- Baltic Exchange launches new ship operating expenses assessment
The Baltic Exchange has launched a new assessment to track the cost of operating vessels. Initially covering a range of dry bulk vessels, the service will also be expanded to tankers and other sectors.
The Baltic Operating Expense Index (BOI) will be published quarterly and based on assessments from three leading independent third-party ship management companies: Anglo-Eastern, Columbia Shipmanagement and Fleet Management. Collectively they manage a fleet of over 1,800 vessels. Additional companies are expected to join the panel in the future and a residual price calculation added later this year.
Baltic Exchange Chief Executive Mark Jackson said:
“The Baltic Operating Expense Index is intended to provide transparency to the fluctuations in running costs. Daily operating costs are one of the variables used by shipping investors to calculate the profitability and residual value of their assets. We already provide independent freight, sale & purchase and recycling assessments. With the addition of operational expenses assessments, shipping investors now have a complete toolkit to manage their risk and aide their decision process.”
Each panel member will submit four numbers, expressed in USD per day. Three will be combined to produce the BOI:
- Crew (USD per day, including all fees)
- Technical ((USD per day, including all fees)
- Insurance (USD per day, including all fees and rebates)
The fourth, an assessment of a five year Drydock cost, will be amortised over five years to give a USD/day price, but published separately and will not contribute to BOI.
Assessments will be provided quarterly. Q4 2018 and Q1 and Q2 2019 assessments are available following a recent trial. Q3 2019 assessments will be published on 17 October. The assessments will be available on www.balticexchange.com to subscribers to Baltic Exchange market information services.
The vessels initially assessed are:
Capesize: 180,000 mt dwt built in “first class competitive yard”, 199,000cbm grain, LOA 290m, beam 45m, draft 18.2m SSW. Not ice classed, not scrubber fitted, 5 years old & special survey passed.
Panamax: 82,500 mt dwt built in “first class competitive yard”, 97,000cbm grain, LOA 229m, draft 14.43m. Not ice classed, not scrubber fitted, 5 years old & special survey passed.
Supramax: 58,328 mt dwt on 12.80m draft SSW built in “first class competitive yard”. LOA 189.99m, Beam 32.26m, 72,360 cbm grain, 5 holds/hatches, 4 x 30mt cranes with 4 x 12cbm grabs. Not ice classed, not scrubber fitted, 5 years old & special survey passed.
Handysize: 38,200mt dwt at draft 10.538m SSW, built in “first class competitive yard”, 47,125cbm grain, LOA 180m, beam 29.8m, 5 holds, 5 hatches, 4 x 30mt cranes. Not ice classed, not scrubber fitted, 5 years old & special survey passed.
Baltic OpEx Crew:
Value expressed in USD/Day:
Wages fully loaded (national costs, agency, overtime, standby)
Unions, Dues, ITF
Victualling and domestic provisions
Training, STCW requirements, in-lieu-of-cadets training cost (cadets not in standard complements)
All other Manning expenses other than Insurance
Manager’s Fees relating to crewing, or an apportionment
Baltic OpEx Technical:
Value expressed in USD/Day
Stores: Deck, Engine, Stewards’
Repairs: Deck, Electrical, Engine
Surveys, Flag, Class
Spares, transportation, clearances
Superintendent / technician travel and per diem / fees
Owners’ protective Agents, husbandry fees, launches
All other General Expenses and unrecoverables, other than Insurance
Manager’s Fees relating to technical, or an apportionment
Baltic OpEx Insurance:
Value expressed in USD/Day
Governing principle is inclusion of all cover required to present vessel for worldwide trading within IWL and excluding HRA
Hull and Machinery including Disbursements or Freight Interest Insurance
War and Strikes Risks
Protection and Indemnity including cargo, crew, third parties, stowaways, damage caused by vessel/FFO, pollution, wreck removal
Freight, Demurrage and Defence
Cost of Baltic standard deductible incidents per period, Manager’s Fees relating to managing Insurance, or an apportionment
Anglo-Eastern is a leading, independent, global provider of ship management services, with about 650 vessels under full technical management, over 200 under crew management, and a technical services division that has overseen some 450 new buildings and conversions to date.
Its managed fleet comprises all ship sizes and types, including bulk carriers, container ships, tankers (oil, gas and chemical), ice-class OBO, LPG FSO, semi-submersible heavy-lift carriers, pipe-layers and off-shore construction and support vessels.
Anglo-Eastern is headquartered in Hong Kong and conducts its ship management services through a network of more than 25 offices and specialist centres located across Asia, Europe and the Americas.
It has direct control in the recruitment, training and development of its pool of nearly 28,000 seafarers in India, the Philippines, Ukraine and China.
About Columbia Shipmanagement
Columbia Shipmanagement (CSM) was established in Limassol, Cyprus, in 1978. With over four decades of experience in managing all types of vessels, CSM has become a leading force in its field. With more than 380 vessels (approximately 50 of them Bulk Carriers) under full and crew management, Columbia is today one of the largest independent ship managers world-wide.
Columbia’s core ship management offices are located in Cyprus, Germany, Singapore and China, while two affiliated offices are located in Greece and Germany.
Through its strategic network of owned crewing agencies located in Europe, Russia and Asia, Columbia has direct access to highly qualified and experienced sea-going personnel. Our 14,500+ employees, on land and at sea, form the foundation upon which we have built our range of services from technical, crew and commercial management, to new building supervision, consulting and cruise vessel services.
Columbia is committed to providing its customers with competent, safe and environmentally sound and cost efficient services meeting best industry standards. At Columbia we believe in establishing firm long-term relationships with our clients, partners, and employees, treating each individual with proper respect and dignity. With high retention rates among our employees on-board and ashore, we are able to retain valuable accumulated experience for the ultimate benefit of our clients and their assets.
About Fleet Management
With a 25-year history, 500+ vessels, 20,000+ qualified seafarers and 850+ shore employees, Fleet Management Limited is one of the world’s largest independent third-party ship management companies. For the last 25 years, FLEET has pioneered many of the crewing, safety, and technical standards, which have become benchmarks in the industry.
With a strong compliance team internationally, we observe the industry’s highest standards for classification, flag state, and local environmental regulation. Today, all of our vessels under management are assured by the industry’s highest standards, which include ISO 9001, ISO 14001, OHSAS 18001, ISO 50001 and ISM code compliance certificates from DNV.
Headquartered in Hong Kong and supported by 25 offices in 12 countries, Fleet Management is dedicated to maintaining the asset value of our clients’. We ensure the vessels under our management are kept in optimal condition in terms of mechanics, technology and crew management – and in a state of operational readiness and compliance.
Fleet Management Limited is a proud subsidiary of The Caravel Group Limited – together we are dedicated to providing our clients first-class service with a wealth of knowledge and experience, and equally important, to expressing transparency, commitment, and integrity in our services and philosophy.
- Baltic and GeoSpock publish white paper
In August the Baltic Exchange announced that it has partnered with GeoSpock, the geospatial big data company, to build the world’s most advanced maritime spatial database. The partnership is designed to enable the continued provision of independent, impartial assessment of the maritime industry at a scale never before seen in the sector.
The Baltic Exchange and GeoSpock have now published a document titled “The future of data in the maritime sector: driving change through geospatial data” which outlines the partnership’s vision in detail.
The first project being assessed is a maritime air emissions programme which will take data from a range of sources to provide industry with an enhanced understanding of vessel emission profiles.
Click here to download a copy.
- 2020 Baltic diaries now available to order
Baltic diaries and pocket diaries for 2020 are now available alongside other items via the Baltic’s online shop.
- New study outlines steps to grow UK shipbroking
A detailed report by PWC, commissioned by Maritime London for London International Shipping Week, says that whilst the absolute number of shipbrokers in the UK has grown, the UK is losing market share.
The study, Catching the Wave, sets out 36 recommendations designed to boost shipbroking as well as other professional sectors which make up the UK’s $6bn maritime services industry including finance, legal and insurance. These include:
- Strengthen the core of ship owners and charterers
Recommendations include the appointment of a government ‘shipping czar’ to drive a campaign to attract more ship owners and charterers to the UK
- Deepen the UK lead in specialist segments
The UK has a significant lead in maritime disputes and insurance. Recommendations include the development of legal frameworks for AI, autonomous vessels and carbon emissions to strengthen this position.
- Rebuild the UK’s position in ship finance
The UK has a marginal presence in ship financing following the exit of RBS and Lloyds from the market. Recommendations to revive ship finance include achieving dual listings of large shipping companies on the London Stock Exchange; developing London as the leading offshore centre for RMB based ship leasing and greater sector outreach to the deep pool of UK based institutional investors.
- Extend the UK’s lead in technology
Measures to improve the adoption of digital technologies by the maritime sector including the creation of a government and industry backed fund focused on supporting innovation and the designation of maritime as a priority sector within existing government schemes.
- Increase the talent pool
The availability of skilled staff is a key driver of success for the maritime cluster. Ensure that post-Brexit visa and immigration rules mean that UK firms can recruit the best international staff as well as measures to increase the number of merchant officers, increase diversity and further internationalise the UK’s maritime colleges
- Enhance cluster effect benefits
The positive effect of having multiple maritime service providers in one location needs to be further enhanced. Recommendations include working more closely with other European clusters, proactively engaging with developing economies and virtual clustering initiatives.
The 64-page report analyses the strengths and weaknesses of the UK’s shipbroking, legal, insurance and finance sectors.
The report’s authors note that while other clusters have narrowed the gap in shipbroking, the UK still remains the leader with more brokers than any other cluster. In addition, seven of the top twenty shipbroking firms (including two of the top three) are headquartered in London. “This ensures that the UK remains one of the key centres for shipbroking as it is at the centre of talent and information transfer within these companies.”
The report also notes that 7% of shipbrokers in the UK have worked at three or more firms and that 12% of UK shipbrokers have previously worked in chartering, finance or the legal, classification or insurance sector. The report says: “While this can be seen as a cost to the individual firms concerned, it both promotes the transfer of knowledge and makes the UK a more attractive destination for talent.”
Click here to download a full copy of the report.
- Strengthen the core of ship owners and charterers
- FFA training courses: London
There are still limited places available on the Baltic’s freight derivatives training courses in London (7-10 October).
Freight Derivatives & Shipping Risk Management
An overview of risk in the shipping business. Topics covered include freight rate risk management, derivative instruments, freight rate options, bunker and financial risk management, ship price risk management, Value at Risk and credit risk.
Advanced Freight Modelling & Trading
A focus on pricing freight options, modelling freight rate dynamics, constructing forward curves, modelling freight rate volatility as well as hedging and trading strategies.
For full details please visit www.balticexchange.com/other-services/training-2/
- Member update: 11 September
The following company has applied for Corporate Membership:
Company Individual BDO LLP
Mr C R Alliston-Greiner Mr P J Cowen Mrs C Forman-Kotsapa Mr M E Simms The Britannia Steam Ship Insurance Association Limited
Ms J Binnendijk Mr D Birch Mr Michael Bird Mr J Bott Mr D Bridges Mr A Cutler Ms D Dellow Mr J Flaherty Ms V Frew Mr A Camona Gill Mrs E Hagell Mr D Hammond Mr D Harley Mr V Kakamoukas Mr A Moir Mrs J Morgan Mr K Samaritis Mr M Steer Mrs C Vella
The following individuals have applied for membership of an existing member company:
Company Individual Basrah Gas Company Limited
Mr W Mahdi Mr A Yaseen Beaufort Shipping Ltd Mr W Stephens Clarksons Platou Mr Y Apostolidis Thurlestone Shipping Ltd
Mr N Kemp Mr I Thompson
Trafigura Derivatives Ltd Mr A Mishra
The following has applied for retired membership.
Mr C E M Cox
Any comments should be passed to Karen Karanicholas by 18 September 2019.
- LISW: Baltic Exchange drinks reception
Baltic Exchange Members attending London International Shipping Week (LISW) are invited to join a complimentary Baltic Exchange drinks reception following the Baltic Exchange and TradeWinds International Shipbroking Forum on 11 September.
The reception takes place from 5.30pm at Savage Garden on the roof of the Doubletree By Hilton, Tower of London Hotel.
Places are limited, so please register by email to firstname.lastname@example.org to ensure your attendance.
- Marine art exhibition at the Baltic
Mall Galleries will be holding an exhibition of pastel paintings by Matthew Draper at the Baltic Exchange between 4 September and 4 October. Matthew Draper is the 2019 winner of the Baltic Exchange Award at the Royal Society of Marine Artists’ Annual Exhibition. Paintings will be displayed in the Baltic Bar and around the building.
This exhibition draws together his winning painting alongside other works from recent series that approach the relationship between water and light. His atmospheric landscapes take us from the Scottish Islands of Skye and Raasay to the busy River Thames and down into the West Country to Falmouth Harbour, a site he has revisited over the course of 25 years.
Draper won the Baltic Exchange Award for the pastel painting Nocturne with A Polluted Light, a depiction of Falmouth Harbour at night, the dockyard lights blurred through the fog and cranes, the hull of a ship, floating buoys just discernible in the glow.
“I became interested in how to combine the two types of reflections; whether it be the lit-up dockland, and parts of the town or the remaining evening light, with the movement seen on the surface of the water,” said Matthew Draper.
The artist identifies himself principally as a draughtsman and uses soft pastel as a medium, crushing it in his hands and manipulating the material to build up a thick layered surface using the ball of his thumb or the heel of his hand, and even his forearms.
Known for his atmospheric and beautiful depictions of landscape he is interested in and influenced by the dramatic imagery of 18th and 19th century painting.
Draper is an Edinburgh-based artist who has exhibited widely throughout the UK and whose work can be found in numerous private, corporate and public collections including that of The Bank of Scotland, Huawei, Falmouth Art Gallery, Kelvin Grove Gallery and The City of Edinburgh.
All paintings exhibited are for sale through www.mallgalleries.org.uk/buy-art
- Free furniture for collection
Following the closure of its UK office, Baltic Member, Dromon Maritime Agency Ltd., would like to offer Members its office furniture, free of charge.
The furniture is at 46 Gresham Street, London, EC2V 7AY and needs to be taken by Tuesday 24th September 2019. The recipient would need to organise the transport themselves.
Interested Members are advised to contact Brenda Rossall
- The coal-d shoulder?
Good fortune and the number 13 don’t usually go hand in hand, but when it comes to coal, 2013 actually seems to have been the commodity’s lucky year. And it has been downhill from there. The recently-released International Energy Agency’s (IEA) Coal information Overview for 2019 states that in 2018, production levels remained stubbornly lower than 2013’s peak production year.
According to the document, last year, global production of coal went up by 250 metric tons, an increase of 3.3%. Yet, although this was around equal to 2017’s growth rate — and regardless of two years’ worth of substantial growth, production levels were still 162 metric tons less than 2013’s peak production. According to the IEA, the growth was greatly impacted by a 4.5% rise in Chinese coal production. Chinese consumption, however, marked an increase of just 1% last year.
“Coal is still prominent in some non-Organisation for Economic Co-operation and Development (OECD) countries, however global consumption likely peaked in 2013, as the OECD and China shift to lower-carbon energy sources,” oil and gas corporation ExxonMobil said in its 2019 Outlook for Energy: A perspective to 2040 report.
Norwegian multinational energy firm Equinor has a similar view to ExxonMobil. According to the company, writing in its Energy Perspectives 2019 report, demand for coal rose for the second consecutive year, although it is still under the 2013 peak.
Globally last year, export trade of every coal type went up by 4.2% from 1,363.4 metric tons in 2017
“Up until 2013, coal was the fastest-growing fossil fuel,” it said. “Most projections showed that global coal demand would continue to grow for the next 15 to 20 years. Now, many projections show that Chinese and global coal demand may have peaked and will never move above the levels seen in 2013.”
A sea change
With increased societal focus on making the planet greener, the tide is turning against coal, particularly when it comes to electricity-generation – the main destination for the commodity, along with the production of commercial heat. New Scientist reported in July that generation of electricity from coal power stations across Europe dropped by almost a fifth over the first six months of 2019, the steepest decline ever recorded. Indeed, the IEA puts a drop in electricity generated by coal-fired plants in OECD nations down to work towards greening power. According to the 2019 Coal information Overview, the fall by 4.65%, to 2,862.7 terawatt hours, is solely down to the efforts towards the decarbonisation of the power industry.
Although the global share of heat and power created from coal has stayed around 40% across the past four decades, last year, the amount of electricity and heat generated from primary coal as a fuel hit a new low of 25.2% from 26.7% the year before. Furthermore, assuming there weren’t any efficiency alterations last year relative to the year before, coal inputs in OECD countries for electricity and heat-creation marked a possible decrease of 4.6%. The amount of heat created by coal-fired plants in OECD nations went down to 671.4 petajoules from 695.6 petajoules in 2017.
ExxonMobil’s 2019 Outlook for Energy: A perspective to 2040 underlines the notion of an industry in decline. According to the report, global demand for coal in 2017 stood at 147 quadrillion British thermal units, and this was up against the figures for 2010 and 2000. However, demand for the commodity is forecast to be 142 quadrillion British thermal units in 2020, with the outlook dropping down every five years thereafter until it stands at 133 quadrillion British thermal units in 2040.
Stats speak differently
What does this mean for trade in the commodity in the short-term? Given the figures noted above, it would be understandable if interested parties took a dim view. However, it turns out that globally last year, export trade of every coal type went up by 4.2% from 1,363.4 metric tons in 2017. While steam coal exports rose by 42.2 metric tons, or 4.1%, coking coal exports grew by 12.2 metric tons, or 3.8%. The IEA explains that world trade has been growing quicker than world consumption relatively consistently.
“Indonesia and Australia remained the world’s largest coal exporters in 2018, with 30.9% and 26.9% of exports on a tonnage basis,” the body says in the Coal information Overview. “After reclaiming the top exporter’s spot in 2017, Indonesia further increased the gap in 2018, exporting 57 metric tons more than Australia. Australian coal exports increased moderately by 0.8%.”
As for imports, these marked a hike of 3.6% in 2018 in comparison with the year before — to 1,424 metric tons.
“The main contributors to this rise were China, with imports increasing by 3.9% in 2017, to 295.4 metric tons, and India, with a 14.7% rise in imports to reach 240.2 metric tons,” said the IEA.
“More of global electricity demand will be met from renewables, relying relatively less on coal for meeting growing demand,” said Equinor in its Energy Perspectives 2019 report, looking ahead. “However, it is not yet clear whether the growth of renewables is causing a decline in the use of fossil fuels or just representing a new addition. So far, most signs point to the latter one. Despite record growth in solar and wind capacity installations, the world is still increasing its use of fossil fuels.”
As for production, the IEA claims that a trend of declining coal production — in 2014, 2015 and 2016 — was reversed in 2017, with a further rise in production last year driven by hikes in steam and coking coal production.
“China remained the world’s leading coal producer, as it has been since 1985, with 3,550.1 metric tons of total coal produced, 152.9 metric tons (4.5%) higher than in 2017,” it noted.
But with production netherless failing to surpass 2013’s record, it seems that society’s green agenda is making its presence felt — and given the media attention devoted to the issue, it doesn’t look like it will be going away.
The Baltic Exchange will hold its next Shipping Economics & Investment course on 13 and 14 January 2020 in London. More information can be found here.
- City Sailing Regatta
The City Sailing Regatta, organised by the Portcullis Sailing Club and incorporating the Finn Trophy, Crossley Cup and the Dick Chapman Navigator Cups, takes place on 21 and 22 September in Cowes, Isle of Wight.
Only yachts entering under the Baltic Exchange Sailing Association, Stock Exchange Sailing Association or Lloyds of London Yacht Club flags are eligible for the Finn Trophy. All boats shall be entered in the Crossley Cup and Crossley Cruiser Cup. Both of these events will take place on 21 Septmeber, with a first warning signal at 11am.
The fee for entering the event is £55 per boat, with entries to be made online by Friday 13 September. Late entries will be accepted up until Friday 20 September, with an additional £5 cost.
- BEGS Company Cup 2019
This year’s Baltic Exchange Golfing Society Company Cup will be held on Friday 11 October at West Herts Golf Club.
The event is open to teams of two shipbroking golfers. The best combined Stableford score will be the winner.
The Company Cup format is pretty simple, but has a few minor rules:
- Teams of two, competing in four-balls over one round.
- Stableford scoring system, with the combined score counting to each two-person team.
- Each team does NOT have to consist of employees from the same company, clients/visitors are very welcome.
- Teams can be two principals from the same company or different offices, or a principal and a broker or two brokers.
- There is no limit on the number of teams any one company wishes to enter, the more the merrier.
- Baltic Exchange is sponsoring the hole in one on the Par 3’s, with a main prize of a car and other prizes on the rest
- There will be additional prizes for nearest the pin, longest drive in the rough and longest drive on the fairway.
- Official handicap certificates are not required, but anyone playing off 24 or higher that does not have an official club handicap cannot score more than 30 points.
- This event can contribute as one of the sports for the overall David Bradley Cup winner.
Anyone interested in registering for the Company Cup, please contact James Pendered, it will be on a first-come-first-served basis.
Format (all times are approximate & subject to change)
Noon – Arrival time, bacon roll & coffee
13:15 – Tee off for 18 holes from the first tee
18:30 – Drinks/prize giving during dinner
The cost will be £80/player
Herts WD3 3GG
Telephone: 01923 236484 / Pro Shop: 01923 236866