Maritime Safety News Archives - Page 24 of 259 - SHIP IP LTD

The Misdemeanors and Violations Court in Dubai reportedly imprisoned an Asian ship captain and four other individuals who owned a vessel and shipping firms. This was due to them mistakenly contributing to the burning of properties of others and incurring a massive loss of about Dhs24 million, as containers with several materials were burnt and part of Jebel Ali Port was impaired, besides the damage of unloading and loading machines at the port.

The court sentenced them to jail for one month with a three-year suspension.

During the same session, the court further convicted four shipping firms, one of whom owned the vessel, fined Dhs100, 000 to each firm, and referred the case to a more competent civil court.

The details of the incident date back to 2021 (July), when a massive fire broke out in one of the ships in Jebel Ali based in Dubai.

The civil defence teams immediately rushed to the scene and were able to put out the fire in approximately 40 minutes without death but with minor injuries to the Asian sailors.

The Dubai Government Media Office had declared at that time that the fire caused the burning of a part of the vessel besides causing extensive material damage to the port’s berth. The site of the accident was referred to competent authorities for conducting inspections.

Per the case file and the forensic lab report at Dubai Police, the fire resulted from sheer negligence and incompetence in adhering to the safety protocols, as the cargo shipper did not check the validity and quality of used containers and the validity of transporting dangerous material. They also kept the containers of dangerous materials under the sun for 21 days in Jebel Ali Port at a temperature of about 44°C.

The report suggested that containers were loaded with about 640 barrels of harmful materials, and the vessel owners and cargo shippers failed to coordinate with one another regarding the appropriate time for the container delivery.

Per the report, the ship’s captain, operators, and owners did not register the dangerous materials or separate the containers. They also kept them adjacent to each other; this resulted in the first container exploding.

References: Gulf Today, Khaleej Times

Since the 24 February escalation of the war in Ukraine, the export of foodstuffs and fertilizers from Ukraine has been negatively impacted, something which in turn has threatened supplies to several developing countries desperately reliant on import of food stocks from Ukraine.

However, on 22 Jul 2022, Türkiye, Russia, and Ukraine together with the United Nations signed the Initiative on the safe export of foodstuffs and fertilizers, including ammonia, from Ukrainian ports. The purpose of this Initiative is to facilitate the safe navigation for the export of foodstuffs and fertilizers, including ammonia from the Ports of Odesa, Chernomorsk (Chornomorsk) and Yuzhny (Pivdennyi) (the Ukrainian ports).

International coordination

The operational execution of the initiative will be coordinated by a Joint Coordination Centre (JCC) in Istanbul where representatives of Türkiye, Russia, Ukraine and the United Nations will oversee and coordinate the operation. The warring parties have agreed not to attack any of the merchant ships taking part in this initiative.

A set of procedures for merchant vessels taking part in the initiative have been developed, a copy of which can be found via the link below. The procedures must be followed by all ships taking part in the initiative.

A high-risk operation

The initiation of exports from Ukraine-controlled ports is a welcome development but there is no question that the resumption of shipping operations is a high-risk endeavour. While both Russia and Ukraine have publicly promised not to attack ships involved in the initiative, there have been several sightings of mine-like objects in the area, and the risk of a rogue mine detonating against a ship is still present. Add to this that the perceived mine threat provides for plausible deniability for any malign actor with a motive to disrupt global food supplies, especially by means of underwater weapons such as limpet mines or torpedoes. The resultant security situation amounts to something which by any measure will be a high-risk operation.

Ship protection measures

Ships getting involved in this initiative are encouraged to perform a voyage-specific risk assessment and consider the relevant self-protection measures described in chapter 4 incl. annexes in the NATO publication Naval Cooperation and Guidance for Shipping (NCAGS) – Guide to Owners, Operators, Masters and Officers.

It should be noted that the NATO procedures for passage coordination etc. described in this NATO publication DO NOT apply to this scenario. Instead, the procedures outlined in the specific guidance developed by Türkiye, Russia, and Ukraine together with the United Nations should be applied. However, the section in the NATO publication about how to mitigate against underwater threats (mines, submarines, underwater sabotage) would seem particularly relevant to the scenario ships are faced with when participating in the described initiative.

Source: https://www.bimco.org/insights-and-information/ukraine/20220809-ukraine-grain-security

There’s an old Greek shipping saying that goes: “Ninety-eight tankers and 101 cargoes, boom. Ninety-eight cargoes and 101 tankers, bust.” This doesn’t translate so well into modern-day container shipping because the consolidated liner sector manages the number of ships in service a lot better than the fragmented tanker business.

Tanker spot rates can plunge violently lower when supply exceeds demand. One of the big questions for container shipping has been: Will spot rates plunge precipitously after demand pulls back, as it has in the past in bulk commodity shipping? Or will there be a gradual decline toward a soft landing?

So far, it looks gradual. Trans-Pacific rates have steadied in July and early August. In fact, some indexes show spot rates ticking higher again.

Spot rates are at least temporarily plateauing because U.S. import demand remains above pre-COVID levels, some U.S. ports remain extremely congested, and ocean carriers are “blanking” or “voiding” (i.e., canceling) sailings, both because their ships are stuck in port queues and because they’re matching vessel supply with cargo demand to avert the fate of Greek tanker owners.

“Void sailings are still the go-to options for carriers at this point to try and stymie the fall in rates,” said George Griffiths, managing editor of global container freight at S&P Global Commodities.

“Congestion is still the buzzword for East Coast ports, with Savannah currently feeling the full force of loaded imports and associated delays,” he told American Shipper.

FBX trans-Pac rates up 3% from recent lows
Different spot indexes give different rate assessments but generally show the same trends. The Freightos Baltic Daily Index (FBX) Asia-West Coast assessment was at $6,692 per forty-foot equivalent unit on Friday.

The good news for shippers booking spot cargo: That’s just one-third of the all-time peak this index reached in September. The bad news: Friday’s assessment is up 2.7% from the low of $6,519 per FEU hit on Aug. 2, and it’s still 4.5 times higher than the rate at this time of year in 2019, pre-COVID.

The FBX Asia-East Coast spot rate assessment was at $9,978 per FEU on Friday, less than half the record high in September. However, it was up 3.5% from the recent low of $9,640 on Aug. 2 and still 3.6 times higher than 2019 levels.

Drewry indexes show gradual slide
The weekly index from Drewry portrays a gentler descent than the FBX, because Drewry did not include premium charges in its spot assessments at the peak.
Unlike the FBX, Drewry’s Shanghai-Los Angeles assessment does not show a recent uptick. It was at $6,985 per FEU for the week announced last Thursday, its lowest point since June 2021. It was down 44% from its all-time high in late November 2021, albeit still 4.2 times higher than rates at this time of year in 2019.

Drewry’s weekly Shanghai-New York assessment was at $9,774 per FEU on Friday. Rates were relatively stable over the past two week, yet the latest reading is the lowest since June 2021 and down 40% from the peak in mid-September.

Drewry’s Shanghai-New York assessment on this route is still 3.5 times pre-COVID levels.

S&P Global: East Coast rates 50% higher than West Coast
Daily assessments from S&P Global Commodities (formerly Platts) show a widening divergence between North Asia-West Coast and North Asia-East Coast Freight All Kinds (FAK) rates.

S&P Global assessed Friday’s North Asia-East Coast FAK rate at $9,750 per FEU, up 2.6% from the recent low hit on July 29. Spot rates on this route have roughly plateaued since late April, according to this index.

S&P Global put Friday’s North Asia-West Coast rate at $6,500 per FEU, still gradually falling and at the lowest point since late June 2021. The gap with East Coast assessments has been widening since May, with the East Coast rates now 50% higher than West Coast rates.

Port congestion still very high
Matthew Cox, CEO of ocean carrier Matson (NYSE: MATX) explained on his company’s quarterly call earlier this month: “In fall of last year, we saw over 100 vessels waiting at anchor or offshore waiting to get into the ports of Los Angeles and Long Beach. We still have 100 ships waiting. But a lot of that congestion has moved into different ports. We [have] the same number of ships but just more distributed to different places.”

The number of ships waiting off all North American ports topped 150 in late July, according to an American Shipper survey of ship-position data from MarineTraffic and queue lists for Los Angeles/Long Beach and Oakland, California.

The count fluctuates by the day (and by the hour as ships enter and leave queues) and is now down 15% from its peak — but still historically high. As of Monday morning, there were 130 ships waiting offshore. East and Gulf Coast ports accounted for 71% of the total, with the West Coast share falling to just 29%.

The queue off Savannah, Georgia, was the largest at 39 ships on Monday morning. It was considerably higher just a few days earlier. According to Hapag-Lloyd, there were 48 container vessels off Savannah on Friday, with wait times of 14-18 days.

The queue off Los Angeles/Long Beach has now virtually vanished. On Monday morning, it was down to just 11 container vessels, according to the queue list from the Marine Exchange of Southern California. It hasn’t been that low since November 2020. It hit a high of 109 ships on Jan. 9.

Spot rate easing expected to continue
On last Wednesday’s quarterly call by ocean carrier Maersk, CFO Patrick Jany said port congestion preempted a steeper drop in spot rates. Even with support from congestion, he predicted short-term rates will decline further in the months ahead.

“We have seen an erosion of short-term rates in the past few months that has been stopped here and there by renewed or new disruptions,” Jany said. “The erosion of the short-term rates will continue. It won’t be a one-day drop but a progressive erosion toward a lower level of short-term rates in the fourth quarter.”

Jany predicted that when rates stop falling, they “will stabilize at a higher level than they were in the past [pre-COVID] and higher than our cost level.”

During the latest quarterly call by logistics provider Kuehne + Nagel, CEO Detlef Trefzger predicted rates would ultimately settle at levels two to three times pre-COVID rates. A Seko Logistics executive made the same prediction during a recent briefing.

According to Cox at Matson, spot rates “are adjusting slowly. There’s no falling off a cliff. The word we use is ‘orderly.’ We’re seeing rates decline from their peak, but … we expect an orderly marketplace for the remainder of the year, with our vessels continuing to operate at or near capacity.”
Source: Freight Waves by Greg Miller, https://www.freightwaves.com/news/no-precipitous-plunge-in-container-shipping-rates-just-orderly-decline

LNG is the best fuel option for owners considering how to extend vessel life and secure CII compliance through retrofit, according to SEA-LNG, the multi-sector industry coalition established to demonstrate the benefits of the LNG fuel pathway for shipping decarbonisation. In a piece of analysis released today, the coalition finds significant benefits to a business choosing an LNG retrofit over fuelling with VLSFO or retrofitting an HFO vessel with scrubbers, based on a ten-year payback period.

Increasingly stringent environmental regulations will drive down the CII grades for existing ships and will have a detrimental effect on charter rates for those powered using fuel oil. The financial viability of vessels that are just a few years old will be under severe threat if significant action to reduce emissions is not taken, such as an alternative fuel retrofit.

SEA-LNG’s latest analysis looks at the investment performance of three 2-stroke propulsion options. These were evaluated to compare the most cost-effective solutions available for ship owners: a current VLCC sailing on VLSFO; a retrofitted VLCC sailing with scrubbers on HFO; a retrofitted VLCC sailing on LNG. The simple tool allows users a “Readers’ Choice” to compare fuel prices which generate the same investment returns for each possible investment decision.

“The climate emergency we face is a stock problem, and a flow problem. By choosing to retrofit their existing vessels, owners will be able to reduce GHG emissions now and over the remaining lifetime of the vessel, keeping GHGs from entering the atmosphere,” said Adi Aggarwal, General Manager at SEA-LNG. “Retrofitting vessels provides a faster and cheaper route to the lower emission fuels that are essential to reduce shipping emissions. As alternative fuels and regulations progress, it’s important that we re-evaluate previous investments. LNG retrofits now have a strong business case.”

The chart displays the IMO CII grade ratings for VLCC retrofit alternatives: HFO scrubber, VLSFO and LNG fuel.

Retrofitting vessels to use LNG fuel helps to future proof vessels, reducing costs and improving returns. For owners, modernising a ship through retrofit can be carried out more quickly than building a new vessel. New vessels typically take around two years to build. Accessing and scheduling work with a retrofit yard is often easier, as they have more capacity than newbuild yards. Retrofitting can also be arranged as part of a scheduled drydock call for a VLCC, meaning out of service time is reduced across the entire project.

Adopting LNG fuel on a VLCC improves CII ratings substantially, giving and maintaining a one to two grade improvement over alternatives throughout the remaining lifetime of the vessel. The gap in ratings between LNG and HFO scrubber or VLSFO retrofit options provides a commercial chartering financial advantage to owners who choose the LNG pathway.

LNG is a safe, mature, commercially viable marine fuel offering superior emissions performance, significant Greenhouse Gas (GHG) reduction benefits and a pragmatic pathway to a zero-emissions shipping industry. With drop in bio-LNG or synthetic LNG, the LNG-fuelled vessels are future proofed, enabling compliance with GHG reduction targets as the shipping industry moves towards its 2050 emissions goal.
Source: SEA-LNG