Liberian Registry cements position on Paris MoU and Tokyo MoU White Lists

The Liberian Registry has once again been included on the White List of low-risk flags in the 2018 Annual Report of the Paris Memorandum of Understanding (MoU) on Port State Control, covering the European region. It has been white-listed by the Paris MoU now for almost 20 years. Liberia was also recently included on the White List of another leading Port State Control performance indicator, the Tokyo MoU, which covers the Asia-Pacific region, as well as on the United States Coast Guard’s QUALSHIP 21 roster.

White List inclusion donates a quality flag with a consistently low detention record, and Liberia has been on the Paris and Tokyo MoU White Lists since their inception in 1999 and 2002 respectively. Alfonso Castillero, Chief Operating Officer of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, says, “Thanks to Liberia’s highly trained global staff, as well as its proactive, automated Detention Prevention system, action is taken on a daily basis to help owners and operators manage their fleets safely and efficiently, intervening when necessary to help resolve issues before they can become points of contention upon arrival in port.

“Liberia’s unwavering White List status not only proves that these efforts make a difference, but is also testament to Liberia’s quality clients, who put in the same level of effort in order to meet these exacting standards. Any flag, such as Liberia, which consistently qualifies for inclusion on PSC White Lists while increasing its tonnage to record levels must clearly be meeting the expectations of owners and managers in terms of both safety and commercial efficiency.”

The Liberian Registry 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

Concern over trade wars impacts shipping confidence

Confidence in the shipping industry has fallen marginally over the past three months, largely as a result of ongoing concern over trade wars and increased regulation, according to the latest Shipping Confidence Survey from leading shipping adviser and accountant BDO.

The average confidence level in the three months to May 2019 was 6.1 out of a possible maximum of 10.0. This is slightly down on the figure of 6.2 recorded in February 2019.

Confidence was up in Asia, from 5.8 to 6.0, and in North America, from 5.6 to 6.4. In Europe, meanwhile, there was a drop in overall confidence levels from 6.3 to 6.1.

The chartering sector continues to be the most volatile in terms of respondent confidence, with ratings varying between 4.7 and 7.7 during the past two years. This time, the confidence level was up to 6.2 from 6.0 three months ago. The ratings for owners and managers, meanwhile, were unchanged at 6.3 and 5.8 respectively, while the rating for brokers was down from 5.9 to 5.7.

The survey was launched in May 2008 with an overall rating for all respondents of 6.8 out of 10.0.

According to the BDO quarterly survey, the likelihood of respondents making a major investment or significant development over the coming year was up from 5.3 to 5.4 out of 10.0. Owners’ confidence in this regard was up from 5.4 to 6.3, while the rating for charterers was 5.6 compared to the survey high of 7.3 recorded last time. The confidence of managers and brokers in this category was also down, from 5.6 to 4.8 and from 4.9 to 3.9 respectively. Expectations were up in Asia, from 5.2 to 5.5, and in Europe, from 5.3 to 5.4.

The number of respondents who expected finance costs to increase over the coming year was unchanged at 48%. The figures for owners and brokers were down, but up in the case of charterers and managers.

Demand trends were cited by 26% of respondents as the factor most likely to influence performance over the next 12 months. Competition (19%) and finance costs (13%) featured in second and third place respectively in this context.

The number of respondents expecting higher freight rates over the next 12 months in the tanker market was up by 4 percentage points on the previous survey to 55%, with charterers (75%) leading the way. In the dry bulk sector, expectations of rate increases were down overall from 52% to 48%, with charterers the only category recording an increase in expectation levels. The numbers expecting higher container ship rates, meanwhile, rose by 9 percentage points to 35%. Net rate sentiment was positive in all three tonnage categories and noticeably improved on the last quarter for container ships.

When asked to estimate the level they expected the Baltic Dry Index (BDI) to reach in 12 months’ time, 50% of respondents (compared to 36 % 12 months ago) anticipated a figure of between 1000 and 1499, while 22% (42% last time) put the likely level at between 1500 and 1999. “One could be more bullish about the BDI if there was less global tension around,” said one respondent.

Richard Greiner, Partner, Shipping & Transport at BDO, says, “A small dip in confidence is not surprising given the recent volatility generated by the US-China trade wars, the heightened tension in the Arabian Gulf, the failure to conclude Brexit negotiations, and general political instability in many parts of the world. Markets love volatility, but it can have an adverse effect on confidence.

“Trade wars certainly formed the over-arching theme for this quarter, but they are not the only recurring topic. The cost and technical implications of complying with existing and incipient regulation was referenced on a number of occasions, typified by the respondent who noted that the high level of regulation “makes it extremely difficult to make a profit”.

“Despite the challenges the industry is facing, there are a number of positive indicators. New technology is making shipping more attractive to investors, and will moreover act as a trigger to accelerate the pace and extent of recycling. Higher freight rates should logically follow, and those who hold their nerve will ultimately benefit.”

The BDO (formerly Moore Stephens LLP) Shipping & Transport team has extensive experience delivering accountancy, tax and advisory services to the sector worldwide.

BDO delivers key information and insights to the shipping community, including the annual OpCost report, the quarterly Shipping Confidence Survey and a host of thought leadership on topical issues, such as regulatory developments and market conditions.

https://www.bdo.co.uk/en-gb/industries/shipping-and-transport


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London P&I Club’s capital position remains strong despite heavy cost of claims

THE London P&I Club has issued an advance summary of its result for the 2018/2019 financial year, ahead of the publication of its annual report.

With free reserves of $168.8m, the club’s capital position remains strong, despite an overall deficit for the financial year of $25.8m. Net earned premiums increased by 3.3% but there was an increase in the cost of claims, which included two International Group Pool claims involving the club’s members as well as increased activity on the pooling system generally and a rise in the cost of the club’s retained claims.

The growth in claims activity came during a period when premium rates remained under intense pressure and, as a result, the combined ratio increased to 140.1%. The club’s investment portfolio, however, did produce a return of 3.0%, or $8.2m.

Ian Gooch, CEO of the club’s management team, says, “The 2018/2019 financial year was an extremely challenging one for the P& I sector generally. On a positive note, the London Club continues to see strong levels of support from new as well as existing members and assureds and, following the February 2019 renewal, its combined entered tonnage increased to over 60m gt. This reflected year-on-year tonnage growth of more than 7% in the mutual membership and further positive progress in the club’s fixed premium lines of business.”

www.londonpandi.com

LISCR appoints Humera Ahmed as VP of Legal and Business Development

F Humera Ahmed has been appointed Vice-President of Legal and Business Development of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry.

Mrs Ahmed brings to her new role at LISCR nine years of experience as an attorney at Blank Rome LLP where she focused on maritime transactions, finance issues and business development. She holds a law degree from the School of Law at Rutgers University in New Jersey.

LISCR’s Chief Operations Officer, Alfonso Castillero, says, “Humera is a very energetic, self-confident, knowledgeable and proactive person. Her enthusiastic personality and legal / shipping background will significantly benefit and strengthen the presence of LISCR in the New York and Connecticut markets.”

Before joining LISCR, Humera Ahmed helped clients to negotiate and structure transactions under US and foreign law, and regularly advised on vessel-secured financings, ship purchases and sales, maritime bankruptcies and restructurings, vessel charters and corporate governance for domestic and foreign companies.

She will be based in LISCR’s New York office, from where she can expand the LISCR global team and bring the Liberian Registry closer to the international legal community in general, and to the New York legal market in particular.

Humera Ahmed says, “I am thrilled to be joining the Liberian Registry, which has consistently been one of the most reputable ship and corporate registries in the world for more than 70 years. I also welcome the opportunity to work with the legal community, both internationally and domestically, and to help ensure that the Liberian Registry continues to provide first-class expertise to the wide variety of stakeholders who rely on its services.”

The Liberian Registry 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

Failure to incorporate terms and conditions could find shipping out of its depth

International Transport Intermediaries Club (ITIC) has warned its members of the need to incorporate terms and conditions into their business dealings in order to limit their potential exposure to liability.

ITIC cites the case of the agent at a discharge port who advised a shipper with cargo on board an inbound vessel that that the maximum draft was 40ft. Since the vessel’s draft was just under 41ft, it made an interim call to unload some cargo.

The agent subsequently received a claim from the shipper alleging that the
information it had provided was incorrect, and that vessels with drafts in excess of 40ft could still call at the port, but with two pilots on board, rather than one. The shipper argued that the agent should have been aware of this, and claimed $250,000 in respect of the costs of the wasted call and transporting the excess cargo.

The agent could not find the relevant provision relating to vessel draft on the website of the local pilots’ association, but was subsequently advised by the shipper that there was a link on the agent’s own website to an article explaining that vessels over 40ft could call at the port, providing there were two pilots on board. The agent contacted the local pilots’ association who confirmed that it was possible to call with a draft of 41ft and that the information was on its website, albeit not easy to find.

The agent had incorporated standard trading conditions which limited its liability to ten times its agency fee. This amounted to $36,500, which sum was accepted by the shipper and reimbursed to the agent by ITIC.

ITIC says the claim demonstrates the importance of businesses incorporating their terms and conditions into all their business dealings. ITIC’s terms and conditions, and guidelines for incorporating them, can be accessed at: https://www.itic-insure.com/knowledge/standard-trading-conditions/

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
ITIC
Tel. +44 (0)20 7338 0150
charlotte.kirk@thomasmiller.com