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A recent tanker broker’s report commented: “The onset of the stark realization that the Q4 market being the hope and savior of this year is not actually going to come to fruition.” Despite an upturn in rates from absolutely diabolical to simply extremely awful, it is now looking certain that this will be a grim year for tanker owners. Whilst Covid travel restrictions mean that the beleaguered tanker owners will not have to face their smiling counterparts from the container and bulk carrier sectors on the conference circuit this winter, perhaps a few of them will be sitting at home asking why they did not have a bit of diversity in their fleets. Fifty years ago, diversification seemed to be the name of the game in shipping. The demise of the tweendecker as containerisation began to change the world saw shipowners, particularly in Britain, which then still boasted a significant merchant fleet, diversify into other sectors. For some, bulk carriers were initially the sector of choice, but the early ’70s tanker boom inevitably saw some go all in and order a VLCC. The subsequent collapse in the tanker market and the rise in the oil price meant that offshore oil exploration suddenly became attractive. With the North Sea on their doorstep, drilling rigs and offshore supply boats must surely have been the way to go? That move ultimately finished off quite a few owners who seemingly failed to realise that the only similarity between a trusty old liner type and a fancy piece of offshore kit was that they both floated. Today, banks, investors and charterers seem to want specialisation In the Far East, the appetite of Hong Kong owners in particular for shikumesan deals with long term charters from Japanese operators for Japanese newbuildings, fuelled the growth of numerous independent fleets where the charter was more important than the ship type. This gave rise to diverse fleets which included reefers, car carriers, loggers, ore carriers, etc. This was all very well whilst the original charters ran, but when those charters ended, or the charterers went bankrupt, as happened with such devastating effect in the mid-‘80s, there wasn’t much in the way of in-house expertise to run these ships in a depressed spot market. Cue plenty of laid up tonnage and bank-induced distress sales. Today, banks, investors and charterers seem to want specialisation. A focused business that builds its name in a specific market. The need for scale and the demise of the long-term charter on which so many independent owners were built, not to mention a much tougher regulatory and compliance environment, has seen owners needing to be able to show their skills in specific sectors. This has seen the demise of the chartering manager who can turn his hand to the dry or wet trades or the technical director who is equally at home discussing cargo cranes or the pumping system on a chemical carrier, but the customer now gets the dedicated service he wants and the investor has hopefully got a clearer idea of where his or her money is rather than having it scattered over different shipping sub-sectors. There are still quite a few independent owners who successfully operate diverse fleets, hoping that the market cycles in different sectors will average out to provide consistent prosperity. They are becoming a rarity, but you can be sure that as their tankers look set to struggle in the final quarter, they will be breathing a sigh of relief. Let’s just hope they did not take that step too far and are holding offshore supply boats or drillships in their fleet.

Shipowners ought to stick with what they know

With tanker markets in the doldrums and the bulker and container markets on fire, our special correspondent asks if having a diverse fleet is the way to go

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