Tankers and Liners on the Info Trail

Information is power, which I continue to be reminded of amidst the blur of webinars and actual (unscripted) events. One of the better webinars that I took in was organized by an information arm of a leading commodities trader- offering a great view of fuel availabilities and pricing at bunkering ports all over the world. The presenters offered varied perspectives on the likelihood, or not, of shipping market recoveries- back to that in a little bit. But, as I listened and watched, it dawned on me that the parent company had actually jettisoned a large physical fuel supplier under its wing, a few months back- just before the pandemic hit. Yes, the information provider (presumably also feeding the occasional proprietary tidbit to the crews on the trading desk) stayed, and the physical supplier departed. It reminds me, more than slightly, about the MBA-laden shipowners who have now created information products for the chartering community. My younger self (a shipbroker struggling with computers) sure would be wishing for such products.

One of my pet themes is that shipping can no longer hide from the broader world. This reality was brought vividly to the fore by a new product offering that I learned about. Readers may remember a few weeks back my confessions of a fascination with maps and geospatial information systems (GIS). I have a long way to go- though I’ve now been able to quickly plot little dots representing vessel positions onto maps from Google and ESRI. But I did read with interest that one packager/ provider of Automatic Information Systems (AIS) data, showing positions and voyage specific datapoints on vessels in deepsea, coastal and inland trades alike, will now be providing its data on a major package for GIS developers. The announcement of this tie-up and the availability of vessel data to a whole new universe of “map makers” (lots of youngish computer geeks, not grizzled cartographers with quill pens) was just a further reminder of information’s importance. And, no, ship owners- or charterers, for that matter, it’s very hard to hide- the AIS data provider says that its archive goes back at least 10 years. To me, such developments are exciting, laying the foundation for information products that we can only imagine at this point.

Then, we come to the “real world” where a take-over tryst in the product tanker business (where strategic tie-ups are becoming the norm) is in its early days. If you drink the consolidation kool-aid (for me…still thinking about it, but I think “yes”), this sector is where it’s happening. As share prices have dipped- along with daily hires, one large player has apparently made a bid, summarily rejected, for shares of another listed player where the price has fallen mightily from its late April highs. Clearly, the potential buyer and seller are worlds apart, as the once flowing contango and storage tides have now ebbed.  But on the information front, I see big big benefits for owners, where information gets pooled along with the vessels.  Interestingly, the potential buyer did praise a pooling arrangement, publically, in the sector (involving two different companies) just prior to making its shares for shares bid.

Back to the webinar, the quote of the week, not surprisingly, was along the lines of the impossibility of making market predictions in such a dynamic environment. But the “analyst” on the call presented compelling charts to show the value of “discipline”, in the liner shipping context, where capacity management as led to relatively modest drops in $/TEUs, against the backdrop of plummeting demand for containerized cargoes. With sharply lowered fuel prices (displayed on webinar graphs), the bottom line has surprised to the upside (even with the dips in the top line per box). Oh, yes, the top carriers do indeed control the majority of capacity.