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Strike Aviation Group

Strike Aviation Group

 

Ai Logistics Network

 

OSLO: In a new review of 15 leading maritime cities, Singapore has retained its No.1 position followed by Hamburg, Oslo, Hong Kong and Shanghai.

Norwegian consulting company Menon canvassed a group of experts for their views based on five criteria: shipping centers, maritime finance and law, ports and logistics services, maritime technology and attractiveness and competitiveness.

Noting its "business friendly policies" and strategic location, the Menon report acknowledges Singapore "has gained a position in the global economy few would have predicted 40 years ago".

While Oslo is strong in maritime finance and technology, it takes third place overall behind Hamburg because of the latter's importance as a European port city. Meanwhile, China's position as the world's largest trading nation is confirmed by Shanghai joining Hong Kong to make up the Menon list of top five cities.

Top Maritime portsAlthough London is acknowledged as the world's leading city for maritime finance and law, and Rotterdam's strength lies in port and logistics services, the race to become Europe's leading port remains open says the consultancy.

Looking out to 2020, Menon thinks Singapore will keep its position as the world's No.1 while Shanghai is expected to move up to second place. However its group of experts had difficulty in forecasting a clear third place as they ranked Rotterdam, Oslo, Hamburg, Hong Kong and Dubai almost equally.

However, the city they believe will increase its importance the most in the next five years is Dubai because of strong political support and its fast-growing position as a preferred trading center for the region.

On June 03, the Dubai Maritime City Authority (DMCA) announced it was launching an advisory council to encourage collaboration between private and public industry stakeholders.

"This initiative will nurture closer collaboration and mutual understanding between all the key maritime industry stakeholders in Dubai," said DMCA executive director Amer Ali. "By engaging with businesses on this level Dubai can achieve buy-in from industry to support its ambitious, strategic maritime objectives, while we also build our own understanding of exactly what our private partners want from a global shipping hub."

DMCA says Dubai is "proving a major pull for international maritime firms" and the port sector now contributes 4.6 percent (AED 14.4 billion) to the emirate's GDP.

The new advisory council includes DP World, Clarksons, Tufton Oceanic, United Arab Shipping Company, Maersk, Emirates National Oil Company, National Association of Freight and Logistics, UAE National Ship Suppliers Association, Wilhelmsen Ships Service, DHL Express and Aramex.

HAVANA: Coinciding with French president Francois Hollande's visit to Cuba, CMA-CGM has signed an agreement with Almacenes Universales S.A. (AUSA) to develop a new terminal facility at the container port of Mariel.

Mathieu Friedberg, head of the ocean carrier's logistics subsidiary said: "The platform of Mariel's is a first step in Cuba's land logistics development. It is also a new step in the acceleration of CMA CGM LOG's international development." The company recently acquired LCL Logistix, based in India.

Balearia 1The new venture with AUSA will form part of Mariel ZEDM - a new 4,600 hectares logistics and industrial project - and provide general and reefer warehousing, break-bulk, distribution and storage.

CMA CGM currently is one of only three shipping companies serving Cuba. This could change soon with the U.S. approval of Havana Ferry Partners of Fort Lauderdale and Baja Ferries USA to provide service to Cuba following U.S. government moves to establish diplomatic relations with the country following a decades-long embargo.

Spanish operator Balearia, following an application to the U.S. Treasury for a similar license, could join the two short-sea companies and operate additional services between Florida and the port of Havana: one via high speed vessel from Key West and a second with a ferry from Port Everglades.

The company has operated in the Caribbean region since late 2011 under the brand Bahamas Express, connecting Fort Lauderdale with Freeport, Grand Bahama.

"Our service to the Bahamas is now established and therefore we are ready to open new connections and markets in the area that will allow us to grow," commented Adolfo Utor, Balearia president.

In addition to its route to the Bahamas, the carrier also serves Tangiers and Gibraltar from Algeciras, Spain and said it is "considering" new lines to Puerto Rico or the Dominican Republic in order to boost its international revenue from 15 to 50 percent in the next five years.

COPENHAGEN: A.P. Møller – Mærsk has reported a pre-tax profit of US$1.75 billion for the first quarter of 2015, a drop of 16 percent over the same period last year.

Net profit rose 30 percent to US$1.57 billion – helped by a net gain of US$223 million from the sale of shares in Danske Bank.

Q1 gross revenue fell 10 percent to US$10.54 billion largely due to lower oil prices, while operating expenses dropped US$744m as a result of reduced bunker prices.

Group CEO Nils Andersen said Maersk Line, Maersk Drilling and APM Shipping Services drove an 18 percent increase in underlying profit of US$1.3 billion for the quarter. "The group now expects an underlying result of around US$4 billion for 2015," he added.

press-munkebo-maersk-in-algecirasMaersk Line reported a profit of US$714 million - up from US$454 million last year – following the completion of its 193-vessel sharing agreement with Mediterranean Shipping Company on the East-West network. The company expects to improve its 2014 underlying profit of US$2.2 billion this year as global container volumes rise 3-5 percent in 2015.

By the end of Q1, the Maersk Line fleet consisted of 273 owned vessels with a total capacity of 1.7 million TEU and a further 335 chartered vessels for a total capacity of 2.9m TEU. Five Triple­E vessels are due for delivery in Q2 2015. The company says it expects to place additional orders this year.

Damco, part of APM Shipping Services, made a loss of US$9m for the quarter, an improvement of $1 million over Q1 2014. Revenue was US$683 million, down 9.0 percent year on year, most of which was due to adverse exchange rates.

Supply chain management volumes rose 6.0 percent while ocean freight fell 2.0 and airfreight volumes fell 19 percent – mainly due to a drop in project air cargo last year that was not repeated in 2015. The company says restoring growth in ocean and airfreight segments "is a key focus area to improve overall Damco profitability" as margins in all three segments remained under pressure for the quarter.

LIVERPOOL: Peel Ports, the UK's second largest ports operator, wants the UK logistics industry to rethink supply chain and services routes in order to reduce freight mileage by 200 million miles over the next five years.

The company says cargo owners, importers and exporters can sve up to £400 per container by switching the delivery of ocean freight from south-east ports to the port of Liverpool.

Peel Ports' group commercial director Patrick Walters explained: "This initiative is about efficiency and sustainability. We have looked at the geographical demand for goods in the UK, comparing the point of entry of those goods into the country with the end destination and calculating the carbon emissions and potential savings. The reality is that 50 percent of demand for all UK cargo comes from the northern half of the UK, including Scotland and Ireland, [which is] not really surprising as 35 million people, including many in Ireland, live within 240km (150 miles) of Liverpool.

liverpool2 1Walters said Liverpool is the most centrally located port in the UK  yet only eight percent of goods use the historically important gateway. As a result, most cargo destined for the north currently uses road or rail: "incurring hundreds of additional miles, burning fuel, creating road congestion and adding to carbon emissions and costs," he added.

The Peel Port initiative is a prelude to the opening of a new Liverpool container terminal (right) in December this year - a development Walters said will be a viable alternative to current supply chains.

"Investments in transport infrastructure, road, rail and canals are already supporting the accelerated growth of businesses in the north. Taking advantage of these opportunities means making a conscious shift in today's supply chains and services. That shift is primarily to bring cargo closer to markets, thereby cutting the costs, carbon emissions and congestion resulting from inland transportation," he declared.

In April this year, General Mills said it would be the first tenant at a new state-of-the-art distribution hub at Peel Ports' facility at Salford that will save 600,000 road haulage miles each year.

Located adjacent to the Manchester Ship Canal that provides will provide a direct link with Liverpool's new container terminal, the port is expected to improve General Mills' supply chain and provide the company more opportunities to switch from road to rail.

Mark Whitworth, Peel Ports Group CEO commented: "This is a clear endorsement of the benefits to the UK supply chain that we envisaged when developing port Salford. Such investments are helping the North West to transform the UK logistics infrastructure."

MARSEILLE: In the week CMA CGM took delivery of its largest containership, the 17,700+ TEU Kerguelen, the company reported a 43.2 percent rise in net profit for 2014 to US$584 million on revenue of US$16.7 billion.

EBIT before disposals and impairments was US$973 million – up 28.8 percent over the previous year as TEU volumes rose 8.1 percent to 12.2 million.

The company said volumes were led by sustained growth in the Asia-North Europe and Asia-North Africa trades; the reorganization of CMA CGM and Delmas' Africa lines, combined with the opening of new inland corridors and dry ports; a "more vigorous U.S. economy"; the expansion of its Asia-Pacific subsidiary ANL; and the launch of an e-business platform that handled "an impressive" 1.3 million TEUs in its first full year of operation.

kerguelen-2CMA CGM vice chairman Rodolphe Saadé commented: "By combining operational excellence, disciplined financial management and innovation, we have delivered strong growth in results with one of the industry's highest margins and an even healthier balance sheet.

"We have entered 2015 with a fresh commitment to growth and are going to drive faster momentum by continuing to demonstrate our agility, with the launch of the Ocean Three strategic alliance, new solutions and new ports of call, and the strengthening of our positions in shipping-related businesses, such as logistical services, inland transport and port terminals," he added.

The company said it expects the global container shipping market to expand by around five percent in volume this year, led by sustained growth in the U.S. economy and the improving outlook in Europe, "albeit with a certain amount of geopolitical uncertainty". It noted the recent decline in bunker prices may have a positive impact on operating results this year.

CMA CGM will take delivery of six 18,000-TEU vessels and twelve 9,400-TEU containerships in 2015. In addition to receiving three 2,500-TEU ice-class vessels next year, the company is expected to order three more 20,600 TEU vessels for delivery in 2017. During 2014, the company increased its reefer inventory by 7,000 to over 105,000 units due to what it says is a level of demand that is exceeding the rest of the market.

HAMBURG: Hamburg Süd reports a "modest 2.3 percent" increase in volume to 3.375 million TEU in 2014. The ocean carrier says it achieved a "positive, albeit less than satisfactory result" from liner services despite difficult market conditions.

Capital expenditure was €348 million last year, 23 percent lower than 2013, and mainly comprised deposits and final payments for 10 ships of between 4,800 and 9,600 TEU. Another three 'Cap San' newbuilds (right) are scheduled for delivery in 2015.

Cap San AugustinAt the end of March Hamburg Süd took over the liner services of Compañía Chilena de Navegación Interoceánica (CCNI) between the west coast of South America and between Asia, North America and Europe. In addition to an increase of nearly 300,000 TEU in capacity, the company says it will achieve market leadership on "certain lanes" and is developing routes on which it has not previously operated.

Despite the cost of CCNI integration that will complete by the end of the first half of 2015, Hamburg Süd says it expects higher operating results for the year as a result of favorable exchange rates and lower fuel costs. Collaboration with UASC has also enabled the carrier to reduce its dependency on South America.

Although the IMF forecasts a 3.7 percent rise in global trade, the company says this does not imply a sustained recovery of container liner services in the coming year. On the back of low interest rates and fresh money it sees an eight percent rise in net slot growth in 2015.

The carrier warns that while positive results in box trades can be expected this year from falling bunker prices, "the industry will see sustained earnings improvements only if strict cost and capacity management is accompanied by sustained discipline in terms of rates."

Meanwhile its investments in more efficient ships has not only reduced operating costs but also contributed to a 29 percent reduction in CO2 emissions in 2014 – keeping the ocean carrier on track to achieve a 45 percent reduction by 2020 compared to a 2009 base line.

265 Transbo Express ENDUNKERQUE: The Ocean Three alliance of CMA CGM, China Shipping Container Line (CSCL) and the United Arab Shipping Company that began calling at Dunkerque in February, now has an inland waterway transshipment link to Lille and Dourges in France's Pas-de-Calais region.

Nord Port Shuttle (NPS) in now guaranteeing to reload alliance containers on one of its barges every Saturday and deliver overnight for discharge in Dourges on Monday morning and Lille in the afternoon.

As a result, Shanghai-originating containers can be delivered door-to-door in 30 days via Dunkerque and NPS under a "super-simple" Customs procedure says the port.

NPS chairman Christophe Thebaud commented: "From the first call, the idea of express transshipment has been welcomed by many shippers, as proved by the excellent filling rates already achieved for the weekend barge."

Dunkerque port CEO Stéphane Raison added: "In this innovative system, NPS has succeeded in combining the conventional economic and environmental advantages of waterway transport with the equally important concept of optimized transit time."

NPS is a local waterway service operated by a public/private partnership between the port of Dunkerque, Compagnie Fluviale de Transport (CFT), the Grand Lille Chamber of Commerce and Industry (CCIGL), and the Flanders Terminal.

In October 2013 NPS began operating a scheduled twice-weekly quay-to-quay container service between Dunkerque's Flanders Terminal and the terminals of Lille and Dourges providing an annual capacity of 15,000 TEUs.

MANILA: The Philippine Institute for Development Studies (PIDS) says the seven month-long truck ban in Metro Manila last year that cost the economy nearly a US$1 billion, underscores the need to address "complex problems with port congestion".

Manila portA new study by the state-funded think tank suggests the idea of just reviving a rail link from Bicol to La Union as an alternative to trucks would have a "negligible effect" on improving current port operations. Of the three major ports - Manila, Batangas, and Subic - Manila is widely used and most preferred by shippers, freight forwarders, logistics providers and truckers says PIDS.

However while shippers, consignees, and importers prefer the proximity of Manila (right) and its cheaper rates, they complain about the "red tape" of Customs procedures. In comparison, they say the port of Batangas has less convenient shipping schedules and handling facilities while Subic is also cited for poor schedules and the longer travel times to and from the port.

The PIDS study authors say Metro Manila needs a comprehensive policy framework to solve the congestion and the underutilization of Batangas and Subic: "In the short term, policymakers can introduce caps, revive the Philippine National Railway operation, and establish 24-hour web-based booking system to facilitate the logistics chain. But these have to be carried out together with a more strategic action. The government must invest heavily in capacity building at the ports and the train tracks, as well as rationalize future port development and investment programs in port infrastructure."

For the longer term, PIDS says that if the Philippines hopes to take full advantage of its economic growth, enhance its position as a transport hub in the region, and position the country's ports in the global supply chain, it must implement a strong and comprehensive national multimodal transport and logistics development plan.

DETROIT, MI: Advisory firm AlixPartners says the global container shipping industry continues to struggle financially with no clear end in sight.

In an annual review, the company notes the industry will continue to face supply and demand imbalances for years to come: "The recent and dramatic decline in fuel prices—while a welcome respite—is probably not going to relieve the industry's financial pain in the longer term.

"That said, many carriers are doing the right thing by shedding peripheral assets in favor of focusing on core container shipping operations. Successful carriers will likely match this focus on investment with an in-depth understanding of profitability at the trade, route, and customer levels," it adds.

MOL SamsungAccording to its report, the world's publicly traded ocean carriers reduced their debt 15 percent by the end of the third quarter of 2014 to US$91 billion from US$107 billion a year earlier. Capital expenditures fell 14 percent to US$18 billion from US$21 billion in 2013 as industry operating expenses dropped 4.0 percent, or US$7.6 billion, for the period.

Total revenue of the 15 major ocean carriers studied fell 3.0 percent in 2014 and the figure remains 16 percent off the 2008 peak of US$200 billion. As a percentage of revenue, cash from operations increased from less than 5.0 percent in 2012 (US$9 billion) to nearly 9.5 percent (US$16 billion) in 2014.

The report notes that despite declining overall revenues, the carriers achieved an average 7.0 increase in EBITDA over the same period following an increased focus on core business, cutting costs and selling assets. Only five of the 15 carriers showed EBITDA growth between 2012 and the end 2014 – all based in Asia.

According to AlixPartners, since the end of 2013 the average size of a vessel operating in the Asia-North America trades increased 9.0 percent to 6,566 TEUs while containerships operating on Asia-North Europe routes increased in size by 4.0 percent to 10,559 TEUs. And with the number of ships with more than 13,300 TEU capacity expected to double by the end of 2017, the company says the combination of over supply and a lag in demand is likely to see more Hapag-Lloyd/CSAV-type mergers in the future.

In March Mitsui O.S.K. Lines announced a deal with Samsung Heavy Industries for the construction of four 20,150 TEU ships for delivery in 2017. They are largest container vessels ordered to date.

MUSCAT: APM Terminals CEO Kim Fejfer says investment in infrastructure and the expansion of free trade zones are crucial to ensuring Oman remains a trade gateway to the Gulf region.

Speaking in Muscat, Fejfer said the country had an opportunity to develop integrated multimodal transport chains and to further develop world-class industrial parks and free zones near its maritime gateways: "By simplifying the business regulatory environment – Oman will attract even more entrepreneurs and capital that will reduce barriers to cross border trade," he stated.

Salalah11A current 20-year plan is developing Salalah (right) as a port hub with the construction of food processing, distribution and warehousing facilities, new terminals for liquid bulk storage and a direct rail network to link commercial centers in the Gulf Cooperation Council region.

At the same time, US$15 billion is budgeted to develop the port's FTZ to include chemicals and materials processing, manufacturing and assembly, plus logistics and distribution. A caustic soda facility and an LPG plant will be operational by the end of 2018.

Salalah, which is managed by APM Terminals, handled three million TEUs and 10.3 million tons of general cargo in 2014 – an increase of 30 percent over the previous year. An expansion of the port's general cargo capacity to 20 million tons of dry bulk commodities and more than 6 million tons of liquid products is already underway said Fejfer.

In a related announcement, APM Terminals Mumbai, a joint venture between APM Terminals and the Container Corporation of India, set a new record for Indian ports by handling 2.01 million TEUs during the 2014-15 fiscal year that ended March 31.

Part of the AP Moller-Maersk Group, APM Terminals had revenue of over US$4.45 billion in 2014.

seago line 2COPENHAGEN: Maersk Line has ordered seven 3,600 TEU container vessels plus two options for its European short-sea subsidiary Seago Line.

Established in 2011 and based in St. Petersburg, Russia, Seago operates 67 vessels with a total capacity of 133,000 TEUs throughout Northern Europe and the Mediterranean.

The new vessels, built to trade through sea ice, will be delivered between April and November 2017 and replace much smaller capacity that currently operates in the Baltic and North Sea.

The ships will sail on marine gas oil (MGO) and be compliant with SOx (Sulphur oxides) emission limits that came into force throughout Northern Europe in January this year.

Maersk says it is the first time it has placed a building order with COSCO in Zhoushan, China and it will also be the first time the shipyard has built container vessels.

The Seago ships are the start of a $15 billion, five-year investment program by Maersk Line that will include new buildings, retrofits and more containers in order to add capacity as well as replace less efficient chartered tonnage.

"I am very confident that COSCO Shipyard, with their solid shipbuilding experience and a good track record will deliver high quality and fuel efficient vessels," said Søren Toft, Maersk Line COO.

"Our strategy is to grow with the market and to do so we need new vessels from 2017. We expect to place additional orders during 2015," he added.

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