- Interview: new Wet FFABA Chairman Angus Procter Part 2
What is the Baltic Exchange doing to support the market?
The forums and the workshops held throughout the year help market participants better understand what changes, if any, there are in the market, and bringing people together to talk about how best to take this market forward. They are there to give clarity on parameters, so that we are all reading off the same hymn sheet, and to keep the end of day prints both on physical and paper as fair as possible at all times.
What do you want to see more of from the Baltic Exchange this year?
Maybe speed up the process of getting new routes through to live and tradeable, but I realise that may be some time constraints from a legal perspective.
What benefits do you see coming from the Baltic’s five new tanker routes under public trial, is there one that particularly interests you?
The USG VLCC and Afra routes have been trading for a few months, and I think hold real value with the change in trade flows that we have seen at the start of this year, they have both been well received in the FFA market. I think that they comes at a good time, as there is liquidity to spare on the VLs and the Afra markets need a bit of a boost as TD8 and TD19 have gone a bit quiet of late.
What do you think will be the key topics of discussion at next month’s FFABA Tanker Freight Derivatives Forum?
Getting the new routes pushed through to tradeable status asap, supply side dynamic (how has this changed with a strong Q4-18 behind us), and the parameters laid out by the Baltic regarding vessel descriptions as a result of the 2020 legislation changes.
What do you hope the Forum achieves?
That some people coming out knowing more than when they went in! I hope that any new participants realize that this market has a lot to offer, especially in the next 2 years. It will be an interesting few hours, that hopefully clears up any issues that some people may harbour regarding how this year is going to shape up especially going into 2020, and I hope it challenges some people’s views on how this year will perform with the great speakers we have lined up.
Angus will be speaking at the FFABA Tanker Freight Derivatives Forum on 25 February as part of a panel discussion on Sulphur Cap 2020, volumes vs cargo flows, new contracts & benchmarks updates. For more information click here.
About the FFABA
The FFABA is an independent association of FFA broking Baltic Exchange members formed in 1997 and serviced by the Baltic. The Association runs regular forums with the Baltic Exchange to promote FFA trading and bring together market participants.
Chairman (Wet): Angus Procter (Braemar ACM-GFI)
Chairman (Dry): John Banaszkiewicz (FIS)
- Promote the trading of Forward Freight Agreements (FFAs)
- Promote high standards of conduct among market participants
- Liaise with the Baltic Exchange to ensure the production of high quality indices for use by the freight futures industry
- Provide a forum for brokers and principals to resolve problems as they arise
- Develop and promote the use of standard contracts
- Develop the use of other ‘over the counter’ and exchange traded derivative products for freight risk management
- FFABA Tanker Freight Derivatives Forum: 25 February
Coinciding with IP Week, the Tanker Freight Derivatives Forum is the world’s largest FFA gathering for the tanker market.
Hosted annually by the Baltic Exchange and FFA Brokers Association, the Forum features freight market insight and discussions.
Agenda Time Activity 13.30 Registration coffee 14.00 Opening remarks – Angus Procter, FFABA Wet Chair (Braemar ACM-GFI) 14.05 Market services update – Mark Jackson, CEO, Baltic Exchange 14.25 Oil and bunker markets outlook – Mike Davis, Director, Head of Market Development – ICE Futures Europe 15.00 Coffee break 15.20 Tanker market outlook & Sulphur Cap 2020 – Henry Curra, Head of Research, Braemar ACM 15.55
Panel discussion: Sulphur Cap 2020, volumes vs cargo flows, new contracts & benchmark updates with:
Adrian Wooldridge, CCO, Navios Maritime
Angus Procter, Wet FFABA Chairman (Braemar ACM-GFI)
Chris Hudson, Senior Broker, FIS Fuel Oil
Simon Newman, Marine Strategy & Freight Trading, Phillips 66
James Pendered, Senior Freight Reporter, Baltic Exchange
Peter Jackson, Crude Freight Derivatives Trader, Shell
17.00 Drinks hosted by the FFABA at Punchbowl
The event is free to attend for freight and derivative traders and those interested in trading exposure to tanker rates.
- Member update: 23 January
The following companies have applied for Corporate Membership:
Company Individual COLI Bulk Carriers GmbH Mr B Schandevyl Giuseppe Bottiglieri Shipping Company SPA Mrs M Bottiglieri
The following individuals have applied for membership of an existing member company:
Company Individual Braemar ACM Shipbroking Ltd
Mr A Clitheroe Mr A Procter Mr P Donnelly Clarkson Research Services Ltd Ms L Xing Clyde & Co LLP
Mr S Jackson Mr T Kelly GrainCorp Operations Limited Mr J Saenger JERA Trading Singapore Pte Ltd Mr H Endo Norvic Shipping International Ltd
Mr P Borup Mrs S Parnahaj RWE Supply & Trading GmbH Ltd
Mr A Hodge Mrs A Moreira Mr A Solan Mr C Johnson Mrs C Rice Ms C van Emmerich Mr G Pantaridis Miss J Saunders Mr K Sheehan Mr L Boudebza Mr M Reijersen Mr M Sachpazoglou Mr R Glibbery Mr R Jewell Mr S Lee Mr T P Purcell Mr Y Didenko
The following has applied for Retired Membership:
L C Varnavides
Any comments should be passed to Karen Karanicholas by 30 January 2019.
- Shipping’s automation shortcomings
Many nations are yet to develop long-term plans for automation in the maritime industry: that’s one finding of a new report from the World Maritime University (WMU) and the International Transport Workers’ Federation (ITF), Transport 2040: Automation, Technology, Employment – The Future of Work, that explores how automation will impact the future of work in transport.
The publication, described by the WMU as the first ever assessment of the topic, looks into how the global transport sector will change thanks to automation and advanced technologies. It predicts and analyses developments and trends in the major transport sectors to 2040, with an emphasis on the implications for jobs and employment for those working in transport. Informing the report is research from an interdisciplinary team with contributions from industry, academia and regulatory organisations during an 18-month period.
“Transport workers of today and tomorrow must be equipped with the required knowledge, skills and expertise for the jobs of tomorrow,” ITF general secretary Stephen Cotton says in the report. “The ITF–WMU study provides the information needed to support these aims.”
The report has four detailed key findings — and they suggest that the widespread advent of automation and other technologies within transport will not necessarily be a rapid one. The first conclusion is that although demographic trends, economic advantages and safety factors are automation catalysts, in many world transport areas the pace of automation’s introduction will be gradual. The second finding is that the rising trade volume will lead to increased transportation demand in the future, while regional transportation pattern alterations are anticipated.
The third key finding is that with the gradual pace in the introduction of technology and heightened trade volume, employment impacts are predictable. Low- and medium-skilled workers will be exposed to high automation risk, but the speed of introduction and diffusion of technologies will depend on differences in the development phase of nations and their comparative advantages. The fourth key finding is that automation and technology are influenced by local context. Assessing individual country profiles shows that nations and regions are not at the same readiness level to adopt automation and new technologies. The gap between developed and developing countries is highlighted by an analysis of relevant key factors.
While some countries … are trying to become leaders in the field of automation and technology in the maritime sector … other countries will not rapidly introduce the emerging new technology
According to the publication, several trends have been evolving across sectors around digitalisation, increased interconnectivity levels in production processes and advanced automation levels. Implementation of these technologies has already begun in many transport chain areas and will keep impacting upon all transport modes in the future. The report splits the trends into four categories, or “technology clusters”. The first category is automation of vehicles and infrastructure — maritime examples being cranes and automated vessels. The second is maintenance of vehicles and infrastructure (inspection drones fall under this cluster), while the third is user interfaces for customers and equipment operators. The fourth category is new services, like availability-oriented business models and cross-modal transport on demand.
“In maritime transport, the adoption of novel technologies tends to occur at a slower pace. Indications are that agreed international guidelines and regulations regarding autonomous transport are unlikely to be achieved within the next decade,” the report states, though it does claim that greatly automated transport solutions could be brought in at the regional level and governed by national legislation or bilateral deals among neighbouring countries — if there is social acceptance and a strong economic advantage is anticipated.
According to the publication, foresight simulations show that introducing highly-automated ships will lead to a reduction in global seafarer demand by 2040 as regards the baseline projection based on current technology. Bringing in greatly automated vessels can decrease world seafarer demand by 22 percent. Furthermore, the simulations show that such impacts are not compensated by the volume growth of seaborne trade expected for 2040, and they lower automation’s on-demand effect by 8 percentage points. It should be said that for the period being analysed, all the WMU and ITF simulations suggest an increase in the demand for seafarers from 2020 to 2040. However, in the report, a number of shipping jobs, such as ship captains and ship officers, are earmarked as job profiles in transport with the least automation potential.
The report also shows that in maritime, a “readiness gap” exists among developed and developing nations concerning automation and technology. It looked at 17 countries as regards readiness level for the introduction of emerging and new technologies: Australia, Brazil, China, Denmark, France, Ghana, Japan, Nigeria, Norway, Panama, Peru, the Philippines, the Republic of Korea, South Africa, Sweden, the US and Turkey. When it concerns maritime specifically, the developing countries of Nigeria and Peru, for example, have a readiness score out of 10 of 3 and 3.8 respectively, while the developed country of France has a score of 6.4.
“While some countries in our study are trying to become leaders in the field of automation and technology in the maritime sector and their maximum efforts are focused on building the requisite foundation, other countries will not rapidly introduce the emerging new technology because their priorities are developmental, or focused on meeting the basic needs of their population: food, healthcare and education,” say the WMU and ITF.
Forecasts are offered in the report concerning maritime trade. The WMU and the ITF estimate that maritime transport will stay the dominant transport mode for world trade, with deep-sea cargo-carrying ships dominating transport services, and that long distance maritime transport will remain the leading mode in terms of the volume and scale of goods carried. Regarding volume per transport mode, seaborne trade has a relatively high growth rate, but the rate is going down.
World seaborne trade is anticipated to hit 60,000bn ton-miles by 2020, 74,000bn ton-miles by 2030 and around 84,500bn ton-miles by 2040. Annual growth for the short-term is projected at about 2.5%, with the long-term projection being 1.4%, and environmental policies and trade turbulence are named as the main uncertainties. However, the report forecasts that going from 2030 to 2040, maritime transport demand will likely grow at a less-rapid pace, with the growth chiefly in non-energy commodities — though slower growth in oil and related products following 2030 is expected to be offset by a more rapid growth in trade volumes of finished and semi-finished containerisable products.
According to the report, vessel traffic is set to witness a hike in the Indian and the Pacific oceans, and seaborne transport growth will likely be focused in the Asia and Indian Ocean regions, highlighting the importance of Asian trade. Due to the trade route alterations resulting in the growth of Asia’s stake in world trade, the transport services facilitating this trade will also go up in volume in these regions. Additionally, from 2015 to 2040, the Association of Southeast Asian Nations might expect to witness significant maritime transport increases, including 5.6% by inland waterways and 19.8% seaborne.
This timely report from the erstwhile WMU raises interesting questions about how well the shipping world is prepared for the advent of automation.
- Baltic Exchange quiz night
The next Baltic Exchange quiz night takes place on 7 February at Balls Brothers Adams Court.
The event is capped at 80 people and regularly sells out so we recommend attendees book early.
Tickets are priced at £15 per person, 6 people per team.
For more information or to book your tickets, click here.
- Baltic Irish Night: 14 March
The Baltic’s annual Irish Night will be held at The Brewery, Chiswell Street on Thursday 14 March.
The Baltic Irish Society, Irish night, is one of the most popular events of the Baltic’s social calendar. Held each March on the evening of the closest Thursday to St Patricks Day, it is regularly attended by over 500 people.
The format will be as in previous years, including the traditional sing-along.
Tickets are now available, costing £95 each and can be bought by contacting Colm Nolan by either the email or telephone details given below:
Please note that the Baltic have negotiated a new wine list with the Brewery, which includes alternative wines at a reduced rate from last year.
Ticket payment should be made to:
Sort code 50 00 00
Account number 15427080
Account: Baltic Exchange Irish Society
For those paying directly to the bank, please also email Simon O’Sullivan with payment details.
Baltic Irish Society needs you!
Members under 40 with Irish connections and an interest in having a more active role in the Baltic Irish Society are invited to contact Colm Nolan.
- Baltic ICS January lectures
The Baltic Exchange and Institute of Chartered Shipbrokers (ICS) will be presenting the third in the series of lectures on 30 January in Singapore, Shanghai, Athens and London.
Intended to support and develop brokers and operations professionals, the series will examine topical issues facing those working in chartering and operations roles, offering advice on best practice in critical situations and insight into the changing patterns affecting the shipping sector.
The third lecture will focus on economic cycles & shipping. Join shipping thought leaders for an open discussion on freight market cycles; how have trends in cargo flows changed and what has the impact been from the vessel supply side, as a result of the evolution of the shipowner and the ever-changing ROI horizons for their investors.
Guest speakers include:
Singapore | 30 Jan | 13.00
Global Head of Shipping, Anglo American
Shanghai | 30 Jan | 13.00
CEO, Asia Maritime Pacific
Athens | 30 Jan | 18.30
Director, Ursa Shipbrokers
*In celebration of the New Year, the Athens lecture will be held on the ‘Hellas Liberty’. The seminar will be followed by the cutting of the Vasilopita.
London | 30 Jan | 13.00
Dr Martin Stopford
Non-Executive President, Clarkson Research
This event is free to Baltic and ICS member companies. Those interested must register by email to firstname.lastname@example.org (reference: BXICS203)
View the flyer here.
- Chinese New Year Reception
On the occasion of Chinese New Year, the Chinese Shipping Association of London is hosting a gathering next Thursday, 31 January at the Baltic Exchange.
The evening will start in the members bar with a dry bulk market overview by Troy Yu Lewis (Research Analyst, Howe Robinson), followed by food and drinks. CSAL committee members will be in attendance to discuss ideas about planning a larger event for London International Shipping Week (September 2019). Please come by for a long overdue catch up!
Address: 38 St Mary Axe EC3A 8BH
Free Chinese buffet. Drinks available for purchase behind the bar.
Open to all members and friends of CSAL.
Click here to RSVP.