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Articles from 2016 In October


Live From SMME 2016

Shanghai MFE Center’s double first

Shanghai MFE Center’s double first

Its newly constructed HQ building in Pudong’s Expo B area - where it will house a cluster of Chinese and overseas maritime companies - was officially inaugurated in mid-September, coinciding with the first ever Shanghai International Shipping Week organised by Ben Zhang, its chairman.

Guest of Honour at the MFE Center opening was Lord Mountevans, Lord Mayor of the City of London and chairman of UK professional services body Maritime London, while Baltic Exchange ceo Jeremy Penn was also in attendance.

The MFE Centre concept is based on close ties with the UK capital because of the latter’s wealth of shipping services expertise. Indeed, the new building contains a shared lounge area which is modelled on one of London’s 17th century Coffee Houses that gave birth to the modern Lloyd’s marine insurance and Baltic shipbroking markets.

The idea is proving a great success, with the 23-floor building fast filling up, explains MFE Center CEO Jackie Woo, who is attending SMME along with client service manager Rocky Chen. Some 15 to 20 Chinese shipping companies and establishment have already signed up, he says, as well as international clients comprising the likes of the Baltic Exchange, Braemar ACM, Graig Shipping and the Institute of Chartered Shipbrokers

In all some 28 corporate office blocks have been built on Expo Area B, he adds, making it Shanghai’s latest industrial zone with a pronounced maritime and transport theme.

Live From SMME 2016

Suez Canal Authority doing everything right to transform Egypt’s ailing economy: Drewry

Suez Canal Authority doing everything right to transform Egypt’s ailing economy: Drewry

That is the forecast from Tim Power, managing director of shipping consultancy Drewry, who told an audience at Seatrade Maritime Middle East (SMME) on Monday that the now dual carriage waterway had the potential to become the epicentre of a new “Dubai” scale maritime hub.



Power was part of panel, headlined by Suez Canal Authority chairman and managing director Admiral Mohab Mameesh, which outlined progress a year on from the $8bn expansion of the Canal and explored New Silk Road (One Belt One Road OBOR) opportunities and potential private investment opportunities in the ports and new industrial zones earmarked along the waterway.

The Suez Canal has been the lifeblood of the Egyptian economy for more than 150 years and the potential of the new industrial and logistics zones, combined with Egypt’s untapped oil and gas wealth, are immense, Power said.



“Lets us imagine a situation where Egypt has very competitive energy costs, a large pool of relatively competitively priced labour and an environment where it is able to attract foreign direct investment to set up all the kind of industries that we see [outlined today],” Power said.



“I want to draw a parallel between that general idea and what we see today in Dubai. Why is Jebel Ali the must call port in the Arabian Gulf? It’s because the free zone and all the cargo that moves in and out of that free zone, it’s the kind of black hole that makes every container shipping line want to come.

“So if you combine the connectively of the [Suez] Canal with the kind of industrial development, cost competitiveness that perhaps, if we are lucky, this Canal Zone can create, then you could see the Egyptian economy transformed. You have a huge consumer market, a very short distance from Europe in the Mediterranean…it must be an enormous prize and the Canal’s relevance to that is also enormous.”



Admiral Mameesh told the conference “you will hear of a new payment system in the Suez Canal to attract the ships” as the SCA continued to respond to market forces.

Live From SMME 2016

Economic Forum in Dubai finds reasons to be cheerful

Economic Forum in Dubai finds reasons to be cheerful

The oil price has recovered from $30 per barrel to $50, China’s economy has stabilised, and the US is in a stronger position than in Q1, Fox said. Also, the economy of India - the UAE’s main trading partner (ahead of China) - is showing 7% growth and appears ‘resilient’, he added.

However, fellow speaker Tim Power, md of maritime consultancy Drewry, painted a less upbeat picture, especially for the liner trades. CAGR (compound annual growth rate) in world container traffic for the period 1980-2007 was 10%, he said, while after the 2008 crisis it halved to 5%, and was now “2% or less”.

“The container industry in the past could always grow its way out of trouble” in terms of boxship oversupply, he added, but now “those days are gone.

Power therefore welcomed this week’s announcement by Japan’s NYK, MOL and K Line to consolidate their liner interests, calling i potentially a “key moment” in attempts to rebalance supply and demand in the liner sector.    

Rickmers Maritime restructuring approval from unitholders, but difficult bondholder vote yet to come

Rickmers Maritime restructuring approval from unitholders, but difficult bondholder vote yet to come

Unitholders voted 98.67% in favour of proposal that will see the listed-shipping trust issue over 1.3bn units despite the significant dilution they would suffer with it representing 150% of the outstanding units in the trsurt. The issue of the new units forms part of a proposal to SGD100m noteolders there would a partial redemption of SGD60m of the issue by way of an equity swap for 60% of units in the enlarged trust. While the maturity date of the remaining SGD40m in bonds will be moved to November 2023 from May next year.

While unitholders have approved the issue, getting the approval of bondholders remains a more difficult issue with a group demanding immediate repayment.

Rickmers Maritime will be holding a dialogue session with bondholders on Wednesday evening along with the Securities Investors Association Singapore (SIAS). The meeting comes ahead of a vote on the restructuring proposal by bondholders on 9 November.

Rickmers Maritime says the trust will be wound-up if investors do not approve the restructuring. Unitholders voted 90.09% in favour of a resolution to wind-up the trust if the restructuring is not approved. The trust warns investors that both unitholders and bondholders would receive nothing in a liquidation scenario.

Incheon port sees 12% rise in Q3 container volumes

Incheon port sees 12% rise in Q3 container volumes

The majority of container trade was contributed by China, which accounted for 392,951 teu for the July-September 2016 period, increasing by 8.3% compared to the previous corresponding period, while Vietnam accounted for 64,932 teu, up 33.3%.

“Such shipment increases are likely to be a result of the volume rising due to the effect of the Korea-China FTA and Korea-Vietnam FTA that took effect last year,” IPA stated.

“In particular, the container shipment to Iran is continuously increasing from 1,354 teu in July, 2,297 teu in August and 2,414 teu in September due to a regular container service connecting Incheon port to the Middle East, which was launched in June,” it added.

Elsewhere, shipment related to Europe dropped 28% year-on-year to 7,933 teu during the third quarter due to the rapid decrease in timber imports from Romania.

From January to September this year, Incheon port moved a total throughput of 1.91m teu.

EMAS Offshore hit by full year loss on continued industry downturn

EMAS Offshore hit by full year loss on continued industry downturn

The loss compared to the profit of $199.54m for the previous financial year.

For the full year, the group recorded revenue of $167.58m, down 32% year-on-year, due mainly to continual weakness in the offshore industry leading to markedly lower demand as well as general oversupply in the OSV segment.

“The market continues to paint an extremely challenging landscape for the group. Amidst this, one bright spot for the group is that we are starting to see signs of stabilisation in utilisation rates though daily charter rates are expected to remain depressed for a considerable period of time,” commented Adarash Kumar, ceo of EMAS Offshore.

“Looking ahead, we believe that FY2017 will continue to be an extremely challenging period for the group,” Kumar said.

For the group’s geographical expansion, West Africa continues to be a strategic market, he added. “In anticipation of new business engagements, we intend to deploy more vessels in West Africa and also increase our presence in India,” he said.

Live From SMME 2016

7,000 visitors expected at Seatrade Maritime Middle East

7,000 visitors expected at Seatrade Maritime Middle East

Held under the patronage of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, UAE, and part of Dubai Maritime Week, the three-day exhibition and conference, now in its eighth edition, returns to the Dubai International Conference & Exhibition Centre to welcome the region’s largest gathering of shipping and maritime industry decision makers with almost 7,000 participants from 69 countries expected to attend.

“In the two years since our last event, global trade movement has faced increasingly challenging economic pressures, and the international maritime industry continues to be impacted by future oil price forecasts, the state of the Middle East economy in general and the effect of the Chinese trade slowdown - the timing of this year’s event couldn't be more pertinent,” said Emma Howell, group marketing manager, Seatrade.

This year’s interactive conference programme will once again bring together a panel of maritime industry leaders, influential economists and shipping analysts for an in-depth analysis of where the current industry status quo, and will also examine regional industry opportunities, along with a series of presentations and ground-breaking case studies on key maritime projects, including Egypt’s Suez Canal expansion, and schedule of educational technical forums.

The opening economic forum session on the first morning will be chaired by

well-known moderator and broadcast journalist, Eithne Treanor, and features a high profile panel line-up that will set the scene for three days of successful conference discussion. Panelists include Abdulrahman Essa Al-Mannai, president & ceo, Milaha; Marcus Machin, ceo, Tufton Oceanic Finance Group; Admiral Mohab Mohamed Mameesh, chairman & md, Suez Canal Authority; Tim Power, md, Drewry and Tim Fox, head of research and chief economist at Emirates NBD.

Day two of the event (Tuesday 1 November) presents an action-packed schedule, opening with the Seatrade Tanker conference at which a number of the industry’s most respected experts led by Katharina Stanzel, md, Intertanko, will engage in a Middle East-focused discussion on the crude oil tanker market and product tanker trading.

The half-day session will cover supply growth patterns, demand influencers and a prognosis of potential future earnings, taking into consideration factors such as trade and ton-mile configurations and order book volume; as well as an analysis of the factors influencing and driving product tanker demand.

A brace of technical forums will dominate the early afternoon with sessions examining the critical issues facing an ever-changing seascape in terms of shipping and environmental challenges shipping and environmental challenges, followed by a lively discussion on Crewing: The vital interface, both held in association with IMarEST.

Moderated by Nikeel Idnani, Honorary Secretary, Institute of Marine Engineering, Science & Technology (IMarEST) UAE Branch, the panel features a respected group of panelists including Stephen Bligh, senior principal Consultant, head of section, maritime advisory, Region South East Europe & Middle East, DNV GL and Lee Chee Seong, vp– network operations, United Arab Shipping Company (UASC).

With demand for technically proficient crew still exceeding supply, the panel will debate the full gamut of contributory factors such as the role of human behaviour in safety at sea and the impact of unmanned ships, the tricky topics of contract ‘sweeteners’ and the possibility of increased funding for industry relevant university and diploma courses.

Another highlight of the three-day event, is hosting the 61st annual International

Ship suppliers & Services Association (ISSA) Convention. Taking place on 31 October and 1 November, the association has partnered with the UAE National Ship Suppliers Association (UNSSA) to deliver a one-of-a-kind event for maritime industry professionals at which they can connect with leading ship owners, managers and suppliers, learn the latest market trends and innovative solutions, and explore new business opportunities.

MOL and K Line's container shipping business in the red for H1 ahead of merger

MOL and K Line's container shipping business in the red for H1 ahead of merger

Ahead of a merger of the container lines businesses of Japan’s “big three” NYK, K Line and MOL, the latter reported a JPY21.3bn ($203m) loss for its container shipping business in the first half ended 30 September compared to JPY9.1bn loss a year earlier. MOL saw its revenues from container shipping slump 25% year-on-year to JPY292.6bn.

MOL said that one-year contract rates there was a “considerable decline” in rate levels especially on the transpacific, while the positive impact on rates from the bankruptcy of Hanjin Shipping only a “slight” impact on its results.

“Under this business environment the ordinary loss in the containerships segment deepened year on year despite efforts not only to reduce vessel costs through the business structural reforms, and improve capacity utilization rates through stronger sales capabilities, but also to cut operation costs by reducing the expenses of positioning empty containers through improved yield management,” MOL said.

Meanwhile K Line reported JPY21bn loss on its container shipping operations in the first half compared to JPY3.1bn. Revenues saw a 26.9% fall year-on-year JPY246.9bn for the first half the final year ended 31 March 2017.

“With the continued completions of ultra large container vessels, the global balance of the tonnage supply and demand has deteriorated, and the freight-rate market has declined year on year and underperformed initial expectations,” K Line said.

MOL, K Line and NYK announced on Monday that they would be establishing joint venture on 1 July 2017 to merge their container line businesses.

CSCL reports nine-month deficit despite profitable Q3

CSCL reports nine-month deficit despite profitable Q3

For the January-September 2016 period, CSCL saw its net loss widened to RMB634.92m ($93.8m) compared to the deficit of RMB255.4m in the same period of 2015.

The loss came despite the shipping firm posting a third quarter profit of RMB205.93m, as against the loss of RMB1.09bn in the year-ago period.

Revenue for the third quarter plunged by 61.6% year-on-year to RMB3.48bn due to the sluggish container shipping market.

Following the merger of China Shipping Group, parent of CSCL, and China Cosco Group to form China Cosco Shipping Corporation (Cosco Shipping), CSCL had gone through a business restructuring, moving away from its core container shipping business,

The company had its business focus shifted from container liner operation to integrated financial services consisting of diversified leasing businesses such as vessel leasing, container leasing and non-shipping finance leasing.

CSCL will also be renamed Cosco Shipping Development Co to reflect its new businesses, but the new name is not yet reflected in its latest third quarter financial results report.

Panama and EC to sign maritime co-operation accord

Panama and EC to sign maritime co-operation accord

"Panama is grateful for the continued support given by the European Commission, which has made possible the successful implementation of various systems, including those based on International Data Exchange to re-inforce the safety of passenger vessels.” “[Those systems] giving immediate access to relevant information in emergencies facilitate and improve co-ordination in search and rescue operations," said Barakat.

Panama has strengthened its ties with the member countries of the EU, with regards to the protection of the environment because it is important to send an appropriate message to the international maritime industry on the needs for further progress on a unified proposal for reducing harmful emissions, added Barakat.

Panama actively participates in discussions carried out by the IMO to contribute to the Paris Agreement, milestone reached in the Framework Convention of the United Nations on Climate Change (UNFCCC) in December last year, taking responsibility to appropriate from the maritime transport sector towards the conservation of our marine environment actions.

“We discussed with Commissioner Violeta Bulc about drafting a Maritime Co-operation Agreement with the European Union to present co-ordinated proposals for the benefit of the international maritime sector and thus continue the continuous bilateral dialogue between Panama and the EU,” explained Barakat.

Commissioner Bulc presented a new single-window-technology platform which would integrate actively all the member countries of the EU, a project that was praised by Panama. "We emphasise the leadership of this international organisation and told Commissioner Bulc of our interest to include this item in the Maritime Co-operation Agreement to subscribe that will integrate the Panamanian ports with the European ports,” said Barakat.