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Friday, 30 June 2017

ITIC pays out for pool manager’s acceptance of unacceptable tanker

International Transport Intermediaries Club (ITIC) has highlighted the costly consequences of a shipping pool manager’s failure to accurately describe a tanker, leading to a substantial claim by charterers.

The pool manager misdescribed the tanker as being acceptable to a specific oil major, even though he had received an email from the head owner prior to fixing which stated that it had rejected the vessel. This email was overlooked by the pool manager when the tanker was fixed for a spot voyage to load ultra-low-sulphur diesel.

The fixture recap contained a clause stating, “To the best of owner’s knowledge at the time of fixing, vessel is not unacceptable to following oil majors …” The list referred to a number of companies, but did not include the specific oil major.
The pool manager, however, had mentioned during negotiations that the tanker should be acceptable to this specific oil major since it was not excluded.

The charterers could not sell the cargo and had no other option than to put it into
storage. They claimed $250,000 in damages, a claim which was settled by the pool
manager, who was duly reimbursed by ITIC.
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
Fax. +44 (0)20 7338 0151

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Wednesday, 21 June 2017

Shipping confidence hits three-year high

Shipping confidence reached its equal highest rating in the past three years in the three months to end-May 2017, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens.

The average confidence level expressed by respondents to the survey was up to 6.1 out of 10.0 from the 5.6 recorded in the previous survey in February 2017. Increased confidence was recorded by all main categories of respondent to the survey, which launched in May 2008 with an overall confidence rating of 6.8.

In the case of brokers, the confidence rating rose from 4.6 to 6.4, while for owners the increase was from 5.6 to 6.1. Confidence on the part of charterers and managers, meanwhile, was up from 5.9 to 6.4, and from 6.0 to 6.2 respectively. Confidence levels were unchanged in Asia at 5.6, but up in Europe, from 5.5 to 6.2, and in North America, from 6.1 to 6.4.

A number of respondents expressed cautious optimism about the industry’s fortunes over the next 12 months, based largely on perceived increased levels of ship demolition and a rationalisation of over-ambitious newbuilding plans. This helped increase expectations of major investments being made over the next 12 months. Concern persisted, however, over political uncertainty, overtonnaging in certain trades, depressed oil prices and a potential dearth of quality seafarers.

One respondent said, “Shipping people are eternally optimistic, with one week of good news seeming to help them forget eight terrible years of hardship and financial loss.”

The likelihood of respondents making a major investment or significant development over the next 12 months was up from 4.9 out of 10.0 in the previous survey to 5.4, the highest level since August 2014. There was increased confidence on the part of all major respondents, in the case of charterers up to a level of 6.3 from 5.8 in February 2017. Owners and managers, meanwhile, each registered a confidence level of 5.9, up from 5.1 and 5.6 respectively last time. Confidence on the part of brokers was up from 3.4 to 4.4.

50% of respondents expected finance costs to increase over the coming year, compared to 54% in the previous survey. Owners’ expectations fell from 57% to 48%, while managers were also down, from 61% to 57%. More brokers and charterers, however, anticipated costlier finance – 63% of brokers (against 41% last time) and 57% of charterers (compared to 47% in February 2017). “The financial support needed to boost the markets is not yet at expected levels,” noted one respondent, “but we believe that the situation will improve in the coming months as demand increases.”

Demand trends, cited by 26% of respondents, continued to be the factor expected to influence performance most significantly over the next 12 months, followed by competition (22%) and finance costs (14%). According to one respondent, “Larger companies are targeting their smaller competitors in order to minimise competition and secure a stronger position in the market.”

The number of respondents expecting higher freight rates over the next 12 months was up on the previous survey in all three main tonnage categories. In the tanker market, 32% of respondents anticipated improved rates, as opposed to 25% last time, while the number anticipating lower tanker rates fell from 28% to 16%. Meanwhile, there was a 14 percentage-point rise, to 58%, in the numbers anticipating higher rates in the dry bulk sector, the highest figure for three years.

In the container ship sector, the numbers expecting higher rates rose from 31% to 46%, while there was a six percentage-point fall, to 12%, in those anticipating lower container ship rates. Net sentiment was up in the tanker market from -3 in February 2017 to +16 this time, while the increases in the dry bulk and container ship trades respectively were from +33 to +50 and from +13 to +34.

In a stand-alone question, respondents were asked to estimate the level they expected the Baltic Dry Index (BDI) to be at in 12 months’ time. More than half (52%) felt the BDI would reach a level of between 1000 and 1499, while a quarter (25%) put the likely figure at between 1500 and 1999. “Healthy volumes of cargo are being moved,” said one respondent, “but there are too many ships around.”

Richard Greiner, Moore Stephens Partner, Shipping & Transport, says, “The survey was launched in 2008, on the very cusp of one of the most protracted and severe global economic downturns, with a confidence rating of 6.8. In our latest survey, the figure stands at 6.1 which, given geopolitical, economic and industry developments, must be seen as a robust rating. Moreover, confidence today of making a major new investment is the highest it has been for almost three years. The positive sentiment on freight rates is welcome, although this must be weighed against the lows to which they have fallen and from which they must continue to recover.

“Even for an industry which is familiar with the volatile nature of international commerce, shipping’s ability to survive adversity is worthy of comment. Our latest survey found many of our respondents in watchful mode, mindful of the fact that there are still too many ships, but encouraged to believe that increased demolition and more pragmatism by industry stakeholders will help to redress this imbalance. Respondents also remain cognisant of the impact which geopolitical developments can have on shipping, and it will be instructive to see what effect all this will have on industry confidence in our next quarterly survey.”

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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Thursday, 1 June 2017

Liberian Registry wins Maritime Services Award for electronic oil record book

LISCR, the US-based manager of the Liberian Registry, has won the Lloyd’s List Maritime Services Award 2017 for the innovative electronic oil record book (ε-ORB), which is now accepted for use on board Liberian-flag ships.

The ε-ORB, launched in 2016, is a Lloyd’s Register-certified maritime software application which has gained wide support in the shipping industry. It has been developed with the intention of enhancing onboard efficiency by ensuring compliance with MARPOL in relation to paper Oil Record Books.

The ε-ORB has been designed to replace the traditional paper Oil Record Book and to establish software transparency, credibility and traceability. It addresses a variety of issues, including ORBs 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, “Liberia is actively planning for the wider dissemination of the IMO-compliant ε-ORB throughout its fleet, with the knowledge of a variety of international organisations, including the IMO, US Coast Guard, Australian Maritime Safety Authority (AMSA), the European Maritime Safety Agency (EMSA), Paris MOU, Oil Companies International Marine Forum (OCIMF) and numerous other flag states, including Germany, Malta, Luxembourg, Japan and Denmark, each of which has provided extremely positive feedback.”

Liberia has published a marine notice providing guidance on the use of the ε-ORB, and issues a MARPOL Electronic Record Book Declaration which must be carried on board as proof that vessels have the necessary flag approval to use the ε-ORB. A transitional period running for one year from 1 January, 2017 will facilitate inspection by Port State Control authorities which may not be fully familiar with electronic oil record books. The ε-ORB can also be utilized as a training tool.

Christian Mollitor says, “The Liberian Registry believes in implementing innovative technology in all areas of its operations. The ε-ORB is widely accepted by major Port State Control authorities throughout the world, and more than 120 shipowners and operators are already benefiting from its onboard application.”

The Liberian Registry is 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 and innovative 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. www.liscr.com

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