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Maritime Intermezzo


We hope you'll join our BLOG as we explore and collaborate to implement solutions to the common challenges we share in our businesses.

Discussion topics include: Arbitration, Admiralty and Maritime Law, Big Data, Brokering, Chartering, Insurance...

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In a port in the center of Asia a large container ship able to carry over 15,000 thousand teus lies idle at anchor. Having been built to carry cargoes from ports in China, her launching unleashed a cataract of similar sized ships all competing for a finite amount of cargo.

The maritime industry is linear. For the past five hundred years ships have competed to carry cargoes. As the story unfolded the motivations of owners, yards, cargo interest, ports all combined to blind the "leadership" at the helm that a storm was in the offing.

At sea with the approach of a storm the air thickens, clouds gather, swells build and the barometer begins to fall. The gathering of the economic storm made its presence known. Owners with generations of experience commented on the excessive exuberance. A cloud of ego and pride limited the understanding of what was over the horizon.

Most of us do a professional job - a fair day's pay for a fair day's work - the findings in the DNVGL Gard report: "weather, strength of the currents and water depth, played a significant role in the loss." Really these are the basics. In fact a similar report was issued in 2011. In a five year review of anchoring practices locally (Dubai) the number one reason for anchor dragging and loss was too short a scope of chain. The number one reason given by the ship's master for the short scope of chain, wanting to be able to get underway quickly when the harbor master called for port entry. When asked about the anchor windlass' rated speed most of the ship's master where unaware of the time it took to pick up a shackle. The harbor master is not on the hook for explaining the loss of the anchor the Ship's Master is. Commercial considerations often cloud judgement. Ship's Masters need to stick to the Fundamentals.

The outlook for cruise and tankers remains positive in spite of Moody's shift to negative on global shipping. Moody’s Investors Service (Moody’s) has changed its outlook on the global shipping sector to negative as it expects supply growth to outpace demand growth in 2016 by more than 2%, suppressing freight rates, particularly in the dry bulk and container ship segments. Ships are being converted,recycled and re-positioned, contracts renegotiated and rewritten. Fortune does favor the bold and business does favor certainty. A solid relationship built on years of trust through transparency and excellent service will sustain those businesses that have invested in understanding the fundamentals of the industry - and their partners.