NEWS BULLETIN 27 Aug – 02 Sep 2018
International Association of Marine and Shipping Professionls NEWS BULLETIN 27 Aug – 02 Sep 2018
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About I.A.M.S.P
The International Association of Marine and Shipping Professionals (IAMSP) is the professional body for Marine and Shipping professionals world-wide, formed in 2015. The association is an independent, non-political organization aims to:
Contribute to the promotion and protection of maritime activities of the shipping industry, the study of their development opportunities and more generally everything concerning these activities.
Promote the development of occupations related to maritime and shipping; serve as a point of contact and effective term for the business relationship with the shipping industry (charter brokers, traders, shipping agents, Marine surveyors, ship inspectors, ship-managers, sailors, and stevedores etc.).
Ensuring the representation of its members to the institutions, national and international organizations as well as with governments, communities and professional groups while promoting the exchange of information, skills and the exchange of experience.
Develop the partnership relations sponsorship, collaboration between IAMSP and other associations, companies, national and international organizations involved in activities related to Maritimes and shipping.
Contribute to the update and improvement of professional knowledge of its members and raise their skill levels to international standards.
Progress towards a comprehensive and integrated view of all marine areas and the activities and resources related to the sea. INTERNATIONAL news
Terminal operators: Hutchinson launches regional operations centre in Pakistan
02/09/2018 Hutchison Ports Holdings (HPH) is establishing a regional operation centre (ROC) in Pakistan. The ROC will be based at the new Hutchison Ports Pakistan (HPP) facility in Karachi, which is equipped with advanced container handling systems and a sophisticated in-house terminal management operating system, called nGen.
The aim of the in-house ROC concept is to centralise stowage planning delivery for both of the HPH terminals in Pakistan, including HPP and the longer established Karachi International Container Terminal (KICT).
The ROC in Pakistan is scheduled to be fully operational by the end of the year. From this centre, the intention is that shipping operations across HPH’s Asian ports will be monitored and managed by a specialist team.
HPH says it has chosen to develop the ROC in Karachi due to the relatively low operating costs and the ready availability of a young, talented and educated workforce. The location also benefits from less restrictive regulations and a high-quality telecommunication service, as well as strong economic ties with China as part of the One Belt, One Road initiative.
The commissioning of the ROC in Karachi started in the second quarter of 2018 at HPP and will be followed by a similar process covering KICT in the third quarter. Andy Tsoi, Managing Director – Middle East & Africa, Hutchison Ports, says, “We are committed to the continued development of Pakistan and aim to provide local industries with a unique and well-equipped gateway to world markets.”
[Maritime Standard]
Terminal operators Egypt: DP World starts Sokhna port expansion
02/09/2018 China Harbour Engineering Company (CHEC) has started construction of a new terminal basin in Sokhna Port, on Egypt’s Red Sea coast south of the Suez Canal, as part of a contract awarded by DP World. The project is expected to be completed in 2019.
The Egyptian economy has been growing at a rapid rate in the last couple of years, stimulated by overseas investment and this has created demand for additional capacity at Sokhna Port, which is operated by a local division of DP World. This year container volumes are reported to be running around 10% higher than last year, while bulk shipments moving through the port are over 30% higher than in 2017.
DP World plans to build a second container terminal at Sokhna, doubling the port’s existing 1.1 million teu annual capacity. The development of the new basin is a key part of this project, which will involve significant dredging, land reclamation and quay construction work.
[Maritime Standard]
Saudi Arabia may dig canal to turn Qatar into an island
01/09/2018 Plan takes shape amid bitter dispute that led the Saudis, UAE, Bahrain and Egypt to cut ties with small peninsula nation.
A Saudi official hinted on Friday the kingdom was moving forward with a plan to dig a canal that would turn the neighbouring Qatari peninsula into an island, amid a diplomatic feud between the Gulf nations.
“I am impatiently waiting for details on the implementation of the Salwa island project, a great, historic project that will change the geography of the region,” Saud al-Qahtani, a senior adviser to Crown Prince Mohammed bin Salman, said on Twitter.
The plan, which would physically separate the Qatari peninsula from the Saudi mainland, is the latest stress point in a fractious 14-month long dispute between the two states. Saudi Arabia, United Arab Emirates, Bahrain and Egypt cut diplomatic and trade ties with Qatar in June 2017, accusing it of supporting terrorism and being too close to Riyadh’s arch rival, Iran – charges Doha denies.
In April the pro-government Sabq news website reported government plans to build a channel 60km long and 200m wide stretching across Saudi Arabia’s border with Qatar. Part of the canal, which would cost up to 2.8 billion riyals ($750m), would be reserved for a nuclear waste facility, it said.
Five unnamed companies that specialised in digging canals had been invited to bid for the project and the winner would be announced in September, Makkah newspaper reported in June. Saudi authorities did not respond to requests for comment and there was no immediate reaction on the plan from Qatar.
After the dispute erupted last year, Qatar – a small peninsula nation – found its only land border closed, its state-owned airline barred from using its neighbours’ airspace and Qatari residents expelled from the boycotting countries. Mediation efforts led by Kuwait and the US, which has its largest Middle East air base in Qatar, have failed to resolve the dispute.
[Agence France-Presse / The Guardian]
Marine insurance: More infrastructure support is required to facilitate provision of adequate insurance in Arctic sailings
31/08/2018 More infrastructure support is required to facilitate the provision of adequate insurance for Arctic sailings, says the International Union of Marine Insurance (IUMI) in a new position paper.
Helle Hammer, IUMI’s chair of its Policy Forum and co-author of the IUMI Position Paper Arctic Sailings said that the change in ice conditions was opening the high Arctic as a trade route, fishing ground and potential tourism destination.
“The marine insurance sector, like all sectors, wants to see enhanced safety for ships operating in Arctic waters. We would strongly encourage an improved infrastructure to provide the required level of search & rescue capacity alongside suitable places of refuge. We would also like to see updated surveys and more reliable charting of the region. This would assist marine underwriters to quantify the risks involved”, Hammer said.
IUMI’s position paper listed a number of considerations to be observed when assessing individual voyage risk. These included:
• regional rescue and salvage facilities, • potential places of refuge, • expected weather conditions, • experience of crew • the operational performance of the vessel itself.
IUMI noted that, because of the current limited number of sailings and constantly changing ice conditions, historical information was not available and this was forcing marine insurers to take a more cautious approach to risk assessment. Hammer said that IUMI was encouraging insurers to consider the vessel’s Polar Ship Certificate and the vessel operator’s level of preparedness and planning.
The position paper concluded that, with heightened probability and the potentially severe consequences of even small incidents occurring in the harsh Polar environment, insurance would only be available on a case-by-case basis – if at all – in certain defined areas of the region.
“In the coming years, more traffic related to energy, fisheries and destination cruises is to be expected. Over time, this will gradually provide marine insurers with more statistical data to assist in the risk assessment”, IUMI said. Going forward, IUMI said that it:
• Supported the implementation of the Polar Code through further guidance, requirements and performance standards. • Supported the urgent consideration for an instrument to address non-SOLAS vessels operating in polar waters. • Strongly encouraged an improved infrastructure in Arctic waters to provide necessary rescue capacity and places of refuge. • Encouraged more surveys to produce increasingly reliable charts. • Participated in the Arctic Shipping Best Practice Information Forum responsible for an information web portal to support implementation of the Polar Code:
➢ https://pame.is/arcticshippingforum#part-ia-safety-measures ➢ https://iumi.com/opinions/position-papers
[IUMI]
The rise of financial operators in ports: Typologies, objectives and entry modes
31/08/2018 Over the last two decades, terminal and stevedoring industries have been experiencing a profound reorganization process produced by the port reform worldwide, the progressive opening of formerly monopolistic (local) markets and a fast internationalization of the business.
The new competitive environment determined a growing commitment of private investors in the (co-)funding and management of container port facilities, and reshaped major assumptions underlying investment and financial decisions in the industry. For exploiting open window opportunities originated by the re-organization of the sector, several private firms have undertaken a sequence of investments in foreign markets, along with aggressive internationalization paths.
PortEconomics members Francesco Parola and Giovanni Satta, along with Francesco Vitellaro (University of Genoa) studied the rise of financial operators in ports. The results of the study have been presented during the Jean Monnet Symposium on the future of European Port Policy: Financial operators in ports: typologies, objectives and entry modes.
[PortEconomics]
Terminal operators Japan: NYK and Mitsubishi Logistics establish port terminal joint : venture
31/08/2018 Japanese shipping company Nippon Yusen Kaisha (NYK) and Mitsubishi Logistics Corporation (MLC) agreed to form a joint holding company to integrate port and harbor transportation business companies of NYK.
Specifically, the integration relates to the management of the four NYK Group terminal operation companies in Japan, and merging of UNI-X Corporation and Nippon Container Terminals. “The aim is to consolidate quality improvement efforts and enhance long term service stability for port and harbor transportation business of the company group,” NYK said announcing the move.
NYK is the majority shareholder in the joint holding company with 51% stake, while MLC will hold the remaining 49% stake in the new entity. The deal is subject to administrative approval by the authorities concerned and necessary proceedings. Once, and if, the regulatory approvals are obtained, the duo plans to establish the holding company by November 2018, and merge UNI-X and NCT by January 2019.
[World Maritime News]
Operadores de terminales Chile: Luz verde para la construcción de Terminal 2 del puerto de Valparaíso
31/08/2018 Proyecto de US$ 500 millones busca aumentar la transferencia de carga en más de 1 millón de TEU al año.
Puerto de Valparaíso. Fuente: EPV
Luz verde dio el Servicio de Evaluación Ambiental (SEA) de la Región de Valparaíso a la construcción de un segundo terminal y que busca aumentar la capacidad de transferencia de carga del Terminal 2 del puerto de Valparaíso a 1.150.000 de TEU / al año, mediante la construcción y operación de un nuevo terminal de contenedores.
Así el organismo de evaluación ambiental recomendó aprobar el estudio de impacto ambiental (EIA) del proyecto “Terminal Cerros de Valparaíso (TCVAL), que incluye un frente de atraque: de 725 m, 5 sitios de atraque Post-Panamax y de Espigón en una superficie de 18,1 hectáreas.
Esto porque según dicta el Informe Consolidado de la Evaluación (ICE), el proyecto cumple con la normativa de carácter ambiental aplicable identificada en el Capítulo X de este documento; cumple con los requisitos de otorgamiento de carácter ambiental contenidos en los permisos y pronunciamientos ambientales sectoriales aplicables y además, se hace cargo de los efectos, características y circunstancias establecidas en el artículo 11 de la Ley 19:300, proponiendo medidas de mitigación y compensación adecuadas.
Según el documento, el proyecto cuya inversión es de US$ 500 millones, consta de dos áreas: El TCVAL, que contempla la construcción de la explanada y el muelle del nuevo terminal portuario; y el sector Cantera Fundo Los Perales (CFLP), desde donde se extraería material pétreo, insumo requerido para la materialización de las obras de construcción proyectadas en el Sector TCVAL. El sector CFLP sería utilizado únicamente en la fase de construcción del proyecto.
Por su parte, la Empresa Portuaria de Valparaíso (EPV) valoró la resolución del órgano medioambiental dado que cumple con las exigencias de la normativa. Carlos Vera, gerente subrogante de la empresa, enfatizó en la importancia de avanzar en este proyecto: “La ampliación del Terminal 2 es urgente y necesaria para la ciudad de Valparaíso y el país. Es lo que el comercio exterior de Chile requiere y lo que los porteños esperan, recuperar y reactivar la ciudad de la mano de su principal vocación histórica”, según consigno el portal Portuario.
El ejecutivo destacó la importancia de esta infraestructura portuaria. “Con una demanda por infraestructura portuaria que crece a razón de 5 a 6% anual, el Terminal 2 será una obra fundamental no sólo para Valparaíso, sino para que el comercio exterior chileno siga creciendo”, dijo.
[Diario Financiero]
Operadores de terminales Brasil: Libra pide protección por bancarrota y busca
reestructurar deuda por US$480 millones
31/08/2018 La compañía brasileña de logística Grupo Libra, solicitó la protección de bancarrota en una Corte local. Según una revelación emitida hace algunas semanas, Grupo Libra está buscando reestructurar unos US$480 millones de deuda.
Libra dijo que la medida tenía como objetivo garantizar la continuidad del servicio, particularmente en las terminales de contenedores del grupo en Santos y Río de Janeiro, informó Alphaliner en su reporte semanal, al que accedió MundoMarítimo.
De acuerdo con el reporte, un informe de inteligencia empresarial de BNamericas, basado en Santiago de Chile, sostiene que los principales acreedores del Grupo Libra son los bancos Itaú Unibanco, Banco do Brasil, Santander Brasil y Bradesco, que en conjunto representan más del 80% de la deuda.
A principios de este año, los rumores de la industria sugirieron que el operador Terminal Link, una empresa conjunta entre CMA CGM (51%) y China Merchant Holdings International (49%), planearon hacer un movimiento para adquirir Libra Terminais de Grupo Libra. En particular, CMA CGM podría estar interesado en ampliar aún más su huella en Brasil, después de adquirir de Mercosul Line de manos de APM-Maersk.
En el último caso, Maersk se vio obligado a vender a la naviera de cabotaje por razones de antimonopolio, ya que la adquisición de Hamburg Sud le significaba quedarse con el control de la mayor naviera de cabotaje de Brasil, Alianza de Navegación.
Grupo Libra sufrió dificultades financieras cuando la economía brasileña se ralentizó y los volúmenes de carga en los puertos del país comenzaron a desmoronarse. La caída de rendimiento golpeó a Libra particularmente duro desde entonces.
En los últimos años, algunas de los operadores de terminales líderes de la industria global agregaron competencia de capacidad portuaria en Brasil. Embraport - ahora DP World Santos - lanzó su Terminal Santos en 2013, mientras que APMT y TIL siguieron poco después.
Además de esto, Grupo Libra fue una de las empresas involucradas en una investigación de corrupción de largo alcance por parte de las autoridades brasileñas. Esta apuntaba a resolver si el presidente de Brasil, Michel Temer aceptó sobornos a cambio de inclinar una concesión portuaria a favor de Libra y su operador portuario connacional Rodrimar.
[MundoMarítimo]
Transporte intermodal México: País requiere inversiones de US$48.5 mil millones para
mejorar logística y competitividad
31/08/2018 A lo largo de cuatro años, el país ha perdido las ventajas económicas de importar el combustible en camión, no en camioneta, porque la construcción de la Terminal Portuaria Petrolera del Atlántico ha sufrido atrasos, pero Recope guarda silencio sobre la recuperación de las pérdidas y las garantías incorporadas a la contratación.
Antes de frenarse obras en marzo del 2017, se suponía que el muelle iba a terminarse entre junio y julio de ese año según previsiones de Recope. Fuente: Recope.
La Refinadora Costarricense de Petróleo (Recope), una empresa estatal, decidió inaugurar la Terminal Portuaria Petrolera del Atlántico, cuya construcción comenzó en el 2012 y debió concluir dos años más tarde. La inauguración, con cuatro años de retraso, no marca la terminación de la obra, pero aviva la esperanza de contar a corto plazo con la infraestructura en condiciones de operar.
El atraso ha tenido un costo considerable, no solo por el aumento admitido de $5 millones en el precio de la obra, sino también por las economías perdidas en la importación de combustibles. La capacidad de la nueva terminal portuaria permitirá recibir tanqueros más grandes y así reducirá el número de barcos contratados para abastecer al país.
Con el paso del tiempo, las responsabilidades se diluyen y los costos aumentan, en ocasiones para beneficio de constructores que exigen ajustes de precio y ampliaciones de sus contratos
A lo largo de cuatro años, el país ha perdido las ventajas económicas de importar el combustible en camión, no en camioneta, para citar el ejemplo propuesto por un exfuncionario con conocimiento de la materia. Sin embargo, Recope guarda silencio sobre la recuperación de las pérdidas y las garantías incorporadas a la contratación.
La obra está a cargo de un consorcio conformado por la firma mexicana Ingenieros Civiles Asociados (ICA), en condición de socio mayoritario, y la empresa costarricense Meco. El último atraso, en marzo del 2017,
obedeció a una crisis financiera de la compañía mexicana. Unos 150 trabajadores suspendieron labores por falta de pago y la paralización de la obra duró 17 meses.
Entendidas las causas y consecuencias de los atrasos, cuesta trabajo comprender la falta de empeño puesta en el establecimiento de responsabilidades, tanto de los contratistas como de funcionarios de Recope, si existieran razones. En estos casos, el país no debe asumir la factura sin un informe detallado de los responsables y los esfuerzos desplegados para exigir resarcimiento.
Esa debería ser la norma, pero abundan los ejemplos contrarios. Quizá el más emblemático, en este momento, es la ruta a San Carlos, todavía ayuna del tramo entre Sifón de San Ramón y La Abundancia, cuya construcción se inició hace 13 años. No es la Vía Apia. Mide 29 kilómetros y ya ha costado $231 millones, aunque las autoridades calculan el gasto de otros $123 millones y el paso de tres años para terminar el trabajo.
El contrato ha sido modificado siete veces y el Ministerio de Obras Públicas y Transportes está pendiente de la octava rectificación para contar con los $123 millones adicionales. En algún rincón de la Administración Pública, o quizá de las empresas relacionadas con la obra a lo largo de tantos años, hay responsables de la imprevisión y malas decisiones causantes del retraso. Una vez más, el daño rebasa en mucho el grave aumento en el precio de la obra, que desde hace más de una década debió economizar 45 minutos a cada viaje entre San Carlos y el Valle Central. El impacto sobre el turismo, la producción y la calidad de vida en la zona es formidable.
Con el paso del tiempo, las responsabilidades se diluyen y los costos aumentan, en ocasiones para beneficio de constructores que exigen ajustes de precio y ampliaciones de sus contratos. Mientras la burocracia persista en negarse a sentar responsabilidades no habrá forma de avanzar en esta materia. No se trata de venganza y ni siquiera de recuperar pérdidas, sino de dejar establecida, más allá de cualquier duda, la voluntad del Estado de exigir el cumplimiento oportuno y con sujeción a los términos del contrato en cuanto a calidad y funcionalidad de las obras. No es mucho pedir, sobre todo, en vista de tantas malas experiencias.
[La Nación]
The town already has oil and gas loading terminals, built since 2013, that feed pipelines transporting the fuel directlyPort to developmentYunnan province Myanmar: in Western Highway China. A raillinking link isDawei planned port to connect project the to container Thailand port. branded 'ecological and social disaster'
31/08/2018 By Jared Ferrie Community and conservation groups in Myanmar have branded a planned highway linking a port project to Thailand an “ecological and social disaster”, saying it would uproot indigenous people from their homes and farms.
Critics said an environmental and social impact assessment for the road project, approved by the Myanmar government in June, failed to adequately specify compensation for loss of land and livelihoods, among other problems.
“This is a road to an ecological and social disaster (in Myanmar),” said Christy Williams, Myanmar director for the World Wide Fund for Nature (WWF), an international conservation group.
The highway is considered strategically important to both nations as it would link Thailand to a deep-sea port and planned Special Economic Zone (SEZ) in Dawei, a town on the Myanmar side of an isthmus divided between the two countries. The industrial complex would serve as a gateway to Southeast Asia’s markets, with goods trucked between Dawei and Thailand, avoiding the need for ships to sail southward through the Malacca Straights, the world’s busiest shipping lane.
But Williams said the planned road would pass through a region of “huge ecological importance with rich biodiversity”. The assessment looked only at the effects on people and the environment within 500m (550 yards) of the road, he added, but the impact will affect a much wider area. He said WWF had been working with communities and provided “extensive recommendations and solutions” to the Myanmar government and Myandawei Industrial Estate Co. Ltd, the Thai firm developing the road and SEZ, but these had “been ignored”.
The impact assessment failed to address many issues brought forward by residents during consultation sessions, said Thant Zin, director of the Dawei Development Association, a local civil society group. “Our main concerns over the project are forced relocation of thousands of local indigenous people, potential industrial pollution ... land grabbing and livelihood issues, and human rights violations in project area,” he said.
Risk of conflict
Myanmar residents have also expressed fear that the highway could reignite conflict between the government and Myanmar’s oldest armed group, the Karen National Union (KNU), according to Ben Hardman of EarthRights International. Those concerns did not make it into the impact assessment, Hardman said.
The KNU signed a ceasefire agreement with the military in 2012, ending six decades of fighting. In 2015 it signed a national ceasefire agreement (NCA), along with other armed ethnic groups. But relations with the government remain tense and the KNU claims control over territory the highway would pass through.
Saw Tah Doh Moo, the group’s secretary general, said the NCA required that the KNU be consulted about any development projects in areas under its control. However, neither the company nor the government have officially discussed the road project with them, he said. “I don’t want to say what would happen, but it would undermine the NCA,” he told the Thomson Reuters Foundation by phone. “We have to think about how to respond.”
[Reuters]
Port development Oman: Strategy and plans
31/08/2018 By Giorgio Cafiero and Victoria Shakespeare At the incipience of plans to finalize ports in Duqm and Salalah, Oman could potentially succeed in establishing two commercial hubs that become highly important to the international economy, perhaps one day rivaling Dubai’s Jebel Ali.
The growth of Duqm and Salalah as major ports would raise Oman’s profile and further empower the Sultanate in the global geopolitical order while also helping to accelerate the country’s transition to the post-oil era.
Across a range of sectors—from logistics to agriculture and fisheries to transportation—Oman’s ports will be essential to the Sultanate’s long-term development, economic development, and sustainable prosperity. Yet Duqm also has plans to distinguish itself from nearby popular hospitality and business cities such as Doha, Dubai, and Abu Dhabi by leveraging Oman’s natural geography to bolster its tourism sector. The current plan allocates over 11,500 square miles around the city for nature and wildlife reserves in an effort to attract eco-tourists.
Oman can capitalize on its other differences with its neighbors to further develop the uniqueness of these ports. Thanks to its lengthy coastline, Oman has developed over the centuries a unique maritime culture, while its natural geographic barriers—the mountains and the sea—have allowed a rich and diverse cultural heritage to survive in relative isolation.
The agenda in Salalah includes introducing an expanding roadway system, plans to build a more comprehensive dedicated liquid natural gas (LNG) jetty, and a 50 percent increase in its container shipment capacity to 7.5 million twenty-foot equivalent units (TEUs). These roadways would connect Salalah even further to its regional neighbors, thus making it one of the most easily accessible ports in the Middle East.
Salalah will also feature a major station for Oman’s evolving railway, further enabling regional trade and transportation.
Foreign stakes in Duqm and Salalah
Duqm and Salalah’s locations will make the two ports attractive to foreign investors. Duqm currently has a US$10.7 billion deal with China dubbed the Special Economic Zone (SEZ). This investment plan includes a manufacturing facility, pipeline, and oilfield plans, as well as a broad hospitality blueprint. South Korea and Kuwait have also invested heavily in Duqm. Foreign involvement in a domestic growth plan is both a blessing and curse. The Omani government must proceed with caution as plans and relationships progress. Excessive foreign involvement could mean excessive foreign control over the project.
Within the Arabian Peninsula, Duqm and Salalah have much potential to further shape geopolitical relations amid strategic shifts in the regional balance of power. Any major investments by Saudi Arabia and the United Arab Emirates (UAE) in Duqm (and other Omani projects) should be watched closely for their effect on intra-Gulf politics. Some analysts contend that both countries are attempting to restrict the Sultanate’s geopolitical maneuverability as Muscat and Tehran try to maintain cooperative relations. As Riyadh and Abu Dhabi may use their petro-dollars to influence Oman’s future position in an increasingly polarized Gulf, they could use investments in Omani infrastructure projects as another way to gain leverage. Likewise, Oman’s trade infrastructure proved highly useful to Qatar last year when Doha needed alternatives to Jebel Ali as a logistics hub linking the emirate to the global economy.
It goes without saying that Iran itself is a key factor in this equation. If tensions in the Strait of Hormuz escalate, Duqm and Salalah would need to prepare for any trade-related ramifications. The Omani government must stay vigilant and aware of any escalations of friction amid increasingly harsh rhetoric from Washington and Tehran that threaten to unleash an armed conflict in or near the strait. Yet the ports’ advantageous geographic locations could help Gulf states continue to sell their oil and gas in the event of such a crisis, as shipments via Duqm and Salalah will not need to travel through the strait. Whereas Saudi Arabia has its Red Sea coast and the UAE has one Emirate (Fujairah) outside the strait, which would enable these two states to continue exporting oil in the event of the strait’s closure, Bahrain, Kuwait, and Qatar are fully dependent on that artery for their hydrocarbon exports. As Amer No’man Ashour, chief analyst and economist at CNBC Arabia, explains:
“We all know that more than 30 per cent of oil shipments pass through the Strait of Hormuz and with this shift via the Port of Fujairah and the Duqm port, the GCC countries will ensure that their oil shipments are safe, and this will decrease the risk and the cost of insurance on ships… Al-Duqm Port is one of the best ever solutions to the oil issue… It is 800 kilometres away from UAE borders. We know that the UAE has had a partial solution via Fujairah with a capacity of 1.1 million barrels per day, but the production of the UAE is almost 3 million barrels per day. Most of Kuwait, Qatari and Saudi oil is produced in the eastern parts of the Gulf area and this new Omani port will be very suitable for exporting oil to the world.”
Geopolitics of global powers
China’s involvement in Omani ports is not only about its economic interests, but also Beijing’s geopolitical aims. Given that China has deep commercial and military interests in Pakistan’s Gwadar Port and the People’s Liberation Army (PLA) has its Support Base port in Djibouti, Oman will be keen on making major investments in the Sultanate’s relationship with China as Beijing asserts a stronger maritime footprint around the Arabian Peninsula. Muscat has already permitted China’s navy to use Omani ports for resting and refueling amid anti-piracy operations in the Gulf of Aden.
India, which enjoys an intimate relationship with the Sultanate that is rooted in ancient history and deep sociocultural links, is also involved in Duqm, both militarily and commercially. This Indian participation enables Muscat and New Delhi to enhance their anti-piracy efforts within the context of a stronger and more effective bilateral relationship. Oman also signed an Eight Point Agreement with India in February to promote future cooperation regarding defense, trade, health, and tourism, ensuring greater collaboration between New Delhi and the Sultanate in the future.
Unquestionably, if more powerful states grow their military presence in Oman, the Sultanate will gain greater geopolitical leverage as an increasingly valued strategic partner for those states. At the same time, if the Sino-Indo rivalry continues to escalate, Oman could find itself under pressure that may prove difficult to manage. And while China’s growing relationship with Oman seems to have created no problems between Washington and Muscat thus far, U.S. officials are always concerned about any areas of the world where China increases its footprint, and the Sultanate is likely no exception.
Such geopolitical pressures may mount on Muscat as more countries seek to assert their influence in the southern Arabian Peninsula. Yet since Sultan Qaboos’ ascension in 1970, Oman has fostered warm relations with a diverse host of powers while preserving the Sultanate’s independence and security despite existing in a dangerously chaotic neighborhood.
Like other Arabian Peninsula states, Oman will be keen on maintaining its close ties with its traditional Western allies—the United Kingdom, the United States, and France—while also capitalizing on the global geo-economic shift eastward deepening its ties with regional powers. In light of the financial crisis of 2008 and the uncertainty of US foreign policy during Donald Trump’s presidency, Gulf Arab states are increasingly determined to counter-balance their dependence on Washington as a security guarantor by broadening their diplomatic relationships. To be sure, Oman’s growing relationships with China and India certainly offer Muscat greater autonomy from the U.S.’ geopolitical orbit.
Sustainable prosperity and geopolitical empowerment
Looking to the future, Duqm and Salalah have potential to one day become two of the Middle East and Indian Ocean’s most critical ports and tourist hubs. These two ports can significantly help the Sultanate achieve economic diversification before the country’s oil runs out, which will occur sooner in Oman than in
its wealthier neighbors, making Duqm and Salalah’s development a high priority for the Sultanate as Muscat prepares for a post-oil future during a period of immense geopolitical instability in the Gulf.
[Lobe Log]
Short sea shipping: New website on climate change adaptation for coastal transport
31/08/2018
The United Nations Conference on Trade and Development (UNCTAD) has created a new website – SIDSport-ClimateAdapt – dedicated to the issue of climate change impacts and adaptation for critical costal transport infrastructure, such as seaports and airports, in Caribbean small island developing states (SIDS).
The web-based platform showcases the activities, findings and outputs of the UN Development Account project Climate change impacts on coastal transport infrastructure in the Caribbean: enhancing the adaptive capacity of Small Island Developing States (SIDS), which UNCTAD implemented in collaboration with a range of partners and international and regional academic experts.
Drawing on earlier related work by UNCTAD, the project was initiated with the aim to strengthen the capacity of policy makers, transport planners and transport infrastructure managers in SIDS to, one, understand climate change impacts on coastal transport infrastructure, in particular seaports and airports, and, two, take appropriate adaptation response measures.
Key outputs include national case studies focusing on seaports and airports in two vulnerable SIDS in the Caribbean (Jamaica and Saint Lucia) as well as a transferable methodology for assessing climate-related impacts and adaptation options for coastal transport infrastructure in SIDS.
The case studies and methodology were presented and discussed at three workshops, bringing together key stakeholders from 21 countries and territories in the wider Caribbean region. In addition to the case studies and methodology, the new website houses useful tools andguidance material, workshop materials, project documents and relevant information on the topic of climate change adaptation for coastal transportation infrastructure.
The web-based platform is intended to facilitate information sharing, communication and dialogue among relevant stakeholders and interested parties, who are invited to subscribe on the forum and share additional relevant material. Although participation in the forum requires registration, all material on the platform can be freely accessed by anyone.
A scientific paper, Climate change impacts on critical international transportation assets of Caribbean Small Island Developing States (SIDS): the case of Jamaica and Saint Lucia, is presenting and discussing some of the key project results, as well as some technical elements of the methodology developed under the project, has been published in Regional Environmental Change and will be included in a Special Issue, which is to inform and accompany the IPCC Special Report on 1.5 degrees warming.
Complementing the above technical assistance work is a recent report relating the findings of a Port industry survey on climate change impacts and adaptation, designed in collaboration with global port industry associations and other experts.
The survey aimed to improve the understanding of weather and climate-related impacts on ports and to identify data availability and information needs, as well as to determine current levels of resilience and preparedness among ports. Relevant information is urgently required for the purposes of risk-assessment and adaptation planning, including in particular for ports in developing regions. Among other things, the study revealed that although most respondent ports had been impacted by weather/climate related events – at times extreme – important gaps remain in terms of relevant information available to seaports of all sizes and across regions, with implications for effective climate risk assessment and adaptation planning.
[UNCTAD]
Oil & gas shipping Russia: Yamal’s LNG exports accelerate in time for winter
31/08/2018
By Sabina Zawadzki
Liquefied natural gas exports from Novatek’s Yamal terminal in the Arctic have come on stream faster than expected over the summer and exceeded volumes from Russia’s only other LNG facility, Sakhalin, for the first time in August.
Two Arc7 ice-class LNG carriers load LNG produced at Yamal LNG at the port of Sabetta, Russia. Photo: Novatek
The pace of commissioning the multi-billion dollar project has surprised a market used to chronic delays. Additional volumes from the start of another facility should now come in time for the northern hemisphere winter, a time of price spikes.
Novatek said earlier this week it had begun commissioning the third train, or plant, and that its first two trains were running at capacity, which is 11 million tonnes a year (mtpa). Russian LNG exports amounted to 10.8 mtpa last year, almost all of which came from Gazprom’s Sakhalin-2 site. Full production at the current trains of Yamal and Sakhalin doubles Russian LNG output to just over 20 mtpa, making the country the fifth largest LNG exporter in the world.
Yamal loaded its first cargo at the end of last year. The second train produced LNG late July with normal operations by Aug. 9. Commissioning of the second train took around three months, from when the compressor gas turbines were first fired up, although the commissioning period is not clearly defined.
Barring any technical glitches and should the pace of commissioning continue, the third train should be producing LNG at capacity by November, far ahead of the scheduled first quarter of 2019 and market expectations of mid-next year. Yamal LNG and Novatek did not respond to queries about the exact timing of the train’s start-up.
In August, Yamal loaded 1.95 million cubic metres (mcm) of LNG, more than double the 818,000 cubic metres it loaded in July, according to Thomson Reuters shipping data. That is also more than the 1.58 mcm loaded by the Sakhalin-2 LNG plant in August, surpassing production there for the first time.
There were already signs that the project was moving ahead with speed when two LNG shipping companies said they would expedite the delivery of Arctic-class LNG carriers to the Yamal project at its request.
Dynagas, an LNG shipping company specialising in carriers able to navigate the icy waters of the Arctic, said on Monday it had delivered the Yenisei River tanker three months early to Yamal on Aug. 14. Teekay LNG, one of the largest LNG shipping companies, said earlier this month it sought to provide two Arctic-class carriers to Yamal early, noting Yamal’s ahead of schedule ramp-up.
The opening up of the Northern Sea Route through the Arctic during the summer months has raised concerns from environmentalists, but for shipping companies it provides a much cheaper and faster way of transporting goods to and from China. Novatek estimates the route saves 17 days of shipping from Yamal to China compared to a 36-day round trip through the Mediterranean and Suez Canal and 33 percent in costs per million British thermal unit (mmBtu) shipped.
[Reuters]
Oil & gas shipping Venezuela: Terminal damage adds to oil export troubles
31/08/2018
An allision at Venezuela's main oil export port may have serious implications for state-owned PDVSA's contractual obligations with foreign oil consumers, including Russian oil major Rosneft, which has agreed to accept loan payments from PDVSA in the form of heavy crude oil.
Last weekend, a tanker collided with the South Dock at the Petróleos de Venezuela, S.A. (PDVSA) terminal at Jose, Venezuela. The remaining piers and the terminal's offshore single point mooring buoys are operational, but a shutdown at the South Dock adds to PDVSA's other difficulties in sustaining export volumes. Jose handles the exports from Venezuela's Orinoco Belt region, the center of the nation's oil production.
According to shipping agency Vinodol, the terminal's South Berth is capable of handling VLCCs of up to 250,000 dwt. Under normal operating conditions, the facility can load at a rate of 25,000-80,000 barrels per hour, making it capable of fully loading a VLCC in one day.
Reuters reports that the Jose terminal's East and West docks are currently at capacity. AIS data showed more than a dozen tankers at the adjacent anchorage, and media reports indicate that at least five VLCCs are currently awaiting loading.
Under a debt restructuring agreement signed in April, PDVSA agreed to provide Rosneft with 130,000 bpd of heavy crude. Rosneft has extended more than $6 billion in loans to the cash-strapped oil firm, raising concerns about its exposure to Venezuela's rapidly-contracting economy and declining oil production.
PDVSA faces serious financial difficulties. It has defaulted on $2 billion in bonds and is behind on $6 billion more, plus billions in unpaid accounts for goods and services. In addition, it has had limited access to its terminals and refineries in the Dutch Caribbean since May, when ConocoPhillips moved to seize its foreign assets to fulfill an unpaid arbitration award. PDVSA settled with ConocoPhillips on August 20, paving the way for the renewed use of its facilities in Curacao and nearby islands.
[Maritime Executive]
Container shipping: Maersk’s fuel bill to rise by $2 billion following the introduction of low-sulphur rules in 2020
31/08/2018
By James Baker
The company’s choice to use low-sulphur fuel oil following the introduction of new IMO regulations in 2020 will add more than 50% to fuel bills.
The world’s largest container line, which operates a fleet of more than 700 vessels, said high oil prices, slim availability of compliant fuels, and investment in research and development were among issues that would drive up the cost of complying with International Maritime Organization 2020 rules.
“I wouldn’t call it a perfect storm, but it’s close,” Maersk regulatory affairs director Simon Bergulf told Bloomberg. He added that there was no concern about a shortage of fuel, however. “Everyone that we’re talking to in our dialogues in the refineries, in the bunker suppliers, they’re not fearing any shortage,” Mr Bergulf said. “That’s not something that they’re fearing at all. They believe they’re well equipped to handle that transition.”
Maersk spent $3.4bn on fuel last year, Bloomberg reported. Earlier this year, Hapag-Lloyd chief executive Rolf Habben Jansen told Lloyd’s List that the German carrier expected IMO 2020 compliance would cost the company an extra $900m a year.
Maersk has picked low-sulphur fuel as its sulphur cap solution rather than install scrubbers on its fleet. In its second-quarter results presentation this month, chief executive Søren Skou said fitting scrubbers on a fleet of 700 vessels was not feasible, although the company may pilot a few scrubber installations. “We don’t like the solution,” Mr Skou said. “We think that the sulphur should be taken out at the refineries.”
Last week, Maersk announced it was joining forces with independent tank storage operator Royal Vopak to launch a low-sulphur bunkering facility in Rotterdam that would cater for up to a fifth of Maersk’s fuel demand after 2020.
[Lloyd’s Loading List]
Container shipping: Global warming opens Arctic passage
31/08/2018
By Niall McCarthy, Data Journalist
An interview from the Russian Ministry for Maritime and River Transport published on website PortNews says that Arctic ports along the Northern Sea Route are experiencing a surge in cargo.
Up to August 24th of this year, 9.95 million tons of goods went through ports in the region, an 81 percent increase on last year's 5.5 million. Even though the passage is only feasible for three months of the year, global warming is making it increasingly viable for major shipping companies. This year, temperatures in the Arctic Circle have been unusually warm, topping 30C on several occasions.
That resulted in Maersk confirming that it was sending a ship with a 3,600 container capacity, the Venta Mersk, over the top of Russia on a test run. The decision has been welcomed in
Russia where it's hoped the Arctic route will compete with the southern route through the Suez Canal and Straits of Malacca. The Northern Sea Route runs from Murmansk near Russia's border with Norway all the way to the Bering Strait in Alaska with all transiting ships requiring a permit from the Russian authorities. Even though travel-time can be reduced by two weeks compared to the southern route, costs are generally higher because vessels have to be accompanied by a nuclear-powered icebreaker.
The Venta Maersk left Vladivostock before docking in Pusan, South Korea. It embarked on its long journey through the Arctic and its expected to pass through the Bering Strait at the start of September before finishing the trip in St. Petersburg at the end of the month. The following infographic shows how a general container-ship would travel between Europe and East Asia, using Hamburg and Shanghai as example ports. A ship traveling between those two cities on the Northern Sea Route would travel about 14,000 kilometers, sparing at least two weeks over the 20,000-kilometer long southern route through the Suez Canal and Straits of Malacca.
[Statista]
Container shipping: COSCO’s first-half profit drops 98% to $6 million
30/08/2018
China’s COSCO Shipping Holdings Co Ltd on Thursday said first-half profits fell 97.8 percent as it grappled with higher costs and a slide in freight rates.
China’s largest shipping group, which has bought a Hong Kong peer to become the world’s third-largest container liner, said January-June net profit was 40.8 million yuan ($6 million), down from 1.86 billion yuan in the same period last year.
After a prolonged slump, the global container shipping industry entered a period of recovery last year. However, COSCO said the delivery of a number of new large ships had worsened the industry’s current oversupply of vessels, pressuring rates.
In July, a key U.S. review body cleared COSCO’s $6.3 billion acquisition of shipping firm Orient Overseas International Ltd (OOIL) on security issues after it agreed to sell the Long Beach container terminal business to a third party. There had been concerns an ongoing trade fight between Beijing and Washington might end up hampering major deals by U.S. or Chinese firms seeking regulatory approval.
In April, COSCO said there was little evidence at the time that the tensions were affecting cargo volumes but added it was ready to take “appropriate action” to protect its market should it start to see an impact. Earlier this month, German shipping company Hapag Lloyd forecast that business could be impacted in 2019 and thereafter if the U.S.-China trade spat escalates.
[Reuters]
Container shipping: World Container Index - 30 Aug 2018
30/08/2018
The World Container Index assessed by Drewry, a composite of container freight rates on 8 major routes to/from the US, Europe and Asia, nudged up $0.49 to $1754.45 per 40ft container.
Two-year spot freight rate trend for the World Container Index:
Our detailed assessment for Thursday, 30 Aug 2018
The composite index nudged up $0.49 this week, however, 16.8% up as compared with same period of 2017.
• The average composite index of the WCI, assessed by Drewry for year-to-date, is US $1,434/40ft container, which is $84 lower than the five-year average of $1,518/40ft container.
• Drewry’s composite World Container Index nudged up $0.49 to $1754.45 per 40ft containers. The index is up by 16.8% in year-on-year comparison. Freight rates from Rotterdam to Shanghai increased $101 to $923 per feu. Similarly, rates from Shanghai to New York are up by $26 to $3,426 for a 40ft box. However, rates on Shanghai to Los Angeles decreased by $66 to $2,116 for a 40ft box. Likewise, rates on Rotterdam to New York are down by $12 to $1,950 per feu. Drewry expects the rates may increase for next week.
Our latest freight rate assessments on eight major East-West trades:
Spot freight rates by route - assessed by Drewry
Source: Drewry Supply Chain Advisors
[Drewry]
Dry bulk shipping: Star Bulk bought seven bulkers from Erck Rickmers for US$157 million
30/08/2018
The Greek shipping company Star Bulk, owned by Petros Pappas, has bought seven bulkers from E R Capital Holding, an Erck Rickmers company, for US$157M.
The price of US$157M includes shares and valid charter contracts. The takeover will be completed in two steps. First, two 8-year old Capers (180, 000 dwt ), E R BURGOYNE and E R BRANDENBURG, and the 55,000dwt E R BRIGHTON, will be taken over in Q4 2018, after the ok from the charter party. Erck Rickmers will receive US$41.7M in cash and a 1.45% stake (1.34M shares) in Star Bulk. A European bank will finance the deal for Star Bulk with a credit worth US$41M.
For the remaining four bulkers, Rickmers will get US$115.4M if Star bulk declares a call option by April 1st 2019. Should this not happen, E R Capital Holding can then draw a put option up to April 4th 2019 worth US$105.39M. The vessels should then be taken in to ownership by Star Bulk between early April and mid-July 2019.
After the transaction Star bulk will have a fleet of 115 bulkers with a total capacity of 13.4M dwt and an average age of 7.5 years. Petros Pappas said: Star Bulk will get a modern fleet from E R in a structured transaction. The prices are attractive, which gives us more flexibility.
At the same time, we are happy to welcome Erck Rickmers as a prominent shipowner into our shareholders’ circle.”
[World Cargo News]
Dry bulk shipping: Weaker demand for larger vessels weighs on Baltic Index
30/08/2018
Baltic Exchange's main sea freight index, which tracks rates for ships ferrying dry bulk commodities, dipped on Thursday, pressured by weaker demand for capesize and panamax vessels.
The overall index, which factors in rates for capesize, panamax and supramax vessels fell for the sixth straight session, by 47 points, or 2.8 percent, to 1,614 points.
The capesize index shed 168 points, or 5.6 percent — its largest daily percentage fall since July 10 — to 2,826 points. Average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes such as iron ore and coal, decreased $1,050 to $21,354.
The panamax index fell 31 points, or 1.9 percent to 1,608 points. Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, fell $249 to $12,876.
[Maritime Professional]
Oil & gas shipping: A record poor tanker market with a growing fleet is prolonging the crisis
30/08/2018
The continued severity of the tanker market conditions has made owners dig deep into the oversupply of capacity. Still BIMCO expects the tanker fleet to keep growing. A short-term rate recovery is not expected, as it is ‘maintenance season’ for the global refining industry in September and October.
Demand
BIMCO expected the crude oil tanker market to continue its struggle from 2017, but the magnitude of it has been staggering, as evidenced by the worst freight rates on record. This is particularly true for crude oil tankers, but the oil product tankers are now set for a loss-making year too.
By 24 August, we note that year-to-date average earnings for the Very Large Crude Carriers (VLCC), Suezmax and Aframax crude oil tankers stand at USD 6,797, USD 11,337 and USD 10,438 per day respectively.
For LR2 (AG-Japan), LR1 (AG-Japan), MR and handysize oil product tankers, year-to-date average earnings stand at USD 8,961, USD 6,965, USD 8,741 and USD 5,239 per day respectively. All are a long way below profitable levels.
Noting that liquidity in the time charter (T/C) market is limited, it is still striking that the T/C market has been upside-down for more than a year now. Normally, short-term T/C rates (6-12 months) are higher than long-term ones (3-5 years). In depressed markets, it’s the other way around.
During March and April, quotes on 3- and 5-year T/Cs for a VLCC dropped, from USD 27,500/29,500 per day to USD 24,000/25,500 per day. That followed the trend of the 1-year T/C rate that had been gradually sliding from USD 27,750 in November 2017 to USD 19,000 per day in June 2018. For an industry-average VLCC, BIMCO estimates that USD 23,700 per day is needed to cover operating and capital expenditures.
Growing Chinese crude oil imports (up 5.8% during the first half of 2018) improved crude oil tanker demand, but obviously not enough, as other elements are pulling the market in the opposing direction. It remains a fact, however, that global oil demand is growing constantly, and so is global tanker demand.
Fortunately, the introduction of a tariff on 10 million tonnes of crude oil exports from the US to China was avoided at the very last minute. If China decides to source its import demand for sweet crude by going to West Africa, shorter sailing distances will hurt earnings. BIMCO does not expect crude oil to re-enter the trade war after it has been removed. But a combined 2 million tonnes of refined oil products became a part of it in early August, when an exchange of already proposed tariffs affected various goods worth USD 16bn on both sides.
One of the more spectacular trades seen recently has been a couple of VLCCs shipping oil products from the Far East into Europe on their maiden voyage – quite hurtful for oil product tankers, but a sure sign of the horrible crude oil tanker markets.
Supply
The continued severity of the market conditions has made owners dig deep into the oversupply of capacity. BIMCO now expects 19m DWT of crude oil tanker capacity to be demolished – up from 13m DWT in May – and 2.5m DWT of oil product tanker capacity is to leave the fleet, up from 1.5m DWT in May.
During the first six months of 2018, 13.1m DWT of crude oil tanker capacity has been demolished, a level equal to the total for the preceding 40 months. A change in that trend now seems to have developed, however, as only one VLCC was broken up in July, and little more that 1m DWT was taken away in total. BIMCO expects that there will be a cooling in demolition activity in the final six months of 2018, as the market is likely to deliver somewhat higher freight rates on the back of increased demand in the second half of the year.
Although scrap steel prices are high right now, returning about USD 17m to a VLCC owner when scrapping, this isn’t the deciding factor – freight rates and earnings are.
The slowdown in demolition interest appeared among oil product tankers one month earlier, and no oil product tankers left the fleet in June. BIMCO expects to see the 2017 demolition total exceeded soon and that 2018 will reach a six-year-high level of oil product tanker demolitions, despite the pace of it slowing down recently. During the first seven months, 1.8m DWT of oil product tanker capacity has left the fleet.
Fleet growth year to date has been muted by the massive demolition activity. The crude oil tanker fleet was 0.2% smaller by early August than it was at the start of the year. The oil product tanker fleet has grown 1.7% in the first seven months of 2018.
Our fleet growth forecast for the full year of 2018 is at 0.8% for the crude oil sector and 2.4% for the oil products sector.
After a surprisingly high number of new orders emerged during the challenging first half of the year, there were no new orders for crude oil tankers in June. Looking at BIMCO’s delivery forecast, a halt in contracting is long overdue. It is already clear that the industry must keep demolition activity high well into 2019, to avoid a worsening of the fundamental balance.
For oil product tankers, the supply outlook is better; moreover, the ordering of newbuilds in 2018 has been quite low – at a level not offsetting a potential recovery in the market when demand improves.
Figures from early August prove that the fleet growth has slowed considerable over the past year:
• Crude oil tanker sector growing by 0.7%.
• Oil product tanker sector by 0.8%.
Outlook
For steady and positive demand growth, you need to look east of Suez. Crude oil throughput in the eastern refineries is constantly positive and growing. If you look to the west of Suez (Atlantic Basin in graphics), it gets volatile and unstable. This reflects the ongoing multi-year shift that we are experiencing on a global scale, where oil demand growth is now dominated by Asia, whereas demand in the US and Europe is only growing slowly.
A short-term rate recovery is not expected, as it is ‘maintenance season’ for the global refining industry in September/October – mostly the part of it located in the OECD countries (mainly the US, Europe, Japan and South Korea) and Russia – as they repair and prepare the facilities for the winter specifications of the refined oil products.
There is anecdotal evidence that there may be a significant premium on long-term time charters for oil tankers with a scrubber installed onboard, compared to similar ships without it. Two VLCC newbuildings fitted with scrubbers are being fixed at USD 35,000 per day for three years, with delivery in 2019. Rates for non-scrubber-fitted ships are being quoted at USD 24,000 per day.
From an operator perspective, chartering in a ship with a scrubber installed onboard is a hedge against rising bunker fuel costs after 1 January 2020. From an owner perspective, chartering out a ship with a scrubber installed means a significant premium on the T/C rate, which, in turn, pays for the scrubber.
Overall, global oil demand remains healthy. The International Energy Agency (IEA) expects growth of 1.4m barells per day (bpd) in 2018 and 2019, down from 1.5m bpd in 2017. Asia will be driving two-thirds of the incremental volume growth, even though it only accounts for 27% of the total demand today.
During the second half of 2018, BIMCO expects freight rates to go up from the very low levels seen up until now. Seasonal demand should support the market in Q3 and, especially, in Q4. For crude oil tankers to really enjoy solid earnings, however, patience is required, as overcapacity is currently significant. The fundamental balance could worsen in 2019 if demand growth does not pick up, as the fleet could grow by 2.5% unless extensive demolition activity continues.
[BIMCO]
Terminal operators Australia: Newcastle invites bids for box terminal
0/08/2018
After Australian media reported that DP World and the Port of Newcastle had ended their negotiations to develop a new container terminal at Newcastle, the port has issued a call for other terminal operators interested in developing a box terminal at one of Australia’s largest coal ports.
Newcastle and Port Kembla have long been debated as potential sites for container terminals once Port Botany reaches capacity, but the 2014 sale of a 99-year lease on Newcastle to Hastings Fund Management and China Merchants placed a restriction on Newcastle growing beyond a 30,000 TEU per year baseline without paying a A$100 per TEU compensation to the owners of Port Botany.
In December 2017 the new chairman of the Port of Newcastle Board, Professor (Emeritus) Roy Green, started a push to develop a container terminal at Newcastle and revisit the compensation arrangement in the process. Newcastle was negotiating with DP World, but Australian media reported earlier this month that those talks broke off with no agreement reached.
Craig Carmody, CEO of the Port of Newcastle, has now announced that over the past three weeks, the port had received a number of unsolicited bids to develop and operate a container terminal in Newcastle. "I can confirm that the Port of Newcastle has been approached by a number of globally significant container port operators who are eager to take advantage of our proximity to exporters and importers, the availability of large tracts of low cost land around the port and our access to dedicated freight transport infrastructure."
Carmody said, "Whilst we cannot go into details yet, these bids clearly demonstrate that there is no doubt in the minds of private investors that a container terminal in the Port of Newcastle is economically viable. It’s really a matter of when, not if, we will see preparatory work commencing on the container port in Newcastle.
While the local market is limited, Newcastle believes it is well placed to be handle containers for the Sydney and wider NSW markets. "In the next 20 years, the number of containers moving through ports in NSW is likely to double. Evidence from Deloitte Access Economics and other studies suggests that the development of a highly automated, state-of-the-art container port in Newcastle has the capacity to help ease congestion in Sydney while boosting the competitiveness of the NSW and national economies.”
[World Cargo News]
Port development Greece: Third privatisation phase for 10 ports
30/08/2018
Greek assets body TAIPED plans to launch the third privatisation phase of 10 ports across Greece in autumn, with priority on four in Northern Greece, three in Attica as well as ports in Patra, Volos and Heraklio.
The third phase follows the sale of the Thessaloniki Port Authority to South Europe Gateway Thessaloniki Limited (SEGT) for €231,926m earlier this year, reported GTP Headlines. Next in line for immediate development are the ports of Alexandroupolis, Kavala, Igoumenitsa, Corfu and Volos. So far, the ports of
Alexandroupolis and Corfu have attracted the most interest, said GTP.
Unlike the previous two ports – those of Thessaloniki and Piraeus – the government will not proceed with the full sale but will instead enter PPP contracts to “encourage the advent of investors who have specific knowhow and experience, while at the same time ensuring the public’s best interests.”
According to Naftemporiki, said GTP, cruise travel activity is the point of interest for Corfu and Heraklio, freight services for Alexandroupolis, connecting ports in the Black Sea for Kavala, and serving the Adriatic for the port of Igoumenitsa.
The ports of Lavrio, Rafina and Elefsina, according to Naftemporiki, have been put on the back burner for now as there has been limited investor interest.
[Port Strategy]
Port development Georgia: Doubts about Anaklia deep-water port project bubble up
30/08/2018
Georgia’s Anaklia deep-water port project proposal has been around for a number of years, but is it any further forward in real terms and will it clear the hurdle of receiving the private sector funding it needs to progress? The signs are not promising.
The Anaklia port project, as marketed today, foresees the development of “a world class port for Georgia, establishing Anaklia as a focal point for trade to and from Central Asia and on the new Silk Road trade route between China and Europe”.
The team behind the project has changed since it was originally mooted and is now a consortium of interests operating under the banner of the Anaklia Development Consortium (ADC) which comprises: TBC Holding from Georgia; Conti International, US; SSA Marine, US; Wondernet Express, UK; and G-Star, Bulgaria. Global Link Logistics, the Kerry logistics company, has also recently signed a memorandum of understanding with Anaklia City JSC which will see it co-operate in the development of the port and the related Special Economic Zone.
But while these consortium members are nominally in the game, how many have put their money where their mouth is? Those in the know suggest there has been little in the way of ‘real commitment’ – hard cash on the table – by the various consortium members. To date, the Government of Georgia is the only stakeholder to allocate significant funding to the project. And, significantly, while the project has been marketed as complementing China’s One Belt One Road concept, there has been no take-up from China at an investment level – always a barometer of what constitutes a viable project.
There are other indicators that all is not well. In October 2017 ADC announced that construction of the project would start on December 20 of the same year. There was a ground-breaking ceremony at the end of December 2017 with participation by members of the Georgian Government, but since that time there has been little evidence of major construction works.
Also, it was announced in July this year that the “early dredging and reclamation works for the Phase 1 Anaklia Deep Sea Port project have been awarded to the Dutch dredging company Van Oord”. This, it has to be said, is a positive sign but the edge is taken off this by the reality that this is the second time an announcement of this sort has been made – the first time being in October 2016.
Further, there has been political change. In June this year the then Georgian Prime Minister, Giorgi Kvirikashvili, unexpectedly resigned citing divisions with his governing party and its billionaire founder Bidzina Ivanishvilli. Also exiting at the same time was the Minister of the Economy, like Kvirikashvilli, a big supporter of the Anaklia Port project. Subsequent to this it has been reported in the Georgian media that Giorgi Kobulia, Minister of Economy and Sustainable Development, stated at a committee meeting in Parliament on July 13 that the new government intends to study the market and other data relating to the development of the port and “if necessary review the whole project”. He further said: “the thing is the situation with goods turnover changes very quickly. We should review the project one more time.” Clearly, the current government leadership is expressing some concern about project viability and underpinning this value delivered to the taxpayer.
The key point, however, is where is the market for the proposed new port? Georgia’s two existing ports, Batumi and Poti, are both operating with substantial spare capacity. Poti also has plans for two new deep-water berths able to accommodate vessels of up to 9,000 teu – when such capacity is needed. The whole Georgian market for container traffic in 2017 accounted for just 230,000 teu loaded containers, up 11% over 2016 but hardly a foundation stone for a major new port development.
[Port Strategy]
Port development U.S.: Dredging problems and protectionism continue to plague ports
30/08/2018
By Martin Rushmere
Some of the dredging problems plaguing US ports are being sorted out, but the issue of protectionism could hamper a turnaround.
In line with the protectionist mood sweeping through politics and commerce in the US, dredging has been caught up in the arguments. The only facts that everyone agrees on are that the industry is sheltered from foreign competition by both the Jones Act and the Foreign Dredge Act of 1906. However, even the word “sheltered” can elicit accusations of bias.
Neither law has stood the test of time when it comes to world economic changes. Legal interpretations of the Jones Act have allowed for some of the steel used in hulls to come from foreign, primarily Southeast Asia, yards – provided the final fabrication is done in a domestic yard. Also, foreign vessels are given temporary permission to bring in goods for specialised industries such as offshore oil production.
The dredging law originally stipulated that the whole vessel had to be made in the US but this was diluted in 1992 to apply only to the hull. However, as with the Jones Act, the crews have to be US citizens. Companies and operators still have to be US owned.
A bureaucratic layer built on top of this is the continuing involvement of the Army Corps of Engineers (USACE). This has to be the overall leader and the overseer of projects. Through no fault of its own, the Corps became the punch bag of politicians twanging their braces by complaining about government inefficiency.
Dodging delays
According to international trade analyst Gary Busch, it could take as long as 16 years for a dredging proposal for a new port project (as opposed to maintenance work such as silt removal) to receive approval. Much of the blame for this was due to the Corps having to get authorisation from various agencies in government and
submit hundreds of pages of reports about minor details.
Complaints reached a crescendo about six years ago and in 2014 Congress passed a law that limited studies for navigation channel improvements to a maximum of three years.
Federal politicians have acknowledged their guilt in scooping up money from the Harbour Maintenance Tax – the primary source of revenue for channel improvement and deepening in ports and inland waterways – for use in other federal programmes. To atone for this, they are increasing the amount of the tax that is going to its intended purpose. About $10bn is outstanding.
Says Sean Duffy, executive director of the Big River Coalition, the voice of Mississippi River and tributaries users and industries: “Going back 10 years, it has been estimated that 59% of the major waterways are only at 35% of their authorised draft levels. This is just not acceptable. If the Harbour Maintenance Tax had a zero balance (all the money being used for maintenance), those channels would not have a problem. There has been progress – 10 years ago only 50% of the tax was being allocated and now it is 80%-90%.
“When I first went to deal with Washington," says Mr Duffy, "nobody knew what I was talking about. Now the Harbour Maintenance Tax is a buzzword.”
True cost of works
The Association of American Port Authorities (AAPA) says that $28bn is needed over the next 10 years to fully maintain deep-draft navigation channels and $6bn to modernise the channels. “Additionally, the United States must establish a sustainable system for funding channel maintenance over the long term,” it adds.
For 2018, the total USACE budget for specified construction programmes is $1bn while navigation channel work gets $946m.
As with so much in the US, sources of financing often cause intense debate – another reason for the delay in projects – with politicians joining in. The rule which prevailed until the last 10-15 years whereby government money paid for harbour deepening has now been changed to allow private and non-federal developers to pay for initial costs.
Huge credit for this has to go to Savannah, Georgia, which became fed up with the deadlock on its harbour expansion and sought outside financing. Seattle has gone down the same route for deepening its harbour to 57 feet, making it the deepest in the country. USACE approved the chief engineer’s proposal in June – more than three years after the feasibility study started – and a “detailed design phase” will now begin.
Now, the AAPA notes that confidence in the industry is increasing. Jim Walker, director of Navigation Policy and Legislation at AAPA, says: "Funding for navigation channel improvements and maintenance has been increasing. This has given dredging companies confidence in the US market leading to capital investments in new equipment.” Two new large hopper dredges have begun operations this year – the Ellis Island, owned by Great Lakes Dredge and Dock, and the Magdelan, owned by Weeks Marine.
International prowess
Inevitably, comparisons with international operators come up. Popular opinion is that foreign companies, particularly the Dutch, are significantly more efficient for dredging operations.
Mr Busch says the largest European companies could complete US projects for less than half the project costs and in about a third of the time, and in the past 10 years European companies have invested $15bn in new dredgers, compared with only $1bn in the US.
Mr Duffy has a different perspective. “Other countries do not have the same regulations and concerns as us regarding material disposal and disposal sites. Size is not the only answer. A 35,000 cubic yard capacity of a dredger is too big for a disposal site with 30-foot depth. The question I ask of dredgers is how big their draft is.”
He says project dredging in the US is overly complicated because of a lack of federal funding. “Recent success stories show that states and port authorities are paying for the front-end cost, hoping to recoup some of the cost later from the federal government. Channel maintenance is under the same limitations, but I don’t believe we have hit the level where some of the corps districts are limited by the budget.”
Mr Duffy points out that lack of funding is one of the main reasons for the mismatch between supply and demand of equipment. “It’s hard for a company to convince its board of directors to buy a new dredger costing between $100m and $150m when funding might not be available for a project.”
One port executive, speaking privately, says: “I regularly hear Dutch claims of being able to do twice the production at half the cost of US dredging. The US market is highly competitive, and if these technology claims were true, domestic companies would install the equipment.”
Record projects
Mr Walker takes an upbeat view of the future of US dredging. “This year there are six navigation channel deepening projects underway – the most in over a decade. Navigation channel maintenance is increasing, enabling progress towards proper depth and widths for safe and efficient freight movement. Congress and the Corps continue to pursue opportunities to streamline processes while protecting the environment. These efforts demonstrate good attention to ports and freight movement. “
But there is an element of nervousness in the industry over the White House’s policies – or lack thereof – for dredging and the environment. Says one port executive: “It’s a somewhat tricky situation and people are a little more hesitant. Nothing has really stalled but everyone is waiting and is on edge about what will happen.”
For dredging companies, the future is built around protection. Says Bill Doyle, executive director of the Dredging Contractors of America: “The industry is an integral part of the 500,000 jobs supported by the maritime industry. Investment decisions are reliant on the perceived permanence of the Jones Act – the single, most fundamental domestic maritime law that has enabled the overall US maritime industry to generate $100bn in annual economic output, $30bn in annual employee compensation, $11bn in annual tax revenues, and $46bn in value added.
“I am a big supporter of a strong and vibrant US Merchant Marine,” says Mr Doyle, “of which the US-flag dredging industry plays a vital role. I believe in my companies and their business models of building ships and vessels in US shipyards, registering their vessels in the United States and staffing them with American officers and crew.”
And yet in April, the Wall Street Journal published a scathing editorial opinion that said dredging in the US has become inefficient and behind the times because of protectionism. It seems the sediment is shifting.
[Port Strategy]
Port development Canada: Halifax reveals expansion plans
30/08/2018
The Halifax Port Authority has revealed a plan to expand its South End container terminal to accommodate more mega ships and remain competitive as ships get bigger.
Capacity is needed to berth at least two ultra-class ships, so the port will work with Halterm Container Terminal Ltd from the first quarter of 2019 to temporarily expand its capacity at the South End terminal to berth and service a second ultra-class vessel, said Lane Farguson, communications advisor at the port. Phase one is due to be completed in 2020 and will be paid for by the port, which expects the expansion to cost CAD$35m.
Phase two of the South End development will see expansion to the north as the port explained: “Expanding our infrastructure at the South End Container Terminal will provide the space we need to accommodate the biggest ships, with room for equipment and connections to road and rail.
To handle any increased truck traffic the port plans to work with its partners to explore potential short-term solutions including collecting data through its port operations centre to map container truck flows to avoid peak congestion times. The port stressed that it is currently the only Canadian port on the Atlantic coast with the ability to handle the next generation of vessels calling North America. “If Halifax is unable to accommodate two ultra-class vessels, the Canadian supply chain will increasingly depend on US ports,” it warned.
[Port Strategy]
Port development Malaysia: Government to conduct feasibility study on Carey Island project
30/08/2018
By Vincent Wee
Predictably, the sights of the new Malaysian government’s crackdown on expenditure have now fallen on the Carey Island project, which has been previously linked with Chinese interests.
Malaysian transport minister Anthony Loke was cited in local media as saying the government will conduct a feasibility study on building the port. He said the feasibility study would be carried out by the Port Klang Authority (LPK) from November and was expected to take about a year.
“After the study is done, the findings will be tabled to the Cabinet for a decision whether to offer the job to a concessionaire through open tender or appoint a company based on their capability,” Loke said. He said the study would encompass 16 aspects including marketability, environmental impact assessment and social impact on the local community.
Loke noted that the Carey Island project, which will be the third and largest container terminal in the area involving a land area of 283 ha and which is slated to have massive capacity of 30m teu, will not have an immediate impact on the existing terminals at Northport and Westport as it is meant to be a long term project to meet future needs. Both Northport and Westport in Port Klang will reach their maximum capacities by 2025.
Loke also responded to a previous announcement by the former transport minister Liow Tiong Lai last year that the project was to be undertaken by Chinese investors, by noting that no company from China had stated its commitment to do the job.
[Seatrade Maritime News]
Port development UK: Ro-ro ports ‘catastrophically unprepared for Brexit’
30/08/2018
By Will Waters
UK ro-ro ports such as Dover are “catastrophically unprepared for Brexit” and could face chaos if so-called ‘Rest of the World’ (ROW) rules apply after Brexit to inspection of food imports from the EU, the CEO of the United Kingdom Warehousing Association (UKWA) has warned.
Peter Ward explained that there are no inspection facilities at ro-ro ports such as Dover, nor the time or space to build any ahead of the UK’s planned March 2019 exit from the EU. This could result in unprecedented delays at the port, he said.
“Irrespective of the final form of Brexit – ‘no deal’, ‘hard’ Brexit or ‘soft’ Brexit – we expect an interruption in food supply chains. Market forces will mitigate the risk of delays by holding more stock closer to consumers in the UK, which may be good news for the warehousing industry in the long term, but from March 2019 there is simply not sufficient capacity nor the infrastructure to cope.”
Ward argued that developing the necessary infrastructure will take years and considerable investment, illustrating the point by using as an example a facility at London Gateway, an 19,000 sqm (200,000 sq ft) multi-temperature state-of-the-art purpose-built facility with 22 loading doors and sufficient power to plug in hundreds of reefer containers.
“44% of what we eat comes into Dover from the EU, which is the equivalent of 1,000 trucks per day through the port on ferries and the tunnel,” said Ward. “If we are going to take real control of our borders, how this food is going to be inspected consistent with ROW rules from March 2019 is critical, especially as port of Dover doesn’t have any such facilities as those at London Gateway, nor the necessary plug in points to power temperature-controlled vehicles.
“The only way to keep food cool while waiting for inspection will be to keep diesel engines running, costing more money and impacting badly on the environment.”
Although London Gateway was built for non-EU trade, as a container port it has been designed to meet the requirements of the future. Even so, Peter Ward emphasizes that there is no such thing as “frictionless trade” either at London Gateway or anywhere else. Accordingly, on behalf of the UK warehousing industry, UKWA is calling for urgent action from government to recognize and respond to the challenges ahead.
“We are proposing that the government considers a change of legislation to allow food inspections at inland premises,” Ward said. “Currently inspections must be conducted within the port boundary, but post-Brexit clearly this will be impractical.
“Such a change would bring opportunities for UKWA members and others to adapt existing premises to accommodate inspection facilities and bring online necessary capacity more quickly.”
He acknowledged that given the volumes involved, location of facilities would need to be close to both power supply and a sustainable labour pool, which in turn will trigger other concerns.
“The question is how the trade-off between national planning policy, devolved to local authorities, and resistance of local residents to large warehousing or distribution developments on the doorstep will be balanced against the need to ensure the nation continues to be fed.”
Ward added that UKWA was consulting with government and providing feedback from members on all these issues, “supplying the necessary detail to enable coherent and effective policy to be formulated going forward”. He added: “UKWA is here to help government understand the perspective of the industry on the real impact Brexit is likely to have, particularly on food supply chains.
“Meantime, we are advising our members to prepare for a ‘no-deal’ Brexit and the 300,000 business that currently trade with the EU only to classify goods per UCC (Unified Customs Code), apply for deferment accounts, and find partners and trade association that can help them prepare for the turbulent times ahead.”
At the time of writing, no one at the Port of Dover had responded to questions from Lloyd’s Loading List about the issue. However, as Lloyd’s Loading List reported last week, in the event of a ‘no deal’ Brexit, port sources who have been briefed on UK government thinking expect that the UK will “wave trucks through” UK ferry ports pretty much as they do now, with minimal physical checks, allowing any necessary customs clearances to be handled inland.
The hope is that these steps would avert a congestion crisis at key ro-ro facilities such as Holyhead and Dover, which many in the industry regard as a real risk unless Britain and Brussels come to a workable arrangement on the UK’s departure from the EU. Only 1-2% of inbound lorries currently experience any kind of checks at all, largely to circumvent potential people trafficking or cigarette smuggling, or on the basis of specific intelligence.
The best outcome, most ports industry people believe, would be a negotiated settlement that gives the UK at least the main benefits that flow from EU customs union membership. While there is little apparent enthusiasm for inland clearance, which would probably entail the use of customs agents at cost to the consignee, it would at least avert worst-case scenarios.
Nevertheless, allowing customs clearances to be performed inland does not take into account the increased need for food and phyto-sanitary inspections in the event of a no-deal Brexit, logistics observers note, as highlighted by UKWA CEO Peter Ward’s concerns.
The discussions come after UK Brexit minister Dominic Raab last week launched the first batch of what will eventually be 70-80 so-called technical notes, outlining how the government will deal with a possible no-deal Brexit scenario. Exporters are advised that in the event of a no-deal Brexit, trade would revert to World Trade Organization terms, and it may be easiest for them to hire a customs broker, freight forwarder or logistics provider to take on the red tape.
With the UK expected to take a pragmatic approach in the event of a no-deal Brexit, the immediate border concerns may be greater from the EU side.
[Lloyd’s Loading List]
Port development Brazil: Port of Rotterdam Authority to buy 30% stake in the Port of Pecém
30/08/2018
Port of Rotterdam Authority’s shareholders, the Municipality of Rotterdam and the Dutch Ministry of Finance, have approved the port’s participation in the Port of Pecém in Northeast Brazil. The participation involves an investment of some €75M for a 30% stake.
The Port of Rotterdam Authority (HbR) says it will have joint control of strategic decisions and positions at Executive Board, Supervisory Board and management level. HbR and Ceará State are expected to sign the decision next month, and the following months will be used to further finalise the participation.
Allard Castelein, HBR’s CEO, said: ‘Our participation in the Brazilian Port of Pecém is promising for all parties. We have been working as adviser with Pecém for several years. This investment will further intensify the partnership. We will be working with Ceará State to ensure that Pecém expands to become the future logistics and commercial hub of Northeast Brazil."
HbR is already involved in Porto Central, a greenfield port still under development in Espírito Santo State.
Pecém is a rapidly-growing port. Throughput has grown by an average of 22% per year over the past 10 years and last year came to 16 Mt. Economic growth (national and international) and related market demand will enable the port to continue to develop towards a throughput of 45 Mt/year by 2030, said HbR. In addition, Pecém is an attractive proposition because most of the required infrastructure (breakwaters, berths, land, etc) is already available."
[World Cargo News]
Maersk Tankers turns to wind power to cut soaring fuel costs
30/08/2018
By Costas Paris
Danish shipping company is testing high-tech sails, expects 10% in savings.
The Maersk Pelican is the trial vessel that will test Maersk Tankers’s new sail technology. Credit: Maersk Tankers, Norsepower
Marine fuel prices are soaring and the shipping industry is looking for ways to harness ocean winds to power oceangoing vessels. Danish Maersk Tankers said Thursday it has installed 100-foot-tall rotating cylinders on one of its product tankers, adding devices that are effectively high-tech sails that could cut the vessel’s fuel
bill by up to 10%. If the system proves out during testing, Maersk could use the technology on dozens of ships in its 164-tanker fleet.
The operation is the latest attempt to bring together modern oceangoing vessels with maritime’s oldest and most basic technology — sails that harness wind power. In the 1980s, French ocean explorer Jacques-Yves Cousteau commissioned the Alcyone, a vessel named after the daughter of the wind in Greek mythology, which used turbo-sails that provided thrust in the direction of travel along with the engines.
Shipping executives said previous efforts didn’t catch on with operators because either the costs of such technologies were too high or tests didn’t yield the expected fuel savings. But modern, lightweight and relatively cheap rotating sails show more promise, they said.
The cylinders on the Maersk tanker are made with composite materials by Finland-based Norsepower Oy Ltd., and cost €1 million to €2 million ($1.2 million to $2.3 million) to fit on a vessel, depending on the size of the ship. The technology is based on what is known as the Magnus effect, in which a spinning object drags air faster around one side, creating a difference in pressure that pushes the vessel in the direction of the lower-pressure side.
A.P. Moeller-Maersk A/S, the umbrella group that includes container shipping giant Maersk Line, sold Maersk Tankers to its controlling shareholder Maersk Holding last year.
Maersk Tankers didn’t disclose its annual energy bill. Maersk Line spent around $3.4 billion on fuel last year for its fleet of around 800 vessels. The carrier expects its annual cost to increase by roughly $2 billion in 2020, when it starts using cleaner fuels to comply with stricter environmental rules. Marine fuel prices generally have increased about 30% this year from a year ago.
“We have been taking incremental steps to cut our energy bill for the past 15 years, but this could prove a game changer,” said Tommy Thomassen, Maersk Tankers’ chief technical officer. “Fuel makes up approximately 60% of our total cost and this technology has a significant potential to cut fuel consumption by 7% to 10% on the ships that it will be installed."
Mr. Thomassen said tests so far are promising, and if the savings are proven during the trial runs with the Maersk Pelican tanker, the spinning cylinders could be installed on about 80 of its large and medium-size product tankers.
The Pelican will sail in the next few days. The sails have been used since 2014 on a ferry operated by Dutch shipping firm Bore Ltd. and were installed on a Viking Line cruise ship in April. Bore Vice President Jorgen Mansnerus has said the results were better than expected.
“There is a high interest in this technology,” said Tuomas Riski, Norsepower’s chief executive. “As the [technology] gets better, the cost will fall and there is the potential to make the rotor sails a standard feature for certain types of ships like tankers or dry bulk carriers.”
The Maersk project is a joint venture with Norsepower, Royal Dutch Shelland the U.K.’s Energy Technologies Institute, an industry group focused on alternative-fuel use.
Other shipping operators are also looking for ways to cut fuel costs. Food and commodities giant Cargill Inc., for instance, has equipped one chartered dry bulk carrier with a 3,444-square-foot kite made of artificial fibers to harness wind power.
Maersk Line and Maersk Tankers also have started using special paints on ship hulls to cut down on algae and other microorganisms that increase drag.
[The Wall Street Journal]
Bunkering: Ship grounds after using contaminated bunkers
29/08/2018
A ship grounded as a direct result from the use of contaminated bunkers, marine insurer Standard Club informed.
An investigation into the incident has been launched, Standard Club’s representative told World Maritime News. Once the investigation is concluded, more details will be available.
The issues with contaminated bunker supplies in the Houston area earlier this year continue and have begun to spread worldwide. At present, the source and magnitude of the contaminated bunkers has not been satisfactorily identified and the number of cases is still increasing. The club is presently dealing with a number of cases, but the issue is reported to be impacting over 150 cases worldwide, with varying levels of severity.
The main contaminants are phenol and styrene which cannot be identified from standard tests on the bunker sample under ISO 8217, with samples being confirmed as ‘in specification’ despite phenols and styrene contaminants being present. Multidimensional Gas Chromatography – Mass Spectrometry (GCMS) testing is required to identify and quantify these types of contaminants, but has to be requested as an additional set of tests.
As explained, the nature of these particular contaminants leads to very sticky, waxy like deposits which have actually resulted in main and auxiliary engines’ fuel pumps seizing, in addition to blocked heaters, purifiers, filters and excessive sludge build up. If contaminated bunkers are identified as having been delivered onboard, it is necessary to minimize their effects wherever possible, according to the Standard Club.
Bunkers should be chemically treated to bring them back within specification, by the use of additives. Both owners and charterers will need to ensure that there is alternative fuel supply available onboard to consume during the interim period whilst looking for the best option to remove/offload the affected bunkers ashore.
Adequate cleaning of any tanks or pipelines that held the contaminated bunkers prior to discharge should be undertaken to ensure that there is no cross-contamination of future stemmed bunkers, the club said.
Considering the potential limitations/restrictions presently existing in respect to GCMS testing, owners and charterers are advised to implement best practices in line with the required procedures, to limit their exposure to receiving and subsequently consuming contaminated bunkers.
[World Maritime News]
Shipping emissions: Oil seen getting $4/barrel boost on tough new ship-fuel rules
30/08/2018
By Alex Longley and Irene García Pérez
New regulations to curb pollution from the world’s shipping fleet could lift crude prices by $4/bbl when the measures come into effect in 2020, according to a Bloomberg survey of 13 oil industry analysts.
That’s because the changes from the International Maritime Organization, a United Nations agency, are likely to stoke refiners’ demand for lower-sulfur crude while prompting some plants to run as hard as possible to maximize profits.
“It will be a Wild West leading up to the implementation phase,” said Michael Poulsen, an analyst at A/S Global Risk Management in Denmark. “The market anticipates that we will see a lot of weird movements and funny pricing around the end of 2019.”
In just 16 months, the IMO’s rules to cap the sulfur content of ship fuel are set to create a once-in-a-generation upheaval in the oil market, as the regulator seeks to limit emissions of a pollutant that has been linked to asthma and acid rain. The global shipping fleet is reliant on refiners to supply IMO-compliant fuels, and it’s not clear there will be enough to go around. Prices for low-sulfur products are already climbing, while those for high-sulfur grades are collapsing.
A similar effect is expected in the crude markets. Banks including Societe Generale and Morgan Stanley have said the regulations will likely lift crude benchmarks Brent and West Texas Intermediate, which have a relatively low sulfur content. Brent’s premium to higher-sulfur Dubai crude, the Middle East benchmark, has already swelled to more than $4/bbl in 2020.
$128 billion
Bloomberg asked analysts to estimate the likely price effects of the regulatory change. Crude prices are forecast to rise by $4/bbl in 2020 due to the IMO rules specifically, according to the median estimate of 13 responses that ranged from a $2 drop to a $20 increase per bbl.
“Of our $90/bbl Brent price forecast by early 2020, we’d argue that $5-$10/bbl will come from IMO 2020,” said Morgan Stanley analyst Martijn Rats. The shift in demand to less-polluting oil products will mean that “without investing in more upgrading units, refiners will simply need to process more crude,” he said.
By 2020, global crude oil demand is set to rise by 2% to 87.7 MMbpd, according to a forecast from the Paris-based International Energy Agency in March. If crude prices surge by $4 a barrel due to the IMO rules, that would amount to an increase of about $128 billion in the world’s oil bill by 2020, Bloomberg calculations show. Brent crude, the global benchmark, is now trading near $77.50/bbl.
Ship scrubbers
While the majority of those surveyed agreed the rules will probably have a bullish effect on crude, some were more reticent. That’s because ships have the option of installing so-called scrubbers allowing them to keep burning high-sulfur fuels while limiting emissions of the pollutant.
“More and more ships will install scrubbers and therefore reduce the demand for extra barrels,” said HSH Nordbank AG analyst Jan Edelmann, who saw no impact on crude prices from the regulations. “We believe that there is sufficient light-sweet crude available from shale to meet extra demand from IMO 2020.”
Companies that make scrubbers, including Wartsila Oyj and Alfa Laval AB, reported bumper orders in their most recent earnings. However, the vast majority of the world’s commercial fleet -- some 93,000 vessels -- will not have installed scrubbers, which can cost millions of dollars, by 2020.
The IMO’s regulations are likely to ripple through industries that purchase fuel, such as airlines and power producers. Because of this broad reach, some analysts contacted by Bloomberg said they couldn’t yet forecast crude prices for 2020 or the effect of the IMO rule change specifically.
Gasoil boom
The brunt of the regulatory shift is likely to be felt in refined-product markets, as shippers abandon high-sulfur fuel oil in favor of cleaner alternatives, like gasoil or diesel-like fuel that can be blended into IMO-compliant ship propellant. Benchmark gasoil prices in Europe are set to rise by about $17/bbl by 2020, according to the median estimate from nine analysts who provided figures on the fuel.
The strength in oil product prices may help to lift crude, too. Nine of 13 respondents said the IMO regulations will be positive for refining margins. Rising profits would encourage refineries to boost crude purchases, potentially lifting the feedstock’s price.
“We believe the extraordinary strength in distillate cracks will cause refiners to run as hard as they can,” Societe Generale SA analysts including Mark Keenan wrote in a report earlier this month. “This very strong crude demand will add $5 to sweet crude prices."
[Bloomberg]
Shipbreaking: Aqualis Offshore and Skuld Maritime Agency under investigation in scrapping
case
29/08/2018
Norwegian press DN revealed this summer that Aqualis Offshore and insurance company Skuld Maritime Agency are under investigation for their involvement in the attempt to illegally export the Harrier to Pakistan for scrapping.
Aqualis Offshore issued two certificates for the ship – one for a break-up voyage to Pakistan, another for a voyage to Oman – and it is suspected that the latter was issued to dupe Norwegian authorities in order to circumvent the European waste export ban. Skuld Maritime Agency was involved in issuing the last-voyage insurance for the vessel and is therefore being investigated for having aided the illegal export.
The former and current owners of the ship, Georg Eide and cash buyer Wirana, are also targeted in the ongoing investigations, and risk being held criminally liable for their attempt to illegally export the Harrier.
“It is encouraging to see authorities enforce the law on ships destined for recycling. Following also the Seatrade judgement in the Netherlands, the Harrier case is yet another warning to ship owners that selling a vessel for the highest price to a cash buyer is dirty business”, says Ingvild Jenssen, Director of NGO Shipbreaking Platform.
Another owner, Herbjorn Hansson of Nordic American Tankers, is under the spotlight in Norway for having sold eight vessels for beaching. Reactions to these revelations have been strong with the Norwegian Oil Pension Fund as well as the banks DNB and Nordea condemning beaching as a method for breaking ships.
The Norwegian Environment Agency urges ship owners to use facilities that have been approved by the EU for the recycling of their vessels, regardless of the flag of their ship. Its director, Ellen Hambro, states that it is unacceptable to endanger workers’ health and pollute the environment in developing countries for the sake of higher profits.
“We support the statements made by the Norwegian authorities and call also upon other stakeholders in shipping, such as insures and financers, to play their part in putting an end to the dirty and dangerous practice of beaching. Safer and cleaner alternatives exist and ship owners must be pushed towards using these facilities”, Ingvild Jenssen says.
Yesterday the Harrier arrived in Aliaga, Turkey, where it will be recycled in line with the European waste laws. Waste Management company Norsk Gjennvinning will be supervising the process.
[NGO Shipbreaking Platform]
Casualties: Mystery of the cargo ships that sink when their cargo suddenly liquefies
29/08/2018 By Susan Gourvenec, Professor of Offshore Geotechnical Engineering, University of Southampton Think of a dangerous cargo and toxic waste or explosives might come to mind. But granular cargoes such as crushed ore and mineral sands are responsible for the loss of numerous ships every year. On average, ten “solid bulk cargo” carriers have been lost at sea each year for the last decade.
Solid bulk cargoes – defined as granular materials loaded directly into a ship’s hold – can suddenly turn from a solid state into a liquid state, a process known as liquefaction. And this can be disastrous for any ship carrying them – and their crew.
In 2015, the 56,000-tonne bulk carrier Bulk Jupiter rapidly sunk around 300km south-west of Vietnam, with only one of its 19 crew surviving. This prompted warnings from the International Maritime Organisation about the possible liquefaction of the relatively new solid bulk cargo bauxite (an aluminium ore).
A lot is known about the physics of the liquefaction of granular materials from geotechnical and earthquake engineering. The vigorous shaking of the earth causes pressure in the ground water to increase to such a level that the soil “liquefies”. Yet despite our understanding of this phenomenon, and the guidelines in place to prevent it occurring, it is still causing ships to sink and taking their crew with them.
Solid bulk cargoes
Solid bulk cargoes are typically “two-phase” materials as they contain water between the solid particles. When the particles can touch, the friction between them makes the material act like a solid (even though there is liquid present). But when the water pressure rises, these inter- particle forces reduce and the strength of the material decreases. When the friction is reduced to zero, the material acts like a liquid (even though the solid particles are still present).
A solid bulk cargo that is apparently stable on the quayside can liquefy because pressures in the water between the particles build up as it is loaded onto the ship. This is especially likely if, as is common practice, the cargo is loaded with a conveyor belt from the quayside into the hold, which can involve a fall of significant height. The vibration and motion of the ship from the engine and the sea during the voyage can also increase the water pressure and lead to liquefaction of the cargo.
When a solid bulk cargo liquefies, it can shift or slosh inside a ship’s hold, making the vessel less stable. A liquefied cargo can shift completely to one side of the hold. If it regains its strength and reverts to a solid state, the cargo will remain in the shifted position, causing the ship to permanently tilt or “list” in the water. The cargo can then liquefy again and shift further, increasing the angle of list.
At some point, the angle of list becomes so great that water enters the hull through the hatch covers, or the vessel is no longer stable enough to recover from the rolling motion caused by the waves. Water can also move from within the cargo to its surface as a result of liquefaction and subsequent sloshing of this free water can further impact the vessel’s stability. Unless the
The International Maritime Organisation (IMO) has codes governing how much moisture is allowed in solid bulk cargo in order to prevent liquefaction. So why does it still happen?
The technical answer is that the existing guidance on stowing and shipping solid bulk cargoes is too simplistic. Liquefaction potential depends not just on how much moisture is in a bulk cargo but also other material characteristics, such as the particle size distribution, the ratio of the volume of solid particles to water and the relative density of the cargo, as well as the method of loading and the motions of the vessel during the voyage. The production and transport of new materials, such as bauxite, and increased processing of traditional ores before they are transported, means more cargo is being carried whose material behaviour is not well understood. This increases the risk of cargo liquefaction.
Commercial agendas also play a role. For example, pressure to load vessels quickly leads to more hard loading even though it risks raising the water pressure in the cargoes. And pressure to deliver the same tonnage of cargo as was loaded may discourage the crew of the vessel draining cargoes during the voyage.
What’s the solution?
To tackle these problems, the shipping industry needs to better understand the material behaviour of solid bulk cargoes now being transported and prescribe appropriate testing. New technology could help. Sensors in a ship’s hold could monitor the water pressure of the bulk cargo. Or the surface of the cargo could be monitored, for example using lasers, to identify any changes in its position.
The challenge is developing a technology that is cheap enough, quick to install and robust enough to survive loading and unloading of the cargo. If these challenges can be overcome, combining data on the water pressure and movement of the cargo with information on the weather and the ship’s movements could produce a real-time warning of whether the cargo was about to liquefy.
The crew could then act to prevent the water pressure in the cargo rising too much, for example, by draining water from the cargo holds (to reduce water pressure) or changing course of the vessel to avoid particularly bad weather (to reduce ship motions). Or if that were not possible, they could evacuate the vessel. In this way, this phenomenon of solid bulk cargo liquefaction could be overcome, and fewer ships and crew would be lost at sea.
[The Conversation]
Port development Australia: Melbourne is looking for tenants in eight separate facilities
29/08/2018
By Nick Lenaghan
The Port of Melbourne, now owned by a QIC-led consortium, has launched a massive leasing campaign with 165,000 square metres of space available across eight facilities.
The properties range from 5500sq m to 68,600sq m and include office and warehouse space, hard-stand areas and wharves. In a $9.7 billion deal two years ago, the Port of Melbourne was taken private by a consortium including QIC and its partners, the Future Fund, international firm Global Infrastructure Partners and Canada's Borealis.
The ownership vehicle has been busy working over its financing in recent months, refinancing more than
one-third of its debt in the United States' private placement debt market. Now it's busy on the ground. Port of Melbourne chief executive Brendan Bourke said the port's 50-year lease created certainty in planning and investment for prospective tenants.
“As private manager of the port, Port of Melbourne is aligned with the commercial interests of our tenants and customers to grow the port and deliver least-cost infrastructure to ensure a sustainable competitive supply chain,” he said. “Port of Melbourne is committed to grow volumes with a focus on value creation through continued investment for future capacity.”
Key drawcard
The Port has appointed CBRE to broker the leasing deals for the eight properties. "We expect to field interest from local, national and international companies, who can capitalise on the infrastructure, services and proximity of the port to significantly reduce business operating costs by locating at a significant point in the supply chain," said CBRE's Guy Naselli.
Total trade was up 8.5 per cent for the 2017-18 financial year
"The opportunity to secure long-term leases of up to 48 years will be a key drawcard. This tenure assists occupiers who require a degree of specialisation or a new building and provides the option to consider a purpose-built facility."
Christine Miller, who is CBRE's Pacific director for its supply chain advisory & transaction services business, said the port's growth was also a drawcard, with total trade up 8.5 per cent for the 2017-18 financial year. That is underpinned by population growth, which in turn drives construction activity especially in residential development along with firm employment. As a result, those factors propel port activity and mean occupiers need access to efficient supply chains, Ms Miller said.
[Financial Review]
Port development Myanmar: New Sittwe port proposed to facilitate trade with Bangladesh
29/08/2018
By Chan Mya Htwe
To facilitate trade in Rakhine State, U Tin Aung Oo, chair of Rakhine State Federation of Chamber of Commerce and Industries, last week proposed the construction of a new port in Sittwe during a meeting with the vice president.
He said the port, which should be able to handle vessels of up to 20,000 tonnes, could be constructed under a Public Private Partnership (PPP). The proposal was met with approval from the government.
The proposal comes after a surge in the volume of goods handled in Sittwe over the past five years. According to statistics from the Ministry of Transport and Communication, the volume of cargo handled at Sittwe rose to some 350,000 tonnes in 2017-18 from 200,000 tonnes in 2013-14. However, the flow of goods bound for Yangon from Sittwe is just 37,000 tonnes, which is around one tenth of the volume at Sittwe.
The Sittwe port is the main port handling goods traded between Myanmar and Bangladesh. Over the past five years, goods exported to Bangladesh have doubled to 20,000 tonnes. Port capacity at Sittwe however, has not increased to handle the higher volumes.
There are currently just two ports in Sittwe: state-owned Hpaungdawgyi Port and Shwemingan Port, which was built by the Asia Development Bank. Both ports have the capacity to handle a single 1000-tonne ship each. Meanwhile, existing infrastructure at the ports require a period of 10 days to load each vessel.
Currently, the Sittwe ports handle around 15 ships per month. “As the current port capacity is so limited, cargo is also being unloaded onto barges in the sea. However, this is a slow process which delays the flow of cargo and raises costs,” said U Tin Aung Oo.
In addition, the ports are unable to handle the weight of large trucks, so smaller vehicles are used to transport the goods received, which drives costs up even further. “If we can build a third and larger port able to handle ships of up to 20,000 tonnes, we would save on time and costs,” he added.
U Tin Aung Oo’s proposal received a positive response. “A new port which can handle bigger vessels will solve the current bottleneck in Rakhine. We are ready to help in terms of offering technology and other necessary resources,” said U Thant Sin Maung, Minister of Transport and Communication.
He warned though that the port should be constructed in the right location so as not to interfere with the ongoing development of the Kaladan Multi-Modal Transit Transport Project, which is expected to connect the eastern Indian seaport of Kolkata with Sittwe. In Myanmar, it will then link Sittwe seaport to Paletwa in Chin State via the Kaladan river. “The Kaladan project involves huge investments so we must be careful to choose the right location for the new port so as not to compete with the Kaladan ports,” U Thant Sin Maung said.
So far, the Myanmar Port Authority has provided three locations by the Kaladan river where feasibility studies for the construction of a new port of the suggested 20,000 tonne capacity can be conducted.
[Myanmar Times]
Port development Egypt: China Harbour Engineering Company constructs new terminal in Sokhna Port
29/08/2018
By Shailaja A. Lakshmi
China Harbour Engineering Company (CHEC) began the main phase of the construction of a new terminal basin in Sokhna Port south of the Suez Canal northeast of Egypt, said he state media Xinhua.
According to the report, the project was assigned to CHEC by the Sokhna branch of the Emirati corporation DP World, the main investor and container operator in the port located at the Gulf of Suez. CHEC sources said it will deliver the "Basin 2" project in fewer than 12 months ahead of the deadline.
The report quoted Chen Shuang, deputy director of CHEC marketing department as saying that the launching ceremony event held on Tuesday (August 29) was to show their determination to finish the project quickly and with high quality.
Sokhna Port is located within the Suez Canal Economic Zone (SCZone), a main economic region in Egypt whose development is one of the country's mega projects to attract foreign investments for further economic growth.
[MarineLink]
Port development India: Plans for 362 km railway to improve connections with Jawaharlal
Nehru Port
29/08/2018 By Joe Quirke A 362 km railway line is being planned for west-central India to link the country’s largest container port with the Manmad in the state of Maharashtra, and Indore, the state capital of Madhya Pradesh.
At present, cargo arriving at Jawaharlal Nehru Port has to follow a circuitous route to get to major population centres. The proposed Indore–Manmad line will cut 171km off the current route. A memorandum of understanding for the development has been signed by the Jawaharlal Nehru Port Trust, India’s Ministry of Shipping, the Ministry of Railways, and the governments of Maharashtra and Madhya Pradesh.
A joint venture company will be created to carry out construction. It will be led by the port trust, with a 55% stake; the governments of Maharashtra and Madhya Pradesh will have a 15% share each.
Source: India’s Ministry of Shipping
The line will pass through the planned Delhi–Mumbai Industrial Corridor, including the nodes of Igatpuri, Nashik and Sinnar, Pune and Khed, and Dhule and Nardana. During the first decade of service, the railway is expected to create over $2bn of net profit. It is due to be operational within six years.
[Global Construction Review]
Port development Germany: Hamburg dredging to offer restored competitiveness
28/08/2018 By Thomas Cullen The Port of Hamburg announced last week that it has received permission from relevant authorities to start dredging the approaches to its terminals. This decision is key to the future viability of Hamburg as a leading port in the region.
Hamburg sits just over 100 km from the mouth of the Elbe river, making it a tidal port but with a river approach. The effect is that Hamburg’s ability to accept the very largest vessels varies throughout the day with the level of the tide. This complicates the handling of large vessels substantially. The new dredging project will deepen the approach to a minimum of 13.5 m, which ought to mean that the very largest vessels can enter or leave the port at any time.
The issue of dredging the Elbe has been politically controversial for 20 years. Environmentalists complain that the level of silt displacement damages the river and local water drainage system.
The inability of Hamburg to take the very largest vessels has been crippling to the port’s ambitions. At one time a rival to Rotterdam as the largest container port in Europe, it has now fallen behind Antwerp in terms of numbers of containers handled despite the Belgian port also being on a river location.
At the beginning of this century it was assumed that Hamburg would benefit from the growth of Central European and Baltic economies, yet the most recent half-year results saw a fall in container volumes of 2.7%, a major element of which was a loss of Baltic transhipment traffic. In contrast, both Antwerp and Rotterdam have seen consistent single figure percentage increases over the past several years. In the case of Rotterdam, the opening of Maasvlatke 2 has delivered a dedicated terminal for the largest vessels.
Indeed, such has been the growth of the Dutch and Belgian ports that land-side infrastructure is becoming congested. This offers hope for Hamburg’s future prospects. At the end of last week, THE Alliance announced that it would shift its port of call for transatlantic services to Hamburg, albeit at the expense of neighbouring German port Bremerhaven. It will be interesting to see if Hamburg can regain business from Antwerp and Rotterdam as well.
[Transport Intelligence]
Oil & gas exploration Brazil: Norway’s Equinor to invest $15 billion
29/08/2018 By Nerijus Adomaitis Norway’s Equinor will invest up to $15 billion in Brazil over the next 12 years to develop oil, gas and renewable energy sources, the company said on Wednesday.
Coinciding with an expected drop in output from many aging oilfields off the cost of Norway, Brazil is expected to become a core region for Equinor as the firm takes advantage of the country’s opening in recent years to more foreign investment.
The company plans to raise its Brazilian output to between 300,000 and 500,000 barrels of oil equivalent per day (boepd) by 2030, from 90,000 boepd today by developing new fields, including the giant Carcara discovery.
“Brazil is a perfect match for Equinor with our operational, technical competence that we have built over decades on the Norwegian continental shelf,” said Anders Opedal, Equinor’s head of operations in the South American country.
The Norwegian oil and gas company has already invested around $10 billion in Brazil since 2001, acquiring stakes in a variety of discoveries and fields.
Carcara, estimated to hold similar volumes of oil as Norway’s 2.2 billion-3.2 billion barrels Johan Sverdrup discovery, is expected to start production in 2023-24, making it the first time a foreign firm operates a so-called pre-salt field.
“We call Carcara our new Johan Sverdrup ... Our portfolio in Brazil will have high value, we see very good break-evens,” Opedal said, referring to the oil price levels at which Equinor expects to earn a profit.
The Equinor-operated Peregrino II development is on track to start production at the end of 2020, with its break-even price reduced to below $40 a barrel versus the original estimate of $70, he added.
Equinor last year took a 25 percent stake in the Roncador field, aiming to boost output by around 500 million barrels over the lifetime of production, equivalent to the size of Equinor’s Johan Castberg field in the Barents Sea.
The Norwegian company now plans a multi-year drilling campaign to firm up its Brazilian resources, exploration chief Tim Dodson told Reuters on the sidelines of an energy conference.
“You need to go 30-40 years back in Norway to see the same opportunities ... We are talking about giant discoveries with standalone installations. There’s still huge upside remaining,” he said of the outlook for Brazil’s oil production.
The company also said it would seek more opportunities to invest in solar power in Brazil after making a first investment in the Apodi project last year, and will seek to supply natural gas to the local market.
[Reuters]
Oil & gas exploration Brazil: Plowing $8 billion into mature basin could boost oil output
28/08/2018 Investing $8 billion in Brazil’s waning offshore Campos Basin could boost its oil production by 230,000 barrels of oil equivalent per day (boepd) by 2025, consultancy Wood Mackenzie said in a report on Tuesday.
Oil majors have already plowed billions into Brazil, now Latin America’s top producer, to lock in stakes in its pre-salt offshore oil play, where billions of barrels of oil are trapped beneath a thick layer of salt under the ocean floor.
Meanwhile, oil and gas production in the Campos Basin, where activity began about forty years ago, has fallen by a third over the last seven years to 1.3 million boepd, raising the specter of hefty outlays to close down operations.
“Campos Basin is still a cash cow for Petrobras,” said Luiz Hayum who authored the report.
Although output is declining, Brazil’s state-controlled oil company Petroleo Brasileiro - the world’s most indebted oil company - invests very little there, which means the basin is a healthy source of free cash flow, he said. “This is not sustainable for a long time. Without receiving this additional investment, 32 platforms would cease production by 2025.”
Some $8 billion are needed to decommission those platforms and related infrastructure in the basin from 2018 to 2025, Wood Mackenzie forecasts. But redirecting that money to boosting output instead could add 230,000 boepd to production by 2025, postpone 60 percent of the decommissioning costs until after 2030 and add $3 billion in royalty payments to the government, the consultancy said.
Under a more optimistic scenario, where Brazil boosts its recovery factor in the basin to levels seen in the Gulf of Mexico and the North Sea, 5 billion barrels of additional oil could be recovered, it estimates.
Petrobras has been seeking outside investment to boost output from mature fields, as it focuses its own limited capital investment budget on its promising pre-salt holdings. Last year, Norway’s Equinor, formerly Statoil, paid up to $2.9 billion for a 25 percent stake in Petrobras’ Roncador, part of a bid to boost oil recovery in one of Brazil’s largest fields in the Campos basin.
Reuters reported in July that Petrobras entered exclusive talks to sell two shallow water mature oil clusters in Campos to a group backed by EIG Global Energy Partners, in a deal said to be worth some $1 billion.
[Reuters]
Oil & gas shipping: Costs melt as LNG traffic picks up in the Arctic circle
28/08/2018 By Jeremy Hodge, Anna Shiryaevskaya and Dina Khrennikova A new trade route for energy supplies is opening up north of the Arctic Circle as some of the warmest temperatures on record shrink ice caps that used to lock ships out of the area.
This year is likely to rank among the top 10 for the amount of sea ice melting in the Arctic Ocean after heat waves across the northern hemisphere this summer. While that’s alarming to environmentalists concerned about global warming, ship owners carrying liquefied natural gas and other goods see it as an opportunity.
Their cargoes have traversed the region for the first time this year without icebreakers, shaving days off shipping times and unlocking supplies from difficult-to-reach fields in Siberia.
Teekay’s M/V Eduard Toll is the fourth of 15 Arctic LNG carriers being built for the Yamal LNG project and Teekay’s first of six LNG Carrier Newbuildings. Photo via Teekay More navigable waters are a boost for Russian President Vladimir Putin’s effort to expand his nation’s reach in the gas market and for energy companies such as Total SA and Novatek PJSC, which are leading Arctic developments. They also help reduce shipping costs for LNG, benefiting buyers and traders of the fuel from PetroChina Co. to Gunvor Group Ltd.
“There is a growth trend for volumes transported via the Northern Sea Route this year,” said Sergei Balmasov, head of the Arctic Logistics Information Office, a consultancy in Murmansk, Russia. “The reason is an increase in LNG exports.”
Arctic shipping milestone
While shorter shipping journeys reduce emissions, environmentalists are concerned that more traffic through the Arctic will add to the amount of black carbon—particles of pure carbon— settling in the snow from tanker smokestacks. When that soot darkens the surface of the ice, it speeds up the warming process by absorbing more of the Sun’s energy. And with the shipping season through the Arctic starting earlier and ending later, tankers will spend more time in the area and spew more of their pollution onto the ice. Turbulent weather in the area also churns the seas, making it almost impossible to clean up anything that’s spilled. The International Maritime Organization is considering rules that would ban burning heavy fuel oil in Arctic waters, extending restrictions already in place in the Antarctic.
“It’s a major concern for us because as the ice melts we are seeing more and more shipping,” said Sian Prior, lead adviser for the Clean Arctic Alliance, an environmental group.
Scientists are seeing a rapid change in the Arctic. The Bering Sea between Alaska and Russia lost about half its ice coverage during a two-week period in February, while the most northern weather station in Greenland recorded temperatures above freezing for 60 hours that month. The previous record was 16 hours by the end of April 2011. The mercury topped an unprecedented 30 degrees Celsius (86 degrees Fahrenheit) north of the Arctic Circle on July 30 in Banak, Norway.
Ice begins melting in the Arctic as spring approaches in the northern hemisphere, and then it usually starts building again toward the end of September as the days grow shorter and cooler. A total of 5.7 million square kilometers (2.2 million square miles) of ice covered the Arctic in July, according to the Colorado-based National Snow & Ice Data Center. Through the first two weeks of August, ice extent declined by 65,000 square kilometers each day, according to the NSIDC.
“The ice has been retreating by about 10 percent every decade during the last 30 years,” said Miguel Angel Morales Maqueda, senior lecturer in Oceanography at Newcastle University in northern England. “There is no other known explanation than climatic change. If it isn’t climactic change, then we don’t know what it is.”
Arctic expansion
This season is likely headed for the the ninth biggest retreat since satellite measurements began, not as extreme as bigger melting seasons in 2012 and 2007, according to Julienne Stroeve, Professor of Polar Observation & Modelling, University College London.
“The total ice extent loss is being slowed by winds pushing the ice southwards,” Stroeve said in a message sent from an Arctic research trip. “We likely still have a month of sea ice retreat. The ocean is still warm enough to melt some ice even if air temperatures cool.”
LNG exporters are taking advantage of the open waters, most notably around the Yamal LNG gas liquefaction plant in northern Siberia. The project owned by Total, Novatek and their Chinese partners has custom-built ARC 7 tankers rugged enough to cut through whatever ice remains in the area. That enables them to sail without help from icebreakers west to Europe year-round and east to Asia during the summer months. In the coming years, more routes will open for ships to sail without an icebreaker.
The Yamal venture’s Christophe de Margerie was the world’s first ice-breaking LNG tanker built and collected Yamal’s first cargo to make the the trip westward through the Northern Sea Route.
In early 2018 though, the Eduard Toll, became the first LNG tanker to ever use the full Northern Sea Route in the winter. It traveled from a South Korean shipyard to Sabetta and collected a cargo there from the Yamal LNG plant, then delivered it to France. That shaved about 3,000 nautical miles off the traditional route through the Suez Canal.
In July China received two cargoes from Yamal from the first LNG ships to cross the Arctic without help from ice breakers. The net voyage time from the port of Sabetta through the Northern Sea Route to the destination the Chinese port of Jiangsu Rudong was completed in 19 days, compared with 35 days for the traditional eastern route via the Suez Canal and the Strait of Malacca.
Routes like that may save Yamal $46 million in shipping costs for the remainder of the year, those savings could quadruple by 2023, Bloomberg NEF said in a note.
Melting costs
Traffic is picking up. The Northern Sea Route saw 9.7 million tons of cargo shipped through it in 2017, according to the Russian Federal Agency for Maritime and River Transport. There were 615 voyages along the Northern Sea Route this year through July 15, about the same as in 2017, said Balmasov at Arctic Logistics. The Russian government is targeting cargo traffic through that route totaling 80 million tons by 2024.
“The main difference to 2017 is LNG deliveries from the port of Sabetta,” Balmasov said. “Our data show that as of early July, 34 tankers were dispatched from Sabetta towards European ports, and one voyage was east-bound.” Since then, two more ships have moved from Yamal to Asian markets in the east, though the iciest part of the Northern Sea Route.
[Bloomberg]
Railways Mozambique: Construction of US$2.4 billion Tete - Quelimane line is a priority for
2019
28/08/2018 The Mozambican Ministry of Transport and Communication (MTC) announced that it intends to make it feasible to build the Chitima-Macuse Railway between the provinces of Tete and Zambézia, according to daily newspaper O País. The deputy minister of Transport and Communications of Mozambique said that the government intends to make the construction of the Chitima – Macuse Railway between the provinces of Tete and Zambézia feasible in 2019.
Manuela Rebelo said in a meeting of ministry officials that “Rehabilitating the Machipanda and Ressano Garcia railways, starting the construction of the Tete-Macuse railway and its port … making Nacala international airport feasible are some of the actions planned for 2019.”
The Mozambican government in 2013 granted the concession (construction, operation and other operations) of the port and the railroad of Macuse, 35 kilometres north of Quelimane, capital of the central province of Zambézia, to Italthai Engineering (which owns 60% of Thai Mozambique Logistics) of Thailand.
The railway line that will connect Macuse to the Moatize and Chitima mines, with a length of 620 kilometres, is budgeted at US$2 billion and was designed to allow coal to be transported from Tete province, in the interior of Mozambique.
The Macuse deep water port will have capacity to receive large ships that will mainly transport coal and serve Mozambique’s neighbouring countries that have no direct access to the sea.
The work costing about US$2.40 billion will be carried out by a consortium involving construction company China Machinery Engineering and Portugal’s Mota-Engil and is expected to be completed in 2021.
[Macauhub]
Belt & Road Initiative: Xi Not setting up “China Club”
28/08/2018 China's President Xi Jinping has said that the Belt and Road Initiative does not aim at a geopolitical or military alliance, nor will it set up a "China Club."
Xi made the comments on Monday at a meeting to mark the fifth anniversary of his proposal of the Belt and Road Initiative (BRI) - which aims to create a trade and infrastructure network connecting Asia with Europe and Africa. On land, the plan is to develop the economic corridors of: China-Mongolia-Russia, China-Central Asia-West Asia, the China-Indochina peninsula, China-Pakistan and Bangladesh-China-India-Myanmar. The maritime part of the initiative focuses on jointly building secure and efficient transport routes connecting major sea ports.
Under the initiative, infrastructure such as railways, roads, ports, energy systems and telecommunications networks are receiving the most attention. China’s development of ports and hubs in Australia, Malaysia, Indonesia, Bangladesh, Sri Lanka, Myanmar, Pakistan, Kenya, Tanzania, Oman and Djibouti are intended to provide China with maritime access and economic benefit across the Indian Ocean. These will connect to Piraeus, Greece’s major port, which has been bought by Chinese shipping group COSCO and which will allow direct access to the markets of Europe.
China seeks win-win cooperation, Xi said. The significance of jointly building the Belt and Road goes beyond economic cooperation, and it is a great way to improve the global development model and promote economic globalization, he said.
China's trade volume with countries involved in the BRI has exceeded $5 trillion in the past five years, with an annual average growth of 1.1 percent. Qian Keming, vice-minister of commerce, said China’s combined direct investment in BRI countries has grown by an average of 7.2 percent annually, and the nation has now become the largest trade partner for 25 countries. China has also signed or upgraded five free trade agreements with 13 countries.
He said 82 overseas economic and trade cooperation zones have been established in countries along the Belt and Road, with an accumulated investment of $28.9 billion. The zones attracted nearly 4,000 enterprises, creating $2 billion of tax revenue for these countries and providing 244,000 local jobs.
BRI supporters suggest that the initiative permits new infrastructure and economic aid to be provided to needy economies. However, critics claim that it facilitates Chinese economic and strategic domination of the countries involved. China has been criticized for using its massive financial assets to dominate smaller economies through long-term control of infrastructure, natural resources and associated land assets, and through offering less than desirable credit terms for infrastructure loans.
[Maritime Executive]
Regulations / Flags of convenience: UAE targets 25 flags to fight substandard shipping
28/08/2018 As part of its recent efforts to eliminate substandard shipping, the UAE's Federal Transport Authority issued a circular targeting 25 flag states and mandating that ships under these flags should be classified by a member society in the International Association of Classification Societies (IACS) or by UAE classification society (Tasneef), if they are to call UAE Ports or anchor in UAE waters.
This rule will enter into force from 1st January 2019. The targeted flags include states from Paris MoU's Grey and Black lists, including flags with an average performance or a very poor performance, respectively. The list of the concerned states includes:
• Albania • Maldives • Belize • Mauritius • Cook Islands • Moldova • Democratic People's Republic of Korea • Palau • Sao Tome and Principe • Honduras • Tonga • Costa Rica • Congo • Ghana • Cambodia • Saint Vincent and the Grenadines • Georgia • Saint Kitts and Nevis • Sierra Leone • Bolivia • Equitorial Guinea • Togo • Vanuatu • Tanzania • Comoros The UAE has been criticized several times for being at the centre of seafarer abandonment and it has thus significantly emphasized on actions to combat substandard shipping in recent months. In May, ITF and the UAE FTA joined forces with the signing of a Memorandum of Understanding, to protect the rights of all seafarers operating in UAE waters.
Earlier in 2018, FTA also issued a circular mandating that all ships flying the UAE flag, above 200 gross tons, must have a financial security system to protect seafarers against abandonment, death or injury. The insurance must cover up to four months’ owed wages and entitlements. This measure entered into force in 20 February 2018, as the country entered into Maritime Labour Convention (MLC).
[SAFETY4SEA]
Terminal operators Brazil: Suape to tender operation of vehicle terminal and construction of
second container terminal
28/08/2018 By Barry Cross A public consultation has begun over plans for a new concession to run the finished vehicle terminal at the north-western Brazilian Port of Suape.
The National Waterways Transport Agency (ANTAQ), the port authority currently running the terminal, plans to issue a tender for the concession in early September. The consultation will run until September 14. The port authority is also consulting on plans for construction of a second container terminal at the port. Both projects form part of the government’s Partnership Investment Programme (PPI).
Following a public hearing and an evaluation by the National Audit Office (TCU), scheduled to take place by the end of the year, the government plans to issue both tenders in early 2019, with contracts placed later that year.
While the container terminal will be a greenfield development, the finished vehicle terminal concession will be a simple transfer of existing infrastructure to a new operator, although with the expectation that the new tenant will expand the supply of services. Investment of around 7.5m reais ($1.9m) will be required.
In 2017, Suape handled a record 80,080 finished vehicles – a rise of 46% compared to 2016. In the first two quarters of 2018, automotive import-export traffic came to 31,365 units. Currently, both Jeep and Fiat export vehicles through Suape, including the Renegade and Toro models, while Vauxhall, GM and Toyota all import finished vehicles via the port.
[Automotive Logistics]
Terminal operators: COSCO Shipping Ports net profit decreased 56.1% in first half 2018
despite 26.5% growth in throughput
28/08/2018
Global port operator COSCO Shipping Ports (CSP) delivered a strong throughput in the first half of this year, due to enhanced synergies with Ocean Alliance.
Driven by sustained economic growth, increase in trade volume and increased calls from the Ocean Alliance, fueled by its acquisitions and least impact by the Sino-US trade frictions, the group delivered the strong results.
CSP’s total throughput rose by 26.5% to 56.7 million TEU in H1 2018 from 44.8 million TEU recorded in the corresponding period a year earlier. In the first half of 2018, throughput from the group’s subsidiaries increased by 35% to 10.9 million TEU and throughput from the non-controlling terminals rose by 24.6% to 45.8 million TEU.
Revenue surged by 79.7% to USD 495.5 million from USD 275.8 million year-over-year. However, CSP reported a 56.1% decrease in its net profit which amounted to USD 169 million in H1 2018, against USD 384.7 million in seen in H1 2017. In addition, the group posted an EBITDA of USD 339.8 million in the first half of the year, a decline of 36.3% compared to USD 533.4 million recorded in the same period last year.
On June 30, 2018, Nantong Tonghai Terminal, which has three container berths and one bulk berth, officially commenced operation. The terminal has three container berths and one bulk berth. The annual handling capacity for container and bulk will be 1.47 million TEU and 5.37 million tons respectively. All the domestic and foreign trade companies will be migrated from Langshan Port to Nantong Port by the end of the month.
Nantong Tonghai Terminal is expected to have a throughput of approximately 250,000 TEU for 2018, according to CSP.
In May 2018, the group strategically allied with Port of Zeebrugge, the port authority of Zeebrugge which will acquire 5% equity interests in CSP Zeebrugge Terminal, and plans to develop the terminal into a strategic hub port. The group completed the acquisition of the remaining 76% equity interest in CSP Zeebrugge Terminal in November 2017 and made it a wholly-owned subsidiary.
In an effort to boost growth, COSCO Shipping Ports also entered into a strategic alliance with GLP and Eshipping to develop terminal extended services and port supply chain platform.
CSP’s terminals portfolio covers the five main port regions in Mainland China, Southeast Asia, Middle East, Europe and the Mediterranean.
[World Maritime News]
Port development Australia: Port of Newcastle has received unsolicited bids for new
container terminal
28/08/2018 The Port of Newcastle has received several unsolicited bids to develop and operate a new container terminal, according to the port’s CEO Craig Carmody.
The planned container terminal at the Port of Newcastle
The project, which was announced at the beginning of August 2018, is planned to boost jobs and create further business opportunities in the Hunter region of Australia, which is the nation’s largest regional economy.
Carmody, discussing the bids, said: “I can confirm that the Port of Newcastle has been approached by a number of globally significant container port operators, who are eager to take advantage of our proximity to exporters and importers, the availability of large tracts of low cost land around the port and our access to dedicated freight transport infrastructure.
“It should be noted that these bids are contingent on the removal of the current artificial constraint imposed on NSW (New South Wales) port competition and other regulatory issues.”
Carmody has invited further approaches, but indicated that bids must develop a 2 million-plus TEU container terminal on the Mayfield site within five years. A modern integrated container port and freight handling facility, all on one site, would remove the need for the double handling of containers, as well as reducing the demand placed on congested NSW roads and co-mingled passenger rail lines. Other proposed benefits of the new container terminal include reduced freight costs and increased efficiency.
Carmody also stated that the port was “likely” to see double the current number of containers moving through the NWS ports in 20 years’ time. He added: “Evidence from Deloitte Access Economics and other studies suggests that the development of a highly automated, state-of-the-art container port in Newcastle has the capacity to help ease congestion in Sydney while boosting the competitiveness of the NSW and national economies.
“While there is much planning and consultation in front of us, it is exciting for both the port and the region that there is such interest and enthusiasm for investing in the future diversification and growth of the Newcastle and Hunter economy.”
[Port Technology International]
Dry bulk shipping Vietnam: Oldendorff signs up for more transport and transhipment work
28/08/2018 By Grant Rowles German dry bulk owner Oldendorff has signed an integrated coal transport and transhipment agreement with Nghi Son 2 Power, a consortium between Marubeni and Korea Electic Power Corporation, for a new power station project being built at Nghi Son in Vietnam.
The agreement includes the transportation of about 100m tonnes of coal over 25 years, and includes the ocean transportation of the coal as well as the transhipment and delivery to Nghi Son. The coal will mainly be imported from Indonesia in capesize bulkers, with two capesize deliveries expected each month.
Oldendorff says it will open an office in northern Vietnam in order to perform the transhipment operations together with Vietnamese partners. It also intends to build two purpose built transhipment vessels in China, with the first being ready in 2021.
Oldendorff commenced a similar transhipment project at Go Gia buoys in southern Vietnam last year.
Credit: Oldendorff Carriers [Splash 247]
Container shipping: Cabotage relief boosts transhipment in India, but boxes are empty, claim
critics
28/08/2018 By Sam Whelan India’s move to lift cabotage restrictions is benefiting the country’s ports and freight forwarders by boosting domestic transhipment.
According to Global Logistics Solutions India director Naveen Prakash, the decision to allow foreign-flagged vessels to carry domestic cargo between Indian ports is the “most significant announcement” for the industry this year. Previously, coastal shipping of import/export cargo and empty containers was the exclusive purview of local carriers.
“The foreign-flagged transhipment of containers is a major boost for the movement of agricultural cargo, including fertilisers, meat, dairy, fish, fruit and vegetables,” Mr Prakash told The Loadstar. “Fifty new coastal berths will come up to connect 7,500 km of India’s coastline, including 19 new berths under development through government funding.”
As well as containerships, he said, the rule change included five-year exemptions for foreign-flagged ro-ro, pure car-carrier, LNG and project cargo vessels. “Combining these factors with new terminals that are highly efficient is surely going to bring down logistics costs, and big-volume clients, such as automobile manufacturers, are already working this out,” Mr Prakash added. He said the need for “consolidation of smaller volume shippers” to fill transhipment vessels was a good opportunity for forwarders.
“It will take a great deal of marketing, which is not the forte of traditional shipping agencies and vessel owners. So they need to tie up with marketing- and sales-centric logistics companies to reach deep markets. It’s a good opportunity for forwarders and express logistics companies which already have a good footprint in land transport and will now have access to coastal shipping.”
Cabotage is a controversial topic in India, with the new regulation – implemented on 21 May – strongly opposed by domestic shipping firms, which fear being squeezed out by foreign carriers. Its supporters claim it is already bringing back transhipment volumes to India from rival hubs in Sri Lanka, Malaysia, Singapore and Dubai, which currently handle around one-third of India’s container cargo.
Earlier this month, shipping secretary Gopal Krishna claimed that 10% of Indian cargo transhipped overseas would return by the end of 2018. And, according to the Container Shipping Lines Association (CSLA) (a lobby group for foreign carriers), transhipment volumes in India rose to 16,543 teu in July, up 43% on the previous month. The CSLA predicted this figure would rise to 200,000 teu within eight months.
However, critics cited in local media have contested the CSLA figures, claiming the majority represents repositioning empty containers. Furthermore, any reduced transport costs achieved through unrestricted cabotage have not been passed on to customers, they say.
For Global Logistics Solutions India, the ocean freight market is booming, with or without the coastal shipping changes. The Mumbai-based forwarder claims to be India’s fastest growing LCL consolidation
company, recording 30% year-on-year growth in volumes and revenue, which Mr Prakash said was driven by increasing trade with Japan, Turkey, Vietnam, France and Germany.
“We are very buoyant about the future, as our organisation is sales-centric, helping asset owners to connect with clients and offering them customised solutions. We are seeing very big opportunities in e-commerce where our role is to connect manufacturers and certified global vendors to India’s e-commerce marketplace.
For example, we have custom built solutions for FBA [fulfilled by Amazon]-type deliveries,” he said.
[The Loadstar]
Container shipping: Trade ‘jitters’ impact port throughput
28/08/2018 By James Baker Increasing trade tensions have contributed to a downturn in container port throughput in June, according to analysts at Drewry.
Drewry’s Container Port Throughput Indices, which track volume movement based on monthly throughput data for a sample of more than 220 ports worldwide, showed a decline in June compared with a record the previous month.
Source: Drewry
“After witnessing an all-time high in May, the global container port throughput index declined to 128 points in June with a 2% monthly reduction, possibly as a consequence of trade war jitters,” Drewry said. On an annual comparison, however, the index is 3.5% higher than the June 2017 level of 123.8 points. The base point for the index 100 at January 2012.
Drewry said all regions witnessed a monthly decline in June 2018 compared with May.
Notes: • The index figures for Africa are based on a relatively small sample, and should be viewed with caution • All index figures for June are preliminary, subject to change next month Source: Drewry
North America was the least affected region with a fall of less than one point, which Drewry said was likely boosted by shippers trying to beat tariff imposition deadlines. North America was followed by China and Latin America, where in both cases the index was 1.6% down.
On an annual basis, North America saw the highest growth among all regions at 5.7%. The index for China was 2.5% higher compared with June 2017. All world regions generated an annual increase, except Latin America where the index declined to 107.6, 2.6% lower compared with June last year.
The index for Asia (excluding China) and Europe was around 5.5% higher, but it was 3.1% and 2.5% less, respectively, when compared with May 2018.
[Lloyd’s Loading List]
Container shipping Brazil: Overbooking causing delays for exports
27/08/2018 By Marcelo Teixeira Brazilian exporters are facing delays shipping goods transported in containers, including coffee and cotton, due to overbooking, the world’s largest container shipping company, A.P. Moller-Maersk A/S, said on Monday.
In a report on its operations in Brazil, Maersk said exports fell for the second quarter in a row, citing the practice of some exporters reserving more space in ships than they need, leaving other companies failing to find room for their cargo. “Exporters are hurting each other when they book space they end up not using, because that increases costs and poses obstacles to other exporters that can’t find space in ships,” Maersk’s director for East Coast South America, Antonio Dominguez, said in the report.
Reuters reported last week that Brazilian exporters of coffee to Europe and the United States were facing difficulties in finding room on vessels, a situation that could deteriorate with Brazil harvesting its largest crop ever this year.
Maersk said a large cotton crop was also a factor behind shrinking shipping space. Both coffee and cotton are normally shipped in containers. Other commodities such as grains and sugar do not face the problem, since they are exported in other types of vessels (bulkers).
The company said that the overbooking issue started after several container operators reduced trips to Brazil back in 2016 following a plunge in imports amid the country’s largest recession on record. Overbooking increased this year after a nationwide trucker strike and a large cotton crop, as exporters rushed to reserve space, fearing a logjam when the May strike finished.
[Reuters]
Oil & gas shipping: Iran says it has full control of Gulf
08/2018 By Babak Dehghanpisheh Tehran has suggested it could take military action in the Gulf to block other countries’ oil exports in retaliation for U.S. sanctions intended to halt its sales of crude. Washington maintains a fleet in the Gulf that protects oil shipping routes.
Tangsiri said Iran had full control of the Gulf and the Strait of Hormuz that leads into it. Closing the strait would be the most direct way of blocking shipping.
“We can ensure the security of the Persian Gulf and there is no need for the presence of aliens like the U.S. and the countries whose home is not in here,” he said in the quote, which appeared in English translation on Tasnim. He added, “All the carriers and military and non-military ships will be controlled and there is full supervision over the Persian Gulf. Our presence in the region is physical and constant and night and day.”
Separately, the head of the Revolutionary Guards, Major General Mohammad Ali Jafari, said Iran’s enemies would not prevail in a conflict. “The enemies are strictly avoiding any conflict with Iran because they know that it will not be beneficial for them,” Jafari said, according to Tasnim.
Tension between Iran and the United States has escalated since President Donald Trump pulled out of a 2015 nuclear deal between Iran and world powers in May and reimposed sanctions. Senior U.S. officials have said they aim to reduce Iran’s oil exports to zero.
Iran’s Supreme Leader Ayatollah Ali Khamenei, the most senior authority in the Islamic Republic, said last month that he supports the idea that if Iran is not allowed to export oil then no country should export oil from the Gulf.
[Reuters]
Oil & gas shipping: Strait of Malacca key chokepoint for oil trade
27/08/2018 More than 90 percent of crude oil volumes flowing through the South China Sea in 2016 transited the Strait of Malacca, the shortest sea route between suppliers in Africa and the Persian Gulf and markets in Asia, making it one of the world’s primary oil transit chokepoints, reports the U.S. Energy Information Agency (EIA).
Source: EIA
In addition, a significant amount of crude oil (about 1.4 million b/d) passes through the strait on its way to Singapore and the west coast of Peninsular Malaysia, where it is refined before transiting the South China Sea in the form of petroleum products.
Source: EIA
The South China Sea is a major trade route for crude oil, and in 2016, more than 30 percent of global maritime crude oil trade, or about 15 million barrels per day (b/d), passed through the Sea.
The South China Sea is a major trade route for the Middle East, which accounted for more than 70 percent of total South China Sea crude oil shipments in 2016. Saudi Arabia is the largest source of crude oil, making up almost one-fourth of crude oil volumes traversing the South China Sea. More than half of Saudi Arabia’s global crude oil shipments traveled through the South China Sea in 2016.
Before the lifting of United Nations sanctions on Iran’s crude oil exports in January 2016, Iran relied heavily on Asian markets for most of its exports. After the sanctions were lifted, Iran could once again export crude oil to Europe. However, the South China Sea route still accounted for 52 percent of Iran’s crude oil exports that year.
Some regional countries bordering the South China Sea also contribute to the overall shipments of crude oil through the region. Indonesia and Malaysia together accounted for five percent of crude oil loadings that passed through the South China Sea in 2016 and two percent of crude oil receipts. Most of the crude oil from these countries that passes through the South China Sea is exported to other countries. However, some intra-country trade also crosses the southern portion of the South China Sea as cargoes move between eastern and western ports within each country.
Source: EIA
Singapore accounted for two percent of crude oil loadings that passed through the South China Sea in 2016 and one percent of crude oil receipts. Although Singapore does not produce crude oil, it is a major hub for refining crude oil and for storing and transshipping crude oil and petroleum products. In 2016, 95 percent of Singapore’s crude oil exports passed through the South China Sea. Most of these volumes originally came from the Middle East and about half went to China.
The three crude oil importers with the largest volumes passing through the South China Sea, China, Japan, and South Korea, collectively accounted for 80 percent of total crude oil volumes transiting the South China Sea in 2016. About 90 percent of China’s 2016 maritime crude oil shipments were transported through the South China Sea.
China’s crude oil imports have increased substantially over the past few years as a result of the country’s robust energy demand growth and stagnant crude oil production, and the country recently surpassed the U.S. as the world’s largest crude oil importer. A significant portion of these incremental volumes that are sent to northern China from eastern Russia by pipeline.
About 90 percent of the crude oil imported by Japan and South Korea was shipped through the South China Sea in 2016. Most of Japan's and South Korea’s imports are from Middle Eastern suppliers and are transported through the Strait of Malacca and then the South China Sea.
UNCTAD estimates that 80 percent of global trade by volume and 70 percent by value is transported by sea. Of that volume, 60 percent passes through Asia, with the South China Sea carrying an estimated one-third of global shipping. ChinaPower estimates that $3.4 trillion in trade passed through the South China Sea in 2016, and that over 64 percent of China’s maritime trade transited the waterway in 2016. The U.S. is less reliant on South China Sea, with just over 14 percent of its maritime trade passing through the region.
[Maritime Executive / EIA]
Desarrollo portuario México: Por qué los puertos están entre los más caros del mundo
27/08/2018
Por Liliana Corona
México ocupa el lugar 51 en el Índice de Rendimiento Logístico del Banco Mundial, por debajo de Chile y Panamá. La falta de gobernanza encarece los costos y aumenta las ineficiencias.
Para que un puerto sea atractivo para el comercio internacional, debe contar con infraestructura adecuada para recibir los grandes barcos de contenedores, pero también es importante que la atención de la carga y la cadena logística sean eficientes. Pero en México esto último no ocurre.
Pese a los esfuerzos por agilizar las maniobras portuarias en México y Latinoamérica, “los costos por tener puertos muy ineficientes en nuestra región implican un costo logístico de 30% adicional, por todos los costos extra que se derivan de la falta de coordinación. Somos 30 centavos de dólar más caros que cualquier logística en otros países del mundo”, explica Luis Ascencio Carreño, consultor del Sistema Económico Latinoamericano y del Caribe (SELA), un organismo regional intergubernamental de América Latina.
Los puertos mexicanos se encuentran en el tercer lugar de la región Latinoamérica en el Índice de Rendimiento Logístico 2018 que elabora el Banco Mundial, por debajo de Chile y Panamá. Frente a otros puertos del mundo, los de Latinoamérica alcanzan los lugares 34, 38 y 51, respectivamente. Es decir, son menos atractivos que otros del continente, como Estados Unidos (posición 14) y Canadá (20).
Esta situación se debe a la falta de gobernanza logística, señala Ascencio Carreño. El SELA promueve la digitalización de los puertos para mejorar su eficiencia a través de una “red articuladora” con gobernanza propia.
La Red de Puertos Digitales, como denomina el SELA al proyecto, busca que los puertos logren la gobernanza logística público-privada y que los países tengan una agenda estratégica de logística portuaria para que avancen en la digitalización del comercio exterior y de los puertos.
Para lograrlo, el especialista del SELA recomienda como primer paso crear una estrategia nacional de logística portuaria. En segundo lugar, que las autoridades marítimas, aduaneras y las Asociaciones Portuarias Integrales elaboren un modelo de referencia para la digitalización de procesos que sea replicable en todos los puertos mexicanos.
[Expansion]
Port development Italy: Scientists reveal new insights about the history of lost harbour of
Pisa
27/08/2018
Scientists have revealed new insights into the evolution and eventual disappearance of Portus Pisanus, the lost harbour of Pisa.
Described as one of Italy's most influential seaports during the Middle Ages, little is known about the relationship between Portus Pisanus's environment and its history. Researchers from the University of Exeter in the UK analysed the role that long-term coastal dynamics, sea-level rise and a changing environment played in the harbour's evolution. They reconstructed relative sea levels for the eastern Ligurian Sea over a 10,500-year period. The team also coupled historical maps with geological data to reconstruct the morphology of the coast around the Pisa harbour basin. The findings, published in the journal Scientific Reports, suggest that around 200 BC, a naturally protected lagoon with a good connection to the sea developed south of the city of Pisa.
The lagoon would have benefited navigation and trade and facilitated the establishment of port complexes, researchers said. It hosted Portus Pisanus well beyond the 5th century AD but its degree of sea connection began to decline from around 1000-1250 AD, as coastlines shifted towards the sea, they said. The lagoon was cut off from the sea and disappeared around 1500 AD when the basin developed into a coastal lake and Portus Pisanus was replaced by the maritime harbour of Livorno.
"Our results underline the importance of such approaches to understand the role of long-term coastal changes and their impacts on the societies living by the sea, notably in the last two millennia," said Matteo Vacchi from the University of Exeter. "The study of the evolution in the coastal zone in the past is a fundamental tool to predict future changes in the context of climatic change," said Vacchi.
[Daily News & Analysis]
Port development Brazil: Truckers’ strike chaos hits shipping industry
27/08/2018 By Joe Leahy Chaos in Brazil`s logistics sectors that started with a truckers’ strike this year has spread to the shipping industry just as Latin America’s biggest economy should be enjoying an export boom, shippers said.
Exporters keen to capitalise on Brazil’s weakening currency and bumper harvests are booking shipping, but then having difficulty finding the trucks to deliver their goods to port on time because of an ongoing dispute with drivers over freight prices, according to Maersk Line, the world’s largest container shipping company.
Competition for limited shipping space combined with the uncertainty over truck freight prices is leading exporters to over-book shipping by as much as 200 per cent from 5 per cent normally, Maersk said, creating confusion at ports.
“What we see right now is the situation is completely out of control, and getting worse,” said Antonio Dominguez, Maersk Line managing director for east coast South America. The 10-day Brazilian truckers’ strike is proving one of the most calamitous economic events to strike the centre right government of President Michel Temer, hurting second-quarter gross domestic product and undermining investor confidence.
Multinationals ranging from Unilever to Carrefour were hit by the strike. But economists say the worst effect of the shutdown was subsidies ceded by the government to truckers. These included a lower diesel price and a guaranteed minimum freight price that has raised transport costs for soy and corn exporters more than 800km from port by as much as 28 per cent, according to Rabobank. To make matters worse, the price is being charged on return trips, even if a truck is empty.
“The tabela [minimum price] is creating a big pricing distortion,” said one executive from a freight company, who said the return charge in particular was “overkill”. The minimum freight price was immediately
challenged in the courts, leading to confusion over its enforcement and uncertainty in the market, forcing exporters and drivers into lengthy negotiations over every cargo. Maersk said the problem of over-booking had its roots in 2016, when Brazil’s economy suffered the second year of its worst recession in history, leading shipping companies to cut back on the number of vessels serving the market. The economy began to rebound in 2017 and 2018 led by agricultural exports. But the overbooking problem only emerged this year after the truckers’ strike as exporters, desperate to secure limited space, began wildly over-booking despite being unable to predict with certainty when or what quantity of goods they would be able to deliver to port.
Maersk said the result was that 5 per cent of cargoes were being left behind each month because of the confusion, the equivalent one vessel going empty each month. Container exports, which account for 80 per cent of Brazilian trade, fell 6 per cent in the second quarter of this year against the same period a year earlier, down from 6 per cent growth in the first quarter.
The problems come as Brazil should be enjoying an export boom, with US President Donald Trump’s trade war with China favouring Latin American soya bean producers, in particular. “The currency continues to depreciate, so now it`s actually crossed the R$4 to the dollar mark, that’s extremely good for exports,” Maersk’s Mr Dominguez said. “But then every day is a challenge to be able to arrange a contract with a trucker out of the places where you have those commodities.”
[Financial Times]
Port development Nigeria: 30,000 tons of cocoa stuck on Lagos port roads
27/08/2018
At least 30,000 metric tons of cocoa are trapped on their way to ports in Nigeria’s main city of Lagos as roads in a state of disrepair delay access to ships, the cocoa exporters body said.
Travel to the Apapa and Tin Can Island ports that previously took hours, now takes as much as four weeks as trucks struggle through cratered and water-logged roads to get there, Pius Ayodele, president of the Cocoa Exporters Association of Nigeria, said. The affected cargoes are either in traffic jams or stored in transit warehouses in Lagos.
“A greater part of this travel time is spent at the epicenter of the congestion which is just 6 kilometers (3.7 miles) to the ports,” Ayodele said by phone from the southwestern cocoa-trading center of Akure.
Nigeria currently ranks a joint fifth with neighboring Cameroon among the world’s biggest cocoa producers, with the International Cocoa Organization estimating its 2017-18 output at
240,000 metric tons. Access roads to the ports were left to decay by a succession of governments over the past two decades, now slowing everything ranging from cocoa exports to gasoline imports, escalating costs and taking a significant toll on economic activity, according to the Lagos Chamber of Commerce and Industry.
Haulage costs have gone up “about 400 percent because of the turnaround time to get to the ports, to get loaded and get out of the ports,” Muda Yusuf, director general of the Lagos Chamber of Commerce and Industry, said in an interview in Lagos. This will either erode the profit margins of companies or get passed on to consumers, Yusuf said.
Price drop Shipment delays are making it difficult for exporters to get credit from banks to finance their operations, according to Akin Olusuyi, president of the Cocoa Processors Association of Nigeria, who said 1,760 tons of cocoa butter and cake are held up in the gridlock to the ports.
“Most of them have been in the traffic to the ports for close to three weeks and are still far away from its gates,” he said. “The cargoes that would have translated into export proceeds for us are locked up in that horrific traffic.”
Farm-gate cocoa prices have dropped as purchases have slowed because of the difficulties in reaching the ports, according to local buying agents. Prices have fallen from 800,000 naira ($2,208) per ton in July to 640,000 naira, according to Wale Shittu, managing director of Agrotrack Ltd., a cocoa-buying company.
Cocoa futures closed Friday at $2,364 per ton for December deliveries, after gaining 1.16 percent from the previous day, according to data compiled by Bloomberg.
[Bloomberg]
Port development U.S.: Proposed tariff on Chinese cranes could hurt major expansion
project in Virginia
27/08/2018 The Port of Virginia says the Trump Administration’s proposed tariff on Chinese-made gantry cranes could hamper a major expansion project.
Port CEO John Reinhart said in a statement Friday that a 10 to 25 percent tariff could increase costs for expanding one of its terminals. The port approved spending $40 million last year for four massive gantry cranes that will help load and unload shipping containers. They’re supposed to be delivered from China next year.
A 25 percent tariff could mean a $10 million cost increase. That kind of budget overrun could delay the project’s completion.
Reinhart shared the information Friday with the Office of the United States Trade Representative. The office is in the midst of holding public hearings for proposed tariffs on about $200 billion worth of Chinese products.
[The Republic]
Railways Kuwait: Work starts on construction of 111 km line
27/08/2018
Kuwait has reportedly started works on the first phase of the railway that would connect it to the rest of the Gulf region.
The first phase of the 111km project cost $3 billion and entails linking Kuwait’s Nuwaiseb to the Saudi border, Al Anba newspaper reported, noting that another phase involves a 153km line that connects Kuwait City to Boubyan Port.
The whole project comprises 2,100 km of rail and connects all six Gulf Cooperation Council (GCC) members. The railway project has already faced several technical and bureaucratic obstacles, added to tight budgets after the fall in oil prices since mid-2016.
Even though oil prices have recovered somewhat since then, they remain below the $100 per barrel figures seen two years ago. According to the newspaper, Bahrain said it would not connect its network to Saudi Arabia until at least 2023.
Mubasher
Oil & gas exploration Nigeria: $3.3 billion Egina FPSO sails to offshore field
27/08/2018
By Shailaja A. Lakshmi
The $3.3 billion Floating Production Storage Offloading (FPSO) unit built by Samsung Heavy Industries of Korea (SHI) for the 200,000 barrels per day capacity Egina oilfield began to sail to the oilfield Sunday, reports local media.
Following fabrication and integration works in Lagos, the FPSO will arrive in three days’ time at the Egina oilfield located in Oil Mining Lease (OML) 130, which is being developed at the cost of $16 billion by the French oil major, TotalT.
Nicholas Terraz, managing director, Total Upstream Companies in Nigeria, Ahmadu-Kida Musa, deputy managing director, deep water, Total Exploration and Production Nigeria, Amy Jadesimi, managing director, Lagos Deep Offshore Logistics Base (LADOL), and executives from Samsung Heavy Industries (SHI-MCI) were present during the sail away.
The FPSO sailed away from the quayside at Samsung Yard in Geoje, South Korea last year, before arriving at the Samsung Yard (SHI-MCI FZE quayside) in LADOL free zone in Lagos in January 2018. It was thereafter integrated locally by Samsung Heavy Industries Nigeria (SHIN) Limited.
Located some 130 kilometers off the coast of Nigeria at water depths of more than 1,500 meters, the Egina oil field is one of our most ambitious ultra-deep offshore projects. Primarily developed locally to accelerate the pace of Nigeria’s industrial fabric and the transfer of technology, the project will soon come on stream and produce 200,000 barrels of oil per day, i.e., 10% of the country’s total oil production.
The oil field is controlled by Total Upstream Nigeria (24%) in partnership with CNOOC (45%), Sapetro (15%) and Petrobras (16%).
[MarineLink]
Oceans: Why the Mediterranean will eventually disappear
27/08/2018 In the formation of a new Pangea, the Earth will completely change.
Source: Alamy
If you happen to find yourself on the Mediterranean Sea, take a minute to observe the shore. Watch closely for a while (for a year, to be precise), and you might notice it budge slightly (about 2cm, or a little less than an inch). Africa and Europe are slowly colliding in a process that has lasted for 40m years, pushing up the Alps and Pyrenees along the way. This continental drift will continue long into the future, until 50m years from now when the two continents meet and become one mega-continent: Eurafrica. The Mediterranean will disappear altogether, to be replaced by a mountain range as big as the Himalayas. It will be an unrecognisable world.
Continental drift is a relatively recent addition to the geological canon, and was only widely accepted in the 1960s. The tectonic plates underneath the Earth are constantly moving, dragged around by convection currents in the planet’s mantle. In recent years scientists have gained a good understanding of how continents used to move: they now theorise that multiple super-continents have been created in cycles over the course of Earth’s history. The most recent such landmass, Pangea, broke up approximately 200m years ago, meaning the Earth is currently in the middle of a cycle. Extrapolating from historical data allows researchers to forecast what might be in store.
The next 50m years are relatively easy to predict, and most geologists agree that the Mediterranean will close. The fate of other seas and oceans is very much up for debate, though. The best-known prediction comes from Christopher Scotese, a geologist at the University of Texas. His “introversion” theory suggests that the Atlantic, which is currently widening, will eventually start to reverse course. Over the next 200m years it will slowly close, he suggests, and the Americas will collide with Eurafrica to form Pangea Proxima. Others think the exact opposite might happen: the Atlantic will continue to widen while the Pacific closes, with California eventually colliding with far-east Asia.
A frostier forecast holds that all the continents will move north, closing up the Arctic ocean and forming “Amasia” around the North Pole. Earlier this year a rather different prediction was proposed by João Duarte at the University of Lisbon. His team think the evidence indicates that both the Atlantic and Pacific oceans
could close. To resolve the spatial conflict that would create, they suggest Asia will cleave in two, ripped apart along the India/Pakistan border. A new Pan-Asian ocean would form in the space, becoming the world’s largest ocean, while “Aurica” (an assemblage of all the world’s existing land masses) would be created in the middle of what was once the Pacific.
Forecasting geological events 200m years ahead is clearly not an exact science. These scientists are in the enviable position of being able to say things that will never be disproved by mankind, as it is unlikely that humanity will be around to see the next super-continent form. Nevertheless, such contemplations of the future are rather sobering: a reminder that the land beneath our feet is ultimately little more permanent—on a geological scale—than the borders we draw on its surface.
[The Economist]
Oceans: A new trick to keep barnacles from sticking to ships
27/08/2018 By Veronique Greenwood By experimenting with tiny textures, scientists may have found a technique that could save the shipping industry billions of dollars each year.
Workers scraping barnacles from a ship in 1928. Barnacles cost the shipping industry billions each year. Credit: Fox Photos/Getty Images
Barnacles may have a small footprint, but their effect on global shipping is large.
When ships’ hulls get coated with barnacles and other creatures, they use more fuel and eventually must be hauled out of water and scraped clean, at an estimated cost of several billion dollars a year. Fuel burned by the shipping industry is a significant contributor to global carbon emissions, too.
To keep barnacles off hulls, boats are coated in antifouling paint that kills barnacle larvae. Unfortunately, the paints’ active ingredients also leach into the water and kill other things, like oysters, leading to bans on some formulations and a search for alternatives.
Researchers who study the physics of sticky biological structures at Kiel University in Germany reported last week in the Journal of the Royal Society Interface that one option may involve texture, rather than chemicals. Covering surfaces with microscopic structures shaped like mushrooms, they find, keeps barnacles from getting a firm foothold.
Part of what makes barnacles so difficult to dislodge is that they secrete a liquid glue that makes close contact with the hull’s surface and then hardens into a cement-like substance. If they could develop structures that kept the glue from attaching smoothly, it could compromise the animals’ grip.
Textured coatings that make it difficult for barnacle larvae to settle down already exist. But they only succeed in delaying colonization of ship hulls, said Lars Heepe, a professor of biomechanics. Dr. Heepe, Dennis Petersen, a graduate student, and their colleagues decided to test tape made of silicone and covered with forests of either straight pillars or mushroom shapes.
The team tested their samples in the Baltic Sea. Both accumulated barnacles, but the glue had easily seeped between the straight pillars and made a tight seal with the surface. On the coating with the mushroom shapes, however, there were big gaps beneath the barnacles’ layer of cement. They were perched precariously on top of the mushroom caps.
To see what this meant in practical terms, the researchers lowered samples back into the Baltic and drew them up again every week for more than four months, taking photographs of their surfaces and painstakingly tracking every barnacle that tried to take hold. For the first seven weeks, barnacles built up on both, but then something interesting happened. “We were quite surprised by the fluctuation in the number of barnacles,” said Dr. Heepe.
Steadily, all the barnacles that had landed on the mushroom surface disappeared, apparently pulled from their insecure seats by the motion of the waves. No new barnacles settled on it for the rest of the experiment, while the other coating continued to attract new colonists.
The team also put a sample of the mushroom coating on a sailboat belonging to the Kieler Yacht Club that subsequently sailed through the Baltic and the North Sea for seven months, covering about 1,800 miles.
When it returned, the patch was clear of barnacles.
While this study helps establish the potential of these structures, “in the future, these surfaces can be optimized,” Mr. Petersen said. The tape with mushrooms on it is already being manufactured for medical uses — particularly bandages to help burn patients — but it might be possible to shrink the number of mushrooms per square inch and still get a good effect as far as boats are concerned, Dr. Heepe said.
The fact that the mushroom structures did well demonstrates the importance of careful testing. Even a relatively simple textural change could have an outsize impact on troubles caused by barnacle hitchhikers.
[The New York Times]
Marine pollution: Transshipping in Great Barrier Reef Marine Park to be banned
27/08/2018
The Queensland Government, led by Annastacia Palaszczuk as Prime Minister, plans to limit transshipping in the Great Barrier Reef region as part of a new policy.
The Great Barrier Reef is internationally recognized for its outstanding biodiversity and was the first coral reef ecosystem in the world to received world heritage status. Minister for Environment and the Great Barrier Reef Leeanne Enoch said the policy was developed in line with the requests from the public.
“Our transshipping policy recognizes the multiple pressures the Reef already faces and is a vital part of our government’s package of measures to protect it,” Enoch added. “Our policy has also been developed after an astounding 97% of more than 2000 submissions during public consultation called for transshipping in the Great Barrier Reef region to be limited in the World Heritage Area and banned in the Marine Park.”
As explained, the new policy will prohibit transshipping within the Great Barrier Reef Marine Park and restrict transshipping operations in the World Heritage Area to areas that are declared ports only.
For transshipping that occurs outside the Great Barrier Reef Marine Park, appropriate environmental authorities will also be required. Under the policy, marine activities in the Great Barrier Reef region will be focused on existing ports, she said.
The policy complements the government’s commitments under the Reef 2050 Plan, released in July 2018. The plan outlines concrete management measures for 35 years to ensure the reef is preserved.
“It also adds to our suite of programs that are protecting the Great Barrier Reef, including a record AUD 330 million investment announced in this year’s Budget for field management programs and water quality initiatives,” Enoch said, adding the policy would not affect shipping of cargo loaded in Queensland’s declared ports.
“We are committed to avoiding unnecessary impacts on communities, and this is why the policy will not apply to the supply of essential services to remote communities, marine emergency response practices, the movement of cargo between vessels while docked in a port, and refuelling activities,” she said.
“In addition, the policy does not apply to packaged or containerized goods at any volume or to bulk materials where the quantity handled is under 100 tonnes per day.” The Government of Queensland said it was developing necessary regulations and further consultation will occur once that is progressed.
[World Maritime News]
Marine insurance: Lloyd’s of London reviews market as losses mount
27/08/2018
By Costas Paris
Lloyd’s of London Ltd., a syndicate that controls about a fifth of the global marine insurance market, is reviewing a number of loss-making members of its marine unit, a move that could drive up costs for insuring the world’s ocean carriers.
The review comes after a loss of $2.6 billion at Lloyd’s last year and involves a number of Lloyd’s 80-plus insuring groups that have been unprofitable for the past three years, according to people directly involved in the matter. Lloyd’s is an insurance market in London that offers a way for syndicates to pool their risks.
“The [insuring groups] have been asked to come up with a viable plan until the end of the month, or risk closing down,” said a London broker who asked not to be identified. He said seven syndicates already have trimmed their marine business by a total of about $100 million and “many others are expected to do the same.”
Another broker said the problem comes from the increase in underwriting capital flowing into the market that has pushed premiums down to historically low levels, leaving insurers with unprofitable portfolios.
“Only about 18 syndicates were profitable on hull insurance over the past three years and around 50 were in the red,” another London broker said. “They have been insuring for as low as 0.1% of the vessel’s value, which is unsustainable.”
Brokers say hull premiums may need to double to make them sustainable. War-risk insurance and other high-risk coverage, which is more profitable than hull insurance, has come down from more than 21% of all premiums to around 10% in the past three to four years, brokers said.
“If Lloyd’s moves to raise premiums, all competitors will do the same,” the first broker said. “This will create added problems to shipowners that will have to bear another extra cost.”
Many shipping companies are expected to end the year in the red after a brief respite in losses in 2017. The cost of fuel has gone up by as much as 30% this year and owners are spending billions more to install “scrubbers” for their vessel engines or use cleaner, more expensive fuels to meet lower sulfur-emission limits starting in January.
Lloyd’s Chief Executive Inga Beale, who has been leading the giant insurer since 2014, will step down next year and plans to leave the insurance business. She is the first woman ever to be appointed CEO of the historic marketplace. Lloyd’s has been slow to adopt digital technology that would cut down its costs. Costs currently make up more than 30% of the insurer’s premiums, making Lloyd’s around 12% more expensive on average than some of its competitors.
Lloyd’s market was established in London more than three centuries ago.
[The Wall Street Journal]
Maritime safety: Fast-changing Arctic conditions bring new route risks for ships
27/08/2018
In its latest Shipping Review, Allianz noted that climate change is impacting ice hazards for shipping, opening new trade routes in some areas, while increasing the risk of ice in others.
Arctic ice has been thinning and retreating over the past 40 years, bringing new opportunities for shipping, with more and more vessel sailing in Arctic, but also serious environmental concerns.
For example, cargo volumes on the Northern Sea Route (NSR) increased by nearly 40% to 9.7 million tons in 2017, the biggest annual volume ever, according to the Russian Federal Agency for Maritime and River Transport. This is expected to rise to 40 million tons by 2022, reflecting the development of oil and gas fields, and 70 to 80 million tons by 2030.
“Climate change could open up new shipping routes in the Arctic, such as the North West Passage, and routes across Russia and Canada. These routes will have advantages as well as disadvantages. For example, a collision in a remote hostile environment like the Arctic could prove challenging, and would be a long way away from salvage teams,” explains Volker Dierks, Head of Marine Hull Underwriting, AGCS Central & Eastern Europe.
Ships operating in Arctic waters are bound by the Polar Code, but ice is also posing a significant hazard for shipping elsewhere, the report stresses. Outside the Arctic and Antarctic, a number of so-called conditional areas also carry a higher risk of ice, including the Gulf of St. Lawrence, Alaska, Sakhalin, Russia and the Baltic Sea. Trading in these areas has also been increasing with global warming.
There is also a threat of ice hazards in more southerly shipping routes from icebergs. At the end of 2017, the US Coast Guard’s International Ice Patrol warned shipping companies that an unusual number of icebergs were drifting into shipping lanes. It found that over 1,000 icebergs had drifted into North Atlantic shipping lanes in 2017, marking it the fourth consecutive season where the danger has been classified as “extreme”.
“A melting Arctic could lead to an increase in icebergs affecting trade routes, although this has not yet been a problem for the major north, south, east or west shipping lanes. But this might become more of an issue in the future,” adds Mr. Dierks.
In the formation of a new Pangea, the Earth will completely change.
• An analysis on marine casualties in Arctic presented in the report shows there were 71 shipping incidents in Arctic Circle waters during 2017, including one total loss – up 29% year-on-year. • Machinery damage/failure was behind over 60% of incidents, driven by the harsh operating environment. • Fishing vessels were involved in almost 40% of incidents. • Machinery damage/failure is also the top cause of shipping incidents in this region over the past decade, accounting for 47% of casualties. • Wrecked/ stranded is the second major cause, accounting for 20% of incidents.
[SAFETY4SEA]
PROFESSIONAL MEMBERSHIP
Advance your career by gaining Professional Recognition.Professional recognition is a visible mark of quality, competence and commitment, and can give you a significant advantage in today’s competitive environment. All who have the relevant qualifications and the required level of experience can apply for Professional Membership of IAMSP. The organization offers independent validation and integrity. Each grade of membership reflects an individual’s professional training, experience and qualifications. You can apply for Student Membership as per following :
Fellow (FIAMSP) To be elected as a fellow, the candidate must satisfy the council that he/she: Has held for at least eight (8) years consecutively a high position of responsibility in shipping or related business. Has distinguished himself/herself in shipping practice. Is a principal in a firm or a director of a company in the business or profession. Members in this grade are entitle to use the initials FIAMSP After their names.
Full Member (MIAMSP) Individuals holding an internationally recognised marine qualification, or who can prove that they have practiced on a full time basis for a minimum of five (5) years as a consultant or marine surveyor. Individuals who, by producing written reports can demonstrate that they have practiced marine surveying or consultancy for at least five (5) years. Individuals whose qualifications or experience shall be considered appropriate by the Professional Assessment Committee. Members may use the initials FMIAMSP after their names.
Associate Member (AMIAMSP) Associate Membership shall be open to any person, partnership, company, firm or other corporate that does not own a Ship but is engaged in ship operating or ship management. Associate Members can nominate one (1) person to represent them in the Association. Associate Members are entitled to attend General Meetings and to participate in discussion at such meetings but shall not vote or stand for election to the Board of Directors.
Technician (TechIAMSP) Individuals holding a recognised qualification, for example Inspector level 2 or higher (NACE, FROSIO, ICorr), RMCI and IRMII, NDT Technicians (CSWIP), for example gauging personnel, divers or other surveyors with at least three years full time practical experience in a marine related field. Technician Members may use the designation TIAMSP after their names.
Affiliate (AFFIAMSP) Graduates who do not meet the criteria for Full or Associate Membership and are continuing to train and gain experience prior to applying for Associate Membership
Student (SIAMSP) Individuals who are enrolled in training programs related to the maritime or shipping will be appointed as student members of the Association for the duration of their course.
LAST MEMBERSHIP PROFESSIONAL MEMBERSHIP
Fellow (FIAMSP)
Mr.Adolfo omar Cortes Mr. MELARAYIL Mr. ESNAL Pedro GANGADHARAN SIBIN
Spain India Spain
Full Member (MIAMSP)
Mr. MARTINS Jorge Capt. Jasim Aqeel M. Subbiah Thiyagarajah
Brazil Iraq Malaysia
Affiliate (AFFIAMSP)
M. Kirton Christopher M. Hubert Louis-philippe Mrs. HELENA ISABEL CAMPOS LANÇA PALMA
Singapore France Portugal
UPCOMING EVENTS SUMMARY
September OSV CHARTERING CONTRACT MANAGEMENT SEMINAR 13 America Square (Cavendish Venues), London
September DECODING TRADE CONTROLS, SANCTIONS AND REGULATIONS ON DUAL-USE GOODS
18 The Hatton, London
September MEETING THE COMMERCIAL, INSURANCE AND LEGAL CHALLENGES OF TODAY'S SALVAGE AND WRECK REMOVAL OPERATIONS 24 Novotel Clarke Quay, Singapore
September MEETING THE COMMERCIAL, INSURANCE AND LEGAL CHALLENGES OF TODAY'S SALVAGE AND 26 WRECK REMOVAL OPERATIONS
Novotel Clarke Quay, Singapore
September GLOBAL LINER SHIPPING ASIA 26 Novotel Clarke Quay, Singapore
September ARE YOU READY FOR 2019 27 Bahia Mar Fort Lauderdale Beach, Florida
October LIQUEFACTION OF BULK CARGOES SEMINAR 18 America Square (Cavendish Venues), London
February 2019 12th Arctic Shipping Summit – Montreal 21 Montreal - venue TBC