November/December 2010

Heroes all

Hong Kong & China n South Korea n 2011 prospects n Reefer trades

November/December 2010 Contents

AM Cover Story 36 It is a byword of any self-respecting industry that its workforce is its most precious asset. In shipping such a proposition is axiomatic. As demonstrated in our cover story this month, over and above the tough jobs they perform in often difficult conditions, seafarers around the world are often called upon to perform tasks of great daring in order to save the lives of others who find themselves in distress in dangerous seas. We also pay tribute to those seafarers that during this holiday period find themselves not at home with family and friends but held captive by viscous unprincipled pirates with little hope of Heroes all getting home anytime soon.

AM FEATURES

14 Asia Eye Hong Kong confrontation in prospect

16 Hong Kong/China Wake up and see the shipping

24 Reefer trades 14 To box or not

27 South Korea Pulp stories

34 2011 prospects The future through a glass darkly

34

November/December 2010 asiamaritime 1 November/December 2010 AM Regular columns

Contents 4 Comment Buddy can we earn a dime in exports?

6 Briefs Yards, Lines, Ports

9 Commodities Oil for the skin and everything in between

12 News line Seafarer shortage narrows 12 38 Operations Battling cross-ocean infection

40 IMO The year ahead

42 Green page Clean ship recycling initiative

40 43 Logistics Ticking bombs

44 Technical Keep the cargo flowing – cleanly

45 Ship’s store Lovely bubbly

46 Seascapes Careful of the human dimension 43 48 Brief encounters A solution for everything?

49 Launched Ships with a Latin flavour

50 Diary Captain Gregorio Oca in memoriam

52 52 Maritime’s back pages China’s gas breakthrough

2 asiamaritime November/December 2010 Committed to clean seas

The maritime transportation industry has benefited from innovative MacGregor products for over 70 years. Cargotec’s latest engineering solutions include a range of MacGregor cargo and offshore load-handling systems that use environmentally-friendly electric drives which are both economical and competitive. Equipment includes cranes, hatch covers, RoRo cargo access systems and winches.

Like so many Cargotec solutions: innovation built on experience.

Cargotec improves the efficiency of cargo flows on land and at sea – wherever cargo is on the move. Cargotec’s daughter brands, Hiab, Kalmar and MacGregor are recognised leaders in cargo and load handling solutions around the world.

www.cargotec.com www.macgregor-group.com Fulsome promises, empty boxes

There’s nothing like a trade pact to offer that feel-good feel- China amounted to $229bn of the overall figure. It is perhaps a ing. The problem is that the arrival in Hong Kong of the US Depart- measure of the insularity of the US that Canada is the nation’s larg- ment of Commerce assistant secretary Suresh Kumar in November est trading partner. to sign an agreement aiming to increase American exports to the What was particularly galling about Mr Kumar’s address was territory within three years was nothing like a meaningful trade the inference that somehow shipping companies were playing a pact. part in his country’s less than impressive export performance. His A key driver behind the agreement is for US companies to use accusation that shipping companies need to look at areas such as Hong Kong in its traditional role as a gateway to China and other availability of containers in Asia and the US and improve logistics Asian markets. Nothing new there, except perhaps to the bulk of provision and update port infrastructure was perhaps the largest red US companies. herring that Mr Kumar managed to get past Hong Kong customs. Why? Essentially because the US has very little that China The fact is even the US’s much called for appreciation of the wants. What China does want (high-end technology, military hard- Rmb would not alter the current precarious trade balance while ware) the US doesn’t want to give. Let’s look at the figures Mr Ku- the US’s economy is tipped so focused on its domestic consumers mar was keen for us to know. of services. The US has to go back to basics with the introduction “US exports are 12% of GDP, well below that of nearly all our of education reform that could eventually nurture a work force ca- major economic competitors,” he said. By contrast Germany ex- pable of producing goods that a wealthier Asia might desire, if not ports more than 40% of its GDP, in Canada the figure is 30% and actually need.] in China 25%. “Less than 1% of America’s 30m companies export, and of Correction those companies that do export, 58% export to only one country,” In the last edition of AM (Maritime’s back pages) we mis- he said. takenly said the Tokyo Bay was owned by Orient Container Between January and August this year trade between the US Lines. In fact the owner was Overseas Containers Limited. and mainland China was up 26% to $285bn. But US imports from

PUBLISHER ADVERTISING PRINTING DaysOnTheBay Co Ltd [email protected] Allion Printing Company 10/F Sze Hing Industrial Building EDITOR COVER 33-37 Lee Chung Street, Chai Wan, Mike Grinter a.f.p Hong Kong SAR [email protected] HONG KONG OFFICE THIS HAS BEEN A Contributors 8A Greenfield Court DAYSONTHEBAY Michael Grey Discovery Bay PRODUCTION Sandra Speares Hong Kong K K Chadha Tel: + 852 2987 8870 Fax:+ 852 2987 7780 PRODUCTION EDITOR [email protected] Lokyin Chun [email protected] SUBSCRIPTION SALES [email protected] ILLUSTRATIONS Harry Harrison

4 asiamaritime November/December 2010 210 x 297mm ambriefsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam n Lines While concern continues in some quarters that boxship over- capacity could threaten the industry’s fortunes in 2011, a number Nowhere was the continuing resurgence of the liner sector bet- of Asian shipping lines are looking to boost their fleets with orders ter demonstrated than in AP-Moller Maersk’s forecast of full-year for delivery in 2012 and beyond. At the World (China) Shipping profits of $5bn, announced in November, after revealing an overall Summit in Guangzhou, South Korea’s Hanjin Shipping, and China nine-month profit of $4.2bn, compared to a loss of $706m for the Shipping both said they would shortly be in the market for new same period last year. vessels. Hanjin’s chief executive Kim Young Min said the company Maersk’s liner division contributed $2.2bn to the bottom line, would be seeking newbuild deals for mid-size vessels before the compared to a $1.6bn loss during the first nine months of 2009. end of the year. A combination of a 34% increase in freight rates, a 7% increase Singapore’s Pacific International Lines, best known for its fleet in volumes and lower unit costs all contribute to the spectacular of 130 containerships, is making a multi-million dollar diversion turnaround, Maersk said. into the heavylift sector. Driven by perceived demand for multi- Maersk said it expects box volumes to grow by around 6% next purpose vessels chiefly from Chinese developers seeking entrance year, with a likely tightening in the company’s capacity. Maersk to African projects, PIL took delivery of three second-hand 17,500 will start taking delivery of a series of vessels to be deployed on dwt multipurpose vessels from Germany’s Schoeller Holdings in African and Latin American trades until March 2011. October and November. Taiwan’s Yang Ming Marine also posted outstanding results PIL has ordered a further eight such vessels at sizes ranging for the first nine months, by converting a three quarters loss of from 24,000 dwt to 27,000 dwt from China Dalian Shipyard and T$10.7bn in 2009, into a T$10.4bn ($333m) profit by the end Taizhou Kouan Shipbuilding. All eight vessels will be delivered be- of September. Yang Ming has predicted a full-year net profit of tween 2011 and 2013. ] T$13bn. At the end of 2009 the company had lost T$15.8bn.

Pacific Basin has compiled a bumper shopping list (see Yards) n Ports managed by QIC, together with a minority stake held by Tawreed Investments, a wholly-owned subsidiary of the Abu Dhabi Invest- Mystery continues to surround the abrupt departure of James Math- ment Authority. er, the DP World terminal director and general manager at Syd- Hong Kong-listed Dalian Port is seeking a second listing in ney’s Port Botany. Mr Mather stepped down in early November. Shanghai. The port operator said in a note to the Hong Kong ex- DP World has denied that Mr Mather exited the top job because of change it was allocating for private share placement and public of- the chaos caused when the company introduced a new IT system. fering a total of 1.5bn shares – 34% of its share capital. At the time A shipowners’ group alleged that serious delays had been ex- of going to press the company said a final pricing of the shares perienced following the introduction of the new system but further would be made on November 24. charged that such delays had been taking place over a “long pe- Singapore’s PSA International has not been enjoying its day at riod.” The group said that its members had been sustaining massive the British seaside. As a 60% owner of a container terminal at the fuel bills as vessels had to significantly increase speeds to try to get UK east coast port and holiday spot Great Yarmouth, PSA Interna- back on schedule. tional and its partners International Port Holdings took the decision In more Australian port news, consortium Q Port Hold- in November to suspend operations at the 70,000 teu facility due ings is to invest $2.3bn in a 99-year lease to operate Brisbane to lack of demand. Port on the Pacific east coast. The consortium consists of Global The southern Chinese port, Shenzhen Chiwan Wharf expe- Infrastructure Partners, Industry Funds Management and funds rienced a 22% increase in container throughput in October to

6 asiamaritime November/December 2010 ambriefsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

504,000 teu compared with 413,000 teu during the same month Cosco Pacific saw box throughput boosted by 20% in 2009. Total container throughput for the year to October 31 was up 32% to 5m teu, from 3.8m teu last year. Further north, Qingdao Port Group is to splash out $1.5bn to build a coal terminal and two oil terminals once it receives the green light from the country’s economic planning agency, the Na- tional Reform and Development Commission. Qingdao has rapidly outstripped its current design capacity of 150m tonnes and 3.5m teu. This year the port is expected to handle 350m tonnes and 12m teu. As part of the expansion Qingdao Port Group is seeking a li- cense to accommodate vessels of over 300,000 dwt. Hong Kong-listed Cosco Pacific, the terminal operator under the China Ocean Shipping (Group) umbrella, unveiled a 20% in- crease in container throughput for the first 10 months of 2010 to 40m teu, up from 33.3m teu during the same period of 2009. In October, Cosco Pacific’s port facilities handled 4.3m teu, an increase of 19.4% on the same month a year earlier. Between January and October, its ports in the Pearl River Delta teu from 12.1m teu. In the Yangtze River Delta, Cosco Pacific han- and southeastern China handled 13.3m teu, 22% higher against dled 8.1m teu, up 18.7%, the port operator added. 10.9m teu in the same period last year. Cosco Pacific’s overseas ports experienced growth of 28.8% in Volumes at its ports in the Bohai region grew 16.6% to 14m the first 10 months, to 4.5m teu from 3.5m teu in 2009. ] n Yards STX OSV listed on the Singapore stock exchange in November In a shining example of cross-strait cooperation Tai- wan’s largest shipbuilder, CSBC has signed an agree- ment with Chinese yard Yangzijiang Shipbuilding that will see the pair share manpower resources and technology. In what appears to be a win-win situa- tion CSBC will benefit from cheaper mainland labour and perhaps space, while Yangzijiang gets the benefit of CSBC’s advanced technology. The agreement fol- lows swiftly on from Yangzijiang’s historic September listing on the Taiwanese bourse. The catalyst for the cooperation deal appears to be Yangzijian’s ambi- tion to build a new larger yard, with the assistance of CSBC. Chinese shipbuilder Jiangsu Rongsheng Heavy In- dustries raised around HK$14bn ($1.8bn) in its ini- tial public offering on the Hong Kong bourse in No- vember and began trading on November 19. Among institutional investors CNOOC, China Investment and China Life expressed its confidence in a reinvigorated bulk market with orders led the pack by buying a combined $285m of the stock. for 10 vessels in mid-November. At a price of $25.5m each six On November 11, fellow shipbuilder STX Offshore & Specialised 35,000 dwt handysize bulk carriers will be delivered from China’s Vessels, a unit of STX Europe the subsidiary of South Korea’s STX Jiangmen Nanyang Ship Engineering between the second half of Group, began trading on the Singapore Stock Exchange. STX OSV 2012 and the first half of 2013. received applications for 1.4bn shares, 4.2 times the 326m shares The other four newbuildings are 58,000 dwt supramaxes that originally on offer. will be built by Tsuneishi Group (Zhoushan) Shipbuilding for a Hong Kong’s leading dry bulk operator Pacific Basin Shipping unit price of $32.85m. Delivery is scheduled for 2013. ]

8 asiamaritime November/December 2010 amcommoditiesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Lubricating the economy Jeff Heselwood ponders the wondrous diversity of palm oil

Ca’da Mosto, a Portuguese explorer from the 15th century once tasted palm oil in Africa and wrote, “It smells of violets, tastes like olives and has a col- our that blends foods together like saffron, but even all this cannot sufficiently describe its special qualities.” Palm oil is rich in caro- tene from which it derives its bright, tropical, red colour. The carotene content of palm oil is 16-times higher than levels found in a carrot with the same mass and weight. This makes palm oil one of the main and From this... richest sources of carotene and as such is important in combat- ing vitamin A deficiency common in many developing countries. the demand for palm oil in Europe, and as a consequence have Palm oil comes from the fruit of the oil palm tree, a tropical accelerated the conversion of large areas of rainforest in Southeast species that originated in West Africa, but now grows as a hybrid Asia. Palm oil plantations are often expanded by clearing existing in many parts of the world, including Southeast Asia and Central forest land and draining peat swamps. Many economists predict it America. The relatively low-priced oil is used for a variety of pur- will be the leading internationally traded edible oil by 2012. poses. Due to its physical characteristics, palm oil can be used and The world demand for palm oil has soared in the last two dec- prepared in a number of processes without the need to hydrogenise ades, first for its use in food, consumer products and more recently it. The composition of palm oil, together with its natural consist- as the raw material of bio-fuel. The growing affluence of India and ency, appearance, a rather pleasant smell and its resistant nature China, the world’s top two importing nations will increase demand makes it an ideal ingredient in the development and production of of edible vegetable oils. And in the US, a recent wave of dietary a variety of edible oils, in particular margarines and fats. Palm oil focus on the trans-fat issues has led to increased consumption. is also ideal when making dry cake mix used for baking biscuits, In addition to being less expensive, palm oil is semi-solid at cakes and sponge cakes, soaps, sauces, fat substitutes used when room temperature, making it ideal for baking and food produc- making condensed milk, powdered milk, and non-lacteous cream tion. Many food manufacturers are trying to find alternatives to used in coffee and ice-cream. trans-fat, partially hydrogenated oils, which contribute to heart dis- Palm oil is also considered one of the best oils for frying. Be- ease and other medical problems. Although, palm oil is not with- cause it can resist high temperatures and does not produce un- out its own contribution to heart disease, the focus on the trans-fat pleasant smells, palm oil is used in the home, in restaurants and issue has resulted in palm oil being considered healthier than some during the mass production of fried potatoes and French fries. other fats. The other major factor driving palm production is its role Indonesia: palm oil production prospects continue to grow in sustainable energy campaigns around the globe. European According to the United States Department of Agriculture a sig- countries have promoted the use of palm oil by injecting hun- nificant change in the oil palm industry has taken place during the dreds of millions of dollars into national subsidies towards bio- past season, as Indonesia surpassed Malaysia in production of palm diesel. Europe is now a leading importer of palm oil. Through the oil and is now the world leader. This designation will continue and subsidising of bio-fuels, European governments have accelerated Indonesia’s production rate will outpace Malaysia for the foresee-

November/December 2010 asiamaritime 9 amcommoditiesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

plantation visits were targeted in the country’s most important pro- ducing provinces. Regular surveys of fruit bunches three months prior to harvest were indicative of an output surge in fresh fruit bunches. Indonesia is forecast to produce more than 18.3m tonnes of palm oil in 2010/11. The government of Indonesia’s development of palm oil pro- duction through land concessions to large companies, government plantations, and small holder programmes has been clearly suc- cessful in securing edible oil and generating foreign exchange. But the subsequent rise in palm oil production has also resulted in the loss of tropical rain forests and generated major concerns about the effect of palm oil production on habitat loss for many endangered species as well as a reduction in biodiversity.

Global Production Vegetable oil production around the world totalled about 150m To this... tonnes (2009 data from FAO), of which over 40m tonnes were pro- duced by the oil palm, the world’s leading oil crop. able future. Personnel from the USDA Foreign Agricultural Service Oil palm is the most productive vegetable oil crop, yielding conducted crop-assessment travel in the main palm oil production more oil per hectare than any other major oilseed commodity. regions of Sumatra and West Kalimantan during August and Sep- For example, the oil yield on a per unit area basis from properly tember. The team met with palm oil estate managers, agricultural maintained oil palms is significantly greater than oil yields from officials, researchers, and independent commodity analysts. The commercially grown rapeseed and soy. In terms of energy balance

Antifouling performance at the level you choose.

Our renowned antifouling range including Intersmooth®, Interswift® and Interspeed® has evolved, providing new options for all vessels and operational requirements, delivering total fouling control for up to 60 months.

You choose the performance, we deliver the product.

See our new product range at www.international-marine.com/antifoulings

10 asiamaritime November/December 2010 amcommoditiesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

it takes less sunlight to produce a unit of oil. Most recently, the Indonesian government, However, on the basis of oil yield per man- working with some palm oil producing companies day it is not as competitive because of the is negotiating sustainability standards with Europe labour intensive plantation management and and the United States under the auspices of the harvesting of the fruit. This is less an issue Roundtable on Sustainable Palm Oil. During plan- in areas of Indonesia where labour is more tation visits on Sumatra and Borneo, Cargill and readily available. Given the current situa- Musim Mas, the agricultural assessment team was tion, these characteristics appear to favour shown many of the sustainable practices and posi- oil palm as a renewable energy source for tive reinvestments made back into the work force the near future, until cellulosic technologies and the surrounding community. advance to an operation level. Yields will steadily increase as the newly planted areas enter into their twenty-year plus Road to sustainability productive lifecycle. In addition, replanting will Although palm oil is entirely GM free and continue to adopt better-suited varieties devel- has the highest yield per hectare than any oped from hybrid research and cloning. oil or oilseed crop, it is recognised that there “RSPO-certified sustainable palm oil has are environmental pressures on its rapid ex- gained a strong foothold in a global commod-

pansion to eco-sensitive areas, particularly To this... ity market,” said Jan Kees Vis, president of the as oil palm can only be cultivated in certain RSPO’s executive board. “We are confident that tropical areas of Asia, Africa and South this growth will further extend into important America. It is vital that production and use of palm oil happens in palm oil markets such as China and India. The organisation will a sustainable manner based on economic, social and environmen- enable its staff to adequately service growing numbers of mem- tal viability. bers, suppliers, buyers, and consumers.” ]

Antifouling performance at the level you choose.

Our renowned antifouling range including Intersmooth®, Interswift® and Interspeed® has evolved, providing new options for all vessels and operational requirements, delivering total fouling control for up to 60 months.

You choose the performance, we deliver the product.

See our new product range at www.international-marine.com/antifoulings

November/December 2010 asiamaritime 11 amnews lineamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Shipyards failing to look outside the box Shipowners seek innovation in buyers’ market

Orders for new containerships have picked up a The 14,000 teu MSC Beatrice will soon be overtaken by little in recent months, with orders from Zodiac Mari- 16,000 teu vessels ordered by Maersk time, Neptune Orient Lines and Evergreen but still did not begin to compare with the demand for bulk car- riers until November 2010. That was the month when Maersk unveiled intent to buy at least 10 18,000 teu vessels (probably from South Korea’s Daewoo Ship- building and Marine Engineering). At an estimated $170m per vessel the new ships will be the largest containerships the world has ever seen, superseding Mediterranean Shipping Co’s 14,000 teu ships that have been delivered this year. According to a limited amount of information leaked from Maersk’s Danish office, the sheer size of the proposed vessels is not the only innovation. An important part of the specification determined for the fleet of giant for Shipbuilding Specifics Hiroshi Iwamoto. ships include new propulsion systems and other technological in- “It is true that the shipbuilders are facing overcapacity, but novations that would reduce emissions and slot costs. slowing production is very costly for shipyards and therefore they Most importantly the designs would have to recognise the need to continue building still at a somewhat high pace. In this expected permanence of slow steaming with the installation of a situation, it is understandable that shipowners and operators will smaller engine than currently used in larger boxships such as the seek to capitalise on the market situation and demand lower prices 12,000 teu Emma Maersk, which employs an 80,080 kw 12-cylin- especially after the financial crisis when access to credit is more der main engine. difficult than before. It is also true that those who have financial But the willingness to step up to the mark when it comes to in- strength can be the leaders,” he says. novative design appears to be rare among shipbuilders, if Seaspan “From a shipbuilder’s point of view, however, most feel they chief executive Jerry Wang is to be believed. In November Mr have over-expanded their capacity (not only in terms of facilities Wang seemed to hit out with the stick as he offered a carrot when but in terms of human and other resources) and are inclined to he said he was willing to contract for up to 40 containerships in seek a lighter workload to cover the demand and supply gap, and the range of 10,000 teu each to a shipbuilder willing to radically therefore have developed less interest in pursuing commercial innovate and offer competitive prices. So far (he said) there have ships at low prices. Instead shipbuilders will target the offshore been no takers. market, or specialised ships where better prices can be obtained,” Mr Wang revealed that he had been negotiating with Chinese he adds. and South Korean yards but…”The yards are not listening because “Finally, there are many ways to investigate the concept of they still think they can sell inventory designs.” Specifically, Mr improving efficiency and shipbuilders are probably not allowed to Wang has called for yards to find lighter materials to build ships. generalise some of the elements related to ship designing. This will With his brave call, Mr Wang appears to be gambling on the need more cooperative work between buyer and builder and could fact that over the next few months ship prices will fall further as become a source of differentiation of technology. a result of continuing restrictions on credit, surplus yard capacity “Therefore each shipbuilder may need to develop their own and fewer shipowners in the market for new ships. That will be the concepts, and while ingredients of the concept could be known, point when the market will discover whether Mr Wang is intent on the recipe could not be copied. Those buyers who cannot main- innovation or content to buy cheap. tain that type of dialogue with potential shipyards will end up For the shipbuilders angle on the debate sparked by Mr Wang in getting mediocre ships in terms of advanced technology,” he Asia Maritime turned to a member of the Committee on Expertise concludes.

12 asiamaritime November/December 2010 amnews lineamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Seafarer shortage crisis eases

A newly published survey from Bimco postpones a crew shortage debacle

A year ago, in the inaugural issue of Asia Maritime a story on Global Seafarer Supply by Broad Geographical Area this page tried to suggest that the days of the OECD ship’s of- Area Current supply Officers % Ratings % ficer might slowly be drawing to a close. The story was, it must (1000’s) (1000’s) be admitted, based on information extrapolated from rather old OECD Countries 184 29.4 143 19.2 data (2005 and 2008 surveys) and current anecdote, due to the Eastern Europe 127 20.3 109 14.6 Africa / Latin America 50 8.0 112 15.0 absence of current hard data in the market. Far East 184 29.5 275 36.7 At the time (November 2009) sectors of the shipping industry Indian Sub-Continent 80 12.8 108 14.5 still appeared to be on the point of collapse, and a number of All National Groups 624 100.0 747 100.0 notable European shipping companies were trading in their Euro- Source: BIMCO/ISF estimates pean crews for Asian. In November 2010, the data shortage has been remedied with the publication of Bimco’s global seafarer supply update, 2010 the gap between the supply of officers (from all countries) which it publishes every five years. It paints a remarkably differ- and the demand is 13,000 (see chart) a modest overall shortage ent picture to that portrayed in 2005. of officers of about 2%. When it is noted that the global supply of Most importantly, what the survey reveals is that the feared officers has increased from 467,000 in 2005 to 624,000 today, it acute shortages that sent wages soaring in the period of rapid is surely not an insurmountable problem. tonnage growth to 2008 has largely abated partly as a result of Indeed some sectors seem to be suffering little. Rather: “Re- the 2008-downturn but also because those companies that could sults from the company survey indicate problems with the sup- persisted with robust training programmes. The result is that as of ply of particular grades of seafarer, such as senior officers and engineers in some labour markets. There is also some evidence of continuing recruitment and retention problems, especially in cer- tain segments of the industry such as tankers and offshore support Supply Demand Gap for Officers Sensitivity to Fleet Growth vessels,” says the Bimco survey. Demand and Supply are shown as Indices: Supply in 2010 = 100 “There is particular concern over the current and future avail- with % gap (supply-demand) ability of senior management level officers, especially engineers,

Demand in the Far East and the Indian Sub-Continent. Generally, how- Supply ever, there are few supply difficulties reported for ratings,” says Demand -2% +2% the survey. +200 -2% "Cold" This is not what would have been expected looking back to Scenario 100 Supply the annus horribilis year of 2009 when European officers ap- 0 peared to price themselves out of the market. But the figures in -1% Demand regard to OECD officers paint a picture of steep recovery. In the -5% period from 1995 to 2005, the number of OECD officers declined +200 -2% Supply Benchmark from 163,000 to 133,000. But in the ensuing five years to 2010 100 it has soared to 184,000 – growth on a par with that of officers in

0 -9% the Far East that has seen numbers grow by 51,000 to the same Demand -11% 184,000. But there is no room for complacency. In its survey Bimco +200 Supply -2% "Hot" outlines three possible future scenarios, the worst of which envis- Scenario 100 ages strong growth in the shipping sector without the comparative

0 growth in training programmes and facilities, presenting an 11% shortage of officers by 2015. Even assuming slow tonnage growth 2010 2015 2020 today’s moderate shortage would not be eradicated, according to Source: BIMCO/ISF estimates Bimco’s findings.

November/December 2010 asiamaritime 13 amasia eyeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Hong Kong shipping in drive to boost maritime hub ambitions What began as a celebration of Hong Kong’s maritime sector has sparked a stark reminder of the ground it has lost

In recent years the port of Hong Kong has seen its global rat- Within weeks of the bunting settling on the territory’s first Mari- ing drop from first to fourth. Over the same period the territory has time Awareness Week, when industry, government and community seen rivals Singapore and Shanghai expand aggressively, often with mixed in celebration of Hong Kong’s maritime heritage, the Hong the assistance of compliant governments. There are now those in Kong Seaman’s Union arranged the historic meeting. Hong Kong’s maritime industries who think it is time the imbalance In a circular put out to the industry in November the Seamen’s was addressed. Union presented a discussion paper including nine proposals to As Asia Maritime was going to press 25 representative organi- be explored at the 7 December meeting, key among which is the sations of Hong Kong’s marine and related industries were mus- demand for a dedicated policy bureau. (See box). tering themselves for a historic gathering on December 7, at the Unfortunately, misunderstandings have already littered the path Clubhouse of the Hong Kong Seaman’s Union above Manning’s to industry-wide cooperation. It was erroneously reported by cer- pharmacy in the Kowloon district of Hong Kong. From these tain sections of the Hong Kong press that the discussion paper was somewhat austere premises almost every organisation of note released after consensus had been reached by the Seaman’s Union, with maritime credentials will seek to fashion a strategy that will the Hong Kong Shipowners’ Association, Hong Kong Logistics see the territory reassert its prime position as an Asian maritime Management Staff Association and the Institute of Sea Transport. In hub. fact the HKSU had issued the paper unilaterally and a number of

Hong Kong Seamen’s Union’s list of proposals • The HKSAR government should take a pro-active and leading • The HKSAR government should negotiate with the Central role in developing its maritime industry and establish a policy Government to obtain more privileges for vessels flying Hong bureau to specifically take charge of all the issues relating to Kong flag. its development into an International Maritime Centre. • Efforts should be made to drive employers and seafarers to • The HKSAR government should liaise and work together with enter into collective bargaining agreements with terms and parties of the maritime circles to formulate a comprehensive conditions practicable under the contemporary situation of strategy related to the policies for the development of Hong Hong Kong and Mainland China. A sum of money should be Kong’s maritime industry. allocated to set up a “Hong Kong Flagged Vessels Assistance • The HKSAR government should take a predominant role in Fund” to counteract any boycott or interfering actions taken establishing a “Hong Kong Maritime Industry Building” (the by other ports against vessels flying Hong Kong flag. modes of operation of the Cyberport and the Hong Kong Sci- • An admiralty court should be set up in Hong Kong on a per- ence Park may be used as reference when designing the oper- manent basis. ation mode of this building) to provide a platform for running • More resources should be allocated to local educational in- ship management and other maritime businesses. Preferential stitutions to organise more maritime courses within a shorter rent and modernised business facilities should be offered to time frame to nurture high-quality nautical graduates and shipping companies, ship chartering companies, shipbrokers maritime professionals for the various maritime service indus- and other maritime-related industries to run their business. tries. By doing such, it may help recruit a younger generation • Effective measures should be adopted to attract Mainland and of local maritime professionals engaging in maritime services. global shipowners to set up companies in Hong Kong and • To speed up the process of construction of the mega-scale register their vessels here. To do this, we should first find out cruise terminal in Hong Kong, efforts should be made to pro- why some local shipping companies relocated their operation mote “cruise ship economics” i.e. maximising the economic headquarters to foreign countries. Efforts should be made to benefit derived from cruise ship business. This will in turn persuade those Hong Kong shipping companies to move their facilitate the consolidation of Hong Kong’s status as an Inter- operation headquarters back to Hong Kong. national Maritime Centre.

14 asiamaritime November/December 2010 amasia eyeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

the parties knew nothing of the intended meeting until they saw it Hong Kong has seen its global in the morning newspaper. status as a maritime hub slip Miriam Lau Kin Yee the legislative council member, who rep- resents the transport industry functional constituency, represented lawmakers at the recent Maritime Awareness Week in Hong Kong in October and the subsequent follow up meeting. She was said to be incendiary after discovering she had been left out of the loop regarding future intent. The HKSOA, too was surprised to see its name appended to a document that recommends that employers be driven into “collective bargaining agreements with seafarers”. Organisational faux pas aside the proposed meeting has elic- ited largely positive if qualified feedback from important players. Executive director of the Hong Kong Shippers’ Council Sunny Ho says: “All parties are keen to enhance Hong Kong’s position as a Bowring says: “I hope to identify the concerns that the attending maritime centre. They are keenly aware that the position has been organisations have and where they hope to take them. There are slipping in recent years.” some issues that I think it would be inappropriate for the HKSOA “We can no longer simply rely on our role as a transshipment to discuss in such a forum and others that we are already tackling port and entrepot but must further develop the professional serv- as an organisation. Beyond that I look forward to the meeting as a ices related to the maritime sector,” he adds. “This cannot be done chance to see where we can all go forward in pursuing matters of without government involvement.” common interest.” Mr Ho says there are bound to be differing opinions but hopes Proposals agreed by the meeting will subsequently be submit- consensus can eventually be achieved across the more than 20 or- ted to the government, while the coalition will also seek a meeting ganisations involved in the initial talks. with the Transport and Housing Bureau which oversees the mari- Hong Kong Shipowners’ Association managing director Arthur time industry. ]

SERVICE & QUALITY ARE WITHIN YOUR REACH

INTERNATIONAL REGISTRIES (FAR EAST) LIMITED The Marshall Islands Maritime and Corporate Administrators

TEL: +852 2526 6641 | FAX: +852 2845 0172 For a complete list of offices please visit: [email protected] WWW.REGISTER-IRI.COM November/December 2010 asiamaritime 15 amhong kong/chinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Hong Kong flies the flag

Members of Hong Kong’s Fair Winds charter grabbed the opportunity to announce their commitment to use fuel containing 0.5% sulphur when A dinner was held for seafarers’ charity calling at the port

Hong Kong’s Maritime Awareness Week was a first step in the territory’s shipping community reclaiming its rightful place in the pecking order

Hong Kong’s Maritime Awareness Week, held between 25 to 31 October, brought together industry participants and government in a way not seen in the territory for many years. “Through Maritime Awareness In gestation since May this year, the steering group joined the Week, the whole industry great and the good from all sectors of the industry for a common purpose. Together they laid on daily happenings designed to ap- cooperated to challenge the peal to a large cross-section of the community in and beyond the territory’s maritime practitioners. status quo.” Among the highlights were “Think Maritime Day” comprised career talks delivered by maritime academics and professionals at As head of the steering group that organised the weeklong selected schools and the Maritime Services Training Institute on 27 event the director of Hong Kong’s Marine Department Roger Tup- October. per declares himself well satisfied that MAW achieved what it set Seafarers Day was celebrated on October 28, with the grand out to do. opening of a new study centre for seafarers at the Hong Kong Sea- “The general population has very little concept of what ship- man’s Union premises; and commemoration of the International ping is and how vital it is to the common good. Unlike other forms Maritime Organisation’s Year of the Seafarer, at the Mariner’s Club. of transport – rail, air and road transport which they all use, with On 29 October, the Marine Department invited the industry and shipping it has always been a case of out of sight out of mind,” he government to celebrate the 20th anniversary of the Hong Kong Reg- says. ister, which hit the 54m gt mark just two weeks previously. “Through Maritime Awareness Week, the whole industry coop- Throughout the week there were several seminars open to the erated to challenge the status quo,” he adds. public that covered the most pressing topics in shipping including And indeed it did. Co-organised by the Hong Kong Maritime pollution, security, maritime law and logistics and maritime studies. Industry Council and the Hong Kong Shipowners’ Association,

16 asiamaritime November/December 2010 amhong kong/chinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Hong Kongers enjoy a day out at the dockyard

Hong Kong’s shipping industry and government officials celebrate the 20th anniversary of the Hong Kong register

they were supported by the Hong Kong General Chamber of Com- “The organisers genuinely thought it was a worthwhile thing to merce, Hong Kong Institute of Marine Technology, Hong Kong Joint do, and they did it with a high level of enthusiasm. All the events Branch of RINA and IMarEST, Hong Kong Maritime Museum, Hong were well attended. In fact we could have had bigger venues and Kong Seaman’s Union, Institute of Sea Transport, Nautical Institute, still have filled them,” he says. Sailors’ Home & Missions to Seamen and the Women’s Interna- tional Shipping & Trading (HK) Association (Wista). No stopping But there are no plans for a second MAW. “It’s not worth doing it Targets twice,” Mr Tupper maintains. “You either get the awareness or you “To make a success of the event we knew we had to get the mes- don’t. Now we have to build on what we achieved. You can’t wait sage across to the government and the Legislative Council. And we another 12 months and try again. had to go beyond the universities and other educational institutes “The post-event consensus was that momentum needs to be already offering some form of maritime tuition to schools and uni- kept up. We also discovered that an individual group can achieve versities that had little concept of what a maritime career has to some things but the effect is much greater when the industry works offer Hong Kong youth in the 21st century,” says Mr Tupper. in cooperation,” he adds. “Finally, but equally importantly, we organised events that Ultimately, Hong Kong’s shipping community has long la- would raise the flag for shipping in a way the community at large mented its marginalisation by the Hong Kong government and if would find enjoyable. anything was a driving force behind MAW it was to get in the face “In terms of publicity we got the message out to a greater de- of the authorities. gree than we have before. This was reflected by the follow up in “We have rattled a few cages,” says Mr Tupper. It is difficult to the mainstream press such as the Oriental Daily News, and the convince government that you are worth taking notice of if you South China Morning Post including articles on the prospects for don’t do something especially things that have an effect on the those considering a career at sea. community. We did that in a way we had not done before.” ]

November/December 2010 asiamaritime 17 amhong kong/chinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Keeping standards up A relative newcomer to ship finance Standard Chartered Bank is offering some innovative solutions to shipowners from its offices in Hong Kong

Standard Chartered Bank has had a long presence in Asia carriers and offshore supply and service vessels, leased on a long- but only since 2007 has the financier reached out to shipowners in term basis to key clients, with whom it is already familiar with and a meaningful way. With the introduction of a new operating leasing have good credit standings. platform Standard Chartered is widening its niche and taking full “The vessels we are looking at will be relatively new (less than advantage of the withdrawal of a number of key rivals. 10 years) at the inception of the lease,” says Mr Scheeping. Heading up the bank’s ship lease and finance department is When determining the leaseback term Mr Scheeping says: “We industry veteran Sander Scheepens. He says of the new venture: will be offering our clients bareboat charters, on long-term lease “Increasingly, clients are looking to us to provide leasing solutions tenors of five to 12 years. The vessels we are looking at will also as well to help optimise their capital structures. be relatively new (less than 10 years) at the inception of the lease. Mr Scheepen says that SC is offering a distinctive approach to “Our approach envisages that we will only invest if we can ship finance in the form of a number of structures including pur- secure a long-term lease from a good credit. All lessees will be chase and leaseback, vessel acquisition and leasing onwards to cli- subjected to rigorous assessment prior to commitment. We will ents and for newbuild financing, providing pre-delivery loans that focus on deepening relationships with existing and selected target convert into a purchase and leaseback at delivery. Other services clients, who have strong market and financial positions and with include cash management, transaction banking and financial mar- whom we are already familiar.” ket services. It is also good to know that despite the rollercoaster ride that “It is in response to our clients’ requirements that we are set- shipping’s fortunes have taken over the last five years, Ultimately, ting up our ship leasing platform. This is also a natural extension of SCB is not in the business of trying to time the market. our product capabilities that will enable us to offer our key clients “We adopt a client centric and cycle neutral approach - we a full suite of financing solutions. Many of our key clients are look- take a long- term view in supporting our clients’ financing require- ing into expanding or renewing their fleets and are currently plac- ments and are fully committed to helping our clients invest long ing substantial orders with shipyards. term. Our strategy is to focus on high quality assets, on long lease “With the addition of leasing solutions we will be well placed terms, secured on fixed rates, to clients with good credit standing to support our clients’ fleet growth and renewal.” and financial positions,” Mr Scheepens concludes. ] Leasing in shipping has a long history and is a prevalent financ- ing option adopted by shipping lines throughout the shipping cy- cle. Examples of such structures include the German KG, Norwe- Sander Scheepens, managing director and gian KS, the Korean SIC structure and the listed Singapore shipping head of ship lease and trusts. financing at Standard Chartered Bank in According to Mr Scheepens leasing offers the following benefits: Hong Kong • Flexibility of the structures offered by leases • Up to 100% financing possible • Superior cash profile – less advanced payment required as well as releasing cash (through sale and leaseback) • Private nature of the deal, compared to raising capital in public markets • The possibility of a larger deal size • The ability to transfer residual risk Mr Scheepens says that SC is in advanced discussions with various clients in Asia who have been attracted to the bank’s leasing mod- els. “We shall announce the transactions in due course,” he adds. For leasing, SC will be focusing on the three major sectors, i.e., dry bulk carriers, container vessels and tankers. Depending on client requirements, the bank will also selectively invest in gas

18 asiamaritime November/December 2010 amhong kong/chinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

A new breed of shipbuilder for China

For years Chinese shipbuilding has been led by state-owned yards and foreign joint ventures. Now a new privately owned elite is emerging

AFTER witnessing an unprecedented tide of order cancella- Jiangsu Rongsheng Heavy Industry turned to the Hong Kong bourse when seeking funds tions and delays in delivery in 2009, China’s leading shipbuilders are dusting off their expansionary plans. The country’s shipbuilding industry appears to be back on track this year as Chinese shipyards witnessed 290% growth in new orders during the first 10 months to 55m dwt from 14m dwt in the corresponding period of 2009. The most striking evidence that confidence has returned to the sector is that Jiangsu Rongsheng Heavy Industry, China’ fifth largest shipbuilder in terms of completion, revived its long-heralded initial public offering plan on the Hong Kong stock exchange to raise as Jiangsu Rongsheng, which was founded in 2005, has grown at much as $1.8bn. The Jiangsu-based shipyard received the nod from breakneck speed and its production capacity has now surpassed the Hong Kong regulator in October and its shares started to trade many state-owned shipyards. It is one of only a few Chinese ship- on the Hong Kong bourse on November 19. yards which have the capability to build 300,000 dwt very large ore carriers. Rich rewards Jiangsu Rongsheng secured a couple of eye-catching orders This finally completes the listing dream of Jiangsu Rongsheng’s over the past few years, which included bagging a contract for founder Zhang Zhi Rong, a Chinese entrepreneur ranked the 26th four VLOCs from Oman Shipping at total cost of $484m in June of richest Chinese by Forbes this year. 2009. The company currently has an order backlog of 84 vessels Jiangsu Rongsheng had planned the IPO twice before, first with a total value of $6bn. in 2008, when it was shelved because of the economic turmoil, According to the listing document, Jiangsu Rongsheng reported and then again in late 2009, when it had to withdraw again due a loss of Yuan440m and Yuan530m in 2007 and 2008 respectively to weak demand for Chinese equities and for shipping stocks. Mr but converted this to a net profit of Yuan1.3bn last year. Zhang said he opted to go public in Hong Kong because the mar- Despite the mediocre financial results, analysts still hold a ket had a broader investor base and procedures were more effec- positive view on the outlook for Jiangsu Rongsheng. A report from tive and straightforward there. Phillip Securities forecasts that Jiangsu Rongsheng’s sales will out- grow most its counterparts and realise a net profit of Yuan4.5bn in Allotting the spoils 2011. About 12.5% of the IPO proceeds IPO will be used to finance its offshore business, which is expected to be the new growth engine The emergence of a new elite for Jiangsu Rongsheng. A Hong Kong-based shipping analyst says the Chinese shipbuilding Jiangsu Rongsheng aims to develop the Nantong yard as its ma- industry will undergo a consolidation in 2011 and 2012 providing jor offshore fabrication yard. The company plans to fork out about an opportunity for top players like Jiangsu Rongsheng to scale up Yuan5bn ($735m) to boost participation in offshore business and their businesses via acquisitions. has invested Yuan2.4bn in an offshore parts yard and ship design Jiangsu Rongsheng is not alone in tapping into capital markets institute in Nantong. in recent months. Another Singapore-listed shipbuilder Jiangsu The plan is for the offshore yard to have the capability to build Yangzijiang has launched its IPO in Taiwan via issuing Taiwan a wide range of products including floating production, storage depository receipts in September. However, Chinese shipbuilders and offloading units, liquefied natural gas carriers and drilling rig should not be complacent about the market resilience. A Hong platforms. Mr Zhang has said he hopes the offshore segment will Kong-based shipping analyst warns that appreciation of the Yuan contribute as much as 40% to Jiangsu Rongsheng’s total revenue in might have a significant negative impact on Chinese shipbuilders the long run. going forward. ]

November/December 2010 asiamaritime 19 amhong kong/chinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Full-steam-ahead A growing group of shipowners shipping cargoes from China to the US believes speed will give them the edge in a world of slow steaming

A complaint voiced in November by a prominent European Early entrant manufacturer of silicon, that slow steaming has reaped no benefits The Containership Company had earlier spotted the potential for ex- for shippers, must have been music to a quartet of ship operators press services out of the Yangtze River area and launched a Taicang who have faced out the winds of change by operating express serv- to Los Angeles (Great Dragon) service with five 3,000 teu vessels ices from China to the US. in April 2010; this now also takes in Ningbo. By avoiding Shanghai US-owned Horizon Lines will be the latest operator to launch Port TCC’s marketing director Lars Jensen says locally based ship- an express container service from China to key destinations in the pers save Rmb 1,000 ($150) on trucking costs. Using Taicang has US when its maiden voyage departs from Ningbo on 14 December also enabled TCC to keep costs low. for Los Angeles via Shanghai, arriving in just 11 days. Matson Navigation is a relatively old hand at express services from the US to China compared to the competition. It first launched Fast movers transpacific services between Ningbo, Shanghai and Long Beach Other lines that have eschewed sailing speeds of 17 or 14 knots and in 2006. More recently it expanded the service locations to take in multiple calls are Matson Navigation, The Containership Company Hong Kong and Yantian, now offering two services from China – and TS Lines. “As other carriers reduce service locations and slow CLX1 and CLX2 together with the CLX2 westbound route. service speeds, US shippers continue to tell us they want fast and In a recent interview Matson Navigation spokesman Jeff Hull reliable services alternatives not only port-to-port but inland to final highlighted another advantage in operating a fleet of smaller ves- destinations as well,” says Brian Taylor, senior vice president of In- sels on these strategically important routes: “Being a smaller carrier ternational Services at Horizon Lines. allows us to provide higher levels of customer service. Our smaller To cater to shippers needs for a variety of options Horizon Lines vessels facilitate faster loading and unloading,” he says. is deploying five vessels of around 3,000 teu on the 11-day service. And the operator aims to continue the emphasis on speed when the Breaking out of Asia cargoes hit land. Last but not least, the Taiwanese carrier TS Lines is also getting in “Horizon Lines plans to offer some of the fastest inland transit on the full- steam-ahead game. Primarily an intra-Asia specialist TS times in the industry, including 15-day availability in Kansas City Lines will launch broadly similar ocean services with a route that from Shanghai and 16-day availability in Dallas, using scheduled takes Hong Kong, Yantian, Ningbo and Shanghai before heading intermodal rail service from Los Angeles every week,” says Mr off to Long Beach in 10 days. As with The Container Ship Company Taylor. and Horizon Lines, TS Lines will deploy five 3,000 teu vessels on its “Horizon Lines will also offer express inland service to Chi- express service. cago, Memphis, Atlanta and Charlotte using on-dock rail connec- TS Lines planning director Jane Wu says of the new service the tions to avoid drayage fees on the West Coast, saving customers company would benefit from lower costs in an otherwise slack season. time and expense. Horizon Lines plans to expand the inland Despite references to the slack season, all the indications are express network to other locations throughout the United States that the four operators will expand capacity on their services after next year,” he adds. the Chinese New Year and other operators will follow. ]

20 asiamaritime November/December 2010 amhong kong/chinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam China’s evolving terminal scene Managing director of port operator China Merchants Holdings (International) Hu Jianhua discusses the ongoing evolution of Chinese ports

It was put to the managing director of Hong Kong-listed China CMHI managing director Hu Jianhua Merchants Holdings (International) Ltd Hu Jianhua that a series of developments in 2010, both domestic and international, could im- pact Chinese ports and thus CMHI. These include the economic dif- ficulties of certain European economies, the countering increase in intra-Asia trade and the migration of many Chinese workers inland as manufacturers seek to avoid the increasing costs of operating in the coastal cities. For the most part, Mr Hu is sanguine about prospects at least in the short term: “Although the global economy experienced some ups and downs during 2010 I don’t think it will go back into reces- sion,” he says. “China’s container port market still mainly depends on Europe and US consumption. Intra- Asia trade is on a rising trend and as such it plays an important part in the global economy. But this trade is not large enough to replace Europe and the US in the short term.” Under the circumstances, assuming a recovery of the global economy at present rates throughput at Chinese ports will continue Facilities in the PRD would be particularly adversely affected as it to grow albeit at a slower pace than before the downturn,” he adds. is still the main trade processing base,” he says. Important CMHI facilities are in the major coastal hubs of the CMHI has been actively developing a strategy to minimise Pearl River delta and the Yangtze River delta, which are particularly the downside and capitalise on opportunities. “CMHI is taking a sensitive to shifts in the global economy. “We experienced negative two-pronged approach to maximise revenues. One measure is to growth in 2009 due to the financial crisis, but this year we have ex- strengthen our internal management through constantly refining perienced double-digit growth and final figures will exceed those of internal factors to improve the operating efficiency including cost 2008,” says Mr Hu. controls, resources integration and the like,” he says. But as throughput slows in the dying days of 2010 many Chi- CMHI has also scaled down on its investments and where it nese coastal ports would not have reached anything like their is investing the company is casting its net overseas. “We have re- operating capacities for the year, following years of prestigious but ceived a letter of intent on a port project in Sri Lanka and an agree- not urgent port development along China’s vast eastern coast. “The ment has been signed for our port in vestment in Lagos, Nigeria,” newly-built port facilities can’t possibly be filled. This excess capac- says Mr Hu. ity will keep up the downward pressure on China’s port operations An ongoing greening of CMHI’s port facilities is seen as an in- as a whole,” says Mr Hu. vestment rather than an expense. “Port greening not only represents Currency exchange rates may also prove to be a thorn in Chi- a push toward environmental protection. Its implementation ben- nese port business in 2011, according to Mr Hu. “The second round efits operating efficiency as it includes energy saving and reducing of the quantitative easing policy in the US will further depreciate waste, standardising operations, optimising procedures, port envi- the value of the US dollar. This may lead to inflation and growing ronment governance, safety and other aspects,” he says. asset bubbles, negatively affecting the global economy.” Returning to China, Mr Hu points out that CMHI is not solely Mr Hu is also wary of the effects of an appreciating Rmb. “Since reliant on box traffic. “CMHI is a multi-functional port operator the US and Europe are still China’s main export markets, if the handling domestic and imported bulk cargoes. China is a country Rmb appreciates too fast, the large increase in factor costs and the in huge need of imported bulk cargo, therefore, the development of reoccurrence of trade protectionism will threaten China’s exports. bulk facilities is essential to our port business.”]

November/December 2010 asiamaritime 21 amhong kong/chinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Culture by the boxful OOCL likes to put on a show. But it is also helping the less fortunate without making a song and dance about it

The global shipping industry has long been given a raw deal Material benefits by the media. Frequently cited as a source of oil and air pollu- OOCL’s sponsorship takes the form of discounted carriage. In re- tion but ignored in their vital role of making the world go around turn the company receives tickets for its valued customers. through the global distribution of essential goods; many shipown- “We also gain marketing benefits through logo exposure. We ers scratch their heads to find a way of being noticed as a force for measure this via feedback from customers and in dollar terms re- good. garding the marketing benefits. There are also intangible benefits But Hong Kong-based Orient Overseas Container Lines has such as the increased appreciation of arts and culture in the local known for years how to present a caring profile to existing and community,” says Mr Ng. potential customers, and the wider community at large. The com- “Event sponsorship raises our profile in the local community as pany’s founder C Y Tung always espoused a container transportation company that the theory that with trade comes culture, really takes it personally. These kinds of ideas and education. Since those early events involve precision timing and an ab- times OOCL has put theory into practice solute dedication to getting the box to the by supporting the arts through its ships right place at exactly the right time. Even and its pockets, carrying the best of music one minute can make all the difference and theatre around the world. at show time – when the curtain goes up, Director of corporate planning the set, stage and all the props have to be Stephen Ng says: “Usually, we are ap- there and be in pristine condition. This is proached or referred to events by our OOCL’s responsibility and we believe this long-term partners – Lunchbox Theatre is portrayed to our customers and the lo- Productions or the Really Useful Group – cal community through sponsorship of the regarding shows that are appropriate for events,” He adds. OOCL’s customers. Ensuring the safe arrival of such spec- “These organizations are familiar with tacular shows as “La Boheme” and the the type of high quality show that our cus- “Walking with Dinosaurs” project consti- tomers prefer. They also know that OOCL tutes an extremely high profile strategy for can be trusted to get the containers to a shipping company whose main assets their destination at the right time. We are are far from the view of the man, woman dedicated to the maxim that “the show or child on the street. Some would say that must go on”. OOCL’s combination of tal- OOCL’s other examples are even more im- ented people, extensive global network portant if not quite so glamorous. and sophisticated IT systems means that we are the ideal partner as “We recognise that the communities which we live and work Official Ocean Carrier for many world-class events.” contribute to our success as a company. In return, we focus our community efforts in helping to provide a well-rounded education to the youth, charity relief to the needy and cultural entertainment to the whole community,” says Mr Ng. Events sponsored by OOCL during the last 12 months “Our company is heavily focused on providing education for ABBA Mania, Ben Ten Live, CATS, Chicago, GREASE, North- young people. The “Tung OOCL Scholarship” was set up in 1995 ern Ballet, Opera Australia (Bliss), Opera Hong Kong (Puc- to support the continued education of youth. Currently, the Tung cini’s La Boheme), High School Musical, Jekyll & Hyde, Cin- OOCL Scholarship comprises two programs: University Scholar- derella on Ice, Swan Lake on Ice, Adventures of Peter Rabbit, ship Programme (China) and Employee’s Children Scholarship Pro- Merchants of Bollywood, West Side Story, and coming up in gramme. December – the fantastic Walking with Dinosaurs project. “The University Scholarships have been established in six uni- versities: Tsinghua University, Peking University, Fudan University,

22 asiamaritime November/December 2010 amhong kong/chinaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Some culture to get your teeth into Wake up dear. I think our ship has just come in

Shanghai Jiaotong University, Zhejiang University and Nanjing Besides, OOCL also participates in other types of community University. support. An on-going project that OOCL is involved in is Project “Since the establishment of the scholarship more than 2,500 HOPE (Health Opportunities for People Everywhere). OOCL is also undergraduate and post-graduate students have been awarded assisting with the transportation of the latest diagnostic medical scholarships with more than $2.3m in funding. Each year, a selec- equipment and supplies from the United States (donated by global tion panel will be set up in each university to shortlist the potential corporations) to Shanghai Children’s Hospital, China where those candidates, both undergraduates and post-graduates, based on ac- less fortunate children are able to receive the best medical care ademic results and performance, plus active participation in extra- and attention. ] curricular activities. With this programme, we hope to facilitate the 00636well-rounded ASIA MARITIME development 7/8/10 6:20 of our PM youth,” Page 2 he says. C M Y CM MY CY CMY K

November/December 2010 asiamaritime 23

Composite amreefer tradesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Wither the reefer ship? Safmarine: Keep on trucking

Two experts in the carriage of frozen and cool cargoes discuss the future of reefer transportation

A recent report in the shipping press went someway to writing Argentina to the USA and Europe,” says NKY Cool vice president the obituary of the reefer ship. Poor investment return due to weak John Rowland. freight rates has led to a point where only three such vessels remain By contrast Safmarine’s main reefer trades are those between on order. Meanwhile, potential owners of conventional reefers Africa and northern Europe and the Mediterranean as well as the were being denied the lifeblood of finance because of perceived trades to/from India and the Middle East. The east Coast of South poor prospects for the ships due to fast encroaching competition America is another key trade for Safmarine. from reefer containers. Safmarine has also made a move into emerging Asian reefer Asia Maritime spoke to two leading operators: Safmarine, cargoes. which is only active in containerised reefer trade and NYK Cool AB “Currently our main reefer volumes out of Asia are from China which has a total fleet of 44 specialised reefer vessels with under (accounting for approximately half our reefer liftings in the region, deck capacities of between 3,500 plts to 6,900 plts. A number of and mostly to/from Africa) and to a lesser extent Vietnam, Japan the vessels have reefer plugs on deck so reefer containers are also and Thailand. Cargo includes fish, garlic, fruit and frozen fish/ catered for. seafood products,” says Safmarine’s Asia Region executive John The two shipping companies have carved out geographical Bordreau. niches in the sector that rarely clash. The main trading routes em- As both companies ship a variety of frozen/cooled products ployed by NYK Cool AB are those involving the carriage of banan- seasonal highs and lows are overcome for the most part. While as from Central America. Indeed the majority of banana cargoes citrus and deciduous fruits move seasonally, Mr Rowland says the are still carried on specialised reefer vessels. all-year transportation of bananas minimises the impact. The ongo- Bananas are the single biggest perishable cargo transported by ing traffic in bananas has also enabled NYK Cool to charter out a sea, totaling around 15m tonnes. number of vessels at considerably higher than spot rates. “We are also involved in the transportation of deciduous and Safmarine manages to keep its reefer boxes generally full citrus from South Africa to Europe and the Far East, kiwifruit from through the year because of the diversity of products carried: “Fresh New Zealand to Europe and deciduous and citrus from Chile and fruits and vegetables are always seasonal but generally, as one

24 asiamaritime November/December 2010 amreefer tradesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

season ends, so another starts. This said, the reefer flows/volumes do experience highs and lows but these are influenced more by fluctuations in demand at the receiving end, than by the seasons. “Apart from charging BAFs, Even meat and fish can be considered seasonal in nature because volumes do vary,” says Mr Bordreau. the conventional freight

Reefer vessels Vs Reefer boxes pricing system is much more So why are reefer vessels allegedly under threat of extinction as transparent.” John Rowland the report suggested? Or are they? Even Safmarine does not believe that reefer vessels are finished. Not yet at least. NYK Cool AB “We do believe that demand for conventional reefer vessels will continue, however, it is likely that their share of the market will continue to decrease as more perishable goods are moved in con- tainers. Conventional vessels – particularly the bigger vessels - are likely to remain in demand for the main fruit trades from Central Safmarine’s Mr Bordreau points out. “Containers are popular for and South America and South and West Africa. several reasons including an unbroken cold chain; the fact that “Investment in new conventional vessels is, however, needed the produce is subjected to limited handling and therefore suffers as the average age of vessels is between 25-30 years,” says Mr minimal, if any, damage; and the preference for shippers to ship Bordreau. the produce from door to door, instead of port to port. “We are also more likely to see investments being made in big- “Conventional reefer vessels also tend to flood the market with ger vessels as opposed to smaller conventional vessels, as the latter product, which drives the market prices down for the wholesalers - appear to be losing market share to the containerized reefer sector. containers therefore also support price and supply stability as well Predictions are that, globally, the container Vs conventional split as reducing spoilage. will be about 40-60 by 2015,” he adds. “Lower landside costs add to the attractiveness of shipping per- Mr Rowland agrees that there is considerable life left in the ishables in containers versus bulk shipments in refrigerated vessels. specialised reefer vessel: “View the heavy movement of bananas, Furthermore, the technology deployed in today’s reefer containers and the preference of carriage by specialised reefer vessel, we do also allows temperature to be maintained to the centigrade - which not envisage the demise of the specialised reefer. Even though the in turn allows shipping lines to carry produce at the temperature specialised reefer fleet is aging we do not anticipate a rash of new most beneficial to a particular product.” buildings. New vessels will be built but against long-term charters Mr Bordreau adds: “In general, the advantages offered by mod- or firm business opportunities.” ern reefer containers include computer monitoring, optimal insula- In fact, according to Mr Rowland, there are some very good tion and reliability - as well as sophisticated cooling technologies. reasons for the continued existence of specialised reefer vessels. “Meat and fish are the main frozen commodities and the con- “Specialised reefers traditionally sail directly from ports close tainer is perfectly suited to deliver manageable order sizes in prime to where the fruit is grown to ports close to where the product is condition. Shipping frozen protein (meat, poultry and fish) in required. On container vessels reefer cargoes are usually in the mi- containers also allows the shipper to reach more remote markets, nority on the majority of trade lanes carrying dry cargo. Therefore typically in West Africa, and sell the goods hard frozen direct from their schedules cannot cater only to the wishes of the reefer ship- containers. This supports sustainable inland transport, preserves pers,” he says. food integrity and reaches markets ‘hungry’ for a reliable protein “For larger reefer shippers there are more hassles with docu- source,” he concludes. mentation when shipping substantial quantities in containers And finally, what of the future for reefer cargoes? against specialised reefers. Also there is the question of carriage Mr Rowland sees new demand emerging. “There is expected temperature integrity. In a specialised reefer vessel it is easier to to be a continuing increase in the worldwide trade of perishable control carriage temperatures. Also with all the Government im- products. For example, Russia has become a very important im- posed security regulations in the USA and in the European Union porter of fruit and poultry over the last few years and as Russians’ from January 2011, there are many more and stricter regulations disposable income increases this trend should continue. There is for shipments in containers than for conventional shipments purely a lot more emphasis worldwide on the dietary importance of fruit because of the transparency of cargo conventionally loaded gives and this contributes to increased consumption,” as opposed to being enclosed in a container prior to receipt on the But Mr Bordreau thinks much new demand will be carried in vessel,” he adds. boxes: “More and more fruit is being shipped in containers (reefers) Of course boxed reefer cargoes have their advantages too, as as opposed to refrigerated vessels (conventional). This is because

November/December 2010 asiamaritime 25 amreefer tradesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

NYK Cool carries conventional and boxed reefer cargoes “The use of containers has become more price-competitive, largely due to the current shortage of conventional space, which has resulted in freight rates, per pallet, being higher for conventional vessels compared to containers.”

the use of containers has become more price-competitive, largely restoration, congestion, THC etc. Apart from charging BAFs, the due to the current shortage of conventional space, which has re- conventional freight pricing system is much more transparent,” he sulted in freight rates, per pallet, being higher for conventional ves- declares. sels compared to containers.” Mr Bordreau hits back: “Also of growing importance to pro- Mr Rowland counters with the transparency and predictability ducers is the use of scheduled, liner shipping services Vs tramping argument when it comes to freight rates. services. Improvements in post-harvest treatment and refrigeration “Generally the pricing systems employed by the container technology have also extended the shelf life of several products, al- lines is more complex than that normally used by specialised lowing these products to travel over long distances by sea. reefer operators. On top of the base freight rate, the Lines normally “These advancements offer reefer container operators signifi- also charge a number of additionals/surcharges (BAF, CAF, rate cant opportunities to increase their business.” ]

Marine Lubricants

Environmental responsibility. Chevron’s Clarity® Marine Lubricants deliver the benefits of ‘green’ operation and dependable high performance — the perfect balance between environmental responsibility and operational cost.

Environmental benefits: • Inherently biodegradable • Non-toxic to aquatic species • No corrosive active sulfur additives

Environmentally responsible lubricants for fleet operators.

For more information, contact your Chevron account manager, or visit www.chevronmarineproducts.com.

© 2010 Chevron U.S.A. Inc. All rights reserved. All trademarks are the property of Chevron Intellectual Property LLC.

26 asiamaritime November/December 2010

Chevron Global Lubricants 104343->Asia Maritime Magazine Half-page 185x130mm Clarity Ad.1.indd 1 7/26/10 3:08:01 PM amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Pulp shipping STX Pan Ocean is grabbing a slice of the European-dominated pulp shipping market

STX Pan Ocean, after a period of relative and understandable Now with a ratio of 20% owned vessels, 20% of the fleet on quiet during the global credit crisis that laid low the shipping in- charter terms of five years or more and 60% on short-term con- dustry as a whole, is now back with a roar pursuing aggressive ex- tracts or spot chartered, STX claims it has its most efficient portfo- pansion at the behest of parent company STX Corp. lio. “Although the portfolio is dependent on the market condition, With 47 vessels of various classes and sizes already on order, our business strategy is following this model,” says Ho Jeong Jin, STX pan Ocean announced in November it would be ordering as STX spokesperson. many as 20 new open-hatch general cargo carriers as well as a trio Although STX Pan Ocean is primarily known as one of South of kamsarmaxes. Korea’s leading dry bulk operators it has long been the company’s During the preceding 18 months the company has put out intention to reduce its dependency on the sector. In addition to a to the bond market on no less than six occasions and now has a growing fleet of tankers including LNG carriers, the company has war chest worth close to $1bn to pay for the new orders when a been boosting its liner division over the last three years from 20 at shipyard(s) is decided. the end of 2008 to 26 as of November this year. The company has The company’s cash position was bolstered at the end of 3Q10 also extended the reach of its services. when it revealed a net profit of $63.7m, compared to a loss of “Our performance shows that sales from non-dry bulk busi- $93.4m for the same period in 2009. The company’s January to ness have been increasing every year on the strength of continuous September revenue increased 59% to $4.1bn from $2.6bn in 2009, investment. In 2009, it has increased from 10% of non-dry bulk largely attributable to higher freight rates. sales to 20%. We plan to keep reinforcing non-dry bulk business as ever so that it will be raised to 30% of the total sales in the long Beating Europeans to pulp term. Our main aim is to establish a balanced business structure for STX has already found employment for the kamsarmaxes, having maximizing the profits,” says Ms Jin. signed a 25-year contract worth $5bn with Brazilian wood pulp “The liner division of STX Pan Ocean is also operating outside manufacturer Fibria Celulose that begins in 2012. The deal was a the intra-Asia region now. We expanded our routes to Oceania in first for the company that has no previous experience in shipping 2008. We are running CKA and ISA service now and have several the product. services calling Middle East and the Indian Sub-continent: FMX, Other lucrative COAs include two 15-year consecutive voyage FIX, NKX, TSC. contracts worth $300m to ship steaming coal from Australia and “Our containership arm saw revenues increase by over 65% Indonesia to South Korea for Korea South East Power and Korea to $504m. This was primarily due to an increase in both cargo vol- Southern Power. ume and freight rates with the revival of the commodity market,” she adds.

STX Pan Ocean continues STX group has achieved full vertical integration to diversify its fleet in shipping and logistics, shipbuilding & machin- ery, construction & plant and energy and executed successful acquisitions. As the core company in the shipping & logistics area, STX Pan Ocean is not only operating its own business independently but also endeavoring to maximise the synergy effect by working in close cooperation with other subsidiaries on the basis of the market economy. “Moreover after STX Pan Ocean became an af- filiated company of STX group in 2004, gradually we have created a significant presence in contain- ers, tankers, PCTCs and LNG vessels as a result of developing the non-dry bulk sector,” Ms Jin con- cludes. ]

November/December 2010 asiamaritime 27 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Korea’s maritime partnership Korean Register celebrates being at the heart of South Korea’s phenomenal growth as a shipbuilding nation for 50 years

competence and technical ability was such that it could be Kr classed its first ship Eunryong in 1962 accepted at the high table of the International Association of Classification Societies; a feat it achieved in 1988 after fulfilling exacting requirements of: • Classing a fleet in excess of 1m tonnes • Gaining a staff of more than 50 technical professionals • Publishing an English version of “rules for steel vessels” • Publishing a regular “Register of Ships” • Built a reasonable domestic/overseas split of business On 17 September 1975, KR was duly authorised to become an associate member of IACS. By 1980 South Korea had become the 19th largest ship- owner/operator with a fleet weighing in at 4.17m tonnes includ- ing 1m tonnes of chartered-in tonnage. At the same time, as a The Korean Register was incorporated on 20 June 1960. shipbuilder, the nation had grown to become the 10th largest With hindsight the move demonstrates South Korea’s fiercely globally, boasting 2.8m tonnes of construction capacity. KR was independent spirit. Just 15 years after liberation from the Japa- easily keeping pace with the growth. In 1980 KR had a classed nese, the country was already building a vision that 40 years fleet that had grown to 1586 ships or 4.92m tonnes. later would see it become the world’s largest shipbuilder and the The 1980s was politically disruptive for South Korea as it owner of one of the largest fleets on the planet. slowly changed from an autocratic system of government to to- These were humble beginnings: at the time of KR’s incorpora- day’s largely liberal democracy. But industrial growth continued tion the Korean fleet comprised just 39 vessels with a combined apace throughout the decade. With the growth of the country’s gross tonnage of 100,953. Korea’s largest shipbuilder, Korean Shipbuilding Corporation was only capable of buildings ships of less than 100 tonnes. The first vessel to be classed by the infant classification society in 1962 was Eunryong, a 1048 tonne bulk carrier owned by Samik Shipping. But growth was to come quickly. Urged on by a military gov- KR Chirman Oh ernment keen to industrialise in a bid for rapid national wealth Kong-Gyong and development KR was set to play a vital role in growing the means of transporting goods in and out of the country. From the outset KR executives realised that international standards within the organization could be gained more swiftly through interna- tional cooperation. Throughout the 1960s KR entered into cooperation pacts leading to reciprocal work agreements with ClassNK, ABS, LR and DnV. By the end of the decade KR had made its first break- through on the international stage by virtue of the Panamanian government’s offering of authority to issue certificates relating to ILLC-1966 and SOLAS-1960. The agreement, however, was something of a false dawn. For the next five years KR was set the task of proving its Unfamiliar ground: Cap Jervis christened in Peru

28 asiamaritime November/December 2010 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

heavy industrial complexes and support for a nascent chemical industry, South Korea’s shipping and shipbuilding efforts soared. When KR achieved full membership of IACS in May 1988, it did not use the success to rest on its laurels. Instead in the same year it pushed hard for an In- stitute Cargo Clauses listing and was ac- cepted in 1989. In January 1990 KR was listed as the tenth classification society to achieve this status. This was a particularly important breakthrough as it allowed KR’s registered fleet important benefits and dual registered vessels were now able to enjoy reduced survey costs and most importantly the listing helped encourage KR celebrates its 5th anniversary in Hong Kong foreign owned vessels to apply for KR Classification, thus providing an excellent step in the interna- dition to his technical know-how. Among his achievements dur- tionalisation of the society. ing his year of tenure Mr Oh tackled IACS’ damaged credibility But KR had already made its debut on the international stage from the Erika and Prestige incidents; developing the EU mari- when in the 1980s it established an IMO-liaison secretariat. In time safety policy and IMO GBS; adopting IACS CSR comments 1989, the manager of KR’s London office, Kim Tae Woo was the from government and the shipping industry; and developing the first KR official to serve as chairman of an IMO special working RO Code at IMO/MSC/FSI group when he took on the role at the Fishing Boat Safety Treat- At the same time Mr Oh sought to find an amicable settle- ment group. Since then representatives of KR have chaired the ment of the EU investigation into IACS activities, during which Hazardous Article Committee and the FSI Committee. he first had to overcome concerns that a non-European was at- tempting to solve a European issue. Mr Oh successfully steered Into China and beyond the parties to a satisfactory conclusion by August 2008, when In 1993, as the result of relationship building with the Japanese it was agreed that the structure of the IACS would be revised. operator Shido Shipping, KR got its first opportunity to class ves- Not only was the investigation suspended but the IACS gained sels in Japan. And by 1996 the society was conducting ship repair a new credibility with a guarantee of the independence of its surveys in China. In 2000 it conducted its first newbuild survey Quality Management System Certification Scheme; the opening and has since conducted a further 75 such surveys up to 2009. KR of Common Structural Rules and other IACS technology to non- is currently working on 55 surveys for large vessels together with a members; IACS membership qualification by outside experts; a number of ship facility surveys. Its survey activities continue to take reorganisation of membership standards (abolition of associate on a regional aspect, notably into Southeast Asia. members status, quantitative standards of capacity) and technical During the first ten years of the new millennium KR’s growth assistance to non-IACS members. has been such that it now boasts more than 43m gross tonnes Subsequently the Indian Classification Society has joined the registered. This has been achieved at a time when it has been in- ranks of the IACS. volved in significant diversification into the areas of wind power, The story of KR began amidst a country exhausted by war maritime energy, fuel cell and gas liquefaction and weakened by poverty. The extraordinary resurgence of the country to become the 15th largest economy in the world gave Heading the top table South Korea the richly deserved title of Asian tiger. In 2008 KR Chairman Oh Kong-Gyun received the ultimate ac- KR has played no small part in South Korea’s development colade by chairing the IACS. Mr Oh’s job was made the more over the last 50 years. As the country has claimed its place on difficult as his appointment to the top job came shortly after a the world stage so, increasingly has KR. Not only in its physical number of IACS member organisations came under investigation presence – it now has over 30 offices worldwide and 15 domes- for violation of EU Competition law. tically – but also in the size of the tonnage classed 42m grt – and As a result Mr Oh’s diplomatic skills were called upon in ad- finally in an all-important voice for Asia. ]

November/December 2010 asiamaritime 29 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Heavy boxes Hyundai Merchant Marine has ridden out the financial crisis with flair and is now also looking to capitalise on a resurgence in project work in the region

Hyundai Merchant Marine, South Korea’s second largest HMM launched the Heavy-lift service in 2007 to build on its shipping company, performed one of the best financial turnarounds achievements. in the shipping industry during the third quarter of 2010. The com- “We’ve made full use of such experiences to establish sub- pany reported a Won297.6bn ($260m) operating profit, reversing a stantial market share in both projects and plants in Korea whose Won242bn loss for the same period in 2009. location is a primary hub for Asian project activities and a primary The surge in profit was firmly led by the company’s liner divi- source of the project-related equipment. sion, which saw its operating profit soar from Won175bn in the “We currently provide project cargo services between the Far third quarter last year to Won327bn this 3Q10. East and the Middle East/India using five modern multipurpose car- “With the faster than expected recovery of the global econ- riers. They carry lengthy, super-heavy, and highly voluminous car- omy the Pacific and Europe trades, HMM’s main service routes, goes such as petro-chemical equipment, wind energy, power plant achieved the best business profits during July,” says Lee Seock- facilities, and so forth. To meet clients’ needs, our project cargo Dong senior vice president, head of Liner Unit, HMM service offers individually-tailored solutions using a 3D solution HMM’s impressive recovery was largely attributable to such system to consider the size and specific requirements of each car- factors as the expansion of service lines and the successful comple- go,” says Mr. Seo Sang-Hun general manager, Heavylift & Project tion of a general rate increase and peak season surcharges. Team, Bulk Unit, HMM. More importantly, from a strategic point of view, HMM ex- In addition to its current Far East Middle East Service, HMM panded its services towards South American and East African areas. will expand its project cargo service worldwide by 2014 through On the all important Asia-Europe and transpacific services HMM 3 gradually extending its service line to Europe & the Mediterranean GRI for the Europe lines and 2 PSS for the Pacific lines. As a result, Sea, the U.S, Africa, Australia and further. HMM accomplished 13% operating profit to sales ratio during the To help meet this goal, HMM is chartering in six new heavylift first three quarters of this year. vessels; the first two vessels were delivered in November 2010, “In addition, HMM has focused on high-profit cargoes through with the balance scheduled for delivery by the end of 2011. thorough cost control under yield management, and maintained the Explaining the reason behind the expansion in capacity Mr Seo cost-saving strategy on fuel oil through slow steaming,” says Mr Lee. says: “Korean EPC companies are in a dominant position in world plant markets and they have won countless mega-projects varying HMM heavy lift service from oil & gas, petrochemical, power plant, and renewable energy After a period of gestation HMM is now looking to increase its especially in the Middle East region. For this reason we have a very presence in the project cargo market in Asia. positive outlook for this business sector. Banking on the success of various projects up to 2006, “We expect strong growth in overseas plant orders worth

30 asiamaritime November/December 2010 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

$80bn this year alone. It seems pretty certain there will be a tre- “The project cargoes are getting bigger, heavier, and far more mendous increase in cargo volume over the next three to four years voluminous than before. Projects taking place are more likely lo- with the real pick-up expected in 2012 through 2014 so we expect cated at a remote area. Clients’ requirements on suitable tonnage, very strong demand for vessels from the Far East, a primary source shipping know-how, and engineering technology are increasingly of heavylift and project cargoes.” complex,” says Mr Seo. Regarding the deployment of the new delivered vessels HMM “To achieve our goal, as the top heavylifter in the Asian ship- is working on some mega-projects with Korean EPC companies. ping industry by 2015, we’re going to expand service areas to “We’ll make a long term contractual agreement with them sooner opportunities where exist. Our next target will be North African or later with the new buildings. But they are not designated for a power plant and South American infrastructure projects in antici- specific project and we’re going to position our tonnage with more pation of the 2016 Olympic Games. We will place the first vessel, flexible approach,” says Mr Seo. for a liner service, in the beginning of next year for North Africa Although there are some clear signs of recovery already the and later on for South America in 2012. project market is still slow because the status of cancelled and de- “We will also strengthen the operation of HD Atlas Co Ltd layed projects in the Middle East has remained mostly unchanged. which is a joint venture company bringing together HMM, Dong- This means freight rates are at present subdued due to insufficient bang Transport & Logistics, the leading domestic heavy cargo land cargo movement in the Far East during 2010, although the situation transporter, and Hyundai Logiem, providing land transportation is gradually improving. services for heavy cargo needed for large-scale plant businesses. However, HMM says it expects much higher rates after upgrad- “To meet our clients’ requirements, our main concern is to ing its lifting capacity with modern tonnage. bring more competitive tonnage into our fleet after considering the HMM says it is in the heavylift business for the long-term and number of new project contracts we will make and the situation aims to be among the leaders in a relatively short space of time. Korean EPC companies find themselves in,” he concludes. ]

November/December 2010 asiamaritime 31 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Hanjin’s eye on the future South Korea’s largest shipping company is leveraging on its ability to buy the biggest and the most advanced maritime technology

Hanjin Shipping took delivery of the 10,000 teu Hanjin Korea in June and immediately deployed it on the company’s Asia-Europe service. A further four mega-sister boxships will be joining the fleet during the second half of 2011, also on Asia-Europe duty. Just what will happen to the older vessels on the service has yet to be decided as uncertainty remains about the global demand/ capacity equation later next year. According to the head of Hanjin’s public relations team John Park Hanjin is reviewing its options and could take the plunge for more vessels during 2011. Ultimately investment may be deter- mined by the emergence of positive medium to long term trends but Mr Park concedes that the picture regarding the health of the market in 2011 is currently murky “After experiencing the unprecedented market collapse in 2009 and the rebound this year, it is difficult for us to make assumptions on how the market will turn out to be going forward. However, we Hanjin Korea the first of five 10,000 teu vessels for South Korea's largest shipping company are preparing for the possible increase in supply caused by the de- livery of new vessels next year,” he says. the container terminal industry. There is certainly a degree of cost China logistics savings. Other advantages include drastically improved productiv- What is certain is China’s driving need for logistics provision as ity in addition to the introduction of new, more environmentally manufacturing migrates inland. Hanjin has been moving swiftly to friendly equipment,” says Mr Park. fill the spaces, after first reinforcing its presence on the coast at the “Perhaps one of the greatest benefits of having a semi-automat- most important ports and terminals. ed terminal is the ability to keep employees out of harm. Although “Since the establishment of our first local office in Shanghai Hanjin has been one of the pioneers of utilising semi-automated in 2006, we now have eight others: five in northern China includ- technology on a global scale, this evolution is already in full ing Dalian, Tianjin, Shijiazhuang, Qingdao and Ningbo and three swing as many of the new terminals which are now being planned in southern China including Hong Kong, Shenzhen and Xiamen. around the world have varying degrees of automation being built In addition to these local offices, we are operating On Dock Con- in,” he concludes. tainer Yards in Shanghai, Qingdao, Dalian and Tianjin providing forwarding as well as trucking, customs, warehousing and consol- Dry Bulk ing services,” says Mr Park. Hanjin Shipping has long been a significant presence in South Ko- “With regard to the growth of the industry inland and the re- rean dry bulk carriage, particularly at the larger end of the model quirements for logistics support, we are currently transferring a with a strong fleet of capesizes. But with ship prices lower than number of employees to the Chinese interior to study the changes they have been for some years the company has taken the oppor- within the local logistics industry and trying to set up our network tunity to move into the market for handysize and panamaxes to in the local logistics hubs,” he adds. secure modern tonnage, diversify the fleet and buy vessels at rea- sonable prices. Terminal strategy Mr Park thinks the move is a good educated bet based on sta- For Hanjin Shipping the bold move toward semi-automated ship- ble if not spectacular freight rates for the foreseeable future. “China ping terminals did not come without a fight. But earlier this year its is expected to go soft on their energy reduction policy, so we be- efforts met with success at its facility in Jacksonville on the US east lieve the demand in the dry bulk market will improve. On the other coast. It now joins its similarly cutting edge terminal at Algeciras in hand, due to the delivery of new vessels scheduled in 2011, which southern Spain. is more than 20% of the current fleet, we expect the oversupply to “Semi-automation is the next logical step in the evolution of continue for sometime.” ]

32 asiamaritime November/December 2010 amsouth koreaamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam More than a shipbuilder Hyundai Heavy Industries continues to innovate in the area of shipbuilding even as the sector ceases to make up its core business

Since the arrival of the floating, production, storage and of- Also involved in the project is DNV. The classification society floading platform the world has been long used to the ability of is responsible for providing feasibility studies, risk assessment and highly specialised carriers to load gas cargoes from deep-sea posi- general support for compliance with applicable rules. “The overall tions and carry them to receiving facilities thousands of miles away. technical features of these C02 carriers have similarities with LPG Now designs are in place that will to some extent reverse carriers and offshore shuttle tankers. Many of the applicable safety that supply chain. Hyundai standards to be applied Heavy Industries and Maersk are therefore basically well HHI diversifies Tankers announced earlier known. Studies will, how- this year that they are jointly ever, have to be carried out developing next generation to ensure that all features liquefied CO2 carriers that have been adequately ad- will be ready for the market dressed and that the vessels’ by 2015. interface with the rest of the As part of the Finncap CCS chain is in harmony project that captures C02 with the intentions,” says from power plants in Fin- Jan Koren, DNV’s segment land, the new carriers will director Tankers. deliver and offload the gas at Mr Ha says HHI also injecting wells in the North plans to develop multiple- Sea. Maersk Tankers is al- use ships that can carry ready in a partnership with C02/LPG or C02/Ammonia. Maersk Oil and Finnish utili- As more governments ties Fortum and Teollisuuden move to reduce greenhouse Volma, aimed at developing gas emissions, Maersk es- a joint carbon emissions timates the global demand abatement project in the for such vessels will grow to area of carbon capture and 380 vessels by 2020. storage. “Shipping C02 in tanker vessels is a cost-effective and flexible Beyond shipbuilding way to get C02 from power plants to offshore storage sites, which In a recent report by shipbuilding analyst Richard Park of Daewoo makes it a suitable solution for large C02 emission sources such as Securities the analyst called for a re-rating of HHI based on what coal-fired power plants especially in the emerging phases of CCS,” all have suspected since before the last shipping downturn – HHI is says a Maersk spokesman. no longer primarily a shipbuilder. As the vessels will be semi-pressurised and semi-refrigerated Over the last three to four years the world’s largest shipbuilder HHI has been able to draw on its previous experience in building has been shrewdly investing in increasing diversification to the other gas carriers. “The underlying concept of the containment point that it is now a significant player in construction, equipment, system for the C02 carrier is similar to that of a liquefied petroleum solar power and wind power. carrier but the C02 containment system shall take into account the “Non-shipbuilding business should expand going forward,” Mr variables between the two gases,” says HHI senior vice president Park’s report claims. Jae Keun Ha. “Shipbuilding will account for 35% of [HHI’s] total sales in Thus far HHI has developed basic designs for C02 shuttle car- 2010, but this portion will decrease to 24% in 2012. As such, de- riers of capacities between 10,000 cu m and 40,000 cu m but pendence on shipbuilding cycles will decline significantly. HHI’s Mr Ha says the size can ultimately be determined in line with the aggressive investment in non-shipbuilding areas should expedite owner’s requirements. this trend,” he adds. ]

November/December 2010 asiamaritime 33 am2011 prospectsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Demand/supply equation crucial in shipping’s recovery To remain balanced shipping will have to tread a fine line

Tankers According to a November 2010 report by shipbroker and investment fund R S Platou there will be little to look forward to in 2011, largely due to an expected torrent of newbuilds hitting the water next year and in 2012. Despite a predicted increase in oil consumption, the Platou report suggests that fleet growth will be such that rates across all tanker classes could fall by close to 55%. In its revised estimate Platou predicts very large crude carrier rates will not be sustainable at $25,000 per day in 2011, and possibly dropping to $20,000 per day. The primary reason for the appalling prospects is a forecast surge in new tonnage arrivals from an average 30m tonnes per year to as much as 45m tonnes annually 2010 through 2011 after making a 15% to 20% allowance for cancellations and slippage. Annual fleet growth over the next two to three years is thus estimated to be in the Tankers set to sink 7% to 8% range. Capacity ha sustained further pressure with the arrival of great- Dry Bulk er land-based oil storage capacity which is forcing floating storage Although not as seriously afflicted by the new tonnage burden as vessels back out on to the market for spot or term cargo. the tanker sector oversupply will also be an issue for the dry bulk The most obvious outcome of the floundering freight rates over sector in 2011. Some classes will, of course, be more adversely such a protracted period will be a drop in asset values and pressure affected than others, notably the capesize sector. In September, on values of tanker operators. Platou predicts the price of second- Clarkson’s noted an existing fleet of 1,086 ships weighing in at hand tankers will drop 15%, and Platou has downgraded leading 194.9m dwt, up 23% in tonnage terms from the 99m dwt recorded tanker operators Frontline and Saga Tankers to sell. in 2004. Forecast fleet growth is likely to have been 22%. In 2011, Only a combination of scrapping and newbuild cancellations the fleet is expected to grow another 16%. is likely to bring any relief to the market next year. Clarkson says the panamax fleet increased 7% in the first nine months of 2010. The outstanding order book stands at 857 vessels. Taking into account slippage, the broker has forecast fleet growth Tanker prospects in 2011 look grim of 13% in 2010 and 11% in 2011. 2011 estimate 2012 estimate The handymax sector consists of more than 2,000 vessels (2,051) with close to 780 ships on order. But with slippage and VLCC $25,000 $20,000 cancellations expected Clarkson forecasts deliveries of 17m dwt Suezmax $22,000 $18,000 this year and 14m dwt, or 12% in 2011. Aframax $18,000 $15,000 Handy bulkers has been a relative laggard compared to other LR2 $18,000 $15,000 bulkers in the sector, fleet size having increased just 4.8% in the LR1 $16,000 $14,000 first nine months of 2010. The outstanding orderbook at 27.9m dwt MR $14,000 $13,000 accounts for 35% of the fleet – projected growth over the next two Supply growth 7.3% 7.5% years is forecast at 7% and 5% respectively. Seaborne demand growth 5.2% 5.9% Looking at the dry bulk market as a whole in 2011, Clarkson Fleet utilisation 84.5% 83.3% Points to the brisk interest in contracting new tonnage in 2010, Source: RS Platou Markets

34 asiamaritime November/December 2010 am2011 prospectsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

Europe, we think there are significant growth prospects for Asian exports to resource-rich markets in Latin America and Africa over the longer term…In 1995 Latin America and Africa represented a 4% share of China exports. Last year, their share surged to 9%. Meanwhile, China’s dependence on the US has declined from a peak of 22.9% in 2005 to 19.9% in 2009.” Some might argue that 2009 was an exceptional year given the central place of the US in the global downturn but the general trends can be accepted. The declining orderbook will prove to be a key variable next year. Clarkson’s forecasts nominal supply will grow 12.5% in 2011 and 7% in 2012. Mr King begs to disagree. “We think sup- ply growth will continue to fall short of plan due to persistent ship finance constraints, resulting in more moderate nominal supply of Boxships need discipline 8.9% in 2011 and 6.5% in 2012,” he says. Mr King is slightly skeptical of continued industry discipline and concludes “China continues to surprise us with the scale and going forward but says that a combination of increased creditor persistence if its growth drive [for commodities]. But even China oversight, shareholder scrutiny, an uncertain demand outlook and cannot soak up all of today’s orderbook, and the fact that new con- the memory of deep losses in 2009 may work together to place tracting has been brisk, just adds to the angst.” some restraints on the sector.

Liner Shipping Terminals Goldman Sachs’ analyst Tom King sums up the key elements for a At a recent telephonic conference APM Terminals executives Kim continuing recovery in the container markets as: Fejfer (global chief executive) and Martin Christiansen (Asia chief • A rise in resource-rich markets executive) offered a global port operators perspective on the imme- • A declining orderbook diate future for Asian terminals. • Limited ship finance According to the two emerging markets, many of which are in • Industry discipline Asia, are seeing growth of 7% compare to mature markets growth On resource-rich markets, Mr King says: “While the market is fo- of 2% and a global average of 5%-6%. cused on slower growth from developed markets in the US and But most significant has been the 40% growth in box trade between China and Asean since a free trade agreement was signed at the beginning of 2010. This will ultimately demand larger ves- sels on intra-Asia trades that will see the likes of APMT and other global operators moving into the secondary port markets to address

APMT Asia chief executive infrastructure deficits such as shallow drafts in Southeast Asia, and Martin Christiansen: Looking in the case of APMT, this will also mean involvement in inland net- for growth inland works. Equally, larger ports in the region could be in need of further infrastructure development if they are to cope with the introduc- tion of large container vessels of 14,000 teu or more, such as the 16,000 teu vessels ordered by APMT’s sister company Maersk. While APMT is apprehensive about potential overcapacity at Vietnamese ports as a result of piecemeal investment by many par- ties, it is equally upbeat about the inland opportunities where lack of infrastructure has led to bottlenecks. “There is a clear need for developing world-class infrastructure to support port infrastructure and we feel we have a key role to play,” said Mr Christiansen. Despite pockets of overcapacity in China APMT has identified and is prioritising opportunities along the Yangtze River delta. ]

November/December 2010 asiamaritime 35 amheroesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamama

More than 1,000 seafarers remain in captivity

Salute to our seafarers Throughout The Year of the Seafarer 2010, ships’ crew across the globe have been defiant in adversity and shown bravery in the face of danger

It is a sad way to end the International Maritime Organization’s Students saved Year of the Seafarer knowing that more than 1,000 of those being In February 2010, Mitsui OSK Line announced that its woodchip honoured by the event are currently being held in captivity. The carriers Hokuetsu Delight and Crystal Pioneer had searched for most damning indictment of governments around the world is the survivors of a training ship 550 km southeast of Rio de Janeiro in failure to effectively confront the spectre of piracy in 2010. the South Atlantic. Through a swift response all 64 who had been As Asia Maritime goes to press we come to the end of a year aboard the training ship were rescued, including high school and when there has been around 45 hijacking incidents – an unfortu- university students from Canada and one student from Japan. nate record. The 57-metre sailing ship Concordia reportedly capsized in According to statistics issued by the International Maritime strong winds at about 8 pm on February 17 (early on February 18, Bureau’s Malaysian-based Piracy Reporting Centre there were 289 Japan time). The following day, the Crystal Pioneer, under way from reported incidents of piracy during the first nine months of 2010. Amsterdam to San Lorenzo, Argentina, immediately rushed to the site Across the world 128 ships were boarded by pirates. Guns were of the incident after urgent requests from the Brazilian authorities. employed in 137 cases, 27 seafarers were injured during the pe- Around the same time, the Hokuetsu Delight was steaming riod, and tragically one died. From January through September 773 from Singapore toward Paranagua, Brazil, when it heard rescue- hostages were taken. Not all the incidents cited above took place in the high-profile seas off of the Gulf of Aden. It is disturbing to note that areas such MOL crew teach students a lesson in survival as the South China Sea, where such incidents were once thought to be under control, have seen a resurgence in piracy incidents – up 300% to 30 this year. The efforts of various national navies in the Gulf of Aden and the Indian Ocean have been stepped up over time. Their efforts are vital but have proved insufficient. It is to be hoped that more direct action will be taken in 2011 so that more seafarers are made he- roes against their will. During 2010 many seafarers have been drawn from their day- to-day on-ship duties to act swiftly and boldly to save others in dis- tress. Below are just a few examples through which we wish to pay tribute to all.

36 asiamaritime November/December 2010 amheroesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamama

related radio messages from the Brazilian authorities. It headed to Symphony is music to the ears of those in distress the area of the shipwreck and before dawn on February 19, spotted On 30 April 2010 at 14.10 hours the 106,000 dwt aframax tanker distress signal lights and three lifeboats with shipwreck survivors TH Symphony was on passage to Yanbu, Saudi Arabia when she on board. received a call from RCC Australia informing her of a vessel in dis- The Crystal Pioneer reached the scene later and found another tress – the Velankanni Matha – with 60 persons on board, North of lifeboat and more survivors. Remaining in close contact through- Cocos Island. out the incident, the vessels confirmed that all 64 people who had The Velankanni had run out of fuel, water and food and was in been on board the Concordia were safe. need of immediate assistance. The request was to only provide the The Hokuetsu Delight rescued 44 people, and then Crystal Pio- distress vessel with the above supplies and not to take passengers neer rescued 20. onboard. The vessels took the survivors to Rio de Janeiro, arriving on the • The Symphony was at this time some 30 nautical miles from afternoon of February 20. the Velankanni and post consultation with the DPA confirmed Despite high winds, choppy seas, and limited predawn vis- its ability to assist the vessel by providing food, water and fuel ibility, the two woodchip carriers searched for and located the as could be safely provided. In wind force 5 the vessel made shipwreck survivors. The task was particularly hazardous consider- headway towards the Velankanni and after three attempts and a ing that the huge wood chip carriers are easily affected by winds few parted ropes succeeded in transferring the necessary sup- and difficult to maneuver. However, the highly skilled officers and plies. crewmembers completed the rescue operations without secondary • The complete operation from the time of receiving the call to injuries or damage. resuming the passage to Yanbu took 4.5 hours. The vessel kept owners, managers, and charterers informed during the rescue operation and proceeded on her passage to Yanbu, informing RCC Australia of the successful delivery of provision and fuel to the Velankanni.

Star-struck sailors rescued by NYK Aquarius On November 9, NYK Aquarius, a Nippon Yusen Kaishen contain- ership led by Captain Nag Subir Kumar, rescued 26 Chinese sailors on a troubled cargo vessel in the South China Sea off Vietnam. The NYK vessel was sailing from Shekou, China, to Vung Tau, Vietnam, on November 9, 2010 when a distress call was sent at around 4 pm (local time) from a troubled vessel on the verge of sinking. The NYK vessel received a call for help from the Hong Kong Maritime Rescue Coordination Centre, and rescue opera- tions were immediately set in motion. At about 8 pm, 26 of the 27 sailors were rescued from the troubled vessel in the waters east of Vietnam, and the remaining sailor was rescued by another cargo vessel sailing near the site. Never off duty The rescued sailors were rescued in good health and disem- It seems that many seafarers even when on land never forget what barked from NYK Aquarius at Vung Tau on November 11. ] they have learned and are always ready to act when the need is there. The following incident is a shining example On September 26, 2009, Super Typhoon Ondoy hit the Philip- pines. As the typhoon ravaged his village 2nd Officer Julio Cag- ampan who sails on the Viken Fleet and is a seafarer from Wallem Maritime Services Inc, helped rescue over 20 people in his local community. Mr Cagampan and his family were stranded on their rooftop as the floods reached 20 feet. Around them were neigh- bors who were screaming for help. Mr. Cagampan bravely applied what he learned in his training and tied a rope to an old life vest and pulled as many people as he could to safety. He was recognised by his community with a simple plaque of appreciation presented by their Home Owners’ Association.

November/December 2010 asiamaritime 37 amoperationsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Allow for ballast! Michael Grey argues that the world’s ports are not pulling their weight when it comes to solving the problem of ballast water exchange

You can see them on the long-haul ballast routes between Moving targets the East and the ore and coal export ports, the hulls of the ships There is a range of ballast water treatment equipment, which has shrouded in spray as the ballast pumps overflow the tanks. It’s not been deemed satisfactory by the authorities. But scarcely a month good for the structure, while the pumps were never made for that goes by without some environmental expert suggesting that the sort of usage, but it has to be done if there is to be clearance at the criteria prescribed for ballast water treatment is grossly inadequate loading port and all the paperwork in order to show that all the and more onerous rules need to be adopted. The worry is that an ballast was exchanged before the ship entered the EEZ. inordinate number of these experts seem to be located in the Pa- cific coast of North America, where the consensus often seems to Too late? be that the population dislikes any form of shipping, even though it There is nobody now unaware of the need to prevent the transfer depends upon the goods brought to it by sea. of alien marine life or pathogens from one The concern must be that not only must part of the world to another, although there the owner of the newbuilding lavish consid- are some scientists who suggest that all the erable sums on equipment which is (in nor- damage had been done before we were re- mal parlance) comparatively untried, but that ally aware of what was going on. within a year or two its performance could We have a ballast water convention be deemed inadequate by some zealous and a number of approved models of bal- coastal state. last treatment equipment that can be in- Why is it that the ship has to move heav- stalled into newbuildings or retrofitted into en and earth to alter its specification, to meet existing ships. But like various elements landside prescriptions? Why cannot the land of MARPOL, (oily water separation equip- provide solutions rather than endless prob- ment comes to mind), the best regulations lems? Taking this logic one step further, why seem not to emerge when the rules predate cannot ports provide clean, possibly even the discovery of any satisfactory treatment fresh ballast water to ships departing empty or equipment to mitigate the situation. of cargo, that would not require to be dealt When engineers only get to work after the with upon the voyage, or upon discharge? regulators have written, there is a problem as they strive to both interpret what was Fresh idea in the regulators’ minds, and also discover Fresh water, apart from being something be- whether, what they prescribed, is techni- nign in a vessel’s tanks, could in some parts cally feasible. of the world, have a considerable value, There are a number of “approved” models of equipment that which might see a “market” emerge. have demonstrated their ability to treat ballast, but will the equip- Some years ago, we heard of a delightful “trade” of a ves- ment really work in the ships that are contemplated? Ship opera- sel regularly ballasting through the Panama Canal, which would tors are unwilling pioneers and have plenty of examples of ships fill up its ballast tanks with fresh water from the Gatun Lakes, or equipment, which were claimed to be “state of the art”, but which was then sold at the loading port, an arid and inhospitable failed to deliver in practice. Not for the marine industry is the long place where such a cargo was marketable. Eventually the canal process of development and testing that is found in, for instance, authorities woke up to the extraction of their water (possibly the aviation, or even road transport. Often the testing of equipment de- draught marks might have been a clue) and stopped the practice. pends on finding an owner willing to be a “guinea pig” and test the But is it so far-fetched, or so utterly unreasonable that ports might, new invention on one or two ships, before it is pronounced ready just for a change, do something really worthwhile for the global to be manufactured. environment? ]

38 asiamaritime November/December 2010 !"#$%$&'"(&")*+,+-*.*,/&0"1234'''%'''%#565%$'''67$('89

.=?#@#A#+$)+B)A?9)29'")F-&+()*&+?@@M (1&%.-.+D/+F*#4&<2%-+ 728%*):+B2&%. ECWET)7&"#()CDEE O'"#$')Q'J)*'$I,U *#$V'&+"9

!"#$%#&'()*&+$,+",

*.7)7*07)CDEE)F35<.-.5F.)341G05. 1H9,I'J)EC)7&"#( C2%#*#4 1K.)7*075)L30F.)05)M3-G6)*K0!!05/:) F351705.-)*K0!!05/)N)G3/0*10F* (>$-%#22# !"#$%&'()*&+*)+&,%-&./+$0-+12%,.3)+)*#4,-+,&%4-)$+52#$&*#-%+ 1K.)7*075)L30F.)05)M3-G6)*K0!!05/: $%&.-6++70*)+1*,,+52#$*#8-+29-%+$0-+,2#4+$-%:+&)+()*&#+ 52#)8:-%+:&%;-$)+.-9-,2<6+"$3)+#2$+)8%<%*)*#4=+$0-#=+$0&$+ 1K.)O7P3-)Q4GR)1-76.* ()*&#+-52#2:*-)+&%-+,-&.*#4+$0-+%-529-%/+2>+ *#$-%#&$*2#&,+52#$&*#-%+$%&.-+92,8:-)+*#+?@A@6++ M9I$9,I'J)ES)7&"#(

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

!"#$%&'$()"#=+H%-)*.-#$=+(HI R8,,+.&/ !"#$%&'%($)*'+#$'($,*-./$&"'00'(12$+*(!%'(#-$&"'00'(1$3$ 3<<*K3-.)N).5.-/2)672 .*1'&!'+&$4567898648$:8::;56$<=68>>;:? -./0*1.-)234-)051.-.*1)136728) .'"(J)@#"I)"'A9)+B)4*ZE[CC\)A+)'AA9$I)BH(()%+$B9"9$%9)Y#(()9=&#"9)C])<9@"H'"J)CDEE8

*&+$,+",

.$I+",9I)@J K9(I)#$)%+$XH$%A#+$)Y#A? 3"V'$#,9",

19(:)JKL+K?MN+??O@);)<'=:)JKL+K?MN+?PO@);).>'#(:)*#>2Q)-&$%&.-'&)*&652: www.sea-asia.com amimoamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Another busy year ahead for IMO Sandra Speares outlines the 2011 agenda for the International Maritime Organization

Debate at the International Maritime Organization in 2011 looks the Viking Islay. The industry still has to deal with the dilemma that set to continue on such topics as piracy, maritime safety systems, any amount of information provided may not stop such accidents environmental issues and design based standards - to name but happening. a few issues to have been tackled by the various committees and Issues outlined in the International Labour Organisation Con- sub-committees. vention 2006, notably as far as these affect working hours, remain The issue of lifeboat hooks alone is an “absolute debacle” ac- on the agenda. cording to Allan Graveson of seafarers union Nautilus International Another issue Mr Graveson highlights is that of block voting and an “on-going saga”. by EU countries. He suggests this is working against resolution of Mr Graveson says what they would like to see is “all gravity issues like manning and working time and “those that shout the launched lifeboats have a sta- loudest - the hawks - seem to bility test on the hook. If we prevail”. The political area of did a stability test on the hook EU involvement is going to be a we would find 90% of the significant one, he says. hooks would not work, “ On the IMO technical side, The Polar Code is also an according to Peter Hinchliffe, area he highlights as being in secretary general of the Interna- need of more concentration. tional Chamber of Shipping, the New rules on the conduct of Chamber is hopeful that new voyages through Arctic waters text from Marpol, Annex VI can have been on the agenda dur- be adopted which will address ing 2010 discussions. technical operational measures The STCW convention dis- such as the design index and the cussions have provided plenty Arctic navigation; just one of the issue IMO will be tackling in 2011 energy efficiency management of food for thought, he says plan. and on minimum manning he considers there have been plenty of The next stage of proceedings will be for the classification “weasel words”, and the human element, he says is “flagging”. societies to submit common structural rules under the goal based The tonnage convention has also been an issue on the agenda standards system. tackling the design of container ships from the safety perspective. There are also changes ahead at the next meeting of the Marine Accommodation, and meeting minimum requirements under Environment Protection Committee which may herald the arrival of the Maritime Labour Convention rules is another key point, as are the convention into force as the relevant number of states signed training berths for seafarers – an issue on which India, in particu- up to ensure that the convention is ratified. lar - has been pushing hard. The tonnage convention, he argues, It may well prove to be an interesting year as far as the emis- works against this requirement. sions issue is concerned. IMO will have to deal with the fallout Issues, he says, like the on-going problem of seafarers’ entry from the next COP16 meeting into enclosed spaces remain major concerns. More people, he says “We might see MEPC moving forward into market based meas- are lost in enclosed spaces each year than in piracy incidents. ures in a much more focused way, “ says Mr Hinchliffe. The aim is “The two areas that can be addressed quite quickly are the entry to group the currently digestible set of market based groupings. to enclosed spaces and lifeboat hooks. If the organisation cannot ICS has big issues as far as the lifeboat hooking dilemma is address these two issues expeditiously, we really are in difficulty”. concerned and while this issue will come up in the Maritime Safety Enclosed space incidents have of course been highlighted in Committee this year, discussions are likely to spill over into sub- legal cases against seafarers following fatal accidents, for example committee meetings in 2011. ]

40 asiamaritime November/December 2010 3rd Annual

Suntec Singapore International 24-26 January 2011 Convention & Exhibition Centre, Singapore

REIGSTER NOW FOR BREAKBULK ASIA Plan now to attend and exhibit at Breakbulk Asia - the largest gathering A full exhibition floor will offer a premier networking opportunity in Asia for EPCs, manufacturers, heavy-lift, project cargo and breakbulk for shippers and the world’s leading specialized carriers, cargo transportation. During the two-day conference, industry leaders forwarders, ports, and terminals and service providers. will discuss today’s pressing transportation issues in these sessions: To register, view the agenda or to find • Asia Market Overview • The New Incoterms exhibitor and sponsorship information: • Project Logistics Implementation - Zero Defects Start Up • Australian Quarantine Inspection Services Regulations • Emerging Korea asia.breakbulk.com • Improving Cargo Security • The China-Latin America Connection • How to Select the Right Vessel for Project Cargo • Compliance and the UK Bribery Act • India’s Infrastructure Challenges

Badge Holders Sponsor

Produced by:

Official Media Partner Supported by: Triple Crown Sponsor & Sales Agent – India

Lanyard Sponsor Media Supporters

international transport journal

Hotel Key Sponsor

©2010, UBM Global Trade amgreen pageamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Big breaker boosts Convention Breaker/classification society cooperation points to cleaner ship recycling

Global Marketing Systems, one of the biggest cash buyers May 11 last year, is making its slow way towards entry into force. of ships for demolition, has teamed up with Germanischer Lloyd Under the IMO’s target, the convention will enter into force to implement a green ship recycling policy under the International 24 months after ratification by 15 states, representing 40% of Maritime Organisation’s Hong Kong ship recycling convention. world merchant shipping by gross tonnage. The 15 states should Under the initiative, the classification society will independ- have a combined maximum annual ship recycling volume of not ently prove to ship owners that GMS and its chosen recycling fa- less than 3% of their combined tonnage. cility have complied with the convention’s requirements. So far, five IMO members – France, Italy, the Netherlands, St Germanischer Lloyd says the “service is for ship owners who Kitts and Nevis and Turkey – have signed the convention either have committed themselves to get their vessels responsibly recy- “subject to ratification” or “subject to acceptance”. cled by voluntarily following the Hong Kong convention”. Under When the convention was adopted last year, IMO secretary- the deal, GMS and its nominees will acquire ships for recycling general Efthimios Mitropoulos declined to speculate when the on an “as it where is” basis or on a “delivered” option. convention would formally enter force. He said previous conven- The class society will supervise the preparation of the ship for tions took around five years to ratify, although the IMO had a recycling as well as the actual demolition process. This includes three-year ratification target. At the time, observers thought the help with the preparation of the inventory of hazardous materials convention could take effect sometime between 2013 and 2016. and approval of the ship’s recycling plan. The class society will The convention aims to ensure that when ships are sold for also vet the ship-recycling yard to ensure compliance with inter- recycling they do not pose any unnecessary risk to human health national quality standards. and safety or to the environment.

Industry managed Keep a clean ship GMS, which has offices As a result, ships over 500 gt in the United States and that are sold for recycling will Dubai, will manage the be required to carry an in- recycling process and ventory of hazardous materi- report on progress to als, including asbestos, heavy Germanischer Lloyd. metals, hydrocarbons and GMS currently recycles ozone-depleting substances. ships at facilities in Shipyards and suppliers will China, India and Bang- have to prepare an inventory ladesh. of hazardous materials as The move mirrors they are building new ships. that of the Green Recy- Classification societies will cling Initiative, which help prepare this inventory was launched by the Putting this behind us for ships already in service. Balzarini Group and Germanischer Lloyd says other investors last year to create a US$300m fund to buy bulk car- it was the only classification society which continuously builds riers for recycling. The initial investors, which included Balzarini up an international network of approved hazardous material ex- company and Siba Ships, together with Dryships chairman George perts “to assure effective and accurate” preparation of hazardous Economou, Seaarland Shipping Management and shipbroker material inventories “in line with all IMO and ISO 30005 require- Banchero and Costa, hopes that the fund will acquire up to 200 ments”. vessels. It is envisaged these ships would be recycled at yards that Ship recycling yards will be required to provide a ship recy- are members of the International Ship Recycling Association. cling plan that will specify the way each ship will be recycled, It also comes as the ship recycling convention, which was depending on its particulars and the inventory of equipment and adopted by the IMO’s diplomatic conference in Hong Kong on hazardous materials. ]

42 asiamaritime November/December 2010 amlogisticsamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Hold that cargo Tighter security controls could lead to damaging delays

Moves to tighten air cargo security that Tougher security checks for air cargo have received renewed impetus since bombs were found on United Parcel Service aircraft in Britain and Dubai, could change the land- scape of the airfreight industry. The Hong Kong Shippers’ Council has already warned that plans by the United States authorities to introduce a 24-hour rule for the submission of air cargo manifests would “finish” Hong Kong as a top global airfreight centre. But it has also emerged that differing juris- dictions have divergent views on what security measures should be introduced and how they should be implemented. And unless common cause can be found it could lead to a hodge- podge of differing regulations causing confu- sion for the industry. Peter Boyce, senior business manager of security management Under current US proposals, US Customs and Border Protection systems with LRQA Asia, the quality assurance offshoot of Lloyd’s and the Transportation Security Administration will require cargo Register, points out that the World Customs Organisation has already manifests to be submitted 24 hours before freight carrying aircraft developed a framework of security standards. take-off. But voicing the concerns of shippers, Sunny Ho, HKSC ex- These standards have received pledges of support from 90% of ecutive director, says the move “will erode all the advantages” Hong WCO’s 175 members. At its heart, the standards establish the concept Kong has as an efficient air cargo hub. of a secure trader using 13 goal-based criteria to meet security objec- The US has already introduced a requirement that all freight tives. carried in the hold of passenger cargo must be screened. A similar Mr Boyce says the idea behind the secure trader concept is that requirement is expected to be introduced by Canada next March and in a post-September 11 type of event those secure trader operators the European Union soon after, while US proposals to screen cargo will be able to restart cargo operations first ahead of the competition. carried in aircraft freighters are being considered. These secure traders can be air or ocean freight terminals and cargo Ho points out that Hong Kong Air Cargo Terminals and Asia Air- carriers who have taken steps to evaluate the bone vides of their cus- freight Terminal can accept cargo up to four hours before flight depar- tomers. ture, although he said this can be cut to two hours. But these efficien- But he also points out that none of the WCO’s member jurisdic- cies would disappear if the 24-hour rule, which would be similar to tions that have introduced or pledged the launch of a secure trader the controls on sea freight, was introduced on airfreight. scheme have met the 13 criteria to give companies secure trader The US state department says it was aware of the concerns of for- status. He says the US has met around nine of the goals, while the eign cargo owners and pointed out the US was keen not to interrupt European Union meets 11 and New Zealand 11. trade. Mr Boyce, a former Australian federal police terrorism expert, Paul Tsui, chairman of the Hong Kong Association of Freight For- says only Taiwan has adopted a risk management approach that is ac- warding and Logistics, says there were already moves by the US to tually focused on a company’s business needs. All the other jurisdic- moderate the 24-hour rule. “I wouldn’t think 24 hours is going to be tions have concentrated on a check-list approach which could cost implemented,” he says. This coincides with indications that Republi- companies millions of dollars to implement. can politicians in the US are looking to take a risk based rather than Pointing to the difference, Mr Boyce says the check-list might prescriptive approach to airfreight security in future legislation. require a company to install security fences, closed circuit television Other jurisdictions are taking the alternative prescriptive view, as- and other equipment. But what would be the need for additional suming that because certain criteria are met then the air cargo pack- fencing and equipment if the company is located within Singapore’s age must be safe. Jurong island complex where security is already tight. ]

November/December 2010 asiamaritime 43 amtechnicalamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Future defined by sustainability focus Cargotec drives technology and service developments for the benefit of its customers; Karoliina Loikkanen, explains The efficient packing of waste reduces inefficient transportation, and collecting how these developments benefit the waste in reliable containers ensures minimal health and environmental impacts environment and improve cost-efficiency has been achieved in co-operation with municipal authorities and waste management organisations. As a result, this system for mu- Nowadays, sustainability ideology must be integrated nicipal, industrial and recyclable waste is being used in all major into general business activities. To be able to compete and operate cities in China. in the future, businesses have to consider all perspectives of sus- Investors and customers also depend more and more on infor- tainable development in a deeper way and see the possibilities that mation about the impact of product supply, and suppliers’ environ- these issues bring. mental and quality management systems. As a result, we are also Cargotec is a market leader in energy-efficient products within developing our monitoring process. its field. Many of the solutions Cargotec now offers were unimagina- Opportunities for sustainable development lie in sustainable ble even a few years ago, but today they represent industry bench- practices with equipment use. We see this in activities such as train- marks. Cargotec is present in all stages of global cargo handling. ing. One example – for Kalmar products – is EcoDriving, which is Our solutions help make cargo flow more sustainable and in the a new, developing training programme designed to bring about the future, it will be served by sustainable solutions from the production most efficient use of our products. The aim is that training would of raw materials and to the recycling and reuse of end products. make it possible to reduce fuel consumption, extend a component’s We are aiming to develop our operations in a responsible man- life cycle, reduce wear and tear on tyres and help minimise mainte- ner and taking environmental considerations into account when we nance costs. New techniques could lower fuel consumption by be- make decisions about our business operations. We develop environ- tween 5 and 10%, reducing machine wear and increasing efficiency. mentally advanced cargo handling solutions – such as electric drive In the future, there will be a greater need for products with low technology and dust-free bulk handling. We also consult in planning environmental impact, high energy-efficiency and recyclability new terminals and help make our customers’ infrastructure more au- ratings; this is in response to market needs as well as legislative de- tomated, efficient and sustainable. velopments in the field of emissions reduction. At the same time, a In 2009, Cargotec set environmental targets for its supply units growing service function is supported by the increasing demand for and in September we will celebrate the opening of an energy-effi- long-life solutions, which are supported through proper maintenance cient assembly unit in Stargard Szczecinski, northern Poland. procedures. We support these principles, and believe that the devel- One example of developing, planning and implementing a opment of Cargotec’s products and services will follow them closely. cost-efficient and sustainable cargo-handling structure is our waste management solutions. We believe that the efficient packing of Sustainability standards and commitments waste reduces inefficient transportation, and collecting waste in • International standards and commitments giving direction to reliable containers ensures minimal health and environmental Cargotec´s operations include: impacts. Our solutions always respect local waste management • UN Initiative Global Compact routines and maintaining employment in the sector; as a result our • UN Declaration of Human Rights waste management improves the local infrastructure, and therefore • ILO Declaration on Fundamental Principles & Rights at work the quality of life for people who live in the area. This a good dem- • OECD Guidelines for multinational enterprises onstration of Cargotec’s waste management solution representing • ICC Business Charter sustainable business practices. • Clinton Global Initiative (CGI) In China, Cargotec has had a pioneering role in developing • Baltic Sea Action Group (BSAG) ] modern solid waste collection and transportation systems. This Karoliina Loikkanen is Cargotec’s sustainability officer

44 asiamaritime November/December 2010 amship's storeamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Blowing bubbles: reducing emissions China might be the largest shipbuilding nation, but Japanese modations block. It also features a two-engine, two-shaft propulsion shipbuilders continue to innovate to build more environmentally system that will cut carbon dioxide emissions by 24%. A further 5% friendly designs. The latest yard to reinforce its green credentials is cut will come from the electronically controlled diesel engine and Mitsubishi Heavy Industries, which has completed the conceptual waste heat recovery system design of a 14,000 teu containership with an air-lubricated hull. Mitsubishi designers say about 10% of the emissions saving Mitsubishi Heavy Industries estimates that its MALS-14000CS would come from improved operating efficiencies related to the air design - MALS means Mitsubishi air lubrication system - will be ca- blown bubble system alone. pable of slashing carbon dioxide emissions by 35% compared with The shipbuilder has already incorporated a similar system on conventionally designed containerships. the project cargo and module carrier, Yamatai, operated by NYK- Aside from using air bubbles on the underside of the hull to Hinode Line, but the design of the 14,000 teu containership is a cut frictional resistance between the vessel and seawater, the ship much larger application of the technology. design also uses an advanced high-efficiency hull and propulsion Mitsubishi says the containership has been designed to allow system to cut fuel consumption and emissions. operations through the enlarged Panama Canal and features an The design places the bridge relatively forward with exhaust overall length of 366m, a breadth of 48.8m with a 15.2m draft in funnels at the stern to allow extra container space under the accom- tropical freshwater. ]

Rolls Royce China joint venture for cleaner ships Rolls-Royce has teamed up with Shanghai Bestway Marine Engineering Design Company to develop innovative and environ- mentally friendly marine designs for ships including product and chemical tankers, ro-ro, ro-pax, feeder containers and multipurpose vessels. The two companies also plan to develop new designs focusing on novel propulsion sources including liquefied natural gas, under the deal inked in mid-November. Part of the work will involve shar- ing expertise to customise existing vessel designs to better suit Chi- nese and European markets. John Patterson, president of Rolls-Royce Marine said: “This collaboration will bring innovative developments in ship design. Rolls-Royce has significant experience in designing and develop- ing marine solutions that meet and exceed expectations in the face Rolls-Royce’s John Patterson and Liu Nan of Bestway Marine sign landmark cooperation deal of increasingly stringent global environmental standards. We look forward to applying this experience to support the Chinese marine One of the key commercial markets for Rolls-Royce has been industry in addressing climate change.” providing propulsion and associated systems for ferries and offshore Bestway chairman and general manager Liu Nan added: “I look supply vessels. These include the gas engines and main azimuth forward to introducing new and innovative ship designs that not thrusters for a double-ended passenger/vehicle ferry that will be only meet the needs of shipowners domestically and overseas, but world’s largest gas-engined ferry when it enters service by the end also support our commitment to tackling climate change.” of next year. ]

November/December 2010 asiamaritime 45 amseascapesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Systematic approach to the human touch New ClassNK Guidelines on human error emphasise the critical nature of ergonomic design in the interface between man and marine equipment

A general cargo vessel under pilot instruction runs aground in – the two valves are virtually identical in terms of size and shape; a a river after straying from its course. The Master denies making any strainer attached to unload an LNG carrier is found to be the load- error. He believes he has adjusted the steering mode to RIVERPI- ing strainer and operations have to be shut down once the mistake LOT as instructed. The subsequent investigation establishes he may is discovered – the two unlabelled strainers have been packed in have mistakenly selected AUTOPILOT. the wrong boxes; a chief engineer’s sleeve gets caught in a pilot This real case, which led to the collision of the above-men- CO2 pilot bottle isolating valve and he inadvertently sets the isolat- tioned general cargo vessel with the River Ouse’s Apex Beacon, UK ing valve - he then opens the gauge isolating valve to confirm the in 2005, offered an example of ‘the human factor’, but the ‘human pressure, in turn pressurising the bottle and causing CO2 to start error’ concerned did not lie solely with the ship’s master. Other hu- leaking. man factors were at work. A review of the incident by Nippon ClassNK, picked out the Fit for purpose? vessel’s three-way position selector switch, controlling steering, for These and many other examples cited by ClassNK show that while particular scrutiny. It found that, although RIVERPILOT mode was human factors may well account for up to 80% of all marine casu- understood by both the pilot and the master, the switch position alties, as was first established by a US Coast Guard report in 1993, display label had been hand-made and was wrongly affixed. the ‘human error’ may be perfectly understandable in the light of The above incident is just one example newly cited by ClassNK other human actions. in ‘Guidelines for the Prevention of Human Error aboard Ships’. Advances in technology alone are, of course, not the sole an- The new Guidelines set out detailed principles on how ergonom- swer to improving safety at sea. Awareness, attentiveness, fatigue, ics in ship design can contribute directly to reducing human error. desire, body size, body strength, and stress levels are intangibles, They are intended to be used at shipyards, and as a reference by whose contribution is often only established as part of an accident ship owners, in the performance of routine maintenance and in- investigation. spections, and for crewmembers. Clearly, the seasoned mariner can argue that there is little sub- Other examples of the ‘human factors’ that contribute to ma- stitute for experience, but it is also fair to point out that two crew- rine accidents over and above crew errors are not hard to find. A members with roughly the same experience on paper may respond seaman and a bulldozer driver collapse and subsequently die due differently to real events. to lack of oxygen in a vessel hold; they entered unaware that ‘Low In a world where qualified seafarers are ever shorter in supply, Oxygen Risk Area’ signs had faded from view. other factors should be considered, says ClassNK. In another case, a product tanker collides with a jetty after its The new guidelines emphasise ergonomic aspects of marine podded propulsion system failed at night. A visual and audio alarm machinery systems provided onboard ships to ensure that due con- ought to have warned crew to switch to the back-up system but sideration is to be given to the mutual interaction between crew the screens were operating at low brightness and the audio alarms and equipment systems in the design and installation stages. were not adequate to attract attention. ClassNK notes that while there have been efforts to develop In this last case, as well as the need to confirm alarm perform- marine equipment using an ergonomic approach “they are still not ance through regular inspections, ClassNK makes the seemingly widely applied”. self evident point that visual alarms should cut through, even if The Class body notes that ergonomic design of the man/ma- screens are darkened, while audio alarms “should be such that chine interface ensures a smooth flow of information, but also they can be distinguished from other alarms and noises”. ensures that human error does not occur easily, or that it does not However, other cases cited make it clear that common sense lead to a casualty even if it does. It should also reduce crew work- does not always prevail when it comes to the man/machine inter- load, and thus reduce the likelihood of making errors in the first face in the maritime world: a diesel engine overheats and has to be place. shut down because the intake valve has been fitted to the exhaust Thus, ClassNK points out that the route to avoiding ‘human

46 asiamaritime November/December 2010 amseascapesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam

error’ should include what are, for the seafarer, ‘hardware fac- tions used consistent throughout the ship. Information should also tors’, such as the design of equipment and devices, the layout and be integrated and displayed as one group as far as possible, consid- configuration of the workplace, information display, the state of ering the sequence of work. maintenance and repairs, and the availability of essential tools and The display should also be constructed so that it cannot be af- materials. fixed in an incorrect position or in an incorrect direction. Again, it The introduction of ergonomic design criteria may contribute to should not be possible to ‘turn down’ an alarm, even by mistake. the standardization of controls, indicators, marking, coding, label- In practical terms, this common sense guidance translates, for ling and arrangement plans, thus making usage more consistent. As example, into the suggestion that critical controls include a ‘press a result, crew members can be more easily trained. Furthermore, and rotate’ functionality to confirm the user’s intentions. ClassNK much higher levels of safety can be ensured by considering the cites an example where a Davit was released some distance above convenience of maintenance and inspection at the design stage. the water when a vibration caused the operator to release it be- The Class body further notes that, if ergonomic considerations cause he was using a variable depth push button to control winch- are taken into account at the design stage, designs can be im- ing and release. proved with little additional cost in most cases. Some recommendations are straightforward. As much as pos- sible, for example, stairs and step ladders should be installed in Safety on display the fore and aft direction of the ship, while any differences in the Today’s bridges and engine rooms bristle with electronic displays, level of passageways or floors that may lead to stumbling or trip- all demanding attention. Thus, ClassNK has placed a high prior- ping should be eliminated. Again guardrails should be of adequate ity on information being displayed in a “clear, simple and hard to height considering the center of gravity of a person and the sway- miss” fashion. Specifically, information displayed to prevent harm ing motions of the ship. should not only display “riskiness” in terms of material and equip- Indeed, few would argue against the propositions that some ment properties, but also the harm considered in the stages of per- critical controls require covers to preclude unintended access, or forming a task at appropriate locations. “The display should clearly that workstations should be designed so that seafarers are not re- provide information such as the features of any possible harm and quired to adopt awkward postures. methods for avoiding such.” “When formulating safety measures for the future, it is vitally This means that, where possible, information displayed for important to learn from the past,” says ClassNK. “But it is also es- identification purposes should not only be identifiable in writing, sential to add system-wide considerations, and to develop meas- but also by differences in colour, size or shape, with any abbrevia- ures horizontally to prevent similar accidents.” ]

November/December 2010 asiamaritime 47 ambrief encountersamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam CC Kai’s end to end bafflement It was morning, I was late with copy, and as yet breakfastless, not have much time to burn on the links in their tquest for cargo I was pounding out my filing to the agency in the mini-business and customer satisfaction (and allied services billed at a single centre of the Little Ramada Inn in Singapore when I spied the un- point of sale). mistakably glossy dome of HorsH Horst Katzenmann looking down Our early morning work done, we sauntered over to the break- at work over a table full of deep blue presentation slides. The Cat- fast buffet bar enclave and munched toast companionably. The man is a familiar figure around the region. Schooled in the house Catman likes you to think he is just over from Basel with the latest of Backman, developed in the sales forcing field of Scheider and 4PL offerings to an expectant market but rumour has it that, now holder of senior office in L&N, the logistics giants of Switzerland, he is on Consultancy status with L&N, he spends a lot of his time he is widely credited, especially by himself, as the coiner of the in Honolulu with no 4 wife-to- be Gina Fong, once regarded as the term “total logistics solutions” back in the 1980s. regional marketing executive for L&N most easy on the eye. His Between us we were in a slightly challenged position sartori- slideshows are minor works of art, carefully crafted, richly illus- ally speaking. The little Ramada Inn, official hotel of the Logis- trated and—a flourish rarely copied by others - multilingual. tics Future Scenarios Conference had lately taken to seeding its I looked over his pile of slide illustrations with interest. Slide executive floors with little business centre pods and breakfast 4 was entitled: “Partners not Customers” and Slide 5 “Performers bars. This allowed its guests to pad around in dressing gowns and not Service Providers”. As usual the Catman’s focus is on “end to pajamas for a bit longer before taking off for the day’s affairs. I end” logistics, “floor-to floor” focus, and “activity centered all-in was clad in my well-worn slumberwear, a track-suit, which was provision of track, build, trace, assemble and test out productivity”. a close replica of the one worn by the late Bruce Lee, the well Richly detailed cargo flows are shown. From the small factory out- known Hong Kong martial artist, in So Went the Dragon. Kat- side Wuhan making the little pink dresses to the superstore rack, zenmann for once was not dressed in his trademark Club House “all pressed, bagged and tagged” in an arcade in KL. Subtitled in Golfer outfit, but instead in a kimono dressing gown enclosing Chinese, there is rarely a mode of transport to be seen in the visual green silk PJs. Strange how in our times the titans of transport landscape. The Catman’s preferred metaphor is the pipeline dia- and shipping often appear before their industry dressed for the gram, the more complex the better, with the transport and shipping outward nine. Lord knows with margins what they are, they do bits shown as valves and timers. “The good old days of forward- ing are over”, he will say at the Conference, “today it’s a multiplex of temporally sensitive mutual re- quirements” and tomorrow “the goods of the world will be arriv- ing like a utility, you just open the valve and in flows your cargo re- quirement.” Such vision! How has he made this journey from border forwarding in Bavaria to prognosticator of “kan- ban to the power of three” in the de- cades ahead. “Ja, well, he says, we must get the freight you know. This is why we get up in the morning. There is no extra sausage for freight forwarders”, he observes as he scans somewhat sadly the vegetarian con- tinental breakfast spread on the buf- fet bar. ] C C Kai

48 asiamaritime November/December 2010 amlaunchedamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Sumba rumba: Safmarine celebrates delivery of first of six MPVs Safmarine has taken delivery of the first of six owned multi-purpose vessels that it ordered at Chinese shipyards. The 18,000 dwt Safmarine Sumba, which can carry 1,052 teu, is the car- rier’s first wholly owned MPV since the company became part of A P Moller-Maersk more than 11 years ago. The Safmarine Sumba, which was handed over in October, is also the first of two MPAs that were acquired by Safmarine from Swiss Con- tainer Lines while under construction at Jiangsu Sugang Shipbuilding. Safmarine ordered four 18,000 dwt MPVs in 2008 from Wuhu Ship- yard with deliveries initially scheduled from the end of this year to mid-2011, although this has slipped to 2012. Up close and personal Safmarine Sumba. (c) Debbie Owen. The ships will be deployed on Safmarine’s services linking West Africa with Europe, Asia, North America and South Africa carry containers, breakbulk cargoes such as cocoa, timber, steel that include direct calls at more than 60 ports. The vessels, which and project cargo including equipment related to the oil and gas will join the carrier’s existing fleet of 14 chartered ships, will industry. ]

Making history in the Americas

Hamburg Süd, the container line that is part of Germany’s Oetker Group, has made maritime history after christening the first boxship ever in the Peruvian port of Callao. The Cap Jervis is the second of two sister ships that were built for Hamburg Süd by South Korea’s Daewoo Shipbuilding & Marine Engineering. The first of the pair, Cap Jackson, also entered the record books after becoming the first container ship christened in Mexico when the ship was named at Manzanillo in early September. Both vessels have a capacity of 4,600 teu and have been deployed on Hamburg Süd’s Asia and Mexico/South America west coast (ASPA) service. The godmother to the Cap Jervis, which was named after a site about 100km south of Adelaide in South Australia, was Adelgunde Christmann, wife of Dr Albert Christmann, who is chairman of the executive board at Germany’s Radeberger Gruppe. Both vessels are 264m long and have a service speed of 22.5 knots. Unfamiliar ground: Cap Jervis christened in Peru

November/December 2010 asiamaritime 49 amdiaryamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Sailing by

After the sale of seven very large crude carriers by Captain at around US$3.2m. This Charles Vanderpeere’s Vanship Holdings earlier this year, comes is the kind of price one the disposal of another of the late Captain’s prized possessions, his could expect to pay for luxury motor yacht Shinyo Florentina V. Named after his daugh- a 1990-built, 3,500 cu m ter, the Broward-built vessel has been moored virtually unused in gas carrier, although ob- Hong Kong’s Gold Coast marina since the Captain’s passing in Sep- viously not half as much fun. tember last year. We hear though that the acquisition of the 20-knot motor yacht But now we are happy to report the yacht, which has under- created a bit of internal friction over the issue of where the vessel gone several refits since being built in 1987, has now at last gone should be registered. While choosing the flag was no problem, to a good home having been bought by Hong Kong’s Tiger Group with the Cayman Islands rather than Hong Kong favoured, the Investments. Graham Porter, the firm’s chairman who is also closely Caribbean ship registry offered the company three ports of registry. linked with boxship owner and charterer Seaspan, said the yacht is Sadly discretion meant that those within Tiger who decide these being renamed SeaTiger after SeaTiger Capital. This was the invest- things opted in favour of the ubiquitous George Town rather than ment vehicle formed earlier this year by Tiger Group Investments Bloody Bay which at least one Tiger Group senior executive fa- and New York-listed outfit, Seacor Holdings. voured. A fear of heights, an aversion to being prodded in the back Mr Porter did not reveal the purchase price although a quick by a cutlass and a one-way trip on a wooden board prevents us scan of yacht brokers on the internet shows the vessel was on offer from naming names. ]

MAW, MAW! Impressed Hong Kong’s maritime industry turned out in force to hear act- with Clay ing government chief executive Henry Tang open Maritime Awareness Week at the end of October. Loud, brash, opinionated and while Speaking at a reception which attracted about not everyone’s cup of tea, we like him. So 300 of the territory’s leading maritime players, Mr it’s good to see Clay Maitland being rec- Tang said: “To stay ahead in the competition, we ognised by the United States Coast Guard must look beyond the handling of containers and for his personal and direct contributions move up the value chain. We shall also nurture a to the guard. Mr Maitland is better known pool of local maritime professionals.” in Asian circles as a managing partner in Sadly though Mr Tang offered International Registries that administers the no new solutions as to how these Marshall Islands ship registry. Mr Maitland aims should be achieved, except was presented with the Distinguished Pub- of course by offering the usual lic Service award “in recognition of nota- platitudes. This included capitalis- ble services that have greatly contributed ing on its status as a free port and to the advancement of the missions and low and simple tax regime, while goals of the Coast Guard”. ] continuing with training incentive schemes for deck and engineering cadets as well as ship repairers. We were also surprised the week also included a beach cleaning and tree planting, not normally seen as seafaring jobs except perhaps as a ship-wrecked castaway. ]

USCG poster boy Clay Maitland Henry Tang Hong Kong's acting Chief executive and part time campanologist 50 asiamaritime November/December 2010 amdiaryamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam Date s Breakbulk Asia Conference & Exhibition Singapore recognises 24-26 January 2011 Suntec Singapore International role of armed forces Convention Centre Singapore in fight against pirates Contact: [email protected]

The Singapore government has been handing out the gongs to a 6th Philippine Ports and Shipping 2011 group of its armed forces that recently completed a six-month tour of duty 27-28 January 2011 protecting the sea-lanes off the Gulf of Aden and in the Somali Basin. The Peninsula Manila Some 300 personnel together with two officers assigned to Combined Philippines Task Force 151 received the Overseas Service Medal from deputy prime Contact: [email protected] minister and defence minister Teo Chee Hean and defence force chief, Lieutenant-General Neo Kian Hong. 13th Global Liner Shipping Conference Congratulating the personnel, Mr Teo said that a Fokker 50 maritime 4-5 April 2011 patrol aircraft would be deployed between December and February to carry Radisson SAS Portman, London out maritime surveillance of the area. The Singapore Armed Forces will also UK take over the command of CTF 151 from March to June next year. Mr Teo Contact: [email protected] said another Singapore contingent equipped with a landing ship and two Super Puma helicopters would be deployed in the Gulf of Aden in the sec- Sea Asia 2011 ond half of 2011. 12-14 April 2011 Of course it would be churlish of the Asia Maritime team to point out Marina Bay Sands that the thousands of seafarers who place themselves in danger on a daily Singapore basis while sailing in the Gulf of Aden, Somali Basin and the wider Indian Contact: [email protected] Ocean receive no such recognition. But was it ever thus? ]

Captain Gregorio Oca Demise of a hero will be sorely missed

Filipino seafarers, faced with harsh living and work- tional maritime community. He ing conditions at sea, have had few natural champions in the was a seafarer first before he be- Philippines fighting on their behalf on shore. Sadly, the number came a maritime trade union lead- of these stalwarts is one fewer following the death of Captain er and this earned him the genuine Gregorio Oca, chairman of the Associated Marine Officers’ and respect and recognition not only Seamen’s Union of the Philippines (Amosup) on November 21. of his peers and colleagues in The 83-year old laboured for seafarer rights for five decades the Philippines, but also by leaders of international maritime after founding the Associated Marine Officers’ Union of the organisations.” Philippines in November 1960. The union later merged with International Transports Workers Federation general secre- the Associated Seamen’s Union of the Philippines to create tary David Cockroft said: Amosup in 1972. “Greg was a tireless leader of Amosup and a lot of what that His perseverance, hard work and leadership led to the crea- union has built and achieved can be laid at his door. Seafarer tion of a seamen’s hospital and seafarer’s home and the found- training, health and welfare were particularly close to his heart ing of the Maritime Academy of Asia and the Pacific, which and if there is some comfort in this sad loss it’s that the work has a renowned reputation around the world as one of the best that he did in those areas - including the building of hospitals maritime training institutions. and training academies - will live on and serve as a monument Leading the tributes, Philippines Department of Labor and to his career.” Employment secretary Rosalinda Dimapilis-Baldoz, said: “I am He added that Capt Oca was a “warm and vibrant personal- deeply saddened by the passing of Kap Oca whose leadership ity as well as a great campaigner and leader. He will be hugely in the maritime industry was highly recognised in the interna- missed by all of us”. ]

November/December 2010 asiamaritime 51

Hard-headed cyclists ammaritime’s back pagesamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam China enters LNG carrier market K K Chahda recalls the arrival of Dapeng Sun

China’s shipbuilding industry entered a new era in De- cember 2005 when Dapeng Sun, the country’s first domestically- built liquefied natural gas (LNG) carrier, sailed out of Shanghai’s Hudong-Zhonghua shipyard. The 147,210 cubic metre (70,000 tonnes) ship filled a blank in China’s shipbuilding history because until then LNG carriers were regarded as high-tech products with high-added value and were built only in Japan, South Korea and some European countries. China invested more than 100m yuan (US$15m) on research and technology development in order to gain a share in the grow- ing global LNG market and signed the contract to build the two LNG vessels in August 2004.

Since the delivery of Dapeng Sun China has not looked back China’s rising sun The Dapeng Sun, 292 meters long and 43.35 wide, was the first LNG carrier to be built at a Chinese yard, owned by a Chinese “Cooperation between Kongsberg Maritime has ensured that company and deployed in the country’s first LNG import project. the design and installation of the first CTS in China was a success- The sister ship was delivered in early ful operation,” he added. 2008. The two membrane-type ships cost US$400m. The system also generates a CTS loading/unloading report; the The two ships are owned by China LNG Shipping Holdings, a official document used for purchasing the gas transported. The then joint venture of China National Offshore Oil Corp, COSCO and new K-Gauge flexible report system made it easy to adapt the sys- China Merchants Group. They haul LNG from Western Australia to tem for the changing requirements on the LNG spot market and/or a terminal at Shenzhen in southern China. changes in fixed long term sale and purchase agreements, by mak- It took Hudong-Zhonghua more than three years to complete ing it possible to change both the report layout format and the CTS Dapeng Sun. It began assembling blocks in June 2005. Heatproof parameters. work on tanks and other outfitting work took two years. The ship Hu Weiping, Director of Bureau of Energy, NDRC, said: “In was due for completion in October 2007 but outfitting work took 2020, the country will be using up to 35m tonnes. That means we about 27 months, delaying completion by six months. will need 30 to 40 LNG tankers.”

Getting the hang of it Putting LNG to use Hudong-Zhonghua managed to cut the period of outfitting work In August this year, China Natural Gas used a modified ship pow- on future LNG carriers to about 17 months and has developed a ered by LNG to test navigation in Wuhan. The company powered a 160,000 cu m design. tugboat of 300 tonnes with LNG for the Wuhan Ferry Co. This was The specifications for vessels were based on highest interna- the first time an LNG-powered ship had navigated China’s domes- tional standards for LNG vessels, and the yard received technical tic waterways, demonstrating that LNG can be used in cars and support from Chantier de’Atlantique, a long-standing LNG ship- ships. The ship now runs on a fuel formula of 30% diesel and 70% builder in France. natural gas, representing significant cost savings. China Development Bank provided financing for the construc- “This achievement is a big step in the history of China’s new tion of the vessels. energy industry and will contribute to environmental protection Dapeng Sun was delivered with Norway’s Kongsberg Mari- and reduce energy consumption,” said CEO Qinan Ji. time’s K-Gauge Custody Transfer System (CTS) onboard as LNG is a “Marketing of LNG-powered ships will be implemented in the difficult cargo to handle. coming years. Our subsidiary Hubei Xilan Natural Gas will coop- “Dapeng Sun is a technically advanced vessel, with the capac- erate with Wuhan Ferry Co in the passenger transport business to ity to carry LNG equivalent to one month’s use for Shanghai resi- explore further applications for this revolutionary kind of vessel. dents,” said Siri Frøseth, We expect to achieve extensive coverage with our LNG-powered Kongsberg maritime’s project manager in Shanghai at the time. ships along the Yangtze River,” he said. ]

52 asiamaritime November/December 2010 11 Across: World-class leader in container transportation and logistics. Quick answer: Call your local customer service representative today.

We offer the solution to your biggest challenges.

www.oocl.com 2010.8.27