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Monday, November 20, 2017

LevelSeas Adds Key Clients

August 15, 2001

Internet ship-brokerage Levelseas said that seven of the world's biggest commodity traders and three key shipping players had signed up to its system, LSX, allowing them to fix transport deals directly from mid-September. At the click of a button, traders like BP, Cargill or BHP Billiton will for the first time be able to book their cargoes of oil or grain directly onto a ship, a process that was once the almost-exclusive domain of shipbrokers.

"They've all signed up to LSX in the last three weeks and will automatically be signed up for LSX-2 in September," Levelseas Chief Operating Officer Kevin O'Connor said on Tuesday. LSX is available on Levelseas' website Unlike LSX, which lacks the functionality to conclude deals, LSX-2, which will be launched on September 20, will allow charterers and shipowners to haggle over the clauses and pricing of freight contracts before hitting the "fix-button".

O'Connor said the tool would increase the efficiency of the chartering process. He compared it to the effect of technology on his own job at the head of Levelseas. "To do this job I once would have needed four or five secretaries, but now I answer my own e-mails and just need one PA (personal assistant)," he said. But he shied away from talk of redundancies within the shipbroking industry.

"We just to say things will become more efficient," he said.

Levelseas was founded by Shell, BP, Cargill and London shipbroker Clarksons in April 2000. Of Levelseas' 33 financial backers, Clarksons and Oslo-based RS Platou are the only brokers.

"Chartering operations will require fewer people, but if you're good you'll use the same number of people to do more business," said O'Connor. He compared it to the stockbroking industry, which has had to evolve to meet the challenge of the Internet. "Has it removed the industry? No," he said. "But has it changed the way they worked? Yes. They must now add more value to remain competitive," he added. Shipbroking would be the same.

Traditionally, brokers have charged 1.25 percent commission on any freight deal they handle.

Other new customers for LSX include traders Rio Tinto, Mitsubishi, Shell and Glencore, shipowners Bocimar and AP Moller and broker Stehn & Co.

Shipping sources said brokers Clarksons and RS Platou, which are already financial backers, would also sign up. Alongside LSX-2, Levelseas will also be launching a cargo and ship voyage management tool named LS-Ops, Connors said. Technology from the soon-to-be-listed satellite communications company Inmarsat will link LS-Ops to the bridge of every ship on the system, allowing managers to monitor ETAs and fuel reserves.

He said fuel oil prices at the world's various bunkering ports will automatically be fed into the sytem, allowing managers to decide when and where to refuel. After the cost of hiring the ship, bunkering (refueling) is the second biggest cost in the freight equation. Both BP and Bocimar have signed up both to LSX and to LS-Ops, Connors said. The system is based on ISMIS, a system Levelseas gained through the acquisition of Dolphin Computers at the end of March.

Though LevelSeas has never publicly stated how much has been invested in the site, industry sources put the figure at close to $40 million. It is virtually without competitors, but might overlap with a free Internet brokerage site to be launched on Monday by London's Baltic Exchange, and organization owned by shipbrokers. - (Reuters)

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