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BRUSSELS: June 20, 2018. According to the Shipbreaking Platform, a coalition of NGOs trying to prevent toxic end-of-life ships from being beached in developing countries, the shipping industry is trying to undermine the European Commission’s Ship Recycling Regulation that comes into force in December this year.

Platform founder and executive director Ingvild Jenssen says the recent decision by the Chinese government to stop the import of end-of-life ships for scrapping has prompted operators to claim the EU doesn’t have enough recycling capacity and therefore they should be allowed to use existing beach yards in South East Asia.

Chittagong scrap yardThe 21 facilities that are currently on the EU List can recycle at least one million scrap tons (LDT) a year with 10 yards taking large vessels. The Platform says in 2017 less than 500,000 LDT was registered under an EU flag at end-of-life and 245,827 LDT ended up on the tidal shores of India, Bangladesh and Pakistan.

“As much as it is a pity that the Chinese yards who have already made efforts to be included on the List may now no longer be receiving EU-flagged ships for recycling, [we have] calculated that the facilities which are currently on the List, the 21 EU-based ones only, are in fact sufficient to recycle the entire EU-flagged fleet at end-of-life,” claims Jenssen.

Additional capacity outside the EU, as well as those operating in Italy and Norway, are expected to be included on the EU List before the application of the Regulation.

“The overall capacity and sizes of all the facilities that are compliant with EU law will easily accommodate the recycling needs of EU-flagged ships by January 01, 2019,” continues Janssen. “The scaremongering of the shipping industry therefore needs to be debunked, and the European Commission should not bow-down to the “’fake news’ spread by the ship owners.”

The Shipbreaking Platform, formed in 2005 by a coalition of environmental, human and labour rights organisations, says the majority of the ships sold for breaking today are run up on the tidal shores of India, Bangladesh and Pakistan - resulting in “extremely severe pollution, dangerous working conditions, exploitation of workers, and a blatant violation of international hazardous waste management laws”.

Janssen points out that 30 percent of end-of-life ships are owned by European companies – compared to only six percent registered under an EU flag: “There will be a need to support the expansion of existing or building of new facilities to ensure the clean and safe recycling of the many larger vessels that are owned by European companies. Circular economy is the buzzword and a return scheme for ships is the solution.”

Pictured: Chittagong, Bangladesh shipbreaking yard photographed by Andreas Ragnarsson.

 

LONDON: June 06, 2018. Insurer TT Club and McKinsey have published the opinions of over 30 experts on what the future holds for the ocean container industry over the next 25 years.

Dubbed ‘Brave new world? – Container transport in 2043’, the report is a qualitative insight into the perceptions and confidence of the people the two companies think have greatest experience in the industry, and are best placed to predict the sector’s future.

They included supply chain professionals, financial intermediaries, law firms, disruptors and innovators.

Port of Felixstowe containersThe report makes five predictions:

  1. The physical characteristics of the industry are unlikely to change, as the container and the ships that carry them will still exist over the next 25 years
  2. Trade flows will become more balanced across trade lanes as incomes converge between East Asia and developed economies, and the emerging economies in South Asia and Africa “catch up”.
  3. Automation will be broadly adopted across the value chain, especially on the landside in ports, terminals, rail and trucking, to unlock significant efficiencies.
  4. Digital, data, and analytics will cause a fundamental shift in the sources of value creation and customers will expect a high level of reliability, transparency and user-friendliness.
  5. The industry leaders in 2043 will look very different; some will consolidate, others may change their business model. Some will be “digital natives”, either start-ups or e-commerce players optimising the container transport leg of their supply chain.

Commenting on the report TT Club CEO Charles Fenton observed: “We believe the container transport industry will face challenges as technology changes the environment, but we are confident that an industry that has shown itself adept at change will rise to meet these challenges. The container’s simplicity and modularity has made it the mode of choice for transporting many goods across the globe.”

McKinsey senior partner Martin Joerss added: “More than 50 years after the introduction of the container, the transport industry faces the transformative rise of digital, data, analytics, and automation. There is a range of futures where digital fundamentally changes the industry’s economics – for the benefit of both customers and industry participants – but getting there will require vision and relentless execution.”

TT Club and McKinsey's 'Brave new world' report

NEW YORK: May 22, 2018. Allianz Global Corporate & Specialty (AGCS), part of the Alliance insurance group, has expanded its project cargo offering to provide end-to-end coverage for companies with “unique and complicated risks”.

Underwritten by AGCS Marine, the project cargo insurance is designed to cover shipment of equipment and machinery to a construction site; loss or damage of components in transit that are part of a large infrastructure project; and project delays due to the late or non-arrival of critical components.

“By having a single policy cover both marine and engineering risks, there are tremendous benefits [including] enhanced risk management, expedited policy issuance and claims resolution,” said Kevin Wolfe, AGCS global head of Project Cargo. “We now provide a single point of contact for clients and brokers, which makes it easier to identify whether a loss occurred in transit (marine) or during a construction phase (engineering),” he added.

COMBILIFTAlliance said the growing need for project cargo insurance has been prompted by stricter regulations governing plant efficiencies and air quality, as well as increasing demand for alternative energy sources.

“Companies on all continents are increasingly seeking convenient and comprehensive insurance for large-scale projects which is why this collaboration is attractive to them,” explained Christopher van Gend, global head of Engineering.

A recent example of project cargo insurance cover by AGCS was the move of the steel-hulled four-masted barque freighter ‘Peking’ from New York City to Hamburg by Herren & Partner’s semi-submersible heavylift vessel CombiLift 111.

A so-called ‘Flying P-Liner’ owned by the German shipping company F. Laeisz, the ship was launched in February 1911 as one of the last of the four-masted windjammers to carry wheat and nitrates between Europe and South America.

Docked at Valparaiso, Chile at the outbreak of World War I, the Peking was subsequently awarded to Italy as war reparations, before being sold in 1923 back to its original owners who continued operating it on the South America nitrate trade until the opening of the Panama Canal made it uneconomic.

‘Peking’ was eventually sold to New York’s South Street Seaport Museum in 1974 and then moored on the East River until 2016, when the city decided to offer it as a gift to its home port of Hamburg rather scrap it. The offer was contingent on preserving the vessel and a consortium, backed by the German government, purchased the ship for US$100 as a feature of the German Port Museum due to open in 2020.

After a 13-day Atlantic crossing the vessel is now at Wewelsfleth, a small town on the River Elbe near Hamburg, undergoing a three-year restoration.

“The return of the Peking was an adventure not only because of its history, but also because of the connected insurance challenges that were custom-made for this exposure,” said Volker Dierks, head of Marine Hull Underwriting, AGCS Central & Eastern Europe. “After the refurbishment, she can teach the public about the past hardships of a sailor’s life. At that time, wind was the most important factor for a successful and safe journey.”

AGCS provides insurance solutions to over 75 percent of the Fortune Global 500 companies, writing premiums with a gross value of €7.4 billion last year.

WASHINGTON, DC: May 10, 2018. Japanese ocean carrier Nitta Kisen Kaisha (Nitta) has been fined US$1.0 million by the U.S. Department of Justice (DoJ) for dumping oil waste and falsifying its records as part of a port call at Wilmington, NC.

During the delivery of steel products by the M/V Atlantic Oasis, owned and operated by Nitta, a junior engineer told the U.S. Coast Guard how oil waste from the vessel’s fuel and lubrication oil purifier systems, as well oily bilge waste, was secretly discharged into the sea via hidden hoses.

Nitta admitted its engineers, including former chief engineer Jihnyun Youn, had obstructed justice and falsified an ‘Oil Record Book’ as part of a cover-up. According to the DoJ, chief engineer Youn had previously been convicted and sentenced for falsification of the vessel’s Oil Record Book.

MV Atlantic OasisIn addition to a fine, Nitta was placed on probation for three years and ordered to implement an audited comprehensive Environmental Compliance Plan (ECP) throughout the period. Youn was fined US$5,500 and received a one-year probation.

“While the charges in this case rest on the failure of the ship’s crew to properly document the discharge of oily bilge waste, the heart of this case is the illegal discharge itself and the damage that action did to our environment – particularly our spectacular seashores and waterways,” said US attorney Robert Higdon for the Eastern District of North Carolina.

“We trust that the fines and penalties imposed in this case will act as a deterrent to anyone who would treat our environment as a dump-ground,” he added.

In December 2016 the DoJ fined Princess Cruises a record US$40 million for dumping oil waste - and covering up the practice since 2005 - using a so-called ‘magic pipe’ to bypass the pollution prevention equipment on the Caribbean Princess. During the investigation the DoJ found other illegal practices on four other company vessels.

As part of a plea agreement with Princess, ships from other Carnival Corporation companies including Carnival Cruise Line, Holland America Line, Seabourn Cruise Line and AIDA Cruises are subject to a court supervised ECP until 2021.

TAIMYR PENINSULA, Siberia Federal District: April 03, 2018. According to Russia president Vladimir Putin, the Northern Sea Route to Asia will be key to developing the Russian Arctic with traffic expected to reach 70-80 million tons annually by 2025.

Putin met recently with Rosatom head Alexei Likhachev who said at least 70 million tons of ore and metals will be transported annually eastwards to markets in Southeast Asia and additional volumes from Dudinka and the Yamal region westward to European markets.

Northern Sea RouteRosatom is a subsidiary of Russia’s Nuclear Energy Corporation that operates a fleet of nuclear-powered icebreakers used on the Northern Sea Route.

Likhachev told Putin that to meet the demands of more ship traffic, Russia would need to build larger nuclear-powered icebreakers with 120 MW of power, double the size of current vessels. ”Such a unique icebreaker does not exist in the world today and will allow us to develop the north at a pace that is currently in the plans of subsoil explorers, primarily Novatek,” he explained.

Novatek owns 50.1 percent of the Yamal LNG processing plant in partnership with Total and CNPC (20 percent each), and the Silk Road Fund (9.9 percent), to tap natural gas reserves equivalent to over four billion barrels of oil. Each year nearly 16.5 million tonnes of LNG is expected to leave Sabetta Port to customers in Europe and Asia.

On March 31 the Northern Shipping Company (NSC) multipurpose vessel Johann Mahmastal unloaded 2,500 tons of general cargo in fast ice near the Tanalau cape on the Yenisei River for the Payakhsky oil field in the Taimyr Peninsula.

Due to the short delivery window and ice accumulation on the supporting nuclear icebreaker, close cooperation was needed between NSC, the Arctic and Antarctic Research Institute, and Russian production company Taimyr Neftegaz in order to unload on time.

DOHA: May 02, 2018. Milaha, a Qatar-based maritime transport and logistics corporation, will launch a two-day container feeder service between Qatar and Iraq on May 07, 2018.

Milaha feederThe new service, an expansion of a Qatar-Kuwait route the company launched last year, will operate a Hamad Port-Umm Qasr (Iraq)-Shuwaikh (Kuwait)-Hamad Port (pictured) rotation with one 1,015 TEU capacity vessel incorporating 110 reefer plugs.

Shipments are expected to include dry and refrigerated food stuff, consumer electronics and construction materials.

Commenting on the launch of the new service, Milaha president and CEO Abdulrahman Essa Al-Mannai said: “There has been excellent demand on the Qatar-Kuwait service that we launched last year, and we have been looking at ways to further expand that service to give our Iraqi clients and partners more convenience through greater port coverage and reduced transit times.

“This new service will contribute to the reconstruction efforts in Iraq, and will also help boost the growing trade and economic relations between Qatar and Iraq,” he added.

Since 2017 Milaha has deployed several new services in the region and now links Qatar with Sohar and Salalah in Oman, Nhava Sheva, Mundra and Kandla, India; Shuwaikh, Kuwait; Karachi, Pakistan; Colombo, Sri Lanka; and Chittagong, Bangladesh.

Founded in 1957 as Qatar Navigation, the first publicly-listed company in Qatar, Milaha services now include the marine transport of gas, petroleum products, containers and bulk; offshore support services; port management and operations; logistics services; shipyard; trading agencies; real estate investments; and asset management.

NUUK, Greenland: March 27, 2018. Royal Arctic Lines, the provider of liner services linking Greenland with Europe and the US, has placed an order with Spain’s Zamakona Yards for two multipurpose vessels for delivery by 2020.

RAL 2With greater capacity than the two ships they will replace, the newbuilds will operate services to settlements in northwest Greenland.

The Company accepted delivery of a newbuild, Malik Arctica, in the first quarter of 2017 and has placed an order for a new 2,150 TEU vessel with the Chinese shipyard Wenchong in Guangzhou for delivery in 2019.

Royal Arctic Line A/S was founded in 1993 and builds on more than 200 years of experience with shipping to and around Greenland - first as Den Kongelige Greenlandske Handel (The Royal Greenland Trading Company), then as KNI, and then since 1993, as Royal Arctic Line.

The company is owned by the government of Greenland and provides handling, forwarding and liner cargo and passenger services to 13 harbors throughout the country to and from Aalborg, Denmark.

Royal Arctic Line said it forecast a profit before tax of between DKK 5 and DKK 15 million for 2017.

CHARLESTON, SC: April 11, 2018. The South Carolina Ports Authority (SCPA) reports an all-time record in March container volume with a four percent increase year-on-year to 199,659 TEUs handled.

“The record volumes achieved by our port in March reflect seasonally strong volume in all segments combined with the further deployment of big container ships to the U.S. East Coast,” said Jim Newsome, SCPA president and CEO. “SCPA’s significant investment in terminal infrastructure is bearing fruit in terms of operational efficiency.”

Charleston harbor The Port of Charleston has handled 909,614 pier containers since July, two percent more than the same fiscal period last year.

March also marked a record for finished vehicles, with 28,391 moving through SCPA’s Columbus Street Terminal as breakbulk shipments totaled 80,683 tons during the month.

BMW Manufacturing exported 272,346 BMW X models from its Greer, SC plant last year. Nearly 87 percent of the vehicles, valued at over US$8.76 billion, were shipped via the Port of Charleston, according to data from the U.S. Department of Commerce.

The remaining 13 percent were exported through five other East Coast ports: Savannah, GA; Brunswick, GA; Jacksonville, FL; Miami, FL; and Everglades, FL.

“BMW X models manufactured in South Carolina continue to be a major contributor to the BMW Group’s success,” said Knudt Flor, president and CEO of BMW Manufacturing. “Plant Spartanburg’s achievement as the country’s leading automotive exporter demonstrates BMW’s trusted partnership with this state, its contribution to the U.S. balance of trade, and its commitment to the United States,” he added.

SCPA says its Inland Port Greer, next to BMW Manufacturing some 26 miles from Spartanburg, handled 10,612 rail moves last month with year-to-date volume nearly three percent higher than 2017.

“BMW is a leader in automotive manufacturing and driver of both import and export volume growth of the port,” said Newsome. “As customers of both Inland Port Greer and the Port of Charleston, BMW’s multiple expansions have been exciting opportunities for the port, and we value our role in its international supply chain.”

BRUSSELS: February 21, 2018. The European Commission (EC) has levied fines totaling €546 million on four maritime car carriers and three major car parts suppliers in separate anti-trust settlements.

Prompted by whistleblower MOL that has avoided a fine, the EC says CSAV, "K" Line, MOL, NYK and WWL-EUKOR participated in a cartel between October 2006 and September 2012 to carry new cars, trucks and other large vehicles on various routes between Europe and other parts of the world.

WWL ZeebruggeIn acknowledging their behavior, four carriers have agreed to pay fines totaling €395 million. WWL-EUKOR tops the list at €207.3 million followed by NYK with €141.8 million, "K" Line at €39.1 million and CSAV with €7.03 million.

In addition to frequent phone calls, sales managers from the five carriers coordinated their cartel by meeting at carrier offices or in bars, restaurants and other social events to coordinate prices, allocate customers and fix charges and surcharges to offset currency or oil prices fluctuations.

The carriers also agreed to not compete with each other's traditional business on certain routes, or with certain customers, by quoting artificially high prices on tenders - or not quoting at all.

Commenting on the fine WWL-EUKOR CEO Craig Jasienski said: "Whilst I deeply regret the outcome, we are pleased that the EC investigation has concluded. WWL group are (sic) committed to honest and fair business practices; this is an unfortunate part of our past and we must ensure it cannot occur again."

In a second decision, the EC found Bosch, NGK and operated a cartel to supply spark plugs to car manufacturers in the European Economic Area and fined Bosch and NGK €76 million. Denso was the whistleblower in this case and so avoided a penalty.

The EC reached a third settlement with TRW, Bosch and Continental relating to two cartels for the supply of hydraulic and electronic breaking systems. TRW received immunity for revealing the hydraulic cartel and Continental for the electronic one. Bosch was fined a total of €31.4 million for its involvement in both cartels and Continental was fined €44 million for participating in the hydraulic cartel.

Margrethe Vestager, EC head of Competition Policy noted: "The Commission has sanctioned several companies for colluding in the maritime transport of cars and the supply of car parts. By raising component prices or transport costs for cars, the cartels ultimately hurt European consumers and adversely impacted the competitiveness of the European automotive sector, which employs around 12 million people in the EU."

The EC says the cartel affected European car importers, final customers as well as European auto manufacturers.

LONDON: April 04, 2018. Shipping consultancy Drewry says multipurpose ocean shipping is forecast to recover over the next five years due to rising demand, more disposals and less competition.

Project Cargo“This year has started with renewed optimism and it is Drewry’s belief that the market has finally turned that corner,” said Drewry’s lead analyst for the multipurpose sector Susan Oatway. “Rate rises are never stratospheric in this sector, but we believe a steady growth of around 2-3 percent per year is possible over the forecast period.”

A new report by Drewry on the  breakbulk and project cargo sectors says conditions are now ripe for recovery as demand for dry cargo capacity increases and older, smaller, less heavylift-capable tonnage is scrapped.

Despite the imposition of tariffs by Donald Trump on US steel imports - particularly from China - Oatway said the exclusion of its two biggest suppliers, Mexico and Canada, suggests the annual 45 million tonnes of U.S. steel imports represents just 8.0 percent of the global trade and therefore unlikely to impact the supply side.

Acknowledging the International Maritime Organization’s 0.5 percent sulphur cap on marine fuel from 2020, the Drewry report says owners are looking at three costly compliance measures: installing scrubbers, using expensive low-sulphur fuel or a switch to LNG-fuelled vessels.

With nearly 10 percent of the global fleet over 30 years old, Drewry suggests the IMO compliance will prompt owners to scrap vessels with lift under 100 tons and focus on the project cargo sector.

“Some 80 percent of all newbuildings over the last five years have heavylift capability, and at least 70 percent of the order book has this capability. The project carrier fleet is growing, but it will be some time before it reverses the decline in the overall multipurpose fleet,” added Oatway.

SABETTA PORT, Russia. February 09, 2018. The Yamal LNG gas project has appointed GAC Russia to manage its fleet of icebreaker tankers at Sabetta for the next three years. The company is expected to handle an estimated 200 calls at the LNG port every year.

christophedemargerie dimitriy monakov total.com The contract follows last year's sea trials of the world's first ice-breaking LNG tanker, named after former Total head Christophe de Margerie. The vessel is the first of 15 similar vessels to serve Russia's Yamal project that will export liquefied natural gas from the country's South-Tambeyskoye gas field to European and Asian markets year round via the Northern Sea Route.

Yamal LNG is owned and operated by a partnership of Novatek (50.1 percent), Total and CNPC (20 percent each) and the Silk Road Fund (9.9 percent) to tap natural gas reserves equivalent to over four billion barrels of oil. Assuming no trade sanctions, each year nearly 16.5 million tonnes of LNG is expected to leave Sabetta to customers in Europe and Asia.

Christophe de Margerie is an Arc7 ice class vessel capable of sailing independently through ice up to 2.1 meters thick. The ship can operate along the Northern Sea Route westward from Sabetta year-round and eastward from July to December.

GAC Russia's general manager Tatyana Shorokhova commented: "We are privileged to be working so extensively with Yamal LNG on this historic project. Coupled with our ongoing expansion into the Russian Far East, this makes GAC Russia the only ship agent with a presence throughout the interconnected Arctic region and the Far East. With offices in Nakhodka and Yuzhno-Sakhalinsk, we cover 22 maritime ports in the region."

The company has been in Sabetta since the start of the Yamal LNG project when there was no access by land or sea. In 2011 construction began on a regional transportation hub, the port of Sabetta and an international airport.

Picture: Christophe de Margerie at Sabetta Port courtesy of Dimitriy Monakov, Total.

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