How can major stakeholders such as Registries make a difference in the current market condition? Mr. Benson Peretti, General Manager, LISCR (Singapore), Pte. Ltd answers this question in his talk on “Supporting The Dry Bulk Sector in Tough Economic Times” in The Dry Bulk Cargo Summit 2016. Coming from The Liberian Registry, the world’s second largest registry, he delivers significant insight on the role of registries in the growth and improvement of the Maritime industry.
Giving an overview of the Dry Bulk market, he said, “Bulk owners are not alone, the container sector is hurting, the offshore sector is hurting. We’ve seen a lot of reduction in terms of tonnage in the off shore sector. So, that’s the state of the market, we all know the issues with overcapacity, the capacity that is coming on the way and decreases in demand. This poses challenges though and you have to look at reduced income for the vessels, yet the need to provide a safe, secure and complying operation, so it is a balancing act and we feel that a registry or a flag administration can make a difference in helping the balancing act between ensuring compliance and the best use of the revenues that are available in the shipping industry.”
How can this be done?
“This year we’ve enacted quite a few measures as a reaction to what our owners have relayed back to us, we like to look at our owners as our business partners. We feel that in order for ourselves to be successful as an organization we have to have successful clients as well. So we’ve reacted to the sustained downturn in the Maritime industry by trying to ease the financial burden at the owner’s face.
Touching on a few of the programs they’ve done,
“We’ve done a number of programs, in general it includes a Vessel Lay-up program, we’ve tried to harmonize our audits for shipboard audits inspections to save owners time and money of getting inspected of getting inspectors out to the ships.
We waived the initial vessel certification fees, we’ve made it very affordable to bring a vessel into the registration and then to keep it there by trying to reduce the financial burden of all the paperwork fees and the associate expenses.
We’ve tried to leverage technology where and when possible to save costs as well and we consider creative payment plans to ease cash flow issues that companies have, traditionally when you pay your registration fees to any registry it’s done in a one lump sum fee, so we try to spread that throughout the year so there can be a little bit of a help to the owners.”
He explained further, the purpose of the initiatives and how they are applied by The Liberian Registry, “We’re trying to ease the burden, we don’t want to charge owners for fees and services on a vessel that’s not trading. We don’t think that’s a fair business proposition, we only charge fees to the owners when the vessels are trading and they’re making money in which in turn we will then also enjoy our fees.
We waive the initial statutory registration fees, mortgage fees, annual tonnage taxes as well if you’re vessels are laid up for over 12 months. If it’s laid up for under 12 months we can differ any payments until such time the vessel is activated and we do have both hot and cold lay-ups available.”
Issues and their solutions are also taken care of as Mr. Peretti points out, “Compliance is a big issue if your ship gets detained in a port you’re going to lose money, you’re going to lose a lot of commercial viability of the vessel, you can lose rightship status, some of the majors for oil tankers have a strong impact on them as well as the time the vessel spent in the port and not trading.
We created a program around the existing technology as a free service to our owners where we track the vessels by LRIT (Long range identification tracking) satellite system that they all use and we set up zones around the key areas where ships have been getting detained namely Australia, China, Europe and the United States. We’ve seen a decrease in detention in Australia and China for the last three years which is quite unique. We had a rough year last year in the United States but this year we’ve reduced that down by 50% as well and it’s all because of this proactive approach in providing the owners with this service, it’s almost like we’re another layer of protection in addition to what’s going on.
We’ve really found leveraging technology is a great way to save money, we’ve created these online systems that will allow users to locally upload documents into our systems so that we can provide this service and this has been a big value add to our owners. We do that for our seafarers and as well as for our vessel trading certificates all of which is IMO approved.”
Giving further advice, “Also, what a ship administration can do is work at the governmental level to try and create new tax incentives and benefits, government to government which can then be passed along to ship owners and operators, this is what we did with China and the last year we signed a maritime trade agreement with the government of China. Liberia interestingly enough is part of the One belt one road strategic plan that China has and they were looking to Liberia for some of the resources, we tried to get something back from the Chinese and that was a port dues reduction for Liberian vessels when you call in a Chinese port. So now a Liberian vessel would be taxed the same as a Chinese vessel, that’s a 28% savings.”
Source: Kavita Mishra / TST Newsdesk