Profile: Stars Align for Wallem Commercial Services
Market drivers have created a significant opportunity for Wallem to grow a specialised area of business, according to Capt. Anurag Mathur, Managing Director, Commercial Services, Wallem Group.
Wallem’s portfolio of commercial services is ideally placed for expansion across a full range of vessel types, according to the executive appointed to drive for growth in January 2023. And Capt. Anurag Mathur, whose previous roles include senior managing directorships at leading ship owning and ship management companies, says he is relishing both the task and the trust placed in him by the Wallem board to make things happen.
Launched in 2008, Wallem Commercial Services offer a unique portfolio of capabilities, by including commercial ship and cargo management, broking, chartering and sale & purchase, but also insurance and advisory financial services, loan facility and distressed asset management.
With more than 200 vessels signed up to conventional ship management agreements with Wallem, the commercial services operation is well established and growing in the group. However, Capt. Mathur says that the commercial services relationship with owners is of a different nature, with owners leveraging Wallem’s experience in areas that are usually closed to third parties - including back-office support and asset financing.
Faced by persistent market volatility, ambiguity on sanctions, supply chain disruption and uncertainties over ship emissions requirements, owners can benefit by consulting with Wallem shipping knowhow which this year marks its 120th anniversary, says Capt. Mathur. In an industry also afflicted with rising interest rates, accessing financial analysis, project evaluation and investment project management that is wholly independent is also a clear value add.
“There are clear opportunities for independent commercial services in today’s market,” says Capt. Mathur. Already, prospects are strong in the bulk carrier and chemical tanker sector, he adds, while over ordering and deteriorating rates in the containership market may push owners to seek asset refinancing.
Meanwhile, commercial shipping as a whole is facing up to fixed greenhouse gas emissions targets.
As part of its conventional ship management, Wallem’s integrated commercial software analytics is already monitoring vessels for CII profile and has developed predictive capability to plan for future compliance. However, Capt. Mathur believes a significant part of the market will need more than technical consultancy alone to meet its obligations.
“If you look at mandatory EEXI and CII requirements, our sense is that a lot of people will start wondering what to do at the end of the year, when it will already be too late,” he says. Class can help owners with their immediate reporting needs into the IMO’s Data Collection System, but they also urgently need to review their readiness to respond to whatever CII ratings apply to their vessels.
If some believe from experience that alarm over approaching maritime rules can be overblown, Capt. Mathur offers a stark warning. “The difference this time is that the EU ETS will be mandatorily implemented from 1 January 2024 – at least in Europe and will have significant impact on Ship Owners, DOC holders and their Commercial partners. I think people are just realizing the magnitude of what is going to come soon. There’s an urgent need for owners to get the right advice.”
Furthermore, formulating plans to reduce carbon profile over time – which is also required by the GHG & CII framework – will demand a proactive assessment of asset longevity and an evaluation of the ROI of extending the life of older tonnage.
Faced by equipment suppliers pushing energy saving devices, an array of low carbon fuels and a multitude of software options that vendors claim solve sustainability challenges using analytics alone, owners seeking CII reductions now are wary of making the wrong investment choices.
“Of course, owners need independent technical partners to evaluate the feasibility of any new technology, but they also need a commercial partner to evaluate ROI and broaden the review to other options such as different routes or trading patterns. On top of that, owners will need to finance the measures they have in mind.
“We see a distinct opportunity to grow Wallem Commercial Services as a one stop shop, where we can assess owner needs, agree a plan, facilitate finance and project manage to completion as a partner who stands by our recommendations to prove that they work in practice.”
The company’s financial consultancy, loan facility management and transaction support are likely to be powerful tools in growth plans for Wallem Commercial Services, says Capt. Mathur. “Where ROI can be established for retrofitting a new technology to extend a ship’s life expectancy to fit with tightening limits for carbon emissions, for example, Wallem Commercial Services has lines to a number of financial institutions, including sizeable Green Funds.”
Recalling the returns made by owners willing to agree financing for exhaust gas scrubber technology in the run up to IMO 2020 restrictions on fuel sulphur content, investments in the compliance of older assets can reap the rewards of market opportunities, he observes.
Owners also need broader commercial services to help them adjust to shipping’s new era of transparency, says Capt. Mathur. Smaller owners may simply lack the resources to service shipping’s new benchmarking culture or may recoil from open-ended expenses brought by multiple experts - all promising to help them through one part of the process.
“The shipping business is often about making connections and there are many people who can help owners with part of their needs when it comes to asset or technology evaluation, financing, project management and delivery. However, different stakeholders mean multiple negotiations. The basis for growing Wallem Commercial Services is that we will partner our customers from start to finish, as a one stop solution for their commercial and technical needs.”