His belief that the oversupply of bulkers will continue for the next two to three years, keeping freight rates low, is one that is shared by many.
Chandratat’s cautious approach, stemming from his years in banking, has resulted in the company drastically scaling down its dry-bulk fleet.
Thoresen has been steadily shrinking the fleet from a 2008 peak of 49 ships, most of which were general cargoships and handysizes. The final few scheduled for disposal will be purged over the next few months, leaving the company with 15 handymaxes, supramaxes and panamaxes.
When Chandratat took the helm at Thoresen, 95\% of its revenue was derived from dry bulk. This has dropped to 33\% and is expected to fall to 20\% by 2013 as the company continues to switch its focus to energy-related activities such as offshore shipping and coal mining.
“The outlook is what drives our strategy,” he said.
Thoresen, Chandratat adds, has developed several broad strategies to cope with present market conditions — one being that the company will only operate the most modern and competitive vessels.
“When our fleet was at its peak, the average vessel capacity was 27,000 dwt and the average age 20 years. Once we are down to 15 ships the average capacity will be 44,000 dwt and the average age 10 years. We have chosen to keep only the most competitive vessels.”
Thoresen still has three very delayed 53,000-dwt bulkers on order at Vinashin in Vietnam. The most recent indications are that the first two will be delivered in 2012 but the status of the third has yet to be confirmed.
“The order still exists. The contract is still around but I don’t know if it will ever get built,” said Chandratat.
The vessels are part of a series Thoresen booked at lesser-known Southeast Asian yards before the 2008 market collapse. Last year, it walked away from a quartet of 50,400-dwt bulkers ordered at PT Pal Shipyard in Indonesia.
The company booked the ships at the end of 2007 but no work had taken place by their delivery date and it was clear the yard was in no position to build them.
As a stop-gap measure, Thoresen bought a couple of modern secondhand supramaxes.
Chandratat confirms the company has no plans to acquire additional dry-bulk tonnage.
“We are happy to run our current fleet for the next three years. We may take some vessels on time charter to meet contract obligations but we won’t be buying ships until market conditions are more favourable,” he said.
Along with new ships has come a new strategy that has seen Thoresen move its focus from spot to longer period charters.
“We want to stay closer to our core customers and position the fleet on medium and long-term contracts with industrial clients,” Chandratat explained.
Medium and long-term period charters and contracts of affreightment (COAs) currently form about 30\% to 40\% of Thoresen’s dry-bulk activity, with the remainder being spot and short period charters. Chandratat wants to boost the percentage of longer period and COA business to at least 60\%.
Once markets begin to show signs of improvement, the company’s dry-bulk fleet will grow to between 20 and 25 ships.
source:tradewindsnews.com
