Epic Gas Shipping
Charles Maltby, chief executive; and Uta Urbaniak-Sage, chief financial officer
What has been the biggest impact of the coronavirus on your company?
The operational impacts on the day-to-day running of our business and service delivery for our customers.
How has the virus impacted the operation of your ships with regards to their ability to trade between ports, conduct necessary maintenance and effect crew changes?
Like the global community, where 20% to 30% of the population is under some form of restriction due to the virus, we have more than 1,300 skilled seafarers in our team also living with restrictions afloat or ashore. As the virus has spread globally, all countries, including their home nations, have gradually restricted departure, arrival, flights, documentation and visa processes.
This means our seafarers are either away from home and their families for months longer than they should be, or stuck at home, unable to deploy. We are working closely with our seafarers and their families to do our best to mitigate the impact and wholeheartedly encourage the global community to adopt a similar approach to Singapore, and to urgently address the need to allow global movement of seafarers in a way not dissimilar to that of aircrew.
Safety for our crew is paramount on board our vessels — we have restricted shore leave and implemented tighter measures for social distancing when alongside terminals. Our fleet is a busy one, with an average voyage time between ports of less than a week, making more than 2,500 cargo operations each year.
Some countries and ports are also introducing quarantine periods for ships and crews on arrival, which can have a knock-on cost for customers, or we have to adjust our trading patterns away from certain countries to mitigate these costs and delays.
We have also noticed a tightening of dry-dock capacity, firstly in Asia, and now globally, as dry docks find it harder to schedule maintenance, repairs and source essential spares within time to meet a ship’s repair window.
From our customer's perspective, we operate a fully integrated global fleet of LPG ships, with it being normal under the Oil Companies International Marine Forum's Ship Inspection Report Programme for companies and ships to be regularly audited. At present, inspections and audits are largely suspended — and this is making it harder for customers to manage their global shipping programmes.
What impact has the virus had on your shoreside operations?
We operate from four locations around the globe. Our head office team is currently working in two segregated teams, able to access the office on an alternate-week basis if necessary.
Our offices in Manila and Tokyo are closed, with the team members working from home, while the London team is working from home with access to the office if required for essential purposes. Being a 24/7 global business, most of the company was already familiar with working from home or remotely, and therefore we have been very impressed with our team’s ability to adapt as necessary over recent months.
How long do you expect the coronavirus to continue to have a negative effect on the shipping industry?
We see short, medium and longer-term impacts. We have asked our team to manage our business on the assumption of disruption for up to four months and, while the world is resilient, we expect the economic impacts on demand to be longer term.
KSS Line
Unattributed
What has been the biggest impact of the coronavirus on your company?
While the biggest impact in the industry would be the market situation, all of our major contracts are long term. Therefore, the impact of the market fluctuations are limited in our case. For us, the unpredictable dollar-won exchange rate and unpredictable three-month Libor rate will have more effect on our income statement.
How has the virus impacted the operation of your ships with regards to their ability to trade between ports, conduct necessary maintenance and effect crew changes?
Travel restrictions and reduced flights are showing significant impact on how we trade, especially with maintenance and crew changes.
We are having difficulty changing crews and supplying ship spares at the right time.
We try to get real-time information for each port and react in advance to find the most efficient way to conduct crew changes and replenish ship supplies.
What impact have you noticed on cargo volumes and freight rates that can be attributed to the coronavirus?
Covid-19 and low oil prices are causing a negative impact in the gas and chemical markets in general, including cargo volumes and freight rates.
However, our major contracts are based on long-term contracts, plus our charterers are major players in the market. Therefore, we can continue our business with minimised impact.
What impact has the virus had on your shoreside operations?
We have prepared our system before this issue to be ready for a situation like this. Everyone can work in their house without any trouble.
Our shoreside team follows the [South Korean] government’s direction to minimise the risk of spreading the virus.
As we have maintained a large supply of face masks in our office for several years, we have donated masks to our partners in virus-hit areas such as Daegu [in South Korea], since people there need masks urgently and it is out of stock.
What steps have you put in place to mitigate the effects of the coronavirus on your business?
We have to regularly check changes of external factors and then analyse what their impact would be on our business. Communicating together to find the right way to react is needed to minimise the negative impact coming from this situation.
The coronavirus has changed the supply chain significantly, since there are a lot of travel restrictions. We have reorganised our supply chain, so that all ship spares can be supplied at the right time. We have also strengthened our in-house maintenance ability so that the need for ship supplies can be minimised until the situation gets back to normal.
We secure places for dry dockings in advance, and then communicate continuously with the dock site so that our engineers can visit the place without trouble.
Crew management and major inspections are also being planned one to two months in advance, to avoid any risk coming from this situation.
All teams and divisions are continuously reviewing our risk-management system to mitigate the effects.
How long do you expect the coronavirus to continue to have a negative effect on the shipping industry?
It is really difficult to predict. Demand in the European Union and the US has fallen significantly. It will not be easy to get a full recovery within this year.
Demand in such countries will recover after the virus-situation is solved. Gas supplies from Saudi Arabia and Russia should recover at the same time.
When a recovery finally comes, what do you think it will look like?
This situation brought heavy impact on demand, tonne miles and finance. A lot of companies are in crisis.
For now, we have minimised any negative impact by paying serious attention to risk-management systems and communicating actively with related divisions/teams to react to the uncertainty together.
However, some companies will not be able to overcome the situation since it is very tough, and no one has experienced this before.
Demand and supply for gas and chemical industries should recover when the virus goes away. However, industries will not be the same, since some players might not exist when this is over.
