APPENDIX I Letter to the Committee from R.W. Porter
LONDON TANKER BROKERS' PANEL LIMITED
R.W. Porter (Managing)
Prince Rupert House 64 Queen Street LONDON EC4R 1AD Telephone: 0171-248 4747 Telex: 885118 G Fax: 0171-489 0536
25th April 1996
Our Ref: RWP/EAL
Your Ref: MB-96-528
Mr. D. Wolcott
Chair, Committee on OPA 90 (Sn 4115)
National Research Council
2101 Constitution Avenue Washington D.C. 20418
Dear Mr. Wolcott
We thank you for your letter to Mr. Eric Shawyer, Chairman of the London Tanker Brokers' Panel Limited of 5th April 1996 regarding evaluating various aspects of the international tanker market. Your letter has been distributed to all Members of the LTBP and discussed at length at a recent meeting of the LTBP. The Panel Members have asked me to reply on their behalf.
The research required to attempt to evaluate any variations in the world tanker market for the specific points you require would be extremely extensive in nature and unlikely to provide meaningful results as there is no obvious differentiation on the basis of hull type, age etc., in market negotiations with charterers taking decisions on the acceptability of individual vessels on a wide variety of bases backed up by varying degrees of physical inspection and documentary investigation. Anecdotal evidence would suggest that in an otherwise free choice, a charter would
choose to utilise the youngest, most technically sound vessel available whilst paying the same "market" freight rate applicable to all the vessels available.
A recent regional variation of note illustrates this point in that whilst Korean authorities have imposed a 20 year age limit on vessels entering their water there is no definite evidence that this has affected the "market freight rates applicable to such voyages.
In summary it is true that there are suggestions that hull type, age etc., influences the freight rates paid in particular markets such variations, if they exist, are not apparent in the available market reports. It is not clear whether the significant resources which would be required to be allocated to this sort of investigation would provide any useful or meaningful results given the above reservations.
On a more general note it has always been the LTBP's policy not to express an opinion on tanker market matters but to provide specific responses, based on the available market information, to a specific query from a client and Members would be reluctant to alter this situation. It may well be the case that the individual companies which provide expertise to the Panel may not share this reticence.
We regret that we are unable to give definitive answers to your queries but hope that the above information is of some assistance to your committee.
Please do not hesitate to ask if you feel there is something the Panel could assist with.