GENEVA/BRUSSELS: March 22, 2017. The impending operation of three ocean box alliances on April 01 has prompted fears of capacity constraints and rising prices according to FIATA and CLECAT, two organizations representing the interests of over one million forwarders and logisticians worldwide.
In a review of the services provided by 2M, Ocean Alliance and THE Alliance, Drewry Maritime said that while there is plenty of coverage and overlap between the busiest trading regions, it acknowledged there are "some areas with limited competition...which will hopefully change in time".
CLECAT and FIATA claim this isn't happening as maritime capacity to Asia has "decreased dramatically" despite a rise in demand, with shippers having to wait for weeks for availability.
"We witness an increase of vessels being taken out of circulation, which in our opinion contradicts the current increase in demand," said Jens Roemer, chairman of the FIATA Working Group Sea. "On some routes shipping lines only accept bookings for sailings as far away as in four weeks' time. Furthermore, it has been extremely difficult for the industry to deal with blank sailings."
Both organizations also question the application and justification of a 'Peak Season Surcharge' on existing contracts: "Surcharges by definition relate to sudden changes in variable costs incurred by carriers, such as bunker prices, port congestion and currency fluctuations. FIATA and CLECAT question whether such changes in the variable external costs have actually occurred in this situation."
Robert Keen, chairman of FIATA's Multimodal Transport Institute added it was time freight forwarders stopped accepting at face value what he called "opaque and unjustified surcharges".
"In the past, we have seen Administration Fees, Peak Season Surcharges, or ISPS-add on surcharges. Of late, we have had examples of container cleaning fees and container sealing fees, without any evidence of the expense actually being incurred," he claimed.
Carlos Hernández, co-founder of Miami-based online forwarder iContainers, also thinks the new shipping alliances will lead to a shortage of options for freight forwarders.
"Given the sharing of vessels and routes, this basically translates into multiple carriers having the exact same schedule. Instead of having seven or eight carriers offering a sailing of their own, we will perhaps only be getting three," he explained.
"Generally, this means having fewer alternatives when customers need to meet certain deadlines, which can be rather frustrating."
One capacity option for iContainers and its peers on trades between the Americas is a greater reliance on small niche carriers: "Some of them may hope to increase market shares or possibly even add to their service portfolios - depending on the services the big alliances are offering in the area," said Hernández.
Commenting on the impact of the new alliances on ocean trades he added: "Hopefully, this will shake things up a little and we can see a healthier industry again. One where good service forms an integral part of shipping lines' attraction and not just a component of an ocean freight quote."
Meanwhile the lack of capacity is causing a rise in airfreight demand according to IAG Cargo Commercial director David Shepherd: "This spike in demand comes at a time when constraints on sea freight capacity across Asia Pacific routes have been widely reported. While this boost is likely to deliver a short term positive impact, we believe our network makes us well placed to demonstrate the long term value air cargo can offer to forwarders."
IAG Cargo said its cargo volumes from Europe to Asia have risen 23 percent in the first two months of 2017 compared to the same period a year ago.
LONDON: February 27, 2017. New research suggests financial institutions supporting the global shipping industry have a US$400 billion exposure to future emissions regulations and need to develop a policy to protect their assets.
A report commissioned by the Carbon War Room, founded in 2009 by Richard Branson and other entrepreneurs to find ways to reduce CO2 emissions, lays out a first approach to climate stress-testing of shipping assets and proposes that action today by financiers, shipowners and shareholders can avoid losses by the mid-2020s.
"Risk is nothing new to the shipping industry or to the major financial institutions that bankroll it, but climate transition risk is," explained James Mitchell, Carbon War Room senior associate for shipping. "If a newbuild financing decision is made today, that vessel will very probably have to compete under new International Maritime Organisation or EU policy actions before its first drydock."
The 18-month study by UMAS, a commercial advisory service supported by the UCL Energy Institute and the management expertise of MATRANS, examined various investment scenarios for drybulk newbuilds between 60,000–99,999 deadweight tonnage to determine the level of exposure.
UMAS has concluded that while some financial stakeholders are aware of stranded asset risks, few banks are assessing ship efficiency or have lending programs in place to keep assets competitive, despite the level of debt.
"Future regulation on shipping GHG is now certain. It's just the velocity and stringency that remain unknown, and we can handle this by thinking in terms of scenarios," said Tristan Smith, director of UMAS.
"The key takeaway from the report is for financiers and shipowners to be prepared and thus it is crucial to future-proof assets now and plan for flexibility from the onset, through for example, designing for future retrofits and using innovative financing mechanisms to deal with a variety of future scenarios," he added.
BREMEN/HAMBURG: February 09, 2017. Multipurpose shipping line Zeaborn Group is to acquire the operating businesses of Rickmers-Linie and MCC Marine Consulting & Contracting from Rickmers Holding. The "single-digit million-euro range" deal is subject to anti-trust review.
While details of the purchase calculation are not disclosed, the sale involves the business and shipping line operation of Rickmers-Linie and the bunker purchasing and chartering business of MCC Marine Consulting & Contracting.
Zeaborn is to acquire also the rights to use the 'Rickmers-Linie' and 'Rickmers-Line' brand names in relation to the combined breakbulk, heavy lift and project cargo business of both companies.
The proposed transaction also covers the employees, assets, subsidiaries commercial contracts and branch offices of Rickmers-Linie plus NPC Projects, a company acquired in July last year.
"Just like us, Rickmers-Linie and NPC Projects are concentrating on the transport of break bulk, heavy lifts and project cargoes. They have an excellent reputation, have close, long-term customer relationships and stand for reliability, quality, innovation and technical competence," said Zeaborn managing partner Ove Meyer.
The sale has no impact on the workforce, shipping routes and Rickmers-Linie tonnage under long-term charter, said Rickmers Holding.
"With the growth of our fleet, we were faced with the challenge of building a global organization," explained Jan Hendrik Többe, Zeaborn managing partner. "Everyone who knows the shipping industry knows that this is a very challenging task in our time. In this respect, it's a fortune for our development that Rickmers-Linie was available at the right time, " he added.
Rickmers Holding said it would now focus on its Maritime Assets and Maritime Services business segments where it manages and coordinates vessels and shipping projects, organizes financing, and acquires, charters and sells ships on its own behalf and for third parties.
With the sale completion, Rickmers Holding chairman Bertram Rickmers will have a minority stake in Zeaborn Chartering via a privately held company.
MIAMI: February 03, 2017: Miami International Airport (MIA) saw its first ocean-to-air perishables transshipment this week as nearly 10 tons of peas from Guatemala, which arrived aboard a Crowley Maritime vessel at Port Everglades on January 30, was trucked to MIA for a flight to Amsterdam on Centurion Cargo.
Miami-based Customized Brokers, a subsidiary of Crowley, partnered with MIA to win approval last year from the U.S. Department of Agriculture and U.S. Customs and Border Protection (CBP) to expedite the processing of ocean-air transshipments via MIA.
The new service is expected to save shippers time and money as they avoid paying CBP duties on the perishable transshipments, according to an airport spokesman.
"The new program exemplifies Crowley's ability to grow trade of perishables from Central America to Florida ports thanks to our knowledge of shipping requirements, clearance protocols and efficient handling," said Nelly Yunta, Crowley vice president.
Crowley's brokerage subsidiary can now coordinate perishable shipments from Latin America via Port Everglades to MIA for onward distribution by air to markets in Europe, Asia and the Middle East.
"We greatly appreciate our cargo and federal agency partners for collaborating with us in this exciting new chapter of MIA's growth," said Miami-Dade Aviation Department (MDAD) director Emilio González. "We continue to explore innovative concepts like the ocean-to-air program, which have immense potential to generate new revenue and business ties around the world."
Pictured left to right: Kimberly Wakeman, vice president, Customized Brokers; Nelly Yunta, Vice president, Crowley; Edgar Baldizon, commercial director, Linea Vegetal Tecpan SA; Joseph Napoli, MDAD chief of staff; Patricia Millon, Centurion Cargo vice president, Perishable Goods & Imports; and Ernesto Rodriguez, MDAD Marketing Division chief.
ROTTERDAM: November 30, 2016. Carbon War Room (CWR), a climate mitigation accelerator founded by Richard Branson and a group of entrepreneurs, has launched a Web portal called 'BetterFleet' to compare peer-to-peer vessel operating efficiency.
Based on similar data and methods used by the International Maritime Organization (IMO), BetterFleet provides free-to-access information to support supply chain managers understand the comparative energy efficiency of different vessels and discover how to reduce emissions and costs.
CWR shipping operation manager Galen Hon says the portal identifies potential sources of ship inefficiencies, finds opportunities to optimize operations and reduce costs, and empower owners to talk with their charterers and shippers about how operations affect the bottom line, carbon emissions, and the environment.
Registered users can search by ship name or IMO number based on Automatic Identification System (AIS) data to provide an overall performance score of the ship over the previous 12 months compared with ships of similar type and size.
The portal already includes a large portion of the tanker, bulk carrier and container ship fleets, and CWR says more vessel types and sizes will be added over time.
Captain Kavil Madhu Nair, a vice president for Rickmers Ship Mangement in Singapore and who has tested BetterFleet commented: "Ships now operate in a world where effective decision-making is more vital than ever, affecting trading relationships, the environmental impact of transporting goods and the bottom lines of owner, operator and shipper alike. In this world, transparent and consistent information is becoming increasingly important, with access to operational efficiency data a key consideration for forward-looking organizations.
"We see real potential for BetterFleet to help owners, managers and shippers to re-shape the market," he added.
LONDON: January 30, 2017. Following the bankruptcy of Hanjin Shipping last August, the company has sold, scrapped or re-chartered a third of its 98-vessel fleet for US$460 million according to Drewry Maritime Research.
Drewry estimates some 63 ex-Hanjin ships with nearly 460,000 TEU-capacity remain parked awaiting buyers or charterers. They include Hanjin Europe, one of the three 13,092 TEU units sold in December. Another six similar-sized vessels are to be auctioned next month.
Maersk Line has chartered 11 ex-Hanjin vessels totaling 77,000 TEU, including two 13,000 TEU ships that were sold in December and now redeployed as Maersk Emerald and Maersk Ensenada in the 2M Alliance Asia-Europe network.
Drewry said it expects another eight or nine vessels to be in commercial use again soon, including four Hanjin-owned units with a capacity of 4,275 TEU purchased by the Korean Marine Transport Company, and five more vessels acquired by the Korean Samra Midas Group each with a 6,655 TEU capacity.
In addition Seaspan Corporation has acquired four Hanjin vessels each with a capacity of 4,275 TEU (see chart right).
"Accounting for the less than transparent ownership details, we estimate that there remains up to as much as 150,000 TEU of Hanjin-owned ships that is still for sale," said Drewry.
"With such a glut of containerships already available and limited demand growth, it is debatable just how big a market they can attract even at knock-down prices. The biggest and youngest ships are likely to have the biggest pull," it noted.
HAMBURG: November 15, 2016. Hapag-Lloyd reported a loss of €133.9 million for the first nine months of 2016 on revenue of €5.74 billion. For the same period last year, the company made a profit of €160.4 million on revenue of €6.8 billion.
Net profit for its third quarter ending September 30 rose to €8.2 million from €3.2 million year-on-year, despite a drop in revenue from €2.1 billion to €1.9 billion in the period.
"The market has been very difficult so far this year, but in that environment Hapag-Lloyd has performed relatively well," said Hapag-Lloyd CEO Rolf Habben Jansen. "The overall results so far this year remain unsatisfactory, but the net profit in Q3 indicates that we are on the right track and that our efforts to further reduce costs and to leverage economies of scale are paying off."
Jansen said the company's main focus in the near-term would be to further reduce costs, ensure a smooth implementation of 'THE Alliance', and complete its transaction with the United Arab Shipping Company in a bid to "further solidify our position in this consolidating industry".
In the first nine months of 2016 the ocean carrier said its average freight rate per TEU fell 17.7 percent to US$1,037 due to market overcapacity and "modest demand". As a result, despite a 1.3 percent increase in the number of boxes carried to 5.65 million, revenue fell €1.1 billion compared to the same period in 2015.
HAMBURG: January 04, 2017. Hansa Heavy Lift (HHL) has become the first carrier to relocate two 820-ton ship-to-shore cranes via the Northern Sea Route (NSR) from St Petersburg to the port of Vostochny, in Russia's Far East.
HHL Valparaiso, also the first vessel to sail 'open hatch' through the NSR, had to reposition from Qingdao, China to St Petersburg via the passage to load the cranes, and then return the same way to complete the transit in record time.
ZAO 'SMM', a leading Russian manufacturer of heavy port handling equipment, managed the project that enabled the two cranes, measuring 61 metres high and 92 metres wide, to be shipped partially above and below the Valparaiso's deck.
HHL said the NSR has a limited window of about two months for cargo traffic. As a result the company had only a few weeks to collect and then deliver the cranes before the route completely froze over.
According to marine forecaster Weathernews, based in Chiba, Japan, while ice in the Artic sea continues to decline overall due to climate change, the Russian NSR was only open to traffic for around two weeks from September 24 to October 7, 2016, the shortest traversable period in recent years.
The agency said the reason was ice in the Laptev Sea that shortened the period in which ships could traverse the NSR without entering ice-affected areas. The Valparaiso holds Ice Class E3 equivalent to Russian Arc.4 (Finnish- Swedish Ice Class 1A), enabling it to navigate successfully ice up to 0.8 meters thick.
"In the Arctic there is no room for mistakes. During the passage, the vessel has limited connection and only a few points of shelter," said HHL Commercial manager Gleb Faldin, who added: "The Northern Sea Route was the only viable option to complete this voyage in the required timeframe."
Heinrich Nagrelli, HHL Project & Transport engineer noted: "The Northern Sea Route is an important alternative that can save weeks from a voyage, but to be successful you need careful planning and engineering, the right equipment, capable vessels, and experienced crews."
HAMBURG: November 08, 2016. Member of the box carrier 'THE Alliance' - Hapag- Lloyd, 'K'Line, Mitsui O.S.K. Lines, NYK and Yang Ming – have announced they will provide 31 liner services to 75 ports with 240 vessels from April 2017.
The network will include 24 ports in Asia, 20 in the U.S. and Canada, six in Northern Europe, 13 in the Mediterranean, six in the Middle East and six in Central America/Caribbean.
In a joint statement, the box carriers said: "The product of THE Alliance is a milestone which will significantly improve the service offering for all shippers on the East West trade lanes."
On November 03 the Ocean Alliance of CMA CGM, COSCO Container Lines, Evergreen Line and Orient Overseas Container Line said the launch of their operating agreement also in April 2017 will support 40 services linking 100 ports on East-West trades, with a combined capacity of 3.5 million TEUs.
The Ocean Alliance announcement followed a decision by 'K'-Line, Mitsui O.S.K. Lines, and NYK to form a joint venture to integrate their container shipping businesses. The aim is to save Yen110 billion annually and leverage their combined capacity of 1.4 million TEUs.
Last month 'K'-Line's car-carrying division, not part of the box venture nor the Alliance, formed a partnership with Vietnamese logistics provider Gemadept Corporation.
From a 20,000 sq. mt. facility near the Saignon Premier Container Terminal (right), the two companies are already providing car-storage, vehicle registration and Customs clearance for importers of cars, trucks and construction equipment. From January next year they will add pre-delivery inspection, parts installation, canopies, painting, repair and vehicle washing for importers.
COPENHAGEN/BIELEFELD, Germany: December 01, 2016. Maersk Line has agreed to purchase shipping line Hamburg Süd from the family-owned Oetker Group for a reported US$ billion.
Both companies said the acquisition is subject to final agreement and regulatory approvals, and if successful is expected to close at the end of 2017.
The Oetker Group, with additional interests in food, beverages and banking, says it derives nearly 50 percent of its annual €12 billion revenue from shipping.
The company said the decision to sell Hamburg Süd and its Brazilian subsidiary Alianca is prompted by the rapid consolidation of the ocean container business and a subsequent level of investment that would "make the balancing of risk within the Oetker Group business portfolio more cumbersome".
With a carrying volume of around 4.1 million TEU and a slot capacity of approximately 625,000, Hamburg Süd ranks among the world's 10 largest container shipping companies. The tramp, product tanker and other operations make up some seven percent of turnover that totaled €6.1 billion in 2015.
"Giving up our engagement in shipping after an 80 year-long ownership in Hamburg Süd was not an easy decision for my family," said Dr. August Oetker, chairman of the Advisory Board of Dr. August Oetker KG, the management holding company of the Oetker Group.
"We are very confident, though, to have chosen the best of all possible partners. Maersk will preserve and grow Hamburg Süd and what the brand and the whole organization and a highly dedicated workforce stand for: reliable and high quality logistical services to our customers," he added.
Maersk Group CEO Søren Skou commented: "The acquisition of Hamburg Süd is in line with our growth strategy and will increase the volumes of both Maersk Line and APM Terminals." In September, Maersk said it would grow market share organically and through acquisitions.
During the due diligence and regulatory approval period, Hamburg Süd and Aliança will continue as separate brands said Maersk. "We wish to maintain the personal touch and engagement they offer their customers. In short, Hamburg Süd and Aliança customers will also be Hamburg Süd and Aliança customers in the future," Skou declared.
MARSEILLE: November 03, 2016. The Ocean Alliance of CMA CGM, COSCO Container Lines, Evergreen Line and Orient Overseas Container Line say the launch of their operating agreement in April 2017 will support 40 services linking 100 ports on East-West trades, with a combined capacity of 3.5 million TEUs.
CMA CGM will deploy a fleet of 119 vessels with a 35 percent capacity share overall. On the Transpacific this translates into 145 weekly calls and 52 ports; Between Asia and Northern Europe, 79 calls and 31 ports; and on the Transatlantic, 34 weekly calls and 21 ports.
Acknowledging approvals from the U.S. Federal Maritime Commission and Korea's Ministry of Oceans and Fisheries, CMA CGM vice chairman Rodolphe Saadé said: "This new offering is a cornerstone of our strategy as it reinforces our competitiveness and strengthens our position as a key player in the shipping industry."
The Ocean Alliance announcement (right) follows a decision by 'K'-Line, Mitsui O.S.K. Lines, and NYK to form a joint venture to integrate their container shipping and terminal businesses – with the latter excluding Japan.
In a statement the three ocean carriers said the new enterprise is designed save Yen110 billion annually while leveraging their combined capacity of 1.4 million TEUs for a current global market share of 7.0 percent.
The joint venture, which is subject to regulatory approval, is expected to be established by July 2017 and operational in August 2018. Shareholdings will be split 31 percent for K-Line and Mitsui OSK Lines while NYK will hold 38 percent.
