freight monthly 20110503

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FREIGHT MONTHLYCOMPILED ON TUESDAY, 03 MAY 2011

TABLE OF CONTENTS (Click the below headlines for the full story)

SOMALI PIRATES SEIZE SINGAPOREAN TANKER OFF THECOAST OF KENYA

VITOL SHIPS DIESEL TO FUEL-STARVED LIBYAN REBELS

S.KOREAN TANKER FIRM SAMHO FILES FORBANKRUPTCY PROTECTION

CMA CGM SAYS 2ND SHIP DOCKED THURSDAY IN I.COAST

GADDAFI DODGES FUEL SANCTIONS VIA TUNISIA

PIRACY SPURS INDIA COAL BUYERS TO DIVERSIFY

BIGGER VESSELS FROM SHIPPING MAJORS TO SPARKCONSOLIDATION

LDA TO GROW DRY BULK FLEET AS SHIPS STAY CHEAP

SOMALI PIRATES FREE OIL TANKER-GREEKCOASTGUARD

CHINA TO EXPAND YANGTZE SHIPPING BY 2015 - XINHUA

MAERSK EXPECTS TO OPT FOR 10 MORE MEGA SHIPS

KAWASAKI KISEN PLANS TO BOOST DRYBULK FLEET IN 3YRS

NATO SEA CORRIDOR MOOTED TO HELP LIBYAN REBELSFULL IVORIAN COCOA EXPORT REVIVAL TO TAKE WEEKS

Q+A-CAN SHIPS AVOID DETECTION WITH SATELLITETRACKING?

FOOD TRADE WITH LIBYA REBELS HIT BY PAYMENTFEARS

SCENARIOS-MORE HAPAG-LLOYD OPTIONS FOR TUI AGTHIS TIME

PIRACY BIGGEST THREAT TO SOUTHERN AFRICASECURITY

ITALY STILL NEGLECTING PORTS-INDUSTRY GROUP

CHINA COSCO STILL PLANNING GROUP'S LISTING –PAPER

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SOMALI PIRATES SEIZE SINGAPOREAN TANKER OFF THE COAST

OF KENYA

SINGAPORE, May 2 (Reuters) - Somali pirates hijacked a Singapore-owned product tanker about 180 miles off the coast of Kenya, said portofficials and the EU's anti-piracy taskforce on Monday.

The 21,000-tonne vessel MV Gemini, operated by Singapore-basedGlory Ship Management, was seized on Saturday while on its way toKenya from Malaysia.

The ship had 25 crew members on board from South Korea, Indonesia,China and Myanmar, the EU Navfor said.

"It is likely to be taken back to the Somali coastline where it will be heldfor a ransom, although it may also be used as a mothership in order toassist attacks on other vessels," said port and logistics firm GAC.

Pirates from the lawless Horn of Africa nation continue to outwit aninternational flotilla of warships patrolling the busy trade routes.

Typically the pirates anchor the vessels off their land base until aransom is paid, at which point the vessel along with its crew and cargois released.

More than 40 percent of the world's seaborne oil supply passes throughthe Gulf of Aden and the Arabian Sea and is at risk from pirate gangs.

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VITOL SHIPS DIESEL TO FUEL-STARVED LIBYAN REBELS

LONDON, April 28 (Reuters) - Trading house Vitol has shipped at leastone cargo of diesel to Libyan rebels in a move that will ease fuelshortages in their war with government forces and potentially unlockmore Libyan oil for export to the West.

With Libya producing only a fraction of its pre-war output and with itsrefineries idle, the rebels have been looking to clinch swap deals thatinvolve selling oil and getting oil products in exchange.

A a top rebel oil official said on Sunday the rebels made about $129million from their only shipment of crude oil, which is also believed tohave been done by Vitol, but had to pay $75 million for a single cargo ofgasoline.

On Thursday, trade sources said a diesel cargo aboard the tanker Deloswas loaded in Malta, where Vitol has floating storage capacity, andshipped across the Mediterranean Sea to eastern Libya's port ofBenghazi just over a week ago.

Ship tracking data provided by Marine Traffic shows the tanker reachedTobruk on April 17, and six days later, during which time there is nosatellite information available, sailed from the port of Benghazi on April23, heading back to Malta.

"The vessel loaded ship-to-ship out of Vitol's storage and moved toTobruk over a week ago," one source said.

A Vitol spokeswoman declined to comment on the delivery.

Vitol fixed a gasoline cargo to Benghazi earlier this month but it was notclear if it arrived.

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FREIGHT MONTHLYTuesday, 03 May 2011

The Delos has a capacity of around 43,000 tonnes, just over half thesize of the crude oil cargo aboard the Equator, which Vitol lifted fromthe rebel-held east Libyan port of Marsa el Hariga three weeks ago.

When it passed through Suez earlier this month, a canal official said thetanker was carrying 80,000 tonnes, or the equivalent of 550,000barrels of oil.

Trade in oil and products has ground to virtual standstill as companies

avoid dealing with Libya for fear of infringing international sanctions.

But the United States this week took steps to boost aid to the Libyanopposition council and to approve oil exports made under its auspices,creating a loophole in U.S. sanctions that could mean millions of dollarsin revenue for rebel coffers.

Reuters reported last week supplies have already reached west Libyawhich is under government control, as companies have takenadvantage of a loophole in United Nations sanctions to deliver gasoline

via Tunisia.

Trade in Libya remains a costly and risky business.

A tanker booked for Italian oil company Eni to carry crude to Italy fromGaddafi-held territory in Libya was forced to leave empty last week asgovernment loyalists refused to allow the cargo to be loaded, tradesources said.

"They didn't want the crude to go, because they wouldn't have gottenany money for it," an industry source said on Wednesday, adding, "Theycould use it to refine into gasoline."

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S.KOREAN TANKER FIRM SAMHO FILES FOR BANKRUPTCY

PROTECTION

SEOUL, April 28 (Reuters) - A South Korean court will decide nextmonth the future of privately-held chemical tanker firm SamhoShipping, which filed for bankruptcy protection this week, the latestcasualty of the distressed global freight market.

Rising fuel prices, tumbling freight rates, piracy and now radiation fearswere expected to make this year one of the most difficult in decades forthe maritime industry, forcing some shippers out of business.

"We will start certain procedures, such as field inspection, beforedeciding whether to approve its court receivership. In the meantime, thedebtor's assets will be frozen," said a district court official in Busan onThursday.

The official added that the court would decide whether to restructure orliquidate the company's assets within a month.

A Samho Shipping official confirmed Tuesday's court filing, butdeclined to provide any reason for the action.

Samho Shipping operates a fleet of 20 oil and chemical tankers,ranging between 12,000 and 20,000 deadweight tonnes, according tothe website of its parent company, Samho Group.

The small shipping company made global headlines in January after theSouth Korean navy rescued one of its vessels, Samho Jewelry, and 21crew members hijacked by Somali pirates in the Arabian Sea.

Samho's filing comes three months after South Korea's No. 2 dry bulkshipping firm, Korea Line Corp, sought bankruptcy protection afterstruggling to stay afloat in the difficult economic environment.

Industry experts expect other shipping firms to follow, not only in SouthKorea.

The global tanker and dry bulk markets have fallen to multi-year lowsas supply outpaces demand.

Crude oil tanker earnings on the key Middle East route fell to theirlowest in over 18 months on Tuesday.

Shipowners went on a buying spree before the economic downturn two years ago and those vessels were only now coming to the market.

The global tanker fleet was seen expanding by around 7 percent this year, surpassing demand growth of only 2 percent, analysts said.

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CMA CGM SAYS 2ND SHIP DOCKED THURSDAY IN I. COAST

PARIS, April 21 (Reuters) - French container shipping group CMA CGMsaid its second ship arrived in the port of Abidjan on Thursday followingthe company's resumption of services to top cocoa producer Ivory Coast.

The arrival of the CMA CGM Cortes ship followed that on Tuesday of theCMA CGM Rabat, which has since left Abidjan, a spokeswoman for thegroup said.

Freight operators have been expecting export activity from Ivory Coastto resume this week after being halted by a political crisis in the WestAfrican state.

Belgian shipper Safmarine said on Thursday it was loading its firstcocoa exports from the country since the end of an export ban.

CMA CGM has said all its ships are equipped to handle cocoa but has sofar declined to comment on what cargo the vessels have carried.

The arrest last week of incumbent leader Laurent Gbagbo has openedthe way for the resumption of shipping, with the lifting of EuropeanUnion sanctions and of an export ban called by Alassane Ouattara, therival leader who was widely seen as the winner of recent elections.

Shippers have said that a full resumption of cocoa exports from IvoryCoast could take weeks.

The Rosa Delmas ship, which had been due to be company's secondarrival in Abidjan on Wednesday, did not call at the port, thespokeswoman said, declining to comment on the reasons.

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GADDAFI DODGES FUEL SANCTIONS VIA TUNISIA

By Jessica Donati and Emma Farge

LONDON, April 20 (Reuters) - Muammar Gaddafi's government is

circumventing international sanctions to import gasoline to westernLibya by using intermediaries who transfer the fuel between ships inTunisia.

U.N. diplomats in New York said they suspected Gaddafi's attempts toimport gasoline might consistute a violation of U.N. Security Councilsanctions banning any transactions with Libya's state-owned NationalOil Corp (NOC).

One intermediary company, Hong Kong-based Champlink, previouslyunknown to the oil trading community, has sought a transaction for fueldelivery into Libya, and European oil traders said they had beenapproached by other such firms.

"Gaddafi's people are looking to buy gasoline, via (Tunisian port) LaSkhira... and Champlink. They ship-to-ship at La Skhira," said a sourcewith direct knowledge of the situation.

In a fax, obtained by Reuters, Champlink approached trading firms withan "urgent" request stating, "we have been appointed as procurers forend user in Libya and looking for ready shipments for gasoline."

The fax proposed either shipping directly to the western Libyan port ofZawiyah, near the capital Tripoli, or to Tunisia's La Skhira, to betransferred onto a waiting tanker.

The fax, dated April 1, requests fortnightly 25,000-tonne shipments ofgasoline for the next six months, highlighting the possibility of "tanker-to-tanker transfer."

It said neither the cargo nor the end user company is on anyinternational sanctions list.



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Champlink's Bhagoo Hathey, whose signature is on the fax, confirmedin an email to Reuters last week that a shipment of 40,000 tonnesarrived at La Skhira earlier this month, but did not name the supplier orsay whether or not the gasoline had been shipped on to Libya.

In a later email he denied receiving any shipment at La Skhira.

In a separate document seen by Reuters, a company called AfrimarTunisia, which is part of Afrimar Group North Africa, sent a request on

April 12 to shippers for a vessel with capacity to carry 40,000 tonnes ofgasoline loading from Turkey to La Skhira for ship-to-ship transferthere.

The firm -- whose website www.afrimar.com shows it has a branch inTripoli -- said it had two additional cargoes available from the end ofApril at two week intervals for which it needed to charter vessels.

Afrimar did not respond to an email enquiry and was not available forcomment on Wednesday.

It is not known whether or not any shipments handled by Afrimar havereached Libya.

The United States, the United Nations and European Union imposedsanctions on the Libyan government and selected Libyan companies,including NOC, in late February and in March. It is not illegal for Libyato export or import oil or gasoline, but it is illegal to trade with NOC.

"We assume that somehow the NOC is involved at some level," aSecurity Council diplomat told Reuters.

He added that the council's Libya sanctions committee, which overseescompliance with the U.N. measures adopted on Feb. 26 and March 17,has not been informed of the issue yet.

The sanctions on Libyan firms have left both government and rebelforces seeking fuel supplies, although shipments have begun to resumeto rebel-held territory mainly in the east of the country.

While Gaddafi's government needs fuel to run its military assaults onrebels in the east and in the besieged, rebel-held western port ofMisrata, as important for the stability of his rule is avoiding discontentin the capital by ensuring supplies of basic goods, including fuel for carsand public transport.

A month ago, shortages led to increasingly vocal complaints about the

government. Residents reported long lines and even gunfights at petrolstations as people tried to stock up. The supply situation has markedlyimproved in recent weeks.

HIGH IMPORTS

Oil trading and shipping sources said at least 120,000 tonnes ofgasoline had arrived so far this month at La Skhira for ship-to-shiptransfers, a figure that amounts to nearly half of Tunisia's annualimports.

While La Skhira is used to trans-ship fuel to other countries in additionto Tunisia's domestic fuel needs, the volumes arriving there areunprecedented.

It was unclear which, if any, of the receiving vessels at La Skhira hadthen sailed for Libya.

OPEC member Libya is one of Africa's top crude oil producers but, evenin peacetime, relies on gasoline imports because of inadequate refiningcapacity.

Libyan state television said on Tuesday Tripoli was working to ensurethe arrival of several gasoline cargoes to meet demand, and that it hadrestored its refinery in Zawiyah to normal production capacity.

The sources said they know of three vessels transhipping gasoline in theport of La Skhira this month, and one of these cargoes had been pickedup by a Libya-flagged vessel.

It was not clear whether Champlink or Afrimar was involved in any ofthese transactions.

A manager at the Tunisian importing body STIR, who asked not to benamed, said he did not know of Champlink's existence, adding: "Allimports to Tunisia are done by STIR and if there are other things goingon, I am not aware of that."

A second source at STIR said Tunisia had received no gasoline importsinto La Skhira for its own domestic use in April, which could imply theshipments were onward bound for Libya.

THIRD PARTIES

Oil traders say they have been approached by several previouslyunheard of companies seeking to buy fuel to delivery into Libya. Severalsaid they refused the offer because of the risk of breaching internationalsanctions.

"I had one enquiry for 10,000 tonnes from a company I had never heardof," said one trader, adding, "It's a difficult time, because you need totriple check all counterparties and make sure they are not breachingsanctions."

Although the United Nations named Libya's NOC and severalsubsidiaries on its list of entities whose assets were frozen, traders saidthey believed fuel deliveries could still be possible since it would taketime to update sanctions lists to cover any newly emerging Libyancompanies.

"My guess is that this can't continue. Refined products is one area of vulnerability for Gaddafi, but if the governments (imposing sanctions)have to play catch up on sanctions, then there is a window," said SaketVemprala of research group Business Monitor International.

"From a military point of view, if the West can starve the government offuels it will be important."

Oil traders have previously found ways of getting around internationalsanctions including those against Iran, Iraq and South Africa. Lawyers,though, say Libyan sanctions are robust by historical standards.

"Reloading products has always been big business. You re-do the billsof lading....this is nothing new as far as the industry is concerned," saida veteran oil products trader.

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PIRACY SPURS INDIA COAL BUYERS TO DIVERSIFY

By Jackie Cowhig and Jonathan Saul

LONDON, April 15 (Reuters) - Indian coal buyers struggling with Somalipirate attacks on ships from South Africa find taking longer routes oflimited use and are turning to Australia and Russia for fuel to avoid theIndian Ocean completely.

Somali pirates, whose hijacking of oil tankers, bulk cargo ships andfishing vessels costs world trade billions of dollars a year are growingbolder .

"Given the amounts they have made recently, I would anticipate ever-better armed and trained pirate crews at the top end as well as aproliferation of wannabes at the lower end," said J. Peter Pham, Africadirector with U.S. think tank the Atlantic Council.

In addition, the use of NATO ships to enforce a U.N. embargo on Libyawill stretch anti-piracy efforts.

"NATO & EU NAVFOR were struggling with finding some slack to sendsome ships after pirates in the 'deep' Indian Ocean. After Libya, that'snot going to happen," said Michael Frodl, founder and head of maritimerisks consultancy C-LEVEL.

India has a growing, structural need for imported coal to fuel a powergeneration boom, unlike China which imports only when domesticprices fall below international levels.

India's imports could leap 70 percent in 2011/12 to 142 million tonnes,the coal minister said in March



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India's need for coal is clear but where it comes from is more flexible.For the past year 30 percent of South Africa's 60-63 million tonnes ofcoal exports have been shipped to India.

But the rising cost of piracy is forcing Indian traders to look elsewhereand this could hurt South African exports.

Somali pirates, rather than Zimbabwe's political instability, pose thebiggest threat to Southern Africa's security, South African Defence

Minister Lindiwe Sisulu said on Tuesday .

TORTURE AND MOTHERSHIPS

A fresh development this year has been pirates' capture of commercialships and crews at gunpoint and use of torture to force crews to operatethe vessels as 'motherships.'

"The use of large ships in this role gives the pirates reach across thewhole Indian Ocean and gives them an 'all-weather' capability that they

just didn't have a few months ago," said Peter Hinchliffe, secretarygeneral of the International Chamber of Shipping.

The Indian Navy has responded to the growing threat by trying to flushpirates away from India's west coast - India imports coal into the east,west and south.

The upshot is pirates are being forced to the southern tip of India -

precisely where many coal ships have diverted since February.

"I do expect to see more attacks on the Cape to Malacca as well as Capeto Bay of Bengal -- because we expect to see more attacks south ofIndia and Sri Lanka," said Frodl.

"We are having to evaluate not just the least risky routes to take fromSouth Africa to India but also the best Indian ports to discharge andalso now, where are the least risky places to pick up a vessel to begin its

voyage to South Africa," said an offical at Indian coal importerComtrade.

"The ideal ports to discharge safely are Tuticorin right at the southerntip of India, or the bigger new east coast ports like Krishnapatnam or

Gangavaram," he said.Indian importers have been diverting South African ships aroundMadagascar, away from Somalia's coast and straight for Tuticorin atIndia's southern tip.

From there, ships hug the coast and head for east and west coast Indianports.

Insider TV show on piracy : ( http://link.reuters.com/faf28r )

Several of India's trader importers said they had already boughtAustralian or Russian coal instead of South African because of piracy .

"Piracy is a real and significant cost added to South African coal -around $2 a tonne - given the quantities being shipped, this is a lot ofmoney," the Comtrade official said.

"Depending on the route, the diversions add up to 5 days voyage time,

plus the huge insurance premiums demanded and even the cost ofbunker fuel at Richards Bay is higher than at Newcastle, so we're alllooking hard at Australia and to a lesser extent, Russia," said a sourceat Coal and Oil, one of India's biggest importers.

South African exporters doubted the cost of piracy would shrink what isa key market for the country's coal.

"We've not yet had any Indian importer mention piracy as a reason notto take South African coal," one major exporter said.

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BIGGER VESSELS FROM SHIPPING MAJORS TO SPARK

CONSOLIDATION

By Randy Fabi and Harry Suhartono

SINGAPORE, April 14 (Reuters) - The global container market is poised

to consolidate in the next few years as A.P. Moller Maersk and othermajor shippers roll out bigger vessels, potentially forcing smaller rivalsto drop out of an already oversupplied market.

Medium-sized container firms warn that a move by the majors to floodthe market with mega ships could spark a "rate war" similar to 2009when the market plummeted and most firms fell into the red in one ofthe industry's worst downturns.

"We believe that... the largest shipping companies will continue toexpand the scale of economies of the industry," said Thomas Knudsen,Maersk Line's chief executive for Asia Pacific Region, at an industryconference in Singapore.

"As we drive these scales of economy, it will be difficult for the smallercarriers in these industries to compete. That will drive consolidation."

Maersk, the world's top container shipper which holds a 15 percentshare of the container market, is expanding its fleet by around 8 percent

annually to keep up with economic growth.

"We are not doing this aiming at taking market share," Maersk ChiefExecutive Nils Andersen told reporters at an industry event. He agreedthat consolidation would be the most likely outcome.

BIGGER IS BETTER

Industry leaders in the container markets have placed multi-billiondollar orders for the world's biggest vessels to meet growing demand inEurope and the United States for Chinese manufactured goods.

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Maersk in February ordered 10 of the world's largest container ships for$1.9 billion and took options on 20 more vessels of a similar size tocapitalise on expected growth on the benchmark Asia-Europe route.

Due for delivery from 2013, Maersk's 18,000 twenty-foot equivalent unit(TEU) container vessels would surpass the current largest box ship of15,000 TEUs, also owned by the company.

Switzerland-based Mediterranean Shipping Company and French

privately held CMA-CGM, which are the next two biggest containershippers after Maersk, are also looking to expand their fleet with shipsabove 10,000 TEUs, analysts said.

About 50 mega container ships with 10,000 TEU capacity or more areexpected to be delivered this year, making up nearly half of the totalnew capacity of 1.35 million TEUs due for 2011, according to the leadingindustry consultancy group Alphaliner. The orderbook showed 59 megaships for 2012.

"Bigger is better if you can fill the ship," said Randy Chen, specialassistant to the president at Taiwan-based Wan Hai Lines .

"If your ships are not full, you need to put the vessels away for the shortperiod of time to make sure the revenue covers the costs."

RATE WAR

But major shippers were unlikely to idle new ships, placing the burdenof plummeting freight rates on smaller rivals.

Spot rates on the Asia-Europe container route have tumbled by abouthalf in the last nine months, trading last week at around $978 per TEUfrom more than $1,800 in July 2010.

Although the market was expected to rebound slightly in the secondhalf, the battle for survival has already become too difficult for somecontainer firms.

Norway-based The Containership Company has announced it willsuspend its container shipping operations on poor cargo volumes andexcessive competition, industry group Alphaliner said.

Others are poised to follow.

U.S.-based container shipper Horizon Lines warned last month it could

also be forced to seek bankruptcy protection for not being able tocomply with its debt agreements.

"In container ships, a lot of companies are not making money rightnow," said Janet Lewis, shipping analyst at Macquarie Securities,adding that Chilean CSAV was also under pressure.

Last month, Standard & Poor's cut its outlook on CSAV's corporatecredit rating to "negative" from "positive" to reflect its view of thecontainer shipping company's weak business risk profile and aggressivefinancial risk profile.

VULNERABLE FIRMS

Vulnerable container companies are likely to be allowed to fall intobankruptcy instead of being saved by a larger firm through anacquisition, experts said.

"I doubt if operators have any interest in taking over an organisation.They are more interested in buying fleets, just buying the ships andhardware," Harald Serck-Hanssen, head of global shipping for DnB

Nor, told Reuters.

Industry executives said smaller companies could turn to shorter nicheroutes.

"I don't fully support the notion bigger size is necessarily better. Itdepends on your shipping network," said Eng Aik Meng, president ofAPL container shipping line, a unit of Singapore's Neptune Orient Lines.

"Shipping lines are quite flexible. There are many other trades in theworld, not just Asia-Europe and transpacific, but also Latin Americanand intra-Asia trades."

Industry officials, however, pointed out that the smaller players wouldnot be easily pushed out of the market as many are family-owned orsubsidized by governments.

"In a rate war, no single line can be the winner," said Kenichi Kuroya,

chief executive of Japan's third largest shipping firm Kawasaki KisenKaisha .

"What 2009 showed ... is that any rates quoted by the leading lines canbe matched by others in one week's time. The rate war will continueuntil the bottom line is where no single liner can bear."

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LDA TO GROW DRY BULK FLEET AS SHIPS STAY CHEAP

PARIS, April 13 (Reuters) - French shipping group Louis DreyfusArmateurs (LDA) said it could acquire more vessels on top of a recentorder with a Chinese builder as it seeks to profit from attractive prices.

LDA is pursuing a "counter-cyclical" strategy to expand its fleet duringa current downturn in freight, with the expectation the market will haverecovered when the new ships are delivered, Philippe Louis-Dreyfus, thegroup's president, told reporters.

LDA signed on Wednesday an order for eight bulk carriers from state-owned China Shipbuilding Industry Co. (CISC) in a $330 million dealfirst announced in January.

"We consider that it was the right time to go into the market," Louis-Dreyfus said following the signing ceremony. "It's not impossible thatwe will order more ships."

LDA previously sold a significant part of its bulk-carrier fleet at the peakof the market in 2007 and 2008 and is now taking advantage ofcheaper prices in a freight market weighed down by overcapacity inships, the company said.

The firm expects the freight market to see an upswing from 2013,coinciding with the start of the delivery period for its eight new bulkcarriers, scheduled for 2013-14.

The dry bulk market continues to struggle with rising fleet growth,

ordered before economic turmoil in 2008.

The closely held group, which used to be part of commodities tradinggiant Louis Dreyfus, could acquire vessels from ship operators andbuilders struggling in the current downturn, Louis-Dreyfus said.

ENERGY-EFFICIENT DESIGNS

LDA was also in talks to provide a listed industrial company with its vessels, he said, declining to give more details.

In the deal with China's CSIC, LDA is to acquire four capesize ships,which are 292 metres long and able to carry 180,000 tonnes, and fourhandymax ships, which will be 180 metres long and carry 40,000

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tonnes. The ships are to be built by CSIC shipyard Tianjin XingangShipbuilding Heavy Industry.

CSIC was created out of the former China State ShipbuildingCorporation in 1999 and is one of China's largest shipbuilding andrepair companies, with 140,000 staff.

The ships ordered by LDA will boast new energy-efficiency designs, withlarger capesizes consuming 7-8 tonnes of fuel less per day than current

models and the handymaxes using 4-5 tonnes a day less, the Frenchcompany said.

The handymax ships would also be able to dock at ports with a waterdepth of 10.5 metres, versus the 11 metres currently needed, givingthem access to more ports without towing.

In addition to bulk shipping, LDA has developed specialist partnerships,including laying subsea cables for Alcatel-Lucent , offshore seismicresearch with CGGVeritas and carrying plane parts for Airbus .

A ship belonging to LDA and Alcatel-Lucent's Alda Marine joint venturehas been chartered to take part in an ongoing search for flight recordersand debris from a jet that crashed in the sea in 2009 during a Rio deJaneiro-Paris flight, the shipping company said.

The specialist activities are partly a way for LDA to offset market swingsin its traditional bulk business, it said.

LDA is considering resuming port calls in northern Japan, afterrestricting its vessels to the south following the earthquake, tsunamiand nuclear crisis, Louis-Dreyfus added.

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SOMALI PIRATES FREE OIL TANKER-GREEK COASTGUARD

By Lefteris Papadimas and Mohamed Ahmed

ATHENS/MOGADISHU, April 8 (Reuters) - Somali pirates have freed aGreek-owned oil tanker seized two months ago off Oman, the Greekcoastguard and pirates said on Friday.

Shipping industry sources welcomed the news but said pirate attackswere getting out of control in the region, threatening internationaltrade.

Analysts say more than 40 percent of the world's seaborne oil supplypasses through the Gulf of Aden and the Arabian Sea and is at risk frompirate gangs.

The Greek-owned and flagged 319,000-dwt tanker, Irene SL, with sevenGreeks, 17 Filipinos and one Georgian aboard, was one of three oiltankers hijacked by pirates this year.

The tanker's Greece-based manager, Enesel, said the tanker wasreleased on Thursday but declined to say if a ransom was paid or giveany detail on the release for security reasons.

The pirates told Reuters they received a ransom payment of $13.5million before freeing the vessel.

"We received the agreed ransom amount of $13.5 million... The ship hassailed away," a pirate who gave his name as Abdiwali said by phonefrom Lebed, a village on Somalia's Indian Ocean coast near Hobyo, apirate lair.

"Somali pirates have freed the tanker 'Irene SL' which had beencaptured on Feb 9 while sailing with crude oil 200 nautical miles off thecoast of Oman," the coastguard statement said.

"According to the owner, the crew of 25, of whom seven are Greeks, arewell and the ship continues on its voyage to Durban, South Africa," itadded.

Pirates gangs, who are making tens of millions of dollars in ransoms,are able to stay out at sea for longer periods and in tougher weatherconditions, by hijacking commercial ships and using them asmotherships to launch attacks.

"Hijacked oil tankers have tended to be released for larger ransoms.Not only is the cargo seen as valuable, but the political weight of an oiltanker is also seen as high value," said John Drake, senior riskconsultant with security firm AKE.

The U.S.-bound vessel was carrying about 2 million barrels of Kuwaiticrude, worth $200 million at market prices when it was seized.

Irene SL's crude oil cargo represented 20 percent of total U.S. daily

crude oil imports, or 5 percent of total daily world seaborne oil supply,said INTERTANKO, an association whose members own the majority ofthe world's tanker fleet.

Despite successful efforts to quell attacks in the Gulf of Aden, navieshave been unable to contain piracy in the Indian Ocean because of the

vast distances involved.

INTERTANKO welcomed the release of the Irene SL and its crew butsaid no ship was safe in the Indian Ocean from the risk of attack, withcrews also increasingly facing torture by gangs.

"Piracy is out of control," said INTERTANKO chairman GrahamWestgarth. "International trade is threatened. Governments need toprotect the world's shipping lanes by showing political will, not politicalindifference."

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CHINA TO EXPAND YANGTZE SHIPPING BY 2015 - XINHUA

BEIJING, May 3 (Reuters) - Bulk freighters will be able to avoidcongestion around Shanghai and sail up China's Yangtze River as far asNanjing under a $2.7 billion plan to deepen the navigation channel by2015, Xinhua News Agency reported on Tuesday.

The river would be navigable for ships up to 50,000 tonnes, whichmeans handymax and supramax dry bulk carriers will be able to unloadtheir cargoes further upstream in Jiangsu province, giving moremanufacturers direct access to imported commodities, as well as easinglogistics for exports, it said.

Nanjing is already a major destination for commodities shipments,chiefly iron ore. Its customs office handled imports of 17.5 milliontonnes of iron ore in the first three months of this year, the third-highestin the country, after Qingdao and Shijiazhuang.

Huge supply bottlenecks have affected imports of coal, grains and otherdry bulk goods into China, which has turned into the principle buyer formany raw materials thanks to rapid economic growth.

The 18 billion yuan ($2.7 billion) project to deepen the navigationchannel would be funded by the Ministry of Transport and thegovernment of Jiangsu province, Xinhua said.

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MAERSK EXPECTS TO OPT FOR 10 MORE MEGA SHIPS

By Randy Fabi

SINGAPORE, April 13 (Reuters) - Denmark's A.P. Moller-Maerskexpects to exercise its option in June to order 10 more huge containerships to be built by Daewoo Shipbuilding & Marine Engineering at acost of $1.9 billion.

The world's largest container firm in February outlined plans to order 1018,000 twenty-foot equivalent unit container ships with the option foranother 20 similar vessels to capitalise on expected growth on Asia-Europe trade. Each vessel costs $190 million.

"The first decision will come in June and we do expect we will exercisethat option for an additional 10," Maersk's Chief Executive NilsAndersen told reporters after an industry event in Singapore onWednesday.

Maersk will decide later in the year whether to exercise a further optionfor 10 mega ships. A senior Maersk official in February said the optionon the final 10 vessels was a long shot.



7


The new ships will add to Maersk Line's current fleet of more than 600 vessels and help it keep its industry-leading market position.

The Triple-E class vessels, measuring 400 metres (1,312 feet) long, 59metres wide and 73 metres tall, will be the world's largest containerships.

They will be 16 percent bigger in capacity than the current largest shipsin Maersk's fleet, the E-class.

CONSOLIDATION INEVITABLE

Maersk was expanding its fleet by around 8 percent annually to keep upwith global demand growth and not to steal market share, althoughconsolidation was inevitable, Andersen said.

The Danish firm looked to grow its operations in Latin America byplacing 16 container vessels to trade in the region starting this month.

Maersk was also looking to expand in Africa, although piracy was alingering concern especially along the eastern coast.

Andersen said the piracy problem was still not getting enoughattention, particularly with more than 700 people still being heldhostage in Somalia.

"Sometimes I wonder if two jumbo jets were hijacked, parkedsomewhere and people were being held hostages under a lot of visibility

whether this situation would not be resolved," he said.

The United States in February sentenced a Somali pirate to 33 years andnine months in prison for his role in the 2009 seizure of the MaerskAlabama container ship, in which kidnapped Captain Richard Phillipswas rescued while three captors were shot dead by sailors on another

vessel.

Maersk has placed armed guards on some of its ships that travelthrough the Gulf of Aden, Andersen said.

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KAWASAKI KISEN PLANS TO BOOST DRYBULK FLEET IN 3 YRS

SINGAPORE, April 12 (Reuters) - Japan's third largest shippingcompany Kawasaki Kisen Kaisha plans to increase its drybulk fleet to300 vessels in the next three years from 214 currently to tap into the

growing demand of raw materials from China, Japan and India.Chief Executive Kenichi Kuroya told Reuters the firm was also planningto lay up as many as six of its 74 car carrier vessels due to the severedisruptions to Japan's automotive industry after the devastatingearthquake and tsunami last month.

"We have about 214 bulk carriers. In three years time, we plan toincrease it to 300," Kuroya said in an interview at the firm's office inSingapore.

"We are planning to lay up between 5-6 vessels because we cannotexpect the immediate recovery of the production line," he said, referringto production from Japan's major automakers such as Toyota , Nissanand Honda .

He also said that Kawasaki Kisen might consider acquiring one or twoChinese shipping firms to take advantage of the Japan-China trade line,which is the busiest intra-Asia route.

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NATO SEA CORRIDOR MOOTED TO HELP LIBYAN REBELS

By Jonathan Saul

LONDON, April 15 (Reuters) - NATO is considering creating a seacorridor backed by naval vessels to enable merchant ships to boosttrade with Libyan rebels and speed up humanitarian aid.

Fighting between Libyan armed forces and rebels who are trying tooverthrow Muammar Gaddafi, as well as sanctions against the Libyan

leader's government, have brought seaborne trade to a virtual standstillin recent weeks.

NATO has been enforcing a U.N. arms embargo on Gaddafi ininternational waters only. Merchant ships face a risk of attack insideLibyan waters due to the violence.

Two shipping sources said on Friday they were aware of proposals tocreate a secure shipping lane to Libya, though security sources said

NATO would not be able to protect ships in port.

"Contingency planning has been done on this at NATO and in theEuropean Union," British Foreign Secretary William Hague told Reuterson Thursday when asked about the proposal.

Hague said a lot of aid had been delivered to the besieged Western cityof Misrata without a military presence, which was "always the firstoption".

"It's only if that failed and the United Nations ... recommended thatmilitary assistance was required that then that would come into play,"he said at a NATO conference in Berlin.

Aid groups have urged shipping companies to resume services to rebel-held eastern ports including Benghazi to bring in aid, and the anti-Gaddafi Libyan National Council (LNC) has said it must keep exportingoil to boost minimal cash reserves.

"The possibility of protecting merchant shipping travelling to and fromports under the control of the (LNC) is part of the broader strategywhich the coalition has adopted to facilitate the 'normalisation' of thestatus of rebels' interim authority on the world stage," said J. PeterPham, Africa director with U.S. think tank the Atlantic Council.

"In theory, escorts or the designation of protected transit corridors ...should lower, if not eliminate altogether the need for war risk pricedifferentials. This, in turn, should make it easier for the rebel authoritiesto transact business."

Jakob Larsen, maritime security officer with BIMCO, the world's largestprivate shipowners' association, said a merchant ship had beenattacked by Libyan coast guard vessels last month.

"As a precautionary measure, close protection of shipping would bedesirable," he said. "We are still waiting clearer directions as to which

cargoes can legitimately be offloaded in Libya."PORT RISKS

A NATO official said the organisation had drafted notices to marinersgiving clear indications on "how to behave in the maritime jointoperations area".

"Our task is to enforce the arms embargo, not to protect commercialships," the official said.

Earlier this week, the first signs of seaborne trade emerged with Qatarmarketing 1 million barrels of Libyan crude oil on behalf of rebels, anddelivering four shipments of petroleum products. Shipping sources saidthere was speculation over whether the shipments had received navalescorts.

Last month, London's marine insurance market added Libya to its list ofhigh risk areas.

"The biggest concerns for underwriters are whether the ports are openor not, who is there to receive the ship and how secure it is when inport," said Neil Roberts of the Lloyd's Market Association, whichrepresents the interests of all underwriting businesses in the Lloyd'smarket.

Maritime security sources said a NATO corridor could not provide coverat ports as the mission would not risk putt ing troops on land insideLibya.

"They may have had some kind of nominal escort but only up to portlimits," said John Dalby, chief executive with maritime riskmanagement specialists MRM.



8


"The vulnerable point is actually... in the port and NATO cannot provideany protection there. Air cover will not prevent ground attacks by eitherside on a ship in the port."

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FULL IVORIAN COCOA EXPORT REVIVAL TO TAKE WEEKS

By Ange Aboa

ABIDJAN, April 19 (Reuters) - Ivory Coast cocoa exports will reachnormal volumes no sooner than the end of April as authorities iron outnew tax and customs procedures, banks reopen and security improves,shippers said on Tuesday.

The world's top grower of cocoa is slowly recovering from a violent post-election power struggle, which ended last week with the arrest offormer President Laurent Gbagbo.

"Exports will not fully restart until the end of the month because weneed to fix a lot of things in terms of logistics, finances and so on," saidthe director of an export company based in Abidjan, who asked not tobe named.

"Everyone needs to reorganize, people need to return to work, we needto quality check the stockpiles, etc., before we can start exporting," hesaid.

Between 450,000 and 500,000 tonnes of cocoa are stockpiled at theWest African country's two main ports -- or more than a third of theannual crop -- after more than two months during which exports werehalted by the conflict.

New President Alassane Ouattara said last week that he was pushingfor a swift revival of the cocoa sector -- the country's main foreignrevenue earner -- but industry players have said they are still waiting forsecurity to improve, banks to reopen, and export procedures to beclarified.

"The port is open, so there is improvement in the situation, but stillpeople have problems getting to work as it's d ifficult to get fuel. Thereare queues to fill your car," said Didier Willemse, head of commoditysales at Belgian shipping company Safmarine.

"We have planned a vessel tomorrow for Abidjan, subject toconfirmation that customs are working."

Sonny Dahl, director of West Africa services at Maersk Line, a unit ofA.P. Moller Maersk, also said exporters were not ready to load generaldry cargo, including cocoa, as customs at ports had not fully resumed.

"We do hope that the first dry loadings, including cocoa, will be ready toload onboard our vessels scheduled out of San Pedro next weekend andAbidjan next week on Wednesday," Dahl said.

A port official in Abidjan told Reuters four ships had arrived in port, andthree more were expected on Wednesday.

COCOA BACKLOG

Exporters said that once shipments of beans resume, it will take aroundthree months to clear the backlog.

"Since Friday we have been talking to the new authorities about theconditions required for restarting exports, because we want to move

quickly and there is work to be done," another director of a Europeanexport company in Abidjan said.

"We need to streamline the bureaucratic process, but there are otherissues like customs, the port, etc. We're seriously discussingeverything," he said.

"It will take at least three months to export everything because we canonly export 120,000 to 150,000 tonnes per month from the ports of SanPedro and Abidjan. Even in December, the peak of exports when thereare huge volumes of beans to export, the average is 120,000 tonnes permonth."

In western Ivory Coast, where some of the worst violence of the powerstruggle occurred, cocoa industry players said security remained one oftheir chief concerns.

"There are still problems with security here and in the villages becauseof the (pro-Ouattara) FRCI soldiers," said the director of an exportcompany based in San Pedro. "It does not inspire confidence to knowthere are armed men who can rob you and there is no one you can

complain to. There is no police, there is no gendarmerie. We need aminimum of security."

Cocoa farmers in parts of western Ivory Coast told Reuters earlier thismonth that many remained in hiding away from their plantations due tofears of further violence, keeping them from harvesting the slow trickleof mid-crop beans.

Exporters said, however, the industry could revive in the coming weeksas the rest of the economy restarts and that the stockpiled cocoaappeared in good condition.

"We really think we'll be up and running no sooner than the end of themonth," said the San Pedro-based export director. "There's lots to do.The banks need to reopen, insurance, administration, and so on, beforewe can start up. Without all this, we can do nothing."

"The cocoa that is stockpiled is still good, but we're still evaluating withthe experts before making a final determination," he said.

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Q+A-CAN SHIPS AVOID DETECTION WITH SATELLITE TRACKING?

By Jonathan Saul

LONDON, April 26 (Reuters) - An international convention requiresmerchant ships to have a satellite tracking device on board whentravelling at sea.

A ship's captain has the discretion to switch the device off under certaincircumstances, which has enabled ships to avoid being detected.

Reuters has revealed that Muammar Gaddafi's government is importinggasoline into western Libya by using intermediaries who transfer thefuel between ships in Tunisia. Ships have turned off their satellitetrackers during the journeys.

Below are some questions and answers on how tracking works.

WHAT DOES THE CONVENTION INVOLVE?

U.N. agency the International Maritime Organization adopted theconvention, which required vessels to be fitted with devices by the endof 2004 in a move initially aimed at ensuring greater safety at sea.

Ships need to carry automatic identification systems (AIS), which collectinformation by satellite about the type of vessel, its position, course,speed, navigational status and other safety-related information toonshore stations or authorities, other ships and aircraft.

AIS tracking systems must be "in operation at all times, except whereinternational agreements, rules or standards provide for the protectionof navigational information", the regulation states.

"If in the view of the (ship's) master it would be safer to switch it off,then he can do so provided he informs the flag state of his reasoning,"

said Peter Hinchliffe, secretary general of the International Chamber ofShipping, an association, which represents about 80 percent of theglobal industry.

IS THIS INFORMATION WIDELY AVAILABLE?

AIS data is openly available on numerous websites, which has beenseen as a potential security threat to merchant ships.

"We still have concerns that there is information in the AIS transmissionthat is commercially sensitive, especially for ships in the spot market,"Hinchliffe said.



9


Some maritime security analysts have argued this has enabled piratesto keep track of vessels at sea as attacks on merchant shipping continueto escalate.

"Most masters switch it off when they are around the Horn of Africabecause of the pirates there," said John Dalby, chief executive withmaritime risk management specialists MRM.

WHY DO SHIPS SWICH OFF THEIR TRACKERS

Shipping sources say commercial vessels can easily switch off their AISsystems in order to conceal their end destinations.

This has been seen in the past year, with tankers delivering petroleumproducts to Iran despite western sanctions on the trade with the IslamicRepublic, sources say.

"The AIS system relies 100 percent on the vessel transmittinginformation," said MRM's Dalby.

"If it does not transmit information, there is no tracking of it and no wayof knowing where it is, which is the easiest way of avoiding detection."

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FOOD TRADE WITH LIBYA REBELS HIT BY PAYMENT FEARS

By Michael Hogan and Jonathan Saul

HAMBURG/LONDON, April 27 (Reuters) - Food imports into Libya'srebel-held east are being hit as the interim national council struggles toestablish lines of credit and foreign traders fear they will not be paid.

Libya was a net importer of food before heavy fighting between rebelsand leader Muammar Gaddafi's forces interrupted supply chains.

This week the World Food Programme (WFP) said, "A recent inter-agency mission found that food stocks in the eastern parts of thecountry are not being replenished at normal rates and the currentstocks are enough for up to two months only."

"If the import capacity is not restored quickly, this could lead to amassive food availability problem for the entire population of easternLibya," the U.N. agency warned.

European dealers said transactions with east Libya were not feasible formost private grain trade houses.

"I am not accepting the risk of local delivery to Libya and selling to therebels. Which court would you go to if you were not paid? It is anunknown factor," one European trader said.

Another said rebels had little expertise in food logistics.

"The rebels could get flour by paying in advance, which they are notwilling to do," the second trader said. "They could also charter shipsthemselves, buy the wheat at origin and ship it themselves. They do notseem to be doing this either."

Analysts said the rebels still lack relationships with financialinstitutions.

"It is rather difficult to extend credit to someone who is not fullyplugged into the international financial system or into singular nationalfinancial systems," said J. Peter Pham, Africa director with U.S. think-tank the Atlantic Council.

"Until those very basic fundamentals are addressed, there is going to behesitancy on the part of the trading community to do business withthem."

Meanwhile, stores and supermarkets in Benghazi remain well-stockedwith food items such as bread, cheese and milk, but storeowners andresidents say prices of some items have gone up sharply since theuprising began.

"These are the hardest days we've had so far, because we cannot getthe goods we want when we want them," Saleh Awad, a grocery storeowner in Benghazi, told Reuters.

SHIPPING DISRUPTED

The WFP has urged commercial shipping lines to resume operations toeastern ports of Benghazi and Tobruk to facilitate humanitarian importsand commercial imports of basic items.

"The sooner the free flow of goods is resumed, the sooner the foodsecurity of that country will be improved," a WFP spokesman said onWednesday.

Traders said it was difficult to ship anything by sea into Libya at themoment.

"Libya is seeking to buy soft wheat," said a trader used to dealing withthe country. "We did not resume exports to this country, because it'salmost impossible to find ships and insurance for this destination."

Another trader said, "Even if things are quiet when the contracts aresigned, artillery shells could be coming down in the ports when the

vessel actually arrives in two weeks time."

Shipping sources also have said a U.N. arms embargo on Gaddafienforced by NATO at sea is disrupting other shipping activity. Libyancoast guard and port officials said it was strangling vital seabornetrade.

"As in any armed conflict there will always be a risk if one gets in the

way of the fighting parties," said Jakob Larsen, maritime security officerwith BIMCO, the world's largest private shipowners' association.

"Until now all we have received is directions on how to help the naviesachieve their objectives, but we have not seen any measures to make itmore transparent to the shipping industry what is actually going on," headded.

Traders said food imports in Gaddafi-controlled west Libya wereaffected by trade sanctions on the government.

Large purchases of flour for west Libya have been made in recent weeksfor shipment to Tunisia and truck transport to Libya, European graintraders said.

"Libyan flour mills seem to be out of operation, and so the state-ownedLibyan importing companies in Tripoli are buying finished flour readyfor baking on the international market," a trader said.

"There are problems on the payment front as no grain trading houseswant to have the word 'Libya' on the documents. Letters of credit for thesales are being opened by banks outside Libya, notably in Tunisia."

The WFP said on Tuesday a second chartered aid ship had reached thebesieged western city of Misrata. It has also set up a humanitariancorridor into the west for civilians in cities including Tripoli.

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SCENARIOS-MORE HAPAG-LLOYD OPTIONS FOR T UI AG THIS

TIME

By Victoria Bryan and Matt Scuffham

FRANKFURT/LONDON, April 28 (Reuters) - Germany's TUI AG , theowner of Europe's largest travel firm TUI Travel , is seeking to exit itsstake in container shipping group Hapag-Lloyd to focus on tourismactivities.

With IPO markets volatile and its last attempt at selling off Hapag-Lloyd in 2009 not going to plan, forcing TUI to keep a larger stake thanit envisaged, what are its options this time around?

IPO

TUI's board had approved plans for a partial IPO of Hapag-Lloyd inMarch. However, the Albert Ballin consortium, which is made up ofGerman investors and owns 50.2 percent of the shipping group, said

just over two weeks later that it was postponing the decision due tomarket uncertainty following the Japan earthquake and North Africanuprisings.



10


"Who is going to float a business in this market? Why would you do it?You might get a float away but it's the aftermarket," a source close tothe supervisory board told Reuters.

With several big IPOs pulled or delayed recently, investors areexpecting discount on prices.

"If you do want to do it in this environment you're going to have to takea big haircut on the price because someone's got to bear the risk. The

view is if you don't need to do it, don't do it," the source said.

With time running away, it now seems likely that any IPO would bedelayed until the second half of the year.

"The conditions for a potential IPO have improved since the disaster inJapan, but clearly a divestment of the remaining stake in Hapag-Lloyd

via a sale to a strategic/financial investor continues to be on the cards,"Commerzbank analyst Johannes Braun said.

ANCHOR INVESTOR

In a dual-track process, TUI is also working on finding an investor for itsstake in Hapag-Lloyd.

TUI has already announced that it will sell an 11.3 percent stake inHapag-Lloyd to Albert Ballin in a 315 million euro ($467 million) deal,

thus cutting its stake to 38.4 percent.Among the options for TUI's remaining stake could be a buyer from asovereign wealth fund.

The group is in talks with the state of Oman and Chinese logisticscompany HNA and has asked that binding bids be submitted by lateMay, according to sources.

TUI has declined to comment on the identity of the buyers, stating onlythat it is in talks with potential investors.

"As the crises in North Africa and the tsunami in Japan have weakenedthe stock market environment, TUI might get higher proceeds from theselling process," Silvia Quandt analyst Stefan Kick wrote in a recentresearch note.

2012 OPTION

If all else fails, TUI has an option to sell its stake in Hapag-Lloyd to theAlbert Ballin consortium from Jan. 1, 2012.

When finalising the Hapag-Lloyd deal in 2009, TUI and the AlbertBallin consortium agreed not only first right of refusal on the stake, butalso an obligation for the consortium to acquire the stake.

A source at TUI said this option meant the group was relaxed about theHapag-Lloyd stake and could take its time to ensure it got the rightprice, whether via IPO or a sale.

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PIRACY BIGGEST THREAT TO SOUTHERN AFRICA SECURITY

By Wendell Roelf

CAPE TOWN, April 12 (Reuters) - South Africa believes Somali pirates,and not political instability in Zimbabwe, pose the biggest threat tosecurity in southern Africa, its defence minister said on Tuesday.

The pirates, spurred on by multi-million-dollar ransoms paid to release

hijacked vessels along a key oil shipping route, have struck furthersouth, threatening regional commerce and trade from Africa's largesteconomy, Lindiwe Sisulu told Reuters.

"At the moment, we think that the issue of piracy is beginning to be aserious problem to us ... We have defined maritime security as a threatto the region," Sisulu said in an interview.

South Africa, which operates the continent's most sophisticated navy,has already deployed the German-built frigate SAS Mendi to patrol theMozambique channel in the Indian Ocean as a deterrent following apirate incursion close to South African territorial waters late last year.

"A great deal of our trade takes place on the sea and we've got to makesure we protect that," Sisulu said.

Analysts say more than 40 percent of the world's seaborne oil supplypasses through the Gulf of Aden and the Arabian Sea and is at risk from

pirate gangs.Southern Africa is a major supplier of raw materials for the world and a

vital source of the commodities that help power China's economicengine.

Sisulu said a military strategy, which would flesh out the operationaland funding requirements to deal with piracy, would be presented tocabinet within a month, following mounting pressure from theEuropean Union to boost the global fight.

"We are responding first and foremost in our national interest andsecondly in support of international effort."

South Africa, one of Africa's largest peace-keeping contributors on thecontinent with troops in the Democratic Republic of Congo, Sudan andCentral African Republic, intends to go the market next year to tenderfor urgently needed military transport aircraft, Sisulu said.

Its current airlift capacity is constrained after it cancelled a $5.2 billioncontract to buy eight Airbus A400M aircraft due to rising costs anddelivery delays. "We don't have one and we depend on renting theaircraft," she said.

Sisulu did not rule out humanitarian or peace-keeping assistance toIvory Coast, as the west African nation sought to rebuild in theaftermath of a violent power struggle following a disputed election.

South Africa's dispatch of a naval vessel to waters off the Ivory Coastworried some African leaders, who saw it as an unwarranted projectionof force. The ship has returned to South Africa.

"Should at any point we be asked to contribute to creating any stabilityin Cote d'Ivoire we would be happy to do that," Sisulu said.

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ITALY STILL NEGLECTING PORTS-INDUSTRY GROUP

By Catherine Hornby

ROME, April 13 (Reuters) - Italy is neglecting its ports and failing toboost investments for rail and road links that are urgently needed tocompete with European rivals, the head of ports association Assoportisaid on Wednesday.

Francesco Nerli, president of the group that represents the country'sbiggest ports, said Italian ports need at least 300 million euros ofannual public funding for the next 10 years to help improve logistics andconnections with the rest of Europe.

http://r.reuters.com/xyg98r



11


"We have been discussing this for two and a half years and so far thegovernment has done nothing," Nerli said in an interview. "Publicinvestments in ports are blocked in our country," he said.

He said Italian ports were asking for about 3 percent of the roughly 9billion euros that the state receives every year from value-added tax(VAT) revenues from ports to be set aside for investments, mainly inroad and rail links.

Italy's centre-right government presented some reform measures last year but was criticised by port authorities and industry groups for notplanning any substantial changes or progress in boosting ports'financial autonomy.

Italy's ports, which contribute more than 30 billion euros to itseconomy, are often bypassed by ships coming through the Suez canalwith Asian goods because of slower services than northern rivals andbecause they are not as well equipped for big cargoes.

Ports in northern Italy such as Genoa are no further from the heart ofGermany, Europe's biggest market, than Europe's largest port inRotterdam, but poorer connections make them less attractive transitpoints.

COMPETITION

Rotterdam port is investing 4 billion euros over the next few years on a

massive land reclamation project and on upgrading facilities, and isalso urging the Dutch government to improve transport in the port area.

Nerli said public funding for Italian ports would help stimulate privateinvestments, which he said were normally focused on improving privatefacilities within the harbours.

The infrastructure arm of Intesa Sanpaolo is interested in investing inItalian ports, potentially alongside Unicredit and Italian state holdingCDP, its chief executive said in March.

Nerli said cargo volumes at Italian ports were picking up after a declinein the economic downturn, which knocked container volumes by about10 percent in 2009.

But he said the pick-up was slow and volumes had not yet returned to2007 highs, while turmoil in North Africa added to an uncertain outlookfor 2011.

Italy handles roughly 15 percent of Europe's container traffic annually,compared with more than 50 percent by northern European ports,according to industry figures.

Nerli said the cost of labour was also making southern ports such asGioia Tauro in Calabria uncompetitive with other ports in theMediterranean region, including ports in North Africa.

Lowering this cost, and bringing fuel taxes on ports in line withEuropean standards, would help boost competitivity in the south, hesaid.

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CHINA COSCO STILL PLANNING GROUP'S LISTING -PAPER

SHANGHAI, April 15 (Reuters) - China COSCO Group, the country's topshipping conglomerate, is still working on plans for a group listing, theShanghai Securities News said on Friday, citing a top executive, thoughno timetable was given.

A listing of state-owned COSCO Group, the parent company of CoscoHoldings Co Ltd , has always been on the cards and plans are stillunderway, COSCO's Chairman Wei Jiafu said in an interview with thepaper.

Wei also said COSCO expected the global container shipping market togrow between 8-10 percent in 2011 to reach 150 million twenty-footequivalent units.

COSCO also expects global demand for dry bulk shipping to growaround 6 percent this year, buoyed by China's strong demand for ironore, coal and grains, but overall supply to rise 14 percent.

Wei said last month that he saw huge challenges in the dry bulkshipping market and has urged shipping companies to be rational inexpanding capacity.

-----------------------------------------------------------------------------------

Source: Reuters Pictures

Panama-flagged cargo ship MV Asphalt Venture docks at the Kenyan Port ofMombasa April 28, 2011. Pirates freed the ship and some of its crew after aransom was paid but they continue to hold seven Indian seafarers hostage,reportedly in retaliation for the arrest of Somali pirates by the Indian Navy inrecent weeks. The vessel was en route to Durban when it was seized by armedpirates on September 28, 2010. REUTERS/Joseph Okanga



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