Fairplay 22 Sept 2011

Kingston
at the crossroads
Jamaicas potentially game-changing
transhipment plan
INSIGHTS FOR PROFITABLE SHIPPING
22 September 2011 Volume 373 Issue 6652 Price 15.00 www.fairplay.co.uk
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INSIDE THIS ISSUE MARKETS: Price chasmpulls spot LNG to Asia
COMMERCE: Hubs face pressure fromcarriers REGULATION: US examines contract
rules LOGISTICS: Troubled times inCuraao DECISION-MAKERS: David Ross
Global tramp and liner services
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32 Logistics:
Troubled times in Curaao
The Netherlands Antilles dissolution and
Curaaos new government have
reshaped port authority
3 Look out
Caribbean ahead in Canal race
Guarding the seas
4 Story of the week
Right place, right time?
6-15 Markets
Pricing chasm pulls spot LNG to Asia
Boxship bargains En bloc sales
dominate Painless Indian naphtha drop-
of Uncertainty deters Capesize S&P
16-27 Trade & commerce
Caribbean: Domestic recovery sputters
Foreigners feel Beijings scal bite
Rising costs cloud Indias seafood
surge Season shrinks for cruise ports
Carriers navigate Venezuela mineeld
28 Technology
Emissions down, warming up S-Class
upgrade still to convince Spreader
software lifts downtime problems
30 Regulation
US examines contract rules Denmark
sees action on crewing laws ICS
responds to emissions tax report
32-36 Logistics & supply chain
Troubled times in Curaao Spain
opens door to Europe Jakarta urges
logistics developments Cochin seeks
relief for cabotage headache Rail
changes for South African ore
38 Decision-makers
David Ross of SeaFreight
40 Shoes & ships
ECDIS confusion IMO responds
42 Movers & shakers
44 Shipping in numbers
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||oyd`s Reg|ster of Sh|ps on||ne
The u|t|mate on||ne mar|t|me reference too|
D|scover more
For fu|| deta||s and a product eva|uat|on: www.sea-web.com
this week
every week
22 September 2011
Volume 373 Issue 6652
22 September 2011 1 www.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 magazine C
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6 Markets: Pricing chasm
pulls spot LNG to Asia
Asian buyers are now paying a huge
premium to snare cargoes from Europe
and America, writes Greg Miller
28 Technology:
Sulphur zone warms up
Low-sulphur fuel regulations cut
Californian emissions while adding to
global warming, study shows
4 Cover story:
Kingston at the
crossroads
Jamaica has a potentially game-
changing transhipment plan
38 Decision-makers: David Ross
SeaFreights heir apparent explains how lean management and a
Caribbean style of doing business can pay of in the long run
16Trade&commerce:
Hubs face carrier pressure
CSA president Carlos
Urriola is among
those expecting
transhipment
margins to be
squeezed, reports
Greg Miller
The Freeport Container Port is one of the worlds largest container shipping conglomerates
constructed, and the deepest Container Port in the region. Freeport Container Port is
located 65 miles fromFlorida . With a depth of 16m, The Freeport Container Port serves
as a major container transshipment hub between the Eastern Golf Coast of the United
States, the Gulf of Mexico, the Caribbean, South America, and trade lanes to European,
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FREEPORT CONTAINER PORT
This 24-hour facility boasts of having the most advanced port computer systems, operational expertise and professional
management, in addition to state of the art security and full surveillance. The port is capable of handling the largest
container vessels in the world and aims to provide excellence in container services through the dedication of its staf and
application of leading edge technology, by using highly advancereal time communication and port management systems.
PORT FACTS
42.5mAir draft permissible above water level
1036mBerth
16mMaximumdepth at berth
3ft Tidal range
1mMinimumunder keel clearance alongside
1 Mobile Harbour Crane
61 Tons SWL under spreader
71 Tons SWL under hook
46.5mOutreach of cranes
9 Gantry quay cranes
Minimumnumber of 20bays between gantries2
No restriction on number of tiers that can be worked on deck
38.7mMaximumheight of spreader for water level at lowwater
8 in. Over height limit (under spreader) for 20 units and 40 units
30.48mLongitudinal clearance between the legs gantries
27.7mMaximumcargo width
Class 1 & 7 limitation in haz cargo that can be stowed
at the terminal
30 Moves per hour/per gantry
430 Reefer points (reefer plugs available at terminal)
24 Hour security
For More Information Contact:
Freeport Container Port Limited
P.O. Box F-42465
Freeport, Grand Bahama, The Bahamas
Tel (242) 350-8000
Fax (242) 350-8044
EQUIPMENT
72 Straddle carriers
9 Super Post Panamax Quay Cranes
14 Train tractors & heads
17 Forklifts
2 Top lifters
4 Man Lifts
The Transshipment Hub of the Americas
22 September 2011 www.fairplay.co.uk
lookout
RichardClayton
Fairplay Editor
Its ofcial: carriers are now in the thick of
service-plan revisions to take advantage
of the Panama Canal expansion in 2014.
A new round of transhipment deals is
currently under way for upsized vessels
on the Asia-US East Coast run. Because
necessary terminal upgrades including
crane installations can take up to two
years, pivotal decisions should be made by
carriers by the end of 2012.
Some arent waiting. The MoU signed in
Kingston by CMA CGM is just the opening
gambit. Expect more major hub
announcements and dont be surprised if
some long-time carrier customers switch
to new terminal partners.
In general, the Caribbeans market
position looks increasingly bright. Several
US ports have yet to secure dredging
commitments to handle New Panamax
vessels, but carriers must serve these
gateways, given the static locations of
their top shippers distribution centres.
In the US, Charleston and Savannah are
scrambling to secure funds for dredging,
while it looks increasingly unlikely that
New York-New Jerseys air draught
conundrum created by the Bayonne
Bridge will be resolved in time.
The problem in America is that political
rhetoric is now squarely geared towards
debt reduction. This could make dredging
and infrastructure funding even more
difcult to obtain, just when its needed
most. The clock is ticking and
apprehension within Americas port
community is building.
This concern has created a signifcant
opportunity 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 loss
could be the Caribbeans gain. Following
investments in Panama, Colombia,
Jamaica and the Bahamas, the Caribbean
looks as if it will indeed be ready for
canal expansion even if the US East
Coast isnt.
F
Caribbean ahead in Canal race
Guarding the seas
Another day, another
discussion about piracy and
yet another grudging
acknowledgement that our
foe is smarter than the average
criminal. But last weeks ICS/
ISF gathering in London
brought out tensions within
the shipping community.
Stephen Askins, a lawyer,
fears that the more legislation
allows for armed guards, the
more politicians will see piracy
as a commercial, rather than a
military, problem. EUNAVFOR
chief of staf Capt Keith Blount
reveals that owners rarely
admit they are carrying a
private security team until the
vessel is under attack;
Pottengal Mukundan at the
IMB expresses his frustration
over the attitude of fag states
to protecting their ships.
Blount says categorically no
ship carrying a private security
team has yet been pirated,
which sounds like the military
pressing for a commercial
solution. There are 166 private
companies operating in the
Somali region, of which about
50 are linked to SAMI, the
regulatory trade association.
And even if a SAMI-
recognised security company
is selected, how many guards
make a team? The Dutch are
now debating about 17
which Blount regards as
ridiculous while others go for
three of four which Blount
believes would be useless.
The unspoken dilemma is
whether there would be
enough lifesaving equipment
on board to keep a protected
vessel under SOLAS.
F
As carriers plan for a post-expansion network, not all ports will be ready
4 22 September 2011 www.fairplay.co.uk
Right place,
right time?
J
amaicas Kingston Container Terminal
(KCT) is the elephant in the room of
Americas transhipment because its
success or failure will dictate how
competing hubs fare for years to come
and how millions of containers will be
routed annually.
KCT boasts a near-perfect location to tap
east-west trades to benet from the
Panama Canal expansion, north-south
routes fuelled by Brazil, and the mainstay
South Florida-to-Caribbean run.
And yet, KCT continues to have spare
capacity. A lot of spare capacity. Its actual
throughput remains less than half of its
stated 3.2M teu/year capacity. To put this
in context: current spare capacity at KCT is
roughly equivalent to the total volume of
some of its regional competitors.
Furthermore, Kingstons prodigious dry
powder is set for another huge jump. Port
Authority of Jamaica (PAJ) chairman Noel
Hylton conrmed to Fairplay that the board
recently approved a memorandum of
understanding (MoU) with a private
investor to develop PAJs Fort Augusta
property and bring Kingstons capacity to a
whopping 5.2M teu/year by 2014.
The Fort Augusta expansion is just one
of four crucial initiatives moving ahead in
parallel. In addition, PAJ is negotiating
pivotal arrangements with anchor clients
CMA CGM and Zim; seeking government-
supported dredging to prepare for larger,
post-Panama Canal expansion boxships;
and forging ahead with plans to sell of
PAJs equity.
The PAJ negotiations with its two anchor
carriers have taken centre stage. In early
August, the Jamaican government
announced an MoU with CMA CGM to give
the carrier a 35-year lease in return for a
$100M investment, with CMA CGM to take
over management of its allocated space
from PAJ [see Fairplay 8 September, CMA
CGM looks to better times].
Several regional sources speaking to
Fairplay expressed astonishment at this
move, because it appeared to favour CMA
CGM over Zim, KCTs more important
client. According to the latest available
statistics, Zim accounts for about 55% of
KCT throughput, CMA CGM about 35%. It
looks like seniority doesnt play any role in
this business its all about opportunity,
said one competing terminal executive.
Fairplay has conrmed that Zim was upset
with the CMA CGM deal and that Zim has
subsequently held talks with a number of
Caribbean terminals to explore its options.
Hylton acknowledged this when he spoke
to Fairplay last month. I know other ports
have gone to Zim and made ofers. I would
be nave to think they wouldnt. We make
ofers to other ports clients all the time.
Hylton also provided more details on the
process ahead with both CMA CGM and
Zim, dispelling several of the misperceptions
that have fed the rumour mill. Most
importantly, the PAJ boss adamantly
asserted that he will not go forward with
the CMA CGM lease if it means losing Zim.
Theres a lot of gossip about Zim and us.
But we have said to CMA CGM, openly,
that we will not do the deal with them
unless we settle with Zim, said Hylton. He
noted that the agreement with CMA CGM
was only an MoU. We must settle the
terms and conditions of the lease [with
CMA CGM] by the end of the year, he said.
I am not bragging yet.
Asked how the CMA CGM plan came
about, he revealed: CMA CGM made this
proposal. They wanted to decide on a hub.
Instead of losing them altogether, we said
wed go along with it.
He also claried what CMA CGM has
actually been ofered. A Jamaica govern-
ment press release stated that the CMA
CGM deal would award the carrier KCTs
South 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 remaining
KCT space suits its future needs. Zim is
being ofered part of Gordon Cay, plus all of
the west and north terminals. Hylton main-
tained that the area to be allocated to CMA
CGM is essentially where theyd be
operating anyway.
story of the week
Seizing an opportunity, Jamaicas bold and risky
transhipment plan is reverberating across the
Caribbean. Greg Miller has an exclusive report
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Other questions have been raised about
what exactly CMA CGM would be spending
its $100M on, and when. Hylton reported
that the carriers investments should begin
in 2012 after a nal lease has been signed,
and be completed within three years.
Because Gordon Cay was built on
reclaimed land, the carriers investments
would be focused on strengthening the
yard to allow for full containers stacked
six-to-eight high, strengthening the berth
face to allow for deeper draught and
bringing in new cranes.
A CMA CGM ofcial told Fairplay that its
portion of Gordon Cay would have capacity
for 1.75M teu/year by 2015. The ofcial
said the KCT deal would allow it to operate
several lines deploying New Panamax ships
after the canal expansion is complete.
The government will be responsible for
dredging to bring draught from 15m to
17-17.5m, a project that would accom-
modate not just the CMA CGM-allocated
facilities but the entire property. We know
we have to dredge, whether or not this
deal goes through, said Hylton.
The crucial negotiations with CMA CGM
and Zim have yet another twist: they are
under way concurrently with the PAJs
long-brewing plans to sell its equity and
cover its debt obligations.
Questions have emerged about the
relationship between the CMA CGM lease
proposal and the future privatisation.
Hylton said those tracks were separate.
He said that after CMA CGM made the
lease proposal, KCTs privatisation adviser,
PricewaterhouseCoopers, concluded that
it would not, in their view, afect the
privatisation process.
The potential complication is that if the
CMA CGM deal is approved, the carriers
terminal operating arm would agree to
manage the allocated facilities for 35
years. Yet the KCT privatisation, when it
happens, would, presumably, put the
entire property out to bid for purchase by
a major international terminal operator.
So who would eventually manage the
section of Gordon Cay allotted to CMA
CGM? That question would be dealt with in
the lease agreement to be signed by year-
end, said Hylton. He also emphasised that
in any future privatisation, both CMA CGM
and Zim would be ofered an equity stake.
How KCTs multiple schemes pan out
will have sweeping implications for future
business planning for the entire Caribbean
transhipment sector. If KCT can success-
fully seal long-term agreements with both
Zim and CMA CGM, secure dredging
funding, develop Fort Augusta and sell its
equity, then Jamaica will become a far
more dominant force. If not, competitors
are anxious to pick up the pieces.
F
I knowother ports have
gone to Zimand made
ofers. I would be nave to
think they wouldnt
story of the week
PAJ chair Noel Hylton (right) with CMA CGM
executive director Rodolphe Saade and Jamaica
transport minister Mike Henry (centre), at the MoU
signing in August
22 September 2011 5
Theoretically, liquefed natural
gas (LNG) is supposed to bring
global natural gas prices into
greater equilibrium, la crude,
but it hasnt worked out that way
as regional prices move even
further apart.
A newreport by IHS CERA
reveals howthree entrenched
pricing regimes Asia, Europe
and NorthAmerica are dictating
spot LNGfows. Gaps between
the three are widening, despite a
greater availability of fexible
cargoes not bound for fxed
destinations. In the Atlantic
Basin, the US import market has
become increasingly irrelevant,
withAmericas Henry Hub price
languishing below$4 per million
British thermal units (MBtu).
CERAbelieves the US will
remain oversupplied as a result of
domestic shale gas and a lack of
export capacity, with non-
competitive pricing to persist.
In Europe, spot pricing is
linked to the National Balancing
Point (NPB) hub. Unlike North
America, the [European] market
is not oversupplied, noted CERA.
NBP has been hovering around
$9-10/MBtu and is predicted to
reach $11.80/MBtu this winter.
But the big driver of todays
spot LNGmoves is the Pacifc
Basin, thanks to the surprisingly
high premiums on ofer. Asian
buyers paid $13.38/MBtu for
spot cargoes in July and regional
pricing has since topped $15.
In a perfect market, Asian
buyers should be paying just
enough over NBP to cover
shipping costs and divert
cargoes from competing bidders
in Europe.
This thesis held true in late
2010 and early 2011, but not in
recent months.
Rather than paying just
enough to outbid competition,
Asian short-termprices have
escalated well above NBP. The
July premiumfor Asian cargoes
over NBP came in at $4.32/M
Btu, the widest spread since
March 2009, CERA noted. Asian
bids for Middle Eastern cargoes
trumped Americas by more than
$10/MBtu.
The Asian premiumcan be
partly explained by the higher
shipping costs of routes from
liquefaction plants in the Middle
East and Africa compared with
shorter voyages to Europe. This
efect is heightened by the 150%
increase in LNGtanker charter
rates over the past year, which is
being passed along to shippers.
However, the current Asian
Pricing chasmpulls spot LNGto Asia
Asian buyers are now
paying a huge premium
to snare cargoes from
Europe and America,
reports Greg Miller
premiumis much greater than
justifed by shipping diferentials,
maintained the analyst. Clearly,
another factor is in play.
The key, it believes, is the
diference between fexible
cargoes and available cargoes.
The lack of available shipping
capacity is limiting the amount of
LNGthat can make its way to
Asia, causing buyers to bid up the
cargoes that do make the
journey, the report stated.
There are no indications that the
Asian premiumwill disappear soon.
The natural ceiling for Asian spot
deals, set by long-termcontract
pricing, is around $20/MBtu.
There is still a lot of running
room, saidCERA.
Asian demand is being further
boosted by Japan, which must
replace ofine nuclear capacity.
The more time that passes
without a plan to restart Japans
nuclear facilities, the greater the
countrys demand for LNGfor
power generation will grow,
CERA commented.
To the extent shipping capacity
is available, spot LNGcargoes
should increasingly divert towards
Asia, as they have for each of the
past four months.
The volume of LNGheading
out of the Atlantic to the Pacifc
has grown considerably, reported
IHS CERA, which predicted that
the disparate prices underpinning
this trend will remain apart.
F
LNGimports by region 2008-13(Mtonnes)

Middle East
Atlantic Basin
Pacic Basin
2009
2010
2011
2012
2013
The longer without a planto
restart Japans nuclear facilities,
the greater its demandfor LNG
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Container ships: Charterers poised to pick up more bargains Sale and purchase: En bloc deals dominate
Mid-range tankers: Painless Indian naphtha drop-of Capesizes: Uncertainty deters potential buyers
Fairplay subscribers have access to complete listings of newbuildings, ship sales, fxtures
and bunker prices on the Fairplay website. To access, go to www.fairplay.co.uk/markets

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markets
More breakbulk reefers cannibalised
Report highlights the
challenges to specialised
feets from refrigerated
containers, writes
Michael Hollmann
Tough competition fromthe
container lines will continue to
squeeze out conventional reefer
ship capacity at a rapid pace in the
coming years, according to a new
report fromLondon-based
consultancy Drewry.
If current trends prevail, the
specialised reefer feet could
dwindle from691 ships today to
only 476 by 2015, its Reefer
Shipping Market Annual Review
predicts. Scrapping programmes
by owners of conventional
tonnage sawan average of 36
vessels heading to Asian recyclers
between 2008 and 2010 while
the newbuilding orderbook has
dropped to zero for the frst time,
Drewry said.
Containerisation of perishable
products is forecast to increase to
74%by 2014. The container lines
share of overall reefer carrying
capacity could even reach 95%.
However, just as in the standard
dry container sector, carriers are
pushing capacity up too fast.
Given the high number of
newbuildings scheduled to be
delivered, this suggests downward
rate pressure, commented
Drewry associate Susan Oatway.
Also, beyond 2015, container
lines will fnd it harder to achieve
further market share gains as the
potential for containerisation
dwindles, the report says. This is
because many of the seasonal
high-volume commodity trades
that remain are ideally suited to
specialised reefer services. It is
these that will ensure its
continuing and proftable
future, albeit on a smaller scale
than in previous years.
So far, this year has been a
roller-coaster for breakbulk reefer
operators and shipowners, with
spot rates crashing to rock bottom
in 2Q11 fromvery frmlevels in
1Q11. Civil unrest in North
Africa and the Eastern Mediterra-
nean deprived the market of key
demand drivers, explained UK-
listed operator Star Reefers in its
recent half-year report.
A Hamburg chartering broker
talking to Fairplay put the average
reefer spot rate today at $0.60-
0.70/ft
3
for modern and $0.50-
0.60 /ft
3
for older tonnage with a
slightly frmer tendency. It
means smaller older vessels can
still hardly recoup their operating
expenses, the broker said.
Worldwide, about 50specialised
reefer vessels were put into lay-up
or idle without employment this
northern summer, a fairly high
number compared with past years.
One of the operators cutting
back on capacity was fruit
multinational Chiquita. It merged
its two conventional Central
America/North Europe services
into one loop, the broker pointed
out. Instead the group is now
believed to be booking more of its
cargo on MSCreefer container
services into Bremerhaven.
Fixing activity in the period
market for reefers is anticipated
to go up in the coming weeks and
months with a lot of charters
coming up for renewal. Ships that
were fxed for a multi-year charter
back in 2007 at levels about $1/
ft
3
would nowbe facing market
levels of $0.80-0.85 /ft
3
, another
broker told Fairplay.
F
Total seaborne trade of perishable reefer
cargo by commodity, 2010
691
current feet
of specialised
reefer ships
estimated
size of reefer
feet in 2015 476
Dairy
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The prospect of a post-holiday rally
in period rates has been steadily
dwindling in recent weeks, with
inated availability levels in most
size classes nowcasting a long
shadowover the market.
Charterers are calling the shots
again, extending or xing tonnage
for exible periods at bargain
rates, although their pleasure will
be tinged with frustration about
mounting losses on many freight
routes into Europe and the US.
The average charter rates they
are incurring on fresh xtures
declined by about 2%last week,
according to the ConTex, and
owners should be bracing
themselves for what promises to
be a very challenging lowseason
this winter.
Given the scarcity of new
business compared with the
growing list of spot/prompt
tonnage, we see little chance of a
recovery or even a halt in the
decline in the near future,
warned a UKchartering broker.
Broking houses fromHamburg
andCopenhagen echoed that
sentiment in their commentaries
last week, lamenting the lack of
fresh business amid the urry of
short-termcontract extensions
nowdominating activity.
Statistics showspot availability
of charter-free tramp vessels has
reached alarming levels in the
upper size classes, not seen since
the early stages of the charter
market recovery in 2010. One
Hamburg broker estimated spot
availability in the 4,250teu size
class at eight ships worldwide and
in the 3,500teu class at a
whopping 19 units.
Increased relet activity among
the container ship operators
coupled with a general decline in
requirements because of a at
cargo peak season are leaving
more big ships without employ-
ment opportunities. And this is
even ahead of the historically
quiet fourth quarter, which saw
daily hire levels slip by more than
10%in previous years.
London broker Braemar
Seascope warned in its latest
market round-up that the
pressure fromthe Panamax
segment is seemingly taking its
toll on the sizes below. Panamax
rates have already nosedived by
36%to 46%, depending on period
lengths and regions, brokers said.
19units
spot availability in the 3,500teu
size class
Anumber of fresh xtures and
extensions of 2,700-2,800teu and
of 3,000-3,500teu types revealed
a sharp decline in charter values in
these segments, too. These include
the 3,359teu ERMelbourne, which
Container ship charterers
poised for more bargains
Pressure on charter rates
is reaching the sub-
Panamax sectors and a
rate recovery is unlikely
soon, brokers say
extended a short exible period
with Maersk Line at a weak
$9,500/day with delivery at
Algeciras last week. The geared
3,091teu Letavia achieved
$12,000/day in a six-month period
withCMACGMin northeast Asia,
although this is hardly more than
the going rate for the smaller
2,500-2,800teu types.
Pricing in the larger sizes is
certainly out of kilter with the
smaller feeders and this looks set
to continue, commented
another UK broker.
Out of touch
The ConTex values 24-month
periods for 2,500 and 2,700teu
types at $13,217 and $13,659/
day, respectively, but such
durations are currently out of
touch with the market. Instead,
ships are increasingly xing
shorter or exible periods at well
below$12,000/day, in the hope
this might cover themthrough
the quiet season to the northern
hemispheres spring or summer
next year. The gearless 2,732teu
Passat Spring xed a six to 12-
month period with MISCin
Southeast Asia at $11,450/day,
while some others only secured
very short periods or round
voyages at about $12,000/day.
That could leave themexposed
though during the winter.
One of the more stable areas
of the market is the midsize
1,700teu segment, which saw
some ships xing at about
$10,000/day above the
ConTex rate for immediate
spot positions. For example,
Korean operator KMTC had to
pay $10,200/day in a four to
ve-month period extension on
the 1,740teu Cape Nelson from
the end of September in Pusan.
Steady xing activity in this size
class over the recent weeks has
led to a lack of prompt supply
for the end of September into
early October requirements,
brokers said.
F
markets
The 2,732teu Passat Spring was xed for a six to
12 month period with MISC in Southeast Asia
at $11,450/day [ Photo: Dietmar Hasenpusch ]
Pricing inthe larger sizes is
certainly out of kilter withthe
smaller feeders andthis looks
set tocontinue
A number of multi-ship sale and
purchase deals were concluded
over the past week, although the
market currently lacks obvious
direction in either main sector.
Recent improvements
possibly seasonal in the Baltic
dry indices may have put a
temporary brake on falling bulker
valuations. However, the balance
of opinion about prospects for
2012 remains mainly pessimistic,
considering the macroeconomic
outlook and expectations of
growing tonnage supply.
Sumitomo is believed to have
given up in its attempts to secure
more than $30Mfor its
Kamsarmax TritonOsprey (built
2007 Universal, 81,448dwt), by
agreeing a sale price of about
$28MfromMykonos Shipping.
There are currently a couple of
older Panamaxes under rm
negotiation, with the prices
rumoured to be at levels rather
lower than achieved before.
Precious Shipping of Thailand,
previously a Handysize specialist,
is said to have been the buyer of
three prompt-delivery Supramax
resales fromTaizhou Sanfu
Shipbuilding in China at $26.5M
per unit. The 57,000dwt ships
were originally contracted by
Oskar Wehr. Indonesian interests,
meanwhile, are thought to have
paid $22.5Mfor Young Spring
(built 2002Oshima, 53,023dwt)
which was sold by the original
contracting owner, Ta-Tong
Marine of Taipei.
Handysize values continue to
slip, sale by sale. Orient Marines
open-hatch type Aladdin Rainbow
(built 1999 Kanda, 32,260dwt)
has reportedly been committed at
$16M, compared with the
$17.5Mpaid in June for the
similar Crimson Forest (built 1999
Hakodate, 31,727dwt).
In the tanker sector, Titan
Ocean has continued to dispose of
its single-hull FSOs, with
Petrobras said to have paid
$72.7Men bloc for TicenOcean
(built 1991 Daewoo,
284,497dwt), TitanOrion (built
1992 Hyundai, 284,480dwt), and
TitanAries (built 1993 Daewoo,
302,493dwt). These are destined
to serve the Brazilian oil majors
storage requirements and, even
compared with the alternative of
scrapping, the price levels look
quite modest.
Sinochemis believed to have
purchased the stainless chemical
tanker sisters Isabel Knutsen and
Maria Knutsen (built 2000 and
2001Gijon, 22,377dwt) for
about $22.5Meach, en bloc.
The price for the ships, which
both have 24 cargo tanks, is more
or less in line with recent sales of
Japanese stainless units. How-
ever, the Chinese major might
have, arguably, paid a small
premiumfor a pair of ships with
high specications.
LeonTrading of Greece is
thought to have paid about $20M
each for Sekwang Shippings
Marineline-coated sisters Royal
Stella and Royal Orion (built 2009
Sekwang, 19,997dwt) at a sherifs
auction in Singapore. With IMO2
chemical notations but with
coated tanks, the vessels have less
cargo exibility and inherent
material value than stainless ships.
Nonetheless, in the event of a
market recovery, the modest price
level paid for such modern Korean-
built units may prove to be a
successful long-terminvestment.
In yet another en bloc chemical
tanker deal, the Norwegian-
controlled, coated ships Sichem
Padua and SichemPandora (built
1993 and 1994 Hyundai,
9,215dwt) are believed to have
changed hands for $4Meach,
with unidentied Greek buyers
thought to be involved.
In the smallest range of tanker
sales, ve of a series of Chinese-
En bloc sales dominate
More deals are being
done but the outlook
remains pessimistic
built product tankers have
reportedly been sold for $6M
each to UK-based interests. The
ships involved are Brixham,
Mumbai, Harlington and Kiel
(built 2009-2010 Rongcheng
Shenfei, 5,500dwt) and the
Rmeil (built 2010 Rongcheng
Shenfei, 6,174dwt).
Technomar is believed to have
concluded another purchase and
charter back deal for large
container ships. Orient Overseas
OOCL Japan, OOCL Britain, OOCL
Singapore and OOCL Netherlands
(built 1996-97 Mitsubishi,
67,473dwt) are believed to have
achieved $32Meach with time
charters back to the sellers at
$27,800/day, or the bareboat
equivalent, in each case.
Delivered in time for the
handover of Hong Kong to
Chinese rule, these were fromthe
rst series of 5,300teu over-
Panamax ships built for the Tung
familys container line.
Overall, the rmness of scrap
prices continues, with India taking
the lead in terms of numbers of
newprojects while Chinese
recyclers are showing greater
willingness to pay up in order to
keep their dry docks occupied.
Perhaps the most signicant sale
in the latter respect was the
$480/ldt reportedly paid by
Chinese buyers for the single-hull
Suezmax Shen Non II (built 1991
CSBC, 25,545ldt), a distinct
improvement on the recent range
of $440-$450 which has
prevailed this summer.
Alang breakers showno sign of
losing an appetite for new
projects, even when the delivery
position of the vessel involves a
lengthy repositioning voyage. As
an example of this, scrapping
reports list Indian interests as the
purchasers of Soponatass
Panamax tanker Estrecho de
Magallanes (built 1991 Zaliv,
15,991 LDT), at $440/ton, basis
delivery as is in Chile at the end
of the year.
F
markets
$27,800/day
time charter back agreement or the bareboat equivalent reported for four
OOCL containerships, each 67,473dwt, 5,300teu
Falling Handymax values:
Aladdin Rainbowis typical
[ Picture: World Ships ]
The versatile medium-range (MR)
products tanker market should
cushion any impact fromdeclining
Indian naphtha exports.
Indias annual naphtha exports
have reached 106Mtonnes since
2008. But recent reports suggest
the gure is set to drop owing to
rising demand fromIndias
expanding plastics industry. Indian
naphtha demand is expected to
growby 11.45%year-on-year.
MRrates for theWCIndia-Japan
and theWCIndia-Singapore lanes
have begun softening, although
this could also be because of
recently ended month of Ramadan.
On 18August, WCIndia-Japan
rates averagedW175andWCIndia-
Singapore rates averagedW215.
Last week, WCIndia-Japan rates
averagedW151andWCIndia-
Singapore rates averagedW190.
Indian naphtha consumption
dropped froma high of 13.9M
tonnes in 2006-07, to 10.1M
tonnes in 2009-10, before
recovering gradually to 10.7M
tonnes in 2010-11.
MRtanker operators are
unconcerned, telling Fairplay that
their vessels small sizes enable
themto easily nd alternative
employment. MRtanker pool
Handytankers managing director
Kristian Lohmann said: The big
naphtha trading pattern is AG-
Japan and it is usually transported
on LR2s. Handytankers transports
naphtha but it is mainly from
Algerian reners.
Even with a weak market in
India, Handytankers can still seize
opportunities elsewhere due to
the wide area we trade in.
Brokers agree with Lohmanns
assessment, pointing out good
employment opportunities in the
cross-AGand intra-Asia markets.
For every
Indiancargo,
there are five-
to-six Middle
Easterncargos
W175
freight rates for India-Japan route on
18 August
Rates are very protable due
to tight tonnage availability and
charterers demands for short
Painless Indian naphtha drop-of
Strong intra-regional
trades would cushion
impact of falling exports
turnaround times. Voyages last
two-to-three days so slow
steaming does not apply here. For
every Indian cargo, there are ve-
to-six Middle Eastern cargoes,
said one Singapore-based broker.
Reported xtures showcross-
AGMRrates have headed north
month-on-month.
Cross-AGrates range from
$230,000-$275,000, on a lump-
sum-per-voyage basis. Riskier
locations such as Iran and Iraq
command premiums. Last week,
Tragura took TORMCarina for a
UAEIraq voyage for $350,000.
Gasoil, gasoline and Iranian
naphtha are among the products
that are commonly shipped
within the AG.
But MRtanker operators are in
no rush to divert ships to the AG
as intra-Asia rates are comparable.
Last week, Shell took Vinalines
Dai Minh for $285,000 for a
Uncertainty deters
Capesize S&P
Doubts over the sustainability of
current Capesize spot rates and
other factors have ensured that
resale prices continue to lag behind
freight levels.
Just last week, bankrupt Korea
Line reportedly tried and failed to
sell 2005-built Begonia, for which
the highest ofer, reportedly from
Chinese parties, was $37.5M.
That was the second failed
Capesize resale in two months,
after Sanko Steamships
unsuccessful attempt to sell
newbuilding Sanko Partner to
Greek interests for $45M. Last
week, Norwegian broker
Lorentzen &Stemoco reported
that NYKLine sold 1994-built
Suma (renamed GloryApollo) to
Sea Star Ships Management in
China for $14.5M.
In a similar transaction in
March, Hong Kong-based
Vermilion Overseas Management
sold 1996-built Cape Azalea
(renamed Cape Ioanna) to Greek
interests for $23M. Analysts
agree that uncertain freight
levels are the main reason for
sluggish asset prices.
Greek shipbroker Intermodals
analyst George Eliades said: Most
markets
shipowners are still sceptical about
whether the timing is right for
themto make a move. The feeling
of too lowto sell and too high to
buy is dominating the market. It
seems most owners are pacing
themselves for an unpredictable
quarter and indeed for the
unpredictable years to come.
LimSimKeat, CEOof
Singapore-based Pacic Shipping
Trust, is one such owner. He told
Fairplay that, for now, he had no
plans to expand his Capesize eet.
PST took delivery of Shagang
Hongfa fromHyundai Heavy
Industries on 5September. Asister
ship, Shagang Hongchang, is
Potential buyers still
think resale prices could
drop further
Capesize freight rates are
dependent only ondemandfor
steel andpower generation
HsuChihChien
scheduled to be delivered soon and
both ships have been chartered to
Chinese steel mill Jiangsu Shagang
for 10years at $27,000/day.
Limsaid: I dont foresee
current rates to be sustainable as
the orderbook-to-eet ratio is still
substantial. There are several
secondhand Capesizes on sale but
markets
Thailand-Singapore trip and BP
took Tanker Pacic Manage-
ments Pacic Crystal for
$295,000 for a Map Ta Phut-
Singapore voyage.
Shipments regularly move on
the South Korea-Singapore,
Singapore-Australia, and
Singapore-Japan lanes. Firming
rates have encouraged charterers
to request period charters of one-
to-two years, said the broker.
At present, period charter rates
for MR tankers approximate to
$14,000/day.
Voyages to pirate-infested
areas in the Red Sea and of East
Africa remain rewarding for risk-
taking owners.
A broker quoted W270 for an
AG-East Africa voyage, translating
into daily earnings of $17,000
after deducting voyage costs.
French shipbroker Barry
Rogliano Salles made a similar
assessment.
The MRs have been busy with
a consistent owof intra-
regional moves. Cross-MEG
voyages are xing at about the
$280,000 lump-sumlevels and
AG-Red Sea is going at
$850,000, said BRS.
The cross-AGmarket is doing so
well that BRS says owners are
unwilling to x AG-UK-Continent
voyages, which are priced at
$1.8M/voyage.
Shipbroker Simpson Spence &
Young concluded that as Taiwans
Formosa Petrochemical Corp is
set to restart its 700,000 tonnes/
annumnaphtha cracker this
month, Asias naphtha backward-
ation is set to strengthen on rm
demand and tight supply.
Mitsui OSKLines is optimistic
about its MRoperations,
expecting more naphtha exports
fromSingapore to the Far East.
With some Indian reneries
due for maintenance soon, we
also expect more cargo, mainly
distillates, to move from
Singapore to India. It might cause
tight vessel supply in Singapore
so we will position our vessels in
the Singapore-Japan range, said
an MOL spokeswoman.
F
// //
older vessels are not fuel-efcient
and current bunker prices make it
uneconomical to operate these
ships. Because of this, we prefer
to invest in newbuildings.
Courage Marine chairman Hsu
Chih Chien told Fairplay he
believed volatile Capesize freight
rates mean owners should
consider carefully before
committing. The company has
just one Capesize vessel.
The Taiwanese shipping
veteran said: Capesize freight
rates are dependent only on
demand for steel and power
generation. Congestion in major
dry bulk ports or a slight uptick in
demand will make rates go up.
Conversely, freight rates quickly
go down when demand dips.
Analysts consensus is that the
Capesize market will stay
depressed over the next two-to-
three years. Massive newbuilding
deliveries could mean really good
pre-owned bargains by then.
Todays situation, where prices are
almost the same for all bulker
sizes, is really silly. So I would wait
longer before buying a Capesize.
Greek shipbroker Golden
Destinys analyst Maria Bertzele-
tou told Fairplay that on average,
no more than ve bulkers have
been sold every week. The last
record of year-to-date activity in
the bulk carrier segment was in
the week ending 13August, when
nine units were reported sold.
It is true that there has been a
signicant rally in the dry sector,
driven by the substantial
earnings for Capesizes due to
rmChinese iron ore demand,
but there is still hesitation about
the solidness of the market as we
move towards the end of
September, said Bertzeletou.
Spot and period chartering
activity has shown signs of
strength for all vessel sizes,
oating at levels above operating
expenses, she continued, but
there is always a time lag
between the direction in the
freight markets and asset prices.
She told Fairplay Capesize
prices dived when spot rates
languished in 1H11 and it would
take some time for asset values
to recover.
She said: Buyers just recently
sawnewasset levels after waiting
for months whenCapesize
earnings struggled to remain
above $10,000/day. Nowthe
market has shown the rst signs of
rmness with the Baltic Dry Index
surpassing the 1,700mark, players
are waiting to see what will be the
newdirection post-September.
F
$37.5M
ofer for 2005-built Begonia.
The sale failed
[ Photo: Courage Marine ]
Baltic clean tanker rates, West Coast India to Japan
TC12
Route description: 35,000 tonnes
Naptha Sikka (WCI) to Japan
shipping markets
Weekly summary of all the key
industry indices and data
Container ship Timecharter Assessment
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Q Q Q Q Q
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1,200
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300
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4,500
4,000
3,500
3,000
2,500
2,000
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25,000
20,000
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Baltic dry indices BDI: 1,814 -24 (-1.3%)
Outlook: In the Baltic Capesize index for
the iron ore trade from Brazil to China, rates
softened about a $1.00 to $26.77/tonne and
lost $0.63 to $10.92 on Western Australia
to China. Brokers suggest major charterers
are trying to contain the recent gains in the
Capesize market where rates have reached
highs for 2011. Panamax grain markets have
frmed for early ship availability from the US
Gulf Coast to the Far East at $25,000/day plus
a $500,000 ballast bonus. The South American
grain season is winding down with trips to the
UK/Continent at $15,250/day plus a $450,000
ballast bonus. Supramax grain rates from the
US Gulf Coast have frmed 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 frming sign for
VLCC spot rates from West Africa to the LOOP
was the gentle increase to W46.9. From the
Gulf softening fuel prices improved the time
charter equivalents (TCE) for the TD1 route by
$2,904 to -$12,420/day; less negative but still
the same worldscale of W34. Suezmaxes from
the Baltic Sea to Mediterranean saw rates jump
13 points to W82.3 which lifted the TCE from
negative levels to $10,168/day. West Africa to
Philadelphia rates frmed to W70.89 and more
than doubled the TCE to $8,776/day. Aframax
rates saw frming on the North Sea to UK/
Continent (TD17) route to W97.5. Elsewhere
rates were similar to last week.
Outlook: Over capacity and a drop in
enquiry because of mid-autumn holidays in
Asian countries saw another 2% drop in the
ConTex week-on-week with most signifcant
losses aficting the Panamax sector. Pressure
is also fltering through to the 2,500-2,800teu
types which are now fxing below $12,000/day
for shorter and fexible periods and so well
below the ConTex average based on 24 month
periods. The 1,700teu midsize types show more
resilience amid tighter availability for prompt
positions 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: 3,342
Last week: 3,185 3 ML: 1,738
+3.6%
+3.2%
-0.9%
Panamax Index
This week: 1,746 3 MH: 1,796
Last week: 1,685 3 ML: 1,475
Supramax Index
This week: 1,446 3 MH: 1,446
Last week: 1,401 3 ML: 1,244
Handy Index
This week: 677 3 MH: 721
Last week: 683 3 ML: 641
VLCC TCE
This week: -$7,195/day
Last week: -$9,431/day
Suezmax TCE
This week: $9,472/day
Last week: $1,748/day +441.9%
Aframax TCE
This week: $483/day
Last week: -$656/day +173.6%
MR-TCE
This week: $7,196/day
Last week: $6,766/day +6.4%
+23.7%
BFA BDI 4Q11: 1,559 BFA BDI 1Q12: 1,338
The global lndependent authorlty on marlne fuel and shlpplng prlce lndlces, news analysls, lnformatlon
& counterparty credlt rlsk lntelllgence. Por more lnformatlon please vlslt www.bunkerworld.com
www.bunkerworld.com
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EUROPE 380CST 180CST MDO MGO
D ANTWERP
D FALMOUTH
D GREAT BELT
D HAMBURG
D ROTTERDAM
D ST PETERSBURG
MEDITERRANEAN 380CST 180CST MDO MGO
W AUGUSTA
W FOS/LAVERA
D GIBRALTAR
D ISTANBUL
D OFF-MALTA
D PIRAEUS
AFRICA 380CST 180CST MDO MGO
D ARZEW
D CANARY ISLANDS
W DURBAN
D OFF-NIGERIA
W DAKAR
S O N D J F M A M J J A S O
Q Q Q Q Q
Bunkerworld index
1,700
1,600
1,500
1,400
1,300
1,200
1,100
1,000
BW380, BW180 in centi Stoke
BWDI for distillate fuels
For online bunker information:
www.fairplay.co.uk/markets or
www.bunkerworld.com/prices
I
n
d
e
x
For online bunker information: www.fairplay.co.uk/markets orvisit www.bunkerworld.com
MIDDLE EAST 380CST 180CST MDO MGO
D DAMMAM
D FUJAIRAH
D JEDDAH
D SUEZ
ASIA 380CST 180CST MDO MGO
D CHENNAI
D COLOMBO
D HONG KONG
D KAOHSIUNG
D SINGAPORE
D SOUTH KOREA
D SYDNEY
D TOKYO
AMERICAS 380CST 180CST MDO MGO
D BUENOS AIRES
W HOUSTON
W LOS ANGELES
W NEW YORK
W PANAMA
D SANTOS
W SEATTLE
D VALPARAISO
W VANCOUVER BC
W 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 the
average price of bunker fuel as being
relatively stable at the end of last week.
Global average bunker prices uctuated
during the week but by Friday, the
BW380 index rmed by $2.00 to
$672.50/tonne and the BWDI was
unchanged at $992/tonne.
At the beginning of the week, the
Singapore bunker market saw soft
prices but rmed strongly on Friday. An
average of $674.50/tonne for IFO380
centistoke (cSt) was seen, $33/tonne
up from Mondays price, by the close
of the week average marine gasoil
(MGO) prices were at $953/tonne.
Market players commented that
demand had been relatively weak due
to high prices. Onshore stocks of fuel
oil rose to 21.275M barrel in the port
last week, according to data published
by International Enterprise. Market
commentators predicted that stocks
should continue rising towards the end of
September. October is also expected to
see heavy Western arbitrage inows, with
over 3.5M tonnes booked so far, according
to Reuters.
In Rotterdam, tight avails were
reported during most of the week by
some suppliers. The price for IFO380 cSt
product closed on Friday at $652/tonne
and MGO prices closed at $958/tonne.
However, there were mixed reports from
some sources; one player mentioned that
rumours of tight avails were unfounded.
By the close of the week, prices ended rm
in the bunker market in Fujairah. Average
delivered IFO380 cSt prices closed up at
$676.50/tonne and MGO prices reached
$1069.50/tonne. In Houston, IFO380 cSt
prices nished at $651/tonne and MGO
at $982/tonne. According to the United
States Department of Energy, crude oil
inventories fell 6.7M barrels last week
while gasoline stockpiles rose by 1.9M
barrels which may have a downward
inuence on bunker prices.
On Friday, crude oil futures contracts
on the Nymex slipped to $87.96/barrel
trimming its fourth straight weekly
gain and longest winning streak since
July; a result of concern that European
plans to solve its debt crisis may fail.
Brent, which closed at $112.22/barrel,
saw little change last week; according
to chart analysis by Citigroup it may
be headed toward $150/barrel, with a
subsequent 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
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 Daily
Newbuilding News email service. Visit www.ihsfairplay.comor email [email protected]
CoNtaiNer &MultipurpoSe
aVoNBorG, alaSKaBorGand atlaNtiCBorG:
(general cargo ships) sold en bloc by Wagenborg Shipping,
Netherlands, to CITGOPetroleum, 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 by
Singa Star, Singapore, to PT Tanto IntimLine, Indonesia,
$8.40M. 1993. 22,308dwt, 16,869gt, 1,304teu. Built Shin
Kurushima, Mitsubishi, 12,961bhp/19kt
BulKerS
lorDBYroN(bulk carrier) ex-Blue Star: sold by Anthony
Giavridis Maritime, Greece, to undisclosed interests,
Russia, $5.70M. Last sale: $17.30M(2007), 1985.
25,694dwt, 14,889gt. Built Imabari, B&W/13kt.
taNKerS
HiGHCeNturY: (oil products tanker) sold by dAmico
Societa di Navigazione, Italy, to Nathalin, Thailand, $27M.
dAmico purchase option taken in July transferred to
Nathalin. Last sale: $23.80M(2011), 2006. 48,676dwt,
28,799gt. Built Iwagi, MAN-B&W/15kt.
SNFeDeriCa(oil products tanker) ex-White Dolphin: sold
by 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 KNutSeNand MariaKNutSeN: sold en
bloc by Knutsen OAS Shipping, Norway, to Sinochem
International, China, $45M. Isabel Knutsen (products
tanker) ex-Chembulk Savannah: 2000. 22,377dwt,
13,753gt. Built Naval Gijon, MAN-B&W/16kt. Maria
Knutsen (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 iDa
SelMer: (bulk carriers) sold en bloc by clients of Taizhou
Sanfu, China, to Precious Shipping, Thailand, $79.50M.
Helga Selmer: 2011. 57,000dwt, 32,957gt. Built Taizhou
Sanfu Ship Engineering, MAN-B&W/14kt. Thomas Selmer:
2011. 57,000dwt, 32,300gt. Built Taizhou Sanfu Ship
Engineering, MAN-B&W, 10,956bhp/14kt. Ida Selmer:
2011. 57,000dwt, 32,300gt. Built Taizhou Sanfu Ship
Engineering, MAN-B&W, 11,510bhp/14kt.
SeleCteDNeWBuilDiNG orDerS reporteDWeeK eNDiNG 16 SepteMBer 2011
Shipbuilder No owner/operator Delivery type Capacity
Kitanihon 6 Zodiac Maritime 2013/8 Chem/oil prods tanker 19,800dwt
STX Rauma 2 Eide Marine 2013/3 Well stimulation vessel 31,000dwt
Samsung 1 Thenamaris 2014/12 LNG tanker 160,000m
SeleCteDDeliVerieS reporteDWeeK eNDiNG 16 SepteMBer 2011
Vessel Shipbuilder owner/operator Delivery type Capacity
Amazon New Times Dynacom 2011/9 Crude oil tanker 163,000dwt
Baosteel Emotion Namura MOL 2011/9 Ore carrier 226,434dwt
Confance SPP Christian F Ahrenkiel 2011/9 Bulk carrier 34,970dwt
Eagle Texas Tsuneishi AET 2011/9 Crude oil tanker 107,500dwt
Golden Enterprise Jinhai Heavy Golden Ocean 2011/9 Bulk carrier 79,471dwt
Hanjin Samarinda New Century Hanjin 2011/9 Bulk carrier 115,000dwt
Industrial Force Sainty Jiangdu Jungerhans 2011/9 General cargo ship 14,358dwt
Jewel of Tokyo IHI Marine Emirates Trading 2011/9 Bulk carrier 56,300dwt
Kimberly C Jiangsu Yangzijiang Carisbrooke 2011/8 General cargo ship 6,750dwt
King Harold New Century Knig 2011/9 Bulk carrier 80,000dwt
Liberty Island Saiki HI Marubeni 2011/9 Bulk carrier 37,000dwt
Maersk Cunene Hyundai Samho AP Mller 2011/9 Container ship 4,500teu
Mezaaira A STX Jinhae ADNOC 2011/9 Oil products tanker 73,400dwt
Rich Duchess II Sumitomo Fuyo Kaiun 2011/9 Crude oil tanker 104,280dwt
Rickmers Tianjin Xinshun Rickmers 2011/9 General cargo ship 17,409dwt
Seastar Endurance Zhejiang Jingang Norbulk 2011/9 Bulk carrier 33,500dwt
Star Borealis HHIC-Phil Star Bulk 2011/9 Bulk carrier 180,000dwt
STX Symphony Taizhou Maple Leaf STX Pan Ocean 2011/8 Bulk carrier 31,800dwt
Vishva Nidhi STX Dalian SCI 2011/9 Bulk carrier 57,145dwt
For more information on fxtures see: www.fairplay.co.uk/markets
Fixtures [ Source: Maritime Research Inc / www.maritime-research.com ]
Mar|t|me Research Inc.
Fixture Reports via email
Spreadsheet, Database or PDF formats
499 Emston Rd
Par|in NJ 08859 USA
Phone. (732} 727-8040
Fax. (732} 727-0243
Emai|. mri499@ao|.com
Website. www.maritime-research.com
Historical data dating back to 1951
lndexes and statistical analysis
Supp|y|ng the mar|t|me |ndustry w|th comprehens|ve and |ndependent xture |nformat|on for over 50 yearsI
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/25,000tShinc
Coal Coronado, 00, or sub, Gladstone WC India 75,000-10% Sep 10/20 21.50 SAIL FIO;20,000tSatShex/25,000tShinc
Coal Medi Lausanne, 06 Mobile Koper 70,000-10% Sep 20/30 22.25 Pioneer FIO;30,000tShinc/15,000tShinc
Iron ore Oriental Nicety, 86 Tubarao Qingdao 190,000-10% Oct 20/30 23.00 Dreyfus FIO;ScLd/30,000t
Iron ore Steamer, (Cosbulk) Tubarao Qingdao 160,000-10% Sep 20/30 29.75 Minmetals FIO;ScLd/30,000t
Iron ore Daniela Schulte, 10 Guaiba Kaohsiung 90,000-10% Sep 15/30 30.75 CSE FIO;40,000t/38,000t
Iron ore Steamer Pointe Noire Piombino 75,000-10% Oct 1/10 15.00 Erdemir FIO;40,000t/40,000t
Iron 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/MEGulf
14k/52t Nightwing, 06 Del Rotterdam Redel Skaw/CapePassero 170,000 Sep 28/30 26,500 CNR TransAtlRd
14.5k Gl Xiushan, 11 Del Caofeidian Redel Sing/Japan 98,681 Sep 11/13 14,000 CNR AusRd
13.8k Sea Breeze, 09 Del Kaohsiung Redel Sing/Japan 91,913 Sep 14/16 13,000 CNR IndonesiaRd;Relet
14k/35t Clara, 06 Del Praia Mole Redel Mobile 77,073 Sep 16/19 15,750 U-SeaBulk TripOut;SteelSlabs
14.3k/34.8t Francesco Corrado, 08 Del Tachibana Redel Sing/Japan 77,061 Sep 20/25 14,000 Cargill NoPacRd;Soyabeans
14k/35t Captain P Egglezos,07 Del Of Recalada RedlPassMuscatViaMEGulf 76,559 Sep 25/30 25,000 ETA Dubai TripOut+$600,000Bonus
14k/34t Bahia Blanca SW, 11 Del SW Pass RedlSing/JapanViaUSGulf 75,700 Sep 20/25 25,500 Crossbridge TripOut+$550,000Bonus
14.5k/33.6t Pearl C, 87 Del CJK Redel Sing/Japan 65,522 Sep 13/18 9,500 CNR NoPacRd;Grain
14.5k Christine B, 09 Del Of Recalada Redel Sing/Japan 58,058 Sep 19/22 22,000 Bunge Trip+$425,000BB;Relet
14.5k Ocean Future, 10 Del USGulf Redel Sing/Japan 55,771 Sep 18/20 30,000 Norden Trip out
14k/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 cargo
Oil dirty Umm Al Aish, 11 Rotterdam Singapore 270,000 Sep 26 $2,850,000 Unipec PtC;Lump sum
Oil dirty Katsuragisan, 05 ME Gulf Japan 265,000 Sep 24 W46 Cosmo
Oil dirty Antarctica, 09 W Africa China 260,000 Sep 26 W42 Unipec
Oil dirty Minerva Doxa, 07 Novorossiysk UK/Continent Med 135,000 Sep 25 W67.5 Vitol
Oil dirty Spyros K, 11 Ceyhan Terminal USGulf 130,000 Sep 30 W55 Vitol
Oil dirty Yannis P, 10 W Africa UK/Continent Med 130,000 Sep 29 W62.5 CSSA
Oil dirty Hellesp Trooper,orSub ME Gulf USAtlantic USGulf 130,000 Sep 30 W47.5 Chevron
Oil dirty Stena Arctica, 05 Primorsk UK/Continent 100,000 Sep 25 W72.5 ST Shipp
Oil dirty United Honor, 10 W Africa Trinidad 100,000 Sep 25 W77.5 Admar
Oil dirty Proteas, 06 Hound Point UK/Continent 80,000 Sep 22 W97.5 Shell Part cargo
Oil dirty NS Columbus, 07 CPC Mediterranean 80,000 Sep 26 W87.5 Litasco Part cargo
Oil dirty Zaliv Vostok, 09 Sidi Kerir Spain 80,000 Sep 25 W82.5 Repsol Part cargo
Oil dirty Eagle Turin, 08 W Africa UK/Continent 80,000 Oct 1 W87.5 CSSA Part cargo
Oil dirty Green Warrior, 11 Ras Tanura Mumbai 69,000 Sep 25 W114 SCI Part cargo
Oil dirty SN Federica, 03 Seria Daesan 58,000 Sep 26 W127.5 HOB Part cargo
Oil dirty Fourni, 10 Black Sea Mediterranean 40,000 Sep 23 W117.5 Saicat
Oil clean SKS Delta, 10 ME Gulf Japan 75,000 Sep 15 W127.5 YNCC Part cargo
Oil clean Glory Express, 06 USGulf UK/Continent 38,000 Sep 11 W110 CNR
Oil clean Nord Innovation, 10 Pembroke USAtlantic 37,000 Sep 16 W125 Valero
Oil clean Jag Prakash, 07 Sikka Singapore 35,000 Sep 21 W192.5 Conoco Part cargo
Oil clean British Security, 04 Qatar Sohar 30,000 Sep 17 $270,000 Shell PtC;Lump sum
Economic trends: Apprehension make times tough Greek shipping: Banks merger spells good news for industry
Cruise crunch: Europe puts the squeeze on summer Venezuela: Currency controls are Catch-22for shippers
When container lines sufered
huge losses in 2009, they
pleaded with their Caribbean
transhipment partners for
concessions, fromtarifbreaks to
extended payment terms.
It looked like carriers were
back on track last year but it
didnt last. Carriers are once more
deep in the red and concession
chatter has resumed.
There used to be crises every
ve to seven years. Nowit looks
like were back again after two
years the timing is getting
shorter, saidCarlos Urriola,
general manager of Panamas
Manzanillo International Terminal
(MIT) and president of the
Caribbean Shipping Association.
It is really tough times for the
shipping lines we are basically
repeating 2009, conrmed Poul
Hestbk, Hamburg Sd senior
vice-president of the Caribbean
and Central America.
Everybody, including
Hamburg Sd, is focused on
cutting costs. Whether its
looking at tarifs or ways of doing
things more optimally, every
single cost itemis being exam-
ined, he told Fairplay.
Hamburg Sds volumes in the
Caribbean Basin returned to 2008
levels last year and have increased
in the single digits in 2011. Its
not a volume issue, its a rate
issue, Hestbk explained.
Last year, Hamburg Sds
revenue/teu was still about 10%
below2008 levels. This year,
revenue/teu has generally
matched 2010. But the real killer
in 2011 versus 2010 has been the
bunker costs, Hestbk said,
explaining that very fewlines
have been able to pass this on,
which is why they are running at
heavy losses.
The higher volumes in the
region can be seen in the strong
Hubs face carrier pressure
Fairplay examines international trade and commerce developments across industries and
sectors and puts them into a maritime context. Visit www.fairplay.co.uk for daily news updates
Transhipment
margins could
be squeezed as
lines struggle, reports
Greg Miller
C
a
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There usedtobe crises every five
tosevenyears. Nowit looks like
were back againafter twoyears.
The timing is getting shorter
CSApresident Carlos Urriola
throughput numbers of some, but
not all, the transhipment hubs.
MITs volumes are up 20%year-
to-date, according to Urriola.
Another indicator is the volume
carried by the Panama Canal
Railway (PCR). PCRrepresents an
important link in a key
transhipment model, whereby
boxes are unloaded at Balboa on
the Pacifc side and shuttled to
Cristobol and MIT on the Atlantic.
PCRpresident TomKenna told
Fairplay the railway expected to
move 400,000 containers this
year, the equivalent of 1.36Mteu
in transhipment terms. That
represents an 11%increase versus
last year.
Meanwhile, Cartagena
continues to growat breakneck
pace, with higher volumes
creating temporary pressure.
Cartagena is struggling with
its own success. They have been
caught ofguard by the surge in
volume, Hestbk conceded.
Hamburg Sd is Cartagenas top
client. We are confdent they
will push through it.
According to Giovanni
Benedetti, marketing vice-
president of Cartagena terminal
operator SPRC: Volumes were
higher than expected, so there is a
little pressure. Following last
years 25%jump, he predicted
2011 throughput would increase
another 20%, to 1.8Mteu.
Capacity tightness will be
alleviated by expansion at both
the Manga and Contecar termi-
nals. By January, Mangas capacity
will rise to 1.5Mteu/year and
Contecars to 1.2M. This will
bring total capacity to 2.7Mteu/
year from1.9Mat present.
SPRCis nowweighing its next
growth phase. The next three
months will be very important to
us, Benedetti explained. If
market feedback is positive, SPRC
will immediately approve the next
expansion of Contecar, adding a
further 800,000teu/year after an
18-month construction period.
Cartagena is just one of many
hubs plotting newcapacity as the
Panama Canal gears up for its
2014 widening.
According to Urriola, the MIT
board has approved investments
to almost double capacity, from
2.2Mteu/year currently to 4M.
He expects phased construction
to begin next year, although he
underscored that MIT would be
careful to not overbuild.
Kingston plan
In Jamaica, Kingston Container
Terminal (KCT) recently
announced a project to increase
capacity from3.2Mto 5.2Mteu/
year. This plan comes despite
KCTs lower volumes this year
the reverse of the double-digit
gains reported in Colombia and
Panama. KCT expects throughput
of 1.5Mteu inApril 2011-March
2012, down 8%fromthe previous
fscal year.
Like Jamaica, Hutchison-
controlled Freeport Container Port
(FCP) in the Bahamas represents a
huge swath of available capacity
that could have major implications
for future routes.FCP CEOGary
Gilbert told Fairplay that dredging
has recently been completed to
18mon an additional 1,000mof
berth, bringing the total up to
2,000m. A further 1,500mof
berth will be dredged by 2014.
FCPs current capacity of 2M
teu/year could be easily expanded
to 5Mteu/year with the
installation of additional cranes,
which would be ordered when
newcarrier clients sign on.
Gilbert confrmed that
negotiations are well under way
with potential customers.
Just 105kmof Floridas coast,
FCP is ideally located to serve as a
hub for southeastern US ports.
Gilbert believes several American
ports will not be dredged in time
to accommodate the larger ships
deployed after 2014s Panama
Canal expansion.
We need 18-24months lead
time to build the cranes and put
themin, saidGilbert. Working
backwards from2014, this means
were talking about 2012.
Decisions are being made right
now[by carriers] on what to do in
2014-15. Were ofering thema
good option for those big ships.
Complementing projects
planned at existing Caribbean
hubs, newterminal players are
entering the region. As previously
reported by Fairplay, PSA
International has agreed to
operate the newterminal under
construction in Mariel, Cuba.
While Mariel will be a domestic
terminal, some believe the
contract is partly a stalking horse
to position PSA for a future Cuban
transhipment hub.
Last month, APMTerminals
sealed a 33-year contract for the
$992MMoin Container Terminal
in Costa Rica. AlthoughAPMhas
insisted that the facility will be
purely domestic, multiple
sources speaking to Fairplay
predicted that it would ultimately
handle transhipment.
All the newcapacity in the
pipeline, combined with the
fnancial condition of the
carriers, will dictate future tarif
levels at hubs.
The questions will be: how
much of this additional capacity
people are talking about will
happen, and what will this
capacity be aimed at? said
Benedetti. We need to defne
what type of market were
entering: a carrier market or a
terminal market.
F
trade & commerce
Caribbean Basin GDP outlook
Country 2010 2011 2012
Bahamas 0.5 1.0 0.5
Barbados 0.2 2.1 2.9
Colombia 4.3 4.8 4.2
Dominican Republic 7.8 6.0 5.4
Haiti 5.5 9.0 8.0
Jamaica 1.3 1.2 2.9
Panama 7.5 7.2 7.0
Puerto Rico 2.1 1.2 0.9
Trinidad & Tobago 2.3 2.9 3.0
Venezuela 1.5 3.1 2.6
[ Source: IHS Global Insight. 2011 and 2012 GDP trends estimated ]
Freeport is actively seeking
newcarrier clients to
supplement its MSC business
[ Photo: Erik J. Russell/Keen i
Media Ltd ]
for market share in Barbados, he
added, cutting margins for agents.
Shipping executives also told
Fairplay of two parallel trends in
Caribbean cargo sourcing: one
favouring regional sellers and the
other favouringAsian producers.
In the regional category, Hamburg
Sd SVP Poul Hestbk cited a shift
in low-value production towards
the Dominican Republic, El
Salvador and Honduras.
Smaller lots
This trend coincides with
economic uncertainty among
regional cargo buyers, who are
seeking to buy smaller lots with
shorter lead times. If you order in
China, you may have to purchase
100,000units, three or four
months in advance. InCentral
America, you might be able to
order 1,000units and get them
delivered every week. Thats much
less risk for buyers, said Hestbk.
A separate dynamic is pushing
some purchases towards Asia and
away fromtraditional US sources.
There is a consolidation of
distribution companies in the
Caribbean, where larger groups
are taking interests in the smaller
islands, said Paelinck. This
increases their buying power and
allows themto source directly
fromthe Far East.
Hestbk agreed: With more
buying power, they dont need to
go to Miami or the Coln Free
Zone. In general, he said, the
market for goods imported from
the US and Europe is not growing,
and may be shrinking, whileAsian
volumes continue to pick up.
F
Fears for future economic growth
are hampering recovery in the
Caribbean as tourismstruggles
and the reconstruction of Haiti
stalls. More than anything else,
its apprehension. The Caribbean
mindset is shadowing whats
happening in the US, said
SeaFreight executive vice-
president David Ross.
Speaking to Fairplay, Ross
noted that, after a solid frst half,
the autumn peak season ramp-up
was behind schedule. Back in
January and March, the hotels
were talking about projects again,
doing refurbishments theyd put
ofthe year before. I would say its
a diferent song now.
Bernuth Lines EVPTom
Paelinck echoed this view.
Tourismhas not been strong
enough to restore investor
confdence and allowresort
newbuildings and refurbishments
to go forward, he said. Domestic
carriers had hoped such projects
would support fresh volumes.
Furthermore, the very largest
project in the region the
reconstruction of Haiti after the
earthquake remains stalled by
political uncertainty. The
expected food of construction
cargoes has not materialised.
Nothing has happened. It has
come to a standstill, reported
Ross. There is so much money
piled up waiting to go in there but
no-one in their right mind is going
to put money in if they dont
knowwhos in charge.
Several sources divided
Caribbean performance into two:
countries reliant on tourism,
which are struggling, and those,
such as the Dominican Republic,
that are supported by exports.
No-one intheir
right mindis
going toput
money inif they
dont know
whos incharge
In the tourismcategory is
Barbados. According to Robert
Foster, former president of the
Shipping Association of Barbados,
food and fuel infation, combined
with tourisms malaise, has
decreased local buyers spending
power. Carriers are skirmishing
Domestic recovery sputters
Apprehension
about the
economic growth has
put the brakes on the
islands cargo rebound
trade & commerce
C
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Regional mainstay Caribbean Feeder Services (CFS)
has newcompetition. Several years after it frst con-
sidered entering the Caribbean Basin, global operator
X-Press Container Line has fnally made its debut.
X-Press newseven-day service links Manzanillo
International Terminal and Coln Container Termi-
nal in Panama with Honduras and Guatemala. Its
14-day service links the two terminals with Curacao
and Venezuela.
X-Press has been an established player in Asia for
almost four decades and claims to be the worlds
largest feeder carrier, with services spanning Europe
and Africa as well.
X-Press is a force in the market, acknowledged
CFS director Frank Wellnitz. Asked about this years
outlook, he said demand improved slightly earlier in
the year, then stalled. We expected more out of it
but 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 its better.
Feeder market heats up
Bernuth Miami Terminal:
island demand is slipping in
2H11 [ Photo Bernuth Miami ]
shipping portfolios, which have a
good cross-section of owners, will
be easy, said Petropoulos, because
although there is some overlap-
ping, it is not extensive.
As far as Qatars involvement in
the merger is concerned, it shows
that sovereign wealth funds
(SWFs) fromoil-rich countries
still have the appetite to buy
distressed assets.
Bearing in mind that these are
very sophisticated investment
vehicles, they have longer-term
investment horizons compared
with other investors, a Dubai-
based research director for a
London-headquartered invest-
ment banking brokerage rm
explained to Fairplay. SWFs have
been better able to commit larger
proportions of their portfolios to
longer-terminvestments despite
the challenging nancial climate.
The deal is benecial for Qatar,
which is nowable to lower the
cost of its existing 4%stake in
Alpha Bank, purchased in 2008
for about 18/share. Alphas
shares nowtrade for 2.5.
Qatar expects to get an annual
10%coupon fromthe newlender
until its three-year instrument
converts at 1.70/share a 20%
discount to the pro-forma market
price at the time of the deal.
F
Marriages betweenGreeces
shipping families are common,
but a diferent Greek shipping
union will spawn tangible industry
benets. Aunion betweenAlpha
Bank and Eurobank will create the
fourth-largest nancier for Greek
owners, after Royal Bank of
Scotland, Deutsche Schifsbank
andCredit Suisse.
Alpha and Eurobank ranked
10
th
and 17
th
respectively within
Greek ship nance are Greeces
second- and third-biggest retail
banks and big players in south-
eastern Europe. The combined
entity, to be called Alpha
Eurobank, will become the
biggest bank in the region with
146Bn ($201Bn) in assets and
more than 1,000 branches across
eight countries.
IHS Global Insight reported
that the deal involves an exchange
of ve newAlpha Bank ordinary
shares for every seven Eurobank
shares, which will give the
formers shareholders 57.5%of
Bank merger boosts ship nance
Merger creates Greek
shippings fourth-
largest lender and
feeds Qatars appetite
for distressed assets
trade & commerce
A co-operation agreement
betweenWrtsil and Shell, to
accelerate use of liqueed natural
gas (LNG) as a marine fuel, will
run for several years, the
companies said and will target
rst the US Gulf Coast before
expanding elsewhere.
While this is an agreement
with Shell, its not an exclusive
agreement and we will continue
to work with other suppliers,
Wrtsil NorthAmerica vice-
president for ship power John
Hatley told Fairplay. What Shell
brings is an enduring, secure
future supply that the market
desperately needs so it knows it
can safely proceed with LNG.
The use of LNGas a marine fuel
has yet to extend to any large
degree beyond Scandinavia.
Shipowners have been
reluctant to make costly invest-
ments to retrot vessels and this
lowdemand has made oil and gas
companies just as reluctant to
invest in supplying the market.
A new IHS CERA report saw
no major market for LNG bunker
fuel until 2025, especially since
a large number of new fuel oil-
burning ships have recently been
delivered or ordered.
However, oil and gas retailers
have a windowof opportunity
to develop LNGdistribution,
CERA says. Those that do should
be able to maintain a competitive
advantage during LNGs progres-
sive rise to dominance.
F
LNGmarine fuel push
Engine maker and oil
giant break LNG bunker
fuels US stalemate
the combined entity and Eurobank
shareholders 42.5%. The largest
shareholder inAlpha is the
founding Costopoulos family; the
Latsis shipping and oil family is a
core shareholder, as is the Qatari
Investment Authority. Qatar will
spearhead a capital increase of
3.9Bn, which will see the new
outts capital ratio increase to
14%, Global Insight said.
According to research con-
ducted by Athens-based ship
nance analyst Ted Petropoulos,
the two banks have signicant
shipping portfolios: Alphas
currently stands at about $2.5Bn;
Eurobanks at $1.4Bn. Their
merger, Petropoulos told Fairplay,
is a very positive turn for Greek
ship nance. It creates a sub-
stantial shipping portfolio and its
important to say that both banks
have very good relations with
their owner-clients.
According to Petropoulos, Greek
ship nance has been stagnant of
late but the merger, he believes,
will restore its dynamismand
competitiveness and will give it
newdirection. The banks increase
in capital means that, as a merged
entity, they will be able to respond
to requests of clients they could
not respond to until recently.
JoiningAlphas and Eurobanks
The merged
entity will be
able to respond
to client
requests they
could not respond
to until recently
Alpha
Eurobanks
assests
Lenders coin a newbank
for Greek shipping
[ Photo: Malcolm Latarche ] $200Bn
Ihe WesIern Hem|sphere's 8eocon
of Mor|I|me Exce||ence
The Port of Klngston has,
over the past 30 years,
developed lnto an lmportant
player ln the lnternatlonal
shlpplng lndustry and ls now the
leadlng transshlpment hub port
ln the reglon.
Operatlons at the Klngston
Contalner Termlnal hlghllght
a well-tralned and motlvated
workforce, ln an envlronment
of stable lndustrlal relatlons and
leadlng-edge technology.
The Port of Klngston ls
strateglcally located on both the
north-south axls and east-west
axls through the Carlbbean and
[ust 32 mlles on the maln tradlng
route to and from the
Panama Canal.
The Port Authorlty of 1amalca
l5 - l7 Duke Street, Klngston, 1amalca w|
Tel: (876) 922-0290 - 8 Pax: (876) 924-9437
e-mall: pa[Qport[am.com
KCT Servlces Llmlted
Tel: (876) 923-5l42 Pax: (876) 937-79l6
accounted for 27%; Southeast
Asia 16.4%; China and the US
15.4% each. The other major
markets are Japan and the Gulf
states. MPEDA said frozen
shrimp was the number-one
export value item, accounting for
44.2% of earnings.
Newmarkets such as Egypt
and South Africa are expected to
supplement growth, said Sandu
Joseph, secretary of the Seafood
Exporters Association of India.
Rising freight and export costs,
as well as mounting interest
charges, are causing concern
among Indias exporting commu-
nity. Seafood exporters in
particular point out that higher
terminal handling charges across
ports have hit their margins.
For example, Cochin Port, one
of the key seafood export
gateways, recently raised handling
charges by $200/teu.
Exporters warn that higher
export costs in India, which is
competing with other Asian,
Southeast Asian and Latin
American producers, may
ultimately make exports uncom-
petitive in international markets.
F
Leading shipping lines are vying to
get a share of the targeted $4Bn
seafood export market that Indias
commerce ministry has earmarked
for the year ahead. The target is
well ahead of the $2.8Bn output
for seafood exports in 2010-11.
Nowthe season has begun, we
foresee very good movement,
said Kochi-based Asha Pillai of
CMACGM. We cater to the
Western European sector and we
have seen a very good increase in
the exports.
A senior Safmarine executive in
Mumbai told Fairplay:We will
beef up our reefer business to cater
to the growing exports.
In 2010-11, a total of 813,091
tonnes of seafood was exported,
up from678,436 tonnes in the
previous year. Frozen shrimp,
frozen fsh and squid accounted
for most of Indias exports.
A majority of the reefers has
traditionally been handled by
container terminals in state-
Rising costs cloud Indias seafood surge
Rising global demand for
Indian seafood is feeding
reefer operators
trade & commerce
Fromnext week, China will begin
imposing an updated version of its
so-called port construction fee
on cargo coming and going at
Chinese ports.
The new, two-tiered levy a
joint creation of the ministries of
fnance and transport will eat
into shippers margins from1
October and remain in force until
31 December 2020, according to
ministry statements.
Domestic cargo is not subject to
the fee, only imports and exports.
Pointedly, foreign companies
will have to pay more than locals.
Economists suggest the demarca-
tion may be engineered to give
Chinese companies a competitive
edge over foreign companies that,
in some instances, are competitors.
The foreigners fee for bulk
cargo is Rmb5.60 ($0.88)/tonne,
but Rmb4 if the import/export is
authored by a domestic business.
Containers showan even bigger
diference. Domestic import/
exporters pay Rmb32 ($5)/teu
and Rmb48 ($7.20)/feu com-
pared with virtually double for
foreign import/exporters: $10/
teu and $15/feu.
These fees will have to be paid
by the shipper, the consignee or
their agent.
The levys aimis to defray costs
of construction of Chinas ports.
Foreigners feel Beijings fscal bite
Port fee rise will hurt
non-Chinese shipping,
reports Bouko de Groot
owned major ports such as
Jawaharlal Nehru Port (JNPT),
Cochin, Chennai, Tuticorin, Vizag
and Kolkata. Private ports, while
lesser benefciaries, have
nonetheless increased their share
of seafood exports. These include
AP Mller-Mrsks Gujarat
Pipavav and Mundra.
The southernstate of Tamil Nadu
reported$631Minseafoodexport
sales the highest among all
seafoodclusters: terminals operated
by DPWorldandPort of Singapore
Authority at Chennai Port and
TuticorinPort respectively have
increasedtheir share of total
exports. Other leading clusters are:
Maharashtra ($499M), mostly
throughJNPTandMumbai Port;
Gujarat ($481M), mostly through
Pipavav, Mundra andKandla; and
Kerala ($442M), viaCochinPort.
While the traditional markets in
Europe and the US continue to buy
most of Indias seafood, China has
emerged a strong buyer, especially
for value-added products.
Indias Marine Products Export
Development Authority (MPEDA)
said exports grewby 34%in 2010-
11: The largest market, the EU,
At present, a lot of port capacity is
in the wrong place or lacking
proper connections with the
hinterland. In particular, large
drybulk terminals and domestic
container terminals are needed to
make Chinas domestic growth
and trades more efcient.
In a separate blowto foreigners,
Beijing has decreed that expatri-
ate employees must pay local
social security taxes for services
most will never be able to use, a
measure to shore-up a social
security net feeling the double
efects of an ageing population
and infation.
F
813
,
091tonnes
indian seafood exports 2010-11 [ Photo: Shutterstock ]
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The Caribbean is a year-round destination, not a six-month
destination Nathan Dundas, CSA cruise committee head
[ Photo: Greg Miller ]
The Caribbean cruise market is
being seasonally scuppered by
intense competition from
European ports able to generate
higher income yields.
Froman industry standpoint,
its no secret whats going on,
said Carnival Cruise Lines (CCL)
deployment vice-president Terry
Thornton. Capacity has left the
Caribbean betweenApril and
October because its chasing
yields in Europe, where they can
generate higher pricing.
Although this is not the case for
the CCL brand, which is the
largest player in the region and
remains staunchly year-round,
the summer migration of Royal
Caribbean and other lines is now
raising alarms.
ACaribbeanTourismOrganisa-
tion (CTO) delegation met with
the Florida-Caribbean Cruise
Association (FCCA) in June to
address the issue. The CTO
Season shrinks for cruise ports
Attractive Europe
has taken a
big bite out of
Caribbean summer
cruise deployments
trade & commerce
the western Caribbean. While
places such as Cozumel are safe,
froma perception standpoint, its
Mexico, said Thornton.
But our number-one concern
going forward is fuel, he
stressed. This issue will be
exacerbated by the coming
implementation of the emission
control areas (ECAs) along the US
coast as well as in Puerto Rico
and the US Virgin Islands.
The fuel implications of the
ECAs are more onerous in the
easternCaribbean than the west,
he explained. Thornton speculated
that, in the future, lines may opt to
save on fuel by not travelling as far
south as St Thomas.
That scenario is much more
likely if Cuba opens up. Cuba is
very close [to Florida] so it would
be very good froma protability
standpoint, he said, citing fuel.
Cubas opening would probably
change our whole thinking,
particularly given whats going on
in the US Caribbean [referring to
the Puerto Rico-USVI ECA].
Thornton cited two new
Carnival investments that should
help address fuel costs. The rst is
a $65Mcruise terminal on the
northern shore of the Dominican
Republic near Puerto Plata. To be
completed in 2013 and used as a
transit terminal, not a homeport,
the facility will be in a perfect
location to help us on fuel costs,
said Thornton.
The second project in the
pipeline is a dedicated private
island for CCL in the n orthern
Bahamas. Alocation has yet to be
identied but Thornton conrmed
that CCL is nowin the market.
While CCL already calls at Holland
Americas private Bahamas island,
Half MoonCay, its too far south.
An island further north, closer to
Freeport, would be very helpful on
fuel, he explained.
F
C
a
r
i
b
b
e
a
n
For the first
time ina
number of
years, we have
seenthe
western
Caribbean
significantly
underperform
the eastern
Caribbean
Terry Thornton,
Carnival
$65M
Cost of Carnivals newcruise
terminal in Dominican Republic
warned of a continued massive
loss of cruise business,
particularly from the southern/
eastern Caribbean, as a result of
seasonal repositioning.
The Caribbean is a year-round
destination, not a six-month
destination, said Nathan Dundas,
head of the Caribbean Shipping
Association (CSA) cruise
committee. He told Fairplay the
CSA was seeking to play a liaison
role with the CTOon the
worsening seasonality issue.
There may not be much that
island businesses can do to
reverse the trend. It looks like
the strategy [for Royal Caribbean
and others] is working, so I dont
see everybody suddenly
migrating back, said Thornton,
who also chairs the FCCAs
marketing committee.
On a positive note, Thornton
pointed out that newbuildings
are increasing total Caribbean
capacity this year following ve
years of relative stasis. The
caveat is that the sheer size of
some of the newcomers, such as
Royal Caribbeans Allure of the
Seas, limits the number of ports
that benet.
Asked about regional
deployment trends, Thornton
told Fairplay: For the rst time
in a number of years, we have
seen the western Caribbean
signicantly underperform the
eastern Caribbean.
CCL gauges performance with
three measures: ticket price,
onboard revenue and fuel cost.
Even though Western routes
burn less fuel, they are still
falling behind.
We believe US consumers are
bad with geography and the
horric safety and security issues
in Mexico are having an impact on
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Venezuelancurrency controls have
reduced the countrys ports to
mere feeder status, say operators
who feel they are being held to
ransomby the government.
I dont see it getting better. In
fact, I see it getting worse, said
Frank Wellnitz of Caribbean
Feeder Services (CFS).
The silver lining for companies
such as CFS is that international
carriers have shifted en masse to
feeders versus direct Venezuelan
calls to minimise service
disruptions. Apart from a few
services, Venezuela has now
become a feeder country,
conrmed Poul Hestbk,
Hamburg Sd SVP of Central
America and the Caribbean.
Venezuela feedering is a mixed
bag for ports in neighbouring
countries. Its a positive because a
lot of direct services are not going
toVenezuela, so were receiving
additional transhipment, said
Giovanni Benedetti, vice-
president (VP) of Cartagena
terminal operator SPRC.
However, we are negatively
afected because, for services that
do call inVenezuela, you never
knowwhen youll receive those
ships so it puts a lot of pressures
on windows froman operational
standpoint. Its creating a mess,
Benedetti conceded.
The biggest issue for the
Venezuelan shipping market
remains the tight currency
controls introduced by the
government of president Hugo
Chvez. Importers inability to
nd enough dollars to cover
Carriers navigate Venezuela mineeld
The inability to repatriate
funds is also having a major
affect on the multinational
retailers that fuel a large share of
import cargoes.
Two US-listed retailers with
very high Venezuela exposure are
Colgate Palmolive (CP) and Avon.
At the end of 2Q11, CP had
$207M in bolivar-denominated
earnings it had yet to repatriate.
Avon had $146M, with $76M in
repatriation requests languishing
in the government queue.
Major importers like CP andAvon
have also taken huge hits from
Venezuelan currency devaluations.
CP logged a $271Mcharge in 2010
as it switched to hyperinationary
accounting for Venezuela. Avon
wrote down $58.8M.
The situation worsened
further in January 2011, when
Venezuela abolished its 2.60
bolivars/dollar exchange rate for
essential goods.
This suddenly pushed CPs
exchange rate to 4.30, prompting
an additional $36M charge. Avon
noted in its most recent ling
that it was highly sensitive to
trade & commerce
It is very difcult to repatriate
revenuecollectedinVenezuela
Hamburg Sds Poul Hestbk
Ship operators,
struggling to
repatriate what
they earn, still cant
ignore the market
C
a
r
i
b
b
e
a
n
freight continues to limit
volumes. Exchange regulations
have also made it extremely
difcult for businesses that
generate revenue in the country
to get their money out including
carriers. It is very difcult to
repatriate revenue collected in
Venezuela, said Hestbk.
We, as shipping lines, are
being less favoured in
comparison with airlines. The
airlines now have a system
allowing them to repatriate
money 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 or
reduced ability to transfer
collected freight out of the
country, said Hestbk.
Hamburg Sd is not alone.
According to a VP of another major
international carrier who declined
to be identied: TheVenezuelan
government recently made a
commitment [to allowcarriers to
repatriate revenues] but it has now
been months and nothing has
happened, she said. They are not
fullling this obligation.
We are always waiting for the
next crazy act
Venezuelan ports such as La Guaira (pictured) are sufering the efects of
currency starvation
trade & commerce
22 September 2011 27
further devaluations.Smaller
importers are in an even more
dire straits.
Small Venezuelan players are
reportedly ocking to Colombian
border towns, exchanging bolivars
for dollars at a premium, then
wiring dollars fromColombia 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 afecting all importers the
same way depending on where
they source globally.
According to SeaFreight EVP
David Ross: I dont knowif this
is a deliberate political shift,
but some of our
customer base has
told us that its
easier to get foreign exchange
nowif theyre buying goods from
China than if theyre buying
fromthe US.
On top of the currency
conundrum, carrier sources told
Fairplay that operational and cost
issues at Venezuelan ports
remain extremely challenging.
Shipping has grown weary of the
erratic moves of the Chvez
government, worsened by his
current ght with cancer that takes
himto/fromCuba for treatment.
According to the carrier VP
who requested anonymity: We
knowwhats happening nowand
we calculate that into our costs,
but we are always waiting for the
next crazy act. The ports are not
managed professionally, she
lamented, adding that major
changes were announced with
notice of literally one day.
Both this executive and Ross
pointed to an escalating issue
involving nes for empties.
There is a lawin Venezuela, now
really being enforced, that says
every container that enters the
country has 90 days to exit or it is
subject to a ne or conscation,
said Ross.
Catch 22
This creates a Catch-22 because
when you bring boxes in, the
customs process takes a long time
and when you put a ship in to get
your empties out, you may not
have time [because of operational
inefciencies at Venezuelan
ports] so you leave the empties
behind. But if you leave them
behind too long, youll be ned,
Ross said.
Yet despite all these
challenges, most carriers have
not dropped Venezuela. Volumes
are still huge, particularly from
China, because Venezuela must
import virtually everything
except oil. Carriers can also pass
higher costs along to shippers.
Expenses are so high in
Venezuela that virtually any
number you put on the trade is
justied, said one executive.
This executive believes that
carriers have not pulled out of
Venezuela because the outlook
globally for the carrier sector is so
cloudy. You cannot give up such
a big market. And because no-one
pulls out, the Venezuelan govern-
ment has power over us.
F
Economic problems, corruption, rampant crime, food,
water and energy shortages will continue to drive
public discontent with the incumbent president and
give a risk of periodic events of social unrest.
Support from key former allies will continue to
crumble, but President Hugo Chvezs reaction will be
to try to concentrate executive powers even further.
Venezuela has seen a growing role for Cuban
ofcials in the security forces, amid rumours about
a general state of discontent and growing tensions
within the armed forces. Chvezs strategy of trying
to instill an ideological component in the armed
forces is likely to increase tensions, though a military
coup like the one that took place in 2002 seems
unlikely in the short term.
While the government looks vulnerable over
the short term, its medium-term prospects are
boosted by its considerable control over public
spending and its current near-total dominance of
the legislature. There have been doubts about the
sustainability of public spending, but the stabilisation
of oil prices, substantially above budgeted levels,
and the temporary boost to state cofers as the
global economy recovers are expected to enable the
government to maintain high levels of social spending
through its cronyistic anti-poverty programmes as
the 2012 presidential election approaches
insight
IHS Global Insight
Hugo Chvez prays for better
health. Shipping prays for a
newpresident [ Photo: Reuters ]
For in-depth coverage of technological innovations see Solutions: www.fairplay.co.uk
Californian clean fuel regulations
and voluntary slow steaming
may reduce emissions but
increase warming, a new study
has revealed.
Voluntary slowdowns by
shipping companies substantially
reduce air pollution caused by
near-shore ships, according to a
study by the US National Oceanic
andAtmospheric Administration
(NOAA). Despite this, the net
efect was to warmthe atmo-
sphere rather than cool it.
The project was funded by
NOAA and the California Air
Resources Board (CARB) and
conducted in close collaboration
with Maersk Line. Its ndings
were published online last week
by the journal Environmental
Science &Technology.
The study examined a container
ship, Margrethe Maersk, while it
was operating under a 2009
California regulation requiring
ships to switch to low-sulphur
fuels as they approach the
California coast. This rule adheres
to a voluntary state slowdown
policy intended to cut pollution.
The research teamfound that
Emissions down, warming up
Low-sulphur fuel
regulations cut
Californian emissions
while adding to global
warming, study shows
before it switched to lower-
sulphur fuel and slowed down.
A few days later, scientists
aboard the NOAA-sponsored
Woods Hole Oceanographic
Institutes research vessel
Atlantis sampled emissions of the
same ship as it cruised slowly
within the low-sulphur zone and
found that SO levels fell by 91%,
from 49g of emissions per kg of
fuel to 4.3g/kg.
Unexpected
Particulate matter pollution
dropped 90%from3.77g/kg to
0.39g/kg. Unexpectedly, the
paper says, black carbon levels
also dropped by 41%.
The CARB statement quoted
Daniel Lack, a chemist with
NOAAs Earth SystemResearch
Laboratory and the Cooperative
Institute for Research in Environ-
mental Sciences, as saying the
study gives us a sense of what to
expect in the future, for the
people of California, the nation,
and even the globe.
F
For more on this story:
Read the report at
www.tinyurl.com/CARB-shiptest
91%
Margrethe Maersk, whose emissions were tested in the NOAAresearch
[ Photo: Dave Van Spronsen]
emissions of SO and particulate
matter dropped by as much as
90%, a statement by CARB said.
However, the paper also discusses
the net radiative (warming
versus cooling) efect of the ships
fuel switch and notes: When the
measured emission reductions
are placed in a broader context,
warming fromreductions in the
indirect efect of SO would
dominate any radiative changes
due to the emissions changes.
Two measurements were made
in May last year. The rst was
taken by a NOAA research
aircraft that ew over the ship
about 40 miles of the coast of
California. Researchers on the
aircraft used instruments to
sample the ships emissions
Placedina broader context,
warming fromreductions inthe
indirect efect of SO would
dominate any radiative changes
The percentage fall of SO levels
recorded when the ship entered the
low-sulphur zone
S-Class upgrade still to convince
The rst of 10 and possibly 16
Maersk Line S-Class vessels being
enlarged in China is back in
service, as analysts question the
net advantage of the project.
Carsten Maersk, originally built
in 2000, was modied to carry
1,418teu more than before at the
Bei Hai yard in Qingdao, China. It
is scheduled to complete the
operators Capacity Boost
programme by the third quarter of
next year.
S-Class ships were the rst
8,000+ teu boxships and the work
brings their capacity to about
9,600teu, although Carsten
Maersk is still listed on Maersk
Lines website with its former
capacity of 8,160teu. Maersk
Lines vessel management
department has justied the
project, which will add more than
20,000 slots to the eets
capacity, by pointing to lower slot
costs and reduced CO emissions
per container moved. It means
well be able to be more com-
petitive and with a lower
environmental impact, said
Abhijat Chahal, assistant general
manager of vessel management.
The extra space has been
created by raising the height of
the wheelhouse and lashing
bridges, allowing two more tiers
of containers to be stowed on
deck. But this is just one of a
number of projects intended to
boost eet capacity by 52,000teu,
Chahal told the Maritime
Denmark news agency. Its
difcult to rely only on new-
buildings for the opportunity to
gain market share, Chahal said.
Market conditions provided the
opportunity, he explained. Bigger
ships sailing at slower speeds, as
well as the development of port
infrastructure, have made such
structural changes viable.
Yet, analyst Alphaliner is not so
sure about the projects logic. It
pointed out in a report last month
that the extra boxes will be lightly
loaded, or empties, so the ships
efective capacity in teu at 14
tonnes [per teu] will remain
almost unchanged.
In fact, there will be a slight
reduction in deadweight,
Alphaliner notes, because of the
additional steelweight added by
the conversion.
F
technology
Doubts linger over
Maersks logic in capacity
boost programme
Carsten Maersk, left,
and Charlotte Maersk.
The superstructure
has been raised by
inserting an 8.4m
void space under the
bridge deck
[ Photo: Capt Svenning
Jensen/AP Mller-Mrsk ]
Spreader software lifts downtime problems
More than half of a terminals
downtime can be attributed to
issues with spreaders, Swedish
spreader manufacturer Bromma
has claimed.
VikramRaman, Brommas vice-
president and commercial
director, told Fairplay a general
breakdown can typically be
attributed 60%to spreader
problems and 40%to other issues.
A terminals ability to ofer a
reliable service to its shipping-line
customers is key to its success, the
company argues, and it becomes
important to minimise the risk of
spreader-related incidents.
In response, Bromma has
developed a suite of software
applications, known as Green Zone,
that it says will tackle the problem.
It consists of two applications.
The rst, Fleet Doctor, monitors
the operating functions of a
spreader and checks it is operating
within its green zone using the
owof information the spreader
sends to the Fleet Doctor
software.
Brommas literature explains
that performance is based on the
reliability of key spreader
functions, each of which should
operate within an optimum
performance range. When one of
these functions moves fromits
green zonethis is an indication
that service attention is needed.
When this happens, it is said to
move into the yellowzone and
terminal maintenance stafcan
address the issue to prevent further
faults that may cause downtime.
It can take maintenance staf a
long time to nd out what the
exact problemis using traditional
methods of inspection, Bromma
said, but the Fleet Doctor tool
can identify the specic fault.
The spokesman told Fairplay
the most common cause of
spreader faults were loose wires
or wire breakage.
The second application,
Roadmap, uses this information to
identify risk areas in a spreader or
eet of spreaders. It identies the
10most frequent fault areas that
have afected performance to help
a terminals management team
plan maintenance scheduling and
hence improve overall efciency.
The Green Zone software can
only be used in conjunction with
Bromma spreaders and its
existing spreaders can be retro-
tted. The systemhas been on
trial for 18 months on eight
spreaders and is nowbeing ofered
commercially. According to the
company, it will be possible to add
further applications to the Green
Zone suite as further requirements
become apparent.
F
Quick-x software on
spreaders can improve
terminal efciency
Existing Bromma spreaders, such
as this one, can be retro-tted
with the software [ Photo: Bromma]
Shipping needs to keep a close eye on the regulatory environment, which provides guidelines
for safeguarding life, property and the environment. Fairplay looks at the latest developments
Denmark sees actiononcrewing laws
Denmarks owners hope changes
to crewing laws will make the
industry more streamlined
and competitive.
One of the most important
changes, which came into force in
July, is a fund to protect aban-
doned seafarers on Danish ships
anywhere in the world or on
foreign ships in Danish ports. The
fund, which will be fnanced
entirely by Danish shipping
companies, will be managed by
the Danish Maritime Authority
(DMA) in conjunction with the
Seafarers Welfare Board.
Jan Fritz Hansen, vice-
president of the Danish Ship-
owners Association (DSA) told
Fairplay the amount would total
less than 1M($1.3M)/ year. But
the DMA emphasised that the
fund was an interimmeasure.
DMA director-general Andreas
Nordseth said the changes were to
supplement incoming crew
protection laws. Many issues
regarding the protection of
seafarers will be solved when the
Maritime Labour Convention
(MLC) 2006 comes into force. But
the measures we have put in place
will have an efect in the interim,
he said. The scheme will supple-
ment the MLCand cover the costs
of maintaining an abandoned
seafarer and his or her repatria-
tion, he explained.
Other changes include the
ability to hire captains from
outside the EUand a greater
reduction in tax payments by
Danish seafarers who serve on
ships above 500gt engaged on
long international voyages.
Before this amendment,
Hansen said, it was stipulated
that the captain should be an EU
citizen. Its too early to see any
major efects, but with this
change, up to 40%of captains can
be fromoutside the EU.
Flexibility
The DSA has lobbied for a year for
this change. It ofers us further
fexibility to man our ships with
qualifed seafarers fromthe global
labour market and optimise a
captains nationality to the crew,
Hansen said. For example, you
can use an Indian captain when
sailing in the East and then maybe
a Danish captain when the same
ship is used later in the Arctic,
but he emphasised that the new
fexibility would not result in big
changes in Danish ships crews. It
is generally more expensive to
hire seafarers fromEurope, said
Hansen, but this is not the case
with captains where the
diference is not so great.
The lawchange will not afect
the size of the crewemployed in
the Danish shipping industry.
Tax allowances have increased
by 85%for Danish seafarers or
seafarers living in Denmark and
employed on foreign-fagged
vessels crewemployed on ships
under the International Danish
Register do not pay tax. But this
incentive does not apply to crew
working on dredgers or on regular
passenger services between the
ports of EUmember states. Their
annual tax-free allowance will be
raised fromDKK56,900
($10,455) to DKK105,000, but
only after approval by the
European Commission. There is
no indication of howlong this
could take, the DMA added.
F
Federal regulators are considering
lifting restrictions on the use of
freight rate indices in transport
contracts as more carriers and
shippers incorporate themto help
minimise rate volatility in US
liner markets.
Acting on a recommendation
fromits Container Freight Index
and Derivatives Working Group,
the Federal Maritime Commis-
sion (FMC) agreed on 8 Septem-
ber to initiate the process for
making a rule that would give
more leeway for ocean carriers
and shippers to negotiate service
contract rates linked to freight
rate indices, such as the Shanghai
Containerised Freight Index, the
Drewry Freight Insight Index and
the Transpacifc Stabilisation
Agreement (TSA) Index.
Lowry Crook, who chairs the
working group, acknowledged
that while more than 50 service
contracts using container freight
indices for future price adjust-
ments have been fled with the
FMC, this is not a signifcant
number when compared with the
many thousands of contracts
Use of rates indices could
help liner markets, John
Gallagher reports
US examines contract rules
fled without them.
However, its a trend, and we
are likely to see much more of
them, Crook told Fairplay.
FMCregulations currently state
that contract terms referenced in
service contracts must be
contained in a publication widely
available to the public and well-
known within the industry.
But it was only several weeks
ago that the TSA Index was
expanded and made public. And
access to historical rates for other
indices were available only to
those willing to pay signifcant
Danish shipowners hope
legal changes will help
boost competitiveness
Estimated max climate nance
contributions fromdeveloped countries
subscription fees.
The working group is therefore
suggesting a change so that such
indices only have to be readily
available to the parties using
themand the commission. In
theory, this change should
encourage more use of present
and future container freight
indices and would remove
unnecessary constraints and
uncertainty fromindex-linked
service contracts, the FMCsaid.
Promoters of freight indices
claimthey can be a useful way for
shippers to guard against volatile
container markets, particularly
when used in conjunction with
derivatives that hedge against
uctuating rates.
Ideally, indexes can be used as
something on which to base
longer-termcontracts, which
brings stability and predictability
to rates, particularly to those
shippers that have to budget their
transport costs many months
ahead of time, Peter Gatti, vice-
president of US shipper group
National Industrial Transporta-
tion League, told Fairplay.
Walter Kemmsies, chief
economist with transport
consultancy Mofatt &Nichol,
believes indexing in-service
contracts adds transparency to the
market. Right nowits difcult for
a shipper to tell if a rate increase by
the carrier is in line with the
market or not, he said.
If your carrier says its raising
the container rate 10%to bring
shipments over fromTaiwan from
$3,000 a box to $3,300, you
might say thats horrible. But if
the index has gone up 20%, you
realise its not so bad, because if
you go somewhere else youre
going to get a worse deal.
On the other hand, Kemmsies
said: If youre a large carrier and
you manage your costs efectively,
you should be able to move with
the market and growmarket
share. If not, and you try to
impose your inefciency through
higher costs to your customer,
youre going to lose business.
World Shipping Council
president Chris Koch points out,
however, that both carriers and
shippers have so far been reluctant
to use indices. When you sign a
contract, you want certainty. But
when you pin that rate to an index,
neither side knows what its going
to end up paying.
He noted that the bigger
question, aside fromchanges
made at the FMC, is to what
extent references to freight indices
will be used in contracts going
forward. Howit will evolve over
time? I wouldnt guess on that.
F
ICS responds to
emissions tax report
The International Chamber of
Shipping (ICS) has urged caution
in response to a report calling for a
tax on shippings carbon emis-
sions. Its external afairs chief,
Simon Bennett, told Fairplay 24(8
September): This will only
encourage governments that
would like to keep the money for
themselves, rather than using it to
help developing countries improve
the environment.
He was responding to a report
fromcharities Oxfamand the
World Wide Fund for Nature
(WWF), Out of the Bunker time
for a fair deal on shipping
emissions. This calls for a carbon
price of about $25/tonne, which,
it said, would cost shipping about
$25Bn/year equivalent to about
0.2%of the total value of global
shipping, the report said.
Bennett said if money were to
be raised in this way, it must be
routed through an IMO fund,
with the lions share being sent
to environmental projects.
Developing countries would be
more likely to agree than if it
were to come through the
UNFCCC [United Nations
Framework Convention on
Climate Change], he said.
The charities report recom-
mended that the IMOAssembly
this November pass a resolution
conrming the need for a carbon
price for shipping emissions.
F
Carbon taxes may
not reach their target,
shipowners warn
Whenyousigna
contract, you
want certainty
Chris Koch
regulation
Country Approximate share of global
imports by sea %
Maximumclimate nance
contribution credit per year
Australia 1.50 $375M
Canada 1.90 $475M
EU 28.50 $7.1Bn
Poland 0.72 $180M
Belgium 1.60 $400M
France 2.60 $650M
Germany 4.60 $1.10Bn
Ireland 0.50 $125M
Italy 2.90 $725M
Netherland 2.30 $575M
UK 3.90 $975M
Spain 3.00 $750M
Japan 6.40 $1.6Bn
NewZealand 0.30 $75M
Norway 0.40 $100M
US 15.90 $3.9Bn
[ Source: Oxfam and WWF ]
Jumping on the Koper wagon
It all looked so rosy when Fairplay
sat down with Marcelino de
Lannoy in May 2010 as he
prepared to take the helmof
Curaao Ports Authority (CPA) in
a carefully orchestrated handover
fromlong-time co-directors
Richard Lopez-Ramirez and
Agustin Diaz.
The mood was upbeat, with de
Lannoy, Diaz and Lopez-Ramirez
posing for celebratory pictures to
mark the bright future ahead for
the CPA.
Curaao was on the cusp of
independence, via the historic
dissolution of the Netherlands
Antilles on 10October 2010.
When de Lannoy spoke to
Fairplay prior to the handover, he
appeared to have no idea that the
10-10-10 transition would
herald a management maelstrom
at the CPA.
But it did. Following the
election of Prime Minister Gerrit
Schotte, the CPA advisory board
was restructured. In March 2011,
de Lannoy was fred. He is now
suing the CPA for reneging on his
contract. Lawsuits have also been
fled over disputed compensation
to Lopez-Ramirez and Diaz.
Yet more legal action is focused
on CPA tug subsidiary KTK
Panama. Prior to the new
government, de Lannoy had
emphasised to Fairplay the
importance of international tug
revenues to the port authoritys
bottomline. A key component of
that strategy, KTKPanama, is now
in the process of being dissolved.
The KTKPanama situation has
hurt the name of the CPA
internationally, one Curaao
source told Fairplay, adding that
in general nobody really knows
whats going to happen [at CPA]
and honestly I dont think they
know. They broke down the old
structure, but nowwhat?
Carriers doing business in
Curaao have not reported
operational fallout fromthe legal
and political soap opera but
questions are being raised about
the CPAs future vision.
Troubled times in Curaao
The Netherlands
Antilles dissolution
and Curaaos
new government have
reshaped port authority
Slovenian logistics group
Intereuropa has decided to muscle
its way into moves to promote
Adriatic ports as the more cost-
efective routes fromthe Far East,
via the Suez Canal, than northern
European outlets. The moves are
being orchestrated by the North
Adriatic Ports Association on
behalf of its fve members in Italy,
Croatia and Slovenia.
In an Intereuropa report for
the frst half of 2011, the
company stated it planned to
open one or two new direct lines
fromAsia for our container
consolidation services and,
thereby, additionally strengthen
our position in the market.
Fromits base in Slovenias
rapidly expanding sole port,
Koper, Intereuropa has seized the
realisation that companies in
central Europe can save time and
money by re-routeing their supply
chains through the ports in the
northAdriatic.
Full container loads (FCLs)
and less-than container loads
(LCLs) have been expanding
rapidly in recent years and there is
a trend towards the optimisation
of supply chains, Bojan
Beskovnik, Intereuropas product
manager for intercontinental
transport, told Fairplay.
This could mean that tiny
Slovenia will begin to punch well
above its weight, he said.
Throughput at the port of
Koper is increasing 30%annually,
so Intereuropa sees the potential
in establishing newFCL and LCL
lines, organising inland distribu-
tion and ofering hub warehousing
in Slovenia, Beskovnik noted.
These will then serve as a
platformfromwhich distribution
would continue to other parts of
central and southeast Europe, he
added. We believe this approach
The business of shipping nowencompasses movements of cargo by rail, road and inland
waterway; maritime leaders are thinking beyond quay-to-quay. Visit www.fairplay.co.uk for more
C
a
r
i
b
b
e
a
n
Slovenian logistics group
urges companies to
re-route supply chains
from northern Europe
to the Adriatic
Fairplay asked CPA commercial
afairs manager Dimitri Cloose
whether he sawan impact on the
port authoritys business. Not
yet, he responded, but conceded,
everything is murky at the
moment and the waters have to
be cleared.
Cloose asserted that the demise
of KTKPanama does not imply
that CPA will pull back fromits
international tug strategy. Asked
about reports that CPA may hive
ofthe KTKtug operations
altogether, Cloose said he was not
aware of such plans and pointed
to the complications related to
CPA debt obligations linked to
KTKtug assets.
Cloose did emphasise one
initiative that is moving forward:
the second cruise mega-pier,
which will be built alongside the
frst in Otrobana. He said CPA
hoped to confrm construction
plans next year.
2019
The date PDVSA has a lease on
the important Isla refnery
logistics & supply chain
will further attract newgoods and
newclients to the northAdriatic,
he said.
As well as Koper, Intereuropa
has a presence in a number of
other ports in south-central
Europe, namely Rijeka, Split and
Ploce in Croatia, Bar in Montene-
gro, and Durres inAlbania. The
aim, eventually, is to include
these fully in its expansion plans.
Beskovnik said: We see the
opportunity of further growth in
the feld of shipping because we
have sea freight ofces in every
port on the eastern coast of the
Adriatic sea. The FCL and LCL
services will just be the frst
logistics leg in ofering a full range
service to the market.
But it is at home in Koper
where Intereuropa will be
channelling most of its eforts
unsurprising, because the port
We believe this
approach will
attract new
clients to the
North Adriatic
authority, Luka Koper, owns a
25%stake in the logistics group.
In addition, the port is ambitious,
recently announcing that by 2020
it will be recording total annual
throughput of nearly 28Mtonnes.
Local observers share the brash
confdence displayed by Luka
Koper and its logistics partner,
believing their combined energy
could enrich their land as a whole.
Professor ElenTwrdy, dean of
the Faculty of Maritime Studies
and Transportation at the
University of Ljubljana, told
Fairplay: With the shipping of
cargo fromthe Far East to the
northAdriatic being some three
days faster than to other parts of
Europe and the ports congestion
also being signifcantly lower,
Intereuropas newservices should
be very good news for Luka Koper
and for Slovenia too.
F
28M
anticipated annual throughput in
tonnes at Luka Koper by 2020
There are also longer-term
plans being considered for a new
container terminal in Bullen Bay.
With the Panama Canal
expanding and ships getting
bigger, the container port in
Willemstad will be too small,
said Cloose. Well have to look at
a whole newterminal.
The complication with the
Bullen Bay scheme involves the
stevedoring contract withCuraao
Ports Services (CPS). The original
language providedCPS with
monopoly service rights, not just
for Willemstad, but for any future
container facility. That contract is
nowin the process of being
renegotiated, Cloose confrmed.
Meanwhile, CPA revenues
remain signifcantly reliant on
servicing tankers calling at the
Isla refnery, leased byVenezuelas
PDVSA until 2019. The refnery is
back up and running after an
extended shutdown but sporadic
mechanical failures persist.
The Curaao governments
ultimate decision on the lease
could have major future implica-
tions for the CPA. With so many
questions swirling around, Cloose
acknowledged that a newvision is
required. Were in a whole new
phase with a whole newgovern-
ment. This takes time and it
brings uncertainties. Thats the
reality. We have to get our
priorities straight and really look
at what we need to do.
F
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moment andthe waters
have tobe cleared
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Spanish broker and agent Berg
made the countrys national
newspapers recently with an
update on the infrastructure it
has been developing over the past
decade to handle Asian car
imports. The hard news was the
decision to build three service
depots equipped to take up to
9,000 cars each in the east-coast
port of Sagunto, for an outlay of
140M($193M).
Taken in isolation, the story
was barely newsworthy. Berg has
been steadily and successfully
developing such facilities in
diferent Spanish ports and cities
for more than a decade: Vigo and
Santander in the north; Barcelona
and Tarragona in the northeast;
Valencia in the east; and in Madrid
and Seville as inland distribution
and service centres. The shippers
Berg 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 the
location: Sagunto. This ancient
Mediterranean port, whose
occupation by Hannibal started
the second, decisive, Punic War
between Rome and Carthage,
made the headlines in the early
1980s, the last time Spain had a
grave sovereign debt problem.
The minister of industry of the
day, by convincing the steel
workers of Sagunto and else-
where that it was pointless to
subsidise steelmaking at twice
the price of the imported
equivalent, helped to balance the
Spain opens the door to Europe
Planned European
distribution point for
Chinese cars needs ft-
for-purpose rail links.
Roderick Lee reports
Jakarta urges logistics developments
State companies have
vowed to work together
to facilitate growth
More than 12 Indonesian state
companies signed a memorandum
of understanding on 15 Septem-
ber to formIndonesian Logistics
Community Services (ILCS), a
body to oversee the Southeast
Asian countrys development of
its logistics infrastructure.
At the signing, state enterprises
minister Sumaryanto Widayatin
reiterated the countrys need to
step-up development of its
logistics services, which lag
behind those of other countries in
the region. He warned that if
Indonesias logistics sector did not
address the problem, it will fail to
get in line with Jakartas Master
Plan for the Acceleration and
Expansion of Indonesian
Economic Growth (MP3EI).
We need to cut logistics costs,
Sumaryanto said, pointing out that
they represent about 30%of
Indonesias production costs and
24%of GDP. In countries such as
Vietnam, Thailand and Malaysia,
they have been reduced to 10%.
According to the World Banks
2010 Logistics Performance
Index, Indonesia ranked 75th out
national accounts, a key
requirement for gaining access to
the then Common Market
todays EU.
Interestingly, the stories run
by the general-interest newspa-
pers based on the Berg press
release did not specify the
Japanese or South Korean
of 155 countries, well behind
fellowAssociation of Southeast
Asian Nations members Singa-
pore, Malaysia, Thailand, the
Philippines and Vietnam, which
ranked 2nd, 29th, 35th, 44th and
53rd respectively. According to
the World Bank, this is mainly
due to high port charges in
Indonesia, and poor port infra-
structure and services.
One of ILCSs tasks will be to
ensure state port operator Pelindo
II and state telecoms company
Telekomunikasi Indonesia work
total car capacity at
projected Sagunto
depots
27
,
000
Sagunto: made headlines in 1980s
debt crisis and again today
[ Photo: Shutterstock ]
vehicles Berg has acted for in
the course of the past 10-15
years. The termused was Asiatic,
which in recent times has
become newspeak for Chinese.
The foregoing, which explains
why Berg found itself in the
news, does not detract fromthe
fact that a large percentage of
Chinese cars and light vehicles
will probably enter Europe
through Spain, thanks in the main
to Bergs foresight. But Sagunto
may have a negative efect on the
Ford plant inValencia, the Seat
plant in Martorell in Catalonia
and the Citron plant inVigo.
Berg y Compaa is one of
Spains most respected broker-
ages. Managed centrally fromits
base in Madrid with ofces in all
the countrys major ports, it
consistently declines to get
involved in the cosy arrange-
ments with port authorities,
transport ministry bureaucrats
and state-sponsored quangos that
plague the system. The frmwas
founded by a French family in
Bilbao in 1870 at the outset of
the remunerative iron-ore trade
between Spain and Britain.
Bilbao in those days was also,
with Barcelona and Santander,
one of the key banking centres in
Spain, and Bergs sound
relations with the banking
families of the north has helped
keep it free of local servitudes.
The bold decision of the
Spanish government in the 1980s
to dismantle the national steel
industry produced positive
medium-termresults. For
example, some of the Sagunto
steelmakers were re-employed in
the Ford plant set up outside
nearby Valencia, assembling parts
forged in the US or Germany. A
similar pattern occurred in
Martorell, near Barcelona, where
a newcomplex was developed by
Italian carmaker Fiat with the
help of Catalan investors. US giant
General Motors set up a plant in
Zaragoza in north central Spain
and French company Citron
followed suit inVigo in the
northwest. The children of the
steelworkers took degrees in
logistics, swapping hammers and
tongs for laptops.
Berg has stayed abreast of all
these changes. Its constant roll-
out of efcient vehicle storage
and distribution parks puts Spain
in a good position to beneft from
the infux of Chinese and Indian
light vehicles that will gradually
replace the European feets. What
is required is for the Spanish
government to take the necessary
steps in terms of rail freight
transport to exploit this potential
source of income to the full in an
environment-friendly manner.
F
together to create an integrated
electronic systemfor the logistics
sector. Other companies will work
towards upgrading the overall
transport logistics infrastructure,
which will connect centres of
growth, as well as remote and
underdeveloped areas.
Enhancing national con-
nectivity, in hard infrastructure or
soft infrastructure, is a must,
Pelindo II chief Richard Lino said.
Lino hopes ILCS will improve
monitoring of the shipment of
and the transfer of documents
and payments of sector workers
while reducing bureaucracy. What
Indonesia needs, he stressed, is
an integrated and efcient
logistics system, to reduce costs
and time and secure supply
chains. He revealed that Pelindo II
is investing in newcranes that
will help halve the present six-day
container loading times.
Pelindo II is also planning to
build a $114Mport in Sorong,
West Papua, and is participating
in a tender to build a $2Bn port in
North Jakarta.
F
Seven months after the launch of
its commercial operations, the
situation at DP World-run
International Container Trans-
shipment Terminal (ICTT) in
Cochin (Kochi) Port, southern
India, continues to be chaotic
because of Indias restrictive
cabotage laws, which prevent
foreign vessels fromoperating as
coastal container ships. The
terminal is struggling to clear the
ofoaded boxes despite any major
increase in container volumes.
Under the existing cabotage
laws, foreign vessels are free to
handle export-import cargo, but
cannot move containers fromone
domestic port to another. They can
do so only after seeking a no-
objection certifcate fromIndias
directorate general of shipping
(DGShipping), a process that
involves seeking consent from
domestic shipowners.
Indias shipping ministry is
sympathetically considering
relaxing the rules to help the
terminal, but the Indian National
Shipowners Association (INSA) is
opposing the move tooth and nail.
S Hajara, president of INSAand
chairman of state-run Shipping
Corp of India (SCI), told Fairplay
the organisation would oppose any
such move by the government.
We are making a fresh represen-
tation. There is an adequate
number of Indian ships to handle
coastal containers, he said.
Cochin Port Trust (CoPT) and
DP World had approached the
government to relax the rules at
least for a short span of time so
coastal containers could be
evacuated by foreign lines. A
senior CoPT ofcial told Fairplay
it had approached the government
for some relaxation, as the
terminal was facing a crisis. The
Indian feet has only 13 vessels,
with a combined capacity of
12,165teu, are deployed for
coastal operations. This is grossly
inadequate to handle import
containers. We require foreign
vessels to do feedering.
For Indian vessels, there is a
40%concession in port charges,
which is an encouragement to
increase the Indian feet.
Cochin seeks relief
for cabotage headache
Interests clash as Indian
rules mean port cant
clear containers
Rail changes for SouthAfricanore
SouthAfricas Transnet logistics
group is to change its manganese
and iron ore supply chains.
Siyabonga Gama, head of
Transnets rail freight unit, said
on 15 September that the
company would no longer
transport manganese by rail to
Saldanha, northwest of Cape
Town, but will dedicate the line
solely to iron ore exports. In
addition, it is looking at upgrading
its manganese line to Port
The shipping ministry has
begun consultations with all
interested parties. KMohandas,
shipping secretary, told Fairplay a
proposal to relax cabotage rules
was before the government, but a
fnal decision has yet to be taken.
We believe cabotage rules should
be tightened in the interests of
Indian shipping. But as far as
coastal movement for import/
export containers is concerned, an
exemption will help Indian
terminals, he said.
Asenior DPWorld ofcial in
Cochin said the terminal capacity
was being grossly underused.
ICTTs frst phase was built with an
annual 1Mteu capacity. This delay
nowhas caused huge revenue loss
toCoPT as well, since the terminal
operates on a revenue sharing
model. The port gets 33%of
money earned by ICTT under the
concession agreement. Last year,
the port handled 312,000teu. The
terminal can take it to 775,000teu
with adequate feeder services,
facilitated by relaxing cabotage
rules, said the ofcial.
ICTT in Cochin was designed to
take over containers sent
through other major tranship-
ment hubs such as Colombo,
Singapore, Jebel Ali and Salalah.
About 45% of Indias total
container throughput is handled
through these big terminals.
Although ICTT aimed to handle
775,000teu this year, it handled
only 136,000teu in 1H11.
F
Elizabeth in EasternCape province
and intends to vacate the terminal
there in favour of the Ngqura
deepwater port inCoega, about
20kmnortheast of Port Elizabeth.
A study on the rail line shift
and expansion is expected to be
completed by February 2012.
Gama said Transnet wanted to
logistic & supply chain
Transnet is to expand and
modify its manganese
and iron ore network
We require
foreignvessels
todofeedering
increase capacity on its manganese
supply chain to between 18Mand
22Mtonnes by 2018. It plans to
expand its iron ore line to
eventually carry 90Mtonnes,
froma current 47Mtonnes.
He said the company expected
to invest R62Bn ($8.3Bn) in the
next fve years to upgrade and
expand its network, and that it
was considering involving the
private sector in future plans.
F
Cochin: terminal capacity grossly underused [ Photo: Joseph Anto ]
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38 22 September 2011 www.fairplay.co.uk www.fairplay.co.uk
Customer care
Caribbean-style
SeaFreights heir apparent tells Greg Miller
howlean management pays of
decision-makers
DAVIDROSS
Whatever the
issue is... one thing
we will not do, no
matter howbad
the news, is lie
I
n an era when sprawling
corporations gobble up
entrepreneurial rms with
a robotic eye on quarterly
results, David Ross exemplies
what the big sh can learn
from the minnows
particularly when it comes to
customer service.
Most shipping executives learn
the ropes at a small regional rm,
then graduate to working for a
global carrier. Ross, now executive
vice-president (EVP) of SeaFreight,
did the opposite.
The Trinidadians true shipping
education came during a ve-year
stint at then powerhouse
Nedlloyd in the late 1980s. But he found
his calling at SeaFreight in 1995, joining at
a time when the Florida-based Caribbean
line was little more than a start-up.
As powerful as Nedlloyd was, the
regional VP had a boss, and that boss had
a boss, and that boss had a boss. Decision-
making was not that easy, Ross recalled.
In contrast, SeaFreights small size allows
customer issues to be immediately run up
the ag pole from the front lines to Ross.
SeaFreight was so tiny when Ross
joined as VP of marketing that titles
were almost irrelevant, he told Fairplay.
Mornings would start at 7am and some
nights went to 2am to make sure the bills
of lading were done. It was about getting
the freight to the ship on time, getting the
C
a
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i
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b
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a
n
22 September 2011 39 www.fairplay.co.uk www.fairplay.co.uk
decision-makers
DAVIDROSS
ship out, then waking up next morning to
start bookings for the next ship.
SeaFreight has come a long way since
then as has Ross, who was promoted to
EVP in 2007. He is now at the helm of
SeaFreights Miami ofce and is the heir
apparent of CEO and founder Roland
Malins-Smith. I trust David implicitly,
Malins-Smith told Fairplay. He is committed
to quality of service as few in the industry
are. Malins-Smith, for his part, emphasised
his future successors strong connection
with the team and the cohesiveness and
motivation of the team.
SeaFreight, which celebrates its 20th
anniversary in January, has a relationship-
intensive focus on employees and clients.
This personalised philosophy is crucial in
any market, but particularly so in the
Caribbeans face-to-face business culture.
In the wake of the recent nancial crisis,
two distinct global strategies towards
employment emerged: the American
model (slash staf immediately to bolster
the bottom line) and the German model
(protect staf and prepare for the upturn).
SeaFreight has behaved distinctly German.
Our competitors laid-of people. We
never laid-of anyone, said Ross. Sea-
Freight has virtually no turnover and its
employees boast years-long relationships
with Caribbean clients. If we had laid-of
ve or six people, that would have involved
multiple [shipper] relationships. Clients
would have had to re-establish relation-
ships with someone they werent familiar
with, who doesnt know their business.
Our customers have probably spoken to
the same person for 10 years. If a ship
breaks down, they know it will set them
back but at least they believe what our
people are telling them.
At the end of every issue, theres a
customer, he continued. Whatever the
issue is, the most important thing is to
always present the customer with an
answer to the problem. Ships break down.
Trucks break down. Thats the reality of
our business. One thing we will not do, no
matter how bad the news, is lie.
But if you go to customers with news
like that, youve got to give them the
solution. You cant just say the ship broke
down. You say: Heres how were going to
move your cargo.
Such bad news calls are best delivered
by an employee who has a lengthy
relationship with the afected client. That
is not the only argument against layofs
during a recession, but its a good one.
The future plan for SeaFreight is steady
growth with a focus on controlling its
product through ancillary holdings. Over
the past two decades, the company has
complemented its growing chartered-in
eet with US trucking services, container
equipment yards, box maintenance and
repair facilities and an NVO arm.
As Fairplay went to press, SeaFreight was
poised to take possession of its own
dedicated 10ha terminal in Port Everglades.
Its our own space, with a direct lease with
the port authority, not a third-party
arrangement, said Ross.
The new lease follows the same
philosophy as SeaFreights other non-
vessel holdings. Its all about controlling
the nal product to the customer, which
means controlling as many of the support
services as we can.
Thinking back on his three decades in
shipping, Ross expressed astonishment at
the starring role played by chance. After
attending Trinity College in Trinidad, he
planned to become a lawyer, applying at
the University of the West Indies in
Barbados. But the enrolment allotment was
full that year, so he went back to Trinidad.
As it happened, the father of his
girlfriend owned agency Melville Shipping.
While having drinks by the pool one night,
he ofered Ross a job as boarding clerk,
handling documentation for VLCCs at
Point Galeota. I hated climbing up the
ship at 3am. So I went back to my girl-
friends dad and said I really appreciate
this, but is there something else I can do?
Taking pity, the agency owner appointed
Ross as account executive for Nedlloyd. He
thrived in that role so much so that he
was poached by the carrier. He took a post
at Nedlloyds Florida ofce in 1985.
After Nedlloyd came ve years at Kirk
Line. When Kirk was bought by Seaboard,
Ross moved to SeaFreight.
That chance ofer by his girlfriends father
was amazing, he said. It could have
been any business. But I grew to
love shipping and I never went
to law school. Once I was
hooked, that was it.
F
In the spotlight
David 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, account
executive for Nedlloyd
Education: Trinity College,
Trinidad, graduated 1980
Family: Married to wife Dianne. Three
children: Gary, Melanie, Matthew
Hobbies: Cycling, shing
Sir,
Your article entitled ECDIS: misunderstood,
confused but soon to be mandatory
(Fairplay, 8 September 2011) is misleading
in its suggestion that IMO has not gone
about the whole process in the right way
and that the transition to ECDIS is neither
transparent nor fully understood.
IMO had been aware of the software
update issue problems and highlighted
these to member governments and the
industry in 2007, by means of a Safety of
Navigation Circular (SN.1/Circ.266).
In July 2010 the NAV Sub-Committee
reviewed and amended the text of the
circular, to highlight that the application
software within the ECDIS should work
fully in accordance with the performance
standards and be capable of displaying all
the relevant digital information contained
within the electronic navigational chart
(ENC). Accordingly, the Maritime Safety
Committee (MSC 88 November/
December 2010) approved revised
guidance on the maintenance of ECDIS
software and encouraged its use by the
relevant authorities. Member govern-
ments were invited to bring the revised
guidance to the attention of all concerned
to ensure that mariners always have the
latest safety-related information available
to them.
Also, last November, a number of member
governments and industry organisations
had brought to the attention of MSC 88
anomalies in the operation of some ECDIS
Clarity over
ECDIS displays
[ Photo: Matt Ramsdale ]
systems relating to display and alarm
behaviour, in particular system con-
gurations. The anomalies were discovered
by the inspection of ENCs within a small
number of ECDIS systems and the com-
mittee considered it possible that other
anomalies remained to be discovered.
Given the widespread use and the
impending implementation of the ECDIS
carriage requirement, the committee
considered it important that any
anomalies identied by mariners should be
reported to, and investigated by, the
appropriate authorities. In order to better
understand the extent of the issue, the
committee issued MSC.1/Circ.1391
inviting administrations to collect,
investigate and disseminate information
about ECDIS anomalies. In addition,
MSC.1/Circ.1389, providing further
guidance on procedures for updating
shipborne navigation and communication
equipment, was also issued in this context.
The administrations or designated bodies
were, inter alia, invited to encourage vessels
under their ag to report such anomalies to
allow analysis; share information with other
IMO member governments and interna-
tional organisations on request; and issue
alerts to mariners where such anomalies
might afect safety of navigation. In
February 2011, the IHO, in co-operation
with IMO, convened a meeting to study the
matter in more detail and provided its input
to MSC 89 in May of this year. One result of
that meeting was the progress towards the
development of a simple user validation
test to highlight to mariners whether their
equipment conformed to the latest
standards and also highlight some of the
known deciencies afecting certain
manufacturers ECDIS.
In addition, the MSC in May this year
Letters
tasked the COMSAR, NAV and STW sub-
committees to consider the issue and
provide their comments to enable MSC 90
(May 2012) to provide the necessary
additional guidance.
As to the training aspect, it should be
noted that, under the provisions of chapter
II of the STCW and code, all ofcers are
required to be competent in the use of
ECDIS to maintain the safety of navigation.
Accordingly, training institutes would
provide generic competence in the use and
limitations of ECDIS. Furthermore, ship-
owners are required to ensure that
seafarers, on being assigned to any of their
ships, are familiarised with their specic
duties and with all ship arrangements that
are relevant to their duties. The
organisation has updated the existing IMO
model course related to ECDIS, which
would be validated at the next meeting of
the STW sub-committee.
As to the mandatory carriage require-
ments for ECDIS, IMO, in co-operation with
all interested member governments and
industry organisations, discussed all relevant
issues including the availability of ENCs
worldwide before agreeing on a planned,
well dened phased-in implementation
schedule between 1 July 2012 and 1 July
2018, based on diferent categories of ships.
In conclusion, the IMO has always been
very proactive in the ECDIS development
process and, throughout, has actively
sought the co-operation of, and input
from, all member governments and
industry organisations.
GS Singhota
Secretary to the IMO Sub-committee on
Safety of Navigation
Deputy director/head, Operational
Safety Section
We are grateful to Mr Singhota for adding further detail to the information in
the 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 that
there is considerable misunderstanding about the transition to ECDIS, despite
the proactive approach taken by the IMO.
This is best illustrated by the UK Hydrographic Ofce which, in the guidance
cited in our article, acknowledges that ag states have inconsistent
interpretations of the rules they have agreed at the IMO.
Fairplay acknowledges the IMOs eforts towards resolving the remaining
issues around ECDIS implementation but cannot ignore the real concerns
expressed 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), while
it is true that, to date, large ports have been able to
become more efcient than smaller ones, it is important
that this does not become a reason for ports with less
capacity to drop out of the green debate. Ports are the hub
of shipping in more ways than one, and a key component
of the global supply chain for all industries. So regardless of
which formof emissions regulation is introduced in the
future, ports of all sizes have a role to play in monitoring
and managing all port and ocean-going activities related
to GHG [greenhouse gas] emissions.
From a commercial perspective then, although it may
be the larger ports that have the budget and CSR
[corporate social responsibility] remit to invest more
heavily in greener process, we cannot simply write of the
potential contribution of the smaller ports. To remain
competitive and efective, smaller ports need access to
information and new processes in order to avoid a
knowledge gap that could prove very costly in the future.
Although the quest for greener operations is now a
necessity, it doesnt have to be a chore seeking expert
evaluation and assessment of a ports CO
2
footprint to
create a comprehensive inventory is an invaluable
exercise, both environmentally and commercially.
Not only will this enable the ports to better
understand their CO
2
emissions and provide diferentia-
tion between port authority operations, cargo handling
and industrial activities, it will also illuminate areas for
leaner operations and cost efciencies in the longer term.
This will also go towards equipping shipping with the
true overall maritime GHG emissions data which is
critical when further regulation comes into force.
Developing a carbon emissions strategy using this
insight is the next step; decarbonising the port logistics
chain using measures for terminal operations and cargo
handling. It is estimated that the contribution of terminal
Ports green responsibilities
We welcome the comments fromMs Athoussaki on issues facing the greening
of UKports, raised in Fairplay 2 September. Efective knowledge sharing
between large and small ports is an idea not explored in the article and we
would like to hear fromreaders on howbest this could be achieved.
With regards to the idea of ofering incentives to environment-friendly
ships, while this initiative is being followed by some European ports, UKport
managers are unclear about their legal position.
While researching the article, concerns were raised about UKcompetition
law, among other things. Ed
operations and cargo handling to port air pollution
ranges between 18% and 30% of the total. To address
this, a range of mechanisms including renewable energy
options are increasingly being explored.
On a macro level, ports can play a central role in the
creation and implementation of market-based measures
(MBMs). By encouraging GHG emissions reductions from
shipping and ofering incentives to ships participating in
emissions reduction programmes, the role of all ports,
large and small, is critical to the future of greener shipping.
Helena Athoussaki
CEO, Carbon Positive
Decision-makers fromthe worlds of energy, mining, manufacturing,
industry, commerce and agriculture all afect 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 GMis 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 CSAs 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
eforts to implement best practices throughout the
Caribbean Basin and co-ordination with other
bodies such as Caricom and the Association of
Caribbean States.
Tata Motor CEOForster resigns
Tata Motor CEO Carl-Peter Forster is reported to have resigned with immediate
efect because of unavoidable personal circumstances, but will continue to be a
non-executive director, reported Reuters. Forster joined in February 2010 after
heading General Motors in Europe and turned around Jaguar Land Rover (JLR), with
the luxury unit contributing nearly 80% of Tatas prot in FY2010/11. However, sales
of the Nano have been disappointing, according to IHS Global Insight. His responsibilities
included all the companys global operations including JLR, Tata Motors and
Daewoo. Forster also has 13 years experience in BMW.
&
movers shakers
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Van der Jagt returns to logistics [ Photo: AndrewSpurrier ]
Nicolette van der Jagt will step
down fromher position as secretary-
general of the European Shippers
Council (ESC) at the end of the year to
become director-general of the
European Association for Forwarding,
Transport, Logistic and Customs
Services (CLECAT). She will succeed
Marco Sorgetti, who will become DG
of the International Federation of
Freight Forwarders Associations. Van
der Jagt, who has acted as European
Shipping Council (ESC) secretary
general since 2002, is returning to her
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
Associations Brussels ofce. At the
ESC, she was a feisty champion of
shippers causes, notably playing a
major role in the councils battle to
put an end to the liner shipping
sectors exemption fromEuropean
Union competition rules. CLECAT
president Clive Broadley
welcomed her appointment.
IR Class names chair and
adds MDrole
Arun Sharma has been named MD of
IR Class (Indian Register of Shipping)
and chairman-designate. The former
executive president of India Steamship
will succeed JC Anand as chairman in a
fewmonths. Sharma will take over as
executive president at a later date.
&
movers shakers
Mki takes over at Port of Helsinki
The Port of Helsinki has conrmed that Kimmo Mki
will take over from Heikki Nissinen as chief executive on
1 October. Mkis business skills and ability to meet
future challenges were the characteristics we felt were
most important, said chairman, Mikko Kortelainen. Mki
was most recently head of container operations at Steveco,
Finlands leading stevedore company. He has a masters
degree in engineering and in 2000 majored in logistics and
transport management. He worked as logistics head
at Hobby Hall and UPM-Kymmene Seaways until
joining Steveco in 2006. Nissinen steps down
after 14 years in the top job. He goes on
extended leave at the end of September until his
ofcial retirement on 1 April 2012.
Wrist Ship Supply,
the Danish services
company, has
appointed Shilpa
Jayant Varade as
key account
manager dedicated
to the rms Asian
clients. To be based
at the rms
Singapore ofce,
she has 10 years
experience in the
Indian and Singa-
pore marine and
ofshore shipping
markets. Vice-
president of global
sales Sren Jrgensen said
outsourcing procurement is
increasing in the shipping industry
and an increased demand for ship
supply in Asia taps in to the
companys desire for greater market
share in the region. The company said
this move complements its current
expansion strategy six acquisitions
since 2009 most recently in May of
UK food distributor Strachans.
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Unexpected contract
extensions at K+N
Global ocean freight forwarder Kuehne +
Nagel has extended the contracts of
three top executives in a surprise
announcement. CEO Reinhard Lange
will now remain in ofce until the end of
2013, while CFOGerard van Kesterens
tenure is extended until mid-2014. Both
managers, aged 62, were expected to be
replaced at the end of 2012. Lange
started his career with K+N in 1971 and
served as CEO since 2009; van Kesteren
has been CFO since 1999. K+N also
extended until 2014 the contract of
board member Dirk Reich, responsible
for contract logistics.
Asset valuation group elects chair
Hamburg ship appraiser Bernd Holst (pictured) has been elected
chairman of newly established Long Term Asset Value (LTAV)
association in Hamburg. He is joined by deputy chairman Claus
Brandt (PricewaterhouseCoopers, partner), and treasurer
Alexander Geisler (Hamburg Shipbrokers Association, MD). The
association will promote LTAV a discounted cash ow model
for the valuation of ships instead of more volatile market values
commonly used by shipbrokers. The association, which will
nance the sourcing of nancial market data needed for the LTAV
formula, comprises nine shipbroking rms, shipowners such as Carsten Rehder and
accountants such as PwC. Holst, as MD of ship valuation and survey rm Ingenieurbro
Weselmann in 2009, was involved in the development of the LTAV formula.
Eagle loses trading boss
NASDAQ-listed Eagle Bulk conrmed to
Fairplay that the respected head of its
freight trading operation, Keith
Denholm, has quit. But Eagle Bulk CFO
Alan Ginsberg said: His departure has
no impact on our commitment to
building the trading business. Denholm,
formerly of Pacic Carriers and
Malaysian Bulk Carriers, was hired with
considerable fanfare in September 2010
by Eagle Bulk, which has noted the
importance of its Singapore trading
operations, previously headed by
Denholm. CEO Sophocles Zoullas
emphasised that Denholms trading
operation had huge indirect benets in
dealing with the Korea Line bankruptcy.
Bergeronsteps upat LISCR
Scott Bergeron
has been promoted
to CEO of the
Liberian Inter-
national Ship and
Corporate Registry
(LISCR), which
runs Liberias
register. He joined
the company in
2000 as chief
operating ofcer.
Bergeron, who has seagoing experience,
held positions at Laurin Maritime, Det
Norske Veritas and the US Coast Guard
prior to joining LISCR.
Wrist Ship Supply
answering Asia demand
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shipping in numbers
There is so little fairplay in the world. If our own eforts succeed, we shall have taken the frst steps towards
promoting 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 retrieval
system 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 views
or 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 its
aff 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 contained
in 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 any
error, 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.
W2
Record low rate obtained by
VLCC Samco Amazon for spot
business on the benchmark
Gulf-Japan route, equivalent
to daily earnings of $1,000
36
Vessels waiting to load at
Brazils six sugar ports a
week ago. In August 2010 a
record 135 ships were
waiting to load
100
,
000
Number of reefer containers ordered in 1H11 equal to the
2010 total. A record of 150,000 boxes is expected for this year
1
,
700teu
Sector of the container market still strong over $10,000/day
paid last week for immediate spot positions
166
Private security companies
operating in Somali region
201
Days lost for six vessels
released by Somali pirates
in August
3.7%
Fall in number of ships
under the Greek fag
between July 2010-11 but
tonnage stable at 43M gt
Combined
net growth
in oil produc-
tion by the US
and Canada
between 2008
and 2010
more than
Irans total
output
3
.
8
M
b
p
d
$35.5Bn
Revenue forecast for Australias agricultural export sector in
2011-12, a 6% hike from 2010-11, driven by wheat, wool, rice,
canola, raw cotton and sheep meat
Draught of
Deurganck-
dock lock
at Antwerp,
which will
be the
worlds
largest
lock when
completed
in 2016
at a cost
of about
340M
($464M)
1
7
.
8
m
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We just made
shipping boring.
e shipping industry faces serious
challenges on reliabili. It cant meet
your deadlines. Statistically, youll
be disappointed just about every
other time.
ere can be lots of good reasons
for this; we would be the last to
suggest shipping is uncomplicated.
But we nd it hard to justify that it
should be our customers problem.
Your problem.
Everything taken into account,
shipping is just one of many links in
your supply chain. And fromthat
standpoint, it is also the source of a
disproportionate amount of fuss.
At Maersk Line weve decided
to do something about it. We have
developed a product for our routes
between Asia and North Europe
that ensures absolute reliabili.
And thats not just an ambition.
Its a promise.
At the same time were tackling
the inexibilithats connected
with weekly departures.
Weve increased our cut-off
frequencyso considerablythat our
customers can technically ship
every single day and therefore
begin to see shipping as a direct
extension of the production line.
is is why we call it Daily Maersk.
Its predictable. Its boring. And
its right on time.
Youre welcome to read more on
DailyMaersk.com
Introducing absolute reliabili.

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