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5Issue 66 March/April 2017 Ship Management International

» SHIP MANAGEMENT INTERNATIONAL – ISSUE 66 MARCH/APRIL 2017THE MAGAZINE FOR THE WORLD’S SHIP OWNERS & SHIP MANAGERS

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22» STRAIGHT TALK

» NOTEBOOK

» SHIPMANAGEMENT

Cover Story

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8 – Strategy not stress

10 – Shipping confidence remains steady – Swedish Club delivers 4% discount – MacGregor and Rolls-Royce to explore implications of autonomy for container ships – Thought Provoking: Something’s got to give

14 How I work – Terry Gidlow – Brent Bruun

20 Vancouver – Vancouver: Geared up to do business with

38 Gibraltar – Gibraltar rocks – The Master of all Gibraltar surveys – The day the world’s largest superyacht was arrested in Gibraltar – How I Work: John Bassadone

22 ESW17 Round Table Debate

» REGIONAL FOCUS

» MARKET SECTOR30 ECDIS & Navigation – Flying lessons – Hazard detection more essential than ever – Danger of navigation cyber-attacks

96 Paints & Coatings – New hull standard boost for vessel owners and operators

104 Technical Management – Lifeboats built to combat icy regions

ESW17 Round Table Debate

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» CREW WELFARE

» CYPRUS SPECIAL REPORT66 Negotiating a strong furture ahead

95 Limassol Marina – Limassol Marina: strengthening Cyprus’ yachting credentials

68 Cyprus Shipmanagement Round Table Debate

62 – Doctor launches new maritime health company after ‘lightbulb’ moment – UK P&I club advises on the importance of dental hygiene in seafarers – Seafarers’ survey over medial care at sea

» COMMENTARY36 Alternative Viewpoint – One man and a dog

» BUSINESS VIEWPOINT56 P&I & Law – It’s a hard knock-for-knock life – Crew arbitration clauses – what is happening? Good or bad?

58 Softship Data Processing – Liner companies must adapt in order to compete

60 Transas Global Conference – Must embrace the ‘perfect storm’

» MARINE PROPULSION

» REVIEW

» LIFESTYLE

» OBJECTS OF DESIRE

108 – Bringing you the best in arts & culture

110 – Do you have wi-fi, indoor plumbing and does anyone speak English around here?

106 – Our pick of the most coveted creations

102 – New sulphur standards promote scrubber usage

65

Straight Talk

Welcome to Ship Management International

A call by 10 of Europe’s primary shipowning and shipping industry associations for Brussels to fundamentally overhaul the EU’s Reporting Formalities’ Directive to create a true European single window environment for maritime

carriers as well as develop a completely new shipping strategy to help shipping meet global challenges, could not have come at a better time.

Delivered during European Shipping Week, just when the industry and the EU regulators – European Commission, European Parliament and EU Council of Ministers – were getting to know each other better, the joint communique was aimed at creating a new set of rules that would promote Europe as a globally leading, high-quality region for shipping to do business in.

The signatories were clear that any initiative should require investment in an attractive business climate, a highly skilled European workforce, consistent implementation of international environmental and safety standards as well as policies which are truly relevant and conducive to facilitating trade. The strategy should firmly put shipping in its diversity at the heart of the maritime cluster. “The future EU shipping strategy should particularly show leadership in assisting the shipping industry to meet global challenges. In the face of increasing political uncertainties worldwide, the EU should affirm its role as the world’s champion of free and fair trade. It should also help the IMO shape a global strategy to ensure the shipping industry meets its climate obligations in an environmentally, socially and economically sustainable way.”

Coming at a time when shipping is looking to recover and grow once again, Europe’s ship owners are right to call on the regulators to do their thing. Shipping is an uneven playing field and while it is innovating hard to keep its head above the water, it can only do it with the right regulatory help.

Happy reading.

Strategy not stress

8 Ship Management International Issue 66 Marach 2017

March/April Issue 66

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The shipping business magazine for today’s global ship owners and ship managers

Ship Management International (ISSN 2049-10,221) is published 6 times a year (Feb, Apr,

Jun, Aug, Oct, Dec) by Elaborate Communications and distributed in the USA by Mail Right Int., 1637 Stelton Road B4, Piscataway, NJ 08854. Periodicals Postage Paid at Piscataway, NJ and additional mailing offices POSTMASTER: Send address changes to Ship Management, Elaborate Communications, c/o 1637 Stelton Road B4, Piscataway, NJ 08854.

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Editorial Director: Sean MoloneyJournalists: Samantha Giltrow Chris BrowneRegular Contributors: Michael Grey James Brewer Thomas Ország-Land Paul Slater Felicity Landon Margie CollinsMotoring Journalist: Rob AuchterlonieTechnical Editor: David TinsleyAdvertising Sales Manager: Karen MartinAccounts: Sarah JonesDesign and layout: Mike Argles Diptesh Chohan

Editorial contributors: The best and most informed writers serving the global shipmanagement and shipowning industry.

Shipping confidence remains steadyShipping confidence held steady in the three months to end-

February 2017, according to the latest Shipping Confidence Survey from international accountant and shipping adviser

Moore Stephens.In February 2017, the average confidence level expressed by

respondents was 5.6 out of 10, unchanged from the previous survey in November 2016 and equal to the highest rating since August 2015. Owners were the only main category to show an improved level of confidence, up from 5.4 to 5.6. Confidence on the part of charterers was down from its all-time survey high of 6.8 to 5.9, while that of managers fell from 6.4 to 6. Confidence levels in the broking sector, meanwhile, dropped from 5.6 to 4.6. The survey launched in May 2008 with an overall confidence rating of 6.8.

Confidence was up in Europe and North America, from 5.4 to 5.5 and 5.9 to 6.1 respectively, but down from 5.7 to 5.6 in Asia.

Respondents generally felt that competition was running at very high levels, while other familiar concerns included overtonnaging and geopolitical uncertainty. Most respondents saw 2017 as a year of retrenchment rather than improvement. One said: “If owners can maintain their

discipline and resist the blandishments of shipyards desperate for business, there is hope that 2018 will see a return of market equilibrium, in which continued scrapping remains a key element.”

Richard Greiner, Moore Stephens Partner, Shipping & Transport, said: “After three successive quarterly increases, shipping confidence has held steady. This is encouraging given the continuing political uncertainty in the US and Europe. Shipping is vulnerable to changes in the political landscape, and a slew of elections in leading industrialised nations will render it particularly so this year.” l

Swedish Club delivers 4% discount The Swedish Club has maintained its members’ interests

at the heart of the business by offering a discount of 4% to all P&I members 2017/2018.

“We respect our ship owners and the challenges they face,” said Lars Rhodin, Managing Director of The Swedish Club. “This discount, on our 145th anniversary, has been made possible through a long-term risk management strategy which has also enabled us to set a 0% General Increase for two years in a row.”

The Club’s end-year results demonstrated a 7.5% year-on-year growth in P&I, from both existing and new members, well ahead of the growth in the world fleet. Marine business was stable in a challenging market and despite volatility in the investment sector, an overall surplus of $11.8 million was reported.

Maintaining its focus on a balanced underwriting performance, The Swedish Club delivered a combined ratio of 98%, in line with its eight-year performance of 97%. l

10

Notebook

Ship Management International Issue 66 March/April 2017

Notebook

11Issue 66 March/April 2017 Ship Management International

MacGregor, part of Cargotec, and Rolls-Royce have signed a Memorandum of Understanding (MOU) to collaborate on research and development to

explore the impact of developments in autonomy for cargo ship navigation and cargo systems onboard container ships.

This collaboration will harness both companies’ experience laying the groundwork for the development of autonomous container ships.

Asbjørn Skaro, Rolls-Royce, Director Digital and Systems, said: “Rolls-Royce is pioneering remotely controlled and autonomous ships and believes such a remote controlled ship will be in commercial use by the end of the decade and a common sight on the high seas by 2030. For the full benefits of such a change to be realised many activities currently done today manually will need to be done autonomously. This research will help us explore how that might be achieved.”

As a provider of cargo handling solutions and services for container vessels, MacGregor brings a detailed knowledge of the cargo sector and can provide valuable insights into marine cargo operations and the technology and systems needed to make them as efficient and safe as possible.

Pasi Lehtonen, Senior Vice President, Strategy, Business Development and Marketing, MacGregor said: “MacGregor wants to reshape and transform the industry to make it much more efficient, safer and more sustainable. In the segments where we operate, we see a lot of unnecessary waste in the forms of inefficiency, damage to cargo, and continuously dangerous working conditions. Our aim is to minimise this waste from the value network and this collaboration on autonomy for container ships is a good example of where industry leaders work together to transform the industry.” l

MacGregor and Rolls-Royce to explore implications of autonomy for container ships

Due to the imbalance of supply and demand, the prolonged downturn has brought tremendous pressure on both ship owners and ship managers alike. This, in turn, has led to

owners switching into survival mode, with managers grappling to live with management fees that, put frankly, have changed little over the past 20 years, despite more and more demands being placed upon them. Likewise, vendors are being squeezed to the point that they are indeed fortunate to be paid within 120 days, many having heavily discounted their product to secure business in the first place. All-in-all, a cocktail that does not auger well for our industry and, unless addressed, something’s got to give.

Both ship owners and ship managers today are facing crew competency issues, with on board equipment and machinery also becoming ever more complex. Good training, whilst an absolute necessity to reduce incidents, quite often ranks low on the priority list of a number of ship owners. In addition, decisions today are invariably made ashore, adding further pressure to the already swamped superintendent.

The way forward for ship managers is to both supplement and support their current soft skills by fully embracing the technology that is out there today and thus mitigate, to a degree, at least part of their overheads. The plethora of Big Data needs to be sensibly filtered and, when combined with good communication, will provide tremendous value and savings.

Despite current market conditions, now is the time for the industry to revert to acknowledging service providers as partners rather than mere vendors. Regardless, the fact remains that each needs the other, more especially with shore-based personnel skills coming ever more into question today.

Very early on in my career, the value of partnership became only too apparent when a vessel, passing through the Bay of Biscay in severe weather, experienced clogged filters due to fuel quality issues. It was bang on Christmas and the vessel desperately needed new filters, without which a delay of four days would incur, in addition to the vessel missing its laycan.

Our trusted ship chandler, based in Avonmouth and still thriving today, found the warehouse keyholder of the manufacturer on Christmas day via the police, arranged to send his driver up to Birmingham, thereafter, driving all the way down to Falmouth, delivering the new

filters to the vessel that evening. Not only did the vessel meet its laycan but the chandler charged only for the petrol consumed! The moral of the story is that if you are fair and value your partnership, beit a vendor or manager, they will look after you when needed most… l

Something’s got to giveBy Nigel Cleave

Thought Provoking

‘All-in-all, a cocktail that does not auger well for our industry and, unless addressed, something’s got to give’

Notebook

12 Ship Management International Issue 66 March/April 2017

14

How I work

W ith the shipping industry facing some of the most difficult times it has seen and

the falling of commodity prices, most people would regard the launch of a new global ship agency as a daring, if not illogical, move.

However, it has not stopped the start-up of WaterFront Marine Services, a new venture born from the joining of forces of Middle East and Asian port agencies

Sharaf Shipping Agency and Ben Line Agencies and spearheaded by new CEO Terry Gidlow.

Indeed, Mr Gidlow believes the timing is now ideal based on a number of drivers in the market.

He explained: “A lot of people have asked me ‘why would you go and start a service business at a time when the shipping market is down in the doldrums?’

“We have looked at a few different drivers and first of all it is population. By the end of last year, the world population had grown by 86 million people. To us, that translates into 86 million more mouths to feed, more energy and more infrastructure and that then translates into an increase in demand for more materials which means more demand for ocean freight and ships hence for solution providers at both ends of those transactions.

“Irrespective of where the markets are, volumes are growing and more freight being moved on.”

Solution provider is exactly the term that Mr Gidlow believes sums up WaterFront Marine Services which went live as a company on 1st April and is headquartered in Dubai with commercial offices in Singapore and Miami as well as operational hubs in Jakarta and the UAE.

Drawing on his experience from senior positions with Inchcape Shipping Services,

LBH Group and Chemoil Energy, he is driving forward the business with the knowledge that the two agency shareholders involved in the venture – both private, family-controlled companies - also have a great heritage in what they do. Indeed, Ben Line has a history of 191 years in the shipping business and Sharaf, 41 years.

Mr Gidlow said the drive behind the setting up of the new venture came mainly from Ben Line and Sharaf who saw the ability to combine with other ‘like-minded’ players to tap into a whole new market.

“That gives us a very solid foundation not just in the terms of the geographic framework and network but also in terms of expertise and commodity expertise and exposure to various different commodities and markets,” said Mr Gidlow.

“This isn’t a merger of the two companies. They are retaining their existing brands and their existing identities, however, we can leverage off the office network that they’ve got and the expertise they have got and we see this adding value to the existing customers, not diluting their value.”

WaterFront Maritime Services has 299 proprietary offices across 49 countries and has also set up a network of third party offices, which have been vetted rigorously. Mr Gidlow said it was important not only to find good people but the right people and to then monitor and manage the network.

“Chains are only as strong as the weakest link,” he said.

With the launch of the new company, third parties have been announced in South America, North America and Europe. Mr Gidlow explained: “If we are talking to somebody about crude oil we

SMI talks to industry leaders and asks the questionHow do you keep up with the rigours of the shipping industry?

Terry GidlowCEO, WaterFront Maritime Services

Ship Management International Issue 66 March/April 2017

“Chains are only as strong as the weakest link”

http://gac.com/hullwiper

Shipmanagement: How I Work

need to be able to have coverage in the US Gulf, Venezuela, Nigeria, Angola and Middle East countries and obviously key countries in the Far East.”

He said one of the benefits of the new service would be bulk buying.

“Between the two shareholders we’ve got over 28,000 port calls a year being handled already. This can then lead to them negotiating better rates on a number of different services.”

Mr Gidlow said a full year was spent making sure the fit between the shareholders was right and making sure the correct processes and procedures were in place.

Can he see more agents following in WaterFront’s footsteps and there being more

consolidation between shipping agencies?“I sincerely hope this doesn’t sound

arrogant but I think there possibly would be but I think it would be very difficult, near impossible, for somebody, say in my type of role, to find two shareholders who have got the scope and services and pedigree and history,” he said.

“Will there be consolidation? I think there will be consolidation. Will you see small players going out of the market? I think that is inevitable. I think one of the challenges we face as an industry is credit risk.”

He concluded: “At the end of the day with the local presence we have in all of these locations, we have our finger on the pulse in terms of what happens there.” l

Brent BruunChief Operating Officer, KVH Industries

As COO of the global satellite communications provider, KVH Industries, Brent Bruun needs to

juggle a variety of roles from staff manager, corporate strategy developer and satellite communications advisor to solutions-seeker and problem-solver.

Mr Bruun joined KVH as Vice President of Global Sales and Business Management in 2008 from the satellite provider GE Americom where he was SVP of Strategic Initiatives. KVH had just introduced its mini-VSAT Broadband service and TracPhone V7, the first satellite communications antenna for the mini-VSAT Broadband network. “Coming from the satellite industry, I saw the innovative approach KVH was taking, and was excited to play a role in the growth and expansion of the company’s product and service offerings,” he said.

As Chief Operating Officer, Mr Bruun has direct responsibility for KVH’s strategic corporate development, as well

http://www.dnvgl.com/maritime

Shipmanagement: How I Work

18 Ship Management International Issue 66 March/April 2017

as operational responsibility for mobile connectivity products and services. “With maritime being such a global industry, we have offices around the world, and the need to look at things with that global perspective is very important,” he said.

Mr Bruun is based at KVH’s headquarters at Middletown, US, and works with KVH staff in their offices in Singapore, Japan, Denmark, the UK and “everywhere in between” he said. “We emphasise the importance of the full customer experience— from how we manufacture our equipment, through its sales and marketing and customer onboarding, to how we service and support them long-term—and my team plays a lead role in that entire customer lifecycle,” said Mr Bruun.

How does the COO manage his staff ? “I try to find a good balance between a hands-on type of boss to a delegator. There are times when you must dig in directly to help close a big deal with an important customer or run some numbers on a new initiative. The rest of the time I’m very much a delegator, and I believe that people need to take charge of their own responsibilities to solve problems and get results. I like to hire top-notch people, let them know I believe in them and that I expect great things from them, then let them take it from there,” he said.

“There’s a need to make sure our teams have everything they need to get the message across to owners, managers and fleet IT directors that there is a simple

solution available from one company, namely KVH.

How large a part does travel play in his role as COO? “With our global presence, I travel often, not only to meet with customers around the world, but also to spend time with our regional teams. The international aspect of the job allows me to continually improve my understanding of the global aspects of the maritime industry, while also helping me appreciate local and regional variations,” he said.

What does Mr Bruun view as his key challenges? “Making sure we are solving our customers’ problems is always paramount, and we must do so by providing innovative solutions that keep us ahead of the competition. Some of the biggest challenges in the maritime industry are external, such as economic uncertainties. Against that backdrop, ship owners and ship managers are evaluating many technological developments that are still evolving rapidly. For example, as the industry sees the benefits of broadband connectivity for everything from communications to crew welfare to big data and analytics, there are challenges and opportunities in helping the industry take full advantage of those offerings.”

He said the most exciting part of his role as COO is the chance to “direct KVH’s consolidated effort and to provide our customers with the absolute best in training, content and connectivity.” He said he was eager to “take full advantage of the synergies in commercial maritime

that come from acquisitions of such leading maritime services and brands as NEWSlink, Videotel and others.”

How does he view KVH’s role in an increasingly connected maritime sector? “I look forward to seeing KVH continue to grow and attract customers, particularly as connectivity services become essential throughout the maritime industry, and the move to VSAT and high-throughput satellites (HTS) accelerates. I’m thrilled that we’re able to provide such a complete solution, with big benefits for the customer. That includes the broadband connectivity for operations and crew; data collection and analysis to help vessel managers attain operational efficiencies; news, sports and entertainment content that can help reduce recruiting and retention costs; our unique IP-MobileCast content delivery service; and, industry-leading maritime training from Videotel.

“I hope to see customers benefiting from all our services, and realising the ease of working with one provider on a global basis,” he said.

When he is not working, Mr Bruun likes to spend time with his family “whether it’s a big reunion with extended family or a simple vacation with my wife and daughters.” He also enjoys watching US college football and professional baseball – and following Premier League football games in the UK . He also enjoys skiing and “continuing to work on my golf game”. l

http://www.shipmoney.com

20 Ship Management International Issue 66 March/April 2017

The Port of Vancouver is Canada’s largest port and the most diversified maritime hub in North America. Its pivotal position on the Pacific Ocean Rim of north-west Canada

has made the port, known locally as Port Metro Vancouver, Canada’s key hub for the Asia-North American axis.

Port Metro Vancouver has 27 major marine cargo terminals, three major rail links and a regional short line railway. Its terminals serve five sectors – from vehicle transhipment annually handling almost 400,000 cars, almost all imported from Asia; breakbulk cargo such as forest products, steel and machinery; dry and liquid bulk cargos which make up approximately two-thirds of the port’s annual tonnage; and four containers terminals that handle just over three million teu a year. As the homeport for the Vancouver-Alaska cruise industry it is also a focal point for cruise ships.

The port handles C$184bn worth of cargo a year, or 20% of Canada’s trade with goods imported and exported from more than 170 countries and container traffic is projected to increase to over 4.8m teu by 2025 and to 7.6m by 2050. The Canadian port’s activities and support services are responsible for 100,000 jobs.

Kaity Arsoniadis-Stein, Executive Director of the Vancouver International Maritime Centre, the organisation behind the city’s many expansion projects, said: “Vancouver and its global trade is expected to increase and shift towards the Pacific Rim due to the forecasted demand for resources by China and India. Currently there is no established maritime hub on the west coast of America (just busy throughput ports) and the west coast of Canada is one of the longest coastlines in the world and next door to the Asian markets. Vancouver is also the most ‘Asian’ city in North America with a diverse culture and a diverse sector from mining, forestry and resources, to technology, entertainment software companies, incubators, film and research.”

In the past two decades, a growing cluster of important shipping companies have either moved or set up their regional headquarters in the city.

One of them, Seaspan ULC, the owner of Vancouver Shipyards, Vancouver Dry Docks and Victorian Shipyards, recently won a significant C$8bn share of the Canadian Government’s National Shipbuilding Procurement Strategy (NSPS). In a two-year C$150m project, Seaspan has since transformed its main Vancouver yard in the words of its President, Brian Park, “from a Jurassic park into one of the most modern shipyards in the world”.

Other major players include the German engine-maker Wärtsilä, the classification society DNV GL, Teekay Corporation, Fairmont Shipping, Waterfront Shipping, Oldendorff Carriers, BC Ferries, Jotun Canada and Vard Marine.

Ms Arsoniadis-Stein said: “We have had tremendous interest in Vancouver as a place to establish and invest, with top-level crowds at our marketing events around the world. Vancouver is ideally situated geographically as a maritime hub, but there are so many other things going on here as well. There have been huge changes over the last 10 years.”

Despite the current slump in shipping, she said experts were forecasting global growth and renewed momentum towards 2030. Many were predicting that India and China would quadruple their freight volumes by 2050 with Vancouver ideally placed to benefit.

While the drive to build Vancouver into a leading maritime hub has gained momentum of late, the work of laying the foundations has been going on for decades. The VIMC was founded in 1991 to head up a movement to modify Canada’s maritime tax regime. The need for further modifications to the regime has recently led to a series of tax initiatives devised by the Canadian Government and leading shipping companies for foreign-owned shipping businesses “to modernise the income tax act” as Ms Arsoniadis-Stein put it. These include:

• No tax on international shipping activities carried out in Canada including management and financing activities

• No tax on a non-resident company’s foreign sourced income • No capital gains tax on vessels sold outside Canada

VancouverGeared up to do business with

Regional Focus: Vancouver

21Issue 66 March/April 2017 Ship Management International

Regional Focus: Vancouver

• Tax-friendly capital access and ship financingMs Arsoniadis-Stein again: “We have a strong tech sector

that supports the maritime industry. Originally Vancouver was a jumping-off point for companies headed for Silicon Valley or Seattle, but the longer they stayed, the less they wanted to move.” One of the reasons for that is Vancouver’s quality of life, highlighted by a healthy work-life balance, she said.

The natural surroundings were also a major bonus, with skiing, sailing, hiking just minutes away from the city, she said. Add to this Canada’s universal health care and free education and you have a persuasive argument for attracting the talent needed to grow a world-class maritime hub.

The Canadian Government is spending billions of dollars on infrastructure projects in the city. One of these is the C$3.5bn Asia-Pacific Gateway and Corridor Initiative (APGCI) to build a network of new roads and rail links which, when built, will improve the connections between North America and the booming Asian economies.

As part of a Canadian maritime sector that is committed to alternative fuels and hybrid technology, it is perhaps not surprising that one of Port Metro Vancouver’s aims is to become

the world’s most sustainable port. One of its latest and most topical projects is called ECHO and was set up to reduce the effects of vessel sounds and vibrations on whales, porpoises, dolphins and seals. The project is a joint partnership between the port, the local operator BC Ferries and several local conservation and environmental groups and scientists, with gold, silver and bronze medals awarded to vessel owners and managers who meet the lowest emissions levels.

Vancouver is also investing in future maritime expertise and courses at its main universities. Apart from rebuilding its three Vancouver shipyards, Seaspan recently set up its own succession plan. “Not only do we need to bring in engineers, naval architects and project managers from all over the world, we also need to make sure we are building experience here in Vancouver in order to build a succession plan for the great people who emigrated to Canada,” said Jonathan Whitworth, Seaspan ULC’s CEO.

Mr Whitworth has just led a Seaspan initiative that has invested more than C$2m in two chairs in marine engineering and naval architecture at Vancouver’s University of British Columbia. As the Seaspan CEO put it: “Students coming out of this programme today will be the future shipbuilders of tomorrow.” l

“Vancouver is ideally situated geographically as a maritime hub, but there are so many other things going on here as well. There have been huge changes over the last 10 years”Kaity Arsoniadis-Stein, Executive Director of the Vancouver International Maritime Centre

Shipmanagement: ESW17 Round Table Debate

22 Ship Management International Issue 66 March/April 201722 Ship Management International Issue 66 March/April 2017

Round Table Debate

Sean Moloney Welcome to this industry round table debate which is being held as part of the second European Shipping Week (ESW) here in Brussels. ESW is a key event in the maritime calendar and gives the shipping industry an opportunity to directly address European regulators - the European Commission, European Council of Ministers and the European Parliament – about key issues facing shipping today. Let’s kick off with the first question - Can we guarantee a sustainable shipping industry in today’s economic and regulatory landscape? Edgar Dominic Milla Looking at the economic landscape, if all the elements in the

shipping industry work, then shipping is sustainable. We have seen this happen in the past two to three years where rising pressures, mainly on ship owners, have trickled down to crewing managers. If everyone responds to what is required by the owners and the market, then shipping is sustainable. When it comes to regulation, crewing managers in the Philippines have been very responsive to what is required by IMO and other regulatory authorities. I don’t see an issue with the mandate from the regulatory side

Kuba Szymanski The shipping industry always survives and actually thrives on difficult times. The quality of what is meant by sustainability is my

EUROPEAN SHIPPING WEEK

2017

SMI invited representatives from shipping’s leading companies and associations during European Shipping Week to discuss how sustainable the industry can be with regulation knocking at the door. Debating this thorny issue were: Edgar Dominic Milla, Chief Operating Office, PTC; Dirk Fry, Director, Columbia Shipmanagement; Karoliina Rasi, Public Affairs and Communications Director, European Community Shipowners’ Associations; Norbert Aschmann, CEO, Bernhard Schulte Shipmanagement; Chris Shirling-Rooke, CEO, Mersey Maritime; Kuba Szymanski, Secretary-General, InterManager; Bjørn Jebsen, Chairman, Jebsens and President, InterManager; George Hoyt, Founder, The Face of Shipping; Mark Woodhead, Senior Vice President for Training and Content, KVH/Videotel. The debate was moderated by our Editorial Director, Sean Moloney.

23Issue 66 March/April 2017 Ship Management International 23

question here. If you look around this room, why aren’t we raising enough awareness about what is good about this industry? Why is shipping not seen as a ‘sexy’ proposition, even to the regulatory bodies? We invited the European Commission to attend today but no one turned up which amazes me. We need to work much harder to maintain the quality we demand.

Sean Moloney The whole point about this week is that the regulators are here to meet the shipping industry. What is a sustainable shipping industry as far as you’re concerned?

Kuba Szymanski I think I would love to see a win-win situation for every stakeholder so no advantage can be taken of any one person. I had an interesting meeting in Cyprus where Dirk Fry was present, and on the last panel we heard owners saying “we need to be reasonable” when buying ships. Some statistics for you today: in 2008 there were 40,000 ships, by 2016 we had 80,000 ships. Is the shipping industry in crisis especially if we have the money to buy ships?

Sean Moloney A lot of them are laid up though.

Kuba Szymanski They are, but probably only 1,000. The world fleet grew by 40,000 over these years. Is somebody taking advantage of somebody else?

Sean Moloney George, is shipping sexy?

George Hoyt Nothing can be sexy unless it’s visible. For me, the biggest issue we have is our image and general awareness of the industry. Shipping is invisible in most countries around the world and maybe that is why the regulators aren’t here. We need the man on the street to get behind the people who make the decisions. They can’t do that when we are invisible. So before we get sexy, we have to get visible. But the shipping industry will survive - it has to!

Sean Moloney Norbert, let me bring you in here. What do you think of this whole issue of shipping’s poor image?

Norbert Aschmann We’ve been debating these issues for many years and what George says is valid but we haven’t found the key yet to solving this problem. The industry is, to a large extent, invisible. But the shipping industry is sustainable - can there be a world without shipping? No there can’t. As far as the regulatory environment is concerned, shipping has always been subject to change. Many of

the regulatory changes are targeting sustainability but shipping doesn’t have a choice.

Sean Moloney And I suppose shipping is there to serve world trade. Dirk, what are your thoughts?

Dirk Fry Shipping has never faced such a period of downturn as it is seeing now. But shipping is used to strong winds and high seas so we have been able to overcome and survive these difficult periods in the past. What I see is a slow but sure balancing out of supply and demand because, let’s not forget, the biggest problem we are facing is there are too many ships and not enough cargo. New orders for ships are now dropping and scrapping is picking up. We can’t live without regulation, but shipping needs global regulation, not the US or Europe doing what they dream up. I want uniform regulation worldwide. I think we will manage and shipping will get through this.

Sean Moloney Just picking up on one thing you said about the balance between supply and demand; the one thing that ship owners never do is learn from their mistakes. Are they going to finally learn and stop these boom and bust scenarios?

Karoliina Rasi At ECSA we try and get the well-kept secret of shipping more widely known here. I have identified three different challenges from the regulatory side. One is the slow economic growth and free trade under threat. The future of free trade, what is going to happen? The political situation in the world has changed and we don’t know what the future will look like. This is important because trade is dependant on shipping and vice versa. The second is the regional legislation which Dirk touched on. It’s not a level playing field. It reflects badly on shipping. Europe owns 40% of the world’s merchant fleet and these ships operate everywhere. We are talking about a completely global business so the regional legislation model fits badly. The third is ship financing: access to finance and cost of finance. Since the financial crisis in 2008 the investors and consumers have become shy, so they stopped spending. Secondly, some of the players have left the market.

Sean Moloney When you talk to the European Commission and the European Parliament, do they understand the role shipping plays internationally, and that it needs to be regulated at an international level?

Karoliina Rasi I think when they hear the story that 80% of the world’s goods are transported by ship, they understand that its role is important.

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Bjorn Jebsen I think the answer to the first question is yes, shipping will continue. If you look at the last six months, least of all in Norway, hundreds of millions of pounds has been raised in private equity to invest in shipping. There is interest there. Money is coming in, even if the banks aren’t there. The biggest challenge from the investment side is regulation. It makes it difficult to plan.

Sean MoloneyA few months ago BIMCO came out with a report which said that if dry bulk owners stopped ordering now the market would improve by 2019. If there was a 1% increase in ordering it would improve by 2023, if there is a 2% increase it would never improve. That puts the situation into perspective - whether it is right or wrong.

Bjorn Jebsen If you look at the market in the last quarter of 2016, it was strong. This year has gone up by 20-30%. You read the statistics and the order book and there is an economic force that can change rapidly. You ask why owners keep making these mistakes, and you think it is easy, but it’s not.

Chris Shirling-Rooke We represent an industry in Liverpool worth about £3.5bn, equating to about 12% of the GVA of the region. I look at this slightly differently perhaps and see an opportunity for a culture change. When we look at the industry, we aren’t just looking at shipping but we are looking at the supply chain in its entirety and how it can support other industries. We have just invested £20m in our Maritime Knowledge Hub in Merseyside and it is now an acknowledged centre of excellence. We need to modernise skills and look at what is out there and bring it into our industry. Working in this industry is a job for life - you can’t often say that. We’ve just commissioned a film saying Liverpool is back. 12p in every £1

is generated from the maritime sector. The problem is we all know this but it’s a change of culture and we need to embrace skills and education to tell people more.

Sean MoloneyLet’s open this up to the table now. This issue of cultural change is important; shipping does have a great story. Norbert, your views on the cultural side?

Norbert Aschmann Yes, but culture is another thing that changes constantly. I’ve been in this industry a long time and I’ve seen a lot of change. We are talking about the same thing that George mentioned, namely how do we convey this image that shipping is important, dare I say sexy. The media plays a role but the mainstream media is only interested in wrecks, explosions and human trafficking. The public doesn’t seem to be respective of the role of shipping, but then how long do you want to bore people with the fact that shipping is responsible for moving 80% of goods? In many areas, I don’t share that pessimism. Shipping continues to transport goods, and that is probably what the public is most concerned about. Maybe that would make news. At the end of the day, we can only blame ourselves.

Kuba SzymanskiI like the gist of Norbert’s speech. If we want to be in control, we should stop blaming others. If we want to influence something, we should take the lead. There is so much young talent coming to the industry but we are not taking them onboard. Look at the issue of cadet berths - there are British cadets who can’t get the necessary time at sea. But then you look at Greece where all of a sudden we are seeing young Greeks willing to go to sea for a career. Shipping is doing very well in one particular area, the cruise industry. If you look at the order books, the cruise sector is growing. So if you look at it that way the public

see the shipping industry as a way to go on holiday.

Dirk Fry I’m a positive person, so for me I find shipping sexy. Yes we will always have a problem making the public aware of what shipping is. There have been multiple attempts at making the public aware of shipping: from port visits to the Adopt a Ship campaign. This is a campaign which aims to bring ships closer to those at school. Allowing school children to write to ships’ Masters to understand their routes, what they do and how they operate. We need other entities connected to shipping to assist us in helping to improve the industry’s image.

George Hoyt We have a great story to tell. I’ve been working in the industry for close to 40 years, and have met thousands of seafarers. Every one of them has a story and it is interesting. Shipping, like anything else, needs personality. People need to understand that seafarers are real people. This is one of the reasons we created the Seafarers Mosaic. These tools are there and are free, and people are starting to use them. Likewise the Adopt a Ship programme which we started in 2006 with the Cyprus Shipping Chamber, now has more than 80 ships communicating with 80 classrooms. We’ve recently just introduced it to the Philippines and now we are planting those very same seeds where children talk to the ship once a week. Through this process the children are becoming our ambassadors because they go back home and talk about it. If we can attract school children now, perhaps in years to come they will join the industry.

Karoliina Rasi I find the industry very sexy. Concerning the EU officials, during European Shipping Week we have a lot participating and surprisingly for us is we are organising a master class for the shipping industry which is fully booked. We targeted the EU decision makers. Concerning young

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people, I’ve been discussing with our member organisations and a lot of them have projects where they want to attract young people into the industry. There are many countries in Europe that don’t have a problem at all in attracting seafarers. Of course the world changes and professions change in popularity.

Sean MoloneyI’m going to bring in the question here about seafarers. European shipping has been accused of turning its back on its own seafarer when other countries, such as the Philippines, are actively encouraging shipping as a career. How soon will it be before we fail to have an indigenous seafarer population here in Europe?

Dirk Fry We are trying very hard to spread our cadet places across all the nationalities we employ, that includes Germany and the UK. Talking of the UK, one of the weird things that has happened is that we were getting calls from cadets in the UK who have completed their basic training and need more experience, but couldn’t find a place on a ship in the UK. For me this is unacceptable, so we accommodated them. We have to concentrate on all the nationalities we employ. We need to make the best use of the available resources. I would like to have more support from European authorities to help us in this work and create a level playing field.

Sean MoloneyDo you think shipping needs to be supported in a different way from other industries? When we had the conference system, conference lines were allowed to fix rates because they are there to service world trade. At the moment you’ve got a free for all and you’ve got shipping companies going out of business because their revenues are way below their operating costs. Does shipping need to have that regulatory allowance?

Dirk FryI think we need some regulatory allowance, but I would never support protectionism. To work successfully we need certain tools. We have seen in the last 12 months, shipping companies ask what they can do. I would see a better result if we would have the understanding and support from authorities/regulators to help us to be successful.

Sean MoloneyEdgar, let’s get a Philippines’ perspective on this. Are you making hay while others are suffering?

Edgar Dominic Milla One good thing that regulatory bodies have done to the industry is that two years ago there was a scare that EMSA would stop recognising Filipino seafarers because of the certificates which were coming out. To the benefit of ship

owners, the Philippines government responded in a good way. They put legislation in place that regulated training institutions and that stopped the unfair institutions handing out qualifications left, right, and-centre. With regards to the attractiveness of the industry today, I agree. It is evident a lack of Filipino seafarers have entered the industry. At last count there were about 400,000 Filipino seafarers, but most of them went to the cruise industry. A lot of people see shipping as a dirty industry, meaning you get your hands dirty. Sean MoloneyChris, let me bring you in on this, one element of this is does have a knock-on effect on shore-based industries within the shipping sector. What are your members telling you?

Chris Shirling-Rooke Even with tomorrow’s seafarers, we suspect tomorrow’s seafarers won’t be at sea. I think technology is going to play such an important role. If we are talking about how Europe captures a market then it is with innovation and technology. Even with 3D technology where you can print off bits and bobs for your ships while at sea. This technology has been around in aerospace for a decade and it goes back to how we can learn from similar industries. The aerospace industry has a team of 12 lobbyists at Westminster permanently: the maritime industry is just as big, and how many do we have? None. I’m big into collaboration with governments. Over the next 10-20 years, if we are looking at skills, we have to look at 3D and 4D technology. What skills do the ship managers of the future need?

Sean MoloneyBut the man on the street goes on holiday, he goes on flights - he doesn’t use a bulk carrier. I want to talk about this whole issue of connectivity. How prepared is Europe in embracing change in IT and efficiencies? We are seeing it happening.

Mark WoodheadI think shipping will have to change. It will drive better efficiencies and better performance. Those who don’t change will find themselves cut away from the rest of the industry. One of the things I think shipping needs to do to improve itself is ask what is shipping? We don’t talk about the airline industry as those who have flown planes; we talk about people who have worked in the airline industry. As shipping grows more, it needs to see itself as a wider logistics business.

Kuba SzymanskiWe’ve got a problem in the shipping industry because if you’re not a ship Master or Chief Engineer then who are you talking to? On the other hand, as far as technology is concerned, I think we are engaging with technology big style. But the

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Regional Focus: ????

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problem is technology is not as good as people are trying to paint it. I’ve started doing something silly; how many times can I not connect to the internet in the hotel or airport? 60% of the time I cannot connect. The US Coast Guard and now US maritime colleagues have decided to return to sextants and start again after six years of not training people the art of Master Navigation.

Mark WoodheadIt depends where you want to be. Connectivity is only one part of technology. I think vessels are very complicated. If we go back to the personnel side, one of the issues around engineers and their skills, is they don’t strip down engines like they used to. Technology has driven every industry. Shipping is in a fortunate position that it can look at land-based business and five to 10 years later we can adapt technology. It is the remotest industry in the world. I think if we take advantage of the technology when it is available, connectivity and the internet have changed the way we are on land, so why not at sea?

Norbert Aschmann I’m not quite sure whether I share the same concern of the unavailability or unreliability of technology. I think it is pretty good. The question is how we manage the remaining risks. I was a bit surprised to hear they are training people on sextants again. What does it mean?

That GPS is completely unavailable? Sometimes I get suspicious because there are so many people selling technology. Whether it makes sense immediately is debatable. I don’t want to promote the principle of simple ships for simple people. I am suspicious when new technologies are promoted for immediate use. The more sophisticated shipping gets, the more attractive it could become for European seafarers. What we often forget is that seafaring doesn’t have to be the end of it. There are many CEOs who started their career onboard ships.

Karoliina RasiI have to agree. If shipping is a late mover then we can benefit. We can take onboard technology that benefits our sector. ECSA is involved in an initiative called e-manifest that concerns the short sea shipping and administrative formalities related to the arrival of the ship to a port, e-manifest is a harmonised electronic cargo manifest. When I first saw the map where a truck leaves Rotterdam and ends up in Gothenburg, they issue one document while at the same time a ship does the same route and they have to issue 12 documents. We have to do something to become more efficient.

Sean MoloneyI think, bringing the two elements together, and what Chris was saying earlier, the shipping of tomorrow will be a different industry to how it was 20 years ago. Will

the seafarer of the future have a screwdriver and hammer or will they be an IT-savvy techno-kid as they call them. That may be a way of continuing to attract young people in because it is dynamic industry.

Chris Shirling-RookeIt does. I’m very hopeful about Europe. This is our sweet spot with innovation and technology. That is what we are good at. We won’t compete with the rest of the world in building big ships. Where we are going to compete in is building the most advanced technological ships in the world. There is a research ship being built in the UK and it caught people’s attention because they asked the public to name the vessel - the number one name was Boaty McBoatface. This £300m-£400m research ship was going to be called Boaty McBoatface. It was going to cause a bit of a problem! It was actually a genius bit of PR - really good news and a fantastic European project. It was designed in Norway and built in the UK. To actually have people energised and understand why these types of vessels are important for the environment, for research. In the end it was called the RRS Sir David Attenborough while the small submarine has been named Boaty McBoatface. But it put maritime right at the top of people’s conversation. Sean MoloneyWhat a very positive note to end on, ladies and gentlemen. Can I thank you all very much indeed for your participation today. l

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Market Sector: ECDIS & Navigation

Importing safety practices from aviation isn’t a panacea for the shipping industry, but there are opportunities to learn, argues

Transas CEO Frank ColesCivil aviation stirs mixed emotions

among seagoing types. It is often held up as a shining beacon of what the shipping industry could achieve if only it saw - and followed - the light. Others argue that such comparisons are unfair, inappropriate or dismiss them as an overly simplistic parallel. The truth probably lies somewhere in between these two extremes.

For aircraft, the direction of travel has always been towards standardised equipment, streamlined administration and procedures, and centralised traffic control – tendencies that instil a culture of safety permeating every level of activity.

The disappearance of flight MH370 reminds us that the aviation industry has shortcomings of its own, not least its flawed approach to asset tracking. In shipping, AIS has proved a workable, industry-wide answer.

Nonetheless, shipping is most harshly judged against aviation when the discussion turns to human error and officer training. As is commonly acknowledged, up to 80% of incidents and accidents in shipping are the result of either mistakes in performing a task, or

by a failure to take action to avoid an incident escalating. Accident investigations often reveal that a chain of small decisions or unobserved incidents leads to a larger one.

In a study carried out by Berg (2013), maritime was found to be 25 times riskier than aviation, based on deaths per 100km travelled. The simple explanation is that airlines prioritise safety because their ‘cargo’ is predominantly human passengers. However, the crew operating cargo planes have to adhere to the same training regime as those carrying people.

“Pilots must undergo a rigorous assessment every six months,” noted Mr Coles.

“There is nothing close to this in maritime. I find that strange, given that a ship’s Captain takes the ultimate responsibility for delivering the food we eat, the clothes we wear, the fuel we burn and everything else we take for granted. It’s almost as if the shipping industry lives in the shadows - behind a shield of invisibility.

“My worry is this ghostly existence affects how shipping companies go about their business, trickling down as a lowest common denominator mentality in terms of the crew hired, the training they receive, the salaries they are paid and the respect they are given.”

Mr Coles believes there is a deep-rooted qualitative difference in the training philosophies pursued in the two sectors.

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FLYINGLESSONS

“It’s almost as if the shipping industry lives in the shadows - behind a shield of invisibility”Frank Coles, CEO, Transas

Market Sector: ECDIS & Navigation

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“In shipping, under SOLAS and STCW, the objective is certification. Once certified, an officer or engineer can continue to work until revalidation is due five years later, which does not necessitate any refresher training. In aviation, the focus is on skills, competencies and continually honing their ability to react in emergency situations.”

Shipping companies are of course free to go beyond minimum requirements, but few see a compelling need to do so. “While some cruise and offshore operators understand the value of long-term investment in crew development, there are unscrupulous operators at the other end of the spectrum who choose to ignore suspect paperwork that was obtained on the streets of Manila or somewhere similar.”

One operator Mr Coles cites as having successfully adapted lessons from aviation “to an extraordinary degree” has been Carnival.

“Their training model is fascinating,” he said. “After the Costa Concordia, they spent a lot of time evaluating their bridge procedures. They went and studied the practices used at American Airlines. They took these home and absorbed key elements into their bridge management and training systems.”

Carnival changed the role of the ship’s Captain, said Mr Coles. Instead of leading

from the front, he entrusts the control of the ship to his officers.

“This approach engenders trust in the team and gives the Captain greatly enhanced situational awareness,” noted Mr Coles.

Counterintuitively, the more efficient the automated system, the more crucial the human contribution made by the operators, Mr Coles observed.

“Humans are less involved, but their involvement becomes more critical.” This is known as the paradox of automation, where an error in an automated system

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multiplies until either it is fixed or the system shuts down.

Transas is preparing for the challenges of this automatic future by positioning simulation training as one of the four legs of its Thesis concept.

“Simulator training is going to grow in importance as more and more routine aspects of vessel operation are automated,” said Mr Coles.

A significant problem within the maritime industry is the temptation to find ‘workarounds’ to standard operating procedures. Crew develop these behavioural adaptations to cope with unrealistic or impractical operational demands and challenges. The most common workarounds relate to reporting paperwork, personal protective equipment, work-rest hours, and navigational rules.

Airlines are far less tolerant of deviations from accepted practice, and aberrations are more likely to be challenged or reported. However, it is also fair to point out that the aviation industry

has targeted reducing administrative duties in the cockpit through automation, while no such claim can be made in shipping; in fact, the opposite trend prevails, with new regulation driving more paperwork required by the bridge.

Maritime needs to challenge itself to accept automated reporting and monitoring, suggested Mr Coles. Reducing the administrative burden on crews would have a

significant positive impact on the ability to perform better.

Standardisation in the aviation sector has been massively encouraged by the fact that only two major suppliers build civil aircraft, while ships and ships’ equipment come in all shapes and sizes. The competence of a ship’s crew may sometimes depend on their exposure to a particular maker’s equipment.

Marine equipment could be further standardised, making user interfaces easier to understand and more consistent, suggested Mr Coles. This would lessen the time spent by crew on ‘familiarisation’, make training more ‘portable’, and cut the risk of operator error. All this points to safer operation.

For Mr Coles, however, the aviation sector’s coordinated approach to traffic

control systems provide the most telling opportunity to enhance the entire maritime safety culture. Air traffic control, after all, is acknowledged as pivotal to the safety of the skies and to smooth take-offs and landings.

“ATC can see situations develop more quickly than an air pilot relying on visual sighting or his instrumentation,” said the Transas CEO.

“While ships move at a more sedate speed, the fact remains that the majority of collisions and incidents happen in busy shipping lanes and ports relatively close to land, so increased maritime traffic control and management could have a significant impact on safety.”

Transas already installs vessel traffic monitoring infrastructure around the world, from simple radar apparatus to full coastline management solutions covering half a dozen ports. But Mr Coles identified other drivers that he believed were already nudging maritime towards a more coordinated vessel management future. With geopolitical concerns rising, coastal states are likely to take a keener interest in monitoring and managing the passage of all ships through their territorial waters, he suggested.

“Flag states will be apprehensive about increased traffic in unmanned and drone ships passing through their economic waters – whatever their size - without knowing where they’re from and what they might be carrying. It seems logical to me that a government wishing to protect its waters will make the jump from monitoring to a desire for control.” l

Ship Management International Issue 66 March/April 2017

“Simulator training is going to grow in importance as more and more routine aspects of vessel operation are automated”

Market Sector: ECDIS & Navigation

33Issue 66 March/April 2017 Ship Management International

Market Sector: ECDIS & Navigation

With the size of today’s vessels, more variable crew skills and greater bridge complexity,

hazard detection is more essential than ever for safer operations.

That’s according to Guidance Marine, a developer and supplier of local position reference sensors for Dynamic Positioning (DP) and other vessel control systems.

Guidance Marine, headquartered in the UK , provides expert relative positioning sensors including the RangeGuard system – a targetless microwave situational awareness and proximity sensor. Launched in 2015, the system is suitable for use on mobile and fixed structures and for applications including ship to ship

transfers, docking, super yachts and wind farms.

“There is an industry desire for more safer and efficient operations,” said James Grimshaw, Marketing Manager for Guidance Marine.

The RangeGuard system measures the distance to the nearest object. Based on radar technology, the unit is a plug and play proximity sensor to detect unseen objects for vessel protection and a number of RangeGuard sensors located around a vessel act like a parking sensor, or electronic bumper, to provide SafeSurround.

The RangeGuard Monopole system is a new type of position reference sensor that does not require a dedicated target – instead it uses the local environment

as its target, typically the leg or tower of a wind turbine which removes the need for physical targets to be installed which makes the vessel completely independent.

“This can increase both safety and decrease turnaround times,” explained Mr Grimshaw. “There are alternative berthing approach systems but Guidance Marine’s RangeGuard is the first targetless system that can safely position vessels using the environment as a reference (such as the monopole wind turbine) without the need for a fixed target.

The RangeGuard sensor is currently being trialled onboard Østensjø Rederi’s platform supply vessel Edda Ferd. Mounted port and starboard side, it was installed to provide situational awareness when near oil rigs. l

Hazard detection more essential than ever

34 Ship Management International Issue 66 March/April 2017

Market Sector: ECDIS & Navigation

The dangers to safe navigation are becoming ever more complex with weather and

geographical features not the only hazards feared by seafarers.

With developments in navigational technology come new dangers in the form of cyber security attacks. We worry about attacks on our laptops, PCs and mobile phones but, according to ECDIS (Electronic Chart Display and Information System) training provider ECDIS Ltd, ECDIS systems which are essentially PCs are often forgotten about despite running very important software.

“In the main, but certainly not universally, the maritime industry has a dismal record in its slow and painful

transition from paper and analogue methods of shipping to new, innovative technologies when compared to industry rivals like aviation,” said George Ward, Project Support Manager, ECDIS Ltd.

However, he said the seafaring community was becoming more aware of what can potentially happen with cyber security.

“There is a real threat for cyber activists to start gaining and changing sensitive shipping data from our onboard equipment, such as changing the vessel’s route to cause a grounding, gaining access to digitally controlled engine rooms and causing alarm mute while an engine fails or even catches fire due to a ‘manual’ overload by the hacker,” said Mr Ward.

“It is expected that shipping companies and independent vessels could be next on the list for major cybercrime activity as it is as yet mainly unexplored territory for hackers who are only now starting to realise its huge potential as a target. Attacks now have the capability to obtain sensitive ECDIS, AIS and GPS data, to name but a few, so it is vital that the correct procedures and processes are in place to stop the worst from happening.”

ECDIS Ltd, based in Fareham, UK, runs a Cyber Security Awareness (CSA) course – a one-day theoretical course which includes case studies and discussions regarding examples of cyber security risks within the maritime industry and universally.

of navigation cyber-attacksDANGER

Market Sector: ECDIS & Navigation

Mr Ward wrote the course and he has also devised a Cyber Security Management (CSM) Course, designed for management and IT teams within the maritime industry, which will be launched soon. Elements of all of the company’s BTM, BRM and even ECDIS courses now include cyber prevention and awareness modules.

According to Mr Ward, the issue, alongside a lack of awareness by employees and users of operating systems, is the development speed of technology. The digital age of super computers, 4D printing and nano technology is like no other and is proving to be self-accelerating, he said, with one technology put into operation while the next generation – more powerful and innovative – is being produced, thereby creating an always expanding, developing and aggressive cycle.

“After years of this development, technology companies are starting to adapt to the issue by developing and applying software updates weekly which try to

manage security flaws within the software, while changes to future developments can help manage the constantly increasing cyber-crime threat; until the next global threat takes place or takes over,” he said.

Mr Ward added that some maritime software manufacturers have used a

physical security method of ‘locking out’ their systems in order to intercept physical security threats altogether, but this ironically increases the complication of applying security software updates.

“This restriction can complicate a shipping company’s decision to have an integrated bridge system due to issues with syncing and communication between different software manufacturers, also meaning only specialised engineers and trained software technicians are allowed to apply updates,” said Mr Ward.

“Restrictions like these could mean that your system is 80 per cent more susceptible to cyber threats.”

Mr Ward said it was important everybody was educated in cyber security awareness.

“Cyber security isn’t an issue we can ignore,” he said. “We often concentrate and develop robust procedures purely for the few safety critical pieces of equipment, but the attack will take place on a tertiary system that is connected to it.” l

“There is a real threat for cyber activists to start gaining and changing sensitive shipping data from our onboard equipment”George Ward, Project Support Manager, ECDIS Ltd

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When toiling over a hot word-processor gets too much for me, I like to get down to

my nearest port and have a prowl around. These days of high-security and full application of the ISPS Code, it is all high fences and no admittance, but there are a few vantage points where you can actually see a few ships alongside. And the other day I was rewarded by the movement of a chemical tanker through the lock on her way to sea, which was a great treat for me.

She was a smart, beautifully-kept ship of around 3,500dwt (I checked when I returned home), only five years old and operating in the European trades. It was also notable that as she went into the lock and tied up for 20 minutes or so, the lines were being handled by a single seaman forward, and a single colleague down aft. Indeed, there were more port employees on the quayside handling the ropes, which comprised a line and a spring, at each end.

The two seamen knew what they were doing and there was nothing untoward happening as the ship entered the lock, settled down, and departed for sea. I was slightly worried watching the chap down aft as he left the poop to take up the pilot ladder, single handed and which was quite a struggle on his own, as he hung over the open rail. If it had been me, I would have yelled for some help.

Among my old photo albums inherited from my uncle, is a picture of him as Second Mate in the 1920s, leaving

port on a ship which was much the same deadweight as the chemical tanker I had been watching. He is on the forecastle, photographed from a bigger company ship, alongside which they have been lying, and from which they are letting go, before going to sea. There are 10 seamen on the forecastle, while three more can be glimpsed on the forward well-deck, attending to the spring. We can be assured that down aft, there will be about the same number, probably with the Chief Officer in charge.

There will clearly be a few more ropes to handle, but fundamentally, the operation will not have changed that much over the 80 or 90 years which have passed.

On the chemical tanker, circa 2014, the lines forward and aft are stored on the drums, so there is much less rope-handling required, although there are still winches and windlasses to be driven, heaving lines to be hove and the need to walk around from the winch controls to the ship’s side to see what is going on.

Doubtless the Master and operator of the tanker would angrily protest that I had no business spying on them, and that their distribution of manpower on “stations for leaving harbour” was well tested and perfectly safe and adequate. You could probably also argue that my uncle’s little general cargo ship, even festooned, as she was, with derricks, was perhaps over-generously manned. But the extreme lean-manning on the chemical tanker, it

occurred to me at the time, seemed to be taking serious risks with life and limb, with but a single soul at each end of the ship, at one of the most labour-intensive evolutions that is needed in any ship’s operations.

The master, on the bridge with the pilot and with luck, a helmsman, could have seen if the man on the forecastle had got into trouble, had put his foot into a bight, or something frightful had happened with a broken line. I doubt that he could have seen his chap down aft, unless he had good CCTV fitted. And if the seaman struggling with the pilot ladder had missed his footing, or plunged into the lock, he would only have been alerted by the shouts of bystanders, unable to help on account of the security fence.

When the whole shipping industry is struggling with an almost total absence of reward, you might think it is the wrong time to be worrying about manning levels. But then you read of the accidents that still happen when insufficient numbers of people try and do a job and get overtaken by events. People have been maimed and injured in such a fashion and the IMO, no less, is conducting an exercise to try and make mooring and unmooring safer.

It may be that I am terribly unfair. It was a bright, sunny and calm day. Perhaps all the other hands were having their lunch, or asleep. But I’m sorry, to be safe, they could done with more, and it was perfectly clear that they weren’t there when they were needed. l

One man and a dog

Michael Grey, MBE, is an internationally respected

maritime commentator

AlternativeViewpoint

Ship Management International Issue 66 March/April 2017

http://www.nekoship.nl

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A spectacular landmark for passing ships? A UK Royal Navy base? Or an outcrop of southern Spain?

The British Overseas Territory of Gibraltar has been all three of these at one time or another. However, its pivotal position on a major sea route has given it a far more modern role as Europe’s number one bunkering port and a favourite stopping off point for an almost unending procession of superyachts.

But its importance internationally has been highlighted extraordinarily as it looks set to become entwined in the negotiations between the UK, the European Union and now Spain over Britain’s exit from the EU.

Strategically perched on the route that links the Mediterranean, the Atlantic and the Caribbean and overlooking the Strait of Gibraltar, the Rock is a vibrant and dynamic port city with a bulging infrastructure that belies its tiny 6.7 square kilometre size

and population of 32,000. Gibraltar shares a 1.2km-long land border with Spain and lies 14km north of the African coast of Morocco.

The numbers and volumes of projects in Gibraltar in the last 12 months have exceeded every previous year. It is generally acknowledged in the region that the main reasons for this current upsurge in activity are greater global appreciation of its pretty

Ship Management International Issue 66 March/April 2017

GIBRALTAR ROCKSEurope’s number one bunkering port, a pivotal link between the Mediterranean and the Atlantic Ocean, a favourite stopping-off point for superyachts and a tiny city port with a burgeoning infrastructure base. Gibraltar has never been busier

Regional Focus: Gibraltar

Regional Focus: Gibraltar

39Issue 66 March/April 2017 Ship Management International

and unique location, a dynamic and interdependent

shipping sector and the hands-on stewardship of Commodore Bob

Sanguinetti, the CEO and Captain of the Gibraltar

Port Authority (GPA).Many of the sector’s

companies are involved in Gibraltar’s primary industry

– bunkering – which is also the factor that has

helped forge one of its biggest success stories

– the exponential growth of Peninsular Petroleum, the

bunker supply and resale company founded by John Bassadone, son

of the founder and joint owner of Gibunco. The younger Bassadone was a junior trader in London when he

started the company in 1996 with 75,000 tonnes of bunkered fuel

oil from the Gibraltar refinery. Since then he has overseen recent average annual

growth of 22%. Peninsula now supplies 13.1 million metric tonnes of fuel and has a network of 20 global

offices including such global maritime hubs as Singapore, Shanghai, ARA, Houston, Hong Kong and Tokyo (See ‘How I Work’ article on John Bassadone on p52).

Another local sector that has continued to prosper despite the global downturn is ship repair. Among recent

contracts at Gibraltar repair specialist Gibdock last year were scrubber retrofits for five Vroon Offshore Services-operated offshore support vessels and, backed by a favourable, post-Brexit exchange rate, repairs to a range of German-owned general cargo ships, container ships, reefers and bulk carriers. “We are maintaining a strong ferry and ro-ro business, have started new cluster work from the UK Ministry of Defence, are getting more ballast water appliance work and pipework contracts, while Dutch-owned dredgers have proved a good source of repairwork too,” said Gibdock’s enthusiastic Managing Director, Richard Beards.

The week SMI visited Gibdock in February this year the yard was technically full with eight vessels berthed at the quayside including the multifunctional subsea vessel (MSV) Olympic Intervention and several ferries and offshore vessels.

Gibdock’s recently opened specialised prefabrication area, Pad 1, has enabled the company to take on more complex offshore projects, many of them from repeat customers. “In line with our offshore successes, we are also continually improving our QHSE (Quality,

Health, Safety and Environmental Management). While some shipyards may be tempted to seek work based on aggressive pricing alone, we know that safety and the environment in particular are key concerns for offshore owners and operators,” said Mr Beards.

However, the offshore industry’s bleaker side – caused by the sector’s five-year trough in global trading – was reflected in an increase in local lay-ups of offshore supply and support vessels including the demise of one of the world’s largest and most futuristic pipelaying vessels which is worth an estimated €400m.

One of Gibdock’s other specialities is repairing and refitting cruise ships – the shipyard is very close to Gibraltar’s cruise terminal – and it recently carried out a two-week repair and renewal project on Louis Cruises’ 41,000gt Thompson Majesty. “It is especially satisfying when Gibdock’s capabilities for on-schedule high quality work are vindicated by a high-profile owner in the luxury cruise market,” said Mr Beards.

In another sign of Gibdock’s year of prosperity, the company has recruited 16 new trainees to its apprenticeship scheme. “We are strongly committed to the programme so we can develop a succession plan to foster the ship repair technicians and managers of the future,” added Mr Beards.

Like Gibraltar’s repair market, there are exciting changes planned at Gibraltar’s Ship and Yacht Registries. The number of ships registered at the Ship Registry in the last 14 months was 290 – a 2% increase on the previous year. The Yacht Registry, meanwhile, has been through a near-revolution with almost 900 superyachts on its books. For owners and operators, one of the Registry’s unique selling propositions (USPs) is its almost blemish-free white-listed record at the Paris Mou and the US Coast Guard inspection regimes – and 18 months ago it was also elevated to the Tokyo MoU white list.

On a more political note, Britain’s decision to leave the EU could have a profound impact on the Registry. Richard Montado, Maritime Administrator at the Gibraltar Maritime Administration (GMA), the government body that runs it, said: “Brexit has had a similar psychological impact on the Registry to the UK Registry. It looks as if one-third of the fleet who have registered here for domestic taxation advantages could be looking to flag out.”

More encouragingly, the Gibraltar government has provisionally approved the formation of a new ‘post-Brexit’ Registry, as Mr Montado describes it. “The idea is to operate the Registry 24/7 and in different time zones. We also aim to increase the size of the Registry and maintain our same high standards. We’re looking to offer products to Far East owners and also owners in the US where we are recognised as a white-listed, high performing flag,” he said.

Two other structural improvements that will appeal to ship owners and managers is a recent decision to move the two Registries online – a project that is due to be completed in the autumn of this year. It means that all registering and other services offered by the Registries such as seafarers’ certificates will be computerised. On the new Registries, owners will be able to register ships while they are still being constructed.

40

“One of the advantages of registering in Gibraltar is that everything is close by. You can walk to the post office or the hospital and when you are fed up with going local you can go across the border to Spain. Most of our customers live in Gibraltar and as a region it feels very safe. Education is paid for by the Government, buses are free, there is no inheritance tax or VAT and in 2011 corporation tax fell from 30% to 10%. If somebody gets mugged here it is headline news,” said Jens Sorensen, Managing Director of ships’ registrations provider Sorek Group.

From registering to refuelling. The number of bunkering visits by commercial vessels to Gibraltar hit record levels in 2016-2017. The number of superyachts visiting to refuel has also risen to unprecedented levels matched by newly opened and expanded anchorages in Gibraltar’s Mid-Harbour Marina, the Ocean Village Marina and Marina Bay giving visiting vessels up to 90m-long some 600m of berthing facilities. Albert Isola, Gibraltar’s Minister of Commerce, said it was “fantastic to be doing that well in the current economic climate”. Many yachts were staying longer after refuelling and enjoying Gibraltar’s hotels and restaurants and such tourist attractions as cable car rides, scenic tours of the Rock as well as exploring its intriguing underground cave network.

And more vessel visits means more potential business for the Gibraltar Port Authority (GPA), the Gibraltar Tourist Board and the region’s ship and port agencies. There were 25 local ship agencies at the last count. One of the larger ones is INCARGO, part of the INCARGO Group. Its director George Dyke said the agency has handled 60 to 65 ships a month in 2016-2017. “Bunkering dictates 90% of the shipping business in Gibraltar plus the support services – husbandry, crew changes, storage and minor repairs. That’s why I would like to see permanent bunkering storage in Gibraltar. We also have more anchorage space than the Port of Algeciras [which lies the other side of the Bay of Gibraltar], so theoretically we should be doing our bunkering more effectively. We bunkered 3.8m tonnes last year, though during our peak period in 2007-2009 we reached 4.5m tonnes,” he said.

INCARGO handled more cruise ships – notably from the Royal Caribbean Group, Celebrity Cruises and Thomsons

Cruises – than in previous years and 238 cruise liners were scheduled to call in 2017, said Mr Dyke. Two new cruise liner berths are also planned for the port. Although it had all the right service facilities, Gibraltar needed more accommodation for the crews of longer-staying ships, said Mr Dyke. Although a Holiday Express hotel is opening in 2017, Mr Dyke said the region needed more beds “to compete with Algeciras where you can stay for €70-a-night while it is much more expensive here.”

The Algeciras question was raised by Ian Penfold, Director of Gibraltar’s largest port agency, MH Bland, which was founded in 1810. Mr Penfold, who was a member of the Government-led marketing groups who recently visited Singapore and Hong Kong, said the initiative had attracted a lot of new business to Gibraltar. “We have had to do it as we have been getting so much competition from Algeciras which runs its own marketing trips,” he said. MH Bland handles an average of 140 to 150 ships a month and is aiming to top 200. It has also expanded its agency and support services to 13 overseas offices – the latest will be in Casablanca this spring. Because of the recent surge in superyacht visits, the company plans to open a separate department to service the sector.

One reason for the Gibraltar shipping sector’s recent buoyancy has been the weakening pound, said Alex Lavarello, Director of port agency Turner Shipping. “The devaluation of the pound against the Euro virtually gave us a 20% advantage overnight, allowing for more flexible trading and making Gibraltar feel less hemmed in,” he said. Another cause for optimism was a new flight service from Tangiers airport which has brought Chinese businesspeople to the region for the first time, said Mr Lavarello.

He said globalisation and the rise of the internet had prompted the number of local shipping agencies to grow from 10 to 12 around 15 years ago to “a lot more now – approximately 25 – and means that eventually all agents will have to work together or diversify”.

“Gibraltar is giving out a lot of licences. However a bunker call is something that is very easy to do and any agent can do it. It is when something goes wrong that an agent is worth his money as we’ve seen time and time again. The biggest issue is when agents

Ship Management International Issue 66 March/April 2017

Regional Focus: Gibraltar

set up business in Gibraltar and then set up another agency in Algeciras where getting a licence is cheaper,” he said.

Gibraltar was in a position to react quickly to Brexit and “shipping may be the pillar to support the Gibraltar economy like it did once before,” he said. The only real snag was the colony’s relationship with Spain, which has periodically contested ownership of the colony with the UK. The solution could be to move to “joint sovereignty” said Mr Lavarello.

Danny Gabay, Director of logistics service provider Redwood International, said the buoyant bunkering market and the increase in visiting ships had created a brisker trade in the delivery and collection of spare parts in 2016-2017. Another “cash booster” was the increased activity of the shipyard and the demand for spare parts for ship repairs. “Whenever a ship stays in the yard for a month or so we get a lot of orders for spares coming in and going out,” he said.

Mr Gabay said the number of systematic checks at Gibraltar’s border with Spain, which is outside the EU’s Customs Union but inside the Schengen area (the European area of passport-free, unrestricted borders between 26 member countries) on the Spanish side, was increasing due to an upgraded system that was introduced in March this year. He said it involved “more red tape and hold-ups” but he did not believe Brexit would have a negative effect on his own company’s business activities. “The problem will be the movement of people, not goods, and on the positive side we are no longer seeing the seven-hour queues that used to build up at the border,” he said. “At the moment it is easier to procure parts and supplies from Spain than anywhere else as it is next door,” Karl Alecio, Redwood’s Operations Manager, observed.

One person who will help to oversee Gibraltar’s transition to a post-Brexit future is its Minister for Commerce, Albert Isola.

Mr Isola, who was until recently the region’s Minister for Shipping, said: “Although it is brutally competitive in the bunkering sector and equally so in the superyachts sector, if we raise the bar in terms of the quality we deliver we will see more business coming through – as we have seen in the past two years.”

He said the Government’s decision to allow future ships to be put on the Registry during construction was “an innovative way of providing security during a time of economic uncertainty when a shipyard could go bust while a ship is still hallway built.” He said that by registering and putting a mortgage on the vessel, it became the owner’s asset and they could “pull it out of the yard and finish it somewhere else”.

Apart from improving the blending of bunkering fuel and reducing the sulphur content, another commercial innovation was to introduce land storage for bunkering. “We have gone out publicly and had expressions of interest and engaged with a number of companies,” he said. “It is a necessary investment for the long-term future of the sector here which we can deliver in a relatively short time. A proper land-based bunkering facility will enable us to meet our standards much more easily than we would with floating storage.”

An area Mr Isola would like to expand is shipmanagement. “One of the areas we think we should be much better at is shipmanagement – we think we are ideally located for companies to have their shipmanagement based in Gibraltar, particularly with the volume of shipping that is coming through the Strait of Gibraltar,” he said. l

Regional Focus: Gibraltar

http://www.giboil.com

46 Ship Management International Issue 66 March/April 2017

In the three years since he took over as CEO and Captain of the Gibraltar Port Authority (GPA), Commodore Bob Sanguinetti has overseen a revival of the shipping

sector, helped to foster a series of key port improvements and important infrastructure projects and launched an aggressive marketing campaign.

Born and bred in Gibraltar, Commodore Sanguinetti served in the Royal Navy for 30 years, commanding several Royal Navy warships and rising to the rank of Commodore. After working at the UK Government’s Ministry of Defence, Cdre Sanguinetti was Head of Intelligence at the UK’s London-based National Operations Headquarters before taking up his current post at the GPA.

In 2016-2017 he has helped to plan, foster and oversee a series of upgraded bunkering projects, new facilities for cruise ships and superyachts and the GPA’s move to a new and impressive headquarters. The major items on his 2016-2017 agenda have been the extension of a former bunkering jetty into new berths for superyachts and small coastal craft plus a new range of concierge services for crew members as well as ship repairs and general husbandry such as water supply and slops discharge facilities. One of Cdre Sanguinetti’s key strategies behind this is to encourage longer stays in Gibraltar. “We have introduced a more comprehensive package for visiting ships and their crews, one of the key reasons for this being to encourage ships to stay longer when they refuel in Gibraltar. Some superyachts have even stayed for several weeks recently,” said Cdre Sanguinetti.

Another major project is a new state-of-the-art Vessel Traffic Service (VTS) which will be based in a purpose-built four-storey tower on a limestone promontory on the side of the Rock and give the VTS team a bird’s eye view of the movements of ships in the Strait of Gibraltar. The project will be launched in the autumn

and will replace Gibraltar’s existing VTS system which has been in service since 2011. The web-based information management system will include infra-red CCTV cameras to give the VTS team sharper monitoring and control of ship activities. The size of the VTS team has also been increased from five to 10 operators by the GPA in the past five years.

“The new VTS system will enable the flow of information across Gibraltar’s stakeholders to be far more fluid than it has been in the past. In addition to increased functionality, the contract includes a maintenance package, together with software updates and upgrades over the next five years and future-proofing for the planned introduction of e-Navigation,” said Cdre Sanguinetti.

The new Mid-Harbour Marina which was completed in 2016 has 500 metres of deepwater berthing facilities for superyachts with a minimum depth of six metres and deeper in most areas. Responding to rising demand from superyachts, extra berths have also been added to the marinas at Marina Bay and Ocean Village, the glamorous apartment complex overlooking the Bay of Gibraltar with capacity for yachts up to 90m-long.

Cdre Sanguinetti’s efforts to invigorate the Gibraltar shipping sector have included a series of marketing trips headed by Albert Isola, the Minister for Commerce, to study overseas shipping sectors and attract potential new business to Gibraltar. So far the groups of up to 12 people including members of leading companies and Gibraltar’s maritime trade bodies, have visited Hong Kong and Singapore with a third trip to China scheduled in the near future. “It’s an aggressive marketing campaign supported by the Government with direct engagement with ship owners to better understand their needs. The campaign will continue throughout 2017 to ensure that the Port of Gibraltar continues to provide the best possible support to the shipping community,” said Cdre Sanguinetti.

The Masterof all

Gibraltar surveys

Regional Focus: Gibraltar

48 Ship Management International Issue 66 March/April 2017

Despite the slump in the global shipping market, there has been an upsurge in the number of ships bunkering in Gibraltar with more than 245m gt of vessel calls in 2016 consolidating Gibraltar’s reputation as the largest bunkering port in the Mediterranean. In the past 14 months visits by commercial ships have increased while the number of yachts and superyachts berthing in Gibraltar has hit an all-time peak. As the tourist attractions of Gibraltar reach a wider global audience, the number of cruise liner calls have been increasing.

A project that has been discussed for several years by Gibraltar’s main stakeholders is the need for a permanent land-based marine fuels and bunkering facility, particularly with the recent upsurge in the bunkering of ships and superyachts. The Government recently invited proposals for the design and

construction of the facility which will have a minimum storage capacity of 225,000m². Two other developments by Gibraltar’s Peninsular Petroleum and Macoil will add more capacity to the Rock’s existing floating bunker infrastructure.

The go-ahead for another important fuel-related project was given by the Government in 2016 after it signed an agreement with Shell subsidiary Gasnor for the building of a regasification unit to receive, store and regasify liquid naturalised gas (LNG). The LNG will be used in a new dual-fuel gas-fired power station which is being built in the Port and is due to open at the end of this year. A purpose-built jetty will allow an LNG carrier to berth alongside and discharge the gas. Cdre Sanguinetti said the project was a “significant milestone” that offered refuelling ships a green alternative to conventional HFO.

Future initiatives include increased accommodation, eating-places and facilities for ships’ crews including the building of a new Holiday Inn which is due to open in 2018 and the introduction of rigorous training programmes run by the GPA with two specialist companies, Oil Spill Response Ltd (OSRL) and the Resolve Marine Group, to strengthen the Port’s crisis and emergency response levels and “make sure we are ready to deal with a major crisis if it occurs”, said Cdre Sanguinetti.

Official Government figures show that the Gibraltar maritime sector contributes between 5% and 10% to the region’s GBP. “The Port finished 2016 and started 2017 very strongly with an estimated 25% increase in output,” said Cdre Sanguinetti. So despite a few gloomy predictions about the effects of Brexit and sovereignty issues about its shared border with Spain, the Commodore’s efforts to consolidate and modernise Gibraltar’s maritime sector have met their targets. l

“The new VTS system will enable the flow of information across Gibraltar’s stakeholders to be far more fluid than it has been in the past“Commodore Sanguinetti, GPA

Regional Focus: Gibraltar

50

Regional Focus: ????

Ship Management International Issue 66 March/April 2017

The day the world’s largest superyacht was arrested in Gibraltar

50 Ship Management International Issue 66 March/April 2017

One of Gibraltar’s biggest talking points of 2017 has been the arrest of the world’s largest superyacht , the Russian-owned and Philippe Starck-designed

superyacht known simply as A.The 143m-long Bermuda-registered vessel which has three masts

taller than the UK’s Big Ben arrived in the Bay of Gibraltar in February for refuelling before starting her final sea trials. The futuristic-looking superyacht was promptly arrested – launching a flurry of emails and phone calls between lawyers in London and Gibraltar.

Guy Stagnetto QC, a partner at Gibraltar’s TSN Barristers & Solicitors, said: “As usual with these things time is of the essence and we had to move very quickly following her arrival at dawn for refuelling. As is evident from the Court papers and the press reports, Nobiskrug shipyard, the vessel’s builder, arrested the yacht as part of a dispute over a final construction invoice and other claims totalling €15.3m.”

Inevitably while the legal arrest paperwork was drafted, Gibraltar’s Admiralty Marshal, Liam Yeats, the court officer responsible for ship arrests, was put on notice of an impending arrest.

Mr Yeats then sent his bailiff to serve notice on the €350m vessel and take custody of its papers. The operation involves close cooperation between various bodies including the Gibraltar Port Authority. “One normally puts ship keepers onboard the vessel to make sure there are no problems with the crew and ensure

vessels do not abscond. This would have been one of the more unusual assignments for ship keepers” said Mr Stagnetto. There were 18 ship arrests in Gibraltar in 2016 and this was undoubtedly a more glamorous version of the average ship arrest which can involve having to clamber up a ladder on the side of a vessel and dealing with a crew who may not have been paid.

The A stayed in the Bay of Gibraltar for six days and was then released following a series of court hearings which were widely reported in the international press. The interest from the world media was obvious from the numerous daily attempts by them to obtain information about the arrest and the proceedings. “Certainly the incident reaffirmed Gibraltar in the wider press as a key destination for ship arrests,” added Mr Stagnetto (pictured).

The Gibraltar law firm Hassans applied for the ship’s release. Hassans, which is Gibraltar’s largest law firm, has extensive experience of dealing with maritime claims including the arrest of superyachts. Anne Rose, a Senior Associate at Hassans, represented the A’s owner Valla Yachts Ltd. Lewis Baglietto QC, a Partner at Hassans, represented Hill Dickinson as the escrow [money held by a third party on behalf of transacting parties] agent under the yacht’s construction agreement. l

Regional Focus: Gibraltar

“As usual with these things time is of the essence and we had to move very quickly following her arrival at dawn for refuelling”Guy Stagnetto, TSN Lawyer

52 Ship Management International Issue 66 March/April 2017

If you ask John Bassadone, the Founder and Managing Director of Peninsula Petroleum, the secret of his company’s success, he will probably say ‘people’. A Gibraltarian by birth, Mr Bassadone started Peninsula in

1996 with two employees. He was working as a junior trader in London when “the opportunity came up to get a 75,000-tonnes-a-year bunkering contract from the Gibraltar refinery. I started small with a small office in Gibraltar and took on a friend of mine who had just left university,” he said.

Peninsula’s first customer was P&O Cruises which was “quite a big call”. It was then that Mr Bassadone created his business philosophy of always giving clients ‘added value’.

At the time, he deliberately kept his fuel prices competitive which meant Peninsula Petroleum “grew quite quickly and our clients started to divert more product to us”. He realised that instead of relying on third parties or intermediaries to provide extra oil volumes, his company needed to launch its own global network. He opened a new office and started setting up a network of offices in hub countries so that Peninsula could access markets directly.

The first office was in Athens. Two years later, in 2006, Peninsula opened an office in Singapore, the largest bunkering port in the world. More offices were opened in Shanghai, Dubai, Geneva, Montevideo in Uruguay, Tokyo, and Norway.

“By 2010 we had set up a strong platform with a good customer base,” said Mr Bassadone. His next aim was to set up new physical supply locations. “We looked at places where we were doing a lot of reselling that didn’t have any physical presence and then turning them into physical supply locations,” he said. The first ones were set up in Houston, Panama, New Orleans, Algeciras and ARA (Amsterdam, Rotterdam and Antwerp), the world’s second largest bunkering group.

“In the last four years we have become a fully integrated company. We have basically gone up the supply chain both globally and here in Gibraltar as well and have turned what is known in the industry as physical light into physical heavy,” he said. l

John BassadoneFounder and Managing Director of Peninsula Petroleum

Regional Focus: Gibraltar

http://www.sunborngibraltar.com

http://www.portsecuritytechnology.com/smi

56

Business Viewpoint: P&I & Law

ITIC insures ship managers on the understanding that management agreements are on terms no more onerous than BIMCO Shipman 2009. The Shipman contract states that ship

owners must indemnify their managers for all losses unless they have been caused solely by the negligence of the manager. It is common practice in the offshore sector, however, for the liability regime to be on a knock-for-knock basis, and offshore owners are trying to adopt this in ship management contracts.

Knock-for-knock liability provides that each party to the contract agrees to take responsibility for, and to indemnify and hold the other harmless in respect of, death and injury to its own personnel, and loss and damage to its own property. This is intended to be effective even if the incident is caused by the negligence of the indemnified party.

In shipmanagement, knock-for-knock liability can cause problems. This includes the definition of employees, property and the inclusion of gross negligence.

A simplified knock-for-knock clause that ITIC has recently reviewed stated the following: The manager shall be responsible for and shall indemnify and hold harmless the owner from all liabilities in respect of:a. personal injury, including death or disease to any person

employed by the manager b. loss of or damage to property of the manager

This is problematic if the manager is the actual employer of the crew. If so, then the manager has effectively waived its right to be indemnified by the owner in the event it is held liable for the death or bodily injury of a crew member.

In the offshore sector, insurances are set up to handle these circumstances. In the shipping sector, however, the manager and the owner rely upon crew P&I insurances for claims made against them by the crew. Managers could buy their own P&I insurance, but then two parties would be paying for the same cover, and management

fees would inevitably increase. If ship managers have to agree to knock-for-knock liability, they must make it clear that it does not apply to any crew member or worker onboard the vessel, whether employed by them or not.

Liability for the manager to indemnify owners for damage to their property is not so problematic. The vessel and any equipment are not normally owned by a third-party ship manager. In some circumstances, however, ITIC has seen included in the definition of property that which is within the manager’s ‘care, custody and control’. As the holder of a Document of Compliance, the ship manager could be deemed to be in control of the vessel, because the ship manager is defined as the operator of the vessel for the purposes of the International Safety Management (ISM) Code. Managers should therefore never agree to this definition of property.

A knock-for-knock liability regime provides that neither party shall be liable to the other even where the loss which has occurred is due to the negligence of one party. However, in some cases, we see the clause amended to state that this does not apply in instances of gross negligence. Therefore, if one of the parties is found to be grossly negligent, it will not be held harmless. This might be fine if the contract is pursuant to Norwegian or US law, where there is a concept of gross negligence. Unfortunately, however, there is no such concept of gross negligence under English law.

While the English courts are open to the concept that the term means that the parties understand that there is something more than just simple negligence, it is hard for them to establish when an act crosses from being just negligent to something more.

The inclusion of gross negligence within a knock-for-knock clause in a contract pursuant to English law can lead to uncertainty and increased litigation costs. Ship managers presented with a contract which includes knock-for-knock liability must read the clauses with care and be prepared to re-negotiate. l

Ship Management International Issue 66 March/April 2017

It’s a hard knock-for-knock life

Robert Hodge, Senior Account Executive, International Transport Intermediaries Club (ITIC), explains why knock-for-knock liability can cause problems for ship managers

http://www.swedishclub.com

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Business Viewpoint: Softship Data Processing

The container shipping market has experienced yet another year of significant change in the face

of low freight rates, increased regulatory pressures and higher operating costs on one hand, and a self-imposed ‘upscaling’ in the name of efficiency savings on the other hand.

Last year marked a quickening in the pace of change for the global container market, with headlines dominated by a series of mergers and acquisitions, further fleet consolidation and the collapse of carriers both large and small.

Hapag Lloyd and UASC teamed up, CMA-CGM took over NOL and the Chinese giants COSCO and China Shipping settled in together; the Japanese lines clubbed together and Hanjin sank.

In response to the changing shipping market, liner agents worldwide have been scrambling to ‘upscale’ to service mega containerships, and many have lost business from consolidation and pooling agreements between lines.

Much like ship agents, liner agents are responsible for coordinating the quay-side requirements of the vessel: ship supplies, spares and maintenance services, crew changes, husbandry, customs, and immigration formalities. However, liner agents also act as vessel owners’ trusted go-between for the manufacturers

and product owners and also take responsibility for booking space aboard the containership.

In today’s hyper-competitive market, doing so requires agents to offer more value than ever before. It means looking at every avenue for improving their own service offering; including embracing technological innovations that enable them to work faster, provide increased reliably and operate with greater agility.

In order to compete and ‘add value’ independent liner agents not only have to be the fastest to respond to enquiries, but also have to be accurate, informed and articulate in sharing their offer with potential customers.

It is important to keep in mind, however, that embracing technology in order to compete in this changing market is not about large-scale automation or replacing skilled individuals with ‘smart’ applications; it’s about utilising networked, remote-access technologies to improve the capabilities of knowledgeable, experienced, and trained personnel.

As a software solutions provider, it is our job to develop solutions that benefit both liner agents and their principals, which can be built to meet the exact needs of their business.Packaged software can be easily customised to suit

individual companies, while offering exactly the same functions provided by bespoke solutions utilised by the leading container lines, but available at a fraction of the price of a custom-made alternative. Such technology can provide more fluid, reliable and future-proof solutions that are fully integrated across departments, clients, partners and service providers. Importantly, it is simple to use and does not ‘design-out’ skilled personnel in favour of faceless data, which is particularly valuable in an industry that continues to trade on the ‘personal relationship’.

Looking ahead, all signs point to another difficult year for the container shipping sector and for those third-party suppliers and service providers that keep these vessels afloat. Analysts have suggested that the murmurs of realignment and ringfencing activities by the likes of Maersk (and their “strategic review”) signalling a continued risk on the horizon for the container market, for which all involved parties must be prepared.

For operators in the sector, the feverish need for ever-more efficient operations and cost saving initiatives will inevitably continue, and their service providers are going to have to adapt if they are to survive. l

Ship Management International Issue 66 March/April 2017

must adaptin order to compete

Liner companies

By Lars Fischer, Managing Director, Softship Data Processing,

Singapore

Business Viewpoint: P&I & Law

CREW ARBITRATION CLAUSES – what is happening? Good or bad?

The cost of crew personal injury claims can be significant, in particular when brought in jurisdictions, such as the US. In order to keep foreign seaman’s claims out of

these jurisdictions, crew employment contracts were introduced requiring disputes to be resolved by arbitration in specified jurisdictions. This has included London and, in some instances, in accordance with London Maritime Arbitrators Association (LMAA) rules.

Initially, whilst the US Courts upheld arbitration clauses, the employer was required to apply US substantive law in the foreign arbitration. This did not therefore assist in later cases; this has not been required. Personal injury/fatal claims are specialist areas and not the most common type of cases our experienced English arbitrators have to deal with on a daily basis.

How has this progressed to date? We have seen many cases commenced but not many have

so far, to our knowledge, proceeded to a hearing in London. Arbitrations are not subject to the Qualified One Way Cost Shifting rules introduced by Civil Procedure Rules in 2013 and so a successful defendant can recover costs. This is definitely a plus.

One reason why many claims have not progressed is that the cost of arbitration is higher because claimants have to pay arbitrators fees as well as medical and other expert reports and eventually the hire of rooms. Arbitrators’ fees are difficult for claimants’ to cover under the new age Conditional Fee Agreements. Some claimants use their disability compensation to advance their claims - others have to rely on US lawyers being involved and US contingency fees.

We have seen claimants arguing that they should not be forced to arbitrate in foreign forums, notwithstanding the provisions in the crew contract, as they are unable to afford the arbitration costs. In some cases this has led to the courts ruling that the claimant must pay their share of the arbitration costs which has resulted in long stays. In the US case of Suazo v NCL (Bahamas Ltd) 2016, the claimant argued that he was unable to pay the high costs of arbitration in a foreign forum, and so the arbitration agreement was unenforceable because it prevented him from asserting his statutory rights. The Circuit Court found

that the claimant had not provided sufficient evidence of the amount of arbitration costs he would incur and therefore had not provided sufficient factual evidence of his inability to pay. This therefore shows that the US federal courts are receptive to enforcing arbitration clauses which provide for a foreign forum.

Employers are agreeing to be responsible for the arbitration costs in the crew contract to ensure the arbitration occurs in the forum specified in the contract and such clauses are being drafted in crew contracts on the basis the claimant will repay these costs from damages. Given a successful claimant is likely to recover its costs in an arbitration when will the defendant be reimbursed? Given that English law has non-delegable duties of care for employer’s liability and applies vicarious liability making the employer liable for the negligence of its employees’ liability is difficult to defend. The discount rate which applies from March 2017 for future damages has gone from 2.5% to 75% increasing awards significantly.

Is arbitration in the U.K. really a solution? l

By Sarah Barnes, Associate in Hill Dickinson’s Marine, Trade and Energy team

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Business Viewpoint: Transas Global Conference

Shipping companies must be prepared to embrace the ‘perfect storm’ that will hit the industry over the next couple of years – Transas CEOFrank Coles told a packed room of

over 400 delegates at its Transas Global Conference in Malta. The two-day conference in March brought together high-

level professionals from the maritime industry and beyond with an agenda that was designed to inspire change.

Mr Coles said: “We are faced with the perfect storm in the next few years. Many will conclude it is the fault of President Trump, but in fact it is actually nothing to do with him. If anything, he is going to enable the industry to think smarter

because he is also bringing change. The perfect storm is the one confronting the maritime

industry. It is one which will disrupt all elements of the shipping industry, is technology-driven and in some cases is also self-inflicted”

Mr Coles added communication suppliers could be at risk as automated ships are introduced.

He said: “As long as there are crew onboard, there will be a need for more communications for welfare purposes. But I think maritime communications suppliers could be particularly at risk in the same way as Kodak/Blackberry once were. The levels of capacity coming online, along with the race to the bottom in pricing, is going to make communications yields very hard to achieve. However this pans out, the maritime industry is going to be the winner.”

Ship Management International Issue 66 March/April 2017

Shipping Industry Must embrace the ‘perfect storm’

Business Viewpoint: Transas Global Conference

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The conference, which was moderated by Craig Eason, Editorial Director of Fathom Maritime Intelligence, included lively debates and discussions from leading members of both the maritime and aviation industries.

Captain Harry Nelson, Operational Advisor to Safety at Airbus, spoke on what lessons the maritime industry could learn from aviation, placing an emphasis on giving the right amount of time to training and allowing crews to digest what they have learned.

Capt Nelson told the packed audience: “We have spent a lot of our training time checking people and I would counsel you not to go too far in that direction. I’m not saying don’t check at all, but make sure the teaching is happening first. We have fallen into the trap of spending too much time on training and then checking. There is no time given for downtime or discussion.”

David Rowan, Editor-At-Large of technology publication WIRED, offered the audience a humorous overview of a number of successful wacky start-up businesses, and warned the shipping industry to not dismiss any idea regardless of how unbelievable it is.

Mr Rowan cited the example of a former Google Product Manager who left Google for his own start-up company. After eight months the company had not made any revenue nor did it have any customers, but it was bought out for a huge sum of money.

He explained: “After eight months the company was bought for $680million by a company called Uber. W hy would Uber buy an eight-month-old, no-revenue, no-customer business? Because the company was developing autonomous trucks, which is a pretty big potential

market, and obviously there’s a race to control these big autonomous networks.”

He added: “Autonomous travel is coming more quickly than we think, partly because the insurance services are pushing for it. The World Health Organization thinks 1.2million people die on our roads from human error. Health services are going to mandate autonomous regulation sooner than we think.”

On the subject of transport, Mr Rowan also spoke about a far-fetched idea that would see a new transportation method transporting people and cargo in vacuum tubes over long distances.

He explained: “It was a bit science fiction until they start making partnerships and talking about how they’re going to not just use land, but sea as well. These people could potentially be your new competitors. They’ve done deals with people like DP World, in fact DP World is very excited. So there’s people with big bank accounts that are buying into these crazy science fiction ideas and turning them into more competition for you.”

Remembering how critics slammed the likes of Skype, Netflix and the iPhone saying they would never catch on, he concluded by saying: “I would warn you not to dismiss these changes.” l

Issue 66 March/April 2017 Ship Management International

“However this pans out, the maritime industry is going to be the winner”Frank Coles, CEO, Transas

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A US physician with over 30 years’ experience including treating seafarer emergencies has decided to put his expertise to good use and has launched a new healthcare

initiative to help maritime companies successfully manage the health and Fitness-for-Duty of their crew.

However, rather than taking a reactive approach, Dr Ray Jarris, says Discovery Healthcare LLC – which he has set up with his physician wife Dr Ann Jarris – is focused on changing the way healthcare is delivered to the maritime sector.

“For the duration of my involvement in the industry, it’s been a very reactive approach. Ships call when there’s a medical problem and this is just not adequate any longer,” he said.

“We’re not just waiting for the call. We are working with our clients to prepare, to train and to have the best resources available and immediate access to a physician for advice,” he said.

Discovery Health – named in recognition of explorer Captain George Vancouver and the HMS Discovery – is backed by a team of experienced maritime nurses and physicians, and services include 24/7 physician consultations, co-ordination of ship diversions and medical evacuations, pharmaceutical supply and what, it says, are unique Fitness-for-Duty and Respirator Clearance Platforms.

However, health education and illness and injury prevention are equally high priorities. One of the things Discovery Health is doing is actively monitoring ships’ medical logs. Dr Jarris explained: “Once a week we are asking medical officers to send us their logs. We will review them and look for individuals who are attracting our attention and also look for educational opportunities.”

For instance, the use of antibiotics is something Discovery Health is trying to address by helping the medical officer discern between a viral and potentially bacterial illness. Part of the concern is where there are a number of people on a vessel that have the ‘flu’.

“There can often be one or two people that slip through that actually have pneumonia and become gravely ill and have bad outcomes. We try to anticipate and avoid that.”

Dr Jarris said the ‘lightbulb’ moment went off a couple of years ago and he and wife Ann have spent the last two years preparing to launch the company.

“It went off when a very important person in the fishing industry asked me if I could help decrease the frequency of air medical evacuations. I thought that answering that question directly was not the right answer if a medevac represents the breakdown of multiple opportunities that were missed.”

Dr Jarris said illnesses constituted over half the medical cases in his 20 years of treating those at sea and was where the real risk lied.

“Trauma is relatively straight forward but illness and chronic disease are very important factors,” he said.

In terms of acute illness, upper respiratory infections are most prevalent, including potentially fatal pneumonia, and skin infections are also high on the list. For chronic disease, the main one without question is diabetes – either recognised diabetes that is poorly controlled or unrecognised diabetes that manifests for the first time.

“Diabetes kills at sea. This can be minimised and it can be avoided, so we are really dedicated to providing what we are calling ‘hire to retire oversight’ so we preserve the health of professional mariners who are in short supply and also because it’s the right thing to do,” said Dr Jarris.

Being based in Seattle, Discovery Health is working with clients in the North West US , Pacific coast, Alaska and Hawaii but says it has partnered with an international assistance company to integrate its work with a global response capability.

“One of the things that distinguishes us from others, including coast guards around the world that do a fabulous job, is that we follow events from the moment of conception. We are calling it Time Zero Occupational Healthcare.

“We follow it all the way through to interface with land, the coordination with the medevac to ship diversion to first contact on land, because there is risk at every point and it has to be managed really aggressively and tightly.”

Dr Jarris knows only too well the types of problems that occur on vessels, having served for the last few years as a medical officer on expeditions to the Arctic and Antarctic. He has also served as a medical expert on multiple maritime medical complaints.

“I’ve been able to dissect, through this exposure, where it has broken down. It’s the lack of integration, of awareness, of the work environment and any of the medical providers who are caring for the mariner. That is what we want to change.” l

Crew Welfare

Ship Management International Issue 66 March/April 2017

Doctor launches new maritime health company after ‘lightbulb’ moment

Crew Welfare: Medical Care

63Issue 66 March/April 2017 Ship Management International

Sophia Bullard, Crew Health Programme Director at UK P&I Club, has warned of the importance of dental hygiene among seafarers and the serious consequences that can

arise if mouths are not looked after.“Dental problems can be a major cause for concern amongst

seafarers. We often see claims arising from dental problems that require urgent medical treatment and even repatriation of crew,” she said.

“On an individual basis these claims may not be in the higher claim cost bracket, however, they often result in repatriation of crew, which has a further impact on the safe manning of the ship and other delays to ship operation.”

With seafarers frequently at sea for long periods of time, they are often unable to attend regular dental check-ups ashore and this may lead to dental problems developing unchecked, said Ms Bullard.

She added: “Long working hours and minimal physical exercise can result in the excessive consumption of highly caffeinated and very sugary drinks, unhealthy snacking and high levels of nicotine inhalation. In these circumstances, if oral health is neglected, gum disease, tooth decay and toothache can readily occur.

“Toothache, whether mild or severe, may be further aggravated without surgical intervention. Onboard most ships there will only be pain relief treatment available, which will give short-term relief but will not fix the underlying problem. This can have a detrimental effect on the seafarers’ performance, concentration and wellbeing, not to mention a significant impact on sleep, eating and other daily activities.”

Ms Bullard said symptoms of periodontal disease are seldom noticed until the disease is at an advanced stage. They include persistent bad breath, swollen gums, bleeding or tender gums, painful chewing and loose or sensitive teeth.

“Good dental hygiene is extremely important to ensure your teeth are not at risk. Effective cleaning removes dental plaque and tartar from the teeth, preventing cavities, gingivitis, gum disease, tooth decay and periodontal disease.

“Encouraging and reminding seafarers to take the correct steps to avoid dental problems will not only ensure their own wellbeing, but will also reduce costs for members, and will improve the safety of the ship by helping to maintain a full complement of crew.” l

UK P&I Club advises on the importance of dental hygiene in seafarers

Seafarers are being surveyed to see what they really think about the accessibility and quality of medical assistance onboard their vessels.

Global maritime technology company Martek Marine has teamed up with maritime professionals’ trade union Nautilus International to launch the survey which, it is hoped, will fill a void of knowledge in the area of maritime healthcare.

Nearly 1.5 million seafarers are at sea at any given time and each year around 7% of them will be evacuated from the vessel they are working on due to ill health, often at great financial cost. A quarter of these evacuations are proved unnecessary, questioning the efficiency of the measures in place to deal with medical emergencies.

The Maritime Labour Convention (MLC) states that all ships carrying over 100 crew members and passengers for voyages of three days or more must have a medical doctor onboard, however as the majority of merchant vessels are crewed by fewer than 25 people, they rely on assistance from professionals on land.

Martek Marine recently launched its own telemedicine offering, iVital, to bridge the gap between medical provisions on land and at sea. It combines state-of-the-art medical monitoring equipment with 24/7 access to a team of experienced medical professionals on shore.

Paul Luen, Chief Executive, Martek Marine, said: “Crew safety is of paramount importance to us and forms a large part of our work. We’re always trying to find new solutions to problems and if this survey reveals some limitations to medical provisions onboard vessels, we will strive to offer a resolution benefiting both employers and their staff. Crew welfare is a serious issue, so much so that the information generated from the survey could quite literally be lifesaving.”

Nautilus General Secretary Mark Dickinson said: “Getting a true representation of the medical assistance available to seafarers can help us answer the question of whether provisions are acceptable and where there is room for improvement.

“If, off the back of the survey, measures can be taken to improve medical support at sea, then it will be a win-win situation for both seafarers and their employers all around the world.” l

Seafarers’ survey over medical care at sea

CYPRUSSPECIAL REPORT

Ship Management International Issue 66 March/April 201766

Cyprus is undergoing an interesting period in its economic history with several

potential game changers poised to kick in if the right actions are taken. At the heart of it all is resolution of the Turkish crisis which involves a ban on Cypriot flagged ships visiting Turkish ports as well as the island’s emergence from its banking problems of 2013 and 2015 and the discovery of natural gas off its shores.

Yes, the Turkish situation remains unresolved and the true benefits of the estimated 30 trillion cubic feet of natural gas, valued at over $50bn, has yet to be realised, but there are some Cyprus watchers who believe that one could almost certainly influence the other. An accord has never been closer, as the European Union eyes Cyprus as a future energy hub that would give Turkey and Europe access to gas deposits discovered in the eastern Mediterranean.

And that leaves the financial crisis. But as Dieter Rohdenburg, CEO of shipping giant Intership Navigation, claims, development of the Cypriot economy since the banking

crisis in 2013 is absolutely remarkable.

“Last year saw nearly 3% growth (GDP) and similar levels are predicted for 2017. Business sentiment is high, and so is the determination of the local shipping community to strive and to grow the cluster.”

This was a point echoed by Thomas Kazakos, that ebullient and charismatic champion of Cyprus shipping. In his capacity as Director General of the Cyprus Shipping Chamber, Thomas is accepting of the important role shipping continues to play in the Cypriot economy, especially when you consider the dire freight rate situation shipping has had to bear over the last eight to nine years and when compared to how other international maritime clusters have fared.

Marios Demetriades, Cyprus Minister for Transport, Communications and Works, went even further. Talking to SMI he said: “The maritime industry is essential to Cyprus, and with plans for further significant growth, maritime is an integral part of our economic future. To this end, the government has prepared a draft bill to create a shipping portfolio assigned to a deputy minister, who will be responsible to handle all issues related to shipping.

“Shipping currently contributes around 7% to Cyprus’ GDP, however, with the new strategy we have put in

place and

the proactive steps we are taking to grow the maritime industry in Cyprus, we are expecting this to grow to 9% over the next three years,” he added.

While Cyprus as a cluster and as a flag may have grown extensively over the past 30 years, it is the interest the Government has seen from several sectors such as containers, tankers and gas carriers, where ship owners are looking for a well-established and quality flag with a strong and reliable professional services infrastructure that provides a round-the-clock service, as well as a package of favourable incentives.

Despina Panayiotou Theodosiou, Chief Executive Officer of Tototheo Maritime, added to the debate: “Cyprus offers the environment for companies to grow. It is strategically located, the infrastructure is advanced, as a member of the EU it also offers stability and safety. Furthermore, there is human talent, well-educated and skilled professionals, there is a transparent and uncomplicated legal framework as well as an attractive tax regime. All these advantages, combined with the resident shipping community, have allowed the maritime cluster to grow and shipping related services to be on an advanced level.

“Our group of companies was established and has its headquarters in

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Cyprus and through the years we have developed and grown into one major maritime communication provider globally and are expanding our physical presence in other countries. Cyprus provided the perfect setting for us to grow our business and allowed us to create the resources and capacity to enter such a competitive industry.”

Mr Demetriades again: “Cyprus’ tonnage tax system” (TTS) is of significant interest for quality ships and shipping companies. Approved by the European Commission in March 2010, the simplified tonnage tax system extends the favourable benefits applicable to owners of Cyprus-flagged vessels and ship managers to owners of foreign flagged vessels and charterers. It also extends the tax benefits that previously covered only profits from the operation of vessels in shipping activities, to cover profits on the sale of vessels, interest earned on funds used other than for investment purposes, and dividends paid directly or indirectly from shipping related profits.

“Cyprus has negotiated more than 50 double tax avoidance treaties and is the only open registry in Europe to have a TTS approved by the EC, providing assurance of a stable fiscal environment for the long term. Additionally, Cyprus understands that the evolution of existing regulations and the prospect of new regulations on the horizon have a significant impact on owners and operators. Our experts play a significant role in, not only, helping owners and operators ensure compliance, but we are also actively taking part in the discussion as legislation is being

developed, allowing us to help shape the regulations,” he said.

Now more than ever before, the role of flag states as a conduit between regulators and the industry is critical. “By working in close cooperation with clients and organisations such as the Cyprus Shipping Chamber and Cyprus Union of Shipowners, the Cyprus flag conveys the thoughts and opinions of those affected, directly influencing how legislation is created and implemented. This is a great benefit to those vessels flagged with Cyprus,” said the Minister.

“We know that a personal approach and continuous flow of communication is extremely important to owners and operators. This is why the Cyprus flag has maritime offices in Piraeus, London, Hamburg, Rotterdam, and New York City, comprising a highly skilled and multilingual workforce. We pride ourselves on our accessibility and personal, consultative approach. But let’s be clear – this is far from the norm; many flags have only a skeleton staff to answer emails and issue certificates,” he said.

An estimated 4% of the world’s fleet and around 20% of global third-party ship management activities are controlled from Cyprus, and with the eleventh largest merchant fleet worldwide and the third largest in Europe, Cyprus is continually looking to drive significant growth whilst maintaining a strong focus on delivering value to shipowners and operators.

Cyprus currently flags over 1,000 oceangoing vessels with a total gross

tonnage exceeding 22 million. It is the largest third-party ship management

centre in Europe and one of the

largest crew management centres in the world. A large number of shipowning, ship management and shipping related companies maintain fully-fledged offices and conduct their international operations and activities from Cyprus.

Despite these positive sentiments, Ioannis Efstratiou, Acting Director at the Department of Merchant Shipping, remains realistic about the flag situation: “It seems that since last year, we have seen a slight increase in numbers but, of course, we should also take into consideration the situation as a percentage in respect of the world fleet. For the last 20 years we have seen a decrease of about 20% - not in absolute numbers but as a percentage of the world fleet; this means that the world fleet has doubled and we have stayed stable at about 22 million gross tonnes.” The main problem has been the Turkish embargo, but as Mr Efstratiou admitted, measures were being taken to try and remedy the situation.

“Since 2013, we have been taking a more proactive approach in promoting the Cyprus flag and have increased tonnage numbers by around 1.2% or 300,000gt in the year to 2016. The Cyprus flag is currently eleventh in the world but our short-term target is to return to the top 10. “We are now targeting new markets, for example in Asia, because we want to find companies and ships whose trading programmes are outside the Mediterranean because if anybody is trading within the Mediterranean, of course in the back of their mind is always the possibility of visiting Turkish ports,” he said.

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Cyprus Special Report

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Cyprus Special Report: Round Table Debate

Sean MoloneyOne year on from the last round table debate, the freight markets are still struggling. But there are seeds of recovery coming through. How have the last years of poor revenue for ship owners impacted on the way you manage their ships?

Giles HeimannContinued challenges in the shipping industry have affected the way ship owners utilise the services offered by ship managers,

and they are understandably looking for higher efficiency and safety, but also at the lowest possible OpEx. I am slightly concerned by the use of the words ‘seeds of recovery’ – we have heard those words many times in the past couple of years – but there has been little sign of this recovery really occurring. With regards to financial matters though, interestingly enough, BSM has recently been participating in a Boston Consulting Group study where BCG compares our results with the results of other ship managers and ship owners. Judging by the results of the last survey they ran, our

Ship Management International Issue 66 March/April 2017

CYPRUSSHIPMANAGEMENTROUND TABLEDEBATE

In the latest in our series of round table debates, SMI drew together leaders of the Cyprus shipping cluster to discuss key issues facing shipping. Chaired by SMI Editorial Director Sean Moloney, panellists included Giles Heimann, Corporate Director Fleet Personnel, Bernhard Schulte Shipmanagement; Capt Eberhard Koch, Chairman, CEO and Partner of Oesterreichischer Lloyd Shipping; Mark O’Neil, Future CEO of the intended Columbia Marlow merger; Andrew Brown, Group Technical Director, Interorient Shipmanagement; Andreas Chrysostomou, Independent Maritime Expert; Capt Eugen Adami, Immediate Past President of the Cyprus Shipping Chamber and owner and Managing Director of the Mastermind Group; Ilias Tsakiris, CEO American Hellenic Hull Insurance Company; and Alexandros Josephides, Deputy Director General of the Cyprus Shipping Chamber. Other members of the cluster who were unable to attend in person, have contributed written answers to the questions posed.

Cyprus Special Report: Round Table Debate

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“The only way to manage ships when trading conditions and charter rates are so weak is to keep an extremely stringent control over operating costs to help owners remain afloat. In short, you need to stretch your budget without sacrificing vessel maintenance, quality of overall operations and your loyal, most experienced and well-paid crew and shore personnel. Some people say that shipping has faced much worse in the past, and eventually prevailed. However, the intensity of the current challenges and setbacks was never known or experienced before. The time has never been so unfavourable if not hostile to ship owners and small owners in particular. I think we have now to admit that apart from the low freight markets, shipping is in a serious crisis.

Costs have all risen consistently since 2008. So, if there are seeds for recovery coming through then they must hurry up…

“The Cyprus shipmanagement cluster has the potential to develop further but there should be a strong will between the Government and all political parties on the island to invent some essential preconditions and find an ultimate resolution of the Cyprus-Turkey issue. Up to now words speak a lot louder than actions and regrettably the recent round of negotiations and talks came to a diplomatic standstill again, so the uncertainty still remains.

Capt Andrei HudźasviliManaging Director, Cymare Shipmanagement

operating costs are 10%-11% lower than the average of other ship managers and, more importantly, owners participating in the same survey. You can put that down, to a certain extent , to economies of scale; with a fleet of over 600 ships we have increased purchasing power and we also have the ability, with a much larger crew pool of 18,000 seafarers, to control our costs in perhaps a better way than many owners are able to do so.

Investment in IT and Big Data are is very important, but they are not necessarily items that the ultimate client, the ship owner, is going to write a blank cheque for. These are things that we, as a ship management company, know we need to invest money in, because the ultimate outcome will be that our operating efficiency is improved, and we will be able to offer a better deal for our clients. We are already investing significantly in our own internal systems, ship management software and customer web access, as well as mobile applications to track and monitor all aspects of ship management, whether it is crewing, or pure operations. It is an important area we will continue to invest in, to grow and support our customers.

Capt Eberhard KochWe are not involved in third-party management, we manage our ships in-house. But we strongly believe that lower revenues should not be any reason for lowering the maintenance and standard of our ships. We are known for delivering a very high level of maintenance and safety on our ships but my shareholders have not asked me to reduce any of my presented budgets because they know that the charterers expect even higher service in times of low revenues. Yes, we also see seeds of recovery in some segments but I am worried about bulk carriers. When it comes to containerships, due to the high level of scrapping, we are starting to see a recovery.

Sean MoloneyBut how long can owners exist when you sometimes have revenues up to 30% below OpEx? Are owners altering their operating strategies to take this into account?

Capt Eberhard KochWe have kept OpEX at a stable level over the last couple of years, while at the same time, by undertaking pre-maintenance, we are avoiding times off-hire.

Mark O’NeilI think the question here is how have the last few years of low revenue impacted on the way we manage owners’ ships. I know that everyone around the table here will say that proper safe management is proper safe management and that cannot change as a paradigm irrespective of the revenue received. The challenge for us as ship managers is, therefore, to optimise the service we provide in the circumstances, and this involves greater efficiency, greater efficacy, reducing fees and minimising costs, doing what we do better and working in partnership with ship owners and understanding their particular cash

flow difficulties. A lot of people talk about “partnership”. Partnership is a word that is used too readily in the industry, but there are very few of us who really understand the concept and demonstrate it in their day-to-day business. As an industry sector, in order to survive and prosper, we need to make ourselves and our products compelling to ship owners; to manage vessels as well, if not better, than ship owners can; and to achieve economies of scale, which are essential. The argument behind consolidation and growth of the larger shipmanagement companies, is compelling and we are on that path.

Sean MoloneySo big is beautiful as far as shipmanagement is concerned?

Mark O’NeilThat is oversimplifying it. I think big is perhaps necessary but with the associated and necessary attention to detail and attention to the owners’ needs. Big is only beautiful if you manage to achieve that partnership element, where you can treat each client on an individual basis and according to their individual needs. Big is beautiful from the point of view of economies of scale for sure, and that has to be a compelling argument, but we have to also remember that each client is different with his own particular needs and demands.

Andrew BrownAs ship managers, we have access to a large crew resource which ship owners don’t have. We can train the crew which is important and keep the ships maintained well. I don’t see seeds of growth in many sectors and I agree the contracts we have with suppliers and with shipyards will work to improve OpEx in the end.

Ilias TsakirisI don’t see any optimism in the markets. Since the crisis started in 2008, we have 50% more vessels sailing around so there is overcapacity. On the other hand, we see a lot of third-party shipmanagement companies appearing. As far as insurance is concerned, and I will concur that professional ship managers are

doing an excellent job because we are seeing a decline in insurance claims, but 80% of claims are crew-related so there are certain things that the manager can’t control and these tend to be related to the people. The manager can train the crew but he can’t actually control what they do when they are on their watch. Big is beautiful as far as insurance is concerned, because the bigger the fleet then the bigger the discounts that can be secured. But our main concern as underwriters is that third-party shipmanagement has to be extremely professional. As a result of bankruptcies, we see third-party ship managers being given vessels to manage by the banks and sometimes when banks are the owners, the insurance risk could be higher.

Sean MoloneyCan I get feedback from the managers here about the need for more professionalism among third party managers and maybe bring in the element of crew competency as well?

Giles HeimannI think there is a general level of professionalism among the major third-party ship managers, we all benchmark against each other. Because of the continual financial downturn, the interesting thing is that we are seeing a lot more ships coming under the control of banks, and the banks are looking to us to be professional and operate those vessels safely, but at the very best cost basis. So, all third-party ship managers are trying to achieve that high level of service. Some succeed, this goes back to the economies of scale argument, again where I would agree that bigger is better from that point of view. I don’t think some of the smaller shipmanagement companies can offer that same economy of scale. From the crew competency point of view, the ability for a larger group to attract a wider demographic of nationalities, is an advantage. It allows us to look at the skills and competencies of seafarers from many different countries, rather than restrict ourselves to the traditional groups, such as The Philippines

70 Ship Management International Issue 66 March/April 2017

“As an industry sector, in order to survive and prosper, we need to make ourselves and our products compelling to ship owners; to manage vessels as well, if not better, than ship owners can; and to achieve economies of scale, which are essential”Mark O’Neil, Future CEO of the intended Columbia Marlow merger

Andrew BrownGroup Technical

Director, Interorient Shipmanagement

Cyprus Special Report: Round Table Debate

and India. Crew competency is something that has been on the agenda for many years now, but it has never been a future lack of supply of officers but a future lack of quality and competence. Again, the larger organisations have their own training facilities, and are able to invest money in developing seafarers’ competencies, which again I would suggest the smaller companies are sometimes unable to do.

Mark O’NeilI would go along with what has been said. Every manager, large or small, tries to do his or her best for their clients. When you look at crew competency, you have a number of different issues to consider and one of them is recruitment. Of course, you have to be out there in those jurisdictions that have a crew resource. Then there is training, and the bigger the manager the greater the ability to invest in training and facilities. Then there is retention. You need to be able to bring quality personnel through your operation and retain them in order to increase the experience level. There is therefore a need to invest heavily in all these areas, and this is what most managers try to do. If being bigger better lends itself to the ability to invest, then it must be more beautiful.

Andreas ChrysostomouIn response to the question about whether owners would behave differently when it comes to the management of their ships, because of the drop in freight rate income, the answer cannot be yes because of the whole regime around it – the relation to safety and security.

Further the low freight rates provide third-party ship managers the advantage of making use of the economies of scale. Or as I would call it, to do more with less. Ship managers, whether in-house or third-party, can influence profitability because if they retain the same prices as before when it comes to their management fee or their management services, it means that the gap between the profit of the owner and the manager is becoming smaller. And we know that managers cannot exist in the system, if they are running a ship more expensively than the ship owner is. So the management service is relevant because is actually cheaper. I would say that managers do have bargaining power when it comes to profitability in an environment of lower freight rates, by using their powers of economies of scale. Banks could be a very good example where this gap between the management fee and profitability is much smaller. Even the in-house manager can do more with less; synergies can exist between two or three companies with small fleets especially if they are not competitors.

Capt Eugen AdamiOf course the Cyprus Shipping Chamber (CSC) has recognised that when it comes to ship management, we are not in the shipping business but we are in the people business. And this means that our maritime infrastructure can only be sustainable in the future when we emphasise the importance of the workforce, shore-based as well as onboard our ships. The CSC has worked

Cyprus Special Report: Round Table Debate

hard over the years to work with universities as well as with the Government and the Institute of Chartered Shipbrokers to help educate over 1,000 graduates to date on the Understanding of Shipping course. We have also pushed another 700 graduates through other universities. That is almost 40% of the existing workforce here in Cyprus and we could be working hard to increase this number. This means we will have highly educated European people, concentrated in the eastern Mediterranean, to strengthen the Cyprus shipping cluster when the markets take off. A domestic local workforce will be here and available. With regards to how my company has fared through these dreadful years, I can only say that we are trying to do what everybody else is doing, and that is to offer more for less cost. Economy of scale is very important, however, how are you going to translate your better buying power into a better operation onboard ship, for example lower maintenance costs and higher revenues. This only works when you include the seafarers in your company’s policies. Seafarers have to take the cost-cutting decisions as their own. I operate in the break bulk, general cargo business and I depend on seafarers taking commercial decisions; seafarers who clean cargo holds, who motivate the cook etc. and this only happens when you embrace and motivate them. I believe that owners today can only operate in niche markets; when owners operate in the main upstream markets like containers and tankers, these owners must team up with professional third-party ship managers to find ways to get employment of their ships and

to benefit from economies of scale. Smaller owners are heavily penalised by the banks, and have the regulatory workload concerns as well, so it all becomes rather cumbersome for the smaller guys to pull through. When you look to the future, and in embracing new technology, we have to open up our systems to our clients and our charterers and to our future investors. We need to have a new infrastructure on the IT side which allows people to plug-in conveniently. We must accept that we must become fully transparent and consider clustering, ie to team up with other companies such as on the supply side to invest in purchasing alliances, and run these purchasing alliances with intelligent supply chain management; drill down to the individual machinery to the smallest component, find where these components are produced and share this information among members of the purchasing alliance.

Mark O’NeilI agree with everything that has been said, but I think there is too much focus on more for less, when we should be focusing on more and better for (potentially) less. We have to do things better than we have done before and look at trying to make ourselves compelling and relevant to the market; there is no doubt that an owner who has the infrastructure available to him, will do just as well with his vessels as we would do as third party managers. We must therefore be compelling and relevant and a way to do that is to look at the services we provide, whether it is individually in the

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http://www.limassolmarina.com

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larger companies or in the form of an association in the case of the smaller companies. We have to look to provide other services around the basic management function. So, we are not just providing management, we have to view ourselves as maritime services providers generally. We will not survive as an industry if all that we are providing is third-party shipmanagement. Within the intended Columbia Marlow extended platform, we will provide a whole raft of services modules that involve taking responsibility for all those expensive functions that the owner does not need (or want) to bother with any more – whether it is flag administration, or insurance/ claims, recycling, or IT – in addition to the standard crewing and the technical management of the vessel. We cannot be just a third party manager any more, we must be a maritime services provider. We do not want to be stuck in the rut of previous definition of ship management. Progress is progress and we need to move forward with this.

Capt AdamiI totally agree with Mark and what I meant was more services for less cost and that is clustering and buying power.

Giles HeimannJust picking up on the expression ‘the maritime service provider’, this is a key point. It is not just about providing a ship management or a crew management service, it is about providing all the surrounding services that go with it, such as travel, insurance, ship repair and chartering, and more. Yes, ship owners are looking to ship managers to run an efficient service. If you look at the larger ship owners, such as Maersk, who have traditionally not used third party ship managers – they have put ships under our management for benchmarking purposes and to gain the benefits of knowledge, information and best practice exchange. Ship owners and ship managers all have the same challenges and it is through sharing knowledge and information that, not only third party managers, but the owners themselves, find there are more efficient and safer ways of operating vessels.

Capt Eberhard KochIt is also worth noting that the first Cyprus Maritime Academy opened its doors in August last year and we are getting a lot of support from the Cyprus industry. Hopefully in four years’ time we will have our first Cypriot and Greek officers, educated in Cyprus. There is also cadet career funding in place so the cadet knows that after the second semester where he’ll be working after four years’ time and get financial support at the same time.

Sean MoloneyYou don’t use third party ship managers but the manager of the future will be a one stop shop provider of quality services who will be going one step further to help and work with you in partnership. Could ship owners be buying into this and are you getting excited about this?

Ship Management International Issue 66 March/April 2017

“When you look to the future, and in embracing new technology, we have to open up our systems to our clients and our charterers and to our future investors. We need to have a new infrastructure on the IT side which allows people to plug-in conveniently”Capt Eugen Adami, Immediate Past President, Cyprus Shipping Chamber and Owner and Managing Director, Mastermind Group

CaptEugen Adami

Owner and Managing Director, Mastermind

Group

Alexandros Josephides

Deputy Director General, Cyprus

Shipping Chamber

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Capt Eberhard KochWe will always, as a company, undertake our own in-house shipmanagement; we are not looking for third party ship management. Pricewise, if you have a small fleet and you have time enough to tender your orders and get the same price as the larger managers, then you will benefit. Some owners are afraid of the numbers of ships that some of the larger managers are managing and have installed in-house fleet managers for control; yes, you must have a very close relationship with your future owners but if you have 500, 600 or 700 ships you might find it difficult in the future to keep the same relationship with the owner as in the past. And this is not what owners want. They want a close relationship.

Andrew BrownYou have got to have a close day-to-day relationship with the ship owners because more and more of them are installing their own managers, and they are watching the managers, which is unusual and costly for them but this is what is happening. Ship owners want to see what we are doing on a daily basis and what steps we’re taking to overcome whatever problems may occur. They also want to analyse accounts on a daily basis to see what we are spending the money on.

Giles HeimannIT is an area where we are seeing this type of attitude, if you like, through tools such as customer web access. We are always under the microscope and we are always being studied – are we doing things the right way; are we doing things the way owners expect us to do them?

Mark O’NeilI think we are all in the business of relationships aren’t we? Whether it is with our clients, our staff or our suppliers, and by our staff I also mean our crew. The larger you become as a manager, the challenge you have is to ensure that the relationships you have still remain strong, and that these are tailored relationships. You cannot provide a standard Columbia Marlow, BSM or VShips’ approach for everyone, you have to ensure that every client gets precisely what he wants out of his relationship. The relationship needs to be tailored and personal and this is what we work so hard to ensure. IT helps, which is why

Columbia and Marlow have invested in their own IT company Blue Dynamics, in which we have 50 software programmers developing relevant programmes around our services and improving efficiencies and efficacy for us and our clients. The IT revolution is part of our lives and we all have to embrace IT developments into our systems, which is what we are doing.

Giles HeimannI wouldn’t agree that it is either easier or harder for larger ship managers to maintain good client relations than small managers, as a great deal depends on the organisation. At BSM, for example, we have individual shipmanagement centres in key parts of the world, where that client relationship is managed locally from that office. So, it is both possible and important, even though we are a large organisation, to have very good direct client relationships.

Andreas ChrysostomouHow can we, as an industry, ensure that it is not one size fits all in our solutions? We have to personalise the solutions we have on offer to meet the needs of the customer. When we have a very precise product, we can ensure, in a way, that one size fits all. But when we diversify the product to include many different things, and then go onto the issue of offering a complete package to customers, or a full maritime services product, then we should customise it and we should be very careful to maintain the correct customer/client relationship.

Capt AdamiDon’t forget there is a difference between the various ship types, and there are certain ship types that are predestined to go to third party ship managers: these are the standard vessel types such as containerships and tankers. The ship owner is looking for the added value from this, especially when it comes to what the manager can do better than the owner can do himself. And the ship owner will ask himself in handing the business to a third party manager, am I losing contact with the vessel? Who will the seafarers identify with when they serve onboard my ship? Will they take my company’s identity or will they take the identity of the third party ship manager? I believe that ship managers today must be good communicators;

Ship Management International Issue 66 March/April 2017

Left to right: Capt Eberhard Koch, Chairman, CEO and Partner, Oesterreichischer Lloyd Shipping; Mark O’Neil, Future CEO of the intended Columbia Marlow merger; Ilias Tsakiris, CEO, American Hellenic Hull Insurance Company; and

Andreas Chrysostomou, Independent Maritime Expert

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they must be able to bring the various interests together – seafarers, the charterers and the owners; they must establish key account management so that the small ship owner finds himself identified in the big management company, and the big management company is able to make him feel accommodated within their structure. The bottom line today is do we survive or do we not survive, and after the recovery the question will be how much money do we make? For that to happen we have to work together, we have to be shoulder-to-shoulder and we have to look for the added value. Maybe that ship owner is investment driven or that other ship owner is a third-generation family ship owner, if so, then the values may be completely different but we have to adjust to these all the time. The modern ship managers do this to a greater extent – they help the ship owners get through their financial restructuring; they help them do better reporting. This is a lot of the added value that we don’t talk about.

Sean MoloneyIlias, let me bring you into this point. Are ship managers good communicators and do you welcome some of them potentially becoming insurance brokers?

Ilias TsakirisI agree the managers are doing a great job in protecting their clients, but it cannot all be good. What we have seen are third party managers who have excelled themselves, especially when it comes

to crew retention. The higher the retention level you have the better your operational results. For us in insurance, the professional third party managers are very useful; they have improved a lot of things when it comes to what traditional owners used to do. Third party managers are investing heavily in crew. But whether we like it or not, while crew costs represent 50% of OpEx, they still represent 80% of the claims. Talking about IT and computerisation, we have invested millions of dollars in this area because we wanted to try and identify how claims arise. To us this is the $1 million question. Are the claims related to the engine type or the amount of hours a day being worked?; and is there a link to the training of the crew? All this data is being recorded but we are processing less and less of it because of the sheer volumes involved. So, I agree that third party shipmanagement is essential for quality of shipping and if we are to see a drop in claims. As long as there is no conflict of interest and ship managers are regulated like the rest of the insurance industry we take no issue with them being insurance brokers.

Sean MoloneyThis question that 80% of accidents are due to crew related issues is something I was reporting on 30 years ago but why are we still seeing it in today’s industry?

Giles HeimannThe reality is, that over time, we are placing more and more

Issue 66 March/April 2017 Ship Management International

“The first months of 2017 have seen a remarkable upswing in the dry bulk markets. There are signs that this development may be sustained - provided there are no new waves of placing orders for new vessels.

“Clearly the last years of depressed markets have taught ship owners and managers to be more cost-conscious as the only way to improve the bottom line. We have used this as opportunity to improve our management systems and to increase the emphasize on safe ship operation and incident/accident prevention. This will no doubt lead to improved results in future - not only financially, but more importantly in less incidents and safer ships.

“The service of managing ships is typically outsourced by owners who do not see this as their core business. These owners typically

continue to have an active interest in the condition and performance of their vessels, but use managers as they are better geared to meet all the requirements – economic, regulatory, technical etc. Economies of scale help managers to perform their duties more efficiently than smaller owners could, and I am certain that we will see further consolidation of the industry in the near future (both by mergers of technical managers as well as owners outsourcing technical management to larger managers).“

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Dieter RohdenburgCEO, Intership Navigation Co

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responsibilities on our seafarers in terms of systems, procedures and paperwork. If you turn the clock back 25 years, when I was at sea, yes, we had procedures and systems, but they were generally simpler. Now we are putting more and more technology onboard our ships; we have reduced the number of crew that are operating the ships; the commercial pressure on vessels is greater; the nationality demographic on today’s vessels is varied; and the welfare provision and social atmosphere onboard today’s ship is very different than it used to be. This is particularly relevant when you look at issues such as behavioural-based safety (BBS). The cold hard reality is that whilst it is a problem that everyone in the industry is facing; there is no rapid solution. All we can do is increase levels of competence, provide as much support as possible to the seafarers, try to provide consistent management systems that work for them, rather than pieces of paper just to maintain our compliance as employers. It is a huge challenge and unfortunately human error will always be there. All the training in the world will not completely take the statistics away. All we can do is continue to try and support our crews and provide high levels of training and this, together with good BBS will hopefully control the statistics.

Sean MoloneyMark do you have any views on this?

Mark O’NeilI think the answer is invest, invest and invest – time, effort and money. The intended Columbia Marlow merger looks at training in a very sophisticated way. It is not just taking your raw recruit at one end and spitting out a seafarer at the other who may have done all the training requirements and ticked all the boxes. It is about the ongoing pastoral and professional management of that seafarer. Capt Adami talked about looking after the seafarers and being mindful of their concerns and welfare at home. It is not about treating them as cogs in an engine, but looking after them comprehensively and looking after their families, careers and their ongoing training requirements as well. It is vital that we not only have recruits going through the system

and all trained to the highest required standards, but that the qualified seafarers have continuous and regular ongoing training and that the senior individuals are then retained within the organisation, having loyalty to the organisation, and then passing their experience down. It is all about having the complete package. Most incidents occur not necessarily because of the guy on deck at the time, but more to do with the inadequacy of the support infrastructure behind him – is he being probably looked after and properly supported?

Sean MoloneyIt begs the question, what will the future seafarer look like? Will he be holding a screwdriver and a hammer or will he be some IT savvy techno kid, totally in tune with up-to-date technology and the Internet?

Mark O’NeilI think they are, inevitably, more tech savvy these days. The younger generation are for more tech savvy than any of us around this table will ever be. Retention rates within our intended company are around the 95% mark and words like ‘family’ are key. You cannot invest this money in the seafarer as an individual and then allow them to go elsewhere. Those companies that invest and retain will minimise the incidents that are happening out there.

Giles HeimannI do agree with Mark but I want to come back to your question about what the seafarer of the future will be like. Again, we can turn the clock back 20 years, where a deck officer standing on the bridge would be using an old-fashioned ARPA, and now we’re looking at digital chart systems, dynamic positioning and ECDIS. The seafarer of today has already evolved enormously, but that doesn’t only come down to the jobs they are doing, such as navigating the vessel or controlling the systems onboard, suddenly we are sitting them in front of a computer and asking them to answer email on a regular basis. We are asking them to compile online reports and monitor complex technological

Ship Management International Issue 66 March/April 2017

“Investment in IT and Big Data is all very important, but they are not necessarily items that the ultimate client, the ship owner, is going to write a blank cheque for”Giles Heimann, (pictured) Corporate Director Fleet Personnel, Bernhard Schulte Shipmanagement

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systems, so they will naturally evolve into becoming more technologically advanced.

Capt Eberhard Koch Investing the time that Mark mentioned, is very important, and we strongly believe that the briefings in the office are sometimes better than a bunch of new regulations that we are sending onboard ship. Investing time from the top management is very important.

Capt AdamiWhen we talk about training here we are looking at it in too short a time-frame window. We are talking today, 30 years after the Herald of Free Enterprise disaster in Zeebrugge where 193 people lost their lives. The result of this was that the ISM Code was enacted. And now we talk about training and checklists. Now Giles said that when he was onboard ship there was a system, albeit a different system, but it was a culture: the shipping companies had a culture and that culture drove everybody else onboard to do the job correctly and we have to grow a culture. We don’t have to grow an STCW-compliant training system, we have to go back to a real shipping culture and that has to start with recognising the professionalism of the seafarer as a person. We should not criminalise these young guys and we should do exactly what Eberhard has said, and

look at how do we develop leadership in these guys and that is missing. A master of a ship is like a CEO of a business.

Mark O’NeilWe are in an environment which is becoming increasingly commoditised. A lot of the questions being posed today ignore what is happening in the wider food chain – the talk now is all about commoditised vertical structures with the supply of cargo at one end and the market at the other. The challenge for the ship owner is to adapt to that environment as well. And I completely agree with Capt Adami in keeping the culture, because we are the human element in such a commoditised chain and if we don’t look after the human element then the whole chain will break down. Within that chain, shipping must remain relevant and compelling.

Sean MoloneyThank you gentlemen. I want to talk about Cyprus as a maritime cluster now. How positive is business here on the island, and what are the prospects in the next few years in terms of cluster growth and new opportunities?

Alexandros JosephidesWe are investing strongly in developing a cluster here on the island where we can deliver the services that the businesses here require and I am personally very optimistic about our future here on the

Ship Management International Issue 66 March/April 2017

Cyprus Special Report: Round Table Debate

“As far as insurance is concerned, and I will concur that professional ship managers are doing an excellent job

because we are seeing a decline in insurance claims, but 80% of claims are crew-related so there are certain

things that the manager can’t control and these tend to be related to the people”

Ilias Tsakiris, CEO American Hellenic Hull Insurance Company

island. Cyprus started as a cluster, composed mainly of third party shipmanagement companies but we are looking at a cluster today which is populated with ship owners, ship managers and a whole range of shipping-related services. We have seen growth and development of maritime education here on the island, something we have promoted from the beginning, so that our children can be educated in this industry and come back and work for the companies here on the island. We have approximately 50 young people a year passing through maritime academies both on the island and abroad. Hopefully when these people return as full professionals and fully trained Masters and Chief Engineers, their involvement in the island will boost the attraction of Cyprus as a place to do business. What brought people here in the first place was the overall legal and financial working environment, the supply of qualified people and the availability of professional services such as law and accountancy. We also worked very hard on our taxation system which was fully approved by the European Union in 2010. We have a maritime administration here which is very strong and very competent, and we are working with the Government to make that even more efficient, flexible and self-standing. We have banks here now developing their own shipfinance services which we didn’t have in the past, and we have people investing in a floating dock to offer a ship repair services here on the island. These services coming together will only increase the attractiveness of Cyprus as a shipping centre.

Sean MoloneyAndreas, let me bring you in on this. Is the future of the cluster in global shipping assured for the future and will Cyprus continue to play a pivotal role in that?

Andreas ChrysostomouFrom my experience, the Cyprus cluster can flourish. It can be everything that Alex has said, pro-vided that there are no external threats from its own internal market. The worries are not directly related to the Cyprus Shipping Cluster but the European Cluster as a whole. Here in Cyprus two years ago we identified that the centre of our cluster was third party shipmanagement and we saw that the cluster had the potential to grow irrespective of its core by adding in all the services that Alex mentioned. Since we do not live in isolation from the European Union, the single market influence should be taken into consideration.

We also have to be very careful when it comes to tax incentives, because the others are watching us very closely. Times are changing but Cyprus has a huge understanding of how to turn threats into opportunities. Don’t forget, we are the only peaceful nation at the moment in this region. People want to maintain that position in Cyprus so let’s take advantage of it. The Turkish em-bargo is a major issue and we cannot change it alone but the Government is working very hard to re-solve the issue. The problem is can we go around it? We must find ways to resolve it.

Cyprus Special Report: Round Table Debate

Mark O’NeilSometimes when you have been here for a while, you can close your eyes and be blind to what you have. But being new to living here, I am perhaps better able than most to see what we have. As long as a place remains compelling and relevant it will do well. If it is a good place to do business it will do well. In my experience, and I see it more clearly now, Cyprus is a good place to do business; it has all the relevant components of the cluster that we need; it has a highly educated population and an increasingly maritime-educated population; it has professional services available and has a secure and safe court system which we would expect, so it is a very good place to do business in. What surprises me though, is the commitment of the shipping industry here to Cyprus and that cuts completely across competition. There is coopetition in selling Cyprus as a good place to do business.

Giles HeimannAs probably the second newest person to the island here, the taxation regime on the island is advantageous. The cluster is safe and is growing and I believe there are about 140 maritime-related companies based in Cyprus. I believe that the maritime cluster’s contribution to the country’s GDP is around 5.5%. We are also starting to see developments like the Cyprus Maritime Academy, which BSM is supporting through provision of our owned training centre; we’re starting to see more commitment to develop the maritime industry. I can even say from a personal point of view, that when I moved here two years ago, I firstly looked at all the major shipmanagement centres – Singapore, Hong Kong and Cyprus. Cyprus was the one that had the greatest interest for me because of its location, because of its connections, because of the companies that are based here, and the huge amount that Cyprus has to offer the shipping and maritime industry.

Ilias TsakirisWhen we commenced our negotiations with the American P&I as to where we should set up our insurance company, various jurisdictions were under consideration within the EU. However, the choice could not have been easier. Cyprus, by every respect, has one of the best business environments to set up any type of business. For starters, the Superintendent of Insurance demonstrated extreme professionalism and efficiency. The authorities assisted us during our licensing process by pointing to the correct steps that we had to follow since Solvency II had just been implemented. American Hellenic Hull’s Board was so impressed with the level of expertise within Cyprus, and this had as a result to appoint risk managers, actuaries, internal and extrenal auditors, and compliance officers, all from Cyprus. At this point a note of gratitude should be addressed to the Cyprus Shipping Chamber and the Minister of Transport, Communications and Works, Marios Demetriades, for their valuable assistance.

Sean MoloneyGentlemen, thank you very much for your time today. l

But as Thomas Kazakos stressed, if, and when, a resolution to the Turkish ban is reached, and there has been a massive amount of intense negotiation already undertaken and common ground reached, it is acknowledged that shipping will remain one of the few federal services in the country.

“A lot of preparation is being done to ensure that the existing operational system of shipping in Cyprus such as the tonnage tax, one flag, will be adhered to. So far, the assurances suggest that will be the case. Couple that with the geopolitical developments in the region, and ongoing discussions for the exploration of natural gas in Cyprus, then this can only work to more positive understanding by Turkey to resolve the Cyprus issue,” he said.

The flag carried out a study last year which took into consideration shipping routes and trading patterns by a variety of companies and ship types. The Department is still analysing the results but is expected to target specific companies and specific ships during the second quarter of 2017. However, the preliminary findings of the study indicate the flag should concentrate on the Asian market because of where the vessels trade.

“We try to develop the cluster in general and not just the flag. We are also interested in ship owners and ship managers that want to join our tonnage tax system because we want to develop the industry,” said Mr Efstratiou.

And this includes motivating more young people to think of maritime and the sea as a possible career. “In Cyprus it is

not customary for the younger generation to follow into traditional shipping professions. This is starting to change slowly, with more young Cypriots now joining training academies,” he said.

The Department has been staging some campaigns in High Schools and would like to see at least 100 students coming through each year. It will also look to the bigger maritime companies in Cyprus to start offering jobs to Cypriot ex-seafarers.

Another significant development is the decision by the Government to submit a bill to establish an independent Deputy Ministry of Shipping, as already alluded to by the Minister. That means that the political leadership can have the power to take political decisions directly to the Council of Ministers and the President of Cyprus. The Minister will also be responsible for drafting and monitoring national shipping policy and politically responsible for the day-to-day provision of the Department of Merchant Shipping. More significantly, the new Deputy Ministry will also permanently represent Cyprus shipping in the European Union, IMO as well as be responsible for the promotion of Cyprus shipping as an autonomous govt agency.

Development of the Cyprus cluster is high on the island’s agenda, especially when it comes to financial services. But as Maria Hajivarnava, Shipping Department Advocate at the Nicosia-based law firm Christodoulos G Vassiliades & Co explains, while the cluster may be showing signs of growth, the industry is still having to deal with the aftermath of what has been one of the toughest global economic crises in generations.

“We have shipmanagement companies as clients and more are coming to Cyprus and we are also starting to see ship owners coming over from Greece.

“There is optimism with reservation. We do know that the industry is still having a lot of problems and it’s going to take a lot of years to come out of this. We still see the closing of companies and the restructuring of loans.

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Cyprus remains a very cost-effective place to run a shipmanagement business from, with not only operational costs dropping but also salaries reducing often by as much as 10%, according to one of the industry’s leading players.

Sunil Kapoor, Director of FML Ship Management, said that Nicosia had become a more popular destination on the island for ship managers because of the lower rents and also because of the quality of the English schools for the ex-pats.

“The recession which took place in 2013 also brought down the cost of operation in Cyprus. The salaries of the local people reduced by 10%. We did not reduce our salaries but you could see there was a significant reduction in the day to day operation of our office,” he said.

According to FML, during the recession, lots of Greek owners registered their companies on the island so if things became worse they could quickly move to Cyprus. A lot of Greek people also came to Cyprus looking for jobs.

This was a point echoed by Louis Nicholas P. Loyal, Managing Director of Esmeralda Shipmanagement, a company established as a crew management concern in 2002 before moving onto full management before becoming ship owners in 2008.

“It is a very small community here on the island so we know each other. That means if I need something, I can get it right away.”

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But how strong is the legal sector on the island?

“People in Cyprus are very well-educated and most of the lawyers have been educated in some of the UK’s best universities. Many of them have worked abroad and this is great experience because we are an international centre and deal with international lawyers and situations all the time. I believe corporate services and legal services here are of a very high standard.

While restructuring of loans was making up a large part of the workload at the moment, Ms Hajivarnava said there were also smaller companies coming to Cyprus looking for a more advantageous solution to help them survive the crisis in the shipping markets.

“It is very easy to set up a company here in Cyprus and the system is very solid and straightforward. We are also noticing a movement from Limassol to Nicosia because rents are lower here. The cluster is spreading out from Limassol very, very slowly. Indeed, some of the big shipping companies have offices in Nicosia,” she added.

Growth of the insurance sector on the island has been strong with existing players strengthening their market share while others are building stronger footholds.

The American Hellenic Hull Insurance Company is one such positive example, having more than doubled the number of ships on its books since its launch in the middle of last year. The Cyprus-based insurance company, a wholly owned subsidiary of New York-based American Steamship Owners Mutual Protection and Indemnity Association, inherited business originally written by the Hellenic Hull Mutual, which is now in run-off. About 610 ships transferred cover under a novation deal but the fleet on the books of American Hellenic has now passed 1,286 vessels.

Ilias Tsakiris, CEO, told SMI: “We get a lot of our business still from the

Lloyds brokers, and we’re growing business from the German market. The Greek broking market is a very important market for us accounting for more than 45% of our book.

“We are currently road showing in the Far East and we will be road showing in the US; the plan is to grow even more by the end of the year and to increase the number of our vessels.

“Looking at Cyprus as a cluster, there are certainly stronger prospects than most think in growing business down here. Cyprus is better located than several other clusters and is a crossroads geographically, which is why it is extremely resilient to disasters,” he said.

According to Costas Joannides, CEO of Marsh, the insurance sector has come under a lot of pricing pressure in view of superfluous capacity which has been partly the result of heavy investment in the insurance sector, as well as due to underwriters understanding of the difficulties that our clients face with freight markets.

Our clients on the island take a balanced approach as they do not wish to compromise long term relationships and broadness of insurance cover, and they insist on utilizing first class insurance companies. “While we are under significant pressure to push prices down there is no relaxation on the quality of the products we offer”.

Issue 66 March/April 2017 Ship Management International

Cyprus Special Report

Cyprus Cluster Provides Growth OpportunitiesMore Greek Ship Owners are basing their operations from

Cyprus due to the booming maritime industry there, says Marine Catering Training Consultancy (MCTC).

MCTC, a Cyprus-based company that was founded in 2013, offers expertise in training catering crews onboard vessels. In the last four years it has gone from providing catering training on several vessels to currently just under 300.

Managing Director Christian Ioannou says MCTC’s heart will always lie in Cyprus, which he believes to be a vital part of the global maritime industry.

Mr Ioannou said: “Cyprus has always being a vital part of the maritime industry with a growing number of ship owners and managers. Some of the largest ship management companies have a base in Cyprus.

“The Cyprus cluster is important to MCTC as a lot of crew-related matters, such as training is handled by Cyprus-based companies. Having our base in Cyprus and being half-Cypriot myself, means our hearts lie here. MCTC is regularly approached by Cyprus-based companies, who like the fact that we are close by to their offices.

“The Ministry of Transport has been actively involved in projects that provide growth opportunities for Cyprus. Greek owners move into Cyprus to operate their offices with a professional approach from the Cyprus Department of Merchant Shipping. This definitely makes things easier for them to move here.”

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“The majority of the local shipping industry is very loyal, preferring to rely on high levels of continuity as well as long term relationships. I have not seen any large breakouts or any claims unsettled. When we present a claim, it is looked at positively rather than at how it can be avoided. Insurers know that the systems that our clients are using are so advanced and so transparent; they visit the island several times each year and can audit their systems. The change that we are seeing in the insurance market is underwriters focusing not only on the operational risk of the ship, which of course is one element, but on the quality of the management systems. They want to explore key people’s knowledge and ability to handle the ordinary day-to-day business as well as ascertain how responsive they are when it comes to crisis management.

“On the claims side, our clients are not keen to put through attritional or borderline claims because they use insurance for medium to catastrophic casualties, where they need the input and the financial support,” he said.

Anna Vourgos, Director of Aphentrica Marine Insurance Brokers, added to the debate: “What we are trying to do is understand the challenges our clients are facing. “We haven’t seen an increase in demand because of the state of the market. In a bad market, certain people make big changes if they need to take drastic measures, which can be an opportunity if you are not the broker involved, or a threat if it is one of

your existing clients taking the drastic measures. So, we are in a constant attack and defend situation where we are trying to take advantage of situations while at the same time defending what we have. The majority of the market hasn’t been making big changes because they have been trying to lay low to see themselves through.

“Our main strategy is to maintain our portfolio and look for opportunities where real opportunities lie. We are lucky that we have very loyal clients throughout. Most of our clients have been with us for a minimum of 10 years,” she added.

Professional average adjuster and marine claims consultants Albatross Adjusters is one such business on the island which has seen its role in the market strengthen. As Michael Steemers, Director, told SMI: “The company was established in 1983 and we now find ourselves dealing with almost all of the shipping companies on the island.

“We are one of a small number of companies who will handle large general average cases such as large salvage cases on a general average basis. We have a facility to collect general average guarantees and general average bonds and we have been doing this quite successfully,” he said. Getting to this stage of market respect is not only driven by the paper exercise of collecting the information, but it also has a lot to do with the number and the quality of the people employed.

“This expertise has been developed in-house; unfortunately competitors

are very quick in copying new ideas and we are developing new ways of making the process faster. The whole thing could be a logistics nightmare but if you organise it properly it is doable,” he stressed.

“The Cyprus market has always been a very important market to companies like ours,” said Asad Salameh, President of SatComms specialists World-Link Communications, “and will become even more important following Brexit and the influx of EU regulations.

“It has become more of an attractive shipmanagement centre than it ever has; a fact demonstrated by the influx of Greek companies to the island,” he added.

Cyprus has become so important to World-Link that it now manages its operations in Cyprus, Greece, Germany as well as the UAE from the island as well as global technical support. “From here we support our clients 24/7 as well as attend to vessels worldwide from our base here in Cyprus,” he said.

But what are the challenges facing Cyprus as a maritime cluster? Asad Salameh again: “I think the implementation of more rigid EU rules and regulation may hinder some growth, but so far it has not been too big of an issue. While many Greeks have come to island, we’ve seen a few Greek companies move through Dubai to the UAE for instance against coming to Cyprus, so that basically is competition for the Cyprus market.”

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Cyprus Special Report

http://www.marinesoftware.co.uk

Antonis Kasios, Operations Manager at Helica Maritime, added to the debate about the changing face of shipping towards a smarter future: “Digital transformation and Big Data revolution in shipping are inevitable. The fact that shipping companies are trying to have more efficient vessels, utilising IoT (Internet of Things) and Real Time performance data in combination with Historical Repository Data for each vessel, means this revolution has become a reality.

“The cultural challenges are enormous, and, of course, privacy concerns are only going to become more significant. But the underlying trends, both in the technology and in the business payoff, are unmistakable. Data-driven decisions tend to be better decisions. Leaders will either embrace this fact or be replaced by others who do,” he said.

“The future of technology lies in data and its analysis,” said Vassilis A. Kakampakos from SetelCyprus. “More objects and devices are now connected to the Internet, transmitting the information

they gather back for analysis. The goal is to harness this data to learn about patterns and trends that can be used to make a positive impact on our health, transportation, energy conservation, and lifestyle. However, the data itself doesn’t produce these objectives, but rather it’s solutions that arise from analysing it and finding the answers we need. Two terms that have been discussed in relation to this future: big data and The Internet of Things (IoT); It’s hard to talk about one without the other, and although they are not the same thing, the two practices are closely intertwined.

“This disruptive technology requires new infrastructures, including hardware and software applications, as well as an operating system; enterprises will need to deal with the influx of data that starts flowing in and analyse it in real-time,” he added.

As Despina Panayiotou Theodosiou, from Tototheo Maritime, emphasised: “Satellite communications and data speeds are now available at affordable pricing to ship

operators, thus driving the adoption of new technologies that provide smart operations. Another driving factor is the growing and different needs of the shipping companies in a very competitive environment. The need for improved performance has introduced concepts like the ‘connected ship’ and shipping companies are taking initiatives for organisational change which is significant. Almost every aspect of maritime operations is re-designed to better measure activity and optimise processes.

“During the last few years, Tototheo Maritime has been developing and specialising its offerings as well as adding new services and products to its portfolio. Our services now range from satellite communications to the sale of navigational equipment, the development of IT solutions and applications and engineering projects, etc. “Onboard technologies and software are changing and evolving more than ever before and this is the area that we as a company invest and concentrate on,” she said. l

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Development of the Limassol Marina may have captured the imagination of the Cyprus

maritime cluster as indicative of the way the island is received internationally, but as Andreas Christodoulides, CEO of Limassol Marina, asserts, while it may have changed the face of Limassol, its creation was part of a broader strategy to improve the calibre of tourism to the island and to boost the Cypriot economy.

“This first superyacht marina was integral to positioning Cyprus on the nautical yachting map and continues to improve the island’s image on a global scale,” he told SMI.

“It has been the catalyst to many improvements in our city; it has boosted local businesses; created hundreds of jobs; attracted visitors to Cyprus; and continues to encourage investments in the area,” he said. Being able to finally associate Cyprus with a mixed-use development of this standard, offering a combination of berths for yachts up to 100m, elegant residences and a thriving commercial area with dining, shopping, leisure and cultural facilities, is seen as something hugely valuable to everyone on the island.

“And we need more infrastructure projects of this calibre to maintain

the interest of high-end tourism, high net worth individuals, businesses and investors. We are very much looking forward to the fruition of more golf courses, the Casino and other marinas too,” Mr Christodoulides said.

But where is most of the interest coming from – not only when it comes to the high end properties on sale but also berthing space at the marine itself ? Mr Christodoulides again: “We have already sold properties to over 25 nationalities, something we feel emphasises the product’s broad international appeal and unique nature. There is continued high demand from Russian buyers, but we also have ongoing interest from those in Cyprus (including foreigners based here with their companies), the Middle East, Europe and Asia.

“The majority are local and foreign high net worth individuals looking for a second home (holiday home) for themselves and their families. The safe environment here, the security, the central concierge, range of services and facilities available within the development are a huge draw for them,” he said. There are also instances where buyers have used their properties as a permanent residence. Many have also purchased property for investment purposes and are renting

their unit out through our own Limassol Marina property management team.

“Where the marina is concerned, we seem to have a 50:50 split of Cypriots and foreigners berthing with us. Most of the vessels up to 20m are owned by Cypriots, with foreigners (some also local) mainly here with 20m plus sizes. The majority of non-Cypriots with yachts are from Russia, Lebanon, Israel, other Middle Eastern countries, the UK, Germany and US/Canada. They tend to be affluent businessmen and families with high disposable income. Some are living in Cyprus, some are cruising the Med, some have a Cyprus link and, therefore, base their yacht here. Most of the Cypriot yacht owners are either middle-income enthusiasts (sailors/fishermen/water sports fans) or successful business owners with high disposable income,” he added.

“We have sold all our completed apartments and 65% of our villas. Demand for luxury waterfront homes in prime locations continues to rise, so property sales on the higher end of the market are doing well. We are now preparing to launch our final residential phase. These upcoming apartments, surrounded by water, are one of a kind so we are confident 2017 will be another good year for us.” l

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Photo: f8grapher / Shutterstock.com

strengthening Cyprus’ yachting credentialsLimassol Marina:

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Market Sector: Paints & Coatings

Efficient hull and propeller performance are two of the key factors that help owners, operators and managers reduce vessel costs and improve financial

results year-on-year. In November 2016 a new standard ISO 19030 was introduced by the International Organization for Standardization to measure the effectiveness of all the devices that are used to improve these performances.

The new standard, which was devised during a three-year collaboration by 53 shipping industry stakeholders, could not have been more timely. Geir Axel Oftedahl, Business Director for Hull Performance Solutions at coatings specialist Jotun, said: “This is a huge leap forward for shipping and the environment. The standard provides a transparency that has been lacking in the industry and will be a central driver for enhancing environmental performance and vessel efficiency.”

The costs of poor hull and propeller performance were the equivalent of 10% of the energy costs and greenhouse gas emissions (GH) of the world fleet – a total of $30bn. “With this standard we can finally quantify how solutions such as advanced antifouling coatings can tackle this issue – providing accountability and return on investment (ROI) for ship owners while detailing the enormous potential for GHG and cost reductions,” he said.

Jotun has used the standard to give a high performance guarantee on its Hull Performance Solution (HPS) coatings. “As the guarantee concerns a very small speed loss – under 1.5% - only the most precise measurement criteria will suffice,” explained Stein Kjolberg, Jotun’s Global Sales Director for High Performance Solutions. “Our Hull Performance Solution combines state-of-the-art coatings and application technologies with ISO-CD-19030-2 compliant performance measurements and high performance guarantees – helping customers reduce fuel costs and emissions by up to 16%.”

A consultancy tool, Intertrac Vision, which was launched last year by coatings specialist AkzoNobel and gives ship

owners and operators accurate and transparent predictions on the fuel and CO₂ savings potential of fouling control coatings before they are applied, is also based on the new ISO 19030 standard. A free service for owners and operators, it is delivered via specially trained consultants and was devised after a four-year R&D project with collaboration from University College London Energy Institute and more than 30 owners and operators.

Intertrac Vision is the shipping industry’s first Big Data solution to accurately predict the performance of a coating technology before it is applied and is made up of hundreds of thousands of datasets. It also uses computational fluid dynamics (CFD) studies on different hull forms to make accurate predictions on the impact of fouling control coatings on the power sources of vessels.

By using the ISO 19030 standard a vessel’s fouling control performance predictions from Intertrac Vision can be verified against actual performance using an ISO 19030-compliant monitoring process.

One key issue that concerns owners is the extra drag created by fouling organisms and invasive species that attach themselves to a vessel’s hull. Extra drag means more fuel and thus greater cost. So the advantages of smooth hulls that reduce friction between the ship and the sea are self-evident. Smoother hulls mean less money and the right coating can significantly improve vessel efficiency. Coatings manufacturer Hempel Marine has produced Hempaguard which it claims can give owners fuel savings of up to 6%. “It also retains its effectiveness when a vessel switches from regular to slow steaming,” said Andreas Glud, Hempel’s Group Segment Manager for Marine and Dry Dock.

The coating which was launched after a five-year development programme, uses Actiguard technology which integrates silicone-hydrogel and full diffusion control of biocides in a single coating, releasing 95% less biocide than a Speciality Polymer Coating (SPC) antifouling paint.

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and operators

Newhull standardvessel ownersboost for

Market Sector: Paints & Coatings

97Issue 66 March/April 2017 Ship Management International

Before image of the corroded water ballast tanks on a crude oil tanker

After image of the corroded water ballast tanks on a crude oil tanker

“This is a huge leap forward for shipping and the environment. The standard provides a transparency that has been lacking in the industry and will be a central driver for enhancing environmental performance and vessel efficiency”Geir Axel Oftedahl, Business Director for Hull Performance Solutions, Jotun

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“Environmental concerns are high on a ship operator’s agenda and they are consistently searching for efficiencies in the current depressed shipping market. The increasing competitiveness within the market means that operating costs are continuing to rise and operators need to find sustainable solutions to improve their energy efficiency whilst complying with ever more stringent environmental regulations. This is where the right coating solution can significantly impact the efficiency of a vessel, whilst also minimising a vessel’s

impact on the world’s oceans,” said Mr Glud.

“Coatings with a high solids ratio and low biocide content are fast becoming the choice of all responsible ship owners. Additionally, we devote much effort to developing highly efficient fouling defence coating systems that maintain a clean and smooth hull which, in turn, enhances energy efficiency,” he said.

Another problem area is corrosion on ballast water tanks. A recent project featured the ballast water tanks of a

crude oil tanker which needed urgent treatment. The vessel’s owner asked paints and coatings specialist Chemco, to find a solution. Ian Gold, Chemco’s Marketing Coordinator, said: “There was severe corrosion damage and it was particularly bad around the weld areas and edges as this is where most corrosion normally begins, due to typically less thick coating coverage. Over 35,000m² had to be recoated so the vessel went into dry-dock.

“There was other maintenance and repair work going on throughout the vessel and there could be no disruption to these services. Therefore grit blasting and the use of solvent-based paints were prohibited. High pressure water jetting was used to prepare the surface with mechanical preparation being used in inaccessible areas.”

Chemco applied two spray coats – a spray coat is applied when the majority of the surface is coated without fully coating the whole surface – of Chemco’s solvent-free, wet and rust tolerant Epo-chem RS 500P treatment. Between the two coats, a stripe coat of RS 500P was applied to the ballast water tanks’ edges, welds, scallops and inaccessible areas.

“By using the solution the client received substantial time and cost savings and there was no disruption to other ongoing trades which led to further savings being achieved. If budgets are tight, it becomes even more important for shipping companies to find the right coating system for their vessels and so offer them long-term, cost-effective solutions,” said Mr Gold.

Anti-corrosion protection can also be used to improve and reinforce the hulls of newbuildings. A coatings contract for the polar research vessel, Sir David Attenborough, was recently awarded to Subsea Industries, the Antwerp-based hard coatings specialist. The 128m-long, £200m research vessel is being built in the UK’s Birkenhead for the Natural Environment Research Council (NERC) by shipbuilder

Ship Management International Issue 66 March/April 2017

Market Sector: Paints & Coatings

http://www.jotun.com/hps

Cammell Laird to a Rolls-Royce design and is due to be operated by British Antarctic Survey (BAS) in the Antarctic in 2019.

Subsea’s non-toxic hard -coating system Ecospeed will be applied to the vessel’s hull. A prerequisite was an environmentally-sound hull coating that would reduce fuel consumption without detriment to performance in ice.

“With Ecospeed there are no special docking requirements or specialist equipment, which means that any remedial work can be part of the vessel’s normal refit schedule. The coating’s simple application and maintenance procedures also help drive down the vessel’s through-life costs, and Ecospeed fulfils that requirement” said Rob White, Senior Marine Engineer at British Antarctic Survey.

Manuel Hof, Subsea Industries’ Production Executive and NACE Coating Inspector, said: “The coating is proven to reduce fuel consumption so the vessel is not burning as much fuel, thus reducing ship exhaust emissions and the Sir David Attenborough ’s carbon footprint. It also correlates directly to lower operational costs.”

Ecospeed was previously applied to the UK royal research vessels Ernest Shackleton and James Clark Ross . “The Sir David Attenborough requires a fully ice-strengthened coating for operations in Antarctica as well as providing effective antifouling between the Polar regions without being harmful to the environment which Ecospeed offers,” said Mr White.

“It bonds very well to the bare steel on application and provides a tough, effective barrier against the sea and ice. From

“The increasing competitiveness within the market means that operating costs are continuing to rise and operators need to find sustainable solutions to improve their energy efficiency whilst complying with ever more stringent environmental regulations”Andreas Glud, Segment Manager for Marine and Dry Dock, Hempel Group

Market Sector: Paints & Coatings

the experience we have gained through using Ecospeed on Ernest Shackleton and James Clark Ross we were adamant that the hull coating for the newbuild should also be Ecospeed. Through-life coats, ease of maintenance and the environmental

benefits help reduce operational costs and makes the Sir David Attenborough a better research ship for Polar science,” he added.

Subsea’s Chairman Boud Van Rompay said: “The hard coating

completely mitigates against the leaching of chemicals into the marine environment and this, along with ‘green’ technologies will make the Sir David Attenborough one of the most environmentally-safe ships afloat.” l

Market Sector: Paints & Coatings

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Marine PropulsionBy David Tinsley

New sulphur standards promote scrubber usage

Earlier antipathy in certain quarters of the industry to exhaust gas ‘scrubber’ plant on cost outlay,

operational and design grounds is giving way to an accelerating rate of uptake. The technology is attracting new proponents across-the-board, convinced of its benefits over other solutions in ensuring compliance with tightening environmental legislation and galvanised by the impending, new global sulphur standard.

Following the 2015 introduction of a 0.1% limit in sulphur Emission Control Areas(ECAs), the IMO’s decision to make the long-mooted 0.5% global cap on the sulphur content of marine fuel mandatory from 2020, rather than defer implementation until 2025, has given added urgency to ship owners’ technical strategy deliberations. The European Union had already agreed that the 0.5% limit would be imposed in 2020 within 200 miles of member countries’ coasts. Furthermore, China has instigated a plan that will see a 0.5% sulphur limit brought to bear on shipping in a steadily increasing number of ports and zones.

The options of using ultra-low sulphur distillate, or burning alternative fuels such as LNG, are the chosen paths of many operators faced with the most stringent pollution controls. However, scrubbers are increasingly seen as a mature technology, which today takes a more compact form and entails more competitive pricing than earlier-generation equipment that reflected the substantial R&D costs borne by vendors.

Short payback times are claimed for new systems, whether in retrofit or newbuild applications, indicative of improvements in design and installation practices of the past several years. It is clear that the more time a vessel spends within an ECA, the more attractive the return on investment.

High profile endorsement of scrubber systems, which virtually eliminate emissions of sulphur oxides(SOx), and also cut particulate matter(PM), is expressed in the programme rolled-out across the fleet and multiple brands controlled by Carnival Corporation. In February this year, the group announced that it had completed the installation and certification of exhaust gas cleaning systems(EGCS) on 60 ships, representing an investment of $400m to date.

From an initial commitment to the use of the technology on 32 vessels, Carnival now intends to have systems on at least 85 ships by the end of 2020 and reports that it is on track to achieve that objective.

The Miami- and London-based organisation, the world’s largest cruise operator, has not only championed industry advances in marine engineering and environmental systems, but has also taken an active role in the developmental process. It broke new ground in 2013 with a proprietary technology to fit and function optimally within the confines of a cruise ship to reduce sulphur compounds and particulates from engine exhaust throughout a ship’s operating profile, at sea, during manoeuvring and in port.

Its ECO-EGC systems enable Carnival to meet the 0.1% maximum sulphur ruling cost-effectively in all circumstances, and give teeth to a policy of improving emissions performance as a whole, including reducing CO2. The group’s wider strategy is also implicit in the planned use of full LNG power on seven newbuilds due from 2019 onwards. These will be the first cruise ships to routinely use LNG at sea as well as during port stays.

A recent large-scale contract for scrubber technology involves one of the leading ro-ro exponents, the Grimaldi Group. The Italian operator has nominated hybrid Alfa Laval PureSOx systems for seven 66,700gt vehicle carriers ordered from China’s Yangfan Shipyard. In each case, the emission reduction plant will be connected to the MAN two-stroke propulsion engine. Hybrid systems offering both open-loop and closed-loop functioning modes were chosen because the ships are intended to trade between Italy and the US, where Vessel General Permit(VGP) legislation applies.

Closed-loop scrubbing is necessary so as to meet the very strict VGP wash water discharge criteria. PureSOx incorporates proven water cleaning based on centrifugal separation, which will be used when sailing in closed-loop mode.

Grimaldi has emerged as a prominent advocate of the technology, since the latest deal will bring its total number of PureSOx systems to 19.

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The first of the newbuilds, offering a car-equivalent unit(CEU) capacity in excess of 7,000, is due in mid-2017.

Receptivity to scrubber technology is widespread in the Great Lakes maritime community. Extensive recourse to exhaust cleaning systems is being made through both retrofit and newbuild schemes, enabling unfettered use of heavy fuel oil(HFO) within the aegis of the North America SECA. Canada’s Algoma Central Corporation had put down a marker for traders on the Lakes/Seaway network by specifying Wärtsilä closed-loop, freshwater-based plant for an eight-ship bulker newbuild programme in China, opened by the 37,500dwt self-unloader Algoma Equinox in 2014.

Vulica Shipping, a wholly-owned affiliate of US company Vulcan Materials, has chosen DuPont scrubber systems for two newbuild self-unloaders due to be assigned to trade within the Gulf of Mexico following completion by China’s Jiangsu Hantong yard later this year. Developed by DuPont subsidiary Belco, each shipset will comprise one single-inlet scrubber dedicated to the main engine and one multi-inlet scrubber, handling exhaust from multiple auxiliaries.

The systems fulfil US washwater requirements as well as achieving virtually complete SOx emission removal. The DuPont “run-dry” capability facilitates vessel trading in and out of the Emission Control Area. Vulica has subsequently nominated a single-stream, Belco-designed DuPont scrubber for retrofit by April 2017 to

one of its existing self-unloaders.

An early trial of a prototype exhaust gas cleaning system on a Maersk deepsea containership, stemming from a 2010 agreement between the Danish group and DuPont, is considered to have contributed significantly to operational and retrofit installation know-how, helping to shape design progression.

A series of 20,600m3-capacity LPG carriers delivered to a Norwegian owner last year are technically distinguished in each having a dual SOx and NOx emissions cleaning installation. It is claimed that the lead vessel, the Yara Sea, provided the first case wordwide of both technologies successfully working in conjunction on the same ship.

The owner of the Hyundai Mipo Dockyard-built trio, Yara International, ranks as the world’s largest producer of ammonia, nitrates and NPK compound fertiliser. The SOx/NOx abatement systems were delivered by subsidiary Yara Marine Technologies, the former Green Tech Marine. The multi-inlet, in-line SOx treatment comprises one scrubber connected to the 7,620kW MAN propulsion engine, and one scrubber serving the three 1,320kW diesel genset engines, cleaning the

exhaust streams to meet the 0.1% sulphur content threshold in ECA waters. At the same time, the SCR element cuts NOx emissions to the IMO Tier III limit.

New market entrants and extended product portfolios have widened the choice of systems available to owners, builders and designers. A degree of standardisation is necessary to keep manufacturing and acquisition costs down, although the variance in ship type, tonnage and powering, operational divergence and regulatory jurisdictions necessarily rule out a single ‘one size fits all’ solution. l

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1/ Scrubber installation in one of Carnival’s AIDA cruiseships

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Market Sector: Technical Management

The growth of trade and industry in the polar regions and a burgeoning fleet of modern icebreakers has made the need

for a robust safety regime to improve vessel safety and prevent accidents ever greater. Thus the Polar Code – which was introduced on 1st January 2017 – was a timely move for vessels built for and operating in the two Poles’ icy, sub-zero seas.

A key priority was the need for strong, weather-resistant search and rescue craft – from lifeboats and life rafts to fast rescue boats. Under the Code all lifeboats must be partly or totally enclosed and all crews supplied with thermal clothing. At the same time all onboard personal survival equipment (PSE) must be thermally insulated.

The Norwegian lifeboat manufacturer Norsafe has carried out a series of tests and trials to simulate the potential hazards and risks lifeboats and their crews face in polar regions.

Using a standard Norsafe Miriam 8.5 lifeboat, a five-day trial which included simulating a full-scale escape and an evacuation and rescue operation, was held in icy waters north of the Barents Sea. During the trial, Norsafe was supported by teams from the Norwegian Coast Guard, the Norwegian Maritime Authorities, the Norwegian Petroleum Safety Authorities, the Italian oil and gas multinational Eni, the classification societies ABS and DNV GL and five universities.

Norsafe carried out tests on lifecycle issues with Lifesaving (LSA) Equipment exposed to polar conditions

and made a full-scale study to find out how to avoid loss of warmth from a heated lifeboat in conditions of -30° C. Full-scale tests were also made to test the performance of installed sprinklers on lifeboats in icy conditions.

As a result of the tests, Norsafe was selected as the supplier of LSA for the British Antarctic Survey Polar Research vessel Sir David Attenborough which is currently being built at Cammell Laid shipyard in the UK’s Birkenhead. Among the vessels to be used for the project will be Norsafe’s JYN 100 conventional lifeboats for 90 people and its Merlin 915 and Magnum 750 fast rescue boats.

Yet, however robust and weatherproof most lifeboats are, they are not infallible and need regular care and servicing. They are also heavily regulated and have to be operationally ready and fit for purpose at all times. If anything doesn’t work on a lifeboat or its davit release system, Port State Control can detain their main carrier ship which could cause the vessel owner or manager serious problems such as loss of charter.

Under the SOLAS Convention, a lifeboat must be inspected and certified as fit for purpose and be ready for immediate use during its annual class survey by a third party service company authorised by a flag authority or else the vessel’s equipment maker.

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Lifeboats built to combaticy regions

Market Sector: Technical Management

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One such service provider, SeaSafe Marine, takes this process a stage further. “Crews can be wary of using a lifeboat’s equipment, resulting in critical lifeboat launch drills being performed incorrectly, not completely or in some cases even neglected. Although logbooks are dutifully filled in, the reality is often that crews are not practising with the equipment, so their familiarity and experience declines over time. The potential for accidents and incidents is therefore higher,” said Andrew Lemmis, Managing Director of SeaSafe Marine.

SeaSafe, which is part of the Wallem Group, provides a lifeboat maintenance service for owners and managers. This includes servicing lifeboats at least twice a year, maintaining their equipment to a high standard, regularly training and familiarising crews with the equipment and making sure specialist teams monitor serviced ships. “Not only does this promote better safety and result in fewer accidents, it also keeps overall running costs down for the owner,” said Mr Lemmis.

SeaSafe also carries out pre-docking surveys. The lifeboat is surveyed three to four months ahead of its dry docking. “ We go through everything to establish the complete work scope of what is needed for the dry docking. It means all issues, necessary spares and any non-standard work is identified in advance. The superintendent can then prepare the dry-docking specification for the shipyard with issues included and quotes prepared, thereby avoiding any unnecessary premiums being levied by the shipyard,” he said.

Then six months after a lifeboat has had its annual service and class renewal, a SeaSafe engineer will visit it to make sure its crew have no issues with its systems. This includes supervising a simulated launch on freefall systems and an overall audit assessment of the crew’s competence level.

“Today’s crews have endless checklists to complete and can become complacent with some procedures. For example, you are required to swing lifeboats out every week and make sure the lifeboat’s engine works,” said Mr Lemmis.

Whenever a particularly tricky technical and mechanical issue occurs, SeaSafe can call on a global team of engineers to resolve the problem. If, for instance, a vessel cannot be certified due to davit or equipment repairs or parts that need replacing while its mothership is in port, SeaSafe’s engineers work with the vessel’s owner or manager to find a solution. If, however, the engineers find a major problem with a lifeboat or its davits that cannot be completed during a port call, the engineer or engineers will sometimes stay onboard to fix the issue while the ship is travelling to its next port. l

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“Not only does this promote better safety and result in fewer accidents, it also keeps overall running costs down for the owner”Andrew Lemmis, Managing Director, SeaSafe Marine

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Objects of desire

Ship Management International Issue 66 March/April 2017

» Added range

Tesla has released the 100D upgrade option to its Model S giving it an extra 20-mile range.The luxury all-electric five-door vehicle now has a total range of 335 miles but still manages to reach 60mph in 4.2 seconds with a top speed of 155mph.As with all new Teslas coming off the production line since last year, the new model options will include all the hardware onboard to achieve full self-driving capabilities once the software is ready to make that possible, which is likely to be next year.

Tesla Model S 100D£93,000www.tesla.com

» Record your ride

Anything can happen while you are on the road which is why it’s a good idea to record your ride with the Drive HD Dash Cam by Cobra. Whether

you need evidence in an accident or want to watch funny footage from your journey, the dash cam means you never need to miss a moment again.

The CDR 900 allows you to share those moments from your smartphone and the series’ Wi-Fi enabled flagship model goes the next step in video

capture and sharing through the free Cobra Drive HD App. Through the App, users can remotely command the CDR 900 to start recording as

well as control its settings and the CDR 900 utilises Continuous Loop Recording which automatically overwrites the oldest footage when the

memory card gets full.

Cobra CDR 900 Drive HD Dash Cam with Wi-Fi$299.95

www.cobra.com

» Camera returns

The Fujifilm GF670 Rangefinder Camera is making a limited return engagement which will delight fans of its images after production stopped three years ago.It is dual format capable, so can shoot both 6 x 7 and 6 x 6 images and can handle 120 and 220 film. Thanks to its bellows system, its lens neatly folds closed when it is not in use.

Fujifilm GF670 Rangefinder Camera£1,799www.fujifilm.co.uk

Objects of Desire

107Issue 66 March/April 2017 Ship Management International

» Limited timepiece

Last year, Chanel released The Monsieur de Chanel Caliber 1 watch, which was well received by luxury watch collectors. Following the release of the Caliber 1, Chanel has introduced the Monsieur de Chanel Limited

Edition in platinum. Powered by the same Caliber 1 movement, the platinum version isn’t that much different to its predecessor in its build.

This one is more limited with a 40mm platinum case, black dial and sapphire caseback. Despite the differences, it still has the 240-degree

retrograde minute display, seconds subdial and jumping hour display. Limited to just 100 pieces.

Monsieur de Chanel Platinum Black Watch$63,000

www.chanel.com

» Picture perfect

This television is so unbelievably thin at just 2.57mm that it practically blends into your wall. This is because the set’s internals are housed in a Dolby Atmos-certified sound bar connected via a

transparent ribbon cable.The picture quality is superb with pixel dimming control, ultra luminance technology and HDR with Dolby Vision Support.

The built-in webOS smart features let you access lots of worthy content without adding an extra box.

The TV comes in 65in and 77in screen sizes.

LG Signature OLED TV W$8,000

www.lg.com/uk

» Perfect put

The new Odyssey O-Works Microhinge putter features new technology in the face for more top spin and better roll.The Microhinge Face Insert is crafted from a stainless steel plate that is co-molded with a Thermoplastic Elastomer Feel Layer. This plate is then populated with microhinges, small hinges across the whole of the face that flex into the polymer at impact and rebond to create an immediate forward roll on the golf ball.

Odyssey O-Works Microhinge Putter$230www.odysseygolf.com

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Review»Little FictionsElbowPolydor

»The UpstartsBy Brad StoneTransworld

This is the seventh studio album from the Mercury winners and is the follow-up to 2014’s The Take Off And Landing Of Everything.Recorded in Scotland and Manchester and featuring session drummer Alex Reeves, string players from the Hallé Orchestra, backing vocals from Hallé Ancoats Community Choir and London Contemporary Voices, Little Fictions is the fourth album to be produced by Craig Potter.Frontman Guy Garvey has described the album as quite chunky and beat-heavy and states that the themes range from concerns for the world to falling in love.The lead single, Magnificent (She Says) is a great example of the joyous, uplifting sounds the band can produce.

In 2007, the crash had Wall Street and Silicon Valley reeling. The original renegades like Steve Jobs were now the establishment, and tech had become a way of life for suburban mums as much as for visionaries. The Valley was ready for the new revolution. Enter The Upstarts. Genius entrepreneurs with no lack of self-confidence created companies that turned our expectations on their heads. Travis Kalanick of Uber and Brian Chesky of Airbnb are just two of the disruptors Brad Stone examines in this fly-on-the-wall look at the intersection of tech, business, and culture.With unprecedented access to all the key players, Stone illuminates the smart, driven and often comically flawed people who are upending industries and changing the way we all live and work.

Ship Management International Issue 66 March/April 2017

books, theatre, dining, events, culture, films, festival, music, art, dvd, wine

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»Tracey Emin and William Blake in FocusShowing now until 3rd September, 2017www.tate.org.uk

»4 3 2 1By Paul AusterFaber

»Veeraswamywww.veeraswamy.comLondon

This free exhibition compares important works by Tracey Emin and William Blake, demonstrating a shared concern with birth, death and spirituality.At the heart is one of Britain’s most renowned artworks of the past 20 years, Tracey Emin’s My Bed 1998, which offers an unflinching self-portait in which the artist herself is absent. It will be shown, along with drawings by Emin from the Tate Collection, alongside those of visionary British poet and artist William Blake. They include The Blasphemer (c.1800) and The Crucifixion: Behold Thy Mother (c.1805).

On 3rd March, 1947 in the maternity ward of Beth Israel Hospital, New Jersey, Archibald Isaac Ferguson, the only son of Rose and Stanley Ferguson, is born.From that single beginning, Ferguson’s life will take four simultaneous and independent fictional paths. Four Fergusons made of the same genetic material, four boys who are the same boy, will go on to lead four parallel and entirely different lives. Family fortunes diverge. Loves and friendships and intellectual passions contrast. Chapter by chapter, the rotating narratives evolve into an elaborate dance of inner worlds enfolded within the outer forces of history as, one by one, the intimate plot of each Ferguson’s story rushes on across the tumultuous and fractured terrain of mid-20th century America.A boy grows up-again and again and again…

The UK’s oldest Indian restaurant has just been awarded its first Michelin Star, 90 years after it opened in 1926.Veeraswamy, which overlooks London’s Regent Street, serves up classical Indian cuisine with a fine dining edge. The menu is constantly adapted according to the seasons and along with superb classical cuisine is a fabulous selection of dishes from the clay ovens of the North West frontier – the tandoors.First course dishes include such delights as Tandoori Green Prawn while mains include Roast Duck Vindaloo. For dessert there is Rose Kulfi – Indian ice cream flavoured with fresh rose.

Issue 66 March/April 2017 Ship Management International

Lifestyle

This is the time of year when travel brochures land on our doormats with a satisfactory thump, to tickle our whim and fancy, and with felicitous prose further inflame an untreatable and idiopathic case of

Francophilia. Sun! Sea! Sancerre! The time of year when we plan our holidays: whether to drool over beauteous Tuscan landscapes, pistachio gelato and rustic focaccia ovens in Liguria, or to squint into maps and guidebooks while pootling around ruins of stone monuments. Holidays that pass happily without any incident, except for the verbal tussle with the fat and florid couple from Baden-Wurttemberg who fought you for the sun loungers in St Barths.

But what if well-trodden destinations - with their villas and eternity pools, spectacular views out to remote atolls, turbocharged nightlife, shopping and entertainment - have become too homogenised? What if, like Andy McGinlay - a Scottish teacher based in Saudi Arabia - your wandering heart hankers to leave behind the safe, comfortable and familiar to venture into the unknown, the unpredictable and dangerous? McGinlay told Barcroft Media: “I never feel more alive than when I step off the plane in some far-flung war zone or despotic country. It’s a dangerous cocktail of adrenaline and I live for this feeling!”

When President George W Bush branded Iran, Iraq and North Korea as the “axis of evil”, McGinlay immediately booked his flights there. “Many of these so-called dangerous countries do turn out to be quite friendly,” he said. “They receive so few visitors that the tourists who do venture there are made to feel extra welcome.” He was kidnapped in New Delhi, and in Syria was arrested for suspected spying.

In “How Stuff Works: Adventure”, Charles Bryant wrote: “A country may be war-torn and full of desperate marauders. The problem is that some places are still worth visiting despite the dangers. Not every traveller wants an umbrella drink in their hand and their toes in the sand.”

Adventure travel, sometimes described as extreme tourism, explores unusual and out-of-the-ordinary destinations, including war zones, tribal hotspots that modern life forgot and

Do you have wi-fi, indoor plumbing and does anyone speak English around here?

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By Margie Collins

Lifestyle

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passed by, dystopian countries torn by violence, chaos and political strife, but have a tantalising allure. Adventure travellers to countries in conflict and turmoil may find themselves engaged in activities that include perceived and actual risk. And that, perhaps, is the intractable draw.

“It’s a dangerous business going out your door. You step into the road and if you don’t keep your feet, there’s no telling where you might be swept off to,” wrote JRR Tolkien. More of us are travelling more. The travel agents’ association ABTA said the number of Britons taking holidays increased last year; early bookings for summer 2017 are already up 11% year-on-year - despite disease outbreaks, natural disasters and tourists rejecting traditional European holiday destinations following terrorist atrocities in Paris, Nice, Munich, Berlin and Brussels. Egypt and Tunisia - once favourite beach-resort destinations - are for the time being virtually no-go areas for British tourists, thanks to travel restrictions surrounding poor security and screaming terror-headlines. But while it’s not going to topple long-haul destinations - Australia, New Zealand, the Far East, North America - off the popular charts any time soon, adventure travel is on the up.

Paula Froelich, Yahoo Travel Editor, tells why travelling to far-flung places, with a bomb going off in the distance, sets her pulse racing. “I do it to learn because it’s interesting. I’d rather go by camel than car. It makes me come alive and the people you meet are not what you expected or see in the news.”

At a recent Airbnb event, John Simpson, the BBC’s veteran World Affairs Editor, urged the audience to visit a “must-see destination”. He said: “I’d advise everyone to go on holiday in Afghanistan because it’s beautiful and fantastic.” Airbnb advertises 60 homes for rent - in Kabul and Kandahar - for $12 each a night.

Afghanistan?! Where resurgent Taliban continue to lay siege to major cities; American troops are still fighting a campaign now in its 17th year which has cost the American purse over £1.6 trillion, where over 450 British servicemen and women and 2,400 American soldiers have lost their lives? It was reported, in 2016, that a bus carrying 11 American, German and British tourists, accompanied by a military escort, was hit by a rocket fired by Taliban insurgents

on the road between the historical sites of Bamiyan and Herat. Six people were injured.

Last year, Anatoly Aronov’s Megapolis travel company launched the “Assad Tour” of Syria, a country brutally riven by civil war since 2011, with hundreds of thousands of civilians dead and over six million refugees seeking asylum or living precarious lives in Jordanian and Lebanese camps. “We will be

1km away from the front. It’s safe. On no occasion will we be giving weapons to tourists,” Aronov said.

Iran, which welcomed over five million tourists in 2015, is on the itineraries of a few adventure travel companies and had a significant exhibitor presence this year at ITB Berlin, the world’s leading travel trade show. “Iran’s image of being terrorist-driven, nuclear-weapon holding, burka-clad society is something that’s been driven by western media. While breaking the rules of the Islamic society (drinking alcohol, taking drugs and engaging in sexual activity with locals) can result in deportation, arrest or worse, general travel here is safe,” said Borders of Adventure. “Don’t assume you can break any rules and play the

dumb tourist. This is an Islamic state and if you can’t play by the rules, don’t go.” Or land inside Evin Prison as guest of the Revolutionary Guard.

The battle to retake the IS-held city of Mosul in Iraq continues, with heavy casualties on both sides. One of the oldest cradles of civilisations, the historic country of Babylon and Mesopotamia, Iraq is one of the most popular adventure-travel destinations today.

Why risk life and limb in Somalia, the Democratic Republic of the Congo, Sudan, Honduras and other benighted countries, rogue states, theocracies and dictatorships where kidnappings, homicide, civil unrest and violence are rife? Leyla, a foreign correspondent, writes in her blog: “This is your chance to get in before every shred of authenticity is wiped away. Maybe you like living on the edge and have a case of the it-won’t-happen-to-me syndrome.”

Adrenaline junkies and thrill-seekers with cast-iron derring-do travel to some of the most dangerous places on earth because they are also seen as some of the most desirable destinations, sizzling with menace but also bristling with excitement. Once the exclusive preserve of journalists, humanitarians and NGOs, travel to these places is now

Issue 66 March/April 2017 Ship Management International

“I never feel more alive than when I step off the plane in some far-flung war zone or despotic country. It’s a dangerous cocktail of adrenaline and I live for this feeling!”Andy McGinlay

Lifestyle

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easier than ever, and adventure travel companies, with immense knowledge and experience of these places, have made them accessible with intelligently curated itineraries and networks of local guides and security personnel.

Wild Frontiers runs trips to Iraqi Kurdistan, the ‘Stans’ of central Asia, sub-Saharan Africa including the Democratic Republic of the Congo and Rwanda, to Latin America including El Salvador and Honduras. “We explain to people the risk assessments we make, but we leave it up to individuals to make up their own mind as to whether that is a risk that they are prepared to make,” WF’s Marc Leaderman told NPR public radio.

Untamed Borders offers access to some of the world’s most inaccessible and inhospitable places, including areas in Afghanistan that have never been taken by the Taliban: Herat, the lakes of Band-e-Amir, the remote Wakhan Corridor of mountain valleys where the Pamir Range meets the Hindu Kush. Itineraries also include Iraq’s mountainous terrain in semi-autonomous Kurdistan, the Republic of Tuva in southern Siberia, Iran, the heart of Genghis Khan’s Karakorum in Mongolia, Mogadishu and Puntland, Dagestan and Chechnya. They take people to destinations they would find it difficult - or impossible - to arrange themselves.

“We guide men and women, of all ages, some in their 70s, from all professions, who love travel, want to broaden their knowledge and horizons, and know that there’s always much more to a country than the stereotype. These are people with some amount of disposable income as our destinations are not budget trips by any stretch,” James Willcox, co-founder with Kausar Hussain of Untamed Borders, told SMI.

Hussain and Willcox are largely credited with bringing ski tourism to Afghanistan when they became the first company to take tourists to the mountains of Bamiyan, the Panjshir Valley, Badakshan province in the far northeast and to Salang Pass. Their Afghan Ski Challenge is a “race through some of the most beautiful landscape.” So long as you don’t expect Gstaad or Whistler apres-ski jollies, Afghanistan, say Hussain and Willcox, is the “new frontier for skiing and boarding.”

Untamed Borders’ trips to Mogadishu, the autonomous region of Somaliland and Puntland include visits to the bombed-out Italian colonial waterfront, beaches and local markets and

offer plenty of interaction with locals. “The trip - from one to three in a group - is expensive, but comes with a high level of security, with a four-man detail and a translator/fixer,” said Willcox. A highlight is a meal in a local restaurant that “serves excellent camel burgers.”

“We want clients to feel they’re on the edge of a very dangerous

situation,” said Rick Sweeney to Departures magazine. “There’s definitely risk and a lot of waivers involved.” Sweeney, a former security professional, founded War Zone Tours, which organises ‘extreme travel’ for very small groups to Iraq, Sudan, Somalia and the DRC, and to cities in Mexico which are run by veritable armies, drug lords and traffickers, and networks of kidnappers and assassins. “We’re very clear,” said Sweeney, “I’m not going to give you an AK-47; we’re not there to get shot at.”

Before you buy a flak jacket and ballistic helmet, check out the travel advice on the Foreign Office website, which ranks levels of travellers’ safety in foreign countries and issues advice on hotspots to avoid. Likewise the US State Department’s website on country-specific travel warnings and alerts.

Travel operators always stress they take utmost care in avoiding conflict areas. But before packing your bags, it is essential to research your destination, to have a plan of action for minimising risks, and to purchase the right travel insurance. At all times obey local laws and respect your host country’s culture, religion and dress codes. Avoid making snarky comments: some peoples are irony-deficient and British humour doesn’t always travel well.

“Toto,” said Dorothy in The Wizard of Oz, “I have a feeling we’re not in Kansas anymore.” Perhaps our hermetically sealed lives need a little turbulence and that to appreciate the miracle of this wondrous world is also to explore the risky and unknown. “I haven’t been everywhere,” said the writer Susan Sontag. “But it’s on my list.” l

Ship Management International Issue 66 March/April 2017

1/ Off the coast of Puntland. James Willcox pictured on left2/ Female Marathon winners - Photo by Kausar Hussain3/ Guests after marathon - Photo by Kausar Hussain

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