Complacency creates a listless market, delegates attending the dry bulk session were told at last week’s Maritime CEO Forum held at the Monaco Yacht Club.
“The best things we can do for ourselves in dry cargo is to be selfless and not selfish and cooperate and not be complacent,” said John Michael Radziwill, CEO and chairman of GoodBulk.
While the markets have come down, they remain at a “not unreasonable place historically”, with relatively attractive fundamentals, suggested Andrian Dacy, managing director, Global Transportation Group at JP Morgan.
“You are not going to knock the cover off the ball in the short term, but you will make a reasonable return for a reasonable level of investment,” Dacy said at the exclusive shipowner retreat on the Côte d’Azur.
“Yes, the fundamentals are there,” agreed Alex Albertini, CEO of Marfin Management, “but there are wars and things that are scary and this has ensured the market is led by a high level of sentiment change so it is not driven by the full fundamental game and this is what worries me short-term. Long-term it does look good.”
Be selfless and not selfish
In the specialised market Arthur English, the CEO of G2 Ocean operates, namely open-hatch bulkers between 40,000 to 50,000 dwt, half the tonnage is over 20 years old, he told delegates.
“There is some uncertainty with where we are in the global economy, but if you look at minor bulks a lot of those commodities are safer bets whether for food production or forest products and the move away from plastics, or wind power and the need to move components for that,” English said.
English also touched upon the great deal of recent reports on China decoupling from the West, something he said would see demand for smaller ships spike in both the Atlantic and the Pacific if it ever happened.
As with any dry bulk discussion, considerable time was spent on China. As and when Beijing does come out of its zero-covid phase, Radziwill told attendees to look out for a “coiled spring effect” in terms of seaborne movements of dry cargo goods.
Maybe, but longer term, JP Morgan’s Dacy cautioned that with the population projected to peak in the People’s Republic in the not too distant future, the dry bulk industry will need to accept demand growth from there will also peak.
Moderator Tim Huxley, the CEO of Hong Kong-based Mandarin Shipping, pointed out that while India will be a bigger population than China in a few years, it has been a disappointing market for shipping for a long time with panellists suggesting Southeast Asia was the region with the most exciting demand growth this year and in the near future.
Turning to future ships, G2 Ocean’s English said that on the fuel side there continues to be a disconnect between owners and charterers with not a close enough dialogue.
Albertini from Marfin Management, who is in the process of prototyping solar technology he has created for his ships, hit out at shipping’s slowness to innovate its own green path.
“As shipowners we are waiting for the suppliers and shipyards to come up with innovations. We are always playing a wait and see game just because being a first adopter has never paid off and therefore we became lazy, waiting for others to come up with the solutions and us becoming the followers,” Albertini said, leading moderator Huxley to question whether that was simply because shipowners were not paid to be inventive, something Albertini conceded was certainly part of the reason for such “laziness”.
Maritime CEO Forum Monaco 2022 was sponsored by Arrow Shipbroking, Cambiaso Risso Group, CTM, Danica, Dualog, eShipfinance.com, Liberian Registry and Ocean Technologies Group.
The next Maritime CEO Forum takes place Singapore on April 24 next year with a return to the Monaco Yacht Club confirmed for October 12.