Nordic Barents Blazes a Trail

September/October 2010 Nordic Barents blazes a trail Ship Finance n Philippines/Marine Insurance n Malaysia n Heavy Lift September/October 2010 CONTENTS AM COVER STORY 8 With the arrival of the Nordic Barents from Norway to China via the northern sea route on 29 September 2010, the quest for commercial shipping to find an alternative route from Europe to Asia was finally accomplished. But obstacles remain before it can be considered to be a viable alternative. Will insurers cover the risk? Will Russia always be happy to share the advantage? Is there enough ice-class experience among the world’s seafarers? All are imponderables that the Nordic Barents shipping community will have to address in the months and the years ahead.. blazes a trail AM FEATURES 14 Philippines ICTSI lifeblood of the Philippines 17 Marine Insurance No change 20 Malaysia 14 PTP powers ahead 22 Ship Finance China splashes the cash 25 Logistics Skirting the world 28 Heavy lift Carry that load 28 September/October 2010 asiamaritime 1 September/October 2010 AM REGULAR COLUMNS CONTENTS 3 Comment Clearing the air 4 Briefs Yards, ports, lines 6 Commodities On a charge 10 News line Anti-trust battle 30 12 Launched Wha Kwong bonanza 29 Operations Paper mountains 30 IMO Seafarer or performer? 34 31 Seascapes Operating costs are down 32 On the radar Old hands take on new roles 33 Brief encounters Worth a punt 34 Ship’s store Netting a pirate 35 35 Green page Green in bulk 37 Logistics Price fixing punished 38 Diary Singapore pulls them in 40 40 Maritime’s back pages Asian port history in a box 2 asiamaritime September/October 2010 HKLSA CAUGHT SLOW STEAMING BY MAERSK SMOKE MIGHT HAVE been reduced but there must have been Maersk Line is a member of the Hong Kong Liner Shipping some steam coming out of the ears of members of the Hong Kong Association. Nevertheless, given that the Hong Kong Shipowners’ Liner Shipping Association in September. Early in that month Dan- Association has given one of the loudest voices in the industry to ish operator Maersk Line unilaterally declared it would use its fuel- a call for the greening of shipping, one assumes a number of red switching technology when calling at Hong Kong’s container termi- faces at the HKLSA when Maersk appeared to break ranks. nals from September. It was only a week later that HKLSA declared its intent to fol- By switching to low-sulpher fuel in port Maersk claims sulpher low Maersk’s lead, when it announced its members would likely oxide and particle emissions will be cut by as much as 80%. This agree to using fuel with 0.5% sulphur content or less while at should merit a round of applause from Hong Kong’s 7m citizens berth, terminal or anchorage in Hong Kong. who have to suffer months of breathtaking smog each year, albeit HKLSA hopes that the voluntary agreement (which still had to largely because of smoke belching road transport and plume puff- be signed off by members as AM went to print) would only have ing factories in the Pearl River delta. to last two years. A clause contained within its Fair Winds Charter With up to 850 calls annually Maersk Line claims it will be recommends that the governments of Hong Kong and the nearby footing a yearly bill of $1m to boost its green credentials. Maersk mainland province of Guangdong introduce legislation to replace Line’s initiative follows a similar move at the US Port of Houston in the agreement by December 2012. July. Bad timing aside the members of the HKLSA and Maersk are to With those sorts of costs involved, it’s not surprising that the be congratulated on this bold expensive move at a time when the world’s largest box line is looking for a level playing field to be government of Hong Kong has shown far less resolve in its efforts established. At the time of the announcement the company’s chief to combat the territory’s excruciating air quality.] executive for North Asia Tim Smith said, “We hope this voluntary initiative will lead to future legislation.” PUBLISHER ADVERTISING PRINTING DaysOnTheBay Co Ltd [email protected] Allion Printing Company 10/F Sze Hing Industrial Building EDITOR COVER 33-37 Lee Chung Street, Chai Wan, Mike Grinter Christopher Papsch courtesy of Hong Kong SAR [email protected] Wallem Ship Management THIS HAS BEEN A Contributors HONG KONG OFFICE DAYSONTHEBAY Michael Grey 8A Greenfield Court PRODUCTION Sandra Speares Discovery Bay K K Chadha Hong Kong Shirish Nadkarni Tel: + 852 2987 8870 Fax:+ 852 2987 7780 PRODUCTION EDITOR [email protected] Lokyin Chun [email protected] SUBSCRIPTION SALES [email protected] ILLUSTRATIONS Harry Harrison September/October 2010 asiamaritime 3 ambriefsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam n LINES The word on the street is that vessel idling will increase among liner companies following Golden Week. Boxline companies are seeking to slash capacity on the Asia- Europe trade in the face of flat demand and the risk of falling freight rates. Freight rates began to fall gently at the beginning of August in the virtual absence of a peak season and increased capacity. But according to brokers there seems lit- tle risk of a return to lay ups, while slow – steaming will continue. Chinese box line SITC Interna- tional raised HK$3.12bn ($400m) in an initial public offering in Hong Kong issu- ing 650m shares with an indicative price Maersk is to register more vessels in Asia range between HK$4.80 and HK$6.30. SITC chief executive Yang Xian Xiang said the bulk of the proceeds would go into fleet expansion and box purchases. SITC is South Korea’s Hanjin Shipping has joined an elite club of looking to grow its fleet from the current 42 owned and chartered- shipping lines offering a direct Vietnam-Europe service. In the wake in containerships to 60 vessels with a capacity of 55,000 teu by of Zim offering a call at Ho Chi Minh as part of its Asia-Med Ex- 2013. There are also plans to eventually continue the expansion to press, Hanjin has added a call to the port of Vung Tau. As a result 80 vessels. Mr Yang says that the company is expecting a profit of the line claims to be able to reduce the current transit time from HK$853m in 2010, up 239% from 2009’s HK$251m. SITC is also Vietnam to North Europe from 23 to 19 days. Nine 6,500 teu ves- involved in logistics, freight forwarding and warehousing. SITC is sels are to be deployed on the service. listed on October 6. Taiwan’s Evergreen Marine has boosted its Kaohsiung- Ever the diplomats AP Moller-Maersk has announced that it Haiphong shuttle service with the addition of a second 950 teu will register 30 vessels or more under the Singapore flag over the ship. Finally, a new feeder service between Shanghai and Vladivos- next three years. The announcement follows its decision in July to tok has begun courtesy of Sakhalin Shipping Co, which is oper- register a similar number of vessels in Hong Kong over the same ating the 672 teu Dinteki Trader belonging to Reider Shipping. ] time frame. n PORTS PSA International could offload 26% of its stake in Chennai PSA International could be set to offload a 26% stake in its wholly-owned terminal operation in Chennai, India. PSA International refused to comment on reports that it would sell the stake in Chennai International Terminals to Indian partner ABG Infralogistics. The move follows Sical Logistics’ decision to give up its 27% holding. Such cooperation between PSA Inter- national and ABG does have precedents. The two companies hold stakes in terminals in Kolkata and Kandla. Hanjin Shipping’s efforts to over- come labour opposition to its proposed 4 asiamaritime September/October 2010 ambriefsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam semi-automated terminal in Jacksonville have borne fruit with a in the country have issued a non-binding letter of intent to a con- manning agreement between the shipping line and the local branch sortium comprising China Merchants and local Sri Lankan partner of the Longshoreman’s Association. The $300m terminal, which has Aitken Spence. The possible green light was offered after a tender an annual capacity of about 1.5m teu, will open in 2014. proposal was submitted in July 2009. Investors’ thirst for port stocks appears to be sated for the time Colombo’s present port is close to filling its 4.5m teu annual being. Following China’s Tangshang Port’s initial public offering capacity as it handled 2.7m teu in the first eight months of the year. in June, which saw the stock oversubscribed 10.6 times, Ningbo The proposed South Container Terminal would add 2.4m teu to the Port, the leading operator at China’s second largest port, was un- total. SCT is forecast to become operational by early 2013. able to excite anything like as much enthusiasm when it listed in A pipeline explosion in the Xingang area of Dalian, northeast- September. The port operator finally raised $1.1bn after a surprise ern China in July 2010, will still be wreaking damage to the port’s announcement that it was reducing its share issue from 2.5bn bottom line at the end of the year. Dalian Port chairman Xiang shares to just 2bn. The proceeds will be spent on port expansion Liangzhong has said oil shipments will still be affected through the and machinery. first quarter of next year. The handling of oil products accounts for Hong Kong-listed port operator China Merchants Hold- some 30% of the port’s profit.

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