Moore Stephens reports small rise in shipping confidence
Overall confidence levels in the shipping industry rose slightly in the three months to May 2016, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens.
In May 2016, the average confidence level expressed by respondents in the markets in which they operate was 5.1 on a scale of 1 (low) to 10 (high). This is a slight improvement on the 5.0 recorded in February 2016, but is still the second lowest rating in the life of the survey, which was launched in May 2008 with a confidence rating of 6.8.
Confidence on the part of owners was markedly up this time, from 4.8 to 5.7, while charterers were also slightly more optimistic than in February, their rating inching up from 3.9 to 4.0. Confidence among managers and brokers, however, was down, from 5.5 to 5.1 and from 5.1 to 4.3 respectively.
Geographically, albeit from very low levels last time, confidence was up in Asia, from 4.4 to 5.2, in Europe from 5.1 to 5.2, and in North America from 4.7 to 5.0.
Economic and geopolitical uncertainty was uppermost in the thoughts of many respondents. “Overall world economic growth is still not moving concertedly in a positive direction,” said one, “so that we have what might best be described as a patchy global economic recovery.” Another emphasised, “Unless there is a drastic change in geopolitical events, shipping markets will remain in their present condition for another 12 months.” Elsewhere it was noted, “World economies are in transition, and we have to adapt to a period when money is not so easy to come by.”
The availability of money for shipping projects, meanwhile, was another recurring theme in respondents’ comments. “Finance is way too cheap,” said one, “and has caused a massive over-supply of tonnage.” Not everybody agreed, however. One respondent complained, “Demands for early loan repayments have been a huge blow to owners’ survival plans,” while another said, “Unstable income due to the collapse in the markets has led financiers to lose confidence in owners.”
Once again, a surfeit of tonnage and a paucity of scrapping were referenced by a number of respondents. One noted, “Far too many newbuildings in the ultra-to-VLOC size range will be hitting the market in the next 12-to-18 months,” while elsewhere it was noted that what is needed is, “strong scrapping, fewer dry newbuildings, stiffer regulations, better and more uniform control.”
Another respondent said, “Over-supply of tonnage is still the key influencing factor in the market, and there will be no real change until bold decisions are made in respect of scrapping tonnage which is less than twenty years old.”
It was not all pessimism, however. One respondent insisted, “There are lots of opportunities in the market for smart operators. Those who merely follow the lead of others will, as always, suffer, because they do not understand the market.” More than one respondent, meanwhile, emphasised that, in many cases, there is simply no alternative to shipping. “Shipping is the major means of transporting goods in the world, and shipping lanes will continue to increase,” said one. “There is still a market out there,” said another, “but we can’t all be winners, and there is no longer any room for mediocre performance.”
The likelihood of respondents making a major investment or significant development over the next 12 months was up marginally on the previous survey, on a scale of 1 to 10, to 4.9 from 4.8 last time, which equalled the figure recorded in February 2009 as the lowest in the life of the survey to date. The confidence of owners in this respect was up significantly, from 4.9 to 5.7, while managers also recorded a small increase, from 5.3 to 5.4. Charterers and brokers, however, were less confident in this regard than they were three months ago, dropping from 5.1 to 4.1 and from 4.4 to 3.5 respectively.
The number of respondents who expected finance costs to increase over the next 12 months was down by one percentage point on last time, to 41 %. The numbers of owners (37 %), managers (49%) and brokers (44 %) anticipating dearer finance were up by one, 6 and 8 percentage points respectively, but charterers’ expectations in this regard were down by 27 percentage points to just 29%.
Demand trends, competition and tonnage supply featured again as the top three factors cited by respondents as those likely to influence performance most significantly over the coming 12 months. Demand trends, which were actually down by two percentage points to 24 %, remained in first place, with competition (up 2 percentage points to 23 %) in second place. Tonnage supply, up one percentage point to 16 %, occupied third place, one percentage point ahead of finance costs. Operating costs, down by 3 percentage points to 9 %, featured in fifth place, ahead of regulation (5 %) and fuel costs (4 %).
Though overall sentiment in the tanker market was still negative, there was a 5 percentage-point increase (to 23 %) in the number of respondents expecting higher freight rates over the next 12 months, and a 3 percentage-point increase (to 43 %) in the numbers of like mind in the dry bulk trades. But there was a 6 percentage-point fall (to 21 %) in the number of respondents anticipating higher rates in the container ship market. The net sentiment in the tanker market was -11, but +32 and +1 in the dry bulk and container ship sectors respectively.
Respondents were asked a stand-alone question concerning whether or not the UK should leave the European Union. Overall, 77% of respondents felt the UK should remain in the EU. But whereas 79% of owners and 75% of managers were of that view, in the case of charterers and brokers it was significantly lower – 57% and 38% respectively. Twenty percent of respondents felt that an EU exit would have some negative impact on their business, but 64% said it would have no impact at all. So far as UK respondents alone were concerned, 59% thought the UK should remain in the European Union, while 49% thought that leaving the EU would have no impact at all on their business.
One respondent said, “There is likely to be no major impact if the UK votes to leave the EU, but there could be a period of uncertainty in connection with rules and regulations.” Another, however, pointed out, “Shipping is a very complex international business. Having an extra layer of bureaucrats in Brussels has a negative effect on economic wellbeing under just about any form of government.”
Richard Greiner, Moore Stephens partner, Shipping Industry Group, says, “If there is one thing certain in the current shipping market, it is the level of uncertainty which is pervading all sectors at the moment. Over the three months covered by our latest survey, that uncertainty has embraced a variety of industry-specific issues, as well as geopolitical factors ranging from the UK referendum on EU membership to the comparative slowdown in the Chinese economy. Against such a background, any increase in shipping confidence – however small – is welcome.
“Many of our respondents continue to express serious misgivings about the extent of overtonnaging, and about the inadequacy of current levels of demolition activity. One informed estimate recently put world shipbuilding overcapacity at 50%. Other estimates, meanwhile, put first-quarter 2016 demolition levels at roughly 50% more than in the same period the previous year. Where ship recycling is concerned, however, 50% of not very much is not enough. As one respondent to our survey noted, ‘We have still to see 15-year-old ships being sent to scrapyards in any meaningful manner.’
“There is meanwhile little cheer in the freight markets. In the dry bulk sector, rates are described as ‘dire’, while it is reported that the container ship market is seeing some of the lowest freight rates in its history. The tanker sector is faring better by comparison, but its fortunes over the coming 12 months will be closely linked to what happens to oil prices. The Baltic Dry Index, although recovering from its recent all-time low, is languishing by comparison with its ‘salad days’, and may continue to do so for some time absent a significant upturn in the Chinese economy.
“It is clear that shipping is in for a hard 12 months. The problems cited by the respondents to our survey are familiar in nature and, in many cases, growing in the extent of their severity. The fact that only 5% of respondents considered regulation to be one of the main factors likely to influence their performance over the coming 12 months is either an indication of the severity and immediacy of other factors, or else an acceptance that there is still time to save up for what is needed to comply with new regulation. The Ballast Water Management Convention now stands on the cusp of ratification at a largely unquantifiable cost to operators.
“The mood of our respondents was not universally downbeat, however. A number continued to emphasise the fact that other methods of transportation are invariably not a viable alternative to shipping, while others stressed that innovative operators will always find a way to succeed, including accessing the finance needed to do so. And while some complained about the difficulty of securing or maintaining finance, 45% of owners rated the possibility of making a new investment over the coming 12 months at 7 out of 10 or higher.
“In general terms, the continuing advent of new technology and the relentless march of regulation are intended to make shipping safer, cleaner, more accountable and more competitive - an environment that would be a natural fit for well-founded operators with sound business plans and long-term aspirations. But the cost of achieving those aims is high, and ultimately much will depend on the industry’s ability to rationalise capacity and thereby push up freight rates.”
Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping, offshore maritime and transport & logistics adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 657 offices of independent member firms in 106 countries, employing 27,613 people and generating revenues in 2015 of $2.7 billion.
For more information:
Moore Stephens LLP
Tel: +44 (0)20 7334 9191
Labels: confidence up, economic and geopolitical uncertainty, finance, freight rates, investment, Moore Stephens, overcapacity, regulation, scrapping, Shipping Confidence Survey May 2016
Wikborg Rein strengthens London team with three key appointments
International law firm Wikborg Rein has
further strengthened its leading presence in the shipping and offshore and
onshore construction sectors with the appointment of three key senior hires to
its London offices.
Nick Shepherd has joined as a partner from
Ince & Co, where he was most recently the head of that firm’s office in Piraeus,
Greece. Nick has a market-leading reputation as an 'owner's lawyer' for the
Greek shipping market, where he is the first-choice lawyer for a number of the
largest shipping groups, including TMS / Dryships / Ocean Rig (Mr George
Economou); the Navios Group (MAngeliki Frangou); Alpha Bulkers / Pantheon
Tankers (Mrs Anna Angelicoussi); and Marmaras Navigation / Delta Tankers (Mr
Nick's practice spans a wide range of
contentious and non-contentious work, including charter parties, drilling
contracts, logistics, casualties, marine insurance, sale & purchase,
shipbuilding and ship arrest. Nick
regularly acts as lead counsel for groups of owners on key industry issues;
most recently he spearheaded the owners' response to the OW Bunker collapse,
taking the industry test case from arbitration through to the UK Supreme Court
within only 15 months.
Mike Stewart, meanwhile, has joined as a
partner from K&L Gates in London, where he was a key member of that firm’s
Energy, Infrastructure and Resources group. Mike specialises in complex,
high-value disputes arising out of major energy and infrastructure projects in
emerging markets, and has developed particular expertise in relation to FIDIC
contracts, having advised on FIDIC-based projects in Turkey, Oman, Jordan,
India and Ethiopia. He has advised on
construction and energy disputes throughout the Middle East, acted on
international arbitrations arising out of major projects in Saudi Arabia,
Qatar, Yemen, Azerbaijan, Ukraine, India and Sri Lanka, and on disputes arising
from FPSOs in Malaysia, Indonesia and Brazil.
Also joining Wikborg Rein from K&L
Gates, as a senior lawyer, is Mary Lindsay. Mary’s practice concentrates on
international arbitration. She is primarily concerned with disputes arising out
of complex construction, infrastructure and energy projects, having acted on
international arbitrations in India, Yemen, Oman, Azerbaijan and Russia. Mary also provides ongoing advice in respect
of live projects in the Middle East and has a particular focus on electrical
engineering and process plants.
Clare Calnan, head of Wikborg Rein's London
office and a partner in its shipping offshore practice, says, “We are delighted
to welcome Nick, Mike and Mary to the firm. Together, and individually, they
have the experience, knowledge and reputation that we always look for as we
seek to expand still further the expertise of our London team. All three will
form an essential part of our practice offering global shipping and offshore
and construction expertise, as well as English law capability.”
Wikborg Rein & Co is a pre-eminent law
firm in the shipping and offshore sector, and a major player on the
international scene. Services to the maritime industry include ship, project
and lease finance, corporate, contract negotiation, offshore and construction
projects, sale and purchase, ship registration, insurance, casualty response,
carriage of goods, ship arrest and international dispute resolution. The firm
is also a leading player in the onshore construction sector. More information
on the firm and its partners can be found at
Labels: construction law, English law, London office, Mary Lindsay, Mike Stewart, new partners, Nick Shepherd, offshore industry, shipping law, Wikborg Rein
Liberia Registry launches electronic oil record book
The Liberian Registry, in partnership with Prevention at Sea Ltd, a
Cyprus-based maritime compliance technology company, has launched an innovative
software product designed to replace traditional paper oil record books (ORBs)
and to facilitate correct ORB entries into an efficient electronic format.
Liberia’s Electronic Oil Record Book (ε-ORB) is the most recent in a
long line of ground-breaking industry initiatives designed to make the
Liberian-flag fleet the safest, greenest and most efficient afloat. It is
intended to address a variety of issues, including oil record books being
reported missing on board, failure to document entries in the ORB of internal
transfer of oily mixture, discrepancies between entry into the ORB and actual
capacity of the oily water separator, and falsification of log entries.
Christian Mollitor, Vice-President of the Liberian Registry, says, “The
Liberian Registry is proud to deliver innovative products that help shipowners
proactively comply with regulatory requirements. It is our belief that many
errors found in oil record books are caused by human administrative error
rather than wilful non-compliance with MARPOL. However, the consequences of incorrectly
recording oil waste transfers are very serious and may lead to criminal
"Through the use of technology, we have developed an IMO-compliant
oil record book that eliminates the chance for administrative errors, ensures
accuracy and accountability in record-keeping, and is easily auditable both on
board and ashore. The ε-ORB affords
peace of mind, knowing that your ship maintains accurate information when
pulling into port."
Created in accordance with MARPOL requirements and certified by Lloyd’s
Register under MEPC1/Circ. 736/Rev. 2 guidelines, the ε-ORB is designed to
establish transparency, credibility and traceability. All information is stored
electronically through the use of a system back-up, making archiving easier and
enabling past data to be revisited. The ε-ORB software will be available for
use by shipowners, ship operators, and authorities worldwide.
For more information on the ε-ORB
software, please contact email@example.com
The Liberian Registry has long been considered the
world’s most technologically advanced maritime administration. It has a
long-established track record of combining the highest standards of safety for
vessels and crews with the highest levels of responsive service to owners.
Moreover, it has a well-deserved reputation for supporting international
legislation designed to maintain and improve the safety and effectiveness of
the shipping industry and protection of the marine environment.
Labels: discrepancies, electronic oil record book, failure to document ORB entries, falsification of log entries, Liberian Ship Registry, oily water separators, ORBs missing on board
ITIC launches cyber liability insurance extension
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
|International Transport Intermediaries Club (ITIC) has launched a cyber
liability extension to ITIC policies to protect its existing professional
indemnity members against the growing threat posed by hackers.
has always provided cover for damage arising from the loss of or damage to
computer records in its members’ custody. But it says that a new threat has
emerged in the form of third parties misusing the systems of its members to
cause damage to data held by others. Hacking into systems operated by service
providers, says ITIC, can be used by criminals as a gateway to gain illegal
access to information systems.
Underwriting Director Alistair Mactavish says, “The use of information
technology and electronic communication is a central feature of the
activities carried out by ITIC’s members. Any business can be the subject of
an attack by hackers. For example, hackers could use a liner agent’s system
to obtain the release of cargo which they then steal. In covering their
tracks, the hackers might destroy all data relating to rates, container
numbers and dates and places of loading”.
another example, a shipbroker’s computer system might be accessed by
fraudsters who use it to send messages to charterers, altering the banking
details for hire payments. Or malware could be inserted onto a ship manager’s
network, disrupting operation of the ship and resulting in claims for delay.”
is in response to such threats that ITIC has developed an extension to its
existing cover, which will protect against liabilities arising from the
unauthorised use of its members’ computer networks. This will provide
insurance to cover, among other things, misuse of computers operated by
ITIC’s members, together with any software and peripheral devices necessary
to make those computers function - including servers, networking equipment
and data storage devices.
cover will respond in respect of acts by people who gain access to members’
computer networks without their permission, or people who are granted access
for a legitimate purpose but misuse that access to cause harm. The policy
will cover a member’s liability to pay compensation to a third party damaged
by the unauthorised use of the member’s computer network and all associated
legal and experts’ costs incurred by that member.
For more information:
Tel. +44 (0)20 7338 0150
Fax. +44 (0)20 7338 0151
Labels: computer records, cyber risks, hackers, Insurance, ITIC, loss and damage, ship agents, shipbrokers, system misuse, transport intermediary liability
Liberian Registry introduces cost-saving measures
Registry has introduced a range of cost-saving provisions to help mitigate the
burden and financial strain currently being placed on owners and operators of
Liberian-flag vessels during the sustained economic downturn in the maritime
and offshore sectors.
provisions are set out in Marine Operations Notes 02-2016 and 03-2016 recently
released by the Liberian Maritime Authority to owners and operators of Liberian and
non-Liberian flag vessels, as well as financial institutions and legal
advisers. They cover a range of operational expenses with potential for cost-savings as
well as advice that will reduce flag state expenses.
The guidance also
includes the facility to waive initial
certification and mortgage-related fees for registration transactions in
Liberia, as well as fees for the reissuance of ISM and ISPS certificates for
vessels transferring into the Registry.
Other provisions covered
by the Liberian Registry initiative include the potential to extend vessel
drydock periods, the option to harmonize ISM/ISPS audits
with annual safety inspections, and free access to an electronic seafarer
certification and documentation system.
measures also embrace specific provisions relating to vessels entering lay-up, and the
facilitation of operational measures to ensure safe and secure removal of the
vessel from service. These provisions are available to vessels currently in
service, vessels currently under construction and vessels transferred from
other flag administrations for the purpose of lay-up. In this regard, guidelines and procedures have also been developed
by the Liberian Registry to address safe manning levels, lay-up procedures and
Scott Bergeron, CEO of the Liberian International Ship & Corporate
Registry (LISCR), the US-based manager of the Liberian Registry, says, “We
believe it is essential to support the shipping industry during these extremely
difficult times. The initiatives we have announced supplement those
cost-efficiency measures which are already available to Liberian-flag vessels.
“Other benefits enjoyed by Liberian-flag vessels include favourable
treatment when calling at Chinese ports. This follows the recent historic Agreement
on Maritime Transport between the People’s Republic of China (PRC) and the
Republic of Liberia, under which Liberian flag vessels will be charged a
preferential rate for tonnage dues when visiting any port in China. The
preferential rate saving equates to a 28% discount for each vessel’s tonnage
“With just a little innovative thinking, it is possible for ship
registries to anticipate problems before they occur, in the process saving
owners and operators both time and money. We believe these latest measures will
help achieve those objectives.”
Registry has long been considered the world’s most technologically advanced maritime
administration. It has an established track record of combining the highest
standards of safety for vessels and crews with the highest levels of responsive
service to owners. Moreover, it has a well-deserved reputation for supporting
international legislation designed to maintain and improve the safety and
effectiveness of the shipping industry and protection of the marine
Labels: cost saving measures. waiving certification and mortgage fees, extended drydocking, lay up provisions, Liberian Registry, reducing flag state expenses, shipping
Bureau Veritas launches My VeriSTAR mobile application
classification society Bureau Veritas has developed a one-stop-shop mobile application which will allow marine
professionals to easily perform daily class and statutory actions through a
user-friendly interface. With My VeriSTAR, shipowners and managers will be able
to monitor their fleet, plan their surveys and stay informed, anytime and
Philippe Donche-Gay, Executive
Vice President and Head of Bureau Veritas Marine & Offshore Division says,
“We live and work on the move and shipping is a mobile industry more than most.
Our new app will make life easier for ship owners and operators, saving them
time and money and further strengthening the links between them and Bureau
Veritas’ range of services and support.”
The first version of the app is now available on Apple Store
and Google Play Store. It includes key functions from the VeriSTAR Info
website, and new ones like the Bureau Veritas Directory.
My VeriSTAR will enable Bureau Veritas clients to access a
statutory snapshot and visual timeline of their fleet as well as detailed
vessel information and documents, survey reports, visual survey planner and a
timeline view of activities. Fleet managers and superintendents will be able to
closely monitor selected vessels thanks to customizable and push notifications,
and locate their vessels in real-time.
In order to facilitate day-to-day operations related to class
and statutory activities, My VeriSTAR will also allow users to request surveys,
audits and class attestations directly on their mobile. My VeriSTAR users will
be able to preview and access the latest class and statutory news, search for
and easily contact Bureau Veritas personnel or offices and access Bureau
Veritas fleet statistics.
My VeriSTAR is a user-friendly mobile application centred on
our clients’ business and operational needs. The app has been tested with pilot
clients and has received positive feedback.
Bureau Veritas Marine & Offshore is leading the Bureau
Veritas group digital transformation. My VeriSTAR mobile application is one of
the many new digital services which will be delivered to our clients during
VISIT BV STAND NO 2.201 at 1:00 pm
on Wednesday 8 June for a digital demonstration and press reception. See the
app and other services in action and meet senior managers.
Bureau Veritas is a world leader
in laboratory testing, inspection and certification services. Created in 1828,
the Group has more than 66,000 employees in around 1,400 offices and
laboratories located all across the globe. Bureau Veritas helps its clients to
improve their performance by offering services and innovative solutions in
order to ensure that their assets, products, infrastructure and processes meet
standards and regulations in terms of quality, health and safety, environmental
protection and social responsibility. Bureau Veritas is listed on Euronext
Paris and belongs to the Next 20 index.
Compartment A, ISIN code FR 0006174348, stock
AKD appoints new partner to Transport & Energy team
ROTTERDAM-based law firm AKD has appointed Annemieke Spijker a partner in its Transport & Energy team with effect from 1 June, 2016.
Annemieke joined AKD in July 2006, and became a member of the firm’s industry-leading Transport & Energy team in January 2008. She specialises in disputes involving road carriage and multimodal transportation, and has particular experience in drafting and negotiating logistics contracts. Annemieke is also involved in litigation, focusing on international transportation law disputes and recoveries.
Annemieke, who is a Legal 500 first-rate recommended lawyer and a member of the Dutch Transport Law Association, as well as being actively involved in the Transport Law Commission of the International Association of Young Lawyers (AIJA), says, “I am delighted to have been made a partner at AKD, where I greatly enjoy my role as part of a top-tier team of lawyers working on issues in the logistics, shipping & offshore, aviation and international trade sectors.
Jos van der Meché, head of AKD’s Transport & Energy team, says, “At AKD Transport & Energy, we come up with unconventional solutions where necessary, based on expertise and creativity. We are able to do that by recruiting and retaining people with the highest level of legal expertise combined with an in-depth knowledge of the markets and industry sectors in which our clients operate. Annemieke is a perfect example of that.”
AKD’s Transport & Energy team provides a full range of legal services. AKD is a full-service firm with over 220 lawyers, civil-law notaries and tax advisers. It was named Benelux Law Firm of the Year for 2016 by The Lawyer.
Labels: AIJA, AKD, Annemieke Spijker, law, logistics, multimodal transport, new partner, offshore, road carriage, Rotterdam, shipping, Transport and Energy
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