‘Consolidation is needed’

Bulker owners and operators offered sharply divided opinion today on whether the dry-bulk space is in need of consolidation.

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Torvald Klaveness dry-bulk head Jan Klingsholm told a New York audience that pooling large fleets brings more than just pricing power, but also economies of scale, vessel optimisation and efficiency.

“Consolidation is needed in order to bring better returns to investors and to shipowners,” he told the Marine Money Week conference. “We do that through scale and efficiency. We do it through craftsmanship and shipping knowledge.”

He says operating more than 120 vessels through pooling arrangement allows Oslo-based Klaveness to beat spot chartering indices.

But executives for two New York-listed bulker owners fired back with an opposing view.

Safe Bulkers president Loukas Barmparis said defended the smaller operator’s ability to deliver the same earnings and operating costs advantages of a larger company.

He said Athens-based Safe, which has a 31-ship fleet, is able to beat market indices without participating in pools.

“I definitely agree that we may see some consolidation but in fact the shipping industry will continue to be fragmented basically because the finances behind it do not help consolidation,” he said.

Barmparis explained that shipowners can earn the same revenue per ship whether they have 20 ships or 200, and companies with smaller fleets often have lower operating expenses.

Ted Petrone, president of Piraeus-based Navios Corp, agreed.

“The container industry is the most consolidated, and look where those rates are,” he said.

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