27 January 2022
We recently introduced Teekay Tankers’ Revenue Sharing Agreement (RSA) – outlining what the agreement is, and what benefits the agreement offers our partners.
Now, let’s get into the details – how does the RSA actually work? How do ship owners get value from the RSA? What can prospective partners expect?
Read on for answers to some commonly asked questions about the Teekay Tankers’ Revenue Sharing Agreement.
How does the RSA Work? Is the RSA a Tanker Pool?
The Teekay Tankers’ RSA is not a pool. Rather, Teekay Tankers has Revenue Sharing Agreements with ship owners where Teekay Tankers time charters in the vessels and spot charters them out.
This system creates strength in numbers. Teekay Tankers and RSA partners share upside and risk of operating in the tanker market to optimize performance. Our scale and operational expertise allow us to eliminate counter-party risk for our RSA vessels.
Vessels participating in the RSA are managed by our Commercial Management teams in London, Singapore, and Houston. Various in-house teams across Teekay Tankers also collaborate with our Commercial Management colleagues to provide services and expertise to our RSA partners:
- Our in-house bunker procurement team procures cost effective bunkers from prudent suppliers for all vessels participating in the RSA. The RSA will pay for de-bunkering if the bunker is off-spec.
- Our in-house claims team works closely with chartering teams for continued improvements to Spot and TC terms.
- Our large in-house technical management team share their knowledge and experience amongst partners.
- Our commercial and operational teams leverage our in-house legal department on any contractual matters related to RSA business.
What are the Entry and Exit Terms for RSA Partners?
When joining Teekay Tankers’ Revenue Sharing Agreement, prospective partners have two choices:
- Receive their own vessels’ earnings for the first voyage or the first 50 days, or
- Participate in our “pool-point” earning system.
Should RSA Partners need to exit the RSA, we understand, as ship owners, the need for flexibility or to exit on short notice. As such, there is no minimum period required for vessels to participate in the RSA, and there are three options for partners looking to exit the RSA:
- Option 1: 90 days’ notice period
- Option 2: Current voyage plus one final voyage in RSA manager’s option
- Option 3: Immediate departure against compensation to the pool in case the pool has invested in repositioning the vessel
As a bonus, we also offer a loyalty discount of 5% for each consecutive and completed year a vessel has participated in the RSA, with the second year of participation counting as year one(1), up to a maximum of four (4) years or twenty 20%.
The working capital can comprise of cash, value of bunker and finance:
- Minimum US $600,000 in cash and/or value of bunker per Aframax/LR2 and minimum US $700,000 per Suezmax
- Balance up to US $1.25m (Aframax/LR2) or US $2m (Suezmax) can be financed through very competitively priced credit facility.
- Working capital funds voyage expenses (Port Expense, Bunkers, etc)
- Let us know what your requirements are.
How are Pool Point Earnings Calculated?
Pool points are calculated bi-annually through an independent, third-party consultant, RLA, to ensure transparency and fairness. Earnings are based entirely on speed and consumption of each vessel. Distributions are based on accrual accounting and amounts paid in full on the 20th day of every month. For more information about how earnings are calculated, watch the video below:
How can RSA Partners Stay Informed About the Market or RSA Performance and Earnings?
RSA Partners are provided full visibility and transparency through regular RSA partner meetings as well as through our online portal, The Helm. The Helm is a cloud-based dashboard that provides market-leading analytics, reporting, and expert insight from our experienced freight traders and commercial managers. Through The Helm, Partners can access:
- Daily market reports including freight assessment by the chartering teams, a detailed breakdown of fixtures done, and full overview of other market activity
- RSA-wide data including historical performance and projections, monthly distributions by vessel, customer ranking, and full overview of outstanding claims and demurrage
- Voyage itinerary, voyage history, utilization, off hire, and vetting data.
- Detailed bunker dashboard with bunker prices for all major bunker ports updated daily.
- Weekly high-risk and security reports which can be downloaded and shared with vessels.
- Monthly RSA reports detailing all relevant RSA related information.
- Monthly tanker market research reports with expert commentary.