Maritime London member Moore Stephens' latest Shipping Confidence Survey shows that confidence levels in the shipping industry have declined by more than 20% over the past twelve months. The London-based international shipping accountant says its survey show some owners think things could soon start to improve.

One year on from the first Moore Stephens survey, the average confidence level expressed by respondents, on a scale of 1 to 10, was 5.4, compared to 6.8 in the initial survey in February 2008. In the last four months, the average confidence level declined from 5.6 to 5.4, and was most significantly down amongst owners and managers, with the level falling to 5.4 in each category from previous levels of 5.8 and 6.0 respectively.

One year ago, owners and managers recorded confidence levels of 7.1 and 7.2 respectively. Encouragingly a number of respondents felt that things were likely to improve over the coming twelve months and beyond, despite the drop in average confidence levels.

Comments ranged from, “As owners we have already touched the bottom, and I don’t believe we can go any lower”, to “We are quite confident that there will continue to be good business opportunities in the months ahead, and perhaps this is a good time to enter the market from the point of view of investment.” Other comments included, “In twelve months’ time, the market will have factored in most of the bad news and market confidence will start to return, led by the US, Europe and Asia”, and “Shipping will start an upward trend in the third quarter”.

The survey also confirmed that there are winners in every downturn. One respondent observed that, “Given what is happening with some Chinese yards at present, it would be no surprise to find that some builders may become owners and start operating the vessels they build”.

Another observed, “We expect some real opportunities in terms of low-price, quality vessels”, while yet another said, “Cash-rich buyers will be looking at the bargains of the millennium come the summer.”

Port of Singapore

Claims by a major P&I Club that Singapore's anchorages have become congested with laid up vessels has prompted a denial from the country's Maritime & Port Authority (MPA).

Port master Lee Cheng Wee is quoted by Lloyd's list as saying: “Over recent months, the utilisation rate of our anchorages has been fairly stable. In other words, our anchorages have not become more crowded as a result of the economic downturn. Concerns over increasing congestion are hence unfounded.”

The MPA is reportedly denying that Singapore's anchorages are used to lay up vessels although waiting times have increased. The American P&I Club issued an alert to its members on the danger which laid-up ships can present to ships navigating in the area.

According to an American Club statement its alert “affects vessels sailing through, or anchoring in, the territorial waters of Singapore, including the eastern and western outer port limit (OPL) anchorages, where there is a danger of collisions”. The club acknowledges the assistance of London Offshore Consultants in compiling the general observations on safety in anchorages.

It notes: “The congestion at Singapore has become a matter of considerable anecdotal comment – not least for those flying into Changi Airport on certain approaches who are best able to see the multitude of vessels anchored in the areas in question.”

It says: “Our very recent experience of certain, thankfully only small, collision claims, together with more general comments from other sources, point to an increased risk of collisions in this area where there has been a significant rise in the number of vessels lying at anchor.

“It would appear that the most recent spate of collisions has occurred at the eastern OPL anchorage, where a number of ships manoeuvring within the area have collided with vessels already at anchor.”

The strength and direction of local currents and unexpected weather changes involving thunderstorms etc. can make manoeuvring especially hazardous. While a vessel is at anchor, the club advises that a full anchor watch should be maintained at all times, with the vessel’s engines being kept in an appropriate state of readiness. It is also suggested that bridge watchkeeper(s) should not be distracted from their duties by other work at that time.

Intermodal mutual insurer TT Club has reported a deficit of US$5.3m for 2008, compared with a 2007 surplus of US$8.3m, saying that trading conditions in 2008 “have been by far the most challenging experienced in recent years”.

The club notes that premium rates declined due to soft insurance market conditions. Claims rose and drove up reinsurance costs. Operating expenses also increased due to the weakness of the US dollar against sterling in the first part of the year and as a result of certain exceptional items also incurred during the year.

The club says its investment return, excluding currency movements, was positive if slightly lower than 2007, thanks to the Club having adopted a conservative investment policy.

Ninety per cent of the Club’s assets were invested in highly rated government bonds and cash deposits and as a result the Club was not exposed to the effects of the severe downturn in the equity markets in the second half of the year and achieved an underlying investment return of 3.5%. Overall surplus and reserves “remain strong”, the club says, at $121.6 million, 4% down on the record level at the end of 2007. Solvency as measured by the Club’s capital resources as a percentage of the FSA’s Enhanced Capital Requirement (ECR) is 216%, which is an improvement on 2007.

TT Club’s chairman, Knud Pontoppidan said, “Our business remains well capitalised and our balance sheet is highly liquid, which is extremely important in the turbulent times which the Club and its Members are now encountering.”

Palm oil fraud

The ICC International Maritime Bureau (IMB) says it has identified a number of suspect shipments of hydrogenated palm oil emanating from Indonesia.

The containerised shipments all originate in Jakarta and are purportedly bound for China or the Philippines. Initial enquiries indicated that the containers were all loaded as stated, but it soon became apparent that the boxes in each consignment were destined for discharge at a variety of ports different from those specified in Bills of Lading.

IMB divisional director Michael Howlett commented: “These recent cases suggest that potential fraudsters are using an ever-increasing degree of market intelligence to carry out their activities. In these examples, it would appear that someone was actually watching to see which containers were loaded on board certain vessels before attempting to dupe unwitting financiers.”

As part of its investigation, the IMB found that the details as per the Bills of Lading were correct for the cargoes’ pre-carriage into a regional trade hub. But it then discovered that the containers diverged at this point. In one example, 55 containers on one B/L were found to have been despatched to at least 10 separate destinations. Of the 55, only 16 were being transported to the correct discharge port. The documents complied with the Letter of Credit inasmuch as the cargoes were loaded as stated on the Bills of Lading. However, as these documents were issued by an NVOCC, the Bureau undertook enquiries with the physical carrier and determined the different ports of discharge.

Mr Howlett continued: “It would appear that someone may have initially set up a Letter of Credit for a smaller shipment, then used this information and details about containers on the same vessel to set up a new transaction for a far larger cargo. It is important that banks and trading houses remain vigilant in the face of the growing sophistication of such scams, maintaining levels of due diligence against all documents, even those that on face value look genuine.”

The IMB recommends regular due diligence checks against all customers, old and new, and advises that independent verification be sought on the details of shipments, no matter how legitimate they initially appear.

Marine exhaust gas cleaning system makers have formed the Exhaust Gas Cleaning Systems Association (EGCSA) to provide a sustainable operating environment within the EGCSA's founder members are Aalborg Industries, Clean Marine, Krystallon, Marine Exhaust Solutions, and Wartsila.

A statement says that EGCSA will also include membership from companies in associated sectors that support technology solutions to reduce exhaust gas air pollution from ships. The association says it recognises that exhaust gas cleaning technology for the marine sector has recently been given regulatory approval from the International Maritime Organisation (IMO) and has been established to provide a rational voice for the now unified sector.

EGSCA says that it intends to work closely with the marine and energy industries and regulatory bodies, as well as governments, NGOs and environmental groups to create a standardised regulatory framework for the development of exhaust gas cleaning systems.

In addition, the newly-formed organisation plans provide a centre for technical information, impartial advise, opinion and information around the issues and challenges related to emissions reduction and exhaust gas cleaning systems. Exhaust gas cleaning systems for marine applications are typically scrubber systems to reduce sulphur oxide (SOx) and selective catalytic reduction (SCR) systems to reduce nitrogen oxide (NOx). Both SOx and NOx have been identified as pollutants to be targeted under IMO regulations to reduce harmful emissions from ship fuel. EGCSA will also highlight that other pollutants, not yet targeted by regulators such as Particulate Matter, can be greatly-reduced through exhaust gas cleaning technologies, while the association would also look to incorporate new and innovative exhaust gas cleaning systems as they develop.

EGCSA director Donald Gregory said: “Marine exhaust gas cleaning systems offer a viable, sustainable and cost-effective alternative to switching from High Sulphur bunker fuel to Low Sulphur bunker fuel and, eventually, distillate fuel. Given the anticipated demand of 22 million tonnes of distillates that is required in Europe alone by 2015 for the shipping sector, marine gas systems provide an invaluable resource to offset tight demand and higher fuel costs for both ship owners and operators.”

Mr Gregory, a former senior BP executive, continued: “Marine exhaust gas cleaning systems manufacturers must be, and are, willing to engage with the shipping industry to demonstrate and prove the reliability, availability and value of their technologies. They clearly have a major role to play in reducing harmful emissions, but it is vital that the market is presented with the right information as to the benefits that they provide and the progress that needs to be made to develop the technology accordingly.”

Hamburg based Germanischer Lloyd says that its take-over of London-based Noble Denton will lead to a fully integrated technical assurance and consulting company to serve the worldwide energy industries.

The new entity will provide assurance, inspection, and consulting as well as project management on a worldwide scale. It will focus its worldwide services along the entire life cycle oil and gas - upstream, midstream, and downstream, renewables and energy installations onshore and offshore. This includes safety, integrity, reliability and performance management.

"The merger is a reflection of the needs of our clients who increasingly face challenges in technology, environment and asset integrity. They are looking for partners who can provide a single source of engineering, consulting and project management services in the geographies in which they are based. This merger will ensure that we become the premier global business partner in oil and gas, renewables and energy supply markets," said Pekka Paasivaara, Germanischer Lloyd executive board member, at a press conference in London.

"Noble Denton is excited to be merging with GL. We share the same values of safety, integrity and technical excellence. This partnership brings benefits to our clients and employees alike. We are now able to provide an even more comprehensive service offering to our clients, with access to a greater number of technical experts and this will enable us to enter developing markets," said John Wishart, group managing director of Noble Denton.

Is doing the right thing at the bottom of a company’s list of priorities in a weak market? Classification society DNV’s London office will be hosting Navigate’s corporate social responsibility (CSR) conference for the shipping industry looking at the commercial viability of implementing a CSR policy.

The two day event (19-20 May) will be addressed by DNV chief executive Henrik Madsen and will look at how to generate a competitive advantage from implementing a CSR policy and what a shipping company can do to ensure its operations are environmentally and socially responsible.

Companies speaking at the event will include Maersk, PricewaterhouseCoopers, European Commission, XL Insurance, Rightship, International Registries, BMT Cordah and many more.

See www.navigateevents.com/CSR2009.html for full details.

Mark Jackson

Mark Jackson of AM Nomikos will serve as the next Baltic Exchange chairman when the present chairman Michael Drayton steps down in July. Paul Over of Hong Kong based Asian Maritime Pacific will serve as vice-chairman.

Commenting on his election, Mark Jackson said:

“The Baltic Exchange helps ensure the functioning of the global bulk freight markets through the production of independent freight market information, implementation of its code of conduct and practical advice to members. The world economy and shipping markets face difficult times and the Baltic Exchange will continue to lead industry wide efforts to meet these challenges.”

A shipping industry alliance comprising employers and unions last week presented new proposals for government action to boost the recruitment and employment of UK seafarers. A detailed submission made by Nautilus UK, the RMT and the Chamber of Shipping, calls for urgent action to improve the training support package to ensure that officers and ratings can progress to higher ranks.

The call comes two years after an earlier industry submission was made to the government. In the absence of a formal response to that package, unions and owners says they have given transport minister Geoff Hoon a new framework to deliver improved incentives for investment in UK seafarer training.

In a letter to the minister, industry partners stress the importance of maritime skills for the UK, and warn that despite increases in the officer trainee intake, overall officer numbers continue to decline and the average age of British officers and ratings 'continues to rise to unacceptable levels'.

The owners and unions stress the urgent need to ensure 'a sustainable flow of maritime skills and professional expertise into the wider £55bn turnover, shore-based maritime cluster'. Improvements in SMarT training support would help cut the cost differentials between UK and foreign seafarers, the submission argues, and would help to encourage individual officer and rating trainees to progress their careers through higher levels of learning and skills development, to the highest level they can achieve.

'We urge the government not to delay further,' the industry adds. 'Action now would both boost the maritime skills-set in this country and strengthen the perception of the government's commitment to a positive maritime policy in the face of the uncertainties which have surrounded it in recent years.'

Jesper Kjaedegaard, newly appointed as president of the UK Chamber of Shipping, has set out his priorities for action. He said that the Chamber’s and shipping industry’s priorities over the next year would be safety, recruitment, reducing carbon emissions and further improving the Chamber’s efficacy as a voice for the industry.

Highlighting both his commitment to ensuring safety remained at the top of the agenda for shipowners and the need for the regulatory environment to reward rather than penalize quality shipping, Mr Kjaedegaard said “there is a real risk that some ship-owners, operating in financial survival mode, may resort to spending short cuts which could compromise safety. In my view, this would be both madness and bad business.” He went on to say that while the number of young people training as merchant navy officers in the UK has increased over that past few years, further work was needed to make the employment of UK junior officers cost competitive before companies could recruit and train as many as they would wish.

Turning to carbon emissions, Mr Kjaedegaard made it clear that the Chamber’s bold position on emissions trading will be maintained, since trading was “the only option that offers the certainty of real, actual reductions in emissions”.

The Chamber will also focus on the need for international rather than regional regulation of the industry and the need for a strong voice for the European countries that have shipping industries within the EU. Elected as the Chamber’s first non-British president in its 131-year history, Mr Kjaedegaard has more than 30 years of experience with A P Moller and the Maersk Group.

Ian Gooch has been appointed chief executive of the London P&I Club’s Managers, Bilbrough, in succession to Paul Hinton, who has held the post since 2002. Mr Hinton will be remaining with the Company in a consultancy role.

Mr Gooch, a qualified barrister, joined the club’s management in 1991. He subsequently spent five years working in and then heading the company’s Greek office. Appointed a claims director in 2003, his more recent responsibilities have been for London Club members in other parts of Europe, the Far East and the USA.

He says, “I’m honoured to accept this exciting challenge. We have a committed and energetic team here, and we look forward to building on all of Paul’s good work. I’m also delighted to confirm that Paul will be remaining involved with us on a consultancy basis. His knowledge and experience will continue to play an important part in the further strengthening of the London Club.”

Steamship Mutual has launched a new DVD aimed at preventing collisions at sea and raising the awareness of watchkeeping officers of the obligations of section one of the Colregs.

A trailer for the film is available on the company’s website and features Sir David Steel (Admiralty Judge), Capt. Faz Peermohamed (Admiralty Partner, Ince & Co), Colin Williams and Chris Adams (Directors, SIMSL) and Capt. Leslie R Morris (Consultant, formerly of London Offshore Consultants and Conmar).

See www.simsl.com/CollisionCourse1108.html

An important part of Maritime London’s promotional role is ensuring that UK trade promotion bodies are fully aware of the depth and breadth of the UK’s maritime services sector. Maritime London chief executive met with UK Trade & Investment regional officers in Norwich last week and gave an presentation on the range of services available to the shipping community from the UK .

“UKTI is paying increasing attention to the British based maritime industries and are playing an important role in both helping companies sell their services overseas and attracting shipping companies to the UK,” said Maritime London chief executive Doug Barrow.