U.S. sanctions aim to scuttle Iranian shipping
Monday, 05 November 2018
The restored sanctions cover more than 700 individuals, entities, aircraft and vessels in the “largest ever single day targeting the Iranian regime.”
The reimposition of U.S. economic sanctions against Iran will attempt to impede the Mideast country’s maritime and aviation transport industries.
The “snapback” to U.S. sanctions placed on Iran prior to the 2015 Iran nuclear deal’s so-called Joint Comprehensive Plan of Action (JCPOA) effectively kicked in at midnight Monday. President Trump withdrew the U.S. from the treaty on May 8.
According to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), Monday marks the “largest ever single day targeting the Iranian regime.” The restored sanctions cover more than 700 individuals, entities, aircraft and vessels.
“OFAC’s action is designed to disrupt the Iranian regime’s ability to fund its broad range of malign activities and places unprecedented financial pressure on the Iranian regime to negotiate a comprehensive deal that will permanently prevent Iran from acquiring a nuclear weapon, cease Iran’s development of ballistic missiles and end Iran’s broad range of malign activities,” the agency said.
Nearly two-thirds of the individuals and entities placed on OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List cover more than 400 targets, including over 200 people and vessels in Iran’s marine shipping and energy sectors, in addition to Iran Air and its 65 planes.
The two largest Iranian maritime companies included among the sanctions are the Islamic Republic of Iran Shipping Lines (IRISL) and oil transport giant National Iranian Tanker Co. (NITC). OFAC also added 65 IRISL subsidiaries and related individuals, as well as 122 vessels, to the SDN list.
OFAC noted that IRISL subsidiary, Valfajr Shipping Company PJS, has been used regularly by the Iranian military to transfer personnel, cargo and containers from Iran to major ports in the Persian Gulf region. Hafez Darya Arya Shipping Co., another IRISL subsidiary, has shipped cargo to at least one known cover company for Iran’s Defense Industries Organization (DIO), which is part of Iran’s nuclear and missile programs.
OFAC identified 37 NITC-affiliated entities and vessels in which NITC has an interest. “Each year, these vessels move tens of millions of barrels’ worth of Iranian oil, as well as Iranian natural gas, which constitute a major source of revenue to fund the Iranian regime’s malign activities. It is essential to close off this funding stream to Tehran,” OFAC said.
The agency warned the shipping industry to be alert to Iranian attempts to change vessel names or use other tactics, such as creating new front companies, to disguise these assets from U.S. sanctions.
However, the U.S. in the interim has exempted Japan, China, India, Italy, Greece, South Korea, Taiwan and Turkey from the sanctions due to their heavy dependence on Iranian oil imports.
“Make no mistake about it, the Iranians will do everything they can to circumvent these sanctions,” said Secretary of State Mike Pompeo at a press conference on Friday with Treasury Secretary Steve Mnuchin. “They’ll turn off ships, they’ll try and do it through private vessels, they’ll try and find third parties that don’t interact with the United States to provide insurance mechanisms. The list of Iranian efforts to circumvent these sanctions is long.”
OFAC said persons that engage in certain transactions with the entities designated and identified Monday may themselves be exposed to enforcement action, designation or blocking sanctions.
ONE reports $192 million loss in second quarter
Wednesday, 31 October 2018
Japanese carrier expects $600 million loss in fiscal year ending March 31, 2019, as liftings disappoint, especially on backhaul legs. ONE reports $192 million loss in second quarter.
Ocean Network Express or ONE, the container carrier owned by Japan’s three largest shipping companies, has reported a net after tax loss of $192 million in the second quarter of its current fiscal year.
Combined with a $120 million loss in the first quarter and an additional $289 million loss forecast for the second half, ONE now expects to lose about $600 million for the full fiscal year compared to an initial forecast of $110 million profit.
Owned by NYK, MOL and “K” Line, ONE currently has a fleet of 228 ships with 1.55 million-TEU capacity, making it the world’s sixth-largest container carrier. Like its three owners, ONE’s current fiscal year runs through March 31, 2019.
ONE said revenue also has been below expectations — $2.96 billion in the second quarter compared to $3.38 billion forecast in July. ONE now forecasts revenue of $11 billion for the year as opposed to the $12.25 billion forecast in July.
Customer service issues in the first three months of operation have been resolved, ONE said, but it added liftings have been lower than targeted. It also is experiencing higher costs for returning empty containers to Asia “as the result of a larger impact due to a slower recovery on the nondominant leg.”
ONE carried 761,000 TEUs in the second fiscal quarter from Asia to North America for a 90 percent utilization, compared to 530,000 TEUs and 73 percent utilization in the first quarter.
However, in the backhaul direction, from North America to Asia, it carried only 285,000 TEUs with a 33 percent utilization in the second quarter and 218,000 TEUs, also 33 percent utilization, in the first quarter.
“We are maintaining the utilization by reducing frequencies as necessary during the lower demand periods in H2,” said ONE. “Freight has been maintained on the high side after the summer season as a result of rush demand towards the calendar year end.”
A similar imbalance exists in the Asia-Europe trade. ONE moved 478,000 TEUs from Asia to Europe in the second quarter (90 percent utilization), an improvement from the 312,000 TEUs (73 percent utilization) in the first quarter. Backhauls from Europe to Asia were 263,000 in the second quarter (47 percent utilization) and 194,000 (46 percent utilization) in the first quarter.
While freight recovered in the second quarter, ONE said there has been a downward trend in the Asia-Europe trade after volumes peaked in August. It said, “Flexible planning of blank sailing based on the demand trend is now under way.”
ONE said it is achieving synergies from combining the container liner operations of NYK, MOL and “K” Line. “Annual integration synergy of $1.05 billion are steadily emerging. As of FY 2018, it will reach 75 percent against originally budgeted 60 percent.”
ONE said the timing to transfer the container terminal operations outside of Japan of NYK, MOL and “K” Line is unchanged and still planned for the fourth quarter of the current fiscal year — the first three months of 2019.
The loss at ONE was reflected in the result of the three major Japanese carriers, which also reported their second-quarter results on Wednesday. MOL had a profit while NYK and “K” Line recorded losses.
NYK said its loss for the second quarter ending Sept. 30 attributable to the owners of the parent company was 5.2 billion yen ($46 million) compared to a profit of 892 million yen in the same period the prior year. Revenue was 451 billion yen in the second quarter of the current fiscal year, compared with 542.6 billion yen in the same period last year.
While ONE and NYK’s air cargo business, Nippon Cargo Airlines, had losses, the dry bulk shipping and logistics businesses were profitable.
Nippon Cargo Airlines grounded all 11 of its aircraft — eight 747-8Fs and three 747-400Fs — in the middle of June in order to confirm the soundness of the aircraft. The company said it took this step because of improper handling of maintenance work conducted in the past.
The company has decided to eliminate the 747-400Fs and recorded an impairment loss on the planes and spare engines as a result. The 747-400Fs are being brought back into service once their soundness has been confirmed. As of early October, five aircraft were back in service.
NYK’s logistics business is “progressing steadily with both forwarding business and contract logistics business improving.” It reported an increased profit versus the same period last year.
The company said its bulk shipping business improved on the back of market recovery, but that “automobile transport volume to resource-rich countries is slow to recover.”
MOL said it had a profit in the second quarter ending Sept. 30 attributable to the owners of the parent company of 7.4 billion yen ($65.5 million) compared to a profit of 7.9 billion yen in the same period the prior year. Revenue was 315 billion yen in the second quarter of the current fiscal year, compared with 416 billion yen in the same period last year.
In addition to a loss in the container business, MOL said its car carrier segment had a decrease in ordinary profit. Both MOL and NYK said that the car carrier business saw a temporary decrease in shipment volume due to heavy rains in Western Japan.
The United States is not the only country that is experiencing issues with an aging cadre of truck drivers. That has been a plus for MOL’s ferry and coastal roll-on, roll-off business. which “observed a firm cargo volume having continued since the previous fiscal year amid a trend of accelerated modal shift, which reflects shortage and aging of the truck drivers and tighter labor controls in Japan.”
In the dry bulk cargo business MOL said it saw a 6.8 percent increase in revenue and 9.6 percent increase in ordinary profit in the first half of the current fiscal year. Rates for “capsize” bulkers rose to the $24,000 range per day from July through August amid a recovery in iron ore shipments from Brazil. Then the rate remained roughly in the range of $17,000 per day in September “amid a weakening market brought about by deteriorating sentiment with respect to trade friction between the U.S. and China.”
The Panamax dry bulk market “briefly endured deteriorating sentiment, but improved gradually and trended in $13,000 to $14,000 range per day from the middle of September onward as volumes of mainstay cargoes such as coal and grain shipments from South America remained steady. Facing such market conditions, the dry bulk business recorded positive earnings amid a
slight year-on-year increase in ordinary profit.”
The company’s energy transport segment — crude and product tankers, liquid natural gas (LNG) and liquid petroleum gas (LPG) tankers — saw revenues climb 5.6 percent and ordinary profit increase 60.6 percent in the first half of the fiscal year.
MOL said, “The LNG carrier division maintained robust performance, in part due to new vessel deliveries for a European customer, in addition to vessels operating under existing long-term contracts. The offshore business division also recorded stable ordinary profit, brought about by steady operations of existing projects including those that started operation in June.”
It said the LPG carrier market (LPG carriers transport heavier hydrocarbons like butane and propane, as opposed to LNG carriers that carry methane) “followed a downward trend in the first quarter due to declining vessel demand in the U.S. region amid a situation where LPG trades slowed down as rising prices of U.S. LPG resulted in a diminishing price difference in comparison with the Asia region. However, the market has since shifted to a trajectory of recovery amid increasing vessel demand in the U.S. region as a result of that price difference once again widening at the outset of the second quarter.”
“K” Line said it had a loss attributable to the owners of the parent company in the second fiscal quarter ending September 30 of 5.3 billion yen ($47 million) compared with a profit of 4.7 billion in the second quarter the prior fiscal year. Revenue was 204 billion yen in the second quarter of the current fiscal year, compared with 291.6 billion yen in the same period last year.
“K” Line saw improved earnings in the second quarter of the current fiscal year over the first quarter in both its dry bulk and energy resource transport segments.
In its car carrier business, “K” Line said “cargo movements for finished vehicles continued to gradually increase as a trend except for shipments to the Middle East, whose economic recovery is lagging, and within Europe, whose sales decline affected by implementation of worldwide harmonized light vehicles test procedure.
It said overall volume of finished vehicles shipped by the Group increased, but “as a result of factors such as a rise in fuel costs and the deterioration of operation efficiency, revenue declined year-on-year and a loss was recorded.”
“K” Line said it its logistics business in Japan continued to have robust cargo movements. “Although the operating rate declined and costs increased due to earthquakes and rough weather, the impact was limited.”
“In the international logistics sector, the growth of cargo movements related to semiconductors and e-commerce in air cargo transportation continued solidly. Likewise, the business scale of localized logistics services in such countries as Thailand, Indonesia and the Philippines steadily expanded,” said "K" Line. “On the other hand, cost increasing for enhancing business capabilities in the logistics business occurred after the integration of the containership business. As a result, the logistics business overall recorded a year-on-year increase in revenue, but profit declined year-on-year.”
Service enhancements on FE-Pakistan-W. India route
From Wed/31-Oct to Tue/06-Nov
APL (CMA CGM Group) and OOCL (COSCO Group) have announced the enhancement of their Far East-Pakistan-Western India offering with the introduction of two new weekly services, branded respectively as ‘AS6’/’AS7’ by APL and ‘CIX1’/’PMX’ by OOCL.
These announcements coincide with the merger by Wan Hai, COSCO, Evergreen and PIL of two joint services covering the Far East-Pakistan trade, the current 'PMX' service (run mostly with 5,500 teu tonnage) and 'PIX/API/PM2' service (run mostly with 4,200 teu tonnage).
These two services will be merged into a new 'Asia-Pakistan Mundra Express' (PMX) service on which APL and OOCL will take slots to ensure their new 'AS7' and 'PMX' offers. The merged service will be run with 5,300-7,000 teu tonnage, making redundant five 4,200-4,500 teu panamax units.
The 'AS6/CIX1' will replace the joint APL-OOCL 'AS3/CPX2' service that is currently operated with five ships of 4,200-5,500 teu. Besides, OOCL continues to advertise its 'CPX' service, currently jointly operated with Yang Ming and on which APL will drop its slots, marketed under the ‘AS5’ branding.
The ‘AS6’ and 'AS7' will provide APL with new direct connections between the Western ISC sector and the southern China ports of Nansha and Fuzhou, not offered by the current 'AS3' and 'AS5' services, while it will enhance OOCL's presence on the sector.
The details of the above mentioned services stand as follows :
Ø ‘AS6/CIX1’ (new) - Offered by APL and OOCL - Shanghai, Ningbo, Shekou, Nansha, Singapore, Port Kelang, Nhava Sheva, Karachi (SAPT), Singapore, Shanghai - Rotation in six weeks with six ships of 5,500-7,000 teu. It is scheduled to start on 15 Nov from Shanghai with the 6,606 teu KOTA CANTIK.
Ø ‘AS7/PMX’ (new) - Slots on the 'PMX' service offered by COSCO, Evergreen, Wan Hai and PIL - Shanghai, Ningbo, Fuzhou, Shekou, Singapore, Port Kelang, Colombo, Karachi (KICT and PICT), Mundra, Port Kelang, Singapore, Shanghai – Rotation in six weeks with six ships of around 5,300-7,000 teu. It is scheduled to start on 14 November from Shanghai with the 5,364 teu EVER UNION.
Ø ‘AS3/CPX2’ (Operated by APL/OOCL - to be replaced by ‘AS6/CIX1;) - Shanghai, Ningbo, Xiamen, Singapore, Nhava Sheva, Karachi (KICT), Shanghai – Rotation in five weeks with five ships of 4,200 to 5,500 teu. APL last sailing is planned on 5 November from Shanghai with the OOCL BUSAN.
Ø ‘AS5’ (Operated by YM/OOCL - APL slots on 'CPX’ to be dropped) - Shanghai, Ningbo, Shekou, Singapore, Karachi (KICT), Mundra, Port Kelang, Singapore, Hong Kong, Shanghai – Rotation in six weeks with six ships of 4,200-5,700 teu. APL last sailing is planned on 10 November from Shanghai on the OOCL SHANGHAI.
More blanked sailings on the cards as carriers fail to lift Asia-Europe spot rates
(The Load Star)
Friday, 02 November 2018
Despite blanking 11 sailings this month, carriers have so far failed in their efforts to lift freight rates between Asia and North Europe.
And with bunker prices some 40% higher than a year ago, the tradelane is in potentially sub-economic territory.
Fortunately for ocean carriers, their transpacific trades are enjoying a post-peak season boom ahead of punitive 25% import tariffs due to be imposed by the US on a wide range of Chinese imports on 1 January.
Moreover, a rebound in the markets from Asia to Africa and Asia to Latin America has improved rates on these routes too, which will help mitigate the impact of loss-making services.
The Asia to North Europe and Mediterranean spot rate components of the Shanghai Containerized Freight Index (SCFI) both shed 1.2% this week, to take rates down to $752 and $769 per teu, respectively.
Annual contract rate negotiations will commence shortly on the European tradelanes and carriers will be anxious to boost spot rates as much as possible in the coming weeks to put them on the front foot in their meetings with shippers.
Given the seasonally weaker forward prospects on the route, carriers will need to consider blanking voyages next month too in order to support rate levels.
However, according to Alphaliner, the 2M alliance is planning to reactivate its suspended AE2/Swan loop, with the sailing of the 19,437 teu MSC Mirja from Qingdao on 8 December, which will increase the downward pressure on rates, at least until the pre-Chinese New Year demand spike in January.
But on the transpacific, with load factors still at the 90% level, carriers are making hay while the sun shines. One carrier source told The Loadstar this week that the trade had proved “a saving grace” in the third quarter.
“We are filling every ship to the gunnels,” he said, “and we are also able to pick and choose what we load, which is massively boosting our average rate.”
Indeed, container spot rates from Asia to the US east coast, as recorded by the SCFI, jumped by 9.7% this week, or $321, to lift the rate to $3,615 per 40ft. In comparison, a year ago the SCFI recorded a rate of $2,089.
For US west coast ports, there was a modest 0.7% uplift this week to $2,606 per 40ft, but nonetheless, some 70% higher than 12 months ago.
Carriers are capitalising on the demand spike by adding extra loaders on the transpacific and, in the case of the 2M alliance, on single round-trip voyages Maersk has temporarily deployed some of the biggest vessels ever to ply the trade: two 17,816 teu sister ships, idled during the AE2/Swan Asia-North Europe suspension.
Elsewhere, there was a 12% spike in the SCFI’s rate for Asia to Santos, to $1,468 per teu. However rates on the route are in recovery mode and remain about 50% lower than a year ago.
And prospects for east and west Africa tradelanes continued to improve this week, with the SCFI recording a 9.5% increase to $2,437 per teu, which is some 50% higher than a year ago.
The improving African market is linked to the recovery in oil prices over the past year, with oil-producing nations such as Nigeria receiving an economic boost from the rise in crude prices.
Carriers have been quick to upgrade their services, with, for example, OOCL recently announcing a new direct link from Asia to West Africa “to meet the growing demand for quality services in this region”.
Asia-Europe box traffic sees strong quarter
Wednesday, 07 November 2018
Asia-Europe traffic climbs 6.6% in September to finish the third quarter with a flourish, while providing carriers with a much-needed boost following disappointing volumes through the rest of 2018. Meanwhile, transpacific trade stays true to form, with another month of impressive figures.
Asia-Europe container volume growth accelerated at the end of the third quarter, providing some much-welcome relief for the route’s carriers following a disappointing 2018 so far.
The latest figures published by Container Trades Statistics show box traffic grew by 6.6% in September over last year, from 1.32m teu to 1.41m teu.
That represents the highest level of monthly growth reported by the trade since February, when volumes jumped by more than 30% on 2017 levels on account of the late Chinese New Year.
In the remainder of the quarter, July and August, peak season volumes on the Asia-Europe route flattered to deceive. Traffic through the two-month period was just about on par with last year, forcing carriers to abandon extra loaders and make the unprecedented move to cut capacity due to the volume shortfall.
The strong third quarter-end has helped push up year-to-date growth to a slightly more respectable 1.7%, rising from 11.96m teu to 12.16m teu. However, the return to form was still not enough to rejuvenate the spot market.
Both the Shanghai Containerised Freight Index and World Container Index showed box rates on the Asia-Europe route lost ground in September. The CTS Price Index followed suit, falling back from its 60-point mark in August to 58 points.
Anecdotal market reports suggest healthy volume growth has been upheld on the east-west route at the start of the fourth quarter. But with spot rates largely unmoved through October, analysts are calling for deeper capacity cuts on the trade to address the supply/demand imbalance.
Healthy Asia-Europe volumes in September also helped play a part in a return to form for global container traffic.
Following only a marginal increase in the number of containers shifted on the ocean-borne trades during August, up by just 0.5%, volumes swelled by 4.2%, according to CTS data.
Global volumes were up from 13.1m teu to 13.7m teu in September, resulting in just under 3% volume growth for the third quarter. Year-to-date volume growth through the nine months ending September 30 stood at 3.8%.
A key contributor to global box growth has been the transpacific, where the strong growth apparent throughout 2018 continued in September, despite further tariffs on Chinese imports into the US.
At the start of September, US ports, particularly on the Pacific coast, noted how a number of shippers had chosen to frontload cargo ahead of a second round of tariffs, contributing to a further spike in an already fruitful peak season.
This helped drive up volumes from 1.6m teu to 1.7m teu, a rise of 7.1% on year, on the Asia-North America trade. This represented the trade’s highest growth level since May.
Year-to-date traffic on the headhaul trade over the course of the first nine months was recorded at 5.1%, according to CTS.
With the second round of tariffs now in effect, however, carriers will be hoping that positive trade sentiment will help absorb any drop-off in Chinese imports.
Idle fleet hits 19 month high at 662,260 teu
From Wed/31-Oct to Tue/06-Nov
The idle containership fleet has increased to 662,260 teu as at 29 October, reaching a fresh 19 month high on the back of continued demand weakness.
Containership idling typically peaks in the aftermath of the two ’Golden Week’ holidays in China, and this year has been no different.
The first week-long holidays after the Lunar New Year on 15 February saw the idle fleet peak at 627,000 teu in March this year. This is followed by the National Day holidays from 1 to 7 October, which has triggered the current increase in idle ships.
The recent increase in scrapping has done little to reduce the number of idle ships, with unemployment rising or flat across all size sectors.
Charter rates remain under pressure in all segments, with only the Transpacific showing any signs of strength. However, the increased demand for vessels for extra-caller duties on the Transpacific is expected to wane by December, which could trigger a further increase in idle figures.
Thursday, 01 November 2018
In the secondhand containership sale and purchase marker, Braemar ACM Shipbroking reported that the 2012-built 4,249 teu boxship Argos has been sold to UK owner Borealis for a price in excess of $14m.
“Although charter rates continued on a steady decline, there has been an uptick in fixing activity as well as enquiry from the lines, an encouraging sign for a struggling market,” Braemar ACM said in its report.
According to Braemar, demolition activities in the containership sector continued to drive forward with more feeders entering the market for sale. The 1990-built 1,752 teu Vasi Sun was sold to scrappers in Bangladesh for a price of $470 per ldt with numerous other feeders in negotiations for recycling.
Demand on the rise for 5,500-7,000 teu tonnage
From Wed/31-Oct to Tue/06-Nov
The charter market remains generally active, although the volume of business receded slightly last week, partly as a result of Hamburg’s Eisbeinessen shipping party.
The highlight of the last two weeks has been the rebound in demand for LCS tonnage of 5,500-7,000 teu, a welcome development for owners, that is putting an end to a grim period for this segment.
Thanks to this higher demand, the tally of spot ships has been halved, but charter rates are yet to reflect this rally. The slightly larger VLCS units (over 7,500 teu) also remain in good demand.
The rest of the market is facing mixed developments. The volume of business is stable for classic panamaxes, but generally down for the other sizes. Charter rates meanwhile remain on an uninspiring course, being at best stable. The 1,500-1,900 teu segment continues to suffer from substantial overcapacity, which could have been even worse without the sale for demolition of ten vessels in this segment in the last four weeks.
Generally speaking, most vessel sizes have to face increasingly short or flexible period charter employments, a sign that charterers continue to have an upper hand in a market whose outlook remains uncertain.
SITC books three more feeder boxships at Yangzijiang
Monday, 05 November 2018
Chinese boxship operator SITC International Holdings has entered into shipbuilding contracts with Yangzijiang Shipbuilding for the construction of three 2,700 teu containerships.
The delivery of the three ships are scheduled in October 2020, December 2020 and February 2021 respectively.
Total value of the contract is $87.9m.
The order follows SITC ordering two containerships of the same size at the yard in June.
SITC currently operates a fleet of over 70 ships with total capacity of around 105,000 teu. The company also has another 11 newbuildings on order.
CMA CGM finalizes purchase of Containerships
Wednesday, 31 October 2018
The European Commission authorized the acquisition of the Finnish container transportation and logistics company. CMA CGM finalizes purchase of Containerships.
The CMA CGM Group said Wednesday it has completed the acquisition of Containerships.
The Group announced that it had reached an agreement with Containerships in June. The European Commission authorized the transaction Oct. 22. Containerships, which specializes in the intra-European market, is a Finnish container transportation and logistics company.
Founded in 1966, Containerships has 690 employees offers logistics solutions through all types of transportation.
The Group said the acquisition strengthens its position as a “major player in intra-European transport, in particular through the combination of the geographical areas covered by Containerships and MacAndrews.”
MacAndrews, recently merged with OPDR, covers Great Britain, Poland, Sweden, Ireland, the Netherlands, Spain, Portugal and Morocco, the Group said. Containerships is present in the Baltic markets, Russia, Northern Europe, North Africa and Turkey.
“Customers of the CMA CGM Group’s intra-European activity will now benefit from the expertise of 2,700 employees located in 130 offices,” the company said in a press release Wednesday, noting that in 2017, 2.2 million TEUs were transported on CMA CGM Group’s and Containerships’ intra-European lines.
The acquisition of Containerships is part of the CMA CGM Group’s strategy aimed at densifying its regional network, which began in 2002 with the acquisition of MacAndrews, the company said in the press release. “CMA CGM is thus strengthening its intra-regional offer, a rapidly expanding market in which the Group is already present through its subsidiaries.”
Those subsidiaries are CNC Line in the intra-Asia market, Mercosul in Brazil, Sofrana in the Pacific Islands and MacAndrews in intra-Europe.
“With Containerships, CMA CGM is also pursuing its strategy towards the protection of the environment with the upcoming entry into Containerships’ fleet of four 1,400-TEU vessels powered by liquefied natural gas,” the company said. “These vessels will be followed, from 2020 onwards, by the entry into service of the nine 22,000-TEU and two 1,400-TEU containerships ordered by the CMA CGM Group.”
CMA CGM said Containerships also has a fleet of LNG-powered trucks, enabling the company to offer LNG throughout the transport cycle.
Capital Product Partners to Fit Up to 14 Ships with Scrubbers
(World Maritime News)
Wednesday 31 October 2018
Greek shipping company Capital Product Partners has decided to equip part of its fleet with exhaust gas cleaning systems (EGCS).
Namely, the partnership said it is planning to install scrubbers on up to 14 of its larger vessels, including ten containerships, three crude tankers and one bulk carrier.
The final decision for certain of these vessels is expected to be reached within the coming months and the installation of the scrubbers is expected to be completed throughout 2019 and 2020, the company informed.
“We believe that this move can help increase the appeal of the partnership’s larger vessels to period charterers post January 2020, but also potentially allow us to capture meaningful premiums, such as that negotiated with one of our charterers for five of our vessels,” Jerry Kalogiratos, Chief Executive Officer of the Partnership’s General Partner, said.
In connection with the deals to equip five 5,000 TEU container vessel series with scrubbers, Capital Product Partners has agreed with Hyundai Merchant Marine (HMM), the charterer of the vessels, to increase the daily charter rate by USD 4,900 for each unit. The ships in question are the Hyundai Prestige, Hyundai Premium, Hyundai Paramount, Hyundai Privilege and Hyundai Platinum.
The increase will be effective from January 1, 2020, or, if later, the installation date of the scrubbers until the expiry of each charter in 2024 and 2025, as applicable. The HMM vessels are currently earning USD 23,480 gross per day following a restructuring agreement with HMM dated July 15, 2016.
Under the restructuring agreement, the charter rate is set to be restored to the original daily gross rate of USD 29,350 from January 1, 2020 and will increase further to USD 34,250 once the scrubbers are installed in accordance with the scrubber deals.
Capital Product Partners revealed its decision as part of the company’s financial report for the third quarter ended September 30, 2018.
The partnership’s net loss for the period was USD 22.6 million, compared to a net income of USD 9,6 million. The result includes a non-cash impairment charge of USD 28.8 million from the sale of the 159,982 dwt crude oil carrier M/T Amore Mio II.
The 2001-built unit was sold to an unaffiliated third party for the amount of USD 11.2 million. The vessel was delivered to an unaffiliated third party on October 15, 2018.
Total revenue for the third quarter of 2018 was USD 73.4 million, corresponding to an increase of 17.1% compared to USD 62.7 million reported during the third quarter of 2017. The increase was primarily a result of the rise in the average number of vessels in the company’s fleet and the higher number of voyage charters performed by its vessels.
Main carriers show polarised view of scrubber use
From Wed/31-Oct to Tue/06-Nov
With just 14 months left until the global ‘IMO 2020’ sulphur cap on marine fuel is implemented, the world’s leading container carriers have adopted very different approaches to comply with the new requirements.
Only four of the top-twelve carriers so far committed to install scrubbers on a substantial part of their fleets. The remaining eight companies are either planning to conduct trials on only a small number of ships or to switch to low Sulphur fuel exclusively.
While carriers’ intentions are mostly kept confidential, Alphaliner has identified almost 300 containerships that have been or will be equipped with Exhaust Gas Cleaning Systems (EGCS) or scrubbers. In this respect, MSC leads the way with over 120 owned or long-term chartered ships to be equipped, followed by Evergreen with some 70 units planned. The Korean carrier HMM meanwhile already confirmed scrubbers for 27 ships, with more expected to be added.
CMA CGM will adopt a mixed approach, that includes the installation of scrubbers on some 20 ships, together with 15 LNG powered vessels.
In contrast, Maersk and Hapag-Lloyd have announced only limited trials, with the latter also to convert one ultra-large container ship to run on LNG.
The remaining carriers, including in particular COSCO and ONE, have not committed to the use of scrubbers or LNG fuel, leaving them with only low Sulphur fuel oil options.
Carriers will have to adopt one of the following options in order to comply with the new 2020 global sulphur cap of 0.5%:-
• Switching from high-sulphur fuel oil (HSFO) to marine gas oil (MGO) or distillates
• Using very-low-sulphur fuel oil or compliant fuel blends (0.50%sulphur)
• Retrofitting vessels to use alternative fuels such as LNG or other sulphur-free fuels
• Installing exhaust gas cleaning systems (scrubbers), which allows operation on regular HSFO
Carriers that opt for scrubbers will incur additional costs related to the following:
• Cost of the scrubber equipment
• Cost of the installation/retrofit
• Cost of maintenance
• Cost of sludge disposal (if using closed loop scrubber)
• Daily running expenses (including chemicals but excluding extra FO consumption linked to electric load, as the ship FO bill is supported by the charterer)
According to CMA CGM, the extra costs to comply with the new SOx abatement rules will raise its average costs by $160 per teu based on current conditions, which it intends to pass to shippers in full.
Maersk introduces instant confirmation for container bookings
Thursday, 01 November 2018
Maersk Line is introducing instant booking confirmation for containers akin to a passenger booking an airline ticket online.
In what it says is an industry first Maersk will provide confirmation of a container booking in seconds compared to waiting times of up to two hours in the past.
With the solution Maersk customers get visibility of sailing options and vessel space with a certainty that a booking will not then be cancelled. Maersk said that previously 10% of bookings were either rejected or put on an alternative sailing generating 15% of all the company customer service calls and chats, and some 200,000 emails monthly.
"We are now making it as easy for our customers to book a container as booking a flight ticket. Instant booking confirmation makes it faster, easier and simpler for our customers to interact with Maersk. It is a milestone for the entire industry and a concrete example of how we are bringing our strategy to life when we improve the customer experience through seamless digital offerings," said Vincent Clerc, coo of AP Moller – Maersk.
The instant booking confirmation is currently available to all customers in a beta version.
Maersk will also be introducing online booking via the Maersk App allowing instant bookings directly from mobile devices.
"Maersk operates in several markets where mobile phones make up the primary working tool for the workforce. Here, Instant Booking Confirmation straight from the mobile phone will be a huge improvement for our customers' supply chain managers - it will further enable trade in these markets," said Sonny Dahl, global head of customer experience & service, AP Moller - Maersk.
APM Terminals Bahrain Sets Sights on USD 32 Mn IPO
(World Maritime News)
Friday, 02 November 2018
APM Terminals Bahrain revealed its plans to raise around USD 32 million through its planned initial public offering (IPO).
APM Terminals Bahrain will offer 18 million shares, equivalent to 20 per cent of its issued share capital, at BHD 0.66 per share. The net proceeds will be paid to its current shareholders pro-rata based on their shareholding.
APM Terminals currently holds 80% of the shares and the remaining 20% of shares are held by YBA Kanoo Holdings of Bahrain, a regional business group.
“This is a significant moment for APM Terminals Bahrain as we move forward to launch our IPO, with an opportunity for the local and wider regional community to invest in a successful public-private partnership and Bahrain’s only commercial port,” Mark Hardiman, CEO/Managing Director, APM Terminals Bahrain, said.
The offering will start on November 8 and will remain open until November 24.
The company’s first IPO on the Bahrain Bourse is part of the contractual agreement made when the port opened in 2009.
APM Terminals Bahrain has an exclusive 25-year concession from the Bahrain Government to manage and operate Khalifa Bin Salman Port (KBSP). The concession, which commenced on April 1, 2009, is renewable with mutual consent of the company and the Bahrain Government.
The port currently has a container throughput capacity of 1 million TEUs per annum, with utilisation of around 40% in 2017. There is potential to expand to 2.5 million TEUs per annum in the future.
Maritime History Notes: A pioneering containership
Friday, 02 November 2018
The S.S. Fairland had a storied career before being converted for commercial operations.
The pride of the early Sea-Land Service fleet, the U.S.-flag Fairland is shown tied up at Port Newark, N.J. in 1958. Note the starboard sponson, which were used to widen the deck 11 feet to support two onboard container cranes.
The first containership to trade internationally was the U.S.-flag S.S. Fairland, when in late April 1966 the vessel sailed from Elizabeth Port, N.J., bound for North European ports.
Although the ship was recognized and feted at each port it visited, this was not the first or last time the ship made headlines.
The Fairland’s story begins in August1942, when it was delivered to the Waterman Steamship Co., at Gulf Shipbuilding Corp.’s Chickasaw, Ala. shipyard. The ship was the third of 30 sisters, known by the U.S. Maritime Commission as the C2-S-E1 type cargo ships.
The Fairland shown at Manila Bay in 1944 during its World War II service as an attack transport.
The Fairland made a quick voyage to Europe and then embarked on a round-the-world trip starting at Philadelphia. The ship’s itinerary took it through the Panama Canal to Australia, Iran, and Uruguay, before returning to New York, where it was converted to an attack transport capable of carrying 1,393 troops. For the next three years, the Fairland sailed between San Francisco and the Philippines, Australia, Funafuti, Milne Bay, Eniwetok, Guam, Saipan, Ulithi, Okinawa, and Midway, and in 1945 to Japanese ports. Upon returning to Mobile in February 1946, the ship was returned to Waterman Steamship, which promptly converted it to commercial operations. For the next 10 years, the Fairland was employed in the worldwide trades of its owner.
Waterman Steamship Co. operated the Fairland in the years immediately following World War II. Here the ship passed through Cape Cod Canal in 1952.
Then, in late 1957, the ship returned to its birthplace at Chickasaw for conversion to a containership. The conversion included removing tween decks, installing container cells, and widening the hull 11 feet by the addition of sponsons to its sides. This was done to square up the deck to accommodate two onboard gantry cranes used for handling 226 thirty-five foot containers.
After conversion, the ship was employed with five sisters that sailed between the U.S. East Coast ports and the Gulf port of Houston. Shortly thereafter, the Fairland became part of Sea-Land Service’s offshore presence in a containership service to San Juan, Puerto Rico.
Left: The first containers for Sea-Land Service being loaded on board the Fairland in the late 1950s.
Middle: The Fairland with a load of containers passing sistership Wacosta at the Port of Houston.
Right: The containership arriving at the Port of Bremen on May 6, 1966.
In 1966, the ship earned the distinction of becoming the first full containership to call at North European ports. Since a good portion of its Europe-bound cargo consisted of hazardous materials, surveyors from the National Cargo Bureau were on hand to ensure the loading and documentation were in accordance with both the U.S. hazardous cargo regulations and those of the International Maritime Consultative Organization, known today as the International Maritime Organization (IMO).
In 1967, the Fairland became part of Sea Land’s service expansion to the Far East. Unfortunately, the ship was involved in a minor collision on a foggy day in Puget Sound with the freighter Silver Shelton. That was only mishap the Fairland experienced during its long and varied career. The Fairland continued serving Sea-Land’s worldwide services until December 1975 when it was scrapped in Hong Kong.
Sea-Land operated the Fairland from 1958 to 1975.