the Baltic

the

Maritime
Security

Baltic moves to simplify wet freight trading

W IN T E R 2 0 1 1

UAE ports sector on road to recovery

Going green in Gothenburg

T h e O f f i c i a l M a g a z i n e o f t h e B a lt i c E x c h a n g e WINTER 2011
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the BALTIC
The Baltic is the official magazine Publisher
of the Baltic Exchange W H Robinson
Tel: +44 (0) 20 7623 5501
E-mail: enquiries@balticexchange.com
editor
Website: www.balticexchange.com
Sandra Speares
Tel: +44 (0) 1483 527998
The Baltic is published for the Baltic Exchange
E-mail: sandra.speares@mar-media.com
by Maritime Media Ltd
The Diary House, Rickett Street
London SW6 1RU SALES manager
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The Baltic is published on behalf of the Baltic
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However, the views expressed in The Baltic
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companies. Other activities include the world’s
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theBaltic Winter 2011 www.thebaltic.com 1

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 Contents
Chairman’s message
7 Mark Jackson

Baltic briefing

8 Dry derivatives forum

 7
9 Move to dollar per tonne for tanker FFAs
10 New Baltic vice chairman
11 Lifeboat crew visits Baltic
12 Baltic Exchange honours
Maersk Mc-Kinney Møller
  10 13 Rigel lifts Baltic 2011 Cup
14 BECC tie with bankers, but battered by
Braemar at Lords
15 YBA night
16 Friends reunited
17 Christmas crackers
  11 18 Contacts

Logbook
20 The short sea pioneers

People, places, plcs

  17
22 Scary times for shipping

Baltic Comment
24 Michael Grey

State of the market

25 Tankers
  33
26 S&P
28 BIMCO
31 Dry Bulk
33 Offshore
35 Towage & salvage
  37 37 Shipmanagement, crewing and employment

theBaltic Winter 2011 www.thebaltic.com 3

 Contents
FFA
39 Baltic moves to simplify wet freight trading

Environment
43 Going green
43

Oxford Analytica
47 Global commodity ‘financialisation’ increases risks

Insurance special
49 Reducing risk
47
Maritime security
57 To arm or not to arm?

Maritime safety
70 Putting safety first

  57 UAE
73 UAE ports sector on road to recovery

Maritime cluster
80 Rock resilience

Scandinavia
  73
83 Going green in Gothenburg

German law
87 Going for growth in Germany

Insurance news
80
91 Insurance parlance
93 ITIC

Legal news
94 Rotterdam redrafting

87
104 Events

theBaltic Winter 2011 www.thebaltic.com 5

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 Chairman’s message Mark Jackson

Chairman’s
message
A
s I sit down to pen this message to
readers, the UK’s Chancellor of the
Exchequer stands before the House
of Commons delivering his Autumn
Statement, giving a gloomy assessment of the
state of the nation’s finances and its short term
economic outlook. Eurozone woes, rising youth
unemployment, lower global growth and higher
government borrowing than expected mean dif-
ficulties for us all. In these tough times, strong
leadership and an understanding of the needs
of the various key sectors which make up UK
plc are very necessary if we are to find our feet
again.
The UK’s maritime sector is one of these
key sectors and growth here will play a role in
growing our economy. Our government and
public should be proud of the achievements
of the maritime sector and its ability to bring
in overseas earnings. The latest report on our
industry by the CityUK shows that the UK’s
maritime services sector alone generates a
GDP of £1.5bn; provides employment for nearly
12,000 people; raises tax revenue of £483m;
Tradewinds
and produces overseas earnings of £2.2bn.
According to the authors of “Maritime Services
November 2011” this contribution is enhanced
by the multiplier impact both from business Mark Jackson
procured through the supply chain and also
from spending of those employed in maritime is important that we demonstrate the breadth to prevent further damage to shipping from
services and the supply chain. Taking this impact and depth of the many businesses which make changes to the Non-Dom tax regime and the
into account, it is estimated that the broad up what we call the City. The City is not just tinkering with the Tonnage Tax. As we have
contribution to GDP and tax revenue is more about banking, but also shipbroking, commodity watched businesses diminish their presence in
than doubled to £3.9bn and £1.4bn respectively, trading, legal advice, insurance services and the UK and increase it elsewhere, our continued
while employment dependent on maritime shipowning. We must not allow a breakdown message to Government must be that they
services is increased more than fivefold to over in trust between the public, politicians and the need to understand the reality of international
63,000. If we also take our ports, manufacturing financial sector impact us. To this end, the Baltic competition.
and shipping industry and service sectors into Exchange will continue to highlight the needs The UK and the City provide world beating
consideration, the statisticians say that the of our sector at the highest levels. The freight maritime services and we need to make sure
GDP contribution rises to £6.1bn and provides derivatives sector is directly impacted by the that our leaders understand what we need to
employment for 117,000. transition of the Financial Services Authority to remain at the heart of the international shipping
At a time when the role of the UK’s financial new structures next year and the implementation industry.
services sector is being questioned by many, it of MiFID2 will take place soon. We have tried

theBaltic Winter 2011 www.thebaltic.com 7

Baltic briefing

Dry derivatives
forum
P
resentations from October’s Baltic Exchange
and FFA Brokers’ Association Dry Freight
Derivatives Forum are now available in the FFA
area of www.balticexchange.com. This year’s
forum took place at London’s Royal Garden
Hotel and once again pulled in a large audience
of FFA brokers and traders. Topics on the agenda
included discussion of screen trading, an over-
view of the latest regulation for this market and
advice on recovering FFA hedging losses.

Michael Saverys (Bocimar Int), K Carsten (Klaveness), George Wells (Cargill), John Banaszkiewicz (FIS) Janet Sykes, FFABA chairman

Isabelle Kurek-Smith (LCH Clearnet) and Tom

Cutler (Swissmarine)

8 theBaltic Winter 2011 www.thebaltic.com

 Baltic briefing

Move to dollar per tonne for tanker FFAs

T
anker freight derivative traders meeting at
the Freight Market Information Users’ group
at the Baltic Exchange agreed that from the
New Year all Tanker FFA contracts which are
traded in Worldscale would be converted to
a dollar per metric tonne ($/MT) price when
presented to the clearing houses. The move
is designed to help spur trading and follows a
successful transition of most trading of FFAs
from Worldscale to $/MT. It will allow trad-
ers who prefer to continue to quote trade in
Worldscale for near-dated contracts to execute
against $/MT prices from counterparties.
A working group was formed to resolve some
details of future market practice.
Traders are already pricing contracts
for settlement on a $/MT basis for trades
which settle in the next and subsequent
calendar years, and the decision removes the
uncertainty faced by the market when using
the Worldscale points based system. With the
calculation of Worldscale flat rates changing
at the end of each year to reflect movements
in bunker prices, port costs and exchange
rates, and occasional ad hoc changes during
the year, uncertainty about the future flat rate
has been a problem for derivative traders in
the past.
The move does not in any way affect the
use of Worldscale in the physical market and
the Baltic Exchange will continue to provide its
daily index tanker assessments on a Worldscale
basis.
Attendees at the Forum which followed
the User Group meeting also heard a market
presentation from Henry Curra at ACM and
independent analyst Aage Figenschou talk
about dealing with financially distressed shipping
companies.

Lord Mayor of London commends UK maritime services

N
ewly elected Lord Mayor of London David us to retain international shipping investors and that the Baltic Exchange would work with the
Wooton highlighted the £26bn contribu- attract new business.” Lord Mayor to ensure that central government
tion made by maritime businesses to the UK Baltic Exchange chairman Mark Jackson policy towards the sector was supportive, high-
economy during a visit to the Baltic Exchange called on the Lord Mayor to help communicate lighting the tonnage tax, non-dom tax regime
in November. the UK’s leadership position within the global and the implementation of MiFID 2 as particular
In the first visit of his mayoralty, the Lord maritime industry to the general public and said areas of interest.
Mayor said: “The UK has a uniquely strong
maritime services sector built on 300 plus years
of experience. It is one of the UK’s biggest earn-
ers, delivering over £26bn to the UK economy
and employs half-a-million people. It could play
an even greater role in the future assisting the
Government objective of reducing debt.”
He noted that during his term in office, one of
his priorities would be ensuring that the City and
its institutions are fit for the future.
London today is the world’s foremost char-
tering, financial, insurance and legal centre
for the global maritime industry, thanks to the
presence of international shipowners, Lloyd’s of
London, the Admiralty and Commercial
Courts and the United Nation’s International
Maritime Organization.
The Lord Mayor commended the Baltic
Exchange’s work, saying: “The Baltic’s specialist
knowledge and experience is vital in providing a
strong and stable environment in the UK, helping Lord Mayor David Wooton and Baltic Exchange chairman Mark Jackson

theBaltic Winter 2011 www.thebaltic.com 9

Baltic briefing

New Baltic
vice chairman
T
he Baltic Exchange
Board of Directors has
elected Quentin Soanes
to serve as its vice chair-
man. He replaces Paul Over, who
continues to serve on the Baltic
Exchange Board and as chair-
man of Baltic Exchange
Derivatives Trading, the subsidi-
ary company that runs the Baltex
Multilateral Trading Facility for dry
freight derivatives.
Quentin Soanes said: “I am
honoured to have been appointed
to this position and look forward
to supporting current chairman
Mark Jackson as ably as
my predecessor.”
Paul Over said: “As is widely
known, my core raison d’être
for participation at the Baltic has
been in the development of the
freight futures business. With
the successful launch of Baltex, it
is natural for me to wish to focus
my energies in that direction. The
expansion of the Baltic’s activities
through Baltex has greatly
increased the time commitment
of all those involved, especially
in respect to the responsibilities
for FSA regulatory requirements
that Baltex has secured and
must hold and maintain.”  
Quentin Soanes is a founding
shareholder and main board
director of Braemar Seascope
PLC, where he is head of
business development. He is
also joint managing director of
Braemar Seascope Ltd. He has
worked in the shipbroking and
shipping services industry since
1977 and specialises in sale &
purchase. He joined the Baltic
Exchange Board in 2005.
Quentin Soanes

10 theBaltic Winter 2011 www.thebaltic.com

 Baltic briefing

Lifeboat crew visits Baltic

C
rew members of the Salcombe life-
boat were the guests of honour at
the Baltic Exchange in October. The
Baltic Exchange and its members
are keen supporters of the RNLI and have spon-
sored lifeboats for nearly 150 years. Baltic mem-
bers raised over £500,000 towards the purchase
of a new lifeboat for RNLI Salcombe, The Baltic
Exchange III, which entered into service in 2008
and is stationed at Salcombe. The Tamar class
vessel has a range of 250 nautical miles and a
top speed of 25 knots.
See www.salcombelifeboat.co.uk for updates
from the Salcombe station. Lifeboat crew enjoyed lunch at the Baltic

Salcombe yawl
weekend
T
he Baltic held a weekend of yawl racing in Salcombe at the beginning of October, raising
£6300 for the Salcombe lifeboat and £1000 for the Salcombe Yacht Club. The Salcombe
Yawl is a small sailing dinghy restricted class native to Salcombe in south Devon. Built
traditionally by hand from mahogany with wooden spars and varnished decks, the Salcombe
yawls are serious racing boats attracting fierce competition.
There were various events throughout the weekend, including fund-raising dinners and
lunches, with the main focus being on yawl racing between the Baltic members and the Salcombe
lifeboat crew.
Organised by a Baltic Exchange member Mike Robson and the Yawl Owners Association,
12 yawls were provide by, and skippered by, their owners a very generous loan of boats and time.
Lifeboat operations manager Graham Parker said: “We were very lucky with the weather – even if
there could have been a bit more wind at times. I’d like to say a huge thanks to the Baltic Exchange
members, Yawl Owners Association and Salcombe Yacht Club. I hope that this will become an annual
event but can’t promise such wonderful weather every time.”

Position Team Boat Helm

1st Baltic Exchange Astraea Dan Bridger
2nd Howe Robinson Firecrest Andrew Savell
3rd Platou 179 Pas Encore Richard Fulford Smith
4th Nomikos Lobster Michael Webster
5th Pacific Basin Zenga AJ Squire
6th Gray Page Ladybird Davis Edmonds
7th Offshore Cox Sula Chris Winzar
8th Clarksons Kingfisher Michael Knowles
9th Baltic Ladies La Chouette Ian Savill
10th Brown Jenkinson Quince Andrew Sterling
11th Holman Fenwick Blinkie Philip Smith
12th Inshore Skylark David Sworder

theBaltic Winter 2011 www.thebaltic.com 11

 Baltic briefing

Baltic Exchange
honours Maersk
Mc-Kinney Møller
T
he achievements of Maersk Mc-Kinney Møller, aged 98, were
celebrated at a lunch attended by the legendary Danish ship-
owner and held in his honour at the Baltic Exchange this October.
The occasion marked his 20 years as a Life Honorary Member of
the Exchange.
Welcoming Mr Mc-Kinney Møller to the Baltic Exchange,
chairman Mark Jackson said: “It is a delight that you have been
able to accept our invitation and I very much hope that you will feel
that you are back among friends.”
Referring to Mr Mc-Kinney Møller’s speech of 1991 when he
accepted his Life Honorary Membership, Jackson continued:
“During your speech in October 1991, you talked about the
professionalism of the Baltic membership, their thoroughness and
attention to detail, but nonetheless the way in which everyone was
expected to stand by the arrangements they had agreed verbally.
I am pleased to say that the Baltic still demands these standards
of behaviour and remains a firm proponent of the highest possible
standards in all matters in shipping.”
Mr Mc-Kinney Møller first visited the Baltic Exchange in 1936
as an apprentice to the British shipping firm H.Hogarth & Sons. AP
Møller-Maersk has conducted its business through Baltic Exchange
members since the early 20th century and its London company has
been a member since 1951.
Previous recipients of Baltic Exchange life membership awards
have included IMO Secretary-General Efthimios Mitropoulos (2010),
Sammy Ofer (2009), the Duke of Edinburgh (1953) and Winston
Churchill (1954).
Maersk Mc-Kinney Møller

Gibsons Class of
summer party 1954
B F
altic member firm EA Gibsons held its summer staff party in London, ormer Baltic chairman Eric Shawyer and friends met for lunch aboard
with 200 guests from its offices around the world attending. HQS Wellington this November for the tenth such gathering of ship-
brokers who first joined the Baltic Exchange in 1954.

Left to right: Arild Brune (Gibson Oslo), Patrick Allen (Specialised Gibson),
Maria Allen, Ellen Brune, Julian Robinson (S&P, Gibson) Class of 1954

12 theBaltic Winter 2011 www.thebaltic.com

 Baltic briefing

Rigel lifts Charity Baltic

quiz night
Baltic 2011 Cup
A
total of 16 teams competed in the Baltic’s

R
igel was the victorious team at the Baltic evening tournament with Rigel beating Quiz Night in November, raising over £700
Exchange five-a-side football tournament Clarksons, Howe Robinson, the Baltic, for the charity Cancer Research. A Baltic
which took place in November on London’s Old Lykiadpolous, Maersk Broker along the way, Exchange team consisting of Willy Lyth, Pat
Street pitches. 11 teams participated in the before beating L Dens 2-1 in the final. Swayne and Duncan Bain were the winners of

?
the Charles Macmillan Trophy, narrowly beating
HSBC by half a point.

Sadly departed
W
e regret to announce the recent passing of
The winning the following Baltic members:
Rigel team
Malcolm Beard
Members will learn with regret of the death of

New Year Malcolm Beard, aged 81. Mr Beard was first

elected a member of the Baltic in 1952. From

wine tasting competition

1968 until his retirement in 1994, he was the
Principal for M D Beard & Co Ltd.

Derek Cook

T
he Baltic will be running a wine tasting com- Mr Cook was first elected a member of the Baltic
petition evening on 2 February, led by David on 16 November 1954 and represented Howard
Hughes. The evening will involve tasting eight Houlder & Partners throughout his membership.
different wines followed by a curry and will be He was a Baltic retired member between
held in the Baltic Bar. To book your place, please 1987-2002.
contact Crispin Eccleston.
Email: ceccleston@balticexchange.com Nicolaos J Hadjipateras
Mr Hadjipateras was first elected a member of
the Baltic Exchange in 1969 representing John
C Hadjipateras & Sons Ltd. He also served at
the Council of the Greek Shipping Co-operation
Committee.

Lumir Kubat
Mr Kubat was first elected to the Baltic Exchange
in 1986 for Intrasped (London) Ltd until 1994,
when he became a Retired Member.

Jim Sibree
Mr Sibree was elected a member of the Baltic
Exchange in the 1970s representing James A
McLaren & Co Ltd.

theBaltic Winter 2011 www.thebaltic.com 13

Baltic Briefing

BECC tie with bankers,

but battered by
Braemar at Lords
T
he City Twenty 20 competition this high as the bowlers took up the challenge. BECC on a pitch moistened by a handy
year re-located to the iconic JP Getty’s Unfortunately the Lloyd’s batsman proved September shower.
estate at Wormsley, a venue that hosts typically formidable, and in conjunction with a Bang! The carnage was terrible as the
county cricket as well as test match pedantic no ball controversy (their star batsman vaunted BECC top order, slayers of Stock
touring sides and is generally considered among being caught off a bouncer with three fielders Exchange and Lloyd’s, were cut down by a
the finest cricket grounds in the world. outside the ring) they were able to cruise home variety of S&P, Dry Cargo and IT demons, and
A fitting setting therefore for some Baltic in the last over despite two wickets for Freeland apart from some defiant stroke-play by HSBC’s
Exchange CC heroics against their mighty (well and another tidy spell from man of the match Charlie Russell, the innings subsided largely
funded) foes from the Stock Exchange and Procter. without trace to an extent that need not be
Lloyd’s, both of whom boast a number of Lloyd’s went on to beat the Stock Exchange recorded in this report.
recent first class players within their ranks. in the last game to retain the trophy in front of a However, we are generous enough to
However, as their portfolio disclaimers testify, rapturous, sun-baked crowd, and the success acknowledge the ease and style in which
past performance is no guarantee of future of the event immediately led to a return invitation Braemar’s Guy Newton and Billy Price were able
gains, and SECC captain James Bruce (ex from the Getty family for 2012. to knock of the runs in only 11 overs, despite
Hampshire and England A fast bowler, now Having graced one of the finest cricket an impressive debut from fast bowling hope
RBS banker) found himself credit crunched grounds, the Baltic was privileged to end its Paul Farren, to record a victory celebrated by
as BECC’s openers got off to a blazing start season at undoubtedly the greatest of them Captain Kidd in the style of Henry V at Agincourt.
in the opening game, reaching 65 from the all in St John’s Wood, for a match at Lords As masters of the gentlemanly art of graceful
first seven overs. Henry Walpole continued the against the corporate cricketing colossus defeat, the Baltic was pleased to have the
carnage with a 30 ball 50 as the Baltic reached that is Braemar Seascope. After months chance to share a conciliatory drink with their
a competitive 167 from their allotted 20 overs. of kidology about the relative strengths of hosts and commence negotiations for a return
Bowling has always been viewed with their XIs, Braemar captain Henry Kidd won to Lords next year.
suspicion by most Baltic players (and usually the the toss and had no hesitation in inserting Jamie Freeland reports
reverse by opposition batsmen), however some
clever off-spin from new cap Ollie Dannatt (ICAP)
and Angus Proctor (ACM/GFI) kept the SECC
largely in check until a nail-biting final over saw
seven required, then three off the final ball after
an inspired series of non-turning deceptors from
Dannatt. A spliced blow, some manic running
and a fumbled return saw the Stock Exchange
record a two with an unprecedented tie resulting
– heartily celebrated by the Stock Exchange.
Frustrated but inspired, the Baltic immediately
tore into City T20 cup holders Lloyd’s, and the
opening fireworks exploded with even greater
ferocity as the 100 was brought up in the tenth
over. This time the undoubted star of the show
was the princely Proctor, who in partnership
with Walpole peppered the hospitality tents
with towering sixes to record 52 off 37 balls to
add to the century recorded against the same
opponents in the all day game earlier in the year.
A cameo from Chris Owen (HFW) saw the
total to 174 in the 20th over and hopes were The Baltic boys at JP Getty’s estate

14 theBaltic Winter 2011 www.thebaltic.com

 Baltic Briefing

YBA night
A
nother successful Young Baltic night
took place at Pause in central London
earlier this year. With over 200 ship-
ping professionals aged 35 and under
attending, the gathering was one of a series of
get-togethers organised by the Baltic throughout
the year. A Christmas lunchtime drink is planned
in the City for Young Baltic members. Contact
Cris Eccleston for further details. Email: ceccles-
ton@balticexchange.com
Callum Beaumont (SSY), Fivos Ilyadu (SSY), Alexander Tsavliris (ICAP), George Gravanis (PLATOU),
Eleana Danga (Vogt & Maguire), Stefanos Altsitzoglou (SSY)

Guy Heskin (Howard Houlder), Jonathan Crawford (L Dens), Thomas Skogstad (Clarksons), Paul Farren-Rigel (Clarksons), Peter Love
Kevin Havis (Howard Houlder), Adam Cook (L Dens) (Clarksons), Phil Harding (Stemcor), Jonathan Braham-Everett

Suraj Kamdar (ICAP Tanker Projects), Alexander Tsavliris (ICAP), Mark al-Agraa & Jacqueline Norde (Clarksons) and
Jo Simmonds (Howe Robinson), Paal Norenberg (MOL London) Dimitrios Georgantis (Howe Robinson)

Sam Edwards (Beaufort Shipping), Sarah Anthony (Howe Robinson) & Fotis Mourikis, Jacqueline Norde & Mark al-Agraa (Clarksons)
Sam Round (PCL)

theBaltic Winter 2011 www.thebaltic.com 15

Baltic Briefing

Friends reunited
T
he annual lunch for
retired Baltic mem-
bers took place in
the fine surrounds
of London’s Merchant
Taylors Hall this autumn.
Former shipbrokers came
from as far away as Australia
came to renew old friend-
ships and relive the good
old days.

Michael Attwood, Tim Brown John Proctor, Perry Perera

Bernie Miles, John Wood, Laurie Castle Tim Patridge, Derek Webb, Richard Seal

Michelle Pink and Julian Gretby Martin Hill, Derek Smith, John Maskell

John Lemos, Diamantis Lemos, David Cleveland Eric Spall, Terry Northwood, RK Till, Ken Amess

16 theBaltic Winter 2011 www.thebaltic.com


Christmas
crackers
David Hughes proposes some wine matches for your festive fare
W
ell, here we are at that time of year
again and in not too many days
time, Santa’s call will light up our
households with merriment and
the gift of giving.
And part of that giving is also to ourselves, for
it is this time of the year that we decide to treat
ourselves and look to pay that bit more than usual
for our glass of Christmas cheer.
Now what do we splash out on to match our
festive feasts? Traditionalists will have turkey, oth-
ers seek a pairing for game, goose, roast beef,
pork or an eye-catching array for vegetarians.
All’s fine then with all these options until we
add the killer touch – gravy! Wine is meant to
match food not a hot, sometimes rich and spiced
concoction made to granny’s ageless recipe.
But still, it’s a must. And then on to the plate go
pickled onions, red cabbage, gherkins and my
favourite, pickled walnuts – all of them soaked
in vinegar. Add to this that what is about to be
poured at the table will not be the first glass of
the day...
So what do we do? Well, in my household,
at exactly 10.30am (or the opening of the third
present – whichever is earlier) we twist the cork
from a good bottle of Champagne. I then enjoy
a large, pre-lunch glass of Sherry, preferably the
salty-dry Manzanilla, happily knowing my wine
choices are at the ready.
Wine is very much a personal desire. One
will say game must be matched with Claret,
another will shout the corner of Burgundy. So
what I am going to propose are purely my per-
sonal thoughts, based on the fact that we’ll all
be pouring gravy over the food and indulging in
the odd pickle.
Turkey: White – Chardonnay from Australia,
California or France’s Mâconnaise, preferably with
a little oak, will add some structure and be a fine
match. If red, one of the weightier cru-Beaujolais
such as Morgon or Brouilly and do try for 2009.
Beef: Cabernet-Sauvignon from Bordeaux’s
Medoc (left side). For good value, look for the top
Châteaux, many of which have ‘second labels’.
2000 to 2006 were all exceptional vintages
and most can drink now. South America offers
less expensive options: look for the excellent
Cabernets from Chile or Malbecs from Argentina.
Game: Here, I’m for the Northern Rhône
with its wonderfully structured wines made from
the Syrah grape. Good value comes from vil-
lages such as Saint-Joseph, Cornas and Crozes-
Hermitage. Southern Rhône, primarily made with
Grenache grapes, has excellent value offerings:
Vacqueras, Lirac, Rasteau, Gigondas or a good-
name Côtes du Rhône. This is also the home of
a humdinger of a Rosé – Tavel. Not cheap, it has
the character to match most dishes.
Roasted pork: Another favourite and if you’re
indulging in salty crackling and a good brambly
apple sauce, then do give my surprising match
a go: Gewurztraminer from Alsace; the lychee,
honey and spice combination really do work.
Duck and goose: have a big following.
Here, acidity is needed to counter the fatti-
ness, especially if gooseberry compôte is on
show. Sauvignon Blancs from New Zealand and
South Africa or the Loire Valley where Sancerre,
Quincy, Menetou-Salon & Pouilly Fumé come up
trumps. If red, I’d go for a good Pinot Noir from
the New World or Burgundies from the lighter
Santenay, Rully, Mercurey up-to the ‘big boys’ -
Chambertins etc., if you pocket allows.
The cold cuts: Gammon is a big favourite on
Boxing Day in our household joined on the plate
by cold turkey. After the previous day’s excesses,
a vibrant, fruity red wine, preferably lightly chilled,
is required and here look to a Beaujolais-Villages,
Chiroubles or other favourites, made with the
Cabernet-Franc grape from the Loire valley, the
wines from Chinon, Saumur-Champigny and
St-Nicolas- de-Bourgueil have delicious dry
raspberry nuances.
These wines will also match the late-night
sandwiches where, should you prefer the
theBaltic Winter 2011 www.thebaltic.com
Baltic Briefing
vibrancy of a steely, minerally crisp white wine, try
a Riesling from Australia’s Clare or Eden Valleys or
the rising star from Austria, Grüner-Veltliner.
Puddings: Here, custard does for puddings
as gravy to our main treat. With Christmas pud-
ding, I find best matches are a glass of Spain’s
rich Oloroso Sherries, a Muscat from Rutherglen
in Australia’s Victoria State, LBV Port and/or for
an additional kick to your custard – blend in a
large glass of Advocaat.
Mince pies: Go best with a cup of tea!
However, if alcohol is still the vogue of the
moment, again a rich Sherry or Malmsey (and
they are so good!) or even try a cold beer from
the fridge!
This is the last article of the year and I wish
to thank the many of you who have sent very
kind and supportive messages in response to
these missives.
And so, whatever your choice of tipple, it is
Christmas, which does justify spending just a bit
more for those bottles.
I wish you all a most enjoya-
ble Christmas and health and
happiness for 2012.
Cheers!
17
Baltic Briefing
Sporting contacts
There are many sports clubs associated with the Exchange and, in most
cases, they are open to both members and staff of member companies
Baltic Association Football Club
Stephen Calafti
Anglo Greek Chartering, The Baltic Exchange
38 St Mary Axe, London EC3A 8BH
Tel: +44 (0) 20 7283 9621
Cricket Club
Jamie Freeland
AM Nomikos, 4th Floor
40 Grosvenor Gardens, London SW1 0EB
Tel: +44 207 591 1800
E-mail: jf@amnomikos.com
Key Baltic Exchange contacts
Management
Tel: +44 (0) 20 7283 9300
Fax: +44 (0) 20 7369 1622/1623
VPN 171 2000
E-mail: enquiries@balticexchange.com
Chief Executive
Jeremy Penn
Tel: +44 (0) 20 7369 1624
E-mail: jpenn@balticexchange.com
PA to Chairman and Chief
Executive
Jill Bradford
Tel: +44 (0) 20 7369 1621
E-mail: jbradford@balticexchange.com
Baltic Exchange Charitable
Society
Richard Butler
Tel: +44 (0) 20 7283 6090
E-mail: richard.butler@baltic-charities.co.uk
Head of Finance
Duncan Bain
Tel: +44 (0) 20 7369 1627
E-mail: dbain@balticexchange.com
18
Golfing Society
Chris Cox, c/o Frank Symons Ltd
Devonshire House
146 Bishopsgate, London EC2 M4J
Tel: +44 (0) 20 7377 5423
E-mail: info@balticgolf.co.uk
Lawn Tennis Club
Crispin Eccleston
Tel: +44 (0) 20 7369 1654
E-mail: ceccleston@balticexchange.com
Sailing Association
Simon Cox
Howe Robinson Shipbrokers
77 Mansell Street, London E1 8AF
Tel: +44 (0) 20 7457 8421
Government Broker
Pat Swayne
Tel: +44 (0) 20 7369 1668
Fax: +44 (0) 20 7623 6644
E-mail: pswayne@balticexchange.com
Dispute Resolution
Barrie Wooderson
Tel: +44 (0) 20 7369 1674
Fax: +44 (0) 20 7623 6644
E-mail: bwooderson@balticexchange.com
Communications
Bill Lines
Tel: +44 (0) 20 7369 1653
E-mail: blines@navigatepr.com
Membership Manager
Jackie Harrison
Tel: +44 (0) 20 7369 1633
E-mail: jharrison@balticexchange.com
Events Room Hire
Jill Bradford
Tel: +44 (0)20 7369 1621
Email: jbradford@balticexchange.com
theBaltic Winter 2011 www.thebaltic.com
Sub-Aqua Club
Lorraine Burns
The Baltic Exchange
38 St Mary Axe, London EC3A 8BH
Tel: +44 (0) 20 7369 1638
E-mail: lburns@balticexchange.com
Young Baltic Association
Crispin Eccleston
The Baltic Exchange
38 St Mary Axe, London EC3A 8BH
Tel: +44 (0) 20 7369 1654
E-mail: ceccleston@balticexchange.com
Baltex
Paul Stuart-Smith
Tel: +44 (0)20 7369 1670
pstuartsmith@balticexchange.com
Marketing
Robin King
Tel: +44 (0)20 7369 1637
E-mail: rking@balticexchange.com
Freight Market Department
Willy Lyth
Tel: +44 (0)20 7369 1625
E-mail: wlyth@balticexchange.com
The Baltic Exchange (Singapore)
Philip Williams
8 Eu Tong Sen Street
#17-87 The Central
Singapore 059818
Tel: +65 6377 0654
E-mail: pwilliams@balticexchange.com
The Baltic website
www.balticexchange.com
Logbook
The short sea
pioneers
Although the roll-on, roll-off principle isn’t new, pure freight-carrying
roros only started to emerge after WWII, as Ambrose Greenway explains
T
he roll-on, roll-off principle is certainly
not new and I have a picture post-
card of a stagecoach crossing Lake
Windemere on a rudimentary wooden
pontoon ferry fitted with ramps. Trains began to
be transported across water on ferries as early
as 1833 and the first car ferry, Canadian Pacific’s
diminutive wooden Motor Princess, began oper-
ating between Vancouver Island and the main-
land in 1924. Pure freight-carrying roros, how-
ever, only began to emerge after WWII.
The freight roro was really a development
of the US designed bow-loading Tank Landing
Craft (LST) and its use was pioneered by
Colonel Frank Bustard, an army transportation
officer who witnessed landing trials at New
Brighton by UK-built LSTs prior to D-Day.
An enterprising man, he had quit his job as
passenger manager for White Star Line before
its merger with Cunard in the early 1930s
and established the Atlantic Transport Steam
Navigation Co with the idea of offering cheap,
no frills transatlantic travel using two former
30,000gt Red Star Line ships. Sadly the plans
of this would-be Freddy Laker of his day were
scotched, partly by the government, which
had invested heavily in the Cunard-White Star
merger and did not appreciate funding the
purchase of potential competition, and then by
the outbreak of WWII.
When peace returned, Frank Bustard &
Sons Ltd’s Transport Ferry Service chartered
three LSTs in 1946 and modified them to
operate as military leave ships between
Hamburg and Tilbury, their black, white and
blue funnel colours being those chosen for
the projected transatlantic venture. On 21 May
1948 a commercial service for road trucks
and trailers was inaugurated between Preston
and Larne, effectively offering a door-to-door
service, and Belfast was added to the schedule
20
in 1950 after the addition of a fourth ship.
The company was taken over by the British
Transport Commission in April 1954 and three
more LSTs chartered to start up services from
Tilbury to Antwerp and Rotterdam in place of
the original Hamburg service. All seven were
taken up by the government in late 1956
during the Suez crisis.
BTC’s increased financial muscle led to the
delivery by noted ferry builders Wm Denny &
Sons in 1957 of the first purpose-built, stern-
loading freight roro Bardic Ferry, a 2,550gt
vessel with accommodation for 17 first- and
38 second-class passengers in addition to
13 private cars, 48 trailers, two vans and
19 freight containers, crane loaded on to
the long after upper deck. She was fitted with
twin rudders and driven at 14 knots by two
Sulzer diesels.
Sister Ionic Ferry followed a year later and
improved sisters Cerdic Ferry and Doric Ferry
in 1961-62. Gaelic Ferry was added in 1964,
inaugurating the shorter Felixstowe-Rotterdam
service, and over the next two years two
US-built landing ships were purchased, the
LST Baltic Ferry and the former LPD Celtic
Ferry, both of which had twin funnels. The final
ASN roro was the 18-knot, 4,190gt Europic
Ferry, completed by Swan Hunters in 1967 for
the Felixstowe-Europort service, which later
saw service in the Falklands campaign.
Meanwhile, across the Atlantic a short-lived
service between Florida and Puerto Rico in the
late 1950s with the trailership Carib Queen,
a converted landing craft, had bankrupted
her owners, but in 1960 Containerships Inc
introduced the first new US trailerships, the
4,680gt/2,100dwt Floridian and New Yorker
designed by George C Sharp and built in
Baltimore in 1960 to carry both vehicles and
containers. The following year, Australian
theBaltic Winter 2011 www.thebaltic.com
National Line took delivery of the similar-sized
Bass Trader from Newcastle NSW for service
between Melbourne and North Tasmanian
ports. She could carry 1,400 tons of cargo
including cars, packs of processed timber,
general cargo and loaded semi-trailers and
was propelled by twin aft-located 18 cylinder
Napier Deltic turbo-charged diesels. In addition
she was stabilized and had controllable pitch
propellers and a bow thruster.
The next developments in short-sea roros
came with Wallenius Lines 5-ship Aniara series
of bow-loading car carriers between 1963
and 1965, the latter year also witnessing
the delivery of Holland Steamship Company’s
Rijnstroom for a twice weekly Amsterdam-
Shoreham shuttle. As both terminals were
within locked areas, she was fitted with
twin side ramps aft. A year later near sister
Amstelstroom was completed for the Hull route
while Denmark’s DFDS introduced the first of
several different types of freight roro, the small
bow-loading Suffolk which carried 25 trailers of
Carlsberg lager across the North Sea.
In Germany, Henry Stahl’s Washbay Line
built the 1,000dwt stern-door roros Alster
and Lynn in 1967/68 for its Hamburg-Kings
Lynn/Boston service, the roro deck being
principally for agricultural machinery, whilst
Argo Line built the similar-sized Antares
and Arcturus to transport rolling cargo and
containers between Bremen/Hamburg and Hull
in association with Associated Humber Lines.
An internal hinged ramp allowed roro access to
the upper deck.
France, Italy and Sweden placed freight
roros in service towards the end of the
1960s and the design concept mushroomed
during the next decade, its popularity
being greatly boosted by Per Hendriksen’s
Mercandia series.
 Logbook

The Canadian-built LST Empire Baltic opened Frank Bustard’s ASN’s Denny-built Bardic Ferry was the
Tilbury-Hamburg service in September 1946 first purpose-built freight ro-pax

Floridian and New Yorker of 1960 were the first ANL’s trans-Tasman roro Bass Trader (1961)
US-built trailer ships reversing into her Burnie berth

HSM’s Amstelstroom of 1966 in her second guise as Vroon’s DFDS’s Suffolk (1966) ended her days as the Saudi Nawaf,
Mediterranean Express seen entering Jeddah

Washbay Line’s Lynn of 1968 approaching the Elbe estuary Argo Line’s Arneb joined sisters Antares and Arcturus in 1969

theBaltic Winter 2011 www.thebaltic.com 21

People, places, plcs
Scary times for shipping
Orders – or a lack of them – for new ships have been at the centre
of discussions in recent times and the orderbook is “quite scary”,
according to Moore Stephens partner Richard Greiner. However, in
the current economic climate, cost control is very much in focus
T
he “most important thing to notice was
the remorseless climb in operating costs
stopped in 2009” as owners brought
costs under control, Richard Greiner
says. He made his remarks at a conference to
discuss the shipping accountant’s Operational
Costs survey for 2011, which included 26 ves-
sel types.
However, Moore Stephens’ quarterly surveys
of confidence in the shipping sector show that
the industry is downbeat, with confidence at a
three-and-a-half year low and a downward trend
for the past six quarters.
In the latest confidence survey, which ended
in August 2011, concerns were expressed over
the orderbook, rising costs of marine fuels and
the global economy.
Overall expected cost increases for this year
are 3.8%, with at 3.7%, a similar expectation
for 2012, Greiner said. Respondents to the
Richard Greiner, Moore Stephens partner
22
survey were dominated by Europe (34%) and “no magic solutions”, he told delegates. While the
Asia (46%). past decade was the most prosperous shipbuild-
According to the latest survey, the main ing supercycle, he said, 10 years ago there was a
factors influencing operating cost were finance “pretty grim outlook” in the aftermath of 9/11 and
costs at 26% followed by crew supply at 25%, the dot-com crisis. At that time, the problem area
with demand trends at 14%, labour costs at was Asia not Europe and since then there has
12%, competition at 11% , raw materials at 9%, been a complete reversal, with a decade of sus-
with other costs amounting to 3%. tained growth in Asia. This was an indication he
Operating costs for repairs and maintenance said that the economy “does change tack” and
were highest for container ships this year at 8% perhaps other countries should be considered.
year on year. For bulk carriers the figure was 7.6% The oil price was another key issue. “The
and tankers 0.8%. Operating costs for stores had whole of the world was economically engineered
dropped for tankers and container ships during around $30 per barrel,” Dr Stopford said. In the
the year, with companies making savings due to past five years “we have suddenly gone from an
using alpha type lubrication systems. environment where energy and particularly oil
As far as dry docking costs were concerned, was very cheap – and we built our ships accord-
there was little differentiation as to the location of ingly – to one in which oil costs $100 per barrel”.
the yard doing the work or the age of the vessel. IEA forecasts have also changed from these low
However, there was a small decrease for dry- levels to as much as $140 per barrel.
docking for tankers and dry cargo vessels, with In consequence, Dr Stopford said, from an
strong increases in costs economic point of view “our society is out of tune
for container ships. with the current price of oil”, with all that it implies
in terms of cost when moving cargo by sea. The
Cost decade other key issue is burgeoning Chinese imports.
SHIPPING’S next dec- “We have a very strong trend here which was
ade will be a cost decade totally unpredicted,” he said and it is becoming
not a revenue decade, problematic to know where the volume of trade
according to Clarksons’ is going to go next. However, he said “we are
director Martin Stopford. moving into the 2010s with a scenario which is
While the past decade not so different from the last decade”.
was about getting ships During the 2000s, the “only possible strategy
on the water, the empha- was to get ships on the water”. In the effort to get
sis now was to search ships, the price was negotiated upwards and for
for solutions to get costs a panamax topped $90m. Today, he said $27m
down, he told a Moore was “a bit optimistic” but he added “we are not
Stephens conference on down to real distress levels yet”.
operating costs. The issue now for ship yards is that they
The emphasis on the have nearly doubled capacity during the boom
environment, and new time and “are now getting geared up to compete
environmental regulation with each other to maintain their capacity during
will mean more costs and the coming years when probably there won’t be
theBaltic Winter 2011 www.thebaltic.com

Clarksons’ director Martin Stopford
enough ships to fill all the yards”.
The position of the forward order book is
looking a “bit thin” he said. From 2012 “the order
book falls away fairly sharply and that is going
to put a lot of pressure on prices”. According
to Dr Stopford, after the credit crisis yards
dropped their prices to “somewhere not far off
break-even”.
There has been a renaissance in the off-
shore oil business and at the moment offshore
represents 30% in value of the order book.
In terms of future trends, “everybody is feeling
a bit nervous”, he said.
Substantial over-capacity is one issue, with a
lot of yards trying to get capacity under control.
What happens in terms of future investment
and whether ship yards are closed is a matter for
speculation.
The second issue, according to Dr Stopford,
is going to be the oil price. “It looks like oil and
energy are going to be much more expensive”.
This is coupled with a fleet of ships which were
designed for a much lower oil price environment.
Three years is not very long for a massive indus-
try like shipping to get to grips with this. With a
quadrupling of the price of bunker oil “you are
going to change the business”, he said.
The focus on ships and logistics is going to
change over the next 10 years. The IMO is targeting
this area, which includes the Energy Efficiency
Design Index and emissions. Dr Stopford’s view
is “we are being driven back to the basic eco-
nomics of improvement engineering, which is
taking existing technology, looking very carefully
at how we want to apply it today and getting the
technology right. We have to search for solutions
to get our costs down.”
Shipyard over-capacity, energy costs and
the environment are all correlated, he said.
Shipyard over-capacity
will mean cheaper ships,
lower earnings and a
strategic focus on cost
control. Bunker prices
might now be $500 per
tonne when the ship was
designed for $50 per
tonne, and low sulphur
alternatives might push
the prices to $900, with
IEA forecasts of $1000 to
$1500.
“Cost management
will have a much greater
urgency than in the past
decade.”
IMO measures
reduce CO2
A NEW study commissioned by the IMO on the
impact of mandatory energy efficiency measures
for shipping shows that they will lead to “signifi-
cant” reductions in greenhouse gas emissions, in
particular as far as carbon dioxide is concerned.
The study found that by 2020 an average
of 151.5m tonnes of annual CO2 reductions are
expected which the study estimates will increase
to an average of 330m tonnes annually by 2030.
The measures, the report says will mean a sig-
nificant reduction in fuel consumption, saving fuel
costs in the industry.
Mandatory measures to reduce emissions
were agreed at the IMO’s Marine Environment
Protection Committee meeting in July this year,
with a new chapter on regulation on energy
efficiency for ships added to the MARPOL con-
vention. The rules are expected to come into
force on January 1,2013. They make the Energy
Efficiency Design Index mandatory for new ships
and also a Ship Energy Efficiency Management
Plan for all ships.
The report was prepared for IMO by classifi-
cation societies Lloyd’s Register and Det Norske
Veritas. Among the findings, the report estimates
that estimated reductions of CO2 for combined
EEDI and SEEMP from the world fleet mean a
fuel cost saving of around $50bn in 2020 and
$200bn by 2030, if using fuel price increase
models taking into account the switch to low
sulphur fuel in 2020.
Club warns on costly
distracting technology
THE London P&I Club has warned that improve-
ments in telecommunications technology on
board ships can create unwelcome distractions,
leading to casualties.
In its StopLoss Bulletin, the club notes
that an alleged causative factor in a recent
theBaltic Winter 2011 www.thebaltic.com
People, places, plcs
pollution incident involved the duty officer
attempting to make a Skype call on his laptop
during his watch. A VDR playback revealed that
the officer of the watch was listening to a news
bulletin from his home country, which was being
streamed through a laptop computer. The officer
appears to have missed a radar target and a VHF
warning call while listening to the breaking news
from home.
This is far from the first time that the clubs
have warned about technological distractions,
the follow-on from the ARPA assisted collision,
where bridge teams simply fail to look out of
the window.
The club says: “On-board communication
has improved significantly over the past few
years, with technological advances enabling
crew to use mobile phones and laptops to stay
in contact with their family and friends who
are ashore.
“However, the use of such equipment at inap-
propriate moments may distract crew from the
navigation or operation of the ship.
“Another issue is the risk of being exposed to
excessive information and simply being unable
to process it all. Bridge equipment is increas-
ingly sophisticated and it can provide the crew
with access to extensive information regard-
ing the relative positions of other ships. But,
unless it is used in a focused manner, it can
confuse, rather than clarify, and ultimately prove
counter-productive.”
Club warns
Panama Maritime Chamber has opened up its
membership to international shipowners with
vessels registered in Panama – making it
the equivalent of a Panamanian Ship-
owners’ Association.
José Digeronimo, chairman of the Panama
Maritime Chamber said: “There are over 9,000
vessels registered under the Panama flag, and
our aim is to involve and help shipowners with
representation, information, education, network-
ing, trade missions and most important, lobbying
on their behalf”.
Digeronimo added: “I am sure that by joining,
shipowners will realise added value, as we are
the shipowners’ representatives in all the tri-
partite meetings being held in Panama in respect
of the Maritime Labour Convention.”
He continued: “With the latest ratification, 20
ILO member states, representing over 54 per
cent of the world gross tonnage of ships, are now
parties to the Convention.
“Of the 20 ratifications, nine have been
received in 2011. It is expected that the addi-
tional 10 ratifications will occur in the next two
months making it possible for the MLC, 2006 to
enter into force in 2012.”
23
Comment – Michael Grey
A maritime key to
recovery?
I
f you are a certain age, and hail from the United
Kingdom, you might well remember the post
war export effort, with which it was hoped
to retrieve this kingdom from the depths of
desperate indebtedness that had accompanied
the cessation of hostilities. Creative minds in
the ministry of propaganda (there was a less
pejorative name for it) who had spent the war
years dreaming up campaigns to help us win
by chopping up aluminium saucepans to build
Spitfires and warning us to keep our secrets
to ourselves, now urged every manufacturer to
“Export or Die!”I suspect it was more of a threat
of commercial extinction than being dragged
away from the lathe to face a firing squad for
concentrating on domestic production, but there
was no equivocation.
And it was an immensely successful
campaign, as there was an immediate surge in
overseas exports; quite remarkable considering
the privations on the home front, which saw
rationing maintained for many years, and a curb
on domestic consumption. Firms which had
been effective in selling goods overseas were
lauded to the skies in Pathé Newsreels and in
the newspapers. There was something heroic
and patriotic about exporting, filling up all those
crates which would soon be on their way to the
docks to get us out of hock.
So it is interesting to see that there is
increasing attention being given to the way in
which Europe’s mostly negative trade balance
might be shifted to reduce the terrible debt
burden that spills over from the Eurozone to
all the surrounding countries in the EU. It is
clear that we cannot go on the way we have
been, with these great post-Panamax argosies
from the east arriving at our ports stuffed with
consumer durables and all the trappings of a
comfortable life, returning to the Orient with
thousands of empty containers and those with
cargo in them filled with shredded plastic and
waste paper, with the odd box full of Cheddar
cheese or Scotch whisky. It is not that long ago I
went to see the “Great Wall of China” which was
not the ancient monument stretching thousands
of miles from Beijing, but a stack of empties
24
Michael Grey
about 10 high and two miles long at Felixstowe,
waiting to be shipped back to the east.
And while we had the same sort of mad
imbalances in the Pacific trades, it was clear that
the only commodity that Europe was shipping
to China was money. Now the Chinese have
it all, and they are hard put to spend it, being
sensibly reluctant to purchase European debt,
no matter how beguiling the bonds are dressed
up to appear.
So it is international trade that will get us
out of the fix we are in, just like it did in the
1940s and 50s. It is a riposte to all those
sandal-wearing vegetarians who want us to buy
only home-produced goods and to subsist on
locally grown turnips. It is a powerful spur to
manufacturers who, for too long, have dallied
with the domestic markets, or those across the
Channel, when they should have been learning
Mandarin and Cantonese, Portuguese (for the
Brazils, of course) and leaping on aircraft with
their order books for these distant places.
Always supposing they have something worth
theBaltic Winter 2011 www.thebaltic.com
selling from a manufacturing industry for too
long regarded as passé , when compared to the
fashionable products of the City.
We could also start getting a bit more
celebratory about the balance of payments and
the contribution of invisibles like shipping and
tourism to the national wealth-making machine.
It is not that long ago that the publication of
the “invisibles” figures was seen as a major
event in the Chamber of Shipping and the
Baltic Exchange, with press conferences
attended by city scribes who would gasp at
the ways in which our ships and shipbrokers
were generating wealth for the nation, with
TV broadcasts showing the same queue of
lorries outside the dock gates shown every
year, illustrating the staggering sums that were
being earned for chartering and hauling goods
around the world in British bottoms. There was
always a special paragraph emphasising the
importance of the “Cross Trades”, which always
deserved an explanation for the benefit of those
ill-informed hacks who thought it was some sort
of market in international anger.
But would it work today, after a generation
when such matters became almost peripheral
and the UK merchant navy withered away to
so very little, and the money the “Red Ensign”
fleets were earning found its way to bank
accounts in Tel Aviv and Copenhagen, Paris and
Miami, along with all those remittances to Manila
and Mumbai?
It’s not that long ago there was a living to be
made in international shipping, and the UK was
the carrier to the world. Is it just fanciful to think
that shipping, which is every bit as important
as the principal conduit of trade, could return
to these shores? A huge proportion of all those
exports that dragged the UK out of the depths
following the last great conflagration were in
ships, which were earning for this country. Sea
trade is every bit as legitimate a way of wealth
creation now as it was then, only today, alas, it
tends to be building wealth for others. “Export
or die!” said the urgent posters of the post-war
years. It’s a bit dramatic for the 21st century, but
the message is clear enough.

Torrid times for
tankers
Frontline, Hoegh and Genmar are just some
of the tanker companies feeling the heat as
the market meltdown continues
T
anker shipping’s biggest players have
been struggling to restructure their
finances. As Frontline put it, when
announcing its third quarter results last
month, “The tanker market has shown a strong
negative development in the last two years.
“Rates are currently at operating cost levels
with no contribution to capital and vessel values
have fallen approximately 25-50%, depending
on age, during the last year. If the weak market
continues it is likely to lead to significant financial
problems for the whole tanker industry.“
In announcing its results, Frontline said
that while it had secured funding for two of
its newbuildings, another five remained to be
funded and if solutions were not found the
company could run out of cash early in the new
year.
None would doubt the commitment of the
company to finding the necessary solution to
its problems although this may result in a
substantial restructuring of the way it and its
subsidiaries operate.
Problems at Frontline, ratings agency
Moody’s was quoted as saying last month might
lead US Stock Exchange Listed Ship Finance
International to revisit its charter contracts.
Meanwhile last month also saw General
Maritime and its subsidiaries, except those in
Portugal, Russia and Singapore file for relief
under Chapter 11 of the US Bankruptcy Code
and in conjunction with the filing says that it has
secured new capital of at least $175m as a result
of agreements with key lends, including Nordea
Bank on a financial restructuring of the company.
Gas carrier Hoegh LNG also saw its net
deficit rise almost three-fold in the first nine
months of the year although the company’s boss
Sveinung Stohle remained upbeat on prospects
going forward.
Last month also saw the announcement
that Danish owner Erria’s negotation with Uni-
Tankers looks set to result in a sale of Erria’s nine
strong fleet of chemical carriers in exchange for
a 15% stake in Uni-Tankers.
Scorpio Tankers announced last month that
it is planning a public offering of 7m shares of
common stock to fund the purchase of two new
52,000 dwt tankers that form part of negotiations
with Hyundai Mipo yard in South Korea. Part of
the proceeds of the offering, the company says
are to be used to repay outstanding debts
under the company’s revolving credit facility with
Nordea Bank.
In announcing OSG’s results chief executive
Morten Arntzen revealed that: “Our international
flag tanker markets deteriorated further in the
third quarter as new deliveries outpaced the
market’s ability to absorb them and our Asian
customers continued to substitute shorter
haul Middle East crudes at the expense of
West African crudes. Economic and political
uncertainty continue to run high across the
globe, with European sovereign debt issues
and an uncertain fiscal and monetary picture in
Washington impacting consumer and business
confidence.
“The potential fallout has prompted analysts
to trim their global growth and oil demand
forecasts. This has also resulted in much tighter
lending markets for the shipping industry. As a
result, new tanker orders have fallen dramatically
theBaltic Winter 2011 www.thebaltic.com
Tankers
this year and the orderbook is now at its lowest
level in six years.
“This is encouraging, as continued ordering
discipline combined with earlier scrapping of
vintage double hull tankers will be required to
bring about a recovery in our crude transportation
markets.”
The woes of the tanker market have led
some observers to suggest that scrapping
is the route to follow. Some analysts predict
that the larger tankers will not survive past
their fourth survey because of, among other
issues, their un-ecofriendliness in the current
regulatory environment. However according to
a report by Bloomberg, analyst Alex Adamou, of
VesselsValue, believes that a number of vessels
are now more attractive for their scrap value as
asset values fall and freight rates plunge.
Cargo contamination
Contamination is one of the major sources of
cargo claims in the tanker sector, the UK Club
has warned.
The club has prepared a “tanker
contamination Claims Checklist” which identifies
the main causes of cargo contamination arising
from both on board and shoreside and compiles
the key points to consider in seven sections
running from the pre-loading phase through to
discharge and sampling.
Key points to be considered include whether
different grades of cargo can be arranged
to maintain the degree of separation required
and whether the ship can maintain the required
cargo carriage and discharge temperatures.
25
S&P

Making a
market
Basil M Karatzas offers a ‘seakeeping analysis’
of vessel asset prices

A
lthough the second half of 2008
raised sea-changing developments in
the shipping industry that brought
a vertical dive to the very bottom of
the abyss for freight rates, within nine months
the markets bounced respectably back to
approximately break-even freight levels.
At that stage of the cycle, most companies
and shipowners still had working capital aplenty,
and the drop to the bottom had been as swift as
the ensuing rebound, and thus held out a sliver
of hope for a more fundamental recovery.
In addition the “priming” of the world econo-
mies and the generous “quantitative easings”
was at “full steam ahead” setting, and there were
extenuating circumstances in certain market
segments. For example, in the first half of 2009,
30% of the VLCC world fleet was tied up for
storage projects on behalf of financiers playing
the oil contango game and thus artificially main-
taining a higher tanker tonnage demand than in
actual terms. All these factors meant that vessel
asset prices didn’t fluctuate as dramatically as
one might have expected, at least in a funda-
mental way. The limited transactions that took
place then were from owners who got taken
by surprise by the vertigo of the perfect storm,
and thus most of those transactions were under
distress and usually at rock bottom prices.
Almost three years later, the economic recov-
ery has been agonisingly slow, almost like a
slightly leftwards tilted L-shaped graph that
some economists had expected. With new
vessel deliveries flooding the market on a daily
basis, a “jobless recovery” depending on mon-
etary policies running out of funding in the West
and a slowing Chinese economy, and a political
crisis brewing in the Continent, freight rates have
been hovering low, bouncing along the bottom,
well below levels sufficient to make payments for
interest and amortisation; and, in certain seg-
ments, most notably in the crude tanker market,
even below vessel daily operating expenses.
While 2008 saw abrupt changes in the
markets, since last year the markets have been
experiencing the doldrums, a complete apnea
as far away from any prevailing winds, tailwinds,
tradewinds, westerlies or any type of forward
blowing wind as possible. Actually, it seems
that headwinds in some shipping segments
and crosswinds in other have caused vessels to
keep operating at below break-even levels burn-
ing cash and depleting working capital for about
a year now, and thus have started pressuring
downwards asset prices.
Although 2011 started on a even keel and
with full sail dreams in terms of vessel pricing,
the momentum has been deteriorating ever
since, even more so since the end of the sum-
mer. The volume of deals has remained sub-
dued overall with a “buyers’ strike” in effect for
transactions at prices that are not clearly in deep
“value-territory” for any type of vessel. “Market
noise” has been on an increasing trend with
“chat” of circulation in the market of candidate
vessels for “distressed” sales or restructurings.
For modern vessels, however, it cannot be
said with absolute certitude that asset prices are
falling in an “expected”, sizeable, quantifiable
manner, since the activity for the sale of such
vessels is as thin as a spider’s web. An obvious
limitation of any value assessment for very

ASSET CLASS JAN O1, 2011 JUNE 30, 2011 OCT 30, 2011
PROMPT RESALE 10-YR VESSEL PROMPT RESALE 10-YR VESSEL PROMPT RESALE 10-YR VESSEL
TANKER
VLCC $108.0 $60.0 $105.0 $58.0 $99.0 $35.0
SUEZMAX $69.0 $40.0 $70.0 $40.0 $63.0 $25.0
AFRAMAX $52.0 $28.0 $52.0 $27.0 $52.0 $23.0
MR TANKER $36.0 $19.0 $38.0 $19.0 $36.0 $19.0
DRY BULK
CAPE $59.0 $38.0 $55.0 $35.0 $53.0 $28.0
PANAMAX $36.0 $28.0 $34.0 $26.0 $33.0 $20.0
SUPRAMAX $31.0 $24.0 $31.0 $22.0 $29.0 $20.0
HANDYSIZE $28.0 $21.0 $27.0 $19.0 $26.0 $17.0
Table 1: Selective asset prices. Data source: Karatzas Marine Advisors

26 theBaltic Winter 2011 www.thebaltic.com


modern vessels is that such numbers have more
of an “indicative” than “predictive” merit. There
have been four transactions for modern VLCCs
in 2011, with two of them at the beginning of
the year under the auspices of the creditors to
a buyer provided with generous financing even
by pre-Lehman Bros excess liquidity standards,
and two vessels to an industrial buyer six months
ago. At least there have been four transactions
in the VLCC market that are deemed enough
to “make a market”. However, there have been
zero sales whatsoever for resale suezmax
tankers year-to-date and thus any assessments
are based in last year’s benchmarks when
more than $5bn were invested in this particular
market sector.
For smaller or older tanker, dry bulk and
containership vessels, there has been more
activity in the open market and at arm’s length
transactions than modern, expensive tonnage.
Surprisingly enough, since the end of the sum-
mer an increased volume of transactions took
place for the first and second generation of
double-hull tankers, and all such transactions
took place at levels significantly below ‘last
done’. Most of such transactions, in our opinion,
do not satisfy the definition of Fair Market Value
(FMV) since they mostly took place for either tax
reasons (leases) or under the strong ‘encourage-
ment’ of the creditors.
Based on market data compiled by Karatzas
Marine Advisors, Table 1 depicts “market
expected” asset prices for prompt resale and
10-year old vessels in both the tanker and
dry bulk markets at three points in 2011: dur-
ing the first week of this year, the end of the
second quarter and the end of October of this
year. Such data are based on observations
from market transactions assumed to
represent arm’s length asset exchanges taken
place under no compulsion either from the buyer’s
or seller’s side.
On Table 2, a basic calculation of percentage
ASSET CLASS H1 2011
PROMPT RESALE
VLCC -2.78%
SUEZMAX 1.45%
AFRAMAX 0.00%
MR TANKER 5.56%
CAPE -6.78%
PANAMAX -5.56%
SUPRAMAX 0.00%
HANDYSIZE -3.57%
Table 2: Percentage changes in asset prices. Data source: Karatzas Marine Advisors
changes in asset prices is performed for both
prompt resale and ten-year old vessels for the
first half of 2011, the period between July and
end of October 2011, and year-to-date until
the end of the October. The first half of the year
has shown that asset prices have held better
than the later part of the year; modern vessels,
especially tankers, held better than older or dry
bulk vessels. MR tankers and supramax and
handysize vessels seem to outperformed the
remaining sectors in terms of least amount of
decline, an observation also verified by the over-
all optimism (or better phrased, lesser extent of
pessimism) in those sectors.
However, year-to-date the situation has been
a bit more sober as it seems that modern
(prompt resale) tanker and dry bulk vessels lost
6-10% of their value, while ten-year old vessels
have dropped in price much more drastically.
Ten-year old VLCCs and suezmax tankers lost
close to 40% of their value since the beginning
of the year, while equally sized dry bulk vessels
showed a “better” performance with a loss of
only about 26%. Overall, MR tankers for both
prompt resale and 10-year old vessels retained
their value, a corollary to the fact that the MR
tanker was the first to take off like a rocket after
Hurricane Katrina and the first to crash down to
earth, with most of the pain behind the sector, at
least at tonnage supply and demand dynamics
are concerned.
Again, these calculations are based on
observable data and under the assumption
that such transactions are always open market,
arm’s length transactions, an assumption that
has to be questioned in certain circumstances.
Modern vessels have not been transacted
as frequently as older tonnage so far this year. A
cursory list of explanations may include:
• They tend to have a higher cost basis and
therefore their transaction might entail a
bigger loss of money (equity and debt) in
absolute terms; an equitable percentage
Q2 2011
10-YR VESSEL PROMPT RESALE 10-YR VESSEL
TANKER
-3.33% -5.71% -3.33%
0.00% -10.00% 0.00%
-3.57% 0.00% -3.57%
0.00% -5.26% 0.00%
DRY BULK
-7.89% -3.64% -7.89%
-7.14% -2.94% -7.14%
-8.33% -6.45% -8.33%
-9.52% -3.70% -9.52%
theBaltic Winter 2011 www.thebaltic.com
S&P
drop in price translates to a much higher loss
in absolute money for more expensive (mod-
ern) vessels than cheaper tonnage.
• Further to this point, modern vessels with
high cost basis present a higher risk for price
finding as an equitable percentage spread
between “bid” and “ask” can translate to
a much higher aberration from the market
price, a risk not well bearable by buyers.
• At a time when banks are not cheaply funded
and have to be conservative with their liquidity,
usually modern, expensive vessels are more
difficult to be debt financed; banks prefer
smaller loans and cheaper vessels rather
than concentrating their financing on smaller
number of sectors or assets.
• Modern tonnage is usually technologically
up-to-standards and therefore provides a
lower risk of technological obsolesce and
thus better prospects to weather out the
cycle and any new regulations that might
appear on the horizon.
• Finally, modern vessels, even those with a
high cost basis, make much better candi-
dates for restructuring, equity injections, and
soft financing than candidates for outright
sales in the open market; and, of course,
“sales” on such bases are far apart from
the parameters for the definition of the Fair
Market Value (FMV).
Vessel asset prices have fallen more precipi-
tously for 10-year old vessels than prompt
resale tonnage. It’s to be seen whether the
‘market’correctly discounts a prolonged and
anaemic recovery in shipping.
Basil M Karatzas is Senior Managing Director with
Karatzas Marine Advisors & Co, a maritime advi-
sory firm based in New York, and specialising in
shipping finance advisory, restructurings and place-
ments, vessel brokerage and appraisals. E-mail:
info@BMKaratzas.comand at +1 713 545 5990.
Y-T-D 2011
PROMPT RESALE 10-YR VESSEL
-8.33% -41.67%
-8.70% -37.50%
0.00% -17.86%
0.00% 0.00%
-10.17% -26.32%
-8.33% -28.57%
-6.45% -16.67%
-7.14% -19.05%
27
BIMCO
Taking time to
make the change
Revising BIMCO’S SALEFORM is a hot topic for S&P brokers,
as Grant Hunter explains
T
he revision of any standard contract
as internationally used and univer-
sally accepted as SALEFORM is not
a matter lightly undertaken. For the
past year, a drafting team from BIMCO, work-
ing together with brokers from the Norwegian
Shipbrokers’ Association, (the original authors
of the form) have carried out a thorough
review of this contract under the watchful gaze
of the industry.
The process began with market research
among users of the contract worldwide to
establish whether an update was needed and,
if so, to what extent the form should be revised.
From this initial research the feedback was
very clear – while the present SALEFORM
largely met the current needs of the industry, it
Contract end-users had the opportunity to comment on the updated draft version of SALEFORM
28
would certainly benefit from a modest update
to reflect commonly applied amendments and
rider clauses. Of equal importance to those
consulted was that the general principles and
structure of SALEFORM should be retained.
It is a contract that is very familiar to those in
the S&P sector and its provisions are very well
tried and tested. The drafting team’s challenge
was, therefore, how to make this well-used
international sales contract even better.
Armed with pages of comments and
suggestions from the initial industry consultation,
the drafting team began its work in December
2010. The team identified the key clauses
most commonly amended in SALEFORM
and identified areas where ambiguity in
the existing version had led occasionally to
theBaltic Winter 2011 www.thebaltic.com
misunderstandings and uncertainty. Given the
agreed modest scope to the revision, the team
were able to prepare a “consultation” draft
in just a few months of beginning the
project. The first draft was reviewed and well-
received by BIMCO’s Documentary Committee
in June 2011.
From the outset, BIMCO felt that an
essential part of the revision process for such a
universally used contract as SALEFORM should
be to give the end-users of the contract an
opportunity to comment on the updated draft
version before it was put forward for publication.
A series of international open seminars were
arranged in Asia and Europe during September
and October where buyers, sellers, brokers and
lawyers were able to review and comment on
the draft revised contract. All the seminars were
well attended and provided an excellent forum
for discussion of SALEFORM. The feedback
received was constructive and positive towards
the revised draft.
In a series of final meetings during October,
the drafting team went through all of the
comments received from those who attended
the seminars – many of those comments simply
affirming the decisions already made by the
drafting team in terms of the scope and extent
of the revision.
Some of the key features of the revised
SALEFORM include:
• Clause 2 (Deposit) – the lodging of deposits
is no longer limited to “joint” accounts – other
types of account acceptable to the parties
may be used, such as an escrow account
held by a broker or lawyer.
• Clause 3 (Payment) – the ’93 edition of the
agreement required the buyer to pay the
purchase price on delivery of the vessel,
but made no provision for the fact that a

deposit had already been lodged. The new
edition makes it clear that the buyers are to
release the deposit and pay the “balance” of
the purchase price, as well as any additional
sums due (such as cost of bunkers).
• Clause 5 (Time and place of delivery and
notices) – to assist the parties, the revised
agreement contains new notice requirements
for the sellers to notify the buyers of the
vessel’s itinerary 20, 10, five and three days
from intended date of tendering notice
of readiness.
• Clause 6 (Divers inspection/drydocking) –
this Clause has perhaps received the most
attention during the revision. The order of
the sub-clauses had been changed so that
underwater inspection is now the primary
option, as this reflects the common practice
in the industry. The buyers are to give the
sellers sufficient notice of their intention to
carry out a divers’ inspection – at least
nine days before the vessel’s intended date
of delivery.
• The Clause 6 now contains a clear
statement that the sellers cannot tender
notice of readiness before completion of
the underwater inspection. This is an issue
on which the ‘93 edition is silent and which
has been the source of uncertainty and
occasional dispute.
• The allocation of costs and expenses for
the underwater inspection and, if required,
drydocking has been made much clearer
in the new edition. The basic principle is
that the buyers pay for inspections and
drydocking unless any damage or defects
are found, in which case the costs and
expenses pass to the sellers.
BIMCO is aiming to have the revised contract available at the beginning of 2012
The seminars provided an excellent forum for discussion
• Clause 7 (Spares, bunkers and other items)
– this Clause has been partially re-drafted to
make a clearer distinction between items on
hire or owned by third parties and which are
not part of the sale, and items that were on
board at the time of inspection that were hired
or belonged to third parties, which are to be
replaced by the sellers before delivery takes
place. The distinction is made to ensure that
the buyers are not left without items essential
to the safe and legal operation of the vessel,
which would prevent the vessel from sailing
once sold (such as lifeboats and lifejackets).
• Clause 8 (Documentation) – here the
Certificate of Transcript of Registry may
theBaltic Winter 2011 www.thebaltic.com
BIMCO
now be faxed or e-mailed to the closing
meeting with the original to be sent as soon
as possible after delivery. This reflects a
common timing issue with this document in
ship sales.
• A more detailed provision relating to the
vessel’s Continuous Synopsis Record has
been added to Clause 8 as well as a
provision that requires the sellers to provide a
letter stating that the vessel is not, to the best
of their knowledge, blacklisted.
The final draft of what will be codenamed
SALEFORM 2012 took priority place on the
agenda for adoption when BIMCO’s 60-strong
Documentary Committee meet in
Copenhagen on 10 November.
The industry consultation
process during the development
of SALEFORM 2012 and the huge
interest it has generated in this
project has spurred the drafting team
to get the new edition completed
within the space of a year. This is no
mean feat when it is considered that
the average time taken to revise an
existing standard form or develop a
new one is around two years.
Although we cannot promise
to have SALEFORM 2012 “in the
shops by Christmas”, BIMCO will
be working very hard to have the
revised contract, accompanied by
detailed explanatory notes, available
by January 2012 in electronic format
on idea – BIMCO’s online charter
party editing system.
29
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Capesize
confidence
falters
PricewaterhouseCoopers report warns of
a distorted shipping market
A
ccountant PricewaterhouseCoopers is
warning that there are risks of a dis-
torted shipping market, particularly as
far as capesize tonnage is concerned
as the industry attempts to tackle the burdens of
a sizable orderbook and stagnating demand for
iron ore deliveries. The dry bulk shipping report
Capes of no hope? suggests there will be a 40%
increase in the existing capesize fleet within the
next three years.
The report says that while there are 1,200
capesize ships with a value of $45bn, a further
450 are on order over the next three years.
Although some of these orders may be can-
celled, the accountant warns that any assump-
tion that demand for iron ore and coal will
continue its upward trend – with all that implies
for capesize tonnage – seems over-optimistic.
According to the report, China has signifi-
cantly over-invested in recent years “leading to
excess capacity across a range of fixed assets.
Current levels of investment are so high that
even the government’s ambitious infrastructure
plans can be met with no additional input growth.”
In addition, PricewaterhouseCoopers
says, other emerging markets are not big
enough to replace China in terms of demand.
“The increasing fleet sizes of the major iron
ore miners will exacerbate the effect on the
capesize market” .
Although India has been highlighted as a
potential alternative source for iron ore imports,
it has its own domestic supplies and the report
considers that even very rapid growth “would
have a minor effect, compared to small changes
in Chinese demand”.
Orders of capesize tonnage have remained
high because of confidence in the growth of the
Chinese market, the report suggests. However,
it warns: “The market also faces longer term
demand side problems. Capesize demand is
dominated by the prospects for Chinese infra-
structure spending.”
Infrastructure investment in China has been
significantly higher in recent years when com-
pared with other high-growth Asian economies,
with the report suggesting a Chinese investment
of 13.5% points more of GDP each year than the
average of its closest peers.
“During the long economic life of much of this
investment, this can largely be seen a cumulative,
suggesting China has invested twice as much
during this period as its peers did. At the same
time, the consumption side of GDP necessarily
grew more slowly, meaning the consumption to
investment ratio was even poorer.”
PricewaterhouseCoopers says that due to
high levels of spending on infrastructure projects,
economic targets can be achieved simply by
“maintaining the current level of output of new
roads, rail, and so on. This implies no growth will
occur in demand for the key raw material inputs
for these types of investment.”
According to David Smith, assistant direc-
tor of PricewaterhouseCoopers strategy, the
expected growth in iron ore demand is unlikely
to materialise and “will be exacerbated by
the vessel building programmes being under-
taken by the large mining companies. This
will decrease the amount of cargo available
on the spot market, at a time when the fleet is
increasing dramatically”.
theBaltic Winter 2011 www.thebaltic.com
Dry Bulk
Vale and Rio Tinto are two companies that
are carrying an increasing amount of iron ore on
their own ships. According to the report, Vale
already carries 25% of its iron ore and its VLOC
fleet will increase to 19 in the next two years,
with a further 16 VLOCs being built for Berge
and Oman Shipping, which will be chartered to
the Brazilian giant. Rio Tinto, meanwhile, has
three VLOCs on order and, the report says:
“Since the iron ore producers will ensure high
utilisation of their own vessels first, the effect
of falling capacity utilisation on the rest of the
market will be magnified.” The report concludes,
however that acquisition of large fleets of VLOCs
“is unlikely to be advantageous”.
When the report was produced, Smith
said: “While rates in the capesize sector have
improved over the past three months, we see
this as a temporary respite. Continued over-
capacity is likely to push rates back towards
operating costs, creating significant pressure for
owners trading in the spot market.”
While it has been suggested that increases
in coal imports could provide a glimmer of hope,
China has a number of initiatives to limit the need
for coal imports. With its own supplies of coal,
the government has been investing in railways
and canals to transport it round the country and
also developed a high voltage power network to
transmit coal powered electricity.
PwC expects that rates are likely to fall
further in the medium term because of over-
tonnaging and “owners should continue exist-
ing despite current valuations”. Alternatively, it
suggests, long term charters might be a good
strategy despite current rates.
31
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Offshore upbeat
Offshore companies remain upbeat on prospects,
although there was a warning from the US House of
Representatives over Deepwater Horizon
U
S House of Representatives Sub-
Committee on Coast Guard and
Maritime Transportation held a meet-
ing last month to review the latest
investigations into the causes of the Deepwater
Horizon oil spill and the US Coast Guard’s
response to it.
According to sub-committee chairman Frank
LoBiondo, nearly all reports noted that area
contingency plans were not adequate for a spill
of the magnitude of the Deepwater Horizon and
needed to be updated to include protocols for
the use of dispersants and other spill response
technology, as well as the latest information on
environmentally sensitive areas.
“I am also concerned with findings indicating
that the Coast Guard’s oil spill response and
Sub-committee chairman Frank LoBiondo
marine environmental protection mission has
withered over the past decade as a result of
an emphasis on homeland security missions,”
LoBiondo said.
He also said he was concerned that officials
at all levels were unfamiliar with the National
Contingency Plan, which covers oil spill
response. “I am particularly alarmed that senior
leaders at the Department of Homeland Security
were either unaware or simply misunderstood
how the plan functions.” He added that units
like the Deepwater Horizon continue to operate
in US water and will shortly be deployed in
Cuban waters. “Each of these operations, if not
properly regulated by the Coast Guard with the
support of the department, could potentially
cause another catastrophic spill. As such we
theBaltic Winter 2011 www.thebaltic.com
Offshore
cannot afford to sit back and take our time in
implementing the lessons learned”.
Dockwise results
Heavylift specialist Dockwise posted a net profit
of $8m for the third quarter of the year, compared
to $3m in the second quarter of the year, with
revenues of $113m, up from $109m despite
tough market conditions. Operational highlights
for the third quarter included contract awards
of $135m, including the Claire Ridge project for
BP, and the start of steel cutting for Dockwise
Vanguard, which already has the FOSO Goliat
booked as cargo, which the company says at
60,000 tonnes is a transport record.
According to chief executive Andre Goedeé:
“Tendering activity continues to be strong, and
in a period which has seen several successes,
security the transport of the FPSO Goliat on
the Vanguard is an outstanding achievement.
Dockwise will be proud to break its own record
for the world’s heaviest single cargo, and the
award is the best endorsement of our decision
to proceed with our new vessel”.
According to the company revenues in the
heavy marine transport segment for 12% lower
in the third quarter than in the second, with static
demand from the military and port and marine
industry. The company said it expected to see
“subdued revenues in the conventional heavy
marine transport market persisting into 2012.
Measures taken to mitigate the impact
of market conditions include changes to
contractual terms with clients, an adjustment
to the payment schedule on the Vanguard and
the sale of Dockwise subsidiary Dockwise Yacht
Transport to Coby Enterprises Corp.
According to Goedee, Dockwise is
now focused on the oil and gas industry
and its core business of heavy marine
transport, transport and installation, and also
logistical management.
33
Offshore
Bourbon upbeat
Although some owners may be feeling the pain
of rising oil prices, Bourbon was upbeat about
prospects in the fourth quarter. As Bourbon
chief executive Christian Lefevre put it: “In a
favourable oil and gas environment, the price
per barrel of Brent – $113 over the quarter
– remains at a high level and the North Sea
activity stated to recover before the steady
upturn in rates for offshore vessels worldwide.
Prospects for increasing utilisation rates and
daily rates are set fair for the fourth quarter in
deep and shallow water offshore”.
Revenues were up 17% in the first nine
months of the year compared to the same
period last year, which the company attributes
to good performance in the shallow water
offshore segment and the crewboat segment.
Bourbon took delivery of 15 new vessels during
the third quarter.
As far as the outlook is concerned, Bourbon
anticipates increase demand for offshore service
vessels in the future.
“Significant investment by oil and gas clients
and their four year prospects have been scaled
up. The outlook for a greater number of active
drilling rigs and offshore construction companies’
strong order books confirms the sharp rebound
expected on the market,” it said.
The market is expecting an improvement
in the rates of offshore vessels and a continuing
improvement in daily rates during the
fourth quarter of 2011 and in 2012,” the
company added.
Oh Kong-gyun, chairman and chief executive of the Korean Register
34
Farstad finances
Offshore services operator Farstad posted
operating income of NIOK970.2m for the third
quarter against NOK867.9m for the same period
last year.
It said in is quarterly report that while the
financial and political situation in Europe has
not resulted in uncertainty over oil prices, “the
uncertainty is first and foremost related to idle
tonnage and the newbuild activity, especially for
the markets in Asia. The rate level and the utility
rate for supply vessels in Asia have been at low
levels the whole year as a consequence of the
overcapacity of tonnage.
In Brazil, the rate level has improved through
2011, while the spot market in the North Sea
has performed well during the quarter. A general
recovery in the market is not likely to happen
before further into 2012 as a consequence of
the large number of newbuilds that are still to be
delivered and seasonal variations.
Cable contract
Nexans, a worldwide leading expert in the
cable industry, has been awarded a contract
by Chevron USA to design, manufacture and
supply a total of 138,000 feet (42km) of power
umbilicals and terminations for the Jack and
St Malo fields in the Deepwater Gulf of Mexico.
The umbilicals will be loaded out from the
new long-term storage carousel in Mobile,
Alabama dedicated to providing enhanced
logistical support for customers in the Gulf of
Mexico region.
theBaltic Winter 2011 www.thebaltic.com
The Jack and St Malo fields are located within
25 miles (40km) of each other approximately 280
miles (450km) south of New Orleans, Louisiana,
in water depths of 7,000 feet (2,100m). The
project will comprise three subsea centres tied
back to a hub production facility with a capacity
of 170,000 barrels of oil and 42.5 million cubic
feet of natural gas per day.
“Winning this major power umbilical contract
for the Jack and St Malo fields is an important
development for Nexans since Chevron is one
of the leading leaseholders in the Deepwater
Gulf of Mexico, which is a region where we are
establishing a significant reputation as a key
supplier of subsea technology,” says Ragnvald
Graff, sales and marketing director of Nexans.
“This contract award is also a vital step
forward in our strategic approach to this region
with the introduction of the new long-term
storage carousel that now improves the level of
local logistical support we can provide.“
Going for offshore growth
Global shipbuilding should be seeking growth
opportunities from the offshore industry,
according to Oh Kong-gyun, chairman and chief
executive of the Korean Register.
Speaking at the 4th Seoul International
Shipbuilding and Maritime Conference (SIMS) in
Korea, Oh explained that while the world fleet is
continuing to grow, the number of new orders
decreased within the period 2006-2009.
“It can be assumed,” he said, “that over the
coming 10 years, the yearly average newbuilding
order book will be less than that of
the past 10 years. The demand for
containers, tankers and LNG carriers
will decrease, while the construction of
offshore platforms will show strength
in the market place owing to a high
demand for energy, increased investment
in the exploitation of oil and gas and
higher oil prices. The increased demand
for deep-sea crude oil and natural gas
will also lead to heightened newbuilding
activities for deep-sea oil platforms. The
operational areas for these platforms
will be mainly in Africa and the Gulf of
Mexico”
Oh-Yoon Kwon general manager, of
Korean Shipbuilders’ Association added
that the markets were still uncertain,
Korean shipbuilders had experienced a
recovery in new orders during the first
half of 2011. To assist with securing
further new business, the yards were
concentrating on innovation and
maintaining top quality management.

New president
at ISU
Todd Busch steps down to make way for Andreas Tsavliris. Plus:
ETVs, specialised tugs and silver-bearing wrecks
A
ndreas Tsavliris, a principal of Tsavliris
Salvage Group, was appointed as
president of the International Salvage
Union at the ISU recent meeting in
Cartagena at the end of September, replacing
Todd Busch who remains on the ISU committee.
Leendert Muller, chief executive of Dutch
salvage company Multraship was elected as vice
president to replace Mr Tsavliris.
Commenting on his time in office, Busch
said that “it has been a great honour to be
the president of the ISU and to represent out
members as we have tackled many important
issues. I have greatly enjoyed my presidency and
look forward to continuing to work for the benefit
of all marine salvors.
“I am delighted to be handling over to Andreas
Tsavliris, who has vast experience of salvage and
has demonstrated great commitment to the ISU
and to the salvage industry”.
Tsavliris, for his part, said: “It is a great honour
and I am proud to have been elected president
of the International Salvage Union. I am grateful
to the members for entrusting this prestigious
position to me. As a company, we have been a
committed member of ISU for many years and I
will undertake to uphold its ideals and will always
try my hardest in the best interests of the ISU”.
The Tsavliris group’s origins go back to the
1920s and Andreas Tsavliris joined the company
in 1970. The company is one of the few salvors
to keep tugs on station and has long been a
firm supporter of Lloyd’s Open Form, which has
recently been revised.
Tsavliris was awarded the first LOF 2011
contract to salve the bulker Magnum Power,
which ran aground in the Magdalena River in
Columbia.
ETV response
Two of the emergency towing vessels due to
be phased out as part of the UK government’s
spending cuts have received a stay of
execution pending government consideration
of alternatives.
There has been considerable industry
concern about the phasing out of ETVs, which
have been kept on station round the UK coast
to respond in cases where a salvage tug is
needed urgently.
The Parliamentary Transport Committee
warned that the decision to stop the Martitime
and Coastguard Agencies provision of ETVs was
made against the findings of an independent risk
assessment and is “unwise and shortsighted”.
The ETVs were introduced on the
recommendation of the late Lord Donaldson
following the Braer oil spill and the committee
said it was not convinced that anything had
changed since Lord Donaldson’s report to lead
to the conclusion that ETVs were no longer
needed.
“ETVs represent a prudent and seemingly
theBaltic Winter 2011 www.thebaltic.com
Towage and salvage
cost-effective insurance policy for the British
taxpayer. It would take just one major accident
and any savings that had been made by the
decision to cease the contract would be wiped
out in a stroke. We urge the government to
reverse its decision to terminate the provision of
ETVs through the MCA. “
The committee further suggested that use
of commercial tugs would not be a suitable
alternative
“Unless the government can provide a
persuasive case that such capacity exists in
appropriate form and at appropriate locations,
it should recognise that the solution it has
proposed is unviable and potentially reckless.”
Concerns have also been raised about the
decision to axe the Maritime Incident Response
Group (MIRG), which has been used in fighting
fires at sea. Many maritime commentators
consider that the demise of MIRG is more
serious than that of ETVs.
Viscount Younger of Leckie was one
member of the House of Lords calling for an
effective replacement for ETVs. The government
argument has been that it is not only cost saving,
but the fact that ETVs must be able to respond
immediately and therefore cannot be used for
any other purpose. He has been quoted as
saying the decision means a return to the pre-
Donaldson state of affairs.
The government has given an interim stay
of execution for the Scottish ETVs pending
35
Towage and salvage

finding a long-term replacement. A Scottish office report is

expected by the end of the year on an alternative solution
to the problem.

Pulling power
Multraship has added to its fleet of specialised tugs and
multi-purpose vessels in recent months with the addition of
the Damen newbuilding ASD 3213 tug Multratug 3.
The tug will be employed principally in the River Scheldt in
a harbour towage and salvage role. With a maximum bollard
pull of 94.7 tonnes, an overall length of 32.14 m, and a beam
of 13.29 m, the vessel is capable of a speed of 14.3 knots.
Multraship managing director Leendert Muller
commented: “Multraship’s commitment to the Scheldt area
is well-known and was further reinforced two years ago when
it launched Antwerp Towage NV, a 50/50 joint venture with
Fairplay Towage.
“Antwerp Towage has been a great success, and we have
increased our client base and number of calls in Antwerp
significantly. Multratug 3 represents the latest phase in our
overall strategic plans for renewal and expansion. We believe
that it is now the strongest tug on the Scheldt and, with its
FiFi1 capabilities, it is set to play an important role in future
emergency response operations in the area.”

Silver find
Odyssey Marine Exploration found its second silver-bearing
wreck – that of the SS Mantola which was torpedoed during
the First World War. The ship was found about 100 miles
from another wreck – that of the Gairsoppa, which was also
carrying a cargo of silver.
A war risk insurance claim for £110,000 (at 1917 values)
was paid out for the silver on the vessel in the year that she
sank. Odyssey has been awarded a salvage contract by the
UK Department for Transport, under which the company will
retain 80% of the net salved silver value recovered.
“The incremental costs to search for the Mantola were
low as this was a contingency project in the event that our
team successfully completed the Gairsoppa search early,”
said Mark Gordon, Odyssey president and chief operating
officer. “We are planning to conduct the recovery expedition
in conjunction with the Gairsoppa recovery, which will
also make the operation very cost efficient. Securing our
ownership rights prior to recovery and funding our business
from cash-flow produced from operations has been a key
focus for us. Our share of this successful recovery in 2012
will contribute significantly to our operational funding.”
“The Mantola project is located at a depth range that
we have a lot of experience in. We have information on the
location of the cargo that should make this a great target
for testing some new technology, which will be useful for a
number of new deep-ocean projects we have planned,” said
Greg Stemm, Odyssey’s chief executive.
“As we push deeper and deeper, a lot of new and
interesting opportunities are presenting themselves.”
The salvage expedition for the Gairsoppa and Mantola will
begin in spring 2012, as soon as the weather window begins
to open up in the North Atlantic.

36

Food for thought
Ensuring seafarers have healthy food to eat and cooks are
properly trained is an important consideration for seafarers.
Plus: training senior staff, armed guards, insurance
G
ood training for ships’ cooks is
essential if crew members are to
stay healthy and that is the drive
behind the Sea Chefs project, which
was launched two years ago, a pilot scheme
that has input from Germany, Cyprus, Latvia
and the UK.
As Ralf Becker-Heins, managing director of
MSG Marine Serve, a private maritime training
provider based in Hamburg put it, ships’ cooks
are in an exposed position, subject to the
“economic arm of the owner” and also being
responsible for crew health.
Professor Becker-Heins told the International
Chamber of Shipping conference in September
that it was “amazing that there have been so
few poisoning cases. Shipowners should ensure
that those engaged as cooks are trained and
are competent”.
Key issues include knowing what certificates
an owner or manager needs to see and whether
the flag state has defined the requirements for
cooks, he says. Good nutrition is vital for future
health and some diseases might not appear
for several years, Professor Becker-Heins
told delegates.
There are no common standards for training
and certification of seagoing chefs, he said. The
Sea Chefs project was launched two years ago
and focuses on a fast-track system for training
ships’ cooks. It is only a pilot scheme and “needs
to be followed up by an experienced training
provider,” he said. There is a shortage of ships’
cooks and, in many countries, he explained
“cook training is not an issue and offered only
sporadically”. Even STCW is “missing content
on ships cooks”, Professor Becker-Heins added,
and it is only with the advent of the Maritime
Labour Convention that “all flag states will have
to take action”.
Shipmanagement, crewing and employment
and enclosed spaces
Manpower
According to Douglas Lang, managing director
of Anglo-Eastern (UK), commenting on the ICS/
ISF manpower study for 2010, “the situation in
2010 was one of approximate balance between
supply and demand”, although shortages were
more acute for certain types of vessels and
senior officer demand has “grown apace, despite
the financial crisis”. He said it was essential to
double the effort on training in the past five years
“if we are to see a healthy industry in the future”.
Brian Ingpen, who heads Lawhill Maritime
Centre in South Africa – which started life
working out of empty containers provided by
Teekay – told delegates there was a need to
interest thousands of young people in order
to get one master or one chief engineer. “The
starting place to promoting the industry is
encouraging vibrant young people,” he said.
Lawhill Maritime Centre opened in Simons
Town in March with Safmarine as a major
sponsor. The school, Ingpen said, is looking
for something different. “It is about giving your
people in South Africa an opportunity”. With
unemployment figures running at up to 40%,
the school has been attracting a broad range
of young people. “Some youngsters haven’t
seen the sea. They haven’t got the background
and the knowledge”. After three years of study,
the students will have a broad background
in the maritime industry, including the basic
elements of maritime law and insurance, but
also maritime economics, nautical sciences and
coastal navigation, so they get exposure to a
wide range of sectors.
The majority of students end up in either
shoreside shipping jobs or at sea. The aim is
to put the cadets on ships as soon as possible,
he says. Safmarine has helped with containership
training voyages. There is no state funding
theBaltic Winter 2011 www.thebaltic.com
for the centre which is dependent on the
shipping industry.
According to Lang, he finds people looking
at a career at sea to be better informed than
ever before. “They know they will get a sound
education and they will be in demand at sea
and ashore. It is not like coming out of university
burdened with debt. The sell is not that hard.”
Armed intervention
Piracy has been very much on the agenda for
InterManager and the ship managers’ trade
association declared itself to be delighted
to hear the UK government’s recent public
condemnation of piracy.
Alastair Evitt, President of InterManager, said
that it was a quantum leap in public perception to
hear the issue of piracy and merchant shipping
addressed by the UK Prime Minister David
Cameron so openly and frankly.
InterManager has campaigned for the
freedom of owners and managers to choose
to deploy armed guards on-board ships they
manage. “The UK government’s recognition of
the value of armed guards and the right of the
owner and manager to deploy them, in the right
circumstances and in accordance with BMP4,
is a great lead by the UK government and it is
InterManager’s firm belief that this stance should
be adopted by all flags and charterers that still
do not openly support it. “
InterManager says it is not calling for every
vessel to have armed guards on-board, “rather
that when a detailed risk assessment deems
this the preferred option, then individual flag
state legislation or charterparty clauses should
not obstruct owners and/or managers in taking
this decision.
“InterManager further supports on-going
37
Shipmanagement, crewing and employment
initiatives to licence the companies providing
armed guards (based on qualification,
competence and experience), to define the rules
of engagement in the event of a pirate attack
and to control the type and flow of weapons
deployed both on-board and while in transit to
and from vessels.
Bad vibrations
International Transport Intermediaries Club has
warned that shipmanagers need to use the right
contracts and have appropriate insurance in
place to cover the legal costs of defending even
weak claims.
In its Claims Review, ITIC relates the case of
a shipmanager which took on the management
of a vessel. One of its duties under the BIMCO
Shipman 98 management agreement was to
provide crew for and on behalf of the owners.
In 2004, while the vessel was heading towards
Shanghai, the master reported that it had
experienced “excessive vibration” after passing
close to a buoy marking a wreck.
After the master had left the ship at Shanghai
38
and returned home, the shipmanager received
an anonymous fax from the vessel, advising
that it had actually hit a wreck. When the vessel
reached its final destination it was drydocked,
and damage was noted. Under the terms of
the management agreement, the shipmanager
was a co-assured under the hull policy, but the
owner started arbitration proceedings against
it, claiming that substantial additional costs
had been incurred. The claim was based on an
allegation that the shipmanager was vicariously
liable for the actions of the master.
The defence of the shipmanager was that,
under the terms of the management agreement,
it had no liability for the negligence of the crew.
Rather, the manager’s sole obligation was to
provide an appropriately qualified crew.
In 2009, the owner served an revised claim,
focused on the shipmanager’s application of the
ISM code and the role of the designated person
ashore. A further allegation was made that the
bridge team, or at least the principle members
of it, were suffering from fatigue at the time of
the incident and that the shipmanager should
have been aware of this. Costs of preparing the
A healthy diet is essential for seafaring staff
theBaltic Winter 2011 www.thebaltic.com
defence had reached $659,000 by this stage.
According to the club, in 2011 the owner made
an offer to settle the claim on a “drop hands”
basis, with each side bearing its own costs.
Although the shipmanager felt that it had
been presented with an extremely weak case,
it was not possible to completely rule out the
possibility of adverse findings. Accordingly, the
offer was accepted.
ITIC says: “This case shows how important it
is to use the right contract and to have insurance
and knowledgeable assistance to cover the
legal costs and support and time needed
to defend even weak claims. The defence
of a shipmanager is always expensive and
very time-consuming.”
Enclosed spaces
While many warnings have been issued about
the dangers of entering enclosed spaces, and
in some cases masters have been brought to
trial on manslaughter charges, fatal accidents
continue to occur.
Videotel Marine International has
joined forces with Mines Rescue Marine to
launch a training series entitled “Entry into
Enclosed Spaces”.
“There is no excuse for the unacceptable
casualties we have seen recently,” Stephen
Bond, deputy chairman of Videotel said at
the launch. “Again and again, we hear of
seafarers coming to grief in enclosed spaces.
These incidents could have been avoided by
an understanding of the dangers of entering
enclosed spaces and the critical importance of
following proper procedures. We are convinced
that the “Entry into Enclosed Spaces” Training
Series will help save lives.
“We are delighted to have been able to
work with Mines Rescue Marine to create this
programme. For over 100 years, its Mines
Rescue Service has developed its specialist
skills, experience and knowledge gained from
working in a difficult and potentially dangerous
environment to effect the rescue and escape of
mineworkers from underground. This experience
has proven invaluable in helping to construct the
training programme, ensuring it is both realistic
and practical.”
With comprehensive written material,
including case studies and student exercises, the
package consists of six programmes covering
awareness; preparation and procedures;
equipment; enclosed spaces entry; emergency
procedures and rescue; and the correct use
of breathing apparatus. It is available in a
range of formats: interactive CD-ROM, through
Videotel on Demand (VOD) and VHS/DVD with
supporting booklets.
 FFA

Baltic moves
to simplify wet
freight trading
Jeremy Harris recently became chairman of the Baltic Exchange’s
Freight Market Information Users’ Group’s (FMIUG) ‘wet’ section and
talks about developments for tanker derivative traders

I
ncreasing liquidity and encouraging new mar-
ket participants to enter the Forward Freight
Agreement (FFA) market are two objectives
for Jeremy Harris, new chairman of the ‘wet’
FMIUG.
These objectives moved a step forward last
month when tanker freight derivative traders,
meeting at the FMIUG, agreed that from the New
Year all tanker FFA contracts which are traded
in Worldscale would be converted to a dollar
per metric tonne price ($/MT) when presented
to the clearing houses. This standardisation
measure will help to improve clarity about how
FFA trading works and is designed to encourage
new participants to join.
The FMIUG annual meeting on November 17
met to discuss a number of issues but the critical
one, Harris says, “was how we are going to
trade in 2012, and whether the market is going
to trade Worldscale or dollars per metric tonne”.
At the same meeting last year, it was agreed
that for future calendars where the Worldscale
flat rate had not been published by the
Worldscale Association, all trades would occur
in $/MT. This decision was taken to get around
the fact that nobody knew what the Worldscale
flat rate would be and therefore had an exposure
on what they would be settling against.
The Worldscale Association takes into
account issues like bunker prices and exchange
rates and other costs when setting the flat rate.
“As an example, if you trade Cal 12 today at 46
Worldscale points for TD3 AG/Japan VLCC you Jeremy Harris

theBaltic Winter 2011 www.thebaltic.com 39

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don’t actually know what flat rate that is and
what freight rate that is. On the other hand if the
trade was made in $/MT for Cal 12, the freight
rate would be clear,” he says.
This fixed approach offers a lot more certainty.
“Risk managers are much happier with that than
having something that was unknown,” Harris
says, “so last year a decision was made that all
future year contracts would be traded in dollars
per metric tonne to remove that uncertainty of
the unknown flat rate.
“This year we have been trading Cal 12 in
dollars per metric tonne and anything in 2011
on a Worldscale basis because in 2011 we know
the flat rate as published by the Worldscale
Association in December last year.”
Coming to the end of this year, the point
has been reached where next year all the open
interest swaps will be in $/MT. A decision needed
to be made as to whether to continue with $/MT
because of the open interest swap position
or alternatively revert to Worldscale because
that is what the “physical” shipping world
operates in. “We obviously need to maintain the
communication to the physical world in order to
maintain interest in the FFA market.”
A few years back there was a situation
where on certain routes traded in the swaps
market, the Worldscale Association needed to
adjust the flat rate mid-year. People with open
interest positions on those routes, assuming a
certain flat rate, saw those open interest swaps
values change. Harris explains that this created
a number of problems, not least from the risk
management perspective. “It is exactly that
situation that moving to dollars per metric tonne
would get rid of.”
The critical decision taken last month was
that even if trading in Worldscale points, the
contract would be sent to the clearing house
in $/MT. “This means that if the Worldscale
Association do adjust any of the flat rates, it
would have no impact on contracts that are
already in place, so everybody is comfortable
with the risk, they know what they are going
to settle against and they can mark to market
appropriately.” It is well understood how the
conversion is handled and those present at the
meeting accepted it, he says.
A discussion took place at the meeting as
to how individuals wished to trade – whether
Worldscale or $/MT – for prompt business. Harris
says that views depending on the institution from
which the trader came. Most of those who were
active in the physical market on a day to day
basis prefer Worldscale, “but we are hoping to
attract some more non-traditional participants
into the market who may find it more interesting
to trade dollars per metric tonne.” Aside from
the risk angle, this is a main driver for moving to
$/MT, Harris explains, so as to cater for those
that do not understand or want to trade in
Worldscale because they are not players in the
physical tanker shipping market.
The expectation is that this might attract
financial institutions outside those who already
participate in the physical market. The hope is
that providing the $/MT option will make it easier
for new entrants. “We need to wait and see. We
want to make the market as liquid as possible.”
Harris is working closely with the Baltic
Exchange’s new business development group
to publicise the tanker FFA market, and the
group will be approaching new entrants and
encouraging them to trade tanker FFAs. He
is one of a number of people potential new
entrants can turn to in order to find out how the
market works. “One of the feelings in the market
was that the dollar per metric tonne is an easier
unit to understand than Worldscale.”
It was clear from November’s meeting that
contact needed to be maintained with the
physical world, because the swaps are settled
against physical fixtures. “It was felt that we
needed to continue to talk in Worldscale and
dollars per metric tonne in the prompt year and
there were quite a number of issues raised in the
meeting about how that would practically work
in the market place.”
A sub group was convened to work with
broking houses and trading houses and
Trayport, who handles the software side of some
of the screens being used by traders. Harris
chairs the sub group. The issue came down to
how to present Worldscale and $/MT on a single
screen and to avoid ambiguity or confusion as
to which trading method was being used. The
group decided that for the prompt year trades
would still be in Worldscale with a minimum
theBaltic Winter 2011 www.thebaltic.com
FFA
increment of 0.1 of a Worldscale point to reflect
the expected increase in Worldscale flat rates
next year. Future years will be traded in $/MT.
For the prompt year there will be a separate
screen displaying prices in $/MT but they will not
be executable.
The Baltic Exchange will continue to publish
forward curves in dollars per metric tonne and
Worldscale going forward, even for the prompt
year, Harris says.
The meeting also considered a new tanker
route for 2012 and reviewed routes implemented
this year including TC12 (India to Japan) and
on this route it was considered it was too early
to comment although liquidity has not been as
good as people hoped. The Baltic will continue
to monitor it. The second route is TD19 which
was introduced to replace TD11 which had
been hit by sanctions on Syria. The feedback
from the group was that TD19 was a “more
representative route to be marketing,” according
to Harris.
The new route is TC22 which is a backhaul
route for TC2 which links Europe to the US
North Atlantic coast. The Baltic will go through
the process of assessing the new route from the
point of view of load and discharge points with
the aim of start publishing the route, between
three to six months if the route is considered
viable.
Harris says that he has found his role as
chairman very interesting and enjoyable so far,
and welcomes views from all sides on how to
make the FFA market work as effectively as
possible. “The Baltic Exchange is the institution
that calculates the numbers that the FFAs settle
against and we must have a system that works
well. Our door is always open.”
41
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Going green
Interferry’s recent conference in Barcelona was just one where
regulation and the challenges it presents was at the top of the agenda
A
s the shipping industry faces an ever-
increasing tide of regulation on the
environment, there are some serious
doubts about the cost of introducing
the new low sulphur requirements in emission
control areas.
Introduction of emission control areas in the
Baltic and North Sea and North America and the
Caribbean are a source of considerable concern
to shipowners, operators and governments who
are preparing to implement the proposals.
The situation was outlined in a submission to
the UK government by Maritime UK earlier this
year, when the industry body warned that while, it
supported the overall provisions of Marpol Annex
VI “these are presenting severe short-term chal-
lenges for the ferry and cruise sectors”. Maritime
UK described the economic impact as “massive”,
with potential bunker cost increases of 87% for
ships operating in ECAs. “This will mean, from
2015, up to £3.6bn additional annual cost for
shipping within 200 miles of the UK,” it told the
Transport Select Committee in a submission.
According to the submission, a German study
pointed to ferries in the Baltic States losing
40% of their traffic with nearly 1m containers
and 600,000 trailers moving from sea to land
transport. Lost port revenues and tourism for the
cruise industry, and closures of longer routes and
price increases for the ferry industry were also on
the cards, warned Maritime UK.
The issue was evidently high on the agenda
at trade association Interferry’s recent conference
in Barcelona. Interferry CEO Len Roueche noted:
“Very little is in black or white when searching for
relief from the ferry sector’s mounting economic
and political pressures. Fuel costs are frighten-
ing and regulations to slash shipping emissions,
although well-intentioned, are potentially cata-
strophic in both commercial and environmental
terms. Assessing the complex array of operation-
al and technical options often raises more ques-
tions than answers on the best way forward.”
EU regulation, or indeed any regulation, con-
tinues to be of concern to the industry. At the
Interferry conference, Jesus Bonet Company,
head of maritime safety and environment at the
European Commission, denied that the EU was
intent on deviating from IMO environmental tar-
gets. Commenting on the move to 0.1% fuel sul-
phur content in Emission Control Areas (ECAs) by
2015, he declared: “We support the IMO because
they are right – sulphur gas is bad for citizens’
health. We know this is going to be a challenge
for the sector but there are ways.”
As far as greenhouse gases were concerned,
he told delegates: “It’s not the regulator’s job to
substitute the judgement of scientists. Our White
Paper on transport aims to cut shipping emis-
sions by 40% by 2050 because the evidence
says CO2 is ruining the planet and will have a
disastrous effect on our children.” Likewise the
Energy Efficiency Design Index (EEDI) – although
not yet adopted for ferries – was “a great step
ahead”.
He acknowleged progress was slow on the
many proposals for controlling emissions through
Market Based Measures (MBM) but said an
impact assessment would be finalised in the
second quarter of 2012. “This is not about draw-
ing money from the sector,” he stressed. “We
are trying to use the market as an optimiser of
the system and strongly support a global solu-
tion. But we have said many times that, if this
is not achieved, we will come up with a way to
meet our targets that can be integrated with and
strengthen the international process.”
Alfons Guinier, secretary general of the
European Community Shipowners’ Associations
(ECSA), insisted that a regional approach to
MBM must be avoided, warning: “Shipping may
become the milk cow for funding. The fair way is a
compensation-based levy but it has to be a global
solution that can be applied to all flags.”
On sulphur content restrictions in European
ECAs, he said that no impact assessment had
been carried out on the threat of a modal shift
from sea to road. “This could be anything up
to 50% depending on the type of goods,” he
warned, “but even at 10-20% there will be a
theBaltic Winter 2011 www.thebaltic.com
Green shipping
snowball effect resulting in a vicious cycle of
fewer services, lower frequency, less capacity and
greater cost.”
Guinier also raised concerns over the future
availability of distillate fuels and use of scrubbers
he suggested might affect the stability of some
ship types. For those ships converting to LNG,
there remains the issue of bunkering facilities and
safety concerns have been raised over the place-
ment of LNG tanks on vessels.
Deltamarin concept design manager Esa
Jokioinen reported on work to find a ferry-friendly
EEDI formula within two years of it becoming
mandatory for other vessels in January 2013.
Studies for the European Maritime Safety Agency
(EMSA) had shown that the current formula pro-
duced up to 300% scatter in ferry index values
depending on their speed and capacity.
“The EEDI represents a power limit that is, in
effect, a speed limit,” he explained. “It might be
okay for some ships to reduce engine power and
slow down, but how would this work for ferries
taking into account schedules, redundancy and
safety margins?” Ferries needed a formula that
recognised their speed dependency and defined
capacity on measures like deadweight tonnage
and lane metres rather than the “possibly mis-
leading” gross tonnage calculation.
Commenting on the challenges ahead, he
said that varying design speed of ro-pax ships is
the main reason for big scatter of index values.
Capacity of the ro-pax vessel is difficult to meas-
ure and using gross tonnage may be misleading
for many of the vessels. Additionally, there are
challenges with reserve power, hotel load calcula-
tion, he told delegates, but they should be easier
to clarify if the two main points are solved.
A session on dealing with sulphur revealed
issues over the maturity of marine scrubber tech-
nology. The size and weight of equipment was a
major concern among delegates, while one fleet
director complained that trial installations of sea-
water scrubbers had shown failings in reliability,
compliance and corrosion.
The latest systems were outlined by two
43

Among the greatest challenges imposed by
the BWM Convention and the requirement
to fit type approved BWT systems are
finding space and power, and managing
the installation onto existing ships. A BWT
system must be selected that is well suited
to the particular vessel, whether it is a
retrofit or a newbuilding. Because of the
significant investment involved, an established
technology supplier with proven operational
reliability, IMO type approval and possibly
other approvals from the flag state or port
states should be chosen.
The system must be compatible with the
planned or existing ballast system and ballast
pumps. Particularly in the case of retrofit, the
system should be designed for adaptability
with modular components for installation
flexibility and preferably suitable for transport
onto the ship and to the installation space
through existing accesses. The owner/
operator and supplier need to work closely
with the installers and class.
Many installation challenges must be
met, particularly on existing vessel
retrofits, including:
• Capacity and discharge pressure of
existing pump
• How does the vessel normally conduct
ballasting operations (number and
capacity of treatment systems needed)?
• Are there ballast stripping pumps or
eductors used?
• Available power for treatment system
• Available space for equipment
• What will be the optimal BW
piping arrangement?
• Access to get the BWTS into the
machinery space
• Is a dry-docking needed to install?
• Integration of the BWTS into the ballast
control system
• If chemicals are required, consider tanks,
neutralization process and monitoring
• Special considerations for installation in
hazardous areas
• Total purchase and installation cost of the
BWM solution
The space available on an existing ship is
almost always extremely limited. Equipment
that is modular in design allows greater
flexibility to fit components into the existing
machinery space and creates an opportunity
for the system to be installed during normal
operation of the vessel. A truly modular
configuration may also allow the components
to be carried into the vessel through existing
access hatches and assembled in place,
minimizing total installation cost.
Hyde Marine, Inc. • 2000 McClaren Woods Dr, Coraopolis, PA 15108
®
The retrofit process will normally require a ship check to determine the most suitable location for
the system components and to develop the necessary engineering information and drawings
to meet the owner and class requirements. An evaluation of the degree of automation and the
control system modifications required to integrate the BWT system controls into the ship’s ballast
control system should be made, together with material estimates for pipe runs, foundations and
cabling. An experienced supplier will be helpful with the vessel inspection and data collection.
Complex retrofit projects will benefit from detailed planning and engineering, in close
cooperation with an experienced marine engineering firm.
Lessons learned from
previous installation
experiences can be
particularly helpful.
Hyde Marine had
the advantage of five
prototype systems
installed in 2000 and
2001 on three cruise
ships, a containership
with a slow speed
diesel, and a parcel
tanker. The lessons
learned from these experiences were not only excellent background for future installations, but
are reflected in the design of the IMO Type Approved Hyde GUARDIAN® System.
Selection of ballast water treatment solution
The shipowner/operator will be presented with many different ballast treatment options. They
will need to choose carefully in order to ensure the selected equipment provides best overall
economy, compliance with BWM regulations, and reliable operation for the life of the vessel.
Careful consideration must be given to the initial costs, meeting the installation challenges
discussed above, and what are the total life cycle costs of the equipment.
Among the operational challenges that should be considered in selecting BWT technology:
• What are the operating costs of the • If the system uses chemicals for any
purpose, what are the safety and logistical
BWT system?
• Does the BWT affect the operation or considerations to purchase, transport,
turnaround time of the ship? handle and store the chemicals?
• What are the maintenance requirements - • What are the risks of environmental
damage that could be associated with the
intervals and downtime?
• Is their any specialised training for crew operation of the BWT system?
• How can the operator be assured that
and officers and how will it be provided?
• Does the system operate in all water any active substance is fully neutralized
salinities or is it necessary to carry sea before overboard discharge?
water or brine?
The shipowner/operator should seek a trusted technology partner with a proven record of
successful installation and a suitable reference list, who is able to provide technical support
before and during installation, commissioning, and after sale service. The technology should
be fully tested and have received IMO type approval, meet Class requirements, and have the
capability to meet more stringent regulations if needed.
The Hyde GUARDIAN® System is a fully automatic and totally chemical-free ballast water
management solution. The system’s robust design includes an efficient, auto-backflushing filter,
which efficiently removes sediment and larger plankton, and a powerful UV disinfection system,
which destroys or inactivates the smaller organisms and bacteria. The combination of these
technologies has proven to be a cost-effective, safe, and environmentally friendly ballast water
management solution.
Thomas P. Mackey, Hyde Marine, Inc.
• +1 724 218 7001 • sales@hydemarine.com • www.hydemarine.com

manufacturers. Wartsila’s closed-loop freshwater
unit was relatively small and therefore had a lower
impact on vessel stability and payload, accord-
ing to head of environmental services Leonardo
Sonzio, who said payback time based on a
30,000gt Baltic ro-pax was around 2.5 years.
MAN project manager Marcel Lodder
described a dry scrubber using limestone granu-
late costing E250 per tonne. He said a typical
load lasted three weeks, pegged the increase
in operating costs to between 2% and 6% and
delivered payback after one year.
Speaking at the International Chamber of
Shipping conference in September, Don Gregory,
director of the Exhaust Gas Cleaning Systems
Association outlined some of the challenges
ahead. He warned that the demand for low sul-
phur fuel will drive prices beyond $500 per tonne
and said that typical short sea shipping in the EU
will witness fuel cost increases of millions.
“Bankruptcies are inevitable,” he told the
conference. Diesel demand will also hit forecourt
prices and “ship operators will be blamed” A
transition system is desperately needed, he said
in order to reward early investors and short sea
operators that fit EGCS and retain HFO will have
a “significant competitive advantage”.
Ballast water management to prevent the
propagation of invasive species has been high on
the agenda in recent times as the Ballast Water
Convention may come into force in the next year
or so.
While the necessary number of flag states –
30 – have signed up to the convention, there is
still a shortfall as far as the 35% of world tonnage
specification is concerned. While rumours sug-
gest that Panama might be on the verge of sign-
ing up – which would mean the entry into force of
the convention one year later – so far there has
been no announcement. Unless
Panama or China decide to ratify,
any shortfall in tonnage will have
to be made up among the smaller
member states.
According to a paper submitted
by the International Chamber of
Shipping to the Marine Environment
Protection Committee last year,
Convention requirements that all
ships be fitted with ballast water
management systems by mid 2017
at the latest will mean retrofitting
equipment to about 50,000 ships,
in addition to newbuilding require-
ments. This would mean fitting 20
ships a day until 2017. The ICS
has also raised concerns about
the availability of equipment for
ships with a very large ballast water
capacity.
According to Graham Greensmith, lead
specialist on the ballast water issue at Lloyd’s
Register the increasing number of available sys-
tems – 17 are currently on the market, with oth-
ers going through the approval process – means
greater choice for the owner. However the deci-
sion making process he says is a complex one
and for some ships there may be difficulties in
both selecting and fitting a system.
Supply, he suggests, is likely to be outstripped
by demand ,coming to a peak in 2017.
Classification society Bureau Veritas has pub-
lished a comprehensive set of guidelines on
Ballast Water Management Systems intended
to help shipowners, shipyards and equipment
manufacturers facing complex choices when
deciding how to implement the IMO convention
and also local rules on ballast water which apply
in some areas of the world.
According to Jean-Francois Segretain, deputy
technical director in Bureau Veritas’s marine divi-
sion, says: “Ballast water management is becom-
ing a major challenge for shipowners. There is
some uncertainty over the exact implementation
dates of the BWM convention, and there is also
a growing patchwork of local regulation, with the
possibility of even more stringent rules on ballast
in the US.
“One thing is certain, shipowners will very
soon have to have in place a means of meeting
very strict ballast water conditions. There are a
number of ways to meet stringent standards on
ballast water, but not all are as yet proven technol-
ogy. That is why we are publishing these guide-
lines now, to draw attention to what needs to be
done and to provide some clarity on the choices
facing owners and operators,” he concluded.
One recent project that has been setting
green headlines is the Hornblower Hybrid, a
theBaltic Winter 2011 www.thebaltic.com
Green shipping
former ocean-going casino which has now been
converted into a ferry which will be used to take
visitors to view the Statue of Liberty or Ellis Island.
The vessel is the first in the US to be powered
by diesel, hydrogen, batteries, wind and solar
energy. The 600-passenger Hornblower Hybrid
cuts fossil fuel use and lowers emissions by
combining clean power from multiple sources. A
flexible, innovative power management system
ensures efficient use of available power – auto-
matically switching from diesel to batteries when
appropriate, for example – with reclaimed and
recycled materials incorporated throughout the
vessel.
The Hornblower Hybrid runs on renewable
power generated by hydrogen fuel cells, solar
panels and wind turbines. Most comes from
a 32-kilowatt proton exchange membrane fuel
cell that turns hydrogen into electricity, heat and
distilled water; the electricity then runs an electric
motor and charges 192 batteries.
In addition, 20-kilowatt solar panels and two
5-kilowatt wind turbines propel and power the
vessel. Efficient Tier 2 diesel engines also kick in
to cover additional needs. Cold ironing provides
for battery charging and offsetting other power
sources while the ferry is alongside.
The vessel has a total horsepower of 1400
generated by two 700 hp shafts. It carries a
32 kW proton exchange membrane fuel cell by
Hydrogenics, two Helix Wind 5kW wind turbines,
20 kW SunPower Corporation solar panels and
two Scania tier 2 diesel engines two power two
Baldor Reliance 700 HP variable speed genera-
tors.
The Hornblower Hybrid has an operat-
ing speed of 12 knots and was converted at
Derecktor Shipyards in Bridgeport, Connecticut.
Hornblower Hybrid, a former ocean-going casino
45
Corporate viewpoint Sea2Cradle
Why make an
Inventory of Hazardous
Materials now?
The legislation for Inventories
of Hazardous Materials
The IMO Hong Kong International Convention
for the safe and environmentally sound recycling
of ships 2009 is awaiting implementation. The
convention requires the creation of the Inventory
of Hazardous Materials (IHM) onboard all
existing ships. In addition to IMO, we are now
seeing increased activity from governments
requesting an IHM as a first step towards
recycling. There are also voices being heard in
government departments who would like to see
the creation of IHM mandatory through regional
or national legislation, even before the IMO
convention enters into force. This requires
action from shipowners to start the process
sooner rather than later.
What options do shipowners
have for the creation of an
IHM?
At first shipowners may try to arrange it
themselves with their own staff. This, however,
requires specific skills, training and investment.
So the question is whether this investment in
experienced staff will be worth the money for a
limited number of vessels.
Shipowners can also hire trained third-party
experts who can perform the inventory and
create the IHM. But what makes one a trained
and experienced expert? For example, a person
that is qualified to carry out an asbestos
inspection ashore is not by definition an expert
onboard ships. At present there are only a
handful of inspectors around the world who can
provide a solid professional inventory.
The involvement of
classification bureaus
Classification bureaus will organise the
certification of the inventory in the future, but
46
Tom Peter Blankestijn,
managing director, Sea2Cradle
theBaltic Winter 2011 www.thebaltic.com
will not get involved in the creation of the IHM
themselves. All major classes are already
preparing themselves to issue these certificates,
ahead of the ratification process of the IMO
convention. Whether the certificate should be
valid for five years, as per IMO requirements, or
if they should issue these certificates with an
annual survey is a question that can be debated
between the owners and their class. In the end
this will come down to a matter of efficiency
and the cost involved.
Timing of the IHM
If a shipowner waits until the creation of an IHM
becomes a legal requirement, there is a huge
risk involved concerning the quality and price,
due to the fact that there will not be enough
inspectors available to perform this job, and it is
expected that last-minute opportunists will be
offering these services, without having the
expertise required. This means the shipowner
runs the risk that class refuses to issue the
necessary certificates. What’s more, prices of
the IHM are expected to increase drastically
because of this simple supply-and-demand
issue due to the pressure of the requirement
being in place.
For shipowners to have the maximum value
for money, timing is of the essence. Good
planning today in equipping a fleet with an IHM
will mean solid compliance with the legislation
tomorrow. This planning will ensure that the
small pool of inspectors, who are available
today, can inspect your vessels over the years
to come and at reasonable price levels.
Sea2Cradle was established to assist and
add value to your Environmental Policy and
create your Inventory of Hazardous Materials.

China might
deliberately choose
slower growth
T
hird-quarter growth figures show
China’s GDP expanded 9.1% year-on-
year in June-September, falling for the
sixth consecutive quarter to the lowest
level in two years. Yet officials gave few indica-
tions that they intend to relax measures that
have tightened bank credit over the past year. A
government-induced “credit crunch” continues
to weigh on borrowers and banks alike.
Impact
• Strategic, high-value added sectors may
benefit from selective easing.
• Slower investment growth, particularly in
property and construction, would reduce
global demand for commodities such as
iron ore.
• China’s policy-driven cycle has strained its
financial system, prompting fears of banking
sector instability.
• Banks may eventually receive ‘selective’
recapitalisation, in recognition that bad
debts have been incurred for policy pur-
poses.
What next
If the credit crunch deepens, investment, which
accounts for almost half of GDP, could col-
lapse, leading to a sharp drop in economic
growth and stress in the banking sector. To
avoid this, Beijing could ease credit restrictions
and attempt to stimulate lending. This would
lift the economy out of immediate danger and
might also curb the rise of a potentially unstable
“shadow” financial sector. However, re-expand-
ing credit would risk further increasing already
high levels of non-performing loans (NPLs). To
avoid another boom-bust cycle, China may
prefer to grow more slowly.
Analysis
The credit crunch is a response to the preced-
ing surge in the domestic economy, fuelled by
stimulus measures implemented during the
2008-09 global financial crisis to offset a mas-
sive fall in exports. This stimulus was funded
largely by bank lending.
Poor lending practices, absence of due-
diligence and, in some cases, illegality
associated with this lending are now feeding
into higher rates of NPLs (see CHINA: Beijing
fails to quell fears over banks, October 26,
2011). In mid-2009, the authorities began
subtly to tighten lending rules, and credit
and cost pressures in the small and medium
enterprises (SME) sector began to mount (see
CHINA: Rising costs and falling demand threaten
SMEs, September 23, 2011). Over the past
year, policy shifted decisively from encouraging
credit growth to reining it in, and economic
growth has slowed.
Property boom
The post-2008 credit boom is bound up with
the property market. Much bank lending went
to developers rushing to build, and a con-
struction boom supplemented ‘traditional’
investment in infrastructure and industry. The
theBaltic Winter 2011 www.thebaltic.com
Oxford Analytica
clampdown imposed by the government over
the last year, reinforced by higher bank reserve
ratios, has cut off the ready supply of bank
credit, leaving many property businesses strug-
gling to find finance to complete projects or
provide working capital.
Simultaneously, potential buyers have
become reluctant to purchase new proper-
ty. Rocketing prices put houses beyond the
reach of most ordinary urban Chinese. Amid
purchase restrictions and other well-publicised
measures to cool the market, potential buyers are
choosing to ‘wait and see’, rather than rushing
to buy.
A sharp fall in property prices would place
local governments under financial stress. The
value of the security they could offer for loans
would fall, as would the revenue they could
generate from land sales (estimated at around
half, or more, of their total revenue), making it
hard both to repay existing loans and sustain
their current high level of investment, which
constitutes a significant share of GDP.
47
Oxford Analytica

Beyond banks
Negative real interest rates on traditional bank
accounts have encouraged investors and
depositors to pursue an array of alternative
lending arrangements. These promise higher
returns by lending to cash-starved private
businesses, often at elevated rates of 20-25%.
Distressed borrowers, especially SMEs,
have turned to this alternative credit market,
which comprises an assortment of lending
arrangements that range from bank-intermedi-
ated lending that exploits loopholes to circum-
vent regulations, to largely unregulated ‘private’
lending, to illegal loan-sharking. Estimates of
the scale of “informal” or “shadow” lending are
inherently difficult and also vary depending on
how it is defined, but a figure of around 4 tril-
lion renminbi is common, around 6-7% of the
bank deposit base and 10% of GDP. Although
a relatively small share of the overall financial
sector, the rapid growth of alternative financing
fuels official concerns about financial stability,
prompting a recent statement by the banking
regulator about bringing it under “strict” control.
State-owned banks remain dominant and
are unlikely to see large-scale outward migra- Exceptions have already been permitted for exchange reserves could provide resources
tion of deposits. However, problems or scan- some smaller financial institutions. However, for this.
dals in the informal sector could trigger a rush before these lending restrictions were imposed, Financial sector woes elsewhere in the
of money back into formal bank deposits, most loans went to the state sector. If they are world fuel doubts overseas about China’s ability
extending a “credit crunch” to informal lend- relaxed again, this must be in a way that avoids to deal with its post-stimulus financial prob-
ing. Informal lending is already implicated by simply channeling further credit into local-level lems. There are also long-standing concerns
recent heavy media coverage of distressed policy lending. about transparency and the persistence of high
borrowers, in Wenzhou in particular, where Premier Wen Jiabao last month announced levels of NPLs.
a rash of disappearances and suicides has a package of measures to encourage However, another risk is that Beijing might
reportedly occurred among the owners of specific lending to SMEs. More could follow. decide to keep policy tight and choose to grow
troubled businesses. However, such schemes may prove rather more slowly. This is the implicit, if not stated,
unattractive to the banks. intention of the 12th Five Year Plan (2011-15),
To address fears of banking sector instabil- which has lowered China’s growth target from
Policy options ity, the government could shore up the banks, 8% to 7% and emphasises more “balanced”’
Problems in the “informal” lending sector could as it did in the late 1990s, by buying tranches growth. A strengthened welfare system, which
drive deposits back to the “safe haven” of of their NPLs, implicitly recognising that many the government could probably fund even with
formal banks, causing an “informal-credit of these loans were the result of the sector somewhat slower growth, would both make
crunch”. To assist cash-starved SMEs and undertaking stimulus policies at the govern- rapid growth less crucial for state legitimacy,
boost economic growth, Beijing could relax its ment’s behest. The sovereign wealth funds that and rebalance it, improving its quality even if
restrictions on bank lending. One option is to manage a small share of China’s vast foreign reducing its speed.
cut prudential reserve ratios, allowing banks to Yet Beijing cannot be sure how the economy
extend new loans and improve their earnings. would react – not only to lower growth, but to
the withdrawal of the government’s guarantee
to support growth “by any means”. The risks
to Beijing of taking such unprecedented steps
amid the current serious global uncertainty
would be considerable.
© Oxford Analytica 2011. All rights It is likely that the authorities are still
reserved. No duplication or transmission weighing their options, which include expanding
of this document is permitted without recently announced efforts to target aid to
the written consent of Oxford Analytica. SMEs in certain sectors. However, achieving
Contact us: www.oxan.com/about/ stability and regaining control over the finan-
contacts/ or call +44 1865 261 600 or cial sector might be prioritised above growth,
in North America 1-800 952 7666 since, with hindsight, growth promotion
overshot in 2009.

48 theBaltic Winter 2011 www.thebaltic.com


Reducing risk
Kidnap and ransom, multi-modal transport and
ferries are just some of the areas insurers have to deal with
Kidnap and ransom
With the ongoing problems of piracy in West
Africa, kidnap and ransom (K&R) insurance is
one way owners can cover themselves.
According to Leo Kissel, managing director
of Hamburg-based Trident Special Risks,
what most people don’t realise is that the
underwriting market for kidnap and ransom
is very international – there are a number of
players outside London that the firm is in
contact with and who can provide such cover.
One of these is based in Germany.
Pricing for such policies, he says, is
extremely competitive, “but whenever I sit down
with clients, I am always talking about the value
that you get out of what you buy because this is
such a specialised product. You have to know
what you are buying.”
If in nine cases out of 10 ships can transit
the Indian Ocean safety “in the one instance
that something does happen you at least want
to know that you are well covered.”
If you are going to be transiting such areas
“you want to find the right prices and value for
your money”, Kissel says. Underwriting cover
on offer ranges from the lowest to the highest,
so the client needs to be sure he is buying
something viable, he says.
So how does Trident position themselves
cost-wise? “Take into account we are brokers,
so we scan the market. Because of my network
I have a very good idea about what kind of risk
is placed, where and at what price. I am not
hooked to one underwriter – that is something
I refuse to do – because I am working for
my clients. My clients are shipowners and
charterers, so I am always looking for balance
in pricing and value for money. For me to say ‘I
can get the cheapest product’ is not correct.”
So is the K&R offering providing more
effective cover than that offered by a hull
and machinery policy or a war risk policy?
“Obviously, a ship needs a hull and machinery
policy and war risk policy – there is no debate
about that as there are several risks covered
that it needs to have.” A tailor-made kidnap
and ransom policy, he believes, is becoming a
“must have” policy. “When you have a marine
kidnap and ransom policy you have guaranteed
access to risk consultants. These are specialist
companies and if your ship is hijacked, you
call one number and the specialist will fly out
to your company and if necessary sit with you
24 hours a day and guide you through the
whole scenario.”
While specialists will provide guidance
during ransom negotiations, Kissel says it is
important that the final decision is taken by the
shipowner. “It shouldn’t be something that is
done by third parties or the underwriter”.
The other benefit, he says, of having a
K&R policy is “you are protecting your hull and
machinery and war claims records”. If separate
cover is not in place, premiums would go
through the roof.
Loss of ransom
Average ransom amounts, he says, are of the
order of $5-5.5m plus costs of around $4m,
which would result in “your hull and machinery
policy being blown for the next several years.”
Another benefit is avoiding lengthy or costly
general average negotiations.
One thing a lot of people don’t realise, he
says, is that K&R policies also provide cover
for the loss of the ransom in transit, which he
believes would not be covered under general
average. In the event of being about to make
a ransom drop for, for example, $5m “a lot
of people would suggest that you go out and
theBaltic Winter 2011 www.thebaltic.com
Insurance special
buy a policy that covers the loss of that money
in transit, and that policy could cost quite a
bit”. Kissel says he has drafted those kinds of
policies in the past, but that they were incredibly
expensive, so he had decided to go down the
route of having everything incorporated in a
single policy.
So ransom payments go adrift often?
According to Kissel it is not a common
occurrence, but a possibility. Following a
prolonged negotiation between the shipowner
and the hostage takers to reach a position that
both parties can accept “you are desperate to
get your people out”, he says. In cases where
negotiations may have lasted six months and
the ransom money has been despatched and
lost in transit “you are going to have to come
up with another $5m very quickly”.
As far as escalation in ransom payments is
concerned, Kissel acknowledges that the size
of ransoms is going up and crews are spending
more time in captivity. However, he believes
that the size of ransoms is increasing because
the success rate of the pirates is going down.
“They are trying to get the most out of the
assets that they do have. This means they are
trying to bloat that number up. They have been
successful in doing that, which also means that
the negotiation time can be longer and longer,
especially if negotiators on the pirates’ side
change. Right now we are looking at something
like 150 days to 180 days”.
Kissel says that he warns his clients that
buying a K&R policy for $5m might not be
enough. He advises his clients not to get policy
cover for less than that and would probably
suggest around $7.5m “to be on the safe side”.
One recent trend that Kissel highlights, and
one he says has not had as much coverage
as it should do, is that of pirates separating
49
THE MARINE KIDNAP AND RANSOM INSURANCE SPECIALIST

Let our expertise be your piece of mind.

Trident Special Risks Versicherungsmakler GmbH

Ochsenwerder Landscheideweg 12
21037 Hamburg, Germany
TRIDENT Phone: +49 40 30 89 30 29
E-Mail: info@trident-sr.com
SPECIAL RISKS www.trident-sr.com
 Insurance special

the crew off from the ship and holding the

crew themselves for ransom after the vessel
has been freed. He believes that this trend is
likely to escalate. However, K&R policies react
to such cases, he says. “If your piracy cover
is under hull and machinery or war, that
element of general average is questionable
because the vessel has been freed and the
cargo has been freed so where is the interest
of hull and machinery and war to come in
and help you?”
In the case of the crew being separated
from the ship, the question is then raised
as to what the role of the P&I Club is in that
case? According to Kissel, that depends on
the P&I Club rules in question, but he believes
“nobody knows”. He says he has spoken to a
lot of industry players – hull and machinery and
war underwriters – and using general average
and sue and labour clauses are accepted
market practice when considering the payment
of a ransom for the return of the ship and cargo.

Clarity of coverage
In the event of only the crew being involved,
the question then arises as to whether general
average is applicable to the situation. Kissel
says he tells his clients that the marine K&R
policy “should always provide for clarity of
coverage. Whether the crew is on board, or
taken away separately does not matter. You
get what you pay for.” He quotes Berkshire
Hathaway boss Warren Buffett as saying “price
is what you pay, value is what you get”.
As far as armed guards are concerned,
Kissel says that in the K&R world they are seen
as a deterrent, but “history has shown that
pirates adapt to changing situations”. While
the success of using armed guards has been
demonstrated by the fact that no ship using
them has been captured, the caveat he says
is that things are likely to escalate with the use
of higher calibre weapons and this will have
legal effects, for example triggering war risk
exclusions in P&I Club policies.
There is also a rumour circulating, Kissel
says, that there are likely to be cutbacks
in naval support to protect ships transiting
the danger zone and the impact of that is a
serious consideration.
And what of the possibility of ransom
payments being made illegal?” Kissel says
that is always a possibility, but the question
is what happens then? While ransom
payments do lead to further hijacks but on
the other hand “what at the moment is the
viable alternative?”
If a shipowner has his crew taken hostage,
he says, he is going to do everything to get his
people out safely.
Multimodal
Michael Else & Company’s new insurance cover
for multimodal operators and intermediaries
has been attracting widespread interest
from developing countries, according to
the managers of the Charterers P&I Club
and Transmarine.
The company believes that its new offering
fills a gap in the market in providing innovative
insurance solutions worldwide for small- and
medium-sized multimodal transport operators
and shipping intermediaries such as freight
forwarders, NVOCCs and ship agents.
The new product, Portside Insurance
Management Services, operates as a brand
within Michael Else & Company’s existing
structure and the security is provided 100 per
cent by Torus Insurance (UK) Ltd, rated A M
Best A- (Excellent).
According to Alexander Brewster, who has
been appointed as the class underwriter for
Portside, multimodal operations are a growing
market worldwide. “There are a lot of new
Alexander Brewster
freight forwarders operating around the world
and a lot of these new companies don’t yet buy
the insurance cover or sometimes their local
markets can’t provide the same kind of cover
that we can provide”.
Having worked in the cargo and cargo
liability markets for a number of years, and
knowing other underwriters in similar positions,
Brewster says that the bigger companies have
focused much more on the top end of the
market and the higher margins.”I saw a good
opportunity for a focused and efficient product
to concentrate on the small end of the market”.
With Portside forming part of the Michael
Else group, it can take advantage of the group’s
worldwide network, contacts and distribution to
promote the product round the world.
Legal issues have sometimes caused
problems for multimodal transport where
different rules apply to different legs of the
journey, so does the same thing apply to
insurance products?
Brewster says: “Our cover is basically in line

theBaltic Winter 2011 www.thebaltic.com 51

 Insurance special

Simon Swallow

with the contractual obligations of the insured
with their client so it covers their contractual
liability. In terms of legal issues raised between
the freight forwarder and their client, as the
insurers it would involve us as well.
“We have a fantastic legal team here who
have been dealing with liability claims for 25
years, with the Charterers P&I Club and we are
lucky enough to have the same team handling
Portside as well.”
There has been a very positive response to
the new product from around the world, with a
wide distribution network for the initial launch,
using the contacts Michael Else & Company.
“It has been very positively received around
the world, but maybe less so in London
because some people think there are a lot of
people doing the same thing in London, but if
you look at the worldwide market the opinion is
very different”.
London sees a lot of the big business with
huge accounts requiring very complicated,
bespoke cover, he says. “That’s what London
has always been good at. I saw a gap for
something focusing on a less obvious path”.
One of the big brokers in London, he says, has
approached him saying he thinks the idea was
a good one because it identifies a less obvious
source of business, albeit with lower volume in
terms of premium income. He declines to identify
the broker but they hope to work together.
Emerging markets and less developed
markets are particularly interested in the
product, he says. “We are looking in the
Far East. Most of this business will come
from east of Suez. The European market,
and certain parts of the Far East and Middle
East are already well serviced by freight
forwarders’ cover but I think worldwide there
is still this gap for a product focused on the
smaller operators”.
According to his definition, a medium-sized
enterprise would have up to 250 employees,
with turnover of up to $15m a year, but smaller
operations could have a turnover of less than
$1m.”We want to be able to support all these
accounts and all the brokers’ business from the
smallest ones up.”
Insuring ferry risks
What do underwriters really think about insuring
ferry industry risks? Simon Swallow, commercial
director of the UK-based Shipowners P&I Club,
told delegates at the Interferry conference
recently that his informal research had revealed
increasing anxiety in the market.
He found that only three or four Lloyd’s
insurers were prepared to accept ferry hull &
machinery business after consistently losing
money and failing to achieve the required
increase in premiums.
One market leader had revealed loss ratios
of 153% on ferries and 189% on ro-ro ships
compared with 115% across all sectors. This
was mainly due to machinery incidents, notably
because of the strain of maintaining tight
schedules and because “there are a lot of old
ferries out there”.
Hull and machinery insurers did not like
high-speed craft because engines were
working at full capacity and spares costs were
high. Liability insurers preferred fast ferries
to conventional vessels because passengers
were strapped in, there was high technology
on board and stopping distances
were short, but were alarmed at major
increases in exposure under the EU passenger
liability convention due in force late next
year. Crew fatigue, competence and
over-familiarity with scheduled routes were
common concerns.
Swallow advised: “Ultimately, your
company’s solvency could depend on the
quality of your insurance company. Work with
them, show them your attention to safety and
you will see your costs reduce.”

theBaltic Winter 2011 www.thebaltic.com 53

Providing complete security and peace
DELIVERING EXCELLENCE
IN ALL THAT WE DO
Solace Global Maritime, a United
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provides worldwide maritime security
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At Solace Global Maritime our ethos
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DEALING WITH THE THREAT -
MARITIME SERVICES
The threat of piracy and hijack is real,
fast-moving and constantly evolving.
As of September 27th, 2011, the
IMB Piracy Reporting Centre noted
346 attacks and 35 hijackings
worldwide. Even more notable than
this is the 15 vessels and 277 crew
Certificate Number 9656
members are currently being held
hostage by pirates off the coast of
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the threat is only set to increase
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Solace Global Maritime offers a range
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With a global footprint and wide
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Every Maritime Security Liaison
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FIREARMS
Company firearms are specifically
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We ensure we are protected for every
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• Signatory Company to the
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To arm or
not to arm?
While most owners and trade organisations believe that arming
vessels is now the solution, concerns remain
H
igh profile interventions like those of
UK prime minister David Cameron
in favour of arming vessels have
been greeted with acclaim by some,
but the danger of escalation continues to
cause concern.
For example, in the wake of an independent
report recommending the Netherlands
government to provide Dutch shipowners
with better levels of protection against piracy,
including the hiring of armed guards, Netherlands
law firm AKD said that shipowners who directly
hire armed personnel themselves could face
criminal prosecution.
P&I Clubs have also raised concerns that
owners might eventually end up paying in
“friendly fire” incidents involving armed guards
and crew members while, if the pirates decide
to use increasingly sophisticated weaponry in
their attacks, war risk exclusions in P&I policies
may be triggered.
The Netherlands’ commissioned De
Wijckerslooth Committee report was designed
to assess the desirability and possibility of
deploying private sector armed security to help
protect Dutch ships from the threat of attack
by pirates. It recommended that the Dutch
government moves towards a higher level of
protection of its merchant fleet including, “if
necessary”, the use of armed private security
guards. The report, however, warned that
such security guards should only be hired
by the government, and should only perform
their security duties as soldiers under the
full authority of the Ministry of Defence. The
authors of the report added that, under the
current circumstances, it was not desirable
that shipowners privately hire armed private
security guards, an option which should only be
considered “in case of special conditions”.
If the government uses its own resources,
or engages reservists or hires armed private
security guards who will temporarily be given
military status, the committee argued, this would
not constitute privatisation of security duties. By
creating additional defence capacity in this way,
no amendment of legislation and regulations will
be required.
If leaving shipowners to hire private
security guards, the report suggested that this
would require drastic amendment of Dutch
legislation and regulations, which under normal
circumstances could take years.
Jan Kromhout, a partner with AKD in
Rotterdam, commented, “Clearly, it is the duty
of government to do its utmost to protect the
merchant fleet from attacks by pirates. In the
event that the government is not able to fulfil
its duties, for whatever reason, it will have
to employ outside help. It is not desirable
that privately owned companies hire armed
protection to perform the duties which are the
responsibility of government, which should retain
its monopoly of force. Furthermore, the cost of
providing protection against piracy should be
borne by the state. Shipowners should only be
allowed to hire private armed guards in special
situations, in the event that the government is
not able to fulfil its duties.
“In the event that Dutch shipowners do hire
armed personnel, or provide weapons to those
on board, those directly involved, as well as
shore-based personnel (including the ultimate
management of the company) could face
theBaltic Winter 2011 www.thebaltic.com
Security
criminal prosecution. Furthermore, shipowners
could be faced with local legislation covering the
import and export of weapons in the event that
the vessel has weapons on board and enters the
jurisdiction of another country.”
The use of military personnel on vessels does,
however, bring with its own set of problems.
Francesco Lauro of Italian law firm Studio Legale
Lauro told a recent conference organised by his
firm on Shipping and the Law that in Italy use
of armed guards has recently been approved
in Italy, either in the form of Military Protection
Detachments or private contractors.
Powers of MPD commanders and masters of
vessels are outlined. For example, although the
master is responsible for safety of navigation and
manoeuvring including for passive defence, the
master is not liable for decisions taken in order
to fight pirate attacks.
Other jurisdictions, however, do not allow
military personnel on merchant vessels, generally
for political or historical reasons, and therefore
would be obliged to go down the private security
route. Insurers also suggest that the use of
armed military personnel reduces the risk of
claims in the event, for example of a friendly
fire incident.
According to North P&I Club director Mike
Salthouse, who also spoke at the Studio Legale
Lauro conference: “Average cost of ransoms
increased significantly from around $600,000 in
2008 to more than $5m in 2010, with a reported
figure of $ 13.5m paid to release an unidentified
vessel in April 2011.
“The average period of detention has also
risen significantly from around 55 days three years
ago, to more than 200 days in late 2010, falling
57
Security
somewhat recently as pirates have increased
the throughput of vessels and ransoms. Clubs
have experienced claims for personal injury and
loss of life, medical expenses, personal effects,
trauma counselling and for damage to and loss
of cargo.”
The pirates have adapted their tactics, he
said, and using merchant vessels as mother
ships enabled them to continue operating in the
monsoon season as well as expanding the range
of operations. “There are reports of increasing
sophistication in the military equipment used by
pirates and most commentators believe such
activity is likely to continue to escalate for the
foreseeable future,” he warned.
Furthermore, the use of naval assets to
protect ships targeted by pirates is a slow
process. “In practical terms, this means that a
ship targeted by pirates must plan to be able
to defend itself against assault by the pirate
teams for up to 24 hours before naval assets
can arrive to assist the vessel. Further, the
economic cost of making such assets available
is inevitably the subject of review in the difficult
economic times we find ourselves in. It is this
fact – that shipowners have in effect to look after
themselves – which has more than anything
else has caused the rise in use of security
contractors and increasingly armed maritime
security providers.”
This view has doubtless been strengthened
by rumours circulating that naval operations in
the danger zone are likely to be scaled down in
the near future as political attention continues
to be centred on the Middle East. Ole Wikborg,
president of the International Union of Marine
Insurance warned recently: “Although there is
still a clash of views about placing armed
security personnel on board for the ship’s transit
58
Mike Salthouse, North P&I Club director
through danger zones, it must not be forgotten
that because of defence cuts around Europe
there is the prospect of naval assets in the
Gulf of Aden being substantially reduced in the
near future.”
The need to provide armed guards has
inevitably given rise to a burgeoning security
industry, with quality being something of a
hit and miss affair, and vetting is a major
issue. According to Salthouse: “There are some
companies that approach the task professionally
and legally. There are undoubtedly others that
have little appreciation of the legal and legislative
environment in which they and the shipowner
operate. It is often difficult for the shipowner to
differentiate between such companies.”
Ole Wikborg, president of the International
Union of Marine Insurance
theBaltic Winter 2011 www.thebaltic.com
As he points out: “For every shipowner,
the security advantage offered by the use of
armed maritime security providers has to be set
against concerns centred on the risks posed
by such guards to the crew, to the AMSPs
themselves (if they are not familiar with vessel
operations) and to other vessels. Confusion
has reigned over rules of engagement and
the role and authority of the master during an
attack. The simplistic solution of the security
team commander seeking instructions from the
master as to whether or not to use lethal force,
is fraught with complications and at worst could
risk making the master criminally responsible for
an unlawful killing.”
Another issue the owner has to contend
with is flag state requirements in relation to the
carriage of weapons and ammunition on board
vessels. South Africa is one country with strict
regulations on the carriage of firearms in its
ports and while Cameron may now back the
use the armed personnel on merchant vessels,
it should not be forgotten that, at one point, the
UK government was reported to be considering
stopping maroons being fired to launch lifeboats,
while question marks were raised as to whether
the Royal Yacht Squadron’s use of a cannon to
start races to start yacht races at Cowes might
infringe UK gun laws.
Another issue to be considered, which
Salthouse highlighted is that the shipowner
could not avoid the fact that “in some cases
additional personnel on board will prejudice a
vessel’s compliance with SOLAS”.
However the fact remains that to date no
vessel on which AMSPs are deployed has been
seized by pirates. Increasingly, and where Flag
State permits, the use of AMSPs is being seen
by shipowners as the most effective means of
resisting a pirate attack.
Most of the clubs provide guidance on was is
or is not acceptable when drawing up contracts
with security companies. They also recommend
that members provide their clubs with copies of
the contract before they sign it so as to ensure
that it is not likely to contravene the terms of the
insurance.
According to Salthouse: “P&I cover does
not prohibit the employment of armed security
guards however the deployment of AMSPs
on board a member’s vessel could prejudice
cover if their use is in breach of Flag State,
Port State or other legislation. Shipowners
should also ensure that the embarkation of
additional security personnel does not place
them in breach of SOLAS safety equipment and
certificate requirements.”
Some rules of engagement contain provisions
that require the AMSP team commander to
obtain the approval of the master for the use of

Anti-piracy device P-Trap
force to repel an attack, a provision Salthouse
said is inappropriate. “Seafarers have no training
in the use of firearms and/or the circumstances
in which lethal force may be justified in preventing
an attack. Rules of engagement that require the
master to sanction the use of force unnecessarily
expose the master and crew to the possibility of
being prosecuted in the event the use of force
was not warranted. Ideally, rules of engagement
should set out in advance the circumstances in
which force will be used without reference to the
master or crew while respecting the master’s
overriding right to intervene to prevent the use
of force on board the vessel. Such rules of
engagement should be agreed by the shipowner
prior to the deployment of the AMSP and then
notified to the master and crew as part of an
initial security briefing.”
If the use of armed security personnel is
one area of the maritime security business, the
other is coming up with technical solutions to
protect ships.
Pole Star
Security related services are offered by a number
of companies one of which is Pole Star who has
recently merged with Absolute Maritime Tracking
Services to provide a monitoring and security
serve to more than 35,000 vessels.
The merged company will now operate
Long-Range Identification and Tracking (LRIT)
data centres for 40 maritime administrations
including Panama, Singapore, the Marshall
Islands, Liberia, Australia, and Canada, as well
as providing LRIT Conformance Testing and
Certification for more than 90 Flags. In addition,
the combined company’s increased technology
resources will enable the group to deliver
superior, cutting edge products more quickly to
its customers.
“Our goal is to be the world’s leading provider
of fleet management, ship security and vessel
monitoring systems to the maritime industry
as a whole. This merger is a big step towards
achieving that,” said Colin Hook, the newly
appointed CEO of Pole Star.
Pole Star recent launched its Industry Zones
product which allows users to select from a
series of pre-defined areas that carry additional
environmental regulatory requirements or
security risks and apply them to their voyage
management and reporting procedures. Industry
Zones provides automatic notification when a
vessel enters and exits the pre-defined zone
and can be configured to increase frequency of
reporting while in the zone.
Paul Morter, Pole Star director of sales said:
“Shipowners today face both increased security
threats and a greater regulatory burden, so there
is a need to simplify compliance while at the
same time sharpening security monitoring. To
manage these issues effectively, they need tools
that bring together all the information needed
for voyage planning and execution. Pole Star
Industry Zones provides that functionality within
a proven and widely-adopted system and in a
single screen view, vessel by vessel, across a
theBaltic Winter 2011 www.thebaltic.com
Security
whole fleet.”
In addition to entry and exit alerts, Fleet
Management users can receive automatically-
increased frequency of reporting via email or
SMS while the ship remains in a selected zone.
SSAS Alert Advanced users receive automatic
entry and exit notification and ships can be
polled on demand for latest position reports. Pre-
defined security zones include the UKMTO and
the International Recognised Transit Corridor as
well as designated War Risk zones for insurance
purposes.
P-Trap
Another security product on the market is
Westmark’s anti-piracy device P-Trap
Westmark, based in the Netherlands,
created the P-Trap as a passive non-lethal ship
protection measure. Once deployed, it protects
seagoing vessels from boarding attempts by
pirates. The reusable system carries thin lines
that float at the waterline around the sides and
at the stern of a vessel. Pirates that enter the
P-Trapsafety zone will run into the lines, which are
designed to become entangled in their engines,
disabling their vessel. The P-Trap is designed
to defend against multiple simultaneous attacks
and does not require crew involvement once it
is deployed.
“The P-Trap concept is as simple as locking
your doors and windows before going to bed
at night. It’s practical and it makes sense,” said
Lodewijk Westerbeek van Eerten, creator of
P-Trap. “The option to lock the perimeter of a
ship offers seafarers an extra layer of protection
and peace of mind so that they can focus on
their core business – the transport of goods.”
Heavy lift company Dockwise, purchased and
tested the system this year on one of its ships.
Following three successful transits through the
Gulf of Aden using the P-Trap Dockwise is
expanding the use of the system on board
its entire fleet. “We welcome the opportunity
to provide additional tools and resources to
our crews to reduce the risk of piracy attacks
at sea,” said Marco Schut, Dockwise vice
president of operations. Four Dockwise vessels
are equipped with a P-Trap.
Perhaps a more traditional means of
combating piracy is the Knowsley SK EVICTOR,
which uses the ship’s fire main or any other high-
capacity water supply to provide a water shield
via twin 70 degree operating in a 90 degree arc.
According to the company: “The nozzles have
been selected to provide a powerful jet of water
and a water mist curtain, giving a tremendous
visiual presence, inhospitable atmosphere and
a physical force cable of deterring the most
determined of pirates.”
59
Corporate viewpoint Securewest International
A comprehensive
solution to maritime
security
Securewest International explains why taking a
comprehensive approach to maritime security will
ensure your vessels and crew are fully protected.
W
ith the ever present and increas-
ing threat of international piracy
and vessel hijack, ship owners
are faced with the difficult task
of deciding how to properly protect their people
and assets. The number of companies offering
security services appears to be growing by the
day so how can you be sure you chose the best
company to safeguard your precious assets?
Securewest International is a worldwide
organisation and has been a leading specialist
in maritime security since 1987. The company
believes that effective vessel security is about
a range of measures to create layers of barrier
against potential threats and it is the provider
with sufficient depth and experience of service
provision that will be best placed to offer the
most appropriate solutions. With more than
20 years exclusive experience in the maritime
sector, Securewest International has developed
a comprehensive range of security services that
will ensure your vessels and crew are kept as
safe as possible.
Combining military and
commercial experience
The operational management and security
teams at Securewest International all have
military backgrounds but, importantly, the
company’s longevity in the market has given
its people the ability to successfully combine
military experience with commercial needs and
imperatives. Securewest International people
have a full understanding of commercial shipping
60
as well as the military processes and actions
required to ensure vessels and crew remain
protected.
The cornerstone of the Securewest
International service is to assist ship operators
take a holistic view of the risks and threats that
its vessels might face. Piracy hot-spots are top of
the list but so are adjacent coastlines the vessels
will pass or ports it will visit during its voyage. A
thorough assessment of the potential threats
likely to be encountered is made and advice
given. Combating piracy is a complex challenge
and circumstances will change from week-to-
week, even for the same vessel transiting the
same waters. Securewest International is expert
at continually re-assessing and updating the
potential risks facing each vessel.
theBaltic Winter 2011 www.thebaltic.com
Understanding the
environment
A core service is to provide teams of security
guards, both armed and unarmed, onboard
ships. Securewest International’s long experience
has equipped them with an in-depth working
knowledge of all types of commercial vessel
and they recognise that the actions required to
safeguard a chemical tanker differ from those
needed to keep a RoRo vessel or container ship
safe. They also fully understand the regulatory
environment and provide detailed advice to ship
operators on the requirements of the relevant
port , flag state, insurance and other authorities.
It is vital that vessel operators are aware of their
corporate liabilities when opting to place security
teams onboard their vessels and Securewest
International is extremely well placed to provide
expert advice and counsel.
Implementing physical security should
involve much more than simply placing guards
on vessels and the teams from Securewest
International begin their work well before
embarking on the ship. A thorough, up to
date route threat assessment is provided0
prior to the voyage which, coupled with a
vessel assessment, forms the basis of the
solutions proposed. Securewest International is
a signatory to the International Code of Conduct
for Private Security Providers and the clearly
defined and mission specific Operational Orders
and Rules of Engagement drawn up by its
operations team reflect current best practice.
Once onboard, the team will provide the

Master with a full brief and threat update and
talk the entire crew through the security plan.
Training will be given and drills undertaken.
This ensures that, in the event of an incident,
everyone is confident of exactly what to do and
how to act to stay safe. Securewest International
believes that it is important that all personnel
understand the risks they face and the mitigating
measures to defend against it. Experience has
shown that crew understanding and involvement
engenders a greater degree of assurance and
confidence.
Escort vessels
An alternative to placing a team onboard is to
utilise an escort vessel. This is not an option
that Securewest International will recommend
until a thorough threat assessment has been
undertaken but it can be particularly useful
for slow moving vessels such as rig-tows or
underwater exploration craft. Securewest
International is an expert at identifying and
sourcing the most appropriate vessel to
undertake escort duties and for ensuring the
vessel can operate in all the sea-conditions the
client vessel is likely to encounter. The company
will also place a well equipped and highly trained
team onboard and advise on the optimum
operating pattern to discourage a pirate attack.
Training is vital
A further element in security management is to
fully train the client’s shore team responsible for
managing a hijack or other security incident.
Corporate viewpoint Securewest International
Securewest International’s experience allows
them to provide enough training to ensure a ship
operator is confident in times of crisis. Planning
is of the utmost importance and Securewest
International will assist the vessel operator
through this process. Often, in a crisis situation,
the ship operator is solely responsible for
handling the incident for an hour or more before
the authorities become involved. Managing this
“golden hour” correctly is vital for the safety
of the crew and the vessel operator must
understand exactly what actions are to be taken.
As well as liaising with the hijackers, the operator
must inform and provide support for families,
put measures in place to ensure the crew are
safe when released, deal with any media interest
and, of course, maintain business continuity.
Securewest International can ensure all relevant
training is given to prepare the vessel operator
for this taxing and stressful process.
As an international security expert,
Securewest International is also in demand as
an ISPS consultant. Services include providing
full training to all company employees to raise
awareness of their own personal security as well
as the security of their vessel or facility. A range
of drills are also offered to test employees in live
situations.
Knowledge is key
Maintaining a good knowledge of the threat
environment is central to ensuring the safety
of a ship that is transiting a security hot-spot.
Securewest International operates its unique
theBaltic Winter 2011 www.thebaltic.com
Maritime Assistance Center (MAC) on a 24/7
basis to provide real-time, high-quality security
advice to all its clients. Piracy and other security
alerts are tailored to client requirements and sent
to the relevant ships. Immediate advice is also
given on vessel routing, port conditions, ISPS
issues and any other urgent security issue. MAC
is currently used by over 16 million tonnes of
international shipping.
MAC is also available to provide a fully
SOLAS compliant Ship Security Alert System
(SSAS) monitoring facility to ensure all alerts are
managed securely, verified, authorities contacted
and mandated routine testing conducted.
Achieving a high level of maritime security is
a challenging and complex activity that requires
a thorough understanding of the commercial
shipping sector as well as the environment
that poses the risk. It is essential that security
activities are comprehensive and fully integrated
into all areas of the business. Securewest
International, with its extensive experience of
operating in the maritime sector, is extremely
well placed to deliver these services to all those
involved in international shipping.
For more information visit:
www.securewest.com
61
Corporate viewpoint MAST
Keeping safe with
MAST
M
AST is a leading maritime security company
with a strong international presence and
offices in Malta, UK, Djibouti, Sri Lanka, Oman,
South Africa, Hong Kong and China.
The company is a global supplier of specialist
maritime security services, operating in difficult
and dangerous environments.
Its underlying ethos is to deliver an exemplary
security service to its clients while respecting
the environment, local and international law and
human rights.
The company aims to fulfil the needs of its
key stakeholders in the following ways:
l Customers: to deliver a consistently reliable
appropriate and effective security service.
l Employees: to provide rewarding and chal-
lenging work and development opportunities.
l Partners: to develop trustworthy and valuable
relationships with key partners in
support of MAST’s global services.
Comprehensive security
support
MAST provides a comprehensive, integrated
security service for its clients within the maritime
community.
Its key services areas include:
• Yacht security
• Design and installation of security systems
• Commercial shipping security
• Explosives Ordnance Survey and Disposal
• Intelligence support
• Training
• Hijack/Kidnap and Ransom (K&R)Response
Service
• lnsurance / research and support
62
Piracy concerns and
commercial maritime
security capability
“..Maritime piracy is costing the international
economy between $7- $12 billion per year “
One Earth Future Foundation, Working Paper,
December 2010
The concerns over Piracy continue and
it remains an intractable problem for the Mauritius, Kenya, Tanzania and South Africa
shipping community. thus ensuring support throughout the region.
It is also clear that the problem is not only MAST also has a track record of extricat-
spreading further across the Indian Ocean and ing ships and crews from arbitrary detentions
as far south as the Madagascar channel, but and deadlocked situations in many of the most
also that the pirates’ tactics are changing, with challenging places around the world. The com-
pirated vessels now being used in an attempt to pany has a dedicated response capability with
capture more ships. on-scene advice and negotiation, dealing with
All these facts provide a unique challenge for ransom delivery arrangements to assistance
the shipping community. with the vessels recovery and crew repatriation.
In response to the increasing threat to assets Ship hijacks and arbitrary detentions present
at sea and the changing political environment, a unique challenge to marine underwriters and
more ship owners and charterers are being
directed to provide for their own security.
Private security companies provide part of
the answer to the problem, when used in con-
junction with the support offered by the inter-
national community and the various naval task
forces operating in the region.
For over six years, MAST has been delivering
a responsive, cost-effective security service.
MAST is currently in support of in excess of
70 shipping clients, ranging from specialist tug
and tow, dredging and towed array operations
to tanker and bulk carrier operations.
It provides on-board protection teams, which
embark ships or yachts in areas of high risk.
The teams are comprised of British ex-Royal
Marines or of equivalent experience. Once on-
board, they use their training and skills to train
the crew and increase the defences of the
ship. Depending on the threat, insurer approval,
peculiarities of jurisdiction and flag state, armed
protection is provided during a passage.
The company has permission to operate
with firearms from Djibouti, Oman, Sri Lanka,
theBaltic Winter 2011 www.thebaltic.com
 Corporate viewpoint MAST

shipowners as no two hijacks are quite the

same. There is always a complex web of differ-
ent local and commercial interests at play.
MAST‘s negotiation department is led by a
former P&I Club director and Somali specialist,
who have conducted 11 negotiations on behalf
of shipowners.

Explosives ordnance disposal

in the marine environment
MAST also provides unique explosives ord-
nance survey and disposal service in support of
pipeline, dredging and port development work
and has specialist teams capable of deploying
around the world.
There remains a latent threat of unexploded
mines and ordnance in numerous areas of the
world’s coastal and deep sea oceans. In certain
parts of the world during any exploratory sea
bed operation, pipeline construction or port
development, there is often a need to ensure
that the area is free from explosives before com-
mencement of work.
The solution
A systematic survey and clearance operation
is essential prior to the commencement of full
operations in areas where contamination is likely.
Detailed feasibility studies outlining the size
and scope of the operation will be conducted to
acquire ordnance data on land or underwater.
MAST EOD has the necessary combina-
tion of experience and expertise in the use
of underwater survey equipment to ascertain,
plan, recover and dispose of historic ordnance if
revealed during the survey phase.
Consultancy and research
Working in conjunction with our client’s
engineers and experts, MAST will ascertain
the level of contamination and likelihood of
the presence of ordnance. MAST has clear
expertise, understanding and awareness in
the search and classification of land and under-
water ordnance.
After a comprehensive review of each par-
ticular threat scenario, survey and clearance
plans will be formulated.
Private security companies
and the use of firearms
There are many valid arguments for and against
the carriage of firearms on ships and a number
of key factors that must be addressed before
a decision is taken, including the legalities and
rules of engagement.
MAST provides armed security where the
law permits and if it is appropriate to the threat.
The inherent right of self-defence exists as
a principle in most jurisdictions and the use of
force in these unique circumstances is an exten-
sion of that principle. With careful research and
clear operating procedures including Rules of
Engagement based on a proportionate and rea-
sonable response to the threat, it is arguable that
the carriage of firearms represents a pragmatic
decision that can sometimes be justified.
MAST is also a signatory to the International
Code of Conduct for Private Security Service
Providers signed on the 9th November 2010 in
Geneva. This vital step will give confidence to
the shipping community when deciding on the
selection of a security partner.
The Signatory Companies to this International
Code of Conduct for Private Security Service
Providers (the “Code”) endorse the principles
of the Montreux Document and the aforemen-
tioned “Respect, Protect, Remedy” framework
as they apply to PSCs. In so doing, the Signatory
Companies commit to the responsible provision
of Security Services so as to support the rule of
law, respect the human rights of all persons, and
protect the interests of their clients.
An effective partnership and
appropriate response
It is becoming increasingly clear that private
security companies in partnership with the inter-
national coalition authorities and the shipping
community can ameliorate the effect of the cur-
rent scourge of Piracy. Solving the problem of
Piracy, however, remains a political conundrum
for which there does not appear to be any
medium term evidence of a solution.
www.mast-commercial.com

theBaltic WInter 2011 www.thebaltic.com 63


Managing risk
ABOUT HADCON
HADCON is a leading international business risk
consultancy that specialises exclusively in the
Maritime Industry. We are recognised for our
expertise and innovative approach to develop
our portfolio of services to meet the changing
operational challenges within the marine
environment.
HADCON is supported by a dedicated
professional management team that is highly
experienced with professionals from the United
Kingdom Special Forces, Royal Marines and
specialists within the maritime industry. We
operate under an ISO 9001 quality management
system that ensures control of our processes.
ACCREDITATION
We hold professional certification and
accreditation for our core maritime services
with the Maritime Coastguard Agency. Hadcon
is a signatory company International Code of
Conduct (ICoC) and a member with Security
Association for the Maritime Industry (SAMI) and
has representation on the SAMI Governance
board. Hadcon has assisted the International
Maritime Organisation (IMO) on mission risk
analysis of the major ports of contracting
Governments.
OUR APPROACH
Our methodology is tailored towards delivering
a robust ‘Layered Security System’ which
combines physical security with an integration
of technical security systems that stands the
ultimate chance of success giving our clients the
confidence in our solutions not only for today but
for the future. We follow four basic principles:
HADCON
A Maritime Leading International
Business Risk Consultancy
Safe - Secure - Reassurance
Corporate viewpoint HADCON
Detection (early warning); Deterrent; Defence
and the Management of an Incident.
SECURITY SERVICES
Using the experience, knowledge and the
approach of our people we help clients with:
VESSEL ESCORT SERVICE (VES)
- provision of armed and unarmed security
teams. The VES has a layered security program
ensuring the Master, crew and the vessel is
ready and prepared for the transit. Our PCASPs
have passed our selection criteria and have met
the standards required by MSC Circ 1405 and
ICoC. We have robust Rules of Force (ROFs)
and Standard Operating Procedures (SOPs)
that have been proven and reviewed by our
legal team.
VESSEL DEFENCE SURVEY - we carry
out an on-scene survey viewing the vessel
specifications and documentation. The survey
includes a review of the defences in depth, full
lock down, location of the citadel, lighting and
communication systems in line with BMP4.
A report is then produced with enhancement
measures.
NEW PROJECTS - we believe security
consultancy conducted at the design stage that
is managed effectively and within the constraints
of the project will safeguard the vessel, port and
staff from the present day and future threats to
the maritime industry and will ultimately reduce
long term security costs.
SHIP / PORT SECURITY PLANS - the Ship
Security Assessments (SSA), Ship Security Plans
(SSP), Port Facility Security Assessments (PFSA)
and Port Facility Security Plans (PFSP) approved
by Flag States and Contracting Governments.
The security plans
encompasses the security
operational and emergency
procedures providing the
Ship and Company Security
Officers (SSO, CSO), Port
Facility Security Officer
(PFSO) and staff with the
necessary contingencies
when managing various
emergency situations.
SECURITY COURSES
- delivery of the highest
quality instruction utilising
a variety of training
theBaltic Winter 2011 www.thebaltic.com
techniques. The training courses include the
CSO, SSO, Anti-Piracy, Team Commanders,
Search Techniques and Incident Management
ensuring the delegates meet the commercial
and operational requirements of the vessel,
the port and the various agencies involved
in the maritime industry. The courses can be
conducted in the United Kingdom or overseas
depending on the client requirements.
RANDOM DRUG TESTING - at the Owner’s
or Management Company or Captain’s request
and as part of their safety/security policy and
duty of care we carry out a random drug test
on crew or staff ensuring the safety and the
well being of all personnel. The samples taken
are urine and hair samples, but can be tailored
to the client requirements. The samples taken
are tested against all the major groups of
recreational drugs. The hair samples are sent to
an independent laboratory that will test the hair
sample for usage of drugs over a three month
or longer period of time. The results from the
laboratory are delivered in two weeks.
EQUIPMENT PROCUREMENT - as an
enhancement to our maritime services we are
able to source specialist equipment through
our network of reputable companies that can
be designed to the client requirements. The
equipment ranges from; small target detection
radar systems, integrated technical security
systems with CCTV including thermal imagery
and night vision, access control and intruder
alarm systems, vessel hardening equipment
including ballistic materials and personnel
protection equipment.
CONTACT US
For further information regarding our services,
please contact HADCON, quoting HAD11:
HADCON Limited
Arena Business Centre
Holyrood Close
Poole, Dorset
BH17 7FJ
Phone: +44 1202 60 60 70
Fax: +44 1202 60 60 64
Email: enquiries@hadcon.com
Web: www.hadcon.com
65
Corporate viewpoint Aspida Maritime Security
Tailor-made security
A
spida Maritime Security is an experienced
Private Maritime Security Company (PMSC)
offering a comprehensive range of Maritime
Security and Risk Mitigation Solutions to cus-
tomers worldwide. Being the first Greek Maritime
Security Company, and set up from the ground
up to work exclusively on Maritime Security,
Aspida provides flexible, high quality, cost-effi-
cient and, most importantly tailor-made mari-
time security. Aspida’s services focus on armed
security teams fulfilling all recent IMO Guidelines
for “the use of armed security guards onboard
merchant vessels”. Other services range from
training and security consultancy to intelligence.
Aspida carries a Public Liability and Professional
Indemnity insurance up to US$5,000,000.00
as well as Personal Accident and Employers
Liability insurance. Aspida is also a signatory of
the International Code of Conduct for Private
Security Companies and one of the first compa-
nies to be accepted in the Security Association
for the Maritime Industry (SAMI).
True to its Greek heritage, and with offices
in Greece, Cyprus and the United Kingdom,
Aspida has a deep understanding of ship-
66
ping and its complexities. They adapt to your
needs without expecting you to adapt to theirs.
Aspida is in a position to assist you with all
your security requirements, reliably providing
a custom-designed solution for your company
needs. Aspida’s services range from long term
contracts for multi-vessel armed transits to a
single transit of a mega-yacht; from a secu-
rity assessment and training to operational and
decision support intelligence. At Aspida, you will
find straightforward, flexible, high quality and
cost-efficient security services for your vessels
transiting high risk areas globally. On-board
and off-board personnel is alert 24/7, 365 days
a year to ensure that your crews, vessels and
cargo reach their destination safely.
Operating in 12 ports including ,but not lim-
ited to Muscat, Oman, Suez, Egypt, and Galle,
Sri Lanka, Aspida’s services cover the entire
East Africa High Risk Areas (HRA), incorporat-
ing the Red Sea, Gulf of Aden, Arabian Sea
and Indian Ocean, making Aspida a pioneer
contributor when it comes to tackling piracy, a
contemporary and fast-growing problem.
Employing almost 150 personnel – mainly
Greek and British – to ensure success in every
mission, Aspida certifies that the personnel its
properly trained and vetted. Security teams add
value to the transit beyond holding firearms.
Vessel hardening, crew training, passage risk
assessment, supervision of bridge watches are
all part of the security teams’ duties. Arms are
theBaltic Winter 2011 www.thebaltic.com
considered an additional layer of defence, not
a replacement of vigilance and passive Ship
Protection Measures. Personnel are thoroughly
vetted, all having solid backgrounds in the
Military or Armed Police and clean criminal
records. Additionally all employees hold sea-
man’s books and STCW 95 certification.Records
of such certificates give confidence to clients
that the PCASP have been provided with appro-
priate knowledge and skills through initial and
refresher training.
Aspida’s insurances and policies are robustly
worded and clearly include clauses regarding
the use and carriage of firearms, leaving no grey
areas. Similarly, for the company, it is common
sense that lack of proper licenses and docu-
mentation of the equipment and weaponry may
result in Master arrest and vessel delays. It also
acknowledges that each Port State has different
restrictions and requirements regarding the use
of firearms. Aspida has successfully completed
armed missions on vessels of all Flag States
permitting armed security on-board.
In conclusion, Aspida offers competitive yet
realistic prices. They provide suitable insurance,
proper and legal weaponry and equipment as
well as appropriately trained and vetted person-
nel. Following all procedures and regulations
of Port and Flag states, Aspida, manages to
reduce complications, vessel delays, arrests
and liability claims. Meanwhile ensuring always
the well-being of the crew and the arrival of the
vessel and her cargo to their destination. Aspida
does not simply offer armed personel on your
vessels, they offer complete solutions capable
from a single vessel to your whole fleet.
aspida

Security matters
T
he continued surge in piracy attacks related
to East and West African piracy have seen
a corresponding growth in companies offer-
ing armed maritime security services. Whilst
the maritime security industry remains largely
unregulated, without a list of approved security
companies, owners and management compa-
nies responsible for the safety and security of
vessels are faced with the difficulty of choosing
a professional, appropriately licenced company
with a proven track record on delivery. Factors
which need to be considered include regulatory
compliance, insurances, the quality of person-
nel, and the company’s operational experience.
WHAT SHOULD OWNERS
EXPECT IN TERMS OF
COMPLIANCE?
To operate legally, all maritime security
companies must fully comply with the regulations
of the countries in which they operate. Security
providers which employ UK nationals must also
fully adhere to UK firearms and export legislation,
irrespective of where the company is registered.
By way of example of the licences required,
Ambrey Risk holds a UK Registered Firearms
Dealer Certificate that allows the purchase of
weapons in the UK, Single Individual Export
Licences (SIELs) to export weapons, body
armour and night vision goggles from the UK,
and an Open Individual Export Trade Control
Licence (OITCL) to allow them to move this
equipment between the ports of embarkation
and disembarkation.
Using a low-budget service provider without
Corporate viewpoint Ambrey Risk
appropriately licenced weapons can taint a
voyage with illegality and presents a considerable
physical and reputational risk to the vessel’s
owners and managers. Well established maritime
security companies will undergo thorough vetting,
to show their operations are compliant in terms
of how their weapons, ammunition, body armour
and night vision goggles are licensed, purchased
and moved.
WHAT INTERNATIONAL
STANDARDS OF PRACTICE
SHOULD BE FOLLOWED?
With no international code of conduct for maritime
security providers, the minimum requirement
should be full implementation of the International
Code of Conduct for Private Security Providers
(ICOC) as well as full compliance with the recent
IMO guidance on the use of armed guards.
This should be demonstrable in the company’s
Standard Operating Procedures. Respectable
companies will have considered how the UN
Principles of Human Rights, UNCLOS, SOLAS
and flag state regulations impact their operations,
the procedures of their personnel and Rules for
the Use of Force.
WHAT EXPERIENCE AND
CAPABILITY SHOULD
PROVIDERS HAVE?
Reliability is key and as part of this a security
company must demonstrate that they have
excellent logistics and operational management
processes, including a particularly strong
relationship with their shipping agents.
Good account management is
vital to respond to the pressures
of commercial shipping. Less well
established security providers will
struggle to provide their clients
with relevant information and
advice gained from their operating
experience and will not have the
flexibility to respond quickly to
requests.
WHAT ARE THE
INSURANCE
IMPLICATIONS?
Contractually, knock for knock
liability clauses are industry
standard and companies should
be able to provide evidence of
their insurance, with limits of
theBaltic Winter 2011 www.thebaltic.com
liability at no less than $5m USD. In terms of
risk management, owners and managers must
also check that providers have well thought out
and practiced Standard Operating Procedures
as well as legally approved Rules for the Use
of Force.
Providers who are established and
experienced in the delivery of armed security
teams will often enjoy excellent relationships with
insurers, which enable their clients to benefit from
discounts of up to 50 per cent on premiums.
WHAT QUALIFICATIONS AND
TRAINING SHOULD THE
PERSONNEL DEMONSTATE?
In addition to conducting interviews, personnel
must have clean records of discharge from their
military service, and clearance from the Criminal
Records Bureau. ISPS SSO qualifications should
be considered an absolute minimum training
qualification. Ambrey additionally form teams
to include SCTW ’95 qualifications, ENG 1
Medical certification and anti-piracy, weapons
and trauma training. Some providers offer their
clients cost savings by using teams of varied
nationalities, but it is well recognised that the
gold standard in maritime security is from single
nationality, experienced teams from reputable
Armed Forces such as the British Military.
Thorough training of personnel is essential to
maintain high standards of safety. This training
should cover Standard Operating Procedures,
Rules for the Use of Force, and Weapons
Handling Procedures as a minimum.
Ambrey Risk is a leading security services
provider working with a number of large owners
and ship management companies, in addition
to smaller owners who rarely transit the region.
For an informal discussion on the content of this
article, please contact a member of our Account
Management team.
Ambrey Risk Ltd,
Berkeley Square House, Berkeley Square.
London, W1J 6BD
T: +44 (0) 203 503 0330
E: enquiries@ambreyrisk.com
67
Corporate viewpoint Hart Security Limited

Safe and sound

W
ith approximately 80% of traded goods demand for reliable security
being transported by sea, maritime measures in areas that are
transportation is the backbone of international vital to keeping the global
trade. Because the sea represents the main supply chain flowing safely.
artery for the global supply chain, it is clear that For example, the formation
it needs to be protected. of the Combined Task Force
(CTF) 150, a multinational
anti-piracy naval task force
that has been operating off
the Horn of Africa since 2002,
has not alleviated the
escalation of piracy in this
crucial shipping zone.
Thus, private security
companies have developed
and thrived, providing security
packages for clients and
operating with a lower profile
than most government forces.
With over a decade of
experience, Hart Security is
an industry leader and an
internationally recognised
provider of specialised
maritime security services.
Through our global
network of 16 offices, we
offer a comprehensive range
Given its impact on the globalised economy, of security services, including
it can be argued that maritime security is security teams, sea marshals,
inherently the responsibility of national the regulatory compliance
governments and international bodies. However, programmes (BMP 4), training for company and Hart provides professional, cost-effective and
the demand (particularly in high risk areas) can ship security officers, International Ship and Port commercially viable solutions to meet our clients
often outstrip resources. The scope of challenges Facility Security (ISPS) audits, monitoring maritime security needs. By understanding the
presented by the combination of terrorist through a 24/7 maritime response centre and ebb and flow of the maritime market, we
activities, organised crime and piracy has meant security consultancy. understand the commercial realities that shape
that governments have been unable to meet the Our renowned anti-piracy escort and our clients’ requirements. Hart offers the
onboard security services provide maritime market responsible and legal solutions
protection for ships and their to the growing problem of piracy. Safeguarding
crews. Hart has trained over your reputation is critical, which is why planning
2,000 ship, company and port and preparation with experienced long-standing
facility security officers, security companies is imperative to success.
conducted more than 400
assessments and completed over
250 missions in high risk areas
(almost half of which have been in
the Gulf of Aden) with just 5%
involving confrontations and all of Tom Naude
which were successfully repelled Tel: +971 566966097
without the loss of lives or assets. TNaude@hartsecurity.com

68 theBaltic Winter 2011 www.thebaltic.com


Total security
M
IRIS delivers key maritime security
consultancy services tailored to the
requirements of shipowners and shipping agents
operating in the high risk piracy area of the Indian
Ocean. The company has established a
reputation for attention to detail and a
personalised service, operating in full compliance
with UK and overseas applicable laws and
licensing requirements.
MIRIS is fully committed to delivering the
highest professional standards of service,
and adopting established best management
practices, captured in bespoke company
standard operating procedures.
Management
MIRIS is characterised by a strong management
team that brings together a unique skill set.
Ideally suited to managing the delivery of
maritime security services, the team has
experience in the following areas: UK special
forces maritime counter terrorism and law
enforcement operations, management of Royal
Marines ship security and boarding teams, naval
intelligence operations, plus the regulatory
expertise of an international lawyer.
Consultants
MIRIS undertakes comprehensive recruitment,
vetting and training of its consultants, and is
committed to building strong relationships with
known and proven operatives with the highest
credentials. All potential recruits are invited to a
company induction day, covering company
ethos and approach to maritime security
operations, and outlining key legal, financial and
commercial considerations for operatives.
Training
MIRIS operatives undertake a specialist maritime
security operative course delivered in conjunction
with Trident at the MIRIS headquarters in
Liverpool. Advanced training is provided to
selected team leaders.
Trident is also able to offer a series of courses
to clients worldwide, carefully designed and
delivered by current, competent professionals.
Trident recognises the importance of
delivering training that incorporates recent
changes in international security regulation and
Corporate viewpoint MIRIS International Ltd
guidance. Based on the three core pillars of
readiness, response and recovery, Trident
courses equip maritime professionals with the
important knowledge and skills to understand
the requirements to develop readiness for
operations in high risk waters; to mitigate the
likelihood of an adverse event; and to formulate
appropriate responses and recovery activities.
Trident training is widely recognised and
endorsed by private maritime security companies,
shipowners and operators. The Trident Maritime
Security Operator course is a Buckinghamshire
New University-accredited NQF Level 4 short
course and has been vetted by the International
Association of Maritime Security Professionals.
No other training provider can offer this level
of training.
For further information about Trident, see:
www.tridentoperations.com
Consultancy services
MIRIS maritime security consultants deliver
comprehensive solutions to meet client
requirements, including vessel security reviews
aimed at piracy protection and maritime security,
and identifying requirements for protective
measures. Management and crew training
sessions include piracy and maritime security
awareness briefings, hostile environment and
incident management training, evacuation
planning and scenario training. Passage planning
support focuses on interpretation of intelligence
reports, preparing passage risk and threat
assessments, and transit planning.
Operational services
MIRIS maritime security operatives (MSOs)
provide ship protection measures, preparing
vessels for transit in high risk areas, implementing
physical protection measures, and testing and
adapting existing ship emergency response
systems. MSOs liaise closely with the master of
the vessel to ensure that minimal disruption and
maximum protection are achieved, monitoring
radar and providing permanent observation in
order to maintain a high alert state. MIRIS is
licensed to deploy armed MSOs, and works
closely with the client and the master of the
vessel to coordinate their deployment and
control measures.
theBaltic Winter 2011 www.thebaltic.com
Scoping and procedures
MIRIS undertake meticulous planning and
preparation for all tasks, ensuring that the
delivery of services meets individual client
requirements. All operations are supported by
task specific standard operating procedures,
which are reviewed regularly by MIRIS Operations
to reflect the developing threat and feedback
from deployed operatives and the client.
Compliance
MIRIS operates in accordance with local
regulatory requirements throughout the Indian
Ocean. All firearms and related equipment
transfers are subject to the company’s UK Open
Trade Licence. The procurement, management
and operation of firearms are governed by
standard operating procedures covering local
secure firearms and ammunition storage and
embarkation, firearms handling and testing, rules
for the use of force and post incident reporting.
Comprehensive insurance policies cover
professional and general liabilities, and provide
wide-ranging personal accident and injury cover
for all deployed operatives.
Client focus
MIRIS is committed to developing long term
relationships with its clients from the outset.
Following initial introductions, all engagements
are scoped and detailed in a services agreement,
and are subject to continual review. Operational
services are supported by MIRIS Operations,
who maintain regular contact with the client
providing intelligence and situation updates, with
the ability to adapt the provision of services as
situations develop. Client feedback is critical to
MIRIS service delivery, and allows MIRIS to
continually improve the scope of service to meet
client requirements.
For further information please visit our website at
www.miris-int.com.
69
Maritime safety
Putting safety first
Lifeboat hooks, lifting equipment and mooring accidents are just
some of the issues facing shipowners
A
lot of shipowners have been con-
cerned about the safety of lifeboat
hooks for some time. They felt there
were too many accidents during life-
boat drills. Now, after a long period of delib-
eration, IMO has acted with new rules and
guidelines. Those rules pose a challenge for
all owners, because they apply new standards
retrospectively to existing equipment.
The IMO has a new name for lifeboat hooks
and has issued clear guidelines on how they
should be designed and operate. Unusually,
the IMO has backdated the new rules to
cover existing hooks and these will have to
be replaced or upgraded if they don’t meet the
new standards.
Shipowners face choices. They need to get
all the lifeboat hooks on all their vessels exam-
ined, they need to replace ones that don’t meet
the new standards and they need to decide
which new standards they will opt for. They have
some time in which to do this, but if they leave it
too long they risk running out of options if there
is a backlog of refits.
David Bradley, vice president of operations
at Schat-Harding Service, says, “IMO has now
issued clear guidelines for lifeboat release and
retrieval systems under MSC.1/Circ.1392. They
will become mandatory under SOLAS and will
apply to new boats from 1 July 2014. There are
also clear tests to be applied to existing hooks,
and these will have to be upgraded at the first
dry-dock after 1 July 2014 if they do not meet
the set standards. IMO’s guidelines do not call
for a Secondary Safety System (such as a pin)
or a Fall Prevention Device for new boat or
upgraded hooks.”
That is clear, but separately the shipping
industry will be issuing guidelines that recom-
mend that owners should only fit hooks with
Secondary Safety Systems. This SSS will be an
70
David Bradley
added advisory requirement over and above the
international regulations as agreed by IMO. So
owners will have another choice to make, basic
regulation or industry recommended standard?
Says Bradley: “As the leading manufacturer,
Schat-Harding recognises that with two different
standards globally we will have to be ready to
meet demand for both. Therefore we will design
an optional SSS (training lock) for our SeaCure
LHR hook range, and we will then be able to
supply new hooks with or without the SSS, at
the request of the owner or yard. We have to
supply what regulations demand and what our
customers want.”
Should shipowners be worrying about the
ability of lifeboat and hook system manufacturers
to test and replace the hooks in service before
theBaltic Winter 2011 www.thebaltic.com
the due dates? “We face a few issues and it is
both a big challenge and a big investment for
us,” says Bradley. “We have to test hooks in
service by 1 July 2013, and we have to have
ready new systems for new boats, or boats
requiring replacement hooks, by July 2014.
We then face a window for replacements to
older boats and non-compliant systems which
depends on dry-dock dates and could run until
2019.
“So we have an eight year window ahead of
us, during which demand for hooks will come
in waves. We foresee that some owners will
want to get future proof hooks as soon as pos-
sible and we already meet quite a high level of
demand for that. Then there will be owners who
will leave things until the last minute.”
Mooring and lifting accidents
Accidents to crew members during the moor-
ing process has long been a major concern to
shipowners and insurers alike.
Now the European Harbour Masters’
Committee has released a DVD entitled The
missing link: improving the mooring process, a
training video which it is hoped will promote best
practice and reduce the number of accidents.
According to the UK P&I Club, who has
long campaigned on this issue, the new DVD
is welcome.
“The UK Club has for a long time been very
concerned about the number and severity of
accidents which occur when ships are under
tow or are engaged in mooring alongside. Even
fatalities to crew and to shoreside mooring
gangs are not rare occurrences, while far too
many incidents result in injuries that will end a
seafarer’s or stevedore’s career.”
Despite much publicity regarding the risks,
the do’s and the don’ts when working as

SeaCure hook installed as replacement
part of a mooring party, the Club says the claims
still keep coming in, often accompanied by
horrific photographs.
Although accidents involving ships’ lifting
appliances are rare, they are nonetheless a
source of concern as when a lifting appliance
fails the consequences can be fatal.
Classification society Lloyd’s Register, in con-
junction with the UK Club and manufacturers
MacGregor and Liebherr, has published a new
guide to help shipowners and operators understand
the importance of professional maintenance and
survey preparation for lifting appliances.
“Lifting appliances need to be thoroughly
examined and it is important that operators
understand the seriousness and consequences
of failure, as well as what they need to do to sup-
port the safety framework,” Joanna Townsend,
fleet services manager for Lloyd’s Register,
explains. “Poor preparation before surveys is
a common problem among operators. Other
issues include a lack of knowledge about rock-
ing tests, difficulties in obtaining maintenance
records and problems accessing the key areas
that need to be surveyed.”
“These are key safety issues,” says Townsend.
“This pocket guide has been designed so that it
is handy to use, inexpensive to produce and will
be free to the industry. We highly recommend
its use.”
The rocking test is one of the most critical
survey items, used to measure the wear of the
slew bearing and related structures. Its excess
wear combined with bolt failure can lead to a
deck crane toppling over.
“Personal injuries to crews from breaking
wires or a lack of maintenance on stores and
cargo cranes hit P&I Clubs the hardest because
personal liability claims can be very costly,” says
Karl Lumbers, the UK P&I Club’s loss prevention
manager. “The guide is a very good way to help
address this.”
Lumbers acknowledges that while crane
accidents are not frequent, “the consequences
can be horrific”
Crane accidents can occur for many rea-
sons, including corrosion, insufficient training, or
crew members losing their balance and falling
from the crane, for example .
“People tend to forget cranes are gener-
theBaltic Winter 2011 www.thebaltic.com
Maritime safety
ally not always covered by the class
system – it is optional,” Lumbers
says, “so there needs to be a lot
more attention paid to maintenance
of the crane on board”.
Annual checks are nor-
mally a requirement of flag
states, but “nobody is looking
at cranes in a detailed way, and
this is a big issue,” he says. A
lifting applicance he adds, has
no redundancy and if a crane
goes, “it goes with a hell of
a bang”.
At the moment, the issue is not
covered by the SOLAS conven-
tion although a paper is due to
be submitted to the next DE sub-
committee.
Safe boarding
Although many may consider the
issue of boarding and leaving a ves-
sel as straightforward, it can be dan-
gerous and Videotel’s new training
programme, Boarding and leaving
a vessel at sea, has been designed
to tackle this issue and address
the need for better working prac-
tices in this area.
“Seafarers often have to deal
with hazardous situations before
they even get on to a vessel,”
says Nigel Cleave, CEO of Videotel
Marine International.
”Not only is the actual boarding itself
sometimes difficult and hazardous, but the
equipment – from the launch itself to the per-
sonal protective equipment supplied – may not
meet required standards. This is especially hard
to control when contractors and third parties
are involved.”
This programme has been designed in con-
junction with BG LNG Services and is intended
to help individuals board ships at sea in a
safe manner. It raises contractor awareness of
safety standards and other issues and ensures a
more consistent quality of service among third-
party suppliers.
Addressing a range of maritime safety regu-
lations, the programme is especially valuable
for those joining a ship for the first time, but is
targeted at all maritime professionals needing to
board or alight from a vessel at sea.
Videotel also recently produced new mate-
rial to advise on best practice when entering
enclosed spaces. This remains a major problem
despite all the warnings and advice put out by
owners and insurers alike.
71
GLOBAL POST FIXTURE OPERATIONS MANAGERS BASED IN DUBAI

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 UAE

UAE ports sector

on road to
recovery
Plenty of investment is taking place on port and infrastructure
projects in the Emirates. Clive Woodbridge reports

C
argo handling activity at ports in the quarter delivering excellent growth, as Dubai the end of 2012. The idea is that this investment,
United Arab Emirates (UAE) con- continues to strengthen its position as a global which will boost the port’s annual capacity from
tinues to recover strongly this year, trading hub for the fast growing economies of 14 million teu to 15 million teu, will allow Jebel Ali
despite concerns over the health of the Middle East, India and Africa.” to handle six 15,000 teu vessels simultaneously.
the shipping industry globally. Container volumes Jebel Ali is being called up on to handle a The second biggest container hub in the UAE
moving through the country’s ports in particular greater number of very large container ships is Khorfakkan, which is operated by Gulftainer
are increasing at a much more heathy rate, and, to ensure it can fully accommodate this under an agreement with the Sharjah Ports
reflecting both a steady improvement in the local trend, DP World has recently announced that Authority. The operator indicates that volumes
economy and strong demand in other Middle it will build a 400m extension to its Terminal 2 were running at around 10% higher than in 2010
East Gulf countries, such as Saudi Arabia, Qatar, facility, with work due to be completed towards over the first nine months of the year. Khorfakkan
Bahrain and Kuwait, which are served through
the UAE hubs.
The generally buoyant trade picture is
encouraging continued investment in port
infrastructure and equipment. A number of
projects are well underway, and others have
been announced in recent times, as UAE ports
look to meet changing shipping company
requirements as well as longer term demand for
port capacity in the region.
Dubai’s Jebel Ali port is the dominant
container hub in the Middle East and has
experienced a strong upswing in volume this
year. The latest figures released by DP World
show that the port handled around 9.5 million
teu in the first 9 months of 2011, 11% up on
the same period of 2010. Jebel Ali consequently
seems well on its way to a record-breaking full
year throughput in excess of 12 million teu. As
Sultan Ahmed Bin Sulayem, DP World chairman,
reflected in announcing the results: ”The UAE
region has continued to do well, with the third KCT

theBaltic Winter 2011 www.thebaltic.com 73

 RAS AL KHAIMAH, UNITED ARAB EMIRATES

RAK Ports offer prime

locations, quality services,
speed of handling,
competitive pricing, state-of-
the-art security, and unique
opportunities for private
industrial development in a
maritime environment.

RAK Ports - driving the economic development of the Northern Emirates.

For more information contact: Group General Manager RAK Ports. E: gm@rakports.ae

www.rakports.ae
Saqr Port | Al Jazeera Port | Al Jeer Port | RAK Khor Port | RAK Maritime City

Container Terminal (KCT) has benefitted from
picking up some significant new business
from CMA CGM in recent months, the French
carrier having transferred some of its regional
transhipment work from Salalah in Oman.
Gulftainer also operates the Sharjah Container
Terminal (SCT), where the rate of growth in
container throughput over the first three quarters
of this year is reported to have been even higher
than that seen at KCT. The ability of SCT to
handle larger container vessels will be enhanced
by a berth renovation and dredging programme
which will increase the available draft to around
12.5m, when it is completed in early 2012. This
should provide the basis for another strong
growth performance next year.
Jebel Ali and, to a certain extent Khorfakkan
as well, face a tough new challenger, in the
shape of the new Khalifa Port which is being
built by the Abu Dhabi Ports Company (ADPC)
at Taweelah, just 30km from the Dubai hub.
Work is well underway on building phase one
of the new port, which is designed to handle
two million teu of containers and 12 million tons
of general cargo annually. The container and
multipurpose part of the port is all set to be
operational by the end of 2012 and ADPC will
be looking to attract some major container lines
into its deepwater, and highly automated facility.
The intention is that cargo operations
currently at the existing Mina Zayed port in
Abu Dhabi will be transferred to the new port
in the course of 2013. Further reflecting the
buoyancy of the UAE market, and in particular
the investments taking place in the emirate of
Abu Dhabi, container volumes moving through
Mina Zayed this year have increased at an
extremely rapid rate. During the first seven
months of this year, the port handled 408,000
teu, around 65% more than in the equivalent
months of 2010. The new port will clearly have
a healthy base flow to begin with, of probably
close to 750,000 teu annually.
The UAE has other significant port operations
in Fujairah and Ras al Khaimah and in both
locations significant investments are being made
to boost capacity. Fujairah handles substantial
volumes of rock aggregates, which are shipped
for construction projects mainly in the Gulf
region. To keep pace with demand, the port of
Fujairah has this year commissioned a new bulk
loader that has double the handling rate of the
existing loader.
Other projects include the development
of grain silos, with associated loading and
discharge arms within the port, which are due to
be operational by early 2012. This investment is
part of the UAE’s Strategic Grain Reserve project
and the first phase involves the establishment
of 14 wheat silos and six rice silos with an
initial storage capacity of 250,000 tonnes. The
purpose of the project is not only to provide
sufficient grain reserves for the UAE but to
provide an important grain transfer hub for other
countries in the Persian Gulf.
The strategic location of Fujairah was critical
in the decision to establish the grain reserves in
the eastern Emirate. Fujairah is located outside
the Gulf and the Strait of Hormuz, which has
in the past been blocked in times of conflict,
affecting the flow of trade.
The port of Fujairah is also a significant
gateway for liquid bulk traffic, a role that will
be further strengthened with the imminent
completion of a pipeline linking Abu Dhabi and
Fujairah, again with the strategic aim of providing
an outlet outside of the straits of Hormuz. A
second oil terminal at the port was opened in
mid-2010, and this has an 18m draft and a 25
million tons a year capacity. Plans to build further
oil berths to the north of the port are being
considered, the port says.
The government of Ras al Khaimah earlier
this year launched the RAK Maritime City port
and free zone adjacent to Saqr port, one of
the UAE’s leading dry bulk ports. The project,
which has involved an investment of around
£100 million, covers an area of 800 hectares and
includes a new dedicated harbour and 5000m of
quay wall, with zones set aside for general cargo
handling, shipbuilding and repair and other
activities. The port authority is now marketing
the Maritime City to prospective tenants, offering
lease agreements of up to 25 years.
With all the turmoil surrounding the
Arab Spring, the UAE’s position has a safe
and stable centre for regional trade has been
enhanced. The governments of the respective
emirates are taking the opportunity to invest
theBaltic Winter 2011 www.thebaltic.com
UAE
Jebel Ali Port
relatively heavily to make sure that the country
has the port infrastructure needed to take
advantage of available opportunities and to
sustain this role in the face of competition from
other locations.
Newbuilding projects highlight
shipping ambition
Shipping companies based in the UAE are
undertaking some important fleet development
initiatives at the present time. Most notably
perhaps, the United Arab Shipping Company
(UASC) – which has its operational HQ in
Dubai – will next year take delivery of eight new
13,500teu capacity containerships from South
Korean yard Samsung Heavy Industries, having
taken on the first in this A13 class series, the
Umm Salal, earlier this year. The remaining
sisterships will enter service during the first four
months of next year.
Umm Salal is initially being deployed within
the new AEC8 service that UASC launched in
March this year, together with China Shipping
Container Line, CMA CGM and Evergreen, and
which connects ports in China and Malaysia with
Le Havre, Rotterdam, Hamburg and Zeebrugge
in northern Europe. When the full fleet of nine
A13 vessels has been delivered, however, UASC
will use its latest newbuildings to establish a
standalone service covering the Europe-Asia
trades, with direct calls in the Middle East, the
company’s core market.
UASC’s sister company, United Arab
Chemical Carriers (UACC) has six MR type
45,000 dwt chemical tankers on order at the
Shina Shipyard in South Korea and the naming
ceremonies for the first two in the series, UACC
Masafi and UACC Messila took place this
75
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September. The remaining four are expected to
join the UACC fleet, which currently comprises a
total of 12 MR and Panamax LR1 type tankers,
in the first half of 2012.
Another Dubai-based company that is active
in the newbuilding market is Gulf Navigation
Holding, which owns and operates a fleet of 12
crude oil and chemical tankers, totalling around
1.6 million dwt. During 2011 the company has
purchased, and chartered out, a 300,000dwt
VLCC, Gulf Eyadah, and has also placed orders
to build two new 320,000 dwt VLCCs which will
join the fleet in 2012 and 2013. The company
says discussions are underway with regard to
possible orders for two more VLCC newbuilds
at a Chinese yard.
Gulf Navigation’s five year strategic plan
calls for the expansion of the VLCC fleet to nine
vessels, the chemical tanker fleet to 12 ships
and the development of a fleet of Aframax and
offshore support vessels. The company has this
year, however, withdrawn from the OBO market,
selling its six strong fleet, which was suffering
significant losses.
UMM Salal UASC
Emarat Maritime, part of the Sharaf group,
and Gulf Energy Maritime (GEM) are among
other Dubai-headquartered companies with
newbuilding programmes in hand. Emarat
has four 60,000 dwt bulk carriers which are
contracted with the Oshima yard in Japan, while
GEM has two 115,000 dwt Aframax tankers on
order for delivery in 2012. Emarat has, though,
also been selling some of its existing tonnage,
to trim the fleet in advance of the arrival of
these new ships. Disposals this year include the
sale of the Dubai Energy and Dubai Jewel, two
supramax bulkers, reportedly to the Pakistan
National Shipping Company.
Shipping companies based in Abu Dhabi
have also been actively investing in new tonnage.
In October this year ADNATCO, which together
with NGSCO makes up the shipping arm of
the ADNOC group, took delivery of its fifteenth
newbuild vessel, Liwa-V, a 105,000 dwt oil
tanker built by HHI of South Korea. The Liwa-V
and the sister Abu Dhabi III, delivered in July,
are the largest new tankers yet acquired for the
ADNATCO-NGSCO operation.
theBaltic Winter 2011 www.thebaltic.com
UAE
Delivery of the Liwa-V marks the end of an
intense period of deliveries that started with
the bulk carrier Shah, handed over in October
2010. According to Ali Obaid Al-Yabhouni,
general manager, “This major expansion of our
fleet reflects the growing strategic importance
attached by ADNOC to owning and operating its
own ships. All our vessels have been employed
from the day they were delivered.” Also included
in the newbuilding programme completed
in 2010-11 were a number of 57,000 dwt
bulkers, 73,000 dwt tankers and two 1100teu
containerships. The ADNATCO-NGSCO fleet
now comprises a total 30 vessels, including
eight LNG carriers.
Also based in Abu Dhabi, Eships does not
have any newbuild projects at the moment. It
has, though, added a 2005-built 46,000 dwt
MR products tanker to its fleet this year and
has also chartered in a similar vessel to further
increase its capabilities in the MR products
tank segment. Eships now has six modern MR
type tankers; two LPG carriers and nine small
product and chemical tankers. In addition Eships
is at present chartering up to eight panamax
and handymax bulkers to fulfill various bulk
transport commitments, including new contracts
of affreightment for shipping alumina and iron ore
secured in the past year.
Chief financial officer Richard Coxall echoes
the sentiments of many regional players when
he says: “While these are challenging times in
most of the shipping markets, Eships is well
positioned to take advantage of opportunities
in the MENA region, which has been resilient
to economic pressures and where trade levels
continue to increase.
“We remain optimistic about regional
seabourne trade growth and our role within
that growth.”
Eships Dgon
77
Corporate viewpoint Port of Gibraltar
Gibraltar Port –
one stop shop
T
he Port of Gibraltar is seeking to expand its
bunkering capacity with a range of innovative
proposals currently under consideration. Already
the busiest bunkering port in the Mediterranean,
handling 4.3m tonnes of bunkers in 2010,
the port is seeking to further capitalise on its
strategic location by potentially opening up its
eastern anchorage as well as examining propos-
als to move floating storage facilities out of the
harbour. The move comes on top of the port’s
recent successful implementation of a new VTS
system which enables Gibraltar to manage the
vessels entering its port efficiently by warning
them 24 hours in advance of any delays and
significantly cutting congestion.
Gibraltar’s Director of Maritime Affairs Tony
Davis explains: “We are a port which is limited
in size and our focus has to be on dealing
with the ships which call here as efficiently as
78
possible. We are constantly seeking to upgrade
our facilities and services and are currently in the
middle of an Environmental Impact Assessment
(EIA) on whether bunkering should be allowed to
take place on the Eastern side of Gibraltar. Once
the EIA has been completed, it will be opened to
public debate, after which the Government will
take a decision on the best way forward.”
With its strategic location on the edge of one
of the world’s busiest shipping routes - some
110,000 vessels transit the Strait of Gibraltar
each year - the Port of Gibraltar has always
benefited from the geographical advantages
afforded by its natural deepwater bay setting.
Just over 11,000 vessels called at the port in
2010.
Not only is it conveniently located, but its
high turnover of vessels enables its bunker
suppliers, Vemaoil, Cepsa, Aegean Bunkering
theBaltic Winter 2011 www.thebaltic.com
and Bunkers Gibraltar to offer extremely
competitive prices. Gibraltar enjoys a unique
tax-free status within the European Union and
charges low ports dues. Its four bunkering
companies can supply all grades of marine fuel
from 30 cSt to 380 cSt and there are constant
quality checks by each company. Bunkers are
normally delivered by barge while the vessel is
at anchor in Gibraltar Bay, but they can also be
delivered at berth in the harbour.
However, whilst around three quarters of
all Gibraltar port calls are for bunkers. the port
offers far more than a convenient fuelling point
for ships. Tony Davis is keen to emphasise that
it is a “one stop shop for shipping.” He points
out that Gibraltar, whose laws are based on the
UK legal system, is a very prominent place for
ship arrests and home to a huge legal fraternity.
Its ship repair facilities, operated by Gibdock are

currently busier than ever before. The climate,
with mild winters and warm dry summers, is
ideal for year round repairs and thanks to its
work force’s many years of experience, the
quality of workmanship and expertise is second
to none.
Ships transiting the Strait of Gibraltar, but not
wishing to come off charter or leave international
waters can take advantage of the significant
off-port limit operations undertaken by local
companies. These services include supplying
charts, stores, spares etc… and even a change
of crew while still offshore, avoiding the time
and expense of putting into port. Tugs and
other vessels can bring the required stores and
personnel out from Gibraltar and effect a transfer
while the ship is still on the high seas.
Gibraltar is a popular cruise ship destination
with a record 330,000 passengers from 190
calls, visiting last year. “We are currently in
the early planning stages of creating a new
dedicated cruise berth and also refurbishing
the cruise terminal opened in 1997,” says Tony
Davis.
With the opening of a new £55m air terminal,
the number of flights to and from Gibraltar looks
set to swell significantly, further boosting the
attraction of the peninsula for crew changes.
The small size of Gibraltar and the very
close connections between the Port Authority,
Maritime Administration and government work
hugely in its favour when it comes to ensuring
that legislation and working practices support
the needs of shipowners and operators using
the port.
Corporate viewpoint Port of Gibraltar
Tony Davis cites the example of the swift Gibraltar Port Authority
changing of legislation to ensure that cruise North Mole, P O Box 1179
ships can open their casinos and retail facilities Gibraltar
after 1800 when in port. Tel: +350 200 46254
“Speaking to cruise ship operators this March Fax: +350 200 51513
at the Cruise Shipping event in Miami this year, Email: gpaenquiries@portofgibraltar.gi
we were struck by the number of companies
who told us of the financial implications of Ministry for Enterprise, Development,
shutting down many of their commercial Technology and Transport, 771 Europort
on-board operations when in port and how Gibraltar
they were forced to leave Gibraltar at around Tel: +350 200 52052
1700 and circle in the Mediterranean before Fax: +350 200 47677
calling at Cadiz or Malaga the following morning. Email: info@medt@gibraltar.gov.gi
Parliament passed the relevant legislation in
August!” Tony Davis believes that it is this kind Gibraltar Maritime Administration
of attention to detail and swift resolution of a Watergate House, 2/8 Casemates Square
problem which has enabled Gibraltar to stay Gibraltar
ahead of the pack. Tel: +350 200 46861
“We can never afford to be complacent Fax: +350 47770
and are always on the lookout for further Email: maritime.registry@gibraltar.gov.gi
opportunities.”
Gibraltar Tourist Board
Duke of Kent House, Cathedral Square
Gibraltar
Tel: +350 200 74950
Fax: +350 74943
Email: information@tourism.gov.gi
Gibraltar Chamber of Commerce
Watergate House
2/6 Casemates Square
Gibraltar
Tel: +350 78376
Fax: +350 200 78403
Email: info@gibraltarchamberofcommerce.com
theBaltic Winter 2011 www.thebaltic.com 79
Maritime cluster
Rock resilience
Diversification has been a key element in Gibraltar as the Rock
hopes that a new 10% corporate tax rate will encourage investors,
while it continues to build up the shipping registry and attract
ship repair and offshore work
L
ike many other sectors, Gibraltar ship-
yard Gibdock has been targeting the
offshore industry, notably clients in the
jack-up and semi-submersible segment,
and October saw the arrival of the semi-sub-
mersible Etesco Millennium, the first rig into the
yard since 1998.
Gibdock will be carrying out remedial work
on the rig and also conducting a survey to deter-
mine whether further work is needed as the rig
has been in continuous operation offshore for a
five-year period.
The yard’s location makes it ideal for han-
dling rig repairs, whether they are from the
Mediterranean, Black Sea or West Africa. It is
also seeking more work from the offshore survey
vessel segments and cites among its customers
Solstad and Boa Offshore.Boa Offshore dry-
Rock of Gibraltar 
80
docked the 3,000gt offshore survey vessel Boa
Galatea in September, with work including wet
blasting and service work to the ship’s aszimuth-
ing thrusters. Refitting work for the former Royal
Navy vessel Dunster for use as a medical ship for
the Vine Trust is also underway.
Gibdock chief executive Joe Corvelli has
said that despite the uncertain global economic
position, the sectors that the yard has chosen to
focus on are “showing resilience” and good cus-
tomer relationships should see the yard through
the next year in “reasonably good shape”.
The yard has also been carrying out repair
and conversion work for the cruise industry,
including Pullmantur and Louis Cruises. Location
is once again an important factor for cruise
companies in the Mediterranean, which have
seen locally based repair facilities closing down.
source: Gibraltar government
theBaltic Winter 2011 www.thebaltic.com
Terminal refurbishment
The Gibraltar government is keen to encourage
cruise business to the Rock and announced in
October that it planned to start a major refur-
bishment and extension of the existing cruise
terminal so that it can handle larger ships and
more passengers.
The first phase of the project will include
demolition of the ex-Ice Box building and
a 800m2 extension to the existing building.
According to deputy chief minister Joe Holliday:
“The cruise terminal is a major entry point for
visitors to Gibraltar and has handled around
2,500 cruise ship calls and three million passen-
gers since it opened on 17 July 1997”.
However, the extension is essential in view of
the increasing size of cruise ships, with average
numbers of passengers rising 85% between
1996 and 2012. “This means that over a
15-year period, ships have effectively doubled
in size and the cruise terminal is being refur-
bished and extended to be able to handle these
vessels more efficiently and provide a more
contemporary look and feel”.
The government has been lobbying cruise
lines to encourage them to consider Gibraltar
for “partial turnarounds”, the government said.
List of flags of low risk
The Gibraltar Ship Registry has received a
boost with the news that it has now achieved a
place on the list of flags of low risk by the Paris
Memorandum of Understanding on Port State
Control. The Gibraltar registry was audited earlier
in the year. There was a 4% increase in the com-
mercial fleet registered in Gibraltar last year and
new additions were relatively young in age. New
legislation has also enabled 24m-plus yachts to
be registered in Gibraltar, which should prove an
attractive proposition for the Rock if it targets the
superyacht market.
 Maritime cluster

Borders and Coastguard change

The government has also been making changes to
the Borders and Coastguard Agency, which will
be responsible for a number of tasks including
immigration control at points of entry and
security controls at the cruise terminal and air
terminal. The body will also have responsibility
for pollution response and search and rescue
operations. This should streamline activities,
which have in the past been hampered by politi-
cal interventions in salvage operations or paraly-
sis during government elections.
The Borders and Coastguard Agency takes
over responsibility for those functions previously
carried out by private concern Security and
Immigration Limited, and Andrew Bonfante has
been appointed as chief executive of the agency.

Fire findings released

One of the highest profile incidents in Gibraltar
this year has been the fire and explosion in May
at the Nature Port reception facilities. The find-
ings of an investigation carried out by Capita
Symonds on behalf of the government have just
been released.
The investigation looked into the causes of
the incident, as well as the management sys-
tems and health and safety procedures of the
plant operators and the condition of tanks and
plant. Two welders were injured in the blast,
as well as 12 passengers on board the Royal
Caribbean ship Independence of the Seas.
According to the government: “The cause of
the explosion has been attributed to the holes
in the roof of the tanks that allowed flammable
vapour to escape from the tank and into the
atmosphere. The welder, who had been welding
a piece to the guardrail at one of the two main
tanks struck an arc when he began welding and,
in the opinion of the investigator, that arc caused
the escaping vapour to ignite.”
Findings of the investigation include failure to Local attraction source: Gibraltar government
manage contractors when undertaking welding
operations, failure to repair corrosion perforation assessment was underway. The government by government statements on any commercial
on tanks, departures from a “sound health and has said commercial activity within the southern activity taking place within the southern waters
safety management system expected of any waters of Gibraltar’s special area of conservation of the Gibraltar Special Area of Conservation
organisation operating a potentially hazardous must comply with the Habitats Directive and if (SAC) an EU protected area.
plant such as this” and lack of transparency in “any significant impact is identified during the The government says that if any significant
vetting procedures. Nature Port’s licence was Environmental Impact Assessment”. impact on the SAC is identified, a full “appropri-
suspended following the publication of the report The bunkering issue has been a topic for ate assessment” will be carried out. According
and is not due to be lifted until a final decision debate in Gibraltar, not least because of election to deputy chief minister Joe Holliday: “While it is
has been taken on the licence and whether defi- campaigning. On one hand, the intention is to understandable for environmental groups to be
ciencies have to be remedied. provide refuelling during limited time frames, but concerned about any impact that bunkering on
on the other, the proposals have to take into the east side may have on the marine SAC, they
Environmental impact account opposition from environmental groups. may rest assured that this will not be allowed
Bunkering activities on the east side of Gibraltar Competition from other regional ports has made to proceed until the government has fully con-
have also been the focus of environmental the development of Gibraltar a prime initiative if sidered the results of the EIA. The government
activity, following a government decision that the Rock wants to stay in contention with local will publish the EIA when completed and will
the Gibraltar Port Authority was considering rivals, notably Spanish ports. encourage a public debate on this issue. The
allowing bunkering and an environmental impact Conservationists have not been reassured government decision will be taken thereafter”.

theBaltic Winter 2011 www.thebaltic.com 81

PORT OF
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Going green in
Gothenburg
Scandinavian firms have always been at the forefront of new
initiatives to make shipping greener, whether it be port incentives
for green ships, or innovative engine designs
A
s fuel costs continue to rise, one
example of making shipping greener
is the initiative by the Swedish port of
Gothenburg, which has developed a
plan to encourage ship owners and operators
to choose cleaner fuel for their vessels, offering
reimbursements for increased fuel costs.
Shipping lines that choose a fuel containing
a maximum of 0.1 % sulphur can receive up to
SEK 250,000 in compensation for increased
fuel costs and other fuels, like LNG can also
qualify for financial support. Gothenburg has
been charging supplements for vessels with
more than 0.5% sulphur content for a number
of years and the revenue serves to compensate
those owners using cleaner fuels.
When announcing the new incentives,Magnus
Kårestedt, Port of Gothenburg chief executive,
said: “We have worked with our customers to
arrive at proposals for how this revenue should
be used. Providing support for low-sulphur fuel
is one of several initiatives.
“Through this environmental measure, we
aim to demonstrate that it is possible to
take important steps towards cleaner shipping
through voluntary collaboration and our hope is
that, in this way, we will facilitate the transition
to low-sulphur fuels.”
However, as elsewhere, Scandinavian
companies know that the cost of compliance
with new regulations are not going to come
cheap. Many are considering duel fuel systems
using LNG.
Ingvald Fardal, president and CEO of
Norway’s Fjord Line, told the recent Interferry
annual conference in Barcelona that his
company is planning a dual fuel LNG upgrade
within a year of two newbuilds being delivered
in late 2012. “Where we operate is the strictest
control area in the world and it’s going to get
even tighter,” he said. “We know that switching
from HFO to distillate is going to cost a lot of
money and we are not attracted to the scrubber
option, so LNG seems a very good alternative.
“But where can you fill your ship? There
aren’t many facilities in Europe today. And can
you fill with passengers on board? This is a
crucial consideration and we need confirmation
of indications that we will get approval.”
Per Stefenson, marine standards advisor
and R&D manager at Sweden’s Stena group,
highlighted another concern over LNG at the
conference – that the risk of methane slip could
have consequences 20 times worse than CO2
– and suggested that methanol could be the
fuel of the future.
He described a retrofit project with Danish
company Haldor Topsoe in which methanol is
reformed on-board to user-friendly Di-Methyl-
Ether, explaining: “It’s perfect for the diesel
theBaltic Winter 2011 www.thebaltic.com
Scandinavia
process, meets ECA requirements and is also
an economic winner since methanol and LNG
are about the same price alongside ship.
“Will we win a delay? I don’t know, but the
most positive thing about our campaigning is
general awareness of what short-sea shipping
is about and a realisation that the one-size-fits
-all mentality is not always prudent.
“Our efforts have rubbed off in that, if we
had not had this big fight on sulphur, I think
we would have been dragged into EEDI, where
we have now won a two-year extension to find
a workable formula that does not penalise the
special requirements of ferries. Regulators are
very willing to listen, but they need facts and
figures, not sentiment, which is something
our industry needs to work harder on. Lack of
knowledge is the real enemy, not the ambitions
of regulators.”
Former Stena group director of sustainability
Johan Roos, who became Interferry’s executive
director of EU and IMO affairs in September, told
conference that he recalled raising objections to
the sulphur content proposals at the IMO in
2008: “I felt very small with 168 governments
thinking I wanted to kill every child, lake and
flower in northern Europe. But where were the
impact assessments? Only ECSA looked at the
cost of putting freight back on the roads”.
A future with “a much more diverse palette
83
the T h e O f f i c i a l M a g a z i n e o f t h e B a lt i c E x c h a n g e

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of fuels” was the vision of Finnish engine
manufacturer Wartsila’s director of concept
design Oskar Levander. The right choice
involved a difficult equation based on issues
such as area of operation, time spent in ECAs,
whether it was a newbuild or retrofit project, the
space required for LNG tanks or scrubbers and
fuel price predictions.
Marine gas oil was the technically easy,
but high cost solution for meeting the 0.1%
sulphur content limit in ECAs from 2015 meant
other options were “clearly better” for such
operations. Levander said that LNG delivered
the lowest emissions and low price – a third
cheaper than MGO. Although there were space
and availability issues, he added: “LNG has
great potential for newbuilds, offering enhanced
value and short payback time.” The better
retrofit option was to use scrubbers to clean
SOx from HFO exhaust gas – “it’s existing
technology and it works.”
Targeting the Nordic region
Meanwhile, international law firm Norton
Rose recently launched a new internal group
headed by London based Tomas Gärdfors
to target business in the Nordic region.
Norton Rose believes that the trend of
outward investment from Nordic countries
into Canada, Africa and Australia mirrors its
own expansion in these regions, which it
has been making through major mergers in
the past couple of years. Recent years have
seen a constant trend of outbound investment
from Nordic countries into economies such
as Canada, Africa and Australia – the same
regions in which Norton Rose has made recent
deals, including advising on two of the largest
energy wind farm transactions in Sweden,
and a number of recent mining transactions
in Sweden and Finland. The law firm has also
been heavily involved in the Icelandic financial
crisis since 2008 and Swedish based Stena,
and energy giant Vattenfall are also long-
standing clients of the practice.
According to Tomas Gärdfors, partner at
Norton Rose: “It’s no secret that the Nordic
economies are among the strongest in Europe.
Our understanding of the region, alongside our
own growing global footprint, has meant we
have been able to play our part in this fast-
increasing flow of business between the Nordic
countries and international growth economies.
“Until now, most of our work there has been
done fairly opportunistically. It’s meant we’ve
been able to develop a prominent reputation as
one of the most active international practices
in the region, but such an approach can only
take you so far. Establishing this internal Nordic
group will help take us to the next level.”
theBaltic Winter 2011 www.thebaltic.com
Scandinavia
Norwegian tonnage tax
regime comeback
T
he overhaul of the Norwegian tonnage
tax regime in 2007 was infamous
due to the protests and law suits that
followed the government’s decision
to retrospectively tax previously tax-exempted
income, write Are Zachariassen and Anders
Myklebust, partners at Wikborg Rein, Norway.
In 2010, the Norwegian Supreme Court
ruled that retrospective taxation was not
permissible and should be reversed. With this
decision, confidence has been restored in the
tonnage tax regime. All in all, the Norwegian tax
package has now become very competitive and
shipowners, both in Norway and internationally,
are showing an increased interest in the Are Zachariassen
country’s tonnage tax system.
Norway’s tonnage tax regime was first introduced in the mid-1990s, but since then has
undergone a number of changes. The overhaul that took place in 2007 considerably improved
the tonnage tax regime, in particular by introducing a final tax exemption for shipping income.
Although the new rules and final tax exemption were welcomed as being competitive and a
step in the right direction, the retrospective taxation of previously untaxed profits was seen
as unconstitutional and indicated a risk of further politicisation of the Norwegian tax system.
It was thought that many shipowners would look elsewhere to establish themselves as it
could no longer be said with confidence that the Norwegian tonnage tax system offered
the desired certainty and stability.
Since then, views have changed. Shipowners – at least those who were not hit by the
retrospective taxation – have embraced the Norwegian tonnage tax system as it currently
operates today. The emphasis is on the beneficial features of the scheme and not on the political
risks associated with it. The Norwegian Supreme Court’s decision to set aside the retrospective
taxation as unconstitutional has now further significantly contributed to faith being restored in
the Norwegian tax system.
There is a growing interest in the Norwegian tonnage tax system from both Norwegian and
international shipowners. Considering the historical background, and the fact that Norway is
often deemed to be “high tax” territory, the interest from international shipowners is perhaps
surprising. However, such interest makes greater sense when assessing the combined benefits
of the tonnage tax regime and the general Norwegian tax system.
The tonnage tax regime offers full tax exemption on shipping income, including bareboat
income and gains from the sale of vessels, as well as related management activities. The
tonnage tax regime also allows a wide range of offshore vessels to be included, which is not
possible in some EU countries.
Dividends can be distributed without taxation to Norwegian and EU shareholders as a
result of the Norwegian participation exemption. Norway does not impose withholding tax on
interest. Overall, the regime offers flexibility on holding structures and financing and Norway also
has a broad set of double-tax treaties, generally creating a good framework for international
shipping activities.
Overall, the Norwegian tax package can now be considered very competitive in comparison
to other jurisdictions. Added to this competitive advantage is the fact that Norway is an
attractive place for international shipping activities due to the well-developed Norwegian
maritime cluster of shipowners, yards, equipment producers, banks, insurers and a wide range
of service providers, which provide a sophisticated infrastructure that is difficult to better in other
tax-friendly countries.
85
Corporate viewpoint Fleet Hamburg
A new port of call
With the launch of Fleet Hamburg, a strong
maritime law practice emerges
O
n 1 December 2011, a new maritime law
practice, with an initial crew of eight law-
yers qualified in England and Germany, was
launched in Hamburg. It is comprised of the
entire four-man strong team of the practice
area Transport & Logistics at international law
firm Taylor Wessing, who left the firm to open
a new practice with four colleagues from the
Hamburg office of Ince & Co – going by the
name of “Fleet Hamburg”. This will be a new
port of call for all legal matters relevant to the
maritime industry. The following lawyers will be
part of Fleet Hamburg: Christoph Hasche, Axel
Salander, Klaus Kostka, Ann-Kathrin Burchard,
Eva Bodenbach, Arthur Steinmann, Dharshini
Bandara and Philipp Drömann.
Christoph Hasche, Managing Partner at
Fleet Hamburg, says: “We shall concentrate on
advising the German and international maritime
industry, with our focus being ship owners
and managers, charterers and operators of
ships and other means of transport, terminal
operators, as well as their insurers. As such,
we see ourselves as partners for our clients’
day-to-day business and as counsel in complex
disputes or contractual matters, ranging from
ship design through to building and construction
of any vessels or maritime structures.
“Of course, a large part of our practice
consists of charter party disputes, cargo claims
or other disputes arising out of contracts of
affreightment, bills of lading or ship management
contracts, although our aim will be to resolve
disputes in the interest of our clients before
matters are litigated.”
Discussing Fleet Hamburg in the context
of the current economic climate, Christoph
Hasche further sets out the role of his partners
in assisting clients with the often very difficult
assignment of how to deal with economic
problems experienced within a client’s business:
“We have partners who are experienced in
dealing with insolvencies and the restructuring
of companies, and who will be able to guide a
client in finding possible ways out of a difficult
situation before a business becomes insolvent.
In this increasingly volatile economic climate, it
86
is important to stand firmly on the side of ship
owners or other operators when it comes to
the conflict interface between ship owners or
operators on the one hand and banks and other
investors on the other.
“Unlike larger legal practices, we are not
primarily interested in clients from the financing
business and are thus in a position to focus
on advising and representing ship owners
and operators as clients when dealing with
transactional or financing matters. Naturally, and
in the interest of our clients, we co-operate and
liaise with banks, investors and other financial
institutions to find solutions to problems that
find the long term support of all partners in a
business. This is where the in depth knowledge
of the maritime industry and experience of the
lawyers of Fleet Hamburg comes into its own.”
Dharshini Bandara, an English qualified
barrister, with Christoph Hasche also Managing
Partner of Fleet Hamburg, adds: “We have a
strong team in place that complements itself
perfectly. Fleet Hamburg is big enough to belong
to the leading maritime law practices and small
enough to be fast, agile and cost conscious
when meeting clients’ needs. We are in an
excellent position to operate internationally out
of Hamburg. Those we have introduced our
concept to, and also their insurers, have reacted
very positively. ”
Highlighting the depth of legal qualifications
in the team, ranging from German qualified
Rechtsanwälte to an English qualified barrister
and solicitor, Dharshini continues: “From
Hamburg, we can advise on and conduct
litigation before the German and the English
courts, allowing for a more direct and effective
representation of our clients’ interests in the
respective proceedings. Further, we can
represent clients in cases brought before any
arbitration tribunals involving English or German
law, whether located in England, Germany or any
of the arbitration centres worldwide. It follows
from this that we serve the shipping community
and maritime industry doing business in Northern
and Central Europe and internationally.”
Fleet Hamburg consists of a well balanced
theBaltic Winter 2011 www.thebaltic.com
team: an equal number of fee earners and staff
came originally from Taylor Wessing and Ince
& Co Hamburg. Almost half the partners are
women and the age range is balanced. As well
as German-qualified lawyers, there is both an
English-qualified solicitor and a barrister, with a
further English lawyer joining the team in early
2012. All lawyers in the new practice have many
years, even decades, of professional experience
in specialist areas, primarily in shipping and
cross boarder or international commercial law,
and as a result are well connected globally.
The offices of Fleet Hamburg are precisely
where the seed for the port of Hamburg was
planted in 1188, at the Nikolaifleet, set in
the immediate vicinity of venerable Hamburg
ship owners, brokers and related business,
between the churches of Sankt Nikolai and
Sankt Katharinen, only a short distance from the
Rathausmarkt and HafenCity.
For more information, contact:
Dr. Christoph Hasche, Rechtsanwalt:
c.hasche@fleet-hamburg.com
Axel Salander, Rechtsanwalt & Solicitor:
a.salander@fleet-hamburg.com
Dr. Klaus Kostka, Rechtsanwalt: k.kostka@fleet-
hamburg.com
Dr. Eva Bodenbach, Rechtsanwältin:
e.bodenbach@fleet-hamburg.com
Dharshini Bandara, Barrister: d.bandara@fleet-
hamburg.com
Dr. Ann-Kathrin Burchard, Rechtsanwältin:
a.burchard@fleet-hamburg.com
Dr. Arthur Steinmann, Rechtsanwalt:
a.steinmann@fleet-hamburg.com
Philipp Drömann, Rechtsanwalt: p.droemann@
fleet-hamburg.com
Fleet Hamburg LLP
Willy-Brandt-Str. 57, 20457 Hamburg, Germany
Tel: +49 (40) 5 700 700
Fax: +49 (40) 5 700 70 200
info@fleet-hamburg.com
www.fleet-hamburg.com
 German Law

Going for growth

in Germany
International law firms have been expanding their presence in
the German market with some new ventures and an international
approach to serving their clients

N
orton Rose has had a presence there will be a “larger mix
in Germany for 10 years, recently of financing in the future”.
expanding by opening an office in Given the economic climate,
Hamburg, its third in the country. It there is a move towards
is building up its shipping practice, which was more syndication and
previously centred on Munich. a broader base of equity
London-based partner Gordon Hall came to participation.
Hamburg to manage and develop the shipping Senior associate Timo
practice in the new office, which opened on Noftz, who is based in
1 May this year. Although Hall says it might Munich but is in the process
seem strange that Norton Rose has only recently of moving to the Hamburg
opened in Hamburg, “a lot of the issue is finding office, acknowledges that
the right opportunity at the right time”. there had been difficulties
Norton Rose is undergoing a large persuading people that
international expansion and Hall said the “shipping business can be
Hamburg office was already receiving new client done out of Munich” there is
instructions after its second week in operation. a strong transport practice.
The practice will offer a combination “not so He advises, among other
often seen in Germany”, he says, providing both areas, on international
German and English law advice and seeking leasing transactions covering
involvement in cross border syndicated finance. shipping, as well as railways
The legal practice pulled off something of a and aviation.
coup early this year when it hired eight partners According to Verfuerth,
from DLA Piper’s German operation, seven of there is a lot of restructuring
whom are based in the new Hamburg office. going on in the KG market.
According to Ludger Verfuerth, the move from Funds being raised are
DLA was partly with the aim of building up an approximately 2/3 to 1/3 Dr Christoph Hasche of Fleet Hamburg
international shipping practice. divided into fresh money
He says that 80-90% of German shipping for new funds and for believes the outlook for raising funds has
law firms are “boutique” practices and more restructuring work, he says. Given banks’ changed dramatically and it can take as much
nationally focused, and the only truly international hesitation to provide fresh funding, the loan as a year to arrange the necessary funding,
shipping practices based in Germany (aside profile has changed from a debt/equity split of which has a significant impact on many projects.
from Norton Rose) were those of Ince & Co and 70%/30% to 60/40 or even 50/50. With the In the past, there was a large base of retail
Watson Farley & Williams, although the latter is equity portion being much higher, Verfuerth customers who were more than willing to give
more geared to the ship finance side alone. adds that “bridge financing is the difficult part”. the money. This funding base has now shrunk.
Verfuerth says the KG market in Germany Bridge financing had been done by the banks in “We now see more private placement and KG
is changing. There are a lot of challenges and the past but this is no longer the case. Verfuerth houses are now targeting institutional investors

theBaltic Winter 2011 www.thebaltic.com 87

German Law
Jan Heuvels, Ince & Co Hamburg
more,” says Verfuerth.
German shipyards have been building up
their expertise in the areas of specialist ships
to support the offshore industry and Norton
Rose has been providing advice to clients
on contractual matters, as well as obtaining
finance from German banks for these specialist
projects. Another source of work comes from
the cruise industry as German yards take orders
for new ships.
The partners coming from DLA also brought
a strong energy practice. Project finance for
wind farms and the specialist ships to maintain
and build them is a niche area for German
shipyards, and one that fits well with the shift
towards cross border syndicated transactions.
Norton Rose’s expanding network of offices,
which includes strengthening links in South
Africa, Canada, Australia and Latin America, will
help accelerate the internationalisation process.
When asked about expansion plans
in Germany, Hall says the Hamburg office is
moving to new premises with almost double the
space of the existing office, so they are looking
to expand. The company will be covering the
full range of shipping services, but he says it is
still assessing market requirements: “the market
is a strange place at the moment”. Services
will obviously include advice on operational
matters and claims, but also on regulatory
issues, embargoes and sanctions. Norton Rose
has been advising a bank dealing with Iran on
their situation with regards to sanctions.
88
Verfuerth adds that many
Hamburg-based brokers
have been affected by the
sanctions and “feel unsecure
about the situation”.
Fleet Hamburg
Meanwhile, a new maritime
law practice has been set up,
drawing on personnel from
Ince & Co and Taylor
Wessing.
The new practice was
launched at the beginning
of this month with eight
lawyers drawn from the
transport & logistics team
of Taylor Wessing and a
further four lawyers from
Ince & Co’s Hamburg office,
trading under the name Fleet
Hamburg.
The team includes
Christoph Hasche, Axel
Salander, Klaus Kostka,
Ann-Kathrin Burchard,
Eva Bodenbach, Arthur Steinmann, Dharshini
Bandara and Philipp Drömann.
Commenting on the new venture, Hasche,
previously of Taylor Wessing and now managing
partner at Fleet Hamburg said: “We shall
concentrate on advising the German and
international maritime industry – whereby we
seek to be a competent and reliable partner
to medium-sized ship owners, managers and
operators in their day-to-day business and in
complex disputes.
“In this increasingly volatile economic climate
for ship owners and operators, it is important to
stand firmly on the side of the ship owner when
it comes to the conflict interface between ship
owners, banks and other investors. Unlike those
large legal practices, who are primarily interested
in the transaction and financing business of
the big players and are thus hardly in a position
to also advise and represent the ship owner
as a beneficiary.”
Dharshini Bandara, until recently senior
associate at Ince & Co and now also managing
partner at Fleet Hamburg, adds: “We have a
strong team in place that complements itself
perfectly. Fleet Hamburg is big enough to belong
to the leading maritime law practices and small
enough to be fast, agile and cost-aware when
meeting clients’ needs. Those who we have
been able to introduce our concept to, and
also their insurers, have reacted very positively.
We are in an excellent position to operate
internationally out of Hamburg.”
theBaltic Winter 2011 www.thebaltic.com
Along with German-qualified lawyers, there is
both an English-qualified solicitor and a barrister,
with another English-qualified lawyer set to join
the team early next year. The partnership is
further strengthened by a lawyer specialising
in restructuring and insolvency matters, which
is particularly valuable in light of the continuing
shipping crisis.
The German Maritime Arbitration Association
(GMAA), for which Hasche acts as secretary,
and the Society for Hamburg Lawyers (GHJ) will
have premises in the offices of Fleet Hamburg.
Taylor Wessing, meanwhile, is not planning to
offer legal advice in merchant shipping law, but
will remain active in the areas of yacht building,
marine shipbuilding and the offshore-industry.
Dr Wolfgang Rehmann, managing partner at
Taylor Wessing comments: “We wish Christoph
Hasche and his team all the best and express
our thanks for many years of helping to establish
our Hamburg office, which enjoys a reputation
as one of the top names in Hamburg.”
Anniversary at Ince
Ince & Co Hamburg celebrated its tenth
anniversary in September. In the 10 years since
it opened, the office has grown significantly, with
the overall number of lawyers increasing to more
than 20.
Work from the Ince & Co office in Hamburg
is very international in nature with recent
work including advising a major German liner
company on a E1.2bn turnaround, including
loan agreements, finance lease, and an asset
backed commercial paper securitisation.
Ince has also been advising Hamburg-
based shipowners and their banks in relation
to cancellation of newbuilding contracts and
newbuilding disputes.
Other recent work includes advising Far
Eastern yards and banks on restructuring
newbuilding finance and assisting an
international syndicate of banks in restructuring
fleet financing.
According to Jan Heuvels at Ince & Co
Hamburg: “We are very pleased to be celebrating
our tenth year in Hamburg with significant
growth in the office, in response to our clients’
requirements for excellent legal advice. I am
delighted that we maintain our close links to the
shipping and insurance markets and the banking
community, and are extending our reach into the
energy and offshore sector.”
Ince & Co’s senior partner, James Wilson,
comments: “Ince & Co Hamburg demonstrates
the breadth of our practice and our commitment
to clients in Germany and Northern Europe. We
have an energetic and capable team here that
continues to develop and expand.”
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In the
danger zone
The International Union of Marine Insurance continues to highlight
emergent dangers in shipping operations for the benefit of insurers
and shipowners, as Denzil Stuart reports
T
he programme for IUMI’s annual confer-
ence, held in Paris in September, could
be viewed as a catalogue of various
incipient problems that the industry is
up against. Although planning the annual forum
starts months beforehand, the programme is
gradually brought together by IUMI’s seven
technical committees, each of which arranges
a workshop during the three days. These cover
risks associated with hull and machinery, cargo,
offshore energy, fishing, inland waterways and
yachting, loss prevention, facts and figures
(stats), and legal and liability matters.
This year, as might be expected, piracy
was a major topic and expert speakers and
panellists examined the current situation from
several different aspects. Payment of ransoms
falls to hull and cargo underwriters under
the General Average principle, while the P&I
clubs have not normally been involved. But in
Paris, the signal was hoisted that this situation
could soon change, particularly as the Somali
gangs have started taking hostage crews ashore
for detainment.
Meanwhile, the use of armed security per-
sonnel placed on board during a vessel’s pas-
sage through the danger zones continues to be
hotly debated. Those in favour found a surprise
supporter in Britain’s Prime Minister when David
Cameron announced the government would
permit armed guards on British-flagged ships.
The debate continues to rage as this report
is written.
IUMI made clear in Paris that it was sticking
to its guns in that it is not opposed to armed
guards in principle, a decision it announced
early in 2011. IUMI president Ole Wikborg said
the body “puts its weight behind any means that
will reduce the risk to seafarers, the ship and
her cargo”.
Elsewhere, in a pot-pourri of topical sub-
jects, IUMI focused on vessel vetting and cri-
sis management, perishable goods in store,
the development of technology on ships and
its impact on insurers, LNG applications for
modern ro-pax ferries, nuclear-powered ships,
changing risks in the offshore energy market,
overweight containers and misdeclared contents
by shippers, IUMI’s work at the IMO, cargo
theft, Solvency II, and the enlargement of the
Panama Canal.
One very urgent issue was thoroughly exam-
ined and brought close interest among the 600
delegates present, mostly marine underwriters
from IUMI’s 54 member associations. We are
talking about the causes and effects of cargo
liquefaction affecting bulk cargoes such as
iron ore fines, nickel and so on, and how it can
endanger the ship, crew and cargo. Indeed,
this has become a global concern in shipping
following the dramatic loss of several ships and
their crews.
In Paris, Simon Todd, a maritime lawyer from
Ince & Co, said that claims arose in two distinct
areas. First, liabilities, affecting crew/dependants
for loss of life and injury, wreck removal, and pol-
lution. Other claims came from loss of the ship or
repair costs, and loss of time/profit.
Coincidentally, a recent example of the last
point occurred when the bulker Red Gardenia
(39,964gt, built 2005), which had arrived at
Mobile in early August, was delayed because
of a dispute between its owners, charterers
and shipper of its cargo of China-bound iron
theBaltic Winter 2011 www.thebaltic.com
Insurance parlance
ore. The master halted the loading of the cargo
a week later when it was discovered to have a
high moisture content, raising the risk of lique-
faction at sea. In October, it was reported that
the dispute was ongoing and the vessel was
still at Mobile.
As Todd emphasised, cargo may not be
immediately dangerous, but could have a
propensity to become dangerous in certain
circumstances. Under common law, he said,
charterers/shippers impliedly undertook not to
ship dangerous cargo without first notifying the
carrier of its characteristics. But notice was not
required when the carrier knew or ought to have
known of the dangerous nature of the cargo.
The speaker explained that the carriage
transaction involved the head owner (hull/P&I),
time charterer (charterers’ liability), and voyage
charterer/contract of affreightment holder (char-
terers’ liability/traders’ liability/cargo cover).
Daniel Sheard, of marine chemists Brookes
Bell, said that the IMSBC Code (the essential
document published by the IMO to ensure
safety of ships carrying bulk cargoes) places
a responsibility on the shipper to provide
before loading: a description of the cargo and
its properties, including whether the cargo
is Group A; for Group A cargoes a certificate
of the moisture content and transportable
moisture limit, TML. Moisture must be measured
on samples taken no more than seven days
before loading, but TML is not restricted to
seven days.
It was made clear in Paris that industry pres-
sure is intensifying to eliminate the problem, with
the important support of marine insurers and the
P&I clubs.
91
Insurance parlance

Marine Shipping Mutual

run-off
North P&I Club has bought eight million gt hull
and machinery club Marine Shipping Mutual
Insurance, which has been in run-off since
1 July 2011. MSMI was managed by North’s
management company, North Insurance
Management Limited.
According to North’s chairman Pratap Shirke,
“North will now proceed to manage the run-off
of MSMI’s outstanding liabilities. Claims will con-
tinue to be handled by North’s claims handling
team in substantially the same manner as they
have been prior to completion, and former mem-
bers and brokers should continue to contact the
relevant member of North’s team in respect of all
ongoing matters.”
The club said that “the acquisition does not
affect North’s decision earlier this year to defer
the launch of a fixed-premium hull and machin-
ery product, though this remains under review.
We remain firmly committed to our long-standing
strategic aim of expanding North’s product
range beyond its core protection and indemnity
service, and will continue to consider the pos-
sibility of launching a hull and machinery product
in the future.”

War risk
Strong demand from both owners and charter-
ers for its fixed-premium war risks insurance that
offers cover to a limit of $200m is continuing,
according to the Strike Club.
The club attributes this to its ability to offer
a ‘one stop shop’ war risks insurance to cover
traditional hull & machinery risks, while also
providing additional features including loss of
hire due to piracy even in the absence of a
hull & machinery incident, or charterers’ loss of
bunkers resulting from a hijacking.
The Strike Club plans a general increase of
10% for the 2012/13 policy year commenc-
ing February 1 next year for Classes I and II
(shore-related risks), and a general increase of
5% for Class lll (ship-related risks). In addition,
there will be a full review of each member’s
exposure, cover, deductibles and record across
all three classes.
The increases for the three classes are
the same as those applied to the 2011 year.
A release call of 30% was set for 2012/13
for Classes I and II, while the same rate was
maintained for Class III.
Bill Milligan, chief executive of the Monaco-
based club’s manager, said the its results were
considered satisfactory when seen against the
ongoing turmoil in world shipping and financial
markets. “There seems little doubt that strikes
and other forms of industrial and political unrest
Bill Milligan, chief executive of the Strike Club’s manager
will continue to have a serious and erosive
impact on shipping operations,” he said. “The
directors are determined that the club’s financial
position remains robust and adequate to meet
future challenges and obligations.”
Shipowners increase
The Shipowners’ Club has held its premiums to
2010 levels, with an increase of 7.3% in earned
premiums for the half-year ended August 2011.
The club says its strong results are a “reflec-
tion of the organic growth it has experienced
during the 2010 policy year, principally from the
offshore sector”. Entered tonnage increased by
6.5% to 19.45m gt.
Commenting on the results, Shipowners’
chief executive, Charles Hume, said: “We
are very pleased to announce there will be
no general increase to our premiums for the
coming year. Despite a recognition that claims
are starting to increase again, Shipowners con-
tinues to grow, reserves are strong and the
underwriting performance for the first half of the
year is producing some encouraging signs. We
are also conscious that many of our members
continue to experience very difficult operating
conditions, and we believe it is part of a club’s
role to help owners keep insurance costs to
a minimum.”
Despite announcing no general increase
in premiums, Hume said that: “maintaining the
financial stability of Shipowners is essential.
We will review closely the record and risk of
each member, working with the broker to ensure
that the premiums and terms of entry are
commensurate with the risks that each
operation brings.”

92 theBaltic Winter 2011 www.thebaltic.com


Simple mistakes can lead to
costly claims
Charlotte Kirk of the International Transport Intermediaries Club
(ITIC) looks at recent examples of costly mistakes leading to claims
against brokers and agents
T
he first rule that used to be drummed
remorselessly into trainee carpenters
was “measure twice, cut once”. It was
sound advice, because wood is an
expensive commodity and the time to correct
mistakes is before they happen. The equivalent
term in the shipping industry is “check before
fixing”. Merchant ships are no longer made
of wood, but the consequences of making a
mistake can be very expensive.
Shipbrokers are particularly at risk in this
regard. Witness the case of a broker acting for
the owner of a vessel trading in the Mediterranean
who was asked to consider an offer from charter-
ers that included the term “time from 1700hrs
Thursday or a day preceding a holiday until
0800hrs next working day not to count even if
used”. When asked by the owner for the week-
end working times in Algeria, the broker respond-
ed without checking. Sadly, he got it wrong.
Negligent advice
The broker told the owner that the weekend
working times in Algeria were 1700hrs Thursday
to 0800hrs Saturday when, in fact (as set out in
BIMCO’s holiday calendar), the correct answer
should have been 1700hrs Thursday to 0800hrs
Sunday – a difference of 24 hours.
The owner agreed to the fixture following this
negligent advice and calculated the freight rate on
the basis of the shorter period that the broker had
given. The vessel was delayed in port, and laytime
started later than the owner had anticipated. The
eventual shortfall in demurrage was claimed from
the broker. The result was a claim in the amount
of $25,527, which was ultimately settled by ITIC.
This is a classic example of how a claim could
have been avoided if the broker had checked
before answering.
A slightly less classic – indeed, rather unusual
– example of a mistake on the part of a broker
leading to an expensive claim was provided
recently by a chartering broker who arranged
a contract of affreightment (CoA) between a
Japanese owner and an American charterer.
Under the terms of the CoA, the owner had
to offer one ship per month to the charterer,
which had a minimum obligation to make eight
shipments in a year.
By the time the broker had received a nomi-
nation from the owner, the charterer had already
met the minimum requirement under the CoA.
It therefore had no obligation to accept the new
nomination and said it did not require the ship. In
fact, the charterer did have a cargo, but had pur-
chased it from another trading house (the second
charterer) on CIF terms. The second charterer
also had a contract with the same owner through
the same broker and had nominated the cargo
under its own contract with the owner.
The broker’s operations department made a
mistake and thought the cargo had been nomi-
nated under the first charterer’s CoA. In effect, the
same cargo was booked twice on the same ship.
The owner was unsuccessful in obtaining an alter-
native cargo to fill the space on board and claimed
from the broker the full freight it had not received
on the booking, less the broker’s commission.
ITIC argued that the claim for freight did not
take into account saved expenses, such as
the time and cost involved in cargo working.
These costs were deducted, and a settlement of
$70,000 was finally agreed.
Of course, it is not just brokers who are prone
to making mistakes. In a case handled recently
by ITIC, a liner agent in South America had to
reissue an original bill of lading six times, due to
various amendments required by a shipper, in
respect of a consignment of bananas headed for
the UK. The initial three versions of the original bill
of lading provided that freight was to be prepaid,
while the subsequent three versions showed
‘freight-collect’, meaning that the freight would be
payable by the consignee.
The agent had mistakenly interpreted a
theBaltic Winter 2011 www.thebaltic.com
ITIC
comment from the shipper that the “consignee
will pay” as confirmation that the consignee in the
UK had accepted the cargo on a freight-collect
basis and accordingly issued a freight-collect
bill of lading. Unfortunately, while the final bill of
lading was issued showing freight-collect, the
agent failed to update the line’s computer system,
which still showed “prepaid”. Upon arrival in the
UK, the discharge port agent checked the liner’s
computer system, saw the prepaid status and
released the cargo.
It soon became apparent that neither the
shipper nor the consignee had paid the freight,
which amounted to approximately $40,000. The
shipper argued that it had sold the cargo FOB
and provided a commercial invoice and evidence
of payment to support this. Accordingly, the ship-
per argued that the consignee should pay the
outstanding freight. The consignee in turn argued
that it had bought the cargo CIF, and produced
emails to show that CIF terms were discussed/
negotiated. But it failed to provide evidence that
confirmed the final movement of the cargo was
carried out on these terms, claiming that such
evidence was “commercially sensitive”.
Need for care
With the assistance of ITIC, the agent was able
to persuade the consignee that, even though the
cargo had been released prior to freight being
paid, under the terms of the bill of lading the con-
signee was still liable for the outstanding freight. It
was also highlighted that, if legal action needed to
be taken in order to recover the freight, ITIC would
also seek to recover the legal costs incurred. The
agent offered to accept 95 per cent of the freight,
which the consignee ultimately paid.
This is a classic example of the greater need
for care. Many claims result from very simple
housekeeping issues that are overlooked due to
time pressures, or short cuts, which often result
in very large settlements.
93
Legally speaking
Rotterdam
redrafting
A submission to the EU is calling for it to intervene on the
controversial Rotterdam Rules
A panel of international maritime lawyers is urging
the EU to tell its members not to sign or ratify
the Rotterdam Rules unless amendments to the
convention are made.
The legal group believes that the EU “should
either support an initiative by Uncitral/CMI to
draft suitable amendments and protocols to
the current conventions in placed and give the
trading world a more than credible alternative to
what is a flawed proposal that clearly numerous
countries are uncomfortable with, if not have
entirely rejected the same, or take up the initiative
itself if Uncitral/CMI do not proceed with some
degree of urgency”.
The UN Convention on Contracts for
International Carriage wholly or partly by Sea –
known as the Rotterdam Rules – was intended to
bridge the gap between the Hague and Hague-
Visby Rules on the one hand and the Hamburg
Rules on the other “by removing the error in
navigation defence available to the maritime
carrier under the Hague and Hague-Visby Rules
and by increasing the monetary limits of liability to
account for world inflation since the 1920s”, the
group explained in a submission to the EU.
However, one controversial aspect of the new
convention is its expansion to cover not only
the maritime segment by also pre-carriage and
post-carriage by other forms of transport, which
the group says raises the possibility of conflict
with other regulations applied to those forms
of transport.
The group suggests that “it is unhelpful to
expand a unimodal transport convention to
cover other modes as well, since nowadays the
important factor for customers is not exactly how
goods have been carried and which mode of
transport has been used, but rather the desire to
get the goods in the right condition to the right
place at the right time”.
The authors of the report include: José
94
Alcantara, Dr Juru Milos Pohunek, Douglas
Schmitt, Frazer Hunt, Kay Pysden, Professor
William Tetley, Barry Oland, Professor Jan
Ramberg and Julio Vidal.
Other issues the group highlights are that the
rules expand beyond the contractual parties to
include anyone acting as a “maritime performing
party”, which could mean anyone performing
part of the carrier’s obligations during the period
between the goods arriving at the load port
and their departure from the port of discharge.
This could include stevedoring companies and
cargo terminals, which could cause problems for
multi-purpose cargo terminals at ports because it
would be difficult for them to determine to what
extent goods stored in the terminal were covered
by the rules.
There is also the question of the rules’
imbalance between shippers and carriers, the
group says. “Although the carrier enjoys the
privilege of a monetary limitation of liability for
a breach of any of its obligations, the shipper
would incur an unlimited liability, [for example]
in the case of incorrect information given to the
carrier. Whilst it might be understandable that the
maritime carrier would prefer to have a joint and
several liability comprising everyone acting as
shipper and consignee, it may be considered less
acceptable that a party having had nothing to do
with the contract of carriage as such should be
liable under the convention.”
The convention contains a definition of
“documentary shipper” and to qualify as such
is sufficient to agree to be named as shipper in
the transport document or electronic transport
record, and “this might be particularly harmful for
ex-works and FOB sellers who without realising
the consequences may agree to be named as
shippers in bills of lading”.
With all the potential problems contained in
the convention, the group says that it is possible
theBaltic Winter 2011 www.thebaltic.com
that it will never come into force as few countries
have come forward to sign.
The group feels the EU is well placed to offer
an alternative to the Rotterdam Rules, which is
only partially multi-modal, but says it should only
take action if Uncitral/CMI are unable to deal with
the problem because it has experience in drafting
a worldwide convention in order to encourage
worldwide consensus.
“There is no doubt that the Hague-Visby
Rules need updating, but they do not need to
be replaced with a convention that attempts
to be multi-modal without quite achieving this
objective,” the group said.
“What the trading world needs is transparency,
certainty and predictability. Traders do not engage
in reading contract terms and should be guarded
against the risk of being caught by ‘fine print
modification’ Also insurers need a need a firm
basis for setting appropriate premiums and for a
smooth claims handling procedure.”
Common sense decision
London’s Supreme Court ruled in favour of a
common sense decision in shipbuilding contract
disputes in November in the case of Rainy
Sky SA and others v Kookmin Bank [2011]
UKSC 50.
At issue were questions relating to the
construction of contractual provisions in a bond
guaranteeing the refund of instalments under
shipbuilding contracts. Paul Herring of Ince and Co
LLP acted for the successful buyers in the case.
The Supreme Court held that in cases where
there were two different interpretations of a
contractual provision, “the construction which is
consistent with business common sense is to be
preferred”, Ince said in its online analysis.
Terms of advance payment bonds issued by
Kookmin Bank to the buyers, at the shipbuilder’s

request were considered. According to Ince,
Paragraph 2 of the bonds entitled the buyers
to repayment of pre-delivery instalments upon
rejection of the vessel, but did not refer expressly
to repayment in the event of the insolvency
of the shipbuilder. This was, however, stated
in the shipbuilding contract to be an event
requiring repayment to the buyers. Paragraph
3 of the bond then referred to “the pre-delivery
instalments under the Contract…” and went on to
state that Kookmin Bank must “pay all such sums
due to you under the Contract”.
The issue to be decided by the Supreme
Court was whether, on a true construction of
paragraph 3 of the bonds, the buyers were
entitled to repayment under the bonds in such an
insolvency situation.
At first instance, Mr Justice Simon found
in favour of the buyers. The Court of Appeal
reversed this decision. The Supreme Court has
now allowed the buyers’ appeal and restored the
first instance judgment.
According to Ince: “The decision of the
Supreme Court in this case has a wide application,
extending beyond the interpretation of refund
guarantees and advance payment bonds to the
construction of commercial agreements generally.
In his judgment, Lord Clarke sets out in detail the
approach, which should be taken by the courts
when construing contractual provisions in the
event that there is more than one meaning.
In so doing, Lord Clarke has clarified the law in
this area, firmly concluding that “where a term of a
contract is open to more than one interpretation it
is generally appropriate to adopt the interpretation
which is most consistent with business
common sense…”
In the context of drafting refund guarantees
and bonds, the law firm said “the key point to
take away from the Supreme Court judgment
is that clear and careful drafting is required and
that the commercial intentions of the parties must
be taken into account. Otherwise, where the
meaning of a provision is ambiguous, a party may
seek to argue for an overly literal construction
of the provision in question. In particular, the
events entitling the buyers to a refund under the
shipbuilding contract must be clearly covered in
the bond or guarantee.
“Finally and more generally, it is clear that
the court can and will consider the commercial
purpose of a provision when being asked to
interpret ambiguous contractual provisions.”
Venezuela drugs law concerns
Venezuela’s tough anti-drugs legislation continues
to alarm the maritime industry, with masters and
crews of vessels in risk of imprisonment even if
they had no knowledge of drug trafficking.
Legally speaking
In a recent presentation by North P&I Club in favour of the owners, who had decided to
claims manager Henry Woods: “the discovery take the ship round the Cape as opposed
of illegal narcotics on board a ship will in most to transiting the Suez Canal as instructed by
jurisdictions trigger a criminal investigation. The charterers Pacific Basin. The Triton Lark was
problem presented by Venezuela is that the carrying a cargo of potash from Hamburg to
possession of drugs on board a vessel is, of itself, China. Conwartime clauses were included
sufficient evidence to result in the confiscation of in the charterparty. The arbitrators held that
the vessel and lengthy gaol sentences for the the additional costs of going by the longer
officers and crew.” route, which amounted to close to $500,000
Venezuela enacted the Organic Drugs Law should be paid by Pacific Basin, which appealed
just over a year ago, which, explained Woods, the decision.
“appears to increase the evidential burden and Hearing the appeal, Mr Justice Teare
potential penalties imposed on shipowners and considered the issue of whether the Conwartime
their crews. Under the ODL, a crew member will clauses, which say that a vessel cannot be
commit a crime if he is involved in the illicit traffic, ordered to pass through an area where the ship
commerce, sale and distribution, concealment, is likely to be exposed to war risk, applied. Pacific
carriage by any means, storage or brokerage of Basin’s argument was that the arbitrators were
illegal narcotics.” wrong to say that taking the longer routes did not
Seafarers convicted of an offence under the fall under the heading of a deviation.
new legislation face prison sentences of between Mr Justice Teare has referred the matter
15 and 25 years, while judges and prosecutors back to arbitration so that the parties can make
who are deemed not to have properly applied further submissions.
the legislation could face sentences of four to The case is an interesting one as there have
eight years. been concerns among owners that obligations to
The new law, Woods said, means that vessels complete a voyage “with utmost despatch” might
employed in the commission of an offence can be lead to ships being forced to transit the danger
confiscated and judges can order the preventive zone. BIMCO has been drafting new guidance
seizure of a ship concealing or trafficking drugs on the issue for incorporation into charterparties.
for up to three months until a preliminary hearing,
at which the owner must “demonstrate a lack of
intention to commit an offence”.
According to Woods, this places the burden
of proving lack of intention on the owner. “It
is highly unusual to compel a party to prove a
negative – in this case a lack of intention. It is
not yet clear, what if any, evidence would be
accepted by the court as sufficient to discharge
this difficult concept of lack of intent.”
Woods suggested that factors that might
assist the owner in this respect could include the
fact that the vessel was on bareboat charter and
therefore the owner had insufficient control of
its use, the vessel was time or voyage
chartered so the owner did not control the
ship’s itinerary and the existence of a third party
management contract.
Owners failing to enter an appearance or
who are believed to have abandoned the vessel
will have it confiscated one year after the ship’s
preventive seizure.
Piracy dilemma
As shipowners continue to face the threat of
piracy of the African coast, the issue of whether
or not owners are justified in taking a longer
route around the Cape of Good Hope to avoid
the problem has been tested in the English High
Court recently.
At issue was an arbitration tribunal decision Ince and Co’s Paul Herring
theBaltic Winter 2011 www.thebaltic.com 95
Corporate viewpoint RAK Ports
RAK Ports – five niche facilities that
service the Middle East sector
Saqr Port
Located 25 kilometres (km) north of Ras Al
Khaimah City, this is the largest bulk commodity
port in the Middle East, handling a range of
dry bulk materials. Aggregates and rock from
quarries, and cement from cement works
adjacent to the port, are exported to the major
construction projects in the Gulf. The port
handled 27 million tonnes (t) of cargo in 2010,
and is on course to handle 35,000,000t in 2011.
Currently Saqr Port has 12 berths with
a draft of 12.2m, but there are plans to
construct additional berths with a 15.5m draft to
accommodate cape-size vessels. The port has
ISO9001 and ISPS certification.
Al Jeer Port
Located on the border with the Sultanate of
Oman, Al Jeer has a 270-metre quay wall with
a 6m draft, 30,144m2 of warehouses, including
hard frozen and temperature controlled storage
units. Al Jeer Port has a newly opened 266
96
pontoon berth marina, the Barasti Sailing Club,
catering for large luxury yachts, private leisure
vessels and visiting sailing yachts. It is the ideal
gateway to the fjords of the Musandam.
Al Jazeera Port
This shipyard is the Emirate’s new “one-stop-
shop” for dry docking and ship repairing in the
UAE. The port also provides a complete range of
maritime and shipping services.
The port covers a total area of over 450,000
square metres (m2), including the new 50,000m2
dry dock and ship lifting system area. This new
facility has 12 dry berths – eight of which are
67.5m long x 30m wide and four berths that are
77.5m long x 30m wide. The facility’s lifting dock
has a synchronized lifting capacity of 1,100t and
can accommodate vessels up to 55m in length
x 18m wide. Adjacent are nine wet berths, with
a total length of 1,100m. The port has an open
storage area of 74,000m2 and warehouses
totalling 6,200m2.
theBaltic Winter 2011 www.thebaltic.com
RAK Khor Port
RAK Khor Port is a unique city centre port
located at the entrance of the Creek in Ras Al
Khaimah City. The port estate is 323,858m2 ,
and provides a multifunctional facility handling
all types of cargo. Offering a range of modern
facilities and services, the port provides for
local importers and exporters. Facilities are also
available for specialist companies undertaking
ship repairs and maintenance, together with
general warehousing and temperature controlled
storage. A new passenger/cruise terminal is also
operational, handling small cruise liners servicing
the increasing tourist activities in Ras Al Khaimah.
The port has a total covered warehouse area
of 28,000m2, comprising five units at 1,512m2
each, nine units at 1,944m2 each, and two cold
store units at 1,512m2 each. There is also an
open storage area of 60,000m2 that is available
for short or long term contracts.
 Corporate viewpoint RAK Ports

RAK Maritime City Free Zone

Occupying an area of 8,000,000m2, this new
maritime industrial park boasts a dedicated
harbour covering 820,000m2 of water, and
almost 5km of new quay wall, with private/
exclusive use jetties. The harbour entrance
approach depth is 9m and there is a depth of
7m alongside at all the new berths. Plot sizes
range from 25,000m2 to over 1 million m2. Plots
are available with an exclusive jetty of 100 linear
metres, which require a minimum leased area of
40,000m2 .
RAKMC Free Zone is able to incorporate
companies either as FZE and FZC entities, and
is issuing industrial, commercial and general
trading licences, along with work permits and
UAE residence visas.
RAK Ports, and the services offered, is
rapidly driving the economic development of
Ras Al Khaimah, which in turn is reinforcing the
Emirate’s global business footprint.

For more information contact:

Group general manager RAK Ports
E-mail: gm@rakports.ae
www.rakports.ae
Saqr Port
Al Jeer Port
Al Jazeera Port
RAK Khor Port
RAK Maritime City

theBaltic Winter 2011 www.thebaltic.com 97

Commercial profiles

Solace Global Maritime Ltd

S
olace Global Maritime is a worldwide
provider of bespoke security services for the
maritime industry. These services are the
resultant product of experience from the UK
Military and Special Forces combined with an
intimate and sympathetic understanding of the
requirements of today’s commercial user. We
believe in the consistent delivery of excellence
and an unrivalled knowledge of our client’s
requirements. We set the standard for security in
the modern marine environment.
Solace Global Maritime conducts over 1200
transits annually through the high risk area and
currently provides a service for between 70-90
vessels. Our UK-based Operations Team delivers
round-the-clock incident management, maritime
intelligence and vessel tracking services. We
deliver exclusively to the maritime industry,
meaning that you will receive a focused, pertinent
product – not a service that has been adapted
from elsewhere in the security sector.
We offer a range of consultancy and security
services for all types of vessel and user, from
commercial fleets to private yachts. With a
global footprint and wide-ranging industrial and piracy is real and fast-moving and that its impact
operational insight, our services cover every on shipping is acute. We allow your vessels
facet of maritime security, from armed protection freedom of passage through otherwise
and fleet management, to crew training threatened waters, saving you time and providing
packages and vessel recovery. All of our working the freedom that you demand.
practices are in line with current industry
guidelines, including IMO Best Management
Practice 4. We also hold the ISO9001
accreditation and are registered with the BMF,
the ICoC, SAMI and BAPSC.
Solace Global Maritime provides guidance
and training for your crews while our teams are
on board your vessels, but we also conduct staff
training exercises. These exercises are based on
previous actual maritime security incidents and
will help your personnel plan for a security
incident. They will also help you to develop your
own security guidelines, which can be used in
concert with the security teams that we provide.
At Solace Global Maritime our ethos is the
delivery of excellence in all that we do. This Solace Global Maritime Ltd. (UK)
is evident in the personnel we provide, the Tel: +44 (0) 1202 308810 UK office
equipment we use and the on-going support Email: info@solaceglobalmaritime.com
that we offer. We understand that the threat of Web: www.solaceglobalmaritime.com

Going an extra mile

V ega ship management DMCco (VSM),
incorporated in Dubai in July 2008, is an
independent and ISO-9000 certified company
that is involved in various commercial shipping
activities. The company is managed and run
by shipping professionals with over 100 years
of accumulated sea going experience and over
70 years of accumulated experience of working
ashore in the shipping industry.
VSM’s employees are its core strength,
working in a safe and environmentally friendly
environment. The company is committed to
going that extra mile in order to exceed its
customer’s expectations.
Strategically located in Dubai, VSM works
with the Far East as well as the West during its
working hours.
It currently provides a wide range of
services. Its operation management/post-
fixture operations service involves the day-to-
day commercial running of ships, such as
loading, discharging, agency, bunkers, charter-
party administration, demurrage/dispatch, cargo
related claims, off-hires, daily noon position
monitoring, performance calculations
claims, monitoring ship’s SIRE/CDI approvals,
and so on.
and
In operations management work, the
company strives towards improving client
returns with savings in time and cost.
It offers a port captaincy service in the
Arabian Gulf and Indian subcontinent area. The
scope of work involves attending the vessel at
the load/discharge port and ensuring that the
vessel utilises its resources to maximum effect
to load/discharge her cargo in an efficient and
smooth manner.
It also offers gassing up and cooling down of
gas tankers. It is well placed to offer this service
in the Arabian Gulf and the Indian sub-continent
area for vessels that need expertise in gassing
up and cooling down after dry-docking, repairs,
or during gas-change operations.
Its loss control of cargo service in the area
(Arabian Gulf and the Indian sub-continent)
involves supervising the loading and discharge
operations of cargo and, if required, it will place
one of its superintendents on board to monitor
the cargo during the voyage to ensure minimum
voyage/transit loss. At discharge ports, its
superintendents work in conjunction with the
ship’s crew for efficient discharge operations
ensuring minimum time on board.
It offers a cargo tank cleaning supervision
service in the Arabian Gulf, Indian Sub-continent
and the Far East for chemical tankers, which
require complex tank cleaning routines.
VSM’s superintendents and managers are
extremely experienced and are always up to
date with the relevant rules, regulations and
requirements of operating ships commercially,
including complex operations of oil, chemical
and gas tankers.
Tel: +971-4-3516969
Mob: +971-50-6510094
E-Mail: ranjan.mookherjee@vegaship.ae
E-Mail: ops@vegaship.ae

98 theBaltic Winter 2011 www.thebaltic.com


DP World –
putting customers first
D
P World operates in more than 60 termi-
nals across six continents*, with container
handling generating around 80% of its revenue.
In addition, the company currently has 10 new
developments and major expansions underway
in 10 countries.
The company aims to enhance customers’
supply chain efficiency by effectively managing
container, bulk and other terminal cargo.
Its dedicated, experienced and professional
team of nearly 30,000 people serves customers
in some of the most dynamic economies in
the world.
The company constantly invests in terminal
infrastructure, facilities and people, working
closely with customers and business partners
to provide quality services today and tomorrow,
when and where customers need them.
In taking this customer-centric approach, DP
World is building on the established relationships
and superior level of service demonstrated at
its flagship Jebel Ali facility in Dubai, which has
IMS Marine Surveyors & Analytical
Laboratories Ltd. Vancouver, BC
IMS was established in January 1992 and has
grown to become one of Western Canada’s
largest independent marine surveying and cargo
inspection organisations. IMS has earned a
reputation as being unbiased, objective and
professional. Based in Vancouver, Canada’s
largest port, IMS offers a comprehensive range
of professional consulting, superintendence,
inspection, testing and marine surveying
services across Canada, USA and worldwide
for International Traders, Brokers, Producers,
Buyers, Charterers, Owners, Insurances and
Legal Entities.
IMS offers a full-service surveying and
analytical laboratory, providing professional
testing, certification and consultation in the
grain, oilseed, meals, fats & oils, biodiesel,
chemicals, marine, environmental and food-
related fields. The company has developed
sophisticated computer software for different
kinds of surveys and is fully compliant with
relevant international standards. IMS became
ISO certified in 2001 and is currently certified
under the ISO 9001:2008 standards by BSI. IMS
been voted “Best Seaport in the Middle East” for
17 consecutive years.
In 2010, DP World handled nearly 50 million
TEU (20-foot equivalent container units) across
its portfolio from the Americas to Asia. With a
pipeline of expansion and development projects
in key growth markets, including India, China
and the Middle East, capacity is expected to rise
to around 95 million TEU by 2020, in line with
market demand.
* As of September 2011.
Includes non-container terminals
is a FOSFA Superintendent and CFIA certified
sampler for Phytosanitary Certification, and is
also the Flag State Ship Inspector representing
Bahamas, Barbados, Cyprus and Panama, and
Class Surveyor for CR Taiwan, OMCS Panama
& Qualitas Panama. IMS is an IICL Container
Inspector and the only certified ultrasonic hatch
cover tightness testing firm on the West Coast.
The company is widely used by most major P&I
and H&M Clubs for their various surveys.
In today’s highly competitive and challenging
shipping industry, losses can materialise in many
ways. Lost time, damage, leaking hatch covers,
cargo contamination, unprofessionally performed
inspection/surveying work, unfamiliarity with local
conditions etc can be major cost factors. IMS
could reduce your exposure to costs and claims
by being your on-site representative, providing
experience, prompt, factual, and competitively-
priced marine surveys, cargo inspections and
testing.
IMS offers a first-class, reliable and
rapid analytical service based on modern
instrumentation and cutting-edge techniques,
theBaltic Winter 2011 www.thebaltic.com
Commercial profiles
www.dpworld.com
which facilitate International Trading according
to governing standards and legal requirements.
IMS Laboratory is a FOSFA Analyst L1 (the only
one in Canada) and a COPA referee Laboratory.
IMS’s achievements in research and method
development have been recognised by USA
and Canadian authorities and producers in
chemistry and oil testing. The application for
direct testing for sulphur and phosphorus by
ICP-OES has quickly become one of the most
widely-used method in North America for the
quality of vegetable oil, beef tallow and biodiesel
testing, and is available online at: http://las.
perkinelmer.ca/Content/applicationnotes/far_
sulphurandphosphorusbiodiesel.pdf
For more info visit: www.ims-van.com
Captain Jostein Hoddevik, President
Dr. Tatiana Hoddevik, Head of Laboratory
Tel: (1604)298-9968 (24 hrs.)
Fax: (1604)298-4862
E-mail: admin@ims-van.com
99
Commercial profiles
FX4Cash – so good it sells itself
W
ord of mouth is often hailed as one of the
most powerful methods of marketing. It’s
hardly surprising that we would rather take advice
from colleagues or friends, than the company
that is enthusiastically promoting its products or
services to us.
The best products and services should sell
themselves, because customers will voluntarily
recommend their good experiences to others.
This, say Deutsche Bank, is what it is seeing
happen with its FX4Cash solution in a number
of industry sectors, and in particular in the
shipping industry.
FX4Cash, put very simply, is Deutsche Bank’s
start of the art, highly flexible cross-currency
payments platform.
Launched in 2008, the platform enables
clients to process international (or domestic)
cross-currency payments (and receipts) to or
from almost anywhere in the world, with more
than 125 payment currencies reaching almost
180 countries.
One of the first companies to adopt the
platform was a UK shipping company, and now,
The world needs risk
P
opulations, technologies and data are
growing faster than ever. Today’s emerging
market could be tomorrow’s super power. Today’s
prototype could be tomorrow’s mainstream
product. Needs change as the world moves
forward faster.
Whether it’s properties, transport, energy, art,
manufacturing, aerospace, contracts, people,
or insurance, moving things forward is what our
clients do. And moving forward means risk.
We do risk like no one else
Change is changing. Problems are greater. The
stakes are ever higher and answers are harder
to find.
We’ve got what it takes to find answers
where others don’t dare to search. We have the
knowledge and experience. Global capabilities.
Local experts. Scale and financial strength. The
people, the drive and the technology.
What we do sets ideas free, changes
industries and turns plans into reality. What we do
invents the new and fixes the broken. We see it as
100
as the word has spread around the industry,
numerous other shipping companies from Europe,
the US and Asia are exploiting FX4Cash to handle
high volumes of cross-currency payments, which
often need to be made in distinctly exotic places
and currencies.
Being a fully automated solution, transactions
are processed faster, with an extremely high level
of accuracy (as there is no manual handling), and
typically funds reach the beneficiaries faster than
ever before – this is a very welcome benefit in a
sector where speedy delivery of funds can be
critically important.
Being accessible via electronic (web based)
channels, SWIFT or secure file transfer, means
most organisations can access FX4Cash with
minimal changes to existing processes.
In developing FX4Cash, one of the biggest
challenges Deutsche Bank faced was to build a
real time linkage between its payment processing
architecture in its Transaction Bank and its FX
trading platforms in Global Markets.
By overcoming that challenge, the result is
a payments platform that can treat a $50 cross-
our opportunity: to unleash the world’s capacity
to advance. To make our clients’ worlds go.
Insurance
Businesses that are moving the world forward
choose us as their partner.
Because we analyse the numbers but listen
to their dreams. Because we’re solid but fast.
Because we’re experts in our field, but always
open to new possibilities. And because we
make top service and fast, fair claims handling
our priority.
It’s all thanks to the widely experienced
underwriters who are experts in the industries
they serve, engineers who work all across the
globe and support teams that help them do
what they do best.
From large corporations to mid-sized
businesses, even some inspirational individuals,
we cover clients in more than 100 countries.
Our capacity means we can work across their
Casualty, Property, Professional and Specialty
Risks.
theBaltic Winter 2011 www.thebaltic.com
currency payment as if it were a $10 million FX
trade – in other words instantly traded at live
market rates.
By executing FX payments at live market
rates, costs can be driven down as less spread
needs to be built in to the exchange rates. This
is because there is no need to cover FX volatility
during the delay between when a bank receives
the payment instruction, and when it can execute
the FX conversion.
You could say that FX4Cash is to pre-existing
cross-currency solutions, what the iPhone was to
the earlier generations of mobile phones – not a
new idea altogether, but an existing idea that is
taken to a far higher level of sophistication and
client experience.
When marketing budgets are tighter than
ever, it must be great bonus to have a solution
that sells itself!
Find out why so many of the world’s leading
organisations are already using FX4Cash. Contact
Deutsche Bank at fx4cashteam@db.com
Facts and figures
We focus our business on P&C (non-life)
insurance and reinsurance activities.
Our Insurance businesses participate in more
than 1,600 global programmes and lead more
than 70% of these.
We have about 4,000 employees worldwide.
About 600 underwriters, 400 claims experts,
more than 200 engineers. And growing.
We can serve clients in more than 100
countries.
We have clear and focused corporate
responsibility activities at XL. Focused on
community and philanthropy, environmental
stewardship, ethics and governance.

KTK Tugs
W
ith a fleet of powerful tugs, The Curacao
Towage Company provides superior tow-
age & salvage services not only in the bus-
tling Curacao harbour, but also throughout the
Caribbean, Central America and the northern
coastal regions of South America.
Our services include: ocean towage, harbour
and coastal services, barge and dredger
transportation, fire fighting assistance, port
and terminal towage, crew management and
training, and technical maintenance, all based on
the Lloyd’s Register Quality Standards.
Our mission statement is “Through expertise,
strength becomes power” and the our vision
is to position itself as a strong and reliable
towage company, serving both the domestic
and international sectors.
Our mission is to exceed the expectations
of every client by offering outstanding customer
service, increased flexibility, and greater
value, thus optimising system functionality
and improving operational efficiency. This
expertise combined with hands-on experienced
employees, ensures that our clients receive the
Trident Special Risks Versicherungsmakler GmbH
– the marine kidnap and ransom insurance specialist
T
oday’s world of political and economic
instability has unfortunately increased the
level of risk of kidnap and hijack for ransom,
especially for the maritime industry. The threat is
undoubtedly real and the losses, be it financial,
personal or reputational, are greater than ever.
2011 has been a record year for pirate
hijackings, with more than 30 hijacked vessels
already in 2011 with ransom payments averaging
between US$5-US$5.5 million. Despite an
estimated US$1.3-US$2 billion being poured
annually into a complex naval counter-piracy
operation, pirate attacks are still at an all-time
high. The Indian Ocean is plagued with piracy,
this phenomena is also spreading to new
territories in the Gulf of Guinea. Armed security
on board the vessels has, on the one hand,
proven to be a deterrent, on the other hand
though, history does show that pirates adapt to
changing situations.
Based in the vibrant maritime city of
Hamburg, Germany, we, at Trident Special
Risks, are proud to be an independent and
most effective and professional service.
As experts in the towage & salvage field,
our employees are involved in every stage
of client service, from the towage & salvage
request implementation to completion, offering
continual functional and technical support.
They have degrees from Dutch nautical schools
and are constantly brought up-to-date on the
latest technological developments. Our close
relationship with the Dutch Marine Division
makes its expertise, support and guidance
readily available.
Our extensive skills encompass all aspects of
implementation and operation, including business
requirements definition and development of
functional specifications for client approval. The
Curacao Towage Company is always available
online for handling client contact.
We possess operational and technical
experience that makes us strong and reliable.
Our powerful tugboats stand ready 24 hours a
day, able to rush out under any circumstances.
The ASD tugs that we possess can pull at a 360o
angle, making them exceptional guides for all
privately owned insurance broker, highly
specialised in Marine Kidnap and Ransom
insurance and very well positioned to provide our
ever growing maritime client base access to the
constantly changing international kidnap and
ransom insurance market.
We strongly believe that, next to ensuring
robust preparation and preventative measures,
putting the right Marine Kidnap and Ransom
(and/or Marine Loss of Hire for Piracy) cover in
place is essential in safeguarding extremely
high-value human and shipping assets.
Nevertheless, buying such a highly specialised
product has been and always will be, an
extremely delicate matter for everyone involved.
Being long-standing Industrial, Maritime and
Kidnap and Ransom insurance professionals, it
is our strong belief that such matters should
therefore only be handled by truly independent
and dedicated specialists, who operate in a
highly confidential and sensitive manner, which
is also in-tune with the clients needs.
We also strongly believe that anyone facing
theBaltic Winter 2011 www.thebaltic.com
Commercial profiles
kinds of ships manoeuvring in difficult conditions.
They are all equipped with state-of-the art
fire fighting, salvage and telecommunications
equipment. We pride ourselves on the proven
raw, pure strength of our tugs, the engines and
the machinery we have used effectively since
1985.
We have the expertise to turn strength into
the power to tow thousands of vessels a year
and have the power to provide a range of
professional, reliable and efficient services.
Exceptional functioning and effectively
directing team members with Nautical, Technical
and Management skills, coupled with extensive
maritime knowledge make the Curacao Towage
Company strong and reliable.
Pletterijweg z/n, Willemstad, Curaçao,
Tel: (+599(9) 461-1055
Fax: (+599(9) 461-2055
E-mail: s.reenis@ktktugs.com
Website: www.ktktugs.com
such risks should have access to a network of
the best service providers, such as professional
crisis management advisors, legal advisors,
media response advisors and maritime security
companies, just to name a few, should the need
arise. Because of this, we are constantly in
contact with certain service providers that we feel
provide the best possible solution in their field.
Let our expertise be your peace of mind.
TRIDENT
SPECIAL RISKS
Trident Special Risks
Versicherungsmakler GmbH
Ochsenwerder Landscheideweg 12,
21037 Hamburg
Office: +49 40 30 89 30 29
Mobile: +49 176 127 077 71
Skype: leo.kissel
E-mail: leo.kissel@trident-sr.com
www.trident-sr.com
101
Commercial profiles

MV “Lone” performs SAL’s heaviest-ever lift

O
n its maiden voyage, the company’s latest
new building MV Lone performed SAL’s
heaviest-ever lift. With its lifting capacity of 2 x
1,000 tonnes SWL the vessel loaded eight
reactors weighing up to 1,719 tonnes and
measuring 45 x 8 x 8 metres.
As part of the RPLC Deep Conversion Project
Phase II in Venezuela these massive reactors
were manufactured in Japan. They are destined
for the PDVSA Puerto La Cruz refinery in
Venezuela. The project was awarded to SAL
by the Dutch heavy lift specialist Mammoet
Logistics BV.
On its voyage, the MV Lone first called at the
Japanese port of Higashi-Harima where two
reactors were loaded, it then continued on to
Muroran to take a further six reactors on board.
From Muroran the vessel sailed through the
Panama Canal directly on to the port of
Chaguaramas in Trinidad where the reactors are
temporarily stored before being carried to their
final destination of Puerto La Cruz in Venezuela.
After careful preparation, the reactors were
discharged in record time: the heaviest reactor
of 1,719 tonnes was set ashore in just 2.5 hours.
The speed and performance of the loading and
discharging operation resulted from a successful
interplay and extensive preplanning between the
joint team of SAL and Mammoet, the highly
skilled and experienced crew, and the state-of-
the-art lifting equipment on board. The human
expertise of the SAL crew was accompanied by
the necessary infrastructure on board the Lone:
a lifting arrangement of 40 tonnes and shackles
weighing about 4 tonnes – equaling the weight
of two passenger cars. With this job, the vessel
almost fully exploited its unrivalled lifting capacity
only weeks after being introduced into the market.
Together with its sister vessel, MV Svenja, the
Lone is one of the two largest heavy-lift vessels
in the world. It has a lifting capacity of 2,000
tonnes, a speed of 20 knots and a DP2 system.
With these features, the Lone has all the
necessary elements for undertaking highly
complex projects for the oil and gas industry as
well as for the offshore sector.
Apart from its high performance, the Lone
also possesses an Environmental Passport,
which means it meets the highest environmental
standards. It is also ISO14001 and OHSAS
18001 HSE certified. The heavy lifter measures
160.5 metres in length and 27.5 metres in width,
and has a loading capacity of 11,000 tonnes and
40,000 cubic metres.
SAL ranks among the world’s leading heavy
lift shipping companies. From its head office in
North Germany, SAL operates an international
network of agencies and maintains its own
offices worldwide. The company has a total of
570 employees across the world. It operates a
fleet of 16 heavy lift ships. The vessels’
management is fully handled in-house. SAL’s
internal engineering department deals with all
technical load-related matters, while developing
innovative transportation solutions for individual
customer needs. With effect of 30 June 2011,
the K-Line Group acquired another 50% of the
SAL Group and with that became the sole
shareholder of the company.
www.sal-heavylift.com

Taking a hands-on approach

S
ince 1979, West Atlantic Marine Limited has
provided the Bahamas and International
Insurance and Marine Industry with quality
marine surveying and consultancy services. We
are a full-service Marine Survey and Consultancy
company that provides a very “hands on” station
that is somewhat different from the norm.
For the past 22 years, we have represented
the flag state requirements as inspectors
and surveyors (non-exclusive agents) for
ship registry within the Bahamas (Bahamas
Maritime Authority).
West Atlantic Marine is poised and ready
to provide all marine interests (underwriters
and owners) with efficient and quality services
throughout the Bahamas, Turks and Caicos
Islands and throughout the Caribbean.
Our team comprises quality, internationally
recognised general marine and engineering
surveyors who possess maritime experience
and expertise in excess of 100 years combined.
We are also proud to have on our staff Please visit our website www.wamcoltd.net or
qualified surveyors recognised by the Society www.westatlnaticmarine.net.
of Accredited Marine Surveyors (SAMS), the We look forward to serving you and
National Association of marine Surveyors your clients.
(NAMS), and the International Institute of Marine
Surveyors (IIMS).
Our diverse marine services include – but
are not limited to – marine surveying of a variety
of marine craft, ranging from small private
pleasure vessels through to commercial
ships of all sizes and types; cargo damages
and structural damages to marinas, harbours
and ports.
Rescue, marine emergency, salvage and
towage services, and loss adjusting are also
available through our group of companies.
Our aim is to provide our clients with
fast, efficient and economical results, while
maintaining a high quality product and
service. We are proud to be a part of our
clients’ solutions.

102 theBaltic Winter 2011 www.thebaltic.com


Worldwide Project Consortium
The leading brand for project professionals
T
he Worldwide Project Consortium Ltd
(WWPC) is the leading dedicated network
for project cargo freight forwarders. Founded
in 1998, WWPC deliveres a global marketing
and network platform, based on a franchise
agreement.
Through annual membership conferences
and exhibiting at international trade fairs, WWPC
has rapidly gained a very solid reputation among
those who are actively involved in heavy and
outsized cargo movements.
Our experts from around the world provide
a full range of project planning and forwarding
support services:
• Project and logistic freight management
• International project forwarding by sea and air
• Door-to-door multimodal freight management
• Inland transportation
• Cargo consolidation
• Customs clearances
• Customs tariff and by-law advice and
consulting
Sea Marshals Ltd
S
ea Marshals Ltd is a UK limited company
that provide security solutions to merchant
vessels travelling through high risk areas in the
Indian Ocean, Arabian Sea, Red Sea and the
Gulf of Aden.
Fully licensed in Djibouti for services and
weapons and also licensed in Galle & Sri Lanka
Sea Marshals Ltd have facilities for embarking/
• Warehousing, storage and distribution
• Cargo computer documentation, cargo
tracking and EDI services
• Supervision of heavy lifts, outsized and
hazardous cargo
• Chartering by sea and air
• Planning and consulting services.
WWPC offices gain admission on their
knowledge and experience. Each formally
undertakes to operate under a strict code
of conduct and only the most dedicated,
experienced and viable experts in project
forwarding, with a proven track record, will be
admitted to the WWPC.
Our companies have gained a steadfast
reputation in international project forwarding and
logistics management services around the world.
The network is operated by transport-qualified
directors, assisted by a members’ elected board
of advisors. WWPC is a member of the Baltic
Exchange in London, United Kingdom.
The WWPC and its international marketing
disembarking men and weapons in Muscat
and Richards Bay, S.A. Sea Marshals Ltd are
fully licensed members of SAMI - Security
Association for the Maritime Industry.
Sea Marshals Ltd can supply both armed
and unarmed security guards facilities and all
men are European nationals with a minimum of
3 years military experience.
theBaltic Winter 2011 www.thebaltic.com
Commercial profiles
to shippers of heavy and outsized cargo is also
represented through Heavy Cargo News, an
online publication and magazine.
Wolfgang Karau
Director WWPC Ltd
Tel: +34 (0) 690 708 964
wolfgang.karau@wwpc.eu.com
www.wwpc.eu.com
Heavy Cargo News
www.heavycargonews.com
Qualifications of guards include STCW95,
SSO, Firearms certs, Anti-piracy course, first aid
and criminal records checked.
Sea Marshals Ltd also has its own fleet of 5
vessels that can be provided for vessel escort
services. These vessels can hold between 20
and 40 men at one time. The vessels have a
range of up to 5000NMs.
Sea Marshals Ltd has a dedicated 24 hour
operations centre located in the UK.
www.seamarshals.com/
103
Events

What’s on
where
A round-up of conferences, exhibitions and events
in the shipping world

January 16-17 Singapore February 21-22 London

February 7-8 London LNG Shipping
April 23-24 New York Current and future opportunities in a market which many
believe holds the key to emissions control.
Freight Derivatives & Maritimecustserv@informa.com
Shipping Risk Management
A course providing an introduction or shipping risk, freight
rate, bunker and ship prices risk, freight rate options and March 6-7 London
clearing and settlement of shipping derivatives contracts. 4th Chemical and Product Tankers
www.balticexchange.com/training Annual gathering for owners covering commercial and
operational issues.

January 18-19 Singapore www.navigateevents.com

February 9-10 London

March 19-21 Stamford
New York 25-26 April
CMA’s Shipping 2012
Advanced Freight Modelling & Trading
This is the Connecticut Maritime Association’s major
Spot freight rate dynamics, spot and time charter markets, international conference.
modelling freight volatility and pricing options in freight
wwwshipping2012.com
markets are some of the topics.
www.balticexchange.com/training
March 27-29 Copenhagen
January 30-31 Greenship Technology conference
Challenges for sustainable shipping.
Middle East Liner Shipping Conference
Maritimecustserve@informa.com
What does the future hold for Middle East liner services?
Maritimecustserve@informa.com
May 30-31 Jakarta
Feburary 7-8 Copenhagen 10th Asean Ports and Shipping Conference
The biggest annual ports, shipping and logistics exhibition in
Ro-ro Shipping Conference
the Asean region.
Optimising environmental performance and financial viability.
Enquiries@transportevents.com
Maritimecustserve@informa.com

June 4-8 Athens

Posidonia 2012
The world’s largest maritime event will be taking place at the
Matropolitan Expo Centre this year.
www.posidoniaevents.com

104 theBaltic Winter 2011 www.thebaltic.com

Posidonia
4-8 June 2012, Metropolitan Expo, Athens Greece

A unique blend of
business and social interactions
at the heart of Shipping
Be part of the great Posidonia experience
at a state of the art new venue

The International Shipping Exhibition

Organisers: Posidonia Exhibitions SA, e-mail: posidonia@posidonia-events.com

www.posidonia-events.com
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