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Intertanko event: coping with change and what happens ‘next’

Intertanko event: coping with change and what happens ‘next’
“Sustainability” was the main topic in the sessions Intertanko’s annual gathering, just completed in New York. Highlights included the official signing of Intertanko’s Code of Conduct, a day-long seminar, and a half day of hands-on workshop meetings.

The seminar showed that sustainability means something a little bit different to each speaker, but a few common themes did emerge during the sessions, where speakers offered different views on what the industry must do to cope with ongoing changes. One recurring thread, which surfaced in multiple contexts throughout the day, is that change is a constant.

During the dialogue that was interspersed around the speakers’ talks, questions were raised about whether the members of the association are fully prepared. The attendees heard about major fundamental changes involving technologies on vessels, notably with a move to new fuels, and about the importance of new methods for extracting oil, which has brought about the growth of energy production in North America.

The information and internet realm, not surprising, was also a subject that appeared in multiple contexts where data fusion could potentially give charterers a leg up in the information wars, how the nascent “Big Data” concepts might be applied to shipping, and whether tanker fixtures could be transacted in electronic marketplaces, a discussion linked to questioning about the degree of value added by shipbrokers.  

The financial landscape was also a subject of extensive discussion, centering on the emergence of private equity at a time that banks have pulled back. Concerns were expressed about how the new investors might time their “exits” from shipping deals, and whether such sales could add undue downward pressure on a market that’s admittedly precarious, at best.

Another major thread concerned various aspects of the owner - charterer dynamic. There were several inferences spread out through the day, about the need for large integrated oil companies - companies to undertake mega-projects to increase supplies of oil and gas. Integration, or really the lack of it, was a concern as questions were raised about whether the major charterers, which increasingly includes the ranks of traders, will tolerate the extensive out-sourcing of operations, a trend likely to continue as financial owners become a permanent part of the shipping picture.

Concerns also emerged about the importance to the owners of having a financially healthy tanker business, with a further discussion about timely payments of freight, and demurrage. Vessel vetting received extensive scrutiny, with the differing philosophies of owners and charterers revealed and explored. Improvements in information management were also infused into discussions of vetting, with the suggestion that sophisticated data analytics may begin to have a profound impact on how vessel inspections, evaluations and approvals (or not) are handled.

During the seminar, a number of references were made to the existing changes in trade flows, closely intertwined with questions of landside infrastructure to support moves to or from the water’s edge. Pipeline projects in Canada could have the potential to move Canadian crude to either coast; the widening of the Panama Canal was viewed as a driver of possible LR tankers moving product out to Asian markets. China continues towards becoming the world’s largest oil importer- the possibility of China exporting products, as refinery outputs are mis-matched with demand, was also raised.

As one speaker said great fortunes are made in the tanker market by quickly reacting to changes, which will be a constant feature of the tanker markets.