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Kingston at the crossroads Jamaica’s potentially game-changing transhipment plan INSIGHTS FOR PROFITABLE SHIPPING 22 September 2011 Volume 373 Issue 6652 Price £15.00 www.fairplay.co.uk Caribbean themed issue INSIDE THIS ISSUE MARKETS: Price chasm pulls spot LNG to Asia COMMERCE: Hubs face pressure from carriers REGULATION: US examines contract rules LOGISTICS: Troubled times in Curaçao DECISION-MAKERS: David Ross
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Page 1: Fairplay 22 Sept 2011

Kingstonat the crossroads

Jamaica’s potentially game-changingtranshipment plan

INSIGHTS FOR PROFITABLE SHIPPING

22 September 2011 Volume 373 Issue 6652 Price £15.00 www.fairplay.co.uk

Caribbean

themed issue

INSIDE THIS ISSUE MARKETS: Price chasm pulls spot LNG to AsiaCOMMERCE: Hubs face pressure from carriers REGULATION: US examines contract

rules LOGISTICS: Troubled times in Curaçao DECISION-MAKERS: David Ross

Page 2: Fairplay 22 Sept 2011

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Page 3: Fairplay 22 Sept 2011

32 Logistics:Troubled times in CuraçaoThe Netherlands Antilles’ dissolution andCuraçao’s new government havereshaped port authorityreshaped port authority

3 Look outCaribbean ahead in Canal race

Guarding the seas

4 Story of the weekRight place, right time?

6-15 MarketsPricing chasm pulls spot LNG to Asia

Boxship bargains En bloc salesdominate Painless Indian naphtha drop-off Uncertainty deters Capesize S&P

16-27 Trade & commerceCaribbean: Domestic recovery sputters

Foreigners feel Beijing’s fiscal biteRising costs cloud India’s seafood

surge Season shrinks for cruise portsCarriers navigate Venezuela minefield

28 TechnologyEmissions down, warming up S-Classupgrade still to convince Spreadersoftware lifts downtime problems

30 RegulationUS examines contract rules Denmarksees action on crewing laws ICSresponds to emissions tax report

32-36 Logistics & supply chainTroubled times in Curaçao Spainopens door to Europe Jakarta urgeslogistics developments Cochin seeksrelief for cabotage headache Railchanges for South African ore

38 Decision-makersDavid Ross of SeaFreight

40 Shoes & ships‘ECDIS confusion’ – IMO responds

42 Movers & shakers

44 Shipping in numbers

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this week every week22 September 2011

Volume 373 Issue 6652

22 September 2011 1www.fairplay.co.uk

[ Cover photo: Matthew Ramsdale / Shutterstock ]

Look out for the sector focus stamps:Fairplay focuses on the Caribbean. Find the stamp throughout the magazineCarib

bean

6 Markets: Pricing chasmpulls spot LNG to AsiaAsian buyers are now paying a hugepremium to snare cargoes from Europeand America, writes Greg Miller

28 Technology:Sulphur zone warms upLow-sulphur fuel regulations cutCalifornian emissions while adding toglobal warming, study shows

4 Cover story:Kingston at thecrossroadsJamaica has a potentially game-changing transhipment plan

38 Decision-makers: David RossSeaFreight’s heir apparent explains how lean management and aCaribbean style of doing business can pay off in the long run

16 Trade & commerce:Hubs face carrier pressureCSA president CarlosUrriola is amongthose expectingtranshipmentmargins to besqueezed, reportsGreg Miller

Page 4: Fairplay 22 Sept 2011

The Freeport Container Port is one of the world’s largest container shipping conglomeratesconstructed, and the deepest Container Port in the region. Freeport Container Port islocated 65miles from Florida . With a depth of 16m, The Freeport Container Port servesas amajor container transshipment hub between the Eastern Golf Coast of the UnitedStates, the Gulf of Mexico, the Caribbean, South America, and trade lanes to European,Mediterranean, The Far East and Australasian destinations.

FREEPORT CONTAINER PORT

This 24-hour facility boasts of having the most advanced port computer systems, operational expertise and professionalmanagement, in addition to state of the art security and full surveillance. The port is capable of handling the largestcontainer vessels in the world and aims to provide excellence in container services through the dedication of its staff andapplication of leading edge technology, by using highly advance “real time”communication and port management systems.

PORT FACTS

! 42.5m Air draft permissible above water level! 1036m Berth! 16mMaximum depth at berth! 3ft Tidal range! 1mMinimum under keel clearance alongside! 1Mobile Harbour Crane! 61 Tons SWL under spreader! 71 Tons SWL under hook! 46.5mOutreach of cranes! 9 Gantry quay cranes

! Minimum number of 20’bays between gantries—2! No restriction on number of tiers that can be worked on deck! 38.7mMaximum height of spreader for water level at lowwater! 8 in. Over height limit (under spreader) for 20’ units and 40” units! 30.48m Longitudinal clearance between the legs gantries! 27.7mMaximum cargo width! Class 1 & 7 limitation in haz cargo that can be stowed

at the terminal! 30Moves per hour/per gantry! 430 Reefer points (reefer plugs available at terminal)! 24 Hour security

For More Information Contact:Freeport Container Port LimitedP.O. Box F-42465Freeport, Grand Bahama, The BahamasTel (242) 350-8000Fax (242) 350-8044

EQUIPMENT

! 72 Straddle carriers! 9 Super Post Panamax Quay Cranes! 14 Train tractors & heads! 17 Forklifts! 2 Top lifters! 4Man Lifts

The Transshipment Hub of the Americas

Page 5: Fairplay 22 Sept 2011

22 September 2011 �www.fairplay.co.uk

lookoutRichard ClaytonFairplay Editor

It’s official: carriers are now in the thick ofservice-plan revisions to take advantageof the Panama Canal expansion in 2014.

A new round of transhipment deals iscurrently under way for upsized vesselson the Asia-US East Coast run. Becausenecessary terminal upgrades – includingcrane installations – can take up to twoyears, pivotal decisions should be made bycarriers by the end of 2012.

Some aren’t waiting. The MoU signed inKingston by CMA CGM is just the openinggambit. Expect more major hubannouncements – and don’t be surprised ifsome long-time carrier customers switchto new terminal partners.

In general, the Caribbean’s marketposition looks increasingly bright. SeveralUS ports have yet to secure dredgingcommitments to handle ‘New Panamax’vessels, but carriers must serve thesegateways, given the static locations oftheir top shippers’ distribution centres.

In the US, Charleston and Savannah arescrambling to secure funds for dredging,while it looks increasingly unlikely thatNew York-New Jersey’s ‘air draught’conundrum created by the BayonneBridge will be resolved in time.

The problem in America is that politicalrhetoric is now squarely geared towardsdebt reduction. This could make dredging

and infrastructure funding even moredifficult to obtain, just when it’s neededmost. The clock is ticking andapprehension within America’s portcommunity is building.

This concern has created a significantopportunity for deep-dredged, capacity-rich terminals such as Freeport, Bahamas,which may serve as feeder hubs for the US.

In the end, the American ports’ losscould be the Caribbean’s gain. Followinginvestments in Panama, Colombia,Jamaica and the Bahamas, the Caribbeanlooks as if it will indeed be ready forcanal expansion – even if the US EastCoast isn’t. F

Caribbean ahead in Canal race

Guarding the seasAnother day, anotherdiscussion about piracy – andyet another grudgingacknowledgement that ourfoe is smarter than the averagecriminal. But last week’s ICS/ISF gathering in Londonbrought out tensions withinthe shipping community.

Stephen Askins, a lawyer,fears that the more legislationallows for armed guards, the

more politicians will see piracyas a commercial, rather than amilitary, problem. EUNAVFORchief of staff Capt Keith Blountreveals that owners rarelyadmit they are carrying aprivate security team until thevessel is under attack;Pottengal Mukundan at theIMB expresses his frustrationover the attitude of flag statesto protecting their ships.

Blount says categorically “noship carrying a private securityteam has yet been pirated”,which sounds like the militarypressing for a commercialsolution. There are 166 privatecompanies operating in theSomali region, of which about50 are linked to SAMI, theregulatory trade association.

And even if a SAMI-recognised security company

is selected, how many guardsmake a team? The Dutch arenow debating about 17 –which Blount regards asridiculous – while others go forthree of four – which Blountbelieves would be useless.

The unspoken dilemma iswhether there would beenough lifesaving equipmenton board to keep a protectedvessel under SOLAS. F

As carriers plan for a post-expansion network, not all ports will be ready

Page 6: Fairplay 22 Sept 2011

4 22 September 2011 www.fairplay.co.uk

Right place,right time?J amaica’s Kingston Container Terminal

(KCT) is the ‘elephant in the room’ ofAmericas transhipment because itssuccess or failure will dictate how

competing hubs fare for years to comeand how millions of containers will berouted annually.

KCT boasts a near-perfect location to tapeast-west trades to benefit from thePanama Canal expansion, north-southroutes fuelled by Brazil, and the mainstaySouth Florida-to-Caribbean run.

And yet, KCT continues to have sparecapacity. A lot of spare capacity. Its actualthroughput remains less than half of itsstated 3.2M teu/year capacity. To put thisin context: current spare capacity at KCT isroughly equivalent to the total volume ofsome of its regional competitors.

Furthermore, Kingston’s prodigious drypowder is set for another huge jump. PortAuthority of Jamaica (PAJ) chairman NoelHylton confirmed to Fairplay that the boardrecently approved a memorandum ofunderstanding (MoU) with a privateinvestor to develop PAJ’s Fort Augustaproperty and bring Kingston’s capacity to awhopping 5.2M teu/year by 2014.

The Fort Augusta expansion is just oneof four crucial initiatives moving ahead inparallel. In addition, PAJ is negotiatingpivotal arrangements with anchor clientsCMA CGM and Zim; seeking government-supported dredging to prepare for larger,post-Panama Canal expansion boxships;and forging ahead with plans to sell offPAJ’s equity.

The PAJ negotiations with its two anchorcarriers have taken centre stage. In earlyAugust, the Jamaican governmentannounced an MoU with CMA CGM to givethe carrier a 35-year lease in return for a

$100M investment, with CMA CGM to takeover management of its allocated spacefrom PAJ [see Fairplay 8 September, ‘CMACGM looks to better times’].

Several regional sources speaking toFairplay expressed astonishment at thismove, because it appeared to favour CMACGM over Zim, KCT’s more importantclient. According to the latest availablestatistics, Zim accounts for about 55% ofKCT throughput, CMA CGM about 35%. “Itlooks like seniority doesn’t play any role inthis business – it’s all about opportunity,”said one competing terminal executive.Fairplay has confirmed that Zim “was upset”with the CMA CGM deal and that Zim hassubsequently held talks with a number ofCaribbean terminals to explore its options.

Hylton acknowledged this when he spoketo Fairplay last month. “I know other portshave gone to Zim and made offers. I wouldbe naïve to think they wouldn’t. We makeoffers to other ports’ clients all the time.”

Hylton also provided more details on theprocess ahead with both CMA CGM andZim, dispelling several of the misperceptionsthat have fed the rumour mill. Mostimportantly, the PAJ boss adamantlyasserted that he will not go forward withthe CMA CGM lease if it means losing Zim.

“There’s a lot of gossip about Zim and us.But we have said to CMA CGM, openly,that we will not do the deal with themunless we settle with Zim,” said Hylton. Henoted that the agreement with CMA CGMwas only an MoU. “We must settle theterms and conditions of the lease [withCMA CGM] by the end of the year,” he said.“I am not bragging yet.”

Asked how the CMA CGM plan cameabout, he revealed: “CMA CGM made thisproposal. They wanted to decide on a hub.Instead of losing them altogether, we saidwe’d go along with it.”

He also clarified what CMA CGM hasactually been offered. A Jamaica govern-ment press release stated that the CMACGM deal would award the carrier KCT’sSouth Terminal, the facility built on re-claimed land known as Gordon Cay. In fact,the MoU would give CMA CGM roughly 60-65% of Gordon Cay, not all of it, said Hylton.

For Zim to accede to the CMA CGM deal,it must be convinced that the remainingKCT space suits its future needs. Zim isbeing offered part of Gordon Cay, plus all ofthe west and north terminals. Hylton main-tained that the area to be allocated to CMACGM is essentially where they’d beoperating anyway.

story of the week

Seizing an opportunity, Jamaica’s bold and riskytranshipment plan is reverberating across theCaribbean. Greg Miller has an exclusive report

Caribbean

Page 7: Fairplay 22 Sept 2011

www.fairplay.co.uk

Other questions have been raised aboutwhat exactly CMA CGM would be spendingits $100M on, and when. Hylton reportedthat the carrier’s investments should beginin 2012 after a final lease has been signed,and be completed within three years.

Because Gordon Cay was built onreclaimed land, the carrier’s investmentswould be focused on strengthening theyard to allow for full containers stackedsix-to-eight high, strengthening the berthface to allow for deeper draught andbringing in new cranes.

A CMA CGM official told Fairplay that itsportion of Gordon Cay would have capacityfor 1.75M teu/year by 2015. The officialsaid the KCT deal would allow it to “operateseveral lines deploying ‘New Panamax’ shipsafter the canal expansion is complete”.

The government will be responsible fordredging to bring draught from 15m to17-17.5m, a project that would accom-modate not just the CMA CGM-allocatedfacilities but the entire property. “We knowwe have to dredge, whether or not thisdeal goes through,” said Hylton.

The crucial negotiations with CMA CGMand Zim have yet another twist: they areunder way concurrently with the PAJ’slong-brewing plans to sell its equity andcover its debt obligations.

Questions have emerged about therelationship between the CMA CGM leaseproposal and the future privatisation.Hylton said those tracks were separate.

He said that after CMA CGM made thelease proposal, KCT’s privatisation adviser,PricewaterhouseCoopers, concluded thatit “would not, in their view, affect theprivatisation process”.

The potential complication is that if theCMA CGM deal is approved, the carrier’sterminal operating arm would agree to

manage the allocated facilities for 35years. Yet the KCT privatisation, when ithappens, would, presumably, put theentire property out to bid for purchase bya major international terminal operator.

So who would eventually manage thesection of Gordon Cay allotted to CMA

CGM? That question would be dealt with inthe lease agreement to be signed by year-end, said Hylton. He also emphasised thatin any future privatisation, both CMA CGMand Zim would be offered an equity stake.

How KCT’s multiple schemes pan outwill have sweeping implications for futurebusiness planning for the entire Caribbean

transhipment sector. If KCT can success-fully seal long-term agreements with bothZim and CMA CGM, secure dredgingfunding, develop Fort Augusta and sell itsequity, then Jamaica will become a farmore dominant force. If not, competitorsare anxious to pick up the pieces. F

‘I know other ports havegone to Zim and madeoffers. I would be naïve tothink they wouldn’t’

story of the week

PAJ chair Noel Hylton (right) with CMA CGMexecutive director Rodolphe Saade and Jamaicatransport minister Mike Henry (centre), at the MoUsigning in August

22 September 2011 5

Page 8: Fairplay 22 Sept 2011

Theoretically, liquefied naturalgas (LNG) is supposed to bringglobal natural gas prices intogreater equilibrium, à la crude,but it hasn’t worked out that wayas regional prices move evenfurther apart.

A new report by IHS CERAreveals how three entrenchedpricing regimes – Asia, Europeand North America – are dictatingspot LNG flows. Gaps betweenthe three are widening, despite agreater availability of ‘flexible’cargoes not bound for fixeddestinations. In the AtlanticBasin, the US import market hasbecome increasingly irrelevant,with America’s Henry Hub pricelanguishing below $4 per millionBritish thermal units (M Btu).

CERA believes the US willremain oversupplied as a result ofdomestic shale gas and a lack ofexport capacity, with non-competitive pricing to persist.

In Europe, spot pricing islinked to the National BalancingPoint (NPB) hub. “Unlike NorthAmerica, the [European] marketis not oversupplied,” noted CERA.NBP has been hovering around

$9-10/M Btu and is predicted toreach $11.80/M Btu this winter.

But the big driver of today’sspot LNG moves is the PacificBasin, thanks to the surprisinglyhigh premiums on offer. Asianbuyers paid $13.38/M Btu forspot cargoes in July and regionalpricing has since topped $15.

In a perfect market, Asianbuyers should be paying justenough over NBP to covershipping costs and divertcargoes from competing biddersin Europe.

This thesis held true in late2010 and early 2011, but not inrecent months.

“Rather than paying justenough to outbid competition,

Asian short-term prices haveescalated well above NBP. TheJuly premium for Asian cargoesover NBP came in at $4.32/MBtu, the widest spread sinceMarch 2009,” CERA noted. Asianbids for Middle Eastern cargoestrumped America’s by more than$10/M Btu.

The Asian premium can bepartly explained by the highershipping costs of routes fromliquefaction plants in the MiddleEast and Africa compared withshorter voyages to Europe. Thiseffect is heightened by the 150%increase in LNG tanker charterrates over the past year, which isbeing passed along to shippers.

However, the current Asian

Pricing chasm pulls spot LNG to AsiaAsian buyers are nowpaying a huge premiumto snare cargoes fromEurope and America,reports Greg Miller

premium “is much greater thanjustified by shipping differentials”,maintained the analyst. Clearly,another factor is in play.

The key, it believes, is thedifference between ‘flexible’cargoes and ‘available’ cargoes.“The lack of available shippingcapacity is limiting the amount ofLNG that can make its way toAsia, causing buyers to bid up thecargoes that do make thejourney,” the report stated.

There are no indications that theAsian premium will disappear soon.The natural ceiling for Asian spotdeals, set by long-term contractpricing, is around $20/M Btu.“There is still a lot of runningroom,” said CERA.

Asian demand is being furtherboosted by Japan, which mustreplace offline nuclear capacity.“The more time that passeswithout a plan to restart Japan’snuclear facilities, the greater thecountry’s demand for LNG forpower generation will grow,”CERA commented.

To the extent shipping capacityis available, spot LNG cargoesshould increasingly divert towardsAsia, as they have for each of thepast four months.

“The volume of LNG headingout of the Atlantic to the Pacifichas grown considerably,” reportedIHS CERA, which predicted thatthe disparate prices underpinningthis trend “will remain apart”. F

LNG imports by region 2008-13 (M tonnes)

� �� ��� ��� ��� ��� ���

Middle EastAtlantic BasinPacific Basin

2009

2010

2011

2012

2013

‘The longer without a plan torestart Japan’s nuclear facilities,the greater its demand for LNG’

[Source:IHSCERA]

� 22 September 2011 www.fairplay.co.uk

Container ships: Charterers poised to pick up more bargains Sale and purchase: En bloc deals dominateMid-range tankers: Painless Indian naphtha drop-off Capesizes: Uncertainty deters potential buyers

Fairplay subscribers have access to complete listings of newbuildings, ship sales, fixturesand bunker prices on the Fairplay website. To access, go to www.fairplay.co.uk/markets

Page 9: Fairplay 22 Sept 2011

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Other

Meat/poultry

Fish/seafood

Exotics

Deciduous

Dairy

Citrus

Bananas

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Other

Meat/poultry

Fish/seafood

Exotics

Deciduous

Dairy

Citrus

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markets

More breakbulk reefers cannibalisedReport highlights thechallenges to specialisedfleets from refrigeratedcontainers, writesMichael Hollmann

Tough competition from thecontainer lines will continue tosqueeze out conventional reefership capacity at a rapid pace in thecoming years, according to a newreport from London-basedconsultancy Drewry.

If current trends prevail, thespecialised reefer fleet coulddwindle from 691 ships today toonly 476 by 2015, its ReeferShipping Market Annual Reviewpredicts. Scrapping programmesby owners of conventionaltonnage saw an average of 36vessels heading to Asian recyclersbetween 2008 and 2010 whilethe newbuilding orderbook hasdropped to zero for the first time,Drewry said.

Containerisation of perishableproducts is forecast to increase to74% by 2014. The container lines’share of overall reefer carryingcapacity could even reach 95%.However, just as in the standarddry container sector, carriers arepushing capacity up too fast.

“Given the high number ofnewbuildings scheduled to bedelivered, this suggests downwardrate pressure,” commentedDrewry associate Susan Oatway.

Also, beyond 2015, containerlines will find it harder to achievefurther market share gains as thepotential for containerisationdwindles, the report says. This isbecause many of the seasonalhigh-volume commodity trades

that remain are ideally suited tospecialised reefer services. “It isthese that will ensure itscontinuing – and profitable –future, albeit on a smaller scalethan in previous years.”

So far, this year has been aroller-coaster for breakbulk reeferoperators and shipowners, withspot rates crashing to rock bottomin 2Q11 from very firm levels in1Q11. “Civil unrest in North

Africa and the Eastern Mediterra-nean deprived the market of keydemand drivers,” explained UK-listed operator Star Reefers in itsrecent half-year report.

A Hamburg chartering brokertalking to Fairplay put the averagereefer spot rate today at $0.60-0.70/ft3 for modern and $0.50-0.60 /ft3 for older tonnage with aslightly firmer tendency. “Itmeans smaller older vessels canstill hardly recoup their operatingexpenses,” the broker said.

Worldwide, about 50 specialisedreefer vessels were put into lay-upor idle without employment thisnorthern summer, a fairly highnumber compared with past years.

One of the operators cuttingback on capacity was fruitmultinational Chiquita. It mergedits two conventional CentralAmerica/North Europe servicesinto one loop, the broker pointedout. Instead the group is nowbelieved to be booking more of itscargo on MSC reefer containerservices into Bremerhaven.

Fixing activity in the periodmarket for reefers is anticipatedto go up in the coming weeks andmonths with a lot of charterscoming up for renewal. Ships thatwere fixed for a multi-year charterback in 2007 at levels about $1/ft3 would now be facing marketlevels of $0.80-0.85 /ft3, anotherbroker told Fairplay. F

Total seaborne trade of perishable reefercargo by commodity, 2010

691 current fleetof specialisedreefer ships

estimatedsize of reeferfleet in 2015476

22 September 2011 �www.fairplay.co.uk

Dairy

[Source:Drewry,SextantConsultancy]

Page 10: Fairplay 22 Sept 2011

8 22 September 2011 www.fairplay.co.uk

The prospect of a post-holiday rallyin period rates has been steadilydwindling in recent weeks, withinflated availability levels in mostsize classes now casting a longshadow over the market.

Charterers are calling the shotsagain, extending or fixing tonnagefor flexible periods at bargainrates, although their pleasure willbe tinged with frustration aboutmounting losses on many freightroutes into Europe and the US.

The average charter rates theyare incurring on fresh fixturesdeclined by about 2% last week,according to the ConTex, andowners should be bracingthemselves for what promises tobe a very challenging low seasonthis winter.

“Given the scarcity of newbusiness compared with thegrowing list of spot/prompttonnage, we see little chance of arecovery or even a halt in thedecline in the near future,”warned a UK chartering broker.

Broking houses from Hamburgand Copenhagen echoed thatsentiment in their commentarieslast week, lamenting the lack offresh business amid the flurry ofshort-term contract extensionsnow dominating activity.

Statistics show spot availabilityof charter-free tramp vessels hasreached alarming levels in theupper size classes, not seen sincethe early stages of the chartermarket recovery in 2010. One

Hamburg broker estimated spotavailability in the 4,250teu sizeclass at eight ships worldwide andin the 3,500teu class at awhopping 19 units.

Increased relet activity amongthe container ship operatorscoupled with a general decline inrequirements because of a flatcargo peak season are leavingmore big ships without employ-ment opportunities. And this iseven ahead of the historicallyquiet fourth quarter, which sawdaily hire levels slip by more than10% in previous years.

London broker BraemarSeascope warned in its latestmarket round-up that thepressure from the Panamax

segment “is seemingly taking itstoll on the sizes below”. Panamaxrates have already nosedived by36% to 46%, depending on periodlengths and regions, brokers said.

19unitsspot availability in the 3,500teusize class

A number of fresh fixtures andextensions of 2,700-2,800teu andof 3,000-3,500teu types revealeda sharp decline in charter values inthese segments, too. These includethe 3,359teu ER Melbourne, which

Container ship chartererspoised for more bargainsPressure on charter ratesis reaching the sub-Panamax sectors and arate recovery is unlikelysoon, brokers say

extended a short flexible periodwith Maersk Line at a weak$9,500/day with delivery atAlgeciras last week. The geared3,091teu Letavia achieved$12,000/day in a six-month periodwith CMA CGM in northeast Asia,although this is hardly more thanthe going rate for the smaller2,500-2,800teu types.

“Pricing in the larger sizes iscertainly out of kilter with thesmaller feeders and this looks setto continue,” commentedanother UK broker.

Out of touchThe ConTex values 24-monthperiods for 2,500 and 2,700teutypes at $13,217 and $13,659/day, respectively, but suchdurations are currently out oftouch with the market. Instead,ships are increasingly fixingshorter or flexible periods at wellbelow $12,000/day, in the hopethis might cover them throughthe quiet season to the northernhemisphere’s spring or summernext year. The gearless 2,732teuPassat Spring fixed a six to 12-month period with MISC inSoutheast Asia at $11,450/day,while some others only securedvery short periods or roundvoyages at about $12,000/day.That could leave them exposedthough during the winter.

One of the more stable areasof the market is the midsize1,700teu segment, which sawsome ships fixing at about$10,000/day – above theConTex rate – for immediatespot positions. For example,Korean operator KMTC had topay $10,200/day in a four tofive-month period extension onthe 1,740teu Cape Nelson fromthe end of September in Pusan.Steady fixing activity in this sizeclass over the recent weeks hasled to a lack of prompt supplyfor the end of September intoearly October requirements,brokers said. F

markets

The 2,732teu Passat Springwas fixed for a six to12 month period with MISC in Southeast Asiaat $11,450/day [ Photo: Dietmar Hasenpusch ]

‘Pricing in the larger sizes iscertainly out of kilter with thesmaller feeders and this looksset to continue’

Page 11: Fairplay 22 Sept 2011

22 September 2011 9www.fairplay.co.uk

A number of multi-ship sale andpurchase deals were concludedover the past week, although themarket currently lacks obviousdirection in either main sector.

Recent improvements –possibly seasonal – in the Balticdry indices may have put atemporary brake on falling bulkervaluations. However, the balanceof opinion about prospects for2012 remains mainly pessimistic,considering the macroeconomicoutlook and expectations ofgrowing tonnage supply.

Sumitomo is believed to havegiven up in its attempts to securemore than $30M for itsKamsarmax Triton Osprey (built2007 Universal, 81,448dwt), byagreeing a sale price of about$28M from Mykonos Shipping.There are currently a couple ofolder Panamaxes under firmnegotiation, with the pricesrumoured to be at levels ratherlower than achieved before.

Precious Shipping of Thailand,previously a Handysize specialist,is said to have been the buyer ofthree prompt-delivery Supramaxresales from Taizhou SanfuShipbuilding in China at $26.5Mper unit. The 57,000dwt shipswere originally contracted byOskar Wehr. Indonesian interests,meanwhile, are thought to havepaid $22.5M for Young Spring(built 2002 Oshima, 53,023dwt)which was sold by the originalcontracting owner, Ta-TongMarine of Taipei.

Handysize values continue toslip, sale by sale. Orient Marine’sopen-hatch type Aladdin Rainbow(built 1999 Kanda, 32,260dwt)has reportedly been committed at

$16M, compared with the$17.5M paid in June for thesimilar Crimson Forest (built 1999Hakodate, 31,727dwt).

In the tanker sector, TitanOcean has continued to dispose ofits single-hull FSOs, withPetrobras said to have paid$72.7M en bloc for Ticen Ocean(built 1991 Daewoo,284,497dwt), Titan Orion (built1992 Hyundai, 284,480dwt), andTitan Aries (built 1993 Daewoo,302,493dwt). These are destinedto serve the Brazilian oil major’sstorage requirements and, evencompared with the alternative ofscrapping, the price levels lookquite modest.

Sinochem is believed to havepurchased the stainless chemicaltanker sisters Isabel Knutsen andMaria Knutsen (built 2000 and2001 Gijon, 22,377dwt) forabout $22.5M each, en bloc.

The price for the ships, whichboth have 24 cargo tanks, is moreor less in line with recent sales ofJapanese stainless units. How-ever, the Chinese major might

have, arguably, paid a smallpremium for a pair of ships withhigh specifications.

Leon Trading of Greece isthought to have paid about $20Meach for Sekwang Shipping’sMarineline-coated sisters RoyalStella andRoyalOrion (built 2009Sekwang, 19,997dwt) at a sheriff’sauction in Singapore. With IMO 2chemical notations but withcoated tanks, the vessels have lesscargo flexibility and inherentmaterial value than stainless ships.Nonetheless, in the event of amarket recovery, the modest pricelevel paid for such modern Korean-built units may prove to be asuccessful long-term investment.

In yet another en bloc chemicaltanker deal, the Norwegian-controlled, coated ships SichemPadua and Sichem Pandora (built1993 and 1994 Hyundai,9,215dwt) are believed to havechanged hands for $4M each,with unidentified Greek buyersthought to be involved.

In the smallest range of tankersales, five of a series of Chinese-

En bloc sales dominateMore deals are beingdone but the outlookremains pessimistic

built product tankers havereportedly been sold for $6Meach to UK-based interests. Theships involved are Brixham,Mumbai, Harlington and Kiel(built 2009-2010 RongchengShenfei, 5,500dwt) and theRmeil (built 2010 RongchengShenfei, 6,174dwt).

Technomar is believed to haveconcluded another purchase andcharter back deal for largecontainer ships. Orient Overseas’OOCL Japan, OOCL Britain, OOCLSingapore and OOCL Netherlands(built 1996-97 Mitsubishi,67,473dwt) are believed to haveachieved $32M each with timecharters back to the sellers at$27,800/day, or the bareboatequivalent, in each case.Delivered in time for thehandover of Hong Kong toChinese rule, these were from thefirst series of 5,300teu over-Panamax ships built for the Tungfamily’s container line.

Overall, the firmness of scrapprices continues, with India takingthe lead in terms of numbers ofnew projects while Chineserecyclers are showing greaterwillingness to pay up in order tokeep their dry docks occupied.Perhaps the most significant salein the latter respect was the$480/ldt reportedly paid byChinese buyers for the single-hullSuezmax Shen Non II (built 1991CSBC, 25,545ldt), a distinctimprovement on the recent rangeof $440-$450 which hasprevailed this summer.

Alang breakers show no sign oflosing an appetite for newprojects, even when the deliveryposition of the vessel involves alengthy repositioning voyage. Asan example of this, scrappingreports list Indian interests as thepurchasers of Soponatas’sPanamax tanker Estrecho deMagallanes (built 1991 Zaliv,15,991 LDT), at $440/ton, basisdelivery ‘as is’ in Chile at the endof the year. F

markets

$27,800/daytime charter back agreement or the bareboat equivalent reported for fourOOCL containerships, each 67,473dwt, 5,300teu

Falling Handymax values:Aladdin Rainbow is typical[ Picture: World Ships ]

Page 12: Fairplay 22 Sept 2011

The versatile medium-range (MR)products tanker market shouldcushion any impact from decliningIndian naphtha exports.

India’s annual naphtha exportshave reached 106M tonnes since2008. But recent reports suggestthe figure is set to drop owing torising demand from India’sexpanding plastics industry. Indiannaphtha demand is expected togrow by 11.45% year-on-year.

MR rates for the WC India-Japanand the WC India-Singapore laneshave begun softening, althoughthis could also be because ofrecently ended month of Ramadan.On 18 August, WC India-Japanrates averaged W175 and WC India-Singapore rates averaged W215.

Last week, WC India-Japan ratesaveraged W151 and WC India-Singapore rates averaged W190.

Indian naphtha consumptiondropped from a high of 13.9Mtonnes in 2006-07, to 10.1Mtonnes in 2009-10, beforerecovering gradually to 10.7Mtonnes in 2010-11.

MR tanker operators areunconcerned, telling Fairplay thattheir vessels’ small sizes enablethem to easily find alternativeemployment. MR tanker poolHandytankers’ managing directorKristian Lohmann said: “The bignaphtha trading pattern is AG-Japan and it is usually transportedon LR2s. Handytankers transportsnaphtha but it is mainly fromAlgerian refiners.

“Even with a weak market inIndia, Handytankers can still seizeopportunities elsewhere due tothe wide area we trade in.”

Brokers agree with Lohmann’sassessment, pointing out goodemployment opportunities in thecross-AG and intra-Asia markets.

‘For everyIndian cargo,there are five-to-six MiddleEastern cargos’

W175freight rates for India-Japan route on18 August

“Rates are very profitable dueto tight tonnage availability andcharterers’ demands for short

Painless Indian naphtha drop-offStrong intra-regionaltrades would cushionimpact of falling exports

turnaround times. Voyages lasttwo-to-three days so slowsteaming does not apply here. Forevery Indian cargo, there are five-to-six Middle Eastern cargoes,”said one Singapore-based broker.

Reported fixtures show cross-AG MR rates have headed northmonth-on-month.

Cross-AG rates range from$230,000-$275,000, on a lump-sum-per-voyage basis. Riskierlocations such as Iran and Iraqcommand premiums. Last week,Trafigura took TORM Carina for aUAE–Iraq voyage for $350,000.

Gasoil, gasoline and Iraniannaphtha are among the productsthat are commonly shippedwithin the AG.

But MR tanker operators are inno rush to divert ships to the AGas intra-Asia rates are comparable.

Last week, Shell took Vinalines’Dai Minh for $285,000 for a

Uncertainty detersCapesize S&P

Doubts over the sustainability ofcurrent Capesize spot rates andother factors have ensured thatresale prices continue to lag behindfreight levels.

Just last week, bankrupt KoreaLine reportedly tried and failed tosell 2005-built Begonia, for whichthe highest offer, reportedly fromChinese parties, was $37.5M.

That was the second failedCapesize resale in two months,after Sanko Steamship’sunsuccessful attempt to sell

newbuilding Sanko Partner toGreek interests for $45M. Lastweek, Norwegian brokerLorentzen & Stemoco reportedthat NYK Line sold 1994-builtSuma (renamed Glory Apollo) toSea Star Ships Management inChina for $14.5M.

In a similar transaction inMarch, Hong Kong-basedVermilion Overseas Managementsold 1996-built Cape Azalea(renamed Cape Ioanna) to Greekinterests for $23M. Analystsagree that uncertain freightlevels are the main reason forsluggish asset prices.

Greek shipbroker Intermodal’sanalyst George Eliades said: “Most

markets

10 22 September 2011 www.fairplay.co.uk

shipowners are still sceptical aboutwhether the timing is right forthem to make a move. The feelingof ‘too low to sell and too high tobuy’ is dominating the market. Itseems most owners are pacingthemselves for an unpredictablequarter and indeed for theunpredictable years to come.”

Lim Sim Keat, CEO ofSingapore-based Pacific ShippingTrust, is one such owner. He toldFairplay that, for now, he had noplans to expand his Capesize fleet.

PST took delivery of ShagangHongfa from Hyundai HeavyIndustries on 5 September. A sistership, Shagang Hongchang, is

Potential buyers stillthink resale prices coulddrop further

charterers’ demands for short Dai Minh

‘Capesize freight rates aredependent only on demand forsteel and power generation’HsuChihChien

Page 13: Fairplay 22 Sept 2011

scheduled to be delivered soon andboth ships have been chartered toChinese steel mill Jiangsu Shagangfor 10 years at $27,000/day.

Lim said: “I don’t foreseecurrent rates to be sustainable asthe orderbook-to-fleet ratio is stillsubstantial. There are severalsecondhand Capesizes on sale but

markets

22 September 2011 11www.fairplay.co.uk

Thailand-Singapore trip and BPtook Tanker Pacific Manage-ment’s Pacific Crystal for$295,000 for a Map Ta Phut-Singapore voyage.

“Shipments regularly move onthe South Korea-Singapore,Singapore-Australia, andSingapore-Japan lanes. Firmingrates have encouraged charterers

to request period charters of one-to-two years,” said the broker.

At present, period charter ratesfor MR tankers approximate to$14,000/day.

Voyages to pirate-infestedareas in the Red Sea and off EastAfrica remain rewarding for risk-taking owners.

A broker quoted W270 for an

AG-East Africa voyage, translatinginto daily earnings of $17,000after deducting voyage costs.

French shipbroker BarryRogliano Salles made a similarassessment.

“The MRs have been busy witha consistent flow of intra-regional moves. Cross-MEGvoyages are fixing at about the

$280,000 lump-sum levels andAG-Red Sea is going at$850,000,” said BRS.

The cross-AG market is doing sowell that BRS says owners areunwilling to fix AG-UK-Continentvoyages, which are priced at$1.8M/voyage.

Shipbroker Simpson Spence &Young concluded that as Taiwan’sFormosa Petrochemical Corp isset to restart its 700,000 tonnes/annum naphtha cracker thismonth, Asia’s naphtha backward-ation is set to strengthen on firmdemand and tight supply.

Mitsui OSK Lines is optimisticabout its MR operations,expecting more naphtha exportsfrom Singapore to the Far East.

“With some Indian refineriesdue for maintenance soon, wealso expect more cargo, mainlydistillates, to move fromSingapore to India. It might causetight vessel supply in Singaporeso we will position our vessels inthe Singapore-Japan range,” saidan MOL spokeswoman. F

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older vessels are not fuel-efficientand current bunker prices make ituneconomical to operate theseships. Because of this, we preferto invest in newbuildings.”

Courage Marine chairman HsuChih Chien told Fairplay hebelieved volatile Capesize freightrates mean owners shouldconsider carefully beforecommitting. The company hasjust one Capesize vessel.

The Taiwanese shippingveteran said: “Capesize freightrates are dependent only ondemand for steel and powergeneration. Congestion in majordry bulk ports or a slight uptick indemand will make rates go up.Conversely, freight rates quicklygo down when demand dips.

“Analysts’ consensus is that theCapesize market will staydepressed over the next two-to-

three years. Massive newbuildingdeliveries could mean really goodpre-owned bargains by then.Today’s situation, where prices arealmost the same for all bulkersizes, is really silly. So I would waitlonger before buying a Capesize.”

Greek shipbroker GoldenDestiny’s analyst Maria Bertzele-tou told Fairplay that on average,no more than five bulkers havebeen sold every week. The lastrecord of year-to-date activity inthe bulk carrier segment was inthe week ending 13 August, whennine units were reported sold.

“It is true that there has been asignificant rally in the dry sector,driven by the substantialearnings for Capesizes due tofirm Chinese iron ore demand,but there is still hesitation aboutthe solidness of the market as wemove towards the end of

September,” said Bertzeletou.“Spot and period chartering

activity has shown signs ofstrength for all vessel sizes,floating at levels above operatingexpenses,” she continued, “butthere is always a time lagbetween the direction in thefreight markets and asset prices.”

She told Fairplay Capesizeprices dived when spot rateslanguished in 1H11 and it wouldtake some time for asset valuesto recover.

She said: “Buyers just recentlysaw new asset levels after waitingfor months when Capesizeearnings struggled to remainabove $10,000/day. Now themarket has shown the first signs offirmness with the Baltic Dry Indexsurpassing the 1,700 mark, playersare waiting to see what will be thenew direction post-September.” F

$37.5Moffer for 2005-built Begonia.The sale failed[ Photo: Courage Marine ]

Baltic clean tanker rates, West Coast India to Japan

TC12Route description: 35,000 tonnes

Naptha Sikka (WCI) to Japan

Page 14: Fairplay 22 Sept 2011

�� 22 September 2011 www.fairplay.co.uk

shippingmarkets Weekly summary of all the keyindustry indices and data

Container ship Timecharter Assessment

[Source:BalticExchangedata][Source:Ham

burgShipbrokers’Association

(VHSS)]

Type

1,100teu

1,700teu

2,500teu

2,700teu

3,500teu

4,250teu

[Source:BalticExchangedata][Source:BalticExchangedata]

F M A M J J A S O N D J F M A

�Q�� �Q�� �Q�� �Q�� �Q��

A S O N D J F M A M J J A S O N

�Q�� �Q�� �Q�� �Q�� �Q�� �Q��

[Source:Hamburg

Shipbrokers’Association(VHSS)]

[Source:BalticExchangedata]A S O N D J F M A M J J A S O

�Q�� �Q�� �Q�� �Q�� �Q��

1,500

1,200

900

600

300

0

Index

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

Index

30,000

25,000

20,000

15,000

10,000

5,000

0

$/day

700

600

500

400

300

200

100

ConTex

Baltic dry indices BDI: 1,814 -24 (-1.3%)Outlook: In the Baltic Capesize index forthe iron ore trade from Brazil to China, ratessoftened about a $1.00 to $26.77/tonne andlost $0.63 to $10.92 on Western Australiato China. Brokers suggest major charterersare trying to contain the recent gains in theCapesize market where rates have reachedhighs for 2011. Panamax grain markets havefirmed for early ship availability from the USGulf Coast to the Far East at $25,000/day plusa $500,000 ballast bonus. The South Americangrain season is winding down with trips to theUK/Continent at $15,250/day plus a $450,000ballast bonus. Supramax grain rates from theUS Gulf Coast have firmed to $32,500/day.

Container indices ConTex: 533 -11 (-2.0%)

Baltic tanker indices BDTI: 681 9 (1.3%) BCTI:646 -13 (-2.0%)Outlook: A small hopeful firming sign forVLCC spot rates from West Africa to the LOOPwas the gentle increase to W46.9. From theGulf softening fuel prices improved the timecharter equivalents (TCE) for the TD1 route by$2,904 to -$12,420/day; less negative but stillthe same worldscale of W34. Suezmaxes fromthe Baltic Sea to Mediterranean saw rates jump13 points to W82.3 which lifted the TCE fromnegative levels to $10,168/day. West Africa toPhiladelphia rates firmed to W70.89 and morethan doubled the TCE to $8,776/day. Aframaxrates saw firming on the North Sea to UK/Continent (TD17) route to W97.5. Elsewhererates were similar to last week.

Outlook: Over capacity and a drop inenquiry because of mid-autumn holidays inAsian countries saw another 2% drop in theConTex week-on-week with most significantlosses afflicting the Panamax sector. Pressureis also filtering through to the 2,500-2,800teutypes which are now fixing below $12,000/dayfor shorter and flexible periods and so wellbelow the ConTex average based on 24 monthperiods. The 1,700teu midsize types show moreresilience amid tighter availability for promptpositions in Asia, according to brokers.

8 Sept 15 Sept

$7,687 $7,545

$9,785 $9,634

$13,419 $13,217

$13,920 $13,659

$15,149 $14,767

$17,694 $17,054

-5.6% Capesize Index

This week: 3,008 3 MH: 3,342Last week: 3,185 3 ML: 1,738

+3.6%

+3.2%

-0.9%

Panamax Index

This week: 1,746 3 MH: 1,796Last week: 1,685 3 ML: 1,475

Supramax Index

This week: 1,446 3 MH: 1,446Last week: 1,401 3 ML: 1,244

Handy Index

This week: 677 3 MH: 721Last week: 683 3 ML: 641

VLCC TCE

This week: -$7,195/dayLast week: -$9,431/day

Suezmax TCE

This week: $9,472/dayLast week: $1,748/day+441.9%

Aframax TCE

This week: $483/dayLast week: -$656/day+173.6%

MR-TCE

This week: $7,196/dayLast week: $6,766/day+6.4%

+23.7%

BFA BDI 4Q11: 1,559 BFA BDI 1Q12: 1,338

Page 15: Fairplay 22 Sept 2011

22 September 2011 13www.fairplay.co.uk

'/> 2)=$&) -CA>7>CA>CB &<B/=,-B3 =CD&,-C> ;<>) &CA F/-77-C2 7,-#> -CA-#>F! C>6F &C&)3F-F! -C;=,D&B-=C% #=<CB>,7&,B3 #,>A-B ,-F+ -CB>))-2>C#>4 (=, D=,> -C;=,D&B-=C 7)>&F> 9-F-B 6664$<C+>,6=,)A4#=D

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EUROPE 380CST 180CST MDO MGOD ANTWERPD FALMOUTHD GREAT BELTD HAMBURGD ROTTERDAMD ST PETERSBURG

MEDITERRANEAN 380CST 180CST MDO MGOW AUGUSTAW FOS/LAVERAD GIBRALTARD ISTANBULD OFF-MALTAD PIRAEUS

AFRICA 380CST 180CST MDO MGOD ARZEWD CANARY ISLANDSW DURBAND OFF-NIGERIAW DAKAR

S O N D J F M A M J J A S O

�Q�� �Q�� �Q�� �Q�� �Q��

Bunkerworld index1,700

1,600

1,500

1,400

1,300

1,200

1,100

1,000

BW380, BW180 in centi StokeBWDI for distillate fuels

For online bunker information:www.fairplay.co.uk/markets orwww.bunkerworld.com/prices

Index

For online bunker information: www.fairplay.co.uk/markets orvisit www.bunkerworld.com

MIDDLE EAST 380CST 180CST MDO MGOD DAMMAMD FUJAIRAHD JEDDAHD SUEZ

ASIA 380CST 180CST MDO MGOD CHENNAID COLOMBOD HONG KONGD KAOHSIUNGD SINGAPORED SOUTH KOREAD SYDNEYD TOKYO

AMERICAS 380CST 180CST MDO MGOD BUENOS AIRESW HOUSTONW LOS ANGELESW NEW YORKW PANAMAD SANTOSW SEATTLED VALPARAISOW VANCOUVER BCW VENEZUELAN PORTS

Bunkerworld prices [ Source: Bunkerworld ]

Latest end-of-week prices listed in $ as at Monday 19 September 2011.D=delivered, W=ex-wharf. Ports listed alphabetically by region.

Outlook: The BWI showed theaverage price of bunker fuel as beingrelatively stable at the end of last week.Global average bunker prices fluctuatedduring the week but by Friday, theBW380 index firmed by $2.00 to$672.50/tonne and the BWDI wasunchanged at $992/tonne.

At the beginning of the week, theSingapore bunker market saw softprices but firmed strongly on Friday. Anaverage of $674.50/tonne for IFO380centistoke (cSt) was seen, $33/tonneup from Monday’s price, by the closeof the week average marine gasoil(MGO) prices were at $953/tonne.Market players commented thatdemand had been relatively weak dueto high prices. Onshore stocks of fueloil rose to 21.275M barrel in the portlast week, according to data publishedby International Enterprise. Market

commentators predicted that stocksshould continue rising towards the end ofSeptember. October is also expected tosee heavy Western arbitrage inflows, withover 3.5M tonnes booked so far, accordingto Reuters.

In Rotterdam, tight avails werereported during most of the week bysome suppliers. The price for IFO380 cStproduct closed on Friday at $652/tonneand MGO prices closed at $958/tonne.

However, there were mixed reports fromsome sources; one player mentioned thatrumours of tight avails were unfounded.By the close of the week, prices ended firmin the bunker market in Fujairah. Averagedelivered IFO380 cSt prices closed up at$676.50/tonne and MGO prices reached$1069.50/tonne. In Houston, IFO380 cStprices finished at $651/tonne and MGOat $982/tonne. According to the UnitedStates Department of Energy, crude oil

inventories fell 6.7M barrels last weekwhile gasoline stockpiles rose by 1.9Mbarrels which may have a downwardinfluence on bunker prices.

On Friday, crude oil futures contractson the Nymex slipped to $87.96/barreltrimming its fourth straight weeklygain and longest winning streak sinceJuly; a result of concern that Europeanplans to solve its debt crisis may fail.Brent, which closed at $112.22/barrel,saw little change last week; accordingto chart analysis by Citigroup it maybe headed toward $150/barrel, with asubsequent impact on bunker prices.

Bunkerworld Indices BW380: $672.50 $2 BW180: $695.50 $0.50 BWDI: $992 $0

$636.50 $656.50 n/a $941.00$680.00 $721.00 n/a $1,004.50$656.00 $688.50 $940.00 $976.50$653.50 $673.50 n/a $967.00$634.50 $657.50 n/a $942.00$516.50 $528.00 $720.00 $842.50

$662.00 $697.00 n/a $985.00$651.00 $693.00 n/a $978.00$659.00 $688.50 $962.00 $983.50$682.00 $703.00 n/a $1,002.00$657.00 $679.50 n/a $958.00$655.00 $682.50 n/a $958.00

$701.00 $726.00 n/a $1,011.50$675.00 $695.50 $981.00 $992.00

n/a $676.50 $1,139.00 $1,148.00$700.00 $734.00 n/a $1,018.00

n/a n/a n/a $1,062.50

$675.00 $680.00 n/a $1,072.00$659.00 $681.50 n/a $1,059.50$714.00 $747.00 n/a $1,117.00$695.00 $737.00 n/a $1,090.00

$706.00 $799.00 n/a $1,134.00$714.00 $735.50 n/a $1,062.50$666.50 $674.50 $938.00 $948.00$689.00 $698.00 $981.50 $996.50$653.00 $663.50 $916.00 $927.00$683.50 $705.00 $966.00 $976.00$777.00 $790.50 n/a $1,106.00$722.50 $732.00 $997.00 n/a

$669.00 $699.00 $1,106.50 $1,095.00$641.00 $674.00 $985.50 $966.00$658.00 $687.00 $988.50 n/a$660.00 $690.00 $1,007.50 n/a$652.50 $694.00 $1,030.00 $1,022.00$685.50 $707.00 n/a $1,017.50$659.00 $686.50 $1,026.00 n/a$734.00 n/a $1,197.50 n/a$674.50 $717.50 $1,098.50 n/a$655.00 $695.00 n/a $1,020.50

Page 16: Fairplay 22 Sept 2011

�� 22 September 2011 www.fairplay.co.uk

Sale & purchase All details given in good faith but without guarantee

For full listings of newbuilding orders and deliveries: see www.fairplay.co.uk/markets

Newbuildings [ Source: IHS Fairplay ]

For full listings of sale and purchase deals: see www.fairplay.co.uk/markets

To get the very latest information on shipbuilding activity, subscribe to the DailyNewbuilding News email service. Visit www.ihsfairplay.com or email [email protected]

CoNtaiNer & MultipurpoSe

aVoNBorG, alaSKaBorG and atlaNtiCBorG:(general cargo ships) sold en bloc by Wagenborg Shipping,Netherlands, to CITGO Petroleum, US, $73.50M. Avonborg:2009. 17,407dwt, 11,864gt, 962teu. Built Hudong-Zhonghua, Wartsila/15kt. Alaskaborg: 2009. 17,407dwt,11,864gt, 959teu. Built Hudong-Zhonghua, Wartsila/15kt. Atlanticborg: 2008. 17,356dwt, 11,864gt, 959teu.Built Hudong-Zhonghua, Wartsila/15kt.

terra BoNa (container ship) ex-La Bonita: sold bySinga Star, Singapore, to PT Tanto Intim Line, Indonesia,$8.40M. 1993. 22,308dwt, 16,869gt, 1,304teu. Built ShinKurushima, Mitsubishi, 12,961bhp/19kt

BulKerS

lorD BYroN (bulk carrier) ex-Blue Star: sold by AnthonyGiavridis Maritime, Greece, to undisclosed interests,

Russia, $5.70M. Last sale: $17.30M (2007), 1985.25,694dwt, 14,889gt. Built Imabari, B&W/13kt.

taNKerS

HiGH CeNturY: (oil products tanker) sold by d’AmicoSocieta di Navigazione, Italy, to Nathalin, Thailand, $27M.d’Amico purchase option taken in July transferred toNathalin. Last sale: $23.80M (2011), 2006. 48,676dwt,28,799gt. Built Iwagi, MAN-B&W/15kt.

SN FeDeriCa (oil products tanker) ex-White Dolphin: soldby Finservice, Italy, to Venice Shipping & Logistics, Italy,$26.50M. Three-year time charter back at $15,000/day,Last sale: $32.50M (2010), 2003. 72,344dwt, 40,763gt.Built Hudong-Zhonghua, MAN-B&W/15kt.

iSaBel KNutSeN and Maria KNutSeN: sold enbloc by Knutsen OAS Shipping, Norway, to SinochemInternational, China, $45M. Isabel Knutsen (products

tanker) ex-Chembulk Savannah: 2000. 22,377dwt,13,753gt. Built Naval Gijon, MAN-B&W/16kt.MariaKnutsen (products tanker) ex-Chembulk Barcelona: 2001.22,171dwt, 13,753gt. Built Naval Gijon, B&W/16kt.

HoWa : (products tanker) sold by Sampo Unyu, Japan,to Petrolift Group, Philippines, $9.20M. 2002. 8,298dwt,5,123gt. Built Fukuoka, Mitsubishi/13kt.

NeWBuilDiNG reSaleS

HelGa SelMer, tHoMaS SelMer and iDaSelMer: (bulk carriers) sold en bloc by clients of TaizhouSanfu, China, to Precious Shipping, Thailand, $79.50M.Helga Selmer: 2011. 57,000dwt, 32,957gt. Built TaizhouSanfu Ship Engineering, MAN-B&W/14kt. Thomas Selmer:2011. 57,000dwt, 32,300gt. Built Taizhou Sanfu ShipEngineering, MAN-B&W, 10,956bhp/14kt. Ida Selmer:2011. 57,000dwt, 32,300gt. Built Taizhou Sanfu ShipEngineering, MAN-B&W, 11,510bhp/14kt.

SeleCteD NeWBuilDiNG orDerS reporteD WeeK eNDiNG 16 SepteMBer 2011

Shipbuilder No owner/operator Delivery type CapacityKitanihon 6 Zodiac Maritime 2013/8 Chem/oil prods tanker 19,800dwtSTX Rauma 2 Eide Marine 2013/3 Well stimulation vessel 31,000dwtSamsung 1 Thenamaris 2014/12 LNG tanker 160,000m³SeleCteD DeliVerieS reporteD WeeK eNDiNG 16 SepteMBer 2011

Vessel Shipbuilder owner/operator Delivery type CapacityAmazon New Times Dynacom 2011/9 Crude oil tanker 163,000dwtBaosteel Emotion Namura MOL 2011/9 Ore carrier 226,434dwtConfiance SPP Christian F Ahrenkiel 2011/9 Bulk carrier 34,970dwtEagle Texas Tsuneishi AET 2011/9 Crude oil tanker 107,500dwtGolden Enterprise Jinhai Heavy Golden Ocean 2011/9 Bulk carrier 79,471dwtHanjin Samarinda New Century Hanjin 2011/9 Bulk carrier 115,000dwtIndustrial Force Sainty Jiangdu Jungerhans 2011/9 General cargo ship 14,358dwtJewel of Tokyo IHI Marine Emirates Trading 2011/9 Bulk carrier 56,300dwtKimberly C Jiangsu Yangzijiang Carisbrooke 2011/8 General cargo ship 6,750dwtKing Harold New Century König 2011/9 Bulk carrier 80,000dwtLiberty Island Saiki HI Marubeni 2011/9 Bulk carrier 37,000dwtMaersk Cunene Hyundai Samho AP Møller 2011/9 Container ship 4,500teuMezaaira A STX Jinhae ADNOC 2011/9 Oil products tanker 73,400dwtRich Duchess II Sumitomo Fuyo Kaiun 2011/9 Crude oil tanker 104,280dwtRickmers Tianjin Xinshun Rickmers 2011/9 General cargo ship 17,409dwtSeastar Endurance Zhejiang Jingang Norbulk 2011/9 Bulk carrier 33,500dwtStar Borealis HHIC-Phil Star Bulk 2011/9 Bulk carrier 180,000dwtSTX Symphony Taizhou Maple Leaf STX Pan Ocean 2011/8 Bulk carrier 31,800dwtVishva Nidhi STX Dalian SCI 2011/9 Bulk carrier 57,145dwt

Page 17: Fairplay 22 Sept 2011

22 September 2011 ��www.fairplay.co.uk

For more information on fixtures see: www.fairplay.co.uk/markets

Fixtures [ Source: Maritime Research Inc / www.maritime-research.com ]

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Dry Fixtures

Cargo Vessel From To Tonnes Date $/tonne Chart Terms

Coal Polymnia, 11 Puerto Bolivar Rotterdam 150,000-10% Sep 26/30 14.25 SwissMarin FIO;50,000tShinc/25,000tShincCoal Coronado, 00, or sub, Gladstone WC India 75,000-10% Sep 10/20 21.50 SAIL FIO;20,000tSatShex/25,000tShincCoal Medi Lausanne, 06 Mobile Koper 70,000-10% Sep 20/30 22.25 Pioneer FIO;30,000tShinc/15,000tShincIron ore Oriental Nicety, 86 Tubarao Qingdao 190,000-10% Oct 20/30 23.00 Dreyfus FIO;ScLd/30,000tIron ore Steamer, (Cosbulk) Tubarao Qingdao 160,000-10% Sep 20/30 29.75 Minmetals FIO;ScLd/30,000tIron ore Daniela Schulte, 10 Guaiba Kaohsiung 90,000-10% Sep 15/30 30.75 CSE FIO;40,000t/38,000tIron ore Steamer Pointe Noire Piombino 75,000-10% Oct 1/10 15.00 Erdemir FIO;40,000t/40,000tIron ore Taskent, 03 Narvik Bakar 70,000-10% Sep 15/24 14.25 Cobelfret FIO;ScLd/18,000t

timeCharters

Consumption Vessel From To Dwt Date $/day Chart Terms

14k/52t Baltic Wolf, 10 Del Rotterdam Redel Pass Muscat 177,000 Sep 20/22 45,000 Kleimar TripViaNarvik/MEGulf14k/52t Nightwing, 06 Del Rotterdam Redel Skaw/CapePassero 170,000 Sep 28/30 26,500 CNR TransAtlRd14.5k Gl Xiushan, 11 Del Caofeidian Redel Sing/Japan 98,681 Sep 11/13 14,000 CNR AusRd13.8k Sea Breeze, 09 Del Kaohsiung Redel Sing/Japan 91,913 Sep 14/16 13,000 CNR IndonesiaRd;Relet14k/35t Clara, 06 Del Praia Mole Redel Mobile 77,073 Sep 16/19 15,750 U-SeaBulk TripOut;SteelSlabs14.3k/34.8t Francesco Corrado, 08 Del Tachibana Redel Sing/Japan 77,061 Sep 20/25 14,000 Cargill NoPacRd;Soyabeans14k/35t Captain P Egglezos,07 Del Off Recalada RedlPassMuscatViaMEGulf 76,559 Sep 25/30 25,000 ETA Dubai TripOut+$600,000Bonus14k/34t Bahia Blanca SW, 11 Del SW Pass RedlSing/JapanViaUSGulf 75,700 Sep 20/25 25,500 Crossbridge TripOut+$550,000Bonus14.5k/33.6t Pearl C, 87 Del CJK Redel Sing/Japan 65,522 Sep 13/18 9,500 CNR NoPacRd;Grain14.5k Christine B, 09 Del Off Recalada Redel Sing/Japan 58,058 Sep 19/22 22,000 Bunge Trip+$425,000BB;Relet14.5k Ocean Future, 10 Del USGulf Redel Sing/Japan 55,771 Sep 18/20 30,000 Norden Trip out14k/31t Oceanqueen, 94 Del Surabaya Redel Bahrain Via Aus 42,529 Sep 15/16 12,750 Grandview TripOut;Alumina

Wet Fixtures

Cargo Vessel From To Tonnes Date Rate Chart Terms

Oil dirty Tenjun, 08 Ras Tanura USGulf 280,000 Oct 2 W34 Vela Part cargoOil dirty Umm Al Aish, 11 Rotterdam Singapore 270,000 Sep 26 $2,850,000 Unipec PtC;Lump sumOil dirty Katsuragisan, 05 ME Gulf Japan 265,000 Sep 24 W46 CosmoOil dirty Antarctica, 09 W Africa China 260,000 Sep 26 W42 UnipecOil dirty Minerva Doxa, 07 Novorossiysk UK/Continent Med 135,000 Sep 25 W67.5 VitolOil dirty Spyros K, 11 Ceyhan Terminal USGulf 130,000 Sep 30 W55 VitolOil dirty Yannis P, 10 W Africa UK/Continent Med 130,000 Sep 29 W62.5 CSSAOil dirty Hellesp Trooper,orSub ME Gulf USAtlantic USGulf 130,000 Sep 30 W47.5 ChevronOil dirty Stena Arctica, 05 Primorsk UK/Continent 100,000 Sep 25 W72.5 ST ShippOil dirty United Honor, 10 W Africa Trinidad 100,000 Sep 25 W77.5 AdmarOil dirty Proteas, 06 Hound Point UK/Continent 80,000 Sep 22 W97.5 Shell Part cargoOil dirty NS Columbus, 07 CPC Mediterranean 80,000 Sep 26 W87.5 Litasco Part cargoOil dirty Zaliv Vostok, 09 Sidi Kerir Spain 80,000 Sep 25 W82.5 Repsol Part cargoOil dirty Eagle Turin, 08 W Africa UK/Continent 80,000 Oct 1 W87.5 CSSA Part cargoOil dirty Green Warrior, 11 Ras Tanura Mumbai 69,000 Sep 25 W114 SCI Part cargoOil dirty SN Federica, 03 Seria Daesan 58,000 Sep 26 W127.5 HOB Part cargoOil dirty Fourni, 10 Black Sea Mediterranean 40,000 Sep 23 W117.5 SaicatOil clean SKS Delta, 10 ME Gulf Japan 75,000 Sep 15 W127.5 YNCC Part cargoOil clean Glory Express, 06 USGulf UK/Continent 38,000 Sep 11 W110 CNROil clean Nord Innovation, 10 Pembroke USAtlantic 37,000 Sep 16 W125 ValeroOil clean Jag Prakash, 07 Sikka Singapore 35,000 Sep 21 W192.5 Conoco Part cargoOil clean British Security, 04 Qatar Sohar 30,000 Sep 17 $270,000 Shell PtC;Lump sum

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16 22 September 2011 www.fairplay.co.uk

Economic trends: Apprehension make times tough Greek shipping: Banks’ merger spells good news for industryCruise crunch: Europe puts the squeeze on summer Venezuela: Currency controls are Catch-22 for shippers

When container lines sufferedhuge losses in 2009, theypleaded with their Caribbeantranshipment partners forconcessions, from tariff breaks toextended payment terms.

It looked like carriers wereback on track last year but itdidn’t last. Carriers are once moredeep in the red and concessionchatter has resumed.

“There used to be crises everyfive to seven years. Now it lookslike we’re back again after twoyears – the timing is gettingshorter,” said Carlos Urriola,general manager of Panama’sManzanillo International Terminal(MIT) and president of theCaribbean Shipping Association.

“It is really tough times for theshipping lines – we are basically

repeating 2009,” confirmed PoulHestbæk, Hamburg Süd seniorvice-president of the Caribbeanand Central America.

“Everybody, includingHamburg Süd, is focused oncutting costs. Whether it’slooking at tariffs or ways of doingthings more optimally, everysingle cost item is being exam-ined,” he told Fairplay.

Hamburg Süd’s volumes in theCaribbean Basin returned to 2008levels last year and have increasedin the single digits in 2011. “It’snot a volume issue, it’s a rateissue,” Hestbæk explained.

Last year, Hamburg Süd’srevenue/teu was still about 10%below 2008 levels. This year,revenue/teu has generallymatched 2010. “But the real killerin 2011 versus 2010 has been thebunker costs,” Hestbæk said,explaining that “very few lineshave been able to pass this on,which is why they are running atheavy losses”.

The higher volumes in theregion can be seen in the strong

Hubs face carrier pressure

Fairplay examines international trade and commerce developments across industries andsectors and puts them into a maritime context. Visit www.fairplay.co.uk for daily news updates

Transhipmentmargins could

be squeezed aslines struggle, reportsGreg Miller

Caribbean

‘There used to be crises every fiveto seven years. Now it looks likewe’re back again after two years.The timing is getting shorter’CSApresidentCarlosUrriola

Page 19: Fairplay 22 Sept 2011

throughput numbers of some, butnot all, the transhipment hubs.MIT’s volumes are up 20% year-to-date, according to Urriola.

Another indicator is the volumecarried by the Panama CanalRailway (PCR). PCR represents animportant link in a keytranshipment model, wherebyboxes are unloaded at Balboa onthe Pacific side and shuttled toCristobol and MIT on the Atlantic.

PCR president Tom Kenna toldFairplay the railway expected tomove 400,000 containers thisyear, the equivalent of 1.36M teuin transhipment terms. Thatrepresents an 11% increase versuslast year.

Meanwhile, Cartagenacontinues to grow at breakneckpace, with higher volumescreating temporary pressure.

“Cartagena is struggling withits own success. They have beencaught off guard by the surge involume,” Hestbæk conceded.Hamburg Süd is Cartagena’s topclient. “We are confident theywill push through it.”

According to GiovanniBenedetti, marketing vice-president of Cartagena terminaloperator SPRC: “Volumes werehigher than expected, so there is alittle pressure.” Following lastyear’s 25% jump, he predicted2011 throughput would increaseanother 20%, to 1.8M teu.

Capacity tightness will bealleviated by expansion at boththe Manga and Contecar termi-nals. By January, Manga’s capacitywill rise to 1.5M teu/year andContecar’s to 1.2M. This willbring total capacity to 2.7M teu/year from 1.9M at present.

SPRC is now weighing its nextgrowth phase. “The next threemonths will be very important tous,” Benedetti explained. Ifmarket feedback is positive, SPRCwill immediately approve the nextexpansion of Contecar, adding afurther 800,000teu/year after an18-month construction period.

Cartagena is just one of manyhubs plotting new capacity as thePanama Canal gears up for its2014 widening.

According to Urriola, the MITboard has approved investmentsto almost double capacity, from2.2M teu/year currently to 4M.He expects phased constructionto begin next year, although heunderscored that MIT would becareful to not overbuild.

Kingston planIn Jamaica, Kingston ContainerTerminal (KCT) recentlyannounced a project to increasecapacity from 3.2M to 5.2M teu/year. This plan comes despiteKCT’s lower volumes this year –the reverse of the double-digitgains reported in Colombia and

Panama. KCT expects throughputof 1.5M teu in April 2011-March2012, down 8% from the previousfiscal year.

Like Jamaica, Hutchison-controlled Freeport Container Port(FCP) in the Bahamas represents ahuge swath of available capacitythat could have major implicationsfor future routes.FCP CEO GaryGilbert told Fairplay that dredginghas recently been completed to18m on an additional 1,000m ofberth, bringing the total up to2,000m. A further 1,500m ofberth will be dredged by 2014.

FCP’s current capacity of 2Mteu/year could be easily expandedto 5M teu/year with theinstallation of additional cranes,which would be ordered whennew carrier clients sign on.

Gilbert confirmed thatnegotiations are well under waywith potential customers.

Just 105km off Florida’s coast,FCP is ideally located to serve as ahub for southeastern US ports.Gilbert believes several Americanports will not be dredged in timeto accommodate the larger shipsdeployed after 2014’s PanamaCanal expansion.

“We need 18-24 months leadtime to build the cranes and putthem in,” said Gilbert. “Workingbackwards from 2014, this meanswe’re talking about 2012.Decisions are being made rightnow [by carriers] on what to do in2014-15. We’re offering them agood option for those big ships.”

Complementing projectsplanned at existing Caribbeanhubs, new terminal players areentering the region. As previouslyreported by Fairplay, PSAInternational has agreed tooperate the new terminal underconstruction in Mariel, Cuba.While Mariel will be a domesticterminal, some believe thecontract is partly a ‘stalking horse’to position PSA for a future Cubantranshipment hub.

Last month, APM Terminalssealed a 33-year contract for the$992M Moin Container Terminalin Costa Rica. Although APM hasinsisted that the facility will bepurely domestic, multiplesources speaking to Fairplaypredicted that it would ultimatelyhandle transhipment.

All the new capacity in thepipeline, combined with thefinancial condition of thecarriers, will dictate future tarifflevels at hubs.

“The questions will be: howmuch of this additional capacitypeople are talking about willhappen, and what will thiscapacity be aimed at?” saidBenedetti. “We need to definewhat type of market we’reentering: a carrier market or aterminal market.” F

trade & commerce

22 September 2011 17www.fairplay.co.uk

Caribbean Basin GDP outlookCountry 2010 2011 2012Bahamas 0.5 1.0 0.5Barbados 0.2 2.1 2.9Colombia 4.3 4.8 4.2Dominican Republic 7.8 6.0 5.4Haiti 5.5 9.0 8.0Jamaica 1.3 1.2 2.9Panama 7.5 7.2 7.0Puerto Rico 2.1 1.2 0.9Trinidad & Tobago 2.3 2.9 3.0Venezuela 1.5 3.1 2.6

[ Source: IHS Global Insight. 2011 and 2012 GDP trends estimated ]

Freeport is actively seekingnew carrier clients tosupplement its MSC business[ Photo: Erik J. Russell/Keen iMedia Ltd ]

Page 20: Fairplay 22 Sept 2011

�� 22 September 2011 www.fairplay.co.uk

for market share in Barbados, headded, cutting margins for agents.

Shipping executives also toldFairplay of two parallel trends inCaribbean cargo sourcing: onefavouring regional sellers and theother favouring Asian producers.In the regional category, HamburgSüd SVP Poul Hestbæk cited a shiftin low-value production towardsthe Dominican Republic, ElSalvador and Honduras.

Smaller lotsThis trend coincides witheconomic uncertainty amongregional cargo buyers, who areseeking to buy smaller lots withshorter lead times. “If you order inChina, you may have to purchase100,000 units, three or fourmonths in advance. In CentralAmerica, you might be able toorder 1,000 units and get themdelivered every week. That’s muchless risk for buyers,” said Hestbæk.

A separate dynamic is pushingsome purchases towards Asia andaway from traditional US sources.“There is a consolidation ofdistribution companies in theCaribbean, where larger groupsare taking interests in the smallerislands,” said Paelinck. “Thisincreases their buying power andallows them to source directlyfrom the Far East.”

Hestbæk agreed: “With morebuying power, they don’t need togo to Miami or the Colón FreeZone.” In general, he said, “themarket for goods imported fromthe US and Europe is not growing,and may be shrinking, while Asianvolumes continue to pick up.” F

Fears for future economic growthare hampering recovery in theCaribbean as tourism strugglesand the reconstruction of Haitistalls. “More than anything else,it’s apprehension. The Caribbeanmindset is shadowing what’shappening in the US,” saidSeaFreight executive vice-president David Ross.

Speaking to Fairplay, Rossnoted that, after a solid first half,the autumn peak season ramp-upwas behind schedule. “Back inJanuary and March, the hotelswere talking about projects again,doing refurbishments they’d put

off the year before. I would say it’sa different song now.”

Bernuth Lines EVP TomPaelinck echoed this view.“Tourism has not been strongenough to restore investorconfidence and allow resortnewbuildings and refurbishmentsto go forward,” he said. Domesticcarriers had hoped such projectswould support fresh volumes.

Furthermore, the very largestproject in the region – thereconstruction of Haiti after theearthquake – remains stalled bypolitical uncertainty. Theexpected flood of constructioncargoes has not materialised.

“Nothing has happened. It hascome to a standstill,” reportedRoss. “There is so much moneypiled up waiting to go in there butno-one in their right mind is goingto put money in if they don’tknow who’s in charge.”

Several sources dividedCaribbean performance into two:countries reliant on tourism,which are struggling, and those,such as the Dominican Republic,that are supported by exports.

‘No-one in theirright mind isgoing to putmoney in if theydon’t knowwho’s in charge’

In the tourism category isBarbados. According to RobertFoster, former president of theShipping Association of Barbados,food and fuel inflation, combinedwith tourism’s malaise, hasdecreased local buyers’ spendingpower. Carriers are “skirmishing”

Domestic recovery sputtersApprehensionabout the

economic growth hasput the brakes on theislands’ cargo rebound

trade & commerce

Caribbean

Regional mainstay Caribbean Feeder Services (CFS)has new competition. Several years after it first con-sidered entering the Caribbean Basin, global operatorX-Press Container Line has finallymade its debut.X-Press’ new seven-day service linksManzanillo

International Terminal and Colón Container Termi-nal in Panama with Honduras and Guatemala. Its

14-day service links the two terminals with Curacaoand Venezuela.X-Press has been an established player in Asia for

almost four decades and claims to be the world’slargest feeder carrier, with services spanning Europeand Africa as well.X-Press is “a force in the market”, acknowledged

CFS director FrankWellnitz. Asked about this year’soutlook, he said demand improved slightly earlier inthe year, then stalled. “We expected more out of itbut it has levelled out,” he told Fairplay.Commenting on rates, he said: “We were not able

to get back all the way to the pre-problem days[2008] but it’s better.”

Feeder market heats up

Bernuth Miami Terminal:island demand is slipping in2H11 [ Photo Bernuth Miami ]

Page 21: Fairplay 22 Sept 2011
Page 22: Fairplay 22 Sept 2011

20 22 September 2011 www.fairplay.co.uk

shipping portfolios, which “have agood cross-section of owners”, willbe easy, said Petropoulos, because“although there is some overlap-ping, it is not extensive”.

As far as Qatar’s involvement inthe merger is concerned, it showsthat sovereign wealth funds(SWFs) from oil-rich countriesstill have the appetite to buydistressed assets.

“Bearing in mind that these arevery sophisticated investmentvehicles, they have longer-terminvestment horizons comparedwith other investors,” a Dubai-based research director for aLondon-headquartered invest-ment banking brokerage firmexplained to Fairplay. “SWFs havebeen better able to commit largerproportions of their portfolios tolonger-term investments despitethe challenging financial climate.”

The deal is beneficial for Qatar,which is now able to lower thecost of its existing 4% stake inAlpha Bank, purchased in 2008for about €18/share. Alpha’sshares now trade for €2.5.

Qatar expects to get an annual10% coupon from the new lenderuntil its three-year instrumentconverts at €1.70/share – a 20%discount to the pro-forma marketprice at the time of the deal. F

Marriages between Greece’sshipping families are common,but a different Greek shippingunion will spawn tangible industrybenefits. A union between AlphaBank and Eurobank will create thefourth-largest financier for Greekowners, after Royal Bank ofScotland, Deutsche Schiffsbankand Credit Suisse.

Alpha and Eurobank – ranked10th and 17th respectively withinGreek ship finance – are Greece’ssecond- and third-biggest retailbanks and big players in south-eastern Europe. The combinedentity, to be called AlphaEurobank, will become thebiggest bank in the region with€146Bn ($201Bn) in assets andmore than 1,000 branches acrosseight countries.

IHS Global Insight reportedthat the deal involves an exchangeof five new Alpha Bank ordinaryshares for every seven Eurobankshares, which will give theformer’s shareholders 57.5% of

Bank merger boosts ship financeMerger creates Greekshipping’s fourth-largest lender andfeeds Qatar’s appetitefor distressed assets

trade & commerce

A co-operation agreementbetween Wärtsilä and Shell, toaccelerate use of liquefied naturalgas (LNG) as a marine fuel, will“run for several years”, the

companies said and will targetfirst the US Gulf Coast beforeexpanding elsewhere.

“While this is an agreementwith Shell, it’s not an exclusiveagreement and we will continueto work with other suppliers,”Wärtsilä North America vice-president for ship power JohnHatley told Fairplay. “What Shell

brings is an enduring, securefuture supply that the marketdesperately needs so it knows itcan safely proceed with LNG.”

The use of LNG as a marine fuelhas yet to extend to any largedegree beyond Scandinavia.

Shipowners have beenreluctant to make costly invest-ments to retrofit vessels and thislow demand has made oil and gascompanies just as reluctant toinvest in supplying the market.

A new IHS CERA report sawno major market for LNG bunkerfuel until 2025, “especially sincea large number of new fuel oil-burning ships have recently beendelivered or ordered”.

However, oil and gas retailershave a “window of opportunity”to develop LNG distribution,CERA says. Those that do “shouldbe able to maintain a competitiveadvantage during LNG’s progres-sive rise to dominance”. F

LNG marine fuel pushEngine maker and oilgiant break LNG bunkerfuel’s US stalemate

the combined entity and Eurobankshareholders 42.5%. The largestshareholder in Alpha is thefounding Costopoulos family; theLatsis shipping and oil family is acore shareholder, as is the QatariInvestment Authority. Qatar willspearhead a capital increase of€3.9Bn, which will see the newoutfit’s capital ratio increase to14%, Global Insight said.

According to research con-ducted by Athens-based shipfinance analyst Ted Petropoulos,the two banks have significantshipping portfolios: Alpha’scurrently stands at about $2.5Bn;Eurobank’s at $1.4Bn. Their

merger, Petropoulos told Fairplay,“is a very positive turn” for Greekship finance. It creates a sub-stantial shipping portfolio and it’simportant to say that both bankshave very good relations withtheir owner-clients.”

According to Petropoulos, Greekship finance has been stagnant oflate but the merger, he believes,will “restore its dynamism andcompetitiveness” and “will give itnew direction. The banks’ increasein capital means that, as a mergedentity, they will be able to respondto requests of clients they couldnot respond to until recently”.

Joining Alpha’s and Eurobank’s

‘The mergedentity will beable to respondto clientrequests they

could not respondto until recently’

AlphaEurobank’sassests

shipping families are common, but a diff erent Greek shipping union will spawn tangible industry benefi ts. A union between Alpha

Bank merger boosts ship fi nanceMerger creates Greek

feeds Qatar’s appetite

‘The merged entity will be able to respond to client requests they

could not respond to until recently’

shipping families are common,

union will spawn tangible industry

Bank merger boosts ship fi nance‘The merged

could not respond to until recently’

Lenders coin a new bankfor Greek shipping[ Photo: Malcolm Latarche ] $200Bn

Page 23: Fairplay 22 Sept 2011

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�� 22 September 2011 www.fairplay.co.uk

accounted for 27%; SoutheastAsia 16.4%; China and the US15.4% each. The other majormarkets are Japan and the Gulfstates. MPEDA said frozenshrimp was the number-oneexport value item, accounting for44.2% of earnings.

“New markets such as Egyptand South Africa are expected tosupplement growth,” said SanduJoseph, secretary of the SeafoodExporters’ Association of India.

Rising freight and export costs,as well as mounting interestcharges, are causing concernamong India’s exporting commu-nity. Seafood exporters inparticular point out that higherterminal handling charges acrossports have hit their margins.

For example, Cochin Port, oneof the key seafood exportgateways, recently raised handlingcharges by $200/teu.

Exporters warn that higherexport costs in India, which iscompeting with other Asian,Southeast Asian and LatinAmerican producers, mayultimately make exports uncom-petitive in international markets. F

Leading shipping lines are vying toget a share of the targeted $4Bnseafood export market that India’scommerce ministry has earmarkedfor the year ahead. The target iswell ahead of the $2.8Bn outputfor seafood exports in 2010-11.

“Now the season has begun, weforesee very good movement,”said Kochi-based Asha Pillai ofCMA CGM. “We cater to theWestern European sector and wehave seen a very good increase inthe exports.”

A senior Safmarine executive inMumbai told Fairplay:“We willbeef up our reefer business to caterto the growing exports.”

In 2010-11, a total of 813,091tonnes of seafood was exported,up from 678,436 tonnes in theprevious year. Frozen shrimp,frozen fish and squid accountedfor most of India’s exports.

A majority of the reefers hastraditionally been handled bycontainer terminals in state-

Rising costs cloud India’s seafood surgeRising global demand forIndian seafood is feedingreefer operators

trade & commerce

From next week, China will beginimposing an updated version of itsso-called ‘port construction fee’on cargo coming and going atChinese ports.

The new, two-tiered levy – ajoint creation of the ministries offinance and transport – will eatinto shippers’ margins from 1

October and remain in force until31 December 2020, according toministry statements.

Domestic cargo is not subject tothe fee, only imports and exports.

Pointedly, foreign companieswill have to pay more than locals.Economists suggest the demarca-tion may be engineered to giveChinese companies a competitiveedge over foreign companies that,in some instances, are competitors.

The foreigners’ fee for bulkcargo is Rmb5.60 ($0.88)/tonne,

but Rmb4 if the import/export isauthored by a domestic business.Containers show an even biggerdifference. Domestic import/exporters pay Rmb32 ($5)/teuand Rmb48 ($7.20)/feu com-pared with virtually double forforeign import/exporters: $10/teu and $15/feu.

These fees will have to be paidby the shipper, the consignee ortheir agent.

The levy’s aim is to defray costsof construction of China’s ports.

Foreigners feel Beijing’s fiscal bitePort fee rise will hurtnon-Chinese shipping,reports Bouko de Groot

owned major ports such asJawaharlal Nehru Port (JNPT),Cochin, Chennai, Tuticorin, Vizagand Kolkata. Private ports, whilelesser beneficiaries, havenonetheless increased their shareof seafood exports. These includeAP Møller-Mærsk’s GujaratPipavav and Mundra.

The southern state of Tamil Nadureported $631M in seafood exportsales – the highest among allseafood clusters: terminals operatedby DP World and Port of SingaporeAuthority at Chennai Port andTuticorin Port respectively have

increased their share of totalexports. Other leading clusters are:Maharashtra ($499M), mostlythrough JNPT and Mumbai Port;Gujarat ($481M), mostly throughPipavav, Mundra and Kandla; andKerala ($442M), via Cochin Port.

While the traditional markets inEurope and the US continue to buymost of India’s seafood, China hasemerged a strong buyer, especiallyfor value-added products.

India’s Marine Products ExportDevelopment Authority (MPEDA)said exports grew by 34% in 2010-11: The largest market, the EU,

At present, a lot of port capacity isin the wrong place or lackingproper connections with thehinterland. In particular, largedrybulk terminals and domesticcontainer terminals are needed tomake China’s domestic growthand trades more efficient.

In a separate blow to foreigners,Beijing has decreed that expatri-ate employees must pay localsocial security taxes for servicesmost will never be able to use, ameasure to shore-up a socialsecurity net feeling the doubleeffects of an ageing populationand inflation. F

813,091 tonnesindian seafood exports 2010-11 [ Photo: Shutterstock ]

Page 25: Fairplay 22 Sept 2011

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• Directly located on the sea

• Excellent hinterland connections

• Draft at deep sea quay 16.5 m(LLWS)

• Deep sea quay 2000 m

• Inland shipping/shortsea quay900 m

• 75 km from Rotterdam, 38 kmfrom Zeebrugge and 55 km fromAntwerp

• Total surface area 140 ha

• Indicative transshipmentcapacity of deep sea quay2.5 million TEU

• Capacity for 5 deep sea vesselssimultaneously (ULCS>15,000TEU)

westerschelde container terminalzeeland seaports

rotterdam

hamburg

londonzeeland seaportsantwerpzeebrugge

Hans van der Hart, managing director Zeeland Seaports

Page 26: Fairplay 22 Sept 2011

‘The Caribbean is a year-round destination, not a six-monthdestination’ – Nathan Dundas, CSA cruise committee head

[ Photo: Greg Miller ]

The Caribbean cruise market isbeing seasonally scuppered byintense competition fromEuropean ports able to generatehigher income yields.

“From an industry standpoint,it’s no secret what’s going on,”said Carnival Cruise Lines (CCL)deployment vice-president TerryThornton. “Capacity has left theCaribbean between April andOctober because it’s chasingyields in Europe, where they cangenerate higher pricing.”

Although this is not the case forthe CCL brand, which is thelargest player in the region andremains staunchly year-round,the summer migration of RoyalCaribbean and other lines is nowraising alarms.

A Caribbean Tourism Organisa-tion (CTO) delegation met withthe Florida-Caribbean CruiseAssociation (FCCA) in June toaddress the issue. The CTO

Season shrinks for cruise portsAttractive Europehas taken a

big bite out ofCaribbean summercruise deployments

trade & commerce

24 22 September 2011 www.fairplay.co.uk

the western Caribbean. Whileplaces such as Cozumel are safe,from a perception standpoint, it’sMexico,” said Thornton.

“But our number-one concerngoing forward is fuel,” hestressed. This issue will beexacerbated by the comingimplementation of the emissioncontrol areas (ECAs) along the UScoast as well as in Puerto Ricoand the US Virgin Islands.

“The fuel implications of theECAs are more onerous in theeastern Caribbean than the west,”he explained. Thornton speculatedthat, in the future, lines may opt tosave on fuel by not travelling as farsouth as St Thomas.

That scenario is much morelikely if Cuba opens up. “Cuba isvery close [to Florida] so it wouldbe very good from a profitabilitystandpoint,” he said, citing fuel.Cuba’s opening “would probablychange our whole thinking,particularly given what’s going onin the US Caribbean [referring tothe Puerto Rico-USVI ECA].”

Thornton cited two newCarnival investments that shouldhelp address fuel costs. The first isa $65M cruise terminal on thenorthern shore of the DominicanRepublic near Puerto Plata. To becompleted in 2013 and used as atransit terminal, not a homeport,the facility “will be in a perfectlocation to help us on fuel costs”,said Thornton.

The second project in thepipeline is a dedicated privateisland for CCL in the n orthernBahamas. A location has yet to beidentified but Thornton confirmedthat CCL is now in the market.While CCL already calls at HollandAmerica’s private Bahamas island,Half Moon Cay, “it’s too far south.An island further north, closer toFreeport, would be very helpful onfuel,” he explained. F

Caribbean ‘For the first

time in anumber ofyears, we haveseen thewesternCaribbeansignificantlyunderperformthe easternCaribbean’Terry Thornton,Carnival

$65MCost of Carnival’s new cruiseterminal in Dominican Republic

‘The Caribbean is a year-round destination, not a six-month destination’ – Nathan Dundas, CSA cruise committee head

24 22 September 2011

warned of a “continued massiveloss of cruise business,particularly from the southern/eastern Caribbean, as a result ofseasonal repositioning”.

“The Caribbean is a year-rounddestination, not a six-monthdestination,” said Nathan Dundas,head of the Caribbean ShippingAssociation (CSA) cruisecommittee. He told Fairplay theCSA was seeking to play a liaisonrole with the CTO on theworsening seasonality issue.

There may not be much thatisland businesses can do toreverse the trend. “It looks likethe strategy [for Royal Caribbeanand others] is working, so I don’tsee everybody suddenlymigrating back,” said Thornton,who also chairs the FCCA’smarketing committee.

On a positive note, Thorntonpointed out that newbuildingsare increasing total Caribbeancapacity this year following fiveyears of relative stasis. Thecaveat is that the sheer size ofsome of the newcomers, such asRoyal Caribbean’s Allure of theSeas, limits the number of portsthat benefit.

Asked about regionaldeployment trends, Thorntontold Fairplay: “For the first timein a number of years, we haveseen the western Caribbeansignificantly underperform theeastern Caribbean.”

CCL gauges performance withthree measures: ticket price,onboard revenue and fuel cost.Even though Western routesburn less fuel, they are stillfalling behind.

“We believe US consumers arebad with geography and thehorrific safety and security issuesin Mexico are having an impact on

Page 27: Fairplay 22 Sept 2011

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Page 28: Fairplay 22 Sept 2011

Venezuelan currency controls havereduced the country’s ports tomere feeder status, say operatorswho feel they are being held toransom by the government.

“I don’t see it getting better. Infact, I see it getting worse,” saidFrank Wellnitz of CaribbeanFeeder Services (CFS).

The silver lining for companiessuch as CFS is that internationalcarriers have shifted en masse tofeeders versus direct Venezuelancalls to minimise servicedisruptions. “Apart from a fewservices, Venezuela has nowbecome a feeder country,”confirmed Poul Hestbæk,Hamburg Süd SVP of CentralAmerica and the Caribbean.

Venezuela feedering is a mixedbag for ports in neighbouringcountries. “It’s a positive because alot of direct services are not goingto Venezuela, so we’re receivingadditional transhipment,” saidGiovanni Benedetti, vice-president (VP) of Cartagenaterminal operator SPRC.

“However, we are negativelyaffected because, for services thatdo call in Venezuela, you neverknow when you’ll receive thoseships so it puts a lot of pressureson windows from an operationalstandpoint. It’s creating a mess,”Benedetti conceded.

The biggest issue for theVenezuelan shipping marketremains the tight currencycontrols introduced by thegovernment of president HugoChávez. Importers’ inability tofind enough dollars to cover

Carriers navigate Venezuela minefieldThe inability to repatriate

funds is also having a majoraffect on the multinationalretailers that fuel a large share ofimport cargoes.

Two US-listed retailers withvery high Venezuela exposure areColgate Palmolive (CP) and Avon.At the end of 2Q11, CP had$207M in bolivar-denominatedearnings it had yet to repatriate.Avon had $146M, with $76M inrepatriation requests languishingin the government queue.

Major importers like CP and Avonhave also taken huge hits fromVenezuelan currency devaluations.CP logged a $271M charge in 2010as it switched to hyperinflationaryaccounting for Venezuela. Avonwrote down $58.8M.

The situation worsenedfurther in January 2011, whenVenezuela abolished its 2.60bolivars/dollar exchange rate for‘essential goods’.

This suddenly pushed CP’sexchange rate to 4.30, promptingan additional $36M charge. Avonnoted in its most recent filingthat it was highly sensitive to

trade & commerce

26 22 September 2011 www.fairplay.co.uk

‘It is very difficult to repatriaterevenue collected in Venezuela’Hamburg Süd’s Poul Hestbæk

Ship operators,struggling to

repatriate whatthey earn, still can’tignore the market

Caribbean

‘It is very diffi cult to repatriate revenue collected in Venezuela’Hamburg Süd’s Poul Hestbæk

www.fairplay.co.uk

‘It is very diffi cult to repatriate revenue collected in Venezuela’Hamburg Süd’s Poul Hestbæk

freight continues to limitvolumes. Exchange regulationshave also made it extremelydifficult for businesses thatgenerate revenue in the countryto get their money out – includingcarriers. “It is very difficult torepatriate revenue collected inVenezuela,” said Hestbæk.

“We, as shipping lines, arebeing less favoured incomparison with airlines. Theairlines now have a systemallowing them to repatriatemoney collected in Venezuela.We do not. We are working on it

but, so far, we are struggling.“That is our biggest headache

at the moment – the lack of orreduced ability to transfercollected freight out of thecountry,” said Hestbæk.

Hamburg Süd is not alone.According to a VP of another majorinternational carrier who declinedto be identified: “The Venezuelangovernment recently made acommitment [to allow carriers torepatriate revenues] but it has nowbeen months and nothing hashappened,” she said. “They are notfulfilling this obligation.”

‘We are always waiting for thenext crazy act’

Venezuelan ports such as La Guaira (pictured) are suffering the effects ofcurrency ‘starvation’

[ Photo: Greg Miller ]

Page 29: Fairplay 22 Sept 2011

trade & commerce

22 September 2011 27

further devaluations.Smallerimporters are in an even moredire straits.

Small Venezuelan players arereportedly flocking to Colombianborder towns, exchanging bolivarsfor dollars at a premium, thenwiring dollars from Colombia tobanks overseas in places such asFlorida, where partners use thosetransfers to cover the cost offreight to Venezuela.

But the currency issue may notbe affecting all importers thesame way – depending on wherethey source globally.

According to SeaFreight EVPDavid Ross: “I don’t know if this

is a deliberate political shift,but some of our

customer base hastold us that it’s

easier to get foreign exchangenow if they’re buying goods fromChina than if they’re buyingfrom the US.”

On top of the currencyconundrum, carrier sources toldFairplay that operational and costissues at Venezuelan portsremain extremely challenging.

Shipping has grown weary of theerratic moves of the Chávezgovernment, worsened by hiscurrent fight with cancer that takeshim to/from Cuba for treatment.

According to the carrier VPwho requested anonymity: “Weknow what’s happening now andwe calculate that into our costs,but we are always waiting for thenext ‘crazy act’. The ports are notmanaged professionally,” shelamented, adding that major

changes were announced withnotice of literally one day.

Both this executive and Rosspointed to an escalating issueinvolving fines for empties.“There is a law in Venezuela, nowreally being enforced, that saysevery container that enters thecountry has 90 days to exit or it issubject to a fine or confiscation,”said Ross.

Catch 22“This creates a Catch-22 becausewhen you bring boxes in, thecustoms process takes a long timeand when you put a ship in to getyour empties out, you may nothave time [because of operationalinefficiencies at Venezuelanports] so you leave the emptiesbehind. But if you leave them

behind too long, you’ll be fined,”Ross said.

Yet despite all thesechallenges, most carriers havenot dropped Venezuela. Volumesare still huge, particularly fromChina, because Venezuela mustimport virtually everythingexcept oil. Carriers can also passhigher costs along to shippers.“Expenses are so high inVenezuela that virtually anynumber you put on the trade isjustified,” said one executive.

This executive believes thatcarriers have not pulled out ofVenezuela because the outlookglobally for the carrier sector is socloudy. “You cannot give up sucha big market. And because no-onepulls out, the Venezuelan govern-ment has power over us.” F

Small Venezuelan players are reportedly fl ocking to Colombian border towns, exchanging bolivars

wiring dollars from Colombia to banks overseas in places such as Florida, where partners use those

But the currency issue may not

same way – depending on where

According to SeaFreight EVP David Ross: “I don’t know if this

is a deliberate political shift,

customer base has told us that it’s

dire straits. Small Venezuelan players are

reportedly fl ocking to Colombian border towns, exchanging bolivars for dollars at a premium, then wiring dollars from Colombia to banks overseas in places such as Florida, where partners use those transfers to cover the cost of freight to Venezuela.

But the currency issue may not be aff ecting all importers the same way – depending on where they source globally.

According to SeaFreight EVP David Ross: “I don’t know if this

is a deliberate political shift, but some of our

customer base has told us that it’s

Economic problems, corruption, rampant crime, food,water and energy shortages will continue to drivepublic discontent with the incumbent president andgive a risk of periodic events of social unrest.Support from key former allies will continue to

crumble, but President Hugo Chávez’s reaction will beto try to concentrate executive powers even further.Venezuela has seen a growing role for Cuban

officials in the security forces, amid rumours abouta general state of discontent and growing tensionswithin the armed forces. Chávez’s strategy of tryingto instill an ideological component in the armedforces is likely to increase tensions, though a militarycoup like the one that took place in 2002 seemsunlikely in the short term.While the government looks vulnerable over

the short term, its medium-term prospects areboosted by its considerable control over publicspending and its current near-total dominance ofthe legislature. There have been doubts about thesustainability of public spending, but the stabilisationof oil prices, substantially above budgeted levels,and the temporary boost to state coffers as theglobal economy recovers are expected to enable thegovernment to maintain high levels of social spendingthrough its cronyistic anti-poverty programmes asthe 2012 presidential election approaches

insightIHS Global Insight

Hugo Chávez prays for betterhealth. Shipping prays for anew president [ Photo: Reuters ]

Page 30: Fairplay 22 Sept 2011

28 22 September 2011 www.fairplay.co.uk

For in-depth coverage of technological innovations see Solutions: www.fairplay.co.uk

Californian clean fuel regulationsand voluntary slow steamingmay reduce emissions butincrease warming, a new studyhas revealed.

Voluntary slowdowns byshipping companies “substantiallyreduce air pollution caused bynear-shore ships,” according to astudy by the US National Oceanicand Atmospheric Administration(NOAA). Despite this, the neteffect was to warm the atmo-sphere rather than cool it.

The project was funded byNOAA and the California Air

Resources Board (CARB) andconducted in close collaborationwith Maersk Line. Its findingswere published online last weekby the journal EnvironmentalScience & Technology.

The study examined a containership, Margrethe Maersk, while itwas operating under a 2009California regulation requiringships to switch to low-sulphur

fuels as they approach theCalifornia coast. This rule adheresto a voluntary state slowdownpolicy intended to cut pollution.

The research team found that

Emissions down, warming upLow-sulphur fuelregulations cutCalifornian emissionswhile adding to globalwarming, study shows

NOAA and the California Air The research team found that

before it switched to lower-sulphur fuel and slowed down.

A few days later, scientistsaboard the NOAA-sponsoredWoods Hole OceanographicInstitute’s research vesselAtlantis sampled emissions of thesame ship as it cruised slowlywithin the low-sulphur zone andfound that SO₂ levels fell by 91%,from 49g of emissions per kg offuel to 4.3g/kg.

UnexpectedParticulate matter pollutiondropped 90% from 3.77g/kg to0.39g/kg. Unexpectedly, thepaper says, black carbon levelsalso dropped by 41%.

The CARB statement quotedDaniel Lack, a chemist withNOAA’s Earth System ResearchLaboratory and the CooperativeInstitute for Research in Environ-mental Sciences, as saying thestudy “gives us a sense of what toexpect in the future, for thepeople of California, the nation,and even the globe”. F

For more on this story:Read the report atwww.tinyurl.com/CARB-shiptest

91%MargretheMaersk, whose emissions were tested in the NOAA research[ Photo: Dave Van Spronsen]

emissions of SO₂ and particulatematter dropped by as much as90%, a statement by CARB said.However, the paper also discussesthe net ‘radiative’ (warmingversus cooling) effect of the ship’sfuel switch and notes: “When themeasured emission reductions …are placed in a broader context,warming from reductions in theindirect effect of SO₄ would

dominate any radiative changesdue to the emissions changes.”

Two measurements were madein May last year. The first wastaken by a NOAA researchaircraft that flew over the shipabout 40 miles off the coast ofCalifornia. Researchers on theaircraft used instruments tosample the ship’s emissions

‘Placed in a broader context,warming from reductions in theindirect effect of SO₄ woulddominate any radiative changes‘

The percentage fall of SO₂ levelsrecorded when the ship entered thelow-sulphur zone

Page 31: Fairplay 22 Sept 2011

22 September 2011 29www.fairplay.co.uk

S-Class upgrade still to convince

The first of 10 – and possibly 16 –Maersk Line S-Class vessels beingenlarged in China is back inservice, as analysts question thenet advantage of the project.

Carsten Maersk, originally builtin 2000, was modified to carry1,418teu more than before at theBei Hai yard in Qingdao, China. Itis scheduled to complete theoperator’s ‘Capacity Boost’programme by the third quarter ofnext year.

S-Class ships were the first8,000+ teu boxships and the workbrings their capacity to about9,600teu, although CarstenMaersk is still listed on Maersk

Line’s website with its formercapacity of 8,160teu. MaerskLine’s vessel managementdepartment has justified theproject, which will add more than20,000 slots to the fleet’scapacity, by pointing to lower slotcosts and reduced CO₂ emissionsper container moved. It means“we’ll be able to be more com-

petitive and with a lowerenvironmental impact,” saidAbhijat Chahal, assistant generalmanager of vessel management.

The extra space has beencreated by raising the height ofthe wheelhouse and lashingbridges, allowing two more tiersof containers to be stowed ondeck. But this is just one of a

number of projects intended toboost fleet capacity by 52,000teu,Chahal told the MaritimeDenmark news agency. “It’sdifficult to rely only on new-buildings for the opportunity togain market share,” Chahal said.

Market conditions provided theopportunity, he explained. “Biggerships sailing at slower speeds, aswell as the development of portinfrastructure, have made suchstructural changes viable.”

Yet, analyst Alphaliner is not sosure about the project’s logic. Itpointed out in a report last monththat the extra boxes will be lightlyloaded, or empties, so “the ships’effective capacity in teu at 14tonnes [per teu] will remainalmost unchanged”.

In fact, there will be a slightreduction in deadweight,Alphaliner notes, because of theadditional steelweight added bythe conversion. F

technology

Doubts linger overMaersk’s logic in capacityboost programme

Carsten Maersk, left,and Charlotte Maersk.The superstructurehas been raised byinserting an 8.4mvoid space under thebridge deck[ Photo: Capt SvenningJensen/AP Møller-Mærsk ]

Spreader software lifts downtime problems

More than half of a terminal’sdowntime can be attributed toissues with spreaders, Swedishspreader manufacturer Brommahas claimed.

Vikram Raman, Bromma’s vice-president and commercialdirector, told Fairplay a generalbreakdown can typically beattributed 60% to spreaderproblems and 40% to other issues.

A terminal’s ability to offer areliable service to its shipping-linecustomers is key to its success, thecompany argues, and it becomesimportant to minimise the risk ofspreader-related incidents.

In response, Bromma hasdeveloped a suite of software

applications, known as Green Zone,that it says will tackle the problem.

It consists of two applications.The first, Fleet Doctor, monitorsthe operating functions of aspreader and checks it is operatingwithin its ‘green zone’ using theflow of information the spreadersends to the Fleet Doctorsoftware.

Bromma’s literature explainsthat performance is based on “thereliability of key spreaderfunctions, each of which shouldoperate within an optimumperformance range. When one ofthese functions moves from its‘green zone’… this is an indicationthat service attention is needed”.

When this happens, it is said tomove into the ‘yellow zone’ andterminal maintenance staff canaddress the issue to prevent furtherfaults that may cause downtime.

It can take maintenance staff along time to find out what theexact problem is using traditionalmethods of inspection, Brommasaid, but the Fleet Doctor toolcan identify the specific fault.

The spokesman told Fairplay

the most common cause ofspreader faults were loose wiresor wire breakage.

The second application,Roadmap, uses this information toidentify risk areas in a spreader orfleet of spreaders. It identifies the10 most frequent fault areas thathave affected performance to helpa terminal’s management teamplan maintenance scheduling andhence improve overall efficiency.

The Green Zone software canonly be used in conjunction withBromma spreaders and itsexisting spreaders can be retro-fitted. The system has been ontrial for 18 months on eightspreaders and is now being offeredcommercially. According to thecompany, it will be possible to addfurther applications to the GreenZone suite as further requirementsbecome apparent. F

Quick-fix software onspreaders can improveterminal efficiency

Existing Bromma spreaders, suchas this one, can be retro-fittedwith the software [ Photo: Bromma]

Page 32: Fairplay 22 Sept 2011

�� 22 September 2011 www.fairplay.co.uk

Shipping needs to keep a close eye on the regulatory environment, which provides guidelinesfor safeguarding life, property and the environment. Fairplay looks at the latest developments

Denmark sees action on crewing laws

Denmark’s owners hope changesto crewing laws will make theindustry more streamlinedand competitive.

One of the most importantchanges, which came into force inJuly, is a fund to protect aban-doned seafarers on Danish shipsanywhere in the world or onforeign ships in Danish ports. Thefund, which will be financedentirely by Danish shippingcompanies, will be managed bythe Danish Maritime Authority(DMA) in conjunction with theSeafarers Welfare Board.

Jan Fritz Hansen, vice-president of the Danish Ship-owners’ Association (DSA) told

Fairplay the amount would totalless than €1M ($1.3M)/ year. Butthe DMA emphasised that thefund was an interim measure.

DMA director-general AndreasNordseth said the changes were tosupplement incoming crewprotection laws. “Many issuesregarding the protection ofseafarers will be solved when theMaritime Labour Convention(MLC) 2006 comes into force. Butthe measures we have put in placewill have an effect in the interim,”he said. The scheme will supple-ment the MLC and cover the costsof maintaining an abandonedseafarer and his or her repatria-tion, he explained.

Other changes include theability to hire captains fromoutside the EU and a greaterreduction in tax payments byDanish seafarers who serve on

ships above 500gt engaged onlong international voyages.

Before this amendment,Hansen said, “it was stipulatedthat the captain should be an EUcitizen. It’s too early to see anymajor effects, but with thischange, up to 40% of captains canbe from outside the EU.”

FlexibilityThe DSA has lobbied for a year forthis change. “It offers us furtherflexibility to man our ships withqualified seafarers from the globallabour market” and optimise acaptain’s nationality to the crew,Hansen said. “For example, youcan use an Indian captain whensailing in the East and then maybea Danish captain when the sameship is used later in the Arctic,”but he emphasised that the newflexibility would not result in big

changes in Danish ships’ crews. Itis generally more expensive tohire seafarers from Europe, saidHansen, but this is not the casewith captains where “thedifference is not so great”.

The law change will not affectthe size of the crew employed inthe Danish shipping industry.

Tax allowances have increasedby 85% for Danish seafarers orseafarers living in Denmark andemployed on foreign-flaggedvessels – crew employed on shipsunder the International DanishRegister do not pay tax. But thisincentive does not apply to crewworking on dredgers or on regularpassenger services between theports of EU member states. Theirannual tax-free allowance will beraised from DKK56,900($10,455) to DKK105,000, butonly after approval by theEuropean Commission. There isno indication of how long thiscould take, the DMA added. F

Federal regulators are consideringlifting restrictions on the use offreight rate indices in transportcontracts as more carriers andshippers incorporate them to helpminimise rate volatility in USliner markets.

Acting on a recommendationfrom its Container Freight Indexand Derivatives Working Group,the Federal Maritime Commis-sion (FMC) agreed on 8 Septem-ber to initiate the process formaking a rule that would givemore leeway for ocean carriersand shippers to negotiate servicecontract rates linked to freightrate indices, such as the ShanghaiContainerised Freight Index, the

Drewry Freight Insight Index andthe Transpacific StabilisationAgreement (TSA) Index.

Lowry Crook, who chairs theworking group, acknowledgedthat while more than 50 servicecontracts using container freightindices for future price adjust-ments have been filed with theFMC, this is not a significantnumber when compared with the“many thousands” of contracts

Use of rates indices couldhelp liner markets, JohnGallagher reports

US examines contract rules filed without them.However, “it’s a trend, and we

are likely to see much more ofthem”, Crook told Fairplay.

FMC regulations currently statethat contract terms referenced inservice contracts must be“contained in a publication widelyavailable to the public and well-known within the industry”.

But it was only several weeksago that the TSA Index wasexpanded and made public. Andaccess to historical rates for otherindices were available only tothose willing to pay significant

Danish shipowners hopelegal changes will helpboost competitiveness

Page 33: Fairplay 22 Sept 2011

22 September 2011 31www.fairplay.co.uk

Estimated max climate financecontributions from developed countries

subscription fees.The working group is therefore

suggesting a change so that suchindices only have to be readilyavailable to the parties usingthem and the commission. Intheory, this change shouldencourage more use of presentand future container freightindices and would “removeunnecessary constraints anduncertainty from index-linkedservice contracts”, the FMC said.

Promoters of freight indicesclaim they can be a useful way forshippers to guard against volatilecontainer markets, particularlywhen used in conjunction withderivatives that hedge againstfluctuating rates.

“Ideally, indexes can be used assomething on which to baselonger-term contracts, whichbrings stability and predictabilityto rates, particularly to thoseshippers that have to budget their

transport costs many monthsahead of time”, Peter Gatti, vice-president of US shipper groupNational Industrial Transporta-tion League, told Fairplay.

Walter Kemmsies, chiefeconomist with transportconsultancy Moffatt & Nichol,believes indexing in-servicecontracts adds transparency to themarket. “Right now it’s difficult for

a shipper to tell if a rate increase bythe carrier is in line with themarket or not”, he said.

“If your carrier says it’s raisingthe container rate 10% to bringshipments over from Taiwan from$3,000 a box to $3,300, youmight say that’s horrible. But ifthe index has gone up 20%, yourealise it’s not so bad, because ifyou go somewhere else you’re

going to get a worse deal.”On the other hand, Kemmsies

said: “If you’re a large carrier andyou manage your costs effectively,you should be able to move withthe market and grow marketshare. If not, and you try toimpose your inefficiency throughhigher costs to your customer,you’re going to lose business.”

World Shipping Councilpresident Chris Koch points out,however, that both carriers andshippers have so far been reluctantto use indices. “When you sign acontract, you want certainty. Butwhen you pin that rate to an index,neither side knows what it’s goingto end up paying.”

He noted that the biggerquestion, aside from changesmade at the FMC, is to whatextent references to freight indiceswill be used in contracts goingforward. “How it will evolve overtime? I wouldn’t guess on that.” F

ICS responds toemissions tax report

The International Chamber ofShipping (ICS) has urged cautionin response to a report calling for atax on shipping’s carbon emis-sions. Its external affairs chief,Simon Bennett, told Fairplay 24 (8September): “This will onlyencourage governments thatwould like to keep the money forthemselves, rather than using it tohelp developing countries improvethe environment.”

He was responding to a reportfrom charities Oxfam and theWorld Wide Fund for Nature(WWF), Out of the Bunker – timefor a fair deal on shipping

emissions. This calls for a carbonprice of about $25/tonne, which,it said, would cost shipping about$25Bn/year – equivalent to about0.2% of the total value of globalshipping, the report said.

Bennett said if money were tobe raised in this way, it must berouted through an IMO fund,with the lion’s share being sentto environmental projects.“Developing countries would bemore likely to agree than if itwere to come through theUNFCCC [United NationsFramework Convention onClimate Change],” he said.

The charities’ report recom-mended that the IMO Assemblythis November pass a resolutionconfirming the need for a carbonprice for shipping emissions. F

Carbon taxes maynot reach their target,shipowners warn

‘When you sign acontract, youwant certainty’ChrisKoch

regulation

Country Approximate share of globalimports by sea %

Maximum climate financecontribution credit per year

Australia 1.50 $375MCanada 1.90 $475MEU 28.50 $7.1Bn

Poland 0.72 $180MBelgium 1.60 $400MFrance 2.60 $650MGermany 4.60 $1.10BnIreland 0.50 $125MItaly 2.90 $725MNetherland 2.30 $575MUK 3.90 $975MSpain 3.00 $750M

Japan 6.40 $1.6BnNew Zealand 0.30 $75MNorway 0.40 $100MUS 15.90 $3.9Bn

[ Source: Oxfam and WWF ]

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�� 22 September 2011 www.fairplay.co.uk

Jumping on the Koper wagon

It all looked so rosy when Fairplaysat down with Marcelino deLannoy in May 2010 as heprepared to take the helm ofCuraçao Ports Authority (CPA) ina carefully orchestrated handoverfrom long-time co-directorsRichard Lopez-Ramirez andAgustin Diaz.

The mood was upbeat, with deLannoy, Diaz and Lopez-Ramirezposing for celebratory pictures tomark the bright future ahead forthe CPA.

Curaçao was on the cusp ofindependence, via the historicdissolution of the NetherlandsAntilles on 10 October 2010.When de Lannoy spoke toFairplay prior to the handover, heappeared to have no idea that the‘10-10-10’ transition wouldherald a management maelstromat the CPA.

But it did. Following theelection of Prime Minister GerritSchotte, the CPA advisory boardwas restructured. In March 2011,de Lannoy was fired. He is nowsuing the CPA for reneging on hiscontract. Lawsuits have also beenfiled over disputed compensationto Lopez-Ramirez and Diaz.

Yet more legal action is focusedon CPA tug subsidiary KTKPanama. Prior to the new

government, de Lannoy hademphasised to Fairplay theimportance of international tugrevenues to the port authority’sbottom line. A key component ofthat strategy, KTK Panama, is nowin the process of being dissolved.“The KTK Panama situation hashurt the name of the CPAinternationally,” one Curaçaosource told Fairplay, adding thatin general “nobody really knowswhat’s going to happen [at CPA]and honestly I don’t think theyknow. They broke down the oldstructure, but now what?”

Carriers doing business inCuraçao have not reportedoperational fallout from the legaland political soap opera butquestions are being raised aboutthe CPA’s future vision.

Troubled times in CuraçaoThe NetherlandsAntilles’ dissolution

and Curaçao’snew government havereshaped port authority

Slovenian logistics groupIntereuropa has decided to muscleits way into moves to promoteAdriatic ports as the more cost-effective routes from the Far East,via the Suez Canal, than northern

European outlets. The moves arebeing orchestrated by the NorthAdriatic Ports Association onbehalf of its five members in Italy,Croatia and Slovenia.

In an Intereuropa report forthe first half of 2011, thecompany stated it planned to“open one or two new direct linesfrom Asia for our containerconsolidation services and,thereby, additionally strengthenour position in the market”.

From its base in Slovenia’s

rapidly expanding sole port,Koper, Intereuropa has seized therealisation that companies incentral Europe can save time andmoney by re-routeing their supplychains through the ports in thenorth Adriatic.

“Full container loads (FCLs)and less-than container loads(LCLs) have been expandingrapidly in recent years and there isa trend towards the optimisationof supply chains,” BojanBeskovnik, Intereuropa’s product

manager for intercontinentaltransport, told Fairplay.

This could mean that tinySlovenia will begin to punch wellabove its weight, he said.

“Throughput at the port ofKoper is increasing 30% annually,so Intereuropa sees the potentialin establishing new FCL and LCLlines, organising inland distribu-tion and offering hub warehousingin Slovenia,” Beskovnik noted.

These will then serve as aplatform from which distributionwould continue to other parts ofcentral and southeast Europe, headded. “We believe this approach

The business of shipping now encompasses movements of cargo by rail, road and inlandwaterway; maritime leaders are thinking beyond quay-to-quay. Visit www.fairplay.co.uk for more

Caribbean

Slovenian logistics groupurges companies tore-route supply chainsfrom northern Europeto the Adriatic

Fairplay asked CPA commercialaffairs manager Dimitri Cloosewhether he saw an impact on theport authority’s business. “Notyet,” he responded, but conceded,“everything is murky at themoment and the waters have tobe cleared”.

Cloose asserted that the demiseof KTK Panama does not implythat CPA will pull back from itsinternational tug strategy. Askedabout reports that CPA may hiveoff the KTK tug operationsaltogether, Cloose said he was notaware of such plans and pointedto the complications related toCPA debt obligations linked toKTK tug assets.

Cloose did emphasise oneinitiative that is moving forward:the second cruise mega-pier,which will be built alongside thefirst in Otrobana. He said CPAhoped to confirm constructionplans next year.

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2019The date PDVSA has a lease onthe important Isla refinery

22 September 2011 ��www.fairplay.co.uk

logistics & supply chain

will further attract new goods andnew clients to the north Adriatic,”he said.

As well as Koper, Intereuropahas a presence in a number ofother ports in south-centralEurope, namely Rijeka, Split andPloce in Croatia, Bar in Montene-gro, and Durres in Albania. Theaim, eventually, is to includethese fully in its expansion plans.

Beskovnik said: “We see theopportunity of further growth inthe field of shipping because wehave sea freight offices in everyport on the eastern coast of theAdriatic sea. The FCL and LCL

services will just be the firstlogistics leg in offering a full rangeservice to the market.”

But it is at home in Koperwhere Intereuropa will bechannelling most of its efforts –unsurprising, because the port

‘We believe thisapproach willattract newclients to theNorth Adriatic’

authority, Luka Koper, owns a25% stake in the logistics group.In addition, the port is ambitious,recently announcing that by 2020it will be recording total annualthroughput of nearly 28M tonnes.Local observers share the brash

confidence displayed by LukaKoper and its logistics partner,believing their combined energycould enrich their land as a whole.

Professor Elen Twrdy, dean ofthe Faculty of Maritime Studiesand Transportation at theUniversity of Ljubljana, toldFairplay: “With the shipping ofcargo from the Far East to thenorth Adriatic being some threedays faster than to other parts ofEurope and the ports’ congestionalso being significantly lower,Intereuropa’s new services shouldbe very good news for Luka Koperand for Slovenia too.” F

28Manticipated annual throughput intonnes at Luka Koper by 2020

There are also longer-termplans being considered for a newcontainer terminal in Bullen Bay.“With the Panama Canalexpanding and ships gettingbigger, the container port inWillemstad will be too small,”said Cloose. “We’ll have to look ata whole new terminal.”

The complication with the

Bullen Bay scheme involves thestevedoring contract with CuraçaoPorts Services (CPS). The originallanguage provided CPS withmonopoly service rights, not justfor Willemstad, but for any futurecontainer facility. That contract isnow in the process of beingrenegotiated, Cloose confirmed.

Meanwhile, CPA revenues

remain significantly reliant onservicing tankers calling at theIsla refinery, leased by Venezuela’sPDVSA until 2019. The refinery isback up and running after anextended shutdown but sporadicmechanical failures persist.

The Curaçao government’sultimate decision on the leasecould have major future implica-

tions for the CPA. With so manyquestions swirling around, Clooseacknowledged that a new vision isrequired. “We’re in a whole newphase with a whole new govern-ment. This takes time and itbrings uncertainties. That’s thereality. We have to get ourpriorities straight and really lookat what we need to do.” F

‘Everything is murky at themoment and the watershave to be cleared’

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Page 36: Fairplay 22 Sept 2011

Spanish broker and agent Bergémade the country’s nationalnewspapers recently with anupdate on the infrastructure ithas been developing over the pastdecade to handle Asian carimports. The hard news was thedecision to build three servicedepots equipped to take up to9,000 cars each in the east-coastport of Sagunto, for an outlay of€140M ($193M).

Taken in isolation, the storywas barely newsworthy. Bergé hasbeen steadily and successfullydeveloping such facilities indifferent Spanish ports and citiesfor more than a decade: Vigo andSantander in the north; Barcelonaand Tarragona in the northeast;Valencia in the east; and in Madridand Seville as inland distributionand service centres. The shippersBergé acts for at present are,among others, Japanese carmak-ers Toyota, Honda and Suzuki and

South Korean manufacturer Kia.What triggered the newspa-

pers’ excitement was thelocation: Sagunto. This ancientMediterranean port, whoseoccupation by Hannibal startedthe second, decisive, Punic Warbetween Rome and Carthage,made the headlines in the early

1980s, the last time Spain had agrave sovereign debt problem.The minister of industry of theday, by convincing the steelworkers of Sagunto and else-where that it was pointless tosubsidise steelmaking at twicethe price of the importedequivalent, helped to balance the

Spain opens the door to EuropePlanned Europeandistribution point forChinese cars needs fit-for-purpose rail links.Roderick Lee reports

Jakarta urges logistics developmentsState companies havevowed to work togetherto facilitate growth

More than 12 Indonesian statecompanies signed a memorandumof understanding on 15 Septem-ber to form Indonesian LogisticsCommunity Services (ILCS), abody to oversee the SoutheastAsian country’s development of

its logistics infrastructure.At the signing, state enterprises

minister Sumaryanto Widayatinreiterated the country’s need tostep-up development of itslogistics services, which lagbehind those of other countries inthe region. He warned that ifIndonesia’s logistics sector did notaddress the problem, it will fail toget in line with Jakarta’s MasterPlan for the Acceleration and

Expansion of IndonesianEconomic Growth (MP3EI).

“We need to cut logistics costs,”Sumaryanto said, pointing out thatthey represent about 30% ofIndonesia’s production costs and24% of GDP. In countries such asVietnam, Thailand and Malaysia,they have been reduced to 10%.

According to the World Bank’s2010 Logistics PerformanceIndex, Indonesia ranked 75th out

national accounts, a keyrequirement for gaining access tothe then Common Market –today’s EU.

Interestingly, the stories runby the general-interest newspa-pers based on the Bergé pressrelease did not specify theJapanese or South Korean

of 155 countries, well behindfellow Association of SoutheastAsian Nations members Singa-pore, Malaysia, Thailand, thePhilippines and Vietnam, whichranked 2nd, 29th, 35th, 44th and53rd respectively. According tothe World Bank, this is mainlydue to high port charges inIndonesia, and poor port infra-structure and services.

One of ILCS’s tasks will be toensure state port operator PelindoII and state telecoms companyTelekomunikasi Indonesia work

logistics & supply chain

�� 22 September 2011 www.fairplay.co.uk

total car capacity atprojected Saguntodepots27,000

Sagunto: made headlines in 1980sdebt crisis and again today[ Photo: Shutterstock ]

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logistics & supply chain

22 September 2011 ��www.fairplay.co.uk

vehicles Bergé has acted for inthe course of the past 10-15years. The term used was ‘Asiatic’,which in recent times hasbecome newspeak for Chinese.

The foregoing, which explainswhy Bergé found itself in thenews, does not detract from thefact that a large percentage ofChinese cars and light vehicleswill probably enter Europethrough Spain, thanks in the mainto Bergé’s foresight. But Saguntomay have a negative effect on theFord plant in Valencia, the Seatplant in Martorell in Cataloniaand the Citroën plant in Vigo.

Bergé y Compañía is one ofSpain’s most respected broker-ages. Managed centrally from itsbase in Madrid with offices in allthe country’s major ports, itconsistently declines to getinvolved in the cosy arrange-ments with port authorities,transport ministry bureaucratsand state-sponsored quangos thatplague the system. The firm wasfounded by a French family inBilbao in 1870 at the outset ofthe remunerative iron-ore tradebetween Spain and Britain.Bilbao in those days was also,with Barcelona and Santander,one of the key banking centres inSpain, and Bergé’s soundrelations with the bankingfamilies of the north has helped

keep it free of local servitudes.The bold decision of the

Spanish government in the 1980sto dismantle the national steelindustry produced positivemedium-term results. Forexample, some of the Saguntosteelmakers were re-employed inthe Ford plant set up outsidenearby Valencia, assembling partsforged in the US or Germany. Asimilar pattern occurred inMartorell, near Barcelona, wherea new complex was developed byItalian carmaker Fiat with thehelp of Catalan investors. US giantGeneral Motors set up a plant inZaragoza in north central Spainand French company Citroënfollowed suit in Vigo in thenorthwest. The children of thesteelworkers took degrees inlogistics, swapping hammers andtongs for laptops.

Bergé has stayed abreast of allthese changes. Its constant roll-out of efficient vehicle storageand distribution parks puts Spainin a good position to benefit fromthe influx of Chinese and Indianlight vehicles that will graduallyreplace the European fleets. Whatis required is for the Spanishgovernment to take the necessarysteps in terms of rail freighttransport to exploit this potentialsource of income to the full in anenvironment-friendly manner. F

together to create an integratedelectronic system for the logisticssector. Other companies will worktowards upgrading the overalltransport logistics infrastructure,which will connect centres ofgrowth, as well as remote andunderdeveloped areas.

“Enhancing national con-nectivity, in hard infrastructure orsoft infrastructure, is a must,”Pelindo II chief Richard Lino said.

Lino hopes ILCS will improvemonitoring of the shipment ofand the transfer of documents

and payments of sector workerswhile reducing bureaucracy. WhatIndonesia needs, he stressed, is“an integrated and efficientlogistics system”, to “reduce costsand time” and secure supplychains. He revealed that Pelindo IIis investing in new cranes thatwill help halve the present six-daycontainer loading times.

Pelindo II is also planning tobuild a $114M port in Sorong,West Papua, and is participatingin a tender to build a $2Bn port inNorth Jakarta. F

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�� 22 September 2011 www.fairplay.co.uk

Seven months after the launch ofits commercial operations, thesituation at DP World-runInternational Container Trans-shipment Terminal (ICTT) inCochin (Kochi) Port, southernIndia, continues to be chaoticbecause of India’s restrictivecabotage laws, which preventforeign vessels from operating ascoastal container ships. Theterminal is struggling to clear theoffloaded boxes despite any majorincrease in container volumes.

Under the existing cabotagelaws, foreign vessels are free tohandle export-import cargo, butcannot move containers from onedomestic port to another. They cando so only after seeking a no-objection certificate from India’sdirectorate general of shipping(DG Shipping), a process thatinvolves seeking consent fromdomestic shipowners.

India’s shipping ministry issympathetically consideringrelaxing the rules to help theterminal, but the Indian National

Shipowners’ Association (INSA) isopposing the move tooth and nail.S Hajara, president of INSA andchairman of state-run ShippingCorp of India (SCI), told Fairplaythe organisation would oppose anysuch move by the government.“We are making a fresh represen-tation. There is an adequate

number of Indian ships to handlecoastal containers,” he said.

Cochin Port Trust (CoPT) andDP World had approached thegovernment to relax the rules “atleast for a short span of time” socoastal containers could be

evacuated by foreign lines. Asenior CoPT official told Fairplayit had approached the governmentfor some relaxation, as theterminal was facing a crisis. “TheIndian fleet has only 13 vessels,with a combined capacity of12,165teu, are deployed forcoastal operations. This is grossly

inadequate to handle importcontainers. We require foreignvessels to do feedering.”

“For Indian vessels, there is a40% concession in port charges,which is an encouragement toincrease the Indian fleet.”

Cochin seeks relieffor cabotage headacheInterests clash as Indianrules mean port can’tclear containers

Rail changes for South African ore

South Africa’s Transnet logisticsgroup is to change its manganeseand iron ore supply chains.

Siyabonga Gama, head of

Transnet’s rail freight unit, saidon 15 September that thecompany would no longertransport manganese by rail toSaldanha, northwest of CapeTown, but will dedicate the linesolely to iron ore exports. Inaddition, it is looking at upgradingits manganese line to Port

The shipping ministry hasbegun consultations with allinterested parties. K Mohandas,shipping secretary, told Fairplay aproposal to relax cabotage ruleswas before the government, but afinal decision has yet to be taken.“We believe cabotage rules shouldbe tightened in the interests ofIndian shipping. But as far ascoastal movement for import/export containers is concerned, anexemption will help Indianterminals,” he said.

A senior DP World official inCochin said the terminal capacitywas being grossly underused.ICTT’s first phase was built with anannual 1M teu capacity. This delaynow has caused huge revenue lossto CoPT as well, since the terminaloperates on a revenue sharingmodel. “The port gets 33% ofmoney earned by ICTT under theconcession agreement. Last year,the port handled 312,000teu. Theterminal can take it to 775,000teuwith adequate feeder services,facilitated by relaxing cabotagerules,” said the official.

ICTT in Cochin was designed totake over containers sentthrough other major tranship-ment hubs such as Colombo,Singapore, Jebel Ali and Salalah.About 45% of India’s totalcontainer throughput is handledthrough these big terminals.Although ICTT aimed to handle775,000teu this year, it handledonly 136,000teu in 1H11. F

Elizabeth in Eastern Cape provinceand intends to vacate the terminalthere in favour of the Ngquradeepwater port in Coega, about20km northeast of Port Elizabeth.

A study on the rail line shiftand expansion is expected to becompleted by February 2012.

Gama said Transnet wanted to

logistic & supply chain

Transnet is to expand andmodify its manganeseand iron ore network

‘We requireforeign vessels

to do feedering’

increase capacity on its manganesesupply chain to between 18M and22M tonnes by 2018. It plans toexpand its iron ore line toeventually carry 90M tonnes,from a current 47M tonnes.

He said the company expectedto invest R62Bn ($8.3Bn) in thenext five years to upgrade andexpand its network, and that itwas considering involving theprivate sector in future plans. F

Cochin: terminal capacity ‘grossly underused’ [ Photo: Joseph Anto ]

Page 39: Fairplay 22 Sept 2011

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Page 40: Fairplay 22 Sept 2011

38 22 September 2011 www.fairplay.co.ukwww.fairplay.co.uk

Customer careCaribbean-style

SeaFreight’s heir apparent tells Greg Millerhow lean management pays off

decision-makers

DAVID ROSS

38 22 September 2011

SeaFreight’s heir apparent tells Greg Miller how lean management pays off

‘Whatever theissue is... one thingwe will not do, no

matter how badthe news, is lie’

In an era when sprawlingcorporations gobble upentrepreneurial firms witha robotic eye on quarterly

results, David Ross exemplifieswhat the big fish can learnfrom the minnows –particularly when it comes tocustomer service.

Most shipping executives learnthe ropes at a small regional firm,then graduate to working for a

global carrier. Ross, now executivevice-president (EVP) of SeaFreight,did the opposite.

The Trinidadian’s true shippingeducation came during a five-year

stint at then powerhouse

Nedlloyd in the late 1980s. But he foundhis calling at SeaFreight in 1995, joining ata time when the Florida-based Caribbeanline was little more than a start-up.

“As powerful as Nedlloyd was, theregional VP had a boss, and that boss hada boss, and that boss had a boss. Decision-making was not that easy,” Ross recalled.In contrast, SeaFreight’s small size allowscustomer issues to be immediately ‘run upthe flag pole’ from the front lines to Ross.

SeaFreight was so tiny when Rossjoined as VP of marketing that “titleswere almost irrelevant”, he told Fairplay.“Mornings would start at 7am and somenights went to 2am to make sure the billsof lading were done. It was about gettingthe freight to the ship on time, getting the

Caribbean

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22 September 2011 39www.fairplay.co.ukwww.fairplay.co.uk

decision-makers

DAVID ROSS[ Photo: Greg Miller ]

ship out, then waking up next morning tostart bookings for the next ship.”

SeaFreight has come a long way sincethen – as has Ross, who was promoted toEVP in 2007. He is now at the helm ofSeaFreight’s Miami office and is the heirapparent of CEO and founder RolandMalins-Smith. “I trust David implicitly,”Malins-Smith told Fairplay. “He is committedto quality of service as few in the industryare.” Malins-Smith, for his part, emphasisedhis future successor’s “strong connectionwith the team and the cohesiveness andmotivation of the team”.

SeaFreight, which celebrates its 20thanniversary in January, has a relationship-intensive focus on employees and clients.This personalised philosophy is crucial inany market, but particularly so in theCaribbean’s face-to-face business culture.

In the wake of the recent financial crisis,two distinct global strategies towardsemployment emerged: the Americanmodel (slash staff immediately to bolsterthe bottom line) and the German model(protect staff and prepare for the upturn).SeaFreight has behaved distinctly German.

“Our competitors laid-off people. Wenever laid-off anyone,” said Ross. Sea-Freight has virtually no turnover and itsemployees boast years-long relationshipswith Caribbean clients. “If we had laid-offfive or six people, that would have involvedmultiple [shipper] relationships. Clientswould have had to re-establish relation-ships with someone they weren’t familiarwith, who doesn’t know their business.”

“Our customers have probably spoken tothe same person for 10 years. If a shipbreaks down, they know it will set themback but at least they believe what ourpeople are telling them.

“At the end of every issue, there’s acustomer,” he continued. “Whatever theissue is, the most important thing is toalways present the customer with ananswer to the problem. Ships break down.Trucks break down. That’s the reality ofour business. One thing we will not do, nomatter how bad the news, is lie.

“But if you go to customers with newslike that, you’ve got to give them thesolution. You can’t just say ‘the ship brokedown’. You say: ‘Here’s how we’re going tomove your cargo’.”

Such ‘bad news calls’ are best deliveredby an employee who has a lengthyrelationship with the affected client. Thatis not the only argument against layoffsduring a recession, but it’s a good one.

The future plan for SeaFreight is steadygrowth with a focus on controlling itsproduct through ancillary holdings. Overthe past two decades, the company hascomplemented its growing chartered-infleet with US trucking services, containerequipment yards, box maintenance andrepair facilities and an NVO arm.

As Fairplaywent to press, SeaFreight waspoised to take possession of its owndedicated 10ha terminal in Port Everglades.“It’s our own space, with a direct lease withthe port authority, not a third-partyarrangement,” said Ross.

The new lease follows the samephilosophy as SeaFreight’s other non-vessel holdings. “It’s all about controllingthe final product to the customer, whichmeans controlling as many of the supportservices as we can.”

Thinking back on his three decades inshipping, Ross expressed astonishment atthe starring role played by chance. Afterattending Trinity College in Trinidad, heplanned to become a lawyer, applying atthe University of the West Indies inBarbados. But the enrolment allotment wasfull that year, so he went back to Trinidad.

As it happened, the father of hisgirlfriend owned agency Melville Shipping.While having drinks by the pool one night,he offered Ross a job as boarding clerk,handling documentation for VLCCs atPoint Galeota. “I hated climbing up theship at 3am. So I went back to my girl-friend’s dad and said ‘I really appreciatethis, but is there something else I can do?”

Taking pity, the agency owner appointedRoss as account executive for Nedlloyd. Hethrived in that role – so much so that hewas poached by the carrier. He took a postat Nedlloyd’s Florida office in 1985.

After Nedlloyd came five years at KirkLine. When Kirk was bought by Seaboard,Ross moved to SeaFreight.

That chance offer by his girlfriend’s fatherwas amazing, he said. “It could havebeen any business. But I grew tolove shipping and I never wentto law school. Once I washooked, that was it.” F

In the spotlightDavid Ross

Born: 1960

Current position: 2007-present:Executive vice-president, SeaFreight.

Hired by SeaFreight in 1995 as vice-president,sales and marketing

Career history:1990-1995: Kirk Line, vice-president

1985-1990: Nedlloyd, sales manager, Caribbean.Promoted to vice-president of sales, Caribbean in 1988

1980-1985:Melville Shipping,Trinidad, accountexecutive for Nedlloyd

Education: Trinity College,Trinidad, graduated 1980

Family: Married to wife Dianne. Threechildren: Gary, Melanie, Matthew

Hobbies: Cycling, fishing

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40 22 September 2011 www.fairplay.co.uk

Sir,Your article entitled ‘ECDIS: misunderstood,confused but soon to be mandatory’(Fairplay, 8 September 2011) is misleadingin its suggestion that IMO has not goneabout the whole process in the right wayand that the transition to ECDIS is neithertransparent nor fully understood.

IMO had been aware of the softwareupdate issue problems and highlightedthese to member governments and theindustry in 2007, by means of a Safety ofNavigation Circular (SN.1/Circ.266).

In July 2010 the NAV Sub-Committeereviewed and amended the text of thecircular, to highlight that the applicationsoftware within the ECDIS should workfully in accordance with the performance

standards and be capable of displaying allthe relevant digital information containedwithin the electronic navigational chart(ENC). Accordingly, the Maritime SafetyCommittee (MSC 88 – November/December 2010) approved revisedguidance on the maintenance of ECDISsoftware and encouraged its use by therelevant authorities. Member govern-ments were invited to bring the revisedguidance to the attention of all concernedto ensure that mariners always have thelatest safety-related information availableto them.

Also, last November, a number of membergovernments and industry organisationshad brought to the attention of MSC 88anomalies in the operation of some ECDIS

Clarity overECDIS displays

Letters

Clarity over ECDIS displays

[ Photo: Matt Ramsdale ]

systems relating to display and alarmbehaviour, in particular system con-figurations. The anomalies were discoveredby the inspection of ENCs within a smallnumber of ECDIS systems and the com-mittee considered it possible that otheranomalies remained to be discovered.

Given the widespread use and theimpending implementation of the ECDIScarriage requirement, the committeeconsidered it important that anyanomalies identified by mariners should bereported to, and investigated by, theappropriate authorities. In order to betterunderstand the extent of the issue, thecommittee issued MSC.1/Circ.1391inviting administrations to collect,investigate and disseminate informationabout ECDIS anomalies. In addition,MSC.1/Circ.1389, providing furtherguidance on procedures for updatingshipborne navigation and communicationequipment, was also issued in this context.

The administrations or designated bodieswere, inter alia, invited to encourage vesselsunder their flag to report such anomalies toallow analysis; share information with otherIMO member governments and interna-tional organisations on request; and issuealerts to mariners where such anomaliesmight affect safety of navigation. InFebruary 2011, the IHO, in co-operationwith IMO, convened a meeting to study thematter in more detail and provided its inputto MSC 89 in May of this year. One result ofthat meeting was the progress towards thedevelopment of a simple user validationtest to highlight to mariners whether theirequipment conformed to the lateststandards and also highlight some of theknown deficiencies affecting certainmanufacturers’ ECDIS.

In addition, the MSC in May this year

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22 September 2011 41www.fairplay.co.uk

Letters

tasked the COMSAR, NAV and STW sub-committees to consider the issue andprovide their comments to enable MSC 90(May 2012) to provide the necessaryadditional guidance.

As to the training aspect, it should benoted that, under the provisions of chapterII of the STCW and code, all officers arerequired to be competent in the use ofECDIS to maintain the safety of navigation.Accordingly, training institutes wouldprovide generic competence in the use andlimitations of ECDIS. Furthermore, ship-owners are required to ensure thatseafarers, on being assigned to any of theirships, are familiarised with their specificduties and with all ship arrangements thatare relevant to their duties. Theorganisation has updated the existing IMOmodel course related to ECDIS, whichwould be validated at the next meeting ofthe STW sub-committee.

As to the mandatory carriage require-ments for ECDIS, IMO, in co-operation withall interested member governments and

industry organisations, discussed all relevantissues including the availability of ENCsworldwide before agreeing on a planned,well defined phased-in implementationschedule between 1 July 2012 and 1 July2018, based on different categories of ships.

In conclusion, the IMO has always beenvery proactive in the ECDIS developmentprocess and, throughout, has actively

sought the co-operation of, and inputfrom, all member governments andindustry organisations.

GS SinghotaSecretary to the IMO Sub-committee onSafety of NavigationDeputy director/head, OperationalSafety Section

We are grateful to Mr Singhota for adding further detail to the information inthe various ECDIS-related items in our 8 September issue which included refer-ences to some of the points his letter makes.

During the interviews carried out for those articles, it became clear thatthere is considerable misunderstanding about the transition to ECDIS, despitethe proactive approach taken by the IMO.

This is best illustrated by the UK Hydrographic Office which, in the guidancecited in our article, acknowledges that flag states have inconsistentinterpretations of the rules they have agreed at the IMO.Fairplay acknowledges the IMO’s efforts towards resolving the remaining

issues around ECDIS implementation but cannot ignore the real concernsexpressed by experienced professionals working daily to meet its require-ments. – Ed

Sir,In response to comments in the article titled ‘Green ports -UK ports told to turn greener’, (Fairplay 2 September), whileit is true that, to date, large ports have been able tobecome more efficient than smaller ones, it is importantthat this does not become a reason for ports with lesscapacity to drop out of the green debate. Ports are the hubof shipping in more ways than one, and a key componentof the global supply chain for all industries. So regardless ofwhich form of emissions regulation is introduced in thefuture, ports of all sizes have a role to play in monitoringand managing all port and ocean-going activities relatedto GHG [greenhouse gas] emissions.

From a commercial perspective then, although it maybe the larger ports that have the budget and CSR[corporate social responsibility] remit to invest moreheavily in greener process, we cannot simply write off thepotential contribution of the smaller ports. To remaincompetitive and effective, smaller ports need access toinformation and new processes in order to avoid aknowledge gap that could prove very costly in the future.Although the quest for greener operations is now anecessity, it doesn’t have to be a chore – seeking expertevaluation and assessment of a port’s CO2 footprint tocreate a comprehensive inventory is an invaluable

exercise, both environmentally and commercially.Not only will this enable the ports to better

understand their CO2 emissions and provide differentia-tion between port authority operations, cargo handlingand industrial activities, it will also illuminate areas forleaner operations and cost efficiencies in the longer term.This will also go towards equipping shipping with thetrue overall maritime GHG emissions data which iscritical when further regulation comes into force.

Developing a carbon emissions strategy using thisinsight is the next step; ‘decarbonising’ the port logisticschain using measures for terminal operations and cargohandling. It is estimated that the contribution of terminal

Ports’ green responsibilities

We welcome the comments from Ms Athoussaki on issues facing the greeningof UK ports, raised in Fairplay 2 September. Effective knowledge sharingbetween large and small ports is an idea not explored in the article and wewould like to hear from readers on how best this could be achieved.

With regards to the idea of offering incentives to environment-friendlyships, while this initiative is being followed by some European ports, UK portmanagers are unclear about their legal position.

While researching the article, concerns were raised about UK competitionlaw, among other things. – Ed

operations and cargo handling to port air pollutionranges between 18% and 30% of the total. To addressthis, a range of mechanisms including renewable energyoptions are increasingly being explored.

On a macro level, ports can play a central role in thecreation and implementation of market-based measures(MBMs). By encouraging GHG emissions reductions fromshipping and offering incentives to ships participating inemissions reduction programmes, the role of all ports,large and small, is critical to the future of greener shipping.

Helena AthoussakiCEO, Carbon Positive

Page 44: Fairplay 22 Sept 2011

42 22 September 2011 www.fairplay.co.uk

Decision-makers from the worlds of energy, mining, manufacturing,industry, commerce and agriculture all affect shipping. Fairplay reports

on the great and the good

Forbes departs CSA

Caribbean Shipping Association (CSA) general manager Clive Forbes has resigned.Until a new GM is hired, the CSA has appointed an interim management team led

by former president Fernando Rivera. Current president Carlos Urriolaemphasised that Forbes “executed his tasks with determination,

enthusiasm and integrity”. Appointed in 2008, Forbes servedas the front man of CSA’s semi-annual conference events.He came aboard with a background in marketing and

operations after serving at several corporations in hisnative Jamaica. The CSA brings together a forum of

regional executives from the port, agency and carriercommunities. The group is focused on co-operativeefforts to implement best practices throughout theCaribbean Basin and co-ordination with otherbodies such as Caricom and the Association ofCaribbean States.

Tata Motor CEO Forster resigns

Tata Motor CEO Carl-Peter Forster is reported to have resigned with immediateeffect because of “unavoidable personal circumstances“, but will continue to be anon-executive director, reported Reuters. Forster joined in February 2010 afterheading General Motors in Europe and turned around Jaguar Land Rover (JLR), withthe luxury unit contributing nearly 80% of Tata’s profit in FY2010/11. However, salesof the Nano have been disappointing, according to IHS Global Insight. His responsibilitiesincluded all the company’s global operations including JLR, Tata Motors andDaewoo. Forster also has 13 years’ experience in BMW.

&movers shakers[Photo:Greg

Miller]

Van der Jagt returns to logistics [ Photo: Andrew Spurrier ]

Nicolette van der Jagt will stepdown from her position as secretary-general of the European ShippersCouncil (ESC) at the end of the year tobecome director-general of theEuropean Association for Forwarding,Transport, Logistic and CustomsServices (CLECAT). She will succeedMarco Sorgetti, who will become DGof the International Federation ofFreight Forwarders’ Associations. Vander Jagt, who has acted as EuropeanShipping Council (ESC) secretarygeneral since 2002, is returning to her

roots in taking on the CLECAT post.She began her career at the Dutchtransport and logistics organisationEVO in 1992 and subsequentlyworked for the Freight TransportAssociation’s Brussels office. At theESC, she was a feisty champion ofshippers’ causes, notably playing amajor role in the council’s battle toput an end to the liner shippingsector’s exemption from EuropeanUnion competition rules. CLECATpresident Clive Broadleywelcomed her appointment.

included all the company’s global operations including JLR, Tata Motors and

[ Photo: Andrew Spurrier ]

roots in taking on the CLECAT post. She began her career at the Dutch transport and logistics organisation EVO in 1992 and subsequently worked for the Freight Transport Association’s Brussels offi ce. At the ESC, she was a feisty champion of shippers’ causes, notably playing a major role in the council’s battle to put an end to the liner shipping sector’s exemption from European Union competition rules. CLECAT

welcome d her appointment.

IR Class names chair andadds MD role

Arun Sharma has been named MD ofIR Class (Indian Register of Shipping)and chairman-designate. The formerexecutive president of India Steamshipwill succeed JC Anand as chairman in afew months. Sharma will take over asexecutive president at a later date.

Forbes departs CSA

Caribbean Shipping Association (CSA) general manager Clive Forbes has resigned. Until a new GM is hired, the CSA has appointed an interim management team led

by former president Fernando Rivera. Current president Carlos Urriola emphasised that Forbes “executed his tasks with determination,

enthusiasm and integrity”. Appointed in 2008, Forbes served as the front man of CSA’s semi-annual conference events. He came aboard with a background in marketing and

operations after serving at several corporations in his native Jamaica. The CSA brings together a forum of

regional executives from the port, agency and carrier communities. The group is focused on co-operative eff orts to implement best practices throughout the Caribbean Basin and co-ordination with other bodies such as Caricom and the Association of Caribbean States.

Decision-makers from the worlds of energy, mining, manufacturing, industry, commerce and agriculture all aff ect shipping.

on the great and the good

&&movers movers &movers &&movers &&&&shakers&Forbes departs CSA

Caribbean Shipping Association (CSA) general manager Clive Forbes has resigned. Until a new GM is hired, the CSA has appointed an interim management team led

Page 45: Fairplay 22 Sept 2011

22 September 2011 43www.fairplay.co.uk

&movers shakers

Mäki takes over at Port of Helsinki

The Port of Helsinki has confirmed that Kimmo Mäkiwill take over from Heikki Nissinen as chief executive on1 October. “Mäki’s business skills and ability to meetfuture challenges were the characteristics we felt weremost important,“ said chairman, Mikko Kortelainen. Mäkiwas most recently head of container operations at Steveco,Finland’s leading stevedore company. He has a master’sdegree in engineering and in 2000 majored in logistics andtransport management. He worked as logistics headat Hobby Hall and UPM-Kymmene Seaways untiljoining Steveco in 2006. Nissinen steps downafter 14 years in the top job. He goes onextended leave at the end of September until hisofficial retirement on 1 April 2012.

Wrist Ship Supply,the Danish servicescompany, hasappointed ShilpaJayant Varade askey accountmanager dedicatedto the firm’s Asianclients. To be basedat the firm’sSingapore office,she has 10 years’experience in theIndian and Singa-pore marine andoffshore shippingmarkets. Vice-president of globalsales Søren Jørgensen said“outsourcing procurement” isincreasing in the shipping industryand an increased demand for shipsupply in Asia taps in to thecompany’s desire for greater marketshare in the region. The company saidthis move complements its currentexpansion strategy – six acquisitionssince 2009 most recently in May ofUK food distributor Strachans.

[Photo:WristShip

Supply]

Unexpected contractextensions at K+N

Global ocean freight forwarder Kuehne +Nagel has extended the contracts ofthree top executives in a surpriseannouncement. CEO Reinhard Langewill now remain in office until the end of2013, while CFO Gerard van Kesteren’stenure is extended until mid-2014. Bothmanagers, aged 62, were expected to bereplaced at the end of 2012. Langestarted his career with K+N in 1971 andserved as CEO since 2009; van Kesterenhas been CFO since 1999. K+N alsoextended until 2014 the contract ofboard member Dirk Reich, responsiblefor contract logistics.

Asset valuation group elects chair

Hamburg ship appraiser Bernd Holst (pictured) has been electedchairman of newly established Long Term Asset Value (LTAV)association in Hamburg. He is joined by deputy chairman ClausBrandt (PricewaterhouseCoopers, partner), and treasurerAlexander Geisler (Hamburg Shipbrokers’ Association, MD). Theassociation will promote LTAV – a discounted cash flow modelfor the valuation of ships instead of more volatile market valuescommonly used by shipbrokers. The association, which willfinance the sourcing of financial market data needed for the LTAVformula, comprises nine shipbroking firms, shipowners such as Carsten Rehder andaccountants such as PwC. Holst, as MD of ship valuation and survey firm IngenieurbüroWeselmann in 2009, was involved in the development of the LTAV formula.

Eagle loses trading boss

NASDAQ-listed Eagle Bulk confirmed toFairplay that the respected head of itsfreight trading operation, KeithDenholm, has quit. But Eagle Bulk CFOAlan Ginsberg said: “His departure hasno impact on our commitment tobuilding the trading business.” Denholm,formerly of Pacific Carriers andMalaysian Bulk Carriers, was hired withconsiderable fanfare in September 2010by Eagle Bulk, which has noted theimportance of its Singapore tradingoperations, previously headed byDenholm. CEO Sophocles Zoullasemphasised that Denholm’s tradingoperation had “huge indirect benefits” indealing with the Korea Line bankruptcy.

Bergeron steps up at LISCR

Scott Bergeronhas been promotedto CEO of theLiberian Inter-national Ship andCorporate Registry(LISCR), whichruns Liberia’sregister. He joinedthe company in2000 as chiefoperating officer.Bergeron, who has seagoing experience,held positions at Laurin Maritime, DetNorske Veritas and the US Coast Guardprior to joining LISCR.

Wrist Ship Supplyanswering Asia demand

[Photo:PortofHelsinki]

[Photo:LiberianInternationalShip

&CorporateRegistry]

&&movers movers &movers &&movers &&&shakersshakers&shakers&&shakers&Mäki takes over at Port of Helsinki

Page 46: Fairplay 22 Sept 2011

�� 22 September 2011 www.fairplay.co.uk

shipping in numbers

There is so little fairplay in the world. If our own efforts succeed, we shall have taken the first steps towardspromoting the habit of calling things by their right name and looking at them through uncoloured spectacles…Founder: Thomas Hope Robinson, Fairplay, 18 May 1883

Copyright © IHS Global Limited, 2011. All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or be stored in any retrievalsystem of any nature, without prior written permission of IHS Global Limited. Applications for written permission should be directed to Jon McGowan, [email protected]. Any views or opinions expressed do not necessarily represent the viewsor opinions of IHS Global Limited or its aff iliates. Disclaimer of liability:Whilst every effort has been made to ensure the quality and accuracy of the information contained in this publication at the time of going to press, IHS Global Limited and itsaff iliates assume no responsibility as to the accuracy or completeness of and, to the extent permitted by law, shall not be liable for any errors or omissions or any loss, damage or expense incurred by reliance on information or any statement containedin this publication. Advertisers are solely responsible for the content of the advertising material which they submit to us and for ensuring that the material complies with applicable laws. IHS Global Limited and its aff iliates are not responsible for anyerror, omission or inaccuracy in any advertisement and will not be liable for any damages arising from any use of products or services or any actions or omissions taken in reliance on information or any statement contained in advertising material.Inclusion of any advertisement is not intended to endorse any views expressed, nor products or services offered, nor the organisations sponsoring the advertisement. Trade Marks: IHS Fairplay and Fairplay are trade marks of IHS Global Limited.

W�2Record low rate obtained byVLCC Samco Amazon for spotbusiness on the benchmarkGulf-Japan route, equivalentto daily earnings of $1,000

36Vessels waiting to load atBrazil’s six sugar ports a

week ago. In August 2010 arecord 135 ships were

waiting to load

100,000Number of reefer containers ordered in 1H11 – equal to the2010 total. A record of 150,000 boxes is expected for this year

1,700teuSector of the container market still strong – over $10,000/day

paid last week for immediate spot positions

166Private security companiesoperating in Somali region

201Days lost for six vessels

released by Somali piratesin August

3.7%Fall in number of shipsunder the Greek flag

between July 2010-11 buttonnage stable at 43M gt

Combinednet growthin oil produc-tion by the USand Canadabetween 2008and 2010– more thanIran’s totaloutput

3.8M

bpd

$35.5BnRevenue forecast for Australia’s agricultural export sector in

2011-12, a 6% hike from 2010-11, driven by wheat, wool, rice,canola, raw cotton and sheep meat

Draught ofDeurganck-dock lockat Antwerp,which willbe theworld’slargestlock whencompletedin 2016at a costof about€340M($464M)17

.8m

Memberof theAuditBureauofCirculations

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Page 47: Fairplay 22 Sept 2011
Page 48: Fairplay 22 Sept 2011

We justmadeshipping boring.

Ke shipping industry faces seriouschallenges on reliabiliN. It can’t meetyour deadlines. Statistically, you’llbe disappointed just about everyother time.Kere can be lots of good reasons

for this; we would be the last tosuggest shipping is uncomplicated.But we find it hard to justify that itshould be our customers’ problem.Your problem.Everything taken into account,

shipping is just one ofmany links in

your supply chain. And from thatstandpoint, it is also the source of adisproportionate amount of fuss.At Maersk Linewe’ve decided

to do something about it. We havedeveloped a product for our routesbetween Asia and North Europethat ensures absolute reliabiliN.And that’s not just an ambition.

It’s a promise.At the same timewe’re tackling

the inflexibiliN that’s connectedwithweekly departures.

We’ve increased our cut-offfrequency so considerably that ourcustomers can technically shipevery single day – and thereforebegin to see shipping as a directextension of the production line.Kis is whywe call it Daily Maersk.It’s predictable. It’s boring. And

it’s right on time.You’re welcome to readmore on

DailyMaersk.com

Introducing absolute reliabiliN.