It seems like a cliché, but this time it's true. “Between the pandemic, market uncertainty and technological challenges, we can only navigate by sight”. Word of Paolo D'Amico, president of the D'Amico Navigation Company, one of the first global groups in dry cargo maritime transport, which he leads together with his cousin Cesare. An exceptional witness, not only because he heads a fleet of 50 owned vessels and 160 under management including bulk carriers, tankers and container carriers, but also for the experience accumulated as president of Intertanko, the world association of independent tanker owners.
In short, an exceptional testimonial for understanding the state of health of world trade in the middle of the road to recovery amidst bottlenecks, threats of inflation and the unknowns of environmental revolutionlargely still to be defined. “Up until now, from the discovery of the wheel onwards – he jokes but not too much – first there were the innovations and then we thought about their use. This time, on the contrary, we first set ourselves the goal of eliminating pollution. And now it's time to reach the goal. But how to do it, given the costs, we still don't know."
But before the future unknowns, what is the current state of the sector between lockdowns, traffic jams in ports, accidents such as that of the Suez Canal?
“We need to distinguish. The world of containers, after last year's fall in activity, is at the center of a formidable rebuilding of company stocks, because containers carry both finished goods and semi-finished products. The lack of new ships, which will arrive in a year's time, contributes to making the offer more complicated, as does the increase in fuel: at these prices, no shipowner wants to force the speed of ships by increasing consumption. In short, the growing demand also creates problems”.
Speaking of problems this year was the incident that blocked the Suez Canal and traffic jams in Chinese ports. Have you been hit?
“Luckily for us, no. The Suez accident it was less painful than feared because the blockade lasted only two weeks in the face of much worse forecasts. The problems of the Chinese ports are more serious: ports where containers were loaded in a couple of days were forced to lengthen the times up to 15-20 days due to various problems, linked in various ways to the pandemic and how it affected the work cycles. Now the situation is slowly normalizing, but the aftermath will last until the end of the year”.
This applies to tankers, those owned by D'Amico International Shipping. But can the same be said for dry?
“No, this is a market dominated by Chinese demand, literally hungry for raw materials such as coal or soft commodities such as soybeans or corn. The recovery in this case is certainly strong, unlike what happens for oil”.
Yet crude oil prices have recovered.
“We are still living in a troubled situation. There are too many ships in operation compared to the demand. Consumption is still significantly lower than in 2019".
In summary: good prospects, but between bottlenecks and post-pandemic problems for containers, strongly accelerating dry. Tankers still laid up. Is this a situation that encourages mergers or other financial transactions?
“Something is moving, but not too much. The world of shipping is not prone to merger activity. It is a closed environment, dominated by families who have a long presence on the market and who move with great prudence”.
Also because investment cycles are very long. Or not?
“A ship is bound to pay for itself in twenty years. That said, we had the merit and good fortune to close the $750 million investment plan in September of last year, with the last of 22 new vessels taken delivery. These are ships that consume 30% less than previous models, and are already in line with the IMO 2030. But we already have to deal with the 2050 objective, i.e. the elimination of C02. As far as forecasts are concerned, it is difficult to expose yourself too much. The picture changes very quickly: a month ago I would have been more optimistic, then the Delta variant took care of changing the plans which complicated the holiday plans and forced to review the programs, starting with tourism. Today Fiumicino serves 60-70 flights a day between arrivals and departures. In August, barring surprises, it will rise to 150. But the airport in normal times serves 700 operations".
What is your Italian turnover?
“A little more than zero. We operate from four bases: London, Monte Carlo, New York and Singapore. It is not a choice, but this is how the evolution of the business wanted”.
Has Piazza Affari given you any satisfaction?
“I really appreciate the responsible attitude of investors in a difficult year for global trade. First the Covid which took the entire sector by surprise, which was already coming from a difficult year for dry. Then the oil difficulties, complicated by the tug of war between Russia and Saudi Arabia. Let's hope now that we don't have to face a crisis in the Yellow Sea. But the title, all in all, held up. Thanks also to the work of our CFO and the investor relator”.
You mentioned the goals for 2050, a distant appointment...
“We are faced with a great puzzle: to develop new types of ships that do not pollute within a precarious financial framework, because all economies are full of debts. It is not ideal for making investments that promise to be very expensive. But it is a challenge that engages us all, from large countries to private individuals".
What are you doing?
“We are experimenting with bio-fuel of non-food origin, based on agricultural waste with the aim of recycling waste with positive effects on cities. A good example of circular economy. But it is evident that the gigantic challenge requires the commitment of the States. We will switch from oil to natural gas, then to other forms of power”.
Hydrogen?
“I don't believe in it for our sector. It would take tanks bigger than ships. The ammonia solution seems more convincing to me”.
