It’s been five years since Maritime CEO came calling at the Hamburg headquarters of Auerbach Schifffahrt. It has been a bumpy ride for sure, but the very Hanseatic founding principles of this multipurpose shipowner remain the same – composure, reflection, action.
Founded in 2010 by former Ernst Russ executive Lucius Bunk, the fleet today is made up of 15 MPPs, a growth of 10 since 2015.
“It’s been a challenging journey in a market environment that contrary to our expectations five years ago did not stabilise or improve but instead saw several established operators and competitors not only struggle but declare insolvency and give up,” Bunk concedes.
Auerbach vessels are employed with various well-known operators on a time charter basis for between six and 12 months periods.
From the outset, Auerbach has focused solely on the MPP sector and has no plans to alter this fleet mix.
“Given the limited size of our niche market we profit from a close dialogue with relevant stakeholders in a tight knit global network,” Bunk explains.
Massive global developments beyond Auerbach’s control are certain to damage earnings this year, Bunk admits, but the MPP sector ought to be better shielded from the ongoing chaos seen around the world at the moment.
“A prediction on developments under current market circumstances is rather difficult,” Bunk says. “In light of the spread of the coronavirus and the soaring conflict between Russia and the Middle East on pricing of oil we expect some adverse effects on demand, global supply chains and the availability of project cargo. Having said same there is a lot of contractual long-term business and we expect effects on the MPP market not to be as severe in the short run as on other sectors in the industry.”
Auerbach’s ‘one step at a time’ approach to business looks sensible given current conditions and the travails seen by many of its larger peers in the MPP sector of late.
Plenty of the consolidation within the MPP sector have been misguided, Bunk argues.
“A shipowning company active in the MPP sector has to be set up in a way that allows for sound access to capital, solid technical expertise and a good commercial network to secure adequate employment,” the German says.
The aim going forward, maybe for the next Maritime CEO interview circa 2025, is to grow the fleet to somewhere between 25 and 30 vessels. Beyond that, Bunk has far greater ambitions – with plans to revolutionise shipping as a whole.
“We have decided to allocate funds to address the mega trends and challenges such as climate change and digitalisation of the upcoming decade and are about to co-launch a company builder with a focus to initiate and support ventures geared at introducing fresh and innovative concepts to support the evolution of the maritime industry,” Bunk reveals in a Maritime CEO exclusive.
This article first appeared in Maritime CEO magazine, published this month. Splash readers can access the full magazine for free by clicking here.