Merlin's Magic Media

Shipping provides reasons to be cheerful

noreply@blogger.com (Merlin Corporate Communications) — Thu, 02 Jan 2020 11:54:00 +0000

The shipping industry faces some very significant challenges over the coming years but has a number of reasons to be cheerful as it enters a new decade, according to accountancy and business advisory firm BDO.

Richard Greiner, Partner, Shipping & Transport at BDO, says, “Last year marked the 150th anniversary of the opening of the Suez Canal, which in many ways helped to revolutionise the conduct of global shipping markets. Now, on the cusp of a new decade, whilst there is nothing comparable in prospect, there are nevertheless a number of very important fundamental changes in the offing, and moreover a number of reasons to be optimistic about the fortunes of the industry over the coming decade.

“At the end of 2019, confidence in the industry was as high as it has been at any time in the past six years. Despite a general slowdown in global GDP, demand for the industry’s services remains strong, while a contraction in the number of newbuildings on order and a steady stream of recycling has brought supply under stricter control. If supply and demand are in harmony, much good will inevitably follow.

“Shipping nevertheless faces some serious challenges in the immediate future, not least the need to comply with new regulations. Environmental Social Governance (ESG) will assume increasing importance. With IMO 2020 in effect, the fuel price differential becomes a significant factor from day one of the new decade, and it will be instructive to see whether freight rates will cover the increased costs thus incurred.

“IMO 2020 scrubber retrofits in drydock will continue to keep tonnage off the water, although shipments of low-sulphur fuel will boost the product tanker trades. New fuel solutions will doubtless continue to be trialled, while it will become clearer whether the Poseidon Principles can be the new global framework for responsible ship finance.

“Elsewhere, operating costs are forecast to go up, while geopolitics and trade wars and sanctions will continue to exert their customary influence. The first full financial reporting season with the new lease accounting standards in force will no doubt see bigger balance sheets for some in the industry.

“We now know that Brexit really does mean Brexit, but what does Brexit itself really mean? There are a number of presidential and parliamentary elections scheduled for 2020, including those in the United States, Egypt, Greece, Hong Kong, New Zealand, Poland, Singapore and Venezuela. Each has the potential to impact shipping in a positive and/or negative way.

“Other issues facing the shipping industry at the dawn of a new decade include exchange rate volatility, and the question of whether US interest rates will continue to fall. LIBOR will not be replaced until the end of 2021, but the time to prepare is now.

“Perhaps the biggest challenge of all, however, is the need to maintain and increase technical innovation in ship and engine design, and to harness the required technology through the likes of Big Data and Artificial Intelligence - and then not to forget to plan for the seafarer of the future.

“Over decades, most markets historically rise as often as they fall. Shipping has weathered the past decade better than many predicted, and so enters the new one all the stronger for that. If it can meet the financial, technological and regulatory challenges which it faces, it will continue to be attractive to existing and new investors alike.”

Note to editors
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

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn.

Press office:
+44(0)20 7893 3000
media@bdo.co.uk

http://twitter.com/BDOaccountant

Shipping confidence hits 18-month high

noreply@blogger.com (Merlin Corporate Communications) — Thu, 19 Dec 2019 15:42:00 +0000

Confidence in the shipping industry rose in the last quarter to its highest level for 18 months, according to the latest Shipping Confidence Survey from leading shipping adviser and accountant BDO.

The average confidence level expressed by respondents to the survey was 6.4 out of 10.0, compared to 5.8 Q3 2019. This is the highest rating since the same level of confidence was recorded in May 2018, and it is necessary to go back to February 2014 in order to see confidence at a higher level.

Confidence on the part of both managers and owners was up to 6.9 out of 10.0 from the levels recorded in the previous survey of 5.9 and 6.4 respectively. But confidence in the broking sector was down from 5.1 to 3.9, the lowest rating for this category of respondent since the survey was launched in May 2008. Confidence was down in Asia from 6.8 to 6.0 but up in Europe and in North America from 5.7 to 6.2 and from 4.3 to 6.8 respectively.

The likelihood of respondents making a major investment or significant development over the coming year was unchanged from last time at 5.5 out of 10.0. Owners’ confidence was down from 6.5 to 6.3, while that of brokers dropped from 4.4 to 2.9. Meanwhile the expectations of managers held steady at 6.1. Expectations were down in Asia and in Europe, from 6.6 to 5.7 and from 5.4 to 5.1 respectively.

The number of respondents expecting finance costs to increase over the coming year was up from 25% to 37%. Whereas 57% of managers (up from 20% last time) anticipated dearer finance over the next 12 months, just 32% of owners (albeit up from 27% last time) thought likewise.

In the freight markets, the number of respondents anticipating higher tanker rates over the coming year was up from 43% to 46%, with little or no movement in the expectations of main respondent categories compared to the previous survey. In the dry bulk sector, overall expectations of rate increases were up from 39% to 50%, and in the case of brokers alone from 20% to 71%. The numbers expecting higher container ship rates, meanwhile, rose by 10 percentage points to 29%. Net rate sentiment was positive in all three main tonnage categories.

In a stand-alone question, respondents were asked to estimate where the US Federal Reserve’s Federal Funds Rate would stand in 12 months’ time. 24% of respondents put the figure at 1.50%, while estimates of 1.75% and 1.25% were favoured by 17% and 16% of respondents respectively. 15% of respondents predicted that the rate would reach 2.00%, while 11% predicted a figure of 2.25%. Overall, 16% of respondents put the likely rate at no higher than 1.00%.

Richard Greiner, Partner, Shipping & Transport at BDO, says, “It is not far short of six years since confidence in the industry has been higher, and appetite for investment remains steady despite volatile economic conditions. This is despite general ongoing geopolitical uncertainty, and notwithstanding specific concerns about a variety of issues including Brexit and President Trump’s impeachment inquiry.

“Shipping is not for the faint-hearted, and committed long-term players remain the most likely to achieve the best returns. Our latest survey revealed an increased expectation over the next 12 months of dearer finance costs. Such costs remain one of the most significant performance-influencing factors for our respondents. But the cost of regulatory compliance is slowly gaining in importance, and will continue to do so. IMO 2020 was recently categorised by one commentator as a ‘perfect storm’ for litigators. It is also part of a much larger commitment by the shipping industry to enhancing its green credentials, and in the process becoming a more technologically advanced and environmentally responsible sector. As such, it should be eminently attractive to investors.”

Note to editors
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

BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 167 countries, with 88,000 people working out of 1,800 offices worldwide. It has revenues of $9.6bn.

http://www.bdo.uk.com/news.html
http://twitter.com/BDOaccountant

Vessel operating costs expected to rise in 2019 and 2020

noreply@blogger.com (Merlin Corporate Communications) — Thu, 31 Oct 2019 15:53:00 +0000

International accountant and shipping adviser BDO says total operating costs in the shipping industry are expected to rise by 2.5% in 2019 and by 2.7% in 2020.

Responses to the firm’s latest annual Future Operating Costs Survey revealed that insurance is the cost category likely to increase most significantly in both 2019 and 2020. In the case of protection and indemnity insurance, the predicted increase is 2.0% for each of the years under review, while hull and machinery insurance costs are expected to rise by 1.9% in both 2019 and 2020.

The cost of both dry docking and of repairs and maintenance is expected to increase by 1.8% in 2019 and by 1.9% in 2020, while expenditure on crew wages is predicted to rise by 1.9% in 2019 and by 1.8% in 2020. Other crew costs are expected to increase by 1.8% and 1.7% respectively.

The increase in expenditure for spares is expected to be 1.6% in 2019 and 1.8% in 2020. Meanwhile, projected increases in lubricants are 1.6% in each of the two years under review, while those for stores ae 1.3% and 1.4% respectively.

The predicted overall cost increases for 2019 were highest in the container ship sector, where they averaged 3.7%. These are heavily influenced by expected increases in both protection and indemnity and hull and machinery insurance costs. Predicted cost increases in the bulk carrier market in 2019, meanwhile, were 2.3%, as opposed to 2.5% in the tanker market and 2.6% in the offshore sector.

A slightly different pictured emerges in respect of 2020, where the highest operating cost increases are those amounting to 3.8% which are expected in the offshore sector. Operating costs for container ships, meanwhile, are expected to rise by 3.0% in 2020, and for bulk carriers and tankers by 2.7% and 2.1% respectively.

The cost of regulatory compliance was high on the list of concerns cited by respondents to the survey. One respondent said 2020 is “all about environmental regulations and the demand for - and cost of – fuel.” Elsewhere it was noted, the shipping market “will be dominated by the cost of new regulations, not least that relating to compliance with the IMO Sulphur 2020 regulation”.

Crew costs were the other factor uppermost in the minds of respondents. “Manning will continue to be a painful area for ship operators,” said one commentator. Another respondent observed that rising wage costs now represent a real threat to business models, while another anticipates a stronger dollar in 2019/2020, which will affect the main cost of paying seafarer wages.

The cost and availability of finance was another issue raised by a number of respondents, one of whom said, “finance – or a lack thereof – is driving consolidation as part of a trend towards creating mega-companies”. They added: “The market is being eroded by capital providers and hedge fund managers who shun efficiency in favour of scale.”

Overall, 25% of respondents (up from the figure of 23% recorded in last year’s survey) identified the cost of new regulation as the most influential factor likely to affect operating costs over the next 12 months. Finance costs featured in second place at15%, compared to 18% last year. In third place was crew supply at 14% up from 12% last year. Next came competition, down from 15% to 13%, followed by demand trends (12%) and labour costs, (11%), compared to last year’s figures of 10% and 8% respectively. Raw material costs, meanwhile, were up by one percentage point to 8%.

Richard Greiner, Partner, Shipping & Transport at BDO, says: “The predicted 2.5% and 2.7% increases in operating costs for 2019 and 2020 respectively compare to an average fall in actual operating costs in 2018 of 1.8% across all main ship types recorded in the recent BDO OpCost study.

“There were some interesting predicted cost increases in the individual market sectors. The increases in the container ship sector for 2019, for example, were the highest in every single individual category of expenditure with the exception of dry docking and management fees. The cost of hull and machinery insurance for container ships is predicted to increase by 4.8% in 2019 and by 3.3% in 2020. For protection and indemnity insurance, the comparable predicted increases are 4.1% and 3.3% respectively. By way of comparison, increases in protection and indemnity and hull and machinery insurance costs in the tanker sector for 2020 are predicated at 1.3% and 1.2% respectively.

“One year ago, overall expectations of operating cost increases for 2019 averaged 3.1%. The fall now to an estimated 2.5% must be regarded at first blush as good news. But this must be tempered by the knowledge that some significant items of big-ticket expenditure – notably those relating to the cost of complying with new regulations - are waiting in the wings.

“It is clear that shipping is well aware of the need to achieve regulatory compliance on a scale not previously envisaged or encountered by previous generations of the industry. This is only the third time that the cost of new regulations has been included in our Future Operating Costs Report, but for the second successive year it has emerged as the factor deemed most likely to have a significant influence on operating costs.

“This is not surprising, given that the immediacy of IMO‘s Sulphur 2020 regulation is enshrined in the name of the regulation itself, while the time is fast approaching for owners to make a decision on the respective merits of Ballast Water Management Convention compliance solutions.

“Shipping and its regulators have demonstrated their ongoing commitment to improving the industry’s carbon footprint, but it is clear that this will come at a price, as will the continuing drive towards greater innovation and technical excellence. A cleaner, greener and more efficient shipping industry will ultimately impact favourably on both operating costs and investor appetite. But, perversely, the process of attaining environmental and technical proficiency will add to such costs in the shorter term.

“Experienced owners and managers are well-used to optimising operating cost efficiencies, with one respondent in the survey noting how for some years now the combination of a soft insurance market, cheaper finance and a decline in crew costs had helped to keep operating cost increases below 2% over the past eight years. Current indications are that the influence of such factors is declining and on their own they are unlikely to be enough to stay ahead of the game in the coming years.

“Finance is available for viable projects, but will not come cheap. Crew costs are likely to go up rather than down in the short term. And, perhaps most significantly of all, insurance outgoings are predicted to rise over the next two years at a rate not seen for some time. There have certainly been a number of recent indications that the prolonged soft insurance market conditions in both the commercial and mutual sector may soon start to change. The reasons for this are not entirely clear, but may involve the recent deterioration in technical performance by both the protection and indemnity clubs and hull and machinery underwriters, which could in turn lead to a firming of the rates which owners are required to pay. Then again, we have seen before how difficult it can be to make premium increases stick, particularly in the commercial market.

“Shipping faces some major challenges over the next two years as it seeks to position itself as an environmentally-aware, technically-savvy industry. It must expect fluctuations in the level of operating costs caused by a variety of factors ranging from movements in oil prices to shifts in levels of manpower, from fluctuations in the value of the dollar to the ramifications of geopolitical developments around the world. The movement in some costs is easier to map and predict than in others. The movement in others still, such as the cost of regulation, is becoming easier to predict as implementation deadlines draw ever closer. The movement in yet others, such as the cost of fighting cyber-crime, can only be guessed at for the moment.

“One thing is clear. The cost of operating effectively and profitably in the modern shipping industry must be met chiefly by revenues generated from day-to-day operations. Shipping remains an optimistic industry but, if the evidence of the freight markets is to be believed, it may not be charging enough for the unique service that it provides.”

Note to editors

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

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 162 countries, with 80,000 people working out of 1,600 offices worldwide. It has revenues of $9bn.
Contacts
media@bdo.co.uk

http://twitter.com/BDOaccountant

BDO says shipping must improve its risk management procedures

noreply@blogger.com (Merlin Corporate Communications) — Fri, 25 Oct 2019 12:58:00 +0000

Sound enterprise and business risk management are making an improved contribution to commercial success in the shipping sector, according to the latest annual Shipping Risk Survey by leading shipping adviser and accountant BDO. But the industry still needs to improve its risk management procedures in the face of a growing level of threat to its security.

Respondents to the BDO survey rated the extent to which enterprise and business risk management is contributing to the success of their organisation at an average 6.4 out of a possible maximum score of 10.0, compared to 5.9 in the 2018 survey. The survey was launched in 2015 with a rating of 6.9.

Owners posted the highest score of all main respondents, followed by managers, but the ratings for charterers and brokers were significantly down on last year. Asia was ahead of Europe in terms of geographical sentiment, but both were behind the Middle East.

The cost and availability of finance was cited by 29% of respondents (up from 17% in the previous survey) as the factor likely to pose the highest level of risk. It was the number one risk factor for owners, charterers and managers, and was deemed to pose the highest level of risk in all geographical areas with the exception of North America. Demand trends, cited by 18% of respondents, featured in second place having ranked first at 17% last year, followed by competition (down from 16% to 11%). Geopolitics were ranked in fourth place at 8%, compared to 6% a year ago. There were also noticeable increases in respect of breaches in health and safety (up from 1% to 6%) and fuel emissions (up from 3% to 7%).

Respondents to the survey felt that the level of risk posed by most of the factors which impacted their business would remain steady over the next 12 months, with the exception of fuel emissions, bunker and fuel costs, cyber security and geopolitics, which were all perceived to have the potential for increased risk.

Overall, 67% of respondents (compared to 74% last time) felt that the senior managers in their organisations had a high degree of involvement in enterprise and business risk management. Meanwhile, 18% (up from 16% previously) said that senior management’s involvement was limited to ‘periodic interest if risks materialise’, 11% (up from 10% last time) said that senior management ‘acknowledged but had limited involvement in risk management’, and 4% (compared to 1% last time) said that senior management had no involvement whatsoever.

Overall, 34% of respondents (compared to 36% in the previous survey) confirmed that enterprise and business risk was managed by means of discussion without formal documentation, while 43% noted that risk was documented by the use of spreadsheets or written reports, compared to 48% previously. Third-party software was employed by 10% of respondents (4% last time) to manage and document risk, while 8% used internally developed software, as opposed to 7% at the time of the previous survey.

On a scale of 1.0 (low) to 10.0 (high), changes to legislation (although down to 3.7 from 3.8 last time) was deemed the factor most likely to result in a material mis-statement in companies’ period-end financial statements. Next came non-compliance with existing legislation, estimates of claims and provisions, disclosure of commitments and contingencies, and automated IT processes for financial reporting, all of which recorded a rating of 3.5. The rating for changes in accounting standards, meanwhile, fell to 3.0 from 3.4 last time.

Michael Simms, Partner, Shipping & Transport at BDO, says, “There has never been a more obvious and pressing need for shipping to identify and reduce its exposure to risk. However, the findings of our survey suggest that the industry is still not fully cognisant of the nature and extent of the risks to which it is exposed, and will need to address a number of issues in order to preserve its integrity and to maintain and increase its attractiveness to existing and new investors alike.

“Shipping is a classic risk-and-reward industry, and one which throughout its history has both rewarded and punished those taking the risks. Generally speaking, those who do their due diligence, and who come up with a sound business plan, are the ones best placed to reap the rewards.

“In many respects, today’s industry faces the same challenges that it did two centuries ago, not least competition, tonnage supply and demand, and operating expenses. But there are new problems to be faced now, such as cyber security and the cost of environmental compliance, which today’s industry will ignore at its peril.

“Going forward, it may be expected that further attention will need to be paid by the industry to managing other emerging risks such as the OECD scrutiny of low-tax jurisdictions as well as the increased focus on the ‘greening’ of finance.

“The fact that cyber security and geopolitics were identified by the respondents to our survey as among those issues having the potential for increased business risk over the next 12 months suggests that the industry is well aware of the dangers posed in these two volatile areas. And yet only 2% of our respondents felt that IT and cyber security posed the highest risk to their organisation.

“The cost and availability of finance was far and away the biggest perceived risk, but sourcing finance will no longer be an issue for companies which are hacked out of business because of a lack of IT integrity and security. Meanwhile, given the proximity of the IMO 2020 implementation deadline, it was no surprise to see both fuel emissions and bunker and fuel costs rated as having increased business risk.

“The encouraging news is that the respondents to our survey emerged as significantly more satisfied than they were twelve months ago that sound enterprise and business risk management was contributing to commercial success. However, it was of note that fewer respondents than last year had a dedicated risk committee.

“Although there was an increase this time compared to 2018 in the number of such committees meeting on a quarterly, annual and semi-annual basis, there was disappointment in the shape of a fall, to the lowest level in the five-year life of the survey, in the number of senior managers with a high degree of involvement in risk management. Risk management must start at the top, and be seen to sit there comfortably.

“There was a decline both in the number of respondents who noted that risk was documented by the use of proper written documents, and in the level of undocumented risk management discussions. But whereas last year’s survey revealed a drop in the use of third-party software and in the use of software developed internally, this time the corresponding figures were up.

“Shipping is a highly entrepreneurial business, and entrepreneurialism and risk management can make uncomfortable bedfellows when one or other is hogging most of the bedclothes. Our survey suggests that the industry needs to improve its risk management procedures. Shipping confidence may be holding up reasonably well, but shipping cannot afford to be complacent about its exposure to risk. Awareness of risk should not be confused with risk aversion, which is not - and never will be - a characteristic highly prized in the international shipping industry.”

Note to editors

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

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 162 countries, with 80,000 people working out of 1,600 offices worldwide. It has revenues of $9bn.

Press office:
+44(0)20 7893 3000
media@bdo.co.uk

http://www.bdo.uk.com/news.html
http://twitter.com/BDOaccountant

Shipping confidence dips as trade wars intensify

noreply@blogger.com (Merlin Corporate Communications) — Tue, 08 Oct 2019 12:20:00 +0000

Confidence in the shipping industry fell in the past three months to its lowest level for two and half years, according to the latest Shipping Confidence Survey from leading shipping adviser and accountant BDO. Yet owners, charterers and managers were more confident than they were at the time of the previous survey in May 2019.

The average confidence level recorded by the survey in the three months to end-August 2019 was 5.8 out of a possible maximum of 10.0. This compares to the figure of 6.1 recorded for the quarter ended May 2019.

Confidence was highest in the chartering sector (up from 6.2 to 7.0), while the increased ratings for owners and managers were from 6.3 to 6.4 and from 5.8 to 5.9, respectively. The rating for brokers, however, was down from 5.7 to 5.1.

Confidence was up in Asia from 6.0 to 6.8 – the highest figure for this region since the survey was launched in May 2008 with an overall rating for all respondents in all geographical areas of 6.8 out of 10.0. The rating for Europe, however, was down, from 6.1 to 5.7.

According to the BDO survey, the likelihood of respondents making a major investment or significant development over the coming year was up from 5.4 to 5.5 out of 10.0. Charterers’ confidence in this regard was up from 5.6 to 6.8, and owners’ from 6.3 to 6.5. The ratings for managers and brokers were also up, from 4.8 to 6.1 and from 3.9 to 4.4, respectively. Expectations were up in Asia (from 5.5 to 6.6) whilst in Europe they were unchanged at 5.4.

The number of respondents expecting finance costs to increase over the coming year was down from 48% to 25%. The figures for all major categories of respondent were down, and in the case of owners and managers to survey lows of 27% and 20%, respectively.

Demand trends were cited by 23% of respondents as the factor most likely to influence performance over the next 12 months. Competition (20%) and finance costs (16%) featured in second and third place respectively in this context.

In the freight markets, the number of respondents expecting higher tanker rates over the coming year was down by 12 percentage points to 43%, with the rating for charterers tumbling from 75% to just 25%. In the dry bulk sector, expectations of rate increases were down from 48% to 39%, with charterers again recording the most marked decrease, from 80% to 25%. The numbers expecting higher container ship rates, meanwhile, fell from 35% to 19%. Net rate sentiment was positive in the tanker and dry bulk sectors, but negative in the container ship market.

Responding to a stand-alone survey question, 26% of respondents said they expected the price differential between high-sulphur fuel oil and IMO-compliant low-sulphur fuel oil at 1 January 2020 to be between $175 and $249 per metric tonne. This compares to the 23% who thought likewise in November 2018. 24% put the figure at between $100 and $174, compared to 12% previously, while 17% estimated the cost at between $250 and $324 compared to 24% last time.

Richard Greiner, Partner, Shipping & Transport at BDO, says: “Geopolitical uncertainty contributed significantly to the decline in confidence recorded in our latest survey, with a number of respondents expressing concern about burgeoning trade wars and political tension in various parts of the world. Ongoing indecision surrounding Brexit was also a salient factor.

“But it was not all bad news. Confidence on the part of owners, charterers and managers was up in the last three months, as was the likelihood of imminent major investment – in the case of owners, to an all-time survey high.

“Indications from the freight markets were less encouraging, with a fall in expectations of higher rates in all three main tonnage categories. Indeed, net rate sentiment was negative in the container ship sector for the first time in almost four years. But shipping confidence must be weighed against the highly cyclical nature of the industry. Not every reversal in fortunes is a portent of significant decline.

“Major challenges lie ahead, some of which will be beyond the control of the industry itself. But there will always be a role for the shipping industry, and particularly for one that is technically inventive and environmentally compliant and thereby attractive to investors.”

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

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 162 countries, with 80,000 people working out of 1,600 offices worldwide. It has revenues of $9bn.
Contacts
Press office:
+44(0)20 7893 3000
media@bdo.co.uk

http://www.bdo.uk.com/news.html
http://twitter.com/BDOaccountant

Ship operating costs decline for seventh year in succession

noreply@blogger.com (Merlin Corporate Communications) — Mon, 16 Sep 2019 14:48:00 +0000

International accountant and shipping consultant BDO says total annual operating costs in the shipping industry fell by an average of 1.8% in 2018, compared to the 1.3% fall for 2017. All categories of expenditure in 2018 were down overall on those for the previous 12-month period, with the exception of repairs and maintenance costs.

The findings are set out in OpCost 2019 (www.opcostonline.com), BDO’s unique ship operating costs benchmarking tool, which reveals that total operating costs for the tanker, bulker and container ship sectors were all down in 2018, the financial year covered by the study. On a year-on-year basis, the tanker index was down by 4 points, or 2.4%, compared to the 3 points (1.7%) fall the previous year. The bulker index, meanwhile, fell by 4 points, or 2.6%, compared to the 3 points (1.9%) fall recorded in last year’s OpCost. The container ship index was down by 2 points, or 1.3% - identical to the fall recorded for the previous 12 months.

There was a 1.1% overall average decrease in 2018 crew costs, compared to the 2017 figure of 0.1%. By way of comparison, the 2008 report revealed a 21% increase in this category. Tankers overall experienced a fall in crew costs of 1.8% on average, compared to the 0.5% fall recorded last year. All categories of tankers reported a reduction in crew costs for 2018 with the exception of Panamax Tankers, which recorded an increase of 0.1%, compared to a reduction for 2017 of 0.7%. The most significant reduction was the 2.7% recorded by Aframax Tankers, which also recorded the biggest reduction in 2017 at 1.7%.

For bulkers, meanwhile, the overall average fall in crew costs in 2018 was 1.1%, compared to 0.6% recorded for the previous year. Handymax Bulkers recorded a 2.3% fall in 2018, with a 1.7% fall for Panamax Bulkers and 0.1% for Handysize Bulkers. Capesize Bulkers were the only category of bulker to record an increase in crew costs, of just 0.1%, compared to the fall the previous year of 0.8%.

As was the case in 2017, there was zero overall increase in expenditure on crew costs in the container ship sector in 2018. The last overall movement for this category of ship was the 1.1% fall recorded for 2016. With the exception of vessels of between 2,000 and 6,000 teu, all categories of container ships recorded a fall in crew operating costs in 2018. In the case of ships between 6,000 and10,000 teu, the fall was 2.7%, equalling the figure recorded by Aframax Tankers as the largest reduction in crew costs recorded in OpCost 2019.

Expenditure on stores was down by 4.9% overall, compared to the fall of 3.5% in 2017. Mirroring the results in the previous year, all vessels in all categories recorded a fall in stores costs for 2018, none bigger than the 7.6% recorded by container ships of between 2,000 and 6,000 teu. In the tanker sector, the most significant fall was the 6.4% posted by Aframax Tankers. Panamax Bulkers and Capesize Bulkers led the way in the bulker sector, each recording a 6.7% reduction in stores expenditure.

For tankers overall, stores costs fell by an average of 4.8%, compared to the 4.5% recorded for 2017, while in the bulker sector the reduction was 6.1%, compared to a fall of 3.6% in 2017. In the container ship sector, meanwhile, there was a 5.7% fall in stores expenditure, compared to a drop of 3.4% the previous year.

There was an overall increase in repairs and maintenance costs of 0.6% in 2018, compared to the reduction of 1.7% in 2017. Both categories of chemical tanker posted increases, led by the 1.6% increase posted by Chemical Tankers 40,000 to 50,000 dwt. There were also significant increases in the container ship sector, most notably in the case of ships of between 1,000 and 2,000 teu and between 2,000 and 6,000 teu (3.1% and 2.9% respectively).

In the tanker sector, Suezmax owners spent 2.3% more on repairs and maintenance in 2018 than they did in the previous year, while increases were also posted for Tankers 5,000 to 10,000 dwt (1.2%) and Handysize Product Tankers (1.1%). Repairs and maintenance costs were also up in the bulker sector for Capesize Bulkers (1.5%) and Handysize Bulkers (0.3%). Product Tankers, meanwhile, recorded the largest fall of 1.6% across all categories.

For tankers and bulkers overall, there was zero overall increase in repairs and maintenance costs in 2018, compared to the falls of 3.4% and 1.5% recorded in 2017. In the container ship sector, however, there was a 3.2% overall increase in repairs and maintenance costs in 2018, compared to zero movement the previous year.

The largest overall drop in operating costs in 2018 was the 7.1% fall recorded for insurance, compared to the 4.1% fall in 2017. Ro-Ros were the only category of vessel to record any increase in insurance costs (1.7%). Everywhere else, there were sizeable reductions in insurance outgoings, none bigger than the 9.9% posted for Handysize Product Tankers. Not far behind were Chemical Tankers 15,000 to 40,000 dwt (9.8%), Panamax Bulkers (9.7%) and container ships of between 1,000 and 2,000 teu (9.3%).

For tankers overall, there was an 8.3% fall in insurance costs in 2018, compared to the 3.4% reduction in 2017. For bulkers, the reduction was 8.5%, compared to 6.0% the previous year, and for container ships the corresponding figures were 7.6% and 5.8%.

Richard Greiner, Partner, Shipping & Transport at BDO, says, “This is the seventh successive year-on-year reduction in overall ship operating costs recorded by OpCost, and will doubtless be regarded as good news throughout the industry. However, at the same time, the solitary overall increase across all categories of operating costs in 2018, that in respect of repairs and maintenance, should be regarded as encouraging news on a number of levels. It indicates an ongoing commitment to the increasing imperative of regulatory compliance, to maintaining safety and protecting the environment, and to continued operation. Moreover, it does nothing to confound the incipient belief that shipping may be displaying signs of a slow recovery to improved profitability. Nobody spends money on repairs and maintenance for vessels that are not expected to trade. Increasingly, vessels that do not meet industry standards will find it difficult to continue trading as regulation bites harder and more comprehensively on a global scale.

“In 2018, as was the case the previous year, the biggest cost reductions were to be found in insurance, reflecting, among other things, the intense competition for business in insurance markets throughout the world. The next biggest level of reductions came, as was again the case in 2017, in the stores category, a trend largely driven by the fall in the cost of lube oils.

“The smallest of the reductions in operating expenditure in 2018, as was the case in the previous year, came in the crew costs category, down by just over 1% on the previous year. Crew costs have been one of the most volatile elements of operating expenditure in the modern shipping industry, but there are reasons to believe that such volatility is likely to decrease. There are a variety of factors impacting crew costs, including fluctuating trade levels, the improved bargaining position enjoyed by seafarers under the MLC 2006 Convention, the emergence of professionally trained crews from dedicated institutions in developing countries, technological advances resulting in reduced manpower requirements, and the continuing difficulty of finding sufficient numbers of certain specialist officers and crew. These factors should balance each other out over time so that increases of more than 20% in crew costs are at least unlikely to be seen - increases the industry has witnessed and survived in previous years.

“Shipping is used to fluctuations in costs and industry fortunes. For example, OpCost records that, at year-end 2008, the average daily operating cost for a Panamax Bulker was US$6,321; in 2018, it was US$5,472. For a Handysize Product Tanker, the comparable figures are US$7,908 and US$7,285.

“Shipping’s fortunes will continue to fluctuate, but confidence is holding up well, notwithstanding the impact of political and economic issues. It should continue to do so, given a favourable wind and a continuing appetite for investment in an industry which is increasingly embracing technological innovation and environmental awareness as a means to increase efficiency and improve cost-efficiency. Whilst there remains the need to fund the costs of technological improvements, over time that investment should lead to improved profitability.”

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

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 162 countries, with 80,000 people working out of 1,600 offices worldwide. It has revenues of $9bn.
Press office:
+44(0)20 7893 3000
media@bdo.co.uk

http://www.bdo.uk.com/news.html
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Multraship holds naming ceremony for two new Damen tugs

noreply@blogger.com (Merlin Corporate Communications) — Mon, 01 Jul 2019 15:02:00 +0000

Dutch towage company and maritime services provider Multraship Towage & Salvage has carried out christening ceremonies at its home port of Terneuzen in the Netherlands for its two new Damen-built tugs – one of which is the first IMO Tier III-compliant tug in Europe.

The vessels are a Reversed Stern Drive (RSD) 2513 and an Azimuth Stern Drive (ASD) 3212, which were officially named Multratug 6 and Multratug 29 respectively. The naming ceremonies took place on 28 June during the Terneuzen Harbour Days, a three-day maritime festival.

Multraship managing director Leendert Muller says, “The purchase of Multratug 6 was a combined response to the need for additional tonnage and a desire to reduce our exhaust emissions. We take responsibility for the environment and this is the reason that we have chosen an IMO Tier III-compliant vessel, the first of its kind in Europe.
This is also in tune with the increasing demand from local port authorities for clean operations. The reduced noise and vibration levels exhibited by the RSD 2513 was another deciding factor, because we really care about the comfort of our crews.”

Damen, meanwhile, has built up extensive experience of how to minimise onboard vibrations from its work in the superyacht and naval vessel sectors. Damen’s Benelux Sales Director Mijndert Wiesenekker says, “Vibration is the enemy of any shipowner – and we draw on our knowledge to reduce it to a minimum on our tugs. This is another example of the benefits of our standardized shipbuilding strategy – we can improve vibration levels as the series progresses. This is important for the crew as well as for the equipment.”

While the RSD 2513 is a new vessel type for Multraship, the ASD 3212 design is well-known to the company’s personnel. In fact, Multraship has experience of operating five ASD 3212 tugs over a period of time. “It is our experience that these are very good vessels,” says Leendert Muller. “Of course they can work inside harbours, but it is when conditions get rougher and tougher – offshore, for instance – that the seakeeping characteristics really show themselves. Our crews are extremely happy to have this new ASD 3212 in the fleet. And this vessel in particular, with an open stern, stern roller and additional equipment, is a real multipurpose tug.”

Versatility of vessel design is a vital factor for Multraship, with Leendert Muller emphasising, “We believe that most of our port tugs should be able to work at sea, and that our seagoing tugs should also be able to perform port operations.”

VIDEO
A short video is available at youtube.com

Leendert Muller was named Harbour Personality of the Year 2019 during the opening ceremony of the Terneuzen Harbour Days.

Multraship is a leading Dutch towage and salvage company. It is a division of the Muller Maritime Group, which has been engaged in the shipping industry for more than 230 years. The company's core activities include harbour towage, salvage & wreck removal, ocean towage and support to offshore energy & dredging industries. Multraship operates and manages a large fleet of tugs, salvage vessels, floating sheerlegs and other craft equipped with modern towage, salvage and fire-fighting equipment and manned by experienced and highly-trained masters and crew. www.multraship.com

For more information contact:
Annemarie Nijsse
Multraship B.V.
anijsse@multraship.com

Damen Shipyards Group
Damen Shipyards Group operates 36 shipbuilding and repair yards, employing 12,000 people worldwide. Damen has delivered more than 6,500 vessels in more than 100 countries and delivers around 175 vessels annually to customers worldwide. Based on its unique, standardised ship-design concept Damen is able to guarantee consistent quality.

Damen’s focus on standardisation, modular construction and keeping vessels in stock leads to short delivery times, low ‘total cost of ownership’, high resale values and reliable performance. Furthermore, Damen vessels are based on thorough R&D and proven technology.

Damen offers a wide range of products, including tugs, workboats, naval and patrol vessels, high speed craft, cargo vessels, dredgers, vessels for the offshore industry, ferries, pontoons and superyachts.

For nearly all vessel types Damen offers a broad range of services, including maintenance, spare parts delivery, training and the transfer of (shipbuilding) know-how. Damen also offers a variety of marine components, such as nozzles, rudders, winches, anchors, anchor chains and steel works.

Damen Shiprepair & Conversion (DSC) has a worldwide network of eighteen repair and conversion yards of which twelve are located in North West Europe. Facilities at the yards include more than 50 floating (and covered) drydocks, including the longest, 420 x 80 metres, and the widest, 405 x 90 metres, as well as slopes, ship lifts and indoor halls. Projects range from the smallest simple repairs through Class’ maintenance to complex refits and the complete conversion of large offshore structures. DSC completes around 1,300 repair and maintenance jobs annually, both at yards as well as in ports and during voyage.

For more information contact:
Ben Littler
Communications Advisor
+31 (0) 183 65 5546
+31 (0) 610 46 5742
ben.littler@damen.com
www.damen.com

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

noreply@blogger.com (Merlin Corporate Communications) — Tue, 25 Jun 2019 16:12:00 +0000

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

noreply@blogger.com (Merlin Corporate Communications) — Tue, 18 Jun 2019 15:19:00 +0000

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

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has underlying revenues of £590m and is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 162 countries, with 80,000 people working out of 1,600 offices worldwide. It has revenues of $9bn.
Contacts Press office:
+44(0)20 7893 3000
media@bdo.co.uk

http://www.bdo.uk.com/news.html
http://twitter.com/BDOaccountant

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

noreply@blogger.com (Merlin Corporate Communications) — Thu, 13 Jun 2019 08:35:00 +0000

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

noreply@blogger.com (Merlin Corporate Communications) — Tue, 11 Jun 2019 17:45:00 +0000

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

noreply@blogger.com (Merlin Corporate Communications) — Tue, 04 Jun 2019 09:11:00 +0000

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

OSD-IMT offshore utility vessels delivered to Unithai

noreply@blogger.com (Merlin Corporate Communications) — Tue, 07 May 2019 15:13:00 +0000

Two OSD-IMT-designed 80 tonnes bollard pull offshore utility vessels were delivered during the last quarter of 2018 to Thailand-based operator Unithai Offshore.

Unithai Samui and Unithai Chumporn were both built at Unithai Shipyard and Engineering in Leam Chabang, Thailand. They will be used for a wide range of duties in and around offshore oilfields and oil terminals, including berthing and unberthing oil tankers ranging from 60,000 dwt to 280,000 dwt. They will also be able to carry out long-line towing and push-pull operations, firefighting duties, SPM maintenance operations, floating hose and subsea hose string maintenance, anchor handling duties, inter-/intrafield supply operation and pollution control duties.

The vessels have a length of 49.98 m, a beam of 15.0 m, a height of 6.20 m and a moulded draft of 5.0 m. They can accommodate a crew of 22, are classed with Bureau Veritas and registered and flagged in Thailand, operating under the rules and regulations of Thailand Registry.

The OSD-IMT7001 vessels are equipped with twin Niigata ZP41 azimuth propulsion units, each coupled via a cardan shaft arrangement to a Niigata 8L28HX marine diesel engine, giving the vessels a free running speed of around 13 knots.

About OSD-IMT
OSD-IMT designs tailored vessels, offers various marine consultancy services and provides innovative conversion engineering. We have great experience in all areas of marine engineering such as new construction, conversion and upgrades. We use our extensive and practical experience, collective knowhow and modern design tooling to help you develop new
marine assets and maintain and upgrade existing ones. Listening to and sharing ideas with our clients is our starting point for each project.
www.osd-imt.com

For more information:
Merijn Brusselers
OSD-IMT
+31 (0)255 54 50 70
merijn.brusselers@osd-imt.com

Failure to check charterparty wording catches ship manager off guard

noreply@blogger.com (Merlin Corporate Communications) — Tue, 07 May 2019 11:04:00 +0000

International Transport Intermediaries Club (ITIC) has urged ship brokers and managers to check the terms of their charterparty agreements closely before signing, in order to avoid costly mistakes further down the line.

By way of illustration, ITIC cites the case of the manager of a tanker entering West African waters who believed that the terms of a charterparty provided that armed guards were to be appointed at the charterer’s expense. The manager duly appointed the guards for the voyage at a cost of $170,000, but the charterer refused to pay the invoice.

The terms of the charterparty did in fact include provisions relating to the appointment of armed guards, but their deployment was not mandatory. In addition, the charterparty provided that the charterer was only liable for up to $20,000 of any such costs. The charterer offered to pay that $20,000, and the owner demanded that the managers pay the shortfall.

The owner pointed out that it had sent the manager voyage orders stating that the decision to appoint armed guards was one for the owner to make. It had in fact only appointed armed guards for one out of the last ten calls to the area and on
that occasion the charterparty required the charterer to pay the security bill in full.

ITIC says it has seen a number of claims caused by ship brokers and managers acting on their recollection of a charterparty wording, as opposed to checking what the charterparty actually says. On this occasion, ITIC reimbursed the full claim of $150,000.

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

Liberian flag added to QUALSHIP 21

noreply@blogger.com (Merlin Corporate Communications) — Tue, 09 Apr 2019 12:25:00 +0000

The Liberian flag has been included in the United States Coast Guard’s (USCG) QUALSHIP 21 (QS21) roster for 2019-2020. QS21 recognizes vessels and flag states which have successfully met specified safety and quality requirements and regulations when calling at ports in the United States.

Alfonso Castillero, Chief Operating Officer of the Liberian Registry, notes, “We are very pleased to have made the QS21 roster. It is recognition for the many years of work that we, our clients, ship managers, and masters and crew have put into safety training and meeting environmental standards. We have a great team of dedicated staff - good people with at-sea experience - who are working closely with vessels on compliance as they come into the US.”

To qualify for QS21, flag administrations must have a three-year Port State Control (PSC) detention ratio of less than 1.00% and be credited with 10+ PSC exams per year for the last three years. QS21 status brings advantages to vessels visiting the US. Liberia and eight other maritime nations were all new additions to the QUALSHIP 21 (QS21) & E-ZERO list this year.

Alfonso Castillero says, “The number of new additions to QS21 in 2019-2020 is fantastic recognition of the work that maritime administrations, owners, and crew have put into safety initiatives. It is also testament to the efforts of the US Coast Guard, who are often overlooked when it comes to handing out praise.

“Inclusion in QUALSHIP 21 is a great achievement for any flag, and the wider industry should celebrate the number of states making the USCG’s grade.”

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

ITIC says simple checks will defeat shipping industry fraudsters

noreply@blogger.com (Merlin Corporate Communications) — Mon, 08 Apr 2019 08:57:00 +0000

International Transport Intermediaries Club (ITIC) says ship brokers and agents are among those most at risk of exposure to fraud in the shipping industry, and urges them to carry out simple checks in order to protect themselves.

In the latest issue of its Claims Review, ITIC cites the case of a ship broker which received an emailed freight invoice from an owner for $120,000. The bank account detailed in the invoice was the same as that previously used by the owner but, several hours later, a further email was received, apparently from the owner, advising a change to the bank account details because the original bank account was ‘no longer available to receive payment due to an internal audit.’

The message was not in fact from the genuine owner, but from a very similar email address created by a fraudster, who had also provided a fake account registration form. The broker failed to notice the change in the email address, and it was only after the owner enquired about the whereabouts of the freight that the scam was discovered. The charterer had to pay the freight again and claimed from the broker for negligence. The broker reimbursed the charterer and ITIC reimbursed the broker.

In another incident, a ship agent received an email purportedly from its principal explaining that the principal’s bank details had changed and that funds were to be sent to a new bank account. Although the new bank account had no apparent link to the principal, the agent duly transferred into it the sum of $53,000. The principal, however, did not receive the funds, because the agent had paid the money into the wrong account, failing to notice that the email address notifying the change of bank account was slightly different to the correct email address of its principal. ITIC duly reimbursed the agent for the full amount.

ITIC says it continues to see a large number of such frauds. While most of the victims and intended victims have been ship brokers and ship agents, ITIC has also received reports from members carrying out a wide range of other activities.

ITIC emphasises that anyone making a payment could be the target of fraudsters, and warns that any message purporting to change bank account details should be regarded with suspicion. It has urged its members when transferring funds to use
the telephone to check account details with a trusted representative at the recipient’s office. Simple checks, it says, will defeat the fraudsters.

To access a dedicated fraud section on ITIC’s website, which contains advice and information relating to potentially fraudulent activity, go to:
https://www.itic-insure.com/knowledge/circulars/fraud-circulars/

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

Shipping confidence up despite ongoing geopolitical uncertainty

noreply@blogger.com (Merlin Corporate Communications) — Fri, 22 Mar 2019 15:05:00 +0000

Confidence in the shipping industry has risen in the last three months despite ongoing geopolitical uncertainty, according to the latest Shipping Confidence Survey from leading shipping adviser and accountant BDO.

The average confidence level rose to 6.2 out of maximum score of 10.0 this quarter compared to 6.0 in Q4 2018.

Confidence was up in Europe, from 6.1 to 6.3, and in North America, from 5.2 to 5.6. In Asia, meanwhile, there was a drop in overall confidence levels to 5.8 from the 12-month high of 6.3 recorded in the previous quarter.

Brokers were behind much of the increase in confidence. Their score was up from 5.2 to 5.9. The rating for owners and managers was down slightly from 6.4 to 6.3 and from 6.0 to 5.8 respectively. Charterers’ confidence was also down, from 6.8 to 6.0, although this still compared favourably with the rating of 5.0 returned 12 months ago.

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 next 12 months was down from 5.5 to 5.3 out of 10.0. Charterers’ confidence in this regard reached a record high of 7.3. Brokers’ confidence was also up, from 4.1 to 4.9. However, owners recorded a fall from 6.3 to 5.4. Managers’ ratings were unchanged at 5.6.Expectations were up in Europe from 5.2 to 5.3, but down in Asia from 6.2 to 5.2.

The number of respondents who expected finance costs to increase over the coming year was down from 67% to 48%, the lowest figure since August 2016. The figures for all categories of respondent were down, in the case of charterers from 80% to 33%.

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.

Net freight rate sentiment was positive in all three main tonnage categories identified in the BDO survey, with 51% of respondents expecting higher rates over the next 12 months in the tanker market. This represents a drop of 9 percentage points on the previous survey score of 60%. Respondents expecting lower tanker rates fell from 9% to 6% this quarter.

In the dry bulk sector, expectations of rate increases were up strongly from 38% to 52%, while the numbers anticipating lower rates climbed slightly to 13% from 11%. The numbers expecting higher container ship rates rose by one percentage point to 26%, whilst those expecting lower container ship rates increased to 25% from 23%.

When asked to predict where crude oil prices would be in 12 months’ time, 37% of respondents in BDO’s survey opted for the $60-$69/barrel range. This figure is almost identical to the figure of 36% from February 2018. 17% of respondents opted for the $50-$59/barrel range compared to the 19% who did so last year, while 28% favoured the $70-$79/barrel range which was unchanged from 12 months ago.

Richard Greiner, Partner, Shipping & Transport at BDO, says, “It is encouraging to begin the year with a small uptick in confidence. Despite continuing doubts and fears about trade wars, China’s GDP, uncertainty over exchange rates, President Trump’s decision-making, Brexit and general political instability in many parts of the world, shipping can still find reasons to be cheerful.

“Net freight rate sentiment remains positive in all three main tonnage categories, and there is a growing recognition that shipping is emerging from an extremely difficult period as a leaner and greener industry.

“A number of respondents noted that the financial difficulties faced by many companies in recent years have changed the dynamics of the industry, with an increase in consolidation, restructuring and mergers & acquisitions.

“At the same time, there appears to be general recognition that the likes of the IMO 2020 and Ballast Water Management regulations will help rid the industry of poorly maintained tonnage and increase both the viability and the pedigree of the world fleet.

“This will also appeal to potential investors looking to back environmentally compliant and technologically savvy industries. It seems that the shipping industry must prioritise achieving the benefits of regulatory compliance and technological innovation over the coming years.”

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

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has underlying revenues of £590m and is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 162 countries, with 80,000 people working out of 1,600 offices worldwide. It has revenues of $9bn.

Press office:
+44(0)20 7893 3000
media@bdo.co.uk

http://www.bdo.uk.com/news.html
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BDO says UK Chancellor’s Spring Statement contains no unwelcome surprises for shipping

noreply@blogger.com (Merlin Corporate Communications) — Thu, 14 Mar 2019 10:42:00 +0000

Leading accountant and shipping adviser BDO says that, while the Spring Statement by the UK Chancellor of the Exchequer did not contain any shipping-specific initiatives, it did include some measures which could be of interest to the maritime sector.

Of particular interest to the offshore sector, the government called for evidence to identify what should be done in order to further strengthen the position of Scotland and of the UK in general as a global hub for decommissioning.

Detailed legislation was published in respect of the new capital allowances for structures and buildings which was announced in the UK Budget 2018. This relates to a new 2% capital allowance which will be available in respect of the construction costs (including land alteration and improvement expenditure) of new commercial non-residential structures and buildings. Very broadly, buildings must be used for a commercial purpose. This will apply where the contract is entered into on or after 29 October 2018.

A policy paper was also published on tackling tax evasion, tax avoidance and other forms of non-compliance, with the government reiterating that it will continue to build on the steps already taken. Another policy paper, ‘No Safe Havens’, was meanwhile published reiterating the government’s commitment to ensuring offshore tax compliance and preventing unfair outcomes, using international collaboration and the exchange of information

BDO tax partner Sue Bill says, “Once again, the absence of any shipping-specific measures is good news for the maritime sector, which continues to benefit from a tax regime which provides certainty and stability.”

The BDO 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

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy.

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has underlying revenues of £590m and is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 162 countries, with 80,000 people working out of 1,600 offices worldwide. It has revenues of $9bn.

Press office:
+44(0)20 7893 3000
media@bdo.co.uk

http://www.bdo.uk.com/news.html
http://twitter.com/BDOaccountant

London P&I Club reports further growth in owned entry

noreply@blogger.com (Merlin Corporate Communications) — Fri, 22 Feb 2019 13:54:00 +0000

THE London P&I Club saw further growth in its mutual owned entry following the conclusion of the recent P&I renewal season.

The club’s director of underwriting, Reto Toggwiler, says, “Our mutual membership saw year-on-year growth of approximately of 3.5m gt or 7%. This result is evidence of the strong commitment shown to the club by existing members and by the new members that we were pleased to welcome, drawn from a number of different countries around the world.

“Everybody at the club is grateful to members and brokers for their support in achieving an encouraging outcome which underlines the importance that shipowners attach to the London Club’s service-focused and understanding approach to P&I”.

www.londonpandi.com

BDO / Moore Stephens merger strengthens shipping presence

noreply@blogger.com (Merlin Corporate Communications) — Mon, 11 Feb 2019 12:02:00 +0000

The merger between leading accountants and advisers BDO LLP and Moore Stephens LLP in London was completed earlier this month.

Clients of the merged firm, BDO, will have access to offices in over 160 countries with a presence in every major shipping location in the world.

Michael Simms, Partner and Head, Shipping & Transport at BDO, says: “Both BDO and Moore Stephens LLP have for many years been leading accountants and advisers to the shipping and transport sector. We are confident our clients will now benefit greatly from having access to the combined resources of the two firms.

“The merger enables us to deliver the ever-increasing range and depth of solutions demanded by our clients, who can expect the same high-quality, industry-leading service to which they have become accustomed.”

The BDO 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

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy.

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.

BDO LLP
BDO LLP operates in 17 locations across the UK, employing nearly 5,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has underlying revenues of £590m and is the UK member firm of the BDO international network.

BDO’s global network
The BDO global network provides business advisory services in 162 countries, with 80,000 people working out of 1,600 offices worldwide. It has revenues of $9bn.

Press office:
+44(0)20 7893 3000
media@bdo.co.uk

http://www.bdo.uk.com/news.html
http://twitter.com/BDOaccountant

ITIC e-learning video highlights dangers of switch bills of lading

noreply@blogger.com (Merlin Corporate Communications) — Wed, 30 Jan 2019 13:15:00 +0000

International Transport Intermediaries Club (ITIC) has produced an e-learning video for ship agents on the use of ‘switch bills of lading’, a second sets of bills used as a substitute for the original bills of lading issued at time of shipment.

ITIC legal advisor Mark Brattman says, “There are a number of valid reasons why a carrier may be asked by the holder of a bill of lading to issue switch bills. For example, the original bill might name a discharge port which is subsequently changed, or perhaps the sellers of goods in a chain of contracts want to protect their commercial position by removing the name of the original shipper that appeared on the bills. Alternatively, the buyer of the goods may require one bill of lading covering items originally shipped in a number of smaller parcels.

“The issuance of a second set of bills of lading, however, is an extremely dangerous practice and the perils of having two sets of bills in circulation for the same cargo are obvious. Great care must be exercised by ship agents who are asked to issue switch bills. They must follow certain rules. It is essential that the second set of bills should only be issued if the complete first set has been surrendered for cancellation. Moreover, the principal must agree in writing to switch bills being issued, and must also approve any changes to the content of the original bills.

“If the second set of bills contains any misrepresentations, the carrier and its agent may be at risk of claims from parties who have suffered a loss as a result of such. Agents should also be aware that switch bills of lading are sometimes issued in addition to – rather than against cancellation of - the first set of bills. This may be because the first set has been held up in the country of shipment, or because the ship arrived at the discharge port in advance of the first set of bills, or simply because the first set have been lost.

“Agents should only ever act on the instructions of their principal and should not, for example, respond to direct requests from a consignee to issue switch bills of lading.” Agents should comply with reasonable requests from their principals but should never knowingly change information that is factual – for example the port of loading – even if offered an indemnity to do so.”

The e-learning video can be accessed at: http://bit.ly/switchbills

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

Liberia confirmed as world’s second-largest ship registry

noreply@blogger.com (Merlin Corporate Communications) — Mon, 28 Jan 2019 15:30:00 +0000

Liberia is the second largest ship registry in the world, according to leading shipping analyst Clarksons in its Clarksons World Fleet Monitor January 2019. This report confirms that, in gross tonnage terms, Liberia has overtaken and outgrown the Marshall Islands, which now languishes in third place.

Alfonso Castillero, CCO of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, says, “This is about quality of service, not discounted rates.

“The Liberian fleet was the fastest growing major open flag in both the shipping and offshore sectors in 2018, and currently has a growth rate of 8.0% - more than twice that of most other open flags. There are a number of reasons for this, not least a growing recognition on the part of major shipowners and managers that Liberia, more than any other flag state, is able to combine increased safety and efficiency with reduced costs.

“The quality of service offered, and the rapid response times achieved, are important factors behind the significant growth recorded by the Liberian Registry, whose clients are able to communicate with our highly qualified, motivated staff at any time of the day or night, thanks to the registry’s global network of offices staffed by experience professionals.

“Owners and managers have also been shifting their fleets to Liberia because of the huge cost savings available under the historic agreement on port dues with the People’s Republic of China. This agreement, which was recently renewed, can result in savings to owners of millions of dollars.”

Liberia is not only making shipping more cost-effective. It is also making it more efficient and safer through the strategic deployment of its expanding global services and international presence and its pioneering role in the application of cutting-edge technology.

Alfonso Castillero says, “Compared to other flags, the detention rate for Liberian-flag ships was down significantly in key jurisdictions in 2018, especially in areas like China, where other flags experienced an increase in their detention rates. This was due in no small part to the success of Liberia’s complimentary Detention Prevention Programme, the first of its kind developed by a flag state.

“Liberia is ideally positioned to further strengthen its leading position in the global shipping industry. It will do this by continuing to take proactive action in the best interests of owners and managers who make their flag choices on the basis of a registry’s proven success and effectiveness. Liberia is the smartest decision for owners looking for the best quality with significant cost savings.”

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

ITIC reimburses broker accused by owner of breach of authority

noreply@blogger.com (Merlin Corporate Communications) — Mon, 14 Jan 2019 11:06:00 +0000

International Transport Intermediaries Club (ITIC) recently represented a shipbroker accused by an owner of breach of warranty of authority in a dispute arising under a non-performing contract of affreightment (CoA).

The shipbrokers had negotiated the terms of a CoA between the charterers and the ship owners, receiving all their instructions from an agent purporting to act for the charterers. The CoA provided for a minimum of 18 shipments to take place over a 12-month period but, when the charterers failed to nominate any cargoes during the period of the CoA, the owners began proceedings against them, claiming damages of $3.1m. In their defence, the charterers denied being a party to the CoA and alleged that neither the shipbrokers nor the agents had authority to negotiate or enter into the CoA on their behalf.

The owners then joined the shipbrokers into the proceedings, alleging that they had breached their warranty of authority by representing to them that they were authorised by the charterers to conclude the CoA. They added that, if the brokers did not have such authority, then they would be liable for the loss suffered.

Liability for breach of warranty of authority does not, under English law, depend on any negligence on the part of the shipbroker. It is, however, specifically covered under ITIC’s rules. The shipbrokers maintained that they had not purported to represent the charterers and said that the owners had known that the brokers were acting on the agent’s instructions. The agents, meanwhile, claimed that they had been authorised to conclude the CoA.

After filing their defence, the charterers did not take an active part in the proceedings. The matter went to mediation between the remaining parties but did not settle on the day. Following the mediation, the owners indicated that they would be willing to accept a
substantial reduction in their claim. The brokers and agents were able to negotiate a
split of the settlement, with the agents paying the largest proportion. ITIC reimbursed the shipbrokers’ contribution of $260,000.

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
Fax. +44 (0)20 7338 0151
charlotte.kirk@thomasmiller.com

Moore Stephens says leaner and greener shipping will attract investment in 2019

noreply@blogger.com (Merlin Corporate Communications) — Thu, 03 Jan 2019 16:22:00 +0000

Leading accountant and shipping adviser Moore Stephens says shipping will continue to attract investors in 2019 if it fulfils its ESG (environmental, social and governance) responsibilities.

In the latest issue of Bottom Line, the Moore Stephens shipping sector newsletter, Richard Greiner, a partner in the firm’s Shipping & Transport team, says, “It has been suggested that the future is very much like the present, only longer. Should that prove to be the case for the shipping industry, it would not be such a bad thing, since the present is not so bad as it has appeared to be at various times over the past ten years.

“Confidence in the shipping industry actually dipped slightly towards the end of last year, but that was against a four-year high recorded in first-half 2018. There remains an appetite for investment in shipping from both new and existing players. That is likely to continue in 2019 so long as shipping lives up to its ESG responsibilities.

“Existing and emerging regulations such as those on ballast water management and greenhouse gas emissions show that shipping is becoming more environmentally aware and accountable. New funds will be needed and the environmental investment story should prove attractive to many potential investors. Green doesn’t come cheap, or easy, however, the more so when viewed in the context of rising interest rates. This year we will see important decisions made on investments to comply with the new environment-driven regulations which are coming into force, and we will have a better idea of whether the drydocking capacity exists to cope with demand.

“Meanwhile, the industry will face other challenges. Operating costs are set to increase, and hopes will persist that freight rates will do likewise. Tonnage imbalances will endure in some trades. The Baltic Dry Index may behave less erratically than in the latter part of last year. Brexit may finally mean Brexit, which could mean a number of things, but should prove positive for shipping in the UK. The introduction of new lease accounting standards will change things for some, though not their actual cashflows. And, last but not least, the effect of geopolitical influences will continue to be felt throughout 2019.

“Despite the prospect of new trade negotiations between China and the US, the world remains a volatile stage on which to trade. There are presidential elections this year in a number of countries, including Argentina, Indonesia, Nigeria and Panama. Additionally there are a plethora of parliamentary elections over the coming year in, among others, Greece, India, North Korea, at least a dozen African nations and perhaps even in the United Kingdom.

“Uncertainty is likely to remain the norm in 2019.”

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 614 offices of independent member firms in 112 countries, employing 30,168 people and generating revenues in 2017 of $2.9 billion. www.moorestephens.co.uk/shipping-transport

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

London P&I Club advocates old-school approach to identifying problems

noreply@blogger.com (Merlin Corporate Communications) — Mon, 17 Dec 2018 10:03:00 +0000

THE London P&I Club says its Ship Inspection Programme has revealed a frequent failure to observe basic onboard procedures, with potentially costly consequences for owners and operators.

In the latest issue of its StopLoss Bulletin, the club says, “With increased commercial pressure on the master of a ship, some simple and potentially ‘old-school’ habits often fall by the wayside. For instance, we consider that one of the most useful tools for maintaining a quality operation and safe working environment is the weekly captain’s rounds.”

The club cites examples of issues that may slip past the daily team, but be spotted by the master. These include an untidy paint locker with opened and part-used tins of paint lying around, presenting a fire risk, mooring ropes left uncovered on mooring drums, open to degradation in sunlight, and a perished rubber gasket on the engine room escape hatch.

The club says, “Many findings identified during a ship inspection are easily detectable by the ship’s officers and crew. It is relatively rare that findings are latent. The master is the overseeing eye, carrying enhanced responsibility for all shipboard activities, coupled with a motivating role as the ship’s focal point.

“Not all ships’ operational programmes allow for regular ‘Sunday Routines’ but, when an opportunity exists, an hour spent touring the ship with the chief officer can enable the master to detect housekeeping issues as they develop. The experienced eye of the master can not only detect these issues at an early stage, but can also help the chief officer populate the weekly job list.”

www.londonpandi.com