The Maritime CEO Forum was held at the Yacht Club de Monaco, where stakeholders in the shipping industry discussed the current state of the industry and challenges arising from geopolitical developments. In this event, Sam Chambers, editor of Splash, pointed to the impact of current wealth on shipowners' behavior.
Growth of Ship Revenues and Its Challenges
Burak Cetinok, head of research at Arrow, noted the unprecedented growth in VLCC ship revenues this month, calculating it to be 14 times the 10-year average. According to Cetinok, this increase in revenues is due to significant developments in the transportation market and ship buying and selling activities.
Despite these impressive numbers, Cetinok observed no immediate signs of sales in the conventional shipping industry. He identified new capacity as his main concern and warned that as order volumes reach about 25% of the existing fleet, revenues typically decline in the next 24 to 36 months.
Risk Management and Energy Security
Sven Moxnes Harfield, CEO of DHT Holdings, had an optimistic view of the VLCC order book, stating that by the end of 2029, nearly half of the fleet will be over 15 years old. He believes that shipowners are in a better position due to reduced debts compared to the 2008 crisis.
Harfield emphasized the necessity of avoiding haste during boom times and pointed to the challenges of securing oil. He provided an example of a refinery customer who accepted a longer 40-day voyage and a 50% higher shipping cost to avoid increased risks in the Red Sea.
Ghas Majd, founder and CEO of Paratus, described the growth in ship revenues as a logical response to the disruption of energy routes and refining markets. However, he warned that the frequency of security attacks makes returns on investment less attractive after risk adjustments.
Renee Kafod-Olsen, CEO of V.Group, warned about operational vulnerabilities during this period of record revenues and emphasized the need for investment in systems and staff training. He advised owners not to treat crews and technical management as commodities.
Andy Dacy from JP Morgan Asset Management warned against chasing ships at market peaks, while Lars-Christian Swensen, director of Bruton and Himalaya Shipping, stressed the importance of flexibility.
