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International Association of Marine and Shipping Professionals
NEWS BULLETIN 11 – 17 June 2018
CALL US ON +1 307 459 1102
WWW.IAMSP.ORG
The International Association of Marine and Shipping Professionals (IAMSP) is the
professional body for Marine and Shipping professionals world-wide, formed in 2015. The
association is an independent, non-political organization aims to:
Contribute to the promotion and protection of maritime activities of the shipping industry,
the study of their development opportunities and more generally everything concerning
these activities.
Promote the development of occupations related to maritime and shipping; serve as a point
of contact and effective term for the business relationship with the shipping industry
(charter brokers, traders, shipping agents, Marine surveyors, ship inspectors, ship-managers,
sailors, and stevedores etc.).
Ensuring the representation of its members to the institutions, national and
international organizations as well as with governments, communities and professional
groups while promoting the exchange of information, skills and the exchange of
experience.
Develop the partnership relations sponsorship, collaboration between IAMSP and other
associations, companies, national and international organizations involved in activities
related to Maritimes and shipping.
Contribute to the update and improvement of professional knowledge of its members
and raise their skill levels to international standards.
Progress towards a comprehensive and integrated view of all marine areas and the
activities and resources related to the sea.
About I.A.M.S.P
Italy: New interior minister Matteo Salvini shuts port to 629 rescued migrants
INTERNATIONAL news
10/06/2018
Italy's new interior minister has refused permission for a rescue vessel to drop off more than 600 migrants
picked up off Libya's coast.
629 migrants are on board the Aquarius after they were rescued at sea. Credit: Reuters
Matteo Salvini, the leader of the far-right League party, said Malta should take in the ship, the Aquarius,
but his request was rejected. The League had promised voters during recent elections that it would take a
tough stance on immigration. Italy is the main entry for migrants crossing from North Africa to Europe.
Mr Salvini said on Sunday Italy was saying "no to human trafficking, no to the business of illegal
immigration". He also complained, on Facebook that: "Malta takes in nobody. France pushes people back
at the border, Spain defends its frontier with weapons."
The migrant rescue charity SOS Méditerranée, which runs the Aquarius, said 629 migrants had been
picked up in six different rescue operations off Libya's coast on Sunday. The charity's spokesperson,
Mathilde Auvillain, said the ship had received orders to head north and was now awaiting "definitive
instructions".
"Our objective is the disembarkation in a port of safety of the 629 people now on board the Aquarius -
some we rescued yesterday night in difficult conditions," she was quoted by Reuters as saying. 5 Port &
Shipping News 23/18 (04 – 10 Jun 2018) Uwe Breitling - Port, Transport & Training Consultant
Port development South Africa: Why the Durban harbour project will be horrible blunder
Mr Salvini's comments came after another dispute with Malta on Friday. He had accused the Maltese
government of not doing its fair share when the Seefuchs rescue ship was stranded in volatile seas with
126 migrants on board. Malta reportedly refused to send assistance to the vessel and it was allowed to
dock in the Sicilian port of Pozzallo on Saturday, the NGO Sea Watch reported.
"It is not possible for Malta to say 'no' to every request for help. The Good Lord put Malta closer than
Sicily to Africa," Mr Salvini remarked. The Maltese government rejected Sea Watch's criticism and said it
adhered to all its obligations regarding immigration.
Last week, Mr Salvini said Rome should increase its deportations of migrants. The hardline leader said the
Italian government would open more deportation centres, make agreements with origin countries. The
Italian government also wants a relocation of asylum-seekers EU-wide - a scheme already rejected by
some member states.
Mr Salvini says he is considering action against organisations rescuing migrants at sea. He has previously
accused them of being in cahoots with people-smugglers.
The government's critics say its plan to repatriate migrants is unworkable and risks fomenting racism and
politicising a humanitarian issue. A controversial deal between Italy's former government and authorities
in Libya has led to a drop in overall arrivals since last summer. However, Italian officials say 13,500
migrants have been registered so far this year.
[BBC]
10/06/2018
By Desmond D‘Sa and Patrick Bond 1
Last week‘s approval of a BRICS New Development Bank loan of $200million (R2.5billion) to expand
the Durban container terminal occurred without the Sandton-based bankers doing adequate consultation
or analysis.
This is not only unacceptable in a democratic society, especially for such an important and controversial
project, it also makes a mockery of claims the Brazil-Russia-India-China-South Africa (BRICS) bloc acts
differently from arrogant Washington bankers.
1 Desmond D‘Sa is co-ordinator of the South Durban Community Environmental Alliance (SDCEA) and a
2014 Goldman Environmental Award recipient. Patrick Bond teaches political economy at Wits School of
Governance, is an honorary professor at UKZN‘s School of Built Environment and Development Studies,
and authored Politics of Climate Justice (2012) and Unsustainable South Africa (2002).
The Transnet container terminal in Durban
For decades, the South Durban Community Environmental Alliance (SDCEA), with members from all
races and classes, has opposed the ultra-polluting, port-petrochemical complex. Container trucks are
especially damaging, with one careening off Field‘s Hill in 2012, killing two dozen kombi passengers -
just one of an annual average 7000 truck crashes in Durban.
SDCEA is opposed to the massive truck logistics park proposed for the Clairwood Racecourse, due to its
threat to nearby schoolchildren‘s safety.
Although concessions were belatedly won from Engen, BP and Shell on long-overdue sulphur scrubbing
at the continent‘s largest refinery complex, it was not long ago that Merebank‘s Settlers Primary School
had a 52% rate of asthma, the highest recorded at any school. Leukaemia is still a South Durban
pandemic, with rates 24 times the national average.
Nevertheless, Transnet‘s new R24bn pipeline anticipates doubling both refining and Durban-
Johannesburg oil transport capacity. Four multinational corporations - Italy‘s ENI, Norway‘s Statoil,
ExxonMobil and Sasol - are doing exploratory oil and gas drilling 4km deep in the dangerous Agulhas
current offshore of Durban.
This expansion is occurring not only when SDCEA demands a local fossil-fuel detox, but so does the
world, due to the looming catastrophe of climate change. Evidence is growing ever more obvious,
especially in damage to Transnet‘s own Durban facilities during last October‘s super-storm: a ship lost its
moorings and blocked the harbour, and overboard containers let loose 49 tons of plastic nurdles, which
continue to destroy marine life.
Transnet‘s oil pipeline was originally budgeted at just R6bn. In addition to incompetence in mega-project
design - as even then State Enterprises minister Malusi Gigaba confessed in 7 Port & Shipping News
23/18 (04 – 10 Jun 2018) Uwe Breitling - Port, Transport & Training Consultant
2013 - one reason for massive cost over-runs was the line‘s re-routing from the white areas of Hillcrest
and Kloof to South Durban‘s black neighbourhoods. SDCEA is opposed to Transnet‘s environmental
racism.
Moreover, the UKZN Centre for Civil Society and Birdlife SA also challenged Transnet‘s environmental
impact assessments in 2012-14, due to historic climate denialism and the harbour‘s ecological
degradation, forcing further delays until Transnet reworked its proposal - but still not to the critics‘
satisfaction. The likely collapse of the large sandbar near the container terminal will demolish vital bird
and marine breeding grounds.
Revelations
In addition, ordinary citizens now care much more about Transnet malgovernance. Few were surprised at
last weekend‘s revelations: further fraud associated with chief executive Siyabonga Gama‘s attempted
R1bn illegal procurement contract with the German firm SAP, a confessed ally of the Guptas in other
improper deals.
BRICS bankers may need reminding that Transnet got a loan of $5bn from the China Development Bank
during the 2013 BRICS summit in Durban. Gama and Transnet‘s then chief executive Brian Molefe
contracted Chinese state-owned Shanghai Zhenhua Heavy Industries to build the world‘s most over-
priced container cranes, which included pay-offs to the Gupta brothers‘ empire. Also, thanks to the loan,
South China Rail supplied locomotives, but with 21% kickbacks to the Guptas worth more than
$400m.
These sweet deals are economically irrational. ―Blue economy‖ job creation promises don‘t hold water
here, for port expansion typically includes ―4th Industrial Revolution‖ robotics; the new mega-ships that
carry upwards of 10000 containers now have fewer than 20 crew.
Durban is already one of the world‘s most expensive ports for container handling, even before an
expensive new foreign loan for overpriced infrastructure is factored in. Transnet also fails to consider
rising world economic volatility - such as Donald Trump‘s protectionism against SA steel, aluminium
and car exports - and the general downturn in world trade (measured as a share of GDP since the 2007
peak).
For example, according to TradingEconomics.com, total South African imports had risen from 18% of
GDP in 1994 to 37% of GDP in 2009, but then fell to 30% last year. This is a problem shared by all the
BRICS, measured as both imports and exports as a share of GDP in 2017: Brazil dropped from its historic
peak of 30% in 1994 to 25%; Russia from 68% in 2000 to 45%; India from 56% in 2012 to 40%; and
China from 68% in 2006 to 38%; and South Africa from 72% in 2009 to 61%.
Perhaps unaware of these trends, the 2012 National Development Plan insisted on expanding the port-
petrochemical complex all the way into the old airport - as a new ―Dig Out Port‖ - and now needs a major
rethink. In 2016, when digging was meant to commence, Transnet was forced to announce a delay until
2032 due to flat shipping demand and sky-high costs.
Transnet‘s dollar-denominated loan will add to South Africa‘s potentially unrepayable foreign debt,
which recently rose to more than 50% of GDP for the first time ever. Severe repayment pressures are
expected by Treasury within a year. Indeed this loan - like the $3.75bn World Bank loan to fund the
Medupi coal-fired power plant, which SDCEA led national opposition to in 2010 - should be declared
Shipping emissions: Chief executive of Mitsui OSK Line says $50 billion cost of green fuel
rules risk bankruptcy
―odious debt‖, for which a more democratic future government will declare in ―default‖ due to lender
liability, corruption and poor planning.
Last week, Finance Minister Nhlanhla Nene became chairperson of the BRICS Bank. Will he be fair to
poor and working people, and a responsible steward of our super-stressed environment? In 2014-15, the
only year he has so far overseen the content of the Treasury‘s budget, Nene cut spending on social
programmes and climate change mitigation, and allowed rich South Africans to increase their annual
capital flight from R4m to R10m.
On the other hand, Nene laudably fought against the R1.4trillion Rosatom nuclear reactor deal in 2015,
when that appeared imminent thanks to memorandums of understanding Jacob Zuma signed at the
BRICS summit in Ufa that year. As a result, in December 2015 he was notoriously fired - supposedly to
become the BRICS bank‘s local branch manager. That position was only a fig-leaf, and never
materialised.
Nene should very quickly come up to speed and learn why the Bank‘s Africa Regional Centre in Sandton
was slated by Auditor-General Kimi Makwetu on grounds of R2.5m in ―fruitless and wasteful
expenditure‖ last November. The employees there failed to even bother checking Google, where they
would have learned about ongoing SDCEA protests against Transnet. Instead, BRICS bankers may be
beholden to the BRICS Business Council, whose five South African members include Gama and
Mediterranean Shipping Company director Sello Rasethaba.
SDCEA will be protesting this loan and other features of corruption, maldevelopment and climate change
at the BRICS Business Council when it visits Durban, and also the BRICS heads of state when they go to
Sandton in late July. Similar protests in 2013, when BRICS leaders were at the Luthuli International
Convention Centre, apparently did not work - not even enough to get consultation on the $200m loan - so
activists must redouble their efforts and society must be vigilant against ongoing residues of these Zupta-
style mega-projects.
[Independent Online]
10/06/2018
By Josh Spero, Transport Correspondent
New environmental rules for marine fuels could cost the shipping industry $50bn and drive many
operators out of business, the chief executive of one of the world‘s largest container shipping companies
has warned.
―We‘re all going to go bust,‖ Junichiro Ikeda, president and chief executive of Japan‘s Mitsui OSK Lines,
told the Financial Times in summing up his assessment of a fuel emission cap if the industry is unable to
pass on the cost.
Mr Ikeda also weighed in on President Donald Trump‘s steel and aluminium tariffs and trade dispute with
China, expressing his concern about a ―tit-for-tat‖ escalation that brings ―a possibility that cargo
volume is going to shrink dramatically‖.
To curb emissions from ships, the International Maritime Organization (IMO) has decided to cap sulphur
content in marine fuel oil, cutting the limit from 3.5 per cent to 0.5 per cent in 2020. The timing of the
cap was brought forward after a study by Finland found that without it there could be 570,000 premature
deaths from air pollution between 2020 and 2025.
Ship owners will either have to switch to more expensive, higher-quality marine fuel, invest in emissions-
cleaning systems referred to as ―scrubbers‖ or use alternative fuels such as liquefied natural gas.
Jack Jordan, an editor at information service S&P Global Platts, said ship owners were having to choose a
strategy ―with next-to-zero concrete information available, and the ones that make the wrong choice
could be driven out of business in the early 2020s‖.
This uncertainty is reflected in cost estimates. In 2016, the OECD predicted the cost of the cap for
container shipping would be $5bn-$30bn, while last year consultancy Wood Mackenzie said it could be
up to $60bn.
High-sulphur bunker fuel, which shipping companies use at present, is about $420 per metric tonne; low-
sulphur oil is around $630 per metric tonne. Mr Ikeda said he expected the difference to rise to as much
as $300. He said ―society as a whole‖ should help to fund the move to low-sulphur fuel. Customers must
understand ―that this [cap] is contributing to the health of the globe‖ and thus their costs will rise.
He added that the extra cost — if passed on to customers — would be ―pretty tiny, compared to the value
of the cargo‖.
In October 2016, Mitsui joined two of its local rivals to establish a joint venture for their container
shipping businesses. The result, Ocean Network Express, is the fifth biggest in the world, a consolidation
which Mr Ikeda said would contribute to the ―stabilisation‖ of the market.
Sluggish trade growth and overcapacity had hit the sector hard. Hanjin Shipping, South Korea‘s biggest
container line, went into bankruptcy in August 2016. Mr Ikeda said he could not foresee much more
consolidation, not least because smaller players in South Korea and Taiwan received state subsidies, a
situation he called unfair.
One area which Mr Ikeda said Mitsui was exploring was autonomous navigation or self-driving ships, in
a project with Rolls-Royce. He said full autonomy was not a near-term prospect, but added that Mitsui
was developing individual measures such as a ―virtual reality projection of where the ship was going‖ on
the bow window.
Mitsui had revenue of Y1.5tn ($13.4bn) in 2017, a fall of 12 per cent on the previous year, but it made a
pre-tax profit of Y23bn ($207m), compared with a Y154bn loss the year before.
[Financial Times]
Oil & gas shipping: Bunker fuel surcharges not an option for tanker owners in glutted
market
01/06/2018
The Angolan government plans to negotiate the termination of the concession contract for the construction
of the Caio port in Cabinda, granted to Caioporto. A commission for that purpose was created by
presidential dispatch no. 66/18, of 30 May, according to the international press.
The creation of this negotiating commission, to be coordinated by the Ministry of Transport, is a summary
of the presidential dispatch involving Caioporto, whose main shareholder is Swiss-Angolan businessman
Jean-Claude Bastos de Morais, investigated by the Angolan authorities about management of assets of the
Angolan Sovereign Fund.
The Swiss-Angolan businessman, president and founder of Quantum Global, who managed more than
US$3 billion of the US$5 billion in assets of the Angola Sovereign Fund, was charged last week and
prevented from leaving Angola after questioning at the National Directorate of Investigation and Criminal
Action of the Attorney General‘s Office (PGR), according to the local press.
Read more: Stealing with Presidential Decrees [14 de March de 2017]
The construction of the port, valued at US$831.9 million, was included in the China Credit Line, with the
Angolan State bearing 85% of the cost of the contract and the concessionaire the remaining 15% or
US$124.8 million.
Construction of the port, in Caio Litoral, will be carried out in three phases, the first of which is the
construction of port infrastructure and a cargo service area of 100 hectares and a 775-metre pier. The
China Road and Bridge Corporation (CBRC) has been hired to carry out the contract.
[Macauhub]
08/06/2018
Amid surging bunker fuel costs container carriers are resorting to bunker surcharges to recover costs, but
owners in the tankers market facing the same problem are finding it much more difficult to introduce
similar measures because of the glut of vessels in the market.
With IFO 380 CST bunker fuel prices in some ports having risen more than 40% year on year, this week
has seen Japanese container carriers Ocean Network Express, or ONE, join a growing list of carriers
worldwide to impose a bunker surcharge. "ONE has encountered progressive and significant inflation of
fuel costs over recent months," it said in a statement, adding that it had been "forced to respond" by
adjusting its approach to bunker related pricing components.
France's CMA CGM has announced a $55/TEU surcharge for dry cargo, Israel-based ZIM introduced
surcharges ranging from $18 to $65/TEU and the Mediterranean Shipping Company announced an
undetermined surcharge in the past few weeks. Hapag-Lloyd and Maersk have responded similarly.
Terminal operators Angola: Government negotiates the termination of the concession
contract awarded to Caioporto
"The increase in bunker price in 2018 has been significantly higher than what had been expected and has
now reached a level of $440/mt in Europe, the highest since 2014," Maersk Line said in a statement in
May.
"It is no longer possible for us to recover bunker costs through the standard bunker adjustment factors,"
Maersk said, adding that it was introducing an emergency bunker surcharge effective June 1 for "non-
regulated corridors" and July 1 for regulated corridors. Regulated corridors include imports/exports from
the US, Puerto Rico, American Samoa, Colombia and Taiwan.
While the containers shipping is opting for such bunker surcharges, the tanker industry doesn't have much
of a choice, however. Sources in the tanker market said that such surcharges just aren't possible in the
segment given it is currently very much a "charterers market". Owners are reeling under the pressure of
high bunker prices but unable to pass them on to the charterers due to ample supply of tankers the latter
can choose from.
"It is a falling [freight] market though the bunkers are still steady," a chartering source in Tokyo said in
the context of eroding earnings at a time when freight rates are not keeping pace with the higher fuel
costs.
On several tanker routes the freight is governed by the Worldscale rates, for which the dollar per metric
ton amount basis 100 Worldscale points is set on a calendar year basis, taking into account the bunker
prices of the preceding October-to-September period.
The latest spike in bunker prices will only be reflected in next year's Worldscale rates and until then
tanker owners' ability to pass on the higher costs to charterers will hinge on the supply and demand of
tankers of various sizes.
"We are now putting up stiff resistance and not agreeing to offer ships at lower rates," one chartering
manager with a Long-Range tanker owner said.
Daily earnings for owners are currently around $11,000 for LR2s and $7,000 for LR1s on the Persian
Gulf-Japan routes, which is barely enough to cover operating costs, sources said. On these routes, LR2s
and LR1s typically carry cargoes of around 75,000 mt and 55,000 mt respectively, though the volumes
are higher for westbound voyages.
Even on those tanker routes where freight is fixed on a lumpsum basis rather than Worldscale, the excess
supply has created a situation where owners have to significantly absorb the incremental costs, analysts
said.
More costs ahead
Shippers might have to brace for more surcharges as a plethora of upcoming environmental rules in
shipping including the International Maritime Organization's 2020 global sulfur limit rule for marine
fuels loom.
Bunker fuel costs globally could rise by as much as $60 billion annually from 2020 if there is strict
compliance with the International Maritime Organization's 0.5% global sulfur cap, a mass shift to marine
gasoil and a low uptake in scrubber technology, global consulting firm Wood Mackenzie said last year.
Printed wood to be “global turning point” for sustainable manufacturing
:
More recently, some industry sources forecast a differential of as much as $400/mt between 0.5% sulfur
bunkers and conventional fuel oil around 2019, as the current estimates for alternatives such as LNG for
bunkering use still leave the bulk of the marine fuel demand relying on LSFO and other 0.5% compliant
options.
Surcharges could temper the impact of rising operating costs for shipowners, sources said. However, "if
the trajectory of rising bunker prices continues and carriers are not able to pass on costs, then slow
steaming may become more popular," said one source.
[Platts]
08/06/2018
Researchers from the Singapore University of Technology and Design (SUTD) have developed a
technique for printing objects using cellulose, one of the main polymers occurring in wood.
They claim it will revolutionise manufacturing by providing a cheap, renewable and biodegradable
alternative to plastic, creating conditions for a circular economy.
―We believe the results reported here represent a turning point for global manufacturing with broader
impact on multiple areas ranging from material science, environmental engineering, automation and the
economy,‖ said Assistant Professor Stylianos Dritsas, team joint leader. ―We are now at the stage of
seeking industrial collaborators to bring this technology from the laboratory to the world.‖
Cellulose offers a cheap and biodegradable alternative to plastic for printing objects, and the material
produced can be further processed in the same way as wood, by drilling, sawing and sanding.
SUDT has succeeded in using the material to make a chair and a series of cellulose spheres. In other
experiments, the team made a 1.2m-long turbine blade entirely out of its new material.
The goal of printing with cellulose is being pursued by a number of universities – for example, the
Massachusetts Institute of Technology last year proposed using cellulose acetate, a derivative of
cellulose used in cigarette filters, as a printing material.
However, SUDT claims in the paper Large-scale additive manufacturing with bioinspired cellulosic
materials, published in the scientific journal Nature, that it has found a superior low-cost, low-pollution
solution that does not require any involvement with plastics.
The Singaporean method involved the introduction of small amounts of chitin between the fibres of
cellulose. Chitin is kind of starch that forms the main component of insect exoskeletons and the cell
walls of fungus. The team found that chitin creates a strong, lightweight, inexpensive substance, which it
calls a ―fungus-like adhesive material‖, or FLAM.
The team comments in their paper: ―This material is completely ecologically sustainable as no organic
solvents or synthetic plastics are used to make it. It is scalable and can be reproduced anywhere without
specialised facilities. FLAM is also fully biodegradable in natural conditions and outside composting
facilities.‖
Marine pollution Mediterranean: Summer tourists cause a 40% spike in plastic marine litter
Javier Gomez Fernandez, team co-leader, said: ―We believe this first large-scale additive manufacturing
process with the most ubiquitous biological polymers on earth will be the catalyst for the transition to
environmentally benign and circular manufacturing models, where materials are produced, used, and
degraded in closed regional systems.
―This reproduction and manufacturing with the material composition found in the oomycete wall, namely
unmodified cellulose, small amounts of chitosan – the second most abundant organic molecule on earth –
and low concentrated acetic acid, is probably one of the most successful technological achievements in
the field of bioinspired materials."
According to the researchers, the cost of FLAM is in the range of commodity plastics and 10 times lower
than the cost of common filaments for 3D printing, such as polylactic acid. The researchers add that they
have developed an additive manufacturing technique specific for the material.
[Global Construction Review]
08/06/2018
By Sandra Laville
Tourists are being urged to reduce their use of plastic as new figures reveal holidaymakers cause a 40%
spike in marine litter in the Mediterranean each summer.
Nearly all the waste created by the surge in tourism over the summer months in countries like Italy, France
and Turkey is plastic litter, says WWF in a new report. In a matter of weeks over the holiday season the
rise in plastic marine pollution contributes to the estimated 150m tonnes of plastic in the ocean.
WWF said in its report ―Out of the Plastic Trap: Saving the Mediterranean from plastic pollution‖ that the
majority of plastic waste polluting the Mediterranean Sea comes from Turkey and Spain, followed by Italy,
Egypt and France – countries to which more than 34 million British holidaymakers are preparing to travel
this year.
Tanya Steele, chief executive of WWF, said holidaymakers were leaving behind a toxic legacy of plastic
waste. ―The birds, fish and turtles of the Mediterranean are choking on plastic … plastic is ending up in the
fish and seafood we eat on holiday.
―We‘re asking people to think about how they can cut down on the amount of single-use plastic they use
and throw away on holiday,‖ she said.
Steele urges holidaymakers to drink tap water where it is safe to do so, refuse plastic straws and skip the
purchase of inflatable pool toys. ―We can all be part of the solution and not the problem,‖ she said.
In Europe plastics account for 95% of the waste in the open sea, posing a major threat to marine life, says
WWF. After China, Europe is the second largest producer of plastic in the world, producing 27m tonnes of
plastic waste. The continent dumps up to an estimated 500,000 tonnes of macroplastics and 130,000 tonnes
of microplastics in the sea every year, the report says.
But delays and gaps in plastic waste management in most Mediterranean countries mean only a third of the
60m tonnes of plastic produced is recycled. Half of all plastic waste in Italy, France and Spain ends up in
landfills.
Home to almost 25,000 plant and animal species – of which 60% are unique to the region – the
Mediterranean holds only 1% of the world‘s water but contains 7% of all of the world‘s microplastic
waste. Plastics have also been found in oysters and mussels, while crisp packets and cigarettes have been
found in large fish, WWF says.
Plastic waste remains in the environment for hundreds of years. Every plastic cup left by a tourist on a
beach takes 50 years to break down, every plastic bag takes 20 years, and a fishing line can remain in the
sea for up to 600 years, the report said.
The Mediterranean, semi-enclosed by three continents and home to intense human activity, creates a trap
for plastics which today account for 95% of marine litter in the sea.
Marine pollution: Greenpeace researchers uncover microplastic contamination in Antarctic
waters
But Europe is in danger of being left behind on action against single-use plastic by emerging economies. In
the most ambitious global action yet to curb plastic waste, India this week announced it was banning all
single use plastics by 2022.
[The Guardian]
08/06/2018
By Jennifer Johnson
Greenpeace researchers have discovered the presence of microplastic pollution in the majority of water and
snow samples collected during a recent Antarctic expedition.
The particles, which are generated by the breakdown of man-made products, were found in nine of 17
water samples gathered during a research excursion to Earth‘s southernmost continent from January to
March this year.
Greenpeace was studying little-known Antarctic seabed ecosystems as part of a campaign to create an
ocean sanctuary in the region. The sanctuary is being proposed by the EU and would cover 1.8 million
square kilometres — an area more than five times the size of Germany.
―These results show that even the most remote habitats of the Antarctic are contaminated with microplastic
waste and persistent hazardous chemicals,‖ says Frida Bengtsson of Greenpeace‘s Protect the Antarctic
campaign.
―We need action at source, to stop these pollutants ending up in the Antarctic in the first place, and we
need an Antarctic Ocean Sanctuary to give space for penguins, whales and the entire ecosystem to recover
from the pressures they‘re facing.‖
Terminal operators: Container terminals buffeted by volatility
Seven of the nine snow samples the researchers collected contained concentrations of chemicals known as
per- and polyfluorinated alkylated substances, or PFASs. These pollutants are commonly used in industrial
processes and consumer products, and have been linked to health issues in wildlife.
The decision to create the Antarctic Ocean protected zone will be taken at the next meeting of the EU‘s
Antarctic Ocean Commission in October.
[The Marine Professional]
08/06/2018
By Chris Dupin
Container terminals have seen recovering demand and have worked to reduce costs, says Drewry.
Container terminal operators are having to grapple with increased market volatility after being buffeted by
several other forces that amount to a ―perfect storm,‖ says Drewry. About 18 months ago, the
London-based consultants identified four related trends impacting terminals: softening demand, higher
operating and capital costs due to bigger ships, increased business risk from the reduction in the number of
liner alliances and carriers demanding lower prices.
Speaking during a webinar this week, Neil Davidson, Drewry‘s senior analyst of ports and terminals, said
the industry has been able to maintain earnings before interest, taxes, depreciation and amortization
(EBITDA) for several reasons, including a recovery in global demand, from stagnation in 2016 to growth
of more than 6 percent in 2017. That growth is continuing, but he said possible trade wars and sanctions
are ―creating clouds on the horizon.‖
He said terminals have implemented cost-savings initiatives to mitigate operating costs and been able to
resist carrier pressure for lower prices because large ships have less choice in which terminals they can
call. As ships have grown in size, berths at some terminals can no longer accommodate them and in some
cases are becoming obsolete.
That can particularly be a problem at some older ports and terminals, though Davidson said ―what is
always surprising is how big ships are still being handled in ports by hook or by crook, by stowage,
through the port rotation.‖ For example, he said carriers are working around draft restrictions on the Elbe
River leading to the Port of Hamburg.
He also noted terminal capacity is being effectively shrunk by the volume peaks when large ships
discharge huge numbers of containers into a terminal. He also said higher- paying ―gateway traffic‖ is
growing faster than lower-paying transshipment cargo.
Davidson highlighted the growing size of ships in the Asia-to-East Coast North America trade following
the expansion of the Panama Canal. (The Port of New York and New Jersey also just marked the one-year
anniversary of the raising of the Bayonne Bridge, which allows larger ships to access container terminals
in Newark and Elizabeth, N.J., and on Staten Island.)
―Most of the East Coast North American ports have put a lot of effort into being able to accommodate the
bigger ships so the neo-Panamax vessels of 14,500 TEUs can call in New York and Norfolk, Savannah,
Terminal operators India: Visakhapatnam Port Trust sets deadline for expansion of DP
World container terminal
etc. In most places the ports are ready. In many cases there are often work-arounds depending on where in
the rotation the call is,‖ he said, explaining the ship usually is at maximum draft at the first port of call in
or last port of call out and not drawing as much water in the middle of a rotation.
He said, however, ―risk is clearly on the up‖ with the largest carriers organizing themselves into just three
global liner alliances and mergers and acquisitions. That has led to market share volatility. As an example
he pointed to Southeast Asian transshipment ports where he said business shifted away from Singapore to
Port Klang and Tanjung Pelepas in 2015, but then swung back from Port Klang to Singapore last year.
He said returns on invested capital have trended downward in the terminal business since 2012, which he
said may be the result of the maturing of the industry. He said that maturity is reflected in lower stock
prices for some publicly traded terminal operators. The lower valuation for terminal operators is shown by
a narrowing gap between the price/earnings ratio of an index Drewry has constructed from 11 publicly
traded terminal companies and the broader MCSI Emerging Markets Index.
Davidson said ―hybrid‖ terminal operators — that is operators owned by carriers — are becoming more
prominent. But he noted individual carriers are not in complete control of what ports and terminals they
use because they are members of alliances, he noted.
There also is an increase in the number of joint-venture agreements between shipping lines and terminal
operators that are not affiliated with shipping lines.
That potentially could lead to conflict. He noted carriers want to pay as little as possible for terminal
services while a stevedoring company may seek to generate as much revenue as possible. As an example,
he pointed to Hyundai‘s recent investment in a Busan terminal. He said Hyundai publicly stated that it
hoped to pay less for terminal handling, but that its partner is PSA, ―who is primarily a profit maximizer.
It makes for some interesting discussions in the boardroom, I should think.‖
Terminal operators also are focusing less on building new terminals and more on filling up existing
facilities, mergers and acquisitions, and forming alliances within ports.
They also are diversifying into areas such as intermodal transportation, inland terminals and free trade
zones, though Davidson says this is more common in Europe and the Middle East than in North America.
China Merchants Holding has invested in industrial zones in cities. This is a way for terminal companies
to spread risk and find new sources of revenue and develop closer relationships with shippers.
[American Shipper]
08/06/2018
Visakha Container Terminal Private Limited (VCTPL), a joint venture between United Liner Agency and
Dubai Port World International, has been given until June 30 to start expanding the container handling
facility.
Failure to do so may result in the Visakhapatnam Port Trust cancelling the concession agreement and
offering it to fresh bidders.
The town already has oil and gas loading terminals, built since 2013, that feed pipelines transporting the
fuel directly to YuTnenramnipnraolvoinpcee riantWoresstUer.nS.C:hDinoac. kAwroairlkleinrkuins ipolannsnesdtitfolincognaneucttotmheactoionntainer port.
The concession agreement was signed in December 2014. VCTPL started operations in 2003 as a BOT
operator of Visakhapatnam port. The terminal has a depth of 16.5 metres, quay length of 450 metres and
channel width of 220 metres.
The projected cost of the capacity expansion project, which was originally estimated at INR633.11 crore
(US$94 million), was calculated to have risen to INR820 crore in 2017. Sources at VCTPL cited lack of
road connectivity to the project site as one of the reasons for the delay in the commencement of the
terminal expansion work, reported The Hindu.
The present terminal has a capacity to handle 700,000 TEU, which is expected to increase by 540,000
TEU once the expansion project is completed. VCTPL during 2017-18 handled a throughput of 366,000
TEU, representing a year-on-year increase of six per cent.
[Hong Kong Shipping Gazette]
08/06/2018
By Gary Ferrulli, CEO of Global Logistics & Transport Consulting
Dockworker unions in the United States have been and will continue to be the ―elephant in the room‖
when it comes to port terminal enhancements, especially on the West Coast.
Hailey Desormeaux‘s recent article ―What‘s the payoff from terminal automation?‖ hits on some key
issues and makes good points. But the elephant in the room and key reason why we don‘t have 21st
century port facilities in the United States is that labor doesn‘t want them, primarily because they fear
losing more headcount to modern, automated operations.
There are two subtly — but importantly — different sets of circumstances in the U.S. that affect the ports
and terminals, one on each coast. The most problematic conditions exist on the West Coast, where a 1938
National Labor Relations Board decision has led to a virtual monopoly on all vessel work by the
International Longshore and Warehouse Union. That decision, which gave the ILWU sole jurisdiction over
who works vessels at all West Coast ports, had three major consequences:
1) The ILWU dockworkers are the highest paid longshore workers in the world, which is fine until
you know that …
2) They are also by far the least productive in the modern world, 33 percent below their U.S. East
and Gulf Coast counterparts and 75 percent below multiple facilities in Japan, China, Rotterdam
and Jebel Ali. No West Coast ports rank in the top 15 in the world in terms of production and they
even lag behind maritime ―powerhouse‖ Grenada.
3) Negotiations with the ILWU are challenging, to say the least. How do you negotiate with a
monopoly?
The real reason 20,000-TEU containerships don‘t call here is because the current facilities can‘t handle
them, and smart business people won‘t invest hundreds of millions of dollars to upgrade those facilities
and equipment only to see little or no gains in productivity. The partnership with labor is very one-sided,
especially on the West Coast.
U.S. East Coast ports and terminals, on the other hand, have made some progress in productivity during the
past 10 years but still are not at world-class levels and won‘t be until the right equipment, systems and
processes are in place. But as with the ILWU, the International Longshoremen‘s Association has made it
abundantly clear that they oppose automation.
The difference is that not all East and Gulf Coast terminals are unionized, meaning that there are still a few
facilities that are not required to use ILA dockworkers and abide by ILA collective bargaining agreements.
In some cases, carriers have chosen to use those terminals, which puts pressure on the ILA to increase
efficiency and lower costs.
On the West Coast, however, with no competition, we see instances like in 2016, when every container
line left the Port of Portland because they couldn‘t deal with the ILWU local chapter there. The local
virtually didn‘t care and let them leave.
To be fair, there have been some improvements to systems at the terminal gate and yard equipment that has
increased efficiency at terminals. But what is needed to get terminal
productivity up to and beyond 40 moves per crane per hour goes far beyond that, including upgrading
cranes and other shore-side equipment. Only then will you see the larger ships coming in and being
worked efficiently and effectively, but therein lies the problem: It simply can‘t happen if labor doesn‘t
want it.
To put all this into context, global trade quadrupled between 1986 and 2006 and doubled between 2000
and 2006. Not coincidently, vessel sizes grew to handle the rapidly growing markets and provide far more
cost-effective operations. Almost simultaneously, port facilities in China, Japan, the UAE and Rotterdam
were upgraded to handle them. And they do, very efficiently in fact. Not so in the U.S. because the
necessary changes couldn‘t be made due to the known unwillingness of labor. Why spend the money?
Not many years ago, nearly 65 percent of all volumes in and out of the U.S. moved through West Coast
ports. Today, that figure is down to 50 percent. They have lost a huge share of the market to the U.S. East
Coast and Gulf ports but have hardly even reacted. They could be moving more volume and even adding to
their headcount if they were efficient and had fewer work stoppages, but instead have forced cargo owners
to change their supply chains to avoid unreliable and inefficient facilities on the West Coast.
Can this be addressed and fixed? In a word: hopefully.
There is an ongoing redevelopment project between the Port of Long Beach and the terminal operator
division of Hong Kong-based carrier OOCL at Middle Harbor that has resulted in some improvement in
productivity at the gate and elsewhere in the terminal, but not at the cranes. The port and carrier have spent
hundreds of millions of dollars on the project, which is 60 percent complete and scheduled to be fully
operational by 2020, with an expectation of increased productivity.
The ILWU is fully aware of the project; they visited Hong Kong years ago and were ―read in‖ to it. But
what happens in 2020? Will they produce 40 or 50 moves per hour per crane, as at other facilities around
the world? Only time will tell.
I refer to this as the elephant in the room because although these are well-known facts in the industry, they
are rarely discussed publicly. We see articles on labor and employers working on contract extensions,
typically covering issues like wages, benefits and the unions‘ opposition to automation, but hardly a word
on productivity.
Port development Asia: Ports under pressure after China ban on plastic and paper waste
We aren‘t approaching world-class levels of productivity, so the United States may never see the truly
large ships, other than as a publicity stunt as was the case when the 18,000-TEU CMA CGM Benjamin
Franklin visited the Port of Los Angeles more than two years ago.
Some may say, ―So what? We hear those mega-ships aren‘t that great; they create more congestion and
delays.‖ Look a lot closer at the results in China, Japan, Jebel Ali and Rotterdam, and you‘ll see they
function just fine.
At the end of the day, it‘s simple math. If you move 5 million TEUs through a port annually, with an
average of 8,000 TEUs per ship, that‘s 625 vessel calls. Up that to 12,000 TEUs per ship and it‘s 417
vessels. A 16,000-TEU average brings the number down to 313 vessel calls. It‘s the same 5 million TEUs
of cargo, but far fewer vessels required, which equates to far lower total vessel costs for carriers and their
customers. And all that is needed is more productive and efficient terminals.
The elephant in the room, however, is and will continue to be labor‘s staunch resistance to automation and
anything else it perceives as a threat to headcount.
[American Shipper]
08/06/2018
By Sam Whelan, Asia correspondent
Port operations in South-east Asia have come under increasing pressure from a build-up in scrap cargo,
following China‘s crackdown on imported waste.
In Vietnam, a dramatic increase in scrap-laden containers forced Ho Chi Minh City‘s overloaded Cat Lai
port to temporarily stop receiving plastic and paper waste on 1 June. In a letter to customers, terminal
operator Saigon Newport said handling operations had been ―seriously impacted‖ by 8,000 teu of
uncollected scrap cargo, resulting in temporary overcapacity. The terminal had previously restricted
imports for a month in a bid to clear the backlog, but to no avail.
The problem appears to be a lack of valid import permits for the cargo, with the customs department
clamping down on an increasing number of import violations this year, according to local media.
One local forwarder told The Loadstar the containers were being ―re-routed via Vietnam and then
smuggled via road into China‖. He claimed: ―This has caused a big problem as not all containers could be
transferred to China. Some traders are waiting to shift the containers to other countries. For example,
Chinese companies have opened or are building factories in other ASEAN countries, like Malaysia.‖
Roy Chau, general manager CH Robinson Vietnam, said the scrap shipments were exacerbating existing
port congestion at Cat Lai, one of Vietnam‘s busiest container gateways. ―In fact, plastic waste is not the
main issue affecting forwarding operations, as port congestion at Cat Lai happened for years due to
terminal infrastructure, traffic in the surrounding area, vessel delays and cargo weight limit for trucking,‖
he said.
Glenn Kong, general director at nearby Vietnam International Container Terminals (VICT), said VICT
had been unaffected since it had implemented policies to limit the dwell time of scrap containers. He
added: ―The recent Chinese ban on plastic imports continues its impact around the world. Scrap is being
Port development Brazil: Truck driver strike all but paralyses Santos throughput
diverted to other markets, particularly to many South-east Asian countries such as Malaysia and Vietnam.
However, tonnes of plastic waste will end up in landfill, due to an absence of anywhere else to send it.‖
Until this year, China was by far the biggest recipient of scrap, importing around half of the world‘s
plastic waste. However, a ban on plastic and a variety of other waste materials, announced last July, came
into force in January and was expanded in April. This left US and European exporters in particular
scrambling to find new markets.
US Census Bureau figures show recovered plastic exports to Vietnam in the first quarter were almost
double that of the same period last year. And in Thailand, an increase in scrap cargo arriving at Laem
Chabang has put pressure on authorities to ramp-up inspections. According to the Bangkok Post, local
police discovered 58 tonnes of illegal plastic from 35 countries.
A Laem Chabang-based port executive claimed there had been no impact from increased scrap cargo on
terminal operations so far, but Thai customs were stepping up inspections. ―My guess is that customs
around the region may be doing the same thing, as this is unlikely to be a problem confined to Thailand,‖
he added.
Shipping lines are also feeling the effects of China‘s change in policy. In its first-quarter report, Maersk
Line highlighted the ban as one reason Asian exports from the US and Europe had declined significantly.
And in an update sent to The Loadstar, the carrier said: ―We do see decreases on volumes of waste imports
into China.
―However, waste volumes to South-east Asia increased. Finished paper from South-east Asia to China
also increased as a sign of change in supply chains.‖
[The Loadstar]
08/06/2018
A strike by truck drivers in Brazil, which has lasted for more than a week, has badly affected exports
from the Port of Santos, which claims it has caused losses of $100m to the shipping sector. The claim was
made by the Organisation of Maritime Shipping Agencies of the State of São Paulo (Sindamar).
One bulk carrier had reportedly been waiting for five days prior to the arrival of its export shipment,
while other vessels had been forced to remain at anchor to wait for cargo.
container terminals at the port have been similarly impacted. They are now prioritising import containers,
given a lack of outbound box traffic brought about by the strike.
The owner-drivers began their strike on May 21 and show no signs of returning to work, despite
intervention by the national government; instead, they have formed a picket line on roads leading to the
terminals, effectively blocking the arrival of containers to the port. All the time, storage capacity within
the container terminals is shrinking, as import containers are no longer being removed from terminal
premises.
Sindamar says that only 20% of export cargo is being loaded. However, this is either transhipment traffic,
or containers already on site before the strike began. It reports that one vessel sailed from Santos 80%
Port development U.S.: Norfolk harbor to be deepened to 55 feet
Port development U.S.: Port of Los Angeles approved $1.3 billion budget
empty. Furthermore, many coastal shipping companies have had no cargo to transport for over a week.
[Port Strategy]
08/06/2018
The Virginia Port Authority has been granted approval to deepen the Norfolk harbour from 50 feet to 55
feet and to widen the ship channel of the Chesapeake Bay Bridge-Tunnel from 1,000 to 1,300 feet by
2024, to enable the port to be able to handle up to 19,000 TEU ships transiting through the Suez Canal.
"As part of our preliminary engineering work, we will be modelling and simulating 16,000, 18,000 and
even 19,000 TEU vessels to ensure the project is completed not just for the vessels calling today but for
the vessels calling well into the future," said chief public affairs officer Cathie Vick, who added the
design work is due to commence on July 1.
Once the work is completed the port of Virginia will become the deepest harbour on the US east coast.
The port of Virginia is one of several locations on the eastern seaboard preparing for the future, IHS
Media reported.
The port of Charleston is in the middle of a project to deepen its inner harbour to 52 feet and outer
harbour to 54 feet by the end of 2020. A deepening project at the port of Savannah is slated to be
completed in January 2020, bringing the depth of the inner harbour to 47 feet and the outer harbour to 49
feet during low tides.
Just as important is the construction to widen the navigational channel east of the Chesapeake Bay
Bridge Tunnel. The US Coast Guard currently stops marine traffic when a larger ship enters or exits the
port. The widening would allow unabated two-way traffic to resume and lift one of the restrictions that
can throw a vessel off schedule.
[Hong Kong Shipping Gazette]
08/06/2018
The port of Los Angeles has announced its $1.3 billion-dollar budget for 2018/19 has been approved by
the Los Angeles Board of Harbour Commissioners and has plans to improve terminals across the port.
The budget focuses on priorities set out earlier this year in the Port‘s revised 2018-2022 Strategic Plan,
which calls for a focus on growth-supporting infrastructure; security, supply chain efficiency and
sustainability; improved financial performance of port assets; and building strong relationships with Port
stakeholders.
In the approved budget, $91.0 million is dedicated to Capital Improvement Projects (CIP), a 6.9%
decrease over the previous year — of that amount, $31.6 million will go toward terminal improvements,
primarily focused on upgrades to better accommodate larger vessels and facilitate more efficient cargo-
handling processes.
The main terminals set for improvements are the port‘s liquid bulk facilities and the Everport, WWL
Port development U.S.: East coast dockworkers finally settle dispute over new employment
contract
Vehicle Services, YTI and the World Cruise Centre terminals. Another $10 million has been set for
transportation improvements that will be focused on optimizing rail and roadways for turnaround and
safety — and $4.7 million will be left for various security projects, including a new radio system and an
integrated Computer Aided Dispatch and Records Management System.
Along with the budget, the Port has released a five-year expenditure plan, including estimated total
project costs. The plan estimates approximately $550.5 million in spending on capital projects
throughout the Port over the five-year period starting from 2018.
[Port Technology International]
07/06/2018
By Alexander Whiteman
Shippers are breathing a sigh of relief after US east and Gulf coast dock workers reached ―tentative‖
agreement on a new six-year master contract, following years of tough negotiations.
The International Longshoremen‘s Association (ILA) announced the news yesterday, adding that the
agreement with the US Maritime Alliance (USMX) now needed to be ratified by its members. In a joint
broadcast, ILA president Harold Daggett and USMX chairman David Adam said: ―We have reached a
tentative agreement on a six-year master contract that is beneficial to both sides.‖
Animosity between the two parties came to a head in December, when they ended negotiations over
differences surrounding automation. Last year, Mr Daggett expressed his concerns over port automation,
issuing a letter to members that fired a warning shot across the bows of ports and terminals looking to
increase automation levels.
―I predict the issue of automation will dominate our contract talks,‖ he wrote, adding that he would not
allow his members to be subject to the same forces that had hit the steel industry. The ILA will not allow
automation to rip apart our livelihoods and destroy our jobs and families, and the ILA intends to let
management know that we are totally opposed to fully automated terminals.‖
But the agreement appears to have resolved the issue, and it looks likely that dockworkers will have a
new contract in place before the existing agreement expires in September. Both Mr Daggett and Mr
Adam have encouraged local chapters of the ILA to finalise local agreements by 10 July, in the lead-up
to the full ratification process. Pressure had been mounting over the past 12 months for a deal to be
finalised after dockworkers on the west coast extended their master deal until July 2022.
Chief executive of US-based forwarder American Global Logistics, Jon Slangerup, was quoted in The
Wall Street Journal as saying neither side had any choice but to reach an agreement. Mr Slangerup said:
―Given an agreement was reached on the west coast, the east really didn‘t have a choice but reach the
same kind of agreement or they would really be risking jobs and business.‖
[The Loadstar]
Port development: Protectionism blamed for global handling slowdown
07/06/2018
The UK's Freight Transport Association (FTA) and the heads of key ports on the EU side of the English
Channel are sounding the alarm about uncertainty over the terms of Britain's exit from the European
Union.
Prime Minister Theresa May's government has not yet reached a final agreement with the European
Commission on how (or whether) to implement inspections and customs duties on EU-UK trade once
Brexit is complete, nor on the trade policies they will follow during a two-year transition period. Less
than 300 days remain before Brexit takes effect and the transition begins.
―Details of whether or not the country will have a Transition/Implementation Period are still unclear,
there is still no decision on what Customs arrangements we will have from March 2019 onwards,"
warned FTA deputy CEO James Hookham in a statement. ―We keep getting told that all food and
agricultural exports to the Continent and Ireland will be checked at EU ports - but there is nowhere to
check them, and the system to check them does not exist."
Hookham said that the UK government had promised hauliers that "frictionless" trade would continue
post-Brexit under new agreements reached with the EU, and alleged that Downing Street had not
delivered. ―What is really making our members angry is that these real, legitimate concerns are simply
being dismissed by some members of the Government," he said. "This is a reckless attitude to take and is
playing chicken with crucial parts of the British economy and the livelihoods of the seven million
Britons in the industry."
The FTA's concerns are shared on the other side of the channel. According to Joachim Coens, the CEO
of the Port of Zeebrugge, the logistics industry needs certainty about the post-Brexit landscape, and soon.
"The transition period of two years is fine, provided we know from the beginning of that transition period
what we have to do," he said, addressing the UK Parliament's Treasury committee. "If this transition
period means uncertainty during the transition period, then we will never be ready, never. It is not
possible."
UK maritime associations have focused their Brexit advocacy efforts on the potential hurdles at ro-ro
ports, which handle high volumes of trade across the English Channel and the Irish Sea. In written
testimony submitted Monday, Jon Thompson, the First Permanent Secretary for Her Majesty's Revenue
& Customs, confirmed that a proposed system of "highly streamlined" customs facilitation at some sites
"may not be ready in full by January 2021, e.g. for RoRo [cargo] where action needs to be taken by other
Member States."
[Maritime Executive]
07/06/2018
Trade protectionism has been blamed for an overall slowdown in volumes at world ports in the first
quarter of this year, with the throughput growth rate down 2.9 percentage points year-on-year.
That‘s according to the Shanghai International Shipping Institute (SISI), who also cited ―annual
Port development UK: Warnings intensify over Brexit's uncertainties
Oceans: Call to make illegal fishing a crime
periodical factors‖ as a reason for the growth rate drop on last year‘s figure. However, the Institute's
Global Port Development Report for Q1 2018, released in May, also showed that the cargo throughput
itself of the major ports globally maintained growth in the first three months of this year, increasing by
3.4% year-on-year.
The report explained that in Q1 of this year, the world‘s economy displayed clearer recovery signals,
while manufacturing, consumption and investment continued to gain steam. The key world ports‘
container throughput increased 6% year-on-year to 77.2m teu, and global terminal operators‘ overall
operation stayed stable, with increasingly diversified investment.
All major terminal operators marked slower growth in equity throughput in Q1 2018 in comparison to
Q1 2017 — with the exception of COSCO Shipping, which saw a hike in equity throughput from that
period last year.
SISI revealed that the major Chinese ports handled 3.1bn tonnes of cargo in Q1 2018, but the growth rate
fell by 4.1 percentage points — the lowest since Q4 2016. The growth rate of China‘s cargo throughput
for domestic trade gradually slowed down, decreasing by 5.8 percentage points in Q1 2018, but Chinese
ports above a designated size handled 1bn tonnes of cargoes for foreign trade, a rise of 5% year-on-year.
Meanwhile, major Australian ports‘ cargo throughput increased by 7.6% in the first quarter of this year,
while container throughput of major container ports in the Americas increased 4.8% year-on-year to
8.3m teu.
Additionally, during Q1 2018, the global dry bulk trade increased and world ports‘ overall coal
throughput continued to go up, but the international iron ore market weakened and global ports‘ overall
iron ore throughput fell. The major global ports also displayed a polarisation trend regarding liquid bulk
cargo throughput in the first quarter of this year.
According to SISI, in the first quarter of this year, COSCO Shipping Ports saw a total container
throughput of 22.7m teu, increasing by 14.7% year-on-year, and also marked 7.7m teu of equity
throughput (a year-on-year increase of 15.73%).
Ningbo-Zhoushan, Shanghai and Singapore, in descending order, were the top three ports in the world
for cargo throughput in Q1 2018, all maintaining their places from the Q1 2017 ranking for this factor.
[Port Strategy]
07/06/2018
By Melanie Barrin
Ocean conservation group urges world governments to step up action on rule-breakers devastating the
planet‘s fish stocks.
The modern-day pirate does not navigate the tides of the waters armed with a sharpened sword or a skull
and crossbones flag floating on the mast of his vessel anymore. Nowadays,
Illegal, Unreported and Unregulated (IUU) fishing activities have become one of the ocean‘s biggest
enemies. However, according to one environmental advocacy group, legal measures and punishments are
simply not going far enough to deter such piracy happening around the world.
Credit: Shutterstock
Oceana, the largest international advocacy organisation founded to focus solely on ocean conservation,
has used the occasion of the 45th celebration of World Environment Day and the inauguration of
International Day for the Fight Against IUU Fishing (5 June) to push nations to do far more than simply
slap wrists and issue fines. Lasse Gustavsson, executive director of Oceana in Europe, issued a statement
urging governments around the world to make illegal fishing an environmental crime. ‗Countries need to
recognise that large-scale illegal fishing is organised crime and should be dealt with as such,‘ he says.
‗Pirates should be behind bars, not sailing free on the world‘s oceans.‘
The term IUU is used to define a wide range of fishing practices that operate outside the law.
Specifically, the European Commission defines fishing as follows:
• Illegal – if it takes place without authorisation and violates conservation and management measures as
well as national laws and international obligations
• Unreported – if the catches are not accounted for
• Unregulated – when fishing vessels sport no nationality and are not identifiable, in other words when
they do not possess a matriculation number nor figure on any authorised fishing vessels list
Credit: Shutterstock
According to the Food and Agricultural Organization of the United Nations (FAO), 92.6 million tonnes
of fish were captured legally in 2015 (this being the most up to date statistical evidence available on
global annual fish capture production). However, the FAO also estimates that another 26 million tonnes
of fish are extracted each year from the Earth‘s aquatic environments as a result of IUU fishing practices.
If this estimation is correct, it would mean that 20 per cent (or one in every five) of all fish caught
annually are captured through unlawful processes.
The costs of IUU fishing are numerous. First of all, it diverts approximately £17billion away from the
global economy every year. This loss most affects the livelihoods of fishing communities that abide by
the law. Furthermore, IUU fishing activities also divert resources away from local, small-scale fishing
industries in developing countries, exacerbating food insecurity and poverty in what are already some of
the most vulnerable regions of the world. IUU fishing also greatly undermines conservation and fish
stock management efforts and is often associated with more criminal activities such as slave labour and
other human rights violations.
Fighting IUU fishing practices has become a top international priority and one of the aims set by the
UN‘s Sustainable Development Goals back in 2015 was to end such destructive fishing practices by 2020
(Goal 14: ‗Conserve and sustainably use the oceans, seas and marine resources for sustainable
development‘). Back in November 2009, the Agreement on Port State Measures to Prevent, Deter and
Eliminate Illegal, Unreported and Unregulated Fishing (PSMA) was approved by the FAO at its 36th
session. It aims to reduce the incentive to engage in IUU fishing activities by preventing vessels
practicing unlawful capture methods from gaining access to ports and thus landing their catches. The
PSMA formally entered force 5 June 2016, having taken the preceding six and a half years to get the
required number of signatories to ratify, accept or approve the agreement. As of May this year, the
Agreement is being honoured by 34 individual states and the EU as a whole.
Credit: Shutterstock
The FAO also issued a policy document – the Voluntary Guidelines for Catch Documentation Schemes
(VGCDS) – which was officially adopted in July 2017. The VGCDS provides states with a
comprehensive set of tools to determine if fish going through their supply chains originate from catches
that are consistent with national, regional and international conservation and management measures.
Other international efforts to curb IUU fishing feature the cooperation between nine Regional Fisheries
Management Organisations (RFMOs) to compile a Combined Fishing Vessel List. The list enumerates all
fishing vessels identified in each RFMO as having been subjected to official INTERPOL attention or
reported as engaging in illegal fishing activities. The reports form a collective database allowing states to
combat IUU fishing more effectively.
More localised efforts have also been made to address the problem. Bordering the Indian Ocean, eight
countries (Comoros, Kenya, Madagascar, Mauritius, Mozambique, Seychelles, Somalia and Tanzania)
cooperate in a data-sharing technology project named Fish-i which allows them to exchange information
gathered by each respective state on any illegal fishing practices operating within their territory. In the
United States, since the start of January this year, the Seafood Import Monitoring Program obliges
seafood traders to provide a set of comprehensive tracking documentation for the fish products they wish
to sell to American consumers if they wish to see their catches enter US territory.
Shipbreaking: 835 ships scrapped in 2017
Credit: Shutterstock
Alternatively, sustaining global seafood consumption by increasing offshore aquaculture production in
order to reduce the necessity of wild catches is another measure being touted to address and effectively
decrease IUU fishing practices – although one that has regulatory issues of its own to resolve.
[Geographical]
07/06/2018
On 7 June the NGO Shipbreaking Platform published its Annual Report 2017.
Each year the NGO Shipbreaking Platform collects data and publishes an annual list of ships dismantled
worldwide. In 2017, 835 vessels were dismantled.
543 of these ships were sold for dirty and dangerous breaking on the beaches of South Asia. Whilst ship
owners are increasingly portraying themselves as conscious of the problems caused by shipbreaking, the
Bangladeshi beach in Chittagong – where environmental protection and worker safety are particularly
scant – remained the preferred scrapping destination worldwide in terms of tonnage dismantled.
Most vessels scrapped in 2017 were general cargo ships, followed by bulk carriers and container ships,
oil and gas tankers, roll-on roll-offs, passenger vessels and oil platforms. Looking at the size of vessels
scrapped on the beaches of South Asia, Pakistan received the largest vessels followed by Bangladesh,
while Indian yards scrapped more medium-sized ships. China and Turkey tend to recycle smaller vessels
on average. Thus, the larger the vessel the more likely it is that it will end up on a beach in Pakistan or
Bangladesh – where the conditions are known to be the worst. In 2017 the Pakistani government
introduced a ban on the import of tankers after a sequence of disastrous explosions between the end of
2016 and beginning of 2017, resulting in about 30 workers losing their lives. As a result, there was an
increase in the flux of tankers going for breaking in India.
As in 2016, Germany and Greece top the list of country dumpers in 2017. German owners, including
banks and ship funds, beached 50 vessels out of a total of 53 sold for demolition.
Greek owners were responsible for the highest absolute number of ships sold to South Asian shipbreaking
yards in 2017: 51 ships in total. Since the Platform‘s first compilation of data in 2009, Greek shipping
companies have unceasingly topped the list of owners that opt for dirty and dangerous shipbreaking.
European ship owners, from the EU and EFTA states, are responsible for more than one third of all ships
sold for breaking. The number of European-owned and/or European-flagged vessels dismantled in 2017
worldwide amounted to 260 ships: 181 of these ships, representing 70% of all European end-of-life ships,
ended up on the beaches in either India, Pakistan or Bangladesh. In terms of volume, European owners
were responsible for around 40% of the total tonnage scrapped on South Asian beaches. It is clear that the
European fleet follows the trends of previous years and continues to be predominantly broken using the
most unsustainable recycling method.
Source: NGO Shipbreaking Platform: Annual Report 2017
Out of the 181 European vessels that were beached, only 18 were still sailing under a European flag
during the last voyage. 24 vessels that had otherwise been operating under a European flag, swapped flag
to a non-EU flag of convenience just weeks before hitting the beach. The most popular end-of-life flags
for vessels scrapped on the beaches in 2017 were Panama, Comoros, St Kitts and Nevis, Palau, Liberia
and Togo. Palau, St Kitts and Nevis and Comoros are flags that are almost exclusively used by cash
Where violence crushes economies
buyers at end-of-life, and in 2017 Comoros hit a new record as it held first position as a beaching flag
together with the more widely used flag of Panama.
[NGO Shipbreaking Platform]
07/06/2018
The latest edition of the Global Peace Index estimated that violence cost the global economy $14.8
trillion in 2017 - almost $2,000 per person. 37 Port & Shipping News 23/18 (04 – 10 Jun 2018) Uwe
Breitling - Port, Transport & Training Consultant [email protected]
Unsurprisingly, war-ravaged Syria was the hardest hit with the cost of violence 68 percent of GDP.
Afghanistan and Iraq came second and third with violence costing 63 and 51 percent of GDP
respectively.
[Statista]
07/06/2018
By Stephen Cunningham
Booming U.S. shale production is fueling record crude exports, with shipments reaching an all-time high
of 1.76 million barrels a day in April.
That‘s up from 1.67 million in March, according to U.S. Census Bureau data released on Wednesday.
Total exports reached 52.7 million barrels for the month.
―Given that refiners are already running at or near full utilization, any increase in production is going to
be destined for the export market,‖ said Andy Lipow, president of Lipow Oil Associates LLC in Houston.
―By December, we could easily be between 2 million and 2.5 million barrels a day.‖
On a weekly basis, U.S. crude shipments have already topped that threshold, reaching a record high of
2.57 million barrels a day in the week ended May 11, according to the Energy Information
Administration.
The recent U.S. decision to re-impose sanctions on Iran could create additional demand for U.S. exports,
as crude buyers seek to replace Iranian barrels. But the challenge will be getting U.S. crude to the Gulf
Coast for export, given pipeline constraints from the Permian basin and from the storage hub at Cushing,
Oklahoma.
[Bloomberg]
Oil & gas shipping: U.S. crude exports reach all-time high
07/06/2018
By Marianna Parraga
Venezuela is nearly a month behind in shipping crude to customers from its main oil export port,
according to Reuters data, as chronic delays are compounding production declines and could breach
state-run PDVSA‘s crude supply contracts if they are not quickly cleared.
The oil company in recent days has raised the prospect that deliveries could be interrupted to some of the
world‘s largest refiners if it fails to end a tanker bottleneck contributing to a sharp decline in oil exports,
the lifeblood of the OPEC-member nation. Tankers waiting to load more than 24 million barrels of crude,
almost as much as PDVSA shipped in April, are sitting off the country‘s main oil port, according to the
data. The backlog is so severe, the company has told some customers it may declare force majeure,
allowing it to temporarily halt contracts, if they do not accept new delivery terms.
Credit: gCaptain
As of June 6, more than 80 tankers were waiting in Venezuelan waters, half of them to load crude and
refined products for exports, according to the data. The delays have mounted since May, when asset
seizures forced PDVSA to stop using Caribbean facilities for storing and loading export cargoes. But
PDVSA‘s non-compliance with oil supply contracts started months ago as production declines
accelerated, according to internal company documents.
In April, PDVSA shipped 1.49 million barrels per day (bpd) of crude and fuels to its customers, 665,000
bpd below the 2.15 million contracted, according to the documents.
In 2017 PDVSA lost two supply contracts, one with U.S. PBF Energy and one with Brazil Braskem, due
Oil & gas shipping: Venezuela faces hurdles clearing 24 million barrels backlog at ports
to unstable supply and U.S. sanctions. Since then, delays fulfilling supply contracts have only grown.
Customers waiting for cargoes with tankers already at sea include U.S.-based Chevron Corp and Valero
Energy, India‘s Nayara Energy and China‘s CNPC and its trading unit PetroChina.
PDVSA customers including Chevron declined to comment on the new terms. Nayara Energy, Valero
Energy and units of CNPC, which each had vessels awaiting loadings on Wednesday, did not reply to a
request for comment.
PDVSA did not reply to a request for comment.
Doubtful solution
One condition PDVSA is trying to impose to avoid breaching contracts is for customers to agree to load
cargoes in ship-to-ship operations off the nation‘s western coast to ease congestion at its Jose port. The
company expects the new terms would end the backlog there and at its Paraguana Refining Center,
according to a person familiar with the matter.
It was unclear who would pay for the ship-to-ship transfers. One buyer said chances are slim that any
customer would contest any force majeure, choosing instead to negotiate differences in pricing because
of the transfer costs involved.
Venezuela‘s crude exports fell 6 percent in May to 1.168 million bpd following U.S. ConocoPhillips‘
legal actions to seize PDVSA‘s assets in four Caribbean islands, according to the data. The nation‘s
crude exports in the first five months of 2018 were 27 percent lower than in the same period of 2017.
The lack of export and storage terminals, especially those with deep-water docks to load large vessels
bound for Asia, has forced PDVSA to divert tankers to Venezuela in recent weeks. The measure also has
been taken to avoid further cargo seizures, after Conoco won temporary court orders retaining two
vessels near Aruba last month.
Venezuelan ports – facing lack of spare parts, limited operation hours and a dwindling workforce – have
struggled to handle the growing number of tankers, leaving customers with growing delays and
unfulfilled supply contracts.
The company‘s proposed ship-to-ship (STS) transfer solution, to be performed in waters 6 miles from
Venezuela‘s Cardon refinery, faces resistance among oil buyers, according to shippers and traders. These
transfers require specialized equipment, handling by specialists and facilitated by mooring masters,
according to a provider of the service. The captain of the receiving tanker also has to be trained to
perform the operation, a shipper said.
―A STS operation adds at least $1 per barrel to the purchase cost. The question is who will take
responsibility for that,‖ said Robert Campbell, head of oil products markets at consultancy Energy
Aspects.
The price of Venezuela‘s Merey crude, the main grade exported from Jose port, rose to $60.24 per barrel
in April.
Insurance coverage for tankers and cargoes would also have to be changed to include the STS operation
if customers accept the option, Campbell added.
Crude spills affecting the waters surrounding several PDVSA‘s ports at Venezuela‘s western coast is
another risk some customers see as an obstacle for the transfers.
Container shipping: World Container Index - 07 Jun 2018
[Reuters]
07/06/2018
The World Container Index assessed by Drewry, a composite of container freight rates on 8 major routes
to/from the US, Europe and Asia, is up by 2.9% to $1426.61/40ft container.
Two-year spot freight rate trend for the World Container Index:
Our detailed assessment for Thursday, 07 June 2018
The composite index is up by 2.9% this week, was down by 3% from the same period of 2017.
• The average composite index of the WCI, assessed by Drewry for year-to-date, is US $1,368/40ft
container, which is $167 lower than the five-year average of $1,535/40ft container.
• Transpacific headhaul rates drove the composite index, as calculated by Drewry, up by 3%, to $1426.61
per feu. Rates from Shanghai to New York increased by $87 to reach $2,481 per 40ft. Similarly, rates
from Shanghai to Los Angeles stood at $1,386 – a surplus of $69 per feu. Rates from Shanghai to Genoa
and Los Angeles to Shanghai remained unchanged for a 40ft box. Rates from Shanghai to Rotterdam are
up by $20 to reach $1,641. Drewry expects rates to be stable next week.
Our latest freight rate assessments on eight major East-West trades:
Container shipping: „Brave new world?‟ – What industry leaders really think the future holds
Spot freight rates by route - assessed by Drewry
Source: Drewry Supply Chain Advisors
[Drewry]
06/06/2018
Coinciding with its 50th anniversary, leading international freight transport insurer TT Club, in
conjunction with global management consulting firm McKinsey, have today published a wide-ranging,
qualitative report summarising the thoughts and opinions of industry leaders on what the future holds for
the container industry over the next 25 years.
Rather than focusing on purely quantitative research and analysis of trends, the authors of the report
Brave new world? – Container transport in 2043 interviewed over 30 highly respected industry leaders
and experts from a wide cross section of the industry. The aim was to gain a qualitative insight into the
perceptions and confidence of the people who have greatest experience in the industry and are best
placed to predict the sector‘s future. These included Board Members of TT Club, but importantly other
supply chain professionals, financial intermediaries, law firms, and disruptors and innovators.
Following the research, TT Club and McKinsey, in ‗Brave new world?‘ have drawn five broad
conclusions as to where the industry is going and then have examined four specific potential future
scenarios together with their implications. Two of these scenarios centre on digitalisation and two on
trade development, or the lack of it.
The development of containerisation over the past fifty years is well documented. The industry is now
well-established at the centre of international trade with over 90% of consumer goods (TVs, toys,
clothing, furniture) and many raw materials being shipped in these metal boxes. Yet despite the success
of the container, the returns for the average container liner operator or freight forwarder have lagged the
cost of capital over the last two decades. There have only been a few winners who have found a
sustainable recipe for value creation.
Six sources of value creation
Source: TT Club / McKinsey: Brave new world? – Container transport in 2043 [Jun 2018]
So what will change in the future or will the familiar boom and bust cycle continue? ‗Brave new world?‘
reports five broad conclusions:
1. The physical characteristics of the industry are unlikely to change, as the container and the
ships that carry them will still exist over the next 25 years
2. Trade flows will become more balanced across trade lanes as incomes converge between East
Asia and developed economies, and the emerging economies in South Asia and Africa ―catch
up‖
Ship maintenance & repair: Oman Drydock plans US$60 million investment
3. Automation will be broadly adopted across the value chain, especially on the landside in
ports, terminals, rail and trucking, to unlock significant efficiencies
4. Digital, data, and analytics will cause a fundamental shift in the sources of value creation and
customers will expect a high level of reliability, transparency and user-friendliness
5. The industry leaders in 2043 will look very different; some will consolidate, others may
change their business model. Some will be ―digital natives‖, either start-ups or e-commerce
players optimising the container transport leg of their supply chain
Drawing together these broad conclusions, the report identifies the key sources of value creation for the
industry, leading to a pivotal debate as to whether the future is fundamentally driven by trade or by
digitalization.
[TT Club]
06/06/2018
Oman Drydock's two large graving docks will soon be joined by a post-Panamax floating dock if
investment plans are approved.
The new management team at Oman Drydock Company is hoping shareholders will approve a series of
investments aimed at gearing the repair yard for greater retrofitting demand, as well as an entry into the
newbuilding market.
The company, one of 16 logistics investments under state holding company ASYAD, is hoping for
approval for a US$60 million plan that includes a floating dock that will be able to fit post-Panamax
vessels; a floating crane with lifting capacity of 3,000 tonnes; a winching system to optimise use of space
in the yard; and redesigned keel blocks that are also expected to boost capacity.
The plan is expected to be approved at a shareholder meeting in September. Said bin Homoud Al Maawali,
CEO of Oman Drydock Co since 1 February, told The Motorship that he expected the floating dock to be
operational within six months of the decision, with the floating crane coming a year later.
The company is aiming to use the extended facilities for its first forays into newbuilding, where it aims to
focus on vessels under 80m in length. Al Maawali said that the company has already bid for five jobs that
include new tug boats, barges and small bulk carriers.
Meanwhile, Oman Drydock is hoping to attract a greater share of the retrofit activity in ballast water
management systems (BWMS) and scrubbers. Internal targets call for the company to sell 20 each of these
retrofits by 2021 and it is seeking to build alliances with five or more suppliers in each sector. An
agreement with Alfa Laval for both scrubbers and BWMS is already in place. Other elements of the plan
include bringing naval architects and engine suppliers to the yards, as well as investing in environmentally
Maritime safety: Australia to investigate loss of 83 containers from ship in heavy weather
friendly water blasters to boost the company‘s painting business.
The investments underpin an ambition to match the success of the leading repair yards in the region. ―We
want to be on a par with them in revenue terms,‖ Al Maawali said. ―Drydocks World in Dubai has three
times our capacity but ten times our revenue, so I believe we have the potential to match them if we use the
capacity we have and the new capacity we are bringing to the yard.‖
Oman Drydock Co opened in 2011 and has performed repairs on nearly 600 vessels, focusing on tankers
given its proximity to oil markets. It currently boasts two graving docks (of 410x95m and 410x80m and
offers 2.8km of quayside.
[The Motorship]
06/06/2018
By Mike Schuler
The Australian Transport Safety Bureau (ATSB) will investigate the loss of dozens of shipping containers
overboard from the Yang Ming-operated cargo ship YM Efficiency off of New South Wales, Australia last
Friday.
The Liberian-flagged YM Efficiency was sailing from Taiwan to Port Botany with 2,252 loaded containers
when it encountered rough weather off Port Stephens, News South Wales shortly after midnight on June 1,
2018. The large swells caused the ship to roll and pitch heavily, leading to the loss of 83 containers
overboard and another 30 containers moved or damaged on board, the ATSB said.
Debris from the ship has washed up along the shores of New South Wales. As of Tuesday, about 100
contract workers had joined the shore clean-up effort. Officials have also been issuing regular warnings to
ensure ships and boaters are aware of the potential hazard from floating debris.
Port development EU: Greece and Hungary suspected to be centers of multi-million-euro
China import scam
The container ship YM Efficiency arrives at Port Botany in Sydney, Australia, June 6, 2018. Credit;
AAP/David Moir/via REUTERS
―Continuing bad weather is hampering efforts, but [on Wednesday] the forecast is for the weather and
visibility to improve slightly, so divers will be deployed to join the efforts to assess rubbish that may be
sitting on the seabed in the vicinity of Jimmys and Hawks Nest,‖ said Roads and Maritime Services
Executive Director of Maritime, Angus Mitchell.
The ATSB said that during its investigation it will obtain information and recordings from the ship,
company and pilots, and will interview directly involved parties as appropriate. A report will be released at
the end of the investigation.
As of Tuesday afternoon, the YM Efficiency remained at anchor off coast of Sydney as it awaited entry
into port. Yang Ming says there have been no reports of damage to the vessel or marine pollution other
than the lost containers.
[gCaptain]
06/06/2018
European Union anti-fraud investigators suspect Greece and Hungary may have become the main EU
centers of a multi-million-euro scam involving imports of Chinese clothing and footwear that uses the
infrastructure of China‘s new ―Silk Road‖.
The large-scale fraud, which involves underdeclaring the value of imported goods to pay lower duties and
sales taxes, was first uncovered in Britain, where it had gone on for years, prompting the European
Commission this year to demand that London pay €2.7 billion in lost customs duties to the EU budget.
European Union and Italian authorities are investigating suspected wide-scale tax fraud by Chinese
criminal gangs importing goods via Greece‘s largest port of Piraeus, a trade gateway between China and
Europe, officials said.
Officials at the EU anti-fraud agency OLAF said they now suspected the scam could have shifted to
Hungary and to the port of Piraeus in Athens, which has been majority-owned by China‘s state-owned
COSCO Shipping since 2016.
Hungarian and Greek customs data show a surge of undervalued clothing and footwear imports from China
over the past two years, OLAF officials told Reuters. They stressed that this trend had coincided with a
drop in undervalued Chinese imports into Britain. Customs duties in EU countries are a direct revenue for
the bloc‘s budget. They are collected by national authorities before being sent to Brussels.
―We are worried about this,‖ OLAF‘s director for investigations Ernesto Bianchi told a news conference in
Brussels on Wednesday, adding that monitoring of import flows would be enhanced.
Reuters exclusively reported in April that Italian authorities were investigating suspected import fraud by
Chinese criminal gangs at Piraeus port, the largest in Greece. Asked about the suspected fraud in April,
COSCO Shipping said: ―The company has in its global operations consistently and strictly followed local
and international laws, and persevered to operate legally and compliantly.‖
Hungarian and Greek customs authorities were not immediately available for comment.
China wants to transform the Greek port into its ―gateway to Europe‖ as part of its $126 billion ―Belt and
Road‖ initiative, which envisions a new Silk Road of land and sea routes with trading partners. Under the
plan, a fast rail and land route would connect Athens to the Hungarian capital, Budapest, across the
Balkans. That same route could have been used by traffickers to move underpriced and undeclared Chinese
goods to Hungary, investigators suspect.
―It is maybe too soon to jump to conclusions, but it is worrying that fraudsters are now obviously looking at
infrastructure investment as a business opportunity for them too,‖ Bianchi said, urging EU authorities to
make sure that the infrastructure built by the Chinese ―is not exploited for illicit traffic‖.
In the British scheme, Chinese criminal organizations used the German port of Hamburg as Europe‘s first
arrival point for undervalued clothing and footwear cargos. But goods passed customs controls only after
having been shipped to Britain‘s ports, under EU rules that spare checks on items in transit between the
bloc‘s member states.
The British ports of Dover and Felixstowe were still the EU‘s main hubs for undervalued Chinese imports
in 2017, OLAF data showed, but that flow has nearly stopped this year because of stricter checks by British
customs, EU officials said.
Britain‘s decision to leave the EU‘s customs union might have also persuaded the criminal groups that
oversee this business to find new routes to bring Chinese goods into Europe, the officials said.
The British government is contesting that frauds occurred in UK ports. OLAF chief Nick Ilett said he
expected the controversy with Britain would last ―some time‖ and would probably need to be settled at the
EU‘s court of justice.
Port development Ukraine: Government plans to invest US$1.7 billion in infrastructure
Port development Philippines: South Korea provides $173 million loan for Cebu container
terminal project
OLAF defines undervalued goods as those which fall far below the average price declared in all EU
customs.
[EURACTIV.com / Reuters]
06/06/2018
The Ukrainian government aims to invest UAH44bn (US$1.7bn) into the outdated infrastructure of its
ports in a bid to revive the country‘s maritime industry.
Deputy Prime Minister Volodymyr Kistion said that the 12-year plan includes 46 projects to upgrade
Ukraine‘s seaports in collaboration with other investors, reported Kyiv Post. Ukraine‘s current port
capacity is 132m tonnes and the projects primarily include construction of new terminals and berths, as
well as the reconstruction of old ones.
According to the Kyiv Post, when speaking about the plan at the Ukrainian Ports Forum in Odesa last
month, Mr Kistion said: ―This will give an opportunity to create more than 5,000 working places and
provide a cargo capacity of 157 million tons of cargo per year.‖
Ukraine‘s Cabinet of Ministers has recently approved the country‘s national transport strategy ‗Drive
Ukraine 2030‘, covering 2018-2030. The strategy includes a goal for 30% of the Black Sea region‘s cargo
turnover to be processed in Ukrainian ports by 2030.
[Port Strategy]
06/06/2018
Following Philippines President Rodrigo Duterte‘s visit to South Korea, a $172.6m loan agreement has
been signed for the construction of the $199.3m Cebu International Container Terminal (CICT), local
reports cited the Department of Finance (DOF) as saying.
Export-Import Bank of Korea (KEXIM) will provide a low interest, 40-year loan for the major port project.
The loan will carry an interest rate of 0.15% per annum for non-consulting services and will include a 10-
year grace period. The Philippines will put up around $26.1m of the project cost.
The new container terminal will be built on 25ha of reclaimed land in the northern part of Cebu in the
central Visayas region of the Philippines. It is meant to relieve some of the pressure from congestion at the
current Cebu International Port nearer to Cebu City as well as boost connectivity in the central and
southern regions.
The terminal is expected to handle more international container traffic and according to a feasibility study
done by KEXIM consultants, will be designed with berth space to handle two 2,000 teu vessels
simultaneously and have a draft of 12m. CICT will also have yard space for 3,000 teu and a freight station
and inspection shed.
Terminal operators U.S.: Port of Oakland to sign new lease with SSA Terminals
Port development Sweden: Strategic infrastructure plan and budget for deepening fairways
at Gothenburg
[Seatrade Maritime News]
05/06/2018
By Chris Dupin
The Port of Oakland‘s Board of Commissioners is scheduled to approve new leases for its biggest tenant,
SSA Terminals, at a meeting next week.
SSA leases the Oakland International Container Terminal (OICT), the port‘s largest facility, which handles
about 60 percent of the port‘s traffic. It also operates the adjacent Matson Terminal, which is used
exclusively by Matson.
OICT has grown rapidly in recent years. When the port‘s Outer Harbor Terminal, a joint venture between
Ports America and MSC‘s Terminal Investment Ltd., closed in 2016, an estimated 85 percent to 90 percent
of that business went to OICT.
SSA‘s leases on the two terminals had been due to expire in 2022, but the new leases will run to 2027 and
include an additional, automatic five-year extension to June 30, 2032. In 2032, there will be an option to
extend the leases to 2042, if both SSA and the port agree at that time. The board approved the new leases
on the first reading of an ordinance on May 24; the second reading of the ordinance is on June 14.
There also will be some changes in footprints of the two terminals — SSA will be expanded by 19 acres to
290 acres by taking some space that is currently part of the Matson Terminal, while the Matson terminal
will take 14 acres from an adjacent piece of land called the ―roundhouse property,‖ and shrink its area by
five acres.
SSA will pay both fixed and variable rent on the facility. Those payments will gradually ramp up over
time, but the port said, ―Based on current assumptions, fixed and variable rent would increase over time,
averaging $71.6 million and $26.3 million per year, respectively.‖
SSA will be obligated to buy and put into service three new gantry cranes at OICT by the end of 2020, but
its schedule for paying the port for its expense in raising four cranes in 2017-18 will be extended five years
to 2027. The port and SSA also will split the cost of removing port-owned cranes if that is necessitated by
the new crane purchase.
SSA also will undertake environmental initiatives to improve air quality, and the Bay Ara Air Quality
Management District‘s Mobile Source Committee last month approved a $5 million grant to retrofit 13
rubber tire gantry cranes at OICT with hybrid electric technology to reduce emissions.
[American Shipper]
05/06/2018
The Swedish Minister for Infrastructure Thomas Eneroth presented on June 2nd key elements of the
Port development Australia: Newcastle developing $33 million bulk terminal
government‘s strategic infrastructure plan and budget related to the deepening of the fairways at the Port of
Gothenburg.
The decision means that the government will cover almost one-third of the cost of the project, which can
now proceed to the next phase.
―This decision by the government is good news indeed. It is confirmation that they value the significance of
the Port of Gothenburg as the most important freight hub in Scandinavia, handling 30 per cent of our
foreign trade. An investment of this magnitude will consolidate our position even further,‖ said Magnus
Kårestedt, Gothenburg Port Authority chief executive, in his response to the decision. 51 Port & Shipping
News 23/18 (04 – 10 Jun 2018) Uwe Breitling - Port, Transport & Training Consultant
Economies of scale have been the driving force behind the unrelenting increase in the size of freight
vessels. This applies to all types of vessels but in particular container vessels, which have doubled in size in
just 10 years.
The Port of Gothenburg is the only Swedish port that can receive the largest oceangoing container vessels,
although the fairway depth is limiting their freight loads on arrival. There are also vessels that are unable to
enter the port regardless, and they are forced to head directly for the continent, bypassing Gothenburg
completely.
The government‘s 1.25 billion kronor contribution is almost one-third of the total fairway investment,
estimated at around four billion kronor. The Gothenburg Port Authority will assume responsibility for half
the cost, leaving a shortfall of around 750 million.
Fact file: Deepening of the fairways at the Port of Gothenburg
The measures that will be taken will involve increasing the maximum depth of the fairways and the
turning area at the Container Terminal from the current 13.5 meters to around 16 meters;
The measures will allow container vessels calling at the Port of Gothenburg to take on more
containers. For the largest vessels, this represents an increase in capacity of around 50 per cent;
The total cost of the project is set at four billion kronor, of which two billion is for water-based
improvements, and two billion for quay reinforcement;
The socio-economic benefit, calculated in terms of the net present value ratio is 3.04, which means
that for each krona invested, society will receive four kronor in return;
The estimated payback period is 15 years.
[Dredging Today]
05/06/2018
The port of Newcastle, Australia has launched the development of a new bulk terminal at Walsh Point,
Port development France: Report lays bare extent of pollution from Fos port industrial zone
Kooragang Island in an effort to diversify trade operations.
The port has recently pledged a $33 million investment into bulk handling equipment, associated
infrastructure and additional strategic initiatives to help realize the new terminal. The development is set to
combine two berths, Kooragang 2 and 3, into one, demolish and replace the existing crane unloader
infrastructure, provide a temporary mobile hopper unloading infrastructure, and set up the relevant direct
management and environmental services at the port.
Kooragang 2 and 3 berths are the busiest common user berths in the Port, handling fertiliser, meals,
alumina, magnetite, cement and a range of bulk liquid commodities. The two existing ship unloaders,
which are now over 50 years old, will be dismantled and replaced by a new high capacity ship unloader,
conveyor structures, and electrical systems.
Once the current development work has finished, the initiative will move into its second phase —
minimizing cargo double handling, reducing cargo transfer points and removing the need for trucks at the
berths via conveyor systems. The project has been estimated for completion at the end of 2019.
[Port Technology International]
04/06/2018
A new report from French organisation ICEP lays bare the extent of local air pollution in and around the
Fos port industrial zone (ZIP), one of the most important in Europe
Cases of cancer and type 1 diabetes among people living close to the Fos ZIP, one of the most important in
Europe hosting the steel industry (ArcelorMittal), oil refineries and petrochemicals, are twice as high as in
other parts of France, according to a new study by ICEP (Eco-Citizen Institute for Understanding
Pollution), the findings of which have been validated by PACA, the Regional Health Agency.
ICEP identified three pollutants as particularly endemic – lead, two types VOCs and benzene. Lead and
benzene are well-known carcinogens, while the VOC levels, although not at Seveso dioxin disaster levels,
are identified as highly concerning.
The researchers found 50 substances in the blood and urine of a sample of 138 people aged between 30 and
65, of which 80 live in Fos and 58 in Saint-Martin-de-Crau, 20 kms away.
On an individual pollutant by pollutant basis, reported Le Monde, none of the measurements exceeds legal
limits, but the problem is the cocktail effect and constant exposure to small doses. Thus, for example,
produce from local market gardeners is impregnated with dioxin-like PCBs (PCB-DL) and cadmium.
Locally fished seafood is associated with increased doses of PCB, VOCs, mercury and chrome.
This backs up an earlier IETP study that looked at premium AOC-marked (appellation d‘origine contrôléé)
foods such as bull meat, eggs and mussels. Published in February, this drew fire from the local shellfish
industry and the Bouches-du-Rhône Prefecture, which dismissed it as "methodolically inadequate."
"This time no-one can question the scientific rigour of our study," IECP spokeswoman Véronique Granier
was quoted in Le Monde. "It has been recognised by Public Health France."
The report‘s main author Sylvaine Goix commented that industry should take these findings on board and
do more to limit emissions, particularly of ultra-fine particles.
Port development Myanmar: Government reviews $9 billion China-backed Kyaukpyu
project on cost concerns
The latest report from ICEP does not come in isolation. In January 2017 a Franco-American university team
published a report (Fos Epseal) stating that cases of type 1 diabetes cancer were twice as numerous in Fos
as in the rest of France. And last November a local MP, Jean-Luc Mélenchon, called for government action
to curb pollution from ferries and cruise ships at berth in Marseilles. On a day by day basis, he said, a single
ship produces more sulphur pollution from burning HFO in its auxiliary engines than all the vehicles
circulating in the city.
Cruise ships in Marseilles are a major source of pollution. Photo: Dominique Leriche
He cited a report by France Nature, which stated that the concentration of ultrafine particles in Marseilles
has reached 5000 per cm3. On board cruise ships, passengers and crew are breathing air containing up to
380,0000 ultrafines per cm3.
There is growing pressure on the port to introduce a bonus/malus tariff system based on emissions, while
campaigners want the Mediterranean to be declared an ECA, just like Northern Europe, where sulphur
emissions have been slashed. 54 Port & Shipping News 23/18 (04 – 10 Jun 2018) Uwe Breitling - Port,
Transport & Training Consultant [email protected]
More shore power installations are also being demanded. At the moment, only La Méridionale‘s ferries
"cold iron."
[World Cargo News]
04/06/2018
By John Reed
Myanmar‘s government is reviewing a $9bn deepwater port project backed by China over concerns it is too
expensive and could ultimately fall under Beijing‘s control if Myanmar were to default on its debt.
Two people with direct knowledge of the discussions within Aung San Suu Kyi‘s government said that
economic officials were looking for ways to negotiate down costs for the planned port at Kyaukpyu in
Myanmar‘s western Rakhine state.
The port is set to give China‘s south-west a direct trading corridor to the Indian Ocean via Myanmar, allowing
companies to avoid the Malacca Straits if needed. As such, it is part of Beijing‘s $1tn push to shore up
transport and energy supply routes across Eurasia under its so-called Belt and Road Initiative. The port at
Kyaukpyu will be one of the biggest infrastructure projects in Myanmar‘s history.
The project ―should be welcomed as a useful addition to the country‘s stock of infrastructure,‖ said Sean
Turnell, an Australian academic who advises Myanmar‘s government on economic policy, However, he
added: ―It would seem at first glance also to be a project that comes at excessive financial cost and, with this,
poses grave risks for Myanmar it may require the country to take on to participate.‖
The current estimated costs of the port, which sits at the terminus of recently built oil and gas pipelines that
run to southern China‘s Yunnan province, are about $7.5bn, with another $2bn envisaged for an adjoining
economic zone.
The project is due to be built by a consortium led by Citic Group, one of China‘s largest and most powerful
state-backed conglomerates. Citic won a tender in 2015, with the Chinese side taking 70 per cent and
Myanmar‘s government and local companies taking 30 per cent.
―A port of [that] scale that could be usefully employed by Myanmar, under any plausible scenario, should cost
just a fraction of this,‖ said Mr Turnell, an economics adviser who is on secondment from Australia‘s
Macquarie University as a close adviser to Myanmar‘s government. He noted that his comments were his
―personal assessment‖ but also confirmed that officials were looking at ways to negotiate the project‘s cost
down.
A second foreign official in Myanmar briefed on the discussions inside the government was blunter, saying
the project was giving policymakers ―nightmares‖, amid fears the port could come under Chinese control if
Myanmar failed to service its debt.
―If the project doesn‘t do well, there is the risk of defaulting and becoming a Chinese-owned port,‖ said the
official, who asked not to be quoted by name because of the sensitivity of the project.
Similar problems have already arisen elsewhere in Asia. Sri Lanka last year handed control of its port at
Hambantota to China on a 99-year lease after failing to pay the project‘s debts.
Mr Turnell estimated that the amount of debt Myanmar would need to take on for its share of the project
would be about $2bn, or about 3 per cent of GDP, representing what he called ―a substantial addition to the
country‘s debt stock‖.
Citic Construction did not respond to an emailed request for comment, and Myanmar‘s government did not
respond to requests for comment.
Myanmar‘s review of the project comes at a delicate time for the country, as it faces condemnation from
western countries over its recent military crackdown on Rohingya Muslims, which some analysts believe
could push the country into China‘s orbit.
Port development Russia: Cargo handling costs are expected to rise further
Port development France: Dunkirk to become two times larger
The country‘s previous government angered China in 2011 by suspending the $1.5bn Myitsone dam project
in northern Myanmar, which it shelved because of its environmental and social impact.
[Financial Times]
04/06/2018
Cargo handling rates at Russian seaports have gone up by seven to ten per cent since January amid a surge
in cargo volume and the weakening ruble. Shippers now fear that rates will continue to rise this year.
The increase in rates is partly attributed to a new Russian regulation that requires terminal and port
operators to convert their tariffs into rubles, instead of US dollars, which increases processing fees,
resulting in higher operating costs, reported IHS Media.
Container handling charges at Russia's port of St Petersburg are between US$500 and $750 per TEU.
Weighing costs $140 to $150 per container. This is two to 2.5 times lower than the Vladivostok to St
Petersburg rail transport cost.
In general, Russian cargo handling charges at seaports are 15 to 20 per cent higher than charges at ports at
neighbouring countries, such as Finland and the Baltic states. In addition, Russian seaports historically
have had a very short free storage period for containers, which in many port of St Petersburg terminals does
not exceed 10 days.
Experts predict Russian seaport tariffs will continue to increase at least until 2020, due to rising port
capacity utilisation rates, as a result of the Russian economic recovery and the growth in containerised
cargo volumes.
Capacity utilisation rates for the past two years demonstrate this uptrend. According to the official statistics
from the Russian Association of Commercial Seaports, the average Russian container terminal utilisation
rate rose from 42 per cent in 2016 to 49 per cent in 2017 and analysts say that with projected economic
growth this year the rate may reach 55 per cent.
[Hong Kong Shipping Gazette]
04/06/2018
The northern French port of Dunkirk has published the outcome of a public consultation exercise on its
CAP 2020 project.
Flags of convenience: Management of Honduran registry outsourced to Panamanian
consulting company
CAP 2020 project. Credit: Dunkerque-Port
The results favour the Atlantique alternative, offering the lowest costs efficiency and environmental
impact. According to the plan, the existing quay line will be extended by 2,000 metres with 16.5 metres
waterdepth alongside. The last stretch should become available by 2032.
[DynaLiners Daily]
04/06/2018
The General Directorate of the Merchant Marine (DGMM) of Honduras that oversees the country‘s Ship
Registry has contracted the international management of the flag to the Panamanian company International
MarConsult (IMC) presided by Ruben Reyna, the first administrator of the Panama Maritime Authority
(AMP) in 1998.
The measure does not mean that the Honduran DGMM ceases to operate, but that it does have an external
representation with knowledge of the international maritime sector to effectively promote the flag
internationally and with an effective global coverage and in the 24/7 scheme. IMC will be able to issue
provisional patents directly and through their international delegates.
Meanwhile, the Honduras Ship Registry has straightened up its fleet, looking now for the quality of vessels
and ship owners. Strict due diligences will be made for each ship before proceeding to issue the provisional
patent. ―It is preferable a slow growth, but quality growth,‖ said IMC president Ruben Reyna. ―It is a
difficult task that is entrusted to us, but we are ready to provide this service effectively and efficiently.
Quality will always prevail in our company.
Bunkering: Singapore port authority awards grant to build LNG bunker vessels
Oil & gas shipping Australia: New LNG import terminal planned at Port Kembla
―IMC and IMC Legal Services have been working in the maritime sector for 20 years during which we
have provided our flag service, among others, to ship owners and seafarers. Our customers will be assured
of our honesty and our commitment to the international maritime world that quality is first,‖ he added.
The Honduras Ship Registry will not stick to rigid schemes of fixed rates. The new tariffs will allow
making important adjustments to the flagging of the fleet, among others. The review of the seamen‘s
documentation and the issuance of the corresponding documents will be coordinated with Honduras
DGMM.
[Seatrade Maritime News /Fairplay / MundoMarítimo]
04/06/2018
Singapore‘s port authority will provide S$6 million ($4.5 million) to help build two liquefied natural gas
(LNG) bunker vessels, in a bid to promote ship-to-ship LNG bunkering in the city-state.
FueLNG, a joint venture between Keppel and Shell Eastern Petroleum, and Pavilion Gas will each receive a
S$3 million co-funding grant for the vessels due for delivery in 2020, the Maritime and Port Authority of
Singapore (MPA) said on Monday. The move is part of Singapore‘s push to maintain its status as leading
ship refueling hub in the region.
―LNG is a viable marine fuel solution to meet global environmental regulations such as the International
Maritime Organization‘s (IMO) 0.5 percent global sulphur cap from January 1, 2020,‖ Andrew Tan, chief
executive of MPA said.
Coming IMO rules will slash the amount of sulphur emissions that ships worldwide are allowed to burn,
with ship owners looking at a range of solutions to meet the new regulations.
[Reuters]
04/06/2018
By Melanie Burton
A consortium including Japan's JERA Co and Marubeni Corp aiming to ship liquefied natural gas (LNG) to
Australia's east coast has chosen a site south of Sydney at Port Kembla for an import terminal, it said on
Monday.
The project will allow access to a new gas supply for local industries in New South Wales state by 2020,
the consortium, Australian Industrial Energy (AIE), said in a statement. AIE also includes iron ore magnate
Andrew Forrest's Squadron Energy. Top global LNG buyer JERA is a joint venture of Tokyo Electric
Power Co and Chubu Electric Power Co.
Oil & gas shipping: Slower steaming remains an option for tanker owners
This is Australia's second proposed LNG import terminal. The nation, despite being the No.2 LNG
exporter, is grappling with a domestic supply gap, partly due to restrictions on exploration and production,
and partly to producers selling gas to Japan, China and South Korea in long-term contracts. Shipping LNG
within Australia or importing from elsewhere is viable at the moment because LNG is cheap, but prices are
expected to rise in the early 2020s.
The Port Kembla terminal would have the capacity to supply more than 100 petajoules per year, sufficient
to meet more than 70 percent of New South Wales' total gas requirements. Building the terminal is likely to
require a capital investment between A$200 million and A$300 million ($152 million and $228 million),
AIE said.
Australia's biggest power generator, AGL Energy, is also considering building an LNG import terminal off
the neighbouring state of Victoria for taking up to 2.5 million tonnes a year, but that would be mostly for its
own needs, to supply its gas-fired power stations and households.
[Reuters]
04/06/2018
The VLCC (Very Large Crude Carriers) markets have staged a modest recovery ahead of market
speculation that OPEC may relax production cut discipline and rising bunker prices which are providing a
negotiating point for owners, according to data provided by VesselsValue.
The VLCC market remains oversupplied with tonnage, but there are other tools at the immediate disposal of
owners. The average speed of the VLCC fleet has not dropped to the levels seen in historical data in the
high oil price environment and low earnings of 2013, VesselsValue notes.
Slowing ships down further could help reduce the supply of available vessels. Slow steaming refers to a
process of deliberately reducing the speed of cargo ships to much less than the permitted speed limit, which
helps them, among others, to cut down fuel consumption and carbon emissions.
Container shipping: HMM targets 1 million teu as it confirms orders for 20 vessels
Container shipping: Carriers in the bunker
[SAFETY4SEA]
04/06/2018
By Gavin van Marle
South Korea‘s remaining deepsea container shipping line, Hyundai Merchant Marine, is to join the ranks of
carriers operating the largest class of vessels.
Today the carrier signed a letter of intent with the country‘s largest shipyards. The imminent firm order is
part of HMM‘s strategy to build its fleet capacity to 1m teu.
HMM said it had signed an agreement to order five 23,000 teu vessels from Samsung Heavy Industries and
seven similar-sized ships from DSME. At the same time, it has also agreed to order eight 14,000 teu vessels
from compatriot shipbuilder Hyundai Heavy Industries.
The 23,000 teu vessels are expected to be delivered from the second quarter of 2020 onwards, and the
14,000 teu ships from the second quarter of 2021. Prices have yet to be fixed for the ships, the line said, but
will be before it reaches final agreement with the yards.
[The Loadstar]
04/06/2018
Shippers are right to be angry about emergency fuel surcharges levied by carriers. Now would be a good
time to devise a new system for bunker costs that protects both parties.
For many of us, fixing a nagging problem is often left to the last minute when matters reach crisis point.
Container shipping, it seems, shares this affliction. The imposition of ―emergency bunker surcharges‖ by
carriers to address rapidly escalating fuel costs has been met with scorn by shippers, who accuse lines of
dirty dealing and the surcharges as being a ―legacy from the cartel era‖.
"Containership operators need to ‗fess-up‘ by taking responsibility and greater control of their costs rather
than announcing vaguely explained short-notice unrecoverable surcharge costs on customers," said Chris
Welsh, the soon retiring secretary general of the Global Shippers Forum (GSF), a shipper lobby group.
Drewry agrees with the GSF that a better pricing system is required, but it also despairs that the situation
had to reach the cliff edge, in fact go over it, before it got airtime. Where were the calls for transparency
when fuel prices were low?
There is no doubt that higher fuel costs are hurting carriers. Bunker costs have increased by about 20%
since the start of the year with IFO 380 priced at $424 per tonne in Rotterdam as of Thursday 31 May,
according to Ship & Bunker. Over the same period Drewry‘s World Container Index, which tracks weekly
spot rates inclusive of bunker on eight ‗East-West‘ trade lanes, has mostly been on a downwards path (see
Figure 1).
Figure 1: Development of IFO and container freight rates (4 Jan 2018=100)
Source: Drewry Maritime Research, Ship & Bunker
This combination of lower all-in rates and higher fuel costs is a toxic pairing for carriers, many of which
have published financial losses for the first quarter. Similarly poor, if not worse results can be expected for
the second quarter. In response, the world‘s three largest carriers, Maersk Line, MSC and CMA CGM,
between them controlling approximately 45% of the containership fleet, issued emergency fuel surcharges
to supplement their existing fuel levy mechanisms.
Others have since followed, which is hardly surprising given that none are immune to the rising cost and
low-rate environment. With a blanket adoption of the emergency measures it seems highly likely that a
number of shippers will have to budget for higher rates in the very near future.
However, pleading poverty is not a good enough reason for carriers to justify these measures. After half a
century of doing business lines should by now have a workable system to deal with increases in external
costs like fuel and not have to impose new surcharges.
Before the demise of liner conferences in late 2008, individual carriers could leave the onerous task of
setting BAF to the Far East Freight Conference (FEFC) or Trans-Atlantic Conference Agreement (TACA).
The fuzzy calculations used by some conferences irritated shippers to the point of despair. In one sense,
conferences did the dirty work for carriers and gave individual lines the confidence that customers could
not accuse them of being any worse than any other line.
Figure 2: Monthly average bunker prices, 2000-May 2018
(Rotterdam IFO380, $/tonne)
Source: Drewry Maritime Research
In the post-conference era, at a time when IFO costs were much steeper than today at nearly $700 per tonne
(see Figure 2), carriers had to devise their own formula to establish bunker surcharges. The methods varied,
but in general the new systems for recovering BAF were separated from the base freight rate and linked to a
common fuel price indicator with trigger points for adjustment. Some shippers inserted ceiling clauses into
contracts for protection, but in general the move to a cost-plus pricing strategy meant that carriers were
more in control of their revenue streams than they were before.
In theory, under the new method IFO price fluctuations should be profit-neutral for carriers as the additional
cost or saving from higher or lower bunker prices was meant to be passed on to customers.
Which begs the question: why don‘t the BAF mechanisms established when fuels costs were much higher
work today? There shouldn‘t be any need for emergency top ups if the same formulas were still being
applied universally.
That is one for carriers to explain, something they have thus failed to do. Drewry suspects it is because
during a period of relatively low fuel costs carriers simply allowed too many shippers a free-pass on BAF
by agreeing to all-in rates without any fuel adjustment mechanism. Now that IFO costs have surprised them
by rising sharply they have been exposed.
The new emergency surcharges will only really affect the small and medium shippers that don‘t have the
luxury of additional fuel surcharge exemptions in their contracts that most of the big BCOs should have.
Terminal operators Peru: COSCO to build and operate $2 billion port north of Lima
However, if IFO prices were to continue to rise towards the levels of mid-2008 then carriers would have to
consider stopping the VIP treatment for big shippers.
Drewry considers that carriers generally only recover between 50-80% of their fuel costs via BAFs because
of the predilection to win over high-volume customers with BAF-free contracts.
As such, while we expect lines to hardline the emergency surcharges on smaller spot market shippers, that
won‘t completely compensate them for the higher costs.
Aside from additional ancillary charges, shippers might also suffer as a consequence of further increases in
fuel prices: higher unchecked costs could potentially lead to carriers pulling ships and services from
operation, while the scope for faster transit times will be greatly diminished.
Our view
Carriers‘ own failure to control costs has left them exposed to the rapidly rising fuel prices. Emergency
BAFs are a desperate move that will only partially compensate them and at the same time alienate small
and medium shippers.
[Drewry Container Insight Weekly]
04/06/2018
By Mitra Taj and Marco Aquino
China‘s COSCO Shipping Holdings Co Ltd will build and operate a $2 billion port in Peru, part of $10
billion upcoming Chinese investments in the copper-producing nation, China‘s ambassador to Peru
announced last Friday.
The proposed port in Chancay, a town 58 km (36 miles) north of the Peruvian capital Lima, was last under
the control of Peruvian miner Volcan. Volcan said in its earnings statement last month that it was seeking a
strategic partner on the Chancay project, and did not immediately respond to requests for comment on
Friday.
China is Peru‘s top trade partner and imports most of the minerals the South American country produces.
But Chinese companies have increasingly expressed interest in investing in sectors beyond mining.
―Chinese-Peruvian relations behold a promising outlook,‖ Ambassador Jia Guide said at a ceremony with
Peru‘s president. ―In the next three years, a wave of Chinese investments worth $10 billion is expected, in
energy and mines, telecommunications, construction and financing,‖ Jia added in televised comments. Jia
also said that China Railway Engineering Corporation (CREC) plans to build a port at the southern town of
Ilo, the capital of a copper-rich mining region.
The director of Peru‘s National Port Authority, Edgar Patino, said he was unaware of any proposal by
CREC to build a new port in Ilo and that a potential expansion at the current port would be awarded to a
company through a public auction. Patino said the Ilo port would be expanded if a proposed railway to
transport goods from Brazil, Bolivia and other countries is built.
Port automation: A paradox for the shipping industry
The ceremony at Peru‘s presidential palace was held to celebrate Chinese miner Chinalco‘s $1.36 billion
expansion of its copper mine Toromocho in southern Peru, which will increase output by 45 percent in
2020, Chinalco‘s Chief Executive Ge Honglin said.
The Peruvian subsidiary of China‘s Zhongrong Xinda Group is scheduled to start building its proposed $2.5
billion iron ore mine Pampa de Pongo this year, according to Peru‘s government. The local unit of Chinese
steelmaker Shougang Group has already started work on a $1.3 billion expansion of its Marcona iron ore
mine.
Earlier this week, China‘s Shandong Gold Group said it was looking forward to investing in Peru but
declined comment on potential projects.
[Reuters]
04/06/2018
By Jean Paul Rodrigue, professor at Hofstra University, New York
Automation is bringing a series of paradoxes to the shipping industry. Since maritime shipping is in the
derived demand business, it is misleading to assume that automation does not affect the demand for
shipping as well.
Although automation is mostly considered by the industry at the port terminal level, it also takes place
across entire supply chains, a process associated with the fourth industrial revolution (manufacturing
4.0/4IR).
The impacts of automation may thus be more significant on the activities that drive port volumes, such as
manufacturing, than on port operations. This represents a paradox since automation can directly be a benefit
for port terminals, but indirectly it could be a curse. Stakeholders such as terminal operators usually
optimize the systems they can control and benefit from, but a common mistake is not to consider the wider
contexts of the technologies they are using, both upstream and downstream of their value chains.
Dimensions of automation
Port terminals are particularly prone to automation since it provides direct benefits in terms of cost,
efficiency, safety and reliability. Still, this automation takes place at different rates depending on the
technology involved and how easy it is to implement it in a cost-effective manner – the low hanging fruits
are picked up first. However, since port operations and maritime shipping are heavy asset dependent
activities, automation is both risky and complex, underlining the cautious stance of the industry.
Terminal automation involves six major dimensions, each having a different level of efficiency, risk and
diffusion cycle. Some automation technologies are just beginning to be adopted, while others are achieving
a level of maturity. The six dimensions are:
1. Automated decision making (yard management): Accounts for the earliest implementations of
automation (1990s) since it improves terminal management aspects and the performance of
existing assets without directly automating them. This form of ‗virtual automation‘ is among the
most widely adopted.
2. Automated gates: Container terminal gates involve several transactions and were also among
earlier forms of terminal automation. Automated gate systems are able to identify drivers, process
bill of lading information electronically, scan and identify containers using optical character
recognition or RFID, and direct drivers to a designed spot for loading or unloading a container.
3. Automated tracking and tracing: Focuses on a higher level of integration of the components of
terminal operation such a ships, cranes, containers and yard equipment by accurately pinpointing
their location within the terminal. This allows for a more effective use of terminal equipment and a
faster storage and retrieval of containers.
4. Automated yard cranes: These can automatically store and retrieve containers along a stacking
area but are capital intensive and require a physical reorganization of the terminal if implemented
on existing facilities.
5. Automated horizontal transport: Involves the use of automated guided vehicles (such as
automated straddle carriers) to move containers within a terminal.
6. Automated quay cranes: Cranes are usually the most capital-intensive superstructure in a port
terminal. The growing size of ships has placed pressures to improve ship-to-shore productivity and
automated quay cranes are starting to be introduced.
The automation ceiling
Like any technological trend, automation is often associated with unrealistic expectations. Conventional
risk mitigation underlines that there is an automation ceiling representing what level of automation can be
effectively implemented at a terminal from a cost/benefit perspective. Any automation strategy that is too
capital intensive and that does not lead to significant benefits such as lower operating cost or higher
throughput is a risk. Still, technology is improving and costs are declining lowering the automation ceiling.
The countries whose container port terminals contributed the most to the change in cargo volume versus the
previous year are (from greatest to smallest, according to their relative change): the Dominican Republic
(24.0%), Colombia (13.3%), Mexico (12.2%), Panama (10.1%) and Brazil (5.0%). They are followed by,
with a smaller contribution to the rise in regional volume but notable relative changes in terms of individual
performance: Honduras (9.8%), Peru (9.4%), Argentina (6.7%), Uruguay (5.8%), Chile (5.7%) and Ecuador
(4.7%). Finally, those countries that also had a significant performance on an individual level, but marginal
participation in the regional volume variation, are: Suriname (13.9%), Grenada (11.6%) and Nicaragua
(9.5%).
Automation can be phased in an asynchronous fashion, creating disruptions of the flows and processes
within terminals. This asynchrony is linked with the cost and ease of implementation of an automation
segment. For instance, yard management and automated gates are the most prevalent forms of automation
since they are mainly software-based as opposed to automated yard equipment (cranes or horizontal
transport), which are much more capital intensive. It remains to be seen what the applicable limits of
terminal automation are and at which level it does not generate significant additional value.
Unintended consequences
While the expected impacts of automation are rather straightforward, such as improved terminal throughput
and efficiency, the unexpected or unintended consequences can also be significant. These may include:
Shipping networks: Would terminal automation lead to a segmentation of maritime shipping services
between highly automated terminals (first tier) that can handle the high volumes and frequency
requirements of mega-ships and less (or non) automated terminals focusing on second tier services? This
could particularly be significant for transshipment hubs that would in addition to linking regional and
deep sea services also link first tier and second tier networks. A further rationalization of shipping
networks could result.
Terminal footprint: Could terminal automation lead to a declining global footprint of container terminals,
particularly if it takes place in a low growth environment? As automation is linked with a higher level of
asset usage for a similar footprint, it could incite terminal operators to rationalize their terminal assets.
This could lead in some cases to the closure of terminals, particularly in multiterminal ports where
automation leads to higher capacity than required and where a non-automated terminal finds itself at a
competitive disadvantage.
Terminal facilities: Automation is changing operations and the configuration of container terminals,
which is likely to lead to new terminal designs and interactions such as terminal/satellite facilities pairs.
Further, automation changes the velocity of different terminal operations in a heterogeneous fashion,
particularly if partially applied.
Railways Malaysia: Government admits that it‟s too late to cancel China‟s $14 billion East
Coast Rail deal
Vertical integration: Since terminal automation results in a higher level of integration along the transport
chain, particularly through the information technologies it relies on, a question is thus raised regarding
how the formation of new relations between carriers and their customers works and opens up the
possibility of new entrants.
Automation: The big picture
The push towards automation appears to be an irrevocable trend further increasing the capital intensiveness
of container terminals. Terminal automation must be considered in a wider context that affects both the
technical aspects of terminal operations, but also the derived demand of maritime shipping. While one
aspect (terminal automation) is under the control of terminal operators, the other (value chain automation)
is outside their control.
Looking at value chains, recent years have seen significant changes in procurement, manufacturing, freight
distribution (e.g. warehousing) as well as marketing (e.g. e-commerce). For instance, automation in
manufacturing changes the comparative advantages of labour, which in turn changes location strategies.
Facilities can be located closer to main markets, which puts a downward pressure of long distance shipping.
The question remains in which way all these changes are going to impact the demand structure of global
freight distribution and how terminal automation fits into this picture.
It would be paradoxical to transition into a fourth industrial revolution with efficient (automated) terminals
and supply chains supported by transactional technologies such as blockchains, but with lower anticipated
shipping demands. For the shipping industry, this would be an unwelcome development as the array of
technologies from which it would benefit would also be the drivers of its stagnation.
[Port Technology International / PortEconomics]
04/06/2018
Malaysia‘s plan to stimulate economic activity on its east coast with a high-speed rail link with Thailand is
to continue despite the election of Mahathir Mohamad and the cancellation of the high-speed line between
Kuala Lumpur and Singapore.
Lim Guan Eng, the new finance minister, said the $13.8bn east coast scheme would proceed because that
would be cheaper than cancelling – and at the end of it, Malaysia would have the railway.
―Twenty billion ringgit ($5bn) has already been paid out,‖ he said. ―Even if you cancel it, how does it help
the country? Why that kind of money had been paid out can only be answered by the previous
government," Lim said, referring to the Najib Razak regime.
China Communications Construction (CCCC) began work on the line last year after winning a no-bid
tender. China‘s Export-Import Bank of China will provide 85% of the financing through a 20-year soft loan
at an annual interest rate of 3.25%. The news will also be welcomed by Aecom. The US engineer was hired
by CCCC to oversee work on all the stations, viaducts, tunnels and depots on the project.
Credit: Creative Commons
The line will run for 688km from Port Klang, in the southeast of the Malaysian peninsula, via Kuala
Lumpur to the town of Pengkalan Kubor on the northeastern border with Thailand.
Elected on 9 May, Mahathir Mohamad‘s campaign tapped into public unease in Malaysia over the
country‘s debts to China and the perception that projects favoured Chinese firms and workers.
Malaysia has already secured around $34bn of loans for infrastructure projects under China‘s Belt and Road
initiative.
[Global Construction Review]
PROFESSIONAL MEMBERSHIP
Advance your career by gaining Professional Recognition.Professional recognition is a visible mark of
quality, competence and commitment, and can give you a significant advantage in today‘s competitive
environment.
All who have the relevant qualifications and the required level of experience can apply for Professional
Membership of IAMSP.
The organization offers independent validation and integrity. Each grade of membership reflects an
individual‘s professional training, experience and qualifications. You can apply for Student Membership as
per following :
Fellow (FIAMSP)
To be elected as a fellow, the candidate must satisfy the council that he/she:
Has held for at least eight (8) years consecutively a high position of responsibility in shipping or related
business.
Has distinguished himself/herself in shipping practice.
Is a principal in a firm or a director of a company in the business or profession.
Members in this grade are entitle to use the initials FIAMSP After their names.
Full Member (MIAMSP)
Individuals holding an internationally recognised marine qualification, or who can prove that they have
practiced on a full time basis for a minimum of five (5) years as a consultant or marine surveyor.
Individuals who, by producing written reports can demonstrate that they have practiced marine surveying or
consultancy for at least five (5) years.
Individuals whose qualifications or experience shall be considered appropriate by the Professional
Assessment Committee.
Members may use the initials FMIAMSP after their names.
Associate Member (AMIAMSP)
Associate Membership shall be open to any person, partnership, company, firm or other corporate that does
not own a Ship but is engaged in ship operating or ship management. Associate Members can nominate one
(1) person to represent them in the Association. Associate Members are entitled to attend General Meetings
and to participate in discussion at such meetings but shall not vote or stand for election to the Board of
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Individuals holding a recognised qualification, for example Inspector level 2 or higher (NACE, FROSIO,
ICorr), RMCI and IRMII, NDT Technicians (CSWIP), for example gauging personnel, divers or other
surveyors with at least three years full time practical experience in a marine related field. Technician
Members may use the designation TIAMSP after their names.
Affiliate (AFFIAMSP)
Graduates who do not meet the criteria for Full or Associate Membership and are continuing to train and
gain experience prior to applying for Associate Membership
Student (SIAMSP)
Individuals who are enrolled in training programs related to the maritime or shipping will be appointed as
student members of the Association for the duration of their course.
LAST MEMBERSHIP
Fellow (FIAMSP)
Capt. Skiadas Athanasios
Greece
M. Robinson Mark
United Kingdom
Mr. Dekkers Walter
Netherlands
Full Member (MIAMSP)
Capt. Mushtaq Kamil Al
Attabi
Iraq
Capt. Jasim Aqeel
Iraq
M. Subbiah Thiyagarajah
Malaysia
Affiliate (AFFIAMSP)
M. Kirton Christopher
Singapore
M. Hubert Louis-philippe
France
Mrs. HELENA ISABEL
CAMPOS LANÇA PALMA
Portugal
UPCOMING EVENTS SUMMARY
June
FUTURE FUELS FOR 2020 COMPLIANCE SEMINAR
13
The Hatton,London
June
3RD ANNUAL PORTS AND TERMINALS INSURANCE SEMINAR 13
The Hallam (Cavendish Venues), London
June 3RD ANNUAL PORTS AND TERMINALS INSURANCE SEMINAR
13
The Hallam (Cavendish Venues),London
June
MEETING THE COMMERCIAL, INSURANCE AND LEGAL CHALLENGES OF TODAY'S 26 SALVAGE AND WRECK REMOVAL OPERATIONS
Novotel Clarke Quay, Singapore
June GLOBAL PORT & MARINE OPERATIONS - 11TH INTERNATIONAL HARBOUR MASTERS
28 CONGRESS
Lancaster Hotel, London
September
MEETING THE COMMERCIAL, INSURANCE AND LEGAL CHALLENGES OF TODAY'S 26 SALVAGE AND WRECK REMOVAL OPERATIONS
Novotel Clarke Quay, Singapore
September
GLOBAL LINER SHIPPING ASIA 26
Novotel Clarke Quay, Singapore
February 2019
12th Arctic Shipping Summit – Montreal
21
Montreal - venue TBC
