Does Benchmarking Tankers Help?

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No! A leading broking house and service provider says benchmarking may not be the most suitable measure for the tanker sector.

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Observing owners and charterers is a tell-tail sign of the industry’s performance and their profits give the industry a clear indication of the effectiveness of how they go about managing their assets, Denis Petropoulos, Braemar Group Asia president, told delegates at The Connecticut Maritime Association’s shipping 2016 conference (CMA).

Owners need to benchmark :

  • Their suppliers-especially bunkers
  • Lubes
  • Technical areas
  • Outsourcing repairs and maintenance
  • Continuously benchmark oneself against their peers to ensure best practices and effectiveness

“But do they need to be a better operation than their peers to charter the vessels?” Petropoulos asked.  “They may have to answer to outside investors or to family investors or just themselves as to their effectiveness.  Traditional ship owning was about profitably transporting cargoes to the demand areas.  The changes in trade patterns over the past 10 years are part of that strategic thinking.  Their real profits are from timing of asset play”.

Rating others performance for both owners and charterers, is speculative, Petropoulos said.  “There is not a real measure made and it is only subjective-best practices, watching other people’s problems and how they are handled is a way of comparing performance with others”.

The Dominant to the charterer is the freight rate- the headline number, he concluded.

“A charterer wants to pay no more than the next, normally his wish or ego persuades him to try to undercut.  That’s not to say a charterer won’t favour an owner with an historical relationship but the rate is the rate-if a charterer pays a point more it is because the ship is the best vessel for him at that moment.”

Source: CNSS

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