This story is a translated version of articles first published by Skipsrevyen in January 2025.
Written by Ruben André M. Njøtøy.
2024 marked the 110th anniversary of Odfjell as a company. According to CEO Harald Fotland, it was a successful year.
Fotland explains that the situation in the Red Sea and the Panama Canal led to higher rates, particularly affecting the first two quarters. Increased competition from swing tonnage contributed to weaker results in the second half of the year.
- It was a historically strong year where we delivered several record-breaking quarterly results. The reasons for the strong performance are multifaceted, says Fotland.
- The market was very volatile throughout the year, but our employees onshore and at sea worked well and managed to leverage the fluctuations in an impressive way.
Focus on recruitment
Fotland highlights that the company has recruited over 200 young talents for the fleet since 2017, and this trend continued in 2024.
Odfjell has its own apprenticeship program in collaboration with Amalie Skram High School for information technology and media production students. Additionally, the company hires interns with diverse educational backgrounds at the headquarters.
Henrik Nepstad graduated in 2024 after finalizing his IT trainee period at Odfjell. Here with his managers Gunnar Eide, Manager Digital Applications, and Tommy Pletten, Manager Digital Platform. Photo: Elise Eide
- In 2024, we also recruited 22 Norwegian cadets and apprentices for training on board. We are glad that many continue within the company and the industry after completing the apprenticeship, says Fotland.
The company has also invested in its ships to ensure jobs and growth. In 2024, Odfjell entered into agreements to purchase a total of seven chemical tankers.
- Odfjell accounts for as much as 20 percent of the total order book for newbuilds in our segment. This also increases activity ashore, and we welcomed many new employees throughout the year, says Fotland.
An unpredictable world
The year has presented both commercial and operational challenges, according to Fotland.
- The unpredictable geopolitical situation, particularly the war and conflicts in the Middle East and Ukraine, both directly and indirectly affected us throughout the year.
He emphasizes that the safety of employees is always the top priority.
- Our ships have not sailed through the Red Sea since December 2023, says Fotland.
Despite a volatile market, he believes the company navigated well.
- We have invested in new tonnage, tested new technologies, and conducted a global employee engagement program. We have also implemented digital solutions that will make our operations safer and more efficient, he explains.
Fotland notes that Odfjell is experiencing positive effects from years of organizational development work.
- 2024 showed how quickly circumstances can change. At the same time, we notice some fundamental development trends, particularly within sustainability and climate risk, which we will incorporate into our strategic planning going forward, he says.
Testing new technologies
Odfjell has also learned that not all innovations work when moved from theory to practice.
- Technological innovations that look promising on paper can sometimes disappoint. However, the learning experience provides valuable insights. We continue to test both large and small innovations on our ships, says Fotland.
Outlook for 2025
Odfjell continues to develop in 2025 and will get seven new chemical tankers delivered to the fleet. In parallel, the extensive maintenance program continues, and novel emission-reducing technologies are tested.
- We have the next generation chemical tanker on the drawing board and are especially looking forward to setting sail with Bow Olympus in the first half of 2025. This will be one of the first tankers in the world with this type of technology.
Odfjell has a presence in practically all deep-sea shipping routes, as well as regional operations in South America.
- Our focus on markets and regions is based on our contract portfolio, which makes up about 50-60 percent of the cargo we carry annually, and on where the spot markets are strongest at any given time. In other words, our focus will be similar to last year, but we will naturally adapt to developments in various markets, Fotland says.
He highlights countries like China, India, and the USA as key factors for the market developments.
- We are also closely monitoring whether the industry in Europe will regain balance and how oil production and exports from the Middle East will develop.
He points out that the last few years have been challenging for shipping, with the pandemic, drought in the Panama Canal, the war in Ukraine, reduced growth in China, and the conflict in the Middle East, where the Houthis have effectively closed the southern Red Sea.
- Not to mention the increasing climate risk and the transition to a low-emission society.
One of the challenges in 2024 was the drought in the Panama Canal, which led to significant delays. Photo: Anita Håvardsen
Fotland emphasizes that challenges can also bring opportunities.
- The drought in the Panama Canal was certainly a difficult situation, but the consequence was that an already marginal market for chemical shipping became even tighter, which led to higher rates in some spot markets, he explains.
New solutions
Fotland notes that climate risk is driving the industry to find new solutions.
- We already have systems in place for using biofuels and look forward to seeing our first ship with sails in operation later this year. We will also continue testing new technologies.
Odfjell will continue its digitalization of work processes and explore how artificial intelligence can be optimally utilized.
- We see that the cybercrime threat is increasing, and measures to safeguard data security will become even more important.
Market movements and protectionism
- It’s no secret who will dominate the headlines early in 2025, and our markets will closely follow Trump and the US throughout the year, says Fotland.
He adds that many expect increased protectionism and more trade barriers, particularly against China.
- Additionally, it’s likely that Trump will continue the US's firm stance against Iran and may even impose stricter sanctions.
The industry is also closely watching whether growth in China will regain its pace.
- The authorities have signaled that they will stimulate growth, which could be positive for our markets. However, it is uncertain whether these measures will succeed, as the population growth—which has been a driver of economic growth for the past 20 years—has stagnated.
Fotland emphasizes that changing trade patterns can present both challenges and opportunities.
- Reduced volumes of one chemical from the US to China could be a challenge, but if American suppliers find buyers further away, it could be positive for us. We saw this after the sanctions against Russia, where Europe sourced from producers in the Americas and the Middle East, while Russia increased exports to Asia.
Recruitment and regulatory frameworks
Odfjell is also focusing on recruitment to meet future challenges.
- We rely on supportive regulatory frameworks and skilled people to succeed. We look forward to the outcome of the Norwegian general election and how it will affect the Norwegian maritime sector in a competitive global industry.
- Favorable framework conditions are crucial to recruit and retain Norwegian seafarers. We will continue to invest in Norwegian maritime competence and increase diversity both ashore and at sea. Although we have made progress, there is still a way to go before we reach our goals for diversity and gender equality, says Fotland.
