A new battle to provide tickets to trade to the US for 5,000 dry-cargo ships is in prospect over the next Few months.
Only half the dry-cargo vessels that need new-style Certificates of Financial Responsibility (COFRs) for US trading have so far obtained them. When the current Oil Pollution Act-mandated COFR requirement came into force in 1994, dry cargo vessels were permitted to trade on their old certificates for up to three years. The three-year period is now almost up, and Shoreline Mutual intends to win a sizeable slice of this business.
Some 1,250 COFRs have been issued to tankers, representing virtually all such vessels likely to trade to the US. A total of 4,170 COFRs have been issued for dry cargo vessels, but this is believed to amount to less than half the ships that will ultimately need certificates.
Shoreline Mutual manager Simon Scupham believes the emphasis of the COFR business will now shift to the dry-cargo sector following the recent shake-up in the COFR schemes. The Bermuda-based club - the only one of the original COFR schemes that is still In business - is already thinking about what it will do once most dry-cargo vessels have secured COFRs.
Scupham says he is looking at new products that shipowners may need, but he is reluctant to reveal too many details.
Scupham, in London this week to discuss changes in Shoreline Mutual with shipowners and brokers, says he is pleased with the amount of new business the club is attracting.
A restructuring of Shoreline's reinsurance arrangements, now led by Stephen Catlin at Lloyd's, means the risk of a cash call falling on members has now been eliminated.
Scupham also emphasizes that Shoreline Mutual remains committed to being the lowest-cost COFR guarantor, and the only scheme that includes cover for full legal defence costs.
The latest US Coast Guard figures show that Shoreline Mutual has nearly 2,000 guarantees outstanding, and is the largest provider of COFR guarantees to tanker owners, with 549 issued. Members of the club include Evergreen, Sanko, Gotaas-Larsen, Safmarine, Hanjin, Stena, P&O Cruises, First Olsen Tankers and Argonaut.