Mid-sized shipbroking firms face an uncertain future, argues the head of Braemar Shipping Services in a wide-ranging interview today.
James Kidwell is the ceo of Braemar, a company that has been at the centre of the consolidation seen in the broking sector of late. It’s two years now since Braemar completed a merger with ACM and 15 years since Braemar merged with Seascope. The last couple of years have seen many other shipbroking mergers, and Kidwell believes more are on the cards. Kidwell sees the sector polarising with the mid-sized players struggling to remain relevant.
“I do think particularly our major clients expect a level of service where it pays to be big,” he says, “to have good market coverage, therefore the bigger you are the better access you have to information.”
A chartered accountant by background, Kidwell says of the future of shipbroking: “My feeling is the market will polarise into small niche private players who won’t give a full service but will chase niche areas. The other alternative is full service companies with extensive global coverage. The middle ground players will find life the toughest.”
On more current matters pertaining to his business in and around London, Kidwell says he’s in favour of the Singapore Exchange (SGX) taking over the Baltic Exchange, while he downplays the impact Brexit will have on London as an international maritime centre.
Noting that Braemar ACM is a shareholder, panellist, user of Baltic information and is involved in freight futures too, Kidwell says of the Baltic: “We have an interest in it from all possible facets.”
Kidwell says: “We view SGX as generally a good thing. We hope it will go through.”
SGX first made its plans to take over the Baltic public towards the end of May. The deal might go through by the end of August.
On Brexit, Kidwell stresses it is too early to say what effect the UK’s decision to leave the EU will have on London as a maritime hub, but he is hopeful it will not change things too much.
“Many of the reasons why people like being in London for shipping such as timezone, expertise and location will not be affected by Brexit,” Kidwell predicts.
While broking makes up more than 50% of profits at Braemar, the company is far more than just a brokerage house. Other services include port agency, engineering and loss adjusting to name just three.
“Fundamentally,” Kidwell explains, “we see ourselves as a service provider in maritime and oil and gas.”
Finishing up with a quick look at the markets, Kidwell reckons dry bulk has bottomed out, tankers are in a typical summer seasonal lull and should rebound in the autumn, while the prognosis for containers remains grim.
Prior to Braemar, Kidwell’s career included stints as finance director at music publishers Boosey & Hawkes as well as time as group financial controller of Carlton Communications.