James Brewer

Tempers are fraying, as at least four major ship charter electronic trading platforms prepare to launch.

Only a handful out of at least 100 websites are filtering through to offer what is said to be a serious breakthrough into the market.

Site pioneers already face the risk of making a double leap: within the known world of shipping, and into the untested world of e-solutions.

Now they have begun the task of trying to pacify and convince one of the key groups of potential users - and perhaps rivals - the shipbrokers.

Ideally, the two should be good neighbours. Instead, as has been revealed in the last few days, the knives are out.

Who wants to live and work in a charterer's paradise? Question the brokers.

Who wants to go on piling up costs, while other industries use the march of the internet to slash their outgoings? Retaliate the dot-kings.

Shipbrokers used a recent industry forum to air their fears:

• Power will be in the hands of the charterers. If the big charterers decide to use the sites, everyone else will have to follow;

• The platforms must be transaction mutual;

• Site developers may lack knowledge in some key ship type areas;

• Site finance details remain hazy;

• Transaction fee scales have yet to be revealed;

• The charges will rob brokers of their full due

• They may adopt the call centre syndrome, under which it is impossible to have a constructive dialogue with a human being;

• Confidential information needs watertight security;

• If the sites prove unviable, they will have to try to consolidate their varying approaches;

• Launch dates in several cases have yet to be finalised.

Shipbrokers got in the first shots during the London conference of their protection and indemnity association, the International Transport Intermediaries Club.

Emboldened by the critical stance of one of their most articulate leaders, Peter Kerr-Dineen of Howe Robinson, several made clear their hostility when they got the chance to question the innovators.

"Do they really have a product?" a sceptical listener scoffed, in a secretly-scribbled note to the person sitting alongside, during one presentation.

Promoters of the new ideas were polite and defensive in response to the onslaught - as keen as most sales people to avoid offending potential customers.

Peter Rygaard Andersen, formerly of the Baltic and International Maritime Council, who is launching ShipDesk, admitted that e-commerce was still surrounded by a degree of mysticism.

With the technology available and emerging, all parties would have a better overview of the market and be able to make better decisions, he said.

He quoted approvingly from a Clarkson publication that brokers should be the first to embrace the internet.

Mr Andersen said the introduction of web-enabled processes would speed the pace of structural change, and focus businesses on value creation.

Robert Lorenz-Meyer of Cargobiz.com said that of 20 people in his enterprise, 16 were experienced brokers, and "we shall be adding people who are shipbrokers, rather than IT".

He forecast that websites would become a "conversational infrastructure" for shipping, with low cost access at a fraction of the cost of telephones or faxes. They would save on some of the more mundane tasks.

Michael Elsom, explaining the plans for a Baltic Exchange system, said brokers were wary of using sites dominated by non-industry people which might be publicly floated and exposed to the vagaries of Nasdaq or the London Stock Exchange.

Mr Elsom said the Baltic Exchange, as a mutual, was free from pressure to make a big profit from its venture.

In any event, he said: "I do not believe there are vast sums of money swimming around in shipping.

"There is a need for a virtual exchange, and it will become a reality in six to 12 months."

Replying to questions, backers of the schemes said there would need to be rules to prevent unscrupulous traders exploiting them.

They further denied that they had begun to market their wares as "broker friendly", only after some of the big oil companies and commodity trading houses spurned their overtures.

One broker acidly said of the new companies: "I think they are now expecting us to market their products to our principles."

Tony Dixon, of broking house Seascope Shipping, referred to the pitfalls in electronic post fixture.

"Cheap post fixture charges may not prove commercially viable, for what potentially can be the most expensive element of the broking format to operate - especially when things go wrong or vary from the norm." he warned.

He wondered if post fixture options would be added to fees, "rather like a motoring break-down service".

"Do you go for the basic roadside service, the get-you-home service, the choose your repair garage option, the hotel option? Will if cost you more if you pick the wrong one and have to upgrade later?" he challenged.

ShipDesk and Cargobiz are seeking to launch towards the end of 2000. Another leading contender Levelseas, has announced a November 6 start. The Baltic Exchange plans to go ahead in April 2001.

Lloyd's list Seven Days, October 7, 2000

Thanks to Lloyds list for use of their press coverage. Access their site by clicking www.lloydslist.com