Decisions That
Move Markets

Decision Engine runs all three paths: (1) Sell Now — net proceeds vs scrap value, opportunity cost. (2) Drydock + Extend — IRR on $3.5M capex at P25/P50/P75 BCI scenarios, break-even TCE required to justify spend, payback period, CII rating post-drydock. (3) Sell Post-Drydock — incremental value from class-fresh certificate, market timing risk, insurance carry cost. BOTTOM LINE: numbered directive with trigger — the BCI level at which drydock becomes NPV-negative.

Decision Engine runs vessel-by-vessel: CII attained rating (gCO₂/dwt·nm), gap to C-band, slow-steam TCE penalty (speed reduction 1–2 knots, revenue loss vs fuel saving), scrubber retrofit IRR vs fuel spread duration required, EOPL/scrap value vs trading value. Fleet-level matrix: REMEDIATE / EXIT / MONITOR per vessel. Timeline with CII deterioration curve and enforcement trigger dates.

Decision Engine models both: Newbuilding IRR — delivery lag cost, orderbook queue risk, speculative fleet, BIMCO 2024 clause leverage, green premium on charter. Second-hand IRR — immediate cash flow, drydock timing, CII trajectory (7-year vessel at BPI P50), residual value decay curve. Side-by-side: break-even BPI required, leverage sensitivity at 60% LTV/65% LTV, point at which newbuilding NPV exceeds second-hand NPV. DIRECTIVE: which path wins at current cycle position.

Risk Analyst delivers: DSCR table across all four rate scenarios with LTV columns and covenant flags (🔴🟡🟢), break-even BCI calculation, correlated stress DSCR (the scenario that kills the deal), DSRA adequacy check — months of cover vs P25 scenario, covenant breach timeline with cure period analysis, credit rating equivalent (BB− / B+) with implied spread vs SOFR, and explicit IC recommendation: APPROVE / DECLINE / CONDITIONAL with structural requirements.

Risk Analyst delivers: parametric and historical simulation VaR at 95% CI and 99% CI in absolute dollars and % annual revenue, CVaR/Expected Shortfall, portfolio decomposition by asset class with diversification benefit (r≈0.68 between Capesize/VLCC), route premium breakdown per leg (fuel +14 days × $590/MT, war risk 0.3–0.8% of hull value, transit time revenue loss), maximum drawdown duration, Suez normalization sensitivity — P&L swing on 6-month vs 12-month re-opening, LP-level reporting summary.

Risk Analyst structures: capital release calculation (sale price vs book value vs tax basis), hire rate back-calculation for target IRR to lessor, effective cost of funds to owner (comparing hire cost vs bank margin), covenant test post-transaction (net debt/EBITDA before/after), purchase option pricing (Black-Scholes vessel value optionality), CII obligation transfer language flag, cross-default risk on existing facility, and recommendation on whether transaction enhances or damages overall capital structure.

Decision Engine triggers §19 Binary Rejection Protocol: sanctions exposure level exceeds threshold — CONDITIONAL STOP pending legal path. Analysis: OFAC designation timing vs voyage completion ETA (window to complete lawfully), 50 USC § 1705 criminal exposure on owner if completing post-designation, P&I Club Rule 54 implications (coverage withdrawal on sanctions breach), 4 legal paths — (1) complete before designation date + OFAC general license check, (2) divert to neutral port + cargo discharge, (3) apply for OFAC Specific License, (4) invoke CP force majeure clause. §13 Director personal liability section triggered: D&O exposure, VSD (voluntary self-disclosure) 50% penalty reduction window.

Decision Engine models each vessel: current Russia-leg TCE vs market equivalent (clean Baltic product alternative, North Sea crude), break cost calculation (demurrage, cargo release, charter party termination provision), alternative fixture availability and TCE delta, vessel redeployment route and timeline. Fleet-level P&L impact: worst case (immediate exit, market trough), base case (60-day managed exit), best case (fixtures timed to market strength). War risk premium removal benefit offsetting rate delta. DIRECTIVE: exit sequence by vessel, starting with highest sanctions-risk/lowest TCE-cost.

Decision Engine activates CRISIS tier — IMMEDIATE ACTIONS in sentence one. Analysis: Singapore Admiralty arrest procedure (O 70 Rules of Court), sheriff sale timeline (typically 5–14 days, not 24 hours — correct misunderstanding), bail options (P&I Club Letter of Undertaking vs cash bail vs Club letter), owner negotiation leverage (bank prefers loan restructure to depressed sheriff sale price), crew welfare obligations (MLC 2006 — wages protected, repatriation duty), flag state notification requirement, parallel tracks: (1) P&I LOU application — fastest path to release, (2) direct bank negotiation with standstill agreement, (3) refinancing emergency bridge from alternative lender. Escalation timeline with hard deadlines.

Decision Engine analyses: NYPE 2015 Clause 17 — off-hire trigger (vessel 'lost to charterers' due to breakdown), attribution test (owner's latent defect vs charterer's operational fault), burden of proof (charterer must prove vessel in efficient state at delivery), engine log analysis framing (MCR exceedance + consequential damage chain), Legal EV calculation: P(owner wins attribution defence) × $313,500 vs P(settle) × settlement floor, LMAA arbitration cost estimate ($80–120k), comparable awards on similar attribution disputes. DIRECTIVE: pursue partial off-hire defence + initiate without prejudice settlement at $157,500 (50% of claim) with counterclaim for MCR damage repair.

Decision Engine analyses: GENCON deviation clause (liberty clause scope vs reasonable deviation), JWC breach area designation status on deviation date (critical: if not JWC-listed at time, owner's force majeure claim weakens), SCOPIC/LOF implications, owner's SOLAS V duty of care vs charterer's route order authority, proportionality test on $180k claim, force majeure clause triggers (GENCON 1994 Clause 19), freight pre-payment vs freight at destination impact. Legal EV: P(charterer liable for deviation costs) at 35–45% if no JWC designation, owner's counterclaim for security risk premium. DIRECTIVE: negotiate deviation cost share 60/40 charterer/owner with deviation notice obligation inserted in charter addendum.

Decision Engine provides: current TD3C WS rate and TCE equivalent, 12-month TC market (Baltic Exchange fixture data, recent comparable charters), FFA forward curve for Q2/Q3/Q4 — contango vs backwardation signal, scrubber premium quantification ($2,500–4,000/day at current HSFO/VLSFO spread), 2016 vintage discount vs eco-vessel (age penalty on TCE), charterer demand analysis (major traders vs oil majors vs state companies — appetite by vessel spec), negotiation levers: scrubber value, delivery port flexibility, redelivery range, and floor rate below which trade alternative (spot voyages) generates higher TCE. DIRECTIVE: open at $X, floor at $Y, counter tactics if charterer anchors low.

Academy delivers a phased curriculum calibrated to junior analyst level: (1) TCE definition — Time Charter Equivalent, the common currency of ship economics; (2) Formula walkthrough — (Gross Freight − Port Costs − Bunkers − Canal Fees − Commissions) ÷ Voyage Days; (3) Worked example with real numbers (Rotterdam-Singapore, Panamax, current market); (4) Why TCE drives fixture decisions — comparing a spot voyage vs TC offer on the same basis; (5) Key variables — bunker price sensitivity, speed, port costs by geography, canal fees; (6) Common pitfalls — why comparing freight rates without TCE calculation misleads; (7) Practice problems with answers. Adaptive: follow-up questions trigger deeper content.

Academy delivers structured curriculum: (1) CP taxonomy — voyage vs time vs bareboat, what each transfers (risk, control, cost); (2) GENCON — voyage charter workhorse, freight, laytime/demurrage, NOR, Clauses 8/9/16/19; (3) NYPE — time charter standard, Clause 8 employment/indemnity, Clause 13 speed/consumption, Clause 17 off-hire; (4) BPTIME 4 — tanker TC, oil major provisions; (5) Shellvoy 6 — voyage tanker charter, Worldscale; (6) Barecon 2017 — bareboat/financial lease; (7) Addenda and rider clauses that change everything. Each form: who uses it, commercial purpose, 3 clauses every executive must know. Examination-style practice questions.

Academy delivers a maritime finance primer for board-level non-specialists: (1) Vessel as asset — NAV calculation, depreciation, residual value; (2) Ship finance structure — mortgage, LTV ratio, typical covenant package (DSCR, minimum liquidity, minimum hull value); (3) Income statement — TCE as top-line metric, daily opex benchmark (Opex per day by vessel type), EBITDA in shipping context; (4) Cash flow — why EBITDA ≠ cash in shipping (drydock cycles, DSRA requirements); (5) Key board questions: fleet CII trajectory, covenant headroom, DSRA adequacy, charter cover %, counterparty credit exposure; (6) Red flags to watch: off-hire above 3%, consecutive DSCR misses, deferred drydocks. Board-ready in one session.

Operations Desk activates CRISIS tier: IMMEDIATE ACTIONS in sentence one. Nearest emergency anchorage options with ETA under tow, Singapore tug availability and ETA (4–6 hours at 150nm), Class notification requirement (within 24h for machinery casualty), flag state GMDSS report, P&I Club 24h emergency line (notification within 24h to preserve cover), charterer notification obligation under NYPE/CP form, salvage risk assessment (Force 7 drift calculation before tug arrives), cargo heating/ventilation requirements during casualty. Parallel: repair options (Singapore shipyard tow vs at-sea repair team by helicopter), commercial off-hire calculation under CP form, and notification checklist with timestamps.

Operations Desk delivers: MARPOL Annex VI Regulation 14 — North Sea SECA 0.1% SOx limit, 3 compliance pathways (ULSFO, scrubber, EGCS with EGR caveat), fuel changeover timing calculation (4 hours at current consumption — quantity required to flush main engine before SECA boundary), ORB entry format (exact log wording required), BDN verification checklist, scrubber failure contingency (switch to ULSFO within 1 hour of EGR failure, master's log entry, flag state notification if unable to comply), PSC risk if stopped in SECA without compliant fuel or valid ORB entries. Sample log entries ready to copy.