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Monday, December 18, 2017

POINTS OF VIEW

The last ten or fifteen years have seen a huge consolidation among owners and operators in the tanker industry. Bigger fleets mean cheaper overheads and more competitive operating costs; each such fleet has a weightier commercial presence in the spot market; a big fleet has a profile and a presence that is of interest on the stock markets – although even the biggest listed shipping companies are considered small-fry to the investment community.

The biggest shipping companies have grown and grown, increasing their presence in the market place many times over. One of the best examples of this consolidating process is Frontline, which embarked in the 1990s on a succession of clever and well-timed corporate transactions (LOF, ICB Shipping, GoldenOcean), vessel purchases (a huge newbuilding programme and other purchases particularly from Osprey, Mosvold, Bergesen) and joint ventures (with OMI on suezmaxes, with Euronav and OSG on VLCCs). What started off as the Swedish operator of eight suezmax OBOS has in just eight years, thanks to the vision of its widely-respected management team, evolved into the operator of the largest and most modern tanker fleet in the world, controlling 39 VLCCs and 27 suezmaxes.

Recent contacts with France show that this country provides an excellent example of just how much consolidation in the shipping and oil industries has changed the face of the industry. The list of the main French charterers has shrunk since the 1980s from CFR, Total, Elf, French BP, French Shell, to just TotalFinaElf, and even there, according to one Paris broker, many of the key relevant decisions are taken outside France.

Talking of brokers, the list of French brokers has also shrunk - the tanker market, for instance, is now covered by just two French brokers (Barry Rogliano Salles and Cargo Maritime/Socomet) in contrast to the pre-consolidation markets of the mid-1980s which supported BBW, BRS, Cargo Maritime, Petrobulk, Socomet.

The crucial difference for the Paris-based brokers is that, like their colleagues (competitors?) in Oslo, they have seen their domestic market shrink due to consolidation, meaning that “now there are no frontiers … we service the international market as well as the French market.”

The list of French ship owners and operators has shrunk dramatically too. More than 60 French ownership companies have disappeared since the 1950s, including names invoking a past age such as Lucien Rodrigues Ely, Mory et Cie, Societe Francaise des Transports Petroliers, Societe Navale Caennaise.

Of course many of these ‘disappeared’ entities continue as part of a larger surviving company, leaving France still with a substantial and thriving shipping community - the French Shipowners’ Association shows some 49 French shipowners today. But this includes relatively few tanker operations - key French tanker players are Brostrom Tankers, Fouquet Sacop, Navale Francaise, Petromarine, SOCATRA.

But France’s post-consolidation shipping operations are competing vigorously and successfully in the international markets, with a dynamic national shipowners’ association representing them at national and at international level. It is this vigour and dynamism, as well as sheer size, that allows any shipping company to offer the flexible, reliable and competitive service necessary to achieve success.