
Indeed according to one leading medical
practitioner we interviewed, an emergency
evacuation or a single repatriation of a sick
crew member back to their home country can
cost as much as $100,000 if the case is complex. “Treating them appropriately as soon as
possible even on the vessel can sometimes
eliminate the need for an emergency evacuation and lead to a better outcome for the seafarer,” he said.
In a survey of 10,319 incidents reported to
MedAire in the 10 years to July last year over
2,158 were skeletal while 1,245 were of a
dematological nature. As many as 1,022 incidents, or 9.9% of the total related to ear, nose
and throat infections while a significant
9.24% had to do with gastrointestinal problems among crew members. Interestingly, 95
calls, or just under 1% of the total, related to
psychiatric issues – an area of growing concern among today's seafarers. According to
the MedAire data, 17.5% of the calls related to
prior conditions of which skeletal again
topped the list at 23% followed by genitourinary at 10% with dermatological and dental
both at 9%. Infectious diseases accounted for
7% of the prior condition incidents.
Worryingly for the shipowners and managers, 23% of the incidents reported were job
related with 15% unknown.
A similar survey by the Department of
Emergency Medicine at the George
Washington University of over 866 seafarerrelated medical advice calls over the last five
years shows that a massive 83.8% of calls
were medical with 14.4% injury-related and a
similar 1.8% of calls to do with psychiatric
problems among the ships' complements. Of
the shipboard telephone calls or emails handled personally by the University's emergency physicians, injuries and psychiatric cases required a significantly higher number of contacts per case compared with medical cases. Psychiatry
cases accounted for the most medication
with 12.5% requiring four medications.
According to Dr Ray Lucas, Medical
Director and Assistant Professor at the
Department of Emergency Medicine at
the George Washington University,
medical care providers are seeing more
psychiatric problems among seafarers
and there have been more cardiac and
diabetic problems associated with an
older composition of crew members over the past 15 years.
“We have received calls on
crew members as old as 70.
We also encounter more difficulty in getting good information on a growing number of
expatriate or immigrant crew-members where English is not their primary
language. One supposed case of seasickness ended up being vomiting from a
diabetic complication; the diabetes was
not disclosed beforehand and finding out the
information at the time was difficult because
the crew member did not speak English,” he
said.
Michael van Hall, Managing Director of
Maritime Operations at HSI/vHH, a leading
maritime medical case management company,
said health screening of seafarers was the only
real tool in the fight against poor health onboard
ship. Shipowners had to think very carefully
8
about “screening sailors because under international maritime law once they have signed to go
onboard a ship, their health becomes the
shipowners' responsibility”, he said.
He added: “In the U.S. the simple
Department of Transport exam ensures most
sailors are passed ‘fit’ but the reason we are
able to screen out between 12% to 15% of
these “Fit For Duty” card carrying applicants
is that the average seafarer age is 58 years
old and only more comprehensive tests
will highlight the true medical condition of the sailor. We have conducted
over 55,000 exams and have never
been sued by the unions for turning
down their members. Their Medical
Directors all admit that if they were
allowed to run the same tests as we
do, they would have disqualified the
sailors themselves.”
This was a point echoed by Dr
Lucas: “Under US employment law and with some
union regulations, if a crew
member can find a physician
to declare them “fit for duty”
sometimes the shipping company has no other recourse than to
let them go to sea. It is the quality
of the medical screening that is most
important.”
Rowland Raikes, director of the
UK-based
Medical
Rescue
International, said seafarer health was
influenced by the type of physical jobs
involved onboard ship as well as the normal instances of cardiac and stroke problems
certainly among older members of the crew.
But he stressed: “Medical screening can help
to block out a lot of these illnesses such as cardiac problems, hepatitis, diabetes and obesity.” Malaria was a problem, he commented,
because while the prophylactic may work in
one location, by the very fact that the ship is
always on the move, it may not prove to be
beneficial at another port of call. ■
NOTEBOOK
Europe's boxports
set to enjoy explosive growth
ONMYMIND
Annette Malm Justad CEO
I
t’s a boom time in shipping if we
believe all that we read. The markets
have performed better than they have
for years, the shipbuilding yards are
full and scrapping is at an all time low. And
as if that is not enough, the pace of growth
in the European and Mediterranean container trades continues at a dynamic pace,
driven by globalisation of the world economy, the introduction of much larger vessels
into the deep-sea trades with associated
rapid feeder demand growth and also
strong expansion in the intra-regional
trades.
Well these are the finding of a new report
by Ocean Shipping Consultants which
claims the outlook is for continued sustained demand growth in the European and
The pace of growth
in the European and
Mediterranean container
trades continues at a
dynamic pace, driven by
globalisation, larger
vessels and expansion in
the intra-regional trades
Mediterranean container port markets with
the strongest rates of growth focused in the
eastern parts of the region – the Baltic and
Black Sea markets and in Turkey. Indeed,
analysis of historical figures shows that
container port demand in Europe and the
Mediterranean increased by 126% in the
nine years to 2004 and by 40% to 77.23m
teu between 2000 and 2005. Over the
decade, the share held by ports in South
Europe and the Mediterranean increased
steadily from 39.6% to 46.2% while total
container
transhipment
throughput
increased more than threefold between
1995-2004 and by 58% to 22.5m teu in the
four years to 2004. The share of the South
Europe/Mediterranean region increased
from 45.4% in 1995 to 58% in 2004.
The share of trade by the ports in the
western north-continent range has
remained broadly stable, the report suggests, while ports in the UK have lost ➩
Annette Malm Justad (48) took over as
CEO of Eitzen Maritime Services ASA on
April 1st 2006. She was previously Vice
President and Head of Purchasing in Yara
International ASA (Hydro's fertilizer arm).
She holds a chemical engineering degree
from NTH and a Masters degree in
Technology
Management
from
MIT/NTH/NHH. She is also a member of
the board of Camillo Eitzen & Co ASA.
What is the biggest business issue currently
concerning you?
“
Apart from working to see Eitzen Maritime
Services grow and develop in the way we want it
to, I think from a general shipmanagement point
of view I am concerned at the situation facing the
recruitment and retention of quality seafarers. At
EMS we try to create a platform whereby the seafarers feel they reap more benefits than just
receiving a salary such as quality training, quality ships and qualitywork.
”
How can shipmanagers keep costs lower?
“
As a ship manager you have to be wary of
keeping costs too low that money drains out the
other end of the pipe. It is about striking a balance between keeping costs down yet maintaining a quality service.
”
Do shipowners receive the third party shipmanagement service they deserve?
“
A lot depends on the actual shipping trade you
are in as the perceived standards will be
different.
”
How will the shipmanagement industry
change in the next five years?
“
There is bound to be more consolidation in the
sector especially if regulations become more
onerous and demanding from inside and outside
the industry.
”
continued on page 11
9
NOTEBOOK
continued from page 9
market share due to the transfer of transhipment flows to the north continent and
increased feedering of smaller ports in the
British Isles from the north continent, which
has resulted from the near-saturation of
capacity at UK deep-sea ports.
Container port demand in South Europe
and the Mediterranean grew by 164%
between 1995-2004 and by 45% between
2000-04. Over the decade to 2004, the
Central Mediterranean range gained in share
from 27.9% to 32.1% - derived from both
import/export growth and the establishment
and strong expansion of transhipment handling. However, in the four years to 2004, the
shares of the Western Mediterranean and
Eastern Mediterranean/Black Sea ranges
advanced relative to the other two ranges.
While growth in the Central Mediterranean
was held back by capacity constraints and
other problems, import/export and transhipment handling in the Western Mediterranean,
where Spain is the dominant port market,
both posted strong increases. At the same
time, the expansion of the Turkish container
port market has been particularly instrumental in boosting demand in the eastern
Mediterranean. The establishment of a new
transhipment hub at Port Said east and rapid
growth in the Black Sea markets will help
sustain this trend. The relative significance of
the Atlantic region has fallen back slightly,
essentially due to the smaller scale and slower growth of activity on the Iberian coast and
in the Atlantic islands.
The development of transhipment will be a
compound of underlying economic-growth
induced demand and the policies of major
operators in converting direct flows into transhipped flows. Over 2004-10, non-transhipment (essentially import/export) container
handling demand in North Europe is forecast
to grow by up to 51% to 48.4m teu. Further
expansion of between 25% and 34% to
between 56.9m and 64.7m teu is anticipated
in 2015. North European transhipment
demand is forecast to increase by between
56% and 68% to between 14.73m and 15.87m
teu in the six years to 2010 and by a further
31%-42% over 2010-15. ■
CRUISING THE NET
Shipyards are slowly coming round to the
benefits of embracing internet technology to
reduce shipboard costs with at least one
cruise ship newbuilding mulling over the
idea of installing Voice over Internet Protocol
(VoIP) for its onboard communications.
Martin van der Veeken from communications giant NEC Philips believes that converging different technologies onto one communicating infrastructure such as SIP
(Session Initiation Protocol) which is fast
becoming the industry standard, will cut
voice and data communication costs and
present the possibility for future communication advances. Watch this space! ■
NOTEBOOK
The rising co$t of Homeland Security
W
hile America's efforts to
protect its ports and
coastal waters against
terrorist attack may be
grabbing the newspaper headlines,
there are some in the industry who
remain concerned that the Bush
administration's Homeland Security
policy lacks any clear strategy
including who is going to foot the
bill.
By summer's end, more than
400,000 port workers will be
matched against the terrorist watch
lists as the first major step to tighten
port security. Ultimately, by year's
end, all 750,000 workers with unrestricted access to ports will need
tamper-free identification cards. But
with the government planning to
spend hundreds of millions for new
technology to safeguard US ports,
some businesses wonder about the
risks and benefits of the new tools.
Besides security checks for workers,
Homeland Security wants a “new
generation of tools” to detect nuclear
materials and to better screen all
inbound cargo, such as radiation
monitors that would be used to
inspect some of the 11 million cargo
containers entering the US daily.
Already, 214 monitors are in place,
screening more than half the cargo
entering US ports for radiation, officials said. By the end of next year,
they said, 621 monitors will be
installed capable of screening 98%
of incoming shipments. Customs
officials say that there will be
enough money in the budget to purchase and install the monitors. ■
13
LETTERS
MAILBOX
HONEST COMMENTARY Thome Ship Management Pte Ltd
SIR. The community of independent ship managers around the world
is changing at a faster pace than ever before. As more quality services are demanded by our principals, every manager seeks ways of
improving performance and creating extra value for our valued customers. One of the ways in which we can achieve this is by improving our information flows within our own companies and in the wider
marketplace. Good quality information for ship managers is vital as
it helps us make better decisions for the benefit of our principals. In
areas such as new technology, telecommunications, education and
training and technical services, today’s successful ship manager
needs to be fully aware of developments that often take place rapid-
Good quality information for ship managers is
vital as it helps us make better decisions for the
benefit of our principals. In areas such as new
technology, telecommunications, education and
training and technical services.
ly. That is why Thome Ship Management was delighted to hear about
the launch of Ship Management International magazine.
As proactive members of the InterManager Group, Thome is
delighted to acknowledge the first publication dedicated solely to the
independent, third-party shipmanagement sector – an increasingly
important sector in world shipping today. We believe this new magazine will provide the market with a much-needed clear and honest
commentary on global shipmanagement trends and will act as a truly
independent voice in an industry in which independence becomes
ever more important.
We look forward to seeing Ship Management International become
established as the premier publication serving the entire shipmanagement community all over the world. As a forward-looking manager at
the forefront of many of the exciting new trends in shipmanagement,
Thome welcomes the launch of Ship Management International.
Olav Eek Thorstensen,
CEO and President, Thome Ship Management, Singapore
PROACTIVE ENGAGEMENT Stephen Chapman
Moulding this fine industry in
the way that’s best for it.
SIR. The need for self-regulation of the
shipmanagement industry with verification rather than following the demands of
a compliance culture are the driving
forces behind InterManager’s KPI initiative. The processes of self-regulation need
uniform measurement criteria.
While it is important that shipmanagers
are able to agree on a standard for operational KPIs that gives a representative
picture of the quality of a ship's operational performance; is limited in number;
is transparent and is economic to collect,
there is a clear need to engage with the
regulators in a more pro-active way. So
many changes in rules are coming from
the IMO and elsewhere today that the
only way forward is to join forces on a
broad front and use the combined
resources of all concerned to ensure that
the practitioners’ viewpoint is not missing
from the legislative process. Currently,
there are huge gaps between the discus-
14
sions and decisions taken at policy conferences and in policy making bodies and
what actually goes on at sea.
InterManager sees its agreements and
relationships with BIMCO, INTERCARGO and INTERTANKO as essential in
heading-off increasingly reactive, knee
jerk and politically inspired regulation.
So we ask the shipping industry in general and the shipmanagement sector in particular to put their support behind our
KPI initiative so we can start helping to
mould this fine industry in the way that’s
best for it.
Stephen Chapman
General Secretary
InterManager
SHIPMANAGEMENT
HOW I WORK
How I
work
SMI talks to four industry achievers, and asks the question: How do they keep
up with the rigours of the shipping industry?
PETER CREMERS
CEO, Anglo-Eastern Group, Hong Kong
When a task requires the personal touch,
I am normally there, arm deep, getting it done.
I like to use the afternoons effectively and
most days senior management will stop by
to discuss issues they are working on;
others may be after my advice
“
”
16
“I am up at around 6am every morning and go straight out for a jog.
Keeping fit is important but so is family life so by 7.30am I like to be sitting down to breakfast with my family and reading through the morning's
newspapers.
“The office is a subway ride away and I am usually at my desk no later
than 8.45am. I dive straight into my emails and talk with senior management to catch up with happenings overnight. My press assistant also
keeps me up to speed with any relevant news events that may have
appeared in the shipping and local press. Customer liaison is essential and
I like to keep in regular contact with our principals to check in with what
news they may have. A quick call to Anglo's Montreal and US offices
keeps me abreast of their developments as by this time they are just closing up for the day and may have something to report.
“At 10:30am every morning we hold a senior management meeting
where each member of staff takes a turn in presenting what has happened
within their department over the previous 24 hours. This usually takes
half an hour. I also try to find time to phone our Singapore office and
Tokyo is next on my list as we have a lot of Japanese customers who for
language reasons alone, liaise directly with our representative in the city.
Shanghai is my next 'port of call' to see what developments have been
going on in our newest management office.
“It is not unusual for clients to visit our offices either passing through
or to specifically visit the superintendents looking after their ships. I may
take the opportunity to take them out to lunch or I may find myself at a
shipowners' association luncheon or even take a bite to eat with my senior staff. Once back in the office, I will call our Mumbai office to see what
is happening there and as the afternoon moves along, will talk to our
Antwerp and Glasgow offices respectively.
“I like to use the afternoons effectively and most days senior management will stop by to discuss issues they are working on; others may be
after my advice. I also use the afternoons to check in with staff involved
in setting up our annual seminar in Mumbai. This is our chance to show
our clients our facilities in Mumbai and for them to meet any crew who
may be on leave at that point in time.”
HOW I WORK
SHIPMANAGEMENT
Peter Cremers is one of three owners of Anglo Eastern alongside
Marcel Liedts and Richard Wong. Within that group his responsibilities
are the commercial side of the business and he has two main priorities:
clients and staff. PC is a naval architect by trade, so he does have the ability to manoeuvre in the technical area, but leaves the majority of it to
Marcel Liedts, Group Managing Director and technical wizard!
He describes himself as both a 'doer' and a 'delegator'. “I am very good
at both! When a task requires the personal touch, say a specific request
from a client, I am normally there, arm deep, getting it done. My colleagues say I am usually not to be messed with in this scene as I am in
'Go' mode. On the flip side, when a job requires a number of people
working together I can take charge and delegate to arrange the best possible team and supervise their progress accordingly.
“By 6-6.30pm the day is closing, and I will either head to a private
meeting (usually with the Belgian Chamber of Commerce – I am their
Vice-Chairman in Hong Kong), take dinner with clients or head home.”
WIM VAN NOORTWIJK
President, International Ship Suppliers Association
Chairman of the Governance Board, and part owner of Antwerp
Shiprepair NV., The Netherlands
I get a lot of emails and I have up to four
'secretaries' in my various working businesses
separating the wheat from the chaff so to speak
“
”
My work with ISSA is very important and I spend a lot of time helping
to push forward the association’s goals and intiatives
For a man who once worked for John Wayne and Kerry Packer you
would think that heading up an international trade association for ship
suppliers would be a doddle. Seemingly not! “It has its challenges,” notes
Wim van Noortwijk, ISSA President, “but we remain focused on achieving our goals of quality and integrity in the ship supply business and will
work hard to see them through.” The John Wayne connection? “He had
invested in an oily water separator company and as a young man in my
20s, I was asked to come to California to work briefly with him.
“I am one of those people who like to read the morning papers in my
bedroom, relaxing with a glass of fruit juice. Normally I read two Dutch
papers as well as watch the Belgian and Dutch news on the TV before
clicking over to CNN. I have a private office at home so I spend the first
part of the morning going through emails and making telephone calls to
the Far East. I split my time between ship supply, the ship repair yard and
my other business interests so my day will generally be mapped out by
how things are progressing first thing in the morning.
“I get a lot of emails and I have up to four 'secretaries' in my various
working businesses separating the wheat from the chaff so to speak. I
don’t believe in replying to all emails because not all are invited. If I
answered them all I would be there all day.
“Depending on my workload, I have the option of travelling to my
shipyard in Antwerp, going to my procurement company in Holland or
spending time with my other businesses which include a waste water
treatment business in Holland. My work with ISSA is very important and
I spend a lot of time helping to push forward the association's goals and
initiatives. I work very closely with the association secretariat in London
who helps to plan my time as well.”
Only eight months into his third term as president of ISSA, Wim van
Noortwijk has set out a three year plan that he believes will take the association to higher levels of quality and accountability. “ISSA needs to
strengthen into an organisation that can continue to help its members in
their specific market situations; further define what and who is an ISSA
member by demanding stronger and more quality-driven membership criteria; create joint ventures and incentives that benefit ISSA members such
as education, leasing and factoring etc. and above all, the association
must use its clout as a representative association in the international ship-
ping industry to promote and elevate the global image of the quality ship
supplier. I want to see ISSA grow to represent more fully the international ship supply sector by extending the membership criteria to groups currently excluded such as suppliers to ship suppliers; maritime manufacturers; other maritime industry associations; lawyers; logistics providers;
management and service companies; ships agents; as well as ship supply
agents/consultants and shipyard service and repair companies.
“I am very disciplined as a person and like to think that my value is in
corporate governance and strategy. Because of a lifetime surrounded by
operational experiences across the wide spectrum of shipping I feel I have
built up a sound knowledge and understanding of most aspects of shipping. Senior management entering shipping today tend to have a fuller
and more detailed education than we ever did but we benefit from a lifetime of experience that gives us a more global approach to issues.
“Sport is very important to me but I am not into jogging but I play at
least two games of hockey every week – normally for a pensioners side
in Holland. We play our games throughout Belgium and Holland so I can
find myself driving two to three hours to a game. I also referee games in
the Dutch national hockey league as well as veteran tournaments in other
countries such as Greece, Switzerland, UK and Singapore. We are all getting older and I find I need two to three days to recover. I am also a certified Austrian ski instructor so I like to take to the slopes in the winter.
My other passion is my 71.6 foot long ex-RNLI lifeboat called 'Dolphin'.
I sail her off the Dutch and Belgian coasts and have been as far down as
the Isles of Scilly.” ➩
17
HOW I WORK
SHIPMANAGEMENT
The single most important aspect I have
learned is how to build, and value, the
trust and confidence of my association
colleagues within the shipmanagement
industry who also happen to be my
competitors at a corporate level
“
”
RAJAISH BAJPAEE
President and Group MD, Eurasia Group of Companies and
President of InterManager, Hong Kong
Eurasia has offices in a number of different time zones but we have
strong processes of management and organisation that link them up
together.
“I rise every morning between 5.30am and 6am and go for a 45 minute
walk. I like to walk: I feel it gives me the time I need to reflect on the day
ahead and think over my priorities. Meditation and yoga are also important to me as they help me relax and clear my mind. It is almost as much
a part of my life as eating or working. After my walk I make myself a
glass of lemon and hot water before starting some yoga. Breakfast is usually something light – maybe cereal or toast and some fruit juice and then
I'm off to work.
“My office in Hong Kong is a 20 minute drive away and I relax listening to music in the car – something soothing or classical but definitely
something that is cleansing. The first couple of hours in the office are the
productive ones to me because it is then I spend my time resolving the
most pressing issues before I get into the ritual of responding to emails
etc. At 11.30 I break briefly for some fruit juice and then some lunch at
1pm. If I am lunching at my desk (normally fruit and salad) I like to catch
up with the daily newspapers – normally three of them and relax a little.
“Eurasia has offices in a number of different time zones but we have
strong processes of management and organisation that link them up
together. Through these process we have built efficiencies in our people.
Technology is a godsend and it means that wherever you go you are not
far from your office.”
Rajaish Bajpaee has just started his second term as President of
InterManager – the trade association for the world's in-house and third
party ship managers – and is starting to see it reap the rewards of its much
publicised transformation from a members' organisation into a fully
fledged trade association with membership increasing week by week. But
what lessons has he
learned from his stint
as President? “The
single most important aspect I have
learned is how to
build, and value, the
trust and confidence
of my association
colleagues within the
shipmanagement
industry who also
happen to be my
competitors at a corporate level. It is also
refreshing to be part
of an association that
is dealing with industry-wide issues that
will and do affect the way we operate as a sector.
“I frequently travel 200 days each year so I find yoga and meditation
important in helping me fight jet lag and tiredness. Many people have
their own thoughts about combating jet lag but I adjust my watch and my
mind to the place of destination as soon as I get on the plane as I believe
that works best. Once I land I like to walk and again participate in some
yoga as it helps me adjust more quickly. I love getting close to nature. If
the place I am in suits, I like to walk in the woods, or by a lake or close to
the sea and just wonder at the beauty. I used to paint, oil on canvas, but
haven’t taken it up for over 20 years but if I ever got the chance and the
time, it would be something I would restart. I love image – whether it is
looking at nature or an oil painting or photography which I got involved
in quite seriously when I was younger. What I'm really saying is that I
don’t have that much time for hobbies although my love for cricket has
got me out playing on the odd occasion for the Eurasia cricket team.
Teamwork is important.” ➩
19
SHIPMANAGEMENT
HOW I WORK
DAVID COCKROFT
General Secretary, ITF, London
The ITF is a global organisation with offices in virtually every time
zone. That means some late night and early morning phone calls and
a lot of email contact.
A normal working day depends very much where I am. I spend about half
the year travelling but when I am in London I start with 20 minutes or so
on the exercise bike (if I manage to get a hotel with a gym and no early
morning meetings I do the same abroad) followed by a light breakfast, a
short period reading The Telegraph and The FT and a drive to the office
with my wife, who is a senior lawyer for a major bank. She and I are both
late starters and finishers and the drive gives us some time to talk about
domestic things. When travelling, life can be different although the wonders of Eurostar and early morning planes means that it is getting increasingly easy to do short haul trips in a day, in which case I wake at 5 or so
and leap in a taxi.
The ITF is a global organisation with offices in virtually every time
zone. That means some late night and early morning phone calls and a lot
of email contact. The Blackberry has made this process a lot less stressful
as much of the email is non urgent but if you have to find a terminal and
log on, you are always tempted to do more than press the delete button.
An average day in the office is around nine to 10 hours but when travelling on business it is usually longer since everything, including breakfasts
through to dinners, involves talking business and my first reaction when
a meeting is over is to get on a plane home as soon as possible. The workload usually prioritises itself since I have a good team who usually only
involve me if an issue is too sensitive to be dealt with alone or if the person raising it expects to talk to 'the man at the top'. I would like to think I
delegate but I am sure others would disagree. Juggling family and business life is easier since my children left university, although my daughter
was married last year which occupied quite a bit of my time and money.
The most important quality in my job is honesty and integrity and the fact
20
that the wide range of people I deal with, both union
leaders, employers and government officials, know that
if they reach an agreement with me or the ITF, we stick
to it. I expect the same from my team together with the
basic principles of trade unionism - defending the weak
against the strong - which brought me into the movement
in the first place.
I travel about half the year. It seems to get more every
year both as the level of ITF involvement in global
affairs increases and as it becomes easier and cheaper to
move around the world. Since a lot of what I do is representation, I am more often subject to other peoples'
timetables which makes planning trips an intense balancing act by a very experienced personal assistant. I would
love to delegate travelling, but most of my senior officials have a timetable which is almost as busy. Jet lag
has never really affected me. West is easier than East but
my general principle has always been to stay awake as
long as possible when I arrive. I never have a problem
sleeping on planes, even though, to keep the ITF's costs to a minimum, I
and my colleagues normally travel economy.
My main sport is skiing which developed when I lived in Geneva for
six years working for another international union federation. I always try
and take a week's ski holiday and this year I managed two. I try to do a
summer break with my wife. This year after our Congress in Durban, we
will tour South Africa for two weeks, after which I will stay in
Johannesburg for our South African affiliate's Congress. Other than that,
my social life is mainly family based and involves driving between different parts of England. ■
My main sport is skiing which developed
when I lived in Geneva. I always try and
take a week's ski holiday and this year I
managed two.
“
”
AD HOC
Ad Hoc
as ceo on May 8. “We are actively seeking
acquisitions in this field, most recently
Hamburg based Tireno in January 2006, Utrecht
based CIBIT in May 2006, and also taking full
ownership in Q-Labs,” he added
Professor Günther Zade
Henrik O. Madsen
Professor Günther Zade, founding father
and former Vice-Rector and Academic
Dean of the World Maritime University
(WMU) has died in Germany. He was 70.
DNV's Madsen quick to make changes
Henrik O. Madsen has been quick to make his
mark as the new DNV ceo by announcing
changes in both business areas and top management. Apart from introducing ICT Risk
Management that will be operative from
January 1 next year, he has also appointed five
new members to the executive board. Tor E.
Svensen, coo in DNV Maritime, will continue in
his current position as well as assume responsibility as deputy ceo. “I want to enable a new
business area ICT Risk Management to deliver
and develop services that use DNV’s risk
expertise to create solutions to our customers’
safety and business critical IT systems and ICT
strategies,” said Henrik Madsen, who took over
Professor Zade was involved with the design
and establishment of the WMU prior to its opening in Malmö, Sweden, in July 1983 and then
dedicated his life and intellect to the creation
and progressive development of the University.
As Vice-Rector and Academic Dean of WMU,
he contributed directly and positively towards
the well-being and academic achievement of the
University and, more importantly, those of its
students. Even after his retirement in 2001, he
continued to serve WMU as a research fellow
and became editor of the WMU Journal of
Maritime Affairs.
IMO Secretary-General and WMU
Chancellor Efthimios E. Mitropoulos, said: “It
Professor Günther Zade
was with great sadness that we learned of the
death of Professor Zade. His dedication and
foresight in the formative years of the
University helped to nurture WMU to become
what it is today – a unique model of international learning and co-operation. His singular devotion to the development of maritime education
and training is wholeheartedly acknowledged
throughout the maritime community and many
WMU graduates are where they are today, in
high-level roles in the maritime world, because
of Professor Zade’s role as their mentor."
Professor Zade is survived by his wife Inge,
his daughter Maja and his son Ralph.
P&I
AN APPLE
A DAY?
A working containership deals with an average of 10 medical
claims worth a total of $150,000 per year. Imagine the medical
bills if an owner had a fleet of 10 ships!
I
t’s enough to get the headline writers’ working overtime. How many
clichés and puns can you think of that aptly describe the malady currently affecting seafarer health. “Seafarers sick at excessive health
bills” is one; “Operating costs soar as owners seek emergency medical aid” could be another. But joking aside, the raw deal shipowners and their P&I Clubs are getting from the way medical authorities treat
them is enough to make any shipping ceo sick as an old sea dog!
The problem is not just limited to the medical condition of seafarers
coming onboard ship but also the high costs owners increasingly have to
pay to put problems right and unknown to many owners and their clubs,
the scams perpetrated by some dodgy ships’ agents who will refer a sick
seafarer to an expensive hospital in return for a percentage of the bill paid.
“Sadly, too many sailors arrive onboard ships beset with diseases and
medical conditions that could so easily have been screened out earlier,”
said Michael van Hall, of van Hall Health, a seafarer health cost containment specialist which recently merged with Health Systems International
of Indianapolis.
To appreciate the real impact of stringent examinations on ship
finances, by screening out sick sailors Crowley Marine/Liner Services
reduced their P&I premium from $55,000,000 per year to $35,000,000
over the course of seven years, reported Michael van Hall.
As he stressed: “Remember that in the US, hospitals and doctors have
about 150 contracts for re-imbursement for the same medical procedures.
As the Jones Act dictates that medical care is reimbursed at ‘Usual and
Customary’ charge, a medical provider sees the sailor as - at last - getting
what their Charge Master demands. The fact that a hospital will think
they have died and gone to heaven when they receive 60% of the bill let
alone 100% as dictated by the Jones act shows the extent of the issue.”
This was a point echoed by Christina DeSimone, President & CEO
of Future Care, who like van Hall Health specialises in the seafarer
health cost containment business. She said: “While many industries
doing business in the US and abroad have negotiated reduced rates for
hospital and physicians services, the maritime industry has no such protection in place. The illness or injury of mariners is treated as a ‘new
event’ each and every time an incident occurs. Shipowners seeking
American healthcare for their crewmembers normally do so without the
benefit of medical insurance. As a result shipowners pay on the basis of
‘billed charges’, the highest possible retail rates for all elements of a
crewmember’s medical care, rather than a much lower per diem or PPO
network rate.
“Frequently the seamen’s medical treatment is directed in the first
instance by ship’s agents, who may be well-intentioned but who lack the
22
expertise required to handle medical problems. Hospitals and doctors, not
being bound by prior agreement, consider themselves free to conduct as
many procedures as they wish at the highest cost. There is no reduced
cost structure in place for the hospitalization and treatment of mariners,”
she said.
But screening seafarers is only part of the problem. According to van
Hall, a growing issue facing shipowners and their P&I Clubs is healthcare
piracy, “or to put it another way, the milking of the system by unscrupulous doctors and port agents for their own pecuniary gain. When you consider that for every ship coming to US blue water, $3,000 is spent on
healthcare, and with up to 60,000 vessels visiting US ports each year, the
potential for fraud is massive, up to $180m to be precise.”
But what form does this fraud take?
“Well, it can be multifaceted from dishonest ‘dock doctors’ who take the
sick and injured sailor to a hospital that has expressed the greatest willingness to pay for the referral rather than the centre that can provide the best
care, to dishonest agents who deliver ill patients to unscrupulous doctors
and hospitals in exchange for their own 30 pieces of silver,” he said.
“There are also instances of sailors on their last voyages before retirement,
purposely injuring themselves so they can be admitted to hospital and
have other longer-term and more serious ailments treated at the shipowners’ and P&I Clubs’ expense.”
But does the shipping industry need to have a collective defence
against fraud and overcharging? “Absolutely!,” he replied. Especially the
fraud aspect. You have to remember that “overcharging” is in the eye of
the beholder - in reality it is dictated by their charge master. The doctors
and hospitals have their charge masters and they look at a sailor as their
Xmas bonus,” Michael van Hall added.
Louise Livingston who manages the bodily injury team for Thomas
Miller (Americas), said the key to controlling costs, while maintaining
the level of treatment, was "timely notice by owners, managers or local
ship agents of a crew member’s injury, illness or hospitalisation." TMA
executives can monitor a seaman's condition and treatment, and audit
hospital and other medical bills, particularly if greater than $10,000, or
arrange an outside medical auditor to do so. Advantages include limited charges for itemised services.
Failure to pay promptly can have other drawbacks, such as creating
grounds for seamen's legal actions in the US against owners in claims
where jurisdiction may not otherwise lie; creating a lien against the
ship, subjecting the vessel to attachment or arrest; and loss of discount
at eventual settlement. ■
MARKET WATCH
Making
the old fashioned way
The noble art of the asset play was
once considered the only way to
make money in shipping and, traditionally, a nobleman never tarnished
himself with something as vulgar as
trade. But sky high freight rates
and an increase in the number of
publicly-listed ship owners, with
shareholders to answer to, means
that some owners have concentrated on trading their ships to
carry cargoes and are reliant on
the operational income. So is the
traditional asset player dead?
24
Shipping has become sophisticated in the early years of the 21st Century,
forced by greater demands from charterers, consolidation, stability of earnings and
easier access to capital markets. A few years ago, who would have thought that the
world’s second largest tanker owner, Overseas Shipholding Group, would have
made it onto the Dow Jones Transport Index during the course of 2005, the only
deep-sea shipping company to be afforded such status?
And this so-called sophistication is not just the preserve of tankers: in 2000
there was just one publicly-listed dry bulk ship owner, Anangel American
Shipholdings, which went back into private hands in 2003; now there are 17 listed dry bulk companies.
To many, shipping is nothing if not traditional. During the 1980s and, particularly in the 1990s, many traditional ship owners made most of their money from
asset plays – buying and selling ships at the right time, which made up for the
abysmal returns on the freight markets. Publicly-listed shipping companies were
rare breeds, and largely confined to the container business. In those days, the shipping industry was highly fragmented and Greek and Norwegian ship owners
earned a worldwide reputation for being able to accurately read and judge the
prospects of a market; hence their extraordinary and well-honed sense of when to
buy and sell ships and make a fortune in the process.
Ship owners' access to capital markets was limited then, and not helped any by
a disastrous set of junk bond issues in the late 1990s, all of which inevitably
defaulted. For the most part, ship owners were reliant on traditional debt/mortgage
financing to pay for newbuildings, or second-hand tonnage. Given that throughout the 1990s, the average rate of return on capital from operating ships was
around 1%, it was not surprising that institutional investors had little, if any, interest in shipping.
All that has changed in just a few short years since 2000. Despite the dotcom
bubble bursting, institutional investors still have an appetite to invest in the unusual. In the last three years tankers and dry bulk carriers have enjoyed their highest
ever freight rates. Although rates have fallen a long way from their peaks, owners
of these ships are still making plenty of money, generating positive cash flows
and, when publicly-listed, are consistent with paying dividends and delivering
steady dividend growth – music to institutional investors’ ears. Besides which,
freight rates are still at historically high levels and many view the current cycle as
no more than a significant correction from the previous, massive and unprecedented spike.
MARKET WATCH
A measure of the confidence institutional investors are prepared to
bestow on shipping was clearly demonstrated last year, when they backed
a blank-cheque IPO that enabled Angeliki Frangou to raise $180M to buy
Connecticut-based dry bulk owner and operator Navios – North
America’s largest dry bulk shipowner and operator, originally established
in the 1950s by US Steel to carry its coal and iron ore cargoes.
But what of the traditional asset play? The late Peter Tudball, a former
chairman of the Baltic Exchange, used to delight in telling stories of buying a ship at a Lords cricket test match, and selling it a few years later at
Glorious Goodwood. Or was it the other way round?
“I often joke that in decades gone past that shipping operations was
something unseemly one did between the noble acts of buying and selling
vessels,” said Morten Arntzen, president and chief executive officer of
Overseas Shipholding Group. Now we make money the old fashioned
way: from earnings from operations,” he added. Arntzen has seen it as a
shipowner and from the perspective of a long career in ship finance.
But Peter Schaerf, managing director of New York-based finance group
American Marine Advisors, said asset plays still had an important role in
shipping. “While it’s true that most of the public companies have shareholders to answer to and have been concentrating their efforts on earnings
from operations, there are exceptions. Genmar is a prime example. They
bought plenty of single hull [tanker] tonnage and sold it at a profit,” he
said.
Some observers argue that Stelios Haji-Iannou’s decision to to hold out
for the highest price possible for his Stelmar Tankers operation, with the
eventual agreed takeover by Overseas Shipholding Group last year, was
nothing more than a grand asset play.
“I think the idea that asset play opportunities are not still there is one of
perception rather than reality. And freight rates have been good, so it’s not
surprising people want to hang onto their ships.” He said that in the years
2002 to 2005, Panamax dry bulk carriers were earning four and a half
times the level of years 1999 to 2001. According to some estimates, the
world Panamax dry bulk fleet earned a combined total of $7bn between
the beginning of 1999 and the end of 2001. According to some, tanker
earnings have risen more than fivefold during the same time frame.
But Arntzen did agree that asset plays were not dead. “While asset ➩
“I often joke that in decades gone past
that shipping operations was something
unseemly one did between the noble
acts of buying and selling vessels. Now
we make money the old fashioned way:
from earnings from operations”
Secondhand ship prices
April 2005
In millions of US dollars
(Based on vessels of maximum five years of age)
VLCC (305,000 dwt)
Aframax (105,000 dwt)
MR Products Tanker (45,000 dwt)
Capesize (172,000 dwt)
Panamax (64,000 dwt)
Super Handy (52,000 dwt)
117.545
64.173
46.379
54.365
31.686
19.194
Source: Baltic Sale & Purchase Weekly as at April 3, 2006-04-26
New building resales
millions of US dollars
Ship Type
April 2006VLCCs (300,000 dwt)
138
Suezmax (150,000 dwt)
83
Aframax (105,000 dwt
74
Dec 2005
140
87
70
Average 2004
108
57.5
N/A
Source: Clarkson Research Services. Note new building resales not a feature in the dry bulk market
25
MARKET WATCH
Shipbuilding Prices
Ship Type
In millions of US dollars
Q1 2006
Q4 2005
Q3 2005
Q2 2005
Q1 2004
Average
All 2004
Average
All 2003
125
75
62
218
120
72
59
208
117
70
57
205
113
70
58
190
114
70
59
190
110
71
59
185
77
51.5
41.5
160
60
34
30
59
36
30
57
35
28
58
33
25
59
34
28
62
35
30
48
27
24
TANKERS
VLCC
Suezmax
Aframax
LNG (147,000 cu metres)
DRY BULK
Capesize
Panamax
Handymax
Source: New building brokers in London
and even Chinese shipyards, there have been plenty of
shipowners willing to pay high prices to owners who
already have ships at an advanced stage of construction.
(Time Charter Equivalent in US dollars/day for modern tonnage less than 10 years old)
The difficulty is finding owners willing to sell.
The firmness of the second-hand market helps to support
shipbuilding prices, although raw material costs are
Ship Type
Apr 7
Average
Av 2005
Av 2004
also another major factor. Steel prices are rising in Asia,
year-to-date
having fallen in the second half of 2005, and the shipyards
VLCC
33,891
69,333
60,319
96,055
are still having little difficulty in passing on the higher
Suezmax
24,003
47,130
47,573
65,215
costs to customers. And the proof of this is that there has
Aframax
20,342
38,682
41,650
49,592
been no let-up in ordering of new ships.
Capesize
36,212
35,519
51,613
70,935
“But shipbuilding prices need a strong second-hand
Panamax
14,437
14,750
22,931
33,950
market to stay high. Once the demand goes out of the S&P
Handymax
16,313
14,930
21,268
28,135
side, then it becomes much harder for yards to win new
orders and eventually, they start dropping their prices,”
Source: Clarkson Research Services
said a London-based sale and purchase broker.
“And while prices are rising, any owner who’s thinking
The average daily earnings recorded at the end of April 2006
of selling a newbuilding without taking delivery is probably waiting in the
would have been close to the peak of the previous dry bulk
hope of selling at the peak of the market,” said a London-based sale and
rate cycle seen in 2000, which means that these earnings are
purchase broker.
still historically high, even though they have fallen a long way
Despite OSG’s commitment to operational earnings, it has not shied
from the all-time highs seen at the end of 2004.
away from asset plays entirely. “We did close to $900M of ship sales and
sale charter backs last year, underscoring this point. Having some flexibilplays are still possible and asset management critical, it is no longer the
ity in your fleet ownership is also important,” Arntzen said.
road to riches or the key success factor going forward,” he said.
“What we’ve seen in the last few years is a massive concentration of
“To succeed in shipping today and tomorrow, you have to run safe,
ownership of tankers – tankers especially,” said a New York-based finansecure, reliable ships and invest so you can do it better each year. It is a
cier, who asked not to be identified as one of his jobs is advising a Greek
race to quality, not a race to lowest opex costs. Shipping is becoming more
owner on second-hand purchase opportunities in newbuildings. “This has
demanding and more professional. This requires scale, systems, wellmeant a much less-fragmented business on the ownership of operations of
trained staff and a hunger for continuous improvement. It will favour the
tankers. The number of five or 10-ship companies in the tanker sector has
public, transparent companies. But good private companies will be able to
diminished dramatically in the last four or five years. These were the comcompete as they always have.
panies run by entrepreneurs who succeeded in buying ships cheaply and
“You throw these trends into a world newbuilding market that shows
selling them for higher prices,” he said.
no sign of getting soft for quite some time, combined with a relentless
“Another thing to consider is that when owners do resell ships with a
growth in world trade, and operations become king,” Arntzen added.
view to reinvesting, the second-hand and newbuilding price of everything
The strength of the freight market of the last few years is reflected in
else is so high that many are put off from reinvesting. The result is that
second-hand ship prices, which are astronomical, especially for anything
people hang onto their ships for much longer,” he added.
that is less than five years of age, even though the freight market has come
But, he said that when this bull market does eventually end, “there will
off its latest peak.
be owners who have ordered ships at the peak of the shipbuilding market
Resales of new ships under construction are giving a few owners the
who will find themselves with negative equity before they take delivery
opportunity to sell these vessels without ever taking delivery of them,
of them and with little opportunity to get any return on the investment for
while making handsome profits over the prices at which they placed the
a few years. Some may be forced into distressed sales, which will defiorders. But again, owners seem reluctant to sell. Given a minimum of a
nitely create opportunities for buyers, with a view to selling those ships at
four-year wait to secure newbuilding berths at Japanese, South Korean
a profit a few years later. And the cycle will start again.” ■
Worldwide Spot Freight Earnings
26
SHIPMANAGEMENT
OPERATIONS
A
vital ingredient influencing the planning of shipping operations, whether directly or with third party involvement, is
understanding the competitive cost base in the key areas of
operating expenses (manning, insurance, R&M, purchasing
and procurement).
This year began with many in the industry expecting manning to be a
big headline issue. One reason was the publication in December 2005 of
the Bimco/ISF Manpower Update. Its predecessor (issued in 2000) had
identified a sizeable shortfall in officer availability and expected the position to get worse. Hence, in late 2005, there was anticipation as to
whether this had turned out to be the case.
The December 2005 headlines can be summarised:
• An assessed global supply of officers of 466,000 (a 2% shortage) –
which compares with the 2000 figure of 404,000 (then seen as a 4%
shortage).
• An assessed global supply of ratings of 721,000 – which compares
with the 2000 figure of 823,000.
Certainly, there are critics of these numbers. The obvious question is,
if there is a shortfall of officers, why is there no evidence of ships being
prevented from sailing due to the lack of a Chief Engineer or a 3rd
Officer? Either the assessed shortfall is not real or some ship’s comple-
Getting
to grips with the
bottom
ments will not stand scrutiny. There are some issues of fraudulent certification that come to light but no one has suggested that this is rife.
Whatever one thinks of the headline numbers, there are some serious
issues that lie beneath them. There is a significant tranche of senior officers that are approaching retirement age. Yet, many of their obvious
replacements at senior rank appear to be less keen than their predecessors
to stay at sea beyond the age of 50. The world fleet is set to expand at a
dramatic rate in the next few years. Furthermore, there is considerable
expansion pending in highly specialist domains such as ice-class operations and LNG shipping. At the same time, the shipping industry still
seems to be making little progress in marketing the attractions of a career
at sea – and the subsequent prospects within the industry when coming
ashore. Finally, there are mentions of morale problems – many stemming
from added tasks imposed on crews under the ISPS remit and other issues
such as problems with shore leave and visas – though the prospect of
criminalisation is a big disincentive for some when it comes to their willingness to take on senior shipboard roles and duties. Furthermore, where
the shipboard personnel is supplied by a ship manager, there is talk of
owners wanting to distance themselves even further.
R&M – price hikes in the steel and coatings sectors
Those owners who employ third party ship managers tend to expect their
manager to offer them some commercial advantage in dealings with the
line
OPERATIONS
ship repair industry. However, this can see managers faced with making
difficult choices. There may be no certainty of continuity in the management contract. The owner may have a reputation for switching between
management companies or be a particularly active player on the sale and
purchase (S&P) market. Hence, there will be choices between the ‘quick
fix’ (that keeps the impact on the ‘bottom line’ to a minimum) and a more
expensive but longer lasting solution.
This area of choice has been especially germane over the past 12-18
months. In virtually every shipping sector, freight rates have been at very
high levels. Commercially, this leads to one imperative – minimising offhire. This might just mean that several ‘quick fixes’ are less attractive then
one good solution.
The ship repair industry has one inherent flaw in its marketplace.
That is, yards seldom enjoy long order backlogs. For repair yards, their
‘certainty’ tends to be measured in months. Naturally, ship owners and
managers look to use this to their commercial advantage. Meanwhile,
the repairers will be looking to earn a little more from time pressed, cash
rich owners – who may begin to reconsider
whether a lengthy diversion to a very cheap
(but possible not time diligent) yard should
be the primary motivation. On the other
hand, the ship repair sector is on the verge of
a further large scale expansion – through the
opening of new dock capacity – in China.
The key factor looking ahead may turn out to
be whether the inauguration of this capacity
will see Chinese prices drop (as a battle for
market share develops) as, if they do, prices
will come under pressure in other repair locations. In recent times, Chinese repair prices
have risen – from about 50% of
Singapore/Middle East levels to perhaps
75%-85% – but they remain highly competitive in the context of the world stage.
The biggest influence on yard selection for
sizeable repairs is likely to be the cost of steel
replacement. Owners and managers will be
well aware of likely steelwork price differentials between, say, China, Singapore, the
Middle East, Eastern and Western Europe,
etc. but what has become a factor for the ‘bottom line’ has been the upsurge in the price of
steel itself. ➩
Earnings and operating expenses
Panamax bulk carrier
5.0
SHIPMANAGEMENT
000s US$ per day
40
Operating Cost
Average T/C Rate (12mth basis)
4.8
35
30
4.6
25
4.4
20
4.2
15
4.0
10
3.8
3.6
5
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05
0
The ship repair industry
has one inherent flaw in
its marketplace. That
is, yards seldom enjoy
long order backlogs.
For repair yards, their
‘certainty’ tends to be
measured in months.
Naturally, ship owners
and managers look to
use this to their commercial advantage.
29
SHIPMANAGEMENT
OPERATIONS
Alongside this, there has been another key cost hike. This relates to
coatings. The marine coatings sector has been in transition, mainly
through the ending of the use of TBT-based products, leading to a wide
ranging debate on the cost and performance of replacement products.
Most of the replacements favour a copper base. Meanwhile, driven by the
demands of the Chinese economy, the price of copper has soared to record
highs (with a similar price path being seen by other key coatings inputs
such as zinc, titanium dioxide and epoxy resins) – leading to a series of
price hikes by coatings manufacturers.
Insurance – wider issues than premiums, renewals and deductibles
The engagement of a reputable ship manager can be a factor in the deliberations and, hence, premium setting decisions of underwriters. It may
give the insurers some ‘comfort’ with regard to expertise on the technical
management account and in terms of matters relating to ISM, ISPS or Port
State Control targeting. This said, below the surface, the world of marine
insurance is seeing quite significant turbulence.
The hull market is cyclical. Its primary issue is capacity – overall and
in its international spread. Premiums rise, new players enter. The new
entrants can offer favourable premium levels because they have yet to
incur a claims tail. Premiums fall. Then the claims and the underwriting
losses kick in and some capacity exits. Also, some cover goes away from
traditional markets (such as London) but often it reappears on the London
market in the form of reinsurance.
The other significant developed is that ‘marine’ is losing its distinct
identity in the insurance market. There is now an increased share of
capacity devoted to marine-aviation-transport (MAT). This may be good
news and bad news. The good news is that the insurance sector has broadened its risk portfolio and so a poor marine performance might not trigger
30
quite such a serious premium hike backlash. Conversely, the bad news is
that problems in other business areas could impact on marine.
The P&I sector has its own issues created by its concept of mutuality.
The Clubs nominally ought to be targeting a break-even picture. The sector has made losses on underwriting that, until recently, have been made
good by profits on investments. However, the Clubs do need to build their
‘war chests’. This is due in part to deteriorating investment returns and an
increase in the number of large claims but also is a prudent move in the
light of changing liabilities emerging from environmental legislation or
other politically-motivated moves by governments. ■
Drewry Shipping Consultants, www.drewry.co.uk
Indexed steel price trend (1Q2000 = 100)
200
Index
180
Average 2000-2003
160
Average 2004
140
Average 2005
120
100
80
60
2000
2001
2002
2003
2004
2005
Roberto
Giorgi
Glamorising the
art of ship
management
32
I
ts hard to imagine there are any celebrities in shipmanagement but there is something
about V.Ships’ ebullient and flamboyant President that brings in the crowds. A cursory
headcount of delegates queuing up to listen to Roberto Giorgi’s speech on the future of
shipmanagement at the recent CMA show in Stamford (where SMI caught up with him)
indicated standing room only and there seemed to be a permanent entourage of people following him around as he meandered through the various banks of exhibition stands.
Whether it is his charm or the extent of his fleet that entrances those around him is unclear
but the interest is there and Roberto acknowledges that he and his company have an important
role to play in helping to push forward the quality boundaries of shipmanagement and in accelerating the acceptance of third party shipmanagement among traditional shipowning companies
around the world.
“It’s a big role because today third party shipmanagement represents probably 20% of the
trade internationally so we have a duty to perform a first rate job in running our ships but also
PROFILE
SHIPMANAGEMENT
Portraying and promoting a positive and
as he claims ‘true’ image of shipping has
been a strong soap box sermon of the
shipping industry for many years
but with concerns deepening over the
shortfall in qualified officers onboard
ship, the subject appears to be coming
more sharply into focus.
to be proactive externally to promote an image of shipping that is more
in line with reality,” he told SMI.
Portraying and promoting a positive and as he claims ‘true’ image of
shipping has been a strong soap box sermon of the shipping industry for
many years but with concerns deepening over the shortfall in qualified
officers onboard ship, the subject appears to be coming more sharply
into focus.
“We have a lot of good people in our industry but it’s very difficult
to sell this to the media. So what do we do? We start to talk to the press
that specialise in our industry and also try to build good relations with
the normal media. We also try to promote the image of shipping to the
students at our universities so the younger generation will learn more
about shipping in general,” he said.
V.Ships recently invited 65 University students to its offices in
Monte Carlo for an open forum where the subject was very much about
shipping, and interest was certainly high among those there especially
on emotive subjects such as the environment and security.
Graphic pictures of the atrocities of 9/11 mean that security and the
fight against terrorism are constantly on most people’s minds. The environment is also a big issue to today’s younger generation and Roberto
Giorgi understands the importance of proving how shipping can coexist with efforts to foster clean seas and a cleaner environment.
The role of the media in shipping cannot be underestimated he hints,
because if the press claims the shipping industry is secretive and not
transparent and brands it as accident-prone and a major cause of pollution then public opinion forces the regulators to take their own action to
remedy the problem.
“We should be more proactive in lobbying and promoting the
image of shipping today to the regulator and to the general public,” he
asserted.
The V.Ships President supports the idea of self assessment of the
shipmanagement industry and heralds the idea of a common set of key
performance indicators as a benchmark to assessing this quality.
However, he does qualify this support by suggesting there should be
different KPIs for different vessel sectors within the industry.
“If you run a passenger vessel it’s different to running a tanker so the
KPI can change and must be customised according to that sector. But
KPI is definitely part of our future, no doubt.”
Quality assessment and verification seems to be the order of the day
with InterManager’s KPI initiative currently vying for the limelight
with OCIMF’s TMSA and Intertanko’s Poseidon Challenge. In light of
all of these initiatives, is it about time the shipmanagement industry
operated as a single voice in promoting the qualities of the industry?
“Absolutely! Everybody knows we are looking to form a trade association for ship managers in InterManager and we believe it’s much better to be together than to be fragmented. I think we need to have a very
well defined common objective and focus on that objective,” he said.
At the time of writing, V.Ships had yet to join InterManager but when
asked whether it would, Roberto was not shy in coming forward. ➩
There are a number of
“challenges
facing owners today.
There is a need for compliance of
an increased number of rules and
regulations; a shortage of crew
and shore-based personnel;
a need for greater cost control,
a worsening image of the
industry in general and greater
public and media scrutiny
”
33
PROFILE
SHIPMANAGEMENT
an industry we are moving ahead
“in Iftheassame
direction then all players will
benefit because a seafarer on your ship
today may be working on my ship
tomorrow
”
Roberto Giorgi strongly believes there
will be a major shift in owners
outsourcing the management of their
vessels in traditional markets such as
Greece to create wealth for the
companies. But more interestingly,
more outsourcing, he believes, will
come from owners of larger fleets.
“We are definitely, because as I say we are a main promoter along
with a number of other managers of the trade association idea. So definitely yes but everything has to be right.” This was a reference to his
view that InterManager had to be seen to be different in what it offered
its members and not just a name change from the old ISMA days.
V.Ships takes its shipmanagement responsibilities very seriously and
with over 900 ships under various aspects of management is the world’s
larger third party manager by practically a factor of three. Boasting 56
offices with a total of 1,465 shore-based and 23,500+ seagoing staff
drawn from over 40 different nationalities, the extent of its presence in
this industry is impressive. But when you realise that only 20% of the
world’s fleet is outsourced to a pool of over 350 management companies – and 50% of that total is managed by the ten largest managers
operating today – you begin to understand the carrot that drives executives like Roberto Giorgi to promote quality shipmanagement as an
essential necessity in today’s shipping industry.
With many single office ship managers unable to offer the range of
services of their larger competitors and the entry barrier to the industry
rising every year, the future looks somewhat rosy for V.Ships and its
larger competitors especially if Roberto’s predictions for further major
outsourcing materialises.
“There are a number of challenges facing owners today,” he said.
“There is a need for compliance of an increased number of rules and
regulations; a shortage of crew and shore-based personnel; a need for
greater cost control, a worsening image of the industry in general and
greater public and media scrutiny.
“The world will become much more litigious so you need to make
sure that when you are under scrutiny you can come out completely
clean.”
Roberto Giorgi strongly believes there will be a major shift in owners
outsourcing the management of their vessels in traditional markets such
as Greece to create wealth for the companies. But more interestingly,
more outsourcing, he believes, will come from owners of larger fleets.
“We can also look forward to greater innovation in outsourcing ie.
moving away from ‘vanilla’ style shipmanagement. There will also be
more joint venture partnerships between owners and managers which
helps to maintain the owner’s brand while at the same time supporting
them with know-how,” he added.
“I think greater outsourcing is happening because there’s a shortage of
shore and crew personnel in the industry. This is a big, big issue, probably one of the biggest issues there is. So today it’s very difficult for a
client to diversify his operation from say being a chemical vessel operator to being a tanker operator and having the same crew complement.”
But while it is considered a strength of the third party ship manager
to have access to large pools of seafarers, it is the industry problem of
officers shortfalls and training issues that is causing today’s managers
the most headaches.
“We currently employ 23,500 seafarers within V.Ships and we control the pace of their recruiting and all their training. However, we
underwent a mindset change in our organisation to ensure that we started to treat the seafarers like clients which means we don’t wait for the
seafarers to come to us, we go to the seafarers. We are opening more
branch offices in seafarer nations like India where we have five to six
branches; in the Ukraine where we have the same and also in Russia.
We are replicating what we did with our shipmanagement operations
where we opened offices in places that were close to our client base.
Now we are opening offices and building offices to be close to the
recruitment of our seafarers,” he stressed.
Giorgi also alluded to a change in the V.Ships organisation that
encouraged some people to focus only on recruitment and others to
focus purely on management and retention.
But hearing these concerns from the world’s largest ship manager
shows that the issue of seafarer recruitment is serious enough to involve
the collective efforts of all players in the industry.
“Collectively it’s a gain: You cannot have only one guy carrying out
a good training programme, everybody has to do it. If as an industry we
are moving ahead in the same direction then all players will benefit
because a seafarer on your ship today may be working on my ship
tomorrow.”
So what of the future?
“We are very bullish about future business for ship managers. I think
you need to have the right ingredients to grow in this industry and you
really need to be of value to the owner. It’s not only a question of cost
but of offering an intelligent service and other issues like reputation,
credibility and size. Size is important especially when things go wrong.
Ship management is more about partnership: it is more customised
because each client has a different priority and a different objective and
these have to be met,” he concluded. ■
35
3
INSIGHT
SHIPMANAGEMENT
rd
party
shipmanagement
Is it the panacea to the industry's woes?
T
hird party shipmanagement looks to have a bright future. The
sheer amount of regulations and recommendations currently
landing on an owner or operator’s desk is frightening. So frightening that in terms of numbers of vessels, most of the smaller
owners and operators are unable to cope. Many have already
thrown in the towel and opted to put their vessels with third party management concerns.
However, the rules and regulations are not the only reasons companies
rely on the increasing band of third party shipmanagement companies.
There are some owners that are mainly asset players, such as Frontline
and its associate companies, who feel they benefit from such association.
There are others set up along the German 'doctors and dentists' KG tax
deferment system whereby a finance house or a large shipmanagement
company will persuade ordinary individuals to invest in share schemes.
Once a share scheme has been put in place and a vessel earmarked, often
a newbuilding, a management company will takeover the commercial
and technical operation of that vessel.
Frontline is by far the largest of the so called 'shipowners' to use outside management concerns. The company, backed by entrepreneur John
Frederiksen, is basically a finance and commercial management concern,
which aims to keep its overheads to a minimum. To achieve this, much of
the day-to-day running of the fleet is outsourced. Frontline and its associates – Golar LNG, Golden Ocean, Knightsbridge, Seatankers, ITC and
soon to be split Ship Finance use six different third party shipmanagement companies in a bid to keep the bulk of its eggs in different baskets.
The world’s fleet is growing in all sectors.
Although we are seeing a fall-off in
containership ordering at present, this
has been replaced by the almost unprecedented interest in tankers of all types
The favoured six are V Ships Glasgow, V Ships Oslo, International
Tanker Management (ITM), Wallem, Thome and Golar Management. Of
course by going down this route shipowners do not have to worry about
the latest IMO conventions, the Tanker Management Self-Assessment
(TMSA) scheme, or any other diversions but can just concentrate on
adding value for their shareholders.
Frontline monitors what it describes as the important aspects of shipmanagement as if it had its own in-house technical team. For example,
each vessel has its own dedicated form, which the third party shipmanagement concern must fill in on a regular basis. These are then scrutinised
by Frontline’s in-house management team.
Virtually every other large ship owner/operator handles their own technical management, although some have boosted their fleets by taking
ships on long-term charter in which case the original owner/operator will
have the burden of looking after the technical aspects of the ship and her
crew.
In some cases, even though owned by their principals, these technical
departments will be operated at arms length as separate entities within an
organisation funded by cross charges, which usually take the form of a set
fee. In most cases they will not seek third party business but work solely
with their principals’ vessels.
Vessels are becoming more specialised, especially in the tanker and
gas carrier sectors. Obviously, the more specialised the ship, the more
specialised are the people needed to look after them. But there is a problem looming on the horizon in the shape of a distinct shortage of technical shore staff capable of managing specialist vessels, such as ice class
vessels and LNG tonnage. The third party ship manager will need to
employ such people at whatever the cost, hoping the extra overheads can
be recouped in the management fee.
The world’s fleet is growing in all sectors. Although we are seeing a
fall-off in containership ordering at present, this has been replaced by the
almost unprecedented interest in tankers of all types, including gas carriers, as the IMO single hull phase out draws closer.
In some quarters, the spate of tanker ordering in the first three months
of this year was put down to the introduction of the IACS Common
Structural Rules, although many industry experts have dismissed this theory by saying it was just a coincidence. One company executive who
recently admitted he farms out his technical shipmanagement functions is
Lars Mossberg of Marinvest (a Swedish concern operating five products/chemical carriers with another four buildings owned by investment
schemes). ➩
37
SHIPMANAGEMENT
INSIGHT
He said that he had to engage help to cope with the extra burden that regulations imposed on a company, be they self-assessed or mandatory.
Mossberg explained that he uses Thome Ship Management to look after his
ships technically and DNV to look after the design and inspection of the
vessel as his resident class society. He illustrated his problem by saying
inspection manuals could cost anything up to $25,000 per ship, which
meant that companies only owning a few ships could find these and other
costs prohibitive, whereas a shipmanagement concern with many more
ships on its books could spread the cost more evenly.
Spreading the costs is a huge advantage to a third party shipmanagement
concern with a medium to large sized fleet on its books. Buying power leads
to discounts for all types of services,
including repair and maintenance,
spare parts, bunkers and lubes, insurance and P&I cover among others.
The shipmanagement companies are
therefore able to keep their overheads down and work within their
fees, which are still reasonably modest when compared with the value of
the asset being managed and its
potential earning power.
In the tanker industry, TMSA is
on everyone’s lips at present. This
scheme was introduced in January of
this year by OCIMF, but is generally
regarded as the brainchild of the
International Marine Transportation
(IMT)/ExxonMobil camp. Several
comments have been made that the
smaller ship owning companies
would not survive as the cost of this
continuous improvement scheme
could prove to be up between
$50,000 and $70,000 per vessel per
year. Once a third party shipmanagement company has qualified for the
four main elements of the scheme,
the cost of continuously improving
on the performance would be
reduced drastically. However, a
shipowner with three or four vessels
would find the initial cost of meeting
the recommendations unacceptable.
Most shipmanagers have invested
in the systems necessary to operate
vessels within the various rules and
recommendations. These systems
are geared to cut overheads, enabling
shipmanagers to make more of a
profit on the fees earned and to reinvest money in personnel and/or
improving the systems.
One leading manager and investor
in IT offering third party shipmanagement specifically to tanker owners is International Tanker
Management (ITM). This company
was established by Barber
International in 1998, now wholly
owned by Wilhelmsen Maritime
Service. ITM has offices in Dubai,
38
Singapore, Germany and India and offers both technical and commercial
management to operators such as Frontline, Norse Management, Irano
Hind, Yusuf Bin Ahmed Kanoo, Simatech, Seatankers, Marlink and
Ideenkapital. The company’s Hamburg office looks after 14 vessels owned
by KG investment concerns, while Dubai is set up to handle the back office
tasks for the whole group, as well as handling full technical management.
Managing director Ole Wang said recently that he had set a target to
manage 120 tankers by 2010, or some 20% of the total third party tanker
management market. At present the company has 64 vessels under management, either technically or commercially. He thought the burgeoning
investment currently ongoing in Dubai and other Middle East Gulf centres
would provide new opportunities for third party management.
INSIGHT
In times of crisis, public relations/media
response functions can also be activated by
third party shipmanagers, who will then
represent the shipowner
Many of the new companies springing up in the area, especially those
investing in crude, chemical, products and gas tankers, will not have the
technical expertise to operate their vessels as they are in effect just investment vehicles, or quasi government concerns.
Somewhat surprisingly, there are only around 420 tankers under third
party shipmanagement. However, this is put into perspective when much
of the third party business handled by the world’s largest shipmanagement concern V Ships, is geared to companies owning very few vessels.
Also the majority of Intertanko members have five ships or less in their
fleets. For every large company grabbing the headlines, there are hundreds of smaller concerns involved with all types of vessels, which need
help to operate their vessels on a day-to-day basis.
As far as the future is concerned, Wang believes IT will take on an
even greater significance in the day-to-day running of vessels.
Eventually, every vessel will be on-line and engineers will be able to
embrace diagnostics more than they do today again saving costs, he said.
ITM has developed relationships with the regulators, including flag
states, port state control and class societies. In addition, business relationships have also been exploited with oil majors, charterers, terminal operators, insurers, service providers, vendors and others.
In a crisis, public relations/media response functions can also be acti-
SHIPMANAGEMENT
vated by third party shipmanagers, who will then represent the shipowner.
ITM achieved ISO 9002 and 14001 on 30th April 2000, one of the
world’s first shipmanagers to do so. This was followed by ISO 9001:2000
in June 2003 and today it is firmly committed to OCIMF’s TMSA
scheme. By achieving this, a modern third party shipmanagement concern can take away the burden of adhering to the various rules, regulations and recommendations that could trip up a lesser organisation, such
as an owner with just one or two vessels. Such an owner would still have
to go through the same process, regardless of the number of vessels in his
or her portfolio.
Wang said earlier this year in an interview that he thought that the average annual fee per vessel on ITM’s books was around $130,000 for full
technical management. He said that ships were being managed today
much cheaper than several years ago, due to the advance of technology,
such as IT.
He also said that a lot of inexperienced companies were investing in
chemical tankers. One of the problems encountered here is that the rate of
newbuildings is running at a much higher rate than the number of qualified people available to look after them.
Size does matter in third party shipmanagement, according to Wang.
For example, there have been several spin-off management concerns
emanating from the likes of V. Ships and Wallem. One of the latest is
London-based FR8. This company owns two tankers via a bareboat deal
and has another two on order. The company said it is keen to break into
third party shipmanagement next year once all its systems have been put
in place and tested. Managing director Captain Bhattcharya agreed there
is future potential for third party shipmanagement, especially in the
tanker and gas markets. ■
39
DUN & BRADSTREET
TRADE
China
D&B COUNTRY RISK INDICATOR
DB3b
Usual Terms
Transfer Situation
Minimum Terms:
Recommended Terms:
Usual Terms:
SD
L/C
30-90 days
Local Delays:
FX/Bank Delays:
Import Cover:
0-2 month
1-2 months
13.0 months
Chinese companies have poor credit management methods, and exporters
The firming of the yuan towards the CNY8:USD mark continued in Apr.,
especially are frequently faced with default by parties overseas who per-
after Prime Minister Wen Jiabao stated in Mar. that “more flexibility” would
suaded them to allow a credit sale. Profits in upstream sectors, such as in
in the future be allowed in the FX market. FX reserves rose by 29.5% y/y,
mining, are extremely good, while firms in the aviation and steel-making
and 4.2% q/q, to reach USD853.6bn at end-Mar. The figure was released
sectors, for example, remain under pressure. Producer prices overall are still
ahead of schedule and demonstrates that the Chinese state FX reserves now
rising faster than the CPI, squeezing profits.
exceed those of Japan.
Local Currency
Exchange Rates
Payments Performance
(Yuan [CNY]: USD))
(London, 18 Apr 06)
(% of payments made 30 or more days over terms)
8.12
6.8199
8.0205
EUR
GBP
JPY*
USD
8.12
8.12
8.12
50
45
*(x 100)
8.12
9.8496
14.2211
8.12
40
35
8.12
Nov 05
55
Dec 05
Jan 06
Feb 06
Mar 06
30
Q2 04
Apr 06
Q3 04
Q4 04
Q1 05
Economic Indicators
2003
2004
2005e
2006f
2007f
Export Credit Agencies
Real GDP growth, %
Inflation, annual ave %
Govt balance, % GDP
Urban unemployment, %
C/A balance, % GDP
10.0
1.2
-2.8
11.2
3.1
10.1
3.9
-1.7
10.5
3.6
9.9
1.8
-1.6
9.8
5.3
9.0
1.5
-1.8
8.6
4.0
8.5
1.9
-1.9
8.5
2.2
US Eximbank
Atradius
ECGD
Euler Hermes UK
Q2 05
Q3 05
Q4 05
Full cover available
Full cover available, no discretionary limits
Full cover available
Full ST cover available
Risk Factor
SOEs make up about 15% of the business universe, but still account for a
larger proportion of national output owing to their larger-than-average
turnover. Corporate profitability at the roughly 150,000 enterprises in the
state sector appears to have declined in '05, in line with the corporate sector
as a whole, but probably to a greater extent than average. In '05, the National
Bureau of Statistics found that out of 120,000 industrial SOEs, 29,000 posted net losses, in aggregate summing to CNY102.6bn (USD12.5bn). The rest
reported net profits, a sum of CNY747.3bn (USD91.2bn). A Ministry of
Finance study grouping SOEs in the industrial, construction and services sectors found that reported profits in aggregate summed to CNY904.7bn, up by
1/4 from '04.
Accordingly, industrial SOE data show worse-than-average financial
weakness for the state-owned sector as a whole. It appears that industrial
SOEs suffer from chronic financial losses. Indeed, there has been repeat
anecdotal evidence of bail-out lending for SOEs and for large-scale manufacturers throughout '05, with prominent bankrupt companies often resuming
production within months, as if nothing at all had transpired.
The same pattern of increasing financial losses holds with regard to listed
firms. 234 firms listed on the Shanghai and Shenzhen stock exchanges
(including SOEs and privately-held firms) expected to have posted losses in
'05, while a further 101 firms said that they anticipated their net profits to
have fallen by 50% or more in the past year. The fact that this does not appear
to have derailed real GDP growth since '05 or affected China's risk rating
owes to various factors.
First, profitability and liquidity are often inversely related in Chinese companies, because the state-owned banks actively discriminate in favour of
SOEs. Thus, a profitable, privately held enterprise may suffer from difficulties raising working capital, while a loss-making SOE can receive rollover
credit on its own terms and on demand. Second, banks have been willing to
lend to companies with non-profitable strategies, simply in order to lower
their existing NPL ratios. These 2 factors could mean danger for China over
the 2-year forecast period ('06-'07), if bad loans overwhelm the banking system even with GDP rising so fast. However, the value of Chinese firms'
accounts as a guide to performance is debatable in any case. New accounting
standards, focusing more closely on operating profits, are due to be rolled out
in '06. These could substantially increase published corporate profit and
lower the incidence of loss-making companies, which is anomalous in such a
fast-growing economy: SOEs are more likely than private-sector firms to
bear extra-ordinary costs. The neutral trend of our risk rating for China
reflects these factors.
Copyright © 2006, Dun & Bradstreet. All rights Reserved. While the editors endeavour to ensure the accuracy of all information and data contained in this report, neither they or Dun &
Bradstreet Limited accept responsibility for any loss or damage (whether direct or indirect) whatsoever to the Customer or any third party resulting or arising therefrom. The analysis shown
on this page is taken from D&B's monthly publication, International Risk & Payment Review, which covers 132 countries around the world. To obtain the latest analysis, please contact D&B's
Country Risk Services Group on +44 (0)1494 422700 or visit www.dnbcountryrisk.com
40
SHIPMANAGEMENT
ROUND TABLE
As part of our pledge to
provide cutting edge
comment, we assembled the
leaders of the world's largest
shipmanagement companies
around a board room table to
debate key issues affecting
their industry.
If any of our readers have comments to make on the
issues under discussion or the panellists' replies
then please email them to:
[email protected]
and we will include them in future issues.
42
ROUND TABLE
SHIPMANAGEMENT
Self assessment of the industry and quality of operation came under discussion as did
the contentious issues of information transparency and owner/manager relations and
the effect the poor image of the industry is having on seafarer recruitment and retention.
Sean Moloney
How crucial is it for ship managers and owners to self- regulate when there
are many who argue that the shipping industry is over-regulated as it is?
Andreas Droussiotis
I believe the shipping industry needs to self-regulate. We have too many
interested parties coming out with their own regulations and assessments
so we need to simplify the process. We need to make sure that those regulating the industry are the ones who really understand the business as well.
Sean Moloney
Are you saying that today's regulations do not meet the wishes and
desires of the shipmanagement practitioners?
Andreas Droussiotis
No, they do, but there are so many bodies dealing with regulation of the
shipping industry today that we need to really bring everything together
such as with the key performance indicator (KPI) initiative currently
being taken forward by InterManager. We believe we will manage to
convince all the market players to join in and if that is the case then we
will really have an industry regulated in the proper way.
Sean Moloney
Maybe it’s a good time to bring in Svein Sorlie who has been working
on the KPI issue. Svein, do you think this quality initiative and others
that are going on will secure the favourable notice of the regulators?
Svein Sorlie
The shipping industry is over regulated because it has failed to show the
required responsibility itself. There have been many accidents and disasters over the years but the industry has not communicated its message
correctly to the public. However, I now believe we are entering a new era
where we can show the rest of the world that we are taking the required
initiative to better explain our issues and to have the required transparency in our industry so that people can be comfortable with what we are
doing. It will not be a simple and short term process but a very long
process to build trust again in the industry, but we deserve trust. If you
see the quality of shipping in operation today and the number of accidents we have compared to the cargo volume transported, it is clear that
the shipping industry is a very safe industry. But this is not a perception
shared by the public so we have a big communication job still to do.
Before we have that fixed correctly we will still suffer from regulatory
intervention from various sources. ➩
Round Table
Discussion
Chaired by SMI editorial director Sean Moloney, the panellists included Stephen Chapman, General Secretary, InterManager; Dirk Fry,
Managing Director, Columbia Ship Management; Douglas Lang, Managing Director, Anglo- Eastern (UK), Bill Lunn, Marine Manager
at Navigo Shipmanagers; Patrick Russi, General Manager QA Marine & Safety, Stolt-Nielsen Transportation Group in Rotterdam;
Mudit Paliwal, Head of Business, Fleet Management; Svein Pedersen, Managing Director of Thome Ship Management, Singapore;
Andreas Droussiotis, Chief Executive Officer of Hanseatic Shipping; Egil Rensvik, Research Director at the Marintek, Norwegian Marine
Research Institute in Trondheim; Yngvil Asheim, President of Hoegh Fleet Services; David McFarlane, Risk Safety and Quality Manager
of V. Ships Ship Management; Patrick Slesinger, Director & Chief Information Officer Wallem Group; Dirk Lassen, Manager Director of
Chemikalien Seetransport; Rajaish Bajpaee, President and Group Managing Director of the Eurasia Group and President of
InterManager; and Svein Sorlie, Senior Vice President, Wilh Wilhelmsen ASA Oslo.
43
How crucial is it for ship
managers and owners to
self-regulate when there are
many who argue that
the shipping industry is
over-regulated as it is?
Rajaish Bajpaee
If we look at the history of shipping, we see that most of these regulations or at least the significant ones were crafted on the back of a catastrophe or an accident. Starting with the Titanic which created SOLAS,
you then had the Torrey Canyon which prompted ratification of the
MARPOL convention and latterly 9/11 which brought about ISPS. So
most of them are a knee-jerk or spontaneous reaction to an accident or
incident. They are not built or founded on a process or a thinking which
is driven from improving long-term sustainability of safety and quality.
The industry regulators are far more disconnected and detached from
the reality of the practitioners. Today's predicament of over regulation
is because as an industry we have failed to take the responsibility of our
actions and the leadership we ought to have taken. Regarding KPIs,
long term sustenance of quality and excellence can only be nurtured in
an environment of self-regulation with verification. A compliance culture will not lead to long-term sustenance of excellence and quality. It’s
a fundamental conviction that we have because wherever you have a
compliance culture, you will always try to find the best or the smartest
way to manage that situation and I think ISM is a very good example of
this. Today the entire world's merchant fleet of 55,000 ships has SMC
and the companies which manage them have DOC but we cannot put
our hand on our hearts and say all 55,000 ships are quality ships or safe
ships although the ISM is intended for the purpose of safety and quality
and environmental protection. When ISMA started the first code of quality assurance it was a process oriented code which had a spin-off effect of
encouraging many other quality assurance codes in the industry prior to
the ISM. They are all trying to focus on verification of the process to the
extent that it has now become something of a habit. Every ship has a
process and every ship has a quality manual so what is the outcome? The
measurement of the outcome of that process is the goal or the focus rather
than the process itself because it is almost now a habit. But in order to
measure the outcome, there must be some standard measurement criteria
which can be easy to compute, is transparent and which will enable
benchmarking. If we can benchmark each company’s performance we
will also be motivated to improve our own standards next time to meet
the best in class instead of sinking down to a compliance of minimum
standards in the industry.
44
If we can
“benchmark
each company’s
performance we will
also be motivated
to improve our
own standards
next time
”
ROUND TABLE
SHIPMANAGEMENT
What needs to be done to
ensure the industry as a
whole starts to clean up
its act and operate at
a higher standard?
the KPI initiative
“willI believe
provide a holistic and
”
commercial view of shipping
Sean Moloney
I’m going to bring Dirk Fry and Patrick Slesinger in on this issue and
in particular question what needs to be done to ensure the industry as a
whole starts to clean up its act and operate at a higher standard?
Dirk Fry
Well first of all I would like to disagree a little bit with your negative
statement that the industry does not comply with international standards. World shipping carries about 90% to 95% of all goods transported worldwide and I dare to say that overall, shipping is an extremely
safe and well run industry. Now on the other hand I must also agree
that there are many other stakeholders in our industry who have decided to set up their own systems against which our performance is measured. But it becomes more and more difficult for the industry to comply with all the different scenarios we are asked to comply with so from
this point of view I think it is a very positive step for the industry to opt
for self regulation. We want to show the world and our clients that we
do our job right and that we are unfairly tarnished with an image that is
far from what is reality.
Patrick Slesinger
Yes I certainly agree with Dirk’s standpoint. I think one of the greatest
issues we face to date with various regulations and various forms of
measurement is that it is very specific bodies that have come up with selfserving measurement criteria. If successful, I believe the KPI initiative
will provide a holistic and commercial view of shipping as opposed to
certain tick the box solutions or key measurements for singularly interested parties. Obviously the ability to be able to sing our praises or at least
hold the base line upon which to be judged in the positive areas as
opposed to the negative areas is a very fundamental point as well. ➩
45
SHIPMANAGEMENT
ROUND TABLE
Sean Moloney
How does it fit in with other initiatives such as Poseidon Challenge that
Intertanko are pushing or even TMSA?
Sean Moloney
Do you think this goal of zero tolerance, zero casualties and zero vessel detentions can be achieved?
Rajaish Bajpaee
The Poseidon Challenge believes that all the stakeholders in the chain of
responsibility must commit themselves to a culture of continuous
improvement, a culture of excellence, a culture of zero tolerance. Only
then will the chain be strong. However, the chain is only as strong as its
weakest link so if one constituency or one stakeholder does not commit
itself then the entire chain will fail. As the Poseidon Challenge is all
about creating an environment of continuous improvement our initiative
fits in very well with the general sentiment prevailing in the industry.
Rajaish Bajpaee
Well we know that perfection is a utopia but still we have to pursue the
goal of perfection. Even though total excellence, zero incidents and
zero tolerance may be unachievable, to put it as a goal in which to pursue is the right thing to do.
Do you think this goal of zero
tolerance, zero casualties and
zero vessel detentions can be
achieved?
Svein Sorlie
I believe that the major problem is related to transparency. In the past
it has been possible to hide away, not really stand up to what you are
doing. Shipping is normally quite conservative and responds very
slowly to trends in society but there have been certain positive developments involving transparency of information and telling the rest of the
world what the industry is doing that have taken place. However, I
must say I’m a little bit concerned if industry players are launching initiatives that are in a way triggering a fallback to old habits - where you
have incentives, or you are trying to hide if you have an accident or
you’re trying to take advantage of tax havens and other shady places to
do business just to avoid having to take responsibility for what you are
doing. I believe that the zero tolerance in shipping is good as an objective but it could also have certain consequences because it could
encourage people to try to hide away.
Sean Moloney
Can I bring Douglas Lang in on this? What are your views on the competitive side of the industry and how the individual managers can work
together to improve the situation?
Douglas Lang
In terms of competitiveness I don’t think the industry has changed
over the last 20-30 years. If we really look at each company closely I don’t think we’ll find a great deal of difference. Probably
95% to maybe 99% of what we do is almost identical to each
other so what does it come down to: what are the differences
between the shipmanagement companies? It comes down
to the quality of people we employ from the very top
down to the sea staff. In terms of fees we are probably
within a cent of each other in a lot of cases so this talk
of competitiveness and differences really comes
down to the fact that the individuals in the company are the people that make the difference and that
comes down to the corporate ethos within that
company. That’s what people select us on. ➩
I believe that the
“zero
tolerance in
shipping is good as
an objective but it
could also encourage
people to try to
hide away
”
SHIPMANAGEMENT
ROUND TABLE
Accountability is
important in
today's industry
but should good
quality managers
be singled out
through some sort of
IMO-driven 'white list'
and conversely should
poor quality managers
be included in 'grey'
or 'black' lists.
Bill Lunn
When you take people like charterers they have to play their part.
There’s no point in us being good quality operators and the charterers
ignoring us and chartering the cheapest rust buckets they can find. The
industry will just get into a deeper and deeper quagmire, so everybody
has to play their part, definitely.
Sean Moloney
What’s the reaction you’re getting from the owners you talk to?
David McFarlane
I would say the owners are probably all singing from the same song
sheet insomuch as they’re looking for transparency. They are looking
for seamless communication which is essential and they’re looking for
safe ships. It’s also their reputation that they’re putting into the hands
of the ship manager to operate their ship on their behalf. Going back a
little bit to the original question which was will self-regulation help all
of this? I think this is a way forward without a doubt, however, the oil
majors, flag states and port states will always be there: they’ll always
have a role to play and until ship managers/operators can try and get
this message of trust, transparency and complete compliance across
then it’s going to be very, very difficult for all these external bodies to
take a step back. Hopefully with this KPI initiative we can try going forward in that general direction.
Sean Moloney
Accountability is important in today's industry but should good quality
managers be singled out through some sort of IMO-driven 'white list'
and conversely should poor quality managers be included in 'grey' or
'black' lists. What’s your view Patrick?
Patrick Russi
I think there is definitely a need for recognising a quality owner or
quality operator but again it’s one thing to proclaim yourself to be
in that bracket and it’s another thing to demonstrate by your
results and your performance that you’re worthy of it. I think
that also applies to the industry as a whole. We can go out there
and say we are a quality, well managed, well founded, well-run
industry but if we keep having catastrophic incidents then what
is happening doesn’t match what we’re saying. Yes I do
believe that there should be quality recognition because our
industry is not free of charge. There is a cost to maintaining
48
There is definitely a need for
“recognising
a quality owner or
quality operator but it’s another
thing to demonstrate by your
results and your performance that
you’re worthy of it
”
higher standards whether it’s through training and procedures
or equipment so you should be able to differentiate
yourself from others in the marketplace. I
think we do need to have different
tiers of recognition. ➩
Is there anything you can all
do as a quality industry to
actually push forward your
common goals whilst
still maintaining this
competitive edge?
Sean Moloney
How would you see that reward or that recognition taking place?
Patrick Russi
We've been down this road before where we’ve said recognition should
be reflected in insurance rates or in the degree and number of inspections that your ships get subjected to. Instead of people wasting time
and resources focusing on say organisations which are perceived to be
of a higher quality is it better not to focus those resources further down
the ladder on those players that need to shape up or give up. I think
that’s where we need to go.
Mudit Paliwal
One could look at this issue with two different viewpoints as such. One
is the issue of recognition while the other is the issue of reward. When
quality initiatives are undertaken there’s a lot time, energy and resources
that need to be redirected into these initiatives. The focus on quality has
to come right from the top, so that you run a top - quality
organisation/operation all across the organisation. In terms of a reward I
tend to agree that there must be a reduction in insurance premiums,
higher management fees i.e. monetary benefits. In terms of recognition
– lesser port state control, vetting inspections etc. At the end of the day
if you are a good ship manager, it is a business that you have chosen to
be in and must provide the best possible service to your customers. It is
not in the interest of the industry to have a two tier structure.
Svein Pedersen
Just to follow on from what the last speaker just said, we have to be
very careful. There are so many players out there and if you split ship
managers into tiers then the poorer managers will try to win business by
lowering their fees and more accidents will happen. We should put ourselves on a level where everybody can follow and we should assist
them. Maybe I shouldn’t say that there will be more competition but
we have to bring everybody up to our standards.
Andreas Droussiotis
What I would really add to this is that the quality charterers do go for
the quality managers and the quality owners so the substandard players
are actually phased out. Take Exxon or any of the oil majors for example. Will they accept substandard owners? Will they accept a substandard manager with a very bad record? No they won't. So there’s no way
out but to really perform to a quality standard.
Rajaish Bajpaee
I just want to comment on this reward and recognition. It’s not only the
shipmanagement industry but also the shipping industry per say that is
under rewarded and under recognised for the risk and for the service
50
that it delivers. We in the shipping industry are always preaching to the
converted, that we carry 95% of the cargo and that half the world will
freeze and the other half will starve if shipping was not there. But people outside the industry do not know about it. Shipping doesn’t have a
constituency; shipping is an invisible industry. The legislators have an
image that shipowners are wealthy individuals, enjoying a lavish
lifestyle who hide behind shields and pay no taxes and they are always
trying to find loopholes. If the man on the street doesn’t know about
the contribution of shipping, how shipping touches his or her everyday
life, then the rewards will not be there. The task and the challenge facing the industry is to get this message across to the common public.
Sean Moloney
Let’s talk a little bit about image because I think it touches on what
Svein was saying earlier about transparency. What do you think needs
to be done to improve the image of shipping?
Dirk Lassen
Well the image of shipping is linked to the crewing issue and from my
point of view what we see now is a heavy rise in crewing costs, this of
course has a big outcome for us. The short term looks negative but
in the long run I think it will create a positive image to the shipping industry because as the high ranked officers on board
get good money many young Europeans will consider
the sea again as a career which has not been the case
for many years
We need to highlight
“
what we are actually doing
on research and development
and we probably need to
do more research and
development because
we need to show we
are innovative
”
ROUND TABLE
Sean Moloney
Is there anything you can all do as a quality industry to actually push forward your common goals whilst still maintaining this competitive edge?
Yngvil Eriksson Asheim
I think we need to work on a lot of different levels. I don’t think one
initiative is enough. I think it’s very, very important that the industry
works together on this issue. Far too often individual companies try to
solve all their problems themselves instead of joining forces. We need
to highlight what we are actually doing on research and development
and we probably need to do more research and development because we
need to show we are innovative. I’m personally very concerned about
recruitment in our industry not only referring to the seafarers but also to
those available to run the companies.
Andreas Droussiotis
A positive image of shipping is surely one of the most important things
we are lacking and the whole shipping industry needs to be blamed for
it because even international associations have not done anything to
improve the image. If we look back to the 1980s it was a time when
owners were moving their officers from Western Europe to the Far East
in order to save money. Ten years later they are wondering why they
don't have Western Europeans in the top positions. The social progress
in Europe is something which has also contributed tremendously to the
lack of interest. Its not only the wage gap that is failing to attract them,
but quite simply the fact that they don’t want to undergo all the stress
and pressure that comes with life onboard ship: the increased
inspections and now criminalisation. I’m
sure every single person round the
table understands the inexperience we have
through the quick
promotions
of all the
offi-
SHIPMANAGEMENT
cers especially from the Eastern block countries. You then sit back and
say okay I have all the nice quality systems and procedures in place but
I’m at the mercy of the individuals that are on board. The issue is basically training and upgrading and there is a certain truth in what Mr
Lassen has said, you also need to make wages an incentive to the job.
Egil Rensvik
The shipping industry had been thought of as a low-tech industry. From
a research point of view a lot of the vessels today are real high-tech,
both related to the design and the development process, with advanced,
integrated control and automation systems and with new challenges in
the management and operation of the ships. The shipping company is
part of the supply chain and some of the companies are moving towards
being logistics providers rather than being just shipping companies.
Another trend is the increased sourcing and outsourcing of activities in
the shipping companies. This requires better ship–to–shore communication and, in the future, more use of advanced scheduling decision support systems. This close interaction between ship and shore is also
becoming more and more important especially in attracting young people to sea. Lack of long time practical experience has to some degree to
be compensated by the use of simulators for training of crisis scenarios,
accidents and handling of critical situations. The shipping companies
should be more proactive in promoting these kinds of elements if they
are to attract young people to the industry.
Svein Sorlie
Now I’m going to do a PR stunt for InterManager. I think many of the
problems that we have been struggling with in shipping for the last few
years are due to our defective communication with the people around
us. We have allowed others to set the agenda and we have also not been
able to 'play the network' in the proper way through our discussions
with other stakeholders in the industry. I think somebody else said we
are only in the news when there's oil on the beach and there are dead
birds floating around. I think it is here that InterManager has a significant role to play as a communicator not only for shipmanagement in
general but for all who are involved in operating ships technically.
Rajaish Bajpaee
I want to reflect back on the previous issue of manning and I think it is
an issue which will challenge us for the next two to three years. I share
the sentiments of my colleagues around the table about the crisis we
all face and how it affects our operations but the cause is rooted in
the industry’s irresponsible approach to dealing with its human
resource problems. You go back 50 years and we had American
crews. When they became expensive we moved to Europe and
when Europe became expensive we moved to the Far East and
when the Philippines became expensive we found ourselves
in China and from China we go to Vietnam and from
Vietnam we go to Africa and so it goes on. We've always
been trying to find 'bandaid' solutions to our problems.
Today you can take delivery of a ship six months after
ordering. But it takes six to seven years to train a cadet to
chief engineer or master level so there is a fundamental
mismatch between the rate with which you can churn out
ships and the rate you can churn out a trained officer to
command the ship. Ships have become faster, bigger,
they carry more expensive cargos and the liability situation has increased but we have untrained crews commanding the bridge, or commanding in the engine room, all with
fast promotions. If you sack a seafarer then another company is waiting, willing to give him promotion. This is the situation that has been brought about by a complete irresponsible attitude of the industry. ➩
51
SHIPMANAGEMENT
ROUND TABLE
Our experience is that it’s
“harder
to attract good quality
shore staff in Singapore when
the economy strengthens. And
it’s especially hard to get well
qualified ex-seafarers to come
ashore for desk jobs as it’s often
the case that they receive better
pay and benefits while at sea
”
Svein Pedersen
I think the young seafarers joining the industry today are better educated than they were maybe 20 years ago. The problem we are facing
today, and this is mainly with Indian and Chinese seafarers, is that their
countries are now enjoying good times economically; the infrastructure
in these countries is getting better and better. But if they don’t get the
promotion they want they will leave for more lucrative shore-based
jobs.
Patrick Slesinger
I think we’re doing ourselves a bit of a disservice here. Obviously there
are commercial pressures when it comes to crewing but I don’t believe
that we go out and switch continents for five dollars. The simple fact is
that the traditional places for crewing such as India are now major business process sourcing areas and it is the economic development of those
countries with the offshoring of call centres from America to India to the
Philippines etc that is driving this fundamental interest. Why go to sea
to earn potentially less money? I don’t know many call centre operatives
who at the end of their days work, face the possibility of a jail sentence:
the criminalisation of a seafarer is a very real thing. We’re not going to
compete with call centres, you just can’t. I mean you’ve got to find different ways. To keep bumping up salaries, even if we could find the
money, means you are still not going to be able to compete. The number of hours for work, just getting to and from work is nonsensical. You
offer someone the same amount of money to go and sit in an office for
an eight hour shift or go onboard a vessel, what are they going to do?
Sean Moloney
But what can you do because you’re going to be chasing this pool of
seafarers that are eventually not going to exist any more or quality is
going to drop?
Patrick Slesinger
No you don’t fear the change, you go somewhere that has sustainable
growth. If you look at China there is sustainable growth there. They are
a seafaring nation and are certainly not tapped as far as they could be.
If Africa is required for crews in ten years time then we should be making proactive moves today. The quality required on board is still available in the marketplace, it’s a question of us being realistic and of
course those who ultimately pay for the seafarers salaries and compensation being realistic about what is required and not just turning round
to a ship manager and saying you’re supposed to provide us with
trained crew and then acting all surprised at the lack of qualified staff
after they refuse to sponsor a cadetship programme.
52
What can you do because
you’re going to be chasing this
pool of seafarers that are
eventually not going to exist
any more or quality is going to
drop?
Svein Sorlie
I would just like to make a short observation because I’ve been in this
business for almost 20 years and what we are doing now is exactly what
we have been doing all these years: sitting here complaining about our
miserable destiny and all the terrible things that are happening around
us. We have not been able to do anything about it. I mean I think all
people involved in managing or operating vessels have the same opinion as us. How come we are not able to change the pattern?
Sean Moloney
What do you think we now need to do to improve the image of shipping
and achieve all these positive things we’re talking about now?
Andreas Droussiotis
The sources of supply have been exhausted, it’s been said by many. For
China okay there are different opinions about China but in this particular
case to resolve the issue is not a matter of putting more money on the
table as Patrick has said because by doing that you don’t increase the
quality but just end up poaching people from other companies and it
becomes a vicious circle. What you need to do is to spend as much as you
can on training and upgrading and hope, that by improving the image of
the industry, you will attract additional people to the profession.
ROUND TABLE
Dirk Fry
I fully agree with Andreas. We have to make the industry more attractive to younger people and certainly initiatives like the EU directive
on the criminalisation of seafarers don't help. Fortunately international organisations like Intertanko and other organisations have taken up
this challenge and are threatening to take the European Union to court
on this directive. Yes we know that other competitors are trying to lure
people away from us by offering them more money but I still believe
our only way is to improve the image of the industry and continue our
policies of training. We can only hope that with the very obvious
shortage of officers and engineers in the industry, shipowners might
realise that other money is needed to pay for this training and so
I would ask them to come into the boat; it’s a famous boat that we
all want to sit in and to make the funds available to be able to train
these people.
Douglas Lang
I’d just like to make the point, if I was a young person sitting here listening to you people talking, the last industry I’d want to join is shipping. Now Svein you said you were 20 years in the industry, well
round this table there are hundreds of years of experience. Now why
on earth are we still here? Because it’s an exciting industry to work in
yet we cannot collectively enthuse young people to come into this
industry. Why? Because we sit round in groups like this and cut our
wrists and tear our hair out. We cannot enthuse young people to come
into this industry. Young people today are better educated than they
were before, they’re better informed than they were before, we don’t
need posters, we don’t need anything. Young people can find out an
awful lot about this industry and they take a choice. If they come into
the industry they can earn a wage that will pay their mortgage off by
the time they’re thirty never mind staying at shore, their tours of duty
are two months, there’s lots of industries where people are away from
home much longer than that, shore-based employees of ship
management companies for example. We’re dwelling entirely on
some of the wrong aspects about this job. There are some fantastic
areas working as engineers, working on the deck, working in almost
every area of shipping you come in contact with exciting people yet
you dour people around this table have forgotten that and unless you
remember that and go out into the industry/into the general public and
enthuse them with your own enthusiasm then you’re not going to get
anyone in.
SHIPMANAGEMENT
been here for 15 and I find it wrong to call that 'not been in the business
for a long time'.
Andreas Droussiotis
Ashore you have plenty. I don’t think that any company has any problem with people who are highly educated in maritime studies or in naval
architecture or engineering.
But we need both and we need them to work together and that’s actually one of our biggest challenges in my opinion. We need good practical people who can work very well together with the more educated
people and that’s a challenge for us. We are not actually good at that in
my opinion.
Andreas Droussiotis
I really don’t agree with it. If I go round the table one after the other,
even Svein who really was trying to make a joke, he never had a problem finding shore based personnel. The only problem is to get shore
based experienced personnel if you’re talking about superintendents,
technical or marine. The problem will be forthcoming with the shortage
of experienced people onboard the ships but for the time being I don’t
believe that any one of us has a problem to stop a vessel due to unavailability of people. The problem is there and will become greater. ➩
There are some fantastic areas
“working
as engineers, working
on the deck, working in almost
every area of shipping you come
in contact with exciting people
”
Andreas Droussiotis
Yes okay fine but a few cadets on board the ships don’t resolve the
issue. I don’t believe it’s a matter of bringing enthusiasm or anything,
it’s not. Yes he said he’s been in shipping 20 years, I’ve been in it for
32 years so what do I say? I blame myself for it. Do you blame yourself for the years you’ve been in it?
I think it’s about time we went out and said what an exciting business
we are in. I spend quite a lot of time talking to young people and I
spend some of my time working out how we can enthuse people in
schools to take the right subjects in order to get them into our industry
and I think it’s about time everybody around this table actually spent
some time on that. It’s not very exciting for young people to come into
a room where sitting – you have to excuse me – are 20 older men around
50-55 years old. If we are not willing to look at how we treat people and
how we train them, we talk about how we need to train them but how do
we train them? We talk about the salary but we are not talking about the
total package, we need to do that. I think it’s wrong also to focus only
on the seafarers because we need both people ashore and at sea. Even if
I have not been in the business for 30 years as some of the others I've
53
ROUND TABLE
And that’s why you get older and older people in offices and that makes
the industry less attractive to younger people so the spiral is going in the
wrong direction.
Svein Pedersen
I support the view that it’s increasingly difficult to attract quality shorebased staff. Our experience is that it’s harder to attract good quality
shore staff in Singapore when the economy strengthens. And it’s especially hard to get well qualified ex-seafarers to come ashore for desk
jobs as it’s often the case that they receive better pay and benefits while
at sea.
Svein Sorlie
Andreas, first of all I don’t share your approach to this. I think I’m
more in Yngvll’s direction. If we are to have a successful recruitment
policy in the future we have to view the shore-based and onboard situations together and we have to outline a lifetime career for the people.
Just look at the world newbuilding programme. Those vessels have to
be filled with crew and officers. What are these owners doing when it
comes to recruitment and training? Nobody wants to take the fight to
them because they are too big.
SHIPMANAGEMENT
pany. You have to identify the resource, get it at an early age and then
you have to grow it yourself which is the sort of stuff I think most of us
are probably doing. We are facing very serious competition if you like
from shore-based industries because it’s been said before that the differentials aren’t there. There’s a tremendous opportunity out there and we
have to fight but I don’t think we should be too hard on ourselves saying that it’s our own fault because I think the world at large has to face
up to what has happened. In the mid 1990s the industry had to adjust
to very low freight rates and went through some very lean years. I think
our own chairman wrote in our company magazine we were making
less than a 5% return on investment. This was significantly lower that
would be accepted in other sectors of the industry. Although markets
have improved in recent years, the industry has to work with the adjustments that had to be made previously. It will take time for the reinvestments that are being made on both the hardware and software sides to
work through.
Sean Moloney
Ladies and Gentlemen, thank you for your participation.
Patrick Russi
In my view we are facing very stiff competition from shore-based
industry and shore-based careers. I recently spoke to a young man who
had just come out of high school and was looking for a career and I
asked him what the careers officer had discussed with him. He said a
huge range of opportunities had been discussed ranging from technology to finance to medical to legal but shipping wasn’t even on the list,
hadn’t even been considered, it wasn’t even there. The careers officers
in the high schools don’t even have anything on their files to do with
shipping so we are facing a huge challenge I think in enticing people to
come to sea. Having attracted people to sea you have to give them a
sense of belonging, you have to make sure they understand that there is
a career, that they are going to have if you like an ownership in the com-
attracted people to
“seaHaving
you have to give them a
sense of belonging, you have to
make sure they understand that
there is a career, that they are
going to have if you like an
ownership in the company
”
55
OWNER PROFILE
MERCATOR LINES
Astute pursuit
Mercator Lines: a true success story
Atul Agarwal, managing director
H.K. Mittal, chairman
The market opportunity that the
two brothers-in-law who run
Mercator Lines exploited to the
hilt was by way of acquiring and
running single-hulled tankers for
crude carriage, at a time when
these tankers had been condemned by the International
Maritime Organisation for
phase-out by the year 2010
A
lmost exactly three years ago, the name of Mumbai-based
shipowner Mercator Lines would hardly have evoked enthusiastic response from most members of the Indian shipping
fraternity, let alone at global level. In April 2003, Mercator’s
fleet strength was a mere five vessels aggregating under
400,000 dwt. In the three years since, the astute pursuit of a business
opportunity that would not present itself a second time has given the
company a fleet of over 2 million dwt, an exceedingly healthy bottomline and the accolade of India’s second largest private sector shipowner, behind Great Eastern Shipping.
Not only that, but its Rs1 face value share currently commands a
price of Rs 43 on the Bombay Stock Exchange, with a price-to-earnings
ratio that continues to make it a worthwhile purchase. Rich rewards
have come the way of its shareholders, including consistently good dividends and an extremely generous 3:2 bonus issue (i.e. three shares for
every two shares held), made earlier this year.
The market opportunity that the two brothers-in-law who run
Mercator Lines exploited to the hilt was by way of acquiring and running single-hulled tankers for crude carriage, at a time when these
tankers had been condemned by the International Maritime
Organisation for phase-out by the year 2010. With India importing 70%
of its crude oil requirements, there was a crying need for tankers which
could bring in crude from vendors the world over, especially the
Arabian Gulf. Single-skinned tankers were going cheap in the secondhand market, and Mercator Lines picked up some of them at bargainbasement rates.
“About five years ago, the huge 33m tonnes a year Reliance
Petrochemicals refinery came up in Gujarat; and it needed crude oil
from abroad to keep it working,” recalls 56 year old H. K. Mittal, the
company’s chairman and managing director, and a chemical engineer
by training.
“We realised that the future was in crude carriage, not in product
transportation. At the time, we had been thinking of expanding in a big
58
way on the product side. That is why we had acquired an MR product
tanker in 2001. But once we realised that the future was in crude, we
entered this segment in early 2003. It took us a couple of years to plan
and arrange the required funds. That is how we started with an Aframax,
and went on expanding swiftly.”
Today, Mercator Lines has overtaken Essar Shipping to merit the
accolade of the country’s second largest private sector shipowner. It
owns 21 vessels, aggregating just over 2m dwt, which includes nine
geared Panamax breakbulk vessels that it took on long-term charter
from the Norwegian company Klaveness in late-2005.
While accounts for the fiscal year ended March 31, 2006, are yet to be
finalised, the declared results for the first nine months revealed the company notching a 53% rise in operational income to Rs5.93 billion
($134m) from Rs3.88bn for the April to December 2004 period, even as
net profits improved 23% year-on-year, to Rs1.36bn from Rs1.01 billion.
“Our profits in the third quarter were constrained by a substantial
increase in interest, to the extent of 255%, and depreciation, which went
up by 185%; and our problems were compounded by a much higher
provision of 197% that needed to be made for tax for the year,” said
Mercator’s 47 year old managing director Atul Agarwal, whose wife is
the sister of the company chairman. The two became business partners
only when Mr Agarwal was sought as a prospective groom for the
younger sister of the Mercator chairman’s wife.
At the time, Mercator Lines had been acquired by Mr Mittal from its
previous owner, T. V. Ramchandani, in 1988. It made its initial public
offering in 1993 and since then has always made a profit and always
declared a dividend.
“It has never happened, even in the worst year for shipping, that the
company has gone a year without declaring a dividend,” said Mr
Agarwal. “And growth has always been there, year on year.”
Credit for this situation must be given as much to their business philosophy as their foresight. With both belonging to the Marwari community that boasts natural business acumen, it is hardly surprising that
MERCATOR LINES
their brains have worked well in tandem. Both brothers-in-law are very
clear in their minds that the company exists for the main purpose of
making money and providing its shareholders with capital appreciation.
It is not averse to exploiting any segment in shipping, should an opportunity present itself.
“Whether it is liquid or bulk, containers or gas, if there is money to
be made, we will not hesitate to get into it,” said Mr Agarwal. “And
whether we make our money operating vessels, or indulging in asset
play, our objective will be to maximise returns for our shareholders.”
Indicative of the kind of lucrative contracts that Mercator has won is
a $32m, five-year deal with the British Gas subsidiary BG Exploration
& Production, for the charter hire of a single-hull tanker. The vessel has
been deployed purely as a storage tanker at the Panna-Mukta oilfields,
in which BG has an equity stake.
“Most of these single-hulled tankers have been fully depreciated well
before the IMO deadline, so whatever we earn from their deployment
today is pure profit – and they can be scrapped at any time if they prove
uneconomical to run,” said Mr Agarwal. “As the tanker segment has
been very strong over the past two years, we had opted for consolidation
in this sector. We will continue to focus on the tanker segment as our
core business, while handling the bulk sector through our Klaveness vessels, or – for that matter – any other segment that will prove profitable.”
Nevertheless, Mr Agarwal insists that the company’s orientation has
been towards a long-term policy, and that its second-hand acquisitions in
the tanker genre in 2005-06 have all been quality double-hulled vessels.
“Our good results have been basically because of the strategic acquisitions we made during fiscal 2003-04 of four second-hand Aframax vessels, including three that have been chartered in,” he said. “For the size of
the company that we were at the time, it was a massive expansion.”
The basic thinking behind the single-skin tankers’ acquisition was
also extremely sound. “We had to look at the return on the capital
employed,” recalled Mr Mittal. “We also had to look at the prices of
double-hulled Aframaxes that were being built in those days, and their
delivery schedules. If I had ordered one in 2003-04, I would not have
got delivery before 2007 or 2008.
“That was the wrong time for us to be buying double-hulls. They
were simply not commercially viable for a company like ours. Today,
however, things have changed, and quality second-hand double-hulled
tonnage has become available in the market.”
Mr Agarwal agreed: “Tanker freight markets are down substantially
over the high points of December 2004. This is the time that we want
to pick up quality double-hulled tonnage, since India’s crude carriage
needs continue to be healthy.”
To ready the funds for such acquisitions, Mercator has taken several
steps, including securing permission from the Indian stock exchanges
on which it is listed to issue securities up to $75m through the medium of a private or public offering in either domestic or
international markets. “The securities could take
the form of American depository
receipts, global depository
receipts, bonds
OWNER PROFILE
or equity shares,” said Mercator’s director and the chairman’s elder son,
Shalabh Mittal, who joined the company after completing a degree in
Business Administration He has been placed in charge of the company’s
year-old Singapore subsidiary.
The company had been virtually forced to launch the Singapore subsidiary, and another branch in Panama after the refusal of the
Directorate-General of Shipping in September 2005 to allow it to execute the charter deal with Norway’s Klaveness. Some shipping experts
termed the DGS move ill-conceived and an entirely avoidable loss to
the Indian flag, since Mercator added 11 Panamax bulkers to its fleet
during calendar 2005.
Some of these ships have since been placed on time charter while the
rest are ferrying coal between foreign ports. Mercator holds the option
to buy three of these vessels at rates that are about $10m-15m cheaper
than their projected market price. The company has also sought permission for the issue of 8,000,000 warrants carrying entitlement or option
to apply for an equal number of equity shares on preferential basis to
the promoter's associate company AHM Investments, in accordance
with the guidelines of the Securities and Exchange Board of India.
With foreign institutional investors seeking the equity of the company, Mercator has sought an increase in the limit of investment by such
institutions of up to 70% of the company’s paid-up equity capital. In
short, it is an all-round shoring up of its financial soundness. Today, the
Mercator bosses feel that Indian shipowners can really compete with
the best international shipping companies. Earlier, indifferent Indian
policies allowed other countries’ shipowners to flourish, since they
could carry Indian cargo. It has come to a point where Indian bottoms
carry a mere 20-22% of Indian cargo.
“Greek owners employed Indian seafarers, carried Indian cargo and
made money,” said Mr Agarwal, ironically. “Indian owners employed
Indian seafarers, often faced a shortage of good seamen, and did not make
money because they could not carry the country’s cargo! Take, for example, the policy of appointing the Shipping Corporation of India (SCI) as
the nodal agency for crude carriage. Could SCI provide all the vessels
needed for the crude? No. And the government stopped the Indian private
sector from acquiring vessels. So who benefited?
The Greek owners! Wrong policies of the
Indian government were responsible.
“A lot has been done on the
economic liberalisation front, I
agree, but a lot still remains
to be done,” he said. ■
Today, the Mercator bosses
feel that Indian shipowners can
really compete with the best
international shipping companies
59
REGULATORY RADAR
WHAT’S GOING ON IN THE CORRIDORS OF POWER
Mitropoulos 'fatigue' worry
Welcoming the recent BIMCO/ISF manpower 2005 update for its more encouraging
projections of the calculated shortfall of
trained and available officers worldwide,
IMO
secretary-general
Efthimios
Mitropoulos has raised concerns over the
outcome of recent analyses of accidents
which indicated that, due to inappropriate
levels of manning and watchkeeping
arrangements, particularly in short sea voyages, fatigue had emerged as a significant
contributory factor in accidents. He told a
recent meeting of the STW sub committee
that perhaps the time had come for these
principles of safe manning and the provisions related to watchkeeping arrangements
and hours of rest within the STCW
Convention to be re-assessed, possibly by
the identification of factors against which
maritime administrations could evaluate
proposed or actual manning levels on ships
of similar types, size and trade.
Meanwhile, at the time of going to press
the IMO Maritime Safety Committee was
mulling a recommendation that the STCW
'95 regulations be completely revised after
four separate amendments over the past 10
years. According to the IMO, further
amendments are likely over the medium
term so perhaps the time had come for
another comprehensive review of the convention. Rear Admiral Brady, director general of the Maritime Authority of Jamaica
and chairman of the IMO's STW subcommittee, previously claimed that advances in
technology over the last 10 years promised
training opportunities that had not yet been
included in the revisions. ■
EC competition probe
A detailed investigation has been launched by
the Commission into Sea-Invest’s acquisition of
joint control in EMO-EKOM. Both companies
are cargo-handling companies mainly active in
the loading, unloading and storage of iron ore
and coal. The EC's initial market investigation
found that the proposed transaction gave rise to
competition concerns on the market for coal and
iron ore terminal services at the ports of
Antwerp, Rotterdam and Amsterdam, including
Zeeland, the so called ARA range. Meanwhile,
Brussels mandarins have cleared the proposed
acquisition of the French shipyard Chantiers de
l'Atlantique (CAT), by Aker Yards ASA. The
Commission found that the proposed transaction
would not significantly impede effective competition in the European Economic Area (EEA)
or any substantial part of it. ■
WATCHING THE WATCHKEEPERS
EMSA pollution call
International initiative
on Baltic pilotage
The European Maritime Safety Agency
(EMSA) has launched a second call for tenders
to provide additional oil pollution response
capabilities in EU waters. This comes after it
set in place an initial network during 2005,
based on response vessels in the Baltic,
Mediterranean and Atlantic regions. EMSA is
looking to extend its Atlantic and
Mediterranean capabilities from 2007. ■
Brussels backs
Lithuanian seafarers
EC officials have approved the introduction of a
mechanism in Lithuania to refund employers’ social
insurance contributions in respect of EU seafarers
working on Lithuanian flag vessels. The mechanism
allows for the partial or full refund of employers' contributions. The authorised scheme will run from
January 2006 to end 2011 and is expected to cost up
to Euro 4.63 million per annum. ■
60
In the wake of the IMO resolution recommending the use of pilot for ships navigating through
the entrances to the Baltic Sea, the international
shipping community has joined forces with the
Danish maritime authorities to find ways to further enhance the safety of navigation. Open
transparent dialogue will be encouraged
between pilotage service providers and users to
ensure optimal pilotage services in general and
to encourage the use of pilots for ships navigating through the entrances to the Baltic Sea.
A Joint Pilotage User Group was formally
established at its inaugural meeting at the
beginning of May. Svend Eskildsen, director
general of Royal Danish Administration of
Navigation and Hydrography, will act as chairman and initial members will include the Royal
Danish Administration of Navigation and
Hydrography, the Danish Maritime Authority,
INTERTANKO,
INTERCARGO,
ICS,
OCIMF and BIMCO. ■
SHIPMANAGEMENT
INTERMANAGER
Building for the future
15 years of InterManager 1991-2006
Spreading the
quality ideal
The origins of InterManager can be traced back to the late 1980s.
At that time, shipmanagement was emerging as an important industry
in its own right, but lacked any real forum for debate as an homogeneous group. The idea of forming an association of shipmanagers was
first floated at that time, partly to serve this need but also in response to
what was perceived as unfair criticism of a growing industry sector.
A perceived deterioration in shipping standards over the preceding
two decades was blamed by many
industry commentators on the shipmanagement sector. The argument ran that,
with the replacement of the traditional
shipowner structures by new types of
owner such as K/S investors, third party
managers had become the instrument of
cost-cutting and substandard operations.
According to InterManager president
and Eurasia president and group managing director, Rajaish Bajpaee: “In the
late 1980s the worldwide consciousness
of the need for quality practices in the
day to day management of ships had yet
to emerge as a pressing pan-industry
issue. This was a difficult period for
shipping in general, and the industry
faced a depression of historic proportions. The situation was only worsened
by a spate of serious accidents, which
were blamed on human error and management failures.
“The mood at the time has been succinctly captured by Lord Justice Sheen
in his inquiry into the loss of the Herald
of Free Enterprise where he famously
described the management failures as
'the disease of sloppiness', which pervaded every level of the vessel
operator’s hierarchy.”
During the late 1980s the shipmanagement sector was still in its infancy, and lacked a common voice. Mr Bajpaee believes this made the sector vulnerable to the witch hunts, which inevitably followed the shipping
casualties of the day, and it soon became clear that the maritime industry
had found a convenient scapegoat to blame.
Acknowledging the pressure on standards, the shipmanagement sector reacted and embarked on a quality assurance system by which negative trends could be acted upon. The result of this initiative was the
creation of the International Ship Managers' Association (ISMA) in the
spring of 1991.
“Recognising the possibility that the very existence of the sector was
at stake, the leading quality shipmanagers of the day resolved to present a united front to the pressures being faced by the industry,”
explained Mr Bajpaee. “The shipmanagement sector achieved this by
way of self-regulation, and by voluntarily binding themselves to a
Code of Conduct and Practice. It was only a matter of time thereafter
that this united front was incorporated in 1991 into an independent
association of shipmanagement companies, known then as ISMA.”
The Association was incorporated to act as the visible and united
face of a movement within the shipmanagement community towards
quality assurance and accountability. According to Mr Bajpaee: “The
most substantial achievement of the Association was in providing the
shipmanagement sector with a homogenous voice, and in the formulation of
the 'ISMA Code' ... an exceedingly rigorous code of conduct, which had to be
compulsorily followed by the
Association’s membership, and verified independently by way of an external audit mechanism.
“The ISMA Code was unique and
revolutionary because it was proactive
in nature and advocated voluntary self
regulation. There were several codes
of conduct, which emerged as reactions to the rash of highly publicised
casualties and incidents, but these
codes were just that – reactionary.
These codes did not subscribe to the
higher ideal of excellence in shipmanagement, and eventually lost their relevance when the ISM Code made basic
quality practices in shipping mandatory.”
Mr Bajpaee believes the ISMA
Code has continued to retain its relevance even in the present day when
shipping is highly regulated since the
Code subscribes to the rigorous pursuit of excellence in many more dimensions as opposed to focusing
upon the basic standards of quality and safety which are achievable in
day-to-day shipmanagement.
“More recently,” he said, “the Association has come to recognise
that excellence within the shipmanagement sector alone cannot guarantee quality in shipping. The maritime value chain is only as strong
as its weakest link, and accordingly each link within the chain needs
to be strengthened. The Association has therefore embraced a broader and more inclusive philosophy of inviting the participation of each
link within the value chain, in the pursuit of excellence.
“The ISMA Code subscribes to the
rigorous pursuit of excellence in
many dimensions”
62
INTERMANAGER
A perceived deterioration in shipping
standards over the preceding two
decades was blamed by many industry
commentators on the ship
management sector
SHIPMANAGEMENT
INTERMANAGERCHRONOLOGY
1988
The formation of a professional, homogeneous organisation to represent
the shipmanagement sector was first aired in Hong Kong partly as a
response to perceived unfair criticism and partly in recognising the possibility that the very existence of the sector was at stake.
1989
Five of the largest shipmanagement companies form a group, later to be
replaced by ISMA, to prepare the foundations for an Association and to
compile a Code of Shipmanagment Standards for members, which was
the forerunner of the ISM Code.
1990
By the end of 1990, the Code and articles of association for the proposed
new Association are completed and circulated to about 50 shipmanagement companies and interested parties.
1991
In April 1991, ISMA officially comes into being at a meeting in London.
Marisec becomes the secretariat for the Association's 35 founder members.
Denholm managing director David Underwood is elected founder president.
1994
“In this behalf, the Association has recently introduced
'Associate Members', that is, industry players who are not engaged
in shipmanagement as their core business but who contribute to the
sector through their involvement as partners within the maritime
value chain. These members need to be elected on the basis of the
commitment they demonstrate towards the Association’s pursuit of
excellence.”
Mr Bajpaee said the re-branding of the “erstwhile ISMA
occurred in the context of this expansion of the membership, and
nearly simultaneously with this significant paradigm shift in the
Association’s approach to quality.
“This broadening of the Association’s approach to excellence has
occurred under the umbrella of what is known as the 'KPI
Initiative'. The KPI Initiative is a movement for the establishment
of pan-industry objective Key Performance Indicators (KPIs)
against which the performance of ships and their operators would
be judged,” he expalined.
“The movement aims at harnessing the expertise of each link
within the maritime value chain, and developing a set of universal
KPIs through the participation of all sectors in ocean transport within the Initiative. Hence the need for an active constituency of
Associate Members who will be called upon to contribute their
unique expertise in the formulation of the pan-industry KPIs. These
Associate Members are today very actively involved in
InterManager’s work, and the success of the KPI Initiative rests on
their continued involvement and engagement.
InterManager has grown considerably over the years and to
spread the quality ideal, in 1994 membership was extended to crew
managers. “InterManager is widely acknowledged as the voice of
quality conscious players within the shipmanagement industry and
allied industries,” commented Mr Bajpaee. “We see ourselves as
evolving into an increasingly visible and proactive association,
which will act in synergy with other similar trade associations,
Governments and Inter-Governmental organisations for promoting
and enhancing sustainable and objective quality in shipping.” ➩
ISMA president Joachim Meyer of Hanseatic welcomes the ISM Code but
states it is not as comprehensive as the ISMA Code, which covers all
aspects of ship operations and shipmanagement. Membership is extended to include crew managers.
1995
The first full-scale revision of the ISMA Code takes place. All the requirements of the final ISM Code are included and new provisions are made to
allow for crew management members.
1996
The revised Code is issued in February. Rules for associate membership
are eased to accept companies deemed to have equivalent quality standards, but this brings in only a few new recruits. The executive committee,
as a result, decides against becoming a full trade association to return
ISMA to an Association of quality shipmanagers.
1998
Increased business is anticipated by shipmanagers as a result of the
implementation of the first phase of ISM and the fallout from the Asian
financial crisis. Members are warned to assess carefully any potential new
clients seeking shipmanagement services to solve their ISM requirements.
1999
Speculation about consolidation within the shipmanagement sector mirrors developments in the wider shipping market. This leads to talk of a twotier market with the big shipmanagers set to grow in size to achieve
economies of scale, while the smaller operations are forced to offer
restricted services.
2000
The ISMA Code is totally reviewed and a new version issued.
2005
InterManager is launched in Hong Kong. The new trade association is
armed with a broad mandate to galvanise the contribution of the global
shipmanagement sector to the industry-wide drive for improving the image
and performance of shipping.
63
INTERMANAGER
SHIPMANAGEMENT
Accountability
is key to quality
management
InterManager's KPI Initiative will be as
groundbreaking a development, as the ISMA
Code, believes president and Eurasia Group
president and group managing director,
Rajaish Bajpaee. “Eventually, the various KPIs
will be distilled into a single rating for ships
and their operators, and this single rating will
objectively account for every relevant aspect
of the ship’s management,” he explained.
“The rating will become a powerful tool for
investors, underwriters, ship owners, flag
states, ports and port states, regulators and
indeed anyone who would possibly want to
assess the quality of a vessel or her operators.
“The KPI movement addresses the core
issue, which faces the shipmanagement industry, namely quality ... the quality of tonnage,
the quality of crew and quality practices in
shipmanagement, he added.”
InterManager general secretary Stephen
Chapman believes that the key issue for ship
managers is how these KPIs dovetail with
TMSA (Tanker Management and Self
Assessment). “To start with one has to understand a fundamental that underpins what
InterManager holds close ... quality comes
from self-regulation with verification for
which is needed uniform measurement criteria.
This is common too with the oil companies’
TMSA initiative,” he stressed.
The KPI Project was initiated by a Sponsor
Stephen Chapman
“The use of KPIs
within shipping has
gathered pace as
the industry focus has
shifted from detailed
process regulation to
goal-based regulation”
Group of 18 ship owners and ship managers,
and spearheaded by InterManager. The project
aims to develop a set of KPIs for ship managers, which would be acceptable to all stakeholders on a pan-industry basis. These stakeholders include the IMO, ILO, all Port State
Control organisations, oil majors, charterers
and classification societies among other regulatory and enforcement agencies.
Mr Chapman said that Phase I of the KPI
Project was complete. “It [Phase I] has identified and adopted the 'conjoint value hierarchy'
(CVH) methodology for developing a set of
KPIs based on the requirements of all stakeholders. These KPIs will be easily collectible,
measurable and, besides being verifiable by
any and all stakeholders, will facilitate a selfassessment culture, which would elevate the
shipmanager's performance from the present
culture of compliance with minimum criteria.”
According to Mr Bajpaee, KPIs should follow predefined measurement standards and be
auditable. However, he said this is a long
process of not only development of standards
and delegation of audit functions, but also of
having the acceptance of all stakeholders.
“The KPIs must be quantified in such a way
that they are neutral,” commented Captain
William Lunn, marine manager, Navigo Ship
Managers. “They should not be influenced by
factors such as changes in fleet size or ➩
65
SHIPMANAGEMENT
INTERMANAGER
“To succeed I believe we do need to
get support and involvement by all
major players in the market including
owners, charterers, oil majors, and P&I
Clubs. If they do not feel accommodated, the matter will fail totally”
exposure hours. Generally, therefore they should be expressed as percentages or ratios.”
While many responsible ship managers have developed their own
in-house KPIs, there has, as yet, been no common standard to set
these industry-wide. Mr Chapman said the use of KPIs within shipping has gathered pace as the industry focus has shifted from detailed
process regulation to goal-based regulation. “Stakeholders who could
require more proof of a shipmanager’s operational worth include
owners, charterers, oil majors, insurance companies, P&I Clubs and
underwriters, port state authorities and flag state authorities.”
Mr Bajpaee said: “It is in its own best interest that the shipmanagement sector takes the initiative to develop uniform measurement standards and mechanism of audits. KPIs are a necessity if the shipmanagement sector is to break the myths of accountability and transparency. A uniform method of performance measurement will enable ease
of comparison and scope for continuous improvement.
“The accomplishments of the shipmanagement sector may not be so
spectacular when compared to what the sector can achieve by combining its strengths, identifying its weaknesses and formulating criteria for
self-governance through a common forum. InterManager, once again,
must exert itself with full support of the shipmanagement sector.”
Rob Grool, Wallem Group managing director, welcomes current
initiatives to create general KPIs which can be an industry standard.
He said: “Ship managers are the operators of the future; ship owning
will be more and more an asset play, with the day to day technical
operation between the moment of buying the ship and selling it taken
care of by the managers.
“No ship owner, who realistically allocates the costs of managing
his ships through his own organisation, can ignore the cost,
efficiency and knowledge benefits of conscientious third party ship
managers. We are uniquely qualified to assess the quality of perform-
INTERMANAGER
“We have to show that we are capable
of self-regulation, otherwise we will
continue to be bombarded by
unilaterally imposed regulations
and requirements from numerous
stakeholders”
SHIPMANAGEMENT
ance of the many different ship types and sizes of all ages under
our management.”
Hanseatic Shipping Co managing director, Andreas Droussiotis
believes the shipmanagement sector is right to develop its own standard KPIs. “But,” he says, “to succeed I believe we do need to get
support and involvement by all major players in the market including
owners, charterers, oil majors, and P&I Clubs. If they do not feel
accommodated, the matter will fail totally. The need for the industry
to develop is only on account of the fact that we are the ones who
know what is best for the industry at large.”
In agreement with Mr Droussiotis, Captain Lunn commented that it
was very important for ship manager to develop KPIs. “We have to
show that we are capable of self- regulation, otherwise we will continue to be bombarded by unilaterally imposed regulations and
requirements from numerous stakeholders.
He said that in terms of individual items that should be highlighted
in the KPIs, “safety and environmental management are top of the
agenda for everyone”.
As to what the benefits of these KPIs would be, Mr Bajpaae
explained: “The maritime industry, as a whole, and shipmanagement
sector, in particular, have not developed any uniform system of performance measurement and monitoring. Although the industry performs to extremely high standards, the absence of documented and
audited performance parameters and records lead to unjustified and
distorted public and political views. Much hue and cry has historically led to tarnishing of the industry image whenever there are maritime
casualties or incidents of pollution. ➩
67
INTERMANAGER
Fleet growth
compounds
seafarer shortage
“The shipmanagement sector therefore stands to improve its public
image, as well as set exalted performance parameters to aspire to.”
Mr Grool said that while shipmanagers have been using explicit or
implicit KPIs for many years to check performance against the goal of
continuous improvement as per the ISMA standards and others (ISM,
ISO, ISO 14000, OSHAS, Green Award), TMSA will make the
demand for KPIs more externally driven. “Proper KPIs, and a clear
insight into how data are used to arrive at those KPIs will make the
performance of the ships more transparent,” he commented.
Expanding on the transparancy ethic, Capt Lunn believes the KPIs
will foster greater trust, while Mr Droussiotis said the KPIs will allow
shipmanagers to operate in a more realistic and professional way
rather than trying to cope with requirements for the sake of the
requirements. “Also,” he went on, “the people on board will be more
concerned to learn rather than to fill in forms and be confused by the
different requirements of all parties.”
Mr Chapman believes there are many good reasons why both individual shipmanagement companies, and the shipping industry as a
whole, need to adopt common standards. “One reason is that KPIs
currently in use tend to be limited, often varying widely between companies. As a result, they do not actually help a company to manage
itself well, nor are they useful for comparing performance between
companies, so called bench marking.
“Increasingly, in the shipping industry, as in other major industries,
KPIs are being used not only to better manage a company’s operations, but also to provide the foundation for a company’s corporate
social responsibility strategy. To properly manage a company today,
executives also need to understand broader performance indicators,
including those for social, environmental, safety, security, and corporate governance,” he concluded.
SHIPMANAGEMENT
The ongoing shortage of seafarers is only going to be exacerbated
by the wave of newbuildings, which will be delivered over the next
few years, believes InterManager president and Eurasia Group president and group managing director, Rajaish Bajpaee. “The only way a
ship owner can possibly deal with this problem is to engage the services of a reliable and capable manager who has had the foresight to
invest in a robust and sustainable crew pool,” he explained.
“Some of us within the shipmanagement industry saw this crisis
coming, and we have invested considerable amounts of time, money
and expertise in bracing ourselves for the situation. Those who have
failed to do so are finding themselves dealing with crises in quality
and are facing increasing detentions and losses due to their lack of
preparation and foresight,” continued Mr Bajpaee, who believes there
is a similar shortage in staff ashore. “But again those of us who have
taken care to invest in our people are finding it considerably easier to
weather the current storm.”
“Those of us who have taken care to
invest in our people are finding it
considerably easier to weather the
current storm”
On the shore-based staff issue Captain William Lunn, marine manager, Navigo Shipmanagers says his company has not yet experienced
any recruitment problems, “but there is a real danger it will occur
sometime in the near future”. He does agree that there is a shortage of
quality seafarers, but that this can be improved by better development
of career prospects for seafarers coming ashore and by better pay
structures especially for nations with developed seafaring superstructure. “It won’t happen overnight,” he commented.
Typically forthright, Rob Grool, Wallem Group managing director
believes there is no argument about a lack of seafarers. He says that
while retention of seafarers is a core issue for shipmanagers “it is
not a belief, it is a certainty that there is a shortage of quality seagoing staff”.
Like Mr Bajpaee, he also believes the situation is being made
worse by the expansion of the world fleet and the fact that ships ➩
69
SHIPMANAGEMENT
INTERMANAGER
Fees restrict
investment
‘There are too many managers
tendering for new business by offering
unrealistic operating budgets and low
fees. I believe such practices are
short-sighted and lead to too many
ancillary problems’
are getting bigger and the demands on crews are increasing. Mr Grool
says the situation could be improved by an image makeover for the
industry to attract career minded capable people and by offering quality training both ashore and on board. He said: “Law-makers,
shipowners, managers and authorities should realise that going to sea
is more than a job, it is a way of life.”
To combat the worsening manpower shortage Columbia
Shipmanagement Ltd has run an internal programme aimed at harnessing and developing the skills of its staff to improve working relationships with customers. According to managing director Dirk Fry
the company also has a programme in place that offers young and talented people long-term employment prospects at sea and then ashore.
He said this programme has been fruitful.
Hanseatic Shipping Co managing director, Andreas Droussiotis
believes the seafarer shortage will get worse over the next few years
largely because of the number of new vessels being added to the
world fleet. “For the last two years the additional requirement was for
about 50,000 seafarers, out of which 3,500 are masters, chief engineers and chief officers and they do not grow on trees. It takes about
70
a year to build a vessel and 10 years to have a cadet in the position of
master. This shows the extent of the problem we face.
“The only thing we can do [to improve the situation] is invest as
much as we can in training and upgrading. This at least partly will
resolve the problem.”
Mr Droussiotis believes that the profession of the seafarer needs to
be made more attractive. “We need to create a better image of shipping in the minds of people. As difficult as it may sound, we also have
to find additional areas to recruit from.”
Shipmanagement fees are a thorny issue among most shipmanagers.
Many are adamant that the fees they receive are not adequate. Hanseatic
Shipping Co managing director, Andreas Droussiotis puts it succinctly:
“Fees are in no way proportionate to the exposure, responsibilities,
requirements and demands of all parties involved in the operation.”
InterManager president and Eurasia president and group managing
director, Rajaish Bajpaee contends that shipmanagment fees do not
allow consistent investments in manpower, technology and infrastructure to allow shipmanagers to exceed customer requirements. He says
that while managers' work expectations have increased through the
implementation of regulations such as ISPS and the ISM Code, fees
have not increased in proportion.
Mr Bajpaee does not put the blame for unrealistic fees solely at the
door of shipowners, and believes that intense competition for business
among shipmanagers is a major factor. Further, he does not believe in
the idea of performance-based bonuses saying that shipowners should
acknowledge the improvements in quality management and invest
accordingly.
Captain William Lunn, marine manager, Navigo Shipmanagers
agrees with Mr Bajpaee. “Fees are under commercial pressure from
competing managers,” he said. “There seems to be little reward for
delivering a superior service. Bonus schemes for achieving pre-agreed
targets are being talked about, as are penalties for failing to deliver.
These might have some merit ...quality operators need to feel justified
in ‘going the extra distance’,” he continued.
The competition issue is one endorsed by Dirk Fry, managing
director, Columbia Shipmanagement Ltd, who believes there are too
many managers tendering for new business by offering unrealsitic
operating budgets and low fees. He believes such practices are shortsighted and lead to too many ancillary problems. ■
LAW
Repeal of Regulation 4056:
SMI asked two leading law firms from either side of the Atlantic to give their
views on the European Commission’s plans to abolish Regulation 4056/86
(European Liner Shipping Conference Regulation).
Kirstie Nicholson is a Consultant in the Brussels office of Lovells,
the international law firm (www.lovells.com).
By Brett M. Esber,
Partner at US law firm Blank Rome
In December 2005
Repeal of the EU block exemption will likely create conditions
in the US Transatlantic trades that are very much like those in the US
Transpacific trades. Although the Ocean Shipping Reform Act of 1998
(“OSRA”) did not repeal the antitrust exemption for liner shipping
conferences, the result of OSRA was to significantly weaken the ability of conferences to police adherence to conference pricing directives.
As a result, conferences are essentially non-existent in the US trades,
with the exception of course of the Trans-Atlantic Conference
Agreement.
Instead of conferences, the principle means of cooperation among carriers in the US trades is through consortia and alliances. With respect to the
sharing of more general trade information, many carriers participate in discussion agreements covering the US trades. Under these agreements, carriers meet to discuss conditions in the trade and frequently adopt recommendations on price adjustments and surcharge levels. These recommendations
are not binding on the agreement members.
The repeal of Regulation 4056/86 and implementation of the rules that
will likely replace it will eliminate the only remaining carrier conference
covering the US trades while allowing the same types of carrier cooperation and, most likely, the same sort of information sharing currently permitted by US laws. Although shippers have been the driving force behind
these changes both in the US and EU, I believe carriers have benefited as
well. By ensuring that negotiated rates will remain confidential, carriers
are given the ability to draw important distinctions between their customers
without running the risk of having to give every good customer the same
rate given to their best customers. After all, negotiation is best done in a
private and confidential manner, with each party free to agree on terms that
are acceptable to it without the need to explain their pricing decisions to all
their other customers.
The repeal of Counsel Regulation 4056/86 takes the OSRA changes one
step further. What OSRA rendered ineffective, EU law would prohibit.
Following the repeal of Regulation 4056/86, neither US nor EU laws will
promote carrier conferences, and both sets of laws will allow carrier consortia and alliances. ■
the EC Commission published its proposals to
review Regulation 4056/86, and set out details of the future regulation
of the international maritime industry under EC competition law.
The Commission's key proposals are: the abolition of the block
exemption for liner conferences; the repeal of the current exception of
tramp and cabotage services from the EC Competition law powers of
investigation and enforcement; and the publication of guidelines for the
application of the EC Competition rules to the maritime sector.
The Commission's proposals have a number of implications for the
maritime industry. For the liner industry, liner operators will no longer
be able to continue to co-operate through conferences in the form in
which they have traditionally existed. However, liner operators will be
able to continue to discuss certain, much more limited, types of information in the future.
Removal of the current exception for tramp shipping means that the
Commission's powers of enforcement of EC Competition law will
apply to this sector, most significantly the Commission's power to
impose hefty fines for breaches of EC Competition law. This proposal
brings the treatment of the tramp shipping industry into line with all
other industry sectors.
The Commission's proposals came as no surprise to most. However,
the Commission's commitment to develop and adopt specific guidelines
on the application of EC Competition law to the maritime industry, in
particular, on information exchange within the industry, are to be welcomed. There has been little clarity in the application of EC Competition
law to the unique forms of cooperation, such as conferences and pools,
which have traditionally existed within the maritime industry.
It is clear, however, that the Commission has much further work to
do in order to identify the concerns of all relevant parties and to prepare the proposed guidelines. The Commission has indicated its willingness to continue discussions with the industry in this respect -- an
offer of which the industry should take full advantage. A number of
issues remain open, so the future regulation of the industry under EC
Competition law is not yet certain. ■
74
SUBSCRIBE TODAY!
Don’t miss your next copy of
Yes I would like to subscribe to Ship Management International
Two year subscription £160
Annual subscription £85
Your details
Title
First Name
Surname/Family Name
Business email
Job Title
Address
ZIP/Postcode
Country
Tel
Fax
Payment options
Credit Card
Expiry Date
Cardholder’s Name
/
CVC2 Security code
last 3 digits on the signature strip
Credit Card Number
/
/
/
/
Cardholder’s Signature
Date
/
/
Cheque (Payable to Elaborate Communications Ltd)
Invoice me/ my company (payment terms 30 days)
Signature
Please copy, complete and fax back to:
Or post to:
+44 (0)1296 682156
Elaborate Communications Ltd, 10 Acorn Farm Business Centre, Cublington Road,
Wing, Leighton Buzzard, Bedfordshire LU7 0LB, United Kingdom
Costamare Shipping
FRANKLYSPEAKING
Diamantis N. Manos
Managing Director, Costamare Shipping
How affected are Greek shipowners by the heightened
regulatory environment and what does the industry
need to do to state its case more effectively?
E
stablished in 1974 by Captain Vassilis Constantakopoulos,
Costamare quickly became a significant player in the bulk carrier sector. It was just 10 years later that the company made its
move into the containership sector. It was a pioneering move
for a Greek company at the time but has paid off. For the last 22 years
its ships have serviced virtually all the leading charterers in the market such as APL, China Shipping, COSCO, Hapag-Lloyd, Hyundai
Merchant Marine, Maersk Lines, Mediterranean Shipping Company,
Mitsui OSK Lines, NYK, ZIM etc.).
The 1990s was the decade of development, creativity and recognition for Costamare. In 1994, its ordered its first ships, considered at
the time as among the largest in the container marketís evolution. The
shipbuilding program covered the construction of 24 panamax and
post-panamax containerships. In 2003, a year before celebrating its
30th anniversary, the company ordered five 8,500 teu post-panamax
bottoms which were then jumboised early after the initial order to
accommodate 9500 teus. The vessels will be delivered within the first
semester of 2006.
The current fleet of Costamare and its affiliate companies consists
of 50 cellular container vessels of a total carrying capacity of about
200.000 teus representing about 2.4% of the world carrying capacity in
teus, making Costamare the largest independent container operator
worldwide. All vessels are Greek flagged – a policy that will continue,
the company said. A company spokesman stressed that Costamare's
overriding aim has been to “be proactive in meeting customersí
requirements providing high quality services, while meeting the highest possible standards of safety and maintenance protecting the assets
under its care, its employees and the environment. Costamare considers its welfare and training of all employees, particularly seafarers
manning the vessels, as one of the keys to its success”. In 1998 management of the Company passed to Costis Constantakopoulos, chairman of the company. ■
The current fleet of Costamare and
its affiliate companies represents
about 2.4% of the world carrying
capacity in teus
76
“Shipping is an international industry and as such must be governed by international rules and standards. The adoption of any
other unilateral or regional measures creates confusion and damages the shipping industry and its constructive and important role
in the development of the world economy. Greek shipowners
have no difficulty following the adopted international rules
and standards but they oppose any unilateral, or regional
measures.”
Are Greek owners becoming more open minded to the
benefits of outsourcing services such as shipmanagement?
“Costamare specialises in the container sector and t covers every
aspect in managing its fleet. If we diversify to other types of vessels then we might examine the possibility of using the services
of third party managers.”
The shipmanagement industry is dominated by calls
for greater transparency and greater quality through
comparable key performance indicators. What is your
view on this.
“For a long time now we have used KPIs and as a general remark
consider then as an absolutely necessary tool for the management
of any company. The use of key performance indicators allow
the level of efficiency and quality of work performed to be
judged. The most important thing is the infrastructure on which
the KPIís are based and the organization of the interrelation and
interaction of all the departments so the data collected presents
the real picture of the information the management needs.”
How healthy is Greek shipping at the moment?
“Greek shipping is a dominant worldwide industry covering
more than 16% of the world tonnage. It is very healthy today,
especially after the last two booming years (2004-2005).”
SHIPMANAGEMENT
CREW TRAVEL
Up,upandaway
China’s impact on the global shipping industry is not
lost on the crew travel sector with an anticipated
growth in travel demand forcing many managers
to take more operational control
For many ship operators crew travel is ranked among the top three
expenditures and costs can vary depending on the travelling needs of
seafarers being repatriated and the need for last minute bookings
among senior staff.
But while the demands placed on crew travel specialists by ship
operators would appear to be intense, such demands and the skills
required do not seem to have deterred some shipmanagers from forming their own travel agencies.
Nigel Cleave, group managing director of Dobson Fleet
Management explained that because of the high number of crew
employed by his company and the associated crew travel arrangements required, his company set up their own IATA travel agency
some time ago to handle both group and external travel related business.
“The agency not only provides quick airline access when last
minute change of flights are required, but we have been able to pass
on considerable savings to our ship owners. In addition to specialised
marine travel knowledge, DFM has access to the latest airline computer reservation systems, thereby providing real-time information on
flight routings and seat availability.”
Another shipmanager operating its own travel agent is Hanseatic
Shipping Co which utilises Eurasia Travel Network, a company operated by its the Schulte Group sister company Eurasia. Based in
Cyprus and with branches in all the main shipmanagement areas,
Hanseatic recruits its seafarers from the Philippines, Poland, Cyprus,
UK, north Europe and the Isle of Man.
According to Andreas Droussiotis, Hanseatic chief executive officer, managers need to be able to provide any-time-of-day tickets to its
seafarers to travel on time, especially on urgent matters or emergency
incidents where an officer may be required because of sickness or an
accident. “We also wanted to develop our own network and provide
the service to third parties,” he commented.
Griffin Global Group, a company specialising in this sector, argued
that only those companies totally focusing on crew travel can manage
these issues cost effectively while appreciating the necessary travel
documentation required for seafarers particularly in these times of
security awareness. Marie-Clare Boyes, from the Group’s Greek
office, Griffin Travel Marine SA, said: “Because our staff are marine
78
specialists they are fully aware of visa and immigration issues that
may affect the seafarer not only at the point of destination but also at
possible transit points en route. We aim to provide the seafarer with
the most convenient routing, subject to flight availability, while maintaining cost efficiencies to the owner or manager.”
P&O Marine Travel's general manager, Dennis Woodard agreed
with the important role shipmanagers play in the crew travel sector
but said that the cost issue was important, particularly with the current
level of fuel surcharges being applied by the airlines.
He said the crew travel market is continuing to expand, with a
major factor being the rapidly growing Chinese economy. “China is
importing goods on a grand scale, which is impacting on th demand
for bigger and better ships. We are also seeing passenger vessels
increasing insize, which means more people are being carried and
there is a need for more crews.”
These sentiments are echoed by Griffin. “With a growing number
of new vessels on order, the crew travel market will continue growing,” commented Ms Boyes. She said that the manning markets are
changing, with big growth in Eastern Europe and also in China.
“The Far East has been a very strong area for Griffin during the last
couple of years and the company has been very focussed in providing
additional services to the marine and offshore sectors. To that end we
have invested new resources into Sales and Client Services departments and have already seen growth coming from new clients as well
as those who have been with us for many years.”
One shipmanager with a different perspective is TESMA Holdings,
which does use the services of specialist marine travel providers.
According to the company's director of business development, Per
Seniksen, the willingness to become an extended arm of TESMA's
crew management operations was a key selection factor.
“TESMA requires the marine travel service provider to handle all
communications with family, port agents and airlines and to arrange
all necessary travel documentation such as visas. A network of representation in global shipping centres is essential. But, more importantly is the aspect of having strong contacts who can secure the seats
[tickets] for seafarers in a world of tight availability and capacity at
airlines is critical.” ■
GREECE
FINANCE & BANKING
Seizing
opportunities
with financial liquidity
Recently published research,
shows that banks continue
to trust Greek shipping
especially as their lending
to it has risen yet again
80
S
hipping and ship finance have performed well over the last 12
months measured against the backdrop of record high vessel
freight rates and ship values reached in late 2004 and early
2005 and taking into consideration the inevitable decline that
followed.
Whereas freight rates have since fallen substantially across all shipping sectors and well below half of their recent heights for many vessel types, vessel values have not followed suit and have fallen quite
modestly in comparison. Vessel prices have been resilient as a result
of the still relatively robust freights when set against those of only a
few years ago and have been buoyed by the abundance of investment
funds looking for ‘exciting’ returns compared to other investments.
There is also an expectation, still held strong, of continuous good performance and returns in the light of the massive growth in international trade still being experienced by China and India, as well as the rest
of the world economy. Consequently, the rising supply of shipping
tonnage aided by increasing newbuildings and a lack of scrapping has
been well absorbed by the increase of demand by the world economy
and international trade.
During this period, Greek shipping has performed especially well.
Not only has the average age of the fleet improved from 23 years to
19 years over the last two years as a result of massive newbuilding
orders and young second-hand vessel purchases, but Greek owners
have enjoyed the benefits of high earnings and liquidity on an
unprecedented scale. For those owners highly committed to shipping,
such liquidity has been largely used to modernise and grow their
fleets, aided by an increasing use of the public markets, as well as in
developing sizeable cash hoards for future acquisitions.
Although the pace of newbuildings and sale and purchase of second-hand vessels has slowed down recently, the underlying theme is
still one of positive growth and evolution by Greek shipping aiming
to take advantage of any relative low vessel price opportunities to further grow and improve the quality of their fleets.
Consequently, during the last 12 months there has been no noticeable Greek owner failures or non-performance towards their banks.
On the contrary, banks that were naturally cautious and expected a
massive fall in both vessel prices and freights, witnessed a relative
soft sliding which still keeps their loan portfolios healthy and performing. In addition, banks looking for lending opportunities among
the larger and financially stronger owners have been aggressively
competing for quality business by slashing spreads and fees and creating an ‘owners’ market.
Although cautiousness is still the order of the day, invariably all
banks are confident about Greek shipping and its ability to withstand
FINANCE & BANKING
GREECE
Graph 1
Total Bank Portfolios
available to Greek shipping
Growth since 2001
US$m
In the graph, left (Graph 1) we note the evolution of Greek ship
finance since 2001.
40000
35000
30000
25000
20000
15000
10000
5000
0
Dec 01
Dec 02
Dec 03
Dec 04
Dec 05
We note that the previous years’ rises were more of a ‘leaps and
bounds’ nature, whereas the ‘as of end 2005’ figure shows a softer
rise. This trend is in line with what has been happening to shipping.
Last year’s impressive 26.61% increase was, of course, due to the
remarkable strengthening of freight rates and tremendous demand for
vessels that drove their prices to all-time historical heights. This
unavoidably reflected in the volumes of the shipfinance, as the average loan increased accordingly, whereas the percentage of finance
remained largely the same, averaging 65-70%.
For the purpose of analysis, we have divided banks into Greek
banks, international banks with a Greek presence and international
banks without a Greek presence.
Since 2001, all 3 categories of banks show a 21.6% steady average
annual growth in Greek shiplending.
Source : Petrofin Bank Research ©April 2006
lower freights, should they occur. Moreover, banks
understand that Greek owners are looking to extend
further and to seize any relative opportunities based on
their good liquidity as well as the relatively low leverage of their fleets against what is still a robust net
income stream of earnings from their fleet utilisation.
Although the industry is experiencing record high
oil prices, geopolitical conflict fears, as well as a possible slow down in the rate of growth in Chinese
demand (and increasing interest rates are also of concern), owners and banks remain confident of the future
and in their belief of continuous good performance by
the shipping industry.
Greek shipping is of course at the fore in this confidence and continues to perform very well. As a result,
Greek shipfinance reflects this and Petrofin-BankResearch©, published this April, shows that banks continue to trust Greek shipping especially as their lending
to it has risen yet again.
In the past four years we have witnessed a steady
growth in banks’ ship lending portfolios to the Greek
market. Following the trend, this year also shows consistent growth. The overall portfolio has risen from
$32.353bn to an impressive $36.112bn. This represents a growth of 11.62%. ➩
In the table below (Table 1) we observe the overall growth in Greek shiplending:
Table 1
Overall Growth in Greek Shiplending
Overall Greek
shiplending
portfolio
in US$ billions as of
31st December 2005
Percentage
of growth
Percentage
of growth
Average yearly
growth
between December 2001
and 2005
over the last 12 months
between December 2004
and December 2005
since 2001
Int. Banks With
a Greek presence
19.540
177.16%
40.2%
29.03%
Int. Banks Without
a Greek presence
10.049
63%
-16.74%
12.99%
6.523
97%
2.82%
18.48%
36.112
118.53%
11.62%
21.58%
Greek Banks
Totals (Rounded)
81
GREECE
FINANCE & BANKING
The International Banks with a Greek
presence are the banks that collectively
top the list in Greek shipfinance. As of
end 2005, they committed US$19.54bn
to the sector as opposed to US$13.94bn
the year before
It is important to note that the reduction in the exposure of the
International Banks without a Greek presence (-16.7%) is due mainly
to the shift, this year, of Deutsche Schiffsbank (current portfolio
US$3.4bn) to the International Banks with a Greek presence, as well
as to the merger of the Vereins und Westbank with HVB, which has
been in the list of banks with Greek presence for a number of years.
Hence, also, the tremendous growth of the banks with a presence in
Greece. Had Deutsche Schiffsbank remained in its previous sub-category, then the percentage growth from 2004 to 2005 would have
been +11.4%!
The International Banks with a Greek presence are the banks that
collectively top the list in Greek shipfinance. As of end 2005, they
committed to the sector US$19.54bn as opposed to US$13.94bn the
year before, in an increase of portfolio of 40%. The Royal Bank of
Scotland heads the group, as well as coming first overall, with their,
by far the largest, portfolio of US$8.099bn. RBS remains for yet
another year the biggest lender to Greek shipping with an average
annual percentage growth of 32.85%. For the first time, the second
position is held by HSH-Nordbank (banks without a Greek presence)
with a US$3.47bn portfolio, a rise of 22.28% from the year before.
This is how the top 30 banks fared as of end 2005:
Table 2
Top 30 banks holding Greek shipping portfolios
as of 31st December 2005
Rank Bank position
2005
Portfolio
Av. annual
growth
Bank position
2004
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
8099
3468
3400
1850
1500
1480
1170
1140
1070
1067
1015
1000
1000
938
897
700
641
608
602
526
504
476
457
448
401
266
226
185
175
150
32.85%
22,28%
9,68%
15,63%
not available
9,63%
11,43%
-18.57%
21,59%
27,78%
-16.8%
33,33%
22,7%
7,82%
3,46%
27,27%
-10.26%
14,29%
6,05%
44,9%
61,66%
28,07%
3,02%
-5.38%
0,12%
24,88%
88,33%
351,22%
-12.5%
not available
Royal Bank of Scotland
Deutsche Schiffsbank
HSH Nordbank
Credit Suisse*
Calyon*
National Bank of Greece
Alpha Bank
Citibank
HSBC
DVB Nedship
Emporiki Bank
Piraeus
DNB
HVB
ABN
KFW
EFG Eurobank
Fortis Bank
Commerzbank
Bremer Landesbank
First Business Bank
BNP PARIBAS
Laiki Bank
Nordea
Bank of Scotland
Vereins und Westbank
Egnatia
Dresdner bank*
Nord LB
Bank of Ireland
Royal Bank of Scotland
HSH-Nordbank
Credit Suisse*
Calyon*
Alpha Bank
HSBC
DVB Nedship
DNB
Citibank
ABN
HVB
Emporiki Bank
Piraeus
Fortis Bank
KFW
Commerzbank
EFG Eurobank
Nordea
Bank of Scotland
Laiki Bank
First Business Bank
Bremer Landesbank
BNP Paribas
Egnatia
Nord LB
Natexis
Dresdner*
Kexim*
* Market estimates
82
The recognised home of Piraeus' shipowners
It is evident that Greek shiplending has been going from strength to
strength. Irrespective of the number of banks that have entered or left
the sector, the overall picture of the last five years is one of continuous commitment and growth. Here, we should also note that up to
rank 13 all these banks have reached and exceeded the $1bn mark,
whereas in the previous year only nine banks had achieved this.
The total number of banks involved in Greek shiplending is 40, as
of 31st December 2005. This is reduced down from 50, primarily due
to mergers as well as some withdrawals from the Greek market by
banks without a core emphasis in shiplending. ➩
In terms of nationality, and compared to the two previous years, they
are as follows:
Table 3
Number and nationality of Banks
engaged in Greek Shipfinance
Nationality
UK & Ireland
France / Belgium
Scandinavia
Germany
Holland
Greece
Other European
Total European
North America
Far East and others
Grand Total
End 2003
End 2004
End 2005
5
8
2
10
5
15
4
49
4
1
54
5
6
2
10
5
14
4
46
3
1
50
4
3
2
9
4
14
2
38
1
1
40
Irrespective of the number of banks
that have entered or left the sector, the
overall picture of the last five years is
one of continuous commitment
and growth
FINANCE & BANKING
GREECE
Graph 2
Graph 3
International Banks with a Greek presence
International Banks without a Greek presence
Greek shipping portfolios as of 31.12.05
11 Banks - Total portfolio: $19.54bn
RBS
$8099
$3400
Calyon*
$1500*
HSBC
$1170
DVB Nedship
$1070
Citibank
$1015
ABN
$1000
HVB
$1000
Fortis
$700
BNP Paribas
$401
Natexis
$185
0
2000
Loans drawn in
4000
Total exposure to bank
6000
8000
HSH Nordbank
Credit Suisse*
DNB
KFW
Commerzbank
Nordea
Bank of Scotland
Bremer Landesbank
Nord LB
Dresdner*
Kexim*
Bank or Ireland
ING
DB/SHL Shipping
Corner*
10000
$3468
$1850*
$1067
$641
$608
$526
$504
$448
$226
$175*
$150*
$140
$115
$80
£50
0
500
1000
1500
2000
2500
3000
3500
Loans commited but not yet drawn
* Based on market estimates • Where figures were supplied in euros: Eur = $1.2
Loans drawn in
It is important to observe that in this market of huge volumes and huge numbers,
Greek banks retained their competitiveness and are competing for Greek
business on an equal footing with other international banks
Also, the reduction in the number of banks is also due to unwinding portfolios coming to an end by those who were intent in leaving
the sector anyway.
Examining the situation more closely, Graph 2 shows that the number of non-Greek banks with a physical Greek presence (11) has gone
up by 2 compared to last year. In actual fact, these banks have shown
consistent growth throughout the last 5 years.
Once again, this is the leading group of banks commanding a total
portfolio of $19.540.5bn. Deutsche Schiffsbank is the prime contributor to this impressive increase of 40.19% by bringing in a portfolio
of $3.4bn.
In Graph 3 we observe that the sector of international banks without a Greek presence shows a decrease in numbers from 27 banks to
15. This decrease is accompanied by a decrease in portfolio for the
first time in five years from $12,070.13m in 2004 to $10,049m in
2005, i.e. a -16.74% reduction. It should be noted that with the exception of three banks, the rest in this sub-category have shown a steady
growth. Despite the decrease, international banks that are not represented in Greece are showing an ever-growing interest in the Greek
shipping market and the fact that local partnerships and local representative offices are opened, shows just that.
In terms of Greek banks (Graph 4), their number has remained stable at 14. Their portfolio marked an increase by 2.82% from $6.344bn
to $6.523bn.
Greek bank exposure has been steadily increasing since December
2001, when our research was first published. Since then, the funds
available to Greek shipping have risen by 97% (Table 1).
It is important to observe that in this market of huge volumes and
huge numbers, Greek banks retained their competitiveness and are
competing for Greek business on an equal footing with other ➩
85
FINANCE & BANKING
GREECE
Graph 4
Greek Banks
Although the market has
shown some signs of
correction, nothing too
dramatic happened during
2005. The big question of
whether a slump would
follow the recent boom is
still unanswered
Alpha Bank
Emporiki Bank of Greece
Piraeus Bank
EFG Eurobank
Laiki Bank
First Business Bank
Egnatia Bank
Aegean Bank
Omega Bank
Bank of Cyprus
Aspis Bank
Agricultural Bank of Greece*
Marfin Bank
(as investment bankers)
international banks. Overall, a good pace of growth was maintained
yet again last year.
As newbuildings are being delivered or their finance is secured,
shipfinance volumes have also risen. Although, the observed softening of freight rates has had an impact on the growth volume of Greek
shipfinance, banks continue to trust Greek shipping and this is the
major trend that has emerged from our study.
My belief is that there will be a further slowdown in the rate of
growth of Greek shipfinance, but it will still be in the positive. The
effect on Greek shipping of such behaviour by the banks is supportive, since banks have become experienced in the volatile sector of
shipping and as well as safeguarding their interests, they have also
emerged as great supporters of the industry.
Although the market has shown some signs of correction, nothing
too dramatic happened during 2005. The big question of whether a
slump would follow the recent boom is still unanswered. The
‘China’, and increasingly the ‘India’, factors are still extensively discussed and are generally accepted as the major driving force behind
today’s market. China’s annual growth continues, its demand in
resources and its rising exports worldwide are keeping transportation
$1480
$1140
$938
$897
$601
$476
$457
$266
$107
$60
$40
$31
$28*
0
300
Loans drawn in
600
900
1200
1500
My belief is that there will be a further
slowdown in the rate of growth of
Greek shipfinance, but it will still
be in the positive
in full steam. However, newbuilding deliveries have also risen substantially across all sectors. Hence, it is a tug-of-war between increasing demand and increasing supply.
Greek Shipfinance has attracted the attention of the international
business community for its returns and steady growth in the last years.
The banks are also comforted by the good quality of their loan portfolios and the near zero record of bad loans for yet another year.
Consequently, most banks anticipate an unspectacular 2006 and a
further year of relatively good performance. ■
By Ted Petropoulos, Petrofin S.A.
87
LIFESTYLE
V8 VANTAGE
FIRST shown as a concept car at the 2003
North American International Auto Show in
Detroit, but with deliveries to customers
not starting until late 2005, the Vantage
immediately caused a worldwide sensation
as it allowed Aston Martin to enter a new
sector of the premium sports car market
88
V8 VANTAGE
C
ompleting the current Aston Martin line-up by joining the
flagship Vanquish S and the elegant DB9, the V8 Vantage
was the culmination of the first phase of reinvigorating the
Aston Martin brand around the world that began in the year
2000.
“The Vantage is a significant car for us,” explained Dr Ulrich Bez,
Chairman and CEO of Aston Martin. “The Vantage is a true Aston
Martin, built with the same high integrity and passion as all of our
cars. This is the more affordable Aston Martin and its design and agility should help to widen our appeal, taking us into a new sector of the
market and attracting younger customers to our marque. The V8
Vantage has all of the hand-built bespoke attributes for which Aston
Martin is renowned.”
The exterior of the Vantage is perfectly proportioned from every
angle with a low, purposeful stance. A truly beautiful car, it is also carefully detailed and painstakingly assembled, displaying the design
integrity and quality synonymous with the Aston Martin marque.
“The Vantage features many of the design cues that have become
basic DNA for all Aston Martin models and are leading edge in car
design,” added Dr Bez.
The long bonnet and two-seater cabin create the instantly recognisable Aston Martin stance, poised and aggressive yet undeniably elegant. Minimal front and rear overhangs are combined with a wide
track to enhance the sculptural qualities of the bodywork. At the rear
a hatchback offers access to a large luggage shelf.
“It was important to ensure that the design was pure, clean and
innovative, while at the same time you should be able to cover the
front nose badge and instantly recognise the Vantage as an Aston
Martin,” said Dr Bez.
Inside, Aston Martin’s design integrity is matched to striking 21st
century style. The dials are made from aluminium, and together with
the switchgear have a very distinct design and unique Aston Martin
look and feel.
The look, feel and functionality of the interior was a key priority,
ensuring the Vantage reflected the new direction that the company is
taking.
Aston Martin believes the ambience of the cabin is extremely
important, with materials treated respectfully and functionally; wood
and aluminium are real, never fake, while there are signature touches
like the glass starter button.
The leather for the seats are taken from a total of seven hides and
will age with the car. Aston Martin has yet to really gauge the effect
LIFESTYLE
High speed testing
was conducted at the
Nardo test track in Italy and
extensive trials were carried
out at Nurburgring’s
Nordschleife in Germany
long-term ageing will have on the model but is confident it will
enhance the look of the vehicle in years to come.
It takes up to 200 man hours to hand build the V8 Vantage and waiting lists worldwide are currently standing at 18 months because all
models are built precisely to order. That means you can not only
choose your body colour from over 200 colour palettes or suggest
your own favourite (Aston Martin will advise on what colours
enhance resale values), but you can choose the entire look of the interior all the way down to the stitching on the seats and the colour of the
seatbelt. Interestingly, you can even choose the colour of the brake
calliper which is visible through the wheel hubs.
Chassis, Engine and Performance
The Vantage has endured the most extensive test and development
programme in the company’s 92-year history.
Seventy-eight prototypes were vigorously tested over more than 1.5
million miles, including over 12,000 miles in the scorching deserts of
Dubai, where ambient temperatures hit 48ºc and the bodywork of the
cars reached 87ºc. At the other extreme, cold weather testing was
undertaken in Sweden, with temperatures as low as -30ºc.
High speed testing was conducted at the Nardo test track in Italy
and extensive trials were carried out at Nurburgring’s Nordschleife in
Germany.
The V8 Vantage is the second model to use Aston Martin’s unique
VH (Vertical Horizontal) architecture. Constructed at Gaydon in
Warwickshire, England from lightweight aluminium extrusions, precision castings and pressings, the underframe is bonded with aerospace adhesives and mechanically fixed with self-piercing rivets.
The complex die-cast components are combined with door inner
panels of cast magnesium, with a windscreen surround made form ➩
89
The V8 Vantage's elegant lines are formed from
a combination of aluminium, steel and advanced
composite exterior panels. Composites are used
for panels with a high degree of complexity and
a deeper shape, such as the front wings, which
incorporate the distinctive side strakes
V8 VANTAGE
a single aluminium casting. The entire frame is bonded with a cold-cure
adhesive with exceptional damping properties. This helps soak up the
vibrations which may otherwise appear if the structure was welded.
The unique VH architecture provides an excellent structural backbone, while the use of sophisticated materials such as lightweight
alloys, magnesium and advanced composites for the body further contributes to the car’s low weight and class-leading rigidity.
The V8 Vantage's elegant lines are formed from a combination of
aluminium, steel and advanced composite exterior panels. Composites
are used for panels with a high degree of complexity and a deeper
shape, such as the front wings, which incorporate the distinctive side
strakes.
Aston Martin’s engineers worked with Ford Research and
Nottingham University to develop RTM (Resin Transfer Moulding)
composite panels, using unique processes and materials, resulting in
lightweight panels with an extremely high surface finish. The process
ensures that the optimum amount of reinforcement material is used in
each area of the panel to ensure optimum strength and weight.
Steel pressings are used for the body side panels to achieve the sheer
depth of the design. This delivers the required style without resorting to
using several panels in the rear three-quarter area, resulting in a remarkably clean and uncluttered appearance.
A Pure Sports Car
The Vantage is very much a pure sports car, so from the outset, the priority of Aston Martin’s engineers was to focus on lightness, agility and
power. The car is compact and nimble and at just 4.38 metres long it is
the smallest model in the Aston Martin range.
The new 380 bhp engine is a 4.3 litre, low emission, all aluminium
alloy V8, unique to Aston Martin. This new V8 engine uses the latest
technology to deliver outstanding performance in all environments.
The layout of the powertrain adopts a transaxle configuration, whereby the front mid-mounted engine is connected to the transmission - at
the rear of the car - via a cast aluminium torque tube and carbon fibre
prop-shaft. This configuration gives the car a 49:51 weight distribution,
providing outstanding handling characteristics and excellent all round
capabilities.
Aston Martin has adopted a dry-sump lubrication system for the
Vantage. Often used in racing cars, this system allows the engine to sit
very low within the body, lowering the centre of gravity and improving
handling and the overall balance and stability of the car. The system
also helps to improve engine durability by maintaining lubrication
under conditions of extreme cornering and braking.
The advanced quad-cam 32-valve engine is individually hand assembled by skilled Aston Martin technicians at the company’s new engine
LIFESTYLE
production facility in Cologne, Germany, where every Aston Martin
engine, including the V12 for Vanquish S and DB9, is built.
The bore and stroke dimensions are optimised to provide an excellent balance between outright power and torque, while a resonance
induction system improves tractability and performance. The inlet
camshaft timing is variable resulting in improved low-end throttle
response, mid-range torque and seamless power delivery. Maximum
power is 380bhp @ 7000rpm and maximum torque 302 lb ft @
5000rpm.
The Vantage is offered with a new 6-speed manual transmission. The
smooth and fast shift action ensures the ultra close ratios can be used to
maximum effect.
By the end of this year Aston Martin will have a total network of over
140 dealers worldwide. According to the company, the US currently
accounts for 35% of overall sales with Europe and the UK coming next
with 30% each and the remainder spread in other areas.
“It is difficult to typify the classic V8 Vantage customer but with the
lower price bracket of £79,995 the car is up against the Porsche 911
Carrera S. If we got 3% of this market it would be more than enough.
And it is a growing market,” the company added. ■
Aston Martin V8 Vantage Specification
ENGINE
All alloy quad overhead camshaft 32 valve, 4.3 litre V8.
Variable Inlet Camshaft Timing. Dry sump lubrication
system. Fully catalysed stainless steel exhaust system
with active bypass valves. Front-mid mounted engine.
Rear wheel drive
Maximum Power
283kW (380 bhp) @ 7000 rpm
Maximum Torque
410 Nm (302 Ib.ft) @ 5000 rpm
Maximum Speed
280 km/h (175 mph)
Acceleration
0-100 km/h (62 mph) in 5.0 seconds
0-60 mph in 4.8 seconds
Fuel capacity
77 litres (16.8 UK Gal / 20.2 US Gal)
Kerb Weight
1570kgs (3461 Ib)
Boot capacity
300 litres (10.6 cu.ft)
91

EMSA pollution call - Ship Management International

Transcription

Similar documents

California based merchants with consistent 4.9 shipping DSRs

papa-johns-gift-card-form copy

How To Complete This Form Printed Apparel for Work

u.s.s. PIEDMONT AD-17 At that time, if I amnot mistaken, the ship

layout 1 - All Celebrity Travel

cesma news

December - Model Ship Builder

Aldo Grimaldi aplauded for Italian shipping contribution