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Wednesday, August 23, 2017

Tanker Summit Round-up

A full-day Tanker Summit, held as part of INTERTANKO’s Annual Tanker Event, saw 200 delegates from all over the world gather in Houston to hear keynote speeches and take part in three panel discussions with leading figures from the shipping industry. 

Here are the key messages of the day:

Keynote speeches
Admiral Paul Zukunft, Commandant of the US Coast Guard, and Prof Ian Goldin, Professor of Globalisation & Development at Oxford University, delivered keynote speeches at INTERTANKO’s Tanker Summit.

Admiral Zukunft emphasised that the over-arching role of the USCG is safeguarding waterways to facilitate commerce and at the same time mitigate risk. He added that the USCG enjoys a very collaborative relationship with the IMO, negotiating the way forward between two different standards.

Prof Goldin also looked at megatrends and the future of energy markets.

Executive summary

  • Walls are coming down everywhere - the www came into being in the same year that the Berlin Wall came down. We're in an age of discovery similar to the Renaissance 500 years ago. 
  • But there is an anti-globalisation sentiment spreading round the world which can also be anti-immigrant. This is due to a failure of people to manage our joined-up systems so that not all feel that they enjoy the benefits of globalisation.
  • There is a global leadership vacuum. Our entangled world needs joined-up leadership.

Megatrends

  • Increasing complexity in world trade flows. 
  • Life expectancy is up but fertility is falling rapidly, so stabilisation of population.
  • Migration is shaping our world and defining our future.
  • Reducing rates of investment in infrastructure in developed countries - little investment in the future. 
  • Developing economies are investing in the future. 
  • Emerging markets account for 70% of global growth.
  • Expect higher and more stable growth pulling the world economy along.
  • Explosion of the new middle class – two thirds in Asia. 
  • Changing energy mix – major decline in coal use, gas consumption rising as oil consumption falls.

Emerging risks

  • Technology is moving into our workplaces increasing unemployment.
  • Cyber risks are growing.
  • Localisation of production (3D printing, for example) will change trade patterns and volumes.
  • Rising resistance to antibiotics.

Summary

  • There are good growth prospects with opportunities, but we must learn to navigate the complexities.  
  • There will be disruptions from technology, regulation, ecology and climate change. There will also be a threat from disintermediation, so there is a need for agility, diversification, modernisation, and leadership.

Oil Companies’ Panel Discussion
Chaired by INTERTANKO Chairman Nikolas Tsakos, delegates took part in a discussion with panellists from BP Shipping USA, Chevron and SeaRiver Maritime as well as Prof Ian Goldin, Professor of Globalisation & Development at Oxford University.

Executive summary

  • Affordable energy demand will grow by up to 30% by 2040.
  • There is a shift from OECD to developing economies with India expected to be the largest source of growth.
  • Our carbon footprint will go down. 
  • The energy mix is shifting towards low-carbon gas and renewables, with a gradual decarbonisation of the fuel mix.
  • Oil will remain the number one source of energy through 2040.
  • The pace of oil demand growth will slow.
  • Gas demand will grow by two-thirds by 2035 with LNG growing most.
  • The global fleet of cars will double by 2035, with the number of electric cars rising from 1m to 100m.
  • Oil and refined products will continue to be the pre-eminent energy sources up to 2040.
  • We are at crossroads on managing the environmental impact of shipping. 
  • How do we decarbonise shipping? The shift towards alternative energy will be evolution not revolution.
  • There will be changes in voyage patterns, optionality on voyage deviations, more ship-to-ship transfers and a continuing shift towards using ports not regularly used before. 

Key needs of oil companies

  • Increasing intolerance of spills
  • Incident-free operations
  • Compliance
  • Transparency
  • Customer service 
  • Communication
  • Engagement

Broker Panel
Four senior figures from big international US-based broking houses (Patrick Brennan of Poten, Stefanos Kazantzis of McQuilling, Scott Birtle of Clarksons and Association of Ship Brokers and Agents President Chris Young of Dietze were moderated by Harry Theochari, Global Head of Transport with law firm Norton Rose Fulbright.

Executive summary

  • There have been and still are big technological changes but relationships will remain paramount.  
  • There will be an evolution of technology to share research and analysis with clients as the availability of real-time information increases, thereby forging new relationships.
  • The future for brokers will be about thinking out of the box.
  • The fundamentals of broking are still the same. How you perform those fundamentals has changed. 
  • Brokers get paid for optimising the transaction (right ship for right cargo). Their job is to coach owner and charterer on how to approach the market. 
  • Online platforms such as BHP Billiton might be efficient but may mean you miss out on opportunities ... and the market information needed to arrive at and agree a rate will come from the brokers ... but what about post-fixture service?
  • Can brokers bring more added value such as strategic advice? Yes, but first you have to understand your client. 

Poll result
Delegates were asked: Is there is a future for shipbrokers? Yes 69%; No 19%; Don’t Know 12%. 

Panel - environmental compliance and enforcement
Delegates took part in a unique gathering of the US Department of Justice, the USCG's Inspections & Compliance division, the Chamber of Shipping of America and a major Member’s Director of Environmental Compliance, moderated by shipping lawyer Jeanne Grasso of Blank Rome LLP.

Executive summary

  • People make the difference. We all do it by working together with the regulators. That is the only way we will get there. 
  • The USCG's new E-zero designation will include items such as being enrolled in Qualship 21, having zero MARPOL detentions and having ballast water management equipment on board or equivalent-approved AMS.
  • Owners need a sustainable support system for new equipment such as BWM systems. In training and fulfilment there is a gap that should be filled by the equipment vendor but is not. This is something that the authorities should take into account when considering compliance enforcement.
  • What can a company do to convince the US DoJ not to prosecute? In a word, co-operation. Acknowledge there may be a problem. Moreover, companies can do more to start taking these issues seriously before there is an incident: encourage the crew that they can make a mistake and talk about it to the shipowner rather than covering it up.

Poll result
Delegates were asked: Do you feel you get fair treatment in an enforcement action in the US? Yes 44%; No 29%; Maybe 26%.

Contact: Bill Box