The past few years have been some of the most challenging ever faced by many of our Members. On 18 February 2014 the Baltic Dry Index reached an all time low. Many in the shipping industry were already suffering when the oil price began a record plunge. By 2016 the price of Brent Crude had dropped from its 2014 level by 70%.
The declining state of the market has led to very difficult trading conditions for vessel operators. Record numbers of vessels are in layup with charterers slashing rates or terminating charterparties altogether. Unfortunately, many analysts predict the oil price will not increase significantly in the near future and, as some vessels approach the end of charter periods, owners are asking questions about layup or looking elsewhere for new business.
As a result our Underwriters and Claims people have been inundated with common questions from Members, mainly regarding how they can endure current market conditions. Members want to know what to do about their Charterers threatening to cut rates, entering new contracts with unfamiliar entities and relocating tonnage or placing vessels into layup, amongst others.
As always, the Club aims to assist Members wherever we can. Together with CTRL, we have drawn up this guide answering recently received queries. Staff from the Club and CTRL bring their experience to bear in setting out tips and advice for Members in the current market, which we hope will be of assistance.
If Members have any other queries, they can of course speak to their broker or one of our underwriting, claims or loss prevention team members directly.