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Tuesday 20 December 2016

Optimistic charterers help boost shipping confidence to 15-month high

Shipping confidence improved for the third successive quarter in the three months to end-November 2016, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens.

In November 2016, the average confidence level expressed by respondents was 5.6 out of 10.0, equalling the highest rating since August 2015. All main categories of respondent were more confident than in August 2016, when the overall rating was 5.4. Charterers’ confidence this time increased by 2.0 points, to 6.8, the highest figure in the life of the survey for such respondents. The confidence of owners was up from 5.3 to 5.4, of brokers from 4.5 to 5.6, and of managers from 6.0 to 6.4. The survey was launched in May 2008 with an overall confidence rating of 6.8.

Confidence was up in Asia, from 5.5 to 5.7, in Europe from 5.2 to 5.4, and in North America from 5.8 to 5.9.

A number of respondents felt that the bottom of the cycle had been reached and that the only way was up. Particular concern was expressed about overtonnaging, insufficient recycling, and the cost of regulatory compliance. One respondent noted, “The oversupply of tonnage will cease when the banks write down bad loans and force owners to sell for scrap,” while another said, “The weak or unlucky will fold or be gobbled up, while the strong or the lucky will grow and succeed.”

The likelihood of respondents making a major investment or significant development over the next 12 months was unchanged, at 4.9 out of 10.0. Charterers’ confidence in this regard was up from 5.0 to 6.4, equalling its highest figure since August 2013. Owners’ expectations were also up, from 4.8 to 5.0, but those of managers and brokers were down, from 5.3 to 5.2 and from 4.1 to 3.8 respectively. According to one respondent, “It is hard to see how major investment to meet environmental regulations can be justified in the current climate.”

The number of respondents expecting finance costs to increase over the coming year rose from 35% to 53%, the highest level for five years. Owners’ expectations in this regard rose from 31% to 58%, their highest level since May 2011. The figures for brokers and managers were also up, from 47% to 53% and from 30% to 52%, respectively. Charterers were alone in not anticipating any increase in finance costs. “Major investment will be required over the next few years to meet increasingly stringent environmental regulations,” said one respondent, “at a time when earnings are on the floor and bank finance is hard to come by.”

Competition is expected to influence performance most significantly over the next 12 months, just ahead of demand trends, followed by finance costs and tonnage supply. One respondent said, “If demand remains weak, we don’t anticipate any improvement in the shipping markets over the next five years, particularly for dry bulk cargoes.”

The number of respondents expecting higher rates in the tanker market over the next 12 months rose by ten percentage points to 33%, the highest figure since August 2015, while the number anticipating lower tanker rates fell from 37% to 24%. Meanwhile, there was a three percentage-point rise, to 41%, in the numbers anticipating higher rates in the dry bulk sector. In the container ship sector, the numbers expecting higher rates rose from 22% to 27%, but there was a five percentage-point increase, to 21%, in those anticipating lower rates. The net sentiment in the tanker markets was +9, while it was +31 in the dry bulk markets and +6 in the container ship trades.

In a stand-alone question, respondents were asked what they considered would be the most important source of funding for the installation of Ballast Water Management (BWM) systems by shipowners. Overall, on a weighted average basis, 21% of respondents felt that shipowner equity (shareholder funds) would provide the source of funding. Next came bank finance, at 19%, BWM system manufacturers (15%), shipyards (12%) and other non-bank finance (10%). One respondent said, “Financing BWM is almost impossible. Owners have no money for it.”

Richard Greiner, Moore Stephens Partner, Shipping & Transport, says, “This is the third successive increase in shipping confidence recorded by our survey. So despite overtonnaging, weak freight rates, declining demand, insufficient recycling, Brexit, Syria, Trump, despite everything, shipping is still looking up, rather than down. This is not to deny the reality of today’s difficult market, or the sluggish economic climate. But it does say much for the strength of shipping’s backbone and the quality of its mettle.

“Those who can point to a long history in shipping will be better placed to gauge the severity and longevity of the current downturn than those with a shorter pedigree in the industry. But both will need access to finance and to other resources in order to meet the challenges which lie ahead. Not the least of these is the ongoing regulatory environmental compliance programme, even if implementation of the BWM convention may be caveated with potential delay and amendment for a little while longer.

“Many of our respondents felt that things can only get better. They are probably right. But for that to happen, freight rates will have to go up. Perhaps it is safer to say for the moment that, if we want things to stay as they are, things will have to change.”

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. www.moorestephens.co.uk.


For more information:
Richard Greiner
Moore Stephens LLP, London
Tel: +44 (0)20 7334 9191
richard.greiner@moorestephens.com

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Friday 16 December 2016

Shell Netherlands president-director opens Rotterdam’s Offshore Experience

Marjan van Loon, President-Director of Shell Netherlands, officially opened the Offshore Experience exhibition at the Maritime Museum in Rotterdam on Friday, 16 December.
Over fifty leading companies in the shipping and offshore maritime sector are among those who have helped fund the first-ever exhibition in the Netherlands dedicated to the offshore sector.
The offshore industry is one of the largest and most innovative sectors in Holland, and yet at the same time also one of the most unknown and unloved. The Offshore Experience is going to change that forever by providing a spectacular overview of the search for oil, gas, wind energy and renewables at sea.

It is also hoped that the exhibition, which uses 360-degree film projection to let visitors imagine they are on a platform in the open sea, will serve to inspire children aged 8 and above to consider a future in technology.

The Offshore Experience will be open to the public from Saturday 17 December.

Press photos:
https://www.maritiemmuseum.nl/offshore-experience-2

About the museum:
https://www.maritiemmuseum.nl/en

More information:
Judith Freijser
marketing en communicatie
Maritiem Museum Rotterdam
j.freijser@maritiemmuseum.nl
Tel 0031 10 402 92 42 / 0031 6 249 93 233

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Monday 12 December 2016

Liberia says flag states must be proactive in difficult market conditions

The Liberian Registry says that, in today’s challenging shipping markets, flag states must be proactive in the best interests of shipowners, operators and managers, rather than simply fulfilling their traditional role as certification bodies.

Alfonso Castillero, Vice-President of the Liberian Registry, told a recent Liberian Port State Control seminar in Tokyo, "In the current difficult market conditions, flag states can no longer afford to regard themselves as mere factories for issuing registration certificates. It is necessary to evolve and to embrace new challenges. Shipping registers need to combine quality and innovation with tradition, experience, reputation and flexibility.”

Mr Castillero was speaking at a Port State Control (PSC) seminar organised by the Liberian Registry. The objective of the seminar, which was attended by representatives of the Australian Maritime Safety Agency (AMSA), was to promote among clients of the Liberian Registry a clear understanding of the Port State Control process in Australia, so that owners, operators, and managers can achieve full compliance with – and facilitate efficient inspections under – Australia’s PSC regime.

Benson Peretti, Managing Director of the Liberian Registry’s Singapore office, outlined for the seminar the Liberian Registry’s PSC results for the year to date, showing a major reduction in detentions in China, Australia, and the United States, thanks in large part to the free compliance assistance programmes being implemented by Liberia to help owners ensure full compliance, and reduce the incidence of PSC detentions worldwide.

Takeshi Okamoto, General Manager of LISCR Japan, meanwhile, explained how and why the Liberian Registry is leading the global campaign to seek an extension to the implementation date for the Ballast Water Management Convention.

The seminar was attended by over one hundred industry professionals, including Liberian flag clients and potential clients looking to switch flags or register new vessels under the Liberian flag. The mood of the seminar was summed up by the chief executive of one leading Japanese shipowner who emphasised, “We must comply with all international regulations, and that is why we need a flag that will always stand beside us." www.liscr.com





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Monday 5 December 2016

Moore Stephens wins Lloyd’s List Greek Shipping Award for OpCost

OpCost, the market-leading ship operating costs benchmarking tool from international accountant and shipping adviser Moore Stephens, has won a prestigious Lloyd’s List Greek Shipping Award.

The Lloyd’s List Intelligence Big Data Award, sponsored by the Department of Merchant Shipping of the Republic of Cyprus, was presented jointly to Costas Constantinou, Managing Partner, Moore Stephens Chartered Accountants S.A., Greece and Richard Greiner, Partner, Shipping, Moore Stephens LLP, London. The award was presented by Marios Demetriades, Minister of Transport, Communications & Works, at the Lloyd’s List Greek Shipping Awards Ceremony & Gala Dinner at the Athenaeum InterContinental Hotel, Athens on Friday 2 December.

The award recognises the significant potential that big data has to transform shipping, from timely insights drawn from real-time monitoring and forecasting of events, to improved management of performance and risk. Candidates were required to demonstrate measurable results in areas such as strategic business/investment planning, performance monitoring and optimisation, condition-based and predictive maintenance, optimisation across systems and system overview of operations.

Costas Constantinou says: “Moore Stephens is delighted that its unique OpCost benchmarking tool has been recognized in the Lloyd’s List Greek Shipping Awards. OpCost is an excellent example of the type of innovative service and products which Moore Stephens provides to the shipping industry both in Greece, and internationally throughout the maritime industry.”

Richard Greiner, global project leader for OpCost, says: “With operating costs continuing to rise, owners and operators need accurate and reliable information on cost movements to help plan their budgets and business strategies accurately. OpCost can also be used for business and budget planning, and transfer pricing studies. The most widely respected barometer of ship operating costs in the industry, it is available in a user-friendly online format, and is continually supplemented with new data to provide the shipping industry with the information it needs to monitor and plan its expenditure.”

Moore Stephens is noted for a number of industry specialisations and is widely acknowledged as a leading shipping, offshore maritime and transport & logistics adviser. Both Moore Stephens Chartered Accountants S.A. and Moore Stephens LLP are member firms 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 US$2.7 billion. www.moorestephens.com


For more information:

Costas Constantinou
Moore Stephens Chartered Accountants S.A., Greece
Tel: +30 (213) 0186 100
costas.constantinou@moorestephens.gr

Richard Greiner
Moore Stephens LLP, London
Tel: +44 (0)20 7334 9191
richard.greiner@moorestephens.com

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