Barrie Stevens

Look what happens when iomtoday.co.im stops allowing comments; its long term resident nutjob / loony / writer of long boring diatribes that nobody is interested in immediately registers here. Nobody is interested in your whack-job theories Barrie. There's enough angry nutters on here already and most of them actually live here. You don't so why don't you just sod off? Really? And after all the ships I have run and and chartered? All the articles and books I have published? I am trying to save you from yourselves! You're trying to save us from ourselves? That's a pretty arrogant statement. When the end of the world in nigh for the Manx nation just as the storm clouds gather if I see some hapless loony in a brown bri-nylon suit with their underpants on the outside of their trousers and a tinfoil hat on I'll know that I was wrong to doubt the powers of "Super Barrie" to save us from armageddon. And are you a shipbroker? Have you ever been in the international shipping market? Have you ever run ships? I can see where you are going and also I wrote about this very subject in the "Examiner" five years ago and now it is happening. Good stuff I am giving you, and all, free! Stay with the Steamies!

We speak of charter on a long term basis not as and when required such as TT. This was covered in my post. It might help if the Steampacket could charter bare-boat which is like a lease and means you do not have to buy. This might relieve capital and yet retain essential IOM services. The Island's problem is backing up physical shipping ie like real ships as your life line and not falling into the accountancy/balance sheet/hedge fund trap. Physical! Like the Falklands, the Western Isles etc. You need a ship to call your own even if by some fiscal arrangement. Do you really beleiove you can throw it to the market? You need leverage and without it will be subjugated by the EU your situation depends on your transport and your finance and to survive you must use the two as weapons. but chartering over 10-20 years will not be cost effective. and have you seen the div payments. they were not short of cash

Look what happens when iomtoday.co.im stops allowing comments; its long term resident nutjob / loony / writer of long boring diatribes that nobody is interested in immediately registers here. Nobody is interested in your whack-job theories Barrie. There's enough angry nutters on here already and most of them actually live here. You don't so why don't you just sod off? Really? And after all the ships I have run and and chartered? All the articles and books I have published? I am trying to save you from yourselves!

I have run fleets of ships from London, Calcutta, Hong Kong and Houston. You have not done so and know nothing on the subject. But when you on that Island give up physical control of Manx shipping and essential cargo interests via Tynwald's supine attitude (ie abandoning the Linkspan Agreement) and betraying the Steampacket (or its privileged successors) then your Island will slowly die under EU subjugation. Controlling the maritime lifeline is all you have left in the long-term. Smart-Alec comments will end in empty shop shelves. I am trying to help you!

The IOMSPC - just not with it's current owners or massive debt, or possibly even it's current boats. It is MIOM which is going to have the problem and the IOMSPC will be sold off for a fraction of what the current owners paid for it. Even if it only make £1million a year it will still be attractive to someone. I think Gilf-UK has given a very accurate summary of the state of affairs. Regardless of who holds the debt it is still ultimately to be paid and paid out of the revenue generated by the IOMSPCo. As Gilf-UK states, the operating company will most likely survive albeit with different owners/Management and I, for one, believe that wouldn't be so bad. Now, The Government needs to get down to some serious legislating concerning the regulation of their sea (and air) carriers and their ability to operate sensibly and finance themselves. They need to look at some form of rules that the assets, particularly Government contracts/agreements, may not be used to generate massive debt that threatens the survival of the service. And as Gilf-Uk also says the company may only, theoretically (and extremely conservatively), return a profit of a million pounds but that would be attractive to some operators. The Government needs to realise that the right to operate sea and air travel/cargo for the island is a major asset to the Island and not a favour performed by the carriers contrary to the spiel they (the carriers) try to feed us. One has EU and global obligations and not least the attitude of bankers and financiers compounded with their attitude to the Island as a financial centre. Your life is not your own anymore!

We speak of charter on a long term basis not as and when required such as TT. This was covered in my post. It might help if the Steampacket could charter bare-boat which is like a lease and means you do not have to buy. This might relieve capital and yet retain essential IOM services.

Hiding from Barrie Stevens?

Barrie's Reply on Finance. I am not well enough informed on the bigger picture of McQuarrie as an investment company. I am just a retired Baltic Exchange "hack" broker who sees shipping and chartering in "hands on" terms plodding round the market and getting on with it. ie the supply of tonnage and owners v disponent owners as explained. Shipping is full of speculators who do not own anything at all and just see a chance and if it works OK. If not, get out! Also, McQuarrie seems more like a Hedge Fund type of operation. They may indeed "create assets" which is what they do and then trade the conglomerate. I think they began with a large slice of the Australian National Insurance Fund (Pensions) or equivalent. However, whatever they do via the Steampacket they are still up against the global chartering market if the likes of Mezeron introduces the same. So chartering v capital obligations remain a factor. When we ran our 24 ship service to and from Africa we owned the ships on marine mortgages which in turn were supported each by a charter, except the ships were foreign flag and we chartered them to the liner company we had ourselves set up and owned and the bank loaned the money on the strength of those charters. (We set our own terms!) Disponent ownership you see. Our freights paid our own charter hires at rates we set above the market so you see what goes on! The bank was happy with our "dodgy" set up and we know well that banks have invested in all sorts of mad schemes recently. Two hundred million pound loans are not proof of anything least of all a service dedicated to the Island Linkspan Agreement or no. I have no idea of the value of "the Ben" or of the Steampacket's exposure to marine mortgage debt (if any) so cannot really comment to any effect. But I think you get the idea of what goes on. (How many people knew that ships are mortgaged and like houses, not all the money goes into the property 100% all of the time!) Without knowing the structure of the company, which I am advised is an Isle of Man company with half the Directors locally resident under the User Agreement, one cannot but guess. Depending on the set up and who has "first preferred" mortgage, (if there is one) it is possible for a creditor/lender to arrest and confiscate a ship and the Island does have an Admiralty Court. Likewise, depending on ties, ships can be reflagged and be registered in another country in very short order. Who knows if McQuarrie will yet have assets arrested? (I am introducing a conspiracy theory) I do not see either Mezeron or Steampacket as being fixtures anymore frankly!

Thanks for that Barrie. Very interesting to get a Shipping Industry point of view on the current debate albeit not in the exact context of the IoM. I would, maybe, add a few comments: You refer to Mezeron having access to cheap charters at the moment and may not be willing to keep up the service of/when the value of the charters increases again. Surely them starting with these cheaper charters gives them the chance to test the market and establish a service and, obviously, they are proving now that there is a viable business to be built so are bound to place it on a more solid footing? Or if not, at least they have done the ground work for someone else to realise the viability and take it over were Mezeron to withdraw. Also the SPCo have proved that the island is very lucrative for a Shipping service provider given the ease at which they have been able to borrow up to £200million against the value of it? Regarding the Fast Craft issue, I think it is generally accepted that Fast Craft, in their current design, are no longer a viable option for most shipping companies due to their inordinate fuel consumption. They were sexy for a while because they were new technology and fast and the customers embraced them and shipping company CEO's bought/chartered them as a status symbol - the sports car of the sea if you like... Then the reality dawned that they were just not viable. I believe the solution for the SPCo is to dispense with their two as fast as they can while they still have some sale value. Such vessels are advertised for sale around the world currently at way cheaper prices than their value, of say, even last year... They would probably be best served with another vessel similar to the Ben that they could use to service their extra summer routes and charter or indeed use themselves on other Irish Sea routes in the winter such as the UK > Ireland routes. And also able to handle more diverse weather. Trade on those routes for freight are growing all the time and operators such as Stena and Irish Ferries have noted an upturn in passenger numbers since the economic downturn. As I've stated before the SPCo need to get to a situation where, as a company, all their eggs are not in one basket. They need additional routes to ensure survival. I do not state and am not sure and certain that Mezeron currently has the benefit of depressed market chartering rates for the type of ships they have taken. That is speculation but it certainly is a lot cheaper than the multi-millions invested and contracted for by the Steampacket. Even in a slump a niche market and new or specialised first class clean tonnage can command a premium that defies the market.

According to the Progressive Action Group website the Steampacket committed to multi millions investment when acquiring "the Ben" and then even more over a period of time for the extensions to the Linkspan Agreement.I have not been able to get hold of the actual text. I am advised that they must invest and not charter in tonnage like Mezeron. It is not unfair because in return the SP got sole use of the link spans. That is and was the whole point of the agreement. The SP were tied into doing some things they might nother wise have done and in return they got a near monopoly. It might only be unfair if they got nothing in return. they did. It is as if the Island were getting its own little ferry service in that for the modest price of a Linkspan someone else (Steamies) had to invest tens of millions. The balance has been upset by Mezeron being acquired by Dohle and then introducing the global market into a vulnerable backwater. As a charterer, Mezeron, or whatever name they charter under, simply pays the monthly hire in advance plus fuel invoice as submitted by the owner who must pay the crew and maintain the ship. Mezeron must pay for port charges and any costs of loading and discharging under their Bills of Lading. The actual owner has a back seat really! If the Steampacket were released from its obligation to invest it might be allowed to Bareboat or Demise Charrter as a compromise. This is in effect a lease, and although hire is paid for a longer period than in Timecharter, the Steampacket would be practically the owner, employ crew, maintain the ship, insure it and have the right to paint in company colours. Further to this, have you considered that Mezeron might be building up the business so as to sell the operation and name to a bigger more ruthless operator who will care not a fig for the Manx passenger traffic? So taking the Linkspan off the Steampacket could be a disaster as then you might have the worst of all worlds. Alleviating Steampacket capital obligations might just help. We can only guess! I have known rivals like Mezeron be bought out or taken over by the very company they were competing with in order to shut them up - but also to maybe take advantage of a hard lesson. Steampacket takes over Mezeron?? It seems to me that political intervention is required if the potential situation is as dire as some say that it is.

Can see his point though no - without necessarily coming down on either side ? He is making an distinction between different established shipping models. IE a more or less liner service (ie typically regular, scheduled, fixed rates, owning or leasing vessels etc) vs chartering to pick up trade to exploit an opportunity. Seems to be a growing consensus that the UA, fast ferries, freight costs vs passenger costs and the huge borrowing are the issues. Which is more or less what lots of people on the IOM have been saying for ages. So if Mezeron forces the issue then that should be for the good. I am not "what-iffing" I am simply informing people of how the shipping business operates. If the Steampacket is emasculated and the Linkspan freed up you might see Mezeron expand but I can tell you that operators often build up a business and sell it on to a bigger/more ruthless operator. I have exposed some ideas in order that people may be briefed as much of this is a closed book and I at least have done it "hands on" which few posters have!

Fixed your post! Folks aren't in business to massage a social conscience. They're in business to make as much money as they can... Which is why they charge to satisfy political requirements and also to cover heavy capital obligations. The social side is part of the Island's political motivation to charter the Linkspan to the Steampacket.

It is not unfair because in return the SP got sole use of the link spans. That is and was the whole point of the agreement. The SP were tied into doing some things they might nother wise have done and in return they got a near monopoly. It might only be unfair if they got nothing in return. they did. It is as if the Island were getting its own little ferry service in that for the modest price of a Linkspan someone else (Steamies) had to invest tens of millions. The balance has been upset by Mezeron being acquired by Dohle and then introducing the global market into a vulnerable backwater. As a charterer, Mezeron, or whatever name they charter under, simply pays the monthly hire in advance plus fuel invoice as submitted by the owner who must pay the crew and maintain the ship. Mezeron must pay for port charges and any costs of loading and discharging under their Bills of Lading. The actual owner has a back seat really! If the Steampacket were released from its obligation to invest it might be allowed to Bareboat or Demise Charrter as a compromise. This is in effect a lease, and although hire is paid for a longer period than in Timecharter, the Steampacket would be practically the owner, employ crew, maintain the ship, insure it and have the right to paint in company colours. Further to this, have you considered that Mezeron might be building up the business so as to sell the operation and name to a bigger more ruthless operator who will care not a fig for the Manx passenger traffic? So taking the Linkspan off the Steampacket could be a disaster as then you might have the worst of all worlds. Alleviating Steampacket capital obligations might just help. We can only guess! I have known rivals like Mezeron be bought out or taken over by the very company they were competing with in order to shut them up - but also to maybe take advantage of a hard lesson. Steampacket takes over Mezeron?? It seems to me that political intervention is required if the potential situation is as dire as some say that it is.

The SP is a business. As such it has no "social obligations" and their fare structure and passenger "experience" serves to reinforce this. I suspect, because I do not know, that they were creaming it off from the freight and if passengers were a necessary evil in order to do this then so be it. I also can't see a "political decision" being required i.e. what do the worthies in Tynpotwald have to decide about? Exclusivity? With the lack of market research from the SP I have conducted my own. Having consulted my missus I can conclude that passengers want a fast, frequent service that is as cheap as chips and feeds them into the UK transport infrastructure as seamlessly as possible. I would have consulted Robert H Goddard on this thorny and complex issue but alas he died in 1945. Well, essentially for ever! I should imagine the tonnage the island requires is pretty much static. Sure there will be seasonal peaks and troughs but these will be understood and manageable. So your business plan is pretty clear cut. Or rather it was if you are the SP. Mezeron will also have a very clear idea of the SP freight margins which I suspect will give them a great deal of room for manoeuvre. The local physical market might be static and support two Mezeron ships on charter but will there always be continuity of supply on the chartering side if the market moves against you and you do not own your own tonnage like the Steampacket? Charters are for a limited time often with options. How will the market look when redelivery is due? This is why shipowning and chartering is so speculative. In fact "Rags to Riches and Riches to rags" is the industry norm. The whole point of the article in fact. The Progressive Action Group website contains alleged details of the User Agreement and of the many millions the Steampacket is obliged to invest in terms of ownership as opposed to charter as their price for the Linkspan Agreement. Freeing up capital may not mean disposal of Ben My Chree but options release and charter out or use elsewhere depending on the market. It is all about the global market once you let operators like Mezeron in and who have no capital tied up long-term.(Folks. I must apologise for multiple postings/Repeats as am still new to this site (Someone throw me a line and tidy it up. Lloyd's Agreement. "No cure no pay". What has Tynwald to do with it? Well, I am advised that the User Agreement obliges the Steampacket to lay on defined freight and crucially certain passenger services. I am advised that they are not allowed to charter tonnage for the main service such as is operated by Ben My Chree (They charter in for TT at times). Either way they are obliged to make many milliions in capital investment and this was the basis of ordering "the Ben" and the User Agreement extension is the basis for further future capital investment based on profitable freight revenues (now badly hit by Mezeron). It is a political choice as to whether the Steampacket can charter and not be obliged to invest permanent capital purely as a means of competing with competitor's chartered tonnage whereby they (Mezeron)pay monthly hire in advance for a set period (plus the cost of fuel oil and diesel, port charges, freight handling etc.) The Estonian owners merely own the ship and pay their crew and maintain the ship. Shipowning of the Steampacket variety is by nature long-term. They have been committed long-term by the User Agreement. Buying "the Ben" was always a compromise design. I can only guess at the "Steamies" predicament but I think if they are to survive they must at least have the option to charter (if it is currently banned) and possibly be relieved of massive capital obligations. Hence the polital decisions.

The SP is a business. As such it has no "social obligations" and their fare structure and passenger "experience" serves to reinforce this. I suspect, because I do not know, that they were creaming it off from the freight and if passengers were a necessary evil in order to do this then so be it. I also can't see a "political decision" being required i.e. what do the worthies in Tynpotwald have to decide about? Exclusivity? With the lack of market research from the SP I have conducted my own. Having consulted my missus I can conclude that passengers want a fast, frequent service that is as cheap as chips and feeds them into the UK transport infrastructure as seamlessly as possible. I would have consulted Robert H Goddard on this thorny and complex issue but alas he died in 1945. Well, essentially for ever! I should imagine the tonnage the island requires is pretty much static. Sure there will be seasonal peaks and troughs but these will be understood and manageable. So your business plan is pretty clear cut. Or rather it was if you are the SP. Mezeron will also have a very clear idea of the SP freight margins which I suspect will give them a great deal of room for manoeuvre. The local physical market might be static and support two Mezeron ships on charter but will there always be continuity of supply on the chartering side if the market moves against you and you do not own your own tonnage like the Steampacket? Charters are for a limited time often with options. How will the market look when redelivery is due? This is why shipowning and chartering is so speculative. In fact "Rags to Riches and Riches to rags" is the industry norm. The whole point of the article in fact. The Progressive Action Group website contains alleged details of the User Agreement and of the many millions the Steampacket is obliged to invest in terms of ownership as opposed to charter as their price for the Linkspan Agreement. Freeing up capital may not mean disposal of Ben My Chree but options release and charter out or use elsewhere depending on the market. It is all about the global market once you let operators like Mezeron in and who have no capital tied up long-term.(Folks. I must apologise for multiple postings/Repeats as am still new to this site (Someone throw me a line and tidy it up. Lloyd's Agreement. "No cure no pay".

As you quite rightly pointed out Barrie I am an amateur , the fact that the ship broking site I found happened to be in NZ doesn't really matter . I was merely trying to point out what alternatives there are to what the SP currently operate and thought that the vessels I linked gave a reasonable example of said alternatives . The 2nd site was Norewgian , fairly local I would have thought . Not criticising you. By "amateur" I meant anyone without experience just browsing the web. I am so long out of it myself now. Norway? MMm! Still not shipbroking mainstream to this former Baltic "Hack"

As you quite rightly pointed out Barrie I am an amateur , the fact that the ship broking site I found happened to be in NZ doesn't really matter . I was merely trying to point out what alternatives there are to what the SP currently operate and thought that the vessels I linked gave a reasonable example of said alternatives . The 2nd site was Norewgian , fairly local I would have thought .

CORRECTIONS "Creamed off the top" and should be "Disponent Owner".

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City. Firstly, short coastal trade and such as RoRo/RoPax was never my professional concern. I always passed such on to specialised brokers and took their advice on balance as this is what is required in such circumstances. London brokers Galbraith’s, Simpson Spence and Young and Clarksons have specialists active in the London market 24/7 and one cannot opine as an amateur by looking at miscellaneous shipbrokers’ websites. (Especially in New Zealand and despite globalisation!) Markets and opportunities change in seconds within modern ship broking! Far flung brokers in particular are not a good choice. You (or I anyway) need active London and/or Hamburg mainstream advice and I would favour Galbraith’s as I know their broker! Further, the Island faces a new situation deserving of analysis on what is needed for the long-term. ie Support your local sheriff! However, I was once very much involved at the very top with the late N D Papalios (NDP) of then famous Aegis Shipping (120 ships) in establishing an operation similar to the spirit of Mezeron but deep-sea using 24 old-style British cargo liners competing with then modern container tonnage. My late father Ken Stevens was an Aegis director and lynch pin of their operations. The line ran from N.Europe/UK to West and East Africa (Alpha West/East Africa Lines).The established lines “(ie Conference lines” here play the Steampacket role with their fixed high mutual freight rates). Like the Steampacket they ran a regular guaranteed service overall at (high) fixed rates. We muscled in and, with very cheap ships disposed of by Cunard, Blue Funnel and Furness Withy, were able to undercut all competition. Shippers couldn’t get enough. We creamed off the off. Then NDP changed his mind two years later. The market had turned and his ships could do better in the chartering market. No more hassle! In and out! We dropped our customers leaving them to their fate and revenge of the Conference lines. Mezeron’s latest container service is not a “line” like the established Steampacket. It is a container feeder service using typical small feeder ships which buzz about distributing small stuff especially that offloaded by the massive deep-sea container ships of which I gather many are currently idle with excess supply of space. The Baltic Freight index is on the floor. Presumably such ships as used by Mezeron are currently very cheap on daily hire rates? Will they always be so? How long are they chartered for? The market may turn upwards and the owners might not want to stay on charter to Mezeron when the period expires? Alternatively they may be grateful and re-charter or extend! Tonnage may not then be cheap? Tonnage might be very cheap? Will Mezeron be so competitive in an upwards chartering market? Will they even bother any more not being tied to the Linkspan Agreement? Who can say? I should explain that when time-chartering tonnage one is like the real owner and known as a “desponent owner”. One can withdraw from the Island and sail away perhaps and sub-charter in the open market. Some small container feeders can have their fittings removed and operate as small gearless bulk carriers loading grain as I recall hence possibly more flexibility for the disponent owner. Mezeron thus has ultimate flexibility but the Steampacket has alleged social obligations. You need a political decision but not subsidies I hope. Do you want a dedicated line accepting the good and the not so good aspects of the “Steamies“? Do you want to face savage open global competition and lose security of varied freight/passenger services? If so, use it (The SP) before you lose it! Don’t be short-sighted. Effectively, the Linkspan has been chartered to the Steampacket. I have known such agreements broken by way of sovereign immunity. The market will decide and you are letting the market in with a vengeance for such a small and vulnerable community. I am advised that the Steampacket must buy and own ships and not charter. Subject to the Steampacket’s business plan, maybe it too should be allowed to charter suitable tonnage and relieved of some passenger obligations, thus freeing up capital, (one supposes), and make its dispositions accordingly in the light of Mezeron’s current competition. (IF it can count on your support.) Such however will result in job losses and a leaner “NHS” type of passenger/car/bike service? Is that what you want? I think such is inevitable just so long as Mezeron have suitable tonnage available on charter without the obligation to commit capital and would be surprised if they even wanted to assume the Steampacket’s passenger responsibilities. In the meantime, two (is it?) container feeder ships have full employment - but for how long?

EEE read "amendments"

Can anyone please advise where I can download full text of User Agreement and amendedments I want confirmation that SP is not allowed to charter in tonnage for its regular service. I have not found it on Govt and Departmental sites. Thank you!