10 Questions for McQuilling Brokerage, Mike Marco and David Saginaw Presiding

1. The VLCC market has been in the doldrums all year and regardless of improved scrapping; owners are still taking the low rates given to them. Why is this so?

Saginaw: The short answer to this question is that, because of a highly fragmented ownership and effective control profile of the VLCC fleet that precludes any sustained influence of tonnage supply on the marketplace, owners have little power to stipulate what rates are “given” to them by the market. They therefore can only decide to operate at these levels or stop operating, and incur some level of expense for “parking” their vessels. Depending on how long they plan to park, varying levels of not-insignificant costs will be incurred.

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