SSG No 10 - Shipgaz

10
Shipping and
Ship Management
The legacy of
the Piper Alpha page 12
Hostile takeover of
Nordic Tankers page 18
May 16 2008, 7 €
Lessons to be learned from
the Bourbon Dolphin page 26

Finnlines’ aim is to be the leading company in
its fi eld. For a company operating in the service
sector, competent and enthusiastic employees
are a key resource.
A good, well-planned human resource
policy serves to guarantee the enthusiasm and
expertise of our personnel.
A CAREER OPPORTUNITY
WITH ROOM FOR MY
PERSONALITY
Employee satisfaction are one of the main values
of Finnlines. We are constantly aiming
to achieve this by being a reliable and motivating
employer treating employees with
fairness and equality, encouraging every
employee to continuously develop his or her
own competence and expertise.
THE WAY TO GO IN SHIPPING
The competence of our personnel is ensured
through continuous training. One of the challenges
for the future is to attract new, talented
persons as Yourself.
For further information on vacancies
please contact our human resource offi cer at
Finnlines Ship Management.
FINNLINES PLC, PORKKALANKATU 20 A, FI-00180 HELSINKI, FINLAND,
TELEPHONE: +358 (0)10 343 50, FAX: +358 (0)10 343 4242, EMAIL: SEAPERSONNELFIN@FINNLINES. COM
FINNLINES SHIP MANAGEMENT AB, BOX 158, SE - 201 21 MALMÖ, SWEDEN,
TELEPHONE: +46 (0)40-17 68 40, FAX: +46 (0)40-17 68 41 / 17 68 51, EMAIL: SEAPERSONNELSWE@FINNLINES.COM
WWW.FINNLINES.COM

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SCANDINAVIAN SHIPPING GAZETTE, MAY 16, 2008
IN THIS ISSUE
12 Tragic blaze made offshore safer
14 Growth continues in the Finnish
maritime cluster
16 Esvagt does it on their own
18 Hostile takeover of Danish
Nordic Tankers
SPECIAL FEATURE
Shipping and
Ship Management
21 The recent economic high cycle
has given a boost to the maritime
industries across the Nordic
Baltic Sea Region. It is, in fact, a
local sort of globalization.
REGULARS
4 News Review
11 Editorial
77 IT & Communications
78 Technical News
80 Fleet News
82 Market Reports
90 A classic cargo liner
FRONT PAGE PICTURE
26
12 41
52 18
The TTS Group is a leading force in
the marine cargo handling and offshore
markets worldwide, with over 40 years
of engineering experience in shipping,
shipbuilding and equipment supplies.
Working closely with its customers to
improve productivity, quality and system
capacity, TTS RoRo expertise delivers fast
and efficient ship-to-shore solutions.
Read more about The TTS Group on
www.tts-marine.com and on page 51.

NEWS REVIEW
The ferry finnjeT To be scrapped
According to reports from India, the car
and passenger ferry Da Vinci (ex Finnjet)
has been sold “as is” in Genua for
scrap. The ferry was built for Finnline’s
traffic between Finland and Germany
by Wärtsilä’s Helsinki yard. Gas turbine
propulsion gave her a crusing speed
of 30 knots.
After the ferry was withdrawn from
service on the Baltic in 2005, she was
used as accommodation in Baon
Rouge after the hurricane Katrina. At
the beginning of this year, the ferry
was reported to have been sold and
renamed Da Vinci for conversion into
a cruise liner.
Train ferry service is secured
The railway ferry service between Finland
and Sweden has been secured
after the railway operators Green Cargo
and VR signed an agreement with Tallink
Silja, which reportedly is selling
its stake in jointly owned SeaRail. This
company markets and sells railway
transportation with the ferry Sea Wind
in Sweden and Finland.
sMa hiT hard by a pension debT
An expected SEK 35 million (EUR
3.7 million) profit became a SEK 377
million (EUR 40.3 million) loss when
the Swedish National Government
Employee Pensions Board changed
the calculation criteria for the Swedish
Maritime Administration’s pension
debt.
This has all but eradicated the profit
equalisation reserve, which now stands
at SEK 24 million (EUR 2.5 million).
Revenues reached SEK 1,818 million
(EUR 195 million), up SEK 172 million
(EUR 18.4 million) compared to
2006.
high profiT for aarhus in 2007
The Port of Aarhus had a good year
in 2007 with a large sale of land in the
older areas of the port and the opening
of a new container terminal.
Its operational income reached DKK
271 million while its profit was DKK
456 million, including a capital gain of
DKK 422 million on the sale of property.
Total investments were DKK 187
million of which DKK 182 million was
for the new container terminal.
sTX buy of aker
shares gets green
light from eu
ssg-göteborg. The EU Commission
has approved the STX purchase of 39.2 per
cent of the shares in Aker Yards. The South
Korean shipbuilding group will become
the largest shareholder in the company and
is expected to have representatives elected
to the board at the AGM on 21 May.
The Commission has dismissed all complaints
including warnings that STX might
be able to take advantage of illegal subsi-
Storm circles WMU
– Sweden cuts support to half
ssg-göteborg. When the IMO-governed
World Maritime University in Malmö,
Sweden, is preparing its 25th anniversary, a
large row has erupted over the school and
the way it is managed. Last year, an external
investigation was launched to examine
the situation at the school.
According to the WMU executive council,
wide-ranging changes are needed and
this should be undertaken by a new management.
The council has decided that a
new president shall replace the current president
Karl Laubstein by 1 January 2009,
while at the same time proposing that the
WMU board of governors appoint him as
“president emeritus”.
The external investigators also slams
the Comptroller and Auditor General of
India that is acting as external auditor for
WMU as well as for IMO. According to
the investigators, the Indian auditors have
“consistently given unqualified opinions in
relation to the University’s accounts.”
The investigation has not been made
public and this has been met by heavy
dies from South Korea. There are widespread
fears that the deal will lead to a transfer
of competence in the cruise sector from
Europe to South Korea.
The EU decision and rumours that Fincantieri
is on the move to buy stakes in
Aker Yards to prevent STX from a total
takeover sky-rocketed the share price on
the Oslo Exchange. Trading was halted
when the price had risen some 20 per cent.
Mærsk sells Three conTainer carriers A. P. Møller-Mærsk has sold another
three of the large container carriers in a sale-and-lease-back deal with HCI Hammonia
Shipping AG for takeover in the next few months. The sale involves another three in
the K series – the Knud Mærsk, the Kate Mærsk and the Karen Mærsk. HCI Hammonia
Shipping is a listed company set up by HSH Nordbank AG in co-operation with HCI
Capital AG.
The World Maritime University is situated in
Malmö.
critisism from the Swedish International
Development Cooperation Agency (Sida).
Through Sida and the Munincipality of
Malmö, Sweden is the largest contributor
to WMU, and Sida now emphasises its discontent
with the hush-hush by cutting its
financial contribution this year by half, to
about USD 1.5 million.
The agency however states that its commitment
to WMU is long-term and hopes
to be able to return to the earlier level of
support by 2009.
4 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008
robErT HErMANSSoN

stena drilling orders
a billion-dollar vessel
ssg-göteborg. Stena Drilling has ordered
a fourth drillship from Samsung Heavy
Industries in South Korea. According to
the shipyard, the price is USD 942 million
dollar, more than 50 per cent above the
price for the previous ordered vessels and
indicating a final at-berth price tag of USD
1–1.1 billion.
The fourth vessel will be delivered in
December 2011. According to SSG sources,
no firm charter has been secured yet,
but the vessel will be built for extreme conditions
north of Canada and Russia with
Arctic ice class for safe operation in temperatures
down to – 40 C. Stena Drilling’s
investments in new drillships are now close
to USD 3 billion.
The first vessel, the Stena DrillMAX, was
delivered in November when it entered a
4+1 year charter with Repsol. Number two,
the Stena Carron, will be delivered this
summer and has a charter with Chevron
for 3+5 years. Number three is expected
next summer and has a charter secured
with American Hess for five years.
The newly ordered drillship.
Stena Drilling is part of the Stena AB
group, which reported a SEK 3.9 billion
profit for 2007, the best year ever for the
group’s tankers, offshore activities and
ferry services, according to CEO Dan Sten
Olsson.
Ahtela inaugurates new ro-ro link
ssg-åbo. The Estonian company Navirail
OÜ, which was founded in 2007 by investors
from Finland, Estonia and the USA,
will shortly start a liner service between
Helsinki and Muuga with the Finnishflagged
ro-ro vessel Ahtela. The 1,590 lane
metres ship has been taken on time charter
by Navirail from Hollming Ltd for five
years. The Ahtela will do two round trips a
day between Helsinki Sompasaari harbour
and Muuga.
The Ahtela has been rebuilt during the
winter to adapt her for the new traffic. A
shelter has been built on the fore part of
weather deck to protect the cargo from icy
spray during winter. The cargo lift has also
been replaced by a ramp for faster handling
of trucks and trailers.
In the beginning of May the Ahtela was
towed from Riga to Turku Repair Yard at
Naantali for repairs of a bearing before
entering service. The Ahtela was built in
Norway 1991 and is of the same type as
Birka Cargo’s vessels of the Birka Transporter-class.
She was lengthened in 1998 and
IllUSTrATIoN: PETEr MIlD
KrZYSZTof brZoZA
The Ahtela approaching Naantali on 2 May
2008 under tow by Alfons Håkans’ tug Porin
Karhu.
has for many years been on time charter to
Finnlines. Navirail is planning to interlink
North and Central European distribution
centers by sea and rail, concentrating on
trailer and container shipments.
The company has the intention to buy
special railway wagons with exchangeable
wheels to cope with the different rail gauges
in Eastern and Western Europe as well
as ordering a new railway ferry for service
between Finland and a port in the Baltic
States.
NEWS REVIEW
TorM cashes in on bulk carrier
D/S Torm has sold one of its six Panamax
bulk carriers to a so far unknown
buyer for USD 70 million.
That leaves Torm with a considerable
profit estimated at around USD 45 million.
The vessel in question is the Torm
Marlene, which is a standard gearless
Panamax bulk carrier from Tsuneshi
Zosen in Numakura. The vessel was
delivered in 1997.
seven soMali piraTes senTenced
Seven pirates captured by security forces
from the semi-autonomous region
Puntland in Somalia have been sentenced.
The pirates hijacked an United Arab
Emirates-flagged vessel bound for
Somalia with a cargo of food and cars.
Five days after the arrest, a judge sentenced
the seven to life in prison.
rolls-royce designs polar ship
Rolls-Royce has been given the task of
designing a new polar research vessel
by the Norwegian Institute of Marine
Research. The vessel will be designed to
operate in up to one metre thick ice in
Arctic and Antarctic waters.
It will be equipped for fish-monitoring,
meteorological studies, seafloor
sampling and mapping. It can be operative
in four years at the earliest and
will replace the ice-strenghtened Lance
and Jan Mayen. The price tag is estimated
at NOK 500 million.
herning shipping orders More
Herning Shipping A/S has signed up
for more tankers from Nantong Mengde
shipyard, China. The Danish company
enlarged its portfolio of new ships
with a pair of tankers. The ships will be
another pair of tankers of 8,000 DWT.
The units will be delivered in 2010 for
a price of USD 20 million each.
eidesvik secures charTer deal
Eidesvik Offshore ASA has secured
a long-term contract with ES Special
Services, Inc., USA, for a large subsea
construction vessel. The vessel will be
delivered from Ulstein Verft in December,
2008.
The contract is for eight years with
optional extensions, and the contract
value for the firm period of more than
NOK 1 billion.
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 5

NEWS REVIEW
vessel designed by delTaMarin
The Canadian shipowner Transport
Desgagnés has ordered a special vessel
for transports of passengers, cargo and
vehicles on the Gulf of St. Lawrence.
As the infrastructure in most ports is
close to non-existent, all cargo including
vehicles is loaded in containers
and stowed on the open aft deck. For
handling containers there is a 40 tons
crane.
The capacity of the 95 m long vessel
is 125 TEU and 381 passengers. The
vessel will have good ice-going capabilities
and excellent manoeuvrability due
to two azimuthing propulsion units
(Z-drives) and two bow thrusters.
The newbuilding has been designed
by Deltamarin Group, Finland, and
will be built by Kraljevica Shipyard,
Croatia.
finnlines ro-ros shifTed flag
The ro-ro vessels Finnpulp and Finnmill
were transferred to Swedish flag
and the Finnkraft and Finnhawk to Finnish
flag after Finnlines took over the
ownership of the vessels during April.
Before that they sailed under British
flag.
Finnlines decided earlier this year to
exercise its option to buy the vessels,
which had been on long term charter
since their deliveries in 2000–2002.
nscp buys shares in TerMinal
Novorossiysk Commercial Sea Port
(NCSP) will buy 50 per cent of the
shares in Lomonossov Cargo Terminal.
The price tag is EUR 77 million.
Lomonossov Cargo Terminal will build
a container terminal in the Port of
Lomonossov, close to St. Petersburg,
and the terminal will have a capacity of
1.3 million TEUs annually.
aker heading in righT direcTion
Although the operating profit in Q1
was less than half the corresponding
profit last year, Aker Yards’ management
sees the NOK 211 million profit
as an indication that the group has
broken the trend from last year, which
ended with a significant loss.
This year, the group has secured
three orders, one gas-propelled supply
vessel and two ice-strengthened container
carriers, and management expects
growth in the market to level out.
eu clears stoltnielsen
and odfjell
from cartel charges
ssg-göteborg.The EU Commission has
closed the investigation into alleged cartel
crimes by the shipping companies Stolt-
Nielsen and Odfjell.
The Commission has not publicly
motivated its decision, but Odfjell says
that they have reason to believe that EU
NCL takes responsibility for explosion
ssg-göteborg. Eight seamen died and
ten others were injured after a boiler exploded
on the cruise vessel S/S Norway in the
Port of Miami in 2003. The U.S. attorney’s
office in Florida says in a statement that
the shipping company, Norwegian Cruise
Line, has agreed to plead guilty to a cri-
Mona Lisa ran aground
ssg-tallin. The cruise vessel Mona Lisa
(Ex-Kungsholm) departed from Ventspils
on 8 May. The vessel’s propellers will be
inspected in Kiel, Germany.
Mona Lisa could leave the Latvian port
after the government office got a letter of
guarantee from the vessel’s insurance company
in order to secure that Latvia would
get back EUR 192,000 from the rescue operations
including evacuation of passengers.
According to the Latvian Maritime
Administration’s spokesperson, Sarma
Kocane, the accident was probably due
One oil spill villain grabbed in big operation
ssg-göteborg. Coast guard aircraft from
nine European countries spent ten days
patrolling the Skagerrak sea in search of oil
spill. 17 oil slicks were detected during a
total of 185 flight hours on 61 missions.
On the last day, one Norwegian-flagged
vessel was caught red-handed when pumping
oily water over board north of the
Skaw. Legal proceedings will be held in
Denmark, as it was caught by a Danish
aircraft in Danish waters.
lacks jurisdiction due to the tramp exception
in the EU competition rules. However,
Odfell warns that the issue could be
raised by national authorities, but says that
the company has been granted conditional
amnesty from the relevant states and that
this should therefore not lead to any fines.
minal charge and to pay an undisclosed
criminal fine, reports South Florida Sun-
Sentinel. Norwegian Cruise Line owned
the vessel at the time of the accident. The
Norway arrived in Alang as the Blue Lady
for scrapping in August, 2006, and breaking
up started in January, this year.
to a navigation failure. The cruise vessel
Mona Lisa grounded in Irbe Sound, some
ten nautical miles off the coast of Latvia
on 4 May.
The Bahamian-flagged vessel had 651
passengers and 320 crew members on
board. The Latvian Search and Rescue service
evacuated the vessel.
After several failed attempts to refloat
the Bahamian-flagged Mona Lisa, the cruise
vessel was pulled off by Svitzer Salvage.
The Mona Lisa is owned by Greek Leonardo
Shipping.
The head of the CEPCO 2008 operation
is satisifed with the outcome.
“I’m glad that we detected only 17 oil
slicks. This indicates that the intensified
survelliance during the last two-three years
has had the preventive effect we wished
for”, says rear-admiral Nils Wang at the
Danish Naval Command in a press statement.
Denmark, Germany, Sweden, Norway,
Finland, Holland, Belgium, France
and Spain participated.
6 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

ENT MIKKElSEN
Gediminas now sold to a Greek operator.
dfds sells four tramp ships
ssg-ringkøbing. DFDS Group has sold
its four tramp vessels owned by DFDS Lisco
in Klaipeda. The four vessels have been
for sale since the autumn, when it was decided
that tramp shipping should no longer
be part of the DFDS strategy.
The four vessels Rasa, Aukse, Vytautas
and Gediminas have been sold to a Greek
operator for takeover gradually from the
end of May. They have been sold to a subsidiary
called Aura Shipping, which will
John Fredriksen failed at TUI
ssg-ringkøbing. John Fredriksen did
not manage to sack the chairman of the
board of TUI, Jürgen Krumnow, at the
AGM on Wednesday, despite support from
42.6 per cent of the votes. Also, Fredriksen
did not get a seat in the board.
John Fredriksen, who wants to divest the
Hapag-Lloyd business, has spent almost
USD 1 billion on TUI shares, and is the
25.000 SHIPPING
PROFESSIONALS READ
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crew the ships until delivery. The ships are
two pairs of sister. The Rasa and the Aukse
were built 1996 by Baltija Shipyard in
Klaipeda. The 5,500 DWT vessels are fitted
with two side-cranes.
The Gediminas and the Vytautas were
also built by Baltija in 1996 and 1995,
respectively. They have a deadweight of
4,863 tons and fitted with two cranes.
According to DFDS, the sale will generate
a profit of approximately DKK 20 million.
largest single shareholder with 11.6 per
cent of the shares.
John Fredriksen’s right-hand man, Tor
Olav Troim, hurled criticism against the
acting board during the AGM. According
to Troim, the board lacks leadership
and competence in liner shipping with
too much concentration on tourism, the
group’s other business area.
Advertise in The Scandinavian Shipping Gazette
www.shipgaz.com
longer TiMe for negoTiaTions
The final date for the privatisation
negotiations involving Gdynia Shipyard
has been pushed back again, this time
to 20 May. The ministry responsible
for privatisation is negotiating with
Amber which had the sole right to
privatisation negotiations up until 30
April. Both the parties claims that the
negotiations are going well and that the
privatisation process will be completed
before 30 June. Amber is interested in
taking control of the two largest Polish
production yards and the marine engine
manufacturer H. Cegielski.
The keel of viking adcc now laid
The keel of Viking Line’s newbuilding
for the Mariehamn – Kapellskär route
has been laid at the Spanish shipyard
Astilleros de Sevilla.
Viking Line’s project manager Kaj
Jansson said to SSG that the work on
the newbuilding is proceeding as planned
and that the vessel, which so far is
called Viking ADCC, will be delivered
in summer, 2009. She will have a capacity
of 1,500 passengers and 320 cars.
A service speed of 22 knots will reduce
the crossing time to two hours.
deep sea signed four conTracTs
Deep Sea Supply has signed two time
charter deals with Esso Exploration Inc.
covering the PSVs (Platform Supply
Vessels) Sea Pollock and Sea Turbot,
which will enter the charters in August.
The PSV newbuilding Sea Trout has
been fixed by Petrofac, and the AHTS
Sea Lynx by Saipem for a minimum of
175 days. The total value of the contracts
is around USD 90 million.
HEMPASIL
- let your fuel take you further
HEMPASIL is documented to reduce
fuel consumption by 10.6%
NEWS REVIEW
HEMPEL
www.hempel.dk
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 7
Hempasil 58x58.indd 1 19-03-2008 11:42:50

NEWS REVIEW
clipper group in joinT venTure
The Danish Clipper Group has joined
forcew with a new partner. This time it
is the Argentinean company Petro Tank
S.A. in Buenos Aires.
Together with Clipper, it has formed
the company Petro Clipper for the
purpose of developing shipping activities
in Argentinean waters. The Argentinean
investment is only one made
by Clipper following the huge profits
from the bulk and tanker markets in
recent years.
“norden” will change iTs naMe
Dampskibsselskabet “NORDEN” has
called for an extraordinary general
assembly on May 28, 2008, to seek
confirmation for a number of changes
in the company. One of them is the
change of name from Dampskibsselskabet
“NORDEN” to Dampskibsselskabet
NORDEN.
The old name will continue to be a
secondary name along with the other
secondary names: Dampskibsselskabet
Orient A/S, Nordmax A/S and Nordfarer
A/S. central Copenhagen address
next weekend.
o.w. bunker renew Their fleeT
O.W. Bunkers is in the process of selling
the veterans Tinka and Breeze.
Tinka has been sold to a Greek operator,
while Breeze has been sold to a
Russian operator.
As replacement ,the company has
bareboat chartered the Clipper owned
tankers Clipper Barolo and Clipper
Barbera.
The 2005/06-built tankers will change
to the DIS register. The 3,769 DWT
tankers will work in a pool with the
Swedish tanker Neptunus.
Our strength - your benefit!
frEDrIK DAVIDSSoN
The icebreaker frej in luleå Hamn, waiting for work.
idle winter for icebreakers
ssg-göteborg. The Swedish icebreakers
(Ale, Atle, Oden, Frej and Ymer) had a
relaxed winter.
The ice only covered about a quarter of
the surface covered during a normal winter.
Only Ale, the smallest vessel in the Swedish
icebreaker fleet, has been in operation
throughout the whole season.
”Two of the large icebreakers, the Atle
and the Ymer, joined the Ale for a couple
of weeks in March and the beginning of
April”, says Ulf Gullne, head of the icebreaking
unit at the Swedish Maritime
Administration, to SSG.
During the winter, the Swedish icebrea-
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kers assisted 196 vessels, the lowest number
since 1990/91; this to be compared
to 1,500–2,000 during a normal winter.
Together with the Finnish icebreakers, a
total of 692 vessels were assisted compared
to 3,500–4,000 in a severe winter.
Ulf Gullne estimates that around 1,000
vessels were assisted by icebreakers in the
Baltic Sea region this winter season. The
corresponding number during a normal
winter is about 7,000–8,000.
According to the Swedish Meteorological
and Hydrological Institute, SMHI, the
ice season is now all but over, one to two
weeks earlier than normal.
new TerMinal in The porT of Muuga The board of Port of Tallinna (AS Tallinna
Sadam) has now approved the construction of a new terminal area including 400 metres
of quayside in the Port of Muuga. The terminal will have a capacity of 500,000 TEU. The
price is EEK 860 million (EUR 55 million) and the terminal will be completed within
two years from now.
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8 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

finnish shipowners
join their forces
ssg-åbo. The Finnish shipowners’ associations
Finlands Rederiförening, Fraktfartygsföreningen
and Ålands Redarförening have
agreed on a merger into a new organisation
named Suomen Varustamot ry – Rederierna
i Finland rf from 1 June, 2008.
The new organisation will have offices
in Helsinki and Mariehamn. The current
associations have a total of 27 member
companies with 110 vessels under the Finnish
flag. The activities of the three present
organisations will cease. Suomen Varustamot
ry – Rederierna i Finland rf will be organised
in three sections, led by the managing
directors of the present organisations.
Mika Nykänen is responsible for matters
concerning shipping policy and contacts to
politicians and media, Hans Ahlström for
the ferries and Olof Widén for the cargo
vessels. Chairman of the new association is
Thomas Franck, managing director of Rettig
Oy Ab Bore.
Tax liability will probably remain in new scheme
ssg-åbo. The Finnish Ministry of Finance
is preparing a proposal for revised tonnage
tax legislation, which is expected to be
completed by no later than the beginning
of June.
”The big problem is the treatment of
deferred tax liabilities”, says Hans Ahl-
ström, MD of the Åland Shipowners’ Association.
The shipping companies propose
that these disappear within ten years.
”It seems that the Ministry of Finance is
not willing to agree to this”.
The new legislation is expected to come
into force on 1 January, 2009.
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”Vacancies in shipping”
porTs geTs financial benefiTs
The Russian competition authorities
will determine which ports to get
financial benefits 49 years ahead and
be declared as special economic zones,
reports SeaNews.ru.
Next year the appointed ports will be
presented. Probably the competition
authorities will choose to pick one port
per sea or region; the Baltic Sea, the
Black Sea, the Caspian Sea and the Far
East and the Arctic.
Many calls To Medical service
The Danish Radio Medical Service had
on average three calls per day during
2007. In total the Radio Medical Service
had 1.107 calls. The 24h service is
conducted from the hospital in Esbjerg
on behalf of the Danish Maritime
Authorities. The service helps ships to
minimise the number of evacuations to
only 57 times in 2007.
On the other hand the number of
calls from passenger vessels with illness
amongst passengers saw an increase of
19 per cent in 2007.
and get all new and available jobs delivered directly to your mailbox every week.
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NEWS REVIEW
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 9

MPC STEAMSHIP
Our globalized region
There can be no doubt: The recent
economic high cycle has given a
boost to the maritime industries
across the Nordic Baltic Sea Region
(NBSR). This has been borne by a global
trade boom and vibrant economic development
at home, particularly along the
southern shores of the Baltic. It is, in fact,
a local sort of globalization.
For a good number of years seafarers
from Poland and the Baltic countries have
been a much needed source of competence
for shipping companies in Germany
and the Nordic countries. At the same
time repair yards from Szczecin to Tallinn
became a relief for cost-pressed shipowners,
and today Baltic shipyards have a
major slice of the immense order backlog
for Norwegian yards as steel subcontractors.
Migrant workers from Poland are
now essential for Nordic shipbuilders to
meet production programmes.
All this testifies to a stronger economic
interdependence across the NBSR. There
is strength in complementary entities –
supply and demand of labour and competence,
and this is building stronger business
relations within our region.
There are challenges, too. Our seas, the
Baltic and the North Sea are both rated as
Particularly Sensitive Sea Areas – PSSAs.
They need to be used with care and
protected from undue pollution. IMO’s
recent cap on sulphur emissions for PSSAs
to 1.0 per cent content in the bunker oil
from 2010, will be a valuable contribution.
Poland and the Baltic countries have
filled the competence gap for Nordic
shipowners, and their seafarers have been
somewhat better paid than workers ashore.
There is a challenge in attracting young
people to a maritime education here as
everywhere else in Europe. In the future,
this may be a treasured competence that
may help to strengthen a maritime industry
in the Baltic countries, in ship management
and operation, shipbuilding and
commercial shipping.
Most of the countries under review have
seen the benefit of a maritime industry
and tried to promote it by introducing
tonnage tax systems along the EU guidelines.
Poland, Lithuania, Latvia, Norway
and Denmark have all such legislation
in place. In Sweden, the politicians have
endorsed such a scheme, it may be coming
in Finland and even in Estonia, thus
paving the way for somewhat level field of
competition.
It may be a paradox that our industry
requires tax exemptions, but that has a
EDITORIAL
dag bakka jr
Editor, Norway
Phone: +47 55 32 17 47, E-mail: dag@shipgaz.com
reason beyond our influence. It may be a
price to pay for a globalized industry, but
in return for the general benefit of lower
transport prices.
The shipping industry in our region
is the prime driver in a large cluster of
related industries. The scale, trading area
and activities may differ from country to
country, but they are all operating along
the same regulatory framework and are all
dependent on the same support network
of services. A major part of this may be
found along the southern shores of the
Baltic Sea. With competence, hard work
and commercial vigour there is a rich
maritime potential for this region.
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 11

Tragic blaze made
offshore safer
In the evening of July 6, 1988 an explosion occurred on the Piper Alpha platform
in the North Sea. 167 persons died trapped in the flames, while the 62 people
that eventually escaped did so by climbing down ropes or jumping into the
water. The legacies of the Piper Alpha disaster include a bill for USD 3.5 billion
and a complete makeover of the offshore safety regime.
The Piper Alpha was a production platform
180 kilometres north-east of Aberdeen.
The platform drilled wells and gas
and water were separated from the oil in
production separators. Two other platforms,
the Tartan and the Claymore,
about 20 kilometres away were linked to
Piper Alpha by pipelines.
On July 6, some maintenance work
was carried out on the platform. On the
work list was a condensate pump that was
down for three different jobs; a 24-month
planned service, repair of the coupling
and a recertification of a safety valve. In
preparation of the maintenance the suc-
12 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

ScAnPix/BorowSki-SiPA
Firefighter
aboard the
support vessel
Tharos off the
northeast coast
of Scotland,
fighting the fire
on the offshore
platform Piper
Alpha.
tion and delivery valves were closed, but
no slip plates were inserted. The safety
valve was removed for testing and the pipe
was blanked with a flange. However, somewhere
along the line, the communication
between day and night shift failed and the
fact that the safety valve had been removed
was not relayed.
Condensate ignited
Shortly before 10 p.m. the running condensate
pump tripped and the night shift operators
failed to restart it. With both pumps
down the operators now faced the risk of a
gas plant shutdown with a possible escalation
to a total shutdown, loss of power and
the need for a ‘black start’. Under this pres-
sure, they decided to start the commissioned
pump. When the suction valve was opened
the condensate leaked through the ill-fitted
blank flange, ignited and exploded.
A message was sent from
Piper Alpha to the firefighting
vessel Tharos:
“People majority in galley.
Tharos come. Gangway.
Hoses. Getting bad.”
Most of the personnel on the platform
were off duty in the accommodation and
others, wrongly assuming that the living
quarters were a safe place, soon made their
way there. The emergency procedure was
to report to your lifeboat, but since the
smoke made it impossible within the first
minute to access the lifeboats, the crew
waited, expecting to be evacuated by helicopters.
Unfortunately, massive smoke and
flames made it impossible for any helicopters
to reach the platform.
A message was sent from Piper Alpha to
the fire-fighting vessel Tharos, which was
anchored nearby: “People majority in galley.
Tharos come. Gangway. Hoses. Getting
bad.”
Things got worse. When the emergency
lights went out the panic increased. Some
workers tried to escape by climbing down
by ropes and jumping from the platform
into the sea and rescue boats launched by
ships in the vicinity managed to rescue 62
people. Others did not even try to escape
and most of the 167 people that died suffocated
when toxic fumes filled the quarters.
Sunk to 150 metres depth
The explosion disabled both the fire-fighting
system and the main communications
system. The neighbouring platforms realized
that there was a fire on the Piper Alpha,
but it took some time before they grasped
the full scale and stopped pumping oil.
Within a few hours, the Piper Alpha was
destroyed and the accommodation fell into
the sea to rest at a depth of 150 metres.
The public inquiry that followed, headed
by the Scotsman Lord Cullen, was to
become the most comprehensive inquiry
conducted in the UK. As in so many other
analyses of disasters, it would prove to be
a combination of technical and managerial
flaws that eventually unleashed the event.
The Piper Alpha report has played an
important role in the development of offshore
safety. The report signified a shift to
goal-based rather than prescriptive regulations.
The basic principle is that the legislation
sets the safety goals and the operator
develops the most appropriate methods of
achieving those goals. Thus, the responsibility
for safety is placed on the operator
and not the regulator.
A key lesson learnt from the Piper Alpha
disaster is the Safety Case regulation that
requires the company to demonstrate that
an effective safety management system is
in place, identifying technical and organizational
aspects critical to safety. Workforce
involvement is necessary to ensure
that everybody does the right thing and
knows why they do it. The safety cases are
assessed by the governing authority and
accepted when the authority is satisfied
that the risks are reduced to as low as is reasonably
practicable.
Insufficiently self-critical culture
The report was critical of the company’s
managerial system. Managers were said to
have risen through the ranks with minimal
qualifications. The insufficiently self-critical
culture led to poor practices and ineffective
safety audits. In addition, deficiencies
in the work permit system were noted.
Communication between shift changes was
lacking and the system was said to be operated
to comply with procedures, rather
than to identify and eliminate risks.
With the platform designed for the
rough seas of the North and not for explosions,
consequences were found escalated
by design flaws. The large loss of life was
in large attributed to poor evacuation procedures
and poor design of decks and ladders.
Hardware recommendations included
separate accommodation platforms, the
installation of subsea isolation valves and
blast walls, free fall lifeboats and purposebuilt
standby vessels. Ropes, ladders, and
nets should be available as backup for the
more sophisticated escape methods.
Lord Cullen did not blame any individual
and the report made it clear that no
single act or omission was the cause of the
deaths of so many men. As seen so many
times in major accidents, a chain of small
events, each in itself seemingly insignificant,
can make all the difference.
cecilia österman
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 13

14 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008
Pär-HENrIk SjöSTröM

Growth continues in the
Finnish maritime cluster
Technology is the leading word for the
Finnish maritime cluster, which during
the last years has grown further in
importance. The shipbuilding industry
and its network of suppliers are a
characteristic feature for Finland.
The Finnish maritime cluster is all about
interaction. Numerous maritime businesses
form an operative network, and all
the included companies and other entities
benefit from it. In this case it would not be
out of place to use the rather jaded phrase
that the whole is greater than the sum of
its parts.
The maritime cluster in Finland includes
various marine industries as well as shipping
and port operations in both the private
and the public sectors. According to
a recently published study, there are about
2,900 companies in the Finnish maritime
cluster. The combined turnover of the
activities in the maritime sector totalled
some EUR 13.2 billion. About 43,400
persons are employed in activities directly
related to the maritime sector. But the
impact of the maritime cluster extends
directly and indirectly to almost all sectors
of the Finnish economy and very widely
to the whole society. Taking into account
the indirect effects extending to the whole
country, there are at least 500,000 persons
in the sphere of the employment effects
of the maritime cluster. In a country with
only 5.2 million inhabitants this is huge.
Growth sector
The study about the Finnish maritime
cluster has been published by the Finnish
Funding Agency for Technology and Innovation
(Tekes). It is a follow-up to the first
comprehensive study about the Finnish
maritime cluster from 2003, and it is based
upon statistics and information from year
2006. Both studies have been compiled by
the Centre for Maritime Studies, which is
a part of the University of Turku, and Etlatieto
Oy.
One of the main aims of the study is to
update the information regarding statistics
and competitiveness presented in the first
maritime cluster study which was published
in 2003. The aim is also to increase the
awareness of the significance of the maritime
cluster in Finland and to promote its
development.
Technology is the strength
of the maritime cluster.
The most obvious result is that the maritime
cluster is really a dynamic growth
sector and an engine for the whole Finnish
economy. Compared with the previous
maritime cluster study, in which the data
mostly referred to year 2001, the combined
turnover of the maritime sector has grown
by EUR 2 billion in five years. Internationalization
has also increased surprisingly
fast. Finnish companies have an increasing
number of partners abroad, and they have
also expanded their operations outside the
borders of their own country. In addition
to that, the number of foreign companies
operating in Finland has grown. Several
Finnish companies in the maritime cluster
have shifted to foreign ownership.
The maritime cluster forms a whole
Compared with many other countries,
shipbuilding and marine industry is a large
sector in Finland. Even though it forms a
firm basis for the cluster, Project Manager
and Senior Researcher Tapio Karvonen
from the Centre for Maritime Studies
stresses that all actors within the maritime
cluster in Finland form a whole.
“Specialization and networking are key
themes in the strategies of the maritime
cluster companies. Companies seek to
deepen their cooperation with other companies
into partnerships”, he explains.
Project Manager Karvonen thinks that
high technology and professional knowhow
are characteristics of the Finnish maritime
cluster.
“Technology is the strength of the maritime
cluster. The cluster includes leading
companies in several fields such as ship
engines and cargo handling equipment.
Project manager Timo Karvonen underlines
the importance of networking.
Finland ranks among the top four countries
as a builder of cruise and passenger
ships.”
According to Project Manager Karvonen
the future perspectives of the Finnish
maritime cluster are bright. Most of the
companies foresee a continuing growth of
turnover in the following years to come.
Although internationalization will continue,
none of the companies is planning to
move all of its activities abroad.
“But the availability of professionallyskilled
blue-collar labour will be a challenge
in the future. Labour from other countries
will be needed in Finland. The educational
system has also faced some criticism as
there is not enough cooperation with the
trade and industry”, Project Manager Karvonen
says.
Another conclusion of the study is that
when it comes to shipping operations,
Finland could strengthen its position considerably
if the taxation of shipping companies
was eased to the level of the competitor
countries because shipping in the
Baltic Sea is increasing at a record rate in
the wake of Russian growth.
pär-henrik sjöström
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 15
Pär-HENrIk SjöSTröM

Esvagt A/S has reactivated their own
private “shipyard” on a quayside in
their home port of Esbjerg. Not for the
first time, but rather the 25th time,
to rebuild an existing ship that will
be altered for a new assignment in
order to fulfil the requirements of a
customer.
During March and April two Esvagt ships
were at the “shipyard” at the same time.
The brand new Esvagt Contender, which
arrived at Esbjerg directly from a builder’s
yard in Singapore for a rebuild, and the
Esvagt Beta, which was purchased and
taken over in February in Port Stanley on
the Falkland Islands. It sailed directly to
Esbjerg to be rebuilt to meet the standards
of the Danish flag and the standards for
Esvagt ships.
The word from Esvagt is that having this
“own shipyard” is part of the business. It
is as easy as sailing to an out-of-town shipyard
and having the shipyard co-ordinate
the rebuild.
It could be boiled down to the fact that
the company already has to make the specification
for the job and sometimes also
appoint certain craftsmen for the job, so
Esvagt might as well take full responsibility
for the whole job.
It has been done several times over the
past years with a number of vessels, and
during these conversions, upgrading or
rebuilds Esvagt has got to know a number
of local companies with the necessary skills
to do a certain job to the standards of
Esvagt and any classification society.
Not that Esvagt dislikes shipyards, the
company uses a number of shipyards for
a variety of tasks every year, including the
local floating dock, Esbjerg Dock Yard,
which is owned by one of the local companies,
Grumsen Maskinfabrik, often used as
partners in the conversion jobs alongside.
The Contender
The Esvagt Contender arrived in Esbjerg
from the builders, ASL Shipyard, in Singapore,
as ship number five in the series of
eight identical standby/SAR vessels. The
46-metre long vessel has since 2006 been
dedicated to a charter to a Norwegian customer
for standby duties on an oil field on
the Norwegian continental shelf. The difference
for the Esvagt Contender is that the
The Esvagt
Contender
and the Esvagt
Beta alongside
in Esbjerg.
Esvagt does it on their own
customer had a special requirement for a vessel
with fire-fighting equipment on board.
Really no problem, they said from
Esvagt’s commercial and technical department.
So a plan was drawn up for adding a
power unit on the aft deck to provide the
necessary power for the fire pumps. At the
beginning of May the additional power
pack and pumps were ready to test. It was
quite a complicated job to move the bunkering
station with all the piping that followed
as well as isolate the new power pack
from polluting the whole ship with noise
while working.
Like most of Esvagt’s conversion and
newbuilding projects, the Århus based
naval architect group Ole Steen Knudsen
draws the technical lines.
The Beta
The Ole Steen Knudsen Group is also in
charge of the conversion of the former
maritime research vessel the Dorada, which
was purchased in February by Esvagt and
renamed the Esvagt Beta. The vessel, built
as a standard Polish fish factory vessel in
Gdynia in 1991, was chosen as the extra
crew-change vessel for Esvagt.
16 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008
BENT MIkkElSEN

BENT MIkkElSEN
The fish factory vessel Esvagt Beta will be
rebuilt to a crew-change vessel.
Esvagt’s standby units normally stay on
duty at sea for a period of twelve months
before going to port for docking and
repairs. During these twelve months crews
are normally changed (every 14 days) by
using the crew-change vessel Esvagt Alpha,
a former lighthouse tender with a large
accommodation unit, but as the Esvagt
fleet has been enlarged substantially during
the last couple of years, with more than
ten new units, it is not possible to manage
with only one crew-change vessel. So after
searching the market for a vessel with sufficient
accommodation, the Dorada was
chosen as the best possible.
The Esvagt Beta will then
be a nearly new vessel
ready to take up the “busback-home”
duty.
Swedocean SWEDISH OCEAN INDUSTRY GROUP
Swedeocean is a Swedish maritime organization
for suppliers, subcontractors and authorities within
the shipping and offshore industry.
Swedocean’s main activities covers arranging
seminars, conferences, exhibitions and visits to
companies as well as arrangements to stimulate
networking between the members and the
shipping-cluster.
Swedocean consists of 45 leading companies
within different areas of Shipping and offshore
technology.
www.swedocean.org
Swedocean’s members in 2008
Since her arrival at Esbjerg, the Esvagt
Beta has been stripped of the equipment
used for ocean survey as well as the origi-
Alfa Laval Tumba AB
SANNES AB
nal galley area. Even a number of cabins
have had to be altered to Danish standard,
although the vessel has been working for
Callenberg Fläkt Marine AB
Cedervall & Söner AB
Chris-Marine AB
Daros Piston Rings AB
Scanunit AB
Sjöfartens Analys Institut
Sjöfartsverket
SKF Coupling Systems AB
the Falkland Islands for nearly ten years.
DEC Marine AB
S-Man AB
The Esvagt Beta is expected to be ready
Dellner Brakes AB
SMHI
at the beginning of June and will then be a
Det Norske Veritas
SP - Sveriges Tekn. Forskningsinst.
nearly new vessel ready to take up the “busback-home”
duty in Esvagt. It is still under
consideration whether the vessel should be
based in Esbjerg or in a port on the Norwe-
ENWA AB
Fartygskonstruktioner AB
GVA Technology AB
Götaverken Cityvarvet AB
Jotun Sverige AB
SSAB Oxelösund AB
SSPA Sweden AB
Stena Line Scandinavia AB
Svensk Sjöfarts Tidnings Förlag AB
Svenska Ostindiska Companiet AB
gian West Coast. During the last couple of
Kockums AB
Sveriges Redareförening
years Esvagt has signed several contracts with
Loipart AB
Telemar Scandinavia AB
Norwegian Statoil on a number of oil fields
Lloyd’s Register EMEA
TTS Ships Equipment AB
along the coast, so it could be considered
easier to fly the crew to a Norwegian port
instead of sailing all the way from Esbjerg.
Maritech Marine Technologies AB
Mo Mekaniska Verkstad AB
Motor-Service Sweden AB
Emtunga Offshore AB
Underhållsföretagen Sverige AB
Uson Marine AB
VINNOVA
Volvo Penta Europé Offi ce Sweden
bent mikkelsen
RINA Sweden AB
Wärtsilä Sweden AB
Rolls-Royce AB
Räddningstjänsten Storgöteborg
Öresundsvarvet AB
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 17

NoRDIC TANkERS
The new board of directors of Nordic Tankers. From the left: Mogens Worre Sørensen, Mads Roikjer,
Steen Bryde, Brian Petersen, Geir Jansen.
Hostile takeover
of Danish Nordic Tankers
Nordic Tankers, one of the youngest
Danish listed companies, was raided
on April 23, when the annual general
assembly was held in Copenhagen.
Financial tycoon Steen Bryde took
over and put in his own board of
directors and sent the old one off to
the dark.
The old board of directors had then been
fighting Steen Bryde and his associates
for several months in order to prevent the
hostile takeover of the company. Nordic
Tankers was established in 2005 on the
foundation of the company K/S Difko
47, which in its turn was founded in 1987
by Burmeister & Wain in Copenhagen, as
a shipowning company for three product
carriers, and sold on public shares.
The trouble for the board of directors
and the shareholders, at least some of
them, started in the autumn of 2007, when
Steen Bryde discreetly bought up shares in
Nordic Tankers until the point where he
had more than ten per cent. Steen Bryde
then sent a letter to the company claiming
that he should have a seat on the board of
directors. It was turned down, despite his
large number of shares. Steen Bryde called
for an extraordinary general assembly in
January 2008 for the purpose of taking
over the company in order to change the
business concept.
The struggle between Steen Bryde and
the board of directors ended with a victory
for the board of directors then in power,
18 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

headed by Mogens Buschard with Tage
Bundgaard – former head of Maersk Supply
Service and Maersk Tankers – as deputy
chairman.
The other members of the board were
Søren Halsted – former CEO of Clipper
Denmark and present chairman of the
board of Clipper Group – along with Uffe
Jacobsen, Kurt Bjørndal and Poul-Erik
Andersen. Uffe Jacobsen has been advisor
on transport issues for years and is associated
with DTU, Danmarks Tekniske Universitet.
Kurt Bjørndal who is working in
advertising and has a past as head of information
in A. P. Møller.
Accusations
When Steen Bryde had acquired the first
portion of shares he started to make accusations
that the company was not doing
well enough according to his knowledge,
and that the potential was much bigger.
He claimed that the company’s investment
profile was far too risky by only
investing in chemical tankers and product
carriers, running these in pools with Eitzen
Chemicals and Handy Tankers (A.P. Møller-
Mærsk as commercial manager), while the
technical management was outsourced to
EMS Ship Management (Eitzen).
Steen Bryde found it unacceptable that
the company only fixed the vessel for one
or two voyages instead of making firm contracts
for several years like bigger companies
do, as he said in an interview earlier
this year.
These harsh statements were so hard on
the chairman of the board Mogens Buschard,
that he resigned in February, leaving
Tage Bundgaard to take up the position as
chairman. Bundgaard has worked hard to
get support from the around 6,000 small
shareholders in Nordic Tankers to avoid
Steen Bryde’s raid on the company.
He has been issuing statements to the
media to explain the board of director’s’
view on the battle with the Steen Bryde, who
has not given any alternative suggestions to
what the company should do instead of
running a tanker business. Tage Bundgaard
has said on several occasions that the board
fears that the scheme is to sell Steen Bryde’s
large portfolio of real estate in a falling market
into the Nordic Tankers.
“We don’t want to have estates for
around DKK 800 million, which on a daily
basis are falling in value”, Tage Bundgaard
explained to SSG.
“Steen Bryde has not particularly said
that’s the plan, but he hasn’t denied it
either”, he adds.
The Tage Bundgaard-headed board
of directors has been digging into Steen
Bryde’s past, but did not find anything illegal
but some arrangements rather close to
the edge, like it turned out to be with the
number of shares under Steen Bryde’s control
up to the annual general assembly.
Notice about the raid
The day before the annual general assembly
the board of directors gave notice to
Finanstilsynet (Government financial controller
of listed companies) saying that
Steen Bryde violated the rules for listed
companies and the smaller shareholders.
It is a rule that if one person or group
controls more that 30 per cent of a listed
company, the group or person is obligated
to give the remaining shareholders a firm
offer of taking over. Steen Bryde has not
done this in the matter of Nordic Tankers.
We don’t want to have
estates for around DKK
800 million, which
on a daily basis are falling
in value.
He has publicly denied that he controls
more than 30 per cent, but there is hard
evidence that he has made offers to shareholders
that if they vote for him at the general
assembly he will purchase their shares
at the end of the year for the present price
plus a bonus.
This way of buying shares has been
interpreted by the old board of directors as
if Steen Bryde could
not pay for the
shares before he has
taken control of the
company, its value
and the assets.
Finanstilsynet is
now investigating
the matter. Another
dark horse in the
hostile takeover is
the main banker,
Nordea, which has a
large portfolio with
Nordic Tankers. The Nordic Lisbeth.
There is a clause in the condition for the
loans given to Nordic Tankers that “if control
of the company changes, the arrangement
has to be reconsidered”.
This clause was still under discussion
at the general assembly before the voting.
Steen Bryde had claimed earlier in
the struggle that he had a letter from Nordea
saying that this clause would not be
a problem if he should gain control over
the company, but it was disputed by the
chairman Tage Bundgaard, who claims that
he had got the opposite message from the
bankers.
Control and then what?
The vote ended with the election of Steen
Bryde and his board of directors. Two of
the persons on the board of directors
have actual shipping knowledge. One is
Geir Jansen, who has a past in Stena Line,
Scand lines and was the first CEO of Difko
in 1979.
The other person is Mogens Worre
Sørensen, who has been working in the
Eitzen Group for a number of years and
before that at Burmeister & Wain.
After the takeover it is still uncertain
what is going to happen with the company.
The two employees, the CEO Flemming
Krusell Sørensen and Claus Breitenbauch,
remain in their positions at the office at
Holstebro.
Steen Bryde has announced that he and
the board of directors will provide a new
strategy within the next 100 days.
He has lifted a bit of the top of the pot
for the future. His idea is as expected by the
old board of directors, to mix the shipping
business with real estate and wind power.
Steen Bryde says in a first statement that
the company will be less volatile, especially
by investing in wind turbines at sea.
bent mikkelsen
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 19
NoRDIC TANkERS

Dry dock
195m x 34m x 7m
Crane capacity
50, 30 and 20 tonnes
Öresundsvarvet AB
Box 701
261 27 Landskrona
Sweden
– Always at your disposal
Capacity
West Quay 130 and 90 tonnes
The 130 tonne crane also serves
the South Quay
Phone +46 418 565 80
Fax +46 418 565 89
info@oresundsvarvet.se
www.oresundsvarvet.se
Quays
West Quay: Length 260 m, depth 8 m
North Quay: Length 115 m, depth 6 m
South Quay: Length 260 m, depth 7 m
Telephone (outside offic hours)
Phone +46 (0) 70 565 80 68
+46 (0) 70 565 80 15
+46 (0) 70 565 80 97
+46 (0) 73 765 65 01
www.oresundsvarvet.se

Shipping
and Ship
Management
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 21
Pär-HENrIk SjöSTröM
Editor: Dag Bakka Jr
The Blue North � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 22
Lessons to be learned in anchor handling � � � � � � � � � � � � � � � � � � 26
Cultural differences: strength or burden? � � � � � � � � � � � � � � � � � � 30
DK Adding another record-breaking year � � � � � � � � � � � � � � � � � 32
Erria: A one-stop-shop in global shipping � � � � � � � � � � � � � � � � � � 34
EE Fleets are modernising � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 36
Merging Tallink and Silja � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 40
LV LASCO renewing � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 44
LT The three big ones keep to their own flag � � � � � � � � � � � � � 46
Lithuania’s successful lobbying � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 48
FI Growth at last � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 52
Several newcomers under the Finnish flag � � � � � � � � � � � � � � � � � 54
DE Owners come to grips with manning problems � � � � � � � 58
Expansion all round as Hapag-Lloyd clouds the issue � � � � � 60
NO A time for growth � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 64
What is Norwegian? � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 65
On deferred taxes and political failure � � � � � � � � � � � � � � � � � � � � � 67
RU Law on second register ineffective � � � � � � � � � � � � � � � � � � � � � 70
Kremlin consolidating its tanker assets � � � � � � � � � � � � � � � � � � � � � 72
SE Tonnage tax still the big issue � � � � � � � � � � � � � � � � � � � � � � � � � � � 74

SHIPPING AND SHIP MANAGEMENT
The Blue North
The Nordic Baltic Sea Range (NBSR) comprises the northern part of Europe,
a region spanning from Germany to the Arctic and from the North Sea to St
Petersburg and the Kara Sea. It is a large and diverse area that in a maritime
context stands out as one of the world’s leading industry clusters in terms of
commercial shipping, maritime technology, maritime offshore, operational
competence and support industries.
It is also a region largely dependent on
maritime transport, for foreign trade,
domestic distribution and travelling. The
mere geography of the region makes sea
links essential for the wider economy, for
logistic systems and eventually for the total
competitiveness of the industries.
As a regional maritime community, the
NBSR displays an impressive volume and
complexity in trade, ports, logistic systems,
shipping companies, shipbrokers,
technology and shipbuilding, finance
and insurance, maritime competence and
education. In itself, the region’s maritime
cluster of industries is directly employing
some 250,000–300,000 persons, with wider
implication for hundreds of thousands of
other jobs.
It is estimated that the shipping cluster
22 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

in the NBSR area has commercial control
of some 15 per cent of the global merchant
fleet, not including Germany. The
area is home to the world’s largest players
in liner services, crude oil tankers, gas carriers,
chemical carriers, ro-ro services, car
transportation, forest products shipping,
cement transportation, shortsea bulk, etc.
The cluster includes some large groups of
dry and wet bulk carriers, but much of the
strength is found within industrial shipping
Pär-HENrIk SjöSTröM
like liner services, chemical transport, car
logistics, etc. There is also a growing sector
of maritime offshore support services in
the global market.
Germany has sailed up
to become the third largest
maritime nation
in the world, and the
Danes are striving to make
Copenhagen the shipping
centre of Northern Europe.
Some of the leading shipbroker firms
are based in Scandinavia, as are the largest
shipping banks and some of the leading
marine insurance institutions. Europe’s
largest shipbuilding group is domiciled in
the region, with a strong sector of maritime
technology and support services.
Broad span
The maritime businesses in the region
span some diverse communities, each
with its focus and character. Germany
and Denmark have their strength in liner
shipping; both displaying vibrant growth
as Germany has sailed up to become
the third largest maritime nation in the
world, and the Danes are striving to
make Copenhagen the shipping centre of
Northern Europe.
Norway displays its traditional diversity
of shipping and offshore, Sweden
has benefited from well-timed investment
in tankers. Finland is largely status
quo, Estonia has seen Tallink expand to
become the largest ferry operator in the
Baltic. Latvia, Lithuania and Poland have
seen renewal of their fleets, while Russia’s
SHIPPING AND SHIP MANAGEMENT
ambitions are rising, particularly in the oil
and gas sector.
Poland and the Baltic states remain the
region’s main sources for skilled seafarers
as well as cost-efficient repair and maintenance.
Some German and Norwegian
shipowners have begun to hire experienced
Polish engineers as superintendents, based
in Poland but travelling wherever needed
for dry-docking or other jobs. This has
become a much sought-after competence,
and the local maritime community along
the southern shore of the Baltic – from
Szczecin to Tallinn – has for long been one
of Europe’s main areas for ship repair and
maintenance.
Taken strength
How has the region been able to utilize the
recent cycle of growth and strong demand
for shipping services?
For one thing: The shipping companies
have made money, and a surge in income
has stimulated ambition, attracted investors
and helped arranging financing. Since
2004, Nordic shipping companies have
invested some USD 75–77 billion in new
or second-hand ships. In addition comes
T/C deals for newbuildings with purchase
options, which may well add another few
billions.
Denmark and Germany, in particular,
have seen vibrant growth and high ambitions.
The German shipping financial
cluster has been riding the order boom
for large container vessels, spilling over
to bulk carriers, product tankers and even
offshore vessels. Danish shipbrokers and
chartering people are found all over the
world, and the commercial position of
companies like Clipper, Torm, Norden,
Eitzen and others have doubtless been
strengthened.
Not even the unexpected call for payment
of deferred taxes could dampen the
regained optimism and positive outlook
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 23

SHIPPING AND SHIP MANAGEMENT
within the Norwegian maritime community,
as commitment in new ships has
reached an all-time high level. Even the
interest in maritime education has been
rekindled as the industry has managed to
show its career potential.
In Sweden the unaccountable delay in
introducing a tonnage tax has led to a waitand-see
attitude. Meanwhile, new vessels
ordered in 2003/04 at reasonable prices are
now coming out from the shipyards. Commercially,
the larger players have become
stronger.
Finland as a nation has not taken much
interest in stimulating its maritime industries,
leaving its main foreign trade in the
hands of Dutch and other carriers. Shipping
companies in the Baltic countries and
Poland have all managed to renew tonnage
at higher prices.
Slowly harmonising
There is a slow but consistent process
towards introducing tonnage tax systems
based on the EU guidelines. Various versions
of the tonnage tax has been in operation
for years in Denmark and Norway; a
new beneficial system is replacing the old
one in Norway this year. Similarly, Poland
introduced its tonnage tax system last year,
as did Lithuania and Latvia.
In Sweden, where there has been a broad
political support for a tonnage tax, the
bureaucracy has been allowed to drag its
feet and avert the introduction for years.
This leaves Finland and Estonia, where
“shipping” seems to imply ferries and road
transport and the importance of a national
maritime community had gained little
political heed. Too bad, as both countries
are virtually islands as far as transport infrastructure
is concerned.
New opportunities
Some 15 years after the collapse of the
Soviet bloc, a new maritime industry
structure has evolved around the Baltic.
The strength has largely been skilled maritime
labour at reasonable costs, as well as
shipyards and repair facilities. This has
opened new opportunities for building
maritime competence that in time might
be developed to operational and technical
management, particularly based on close
links with the Scandinavian maritime
cluster.
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In Sweden, where there
has been a broad political
support for a tonnage tax,
the bureaucracy has been
allowed to drag its feet
and avert the introduction
for years.
Also, the shipping industry has survived
the painful transition from state-owned
giants to slimmer commercial operations,
and a new shipping industry focused on
shortsea shipping is developing along the
south coasts of the Baltic. The industry
structure has only been bolstered by the
recent cycle of strong markets. This promises
well for a continued development of
the maritime sector in the Nordic Baltic
region, serving efficient and environmentally
sound sea transport based on maritime
competence and commercial vigour.
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24 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

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SHIPPING AND SHIP MANAGEMENT
Lessons to be learned
in anchor handling
While struggling to set anchor # 2 for
the drilling rig Transocean Rather on
the Rosebank field, halfway between
the Shetlands and the Faroe Islands
on April 12, 2007, the supply vessel
Bourbon Dolphin capsized with the
loss of eight lives.
In the wake of the tragic loss of a modern
anchor-handling/tug/supply (AHTS) vessel
on a routine job, the Norwegian government
appointed an inquiry commission
to establish the full chain of events that
led to the calamity. The report, published
on March 28, 2008, did not point to any
specific reason for the loss, but found deficiencies
in the procedures and safety management
with all involved parties.
The rig move
The semi-submersible drilling rig Transocean
Rather was operating for Chevron
on the Rosebank field in April last year,
when five anchor-handlers were fixed for
shifting the rig from Location G to I. The
rig was owned by Transocean, a US-based
company that for the planning of the
move relied on the British consultants Tri-
dent. Because it was to be a complicated
rig move in the open North Atlantic at
a water depth of 1,100 metres, five large
anchor-handlers were contracted for the
job: Olympic Hercules, Highland Valiant,
Vidar Viking, Bourbon Dolphin and Sea
Lynx.
The rig move was controlled by a Towmaster
appointed by the operator, working
in collaboration with the Offshore Installation
Manager, the “captain” of the rig.
The operation did not proceed entirely
according to the Rig Move Plan. There
were problems in extracting the anchors at
26 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008
OlYMPIC SHIPPING

The Anchor Handling Tug Supply (AHTS) vessel Bourbon Dolphin, seen here entering lervick on the Shetland Islands,
just before being deployed on anchor handing duties northwest of Shetland, where she capsized.
Location G; equipment was damaged and
had to be replaced. Being moved to the
new location, six of the anchors were safely
set at points 3,000 metres from the rig, but
problems emerged with the last two, no
doubt because of deteriorating weather and
increasing currents.
There was a SW wind of 30–35 knots
blowing with waves of 3–3.5 metres in the
morning of April 12, but increasing. The
current was running at 3 knots in an easterly
direction. The largest vessel, the Olympic
Hercules, had problems with running
out anchor # 6 against wind and sea in the
morning and drifted some 400 metres off
the stipulated anchor beam line.
When the Bourbon Dolphin began to
run out the last anchor, # 3, in a NNW
direction at 0917 hours, she suffered a
slow progress. Despite using her full towing
power (180 tons bollard pull) and
thrusters, her progress halted towards
noon. At 1417 hrs, 1,200 metres of chain
was out, but she had been thrown 185
metres off the anchor beam. The thrusters
were beginning to overheat, and the engineer
repeatedly asked the bridge to reduce
output.
An effort to relieve the Bourbon Dolphin
by Highland Valour trying to “grapple”
the chain at 1610–1625 hrs was unsuccessful,
but led to a near-collision between
the vessels. As the Bourbon Dolphin at
this point was about 1,000 metres off the
anchor beam, the Towmaster instructed
her to head west to avoid fouling with the
anchor # 3.
The report found
deficiencies
in the procedures
and safety management
with all involved parties.
The exact chain of events from about
1645 is not clear, but the vessel changed
course toward west, the outer starboard
towage “pin” was detracted and the wire
slid over against the outer port “pin”. The
changed angle caused the Bourbon Dolphin
to heel 30 degrees to port; the starboard
main engine stopped and there was
a momentary black-out. In 15 seconds the
vessel righted herself, but heeled again –
to capsize.
Blame all around
The commission found several factors
contributing to the loss and points to deficiencies
with all the relevant parties, from
the designers to the company and the rig
SHIPPING AND SHIP MANAGEMENT
operators. Together, failure led to the lack,
disregard or violation of the required safety
barriers.
The vessel: During the construction
process, the A102-type vessel designed
and built by Ulstein Verft was fitted with
heavier winches than originally specified,
but without corresponding changes to the
stability documentation. This was known
by the technical staff at the yard and the
owners, but never conveyed to the officers
on board the vessel.
The crew soon discovered that the vessel
needed fuel tanks well filled to remain
stable.
The company: The company was criticized
for insufficient safety management
systems. There were no established procedures
for anchor-handling, no set routines
for overlap during crew shifts, no identified
requirements for competence beyond
the STCW, no training programs for operation
in deep waters and extreme conditions.
There was no total risk analysis for
rig moves, other than for personnel working
on the cargo deck.
The main point is that the internal quality
system failed to locate these deficiencies.
And neither did the DNV audit or, indeed,
the Maritime Safety Directorate.
The commission poses the issue whether
these deficiencies were of such a grave character
that the Bourbon Dolphin should
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 27
SHIPSPOTTING.COM

SHIPPING AND SHIP MANAGEMENT
had her safety management certificate
granted at all.
The crew: It appears that the top officers
were not sufficiently experienced with
anchor handling in deep waters. They had,
however, found out about stability shortcomings
and kept the fuel tanks as full as
possible. The anti-rolling system was kept
active during the operation.
The operator: The commission found
deficiencies in the operator’s procedures
on several points. There were no clear
criteria for risk analyses for planning and
implementation of rig moves. In particular,
there were not sufficient margins for static/
dynamic forces from wind, weather and
current during anchor-handling operations
in deep waters. The weather requirements
were not unequivocal, and the determination
of vessel criteria with regard to bollard
pull was not realistic.
Operational leadership: The operation
turned out to be more demanding and
time-consuming than originally planned.
The Rig Move Plan had to be departed
from on several occasions, but not in
accordance with the procedures set down
in the operator’s manuals and the plans for
the operation. The commission points to
the role of the OIM (rig “captain”), who
appears to merely have considered the safety
of his own vessel, not the entire operation.
The final part of the operation was
characterized by severe failings in safety
management. The Bourbon Dolphin tried
actively to solve its problem, while the
rig remained impassive and observant.
Work on anchor # 2 began under marginal
weather conditions, as proved by the
Olympic Hercules’ struggle with # 6. The
grappling by the Highland Valiant was carried
out in an improvised way, without any
risk analysis, and it failed. The OIM was
not kept updated on the operation, and he
did nothing to obtain information.
Although there was no break of regulations,
the commission finds it hard to
accept that the operator’s representative
(the Towmaster), who was in constant contact
with the vessels, did not take the moral
and human responsibility in ensuring that
the Bourbon Dolphin was operating safely
during the last phase of the operation.
Also, both the Towmaster and the Bourbon
Dolphin’s officers should have understood
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the consequences of the instructions and
proposals given.
Proposals
In the closing, the commission points to
several initiatives for improving the safety
level during anchor-handling operations:
• Specific stability regulations for anchorhandling/tug/supply
vessels.
• Consistency between construction
details and certification.
• Requirements to the shipowners’ safety
management system, including specific
procedures for anchor handling for all vessels.
• Better overlap routines for crew shifts.
• Identify the requirements for competence
and establish the relevant training courses.
• For operators to plan for realistic forces
of nature and introduce unequivocal
weather criteria for operations.
As so often, a tragedy at sea has a wide
set of causes, some direct and many indirect.
The inquiry into the loss of Bourbon
Dolphin has provided valuable lessons that
will have consequence for anchor handling
and rig move operations in the future.
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28 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

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SHIPPING AND SHIP MANAGEMENT
Jan Horck at the World Maritime University.
Average claims cost for groundings
up by 148 per cent compared to 2000,
collisions up by 123 per cent and
engine claims up by 89 per cent.
It is a dark picture that the Norwegian Hull
Club paints and their voice is just one in
a growing choir expressing deep concern
over where maritime safety is heading
when human error is becoming an increasingly
important factor.
According to the Norwegian Hull Club
claims from accidents caused by human
error are rising at a rate never seen before,
the major reason being the lack of qualified
seafarers.
But there is more to being a qualified
officer than having experience from the
handling of a ship, its cargo and its engines
and equipment.
Between 85–95 per cent of the world’s
seafarers are estimated to work on vessels
manned by crews with two or more nationalities.
Lack of understanding of each
other’s cultural differences and poor language
skills have become the root to many
accidents at sea. Crew management and
team building are essential factors for the
safe operation of a vessel and this requires
Jan Horck (second from the left) on a field study with some of the students from WMU.
Cultural differences:
strength or burden?
knowledge, perception and experience not
only within onboard management but also
in shore-based organisation and its support
functions.
”Cultural awareness is a maritime safety
issue that must be raised already at the
maritime education and training institution”,
says Jan Horck, who has many years
of experience as a lecturer and today is
associated professor at the World Maritime
University in Malmö.
Wrong stereotyping
In his master thesis ‘A mixed crew complement’
Horck writes that it is not only substandard
communication that lies behind
accidents but also a lack of cultural awareness
and ‘wrong’ stereotyping.
Horck criticizes the industry for not
being capable of coping with diversity or
hesitating to balance possible advantages
with possible risks. Mixed crew is a fact
of life and a consequence of the shipping
industry’s need to keep costs down.
It is not a choice based on any experience
showing that multi-cultural crews in any
way are better at operating ships.
Horck argues that the mixed-crew concept
is not ideal but can work and can also
Cultural awareness
is a maritime safety issue
that must be raised already
at the maritime education.
be a positive and interesting challenge. People
tend to be cautious or even hostile to
the unknown, and therefore officers should
be introduced to cultural differences in a
planned manner during their training.
Other problems
Jan Horck urges the world’s maritime education
and training institutions to introduce
cultural awareness courses and to
increase teaching efforts in English. But it
is not only the MET institutions that have
to act. If mixed crew is to become a more
rare factor in the marine causality causes
statistics, the shipping industry also must
address other problems, such as those arising
from mixed crew on vessels with low
manning levels and long onboard work
periods. Try for instance to imagine working
and living for six to eight months in
a community with just 12–15 inhabitants
without any one being your friend.
”An unhappy seafarer is an unsafe seafarer”,
says Jan Horck.
text and photos: rolf p nilsson
Footnote:
Jan Horck’s master thesis ‘A mixed crew
complement’ can be downloaded at:
http://hdl.handle.net/2043/5962
30 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

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SHIPPING AND SHIP MANAGEMENT
The Torm Moselle is one of the former OMI tankers. Here dressed up as a Torm tanker leaving the shipyard
at El Ferrol, Spain, after repainting.
adding another
record-breaking year
Maritime Denmark in general can look
back at another year so good that it
overrides the previous record year.
The Danish shipping companies have
had very good timing on ordering
new ships to get their fair share of
the boom in the shipping market
right now. And it will continue for the
coming years – if the market continues
to rise steadily.
Denmark
At present the order book for the benefit
of Danish owners has never been bigger.
In mid-2007, Danish owners had ordered
A number of the bigger
companies have earned
a greater profit than ever
in their history.
all told 303 vessels of a total deadweight
of 14.8 million tons, which is more than
the present fleet under the Danish flag.
The Danish flagged fleet at the end of 2007
had 499 vessels at a total of 10.9 million
DWT. This was again a little bit up from
2006, when the figures were 506 vessels at
10.3 million DWT. It shows the general
tendency that the vessels become fewer,
but in general bigger.
Half under Danish flag
The figure only counts for the Danish
flagged fleet, but the minister for Business
Affairs Bendt Bendtsen usually puts it this
way: Half of the fleet sails under Dannebrog
(the Danish flag).
That is certainly another way of expressing
the fact that merely half of the Danish fleet
sails under the Danish flag, while the other
half is spread over a variety of flags worldwide,
with Singapore and England as some
of the major holders of Danish tonnage.
32 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

ZEE-PHOTO
Over the past year a number of the bigger
companies have earned a greater profit
than ever in their history. This goes for the
two old companies D/S Torm and D/S
Norden. D/S Torm enlarged their fleet
with 26 tankers bought from US Omi Corporation
and invested in 50 per cent of
the company F8, while Norden ‘just’ took
delivery of a fleet of new ships from Japan
and China. Some were sold again on delivery,
with a huge profit to cash in and use
on new orders in the Far East.
Danish owners
and operators control seven
per cent of the world fleet.
The great blue company A. P. Møller-
Mærsk has been putting a lot of effort
into implementing the P&O Nedlloyd and
adjusting the Maersk Line after a massive
loss in 2006, but has taken delivery of a
large number of container ships and drilling
rigs ordered way back.
The subsidiary Svitzer A/S has also
been lying low in 2007 after the purchase
of Adsteam, adding some 250 tugs to the
fleet now comprising some 500 units on a
worldwide basis. But there is no doubt that
the company’s management is looking for
the next purchase of a tug company and
is steadily holding an order portfolio of
30–40 tugs from Singaporean and Chinese
shipyards.
Being ready for the next takeover is
also what the managements for both D/S
Norden and D/S Torm have been talking
about. Both companies have a solid
amount of cash and sufficient finance to
buy whatever comes up.
Coasters out
In the smaller segment, the traditional
coaster is nearly history in the Danish fleet.
2007 and the beginning of 2008 was another
period where a number of coasters were
sold off to Mediterranean and South Amer-
The Adsteam Shotly is one of the 300 tugs that Svitzer purchased with Adsteam.
bENT MIkkElSEN
SHIPPING AND SHIP MANAGEMENT
The Poseidon is one of the coasters that left the Danish flag and Danish waters for a new life
by the coast of Chile.
ican owners. A couple of newer handy-size
ships (more than 5,000 DWT) have been
purchased by traditional coaster owners for
operation under other flag than the Danish.
The Dantic, at 1,200 DWT and built
in 1981, seems to be the odd exception in
the business. She was purchased by C. J.
Helt & Co in Svendborg from a German
owner for sailing under the Saint Vincent
& Grenadines flag.
In the smaller segment there are often
special units that have been purchased for
Danish operation. A German river-going
coaster has been bought to be rebuilt as
a dredger and a former oceanographic
research vessel has come to the Danish flag
to be a crew change vessel for the expanding
Esvagt A/S in Esbjerg, which in that
way also belongs to the A. P. Møller-Mærsk
family.
So there is no doubt that Danish owners
are trying their luck and thereby supporting
the Danish minister Bendt Bendtsen,
who wants to turn Denmark into the leading
maritime nation in Europe by 2015.
So far Danish owners hold three per
cent of world tonnage. Five per cent of
world orders have been signed by Danish
owners. Danish owners and operators
control seven per cent of the world fleet,
and finally Danish owners and operators
lift ten per cent of the world’s total transportation.
bent mikkelsen
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 33

ENT MIkkElSEN
SHIPPING AND SHIP MANAGEMENT
The Ingrid Jakobsen was one of three tankers purchased from Jens Jakobsen A/S in 2006.
erria: a one-stop-shop
in global shipping
Erria A/S is the name of the umbrella
that contains a number of Danish
companies with relations to shipping.
Some years ago they were gathered
under the one umbrella, selling a
number of services to a variety of
customers.
“We say that Erria is a one-stop-shop. We
can provide a number of services needed
in modern shipping, ranging from drawing
up the first lines on a new ship to the
actual commercial management after delivery.
Every kind of service in between these
two points can be delivered from Erria
offices in several countries”, says Henrik
Andersen, CEO of Erria.
“We could say that what we have is what
is usually available in a bigger shipping
company, but the difference is that we sell
each service from the house to whoever
knocks on our door needing help”, says
Henrik Andersen.
The umbrella Erria contains a number
of companies purchased by Erria, the
former Fabricius Shipping in Marstal. The
commercial company in the group is Ibex
Maritime, situated in Istanbul and headed
by Danish Kenneth Madsen. The techni-
cal side is the former BR Marine Consult,
which also was sold into Erria and still
headed by Torben Ravn. The latest addition
to Erria is the purchase of the Vietnamese
company Pacific Tanker Shipping.
Originally, Fabri cius Shipping was a shipowning
company founded by captain Jan
Fabricius, but the company developed into
a combination of shipown-
ing and management
of tonnage from other
companies. The company
still has this kind
of business, but has
made changes when it
comes to chemical tankers
of sizes up to 12,000
DWT. In this particular
segment Erria is a strong
player as shipowner and
Henrik Andersen,
CEO of
Erria.
has taken the consequences of this decision
by giving notice to several out-house customers
with chemical tankers.
“We have asked some owners of chemical
tankers to find a new manager for the
ships. There are several reasons for this
step. One of them is our commitment in
the market to our own ships, but also we
want to be without attachments in our
commercial work in the market”, explains
Henrik Andersen.
Malta registry
The chemical tanker segment started by
ordering a newbuilding from one of the
Turkish shipyards in Tuzla some years ago,
with Ibex Maritime as mediator. This step
If we had chosen
the Danish flag we would
be very much restricted
in the use of captains
on board the vessels.
was followed by the purchase of the shipowning
company Jens Jakobsen in Denmark
and the takeover of two chemical
tankers running and a third under outfitting
in China.
The present fleet of chemical tankers is
on 12 tankers and another one on order
from Tuzla, Turkey. The tankers have an
average age of 4.1 years. The major part
34 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008
Erria

of the ships has been sold on shares in
Denmark. Basically the ships are owned
by single ship companies on a K/S basis
and up to 70 per cent has been sold externally.
All tankers are managed from the
Malta based shipowning company called
Erria Tankers Ltd. registered in Valletta,
Malta.
“Our purpose by using the Maltese flag
is to secure flexibility in crewing. If we
had chosen the Danish flag we would be
very much restricted in the use of captains
on board the vessels”, explains Henrik
Andersen.
Mainly Polish crews
Erria A/S mainly uses Polish crews on the
chemical tankers, while the dry cargo (container
carriers) in management primarily
use Ukrainian crews via the international
company V-ships. The Polish seafarers are
as hard to get as any other skilled seafarers
nowadays.
“Oh, yes, they know exactly what they
are worth and what the market value
for crew is today. And they don’t come
cheap in the present market”, says Henrik
Andersen.
The crew are hired on a contract basis,
which means for one term at sea on each
contract, but Erria has worked out a kind
of loyalty reward so that the particular seafarer
gets a little higher salary on his next
contract in order to make him come back
to Erria.
“It seems that this system is fit for the
market of seafarers in Poland instead of
having them hired on constantly. In our
effort to commit seafarers to our fleet we
invite them to officer seminars with their
wives, so when the husband is being educated
and trained we arrange excursions
for the wives, who get an impression of
the Danish countryside and cultural institutions
in the meantime and on top there
is a common dinner in the evening. This
generates a sort of family attachment to
Erria and we believe that the human values
will have a strong say in the future
recruitment campaigns”, says Henrik
Andersen.
“But so far we have managed to recruit
the necessary crew to our fleet”, the CEO
adds.
Delicate technical department
The technical department is the former BR
Marine Consult, which was founded by
Torben Ravn (and a partner Bendtsen, who
left at an early stage.
Bendtsen Ravn = BR).
His business is now an
integrated part of the
Erria Group.
“Our technical
department could be
the only department
with a sort of delicacy
towards the outside
customers. If one of
the external customers
asks me or one of my
employees to go for a survey of a chemical
tanker that they want to purchase, we close
down with watertight bulkheads between
our department and the rest of the group.
We are very much aware that there should
be full privacy in their commitment
toward us. Even at the management meetings
I sometimes have to say that I am
working on a ship, not which ship or who
the customer is”, says Torben Ravn.
The technical department is in charge
of the specifications for the newbuilding
under construction, but also for the supervision
during the building of the ships. In
fact the department is responsible for the
ship all the way to delivery and approval
by the oil majors.
“The approval is an important part of
the process on a new tanker today, and
this particular approval is one of competences
that have high priority”, says Torben
Ravn.
All the others
Erria Group still has a number of container
carriers in management for outside
customers like Hansen & Lange, as well
Erria
Torben Ravn,
head of the
technical
department
of Erria.
as some traditional dry cargo coasters for
Erik B. Kromann, H. Folmer & Co. Erria
A/S stepped in last year, when H. Folmer
& Co had their DOC company approval
withdrawn by the Danish Maritime
Authorities and needed the help to continue
sailing.
“It was a case where a customer needed
immediate help and we provided it at
once, preventing the ships from being
laid up all over the globe awaiting new
approval”, says Henrik Andersen.
Since the change the Folmer vessels have
been sailing around without any major
problems with the authorities.
History
Erria was founded in Marstal on the isle
of Ærø in 1988 by captain Jan Fabricius,
taking over a coaster of 1,200 DWT. The
coaster fleet was the main target for the
business for a number of years, but as the
fleet declined the units in the container
segment became bigger.
In the 1990s Jan Fabricius sold part of
the company to external investors, leading
to the complete sale of the business
in 2004. The present management decided
to move the major part of the business
from Marstal to Kastrup in an office
building only two kilometres from Kastrup
Airport, as the gateway to the outside
world.
“We are somewhat sorry that we moved
away from Marstal, but I must say that it
has cut down on the time used for travelling”,
explains Henrik Andersen.
“Marstal is a complicated place when
you have a global market place”, he adds.
bent mikkelsen
The Erria Helen is one of the new chemical tankers from Tuzla, Turkey, to the Malta registered
company Erria Tankers.
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 35
bENT MIkkElSEN
SHIPPING AND SHIP MANAGEMENT

MADlI VITISMANN SHIPPING AND SHIP MANAGEMENT
When the Viking XPRS (left) called at Tallinn for the first time April 28, the Superstar (centre) had already been there
in traffic for a week. The Nordlandia (right) keeps up the competition on the Tallinn–Helsinki run.
Fleets are modernising
New ships will be built for several
Estonian shipowners this year in
spite of the fact that shipping aid
has become maritime aid and that
only EEK 1.8 million was actually paid
out of the 30 million allocated to
support shipping. Nevertheless, some
shipowners are ordering new ships
and selling older ones.
Estonia
All six companies involved in passenger
transport in the Gulf of Finland are still in
competition, but they are replacing their
ships with more modern ones.
Last spring Tallink introduced Star, a
large and fast ferry, which travels on the
Tallinn-Helsinki route all year round. This
year Superstar joined it. At the beginning
of the summer the Baltic Princess, painted
in various shades of red, will replace Gal-
axy, a cruise ferry adorned with blue sky
and clouds, which will be leaving for the
Turku–Stockholm route.
The keel for the next cruise ferry has also
been laid. The company has sold the ropax
ship Sky Wind, the ferries Meloodia
(ex Mare Balticum, ex Diana II) and Fantaasia.
The fast ferry Tallink Autoexpress 2
was provided for charter to Venezuela and
the Superfast IX to Canada.
The keel for the first of the three new
ferries of the Saaremaa Shipping Company
will be laid in May. Last year the majority
shareholder of the company decided to
gather all its companies under the name
Tuule Grupp.
Tallink’s competitors survive
Only a week after delivery of Superstar,
Viking Line started to operate its new ferry,
Viking XPRS. Linda Line has sold its
hydrofoil Jaanika and is awaiting another
ship like the Merilin, a larger and more seaworthy
fast ferry.
Eckerö Line and Nordic Jetline are continuing
as before. Half of Sea Containers
Finland Oy, which operates the Superseacats,
has been sold to Greece, but two fast
ferries will continue transporting passengers
from Tallinn to Helsinki. Copterline,
a competitor of the fast ferry companies,
has relaunched flights between the ports
of Tallinn and Helsinki after a three-year
hiatus, but with a helicopter of a different
type.
Since Estonia became a member of the
Schengen visa space, travelling by ship has
become more convenient as there are no
longer any passport queues in ports. This
benefit was first felt at the end of 2007;
before then the number of passengers on
the Tallinn–Helsinki route had dropped by
169,000.
However, the remaining 6.5 million pas-
36 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

sengers is plenty for all of the shipping
companies and none of the six is willing
to quit the route. It is likely that Tallink’s
market share will increase if the company
is able to offer seven round trips (i.e. transporting
up to 26,000 passengers) per day
The Sillamäe–Kotka route of the Saaremaa
Shipping Company had to be closed
down and the Vironia, which operated on
the route, was sold to Poland. The Stella
Company Group (Finland) has promised
to introduced their own service on the
route, but will not do so this year.
Since Estonia became
a member of the Schengen
visa space, travelling
by ship has become more
convenient.
The sale of Baltic Scandinavian Lines to
the port owner should strengthen the Paldiski–Kapellskär
route as well as the Paldiski
Northern Port, from which Via Mare currently
departs.
Albeit not under the Estonian flag,
Hansa Shipping will get a fifth vessel, but
according to CEO Andres Vahi, Hansabank
also accepts the Maltese flag when
granting loans, and it is less expensive to
pay dividends out of Maltese subsidiaries.
The pay of seafarers is also higher under
the Estonian flag and therefore the Estonian
flag is not suitable for the company.
Tanel Kannel, a project manager of Hansa
Leasing, confirms that recognised international
registers are often more convenient
for the bank than the Estonian flag.
Navirail will open its cargo route
between the Port of Sompasaari in Helsinki
and the Port of Muuga near Tallinn using
the ro-ro ship Ahtela so that customers can
avoid the tiresome transportation of goods
through both city centres. Two new Amico
container vessels of ice class 1A Super will
be completed next year. The speed of the
167 m long vessels is 19 knots and they
can accommodate 1,404 TEU. It is highly
unlikely that the company, who already
has five ships sailing under different flags,
will register these two vessels in Estonia.
Eestinova has commissioned vessels of
89.99 m in length and 4,570 DWT. Emi
Proud will be completed this year and Emi
Leader next year, and they can also accommodate
140 TEU containers. These ships
will be sailing under the Maltese flag.
Estonian ship owners control up to 60
cargo vessels, but only five of them sail
under the Estonian flag. There is a current
account deficit in Estonia, but for instance
only a fraction of the app. EUR 600 million
paid for maritime services on the
Muuga-Rotterdam route reaches Estonia.
The Estonian Shipping Company
(ESCO) has not recently commissioned
any shipbuilding, but according to board
member Jaan Kalmus, it has been under
serious consideration. In the current market
situation the company would only receive
a new ship in five years – the waiting list
for main engines alone is said to be three
years. Estonian shipowners are monitoring
the resale market, but the prices are not yet
sufficiently favourable.
A bit of support to some
Quite recently it was unclear what would
become of the shipping aid allocated for
2006, which could not be distributed due
to shortcomings in the guidelines. Therefore
it is no surprise that the Ministry of
Economic Affairs and Communications
decided to replace the word ‘shipping’ with
‘maritime’, which is a broader word, and
directed EEK 30 million in aid allocated
for 2007 to marinas.
However, Enterprise Estonia announced
in April that it will attempt to pay the
remaining EEK 28 million of 2006 aid to
cargo shipping companies to cover the
social tax they paid last year. The requirement
of visiting Estonian ports was left out
of the guidelines. Thus, an Estonian shipowner
can apply for support for a vessel
travelling between foreign ports.
The state is being cautious in other areas
as well: it is being left to shipowners to
resolve the problem of some of the food
expenses for the seafarers’ taxation. Jaan
Kalmus, a member of the board of ESCO,
explains that a shipowner does not earn anything
from it, but does not want to pay taxes
to ensure that seafarers are not hungry.
However, it is difficult to explain to officials
that a shipowner must follow to the
convention regardless of the rising food
prices. The current tax-free limit of EUR 6
per seafarer per day is too narrow for cargo
vessels.
The fact that Estonian state authorities
and politicians do not understand the
importance of the maritime industry is a
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SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 37

SHIPPING AND SHIP MANAGEMENT
problem that has long been known. There
are still no signs of improvement.
For years Enn Kreem, the secretary-general
of the Estonian Shipowners Association,
has explained shipping problems and
looked for access to the political decisionmaking
process, but been forced to admit
that no one has any sympathy for shipowners’
problems. During the approval round,
the Merchant Shipping Bill was put on
hold because it contained support for shipping.
The bill may find little understanding
even if it reaches the Riigikogu, because
unlike in the Lithuanian parliament, there
are no more than two maritime industry
experts in the Estonian parliament.
Not interested
One of them is new to politics, while the
other is a member of the opposition. There
simply cannot be any dialogue with other
MPs, because they are not interested in the
maritime industry.
The Economic Affairs Committee of the
parliament attends primarily to land transport,
and it is too much to expect Estonian
decision-makers to recall sea transport
when they hear the word “transport”.
In their attempts to explain maritime
industry problems to politicians, the maritime
organisations have tried a number of
options. Since maritime industry problems
touch on the jurisdictions of nine ministries,
Estonia’s maritime experts have tried
to push through the establishment of a
governmental Maritime Council, but have
not succeeded.
The mightiest lobby group, the Maritime
Advisory Committee, consisting
of Estonian maritime professionals who
know public governance as well as the
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SHIPPING AND SHIP MANAGEMENT
Kadri Land flanked by Maria Jusélius and Tobias Magnusson on board the Silja Symphony.
40 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

Merging Tallink and Silja
Kadri Land, Director of Tallink Silja AB,
often travels by sea because she now
has homes both in Stockholm and
Tallinn. She considers it an important
way of retaining close and direct
connections between the head offi ce
and the subsidiary company.
Beneath the windows of the Tallink Silja
offi ce at Värtahamnen is the starting
point of four shipping lines; the fi fth sets
out from Kapellskär. The ships are operated
under four different fl ags. Is it not
diffi cult to coordinate such an arrangement?
“We are a subsidiary company and most
things are taken care of by the corresponding
departments of the head offi ce.”
So are they all different – ships come
from different places, and crews and fl ags
too?
“No, not exactly. Ships from Stockholm
go to Turku, Helsinki, Tallinn and
Riga, and from Kapellskär to Paldiski.
Three vessels are under the Swedish fl ag:
the Silja Symphony, the Silja Festival and
the Sea Wind. These ships are manned by
the Swedish side, Tallink Silja AB, but the
Tallink Group is nevertheless the ship owner.
We (Tallink silja AB) do not own these
When you have no choice
but to amputate,
you do it all in one go.
vessels; they are managed by HT Ship
Management in Tallinn.”
The junction in Stockholm is
noteworthy because you coordinate
voyages in fi ve directions.
Every evening four large vessels
depart in four different
directions under four different
fl ags. How did you manage
to arrange all of this?
“The ships that sail under
the Latvian, Estonian and Finnish
fl ags have nothing to do
with the Swedish offi ce. We only
deal with port-related issues. For
instance, the ship that sails under
the Estonian fl ag only interests
me in connection with port
activities: tickets sales, stevedoring,
etc. We cooperate with the
crews, but nothing more than that.
All other issues are addressed in
Tallinn. Vessels sailing under the
Latvian fl ag are dealt with in Riga,
and in Tallinn too, because some
of the offi cers are Estonians.
Straightforward daily operation
issues are solved
in the country of
the fl ag the
SHIPPING AND SHIP MANAGEMENT
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 41

SHIPPING AND SHIP MANAGEMENT
Kadri Land with the multinational team of her office.
ship sails under. This is where the crews are
employed.
We are a sales office and our primary
goal is to fill the ships with passengers in
Sweden. An additional function of the
office is to man the vessels under the Swedish
flag.”
Are the passengers using your lines the
same or different?
“Our customers choose voyages for different
purposes. For instance, those travelling
to Turku are mostly interested in the seagoing
experience: the views of the islands,
nice restaurant meals and the other onboard
entertainment. They do not actually disembark
in Turku and simply return the same
way. On the other hand, the people who
travel to Riga tend to be interested in the
destination. The voyage itself is fun as well,
of course, otherwise they would fly.”
You used to be the director of Tallink
AB and you were entrusted with the task
of merging the two Stockholm offices.
What was the most difficult aspect of
doing so?
“We suddenly, and inevitably, had two
of everybody: two secretaries, two marketing
managers, and double the number of
lots of other employees. The problem was
that Swedish legislation in such instances
favours those who have been with the
company longer and dismissals therefore
affect newcomers first and foremost. Silja
employees therefore enjoyed a clear advantage
as Tallink had operated in Sweden for
a much shorter period.
Dismissals are always painful but I
believe the decision should be made at
once, without delay, not two workers one
month and another couple the next. Procrastination
creates more insecurity and
people are no longer motivated to perform.
When you have no choice but to amputate,
you do it all in one go.”
So in essence this finetuned
system protects those
who to some degree lack
initiative or are lazy.
Have any dismissed employees
expressed their frustration through acts
of discontent?
“No, they left in a dignified manner.
Naturally they were sad to leave the company
where they had worked for many
years. In some cases it has actually proved
to be a useful experience for them, serving
as a wake-up call of sorts, liberation from
a routine that had lasted for up to twenty
years. Having found themselves in a new
situation, they had to review their abilities
and possibilities. Quite a few of them actually
got better jobs, something they would
have never searched for had they stayed
with our company.
In that sense our dismissals came at
the right time, since they coincided with
a time of great flexibility on the Swedish
labour market. I have not heard of a former
employee who has not found another job.
When we later needed to recruit new staff
and tried to invite some of the former
employees to return to the company, we
were too late, as they had found new jobs
and were satisfied with them. But the period
of dismissals was still a bitter experience.”
You are a Swedish employer and therefore
surely have a lot of dealings with the
trade union. Has it ever been the case
that you were forced to dismiss someone
you needed and kept someone you were
told to retain?
“It has never been that drastic. Some
employees had to go because, for instance,
the new structure had other language
requirements for the position. Certainly
the trade union has played an important
part. You need to meet trade union representatives
not once, but two, three, as many
as ten times to iron out all of the details.
The reality is that the employers usually
get what they want. You have to be able to
argue your points well, explain the reasons.
It is great that someone is there to support
employees: one day we are employers,
the next we could be employees ourselves.
We like it when our interests are protected.
But you’ve got to draw the line somewhere.
Adopting a rigid stance can in fact damage
your company.
When we are obliged to favour those
employees who have been with the company
for many years, some of them will
invariably be those who are not likely to
be employed anywhere else or couldn’t be
bothered going elsewhere. So in essence
this fine-tuned system protects those who
42 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

to some degree lack initiative or are lazy,
providing them with an easy opportunity
to remain where they are. They are perfectly
aware of this and there is nothing much
you can do about it.”
What are the greatest changes introduced
at Silja by Tallink? Is Silja losing
part of its identity?
“The goal of Silja is exactly the same as
the goal of Tallink: to offer sea voyages
to anyone interested in them. The how
bit comes after that: how much entertainment
we offer to the passengers, how many
restaurants are on the ship and so on. But
that’s just the fine print. The overall goal
remains essentially the same.”
Silja used to offer luxury voyages to
the ‘better class of people’. Tallink has
always stressed the need to earn as much
profit as possible with the lowest running
costs possible.
“Yes, looking back 10–15 years I recall
the image of Silja as being more refined and
luxurious compared to Viking. But times
have changed. People nowadays probably
consider refinement and luxury to be of
little importance. Look at how money is
made: 15 years ago we didn’t have IT spe-
5O years
cialists with pigtail earning millions. Now
we do, but they are not interested in fancy
chandeliers and all that elegant stuff. Their
lives are quite different: they are busy, they
have other preferences.
So not only has Tallink not changed Silja,
but time has changed both Tallink and
Silja. The difference between the two lies
in the fact that Tallink is faster and more
flexible and places less emphasis on external
glamour than Silja did.
There are nevertheless different mindsets
on Silja and Tallink ships. I envisage
a future system of rotation for all our
employees where they can work just as well
on any of the ships, since we are all one
big European Union now. There should be
no intrinsic differences depending on the
route you’re sailing.
The rotation could involve our captains
as well – one voyage on the Stockholm–
Helsinki route, another on the Stockholm–
Riga line and so on. Such opportunities
should exist.”
How is that possible when pilotage certificates
are issued for definite lines?
“They would have time to pass new
exams and enjoy the additional opportuni-
1958 - 2008
of successful performance
TÄRNTANK
SHIPPING AND SHIP MANAGEMENT
ties. Why not! A captain would no longer
work on the same line for 30 years but
would instead take charge of different vessels
on different lines. I’m sure they would
find it interesting. It would also be good
for the company: more people to choose
from. It would result in a stronger feeling
of unity. But I do understand that it is a
question of time.”
How much?
“We will never become identical, because
we keep saying: ‘We did it this way!’ The
past is a part of our lives and it will not
just go away. For us to no longer express
surprise – ‘Hey, look, they do it this way
on Silja ships! Why?!’ – it will take two or
three more years. In that time we will get to
know one another, on the personal level.”
So on which side of the Baltic Sea is
your true home now?
“Both sides. I’m the link between the
head office and the branch office, so staying
in Sweden would not yield the desired
result. Following the chain of command is
easy enough, but face-to-face discussions
are essential as well.”
text: madli vitismann
photos: tiit mõtus
MT TARNBRIS
REDERI AB
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 43
www.tarntank.se

LASCO SHIPPING AND SHIP MANAGEMENT
Launching of the Uzava, which was delivered to LASCO from the 3. Maj Shipyard in Croatia this year.
LaSCO renewing
The Latvian Shipping Company
(LASCO) is about to complete its fleet
modernisation programme, and goes
on to order more new ships. Unimars
has placed a newbuilding order as
well. Tallink intends to replace ships
on a successful route.
Latvia
LASCO has received nine out of ten tankers
that were ordered from 3. Maj Shipyard
in Croatia and all four tankers ordered from
Hyundai Mipo Dockyard. Last year the
Usma and the Piltene (52,600 DWT) from
Croatia and the Kandava, the Kazdanga
and the Krisjanis Valdemars (37,200 DWT)
from South Korea were added to its fleet.
This year the Uzava and the Salacgriva
have been delivered and the last sister ship
will be completed before the end of the
year. At the same time LASCO has sold
the reefer Akademikis Vavilovs and older
single hull tankers, leaving 15 such units in
its fleet. Older tankers are sailing under the
Liberian flag, while new ones under that of
the Marshall Islands.
Continuing its fleet modernisation, the
company has ordered four more tankers
(52,000 DWT) from Hyundai Mipo Dockyard.
Losses from fraud
Last summer the shipping company was
forced to notify the stock exchange that an
internal investigation had confirmed the
evidence unveiled in the criminal case initiated
in 2005.
It became evident that LASCO had suffered
losses of no less than USD 36 mil-
lion as a result of charter contracts with a
discount between certain shareholders and
some former officials on the one hand and
offshore companies on the other, by which
the latter chartered the ships at market rate
and directed the income past LASCO.
The shipping company has been declared
the injured party in this case. In February
this year the BizNews.lv portal published
a similar accusation of the former suspects
against the opposite party.
At the same time most of the members
of the Supervisory Council and management
were replaced. Eight of the twelve
members of the Supervisory Council are
new and only two members are not from
Ventspils. Three of the five members of the
Management Board were replaced.
The Chairman is Imants Sarmulis, a longterm
director of the Freeport of Ventspils,
44 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

and the remaining four members of the
Management Board are also from Ventspils.
Ventspils Nafta owns 49.94 per cent
of the shares and the offshore companies
who participated in the above mentioned
scheme held 27.55 per cent. The fact that
the company has put its focus outside Riga
is also confirmed by the fact that half of the
sponsorship objects are from Ventspils.
Most of LASCO’s ships have been time
chartered for a period of three months to
two years and last year the profits were as
high as in 2004.
Fleet modernised
The Unimars Group is ordering an entire
series of new ships. According to a contract
made with the MNP Group, the ships will
be completed through 2009–2010.
Four ships (length 90 m, width 14 m,
4,570 DWT) will be designed in Odessa
and built in Volgograd. The speed of these
general cargo vessels will be 11.5 knots and
they will be suitable for carrying dry bulk
as well as timber and containers. Group
company Unimars Shipping is operating
15 ships.
According to Andris Kljavins, the Presi-
dent of the Latvian Shipowners Association,
the main concern of Latvian shipowners
is how to modernise the fleet. Ships
are very expensive, but with the real estate
business declining, Latvian banks have now
turned their eyes to shipping.
The Latvian tonnage tax is competitive.
A new tendency is that larger management
companies are opening their branches in
Latvia in order to take advantage of the
tonnage tax as well as to hire good Latvian
seafarers.
The ships of Riga Shipping, which is
owned by Bergen Shipping, sail under the
Latvian flag. Riga Shipping is manning the
ships of Bergen Shipping as well as those
of other shipowners and oil drilling rigs.
For instance, Alpha Shipping is not using
Latvian flag.
However, Tallink is happy under the
Latvian flag. Hillard Taur, the CEO of
Tallink Latvija, says that the staff turnover
has decreased, the employees of the Riga–
Stockholm route are being taught Swedish
for the second year in a row and the port
itself has made some progress to make life
easier for passengers. The queues on the
border have shortened also owing to the
SHIPPING AND SHIP MANAGEMENT
LASCO’s first new tanker Ance, built 2006.
expansion of the Schengen area, although
the random cheques are very frequent.
Tallink introduced a second ship on the
route last spring and the number of travellers
through the Port of Riga is approaching
one million. However, DFDS Tor Line has
seen a decrease in the number of passengers
on the Riga-Lübeck route. In addition to
Mermaid II, which sails under the Latvian
flag, the company has leased Envoy under
the NIS flag. In addition to the Ventspils–
Nynäshamn route Scandlines also operates
from there to Rostock. DFDS Tor Line and
Scandlines have four ro-pax ships sailing
under the Latvian flag in total.
madli vitismann
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 45
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MADLI VITISMANN SHIPPING AND SHIP MANAGEMENT
the three big ones
keep to their own flag
LJL and Limarko ships sail all over the world, while DFDS LISCO’s liner traffic shows the ships in
their home port. The LISCO Optima calls at Klaipeda.
Lithuanian shipping companies
are not yet ordering new vessels,
but modernising their fleets more
modestly. They have been granted
a tonnage tax, but not yet an
exemption from the social tax.
However, the vessels of all three
larger companies remain under the
Lithuanian flag.
Lithuania
The Lithuanian Shipping Company (LJL)
is not ordering new vessels as it may be
facing another privatisation. According to
Vytautas Vismantas, the CEO of the stateowned
company, it would not be right to
enter any obligations for the new owner,
because they may have a different view of
things.
A shipbuilding investment programme
would tie their hands for several years. LJL
is therefore modernising its fleet by selling
its older vessels and purchasing newer
second-hand vessels.
It is unlikely that further privatisation
will happen this year. Before the company
may be sold, judicial proceedings must
be concluded between the state and Tri-
dent Marine, a candidate from the previous
privatisation round. The situation has
changed to such an extent since then, that
the former privatisation bid would not buy
a single decent cargo vessel this April.
Slowly but surely LJL has been able to
reduce the average age of its vessels: over
half were built in the 1990s. The vessels are
rarely seen in Lithuania – they carry their
cargo on distant seas where they have been
leased on short- and medium-term contracts.
This represents a more stable and
reliable income than the spot market.
Only shipping routes
LISCO Baltic Services has become DFDS
LISCO and is attempting to focus only on
route traffic.
That is why the company has allocated
four cargo vessels built between 1995 and
1998 which it received as part of the privatisation
process to its subsidiary Aura Shipping,
which, according to Lithuanian newspapers,
it is planning to sell. Five ro-pax
ships are sailing under the Lithuanian flag
on DFDS LISCO’s lines from Klaipeda to
Kiel and Karlshamn and on a combined
route to Sassnitz and Baltiyski, as well as
on the Riga–Lübeck route.
The oldest, the Vilnius, a rail ferry built
in 1987, can accommodate 1,700 lane
metres of railway cars, trailers and automobiles.
The newest, the LISCO Gloria (built
in 2002), has 2,500 lane metre capacity.
Need for capital
The general meeting of Limarko Shipping
Company decided to issue eleven million
new shares to raise ten per cent of the share
capital from the stock exchange. In addition
to 14 reefers the company has purchased
another container ship and is planning
to make further such purchases.
The America Feeder, which was built
in 1997, has a speed of 17 knots and has a
capacity of 545 TEU (including 144 reefer
containers), is operating in the Caribbean.
Limarko is modernising its reefer fleet,
selling older and buying newer vessels,
but it is also planning to expand its fleet.
According to Vytautas Lygnugaris, the
CEO of the Limarko Group, the success
of the company is based on the skilful use
of financial instruments and the improvement
of efficiency.
This has allowed it to invest EUR 60 million
over three years and to replace more
than a half of its fleet. However, Mr Lygnugaris
emphasises that the investments must
pay for themselves
He says that Limarko is benefitting from
the shipping boom on the world market
and has forecast a record-breaking year.
“Reduction of costs, more effective use
of funds, stricter financial policy, development
of the charter department, and of
course modernisation of the fleet... But to
be honest the growth in the global shipping
business has contributed a lot too!”
He emphasises the fact that the purchasing
of all of the ships was financed through
Lithuanian banks:
“Ten years ago our banks weren’t very
familiar with the shipping business. Now
they know their way around it. They know
what is happening on the market and they
are able to perform proper analysis. We’ve
become equal partners. After all, business
is still done between people.”
madli vitismann
46 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

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MADLI VITISMANN SHIPPING AND SHIP MANAGEMENT
Vytautas Lygnugaris, the Chairman
of the Lithuanian Shipowners’
Association, does not complain
that the state does not listen to
shipowners. On the contrary, the
state listens with interest. It makes
Estonians jealous.
Over the last three-four years the number
of ships have stabilised, says Vytautas Lygnugaris.
“The number of vessels in the Lithuanian
register of over 1,000 grt have been
between 66 and 72 – the last time I checked
it was 71. The tonnage is rising. Currently,
it is around 500,000 brt. Actually, we want
the number of ships to increase as well.
We now have tonnage tax. So Lithuania
is an excellent flag state – all the conditions
for registration of ships under our
flag exist. We are very optimistic about the
further development of our fleet.
The tonnage tax was introduced in 2007,
which means that shipping companies do
not have to pay 15 per cent of their profits,
but a fixed tonnage tax, which is nearly
symbolic. We can invest in modernisation
of the fleet and even perhaps think of raising
seamen’s pay.”
The social tax for seafarers is very high.
How is the reduction of social tax going?
“Social tax will remain unchanged for
the time being. Last year the Government
and Parliament proposed a specific social
insurance tax for seamen, but the President
refused to sign it. The main reason was that
it would have been the first step in fixing
the maximum limit of the social tax, which
would have created precedent.
We worked hard for five years to reduce
the tax; we got the idea as early as 2000.
However, we do not think that this is the
death of the fleet, but we will keep on trying
to convince the President and the MPs
and have the bill voted on again, because it
has already gained a simple majority twice.
Our hopes are high.”
There is currently no seamen’s income
tax in Lithuania. How did Lithuanians
react to the abolition of income tax for a
portion of employees?
“They reacted well. But there is more to
Vytautas
Lygnugaris,
chairman of
the Lithuanian
Shipowners’
Association is
very optimistic
about the further
development of
the country’s fleet.
Lithuania’s successful lobbying
it. Lithuanian citizens working under European
flags do not pay any income tax, but
the same applies to seamen working under
convenience flags. Brussels does not like it.
This is important, because those Lithuanian
seamen who do not work under the
Lithuanian flag may end up in a complicated
situation in the future.
Sooner or later the European Commission
will decide that only those seamen
who sail under European flags may be
exempt from income tax. We have even
received a warning on this matter, but the
Lithuanian representatives of ITF were in
Brussels and explained that we really need
this solution. There was a time when seamen
paid income tax at the rate of 15 per
cent. At present the income tax rate of
ordinary Lithuanian employees is 27 per
cent and it is to be reduced to 24 per cent.
We do not know how long the current zero
tax rate will remain in force, but for the
time being it is not under threat.
The tonnage tax is applicable for ten
years, that is up to and including 2016.
It must be paid even if the company has
48 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

no revenue. This change did not spark any
opposition in society either. I believe that
we were able to prove to the Parliament and
to the Government that the tonnage tax
was necessary. The last two, perhaps even
three Governments were all in favour.”
Did you have to lobby hard?
“The representatives of shipowners as well
as Governments simply did their job to
ensure that the Lithuanian flag would be
competitive not only in Europe but elsewhere.
This made the European Union
more competitive in the world as well. I
suppose people understand this.
There is a Maritime and Fishery Committee
in the Parliament, consisting of people
who understand these things very well.
We are happy to have them and pleased
with the situation. It does not mean that
everything have been done. The social
tax of seamen is very high and we need to
attend to it. People are generally positive
in the Parliament, Government and ministries.
Too bad Klaipeda isn’t the capital! Vilnius
is 300 km from the sea and sometimes
you can feel it. But we drive there and
make things clear. Sometimes it does seem
that Klaipeda is closer to Vilnius than Vilnius
to Klaipeda.”
There is only 100 km of coastline. This
is not much and we have to use it as good
as possible. If we are talking about being a
seafaring nation, it means having ports, the
infrastructure as well as a fleet. Actually,
there is only one port: all of the maritime
and shipping companies are here. Perhaps
that makes us more attractive than large
seafaring nations who have a long coastline.
The cargo volume of our port is over 27
million tons, 32 million with Butinge. Our
city is small, the third largest in Lithuania
with 200,000 people, but the port is large.
If you look at the Lithuanian economy
on the whole you see that Klaipeda contributes
12.5 per cent of GDP, while the
number of residents amounts to no more
than 5.4 per cent. If we look at the maritime
business of the entire country along
with other types of transport, it produces
approximately 13 per cent of GDP. In
other European states it is usually 5-7 per
cent, which means that the development
of transport infrastructure has a very strong
influence on the economy.”
In Estonia people do not think of maritime
transport at all. Transport means
roads and cars first.
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SHIPPING AND SHIP MANAGEMENT
“Both the Estonians and the Lithuanians
sometimes tend to think that the marine
industry does not need to be helped – it
is well off already. We are trying to explain
that yes, a seaman earns more than most
people, but if you look around in the
world, it becomes evident that it is necessary.
Europeans do not want to go to sea, and
the same goes for Lithuanians. So we can
only attract people with very good pay and
conditions. No one wants to work on an
old ship. Everyone wants a new one with
new technology, automated systems and so
on. This require us to make investments.
The acts applied for are required for exactly
this purpose – to make money to modernise
the fleet.
We have to attract our students to work
here. In cooperation with various maritime
companies Limarko is preparing scholarships
for 3rd and 4th year students from
the Lithuanian Maritime College so that
they come to work in the company later.
These will be almost twice the national
scholarship, which is only available to students
who have excellent results.”
In Estonia Tallink is such a large cor­
poration that it overshadows the existence
and needs of all other shipowners
for decision­makers, what else does the
maritime industry need?
“We do have a slightly different situation –
there are three large shipping companies in
Lithuania, and one of them is state-owned.
These are important companies and no
one thinks that laws are made simply for
one company or executive. In that sense
we have it slightly easier. The Government
and the Parliament realise that a strong
fleet means a strong state.”
Is this not a matter of political culture?
“Both political and maritime culture.
The understanding of what a fleet is and
what a sea-going nation is. The understanding
of how important the development
of the fleet is for the development
of the state. Shipping works 100 per cent
for export. The problems associated with
the maritime industry, especially the shipping
industry, have been administered by a
Maritime Administration for several years
now. It performs all of the functions and
is strong.
Perhaps because we have so short coast-
The high building to the left is Limarko’s
new office, situated in one of the main
streets of Klaipeda with a view over the
port.
line we value the opportunities of the maritime
industry highly and try to develop
them as much as possible. 50 km of the
coastline is protected by UNESCO, so
we cannot do anything there. We can only
operate within the remaining 50 km leading
to the Latvian border. A new deep sea
port will definitely be built; there is no
other solution for Lithuania. We need this,
because in Klaipeda we have the city and
we cannot expand the port.”
madli vitismann
50 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008
MADLI VITISMANN

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SHIPPING AND SHIP MANAGEMENT
Growth at last
The newly built Finnlady.
Last year the Finnish flagged
merchant fleet grew both in number
of vessels and tonnage. This may
be a sign of breaking the negative
trend although it is mainly the result
of replacing some older vessels with
larger ones.
Finland
The newbuilding programmes of a number
of Finnish shipping companies in combination
with the activities among the smaller
shipowners had a positive impact on the
statistics last year. But after last year’s peak
of deliveries, only a few shipping companies
have newbuildings remaining to be
handed over.
For the first time in years
the Finnish merchant fleet
has started growing.
However, in 2007 the number of larger
Finnish flagged merchant ships increased
from 135 to 141. By the end of last year,
the total gross tonnage of vessels larger
than 500 GT was close to 1.5 million tons
and the deadweight slightly over 1.1 million
tons.
“A change of course has occurred”,
confirms Managing Director Olof Widén
52 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

Olof Widén of Cargoship Association.
of Cargoship Association. “For the first
time in years the Finnish merchant fleet
has started growing and the share of shipments
on Finnish vessels has increased.
Hopefully this is a permanent change”, he
adds.
Weakening Dutch expansion
Mr Widén thinks that the development
has so far been rather a result of the main
competitors facing more difficulties than
an improvement in the Finnish shipping
policy. During many years Finnish cargo
vessels have lost market shares mainly to
The Frida – bought.
The Passaden – sold.
Dutch vessels. Now mr Widén thinks that
the Dutch expansion may not continue as
strong as before.
“Our domestic crews are our strongest
asset at the moment in Finland. The situation
regarding the recruitment of new students
to the maritime schools is indeed not
good in Finland and on Åland, but much
better than in other European countries.
Although even more seafarers should be
trained, there will still be a relatively good
supply of Finnish workforce both for the
ships and the shipping offices also in the
future.”
SHIPPING AND SHIP MANAGEMENT
Today, cargo vessels are operated by small
and efficient crews. Running vessels with
small crews in a safe way is possible due to
highly trained and skilled personnel. Active
leadership in every routine task is not a part
of the working culture on Finnish or Åland
vessels. All crew members know what they
are supposed to do even if the mate or bosun
is not watching over them all the time. And
on the smaller vessels every member of the
crew participates in the physical work – even
the captain if needed.
“Manning is most competitive in Finland
when it comes to the number of
hands”, mr Widén states.
He thinks that mixed crews are therefore
not crucial on board Finnish cargo vessels;
instead, the reason for using mixed crews
will rather be a shortage of Finnish engineers
and able seamen.
“The relative significance of a mixed crew
is rather small on a vessel which is manned
by a total of six to nine persons. The situation
is, however, completely different on a
large ferry as there is so much work which
requires less-qualified personnel.”
Trump on hand
It is quite obvious that there would be
much more investments in new and
second-hand vessels if the Finnish owners
finally got the tonnage tax legislation
revised. Mr Widén thinks that a proposal
may be presented during the summer.
“The latent tax liability is the largest
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 53

SHIPPING AND SHIP MANAGEMENT
remaining problem to solve. I’m afraid that
the final solution to this particular issue
could be moved forward a couple of years
as has happened in Denmark.”
Regarding the tonnage tax mr Widén
thinks that Finland has an advantage, as all
main competitors but Sweden have already
played this card.
“The manning costs for mixed crews
are rising with the increasing global shortage
of competent seafarers. We have been
working under a lot of cost pressure con-
The Aila, Oy Langh Ship’s newbuilding.
Finnlines’ new ro-pax vessel Finnlady,
Godby Shipping’s newbuildings
Misana and Misida as well as Langh
Ship’s container vessels Aila and Linda
had a clear impact on the statistics
of the Finnish merchant fleet last
year. But above all the two large
Finnish flagged product carriers Stena
Poseidon and Palva increased the
Finnish-flagged tonnage in 2007.
Like several years before, the smaller shipping
companies have been active secondhand
buyers despite the fact that there are
still many unsolved issues in Finnish shipping
policy. During the last years the fleet
of coasters and cargo vessels of river-sea
type has grown. At the same time the average
age of the vessels has become lower.
stantly, and we have adapted ourselves to
the situation. The tonnage tax may have a
great positive impact on the future development
of the fleet.”
He stresses that there are many small shipowners
with a strong growth potential. If they
were provided with the right preconditions
for new investments, their activities could
expand much more rapidly than today. The
growth of the fleet of small cargo vessels has
been amazingly strong during several years.
This indicates that there is a growing supply
Several newcomers
under the Finnish flag
Due to the limited supply of ice strengthened
tonnage and high second-hand prices
the typical second-hand coaster acquired
by Finnish owners was built some 20 years
ago.
Growing fleet of coasters
Vidar Shipping Company Ltd bought its
third vessel, the former British 2,379 DWT
dry cargo vessel Scot Pioneer. Built in Germany
in 1985 the vessel has been renamed
Frida. Meriaura Oy provides management
and chartering of the vessel.
During 2007 two second-hand cargo
vessels were added to the Prima Shippingfleet,
of which one was bought by the
company and the other was put under its
management. Prima Shipping bought the
2,510 DWT dry cargo vessel Elwin from
of cargo for this market segment and that
the young generation shipowners have taken
their chance to expand even if the circumstances
have not been ideal.
“It is positive that the tonnage is growing.
During last year the number of membership
vessels in Cargoship Association
increased from 38 to 44. Half of them are
cargo vessels in the smallest segments”, mr
Widén informs.
text and photos:
pär-henrik sjöström
the Dutch shipping company Scheepvaartonderneming
Koolhof and renamed
her Celina. She was built in 1992 in the
Netherlands. The recently founded shipping
company Gran Ship Oy Ab started
their activities in April 2007 by buying
the 2,086 DWT dry cargo vessel Beetpulp
Trader from German owners. The new
acquisition was renamed Carisma and
she is under management by Prima Shipping.
The Carisma was built in 1985 in the
Netherlands.
Last spring another new Finnish shipping
company Oy Kraft Line Ab was established.
They bought the 1984-built 3,175
DWT dry cargo vessel Mangen from the
Swedish shipping company Ahlmark Lines
AB and renamed her Alholmen.
A renewal has also occurred in the fleet
of Ab Ronja Marin Ltd. In spring 2007 the
company bought the dry cargo vessel Triton
Elbe, which was renamed Riona. Built
in 1988 by Schiffswerft Cassens in Germany
as the Sea Danube, the Riona has a
boxed cargo hold with movable bulkheads.
For the rest of the year Ronja Marin operated
two vessels, but in December 2007 the
1,020 DWT dry cargo ship Rebecca was
sold to Croatia to enable the investment in
another larger second-hand vessel in spring
2008.
There were also a couple of second-hand
acquisitions carried through by the larger
shipping companies. Birka Cargo Ab Ltd
bought the ro-ro vessel Norcliff, which
entered the Finnish register in January 2007
as the Baltic Excellent. Built in 1995, she is
employed on a five years time charter to
the Swedish paper manufacturer Holmen
Paper AB.
The fleet renewal of the Finnish shipping
company Bore continued in 2007 as
the dry cargo vessels Smaragden and Passaden,
both built in 1991, were replaced by
the ten years younger general cargo vessels
54 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

Merwedelta and Transitorius. They were
bought from the Dutch shipping company
Rederij Chr. Kornet & Zonen B.V., who
also bought the Smaragden and Passaden.
The Merwedelta was renamed Swegard and
the Transitorius Fingard.
Not seen in the Finnish statistics as she
continues trading under a foreign flag,
is the ro-ro vessel Hoburgen, which was
bought by Rederi Ab Lillgaard last autumn.
The Bahamas-flagged Hoburgen was built
in Romania in 1985 and has a cargo capacity
of 1,225 lane metres of trailers.
Also some tugs were added to the fleet.
The one year old azimuth stern drive
(ASD) tug Stevns Icequeen was bought
by Alfons Håkans Oy Ab and renamed
Poseidon.R-Towing Oy expanded their
fleet of tugs with the former Swedish Navyowned
Achilles, built in 1962. Yxpila Hinaus
– Bogsering Oy Ab acquired the powerful
Azimuth Stern Drive Tug Maju Cepat
from Singapore. Built in China in 1996,
the tug was renamed Aries.
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In 2007 seven newbuildings were delivered
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SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 55

SHIPPING AND SHIP MANAGEMENT
The ice strengthened 75,000 DWT Panamax
product carriers Stena Poseidon and
Palva are jointly owned by Concordia Maritime
AB (publ) and Neste Shipping Oy.
Neste Shipping is the commercial operator
and manager of the vessels and has taken
them on time charter for more than ten
years.
Three 4,200 lane metres ro-pax newbuildings
joined the Finnlines fl eet in 2007.
Finnlady was registered in Finland while
Europalink and Nordlink were put under
Swedish fl ag.
Oy Langh Ship Ab has added the German-built
container ships Linda and Aila
to its fl eet. With a capacity of 907 TEUs
they are among the largest vessels of this
type trading in the area.
Godby Shipping took delivery of the roro
vessels Misana and Misida, which both
are employed in liner traffi c between Finland
and Spain on a long term charter to
UPM.
Meriaura’s fi rst newbuilding Aura was
handed over in the beginnings of 2008.
Viking Line took delivery of the fast
car and passenger ferry Viking XPRS from
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Aker Yards in April 2008 and has another
ferry on order in Spain to be delivered in
2009 for the Mariehamn–Kapellskär route.
Last year Bore ordered two ro-ro vessels
from Germany to be employed on a long
term charter by Mann Lines after delivery
in 2011.
Finnlines has ordered six ro-ro vessels
from China to be delivered in 2010 to
2011. The newbuildings will have a cargo
capacity of 3,245 lane metres.
The keel was laid for ESL Shipping’s fi rst
18,800 DWT bulker in October 2007, at
ABG Shipyard in Surat in India. She will
be delivered in 2008 and her sister vessel
in 2009.
Sold vessels
The largest vessel to be sold during 2007
was ESL Shipping Oy’s 47,442 DWT bulk
carrier Arkadia. She was delivered to Indian
owners and renamed ABG Narayana.
Last year Oy Langh Ship Ab sold its dry
cargo vessel Christina to the new Mariehamn-based
company Rederi Ab Tingö,
which is partially owned by Rederiaktiebolaget
Gustaf Erikson. The vessel changed
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to Gibraltar-fl ag and was renamed Tingö.
Ruukki continues as charterer of the vessel.
In January 2007 Rederiaktiebolaget Gustaf
Erikson sold the OCT Challenger to
Croatia.
Rederiaktiebolaget Eckerö sold its car
and passenger ferry Roslagen. Originally
the vessel should have been handed over
to new owners in September 2007, but the
deal was cancelled. She was fi nally sold in
November and left her former home port
Eckerö as the Ionian Spirit.
The ro-pax vessels Finnpartner and
Finntrader from the Helsinki – Travemünde
trade were also struck from the Finnish register,
but this was only a internal transaction
within Finnlines. The vessels changed
from Finnish to Swedish fl ag as they were
employed on Finnlines’ Nordö-Link service
between Malmö and Travemünde. The
sisters were rebuilt in Poland before entering
their new service.
As Alfons Håkans has added several new
tugs to the fl eet during the last years the
company sold its tug Baus in 2007.
text and photos:
pär-henrik sjöström
V E R I STA R
56 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

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HAMburG SüD SHIPPING AND SHIP MANAGEMENT
The Rio de la Plata of Hamburg Süd.
Owners come to grips
with manning problems
Prospects for a still buoyant and
expansive German shipping industry
remained good this spring after a
record year and despite continuing
problems like a chronic manpower
shortage, rising bunkers and widely
fluctuating currency exchange rates.
Germany
Owners appeared, slowly, to be coming
to grips with their biggest problem – the
shortage of qualified personnel – in a fleet
that has never been bigger and that continues
to grow.
According to the German shipowners’
association VDR, German container shipping
broke records in 2007 and Germany
continued to lead the world with 38.3 per
cent of all boxships and was behind only
Greece and Japan in overall tonnage.
VDR MD Hans-Heinrich Nöll said owners
were optimistic and “the prospects for
2008 are good” as world trade continues to
grow.
Further growth was already programmed,
the VDR said, with about 1,200 ships on
order worldwide, most in Asia, for German
shipowners. As of the start of 2008 they
included 56 container ships of more than
10,000 TEU.
None built at home
Not one of those mega ships, however, is
being built in a German shipyard and owner
reluctance to order at home brought a
knuckle-rap from the German shipbuilding
association VSM at the start of 2008. It said
only about 40 per cent of German owners
were ordering at home although German
shipbuilding was “constantly striving to
develop technologically improved ships so
that the shipowners will buy from us”.
Latest VDR statistics, however, showed
that of the 68 merchant ships delivered by
home yards in 2007, more than half – 39
– were for German owners. And, actually,
home orders are higher than they have
been since 1990. That’s partly because Asia
and Far East yards are now full and owners
are finding earlier German delivery attractive
and clearly worth paying extra for.
The German fleet passed the 3,000 mark
for the first time in 2007 and stood at 3,179
vessels. Those ships carried 3.5 million
TEU and moved a total of 64.5 million GT
– 6.4 per cent more than 2006 and double
what it was just five years ago.
In his annual report, the VDR’s Nöll
spoke of an explosion of costs in the personnel
sector, which accounts for most of
the expense of shipping. “The main reason
for this is a lack of qualified onboard personnel”,
he said, mentioning a continuing
shortage of captains, engineers and other
seafarers.
Few applicants
According to the VDR, there were only
43 applicants for every 150 advertised captain
jobs, 55 applicants for every 150 jobs
in nautical engineering and only 41 applicants
for the same number of engineering
jobs. In the gas and product tanker sectors,
salaries had risen as much as 20 percent,
he said, adding that because of the high
number of newbuildings coming in, this
situation would get worse.
58 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

VDR/JoHnS
Ralf Bedranowsky, head of DB Shipping,
a division of the Deutsche Bank (DB), said
the growing size of the global fleet meant
that about 100,000 additional seamen
would need to be hired world-wide up to
2011, a third of them officers.
History shows us that
shipping is a cyclical
business and that hard
times will return again.
Frank leonhardt
of VDR.
In Germany, hardly a
day now goes by without
some new company-based
trainee initiative
being announced
and shipowners appear
to be making some
headway. According to
VDR Chairman Frank
Leonhardt, German
owners increased training slots on their
ships two and a half times in the three
years up to late 2007. He acknowledges
however that much remains to be done
and also notes that German owners have
long urged removal of a stipulation that
captains on German ships need to speak
German.
Nikolaus Schües said Laeisz was working
to ensure that rising operational costs
did not contradict socially responsible personnel
policies. “That’s why our crews stay
with us longer”, he said.
Seafarers want their share
Making what appears to be a similar point,
but in a different way, is V. Ships MD Captain
Kurt Buchholz. In remarks prepared
for delivery in late May at the 11th European
Manning & Training Conference in
Poland, he acknowledges the problem but
suggests there is not a personnel shortage
whenever above-average pay and better
onboard facilities are offered.
“We need to be competitive but owners
have been enjoying high freight rates
and seafarers obviously want their share,
as salary developments prove”, he says.
“If owners want cheap crews, and that’s a
hard task, they have to accept that they are
cheap for a reason and couldn’t find betterpaid
employment”, says Buchholz .
As for bunkers, the VDR says the heavy
oil price has tripled in three years and that
bEluGA SkYSAIlS
The MS beluga SkySails – said to have saved 10–15 per cent of fuel costs per day with her 160
square metres kite.
crude oil costs continue to increase.
Hamburg Süd indicated how the sparing
costs were hitting Germany’s shipping
majors. It said the average price per ton
of bunkers had risen to nearly USD 350
(Rotterdam base) in 2007 – about USD
60 or over 20 per cent more than a year
earlier. At the start of last November it
topped USD 500 and stood at USD 470
at the end of the year, Hamburg Süd
declared. A concerned TT Line head
Hanns Contzen said bunker costs in his
SHIPPING AND SHIP MANAGEMENT
company had quadrupled since 2001. TT
was now spending EUR 30 million a year
on fuel, he said.
Beluga Shipping’s MD Captain Niels
Stolberg told this correspondent recently
that owners could flank expansion strategies
with safeguards to offset currency rate
fluctuations or rising bunkers. He said
they could profit from exchange rates by
ordering newbuildings in Dollars or taking
advantage of freight rates in Euros. As
for bunkers, he pointed to the novel Sky-
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 59

HAPAG-lloYD SHIPPING AND SHIP MANAGEMENT
Sails auxiliary propulsion system used by
Beluga.
The 10,000 DWT multi-purpose heavylift
Beluga SkySails is said to have saved
10–15 per cent of fuel costs per day with
her 160 sq m kite. Stolberg said the kite
size was being doubled and new routes
introduced. Newbuildings on order would
also get SkySails, he said.
Nikolaus Schües at Reederei F Laeisz is
even more optimistic about the future than
Hans-Heinrich Nöll and has predicted even
better times ahead for German shipowners.
“I believe that an ideal time to invest in
ships will return in the next few years”, he
has been quoted as saying.
expansion all round
as Hapag-Lloyd clouds the issue
Uncertainty over the future of
Germany’s most prominent shipping
company, Hapag-Lloyd, and the
hoped-for, if unlikely, possibility that
it might just stay in German hands,
overshadowed the sector as SSG went
to press.
All the options remained open for Hapag-
Lloyd, and that apparently includes the
possibility of an NOL involvement, mooted
since the very beginning. In fact it was
According to Schües, it all depends on
the currently weak US Dollar and on the
expansion of shipyard capacities. Yards
are generally booked until 2012 so owners
currently have a long time to wait for their
ships. As a result, Schües says, negotiating
yards were very self-assured. “However,
that will certainly change in the next few
years”, he predicts.
Boom will continue
The Deutsche Bank’s Ralf Bedranowsky is
also enthusiastic about German shipping’s
future and says the shipping boom will continue,
with Asian business underpinning the
sector. However he also acknowledges that
With the 8,749 TEu bremen Express, named in March, Hapag-lloyd has expanded its fleet to
142 container ships of total 514,000 TEu.
reports that NOL was about to take over
the company that sparked off this year’s
spate of developments that eventually
led to the dramatic decision in March by
Hapag-Lloyd parent concern TUI to shed
the profitable container shipping concern.
TUI will now concentrate on tourism,
albeit tourism that will still make a contribution
to German shipping in the shape of
a new cruise shipping ingredient.
The likelihood that highly successful
Hapag-Lloyd might now be taken over by
rising costs will depress earnings and said it
was by no means certain that the container
shipping sector will be able to compensate
for rising costs through increased earnings
and higher freight rates. That applies particularly
to the bigger ships of 10,000 TEUs
and more, DB says. The bank also cautions
that the increasing supply of new tonnage
expected between 2009 and 2012 is likely to
cause charter rates to decline.
Also injecting a note of caution into the
debate is VDR Chairman Frank Leonhardt.
He says that despite current good times, “history
shows us that shipping is a cyclical business
and that hard times will return again”.
tom todd
Asian interests has made Germany very
jumpy indeed. That’s particularly the case
since it comes just after South Korea’s STX
bagged a big slice of shipbuilding giant
Aker and after Aker compounded the fear
of foreign take-overs by selling its German
shipyards to Russian interests.
The Hapag-Lloyd developments have
focused some attention on the possibility
of keeping the premier shipping firm in
German hands.
Joining forces
Prominent forwarder Klaus Michael
Kuehne and other, businessmen and politicians
alike, have expressed interest in joining
forces to secure a controlling stake in
Hapag-Lloyd. Kuehne has said it is in Germany’s
strategic interests to have its own
strong, global shipping company and he
has urged the City of Hamburg to play an
active role in such a participation. Others
said they would like to see Hapag-Lloyd
“remain an independent shipping company
based in Hamburg”.
However observers have pointed out
that a straight purchase of Hapag-Lloyd by
German interests alone appeared unlikely.
There did not seem to be sufficient financial
clout among the Germans to buy the
world’s fifth biggest shipping company,
which reports speculated would cost any
buyer a few billions of Euros.
TUI’s decision to shed Hapag-Lloyd,
60 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

HArTMANN
The Tango, just delivered to Hartmann from Asia.
overshadowed the owner’s latest positive
shipping figures – which will make it even
more attractive to buyers. Hapag-Lloyd
upped its container volumes by 9 per cent
last year, above market average growth, to
5.45 million TEUs. Contributing to that
was a 44 per cent cut in administration
costs, part of the synergy advantages from
the CP take-over, long mooted but now
coming.
Turnover however, at EUR 6 billion, was
slightly down on 2006, primarily because
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SHIPPING AND SHIP MANAGEMENT
of a weak Dollar rate against the Euro
although pre-tax earnings more than doubled
to EUR 182.5 million from EUR 81.3
million in 2006.
Looking ahead, TUI said it expected further
container shipping growth of 7 per cnt
this year, mainly driven by China trade,
and said turnover growth to EUR 7 billion
was “considered possible”.
With the 8,749 TEU Bremen Express,
named in March, Hapag-Lloyd has expanded
its fleet to 142 container ships of total
514,000 TEU. It has ordered another 15
identical vessels from Hyundai for delivery
up to 2011.
Merger speculations
Speculation about the possibility of a merger
between Hapag-Lloyd and its old rival,
Hamburg’s second biggest shipping firm,
north-south reefer specialist Hamburg Süd,
appeared to have been swiftly scotched.
The two attempted a merger some years
ago, but it collapsed when it became clear
that Hamburg Süd was not prepared to
give up its independence. Now an Hamburg
Süd spokeswoman has been quoted
as saying no offer for Hapag-Lloyd is being
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SHIPPING AND SHIP MANAGEMENT
prepared or has been made by Hamburg
Süd.
Presenting the 2007 annual report of
Hamburg Süd head Klaus Meves was quoted
as saying it was a shame that a grand
shipping company like Hapag-Lloyd was
the subject of merger and take-over speculation
again. The talk would, he said, change
nothing as far as the excellent co-operation
between the two was concerned.
Buoyed by continuing high world economic
growth of over 5 per cent, Hamburg
Süd container shipping volume rose an
above-average 11 per cent last year while
container totals were up 17 per cent to 2.14
million TEUs. But higher operating costs
have led to an EUR 150 per container rise
at Hamburg Süd from mid May.
Investing as never before
The company is now investing as never
before in new ships and containers to keep
pace with the growth in world trade and
bolster the number of its own ships. It
invested EUR 600 million last year – 70 per
cent more than in 2006 – to increase own
ships and reduce slot costs, Meves said.
Total investments in ships and containers
between this year and 2011 will total EUR
1.7 billion.
The owner, who already has 30 of its 155
owned and chartered ships under the German
flag, has also just become the latest to
announce it is flagging back ships. It said
all 17 newbuildings of total 104,000 TEUs
on order for delivery up to 2011 will be
registered at home.
That has started with the new, 5,900
TEU Rio de la Plata. She is the first of five
new Rio Class vessels for Europe-South
America service that will eventually replace
the company’s 5,552 TEU Monte Class
ships being moved to Europe-Asia routes.
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Despite the problems of finding even
more German nautical and engineering
personnel, owners have pledged to return
another 100 ships this year to the home
register, bringing the total to 500 by the end
of 2008. They have promised to flag-back a
further 100 up to 2010. It is all part of an
ongoing campaign to strengthen Germany
as a shipping location and reward the German
Government for supporting shipping.
It is a shame that
a grand shipping company
like Hapag-Lloyd is the
subject of merger and takeover
speculation again.
Elsewhere, fleet
expansion of the kind
being seen with Hapag-
Lloyd and Hamburg
Süd is also rife among
other German shipping
companies.
Senator Lines has
announced it is increasing
its capacity on its
klaus Meves of
Hamburg Süd.
service linking the Mediterranean with the
Mideast and Asia. “With growth of more
than 20 per cent on the Mediterranean–
Asia trade lanes last year, we believe that
this is the right strategy to react to the
market and to further increase our market
share”, said CEO Hans-Hermann Mohr.
Deutsche Afrika Linien is renewing its
chemical tanker fleet with newbuildings
from Turkey and has added a seventh ship
to its core SAECS service. It says it is not
adding capacity, just making its service
more flexible. Like everyone else, DAL also
complains of high bunkers, which increased
rates can only partially compensate for.
Back in the liner shipping news this
Spring is the Deutsche Seereederei in Rostock
(DSR), which has holdings in Stinnes
and Scandlines but has not directly been
involved in liner shipping for years. DSR
chief Horst Rahe said the company was
interested in rebuilding its shipping sector
and in eventually taking over Scandlines.
He said a fleet of around 20 ships was needed
to launch a viable shipping operation.
Baltic port projects
Rahe revealed that DSR was also looking
at three port projects in the Baltic, one of
them in Riga, with a view to establishing a
port network for container handling over
the next 7–10 years. He predicted that container
handling in the area would rise from
5 million tons to 20 million. “We would
like to be part of that”, he said.
Elsewhere, German shipping companies
which were small just a few years ago are
also expanding rapidly with a seemingly
endless flow of newbuildings from Asia
and particularly China.
The list is endless, but among the most
recent owners in the news is Hartmann
Reederei, showing that Asia is not just up
for container feeders for Europe.
Hartmann has just taken delivery of
three ships from Asia, one the Japan-built
150,000 DWT tanker Tango. The others
are a Supramax bulker and a box feeder
ship from China.
Norddeutsche Reederei, Ahrenkiel, Bockstiegel,
Klaus Hesse, Drewitz and Carsten
Rehder are just a few of the other German
shipowners feeding their expansion plans
with tonnage from Asian and Far East yards.
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SHIPPING AND SHIP MANAGEMENT
a time for growth
Four years of strong, dynamic markets,
restored profitability and ambition and,
at last, a satisfactory shipping policy.
What more could the Norwegian
shipping industry possibly crave for?
Norway
The NOK 22 billion (USD 4.3 billion)
deferred tax has to be paid, of course, by
the companies that had taken benefit of the
1996 deferred tax scheme for shipping. The
most painful political failure ever suffered
by the Norwegian Shipowners’ Association
(NSA) will cut deeply into what had been
considered to be the equity of the companies
involved (see separate story). Yet, rather
than tax-grumbling, the NSA has turned
to a more appealing message: Environmental
responsibility and ambitious emission
targets.
Ambitions
After four years of shipping boom – the
longest period of consistent strong and
dynamic markets in living memory – the
Norwegian shipping industry has at last
regained some of its ambition and stamina.
This is reflected in the high figures for new
investment since 2004, for cargo ships, offshore
vessels and second-hand acquisitions.
From an average investment exposure of
USD 3–4 billion in the 1990s, 2006/2007
peaked at 15–17 billion per annum, drilling
rigs excluded.
This may be a major share of the global
order book in terms of value, but insignificant
in tonnage – some 7.5 million DWT
(according to NSA figures) or just 1.6 per
cent of the total tonnage. This, however,
bears testimony to the structure of the fleet:
smaller but expensive specialized vessels.
64 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

The Höegh
Shanghai.
Whereas the contracting of cargo vessels
peaked in 2006, the main feature for 2007
was the ordering of large and expensive
offshore vessels for subsea work, construction
and maintenance in deep waters. Such
vessels may have building prices as high as
USD 150–200 million and are to a certain
extent built against long-term employment
to offshore contractors.
Last year also saw the ordering of
heavylift crane vessels and a number of
combined crane/accommodation vessels.
As for cargo vessels, Wilh. Wilhelmsen
and Höegh Autoliners have both contin-
what is Norwegian?
How is Norwegian shipping to be
understood, statistically? Is it the
40.9 million DWT as reported by
the NSA, or does it also include the
commercial or operational activities
carried out from Norway of fleets
controlled by foreign-based owners?
The NSA figures comprise genuine
Norwegian-owned companies and ships,
with some historic concessions like
Höegh and the former Bergesen fleet
that are now formally foreign-owned. It
does not include John Fredriksen’s Oslolocated
companies like Frontline and
Golden Ocean, nor the K G Jebsen London-based
companies, although its ships
are managed from Bergen. ISL-Bremen,
the institution with the perhaps the most
reliable statistics on national fleets, also
adopted the NSA figures a couple of
years ago.
Continuing globalization
We have repeatedly argued that the NSA
figures do not reveal the true commercial
and operational extent of the Norwegian
shipping community. Further,
the present definition is hardly tenable
as the shipping industry continues to
globalize, with Norwegians seeking formal
domicile in Singapore, Cyprus and
Bermuda, but continuing to operate
their business from Norway.
The complexity of our industry has
long ago transgressed traditional definitions
and national boundaries. The
key characteristic for being Norwegian
should be whether a major part of the
business in conducted from or within its
national maritime cluster. Commercial
head office, ship operation and management
are essential aspects.
By this definition foreign-owned
companies like BW Gas, BW Offshore,
Höegh Autoliners, Höegh LNG, Teekay
Norway, Frontline, Golden Ocean, Nordic
American Shipping and offshore companies
like Bourbon Offshore Norway,
Gulf Offshore Norway and Aries Offshore
Services should be included. Similarly
some of the companies controlled
by London-based entrepreneur Kristian
Siem like Subsea7 and Siem Offshore,
but not Star Reefers. Arne Blystad may
be a harder case, but his Norwegian-based
business is definitely larger today than
five years ago. Also, the figures should
include Norwegian-owned companies
relocated to Singapore and Cyprus, like
Masterbulk owned by the Westfal-Larsen
brothers, Deep Sea Supply, Prosafe and
Seadrill (formerly Smedvig, still with its
head office in Stavanger).
The new offshore companies set up by
Norwegian entrepreneurs in Singapore,
like Nor Offshore, Equinox, Nortech
and others, are drawing heavily on competence,
equity and financing from Norway.
Should they be considered a part of,
or at least affiliated with, the Norwegian
shipping community?
So, should the Norwegian fleet be
assessed to 40 or 70 million DWT? The
real question is perhaps rather whether
Norway is still one of the 3–4 leading
maritime communities in the world, or
merely a fallen star, in terms of tonnage?
Shipping investment 1995–2007
Billion USD � Second-hand purchases � New orders
20
15
10
5
0
‘95
‘96
‘97
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 65
‘98
‘99
‘00
SHIPPING AND SHIP MANAGEMENT
‘01
‘02
‘03
‘04
‘05
‘06
‘07
Source: SSG-Bergen

OlYMPIC SHIPPING
SHIPPING AND SHIP MANAGEMENT
Offshore support vessels have become a more important sector, today making out 47 per cent
of the order value.
FleeT, orDerS
AND groSS INCome
Total fleet orders gross freight
mill DWT mill DWT income
bn NoK*
1995 47.9 4.2 48.2
1996 46.6 5.1 52.1
1997 50.5 4.9 58.7
1998 52.4 4.9 58.6
1999 52.5 4.2 54.7
2000 50.1 4.3 69.2
2001 50.0 7.6 81.1
2002 48.7 3.7 74.1
2003 45.9 4.5 69.8
2004 43.2 4.5 75.8
2005 40.9 5.6 79.8
2006 37.1 5.2 77.5**
2007 40.0 6.8
2008 40.9 7.5
* From the National Budget,
shipping excl oil drilling
** Forecast
Source: Norwegian Shipowners’ Association
ued ambitious expansion programs in the
global ro-ro sector to bolster market position.
The same goes for LNG carriers and
the range of chemical, product and LPG
tankers. More conspicuous has been the
contracting of bulk carriers, not only by
Golden Ocean and Blystad but also by Belships
and Eitzen.
735 ships on order
A stronger feature last year was the readiness
to part with tonnage at high prices.
According to our own figures, 145 ships of
USD 3.94 billion were sold; roughly twice
the sale value of 2006.
Taking the contracting boom 2004–2007,
total new orders amount to 735 ships of
USD 37.7 billion, of which 47 per cent is
for offshore vessels. In addition, some 600
ships of USD 11.3 billion were acquired
second-hand.
How large is the commitment, in terms
of tonnage?
NorWegIAN FleeT DevelopmeNT 2003–2007, mIllIoN uSD
New orders Second-hand Sold
Cargo vessels offshore vessels Drilling rigs acquisitions abroad
2003 1,265 116 0 1,495 1,385
2004 4,120 1,800 510 1,518 1,397
2005 3,622 2,795 5,485 2,747 1,419
2006 6,629 5,500 6,769 4,586 2,100
2007 5,709 7,542 4,045 2,390 3,940
Source: SSG-Bergen
The NSA figures of 7.5 million DWT
appear on the modest side, no doubt
because car carriers and offshore vessels
do not range very high in deadweight tonnage.
Then there is the uncanny division
between what the NSA regards as “bona
fide” Norwegians and “other” Norwegians
(see separate article). According to our own
records, the total order book comes out as
follows:
By Norwegian-related owners (see separate
article), our records show a rather
higher volume than the NSA figures:
• Bona fide Norwegians – cargo vessels:
6,920,000 DWT
• Bona fide Norwegians – offshore vessels:
4,200,000 DWT
• Lease/purchase-option vessels:
1,080,000 DWT
• Other Norwegian owners:
7,700,000 DWT
Together, this brings the tonnage commitment
to 19.9 million DWT. Broken
down in categories, this equals 2.7 per cent
of the bulk tonnage on order and 3.5 per
cent of the tankers, but 10.1 per cent of
chemicals tankers, 9.2 per cent of gas carriers
and 13.3 per cent of the car carrier
capacity. This testifies what we all know,
that the Norwegians are strong in niches
but losing ground in the large bulk trades.
Whereas statistics show that all the
major maritime nations have had substantial
growth in tonnage, except for Norway
and the US.
Stagnation or growth?
According to the NSA figures, the Norwegian
fleet dwindled from 55.5 million DWT
in 1999 to 37.1 in 2006, or by 29.3 per cent,
when the trend turned. By January 2008 it
had recovered to 40.9 mill DWT.
The question is: Was this a genuine
decline, or a reflection of the changing
structure of the fleet? The departure of
VLCCs and large bulkers and a rising share
of expensive supply ships?
Definitely both. The number of vessels
kept up between 1999 and 2006 quite well,
despite sale of tonnage. But over time, from
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66 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

1996 to 2008, the number of vessels has
increased by 31 per cent, to 1,820 vessels.
The long-term trend, then, is not as bad
as it looks. And it is particularly uplifting
that 735 new ships have been ordered and
600 acquired second-hand since the beginning
of 2004.
The Norwegians are strong
in niches but losing ground
in the large bulk trades.
The shipping policy
The mere title of the new whitebook on
shipping, presented by Dag Terje Andersen,
the minister of industry & trade, on October
3, 2007, was promising: “Steady on”.
The subtitle a little more dubious, but wellintended:
“A strategy for environmentallysound
development of the maritime industries”.
Behind the political ambition to
become the world leader in environmental
sea transportation and some allotted grants
for R&D, the main points were quite constructive:
• Globalization and conditions
• Environmentally-friendly
maritime industries
• Maritime competence
• Maritime R&D
• Innovation and shortsea shipping
The main points for the shipping industry
was the introduction of a tax regime
along an EU model, with competitive
terms. Also, the net-wage system was to
be maintained for Norwegian seafarers; in
effect mainly to offshore vessels and ferries
in international trade.
Although the good news to a large extent
was overshadowed by the deferred tax
debacle, the whitebook was well received.
Back to Norway
A telling example of the content was the
decision by the owners of Höegh Autoliners
Ltd to relocate the company from Bermuda
to Norway, even though they would
have to pay NOK 1.2 billion in taxes
before doing so. The company would have
to move to a country that had a taxation
agreement with the US to avoid double
taxation. Prior to the decision, Höegh had
considered domiciles like Cyprus and Sin-
The political process of preparing a
new shipping policy with conditions
comparable to eu regimes had
been progressing under promising
signals from Dag Terje Andersen, the
minister of trade and shipping. A
new set of conditions was prepared,
but the issue remained how to
terminate the 1996 deferred tax
scheme.
The crucial aspect was the opportunity
to book the net profit from shipping
operation (though not financial gains)
without tax, but every profit paid to the
shareholders would be liable to taxation
– 28 per cent capital tax (as well as company
profit tax and personal taxation on
the shareholder. Most of the larger companies
made the necessary moves to be
able to benefit from the scheme.
The hot issue for the centre-left government
in an election year was how to
handle the deferred tax for the shipping
companies. The cabinet was divided.
However, a report leaked by the Ministry
of Finance to the business daily Dagens
Næringsliv a couple of weeks before the
election in September, made any tax
remission untenable for the Socialist
party.
No option
Faced with a collapse of the coalition,
the prime minister Jens Stoltenberg, had
no option but to insist that the tax of
NOK 22 billion had to be paid.
And so it was. The Storting majority
could not be swayed, despite all efforts,
and passed the tax issue as part of the
new shipping policy on November 27,
2007. The Labour party had tried to
sweeten the pill by offering to spend a
third of the payable amount on environmental
devices, in the way that it should
count as equity. Alas, such a scheme
proved impossible to adapt to accounting
regulations.
To a proficient lobbying organization
like NSA, losing the tax battle was as dramatic
as it was painful. It was the most
SHIPPING AND SHIP MANAGEMENT
on deferred taxes
and political failure
After losing the tax battle, Marianne lie
was asked to leave her post as managing
director of NSA.
damaging political failure ever suffered
since the contracting ban of 1947. Something
had gone terribly wrong.
Opinions are divided, but much seems
to have hinged on the NSA strategy to
run the tax battle on its own, rather than
seeking a broad industry basis through
Maritimt Forum, where powerful trade
unions are members. This left the NSA
strategy without a back cover, betting it
all on rational arguments alone. And reason
alone seldom suffices in politics.
Clean sweep
At an extraordinary board meeting at
Gardermoen on January 13, the NSA
board with a majority of nine to one
decided to ask Marianne Lie leave her
post as managing director.
In the aftermath of Marianne Lie’s dismissal
the NSA made a clean sweep of
the tax issue, accepting the outcome and
closing the book. From now on the shipowners
wished to have a better message,
not as tax-grumblers but as responsible
environmentalists with a zero-emission
target. Taxes have to be paid, but then
the door to a competitive shipping
regime opens, in fact, all that the shipowners
had been vying for.
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 67
nSA

J J uglAnd group
SHIPPING AND SHIP MANAGEMENT
Norwegian owners still have a commitment in the dry bulk trade, like Ugland Bulk’s Fermita.
gapore, but concluded that the benefit of
bringing the organization and the formal
domicile together in Oslo would justify the
move. Bergesen Worldwide, on the other
hand, has taken the tax issue as a serious
breach of confidence and has begun to
move BW Gas to Bermuda location.
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The obvious question is: How reliable is
the new Norwegian set of conditions?
For one thing, it is based on political
consensus. The 1996 shipping tax scheme
was always controversial, as was the tax
refund scheme for seafarers. Now, twelve
years hence, there seems to be a general
New office...
political understanding of the nature and
importance of the maritime industries. The
only question might be whether the politicians
will manage to leave the policy alone
without eroding the conditions, as done
with the 1996 whitebook.
It is also positive that the whitebook
focuses on maritime competence and takes
certain steps to strengthen recruitment and
education. But only a vibrant and peoplefocused
industry can attract young people.
Invest in human talent
In a wider context the recent boom appears
to have strengthened the shipping industry
in two vital respects:
One is the acceptance of the fact that
shipping companies need to invest in
human talent and take responsibility for
grooming maritime competence.
The second is a renewed commitment
to shipping and offshore operations. This
not only goes for investment in new ships
but also for the breeding of new ventures,
helped by access to equity and eager banks.
In short, a time of promises as economic
woe gather at the horizon.
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ALExANDR KALININ / SEANEwS.Ru
SHIPPING AND SHIP MANAGEMENT
On April 29, Sovcomflot took delivery of the Transsib Bridge. Last year, only two out of 16 new cargo vessels
were registered in the RIRS, but the situation is now gradually changing.
Law on second
register ineffective
The Russian International Register of Ships (RIRS) Act passed in late 2005 was
supposed to facilitate the return of Russian vessels registered in offshore
zones. Yet, this has still not begun on a large scale. The reason is as simple as
it is traditional for Russia: the cumbersome bureaucratic apparatus that was to
prepare the necessary legislation has been slow to start and most of the legal
issues connected with the RIRS were only settled in November 2007.
The passing of the corresponding federal
law and creation of the RIRS was designed
to make taxation and organisational conditions
for Russian shipowners equal
with their foreign colleagues. It was also
designed to provide certain advantages to
the shipowners who list their vessels in
the new register (compared to the Russian
Maritime Register of Shipping) and thus
help the shipowners to remain competitive
without having to abandon the Russian
flag. One of the goals of the RIRS was also
to attract those foreign vessels whose trading
manner would require them to register
in Russia, for instance for trading in the
Arctic region.
Russia
As estimated by the Russian Ministry of
Transport, the introduction of the second
register could increase the national treasury’s
annual revenue by about USD 2 million
from the registration of vessels alone,
while the costs of establishing and main-
70 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

taining the register would be only USD
35,000–50,000 per annum. The ministry
believes that within five years of the federal
law being passed, the income tax paid
by crews of the ships likely to be listed will
reach or exceed USD 20 million.
Many unsolved issues remaining
Despite the fact that the RIRS law reduces
the tax burden (property tax, profit tax and
transport tax) considerably, the process of
creating the second register has not been
very active because the mechanism for
its functioning has not yet been properly
thought through.
The majority of shipowners think that
the law requires a considerable amount
of supporting legislation to determine the
exact procedures of interaction with customs,
taxation and other control and direct
registration bodies. Some of the necessary
legislation has still to be passed, while some
was passed only recently.
Take, for instance, the issue of vessel
insurance, a vital aspect for shipowners. In
accordance with previous legislation Russian
shipping companies were not allowed
to insure their vessels abroad, but the maritime
insurance practices of Russian insurance
companies do not open for very large
amounts of compensation. That is why
mostly river-sea type vessels have been listed
during the first two years of the RIRS.
Moderate insurance cover is acceptable
for such vessels. Large shipowners prefer
to insure their vessels with foreign companies
that provide higher insurance cover.
The law allowing insurance of RIRS vessels
by any insurance company, in Russia
or abroad, was only passed in November
2007.
Not keen on registering
It was only in March 2008 that the Russian
Ministry of Finance set the long-promised
zero VAT rate on sales of newbuilt vessels
on the condition of their registration in the
RIRS. That is why, even with the introduction
of the second register, shipowners were
until recently not keen on registering their
vessels (especially new ones) under the Russian
flag. Of the 16 cargo vessels built last
year, only two were registered under the
Russian flag while the rest went for flags of
convenience.
We are now seeing signs of the situation
gradually changing. From October 2007
to January 2008 the RIRS registered four
large new vessels. Deliveries of a further
PäR-HENRIK SjöSTRöM
jOACHIM SjöSTRöM
The 7,365 DwT Sinegorsk, built in 1991.
27 vessels with a total DWT of 1.6 million
tons are planned for 2008. Of these vessels,
according to the data of the Ministry
of Transport, seven will be registered under
the Russian flag. Five of these are tankers
belonging to the Russian State Shipping
Company Sovcomflot, designed for operations
in the shelf conditions of the Far
North.
Breakthrough still a long way off
At present, approximately 200 vessels totalling
about 800,000 tons are listed in the
RIRS. According to the Russian Ministry
of Transport, at the beginning of 2008 Russia
controlled 1,471 vessels with a total
dead-weight capacity of 16.2 million tons,
and 63.9 per cent of that tonnage was operating
under foreign flags.
In the two years since the passing of the
SHIPPING AND SHIP MANAGEMENT
Due to legal issues on insurance of vessels, mostly river-sea type vessels have been listed
during the first two years of the RIRS.
Russian International Register of Ships
Act, it has become evident that until all
legal issues concerning the practical interaction
of the vessels and their owners with
the state are resolved, there will be no real
breakthrough in the transition of Russian
vessels to the Russian flag. Apparently the
second register will in the near future be
listing large cargo vessels built for coastal
transportation of oil and gas from the Arctic
region.
Alexey Klyavin, Director of the Department
of National Policy on Maritime and
River Transport with the Russian Ministry
of Transport, believes that attracting the
fleet to the second register will be a long
and capital-intensive process, as it is one
that even countries in the West have needed
between three and five years to complete.
artur gusseinov
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 71

BENT MIKKELSEN
SHIPPING AND SHIP MANAGEMENT
Kremlin consolidating
its tanker assets
Sovcomflot’s Romea Champion by the Great Belt Bridge, Denmark.
December 2007 saw the completion
of the merger between Russia’s
two largest state-owned shipping
companies: Modern Commercial
Fleet (Sovcomflot) and Novorossiysk
Shipping Company (Novoship).
In essence, Sovcomflot incorporated the
second largest shipping company in Russia,
which had owned 56 vessels prior to
the merger (predominantly a fleet of modern
tankers). Thus, in a rather short period
for Russia (six months instead of the ninemonth
period allowed by the president),
the decree of Vladimir Putin signed in
June 2007 was implemented and the largest
tanker company in Russia established, its
fleet totalling 124 vessels with a total deadweight
of 8.7 million tons.
Kremlin in full control
According to the latest estimates, the merger
has created a carrier with assets totalling
USD 5.3 billion – one of the top ten largest
shipping companies in the world. When
we assess the newly established company in
the context of its activity, the result is even
more impressive: the new tanker company
is definitely among the top five global carriers
of gas and oil products.
As stated in the official Russian Gazette,
the Government of the Russian Federation
is to register the company in the list of strategically
important Russian enterprises that
must be controlled by the state, as stipulated
by legislation, even if their shares are
made available via IPOs.
The Kremlin’s wish to retain independence
in the field of sea transportation
of energy resources is also evident in the
selection of Sovcomflot’s leaders. Until
December 2004 the board of directors
was presided over by Dmitry Kozak (one
of Putin’s inner circle; he is now Minister
for Regional Development). The next
Chairman of the Board of Directors to be
elected (on the initiative of the administration
of the President, several sources claim)
was Igor Shuvalov, also a close ally of Putin
and believed to be one of the most influential
leaders in the government apparatus
and de-facto representative of the Russian
President in the G8.
Natalya Odintsova, an analyst with the
Prospect Investment Company, notes that
in this way the Kremlin is strengthening its
control of strategic enterprises, i.e. appointing
“commissars” from the Administration
of the President to preside over ambitious
directors-generals. (A similar example is the
United Shipbuilding Corporation, where
Sergey Naryshkin, Deputy Chairman of
the Government of the Russian Federation,
was appointed Chairman of the Board of
Directors). And in fact it was Igor Shuvalov
who initiated the merger of Sovcomflot
and Novoship.
Putin ‘asks’ to remember the yards
The ‘state approach’ provided by the Kremlin
is one of the main reasons Sovcomflot
is virtually the only Russian company placing
building orders with both foreign and
Russian shipyards.
“We must bear in mind that we are in the
process of establishing a major shipbuilding
company, which will bring different state
assets together in one organisation”, Putin
reminded the Sovcomflot leaders, talking
about the need for cooperation with Russian
shipbuilders. “I very much hope that
in this respect the newly formed shipping
company will take into account the possibilities
offered by the Russian shipbuilding
industry.”
Also in the summer of 2007, Sovcomflot
and the Admiralty Shipyard entered into
a long-term agreement on delivery to the
merged company of vessels for transportation
of oil and gas. “I would like to inform
72 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

you that we and our colleagues at the
Admiralty Shipyard have already begun
work to build ships here in Russia for the
transportation of 70,000 cubic metres of
liquefied natural gas”, reported Sergey
Frank, Director-General of Sovcomflot,
during his meeting with Vladimir Putin.
The deadweight capacity
of the fleet will increase by
more than seven per cent
in 2008.
Presently, 25 per cent of all of the newbuilding
orders for Sovcomflot has been
placed with the Admiralty Shipyard, for
a total of USD 300 million. Sergey Frank
assured the President that Sovcomflot was
already in discussions with the United Shipbuilding
Corporation and that the shipbuilders
are aware of which orders are of
primary interest to the new company. First
and foremost, they are vessels for the development
of the Russian continental shelf.
Dynamic expansion
The current total portfolio of orders of the
merged Sovcomflot is 31 vessels with a total
deadweight of 2.8 million tons. At the end
of 2008 the fleet will have 130 vessels with
a total deadweight of 9.3 million tons.
As Sergey Frank explained at the February
meeting of the Board of Directors: “In
accordance with the current shipbuilding
programme, the deadweight capacity of the
fleet will increase by more than seven per
cent in 2008, partly due to the launch of
high-tech vessels like LNG gas carriers and
Arctic shuttle tankers.” At the same time,
the average age of the tankers will be 5.9
years, which is almost half the average age
of the global tanker fleet.
In the near future the existing range of
READ THE
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NEWS ON
www.shipgaz.com
SeRGeY FRANK
47 years old, Director-General of JSC
Sovcomflot.
1984–1989: Deputy Director of the Far Eastern
High School of Maritime Engineering.
1989–1995: Head of the External Economic
Links Service of the Far Eastern Shipping
Company (FESCO); Deputy Head of FESCO
for economics and finance; Deputy Director-
General of the FESCO joint stock company.
1995–1996: Deputy Director of the Maritime
Transport Department of the Ministry of
Transport of the Russian Federation.
1996–1998: Deputy Minister, First Deputy
Minister of Transport of the Russian Federation.
1998–2004: Minister of Transport of the
Russian Federation.
October 2004–present: Director-General of
Sovcomflot.
Also Chairman of the Board of Directors of JSC
Novoship, which is now part of Sovcomflot.
Sovcomflot’s core activities (transport of gas
and oil products, including ice-class vessels
capable of operating in the Far North, such
as shuttle tankers in the Arctic region) will
be expanded, with several new priorities.
Sovcomflot intends not only to act as a
carrier of oil and gas, but also to cooperate
with leading Russian companies in the
building and operation of oil terminals, as
well as in the modernisation and upgrading
of trans-shipment facilities in Russian ports.
The following contracts are just some of
the major that will lead to expansion and
diversification of the biggest Russian shipping
company. In January, a contract was
signed with Transneft for cooperation in the
field of export of Russian oil and gas via the
Leningrad, Primorsk and Krasnodar regions.
In the same month Sovcomflot succeeded
in attracting a useful investment financing
partner, Vnesheconombank, one of the
largest Russian banks. The parties entered
into a partnership agreement for the development
of long-term and mutually beneficial
cooperation in shipbuilding, shipping
Tel. +46 8 592 591 00
info@vico.se www.vico.se
and the purchase and operation of vessels.
The parties stated: “The agreement is
aimed at achieving the tasks set out in the
special federal programme Main areas of
development in civil maritime machinery
from 2009 to 2016.”
In February the merged Sovcomflot and
the Vyborg Shipyard entered into an agreement
on cooperation in building vessels
for the transport of liquefied gas, tankers
for chemicals and – new for the company
– ships designed for the transport of semisubmerged
drilling rigs and oil platforms,
support vessels and the technical fleet
required for work on the shelf. Valery Levchenko,
Director-General of the Vyborg
Shipyard, says that the company hopes to
enter into contracts with the client by the
end of the year.
Agreement with Gazflot and Rosneft
In March, Sovcomflot and Gazflot (a subsidiary
of Gazprom) agreed on the joint
servicing of Gazprom’s current and future
shelf projects and on the transportation of
its products.
Sovcomflot’s contract portfolio also
includes an agreement with Rosneft, begun
in 2007, to establish a joint enterprise on
the basis of the Rosnefteflot (a subsidiary
of Rosneft) for the servicing of Rosneft’s
maritime and shelf projects in the Arctic
region and the Far East. The extent of Sovcomflot’s
involvement has not been made
public, but experts from the Kommersant
newspaper believe that the partners will
have almost complete parity in ownership
of the company.
This record of recently signed contracts
allows us to assume that Sovcomflot’s
strategy will comprise the development of
transport services on shelf projects and the
achievement of the previously stated goal
of becoming the world leader in the field
of shuttle transportation of energy resources
in ice conditions in 2008.
artur gusseinov
Ultrasonic cleaning
of filters!
Custom
designed systems
Effective and
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SHIPPING AND SHIP MANAGEMENT
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 73

olf p nilsson
SHIPPING AND SHIP MANAGEMENT
The opening ceremony of the industry meeting days at the Maritime Academy in Kalmar attracted more than
60 companies eager to recruit new officers. The future also looks bright as ship officer education has become
increasingly popular in Sweden, with full first-year classes at both maritime academies.
Tonnage tax still
the big issue
Owners appeared, slowly, to be
coming to Swedish shipowners is
obviously a patient breed. For years,
the industry has waited for an answer
from the government to their call for
a tonnage tax scheme.
sweden
During these years, government has shifted
from a left-green one to a right-liberal
one. The issue has been thoroughly investigated
and irrespective of the colour of
the government, there has always been an
overwhelmingly and stable majority in the
Swedish Parliament in favour of the introduction
of a tonnage tax in line with every
other maritime nation in the European
Union.
Before the latest election in 2006, the
The SwediSh FleeT, Jan 1, 2008
Above 300 gt
numbers MdwT
Swedish flag 232 2.51
Foreign flag 344 6.89
Total 602 12.52
average age
Based on number Based on dwT
Swedish flag 19.6 9.9
Foreign flag 12.9 8.6
Source: Lighthouse
Conservative party led by the present
Prime Minister Fredrik Reinfeldt filed a
Parliament bill in which it slammed the
red-green government’s slow handling of
TOp 10 regiSTerS, Jan 1, 2008
Tonnage controlled by Swedish owners
(MDWT)
Sweden 2.54
Norway (NIS) 0.97
Bermuda 0.91
Liberia 0.52
Singapore 0.43
UK 0.42
Denmark (DIS) 0.39
Marshall Islands 0.39
Finland 0.37
France (FIS) 0.36
Source: Lighthouse
the issue and urged it to introduce a tonnage
tax bill a s a p. Fredrik Reinfeldt won
the election, but today, after one and half
year in office, nothing has happened.
74 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

What as seen by many as even worse is
that the government refuses to say where
the problem lies. The question has been
raised numerous times, not least in the
Parliament, and the only answers given by
the minister of finance Anders Borg is that
”the question is currently being processed
in the government office” and that ”the
government is expecting to present a bill to
the Parliament within this length of office”,
which is running to the next election in the
autumn 2010.
risk for flagging-out
No one from the Swedish government
showed up when the Swedish Shipowners’
Association held its Annual General
Meeting in Göteborg in April. This caused
a widespread annoyance among the participants
as many had hoped for someone
to shed the light on the Swedish government’s
thoughts on the tonnage tax.
Even if a tonnage tax is introduced in the
coming years, more could have been asked
for when it comes to the Swedish government’s
sense of timing. The lengthy political
process and the lack of an even playing
field for the national shipping industry has
meant that one of the biggest booms ever
experienced by the shipping industry has
passed by Sweden, without Swedish shipping
being able to fully take advantage of
the business opportunities.
The frustration continues to grow within
the Swedish shipping industry. Broström
has declared that the company will invest
abroad and that no new vessels will enter
the Swedish registry for the time being.
Other shipowners have the same view.
The absence of a tonnage tax scheme
is a factor that could lead to flagging-out
of Swedish vessels. Another is the lack of
qualified seafarers, primarily officers. This
was reflected in the recently closed negotiations
on a new collective bargaining agreement.
The negotiations resulted in a new threeyear
deal where officers got a general pay
increase that was around 50 per cent above
the general level on the Swedish labour
market. The lack of qualified officers is of
course not a problem isolated to the Swedish
maritime labour market, but a unique
Swedish manning agreement is complicating
matters.
The Swedish TAP agreement allows
Swedish shipowners to temporarily employ
foreign, non-EU seafarers on special terms
on Swedish-flagged vessels. The agreement
SwediSh ShipS On Order
COnFirMed FeB 1, 2008
Ship type number
Tankers 37
Ro-ro/Lctc 11
Ro-pax 4
AhTS 4
Semi-sub 4
Drillship 2
Passenger 2
Country of build number
South Korea 13
Turkey 13
China 9
Croatia 7
Russia 6
Spain 4
Germany 3
Japan 2
Finland 2
Netherlands 2
Singapore 2
Norway 1
Source: Scandinavian Shipping Gazette
however limits this to 50 per cent of the
crew on a specific vessel or to 50 per cent
of the seafarers employed in the company’s
Swedish-flagged fleet.
healthy numbers of applicants
A consequence of this is that manning
of a Swedish-flagged vessel requires more
Swedes than under a foreign flag which
could be manned with Swedes in key
positions and with the rest
of the crew recruited from
elsewhere. It also means
that increased salary costs
hits Swedish-flagged vessels
harder than foreign-flagged
vessels. The education and
training to become an experienced
officer is a long process,
but for the future, the
recruitment situation in Sweden
seems bright.
The Swedish Maritime
Academies in Göteborg
and Kalmar reports healthy
numbers of applicants to the
Master Mariner and Chief Engineer study
programmes and all available study places
at this autumn’s study start are filled.
The Kalmar school also reports a new
record: of 60 first-year students this year,
16 are girls.
According to statistics compiled by
Lighthouse, the new maritime competence
centre established by Chalmers University
of Technology, the School of Business,
Economics and Law at Göteborg University
and the Swedish Shipowners Association,
Swedish shipping controlled a fleet of
615 vessels of 9.5 million tons deadweight
on 1 January 2008. Of these, 271 vessels of
2.5 million tons deadweight sailed under
Swedish flag. The five largest
flags in the Swedish controlled
fleet are Sweden, Bermuda,
NIS, Liberia and Singapore,
all on the Paris MOU
white list.
In May this year the Swedish
order book consisted of
some 60 vessels, ranging
from passenger vessels for
domestic trade to the latest
USD one billion order for
a drillship placed at Samsung
Heavy Industries by the
Stena AB subsidiary Stena
Drilling. More than half are
planned for deliveries this year and next.
The order book is dominated by product
tankers but also includes mega large car
carriers, ro-paxes, semi-submersible service
rigs and anchor handling tugs.
rolf p nilsson
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 75
pawel flato
SHIPPING AND SHIP MANAGEMENT
220
200
180
160
140
120
100
80
60
40
20
0
Bulker
Container
The Swedish Prime
Minister Fredrik Reinfeldt
(the conservative party).
The Swedish fleet Jan 1, 2008
Number of vessels, above 300 gt
� Swedish flag
� Foreign flag
Dry cargo
Offshore
Passenger/ferry
Reefer
Tanker
Ro-ro
Misc
Source: Lighthouse
F
S

First Class bulk carriers: a new perspective
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Phone +49 40 36149-0 · Fax +49 40 36149-200
headoffice@gl-group.com · www.gl-group.com
bulkers
At Germanischer Lloyd we focus on detailed structural solutions for bulk carriers. Our smart
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new perspective on bulk carriers. Why not contact us to find out how you can benefit?

it & communications
Editor: Petter Arentz ~ Phone +47 33 40 12 00 ~ E-mail: petter@shipgaz.com
Wired Ocean
– broadband internet at sea
Wired Ocean broadband internet at sea has
been installed on board all seven vessels in
the Godby Shipping Fleet. The installation
commenced in September 2007 and was
carried out by Telemar Finland and completed
when the final vessel in the fleet,
Miranda, took delivery in February this
year.
Wired Ocean is a marine broadband system
designed to deliver shore to ship data
via a vessel’s satellite TV antenna. This
reduces incoming data costs, the largest bill
for internet use at sea. Wired Ocean is ideal
for high volume applications such as internet
browsing, downloading e-mail with
attachments, obtaining electronic manuals
and weather and navigation data.
Integrating the Wired Ocean satellite
Broadband Server (SBS) into a vessel’s
communication network is the key to lower
The Jotron Group has launched a new
range of EPIRBs (Emergency Position
Identification Radio Beacon) and a new
SART (Search and Rescue Transponder).
In addition to introducing a range of
new technical features, Jotron has made the
new products as environmentally friendly
as possible and is still meeting the required
international standards.
The two new EPIRBS are called Tron
40S MkII and Tron 40 GPS MkII and the
new SART is introduced under the name
of Tron SART20. Both the EPIRBS and
the SART come with a five years warranty.
The new EPIRBS have been designed
to exhibit a greater visibility. A state of
costs and extra functionality. The system is
a good complement to vessels already fitted
with, or intending to, buy a DVB-S television
antenna as this is how Wired Ocean
provides the shore to ship data. GPRS or
other sitcoms systems such as VSAT, Fleet
and the recently launched FleetBroadband
are required for data from ship to shore.
The SBS also offers strong functionality
as a communications hub. It can be used as
a switching device for a vessel’s entire communications
network and a caching system
means that only new content of previously
viewed web pages needs to be downloaded
for faster and economical internet browsing.
For more information, please contact:
Victor Barendse, Tel: +44 (0)207 060 10 49
e-mail: vbarendse@wiredocean.com
www.wiredocean.com
New and environmentally friendly EPIRB and SART
the art LED-module has been developed
comprising a unique reflector. Together
with an optimal lens, the EPIRB meets
the new and more strict requirements. The
new and intense LED-light will assist the
work of any Search and Rescue Teams and
improves detection during difficult weather
conditions.
Both the new EPIRBs and the SART
have a new release mechanism that simplifies
and facilitates manual operation, especially
under extreme conditions and at low
temperatures. The EPIRBS and the SART
are incorporated into Jotron recycle program.
The new generation of products will
comply with RoHS and contain no lead-
Electronic logbook
from Kongsberg
Kongsberg Maritime has taken an order to
install the K-Log Electronic Logbook on
board the Petroleum Geo-Service (PGS)
owned new building the Ramform Sovereign
built at Anker Yards. The Sovereign is
the third generation Ramform vessel and is
the most advanced seismic vessel today.
The K-Log will be integrated into a
Kongsberg Seatex HMS100
Helideck Moni toring System
and a third party IAS
system on board the
Ramform Sovereign,
which demonstrates
its integration qualities
and the ability to
reduce the manhours spent on
completing logbook entries. By integrating
sensors from various critical sub-systems
with K-Log, many logbook entries can be
automated and sent to the shore office.
Kongsberg Maritime, the only company
who is able to offer multiple Flag State
approvals, is starting to see such systems
specified for new buildings on a more regular
basis and has reported a significant positive
upturn in the number of enquiries.
For more information, please contact:
Christina Fjellstad, Tel: +47 3303 2411
e-mail: christina.fjellstad@kongsberg.com
www.kongsberg.com
soldering. Another important
environmental
aspect is the use of a
new Non-Hazardous
battery assembly.
A product
classified as Non-
Haz considerably
eases distribution,
hand ling and the
cost of transportation.
For more information, please contact:
Jotron AS, Tel: +47 331 397 00
e-mail: sales@jotron.com
www.jotron.com
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 77

technical news
Editor: Robert Hermansson ~ Phone: +46 40 15 61 44 ~ E-mail: robert@shipgaz.com
Highly specialized
OCV on order
The Norwegian company North Sea Invest
AS has placed an order with Astilleros Barrera
in Vigo, Spain, to build a 145 metres
long an 30 metres wide Offshore Construction
vessel (OCV). The delivery is
scheduled for 2010. The OCVs are multipurpose
ships for the gas and oil industry
and are used for installations of complex
platforms and extraction systems as well as
for laying of pipelines.
The vessel under construction in Spain
can accommodate more than 120 crew
members. Among the tailor-made equipment
are two heave compensated cranes
that adapt hydraulically to prevailing sea
movements as well as a helipad. The ship is
fitted with five Voith Schneider Propellers
(VSP) type VSP 36R6 EC/280-2, three in
the stern and two in the bow. The propulsion
machinery is diesel-electric and consists
of five electrical motors with a total
output of 19,000 kW.
Roll stabilization
Among the special features is a redundant
dynamic positioning system (DP2) that
will keep the ship at a given working position
as well as the Voith Roll Stabilization
(VRS) that reduces rolling motions when
seas are high.
The maximum sailing speed is 16 knots.
The vessel has a large deck surface for preparatory
work and a possible area of application
can be in Santos Bay, just outside
Rio de Janeiro , where oil reserves recently
were discovered at 3,000 metres depth.
For more information, please contact:
Adela Trstenjak, Tel: +49 7321 37-24 94
e-mail: adela.trstenjak@voith.com
www.voithturbo.com/marine
The OCV on order from Spain.
New free fall lifeboat
for tankers and bulkers
The new Schat-Harding FF750 lifeboat and
davit LA750 is a fully integrated free fall
lifeboat and davit system specially designed
as a unit for tankers and bulk carriers. The
capacity is 32 persons and the lifeboat and
davit have been designed and tested in
Norway and are produced in China. The
first deliveries will take place approximately
when this magazine is published.
One metre saved
The boat and davit have been designed
from scratch using Schat-Harding’s accumulated
experience with free fall. The
system has a skid angle of 45 degrees and
that saves almost one metre in length for
the installation when compared to older
designs with similar capacity. Inside the
boat, the seating has been reconfigurated
to be more spacious due to the fact that
the seafarers of today are bigger than the
standard size and weight still used in international
regulations. The FF750 has specially
adapted seats and seat belts to make
boarding easier and give the crew better
protection.
The boat is made from FRP (Fibreglass
Reinforced Polyester) and has a length of
8.97 metres. The weight fully equipped is
4,820 kg and 7,700 kg when fully loaded. It
has been safety tested from 30 metres and
the certified drop height is 23 metres. That
is more than sufficient for the merchant
ships it is designed for.
The bow has been configured to give a
soft water entry and reduce G-forces on the
occupants and at the same time give optimum
surfacing speed for the typical merchant
ship drop heights and allowing the
boat to speed clear of the ship under the
drop momentum.
Simulator
Special attention has been paid to the
design of the safe and efficient retrieval system
and also to a free fall simulator system
which allows crews to train in safety.
For more information, please call:
Per-Einar Gjerding, Tel: +47 5348 3682
e-mail: per-einar.gjerding@schat-harding.com
www.schat-harding.com
78 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

Flexibility
FALKVARV – SERVICE SPECIALISTS FOR ALL TYPES OF TONNAGE
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following dimensions
Dock 1 Dock 2
Max. ship length 120 m 155 m
Max. ship width 19 m 25 m
Lifting capacity 4,500 tons 7,500 tons
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Length 250 m
Depth 7 m
Crane capacity 36 tons
• Rebuildings
• Class works
• Chocking of
main engines
• CAP-measuring
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Telephone +46 (0)346 - 141 50 • Telefax +46 (0)346 - 819 85
Falkvarv AB, situated on the
Swedish west coast between
the strait of Öresund and
Gothenburg, is a shipyard characterised
by high technical expertise
and solid long-term experience.
A well-developed network of
highly skilled sub-contractors and
collaboration partners enables us
to offer a high level of capacity at
short notice.
E-mail info@falkvarv.se www.falkvarv.se

When you
don’t know.
Heavy fuel oils pose unpredictable risks. Besides varying in density, they
contain unknown amounts of catalytic fi nes that can damage your engine.
This is why Alfa Laval’s S-separator is built for true separation performance.
Using Alcap technology, the S-separator automatically adjusts to changing
oil composition. In fact, it was the fi rst to live up to the Marine Separation
Performance Standard (CWA 15 375).
Other S-separator features include the CentriShoot discharge system
and the CentriLock bowl locking mechanism. With these unique innovations,
the S-separator saves money by minimizing waste, sludge and metal-tometal
wear.
To learn more, www.alfalaval.com/marine
S-separator
fleet news
Editor: Pär-Henrik Sjöström ~ E-mail: par-henrik@shipgaz.com
The Finnjet to be
It seems like the long career of the car and passenger ferry Finnjet
finally would be coming to an end. It is reported that the ship
has been sold to be broken up in India.
Renamed Da Vinci, the ferry is now at Genoa. According
to Equasis, before the last change of ownership the vessel was
owned by the Bahamas-registered company Cruise Ship Holdings
Six and managed by Club Cruise Entertainment in the
Netherlands. The intention of that owner was apparently to
rebuild her into a cruise vessel.
However, aged 31, this famous ferry is already quite old and a
refit into a cruise vessel would no doubt have turned out to be
very costly. It might also be questioned whether a conversion at
all would have turned out to be successful. After all, the Finnjet
is a very special vessel, with a hull designed for high speed.
One of a kind
There is indeed no other vessel in the world like the Finnjet.
When she was delivered by Wärtsilä Helsinki shipyard in 1977
for Finnlines’ service between Helsinki and Travemünde she
was by far the fastest ferry in the world. The main idea was to
replace two older ferries with this new one. Powered by two Pratt
& Whitney gas turbines with an output of totally 75,000 BHP,
the 212.81 metres long vessel could maintain a service speed of
30 knots.
But the world was not yet quite ready for large fast ferries.
The fuel economy of the gas turbine machinery soon turned out
to be disastrous and already in 1981 additional diesel-electric
propulsion was fitted for slower crossings during off season. In
1986 the vessel was acquired by Effoa – Finland Steamship Co.
Ltd. and Silja Line took over manning and operations. She then
sailed in Silja Line’s colours from 1987 until she left the Baltic
Sea for good in 2005. In 1997 the year-round service between
End of an era as the last Shell
The sale of the product tanker Magn from Shell Føroyar P/F marks
the end of an era, as the tanker seems to be the last one trading for
an oil major under own flag. Over the last couple of decades the
oil majors have sold off their own tonnage and instead taken up
chartered ships for their distribution of liquid products.
Bought in 1996
The Magn was purchased by Shell Føroyar P/F as late as July
1996 after a long process lasting nearly eight years from the first
visit on board the German tanker Hornisse to the final signature
on the dotted line. Under the Faroese flag, the Magn has been
used for import of petroleum products, mainly from the Norwegian
storage facility on Sola and from the refinery at Mongstad
to Faroese ports.
The tanker, built in 1983, has now fallen for the 25-year limit
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

oken up
KrZYSZTof BrZoZA
Finnjet in her original colours.
Helsinki–Travemünde was closed down. Instead the ferry was
introduced on short cruises from Helsinki to Estonia during
off-season. In the next summer season the traffic to Germany
commenced, but now a call to Muuga in Estonia was included.
In 1999 Travemünde was replaced by Rostock and Muuga by
Tallinn in the summer service between Helsinki, Estonia and
Germany.
Laid up in Bermuda
From 2004 until the end of her career in the Baltic Sea the
Finnjet was employed on the summer route St Petersburg–
Tallinn–Rostock.
Already put for sale, in September 2005 the Finnjet was chartered
as an accommodation ship for students in Baton Rouge,
USA, after the hurricane Katrina. When the charter ended she
was laid up in Bermuda in June 2006. The owner Sea Containers
finally sold the vessel in early 2008 to Club Cruise.
pär-henrik sjöström
tanker was sold off
within the Shell Group. In April the tanker was handed over
to Johny Vestvik in Soltin Marine, which already had several
ships trading under Danish flag. One of them is the Pia V, ex
Pia Theresa, which has recently been sold to Cyprus to a new
life as a bunker tanker. The small tanker with stainless steel tanks
was purchased from Herning Shipping in 2006 and was laid up
throughout 2007. Soltin Marine also trade the Dart ex Danish
Dart and the Maria Soltin under the Danish flag and both are
working in trading liquids for the offshore industry.
The Magn has been renamed the Amalie and is a product
from Sieghold Werft in Bremerhaven to Carl Büttner in Bremen.
Until the sale to Shell Føroyar it was mainly trading with lube
oils in Europe. It is at 2,050 DWT and is powered by a MaK
engine type 6M452AK to a service speed of 11 knots.
bent mikkelsen
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

MARKET REPORTS
Newbuilding contracts in the Nordic market
Month Owner Nat Size Type Shipyard Delivery Value Remarks
March Herning Den 8,000 tanker Nantong Mingde 10 USD 20 m
Herning Den 8,000 tanker Nantong Mingde 10 USD 20 m
April Golden Ocean No 80,000 bulk Zhousan Jinhaiwan 11 USD 52 m
Golden Ocean No 80,000 bulk Zhousan Jinhaiwan 11 USD 52 m
Nordane Shipping Den 60t bp tug Irving Shipbuilding 09
Nordane Shipping Den 60t bp tug Irving Shipbuilding 09
Nordane Shipping Den 72t bp tug Irving Shipbuilding 10
Nordane Shipping Den 72 bp tug Irving Shipbuilding 10
P D Gram No 20,000 pcc Nantong Mingde 11 USD 58 m 4,200 ceu
P D Gram No 20,000 pcc Nantong Mingde 11 USD 58 m 4,200 ceu
P D Gram No 20,000 pcc Nantong Mingde 11 USD 58 m 4,200 ceu
P D Gram No 20,000 pcc Nantong Mingde 11 USD 58 m 4,200 ceu
Flex LNG No 170,000c LNG Samsung 3.12 USD 454 m regas
J Lauritzen Den 59,000 sh tanker Cosco Nantong 11 EUR 50 m
J Lauritzen Den 59,000 sh tanker Cosco Nantong 11 EUR 50 m
Frontline No 320,000 tanker Zhoushan Jinhaiwan 6.11 USD 135 m
Frontline No 320,000 tanker Zhoushan Jinhaiwan 11 USD 135 m
Frontline No 320,000 tanker Zhoushan Jinhaiwan 11 USD 135 m
Frontline No 320,000 tanker Zhoushan Jinhaiwan 12.11 USD 135 m
Veolia Nord No 24 m cat Oma BB 7.09 NOK 30 m
Scan-Trans Den 10,000 mpp Shandong Huanghai 10 USD 25 m
Scan-Trans Den 10,000 mpp Shandong Huanghai 10 USD 25 m
Scan-Trans Den 10,000 mpp Shandong Huanghai 11 USD 25 m
Scan-Trans Den 10,000 mpp Shandong Huanghai 11 USD 25 m
Greeks Grc 180,000 bulk Odense Staalskibsværft 12 USD 110 m
Greeks Grc 180,000 bulk Odense Staalskibsværft 12 USD 110 m
Voyager UK 75 m fishing Karstensens SV 7.10
Neptune Offshore No offshore Sinopacific SB 1q10 SX-130 IMR
Neptune Offshore No offshore Sinopacific SB 1q10 SX-130 IMR
Stena Drilling Sw 92,000* drillship Samsung 12.11 USD 942 m
Østensjø No 1,500* aht Ast Gondan 2.10 tug
Rohav No 2,600c fish carrier Larsnes MV 10 live fish carrier
* = gross tons c = capacity in cubic metres All details believed to be correct but not guaranteed.
Secondhand transactions in the Nordic market
Month Name DWT Built Type From Price Buyer Remarks/New name
March Lamia 2,709 1980 car carrier P D Gram, Oslo Greeks
Pia V 795 1976 tanker Soltin Marine, Karmøy Cyprus
Lone Baand 1,021 1968 dry cargo E B Severinsen, Sæby Rederiet Lyn, Denmark
Susanne 9,898 1992 container CS&Partnere, Cph USD 16.7 m German
CEC Enterprise 4,525 2002 dry cargo Green Valley KS, USD 10 m Ellingsen Sh, Stockholm
CEC Endeavour 4,500 2002 dry cargo Green Valley KS, USD 10 m Ellingsen Sh, Stockholm
Magn 2,050 1983 tanker Foroya Shell, Torshavn Soltin Marine, Karmøy
Lone Wonsild 3,240 1990 tanker Clipper Wonsild, Cph USD 4 m Jet Tank, Greece
Ella Wonsild 3,240 1990 tanker Clipper Wonsild, Cph USD 4 m Jet Tank, Greece
Captain Leon Lemos 82,000c 2008 LPG C M Lemos, Greece USD 88.0 m Solvang, Stavanger
Fykan 1,016 1970 sideloader Taubåtkompaniet, Trondheim Fykan Sh ApS, Århus
Maple 3,005 1991 dry cargo VW Nyki Shipping, Rhoon AS Frakt, Bergen
ID Wave 27,652 1986 bulk Invest Danmark, Cph USD 24 m undisclosed
Palau 8,893* 1969 ferry Dimaiolines, Italy Monjasa AS, Fredericia
April Madzy 11.065 1976 bulk Red AB Donsötank, Donsö Italy
Fantaasia 16,405* 1979 ferry Tallink, Tallinn EUR 17.2 m Boa RoRo, Trondheim
Maersk Launcher 2,499 1988 ahts A P Møller Maersk, Cph ITC/Tschudi Shipping, Oslo
Sea Jaguar 89,000 1985 tanker Sea Production, Oslo USD 15.6 m Chinese
Sibulk Quality 55,707 2005 bulk C Eitzen & Co, Oslo USD 146.5 m Essar, India
Sibulk Innovation 53,169 2004 bulk C Eitzen & Co, Oslo en bloc Essar, India
Hyundai resale 9,000c 2010 LPG Greek Lauritzen Kosan, Cph
Hyundai resale 9,000c 2010 LPG Greek Lauritzen Kosan, Cph
Hyundai resale 9,000c 2010 LPG Greek Lauritzen Kosan, Cph
Kyokuyo resale 7,200c 2010 LPG Toda Kisen, Japan USD 27.5 m J B Ugland Sh, Oslo
82 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

MARKET REPORTS
Secondhand transactions in the Nordic market
Month Name DWT Built Type From Price Buyer Remarks/New name
Kyokuyo resale 7,200c 2010 LPG Toda Kisen, Japan USD 27.5 m J B Ugland Sh, Oslo
Maria H 1,529 1985 dry cargo Klaus Hülsermann, Haren Ronja Marin, Åbo
Kinna 4,012c 1989 LPG Lauritzen Kosan, Cph USD 7.0 m Viken Marine, Bergen
Bellflower 76,423 2004 bulk Orient Line YK, Japan Golden Ocean, Oslo
Golden Ocean, Oslo USD 76 m undisclosed
Jinse resale 13,000 2008 tanker Eitzen Chemical, Oslo USD 28 m German KG
Jinse resale 13,000 2008 tanker Eitzen Chemical, Oslo USD 28 m German KG
Jinse resale 13,000 2008 tanker Eitzen Chemical, Oslo USD 28 m German KG
Jinse resale 13,000 2008 tanker Eitzen Chemical, Oslo USD 28 m German KG
Nordic Swan 10,628 1986 tanker Uni-Tankers, Middelfart USD 10.35 m Malta
Torm Marlene 69,548 1997 bulk DS Torm, Copenhagen USD 71 m China
Nord Fighter 53,000 2004 bulk DS Norden, Copenhagen USD 72.75 m Tolani, India
Clipper Transporter 30,500 2007 bulk Clipper, Copenhagen USD 51 m Hong Kong
Clipper Treasure 30,500 2007 bulk Clipper, Copenhagen USD 51 m Hong Kong
Siteam Leopard 46,100 1985 tanker Eitzen Chemical, Oslo USD 12 m Wilmar Intl, Singapore
Berge Sword 75,000c 1979 LPG BW Gas, Oslo USD 15 m breaking
Judith Schulte 12,577 1993 container Bernh Schulte, Hamburg USD 15 m KS Danship 70, Cph
Safmarine Doula 18,200 1986 mpp Th Jacobsen, Sarpsborg USD 12 m undisclosed
Sea Wolverine 2,500 2008 ahts Deep Sea Supply, Arendal USD 22 m TMM, Mexico
Hornbill Arrow 31,247 1980 openhatch Gearbulk, London/Bergen USD 17 m Italy
Toki Arrow 31,247 1980 openhatch Gearbulk, London/Bergen USD 17 m Italy
Bow Maasstad 38,039 1983 tanker Odfjell ASA, Bergen undisclosed
May Baltic Press 4,600 1979 roro Charterfrakt, Skärhamn Holland TC Österströms/Festivo
Batamec resale 80 m 2009 offshore Otto Marine, Singapore NOK 300 m G C Rieber, Bergen
Batamec resale 80 m 2009 offshore Otto Marine, Singapore NOK 300 m G C Rieber, Bergen
Batamec resale 80 m 2009 offshore Otto Marine, Singapore NOK 300 m G C Rieber, Bergen
Batamec resale 80 m 2009 offshore Otto Marine, Singapore NOK 300 m G C Rieber, Bergen
Rasa 5,500 1996 gen cargo DFDS Lisco, Klaipeda Greece
Aukse 5,500 1996 gen cargo DFDS Lisco, Klaipeda Greece
Gediminas 4,863 1996 gen cargo DFDS Lisco, Klaipeda Greece
Vytautas 4,863 1995 gen cargo DFDS Lisco, Klaipeda Greece
* = gross tons c = capacity in cubic metres All details believed to be correct but not guaranteed.
Lone Wonsild under its new name Jet XVII en route for the Mediterranean after takeover in Rotterdam.
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 83
KOOS GOuDRIAAN

MARKET REPORTS
Rates and fixtures week 19
Shortsea dry bulk market report
Baltic. The Baltic market has clearly taken
a breather this week with a significant drop
in activity combined with weaker rates.
Prompt tonnage supply is building up in
the whole region forcing owners to accept
rate cuts in order to cover their promptest
positions. Still owners able to book ahead
are putting bullish numbers on their
indications, but presently it seems unlikely
that the market will manage to remain at
present level as tonnage is getting more
and more visible.
Activity level: Slower
Scandinavia. It has been very difficult to
book ahead also in Scandinavian waters
with more tonnage showing along the
coast of Norway and in Kattegat. Rates
have remained mostly unchanged, but spot
orders have attracted much more attention
from owners this week indicating that
they have fewer options to play. Still good
activity in project cargo movements from
Denmark and Poland to Norway and the
UK this week, but also small coasters are
beginning to see a dip in demand.
Activity level: Slower
UK/Continent. Activity has also dropped
on the Continent with owners looking
for suitable employment to take them to
Baltic or south to Mediterranean. 2,000 mt
soya meal from ARAG to Latvia is paying
in region of EUR 12–12.50 while 3,000
mt minerals from ARAG to N.Spain were
fixed at EUR 19.50 p/mt. Resent increases
in fuel costs have so far not been compensated
in freight rates, and there is reason to
7,000
6,000
5,000
4,000
3,000
2,000
1,000
20
25.000 shipping
professionals
read this ad
believe that current lack of momentum will
make it difficult to push for rate increases.
Activity level: Slower
Mediterranean. Both western and Eastern
Mediterranean are seeing good activity and
volume flow with rates remaining mostly
unchanged on major trading routes. Wheat
continues to dominate the market in western
regions while minerals seem to be the
main taker for tonnage ex Turkey and Black
Sea. Still no change in activity, but tonnage
availability might build up as ships arrive
from Northern Europe in coming weeks.
Activity level: Active
Fixtures
– 2,500 mt agriprod 60’ North Sea/WC
Greece fixed EUR 64 p/mt
– 3,000 mt minerals WC Greece/Span Med
fixed USD 35 p/mt
Advertise in Scandinavian Shipping Gazette. www.shipgaz.com
earning estimates past 12 months
EUR/day
■ 1,000–1,500 DWT ■ 1,500–2,000 DWT ■ 2,000–3,000 DWT
■ 3,000–4,000 DWT ■ 6,000–7,000 DWT
25
– 2,000 mt minerals WC Norway/Klaipeda
fixed EUR 19.50 p/mt
– 2,000 mt minerals ARAG/SC Norway
fixed EUR 14.50 p/mt
norbroker shipping & trading as,
flekkefjord, norway
84 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008
30
35
40
45
50
1
5
10
15
Week
earningS eStiMateS on t/C
BaSiS per day (Modern, Box)
Size Week 19 Week 18
1,250 DWT EUR 1,950 EUR 2,000
1,750 DWT EUR 2,100 EUR 2,150
2,500 DWT EUR 2,600 EUR 2,650
3,500 DWT EUR 3,550 EUR 3,600
6,500 DWT EUR 5,400 EUR 5,450
MarKet SnapShotS
Week 19 Week 18
Brent USD 122.39 USD 118.60
MGO Rotterdam USD 1,134.00 USD 1,068.00
IFO180 Rotterdam USD 566.50 USD 527.00
EUR/USD 1.54 1.57

The world’s leading
shipbuilding fair
23 – 26 sept. 2008
Anne-Marie Hagström-Hirschberg
Phone: +46 380 134-50, -51 · ets@ets.nu
shipbuilding · machinery &
marine technology
international trade fair · hamburg
www.smm2008.com

MARKET REPORTS
VLCC rates continued to climb
Although not as significant as for dry
bulk shipping (see below), Chinese
imports have had a large impact also for
tanker shipping. According to Clarkson
Research, China imported 105 million
tonnes of tanker cargo in 2000. Today
this has increased to 257 million tonnes,
or about one fourth of the country’s total
import. The current annual growth in this
trade is about eight per cent.
The VLCC sector continues to regain on
the rate fall that started in November last
year and continued to February this year,
followed by some ups and some downs until
the beginning of April. By the end of week
19, A VLCC booked for a trip Persian Gulf
to Singapore could reach WS 205, corresponding
to daily earnings of USD 162,300
according to Stockholm Chartering. A trip
to UK/Cont could be booked at WS 120,
with USD 113,100 in daily earnings.
At the same time, a Suezmax cross med
trip would get about USD 25,000 less than
the week before, but still earnings would be
above USD 100,000 per day.
China has boosted world trade by more
than 100 million tonnes of cargo every
year since 2000, and this is only counting
imports. In its latest Shipping Intelligence
Weekly, Clarkson research highlights the
incredible impact China’s import development
has had on the world’s shipping
industry. According to Clarkson, if the
average ship carries seven tonnes of cargo
for each deadweight ton of capacity, this
requires 14–15 million deadweight tons of
extra ships each year. For comparison, this is
about one additional South Korean-flagged
merchant fleet per year, according to statistics
from ISL that puts South Korea on rank
13 on its list of the world’s merchant fleets.
For dry bulk, iron ore, accounting for
44 per cent, dominates Chinese import. Its
growth rate has decreased to about 15 per
cent the last year, while coal and grain has
increased by the same rate. Minor bulk is
up by 30 per cent.
Last months’ upward bounce in all large
bulk sectors has continued, and spot earnings
are sniffing at the record levels dur-
Aframax rates in the North Sea has continuously
firmed during the last month,
with the worldscale level reaching 220
points by the end of week 19, corresponding
to USD 73,000 in daily earnings according
to Stockholm Chartering.
The oil price took a hefty hike in week
19, to USD 124 per barrel Brent when the
International Petroleum Exchange spot
market opened on Friday. Bunker prices
followed suite, and as example a tonne of
marine diesel was priced at USD 1,095 in
Rotterdam the same day. 380 IFO stood at
about half, or USD 537 per tonne.
On May 24, ExxonMobil fixed Maersk Promise for a trip Ras Laffan to Singapore – Maersk
Promise for 80,000t at WS 175.
What would we do without China?
ing last autumn. The Clarkson average
earnings index for modern Capesizes has
passed USD 160,000 per day, the Panamax
index is closing in on USD 75,000 and the
Handymax tripcharter average earnings
index reached USD 61,500 on 9 May.
On the Capesize market, daily earnings
200,000
150,000
100,000
50,000
0
for a 165,000-tonner on the iron ore trade
Tubarao–Rotterdam passed USD 200,000
by the end of week 19.
At the same time, an aframax gained in
average USD 80,000 per day for a transatlantic
round trip.
rolf p nilsson
Dry bulk freight development
Atlantic round voyage,USD/day ■ Capesize ■ Panamax ■ Handymax
Jul ’06
Oct ’06
86 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008
Jan ’07
Apr '07
Jul ’07
Oct ’07
Jan ’08
Apr ’08
Source: Fearnleys/SSG, May 9, 2008
ZEE-PHOTO

Offshore market report May
offshore rate development
GBP 1,000 pSV: ■ 600/700 AhtS: ■ 15,000–16,000 ■ 20,000+
140
120
100
80
60
40
20
0
20
25
30
35
40
The oil price has been keeping up
remarkably and the long-term prospects
remain optimistic for the offshore industry.
This means that new projects keep emerging,
as the banks are also sharing the positive
outlook. Meanwhile, the stock-listed
offshore support companies are reporting
weaker results for the first quarter than last
year, and, indeed, the spot market development
this year has shown an ample availability
of vessels. Peak periods, as Weeks 7 and
10–11, have tended to be shorter and the
average utilisation over the period lower.
Giant Brazilian order
Petrobras is inviting tenders for no less
than 140 supply vessels from domestic and
foreign owners, broken down in 64 PSVs,
64 anchorhandlers and a number of oil
recovery vessels. The vessel will have to
be built and manned locally, a fact that
may limit the tender to companies with an
established Brazilian operation.
Secondhand sales
There is a steady interest in secondhand
vessels, although the prices are high and
there is a genuine barrier to entry for newcomers
to the offshore game. Sales candidates
tend to be either older vessels or
resale contracts.
Deep Sea Supply of Arendal (in which
John Fredriksen is the leading shareholder)
has sold Sea Wolverine, a Seatech P-729
design anchorhandler from ABG Shipyard
in India, to TMM of Mexico at a reported
USD 20 million. This is a smaller vessel for
45
50
1
5
tropical waters, of 6,500 bhp and 80 tons
bollard pull.
ITC of Holland, owned by Tschudi
Shipping, Oslo) acquired its third Maersk
L-class anchor-handler, the 12,000 bhp
Maersk Launcher from 1988. She will fit
into the buyer’s towage business, and in
the meanwhile she will make money in the
offshore market. There are several other
vessels rumoured for sale, both for offshore
work and for other purposes.
Contracting
Showing every faith in the market, Stena
Drilling has ordered its fourth drillship
MARKET REPORTS
from Samsung, a vessel of 92,000 gt for
deepwater work at a basic price of USD
942 million.
On a less conspicuous level, a new
company in Fosnavåg, Neptune Offshore
AS, has ordered two subsea/ROV vessels
from Sinopacific Shipbuilding in China
for 2010 delivery. They are to be of the
Ulstein SX-130 design with the distinctive
X-bow.
Rieber Shipping of Bergen is the 51 per
Text
cent partner in a joint-venture which has
acquired four 80-meter MT-6009L vessels
building at the Batamec shipyard in Indonesia.
The ships were originally ordered
by Otto Marine Pte Ltd, Singapore, in
2006/07 and are now sold at some NOK
300 million each. They will be fitted out
for seismic research.
Subsea7, controlled by Kristian Siem,
has taken a fourth pipelayer from the IHC
Merwede shipyard for 2010 delivery. The
USD 190 million vessel will be fitted for
laying flexible pipelines.
Østensjø rederi, Haugesund, has filled up
its ordering programme with an anchorhandling
tug from Astilleros Gondan, also for
2010 delivery. Although mainly a PSV
operator before moving into subsea/IMR
vessels, Østensjø has been present in the
spot market with Thorax for years.
dag bakka jr
SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008 87
10
15
Week
Some reported term fixtureS:
Charterer Vessel type operation
StatoilHydro Island Earl psv 2 wells from May, GBP 16,000
Peterson Northern Queen psv ext 3 years until Oct 2011
Senergy Olympic Promotor psv 5 wells firm + 4 wells opt, end April
CNR Normand Vester psv ext 1 year until may 09
BP N Stril Myster psv ext 1x6 months unrtil Nov
Shell Olympic Princess psv ext 1 year until May 09
StatoilHydro Island Vanguard ahts 18 months firm + 3x6 mnth opt, April
StatoilHydro DOF AH04 ahts 5 yrs firm + 3x1 yrs opt, Dec 09
Shell Maersk VS472 ahts 2 yrs firm + 2x1 yrs opt, June 08
Oceanteam Beta ahts 2 months firm + opt, April
Esso Exploration Sea Turbot psv 4 years
other reported fixtureS:
Charterer Vessel type operation
Western Geco Toisa Crest psv 12 months, Libya
Saipem Boulder ahts 3 months, April, Mediterranean
Petronas Malaviya 30 psv 200 days, beg May, West Africa
Cosmos Energy Toisa Coral psv abt 3 months, May, Ghana
Based on information from R G Hagland Offshore, www.hagland.com

MARKET REPORTS
BUNKERS AND CRUDE OIL TREND
Week Rotterdam Bunkers Crude Oil
380 cSt, USD/t MDO, USD/t Brent, spot IPE, USD/brl
13 480 895 103.92
14 475 892 103.58
15 499 956 107.84
16 503 970 110.90
17 499 1,013 115.90
18 481 1,012 111.32
19 537 1,095 123.86
Quotations Friday each week. Source: Stockholm Chartering, www.stochart.com
CRUDE TANKER MARKETS
Size Route Week Worldscale Earnings
(USD/day)
VLCC Persian Gulf–UKC C/S 13 90.0 74,600
280,000 14 75.0 53,100
15 72.5 47,700
16 90.0 72,900
17 115.0 108,700
18 117.5 112,200
19 120.0 113,100
Suezmax Cross Med 13 280.0 138,200
130,000 14 150.0 54,900
15 180.0 72,800
16 270.0 130,500
17 240.0 111,400
18 260.0 125,300
19 230.0 102,900
Aframax North Sea–UKC 13 190.0 59,700
80,000 14 155.0 41,100
15 210.0 69,600
16 270.0 101,600
17 190.0 58,800
18 190.0 59,600
19 220.0 73,300
Quotations Friday each week. Source: Stockholm Chartering, www.stochart.com
Clarkson adds to provisions
against damage claims
ssg-göteborg. The British brokering and
ship service group Clarkson has set aside a
further GBP eight million on top of GBP six
million provisions last year against claims
for USD 67 million from the Russian shipowners
Sovcomflot and Novoship. Clarkson
has been dragged into a fight between
the Russian companies and Sovcomflot’s
former managing director vd Dimitri Skarga
and the Russian shipowner Yuri Nikitin. In
addition, Sovcomflot has filed claims for
USD 71 million, alledging that Clarkson
has valuated vessels improperly in a related
case. Clarkson has denied this and has nor
made any provisions against this claim.
Deep Sea Supply sells AHTS
ssg-göteborg. Norwegian Deep Sea Supply
is to sell the newbuilding AHTS vessel
Sea Wolverine to TMM, Mexico. The gross
selling price is USD 22 million, Deep Sea
Supply’s profit from the sale will be USD 6
million. The Sea Wolverine will be delivered
from ABG Shipyard, India, in the first half
of May, 2008.
ShARE PRICE INDEx
Index 9/5 2/5
OSE2030GI** 356.98 354.90
**OSE2030GI includes the shipping companies listed on the
Oslo Stock Exchange.
DRy CARgO MARKETS, LARgE CARRIERS
Size Route Week USD/ton
Single voyages
Capesize Tubarao–Rotterdam 13 30.00
165,000 Iron Ore 14 33.00
15 34.00
16 34.00
17 39.50
18 47.45
19 52.00
Tripcharter Av. Earnings
(USD/day)
Panamax Cont–Far East 13 78,500
70,000 14 77,000
15 79,000
16 82,000
17 92,000
18 91,000
19 100,000
Handymax Transatlantic, round voyage 13 53,500
14 56,500
15 58,500
16 59,000
17 61,700
18 65,750
19 74,500
Source: Fearnleys, www.fearnleys.no
Delta Tankers orders VLCCs
for USD 156 million per unit
ssg-göteborg. Greek Delta Tanker recently
ordered three VLCCs from Hyundai
Heavy Industries in South Korea and agreed
to pay record high USD 156 million per
unit.
The agreed price is two million higher
than the previous record, when Oman Shipping
Company earlier this year ordered
VLCCs at a price of USD 154 million per
unit from Shipbuilding & Marine Engineering,
South Korea, reports the news site Sea
Trade Asia.
88 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

P
O
S
I
D
O
N
I
A
2008
Stand 534
MOTOR-SERVICE SWEDEN AB
Cedervall & Söner AB
MOTOR-SERVICE SWEDEN AB

A classic cargo liner
It is often said that in the 1960’s ships
still looked the way ships should look
like. The elegant Broström-owned
cargo liner Mandalay is definitively no
exception.
At the end of the 1950’s and in the early
1960’s the Swedish Broström group of
shipping companies was a large customer
of the Finnish shipyard Crichton-Vulcan
in Turku. A total of nine cargo motor vessels
were delivered to Broström by the
Wärtsilä-owned shipyard during the years
1960–1963.
This fruitful co-operation started in late
1958 with the ordering of two 10,950
DWT cargo motor vessels. The first of
them was named the Svaneholm, and
she was delivered on January 2, 1960 to
Svenska Amerika Linien. The keel of her
sister vessel Mandalay was laid on June 25,
1959, and the Mandalay was handed over
to AB Svenska Ostasiatiska Kompaniet on
July 12, 1960.
This beautiful ship was painted white in
the traditional manner of this proud shipping
company. On the yellow funnel there
was a blue circle with three golden crowns,
borrowed from the coat of arms of Swe-
den. She was not any cargo ship – she was
an ambassador for Sweden, sporting the
blue and yellow ensign on her voyages to
distant places where the natives had never
heard about Scandinavia or Sweden.
The Mandalay was built to the highest
class of Lloyd’s Register, and her hull was
ice-strengthened to comply with the rules
of Finnish ice class IB. As the delivery
occurred several years before the container
revolution, the vessel had an impressive
rig containing two masts and seven kingposts.
Cargo could be handled by the vessel’s
own derricks, powered by twelve
5-tons and six 7.5-tons electric winches.
The cargo holds were equipped with a
tween deck and covered by six steel hatches
on the weather deck.
The navigation equipment was stateof-the-art,
including a gyro compass with
autopilot, radar, Decca navigator, depth
sounder, SAL log and radio direction
finder. Many of these instruments are no
longer found on the computerized bridges
of today’s new cargo vessels.
The accommodation for officers and
the kitchen personnel was situated in the
superstructure midships, including also the
HÅKAN SJÖSTRÖM
owner’s cabin, hospital, mess rooms and
day rooms. The crew was accommodated
aft in one or two-berth cabins on the poop
deck. As the newbuilding was designed for
service in tropical waters, there was an airconditioning
system installed.
The main engine of the Mandalay was
built by Götaverken in Göteborg, and
this was standard for all Broström’s vessels.
It was a six-cylinder, single-acting
two-stroke engine of the 760/1500
VG6U-type, with an output of 7,300 hp
at 115 rpm. It was directly coupled to the
shaft with a fixed blade propeller. The
contract speed was 17 knots, which made
the Mandalay a reasonably fast cargo
liner in her days.
The service career of the Mandalay was
the best possible from the point of view
of her owner and her crew. She was never
involved in any serious accidents, and she
served Svenska Ostasiatiska Kompaniet
faithfully for 18 years. She was sold to
owners in Japan and continued trading as
the Ramoneverett under the Liberian flag.
Her end came in 1985 when she was sold
to breakers in China.
pär-henrik sjöström
90 SCANDINAVIAN SHIPPING GAZETTE • MAY 16, 2008

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