Survey reveals higher confidence

Overall confidence levels in the shipping industry have risen to their highest levels for fifteen months, according to the latest Shipping Confidence survey by Maritime London member Moore Stephens.

The survey revealed that owners, managers and charterers were all more confident of making a major investment over the next twelve months, while there was a noticeable rise in the numbers of respondents expecting to see an increase in freight rates in the tanker and container ship sectors. However tanker charterers were the only group where over half of respondents expected to see higher rates.

Moore Stephens shipping partner, Richard Greiner, says, “The increase in confidence in shipping markets worldwide is excellent news for everybody in the maritime sector. The hope is that the industry can build on this and start to put the past eighteen months behind it. When more people are starting to think about making new investments, as this survey suggests, that is a sure sign that things are beginning to improve. And there is reason to believe that those companies which have viable expansion plans will find that the banks and others will be willing to listen.

“Of course serious concerns persist about the business climate for the international shipping industry. Being optimistic about rate increases is not the same thing as rates actually going up, but it is a start. Confidence breeds more confidence, which in turn can breed success.”

The London-based shipping accountant says that a number of responses to the survey exhibited continued confidence in shipping’s ability to bounce back in line with the traditionally cyclical nature of the markets, pointing to significant growth trends in emerging Asian, Indian and African markets as a springboard for recovery elsewhere, principally in Europe and North America. Nevertheless many respondents still exhibited a high level of concern about the state of shipping and the economy in general.

One noted, “There are too many ships trading, too many ships delivering, and too many owners stumbling blind into delicate markets, upsetting the fragile status quo that had previously existed”.

Another emphasised, “The situation is very unsure. There is too much tonnage and too little finance”.

One respondent, meanwhile, predicted a slump in the appetite for pure shipowning, pointing out, “More and more vessels will be put out for third party management.” One respondent said, “The low rates in the market are putting a lot of pressure on owners, some of whom are trying to cancel new tonnage. There are also other casualties involving shipping companies (i.e. Chapter 11 or liquidation).

Neither have the banks yet disclosed the full extent of the losses under their shipping portfolios”.

There was also concern on the part of some respondents that it will be the smaller companies that suffer most as a recovery gets under way. One noted, “The next eighteen months will be the time for people with money. The shipping world will look very different after that. Huge companies will merge, and smaller companies will disappear, making it impossible for newcomers to get started.”

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Mark Charman

Global shipping recruiter, and Maritime London member, Faststream has added to the more optimistic sentiment now emerging in the shipping sector. In its its latest maritime employment review, focusing on the market for technical shipping people, it reports a significant improvement in the first quarter of 2010 with greater confidence from both candidates and employers.

The company’s survey of candidates placed in a wide range of technical roles for shipping companies, oil majors, flag states, classification societies and consultancies shows that salaries have remained steady and that experienced and well-qualified candidates remain hot property. Faststream is managing to place candidates more quickly than before, in an average of 9 weeks, down from 11 weeks in 2009.

Faststream group ceo Mark Charman says: “We have seen confidence return to the market and more than just the first green shoots of spring emerging. We may not be basking in hot sunshine yet, but the worst of the bleak frozen winter is certainly behind us. The more positive feeling in the general economy and in particular the ending of the sense of panic that was so prevalent in 2008/09 has led both companies and candidates to come out of their shells and to begin sniffing around for new opportunities.”

Mr Charman says that there is a backlog of people who have been dissatisfied with their current job for some time, but put plans on hold during the uncertainty of the financial crisis.

He notes: “Whether it is pay, future prospects or office politics, people who last year felt that on balance a secure job was better than an insecure job, are now beginning to contact us. We have seen this confidence expressed in a surge of CVs submitted to us, hits on our website and quiet chats with our recruiters. The number of new candidates on our books in Q1 2010 is up 26% versus Q1 2009 and the number of unique visitors to our site is up nearly 20% from 68,000 in Q1 2009 to 81,000 in Q2 2010.”

There are however variations around the world . The company says that Danish and German employers are not hiring nearly as many candidates as their rivals in Norway, UK and the Netherlands. The Singapore market is performing particularly strongly, with a particular emphasis on offshore roles. New dry bulk and tanker operators are springing up across the Asia-Pacific region and all need experienced and technically competent staff.

Interestingly Indian ship managers are calling on Faststream to find them Indian technical managers.

For UK employers, however, there is a downside. With the British pound so weak in comparison to the euro, they are struggling to compete with Eurozone-based employers to attract foreign talent. Stringent and often expensive US and UK visa requirements are making the hiring of non-US/EU citizens increasingly onerous.

Faststream also says it is also seeing a level playing field in terms of salaries offered to technical superintendents, whatever their nationality or location.

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Promoting UK international maritime service companies

The deadline for advertising in the UK Maritime Services directory closes 15 April.

Published on behalf of Maritime London by Navigate PR, the directory will include the contact details of over 1500 companies active in the UK’s international maritime services sector. The directory will be distributed at Posidonia 2010 as well as via Maritime London promotional trips including events in Shanghai this September.

Companies which have already confirmed advertising include:

ABS, Andrew Weir Shipping, Beluga Projects (UK), Bentleys Stokes and Lowless, Brodies, Burness Corlett Three Quays, Clarkson Research Services, Coracle Online, Cyprus High Commission, Holman Fenwick Willan, Ince & Co, Insurance Premium Finance, International Registries, Jensen Associates, Kite Warren & Wilson, LA Marine, Liverpool JMU, Maquarie Bank International, METL, Norton Rose, Shipping Podcasts, Spinnaker Consulting, Honourable Company of Master Mariners, The Nautical Institute, Theisen Securities, TLT, Warsash Maritime Academy, Wavespec.

For further details, including rates, see www.maritimelondon.com/media_pack2010.pdf or contact Will Bixby ASAP.

Tel: +44 (0)20 73769 1650 or email: wbixby@navigatepr.com

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Maritime London is delighted to welcome shipbroker ICAP Shipping in to membership.

For a full list of Maritime London members see www.maritimelondon.com/ml_members.htm

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The UK Chamber of Shipping's new president, Jan Kopernicki, says his main goal throughout his term of office would be to increase government and industry understanding of shipping's importance to the UK economy and to the critical needs of the country.

Mr Kopernicki was invested as president on Thursday 25 March. He is a member of the Shell Trading Executive Committee and a director of Shell International Trading and Shipping Company. Michael Parker, chairman of the UK holding company for CMA CGM and its UK subsidiary MacAndrews & Co, has been appointed vice-president.

In a keynote address after being elected Mr Kopernicki began by pointing out that 2010, as the IMO Year of the Seafarer, was a special year for global shipping and a year to recognise the incalculable debt the industry, governments and consumers all owe to seafarers everywhere.

He identified three “key dimensions” which he would be focusing on; security, trade and the environment. He commented that trade security “is under threat in many places. Piracy is a long-running sore in Somalia, and growing off the West coast of Africa. Resolving this challenge depends heavily on collaboration – by governments, national and international organisations, industry and the military.”

“Today, this nation is still pre-eminent in maritime services – including shipping finance, insurance, brokerage, law and shipping itself,” he pointed out. “There is competition from other centres, but London remains the final point of reference in most maritime matters. I see the Chamber of Shipping playing a vital role in helping to maintain that pre-eminence, by engaging on today's issues. Especially, we must focus on ensuring that the tax regime and the employment regime, support the needs of the industry and its workers.”

He also acknowledged that while shipping is the most carbon-friendly means of transporting the world’s trade, new solutions to current environmental issues facing the industry were urgently needed. Coming from the energy industry, he added that he was extremely conscious of the global challenges posed by carbon and other emissions, and said that the Chambers’ ongoing commitment to positive action on carbon – specifically a trading system that puts a value on carbon – would be a top priority for 2010.

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The Azura undergoing sea trials

The 115,055 gt cruise vessel Azura has been flagged the UK following its delivery to Carnival UK for operation as the joint largest ship in the P&O Cruises fleet, along with sister ship Ventura, and the joint second largest ship in the Carnival fleet behind Queen Mary 2.

The Azura arrives in Southampton, Ocean Cruise Terminal on Wednesday, 7 April, and will leave on her maiden voyage on Monday 12 April. The official naming ceremony will be on Saturday evening, accompanied by a fireworks display which the general public can view from Mayflower Park.

The superliner will be used in the UK market and is 250m long with accommodation for 3,100 passengers and 1,200 crew. She was built by Fincantieri Shipyard of Italy who has delivered 49 ships for the Carnival Group in the past 20 years.

Carnival now has seven ships registered with the UK Ship Register with a combined gross tonnage of just over 600,000 gt. As at the end of March 2010 the UK Ship Register comprised1,548 ships with a gross tonnage of just under 17m.

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Transport and logistics industry insurance mutual TT Club has issued its updated guide to the International Maritime Dangerous Goods Code’s (IMDG Code - amendment 34) classification of dangerous goods.

“The importance of compliance in the handling of packaged dangerous goods for international transit can’t be over-emphasised,” states Peregrine Storrs-Fox, TT Club’s risk management director. “As specialist providers of liability cover to the global logistics sector, TT Club continually seeks to inform and advise operators on how best to manage their risks, minimise accidents and reduce claims. Adherence throughout the supply chain to the IMDG Code is of a high priority in achieving these aims”.

This latest guide, jointly produced by TT Club and ICHCA International, provides a quick reference to the marking and summary documentary requirements based on Amendment 34-08 of the IMDG Code, which became mandatory on 1 January 2010.

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The International Transport Intermediaries Club (ITIC) says it has paid out on a claim for money stolen from the safe on board a ship managed by one of its members after the ship had been boarded by Somali pirates.

In the latest issue of its Claims Review, ITIC reports that, after the pirates had boarded the ship, they opened fire on the accommodation block and entered the bridge. Once under the control of the pirates, the ship was forced to alter course for Somalia, where it was detained by the pirates for some months before being released. Before releasing the ship, the pirates stole a number of items from it, including a cash box located in a safe kept in the master’s cabin. The cash box included the sum of USD15,000 which had been placed on board by the ship manager.

Because the manager had taken out ‘cash on board’ insurance, the stolen money was duly reimbursed in full to the ship manager by ITIC.

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Amendments to UK law will soon bring into force an in-berth sulphur cap of 0.1%, as British legislation is brought into line with European Union law although no move has yet been made to comply with new lower IMO limits coming into force in the North Sea and Baltic Emissions Control Areas in July.

International Bunker Industry Association (IBIA) has emphasised that, with effect from April 20, 2010, EU regulations on the sulphur content of fuel used by ships at berth in EU ports become law in the UK, and ships failing to comply will face the risk of prosecution.

IBIA chief executive Ian Adams says, “It is essential that ships operating in UK waters are in full compliance with the new regulations. As already emphasised, ships are not exempt on the ground that the fuel changeover is unsafe because modifications have not been made to their boilers, or to the ship itself. All non-compliant ships are at risk."

He adds: “The new regulations, which make no reference to the new lower sulphur limit for ECAs of one per cent which comes into effect on 1 July, 2010, are a good illustration of how domestic implementing legislation often lags behind the decisions of international organisations.”

But Mr Adams added: “Regardless of what is on the UK statute book on 1 July, ships should comply with the ECA limit. Other administrations within the ECA may well enforce the the lower limit as soon as it comes into effect.”

He explains that the UK Merchant Shipping (Prevention of Air Pollution from Ships) (Amendment) Regulations 2010 essentially implement, in the UK, EU Directive 2005/33/EC, which requires that member states must take all necessary steps to ensure that ships at berth in their ports do not use marine fuels with a sulphur content exceeding 0.1% by mass. The new regulations amend the Merchant Shipping (Prevention of Air Pollution from Ships) Regulations 2008 and implement the marine fuel elements of the EU Sulphur Content of Liquid Fuels (SCLF) Directive.

In addition to the requirements under MARPOL Annex VI, the new regulations embrace the following requirements: all passenger ships on regular services between EU ports must use fuels with a sulphur content not exceeding 1.5% by mass; a 0.1% sulphur limit on fuel used by inland waterway vessels and by seagoing ships at berth in EU ports; a ban on the marketing of marine diesel oils with a sulphur content exceeding 1.5% by mass and a ban on the marketing of marine gas oils with a sulphur content exceeding 0.1% by mass.

There is provision, however, within the UK law to use approved abatement technology which has at least the same effect in reducing emissions as using the specified low sulphur fuels.

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Citigroup, a US bank that already trades a significant proportion of freight derivatives from its London dealing room, has announced that it is set to develop its physical shipping operations with the appointment of former shipbroker Alistair McLuskie, previously a director with Simpson, Spence & Young.

Citigroup will be one of a number of major banks which has expanded its operations into the physical shipping markets in recent years. Morgan Stanley owns a significant stake in Heidmar Inc., a Connecticut, London and Singapore based tanker operator. J. Aron & Co., Goldman Sachs's commodities trading division, began chartering vessels last year after it bought Constellation Energy Group whilst Barclays Capital has a shipping division to support its physical oil trading operations.

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The Annual Dinner of the Association of Average Adjusters takes place on Thursday 13 May at the Sheraton Hotel, Park Lane, London. The dinner will be preceded by an AGM at the Lloyd’s Old Library at which the chairman Mr Justice Tomlinson will deliver an address entitled "Underwriters decline notice of abandonment - some new questions raised by an old phrase."

For further details please contact Willem van der Pol.
E: wvanderpol@balticexchange.com

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