The perfect system

With roots dating back to 1908, privately owned shipping company Gestion Maritime has grown to become a prominent global tonnage provider that has remained fully independent and capable of a prompt response to market changes. The family founder Andrea Corrado needs no introduction. He was one of the largest shipowners in the first half of the 20th century, with a fleet size of 35-40 vessels at the peak. After scaling down in the 80s with Grandson Franceso Corrado, the 90s saw a resurgence, and with the hiring of current CEO Danilo Fumorola in 2002, the company has slowly and organically expanded its operations. The company now offers a comprehensive range of high quality shipping and tonnages for the worldwide seaborne transportation of cargoes; these include iron ore, coal and grains, bauxite, fertilisers; steel products, refined oil products and easy chemicals.

A trusted name in a changing world, Gestion Maritime’s reputation as an innovative, customer-centric and performance driven firm has resulted in it becoming an increasingly more competitive shipping company over recent years, during which it has consolidated its position in the dry cargo transportation market. However, the company also re-established a presence in the liquid bulk sector in 2015 with the addition of two new build medium range (MRs) tankers that are under its direct management. Able to handle both dry bulk and liquid, the company not only strengthened its capabilities but also boosted its fleet with high-tech, cutting-edge vessels. While the two MRs are working on a long-term contract for top market European operators, Gestion Maritime also upgraded its whole team and reviewed the management system in order to meet the demands of customers.

Another example of the company’s commitment to serve clients in the best possible way can be seen in the retrofitting of fuel saving devices and equipment on its vessels, which means voyages are optimised and margins are maximised in response to charterers demanding more speed/ cons ratios. Furthermore, the company has successfully obtained ISO 5001 certification for energy management on board and has been actively working on the reduction of CO2, NOx and SOx emissions over the last few years; an area of the business that will continue to improve in the future.

Since going through a process of disposing aged tonnages in the last two-and-a-half years, Gestion Maritime presently has six dry bulk vessels in addition to its two oil tankers. This fleet is comprised of Dragon, Ines Corrado, Elena, Francesco Corrado, GB Corrado and Jupiter, which were added to the company’s fleet in May 2012, February 2012, February 2009, May 2008, March 2008 and June 2006 respectively. While the 81,389 DWT Dragon has a D+ Rightship emission rating and the 81,272 DWT Ines Corrado has a D rating, the remaining dry bulk vessels have an emission rating of B. This rating, based on the vessel’s performance, proves Gestion Maritime’s drive for energy efficiency and management on board has delivered strong results.

Since previously being featured in Land, Sea & Air magazine in February 2017, Gestion Maritime has continued with its focus on the optimisation of vessel portfolio management with the formalisation of its asset play and vessel employment strategy – for which it has been collaborating with Maritime Capital Partners, an investment manager and maritime analytics company – over the last 12 months. “I have personally been exploring possibilities on an in-depth but ad-hoc basis with Richard Stephenson, CEO of Maritime Capital Partners, for the last four years. We have always believed that shipping portfolios should be both scaled and managed using techniques developed in financial portfolio management, with the key driver being the cross-industry mapping process,” explains Danilo Fumarola, CEO of Gestion Maritime. “As such, we have co-developed and implemented advanced internal management processes, from cycle identification, entry point, strategies, chartering, credit and market risk management and exit strategies. This has meaningfully enhanced our recent performance and we thus expect to fully capitalise on the oncoming market upswing.”

Continuing to elaborate on market developments, Danilo continues: “The lack of bank financing for new vessels is a very supportive trend in the market, particularly for dry bulk. Because we do not use excessive leverage and are considered a ‘good credit’ company with a 110-year track record of performance, we see this as a very positive development. Excessive bank financing for new builds and the evolving business models ship-owners towards the exit, order and manage has led to a massive expansion in fleet size; this development explains the recent downturn in the market. Distressed loan sales in general and wholesale bank withdrawals from the market has reduced the probability for a debt filled expansion of the global fleet; as such, we are confident that the market is well poised for a meaningful upswing. However, though passively buying vessels will likely result in modest, ‘beta’ gains, we expect to meaningfully outperform peers due to our systematic approach.”

Indeed, with a superior, data driven systematic approach to vessel portfolio management, the company is in a strong position and, for the first time, is considering external investment capital as it develops a structure that would fully align interest between itself and its co-investors. This decision comes after the company’s decision to strengthen its position in the dry bulk market following a new build programme that will allow Gestion Maritime to better serve its customers’ demands for younger and more state-of-the-art vessels. “We have been following a new build project for kamsarmax type vessels, which will enable us to reduce the average age of the fleet and provide customers with more modern tonnages commending premier over our peers due to superior commercial performance and compliance with new environmental regulations,” says Danilo.

Moving forward, the company will focus on the development and streamlining of its systematic approach to asset plays and vessel employment strategy as it uses increasingly intensive data analytics techniques. Looking further ahead, Gestion aims to extend its expertise to institutional investors that are looking to diversify their existing investment portfolios away from the main asset classes. “Because we plan on being a co-investor rather than a pure manager, institutional investors have indicated a strong interest in collaboration,” Danilo concludes.

Gestion Maritime
Specialists in ship owning and ship management
Celebrated 108 years in operation in 2016
Developed a data-driven systematic approach to vessel portfolio management