Maersk Chairman Says Strategic Options Include Company Split – Bloomberg (see this blog 6 May 2016)

A.P. Moeller-Maersk A/S replaced its chief executive officer as the owner of the world’s biggest shipping company explores a number of “strategic options” that may include splitting up its operations.

Source: Maersk Chairman Says Strategic Options Include Company Split – Bloomberg


What Will be the Impact when the Newly Extended Panama Canal Locks Open?

What will be the impact on shipping when the newly extended Panama Canal open today (26th June 2016)? Figure one below shows the physical changes to the dimensions of the old and new locks on the Panama Canal (time lapse video of the construction).

Fig 1 New Panama Canal Dimensions
Under the old dimensions, the widest containership that could pass through the Canal was one with a beam of 33m – Panamax (3,000 to 5,999 TEU). The ships are pulled through the old locks by “donkeys”, which are small gauge locomotives, and often a sea cadet on his first passage would be given a bucket of water and told to water the donkeys. Interestingly, there has not been any clear indication from the Panama Canal Authourity if the old locks will continue to be operated in parallel with the new locks. These old Panamax containerships make up around 16% of the current capacity of the containership fleet.

Fig 2 New and Old Panamax Containerships
As trade increased, and due to changes in trade routes, containerships wider than 33m were built. In theory, these older Post-Panamax containership (3,000 to 9,999 TEU – see figure 2) will be able to use the new locks, too. These currently make up 22% of the fleet.

The New Panamax (10,000 to 13,399 TEU) containership, also known as Neo-Panamax, currently makes up 18% of fleet by capacity, according to mapping, ship search and valuation provider, VaesselsValue, but it is expected that this sector will replace the old Post-Panamax.

It is expected that the old Panamax containerships will cascade downwards into the other sectors, and may even “interfere” with the Feedership trades (1,100 TEU), should the rates decline to comparable levels. This will most likely decrease the values of old Panamax vessels, and may lead to a new round of sales for scrapping.

Fig 3 Seatime Savings

The increase in capacity able to pass through the new locks and the sea-time savings (see figure three) for the larger ships will be significant, but the impact is hard to assess until the liners start using the new locks.

The top five New Pananax containership owners are shown below (figure 4).

Fig 4 New Panamax Owners

According to some studies, the opening of the new locks could double the volume of total trade (tankers, dry bulk carriers, containerships and gas) passing through the Panama Canal. So far, the emphasis has been on the liner trades and their use of the new locks on the Panama Canal, but the LPG and LNG gas carriers are expected to be significant users, too.

BuzzFeed: How It Works

On Thursday evening (23 June 2016) I had the pleasure of hearing from BuzzFeed’s Ryan Broderick, Deputy Global News Director and Ailbhe Malone, UK Lifestyle Editor. Ryan and Ailbhe provided an insight into how BuzzFeed works, how they select content and how to best build mutually beneficial relationships with journalists. The event was organise by PR Newswire.



Ryan Broderick, Deputy Global News Director of BuzzFeed speaking in the luscious surroundings of Two Temple Place, London

According to Ryan, the mission of BuzzFeed is to provide a slice of life, to take a human interest story in London and tell it in Spain or India (BuzzFeed has a huge team of translators). BuzzFeed aims at a very select slice of the population, which according to Ryan is essentially young women, and non-whites. The standing rule is DO NOT WRITE ABOUT OLD WHITE MALES – as they have more than enough news time. The most fruitful sources of BuzzFeed stories are obscure nerdy groups like women’s forums discussing Lush Bath Bombs. The BuzzFeed demographics are 60/40 in favour of women, but 80% of the sharing BuzzFeed stories on social media are re-posted by women. Therefore, the question BuzzFeed editors ask about a story is “what is the shareable moment”. The measure of the success of a story are: how long does a story last, and how many comments does it produce?

I confess: I haven’t spent a lot of time on BuzzFeed, and I had assumed that most of the stories were fabrications along the line of Top Ten Things You Need to Know About Cats. Talking to Ryan and Ailbhe, I realised that this is far from the truth. Ailbhe researched, wrote and produced the story on Lush Bath Bombs. She visited the factory, took part in the production line and interviewed the workers, dermatologists and other stakeholders in the story. The Lush Bath Bombs story took two months to produce, but by analysing all the facets, and bringing in experts, the story has been accessed for months and has had more than 500,000 views. To my mind, a story like this on BuzzFeed is closer to a Sunday Times magazine story.

Another surprise was how little content was generated from PR leads. Again, my assumption was that all the stories had a PR basis, and were only written to promote a product. However, according to BuzzFeed’s Deputy Global News Director, in the UK less than 10% of the stories were from PR promotions, and in the US it is only 5%. Overall, the event was a real eye-opener for me, and now I have more respect for BuzzFeed, even though I am not the target audience.

The Great Masquerade of Shipping at Posidonia 2016 – The Barrel Blog (re-published from Platts)

The Great Masquerade of Shipping at Posidonia 2016

Shipping is a curious industry. It is a marketplace where massive deals concerning the movement of millions of barrels of oil on behemoth ships can be made over a third pint of Peroni at the local pub. Entertaining clients can be just as important as providing them with a great service.

It is a small world, where faces are remembered, grudges are engraved in stone and favors are easily called upon. It is personal and as such it requires you to wear your best “game face” at all times. And every two years, you can give your trusty business mask the ultimate test at the biggest and fanciest shipping masquerade – Posidonia week in sunny Athens.

“Posidonia” has become a special word for shipping people over the years and for good reason. It is a massive event, with two sides to it.

The first is a biennial international shipping exhibition, which started back in 1969 under the patronage of Greek shipowners and has grown dramatically since. This year it attracted 22,000 people with 1,800 exhibitors from 90 countries.

The other side is the fancy late night parties, mostly concentrated in the seaside town of Vouliagmeni, just south of Athens, which is perfect for this as it boasts amazing, sleek venues and locales.

Suited, booted, armed with business cards and aspirin, thousands of shipping professionals from around the globe attend these parties. They throw back a few drinks, shake some hands, slap some backs and, quoting Jay Z, re-introduce themselves. And that is where the game face masks really come into play.

When you navigate through a busy 5-star hotel seaside terrace splashed in the evening sun, you can see the masquerade in all its glory.

Here are some shipbrokers, usually wearing the faces of wolves and foxes. They emit an image of vigor, cunning and confidence, all the things that clients would expect from their brokers. You can usually find them in groups around their principals, like chartering managers from oil majors, commodity trading houses or shipowner companies.

Principals themselves are often comfortable under the masks of bears and lions. Powerful, somewhat calm and, well, important.

However, if you get to know these people, ask them the right questions, you may sometimes see the strain, gritted teeth, nervous eyes and sad smiles beneath the masks.

Some of that is usual stuff. Like a young broker, who has to switch his markets along with changes in the company, losing some accounts that he worked so hard for, unsure if he has enough energy to do it all over again.

Or an owner’s freight trader, who recently missed a big spike in his market, costing his company a few million dollars and under his bear mask hiding the fear that he cannot afford any more mistakes.

Another shipbroker, who after getting a big principal’s job suddenly found that people who wouldn’t shake his hand before are now throwing rose petals at his feet, standing in line to be his new best friend.

Even a charterer, who understands that shipbrokers that treat him like a king, send him cases of wine, get him the best football game seats, still make much more money than he does and would never call him again if he left the industry.

Still, some things were unique at Posidonia 2016. There is a lot of pain and uncertainty in the shipping market. The dry bulk sector in particular is going through probably its worst depression in three decades. The oversupply of tonnage and limping commodity demand are steadily squeezing the life out of it. So, it is often hard for shipowners involved in this business to stay positive or come up with good reasons for optimism as there are so few to be found.

That’s why, leaning on a bar, in a sea of wolves and foxes, some of them can’t help but wonder if they will have this job in two years’ time when the next Posidonia event comes along.

Yes, there is a view that the situation may get better by then as the investment in tonnage goes down, giving hope to slowing vessel supply, but such opinions have often been wrong before.

Things are not so rosy in tankers either. The crude oil glut that made this market a superstar in 2014 and 2015 is shrinking. At the same time, there is a flotilla of newbuilding vessels due to hit the water in the next two years, boosting supply and thus pressuring freight rates down again.

And all this reflects on Posidonia guests too.

As veterans of the event told me, there were far fewer parties this year where the bar would be open past midnight. Many of the guests, including some top brokers, shipowners and charterers had to share rooms in order to afford staying at the top Vouliagmeni hotels where all the action was.

However, the beauty of shipping is that despite downturns, troubles and bad omens, the show still goes on. Simply because there are so many truly dedicated people who love, live and breathe this business.

That’s why I could see so many of them at the Posidonia parties, taking a step away from a bar to send that charterparty from their smartphone, share a rumor on a fixture they just heard from a client or just check their stem programs or position lists. For them, a game face mask is second skin, even if the makeup may be flaking sometimes.

And so there I was too, on a Thursday night, at the final big party of this over-the-top Posidonia week. With some effort I squeezed through a thick crowd of men in suits and ladies in fancy cocktail dresses.

The gorgeous Balux Café in Vouliagmeni is so packed that it required precise powers of agility not to spill my gin and tonic over someone’s tie or to inadvertently shove a fellow guest into a massive seaside pool.

I finally make it to the other side in an attempt to cool off in the warm Mediterranean breeze. I am out of business cards, my meeting schedule is complete and my plane leaves for London tomorrow.

And as I finally relaxed and took a final sip, I could feel the mask slipping from my own face.


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Alex Younevitch, Managing editor
Alex Younevitch is the managing editor for EMEA freight markets at S&P Global Platts. He Joined Platts in 2013 after previously enjoying a successful shipbroking career. Alex manages Platts’ tankers and dry bulk teams in London, overseeing over 100 of daily freight assessments and three daily publications. He started in his current role in May 2014, having previously been an associate editor for EMEA shipping. Alex has a 1st class BA Honours degree in International Supply Chain and Shipping Management from the University of Plymouth.

Craig’s Post-Posidonia Ponderings


  • Owners are grateful to be still be in the game, but sources of finance limited.
  • Ironically, they blame cheap finance for the over-ordering.
  • Hidden stresses – the lowering of opex is breeding poor maintenance.
  • Transparency in the shipping markets is being driven by players from outside shipping (see earlier blog posts on the Orange Sofa and VesselBot seminars).
  • 125 international and Greek press and media attended Posidonia 2016 (we have obtained the list).

Seminars Attended:

  • Lloyd’s List Intelligence Briefing
  • Capital Link Shipping Forum
  • Orange Sofa
  • VesselBot

Posidonia Sentiment

The sentiment of the 2016 edition of Posidonia was one of muted celebrations by the survivors of what is turning out to be the longest shipping recession in living memory. Indeed, “survivor” may be too heroic a term given that most observers blame the owners for over-ordering new ships, and thus prolonging the recession. However, there is also a lot of anger toward the EU (i.e. Germans) and its proposal to tax Greek ship owners’ offshore earnings.

Blame Game

Ship owners blame the banks and private equity (PE) for tempting them with cheap money to order ships they didn’t really need. One owner wryly observed that PE and other new finance providers thought they could learn shipping after a few meetings. PE was treated as sheep waiting to be shorn of its money, and now PE’s expected 40% return on investment is just a dream, it is trying to exit an illiquid market. The remaining banks in shipping claim to have no money for second-string owners, but competition is intense to lend to the top tier owners. However, according to Norwegian bank DNB, deal-flow in 2016 (ytd) is down 50% on 2015. Bankers feel consolidation among the liner services and containership owners is inevitable. Despite the fragmentation of the dry bulk industry, there will be consolidation among the top tier owners, too, according to bankers.

Owner Feedback

On the owning side, there is said to be a split in the dry bulk market, consisting of those ships that are fixed (working), and those that are not. One dry bulk owner described how three years ago the required opex level for his Handies was USD 8,000/day. Today, by reducing crew from 22 to 19 people and / or putting more cadets on board (and other savings), opex has been shaved to USD 4,000/day. But there are risks, and he related how his representatives inspected a Chinese-built, 2008-built Supramax, with a view to purchase. Maintenance on the vessel had been minimal, there was rust everywhere, and she was only fit for scrap, in the representatives’ opinion.


Posidonia Quotes:

“We Greeks are happy with low returns…you need to know how to play the game… it’s about cash flow.”

“We treat ships like family members”

“What would I buy now? A seven-year old ship, every time.”

Germans know as much about shipping, as Greeks know about car manufacture!“

“Shipping is a stable industry…in that it is always unstable!”

“…the US exporting democracy ruined economies in the Middle East.”

“…shipping is not a team sport..”

“We have to look at the banking cycles. In five years’ time, there will be new faces [in the banks], and new miracles.”

“Greece is the leader in shipping in Europe. But instead of examining why and copying, the EU is trying to destroy (Greece).”

Posidonia Exhibition

According to the organisers, the Posidonia exhibition itself was visited by over 22,000 shipping industry professionals (a 15% increase on 2014). There were more than 1,800 exhibitors from 90 countries deployed across 40,000 sq. metres at the Athens Metropolitan Expo. The next Posidonia event is scheduled to be held between 4-8 June 2018.


Parties I Attended:

Friday 3 June – Lloyd’s Register Party at the Astir Palace. I flew in that evening, but the lock failed on the apartment door. By the time this was sorted out, I arrived at the party at 2.0 am – just as it ended.

Monday 6 June – Lorentzen and Stemoco Party at Club Banane on a beach near Glyfada. I was invited via Tod and Lulu (see below), two S&P brokers from Stemoco, I met at the Lloyd’s List Intelligence Briefing the day before. This was held at a beach club in the afternoon. Club Banane was not closed to civilians, who were wandering around in bikinis.

CJ and Chinese broker Zulu Zheng S&P Stemco

Lulu Zheng and Craig at the Stemoco party

Tuesday 7 June – Drinks at the TW stand. Following a sudden thunderstorm, Posidonia was deserted, and there were no guest left on the TW stand. Zero networking.

Tuesday 7 June – Korean Shipyards party at the Astir Palace. This was a formal reception, with suit and tie required. This was an open invite party and a good networking opportunity.

Wednesday 8 June – Vancouver International Maritime Centre (VIMC) party at the Vorres Museum of modern art in a village near the airport. I was invited after chatting to VIMC peeps at Posidonia Expo. This was a very difficult to get to location as the village roads were not wide enough to take E-class Merc taxis, but the hosts and location were charming. The museum holds some of the most valuable modern art in Greece, and the galleries were open during the party. Networking limited to Canadian shipping people and Greek lawyers. After the party, I shared a taxi with the Canadians to the Tradewinds party.

Christian Waldegrave (hd of research Teekay) ignores CJ selfie stick at Stemco Party

Christian Waldegrave, Head of Research at Teekay at the Stemoco Party with Craig operating the selfie stick.

Wednesday 8 June – Tradewinds party at the Island (where there appeared to be two other events on at the same time). There was a strict entry policy. The DJ was very good and the local group, The Melisses, played everything from Greek pop to Robbie Williams! The loud music made networking a little bit intimate, but by the third day of Posidonia, many of the faces were now familiar.

Thursday 9 June – Marshall Islands Party at Ble. This is a beach peninsular that is taken over by a catering company, Ble, and officially holds 2,500 people. This event was the unofficial end of Posidonia party and was packed, and included the glamour girls from the Posidonia stands. Marinakis was given an award. With several quiet areas with seats away from the music, this was a good last minute networking event.

James Leake (hd of research Arrow) and Paddy at Marshall Is Party

James Leake, Head of Research at Arrow, and Paddy Stern of VesselsValue.

Marinakis award acceptance speech at Marshall Is Party

Marinakis receives an award.

Every night – The main after-party venue appeared to be Taverna 37, which is a terrace bar in the Arion Resort Hotel (part of the same complex as the Astir Palace). This was also the main broker hang-out and frequently occupied by the likes of Richard Fulford-Smith of Affinity and Andy Case of Clarksons. Indeed, at one session, I reckoned 40% of the people on the terrace were from one or the other shop.

Greek Necessities

Posidonia: It’s not all sunbathing and drinking!

The Orange Sofa Discussion – Posidonia 2016


Below are my take-aways and notes from the Orange Sofa discussion held at Posidonia on Tuesday 8 June, and led by Kate Adamson, Futurist, and founder of Futurenautics.


The event was in two sections: a key-note speech from Kate Adamson, followed by discussions with guests on the Orange (the sponsor) sofa.

Christopher Rex, Danish Ship Financ
Grigoris Zarifopoulos, Google
Michel Verbist, Orange
Martin Buhl, ShipServ
Andrew Faiola, Intelsat
Athanasios Tzioumas, Hellenic Radio Services
Yannis Papaefthymiou, Furuno Hellas

Key Note Speech

There are “mega-trends” at play which are having profound affects on shipping. High speed data comms via satellite will allow a real-time exponential exploitation of information from ships. This will allow companies to move sideways across industries, in the manner of disruptive companies such as, Google, Amazon, and achieve growth that is no longer linear, but exponential, as in Moore’s Law.

The raise of disruptive companies in shipping is already evident, and she quoted ShipServe and VesselsValues, adding that there was a VesselsValue representative in the audience (me). But for the large part, shipping remains dysfunctional, and is failing to recognise the changes brought about by the mega-trends. Regulation is one example Ms Adamson gave where shipping is failing. The IMO is the nominal regulator, but the US Coast Guard (USGC) proposes to introduce mandatory cyber security for ships entering US waters. Failure to comply would mean no entry. In Ms Adamson’s view, if this is made law, the EU would swiftly follow with its own version. But IMO is far behind in drafting any regulation on the matter.

The introduction of high speed data satellites will allow the exploitation of the huge amount of data available from ships. Most ships built since 2012, have hundreds of sensors onboard, from monitoring fuel pressure and temperature to the crew smartphones accessing the onboard Internet. There is huge potential exploit this data in the same way that vessel tracking is a derivative of the broadcast of AIS data. High speed data satellites enable engine manufacturers to send software patches direct to the ship, instead of posting CDs. Rolls-Royce and WARTSILA are producing packages where the sensor data is analysed internally by algorithms and aggregated information sent back to shoreside dashboards, to enable the shore-side monitoring of the engine. Apparently, this methodology is well established in the oil and gas industry, where a single geologist can remotely monitors up to six fields from the office.

To take this one step further, imagine shipping having real time transparency. Insurance rates could be varied by the hour, depending on the position of the ship and other ships (or value depending on the version of the maintenance patches – editor). One step further and we have fully-automatic unmanned ships (the US Navy launched one this year). The changes are exponential, and will come sideways from disrupters from outside shipping. The shipping industry is asking who will be the Uber of shipping – it will probably be Uber.

Orange Sofa
First onto the Orange sofa was Christopher Rex, the head of shipping research at the Danish Ship Finance Bank, and a monitor of the phenomena known as industry 4.0. He described this as local production using 3D printing and robotics. The impact on the main beneficiary of globalisation in the last two decades, China, would be enormous. What would have been global GDP growth in the last boom cycle without the massive movement of manufacturing to China? How will shipping cope without cheap Chinese exports to ship? According to one study, local 3D printing and robotics would reduce shipping of containers globally by 37%, and air freight by 45%.

Mr Rex was then joined on the Orange Sofa by Grigoris Zarifopoulos from Google, who explained that Google sees the internet as electricity – it is necessary and everywhere. What Google wants to be is like the toothbrush, something everyone uses everyday. He noted that shipping seems incredibly disfunctional, but there is little Google can add directly. Google solves B2C problems. Describe the problem and the ideal solution, and Google will throw resources to create the product. But it was harder to see this in shipping except at the level of consumer traceability. Tagging goods throughout the chain would satisfy consumer desire for traceability, and fulfil Googles motto of dont’ do evil.

Martin Buhl of ShipServe described the role of “disruption companies” as solving the customers pain point. They have recently introduced ShipServe Match, which uses analytics on the 17 years of data to produce information on the best suppliers of items. High speed satellite coms will be a driver of this data.

Audience Discussion:

One key point that came out of the general discussions is that shipping may have already reached an inflection point of linear growth to exponential growth of data driven services. Several audience members (who unfortunately did not introduce themselves) from comms and charter software companies spoke about the immense dissatisfaction shippers have with shipping companies and brokers. They are finding clients among the large consumers of shipping services (the Wal-Marts, Cargills, and BPs) to go around the traditional shipping intermediaries.

Posidonia: Lloyd’s List Briefing – Current State of Shipping

Sunday 5 June 2016.

The Lloyd’s List Briefing is now a traditional sharpener for Posidonia week. The event was presented by Richard Meade, the Editor of Lloyd’s List, assisted by head of the Greek desk, Nigel Lowry.

Christopher Palsen, the head of Lloyd’s List Intelligence research kicked off the event by setting the scene and offering his explanation of where shipping was, and why.

He posited that the dry bulk fleet now consisted of 11,149 ships, with a capacity of 784m dwt. With a substantial portion of the bulker fleet idle (average age 18.5 years), why had there been any ordering at all in this sector since 2008? The answer, in his opinion, was Chinese interests. Specifically, the five-year plan for 50% of imports into China to be carried by Chinese-owned ships. The result was a massive shipbuilding programme. This has flooded the market, but it has kept Chinese shipyards busy, and the cost of transport low. He also made the point that Chinese coastal (non-deep sea) shipping carries an estimated 2.5bn tonnes (of which 1bn tonnes is coal) on coastal ships. He admitted LLI had very little information on this fleet, except that it was very old, and was being replaced by modern deep-sea ships.

According to LLI, the global tanker fleet consist of 2,003 ships (this is too small for the whole fleet and is probably only the largest sectors – CJ) with a capacity of 367m dwt, of which 29m dwt was being used for storage. The orderbook stands at 64m dwt. He asked if there would be enough demand for all this tonnage?

According to LLI, there are 5,292 container ships, with a capacity of 19.8m TEU, with another 3.9m TEU on order. The key with this fleet is efficiency. He felt that there was significant growth potential in converting Chinese general cargo and break bulk cargoes into containised shipping.

On the economic demand side, Mr Palsen felt that the slower growth in China ( about half the past averages), was still robust. In his opinion, the drivers in the future will be India and other Asian countries.

On the energy side, according to Mr Palsen, around 85% of energy demand is supplied from hydrocarbons, and even if renewables grow fast as 15% pa, after a decade of growth, this would mean hydrocarbons still accounted for 75% of energy supply. He noted that shale gas production has resulted in the decoupling of the gas price and oil prices in US. It would appear that Saudi Arabia (by flooding the crude oil market) was winning the battle to kill off some smaller US opertors. But if the oil price rose again, would these fields come back onto the market?

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