Mezeron & Steam Packet Master Thread

[Lost Login]

It does have "social obligations" if you define those as CONTRACTUAL obligations to provide services it might not do by choice. Are those not the CONTRACTUAL restrictions on price increases and minimum number of sailing CONTRACTUAL obligations that it is required to do.

 

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...

 

I agree and that is why there are many many examples of there being regulation in some form to ensure that companies have to comply with certain standards, provide certain services or restrict price rises in a matter they would not otherwise.

 

To acquire transport franchises in the UK you have to agree to provide some of these services and there are limits on fare increases. Utility companies have social restrictions and priceing onligations placed upon them.

 

It is not for what are deemed as ssential or public services for governments to intervene to ensure certain aspects are met purely because companies are there to make a profit. In respect of the IoM services I believe that some search regulation is required to ensure a level of service and control of prices relating to passengers. I have no idea what the ideal basis of that is.

[Barrie Stevens]

I am a former bulk dry cargo shipbroker and currently a retired member of the Baltic Exchange in the City.....

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?

 

My only interest is in whoever ends up running the service basically provides a timetable to suit me. i.e. fast craft on the Liverpool route at a reasonable price which I can generally book a car on at fairly short notice. I believe that in essence to have that we need a timetable roughly as of now in terms of frequency and that will only happen long term if basically there is only one operator on the route opertaing under some sort of license or agreement. who that company is I could not really care.

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.

[Barrie Stevens]

Barrie - care to address the issue of the huge SPCo borrowing - which seems to be way out of line with the cost of owning vessels? According to the media this borrowing is not about funding investment - but seems instead to be about the SPCo itself being traded as an asset to borrow against - because the UA seemed to guarantee income to service that given level of huge borrowing.

 

Almost as if the company ends up being used as a financial instrument itself - sort of one removed from its actual business. The real business being trading companies which have captive revenue streams which can be squeezed.

 

IMO that skews any traditional liner vs charter debate because the cost of servicing debt is equally as volatile and uncertain as any shipping industry index.

 

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!

[Lost Login]

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.

 

I have noted your reply and I will leave it at that. I have to admit having read your posting previously on IoM Online when you appeared to be the self appointed expert on everything even though not resident on the Island any longer I basically cannot be bothered continuing to be a member of a forum that you are probably going to flood with posts. Accordingly this will be may penultimate post on this or any subject

[Lost Login]

I knew that there would be dire consequences to the end of "Your Shout" on iomtoday.co.im, and here is the living embodiment of those consequences, Barrie Stevens.

 

Agreed and as I posted a minute or two ago if the consequence is Barrie Stevens joing this forum then that is me leaving.

[hannay]

why not just put him on ignore if it annoys you that much?

[Guest]

Anyone know why Kurkse is now holding on the north side of Douglas Bay and not entering harbour?

[Barrie Stevens]

Anyone know why Kurkse is now holding on the north side of Douglas Bay and not entering harbour?

 

 

Hiding from Barrie Stevens?

[Andy730]

A point of history.

 

Can some one with Steam Racket History knowledge remember when the last Lady of Man arrived here and sailed for Liverpool the first time?

 

I was young at the time so my facts may be out, BUT... I seem to remember the Lady making the Liverpool trip in around 3 hours, but didn't continue with that speed due to fuel burnt and obvious costs.

 

And, I believe the record for the IOM to Liverpool trip might still be held by the Steam ship Viking, at circa 2 & 1/2 hours, is that right???

[manxman8180]

The last Lady of Mann was very capable of doing the Liverpool run in 3 hours, even less.

 

However, as well as increased fuel and 'stress' on the engines, you would also have to factor in the ridiculously low speed they now have to proceed up the Mersey estuary.

 

You cannot compare the 'old days' when you could steam full chat from one port to the other.

[Manxman2000]

A point of history.

 

Can some one with Steam Racket History knowledge remember when the last Lady of Man arrived here and sailed for Liverpool the first time?

 

I was young at the time so my facts may be out, BUT... I seem to remember the Lady making the Liverpool trip in around 3 hours, but didn't continue with that speed due to fuel burnt and obvious costs.

 

And, I believe the record for the IOM to Liverpool trip might still be held by the Steam ship Viking, at circa 2 & 1/2 hours, is that right???

Her Maiden Voyage was the morning sailing to Liverpool on 30 June 1976

 

With her V12 pielstick engines she could possibly make Liverpool in 3 Hours. she made 21 kts on the Skelmorlie mile on the Clyde but was certainly a lot faster than that.

Edited November 9, 2010 by Manxman2000

[Tempus Fugit]

which one made it back to Douglas from Liverpool just before the start of the sailors strike, in something like 2hr45m ?

[P.K.]

why not just put him on ignore if it annoys you that much?

Well exactly. It's like watching a crap tv program to the bitter end and then complaining how awful it was. Hello! Remote please... I've had that little spite-ball Tugger on "ignore" for years now and I don't miss his puerile little personal attacks one little bit. So to leave a forum you're clearly interested in without first putting someone on "ignore" sounds like flounce mode to me.

 

Anyway I thought that Mr Stevens has made some interesting points. He's certainly right about the Mezeron set-up in that who has any idea if they own, lease or whatever and owning your own craft does protect the service levels against changes in leasing costs.

 

Interesting times. Although no sign of any SP response yet.

[Tugger]

I've had that little spite-ball Tugger on "ignore" for years now

 

LOL - he may have eventually put me on ignore after stalking me with PMs for months (although I expect he hasn't really, he just professes to have). Tragic little man ...

[maxal]

The Kurksi is anchored in Douglas bay because it needs a tug to get along side due to the North East wind, but the tug boat Wendy Anne is broke.