Diversity of shipping

1. Diversity of Shipping
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Capt. Robert Buckham
CSO, Gulf Energy Maritime
MIEVOM 22nd April 2018

2. Overview of GEM
• Began trading operations in 2004.
• 4 shareholders - 3 major shareholders from GCC
• Currently have 19 vessels in fleet - Chemical and Product
Tankers ranging from 37,000 to 115,000 dwt.
• Worldwide trading – Loading Arabian Gulf proceeding
Europe, Far East, Africa, Australia and the Americas
• Employ approximately 750 officers and ratings, own
manning agency in India and 50 office staff in Dubai
• Officers are predominately Indian with Filipino crew, also
use Romanian, Croatian and Russian officers and 4
vessels have Indian crew
• Vessels on TC with several oil majors as well as spot fixing
vessels on the open market using in house chartering
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3. Diversity of Shipping
• All companies conduct their business differently. End goal is the
same – differing strategies - but!!!
• Purpose of every business – “Earn Money”
• Ships earn “Freight” by carrying and discharging a cargo
• Industry demands shipping business is conducted safely, for the
respective charters, the crew and safeguarding the environment
Discuss:
1. Commercial Market
2. What cargo – oil, chemical, gas?
3. How do we get the cargo?
4. How do we prepare a ship for the cargo – Its Importance, Issues
5. Legislative, Industry and Company safety
6. Security – Not just piracy
7. Industry Issues
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4. The “Commercial Market”
Tanker “rates” the amount shipowner is paid per day, is driven by the balance
between demand and supply.
Tanker demand market has two main drivers:
1. Oil demand from the Consumer
2. Oil supply from OPEC, Oil Trading Companies or Storage
Tanker supply market is driven by three main factors and influenced by one-
off factors – ships used as storage or sudden price changes
1. Ships currently in service – Total 4913
2. New build order book – On Order 513 by 2021
3. Scrapping and removals - New Regulation, Old Age, Market changes
• Ships in service Today
VLCC=723;Suez=508;Afra=979;Panamax=434;MR=1417;
Handy=852 = Total 4913.
• Cost USD of VLCC 80-87m; Suez 50-52m; Afra 41-46m; MR 34-36m
• 130 VLCC cargoes from AG per month – therefore “fierce” competition
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5. Cargo - Type of Ship
• Oil Tanker (Dirty – crude oil) Generally large ships such as Suezmax - 160k
Aframax - 110k, VLCC - >180 to 320k and ULCC - >320 Dwt
• Product Tanker (CPP or DPP) Generally 55,000 to 120k Dwt
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6. Cargo - Type of Ship
• Chemical ( Type 1, 2 or 3 dependent upon environment and safety hazard
of cargo) Most are type 2 and 3 as type 1 very specialized. Ships generally
5 – 35K. Tanks of stainless steel or protective coating such as epoxy or zinc
• Specific liner trade use 35 - 47K
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7. Other - Type of Ship
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9. How do we get a Cargo
• Oil majors and energy trading companies have access to
refineries
• Brokers working on behalf of a client will offer a cargo for
transportation
• Brokers approach owners and if cargo is of interest voyage
estimate is conducted - factors considered, vessels
readiness, location of vessel, tank cleaning preparation,
cargo quantity, bunker consumption and Charterers
• Broker will relay indication to the Charterer and if
interested the Charterer will request a firm offer.
• Firm offer will include the main terms of a CP with a reply
time – Counters - ‘on subjects’ once main terms are agreed
• Approvals – load port, discharge port, vessel certificates
• Voyage orders received
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10. Vessel and Tank Preparation – Importance
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11. Considerations
• Owner is responsible for preparing the tanks – independent
inspection by surveyors
• Owners is responsible for the safe carriage of the cargo and delivery
of the cargo - Bill of Lading
• Require competent, experienced persons for operations especially
on chemical or gas ships – Cargo endorsements
• Time frame for cleaning can be several days to many weeks
depending upon the last cargo carried and the next cargo loading
• Commercial pressure upon the Masters and crew to complete the
job
• Work load upon the crew – 18 to 24 persons onboard
• Work and rest hours, fatigue
• Health issues – last cargo, dangers of explosion, inert gas, enclosed
space entry and PTW - Safety
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12. Legislative Safety
• Safety First - taken very seriously – Number 1 element
1. SOLAS – Introduced in 2014 after Titanic
2. Marpol – Introduced in 1973 and Mandatory 2nd
October 1983
3. ISM Code – Mandatory 1st July 1998
4. MLC - Seafarers bill of rights Mandatory 20th August
2013
• These are regarded as “4 Pillars of Safety and Security”
for the Quality Shipping Industry
• Seafarers are 27.8 times more likely to suffer
work related fatal injuries than shore workers
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13. Industry Requirements for Safety
• International Safety Management Code (ISM) DOC -
Safety Management System – Policy and procedures
for safe operation, safe working environment - assess
all identified risks to its ships and personnel - scope for
continual Improvement - Achieved by:
1. Internal Audits – 1st Party by Company on its vessels
2. External Audits - 3rd Party – Class Certification
3. Commercial Assessments – 2nd and 3rd Parties – TC
TMSA
4. Flag State Inspections – Compliance Convention and
Legislation
• SIRE Inspections – Oil Major Inspections
• Port State Control – Compliance and Standard of
Shipping within its territorial waters
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14. Company Requirements for Safety
• Develop a “Safety Culture” – Onshore and Onboard – Promote
company values - Shared perception – every body doing it
right
• Leadership – Office Involvement from the top
• Motivation – Happy seafarers?
• Well Trained – Shipboard and onshore
• Training days onboard – Familiar with equipment
• Training drills – Mandatory and Regulatory
• Safety Trainers visit – 10 day each year
• Officer and Crew seminars – Jollyboys outing and Family days
• Every job is Risk Assessed – hazards mitigated, toolbox
meeting, BBS and stop work cards
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15. Company Requirements for Security
“Documented Procedures” to Identify Threats of
• Petty Theft
• Vandalism
• Stowaways
• Cargo theft
• Inadequate port security
• Trafficking of people, arms
or drugs
• Smuggling
• Piracy
• Sabotage and arson
• Terrorism
• Cyber security
• Travel policy
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16. Issues
Safety and Security
• Shipping High Risk Business – Reputations!
• Shortage of competent seafarers – The Human Element
• Long periods away from home, social isolation, long work
hours, fatigue and quality rest
• Commercial and regulatory pressures – more frequent
inspections and admin tasks – more scrutiny from everyone
• Stress – Compounded when transiting HRA areas – Why?
• Social Media – Facebook, whatsapp, twitter; Social Media
Policy to ensure ‘Rest”. Social media groups
• Mental Health – ITF study 600 seafarers, 14% often
depressed, 50% sometimes depressed, 52% know onboard
persons depressed and 23% know persons considered suicide
- Australia issued Maritime Safety Awareness Bulletin in
March 2018 and studies are being further conducted in UK
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17. Shipping of Diversity
Thank you
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