The banks are the new ship ownersThe Danish shipping company Scan-Trans Worldwide with Lars Juhl as CEO

has just regained its strength after a tough turnaround.The company experienced as one the fi rst – of few – Danish ves-

sel operators to have a ship hijacked – an event that made a

great impression on Lars Juhl, and led to employment of armed

guard by every passage through Somali waters – and a true dis-

appointment with the insurance world’s way to value human life.

Today he calls for a pirate-solution involving a UN fee for all ves-

sels passing to pay for a local coast guard service off Somalia.

Scan-Trans Worldwide had a hard time during the crisis for ship-

ping right after the late 2008 breakdown. That was close to a

pirate event, where ”Amiya Scan” was hijacked for 31 days and

Lars Juhl and his colleagues had to personally arrange a ran-

som delivery of 1 million USs weighing 40 kilos to get the crew

released. The loss ended up practically being the companies

alone.

To add to troubles Lars Juhl last November practically died of a

heart arrest surviving only by a rapid resuscitation action from

his wife and later the hospital.

Now things are once again moving in the right direction:

- We are coming out of 2011 with what right now looks like a very

small plus of 200.000 – 300.000 USD, but it is a signifi cant im-

provement for us compared to the past two years 2009 og 2010,

MARITIMEMAGAZINE

DANISHERHVERVSMAGASINERNE

CLR go for a high standard in ships. Crews tend to treat the ships a bit like their own home.

2 - 2012

which have been very challenging. But the turnaround we have

been through, has worked. We are back in black. Lars Juhl states.

- So we expect 2012 to be a good and profi table year. We are

looking much brighter on the future now. Especially the oil and

gas industry in the US is full speed ahead. We see that some of

the big engineering houses like Bechel and Flour are extremely

busy with their challenge now being able to get enough engi-

neering people to work for them. It’s like Grand Central Station

coming into to their offi ces. For us this is a good sign. Normally

there is a delay of about half a year from the projects are started

until they physically are being sailed.

- So we are beefi ng up our organization in preparation for that,

Lars Juhl says.

- The good thing about a company like Scan-Trans is that we are

asset light. We don’t own any vessel, we are chartering in ton-

nage, and we have a number of good and loyal customers.

- These costumers generate much more business than we can

ever sail, so we feel that our business is very scalable. We could

easily go from 30-40 ship now to between 50 and 60 or even

more, and then beef up our organization accordingly. That would

be no problem for us. The system and the framework are made

to do just that. It’s just a question of scaling it in a controlled

manner.

SCRAPPING HELPS

Lars Juhl is cautiously optimistic in general.

- If you look at the world fl eet, there are still a lot of new ves-

sels coming out which were ordered in the good times and have

been postponed to come out in 2012, which can upset the recov-

ery in the market that we are seeing right now.

- But we also know that 40 percent of the fl eet in the multipur-

pose sector is more than 20 years old. These ships need to be

scraped – many should have been scrapped a long time ago. So

when scrapings are catching up the fundamentals are back for

an improved market.

Lars Juhl is focusing on the oil and gas market which he expects

to boom:

The populations in the world are increasing – the middleclass in

China, India and other developing countries are growing rapidly

and so is their demand for energy and goods.

- This overall increase in demand is combined with a kind of de-

lay. Since late 2008 not many new projects have been started.

Everything was put to a stop because fi nancing was so diffi cult.

This means a lack in production capacity right now at the same

time as oil is taken in much deeper and more remote places.

When you go deeper, the need for safety is much higher and

equipment becoming more expensive. The demand for quality

and reliable and safe transportation is increasing.

They are drilling in remote areas like the Arctic region which is

diffi cult, and this is good for us as we are specializing in sea

transportation to and from diffi cult places.

And Scan-Trans is not interested in transportation between main

ports, this is left to the established liner services.

- Without being Arctic specialists we have – however - had a

small number of vessels there, and we are now quoting for a

number of large projects especially in the Russian Arctic region,

where we are able to offer our customers transportation via the

Northern Searoute, right now with ice class vessels in the three

month of summertime - this will cut a signifi cantly amount of

time and the energy going from North Europe to the northern

part of Asia.

QUALITY FIRST

- We see two ways to compete: Price or quality and service.

Long time ago we have decided that one of our values is to focus

on a quality position with safety, reliability certifi ed. We are ISO

certifi ed and go by a quality management system enabling us

to quote on business with large industries, which are very con-

cerned about safety and reliability – more than just saving a dol-

lar on the cubic meter on the freight rate.

- The shipping industry in general all have P&I insurance of

course. The insurance companies are prepared for each 100 dol-

lars ship owners are paying in premium to say it’s fairly OK if they

have damages for 40-60 dollars. Ours is below 10 dollars. We

have a very good damage statistics, so if a customer is looking at

the risk element, he should go for us - the cost of having an oilrig

lying idle because a ship lost a big cargo essential to the project,

it’s costing so much per day, that it is so much cheaper to pay a

quality carrier to ship it.

And talking people: When we had the pirate issue we would have

no problems with the insurance companies had it only been a

vessel or a cargo. They would have dealt with it and we would

have to pay no ransom, he says.

It was a total different matter with the crew. But as it was people,

there were no two ways out of it for us. We would absolutely have

to deal with that, Lars Juhl underlines.

HIGH STANDARD IN HARD TIMES

The focus on high standard is visible on the ships.

- Ships provided by our Dutch partner, CFL Canadian Feeder

Lines, are Dutch built ships of high standard. They are more ex-

pensive that the Chinese built ships and the crews are treating

them like a piece of their own home. They maintain them per-

fectly, and Nine out of 10 customers who are invited onboard are

impressed og tell to their clients how we care about the trans-

portation.

- In project cargo the bulldozer you take onboard and put on the

tank top of the ship does not care if it is a Chinese built ship

and don’t care I the cargo hold is rusted. But for us we sent the

impression to customers that we do care. We don’t put our cargo

in a rust box.

- Even in hard times, where everybody has to cut down, CFL don’t

cut on maintenance that will affect safety in any way. The same

goes for our other Partner, the Buss group, who always care very

much for maintenance of their vessels, he says.

NEW TECHNOLOGY

Technology slowly develops in our sector, but our CFL vessels

for instance has no traditional bulbous bow, they look more like

The banks are the new ship owners2 Daily news on www.danishmaritimemagazine.dk

Titanic’s front. This is an old design that has got a renaissance,

and CFL was among the fi rst to build a modern ship with that.

A bulbous bow have to stay right below the water surface to save

fuel. But in project cargo we rarely load the full deadweight ca-

pacity – typically 2.500 tons of cargo and 10.000 cbm so we will

never have the bulbous bow in the water, and therefore it has a

reverse effect. So it makes no sense to build a ship for project

cargo with the standard bow.

A GENERAL

Lars Juhl has changed his focus a bit as a leader:

Initially I was looking for consensus. We had a very fl at organiza-

tion. But when you are going through a crisis you can’t sit down

and debate things for a long time. You have to have some sort of

a general to take the decisions whether they are well received

or not . You must do what you have to do. Still I am not a ruler.

I consider myself at modern and spiritual leader, Lars Juhl says

using popcorn in a microwave oven as a metaphor:

You put in the corn and turn it on. 20 pct. pop fast – then 60 pct

follows after a while, and when you pour them in the bowl to eat

the last 20 pct never has popped.

- You should not spend all your energy on those who never pop.

I used to spend 80 pct. of my energy on the 20 pct. of our people

who would never change. You should not spend all your energy

on those who never pop.

Now I use the 20 pct. who pops fi rst as change ambassadors to

drive the change in my organization. And 60 pct will follow more

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3Daily news on www.danishmaritimemagazine.dk

or less automatically when the fi rst are moving, he says. The last

20 per cent are no longer with Scan-Trans when the cost cut and

rightsizing was put into action.

- We have to embrace chance as the change cycle is getting

faster. We must act rather than complaining that the world is un-

fair. Conditions are changing and our focus must be: How do we

make a profi t in the new situation, he says.

BANKS AS SHIP OWNERS

Lars Juhl expects banks to be the new ship owners in the long

run.

- That concerns me. We’ve already seen this when we have ships

in commercial management for ship owner who have been used

to put the ships out on time charter and then getting T/C hire

paid every 15 month. They have never been involved in any car-

go operation or not seen the underlying coast structure or the

challenges with fl uctuating cash fl ow. So when they are giving

ships in commercial management to us and we are running the

vessels in the spot market they tend to rise a lot of question like

“you calculated with 6 dollars in that port and now it’s 8 dollars,

why is that?” We spent a lot of time explaining these details -

that we paid two more dollars to get the ship out two days faster,

actually a saving for the vessel.

- Now we have principals who are ship owners not used to world-

wide trading. We always try to optimize. We think it is better to

spend our time on optimizing and dealing with the situation as

they occur rather than to discuss historic details. It’s about the

future.

Since 2008-09 many - especially German - ship owners have

only paid interests to the banks, but the Basel II regulation of

banks put a three year limit on that - otherwise the bank must

take over the asses. Here we can be the interim manager of the

ship until it can be sold in a market with decent prices. Fire sale

only means competition with the bank’s other ships creating an

unlevel playing fi eld, says Lars Juhl, who sees crisis as an op-

portunity.

TIME FOR ACTION

- And right now the opportunities are historically great. It’s now

when people can afford to take the opportunities, that we are

– as always – on the outlook for strong fi nancial partners. We

have the knowhow and the fi nger on the pulse of the market. We

could create miracles, money was not an issue, he says.

He himself is recovering from his heart arrest:

- I’m recovered enough to take in the job as CEO of Scan-Trans in a

responsible way. It takes time but I am 90 percent recovered and

can cope with late meetings and events, but I still get very tired

and often have to dig deep to stay on the course. It helps that

I have run marathons. I ran with three of my colleagues on the

Great Wall of China. That’s giving me mental strength, he tells.

COAST GUARD AGAINST PIRACY

The pirate incident in 2008 was a tough experience. And Lars

Juhl believes that piracy must be stopped.

- But clearly more on the same is not giving a new result. The

navies of various countries have spent millions of dollars and

achieved very little progress, he says suggesting a fee for all

ships through the Gulf of Aden:

- Of course I would prefer not to pay anything, but if that fee – for

instance 25.000 dollars pr ship transiting - is paid to the UN who

would set up a local coast guard in cooperation with the Somali

government, it will be possible to make the pirates unable to go

from ship to shore with the ransom. Such Coast Guard could also

stop toxic waste dumpers and foreign fi shermen from poaching

in Somali waters, Lars Juhl states.

- We are competing with companies who do not have armed

guards onboard. Our cost for guards is around 65.000 dollars

for each transit. So they are competing by gambling with safety.

That’s unfair. We should be playing on a level playground.

- Maybe my suggestion is a bit controversial, but navies can’t pa-

trol so vast areas and so far we are only treating symptoms, we

need to fi nd a cure, Lars Juhl says.

By Finn Bruun

The banks are the new ship owners

- We have a very fi ne damage statistic. Less the 10 dollars pr. 100 dollars premium compared to a traditional level of 40-60 dollars

4 Daily news on www.danishmaritimemagazine.dk

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- A lot of our assignments are emergency repairs. This puts

our fl exibility to the test, says operations manager Visti

Abramsson, who is in charge of highly competent staff will-

ing to walk the extra mile in busy periods in order to meet

customer needs.

2400 MAN HOURS IN 4 WEEKS

As an example, a Norwegian ship owner called fi ve weeks ago

with motor problems on a ship harboured in Esbjerg. The crew

had noticed discolouring of the crankshaft when a piston was

removed, and the owner contacted P&S to get their assess-

ment of the problem.

- The engine has probably suffered an undetected loss of oil

pressure. It had developed cracks in the crankshaft, and they

were too deep to be machined down. Therefore the 6.5 tonnes

crankshaft had to be replaced.

The ship owner accepted P&S’ tender and repair works be-

gan immediately. P&S cut a hole in the hull so that loose en-

gine parts could be lifted out and trucked to the shipyard in

Svendborg, while six workers stayed on the ship in Esbjerg to

prepare for the reinstallation. Next week the job will be com-

pleted. P&S has managed to squeeze in 2400 man hours over

four weeks without notice.

THE SPARE PART CHALLENGE

For P&S the biggest challenge with emergency repairs con-

sists in fi nding original spare parts. In this case they tracked

down a good used crankshaft in Germany, but sometimes it

can be diffi cult to obtain the right components for older en-

gine types.

- We are authorized service center and distributor of spare

parts for Volvo Penta. In addition we have a large network of

parts suppliers across Europe, so we always manage to fi nd

the spares we need. However it may take time to meet some of

the more special requirements, says Visti Abramsson.

Engine repairs and overhauls account for more than half of the

activities in P&S, who in addition to the shipyard in Svend-

borg runs Marstal Shipyard on the island Ærø. Other activities

include ship maintenance and shipbuilding. The yard has re-

Always ready for an emergency6 Daily news on www.danishmaritimemagazine.dk

cently built six steel line boats for service in Greenland. Most

Greenlandic line boats are lightweight fi berglass vessels, but

with the new construction fi shermen can remain at sea for

longer periods.

NEW REQUIREMENTS TO EXHAUST GAS CLEANING

AND BALLAST WATER HANDLING INCREASE DEMAND

A relatively new fl oating dock measuring 135 x 18.5 meters in

Svendborg enables P&S to handle larger tankers, container

and general cargo ships of up to 8000 tons. And the shipyard

in Marstal has a 106 metre long and 16 metre wide dock, pro-

viding plenty of capacity now that the shipping industry is

picking up again.

- The maritime industry has been severely affected by the

crisis. This has increased competition and many shipyards

have closed down. Now we see rising freight rates, and we

hope it will eventually lead to improved conditions for the

shipyards as well. At the same time many motor classes have

to be upgraded to comply with new requirements in terms of

environmental impact, exhaust gas cleaning and the handling

of ballast water. In consequence, we expect an increasing de-

mand for overhauling engines and installing new systems to

ensure that all ships comply with applicable requirements,

Visti Abramsson concludes.

ALWAYS READY FOR AN EMERGENCYPetersen & Sørensen (P&S) in Svendborg, Denmark,

was founded in 1942, and over the years the company

has developed into a state-of-the art shipyard with a

capacity to perform repairs on demand. Most repairs

cannot be scheduled, so when a ship breaks down

P&S works 12 hours a day 7 days a week to solve

the problem.

Always ready for an emergency 7Daily news on www.danishmaritimemagazine.dk

Invited by Ms Maria Damanaki, the European Commissioner for

maritime affairs and fi sheries, high level representatives from

the European Union and Third countries, public authorities,

representatives from maritime industries and NGOs had an op-

portunity to share and discuss their experiences and thoughts

on MSP with the European Union and listen to cases of MSP

from around the world, and to refl ect on how they want to see it

develop in the future.

NEW USERS OF THE OCEANS CHALLENGE THE OLD

One of the main issues addressed on the conference, was how

new users of the oceans challenge the old. A sustainable strat-

egy that complies with economic growth within both the tradi-

tional sectors such as fi sheries and new such as wind energy

farms is desirable. The question is if and how the various utili-

zations can be combined? What activities are compatible at the

same time at the same place and are there any contradictions?

The message from most presenters was clear: to ensure a sus-

tainable solution, there is a need for cross border initiatives,

but no desire to introduce complicated bureaucratic structures.

The commission should only provide a framework and member

states should coordinate regionally or nationally.

The conference was moderated by Dr Elliot Norse, President

of the Marine Conservation Biology Institute (US) and on the

agenda were presentations concerning the future of maritime

spatial planning in Europe, what MSP delivers for growth and

lastly presentations on how we can develop a common Eu-

ropean vision for the future - Maritime Spatial Planning by

2020/2025. Among the speakers were: Ms Assuncão Cristas.

Minister of Agriculture, Sea, Environment and Regional Plan-

ning (Portugal), Mr Bernard Vanheule, International Association

of Oil and Gas Producers, Mr Juan Riva, European Community

Shipowners Association, Mr John Tanzer WWF and many more.

Ms Helle Pilsgaard from Danish Nature Agency spoke about Sea

Use Management in Denmark. The presentation focused on the

growing wind energy- and shipping activities in Denmark and

the objectives for Danish Sea Management, which focuses on

favorable conditions for development of the maritime sector,

decreased emission of greenhouse gases and reduction of air

pollution, protection of the marine environment and the coastal

zone, increased safety at sea and lastly increased coordination

of initiatives and management within the maritime sector.

CONCLUSIONS OF THE DAY:

WE NEED TO DO THINGS SMARTER!

Director General of DG Maritime and Fisheries, EC Ms Lowri Ev-

ans concluded that the discussions and presentations of the

day, along with the stakeholder survey in 2011, only confi rmed

the importance of the subject. Ms Evans concluded that we

can do things smarter in European sea space, particularly if we

learn from Australia and other countries who have successfully

introduced MSP and it is about time that we decide on a Euro-

pean discourse. Maritime Spatial Planning (MSP), as promoted

by the EU integrated maritime policy, is crucial for creating an

environment in which the maritime economy can grow in har-

mony with the surrounding ecosystem. The following objectives

were repeatedly mentioned by speakers and supported by the

commission: Transparency, stability, predictability and reduced

transaction costs are the factors that encourage and accelerate

investments – and are among the benefi ts that MSP can bring.

The commissioner also supported the desire for a simple non-

bureaucratic structure that encourages and supports national/

regional initiatives, but within a common European framework

for the European seas.

Presentations and full program for the conference can be found

at:

http://ec.europa.eu/maritimeaffairs/events/2012/03/

events_20120326_01_en.htm

By Anne Katrine Bjerregaard

Project Coordinator, Maritime Development Centre

of Europe & the Transport Innovation Network

While the concept Maritime Spatial Planning (MSP) might have a negative

limiting sound to some, the energy and input form the participants at the

conference in Brussels March 26th 2012 was overwhelmingly positive

and constructive.

Effi cient resource management for sustainable growth

MARITIME SPATIAL PLANNING:

EFFICIENT RESOURCE MANAGEMENT FOR SUSTAINABLE GROWTH

8 Daily news on www.danishmaritimemagazine.dk

Effi cient resource management for sustainable growth

EC Defi nition and scope

Maritime spatial planning is planning and regulating all human

uses of the sea, while protecting marine ecosystems.

It focuses on marine waters under national jurisdiction and is

concerned only with planning activities at sea.

It does not cover management of coastal zones or spatial plan-

ning of sea-land interface.

Objectives

Maritime spatial planning aims to balance frequently compet-

ing sector-based interests, so that:

• Marine space and resources are used effi ciently and sustain-

ably.

• Decisions can be taken based on sound data and in-depth

knowledge of the sea.

• Investors have greater legal certainty, encouraging economic

development.

There is fi erce competition for marine space and the interests of

different users need to be taken into account. For example, an

off-shore wind farm could hamper navigation or fi shing, unless

its location is well planned.

Common principles approach

Maritime spatial planning remains a prerogative of individual

EU countries. However, plans for shared seas should be com-

patible, to avoid confl icts and support cross-border coopera-

tion and investments. Common principles agreed at EU level

can ensure that national, regional and local maritime spatial

plans are coherent.

(European Commission, Directorate-General for Maritime Af-

fairs and Fisheries, 2012)

Relevant papers and description of EC initiatives can be found at:

http://ec.europa.eu/maritimeaffairs/policy/maritime_spatial_

planning/index_en.htm

”Healthy oceans – healthy economy” became the motto of the day when representatives from the commission, the European Union and

Third countries, from maritime industries, government agencies and NGOs gathered to discuss Maritime Spatial Planning in Brussels

March 26th 2012.

FACTS ON MARITIME SPATIAL PLANNING

9Daily news on www.danishmaritimemagazine.dk

Denmark is a world leader in the development of climate and

environmentally friendly maritime products. Across the board,

the trade segment cooperates on green projects. Among these

is the retrofi tting project run by Danish Maritime, a project fo-

cusing on green solutions for existing ships, while another is

Green Ship of the Future which through a series of projects

focuses on green solutions to primarily new ships. It makes

perfect sense to invest in green solutions –not just in relation

to the climate and environment but also in bringing down the

operational costs of ships.

Many of the solutions provided by the Danish maritime pro-

ducers can be installed on existing ship and will even in the

short term reduce negative environmental and climate im-

pact. Among such solutions is raising the effi ciency of pro-

pulsion systems, better control of cooling water, optimizing

pumps and adjusting fans. All are solutions with short pay-

back periods and solutions which can be installed relatively

easily on existing ships.

If we can widely extend the use of the many already existing

Danish green solutions to the global fl eet, we can take effi -

cient steps in the work to stem the environmental and climate

charges and reduce the operational cost of ships.

The existing solutions are plentiful and the Danish maritime

producers continuously develop more and even greener solu-

tions.

By Cecilie Lykkegaard, Danish Maritime

Green solutions provide an instant effectMore than 70 percent of Earth is covered by water. Seagoing transport is by

far one of the greenest forms of transportation and the sea is a natural

transportation route which offers almost limitles s possibilities for

environmental and climate friendly transport.

Green solutions provide an instant effect10 Daily news on www.danishmaritimemagazine.dk