A pooling collaboration between US-based Guardian Navigation and Japan’s Mitsubishi Corp has experienced steady growth in the past year.
Representatives of the two companies told TradeWinds the pool is ambitious for more expansion. Mitsubishi’s investment in Guardian was announced in May 2018.
Guardian is the former TBS Ocean Logistics, with headquarters in Scarsdale, New York. Chief executive Aadel Shaaban said that its pools have grown to about 25 bulkers — up about one-third from a year ago — with an ambition to reach 50 ships over the next 18 months.
Important catalyst
The decision by Mitsubishi and Lars T Ugland to invest in spring last year has been an important catalyst for the growth, he said.
“We were a debt-free company before — after the investment, we’re even better capitalised,” Shaaban said.
“In these tight market conditions, working capital requirements can be a hurdle for owners to consider pools. After the investment, not only can we offer working-capital flexibility, but also an owner's option to lock in rates via freight forward agreements.”
Mitsubishi’s Kazuhiro Kaneko, who has been working within Guardian as project manager, said pooling has given his company another important platform alongside its traditional activity in shipowning and trading.
“It’s a big new opportunity for Mitsubishi,” he said. “It has created good synergies among the pooling, shipowning and trading businesses. We can now offer more solutions and opportunities for owners.”
We have full expectations to double the size of the pool over the next 18 months and we’re progressing along that plan nicely
Aadel Shaaban
Premium profit
Kaneko also noted that Mitsubishi became a believer in Guardian’s pooling after contributing its own bulkers in 2015 and seeing distributions that outperformed the Baltic Supramax Index (BSI).
Shaaban said the pool has returned a premium over the BSI of about 5%, largely as a result of its global operating platform spanning eight offices and more than 500 cargo clients.
“We have full expectations to double the size of the pool over the next 18 months and we’re progressing along that plan nicely,” Shaaban said.
“We believe pools are traditionally compared with long-term time charters. Owners have traditionally preferred the period market. However, with IMO 2020 and the new lease-accounting regulations on the horizon, we see headwinds in the period market. A pool-offering is becoming more and more of a viable alternative, especially with an FFA lock.”
Tight-lipped
Guardian is relatively tight-lipped, declining to identify individual owners or vessels, but does acknowledge that Mitsubishi’s influence has helped it recruit ships, including owners from Greece, Japan, China and the US.
The pools also include six bulkers belonging to Guardian's shipowning affiliate company, Valhalla Shipping.
Certainly we had the perfect storm in the first quarter with Vale, Brexit and the trade tariffs fears
Aadel Shaaban
Shaaban declined to talk in detail about Valhalla, but said: “The pools now have four times as many third-party pool vessels as Valhalla, so the transition has really worked.”
He is encouraged by the resilience of the supramax market considering headwinds faced in the first half of the year, and is optimistic about prospects for improvement as the IMO 2020 sulphur deadline approaches.
“Certainly we had the perfect storm in the first quarter with Vale, Brexit and the trade tariffs fears,” he said.
“So, it’s actually quite remarkable that the supramax category has held up as well as it has with such capesize weakness. That suggests to us a minor-bulk utilisation that’s quite balanced. With a very positive fundamental outlook, we can certainly see strong rates ahead.”
