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NAUTILUS P01 NOVEMBER 2009.qxd - Nautilus International

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November 2009 | nautilusint.org | telegraph | 09<br />

NEWS<br />

On the road to recovery?<br />

Shipping industry survey shows growing signs of confidence that rates will rise in key sectors over the next year<br />

PSigns that the shipping industry<br />

is on the road to recovery<br />

have been unveiled in a new survey<br />

of confidence levels among owners,<br />

managers, charterers and brokers.<br />

The survey — carried out by the<br />

accountancy firm Moore Stephens —<br />

found that overall confidence levels have<br />

risen for the third successive quarter,<br />

with all four sectors expressing increased<br />

optimism for the shipping markets in<br />

which they operate.<br />

The average confidence level<br />

expressed by respondents — on a scale of<br />

1 to 10 — was 5.7, compared with 5.5 in the<br />

previous survey in May 2009.<br />

Moore Stephens noted that a number<br />

CThe UK has emerged as<br />

one of just four flags<br />

winning top marks in a<br />

performance ‘league table’ put<br />

together by international<br />

shipowners.<br />

Together with Denmark, Germany<br />

and Hong Kong, the red<br />

ensign notched up the highest<br />

scores under a formula that<br />

examines 19 factors such as port<br />

state control results, fleet age and<br />

compliance with international<br />

conventions.<br />

The annual rankings — produced<br />

by the ‘Round Table’ of<br />

shipping associations, including<br />

Intertanko, Intercargo, the <strong>International</strong><br />

Chamber of Shipping,<br />

the <strong>International</strong> Shipping Federation<br />

and Bimco — also reveal<br />

continuing problems with a hard<br />

core of substandard registers,<br />

with 15 flag states recording 12 or<br />

more negative performance indicators.<br />

of participants in the survey had referred<br />

to the start of a recovery being under way<br />

— with the opportunity to buy vessels at<br />

historically low prices.<br />

‘The shipping market has started to<br />

pick up this year after the effect of the<br />

global economic crises,’ one respondent<br />

said. And another commented: ‘The<br />

recovery of the global economy will<br />

result in strong demand for tonnage as<br />

delayed projects get up and running<br />

again.’<br />

However, there were also marked concerns<br />

that freight rates will continue to be<br />

depressed by an oversupply of tonnage.<br />

‘Because two newbuildings are being<br />

delivered for every vessel scrapped, the<br />

Top marks for<br />

UK in ‘league<br />

table’ of flags<br />

Flags at the bottom end of the<br />

scale include Albania, Bolivia,<br />

Cambodia, Costa Rica, Georgia,<br />

Honduras, Lebanon, St Kitts &<br />

Nevis, and Sierra Leone. The<br />

Round Table said ‘shipowners<br />

should think very carefully’ about<br />

before using such registers.<br />

Maritime & Coastguard<br />

Agency chief executive Peter<br />

Cardy said he was ‘delighted’ at<br />

the UK ship register’s status at the<br />

top of the table.<br />

‘This is another step in the<br />

right direction in demonstrating<br />

that we are a quality register, with<br />

high standards and a commitment<br />

to providing a high level of<br />

service to our customers,’ he<br />

added.<br />

‘We hope that this excellent<br />

news encourages shipowners to<br />

look at the UK flag as a viable<br />

alternative, particularly in these<br />

difficult times of financial uncertainty.’<br />

RFA trains at Fleetwood<br />

shipping market will not be able to pick<br />

up over the next three to four years,’ one<br />

respondent warned.<br />

Concerns were also voiced about<br />

China’s growing dominance of the market.<br />

One respondent told Moore<br />

Stephens: ‘China is now the producer, the<br />

consumer, the trader, and the transporter.<br />

It has got the cheapest and the<br />

most plentiful supply of labour, and it is<br />

possibly the richest country in the world.<br />

None of these things can be good for the<br />

international shipping industry.’<br />

Another remarked: ‘China’s influence<br />

in the shipping markets is a risk which<br />

has not yet been fully factored in. China<br />

will control a lot of cheap new tonnage,<br />

with the result that a number of independent<br />

shipowners will not have the<br />

opportunity to compete.’<br />

For the third survey in succession,<br />

respondents identified demand trends as<br />

the single most important factor likely<br />

to affect their business performance over<br />

the coming year, followed by competition<br />

and the cost and availability of<br />

finance.<br />

In the containership sector, 35% of<br />

respondents overall expected rates to rise<br />

over the coming year, whilst 41% of<br />

respondents expected bulker rates to<br />

climb over the next 12 months, and 45%<br />

expected tanker rates to increase in the<br />

same period.<br />

Moore Stephens shipping partner<br />

Richard Greiner commented: ‘Although<br />

the overall confidence level of 5.7 revealed<br />

in the survey is low compared to the 6.8<br />

posted at the time of the first survey in<br />

May 2008, it still represents an increase<br />

for the third successive quarter.<br />

‘Confidence will return to shipping<br />

more slowly than it disappeared,’ he<br />

added.<br />

‘The situation is not helped by the<br />

continuing depression in the freight markets,<br />

but it should be remembered that<br />

today’s rates are often compared to the<br />

record highs which the market was enjoying<br />

less than two years ago, and this tends<br />

to distort the picture.’<br />

First ETO FD course launched<br />

Pictured right are the first<br />

Ftrainee electro-technical<br />

officers studying on a new<br />

foundation degree being run by<br />

South Tyneside Marine College and<br />

Northumbria University.<br />

<strong>Nautilus</strong> has welcomed the<br />

launch of the course, which is the<br />

only one of its kind in the UK<br />

offering the pilot Foundation Degree<br />

for ETOs qualification. Senior<br />

national secretary Allan Graveson<br />

said the Union had worked<br />

extensively at the Merchant Navy<br />

Training Board to develop the course<br />

and hopes more companies will<br />

support it.<br />

The course covers a range of<br />

electronic and electrical topics,<br />

including marine management,<br />

health and safety and work-based<br />

learning. Companies including BP,<br />

Chiltern Maritime, Bibby Line,<br />

Adnatco, Acergy, and Global Marine<br />

Systems are among the first to<br />

sponsor students on the course.<br />

Felix Brooks, from Gloucestershire,<br />

is being sponsored by Chiltern<br />

Maritime, and has high hopes for<br />

the future. ‘I have just finished a<br />

BENG in fire explosion engineering<br />

at Leeds University and I was looking<br />

for a career where I could use my<br />

degree combining my love for sailing<br />

and ambition to travel the world,’ he<br />

said. ‘This career path and course<br />

was perfect for me.’<br />

Andrew George, aged 27, worked<br />

as a manufacturing engineer for 10<br />

years before choosing the course.<br />

‘I was ready for a career change and<br />

I wanted to see the world,’ he said.<br />

‘The opportunities working as an<br />

ETO match my life ambition whilst<br />

learning a new trade. I’m looking<br />

forward to expanding my knowledge<br />

and learning new skills.’<br />

James McGregor, from North<br />

Shields, and Stephen Gallagher, from<br />

Luton, are both aiming for the top, to<br />

become superintendents. Stephen<br />

comments: ‘There are so many<br />

opportunities in the marine industry.<br />

Eventually I would like an onshore<br />

role, but I’m very happy at the<br />

moment and looking forward to<br />

stretching my sea legs.’<br />

All four students will start their<br />

first four and a half months of<br />

seatime in March 2010. They will<br />

then return to the college to<br />

continue learning theory, before<br />

returning to sea in March 2011.<br />

Once the students have<br />

completed the foundation degree<br />

they have the option of ‘topping up’<br />

their qualification through further<br />

study to achieve a full degree.<br />

A<br />

Pictured above are the first Royal Fleet Auxiliary officer cadets to<br />

begin training at Fleetwood Nautical College. The five officer trainees<br />

— aged between 20 and 37 — have just embarked on a three-year<br />

foundation degree course and are being trained alongside students<br />

sponsored by shipping companies from the private sector.

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