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| Lauritzen Fleet Management Senior Vice President Claus Pavar After strategic consideration during 2004, JL has decided that ship management for the owned fleet will be done by way of ship managers either internally through Lauritzen Fleet Management or externally where this suits overall business activities. With this organisational set-up, JL will always be able to benchmark costs and skills while preserving in-house expertise, thereby securing optimal ship management functions for its fleet. Overall responsibility for ship management of vessels is placed with the individual business areas. In addition to full technical and crew management, Lauritzen Fleet Management offers a wide range of support services in relation to dry-docking and newbuilding supervision, special projects, insurance, quality assurance, technical purchasing and warehousing and systems for controlled atmosphere (CA). With effect from 1 September 2004, Lauritzen Fleet Management was reorganized to create a more flat organisation and reducing the staff by about 16%. The new structure has also been aligned with the individual business areas’ needs for fleet management expertise. At the end of 2004, Lauritzen Fleet Management was responsible for technical and/or crew management of one product tanker, nine reefer vessels and 18 gas carriers. It further managed 10 CA units and provided procurement, warehouse and forwarding management for 35 vessels. Crewing is managed in close co-operation with three crew agencies supplying our international crews: OSM, Crossworld and V-Ships. The managed vessels fly quality flags such as Danish, British (IOM), Hong Kong and Bahamas and are all manned with a complement of experienced and qualified officers and ratings of Filipino, Polish, Croatian or Danish nationalities. Three reefer vessels were delivered to new owners and managers early in 2004. In September, Mediteranska Plovidba became a sub manager for two bareboat chartered vessels from NYK Reefers and LauritzenCool, respectively. Finally, JL re-entered the product tanker segment and took delivery of a product tanker newbuilding in November. A few vessels encountered damage during the year, however Lauritzen Fleet Management managed to limit the average unexpected off-service for the fleet to 0.9% of available ship days, compared to 0.7% in 2003. The target for 2004 was 0.8%. The International Ship & Port Facility Security Code entered into force on 1 July 2004, and all vessels in Lauritzen Fleet Management’s care obtained their International Ship Security Certificate well before deadline and the following world-wide implementation process passed without any complications for our vessels. All vessels under Lauritzen Fleet Management are ISM certified (The International Management Code for the Safe Operation of Ships and for Pollution Prevention) and JL owned vessels regularly calling at US ports have also received their Certificate of Eligibility in recognition of compliance with the requirements of the US Coast Guard’s Qualship 21 Scheme. Lauritzen Fleet Management handled more than 8,000 orders during 2004, all processed through Lauritzen Fleet Management’s purchasing system, which handles purchase orders electronically from the initial requisition on board a vessel, through inspection, approval and enquiries at suppliers, placing of orders and finally subsequent invoice control. Lauritzen Fleet Management handled 700 shipments or 700,000 kg supplies and spare parts including goods for two external customers for vessels trading world-wide. 97.9% of all shipments arrived on schedule. Environment and safety Protection of the environment, safety at sea and a high degree of maritime security have top priority at JL. Lauritzen Fleet Management acknowledges the impacts sea transport can have on the environment and is committed to maintaining a high standard of environmental protection for all activities whether ashore or at sea. JL’s environmental account system is based on the ISO 14000 Standard. IMO (International Maritime Organisation) has sanctioned a number of comprehensive regulations and conventions covering a range of matters such as prevention of pollution, maritime security and safe operation of ships and standards of competence for seafarers. To ensure these conventions are observed, a considerable number of audits and inspections are carried out around the world, not only by Lauritzen Fleet Management’s superintendents and Flag States but also by Port States and customers’ vetting departments. Although Lauritzen Fleet Management is fully committed to protection of the environment, a defective oily water separator led to an oil spill from one of JL’s vessels. Another vessel was involved in a collision and although as the stand on vessel, she did everything possible to avoid collision in accordance with the International Regulations for Preventing Collisions at Sea, it was in vain. The incident had no environmental impact and no people were injured. However, any incidents that could pollute the maritime environment, lead to accidents or do other damage or lead to loss of valuable items are carefully examined and analysed, with the conclusions and recommendations being distributed to all vessels to avoid such occurrences in the future. Where there is a lesson to be learned, Lauritzen Fleet Management makes sure to learn it and spread this knowledge throughout the Group. Again in 2004, JL vessels voluntarily participated in the AMVER System to help make the seven seas safer. One vessel was involved in a rescue operation, saving the lives of four people. Our Scandinavian Reefer was selected as the winner of the International Rescue at Sea Award for 2004. Energy consumption In 2004, total energy consumption in kWh/ton-mile used for propulsion and power production increased considerably compared to last year. This was especially true for the reefer fleet, whereas consumption increases for gas carriers were more moderate. The changes were due to current trading patterns and consequently increased bunker consumption. Compared to the gas carriers, the reefer fleet in general has higher energy consumption due to refrigeration and controlled atmosphere plants.  Emissions CO2 emissions increased. Emissions per ton-mile can be reduced by minimum ballast ratios and better cargo utilization combined with optimal engine performance, best possible route planning and clean underwater hulls/propellers. Figures on the emission of sulphur and nitrogen oxides (SOx/NOx) are based on the oil quality, actual consumption and type of engine concerned. However, availability of low sulphur oil is limited. About 50% of the gas carrier fleet uses marine diesel oil (0.2% sulphur), whereas the entire reefer fleet uses heavy (2.5% sulphur) fuel. |