1 00:00:07,600 --> 00:00:10,240 Speaker 1: Hi everyone, this is Lee Klaskow when We're Talking Transports. 2 00:00:10,320 --> 00:00:13,560 Speaker 1: Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host, 3 00:00:13,600 --> 00:00:16,439 Speaker 1: Lee Claskow, Senior Freight Transportation lo just ex analysts at 4 00:00:16,440 --> 00:00:19,840 Speaker 1: Bloomberg Intelligence, Bloomberg's in house research arm of almost five 5 00:00:19,880 --> 00:00:23,280 Speaker 1: hundred analysts and strategists around the globe. Before diving in 6 00:00:23,400 --> 00:00:26,680 Speaker 1: a little public service announcement. Your support is instrumental to 7 00:00:26,720 --> 00:00:29,880 Speaker 1: keep bringing great guests and conversations to You are listeners, 8 00:00:30,080 --> 00:00:33,040 Speaker 1: and we need your support. So please, if you enjoy 9 00:00:33,040 --> 00:00:36,480 Speaker 1: this podcast, share it, like it and leave a comment. Also, 10 00:00:36,640 --> 00:00:38,680 Speaker 1: if you have any ideas for future episodes or just 11 00:00:38,720 --> 00:00:41,000 Speaker 1: want to talk transports, please sit me up on the 12 00:00:41,000 --> 00:00:43,879 Speaker 1: Bloomberg terminal, on LinkedIn or on Twitter at logistics Late. 13 00:00:44,320 --> 00:00:47,600 Speaker 1: Now onto our episode, I'm very excited to have Jan 14 00:00:48,000 --> 00:00:50,960 Speaker 1: Ringbow the CEO of d S Jordan A. Rollie is 15 00:00:50,960 --> 00:00:54,560 Speaker 1: held since joining the company in twenty fifteen. Ds Nordon 16 00:00:54,600 --> 00:00:58,960 Speaker 1: trades under the ticker dnor D and as a market 17 00:00:58,960 --> 00:01:02,560 Speaker 1: cap around a billion time. Jehan was previously employed with 18 00:01:02,640 --> 00:01:05,800 Speaker 1: the Hong Kong listed dry cargo shipping company Pacific Basin 19 00:01:05,840 --> 00:01:09,720 Speaker 1: for more than thirteen years, most recently as COO, member 20 00:01:09,840 --> 00:01:12,839 Speaker 1: of the Executive Committee and on the Board of Directors. 21 00:01:13,000 --> 00:01:16,720 Speaker 1: Welcome to the podcast, Jean, thank you very much. So 22 00:01:17,600 --> 00:01:20,200 Speaker 1: DS Nordon, you guys do a couple of things in shipping. 23 00:01:20,200 --> 00:01:22,600 Speaker 1: Can you give us a little breakdown of about what 24 00:01:22,640 --> 00:01:23,399 Speaker 1: the company does? 25 00:01:23,959 --> 00:01:26,120 Speaker 2: Yeh, So, first of all, Norton has a very long 26 00:01:26,240 --> 00:01:28,679 Speaker 2: history one hundred and fifty years or more than one 27 00:01:28,720 --> 00:01:32,000 Speaker 2: hundred and fifty years in the global shipping, and today 28 00:01:33,720 --> 00:01:38,119 Speaker 2: Norton is one of the leading providers of ocean freight 29 00:01:38,800 --> 00:01:42,320 Speaker 2: in dry ball, project cargo and product tankers. 30 00:01:43,240 --> 00:01:47,000 Speaker 1: Okay, and roughly how big is your fleet on the 31 00:01:47,080 --> 00:01:47,960 Speaker 1: dry box side? 32 00:01:48,200 --> 00:01:51,960 Speaker 2: So we operate a fleet in total of around four 33 00:01:52,000 --> 00:01:55,840 Speaker 2: hundred vessels and around two thirds of that activity is 34 00:01:55,840 --> 00:01:57,880 Speaker 2: in dry bulk and the last one third is in 35 00:01:57,880 --> 00:01:58,840 Speaker 2: product tankas. 36 00:01:59,400 --> 00:02:02,080 Speaker 1: And so do you guys specialize in a certain sizes ship? 37 00:02:02,120 --> 00:02:05,560 Speaker 1: Are you more in the larger capes or the smaller vessels? 38 00:02:05,880 --> 00:02:09,800 Speaker 2: So we are actually represented in all sizes. So we 39 00:02:09,880 --> 00:02:15,800 Speaker 2: service our customers on anything from very small parcels of 40 00:02:15,880 --> 00:02:18,320 Speaker 2: a couple of thousand tons of cargo up to the 41 00:02:18,520 --> 00:02:23,040 Speaker 2: very largest dry boat shipments on Newcastle Access, which are 42 00:02:23,400 --> 00:02:26,440 Speaker 2: the last largest class of dry boat vessels of over 43 00:02:26,480 --> 00:02:28,040 Speaker 2: two hundred thousand deadway tons. 44 00:02:29,160 --> 00:02:32,519 Speaker 1: And on the tanker side, you guys specifically or more 45 00:02:32,720 --> 00:02:34,120 Speaker 1: on the product tanker side. 46 00:02:34,160 --> 00:02:35,679 Speaker 3: Is that correct? Yeah, that's right. 47 00:02:35,720 --> 00:02:39,480 Speaker 2: So we are solely in the product tanker space where 48 00:02:39,520 --> 00:02:43,840 Speaker 2: we operate predominantly in MR, which is the sort of 49 00:02:43,840 --> 00:02:46,800 Speaker 2: the middle sized product tankers, but we also have some 50 00:02:46,840 --> 00:02:49,440 Speaker 2: activities on the smaller handy size and the larger a 51 00:02:49,520 --> 00:02:51,720 Speaker 2: lot to product tankers. 52 00:02:52,080 --> 00:02:54,560 Speaker 1: Okay, and you mentioned earlier, you know, you guys have 53 00:02:54,600 --> 00:02:56,640 Speaker 1: a storied history. You've been around a long long time. 54 00:02:57,720 --> 00:02:58,080 Speaker 3: Harry. 55 00:02:58,240 --> 00:03:01,000 Speaker 1: How do you guys grow? Are you growing organically? Do 56 00:03:01,040 --> 00:03:04,399 Speaker 1: you acquire other companies or are you just acquiring assets? 57 00:03:05,639 --> 00:03:11,320 Speaker 2: So for most of our history, we've grown organically, and 58 00:03:11,760 --> 00:03:14,320 Speaker 2: we actually did our first M and A transaction only 59 00:03:14,400 --> 00:03:17,520 Speaker 2: two years ago, and then we did another one, so 60 00:03:17,520 --> 00:03:21,320 Speaker 2: we've done two M and A transactions and that was 61 00:03:22,200 --> 00:03:26,519 Speaker 2: with the purpose of growing into Project cargo. So we've 62 00:03:26,520 --> 00:03:29,040 Speaker 2: acquired two companies that are specialized in that field. 63 00:03:29,440 --> 00:03:32,600 Speaker 1: Okay, could you give a little explanation of what Project 64 00:03:32,600 --> 00:03:33,240 Speaker 1: cargo is. 65 00:03:34,000 --> 00:03:37,840 Speaker 2: Yes, So here it's cargos that are sort of odd 66 00:03:37,920 --> 00:03:42,040 Speaker 2: sized or unitized, so it can be cargos like windmill components, 67 00:03:42,160 --> 00:03:47,880 Speaker 2: so windmill blades and turbines, towers, we carry big industrial 68 00:03:48,600 --> 00:03:55,839 Speaker 2: battery installations. We carry steel products, we carry forestry products, 69 00:03:55,240 --> 00:03:59,120 Speaker 2: so so sort of what it's referred to as breakeboat cargos. 70 00:04:00,160 --> 00:04:02,560 Speaker 2: And then that comes in addition to all the traditional 71 00:04:03,000 --> 00:04:05,800 Speaker 2: bulk cargoes that we carry like grains and box side 72 00:04:05,800 --> 00:04:07,200 Speaker 2: and coal and so on. 73 00:04:08,160 --> 00:04:10,960 Speaker 1: Right, so they should be market's been pretty valatile. I 74 00:04:10,960 --> 00:04:13,040 Speaker 1: guess it's always been pretty valatile, but it seems to 75 00:04:13,080 --> 00:04:17,080 Speaker 1: be even more so valatile since the pandemic. Could you 76 00:04:17,120 --> 00:04:20,120 Speaker 1: talk about, you know, what's going on in your industries, 77 00:04:20,160 --> 00:04:22,400 Speaker 1: the dry book and the tanker markets. You know how 78 00:04:22,440 --> 00:04:26,640 Speaker 1: these how the US more protectionist policies are impacting your business. 79 00:04:26,880 --> 00:04:29,440 Speaker 2: Yeah, so, so our markets have always been very volatile, 80 00:04:29,480 --> 00:04:34,760 Speaker 2: so we kind of used to to manage volatility. But 81 00:04:34,839 --> 00:04:38,960 Speaker 2: it's right that that the before our volatility was sort 82 00:04:39,000 --> 00:04:44,320 Speaker 2: of mainly driven by supply and demand fundamentals, whereas in 83 00:04:44,480 --> 00:04:47,320 Speaker 2: the latter years, you know, it's more driven by events, 84 00:04:47,400 --> 00:04:48,839 Speaker 2: you know, like COVID. 85 00:04:49,640 --> 00:04:51,880 Speaker 3: But also now policies could be. 86 00:04:51,839 --> 00:04:55,920 Speaker 2: Trade policies, environ mental policies, so so there are more 87 00:04:55,960 --> 00:04:58,320 Speaker 2: things now that are sort of driving our markets than 88 00:04:58,960 --> 00:05:00,080 Speaker 2: maybe in the past. 89 00:05:00,320 --> 00:05:03,239 Speaker 1: And are you are you you know the the US 90 00:05:03,360 --> 00:05:05,960 Speaker 1: protectionist policies is that good or bad for the dry 91 00:05:06,040 --> 00:05:07,440 Speaker 1: ball or the product anchor market? 92 00:05:08,520 --> 00:05:11,559 Speaker 2: So for our markets of generally speaking, First of all, 93 00:05:12,720 --> 00:05:20,320 Speaker 2: the US market is the smaller in terms of when 94 00:05:20,360 --> 00:05:22,680 Speaker 2: you compare to the size of the US economy. So 95 00:05:23,120 --> 00:05:28,200 Speaker 2: in s Fressing Drybak we service more of the emerging markets. 96 00:05:29,200 --> 00:05:33,320 Speaker 2: So in that sense, the direct impact is not not huge. 97 00:05:33,320 --> 00:05:39,120 Speaker 2: But of course if trade policies start to impact the 98 00:05:39,120 --> 00:05:42,559 Speaker 2: broader sort of global economy, then then that also becomes 99 00:05:42,600 --> 00:05:45,080 Speaker 2: an issue for for our business. 100 00:05:45,120 --> 00:05:47,800 Speaker 1: Right and there there's obviously a lot more geopolitical risks, 101 00:05:47,880 --> 00:05:49,840 Speaker 1: or at least it seems there's a lot more geopolitical 102 00:05:49,920 --> 00:05:52,560 Speaker 1: risks recently. You know what's going on in the Red 103 00:05:52,600 --> 00:05:56,080 Speaker 1: Sea and obviously what's going on between Iran and Israel, 104 00:05:56,200 --> 00:05:58,920 Speaker 1: and how that might impact the straight or her moves. 105 00:05:59,040 --> 00:06:00,280 Speaker 3: Could you talk about know. 106 00:06:00,360 --> 00:06:02,719 Speaker 1: How I'm not going to call it the closure, but 107 00:06:02,800 --> 00:06:05,559 Speaker 1: how you know most people are avoiding the seas canal, 108 00:06:05,600 --> 00:06:08,000 Speaker 1: how that's impacted your business? 109 00:06:08,040 --> 00:06:12,080 Speaker 2: First of all, neither the Strait of Homers or the 110 00:06:12,520 --> 00:06:16,720 Speaker 2: Red Sea for that matter, are closed, so there's still 111 00:06:16,880 --> 00:06:19,880 Speaker 2: you know, some traffic going through the Red Sea as 112 00:06:19,880 --> 00:06:23,920 Speaker 2: an example, for safety reasons, we are not trading through 113 00:06:23,920 --> 00:06:27,880 Speaker 2: that region, and that means that for quite a lot 114 00:06:27,920 --> 00:06:29,839 Speaker 2: of ships, we're not the only ones, but for quite. 115 00:06:30,200 --> 00:06:33,120 Speaker 3: A big portion of the global fleet we are. 116 00:06:33,160 --> 00:06:38,320 Speaker 2: Transitting you know, south of Africa, and that means that 117 00:06:38,400 --> 00:06:41,240 Speaker 2: ships are going on longer routes. And that is one 118 00:06:41,240 --> 00:06:43,760 Speaker 2: of the developments that we have seen, you know, in 119 00:06:43,800 --> 00:06:46,360 Speaker 2: a world that is becoming you know, more divided, whether 120 00:06:46,440 --> 00:06:52,200 Speaker 2: it's sanctioned or these hostilities, we're seeing the utilization of 121 00:06:52,240 --> 00:06:56,280 Speaker 2: the global fleet is becoming less efficient. And actually some 122 00:06:56,320 --> 00:06:59,279 Speaker 2: of the U S trade policies that are directed towards 123 00:07:00,040 --> 00:07:03,840 Speaker 2: IY zoners will have that same impact. So in essence, 124 00:07:04,040 --> 00:07:07,080 Speaker 2: what this means is that you will need more ships 125 00:07:07,080 --> 00:07:11,520 Speaker 2: to carry the same volume of cargo simply because the 126 00:07:11,600 --> 00:07:14,520 Speaker 2: utilization of the global fleet is becoming less efficient. 127 00:07:16,160 --> 00:07:19,800 Speaker 1: Right, assuming you know, the Hoho thies you know, stop 128 00:07:19,880 --> 00:07:23,840 Speaker 1: doing what they're doing and the sewers canal is free 129 00:07:23,960 --> 00:07:28,720 Speaker 1: to and safe to traverse for all companies, that would 130 00:07:28,760 --> 00:07:31,280 Speaker 1: have a pretty negative impact on rates, right, because that 131 00:07:31,280 --> 00:07:33,480 Speaker 1: would that would increase capacity into the market. 132 00:07:34,160 --> 00:07:34,760 Speaker 3: Yeah, it. 133 00:07:36,200 --> 00:07:40,040 Speaker 2: I think that is the first sort of thought here. 134 00:07:40,160 --> 00:07:43,200 Speaker 3: But but what we don't. 135 00:07:43,040 --> 00:07:46,640 Speaker 2: Necessarily know is, you know how much trade has stopped 136 00:07:46,680 --> 00:07:48,600 Speaker 2: because of ships not being able to go through that 137 00:07:48,720 --> 00:07:52,200 Speaker 2: route or has been remoded from other sources. So it's 138 00:07:52,200 --> 00:07:55,200 Speaker 2: not necessarily a direct one to one comparison that you 139 00:07:55,240 --> 00:07:57,600 Speaker 2: can make. But I think the assumption here is, and 140 00:07:57,640 --> 00:07:59,440 Speaker 2: that is probably more on the tanker side than on 141 00:07:59,480 --> 00:08:02,840 Speaker 2: the dry car a side, is that that if that's 142 00:08:03,360 --> 00:08:06,240 Speaker 2: if the passage is free again and the trades revert 143 00:08:06,360 --> 00:08:09,320 Speaker 2: to where they were before it was, you know, before 144 00:08:09,360 --> 00:08:14,880 Speaker 2: the hostilitius began, that then then you would have you know, 145 00:08:15,000 --> 00:08:18,840 Speaker 2: basically capacity that is becoming released back into the market. 146 00:08:19,280 --> 00:08:22,440 Speaker 2: But but these trades also shift with the changes that 147 00:08:22,480 --> 00:08:26,360 Speaker 2: has happened, and especially in the longer time it it 148 00:08:26,400 --> 00:08:28,840 Speaker 2: goes before we go back to sort of the old 149 00:08:28,880 --> 00:08:29,480 Speaker 2: and normal. 150 00:08:29,440 --> 00:08:32,480 Speaker 1: Right, And I guess going back to you know, Trump's 151 00:08:32,480 --> 00:08:36,679 Speaker 1: first administration with the trade war with China, you know, China, 152 00:08:36,760 --> 00:08:40,640 Speaker 1: I guess decided to get soybeans elsewhere, which which which 153 00:08:40,679 --> 00:08:43,160 Speaker 1: is a net positive for the dry bull market because 154 00:08:43,200 --> 00:08:46,439 Speaker 1: it was longer a ton miles and voyage times. Are 155 00:08:46,480 --> 00:08:50,440 Speaker 1: you seeing anything like that today? Like with with you know, 156 00:08:50,880 --> 00:08:56,360 Speaker 1: this administration, are you seeing like China looking to import 157 00:08:56,480 --> 00:08:59,080 Speaker 1: some of the commodities that might have gotten from the 158 00:08:59,200 --> 00:09:01,040 Speaker 1: US for other places. 159 00:09:01,920 --> 00:09:04,200 Speaker 2: Well, I think the the example you just gave is 160 00:09:04,200 --> 00:09:05,559 Speaker 2: a good example of how. 161 00:09:05,480 --> 00:09:08,760 Speaker 3: Trade routes sort of are. 162 00:09:07,880 --> 00:09:11,360 Speaker 2: Reconfigurated and and trade sort of finds that new ways 163 00:09:11,440 --> 00:09:16,199 Speaker 2: to flow. And therefore sometimes the impact is it's more 164 00:09:16,240 --> 00:09:19,240 Speaker 2: of the shock when it happens because it sort of 165 00:09:19,240 --> 00:09:22,840 Speaker 2: happened arouptly, But then your markets find its way to 166 00:09:22,840 --> 00:09:26,000 Speaker 2: to to manage that over time. I think today the 167 00:09:26,440 --> 00:09:30,839 Speaker 2: direct trade in in dry bull can tangers is very 168 00:09:30,880 --> 00:09:33,000 Speaker 2: limited between China and. 169 00:09:33,000 --> 00:09:34,720 Speaker 3: The US today. 170 00:09:34,760 --> 00:09:37,520 Speaker 2: It's probably less than one percent of our total trade 171 00:09:37,520 --> 00:09:40,280 Speaker 2: that goes directly between the U S and China. So 172 00:09:40,360 --> 00:09:42,440 Speaker 2: this is very different from the container trades that are 173 00:09:42,480 --> 00:09:46,120 Speaker 2: much more reliant on on on that direct trade. For 174 00:09:46,120 --> 00:09:50,360 Speaker 2: for our markets, this the tea copying has already happened, 175 00:09:50,920 --> 00:09:54,480 Speaker 2: and it's not not any by any means, any any 176 00:09:54,520 --> 00:09:58,679 Speaker 2: significant trade that that exists today between the US and China. 177 00:09:59,480 --> 00:10:04,640 Speaker 1: Yeah, yeah, it is generally speaking, How would you how 178 00:10:04,640 --> 00:10:07,800 Speaker 1: would you characterize the state of the dryboll market today? 179 00:10:08,640 --> 00:10:11,480 Speaker 2: Yeah, So, so with all the noise we've had in 180 00:10:12,120 --> 00:10:17,560 Speaker 2: global markets generally speaking, this year, it's actually been very resilient, 181 00:10:17,840 --> 00:10:22,720 Speaker 2: pretty flat. We've not actually had that much relagility this year. 182 00:10:24,640 --> 00:10:27,160 Speaker 2: You may have thought that with all the noise around 183 00:10:27,240 --> 00:10:31,760 Speaker 2: the trade policies, that that that that would have sort 184 00:10:31,760 --> 00:10:35,680 Speaker 2: of disrupted our business. That is not the pattern that 185 00:10:35,720 --> 00:10:39,240 Speaker 2: we're seeing. We're seeing pretty you know again, pretty pretty 186 00:10:39,240 --> 00:10:45,080 Speaker 2: steady trade volumes, pretty steady markets. Not great markets, but 187 00:10:45,160 --> 00:10:49,000 Speaker 2: not not sort of bad markets either. So it's actually 188 00:10:49,000 --> 00:10:50,080 Speaker 2: been been quite flat. 189 00:10:50,240 --> 00:10:53,240 Speaker 1: Yeah, I mean, your your earnings peaked in twenty twenty 190 00:10:53,280 --> 00:10:56,760 Speaker 1: two and kind of has steadily come down. Is you 191 00:10:56,800 --> 00:11:00,200 Speaker 1: know the expectations for this year? Is this the the 192 00:11:01,040 --> 00:11:06,800 Speaker 1: normalization of earning power for Norton? And are you really 193 00:11:06,880 --> 00:11:09,360 Speaker 1: just beholden to where our rates go and that's kind 194 00:11:09,400 --> 00:11:11,920 Speaker 1: of how we're really going to drive earnings one way 195 00:11:12,000 --> 00:11:12,360 Speaker 1: or the other. 196 00:11:13,360 --> 00:11:15,720 Speaker 2: Yeah, I think what I mean the earnings we saw, 197 00:11:16,240 --> 00:11:18,000 Speaker 2: if you go back to twenty twenty two, that was 198 00:11:18,040 --> 00:11:21,840 Speaker 2: also the best year ever in Norton's history in terms 199 00:11:21,880 --> 00:11:26,000 Speaker 2: of earnings, record profit, highest in our over one hundred 200 00:11:26,000 --> 00:11:28,400 Speaker 2: and fifty years. So I think that that was not 201 00:11:28,760 --> 00:11:30,920 Speaker 2: that was sort of a not the norm sort of 202 00:11:30,960 --> 00:11:34,240 Speaker 2: kind of level. It's a nice benchmark, but right, but 203 00:11:34,559 --> 00:11:38,160 Speaker 2: we're getting we are back to more sort of normalized markets, 204 00:11:38,800 --> 00:11:42,760 Speaker 2: normalized the earnings. And I think in Norton we build 205 00:11:42,760 --> 00:11:45,560 Speaker 2: a business model where where we are more acid light, 206 00:11:46,120 --> 00:11:49,120 Speaker 2: we are more agile, we are more able to adapt 207 00:11:49,160 --> 00:11:52,840 Speaker 2: to these changing markets. And that means that that even 208 00:11:52,840 --> 00:11:56,480 Speaker 2: though rates have come down, we're still generating. 209 00:11:56,120 --> 00:11:58,320 Speaker 3: You know, decent profits. 210 00:11:58,360 --> 00:12:02,920 Speaker 2: We're still generating I think based in class returns and 211 00:12:03,000 --> 00:12:06,199 Speaker 2: invested capital because we have that flexibility and the ability 212 00:12:06,800 --> 00:12:11,360 Speaker 2: to adapt to these markets. So I think we're using 213 00:12:11,360 --> 00:12:14,400 Speaker 2: some of these strings. But these sort of very very 214 00:12:14,480 --> 00:12:19,640 Speaker 2: high profits I think are you know, they only happen 215 00:12:19,640 --> 00:12:21,880 Speaker 2: when you have very very big changes in the market 216 00:12:22,000 --> 00:12:23,480 Speaker 2: and very high freight rates. 217 00:12:23,640 --> 00:12:23,880 Speaker 3: Yeah. 218 00:12:24,280 --> 00:12:26,520 Speaker 1: And you know you mentioned you're more asset light, so 219 00:12:27,000 --> 00:12:30,840 Speaker 1: are most of your most of the ships in your fleet, 220 00:12:30,840 --> 00:12:33,520 Speaker 1: they're time tritered in they're not you guys don't own them. 221 00:12:34,080 --> 00:12:34,320 Speaker 3: Yeah. 222 00:12:34,360 --> 00:12:37,439 Speaker 2: So out of a fleet of just over four hundred 223 00:12:37,520 --> 00:12:41,040 Speaker 2: vessels we have we only own actually directly about five 224 00:12:41,040 --> 00:12:46,760 Speaker 2: percent of that fleet. But we do have another portion 225 00:12:46,840 --> 00:12:48,760 Speaker 2: of the fleet that are leased. 226 00:12:48,520 --> 00:12:49,640 Speaker 3: With purchase options. 227 00:12:50,200 --> 00:12:52,640 Speaker 2: So that means that out of the four hundred, roughly 228 00:12:52,720 --> 00:12:55,160 Speaker 2: we have about one hundred vessels, including our own and 229 00:12:55,280 --> 00:13:00,720 Speaker 2: leased vessels where we have some kind of asset exposure. Now, 230 00:13:00,760 --> 00:13:04,600 Speaker 2: the nice thing will purchase options is that, yes, you 231 00:13:04,640 --> 00:13:06,719 Speaker 2: can use them when enterprises are high and you get 232 00:13:06,760 --> 00:13:10,160 Speaker 2: some value out of it. But likewise, in lower markets, 233 00:13:10,440 --> 00:13:12,959 Speaker 2: you are not burdened by having the ownership of the 234 00:13:13,040 --> 00:13:17,160 Speaker 2: vessels and you can deliver them if you're not making 235 00:13:17,200 --> 00:13:20,360 Speaker 2: money on them. So this is actually one of the 236 00:13:20,760 --> 00:13:24,040 Speaker 2: key parts of our strategy of our business model, having 237 00:13:24,080 --> 00:13:29,640 Speaker 2: that kind of flexibility, which also means that in very 238 00:13:29,720 --> 00:13:31,880 Speaker 2: very good markets you actually have that sort of X 239 00:13:31,920 --> 00:13:35,959 Speaker 2: factor where you can use these options to your advantage, 240 00:13:36,320 --> 00:13:39,720 Speaker 2: whereas in lower markets you're also more protected because you 241 00:13:39,760 --> 00:13:41,520 Speaker 2: don't have to own the ships. You can redliver them 242 00:13:41,520 --> 00:13:45,040 Speaker 2: back to the owner and then we knew we new 243 00:13:45,120 --> 00:13:50,000 Speaker 2: charters at lower market rates. So this is definitely a 244 00:13:50,000 --> 00:13:51,520 Speaker 2: coneristome part of our strategy. 245 00:13:52,240 --> 00:13:54,320 Speaker 1: And is there is there a time horizon where you 246 00:13:54,360 --> 00:13:56,280 Speaker 1: like to charter in vessels or is it like a 247 00:13:56,440 --> 00:13:58,080 Speaker 1: one year, five year or twenty year. 248 00:13:58,080 --> 00:13:59,440 Speaker 3: Like what do you Yes? 249 00:13:59,600 --> 00:14:02,760 Speaker 2: Typically, so if we have about one hundred vessels that 250 00:14:02,840 --> 00:14:05,440 Speaker 2: we lease or own. Then we have another three hundred 251 00:14:05,480 --> 00:14:08,680 Speaker 2: ships that we take in on on shorter term charters, 252 00:14:08,720 --> 00:14:11,400 Speaker 2: and here it can be anything from a couple of 253 00:14:11,480 --> 00:14:16,439 Speaker 2: weeks to a couple of years of charter, and again 254 00:14:16,480 --> 00:14:19,240 Speaker 2: this will depend on our market outlook. So we tend 255 00:14:19,280 --> 00:14:23,240 Speaker 2: to go for longer charters at times where we expect 256 00:14:23,240 --> 00:14:27,160 Speaker 2: markets to go up. We like to secure the capacity, 257 00:14:27,640 --> 00:14:31,120 Speaker 2: you know, before, before rates move up. And in weeker markets, 258 00:14:31,160 --> 00:14:33,760 Speaker 2: we actually tend to go out and book more cargoes first, 259 00:14:33,800 --> 00:14:36,600 Speaker 2: and then we chart the ships in the markets at 260 00:14:36,640 --> 00:14:40,359 Speaker 2: lower rates later and then benefit from from falling rates. 261 00:14:41,480 --> 00:14:44,000 Speaker 1: From what you said earlier, you said the market's kind 262 00:14:44,000 --> 00:14:46,720 Speaker 1: of flat. So is that what you guys are expecting 263 00:14:46,760 --> 00:14:49,160 Speaker 1: going forward. Are expecting the market to go up go 264 00:14:49,240 --> 00:14:51,280 Speaker 1: down in the months to come. 265 00:14:51,880 --> 00:14:55,160 Speaker 2: Yes, I think in the short term we I mean 266 00:14:55,240 --> 00:14:57,800 Speaker 2: we we do expect the second half of the year 267 00:14:57,920 --> 00:15:02,000 Speaker 2: you could could be a bit tougher and we have 268 00:15:02,120 --> 00:15:07,840 Speaker 2: positioned ourselves for that. What we do see though, in 269 00:15:07,880 --> 00:15:10,800 Speaker 2: the longer run, which is interesting is that when you 270 00:15:10,960 --> 00:15:16,320 Speaker 2: have you know, more disruptions, you know, and you have 271 00:15:16,960 --> 00:15:22,840 Speaker 2: we have the USTR potentially coming into effect in the 272 00:15:22,840 --> 00:15:26,920 Speaker 2: second half of the year, you have environmental regulations from 273 00:15:26,960 --> 00:15:31,200 Speaker 2: IMO potentially coming in in twenty twenty seven twenty twenty eight. 274 00:15:31,920 --> 00:15:35,880 Speaker 2: All these sort of points to again a more inefficient 275 00:15:36,200 --> 00:15:38,960 Speaker 2: utilization of the world fleet. And when you then couple 276 00:15:39,040 --> 00:15:43,240 Speaker 2: that with an aging global fleet as we look towards 277 00:15:43,320 --> 00:15:46,240 Speaker 2: twenty thirty and you look at a relatively small order book, 278 00:15:46,360 --> 00:15:48,720 Speaker 2: especially in dry ball where we have about ten percent 279 00:15:49,280 --> 00:15:52,920 Speaker 2: of ships on order, then the picture that is painting 280 00:15:53,720 --> 00:15:56,560 Speaker 2: as far as we see it today is that yes, 281 00:15:56,560 --> 00:16:00,440 Speaker 2: there might be some some short term headwinds in terms 282 00:16:00,480 --> 00:16:06,480 Speaker 2: of on the demand side, but longer term, we actually 283 00:16:06,480 --> 00:16:14,520 Speaker 2: see the supply side looking extremely favorable for the long run. 284 00:16:14,320 --> 00:16:16,720 Speaker 1: And that's on the dry box side, right, that's. 285 00:16:16,480 --> 00:16:17,400 Speaker 3: On the dry box side. 286 00:16:17,400 --> 00:16:21,040 Speaker 2: But it's a similar pattern on product tankers, except that 287 00:16:21,120 --> 00:16:24,840 Speaker 2: the auder book is a little bit larger on tankers, 288 00:16:24,840 --> 00:16:27,320 Speaker 2: so we have more tangers new buildings that are delivering 289 00:16:27,320 --> 00:16:30,680 Speaker 2: into the market over the next one or two years. 290 00:16:31,480 --> 00:16:32,960 Speaker 3: But here you have an even older fleet. 291 00:16:34,000 --> 00:16:36,320 Speaker 2: Because we've had good markets and tankers now for a 292 00:16:36,400 --> 00:16:38,720 Speaker 2: number of years, we have sort of a penned up 293 00:16:38,760 --> 00:16:43,560 Speaker 2: scrabbing potential of all these older vessels, and therefore you 294 00:16:43,640 --> 00:16:46,920 Speaker 2: have a sort of a rapidly aging tanker fleet also 295 00:16:47,000 --> 00:16:49,960 Speaker 2: when you look towards twenty thirty, and that means that 296 00:16:50,160 --> 00:16:54,120 Speaker 2: at least any headwinds that may come from the new 297 00:16:54,120 --> 00:16:57,080 Speaker 2: building deliveries in the coming years, you know, quite quickly 298 00:16:57,080 --> 00:17:03,840 Speaker 2: can be reset as olderships exiting the fleets. And and 299 00:17:03,920 --> 00:17:07,160 Speaker 2: what we are seeing both in dry bog and tankers 300 00:17:07,200 --> 00:17:10,160 Speaker 2: is that owners are pretty restraint from ordering new new 301 00:17:10,359 --> 00:17:11,159 Speaker 2: new tonnage. 302 00:17:11,720 --> 00:17:15,360 Speaker 3: We see shipyards full, we've. 303 00:17:15,160 --> 00:17:21,879 Speaker 2: Seen container lines considering continuing to order container vessels, and 304 00:17:21,880 --> 00:17:24,080 Speaker 2: and therefore, you know, the arts are pretty happy with 305 00:17:24,240 --> 00:17:27,320 Speaker 2: their order book and prices are quite high. 306 00:17:27,440 --> 00:17:30,560 Speaker 3: So despite the lower rates fish. 307 00:17:30,400 --> 00:17:34,080 Speaker 2: In dry bog, we we continue to see relatively high 308 00:17:34,119 --> 00:17:37,560 Speaker 2: a serprises and new building prices. And that makes new 309 00:17:37,600 --> 00:17:41,280 Speaker 2: investments in ships in dry bog and tankers for that matter, 310 00:17:41,840 --> 00:17:45,639 Speaker 2: much more difficult to justify, which is good, you know, 311 00:17:45,680 --> 00:17:48,159 Speaker 2: from a long term capacity perspective. 312 00:17:48,680 --> 00:17:51,639 Speaker 1: Sure, you know you mentioned earlier the second half might 313 00:17:51,640 --> 00:17:54,480 Speaker 1: be a little more challenging. What's driving that out look. 314 00:17:55,680 --> 00:18:01,000 Speaker 2: Well, we've seen we've seen volumes going down, we've seen 315 00:18:01,119 --> 00:18:07,040 Speaker 2: some headwinds on coal and and we've seen less congestion 316 00:18:07,200 --> 00:18:10,879 Speaker 2: in the fleet. It just sort of just indicates that 317 00:18:11,080 --> 00:18:14,800 Speaker 2: markets will you know, will not it's difficult to see 318 00:18:14,800 --> 00:18:19,199 Speaker 2: the trigger point from a demand perspective in in the 319 00:18:19,240 --> 00:18:21,840 Speaker 2: short term, so markets will continue to grow, but but 320 00:18:21,960 --> 00:18:26,159 Speaker 2: probably at a pretty low low pace. But all this, 321 00:18:26,320 --> 00:18:31,600 Speaker 2: of course is subject to any events happening, and and 322 00:18:31,600 --> 00:18:33,480 Speaker 2: and this is what we that that is what we 323 00:18:33,520 --> 00:18:36,720 Speaker 2: have seen in over the last few years, that that 324 00:18:37,400 --> 00:18:40,040 Speaker 2: you know, our markets become more event driven. 325 00:18:40,840 --> 00:18:41,320 Speaker 3: Uh. 326 00:18:41,440 --> 00:18:44,760 Speaker 2: And of course with a situation in the Middle East 327 00:18:44,760 --> 00:18:48,440 Speaker 2: at the moment that is still you know, unstable, and 328 00:18:48,560 --> 00:18:52,760 Speaker 2: you know, it is sort of a it does not 329 00:18:52,880 --> 00:18:55,879 Speaker 2: take a lot to to change some of these dynamics, 330 00:18:55,880 --> 00:18:58,720 Speaker 2: so that is something to to sort of stay stay 331 00:18:59,480 --> 00:19:00,000 Speaker 2: stay alone. 332 00:19:00,080 --> 00:19:00,240 Speaker 3: Two. 333 00:19:02,600 --> 00:19:06,960 Speaker 1: Absolutely, you know, we've talked about a lot of cyclicality 334 00:19:06,960 --> 00:19:09,400 Speaker 1: in the market. You know, your markets are also the seasonal. 335 00:19:09,480 --> 00:19:12,080 Speaker 1: Can you talk about the tanker and the drybill markets 336 00:19:12,280 --> 00:19:14,880 Speaker 1: kind of like broadly speaking the seasonality in them. 337 00:19:16,280 --> 00:19:19,880 Speaker 2: Yeah, So if we start in the dryball market, then 338 00:19:20,800 --> 00:19:23,760 Speaker 2: one of the big commodities is grain, and grain is 339 00:19:23,800 --> 00:19:31,840 Speaker 2: seasonal due to weather patterns, so typically that does tend 340 00:19:31,880 --> 00:19:36,480 Speaker 2: to support rates towards the end of the year and 341 00:19:36,480 --> 00:19:38,560 Speaker 2: and towards the end of the year is also usually 342 00:19:38,560 --> 00:19:40,840 Speaker 2: when we see a bit of a push on other commodities. 343 00:19:42,440 --> 00:19:46,960 Speaker 2: So it doesn't happen every year, but but but usually 344 00:19:47,040 --> 00:19:50,600 Speaker 2: we we could see sort of a bit of a 345 00:19:52,280 --> 00:19:56,399 Speaker 2: short term support towards the end of the year, but 346 00:19:56,440 --> 00:19:58,840 Speaker 2: then you have a conversion, you have a lower third quarter, 347 00:20:00,119 --> 00:20:03,040 Speaker 2: so that is you know, typically the pattern in in 348 00:20:03,240 --> 00:20:07,760 Speaker 2: dry book on on Tangas it tends to be evolved 349 00:20:07,760 --> 00:20:13,360 Speaker 2: more around the winter season. So typically now we are 350 00:20:13,640 --> 00:20:16,480 Speaker 2: coming into what is more of a quire period for 351 00:20:16,480 --> 00:20:20,560 Speaker 2: for the tanker markets. But again I think with all 352 00:20:20,600 --> 00:20:22,720 Speaker 2: the unrest that is going on at the moment, you know, 353 00:20:22,880 --> 00:20:27,000 Speaker 2: normal normal seasonality is something that probably weighs a bit 354 00:20:27,080 --> 00:20:31,840 Speaker 2: less at the moment than that it has done traditionally. 355 00:20:32,000 --> 00:20:35,480 Speaker 1: Right and in other other typical trading lanes in the 356 00:20:35,480 --> 00:20:37,440 Speaker 1: product tanker market, I. 357 00:20:37,320 --> 00:20:42,639 Speaker 2: Mean usually it's the the winter season in the northern 358 00:20:42,680 --> 00:20:47,040 Speaker 2: hemisphere that is driving driving demand. Uh, and then you 359 00:20:47,119 --> 00:20:51,440 Speaker 2: also have the US driving season for the summer holidays. 360 00:20:51,520 --> 00:20:53,680 Speaker 2: So these are some of the the sort of more 361 00:20:53,760 --> 00:20:56,560 Speaker 2: trade specific or country specific demand. 362 00:20:56,280 --> 00:20:58,000 Speaker 3: Drivers that that that we see. 363 00:20:59,480 --> 00:21:03,040 Speaker 2: But again it is less pronounced at times where you 364 00:21:03,160 --> 00:21:06,680 Speaker 2: have sort of a big world events because then then 365 00:21:06,880 --> 00:21:09,040 Speaker 2: you have other things that are driving the market than 366 00:21:09,080 --> 00:21:10,520 Speaker 2: the traditional demand patterants. 367 00:21:11,880 --> 00:21:13,119 Speaker 3: You know, you mentioned a. 368 00:21:13,119 --> 00:21:16,959 Speaker 1: Couple of times, you know, the US Trade Representative fees 369 00:21:17,840 --> 00:21:21,200 Speaker 1: that that might go into effect later this year, assuming 370 00:21:21,240 --> 00:21:25,000 Speaker 1: they do, how will that impact your fleet? And that's 371 00:21:25,080 --> 00:21:29,320 Speaker 1: going to be fees imposed on Chinese ships coming to 372 00:21:29,359 --> 00:21:29,879 Speaker 1: the US. 373 00:21:31,160 --> 00:21:34,000 Speaker 2: Yeah, so this this is the ships that are owned, 374 00:21:34,680 --> 00:21:37,560 Speaker 2: So in our segments, it's predominantly ships that are owned 375 00:21:38,480 --> 00:21:39,880 Speaker 2: by Chinese interests. 376 00:21:41,520 --> 00:21:44,280 Speaker 3: And our fleet. 377 00:21:45,520 --> 00:21:49,399 Speaker 2: Composition today is it's just such that most of the 378 00:21:49,440 --> 00:21:52,560 Speaker 2: ships of the hundred ships that we consider our core fleet, 379 00:21:52,720 --> 00:21:54,879 Speaker 2: so the ships that we lease and owned. Then obviously 380 00:21:54,920 --> 00:21:58,239 Speaker 2: the owned ships are not an issue. They're owned by 381 00:21:58,520 --> 00:22:04,000 Speaker 2: by by Norton as a Danish headquartered company. The ships 382 00:22:04,000 --> 00:22:08,200 Speaker 2: that we lease are almost all of them owned by 383 00:22:08,440 --> 00:22:11,840 Speaker 2: Japanese owners because this is where we traditionally have done 384 00:22:11,880 --> 00:22:16,280 Speaker 2: our leasing deals. So again not something that is directly 385 00:22:16,320 --> 00:22:22,320 Speaker 2: impact impacting us. And then the rest of the fleet 386 00:22:22,440 --> 00:22:24,200 Speaker 2: are ships that we chart in the market, so here 387 00:22:24,240 --> 00:22:29,080 Speaker 2: we can more easily adapt to the USGR regulation, So 388 00:22:29,119 --> 00:22:32,120 Speaker 2: we don't actually expect much impact on our business directly, 389 00:22:33,800 --> 00:22:37,600 Speaker 2: but of course depending on the numbers, and this is 390 00:22:37,640 --> 00:22:42,639 Speaker 2: not sort of always easy to measure, but if up 391 00:22:42,680 --> 00:22:45,680 Speaker 2: to around maybe twenty percent of the dry bot fleet 392 00:22:45,840 --> 00:22:51,640 Speaker 2: is owned by Chinese owners, then clearly this will have 393 00:22:51,680 --> 00:22:54,080 Speaker 2: some impact on the markets. There will be a chunk 394 00:22:54,160 --> 00:22:56,920 Speaker 2: of the world fleet that effectually will not be trading 395 00:22:57,000 --> 00:23:00,000 Speaker 2: to the US. And it's part of this picture was 396 00:23:00,119 --> 00:23:02,879 Speaker 2: explaining earlier of you know, the world fleet is becoming 397 00:23:03,040 --> 00:23:07,119 Speaker 2: less efficient because those ships will stay away from the 398 00:23:07,280 --> 00:23:10,320 Speaker 2: US markets. They will probably also stay away from adjacent 399 00:23:10,359 --> 00:23:14,439 Speaker 2: markets because there's not much fun in having ships, you know, 400 00:23:14,520 --> 00:23:16,800 Speaker 2: close to the US if you cannot trade to the US. 401 00:23:18,080 --> 00:23:20,800 Speaker 2: And those ships will therefore be trading maybe more in 402 00:23:20,960 --> 00:23:25,640 Speaker 2: traditional sort of intra Asia trades, but those ships will 403 00:23:25,680 --> 00:23:30,760 Speaker 2: have less flexibility and and that means again that the 404 00:23:31,200 --> 00:23:34,359 Speaker 2: utilization of the fleet will become less efficient, so you 405 00:23:34,440 --> 00:23:37,240 Speaker 2: may have to balance longer to get you a desired 406 00:23:37,440 --> 00:23:39,960 Speaker 2: business if you're trying to stay away from certain areas. 407 00:23:41,600 --> 00:23:44,920 Speaker 1: I'm sorry, so you know you mentioned whether they're owned 408 00:23:44,960 --> 00:23:48,000 Speaker 1: by a Chinese energy, but it's also if they're if 409 00:23:48,000 --> 00:23:50,320 Speaker 1: they're manufactured in China, correct or. 410 00:23:51,200 --> 00:23:55,040 Speaker 2: Yeah, Well that that doesn't actually impact the the trades 411 00:23:55,240 --> 00:23:57,520 Speaker 2: that that we are in because this is mainly for 412 00:23:57,560 --> 00:24:03,920 Speaker 2: the larger vessels, and if you take our largest vessels 413 00:24:03,960 --> 00:24:07,119 Speaker 2: in the cape size segment, those ships rarely go to 414 00:24:07,200 --> 00:24:07,640 Speaker 2: the US. 415 00:24:08,600 --> 00:24:10,080 Speaker 3: Okay. Ships are mainly. 416 00:24:10,119 --> 00:24:15,000 Speaker 2: Used for trades between Africa and South America and back 417 00:24:15,040 --> 00:24:20,159 Speaker 2: to Asia, so the impact there is relatively small. And 418 00:24:20,200 --> 00:24:22,840 Speaker 2: then also in our trades in the dry boat trades, 419 00:24:22,920 --> 00:24:27,719 Speaker 2: we tend to pick up cargo loading in the US, 420 00:24:27,840 --> 00:24:32,280 Speaker 2: so all the grain exports for example, and again those 421 00:24:32,320 --> 00:24:35,520 Speaker 2: traits are exempted as things don today. 422 00:24:36,400 --> 00:24:42,200 Speaker 1: Gotcha, okay, And you also mentioned earlier other regulatory issues 423 00:24:42,560 --> 00:24:46,000 Speaker 1: like emissions from the IMO. Can you talk about how 424 00:24:46,560 --> 00:24:49,879 Speaker 1: Norton is dealing with that and how you're planning to 425 00:24:49,920 --> 00:24:54,040 Speaker 1: comply with that and you know where you think, you know, 426 00:24:54,600 --> 00:24:56,960 Speaker 1: the industry is going from a fuel standpoint. 427 00:24:57,520 --> 00:25:01,240 Speaker 2: Yeah, so we have in in Norton, we have actually 428 00:25:01,240 --> 00:25:06,000 Speaker 2: been pioneering on biofuels. I think we did the first 429 00:25:06,720 --> 00:25:10,240 Speaker 2: we were the first company to do a you know, 430 00:25:10,320 --> 00:25:15,359 Speaker 2: have a voyage that was entire fueled by biofuel and 431 00:25:15,359 --> 00:25:19,320 Speaker 2: and and since that eighteen we've been trialing various biofuel 432 00:25:19,359 --> 00:25:23,560 Speaker 2: types on our vessels. So so this is definitely one 433 00:25:23,600 --> 00:25:27,600 Speaker 2: area that we are we are looking at and looking 434 00:25:27,600 --> 00:25:34,040 Speaker 2: to do more of. We we like biofuel because it 435 00:25:34,080 --> 00:25:37,760 Speaker 2: can be used on existing vessels and in our industry, 436 00:25:37,800 --> 00:25:40,800 Speaker 2: of course, you've had you know, many many industry discussions 437 00:25:40,800 --> 00:25:44,480 Speaker 2: about is it methanol, is it ammonia, is it something else? 438 00:25:45,160 --> 00:25:48,080 Speaker 2: And and I think the fact is that it is 439 00:25:48,080 --> 00:25:51,080 Speaker 2: still you know, relatively early days. We don't know which 440 00:25:51,119 --> 00:25:55,879 Speaker 2: fuel will be available, we don't know what cost it 441 00:25:55,920 --> 00:26:02,080 Speaker 2: will be available at, and and and therefore we like 442 00:26:02,440 --> 00:26:07,880 Speaker 2: the buy fuel option because it's also besides not having 443 00:26:07,920 --> 00:26:10,879 Speaker 2: to build a new fleet, it's also the cheapest alternative 444 00:26:12,680 --> 00:26:16,440 Speaker 2: to the traditional bunker fuels that we're using today. And 445 00:26:16,520 --> 00:26:19,960 Speaker 2: we are gradually seeing customers showing a bit more interest 446 00:26:20,720 --> 00:26:22,480 Speaker 2: in this space as well. 447 00:26:23,080 --> 00:26:25,440 Speaker 1: And do you think getting to zero is a reality 448 00:26:25,600 --> 00:26:29,480 Speaker 1: or is it more aspirational in terms of admissions. 449 00:26:29,520 --> 00:26:34,679 Speaker 2: Well, it's a long term aspiration. It's a target, you know, 450 00:26:34,760 --> 00:26:38,280 Speaker 2: in twenty to fifty. I think it's not going to 451 00:26:38,359 --> 00:26:42,240 Speaker 2: happen around the corner, just around the corner. So I 452 00:26:42,240 --> 00:26:45,800 Speaker 2: think actually the as an industry, we are moving ahead 453 00:26:46,800 --> 00:26:52,520 Speaker 2: and I think it is possible, you know, but it 454 00:26:52,560 --> 00:26:55,639 Speaker 2: will take some time. And I think we have a 455 00:26:55,680 --> 00:26:59,520 Speaker 2: habit sometimes in the shipping industry of just talking like 456 00:26:59,600 --> 00:27:02,520 Speaker 2: one industry. But the fact is that we have many, 457 00:27:02,560 --> 00:27:06,439 Speaker 2: many different ship types in the industry, and some ships 458 00:27:06,440 --> 00:27:09,760 Speaker 2: are trading in what we call tramp shipping, which is 459 00:27:09,760 --> 00:27:12,160 Speaker 2: like tax is running around, you know, going where our 460 00:27:12,200 --> 00:27:14,639 Speaker 2: customers have at a month. And then you have the 461 00:27:14,640 --> 00:27:18,560 Speaker 2: container ships that are going on like bus bus services 462 00:27:18,600 --> 00:27:20,879 Speaker 2: on liner routes where you can predict where the ships 463 00:27:20,880 --> 00:27:24,400 Speaker 2: are and there it's a bit easier to build new 464 00:27:24,480 --> 00:27:30,240 Speaker 2: supply chains for alternative fuels. So, you know, I think 465 00:27:30,240 --> 00:27:33,000 Speaker 2: it will be at different speeds that the industry will adopt. 466 00:27:34,359 --> 00:27:38,040 Speaker 2: And we see this pattern already where container lines, you know, 467 00:27:38,119 --> 00:27:43,600 Speaker 2: there are now ordering ships that are dual fuel. But 468 00:27:43,720 --> 00:27:47,120 Speaker 2: even there I see different You know, a few years 469 00:27:47,160 --> 00:27:49,159 Speaker 2: ago it was sort of methanol that that was the 470 00:27:49,200 --> 00:27:54,119 Speaker 2: go to fuel. Then it's l G, and then more 471 00:27:54,160 --> 00:27:56,600 Speaker 2: people are now talking about ammonia. So I think the 472 00:27:56,640 --> 00:27:58,959 Speaker 2: fact is that we still do not know and and 473 00:27:59,000 --> 00:28:01,760 Speaker 2: that's why for us, at least in the short to 474 00:28:01,960 --> 00:28:06,520 Speaker 2: medium term, bio fuel just seems like a better option 475 00:28:06,760 --> 00:28:11,679 Speaker 2: because we can go to what zero emissions with biofuel 476 00:28:12,000 --> 00:28:16,000 Speaker 2: until we have more clarity and until we have supply 477 00:28:16,119 --> 00:28:20,000 Speaker 2: chains and fuel alternative fuels that are available, and then 478 00:28:20,040 --> 00:28:23,680 Speaker 2: we can start investing in new ship types at at 479 00:28:23,720 --> 00:28:24,840 Speaker 2: that point. 480 00:28:24,920 --> 00:28:30,120 Speaker 1: Yeah great, you know you are there any other regulatory 481 00:28:30,119 --> 00:28:33,160 Speaker 1: issues that's kind of on your radar that that could 482 00:28:33,240 --> 00:28:35,200 Speaker 1: impact the industry in order? 483 00:28:35,240 --> 00:28:39,000 Speaker 2: More specifically, I think emissions that that is the big one, 484 00:28:40,240 --> 00:28:43,560 Speaker 2: and it's the big one because it happens at a 485 00:28:43,600 --> 00:28:48,440 Speaker 2: time where the global fleet is aging, and that would 486 00:28:48,520 --> 00:28:52,240 Speaker 2: mean that there will be additional pressure on the older, 487 00:28:52,320 --> 00:28:54,880 Speaker 2: less efficient vessels at a time where there are a 488 00:28:54,920 --> 00:28:59,040 Speaker 2: lot of them that are aging. And that's why when 489 00:28:59,080 --> 00:29:02,800 Speaker 2: we look longer term, I think there is a picture 490 00:29:02,960 --> 00:29:06,960 Speaker 2: evolving of just not having enough ships in the global fleet, 491 00:29:07,720 --> 00:29:10,400 Speaker 2: you know, in in in trades that are growing. 492 00:29:12,000 --> 00:29:14,400 Speaker 3: Even even even. 493 00:29:14,200 --> 00:29:18,960 Speaker 2: If if a globalization is having sort of some hit winds, 494 00:29:19,400 --> 00:29:22,400 Speaker 2: the fact is that the global trade continues to grow 495 00:29:23,160 --> 00:29:28,080 Speaker 2: and therefore more ships are needed and and and therefore 496 00:29:28,360 --> 00:29:32,120 Speaker 2: you know there will be a need to build more 497 00:29:32,160 --> 00:29:35,800 Speaker 2: ships to replace all these older vessels eventually. 498 00:29:37,360 --> 00:29:37,560 Speaker 3: Yeah. 499 00:29:37,640 --> 00:29:39,880 Speaker 1: Yeah, And so just taking a couple of steps back 500 00:29:39,920 --> 00:29:43,520 Speaker 1: about Nordon, So, so who are your customers or your customers, 501 00:29:44,560 --> 00:29:49,560 Speaker 1: the exporters, the importers, How do you guys generate business 502 00:29:49,600 --> 00:29:51,600 Speaker 1: do you have your own salesforce or is it mostly 503 00:29:51,640 --> 00:29:55,240 Speaker 1: brokers kind of working with you to secure. 504 00:29:54,880 --> 00:29:56,520 Speaker 3: Capacity for other people. Yes. 505 00:29:56,600 --> 00:30:02,719 Speaker 2: So our customers are mining companies, trading houses, grain companies, 506 00:30:03,000 --> 00:30:08,480 Speaker 2: energy companies, oil majors. It's it's a broad range of 507 00:30:08,840 --> 00:30:13,440 Speaker 2: different types of customers. We have carried one hundred and 508 00:30:13,520 --> 00:30:16,680 Speaker 2: forty million tons of cargo over the last over the 509 00:30:16,760 --> 00:30:23,000 Speaker 2: last twelve months, so so it's a very fragmented customer base. 510 00:30:23,360 --> 00:30:27,200 Speaker 2: And you know they are based everywhere in the world. 511 00:30:27,240 --> 00:30:31,600 Speaker 2: We have a global office network of nineteen offices that 512 00:30:31,680 --> 00:30:34,479 Speaker 2: are located around the world. We are present on all 513 00:30:34,600 --> 00:30:39,600 Speaker 2: continents except for Antarctica. But we we we so so 514 00:30:39,680 --> 00:30:42,000 Speaker 2: we have saled you know what you can say, salespeople 515 00:30:42,120 --> 00:30:47,200 Speaker 2: or chartering people in close to our customers in all 516 00:30:47,240 --> 00:30:49,000 Speaker 2: these important markets around the world. 517 00:30:49,920 --> 00:30:50,520 Speaker 3: Uh. 518 00:30:50,560 --> 00:30:54,960 Speaker 2: And and you know, like like I mentioned earlier, we 519 00:30:55,040 --> 00:31:00,120 Speaker 2: are carrying anything from windmill blades for the windmill companies too, 520 00:31:00,680 --> 00:31:05,720 Speaker 2: you know, large sized box side shipments into the aluminium industry, 521 00:31:07,800 --> 00:31:11,800 Speaker 2: grain cargos, cement cargo's, forestry. 522 00:31:13,000 --> 00:31:13,880 Speaker 3: Cargoes as well. 523 00:31:13,920 --> 00:31:17,680 Speaker 2: So, so a very broad variety of anything that is 524 00:31:17,720 --> 00:31:20,000 Speaker 2: sort of a bulk cargo, anything that you do not 525 00:31:20,080 --> 00:31:21,920 Speaker 2: put into a container mm hm. 526 00:31:22,920 --> 00:31:23,800 Speaker 3: And can you talk about. 527 00:31:23,680 --> 00:31:26,520 Speaker 1: Neuron's capital allocation policy, like what what do you guys 528 00:31:26,600 --> 00:31:29,640 Speaker 1: focus on? Is it the buybacks, it's dividends. 529 00:31:30,160 --> 00:31:35,400 Speaker 2: We can talk about that with a feat of foreigner vessels, 530 00:31:35,440 --> 00:31:39,240 Speaker 2: but predominantly ships that each other and even the least 531 00:31:39,320 --> 00:31:44,920 Speaker 2: vessels don't really require any capex. We we we on 532 00:31:45,000 --> 00:31:50,600 Speaker 2: acid light business and we do also investments ships, so 533 00:31:50,640 --> 00:31:53,360 Speaker 2: it's not like we are we are not ship a 534 00:31:53,440 --> 00:31:55,960 Speaker 2: ship owner, but it tends to be more linked to 535 00:31:56,160 --> 00:31:58,640 Speaker 2: our views on the market and whether we see any 536 00:31:58,720 --> 00:32:02,320 Speaker 2: upside of actually also owning owning the assets because we 537 00:32:02,320 --> 00:32:05,120 Speaker 2: don't need to own the ships to service our customers. 538 00:32:05,120 --> 00:32:05,440 Speaker 3: We do. 539 00:32:05,680 --> 00:32:07,800 Speaker 2: We do that on on on the ships that we charter. 540 00:32:09,920 --> 00:32:10,560 Speaker 3: In terms of. 541 00:32:10,840 --> 00:32:16,479 Speaker 2: Allocation, we have a policy of distributing minimum fifty of 542 00:32:16,520 --> 00:32:20,720 Speaker 2: our profits back to our shareholders. And we have two 543 00:32:20,760 --> 00:32:24,000 Speaker 2: avenues of doing that. One is through dividends and the 544 00:32:24,080 --> 00:32:28,080 Speaker 2: other one is through share buybacks, and we are using 545 00:32:28,120 --> 00:32:32,520 Speaker 2: both of those at the moment. And and we've returned 546 00:32:34,600 --> 00:32:36,960 Speaker 2: given our large profits we've had over the last of 547 00:32:36,960 --> 00:32:42,160 Speaker 2: the five years we have we've returned you know, a 548 00:32:42,160 --> 00:32:44,520 Speaker 2: lot of a lot of our profits to our shareholders. 549 00:32:44,760 --> 00:32:46,680 Speaker 1: And when you look at the growth fleet, where the 550 00:32:46,680 --> 00:32:49,360 Speaker 1: fleet of the growth Excuse me, is it more on 551 00:32:49,440 --> 00:32:53,400 Speaker 1: that project break bulk fleet that you're planning on growing 552 00:32:53,720 --> 00:32:56,320 Speaker 1: or is it the product side or the dry box 553 00:32:56,320 --> 00:32:58,760 Speaker 1: side where you see the growth in terms of your fleet. 554 00:32:59,200 --> 00:33:03,800 Speaker 2: Yes, So lately we've expanded into two new areas of 555 00:33:03,840 --> 00:33:07,040 Speaker 2: our business. So we've moved into cape size, the largest 556 00:33:07,240 --> 00:33:10,200 Speaker 2: dry boat vessels. So over the last couple of years 557 00:33:10,240 --> 00:33:14,320 Speaker 2: we have been investing into cape size new buildings, also 558 00:33:14,400 --> 00:33:17,840 Speaker 2: invested into more leased cape sized vessels, so we've been 559 00:33:17,920 --> 00:33:19,920 Speaker 2: building up more of a core fleet in that segment. 560 00:33:21,400 --> 00:33:23,320 Speaker 2: And then at the other end of the spectrum in 561 00:33:23,400 --> 00:33:26,760 Speaker 2: terms of size, we are also building a core fleet of. 562 00:33:28,400 --> 00:33:29,520 Speaker 3: Multi purpose vessels. 563 00:33:29,760 --> 00:33:32,280 Speaker 2: These are the vessels that are carrying a project cargo 564 00:33:32,360 --> 00:33:35,840 Speaker 2: and brake board cargoes, more versatile ships that. 565 00:33:37,200 --> 00:33:38,960 Speaker 3: Some of the smaller vessels in our fleet. 566 00:33:40,880 --> 00:33:43,400 Speaker 2: So we've really been focusing on building our product range 567 00:33:43,440 --> 00:33:45,960 Speaker 2: to our clients so that we can service our customers 568 00:33:45,960 --> 00:33:48,080 Speaker 2: on anything from smaller parcels and. 569 00:33:48,120 --> 00:33:51,440 Speaker 3: All the way up to large dryboll shipments. 570 00:33:51,880 --> 00:33:54,400 Speaker 1: And you know, so you've you've been in shipping for 571 00:33:54,480 --> 00:33:57,880 Speaker 1: quite some time. How did you initially get into the industry. 572 00:33:58,400 --> 00:34:01,719 Speaker 2: Yeah, so I've actually worked in shipping my entire career. 573 00:34:01,960 --> 00:34:07,160 Speaker 2: So I joined the industry over thirty years ago. I 574 00:34:07,200 --> 00:34:13,520 Speaker 2: started as a shipping trainee here in Copenhagen, uh and 575 00:34:13,520 --> 00:34:13,960 Speaker 2: and And. 576 00:34:14,000 --> 00:34:15,120 Speaker 3: One of the one of. 577 00:34:15,080 --> 00:34:21,360 Speaker 2: The drivers for me to to getting intershipping was, you know, 578 00:34:21,400 --> 00:34:23,120 Speaker 2: to work sort of in the in the heart of 579 00:34:23,120 --> 00:34:26,040 Speaker 2: of of global trade uh and and to have an 580 00:34:26,080 --> 00:34:29,480 Speaker 2: international career. And I'm fortunate to have had the opportunity 581 00:34:29,560 --> 00:34:33,800 Speaker 2: to live many years in in Asia. I've also lived 582 00:34:33,920 --> 00:34:38,480 Speaker 2: in North America, in the US and obviously here in Europe. 583 00:34:38,560 --> 00:34:43,440 Speaker 2: So it's been you know, it's a great industry to 584 00:34:43,640 --> 00:34:45,400 Speaker 2: sort of connect with other parts of the world, and 585 00:34:45,400 --> 00:34:48,520 Speaker 2: I should travel and meet people from from all over 586 00:34:48,560 --> 00:34:48,920 Speaker 2: the world. 587 00:34:49,920 --> 00:34:53,000 Speaker 1: Copenhagen is one of my one of my favorite favorite cities. 588 00:34:53,280 --> 00:34:55,800 Speaker 1: You know, is is there anything you know, as a 589 00:34:55,880 --> 00:34:58,840 Speaker 1: leader of a large transportation company that keeps you up 590 00:34:58,880 --> 00:34:59,160 Speaker 1: at night? 591 00:34:59,719 --> 00:35:02,160 Speaker 2: You know, so I take I take a lot of 592 00:35:02,160 --> 00:35:05,719 Speaker 2: comfort in Norden's history. We have, you know, with more 593 00:35:05,719 --> 00:35:09,600 Speaker 2: than one hundred and fifty years in in in in 594 00:35:09,600 --> 00:35:12,920 Speaker 2: in the industry. You know, this company has seen you know, 595 00:35:13,000 --> 00:35:17,520 Speaker 2: its share of upturns and downturns and world wars and 596 00:35:17,520 --> 00:35:22,080 Speaker 2: and and all that so so so, so you know, 597 00:35:22,320 --> 00:35:23,919 Speaker 2: I'm not really shaken. 598 00:35:25,920 --> 00:35:29,120 Speaker 3: Or disturbed at night. You know with what what what? 599 00:35:29,400 --> 00:35:30,160 Speaker 3: With everything? 600 00:35:30,239 --> 00:35:32,560 Speaker 2: You know that that all the moving parts, you can 601 00:35:32,600 --> 00:35:34,840 Speaker 2: say that that that we have in driving a business 602 00:35:35,480 --> 00:35:39,440 Speaker 2: of of this science. What is important to me is 603 00:35:39,480 --> 00:35:46,040 Speaker 2: that we service our customers. We provide a reliable service 604 00:35:46,080 --> 00:35:48,600 Speaker 2: to them. They can count on us. This is one 605 00:35:48,600 --> 00:35:50,879 Speaker 2: of the things that stand out in our very long 606 00:35:51,000 --> 00:35:54,960 Speaker 2: history is that we've always honored all our commitments. This 607 00:35:55,080 --> 00:35:56,920 Speaker 2: is also why we are able to do these vacing 608 00:35:57,000 --> 00:36:00,920 Speaker 2: deals with our Japanese partners, because they trust and know 609 00:36:01,040 --> 00:36:03,040 Speaker 2: that Norton will perform no matter. 610 00:36:04,440 --> 00:36:07,279 Speaker 3: Where we are in the market cycle. Uh and in 611 00:36:07,320 --> 00:36:07,840 Speaker 3: a very. 612 00:36:07,719 --> 00:36:11,879 Speaker 2: Volatile industry with very high highs and and and very 613 00:36:11,920 --> 00:36:17,040 Speaker 2: low lows. The the ability to trust that Norton is 614 00:36:17,080 --> 00:36:21,480 Speaker 2: there to perform is something that that is very important 615 00:36:21,520 --> 00:36:25,319 Speaker 2: to them and very important to to us as a company. 616 00:36:25,960 --> 00:36:28,280 Speaker 1: Okay, yeah, And I like to ask all my guests 617 00:36:28,320 --> 00:36:30,960 Speaker 1: is is there a book on leadership or the transportation 618 00:36:31,040 --> 00:36:33,400 Speaker 1: industry that close to your heart do you like to recommend? 619 00:36:34,600 --> 00:36:37,760 Speaker 2: Well, then if I can choose two books because I remember, 620 00:36:38,239 --> 00:36:40,360 Speaker 2: you know, some time ago now I read. 621 00:36:40,160 --> 00:36:40,879 Speaker 3: A book. 622 00:36:43,200 --> 00:36:45,960 Speaker 2: Good to Great, which is an old sort of I 623 00:36:45,960 --> 00:36:48,879 Speaker 2: think it's it must be twenty five years old now, 624 00:36:49,600 --> 00:36:52,080 Speaker 2: but it's really about how you build sort of excellence 625 00:36:52,080 --> 00:36:54,720 Speaker 2: in a business, you know, how you how you build 626 00:36:55,400 --> 00:36:59,560 Speaker 2: enduring sort of greatness. And the book also talks about 627 00:37:00,239 --> 00:37:04,040 Speaker 2: levels of leadership and and how you you know, they 628 00:37:04,120 --> 00:37:06,480 Speaker 2: talk about this sort of level five leadership that I 629 00:37:06,480 --> 00:37:09,960 Speaker 2: think is quite inspiring, you know, about how how you 630 00:37:10,000 --> 00:37:14,000 Speaker 2: have this sort of mixture of you know, personal humility 631 00:37:14,280 --> 00:37:17,600 Speaker 2: in in in as a leader, but also. 632 00:37:17,360 --> 00:37:18,160 Speaker 3: Have this sort of. 633 00:37:19,680 --> 00:37:25,319 Speaker 2: Strong will to to to succeed, not for yourself, and 634 00:37:25,360 --> 00:37:27,280 Speaker 2: that's I think that's the important part of this book, 635 00:37:27,600 --> 00:37:30,560 Speaker 2: but but actually built you know, for the cause, you know, 636 00:37:30,680 --> 00:37:34,960 Speaker 2: so so in orderly work will our purpose of enabling 637 00:37:34,960 --> 00:37:39,000 Speaker 2: smart global trade. Uh and and that is the cause 638 00:37:39,080 --> 00:37:41,640 Speaker 2: and and and the will to drive that course and 639 00:37:41,960 --> 00:37:46,360 Speaker 2: our purpose is something that that is very important to me. 640 00:37:46,640 --> 00:37:49,280 Speaker 2: And and in that context I think this book actually 641 00:37:49,320 --> 00:37:53,400 Speaker 2: is is was was a great inspiration for me. The 642 00:37:53,480 --> 00:37:57,520 Speaker 2: other book I also think for me personally that has 643 00:37:57,520 --> 00:38:00,360 Speaker 2: been important was a book that was actually written about 644 00:38:00,400 --> 00:38:03,359 Speaker 2: Norton in connection with our one hundred and fiftieth anniversary, 645 00:38:03,920 --> 00:38:08,440 Speaker 2: called The Norton Voyage because it takes us back in history. 646 00:38:08,440 --> 00:38:12,000 Speaker 2: It explains how Norton was formed. You know, Norton back 647 00:38:12,080 --> 00:38:15,120 Speaker 2: in eighteen hundred and seventy one was actually formed on 648 00:38:15,160 --> 00:38:18,600 Speaker 2: the back of two new technologies, you know, steamships and 649 00:38:19,000 --> 00:38:23,520 Speaker 2: telegraph So the ability to communicate and to be at 650 00:38:23,560 --> 00:38:27,839 Speaker 2: the forefront of both technology and propulsion, I think is 651 00:38:28,000 --> 00:38:31,400 Speaker 2: that are some direct links to some of the dilemmas 652 00:38:31,000 --> 00:38:33,480 Speaker 2: and opportunities. 653 00:38:32,719 --> 00:38:35,520 Speaker 3: That we're looking at today in Norton. 654 00:38:35,600 --> 00:38:38,360 Speaker 2: So actually, I think that book is quite quite inspiring 655 00:38:38,360 --> 00:38:39,120 Speaker 2: to read as well. 656 00:38:39,680 --> 00:38:42,920 Speaker 1: We'll have to take a look at THEI the Nordon 657 00:38:43,320 --> 00:38:46,640 Speaker 1: Voyage book when I get a chance. Well, yeahn I 658 00:38:46,719 --> 00:38:48,080 Speaker 1: really want to thank you for your time and your 659 00:38:48,080 --> 00:38:48,920 Speaker 1: insights today. 660 00:38:49,360 --> 00:38:50,040 Speaker 3: This was great. 661 00:38:50,320 --> 00:38:53,120 Speaker 1: Yeah, thank you very much, and I want to thank 662 00:38:53,160 --> 00:38:55,080 Speaker 1: you for tuning in. If you liked the episode, please 663 00:38:55,120 --> 00:38:57,759 Speaker 1: subscribe and leave review. We fined up a number of 664 00:38:57,800 --> 00:39:00,120 Speaker 1: great guests for the podcast, so please check back to 665 00:39:00,120 --> 00:39:04,440 Speaker 1: hear conversations with C suite executives, shippers, regulators, and decision 666 00:39:04,480 --> 00:39:07,200 Speaker 1: makers within the freight markets. Also, if you want To 667 00:39:07,280 --> 00:39:10,239 Speaker 1: learn more about the freight transportation markets, check out our 668 00:39:10,280 --> 00:39:13,560 Speaker 1: work on the Bloomberg Terminal at Bigo and on social media. 669 00:39:13,880 --> 00:39:16,320 Speaker 1: This is Lee Clasgow signing off and thanks for talking 670 00:39:16,360 --> 00:39:17,160 Speaker 1: transports with me.