At the forefront of the shipowner industry for over 110 years
Regarded as one of the world’s most influential international shipping associations, BIMCO’s membership controls 56% of the world’s tonnage equating to an astonishing 1 billion DWT. Whether its penning documents, contracts and clauses, organising training courses, offering expert shipping analysis or a whole range of other support services, BIMCO acts as a true voice of reason across the shipping industry. Incredibly, the association manages all of this and more with a small team of just 50 employees. Daniel Barnes asked Angus Frew, who has held his position as Secretary General and CEO of BIMCO since 2013, about a number of key issues affecting BIMCO, its members, and the wider shipping community.
Angus Frew, Secretary General and CEO
BIMCO has been a trusted name across the global shipping industry for over 110 years. In recent times, how has the organisation’s role changed?
When BIMCO started in 1905, it was actually a cartel, or ‘conference’ that managed the shipment of timber out of the Baltic and White Seas. The first meeting was held in 1913 in Paris, this later developed into our Documentary Committee, and the first standard charter party was drafted in this meeting. Obviously, we didn’t continue to be a cartel or conference, and over the years BIMCO has evolved and changed to become the world’s largest shipping association.
Today, we are still famous for our work on documents, contracts and clauses on behalf of the shipping industry and it’s estimated that over 75% of maritime transactions around the world involve the use of a BIMCO contract.
However, we now offer so much more to our members. Firstly, our products, which include an internet contract editor for all BIMCO contracts called IDEA, which is available to the whole shipping industry and guarantees the user has an original version of a BIMCO contract which can be amended or altered as they need to. We also run the BIMCO Shipping KPI System which can be used to benchmark ships’ operational performance.
Our second area is regulation where we take an active role on behalf of shipowners in shaping future regulations with global and regional regulators, in particular working closely with IMO. Our goal is to work towards a level playing field for shipping, ensuring that the regulations are workable and our members can implement them.
Our third area of focus is providing our members with information and advice. Our staff are all experts in their field and share their knowledge on contracts, navigational issues, safety, environment or helping members recover debt to the tune of $3 million dollars a year.
Finally, we offer a wide range of training activities including face-to-face courses, eLearning, webinars and tailor-made courses for companies. Many of the courses focus on our standard contracts and clauses.
What are the biggest challenges currently facing BIMCO and the shipping industry at large?
The biggest challenge for the entire shipping industry right now is poor freight market conditions. In general, cargo volumes are growing across the board but not as strongly as they used to. As this is happening at a point in time where most shipping sectors face a glut of shipping capacity, the freight rates are correspondingly low.
There does not seem to be any sign of a large-scale recovery any time soon for the main shipping sectors. A new normal has been established with a slower growing demand side, but until the supply side adjusts thoroughly, profitable freight rates will not return.
As far as regulations go, the shipping industry faces a number of challenges, one of the biggest being the 0.50% sulphur cap for fuel oil used outside emission control areas – which comes into force on 1 January 2020.
There are many challenges including how and who will enforce this regulation on the high seas, the quality of fuel oils and their suitability for use on board ships, and will there be sufficient production capacity to satisfy demand for low sulphur fuel. There are no easy solutions to the range of potential problems. But, effective implementation is needed to ensure a continued level playing field for the industry with no winners or losers from uneven enforcement.
BIMCO recently produced a unique analysis model, named the Road to Recovery, designed to highlight the actions needed for struggling shipping sectors to recover – and to track their progress. What were the main points the report highlighted?
In 2016, the dry bulk shipping sector experienced some of the worst market conditions in recent history, with companies all over the world affected. BIMCO’s response was to produce the Road to Recovery.
The analysis on the Road to Recovery for the dry bulk sector prescribed a ‘zero supply side growth’ scenario for the recovery of the dry bulk market. This required shipowners to neutralise the delivery of new ships every year by scrapping an equal amount of capacity from the existing fleet.
But the impact of the crisis in the dry bulk market is deeper and more complex than initial data alone could show. It has had a knock-on effect for many companies that do business with the dry bulk sector and will, in some cases, change the way they operate.
In October 2016, BIMCO produced a second report on the impact of the dry bulk market crisis – not only on shipowners but also on the wider shipping industry, including brokers, bankers and shipyards. An update will be published later in 2017.
BIMCO will extend this series of analysis by looking at the tanker sector in the last quarter of 2017. These market analysis reports are freely available on the BIMCO website.
Under BIMCO’s statement for the fair treatment of seafarers, it says: ‘BIMCO is opposed to liability regimes which include presumption of guilt rather than innocence of seafarers’. Is this a mindset that is improving across the sector?
Unfair treatment of seafarers takes many forms. There is a risk of unfair treatment of seafarers when incidents take place that involve for example pollution from ships or smuggling. Other kinds of unfair treatment can relate to the attitude of port state control officials towards ships’ crew and abandonment of seafarers.
Unfair treatment incidents have an unacceptable impact on the seafarers involved. These incidents also damage the image of the shipping industry and its ability to attract and retain qualified seafarers.
BIMCO promotes fair treatment of seafarers in all respects, in line with the 2006 IMO/ILO Guidelines on fair treatment of seafarers and the 2010 IMO Casualty Investigation Code.
It is essential that states meet their international obligations under UNCLOS, including article 230, that bars states from imprisoning seafarers serving on board foreign ships except in cases of wilful and serious acts of pollution within their territorial waters.
Work at sea is becoming increasingly stressful for seafarers and good mental health and appropriate support is a subject that is becoming more important to many across the industry. BIMCO is aware of and supports many different initiatives to set up services to help, support and advise crews on this matter.
In light of the cyber-attack in June, which Maersk said cost the shipping giant approximately $300 million, how much of a growing concern are cyber security breaches for BIMCO’s members? Have any additional actions been taken by the industry since the NotPetya ransomware attack?
The maritime industry certainly woke up to the potential impact a cyber security incident could have on ship operators, ports and the industry as a whole, following the NotPetya ransomware attack. A number of reputable companies, including Maersk, found themselves vulnerable despite their cyber security measures, in the face of increasingly sophisticated attacks orchestrated by criminal organisations and individuals.
BIMCO believes that there is a need to apply a holistic approach to cyber security, to ensure that every individual is aware of the threats and every organisation has a robust system in place, allowing an organisation to quickly detect and recover from a cyber-attack.
Internationally, the need to do something has also been recognised, with the IMO adopting industry guidelines on maritime cyber risk management earlier this year. The IMO’s guidance offers high-level advice on maritime cyber risk management to safeguard ships from cyber threats and vulnerabilities.
BIMCO has led the development of industry guidelines for cyber security onboard ships with the second edition of the industry’s own ‘The Guidelines on Cyber Security Onboard Ships’, being launched in July 2017. Fully aligned with the IMO’s guidelines, it includes new information on insurance issues, segregation of networks, as well as practical advice on managing ship to shore interface, handling cyber security during port calls and when communicating with shore side. It also covers contingency planning and responding to, and recovering from, cyber incidents.
The advice is aimed predominantly at shipowners but also focuses on the ports’ industry too, and is regularly reviewed to reflect industry requirements and new developments in each sector.
Moving forward, BIMCO is keen to encourage ships and port operators to learn from the experiences of others and to work together to ensure that sufficient protection is in place. This would be easier if the industry shared incident information and best practice. BIMCO has evidence that individually, shipowners and port operators manage cyber security incidents fairly frequently, but until the industry as a whole shares its experiences, there is little opportunity to learn and protect against a major breach in the future.
The Guidelines on Cyber Security Onboard Ships can be downloaded for free from BIMCO’s website.
Please tell Inside Marine a little bit more about BIMCO’s current membership figures and organisational structure.
Today, we have more than 2,100 member companies, from over 120 different countries and represent well over half of the global tonnage at around 1 billion DWT.
Our membership mirrors the industry we represent. Greece is the biggest in terms of number of members while Japan leads in terms of tonnage. Of the 10 largest members, five are from Europe and five from Asia.
Our members have some 5,500 ships in the BIMCO KPI system which forms a valuable ‘industry average’ by ship type, against which shipowners can benchmark their ships.
Our 50 employees are mainly based in our head office in Denmark, whilst others are based in our regional offices in Shanghai and Singapore, and some work remotely in the UK.
How does the organisation ensure its members voices are heard and collectively acted upon?
We are principally a ship owner association with shipowners sitting on the committee that make decisions about the future direction of BIMCO’s work. In particular, both its documentary and regulatory policy work.
We work closely with the IMO because we share a common goal – shaping regulations on behalf of the shipping industry in order to retain a level playing field and fully represent the views of our members.
Shipping is a global industry that needs global regulation and as we represent members from over 120 countries, we need to cover regulations that address very different demands and needs. With that in mind we also work closely with US regulatory bodies including US Coast Guard, US Department of State and US Environmental Protection Agency as well as with the EU and the European Commission.
2016 saw the completion of BIMCO rebranding itself, complete with new website and logo. Why was this deemed necessary and what feedback has BIMCO received from its members?
It’s a tough market out there so we need to ensure we remain relevant to our members and respond quickly to their changing needs. So, we started with a complete communications review, asking our members through a survey, their thoughts, comments and perspectives about being part of BIMCO. We were really happy with their responses as it clearly showed we have a very loyal membership base, they trust us and being a BIMCO member meant others wanted to do business with them too.
We knew we needed to refresh our look and members told us our website was not very user-friendly. With over three million page views on our website every year and with such a broad membership, developing our website was extremely important.
Through the research we also found out that many of our members weren’t aware of all the services we provided so we knew our communication needed to improve.
BIMCO’s new website has been designed with – and feedback from – the users of the site. Over 1,000 members took part in testing the new layout and structure. As a result, the new website is more helpful, easier to navigate and intuitive in its design. The responses have all been positive.
Moving forward, the organisation has made a real effort to communicate more about the services it offers and industry developments. We continue to produce new publications sharing advice and relevant information in a more modern and accessible format – with both printed and digital online copies.
Earlier in 2017, BIMCO launched its new Chinese name - 滨客. What were the key reasons behind this, and how has it been received by the Chinese shipping industry thus far?
In 2013, we established a regional office in Shanghai reflecting the fact that China plays a key role in the global shipping industry today. BIMCO’s Shanghai office provides guidance and expert advice not just to our members in China, but across the whole of the Asia region.
BIMCO wanted the Chinese name to be well known and identifiable and to create something that truly said ‘what BIMCO is’ to the Chinese shipping industry.
The meaning of the Chinese name ‘滨客’ reflects BIMCO’s new mission: To be at the forefront of global developments in shipping, providing expert knowledge and practical advice to safeguard and add value to our members’ businesses.
Feedback from customers across the region has been positive, they have welcomed the new Chinese name and the meaning behind it.
Finally, what is the organisation doing to entice and inspire the young and next generation of shipping upstarts into the profession?
BIMCO has a wide range of training activities including face-to-face courses, and eLearning. We are also producing more and more webinars with our industry colleagues. Webinars are a great way of introducing our contracts or market analysis to a new audience and have a panel discussion at the same time.
Our Introduction to Shipping course is specifically designed to provide students with a comprehensive and broad understanding of the maritime industry.
Likewise, BIMCO’s popular annual summer school is for those in the early stages of their career. It has taken place for 15 years, attracting more than 800 participants. The course is an intensive crash course on all shipping-related matters that can possibly be covered in one week. Blending basic principles on bills of lading, voyage and time chartering, laytime and demurrage, mixed with practical examples and case studies.
We also sponsor Young Shipping Professional events in many locations across Asia and Europe to highlight what BIMCO does and try to attract and keep a younger generation in shipping.