To pool or not to pool

While the worst might be over for the dry bulk shipping sector, a full recovery is still some way off; the future remains fragile. With shipowners reluctant to settle for low rates for a long period of time, there has been an increased interest in pools.

Whether this interest will continue when the market fully recovers remains to be seen, but for now at least, pooling assets offers plenty of benefits for shipowner. Pooling assets is not only an easy way for shipowners to reduce costs while the market remains challenging, but also to consolidate and capture market share without having to “give up their own toys”.

Finding partners

Among the recent companies teaming up are UK-based shipping company Carisbrooke Shipping and Swiss Nova Marine Carriers, who officially joined forces at the start of this year to provide services with a versatile fleet of approximately 60 vessels ranging from 5,000 dwt to 15,000 dwt.

Carisbrooke’s Robert Wester comments: “This is an extremely positive development during a challenging time for the industry. We are very pleased with this further deepening of our strategic cooperation with Nova Marine Carriers, in which we can leverage on the synergies between the strong short sea and dry bulk expertise of the two companies.”

Gearbulk and Grieg Star have also entered into a joint venture to form a more versatile and customer-oriented, worldwide dry bulk shipping company, G2 Ocean.

The joint venture will combine the companies’ global resources and expertise to operate the parties’ combined fleet of open hatch, semi-open hatch and conventional bulk vessels. Grieg Star’s chief executive Camilla Grieg says:. “In an increasingly competitive market, we believe this new entity will have the size to build and sustain a versatile and independent shipping service.”

Indeed, the joint venture promises to provide a strong presence on every continent, with more than 130 vessels to be operated by the joint venture, and offices located across the globe.

Notably, the two parties will retain their independent technical ship management and ownership in the vessels. The scope of the joint venture also excludes activities and vessels operated by Gearbulk in association with other third parties, as well as terminal business, transhipment activities, operation of liquid pitch tankers and caustic bulk vessels. Greig Star’s terminal businesses will remain outside the scope of the new joint venture too.

Pools versus consolidation

As Kathleen Haines, treasurer and chief executive of Heidmar, highlighted at the London Marine Money Ship Finance Forum, being able to consolidate without giving up your shares is one of the benefits of being in a pool: “You can get that market power of having a bigger fleet but still retain your toys, so to speak,” she said. “I think that’s an easier way to consolidate for a lot of people.”

Leon Patitsas, founder and chief executive of Atlas Maritime, agreed that being in a pool is an easier way to consolidate – “chartering in other people’s tonnage is another way,” he said, “but consolidation has always been the unicall in shipping.”

He added that everybody always says that shipowners should consolidate but it never happens, due mostly to people with “very big egos”. So, while it would be a good thing to do, it would also be a very difficult thing to do, he said.

Norwegian shipping company Torvald Klaveness is another party championing pools. In fact, it has recently hired a new employee to change the reputation for and capitalise on pools, and, at the same time, secure vessels for the two pools already operated in the spot market by the carrier: the Bulkhandling Pool and the Baumarine Pool.

“Pools have generally suffered from a very poor reputation in recent years,” Klaveness’ head of Panamax Pacific Michael Jørgensen told Shipping Watch. “It’s a challenge to convince the market that pools are not loss-making, but that they actually provide bid advantages.”