Discussions at different panels across the day covered everything from trading patterns and slow steaming, to bad bunkers and insurance.
Gary Vogel, ceo of Eagle Bulk noted that fuel economics would be impacting drybulk trade patterns- with scrubber equipped vessels more suited for longer haul voyages with more time at sea. Vessels seeing higher fuel prices, presumably ultra-low sulphur gas oil or expensive blends, would be better suited for shorter trades, with relatively greater proportions of port time.
A different angle on shifting trade patterns was evident at the chemical tankers session with Hans Feringa, ceo of Team Tankers pointed out that MR tankers, one of the shipping market’s strong sectors, could likely switch out of the chem sector, as they are needed to inefficiently shuttle various grades of refined fuels between refineries and bunkering locations.
For container vessels, George Youroukos, executive chairman of Global Ship Lease took a positive view of IMO 2020 - but for different reasons. He noted that containerships, with bigger engines than other vessels of similar dwt, spend more time at sea (relative to other sectors). He suggested that the sector would likely see “slow steaming” in order to save fuel, which would have the impact of reducing the “effective supply”.His suggestion that the fleet would slow down by 1 – 2 knots, with each knot of slowdown effectively removing 5% from the fleet, with the slower speeds “absorbing some of the capacity that exists”.
Another angle on IMO2020 came in a lunchtime speech from Intertanko Chairman Paolo d’Amico said that optional discharge ports previously perfunctorily in charter parties now required detailed scrutiny. “Compliant fuel may not be available at all ports.”
Fresh answers to questions of scrubber investment came in an exchange between Hamish Norton, president of Star Bulk Carriers and Ioannis Zafirakis, chief strategy officer at Diana Shipping. Norton repeated a point that he’s made before- that scrubber investment was viewed as a hedge against potentially much higher fuel prices. Zafirakis suggested that speculation about the prices of fuel was not the primary business of the company, and not a rationale for investment.
A representative from “Big Oil”, John LaRese, from ExxonMobil Marine Fuels, highlighted the careful steps that his company was taking to provide compliant fuels post 1 January 2020, and urged shipowners to work with reliable suppliers (in the face of unknowns with newly introduced blends).
The insurance industry representative on the panel, Joseph Hughes, chairman and ceo of the American Club, noted that the legal and insurance companies would suddenly get very busy if there were a casualty tied to “bad bunkers”.