July 8, 2025 • 39 mins
Geopolitical risks like the crisis in the Red Sea or more protectionist trade policies are increasing inefficiencies in global shipping, which will require more ships to move the same amount of freight. In this Talking Transports podcast, Jan Rindbo, CEO of D/S Norden, joins Lee Klaskow, Bloomberg Intelligence senior transportation and logistics analyst, to share insights about how its dry-bulk and product-tanker fleets are navigating the uncertainty. A more favorable order book is making the dry-bulk outlook brighter relative to the product tankers. Rindbo also talks about Norden’s focus on biofuels to reduce emissions, entrance into the break-bulk market, returning capital to shareholders and how his desire to see the world led him to a long career in shipping.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Hi everyone, this is Lee Klaskow when We're Talking Transports.
Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,
Lee Claskow, Senior Freight Transportation lo just ex analysts at
Bloomberg Intelligence, Bloomberg's in house research arm of almost five
hundred analysts and strategists around the globe. Before diving in
a little public service announcement. Your support is instrumental to
keep bringing great guests and conversations to You are listeners,
(00:30):
and we need your support. So please, if you enjoy
this podcast, share it, like it and leave a comment. Also,
if you have any ideas for future episodes or just
want to talk transports, please sit me up on the
Bloomberg terminal, on LinkedIn or on Twitter at logistics Late.
Now onto our episode, I'm very excited to have Jan
Ringbow the CEO of d S Jordan A. Rollie is
(00:50):
held since joining the company in twenty fifteen. Ds Nordon
trades under the ticker dnor D and as a market
cap around a billion time. Jehan was previously employed with
the Hong Kong listed dry cargo shipping company Pacific Basin
for more than thirteen years, most recently as COO, member
of the Executive Committee and on the Board of Directors.
(01:13):
Welcome to the podcast, Jean, thank you very much. So
DS Nordon, you guys do a couple of things in shipping.
Can you give us a little breakdown of about what
the company does?
Speaker 2 (01:23):
Yeh, So, first of all, Norton has a very long
history one hundred and fifty years or more than one
hundred and fifty years in the global shipping, and today
Norton is one of the leading providers of ocean freight
in dry ball, project cargo and product tankers.
Speaker 1 (01:43):
Okay, and roughly how big is your fleet on the
dry box side?
Speaker 2 (01:48):
So we operate a fleet in total of around four
hundred vessels and around two thirds of that activity is
in dry bulk and the last one third is in
product tankas.
Speaker 1 (01:59):
And so do you guys specialize in a certain sizes ship?
Are you more in the larger capes or the smaller vessels?
Speaker 2 (02:05):
So we are actually represented in all sizes. So we
service our customers on anything from very small parcels of
a couple of thousand tons of cargo up to the
very largest dry boat shipments on Newcastle Access, which are
the last largest class of dry boat vessels of over
(02:26):
two hundred thousand deadway tons.
Speaker 1 (02:29):
And on the tanker side, you guys specifically or more
on the product tanker side.
Speaker 3 (02:34):
Is that correct? Yeah, that's right.
Speaker 2 (02:35):
So we are solely in the product tanker space where
we operate predominantly in MR, which is the sort of
the middle sized product tankers, but we also have some
activities on the smaller handy size and the larger a
lot to product tankers.
Speaker 1 (02:52):
Okay, and you mentioned earlier, you know, you guys have
a storied history. You've been around a long long time.
Speaker 3 (02:57):
Harry.
Speaker 1 (02:58):
How do you guys grow? Are you growing organically? Do
you acquire other companies or are you just acquiring assets?
Speaker 2 (03:05):
So for most of our history, we've grown organically, and
we actually did our first M and A transaction only
two years ago, and then we did another one, so
we've done two M and A transactions and that was
with the purpose of growing into Project cargo. So we've
(03:26):
acquired two companies that are specialized in that field.
Speaker 1 (03:29):
Okay, could you give a little explanation of what Project
cargo is.
Speaker 2 (03:34):
Yes, So here it's cargos that are sort of odd
sized or unitized, so it can be cargos like windmill components,
so windmill blades and turbines, towers, we carry big industrial
battery installations. We carry steel products, we carry forestry products,
(03:55):
so so sort of what it's referred to as breakeboat cargos.
And then that comes in addition to all the traditional
bulk cargoes that we carry like grains and box side
and coal and so on.
Speaker 1 (04:08):
Right, so they should be market's been pretty valatile. I
guess it's always been pretty valatile, but it seems to
be even more so valatile since the pandemic. Could you
talk about, you know, what's going on in your industries,
the dry book and the tanker markets. You know how
these how the US more protectionist policies are impacting your business.
Speaker 2 (04:26):
Yeah, so, so our markets have always been very volatile,
so we kind of used to to manage volatility. But
it's right that that the before our volatility was sort
of mainly driven by supply and demand fundamentals, whereas in
the latter years, you know, it's more driven by events,
(04:47):
you know, like COVID.
Speaker 3 (04:49):
But also now policies could be.
Speaker 2 (04:51):
Trade policies, environ mental policies, so so there are more
things now that are sort of driving our markets than
maybe in the past.
Speaker 1 (05:00):
And are you are you you know the the US
protectionist policies is that good or bad for the dry
ball or the product anchor market?
Speaker 2 (05:08):
So for our markets of generally speaking, First of all,
the US market is the smaller in terms of when
you compare to the size of the US economy. So
in s Fressing Drybak we service more of the emerging markets.
(05:29):
So in that sense, the direct impact is not not huge.
But of course if trade policies start to impact the
broader sort of global economy, then then that also becomes
an issue for for our business.
Speaker 1 (05:45):
Right and there there's obviously a lot more geopolitical risks,
or at least it seems there's a lot more geopolitical
risks recently. You know what's going on in the Red
Sea and obviously what's going on between Iran and Israel,
and how that might impact the straight or her moves.
Speaker 3 (05:59):
Could you talk about know.
Speaker 1 (06:00):
How I'm not going to call it the closure, but
how you know most people are avoiding the seas canal,
how that's impacted your business?
Speaker 2 (06:08):
First of all, neither the Strait of Homers or the
Red Sea for that matter, are closed, so there's still
you know, some traffic going through the Red Sea as
an example, for safety reasons, we are not trading through
that region, and that means that for quite a lot
of ships, we're not the only ones, but for quite.
Speaker 3 (06:30):
A big portion of the global fleet we are.
Speaker 2 (06:33):
Transitting you know, south of Africa, and that means that
ships are going on longer routes. And that is one
of the developments that we have seen, you know, in
a world that is becoming you know, more divided, whether
it's sanctioned or these hostilities, we're seeing the utilization of
the global fleet is becoming less efficient. And actually some
(06:56):
of the U S trade policies that are directed towards
IY zoners will have that same impact. So in essence,
what this means is that you will need more ships
to carry the same volume of cargo simply because the
utilization of the global fleet is becoming less efficient.
Speaker 1 (07:16):
Right, assuming you know, the Hoho thies you know, stop
doing what they're doing and the sewers canal is free
to and safe to traverse for all companies, that would
have a pretty negative impact on rates, right, because that
would that would increase capacity into the market.
Speaker 3 (07:34):
Yeah, it.
Speaker 2 (07:36):
I think that is the first sort of thought here.
Speaker 3 (07:40):
But but what we don't.
Speaker 2 (07:43):
Necessarily know is, you know how much trade has stopped
because of ships not being able to go through that
route or has been remoded from other sources. So it's
not necessarily a direct one to one comparison that you
can make. But I think the assumption here is, and
that is probably more on the tanker side than on
the dry car a side, is that that if that's
(08:03):
if the passage is free again and the trades revert
to where they were before it was, you know, before
the hostilitius began, that then then you would have you know,
basically capacity that is becoming released back into the market.
But but these trades also shift with the changes that
has happened, and especially in the longer time it it
(08:26):
goes before we go back to sort of the old
and normal.
Speaker 1 (08:29):
Right, And I guess going back to you know, Trump's
first administration with the trade war with China, you know, China,
I guess decided to get soybeans elsewhere, which which which
is a net positive for the dry bull market because
it was longer a ton miles and voyage times. Are
you seeing anything like that today? Like with with you know,
(08:50):
this administration, are you seeing like China looking to import
some of the commodities that might have gotten from the
US for other places.
Speaker 2 (09:01):
Well, I think the the example you just gave is
a good example of how.
Speaker 3 (09:05):
Trade routes sort of are.
Speaker 2 (09:07):
Reconfigurated and and trade sort of finds that new ways
to flow. And therefore sometimes the impact is it's more
of the shock when it happens because it sort of
happened arouptly, But then your markets find its way to
to to manage that over time. I think today the
direct trade in in dry bull can tangers is very
(09:30):
limited between China and.
Speaker 3 (09:33):
The US today.
Speaker 2 (09:34):
It's probably less than one percent of our total trade
that goes directly between the U S and China. So
this is very different from the container trades that are
much more reliant on on on that direct trade. For
for our markets, this the tea copying has already happened,
and it's not not any by any means, any any
significant trade that that exists today between the US and China.
Speaker 1 (09:59):
Yeah, yeah, it is generally speaking, How would you how
would you characterize the state of the dryboll market today?
Speaker 2 (10:08):
Yeah, So, so with all the noise we've had in
global markets generally speaking, this year, it's actually been very resilient,
pretty flat. We've not actually had that much relagility this year.
You may have thought that with all the noise around
the trade policies, that that that that would have sort
(10:31):
of disrupted our business. That is not the pattern that
we're seeing. We're seeing pretty you know again, pretty pretty
steady trade volumes, pretty steady markets. Not great markets, but
not not sort of bad markets either. So it's actually
been been quite flat.
Speaker 1 (10:50):
Yeah, I mean, your your earnings peaked in twenty twenty
two and kind of has steadily come down. Is you
know the expectations for this year? Is this the the
normalization of earning power for Norton? And are you really
just beholden to where our rates go and that's kind
of how we're really going to drive earnings one way
(11:12):
or the other.
Speaker 2 (11:13):
Yeah, I think what I mean the earnings we saw,
if you go back to twenty twenty two, that was
also the best year ever in Norton's history in terms
of earnings, record profit, highest in our over one hundred
and fifty years. So I think that that was not
that was sort of a not the norm sort of
kind of level. It's a nice benchmark, but right, but
(11:34):
we're getting we are back to more sort of normalized markets,
normalized the earnings. And I think in Norton we build
a business model where where we are more acid light,
we are more agile, we are more able to adapt
to these changing markets. And that means that that even
though rates have come down, we're still generating.
Speaker 3 (11:56):
You know, decent profits.
Speaker 2 (11:58):
We're still generating I think based in class returns and
invested capital because we have that flexibility and the ability
to adapt to these markets. So I think we're using
some of these strings. But these sort of very very
high profits I think are you know, they only happen
(12:19):
when you have very very big changes in the market
and very high freight rates.
Speaker 3 (12:23):
Yeah.
Speaker 1 (12:24):
And you know you mentioned you're more asset light, so
are most of your most of the ships in your fleet,
they're time tritered in they're not you guys don't own them.
Speaker 3 (12:34):
Yeah.
Speaker 2 (12:34):
So out of a fleet of just over four hundred
vessels we have we only own actually directly about five
percent of that fleet. But we do have another portion
of the fleet that are leased.
Speaker 3 (12:48):
With purchase options.
Speaker 2 (12:50):
So that means that out of the four hundred, roughly
we have about one hundred vessels, including our own and
leased vessels where we have some kind of asset exposure. Now,
the nice thing will purchase options is that, yes, you
can use them when enterprises are high and you get
some value out of it. But likewise, in lower markets,
(13:10):
you are not burdened by having the ownership of the
vessels and you can deliver them if you're not making
money on them. So this is actually one of the
key parts of our strategy of our business model, having
that kind of flexibility, which also means that in very
very good markets you actually have that sort of X
(13:31):
factor where you can use these options to your advantage,
whereas in lower markets you're also more protected because you
don't have to own the ships. You can redliver them
back to the owner and then we knew we new
charters at lower market rates. So this is definitely a
coneristome part of our strategy.
Speaker 1 (13:52):
And is there is there a time horizon where you
like to charter in vessels or is it like a
one year, five year or twenty year.
Speaker 3 (13:58):
Like what do you Yes?
Speaker 2 (13:59):
Typically, so if we have about one hundred vessels that
we lease or own. Then we have another three hundred
ships that we take in on on shorter term charters,
and here it can be anything from a couple of
weeks to a couple of years of charter, and again
this will depend on our market outlook. So we tend
to go for longer charters at times where we expect
(14:23):
markets to go up. We like to secure the capacity,
you know, before, before rates move up. And in weeker markets,
we actually tend to go out and book more cargoes first,
and then we chart the ships in the markets at
lower rates later and then benefit from from falling rates.
Speaker 1 (14:41):
From what you said earlier, you said the market's kind
of flat. So is that what you guys are expecting
going forward. Are expecting the market to go up go
down in the months to come.
Speaker 2 (14:51):
Yes, I think in the short term we I mean
we we do expect the second half of the year
you could could be a bit tougher and we have
positioned ourselves for that. What we do see though, in
the longer run, which is interesting is that when you
have you know, more disruptions, you know, and you have
(15:16):
we have the USTR potentially coming into effect in the
second half of the year, you have environmental regulations from
IMO potentially coming in in twenty twenty seven twenty twenty eight.
All these sort of points to again a more inefficient
utilization of the world fleet. And when you then couple
(15:39):
that with an aging global fleet as we look towards
twenty thirty and you look at a relatively small order book,
especially in dry ball where we have about ten percent
of ships on order, then the picture that is painting
as far as we see it today is that yes,
there might be some some short term headwinds in terms
(16:00):
of on the demand side, but longer term, we actually
see the supply side looking extremely favorable for the long run.
Speaker 1 (16:14):
And that's on the dry box side, right, that's.
Speaker 3 (16:16):
On the dry box side.
Speaker 2 (16:17):
But it's a similar pattern on product tankers, except that
the auder book is a little bit larger on tankers,
so we have more tangers new buildings that are delivering
into the market over the next one or two years.
Speaker 3 (16:31):
But here you have an even older fleet.
Speaker 2 (16:34):
Because we've had good markets and tankers now for a
number of years, we have sort of a penned up
scrabbing potential of all these older vessels, and therefore you
have a sort of a rapidly aging tanker fleet also
when you look towards twenty thirty, and that means that
at least any headwinds that may come from the new
(16:54):
building deliveries in the coming years, you know, quite quickly
can be reset as olderships exiting the fleets. And and
what we are seeing both in dry bog and tankers
is that owners are pretty restraint from ordering new new
new tonnage.
Speaker 3 (17:11):
We see shipyards full, we've.
Speaker 2 (17:15):
Seen container lines considering continuing to order container vessels, and
and therefore, you know, the arts are pretty happy with
their order book and prices are quite high.
Speaker 3 (17:27):
So despite the lower rates fish.
Speaker 2 (17:30):
In dry bog, we we continue to see relatively high
a serprises and new building prices. And that makes new
investments in ships in dry bog and tankers for that matter,
much more difficult to justify, which is good, you know,
from a long term capacity perspective.
Speaker 1 (17:48):
Sure, you know you mentioned earlier the second half might
be a little more challenging. What's driving that out look.
Speaker 2 (17:55):
Well, we've seen we've seen volumes going down, we've seen
some headwinds on coal and and we've seen less congestion
in the fleet. It just sort of just indicates that
markets will you know, will not it's difficult to see
the trigger point from a demand perspective in in the
(18:19):
short term, so markets will continue to grow, but but
probably at a pretty low low pace. But all this,
of course is subject to any events happening, and and
and this is what we that that is what we
have seen in over the last few years, that that
you know, our markets become more event driven.
Speaker 3 (18:40):
Uh.
Speaker 2 (18:41):
And of course with a situation in the Middle East
at the moment that is still you know, unstable, and
you know, it is sort of a it does not
take a lot to to change some of these dynamics,
so that is something to to sort of stay stay
stay alone.
Speaker 3 (19:00):
Two.
Speaker 1 (19:02):
Absolutely, you know, we've talked about a lot of cyclicality
in the market. You know, your markets are also the seasonal.
Can you talk about the tanker and the drybill markets
kind of like broadly speaking the seasonality in them.
Speaker 2 (19:16):
Yeah, So if we start in the dryball market, then
one of the big commodities is grain, and grain is
seasonal due to weather patterns, so typically that does tend
to support rates towards the end of the year and
(19:36):
and towards the end of the year is also usually
when we see a bit of a push on other commodities.
So it doesn't happen every year, but but but usually
we we could see sort of a bit of a
short term support towards the end of the year, but
then you have a conversion, you have a lower third quarter,
(20:00):
so that is you know, typically the pattern in in
dry book on on Tangas it tends to be evolved
more around the winter season. So typically now we are
coming into what is more of a quire period for
for the tanker markets. But again I think with all
(20:20):
the unrest that is going on at the moment, you know,
normal normal seasonality is something that probably weighs a bit
less at the moment than that it has done traditionally.
Speaker 1 (20:32):
Right and in other other typical trading lanes in the
product tanker market, I.
Speaker 2 (20:37):
Mean usually it's the the winter season in the northern
hemisphere that is driving driving demand. Uh, and then you
also have the US driving season for the summer holidays.
So these are some of the the sort of more
trade specific or country specific demand.
Speaker 3 (20:56):
Drivers that that that we see.
Speaker 2 (20:59):
But again it is less pronounced at times where you
have sort of a big world events because then then
you have other things that are driving the market than
the traditional demand patterants.
Speaker 3 (21:11):
You know, you mentioned a.
Speaker 1 (21:13):
Couple of times, you know, the US Trade Representative fees
that that might go into effect later this year, assuming
they do, how will that impact your fleet? And that's
going to be fees imposed on Chinese ships coming to
the US.
Speaker 2 (21:31):
Yeah, so this this is the ships that are owned,
So in our segments, it's predominantly ships that are owned
by Chinese interests.
Speaker 3 (21:41):
And our fleet.
Speaker 2 (21:45):
Composition today is it's just such that most of the
ships of the hundred ships that we consider our core fleet,
so the ships that we lease and owned. Then obviously
the owned ships are not an issue. They're owned by
by by Norton as a Danish headquartered company. The ships
that we lease are almost all of them owned by
(22:08):
Japanese owners because this is where we traditionally have done
our leasing deals. So again not something that is directly
impact impacting us. And then the rest of the fleet
are ships that we chart in the market, so here
we can more easily adapt to the USGR regulation, So
(22:29):
we don't actually expect much impact on our business directly,
but of course depending on the numbers, and this is
not sort of always easy to measure, but if up
to around maybe twenty percent of the dry bot fleet
is owned by Chinese owners, then clearly this will have
(22:51):
some impact on the markets. There will be a chunk
of the world fleet that effectually will not be trading
to the US. And it's part of this picture was
explaining earlier of you know, the world fleet is becoming
less efficient because those ships will stay away from the
US markets. They will probably also stay away from adjacent
markets because there's not much fun in having ships, you know,
(23:14):
close to the US if you cannot trade to the US.
And those ships will therefore be trading maybe more in
traditional sort of intra Asia trades, but those ships will
have less flexibility and and that means again that the
utilization of the fleet will become less efficient, so you
may have to balance longer to get you a desired
(23:37):
business if you're trying to stay away from certain areas.
Speaker 1 (23:41):
I'm sorry, so you know you mentioned whether they're owned
by a Chinese energy, but it's also if they're if
they're manufactured in China, correct or.
Speaker 2 (23:51):
Yeah, Well that that doesn't actually impact the the trades
that that we are in because this is mainly for
the larger vessels, and if you take our largest vessels
in the cape size segment, those ships rarely go to
the US.
Speaker 3 (24:08):
Okay. Ships are mainly.
Speaker 2 (24:10):
Used for trades between Africa and South America and back
to Asia, so the impact there is relatively small. And
then also in our trades in the dry boat trades,
we tend to pick up cargo loading in the US,
so all the grain exports for example, and again those
(24:32):
traits are exempted as things don today.
Speaker 1 (24:36):
Gotcha, okay, And you also mentioned earlier other regulatory issues
like emissions from the IMO. Can you talk about how
Norton is dealing with that and how you're planning to
comply with that and you know where you think, you know,
the industry is going from a fuel standpoint.
Speaker 2 (24:57):
Yeah, so we have in in Norton, we have actually
been pioneering on biofuels. I think we did the first
we were the first company to do a you know,
have a voyage that was entire fueled by biofuel and
and and since that eighteen we've been trialing various biofuel
(25:19):
types on our vessels. So so this is definitely one
area that we are we are looking at and looking
to do more of. We we like biofuel because it
can be used on existing vessels and in our industry,
of course, you've had you know, many many industry discussions
(25:40):
about is it methanol, is it ammonia, is it something else?
And and I think the fact is that it is
still you know, relatively early days. We don't know which
fuel will be available, we don't know what cost it
will be available at, and and and therefore we like
(26:02):
the buy fuel option because it's also besides not having
to build a new fleet, it's also the cheapest alternative
to the traditional bunker fuels that we're using today. And
we are gradually seeing customers showing a bit more interest
in this space as well.
Speaker 1 (26:23):
And do you think getting to zero is a reality
or is it more aspirational in terms of admissions.
Speaker 2 (26:29):
Well, it's a long term aspiration. It's a target, you know,
in twenty to fifty. I think it's not going to
happen around the corner, just around the corner. So I
think actually the as an industry, we are moving ahead
and I think it is possible, you know, but it
(26:52):
will take some time. And I think we have a
habit sometimes in the shipping industry of just talking like
one industry. But the fact is that we have many,
many different ship types in the industry, and some ships
are trading in what we call tramp shipping, which is
like tax is running around, you know, going where our
customers have at a month. And then you have the
(27:14):
container ships that are going on like bus bus services
on liner routes where you can predict where the ships
are and there it's a bit easier to build new
supply chains for alternative fuels. So, you know, I think
it will be at different speeds that the industry will adopt.
And we see this pattern already where container lines, you know,
(27:38):
there are now ordering ships that are dual fuel. But
even there I see different You know, a few years
ago it was sort of methanol that that was the
go to fuel. Then it's l G, and then more
people are now talking about ammonia. So I think the
fact is that we still do not know and and
(27:59):
that's why for us, at least in the short to
medium term, bio fuel just seems like a better option
because we can go to what zero emissions with biofuel
until we have more clarity and until we have supply
chains and fuel alternative fuels that are available, and then
(28:20):
we can start investing in new ship types at at
that point.
Speaker 1 (28:24):
Yeah great, you know you are there any other regulatory
issues that's kind of on your radar that that could
impact the industry in order?
Speaker 2 (28:35):
More specifically, I think emissions that that is the big one,
and it's the big one because it happens at a
time where the global fleet is aging, and that would
mean that there will be additional pressure on the older,
less efficient vessels at a time where there are a
lot of them that are aging. And that's why when
(28:59):
we look longer term, I think there is a picture
evolving of just not having enough ships in the global fleet,
you know, in in in trades that are growing.
Speaker 3 (29:12):
Even even even.
Speaker 2 (29:14):
If if a globalization is having sort of some hit winds,
the fact is that the global trade continues to grow
and therefore more ships are needed and and and therefore
you know there will be a need to build more
ships to replace all these older vessels eventually.
Speaker 3 (29:37):
Yeah.
Speaker 1 (29:37):
Yeah, And so just taking a couple of steps back
about Nordon, So, so who are your customers or your customers,
the exporters, the importers, How do you guys generate business
do you have your own salesforce or is it mostly
brokers kind of working with you to secure.
Speaker 3 (29:54):
Capacity for other people. Yes.
Speaker 2 (29:56):
So our customers are mining companies, trading houses, grain companies,
energy companies, oil majors. It's it's a broad range of
different types of customers. We have carried one hundred and
forty million tons of cargo over the last over the
(30:16):
last twelve months, so so it's a very fragmented customer base.
And you know they are based everywhere in the world.
We have a global office network of nineteen offices that
are located around the world. We are present on all
continents except for Antarctica. But we we we so so
(30:39):
we have saled you know what you can say, salespeople
or chartering people in close to our customers in all
these important markets around the world.
Speaker 3 (30:49):
Uh.
Speaker 2 (30:50):
And and you know, like like I mentioned earlier, we
are carrying anything from windmill blades for the windmill companies too,
you know, large sized box side shipments into the aluminium industry,
grain cargos, cement cargo's, forestry.
Speaker 3 (31:13):
Cargoes as well.
Speaker 2 (31:13):
So, so a very broad variety of anything that is
sort of a bulk cargo, anything that you do not
put into a container mm hm.
Speaker 3 (31:22):
And can you talk about.
Speaker 1 (31:23):
Neuron's capital allocation policy, like what what do you guys
focus on? Is it the buybacks, it's dividends.
Speaker 2 (31:30):
We can talk about that with a feat of foreigner vessels,
but predominantly ships that each other and even the least
vessels don't really require any capex. We we we on
acid light business and we do also investments ships, so
(31:50):
it's not like we are we are not ship a
ship owner, but it tends to be more linked to
our views on the market and whether we see any
upside of actually also owning owning the assets because we
don't need to own the ships to service our customers.
Speaker 3 (32:05):
We do.
Speaker 2 (32:05):
We do that on on on the ships that we charter.
Speaker 3 (32:09):
In terms of.
Speaker 2 (32:10):
Allocation, we have a policy of distributing minimum fifty of
our profits back to our shareholders. And we have two
avenues of doing that. One is through dividends and the
other one is through share buybacks, and we are using
both of those at the moment. And and we've returned
(32:34):
given our large profits we've had over the last of
the five years we have we've returned you know, a
lot of a lot of our profits to our shareholders.
Speaker 1 (32:44):
And when you look at the growth fleet, where the
fleet of the growth Excuse me, is it more on
that project break bulk fleet that you're planning on growing
or is it the product side or the dry box
side where you see the growth in terms of your fleet.
Speaker 2 (32:59):
Yes, So lately we've expanded into two new areas of
our business. So we've moved into cape size, the largest
dry boat vessels. So over the last couple of years
we have been investing into cape size new buildings, also
invested into more leased cape sized vessels, so we've been
building up more of a core fleet in that segment.
(33:21):
And then at the other end of the spectrum in
terms of size, we are also building a core fleet of.
Speaker 3 (33:28):
Multi purpose vessels.
Speaker 2 (33:29):
These are the vessels that are carrying a project cargo
and brake board cargoes, more versatile ships that.
Speaker 3 (33:37):
Some of the smaller vessels in our fleet.
Speaker 2 (33:40):
So we've really been focusing on building our product range
to our clients so that we can service our customers
on anything from smaller parcels and.
Speaker 3 (33:48):
All the way up to large dryboll shipments.
Speaker 1 (33:51):
And you know, so you've you've been in shipping for
quite some time. How did you initially get into the industry.
Speaker 2 (33:58):
Yeah, so I've actually worked in shipping my entire career.
So I joined the industry over thirty years ago. I
started as a shipping trainee here in Copenhagen, uh and
and And.
Speaker 3 (34:14):
One of the one of.
Speaker 2 (34:15):
The drivers for me to to getting intershipping was, you know,
to work sort of in the in the heart of
of of global trade uh and and to have an
international career. And I'm fortunate to have had the opportunity
to live many years in in Asia. I've also lived
in North America, in the US and obviously here in Europe.
(34:38):
So it's been you know, it's a great industry to
sort of connect with other parts of the world, and
I should travel and meet people from from all over
the world.
Speaker 1 (34:49):
Copenhagen is one of my one of my favorite favorite cities.
You know, is is there anything you know, as a
leader of a large transportation company that keeps you up
at night?
Speaker 2 (34:59):
You know, so I take I take a lot of
comfort in Norden's history. We have, you know, with more
than one hundred and fifty years in in in in
in the industry. You know, this company has seen you know,
its share of upturns and downturns and world wars and
and and all that so so so, so you know,
(35:22):
I'm not really shaken.
Speaker 3 (35:25):
Or disturbed at night. You know with what what what?
With everything?
Speaker 2 (35:30):
You know that that all the moving parts, you can
say that that that we have in driving a business
of of this science. What is important to me is
that we service our customers. We provide a reliable service
to them. They can count on us. This is one
of the things that stand out in our very long
(35:51):
history is that we've always honored all our commitments. This
is also why we are able to do these vacing
deals with our Japanese partners, because they trust and know
that Norton will perform no matter.
Speaker 3 (36:04):
Where we are in the market cycle. Uh and in
a very.
Speaker 2 (36:07):
Volatile industry with very high highs and and and very
low lows. The the ability to trust that Norton is
there to perform is something that that is very important
to them and very important to to us as a company.
Speaker 1 (36:25):
Okay, yeah, And I like to ask all my guests
is is there a book on leadership or the transportation
industry that close to your heart do you like to recommend?
Speaker 2 (36:34):
Well, then if I can choose two books because I remember,
you know, some time ago now I read.
Speaker 3 (36:40):
A book.
Speaker 2 (36:43):
Good to Great, which is an old sort of I
think it's it must be twenty five years old now,
but it's really about how you build sort of excellence
in a business, you know, how you how you build
enduring sort of greatness. And the book also talks about
levels of leadership and and how you you know, they
(37:04):
talk about this sort of level five leadership that I
think is quite inspiring, you know, about how how you
have this sort of mixture of you know, personal humility
in in in as a leader, but also.
Speaker 3 (37:17):
Have this sort of.
Speaker 2 (37:19):
Strong will to to to succeed, not for yourself, and
that's I think that's the important part of this book,
but but actually built you know, for the cause, you know,
so so in orderly work will our purpose of enabling
smart global trade. Uh and and that is the cause
and and and the will to drive that course and
(37:41):
our purpose is something that that is very important to me.
And and in that context I think this book actually
is is was was a great inspiration for me. The
other book I also think for me personally that has
been important was a book that was actually written about
Norton in connection with our one hundred and fiftieth anniversary,
(38:03):
called The Norton Voyage because it takes us back in history.
It explains how Norton was formed. You know, Norton back
in eighteen hundred and seventy one was actually formed on
the back of two new technologies, you know, steamships and
telegraph So the ability to communicate and to be at
the forefront of both technology and propulsion, I think is
(38:28):
that are some direct links to some of the dilemmas
and opportunities.
Speaker 3 (38:32):
That we're looking at today in Norton.
Speaker 2 (38:35):
So actually, I think that book is quite quite inspiring
to read as well.
Speaker 1 (38:39):
We'll have to take a look at THEI the Nordon
Voyage book when I get a chance. Well, yeahn I
really want to thank you for your time and your
insights today.
Speaker 3 (38:49):
This was great.
Speaker 1 (38:50):
Yeah, thank you very much, and I want to thank
you for tuning in. If you liked the episode, please
subscribe and leave review. We fined up a number of
great guests for the podcast, so please check back to
hear conversations with C suite executives, shippers, regulators, and decision
makers within the freight markets. Also, if you want To
learn more about the freight transportation markets, check out our
work on the Bloomberg Terminal at Bigo and on social media.
(39:13):
This is Lee Clasgow signing off and thanks for talking
transports with me.
Hi everyone, this is Lee Klaskow when We're Talking Transports.
Welcome to Bloomberg Intelligence Talking Transports podcast. I'm your host,
Lee Claskow, Senior Freight Transportation lo just ex analysts at
Bloomberg Intelligence, Bloomberg's in house research arm of almost five
hundred analysts and strategists around the globe. Before diving in
a little public service announcement. Your support is instrumental to
keep bringing great guests and conversations to You are listeners,
(00:30):
and we need your support. So please, if you enjoy
this podcast, share it, like it and leave a comment. Also,
if you have any ideas for future episodes or just
want to talk transports, please sit me up on the
Bloomberg terminal, on LinkedIn or on Twitter at logistics Late.
Now onto our episode, I'm very excited to have Jan
Ringbow the CEO of d S Jordan A. Rollie is
(00:50):
held since joining the company in twenty fifteen. Ds Nordon
trades under the ticker dnor D and as a market
cap around a billion time. Jehan was previously employed with
the Hong Kong listed dry cargo shipping company Pacific Basin
for more than thirteen years, most recently as COO, member
of the Executive Committee and on the Board of Directors.
(01:13):
Welcome to the podcast, Jean, thank you very much. So
DS Nordon, you guys do a couple of things in shipping.
Can you give us a little breakdown of about what
the company does?
Speaker 2 (01:23):
Yeh, So, first of all, Norton has a very long
history one hundred and fifty years or more than one
hundred and fifty years in the global shipping, and today
Norton is one of the leading providers of ocean freight
in dry ball, project cargo and product tankers.
Speaker 1 (01:43):
Okay, and roughly how big is your fleet on the
dry box side?
Speaker 2 (01:48):
So we operate a fleet in total of around four
hundred vessels and around two thirds of that activity is
in dry bulk and the last one third is in
product tankas.
Speaker 1 (01:59):
And so do you guys specialize in a certain sizes ship?
Are you more in the larger capes or the smaller vessels?
Speaker 2 (02:05):
So we are actually represented in all sizes. So we
service our customers on anything from very small parcels of
a couple of thousand tons of cargo up to the
very largest dry boat shipments on Newcastle Access, which are
the last largest class of dry boat vessels of over
(02:26):
two hundred thousand deadway tons.
Speaker 1 (02:29):
And on the tanker side, you guys specifically or more
on the product tanker side.
Speaker 3 (02:34):
Is that correct? Yeah, that's right.
Speaker 2 (02:35):
So we are solely in the product tanker space where
we operate predominantly in MR, which is the sort of
the middle sized product tankers, but we also have some
activities on the smaller handy size and the larger a
lot to product tankers.
Speaker 1 (02:52):
Okay, and you mentioned earlier, you know, you guys have
a storied history. You've been around a long long time.
Speaker 3 (02:57):
Harry.
Speaker 1 (02:58):
How do you guys grow? Are you growing organically? Do
you acquire other companies or are you just acquiring assets?
Speaker 2 (03:05):
So for most of our history, we've grown organically, and
we actually did our first M and A transaction only
two years ago, and then we did another one, so
we've done two M and A transactions and that was
with the purpose of growing into Project cargo. So we've
(03:26):
acquired two companies that are specialized in that field.
Speaker 1 (03:29):
Okay, could you give a little explanation of what Project
cargo is.
Speaker 2 (03:34):
Yes, So here it's cargos that are sort of odd
sized or unitized, so it can be cargos like windmill components,
so windmill blades and turbines, towers, we carry big industrial
battery installations. We carry steel products, we carry forestry products,
(03:55):
so so sort of what it's referred to as breakeboat cargos.
And then that comes in addition to all the traditional
bulk cargoes that we carry like grains and box side
and coal and so on.
Speaker 1 (04:08):
Right, so they should be market's been pretty valatile. I
guess it's always been pretty valatile, but it seems to
be even more so valatile since the pandemic. Could you
talk about, you know, what's going on in your industries,
the dry book and the tanker markets. You know how
these how the US more protectionist policies are impacting your business.
Speaker 2 (04:26):
Yeah, so, so our markets have always been very volatile,
so we kind of used to to manage volatility. But
it's right that that the before our volatility was sort
of mainly driven by supply and demand fundamentals, whereas in
the latter years, you know, it's more driven by events,
(04:47):
you know, like COVID.
Speaker 3 (04:49):
But also now policies could be.
Speaker 2 (04:51):
Trade policies, environ mental policies, so so there are more
things now that are sort of driving our markets than
maybe in the past.
Speaker 1 (05:00):
And are you are you you know the the US
protectionist policies is that good or bad for the dry
ball or the product anchor market?
Speaker 2 (05:08):
So for our markets of generally speaking, First of all,
the US market is the smaller in terms of when
you compare to the size of the US economy. So
in s Fressing Drybak we service more of the emerging markets.
(05:29):
So in that sense, the direct impact is not not huge.
But of course if trade policies start to impact the
broader sort of global economy, then then that also becomes
an issue for for our business.
Speaker 1 (05:45):
Right and there there's obviously a lot more geopolitical risks,
or at least it seems there's a lot more geopolitical
risks recently. You know what's going on in the Red
Sea and obviously what's going on between Iran and Israel,
and how that might impact the straight or her moves.
Speaker 3 (05:59):
Could you talk about know.
Speaker 1 (06:00):
How I'm not going to call it the closure, but
how you know most people are avoiding the seas canal,
how that's impacted your business?
Speaker 2 (06:08):
First of all, neither the Strait of Homers or the
Red Sea for that matter, are closed, so there's still
you know, some traffic going through the Red Sea as
an example, for safety reasons, we are not trading through
that region, and that means that for quite a lot
of ships, we're not the only ones, but for quite.
Speaker 3 (06:30):
A big portion of the global fleet we are.
Speaker 2 (06:33):
Transitting you know, south of Africa, and that means that
ships are going on longer routes. And that is one
of the developments that we have seen, you know, in
a world that is becoming you know, more divided, whether
it's sanctioned or these hostilities, we're seeing the utilization of
the global fleet is becoming less efficient. And actually some
(06:56):
of the U S trade policies that are directed towards
IY zoners will have that same impact. So in essence,
what this means is that you will need more ships
to carry the same volume of cargo simply because the
utilization of the global fleet is becoming less efficient.
Speaker 1 (07:16):
Right, assuming you know, the Hoho thies you know, stop
doing what they're doing and the sewers canal is free
to and safe to traverse for all companies, that would
have a pretty negative impact on rates, right, because that
would that would increase capacity into the market.
Speaker 3 (07:34):
Yeah, it.
Speaker 2 (07:36):
I think that is the first sort of thought here.
Speaker 3 (07:40):
But but what we don't.
Speaker 2 (07:43):
Necessarily know is, you know how much trade has stopped
because of ships not being able to go through that
route or has been remoded from other sources. So it's
not necessarily a direct one to one comparison that you
can make. But I think the assumption here is, and
that is probably more on the tanker side than on
the dry car a side, is that that if that's
(08:03):
if the passage is free again and the trades revert
to where they were before it was, you know, before
the hostilitius began, that then then you would have you know,
basically capacity that is becoming released back into the market.
But but these trades also shift with the changes that
has happened, and especially in the longer time it it
(08:26):
goes before we go back to sort of the old
and normal.
Speaker 1 (08:29):
Right, And I guess going back to you know, Trump's
first administration with the trade war with China, you know, China,
I guess decided to get soybeans elsewhere, which which which
is a net positive for the dry bull market because
it was longer a ton miles and voyage times. Are
you seeing anything like that today? Like with with you know,
(08:50):
this administration, are you seeing like China looking to import
some of the commodities that might have gotten from the
US for other places.
Speaker 2 (09:01):
Well, I think the the example you just gave is
a good example of how.
Speaker 3 (09:05):
Trade routes sort of are.
Speaker 2 (09:07):
Reconfigurated and and trade sort of finds that new ways
to flow. And therefore sometimes the impact is it's more
of the shock when it happens because it sort of
happened arouptly, But then your markets find its way to
to to manage that over time. I think today the
direct trade in in dry bull can tangers is very
(09:30):
limited between China and.
Speaker 3 (09:33):
The US today.
Speaker 2 (09:34):
It's probably less than one percent of our total trade
that goes directly between the U S and China. So
this is very different from the container trades that are
much more reliant on on on that direct trade. For
for our markets, this the tea copying has already happened,
and it's not not any by any means, any any
significant trade that that exists today between the US and China.
Speaker 1 (09:59):
Yeah, yeah, it is generally speaking, How would you how
would you characterize the state of the dryboll market today?
Speaker 2 (10:08):
Yeah, So, so with all the noise we've had in
global markets generally speaking, this year, it's actually been very resilient,
pretty flat. We've not actually had that much relagility this year.
You may have thought that with all the noise around
the trade policies, that that that that would have sort
(10:31):
of disrupted our business. That is not the pattern that
we're seeing. We're seeing pretty you know again, pretty pretty
steady trade volumes, pretty steady markets. Not great markets, but
not not sort of bad markets either. So it's actually
been been quite flat.
Speaker 1 (10:50):
Yeah, I mean, your your earnings peaked in twenty twenty
two and kind of has steadily come down. Is you
know the expectations for this year? Is this the the
normalization of earning power for Norton? And are you really
just beholden to where our rates go and that's kind
of how we're really going to drive earnings one way
(11:12):
or the other.
Speaker 2 (11:13):
Yeah, I think what I mean the earnings we saw,
if you go back to twenty twenty two, that was
also the best year ever in Norton's history in terms
of earnings, record profit, highest in our over one hundred
and fifty years. So I think that that was not
that was sort of a not the norm sort of
kind of level. It's a nice benchmark, but right, but
(11:34):
we're getting we are back to more sort of normalized markets,
normalized the earnings. And I think in Norton we build
a business model where where we are more acid light,
we are more agile, we are more able to adapt
to these changing markets. And that means that that even
though rates have come down, we're still generating.
Speaker 3 (11:56):
You know, decent profits.
Speaker 2 (11:58):
We're still generating I think based in class returns and
invested capital because we have that flexibility and the ability
to adapt to these markets. So I think we're using
some of these strings. But these sort of very very
high profits I think are you know, they only happen
(12:19):
when you have very very big changes in the market
and very high freight rates.
Speaker 3 (12:23):
Yeah.
Speaker 1 (12:24):
And you know you mentioned you're more asset light, so
are most of your most of the ships in your fleet,
they're time tritered in they're not you guys don't own them.
Speaker 3 (12:34):
Yeah.
Speaker 2 (12:34):
So out of a fleet of just over four hundred
vessels we have we only own actually directly about five
percent of that fleet. But we do have another portion
of the fleet that are leased.
Speaker 3 (12:48):
With purchase options.
Speaker 2 (12:50):
So that means that out of the four hundred, roughly
we have about one hundred vessels, including our own and
leased vessels where we have some kind of asset exposure. Now,
the nice thing will purchase options is that, yes, you
can use them when enterprises are high and you get
some value out of it. But likewise, in lower markets,
(13:10):
you are not burdened by having the ownership of the
vessels and you can deliver them if you're not making
money on them. So this is actually one of the
key parts of our strategy of our business model, having
that kind of flexibility, which also means that in very
very good markets you actually have that sort of X
(13:31):
factor where you can use these options to your advantage,
whereas in lower markets you're also more protected because you
don't have to own the ships. You can redliver them
back to the owner and then we knew we new
charters at lower market rates. So this is definitely a
coneristome part of our strategy.
Speaker 1 (13:52):
And is there is there a time horizon where you
like to charter in vessels or is it like a
one year, five year or twenty year.
Speaker 3 (13:58):
Like what do you Yes?
Speaker 2 (13:59):
Typically, so if we have about one hundred vessels that
we lease or own. Then we have another three hundred
ships that we take in on on shorter term charters,
and here it can be anything from a couple of
weeks to a couple of years of charter, and again
this will depend on our market outlook. So we tend
to go for longer charters at times where we expect
(14:23):
markets to go up. We like to secure the capacity,
you know, before, before rates move up. And in weeker markets,
we actually tend to go out and book more cargoes first,
and then we chart the ships in the markets at
lower rates later and then benefit from from falling rates.
Speaker 1 (14:41):
From what you said earlier, you said the market's kind
of flat. So is that what you guys are expecting
going forward. Are expecting the market to go up go
down in the months to come.
Speaker 2 (14:51):
Yes, I think in the short term we I mean
we we do expect the second half of the year
you could could be a bit tougher and we have
positioned ourselves for that. What we do see though, in
the longer run, which is interesting is that when you
have you know, more disruptions, you know, and you have
(15:16):
we have the USTR potentially coming into effect in the
second half of the year, you have environmental regulations from
IMO potentially coming in in twenty twenty seven twenty twenty eight.
All these sort of points to again a more inefficient
utilization of the world fleet. And when you then couple
(15:39):
that with an aging global fleet as we look towards
twenty thirty and you look at a relatively small order book,
especially in dry ball where we have about ten percent
of ships on order, then the picture that is painting
as far as we see it today is that yes,
there might be some some short term headwinds in terms
(16:00):
of on the demand side, but longer term, we actually
see the supply side looking extremely favorable for the long run.
Speaker 1 (16:14):
And that's on the dry box side, right, that's.
Speaker 3 (16:16):
On the dry box side.
Speaker 2 (16:17):
But it's a similar pattern on product tankers, except that
the auder book is a little bit larger on tankers,
so we have more tangers new buildings that are delivering
into the market over the next one or two years.
Speaker 3 (16:31):
But here you have an even older fleet.
Speaker 2 (16:34):
Because we've had good markets and tankers now for a
number of years, we have sort of a penned up
scrabbing potential of all these older vessels, and therefore you
have a sort of a rapidly aging tanker fleet also
when you look towards twenty thirty, and that means that
at least any headwinds that may come from the new
(16:54):
building deliveries in the coming years, you know, quite quickly
can be reset as olderships exiting the fleets. And and
what we are seeing both in dry bog and tankers
is that owners are pretty restraint from ordering new new
new tonnage.
Speaker 3 (17:11):
We see shipyards full, we've.
Speaker 2 (17:15):
Seen container lines considering continuing to order container vessels, and
and therefore, you know, the arts are pretty happy with
their order book and prices are quite high.
Speaker 3 (17:27):
So despite the lower rates fish.
Speaker 2 (17:30):
In dry bog, we we continue to see relatively high
a serprises and new building prices. And that makes new
investments in ships in dry bog and tankers for that matter,
much more difficult to justify, which is good, you know,
from a long term capacity perspective.
Speaker 1 (17:48):
Sure, you know you mentioned earlier the second half might
be a little more challenging. What's driving that out look.
Speaker 2 (17:55):
Well, we've seen we've seen volumes going down, we've seen
some headwinds on coal and and we've seen less congestion
in the fleet. It just sort of just indicates that
markets will you know, will not it's difficult to see
the trigger point from a demand perspective in in the
(18:19):
short term, so markets will continue to grow, but but
probably at a pretty low low pace. But all this,
of course is subject to any events happening, and and
and this is what we that that is what we
have seen in over the last few years, that that
you know, our markets become more event driven.
Speaker 3 (18:40):
Uh.
Speaker 2 (18:41):
And of course with a situation in the Middle East
at the moment that is still you know, unstable, and
you know, it is sort of a it does not
take a lot to to change some of these dynamics,
so that is something to to sort of stay stay
stay alone.
Speaker 3 (19:00):
Two.
Speaker 1 (19:02):
Absolutely, you know, we've talked about a lot of cyclicality
in the market. You know, your markets are also the seasonal.
Can you talk about the tanker and the drybill markets
kind of like broadly speaking the seasonality in them.
Speaker 2 (19:16):
Yeah, So if we start in the dryball market, then
one of the big commodities is grain, and grain is
seasonal due to weather patterns, so typically that does tend
to support rates towards the end of the year and
(19:36):
and towards the end of the year is also usually
when we see a bit of a push on other commodities.
So it doesn't happen every year, but but but usually
we we could see sort of a bit of a
short term support towards the end of the year, but
then you have a conversion, you have a lower third quarter,
(20:00):
so that is you know, typically the pattern in in
dry book on on Tangas it tends to be evolved
more around the winter season. So typically now we are
coming into what is more of a quire period for
for the tanker markets. But again I think with all
(20:20):
the unrest that is going on at the moment, you know,
normal normal seasonality is something that probably weighs a bit
less at the moment than that it has done traditionally.
Speaker 1 (20:32):
Right and in other other typical trading lanes in the
product tanker market, I.
Speaker 2 (20:37):
Mean usually it's the the winter season in the northern
hemisphere that is driving driving demand. Uh, and then you
also have the US driving season for the summer holidays.
So these are some of the the sort of more
trade specific or country specific demand.
Speaker 3 (20:56):
Drivers that that that we see.
Speaker 2 (20:59):
But again it is less pronounced at times where you
have sort of a big world events because then then
you have other things that are driving the market than
the traditional demand patterants.
Speaker 3 (21:11):
You know, you mentioned a.
Speaker 1 (21:13):
Couple of times, you know, the US Trade Representative fees
that that might go into effect later this year, assuming
they do, how will that impact your fleet? And that's
going to be fees imposed on Chinese ships coming to
the US.
Speaker 2 (21:31):
Yeah, so this this is the ships that are owned,
So in our segments, it's predominantly ships that are owned
by Chinese interests.
Speaker 3 (21:41):
And our fleet.
Speaker 2 (21:45):
Composition today is it's just such that most of the
ships of the hundred ships that we consider our core fleet,
so the ships that we lease and owned. Then obviously
the owned ships are not an issue. They're owned by
by by Norton as a Danish headquartered company. The ships
that we lease are almost all of them owned by
(22:08):
Japanese owners because this is where we traditionally have done
our leasing deals. So again not something that is directly
impact impacting us. And then the rest of the fleet
are ships that we chart in the market, so here
we can more easily adapt to the USGR regulation, So
(22:29):
we don't actually expect much impact on our business directly,
but of course depending on the numbers, and this is
not sort of always easy to measure, but if up
to around maybe twenty percent of the dry bot fleet
is owned by Chinese owners, then clearly this will have
(22:51):
some impact on the markets. There will be a chunk
of the world fleet that effectually will not be trading
to the US. And it's part of this picture was
explaining earlier of you know, the world fleet is becoming
less efficient because those ships will stay away from the
US markets. They will probably also stay away from adjacent
markets because there's not much fun in having ships, you know,
(23:14):
close to the US if you cannot trade to the US.
And those ships will therefore be trading maybe more in
traditional sort of intra Asia trades, but those ships will
have less flexibility and and that means again that the
utilization of the fleet will become less efficient, so you
may have to balance longer to get you a desired
(23:37):
business if you're trying to stay away from certain areas.
Speaker 1 (23:41):
I'm sorry, so you know you mentioned whether they're owned
by a Chinese energy, but it's also if they're if
they're manufactured in China, correct or.
Speaker 2 (23:51):
Yeah, Well that that doesn't actually impact the the trades
that that we are in because this is mainly for
the larger vessels, and if you take our largest vessels
in the cape size segment, those ships rarely go to
the US.
Speaker 3 (24:08):
Okay. Ships are mainly.
Speaker 2 (24:10):
Used for trades between Africa and South America and back
to Asia, so the impact there is relatively small. And
then also in our trades in the dry boat trades,
we tend to pick up cargo loading in the US,
so all the grain exports for example, and again those
(24:32):
traits are exempted as things don today.
Speaker 1 (24:36):
Gotcha, okay, And you also mentioned earlier other regulatory issues
like emissions from the IMO. Can you talk about how
Norton is dealing with that and how you're planning to
comply with that and you know where you think, you know,
the industry is going from a fuel standpoint.
Speaker 2 (24:57):
Yeah, so we have in in Norton, we have actually
been pioneering on biofuels. I think we did the first
we were the first company to do a you know,
have a voyage that was entire fueled by biofuel and
and and since that eighteen we've been trialing various biofuel
(25:19):
types on our vessels. So so this is definitely one
area that we are we are looking at and looking
to do more of. We we like biofuel because it
can be used on existing vessels and in our industry,
of course, you've had you know, many many industry discussions
(25:40):
about is it methanol, is it ammonia, is it something else?
And and I think the fact is that it is
still you know, relatively early days. We don't know which
fuel will be available, we don't know what cost it
will be available at, and and and therefore we like
(26:02):
the buy fuel option because it's also besides not having
to build a new fleet, it's also the cheapest alternative
to the traditional bunker fuels that we're using today. And
we are gradually seeing customers showing a bit more interest
in this space as well.
Speaker 1 (26:23):
And do you think getting to zero is a reality
or is it more aspirational in terms of admissions.
Speaker 2 (26:29):
Well, it's a long term aspiration. It's a target, you know,
in twenty to fifty. I think it's not going to
happen around the corner, just around the corner. So I
think actually the as an industry, we are moving ahead
and I think it is possible, you know, but it
(26:52):
will take some time. And I think we have a
habit sometimes in the shipping industry of just talking like
one industry. But the fact is that we have many,
many different ship types in the industry, and some ships
are trading in what we call tramp shipping, which is
like tax is running around, you know, going where our
customers have at a month. And then you have the
(27:14):
container ships that are going on like bus bus services
on liner routes where you can predict where the ships
are and there it's a bit easier to build new
supply chains for alternative fuels. So, you know, I think
it will be at different speeds that the industry will adopt.
And we see this pattern already where container lines, you know,
(27:38):
there are now ordering ships that are dual fuel. But
even there I see different You know, a few years
ago it was sort of methanol that that was the
go to fuel. Then it's l G, and then more
people are now talking about ammonia. So I think the
fact is that we still do not know and and
(27:59):
that's why for us, at least in the short to
medium term, bio fuel just seems like a better option
because we can go to what zero emissions with biofuel
until we have more clarity and until we have supply
chains and fuel alternative fuels that are available, and then
(28:20):
we can start investing in new ship types at at
that point.
Speaker 1 (28:24):
Yeah great, you know you are there any other regulatory
issues that's kind of on your radar that that could
impact the industry in order?
Speaker 2 (28:35):
More specifically, I think emissions that that is the big one,
and it's the big one because it happens at a
time where the global fleet is aging, and that would
mean that there will be additional pressure on the older,
less efficient vessels at a time where there are a
lot of them that are aging. And that's why when
(28:59):
we look longer term, I think there is a picture
evolving of just not having enough ships in the global fleet,
you know, in in in trades that are growing.
Speaker 3 (29:12):
Even even even.
Speaker 2 (29:14):
If if a globalization is having sort of some hit winds,
the fact is that the global trade continues to grow
and therefore more ships are needed and and and therefore
you know there will be a need to build more
ships to replace all these older vessels eventually.
Speaker 3 (29:37):
Yeah.
Speaker 1 (29:37):
Yeah, And so just taking a couple of steps back
about Nordon, So, so who are your customers or your customers,
the exporters, the importers, How do you guys generate business
do you have your own salesforce or is it mostly
brokers kind of working with you to secure.
Speaker 3 (29:54):
Capacity for other people. Yes.
Speaker 2 (29:56):
So our customers are mining companies, trading houses, grain companies,
energy companies, oil majors. It's it's a broad range of
different types of customers. We have carried one hundred and
forty million tons of cargo over the last over the
(30:16):
last twelve months, so so it's a very fragmented customer base.
And you know they are based everywhere in the world.
We have a global office network of nineteen offices that
are located around the world. We are present on all
continents except for Antarctica. But we we we so so
(30:39):
we have saled you know what you can say, salespeople
or chartering people in close to our customers in all
these important markets around the world.
Speaker 3 (30:49):
Uh.
Speaker 2 (30:50):
And and you know, like like I mentioned earlier, we
are carrying anything from windmill blades for the windmill companies too,
you know, large sized box side shipments into the aluminium industry,
grain cargos, cement cargo's, forestry.
Speaker 3 (31:13):
Cargoes as well.
Speaker 2 (31:13):
So, so a very broad variety of anything that is
sort of a bulk cargo, anything that you do not
put into a container mm hm.
Speaker 3 (31:22):
And can you talk about.
Speaker 1 (31:23):
Neuron's capital allocation policy, like what what do you guys
focus on? Is it the buybacks, it's dividends.
Speaker 2 (31:30):
We can talk about that with a feat of foreigner vessels,
but predominantly ships that each other and even the least
vessels don't really require any capex. We we we on
acid light business and we do also investments ships, so
(31:50):
it's not like we are we are not ship a
ship owner, but it tends to be more linked to
our views on the market and whether we see any
upside of actually also owning owning the assets because we
don't need to own the ships to service our customers.
Speaker 3 (32:05):
We do.
Speaker 2 (32:05):
We do that on on on the ships that we charter.
Speaker 3 (32:09):
In terms of.
Speaker 2 (32:10):
Allocation, we have a policy of distributing minimum fifty of
our profits back to our shareholders. And we have two
avenues of doing that. One is through dividends and the
other one is through share buybacks, and we are using
both of those at the moment. And and we've returned
(32:34):
given our large profits we've had over the last of
the five years we have we've returned you know, a
lot of a lot of our profits to our shareholders.
Speaker 1 (32:44):
And when you look at the growth fleet, where the
fleet of the growth Excuse me, is it more on
that project break bulk fleet that you're planning on growing
or is it the product side or the dry box
side where you see the growth in terms of your fleet.
Speaker 2 (32:59):
Yes, So lately we've expanded into two new areas of
our business. So we've moved into cape size, the largest
dry boat vessels. So over the last couple of years
we have been investing into cape size new buildings, also
invested into more leased cape sized vessels, so we've been
building up more of a core fleet in that segment.
(33:21):
And then at the other end of the spectrum in
terms of size, we are also building a core fleet of.
Speaker 3 (33:28):
Multi purpose vessels.
Speaker 2 (33:29):
These are the vessels that are carrying a project cargo
and brake board cargoes, more versatile ships that.
Speaker 3 (33:37):
Some of the smaller vessels in our fleet.
Speaker 2 (33:40):
So we've really been focusing on building our product range
to our clients so that we can service our customers
on anything from smaller parcels and.
Speaker 3 (33:48):
All the way up to large dryboll shipments.
Speaker 1 (33:51):
And you know, so you've you've been in shipping for
quite some time. How did you initially get into the industry.
Speaker 2 (33:58):
Yeah, so I've actually worked in shipping my entire career.
So I joined the industry over thirty years ago. I
started as a shipping trainee here in Copenhagen, uh and
and And.
Speaker 3 (34:14):
One of the one of.
Speaker 2 (34:15):
The drivers for me to to getting intershipping was, you know,
to work sort of in the in the heart of
of of global trade uh and and to have an
international career. And I'm fortunate to have had the opportunity
to live many years in in Asia. I've also lived
in North America, in the US and obviously here in Europe.
(34:38):
So it's been you know, it's a great industry to
sort of connect with other parts of the world, and
I should travel and meet people from from all over
the world.
Speaker 1 (34:49):
Copenhagen is one of my one of my favorite favorite cities.
You know, is is there anything you know, as a
leader of a large transportation company that keeps you up
at night?
Speaker 2 (34:59):
You know, so I take I take a lot of
comfort in Norden's history. We have, you know, with more
than one hundred and fifty years in in in in
in the industry. You know, this company has seen you know,
its share of upturns and downturns and world wars and
and and all that so so so, so you know,
(35:22):
I'm not really shaken.
Speaker 3 (35:25):
Or disturbed at night. You know with what what what?
With everything?
Speaker 2 (35:30):
You know that that all the moving parts, you can
say that that that we have in driving a business
of of this science. What is important to me is
that we service our customers. We provide a reliable service
to them. They can count on us. This is one
of the things that stand out in our very long
(35:51):
history is that we've always honored all our commitments. This
is also why we are able to do these vacing
deals with our Japanese partners, because they trust and know
that Norton will perform no matter.
Speaker 3 (36:04):
Where we are in the market cycle. Uh and in
a very.
Speaker 2 (36:07):
Volatile industry with very high highs and and and very
low lows. The the ability to trust that Norton is
there to perform is something that that is very important
to them and very important to to us as a company.
Speaker 1 (36:25):
Okay, yeah, And I like to ask all my guests
is is there a book on leadership or the transportation
industry that close to your heart do you like to recommend?
Speaker 2 (36:34):
Well, then if I can choose two books because I remember,
you know, some time ago now I read.
Speaker 3 (36:40):
A book.
Speaker 2 (36:43):
Good to Great, which is an old sort of I
think it's it must be twenty five years old now,
but it's really about how you build sort of excellence
in a business, you know, how you how you build
enduring sort of greatness. And the book also talks about
levels of leadership and and how you you know, they
(37:04):
talk about this sort of level five leadership that I
think is quite inspiring, you know, about how how you
have this sort of mixture of you know, personal humility
in in in as a leader, but also.
Speaker 3 (37:17):
Have this sort of.
Speaker 2 (37:19):
Strong will to to to succeed, not for yourself, and
that's I think that's the important part of this book,
but but actually built you know, for the cause, you know,
so so in orderly work will our purpose of enabling
smart global trade. Uh and and that is the cause
and and and the will to drive that course and
(37:41):
our purpose is something that that is very important to me.
And and in that context I think this book actually
is is was was a great inspiration for me. The
other book I also think for me personally that has
been important was a book that was actually written about
Norton in connection with our one hundred and fiftieth anniversary,
(38:03):
called The Norton Voyage because it takes us back in history.
It explains how Norton was formed. You know, Norton back
in eighteen hundred and seventy one was actually formed on
the back of two new technologies, you know, steamships and
telegraph So the ability to communicate and to be at
the forefront of both technology and propulsion, I think is
(38:28):
that are some direct links to some of the dilemmas
and opportunities.
Speaker 3 (38:32):
That we're looking at today in Norton.
Speaker 2 (38:35):
So actually, I think that book is quite quite inspiring
to read as well.
Speaker 1 (38:39):
We'll have to take a look at THEI the Nordon
Voyage book when I get a chance. Well, yeahn I
really want to thank you for your time and your
insights today.
Speaker 3 (38:49):
This was great.
Speaker 1 (38:50):
Yeah, thank you very much, and I want to thank
you for tuning in. If you liked the episode, please
subscribe and leave review. We fined up a number of
great guests for the podcast, so please check back to
hear conversations with C suite executives, shippers, regulators, and decision
makers within the freight markets. Also, if you want To
learn more about the freight transportation markets, check out our
work on the Bloomberg Terminal at Bigo and on social media.
(39:13):
This is Lee Clasgow signing off and thanks for talking
transports with me.
Host
Lee Klaskow
Popular Podcasts
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
The Clay Travis and Buck Sexton Show
The Clay Travis and Buck Sexton Show. Clay Travis and Buck Sexton tackle the biggest stories in news, politics and current events with intelligence and humor. From the border crisis, to the madness of cancel culture and far-left missteps, Clay and Buck guide listeners through the latest headlines and hot topics with fun and entertaining conversations and opinions.