PUBLISHED OCT 21, 2021 8:57 PM BY THE MARITIME EXECUTIVE

After a surprisingly successful Chinese missile test in late July, the U.S. Navy is stepping up the development program for the Common Hypersonic Glide Body, the service’s new ultra-high-speed strike projectile.

Hypersonic weapons travel in excess of Mach 5, much like ballistic missiles; unlike ballistic missiles, they can maneuver and approach the target on a near-horizontal trajectory. This makes them exceptionally difficult to detect, track, intercept or evade.

In order to get a hypersonic glide body up to speed, it is mounted to the top of a booster rocket and shot into space. The glide body maneuvers during and after re-entry into the atmosphere, returning to earth on a long, upredictable flight path.

Russia put a nuclear-capable hypersonic glide body into service on an ICBM in 2019, and the People’s Liberation Army deployed both a hypersonic anti-ship cruise missile and a hypersonic glide body in 2019. The U.S. has yet to field a comparable (unclassified) system, but it does have three publicly-acknowledged R&D programs.

On Thursday, the U.S. Navy announced the successful completion of a “high operational tempo for hypersonics” flight campaign for its Common Hypersonic Glide Body / booster rocket combination, dubbed Conventional Prompt Strike (CPS). The U.S. Army plans to field the same missile in a different launcher as the Long Range Hypersonic Weapon (LRHW). The launches conducted on Wednesday included three sounding rocket tests, used for prototype system testing.

A related test on Thursday was scuttled when the booster rocket failed, according to Reuters.

Two related initiatives, DARPA’s Hypersonic Air-breathing Weapon Concept (HAWC) and the U.S. Air Force’s Air-launched Rapid Response Weapon (ARRW), are also in testing. Despite difficulties with rocket ignition failure, ARRW is budgeted for early production beginning in FY2022, which would make it the U.S. military’s first operational hypersonic weapon.

An AGM-183A booster sheds its nose fairing and prepares to deploy the Air-launched Rapid Response Weapon (ARRW) hypersonic glide body (Department of Defense illustration)

The accelerated pace of procurement may be related to developments in the Indo-Pacific. In late July and again in August, the People’s Liberation Army tested an intercontinental ballistic missile system that leverages hypersonic technology for a strategic advantage.

According to the Financial Times, the PLA’s Rocket Force launched a Long March rocket tipped with a nuclear-capable hypersonic glide vehicle on July 27 (and again on August 13). Instead of traveling in a line directly towards the target, the glide vehicle stayed in outer space for a partial orbit of the Earth before descending, “demonstrating an advanced space capability that caught US intelligence by surprise.”

This flight path is known as “fractional orbital bombardment,” and it is of concern to defense planners because it allows the incoming missile to arrive from virtually any direction. Intercontinental ballistic missiles are launched on the shortest possible Great Circle line between the launch site and the target, making a high arc through space; with fractional orbital bombardment, the warhead can make a very long, low-orbit journey in the other direction. For the U.S. mainland – which has a north-facing missile defense system designed to detect ballistic flight paths from Russia and China – this creates a new, hard to spot threat.

The fractional orbital bombardment concept is not new: it was invented by the former Soviet Union, which developed and successfully fielded a ballistic missile system that could complete a partial orbit of the Earth. It was placed into service in 1968 and decommissioned in 1982.

The PLA’s tests appear to be the first time that the idea has been revived in decades. It is viewed as a potentially destabilizing technology, especially when coupled with a hypersonic glide body: its low altitude flight path and unconventional trajectory make the missile much harder to detect and defeat – ideal qualities for a first-strike nuclear weapon.

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Anders Fogh Rasmussen to map new geopolitical landscape at Nor-Shipping 2022

PUBLISHED OCT 21, 2021 8:57 PM BY THE MARITIME EXECUTIVE

After a surprisingly successful Chinese missile test in late July, the U.S. Navy is stepping up the development program for the Common Hypersonic Glide Body, the service’s new ultra-high-speed strike projectile.

Hypersonic weapons travel in excess of Mach 5, much like ballistic missiles; unlike ballistic missiles, they can maneuver and approach the target on a near-horizontal trajectory. This makes them exceptionally difficult to detect, track, intercept or evade.

In order to get a hypersonic glide body up to speed, it is mounted to the top of a booster rocket and shot into space. The glide body maneuvers during and after re-entry into the atmosphere, returning to earth on a long, upredictable flight path.

Russia put a nuclear-capable hypersonic glide body into service on an ICBM in 2019, and the People’s Liberation Army deployed both a hypersonic anti-ship cruise missile and a hypersonic glide body in 2019. The U.S. has yet to field a comparable (unclassified) system, but it does have three publicly-acknowledged R&D programs.

On Thursday, the U.S. Navy announced the successful completion of a “high operational tempo for hypersonics” flight campaign for its Common Hypersonic Glide Body / booster rocket combination, dubbed Conventional Prompt Strike (CPS). The U.S. Army plans to field the same missile in a different launcher as the Long Range Hypersonic Weapon (LRHW). The launches conducted on Wednesday included three sounding rocket tests, used for prototype system testing.

A related test on Thursday was scuttled when the booster rocket failed, according to Reuters.

Two related initiatives, DARPA’s Hypersonic Air-breathing Weapon Concept (HAWC) and the U.S. Air Force’s Air-launched Rapid Response Weapon (ARRW), are also in testing. Despite difficulties with rocket ignition failure, ARRW is budgeted for early production beginning in FY2022, which would make it the U.S. military’s first operational hypersonic weapon.

An AGM-183A booster sheds its nose fairing and prepares to deploy the Air-launched Rapid Response Weapon (ARRW) hypersonic glide body (Department of Defense illustration)

The accelerated pace of procurement may be related to developments in the Indo-Pacific. In late July and again in August, the People’s Liberation Army tested an intercontinental ballistic missile system that leverages hypersonic technology for a strategic advantage.

According to the Financial Times, the PLA’s Rocket Force launched a Long March rocket tipped with a nuclear-capable hypersonic glide vehicle on July 27 (and again on August 13). Instead of traveling in a line directly towards the target, the glide vehicle stayed in outer space for a partial orbit of the Earth before descending, “demonstrating an advanced space capability that caught US intelligence by surprise.”

This flight path is known as “fractional orbital bombardment,” and it is of concern to defense planners because it allows the incoming missile to arrive from virtually any direction. Intercontinental ballistic missiles are launched on the shortest possible Great Circle line between the launch site and the target, making a high arc through space; with fractional orbital bombardment, the warhead can make a very long, low-orbit journey in the other direction. For the U.S. mainland – which has a north-facing missile defense system designed to detect ballistic flight paths from Russia and China – this creates a new, hard to spot threat.

The fractional orbital bombardment concept is not new: it was invented by the former Soviet Union, which developed and successfully fielded a ballistic missile system that could complete a partial orbit of the Earth. It was placed into service in 1968 and decommissioned in 1982.

The PLA’s tests appear to be the first time that the idea has been revived in decades. It is viewed as a potentially destabilizing technology, especially when coupled with a hypersonic glide body: its low altitude flight path and unconventional trajectory make the missile much harder to detect and defeat – ideal qualities for a first-strike nuclear weapon.

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https://www.maritime-executive.com/article/after-chinese-missile-test-u-s-navy-ramps-up-hypersonics-research

PUBLISHED OCT 21, 2021 10:01 PM BY THE MARITIME EXECUTIVE

The hub ports of Los Angeles, Long Beach and Savannah may be visibly struggling under the weight of hundreds of thousands of imported containers, but that can’t be said of all their neighbors. As dozens of ships stack up at anchor at America’s busiest destinations for import cargo, other capable facilities are running under capacity and are calling for more traffic.

At the Port of Oakland, some 300 nm to the north of LA/Long Beach, officials say that there have been no backlogs at all since August. But lines have continued to skip calls, and container volume actually fell by 13 percent in September – leaving plenty of room at the pier.

“There’s no congestion at the Oakland seaport, and we’re ready for more business,” Port of Oakland Maritime Director Bryan Brandes said in a statement. “We need ocean carriers to reinstate services in order to stabilize the supply chain, and our import and export partners echo this sentiment.”

The port struggled over the summer with a longshore labor shortage and a crane construction project, and carriers responded by skipping calls. Those problems have now been resolved, the port said, but the vessel services have not yet returned.

John Lee, the president of an Oakland-based forwarding company, suggested that there may be a strong financial incentive for carriers to omit Oakland. LA/Long Beach is too important to skip, so the wait time at anchor is baked in; once a ship finally makes it to the pier in LA/Long Beach, it makes fiscal sense to head right back to Asia, skipping Oakland but keeping the ship on schedule. (This also speeds up the return of empty containers to Asia, where boxes are in high demand for lucrative head-haul cargoes.)

“We should see vessel calls and cargo volume recover in October and November,” said port director Bryan Brandes.  “We have capacity in Oakland that needs to be put to use to help shore up the supply chain and support our economy.”

At the Port of Baltimore, officials say that they are seeing more traffic because of congestion at other East Coast hubs. Over the past year, the port’s container terminals have handled roughly two dozen unscheduled port calls for vessels that needed an alternate port.

In addition, Baltimore has recently secured two additional vessel services totaling 21 ships. It is preparing for the extra traffic with four new Neopanamax container cranes, which will give it enough capacity to work two ultra-large boxships at the same time.

“We are expanding and helping with the supply chain by attracting new services and container ships into the port of Baltimore so we can help alleviate the strain,” said Maryland Port Administration Executive Director William Doyle.

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https://www.maritime-executive.com/article/as-major-u-s-hub-ports-struggle-their-neighbors-want-more-traffic

PUBLISHED OCT 21, 2021 11:05 PM BY THE MARITIME EXECUTIVE

A U.S. Navy engineer and his wife will remain in jail pending trial on charges of espionage, a federal judge ruled Thursday.

Jonathan Toebbe, an employee of the U.S. Navy’s Naval Nuclear Propulsion Program, stands accused of trying to sell engineering data on the Virginia-class nuclear submarine to a foreign government. In a sting operation, an FBI undercover agent made arrangements with Toebbe for three separate “dead drop” transfers of data cards, each allegedly containing documents and diagrams related to the Virginia program. Jonathan’s wife, Diana Toebbe, is accused of standing lookout duty during these clandestine meetings.

Jonathan Toebbe has not applied to the court for release, but Diana, a schoolteacher at a high-end private school in Annapolis, asked to be released on bail pending her trial so that she could care for the couple’s children. Prosecutors asked the court to keep her in custody, asserting that a series of earlier text messages she exchanged with her husband showed an interest in leaving the country. The judge agreed, and he denied Diana Toebbe’s request.

The FBI may have brought the Toebbes into custody, but the agency has not yet finished its search. The undercover agents involved in the sting operation gave Jonathan Toebbe $100,000 in cryptocurrency in exchange for his nuclear secrets. That money has not been found – yet another reason to keep both of the Toebbes in custody, prosecutors argued.

In addition, the investigators have not managed to recover the thousands of pages of documents about the Virginia program that Jonathan Toebbe allegedly claimed to have in his possession.

The Virginia-class submarine is the U.S. Navy’s most modern attack sub, capable of ultra-quiet operation, high speed and long deployments. The nuclear reactor technology at its heart is one of the nation’s most closely-guarded secrets. Disclosing so-called “restricted data” about a military nuclear program is a serious felony, and if convicted, the defendants could face decades in prison (or life). Both have pleaded not guilty.

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https://www.maritime-executive.com/article/no-bail-for-couple-charged-in-nuclear-sub-espionage-case

PUBLISHED OCT 21, 2021 10:20 PM BY THE MARITIME EXECUTIVE

In 2013-2014, three newly established Mozambican companies took out a $2.2 billion loan. They all had links to people in the inner circle of former Mozambican President Armando Guebuza, and the Mozambican government was secretly listed as a guarantor – without the parliament’s approval.

One of the companies is state-owned EMATUM (Mozambique Tuna Company), which allegedly was to receive some of the cash to procure tuna fishing boats. The rest would go into the construction of a shipyard in Maputo and maritime security projects along the country’s coastline.

According to auditors, $500 million of the money reportedly went missing. The secret loans saga would quickly precipitate into a fiscal crisis, and in 2017, Mozambique defaulted on $727 million of bonds, causing its currency to plunge. IMF and other foreign donors at the time also withdrew aid when the fraud surrounding the loans emerged.

Credit Suisse bank has been under investigation by UK and US financial authorities, since it arranged for the loans. The authorities blamed the bank for inadequate controls to reduce the risk of fraud, despite having knowledge of the likelihood of bribery related to government projects.

In addition, a contractor allegedly arranged for kickbacks totaling $137 million, including $50 million for Credit Suisse bankers, according to documents obtained by the regulators.

On Tuesday, Credit Suisse Securities Europe Ltd (CSSEL), a unit of the bank, pleaded guilty to a single charge of conspiracy to commit wire fraud at a hearing in Brooklyn Federal Court. The parent company, Credit Suisse AG, also entered into a three-year deferred prosecution agreement with the U.S Justice Department.

The settlement includes a $247.5 million criminal fine paid to the U.S. Justice Department, which will be reduced to $175.5 million after crediting payments to other authorities; $100 million paid to the U.S Securities and Exchange Commission; $200.6 million paid to UK’s Financial Conduct Authority; and the forgiveness of $200 million in debt owed by Mozambique as a result of the loans.

Further, the bank will appoint an independent third party to review compliance measures for business in financially weak, high-risk countries, following enforcement action by Switzerland’s Financial Market Supervisory Authority.

“Credit Suisse Group AG, through its U.K. Subsidiary CSSEL, defrauded U.S and International investors in connection with a lending project in Mozambique. Among other things, Credit Suisse AG, CSSEL, and their co-conspirators deceived investors by hiding information about the risk that the loan proceeds were used for illegal purposes in connection with the restructuring of the loan,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division.

In addition, 19 suspects – including Ndambi Guebuza, the son of Mozambique’s former President Armando Guebuza – are on trial in Maputo on charges of blackmail, embezzlement and money laundering.

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https://www.maritime-executive.com/article/credit-suisse-fined-475m-for-fraudulent-fishery-development-loan

PUBLISHED OCT 22, 2021 1:01 PM BY THE CONVERSATION

[By Stavros Karamperidis]

Several months ago, I warned that the crisis in container ships could jeopardise Christmas by leaving retailers without enough goods on their shelves. Since then, there have been similar fears all over the media, not only due to shipping problems but also shortages of lorry drivers and unavailable products. As we approach November, the worst may be coming to the worst.

It is a classic supply and demand mismatch. On the one hand, people around the world managed to save over US$5 trillion (£3.6 trillion) during the lockdowns, and have been wanting to spend some of it now that restrictions have been lifted. This is why the global economy has seen a strong recovery in 2021, with the IMF predicting that global growth will be 6% for the year as a whole. According to an intelligence report shared with me by a shipping broker, that extra demand translated into over 119 million shipping containers between January and August, 6% higher than the equivalent period in 2019.

Supply chains have not been coping with this surge in orders. Ports have been struggling to load and unload container ships quickly enough, with nearly 600 container ships stuck outside docking areas around the world – nearly double the number at the start of the year.

Ports are understaffed because many workers are being kept off site by COVID-19 restrictions. There are not nearly enough containers, because ships that would normally pick up empty containers to return to ports in Asia have been sailing back empty-handed instead to minimise delays.

There are also not enough lorry drivers in numerous countries. It has become well known that the UK is short by some 100,000 drivers, partly because of Brexit, but Germany is short by around 80,000 drivers, while the EU as a whole is short by 400,000. This is making the problems with containers worse.

For example Felixstowe, the UK’s main port for container ships, is full with containers because there are not enough drivers to pick them up. This delays loading and unloading for vessels, creating a four to seven-day wait. Big shipping companies like Maersk have been rerouting to continental ports instead, where goods are reloaded on to smaller ships to sail back to the UK – all of which slows down deliveries considerably.

Another really important problem is a lack of raw materials and components. Suppliers have been caught short because they did not predict such massive demand, and are not as efficient as usual because of COVID. They have also been having to cope with energy shortages in countries such as China, as governments attempt to meet carbon emissions targets. This has meant that many goods can’t be finished, the most recent high-profile example being Apple reportedly stopping production of 10 million – 11% – of iPhone 13s due to chip shortages.

The good news

For all these reasons, it is quite likely that you may not get the exact product that you wanted for Christmas in 2021. But how long will this situation continue?

From another private shipping report, a group of global logistics CEOs were recently asked when they expected to see normality returning to supply chains, and only 37% thought it would have happened by the end of 2022. The remainder were evenly split between the first and second quarters of 2023.

My view is that this is too pessimistic. We are seeing the early signs of a global recession, with China and the US slowing down and central banks potentially about to make things worse by reducing the “money printing” that is quantitative easing, and even raising interest rates.

Along with rising consumer prices, not least gas and petrol, this will be making people more cautious about buying things. They will start using some of that saved US$5 trillion to cover more urgent needs, such as warming their houses, so the demand for goods will drop sharply as a result. This will not happen quickly enough to give supply chains much relief this side of Christmas, but it will help them to rebalance in 2022.

The supply of goods will also have increased because of suppliers investing in extra capacity in response to the current shortfalls. For example, again from a private report from a shipping broker, container shipping companies have placed record orders for new vessels with a total carrying capacity of 3.4 million TEU (the standard measure of capacity in shipping, which means “equivalent to 20 feet”). That’s 22% of the entire worldwide fleet.

Another piece of good news concerns decarbonisation. Most container ships still run on fossil fuels, with the industry said to be responsible for almost 3% of global carbon emissions. Changing this will cost many billions of pounds, and a group of major companies including Amazon, Ikea and Unilever has just announced that it will only use ships with zero emissions by 2040.

In this context, there is a silver lining to the fact that the shipping problems of 2021 have made freight rates extremely high – around ten times their usual levels. This has made shipping companies much more profitable than usual, and they will hopefully use some of this windfall to invest in ships that can run on green fuels, as well as new capabilities such as having more control over their speed. When ports are congested, for instance, this would enable them to reduce carbon emissions by travelling more slowly in order to arrive at a time when they have been notified that a berth will be available.

Even then, the big shipping companies will probably keep freight rates high after supply chains have normalised to help pay for decarbonising their fleets. So while I am feeling positive that supply chains will resume normal operations in 2022, it will not be anytime soon that we see transport costs as cheap as they were in the pre-COVID era. That may be one more reason to rethink our global supply model by bringing production closer to consumers. Again, that would probably be good news for carbon emissions.

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https://www.maritime-executive.com/editorials/the-supply-chain-crisis-has-a-silver-lining