Nova Tankers leads the pack in VLCC spot-market race

With 44 vessels now under its wing, the new tanker pool has climbed to pole position but despite its size, brokers say it has had little impact on rates.

VLCC pool Nova Tankers has, in the space of a year, become the biggest spot-market player in the sector.

The pool, which started up in early February 2012 with the ambition of operating 50 ships by the end of the year, has now reached 44 units.

Nova is headed by former AP Moller-Maersk director Morten Pilnov. The Danish owner is the biggest contributor to the pool with 19 units, a figure set to increase by one more in April.

The second-biggest participant is Mitsui OSK Lines (MOL) with 11 ships, followed by Ocean Tankers with nine and Samco Shipholding with five.

But it is likely that the spot pool has now reached a plateau.

It is not in concrete talks with other potential members and it appears that MOL, with a total VLCC fleet of 35, prefers to keep the majority of its ships covered by time charters.

Nova has come a long way in a short time and is already by far the biggest player in the spot space.

Frontline has 26 units operating spot, similar to the other big VLCC pool — Tankers International (TI).

Pilnov says he is very pleased about the results Nova has achieved. He claims the partners have been streamlining their operations so that customers can expect the same service regardless of where the ships come from.

Efforts to reduce fuel costs have yielded substantial results. The Copenhagen-based boss reckons that by reducing speed from 13 knots to 10.5 knots, savings of between 10 and 15 tonne per day per ship can be achieved.

“This means quite a lot when you have 44 ships,” he said.

In spite of its size, Nova only controls 8% of the market and brokers believe the pool has had little impact on rate levels. Pilnov says it is difficult to gauge.

“It is a volatile, competitive market,” he said.

Market sources give Nova and its management credit for having “disciplined the partners, especially Ocean Tankers and Samco, who previously did not take a very tough position in negotiating rates”, according to one key player.

Nova is also getting credit for exploiting different employment opportunities, such as round trips from West Africa to China.

The fleet is young, averaging 4.9 years, but there are also some less modern ships such as the 314,000-dwt Kaimon 2 (built 2002) from MOL. Pilnov says that although age is an important criteria, quality matters more.

“Ten-year-old ships can be very good,” he said. The pool has a 15-year-old age limit.

Looking ahead, the Nova boss does not have overly high expectations for 2013 given the continued supply of newbuildings.

“I expect the year to be very similar to 2012,” said Pilnov.