The Kerala High Court has ordered detention of a Russian ship at the Cochin port here after an admiralty suit was filed by an Estonian shore service company, Bunker Partner OU.
Justice Sathish Ninan on July 18 ordered the Deputy Conservator of Ports at the Cochin Port Trust to execute the warrant and effect the arrest, seizure and detention of the vessel, MV MAIA-1, along with its hull, tackle, engines, machinery, boards, bunkers, equipment, peripherals and other appurtenances.
The court said the vessel MV MAIA-1 needs to either deposit an amount of USD 23,503.14, which is equivalent to approx Rs 18,68,499.63, due to the plaintiff or furnish a security for the said amount to the satisfaction of the court.
The court also directed the Estonian company to furnish a counter security for an amount of Rs 5,00,000 within a period of two weeks.
Earlier in the day, the Russian embassy had taken up with the Ministry of External Affairs (MEA) the detention of the Russian cargo ship at Cochin port and requested for an “explanation” of the circumstances of the incident.
The embassy said this on Tuesday in response to media queries on the matter.
There was no immediate comment on the issue by the MEA.
“The Russian embassy in India is aware of the Russian cargo ship detention in the Indian port of Cochin, on board of which a military cargo for the Indian armed forces was delivered,” it said.
Asyad Dry Dock (formerly known as Oman Dry-Dock Company) has turned a first-ever profit since its establishment just over a decade ago as the country’s first ship repair and maintenance yard
Oman Investment Authority (OIA), the investment arm of the Omani government, made the announcement in its newly published Annual Report for the June 2020 – December 2021 period. Asyad Dry Dock is a subsidiary of Asyad Group, the government’s logistics and supply chain business, which in turn is affiliated to OIA.
“Asyad Dry Dock registered net profits for the first time since its incorporation in 2011 as a result of establishing new sources of income, rationalising spending, increasing productivity, and targeting projects with high-profit margins,” said OIA in its Annual Report.
Established within Port of Duqm, Asyad Dry Dock offers an expanding suite of services encompassing ship repair, ship conversion, mega yacht repair, offshore rig repair, shipbuilding, and industrial fabrication. Equipped with a 2,800-metre quay and two graving docks, the yard can handle vessels up to 600,000 DWT.
Since the commencement of operations in 2011, Asyad Dry Dock has handled over 1,100 vessels. In 2021, the yard received a total of 163 vessels, representing a 21 per cent increase over corresponding figures for 2020.
Also in 2021, the yard set a record by accommodating 23 ships simultaneously. It also announced a landmark foray into shipbuilding services for the first time, with a focus on small and medium size vessels. The first craft built at the Duqm facility was delivered earlier this year, with several local and regional shipbuilding projects in the pipeline, according to the company.
Meanwhile, Asyad Group, the parent holding company, posted a net profit of RO 47.4 million in 2021, down from RO 52.4 million a year earlier, Oman Investment Authority stated in its report.
“(Asyad Group) recorded positive growth of 5 per cent in the volume of containers handled in the ports run by the group in 2020, and positive growth of 2 per cent in 2021. (It) contributed to the management of the Covid-19 crisis by ensuring continuity of port operations and the smooth commercial movement and transport of main consumer commodities,” the Authority stated.
Also contributing to the group’s performance was the restructuring of its asset portfolio “through integration and merger of the group’s subsidiaries, privatisation, or cancellation and transfer of non-core activities to the competent entities”, it further noted.
In particular, the restructuring and transfer of the International Maritime College Oman (IMCO) to a private Omani university has contributed to an annual saving of around RO 500K. Additionally, the Group restructured the postal network and closed 14 “unprofitable” branches, leading to financial savings. It also exited the Oman International Container Terminal (OICT) at Sohar Port in a move that “generated good returns from the transaction”, the Authority noted.
Significantly, Asyad Shipping (formerly Oman Shipping Company) generated “record revenues” totalling RO 41 million last year. The Authority attributed this outcome to the “improved performance of the containers sector, and expansion of the company’s commercial operations and shipping network”.
Listing other achievements by Asyad Group subsidiaries during the past year, the Authority noted in particular the classification of Omani ports as “the fastest handler of containerships in the world” – a citation made by the United Nations Conference on Trade and Development (UNCTAD).
Additionally, Asyad affiliates successfully expanded their network of container shipping lines and inaugurated the first direct shipping line between the Sultanate of Oman and Arabian Gulf ports (Gulf Express Line).
Port of Duqm has been a key focus of Asyad Group’s operations during the past year.
It launched marine services at the maritime gateway, and also introduced operations at the General Cargo Terminal at the port. Furthermore, the Group floated a tender for the management and operation of the port’s new Container Terminal.
The Port of Amsterdam is working towards the energy transition by making sea cruises more sustainable. In 2025, sea cruises will be connected to ship-to-shore power at the Passenger Terminal Amsterdam (PTA).
This will reduce emissions from a cruise ship at the quay and improve the air quality in the surroundings. From 2030, it will be a legal requirement for sea cruises to use ship-to-shore power.
The Port of Amsterdam wants to be a leader in the energy transition. That is why it is speeding up the installation of green ship-to-shore power for both sea cruises and river cruises. Thanks to ship-to-shore power, the berths at the PTA will become greener. This will significantly reduce the CO2 emissions of sea cruise ships at the quay. It will improve air quality by reducing particulate matter, among other things. Since the ships will no longer need to use their generators, ship-to-shore power will also help reduce odour and noise.
Credits: Port Of Amsterdam
The installation process
The Port of Amsterdam has started the design phase together with grid operator Liander. One of the components of this is the laying of a power cable, which needs to be ready by early 2025. At the same time, the design of the necessary installations at the PTA is being worked on. The port received a European subsidy for this phase. It is expected that the European tender process will start after the summer, so that both sea cruise and river cruise ships will be able to use the ship-to-shore power at the PTA from the start of the cruise season in 2025. In addition, the possibility of using the available power for other purposes, such as charging infrastructure, is being explored.
Clean Shipping Vision
The installation of ship-to-shore power at the PTA is part of the Clean Shipping Vision (click here for more info) in which the Port of Amsterdam maps out the pathway to make vessel traffic more sustainable. By 2050, vessel traffic in the Port of Amsterdam should be completely emission-free.
Dorine Bosman, Chief Investment Officer at the Port of Amsterdam: ‘With the installation of ship-to-shore power, we are working on improving the air quality in the area and making cruises more sustainable. We are also going to be more selective in which sea cruises we allow. From 2024 onwards, older ships (with older engines) will no longer be allowed to dock at the PTA. Ships that can connect to ship-to-shore power as from 2025 will be given priority to dock at the PTA. We are investing in a clean port, clean vessel traffic and a clean city’.
Titan will supply LNG and LBM with LNG bunker vessel (LBV) Optimus. The vessel has a capacity of 6,000 m3 and will operate under Titan’s license in the Dutch-Belgian port–industrial region known as Amsterdam–Rotterdam–Antwerp (ARA) and the Zeebrugge port in Belgium.
Optimus arrived at the Port of Amsterdam on July 6th, giving Titan the opportunity to meet the crew and prepare them for bunkering in the ARA region.
Optimus will join the Titan fleet alongside the company’s other chartered and owned vessels such as FlexFueler001, FlexFueler002, Green Zeebrugge, and Coral Fraseri, all of which can deliver LNG and liquefied biomethane (LBM) bunker stems.
Optimus is a Finnish-Swedish ice-class 1A vessel measuring 100 m in length with a draft of 5 m. Its two 3,000 m3 C-type LNG tanks (max pressure 4.5 bar) offer an LNG bunkering speed of 4 x 250 m3 /h. The vessel is designed with dual-fuel propulsion and has a maximum speed of 13.4 knots.
The vessel was built at Damen Shipyards Yichang and completed its gas trials in Damen Verolme Rotterdam shipyard before being delivered to its owner Infortar for charter by Elenger – the new trademark recently introduced by Eesti Gaas for its export markets.
Optimus is designed to meet the requirements of ICE class 1A certification and to achieve green ship notation. Its dual-fuel propulsion system is used to manage the boil-off gas in combination with a gas boiler system.
Elenger has significantly expanded its LNG distribution business in the Baltic region. The company has been supplying one of the leading regional ferry companies Tallink Group for the past five years.
In May, Titan won the contract to supply LNG and LBM to two new LNG-fuelled hybrid ropax vessels for Brittany Ferries.
The two 195-m, 1,400-passenger LNG-hybrid ships will join Brittany Ferries’ fleet in 2024 and 2025, replacing two of the company’s longest-serving vessels, Bretagne and Normandie. They will follow entry into service of two new LNG-fuelled ships, Salamanca, which entered service in March 2022, and Santoña which will join the fleet in 2023.
The hybrid vessels will have a large battery hybrid power system of 10 MWh for propulsion and manoeuvring in port and an 8-MW electric shore connection that will allow for recharging in port, where infrastructure allows.
The ferries will operate between England and France from 2025, serving established routes connecting Portsmouth, UK, with Saint-Malo, France and Portsmouth with Ouistreham, France.
Titan LNG said the partnership deal is an expansion of its operations in the English Channel that will increase availability of LNG, LBM, and, eventually, hydrogen-derived LNG in the region. Titan said it will bring additional barge capacity to meet the demand, pointing to plans for a Krios-series vessel to serve Brittany Ferries and to regularly transit between relevant ports.
A new event Ocean Expo Ningbo is promoting cooperation opportunities in the vibrant port city of Ningbo and the one of the world’s largest container ports Ningbo – Zhoushan.
On July 12-13, the Maritime Silk Road · Ocean Expo Ningbo Online was officially launched with over 80 companies participating in an online exhibition as well as a Smart Port Innovation Summit.
Zhigang Li, Deputy Secretary General of Ningbo Municipal Government, conveyed a message from Wei Hua, Executive Vice Mayor of Ningbo that the expo was a vital part of a strategy of “accelerating the construction of a strong ocean province, promoting the co-construction of Ningbo Zhoushan as a Leading Maritime Capital.”
The online Expo and Smart Port Innovation summit saw the participation officials from Singapore, the world’s second largest container port.
Quah Ley Hoon, the Chief Executive of Maritime & Port Authority of Singapore (MPA) said, “China and Singapore enjoy strong maritime relationship. Beyond strong collaboration between our port terminals, China’s Maritime Safety Administration (MSA) and MPA inked a memorandum of understanding (MOU) in 2021 to promote, accept and use electronic certificates for seafarers and ships for port clearance. Thus far, we have conducted more than 10 trials on such operations, and can serve as a benchmark for other ports on e-port clearance.”
Ocean Expo Ningbo is an initiative led by Ningbo Municipal Government and Informa Markets, co-organised by China Shipowners Association and co-hosted by Ningbo Younage Exhibition Co., Ltd.
Bill Zhang, Vice President of Informa Markets (China), sees Ningbo as a natural location to hold the Ocean Expo giving opportunities for business cooperation. “We will take the opening of Ocean Expo Ningbo as an opportunity to introduce more cooperation and merger projects to promote the development of relevant industries in Ningbo,”he said.
Shouguo Zhang, Executive Vice President of China Shipowner’s Association, said they would make full use of this opportunity to enhance mutual understanding and explore cooperation opportunities to promote high-quality development of the global shipping industry.
In addition to the International Summit, Online Show Room, Meet Your Sea Friends and Online Match-making, Ocean Expo Ningbo will hold a larger offline exhibition in November 3 to 5 this year.
With the European Union closing in on the final proposals and then adoption of its Emissions Trading System, Maersk provided an expert opinion to customers on what the impact and cost might be for shipments starting January 2023. The shipping giant acknowledges that key points of the legislation for shipping to be incorporated into the EU Fit for 55 packages still need to be resolved saying nonetheless that the costs for shippers will likely be significant.
Maersk reviews for customers the progress as well as the current differences in the EU proposals while pointing out that the EU measures are likely to be the first ones to enter into force. While they recognize that other jurisdictions are also exploring similar measures, the EU they expect will not only be first but will have more far-reaching consequences. “The EU measures carry a large degree of extra-territoriality potentially affecting cargo moving outside of the EU’s borders.”
Based on the EuropeanCommission’s version of the legislation as the terms are still being negotiated between the different bodies, Maersk makes assumptions on how the ETS “cap-and-trade” system will come into effect and how it will impact shipping. They noted that the concept calls for the emissions cap which is lowered over time with companies buying or assembling allowances. “The price of the allowances is not fixed but fluctuates according to the market demand and supply of emission allowances.”
Based on the latest developments between the European Parliament and the Council of the European Union, Maersk presented a model for the potential costs and what would be passed along to shippers. The model uses the assumption that the price of the European Union Allowance (EUA) will be around EUR 90 ($91.30 at current exchange rates).
Looking at the cost impact on dry cargo, Maersk sets the range of impact between approximately $100 and $200 based on distance and other factors. The average surcharge for shippers of dry cargo they estimate at nearly $160 with the highest cost on shipments between the West Coast of South America and Europe and the lowest from Northern Europe to Asia.
Reefer shippers can expect an even greater surcharge starting January 2023. The average is estimated at $235 with the range between approximately $150 and $325. The high and low are on the same routes as with dry cargo.
“The cost of compliance with the ETS will likely be significant therefore impacting the cost of shipping. It is expected that the volatility of the European Union Allowance (EUA) traded in ETS may increase, as the revised legislation comes into effect,” the expert opinion authored by Sebastian Von Hayn, Head of Network & Market Asia/EU concludes. “To ensure transparency, we plan to apply these costs as a standalone surcharge effective Q1 2023.”
Recognizing that it will be later in 2022 until a political agreement is likely to be reached, Maersk highlights the outstanding differences in the versions. For the purpose of their modeling, they used the European Parliament that abolishes the phase-in period instead meaning that the obligation to purchase allowances would be immediate versus the other drafts that started at 20 percent in 2023 and in the three subsequent years rise incrementally to 100 percent in 2026 and beyond. The proposals also vary if the allowances only pertain to CO2 or also include methane and Nitrous Oxide in the cap-and-trade limits.
Maersk also notes that the charges are linked to the ship and not the cargo making voyage planning even more critical. Some proposals also call for all voyages to be included regardless of if they are departing from a non-EU port or ending outside the EU.
Given the differing positions on elements such as the phase-in period, the percentage for voyages between EU and non-EU ports, and when carbon pricing begins, as well as other non-logistics related issues, Maersk advises customers that the negotiations will take some time before the details of the EU Fit for 55 package and its impact on shipping are finalized.
The new service, deploying six 2,500 teu containerships, provides a direct link for customers from north China to Southeast Asia, with improved transit times and more service offerings.
Port calls include Dalian, Tianjin, Qingdao, Busan, Incheon, Vung Tau, Leam Chabang, Singapore, Tanjung Pelepas, Jakarta and Panjang.
This new service is the fourth new shipping routes that Dalian port has opened up for RCEP (Regional Comprehensive Economic Partnership) countries and is the second Southeast Asia service launched in July connecting with Vietnam and Thailand.
In the first half of 2022, Dalian port posted a container volume of 1.88m teu, an increase of 10.8%.
Saudi ports recorded a significant increase in cargo throughput volumes to reach 27.1 million tonnes, which is 16.1% increase compared to the 23.4 million tonnes recorded during June 2021.
The development plans launched by the Saudi Ports Authority (Mawani) to enhance the operational efficiency and upgrade ports’ capabilities resulted in a 55.7% increase in general cargo volumes to reach 790,000 tonnes.
Liquid bulk cargo increased by 31.8% to reach 15.5 million tonnes, while the dry bulk cargo decreased by 6.9% with a total of 3.9 million tonnes.
June statistics reflect Mawani’s continuous efforts to develop the maritime sector and position the Saudi Arabia as a global logistics hub in line with the National Transport and Logistics Strategy (NTLS).
As a result, the number of containers increased by 5.5% to reach 642.3 thousand TEUs compared to the 608.8 thousand TEUs recorded in June of last year, as well as the transshipment containers with which increased by 4.2% with a total of 244.6 thousand TEUs compared to the last year’s total which reached 234.7 thousand TEUs.
As Saudi ports recorded a 13.6% increase in the number of vessels with a total of 1,126 vessels, as well as the number of vehicles which increased by 25.8% to reach a total of 74 thousand vehicles, along with the total of food volumes which reached 1.6 million tons.
Considering the Hajj season, Saudi ports managed to receive 79 thousand passengers which is a 79.28% increase, and unload 990 thousand heads of livestock to record a 265.5% increase during June 2022.
Which of these two is happier? Someone who wins $3 million in the lottery then blows $2 million in Vegas, or someone who wins $1 million in the lottery and puts it in the bank?
Containerized cargo shippers face the reverse emotional scenario. Who’s less upset if spot rates quintuple? A shipper who’s used to paying $1,500 per forty-foot equivalent unit and suddenly sees rates jump to $7,500? Or one who pays $1,500 per FEU for years, gets slammed with crippling rates of $20,000 per FEU including premium charges, then gets “relief” as rates slide all the way back down to $7,500?
No one believed $20,000-per-FEU spot rates in fall 2021 were sustainable. If rates stayed that stratospheric for too long, it would destroy transport demand and compel competition regulators to step in. As Hapag-Lloyd CEO Rolf Habben Jansen said during a conference call in November, “It would be better for everybody if we saw more normalization.”
The best-case scenario for shipping lines is for the COVID rate surge to have emotionally and financially acclimated customers to higher freight costs, and for rates to stabilize at levels high enough to generate strong and sustainable profits for ocean carriers, but not so high that competition authorities intervene. For shippers, this new normal for rates would be much higher than pre-COVID levels but might seem like a bargain compared to all-time peaks.
Drewry spot rate indexes
Drewry’s weekly assessment for Shanghai-to-Los Angeles spot rates came in at $7,480 per FEU on Thursday. That’s down 23% year on year and down 1% week on week. This assessment is now 40% below its peak of $12,424 per FEU in late November 2021, yet still 5.3 times higher than rates at this time of year in 2019.
Drewry’s weekly spot assessment for Shanghai-to-New York was at $10,164 per FEU, flat week on week, down 14% year on year, down 37% from the peak of $16,183 per FEU in mid-September — but still quadruple 2019 levels.
Weekly spot rate assessment in $ per FEU. Blue line: Shanghai to LA. Green line: Shanghai to NY. Chart: FreightWaves SONAR
On one hand, a sharp drop in rates over the past nine months is reducing costs for shippers (at least, compared to last fall) and is showing that the market is functioning: Ocean carriers are competing on price to fill slots. On the other hand, rates are still very profitable to ocean carriers and transport costs for shippers are still dramatically higher than they were pre-COVID.
Freightos spot rate indexes
Different indexes show different numbers but the same trends.
The Freightos Baltic Daily Index (FBX) China/East Asia-to-North America West Coast assessment was at $7,264 per FEU on Thursday, down 65% from the all-time high of $20,586 per FEU in September but still five times more than rates at this time of year in 2019.
The FBX China/East Asia-to-North America East Coast rate was $10,020 on Thursday, less than half its all-time high of $22,234 per FEU in September but more than triple pre-COVID levels.
Daily spot rate assessment in $ per FEU. Blue line: China/East Asia to North America West Coast. Green line: China/East Asia to North America East Coast. Chart: FreightWaves SONAR
The drop from the peak is much steeper for the Freightos trans-Pacific indexes than for Drewry and other index providers because Freightos began including premium charges in its assessment methodology starting July 28, 2021.
Space has now opened up and shippers are generally no longer paying premiums.
Dafna Farkas, corporate marketing associate at Freightos, told American Shipper: “In the peak of the COVID surge, we ensured that the all-in rates were reflected by including premiums. We continue to ensure that all-in rates are reflected in the index and in that [regard], have not changed the methodology. On a price-point level, since premiums have largely been eradicated due to industry normalization, they aren’t really reflected in the industry price.”
Market in ‘wait-and-see mode’
S&P Global Commodities (formerly Platts) assessed North Asia-to-North America West Coast Freight All Kinds (FAK) rates at $7,100 per day on Thursday. That’s down 25% from the peak but still 4.3 times 2019 levels.
S&P Global put North Asia-to-North America East Coast FAK rates at $9,700 per day, down 19% from the all-time high albeit 3.5 times mid-July 2019 levels.
The container shipping team at S&P Global has been reporting lower-than-expected Asia-U.S. demand ever since the end of the Chinese New Year holiday in February.
Downward spot-rate pressure continues, S&P Global said this week, given ample space availability out of China and smaller carriers with chartered tonnage undercutting freight pricing of larger mainline carriers (in other words: competition). Some North Asia-to-West Coast spot offers were below $7,000 per FEU, it reported.
George Griffiths, managing editor of global container freight at S&P Global Commodity Insights, told American Shipper: “The market is just in wait-and-see mode at the moment. There are rumors of more lockdowns in Shanghai coming up, and some concerns that delays across the U.S. East Coast will begin to spread to the West Coast once more, but nothing concrete.
“High inventory levels and the rising cost of living are keeping a natural lid on demand at this point. So, the atmosphere is rather bearish, only being helped by the void [canceled] sailings that carriers are bringing in to try and protect rates.”
HMM, Korea’s largest shipping company, plans to expand its capacity from the current 820,000 TEUs to 1.2 million TEUs by 2026 and invest 15 trillion won in strategic shipping assets during the next five years.
HMM announced a mid- to long-term strategy at its main office in Yeouido, Seoul, on July 14. It marked the first time in 10 years that HMM announced such a large-scale investment plan. The company has been under the control of its creditors, including the Korea Development Bank, since 2016.
HMM posted operating profit of 3.1486 trillion won in the first quarter of 2022, setting a record for six consecutive quarters since the fourth quarter of 2020.
The company plans to secure logistics infrastructure such as terminals to expand its profit base and expand its shipping routes.
To promote balanced growth between its container and bulk businesses, HMM will dial up its bulk ship fleet from the current 29 vessels to 55 by 2026.
The expansion will include large ships that are needed to secure shipping alliance routes, medium-sized ships targeting emerging markets and small ships mainly for Asian routes.
HMM will also strengthen environment-friendly logistics services under the goal of reaching carbon neutrality in 2050. The shipping company has replaced ship fuel with low-sulfur oil and installed scrubbers to reduce carbon emissions. In addition, it plans to make efforts to secure eco-friendly fuel-based low-carbon ships, such as LNG-powered vessels.
HMM will invest more than 15 trillion won by 2026 to respond to changes in the shipping market. Ten trillion won will be invested in core assets such as ships, terminals, and logistics facilities, and five trillion won in diversification of its business portfolio. In particular, HMM will invest nearly 4 trillion won in eco-friendly ships such as LNG-powered ships, as eco-friendly ships will be a game changer in the shipping market.
An HMM official said the company has not yet discussed the timing or method for privatization with its major shareholders.
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