Yesterday it was Sembcorp marine losses of US$303 millions, today Labroy - suffering unrealised forex losses over US$200 millions - spectacular losses - make you wonder how this game is being played and if we can expect further shock from other companies - make you wonder how complicated this game is that even professional financial experts entrusted with the companies fortune are caught by such exposures.
Monsoon has been very conservative in ensuring our company funds, funds entrusted to us such as for crew wages are not exposed to such intentional risk. We believe in FD and strong cash flow. We are fortunate that our principals are good paymasters. We pay our crew and other creditors on time and promptly.
Even then, we are constantly checking to ensure our accounts are water tight but we can never be 100% sure. For example the depreciating US dollars has been a pain, we have not reacted fast enough to moderate the situation but of course we shall never go into the type of leveraging that are probably behind the spectacular losses in forex exposure.
My favourite website, Tan Kin Lian's blog has recently written extensively about twin currency deposits etc which are being pushed aggressively by the banks - the advice from Mr Tan Kin Lian is very clear, very useful to those who will like to have a fair and completely independent opinion - so far, even as Mr Tan has invited alternative view, no banks has seen it fit to response, to dispute his calculation, his view that such products are stack against the consumers - and that we are getting a bad deal. so, do check his website from time to time for good old plain financial advice, free of charge.
As with other companies, Monsoon's operating expenses such as rental and staff has increase much beyond expectation. Our earnings based on our manning fee has just been reviewed but at modest level which I think may not fully cover the higher cost of operations.
We are happy that the crew shortage means much higher wages for the crew who has not seen any changes to their wages for many years before. However, the shortage also means that our customers are paying higher wages but getting in return, not necessarily better quality crew. The situation is expected to get worst in the next two years at least.
Anyway, Monsoon, we are long term serious professionals who intend to be in this business in the long haul both in good and bad time. We will stand together with our crew, our partners and our customers. We believe in a good future ahead for our organisation because we believe in our people and our commitment to the industry. We must leverage on our past experience and use it effectively to overcome the new challenges ahead of us.
Looking back, our mission statement remain just as relevant if not more in this uncertain, heady time - Responsible Management * Professional Seamanship.
Saturday, November 17, 2007
Monday, November 12, 2007
Shipping Cycles - from MARITIME ECONOMICS
So where does this leave us in terms of predicting freight cycles? There are three
conclusions to be drawn. First, in shipping cycles, as in a poker game, for every
winner there must be a loser. This aspect of the business is about risk management,
not carrying cargo. Shipping is not quite a zero sum game, but as we have seen,
when we look at the financial returns, it comes pretty close. Second, shipping
cycles are not random. The economic and political forces which drive them, although
highly complex, can be analysed, and the information used to improve the odds in
the player’s favour. But remember that if everyone has the same idea, it will not
work. Third, like poker, each player must assess his opponents, take a view on how
they will play the game, and work out who will be the loser this time. In the end no
loser means no winner.
We should not be surprised that this makes shipping sound more like a gambling
game than a sober transport business. It is a gambling game. Shippers turn to the
shipping market because they do not know how much shipping capacity they will
need in future. Nobody does. The job of the shipowner is to make the best estimate
he can and take a gamble. If he is wrong he loses. These decisions are complex and
often require decisive action which flies in the face of market sentiment.
conclusions to be drawn. First, in shipping cycles, as in a poker game, for every
winner there must be a loser. This aspect of the business is about risk management,
not carrying cargo. Shipping is not quite a zero sum game, but as we have seen,
when we look at the financial returns, it comes pretty close. Second, shipping
cycles are not random. The economic and political forces which drive them, although
highly complex, can be analysed, and the information used to improve the odds in
the player’s favour. But remember that if everyone has the same idea, it will not
work. Third, like poker, each player must assess his opponents, take a view on how
they will play the game, and work out who will be the loser this time. In the end no
loser means no winner.
We should not be surprised that this makes shipping sound more like a gambling
game than a sober transport business. It is a gambling game. Shippers turn to the
shipping market because they do not know how much shipping capacity they will
need in future. Nobody does. The job of the shipowner is to make the best estimate
he can and take a gamble. If he is wrong he loses. These decisions are complex and
often require decisive action which flies in the face of market sentiment.
Friday, November 9, 2007
Monsoon - Preparing for the future
It is important for any organisation to periodically review its practices, leverage on its experience and resources, think how to move ahead in the ever and fast changing business environment.
I could say manning is especially challenging as well as offering unprecedented opportunities at this moment. How long the shipping and economic boom will last is hard to predict, perhaps we need not spend too much time thinking about this, it is more fruitful to see the business as ongoing, in good as well as bad time.
In Myanmar, we have make more efforts to enhanced our training facilities. I see it as just the start of our growing investment in our crew resource and facilities there starting with our new Monsoon building in Yangon about two years ago.
For some time now, our Manila office is enjoying a boom in seismic crew supply business. We have become the foremost manning company to approach if you should be in need of such crew. We have moved to a new and larger office space in a nice building (Marbella) fronting the renown Manila bay and Roxas Boulevard. We are now renovating our office and making it to international standard.
In Singapore, we have now our new GM very much hitting the ground running from the time he come aboard in May. Last month, we migrate our all our office staff to using laptops. Everyone gets a Lenovo thinkpad - most of us got the thinkpad X61 which is a top of the line, cutting edge laptop, very lightweight, long battery life over 5 hours.
We are preparing our company so that we can avoid expensive overheads and running cost. Over the years, we have drastically reduces paper and filing in our offices. We are now already working and available 24/7, anywhere in the world. This is evident by our almost immediate response to all operational requirement from the ships and other associates that we are corresponding with.
There are much to be done, but so far, it has been an interesting year of renewal for us in Monsoon.
I could say manning is especially challenging as well as offering unprecedented opportunities at this moment. How long the shipping and economic boom will last is hard to predict, perhaps we need not spend too much time thinking about this, it is more fruitful to see the business as ongoing, in good as well as bad time.
In Myanmar, we have make more efforts to enhanced our training facilities. I see it as just the start of our growing investment in our crew resource and facilities there starting with our new Monsoon building in Yangon about two years ago.
For some time now, our Manila office is enjoying a boom in seismic crew supply business. We have become the foremost manning company to approach if you should be in need of such crew. We have moved to a new and larger office space in a nice building (Marbella) fronting the renown Manila bay and Roxas Boulevard. We are now renovating our office and making it to international standard.
In Singapore, we have now our new GM very much hitting the ground running from the time he come aboard in May. Last month, we migrate our all our office staff to using laptops. Everyone gets a Lenovo thinkpad - most of us got the thinkpad X61 which is a top of the line, cutting edge laptop, very lightweight, long battery life over 5 hours.
We are preparing our company so that we can avoid expensive overheads and running cost. Over the years, we have drastically reduces paper and filing in our offices. We are now already working and available 24/7, anywhere in the world. This is evident by our almost immediate response to all operational requirement from the ships and other associates that we are corresponding with.
There are much to be done, but so far, it has been an interesting year of renewal for us in Monsoon.
Wednesday, November 7, 2007
Dewali
8th November is Dewali - Monsoon wishes all our Indian friends, associates and seamen a Happy Dewali.
This festival is celebrated in Singapore as a public holiday as well as in Myanmar but not in Indonesia or the Philippines where our offices will remain open.
This festival is celebrated in Singapore as a public holiday as well as in Myanmar but not in Indonesia or the Philippines where our offices will remain open.
Human Capital Development in Maritime Industry
Today, I received an invitation to attend this seminar on 29th November at the NTU. Looks interesting. Please click the below link for more information on this event.
Human Capital Development in Maritime Industry
By
· Captain Jan Horck, Lecturer, World Maritime University
· Captain Anuj Sahai, Lead Specialist-Risk and Human Factors, Lloyd’s Register Asia
· Mr Ian Claxton, Country Manager, APL Singapore
http://www.ntu.edu.sg/cee/program/maritime/maritimeEvents/
Human Capital Development in Maritime Industry
By
· Captain Jan Horck, Lecturer, World Maritime University
· Captain Anuj Sahai, Lead Specialist-Risk and Human Factors, Lloyd’s Register Asia
· Mr Ian Claxton, Country Manager, APL Singapore
http://www.ntu.edu.sg/cee/program/maritime/maritimeEvents/
Vietnam Manning
Yesterday, I attended a seminar organised by Wavelink for Vietnamese manning - The managers from Vietnamese national lines did a good presentation, giving us much useful information about the Vietnamese manning situation and their intention to start a training centre to develop more crew for their own expansion as well as for the international market. Much work still need to be done and the availability of Vietnamese crew are still hindered by various factors such as lack of English speaking ability, availability of senior ranks, small pools of crew for the international trade etc. Currently the Japanese are the main supporter for using Vietnamese crew and from time to time, some Singaporean companies has indicated interest.
Vietnam is developing rapidly and offer much potential for those with vision and ability to implement new projects.
Monsoon is more focus on Myanmar where we are already an entrenched player and also where the infrastructure and pool of crew are more developed than Vietnam. We hope recent events will lead to more open economy and if so, I think Myanmar will be a land of opportunity for Monsoon to develop further.
As in China, Vietnam does not allows its seamen to be employed directly by foreign shipping companies or free agent like Monsoon - the licence for manning agencies are strictly controlled, creating a near monopoly which does not encourage the growth of the industry, it is also not likely to be changed in the near future.
Vietnam is developing rapidly and offer much potential for those with vision and ability to implement new projects.
Monsoon is more focus on Myanmar where we are already an entrenched player and also where the infrastructure and pool of crew are more developed than Vietnam. We hope recent events will lead to more open economy and if so, I think Myanmar will be a land of opportunity for Monsoon to develop further.
As in China, Vietnam does not allows its seamen to be employed directly by foreign shipping companies or free agent like Monsoon - the licence for manning agencies are strictly controlled, creating a near monopoly which does not encourage the growth of the industry, it is also not likely to be changed in the near future.
Slowly Blog
It is becoming a painfully slow process to get into my own blog and do a posting, i am still trying to find out what is the problem. I have experienced this slowness for some days now. I have been discouraged from making more postings - so if you do not see more postings in the coming days, it may well be I am still struggling and fighting to get inside my blog or maybe I have given up. I will definitely not win any award for patience - so lets see how it goes.
Jakarta
I make a visit to Jakarta last friday to support Capt Lee in lining up a set of crew for our new offshore client - and see how we can develop potential business with Indonesian crew - we have a good trip. There are much work to be done, it is part of the process of building further the management experience of our team.
The wages for Indonesian crew are perhaps the lowest compare to crew from the other Asean countries. A captain of a tugboat working in Kalimantan get about two millions rupiah per month, how much is that? US$222 per month! Those working with Singaporean companies such as bunker boats or OPL boats are still relatively lowly paid even if it is much more than the local tugboat captain.
I took the opportunity to spend the weekend on a private tour to Puncak and Bandung. More than 30 years ago, I travelled by train and remember the lush greenery and vista of terrace ricefields, some of which are thankfully still there even if they are receding, fighting a losing battle against relentless urbanisation.
The highway partly to Puncak and return from Bandung to Jakarta are really impressive but when it near to Jakarta or during peak holidays season, jammed pack with vehicles, a testimonial to the wealth and inability of infrastructure keeping up with the growth being experienced in Indonesia and throughout Asia.
Bandung is popular for local from Jakarta, but as far as I can see, very few foreign tourists, nothing much to do there. The hotels are mostly three star catering to locals except for the Sheraton which is of usual expected international standard.
The wages for Indonesian crew are perhaps the lowest compare to crew from the other Asean countries. A captain of a tugboat working in Kalimantan get about two millions rupiah per month, how much is that? US$222 per month! Those working with Singaporean companies such as bunker boats or OPL boats are still relatively lowly paid even if it is much more than the local tugboat captain.
I took the opportunity to spend the weekend on a private tour to Puncak and Bandung. More than 30 years ago, I travelled by train and remember the lush greenery and vista of terrace ricefields, some of which are thankfully still there even if they are receding, fighting a losing battle against relentless urbanisation.
The highway partly to Puncak and return from Bandung to Jakarta are really impressive but when it near to Jakarta or during peak holidays season, jammed pack with vehicles, a testimonial to the wealth and inability of infrastructure keeping up with the growth being experienced in Indonesia and throughout Asia.
Bandung is popular for local from Jakarta, but as far as I can see, very few foreign tourists, nothing much to do there. The hotels are mostly three star catering to locals except for the Sheraton which is of usual expected international standard.
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