Marine Link
Saturday, November 18, 2017

LevelSeas Buys SeaLogistics

March 13, 2001

London-based e-shipbroker LevelSeas has acquired main competitor Houston-based SeaLogistics during a week that has seen swift consolidation in the shipping e-commerce sector.

New-York based MaritimeDirect folded over the weekend of March 10-11, with a warning that the concept was "fundamentally flawed," while another shipping e-venture, OneSea, talked on March 12 of a merger "within weeks."

LevelSeas was founded by Shell, Cargill, and London shipbroker Clarksons in April 2000, to broker ships for cargoes over the Internet. It has always been seen by the shipping industry as the lead contender, closely followed by SeaLogistics. "LevelSeas will exchange equity for the primary assets of SeaLogistics," it said a statement.

The deal with SeaLogistics will strengthen LevelSeas' position in the tanker markets especially, it said.

LevelSeas' core business is e-broking, but the platform also offers voyage-management and risk management tools. Freight futures trading will also be offered.

Connor O'Brien, CEO of MaritimeDirect, said back in January that e-broking would never replace traditional shipbroking. It was more likely to generate a software fee than the full broking fee of 1.25 percent initially envisaged, he said. LevelSeas' CEO Richard Hext did not reject that view. "LevelSeas revenues will be a mixture of subscription fees for the software and transaction fees for deals concluded online," he said. The mix will be dictated by customers needs. Hext said the absolute maximum transaction fee would be around one percent of the transaction value.

LevelSeas said that five investors lost from a second round of 26 backers had been replaced by eight through the SeaLogistics acquisition.

"This new second round of investors is bringing in slightly more money (than the original 26)," said Hext. He said the company's total investment value was $40 million.

The first major shipping e-broker to fold was London-based Shipdesk, which failed to re-open its offices in the New Year, while MaritimeDirect had also talked of entering the e-broking market.

MaritimeDirect used its last day in operation to issue a warning to surviving shipping e-commerce ventures that the concept was flawed "Others have yet to learn that expensive lesson," reads a parting message on its website,

Arvid Bergvall, CEO of e-ship-supplier OneSea rejected the view. "It doesn't invalidate the business model just because one company fails," he said. "But it's a hell of a lot more difficult and costs a hell of a lot more than many people originally thought." Bergvall said the current round of consolidation would continue. "OneSea will be involved in a round of consolidation within weeks," he said. "We've been looking for synergies, and we think we've found a few." - (Reuters)

Maritime Reporter Magazine Cover Nov 2017 - The Workboat Edition

Maritime Reporter and Engineering News’ first edition was published in New York City in 1883 and became our flagship publication in 1939. It is the world’s largest audited circulation magazine serving the global maritime industry, delivering more insightful editorial and news to more industry decision makers than any other source.

Maritime Reporter E-News subscription

Maritime Reporter E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

Subscribe for Maritime Reporter E-News