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12 March 2016
BRS grows global reach but market dictates slower recruitment pace

Twenty offices in 18 countries marks the culmination of rapid global growth for Barry Rogliano Salles (BRS) but the question is whether the Paris-based broker and others, such as the fast-expanding Affinity in London, can continue on the same trajectory given the challenges facing shipping and shipbuilding.

BRS chief executive Tim Jones confirms that the brokerage has slowed its pace of recruitment but says it remains open to expansion in selective areas and aims to add a fifth leg to its operations.

The company’s roll call of tanker brokers alone has increased from 22 to 58 over five years and last year saw BRS’ turnover in that sector of the market increase 50% on the back also of strong freight rates. Jones describes the tankers desks as the star turn in 2015. “Our partnerships allows everyone to participate in what have been exceptional performances,” he said.

While not disclosing figures, Jones says 2015 also saw the company perform well on the dry cargo front despite the abysmal spot market.
“We have a huge industrial base of real end users and the volumes are still there,” said Jones. “Without going into numbers we did exactly the same results as the year before. They [China] are still producing steel and although we are more worried about what will happen in the future, the business is still there.”

Nevertheless, he added: “It [dry cargo] is as scary as can be. We are probably concerned about bankruptcies among clientele, yards and owners. The spot freight market for dry cargo and container business doesn’t look as though it will recuperate any time soon.”

The cushion for BRS, which is known to be close to many Chinese and Middle East steel mills, is a substantial time charter and contract front book (business booked but not yet invoiced), says Jones, who comes from part of a big shipping family that includes brother Roger (Rod) Jones, the boss of Canada Steamship Lines (CSL).
Nevertheless, while BRS may have ridden the tanker “lion” over the last year, on dry cargo there are signs it is battening down the hatches to ride out the ongoing storm.

Investment in US market

It follows a busy 2015 corporate-wise that saw the company, whose origins trace back around 160 years, investing in the US market by adding a 16-strong team from Stamford Bulk Ocean Chartering, with offshore recruits in Texas. Earlier in 2015, it launched a bulk chartering operation in Athens to which it has since added a sale-and-purchase (S&P) desk and grown to 12 employees.

On the broking front, Trade¬Winds reported in January 2015 a milestone deal involved BRS’ key role in Knightsbridge Shipping chartering more than a dozen capesize bulkers to RWE Supply & Trading.

The Athens and US office moves typify, says Jones, the company’s appetite, despite market conditions, to still recruit “like-minded” brokers that bring with them cargo and good relationship links, albeit hastening to add: “We won’t be expanding the chartering desks like we have over the past few years.”

Quizzed on the broader impact of anaemic shipping market, Jones says downsizing among brokerages generally has already kicked off. “We are all riding the wave of a declining market,” he said. “As I keep reminding everyone internally at BRS, we have done a good job but that was on the back of some really good years, some exceptional years.

“But all of that dries up over time and your front book gets run out… In general, the brokers that are monoculture and don’t have the global reach are the ones who are going to have the hardest time. A lot of our dry cargo competitors are going to be in real trouble.”

BRS has the advantage of being broadly-based and multicultural, its brokers and operations staff positioning it among the top five size-wise in the world and, along with Howe Robinson, seemingly the fastest growing in recent years if Clarksons’ takeover of Platou is excluded. Pure shipbrokers total today 203.

As well as its tanker broking team more than doubling in recent years, dry bulk and forward freight agreements (FFAs) has jumped from 31 to 71 since 2009 (including five additional brokers in the last year) and newbuildings and S&P from 28 to 34. Jones describes chartering department growth as explosive. The explanation is that France-based BRS went global and on the dry side brokers need to be close to the cargo — India, Dubai, China and Indonesia and so on. “Clients require us to be direct everywhere and to have access to the maximum amount of markets,” added the chief executive.

Offshore broker numbers have risen from four to 11 and gas from five to eight. Liner has grown to at seven.
Geographically, some approximately 60% of BRS’ brokers and operations staff (168) are now in overseas offices, down on a year ago percentage-wise but up numerically and a big increase on the 41% in 2009.

So does this mean Paris as a broking hub is shrinking? “We haven’t declined in France. We just haven’t grown,” Jones replied.

by Geoff Garfield London

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