Making headwinds in Hamburg
Marine Money’s 17th Annual German Ship Finance Forum showcased some of the innovation currently at play in the shipping world.
You cannot go far in the shipping world today before coming up against the “d word”: “disruption”. The advent of new technologies, coupled with geopolitical developments and environmental concerns, means that the industry today looks incredibly different to how it appeared 10 years ago, with companies in the sector now having to adapt their practices in order to match up to the shipping environment as it currently stands.
Yet, despite this being an unpredictable, tumultuous era, those with an idea for a service and the know-how have the potential to make a success of a business venture in the sector. At Marine Money’s 17th Annual German Ship Finance Forum, held in Hamburg in early March, new companies, all connected to Hamburg in some form, were given the opportunity to make elevator pitches to the assembled audience about what they could offer shipping customers. Tasked with describing their value propositions in three minutes or less were digital maritime investment platform Marvest, blockchain-underpinned marketplace HHX.blue, vessel auction website VesselBid and digital ship-trading platform Shipstock/Demogate.
First on the agenda was Marvest. The Hamburg-registered company is working, according to co-founder and managing director Nikolaus Reus, on “a digital investment platform for professionals and for retail investors to invest again into shipping assets”. Mr Reus said the collapse of the Kommanditgesellschaft (KG) funds markets, with a significant form of capital having been eliminated for shipowners, got the company thinking.
“We were thinking about an idea: how can we bring again shipping projects [to] respective investors — and in what kind of way and with what kind of product?” he explained. “So we came up with an idea to develop a digital investment platform which is based on an algorithm that standardises and digitalises the reporting process, the investor relation process, and especially — this is where we add the value — the investment process.”
New companies, all connected to Hamburg in some form, were given the opportunity to make elevator pitches to the assembled audience
After a due diligence process, an asset gets presented on the Marvest platform with all relevant details, including the period of the loan, the volume the company raises for the shipowner and the product. The firm has developed two products: a fixed-interest loan, and a loan with a lower fixed interest, but with an equity kick on top. Mr Reus said the latter option gives flexibility to the shipowner and offers different investment strategies for a company’s investors. Marvest wants to target smaller, niche sectors: for example, the container-feeder segment, the bulk handysize and supramax segment and also, MPP, C Types and F Types.
Next on the agenda was HHX.blue, whose also wants to offer “new solutions for ship finance”. Headquartered in Hamburg, the start-up is still being established, but the company claims that the organisation’s goal is “to connect borrower and lender in the maritime industry in the easiest and most-efficient way”. Pitching the company to the audience at the Marine Money Forum in Hamburg, Olaf Danckwerts, a partner in the firm, said that the company wanted to create a market or digital loan platform that permits, in the first instance, access for shipowners for new lending capacity. The second step is letting investors obtain proper access to the shipping sector based on a high quality of data.
“The market will be able to offer for the shipowners, and also for the investors, a reliable process, high market-transparency on both sides — and all this would take place on a bankable standard, so therefore we will create an expert network. This will be highly efficient, and, of course, it will cost less than comparable financial advising,” said Mr Danckwerts.
The third firm to give a pitch at the Forum was VesselBid, an associated company of NetBid Industrie-Auktionen (NetBid), or NetBid Industrial Auctions. Also headquartered in Hamburg, NetBid is an online auction house that hosts sales and auctions of used machinery, equipment and entire production infrastructure. According to the VesselBid website, NetBid’s permanent interest in expanding and adapting for customers meant it set up VesselBid to sell and auction ships. Most of the second-hand vessels on offer have come on to the market because of bankruptcies or financial troubles — though direct sellers are welcome to approach the company and make use of its knowledge and network.
“Our business model is relatively simple: we have online sale and auction of vessels — containers, bulkers, tankers and general cargo multipurpose vessels,” said NetBid chief executive and VesselBid partner Clemens Fritzen, explaining the company. “But, for sure, we are not a pure e-commerce company. The concept is to extend our successful business model … by combining brokerage, market expertise and IT technology. That’s our unique selling point.”
VesselBid said that NetBid has collaborated with an unnamed sale and purchase broker and a leading German maritime lawyer for the new company, with the concept being to offer transparent vending and pricing for sellers and buyers. At the Forum, Mr Fritzen said that the subsidiary’s auctions have greater sale prices because of a transparent bidding process and that the company is not backed by any shipowners or banks. Price bidding only takes places online, visible to both buyers and sellers. During his pitch, the NetBid chief executive said that test auctions have taken place and that, recently, VesselBid had its first positive test-run, representing a German financial institution. At the time of writing, a containership was up for sale on the ship auction site.
The final pitch was given by ShipStock/Demogate in a presentation given by Henning Martin, co-founder. Mr Martin described ShipStock as “a digital transformation project and shipbroking platform in the sale and purchase segment that offers sellers full control and transparency of the sales process”. Demogate is an online tool for buying and selling old container vessels.
“As ShipStock and Demogate, we are developing a variety of very exciting tools, like a contract-editor, a fleet valuation management system and an auction tool for demolition sales, as well as further analytical tools and financial key performance indicators that you can easily monitor on the platform and that will increase the quality of your decisions,” he said. “So for us, it’s not about changing things, it’s about improving things and making your life easier and your business more efficient.”