Shipping conference looks to the future
NAPLES – Money, markets and maritime risk under the microscope at Shipping and the Law 2014.
The impact of private equity, the need to lobby collectively on regulation, and the impact of emerging risks were all considered at Naples event. Shipping’s most urgent challenges include understanding the role of private equity finance and a need to lobby against regulation that is aspirational rather than founded in practical experience, delegates at Shipping and The Law have heard.
Speakers, panelists and delegates to the 5th Shipping and the Law event, which took place in the beautiful baroque monumental complex of Donnaregina in Naples, organized by Studio Legale Lauro, included some of the biggest names in international shipping who came together to debate issues of market development, ship finance, risk management and maritime law.
Shipowners including Grimaldi Group’s Emanuele Grimaldi and John C. Lyras both called on the industry to act collectively to respond to increasing levels of regulation at a time when earnings remained under pressure from excess tonnage. John Lyras notes that an increase in framework regulations rather than clearly formulated and agreed global rules were threatening to change how the industry operates.
“We need to defend our long-standing and unique institutions including limited liability, the P&I Club system, Classification Societies and integrity of IMO as global regulator, rather than a forum for promo of national political aspirations,” he said.
Emanuele Grimaldi said overcapacity in the market was being “perpetuated by banks who have not yet taken the painful measures they need to clean up their balance sheets and put pressure on those clients who are not performing and may never perform financially again”.
He said a shipowner’s obligation to safety required a constant commitment, continuing investment and management focus, not something that would happen in such a fragmented industry which lacked the scrapping needed to control fleet growth.
The panel on global challenges and strategic decisions which heard contributions from Jefferies’ Jeff Pribor, RINA’s Ugo Salerno, Norwegian Hull Club’s John Wiik, LMAA President Clive Aston Perseveranza’s Peppino D’Amato was moderated by Platou’s Richard Fulford Smith and the Conference organiser, Francesco S. Lauro, who commented: "I do not see any point in the traditional Owners' complaining in respect of private equity investing in new technology vessels in a market which already shows an excess of tonnage on offer. In a free market economy there in no exclusivity in the old family business; everybody takes the investment decisions he feels right and will bear their consequences: it will not be the owners preaching against private equity ruthlessness but the incautious investors burning their fingers to convince them to stop unsound orders. Private as well as public equity could be in fact a very useful mean for owners to reach sizes and scale economies which would be achievable with old fashion schemes."
In the panel chaired by Grimaldi's Diego Pacella and Pribor, as well as in the following session, delegates debated the continued impact of private equity on ship finance as a replacement for traditional bank debt.
Venice Shipping and Logistics’ Fabrizio Vettosi said the interests of private equity were fully aligned to shipping and shipowners. “Both are entrepreneurs so private equity can contribute positively to the way a company is run."
ING’s Rory Hussey said that “for most of Europe, the banks are back. The corporate banks are to some extent under-lent. The problem is finding the deals, not availability of credit”.
The Risk Management session chaired by CR Marine Aviation Mauro Iguera and PL Ferrari Federico Deodato included a keynote from former IOPC Fund director Mans Jacobsen on the lawsuits that followed the sinking of the Prestige, proceedings that had he said, proved inefficient despite their length, where the compensation regime might have proved more suitable.
Other presentations to the session included assessments on P&I Club reinsurance, the hull market, sanctions and price volatility by John Wiik, NOE Mike Salthause and UK Club Mike Salthause, while Studio Lauro Shawn Winter spoke on managing crisis events with particular regard to the off-shore rigs/vessels sector. Patrizia Kern Ferretti of Swiss Re said the market may lack the reserves needed to cover the next major casualty. “There is continued uncertainty for marine premiums given the persistent capacity inflow; pressure on rates will continue,” she said.
The final session, Build, Buy, Charter chaired by Clive Aston and Mariella Bottiglieri opened with a contribution from Giorgio Berlingieri on the work of the CMI and included presentations from Ince's, Hill Dickinson's and Watson Fairley's leading practitioners on the topics of sanctions, charter disputes and the impact of the Ebola virus on shipping contracts.
The conference this year was preceded by a "Premiere Workshop" on "Eco Ships. investing in new technologies" organised with the Andrea Garolla's Young Italian Shipowners and Alberto Moroso's Association of the Italian Naval Architects culminating in the final panel "Why invest in Eco-ships?" with Italian Owners Umberto D'Amato, Lorenzo Matacena, Valeria Novella, as well as representatives from Wartsila, Lloyd's Register, Grimaldi Group, RINA and the Italian scrubber maker Ecospray.