- Baltic Exchange Escrow Service sees increase in new transactions volume
The Baltic Exchange Escrow Service continues to gain traction, with new transactions completed in Q4 2019 and Q1 2020. The service, operated from Singapore, facilitates both shipping and non-shipping transactions around the world. So far transactions supported have included asset sales and disputes. The service is available for any transaction requiring an escrow agent.
The Baltic Exchange is an independent organisation whose international membership is mainly made up of shipowners, shipbrokers and charterers. It is the provider of trusted benchmarks and settlement data in the shipping industry. Its escrow service builds on this independence and trust. Users of the service are assured of the highest levels of confidentiality, professionalism and security.
The Baltic Exchange follows a robust due diligence process and complies with the Monetary Authority of Singapore (MAS) requirements without compromising on flexibility and service speed to ensure the transactions are handled seamlessly. This is reinforced by the strict internal control of fund movements from the dedicated escrow account held with AA-rated Singapore banks OCBC and UOB.
Commenting on one of the recent transactions completed, V Bala, Partner, Shipping & International Trade at law firm Rajah & Tann, said:
“We approached the Baltic Exchange to provide escrow services in a complex settlement agreement. Speed was key in achieving the settlement, and the Baltic Exchange lent a listening ear and provided excellent service to the parties and their advisors in assisting them in reaching the desired outcome. We have since recommended Baltic Exchange’s escrow service to many clients.”
Federico Grimaldi, Sale & Purchase Manager at shipping company Vroon B.V., added:
“The Baltic Exchange acted as escrow agent in the context of a recent sale and purchase transaction providing a professional, swift and efficient support at each stage of the process – from the very initial drafting of the contractual agreements to the KYC on-boarding and through to the actual documentary closing. A customer-oriented approach, professionalism and high responsiveness of the Escrow team allowed for a seamless transaction.”
Dmitry Pismenny, who heads up the escrow service, commented:
“We are very pleased to see growing interest in our escrow service. Our flexibility and efficiency in supporting different types of transactions has earned plaudits from our clients. The Baltic Exchange, which is part of the Singapore Exchange group of companies, carries a reputation for independence and trust that adds to the credibility of the service. We look forward to continuing to support our diverse client base and aim to become the go-to service provider for any situation which calls for an escrow agent.”
For Baltic Exchange Escrow Service enquiries, please contact Dmitry Pismenny.
T: +65 9435 6650
- Baltic Exchange Irish Society Dinner: postponed
It is with regret that the ‘Baltic Irish Night’, previously scheduled to take place on Thursday this week, has been postponed due to concern surrounding contagion of the coronavirus. This hugely popular event celebrating St Patrick’s day, is the largest annual shipping dinner in London, with colleagues from all sides of the market regularly attending from around the world. All ticket bookers have been contacted and any enquiries over refunds should be made to Irish Society Treasurer, John Ollett; firstname.lastname@example.org.
- The Chairman’s Cocktail Party
One of the standout events of the Baltic calendar, the Chairman’s Cocktail Party, will take place this year on Wednesday 13 May.
Attended by 600 guests, this historic event was originally held on the floor of the old Baltic Exchange and celebrated the end of a Baltic Chairman’s two-year tenure. Now held at Christ Church Spitalfields in London, it brings Baltic Members and invited guests from across the globe together for a unique annual networking and social event.
Tickets are available here.
We anticipate this to be a sell-out event. Therefore we suggest securing your tickets early to avoid disappointment.
Pictures from last year’s event are available to view here.
- The maritime data landscape: Baltic Exchange and GeoSpock white paper
In 2019 the Baltic Exchange partnered with GeoSpock, a geospatial big data company, to look at building a digital platform for maritime industry emissions management. The partnership aims to work with the Exchange membership and broader industry to provide data access at a scale never before seen in the maritime sector.
To support this initiative, Baltic Exchange and GeoSpock published a white paper “The future of data in the maritime sector: driving change through geospatial data”. The document outlines the vision, and first steps in the initiative to help the entire maritime industry uncover value from the vast store of data sat just beyond their fingertips.
The second part of chapter one, featured below, looks at the maritime data landscape. The full white paper is available to view here.
The maritime data landscape
The maritime industry already collects and records a wealth of data associated with its activities and operations. Noon reports provide regular information on vessel performance, progress and fuel consumption at sea, whilst bills of lading are vital documents detailing cargo histories and receipts which facilitate international trade. Some data, such as vessel specification information and performance benchmarking, is static, rarely changing. However, the majority of data is dynamic, requiring updates to remain valid and relevant. Even relatively fixed information can become out of date if vessels undergo substantial refitting or modification over the course of their lives. Ensuring the validity of data therefore requires the constant transfer of information between parties.
However, the web of maritime data is highly complex, with organisations and stakeholders in the industry often creating and curating only a relatively small part of the complete picture. This can expose parties to risks from beyond the limits of their own data horizons, from delays due to operational issues at ports, to fuel consumption disputes between vessel owners and charterers. Dealing with this in the current environment requires complex chains of communication, increasing transaction costs as well as uncertainty. Improving the visibility of information and value chains will help provide parties with much needed clarity across the industry and enable more confident, effective use of the significant quantities of data already encapsulated beneath the maritime umbrella.
- Photos from the BEGS annual dinner are available now
Pictures from the recent Baltic Exchange Golf Society (BEGS) annual dinner are now available to view here.
- Member Update: 11 March
The following company has applied for Corporate Membership:
Company Individual Chevron Products Company (a division of Chevron USA Inc) Mr S Carthew Mr A Daniels Mr M Donahoe Mr J Liem Mr C Phillips Mr R Reading Mrs C Stubbendieck Ms L Tang Tillship Chartering Ltd
Mr B Brownlie Mr D Brownlie
The following individuals have applied for membership of an existing Member Company:
Individual Company Mr R Markov Cargill International SA
The following individuals have applied for Sole Trader Membership:
Mr Philippe van den Abeele
Mr Duncan Quinan
Any comments should be passed to either Jackie Harrison or Karen Karanicholas by 17 March 2020 – email: email@example.com
- Baltic Academy: FFA training courses this March and April
There are still limited places available on the Baltic’s freight derivatives training courses in London (9-12 March) and New York (27-30 April).
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
- The sting in Covid-19’s tail
With no end in sight to the Covid-19-related disruption to world trade, the UN Conference on Trade and Development (UNCTAD) has published a sobering preliminary economic downside scenario.
It expects a $2 trillion shortfall in global income with a $220 billion hit to developing countries (excluding China). Those hardest hit include oil-exporting countries, as well as other commodity exporters, and those with strong trade linkages to the “initially shocked economies”. These are expected to see a full percentage point wiped off their growth.
Growth decelerations of between 0.7% and 0.9% are anticipated in countries such as Canada, Mexico and the Central American region, countries knitted into East and South Asian supply chains, and countries close to the European Union.
In a technical note on the global trade impact of the epidemic, UNCTAD’s International Trade and Commodities division notes that the China Manufacturing Purchasing Manager’s Index (PMI), a critical production index, fell by about 22 points in February. This implies a reduction in exports of about 2% on an annualised basis. Meanwhile, container vessel departures from Shanghai were “substantially lower in the first half of February with an increase in the second half”.
Today, about 20% of global trade in manufacturing and intermediate products originates in China.
Chinese manufacturing is essential to many global supply chains, especially those related to precision instruments, machinery, automotive and communication equipment. “Any significant disruption in China’s supply in these sectors is deemed to substantially affect producers in the rest of the world,” says UNCTAD.
The most impacted economies are forecast to be the European Union (machinery, automotive, and chemicals), the US (machinery, automotive, and precision instruments), Japan (machinery and automotive), the Republic of Korea (machinery and communication equipment), Taiwan Province of China (communication equipment and office machinery) and Vietnam (communication equipment).
Illustrating the decline, the Freightos Baltic Global Container Index has fallen 237 points since Jan 15 – a drop of 15% – highlighting the weakness of the China-reliant container sector. While the Chinese economy has “taken its first careful steps back to work,” according to Freightos, “getting back to normal will take some time and there’s still a lot of uncertainty”.
New Covid-19 cases in China have dropped to their lowest level since late January and all 14 temporary hospitals have been closed this week in Wuhan – the epicentre of the outbreak.
Ocean carriers had been forced to cancel scheduled sailings, but with ports beginning to unclog as workers return from their extended Lunar New Year break and factories ready to start production again, hopes are rising for a container return. “Though rates have decreased due to low demand, the expectation is that once production is back to near-normal levels, prices will spike to accommodate the backlog,” says Freightos.
Travel within most Chinese provinces has almost returned to normal, with interprovince trucking now operating at about 80% capacity – “a big improvement over previous weeks”, according to Freightos. “We are still looking at likely delays and increased freight rates for the near future, but recovery has definitely begun.”
But just as China takes tentative steps to re-open, Europe is facing its own virus demons with the epidemic far from over on the global stage. Consequently, supply chain disruption will continue and the longer-term damage to the global economy and consequently trade prospects cannot be ignored.
“Back in September we were anxiously scanning the horizon for possible shocks given the financial fragilities left unaddressed since the 2008 crisis and the persistent weakness in demand,” Richard Kozul-Wright, UNCTAD’s director of globalisation and development strategies, said. “No one saw this coming – but the bigger story is a decade of debt, delusion and policy drift.”
While some parallels can be drawn with the Asian financial crisis of the late 1990s that crisis occurred before China’s economic dominance in the region and when advanced economies were in reasonably good economic shape. This, says UNCTAD, is not the case today.
Further, China is now an important source of long-term finance for developing countries – and to the shipping sector – and a curtailment of funds will be a nasty sting in the tail of Covid-19.
Mr Kozul-Wright warns that on an economic front the Central Banks cannot solve this crisis alone and appropriate, internationally co-ordinated macroeconomic policy responses will be needed.
“Ultimately,” he said, “a series of dedicated policy responses and institutional reforms are needed to prevent a localised health scare in a food market in Central China from turning into a global economic meltdown.”
Getting back into China
Freightos has listed some steps to take to help get China trade back on track:
- Anticipate delays in getting goods out of China. Unfortunately, much of this is out of suppliers’ control.
- Check directly with suppliers to confirm the order ready dates.
- If goods need to be trucked between provinces, first confirm with the factory that goods are ready, and then consult with the freight forwarder to make a plan for maximum efficiency.
- If possible, book any upcoming shipments with an available ready date to get goods moving as quickly as possible.
- Consider shipping LCL instead of FCL in the short term to minimise chances of getting rolled.
- If the order is not urgent, consider delaying the shipment until some of the backlog has cleared and freight rates likely return to normal.
- If production is at an early stage, consider sourcing outside of China.