Barratry, in maritime terms, is defined as an unlawful breach of duty on the part of a ship’s master or crew resulting in injury to the ship’s owner. We do not stand for such a things at Lloyd’s List. But our roving correspondents have run across a retired master who bears the name of the crime and who, it turns out, is irrepressible in questioning authority where it needs pricking in all things from regulation to finance to piracy. Since we couldn’t contain him, we thought it best to give this irascible mariner his corner. Barratry’s is an irreverent place, designed for opinionated takes on daily maritime news, and where the only unwelcome opinion is a conventional one. We invite you to join the discussion. Learn more

Crying foul when there is a whiff of natural gas

By Bill Barratry | Published: March 29, 2011

WHEN I hear talk of the development of natural gas as a ship fuel, I also hear the words ‘chicken and egg’, and at the same time feel like crying foul.

A lot of owners talk about the lack of a bunker supply chain for the provision of gas to their ships as a reason for not pursuing the technology, or at least the concept.
This really is a disingenuous red herring if ever there was one. Since when in the commercial world has something been developed and then been left sitting around waiting to be used?

Bunker suppliers, if anyone in the maritime world, are noted for their commercial nature, and I can guarantee that when the provision of liquefied natural gas fits into the mix of fuels they will provide it when the time arises.

There is the argument that there is no infrastructure. That will hardly be a problem. We use gas everywhere, and whether it is a case of supplying it to a port or terminal in liquid or compressed form it can be done. Suppliers have told me they can set up suitable marine bunker stations in a couple of months for LNG, though reliquefaction could take a bit longer. Most owners need a couple of years to make a decision to take a new technology on board. Ample time.

There is a tendency for the shipping industry to look for the silver spoon to help it make commercial changes.

The winners are always the ones that take a small risk, but meter that against the rewards. This is also why the dual fuel engine will probably be the engine of choice for the shipping industry as LNG matures. The engines may be less efficient than a pure gas engine, but they allow fuel versatility and give an easy emergency return to port capability when it is needed.

Recently Brittany Ferriessaid it was in talks with STX France to design a dual fuel ferry. Details are sketchy at the moment, and there is no indication that the French shipowner is likely to order such a ship at the moment to run between France and the UK.

The gossip is, though, that STX France is keen to win a new order and, following on from its twin yard in Turku, Finland, which is currently designing and about to build a gas-powered ferry for Viking Line, is keen to get its name into the books as a viable builder.

The STX France yards are, after all, noted for a number of LNG tankers in the past that run off the cargo boil-off.

There is also the smell of French president Nicolas Sarkozy’s environmental pledges in the air, which could well condense into environmental support for struggling yards, much in the same way STX Turku got a leg-up from the Finnish government. Is this where we should cry foul?

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Nuclear power should remain part of the fuels debate

By Bill Barratry | Published: March 28, 2011

EVENTS in Japan have led to a global rethink on nuclear power.

The sight of desperate attempts to cool nuclear reactors with water cannons and the heroic attempts by workers to reconnect electrical power to emergency systems, has led many countries to rethink their approach to nuclear power and safety.

This will eventually have a knock-on effect on how nuclear power is perceived in the shipping industry. Up until a few weeks ago there was something of a renaissance in nuclear powered shipping as experts debated and considered carbon dioxide-free alternatives to oil-based bunkers.

The majority of nuclear powered vessels are painted grey and come with large guns on the deck, but there are some exceptions — the Russian Arctic icebreakers and a very small number of cargo vessels. These have, as far as the public is aware, an unblemished safety record.

Russia has also developed and is building a series of floating nuclear power stations. These are built on barges and floated to remote places where there is a demand for electricity. For Russia this is in its Arctic coastline where the search and extraction of natural resources is escalating, creating the demand for a cheap and reliable power source.

The events at the Fukushima power station will overshadow the benefits that nuclear power can provide. Quite rightly so.

Both sides of the nuclear debate, those for and against its use, should use the period to assess where lessons can be learnt and draw conclusions in due course, but not yet.
Nuclear power is a contentious topic, but then again so is the offshore wind sector with its share of criticism, and of course oil, gas and coal have a natural black mark against them.

The same arguments will go for power sources for shipping. Natural gas is been touted as the next fuel for shipping — notably by countries with the gas to sell. Most shipping commentators realise gas should only be a stopgap. The final energy source will be the sea, or the hydrogen that is in it and can be used in fuel cells or other, yet to be invented solutions.

As we move towards a supposed carbon neutral utopia there needs to be a rational debate about future fuels, their reliability, sourcing and of course safety. Nuclear power should be part of that debate and recent events need to be put into the right perspective.

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We have been portcentric all along — just not in name

By Bill Barratry | Published: March 25, 2011

THERE is something in this portcentric logistics stuff. Not least of which is the fact that there is nothing new about it.

At the recent conference in Birmingham on the topic — organised by London firm Navigate Events, which gets the obligatory honourable mention for first, providing a free press pass; and second, lending me a laptop after the business centre in the Crowne Plaza hotel demonstrated its spectacular ineptitude in failing to recover the password for its own computers — more than one speaker showed a slide of some portcentric operations stretching back a century or more.

The ever-affable Murray Gibson from Felixstowe produced a picture from 1934 of the Stothert & Pitt mechanical porter that used to operate at London’s Broad Street station; while Stephen Carr from Peel Ports had unearthed an old plan of the Bridgewater Docks at Runcorn from 1894, no less, which were rail connected and showed how the canny — and Liverpool-hating — merchants of Manchester had developed a portcentric logistics park to load up its exports on their way out to the far corners of the Empire.

As a side note, I do have a problem with the term itself: saying it and writing it — ‘portcentric’ — sounds daft to my ears and makes my computer fly into a spasm of squiggly red underlines. Is it one word or two? If it is two, is it hyphenated or separated?

Whatever. The shipping business is more interested in whether it is effective or not, although I do wonder whether shipping lines — as distinct from the wider transport and logistics sector — really care two hoots whether the de-stuffing of containers happens near a port or not. Carriers simply service cargo flows. They go to the ports their customers want them to go to.

This has not been lost on some the more far-sighted ports, which have concentrated their marketing efforts on attracting shippers rather than shipping lines. The most obvious example is Savannah in the US, which has built up serious cargo volumes by offering major shippers vast tracts of road and rail connected land to build massive regional distribution centres. In other words, Georgia Ports Authority offered players such as Wal-Mart and Target a portcentric solution, with Asian import cargo for their stores in the eastern and southern US arriving on all-water services via the Panama Canal, which the retailers have employed as an alternative to that same cargo arriving through west coast ports and being railed to warehouses in the centre of the country.

That is the model that ports in the UK are ultimately apeing, despite the photographic evidence that portcentric logistics has been present here for over a century; only not in name.

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Marine policy debate is being hijacked by uninformed do-gooders

By Bill Barratry | Published: March 24, 2011

I HAVE just laboured through a recording of a UK transport select committee interrogation of the Maritime and Coastguard Agency chief executive Admiral Sir Alan Massey and its head of maritime services Philip Naylor, where they defended themselves against the cuts to its budget and Adm Massey’s four-year plan.

While Sir Alan did a very good job in responding to questions in a similar way to how the MPs asking them would have done, I felt for Mr Naylor, as he barely kept a wry smile off his face when tackling a question from one educated politician about the coastguard and its ability to deal with smuggling off Cornwall.

He calmly reminded the MP that the coastguard was concerned with search and rescue, as opposed to smuggling. The MCA is facing huge cuts and, while it should be questioned, I wondered if those tasked with overseeing it from the transport select committee should really do their homework first.

I will admit a bias here. I am no friend of self-serving politicians or public figures keen on seeing their own name in lights, rather than performing a public service.

The concern I have is also about complex maritime issues being tackled by people who lack the facts. Another politician on the same select committee — with erudite intent, at least — asked why the coastguard’s emergency response vessels were not making any money.

This lack of comprehension does not only apply to British politicians, but exists among the International Maritime Organization members as well. I have heard complaints that those attending the IMO committee
meetings on behalf of the maritime states that form its membership lack a thorough understanding of the industry.

Apparently there was a day long ago — though I do not remember it — when those in the meetings came from a shipping or shipbuilding background from around the world, which led to a coherent argument or debate about safety at sea.

Today the debates are more political, with a ‘you scratch my back’ approach that has more to do with self-serving agendas than a puritanical development of safe and sound ships and shipping.

The result is more long-winded arguments than necessary, I am told, and a great deal of discussion outside the IMO committee rooms, especially in the few outdoor places where members are still allowed to smoke

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Channel ferry operators feel the pinch yet again

By Bill Barratry | Published: March 23, 2011

IF THERE’S one class of shipowner for whom it is difficult not to feel the old sympathy strings being pulled, it is those who own and operate north European ferries and, in particular, those in the English Channel.

Back in the day — when flying was still the preserve of the gilded few before it became the perverse of the gullible many, and the idea of a foreign holiday for most British families was a fortnight in Brittany playing cards and squabbling in a caravan while it howled an unexpected (though somewhat predictable) hoolie outside — ferries did a roaring trade.

They connected the British Isles and continental Europe for everyone: for tourists, both on foot and in car, and the business links the UK and Ireland needed as they integrated into the European Union.

But ferries got hit by the sort of right uppercut-left jab-right haymaker, combination that once laid Bill Barratry on his back in a shady bar in Zamboanga in 1973. The opening of the Channel Tunnel. With its infinite ability to adjust capacity, the abolition of duty-free — virtually killing their onboard retail revenue streams — and the emergence of low-cost airlines, which devoured the passenger transport market.

To still be running a business after being dealt those kind of body blows in succession takes some doing, and if you then add the recession into the mix the prospect has been frightening, because once ferries had trimmed their costs to the minimum it was freight that kept them in business — and that has dropped like a stone.

Even worse is that there is nowhere for them to turn. Many ferries are designed with specific routes in mind; restricted to certain corners in the world rather than a global shipping business — so a downturn in one market is unlikely to be offset by an upturn in another. The UK and Ireland are flat markets at best.

Unlike many other sectors, the ferry guys had little hand in the making of their misfortune; although let’s not pass judgement too quickly, for P&O Ferriesis about to launch the first of its two new superferries, Spirit of Britain, a $250m beast able to carry 2,000 passengers.

Talk about a stiff upper lip and all that. The admirable Dame Kelly Holmes — with two Olympic Gold medals no less — will name the vessel later this week at Dover, with the second ship due in September.

This in the same week that LD Linecancels an order in the eleventh hour of its construction for a new ro-pax that was due to operate Le Havre-Portsmouth. That’s about as different an interpretation of the market as you are likely to get.

Gavin van Marle is senior reporter for Lloyd’s List.

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A good time to buy into shipping shares

By Bill Barratry | Published: March 17, 2011

THE timing is right to have a little bit of cash to spend in the shipping industry. Share prices are rocking wildly and markets are still in a jitter. Japan, the Middle East and other global calamities are distracting attention, and there are some companies sizing up potential public offerings.

A number of large shipowners — those with deep, gold-lined pockets — are believed to be on the prowl. Low share prices in competitors and partners may be too tempting to ignore.

There are also companies looking to offload non-core business units that can bring some cash as they look to spend elsewhere. The sale by DFDS of its tourist boat business in Copenhagen is one example.

Torm and Frontline have now been linked. Rumour has it that Fredriksen’s Frontline started to eye up Torm after selling off shares in Overseas Shipping Group last month.

Earlier in the year an analysis of the tanker markets by Lloyd’s List pointed to the continuing difficulties private operators could face.

But the world is full of ironies and I would happily pick up a few cheap tanker shares right now, because sooner rather than later the market will return. Well it might be later, but that’s even more suitable for my line of thinking.

We are out of the worst of the crisis, although the wheels of the wagon remain a bit wobbly. A number of tanker owners – Torm is not alone – are still operating below breakeven levels and may default if they can not raise some capital. The choice is to sell off ships, raise equity through a share sale or go for bonds.

With a sharp-eyed man like John Fredriksen rumoured to have his eyes on a shipowner such as Torm, it can only be good news for the Danish company.

For where Fredriksen looks, others tend to follow his gaze, under the self-effacing motto that opportunity can strike twice.

If I was a Torm shareholder now I’d be tempted to start the rumours myself if they were not true, given how Torm’s shares rallied on the rumour after reaching an eight-year low last week.

So, I have some cash stuffed under my mattress and I am looking for something to use it on. I don’t feel I
can put it back in a bank just yet — not safe enough and with no certainty of a return.

I could buy a dozen bottles of quality wine if I knew about wine. Or perhaps I should sow it where the earth looks most barren and wait to see what happens when the sun shines. Where there’s muck there’s brass — and oil is mucky stuff.

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Motorways of the sea concept drives into trouble

By Bill Barratry | Published: March 16, 2011

ANY form of subsidy in the shipping and logistics markets should be looked at with suspicion, even those given for such neutral and altruistic objectives as environmental ones.

It would appear that the Motorways of the Sea concept is coming under closer scrutiny due to either European competition or environmental affairs officials. It seems that even though there is a push to get freight from the roads and on to ships, it is potentially creating more harm than good. The argument stems from whether ro-ro freight should continue to be in the form of a lorry with driver or as containerised wheeled freight unaccompanied by a lorry that can be more efficiently stowed on the ro-ro vessel. The latter is, according to some, more than twice as efficient.

For starters boxes can be stacked two-high, which the ferry company cannot do with lorries, and there is no space wasted with the drivers cab. There’s also no hungry and tired driver to accommodate.

So the MoS subsidies are suspected of promoting the development of accompanied freight at sea, as opposed to united unaccompanied freight that is more economic. The difference has been simplified down to the difference between north European freight models and those in the Mediterranean Sea.

But the real question is what will happen if the European Union decides there is a case for turning the Mediterranean into an emission control area? Consider this: subsidised routes would find themselves either having to use low sulphur fuels, which are notably more expensive than residual fuels used today by shipowners other than when in port, or installing exhaust gas scrubbers to remove the sulphur. Scrubbers are as yet unaccepted in the industry though they are gaining some ground; Messina Lines is one of the few to opt for this abatement technology.

The use of gas is a much talked about third alternative, but the idea of Greek and Italian ferry and ro-ro owners suddenly rushing to convert their fleets seems rather remote.

So how would the creation of a low sulphur emission control area be received by the Mediterranean operators that already rely on subsidies to keep some routes open? One assumes the threat of a modal shift will be re-heard as owners say they will be forced to close routes otherwise.

There is an ironic element to this debate though. Every single gas powered ferry or ro-ro in existence or planned, and they are all for northern Europe, has had or will have some governmental support and in the case of the Viking Line ferry, being built with Finnish subsidies, the Finns may say it has been given for environmental reasons — but one suspects that the real reason is to keep Finnish shipyards alive.

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A rabbit on the highway needs to move fast

By Bill Barratry | Published: March 15, 2011

THE Exhaust Gas Cleaning Systems Association — the scrubber club as I like to call it — is saying it can deliver up to 2,000 systems to shipping in northern Europe by 2015.

If that is true, it is good news for its members, who stand to reap a hefty income from each $3m system they sell. The bad news is, they are just not going to get the orders.

EGCSA director Don Gregory has said owners will guarantee that their product will work. He has not, however, said if this guarantee is for the lifetime of a ship.

The problem is getting operators to invest. If the owner has the vessel chartered out on a bareboat charter, what incentive has it to invest in a system that it still does not trust?

The idea of forming a financial model to help pay for the system using the price differential between the distillate fuel the ship would otherwise use and the heavy fuel oil it still can use sounds, therefore, like a good one.

Something similar was launched by MAN Diesel nearly two years ago, mostly as a way to get owners to retrofit turbocharger cut when the economic crash began to bite and slow steaming begin to look attractive for survival reasons as much as environmental ones.

Perhaps it is time for the legislators to look at this model, or the one pushed by the Norwegian NOx fund, as a way of putting a carrot where they are currently trying to wave a stick. It need not just be for the scrubbers. It can be for the conversion to liquefied natural gas, or any other technology, to meet the huge range of environmental challenges the industry faces.

Shipowners need the encouragement. The SOx challenge in the emission control areas has them staring at the approaching headlights like startled rabbits and they need the incentive to act.

Speak to any owner and you will get the same response. The jury is out on what to do as the costs are as high as the risks.

So someone needs to give these rabbits a carrot and get them installing systems, otherwise another deadline will be reached and yet again the regulators will be asked to turn a blind eye.

Look at the embarrassment of the tanker owners who suddenly realised — five years after being told — there was a European 0.1% SOx limit in ports; or that the first deadline for the ballast water convention had to be pushed back as not enough International Maritime Organization member states had ratified it to make it enforceable.

The regulators who set the rules need to use carrots as well as sticks.

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Can the future of fuel be found in natural gas?

By Bill Barratry | Published: March 10, 2011

I AM only just beginning to appreciate the role natural gas will play in society as a whole — and, as a result, its impact on the shipping industry.

There is a lot of talk about the use of gas as a fuel for shipping. The arguments are economical as well as environmental, that is true — but in terms of competitiveness, there will be a few extra arguments emerging in the coming years.

Shale gas is getting cheaper to extract: the US Energy Information Administration has said there is a confirmed 33 trn cu ft of gas in the US in shale deposits and probably a lot more that has yet to be fully assessed.

The US total proven reserves is reported at 250 trn cu ft. The reserves, known as plays, have resulted in lower prices as extraction technology improves.

On top of this, there are other markets increasing their gas exports. The result, according to some, will be a decoupling of the gas price from the oil price and an eventual evening out of gas prices in the three main markets: the US, Europe and Asia.

Cheaper gas will mean increased land use. Already I have seen trucks running off gas and heard of tests on LNG dual-fuel engines for the rail industry. Wärtsilä’s announcement of its entry into the rail market, coupled with its position in the provision of dual-fuel engines, gives it an opening here.

Rail can, of course, be powered by electricity, which is also a target for the gas markets as production increases and national legislation pushes the power markets to make changes.

These developments will have an impact on shipping in the long run, particularly shortsea shipping, as it finds rail and road freight switching to gas use.

It will be competing for the same supplies — or, if still using oil, facing increased competition if other transport users are employing more environmentally sustainable fuels.

I have heard arguments that increased natural gas usage will lessen dependency on oil, resulting in a drop in price. If this happens, it will not be for a long time.

The impact of environmental legislation, the increased number of gas producers opening up markets (unlike the oil market, which is global and subject to the whims of the major Middle East producer) and increased usage will play into the hands of shipowners that opt for gas fuel in the short run; but what about in the long term?

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Pirates have rights too, whether you like it or not

By Bill Barratry | Published: March 9, 2011

‘SLIGHTLY to the right of Ghengis Khan’ is an English expression that can be used to describe people with robust conservative opinions. I am given to understand that the comparable Mongolian idiom is ‘slightly to the right of Jacob Stolt-Nielsen’.

The feisty 79-year-old stepped down two years ago as chairman at the shipping company he founded in 1959, but remains a director and plainly keeps himself abreast of current controversy.

Recently, he landed himself in a spot of bother after penning an opinion piece for Norwegian newspaper Dagens Naeringsliv, which insisted that pirates should be subject to summary execution. “When [piracy] implies a great risk of being caught and hanged, and the cost of losing ships and weapons becomes too big, it will decrease and eventually disappear,” he fulminated.

“Pirates captured in international waters have always been punished by death, often on the spot,” he said. “Not arrest them and say, ‘naughty, naughty, shame on you’, and release them again, but sink their boats with all hands.”

What about the obvious objection that the pirates would be tempted to retaliate in kind? Not decisive, says Mr Stolt-Nielsen. “You can’t make an omelette without breaking eggs. This is war and warfare costs lives.”
Stolt-Nielsen the company issued a statement saying that Stolt-Nielsen the man was speaking in a personal capacity. Nevertheless, denunciations flooded in, from the Norwegian Foreign Secretary to the leader of the country’s seafarer union.

Okay, few people in shipping would dare to be as frank as Mr Stolt-Nielsen obviously felt he could afford to be. Well, not in public, anyway. But I would guess that plenty of shipping people privately share such sentiments, not least after they have a few beers under their belts.

This is understandable. Understandable, but still wrong. The modern concept of human rights, including the right to due process, dictates that they are enjoyed by virtue of being human. In liberal democracies, they are not selectively withheld, even from violent criminals.

Even if the ‘time of war’ analogy is accepted, summary execution is still illegal under international law in almost all circumstances.

It is also worth noting that the unfortunate provenance of that quip about eggs. It originated with Walter Duranty, the Moscow bureau chief for the New York Times in the 1930s, as a rhetorical device to employ against critics of Stalin’s Great Terror.

To compare the loss of seafarer lives to preparing a snack is not morally acceptable, and Mr Stolt-Nielsen owes those who made him extremely rich by sailing his ships an abject apology.

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