Home PageServicesClientsNewsContact Us

Thursday, 27 January 2011

Wizards start socialising

Who would have thought it? Two old boys in cardigans shuffling around in British seaside towns have cottoned on to the commercial advantages of social networking for shipping.

It would be fair to say that, until recently, we felt that social network sites seemed like good things to avoid. We didn’t want our own Nutter page. We felt we had done our bit for technology by connecting the office to electricity. But Merlin now has its own Facebook and Twitter sites, and you can follow us on the RSS feed.

If you have no idea what we are talking about, don’t worry, especially not all the time. But have a look at our sites anyway, and see what we’re up to. And stay in touch.

You can find us at:


Labels: , ,

What is it about Hamburg?

An old friend of mine has a habit of going into pubs and asking for “one of what The Beatles drank in Hamburg”. Once in a blue moon, he ends up with what he wants – a bacardi and coke.
Apart from being home to The Beatles for a few months in the Sixties, Hamburg is of course a great shipping city and port. But its name does not always have happy connotations in the maritime world. The Hamburg Floods were bad. In the Seventies, they provided marine cargo insurance underwriters with a way to lose lots of money when they had despaired of finding a new sink hole for their cash.

The Hamburg Rules were bad. They were supposed to be the new Hague-Visby Rules but instead turned out to be a partisan regulatory farrago and a largely neglected stepping-stone on the road to the Rotterdam Rules, which are only slightly more popular.

At least the Hamburg Ship Evaluation Standard is dividing opinion within the industry. It is both good and bad. But if it is agreed that using long-term charter rates to arrive at ship valuations is a good idea, then at least give the thing a chance by giving it a proper name. The Ship Evaluation Standard has such an authoritative ring.


Labels: , ,

Wednesday, 26 January 2011

Moore Stephens says capital allowance changes could represent tax blow for shipowners

Leading accountant and shipping industry adviser Moore Stephens has warned that the tax advantages available in respect of capital expenditure on ships may be greatly reduced following changes to the UK capital allowance regime which came into effect on 1 January 2011.

Ships have traditionally enjoyed significant tax advantages over other types of assets. Prior to 1 January 2011, ships outside tonnage tax were specifically excluded from the long-life asset regime, and the normal rate of writing-down allowances therefore applied. But, following changes to the capital allowance rules, expenditure on ships incurred on or after 1 January 2011 is no longer excluded from the regime, under which the writing-down allowances are considerably lower than those for other assets. Ships acquired prior to 1 January 2011 will continue to be excluded from the long-life asset rules.

The writing-down allowance available on ships outside the long-life asset regime is 20 per cent per annum up to 1 April 2012, and 18 per cent thereafter, on a reducing balance basis. The comparable allowances for long-life assets, meanwhile, are 10 per cent and 8 per cent per annum.

An asset may be regarded as long-life if it is reasonable to expect that it will have a useful economic life of at least 25 years when it is new. Sue Bill, a tax partner with Moore Stephens, says, “Some ships may reasonably be expected to have a useful life of at least 25 years when they are new, and may therefore be regarded as long-life assets. But this will depend on the type of vessel involved.

“Broadly speaking, the date when expenditure is regarded as having been incurred for capital allowance purposes is the date when there is an unconditional obligation to pay. In the case of a shipbuilding contract, although the obligation to pay for that part of the asset that has been completed becomes unconditional when the work is certified, there are exceptions to the general rules.

“The date when expenditure is regarded as having been incurred will also depend on whether or not the company incurring the expenditure is already carrying on an existing trade as a shipowner or operator. Where a company is not yet trading, expenditure is regarded as having been incurred for capital allowance purposes on the date the company starts to trade. This will usually be the date when the ship is delivered. Where the exact date is important, specific advice should be obtained.

“Companies which incur expenditure on ships after 1 January 2011 will now have to consider whether the ships may reasonably be expected to have a useful life of at least 25 years when new when claiming capital allowances. It is likely to be beneficial if this is not the case.”

Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 630 offices of independent member firms in 98 countries, employing 20,864 people and generating revenues in 2009 of $2,078 million. www.moorestephens.co.uk
For more information:
Sue Bill,
Moore Stephens LLP
Tel: +44 (0)20 7334 9191
email: sue.bill@moorestephens.com

Labels: , , ,

Schat-Harding calls for consensus on lifeboat hooks

Leading lifeboat manufacturer and service provider Schat-Harding says IMO and some parts of the shipping industry need to move more quickly to a consensus on vital lifeboat safety issues which have important consequences for the safety of seafarers.

David Bradley, vice president operations, Schat-Harding Service says, “Good things are worth waiting for. But there is such a thing as waiting too long. The IMO debate over lifeboat hooks has gone on for too long. Seafarers deserve better. They deserve clear standards for lifeboat hooks and a clear timetable for replacing those which don’t meet the new standards. That will ensure their safety and renew their confidence in their boats. A lack of agreement at IMO by some industry bodies and flag states has pushed back consensus on this vital topic, and it could be two years or more before we have a properly agreed amendment to SOLAS for lifeboat hooks.”

According to Bradley there is a broad consensus that the current standards set by IMO for on-load release hooks have failed seafarers. “It is time for a new generation of hooks, and the fact is that hooks are available which meet all the proposed regulatory requirements,” says Bradley. “But shipyards won’t specify them and owners will not rush to replace existing hooks while they still meet regulations, despite the well-known risks to seafarers. Draft guidelines to ensure that on-load release mechanisms for lifeboats are replaced by those complying with new, stricter safety standards under SOLAS were discussed in February 2010 by the IMO Sub-Committee on Ship Design and Equipment (DE 53). But no agreement was reached. Similarly, no consensus was achieved at the 87th session of the Maritime Safety Committee in May 2010. There are good draft standards on the table but no consensus to turn them into regulations and the issue has again been referred back for further work to the IMO subcommittee on ship design and equipment. This will take place in March this year, and the findings taken in May 2011 to the 89th session of the MSC. That is unlikely to be the end of the story unless we see a move towards consensus by all parties. We hope that following the MSC 89 meeting in May we will have guidelines in place which will provide some clarity and consistency going forward. And we hope that the date now set as a target for introducing new SOLAS standards, 1st July, 2014, can be brought forward in the interests of safety.”

Schat-Harding’s new range of SeaCure on-load release hooks are the safest product of their kind on the market and are fully compliant with all proposed revisions to SOLAS. But too many seafarers will be denied the safer hook until agreement is reached at IMO.

“Safety-conscious owners are re-hooking their boats now and getting ahead of the game, and so are cost-conscious owners who do not want to be caught in a regulation-driven rush to rehook,” says Bradley “Shipowners have already turned to Schat-Harding to retrofit over 130 new hook sets in the last six months. Whatever the delays at IMO, Schat-Harding is there alongside owners and seafarers, helping them to meet and exceed industry safety standards at all times. But we are just one manufacturer and the shipping industry as a whole needs a consensus to put seafarers’ safety first and get new standards in place.”

To download a hi res strong photo of the SeaCure being installed click on:


or e mail john@merlinco.com

Schat-Harding is the world’s leading supplier of lifeboat and evacuation systems for the offshore, cruise and shipping industries. With factories and offices in Norway, the UK, the Netherlands, Germany, Italy, Panama, Singapore, Spain, Canada, the Czech Republic, the USA and China, and agents or service partners in thirty other countries, Schat-Harding provides a global service and supply network. Brands now owned by Schat-Harding include Watercraft, Viking Marine, Waterman, Fiskars, Davit-Company, MASECO, Watercraft America, William Mills Marine, Schat, Harding, Mulder & Rijke and the Beiyang Boatbuilding Co. www.schat-harding.com

For more information:

David Bradley
VP Operations
USH Service
+44 (0) 2392 581331

Jennifer Manning
Marketing Manager
USH Service
+47 45 86 74 47

Labels: , ,

Thursday, 20 January 2011

RINA strengthens UK yacht expertise

International classification society RINA has responded to increasing demand for superyachts in the UK and Northern Europe by opening a new plan approval and technical office in the UK specifically to support superyacht designers, naval architects and shipyards.

Paolo Moretti, Yachting Business Manager, RINA, says, “Even during the crisis we have seen strong UK-based yacht builders such as Sunseeker and Princess growing, and they are both investing more and more into the larger sizes of yachts. They choose RINA to class those yachts, and we see growing demand for advice, consultancy, pre-assessment and direct liaison over plan approval for superyachts. That is why we have put two very experienced yacht engineers into a new UK yacht plan approval office. They will be able to help designers and yards cope with the requirements of the new MCA Passenger Yacht Code and the upcoming requirements of ILO MLC2006.”

The new UK yacht plan approval office is currently working from RINA’s Portsmouth office but will move into dedicated premises in Southampton from January 2011. “The staff in the new office will have experience in yacht building yards and production and class requirements. They will be close to the superyacht sector in the UK, and also be well positioned to help designers and yards in Germany, the Netherlands and Scandinavia,” says Moretti.

RINA is one of the oldest classification societies and certification companies in the world. Established in Genoa in 1861 to serve the marine industry, today it spans the globe as a multinational and multi-faceted company, sharing its knowledge and experience through a wide range of services which help industries and the community to improve their businesses and quality of life. RINA’s services cover the environment, energy, transportation, logistics, safety, quality and social responsibility. www.rina.org

For more information:
Claudia Filippone
Press Co-ordinator
+39 010 538 5643

Labels: , ,

Bureau Veritas issues Rules for Offshore Floating Gas Units

LEADING international classification society Bureau Veritas has issued Rules for the classification of Offshore Floating Gas Units. The Rules cover structure design principles, hydrodynamic analysis, design loads, hull girder strength, hull scantlings, local structural improvements, the cargo containment system, stability and subdivision, arrangements, access, ventilation and venting of spaces in the cargo area, equipment and safety particulars, topsides systems, transfer systems, piping systems, use of cargo as fuel, electrical installations and swivels and risers.

Catalin Toderan, project manager offshore structure, Bureau Veritas, says, “We are busy with a number of floating LNG projects, both for production and reception, and we see a need for clarity on the standards which apply and the interface between independent verification of process plant and the classification of floating structures. Very often floating gas units cross regulatory boundaries. They are using new technologies, but are also often using existing technologies brought together in new ways. Our experience with floating offshore structures is massive, and we have always been a world leader in the transport of LNG and LPG by sea. We are able to bring those two areas of experience together and marry them up with a high technology approach and a sound understanding of how inspection, rules and classification help to ensure the safety and viability of projects. These new Rules help others to share that experience. We will shortly provide guidelines on risk-based classification and verification which will help extend the ways in which our experience can be used to facilitate new floating LNG projects.”

For a copy of the Rule Note NI 542 e mail john@merlinco.com
Bureau Veritas is a leading international service provider, dedicated to quality assurance, environmental, health, and safety, (QEHS) management services across a wide range of economic activities, including marine, industry and facilities, government services, and consumer products. By far the largest classification and certification society, Bureau Veritas has over 48,000 employees and 900 offices in over 140 countries throughout the world. www.bureauveritas.com for corporate information, www.veristar.com for marine information.

For more information:
Philippe Boisson
Bureau Veritas
+33 1 55 24 71 98

Catalin Toderan
Project Manager Offshore Structure
Bureau Veritas
+33 1 55 24 74 87

Labels: , ,

Bureau Veritas issues guidance for Floating Offshore Wind Turbines

LEADING international classification society Bureau Veritas has issued guidelines for the Classification and Certification of Floating Offshore Wind Turbines. The guidelines specify the environmental conditions under which floating offshore wind turbines may serve, the principles of structural design, load cases for the platform and mooring system, stability and the structural division and design criteria for the top structure. The Guidance Note NI 572 covers floating platforms supporting single- or multiple-turbines with horizontal or vertical axes.

Maxime Pachot, Offshore Wind Turbine Manager, Bureau Veritas, says, “There is growing demand for offshore wind turbines which can be safely installed in very deep water locations. They will use one or more types of floating platform to mount the turbine and may need a service life equivalent to offshore oil and gas projects. Both operators and authorities need to know these platforms are safe and will be up to the job. Although this is a new way of generating energy out at sea, it builds on proven technology and experience in offshore energy. These guidelines bring together Bureau Veritas’ experience with and rules for offshore floating units and moorings and marries them with the internationally accepted standards for wind turbines set out in IEC 61400-3: Wind turbines - Design requirements for offshore wind turbines. They will help field developers choose the right system and the right pathway for approval to meet local and international regulations and their own industrial requirements.”

Three categories of floating platforms are covered: Ballast floating platforms that achieve stability by using ballast weights placed below a global buoyancy centre; Tension Leg Platforms (TLP), that achieve stability through the use of tendons; and Buoyancy floating platforms, that achieve stability by the use of distributed buoyancy.

The top structure with the rotor-nacelle and tower will be certified in accordance with International Standard IEC 61400-3 and/or national regulations. The floating platform on which the generating assembly is mounted will be classified by Bureau Veritas under its Rules for the Classification of Offshore Units (Offshore Rules), which also extend to cover the mooring system.

In addition to classification and certification of offshore wind projects, Bureau Veritas is able to provide extensive expertise in site analysis, meteo-ocean studies, hydrodynamic simulation and fatigue life planning and on-site inspection and maintenance.

Bureau Veritas is the only classification society partner in the EU HiPRWIND project which brings together 19 companies with the aim of developing enabling technology elements for deep-water offshore wind. It is also involved in certifying wind projects in a number of countries globally and has an extensive wind R&D programme.

For a copy of the Guidance Note NI 572 e mail john@merlinco.com

Bureau Veritas is a leading international service provider, dedicated to quality assurance, environmental, health, and safety, (QEHS) management services across a wide range of economic activities, including marine, industry and facilities, government services, and consumer products. By far the largest classification and certification society, Bureau Veritas has over 48,000 employees and 900 offices in over 140 countries throughout the world. www.bureauveritas.com for corporate information, www.veristar.com for marine information.

For more information:
Philippe Boisson
Bureau Veritas
+33 1 55 24 71 98


Maxime Pachot
Offshore Wind Turbine Manager
Bureau Veritas
+33 1 55 24 74 29

Labels: , ,

ITIC warns on pitfalls of Master Service Agreements

INTERNATIONAL Transport Intermediaries Club (ITIC) has warned its members about the potential pitfalls associated with entering into Master Service Agreements with their clients.

A Master Service Agreement (MSA) is frequently used when two companies engage in a long-term relationship involving a number of projects. The MSA will usually provide general terms covering the contractual relationship between the parties. There may also be separate agreements and negotiating provisions covering individual projects involving the same clients and, in the event of there being a clash between such agreements and the MSA, it is usual for the MSA to take precedence unless specifically agreed otherwise.

ITIC cites a recent case where a US subsidiary of a UK company, as a contractor, signed an MSA with a US-based client which bound the contractor, including all its ‘subsidiary and affiliated companies’. This meant that all the contractor’s offices worldwide, including the UK head office and all subsidiary and affiliated companies, were bound by the terms agreed in the MSA. These included provision for US jurisdiction and unlimited liability, and stipulated that the terms of the MSA would take precedence over any subsequent verbal or written work orders.

The claim involved an overseas affiliated company of the contractor entering into a specific transaction with the client. The overseas affiliate had no knowledge of the MSA and provided a quotation which, it thought, was subject to its own standard trading conditions. These trading conditions limited its liability to $1 million and provided that any dispute would be subject to English law. However, when a dispute arose, the MSA’s existence was revealed, whereupon the overseas affiliate found itself named as a defendant in US proceedings in which the client was claiming more than $45 million.

The overseas affiliate had never seen the MSA and did not know of its existence. In fact, the MSA had been put in place before the affiliate had even been incorporated. Furthermore, the US subsidiary which signed the MSA was also surprised to be named in the claim, as this was the first it knew about the job that was undertaken for the client by the overseas affiliate. The final claim was settled well below the claimed amount, but for a sum well in excess of the $1 million limit of liability which the company had originally thought was in place.

ITIC has warned its clients that MSAs must be read carefully prior to signing, and a full understanding established of which companies in the group are potentially bound by its terms and conditions. It points out that such agreements do not have to be signed by the parent company or head office in order for them to be binding on all offices, subsidiaries and affiliated companies within a group, and adds that signing them without first carefully studying their terms and conditions may unwittingly bind an entire organisation to the MSA.

Noting that other companies will probably be unfamiliar with its clients’ corporate structure and therefore entitled to rely on the apparent authority of the office or company which has signed the agreement, ITIC emphasises, “Once you have signed such an agreement it is imperative that all those bound by it are notified and made aware of its terms so that they can act accordingly”.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com
For more information:
Charlotte Kirk
Tel. +44 (0)20 7338 0150

Labels: , ,

Lintec management changes ensure continuity for further expansion

LEADING fuel testing agency Lintec Testing Services Ltd has appointed Geoff Jones as Global Fuels Director following the most successful twelve months in the company’s history. Jones will assume his new role on April 1 with Steve Bee succeeding Geoff Jones as General Manager. Tracy Wardell, an experienced technical manager in the global oil testing industry, has also joined Lintec’s management team as Operations & Key Accounts Manager, the role formerly held by Bee.

Geoff Jones says, “Steve Bee’s appointment is designed to help position Lintec for further successful development on an international scale and will allow me to focus on growing Lintec’s global footprint. It is good news for everybody, and particularly for our customers, because it provides the continuity which is essential for growth and improvement.

“There has never been a more challenging time for the bunker testing sector, given the regulatory and legislative focus on safety and environmental protection. With its new company structure, Lintec is ideally placed to protect its clients’ interests by providing the very best in global fuel testing services.”

Steve Bee, who joined Lintec in 2007, has more than 25 years’ experience of analytical chemistry and business management. He says, “The new roles for Geoff and I will set fresh challenges that can further enhance the development of Lintec in the global market”

For photographs of Geoff Jones, Steve Bee and Tracy Wardell, go to


Lintec Testing Services is one of the world’s leading fuel testing services, providing shipowners and charterers with an independent, high quality and rapid response global fuel testing programme. Lintec is a wholly owned subsidiary of Intertek UK Holdings Ltd. It has a global network with laboratories in the UK, Rotterdam, Singapore and Shanghai, providing a 24-hour global bunker fuel testing service.

For more information:

Labels: , ,

Wednesday, 19 January 2011

Offshore Wind-Farm Maintenance Vessel (WMV) concept cuts costs and carbon

Anglo-Dutch company Offshore Ship Designers has launched a new offshore wind farm maintenance vessel concept which will improve uptime of deepwater wind turbines and reduce maintenance costs and carbon emissions whilst offering a solution to the logistics problem of carrying out simultaneous multiple wind turbine maintenance. The Sea-Wind WMV vessel design is for a mother ship which would remain on station in offshore deep-water wind farms providing a safe haven for multiple numbers of catamaran workboats to carry engineers to service the turbines.

Neil Patterson, managing director of OSD-IMT, Offshore Ship Designers’ UK Company, says, “The Sea-Wind design is a submersible dock ship with a large floodable dock accessible from the stern. It will provide accommodation for wind turbine engineers, service personnel, ships and support crew and can support helicopter operations in addition to its workboat deployment capability. Crew change and supplies will be carried out using a dedicated support vessel with the option to carry out crew changes by using large helicopters normally associated with servicing offshore oil installations.

“With a capability to service up to 45 wind turbines per day in up to 2.5 m significant wave heights, what we are providing is a secure offshore maintenance base from which workboats can be deployed, keeping them and their work crews safely on site in deep water wind farms far from shelter. By remaining on site rather than returning to port between maintenance visits the Sea-Wind WFM vessel design will reduce transit time and energy getting to and from the fields, and will maximise the use of good weather windows. That means savings in cost and energy used for maintenance, reduction of non-operational downtime and increased turbine availability.”

OSD-IMT is at an advanced stage with a European shipping company and UK Ship management company to deliver the concept to wind farm operators who will be constructing Round 3 wind farms around the UK and European coast. Most of these deep water wind farms will be a long way offshore, some up to 110 km, and each of the thousands of turbines require a routine maintenance program to be carried out in addition to any replacement component maintenance due to wear and tear.

The current wind farms closer to shore are serviced by fast catamaran and monohull work boats which go out from the shore in good weather. “The sheer distance and exposed location of offshore Round 3 wind farms makes service from a port difficult, expensive, risky and time wasting,” says Patterson.

“We have taken the best experience of dock ships and their use in military and commercial situations and combined it with our extensive experience in designing offshore support vessels to devise a ship which will be able to remain safely on site and deploy the workboat catamarans in significant wave heights of 2.5 m, while providing a safe haven in bad weather. The Sea-Wind concept has the engineers and working platforms safely on site, and will have an onboard capacity to carry out larger repairs without returning to land.”

In addition to the workboats, the Sea-Wind WMV vessel design also supports Autonomous Rescue and Recovery Craft (ARRC’s) which are certificated as “Places of Safety” and can support marine and helicopter operations remote from the mother ship and provide a safe haven in the event of emergency or rescue situations.

The vessels will be fitted with energy efficient diesel-electric power generation and propulsion systems and will use a number of renewable energy devices to supplement the power generation and support systems, reducing the overall carbon footprint of the vessel.

The largest version of the design will be around 187m overall length and will be fitted with a DP2 dynamic positioning capability, a dry/wet dock, helicopter support facilities, cranes for loading stores from support vessels, and will have accommodation to cater for up to 200 engineers as well as extensive catering and recreational facilities including a cinema, internet room, gymnasium with instructor, sauna, workshops, stores, galley, bakery, cafeteria style mess room, executive mess room, library/quiet room, lounges, coffee corners, doctor and dentists surgeries, first aid room, ships and client offices and briefing rooms. All accommodation will be in single-berth en-suite cabins with a mix of suites, executive client cabins, and standard cabins.

Extensive storage and workshop areas will be provided along with a waste handling plant fitted with recycling capability, waste compacting, water extraction, packaging and wet/dry incineration facilities.

OSD has been working with a catamaran builder/operator to develop a catamaran workboat specifically arranged to work with the Sea-Wind dock ship. They will be fitted with a heave compensated access walkway for accessing the wind turbines.

The dedicated support vessel working with the Sea-Wind WMV mother ship will be an IMT 9552 Wind Farm Maintenance Vessel, which has logistics support capability to carry and transfer cargo fuel, cargo potable water, aviation fuel, dry and refrigerated stores containers on deck and has also single berth accommodation for 25 wind turbine engineers, and is fitted with a crane, heave compensated access walkway and two Daughter Craft Workboats. It can be utilised for maintenance in the wind farm during periods between logistics supply runs.

OSD and its partners are currently in discussion with major wind farm developers and are seeking tenders for the construction of the vessels.

Offshore Ship Designers Group (OSD) is a global one-stop resource delivering naval architecture and marine engineering skills to the shipping and offshore energy industries. It draws on an experienced global workforce to provide high quality feasibility studies, conceptual and detailed designs for tugs and offshore support vessels of all types. OSD is based in IJmuiden, The Netherlands, and has offices in Montrose, York, Appledore, Shanghai and Singapore.


You can download a hi-res graphic of the Sea Wind WMV from:


or e mail john@merlinco.com

For more information:

Neil Patterson
+44 1674 678 999

Merijn Brusselers
Offshore Ship Designers
+31 (0)255 54 50 70

Labels: , , , ,

Tuesday, 18 January 2011

Liberia authorised by new Port State Control inspection regime

LIBERIA has been confirmed as one of only eleven flag states which to date have met the criteria set by the Paris Memorandum of Understanding on Port State Control (PSC) to participate in its New Inspection Regime (NIR) for Low Risk Ships.

The NIR will replace the existing PSC regime on January 1, 2011, whereafter the Paris MoU will change its inspection criteria. The NIR is aimed at rewarding good-performing ships, and targeting poorly performing ones.

Under the NIR, vessels will be classified as Low Risk Ships or High Risk Ships. If a ship is neither Low Risk nor High Risk, it will be classified as a Standard Risk Ship. The criteria for calculating the Ship Risk Profile will take into consideration deficiencies and detentions in a company’s fleet in the previous 36 months, and compare it to the average of all vessels inspected in the Paris MoU. Companies will be ranked very low, low, medium and high. Any refusal of access will have a negative impact on the ranking of the company, which will then be subject to more in-depth and more frequent inspections.

Scott Bergeron, Chief Operating Officer of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, says, “We welcome the Paris MoU endorsement of Liberia as a safe and responsible maritime administration, and are pleased to have achieved verification of our NIR credentials. The Liberian Registry is dedicated to maintaining the highest standards of safety, service and responsiveness, and is proud of its excellent Port State Control record.”
  • The Liberian Registry is one of the world’s largest and most active shipping registers, with a long-established track record of combining the highest standards for vessels and crews with the highest standards of responsive service to owners. It has recently surpassed all-time tonnage records.

Labels: , , ,

Shipping confidence dips again

OVERALL confidence levels in the shipping industry dropped for the second successive quarter, although they are still up on the corresponding period last year, according to the latest survey by leading accountant and shipping industry adviser Moore Stephens. Owners in particular appear to be having a rethink about planned new investments and, together with charterers, are anticipating a fall in dry bulk and container ship rates over the next twelve months.

In the November 2010 Moore Stephens Shipping confidence survey, the average confidence level expressed by respondents in the markets in which they operate was 6.0 on a scale of 1 to 10, compared to 6.2 in the previous survey, in August 2010. Confidence over the past three months fell most noticeably on the part of owners and managers (down from 6.1 to 5.8 and from 6.4 to 6.1 respectively), followed by charterers, down from 6.3 to 6.1. Geographically, confidence on the part of respondents in Europe was down from 6.1 to 5.7, while in Asia it remained unchanged at 6.2.

Concerns about overtonnaging and the effect of a glut of newbuildings soon to come onto the market once again dominated the thinking of responses to the survey. “The over-supply of tonnage will outweigh any increase in demand even when that is bolstered by the continuing growth of the Asian economy,” said one respondent, while another noted, “The volume of tanker and bulker newbuildings over the next two years is bound to influence the market in a negative way, and it will take more order cancellations, rather than mere delivery delays, to redress the balance”. Responses to the survey also reflected ongoing concern about continuing economic uncertainty, and doubts about the availability of finance. “The banks are to some extent driving shipowners’ asset play," said one respondent, “which may not be the right thing for owners. Banks are, after all, only banks, and not shipowners.”

Demand trends, competition and finance costs (24 per cent, 18 per cent and 14 per cent respectively) remained the three factors which respondents expected to influence performance most significantly over the next twelve months, as indeed they have throughout the life of the survey to date. But it was significant that tonnage supply on this occasion was also cited by 14 per cent of respondents as a major factor, the highest figure yet recorded in this category. Indeed, for both owners and charterers, tonnage supply featured in the top three factors, to the exclusion of finance costs. Geographically, this was true also of Asia, where tonnage supply was cited as a significant factor by 15 per cent of respondents.

Demand trends were the most significant factor for both owners and brokers, while for charterers and managers it was competition which headed the list. Operating costs, at 11 per cent, continued to feature significantly just outside the main performance-influencing factors, while crew supply, at 8 per cent, reached its highest figure since the 9 per cent recorded two years ago. One respondent emphasised, “Lower quality crews add to increased operating costs and poorer ship performance. In an attempt to attract better quality crews, we are into higher wage costs. But in fact we are still having to fish in the same pond of generally lower quality crews so we actually end up with the same personnel but paying more for them”.

Having risen last time to their highest level since the survey was launched in May 2008, expectations of making a major investment or significant development over the next twelve months were down overall, on a scale of 1 to 10, from 6.0 to 5.6. The biggest changes in this respect were recorded by brokers and owners (down from 5.2 to 4.7 and from 6.0 to 5.6 respectively). Charterers’ expectations remained unchanged at 6.1, while managers (up from 5.7 to 5.9) were actually more optimistic this time around. Geographically, expectations were up in Asia, from 5.7 to 5.9, but down in Europe (5.6 to 5.3).

Overall, 44 per cent of respondents expected finance costs to rise over the next twelve months. This is up on the record low of 42 per cent who thought likewise in August 2010, but still the second lowest figure recorded during the life of the survey, and 22 percentage points down on the figure for May 2008. More managers (up from 45 per cent to 51 per cent) and owners (37 per cent to 41 per cent) expected finance costs to rise, but the number of charterers of like mind fell by two percentage points (50 per cent to 48 per cent).

So far as the markets are concerned, the numbers of respondents expecting rates to increase over the next twelve months was down in all three main tonnage categories covered by the survey. In the tanker sector, there was a dip in the number of respondents anticipating higher rates overall from 48 per cent to 47 per cent. Expectations on the part of owners was down from 50 per cent to 46 per cent, although more managers and charterers were confident this time that rates would increase, up from 51 to 52 per cent, and from 45 to 47 per cent respectively. In Asia, 45 per cent of respondents anticipated higher rates as opposed to 39 per cent last time, while in Europe the figure dropped to 49 per cent from the 52 per cent recorded in August.

In the dry bulk sector, there was a ten percentage-point drop overall – from 42 per cent to 32 per cent – in the numbers of those expecting higher rates, which equals the lowest figure recorded during the life of the survey thus far. This was common to all categories of respondent, and was most marked on the part of managers (down from 46 per cent to 30 per cent) and charterers (down from 46 per cent to 33 per cent). The number of owners expecting higher rates, meanwhile, was down five percentage points on last time to 33 per cent. It was also worthy of note that the number of respondents overall who expected rates to be lower in twelve months’ time was up eight percentage points from 21 per cent in August to 29 per cent this time. Geographically, there was a significant shift in opinion on the part of Europe, where 27 per cent of respondents were expecting higher rates, as opposed to 44 per cent in August. By contrast, 42 per cent of respondents in Asia were anticipating higher rates, up one per cent on the previous survey.

With the exception of managers (up by one percentage point to 49 per cent), no category of respondent was more confident of an increase in container ship rates this time. Overall, 43 per cent anticipated higher rates over the next twelve months, as opposed to 50 per cent last time. Just 25 per cent of charterers thought that rates would increase, down 17 percentage points from last time, while in the case of owners the numbers dropped from 52 per cent in August to 45 per cent this time.

Moore Stephens shipping partner, Richard Greiner, says, “The slight drop in shipping confidence levels over the last three months still finds the industry in a more optimistic mood than it was twelve months ago. Shipping is arguably the most international industry in the world, and that means it is open to a diverse range of influencing factors, which can be both its strength and its weakness. What is very evident from this latest survey is the continuing level of concern about over-tonnaging, and the prospect of this becoming worse as more and more newbuildings are delivered over the next two-to-three years. Like most things in shipping, this is not new, but it will require careful management, by everybody from the shipowners to the banks, until the supply-demand ratio achieves a healthier balance. History tells us that this will happen eventually, and that it is only the identity of the winners and losers which changes over time.

“One reason for optimism to emerge from the survey is an apparent narrowing of the gap between owners and charterers in terms of their expectations. In two of the three main trades covered by the survey - tankers and dry bulk – owners and charterers seem to pretty much agree, in a manner they haven’t before, which way rates are going to move over the coming year. This suggests a high degree of pragmatism, which is always a good thing when trying to ride out a difficult market.

“It was interesting to note this time, also, the concern expressed by respondents over increasing crew costs. Operating costs generally are likely to increase over the next twelve months, and crew costs are going to be the biggest factor in that. But prudent owners and operators will look elsewhere in search of achievable economies, since cutting back on crew costs has been shown to be a false – and very often costly - economy. One respondent evidently saw an opportunity where others could see only problems when pointing out that seafarer training is an area which shows promising growth potential given the severe dearth of competently trained seafarers. Even the darkest cloud has a silver lining.”
  • The Moore Stephens Shipping Confidence Survey includes responses from key players worldwide in the international shipping industry to a targeted, web-based survey by the Moore Stephens Shipping Industry Group. Responses were received from owners, charterers, brokers, advisers, managers and others. Editors can apply for a copy of the survey by emailing chris@merlinco.com
  • Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 630 offices of independent member firms in 98 countries, employing 20,864 people and generating revenues in 2009 of $2,078 million.
For more information:
Richard Greiner, Moore Stephens LLP
Tel: +44 (0)20 7334 9191

Labels: ,

Search all news items

Home | Services | Clients | News | Contact
Copyright © Merlin Corporate Communications.