Moore Stephens says shipping will find ways to ride out protracted downturn

International accountant and shipping adviser Moore Stephens says the shipping industry will use a mixture of experience and innovation to navigate what is likely to be another volatile year for the industry in 2017.

Richard Greiner, Moore Stephens Partner, Shipping & Transport, says, “Making predictions about the shipping industry is as volatile an undertaking as the business of shipping itself. Who, for example, predicted that the Baltic Exchange would be sold to Singapore? The same people, presumably, who foretold that Donald Trump would be elected president of the United States, that Britain would vote to leave the European Union, and that Leicester City would win the English Premier League. Yet it all happened in 2016.

“Predicting shipping’s fortunes in 2017 is as precise a science as foretelling the English weather. But some things are at least more likely to happen than not. Oil prices should continue on an upward trend on the strength of the recent OPEC production cuts. Calls for higher levels of ship demolition will increase significantly, although not ship demolition itself. The cost of meeting regulatory requirements will become clearer as the industry and its financiers grapple with the financial consequences of having to burn lower-sulphur bunker fuel whilst ensuring that their ballast water management systems are fit-for-purpose.

“In common with other industries, shipping will be waiting to see whether Brexit really does mean Brexit. Orders will be placed for new ships. If they are not, a number of shipyards will go to the wall. For many, freight rates will continue to struggle to reach the levels required to ensure commercial viability, while consolidation will remain the buzzword in the liner trades.

“If operating costs do not increase, concern will spread about whether quality and safety are being sacrificed. Both traditional and innovative sources of funding will remain accessible to those with sound business plans. And cyber security will move nearer the top of shipping’s list of things to address.

“Confidence in shipping increased steadily for most of 2016, underlining just how robust the industry can be in difficult times. The inherent volatility of the industry will continue throughout 2017, during which time shipping will resort to tried and trusted methods and to fresh innovation alike in an effort to keep its head above water. Shipping will find a way.

“Things that will not happen in 2017 include another major fall in oil prices, and a big increase in hull insurance rates. Leicester City will not win the Premier League.”

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

Moore Stephens says shipping must adopt can-do attitude in 2015

International accountant and shipping adviser Moore Stephens says shipping needs to adopt a can-do attitude in order to successfully meet the challenges which are likely to come its way in 2015.

Moore Stephens shipping partner Richard Greiner says, “Shipping confidence started 2014 on a six-year high and ended it on a two-year low. It is difficult to predict with any certainty what the next 12 months will bring, beyond further uncertainty. To paraphrase an old adage, shipping goes into 2015 needing to accept the things it cannot change, to change the things it can change, and to make sure it understands the difference between the two.

“Top of the list of things which shipping cannot change is the relentless march of regulation. In 2015 this will assume still more onerous proportions with the inception of new regulations governing Emissions Control Areas, and a further step towards ratification of the BWT Convention.

“Overtonnaging, meanwhile, is top of the list of things which shipping can change. Accelerated scrapping is needed, together with an acknowledgement that there are already too many ships on the market and that, absent some form of rationalisation, freight rates will not pay the bills.

“One area where shipping can demonstrate that it knows the difference between what it can and cannot change is in its attitude to private equity. Does private equity not know what the rest of us know, or does it know something the rest of us do not? Rather than bemoaning the short-term commitment of private equity, shipping should be looking to tick the boxes which attract such investors.”

“Operating costs will go up in 2015, along with the cost of regulation, while it would be no surprise if oil prices were to go up faster than freight rates over the course of the year. Environmentalists will be happier with shipping. There will be increased interest in risk management, without which there will be still more newbuilding disputes of the type currently sitting on the desks of arbitrators, and more companies following the unhappy route into bankruptcy taken at the end of last year by OW Bunker.”

Greiner concludes, “Shipping embarks on a new year with confidence in a fragile state. The industry is volatile, and will be looking for improved political stability and a stronger global economy. But it should not underestimate its proven ability to endure throughout crises. The biggest danger may lie not in setting the targets too high and falling short, but in setting the targets too low and achieving them.”

Moore Stephens LLP is noted for a number of industry specialisations and is widely acknowledged as a leading shipping and insurance adviser. Moore Stephens LLP is a member firm of Moore Stephens International Limited, one of the world's leading accounting and consulting associations, with 667 offices of independent member firms in 105 countries, employing 27,081 people and generating revenues in 2013 of $2.7 billion. www.moorestephens.co.uk


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

Bureau Veritas says it is time for a new meaning of efficiency

LEADING international classification society Bureau Veritas says continuing pressure on environmental emissions, coupled with rising oil prices, puts a new focus on operational efficiency.

Writing in the Bureau Veritas Marine Business Review 2011 Bernard Anne, managing director of BV’s Marine Division says, “Efficiency has to take on a new meaning. To be efficient means more than optimising a ship to burn less fuel when loaded and at its design service speed. It must burn less fuel and cleaner fuel across a wide range of loading conditions and a wide range of speeds.

“To be efficient means more than saving fuel, it means burning the right fuel in the right place, making a pathway for the use of gas, nuclear and fuel cell solutions. To be efficient means operating the ship in the optimum way for every environmental condition, and that means having crew with the right training, the right support and the right feedback on operating conditions to make the right judgements. And to be efficient above all means operating without incident, without pollution, without breakdown, and without loss of life.

“Class can help with that quest for new levels of efficiency. We can facilitate and act as a catalyst at every level, measuring what happens now, predicting what effect changes will have, injecting knowledge and technical expertise and sharing development with academics and industry. And we can verify the outcomes, making sure they are safe. It is easy to build an underpowered, slow and fuel-efficient ship, but much more difficult to build a safe and fuel-efficient ship. And that is the role of class, at its most basic - to keep thing safe. We are there.”

Looking back over the previous year’s performance, Anne said, “We invested heavily in Arctic and offshore research and development to ensure that the best tools and experienced people were right there with the offshore operators and developers, helping them quantify and control risks, finding the optimum solutions that meet all the definitions of efficiency. Not the fastest, not the easiest, but the best and safest way to do things. That’s what we delivered in 2010.”

During 2010, BV’s classed fleet grew strongly to over 9,400 ships. “Our newbuilding order book doubled on the new orders from the year before. And we were entrusted with key contracts in the offshore field, such as the verification of the northern Norway Goliat FPSO and field, including all subsea systems. Our investment in research and development and links with key universities grew strongly, as we aligned the interests of academics, industry and class to work towards new and more efficient ways to do things at sea and in offshore energy,” continued Anne.

Key points from the Marine Business review include:

During 2010, BV’s classed fleet grew to a record 9,493 vessels totalling over 76.46m gt. The growth came from a large number of newbuildings and also a substantial transfer-in of ships in service. The ships in service being moved to BV class were of a low average age, which brought down the average age of the fleet once more.

Newbuilding orders entrusted to BV class doubled on 2009 to 9.5m gt, with a healthy presence in every ship type, every shipbuilding country and with every significant cluster of owners.

BV published new Rules for Offshore Floating Gas Units and saw several major FLNG projects come to fruition with BV assistance.

BV updated its AIMS asset integrity management system and delivered the first integrated AIMS plan covering topsides and hull with risk-based inspection and maintenance, on the FPSO Pazflor.

BV published guidance on Risk-Based Verification and Classification of Offshore Units and won a major third party verification contract from ENI Norway for the development of the Goliat field off northern Norway. The verification covers an innovative FPSO design, subsea systems and risers and electrification.

A Green Rating system based on BV’s experience in rating energy-efficient buildings adapted for shipping was published to help owners and charterers rate and manage the energy efficiency of ships.

The first MLC certificate was issued to a Greek owner, preparing the way for implementation of the MLC2006 maritime labour convention.

BV published new Polar Rules and guidance on ice structure interaction. The rules cover vessels able to operate without icebreaker assistance in the high Arctic and Caspian Sea and are intended to speed oil and gas development. A new ice loading and structural interaction tool, IceSTAR, was developed with St Petersburg University.

Guidelines for Offshore Floating Wind Turbines were developed and published and BV invested in a number of renewable energy development projects.

Guidelines for Ultra Large Containerships were devised and published, and BV took leadership of key projects investigating whipping and springing in very large open ship structures.

BV published rules on the classification of mooring systems for offshore structures, and its consultancy arm Tecnitas won contracts to design anchors and moorings for deepwater offshore units.

BV worked on projects to bring gas fuel for ships into reality, and on a specific project to help cruise vessels use LNG in ports.


Work began on developing a nuclear-powered bulk carrier.

The Marine Business Review contains a sector-by-sector breakdown of the activities of the Bureau Veritas Marine Division for 2010, and a look ahead to future developments. For a PDF or print copy please e mail chris@merlinco.com

Bureau Veritas is a leading international service provider, dedicated to quality assurance, environmental, health, and safety, (QEHS) management services across a wide range of economic activities, including marine, industry and facilities, government services, and consumer products. By far the largest classification and certification society in the world, Bureau Veritas has over 48,000 employees and 900 offices in over 140 countries throughout the world.

http://www.bureauveritas.comfor corporate information, http://www.veritas.comfor marine information.


For more information: Philippe Boisson Bureau Veritas +33 1 55 24 71 98 mailto:philippe.boisson@bureauveritas.com