1. INTERTANKO – who we are and some of the challenges for the 21st century
Bill Box
Senior Manager Communications & External Relations
INTERTANKO
Ghent & Antwerp University
Monday 11 November, 2013

2. INTERTANKO What we do: What we work towards:
Provide leadership to the tanker industry in serving the world with safe, environmentally sound and efficient seaborne transportation of oil, gas and chemical products
What we work towards:
A responsible, sustainable and respected tanker industry, committed to continuous improvement and constructively influencing its future ...
... zero fatalities, zero pollution, zero psc detentions

3. INTERTANKO – the figures
220 members
3,250 tankers
284m dwt
40 countries
75% of independent fleet > 10,000 dwt
+ 300 Associate Members

5. INTERTANKO – strength in its committees
Associate Members
Bunkers
Chemical Tankers
Documentary
Environmental
Human Element
Insurance & Legal
Offshore Tankers
Safety & Technical
Vetting

6. INTERTANKO – c h a l l e n g e s
Sustainability
Tanker Supply & Demand
Green Transportation
Piracy

7. Sustainability

8. Strategies for s u r v i v a l
Sustainability
Commercial sustainability = viability
Strategies for s u r v i v a l
Is the old way of doing business the right way for the second decade of the 21st century?

9. INTERTANKO – viability and sustainability
Today’s tanker market is unviable
and poses a serious threat
to the sustainability
of the energy supply chain

10. INTERTANKO – viability and sustainability

11. INTERTANKO – viability and sustainability
Un-viability manifested
+ in charter/freight rates not covering basic vessel operating costs
+ in the late payment of freight and demurrage
hits owner’s cashflow
increases owner’s working capital req’t
+ in inconsistent, unbalanced charter terms

12. INTERTANKO – viability and sustainability

13. Estimated accumulated losses VLCCs + Suezmaxes + Aframaxes
$ billion

14. INTERTANKO – Sustainability Project
Aim:
To realign tanker industry key stakeholders,
and to work towards more balanced tanker trading conditions and fair risk sharing,
that will allow sustainable quality shipping regardless of market cycles.
To change bad habits/practices (late payments)
A m b i t i o u s aim?
Start with some specifics ...

15. INTERTANKO – Sustainability Project Specifics:
Erosion of, and failure to adhere to c/p terms
Lack of understanding about Worldscale
Inconsistent, subjective, costly vetting practices
Delays in freight and demurrage settlements

16. Sustainability Project

17. Accumulated losses since 2009 for large/medium tankers $26bn
Sustainability Project
Headline figures:
Accumulated losses since 2009 for large/medium tankers $26bn
The same again (or more) accumulated by the smaller sizes

18. Tanker supply and demand

19. Tanker supply and demand - the key
Weak market, uncertain fundamentals
Oil demand increasing 1-2% pa
But oversupply of tankers - physical and operational
Increasing North American oil supplies (shale oil) replacing Middle East oil
Reduced tanker tonne-miles

20. Tanker tonne-mile effect
100,000 tonnes
North Sea/NW Europe (530 miles)
53m tonne-miles
Middle East/NW Europe (11,150 miles)
1,115m tonne-miles

21. Tanker indices %

22. Tanker fleet development (Assumed max phase-out)
m dwt
number
Assumed orderbook August 2011, include chemical tankers
Tanker fleet increase some 72%

23. Tankers – green transportation

24. Average age tanker fleet above 10,000 dwt
Years
Based on LRFairplay

25. Shipping is energy efficient
Toyota Prius - 1 tonne, 1 kg CO2, 12 km
Source: Danish Shipowners Association

27. Int’l shipping - environmental performance
Industry programmes in conjunction with the IMO:
Oil pollution
- reduced by > 95% since 1970s
Engine efficiency
- improved by > 20% in last 15 years
Volatile Organic Compounds (VOCs)
- voluntary measures - VOC emissions down by > 80%
and over the next ten years will also deliver:
Toxic air emissions (SOx and NOx)
- sulphur oxide (SOx) emissions being further reduced by c. 90% and nitrogen oxide (NOx) by c.60%

28. Design Index (EEDI) Ship Size (DWT) Reference Line Today 10%
Industry pushing mandatory efficiency improvements Reducing GHG emissions on new ships by 30% by 2025
Design
Index
(EEDI)
Reference Line Today
10%
Attained EEDI < Required EEDI
Phase 1
20%
Phase 2
30%
Phase 3
on and after 2025
Ship Size
(DWT)
[Tankers>20,000 DWT]

29. Shipping is energy efficient
…… and still has a massive incentive to continuously reduce its GHG emissions
US $ 240,000,000,000
- the annual fuel bill for international shipping - and one that is set to rise as oil prices rise and cleaner fuels are introduced
- fuel bill is often % of total operating costs

30. Piracy

31. Naval arrest and prosecution of pirates

32. Piracy - Somalia 2009 Statistics 2011 Statistics 2013 Statistics
hijackings (21% of incidents)
2011 Statistics
hijackings (12% of incidents)
2013 Statistics
- 6 attacks, 1 hijacking (brief),
- numerous ‘suspicious incidents’

33. Thank you for your attention