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Articles from 2016 In June

Mandatory container weighing comes into force on 1 July

Mandatory container weighing comes into force on 1 July

IMO points out that the the amendments to SOLAS regulation VI/2 will assist in ensuring that the 170m containers carried on ships each year are optimally stowed, thereby helping to prevent container stacks collapsing and containers being lost overboard, and the associated injury and loss of life.

Overweight containers have been seen as the cause of a number of casualties including the MSC Napoli.

Two methods can be used to assess the VGM of packed containers, either weighing the packed container using calibrated and certified equipment [‘Method 1’] or weighing all constituent parts in the load, including pallets, dunnage and other securing materials, and adding all these together [‘Method 2’]

IMO adds that it is the shipper’s responsibility to ensure that the VGM of each packed container is stated in the shipping document, a signed copy of which must then be submitted to the ship’s master or his representative, and to the terminal representative, in good time for the ship stowage plan to be drawn up. “If not, the container shall not be loaded onto the ship,” it states.

Cargo insurance specialist TT Club has said that “clarity” is above all what is required in tacking the new requirements. It notes that a number of container terminals around the world have now announced arrangements to assist shippers with Method 1, while for Method 2 shipping lines are posting the tare weights of their containers online to assist with the calculation.

Furthermore BIC (the Bureau International des Containers et du Transport Intermodal ) last month launched a ‘Technical Characteristics Database’to provide shippers with further information.

Deep Sea Supply see light with BP Egypt contract win

Deep Sea Supply see light with BP Egypt contract win

The PSV Sea Swift has been awarded a two years firm plus 12-month option contract, while the PSVs Sea Spear and Sea Spark have been awarded one year firm plus 12-month option contracts. All three vessels are expected to commence operations in Egyptian waters in Q3 of this year.  

The contracts are a heartening development for Deep Sea Supply (DESS) amid uncertain times for the global offshore marine sector.

The company sold two AHTS vessels - Sea Lynx and Sea Bear - in February for a book loss of $17m and has laid-up a total of 16 vessels from its 37-strong fleet - 11 PSVs and five AHTS vessels – in the first five months of 2016.

Taking into account the sale of the two AHTS vessels, Deep Sea Supply reported a Q1 2016 loss of $25.5m. This follows a net 2015 loss after tax of $151.5m.

Times have been so challenging Deep Sea Supply recently announced it has diversified, with Seatrade Maritime News reporting it's  foray into the aquaculture industry in a joint venture with Marine Harvest earlier this month.

Deep Sea Supply, which boasts a global operation with particular focus on Brazil, the North Sea, South East Asia and Africa, forecast further fiscal headwinds in its Q1 Financial report, saying it did not expect to see an “improvement of the difficult market situation for OSVs in the short to medium term.”  

“As a consequence of the weak market, Deep Sea Supply will continue to lay up vessels that do not have any fixed activity [in] the next months. In addition to laying up vessels to reduce cost, the company is working hard to further reduce operating expenses for the vessels in operation,” the company said.

“During the first quarter of 2016 the oil price has increased somewhat, but still there are no signs of improvement of the fundamentals of the global OSV markets.

“In Brazil, the situation remains challenging, and the company now has only nine vessels left in Brazil. The North Sea spot market is challenging with unsustainable rate levels and low utilisation for PSVs. Following the sale of two AHTS vessels in February 2016, the company only has one vessel (PSV) in the North Sea spot market.

“The contract coverage for 2016 for the company is not satisfactory. DESS (Deep Sea Supply) is currently in advanced contract negotiations for some term opportunities, however the competition is fierce and rate levels are low. “

Sea Swift is owned by Deep Sea Supply through one of its 100% owned subsidiaries, while Sea Spark and Sea Spear are owned 50% by Deep Sea Supply through the joint venture DESS BTG.

North of England port operators unite to push inland infrastructure development

North of England port operators unite to push inland infrastructure development

PD Ports, Port of Tyne, Peel Ports and ABP Ports have brokered a pact to pursue a Northern Ports Strategy with improvements in the east – west rail corridor an ultimate priority.

“These are going to be changing economic times for the whole of the UK therefore it’s important that the north and northern ports are seen as a progressive body to drive through that change,” said Geoff Lippitt, PD Ports’ development director.

A new report by independent think-tank IPPR North entitled “Gateways to the Northern Powerhouse: Towards a Northern ports strategy” made 15 recommendations including establishing a Northern Ports, Freight and Logistics Association to drive strategic co-operation within the sector and to create a Northern Maritime Knowledge Hub.

Backing the report Peel Ports ceo, Mark Whitworth said: “The northern ports sit at the heart of some of the most dynamic national growth clusters.” He noted the development of Peel Ports GBP300m ($404.4m) Liverpool2 terminal – the UK’s largest transatlantic container port – at time where future trading arrangements with the EU are unclear following the Brexit vote.

 “However, even if there is greater collaboration within the industry, competitiveness is still hindered by a lack of investment in east–west freight and logistics capacity. Urgent investment must be made in trans-Pennine road and rail links to open up the east–west freight corridor. Government also has to adopt a consistent and long-term energy policy and promote a move from road to rail and coastal freight traffic.”

The report from IPPR North highlighted 60% of freight destined for the north is delivered to southern ports resulting in unnecessary motorway traffic, delays, pollution and inefficiency.

"Britain was a trading nation long before the European Union was ever thought of, and that fact will not change despite the Brexit vote,” said Ed Cox director of IPPR North.

“With over GBP1bn invested in the ports themselves, government must now put in its GBP100m to create an East-West Freight Supercorridor and end the costly and inefficient movement of lorries up and down the country.”

Agthia Group expand Abu Dhabi Ports footprint

Agthia Group expand Abu Dhabi Ports footprint

The contract incorporates an additional 85,700 sq m plot of land which will include dedicated bulk grain silos, logistics warehousing and onsite bagging facilities when fully developed.

It will expand Agthia Group’s existing “Grand Mills Flour and Animal Feed” facilities at Zayed Port, the emirate’s oldest terminal in the city centre.

The new agreement was signed by Captain Mohamed Juma Al Shamisi and Iqbal Hamzah, the ceo’s of Abu Dhabi Ports and Agthia Group respectively.

Al Shamisi said Abu Dhabi Ports were committed to partnerships and investing in the equipment available at Zayed Port given the positive impact it had on Abu Dhabi’s economy.

“This agreement is an important addition to our list of partnerships that will contribute towards driving the investment, growth and development of the trade and maritime sectors,” Al Shamisi said.

“This expansion undertaken by Grand Mills, a subsidiary of Agthia, is an important economic boost that will support the growth and progress of the food and beverage sector [and] cater to the needs of the local consumers.”

Established as Flour Mills and Animal Feed Company in 1978 by the late HH Sheikh Zayed bin Sultan Al Nahyan, Grand Mills describes itself as one of the few true heritage companies of the UAE. As a subsidiary of Agthia Group since 2004, Grand Mills manufactures and supplies its flour and animal feed products across the UAE, to other Gulf Cooperation Council (GCC) members, Turkey and the wider Middle East.

“Our current production capacity utilisation rate at Grand Mills is at around 90% levels. When combined with our business growth projections, this necessitates an expansion in both our milling and storage capacity beyond 2017,” Hamzah said.

“In this regard, Agthia has already started undergoing the construction of an additional 50,000 ton capacity grain silo on Abu Dhabi Ports’ existing plot. This agreement will secure supplementary land essential for future expansion right adjacent to Agthia’s current facilities.”

Star Bulk remains firmly in the red in Q1

Star Bulk remains firmly in the red in Q1

Star Bulk reported a first quarter net loss of $48.79m compared to a loss of $40.18m in the same period in 2015. Losses in Q1 2016 were outstripped revenues of $46.3m for the first three months of the year. In Q1 2015 Star Bulk reported revenues of $45.5m.

The steep losses coincided with a period where the dry bulk shipping markets fell to the lowest levels on record.

“The first quarter of 2016 was the worst of the last 30 years, as freight rates remained below operating costs and vessel values reached new lows across all dry bulk vessel classes,” Petros Pappas ceo of Star Bulk commented.

With the dry market not expected to recover substantially until the second half of 2017 according to analysts Star Bulk is looking to ensure it has enough cash to sustain operations over the coming years.

“In the last few months we have entered into negotiations with our banks, with which we have long standing relationships, to defer principal payments and waive or substantially relax financial covenants, so as to preserve liquidity well into 2019,” Pappas said.

While negotiations are fianlised Star Bulk has standstill agreements covering debt principal repayments as well as certain covenants with its lenders until 31 August this year.

Star Bulk had a fleet of 70 dry bulk vessels on the water as of 29 June and five newbuildings on order for delivery in 2017 and 2018.

Singapore’s MPA enhances and extends maritime green initiatives

Singapore’s MPA enhances and extends maritime green initiatives

Launched in 2011, the MSGI encompasses various schemes such as Green Ship Programme (GSP), Green Port Programme (GPP), and Green Technology Programme (GTP).

Two new programmes – The Green Awareness Programme (GAP) and The Green Energy Programme (GEP) – have been introduced under the MSGI to further enhance the intiative, the MPA announced on Thursday.

The GAP focuses on creating awareness on possible avenues towards sustainable shipping. The GEP aims to promote adoption of alternate or cleaner marine fuels as well as wider adoption of energy efficient operational measures, in anticipation of developments on the global sulphur emissions cap.

“The extension of the MSGI Programme is a strong demonstration of our commitment towards an environmentally friendly and sustainable global hub port,” said Andrew Tan, chief executive of MPA.

In addition, MPA said that from 1 July this year, the GSP incentives will be extended to ships using LNG as part of Singapore’s long term efforts to encourage LNG as a sustainable alternative fuel source.

MPA updated that the GSP has seen more than 50% of qualifying ships exceeded the current Energy Efficiency Design Index (EEDI) frame required by IMO.

Furthermore, the sulphur oxides limit under the GPP will be reduced further to 0.5% for ships calling at Singapore port to enjoy a flat rate of 25% concession in port dues for the use of low sulphur fuel during their entire port stay. Similar concession is also extended to ships using LNG.

The GPP has led to more than 3,700 vessel calls switching to marine fuel with sulphur content not exceeding 1%.

The GTP also saw more than 20 projects involving over 60 vessels. The encouraging results have prompted MPA to extend the MSGI to 31 December 2019.

“We hope that the enhancement to the MSGI will incentivise the maritime industry to continue with their efforts to provide safe, efficient and sustainable shipping, notwithstanding the challenging economic environment,” Tan commented.

UK maritime and business bodies call for calm after Brexit vote

UK maritime and business bodies call for calm after Brexit vote

Seafarers’ union Nautilus International called for “calm” among British shipowners and warned against any “rash statements or pre-emptive measures.” This followed reports that Sweden’s Stena Line, which operates some ferries on the Irish Sea, is considering the possibility of re-registering its UK-flagged vessels.

Nautilus general secretary Mark Dickinson has written to the UK Chamber of Shipping asking it to “provide a clear message on behalf of British shipowners that the UK maritime industry remains open for business – with a continued commitment to… growing the national flag and regenerating the pool of British seafarers.”

Meanwhile, recently elected Mayor of London Sadiq Khan yesterday appointed a deputy mayor for business tasked with safeguarding the interests of financial district the City, successful businessman Rajesh Agrawal.

Before the referendum, the Lord Mayor of the City of London, Lord Mountevans, had told Seatrade Maritime News: “if the UK were to vote to leave, the City would still be a strong financial centre with a new set of challenges that we would address.”

Mountevans is himself a shipbroker (with Clarksons) and chairman of UK professional maritime services promotional body Maritime London, which yesterday put out a statement saying, “the immediate priority is to consult with stakeholders and then work with government to ensure they are briefed as to the requirements of industry in readiness for their future discussions with the EU”.

“The UK maritime industry and Maritime London remain committed to maintaining the UK at the forefront of the global maritime sector,” the statement concluded. “The expertise, experience and ethos of trust remain, and will continue for the future."

Malaysia’s Sapangar Bay Port terminal expansion gets more funds

Malaysia’s Sapangar Bay Port terminal expansion gets more funds

Sabah government investment vehicle Suria Capital Holdings, which operates  Sabah’s main container port through unit Sabah Ports said in a stock marker announcement that the Federal Government had approved an additional sum of MYR333.5m for the expansion programme following the recommendation of the Value Management Lab for Sabah Development Corridor project.

The additional funding is to cover the cost of the expansion, it said.

Sabah Ports, it added, would be responsible for procuring the cargo handling equipment and the additional yard to achieve the 1.25m teu capacity.

Under the 11th Malaysia Plan, MYR800m had been originally allocated for the port expansion, with funding under the first rolling plan was to be staggered over two years (2016-2017).

Construction work for the first stage of the development is expected to start early next year, with completion expected by 2019.

UASC shareholders back merger with Hapag-Lloyd

UASC shareholders back merger with Hapag-Lloyd

The Middle East based container shipping line said,"...all six of UASC's shareholding states voted unanimously to approve the proposed merger with Hapag-Lloyd AG (Hapag-Lloyd) with a relative valuation of the two businesses at 72% for Hapag-Lloyd's shareholders and 28% for UASC's shareholders."

UASC is majority owned by the state of Qatar which increased its stake in the container line to 51.3% in 2014, while the UAE, Saudi Arabia, Bahrain, Iraq and Kuwait are all shareholders in the line.

"Several legal and administrative tasks need to be completed before the binding agreement can be formally signed," UASC added.

The merger has already been approved by Hapag-Lloyd’s supervisory board earlier this week, but still requires the approval of its major shareholders.

According to analysts Alphaliner a combined Hapag-Lloyd and UASC would the world’s fifth largest container line behind the recently merged Cosco China Shipping with a 1.47m teu capacity fleet. It sees Hapag-Lloyd jumping Evergreen Marine in capacity terms.

It is Hapag-Lloyd’s second merger in recent years with it having merged with the container shipping activities of Chilean line CSAV in December 2014.

The move by Hapag-Lloyd and UASC to combine comes at a time of continued consolidation in the container shipping with CMA CGM passing the 91.05% holding mark in Neptune Orient Lines (NOL) this week guaranteeing it 100% control of the Singapore-headquartered line.

Malaysia’s PTP earmarks $2.1bn for new berths and equipment

Malaysia’s PTP earmarks $2.1bn for new berths and equipment

Che Khalib Bin Mohamad Noh, chairman of PTP, said: “The immediate plan is to embark on a comprehensive upgrading, refurbishment of our quay cranes, rubber tyred gantries (RTGs) and replacement of PTP’s existing equipment to increase the handling capacity from the current 10.5m teu to 13.2m teu annually.

“This will be followed with the development of Phase 3 which is expected to take place in 2018. Phase 3A and 3B which consist of six new berths of 3km in length will enable us to increase our handling capacity to 22.2m teu before 2030,” he said.

“The expansion is to ensure that PTP remains competitive in the market ultimately become the most preferred transhipment port in Asia,” he added.

At present, PTP operates with 14 berths measuring 5km of quay length. The port moved 9.1m teu in 2015, an increase of 7.1% compared to 2014.

Mohamed Khaled Bin Nordin, chief minister of Johor, acknowledged that PTP has contributed to the economic growth of Johor state in the southern tip of Peninsula Malaysia.

“We anticipate the expansion of PTP will create more job opportunities to the locals, thus further position Johor as a regional economic power and not just a part of the Malaysian economy,” he said.