- Growing the Baltic in the USA
Full of energy, Paul Mazzarulli says that he’s relishing his latest challenge: representing the Baltic Exchange in the USA.
A representative in the USA is a first for the Baltic, and one which Mazzarulli believes will be of huge benefit to US headquartered companies in the chartering and trading hubs of Houston and Connecticut in particular.
“The Baltic’s showing a real commitment to the US and I think that the Baltic offers so much more than the American market currently realises,” says Paul Mazzarulli.
Whilst many companies will use the Baltic Exchange’s data, many are unaware of the practical benefits of the disputes resolution and escrow services, as well as the importance of having an influence on the routes reported and vessel descriptions used.
“These are changing times for the shipping industry and I think it’s vital that the Baltic offers a forum for US members. The 2020 sulphur cap, ballast water management regulations and blockchain are all big challenges and opportunities for an industry which is currently going through a generational shift,” says Paul Mazzarulli.
From a commercial point of view, the 2020 sulphur cap is a major issue for the shipbroking industry to address.
“Will it lead to a two-tiered VLCC market split between scrubbed and eco-ships and how do chartering desks account for this?” asks the new Baltic representative. “The Baltic clearly has a big role to play here and I think that it’s vital that the US firms have a voice in this debate,” he adds.
The Baltic will be holding a Baltic US Advisory Council (BUSAC) in Houston on 25 October, at which members will be able to share their views and suggest solutions.
The Baltic’s showing a real commitment to the US and I think that the Baltic offers so much more than the American market currently realises
Whilst the towns of Stamford, Westport and Greenwich in Connecticut have traditionally been at the centre of the American chartering and trading industry, Houston is fast emerging as an ever-more important chartering hub. Strategically located, with low taxes and in the Central Time Zone, Houston is the main US office a range of international shipbroking and shipping companies including Braemar ACM, Clarksons, Howe Robinson and SSY as well as established Connecticut shops like MJLF and Weber. Over the past five years Houston has seen strong economic growth and a net growth in population as ever-more international and US companies choose to base themselves in Texas.
According to Mazzarulli, the American international shipping community is split between Houston and Connecticut. Whilst the East Coast has its own well-established shipping organisations such as YSP New York and the Connecticut Maritime Association which facilitate great networking, in Houston there is “an absence of professional camaraderie.”
He believes that the Baltic has a great opportunity in Houston to bring the disparate shipping and trading community together through its networking events.
The 49-year-old Baltic Exchange representative says that he’s already spent 47 years in the oil business. His late father founded the oil brokerage PVM Oil Associates and he remembers the telex machine spitting out information at home and the excitement of ships and their cargoes moving around the world.
After seven years in the market analysis & consulting group at PVM Oil, Paul graduated from Pace University School of Law and then joined the credit and contract group at Sempra Energy Trading. He became a Baltic Exchange member when joined MJLF in 2003 and led their FFA brokerage effort, and was also the Chairman of the FFA Brokers’ Association (Tankers) at the Baltic. He subsequently joined Noble Group to manage its clean oil operations; between 2006 and 2010 he established and managed the biofuels and freight desks at Evolution Markets in New York.
In short, Paul Mazzarulli has lived and breathed tankers all his life and looks forward to building the Baltic’s presence.
Contact details Paul Mazzarulli
T: +1 475 529 0122
- Brexit: Article 50 process should be extended, says Maritime UK
Maritime UK, an industry body for the British maritime sector, has urged the UK government and European Union to extend the Article 50 process if a deal is not agreed by October. The Baltic Exchange is a member of Maritime UK.
According to a recent survey commissioned by Maritime UK, 66 per cent of UK maritime business leaders think a ‘no-deal’ scenario is now likely, with just half of them saying that they have made preparations for such an outcome.
Maritime UK, whose members facilitate 95% of UK trade, is calling on all parties to get behind the Prime Minister’s Chequers accord, and for the European Union in turn to show pragmatism.
With half of business leaders questioned having not made preparations for a no deal, Maritime UK believes there is not enough time to prepare for crashing out of the EU.
Of the 507 business leaders polled, more than half (58 per cent) supported the agreement reached by the Cabinet at the recent Chequers summit, which includes a new UK-EU ‘free trade area’ and a commitment to replacing the free movement of people with a ‘mobility framework’.
The survey found that the major no-deal concerns for business leaders are increased costs and supply chain disruption, including delays at ports.
Welcoming the survey’s publication, David Dingle, Chairman of Maritime UK, said:
“Business leaders from across the economy support the maritime sector’s call for a pragmatic Brexit deal that enables frictionless trade. We cannot accept that no deal is better than any deal. A worrying number of business leaders from all sectors and parts of the country now believe a ‘no deal’ is the most likely outcome. If we fail to agree a deal by October, it is in the interest of both the UK and EU to extend the Article 50 process.”
“Failing to secure a deal will mean delays and disruption at ports like Dover, Holyhead and Portsmouth, but equally at EU ports including Zeebrugge, Calais and Dublin. We urge both sides to recognise an agreement is in everyone’s interest, and to be pragmatic so that a deal may be agreed quickly. The maritime sector welcomed the Chequers accord and the renewed pragmatism it demonstrated. It’s time that Brussels demonstrates that same pragmatism now.”
- Member update: 08 August
The following company has applied for Corporate Membership:
Company Individual Emirates Global Aluminium PJSC Mr D Goulianos
The following individuals have applied for Membership under an existing member company:
Company Individual Maritime London Mr J O Standerwick RWE Supply & Trading GmbH Ltd Mr C Ashman Grieg Shipbrokers KS Mr N Yin Fearnleys A/S Mr P Lambert P&O Maritime Services Pty Ltd Mr A D F Crooke Pacific World Shipping Pte Ltd Mr G Singhal The China Navigation Company Ltd Mr J S Miller Campbell Shipping Company Limited Mr A Pinto
The following individual has applied for Sole Trader Membership:
Mr N R Pentreath t/a Capricorn Shipbroking
Any comments should be passed to Karen Karanicholas by 15 August 2018.
- Baltic Exchange Freight and Commodities Forum, Copenhagen
On 27 September 2018, the Baltic Exchange will be holding its Freight and Commodities Forum in Copenhagen.
The event will open with a networking lunch followed by sessions on:
- Commercial Impact of the 2020 Sulphur Cap
- Dry Market Outlook
- Bulk Commodity Trends
- Dry Benchmark Revisions
- Freight Risk Management
The forum is open to member companies and invited guests only.
The event will commence with a networking lunch at 1 pm.
To view the full programme, click here.
To register, click here.
- Baltic Tanker Market Session, Copenhagen
On the morning of 27 September, the Baltic Tanker Market Session will bring together clients and brokers from across the European wet markets to hear freight and commodity output forecasts from leading analyst as well as updates on benchmark revisions and proposals. This will be followed by a networking lunch for all market participants.
Part of the Baltic Exchange Freight & Commodities Forum
The session will take place between 11.30 am – 1 pm.
To view the full programme, click here.
To register, click here.
- Trade triumphs and trials
Put simply, it’s a tumultuous time for trade. As temperatures have risen across the Northern Hemisphere this summer, so has the heat on global trade: while the EU and Japan inked what has been described as “the world’s largest bilateral free trade deal” in July, early August saw trade tensions escalate between the world’s biggest export economies — China and the US.
On the first day of the month, US President Donald Trump’s administration said that the President had told US Trade Representative Robert Lighthizer to consider increasing proposed tariffs on $200bn of Chinese goods to 25% — from the 10% figure the administration was considering. Although a senior official for the administration claimed that no particular action had caused the recommendation, China fired back, with its State Council threatening to slap duties ranging from 5% to 25% on $60bn of US products — or over 5,200 US items — if the White House progressed with the levy threat. Officials from the country accused the US of “unilaterally” increasing tensions between the two superpowers.
Back in July, the US government released a list of the $200bn worth of Chinese products it was then planning to place a 10% levy on. Coal, steel and aluminium were included on the roster. Items on China’s August list include metals, agricultural products and lumber.
The latest developments follow months of similarly high trade tensions between the US and China. In early July, the US government placed a tax of 25% on roughly $34bn of Chinese imports, with major categories of products covering equipment and machinery. China responded with an equivalent 25% levy on $34bn of American goods, but instead of taking aim at mostly technological and industrial products, it went for the agricultural sphere. Wheat, corn, rice, sorghum and soybeans were all hit by the tariff. A second wave of taxes by the US — on a further $16bn of products — are pending, constituting part two of tariffs, on $50bn of imports, announced by the US in March. China has said that when this second set enters into force, it too will slap its 25% levy on an additional $16bn of US exports.
In light of what now seems impossible not to describe as a “trade war” between the US and China, the EU and Japan appear to have set themselves up as champions of multilateral trade co-operation
Strengthened trade across the pond
In light of what now seems impossible not to describe as a “trade war” between the US and China, the EU and Japan appear to have set themselves up as champions of multilateral trade co-operation.
Just 24 hours after President Trump infamously refused to endorse the assessment from the US government that Russia interfered in the 2016 US presidential election, EU leaders Jean-Claude Juncker and Donald Tusk, along with Japanese prime minister Shinzo Abe, “sought to establish themselves as the flag-bearers of the free world, in response to Donald Trump’s show of apparent solidarity with Vladimir Putin”, promoting the perks of the EU and Japan’s free trade deal. Mr Tusk described the pact — the EU-Japan Economic Partnership Agreement, which covers a third of the global economy and will remove almost all tariffs on products traded between the two parties — as “a light in the increasing darkness of international politics”.
“[Implementation of the deal] is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order,” he said.
The European Commission said in July: “In the current international environment, an Economic Partnership Agreement between the EU and Japan will send a powerful signal to the rest of the world that two of the largest economies are resisting protectionism and promoting a rules-based international system. Openness to trade and investment remains one of the best tools to harness globalisation and create more economic growth and jobs. There is no protection in protectionism.”
The agreement is expected to enter into force next year. Once it has been ratified by parliaments from both camps, it will get rid of around 99% of levies on Japanese products from the eighth year following its implementation (car part taxes will be removed straight away), with the European Commission saying that the deal “will also focus on solving non-tariff measures”. Exports of goods and services are anticipated to be boosted by 13% once the deal has been put in place, with annual EU exports to Japan forecast to go up by €13bn.
Dry bulk bonus
Dry bulk shipping looks set to profit from the deal. According to the European Commission, it is anticipated that EU businesses selling agri-food products, forestry products and pharmaceuticals will benefit from the increased ease of exporting to Japan. With regards to the opening up of the Japanese market, the European Commission says that an ambitious trade agreement could deliver opportunities for the multinational organisation, specifically, in the agri-food and pharmaceutical industries.
Under the deal, Japan will remove duties on over 90% of agricultural exports from the EU “from day one”, and with products too sensitive for Japan to get rid of duties completely, duty-fee quotas will be increased or duties will be lowered for EU produce. The European Commission says that the pact will boost Japanese quotas for EU exports of malt and that EU exports of chemicals to Japan are predicted to see an annual increase of 6.9%, or an extra €1.6bn.
There’s no doubt that tariffs impact trade. And with negative impacts of President Trump’s tariffs having already been felt, it’s unsurprising that Mr Tusk has identified tariff wars, as well as irresponsibility, unpredictability, political uncertainty and excessive rhetoric, as threats to businesses and the business of moving cargo will be no exception.
- Baltic Wine Society: Spanish Tasting
On Wednesday 5 September the Baltic Exchange Wine Society welcomes back wine expert David Hughes to host a celebration of the emerging wine regions of Spain.
Guests will be welcomed with a glass of Reserva Cava followed by a further six wines of varied styles of grape, accompanied by a selection of tapas.
The event is priced at £15 for members, £20 for non-members (prices exclude VAT) which includes all seven wines and tapas.
Seats are limited so those interested in attending should register their interest in good time by emailing firstname.lastname@example.org
To view the flyer, click here.
- OSCAR Dragon Boat Race 2018
The annual OSCAR Dragon Boat race takes place on Friday 14 September in Canary Wharf to raise money for Great Ormond Street Hospital through the OSCAR Campaign.
Competing against other companies in two heats of 250m races, the top six teams will battle it out in a final. No rowing experience necessary, there will be a safety briefing and demo before you begin. Each team is comprised of 11 participants: 10 rowers and one drummer. Please do invite spectators along to cheer you on, GOSH will encourage them to make a donation on arrival.
For more information or to register your interest, please email Sian Simpson at email@example.com or phone her on 020 3841 3135.
- Seaview Sailing Weekend
Come and enjoy a weekend of sailing and socialising on the Isle of Wight. The Seaview Sailing Weekend is open to company teams (three or more people) as well as individuals of all abilities teaming-up. Split into six short races aboard Mermaid boats, sailors range from expert to learner, offering competition at all levels.
There will be ample opportunities for comparing notes and socialising from arrival on Friday, 7 September evening through to lunch on Sunday, 9 September including around a three-course dinner at the Yacht Club on Saturday night with late bar, tombola and prize giving. To find out more, email Philip Bacon, AM Nomikos (UK) Ltd.
Photos from previous events can be found here.
Recent entries in the Regatta include:
Lykiardopulo & Co
Howe Robinson Shipbrokers
Holman, Fenwick & Willan
Peter Dohle Schiffahrts