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Wednesday, 22 March 2017

Liberian Registry passes historic 150m gross tons landmark

The Liberian Registry has passed the historic milestone of 150 million gross tons, confirming its position as the second largest ship registry in the world, behind only Panama, in terms of numbers of ships and gross tonnage.

Following registration of the 43,301 gt bulk carrier SBI Jive, owned by the Scorpio Group, the Liberian-flag fleet currently numbers 4,167 vessels aggregating 150m gross tons. This milestone was recognized today at the Connecticut Maritime Association’s annual Shipping Conference where Cameron Mackey, Chief Operating Officer of the Scorpio Group accepted a ceremonial Certificate of Registry from Liberian Registry CEO, Scott Bergeron.

Scott Bergeron, CEO of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, says, “There is currently intense competition for business in the ship registration sector. Liberia welcomes competition based on quality, safety and service, and we are excited about our immediate and long-term future.”

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.


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Tuesday, 21 March 2017

Shipping confidence holds steady despite industry and political pressures

Shipping confidence held steady in the three months to end-February 2017, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens.

In February 2017, the average confidence level expressed by respondents was 5.6 out of 10.0, unchanged from the previous survey in November 2016 and equal to the highest rating since August 2015. Owners were the only main category to show an improved level of confidence, up from 5.4 to 5.6. Confidence on the part of charterers was down from its all-time survey high of 6.8 to 5.9, while that of managers fell from 6.4 to 6.0. Confidence levels in the broking sector, meanwhile, dropped from 5.6 to 4.6. The survey launched in May 2008 with an overall confidence rating of 6.8.

Confidence was up in Europe and North America, from 5.4 to 5.5 and 5.9 to 6.1 respectively, but down from 5.7 to 5.6 in Asia.

Respondents generally felt that competition was running at very high levels, while other familiar concerns included overtonnaging and geopolitical uncertainty. Most respondents saw 2017 as a year of retrenchment rather than improvement. One said, “If owners can maintain their discipline and resist the blandishments of shipyards desperate for business, there is hope that 2018 will see a return of market equilibrium, in which continued scrapping remains a key element.” Another, meanwhile, noted, “The current state of most shipping markets, coupled with the weakness of banks, means that conditions should be more attractive for alternative lenders.”

The likelihood of respondents making a major investment or significant development over the next 12 months was unchanged for the fourth successive quarter, at 4.9 out of 10.0. Managers’ expectations were up from 5.2 to 5.6, the highest level since August 2015. Owners’ expectations were also up, from 5.0 to 5.1, but those of charterers and brokers were down, from 6.4 to 5.8 and 3.8 to 3.4 respectively.

The number of respondents expecting finance costs to increase over the coming year rose by one percentage point to 54%, the highest level since November 2011. Owners’ expectations of increases fell from 58% to 57%, while the figures for brokers were also down, from 53% to 41%. Managers were of a different mind, with 61% expecting increases as opposed to 52% in November 2016.

Demand trends overtook competition as the factor expected to influence performance most significantly over the next 12 months, followed by finance costs and tonnage supply. “Competition is so intense at the moment,” said one respondent: “that you either accept what is offered or a competitor will take the cargo.”

The number of respondents expecting higher rates in the tanker market over the next 12 months fell by eight percentage points to 25%, while the number anticipating lower tanker rates rose from 24% to 28%. Meanwhile, there was a three-percentage-point rise, to 44%, in the numbers anticipating higher rates in the dry bulk sector, although one respondent remarked, “The dry bulk freight market will continue to be tough, with returns not much above break-even”. In the container ship sector, the numbers expecting higher rates rose from 27% to 31%, while there was a three-percentage-point fall, to 18%, in those anticipating lower container ship rates. The net sentiment in the tanker markets was -3 (compared to +9 in November 2016), while it was +33 (up from +31 last time) in the dry bulk markets and +13 (compared to +6 in the previous survey) in the container ship trades.

In a stand-alone question, respondents were asked to identify the price range they expected crude oil (per-barrel) to be in 12 months’ time. The most popular estimate was the $50-$59 range, identified by 38% of respondents, as opposed to 19% in the February 2016 survey. Meanwhile, 12% of respondents opted for the $40-$49 range compared to 26% last time. The $60-$69 price range was favoured by 29%, as opposed to just 5% one year ago. In February 2016, 31% predicted crude oil prices to be in the $30-$39 price range, whereas just 1% did so this time.

Richard Greiner, Moore Stephens Partner, Shipping & Transport, says, “After three successive quarterly increases, shipping confidence has held steady. This is encouraging given the continuing political uncertainty in the US and Europe. Shipping is vulnerable to changes in the political landscape, and a slew of elections in leading industrialised nations will render it particularly so this year.

“Elsewhere, the issues facing the industry include an over-supply of ships and insufficient demolition. Freight markets are dragging along the bottom in many sectors, with net rate sentiment in the tanker market being particularly low. Add to this the expectation of higher ship finance costs, the mounting costs of regulation, the threat of cyber-crime and projected increases in operating costs and it is evident that shipping will not be a picnic for the foreseeable future.

“But shipping is not a natural fit for the pessimist, and those with meaningful experience of the industry will be looking with some justification for a re-strengthening of rates in the tanker and dry-bulk trades, supported by continued rationalisation of newbuilding plans and accelerated recycling levels. Meanwhile, oil prices will continue to go up, which is mixed news for the shipping industry. For those who can effectively manage risk and volatility, shipping is still the place to be.”

The full survey report can be downloaded from the Moore Stephens website:

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 626 offices of independent member firms in 108 countries, employing 27,997 people and generating revenues in 2016 of $2.7 billion. www.moorestephens.co.uk

For more information:
Richard Greiner
Moore Stephens LLP
Tel: +44 (0)20 7334 9191

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Monday, 20 March 2017

London P&I Club supports appointment of warranty surveyors for deck cargo loads

THE London P&I Club has highlighted a recent increase in the incidence of deck cargoes shifting in heavy weather, and supported a recommendation to appoint a warranty surveyor to supervise high-risk marine construction and transportation project operations where appropriate.

In an article in the club’s latest StopLoss Bulletin, Paul Walton, a director with international marine consultant LOC (Hong Kong), says, “In the past year, LOC has seen many deck cargoes shifting in heavy weather. Invariably, after further investigation, it has been discovered that the stowage and securing of these cargoes did not comply with the ship’s Cargo Securing Manual (CSM) or the practices laid down within the Code of Safe Practice for Cargo Stowage and Securing (CSS Code) or other applicable codes of safe practice.

“Such losses have prompted the view that a suitably qualified Marine Warranty Surveyor (MWS) should be recommended to attend such load-outs. This would ensure that the port captain or supercargo carries out the operation correctly, and that the master is satisfied with the stowage, securing and tensioning requirements, as is his responsibility under SOLAS.”

An MWS provides independent third-party technical review and approval of high-value and/or high-risk marine construction and transportation project operations, beginning at the planning stage. The objective of employing such a surveyor is to make reasonable endeavours to ensure that the risks associated with the specified operations are reduced to an acceptable level in accordance with best industry practice. The role of the MWS is independent of, and complementary to, that of the port captain / supercargo.

Paul Walton says, “By appointing an independent third-party MWS to review the whole
operation from start to finish, carriers and charterers will reduce the high-risk factor associated with deck cargoes. The attendance of an MWS will ensure that the regular areas of failure within a deck stow such as poor lashing equipment, insufficient use of lashing equipment, and non-compliance with all relevant safety codes will be avoided.”


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Friday, 10 March 2017

Demons at work

Back in the 1960s, the City of London was an exciting place to earn your living. The jobs on offer were not themselves very exciting or well-paid, being largely centred on the insurance industry. But this was London, and these were the hedonistic days of the Beatles, the Kennedys, Cassius Clay, package holidays to Spain, pub lunches and football on Saturday afternoons.

If you worked in the offices of an insurance broker, as opposed to plying your trade as an employee of the same broker in the Underwriting Room at Lloyd’s, you could go out mid-morning with chums for a coffee and cheese bun at Valente’s (other cafes were available), and get back to your desk in time to scrub up well before repairing to Leadenhall Market for a cooked lunch and custard pudding which left you with change enough from a three-shilling Luncheon Voucher for a Blue Riband chocolate bar.

Then it was off to the pub for a quick livener before strolling back to the office for a game of darts in the cloakroom, all accomplished comfortably in a two-hour lunch-break - two-and-a-half hours, tops. On such humble precepts were built the reputations of Sid ‘Two-Dinners’ Kay (“Risotto and chips, twice, please Betty”), and others of his ilk.

No wonder we were happy.

At this time, Lloyd’s of London had yet to achieve its real notoriety as an architectural blot on the City landscape. Here, the other half of the broking fraternity - properly accredited chaps with entitlement to enter Lloyd’s in order to place the risks handwritten onto slips prepared by their colleagues in the office - could wander around in the morning getting a scratch or two, for the sake of appearances.

Then it was off to the Captain’s Room for elevenses - most likely coffee and chocolate digestives and The Times crossword - before more aimless meandering around Lloyd’s until it was time for lunch downstairs, where you were served your meal by men-ahead-of-their-time who would pile up your plate with extra chips accompanied by cries of, “I’d rather keep you for a week than a fortnight” or, more controversially, “I like a man with a moustache.” Then to The Grapes for orders, and a well-earned drink. From there it was only a short wait until four o’clock, when everybody was allowed to fire up their cigarettes and pipes in full accordance with Room rules.

No wonder we were happy.

Of course it couldn’t last. First, Lloyd’s allowed women into the Room – as if THAT was going to work. Then it banned smoking altogether. Then it moved into the Richard Rogers building. Then it introduced rules to make it harder for people to fiddle the books. Now, lo and behold, it has banned employees from drinking during office hours. An internal memo to staff reportedly notes, “The London market historically had a reputation for daytime drinking …”


The memo goes on to emphasise, “Lloyd’s has a duty to be a responsible employer, and provide a healthy working environment. A zero limit (on alcohol consumption) is in line with the modern, global and high-performance culture that we want to embrace.”

Lloyd’s also has a duty to treat people as responsible adults. Rather than championing abstinence, Lloyd’s used to be red-hot on stopping people trying to smuggle teapots into the building, or on throwing out office-based urchins illegally posing as Room-accredited brokers with assumed names trying to get a message to more privileged colleagues in an attempt to place cover on shipments of cocoa beans from Puerto Bolivar to Liverpool. Now, it seems to be saying that it does not trust its employees to drink sensibly at lunchtime, instead taking the typical bully’s approach of banning everything, everywhere, at any time because, in its own words, “It is simpler and more consistent.”

Of course the ban only applies to employees of Lloyd’s, and not to those who bring in work from outside – the brokers – without whom Lloyd’s wouldn’t exist. But one wonders what the fortunes and the mood - not to mention the very history - of the London insurance market might have looked like over the last hundred years if Lloyd’s employees had been banned from having a drink with their lunch.

Apart from anything else, asking people who have had a drink, even a modest one, to do business with people who haven’t, is not a good idea.

Heaven knows we’re miserable now.


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Wednesday, 8 March 2017

Moore Stephens says UK Budget is neutral for shipping and good for offshore

International accountant and shipping adviser Moore Stephens says the UK Budget 2017 contained no unwelcome surprises for the shipping industry, and some good news for the offshore sector.

Moore Stephens tax partner Sue Bill says, “There are new rules, already announced, that will affect the deductions which a UK group can be claim for interest expenses. The new tax rules will restrict each group’s net deductions for interest to 30% of earnings before interest, tax, depreciation and amortisation (EBITDA) that are taxable in the UK. These rules should not affect tonnage tax companies, as those companies have no deduction for interest paid within the tonnage tax ring fence.

“There is also a reference to the government consulting later this year on legislative changes required following the announcement of the International Accounting Standard Board’s new leasing standard IRFS 16 Leases, which comes into effect from 1 January 2019. The government intends to maintain the current system of leased taxation by making legislative changes which enable the rules to continue to work as intended.

“HMRC has also confirmed that the new rules being introduced from April 2017 for non-UK domiciled individuals (‘non-doms’) will apply from 6 April 2017 for those who have been UK-resident for 15 out of the past 20 tax years.

“Improvements to the oil and gas regime, meanwhile, include an extension to investment and cluster area allowances, and tax for late-life oil and gas assets. These are aimed at improving the attractiveness of the North Sea as an area for investment.

“There have been no changes to the shipping rules, in particular those within the UK tonnage tax regime or in the taxation of non-resident shipping companies. Overall, this is probably a case of no news being good news for the shipping sector.”

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 626 offices of independent member firms in 108 countries, employing 27,997 people and generating revenues in 2016 of $2.7 billion. www.moorestephens.co.uk

For more information:
Sue Bill
Moore Stephens LLP, London
Tel: +44 (0)20 7334 9191

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