Privatisation postponed – Port of Itajaí, Brazil Photo: Port of Itajai

July 28, 2022 Maritime Safety News

The port will continue under municipal management until 2025 as the government is not able to release the privatisation notice on time, Brazilian media report.

The complex is, since 2003, the second in terms of container throughput in the country, behind only the Port of Santos.

The Ministry of Infrastructure postponed the privatisation notice launch, which will give the municipality control over the port for two more years starting from January 2023. In addition to confirming the extension of the contract, the municipal authorities said they will request adjustments to it and reinforce attempts to strengthen local port activity.

“With the end of the delegation in December of this year, it is essential that we confirm the extension of this agreement between the Federal Government and the Municipality so that we can continue to manage the Port of Itajaí for another two years while the privatisation notice is concluded,”  said the mayor of Itajaí, Volnei Morastoni.

“Furthermore, Itajaí will respond to the request of the Ministry of Infrastructure to guarantee the continuity of port activities and the development of our city, region, and Santa Catarina. Our Port is an essential part of the economy of the State, as well as of Brazil, and cannot be affected by this situation.”

Documents will be presented to the National Secretariat of Ports and Waterway Transport for renewing the present agreement with the municipality but will request the elimination of a resolutive clause that ensures the length of the contract for the following two years with no option to terminate it earlier.

According to the port, this is required to provide security to port operators so they can comfortably maintain operations and search for new lines in the Port of Itajaí during the transition time until the process of the new exploratory model is completed. The exclusion would also avoid issues created by potential logistical instability.

Currently, the Itajaí Port Complex is responsible for more than 70% of Santa Catarina’s trade flow and almost 5% of the national flow ($16bn per year), in addition to possessing the greater infrastructure capacity for refrigerated cargo in the country.

The agreement for the delegation of the Port of Itajaí to the municipality ends on 31 December 2022. However, the public notice, scheduled to be released later this year, was postponed, and the municipal management will be renewed for the next two years, that is, until December 2024.

 

Source: https://www.seatrade-maritime.com/ports/privatisation-postponed-port-itaja-brazil

“CC-Ocean” Marine-based CO2 Capture System Demonstration Project Receives “Marine Engineering Of The Year 2021” Award From The Japan Institute Of Marine Engineering

July 28, 2022 GENERAL

“Carbon Capture on the Ocean” (CC-Ocean) project conducted in cooperation with Mitsubishi Shipbuilding Co., Ltd., a part of Mitsubishi Heavy Industries (MHI) Group, Kawasaki Kisen Kaisha, Ltd. (“K” Line) and ClassNK has received the “Marine Engineering of the Year 2021 (Doko Memorial Award)” from the Japan Institute of Marine Engineering (JIME). The award was received in recognition of the world’s first marine-based CO2 capture system on actual voyage to successfully separate and capture CO2 from flue gas, with the captured CO2 having a purity of greater than 99.9%, achieving performance in line with plan. The award ceremony was held on July 22 at the Kaiun Club in Tokyo.

Ceremony Photo
Ceremony Photo (courtesy of Mitsubishi Heavy Industries, Ltd.)

This prize, awarded for outstanding technical achievements in the fields of marine engines and equipment, offshore instruments, and related marine engineering, aims to draw attention to the innovativeness and importance of these achievements both in Japan and around the world, and support the further advancement of associated scientific and industrial technologies.

The award-winning “CC-Ocean” project aims to capture CO2 at sea by converting an existing CO2 capture system for onshore power plants to a marine environment. The system was installed on board the CORONA UTILITY, a coal carrier for Tohoku Electric Power Co., Inc. operated by “K” Line, with demonstration testing conducted for approximately six months starting in August 2021. The amount, ratio, and purity of the captured CO2 were all in line with plan, demonstrating the feasibility of capturing CO2 from the flue gas of marine engines onboard ships, where operating conditions differ from those on land.

ClassNK was involved in the evaluation and verification of the overall project from a safety perspective. The knowledge gained from this project will be used to develop adequate standards related to CO2 capture technologies in order to contribute to the reduction of GHG emissions from ships.

Source: https://www.marineinsight.com/shipping-news/cc-ocean-marine-based-co2-capture-system-demonstration-project-receives-marine-engineering-of-the-year-2021-award-from-the-japan-institute-of-marine-engineering/

Risks ahead for shipping markets

July 28, 2022 GENERAL

As a result Fray said a recovery in 2023 is now at risk. The demand outlook is weak, implying that a negative impact of the easing of covid-related inefficiencies more than offset the positive impact of increased inefficiencies driven by environmental regulations, Fray continued. An improvement in market balances relies on scrapping in 2023/2024.

Looking at the oil tanker market, the available fleet is growing by significantly more than actual capacity owing to reversal of floating storage, capacity growth is decelerating and will become negative over the forecast.

The tanker scrapping has ramped up in 2022, but volumes remain slow on larger tonnage, particularly VLCCs, explained Tim Smith, Director of MSI. Forecast newbuilding deliveries have been lowered due to a drop in contracting.

Although the container market remains very strong, there have been signs of weakness, said Daniel Richards, Associate Director MSI. Trade growth has slowed due to disruption to manufacturing in China caused by Covid-19 and there is pressure on consumer incomes. However, container volumes are still high, and congestion is a major issue as well.

The containership orderbook is now very large, and Daniel suggested stopping ordering containerships as the market is facing risks due to the massive orderbook.

Trade outlook is weak in 2022-2023, the industry is expected to back to “normal” by mid-2023. After mid-2023, vessel speed will become more important if the fleet slows down to meet environmental regulations, which would partly offset high vessel deliveries, Daniel added.

Another big challenge facing the newbuilding market that is the environmental timelines continues to accelerate, with an increasing focus on GHG emission regulations. The majority ships will need to comply with regulations with EEXI and CII will come into force shortly, said Jianjun Wang Regional Director, Asia for MSI.

Source: https://www.seatrade-maritime.com/dry-cargo/risks-ahead-shipping-markets

New US Demurrage and Detention rules – what you need to know

July 28, 2022 POST STATE CONTROL

On June 16, barely six weeks ago, President Joe Biden signed OSRA 2022 into law greatly expanding the scope of what the Federal Maritime Commission (FMC) could do in achieving its mandate, which is to: “Ensure a competitive and reliable international ocean transportation supply system that supports the US economy and protects the public from unfair and deceptive practices.”

When new legislation is enacted, Federal agencies typically have some time period to draft proposed rules, open them up for comments, and then- sometimes, revise the wording before entering the exact wording into the US Code. It is noteworthy that one aspect of OSRA 2022, that dealing with invoicing for Demurrage and Detention (D and D), an attention getting issue, takes immediate effect.

A late June message from the FMC noted that “The law, and its requirements, related to demurrage and detention charges, became effective June 16, 2022.” The Washington DC law firm Thompson Coburn advises that: “Because the statute took effect immediately, invoices for demurrage and detention charges should be examined for form and content compliance with the new law.”

The wording concerning D and D invoicing contains very specific requirements for Vessel Operating Common Carriers (VOCCs), which include all of the major liners serving US ports. The requirements for proper invoicing are contained within the OSRA 2022 wording.  Invoices must include the following:

  • Date that container is made available.
  • The port of discharge.
  • The container number or numbers.
  • For exported shipments, the earliest return date.
  • The allowed free time in days.
  • The start date of free time.
  • The end date of free time.
  • The applicable detention or demurrage rule on which the daily rate is based.
  • The applicable rate or rates per the applicable rule.
  • The total amount due.
  • The email, telephone number, or other appropriate contact information for questions or requests for mitigation of fees.
  • A statement that the charges are consistent with any of Federal Maritime Commission rules with respect to detention and demurrage.
  •  A statement that the common carrier’s performance did not cause or contribute to the underlying invoiced charges.

Interestingly, the bill’s language also includes a powerful incentive for carriers to get it right, saying: “Failure to include the information required under subsection (d) on an invoice with any demurrage or detention charge shall eliminate any obligation of the charged party to pay the applicable charge.’’. As a practical matter, this means that cargo owners could see delays in getting their actual D and D invoices as carriers make sure that bills conform precisely with requisite data fields.

Mohawk Global, a well-known consolidator and customs broker, had told its customers: “Some carriers are opting to delay such billing so they can comply with changes to the laws. This may delay Mohawk Global’s ability to invoice our clients on some of these charges, as carriers struggle with creating new data fields on their invoices.”

The Thompson Coburn legal team puts a very broad perspective on OSRA 2022, saying: “OSRA 22 is clearly the product of recent shipper frustrations with port congestion, container and chassis equipment shortages, record-high ocean freight rates, and aggressive assertion of demurrage and detention charges by ocean carriers. Many of these issues reflect global economic forces beyond the control of any one trading country.” Referring to the broad bi-partisan support for the new legislation, they add: “However, it is noteworthy that Congress, with little internal controversy, turned its gaze on the US regulatory structure governing ocean shipping for the first time in nearly a quarter century.”

The law firm Venable LLP stresses that: “The importance of properly assessing charges is especially underscored in light of the FMC’s recent enforcement action and settlement with Hapag-Lloyd for alleged violations related to its detention and demurrage practices.” In early June, the FMC had agreed with Hapag Lloyd on $2 million fine, following an April decision in a case involving difficulty in returns of containers at the ports of Los Angeles and Long Beach.

Reader resources:

https://www.congress.gov/117/bills/s3580/BILLS-117s3580es.pdf

https://www.fmc.gov/fmc-approves-2-million-settlement-agreement-with-hapag-lloyd/

Australia bans tanker for underpaying crew wages

July 28, 2022 TMSA 3

The Australian Maritime Safety Authority (AMSA) had detained the vessel after it was inspected on 17 June in the Port of Gladstone following a complaint on underpayment of seafarers and other welfare issues. The 2013-built tanker is flagged with Liberia, and owned in Singapore by OCM Maritime Flyer.

The Australian authorities found the ship’s crew of 21 were owed A$123,000 in underpaid wages, food and drinking water were not of appropriate quality, quantity and
nutritional value for seafarers. Seafarers had been repeatedly not paid at regular intervals and two crew had expired employment agreements.

Adding to the catalogue of misery AMSA said it also was understood a seafarer had not been provided with adequate medical care after being injured onboard.

The owner was ordered to pay wages owed to the crew and correct other deficiencies before being barred from Austrlian ports and waters for six months.

“Australia has zero tolerance for the underpayment of crew. This type of behaviour is unethical and in contravention to the MLC. The international conventions that protect seafarers’ rights are very clear,” AMSA’s Executive Director of Operations Michael Drake.

“Ships visiting Australian ports are on notice that if we find deliberate underpaying of crew
they can expect penalties.”

Australia routinely bars vessels for failure to comply with the MLC and other maritime conventions. A full list of vessels banned by the authorities.

Source: https://www.seatrade-maritime.com/regulation/australia-bans-tanker-underpaying-crew-wages

Port of Oakland Resumes Work After Week of Truckers’ Protests

July 28, 2022 POST STATE CONTROL

The Port of Oakland is open and functioning normally after a week of protests by independent truck drivers brought operations in the U.S.’s eight busiest port basically to a halt for several days last week. Protests over California’s controversial “gig workers” law known as AB5 continue but the drivers agreed to stop their efforts to block the gates and threatening trucks and people if they attempted to cross the picket line.

“The truckers have been heard and we now urge them to voice their grievances with lawmakers, not the Port of Oakland,” said Danny Wan, Port Executive Director in a statement early on Monday. According to Wan, last week’s protests prevented the timely flow of international commerce including medical supplies, agricultural products, auto and technology parts, livestock, and manufacturing parts.

The protests began on July 18 with the independent truckers demanding to meet with California Governor Gavin Newsom to air their grievances and demand a continued exemption to the law that went into effect in 2020. The law makes it more costly and difficult to be an independent owner-operator according to the truckers with many saying they would be forced to give up independent operation. The U.S. Supreme Court refused to hear the truckers’ appeal on the case clearing the way for California to expand the law which covers other sectors to include the trucking industry.

The three major terminal operators were reportedly forced to suspend operations in the Port of Oakland for at least three days. Reports said 450 longshoremen were being sent home each day. Terminal operators said even if they could unload boxes from the inbound ships they were running out of space in the yards to stack the boxes.

Late last week, port and local officials proposed that the protestors move to designated spots where they could continue their demonstrations without blocking movement into and out of the port. In addition, reports said the police, which had permitted the protests to proceed last week, were now prepared to take action if the protestors did not withdraw. Port of Oakland officials acknowledged today that City of Oakland, regional and state law enforcement are continuing to monitor and implement measures to keep traffic flowing.

“We appreciate the independent truck drivers’ use of the designated Free Speech Zones and we thank local law enforcement for their continued assistance,” said Wan. He declared that “The Port of Oakland has resumed full operations.”

Protestors did not show up at the gates over the weekend when the port offers limited weekend hours. However, the test came on Monday the first full day of work. Vessels had begun late last week to divert seeking alternative spaces mostly in the Southern California ports due to the uncertainty at Oakland. AIS data shows at least a dozen containerships anchored in San Francisco Bay today.

While the port is open many people associated with the operations cautioned with will take days or weeks to fully recover. Bill Aboudi, president of trucking company Oakland Port Services told The Wall Street Journal there were no slot reservations for trucks available before Tuesday night. He said it was as if everyone was trying to cram a week’s worth of work into one or two days with him predicting “Nothing will be normal for another few weeks.”

It is unclear what will happen next. The Governor’s office continues to say it is committed to enforcing the law and was preparing to begin a transition period. The Port of Oakland, however, reportedly offered to form a working group to provide the truckers with an opportunity to review concerns before the law goes into effect.

Source: https://www.maritime-executive.com/article/port-of-oakland-resumes-work-after-week-of-truckers-protests

The Australian Maritime Safety Authority Bans Liberia-Flagged Tanker

July 28, 2022 Maritime Safety News

On 23rd July, the Australian Maritime Safety Authority (AMSA) banned the Liberian-flagged oil tanker, AG Neptune, for six months in Australian ports. AMSA examined the Port of Gladstone ship on 17 June 2022 after receiving a complaint regarding underpaying seafarers and welfare-related issues.

During the examination, AMSA found evidence that the employment agreement with 21 seafarers on board the ship was not met, and crew members collectively owed about $123,000.

AMSA, as evidence, discovered that the food and drinking water was of inappropriate quality. The quantity and nutritional value were also insufficient.

It’s also understood that a seafarer wasn’t provided adequate medical treatment and care despite being injured onboard.

Liberia-Flagged Tanker
Image for representation purpose only

AMSA, as a result, detained the vessel for several breaches of the Maritime Labour Convention, and the operator was directed to pay outstanding wages and address these deficiencies.

AMSA executive director of operations Michael Drake said that the seafarers were consistently not paid regularly. Two members of the crew had passed away from seafarer employment agreements.

Drake added that Australia accepts zero tolerance for underpayment of crew members. This type of behavior is unethical and in contravention of the MLC. The international conventions meant to safeguard the seafarers’ rights are clear.

The vessels visiting Australian ports notice that if deliberate underpaying of the crew members is discovered, they may have to pay penalties.

The AMSA takes the MLC seriously and strives to make sure that seafarers’ health and well-being are maintained on all vessels in Australia.

AG Neptune, built in 2013, is a crude oil tanker flagged in Liberia. It has a capacity of approximately 105,405 DWT tonnes.

AIS data reflects that the vessel departed Gladstone anchorage on 25 July and is moving toward Singapore.

References: The New Daily, DCN, MSN

Egypt Proceeding with Plans for LNG Bunkering Operation at Suez Canal

July 28, 2022 GENERAL

Egypt’s state-owned energy company EGAS (Egyptian Natural Gas Holding Company) reports that plans are moving forward for the development of an LNG bunkering hub to be developed at the Suez Canal. Working with partners Kanfer Shipping headquartered in Norway and Leth Suez Transit are working to develop the strategic hub and to have the bunkering infrastructure in operation by 2025 at the latest.

The companies reported they are expanding on an initial Memorandum of Understanding signed in February 2022 to explore bunkering operations in the Mediterranean, Suez, and the Red Sea from a hub in Egypt. The companies have agreed to form a joint venture which will charter a bunker vessel from Kanfer and manage operations from Egypt. The LNG would come from EGAS or other sources in Egypt.

The companies point to the location of the Suez Canal as to making their operation a strategic asset to the industry. They point out that more than 20,000 ships are transiting the Suez Canal each year and the ships have to wait at the northern and southern terminus while the daily convoys are formed.

While vessels are waiting to transit the Suez Canal, the group says the time can be used to increase efficiency by bunkering. They said the service would be available at both Port Said and the Suez Port and could be offered at other important Egyptian ports on the Mediterranean.

According to DNV, there are currently 38 LNG bunker vessels in operation with 18 additional orders and still others under consideration. LNG bunker is today offered in France, Spain, and Gibraltar, with Fratelli Cosulich planning to launch operations in Italy in 2023 and 2024. Similarly, there are discussions for LNG bunkering based in Portugal, but currently, there are no LNG operations regularly planned for the Southern Mediterranean and Egypt.

The partners point to the record orderbook for LNG vessels. Citing data from DNV, they said there are currently 304 LNG-fueled ships in operation. However, that number is expected to rise rapidly with 511 dual-fuel ships on order with the intent to operate them with LNG. Himalaya Shipping, with 12 Newcastlemax LNG-fueled bulkers on order, for example, welcomed the news saying the strategic location would help the company transition its dry bulk shipping to LNG.

“One of the key advantages of Egypt as an LNG bunkering location is that Egypt has natural gas resources and liquefaction facilities, which put them in a unique and competitive position towards the key LNG bunkering hubs of the world,” the partners said in discussing their plans. They said LNG can be sourced from two existing terminals and an FSRU stationed in Egypt. They believe this will make their operation price competitive.

Leth and Kanfer plan to seek an additional joint venture partner that has experience with bunkering or a commodity trader that can play an active part in developing the business model.

Source: https://www.maritime-executive.com/article/egypt-proceeding-with-plans-for-lng-bunkering-operation-at-suez-canal

IMO Welcomes Maritime Humanitarian Corridor In Black Sea

July 28, 2022 Maritime Safety News

IMO Secretary-General Kitack Lim on Friday (22 July) welcomed the signing of an agreement between, the Russian Federation, Türkiye, Ukraine and the United Nations to establish a humanitarian maritime corridor to allow ships to export critical cargoes of grain and foodstuffs from Ukraine.

The agreement was signed in Istanbul, Türkiye after several weeks of talks. Senior IMO officials participated as part of the UN delegation.

Mr. Lim attended the signing ceremony in Istanbul.

Mr. Lim attended the signing ceremony in Istanbul
Credits: IMO

“I am very pleased that all parties have reached agreement on the way forward for ships to safely transport much-needed grain and other commodities through the Black Sea. This agreement would not have been possible without the spirit of cooperation by the countries involved and the leadership shown by UN Secretary General António Guterres in proposing this initiative,” IMO Secretary-General Lim said.

“The safety of ships and seafarers remains my top priority. IMO instruments, including the International Ship and Port Facilities Security (ISPS) Code, underpin this agreement for safe and secure shipping through the Black Sea. I commend the efforts of all involved, particularly the IMO Member States – Russian Federation, Türkiye and Ukraine.”

The IMO Council, at its 35th Extraordinary Session in March, requested the IMO Secretary-General to collaborate with relevant parties to initiate the establishment and support the implementation of a blue safe maritime corridor in the Black Sea and the Sea of Azov.

Stabilizing global food supplies

Speaking at the signing cerempony, UN Secretary General António Guterres said, “Let there be no doubt – this is an agreement for the world. It will bring relief for developing countries on the edge of bankruptcy and the most vulnerable people on the edge of famine. And it will help stabilize global food prices which were already at record levels even before the war – a true nightmare for developing countries.

Specifically, the initiative we just signed opens a path for significant volumes of commercial food exports from three key Ukrainian ports in the Black Sea – Odesa, Chernomorsk and Yuzhny. The shipment of grain and food stocks into world markets will help bridge the global food supply gap and reduce pressure on high prices.”

Reference: IMO

Report: Sanctions Strand Russian Tanker Crew off India

July 28, 2022 TMSA 3

The Russian-flagged tanker Inda – formerly the Linda, sanctioned by the U.S. Treasury and accused of transporting Iranian oil – has been loitering off the coast of India since late May. Familymembers of the crew are growing concerned for their wellbeing, according to Russian media.

Yulia Khairulaeva, the wife of a crewmember aboard the Inda, told the Russian outlet Lenta.ru (a property of Russian government bank Sverbank) that the crew had gone several months without food or medicine while loitering off the coast of India.

Her account aligns with AIS tracking data. Inda arrived off Chennai on a voyage from the Singapore Strait on May 25, but she did not enter port. Instead, she headed south for Sri Lanka at a slow bell, rounding its southern coast and then transiting northwest along India’s coastline, never exceeding three knots. She arrived off Gujarat in early July, and she has loitered about 50 nautical miles off Alang in recent weeks. She reports her draft as eight meters (in ballast).

Tracking courtesy Pole Star

Lenta’s reporters contacted the operator, Transmorflot, and learned that the vessel needs repair but could not enter port in India due to sanctions. Western sanctions on Russia have limited impact in India, but the Inda was specifically blacklisted by the U.S. Treasury in February for connections to sanctioned bank Promsvyazbank. Transmorflot is also named on the Treasury’s blacklist.

Khairulaeva asserted that a lack of medicine on board the ship is causing health problems for some of the crewmembers, and that food is running low. She said that the crewmembers were well past their contract end dates – some have been aboard for 15 months – and she accused the vessel’s owner and the crewmembers’ union of failing to intervene on the crew’s behalf.

Inda (ex name Linda) is a 2003-built Aframax flagged in Russia. She has been owned by Transmorflot since 2020.

Source: https://www.maritime-executive.com/article/report-sanctions-strand-russian-tanker-crew-off-india

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