How do chartering and the brokering of vessels fit into OSC's strategy?
OSC is the holding company that owns the vessels. The vessels, in most cases, are chartered to Oman Charter Company, which handles chartering activities on behalf of Oman Shipping. In the past, all of our vessels had long-term charters that did not require as much commercial intervention; however, once we shifted our VLCCs in house, we developed the chartering desk where chartering and commercial operations are carried out by Oman Charter Company. This change increased our activity by 15 vessels, so they are busy trying to identify and find cargo to transport. Moving forward, we are discussing our strategy with shareholders regarding how Oman Shipping will move forward. We will probably copy a lot of what has been done in the VLCC segment with in-house chartering, by replicating it on the bulk side, increasing our exposure to the bulk, and also moving into refined products. In addition, we have another subsidiary by the name of Oman Container Line that provides container feeder services. It currently has liner services and we are studying the possibility of expanding into other liner services that will complement these services and provide Omani ports with better connectivity.
How does ASYAD's portfolio complement OSC's business?
ASYAD has different portfolios of companies under its umbrella. Asyad's primary goal is enhancing logistics within Oman. The part where both companies can cooperate and where we can find the most synergies is enhancing container connectivity to Omani ports. Together with ASYAD, we are hoping to make Omani ports more attractive by providing them with better connectivity to the region by developing new liner services through our subsidiary Oman Container Line.
How much growth have you seen in container shipments and how much of that is related to transshipments?
We have generated more container flow on the back of a growing economy. Being an Omani company with better insights into what is happening in the country, we were able to capture that growth and provide our customers with an appropriate solution at a competitive rate. As a result, we have been capturing more market share because of our steady performance and reliability. Since we have increased our market share, we need to strategize how to add more value to the customers, such as integrating shipping with land-based transportation. At present, we are in the business of selling our slots (space) on board our vessels; our next step is to provide our customers a means to transport their goods on board our container boxes from their point of origin to their final destination.
How predictable are the shipments of LNG and crude oil, especially considering the long-term contracts that define the sector?
For LNG, contracts that were made prior to 2005 were quite straight forward as they were usually attached to a long-term contract of about 20 years to transport a specific cargo for a specific client. Our LNG vessels would lift cargo from a defined loading terminal to a defined discharge terminal, operating essentially like a floating pipeline. However, since then we have seen the LNG market moving more into the spot market. Vessels are no longer tied to a specific trade as before but move depending where the market moves. There are still possibilities to get a long-term charter, but modern long-term charters are more like five to 10 years.