Newport Shipping in Ship Repair Game-Changer
U.K.-headquartered Newport Shipping Group has appointed a new executive team and refocused its business proposition to provide comprehensive drydocking, repair services and financing to the global shipping industry.
A key element of the company’s new service portfolio is a unique ship repair financing proposition, whereby shipowners opting to repair their ships at one of Newport Shipping’s 13 drydocks can stagger 60 percent of their drydocking payments into 12 or more equal monthly installments.
With only 40 percent of total maintenance costs due upon the vessel returning to service, the company’s financing solution is an undeniably attractive proposition to shipowners and shipyards alike, as Newport Shipping newly appointed Chief Executive Officer Erol Sarikaya explained.
“We offer a comprehensive ship repair service enabling shipowners to minimize working capital outlays and take advantage of our global network across the Pacific and Atlantic trading zones. The benefits are clear as 60 percent of total drydocking and associated maintenance costs are paid through subsequent vessel operations.
Traditionally, when a vessel drydocks, up to 50 percent of drydocking costs are paid over a two or three-month period. Sometimes, shipyards may require all drydocking costs be paid before the vessel returns to service, while spare parts suppliers and equipment manufacturers are usually unable to extend such credit terms.
Roy Yap, Newport Shipping’s Chief Operating Officer, said: “Our credit payment system covers all maintenance costs in addition to drydocking costs, such as spare parts, paint, specialist works, and equipment retrofits, such as a ballast water treatment systems (BWTS) or scrubbers, which can in some cases comprise the majority of a vessel’s total maintenance budget. Newport has a unique offering in the repair market.”
For example, a typical Supramax vessel may have total maintenance costs of $600,000, but Newport Shipping’s system frees about $360,000 of this expense through subsequent monthly installments of $1,000/d over 12 months.
“It is important to highlight here that we also arrange for the timely delivery of equipment and spares to the yard,” added Yap. “Since any delays in the supply chain increases drydocking time, resulting in increased costs for the owner, we provide shipowners with an effective, cost-efficient and reliable approach. By procuring the delivery of spare parts prior to vessel arrival, we help shipowners eliminate unnecessary off-hire or unbudgeted cost variations.”
Newport Shipping’s Chief Risk Officer, Colin Manchester, said: “I see our product having excellent value for our customers across all shipping segments. By deferring the majority of ship repair costs, we reduce cost pressures that often limit otherwise needed repair works during weak freight-rate environments, preserving liquidity for other needs.
“Unlike other yards that typically provide 90-day credit on just their drydock works, we provide credit terms beginning at 12 months, and based on a shipowner’s underlying drydocking and ship maintenance requirements. This allows for the shipowner’s operational expenditure to be spread out over a given period, which can then be better covered by charter hire earnings.”
Sarikaya added: “Yes, there is an element of industry disruption in all of this, but a change to the way in which ship repair and retrofit projects are executed is long overdue. It is Newport Shipping’s mission to provide shipowners and ship repair yards with a comprehensive service that allows them to benefit in what remains a difficult and competitive market.”
The products and services herein described in this press release are not endorsed by The Maritime Executive.