November/December 2009

South Korea n IMO's time to decide n China n Shiprepair gulf_printAD_anytime_02_REV2.ai 5/21/09 4:27:01 PM

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N November/December 2009 Contents

AM Cover Story 11 News Line The current crisis in shipping may have provided some respite to the more chronic problem of acute seafarer shortages. But when the health of shipping business returns in a couple of years, the shortage could be worse than ever as many OECD members will fail to return. Or will Asia make up the loss?

AM FEATURES 14 China Dalian will have its day and it’s coming soon

18 South Korea The winds of change

22 Shiprepair 18 Beyond repair?

24 Future prospects Shipping leaders ahead of their time

26 2009 under review Industry under siege

30 Hong Kong Climbing the value chain 22 AM Regular columns 4 Comment Everything for a reason

6 Briefs Sector by sector

8 Commodities Getting on top of old smoky 6

November/December 2009 asiamaritime 1 November/December 2009 Contents

AM Regular columns 10 News line Bimco and the pirates

12 Launched Starry duo

33 Seascapes Mutual attraction 12 34 IMO Looking for a clean machine

36 Radar Opening up shop

37 Ship’s store Pensioner’s paradise

34 38 Operations Clean cooperation

39 Green page Ships in slow steaming green

40 Logistics Singing the logistics song

41 Sea shanties 40 Airport encounters

42 Diary Crowned king of the deep

44 Maritime’s back pages When pirates were gentlemen

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2 asiamaritime November/December 2009 amcommentamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Act of faith Many good reasons to be in Asia

Why bring out a new maritime title for Asia at a time like this? If industry bodies from both camps along with their members had I suspect you are asking yourself. Consider it one of those grass initiated joint discussions over the crisis in mid-2008 to look at what roots we keep hearing about but appear as elusive as dragons or was possible in the way of rescheduling and or cancellations, the unicorns. Consider it an act of faith in the resilience and aspira- present abyss could at least have been less deep than it has become. tions of the people of this dynamic continent who refuse to give up Nevertheless those companies who resisted the illusion of non- in times of great adversity. stop growth will shortly emerge stronger than ever and many of Here in Asia, at least we appear to be turning the corner faster them will be Asian. than elsewhere in the world; the bunkers are half-full rather than Those who thought that Asia would be immune from the US- half-empty. led downturn by simply decoupling from the rest of the world were There’s a long way to go but the bulk freight rates are well up proven wrong on this occasion but it is a fact that inter-Asian trade from their nadir in 2008, and speaking of half-full, the latest fore- is now the world’s most robust. With the confidence this will bring casts for the box trade from AXS-Alphaliner is 50% better than it we can yet hope that the region’s politicians will eventually catch was six months ago when it predicted that 4m teus of shipping up with the zeitgeist and through the incremental dropping of trade would lay idle until 2012. and non-trade tariffs begin to build a free trade region that can bet- The last four months has also seen a greater sense of the big ter that of Europe. picture when it comes to crucial discussions between owners and All pie in the sky? Perhaps for the moment. But from where the shipbuilders over delayed deliveries of ships in all classes, which maritime sector is at present, the only way is up. gives reason to hope that the freight rate attrition may yet be less severe than some have forecast. Although it must be said that an opportunity was lost to mitigate the damage caused by the tonnage Mike Grinter glut. Editor

asiamaritime

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ILLUSTRATIONS Harry Harrison

4 asiamaritime November/December 2009 ambriefsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

this year, the bank expects Evergreen to reap a NT$892m ($27.7m) profit in 2011. In contrast with its outlook on liner business HSBC likes what it sees on the dry bulk side, stating: “Supply side issues aside, we anticipate demand for dry bulk shipping to be substantially more positive, albeit more volatile, than container shipping, sustained by Asia’s – in particular China – robust appetite for commodities.” In Japan, NYK is resorting to issuing new shares to keep its newbuilding orders flowing into the market, it said in November. NYK is looking to raise ¥142.5bn ($1.6bn) in a share offering that will largely go to paying for new vessels. Of the total 427m shares, 180m will be made available on the international market. Single hull tankers were given their marching orders in Novem- ber by no less a trading country than China. The ban comes into effect from January 1, 2010 and applies to both international and n Lines domestic single hull tonnage with the exception of those involved in cabotage. According to a report issued by Hong Kong-based HSBC Global Single hull tankers have already been shown the door by Euro- Research in November, all Asian-based liner companies can look pean and North American ports and the International Maritime Or- forward to another two tough years at least. But some carriers can ganization rules ban them from 2010, but in practice allow them anticipate a rougher time than others. to trade up to 2015 or age 25 years. Western markets are expected to remain reluctant to put their South Korea’s Hanjin Shipping slipped further into the red hands in their pockets throughout 2010. Combine this with the with its third quarter results announcement in November. difficulty owners will have turning off the newbuildings tap and Revenue for 3Q09 was $1.4bn, a 40% drop on the $2.4bn the industry is lumbered with excess capacity through 2010- earned a year ago. Revenue within the container division sank 2011 even if 40% of the order book is deferred, as the report 37.4% year-on-year to $1.14bn, exceeded by operating coats at predicts. $1.25bn. HSBC is particularly bearish on freight rates predicting little Costs also outstripped revenues in Hanjin’s bulk division, in the way of relief and expecting the losses in the sector to touch which saw earnings slip 48% at $296m. Costs fell a more modest $3.1bn in 2010 and $1.8bn in 2011, although other analysts ex- 35% coming in at $316m. The consequent operating loss for the pect rates to pick up modestly. third quarter ending 30 September 2009 was $177m. Higher oil Looking at individual companies, Singapore-based Neptune prices and the failure of efforts to boost major transpacific freight Orient Lines is chalked up by the report to lose $636m this fiscal rates were factors behind the continuing deterioration in the re- year, $400m in 2010 and $29m in 2011. sults, according to Hanjin. By contrast, HSBC reckons that Hong Kong-based Orient An indication of a brighter future however far off was an in- Overseas (International) Ltd’s greater flexibility when it comes crease in the number of boxes lifted in 3Q09 compared to 2Q09, to discarding short-term chartered vessels should see it return to a up 18% to 914,531 teu. $315m profit by 2011. Increases in the demand for raw materials combined with rate In a dire market HSBC also gives points to Taiwan’s Evergreen recovery attempts on box line trades prompted Hanjin to moot the for having no new vessels on order. After a loss of around $251m possibility of better results in 4Q09.] n Ports According to RCC passenger traffic at Shanghai port has grown 228% year-on-year between February and October this year. In- Boxes are rarely glamourous, although they do have a certain ternational cruise passengers at Chinese ports are likely to reach rarity value these days. So it is not surprising that in November 600,000 in 2010, RCC said. Shanghai International Port Group diverted attention to the In Hong Kong cruise has also been on the agenda but absent more glitzy cruise sector and the deal it has struck with R oyal the glamour aspect. Waiver fees when cruise ships berth at the ter- Caribbean Cruises. Looking to Expo 2010 in Shanghai, RCC said ritory’s container terminals has become an issue, with operators it will offer SIPG staff cruise-specific training and experience, in re- seeking a reduction if not an abolition of the charges ahead of the turn for the provision of promotion, ticketing services and boarding opening of a new cruise terminal in 2013. and clearance services for its passengers. The government said the “leases of the container terminals

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do not allow for berthing of cruise vessels. ported 15.8% growth in cargo volumes at its The grantee must apply to the Lands Depart- coastal ports in September, driven by the coun- ment for a temporary waiver for such use”. try’s stimulus package. The transport ministry The Lands Department will monitor the fees to said that the figures reflected volumes compa- ensure they reflect market conditions, which rable to those before the economic crisis. seems a bit rough when you have to disembark Overall cargo volumes reached 410m your paying passengers in the middle of no- tonnes, with traffic at Rizhao, Guangzhou and where. Ten cruiseships have had the dubious Tangshen leaping 30%. At Shanghai the port pleasure of calling at Kwai Chung this year. handled 33.2m tonnes, an increase of 5.8% Still staying away from boxes, China re- year-on-year. ]

At South Korea’s other major yard, Daewoo Shipbuilding and Marine Engineering, 3Q09 results brought disappointment as revenue dropped 4% to Won3.1trn q-q reflecting lowered sea- sonal production exacerbated by efforts to slow output in line with deferred payments and delivery delays. Operating margin of 5.1% was slightly down from 5.4% in 2Q09. But compared with 2008, net profit was up sharply to Won191bn against a Won85bn loss in the same period last year. ]

n Shipyards

Samsung Heavy Industries appears to be in poll position for a lucrative LNG floating, production, storage and offloading contract for Brazil’s Petrobras. The Brazilian oil major has asked design and engineering firms Technip, Saipem and SBM to bid for the $1.5bn project and SHI has already paired with SBM and Technip. According to SHI, it is the only shipyard in the world to have received orders for LNG-FPSOs – six in all including four for the UK’s Flex-LNG and two for SBM. Earlier this year SHI also signed a contract with Royal Dutch Shell for the eventual construction Representative Offices of LNG-FPSOs. Also in the running is Hyundai Heavy Industries, which has London: teamed up with Saipem. Aquatical House, 39 Bell Lane, London E1 7LU Tel: (4420)-7247 5490 & (4420)-7895 8490 Meanwhile analysts have frowned on HHI’s long-held wish to Website: www.simsl.com acquire control of ex-affiliate Hyundai Oilbank. Arbitration pro- Hong Kong: ceedings with Abu Dhabi’s International Petroleum Investment Co 1901-02, Jubilee Centre, 18 Fenwick Street, Wanchai, Hong Kong has been completed, opening the way for the shipbuilder to buy a Tel: (852)-2838 2722 Fax: (852)-2838 2009 70% controlling stake in HO, which according to conflicting es- Email: [email protected] timates is worth between Won1.2trn ($870m) to Won1.7trn. BNP Rio de Janeiro: Paribas in Seoul said it had maintained a REDUCE recommenda- Avenida Rio Branco, 151/1305-1307, Centro, Rio de Janerio, RJ CEP 20040-006 Brazil tion on HHI in particular due to cash outflows stemming from re- Tel: (5521)-2221 6074/6461 Fax: (5521)-2221 8747 peated investment in non-core assets. Email: [email protected]

November/December 2009 asiamaritime 7 amcommoditiesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Light my fire Jeff Heselwood digs deep to get the facts on increasingly controversial fuel source

Coal is taken for granted. It exists; it provides domestic Policy makers, industrialists, investors, environmentalists, researchers warmth in some countries, it is the source of power in many Asian and others want to better understand the issues that the nation faces as countries. However, the fossil fuel consistently receives bad press, it further develops an already thriving economy largely fuelled by coal. blamed for everything, from global warming to severe air pollu- China’s coal, mined locally and available at a relatively low tion. In late October, it made headline news when Somali pirates cost, has brought enormous benefits to energy consumers in China hijacked the De Xin Hai bulk carrier carrying coal from Africa to and to those outside the country who enjoy the products of its coal- India. based economy. Yet from another perspective, China’s coal use has While it may be true that coal-fired power stations are a major a high cost. Despite some progress, health and safety in the thou- contributor to poor air quality, the fact remains that they are a cost- sands of small coal mines lag far behind the standards achieved in effective and reasonably efficient method of producing electricity. China’s modern, large mines. Environmental degradation is a real China is the world’s largest producer of coal and also the larg- and pressing problem at all stages of coal production, supply and est consumer. China’s consumption topped 1.3m tonnes last year, use. Adding to these burdens, emissions of carbon dioxide are of comfortably ahead of the United States at around 1.06m tonnes. concern to the Chinese government as it embarks on its own cli- However, the US has enormous recoverable coal reserves, esti- mate protection strategy. mated at 275bn tonnes, an amount greater than any other nation. ”China’s coal sector has made remarkable progress over the Russia is second in the recoverable coal reserves with an estimated last decade, fuelling rapid economic growth and bringing a better 173bn tonnes, while China is estimated to posses around 126bn quality of life for China’s citizens,” said Nobuo Tanaka, executive tonnes. director of the IEA in Beijing. Mr. Tanaka noted that China’s coal production now provides more energy to the global economy Seaborne Trade than the whole of Middle Eastern crude oil production, empha- Over the last 20 years the seaborne trade in steam coal has in- sising that the use of coal on such a scale cannot be ignored. creased by approximately 7% each year, while that of seaborne Growing energy demand and the cost of alternatives mean that coking coal by about 1.6%. Although international trade of coal is global coal use is rising, despite growing concern about its envi- a significant factor, it amounts to only about 17% of total coal con- ronmental impacts, including climate change. Coal accounts for sumed; most coal is utilised in the country in which it is produced. about 70% of primary energy consumption in China. International trade in steam coal is effectively split between “The speed and scale of China’s expanding coal use have the Atlantic and the Pacific markets, with the latter consisting of brought a new urgency to deploying the full range of clean coal developing and OECD Asian importers, notably Japan, Korea and technologies, from those that reduce sulphur dioxide and dust Taiwan. The Pacific market accounts for roughly 57% of world sea- emissions, to more advanced technologies with higher efficiency borne steam coal trade. and the potential to substantially reduce carbon dioxide emis- Australia is the world’s largest coal exporter. It exported over sions,” said Mr Tanaka. 244m tonnes of hard coal in 2007, out of its total production of 323m tonnes. Australia is also the largest supplier of coking coal, accounting Cleaner coal technologies for 53% of world exports. The US and Canada are significant export- “China already has most of the technologies the world has to offer. It ers and China is fast emerging as an important supplier. just needs to use them more effectively and more widely,” Mr Tana- According to the World Coal Institute, China’s coal production ka points out. To do this, more and better-trained people are needed in 2010 is expected to exceed 3.1bn tonnes, approximately 600m across the coal sector: to adapt technologies to local circumstances; tonnes more than anticipated demand. to build, install and operate new equipment; and to staff the inde- pendent regulatory authorities that oversee the whole process. China’s Consumption The technology that China already adopts include half of The International Energy Agency (IEA) asserts that China’s rapid China’s coal-fired power generation capacity being fitted with flue economic growth has aroused intense interest around the world. gas desulphurisation (FGD), while the 4,000 MW Yuhuan power

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plant sets a new global benchmark Projected coal consumption for the efficiency of coal-fired power According to the US Energy Infor- plants. In addition, one of the world’s mation Administration (EIA) coal first pilot demonstrations of CO2 cap- consumption in Asian countries will ture from a coal-fired power plant is continue to grow significantly in the located on the outskirts of Beijing. next 20 years. “In China’s increasingly open It has been estimated that there economy, competitive markets must are over 847 bn tonnes of proven coal be the primary means of ensuring reserves worldwide. In contrast, prov- that resources are used efficiently en oil and gas reserves are equivalent and cleanly,” said Tanaka. “Experi- to around 42 and 60 years respec- ence in many countries shows this tively at current production levels. requires well-regulated markets with Coal reserves are available in competition among many players – large and small, domestic almost every country worldwide, with recoverable reserves in and foreign. Environmental benefits come when players see a around 70 countries. The biggest reserves are in the US, Russia, competitive advantage in being cleaner.” Wider adoption of the China and India. After centuries of mineral exploration, the loca- ‘polluter pays’ principle would create a market demand for clean tion, size and characteristics of most countries’ coal resources are technologies and bring down manufacturing and operating costs. quite well known. What tends to vary much more than the assessed The IEA report states that China and other coal-using nations, de- level of the resource - the potentially accessible coal in the ground spite progress, face persistent difficulties in using coal more clean- - is the level classified as proved recoverable reserves. This means ly. It is the task of governments to overcome these difficulties and that there is enough coal to last the world over 130 years at current that means strengthening agencies to implement soundly based rates of production. environmental, health and safety policies. In China’s electricity sector, coal use is projected to grow by “China’s existing environmental laws are well designed,” Mr 4.2% a year through 2025. In fact it is countries of non-OECD Asia Tanaka emphasised, “but, they need to be better implemented. that account for 90% of the projected increase in world coal con- “New technologies are needed worldwide. China’s role in sumption through to 2030. Strong economic growth is anticipated developing them is critical,” Mr Tanaka declared. Commercial in these countries, averaging 5.7% per year to 2030, with China activity, official government-to-government cooperation, R&D averaging 6.4% per year in this period. Much of the increase in partnerships and professional relationships are all needed to make demand for energy in non-OECD Asia, says the EIA, particularly in low-carbon energy a reality. Recommendations made in the IEA the electric power and industrial sectors, is expected to be met by report offer opportunities for China to grasp, but only if developed coal. countries move quickly to establish markets for technologies that In addition, the EIA estimates coal use in China’s electricity are currently too expensive and not fully demonstrated, such as sector to increase from 24.9 quadrillion Btu to 57.3 quadrillion Btu carbon dioxide capture and storage. by 2030. [email protected] ]

China swoops on Australian mining

In October 2009, Australia’s Assistant Treasurer, Senator Nick Sher- ership of the underlying mining assets must stand at no more than ry, approved the application by Yanzhou Coal Mining to acquire 50%. full ownership of Felix Resources Limited conditional upon it com- “With these undertakings provided by Yanzhou, I consider that plying with legally enforceable undertakings provided by Yanzhou. this acquisition is consistent with Australia’s national interest,” These undertakings apply to all of Yanzhou’s operations, in- said Mr Sherry. “It represents the first time a Chinese state-owned cluding the Austar mine near Newcastle which Yanzhou already enterprise operating in Australia will list on our stock exchange. As owns. Yanzhou has undertaken to operate its Australian mines such, it demonstrates the strength of the developing bilateral eco- through a company, Yancoal Australia, that is incorporated and nomic and investment partnership between Australia and China.” headquartered in Australia and is managed in Australia using a Felix has four major mining projects, two in New South Wales predominately Australian management and sales team. and two in Queensland. As several of the mines operated by Felix are owned by joint Three of these are in production, with the Moolarben mine in ventures with third party companies, following the listing and the Hunter Valley under development. holding reduction in Yancoal Australia, Yanzhou’s economic own-

November/December 2009 asiamaritime 9 amnews lineamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam New Bimco piracy clauses In response to the continuing piracy threat Bimco has issued a series of revised charter party clauses

And in the unfortunate event that pirates seize the ship charterers will pay 50% of demurrage costs during the period of seizure.

Piracy Clause for Time Charter Parties The chief objective of the original Piracy Clause was to consolidate the contractual position of the parties in relation to the threat of piracy. The clause addressed the owner’s obligation to follow char- terers’ orders; the right to refuse to proceed if the risk to the vessel and crew is adjudged to be too great; the allocation of costs for additional security measures and insurances if the owners agree to proceed through a risk area; and the effect on hire if the vessel is detained by pirates. The original Piracy Clause for Time Charter Parties caused Bimco’s contribution to keeping him at bay. considerable consternation among charterers because of the open- Bimco’s revised piracy clauses for charter parties, issued in ended off-hire provisions. This led in most cases to the clause not November, are applicable to Time Charter Parties, Consecutive Voy- being incorporated at all. Having taken this on-board the revised age Charter Parties and Single Voyage Charter Parties. Their primary clause allows for a 90-day cap in respect of the off-hire provision. intention is to redress the balance of the original clauses that were Bimco has also taken the opportunity to broaden the definition thought by some to be skewed somewhat in the owners’ interests. of piracy to extend to acts of violent robbery. In the case of the Single Voyage Charter Party there are signifi- Sub-clause (a) has been amended to address the assumption cant differences to the clause compared with the other two ver- that charterers will order a vessel to follow a particular course. sions. The key difference is that owners are not entitled to invoke In sub-clause (b) the master/owner will subsequently have to the clause (which allows owners to elect an alternative route) if the judge if the course is acceptable or not based on his judgment of piracy risk existed at the time of the fixture. The clause should not the risk of attack. Where owners do not agree the course, charter- be interpreted as an alternative routing agreement. If owners want ers must issue alternative voyage orders and indemnify the owners such an option they will have to add a rider clause (a) to that effect. against any claims by bill of lading owners caused by the charter- The three other sub-clauses deal with respectively, the granting ers’ new orders. of certain liberties to owners to reduce the risk of attack; the impor- Sub-clause (c) addresses owners’ agreement to navigate a risk tance of the clause being incorporated into bills of lading; and, in area and re-routing within that area, rather taking a new route. The line with the Bimco War Risk Clauses, the owner is protected from sub-clause also aims to protect the charterer from the risk of dou- a claim of unjustifiable deviation if the vessel has complied with ble insurance. the provisions of the clause. In line with sub-clause (d) the additional costs incurred for extra personnel and preventative measures are for the charterers’ Piracy Clause for Consecutive Voyage Charter Parties account. This second clause is by way of a halfway house whereby costs are A newly introduced provision in the revised clause dictates shared between the owner and the charterer. that charterers will not be liable for damages arising out of late re- Designed to cover long-term agreements, the clause entitles delivery of the vessel. the owners to take an alternative route on a voyage where it is Sub-clause (g) is also new in the revised edition and provides, considered that the risk of a pirate attack is unacceptable. Should in line with the War Risks Clause, the owners a protection from a an owner take a calculated risk in entering a potential danger area claim of unjustifiable deviation provided the vessel has complied then the costs of taking preventative measures while navigating the with the provisions of the clause. area will be shared by the owner and the charterer. This has been an introduction to important new amendments. If an alternative route is sought the freight rate will be adjusted. For full information please refer to the Bimco website.

10 asiamaritime November/December 2009 amnews lineamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Sea change The latest crisis to hit global shipping could reduce the supply of western officers to a point beyond recovery

Amidst the gloom and despondency of the last 16 months or so has been the emerging vision that Asia will consolidate its posi- tion as the centre of global shipping. This view has been based on a number of factors, primarily that financing was not as mortally wounded in the east as it had been in Europe and the US. As such, by hook or by crook Asian nations are in a better position to hoo- ver up cheap tonnage, new or secondhand. A more irreversible trend that has been following the above is that of the demise of western seafarers – a phenomenon that will eventually determine Asia’s complete dominance of the industry. It is a measure of the murkiness of the shipping industry that anything like reliable statistics for seafarer numbers are not cur- rently available after 2005. As everybody is aware five years in shipping is an era. A thorough investigation by Lloyd’s List in October made little progress in getting to the bottom of what was happening to seafarers as shipping lines slashed staff numbers. Maersk owned up to a plan to replace 170 Danish officers with

Asians. And Indonesia’s Berlian Laju Tankers said it would replace Based on anecdotal evidence it is suspected that more than some of Camillo Eitzen’s European crew following its takeover of 20% of European officers have disappeared since 2005, through the Norwegian shipowning operation. Maersk is also moving its natural wastage and redundancy, making it likely that there are global crewing operations from Copenhagen to Singapore. now less than 100,000 OECD officers. One Hong Kong-based Most crewing agents admit that jobs are increasingly going to Asia. shipmanager told Asia Maritime that even that figure is disputable Even the outdated figures displayed in the two tables below with many of the officers having aged and were only operating show a striking shift in Asian and Indian ratings declining in num- locally. bers as officer figures rise steeply, particularly from the Indian sub- As with certain breeds of animal, seafarer numbers are only continent. sustainable at a certain level, below which it no longer becomes viable to run training colleges and maritime universities. Origin of Officers by region, 1,000s. According to a 2008 study by Rene Taudel Poulson of the Uni- Region 1990 1995 2000 2005 versity of Southern Denmark. The situation has become so critical OECD 150 163 147 133 that the “rapidly expanding shipping company Torm is presently Eastern Europe 59 61 62 95 Africa/Latin America 27 29 35 38 unable to man its growing Danish-flagged fleet of tankers and bulk Far East 129 122 128 133 carriers with European officers.” Indian sub-continent 19 27 32 68 According to Mr Poulson many maritime analysts have argued Total 383 402 404 467 that the existence of a merchant navy is vital to the continuing existence of European shipping as they bring their experience to Origin of ratings by region, 1,000s maritime jobs ashore. Region 1990 1995 2000 2005 A recent UK study revealed that there is already a persistent, OECD 251 222 191 174 Eastern Europe 97 92 107 115 significant and unsatisfied demand for seafarers for employment Africa/Latin America 76 77 89 110 ashore, while Mr Poulson raises the example of Weilbach, a Dan- Far East 328 350 332 226 ish marine equipment supplier that has employed former master Indian sub-continent 56 70 104 96 mariners as its senior managers since 1908. How will it adapt Total 808 811 823 721 without them? Diversify out of the business?

November/December 2009 asiamaritime 11 amlaunchedamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Norden builds a constellation The Nord Delphinus has become the first in a series of four 114,500 dwt post-panamax bulkers named by Norden, the Danish shipping giant, that are on order at China’s Shanghai Shipyard. The vessel is also the biggest ship ever built by Shanghai Ship- yard at Chongming Island, beating the previous record set by a 57,000 dwt bulker. The ship will be delivered in time for the January launch of a 16-ship post-panamax pool that Norden will form with Cyprus- based Interorient Navigation Co. The four vessels being built by Shanghai Shipyard will be joined by four vessels Norden is having constructed at other yards. Interorient Navigation is also providing eight vessels to the pool. Overall, there will be 12 newbuildings in the pool that will be marketed and commercially managed by NORDEN. Norden’s first ship has been named after a star constellation in the northern sky. The naming was carried out by Mrs Lim Hwee Hua, the first woman in Singapore to become full cabinet minister globally in this strategically important vessel type.” in the Prime Minister’s office and who was also transport and fi- The naming of the Nord Delphinus also coincided with the nance minister for several years. naming of Nord Imagination, which is the first of six medium Norden senior chartering manager Michael Boetius says: “In range product tankers Norden has on order at Japan’s Imabari many cases post-panamax will be a commercially attractive alter- Shipbuilding. The 48,006 dwt vessel was delivered on October 30 native for carrying coal and iron ore, such as from the east coast and was deployed into the Norient product pool where the vessel of the US to the continent, as well as from Australia and Indonesia made its maiden voyage to Singapore. The five sister ships, which to ports in India and Southeast Asia. We expect the post-panamax will be delivered in 2010, will all be given I-names in recognition pool within a few years to become among the leading suppliers of their origin at Imabari Shipbuilding. ]

Dalian gets a dedication from OOCL

The 4,578 teu boxship OOCL Dalian is on its maiden voyage after being delivered to Hong Kong’s Orient Overseas Container Line from South Korea’s Samsung Heavy Industries in early No- vember. The 50,600 dwt containership is the tenth in a series of 16 4,578 teu panamax boxships that were ordered by OOCL from The ship was christened by Dalian Port Container deputy gen- Samsung Heavy Industries starting from 2004. eral manager Dai Lihua accompanied by Port of Dalian Authority All 16 ships cost a total of about $1bn, while the remaining six vice president Wang Peng. are all due to be delivered by November 2010. Speaking at the ceremony OOCL chief operating officer Andy The OOCL Dalian has been deployed on the company’s intra- Tung said: “Dalian is a vibrant economic hub in north-eastern Asia China-Pakistan express service that has a port rotation of China. The port of Dalian is China’s eighth largest by container Shanghai, Ningbo, Shekou, Singapore, Karachi, Mundra, Nhave volume, with a throughput of 4.5m teu in 2008. Sheva, Penang, Port Kelang, Singapore, Hong Kong and Shanghai He added: I am certain that the OOCL Dalian, as an ambas- on a 35-day round trip. sador for world trade, will proudly live up to its name.” ]

12 asiamaritime November/December 2009 amchinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Dalian calling The northeastern city of Dalian is well on its way to becoming an international maritime centre

Cities across the Chinese seaboard are boasting they are in- DSIC is expanding at a nearby island, Changxing, at a new ternational shipping hubs in the making. Shanghai, with Beijing’s facility that will boast four large drydocks over 6m sq m. endorsement, is well on the way to meeting this status. Dalian, At Changxing visitors can glimpse the future of this shipbuild- in Liaoning province, is the other most likely municipality to be- ing powerhouse. come a shipping metropolis soon. Singapore’s IMC has a yard here as does South Korea’s STX As a percentage of municipal GDP, the maritime business ac- Shipbuilding & Offshore, the latter of which delivered its first counts for more of Dalian’s fortunes than its Yangtze River delta ships this year and claims to be the current largest shipyard in the counterpart. world in terms of area space. Six years ago the central government designated Dalian as a Other foreign shipyards in the city include the new repair future shipping hub in northeast Asia. facility belonging to Korea’s Daeyang Group, with two drydocks As the new decade unfolds, this former Japanese and Russian and four berths. enclave looks set to achieving its goal. The Liaoning outpost is also home to the flagship of the Cosco Shipyard Group. Cosco Dalian has the most sophisticated order- LNG clinches it book among the group’s six yards in China. The announcement last March that the city is to house an LNG Hong Kong’s Noble Group paid $320m this year to build four terminal was the final piece in the jigsaw for Dalian’s maritime 92,400 dwt post-panamax bulkers there, with Vroon from the completion. Netherlands coming in for a similarly sized order. Dalian Port (PDA) Co is building a 2.6bn yuan ($380.4m) Altogether, Dalian’s shipyards now produce more ships than LNG terminal as a joint venture with PetroChina. PetroChina al- the whole of Germany put together. ready has close ties with PDA. A new crude oil terminal, which With terminals and yards expanding, so too are the city’s is a joint venture between the two, came onstream this year with myriad owners – a mix of blue chip operations and niche an annual capacity of 20m tonnes. PDA, China’s third largest port operators. operating company, has proved to be a farsighted entity. As the The tanker headquarters of the world’s largest shipping com- downturn hit, it became the first Chinese port body to nix expan- pany, Cosco, is anchored in Dalian while local conglomerate, sion plans. Construction of two container terminals were put on the Haichang Group controls Sea Fortune, one of China’s largest hold this April. private tanker players. In total more than 12m dwt of ships are Hong Kong-listed PDA is set to become the first Chinese controlled by Dalian firms. port to be dual listed – an initial public offering in Shanghai is in Dalian has the full range of local and international service the offing. Expanding its footprint, PDA acquired neighbouring providers on hand from brokers, lawyers, financiers, classification Jinzhou port this year and has set about boosting its hinterland societies to managers and even flag states – IRI, which oversees with dedicated rail lines stretching to Russia and far inland in the Marshall Islands flag, has had a presence here for more than China. There are even moves now mooted to link the port with five years. the Trans-Siberian Railway providing shippers in northeast Asia Hong Kong’s Fleet Management sources its China crews with an attractive alternative overland route to Europe. from the city, which is home to Dalian Maritime University, the largest seafarer training institution in China. And there’s more Cementing its manning credentials in August 2009, the All The city is much more than just a thriving port. Dalian is home to Japan Seamen’s Union and the International Mariners Manage- China’s largest, and arguably most sophisticated, shipyard, Dal- ment Association of Japan held a groundbreaking ceremony ian Shipbuilding Industry Co, the flagship enterprise of state run for a state of the art Chinese Seafarer Dalian trainingcenter to China Shipbuilding Industry Co. be created in cooperation with the Chinese Seamen & Construc- DSIC has proved hugely successful at series construction of tion Workers’ Union. Training is slated to kick off in January all classes of ships and is now also China’s number one offshore 2010. ] construction firm.

14 asiamaritime November/December 2009 amchinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam amchinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Saved by the bell The stimulus package and growing offshore orders have ridden to the rescue of China’s larger shipyards

A t the height of the madness, nearby Tong Li Shipyard. there were more than 50 large Guo Yalin an analyst with greenfield shipyards under con- CITIC Securities maintains the struction in China. Business peo- stimulus package has saved the ple from all walks of life flocked larger yards at the expense of to plough money into shipping’s the smaller ones. “The pack- purple patch, confident that age comes as a boost to a sec- building ships would deliver even tor that has been struggling for better returns than skyscrapers. new orders and in retaining old Speculators piled in, too, sucking ones. Large shipyards are more up financial incentives from local likely to survive over the next governments. Yards even listed three years but life for small on Chinese bourses before they’d ones will be hard,” he says. completed their own drydocks, let A PingAn Securities analyst alone their first ship. who declined to be named Then the market crashed. comments; “Large state-owned Shipbuilding’s era of irrational shipyards in China have better exuberance came to a crashing capacity to tackle the difficul- halt. ties. Compared to small private shipyards, they have higher skills Something to sooth the and their clients are of better hangover quality. But for small and medi- While many yards have since um-sized private shipbuilders in folded, and others have been sub- Offshore newbuilding has been clearly recognised as one of the China, the situation is serious.” sumed by larger entities, Beijing’s focus areas for the Chinese shipbuilding industry to develop in the years to come $586bn stimulus package was a Offshore relief godsend. Aimed fairly and square- Another area of comfort for the ly at pump priming infrastructure during the downturn, Beijing’s larger, well-established Chinese yards has been in offshore fabrica- financial package has kept many shipping organisations afloat. tion which has helped mask the drop in ship orders. No other shipbuilding nation felt the chill of cancelled new- China’s yards have successfully contracted FPSO and FPSO builds more than China, thanks to the preponderance of bulkers on conversion work, semi submersibles, and even novel FPSO con- its orderbooks. cepts, such as the Sevan concept cylindrical FPSOs. Dalian Shipbuilding Industry Corp, the Cosco Shipyard Group, Coerced assistance Hantong Ship Heavy Industry, Shanghai Waigaoqiao Shipyard However, lines of credit were opened to all the major shipping and Yantai Raffles are all examples of yards with developing track lines, which were then coerced to pick up the slack. Principal records in offshore. Formerly best known as a crane manufacturer among these lines has been Grand China Logistics, an offshoot of Shanghai Zhenhua Heavy Industries is also a new formidable play- the HNA Group, which controls Hainan Airlines. Grand China is er in this sector, delivering the first homemade large-scale lifting rapidly replicating what China Shipping did during a downturn 12 pipe laying offshore oil engineering ship this July. years ago, snagging cheap tonnage on astonishing levels. The firm “Offshore newbuilding has been clearly recognised as one of currently aims to build a fleet of around 300 ships. the focus areas for the Chinese shipbuilding industry to develop in Multi-billion dollar orders have seen Grand China actually the years to come,” says Jörg Beiler, the vice president and regional buying into shipyards, including Zhoushan Jinhaiwan Shipyard and manager of DNV China.

November/December 2009 asiamaritime 15 amchinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Deltamarin seeks partnership network in China The Finnish naval architectural and marine engineering consultancy, Deltamarin, plans to have a fully operational network of partner companies – both shipyards and local owners – in China.

T o complement the Deltamarin representative premises in Shanghai, a new joint venture company, Shandong Deltamarin Ma- rine Engineering, has now been set up in Weihai, Shandong prov- ince, and the objective is to build up local skills and knowledge, especially for providing detail and production design in China. This base is the result of a 2006 decision by Deltamarin to link with state-owned Shandong New Shipbuilding Heavy Industry Co (a yard focusing mainly on container ships, panamax and larger bulkers and tankers). The goal is to provide technical and engineering services to Chinese shipbuilding and marine companies – especially to gener- ate complete efficient ship concepts, contemporary basic design handysize in the order of 30%-50% compared with offerings from solutions and production friendly detail engineering for owners China, Korea, Europe and even Japan. and builders seeking to enter more specialised sectors. A project currently under way within the Deltamarin Group, In a country that has seen rapid proliferation of greenfield ship- which also includes the Weihai office, involves a contract to carry yards, the consultancy can assist owners who have chosen to build out basic design details for Allseas’ giant and unique twin-hull off- there by identifying individual yards of worth. Contracting services shore platform installation/decommissioning vessel, Pieter Schelte. are introduced to support the shipbuilding project especially when Deltamarin’s scope covers naval architectural aspects, structural more advanced ships are being designed, planned and built. engineering, accommodation and system engineering, piping, By integrating these services into the overall portfolio of the electrical, instrumentation and HVAC work. Much of the long lead Deltamarin group, the entire design and engineering field, including machinery and material has already been ordered so a high level project management, planning and procurement support, is covered. of detail is available to put to use. Apart from more complex ships, focus has been on advanced An early success for Deltamarin in China was the 21,513gt new bulk carrier types of 40,000 dwt (handysize) and 64,000 dwt Louis Dreyfus/Leif Höegh ro-ro ship, Ville de Bordeaux, completed (supramax). Using the same hull forms, state-of-the-art product in 2004 by Jinling Shipyard in Nanjing to carry Airbus parts around and chemical tankers have also been created. Deltamarin hopes to Europe. However, prior to this, Deltamarin also designed the suc- sign the first shipbuilding contract for such tonnage early next year, cessful Finnmaster series of single screw freight ro-ro ships from since marketing and first owner projects are already underway in the same builder which helped to put the yard on the world map. association with the leading Parisian broker, Barry Rogliano Salles, One of Deltamarin’s specialities is shipyard evaluation, both which has cooperated over the evolution of the new models. for yards themselves and for owners considering unknown compa- Although prospects for dry bulk and tanker tonnage have been nies for their new projects. A typical example in China was Del- severely subdued over the last year due to the global economic cri- tamarin’s 2007 evaluation of Wison Heavy Industries, with yards in sis, some momentum appears to be returning, especially for special Nantong and Zhoushan, which hopes one day to build ro-ro and type carriers. ro-pax ferries – and with procedural improvements, perhaps cruise For these new classes, Deltamarin has developed designs that liners. More recently, Wison made a decision to enter the world of can be built at reduced costs but which are still highly efficient, offshore fabrication. with high earning capacity and deadweight but modest fuel costs. Deltamarin has also made a successful entry into Chinese Indeed, for the new B.delta37 and B.delta64 bulkers, Deltamarin is offshore work, as construction heavy lift and other specialised ton- claiming consumption reductions at the design draught and serv- nage plays a more prominent role in Chinese order books and as ice speed – for the supramax in the order of 10%-30% and for the the country develops its offshore resources. ]

16 asiamaritime November/December 2009 amchinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam amchinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam The wages of destruction China could reduce its dependence on imported raw materials by fully embracing the sustainable ship recycling concept

What a difference a year can make: in 2007, everybody retention of personnel for the new task in hand. wanted a newbuilding, in 2008 the sight of a new vessel hitting the Additionally, Mr Bowring said, because recycling steel de- water for the first time was an object of horror – and remains so. manded less energy than smelting new material such a move In looking for a solution to this problem, an increasing number would reduce the country’s dependence on imported coking coal of industry participants are looking to China. In much the same and iron ore. “Scrap steel can be re-rolled or melted into material way as the discovery of the atom was going to save the world, but such as reinforcing bar, suitable for the construction industry.” nearly destored it, greenfield shipbuilders along the coast of China In order to fully benefit from the concept Mr Bowring urged are now being called upon to destroy rather than build ships to the Chinese Government to abolish the current 3% tariff and 17% save the necks of extravagant shipowners. value added tax imposed on vessels imported into China for recy- China already has a number of sustainable recycling yards but cling. demand will rise and the number of yards will need to grow to And if Chinese shipowners in particular are not lured by the cope with demand. carrot they might feel the stick if the authorities get tough: the Chi- The first time this possibility was pushed as a debatable propo- nese Ministry of Communications estimates that 35% of the exist- sition was by the astute group strategy director of Lloyd’s Register ing fleet owned by Chinese interests are over 25 years old. John Stansfeld back In There can be little April this year. doubt that the demand Sparked by the immi- for scrapping makes for nent arrival of the Interna- a booming industry, at tional Maritime Organi- least in the mid-term. zation’s ship recycling Up to 1,200 ships are convention, Mr Stansfeld expected to be scrapped said: “In addition to ship- this year. As for next year, building and shiprepair, at a recent London-based China has an opportunity ship recycling conference to show the world how to Germanischer Lloyd head recycle responsibly.” of recycling Henning Mr Stansfeld said Gramman suggested that that the pressure to scrap there might be as many vessels in more sustain- as 2,000 ships recycled able ways would open in 2010. opportunities for modern Going forward busi-

recycling facilities to China is embracing sustainable ship recycling ness still looks good. challenge the dominance With a global fleet of ap- of Bangladesh, India and Pakistan, which, unlike China, are not proximately 50,000 ships, according to GL 14% of them are over signatories to the convention. 25 years old leading to a potential for scrapping over the next cou- “The potential realignment of China’s tertiary shipyards to recy- ple of years in excess of 1,700 vessels annually. cling looks to be a promising option, with many already in posses- A possible fly in the ointment will be the value of the ships sion of the concrete facilities in locations suitable for trade,” he said. scrapped. According to Anil Sharma of GMS the scrap value of a Since then, the call for China to take up the recycling baton in very large crude carrier has dropped from $30m in 2008 to just a green way was given further impetus by Hong Kong Shipowners’ $10m today. Association managing director Arthur Bowring. There has also been an increasing trend by ship recyclers on At the recent World Shipping (China) Summit Mr Bowring the Indian sub-continent to pick and choose tonnage as capacity pushed the very real benefits to China in expanding its sustainable falls. The result is that smaller tonnage is finding it increasingly dif- ship recycling yards: the reduction of shipbuilding capacity but the ficult to find a place to die. ]

November/December 2009 asiamaritime 17 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Winds of change South Korea’s largest shipbuilders are tipping at windmills

Nestli ng between the Yellow Sea and north Pacific Ocean, Wave power development could provide a further rich seam of South Korea’s exposed geographical position could help provide a business given South Korea’s tidal ranges vary between 4m and 8m financial lifeline to the country’s hard pressed shipbuilders as they and the country plans to generate 812MW from wave power by grabble with a dearth of new orders. 2015. With daily mean wind speeds in winter alone ranging between 5 and 10 metres per second, the country’s southwest coast is par- Wind rush ticularly well suited for the development of wind energy. A group of 26 firms and organisations have already formed a

18 asiamaritime November/December 2009 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

consortium to develop a Won15,500bn ($13bn) wind farm on the country’s south-west coast in Jeolla province. Daewoo Ship- Wave power development building and Marine Engineering is among the firms involved in the project which is part of the South Korean government’s low could provide a further rich carbon-green growth initiative launched last year. seam of business The estimated project cost is more than DSME’s $10bn order target for this year. But it is just over half the annual $20bn in ship- building orders top builders Hyundai Heavy and Samsung Heavy to build 200 wind turbines in 2010 ranging between 2.5MW and secured during the boom shipbuilding years. 5MW. Nevertheless it will provide a fillip. Indicating the kind of life- DSME paid Won49.8bn last August to take a controlling stake line wind power could provide, DSME says, compared with its in US wind turbine maker DeWind Turbine. DSME chief executive order target, it has won shipbuilding orders totaling just $750m in Nam Sang-tae says: “By combining DSME’s know-how in design the first nine months of this year. and DeWind Turbine’s wind power technology, we are confident to Aside from the domestic market, these leading shipbuilders are make a fast advance in the field.” also eyeing overseas markets for wind power and other renewable Similarly, STX Heavy Industries bought Dutch turbine manufac- energies. turer Harakosan Europe for around Won24bn in July, later chang- Hyundai Heavy Industries recently signed a deal with US com- ing the firm’s name to STX Windpower. pany Wave Wind to build six 1.65MW wind turbines. “Based on STX Windpower’s technological prowess, we plan to Samsung Heavy Industries is aiming to be among the world’s build our wind power business to form the core of our new growth top seven wind turbine makers by 2015. The shipbuilder is looking engines,” STX says.

A Class industry Classification societies are also looking to take advantage of the ”Korean Register is playing a upsurge in global wind power development with a raft of initiatives key part in the low carbon, with South Korean shipbuilders. So far just three class societies – Det Norske Veritas, Germanischer Lloyd and Korean Register – green growth drive.” Korean have experience in the area. DNV is already in discussions with South Korean interests Register of Shipping Chairman about furthering its involvement in wind power and other renew- and Chief executive able energies, although it declined to give further details. Korean Register of Shipping chairman and chief executive Oh Oh-Kong-gyun Kong-gyun said: ”Korean Register is playing a key part in the low carbon, green growth drive.” This includes “research and development projects with in- dustry partners” and the creation of a wind turbine certification scheme done last year under a project funded by the Ministry of Knowledge and Economy. Korean Register is on South Korea’s ocean energy technical committee that is working on research for wave power and tidal current plants. But aside from the wind turbine and renewable energy market, shipbuilders and class societies are also looking to- wards a huge expansion in the number of ships and other specialist vessels that will be needed to help construct offshore wind farms and associated projects. DNV president Henrik Madsen is unsure how many ships would be needed but said there is a shortage of available tonnage. Some operators have been using handysize bulk carriers be- cause of their relatively shallow draft and onboard crane capability. But shipbuilding sources said the optimum design would feature vessels with a semi-submersible heavy-lift capability that would have four to six jack-up legs that would support the vessel while unloading and positioning the wind turbine tower. ]

November/December 2009 asiamaritime 19 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Sinking shipowners bailed out South Korea’s state-owned banks have been called upon to keep the maritime industry afloat

S outh Korea has mobilised the resources of its banking and financial services organisations to help hard pressed domestic ship- owners and shipbuilders to weather the perfect storm created by the global financial crisis, overcapacity and evaporating cargoes. Both the Korea Development Bank and Korea Asset Manage- ment Corp have stepped in to offer South Korean shipowners help despite criticism from wider international circles that the bail-outs perpetuate rather than solve overcapacity problems. The two organisations have already widened the scope of their schemes. But while the Korea Development Bank has invited foreign banks such as Sumitomo Mitsui Banking Corporation and DVB Bank to participate, the support to shipowners has so far been remaining $65m for the capesize ship. He says a senior lender limited to South Korean carriers. agreed to provide $36m, while KDB provided the remaining $29m But this is expected to change after the head of KDB shipping and paid $2m in arrangement fees and associated costs. finance team Lee Dong-hae said talks were taking place between Mr Lee says the deal was possible because the bank used the bank and the Export-Import Bank of Korea (Kexim) to develop a future operating revenues from the vessel as part of the financial financing programme for foreign shipowners. equation, while the risk to the senior lender was limited because it only paid the cash upon delivery of the ship. Cancellations But some international banks have criticised the scheme point- Asked about the level of cancellations, Korean Register of Shipping ing out that the $800m that was envisaged would come from the chairman and chief executive Oh Kong-gyun says: “As far as new- banking community would reduce the amount of cash available for buildings are concerned my sources tell me that 15% is the total ship finance generally, not just for projects in South Korea. number.” Mr Lee indicates that if there were problems persuading foreign So far, the Korea Development Bank has a $1.6bn war chest lenders to participate then either the KDB or Korean banks would available through its ‘Let’s Together Fund’. Out of the total, $800m step in to make up the shortfall. will be made available from the bank with the remaining $800m By comparison, KAMCO has formed a Won1,000bn ($864m) from financial institutions. fund to help ship owners, although this is expected to rise to Won4,000bn. A key difference in the two schemes at the moment is that the “As far as newbuildings are KDB initiative helps owners finance newbuildings and secondhand vessels that will be delivered into owners’ fleets. The Kamco pro- concerned my sources tell that gramme is a sale and lease back scheme whereby owners are able 15% is the total number.” to leverage the asset value of their ships, selling the ships to the fund and using the cash for working capital. Mr Lee says 11 South Korean owners had applied for financial So far, KAMCO has been buying and leasing back ships in help for 24 newbuildings and 20 secondhand vessels. These own- operation, but it extended the scheme from mid-November asking ers included Dong-A Tanker, STX Pan Ocean, Hyundai Merchant owners to propose new buildings that are due to be delivered by Marine and SK Shipping. next May. But only one ship finance deal has so far been done, covering Kamco has bought 17 vessels including ships operated by a capesize vessel ordered at a cost of $81m, although negotiations Hanjin Shipping and Hyundai Merchant Marine. were close to being finalised for another two. All three involve South Korea’s Ministry of Land, Transport and Maritime Affairs newbuildings ordered by Korea Line Corp. said the Korea Export Insurance Corp is also mulling plans to pro- Mr Lee says Korea Line made $16m in advance and vide loan guarantees to South Korean shipowners with orders at staged payments before seeking the bank’s help in providing the domestic shipyards. ]

20 asiamaritime November/December 2009 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Hanjin’s hopes Hanjin Shipping is South Korea’s leading shipping line, all are looking to its recovery for a glimpse of 2010 fortunes

W ith its container and bulk shipping operations along with of housing starts is down to around 500,000 compared to an aver- its container terminal interests, Hanjin Shipping could be seen as age of 1.8m a year between 2002 and 2007. a barometer for South Korea’s wider shipowning community. And Hanjin Shipping said part of the increase in sales revenue in after the stormy conditions in the 12 months, the firm has forecast the third quarter to $1.44bn came from rate increases. These began relatively fair conditions for the rest of this year. in earnest from June when the company raised westbound con- The firm says it continues to “believe that rate recovery at- tainer rates by $250 per teu and $500 per feu on Far East-China- tempts in the Europe lanes and bunker adjustment charges in the southeast Asia to Mediterranean services. transpacific lanes will yield positive results” even though the fourth Reflecting the action that was taken by many of Hanjin’s con- quarter is traditionally the slack season for the container trades. tainer shipping rivals including Cosco Container Lines, Evergreen Similarly, Hanjin Shipping hopes for “improved sales perform- Marine and Orient Overseas Container Lines, these were followed ance in the bulk division mainly from the expected increase in by rate hikes on transatlantic and Asia-Europe services. demand for iron ore, coal and agricultural products and stronger Again, like many of its Asian rivals, Hanjin Shipping has aug- industry sentiment”. mented these freight rate increases with the launch of new services So far this year, the company has posted total sales of $4bn for or sharing routes with other carriers. the first nine months, but net losses over the past three quarters For Hanjin Shipping this involved the start in November of two stand at $854m and the firm’s debt ratio has soared from 172.5% services with the first covering the Far East-India trade and the sec- in the first quarter to 270.9% between July and September. ond, the Far East and Middle East.

Brighter outlook Strength in numbers But there are some signs the cloudy skies are clearing as quarter- The company has also strengthened its partnership with fellow on-quarter sales and box volumes continued to rise and net losses members, comprising Coscon, Kawasaki Kisen Kaisha and Yang were trimmed as the year went on. Ming Marine, in the CKYH Alliance. The group launched a direct Total liftings in the first nine months topped 2.31m teu includ- service between Vietnam and the US east coast after adding Ho ing 914,531 teu in the third quarter alone as a result of the peak Chi Minh City to its All Waters East Coast-4 route from August. season rush and inventory re-stocking. In mid-November, the group took the cooperation a stage fur- Most of the increase in quarterly box volumes has been on the ther by going ahead with plans to introduce super slow steaming on Asia-Europe trade, which for a company that has traditionally re- certain routes. This will see vessel operating speeds cut to around lied on around 55-60% of its container shipping revenues from the 14-15 knots compared with the usual service speed of 22-25 knots. transpacific must be worrying. The partners also agreed to proceed with a series of cost cut- While some economic data from the US might show signs a ting measures to control operating costs and save energy resources. recovery is underway, Macquarie Research pointed out the number Super slow steaming is increasingly being adopted by box lines as a way of saving fuel, cutting air emissions and soaking up excess container ship capacity that would be idled or laid-up.

Growing bulk fleet Hanjin Shipping has also been building its dry bulk fleet, which currently stands at 93 vessels totalling 8.44m dwt, after taking de- livery of the 180,000 dwt capesize Hanjin Sines in July. The impact in extra earnings from this additional vessel was partly reflected in the 7% quarter-on-quarter rise in revenue to $296m for the bulk division in the third quarter. Hanjin Shipping spokeswoman Sonya Cho says the vessel was the first of four capesize bulkers on order at South Korea’s Hyundai Heavy Industries. ]

November/December 2009 asiamaritime 21 amshiprepairamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam No safe havens Shipping majors have sought a haven from the storm in shiprepair but it will be a while yet before the move pays dividends

Seemingly there is no maritime niche safe from the downturn. Shipbuilders are slashing prices by up to 40%, freight rates are at close to all time lows, salaries are being slashed and jobs lost. The knock-on effect as shipowners struggle to raise cash is that shiprepair too is seeing business disappear. Just one example last month was Thailand’s Asian Marine Services, which succumbed to a 71% decline in revenue in the third quarter at its shiprepair division. The Arab Shipbuilding and Repair Yard, after a sparkling year in 2008, and record sales of $200m, now finds business has slowed to a trickle. The yard is now looking to offshore work to stay afloat. more than 60 ships through charter, adding up to a lot of potential Meanwhile, European shiprepair yards as a whole expect rev- customers that could be catered for in Dalian where the unit can enues to decline 20% from the highs of 2008. repair up to 12 vessels simultaneously. Although shiprepair facilities such as ASRY and Asimar Express Even so, he has had the foresight to adapt the initial plan; if hope for a better year in 2010, this is at least debatable. shiprepair business drops off, like Asry, the firm has its sights set on offshore work and the construction of structures such as pip- New capacity on the horizon ing for offshore plant. Chemical plant production will form a third The latest depression in shiprepair revenues and business overall revenue stream. is coinciding with a considerable influx of new capacity. It is also But just down the road from Mr You’s office in Seoul another unlike the traditional facilities in as much as they are invariably major shipping concern had very similar ideas. tied financially to shipowners looking for their own secure repair capacity. More capacity The first such yard, which opened its doors officially in July With a large plot of land close by the busy port of Shanghai, South this year, is the massive Dalian-based facility owned by Daeyang Korea’s largest shipowner Hanjin Shipping has created one of Shipping of South Korea. the world’s largest shiprepair yards on Qushan Island in Zhejian The brain child of chairman Chung You Kuen, the $150m ship- Province. yard was first planned in 2006, amidst a strikingly different market Having received the official approval of the Chinese Govern- than the one we see today. And yet the 550,000 sq m facility that ment to repair foreign ships in September this year, Hanjin, together has a 300,000 dwt dock and a 100,000 dwt dock alongside could with its local partner Shunhe Shipping, has already repaired 24 ships still do well eventually. Mr Chung’s Daeyang Shipping controls since April – and attracted an additional 32% joint investment from

The recession has affected the business due to a decrease in the overall shipping traffic. Lower shipping rates are making owners reconsider

22 asiamaritime November/December 2009 amshiprepairamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

”We needed to secure docks to have our ships repaired under stable conditions.” Sonya Cho: Hanjin Shipping

Japanese major Kawasaki Kisen Kaisha and Shanghai Changjiang Titan says that the yard will be capable of repairing up to 250 Shipping, part of the Sinotrans group. vessels annually. Following the completion of phase one, the new yard sits At the other end of the scale there does seem to be room for on 550,000 sq m of land and contains a 150,000 dwt dock, a players interested in smaller vessels, particularly if they are part of 300,000 dwt dock and a quay of 670m. When phase two is com- the offshore scene. pleted, the facility will also have a 400,000 dwt dock with a quay of 640m. However, there is no definitive time schedule for the Niche player completion of phase two. In its announcement the company ac- The shiprepair division of Middle East-based Topaz Energy and knowledged that shiprepair business was not exactly booming as Marine has a thriving business from Abu Dhabi to Dubai in the re- yet. pair, conversion and maintence of marine supply vessels and other “Once the shiprepair industry recovers, Zhejiang Eastern offshore support vessels. Shipyard Co will be able to repair around 150 ships a year and The Abu Dhabi facility has a 75m x 22m floating dock with a as soon as phase two is completed, it will be come a mega- 2,000 dwt capacity. The facility can handle one ship at a time at sized ship repair yard with a capacity for 300 ships on an annual its 500m wharfage. basis.” At Fujairah a marine travelift is capable of lifting vessels up to Importantly, the company says, “In accordance with the in- 40m long with a beam of up to 10.2m and with a weight of up to crease in our fleet, we needed to secure docks to have our ships 200 tonnes. Topaz says that currently the waiting period for dock- repaired under stable conditions. Also, it seems a good business ing is between 15 days and one month. model when considering the number of ships owned by our CKYH The Fujairah unit can repair up to four vessels each up to 35m Alliance partners as well as other major shipping carriers.” long. But, like Daeyang, Hanjin intends to add the assurance of an Topaz Energy and Marine spokeswoman Monika Baranwal additional revenue stream: “As Hanjin Shipping is planning to says that location is an important factor in considering the yard: expand its current shiprepair business to offshore and floating, “With facilities in Fujairah and Abu Dhabi, Topaz is able to dock production, storage and offloading units, the company believes small supply vessels on both coasts of the United Arab Emirates.” that it will become one of its major drive forces for sustainable And the company is fully geared up for offshore work says growth,” it adds. Ms Baranwal: “Topaz gets its major marine repair orders through And yet, K Line may yet emerge as the canniest player. In ad- afloat repairs. All three Topaz subsidiaries based in Dubai, Fujairah dition to its relatively small investment of 12% at Zesco, it has and Abu Dhabi undertake afloat repairs. The company employs ploughed cash into yet another shiprepair yard on the Chinese 1,800 technicians in this field.” coast that is expected to start doing business next year. In addition, she says, the company is capable of providing ma- rine repair services in any part of the world. And even more capacity “We are a one-stop-shop for all marine repair activities,” she Titan Quanzhou Shipyard, close to Xiamen in Fujian Province re- says. ceived a $25m investment from K Line in August 2008, although it Ms Barawal concedes that the industry has been hit by the will not be fully operational until next year. economic downturn but maintains that Topaz is still busy. The yard, which is majority owned by Titan Petrochemicals “The recession has affected the business due to a decrease in threatens to equal the size of Hanjin’s yard. Docks 1 and 2 are the overall shipping traffic. Lower shipping rates are making own- designed to dry dock vessels of more than 300,000 dwt as well as ers reconsider and postpone major repairs and refurbishments. the all-important offshore drilling units such as jack-ups and semi- However, due to Topaz’s strong market position and aggressive submersibles. Docks 3 and 4 are sized to dry dock ships up to marketing we have managed to achieve occupancy of 85% to 100,000 dwt. 90%.” ]

November/December 2009 asiamaritime 23 amfuture prospectsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Making a difference Asia Maritime introduces figures in shipping who are likely to have an impact in 2010

The Green Leader Raising the flag Leading Japanese ship operator Nippon Yusen Kaisha has for some It took just six years for Annie years been at the maritime vanguard of the environmental debate. Ng to climb the ladder from The company’s leading advocate and secretary general of the Cool corporate administrator to man- Earth Project is Mashiro Samitsu. aging director at International Through his years at the Registries (FE). And in that time head of CEP, Mr Samitsu has de- and the ensuing three years the veloped a clear-eyed view both administrator of the Marshal Is- of the danger climate change lands Register has grown out of represents and the political con- all recognition. Since the locali- sequences of not acting to com- sation of the operation, markets bat it. such as Japan and South Korea, Annie Ng: changing the way [Shipping] “could have a previously closed to the register, registers do business serious impact on global warm- have opened their doors with ing if CO2 emissions expand as alacrity. economic growth in developing The Marshal Islands Register just ended its third quarter with countries leads to enhanced de- 50.6m tonnes and more than 2,060 registered vessels, a 17% Masahiro Samitsu: Leading the green mand for shipping. At the same battle on behalf of shipowners growth over the same period last year. time, CO2 emission growth “After years of building our flag administration providing 24/7 caused by international shipping ship registration and technical services worldwide and introducing could give a good excuse for protectionists to attack free trade,” he these commitments to Asian owners over five years, we have had says. a very positive response from leading owners in Korea and Japan,” “Protectionism advocates could maintain that it does not make she says. sense to ship products from the other side of the world and pay “With the current commitment from owners, we anticipate the high price of extra CO2 emissions. If the burden levied on the 100% growth from Japan and 50% expansion from Korea in 2010.” environment by international shipping becomes a virtual trade bar- Ms Ng attributes the increased Asian interest both to the Reg- rier the future wealth of developing countries would come under istry’s decentralisation and to its positions on the white lists of the threat.” Tokyo and Paris MOUs and on the Qualship 21 list of the US Coast Under the auspices of CEP Mr Samitsu is pioneering the project Guard. named “Road to Emissions Zero”. As to 2010, Ms Ng expects the Mrshall Irlands Registry to move “With this vision in mind we will gradually replace 100% into the number three position among open registers early in the heavy oil dependent diesel engines and generators with renewable year and that the growth will continue. natural energy and fuel cells, he says. Ms Ng has contributed greatly to the promotion of the decen- “By 2050, we aim to install renewable-energy-powered fuel tralisation process that has been undertaken at International Reg- cells and achieve zero emissions from ships. istries. It is a concept that other major open registries will have to “We have already begun to walk this long road with the launch take on board if they are to compete in 2010 and beyond. of our solar-power-assisted Auriga Leader in 2008. The next leap forward will be the introduction of the NYK Super Eco Ship in Ship Manager with a vision 2030.” Managing director of Thome Ship Management in Singapore Bjorn The work of NYK, the Cool Earth Project and Mr Samitsu will Hojgaard only began working in third party shipmanagement two be key in the coming years to convince the Euro-sceptics that the years ago. But he has already glimpsed the future of the sector. It’s industry can meet its emissions commitments without their bureau- a future where shipmanagers will be more in control of their des- cratic interference. tiny and that of shipping as a whole.

24 asiamaritime November/December 2009 amfuture prospectsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

"Third party shipmanagement will occupy an increasing share of the total shipmanagement market with traditional owner-managers stagnating or contracting." Bjorn Hojgaard managing director Thome Ship Management

“The industry [shipmanage- The flexible shipowner ment] will become more polar- The global head of container ised. Shipmanagement compa- shipping at APL Eng Aik Meng nies that are already mid-sized believes that shipping compa- or large will become bigger as nies during the current crisis economies of scale and cost- need to do more than just push- efficiency take precedence over ing up freight rates. new innovations and long-term “We must take the oppor- investments and as cost-cutting tunity to engage customers in burns away fat,” he says. constructive dialogue. So we “Smaller companies will can better understand one an- have to carve out their niche to other’s challenges and also to Bjorn Hojgaard: More power to the Eng Aik Meng: Shiponwers will have survive and will become more shipmanager develop strategies to capture to be flexible focused on boutique segments, business opportunities that are for example off-shore segments. mutually beneficial. Thome started a new company a few years ago. Thome Offshore “As carriers we must continue to innovate and launch new Management specialises in FSOs, FPSOs, platform supply vessels service offerings, despite the highly challenging operating environ- and anchor handlers because we found it difficult to provide these ment,” says Mr Eng. exclusive services “under the same roof” as our main deep sea As the reduction and management of costs continues to be of fleet. In any case – growing one-stop shops or specialised manage- equal priority to shippers and lines, Mr Eng sees opportunities in a ment offerings – the value proposition will increase in sophistica- significant trend towards the conversion of cargo from air to ocean. tion and the demand to offer solutions and not just low running “As shippers seek to reduce costs, we are seeing growth of costs will increase.” time-definite services for both full and less than container services. According to Mr Hojgaard, those third party shipmanagement Also, due to improved handling and shipping techniques, certain companies that grow in the new environment will develop greater fresh produce and pharmaceuticals are converting to ocean freight. clout. Supply chains are transforming,” he says. “Third party shipmanagement will occupy an increasing share “Will future growth be in high or low value products? They of the total shipmanagement market with traditional owner-manag- have different supply chain requirements. Smart logistics and trans- ers stagnating or contracting. The outcome will be that the maturity portation companies are developing multiple strategies to cater for and acceptance of third party management will accelerate and both segments in the West and in Asia,” he said. shipmanagers will play a larger role in the political and regulatory Mr Eng believes that great opportunities exist for companies to environment,” says Mr Hojgaard. add value to new and transformed supply chains in a new world “Barring a few large and well know managers the industry has order. in the past been living in the shadows of big owners – this will “But to help guide shippers to opportunities in a new world or- change and shipmanagers need to step up their rhetoric and par- der, transportation and logistics operators must be able to invest in ticipate more prominently in the public spotlight in the future.” assets and continuous innovation,” he concludes. ]

November/December 2009 asiamaritime 25 am2009 in reviewamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam UNDER SIEGE

26 asiamaritime November/December 2009 am2009 in reviewamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Shipping had few places to hide in 2009

Has there ever been a year when the maritime industries have to the National Union of Seafarers of India to regional representa- found themselves so comprehensively under siege? Unlikely. Apart tives such as the Asian Shipping Federation and global bodies such from the financial damage, of which more later, there has been the as Intertanko, for once shipping was singing from the same song very real infliction of pain and fear onto the industry’s “most pre- sheet in their outright condemnation of such a cynical approach to cious asset”: its people. justice. The attack on the seafarers of Asia and around the world has And yet, as the global maritime community and India as a come from two extraordinarily diverse agents: from the entirely whole were baying for the freedom of the Hebei II, three crew lawless, in the sinister form of Somali pirates, to the equally sin- members of the very large crude carrier Tosa were found to be held ister arm of certain governments intent on criminalising innocent without charge in Taiwan following the alleged collision of the seafarers. VLCC with a fishing vessel. Similar to the financial assault the industry has taken, the most In July criminalisation of seafarers doing their job moved high profile example of an attack on the rights of seafarers began to Norway with the detention of two Chinese seafarers of the before this year. grounded Full City. Another flood of outrage swiftly followed. And In the case of the “Hebei Two” their misery began December yet there were not so many industry voices leaping to be heard on 7, 2007 on a cold night off the coast of South Korea. Hit by a this latest occasion, indicating perhaps that the possibility of an drifting crane barge owned by Samsung Heavy Industries, with extended period of unity in the industry was a chimera. a consequent 10,500 tonnes of oil spilled from the Hebei Spirit – South Korea’s worst oil spill - their fate was seemingly sealed Piracy amidst a swathe of political considerations never owned to by the At about the same time as the Hebei II were being locked up, ship- authorities. ping was increasingly having to watch out for itself off the coast of Africa, notably Nigeria the most active area for piracy attacks in April 2008. But attention was soon to move to the Gulf of Aden despite 82 attacks off Nigeria in 2008. Here again, sadly, the fragmented If anything good came from nature of the global shipping industry and its many flag states has this travesty it was that a resulted in the failure thus far in countering the problem effectively. In this respect Asia had little to be proud of in the early days usually highly fragmented of the current crisis. Both South Korea and Japan left it to the first global maritime community half of 2009 to send naval contingents to join the existing western task forces. And China too was slow to move but has gained in came together as one to confidence somewhat and belatedly taken on a more cooperative proactive role. call for justice But the attacks continue – more than 250 vessels have been victims since 2008 – and there is still no sign of a let up. But has the world really brought all it has to bear to the situation. Clearly not, when 30% of flag states still contribute nothing to the fight on Captain Jasprit Chawla and chief officer Syan Chetnam re- the water. mained in detention in South Korea for more than 18 months and In November a call for a halt on the transiting of the Gulf of served nearly two months in jail before finally being freed by a de- Aden by the International Transport Workers Federation coincided cision of South Korea’s High Court, confirming an earlier Supreme by threats from the government of the Philippines to ban its nation- Court appeal judgement. als from working on ships that would navigate the pirate infested If anything good came from this travesty it was that a usually zone. highly fragmented global maritime community came together as Whatever the disruption to commercial trade in the short term one to call for justice. From the employers, shipmanagers V Ships perhaps both parties need to follow through with their threats. It

November/December 2009 asiamaritime 27 am2009 in reviewamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Unfortunately 2009 will end with many concerns unresolved

perhaps needs consumers to feel the pain before we see govern- ments truly get serious.

Rule B attachments This year has been the year of the Rule B at- tachment, a tool of US civil procedure that completely caught global shipping on the back foot. Thought by many to be something nasty found on a piece of junk mail, many shipping companies were stunned to find they could not access funds sitting in the US, includ- ing wire transfers. Throughout 2009, claimants, usually seeking unpaid charter hire, could attach property of a foreign defendant, where the property was in the US in the absence of the owner of that property. Literally hundreds of incidences appeared in the US Seafarers fear the spectre of criminalisation courts up until October, when a surprise decision by the US appel- late court seemingly outlawed the attachment of electronic fund transfers. a 10% drop in its share price. STX Shipbuilding and Offshore has Now it’s back to the more traditional, and somehow more alone issued Won1.2trn in bonds this year. gentlemanly arrest of a ship to gain redress. The demise of Rule B Large industrial shipowners in Japan such as Nippon Yusen Kai- also removes a US status in global shipping matters that was unde- sha also had to resort to the bond markets to fund ambitious new- served. building schedules. In August it announced plans to issue $630m in bonds and has the capability to issue another $100m in debt. Brother can you spare a dime Finally, in November NYK had to resort to the equity markets Of course, 2009 has been the year of money and the extreme lack with a pan to issue $1.6bn worth of new share both at home and of it – the full impact of which was not felt in Asia until after the abroad – a move that would have caused the company some con- collapse of Lehman Bros in September 2008. siderable discomfort. As earnings ran out under the pressure of freight rates that could not meet costs and despite the autumn recovery in funding The losers from Chinese and South Korean banking institutions, notably state- Despite the many funding alternatives that presented themselves owned ones, shipping companies and shipbuilders had increas- to previously conservative shipowners, some companies, were ingly to tap equity and bond markets. sadly beyond saving. South Korean shipping companies, Daewoo In the case of South Korea’s major shipbuilders, Hyundai Heavy Logistics and Parkroad were among the casualties. But perhaps the Industries, Samsung Heavy Industries and Daewoo Shipbuilding collapse of Singapore-based Armada Shipping was the most high- and Engineering have issued bonds worth in excess of Won1.5trn profile example of a company built on sand that admitted no light ($1.2bn) in order to keep working capital at viable levels as new- when it came to getting to the bottom of the faults built into the building orders fell off precipitously. model. In the case of STX Corp, which controls shipping, shipbuilding Unfortunately 2009 will end with many concerns unresolved. and offshore interests, the company has been taking bites from two In 2010 we cannot yet reasonably expect criminalisation of seafar- cherries. In the latest instances its shipping arm STX Pan Ocean ers to have ended. Unless more is done pirates will continue to has announced a $200m bond issue to cover working costs with a attack ships and their seafarers, excess capacity will continue to be fund for newbuildings, almost simultaneously with a share issue of a feature of the industry. And we still won’t know just how many $139m by the parent company: the share issue cost the company new ships will hit the waters next year. ]

28 asiamaritime November/December 2009 amhong kongamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Hong Kong moves up the value ladder Hong Kong is readying itself for a high-tech luxury acquisitive southern China

This autumn has seen companies land’s 12-year plan for the reform and devel- in the logistics and maritime field either opment of the Pearl River Delta, such low- migrating or pondering migration from value production is rapidly being replaced Hong Kong to Singapore. by the development of high-tech industries Logistics players Kuhne & Nagel and on the western part of the PRD. Agility Logistics said they would move The construction of the Hong Kong- their senior management teams to the Macau-Zhuhai bridge which will cut journey Lion City Simarlar Clarkson moved most times between hubs from four and a half of its broking operations from Hong Kong hours to about 40 minutes, is confidently ex- to Singapore. Also part of the exodus has pected to accelerate the envisioned develop- been shipping company China Naviga- ment of the PRD and connect Hong Kong to tion. a series of second and third tier cities beyond Other than a rumour that one busi- the seamless links to Guangzhou. ness leader was persuaded by his wife to “The logistics pie is growing bigger move to Singapore, the companies have through a move up the value chain in terms been coy to explain the reasoning for the of what is being produced in the PRD and shift away from what must be the most greater demand for foreign goods from a Where is the business? dynamic part of the region. wealthier mainland population,” says Mr Ng. News that the heads of these com- Due to the introduction of 0% tax on panies were on the move served as part The logistics pie is wines Hong Kong has quickly picked up the of a double whammy that has hit busi- growing bigger mantle of the region’s wine hub. Pharmaceu- ness sentiment – the second part was the ticals too are moving in en masse, and Mr policy address delivered by the territory’s Ng speaks with confidence of foreign manu- chief executive Donald Tsang in September. facturers of high value goods taking advantage of Hong Kong as A one-line reference to ship finance and a brief on facilitating a preferred hub for goods requiring stringent intellectual property the development of a logistics cluster in the Kwai Tsing area, and protection. eventually on Lantau, with no accompanying time frame left ship- Hong Kong no longer has to sell itself simply on its rule of law ping companies and logistics providers wanting more. and freedom of speech. Mr Ng explains, “Hong Kong is the most But associate director-general of investment promotion at the important financial centre in Asia. It is home to more than 1,500 government body InvestHK, which assists overseas, mainland and trading companies exercising global procurement. And Hong Kong Taiwanese companies to invest or establish a presence in Hong is the only city where RMB settlements can be made on trade in Kong, Charles Ng is convinced that Hong Kong is the place to be and out of mainland China.” for third party logistics providers. Any logistics provider looking for more reasons to set up in Put succinctly, his rhetorical argument is, “Where is the Hong Kong needs only look to the low tax regime, the double tax business?” arrangement with the mainland and the ready financing. Key to that argument is Hong Kong and Guangzhou’s rapid Clearly, the aforementioned companies that have moved to movement up the value chain, both in terms of what is imported Singapore were tempted by the generous tax incentives offered – to the mainland through Hong Kong and what is produced in the a particular allure during these difficult times. On the other hand, Pearl River Delta for export regionally and globally. pollution in Hong Kong is increasingly mooted as a deterrent to White goods production and other low value manufacturing some considering a regional headquarters. But if a logistics provid- has been moving north since before the global financial crisis, and er is looking to be up to his knees in the business where it is really the downturn has accelerated the process. But under the main- going on there is still little alternative to Hong Kong. ]

30 asiamaritime November/December 2009 amhong kongamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Banking on a relationship Despite all the talk about innovative ways to finance fleet expansion a new survey of Hong Kong shipowners’ financing preferences reveals that the bank is nearly always the first port of call

I n a recent survey conducted among the Hong Kong shipping Why I like my bank community by Hong Kong Polytechnic University Researchers, With banks, one thing that has survived the financing catastrophe each company was asked to list its preferred source of financing for is the need for a relationship (although, as we shall see, the rela- fleet expansion. tionship between banker and shipowner has undergone adjustment Allowing for multiple choices, fully 73% opted for a bank loan. as far as bankers are concerned) and 93% of the companies claim Employing retained earnings was also a favourable option for 33% to have a good relationship with their banks. of the respondents and 27% of shipowners like to go down the Nearly half of the shipping companies were happy with the leasing path. terms and conditions imposed by their banks when it came to ves- In stark contrast only 13% of respondents would opt for a sel financing, especially those companies that are not listed and bond issuance to pay for the growth of their fleets, and only 7% using bank loans as a primary method of financing. would consider either private placement or public equity as fi- The figure falls steeply however, when it comes to a shipowner nance vehicles. relying on his bank during hard times. Only 27% agreed with the Of the 32 shipping companies approached by the survey team proposition that banks provide consistent support in periods of at Hong Kong Polytechnic University, 42% responded to the ques- downturn, especially among companies using bank loans as a pri- tions posed. In terms of fleet size, 73% of the companies own less mary method and those with active acquisitions. than 20 vessels, 13% have 31-40 ships and the remainder have Another 67% of shipowners liked their bank manager because more than 40 vessels. Given the predominance of small to medi- he would not disclose information about the loan. More impor- um-sized ships the image of a conservative shipowning community tantly bank lending is project based with a limited impact on the is not entirely vindicated by a survey of their ship buying activities group’s financial condition. over the past five years. Those companies with small or older fleets were particularly Some 13% of shipowners polled have fleets with an average wary of the negative effect of a bank loan during financial turmoil. age of below three years. On the other hand 20% of the fleets sur- veyed had an average age of 16 to years. Equity But Hong Kong owners have not been immune to the lem- Compared to the enthusiasm for bank loans Hong Kong shipown- ming rush to newbuildings over the last five years. Some 40% of ers are far cooler in their response to using equity to finance fleet shipowners approached by the University said they had purchased expansion. Fully 87% of the respondents said that listing require- more than 10 ships over the past five years; 20% have picked up ments were unacceptably demanding and 80% considered the between five and 10 vessels over the same period and only 40% procedures involved in a public offering were complicated. have for the most part eschewed the temptation. Nearly all the shipping companies surveyed (93%) feared the A final piece of important background information about these susceptibility of listed companies to stock market conditions, and Hong Kong shipowners before proceeding to their thoughts on only 13% thought that investors found shipping stocks attractive. bankers: 27% of are publicly listed, 27% are private companies And if you thought that Hong Kong was going to join what with an intention to eventually go public and 46% are privately- was a growing global fleet publicly listed and fully accountable to owned with no intention of listing. shareholders – you can think again.

Those companies with small or older fleets were particularly wary of the negative effect of a bank loan during financial turmoil

November/December 2009 asiamaritime 31 amhong kongamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

The Hong Kong banks surveyed seem, perhaps for obvious reasons, too take a more pragmatic approach to the “relationship”

The majority (60%) of Hong Kong shipowners agree that dis- than 80% of the ship’s value and 58% would hand over between closure of sensitive information in equity negatively affects the 70% and 80% of the shipbuilder’s price. company, especially those with older fleets. Post-financial meltdown and the amounts on offer drop signifi- And the clincher is the 40% who agree that equity dilutes com- cantly. Some 64% of Hong Kong banks with a shipping portfolio pany control and managerial efficiency, especially among those are only prepared to offer 50%-60% of the value of the ship with companies that are not listed and those with smaller fleets of older 36% offering above 60% of the vessel’s price. vessels. And under the new regime the banks will want their invest- In summary, in the present climate bank loans are still the ment back a lot quicker. Before the financial downturn a shipown- cheapest way to go – and it’s simple and secret and not considered er could look forward to 10 to 15 years to pay back the loan on a too rigid in terms and conditions. newbuilding and 5-10 years for a secondhand vessel. Under the new regime none of the banking respondents to the survey were Bonds prepared to offer a loan with a tenor of more than 10 years. Bonds feel more like chains to Hong Kong shipowners, it seems. Of those polled 45% have a maximum tenor of 8-10 years Nearly all of them (93%) are concerned that bond holders have a while another 45% will only offer a loan term of between five and low tolerance for default, and 60% across all the groups felt that seven years. the preference for bonds issuance is affected negatively by finan- Seems the banks have fewer friends among themselves too cial turmoil. with those no longer involved in syndicated loans rising to 64% Leading sales and purchase broker and managing director at from 42%. Clarkson Asia Martin Rowe says of Hong Kong shipowners: “Hong Perhaps the only thing that has not changed is bonuses. ] Kong owners are lucky - they have a rich uncle in the form of mainland Chinese banks who seem willing to lend to them even if Bank’s market share criteria: the traditional European ship financiers are short of pocket.” 1. Mezzanine finance 2. Refinance loans Hong Kong Banks’ changing attitudes 3. Syndicated loans The Hong Kong banks surveyed seem, perhaps for obvious reasons, 4. Competition influence on pricing too take a more pragmatic approach to the “relationship”. 5. Loan portfolio allocated to shipping No matter how long or warm the relationship, Hong Kong banks have lowered significantly the loan amount to vessel price Bank’s criteria for quality: they are prepared to offer. According to the survey, prior to the 1. Profitability record financial crisis 33% of the banks polled were happy to offer more 2. Accident record 3. Vessel type 4. Age of vessel Bank’s Security criteria: 5. Flag of vessel 1. Financing extent 6. Cash flow projection 2. Leverage ratio of borrowing company 7. Pricing 3. Market conditions 4. Charter parties secured Three considerations are primary when approached by a ship- 5. First preferred mortgage as security owner looking for a loan, security, market and quality. 6. Assignment of insurance as security There are seven criteria used by Hong Kong banks when 7.Personal or corporate guarantees as security considering the security of the loan. (see tables)

32 asiamaritime November/December 2009 amseascapesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam A new model for hub port development: Asian port doctrine Matthew Flynn explains why Asia been so successful in developing container hub ports

Professor Paul TW Lee of Kainan University is one of the peo- Doctrine in most cases while Hong Kong follows the Anglo-Saxon ple from whom I have learned a lot. His thinking is the focus of this Doctrine. Busan, Gwangyang, Tanjung Pelepas, Waigaoqiao and column, which I delivered as co-author at the 5th Thai Ports & Ship- Yangshan all depend on the central government for maritime ac- ping conference in Bangkok in October. cess infrastructure including channel, breakwater and navigation Analysts have traditionally described two port development aids and land access infrastructure including road links, railway doctrines: The Anglo-Saxon Doctrine and The European Doctrine links and inland connectivity, if any. (as first classified by Bennathan and Walters in 1979.) This state focused thinking may anger free market advocates The Anglo-Saxon Doctrine considers that the port should be but looking at the genesis of the world’s ports, they are all the self-sufficient and should make a profit. Port development is based product of government policy in one way or another. on commercial cost accounting. The end of the last century witnessed in- The European (Continental) Doctrine views creasing globalization and governments were the port as part of social infrastructure and as- more likely to let market forces dominate. How- sesses its value in terms of its contribution to ever, the theory now is that market failure can- regional development, not necessarily primarily not be cured without the role of government. In in terms of profitability. Port development is the early 21st century, many governments, even usually supported by governments while port in developed economies, are reconsidering pricing is relatively lower than that under the government’s role versus the market’s role in Anglo-Saxon Doctrine. stimulating economic growth. Greater empha- With the changes of the world trade struc- sis has been placed upon the regulatory role of ture, Asia became the workshop of the world the state. since the 1970s, which accelerated the devel- Matthew Flynn Owing to the economic downturn of the opment of the multimodal transportation system of container ship- global economy since 2008, even developed countries, which ping as one indispensible and efficient link of the loop to ensure adopted only market mechanism practices, announced plans for safe, secure and cheap cargo movements. nationalization in some sectors. Security issues arising from the The role of the professional Asian bureaucrat economic planner 911 terrorist attacks, and green port and transportation related to was central to rapid industrialisation and export-led growth. Port global warming issues all suggest a stronger role for government development is but one element of an integrated national planning because the private sector cannot tackle these problems alone. with a central role of government, pillar state enterprises and pub- Less developed countries consider a port as national economic lic funding. security and fundamental infrastructure of its national economy In the past three decades, the number of container hub ports rather than commercial entities required to recover their full costs in Asia has doubled. The logic and rationale of the Asian Port from users. The Port is a key platform for connecting an export- Doctrine is quite different from the core application of port policy driven economy to world markets and thus an extension of broader in the Anglo-Saxon and the European doctrines. In Asia, a port is economic policy. The Asian Port Doctrine enables gateway/hub to a kind of social overhead infrastructure and a life line for the na- enjoy the economies of scale, scope, frequency and connection. tional economy of a developing country, which drives the country The Asian Doctrine is not valid forever, but until a port can to invest public funds for port construction and to include port stand alone as a competitor in the world environment. The di- construction into national economic development plans. lemma is to pick when and how to transform the port and push it The central government and local government play the roles forward to participation of private capital from domestic compa- of planner, investor, designer, builder, manager and policy maker nies and global terminal operators at a market economy stage to in Asian port development. Special economic zones for distribu- maximize its economic efficiency. tion or manufacturing generally established near such ports. Korea, Matthew Flynn is managing director of Flynn Consulting Ltd. Singapore, Taiwan, Malyasia and mainland China follow the Asian Hong Kong. ]

November/December 2009 asiamaritime 33 amimoamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

IMO headquarters. Decisions, decisions...

IMO’s greatest 21st century challenge Few can predict the degree of progress likely to be made at the much-hyped COP 15 summit on climate change starting December 7 in Copenhagen, says Sandra Speares

A crucial point for the maritime industry at the upcoming talks Option three is a proposal by Australia which maintains that will be whether the International Maritime Organization remains the IMO cannot deal with the problem in a timely manner and the in the driving seat in formulating and implementing strategies to UNFCCC should establish a new stand-alone protocol for shipping reduce emissions. and a parallel protocol for aviation. Both the European Union and the US, who held discussions in The final option is essentially a repeat of the text in the Kyoto New York earlier in November, made it clear that a fully-fledged agreement, which reflects the concept of “common but differenti- Kyoto-style treaty was not going to be signed in Copenhagen and ated responsibilities”. the best that could be hoped for was some form of framework The common but differentiated responsibilities concept has agreement. been a stumbling block for many years because it does not respect the IMO principle of “no more favourable treatment”. Four choices The principle of common but differentiated responsibilities As far as shipping is concerned, there is already a negotiation text recognises historical differences between the contributions of de- that outlines four options for the industry. veloped and developing nations to environmental problems. The first is for the United National Framework Convention on Climate Change to set target requirements for reductions in emis- IMO must decide sions and then hand the problem of implementing those require- Peter Hinchliffe, marine director at the International Chamber of ments over to the IMO. Shipping, is adamant that “IMO has to be the organisation that The second is for the UNFCCC to pass the problem to IMO, delivers the mechanism, because we don’t think that anybody who would set the targets which would be at least as ambitious as else can do that.” He does not believe the UNFCCC understands those set out elsewhere in the Cop 15 outcome and IMO would enough about the shipping industry and its impact on world trade decide how to implement them. to be able to develop its own solution.

34 asiamaritime November/December 2009 amimoamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

We are confident that IMO has a good enough message to give at COP 15 to indicate to the UNFCCC member states that it can deal with shipping”

The International Chamber of Shipping wants the IMO to be in the with the option selected driving seat as far as shipping is concerned with outcomes at least as while at the same time pay- robust as those outlined in the new convention. ing a bunker levy applied The Australian proposal, he believes is “completely unaccept- by UNFCCC. able”. He says that to think that UNFCCC could deliver a mecha- Marine director at the International Chamber of Shipping Peter Hinchliffe: "To nism that could be brought into force more quickly than IMO Shipping divided repeat Kyoto is merely to sustain the prob- could is “surely to misunderstand the process.” There have also been differ- lems there have been over CBDR,” The Kyoto option is more complex as a lot of the text, as with ences of opinion on which the other options, remains to be finalised. “To repeat Kyoto is of the market based instruments that have been proposed will de- merely to sustain the problems there have been over CBDR,” he liver the best chance of reducing emissions, These include regional says. “Also, it is giving the message that shipping is not going to do or global emissions trading schemes, open cap and trade systems, anything.” mandatory compensation funds or voluntary levies. One of the four options will go forward to be adopted as part A Danish proposal for a Greenhouse Gas Compensation Fund has of the new convention or be part of a revised Kyoto text, as there received strong support from many country delegations at IMO and, are two parallel processes. There is no room to bring in a new text among other organisations, the Hong Kong Shipowners Association. or new ideas. Meanwhile national shipping associations in Australia, Bel- gium, Norway, Sweden and the UK are backing a global cap and New road, the best road trade emissions system. Mr Hinchliffe believes the road map developed at the last Ma- There is also a proposal by the US to build on the design index rine Environment Protection Committee meeting earlier this year, concept and retrospectively apply it to existing ships with a Japa- taken in conjunction with the Energy Efficiency Design Index, nese proposal along similar lines. the Energy Efficiency Operational Indicators and the Ship Energy ICS has been working on the issue for the past two years and Efficiency Management Plan “is an adequate approach by IMO has produced a paper comparing the different market instruments, which will deliver CO2 reduction from shipping over the next prepared for it by Giraffe Innovation. few years”. However, it seems unlikely that a single system will be able to “We are confident that IMO has a good enough message to address the different concerns that different sectors of the industry give at COP 15 to indicate to the UNFCCC member states that it might have. can deal with shipping”. Nevertheless, Mr Hinchliffe says that if you look at the propos- There have been differences of opinion on the relevance and als in detail there is a high level of commonality between them. accuracy of the EEDI, with Stefan Kruger, head of ship design and The ICS has analysed these areas of commonality and is looking to safety at Harburg University suggesting that the mathematical ap- build on them with a view to providing an enhanced presentation proach taken was flawed. at MEPC 60. An issue remaining to be addressed is that while the EEDI can While no-one is in a position to second guess the outcome of be applied to new ships with a standard propulsion train, the index COP 15, a pathway which addresses the political imperative to do does not work in cases where non-conventional forms of propul- something and provides a mechanism which can be accepted by sion, like diesel-electric, are used. The IMO is still developing vari- every part of the industry needs to be found. ants of the design index to meet specialist requirements. Mr Hinchliffe is not in favour of signing up to one particular There are differences of opinion as to whether the mention of market based instrument too soon. “We are not at the end of the a levy on bunker fuel in the negotiation text might lead to a “double road yet and we think other systems can be teased out”. ] whammy” for shipping by which it would be required to comply [email protected]

November/December 2009 asiamaritime 35 amradaramamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Managing the new paradigm NEPA Projects and Investments is launching a shipmanagement package that addresses the industry’s current predicament

Over the last two years Hong Kong-based NEPA Projects and Investments has taken on a series different management projects for the marine industry. Among these projects has been the project management of tankers and bulk carriers; the commercial manage- ment of a LPG carrier, containership and a bulk carrier. The com- pany has also been called upon to manage a brace of chartering outfits, a recruiting company and a spare parts trading house. Since 2007, NPI had been pondering how it could get the very best returns on its wide range of skill sets. It was apparent that the current highly fragmented maritime model, dominated by large companies in different sectors such as shipmanagement, sale and purchase or chartering, could be made more efficient if they were brought under one roof.

Clinching a niche Captain Pappu Sastry opens shop. The clincher for NPI was the move into shipping by commercial elements with little knowledge of the business: enthusiastically in the case of private equity; less so in the case of banks left with dis- to joining NPI Mr Shesh was the Hong Kong technical director of tressed floating assets. another shipmanager. “During my time in the maritime industry it has become ap- Business manager Harvinder Pal Singh spent 17 years at sea parent that there is a growing demand from the industry for a com- before joining PDI where he operates from India, travelling regu- pany that can provide a wide range of services and can also be larly to ships that are under project/asset management. innovative and flexible,” says Captain Pappu Sastry. As a result NPI is now offering shipowners an integrated “one- Assisting the uninitiated stop-shop”solution including managing their investments, owner- Firmly on the radar of PNI are the many banks that have been left ship representation, commercial management, arranging technical with distressed assets as shipping companies have been liquidated. management, dry docking supervision, newbuilding and conver- “These vessels are often laid up while the banks are charged pre- sion supervision, vessel sale and purchase as well as arranging ship mium fees by shipmanagement companies, says Capt Sastry. finance. “This is an opportunity; we can find the cargo for these vessels, organise the chartering and manage the vessel, providing banks Hands-on operation with a return on their assets, he adds. Capt Sastry insists that the new operation will not simply be a go- Capt Sastry says that NPI can also be of service to the many between passing on assignments to companies unknown by the private equity companies that have taken a stake in the shipping client. “NPI will be fully involved in all the ventures it takes up and sector, or who may be tempted to have a flutter on floating assets will be handling all aspects that clients wish us to undertake,” he at good prices. “We can provide the advice they need,” he says. says. The origins of NEPA Projects and Investments go back to 1988 As such, NPI has brought a wealth of experience to the venture with the formation of the Dutch dry bulk chartering operator NEPA. in its key personnel for project management. Following 14 years at The group extended operations in 1995 with an independent office sea Capt Sastry was involved in business development of a major in Hong Kong. NPI continues to work for the dry bulk operation of shipmanagement company in Hong Kong. NEPA Shipping as and when required. ] Business director Sanjay Shesh joined NPI in project related business development after 14 years at sea and 10 years heading (am radar is the first in a series of articles looking at new busi- up the Indian operation of a large shipmanagement company. Prior nesses and established figures in the Asian maritime sector).

36 asiamaritime November/December 2009 amship's storeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam STX builds getaway for the rich and famous

STX Europe, part of the South Korean These include 28 multilevel urban-style Shipbuilding group, has delivered the loft suites with floor-to-ceiling windows, 225,282 gt Oasis of the Seas, the largest an aquatic amphitheater, an onboard park and most revolutionary cruise ship in the with 12,175 plants, 62 vine plants and 56 world, to US operator Royal Caribbean trees, a surf simulator, ice-skating rinks, Cruises. cantilevered whirlpools and rock climbing and three 16-cylinder models that together Sister vessel, Allure of the Seas, is cur- walls. generate more than 96MW. Both vessels rently under construction at the STX Europe Home ported in Fort Lauderdale in are equipped with four 5.5 MW Wärtsilä shipyard in Turku, Finland, and is due for Florida, the Oasis of the Seas, which also bow thrusters, which are among the largest delivery at the end of 2010. features 16 decks and 2,700 staterooms, in the world and have more power than is Both 360m long ships, which can carry will operate cruises within the Caribbean installed on a normal cargo ship. up to 5,400 passengers, feature a raft of in- area. Wärtsilä cruise business director Fred novations that are mainly focused towards Each ship is powered by six Wärtsilä Danska says the Oasis of the Seas represents taking care of its high-value passengers. 46 engines comprising three 12-cylinder “a quantum leap in terms of development.” ]

Making the Simplifying the greenest even rules Classification societies, ABS and Lloyd’s Register, have greener teamed up to launch common software for the assessment of Imtech marine, the Dutch maritime engineering group, has scantlings of bulk carriers and oil tankers designed to comply with been commissioned to supply the entire environmentally friendly the International Association of Classification Societies’ common technical infrastructure for Rainbow Warrior III, the flagship vessel structural rules. for Greenpeace International. Testing of the new software is being carried out and when The firm’s chief executive René van der Bruggen says: ”The as- completed next year the software will be made available to other signment involving the vessel Rainbow Warrior III, as well as other IACS members under a simple licensing agreement. green maritime initiatives, means that Imtech is also able to operate The new common software is based upon the ABS approach as a front runner in the sector.” used for the finite element assessment and Lloyd’s Register ap- Imtech Marine Group will handle engineering work associated proach for the initial scantling evaluation. with the development of the 58m long Rainbow Warrior III togeth- ABS chairman and chief executive Robert Somerville says: er with other environmentally friendly aspects of the ship including “Although shipyards, designers and shipowners have welcomed an energy-efficient electrical propulsion system. This will augment the adoption of the IACS common structural rules, they have made the vessel’s sails that will provide most of the power. repeated requests for a similar approach to be taken with the soft- Residual heat from the electric propulsion system will be used ware needed for the application of the rules.” to heat the onboard water system, while the integration of all elec- Pointing to the work done by the societies, Lloyd’s Register trical and electronic systems will give extra energy savings. Imtech chief executive Richard Sadler added: “We have moved from 10 will also supply and install state-of-the-art navigation and commu- sets of rules for tankers and another 10 sets for bulk carriers to a nications technology. single standard for each ship type. Yet the classification societies Aside from Rainbow Warrior III, the Imtech Group is also work- have developed multiple software programmes for each of the new ing on the engineering and implementation of the electric propul- rules. It is inevitable that such an approach will return different sion system onboard the futuristic solar cell vessel Solar Planet, results and our experience to date has shown this to be the case. which will make its first solar powered voyage next year. ] That dilutes the intent of the rules and introduces an unnecessary element of confusion for the designers and shipyards.” ]

November/December 2009 asiamaritime 37 amoperationsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Being green by being good Michael Grey insists there is no need to wait for regulators to force through fuel-saving initiatives

reduction of an environmental footprint ought by now to be obvi- ous, and intelligent voyage planning recognised as an important tool in fulfilling this aim. More intelligent speed optimisation of sea passages is just one example of a portfolio of fuel saving strategies which, when aggregated, can make substantial savings and incidentally make shipping greener, at a time when the spotlight is on ship emissions, and bunker prices likely to only increase. Another is to operate a ship at its optimum trim, which is something often not thought about, but which can produce useful fuel savings, if the master can be provided with the necessary information. Weather routeing is often undertaken to minimise the risk of heavy weather damage and speed a passage, but can be undertaken with fuel saving very much in mind, and its attendant environmental benefits. There is a pleasing renaissance in the assistance given to ships by favourable ocean currents, with the best weather routers using these assidu- ously on their deep-sea passages. It is not always possible, but if a route can avoid a head wind, power (and fuel) can be saved. Fuel-saving incentives grow exponentially with bunker prices, but the auxiliary benefits of environmental gain flow automati- cally from such policies. If a single shipping company can identify, within a few short months, nearly 200 fuel-saving policies, and moreover implement some 20% of them within a relatively short time scale, all responsible shipping companies should be doing the same. There is no point in waiting for regulators to impose “targets” on emissions of greenhouse gases and handing the initiative to the Take a glance at Bimco’s lists of port conditions, and the queues environmentalists, when practical ship operators, seamen and en- of vessels waiting in the roadsteads outside so many ports. It is a gineers can produce results which benefit both the shipping com- sign of inefficiencies, of ports and terminals being unable to meet pany and the environment. the demand for their services and the difficulties and costs of mak- It is, of course, important that the shipping company involves ing positive changes to port infrastructure. the crew in all of this. Many ideas for fuel saving will be generated But there are other considerations. How many of those ships by them, and the vast majority of them will depend upon their co- waiting in the queues outside the giant iron ore terminals and coal operation. So there is also a compulsion to train people to “think” export plants for their number to come up steamed at full speed environmentally, in technical and operational terms. to arrive at the anchorage as early as possible. Only then, with the Without a doubt the next generation of ships and engines will anchor down, to signify that the vessel had “arrived”, would the see a step change in their environmental “footprint”. But the innova- agent then reveal to the master that there were 24 vessels ahead of tive among us will be improving the ships and machinery that we his for the berth, and a fortnight’s wait was on the cards. have already, saving fuel, where it can be saved, through these opera- It is, of course, a less than efficient way of operating ships, a tional efficiencies, along with good housekeeping practices, such as huge waste of fuel, and in terms of the emissions from that ship ensuring that the engine and auxiliaries are properly tuned operating as it steamed across the ocean, as instructed, at its “best speed”, optimally, hull fouling is kept to a minimum by ensuring the coatings rather bad for the environment, too. Today in an era of brilliant are in reasonable condition, propellers are polished regularly, and ship/shore communications, such wasteful practices can only be autopilots properly adjusted. There is a green dividend to be earned deplored, as ship operators look to devise fuel saving and more from efficiency!] “sustainable” operations. The link between efficiency and the [email protected]

38 asiamaritime November/December 2009 amgreen pageamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Green duo set environmental benchmark The race is on for the most-environmentally conscious shipping, and Asia is leading the way rudder, maximises propulsion efficiency and optimises the ves- sel’s hydrodynamics to cut fuel consumption and greenhouse gas emissions by 2%-4%. The ship’s electronically controlled engine reduces oil consumption by 25% and fuel consumption by 3%. The ves-

CMA CGM Christopher Columbus GDF Suez Neptune sel can also be operated at slow steaming speeds of about 14-15 The debate within the international maritime community over knots and is equipped with a fast oil recovery system. The 365m the best way to tackle green house gas emissions is likely to become long ship was delivered in early November. even more intense during and after the Copenhagen climate change The GDF Suez Neptune, aside from being the most expensive conference between December 7-18. liquefied natural gas tanker afloat with a Won539bn ($465m) price Slow steaming, sulphur emission control areas, low-sulphur die- tag when ordered in 2006, also has environment friendly features. sel and lubes and exhaust scrubbing have all been aired as possible The ship, a liquefied natural gas shuttle regasification vessel, options for cutting sulphur and carbon dioxide emissions. will be delivered early next year and serve a LNG import terminal off the coast of Boston in the United States. Japan is greening Equally, Japanese lines, Mitsui OSK Lines and Nippon Yusen Kaisha, State-of-the-art technology have also put forward their concept designs for vessels that would Samsung Heavy Industries says these green innovations include four help reduce the shipping sector’s environmental footprint. diesel electric engines, the first time such a system had been incor- For MOL, the focus has been using existing technologies high- porated in a regasification ship, that means the propulsion system is lighted in its ISHIN-I pure car carrier design which it estimated 30% more efficient than conventional steam turbines. could generate 41% in carbon dioxide emissions savings, while Other green features mean there is no use of seawater during NYK designed its futuristic 2030 concept ship. regasification operations and the ship has one of the lowest levels of nitrogen oxide emissions. And so is South Korea In the same way, the propeller design is optimised to mini- But other shipowners and shipbuilders are aware more can and mise underwater noise emissions, non-toxic anti-fouling paint is should be done to reduce emissions. And in the past month also used while there are systems to prevent the discharge of oily two South Korean shipyards, Daewoo Shipbuilding and Marine contaminated rainwater. Engineering and Samsung Heavy Industries, have delivered or Several of these features were included to meet the tough envi- built two of the most environmentally friendly merchant vessels ronmental controls imposed by US regulators before they gave ap- afloat. proval for the LNG terminal in Boston. The 13,300 teu CMA CGM Christopher Columbus and 145,000 The ship has been built for Norway’s Höegh LNG and its part- cu m GDF Suez Neptune, have green features that build upon tech- ners GdF-Suez and Mitsui OSK Lines. nologies that have been incorporated in other vessels. Both ships have been classed by Det Norske Veritas and regis- The flagship of the French liner company’s fleet, CMA CGM tered under the Norwegian International flag. Christopher Columbus is the first vessel in the fleet equipped with a The South Korean shipbuilder said the approval of the Boston pre-swirl stator which directs the flow of water in the opposite direc- LNG terminal and the use of ships such as the GDF Suez Neptune tion to the rotation of the propeller so that energy which is normally “has enabled Samsung Heavy Industries to strengthen its environ- lost is recovered. This device, together with the twisted leading-edge mentally-friendly design technologies and competitiveness”.]

November/December 2009 asiamaritime 39 amlogisticsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Really useful OOCL OOCL gets some of the most glamourous logistics assignments carting around Lloyd Weber’s creations but the bulk of the company’s work is also really useful

The fall of Saigon, mouse hunters, a shadowy masked figure Asked about the firm’s China strategy, Mr Wong says: “OOCL and a South American social reformer appear to be a long way Logistics has been reviewing and reallocating resources for infra- from 8,000 teu leviathans plying the world’s oceans from Europe to structure and capabilities in China – warehouse, trucking, depot, Asia, Australia and North America. customs house broking that can enhance our logistics service com- But OOCL Logistics has and continues to play a key role in en- petitiveness.” suring Miss Saigon, Cats, Phantom of the Opera and Evita continue He adds: “We plan to expand both our international services to delight global audiences wherever Britain’s Really Useful Group for China and our domestic supply chain management service tours around the world. even more as the economies move out of recession and move back Currently there are 25 shows playing around the globe includ- to a normal pattern of growth.” ing tours by Cats in China, Australia, the US and Italy and the Phantom of the Opera and Jesus Christ Superstar in the US. Late trains OOCL Logistics has exclusive agreements with the Really Use- One area that has remained elusive is the use of China’s extensive ful Group and Australia’s Lunchbox Theatrical Productions to pro- rail network to facilitate logistics operations and the supply chain. vide logistics services wherever shows are touring. While China is aiming to spend around Yuan2,000bn ($282bn) on developing the country’s rail network by 2020, Mr Wong says the Not all greasepaint and applause focus will be on building new passenger routes, including high- The firm’s chief executive officer Allan Wong says the company’s speed rail lines, and dedicated coal lines. involvement with RUG and Lunchbox Productions is a relatively As a result, China’s rail network is not a major component of small part of the firm’s overall business. But Orient Overseas Con- the country’s supply chain infrastructure, yet, although Mr Wong tainer Line public relations and promotion senior manager Lynne thinks this would change over time. Mulholland points out people tend to spend more on shows and While Mr Wong says OOCL Logistics has “no plans to be the entertainment during recessions to help buoy their spirits. biggest” logistics operator and would grow organically rather than Overall, Mr Wong says: “OOCL Logistics has performed quite through mergers and acquisitions, he adds the company does want well during the downturn. However, our logistics business has to be best. been affected by the world economic downturn and business from It was this focus on being the best that has led the company to individual customers has declined since the last quarter of 2008.” develop and launch a raft of online services based upon its Podium But given China’s massive growth in gross domestic product suite of systems. this year of around 8% together with on-going improvements and Mr Wong says the company spent around six years building the expansion of China’s logistics industry, Mr Wong adds: “On the infrastructure for the Podium systems although the three services other hand, logistics volume in China continues to grow rapidly.” launched in November took about a year to develop from concept to production. They cover the online distribution of purchase orders and pay- ment audits and customer updates via mobile telephone of recent orders and shipments. Mr Wong says purchase order distribution allows customers to send details of orders to suppliers, trading agents, manufacturers and logistics providers. For the garment industry particularly, where designs, styles and order size are subject to change, managing the purchase order sys- tem is difficult. “Small and medium sized customers have trouble keeping track of purchase orders,” he said. Mr Wong says the development team within OOCL Logistics are currently researching new product lines and services which

A seat in the box at the opera. could be rolled out in 2010. ]

40 asiamaritime November/December 2009 amsea shantiesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Brief encounters Our intrepid reporter is in hot pursuit of the great and the good

For once I know how I got into this fine predicament. I was in a bar in Shanghai with the agency’s features editor, a slow talking but fast operator from Hong Kong called Benny Chu. We were doing the usual thing, identify- ing the suboptimal aspects of working for an aspiring news agency for Asian readers backed by Asian money. I had everything that was needed for the job, a past, a knowledge of trade and shipping and, by reason of certain personal and professional setbacks, a willing- ness to go on the road with the smallest ex- pense budget. We were in the pub when Chu, anxious to move opinion in the agency, came up with one of his concepts. “CC you fly everywhere. You always meet big shots and captains. Let’s say you make a small interview, there and then, right in the airport. We’ll call it Brief over at the shipping company. “Very interesting times in shipping” Encounters, like that Bill Murray thing. It’ll be great. The agency’s he opines. clients will love it. It has everything. Asia on the move. Lives of the Known in the region as Lao Da (the big guy), BQ Wang has elite.” impeccable political connections which go back to a very differ- I remonstrated. My filmographic knowledge allowed me ent era. His English is good - he picked up the language listening to point out that the original Brief Encounter was a black and to radio during the troubled time when he was induced to try his white dirge featuring two uptight World War II vintage Brits skills as a farming labourer. He could have been a promising stu- who spent the movie agonising whether or not they should give dent, but the universities were all closed back then. But he met a each other a kiss, let alone venture a tryst in an upscale Tokyo lot of temporary farming labourers who came out on the right po- hotel. Next day the Chief Editor lapped it up. He was highly un- litical side of the fence come the great opening. And his ability to moved at the thought that most titans in this region dislike the glean things without the aid of others propelled him up the greasy press, dislike being door-stepped or sharing information worth pole of shipping in the years after he began on the numbers side of more than one renminbi. the industry. He said “CC Kai is just the man for the job” and my roving fate Back then, the principles of accounting were fairly odd - a was sealed. good imagination was an asset. Many long hours were spent fill- So there I am in Xiaman Airport, waiting for the delayed flight ing ledgers with hard to understand figures that always came in to Beijing when who should be sitting at the next table nursing a on plan. “What are you doing with all the empty containers these pot of tea and an Asian Wall Street Journal but the grandest man in days”, I ask. local shipping, the accountant made good, Wang Bai Qing. He’s “Farming Story. Spend too much money on lousy land owned dressed in golf club casual, blue polo shirt, blue chinos, a blazer, by farmers. Containers resting.” So it went on. some handsome Italian loafers and a gold watch the size of a small Wang highly fancies a flight to somewhere equipped with a flat saucer. bed. “Good way to fly—delicious food and very refreshing arrival We have been exchanging long-suffering glances of the travel- at destination”. Not much you might think for a man of real sub- lers’ type for some time. I can cope with the announcements and stance to want, but the irony is this captain of industry has never the ambience, but my lousy American-Cantonese accent marks me left his native soil, not even for the attractions of the HK SAR. But out whenever I try and speak Mandarin. So we slip into English in we will meet again one of these days I am sure at some distant de- the usual fashion. It’s pretty hard going. I ask how things are going parture lounge at a place served by Lao Da’s ships. ]

November/December 2009 asiamaritime 41 amdiaryamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Busan blue Busan Port Authority has met with varying degrees of suc- cess with its various initiatives to boost container volumes at the South Korean port. But even the old salts at Asia Maritime were a little astounded at the possibilities created by a recent visit to South Korea’s leading gateway by French film director, Jean-Jaques Beineix. His visit was lauded by the people within the port authority’s marketing operation with the comment that Mr Beineix was “well known for the film ‘Betty Blue’”. Indeed he is, but we wonder if anybody within the authority has ever seen it. We ask because while the 1986 film is described as an “uninhibited and tumultuous story of an obsessive relation- ship that descends into madness” it is chiefly remembered for its full-frontal nudity and explicit sex. In fact the film treads a fine line between art and pornography. Mr Beineix was visiting the city in his capacity as chairman of the screening committee for the Pusan International Film Festival. But he obviously could not get enough of the city after making not one but two trips round the port. On the first visit he accompa- Busan to get the “Ooh la la!” factor nied other film festival organising committee members around North Port, while a day later he took a tour around New Port by himself. Asked about his interest in the port, Mr Beineix said that he commitment to seafarer training in mid-November when it extend- is planning to direct a documentary film about a port like Busan, ed its scholarship programme with Shanghai Maritime University which provides various dynamic angles on life. for a further five years. Given his involvement with Betty Blue we can hardly wait, es- The move was confirmed by Norden chief executive and presi- pecially as part of the plot of Betty Blue involved the main charac- dent Carsten Mortensen after the company awarded five scholar- ters having to paint 500 beachfront chalets. Perhaps in Busan’s case ships to outstanding students at the university together with two the film will include scenes showing the painting of 500 containers prizes to university professors. The five were presented with their in amongst rather more intimate activity. Whatever the eventual awards by Singapore’s finance and transport minister Lim Hwee scenario it should certainly gain Busan port more public attention. Hua. Mr Mortensen said: “The relationship between Norden and Norden’s scholarship programme Shanghai Maritime University has developed over the past five In Shanghai, Danish shipping group Norden showed its years.” ] Dedicated to the ones we love

Chang Yun Chung, the Singapore-based shipping magnate express their gratitude for the love and care given to them by who founded Pacific International Lines and Singamas Container their parents. “The hall is also dedicated to telling our offspring Holdings – the world’s second largest container maker, has scattered around the world that our roots are in Kinmen,” he helped inaugurate a memorial hall on the Taiwanese island of added. Kinmen. Nearly 400 people attended the ceremony which also saw Ninety-year-old Mr Chang, with younger brother Chang Yun the Chang brothers donate a further NT$10m to establish an edu- Fu, 83, and older sibling Chang Yun Chung who died in October, cational foundation to ensure Kinmen youngsters have a better donated a total of NT$10m ($310,000) to help establish the me- education. morial hall to their parents. Kinmen is located in the Taiwan strait, 150km west of Taiwan Mr Chang said the hall was built to allow the brothers to but only 2km from the Chinese mainland near Xiamen. ]

42 asiamaritime November/December 2009 amdiaryamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

the grand ballroom of the Shangri-la hotel was packed with people Wei down for the opening pre-conference reception, slightly under 800 at- Taalking bout China, a large contingent from Asia’s maritime tended the actual conference. This was down a smidgen from those community hot- footed it to chilly Qingdao for the annual World that attended last year’s event in Dalian. Shipping (China) gabfest on November 12-13. So where to next year for the seventh annual World Shipping While China Ocean Shipping (Group) president Captain Wei (China) in 2010? This was announced with much fanfare and stri- Jiafu was his usual irrepressible self the general mood of the con- dent congratulatory pronouncements to the musical accompani- ference was more muted as talk inevitably turned to overcapacity ment of the Superman theme, by Capt Wei himself who passed both among shipbuilders and in the shipping markets. the glittering Shipping Summit cup between port officials from The downturn was also reflected in attendance levels, so while Qingdao and Guangzhou. ] Dates The 2nd BreakBulk Asia 2010 26-27 January 2010 Suntec City, Singapore Neptune indeed Contact: [email protected] Ron Widdows added a new title to his existing positions as president and chief executive of Singapore-based container Pacific 2010International Maritime Conference shipping and logistics group, Neptune Orient Lines, in No- 26-28 January 2010 vember when he was named an “Admiral of the Ocean Seas”. Sydney Convention & Exhibition Centre The title was bestowed at a gala ceremony in New York City Contact: www.pacific2010imc.com on behalf of the United Seamen’s Service by former US trans- portation secretary Norman Mineta. The 4th Intermodal Asia 2010 The 67-year old seamen’s service, similar to the Mission 28-29 January 2010 to Seafarers or Flying Angel, provides social, professional and The Hilton, Sydney Australia health services to merchant mariners around the world. Contact: www.transportevents.com The award was made to recognise Mr Widdows’ contribu- tion to the maritime sector over the past several decades and The 8th Annual Coal Markets 2010 described him as a leading voice on transport public policy 28-29 January 2010 issues. Sheraton Towers, Singapore In presenting the award, Mr Mineta commended Mr Wid- Contact: IBC dows’ work in alerting policy-makers to the pressing need to invest in infrastructure and the strain on intermodal capacity Shipping Marine & Ports World Expo 2010 due to increasing trade volumes. 3-6 March 2010 Speaking to 700 government and industry representatives Bombay Exhibition Centre, Mumbai, India at the award ceremony, Mr Widdows said: “These are difficult Contact: www.chemtech-online.com days for our great industry. The unprecedented collapse in global trade flows over the past year has placed tremendous China Maritime strain on the economics of container shipping, to a degree 16-18 March 2010 that is simply not sustainable.” Hong Kong Convention & Exhibition Centre Despite the impact of the Contact: www.bairdmaritime.com downturn, he also pointed out: “The vital need for im- Vietship 2010 proved infrastructure must be 17-19 March 2010 addressed before it is too late. National Convention Centre Otherwise, companies who Hanoi, Vietnam import and export will be Contact: www.vietship-exhibition.com less competitive in the face of poorly developed rails, roads Neptune himself and ports.” ]

November/December 2009 asiamaritime 43 ammaritime’s back pagesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Pirate turned protector

In the first of our historical features Nick Walker relates the story of a vicious pirate who was given a second chance

In 21st Century reportage, the words “Hong Kong” and “piracy” For a period of many years during the Qing Dynasty, Cheung usually find themselves deployed together in stories about illegally and his minions roamed the waters of the south China coast. copied DVDs or luxury products, or a combination of both. While, But he also elicited admiration, even from his sworn enemies, in recent years, piracy stories have increasingly referred to horrific because his men were famously well disciplined, and moreover events off the coast of Somalia rather than to dodgy manufacturing strictly held to a policy of not harming any women who came their plants churning out fake branded goods in the Pearl River Delta. way. But in the 19th Century, the biggest piracy story in these parts Perhaps mindful of his humble origins, Cheung also managed was the narrative of a genuine old-school pirate, straight from to cultivate a Robin Hood-style personality cult by redistributing central casting: Cheung Po Tsai. And so cinematic is his enduring much of his ill-gotten gains to the poor of Guangdong Province’s legacy that Hollywood coastal areas. had Hong Kong’s Lamma In 1810, after years Island native son Chow of skirmishing with the Yun-Fat play a charac- a r m i e s o f b o t h Q i n g ter loosely based on the Dynasty China and Por- swashbuckling rogue in tuguese forces based on the 2007 worldwide box- Macau, Cheung and his office smash, Pirates of forces were defeated in the Caribbean: At World’s a massive naval battle off End. the north coast of Hong The Cheung Po Tsai Kong’s Lantau Island. story began with his birth However, his vanquisher to a desperately poor fam- was a shrewd general, and ily in 1786, in the South loathe to waste proven China Coast fishing com- talent regardless of its munity of Jiangmen, 150 Cheung Chau a former pirate haven provenance. km west of Hong Kong. Cheung was commissioned to be a captain in the Qing impe- At some time in his mid teens Cheung was kidnapped by rial navy, and his brief – in a neat historical twist – was to help Cheng Yat, a pirate whose fleet had for years been the scourge of eradicate piracy from the Pearl River Delta. In this role he also en- the South China Sea. joyed considerable success, before retiring with a public servant’s In time – and possibly suffering from Stockholm syndrome pension. The man lived by the sword, but he didn’t die by the before it had a name – Cheung became a loyal and diligent subor- sword; he passed away peacefully in 1822. dinate to his kidnapper. And Cheng became Cheung’s tutor in the But during his tenure as one of the Middle Kingdom’s most in- bloodthirsty ways of the piracy business. A charismatic and ruthless famous outlaws, Cheung accrued a mountain of loot. Despite hav- apprentice, Cheung swiftly rose through the ranks. So impressed ing given a large portion away, rumours of his “lost treasures” first were Cheng and his wife Ching Shih, that they adopted him as a surfaced soon after his death, and linger to this day. favourite son. The most famous of these rumours is centred on Hong Kong’s But after Cheng perished at sea in a typhoon, Cheung took on Cheung Chau Island, home to a tourist attraction called Cheung a new role – the widow’s lover. It was said to have been a strategic Po Tsai Cave. Tiny and difficult to squirm into, nevertheless the site move aimed at taking control of the entire fleet. In any event, that attracts a steady stream of hopeful treasure hunters, often equipped was the outcome – making Cheung the most powerful pirate in the with state-of-the-art metal detectors. ] region. In his prime, Cheung commanded an army of over 20,000 [email protected] men and several hundred vessels of varying seaworthiness.

44 asiamaritime November/December 2009 210 x 297mm

[ A giant step in 1969 ]

40 years of containerisation

In 1969, OOCL took a giant step for global trade by embracing containerisation. That step marked the beginning of a long, exciting journey - but the best part is yet to come. Through crisis and opportunity, through time and space - past, present and future - we always “Take it Personally” for our customers.

North America (1) 888 388 OOCL (6625) • Asia (852) 2833 3888 • Europe (44) 207 786 6622 Save the Date! 2nd Annual

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CHARTING THE RECOVERY 26-27 January 2010 Suntec Singapore International Convention and Exhibition Centre, Singapore

Plan now to attend and exhibit at Breakbulk Asia - To register, contact JOC Conferences at the largest gathering in Asia for heavy-lift, project [email protected] or (760) 294-5563 cargo and breakbulk cargo transportation. During International Contacts To exhibit, contact Julie Wallner, Exhibit Sales the two-day conference, industry leaders will [email protected] or (209) 451-4870 discuss today’s most pressing transportation issues, To sponsor, contact Alli McEntyre, VP Marketing Services [email protected] or (225) 784-0177 while a packed exhibition floor will offer a premier Asia Contact networking opportunity for shippers and the world’s To exhibit and/or sponsor, contact leading specialized carriers, forwarders, ports, and Judy Ow Yeong Y.W., Sales/Sponsorship Manager - Asia terminals and service providers. Register today – [email protected] or 65-6395-5890 and join us in 2010 for the 2nd Annual For more information visit Breakbulk Asia Transportation www.joc.com/BBA Conference & Exhibition.

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