Insights

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Heidmar Sees Opportunities in Poor Dry Freight Markets

May 15, 2015

While most people see only bad things in poor freight markets like the one that has dragged on in dry bulk, pool operators also see opportunities.

That was a factor in Heidmar’s decision to stray out of tankers for the first time to enter a bulker-pool joint venture with TBS Ocean Logistics.

“We’re still focused on our tanker business,” said Heidmar Chief Executive Ben Ognibene in a recent interview at his Norwalk, Connecticut offices, where he was joined by TBS executives Gregg McNelis and Urs Dur.

“But that market has firmed up and is much more competitive at the moment. We like — well, we don’t like what is happening in the dry bulk market but we like the opportunities that the state of the dry bulk market presents at the moment.”

That’s where the partnership with TBS comes in. As first reported by TradeWinds last week, the two companies are joining in a bid to expand two pools currently operated by TBS in Handysize and Supramax geared bulkers.

TBS brings the cargo relationships and trading performance, which it claims has outpaced the market.  Heidmar brings its high-tech vessel monitoring system, called eFleetWatch®, which allows real-time transparency as to performance of all ships within a given pool.

“We had thought about dry bulk in the past but I knew it was a segment we didn’t want to get into ourselves commercially,” said Ognibene, who oversees six tanker pools.

The TBS combination has been percolating since Dur — as TBS’s newly hired Chief Financial Officer — met Heidmar Chief Financial Officer Kathleen Haines for a lunch in July 2014.

“Gregg and his team had already developed a pool structure but we needed to learn more about our accounting for pools to make sure our customers got the best possible service, and Kathy had lots of experience with that at Heidmar,” Dur said.

What started as an accounting exchange soon segued into a discussion that the companies appeared to have complementary strengths, and possibly a basis to do business.

Heidmar’s eFleetWatch®, as Ognibene explains, allows any pool member to log in and get immediate information not only about its own ships, but also on all others in the pool.  Owners like it — for example, Connecticut’s Ridgebury Tankers had logged into the site 26 times in the last week alone, he says.

“You can track every nickel and every minute of time as they relate to pool distributions,” Ognibene said. “Other pools may run fine but the reporting is once or twice a month. It’s already old news and often based on estimates.”

For McNelis, the appeal is that dry cargo owners will find the same appeal as Heidmar’s tanker clients.

“Owners on the dry side want to see exactly the same information,” McNelis said. “We don’t currently have those systems in place.  Once we do, these owners will be able to see that the returns are better than what they’re going to get in the market.”

The TBS pools are modestly sized to date, with about 15 vessels in the Supramax category and five in Handysize, including ships chartered in.

McNelis has aggressive ambitions, seeking growth to about 40 bulkers in each pool.  TBS has taken on former Heidmar man James Killingworth to market the pools.  And since some of Heidmar’s 32 partners in tanker pools also own bulkers, there is another potential cross-benefit.

“When we announced this, we immediately got a lot of interest there,” Ognibene said. “It’s a no-brainer for them to look at it more closely. We may also look at time-chartering in some [bulkers] to put into the pools ourselves to support the whole thing.”

by Joe Brady, Stamford

15 May 2015