Accountant and shipping adviser Moore Stephens says shipping companies should explore leasing opportunities as a way of adjusting their self-owned and chartered-in tonnage balance in response to the radical changes that have taken place in ship financing in recent years.
Phil Cowan, the firm’s Head of Corporate Finance, says: ‘The traditional thinking of a company needing to own all the resources it uses to operate has been successfully challenged for many years in the shipping industry by the use of extensive outsourcing.’ Cowan states this improves efficiency and helps make better use of resources.
Aviation Industry
Cowan continues by saying shipping could learn from the aviation industry: ‘Shipping and aviation are both capital-intensive, cyclical industries employing assets which have a long economic life. But whereas a well-established airline would probably own roughly a third of the planes it operates, and lease the rest, with about half of chartered-in aircraft typically under operating leases, shipping has not embraced the leasing concept to anything like the same extent.’
Opportunities for Ship Operators
‘Of course ships and planes are very different, not least because ships are mostly tailor-made for the cargoes they carry. But leasing does offer some interesting opportunities for ship operators and Chinese lessors in shipping have developed rapidly over the past few years,’ says Cowan.
Number of Leasing Companies on the Rise
In the latest issue of the Moore Stephens shipping newsletter, Bottom Line, Paul Chang, Managing Director and Global Head of Shipping at ICBC Financial Leasing Co Ltd, Beijing, says: ‘[W]ith the correct leasing and finance structure, it is possible to put together a bespoke ship leasing and finance package. There are now twenty financial leasing companies backed by banks and large corporates in China, with more expected to be formed.’
