The decision by Ukraine late in August to exempt its seafarers from mandatory service in the armed forces, and to be allowed to leave the country to work on ships internationally, would free up manpower for both Ukrainian grain exports and the wider global shipping industry, reported Reuters, citing major industry figures.
The move was a concession by Ukraine that its merchant shipping workforce, one of the largest worldwide, would be able to serve the nation better in both economic and military terms by working on ships.
Ukrainian seafarers make up 4% of the total global mariner workforce of 1.89m sailors.
It was first announced in late August by Prime Minister Denys Shmyhal, and was decreed into law by his cabinet last Friday September 2nd, according to a copy of the order published on Monday evening.
Ukraine is looking to maximize its grain shipments via the Black Sea Grain Corridor agreed in late July and scheduled to run until at least late November/ early December. Viktor Vyshnov, deputy head of Ukraine’s Shipping Administration, told Reuters that “we understand that the grain corridor depends on them (seafarers) and the world of international logistics also depends on them”.
Shortly after the grain export deal was agreed it was noted that it would be difficult to find the seafarers to crew the estimated 80 vessels stuck in Ukrainian ports since the end of February. Most of the crews on board had long been evacuated, leaving the port-locked vessels with a minimum tick-over crew.
Able-bodied Ukrainian men aged 18-60 are barred from leaving the country, but Ukraine’s government has now waived the ban for qualified seafarers and those studying for a mariner qualification.
“According to the decree, all seafarers, whether they are leaving from Ukrainian ports or are going abroad to fulfil their contracts, can obtain the possibility to leave Ukraine,” Vyshnov said.
Shmyhal had said in August that the decision would be good for the Ukrainian economy, as it would “allow thousands of sailors to get jobs and (state) budget receipts to grow.”
Natalie Shaw, director of employment affairs at the International Chamber of Shipping, said that “the (ICS/BIMCO) report predicts that there will be a need for an additional 89,510 officers by 2026 to operate the world merchant fleet, and Ukraine supplies over 76,000 of the current workforce.”
The staffing situation on ships arriving in Ukraine was complicated by a lack of clarity on the status of Russian merchant sailors. The grain corridor deal made no comment on the status of Russian mariners aboard ships that entered Ukrainian ports.
Ukraine border agency spokesperson Andriy Demchenko told Reuters that, while he did not know of any cases of Russian seafarers receiving visas to enter Ukrainian territory during the invasion, this did not theoretically stop them from sailing into Ukrainian ports if they remained aboard their ship. “If these people are refused entry … then they must remain aboard the ship until it leaves the port.”
The International Transport Federation’s Stephen Cotton said that “common sense says Russian-owned ships and Russian-crewed ships should be very careful about visiting Ukraine. At the moment I would not recommend it.”
Russia’s President Vladimir Putin said on Wednesday September 7th at an economic forum in Vladivostok that Russia and the developing world had been “cheated” by the UN-brokered Ukrainian grain export deal. He said that he would look to revise its terms to limit the countries that can receive shipments. This could mean that any continuation after the end of the original 120-day term would be at risk, or could mean that a revision would be sought even earlier than this. However, Putin said that Russia would carry on with the deal in the hope that its aims would still be achieved, indicating that the corridor was safe, for now.
“What we see is a brazen deception … a deception by the international community of our partners in Africa, and other countries that are in dire need of food. It’s just a scam,” Putin said.
Putin warned of a global food crisis if the situation was not addressed and said he would contact Turkey’s President Tayyip Erdogan to discuss amending the deal to restrict which countries can receive shipments.
“It is obvious that with this approach, the scale of food problems in the world will only increase … which can lead to an unprecedented humanitarian catastrophe,” he said.
“Almost all the grain exported from Ukraine is sent not to the poorest developing countries, but to European Union countries,” claimed Putin.
According to UN data, Turkey, which is not part of the EU, has been the most frequent single destination for shipments from Ukraine, with cargoes also going to China, India, Egypt, Yemen, Somalia and Djibouti.
Putin also said some restrictions on Russia’s fertilizer exports had been eased, but “clever sanctions” were still complicating Russian trade.
“There are no direct sanctions against products, but there are restrictions related to logistics, freight, payments and insurance. Many of these elements of restrictions remain,” Putin said.
Ukraine responded by saying that Russian complaints about the deal were “flabbergasting” as the deal gave Russia no role in determining where the grain goes.
Ukrainian presidential adviser Mykhailo Podolyak said on Wednesday that “the agreements signed in Istanbul … concern only one issue, and that is the transfer of cargo ships through the Black Sea. Russia can’t dictate where Ukraine should send its grain, and Ukraine doesn’t dictate the same to Russia”.
The foundation phase of a project to bring stakeholders together from the global north and global south to tackle maritime emissions is moving towards its final stages, following a series of technical workshops across the Caribbean, Africa and the Pacific. IMO Coordinated Actions to Reduce Emissions from Shipping (IMO CARES) will support coordination to accelerate demonstration of green technologies and their deployment globally in a manner that facilitates blue economic growth in developing regions.
The preparatory phase of IMO CARES is funded by the Kingdom of Saudi Arabia and undertakes all the preparatory activities to develop and design a sustainable global CARES programme, which is expected to be a long-term initiative.
As part of the foundation phase, workshops were organized between June and August in collaboration with Maritime Technology Cooperation Centers for Caribbean, Africa and Pacific, part of a global network of MTCCs. Gathering feedback from stakeholders in the respective regions was a major step towards the establishment of a multi-stakeholder coalition with a view to the launch of the full IMO CARES Programme in 2023.
Building on from the success of the workshops, meetings were undertaken with R&D Centres, International financial institutions, UN agencies and others to identify their needs and how stakeholders might collaborate under an IMO CARES framework. “Future advancements in maritime technical cooperation depend upon continued close collaboration between member states, the IMO, maritime organisations as well as financial institutions,” said Mr. Essam Al Ammari, Permanent Representative to the International Maritime Organization for Saudi Arabia.
The only way to prevent disasters related to offshore drilling is to permanently protect our coasts and workers from new offshore leasing, she said in an emailed statement. while Barak Obama was the president. The agency proposes to amend seven of the many amendments and additions introduced in 2019, director Kevin M.
The U.S. Department of Home Affairs said on Monday it wanted to reverse some of the retracted maritime safety rules by the Trump administration to prevent outbreaks, such as the BP disaster that killed 11 people and contaminated the Gulf of Mexico in 2010.
“The proposed regulation will help ensure that offshore energy development uses the latest science and technology to keep people safe,” said Home Secretary Deb Haaland in a press release. “As our nation moves to a clean energy economy, we must commit to strengthening and modernizing marine energy standards and supervision.” The changes are a step in the right direction, but not far enough, said Diane Hoskins of the ocean conservation nonprofit. “No operator can promise that there will not be another disaster such as the BP Deepwater Horizon explosion. The only way to prevent disasters associated with offshore drilling is to permanently protect our coasts and workers from new offshore leasing, “she said in an emailed statement.
Under Trump, the Office of Safety and Environmental Enforcement acted in 2019 to change rules introduced three years earlier, when Barak Obama was president.
The agency proposes to change seven of the many amendments and additions introduced in 2019, director Kevin M. Sligh Sr. he said in a telephone press conference from Haaland.
This, he said, would require an accreditation bureau of independent agencies that inspect oil rigs and offshore equipment. Another would require blowout protection – equipment that failed in 2010 – so that they would always be able to cope with the maximum gas flow parameters of the wellbore.
Others would require operators to transmit accident data to the federal maritime safety agency rather than to designated third parties, and would reduce the time to start accident analysis and investigations by one month, allowing three months instead of four. Erik Milito, president of the National Ocean Industries Association, representing oil and gas companies, said: “The 2019 amendments to the well control rule have resolved technical issues and clarified ambiguities,” changing 68 of the 342 provisions of the original rule. “Any further updates… should follow a similar, tailored approach.” Environmental groups sued in 2019, claiming the changes will make oil and gas exploration and development off the Pacific, Atlantic, Alaska and Gulf coasts “much more dangerous.” “We are still examining the proposed rule to determine the best way to deal with the claim,” said Chris Eaton, a senior lawyer at Earthjustice who filed the lawsuit.
Saudi Maritime Congress, the largest global shipping & logistics event in the Kingdom of Saudi Arabia, will reinforce industry leaders’ commitment to achieving climate neutrality and discuss its impact on global supply chains, with the aim of creating a sustainable and safe environment in the maritime sector.
Scheduled to take place in Dammam in Saudi Arabia on September 28-29, 2022, industry leaders will come together to discuss the key challenges and opportunities.
As the leading maritime and logistics event in Saudi Arabia, the conference will witness a number of discussion sessions that will bring together decision-makers from private companies and government bodies from around the world. The aim is to focus on accelerating the transition to clean energy and adopting best practices to reduce carbon emissions, the Congress said in a statement.
Accordingly, the conference will highlight the adoption of effective policies and constructive strategies that will promote the transition to clean fuels such as hydrogen as an alternative to carbon intensive non-renewable energy sources. These discussions come at a time when the global community is looking to achieve climate neutrality in the marine sector and solve problems related to greenhouse gases.
Eng. Abdulaziz Sabri, President of Bahri Ship Management said: “As one of the world’s largest VLCC owners and operators, Bahri’s participation in the Saudi Maritime Congress, which will bring together the global maritime community, is an ideal opportunity to explore and identify the key drivers of carbon neutralisation for the sector and ensure that we are on the right track. We are also keen to participate in the discussions about the energy alternatives that would be available in shipping, and to learn about the latest developments regarding the use of innovative technologies.”
The maritime sector is a major tributary of Saudi Arabia’s economy and an essential element in supporting the Kingdom’s Vision 2030. Moreover, the country’s significant fleet is instrumental for the industry, it said.
Chris Morley, Group Director of Maritime Events at Informa Markets, said: “The Saudi Maritime Congress provides a comprehensive and integrated platform to amplify the effectiveness of thought leadership debate. Contributors, stakeholders, and participants at the event all play a vital role in the creation and provision of innovative solutions to everything from future fuels to the adoption of technology throughout the maritime industry. It’s important to the whole team at Seatrade Maritime that we support our communities and customers and provide a catalytic experience that contributes to the objectives of the maritime industry.”
He added: “The Kingdom is among the twenty largest economies in the world and has the largest purchasing consumer base in the region. Therefore, the vital role that the maritime sector plays in the Kingdom’s plan for economic diversification cannot be downplayed. We believe this event plays an important role in supporting sector growth and stimulating action toward the goals of Vision 2030.”
Saudi Arabia has increased the tonnage of its marine fleet, which includes 368 tankers and ships, reaching 13.5 million tonnes.
The global maritime safety system market is expected to grow from $17.66 billion in 2021 to $18.40 billion in 2022 at a compound annual growth rate (CAGR) of 4.19%. The marine safety system market is expected to grow to $24.62 billion in 2026 at a compound annual growth rate (CAGR) of 7.56%.
The maritime safety system market consists of the sales of maritime safety system solutions and related services by entities (organizations, sole traders, and partnerships) that refers to planned solution and services implemented by shipping companies to ensure ship and marine environment safety. MSS aims to alert the system about the position and safety-related concerns about the ships in the vicinity, search and rescue coordination, and protection from terrorism, piracy, robbery, illegal trafficking activities, and others.
The main types of systems include ship security reporting system, automatic identification system (AIS), global maritime distress safety system (GMDSS), long range tracking and identification (LRIT) system, vessel monitoring and management system, other systems (automated manifest system (AMS), and automated mutual assistance vessel rescue system (AMVER).Security reporting system refers to electric systems used to prevent or abate potential risks in ships by taking less hazardous processes programs to reduce injuries and property loss.
The maritime safety system are used for loss prevention and detection, security management, counter piracy, coastal monitoring, safety of ship, pollution prevention and response (PPR) management. They used by government institutions, oil & gas, marine & construction, shipping & transportation, cargos & containers, other end-users.
Asia-Pacific was the largest region in the maritime safety system market in 2021 and is also expected to be the fastest-growing region in the forecast period. The regions covered in the maritime safety sytem market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The maritime safety system market research report is one of a series of new reports that provides maritime safety system market statistics, including maritime safety system industry global market size, regional shares, competitors with a maritime safety system market share, detailed maritime safety system market segments, market trends and opportunities, and any further data you may need to thrive in the maritime safety system industry. This maritime safety system market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.
The growing maritime trade and transportation are expected to propel the maritime safety system market.The increased well-being of consumers leads to increased production.
The lower emissions on long voyages, maritime trade, and transportation assist producers in remaining competitive.The volume of products moved on a single trip is greater, making sea transport more cost-effective and environmentally friendly than other methods of shipping goods over long distances.
For instance, In April 2019, a report published by the Organisation for Economic Co-operation and Development projected a significant increase in a variety of ocean economic activities by 2030. According to estimates, the worldwide value generated by ocean-based industries could double from $1.5 trillion in 2010 to $ 3 trillion in 2030. Therefore, the rising maritime trade and transportation will drive the maritime safety system.
Technology developments such as AI, IoT are a key trend gaining popularity in the maritime safety system market.For a long time, the key technology of marine safety and systems has remained unchanged.
However, the rising number of accidents, terrorism, and other components is now subject to many changes created within maritime safety and security by involving AI, IoT, Big Data, digital route management, innovative defense technology, integrated control systems, and others. For instance, In December 2020, Iridium Communications, satellite communications company, has introduced its GMDSS service that is embedded with a strong network of 66 cross-linked Low Earth Orbit (LEO) satellites which provide low latency, high-quality, and real-time voice and data connections across the entire system, including seas and polar regions.
In April 2021, Leonardo, an Italian aerospace, defense, and security company, acquired a 30% stake in GEM Electronica for an undisclosed amount.Through this acquisition, Leonardo will strengthen its market position in the naval sector, particularly in the sector of short and mid sensors for navigation, maritime, coastal, and airport surveillance.
It will broaden and diversify Leonardo’s product offering and improve engineering, manufacturing, and marketing. GEM Electronica is an Italian company producing small and medium-sized 3D radars, electro-optical sensors, and inertial systems for the maritime, air, and land sectors.
The countries covered in the maritime safety system market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.
This September, government experts on the health of plants and crops will gather in London for the first ever International Conference on Plant Health. This high-level meeting organized by the secretariat of the UN’s International Plant Protection Convention (IPPC) and hosted by the UK government will review the state of the world’s natural and agricultural plant resources, and what can be done to protect and enhance them.
Given the combined pressures of climate change, water shortages, destructive pests and disease the conference could make for a sobering experience.
In the two days preceding the conference, and in the same London venue, a smaller, and even more specialized group consisting of international trade bodies, shipping industry representatives and national plant protection and bio-security agencies will meet to review one of the many ways that invasive and destructive pests can pass from one country to another – by ‘hitch-hiking’ a ride in, or on, any of the 240 million freight container shipments that are made by sea every year.
The International Workshop on Reducing the Introduction of Pests Through the Sea Container Pathway (19-20th September) will be a wake-up call to all parties involved in international container shipping and logistics.
Pest impacts
The threat to a nation’s food supply or its agricultural industries may not be obvious just because a few insects find their way into a forty-foot steel container. But history is littered with examples of how highly destructive pests have entered a country’s ecosystem through imported goods or packaging, and wreaked devastation on native plant species.
The Great Potato Blight, that caused famine and mass migration from Ireland in the 1840s, is thought to have been caused by the import of the pest responsible from Central America to Europe aboard the sailing ships of the day. In the 20th century, large numbers of trees in the US and Europe were lost to disease and pests thought to have been unknowingly imported as international trade spread.
Contamination is not just confined to ‘dirty’ cargoes. Last year, Australian authorities reported the detection of live pests in a consignment of baby clothes and equipment intercepted at the border. The UK government has related how a colony of invasive wasps found their way to the country having nested in the radiator grill of a brand new (and very expensive) motor car, being delivered to a showroom.
Inspections of containers arriving at borders carried out by national biosecurity agencies over the past few years suggest that the number of containers and cargoes infested by pests may be greater than feared.
National environment and agricultural ministries have been working through the IPPC to tackle this issue for several years and the London workshop has been convened to consider options for regulating the cleanliness of sea containers and setting standards for preventing their contamination by invasive pests.
Shippers will be familiar with ISPM-15, the IPPC’s existing standards for the pre-treatment and marking of timber used to block and brace cargoes in containers or used to make pallets and other packaging for transport. Could a similar International Standard for Phytosanitary Measure for the cleanliness of intermodal containers be in prospect?
Unilateral action
Several countries have already taken unilateral action to protect their native plant species against specific pests. Last year the Australian government introduced new requirements for the pre-treatment of containers imported from listed countries and carrying specific cargoes to protect against the introduction of the Khapra Beetle, a small insect that could devastate the country’s cereal grain crop were it to become established.
These rules supplemented existing measures to protect against introduction of the Brown Marmorated Stink Bug, a creature with effects as unpleasant as its name suggests! Failure to comply with these requirements will almost certainly result in a container being denied entry at the Australian border and possibly re-exported, ultimately at the shipper’s expense.
New Zealand has similar measures and there are controls too to protect against different pests that threaten other countries. Canada and the US are concerned about threats to their forests and their wheat crops; Fire Ants are a big threat to native species in Japan.
This is a live issue (in some senses literally!) and under active review by governments around the world. The possibility of new international mandatory measures on container cleanliness should command the attention of shippers everywhere.
Global developments
The Global Shippers Forum (GSF) has been monitoring and influencing these developments since 2018 when it was invited to join an IPPC Task Force set up to examine the threat to plant health posed by pest-contaminated containers and cargoes. That Task Force reported at the end of 2021 and set out a range of regulatory options for its parent body, the Commission for Phytosanitary Measures (CPM) to consider.
Crucially, it also warned that implementation of new mandatory requirements could impose significant new costs and risks to the fluidity of the international movement of containers and further disrupt world trade. GSF was clear in its opposition to new rules applying indiscriminately to every container shipment, urging that controls and resources be targeted instead on high-risk trade corridors and specific pest threats.
The work of developing any new measures will be taken forward by a CPM Focus Group, which will have the authority to make recommendations to its parent body, the Commission for Phytosanitary Measures (CPM). This month’s workshop in London will develop key ideas for the Focus Group to pursue. GSF is speaking at the event and will be ensuring shippers’ interests are represented and the scope and limits of responsibilities clearly defined.
GSF will also be represented on an industry advisory body that will be advising the new CPM Focus Group on the practicality and effectiveness of any new regulatory measures it may propose. GSF will also be making the case for a significant increase in the publicity given to this threat within the industry.
Pest contamination is an unintended consequence of international trade and awareness of its risks and consequences is relatively low. Much could be gained in a short time by raising awareness of the issue in the industry and the relatively simple ways of preventing it.
Not that there is any shortage of advice and guidance on how to pack containers safely and to keep them clear of invasive pests. The Code of Practice for Packing Cargo Transport Units (the CTU Code), a publication of three UN trade and transport organizations is the authoritative guide to container packing that all shippers and packers should be aware of, and familiar with.
The IPPC has also acknowledged the work done by the Cargo Integrity Group, a partnership of seven global trade and shipping organizations, including GSF, to develop a ‘Quick Guide’ to the provisions of the CTU Code. This included a ‘Container Packing Checklist’ of 34 questions about the manner of packing and securing of goods that should be answered affirmatively by the packer prior to dispatch of the container to a shipping line.
Simple nudges
Shippers should not wait to be confronted with new regulations before responding to this issue. Whether you are a buyer or a seller of goods, the standards of care with which they are packed into the containers that will transport them should be a core part of your quality checks and specifications to suppliers or contractors.
Is the risk of accidental contamination by pests understood? Are the recommended precautions taken during the packing and storage of the container? Have staff been trained in what to look out for and what to do if they find evidence of infestation or contamination? Simple nudges could make a big difference.
Hitch-hiking in cargoes is not the only way invasive pests can move between countries. The containers themselves and the conditions under which they are stored in ports and by shipping lines are also crucial to preventing their contamination.
The efforts of shippers to avoid contamination during packing will be wasted if the empty container supplied to them is already infested, or dispatched containers are stored under the wrong conditions awaiting shipment. Container cleanliness is an industry-wide issue and responsibility.
Fewer than one percent of alien species that enter a country are thought to become invasive but where this has happened the effects on economies, landscapes and peoples’ lives has been traumatic and permanent.
Containers can become contaminated at any point in their journeys by sea but keeping bugs out of the boxes as they are packed is a responsibility that shippers and packers are likely to become more accountable for in the future.
U.S. Congressman Alan Lowenthal (CA-47) and Edie Chang, Deputy Executive Officer of Planning, Freight & Toxics Division at the California Air Resources Board spoke at a Community Town Hall moderated by Joe Lyou, president and CEO of the Coalition for Clean Air. The event was hosted by Pacific Environment and Long Beach Alliance for Children with Asthma August 31 evening.
Rep. Lowenthal represents the Port of Long Beach – one of the nation’s busiest cargo ports, and an area that is facing extreme pollution from fossil fuel ships. At the Town Hall, community members shared heartbreaking stories about how ship pollution has affected their family and communities in profound and irreversible ways.
The policymakers demanded an end to ocean shipping pollution in ports and at sea.
Congressman Lowenthal said, “Since my earliest days of public service on the Long Beach City Council three decades ago, I have worked to clean up the maritime industry. This session of Congress, I introduced a bill to clean up the massive emissions generated from the maritime shipping industry.
“We must all work together towards zeroing out pollution from all ocean shipping companies that do business with the U.S. for our children, our community, and our environment.”
CARB Deputy Executive Officer Edie Chang said “We are vigorously attacking every source of harmful pollution from the transportation of freight that impacts the health of port-adjacent communities. This includes requiring ships in California waters to use clean-burning fuel, and plugging those ships into the grid – and turning off their engines – while they’re loading and unloading.
“We recently updated our standards for harbor craft from ferries to tugboats so they use the very cleanest engines. We are proposing regulations to require that trucks transporting containers in and out of ports shift rapidly to zero-emissions.
“And we are continuing to push for tougher federal new engine standards for locomotives to complement our proposed regulations to address sources of pollution like interstate locomotives that California must have in order clean the air especially near port-adjacent communities that are already burdened by high levels of air pollution.”
In July, Rep. Lowenthal introduced the Clean Shipping Act, aimed at zeroing out pollution from all ocean shipping companies that do business with the U.S. This legislation will protect the health of port communities, address environmental injustice and provide solutions to the climate crisis. Through the Inflation Reduction Act, Democrats secured billions of dollars that would help fund the zero-emission transition at the ports.
Antonio Santos, Federal Climate Policy Director, Pacific Environment, said: “We are on the cusp of market changes for zero-emission shipping. But we face a climate crisis, and it’s incumbent on federal, state, and local governments to put into place policies and investments to help accelerate the process.
“For far too long, port communities have suffered the burden of maritime pollution, and it’s time to right the ship. We need Congress to act and pass the Clean Shipping Act of 2022 to end dirty fossil-fueled shipping in our oceans and ports.”
In June, the City of Long Beach joined the City of Los Angeles in calling on the San Pedro Port Complex’s top maritime importers to commit to making all calls on 100% zero-emission ships by 2030.
“We are seeing strong momentum at various levels of government for zero-emission ocean shipping this decade, including recent resolutions from the City of Long Beach and Los Angeles and the Inflation Reduction Act’s $3 billion for reducing air pollution at ports,” said Dawny’all Heydari, Lead for the Ship It Zero campaign, Pacific Environment.
“Emissions from ocean cargo ships pose serious risks to public health, including death from cancer and cardiovascular disease, as well as childhood asthma. This is most especially detrimental to portside working-class Black and Brown communities, including West Long Beach, Wilmington, and San Pedro.
“We applaud the leadership of Rep. Lowenthal, the California Air Resources Board, and city councils for taking action at such a critical time for climate change, and we will continue to demand an end to ship pollution this decade.”
The Port of Long Beach also joined the Ports of Los Angeles and Shanghai and C40 Cities’ Green Ports Forum to create the world’s first transpacific green shipping corridor between ports in the United States and China.
“We’re not going to solve our climate crisis or our air pollution problems without addressing emissions from ships,” said Joe Lyou, President and CEO of Coalition for Clean Air and moderator of the event.
“This town hall gives us an opportunity to get going in the right direction. We will talk about the problems, the solutions, and the concrete next steps we can all take to reduce and eventually eliminate greenhouse gas and air pollution emissions from ships.”
In the mid-2000s, when shipping stocks first became popular on Wall Street, the shares were commonly bought as a play on China’s economy. China is pivotal to ocean shipping, whether it’s container ships, oil tankers, bulkers or gas carriers.
“There’s a saying that everything that moves out of China in containers has to come into China as raw materials,” noted Oeyvind Lindeman, chief commercial officer of Navigator Gas (NYSE: NVGS), on his company’s latest conference call.
Ominously, signs of China’s weakening economy are showing up across all shipping sectors at once.
The glass-half-empty view is that pullbacks in shipping demand are bellwethers of more severe economic problems to come. The glass-half-full view is that declines are temporary. A rebound of Chinese demand for iron ore, oil and gas will eventually boost commodity shipping rates.
Container shipping
Sales of containerized goods to the U.S. and Europe supported the Chinese economy throughout the pandemic era. Markets were rattled Wednesday when China’s official monthly export stats came in much lighter than expected.
China’s exports rose 7.1% year on year (y/y) in August, well below the consensus forecast for 12.8% growth. Exports had grown 18% y/y in July. China’s exports to the U.S. declined 3.8% y/y in August, compared to an 11% increase in July.
Outbound volumes are being squeezed from both sides. Demand for Chinese goods is falling at the same time COVID-19 lockdowns and weather issues are constraining Chinese manufacturing and logistics.
Index: January 2019 = 100 (Chart: FreightWaves SONAR)
The government has extended lockdowns in Chengdu and announced new nationwide precautions through the end of October. Analysts do not foresee any relaxation of China’s zero-COVID policy this year.
Meanwhile, China recorded its highest temperatures and lowest rainfall in over six decades last month. Resultant power outages forced factory closures in Sichuan.
Dry bulk imports
China is the world’s largest producer of steel. Its steel production in January-July was down 6.1% y/y. Production in July fell 10% versus June.
“The decline in Chinese steel production has predominantly come from the ailing property sector and the stop-start industrial activity due to COVID-19 lockdowns,” wrote Mark Nugent, dry bulk analyst at shipbroker Braemar, in a research note on Thursday.
Brokerage EastGate Shipping said that the heatwave and power shortages forced 20 steel mills to go offline for around a week in mid-August.
Brokerage BRS blamed the plunge on diversions of Australian iron ore from China to Southeast Asia, and more damaging to rates, a sharp decline in Chinese imports of long-haul Brazilian iron ore in August.
“Scorching temperatures and a relentless zero-COVID policy seriously crippled steel demand in China,” said BRS. It does not expect a full recovery of Chinese steel production until next spring, “casting doubts on a radical rebound in seaborne iron ore demand.”
According to Poten & Partners, Chinese crude imports grew rapidly from 4.1 million barrels per day (b/d) in 2009 to 10.1 million b/d in 2019. Growth slowed in 2020 when the pandemic hit and declined by 550,000 b/d in 2021.
Chinese imports sank to 8.7 million b/d in June, the lowest monthly average since July 2018. Imports were 8.8 million b/d in July and 9.5 million b/d in August. In the first eight months of this year, Chinese crude imports fell 5.2% versus the same period in 2021.
The International Energy Agency said in its latest outlook that China’s lockdowns “set back our projected demand recovery by two months.”
BRS noted that China has 920,000 b/d in new refinery capacity scheduled to come online by the end of the year. Normally, that would increase crude import demand. However, China’s refining capacity is already higher than domestic consumption and the government has not been pushing exports.
“Considering our relatively pessimistic short-term outlook for China, [with] COVID and lockdowns to remain a going concern until at least the beginning of next year, we expect little upside in Chinese runs as Beijing appears unwilling to permit its refiners to focus on export markets,” said BRS.
LPG shipping
China also is one of the world’s largest importers of liquefied petroleum gas (LNG): propane and butane.
Beyond its use for energy, China imports propane as feedstock for propane dehydrogenation (PDH) plants for the creation of propylene. The propylene is used to produce polypropylene, which is in turn used to manufacture plastic.
Tim Hansen, chief commercial officer of Dorian LPG (NYSE: LPG), referred to Chinese demand headwinds during his company’s latest call. Hansen cited “renewed impact of COVID-19 lockdowns” and worries about Chinese demand that “were a factor for market players, which resulted in more risk-averse [behavior] and reduced opportunistic trades.”
According to Lindeman of Navigator Gas, “All eyes are on China and when they are getting out of their malaise.”
Oystein Kalleklev, CEO of Flex LNG (NYSE: FLNG), said on his company’s latest call: “In a sense, you could say that Europe has been very lucky, because the cooldown in the Chinese economy driven by COVID lockdowns has resulted in lower demand from China.
“Chinese imports this year are down by more than 20% [or] 9 million tons. And European buyers have been able to get access to these cargoes, which would have been a lot more difficult if the Chinese economy was running at normal capacity.”
Kalleklev believes China will come back to the LNG import market, in a big way, pointing to commitments for new volumes that have yet to come onstream.
“Even though China has a reduction in LNG imports this year, they are signing for almost half of these new volumes, because the LNG story in China is in its early phases,” Kalleklev said. “This year, actually, Japan will probably import more LNG than China. And there are more than 10 times as many people in China. So, China will continue to grow once they get control of COVID and reflate their economy.”
The Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Immigration Service (NIS) have agreed to deepen existing interagency collaboration with the signing of a Memorandum of Understanding, (MoU) on Seafarers’ Travel document amongst others.
The agreement was reached when the Comptroller General of NIS, Mr. Isah Idris Jere led senior officials of the service on a working visit to the management of NIMASA.
Speaking, the Director General of NIMASA, Dr. Bashir Jamoh noted that the role of the Nigerian Immigration Service in enhancing security in the maritime domain is crucial, adding that seamless issuance of travel documents to seafarers is a key component in the nation’s quest to grow the maritime industry.
According to Dr. Jamoh, “Security on land is key to achieving a safe and secure maritime domain. NIMASA appreciates the need to work closely with the Immigration Service to improve security in the maritime domain. We need the Service to play a major role in issues of crew nationality, seafarers travel document and managing issues of stowaways, amongst others.”
On his part, the NIS Comptroller General identified issuance of temporary work permits to international vessel crews as well as preventing stowaways, as areas of frequent collaboration between both organs of Government while also commending NIMASA’s automation of dockworkers registration nationwide.
According to him, “Our visit to NIMASA is a signal that the Nigeria Immigration Service seeks continued collaboration and deepened synergy as we collectively work to address the issues facing us in our coastal lines and in maintaining the integrity of our territorial waters. We welcome the Agency’s automation of dockworkers registration and issuance of biometric identity cards as a great step in the task of securing the nation’s ports.”
On September 12, according to the dynamics and development trend of typhoons, the Ningbo Maritime Safety Administration of the People’s Republic of China decided that the coastal area of Ningbo, Zhejiang Province will start a level III typhoon defense emergency response from 9:00 on the same day. Photo provided by Ma Hongyu The maritime department reminds all relevant units and ships to pay close attention to the dynamics of typhoons, and do a good job of typhoon prevention in accordance with the “Regulations on the Supervision and Management of Water Typhoon Prevention in the Jurisdiction of Ningbo Maritime Safety Administration” and their respective typhoon prevention plans.
China News Service, Ningbo, September 12 (Reporter Lin Bo) On September 12, according to the dynamics and development trend of typhoons, the Ningbo Maritime Safety Administration of the People’s Republic of China decided that the coastal area of Ningbo, Zhejiang Province will start a level III typhoon defense emergency response from 9:00 that day.
It is reported that this year’s No. 12 typhoon “Meihua” (strong typhoon) was located at 23.9 degrees north latitude and 124.2 degrees east longitude at 8:00 on September 12, 712 kilometers away from Ningbo. The maximum wind force in the center was 14, and the center pressure was 950 hPa , moving at a speed of 9 kilometers per hour.
According to the typhoon track forecast by the meteorological department, “Plum Blossom” is likely to land on the coast of China, and the coastal waters of Ningbo are directly affected by the typhoon.
The maritime department reminds all relevant units and ships to pay close attention to the dynamics of typhoons, and do a good job of typhoon prevention in accordance with the “Regulations on the Supervision and Management of Waterborne Typhoon Prevention in the Jurisdiction of Ningbo Maritime Safety Administration” and their respective typhoon prevention plans.
During the Mid-Autumn Festival holiday, there is a large demand for return passenger transport by water.
Ningbo maritime department has worked with relevant passenger transport companies to focus on flight adjustment and release, and strengthen passenger ship escort work through the ship traffic management center and on-site law enforcement forces to prevent passengers from being stranded.
At present, there are a total of 25 main passenger ferry routes in normal operation in Ningbo, 5 passenger routes have been suspended, and the remaining routes have also been prepared for suspension. Passenger evacuation has begun on routes such as Xiangshan Yushan and Tantoushan. It is expected that at noon on the same day All picked up.
The maritime department reminds that after entering the level III emergency response to typhoon prevention, all water-related engineering and dangerous goods operation units need to make timely adjustments to their production plans, evacuate ships and personnel according to the typhoon prevention plan, and port production departments must do a good job in production scheduling. Ensure that the key ships in berthing leave the berth in time.
At present, there are more than 1,100 sheltered ships in the port under the jurisdiction of Ningbo Maritime Safety Administration.
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
