Tanker shipping is a rewarding industry. The INTERTANKO chairmanship is one of its most rewarding positions.

You are elected by your peers to represent them at meetings with legislators, oil companies, class societies, media and other shipping interests.

Lars Carlsson, Chairman of INTERTANKO

You are in regular contact with shipping's leading people and organisations, shaping the tanker industry to make it safer and more fulfilling.

Yes, it is time consuming. Executive positions with organisations take you away from your own corporate activities. Such conflicting demands make the job a challenging one. Yet it is a challenge borne, as one of my colleagues on INTERTANKO's Executive Committee has often said, out of a keen sense of duty. And from duty comes reward.

These rewards are shared by all of those who are active in tanker shipping, members and non-members alike. Moreover, our achievements at INTERTANKO regularly benefit those who operate in other areas of the maritime industry as well. This is a good thing, because no sector of shipping can operate properly in isolation. Shipping is a truly global industry, and this is as it should be.

Tanker shipping is the epitome of a global industry. Tanker operators have a global outlook, as do their customers - the oil companies. With this global approach comes balance. In the past, individual interests were able to unduly influence the industry, particularly within domestic markets. Today, thanks to increasingly uniform, global rules, we operate in a market independent from the wishes of individual corporations. INTERTANKO believes that this is a good thing, bringing rewards to all.

Some rewards remain elusive. In spite of our hard work, the image of the tanker industry is still in need of improvement. The world today runs on cheap energy. Energy is cheap partly because the tanker industry transports oil half way around the world for a mere one to two dollars per barrel. We do this safely and efficiently. We do it with very few accidents and with ever-improving reliability. Yet we do not yet receive the recognition we deserve.

A handful of high-profile and widely-reported accidents have tarred the tanker industry. We have a reputation as polluters of oceans and destroyers of coast lines. This is unjustified.

Transport by sea can be hazardous. Nature regularly unleashes its fury on the transport industry, be it at sea, in the air or on land. The sea in particular can be a very harsh environment, and once in a while it claims one of our ships. Tanker shipping works hard to reduce such incidents, but it cannot always win against nature. We also work hard to reduce human errors, but we cannot always win against human nature. So accidents do happen.

When they do, we as an industry act to limit the damage and we act to avoid repetition. We study each incident thoroughly and determine how we can prevent any reoccurrence. It is rare for the same accident to happen twice in tanker shipping. This is the reward for resolute action following accidents.

But if we are to continue to reap these rewards, it is essential that the shipping and oil industries are united in their efforts to reduce accidents at sea. Our work is pointless if individual ships and individual ship-owners are allowed to cut corners in a bid to reduce costs and compete with more conscientious shipping companies. Let us not forget that behind each substandard ship there is usually a sub-standard owner, a sub-standard crew, a sub-standard insurer, a sub-standard charterer, a sub-standard class society, and substandard surveyors and inspectors.

"Our achievements at INTERTANKO regularly benefit those who operate in other areas of the maritime industry as well"

Responsibility
We should not dwell on the negative, however. While INTERTANKO will play its role in identifying sub-standard companies in shipping and bringing them to book, it will also give encouragement to those companies involved in oil shipping who act with integrity and with professionalism. Good performance deserves to be rewarded.

Yet INTERTANKO should not be left to do this alone. The chain of responsibility stretches beyond tanker operators. We are only one player in the safe transport of oil. It is important that each individual link in the chain of responsibility supports the efforts made to improve oil shipping. Scrupulous shipowners should be supported by oil companies and traders. They should be given preference over sub-standard operators. Good practice should be rewarded with more business.

Insurance companies and classification societies too must play their part, initiating and supporting schemes aimed at improving the quality of shipping.

Legislators and regulators must work together with the maritime industry. Too often, a co-operative aspect has been missing from the approach taken by lawmakers to shipping, leading to measures that have proved to counter-productive or unpractical. Co-operation will bring better rewards for all sides.

INTERTANKO aims to improve quality and safety within tanker shipping, reducing accidents further still and enhancing the reputation of the tanker industry. It has repeatedly invited those involved with oil shipping to accept their place in the chain of responsibility and help achieve a wider understanding of the tanker industry is as leading contributor to the world's economic health as well as a responsible and reliable partner to the world's leading industries.

Clearing the road ahead
If we are to achieve our aims, we must create a transparent industry. What is transparent can be measured and evaluated fairly on its merits. INTERTANKO will be working to improve transparency in the tanker industry and in those industries that impact upon us.

"If there is one single factor that will help improve shipping, it is transparency"

Some will protest that complete transparency is unattainable. Companies play their commercial cards close to their chest for good reasons. At the same time, the oil tanker business is complicated and can be difficult to penetrate. There are numerous reasons why transparency is not easily achieved. Yet an absence of transparency invites cheating and creates room for rules to be bent. Ambiguity leaves the door open for sub-standard shipping.

Transparency in the tanker sector will encourage competition, which will in turn lead to higher efficiency and reduced risks. If there is one single factor that will help improve shipping, it is transparency.

INTERTANKO is well-placed to help create this transparency. Nobody knows more about tankers than we do. In many ways, INTERTANKO is like a university. We have access to the leading minds in the tanker industry. We work to disseminate knowledge. We stimulate research and discussion. We publish papers, books and reports. We organise seminars and conferences. INTERTANKO is the international hub of tanker shipping knowledge.

INTERTANKO currently employs 25 dedicated and skilled individuals who work tirelessly for the benefit of the tanker industry. They are specialists in their respective fields, and are constantly in close contact with other specialists in other organisations and with experts working within member companies.

INTERTANKO's committees and panels afford members and associate members the opportunity to identify and solve problems. They allow members to provide considered and authoritative responses to proposed regulations, tackle obstacles and restrictions within the industry, and coordinate reactions to commercial opportunities.

On each INTERTANKO committee and regional panel, you will find some of the world's most respected specialists in a range of fields. These people are the organisation's heart and soul. They are evidence of one of INTERTANKO's primary driving forces - the dissemination of information. Experience is spread among members, both young and old. Leaders in business and technology share their successes and their failures with others in the tanker sector. Lessons are learned and as a result shipping executives are better equipped to face the demands of an increasingly demanding commercial environment.

"On each INTERTANKO committee and regional panel, you will find some of the world's most respected specialists in a range of fields. These people are the organisation's heart and soul"

Long-term thinking
I have been a shipping man for more than 35 years. In that time, the industry has improved, and never has that improvement been more evident than during the past few years. We are starting to reap the rewards of decades of hard work. If we are to continue to reap rewards, we must continue to think long term.

Investment in safe tankers is a long-term affair. The value of a tanker depreciates over 20 to 25 years and a new ship may have to trade for 10 to 15 years before its initial cost is recouped. Yet, new legislation may well force tanker owners to phase out ships well before their 'best by date', possibly before their newbuild costs have been recovered. This may encourage companies to build simpler and cheaper ships. And thanks to blanket legislation, these new ships may be mistaken as being equal or superior to older yet stouter ships.

"We must understand that not all ships are equal. And it must be made clear, particularly to charterers, that not all ships are suited to all voyages"

Nobody compares BMWs or Volvos with low-budget models. We all know that high-quality cars cost more but last longer and carry with them less risk of technical problems and costly repairs. Ships are no different. Tankers with light scantlings cannot be expected to be as durable as more robust ships.

It is in everyone's interest that this is recognised. We should not outlaw lighter, cheaper ships, just as we do not outlaw cheaper cars. But we must consider in each instance whether the ship is suited to the proposed voyage. Lighter, cheaper ships have their place, but they must be employed sensibly. We must learn to differentiate. We must understand that not all ships are equal. And it must be made clear, particularly to charterers, that not all ships are suited to all voyages, and that not all ships should be rewarded with all voyages.

From personal experience, I have learned that an additional investment of only a few percentage points at the newbuilding stage, coupled with a continuous maintenance regime, is an inexpensive way of extending a ship's life in service. A quality ship that is well maintained gives safe voyages, year after year. Moreover, good ships attract good crews.

Yo-yo market
The tanker markets have been good over the last two years and our members have had an opportunity to generate healthy earnings on their investments. However, after the rewards come the penalties.

A slowing world economy combined with the large number of ships ordered during the good years have contributed to overcapacity in the market at the time of writing. The depressed market will lead to losses and hard decisions will have to be made whether to scrap or sell ships at a time when prices have slumped. Conversely, those looking to buy ships will find them at attractive rates.

Lean times bring with them the temptation to transgress. INTERTANKO urges the tanker industry to avoid the pitfalls of a dip in standards. We must make it impossible, or at the very least unattractive, for companies to postpone repairs or to trade with inexperienced (and therefore cheap) crews. Everyone in the chain of responsibility should work together to reward responsible owners and drive out the cheats.

In a depressed freight market, new-buildings are more difficult to justify and orders slump in the face of competition from lower-cost existing ships. In my opinion this presents shipyards with a golden opportunity. They should use this time to develop better and safer ships, rather than reduce the standards of the ships they are currently building to compete on price.

INTERTANKO will do its share to improve ship standards and we shall co-operate with other organisations to achieve the this.

And finally...
I would like to salute the dedicated team of people who make INTERTANKO what it is. Their enthusiasm, pride and competence is a credit to the organisation. We should all help their efforts by supporting them and giving them the benefit of both our experience and our networks. After all, we reap the rewards of their hard work.

I cannot close without expressing the Association’s gratitude to its immediate past Chairman, Westye Høegh, who stood down in April last year. Westye was at INTERTANKO's helm during the testing times that followed the loss of the Erika. He was not found wanting and the industry owes him a debt of gratitude. Westye is now an honorary INTERTANKO member and he continues to be active in the organisation.

Lastly, a word of gratitude to Peter Swift, INTERTANKO's Managing Director and his staff, who make the job of chairman so rewarding thanks to their support and competence.

Lars Carlsson
Chairman of INTERTANKO
February 2002