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 fol- lowing 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 pro- ceeds 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 fol- lows 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 termi- nals in Kolkata and Kandla. Hanjin Shipping’s efforts to over- come labour opposition to its proposed

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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. On a brighter note the chairman pre- ings (International) could cash in on a shortage of capacity at dicted that box handling is forecast to have increased 17% by the the present Colombo facility in Sri Lanka. The relevant authorities end of 2010. In 2009 the port handled 4.5m teu. ]

n Yards allowing two John Fredriksen-controlled companies to favour- ably restructure extant newbuilding contracts. In a surprise move Drydocks World-SEA managing director The most notable feature of the deal which saw Oslo-listed Denis Welch has given up his position at the company’s Singapore Frontline increase the total number of very large crude carriers facility to set up his own maritime industry consultancy – One on order to five, after confirming two options and adding a vessel, World Maritime. “The partners in One World Maritime believe was a throwaway line stating it had improved payment terms more there are considerable opportunities assisting maritime companies in line with the current state of the market. The contract price for locating, re-locating and expanding in Asia in the five 320,000 dwt ships is $525m. The an industry which has been rapidly moving delivery dates for the vessels have also been eastwards for some time,” Mr Welch says. adjusted with deferrals of three months. Meanwhile, officials at Vietnam’s state- At the same time Golden Ocean, also owned shipbuilder Vietnam Shipbuild- under the Fredriksen umbrella, changed an ing Industry Corp continue to leave the earlier order at Jinhai Heavy for six kam- financially distressed company for entirely sarmax bulkers and a capesize. The revised different reasons. In September the Vietnam- order changes two of the kamsarmax to ice- ese authorities arrested a further four senior class panamax vessels, while the price of the executives including former chief executive capesize has been negotiated downwards. Tran Quang Vu, former chief of board of di- Golden Ocean also agreed to order a fur- rectors Tran Van Liem, chief executive of Cai- ther two ice-class panamx vessels. The total Lan Steel Nguyen Tuan Duong and director of cost of the nine newbuildings is $339.5m. Hoang Anh Shipbuilding Nguyen Van Tuyen. Following the lead of South Korean The arrests follow interviews with the former shipbuilders, China’s largest such builder Vinashin chairman Pham Thanh Binh who China Shipbuilding Industry Corp, was removed from his position in August. Denis Welch becomes consultant said in September it expects to garner total He faces allegations of irresponsibility in the sales of Yuan160bn ($23.5bn) this year due mobilization, management and use of state capital. Vinashin has to diversions into non-shipbuilding business. CSIC vice-president debts in excess of $4bn. said that as much as 40% of its sales revenue would come from Probably much to the chagrin of rival yards, China’s Jinhai among 30 other sectors including metallurgy, aerospace and Heavy Industry was showing its softer side in Mid-September hydro-power. ]

September/October 2010 asiamaritime 5 amcommoditiesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

A Salt & Batteries Generally used in batteries for laptop computers, i-Pods and cell phones, but also used in a clean vehicle built in California, alkali lithium is an essential element in lithium-ion batteries.

Li thium will become increasingly important to the automotive world in future years, as Chevrolet introduces its battery-powered Volt, Nissan the Leaf, and Tesla, part-owned by Daimler AG and Toyota Motor Company, expands produc- tion of its battery-powered sports car. Seawater contains an estimated 230bn tonnes of lithium, although gener- ally at a low concentration of 0.1 to 0.2 ppm. The metal is mostly recovered from salt flats of lakes in South America. More than 81% of the world’s lithium is found in just three South American countries, namely Chile, Bolivia and Argentina. By contrast relatively small amounts of lithium are produced by the United States and China. Tesla Roadster is powered by 6,800 lithium-ion batteries China and Russia have lithium ore re- sources, but find it cheaper to import this Atacama Desert, Chile material from Chile than to mine their own. Estimates put Chile’s The largest salt flat in Chile is the Salar de Atacama, located about reserve base at 7.5m tonnes of lithium, and those of Argentina at 55 km south of San Pedro de Atacama. Surrounded by mountains approximately 6m tonnes it has no drainage outlets and is one of the driest places on earth. Discovered by Swedish chemist Johan August Arfvedson in The salt flat encompasses over 3000 square kilometres, making 1817, lithium is the lightest of all metals, with a density only it the second largest in the world; Salar de Uyuni in Bolivia covers about half that of water. It does not occur freely in nature but it is about 10,500 square kilometres. The topography of the core por- found in small units in nearly all igneous rocks and in many min- tion of the Chilean salar is permanently free of water, whereas Salar eral springs. de Uyuni is periodically covered with shallow water. The Chilean Most lithium is recovered from brine, or water with a high con- salt flat contains around 27% of global lithium reserves. centration of lithium carbonate. Brines trapped in the Earth’s crust Argentina also has lithium reserves, the largest of which is are the major source material for lithium carbonate. These sources the Salar del Hombre Muerto lithium mine. The salt water in this are less expensive to mine than from rock such as spodumene, pet- location is rich in lithium and the mine concentrates the brine by alite, and other lithium-bearing minerals. pumping it into solar evaporation ponds. This allows the lithium In the United States, lithium is recovered from brine pools in salt to then be recovered. Nevada, but according to the US Geological Survey, Bolivia has almost half the world’s known reserves of lithium. China hopes to Lithium-ion batteries and their applications emerge as a significant producer of brine-sourced lithium carbon- Pioneer work with the lithium battery began in 1912 under GN ate, notably in Qinghai Province as well as in Tibet. The U.S. does Lewis but it was not until the early 1970s when the first non- not disclose the amount of lithium produced annually, but it is not rechargeable lithium batteries became commercially available. considered significant. Russia and Australia are also producers of Lithium is the lightest of all metals, has the greatest electrochemi- lithium, but well below Chile in terms of annual tonnage. cal potential and provides the largest energy density for weight.

6 asiamaritime September/October 2010 amcommoditiesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam amamamamamamam

LG Chem to supply lithium-ion packs for new Ford EV Ford Motor Company has selected Compact Power, Inc. (CPI), a subsidiary of South Korea’s LG Chem, to build lithium-ion battery packs for the Ford Focus Electric, which will go on sale in the U.S. in 2011. The Focus Electric battery packs will leverage CPI and parent company LG Chem’s deep expertise in advanced flat format lithium-ion cells and ad- vanced liquid-cooled modules and battery manage- ment systems. “CPI is an emerging leader in the lithium-ion battery field and we are pleased to have them as a strategic supplier as we prepare to bring the Ford Focus Electric to market,” says Sherif Marakby, Ford

Lithium is at the heart of our communications capability director, Sustainable Mobility Products and Hybrid programs. “We are moving aggressively with our electrification strategy and our work to help make Michigan a centre of excel- Attempts to develop rechargeable lithium batteries failed due to lence for a range of electrified vehicles,” he adds. safety problems. Because of the inherent instability of lithium, es- The lithium-ion cells for the packs will initially be sourced from pecially during charging, research shifted to a non-metallic lithium Korea through LG Chem. LG Chem and CPI will be localising cell battery using lithium ions. Although slightly lower in energy density production at their new site in Holland, Michigan. than lithium metal, lithium-ion is safe, provided certain precautions are met when charging and discharging. It was in 1991 that the Tesla Roadster Sony Corporation commercialised the first lithium-ion battery. The Tesla Roadster, which is currently on an awareness tour of The energy density of lithium-ion is typically twice that of the Hong Kong and other Asian countries, is powered by 6,800 lith- standard nickel-cadmium. There is potential for higher energy den- ium-ion batteries. The battery pack of the Tesla electric vehicle is sities. The load characteristics are reasonably good and behave in a one of the largest and technically most advanced lithium-ion bat- similar way to nickel-cadmium in terms of discharge. tery packs in the world. It is capable of delivering enough power to accelerate the Tesla from 0 to 100 km/h in about four seconds. BYD Meanwhile, the battery stores enough energy for the vehicle to Established in 1995, BYD is a Hong Kong-listed company with an travel more than 300 km without recharging, something no pro- extensive private enterprise background. The company is one of duction electric vehicle in history can claim. the world’s leading producers of lithium-ion batteries, which have Under the market pull of consumer electronics products, en- proved to be an effective and affordable alternative to traditional ergy and power densities have increased while cost has dropped batteries. The BYD lithium-ion batteries include lithium-ion cell, making lithium-ion the choice for an electric vehicle like the Tesla. lithium-ion battery pack, and li-polymer battery, all of which are In the past, to achieve such tremendous range for an electric ve- widely used in a variety of applications. BYD’s customers include hicle it would need to carry more than a thousand kilograms of international cell phone giants Nokia, Motorola, Samsung, Sony nickel metal hydride batteries. Physically large and heavy, such a Ericsson, Kyocera, Phillips, prominent domestic cell phone com- car could never achieve the acceleration and handling perform- panies Huawei, ZTE, Lenovo, as well as cordless phone experts ance that the Tesla Roadster has so far achieved. Vtech, Panasonic, and Sony. BYD has developed from 20 employ- The incessant demand for laptop computers, mobile tele- ees in 1995 to a corporation with more than 150,000 employees phones, cameras plug-in hybrid vehicles and pure electric vehicles and 10 industrial parks across China in 2009, including sites in (EV), means lithium is a rapidly growing market. It appears there Guangdong, Beijing, Shaanxi, Shanghai, and Changsha. Serial in- are currently sufficient global reserves of this rare metal, but until vestor Warren Buffett owns just short of 10% of the company, for another major development occurs in EV research, it means prices which he paid US$230m. of lithium will go ever higher.]

September/October 2010 asiamaritime 7 amasia eyeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Opening the northern sea route

The historic voyage of the Nordic Barents along the northern sea route could change the way Europe links with Asia

The successful voyage of the Hong Kong-flagged Nordic is chairman of Tschudi Shipping Company and the largest share- Barents from the Norwegian port of Kirkenes via Murmansk and holder of Northern Iron, the Australian ASX listed owner of the the Russian Far East to China, in just 12 days, is a significant mile- Sydvaranger iron ore mine, from where the iron ore was sourced stone in a long history of global shipping. for the journey. The Danish-owned handymax vessel, carrying a 41,000 tonne “It has been our ambition for years, so we are very happy to cargo of iron ore, was not the first commercial vessel to transit the finally have the opportunity to do this voyage. The Northern Sea icy, sometimes treacherous waters of the Russian Arctic northeast Route can be of great importance for the companies in northern passage to China. That honour went to the Sovcomflot-owned Scandinavia and on the Kola Peninsula which ship oil, gas, miner- SCF Baltica. The 117,000 dwt tanker set off in August carrying als and other raw materials to the increasingly important Asian 70,000 tonnes of gas condensate – a lighter load than usual due markets,” he said. to draft restrictions through Arctic waters. SCF Baltica covered the In fact the involvement of Mr Tschudi’s shipping company in 13,000km trip from Murmansk to Ningbo in just 11 days. In fact the Russians have had ships operating in the icy waters of the Arctic for many years. But the significance of this pair of voyages is two-fold. First, the age-old search for a northern route between Europe and Asia has finally been fulfilled. As such it opens up a viable alternative to the Suez Canal. The Norway-based Tschudi Shipping Company is the owner of Nordic Barents. Through its subsidiary Tschudi Arctic Transit and the Danish shipping company Nordic Bulk Carriers, together with Russian maritime authorities it worked in partnership to open the northern Sea route for the bulk carrier. “We are very excited about the opportunities the NSR will generate, said Felix Tschudi to local news agencies. Mr Tschudi

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Danish mining has been the driving force behind his ambitions for the voyage. In June 2006, the Tschudi Shipping Company purchased the land and plant of Sydvaranger AS, and began plans for the reopen- ing of the mine. In the summer of 2009, the Sydvaranger mine finally restarted production. The project has an estimated mine life of 19 years at an annual production rate of 7 Mtpa of mill feed. The mine is connected by railway to the port of Kirkenes from where the ore will be exported. The miner is the Sydvaranger Mine company, which is owned by Northern Iron Limited, a company controlled by Tschudi Shipping.

C ost savings allowed to navigate the route: a move that has come about as the Ahead of the Nordic Barents’ voyage the managing director of country realizes the potential of a possible moneymaker. charterer Nordic Bulk Christian Bonfils told the Scandinavian The Centre for High North Logistics, which played a key role press: “The northern sea route shortens the distance to China by in organizing the expedition, has highlighted some of the obsta- about a third. This results in a significant reduction in fuel con- cles that could be experienced in the future. Until now Russia has sumption and transportation time – and it also means much lower been jealously holding back secrets about the northern sea routes. CO2 emissions. The fuels savings alone add up to approximately If the country continues to keep such information under wraps $180,000.” very few would insurers be happy insuring voyages. CHNL has Hong Kong’s Wallem Group managed the operation through also warned of the red tape involved in clearing a voyage to go, its ID Wallem subsidiary. Managing director Rob Grool was equal- when paperwork is churned out at a glacial pace by bureaucratic ly enthusiastic. He said that excluding the fuel savings; the cost of departments. sending the ship through the northern route would be about the Other hindrances include the limited number of ships that same as going through the Suez Canal. could be deployed on the northern sea route due to the need for “This is early days - obviously this route will only really be- the ships to be ice strengthened and escorted. come competitive when it is an ice-free or ice-class manageable Nobody knows what ravages climate change may yet inflict on passage. It is however a very exciting venture now,” he added. the Arctic ice, but for now and for many years to come, the north- But there are costs involved. Rosatomflot’s fleet of nuclear ern sea route will be a route available to commercial shipping for icebreakers is de rigueur as escorts for any vessel planning to navi- no more than a few months a year. gate the route. But the Russian authorities have claimed that such There is also the current scarcity of ice-navigation experience escort services will be competitive compared to the levies charged among the world’s seafarers to contend with. for passage through the Suez Canal. According to ice-navigation specialist Patrick Toomey, writing recently in Lloyd’s List: “Operators or owners who are planning to Breaking the Russian monopoly use the NSR on a regular basis will have to provide their opera- The second reason for celebration is in the fact that the Nordic tions with high-ice-class vessels just to make sure that the voyages Barents is the first non-Russian vessel the Russian authorities have are completed without damage, and without too much lost time due to ice. Even more important will be the ice-navigation exper- tise of the crews on board – without proper training and certifica- tion all the benefits to be obtained by taking the route can be lost, even so far as losing the ships themselves.” And what of sovereign risk? Through its propensity to cut gas supplies to what it considers errant customers such as Ukraine, Russia has gained itself an unenviable reputation for a less than gentlemanly approach to business. How would insurers weigh the risk of aborted sea voyages? Already, at least another 12 vessels have booked their passage through the northern sea route during 2011. And the applications continue to pour in. Ultimately Russia is hoping to lure the more lucrative containership services.

September/October 2010 asiamaritime 9 amnews lineamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Let battle commence The abolition of anti-trust immunity for lines trading from Asia to the US looks imminent

A series of skirmishes involving liner companies and shippers Following efforts this year by container lines to respond to the have been breaking out across the region since early September. surge in freight movements from Asia to the US after a year-long The prize at stake is the hearts and minds of regulators currently slump has provoked accusations by US shippers and freight for- weighing up the benefits and pitfalls of ending the shipping com- warders that box-lines have been colluding in setting freight rates panies’ cartel. and imposing surcharges. This, and an ongoing investigation by the At the time of going to print the region’s Federal Maritime Commission, has provoked liner companies hold the upper hand – just. the US House Committee on Transportation and Accompanied by cries of angst from shippers Infrastructure to consider ending container ship- Singapore said on September 16, it would ex- ping’s antitrust immunity. tend the block exemption order of liner ship- In response to the shippers’ accusations and ping agreements for a further five years. a decision by the House Committee chairman The result was a surprise to nobody. At a James Oberstar propose legislation that could, shippers meeting in Macau in early September if accepted, outlaw carriers’ antitrust immunity, John Lu, chairman of the Asian Shippers’ Coun- the World Shipping Council has mounted a cil highlighted the realities dictating Singapore’s rearguard defence. It insisted that box and slot yet to be announced decision, expressing shortages had been a temporary phenomena concern that government support for shipping and: “Ocean carriers have [now] added suf- was stronger in Asia than elsewhere. Neverthe- ficient capacity to handle all US imports. Ca- less on hearing of his government’s betrayal his pacity presently deployed to carry US exports outraged response was: “It is unthinkable. The Chairman of the ASC John Lu far exceeds shipper demand. Carriers have also worst kind of result we could see.” made substantial capital commitments in order- In justifying its decision the Competition Commission of Singa- ing additional container equipment to meet customers’ needs.” pore said, somewhat disingenuously, “Antitrust exemptions remain Shipping lines have tried to cool tempers by entering into the regulatory norm for the liner industry globally, and for most of discussions with shippers’ organizations and the FMC in order to Singapore’s major trade partners.” This makes the European Union, come up with mutually beneficial enhancements to the Westbound which suspended block exemptions in 2008, sound less significant Transpacific Stabilization Agreement and the Transpacific Stabiliza- a trading bloc than most would consider it. tion Agreement. The decision made by Singapore to extend block exemptions Charles de Trenck, analyst at Transport Trackers says: “There is will be valid for the next five years. of course an element of price oligopoly on liner pricing at times. Upon hearing of the positive result for liner companies a It can be interpreted as “simply trying to get back to profitability” spokesman for Orient Overseas Container Line said the company with observers not able to see the analytical derivatives which supported the continuation of block exemption from antitrust for mean more. liner shipping. “It was never about the small price of transport of a pair of “Maintaining stability in the liner shipping industry is essen- sneakers over the selling price, as it has been presented at times tial,” the spokesman said. – but that cost over the profit in selling the shoe, thus showing a “A critical component of such stability is information exchange higher transport cost element than at first believed by looking at between liner companies, which is necessary in order to ensure the nominal selling price. The key issue if a case against liners the running of a complex logistics chain, fulfil service require- were to be made, is not the nominal numbers but a consideration ments for customers, improve vessel and container deployment of the margin pressures of retailers in 2010 against the rebound and ultimately drive major investment decisions.” in the transport cost. How many US retailers would have some of While regional liner companies can breath a sigh of relief at them bailed out by their governments (or other, sometimes related the Singapore decision, the position vis-à-vis the possible intro- parties) so that they could go back to business as usual on pricing duction of anti-trust legislation imposed on liner companies trad- practices?” ing to the US looks to be a serious threat.

10 asiamaritime September/October 2010 amnews lineamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Shanghaied Shanghai sits at the centre of the debate over container freight derivatives yet its citizens are excluded from participation

S hanghai appears to have Shanghai: a city in waiting more public pronouncements,” tripped in its rush to become he said. both a financial and maritime “There has not yet been a hub for the region. In Septem- rush to trade in these derivatives ber the city played host to the but there is real interest in learn- Container Freight Derivatives ing more,” he added. Association forum. Shanghai The true position regarding was chosen in recognition of the interest of shipping compa- its establishment of the Shang- nies is likely to be influenced by hai Shipping Exchange, whose the eventual outcome of anti- Shanghai Containerised Freight trust immunity discussions in the Index forms the settlement US (see News line page *). Aboli- mechanism for the new deriva- tion of immunity will, according tive market. to many shipowners, exacerbate Since late 2009 the SSE has “There has not yet been a volatility and perhaps encourage been publishing international rush to trade in these the use of derivatives. containership freight rates on 13 major routes from Shanghai, derivatives but there is real Not yet ready against which container freight interest in learning more,” But the irony in the presenta- rates are settled. tion conducted by the CFDA in Since Clarkson Securities Shanghai was that, strictly speak- executed the first trade in container derivatives in January 2010, ing, the absence of a regulatory framework for FFAs to be traded there has been a deal of debate as to the instrument’s suitability to domestically in China has made many possible participants dis- the liner business. A number of significant shipping companies ap- tinctly nervous. In fact such trading would appear to be technically pear by their public comments to have little interest at this stage. illegal. Coming relatively fresh to the product – Asian based traders Rejected by shipping lines account for less than 10% of the global market – precedent is also Maersk Line’s chief executive has dismissed the paper trading as playing its part. The only high profile case of a major Chinese ship- nothing more than a form of gambling. Singapore’s NOL has also ping company utilizing FFAs was Cosco’s disastrous $600m loss been reported as saying it would not use the tool. And in Hong ahead of the downturn in the fourth quarter of 2008. Kong Orient Overseas Container Line is thought to be against use While the idea of freight futures may be relatively new, the of the hedging instrument. press coverage devoted to the disconnect that exists between talk- Supporters of container freight derivatives such as CFDA presi- ing about it in Shanghai and actually doing it has exposed more dent Brian Nixon had a ready riposte for Maersk Line and others. examples of how, as yet, Shanghai is not up to its aspirations of be- Citing the 475% increase in freight rates on some routes during ing a shipping hub. 2010, Mr Nixon claimed the volatility in freight rates on the box In September members at the annual International Union of trade represented the real casino. Marine Insurance forum were warned of complacency in setting up shop in Shanghai. Citing corruption, lack of an independent judici- Maybe not ary and an incomplete regulatory framework, the members were Meanwhile, a futures broker on the sidelines of the conference recommended to hold off for now. claimed that official announcements by prominent executives at Meanwhile a shipping forum in Shanghai in September was liner companies did not necessarily reflect the true position. “These told by no less than the shipping finance director of the Bank of companies are very large with myriad departments. What we are Communication Tong Xuewei: “Our ship financing capabilities are hearing from some of these companies does not chime with the lagging behind and we still have a long way to go.”

September/October 2010 asiamaritime 11 amlaunchedamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Cape Victory and a maritime partnership

A three day celebration, including a visit to the Shanghai Expo with reknowned Spanish architect Santiago Calatrava, his wife for selected guests, marked the arrival of the 177,000 dwt capesize Robertina who named the ship, daughter Ana Sofia, Far Eastern bulker, Cape Victory, into George Group chairman Douglas Hsu who controls U-Ming and Sanko Chao’s shipping fleet. Line president Takeshi Matsui. The ship was ordered from Speaking at a gala dinner after the ship was officially named, Shanghai Waigaoqiao Shipbuild- Mr Calatrava expressed his gratitude “from the bottom of my ing by Mr Chao’s Wah Kwong heart” for the kindness shown to his family. He said: “Mountains Maritime Transport and Taiwan’s separate people, but seas bring people together” an observation U-Ming Marine Transport, who that was noted by Mr Hsu of U-Ming. have chartered the ship to Japan’s The Cape Victory is the fifth joint venture vessel with Wah Sanko Line for five years. Sanko Kwong. Turning to SWS, Mr Hsu said the shipyard “was one of the Line has subsequently re-let best in the world” and growing efficiencies had cut the newbuild- the vessel to BHP Billiton ing cycle from nine months towards six months. for a year. Mr Chao similarly thanked his guests for taking part in the Joining Mr Chao to celebrations and marked the delivery of Cape Victory by signing celebrate the addition of a letter of intent with SWS for a 319,000 dwt VLCC with delivery the Cape Victory was scheduled in 2013. his wife Lily, together Wah Kwong Maritime Transport also took delivery of a 53,000 dwt bulker at Chengxi Shipbuilding in September. And a 177,000 dwt capesize bulker will be delivered by Dalian Shipbuilding in November when the ship will be chartered to Noble for five years. This will be followed by further new deliveries over the following months that include a 93,000 dwt bulker from Shanghaiguan, two VLCCs at Dalian Shipbuilding and a 5,000 cu m liquefied petro- leum gas carrier on order in Japan. ] Wah Kwong Shipping chairman George Chao is expanding the fleet

12 asiamaritime September/October 2010 amlaunchedamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Bulker builder of choice

Sh anghai Waigaoqiao Shipbuilding has reinforced its deliver over the next couple of years and while these will mainly position as China's leading builder of dry bulk vessels with the de- be capesize bulkers, the shipyard is increasingly moving into high- livery or on-going construction of a series of capesize bulkers for er value ships. These include very large crude carriers and offshore foreign owners. vessels including floating storage offloading ships and floating, Hong Kong's Oak Maritime took delivery in September of production, storage and offloading vessels for customers including the Hong Kong-flagged 177,000 dwt Faustina which later left on Chevron and China National Offshore Oil Corporation. ] its maiden voyage to load a cargo in Hay Point, Australia. Greek owner Remi Maritime is also due to take delivery shortly of the 177,700 dwt GCL Argentina. The Marshall Islands-flagged ship will be the biggest in the Piraeus-based Remi Maritime fleet. Remi Maritime is controlled by chief ex- ecutive Leonidas Polemis whose family has been in the shipping business for more than 200 years. The capesize bulker Caro was also near- ing completion at the time of Asia Mari- time's visit. The vessels are among the more than 50 ships Shanghai Waigaoqiao is on course to

September/October 2010 asiamaritime 13 amphilippinesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam No place like home ICTSI has spread its wings across the world but the development of the Philippines remains close to its heart

Thus far it’s been a good year for International Container Terminal Services. The international port operator, headquartered in the Philippines, posted first-half revenues of $246.9m, an increase of 31% over the $188.8m reported for the same period last year. More spectacularly, net income was up a whop- ping 83% at $42.4m. ICTSI operates terminals all over the world but more than half of the revenues declared above came from its Asia operations, chiefly from the Philip- pines. Containers handled in Asia, increased 28% to 2,009,605 teu, the increase being attributed to continued upturn in international trade, particularly in markets where ICTSI’s ports are located. The boxes handled in Asia accounted for 64% of the global total. Compared to the 1,755,474 teus handled in the ICTI’s flagship Manila International Container Terminal first six months of 2008, the highest first half through- put level recorded until this year, the Group’s consolidated volume for the first half of 2010 was higher by 14%. For the quarter end- intra-Asian routes: an APL service from southern China takes in ing 30 June 2010, total teus handled were 1,047,577, compared to Hong Kong South Korea, Cagayan and Davao before arriving at 834,188 teus in 2009. Singapore. The Maersk route covers the Philippine ports of Cebu, In ICTSI’s home port of the Philipppines, growth in volumes General Santos City and Davao before heading off to Tanjung Peli- has been brisk in 2010. In addition to its flagship facility in Manila, pas in Malaysia. in the northern part of the country, ICTSI also operates terminals in ICTSI is proud of the contribution it is making to the growth the thriving secondary port of Subic Bay and the Buan Terminal in of the Philippines economy, as is borne out by the words of Mr Batangas. In the south ICTSI runs Makar Wharf in General Santos Gonzalez. City, Sasa Wharf, Port of Davao City and Mindanao Container Ter- “Despite our expansion overseas, ICTSI remains a Filipino minal in Misamis Oriental. company, and we have expressed many times that we are here for This network puts Manila International Container Terminal at the long term especially when it comes to doing our share in de- the heart of the country’s supply chain. As ICTSI vice president veloping ports in the country,” he says. and general manager of MICT Christian Gonzalez explains: “The “On the other hand, the Philippine economy has been improv- majority of boxes bound for Philippine out-ports are released from ing. International trade is doing well and the country’s ports are Manila International Container Terminal and then relayed to ware- busy with containers and cargoes coming in and going out of the houses for finishing or storage and redistribution, or to the domes- Philippines. We see a booming ports market in the next few years,” tic Manila terminals,” he says. he adds. “Based on customs data we have acquired, total cargo bound “In his first state of the nation address, President Benigno Aqui- for destinations outside Luzon is 13,000-18,000 teus a month no III has expressed confidence in public-private partnerships to (though we cannot confirm this),” he adds. develop the country’s transportation infrastructure and services. We In addition to a raft of foreign liner companies calling at MICT, are excited with President Aquino’s championing PPPs as this will there are six domestic services out of Manila to other locations further revitalize the ports market in the Philippines. across the sprawling archipelago. An additional two local services “We will continue to develop our flagship terminal, the Manila perform the same function from Subic Bay. International Container Terminal. As the country’s leading trading Meanwhile, in the south, ICTSI has lured major international gateway, the MICT has standards to retain to maintain its world- lines, Maersk and APL who take in the ICTSI’s Makar Wharf on class terminal operations.” ]

14 asiamaritime September/October 2010 amphilippinesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Ro-ro fleet needed in SE Asia An Asian Development bank report has urged the boosting of roll-on/roll-off vessels in Southeast Asia in the battle to alleviate poverty

I n Europe ro-ro vessels have played an es- sential part in its economy for many years: not so Southeast Asia; with one exception. In 2003, the Philippines developed a nautical highway system, dependent on energy Philippine ro-ro network consisting of three main north-south trunks fed by tributary offshoots. Although the new networks are not yet fully developed, an Asian De- velopment Bank study revealed that the breaking of the old monopoly had allowed for the introduction of newer, more efficient vessels. This, in turn, led to lower handling, transship- ment and transit costs.

“Transport costs have been reduced, as have Vessels like these could contribute to Asean wealth transit times of goods, and the frequency of deliveries has in- creased,” said the report. come from the private sector, in vessels, buses, trucks, and in some “The increased frequency of ro-ro trips along the nautical high- cases ports. Of course there remains a pressing need to continu- way has impacted the movement of goods and people…[It] has sig- ously upgrade and maintain the road system, and in due course nificantly reduced transport costs as well as travel times. Transport invest in other infrastructure, but this is becoming affordable as a costs have been reduced by 10% to 60%,” the report added. result of the increased economic activity.” On a macro scale, since the introduction of the ro-ro policy, The ADB says that other regional economic activities taking additional routes are being established on an annual basis. As a re- place among the more than 24,000 islands of Southeast Asia could sult regional markets have expanded, especially those linked with benefit from the example set by the Philippines. the economic growth hubs of Cebu, Iloilo, Bacalod, Dumaguete The report envisages regional economic centres such as Java, and Cagayan de Oro. Luzon, Bangkok, Singapore and Port Klang being transformed into According to the ADB the growth of new ro-ro terminals has hubs for newly established ro-ro service networks following the been serving as a catalyst to the development of the municipalities Philippines’ “nautical highway” model to provide networks joining and areas surrounding them. outlying islands in the archipelagic region of south-east Asia. “The experience of Roxas, Oriental Mindoro, has encouraged “The region offers numerous possibilities for such nautical other local government units to promote the development of ro-ro highways, but only detailed discussions with national and lo- infrastructure in their own municipalities,” says the ADB. cal governments and the private sector can result in meaningful The success of the ro-ro experiment has also seen changes highways that actually work,” said the ADB in the report entitled, in logistics practices: “companies have shut down a significant Bridges Across Oceans: Initial Impact of the Philippines’ Nautical number of their regional warehouses because of the frequent, Highway System and Lessons for South-east Asia. direct deliveries they can now make to their regional markets via The ADB concedes that the highest hurdle to its object could ro-ro.” be resistance to shipping reform. “The introduction of policy re- More traditional shipping lines have begun to sit up and take form is never easy as there will be vested interests resisting change, notice. As a result they are introducing larger ships to compete even if the reforms are beneficial for most parties. The Philippine efficiently. ro-ro experience shows that reforms have a better chance of suc- ceeding if they are market driven, and supported by a majority of Ticking all the boxes private sector interests,” the report says. Summarising the impact of the ro-ro experiment in the Philippines, “In the case of Asean those interests have yet to be mapped the ADB says: “Importantly, the system has developed with limited out, but such parties would include logistics managers, business amounts of public investment. Port facilities needed are minimal associations, local governments, mining industries, plantation man- compared to traditional ports, and most of the investments have agers and tourism operators to name but a few.” ]

September/October 2010 asiamaritime 15 amphilippinesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Wi-fi for all Maritime magnate Doris Magsaysay Ho has chosen the year of the seafarer to launch a campaign aimed at the world’s shipping terminals

Doris Magsaysay Ho, the chief executive of Philippines-based with the their families when they are in Magsaysay Maritime Corporation, is a difficult person to catch. port, just the way that I do,” she adds. After an extensive tour of Europe in August she was on the move “It came as something of a shock to again in September and landed in Hong Kong for a day in October. discover that there are very few ports This constant movement around the world makes her naturally providing wi-fi access to visiting crews,” empathetic to the lot of seafarers; she is after all the boss of the Ms Ho exclaims. world’s largest crewing agency. Asia Maritime managed only a brief And indeed this appears to be the Ms Doris Magsaysay Ho call to the Filipino entrepreneur as she headed to the airport. She case. Hutchison Port Holdings’ terminal calls for wif-fi for all was in full campaign mode. “I have to travel so often I naturally operations in Hong Kong has a form of wireless connection but is miss my family,” she says. for the exclusive use of terminal employees. At PSA in Singapore “One of the virtues of modern technology is that wherever I am management claim that they do have wireless connections but in the world I can sit down at some stage in the day and at have a nobody had asked to use them, which would seem to suggest not virtual meal with my children as we chat together on screen via the advertised that strongly. Internet. The expected introduction of the Maritime Labour Convention “It struck me only recently, when talking to my fellow offic- will go some way to ensuring that shipowners do right by their crews, ers as we set up an Internet café, that the seafarers at our agency if somewhat belatedly. Its time for the terminals to respond to Ms nearly all have laptops and should be able to enjoy virtual reunions Ho’s call and do their bit to make a seafarer’s life more bearable. ]

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16 asiamaritime September/October 2010 ammarine insuranceamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Same old story, same old song It seems the only innovations in marine insurance are the exotic risks.

Just a few weeks ago the doors closed on another annual gathering of the In- ternational Union of Marine Insurance. What did it reveal? Yet another year of losses for the Hull & Machinery writers – the 14th in a row. Amidst a flood of red ink, Hull & Machinery premiums continue to get cheaper. And an IUMI report also showed that the old rearguard action of raising deductibles effectively fell out of use some 15 years ago. IUMI chairman Peter McIntosh took time to illustrate. Here is just one example: “A 1992-insured, brand new bulk carrier valued at $33.5m within A flood of new tonnage is arriving the region of 30,000 gt had a deductible applied of $100,000. Today, a brand new bulk carrier, again in the rates and a rise (actual and potential) in claims. Of immediate region of 30,000 gt and valued at $42m still has a deductible of concern is the high risk of claims arising out of laid up ships being $100,000.” brought back into service. IUMI president Deidre Littlefield alerted members to the risk back in August: “Laid up shipping is a worry- Beware the offshore refugees ing factor. Underwriters need to pay close attention to the various Of course, such figures arise largely out of the excess capacity that degrees of lay-up we are seeing, including the conditions of cover is always lured to the market, with some suggesting that the situa- for trading for vessels which have been idle without being deacti- tion will only get worse as capacity flees the energy market in the vated, or just lying at anchor or drifting awaiting firm orders, often wake of the Deepwater Horizon fiasco, looking for a home. Add with minimum maintenance and prone to collisions or typhoon to this the expectation that five new syndicates will begin running damage.” in 2011, along with three new commercial writers and the down- ward pressure on rates is likely to become irresistible. Maritime innovation So what is different? Well, the cargo insurance sector looks Looking to the future, while a newer global fleet than has been ex- set to report a technical loss for 2009 –its first in nearly ten years. perienced in years will be afloat, and this should be a good thing Facts and Figures chairman Cedric Charpentier who showed that for insurance underwriters, there will be new risks arising out of cargo premiums fell by 7.7% when the market was pushing up its new technology and design. loss reserves for the 2007 and 2008 underwriting years by 7%, un- Maersk’s recent comments about the possibility of operating veiled the shock news. 16,000 teu vessels is probably enough to chill the veins of any ma- With the floodgates still open and millions of dead weight rine underwriter. Add to this the drive for new hull forms and ad- tonnes due to hit the water monthly, it was little surprise that hull vanced propeller designs to reduce fuel consumption, the phasing premiums had increased accordingly but not at higher rates. In an out of the current panamax fleet of containerships after the widen- effort to combat demands from owners for even lower premiums ing of the Panama Canal, and there will be plenty for insurers to some insurers are trying to hold on to accounts by offering per- worry about for at least the next five years. formance or continuity bonuses. But most insurers insist they con- Just to put the final nail in the coffin, there is the matter of tinue to penalize bad owners with higher rates and deductibles. investment income. In the current low interest environment there is little chance of investment income making up for the poor un- W atch out, claims about derwriting results. Marine underwriters look certain to be stuck Exacerbating the position is the contrast between flat premium between a rock and a hard place for some time to come.

September/October 2010 asiamaritime 17 ammarine insuranceamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Breaking the mold AXA Corporate Solutions has gained its importance in the market by leading rather than following

T he London marine insurance market might gain attention “All of our risk managers and technical advisers are ex-sea for its willingness to entertain unusual and expensive risks. Asian captains or people with prior experience of supply-chain logistics,” insurers are increasingly an alternative for local shipowners. But says Mr Rueegg. “In addition we can supply a wide range of online AXA Corporate Solutions, part of the France-based AXA Group, is tools that will enable clients and underwriters to more effectively providing a third way to cover ocean-going assets. manage their risks.” While its ability to write up to EUR80m in Marine Cargo and Some examples of how the online tools can be employed in- EUR60m in Marine Hull is impressive, it’s not only the size of AXA clude decision-making tools for charterers that provide an assess- Corporate Solutions’ capacity that has given it a 5% share of the ment of a vessel that might be employed. The tool begins by linking global marine account with 8,500 ocean-going vessels covered. the user to the vessel’s history and salient features through its IMO But it helps. As the company’s chief executive in Hong Kong Mar- number, after which the charterer can decide the vessels’ suitability tin Rueegg points out: “Globally, we like to take a leading posi- for the task and the underwriter can better assess the risk. tion. In the case of ships this [capacity] allows us to write a sub- Such advice is also available in the case of new buildings stantial share.” AXA Corporate Solutions employs a similar strategy where the client could be either a potential owner or a charterer, with its yacht and cargo accounts. where the risk assessment might score lower if the vessel was built What has also helped the giant insurer to carve out a strong in an emerging Chinese shipyard. position in Asia is its 84 underwriters and 43 claims managers Other tools are available to assess risk in the transportation of worldwide. In Asia the company has dedicated marine teams in project cargoes that will take account of both sea and inland pas- Singapore, Hong Kong and Shanghai, all of which have the abil- sages. ity to write business. In South Korea and Japan AXA Corporate But even AXA Corporate Solutions is not immune to the cor- Solutions has joined up with local partners. “Chinese shipowners rosive effect of excess capacity. With a combined ratio of 98% on appreciate our global network,” says Mr Rueegg. “If one of their its 2009 Hull & Machinery income AXA Corporate Solutions made ships gets in trouble the speed of the response from our local 2% technical profit. This year is likely to see the whole market teams can often help to minimize the claim.” make a loss on the account, Mr Rueegg admits. Fortunately profits But perhaps, the clincher for AXA Corporate Solutions is the on the cargo accounts help to minimize the less lucrative marine risk management capability it offers to clients. Hull and cargo hull business. insurers have traditionally been happy simply to place the risk. At Accounting for what looks to be a difficult year for all Hull AXA Corporate Solutions a large team risk managers and technical & Machinery providers including AXA Corporate Solutions, Mr advisers are available both to the company’s underwriters and its Rueegg says claims relating to the now common practice of slow clients when attempting to manage the risk. steaming in the liner sector, and more generally a call for low sul- pher fuels are behind an increase in engine and boiler damage claims. Also contributing to an unfavourable loss ra- tio is the current economic uncertainty. “In eco- nomic bad times we see the losses increase,” says Mr Rueegg. There are engineering risks in recommissioning a vessel into service too quickly after a cold or warm layup. In addition moral risk plays a part. A convenient accident ahead of a spell at dry dock will ensure that the insurer pays,” he says. Mr Rueegg concludes, “ Even if premium levels were to remain stable it won’t pay the claims. The reality is we are seeing premium levels falling by an average 5%.” Caption:AXA Corporate Solutions has 8,500 vessels covered

18 asiamaritime September/October 2010 ammarine insuranceamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Flood warning Asia Maritime talks to Marsh senior vice president James Addington-Smith about the marine insurance capacity that is flooding the Asian market

Much coverage of global shipping is devoted to the impor- also the international markets (Lloyd’s) that established a presence tance of Asia in terms of hardware - the size of the fleet and the in Shanghai in 2007,” says Mr Addington-Smith. lion’s share of shipbuilding capacity. But it is increasingly the case Of the local Chinese market he says: “Five years ago, Ping An that the region can look to itself to offer the financial resources to insurance (PAIC) based in Shenzhen, withdrew from marine hull run such hardware. Insurance is a case in point. underwriting. However, In 2010 PICC, PAIC (re-entering the mar- ket in 2006) and CPPIC have over $100m of hull capacity alone. Hub status Whilst Hong Kong still has many important local players, the Chi- Amidst a burgeoning of marine insurance capacity in the region, nese market is aggressively targeting local Hong Kong business.” Singapore aspires to be its hub. Senior vice president and marine Indeed, some Chinese insurers are also starting to look at re- hull leader at broker Marsh (Singapore) gional marine hull business as another James Addington-Smith says: “The Singa- way to grow their top line in terms of pre- pore marine hull market has gone from mium income. a handful of major players in 2005 with This is all good news for shipowners marine hull insurance capacity of around but it comes at a cost to the insurance $60m, to a dynamic market with multiple providers in the context of the global ma- players exceeding $250m in 2010. rine market. Singapore does not claim its hub “Following an aggressive push by status on capacity alone, according to international companies to set up in the Mr Addington-Smith. “Whilst all Asian region (ie. Singapore), who have been countries including Hong Kong and China writing the Asian business very competi- have localised leading insurance compa- tively, we are now seeing the London/Eu- nies, the regional market (underwriting ropean insurance markets becoming more largely on a reinsurance basis) is likely aggressive for Asian business, at a time to follow only a handful of leading insur- when Asian insurers are trying to be more

ance companies, which are nearly all James Addington-Smith: “The Singapore market is a disciplined. based in Singapore. regional leader in terms of expertise and claims service.” “Whilst there maybe reasons for this, “The Singapore market is now the two points should be considered. Firstly largest in terms of capacity, and a regional leader in terms of ex- every insurer is still looking for new growth, and is there enough pertise and claims service,” he says. new business/growth to accommodate these growth plans for the Hong Kong remains an important shipping territory and the insurers? Secondly we are seeing new marine hull capacity in Eu- number of P&I clubs in Hong Kong reflects this. However, Singa- rope/London, which is being price-competitive to enter the market, pore has benefited from the growth of Lloyd’s syndicates as well as it is very difficult to differentiate their product. as new insurance companies. So can Singapore afford to sit on its “New Risk Based Capital requirements in Europe are making laurels? Not for long. insurers look at more short tail business. Marine Hull helps insur- ers diversify away from the traditional long tail claims exposures The great pretender like casualty business from their own internal risk management China and more specifically Shanghai, is pushing hard to establish point of view,” says Mr Addington-Smith. itself as the next marine hull insurance hub. Finally, the European market (including London) seems to be “You only have to look at the number of marine shipping making a comeback and being more aggressive on particular Asian conferences being held in Shanghai and the number of new ship- hull accounts, whether it be due to good loss records or distressed ping companies setting up there, to see the next logical step will business that underwriters in Asia don’t wish to write. Either way be more insurance companies underwriting marine insurance. you look at it Asian shipowners will be spoilt for choice for the Whilst there are the large local companies in Shanghai, there are foreseeable future.

September/October 2010 asiamaritime 19 ammalaysiaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam PTP Continues growth curve After defying the odds by increasing throughput in 2009, Port of Tanjung Pelepas is still growing

In the first six months of this year Malaysia’s Port of Tanjung Pe- lepas handled 3.17m teu, an increase of 13% over the same period in 2009, when the port processed 2.78m teu. Compared with other ports in the region this is a respectable growth figure. What makes PTP different from nearly all its rivals in Asia is that while others saw their box throughputs plummet in 2009, the figures for Johor Port just kept growing. In 2009, PTP handled 6m teu, a 7.5% increase over the previ- ous year. Executives at PTP were coy when asked to come up with an answer for the movement against the terminal grain in a year of downturn. It can only be speculated that the 4% drop at Westports Box volumes grew at PTP even in 2009 Port Klang may have something to do with it. And PTP’s charges are far more competitive than that of Singapore. “Going forward, higher productivity, lower operating costs and Deputy chief executive Azlan Shahrim says: “On average, an increased capacity of 8.5m teu will enable the port to deliver a charges at PTP is 30% lower (tariff to tariff) compared to Singa- higher service level cost-effectively,” Mr Shahrim added. pore.” In September he told Asia Maritime: “We are expecting to Productivity at PTP has also been highlighted after the terminal experience another year of growth this year. If all goes as planned, claimed that it had met its goal of 35 moves per hour compared we expect our full year throughput for 2010 to be 6.5m teu.” with an industry average of 25 moves hourly. As a result of the ef- PTP already entertains three of the world’s top liner companies: fort and an upswing in global box volumes 2010 could be a record Maersk, CMA-CMG and Evergreen, along with local giant MISC. year as it records its 10th anniversary. Mr Shahrim told the local So now the port operator is turning its attention to enhancing its press earlier this year: “PTP’s monthly volume in May was the high- feeder connectivity and increasing its mix of local cargo in order to est recorded in the port’s history. attract more shipping lines. ]

Northport polishes up its cranes T hroughput at Malaysia’s Northport facility in Port Collin Swee, Director, Cargotec Terminal Business Malay- Klang increased a remarkable 26% in the first half of 2010, sia, says that the crane refurbishment project aims to extend compared to the same period in 2009. Based on the results the lifetime of Northport's quay cranes while offering im- for the first six months and forecasts, Northport is expected to proved return on its initial investment. handle 3.5m teu for the year. "These cranes are 10-15 years old, but they are still in As part of Northport’s plans to meet new demand for han- good structural condition. We expect that their life expect- dling capacity the operator has called in Finnish engineering ancy will be extended by a minimum of 1 million cycles. firm Cargotec to refurbish and upgrade ship-to-shore cranes. With newer generation electrical and electronic components, Eight cranes, capable of 48m outreach, will be completely the reliability and uptime of the cranes will be significantly refurbished with digital electrical system technology. Up- improved.” grades will be made to the cranes' PLCs, speed drives, control The 20-month retrofit project will see cranes redelivered monitoring systems, motors, cables, brakes, festoon systems, progressively, with the first back in service by end first quarter operator cabins and load weighing systems. Two further post- 2011, and the last operational by first quarter 2012. The sepa- Panamax cranes will be raised in height to accommodate rate crane height increase project will commence early next larger container ships. year. ]

20 asiamaritime September/October 2010 ammalaysiaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Malaysia’s shipbuilding mystery Malaysia’s leading shipping conglomerate is looking to add the icing to its 2010 cake

A fter a difficult first quarter MISC announced a bumper sec- for Petronas, and upgrading of selected plant at the Pasir Gudang ond quarter in August, as year-on-year net profit soared 72% to yard. The listing is set for 29 October. $147m, compared to the same quarter in 2009. But revenue fell to RM3.3bn ($1.07bn) during the quarter. IP O spoiler alert Broken down, liner and logistics accounted for RM597m, offshore In an interesting backdrop to the MMHE sale it was reported in and engineering accrued RM1bn in revenues and the company’s August by certain UK-based shipping press that Samsung Heavy energy activities brought in RM1.6bn. Industries, the world’s second largest shipbuilder was considering In a statement MISC attributed the change in its fortunes to im- a $165m investment in a shipbuilding yard just down the road proved performance in its liner business after radical restructuring, from MMHE at a waterfront in southeast Johor. although it was still a loser at the operating level. Increased profits The idea, according to a report citing Mohamed Basir Moham- from its heavy engineering business was also at the heart of the ed Sali, the general manager of the Johor State Investment Centre, recovery. was for SHI to occupy 400 acres to build a shipyard that would conduct shipbuilding, repair and conversions. MIC S moves to reduce carnage According to the report Mr Basir even went as far as to say that As the downturn turned to outright depression MISC was among the SHI investment would be completed by 2013, contributing its those that acted most vigorously to combat its effects. It laid part to an overarching scheme to convert the region into a heavy up containerships and withdrew entirely from the Asia-Europe industrial zone and frustrate the plans of others to increase mining trade to the calmer waters of intra-Asia business and the Middle activities. East, where it launched new services. The fast action has paid However, an investor relations’ spokesperson at SHI tells Asia dividends. Maritime in no uncertain terms that no such deal exists. Mr Brian Now MISC is looking to add an additional RM2bn to its bot- Lee, who is in charge of SHI’s business in Southeast Asia, says: “Our tom line this year through the sale of 25.5% of its shipbuilding company has no investment plans in Malaysia at this time.” and engineering subsidiary Malaysia Marine & Heavy Engineering. This is probably just as well. Otherwise the value of the HHME MISC unveiled its prospectus on October 6 on what is likely to shares would sea at a fraction of the price. ] be the country’s largest initial public offering this year. JPMorgan Chase & Co., Maybank Investment Bank Bhd and Credit Suisse Group AG are managing the share sale. MISC has set an indicative initial offer price of RM 3.80 per share for the listing of Malaysia Marine, according to a circular approved by shareholders on 22 September. At least part of the stake being made available is to be snatched up by French offshore support com- pany Technip. Lured by MMHE’s core business of con- verting very large crude carriers, tankers and offshore oilrigs into floating, production, storage and offload- ing units and other offshore plant, Technip is expected to pay a 2% premium over the final price. Also in the frame is local oil major Petronas, which announced in August that it would join up with Tech- nip to take a minority stake of 8% to 9.9% in the yard. MMHE has said that it intends to deploy the funds by building up capital expenditure and for working capital. An amount would also be set aside for invest- MISC has made a remarkable recovery ment in the facilities in Turmenistan that it manages

September/October 2010 asiamaritime 21 amship financeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamammamammamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamammamammamamamamamamamamamamamamamamamamamamamammamammamamamam China’s financial largesse In a move that will seal China’s ambitions to be the world’s largest shipbuilder the government is making vast sums available to foreign shipowners

The visit of Chinese premier Wen Jiabao to Greece during the The first deal provides $111m for the Angelicoussis Shipping first weekend of October has left a number of cynical shipping ana- Group from China-Exim Bank and DnB Nor for three small capesize lysts scratching their head. There was very little indication that the bulk carriers each of 114,500 dwt that the company has on order at Chinese premier would join with his Greek counterpart to give no- Shanghai Shipyard for delivery in 2011. tice that a $5bn fund would be made available for the financing of The second China-Exim Bank/DnB Nor deal provides $82.6m Greek Ships built in China. for two newcastlemax bulk carrier newbuildings weighing in at The story was, according to the analysts, China was out to build 206,000 dwt. Ordered by Diana Shipping at Shanghai Jiangnan- up not only its shipbuilding capability but also its shipowning capacity. Chanxing, both vessels are scheduled to be delivered in 2012. As part of government policy China would lend to its nationals first. Simultaneously China Development Bank signed a loan facility of $74.2m for Cardiff Marine’s very large crude carrier ordered at A plethora of loans Shanghai Jiangnan-Chanxing to be delivered in 2011. Instead, what the shipping world saw on that groundbreaking day It would seem that all that was required in return was a little was the Export-Import Bank signing its first two loans to Greek own- technology transfer. At the same ceremony Cardiff Marine and the ers as the China Development Bank inked what was possibly the China Classification Society signed a cooperation deal that would first full bilateral contract with a Greek owner, thus bypassing any see them exchange information and CCS join up with ABS to dual- participation by a non-Chinese bank. class Cardiff’s VLCCs.

Top 15 Shipping Loans 9-mth 2010 Credit Date Borrower Deal Value Deal Nationality Mandated Arranger Parent ($m) 23-Sep-10 AP Moller - Maersk A/S 6,750 Denmark BNP Paribas; Bank of America Merrill Lynch; Mitsubishi UFJ Financial Group; Citi; Danske Bank; HSBC; JPMorgan; Nordea; RBS; Svenska Handelsbanken; Santander; Barclays Capital; Commerzbank; Credit Agricole CIB; Deutsche Bank; DnB NOR; ING; SG CIB; SEB; Standard Chartered Bank 09-Sep-10 Vale SA 1,223 Brazil Bank of China; Export-Import Bank of China 01-Jun-10 SeaDrill Ltd 1,200 Norway BNP Paribas; Bank of America Merrill Lynch; Deutsche Bank; DnB NOR; Eksportfinans; Danske Bank; Banque Federative du Credit Mutuel; HSBC; ING; NIBC; Natixis; Nordea; RBS; Sparebank 1 SR-Bank; Swedbank Markets 15-Mar-10 Royal Caribbean Cruises Ltd 1,130 United States Citi; BNP Paribas; Nordea; SEB 10-Aug-10 Acergy Treasury Ltd 1,000 United Kingdom DnB NOR; ING; Lloyds Banking Group; Nordea; ABN AMRO Bank; Barclays Capital; Credit Agricole CIB; HSBC; Natixis 02-Sep-10 Jan De Nul Group 958 Belgium BNP Paribas; ING; KBC; Dexia 17-Jun-10 SBM Holding Inc SA 750 Switzerland ABN AMRO Bank; BNP Paribas; Mitsubishi UFJ Financial Group; ING; Mizuho; Rabobank; BBVA; Credit Agricole CIB; Lloyds Banking Group; NIBC; Natixis; RBS; SG CIB; Sumitomo Mitsui Financial Group 23-Mar-10 Ship Finance International Ltd 725 Bermuda Credit Agricole CIB; ABN AMRO Bank; ING; Nordea; Scotia Capital; SEB 30-Sep-10 Nippon Yusen Kaisha (NYK Line) 713 Japan Mitsubishi UFJ Financial Group Top 15 Shipping Loans 9-mth 2010 26-Aug-10 Oceanus Maritime Ltd 588 United Arab Emirates AKA Export Finance Bank; Deutsche Bank 02-Jul-10 Reederei Bertram Rickmers 565 Germany DnB NOR; HSH Nordbank 09-Sep-10 eritable Maritime Holdings LCC 550 Marshall Islands DZ Bank; Nordea 23-Aug-10 Modern Terminals Finance Ltd 527 Hong Kong Bank of China; Mitsubishi UFJ Financial Group; HSBC; Mizuho; OCBC; Standard Chartered Bank; Sumitomo Mitsui Financial Group 30-Mar-10 P&M Drilling International BV 497 Brazil Mitsubishi UFJ Financial Group 10-Sep-10 KS Membrane 1 400 Denmark BBVA; Banco Espirito Santo; NIBC; Natixis; SG CIB; UniCredit KS Membrane 2 Group; WestLB; Banque Federative du Credit Mutuel; ITF International Transport Finance Suisse; Sumitomo Mitsui Financial Group Source: Dealogic

22 asiamaritime September/October 2010 amship financeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamammamammamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamammamammamamamamamamamamamamamamamamamamamamamammamammamamamam

Signs of a change the market believe that the European banks are staging a mass if If the truth be told, observers should have had an inkling that some- glacial withdrawal from the shipping sector. This was not borne thing was afoot. In September the director of shipping finance at out by a report from financial analyst Dealogic in October, which China’s transportation finance department Li Dan told delegates at showed that banks loaned more than $16bn in 36 deals during the the Shipping China conference in Beijing, the country was about third quarter of 2010. The figure shows a marked contrast to the to change its approach to ship finance from purely encouraging the $5bn loaned in the second quarter. growth of its shipbuilding capacity, to a broader model. The highlight The lion’s share of the cash went to AP Moller Maersk in a Sep- of her address was the comment: “We encourage overseas shipown- tember deal worth $6.7bn. ers to borrow in yuan for their newbuildings. It is significant that Chinese money makes its first show on a There was also, of course the earlier news that Chinese state- mandated arranger table with both Bank of China and Exim bank of owned banks would lend Brazilian miner Vale around $1.2bn China making an appearance. to finance up to 80% of its 12 very large ore carriers on order in Meanwhile, the predicted death of syndicated loans by observ- China. ers was also ahead of its time (see table). Among the top 10 mandated lenders the top two are Europeans, Life in European banks yet Nordea and DnB Nor. The top Japanese lender was Mitsubishi UFJ at Said analysts referred to at the top of this story would also have had third place and Bank of China managed to slip in at 10. ]

Japanese banks and the ship finance conundrum In September Asia Maritime spoke to a prominent Japanese banker about the prospects of the country’s banks assisting in the funding of global shipping

The JaPANese banker Asia Maritime spoke to would (unfortu- in Africa. When it comes to Japan the trading houses are lead- nately) only speak under conditions of anonymity. We hope that ing by developing commercial deals. In China it’s involvement this does not weaken the value of his comments. with Africa and its resources is more a matter of government What is clear from the discussion is that Japanese banks with a policy.” ship finance portfolio are not likely to come to the rescue of Euro- It is true that Japanese business is looking to overseas for ex- pean owners any time soon. pansion. But it is still the case that Japanese banks and insurers “In every country banks are taking a more nation-centred view tend to spread their wings in a bid to cash in on the success of of their lending obligations. The Japanese banks continue to offer companies they are already servicing at home. strong support to the big five companies of Nippon Yusen Kaisha, Equally it is still the case that what gets the juices of a Japanese Mitsui OSK Line, K Line, Sanko Steamship and Shinwa Kaiun,” bank working is a focus on cash flow driven exercises, which has he says. always been their remit. However he qualifies this broad statement. “A contrary im- Japanese banks have rarely been interested in asset values or pulse, faced by stagnation, is to expand business overseas. This pure debt financing. drive, as ever is being driven by the Japanese trading houses, fol- “For example, my bank has been involved in LNG projects lowed by businesses and lastly the banks. “This can be seen as a and we have been involved in long-term COA business. We are positive sign,” the banker insists. happy to invest in such long-term contracts as far as we can see “There is much publicity given to China’s growing presence that they are strategic and they make economic sense.” ]

September/October 2010 asiamaritime 23 amship financeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamammamammam Winners in the search for global capital If European banks turn off the finance tapA sia will be the winner

The collapse of Lehmans in 2008 could be likened to a finan- The question at this stage is to what extent can European own- cial earthquake. Does the decision by HSH Nordbank to cease fur- ers looking for capital get a slice of the Chinese finance that Tiger is ther loans to shipping, and the Lloyds Banking Group’s withdrawal benefitting from? from the sector amount to aftershocks precipitating a more general “Asia, specifically China, is still in the export phase of its growth. retreat from maritime by European banks? And shipbuilding is part of the export led growth of China. This leads According to managing director of Hong Kong-based Tiger to a prioritization from a policy perspective resulting in Chinese Group Investments Julian Proctor: “The European financial system banks supporting Chinese shipowners,” he says. has been holed beneath the water-line materially. “It is an inevitable consequence that if you build a capability in “As a result the larger European banks will be reassessing their an area you can use it for different objectives but in the short term long-term strategies. Shipping is a small part of their overall portfo- policy decisions will override that. You will see more of the capital lios. To drop it would be an easy decision to make.” flow through to projects that are important for the PRC.”

Thinking of home China to the rescue? A significant part of the rationale for the western financial sector, “Would China support European owners, over and above the excep- according to Mr Proctor, will be to boost its domestic economies: to tional one-off deals we have seen? Possibly. But it’s unlikely in the lend for residential mortgages and support small- to medium-sized short to medium term,” concludes Mr Proctor. enterprises. Supporting the remnants of a European shipbuilding sec- In the longer term the picture could be brighter for Europeans. tor will not be a priority. “Naturally you will see a lot more involvement in finance in Asia. “Essentially,” Mr Proctor maintains: “Deficits of capital are form- Asia has more savers than the West. You will start to see Asian banks ing. We are in the early stages of that process. It will take time to see professionalise their teams by bringing in external talent and scaling how companies act on deficits of capital, when asset prices fall. They their businesses. They will eventually Internationalise and at some have a number of choices, including selling those assets.” time diversify beyond their home markets,” he says. But a splurge of sale & purchase activities and the startling In the meantime, while Tiger Investments capitalizes on its privi- number of bulk carrier newbuildings ordered this year might belie leged position in the Chinese marine sec- that assertion? However, Mr Proctor questions the reality behind the tor others might look to Mr Proctor’s return of orders in 2010. other vehicle Sea Tiger – an alterna- “ The truth is there is a lot of capacity and a scarcity of capital,” tive lender that has positioned itself he says. “There has been some activity in S&P and some ordering to provide capital to companies but the core conditions have not changed. At Tiger we are not going that cannot access it in Europe or to change our views because of the white noise that might be going North America. ] on,” he says.

On the prowl Tiger Group Investments has made its lair in Asia, particularly China. “Our Primary theme is how we can play an important role in Chi- nese growth and reshape the maritime industry in China. “When it comes to shipowning we are primarily interested in containerships and large bulk carriers. A key component in our in- vestment decision is not only in having cost effective vessels but the ability to secure credit and capital in that market. Above and beyond the cost of capital we look to the availability of the capital and the Managing director Tiger terms involved. We do a lot of that in China because there is capital Group Investments Julian in that market at the right price,” explains Mr Proctor. Proctor

24 asiamaritime September/October 2010 amlogisticsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Fashion with a passion With the help of an innovative container and 30 years of experience Logwin has carved itself a niche in the lucrative fashion transportation industry.

Third-party logistics provider Logwin has been at the cut- selves to core capabilities. Now Logwin is asked to bring more to ting-edge of fashion since the 1970s, when the mass of global tex- the catwalk. “Our value-added logistics services are growing as tile production moved to Asia. Logwin’s regional sales and market- manufacturers are increasingly outsourcing to third party logistics ing director Scott McArthur says: “Logwin had always been closely service providers, says Mr Smeja. aligned with the textile industry, focusing on the same sector across “ The value-added services we offer include applying labels, the Asian region was a natural step for the company to take.” inspecting goods, picking, packaging, co-packing, display building, price tags, labeling, bar coding, quality control, return manage- The seasonal challenge ment, disposal, recycling and customs services. But in one of the fastest changing “Logwin offers tailored industries it is a constant battle to additional services at adapt and thrive. “In the past 30 every point in the flow of years the market has shifted once goods. We look after the again. In some Asian countries textile packaging of the shipments manufacture has become very rare. as well as visual quality Korea and Taiwan are examples of control. We also organize this. Lifestyle and consumer behav- return management and iour have changed and these markets the disposal or recycling increasingly demand luxury articles of packaging materials from the fashion and lifestyle sector and products. Logwin as- instead. This trend is even evident sumes responsibility for in China despite the significant dis- example, for the ironing of tance between production location textiles. Our IT systems are and overseas consumer destination streamlined to special re- in a country of that size,” says Mr Logwin’s regional sales and marketing director Scott McArthur quirements of the fashion McArthur. industry, for example ar- Manager sales and marketing Southeast Asia Andreas Smeja ex- ticle numbers added to denote the style, size and colour of each plains how speed and efficiency is of the essence on a day-to-day garment,” he says. basis: “Over time, textile manufacturers have increased the number of their collections from two to four a year (and in some cases even Box of tricks as many as twelve a year) flying them into Europe by air. Today it is One of the greatest challenges presented by the carriage of often predominantly sample merchandise that travels by air, specifically extremely delicate fabrics must be the rapid change in climate high quality, fast-moving textiles, shoes and accessories.” conditions across the world. Fortunately Logwin got this sussed But with a burgeoning middle-class across Asia traffic in high- ten years ago. “Our proprietary AirTextainer plays a big role in the fashion wear is a two-way traffic. “The Europe-Asia route has fashion and retail sectors. This solid transportation unit is available expanded strongly. We see an increase in flights with clothing of in four different sizes, designed to fit onto airfreight pallets and un- all types from Italy, France and Germany to Asia, as well as within der airplane door heights as well as into Oceanfreight containers. Asia. For example: not only do we deliver goods to a customer in It allows for safe, intermodal transportation of hanging clothes. The Singapore from the manufacturing plant in China but we are mix- AirTextainer also offers space for a variety of accessories. Its air- ing the deliveries true-to-cycle with fashion and lifestyle products conditioning system compensates out the different temperatures from Europe,” says Mr Smeja. on the ground and in the air, and goods are well protected all the way,” says Mr Smeja. Added-value Worldwide, Logwin moves over 5,000 AirTextainers annually Simply getting delicate high-value goods from A to B, is no longer - and no damage or loss of individual pieces of clothing has been sufficient when manufacturers are increasingly trying to limit them- reported since it was first deployed.]

September/October 2010 asiamaritime 25 amlogisticsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Agility the key to success in An emerging market International Logistics provider Agility is contributing to Cambodia's development

When Agility set up office in Phnom Penh, Cambodia in Au- but it is improving. With Multi-national Corporations investing and gust this year it hit the ground running, offering services to both moving production into these countries, infrastructure has to im- locally-based and network customers operating in the country. prove to cater for their ongoing demands. Agility Cambodia is also partnering with customers who would “The short answer to the present shortcomings is that we have like to operate in Cambodia but have not had an experienced lo- to be innovative in facing challenges such as flooding or power gistics company to work with. outages but we are prepared and have contingencies in place to “A range of airfreight, seafreight, customs clearance, warehous- manage these eventualities. We also have local people managing ing and local domestic distribution solutions will be offered. A our operations throughout Cambodia which helps overcome many cross border trucking service initially connecting Ho Chi Minh to a problem,” he says. Phnom Penh and Bangkok to Phnom Penh What does such an operation bring to a will be available, followed by services link- country like Cambodia over and above short ing South China and Vietnam,” says chief term benefits such as goods to destination? executive Southeast Asia Mike Gildea. Mr Gildea is proud of the fact that in “This gives us the opportunity to of- setting up in Cambodia the company will fer a combination depending on cost and also be contributing to its overall develop- required service level, of land, air and sea ment. “We bring experience and this is a mixes,” he adds. great comfort and boosts confidence with Agility Cambodia will also focus on oth- those MNCs and small - and medium-sized er key sectors including Project Logistics in enterprises who would like to do business the oil and gas sector and Fairs, commercial here. events and Exhibitions “We introduce greater efficiency in the It is to be expected that a logistics busi- supply chain by identifying areas that can ness, where speed of delivery and efficiency be improved and that can reduce costs and of service is an important part of any supply go straight to the bottom line of our custom- chain equation, would experience difficul- ers. And we make the supply chain easier ties in one of Southeast Asia’s least devel- because we manage it for them,” he says. oped countries. Mr Gildea dismisses the “We also see demand is growing for a suggestion. broad range of freight and logistics services. “The fact Cambodia is a developing Agility SE Asia chief executive Mike Gildea There is a significant increase in interna- economy does not mean one has to com- tional trade from Cambodia to the US and promise on service or quality; quite the reverse, best practices can Europe, as well as to the rest of Asia. There are also signs of a be deployed and this includes green environmental practices,” he growth in cross border trade within Indochina and between Asean says. countries. This is good because it’s creating jobs in the region.” “In emerging economies such as Cambodia there is an oppor- By introducing technological innovation, Mr Gildea claims tunity to provide the latest technology to green field sites and ‘leap the company is bringing improved efficiency in the supply chain, frog’ more developed economies where they have older legacy reducing costs and enabling decisions to be made more quickly, systems in place. while creating jobs and skillset training in the local population. “Also we are able to train local staff to adopt the latest work “This enables us to give back to the community and help the coun- practices and utilise new technology rather than re-training staff try develop,” he says. who have established work practices that are harder to change.” “More companies as a result will invest and the economy will But Mr Gildea will concede that the sheer lack of a developed grow and we want to be a part of this. We think long-term when physical and technological infrastructure can present difficulties. investing and Cambodia is a fundamental part of our strategy for “It is a challenge in Cambodia and in many areas of Indochina Indochina.” ]

26 asiamaritime September/October 2010 amlogisticsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Go Kart Kerry Logistics continues to update its Southeast Asian trucking network

Kerry Asia Road Transport, a member of Kerry Logistics and the Thailand-based road transport specialist provides a trucking network that stretches across Southeast Asia and connects into its China net- work via Kunming. Kerry Logistics built the first Asean cross-border trucking serv- Mr. Chaiyavuthi Broese Van Groenou, general manager of KART ice, connecting Thailand, Malaysia, Singapore, Vietnam, Laos and Thailand expects an at-least 30% demand growth in their cross- Cambodia, providing door-to-door services throughout the region. border services via the East Western Economic Corridor linking up KART connects Vietnam to all South East Asian countries and also Thailand and Vietnam in 2010. several destinations in China. Meanwhile Kerry Logistics is offering further support to KART Trucks connect on a weekly schedule between Bangkok and operations through the expansion of its handling capacity and in- Kunming, China on 40-foot Hi-Cube (LCL and on demand FCL) and creased crane moves following the delivery of a third gantry crane from Vietnam to Guangxi. at its Laem Chabang terminal in Thailand. In China, Kerry has a nationwide transport and logistics plat- form established for more than 20 years, which connects with the Fast mover KART network through its Kunming transport hub in China’s South The gantry crane, which takes the total to three at Kerry Siam Sea- West. port, started operations in April and has increased terminal lifting capacity to 85 moves per hour from 65 moves per hour. N ew options “In order to increase our competitiveness we are investing to ‘The new integrated network will provide shippers with an option improve many aspects of container handling, yard management and to truck directly to anywhere in South East Asia or China and the IT systems. The new crane is a key part in this improvement strategy service will also provide direct connections to major airports and as we strive to deliver a consistent level of service and reduce port ports,” says Mr. Alex Ng, assistant general manager of KART South- stay times for our shipping line customers” said Kledchai Benja- east Asia. athonsirikul, Director & General Manager, Thailand. “With our trucking fleet and a state-of-the-art IT system we will KART executives say the company is aiming to increase its cross provide an integrated trucking service with full visibility throughout border business between Thailand and Vietnam by one third in the supply chain,” he adds. 2010. Kerry Logistics offers a portfolio of services across South East KART’s major customer for this door-to-door service is a leading Asia and China including international air, sea freight forwarding, beverage cans producer in Bangkok, Thailand transporting products warehousing, distribution, express, customs brokerage and seaport to Lao Bao in Vietnam, a distance of 880 km which takes three days operations. from pick up to delivery using the EWEC in Laos. ]

Kerry Logistics gains wine storage certificate Kerry Logistics has received the Wine Storage Manage- Kerry Logistics manages wine logistics operations in 24 ment Systems Certificate from Hong Kong Quality Assurance countries. Services include international freight forwarding, im- Agency – an award for excellence in wine storage management. port/export handling, optimal cellarage conditions, distribution The company has 29 years experience in wine storage and and value-added services. delivery and has been working with Hong Kong’s top two wine “We are pleased to receive HKQAA certification follow- traders for eight years. ing a rigorous audit and inspections. Since Hong Kong is now The SAR government abolished the import duty on wines recognised as a leading hub for the wine industry there will be in 2008, resulting in a boom in the import/export and auction- many opportunities for us to expand our network in the future,” ing of wine in Hong Kong. The value of the wine business is said Jesse Lui, executive director. ] expected to increase to HK$4.64bn by 2013.

September/October 2010 asiamaritime 27 amheavy liftamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam The Vyborg Project Members of Dockwise and its contractors completed a complex float-over in the face of arctic conditions and a demanding timeframe

Netherlands-based Dockwise is currently executing the to three years. So the Vyborg float-overs took place in Korea, close second of two innovative float-overs for the Vyborg Project in Ko- to the Samsung Heavy Industries yard, since the rigs were needed rea. The Vyborg Project is big in scope and size. It involves moving around Sakhalin. The project’s change of venue from Murmansk two 15,000 tonne semi-submersible hulls and two topsides that to Korea meant that Dockwise had little time (three months to be weigh around 19,000 tonnes each. These pieces were constructed exact) to complete work that previously took seventeen months in locations more than 27,000 km apart and the Dockwise vessel to accomplish. “We needed to be very flexible,” says John van the Black Marlin was used to successfully load the first of two top- der Woning, Dockwise Project Manager. “The equipment (such sides for transport to the float-over location in Korea, to be joined as tugs, complete mooring spread and anchoring equipment) that with the first hull that we’d planned to have was transported from available in Mur- Vyborg, Russia by the mansk now needed to Talisman. be available 27,000 At one point dur- km away in Korea.” ing the first float-over After the Black execution in July 2010, Marlin docked into around 60 members the hull, which was from Dockwise and its ballasted down to 27 contractors were working metres draft, ballast together onsite during operations were initi- the final stage. This work ated in order to lock included the deployment the Leg Mating Units of an anchor spread with and align the hull col- twelve anchors, the final umns and the topside. outfitting of the hull that Next steps included was fabricated in Vyborg, welding the columns Russia, and the final to the topside, after preparation of the Black which they released Marlin and topside by the load from the Leg installing measurement Mating Units and be- equipment. gan ballast operations to transfer the full load of the topside onto It was also within Dockwise’s scope to design and install the the hull columns. Finally, the Black Marlin was retracted from the pre-laid anchor spread, hook the hull to this spread, and ballast completed rig and de-ballasting operations were completed. the hull to its mating draft. This phase of the project involved the The transport of the second hull began in late August of this use of five tugs, two anchor handlers, one workboat, two anchor year. The hull is scheduled to arrive in Korea later this fall. Upon ar- barges, one test barge, a crane barge, three launch boats, and rival, the hull will then be immediately prepared for hook up to the standby vessels. anchor spread, which was left in place during the first operation. An especially innovative feature is the “floating float-over” as- “During this same period, the second topside will be skidded pect of this project: This float-over was completed without a fixed onboard of the Black Marlin, which has received minor modifica- structure. “Instead, we had a floating semi-submersible hull that we tions as a result of the lessons we learned during the first operation. anchored and ballasted down before we performed the float-over The goal is to start the float-over at the end of October,” says van operation,” says John van der Woning, Dockwise Project Manager. der Woning. “After completion, the Black Marlin will go to a rein- The original location of the floating float-over was in Mur- statement yard to bring the vessel to its original configuration for mansk, Northern Russia, in subarctic conditions. However, the de- her next contract. Meanwhile, we will have to remove the anchor velopment of the Shtokman Gas Field has been postponed for two spread and return all equipment to their original locations.” ]

28 asiamaritime September/October 2010 amoperationsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Climb paper mountains Michael Grey laments the growth in ocean-going bureaucracy

We have become used to ships’ officers complaining about the that jobs are being assiduously protected in the various agencies? mountains of paperwork that afflicts them, whether their ship is in It is said that the disappearance of so many jobs in the Customs, port or safely at sea. “If I wanted to look endlessly at the printed when Europe’s land frontier checkpoints were removed, has made word, I would have become a librarian” is the sort of remark that these authorities determined that there will be no similar econo- one tends to get, especially from officers of a certain age, who mies on the marine frontiers, where all the meaningless paper- remember that when they were young cadets, the Chief seemed work no longer required in intra-European road haulage, remains to live the life of Riley, compared to their mostly desk-based func- to plague people in ships. tions today. A report in ABS’ “Surveyor” tells of a study undertaken by It is a serious point, when a shipmaster writes that such is the shipmanagers Interorient Navigation, which wished to have a level of paperwork he has to wade through, the time available to better idea of the paperwork burden upon their sea staff. Profil- train and mentor his young watchkeep- ing the paperwork aboard six ing officers is badly constrained. Some handysized product tankers, it would retort that he is lucky he’s not revealed that each day, the total keeping a watch, in addition to clam- average time spent by the officers bering around the paperwork. on administration was 19 hours, Bureaucratic burdens faced by those 31 minutes. The masters on these aboard ship are a mirror of that which ships were averaging 3 hrs, 35 afflicts so many different professionals minutes on administration, while ashore. Schoolteachers, healthcare pro- the chief engineers and chief of- fessionals, those involved in law enforce- ficers were spending nearly four ment – they are just some of the people hours every day on the planned who, instead of respectively teaching, maintenance system, in addition treating sickness and catching criminals, to a similar order of time on oth- spend inordinate amounts of time on pa- er tasks. Many people, including perwork. The explosion of checking, in- this writer, went to sea in the first specting and auditing is almost universal, place, partly to avoid the unat- it’s not surprising that it has spread to the tractive alternative of working in world afloat and to the operation of ships an office. It seems a bitter irony at sea and in port. It used to jokingly be that most officers will now spend said that “for every man digging a hole, such a proportion of their time, there would be half a dozen checking up crouched over a computer. on him”, but this has a hollow ring to it, In an earlier generation the as this sort of reality permeates around “captain’s writer” was to be the world. found on busy ships helping to A containership making a multi- ease the bureaucracy and en- port rotation around Asian waters will abling the master to spend more produce a multitude of documents for of his time on the job of “safely different authorities in each port, but with the same information prosecuting the voyage”. formatted differently according to the different requirement in But this was before the onset of the bureaucratic “tsunami” each port. Why can this so-called “facilitation” not be provided in which has afflicted modern life, and before the scrutiny of the a common format, which, in these days of computerisation, could International Safety Management Code and so much similar regu- be provided so much more easily? latory oversight in which the ship must play the major part. The Come to think of it, why is it necessary to have a ridiculous “paperwork must be perfect” it is said, if a closer inspection is to procession of individuals representing separate authorities up the be avoided. gangways of every ship that calls? Cannot this data be provided It would be a giant step for “seamankind” if a closer and more automatically and remotely, prior to the vessel’s arrival? Or is it analytical view might be taken of the bureaucratic burden. ]

September/October 2010 asiamaritime 29 amimoamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Entertainer or seafarer? Sandra Speares highlights some of the possible conflicts that could arise from the implementation of MLC 2006

The Maritime Labour Con- personnel may not be directly vention 2006 is expected to come employed by the operator but into force either late next year will be working on short con- or early in 2012, but there still tracts from a third party. Berth remain a number of issues and and cabin space requirements ambiguities to be sorted out. may also present difficulties The aim of the convention is for smaller specialist ships. to protect the rights of seafarers The social partners rep- and ensure good living conditions. resented by the International It also serves as a means of ensur- Shipping Federation and the ing there is a level playing field International Transport Work- for good operators in the shipping ers Federation, together with industry compared to those who ILO member governments operate sub-standard ships, or cut met in Geneva in the week The cruise industry is disputing the MLC definition of a seafarer corners on crew welfare. commencing 20 September to While the convention aims to bring together various Internation- discuss matters relating to preparing for entry into force. al Labour Organisation standards within a single convention, there Natalie Shaw, director of employment affairs for ISF says “the are some areas that still cause concern to both owners and unions meeting provided governments with an opportunity to discuss alike. progress they are making with regards to ratification and entry into For example provisions regarding the payment of wages to sea- force and points they need to be clarified. We welcomed the oppor- farers repatriated for medical reasons contained in MLC 2006 could tunity to participate in these important discussions.” conflict with Jones Act requirements in the US. The ILO is also facing particular challenges with regard to the Other potential areas of conflict that have been raised include compatibility of the seafarer identification document outlined in the possible inconsistency with international conventions like the Inter- Seafarer Identity Documents Convention (Revised) 2003 (ILO 185) national Ship and Port Facility Security Code, notably as far as ran- with documentary requirements in individual countries – for exam- dom inspections of vessels are concerned. ple the United States. The specific demands of specialist sectors of the shipping in- Some of the larger flag states have pointed to the fact that of dustry also raise challenges. On cruise ships working hours and rest those signatories of ILO 185, most have a minor role to play in ship- periods may vary from those employed on bulk carriers or container- ping. They are also concerned that given the international nature of ships. Shifts may not be four hours on four hours off but concentrat- the shipping industry, dealing with identity documents coming from ed round the routine of the vessel – passenger meal times, onboard more than 100 different jurisdictions, discrepancies, or failures to entertainment activities and the like. comply with the rules are bound to creep in. The definition of “seafarer” is also one which is not necessarily Shipowners’ organisations argue that potential conflicts with applicable to those serving on cruise ships, or so the cruise operators international and national regulation may also be likely, with all the argue. Should an entertainer, for example a cabaret dancer on the potential legal pitfalls. ship be classed as a seafarer for the purposes of the convention? Can US requirements for crew visas, not to mention the European cruise companies contractually require compliance with the conven- Schengen agreement, are potential sources of disagreement. Special- tion from recruitment agencies, where agents are receiving a part of ist recruitment consultancies like Spinnaker Consulting have already the dancer’s salary? raised the mobility of maritime staff requiring a visa to visit, even on Other issues turn around the definition of “what is a ship”. This a temporary assignment, in certain jurisdictions. particularly applies to offshore drilling units, which are stationary The consultancy has heard of occasions when certain nationali- and therefore may not meet the classic definition of a ship. ties have been favoured above others because they will be able to Employment of marine and non-marine personnel on offshore obtain a visa quicker. “It’s not about race, it’s about practicality,” supply vessels may also present challenges as certain categories of Spinnaker chairman Phil Parry says. ]

30 asiamaritime September/October 2010 amseascapesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Moore Stephens reports first drop in ship operating costs for eight years International accountant and shipping consultant Moore Stephens has reported an average fall of 2% in total annual operating costs in OpCost 2010

Thise is th first time since 2002 that OpCost has revealed a fall in of 11.1%, while for tankers and container ships the decrease was total operating costs, which compares with the 15.8 per cent aver- 12.6% and 15.9% respectively. age increase recorded in OpCost 2009. All cost categories were Stores experienced the second biggest decrease, of 6.7%, down this time, except for crew costs, which in recent years have across all the main tonnage types, and 7.9% across all vessel been the single largest contributor to total increases. categories used to produce the indices. This item includes lube oils OpCost 2010 reveals that the majority of vessel categories ex- and other stores expenditure. perienced a decrease in total operating costs in 2009, the financial The insurance category showed an average marginal decrease year covered by the survey. Costs for the main vessel types in the of 1.5%, compared to the previous year’s increase of 8%. In the three sectors covered - bulkers, tankers and container ships – were cost breakdown, P&I insurance increased by 3.4% on average, down. The bulker index decreased by 4 index points (or 2.3 %) on while other marine insurance decreased by 5.2%. In general, insur- a year-on-year basis, while the tanker index witnessed a bigger de- ance dropped by 3.4% for bulkers, 4.1% for tankers and 4.9% for crease this year of 5 index points (2.7%). The container ship index container ships. (with a 2002 base year) experienced the biggest decrease of 13 in- Moore Stephens partner Richard Greiner says, “These decreases dex points (7.5%), having recorded the smallest increase amongst have long been anticipated and are due mainly to the marked fall in the three sectors the year before. costs for stores, repairs and maintenance. The period covered by the The increases in crew costs in 2009 were at their most moder- report embraces the very peak of the worldwide economic recession, ate levels for a number of years. Costs in this category were up and the effects of that can be seen in each of the cost categories. overall by 2.2%, compared to the 21% recorded for the previous “Repair and maintenance costs, for example, were down by year. All tankers experienced increases in crew costs of 2.5% on more than eleven per cent in 2009, having shown an average in- average. For bulkers, meanwhile, crew costs for smaller tonnage crease over the previous two years of more than 13%. But 2007 increased by 2.9 per cent on average, but those for the bigger ves- and 2008 were comparative years of plenty for shipping, while sels - panamax and capesize - decreased by an average of 2%. The 2009 saw reduced pressure on labour and material costs at repair box trades experienced decreases in crew costs ranging from 1.2% yards due to demand reductions. for container ships to 5.2% and 4.5% for container feedermaxes “The rise in P&I costs was to be expected, given the clubs’ and container main liners respectively. need to recover the costs of a number of expensive casualties and For repairs and maintenance, there was an overall decrease to meet the requirements of the regulator in the run-up to Solvency across all vessel types. The average decrease of 11.3%, which was II. And the fall in the cost of other marine insurance is no surprise, the biggest decrease across all cost categories, was in stark con- given that particular sector’s continuing competitive appetite for trast to the increase of 13.5% for 2008 and of 12.8% for 2007. business and the decline in vessel values. There were variations in the cost movements experienced within “Finally, the rise in crew costs, albeit by only just over one- vessel categories. In general, bulkers recorded an overall decrease tenth of the figure for the previous year, shows that, despite techni- cal innovation, people are still shipping’s most valuable, and scarc- est, asset. The increases in crew costs “Ultimately, costs are a reflection of what the market will bear. were at their most moderate Confirmation of the overall fall in operating costs, coinciding as it does with evidence to suggest that confidence in the industry for a number of years generally is holding up comparatively well, indicates that shipping is sufficiently robust to survive even the most severe economic downturn.” ]

September/October 2010 asiamaritime 31 amon the radaramamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Roaring to go

Caroline Huot the ebullient and unstoppable marine lubri- providing excellent cus- cants expert has launched her latest venture Tiger Oil Marine in as- tomer service. sociation with several shipping companies and oil independents. Operating from offic- The former head of Total Lubricants and Gulf Oil Marine, for- es in the Wan Chai dis- mally inaugurated Tiger Oil on October 1 after leaving Gulf Oil Ma- trict of Hong Kong, Tiger rine in mid-June. Oil Marine aims to open Ms Huot was understandably coy about the backers but she offices in Singapore and aims to replicate the lubes supply network that she tried to establish Hamburg, while opera- through the Sealub Alliance while at GOM which covered more tions will cover the five than 800 ports around the world. main shipping areas of

Ms Huot says Tiger is also focusing on the additives sector, the Asia Pacific, Europe, Caroline Huot an ebullient and unstoppable which she thinks could bring real benefits to ship owners by cutting the Americas, Middle marine lubricants expert fuel consumption. Tiger Oil Marine is also eyeing acquisitions in- East, India, Africa and Russia. cluding the purchase of a leading rival lubes producer and supplier. The company is set to grow quickly and has already accepted Speaking about the launch of Tiger Oil Marine, Ms Huot says its first orders ahead of the formal launch. Ms Huot says that with that because the backers of the venture are shipowners rather than most major oil companies scaling back their supply of marine lubri- oil majors they have a vested interest in growing and maintaining cants to focus on other higher volume oil products the move has led the business as it would benefit their own operations and those to a raft of highly experienced and skilled lubricants experts seeking of their fellow shipowners. So the focus will be on expanding the new jobs. Tiger Oil Marine plans to tap into this resource recruiting ports coverage to be as wide as economically practicable while also the best available. ]

Vision of One World

Former Drydocks operating system, helping to secure some $800M of new orders World South East for the company in the process. Asia chief executive Now he is bringing a wealth of local knowledge and expertise Denis Welch gained honed over a period of close to 40 years to a brand new venture. considerable kudos by In partnership with experts from key sectors of the Asian maritime successfully bringing industry Mr Welsh has launched One World Maritime, a consul- harmony, efficiency tancy firm that will smooth the sea swells often experienced by and a raft of new or- maritime companies wetting their feet in Asia for the first time. ders to three shipyards “I’ve got a real buzz from all the years I have been working in previously owned by Asia,” says Mr Welsh. “I think it’s time I gave something back to Batam Island-based La- the region by using my broad range of experience and many con- broy and Pan United. tacts to help others who want to be in the right place in what is Mr Welch headed- obviously going to be Asia’s century.” up and managed One World Maritime is based in Singapore’s central business the post-acquisition district, where it is offering services such as support for business merger and restruc- expansion through mergers and acquisitions as well as market posi-

Denis Welch’s One World Maritime is here turing of Labroy tioning and business re-engineering for performance improvement. to help and Pan United’s rig “We will not only be ensuring that new entrants hit the ground construction, shipbuilding, shiprepair and fleet businesses into running but also offer executive support at every step during a a single operation with a central management and common company’s formative years,” he says. ]

32 asiamaritime September/October 2010 ambrief encountersamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam CC Kai meets the man of the futures Dehy drated from my exertions the night before at the gala let the index do the talking, he advised me. “Tell your readers to dinner which concluded the Boxes Bouncing Back Conference, I buy early to avoid a disappointment. I am trading clips like billy- was having a coffee, a flat white, one of Melbourne Airports’s sav- do. 1,000 teus a time. Just you wait. When I get off the next flight ing graces, when a vision in shiny blue asked to share my table it will be 5,000 teus. Let me have your card so I can send a little in the Koala Bar-Café. A tall sleek man with a winning smile im- tip to your agency when I run around. OK?” mediately produced a hand, a shake, a card and a do- you- mind- For the rest of our time on the ground, awaiting our flight to if- I- bump- in gesture “Gulapjam Khan,” he announced. Now the Hong Kong, I was entertained to a lengthy powerpoint show, bar light in the Antipodes is rather different, but still I could not take charts swooped in animated succession. Facts and Figures. 2011 my eyes off the suit. Immaculately cut, but of a cloth which shim- Futures were going to be huge. Maybe 25m teu from Shanghai mered in the light, expensive but perhaps not calculated to win the alone. He e-mailed me a copy of his bulging presentation there confidence of the wariest amongst us. Instead of a pair of simple and then. Later on I discovered the crummy old agency server had loafers or laceups, I could not entirely miss the brown, expensive, fallen over six times trying to deliver the attachment to my mail- elastic sided Chelsea boots below his cuffed trouser legs. box. The animation alone was as big as an emailed movie. I may His card advertised an illustrious house of ship brokers, the be getting old but my conversation with Khan made me wonder brainiest of the bunch. The spread sheet kings. The biggest brain whether good old container shipping was about to become as gut boxes in the street. An organization of earnest researching and wrenchingly volatile as pork belly futures. Will the investment striving, with a sartorial flair heavily weighted towards dullness. banks be betting their latest fortunes on the price of sending a box When I mentioned my occupation, the shipping desk at the full of pink frocks to Chicago? Are the algorithm boys tooling up Agency, any hope I might have nursed of a quiet hour over the to make the cost of repositioning empties from Australia safe as morning paper and a decent cup of java was gone. Khan went mortgages? Will the volume of trades exceed the actual liftings by from table neighbour to promoter in overdrive in front of my eyes. a factor of hundreds? I can hardly wait for the Agency to start re- He shot the cuffs, produced an Ipad from nowhere and asked. “CC porting on yet another financial product which we do not entirely let me ask you. Have you considered the fantastic notion of con- understand. Up in the sky, over the vast dry interior of the lucky tainer futures lately? I’m talking boxship freight indices here, you country I heard the pilot announce that we should strap up. We follow me? I am talking amazing. Brink of something really big.” were, he said, about to pass through a large patch of bumpy air. ] It was like watching an engine revving into life on a cold morning in Qingdao. What fault could anyone find with an index backed by the Shanghai Shipping Exchange? he asked. You could bet the index any day, confident the data was the real thing, noth- ing shifty, and subject to real international auditors. You couldn’t really lose, the Minis- try of Communications was a sound as the Bank of England. Sounder really. Your average risk manager in container shipping could forget all that nonsense about monthly quar- terly and annual negotiation with irritating and slippery shippers. Instead of jaw jaw,

September/October 2010 asiamaritime 33 amship's storeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam All tied up and nowhere to go

The Merchant Maritime Warfare Centre, a British-based anti- The forward movement of the deploying vessel means the rope piracy group, carried out the first practical demonstration of its is kept clear of the ship’s own propeller and is unaffected by the propeller arrester system in front of the international shipping com- vortex’s created as the ship sails through water. The specialist design munity in mid-September. The outfit, which has also developed a enables the rope to be deployed in about 30 seconds with mini- bridge-installed security radar, used the passenger vessel SS Shield- mal manpower and they can be rigged on any vessel regardless of hall as the target vessel in a mock piracy attack to show how the speed, design, cargo or weather conditions. system is deployed. “Until now shipping companies have had to rely on onboard The system uses strong buoyant rope wound on drums and countermeasures to protect themselves from unlawful boarding and rigged to heavy-duty booms. The drums are mounted on deck at the have had a major disadvantage in that by the time they become stern and sides of the ship. As the ship approaches a pirate-infested effective the pirates are already onboard”, says warfare centre chair- area the booms and rope are wound out to trail along the sides and man Nick Davis who was the brainchild behind the propeller arrest- behind the ship. The propeller of any approaching attack vessel ers design. ] would get tangled in the rope, disabling the would-be attackers.

Hooked on Cool gas lifesaving handlers

Hamworthy Gas Systems has secured a breakthrough con- tract to supply the cargo handling systems for six liquid ethylene gas carriers to be built at Sinopacific Offshore & Engineering using the Chinese shipyard’s latest “Tiger” design. The 12,000 cu m capacity, 139m long semi-pressurised and refrigerated gas carriers have been ordered by Luxembourg-based Jaccar Holdings. The ships, which will be delivered from 2012, feature a three-

Schat-Harding has launched the tank arrangement that has been designed with enhanced intact SeaCure range of on-load release and damage stability performance and easy cargo loading opera- hooks for lifeboats tions. The ships also meet the latest provisions for crew accommo- dation contained in the 2006 Maritime Labour Convention which Schat-Harding, the lifeboat and davit manufacturer, has is due to enter into force in 2012 or later. Jaccar has specified launched the SeaCure range of on-load release hooks for life- that the ships are capable of transporting liquefied ethylene gas at boats. The company says the hooks are the safest on-load release temperatures down to -104 degrees Celsius whereas conventional hooks available and are fully compliant with pending revisions to LEG carriers are limited to -48 degrees Celsius. SOLAS. Hamworthy is due to deliver the cargo handling systems, in- “We have always said that the safety of on-load release hooks cluding reliquefaction plant and deepwell cargo pumps, under had three components,” says company sales director David Torres. a deal worth more than £20m (US$31.6m) between December “These are design, maintenance and training. With this new hook 2011 and mid 2013. we have designed it to be fail-safe and we have designed out a lot Tore Lunde, Hamworthy Gas Systems’ managing director, says: of maintenance by making sure there is no wear and tear on the “We see this innovative project as a very significant reference for critical parts.” Hamworthy in the small LPG market in China.” The firm has also developed a computer-based training pack- The company is also supplying the cargo handling system and age to help owners ensure that crews are familiar with their life- cargo tank design for a 5,000 cu m, fully pressurised liquefied pe- saving equipment. SeaCure hooks are available in 3.5 tonne, 6 troleum gas carrier under construction at China’s Taizhou Wuzhou tonne, 9 tonne and 12 tonne versions. ] Shipbuilding. ]

34 asiamaritime September/October 2010 amgreen pageamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Green bulkers Denmark’s Norden and Japan’s Mitsui OSK Lines are introducing exciting new bulk carrier designs

Danish shipping Merchant Ship Design g r o u p N o r d e n h a s & Research Institute. become one of the lat- The study will look at est maritime companies the potential of install- to further embrace green ing an energy-saving shipping technology after device that would changing the design of enhance propulsion two handysize bulkers – efficiency on a bulk estimating it would slash carrier. fuel consumption by 11%. “ W e w i l l u s e The two bulkers are part computational fluid of a series on order at the dynamics technology award winning shipbuild- to analyse the flow er, Jiangmen Nanyang Norden’s big propeller field and will specifi- Ship Engineering, located cally look to see if the about two hours drive from Zhuhai in southern China. device developed by SDARI does indeed create more efficiency by Norden said the main changes to the design, which has been equalizing the wake quality and recovering certain rotation energy,” developed in association with the shipyard together with Shanghai says ABS principal engineer Lee Sing Kwan. Bestway Marine Engineering Design and Stone Marine Propulsion, Mr Lee, who specialises in propeller and propulsion designs, involve the installation of a larger main engine and propeller. says it was expected that the device, fitted in front of the propeller, The renewed design could be used on more future newbuild- would increase the operating efficiency by up to 4%. This could ings. Lars Lundegaard, Norden senior vice president in charge of save between 450 and 760 tonnes of fuel over the course of a year the technical department says: “According to our calculations the for a capesize bulk carrier operating in normal conditions. investments in redesign will be paid back in four years by the sav- The focus on improving various aspects of the design of bulk ings in fuel consumption. In addition to this, we expect that the carriers comes six months after Japanese shipping group Mitsui design will increase the market value of the vessels. This initiative is OSK Lines unveiled its design for the next generation of bulkers. a text book example of how environmental and economic concerns The bulker was the third in MOL’s series of concept vessels under walk hand in hand, which is why we have had no doubts whether its ‘Innovations in Sustainability backed by Historically proven, we should invest in this project or not.” INtegrated technologies’ programme that incorporates existing tech- The change has been masterminded by Alex Hjortnæs, Nor- nologies in a radical vessel redesign. The two other ISHIN vessels den senior newbuilding manager, who developed the design from were a passenger ferry and car carrier. the principle that a large propeller turning slowly has a higher The INSHIN bulker uses waste heat energy recovered from the efficiency compared to a small propeller turning quickly. ship’s exhaust gas and converted to electricity to provide additional The two vessels will be delivered at the end of 2011 or early propulsion. The same technology can be incorporated into the main 2012. They will also feature other initiatives including antifouling engines installed on tankers and containerships. The design also fea- paint that will shave a further 2% of fuel consumption and carbon tures a turbocharger and an electronically-controlled main engine dioxide emissions. Overall, Norden estimates that all the environ- that cuts carbon dioxide emissions even during a low-speed voyage. mental features incorporated into the two ships will cut each ship’s Further innovations in the design include a fuel additive, drag fuel bill by 15.4% with a commensurate reduction in emissions. reducing anti-fouling coatings, an optimum voyage support system, The firm is investigating how the new design can be implement- propeller boss cap fins, the use of solar energy and a drastically ed on future newbuildings. improved hull form. Taken together MOL estimated the total fuel The changes being incorporated by Norden coincide with the savings and carbon dioxide emission could add up to 30% which launch of a two- year bulker propulsion focused research and de- would increase to more than 50% if wind propulsion technology velopment project by classification society ABS and the Shanghai was used. ]

September/October 2010 asiamaritime 35 In the coming issues of Asia Maritime you’ll find in-depth features on Asia’s most important maritime nations – and those emerging. You will also gain important insights into industry sectors and the region’s most important figures.

For our regular columns we shall be trawling industry sectors deep and wide. As a result, you’ll find stories on the environment, logistics, industry and personal profiles, innovations, an in-depth investigation into a high-profile industry concern…And a great deal more, all written in a direct and entertaining way so that you will find that Asia Maritime is not just a must-read but a want-to-read publication!

Coming in Asia Maritime in November/December 2010 Hong Kong/China/South Korea/Heroes and Villains/2010 Review 2011 Preview/Reefer Trades/Outstanding Leaders

*Send your story topic to [email protected] amlogisticsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Logistics providers plead guilty to price-fixing Convictions for price-fixing upheld against six logistics operators come at a time when the US is considering abolishing anti-trust immunity for the liner sector

In what could have ramifications for ocean liners if regulatory Christine Varney, assistant attorney general in charge of the jus- reforms before the US Congress become law, six freight forwarders tice department’s antitrust division, said: “The department’s investi- have agreed to plead guilty to criminal price-fixing charges on air- gation uncovered six different conspiracies harming businesses and freight shipments following a US justice department probe. consumers in the United States and across the globe. Our investiga- The six firms - Kuehne + Nagel International, Panalpina World tion continues in this important industry.” Transport, Schenker, BAX Global, Geologistics International Manage- The companies were charged with price fixing in violation of ment and EGL – paid fines totalling US$50.27m for their roles in con- the Sherman Act, which carries a maximum fine of US$100m per spiring to fix a variety of fees and charges on international shipments. offence. The maximum fine can be increased to twice the gain de- Announcing the fines at the end of September, the justice depart- rived from the crime or twice the loss suffered by the victims. ment said they were the first charges to be made as a result of the de- Panalpina said that under the plea bargain, which has still to partment’s antitrust investigation into the freight forwarding industry. be approved by a US court, it would plead guilty to three counts of Specific conspiracies outlined by the department included one conspiracy. where freight forwarders agreed to impose a currency adjustment The firm added: “It is Panalpina’s position, which is supported factor on international air shipments from China to the United by economic evidence, that the infringements likely did not affect States between July 2005 and June 2006. The participants included prices paid by Panalpina’s customers.” Kuehne + Nagel, Panalpina, Schenker and BAX Global. BAX has The firm also pointed out that its conduct, covered by the in- since merged with Schenker. vestigation, ended in 2007. “Since that time, Panalpina has worked The same companies also conspired to impose a peak season to build a state-of-the-art compliance structure aimed at ensuring surcharge from August 2005 to December 2007 on shipments from rigorous adherence to competition and other laws throughout the Hong Kong to the US. world,” the firm said. Other charges covered conspiracies to fix rates on air shipments Kuehne + Nagel International said it had pleaded guilty to vio- to the US during various periods between 2002 and 2007, mainly lating the Sherman Act relating to the conduct of five of its subsidi- from Europe. There was also a global conspiracy that took place aries which levied various surcharges. from March 2003 to October 2007 to impose an air automated “Kuehne + Nagel has cooperated intensively with the Depart- manifest system fee on international airfreight shipments. ment of Justice throughout the investigation. Kuehne + Nagel has The biggest fine totalling almost US$19.75m was levied on BAX reviewed and reinforced its anti-trust compliance programme, to al- Global, followed by Panalpina which was fined US$11.95m and ways ensure compliance with the highest available standards,” said Kuehne + Nagel which had to pay over US$9.86m. Karl Gernandt, executive vice chairman of the firm’s board. The department said the companies conspired during meetings The company added that is was “continuing to cooperate with and discussions to coordinate various charges and fees levied on anti-trust authorities”. customers. One transport and logistics insurer played down the signifi- cance of the fines pointing out they related to business events that took place several years ago. T he six firms - Kuehne +N agel But another observer said the cartel-like behaviour of the freight International, Panalpina World forwarders were precisely the kind of practices that Congressman James Oberstar was trying to outlaw in his Shipping Act 2010. The Transport, Schenker, BAX Global, legislator has proposed ending the anti-trust immunity currently Geologistics International enjoyed by the carrier conferences and agreements. Regulatory changes are also being considered by Federal Maritime Commission Management and EGL – paid chairman Richard Lidinsky, although he has not proposed ending fines totalling US$50.27m anti-trust immunity. ]

September/October 2010 asiamaritime 37 amdiaryamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam SSA pulls them in for 25th anniversary

Singapore’s maritime community turned out in overwhelming force on Sep- tember 30 when 2,008 people packed into the grand ballroom of the Marina Bay Sands convention and exhibition centre to celebrate the 25th birthday of the Singa- pore Shipping Association. In what would probably be an unthink- able demonstration of support for the mari- time industry anywhere else in Asia the chief guests were Teo Chee Hean, deputy prime minister and defence minister, and Lim Hwee Hua, the minister in the prime minister’s office and second minister for finance and transport.

Reasons to celebrate Association chairman Teo Siong Seng was “Speak up! Can’t hear you at the back” suitably happy pointing out that: “Confidence has returned to the financial sector, cargo volumes and freight rates have improved. I up to S$200m (US$152m) over the next 10 years on a maritime re- see more smiling faces in the shipping industry.” Although he also search institute. Bodies such as the Economic Development Board added a note of caution, saying: “However we should not expect and the Agency for Science, Technology and Research are expected this rate of growth to continue as it is. There is still overcapacity to co-fund projects to boost the amount of cash earmarked for re- brought about by a flood of new vessels. We should also be mind- search. ful of the debt crisis among some of the European countries and But it was a shame a large proportion - say about half - of the the high unemployment in the US. If not well contained, these situ- assembled guests were only able to catch snatches of the speeches ations may have a negative effect on the world economic recovery due to the poor acoustics and inadequate sound system in the and trade”. grand ballroom. So, while the first third of the ballroom was able Continuing this cautious optimism, CH Teo agreed that cargo to hear every word those from the middle towards the back fought volumes and rates had picked up. In Singapore “encouraging a losing battle trying to attune their ears to what was being said. signs for shipping” have been seen. “Vessel arrival tonnage had in- Unfortunately, their ears invariably failed to ignore conversations creased by 8% while bunker sales have risen 12%,” he said. going on around them by people who had given up trying to listen. Mr Teo added: “Despite the challenging climate, the port of While not wishing to apportion any blame, investigations by Asia Singapore has done well,” before going on to point out that box Maritime sleuths found the centre operators were keen to maxim- volumes rose 13% in the first eight months of this year. ise revenue to the extent that sound, lighting and staging all had to But he also admitted Singapore could lose its crown as the be paid for. Not knowing what the rates were we can’t say if they world’s busiest box port this year to Shanghai. In the first eight were extortionate or not, but whatever the price they were strictly months, Shanghai handled 19.06 m teu compared with Singapore, applied with no slack cut for the fact the SSA was a non-profit or- which handled 19.01 m teu. ganisation. As a result: “We will not be surprised if Shanghai overtakes While on the subject of ambience, we’d like to point out that Singapore as the world’s busiest container port this year.” we also popped into the Marina Bay Sands hotel. And while the cheapest hotel room was beyond our budget we did stop by to Research funding have a couple of drinks in one of the lobby bars. We can only say But CH Teo lifted any gloom his comments created by confirming that we still prefer the Fullerton Hotel and more especially, the plans that the Maritime & Port Authority of Singapore would spend Shangri-la Hotel’s evening buffet. ]

38 asiamaritime September/October 2010 amdiaryamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam D TPM Asia Singapore a 19-20 October 2010 te Intercontinental Shenzhen, China

shows seafarers s Contact: [email protected]

Seatrade Middle East Maritime it cares 26-28 October 2010 Dubai International Convention & Sometimes threatened by pirates, often denied shore leave and Exhibition Centre, UAE invariably working in difficult conditions, the lot of the seafarer may not Contact: [email protected] necessarily be a happy one. But Singapore brought some cheer to those seafarers who happened to be in the city-state on World Maritime Day 5th FLNG Asia Pacific Summit on September 23. 9-10 November 2010 A round of 12,000 hampers were distributed in a scheme organised by the Maritime and Port Authority of Singapore, Singapore Maritime Seoul, South Korea Officers’ Union and the Singapore Organisation of Seamen that has Contact: [email protected] been running since 2003. In what must be one of the few government-supported events in World Shipping (China) Summit Asia to mark maritime day, MPA chairman Lucien Wong recognised the 8-10 November 2010 important role played by seafarers. He pointed out the “life of a seafarer Shangri-La Hotel is by no means an easy one”. Guangzhou, China He added: “In order to operate the ships on which global trade and Contact: www.shippingsummit.com economic progress depends, they need to be alert, highly trained, qual- ified and most importantly, motivated. Seafarers are often out of touch 11th Asia Pacific Manning & Training Conference with their families, friends, loved ones and the wider world when out in 17-18 November 2010 the open sea.” Hotel Sofitel Philippine Plaza The MPA provides an annual grant of S$100,000 to support the Manila, Philippines work of the seafarer missions. Again, we’re not sure if other govern- Contact: www.informaglobalevents.com ments provide financial help to the Flying Angel and similar groups.]

Follow the yellow helmet code

C ai Mep International Terminal, part of the APM Terminals stable, has sponsored the distribution of cycle helmets to nearly 700 students and teachers at Nguyen Thi Dinh Primary School in Tan Thanh. The terminal contributed US$10,000 for the hel- mets, which were donated as part of the Helmets for Kids programme promoting road safety developed by the Asia Injury Prevention Foundation. Helmets for Kids aims to educate school children and teachers of the importance of traffic safety and to encourage partici- pants to be safer road users. “Though adult helmet use is widespread in Vietnam, we continue to observe low child helmet use rates,” said Mirjam Sidik, the founda- tion’s executive director. ]

September/October 2010 asiamaritime 39

Hard-headed cyclists ammaritime’s back pagesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam The shifting tides of Asia’s box terminals K K Chadha looks back to the arrival of containers in Asia

After five years, Singapore is about to hand the title “world’s busiest container port” to Shanghai. China’s largest port moved 2.64m TEUs in August, compared to Singapore’s 2.43m. That has pushed Shanghai’s total for the first eight months of the year to 19.06m teus, slightly ahead of Singapore’s 19.01m, indicating that Shanghai should top box port rankings this year. Singapore had taken the crown from Hong Kong, which first became the world’s busiest container port in 1987. Containers are not a recent invention. They were used as early as the 1830s to transport limestone, coal and other such materials. But the large containers we see today - and which revolutionised shipping - were the brainchild of Malcolm McLean, an American truck operator who diversified into shipping in 1955. Mr McLean hit upon the idea of containers as he watched his trucks waiting at the dockside for goods they carried to be hoisted Caption: OOCL’s Tokyo Bay discharged 200 containers at Modern Terminals facility on 5 September 1972 © MTL aboard ships. It was a slow, clumsy process. Consolidating the goods and packing them into containers made it all so much faster. Yard officers had to check containers in and out of the port. After the first container terminals were built in the United When a box was misplaced in the yard, an officer would ride out States, Europe, on a bicycle to look for it, identify and tag it so that it could be lo- Japan and South Korea in the 1960s Singapore and Hong Kong cated later. soon followed suit. All that has changed. Now flow-through gate systems combine The first container terminals in Singapore and Hong Kong, documentation, identification and customs procedures in one which now ranks third behind Shanghai, opened in 1972. In June painless, paperless process. 1972 Singapore’s Tanjong Pagar Terminal received its maiden con- The result is that containers flow through the gates in less than tainer vessel, the M. V. Nihon. The ship, arriving with 300 contain- 30 seconds, without causing congestion and without hassle. ers from Rotterdam, was greeted by a crowd of more than 1,000 PSA also started handling of transhipment business on a big excited port scale. The whole region, comprising, Southeast Asia and beyond, workers and officials. With that, Singapore became the first formed PSA’s transhipment hinterland. port in Southeast Asia to accommodate a third generation contain- Shipping lines began asking PSA to help manage the distribu- er vessel, making it an important link in the new chain of global tion of their containers to the regional ports and they demanded for container ports. even greater certainty in terms of speed, reliability and efficiency. On September 5, 1972, Orient Container Lines’58,000-tonne In 1974 Kwai Chung port handled 726,000 TEUs, rising to Tokyo Bay discharged 200 containers at Modern Terminals (MTL) at 802,000 TEUs in 1975, and passing the 1m teu mark in 1976, Hong Kong’s Kwai Chung container port. achieved 2m teu in 1984 and 4m teu in 1988. The Hitachi crane at MTL was operated by South Korean, Nam PSA in Singapore handled 1m teus in 1982, 2m teus in 1986 See-woo, who also loaded 120 containers bound for Japan. There and 4m teus in 1989. was no hitch, not one bungled lift. Both ports had to cope with double-digit growth throughout When the job was finished after more than 12 hours, a very the decade and the focus then was on how to ramp up capacity exhausted Nam was proclaimed hero of the day by MTL staff and and productivity quickly to ensure good service levels. management. He worked at Kwai Chung for another eight years. Hong Kong now has nine container terminals with 24 berths, Back in the 1970s, the ports were run by hand. They depended which handled more than 20m TEUs last year. Singapore moved on the sheer brute force of gangs of stevedores working long hours more than 25m TEUs last year through its five terminals, four of to clear cargo. which are owned by PSA. The fifth is at the smaller Jurong Port. ]

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