Page 29: of Maritime Reporter Magazine (June 2015)

U.S. Shipbuilding is ? ring on all cylinders, driven primarily by the construction of new

Brown water and Green water vessels, with a few Blue water vessels as well. Dr. Kumar said the the role of the United States as a swing player in world energy markets should create a buoyant U.S. Mari- time Market for the next 20 to 30 years.

any industry, shipping included. I review

In your opinion, what was the genesis of private these regularly at the sub-market levels equity money in the ship- to get a good grasp of what to expect and ping industry.

make my own projections.

Photo: Greg Trauthwein

There was a big in? ux of private eq- One other important factor I keep track uity investment in shipping. My simple is ship’s speed. The impact of changes in theory is that they were looking for ship’s speed on tonnage supply is phe- quick returns. Now, upon seeing the out- nomenal and often doesn’t get the rec-

Got Your Asset Covered?

comes, they are attempting to limit their ognition it deserves. Look at oil tankers. exposure through consolidation or even There’s a recently released report that market exit strategies. I think they have says if VLCCs increase their speed from learned that shipping is not the easy bo- 11 knots to 14 knots you are putting 18% nanza they expected. of the current VLCC ? eet out of business (assuming the cargo volume does not

What are the key economic change.) Containerships are operating at and statistical indica- 16 to 18 knots right now. What happens tors that you monitor to if they decide to go back to 21 or even 24 gauge the health of the knot speeds based on the lower oil price? shipping industry.

I think the current woes of liner compa- We touched on the GDP factor, which nies would only multiply if they were to is number one. There is a rough rule of speed up their ships. thumb that if you know the GDP growth, the consumer goods being traded is

Do you see them starting

Baker Marine Solutions roughly twice that level. That was the to speed up again?

historic yardstick, but now it’s more like

That is my concern whenever there is 1.5 times the GDP.

a drop in bunker prices – particularly DP Assurance - FMEA Studies, Proving and Annual ?

trials attendance, DP Operations Manuals in the liner market where one may be

Why is that?

tempted to seek a market niche or ser- ? Vessel Inspections - OCIMF-OVID, IMCA, and

Global economic growth is like a ris- vice differentiation. What is to stop them AWO - RCP ing tide that lifts all nations and their from marketing “faster services” as a trading requirements. So, over the years, competitive strategy? It all comes down ?

Marine Representation - Offshore and Onshore world trade patterns have changed and to market discipline, and this indus- also what are being traded. These dy- ? Marine Warranty Surveys - load/off load try has shown that discipline is not our namics have impacted the variables that strong point1 It is rather ironic by the supervision, as well as marine operations oversight dictate world trade, and we have to make way because when I speak with budding ?

SIMOPS - Plan Development and Execution adjustments to our historic assumptions mariners (my students) my mantra is al- based on evidence and market outcomes. ways the importance of “self-discipline”

This is one such adjustment.

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OK. Getting back to the As you mentioned, sup-

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Marine consulting, survey, and for any industry, yet for most important?

Assurance Solutions the shipping market as a

Certainly GDP, particularly what is 17438 Hard Hat Drive whole there always seems going on in the OECD and non-OECD

Covington, LA 70435 to be perpetually out of countries, and most certainly what is go- balance. Is there any- 985-845-9439 ing on in China and the other BRIC na- www.bakermarinesolutions.com thing you see that could tions. This is from a broad macro level. bring it back to balance.

From a micro level, supply and de- I see Adam Smith’s “Invisible Hand”

Providing Solutions for the Marine & Energy Industries mand data are fundamental to analyzing here perhaps more than most other in- www.marinelink.com 29

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