The debate is definitely turning environmental. I am not necessarily referring to discussions over green house gas regulations and market-based measures, although they are important. What I am alluding to is the growing relationship the industry is starting to have with the notion that Eco-Ships could be the panacea the industry has been waiting for.

And so they may be. After all, bunker fuel is seemingly more valuable than liquid gold and as was correctly pointed out at our Shipping Association Round Table, all the ships on the water now or those being delivered, are in fact old technology and the industry needs to seriously consider returning to the drawing board and completely redesigning ship forms that are capable of delivering the fuel savings the industry needs.

But I detect a dilemma. This would mean a massive re-ordering spree and isn’t that the last thing the shipping industry needs right now. And at a time when the banks are shut, taising the cash may be a problem. As one Greek ship owner forcefully told me, owners must move away from re-ordering and if they want additional tonnage then they should look to the burgeoning second hand markets. Good point, but you also have to realise that if you order a ship from a shipyard you not only get a new ship but you don’t have to take delivery for up to three years. A purchase from the second hand market is good news if you can stump up the readies and take delivery tomorrow.

But back to Eco-Ships. I hark back to my comment in the last issue which referred to the volte face by Maersk over its 20+ options for the much heralded and highly eco-friendly EEE class containerships. The market has altered to the extent that this shipping giant has realised that profit still has to come first. And it does.  And while the dash may be on to drive more ships up the demolition beaches of India and Bangladesh – a viable prospect for owners of ageing tonnage at today’s inflating scrap prices -  will a move to eco-friendly ships really happen as quickly as some say is needed? Scrapping can’t really happen any faster and the last thing the industry is calling for is new orders. And what if the oil price falls? Well it could I suppose.

Onto something a little less controversial. Piracy. Yes the inability of the shipping industry (sorry, replace that with the international community) to find a workable and durable solution to this problem, has caused consternation in some camps. That erstwhile blogger Clay Maitland has been at it again pointing the accusing finger at the establishment for failing to stand up for what is right and to do something about stopping these brigands once and for all. Clay used the opening session of the recent CMA conference to vocally highlight his concerns over this issue and it was well-placed when you consider the droves of USCG officials present in the audience.

He also used his highly enjoyable London press lunch to re-emphasise the points again. But, surely it has been established that Somali piracy is an international issue which was why at least one prominent shipping trade association president managed to persuade the then IMO Secretary General to take the issue of piracy to the UN Security Council in the first place. And what of the droves of USCG officials, rubbing their ears after Clay’s opening verbal vollies. Has anything come of that?

As if we didn’t have enough to worry about.

Happy reading

Sean Moloney

Like so many companies in its sector, Nordic Tankers has been feeling the pressure of low freight rates and glum market conditions but hope is on the horizon for the Copenhagen stock exchange listed company, which has found a viable solution to its high debt position through the decision to divide the company into two – selling its chemical tankers business to a company controlled by European investment firm Triton, while arranging a loan repayment freeze (until March 2013) for its other assets, as agreed with its creditors, Nordea and Danish Ship Finance.

Though the new firm will operate under the Nordic Tankers brand with CEO Tommy Thomsen at its helm, the product tanker activities will stay in the listed entity, with a change of name from “Nordic Tankers A/S” to “Nordic Shipholding A/S”. In future, Nordic Tankers will become a tonnage provider, through a fleet of six product tankers (37,000dwt-73,000dwt).

This restructuring has occurred as fellow Danish shipping giant Torm faces the consequences of poor shipping markets and plunging share prices which have resulted in debts of $1.87 billion for the firm – sobering circumstances which highlight the truly testing times the tanker industry must face.

Describing the challenges of the last 12 months for Nordic Tankers, Mr Thomsen said: “It’s been a difficult year. It’s been challenging because of the poor market conditions and for tankers in general, but particularly for chemical tankers, it’s been tough. But under the circumstances, we are happy that, for Nordic Tankers, we have been able to keep what we estimated in terms of expectations for the year – the communicated expectations for 2011 were fulfilled, as predicted and we were able to maintain that as the year progressed.”

The Cyprus maritime cluster remains a force to be reckoned with as positive factors, including a favourable corporate tax rate of 10%; respected ship registry (white listed on both the Paris and Tokyo MOUs on Port State Control); modern legal, accounting and banking services and a supportive, close-knit shipping community, continue to retain ex-pats and native shipping professionals alike.

Describing the impact of the financial crisis on the Cypriot shipping community, Thomas Kazakos, Director General, Cyprus Shipping Chamber (CSC), said that although times are hard, owing to shipping companies actively re-grouping their budget controls, expansion policies, refinancing and extension of ship building loans etcetera, his members have worked hard to ensure they will not need to “par down” their activities and thankfully, the CSC has not lost a single member in the last three years. “The vast majority of companies have managed to, so far, take the negative impact of the crisis as well as the freight rates scenario. Yes, we have been affected as we are a ship owning community at large but our members have become more careful in planning their daily operations,” he said.

A respected trade association, the CSC works to promote the interests of Cyprus Shipping and to further the reputation of the Cyprus flag, while also promoting and protecting the interests of its Members, on a local and international basis. A major issue for Mr Kazakos and his members is the Cyprus Tonnage Tax System (TTS), which was approved by the European Commission on 24^th March 2010 and allows eligible owners, charterers and managers of both Cyprus and foreign-flagged vessels, to be taxed annually, based on the net tonnage of their vessels.

Mr Kazakos said: “The new tonnage tax is the most competitive tax of its kind in Europe, if not globally and we’ve been working to implement the new law and trying to attract new tonnage to our flag and more shipping companies to Cyprus. We’ve managed to maintain all our clientele and haven’t lost a single customer – the infrastructure in Cyprus allows them to operate with the most competitive taxation system in Europe.”

Torben Skaanild cuts a competitive figure on the golf course. While the club may not point to the flag as much as he may like on the backswing, he can certainly give the ball a good tonk and his putter has a tendency to glow white hot when needed. And when it comes to battling it out on the fairways, he is up there with the best. Maybe being one step ahead is a pre-requisite of being Secretary General at BIMCO, but as he admits himself, having a good team around you is just as important. You need people to buy into your plans especially in an industry that he freely admits he loves and will do anything to defend.

He has had a long and very international career within the shipping industry, having held executive positions in Canada, The Philippines, Thailand and Hong Kong, China, before returning to Denmark to join BIMCO in 1981 as Deputy Secretary General. In 1984 he was appointed Secretary General of BIMCO, but left in 1991 to join Dr Helmut Sohmen and the World-Wide Shipping Group (now BW Group), Hong Kong, China, as a Director. His academic qualifications were obtained through The East Asiatic Co.(EAC) and its traditional commercial training programme in Business Administration, complemented with studies at the University of British Columbia/British Columbia Institute of Technology (Canada) and the Columbia University Graduate School of Business (USA).

On his return from Hong Kong, he founded Skaanild & Partners, engaging in various advisory and investment projects including the turn-around and restructuring of small to medium-sized companies. He was also involved with several companies at board level, among others as Chairman of the Board of Dynatest International A/S and associated companies.

In 2008, he returned to BIMCO in his old position as Secretary General, and Chairman of the Board of BIMCO Informatique. Externally of BIMCO he is the proprietor of Skaanild & Partners ApS and manages its investment portfolio while his non-executive positions include being a member of the board of Latin America Snack Company Ltd and a member of the IACS Board of Appeal. He is an active member and Past President of Rotary and has held various honorary positions including that of Vice-consul of Denmark. He was decorated with the title: “Commendatore of the Order of Merit of the Republic of Italy” by the President of the Republic of Italy on 2 June 1991 and was appointed Chairman of the Executive Board of the World Maritime University in February of last year.

“I returned to BIMCO in March 2008 and people asked me how I saw the industry; was it any different? And largely it really isn’t. We were still not aware at that time that we were facing a major financial crisis that hit us along with a lot of other issues such as a very large environmental agenda. So in some respects the industry has changed tremendously; it has become much more about a wider range of issues that we need to tackle, rightly or wrongly.

“I still believe that some of the new regulatory initiatives have been conquered by the environmentalists; these initiatives have been prompted out of ignorance and that is a sad thing. And a question that was asked of me when I came back was did I still believe in what I said in 1991, that if we don’t try to deal more effectively with shipping’s lack of image, we will continue to be faced with very bad legislation and over-reactions from politicians when we have accidents at sea. And we will continue to have accidents. But the public and politicians don’t see those accidents in perspective of the volume of cargo that is being carried by many ships at sea every day. So it has been an interesting four years so far,” he said.

Global jet setting, tough meetings, a lack a sleep and ever diminishing time spent with friends and loved-ones, the tell-tale signs of executive stress are rife across the shipping industry, but for one young CEO, the strains of everyday life became a near deadly warning to re-evaluate his lifestyle.

Lars Juhl, CEO of the Danish head-quartered company Scan-Trans Chartering, is one of the original founders of Scan-Trans Worldwide, which was created in 1993. With a busy lifestyle, juggling work and frequent business travel with his home life as a husband and father, Mr Juhl rarely took time to relax but 2008 brought a new and unprecedented layer of stress to the company, as the recession got its claws into the shipping industry. If this didn’t bring enough additional pressures, in May 2008,   the company’s 3,800 dwt multipurpose vessel Amiya Scan was captured by pirates, who made a ransom demand for $3million, later reduced to $1m.

The vessel was carrying a knockdown oil rig and four Russian and five Filipino seafarers was eventually returned after 30 days, but only after Scan-Trans had spent $5m total on recovery costs, having to hire armed guards to smuggle the ransom money into Nairobi, and having to hire a plane and tugboat to deliver the ransom money, which weighed a hefty 48kg – a complex process which took 10 days to complete.

This extended period of stress took its toll on Mr Juhl’s health and his hectic working life continued, until last year, as Mr Juhl himself puts it: “On 31^st October 2011, I died.” Having suffered a cardiac arrest, Mr Juhl collapsed with his wife at his side and although she had little knowledge of cardio-pulmonary resuscitation (CPR), she successfully worked to bring him back.