Tankers: Why think Baltic Exchange?

Feb 18 2021

A glance at a list of the world’s top tanker charterers and owners shows that they have more than just the movement of liquid cargoes in common.

Most are also members of the Baltic Exchange. 15 of the 20 largest crude oil charterers, five of the seven supermajors and five of the eight biggest tanker owners all benefit from membership of the Baltic. The world’s leading tanker brokers all sit on the Baltic Exchange panels, providing the industry with independent, accurate data. 


The focus is now on bringing in more tanker pools and smaller independent tanker owners from Europe, Asia and the Americas into Baltic membership. The campaign is being led by US based Paul Mazzarulli, a well known figure in tanker circles having worked for Chemoil, Evolution Markets, MJLF, Noble and PVM amongst others in his 25 plus years in shipping. 


“We offer the tanker market more than just data, but a seat at the table and the ability to get involved with the development of new routes and services,” explains Paul Mazzarulli, Americas Representative at the Baltic Exchange. 


With Baltic Exchange assessments used to settle physical and futures contracts as well as benchmark performance, the ability to have a say on new routes and vessel descriptions is important to any company trading tankers. 


“The discussions around TD9, our East Colombia to US Gulf route, are a good example of this,” says Paul Mazzarulli. “We have seen business dropping away from Colombia and over to east coast Mexico. We quickly gathered feedback from members via our Advisory Councils and consultation processes. The result is a TD26 route which is currently in private trial. The same happened last year with our TC18 MR route. We saw more cargoes than ever moving from the US Gulf to Brazil, and we’re now up and running with a well-traded route thanks to the input from the market.”


Paul Mazzarulli firmly believes that tanker pools and smaller owners can benefit from the services offered by the Baltic Exchange. 


“It’s not just about access to data, but our dispute resolution and escrow services which can be used to help save pool operators and owners significant amounts of money.” 


In a low market, the ability to chase unpaid demurrage and cargo claims quickly and efficiently is critical. The Baltic’s dispute resolution service helps members recover millions of dollars in late commissions, unpaid freight, demurrage, and arbitration awards as well as resolving disputes amicably, often negating the need for further legal action. Maintaining commercial relationships is always a priority and cases reported to the Baltic are handled in close cooperation with the company reporting the issue. 


Membership of the Baltic Exchange also grants access to its valuable escrow service. The Baltic performs all diligence checks and holds funds securely. The service can be used by tanker operators for chartering security payments when dealing with new or unfamiliar counterparties, allowing them to deal with a wider range of charterers than before. 


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