A walk on the dry side

BB: How long have you been in shipping and what attracted you to the industry?

BN: “I have lived by the sea all my life, near Dublin as a child and now at Chichester Harbour, and I am a keen yacht and dinghy sailor. I have been attracted to working in shipping since a very young age. My time studying maritime business and law at Plymouth University confirmed this and was followed up with an MSc in Shipping, Trade and Finance at City University (Cass Business School).

I initially worked in containers for APL before moving to Cargill where I spent six years on the panamax and supramax physical chartering/trading side. After this I established Morgan Stanley’s physical shipping desk and was responsible for the panamax and cape chartering and trading of both physical vessels and FFAs as well as iron ore derivatives and option trading.”

BB: How did you come to be MD at Lavinia Bulk?

“Prior to becoming MD at Lavinia I had known the Laskaridis family in a commercial context for several years, chartering their vessels while at Morgan Stanley. Due to the rapid expansion of their dry bulk fleet from 2010 onwards and when the opportunity arose, the process of moving over to the owning side and helping to manage their growing chartering operations was a natural progression.

I have brought my chartering and trading experience from my days at Cargill and Morgan Stanley to the new chartering team here at Lavinia and also assist the Laskaridis family with commercial ideas and projects that come up.”

BB: Lavinia owns a number of dry bulk vessels – what are their key trades and activities?

“A big newbuilding programme is ongoing but close to ending. Once all the vessels have been completed we will have around 40 bulkers across the size spectrum – ultramax, panamax, post-panamax and newcastlemax – making us one of the larger independent/private owners globally. The newbuilding programme has focused more on ultramax and panamax vessels.

Our vessels are all on short term charters or trading spot – the long period market is just not worth it at the moment, although we will be looking to hopefully build longer term period deals next year when the market improves. Our vessels trade globally across the main commodity classes. We prefer relatively simple trades and are not geared up to do many specialised trades such as parcelling or large cargo contracts at this stage. Our newcastlemaxes carry iron and coal, our panamaxes and kamsarmaxes coal, grains and bauxite mainly and our ultramaxes coal, grains, steels and salt as well as other minor commodities.”

BB: What are Lavinia’s key uses of the Baltic indices?

“We use the Baltic indices to help make chartering and FFA decisions across our fleet and see them as an extremely important tool and asset.

In the past and today, our fleet has been chartered out on index linked contracts – ultramax, panamax and newcastlemax. With the lower state of the market, we now have fewer ships chartered on an index basis but we definitely benchmark against the indices and see them as an integral part of our business and decision making. I attend the freight market information user group meetings regularly and think it’s good to have both owners and traders involved and contributing to the discussions. Sometimes the meetings are dominated by traders so it’s always useful for owners to participate and put their views forward.”

BB: Does membership of the Baltic confer a particular status?

“I think that among members, the Baltic mantra ‘Our word our bond’ is strong. This is increasingly important in the dry market where there are a growing number of newly formed counterparties who don’t share the same values.

It would be good to spread the Baltic’s culture and hopefully the potential changes occurring with the possible SGX purchase means this will happen more quickly as the Baltic Exchange develops further outside Europe.

I’m a big fan of Baltic social and sporting events and am on the Irish Society committee that organises the famous Baltic Irish Night dinner as well as being an ambassador for Sailors’ Society. I host the Sailors Society golf day which I started a few years ago for which the Baltic Exchange supports Lavinia and this event is well supported by the shipping community and helps raises much needed funds for Sailors’ Society.”

BB: How do you see the dry market evolving over the next two to three years?

“I think the outlook is more positive as long as no new ordering takes place which should not happen with where prices are. The industry needs to be rational, keep scrapping and order as few vessels as possible so we can return to a more balanced market.

There is a huge amount of scrapping going on and a drop-off in newbuild programmes especially from next year. Coal trade volumes are stabilising after being adversely affected by the drop in oil prices and recent coal price rises in China are encouraging on that front after well documented declines. Grains are strong and iron ore is strong. China is definitely stabilising and has increasing protein needs as well as continued iron ore requirements which are displacing its domestic ore. India and other South Asian countries are really starting to increase bulk imports. Hopefully all these factors will soon combine to create a better and sustainable dry market going forward.”

www.laviniabulk.com

Brian Nixon’s Baltic membership history:

• First elected January 2000 for Cargill International SA
• 2006 Morgan Stanley & Co International Ltd
• 2013 to date Lavinia Bulk Ltd

For further information on becoming a member of the Baltic Exchange, visit www.balticexchange.com/join