International Association of Marine and Shipping Professionls

NEWS BULLETIN

25 31 Mar 2019

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About I.A.M.S.P

The International Association of Marine and Shipping Professionals (IAMSP) is the

professional body for Marine and Shipping professionals world-wide, formed in 2015. The

association is an independent, non-political organization aims to:

Contribute to the promotion and protection of maritime activities of the shipping industry,

the study of their development opportunities and more generally everything concerning

these activities.

Promote the development of occupations related to maritime and shipping; serve as a point

of contact and effective term for the business relationship with the shipping industry

(charter brokers, traders, shipping agents, Marine surveyors, ship inspectors, ship-

managers, sailors, and stevedores etc.).

Ensuring the representation of its members to the institutions, national and international

organizations as well as with governments, communities and professional groups while

promoting the exchange of information, skills and the exchange of experience.

Develop the partnership relations sponsorship, collaboration between IAMSP and other

associations, companies, national and international organizations involved in activities

related to Maritimes and shipping.

Contribute to the update and improvement of professional knowledge of its members

and raise their skill levels to international standards.

Progress towards a comprehensive and integrated view of all marine areas and the

activities and resources related to the sea.

Container shipping: IMO 2020 = M&A?

31/03/2019

Financially vulnerable carriers could be pushed into M&A by the extra costs associated with

the new low-sulphur fuel law. If that happens, how might competition on key trades be

affected?

Most of the major carriers have now reported full-year 2018 financial results and thanks to a

4Q18 rising trend in demand and freight rates, boosted by the sugar-rush of the threatened

US tariffs, the industry was able to return a small profit in the region of $1.5 billion, as

Welcome as that second-half revival was, attention is now focused on the prospects for this

year and beyond that what impact the new IMO low-sulphur fuel regulation will have on

profitability in 2020.

-

score shows that many are still reside in the so-

As the deadline for the IMO 2020 mandate draws nearer carriers are inevitably getting

jittery about its overall impact. Are they in a position to deal with myriad of extra associated

costs such as unrecoverable BAFs, capex costs to install scrubbers and extra funding

requirement for bunker credit, among others?

Without wanting to be too alarmist, there is the potential for IMO 2020 to inspire another

major carrier bankruptcy and/or trigger more defensive M&A. It could turn out that the IMO

will inadvertently push industry consolidation along, closer to where it needs to be in order

to achieve sustainable profitability.

The last round of M&A that started with the merger of Chinese carriers COSCO and CSCL in

2016 and concluded with the integration of the Japanese carriers NYK, MOL and K Line into

the Ocean Network Express (ONE) in 1Q18, made some headway in the consolidation

process to the extent that the leading seven carriers now control approximately three-

quarters

However, while previous M&A has handed near-full control of the global market to a

handful of lines, there is still varying degrees of competition at a trade-route level.

Significantly, that is the case in some of main large-volume and revenue generating East-

West routes.

Using the Herfindahl-Hirschman Index (HHI) method (see footnotes in Figure 1 for more

details) only one trade in our sample, the relatively small Europe-East Coast South America

southbound trade resid -

Figure 1: Herfindahl-Hirschman Index (HHI) for selected container trades, based on

effective headhaul capacity, January 2019

Notes:

Based on effective capacity, treating subsidiaries as part of the parent i.e. APL is

included within CMA CGM; No accounting for slot charter agreements; agreements;

The Herfindahl-Hirschman Index (HHI) is a commonly accepted measure of market

concentration, calculated by squaring the market share (in this case the effective headhaul

capacity as a proxy) of each company competing in a market, and then summing the

resulting numbers, ranging from close to zero to 10,000 (indicative of a monopoly).

The higher the number the lower the competition, or more concentrated a market is

considered to be.

Key: 2,500 = highly concentrated marketplace

Source: Drewry Maritime Research

The problem for carriers is that in competitive markets they are subject to the vagaries of

supply and demand, which is often outside their control. Conversely, in a concentrated

market with few rivals carriers do not seem to live or die by those fundamental economic

principles so much.

Figures 2 and 3 show the different utilisation and spot rate monthly trends during 2018 for

one competitive trade (Asia-North Europe) and one highly concentrated trade (Europe-

ECSA).

Figure 2: Westbound Asia to North Europe utilisation v rates (monthly averages)

Sources: Drewry Maritime Research; Drewry Supply Chain Advisors Container Freight Rate Insight

Figure 3: Southbound Europe to East Coast South America utilisation v rates (monthly

averages)

Sources: Drewry Maritime Research; Drewry Supply Chain Advisors Container Freight Rate Insight

So, bearing in mind the potential for more IMO-induced consolidation, what would it take to

budge some of those key East-West trades out of the competitive zone and into new

territory that might allow them to become price givers rather than takers?

To play this game we need to consider some plausible transactions. The possibility of any

takeovers among the top 7 lines is remote in our opinion, primarily due to the likelihood of

such deals being shot down by competition regulators.

However, in our analysis we found that without at least one such deal the HHI needle barely

moved so we have included a combined CMA CGM and Hapag-Lloyd entity as there was

interest from the French carrier last year. The other fantasy transactions we have used are

COSCO buying PIL and other deals based on common nationality; bringing together the

Taiwanese lines Evergreen, Yang Ming and Wan Hai, while also pairing HMM and SM Line

from South Korea.

The next step is to use our base trade capacity data from January 2019 and see what

happens when we combine all of those carriers. For the purpose of this analysis we have

limited it to the Asia-North Europe and Asia-West Coast North America trades. It should be

noted that capacity shares will be different by the time IMO 2020 is implemented as carriers

will have taken delivery of new ships and moved others around so some caution should be

applied.

The result of this academic pursuit is that even these deals (which we think stretch the

realms of plausibility) would only be sufficient to move these trades into the moderately

concentrated zone of the HHI. Carriers would gain some modicum of pricing power, but

certainly not enough to be able call the shots.

Table 1: HHI by trade after "plausible" M&A

Source: Drewry Maritime Research

Our view

Even if IMO 2020 does spur another round of industry consolidation, the chances are that

there will still be enough carriers left to prevent the big trades from being highly

concentrated. It will require a couple of highly unlikely mega M&As to really move the dial.

[Drewry Container Insight Weekly]

Marine pollution: Study finds white sharks with high levels of mercury, arsenic and lead in

their blood

31/03/2019

Researchers found high concentrations of mercury, arsenic, and lead, in blood samples

obtained from Great white sharks in South Africa.

The samples had levels that would be considered toxic to many animals. However, the study

found no apparent negative consequences of these heavy metals on several health

parameters measured in the sharks, including body condition, total leukocytes, and

granulocyte to lymphocyte ratios, suggesting no adverse effects on their immune system.

author and senior lecturer at the University of Miami (UM).

-accumulate toxins in their tissues via the food web from the

-author and research associate professor at

concentrations of toxins, such as mercury and arsenic, in the blood of white sharks, they can

For the study, 43 great white sharks were captured and sampled in South Africa, as part of

raised on a specialized platform, while blood samples and body measurements were taken

by biologists before the sharks were tagged and re

leader and founding chairman of Ocearch.

metals. This study provides the first published account of blood concentrations of heavy

metals in wild sharks. The data is instrumental in creating a baseline and reference for levels

of heavy metals present in the blood of white sharks in South Africa. Considering many

populations of large sharks are experiencing declines across the globe, it is important to

understand the impact of toxic metals, if any, in this population. The possibility that white

sharks could have a physiological mechanism that protects them from the harmful effects of

metal exposure offers new opportunities for future shark research.

The study, titled Blood plasma levels of heavy metals and trace elements in white sharks

(Carcharodon carcharias) and potential health consequences, was published in the Marine

Pollution Bulletin on March 19 2019.

[Science Blog]

Terminal operators Tahiland: Laem Chabang's new container terminal aims to compete with

Singapore and Hong Kong

31/03/2019

By Marimi Kishimoto

A local unit of Hong Kong's CK Hutchison Holdings has been taking some big steps to put the

Thai province of Chonburi in position to reap the benefits of at least three free trade zones.

This year, Hutchison Ports Thailand opened Terminal D, a state-of-the-art facility, at Laem

Chabang Port, north of the resort city of Pattaya. Laem Chabang, already Thailand's biggest

port, is also in line for an 88 billion baht ($2.78 billion) infusion from the Thai government,

which is keen to make the berthing spot a core piece of a grand economic project known as

the Eastern Economic Corridor (EEC).

The port lays southeast of Bangkok, along the Gulf of Thailand, an area that the Thai

government envisions as a crossroads for trade throughout the Mekong Delta region. The

government realizes that bringing about its vision requires further infrastructure upgrades,

including more work at Laem Chabang.

The development of Laem Chabang Port began in 1986. Terminal D, which opened at the

end of January, is its fourth terminal and one of the world's most advanced container

terminals, a representative of Hutchison Ports Thailand said.

Many of Thailand's ports are shallow. But Terminal D, with a depth of 16 meters, makes

Laem Chabang a deep-water port and allows for larger vessels to be received. Montri

Rerkjamnien, director of Laem Chabang Port, said the port can now accept large container

vessels that have so far relied on Singapore and Hong Kong, among the world's biggest

ports, as pickup and drop-off spots in Asia.

Thailand hopes the EEC does more than increase imports and exports. It is also counting on

the EEC to attract multinational auto and electronics companies as well as other big

manufacturers. Other EEC projects include an upgrade to U-Tapao Airport, south of Pattaya

in Rayong Province, and a high-speed rail linking U-Tapao and two Bangkok airports, Don

Mueang and Suvarnabhumi.

The country fears that without these big infrastructure projects it will fall behind its

neighbors in the race to attract big manufacturers. Laem Chabang still has a long way to go.

Besides the Thai government's infusion, Hutchison Ports Thailand has announced that it will

invest $600 million to further develop Terminal D. When the project is completed, the

berth's length will be 1,700 meters, up from 400 meters at present, and the terminal will be

able to handle 3.5 million TEU. This will help the port as a whole increase its cargo handling

capacity by 37%, to 13 million TEU.

The Thai government expects the added capacity to be soaked up by increased demand

from an expanded ASEAN Economic Community, a free trade zone that was fully

implemented last year. Furthermore, Thailand is looking to join other free trade groupings --

the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership.

According to estimates by German consultancy Roland Berger, Thailand's container handling

volume will rise 35% to 9.2 million TEU in 2020 and by more than twofold to 14.9 million

TEU in 2030, compared with 2015 levels.

[Nikkei Asian Review]

Fleet development: High cost fleet upgrades to dominate shipping industry in the years to

come

30/03/2019

By Nikos Roussanoglou

Ship owners should be prepared for a lengthy and high cost process of constant revamping

of the existing fleet of ships, as more and more bans and regulations are being put into force

pact.

So, while scrubbers and low-sulfur fuels are the main discussion points today, ahead of the

IMO 2020 rule, in the future the global agenda will undoubtedly shift towards LNG and

other means of decarbonising shipping.

In its latest weekly report, sh

2020 regulation goes live and discussions have intensified, with most owners having already

taken their strategic decision with regards to scrubber or no-scrubber. Yet, the heated

debate over the future viability of scrubbers and fuel alternatives still ranges on. The

number of vessels to be equipped with a scrubber system by the end of the year is

estimated to be somewhere in the region of around 2,000 to 3,000 vessels, which is but a

small sh

According to Mr. Yiannis

Vamvakas, Research Analyst

with Allied Shipbroking,

burning HSFO after 1st of

January 2020 deadline,

looking to recoup their

investment and gain from

the bunker price spread that

will prevail. This spread is

expected to rise after 2020,

as HSFO prices are likely to

drop as around 3 million bpd

of demand switches over to

the compliant fuels. The

current average spread

between HSFO 380 and MGO is $250 per metric ton, with estimates expressed that this

could even double after 2020. From historical data, we can see that over the last 5 years, the

f the

two fuel types was $150 when Brent prices were below $100 per barrel, and $350 when

Brent

prices were above 100$ per barrel. The price of the new VLSFO that are gradually being

introduced by refineries are expected to range near those of gasoil prices, with the spread

looking possible to reach a range of between $350-$450 after 2020. Given that the cost of a

scrubber sits somewhere between $2.5 million to $5 million, it is a matter of mathematics if

the additional capex can be justified. Through a very simplified example, with an initial

capital outlay of $4.5 million and assuming that a vessel operates 250 days, burning 60 tons

per day, we can see that in the case of a spread of $100 dollars, the capex is repaid in

approximately 3 years, while with a spread near $400, the repayment is made in less than 1

-scrubber camp point out that real life calculations are

considerably more complicated, with factors such as engine efficiency, operational issues

generating extra costs and the cost of handling the extra sludges all playing their part.

Adding to this the belief that the spread will not climb to such high levels and that we are

unlikely to see the full amount of the fuel cost savings being passed on to the owners at

these current freight market conditions and the calculations start to become more

owners should bear in mind

additional future regulations

that could affect their

investment plans such as the

possibility for the

Mediterranean Sea, Australia

and the whole of North America

being added to the SECA zones

(Sulphur limit

ten years, leading to a decline of about 30% in the tonnage of ships calling at the Port of

Durban, in KwaZulu-Natal, over the past year.

This performance is subject to a number of caveats, of which the first is that South Africa

committed itself to developing the ocean economy by encouraging investment and

Phakisa lost its focus under the previous

administration, but Transport Minister Dr Blade Nzimande has recommitted government to

Further, there has been a marked shift in the way in which shipping lines operate over the

past few years. Hartwell notes that Transnet has determined that the most efficient way of

moving containers is between large hub ports on huge container ships and then to

distribute the containers on smaller ships to spoke ports from those hubs.

Subsequently, this has resulted in the capacity of container ships increasing to 25 000

containers on one vessel, which can enter only a limited number of deep-water ports with

long quays.

have the advantage of becoming hub ports. Owing to political stability, financial security or

geographical advantage, it is likely that only five or six major hub ports will develop in

TNPA monopoly

Transnet National Ports Authority (TNPA) holds a monopoly over the operation of ports,

although it does allow private operators to operate terminals and facilities within those

ports. TNPA is one of several divisions within State-owned freight utility Transnet. All

earnings by the TNPA and other divisions within Transnet are used to pay the operating

costs or losses of the other Transnet divisions.

while they have performed poorly do not have

a

that transport and port costs are passed on directly to users. State-owned monopolies are

known to be inefficient and insensitive to price, says Hartwell.

excessive and, unfortunately, as with any fixed costs, all of these charges have to be passed

The planning and development of the dig-out ports in Durban currently on hold and the

inland ports, which are quickly developing, is an extremely long process. These new ports

are a massive financial investment competing with the pressing social needs of South Africa

for resources to develop.

To justify a new port, the environmental concerns of the affected communities, as well as

the concerns of communities that are displaced by the new ports, have to be addressed,

adds Hartwell.

However, he highlights that TNPA is proceeding with the deepening of some of the berths in

Durban harbour and developing the Salisbury Island precinct into a new container terminal

in the medium term. This will require massive investment, since the handling and storage

facility will require the entire Durban harbour between New Pier and Salisbury Island to be

filled, and deep-water berths dredged and constructed.

-out port has to some extent been alleviated by the decline in

cargo volumes, but also by the construction of inland ports in Cato Ridge and Gauteng,

where containers can be staged for just-in-time delivery to the container terminal in

Subsequently, exporters no longer have to store or deliver their containers to the TNPA

terminal, in Durban, long in advance of the ship arriving, says Hartwell. Containers also do

not have to be stored in private terminals in and around Durban, which helps to relieve

congestion. Moreover, TNPA is developing new systems to manage the movement of

containers to minimise the time they are stored in the Durban area.

Hartwell adds that South Africa is ideally situated geographically to be a leading maritime

nation, as TNPA operates some of the busiest and most sophisticated ports in Africa and the

southern hemisphere.

ment before any of our neighbours do so

and permanently relegate us to being a local transport hub. This requires policy certainty

and absolute assurances from government that any investment in this country will be

[Engineering News]

Operadores de terminales Uruguay: Proyecto de MSC para construir terminal de

contenedores en Montevideo no es viable

30/03/2019

La propuesta había sido presentada por la naviera Mediterranean Shipping Company (MSC)

y estaba a estudio desde el año pasado.

Un equipo de técnicos designado por el Directorio de la Administración Nacional de Puertos

(ANP) analizaba desde mediados de 2018 una propuesta para construir una nueva terminal

de contenedores. Luego de realizar la evaluación, concluyó que no es viable avanzar con el

proyecto.

La compañía Terminal Investment Limited (TIL), fundada en el 2000 por MSC, había

presentado a la ANP en los últimos días de 2017 un proyecto para construir una terminal

multipropósito de contenedores en el puerto de Montevideo. Días después el Directorio

resolvió que la iniciativa de la segunda mayor naviera del mundo fuera examinada por un

equipo de técnicos que comenzó a trabajar a mediados del año pasado. La evaluación llevó

meses, pero culminó. Y no fue positiva para los intereses de MSC.

Una de las mayores objeciones que tiene la resolución, a la que accedió El Observador, se

refiere a maniobras de atraque que deberían hacer los buques de carga. En la propuesta se

plantea una opción para ello. Pero los técnicos coincidieron que esa posibilidad no tiene en

Añadió que lo propuesto obligaría a los barcos a girar fuera de las dársenas del puerto,

entrando marcha atrás y con tres remolcadores.

profundidades a 14 metros y asignadas a buques de gran porte, con esloras de más de 330

onsideraciones,

La propuesta de MSC llegó cuando la multinacional belga Katoen Natie estaba en medio de

un proceso de venta de Terminal Cuenca del Plata (TCP), única especializada en

contenedores dentro del puerto de Montevideo.

[El Observador]

up

30/03/2019

By Timothy Renshaw

A Vancouver-based container cargo terminal company is petitioning the Federal Court to

rule on a multibillion-dollar landlord-tenant dispute over competing proposals to expand

GCT Canada Ltd. Partnership filed an application March 28 seeking a judicial review of the

project inquiry to expand its GCT Deltaport container terminal.

In a separate application, GCT wants the court to overturn a federal environmental review

Terminal 2 project. The applications claim the VFPA has failed to provide the information

required to justify Terminal 2 and is pursuing the project based on flawed data and a biased

rationale.

Vanterm container terminal in Vancouver. In its Federal Court applications, GCT claims the

cess its preliminary project inquiry to add a

fourth container berth at GCT Deltaport (DP4) because the port authority is biased in favour

of Terminal 2.

has prohibited further land reclamation inland from Deltaport, due to

-president of planning and operations also stated

con

Healthy competition, he wrote, is needed to ensure that port container shipping customers

Aside from those two major reasons for r

even if DP4 were to receive the necessary environmental and regulatory approvals, it could

Terminal 2 is a major VFPA financial gamble. Price tag for the three-berth container terminal

is estimated at between $2 billion and $3 billion and requires the creation of a 108-hectare

industrial land mass immediately west of GCT Deltaport in deeper water away from

intertidal habitat to reduce its impact on the Tsawwassen-area marine environment.

capacity. Terminal 2, originally proposed in 2003, has been slowly moving through its latest

round of environmental and other reviews for approximately six years. Meanwhile, with an

estimated

annual capacity, which is currently 2.4 million TEU.

much-reduced cost and deliver a more incremental response to the projected rise in cargo

traffic and result in half the hectares of habitat lost from filling and dredging that Terminal 2

would require.

Coast will continue to grow significantly over the next two decades. The Port of Vancouver

handled 3.4 million TEU in 2018.

That number is projected to jump to anywhere between 6.7 million and 9.7 million TEU

annually over the next 20 years.

-effective way to meet that projected

growth, given the rapidly changing nature of trade on the transpacific and other major

shipping routes.

biased in favour of the project and therefore failing to deliver on its mandate under the

Canada Marine Act to present a full range of container expansion options to the public. Its

decision to allow Terminal 2 to proceed to a public hea

[Business in Vancouver]

Terminal operators Italy: Calata Bettolo container terminal at Genoa to be opened by

end-2019

29/03/2019

Genoa port expects the Calata Bettolo container terminal to enter into operation by the end

of this year, the president of the regional government of Liguria, Giovanni Toti, said.

to enter into operation at least partially by the end of the year, as will the completion of the

The new Calata Bettolo Container Terminal, with a 750-metre linear quay, 180,000 m²

terminal area and a 550,000 TEU/per annum capacity, is the focal point of one of the major

infrastructure projects underway in the Ports of Genoa Sampierdarena Basin. The

management of the new facility has been assigned to Consorzio Bettolo, 65% majority stake

held by Itatermineaux (MSC) and 25% by Seber.

[PortSEurope]

Terminal operators Brazil: Debt and service losses force Libra to close Santos container

terminals

29/03/2019

By Rob Ward

GM

switched three services to other terminals.

The announcement of the closing of two terminals T-35 and T-37 hardly comes as a

surprise considering Grupo Libra owes the Santos Port Authority more than 2 billion reais

($512.14 million) and had other d

recent concession extension was initially approved by former Brazilian president Michael

Temer, who was arrested recently as part of a corruption probe. The granting of a

concession to an operator in debt violates Brazilian law.

The granting of a concession to an operator in debt to the state or a government body

such as Codesp - violates Brazilian law. Eventually the Tribunal do Contas de Uniao (TCU), a

Brasilia based but independent watchdog, cancelled the concession extension granted to

Libra, because of the debt problem.

-based

shipping agent told JOC.com.

to east coast South America (ECSA) service. The company said it will abide by the law in

relation to the 500 employees that will lose their jobs in Santos and added that Libra Rio, a

box terminal in the port of Rio de Janeiro, and Libraport Campinas, an inland rail and

intermodal terminal in the interior of Sao Paulo state, would not be affected by the

shutdown.

"Grupo Libra remains firm in its intention to restructure its operations through the ongoing

terminal operator said in a statement. "It also clarifies that the situation of its operation in

Libra Terminais Santos has no negative impact on the other operations of Grupo Libra,

which follow the normal course of its activities."

Port-wide fallout

DP World Santos is expected to be able to handle the roughly 526,000 TEU of annual cargo

handled by the two soon-to-be-

remain idle for long, however, the lack of capacity could drive up handling rates for shippers

across all terminals at the port.

Rumors were rife at the recent Intermodal South America conference in Sao Paulo that

his company had already decided to leave Libra and switch to the DP World Santos facility,

on the left bank.

A manager at another Santos container terminal told JOC.com the closure of Libra Terminais

talking to other terminals about a

for us because there is less competition, but it is very sad for the Santos port community

CMA -South America Bazil Express (BRASEX) service --

which also connects to the Caribbean and US Gulf -- and South America to South Africa

(SAMWAF) loop to DP World Santos were the final straws for the debt-laden company.

-35 and T-37 facilities were the first container terminals to be

concessioned out and sold off to the private sector by the Brazilian government back in

1998. At its peak, in 2012, Libra handled 25 percent of the Santos market (801,500 TEU) but

that fell away to just 4 percent by the end of 2017.

share rose back up to 12.8 percent (525,812 TEU) for 2018, according to figures from the

Santos port authority (CODESP). With volume growth back on track, it looked likely that

Terminal Link would buy into the family-owned operation, but the deal never materialized

[JOC.com]

Terminal operators: COSCO SHIPPING Ports enjoys robust growth driven by volume

29/03/2019

Revenue surged by 57.6%

Adjusted net profit increased by 42.9%

Throughput achieved ahead of market growth of 17.1%

COSCO SHIPPING Ports Limited on March 28 announced full year results of the Company

and its subs

2018 Full-year results highlight

Revenue was US$1,000.4 million +57.6% yoy

Cost of sales was US$706.7 million, mainly due to CSP Spain Group acquired in 2017

Gross profit was US$293.7 million, +40.3% yoy

Share of profits from JV and associates was US$292.5 million, + 23.6%yoy

Adjusted net profit was US$324.6 million, +42.9% yoy

Adjusted earnings per share was US10.58 cents, + 41.1% yoy

Declared a final dividend of US$2.02 cents per share

Operational review

Organic growth of total throughput was 7.8%

Total throughput from subsidiaries was 22,507,686 TEU, +29.7%yoy

Total equity throughput was 37,062,172 TEU, +15.8%yoy

Zhang Wei, Vice Chairman and Managing Director of COSCO SHIPPING Ports said:

business, increased by 29.7% to 22,507,686 TEU (2017: 17,353,422 TEU), made up 19.2% of

2017; excluding QPI, total

throughput increased by 11.5% to 98,045,360 TEU on a comparable basis. Throughput of the

non-controlling terminals rose by 14.5% to 94,857,674 TEU (2017: 82,848,763 TEU).

During the year, synergies with Ocean Alliance and parent company were further

strengthened; volume contributed by the OCEAN Alliance accounted for about 49.9% of

total throughput of six major subsidiaries for the year, representing an increase of 33.7%

compared with 2017.

Greater China

In 2018, throughput of the Greater China region increased by 13.8% to 92,597,126 TEU

Bohai Rim

The Bohai Rim region delivered strong growth, throughput soared by 35.7% to 38,328,815

TEU compared with -full

contribution in 2018 while last year only had 8-month.

Yangtze River Delta

increased by 0.9% to 19,808,646 TEU (2017: 19,630,693 TEU) for the year. Nantong Tonghai

Terminal was inaugurated on 30 June 2018. With three container berths and one bulk berth,

Nantong Tonghai Terminal delivered 264,255 TEU container throughput in its trial operation

during the year.

Southeast Coast region

Throughput of the Southeast Coast region increased by 12.2% to 5,699,718 TEU (2017:

5,079,660 TEU). Xiamen Ocean Gate Terminal increased throughput by 31.2% to 1,968,613

TEU (2017: 1,501,001 TEU) for the year, mainly due to increased calls by the OCEAN Alliance.

Pearl River Delta

Performance of the Pearl River Delta region was rather weak compared with other regions

in China, throughput of the region increased marginally by 1.3% to 27,388,896 TEU (2017:

27,049,188 TEU). Throughput of Yantian Terminal increased by 3.6% to 13,159,705 TEU

with 2017, mainly due to competition from neighboring area.

Southwest Coast

Operation scale of the Group in Southwest Coast remained small in the year, throughput of

the region increased slightly by 1.0% to 1,371,051 TEU (2017: 1,357,005 TEU). Planned to

enhance presence in the region, COSCO SHIPPING Ports took 4.34% stake in Beibu Gulf Port

Co., Ltd. by subscribing shares in the company in December 2018.

Overseas

Performance of overseas terminals posed a strong growth in the year. With contributions

from newly acquired terminals including the CSP Spain Group and CSP Zeebrugge Terminal

and the supports from shipping alliances and parent company, throughput of the overseas

portfolio increased by 31.5% to 24,768,234 TEU (2017: 18,840,664 TEU) for the year.

throughput of CSP Zeebrugge Terminal increased by 24.0% to 392,484 TEU compared with

316,448 TEU in 2017. Backed by the continuous support from the OCEAN Alliance and other

shipping alliances, Piraeus Terminal achieved 19.4% growth in volume to 4,409,205 TEU

(2017: 3,691,815 TEU

Added a new berth of one million TEU in January 2018, throughput of COSCO-PSA Terminal

surged 56.5% to 3,198,874 TEU (2017: 2,044,536 TEU). In view of the strong demand in

ning presence in South

East Asia, COSCO-PSA Terminal announced the launch of two new berths with about 2

million TEU in total in January 2019; with the launch of the two new berths, COSCO-PSA

Terminal is equipped with five container berths, increasing its annual handling capacity from

3 million TEU of the current three berths to about 5 million TEU.

Abu Dhabi Terminal, the first overseas green-field subsidiary of the Company, will begin trial

operations in April 2019 with 1.5 million TEU handling capacity to start with and will

gradually ramping up the volume until the official operations scheduled to commence in the

third quarter of 2019.

[COSCO SHIPPING Ports]

Oil shipping: Tanker report Week 13

29/03/2019

VLCC

It was another bad week for owners, who saw rates continue to slide, with Unipec fixing

270,000mt at WS 46 to China, down 13 point. Going West, rates for 280,000mt to the US

Gulf were assessed 1.5 points lower at WS 22 Cape/Cape. In West Africa, rates for

260,000mt fell 10.5 points to WS 45. Occidental fixed US Gulf to Singapore at $4.7 million,

down $500,000. Vitol covered Hound Point to South Korea at $5.4 million.

Suezmax

West Africa rates for 130,000mt to Europe dipped to WS 47.5 before modestly recovering to

very low WS 50s. Black Sea/Mediterranean rates for 135,000mt held in the low-mid WS 60s,

with Turkish Straits delays down to three-to-four days each way.

Aframax

In the Mediterranean, rates for 80,000mt from Ceyhan hovered between WS 87.5-90. In the

Baltic, healthy tonnage availability saw rates fall 15 points to WS 65, basis 100,000mt,

before recovering to WS 70. The 80,000 cross North Sea trade was around WS 90, but

remained under downward pressure. The 70,000mt Caribs up coast market firmed to WS

100, before easing back to mid-high WS 90s.

Clean

Rates for 75,000mt Middle East Gulf/Japan benefitted from improved volumes of enquiry

and nudged up 2.5 points to WS 102.5. The 55,000mt trade eased 2.5 points to WS 112.5.

The market for 37,000mt Continent/USAC gained 30 points to WS 195, but came under

downward pressure. The 38,000mt trade from the US Gulf to UKContinent was steady in the

mid WS 90s.

[Baltic Briefing]

Dry bulk shipping: Bulk report Week 13

29/03/2019

Capesize

The Capesize market endured another week of frustrating troughs as rates languished at

-

145 to settle at $4,035 and by Friday finished at $3,796. The beginning of the week had the

Pacific market enveloped, with news of category four Cyclone Veronica. While the worst

was over by Tuesday, reports of Rio Tinto declaring force majeure on Friday circulated for

several Port Walcott berths. This marked an ongoing recent string of bad news events

distressing the Capesize market.

The routes of Saldanha Bay and Tubarao to Qingdao ended the week lifting slightly, with the

ballaster fleet on these routes remaining thin and prone to positional pressure. The Atlantic

basin bore consecutive drops in value as minimal volume traded. Transatlantic dollar per

tonne

rates often corresponded to negative timecharter equivalents, this put pressure on the C8

timecharter route. The C8 dropped by $1,205 to settle Friday at $3,195, leaving owners

questioning the Atlantic basins viable economics in this market. Period fixtures were said to

11-14 months, delivery Taicang 6 April, at $15,250.

Panamax

The Atlantic saw a spike in rates last week for transatlantic trades. The index rose around

$1,000 on Thursday, with Kamsarmaxes fixed at over $11,000 for longer grain runs via North

Coast South America. This was in spite of the fact that at least two mineral stems were

taken by Cape tonnage cutting cargo. The fronthaul market remained active, with rates from

East Coast South America fairly flat. However, a surge in North Coast business provided

increased rates for tonnage open in the Atlantic, with one ship achieving $18,350 for a trip

to Vietnam, basis Gibraltar delivery.

The Pacific market did not fare so well. Well described Kamsarmaxes still managed to fix at

healthy numbers. However, with both North Pacific and Indonesia volume slowing, the

smaller Panamaxes had to reduce their offers in order to compete. This was due to most of

the Australian stems taking up the slack, preferring larger ships.

Supramax

As the week progressed, the Baltic Supramax Index (BSI) lost ground. Period activity

remained sparse, but a 63,000dwt ship was fixed delivery US Gulf, for short period

redelivery Atlantic, in the mid $13,000s. In the Atlantic it was a mixed week, with the US

Gulf remaining positional. A 63,000dwt ship went for around $16,000 for a transatlantic

petcoke run.

From East Coast South America, activity remained. A 56,000dwt vessel was linked to a trip

delivery Recalada, redelivery Far East, in the mid $12,000s, plus around $250,000 ballast

bonus. There was limited support from the Asian arena. A 61,000-tonner open CJK fixed in

the low-mid $9,000s for a North Pacific round, redelivery Southeast Asia. Further south, a

56,500dwt ship fixed delivery for a Singapore trip via Indonesia, redelivery China at $9,000.

From the Indian Ocean, again, it was an uninspiring week. A 61,000dwt vessel was fixed

delivery Durban trip, redelivery China, at $12,400 plus $240,000 ballast bonus.

Handysize

The improvement slowed in the Handysize sector throughout the week. Rates from the

Continent and US Gulf started to slip. Two 38,000-tonners, both open Recalada with early

April dates, were booked to move grains to West Coast South America at $19,750 and

$20,000 respectively. A similar-sized vessel from the area was reportedly failed on subjects

at $13,750, redelivery North Brazil. A 30,000dwt ship, open Casa Blanca, was fixed at $8,500

for moving petcoke from Santos to South Africa.

A 34,000dwt vessel was paid $4,250 for a trip from Canakkale to the Continent, while a

38,000-tonner was booked at $5,000 from the Black Sea to the East Mediterranean. In the

Pacific, it was a slow week with little reported. A 41,000-dwt ship was fixed from Singapore

to redeliver in the Philippines at $8,000.

[Baltic Briefing]

Container shipping: Asian carriers reveal diverging logistics strategies

29/03/2019

By Greg Knowler

Following the unveiling of new strategies by their European counterparts, more Asia-based

container lines are revealing their own plans that tilt toward deeper logistics services

beyond conventional ocean shipping.

With slowing global trade, rising operating costs, and growing demand from customers for

better quality services and added value, reaching deeper into landside logistics gives carriers

greater control over their container supply chains. It is a path being followed by Maersk Line

and CMA CGM as they try to reduce vulnerability to volatile ocean transport revenue and

cost with a goal of becoming less dependent on freight rates.

-to-end logistics

capabilities in its 2018 financial results statement, released Friday. The state-owned carrier

reported a 2018 net profit of $183 million thanks in large part to an 8.7 percent year over

year increase in total transport volume to 18.37 million TEU. Its container terminal division,

COSCO Shipping Ports, handled 120 million TEU in 2018, a year over year increase of 21

percent.

trade initiative that links the markets in Asia with those in Europe, the Middle East, and

Africa. Most of the terminals COSCO controls or has invested in are at ports along the Asia-

Europe, Asia-Middle East, and Asia-Africa routes, with a total of 283 berths in operation

192 for containers with a combined annual handling capacity of 106 million TEU. Two new

berths are also being added to the joint COSCO-PSA International terminal in Singapore.

But it is along the China-Europe rail route where COSCO has been cementing its land-based

logistics offering. The carrier in 2018 launched several train services in partnership with

China Railway Corporation and by the end of 2018 had services on 112 trains departing

China for international destinations and 152 domestic train services. COSCO has also

introduced what it calls the China-European sea-rail express. Based in the Greek port of

Piraeus, the sea-rail service handled 50,000 TEU in 2018, a year-over-year increase of 27

percent.

Also expanding its logistics capabilities is Orient Overseas Container Line (OOCL), acquired

by COSCO Shipping in mid-2018. The Hong Kong-based carrier, which reported an 8.4

percent increase in volume to 6.5 million TEU in 2018, is using its OOCL Logistics unit to

develop new end-to-end transportation services.

-Europe rail network, OOCL is

including more countries in Central and Eastern Europe into the China-European sea-rail

express service. The focus of these services is on integrated logistics solutions right up to the

last mile.

Separate paths

twork Express (ONE), Jeremy Nixon, has said on numerous

occasions that his carrier would eschew the integrated service model in favor of a focus on

traditional ocean transport and customer service. However, ONE the merged container

divisions of Japanese has

terminal holdings in Asia, Europe, and Australia, and a new container terminal joint venture

control of its volume in the busiest transshipment port in the region.

Not all Asian carriers are following the logistics-controlling route, or have the ability to do

so, preferring to place greater focus on customer service and providing more reliable ocean

transport. One of those is HMM, which said this week that to improve its customer focus it

had appointed as CEO Jae-hoon Bae. Bae has many years of experience as a carrier

customer, having held executive positions at Pantos Logistics, LG Electronics, and LG

Semicon Americas.

It is unclear whether the loss-

management capabilities, or forge an entirely new path.

Anot

which reported a net loss of $218 million for 2018, citing a 31 percent year-over-year jump

in bunker fuel prices. The higher operating cost more than offset an 8.2 percent increase in

revenue, driven by 11 percent more volume than in 2017. In its earnings statement, the

carrier highlighted slowing global trade and rising low-sulfur fuel costs as its chief concerns

for this year.

[JOC.com]

net profit fell by 54% to $179 million in 2018

29/03/2019

the global shipping industry this year, after confirming on Friday that its net profit for 2018

fell by more than half.

The state-

attributable to shareholders slid 53.8 percent to 1.2 billion yuan ($178.83 million) last year

from 2.7 billion yuan a year earlier. It had warned profit would slump in January.

Revenue rose 33.6 percent as demand for its container shipping and terminal business

remained strong, COSCO said. However, its marine fuel costs rose in tandem with increases

in global oil prices over the year, it added.

[Reuters]

Oil shipping U.S.: Port of Corpus Christi approves 50-year lease with joint venture that

will develop oil export terminal

29/03/2019

By Jon Shumake

The Port of Corpus Christi Commission on Thursday approved a 50-year lease agreement

with Lone Star Ports, a joint venture between the Carlyle Group and Berry Group, for about

200 acres on Harbor Island to develop a petroleum export terminal.

The proposed crude oil export terminal project valued at $1 billion, according to Reuters

was first announced in October. The terminal will have two docks with access to an

improved 56-foot ship channel depth upon its completion, which was expected to be in late

2020, according to the initial announcement.

The U.S. Army Corps of Engineers earlier this year awarded a $92 million construction

contract to Great Lakes Dredge & Dock Co. to deepen and widen the Corpus Christi Ship

Channel to 56 feet at the entrance to Harbor Island and 54 feet throughout the rest of the

harbor. The deepened channel will make the terminal capable of fully loading Suezmax

vessels and nearly loading very large crude carriers, the Port of Corpus Christi said Thursday

in a press release.

Civil work for the facility re-purposing project, such as the demolition of existing dock

structures, have already been underway ahead of the finalization of the definitive lease

agreement, the port said. The execution of the lease enables the parties to commence

equipment and materials procurements and other construction efforts, according to the

press release.

[American Shipper]

Oil & gas exploration: Maersk can't find a buyer for its offshore vessel division

29/03/2019

After years of trying, Maersk Group has admitted that it cannot find a buyer for its offshore

vessel division, Maersk Supply Service.

Citing the continued market oversupply, extensive consolidation, years of market distress

and a poor OSV sector outlook, Maersk said that the division's valuation and market cap has

been reduced. This has made it difficult to find a buyer or other exit solution, Maersk said.

Supply Service. However, having been unable to establish any solutions meeting our

objective of creating shareholder value, we have decided to retain Mae

said Claus V. Hemmingsen, Vice CEO of A.P. Moller Maersk and CEO of the Energy division.

Maersk said that the offshore supply division has been investing in new business lines and

that this effort is paying

was generated from new business, including offshore wind, ocean cleanup and deep-sea

mining.

less dependent on the traditional Oil & Gas market in the future," said Maersk Supply CEO

Steen S. Karstensen. "With our modern fleet and skilled people, we are well positioned to

take advantage of market opportunities in the future and differentiate us from our peers."

The division's 44-vessel fleet has an average age of less than ten years, and it is still

accepting delivery of newbuilds that it ordered in 2014, before the market downturn began.

Maersk Supply Service is far from the only operator in the sector to face challenging

business conditions. Bourbon Offshore has deferred its debt repayments, sold off ships and

cut crew levels amidst persistent underutilization and low day rates. Tidewater and

Gulfmark both went through bankruptcy, then merged under Tidewater's ownership.

[Maritime Executive]

World Meteorological Organization: Climate change impacts accelerating

28/03/2019

The physical signs and socio-economic impacts of climate change are accelerating as record

greenhouse gas concentrations drive global temperatures towards increasingly dangerous

levels, according to a new report from the World Meteorological Organization (WMO).

The WMO Statement on the State of the Global Climate in 2018, its 25th anniversary

edition, highlights record sea level rise, as well as exceptionally high land and ocean

temperatures over the past four years. This warming trend has lasted since the start of this

century and is expected to continue.

ed an unprecedented

degree of robustness, providing authoritative evidence of global temperature increase and

associated features such as accelerating sea level rise, shrinking sea ice, glacier retreat and

tary-General Petteri Taalas.

These key climate change indicators are becoming more pronounced. Carbon dioxide levels,

which were at 357.0 parts per million when the statement was first published in 1994, keep

rising to 405.5 parts per million in 2017. For 2018 and 2019, greenhouse gas

concentrations are expected to increase further.

Source: WMO

The WMO climate statement includes input from national meteorological and hydrological

services, an extensive community of scientific experts and United Nations agencies. It details

climate related risks and impacts on human health and welfare, migration and

displacement, food security, the environment and ocean and land-based ecosystems. It also

catalogs extreme weather around the world.

which caused devastating floods and tragic loss of life in Mozambique, Zimbabwe and

Malawi. It may turn out to be one of the deadliest weather-related disasters to hit the

-lying city on a coastline

victims personify why we need the global agenda on sustainable development, climate

The start of this year has also seen warm record daily winter temperatures in Europe,

unusual cold in North America and searing heatwaves in Australia. Arctic and Antarctic ice

extent is again well below average.

sea surface temperatures partly because of a weak strength El Niño in the Pacific are

expected to lead to above-normal land temperature, particularly in tropical latitudes.

report give cause for great concern. The past four years were the warmest on record, with

the global average surface temperature in 2018 approximately 1°C above the pre-industrial

baseline.

Intergovernmental Panel on Climate Change (IPCC) special report on the impacts of global

warming of 1.5°C. The IPCC found that limiting global warming to 1.5°C will require rapid

and far reaching transitions in land, energy, industry, buildings, transport and cities and that

global net human-caused emissions of carbon dioxide need to fall by about 45 percent from

2010 levels by 2030, reaching net zero around 2050."

Climate impacts

Hazards: In 2018, most of the natural hazards which affected nearly 62 million people were

associated with extreme weather and climate events. Floods continued to affect the largest

number of people, more than 35 million, according to an analysis of 281 events recorded by

the Centre for Research on the Epidemiology of Disasters (CRED) and the U.N. International

Strategy for Disaster Risk Reduction.

They triggered around $49 billion in damages and over 100 deaths. Super typhoon

Mangkhut affected more than 2.4 million people and killed at least 134 people, mainly in

the Philippines.

More than 1,600 death were associated with intense heat waves and wildfires in Europe,

Japan and the U.S., where they were associated with record economic damages of nearly

$24 billion in U.S. The Indian state of Kerala suffered the heaviest rainfall and worst flooding

in nearly a century.

Food security: Exposure of the agriculture sector to climate extremes is threatening to

reverse gains made in ending malnutrition. New evidence shows a continuing rise in world

hunger after a prolonged decline, according to data compiled by U.N. agencies including the

Food and Agriculture Organization and World Food Programme. In 2017, the number of

undernourished people was estimated to have increased to 821 million, partly due to severe

droughts associated with the strong El Niño of 20152016.

Displacement: Out of the 17.7 million Internally Displaced Persons (IDPs) tracked by the

International Organization for Migration, over two million people were displaced due to

disasters linked to weather and climate events as of September 2018. Drought, floods and

storms (including hurricanes and cyclones) are the events that have led to the most disaster-

induced displacement in 2018. In all cases, the displaced populations have protection needs

and vulnerabilities.

internal displacements were recorded between January and December 2018, of which 32

percent were associated with flooding and 29 percent with drought.

Heat, air quality and health: There are many interconnections between climate and air

quality, which are being exacerbated by climate change. Between 2000 and 2016, the

number of people exposed to heatwaves was estimated to have increased by around 125

million persons, as the average length of individual heatwaves was 0.37 days longer,

compared to the period between 1986 and 2008, according to the World Health

Organization. These trends raise alarm bells for the public health community as extreme

temperature events are expected to be further increasing in their intensity, frequency and

duration.

Environmental Impacts include coral bleaching and reduced levels of oxygen in the oceans.

as mangroves,

seagrasses and salt marshes; and ecosystems across a range of landscapes. Global warming

is expected to contribute to the observed decrease of oxygen in the open and coastal

oceans, including estuaries and semi-enclosed seas. Since the middle of the last century,

there has been an estimated one to two percent decrease in the global ocean oxygen

-

IOC).

Climate change has emerged as a significant threat to peatland ecosystems, because it

exacerbates the effects of drainage and increases fire risk, according to U.N.-Environment.

Peatlands are important to human societies around the world. They contribute significantly

to climate change mitigation and adaptation through carbon sequestration and storage,

biodiversity conservation, water regime and quality regulation, and the provision of other

ecosystem services that support livelihoods.

Climate indicators

Ocean heat: 2018 saw new records for ocean heat content in the upper 700 meters (data

record started in from 1955) and upper 2,000 meters (data record started in 2005), topping

the previous record set in 2017. More than 90 percent of the energy trapped by greenhouse

gases goes into the oceans and ocean heat content provides a direct measure of this energy

accumulation in the upper layers of the ocean.

Sea level: Sea level continues to rise at an accelerated rate. Global Mean Sea Level (GMSL)

for 2018 was around 3.7 millimeters higher than in 2017 and the highest on record. Over the

period January 1993 to December 2018, the average rate of rise is 3.15 ± 0.3 mm per year

while the estimated acceleration is 0.1 mm/yr2. Increasing ice mass loss from the ice sheets

is the main cause of the GMSL acceleration as revealed by satellite altimetry, according to

the World Climate Research Programme global sea level budget group, 2018.

Ocean acidification: In the past decade, the oceans absorbed around 30 percent of

anthropogenic CO2 emissions. Absorbed CO2 reacts with seawater and changes the pH of

the ocean. This process is known as ocean acidification, which can affect the ability of

marine organisms such as molluscs and reef-building corals, to build and maintain shells and

skeletal material. Observations in the open-ocean over the last 30 years have shown a clear

trend of decreasing pH. In line with previous reports and projections, ocean acidification is

ongoing and the global pH levels continue to decrease, according to UNESCO-IOC.

Sea ice: Arctic sea-ice extent was well below average throughout 2018 and was at record-

low levels for the first two months of the year. The annual maximum occurred in mid-March

and was the third lowest March extent in the 1979-2018 satellite record. The September

monthly sea ice extent was the sixth smallest September extent on record. The 12 smallest

September extents have all occurred since 2007. At the end of 2018, the daily ice extent was

near record low levels.

Sea-ice cover for Sep 2018

Source: WMO

The Antarctic sea ice extent reached its annual maximum in late-September and early-

October. After the maximum extent in early spring, Antarctic sea ice declined at a rapid rate

with the monthly extents ranking among the five smallest for each month through the end

of 2018.

The Greenland ice sheet has been losing ice mass nearly every year over the past two

decades. The surface mass budget (SMB) saw an increase due to above-average snowfall,

particularly in eastern Greenland, and a near-average melt season. This led to a gain in

overall SMB, but had little impact on the trend over the past two decades with the

Greenland ice sheet having lost approximately 3,600 gigatons of ice mass since 2002. A

recent study also examined ice cores taken from Greenland, which captured melting events

back to the mid 1500s. The study determined that the recent level of melt events across the

Greenland ice sheet have not occurred in at least the past 500 years.

Glacier retreat: The World Glacier Monitoring Service monitors glacier mass balance using a

set of global reference glaciers with more than 30 years of observations between 1950 and

2018. They cover 19 mountain regions. Preliminary results for 2018, based on a subset of

glaciers, indicate that the hydrological year 2017/18 was the 31st consecutive year of

negative mass balance.

[Maritime Executive / WMO]

Terminal operators Kenya: Transnet in running to operate Lamu Port

28/03/2019

first phase of the new port of Lamu.

The new port, located about 190 miles north of Mombasa, is being developed by KPA as the

corridor linking northern Kenya with Ethiopia and Sudan.

WorldCargo News understands that Transnet is part of a consortium that is interested in

providing equipment and then operating the first three berths at the new port. It is hoped

that a deal will be concluded end March/early April, once various fiscal, technical and

governance issues have been resolved. It is highly likely that the concession period will be

for 25 years. Despite being approached for further details about the project, Transnet had

not responded at the time of writing. But it is clear that the South African company is keen

to use its expertise and diversify its revenue streams by investing in overseas markets. Sub-

Saharan Africa is seen as the easiest place to start.

The first of the new berths at Lamu is due to be completed in June of this year with the

other two expected to be finished at the end of 2019/early 2020. They will handle mainly

containerised cargo and have an effective handling capacity of 1.2M TEU a year. They

represent an investment by the KPA in excess of US$480M.

[WorldCargo News]

Terminal operators Germany: Hamburg's HHLA profit up 18% to US$28.1 million as

revenue rises 3%

28/03/2019

Principal Hamburg port operator Hamburger Hafen und Logistik (HHLA) 2018 operating

profit increased 18% year on year to EUR25 million (US$28.1 million) drawn on revenues of

EUR1.29 billion, up 3%.

"The strong result underlines that our strategy is paying off. We further strengthened

HHLA's solid foundation," said HHLA chairwoman Angela Titzrath. Contributions came from

all the segments and from the terminal operator HHLA TK Estonia, which has been

successfully integrated into the HHLA group.

"A solid foundation is important. But on its own, it is not enough to generate further growth.

We will therefore continue to implement our strategy of strengthening the creative power

and future viability of HHLA," said Ms Titzrath. She said this would involve continuous

investment in the quality and profitability, as well as the identification and development of

new growth areas, particularly in the digital space.

[Hong Kong Shipping Gazette]

Terminal operators Georgia: Anaklia port project mired in controversy

28/03/2019

By Giorgi Lomsadze

championed.

development, is mired in controversy. Source: Anaklia website

the country into a stopover for trade between China and Europe. But an escalating battle between the Georgian government and private investors has plunged the landmark project into uncertainty. Two and a half years ago, construction on the project the first deep-water port on the eastern shore of the Black Sea was launched with a ground-breaking ceremony. Overcast skies may have frowned on the proceedings, but the air was festive. Singers, priests and honorary guests celebrated the transformation of the little town of Anaklia and its swampy environs into an international transit hub.

said.

-known banker and the founder of Anaklia Development Consortium, a Georgian-American venture that the government awarded the exclusive right to build and operate the port. The American partner, Kurt Conti, chairman of Conti Gro Fast-forward to 2019. Kvirikashvili is out of office and government officials are now increasingly

accusations that it is failing to complete construction and attract investment on time. The

warning darkly of conspiracies, possibly involving Russia or China. All this has left observers guessing what has gone wrong. The Anaklia imbroglio could be about

- out

The Anaklia Development Consortium recently called a press event in Tbilisi in an attempt to clear up lingering questions around the embattled port of the future. General Director Levan

million cubic

But that is far short of the $620 million that Anaklia needs to complete the first phase of development and to host its first ship. Akhvlediani claimed the consortium has attracted $400 million in pledged loans from four international financial development institutions: the European Bank for Reconstruction and Development, the Overseas Private Investment Corporation, the Asian Development Bank, and the Asian Infrastructure Investment Bank. But before signing off, these institutions want the Georgian government to underwrite their loans. In other words, if Anaklia fails to deliver, the Georgia government would be on the hook for hundreds of millions of dollars. This is the gist of the problem, at least on the surface. Government officials insist that the

r Anaklia and agreeing to them could

Development Maia Tskitishvili said during a March 21 parliamentary hearing.

The consortium insists the debate on who secures the loans is a red herring in a deliberate campaign to crush the port project or at least expel the consortium.

ovorossiysk, the nearest deep- water port, by attracting to Georgia a share of the West-bound Asian cargo that now travels via Russia. In comments to Eurasianet, consortium representatives speculated that Russia could be trying to stop Anaklia; or that China could be trying to take over and is, behind the scenes, putting pressure on Tbilisi to oust the Georgian-American developers. The consortium also suspects it is dealing with a personal vendetta by Bidzina Ivanishvili, the billionaire former prime minister, against Khazaradze. Suspicions of skullduggery around Anaklia stem from the particular series of events leading to the long-simmering investor-government dispute bursting into the open. Before officials began

in Georgia. Last year, regulators fined Khazaradze for a 10-year-old bank transaction and then

these decisions in court.

s investigating the same transaction as an act of money-laundering. This announcement triggered an outburst from Khazaradze, who had previously kept his tussle with the authorities close to his vest. The banker dismissed the accusations and said that officials deliberately went public with the investigations against him to damage his reputation and hamstring his ability to raise money for Anaklia. TBC Holding, an affiliate of TBC Bank, holds a 40 percent stake in the Anaklia Development Consortium and has so far invested the largest chunk of cash $40 million into the port. He implied that the ruling Georgian Dream party had set state power against him for his refusal to show loyalty to the political establishment and Ivanishvili. During a rambunctious March 4 testimony before parliament, the banker scandalously claimed that he had been

Salome Zourabichvili, whom Ivanishvili hand-picked for the job. Dismissing these allegations, government officials insist that the Anaklia negotiations and TBC

i said at the press conference.

Gotsiridze of the opposition United National Movement party, addressing the government during a parliamentary debate on the issue. [eurasianet]

Container shipping: World Container Index 28 Mar 2019

28/03/2019

The World Container Index assessed by Drewry, a composite of container freight rates on 8 major routes to/from the US, Europe and Asia is up 2.4% to $1,323.67 per 40ft container. Two-year spot freight rate trend for the World Container Index:

World Container Index detailed assessment 28 Mar 2019 The composite index increased 2.4% this week and likewise 13% up as compared with

same period of 2018. The average composite index of the WCI, assessed by Drewry for year-to-date, is US

$1579/40ft container, which is $94 higher than the five-year average of $1485/40ft container. d 2.4% or $30.5 to reach

$1,323.67 per 40ft container. Freight rates on Shanghai-New York increased $66 and stood at $2,419 per 40ft box. Rates on Shanghai-Genoa inched up $15 to touch $1,459 per feu. Similarly, rates from Shanghai to Los Angeles gained $103 to reach $1,495 for a 40ft container. We expect Transpacific rates to strengthen next week on the back of proposed GRIs. Our latest freight rate assessments on eight major East-West trades:

Spot freight rates by route - assessed by Drewry

Source: Drewry Supply Chain Advisors

Container shipping: ITF responds to World Shipping Council attacks 27/03/2019 By Chris Dupin The International Transport Forum (ITF) of the Organization for Economic Cooperation and Development (OECD) has responded to criticism levied against one of its recent reports by the World Shipping Council. (WSC).

Container Shipping in Europe Data for the Evaluation of the EU Consortia Block Exemption,

protection called the block exemption regulation (BER ) for container shipping consortia past April 2020.

container shipping was held Feb. 8 at which some of the data in the report was presented. SC participated in the meeting, along with other representatives of the shipping

construc

The debate is an important one because space-sharing agreements between shipping companies has become almost universal, not only in the main east-west trades dominated by the 2M, Ocean and THE alliances, but on services around the world. The BER allows container carriers to share space on the same ships on trades in and out of Europe.

The WSAC says such space-sharing arrangements create many benefits for shippers: more frequent service, a wider range of service and the ability for carriers to operate larger, more efficient ships, which helps drive down transportation costs. In the U.S. container trades, space-sharing agreements are reviewed by the Federal Maritime Commission. The dozens of agreements between carriers, most of which are space-sharing arrangements, can be viewed

An ITF spokesman said Tuesday h

understanding, among policymakers and wider audiences, of the role of transport as a key to economic growth and of its impact on the environmental and social dimensions of

alliances. Its views are grounded in data, evidence and economic research with the objective to

It was in exchanges with the commission that data potentially relevant for the evaluation of

and it is not clear sources to help inform its findings. This is a core feature of ITF work, regardless whether a report was written by several authors or by a single one.

container shipping was held Feb. 8 at which some of the data in the report was presented.

industry, the European

[American Shipper]

Container shipping: ZIM reports net loss of US$120 million despite record revenues of US$3.3

billion in 2018 27/03/2019

9.1% compared to 2017. It also lifted a record number of containers Total revenues in Q4 2018 were US$852.6M, again the highest in four years, and 12.11% up on Q4 2017. During 2018, ZIM carried 2,914,000 EU, an all-time record and 10.8% ahead of 2017. Operating cash flow was US$225M in 2018, compared to US$230.9M in 2017. Adjusted EBITDA was US$145.3M in 2018, compared to US$270.1M in 2017. Net loss was US$119.9M (including an impairment loss of US$38M with respect to vessels classified as held-for-sale), compared to net profit of US$11.4M in 2017.

[WorldCargo News]

Shipping emissions: The effects of changes to marine fuel sulfur limits in 2020 on energy

markets

27/03/2019 With a planned effective date of January 1, 20(IMO) new regulations (IMO 2020) limit the sulfur content in marine fuels that ocean-going vessels use to 0.5% by weight, a reduction from the previous limit of 3.5% established in 2012. The IMO adopted the plan for this policy change in 2008, and in 2016 reaffirmed an implementation date of 2020. The change in sulfur limits has wide-ranging repercussions for the global refining and shipping industries as well for petroleum supply, demand, trade flows, and prices. The shipping and refining industries have already begun making preparations and investments to varying degrees to accommodate IMO 2020 regulations.

Shipping industry compliance pathways

As the implementation date for the 0.5% sulfur cap approaches, the U.S. Energy Information Administration (EIA) expects that shifts in petroleum product pricing may begin as early as mid-to-late 2019. EIA anticipates that the effects on petroleum prices will be most acute in 2020, and the effects on prices will be moderate after that. However, the regulations will affect petroleum supply, demand, and trade flows on a more long-term basis.

Global marine fuel sulfur limits

Source: EIA: The Effects of Changes to Marine Fuel Sulfur Limits in 2020 on Energy Markets [Mar 2019]

EIA shows the effects of these new regulations in both the Short-Term Energy Outlook (STEO), published monthly, and the Annual Energy Outlook 2019 (AEO2019), released in January 2019.

AEO2019 projections provide complementary insights into the effects of the regulations. Both STEO and AEO2019 are based on current laws and regulations. AEO2019 centers around a Reference case based on relationships and general equilibrium models that satisfy projected energy demand under a set of constraints. STEO provides forecasted data that are updated every month. EIA uses a combination of econometric models based on historical data to forecast where EIA anticipates energy markets will move in the next two years. The STEO relies on historical data, short-term trends, and analyst judgment in creating this forecast. Although the STEO forecasts fewer variables than

developments related to the IMO rule more regularly than AEO2019, which projects variables at an annual frequency through the year 2050. In addition, because the STEO is published monthly, EIA adjust its forecasts continuously to incorporate new information.

projections with insight into how IMO 2020 will affect petroleum markets beyond 2020. In addition, AEO2019 has more detailed data on refinery operations, marine fuel use, and fuel

detailed, structured equilibrium models in its National Energy Modeling System. The first section of the report The Effects of Changes to Marine Fuel Sulfur Limits in 2020 on Energy Markets explains the findings related to IMO 2020 from the STEO and AEO2019 analysis. The second section discusses the uncertainties that might affect the way that actual

[EIA]

Flags of convenience: Liberia-flagged bulk carrier detained in Australia over MLC breaches

27/03/2019 By Mike Schuler Australian authorities have detained the bulk carrier ANNA-ELISABETH, registered under the flag of convenience (FOC) of Liberia, after its crew complained of insufficient food, bullying,

The ITF said it received the complaints on Monday, March 25, as the German-owned ship was berthed at the Port Kembla Coal Terminal. ITF national coordinator, Dean Summers, went on

very low, certainly not enough to get 17 seafarers to Singapore. It is our suspicion that this company is under intense financial pressure and have sought to save money wherever they

Source: Equasis

-flagged the qualifications of all of the crew. Due to the findings, Summers requested that Australian Maritime Safety Authority (AMSA) inspect the vessel, citing shore leave, lack of provisions, bullying and concern about minimum safe manning and crew qualifications.

fe to take the ship to sea. We

AMSA did not permit the ship to sail at the scheduled 6:00pm on Monday 25 March. AMSA inspectors boarded the ship Tuesday 26 March where a detailed inspection continued throughout the day. The vessel was eventually detained by AMSA under the Maritime Labour Convention (MLC). The Liberian register is reportedly sending a representative to the ship to work with the master and owners to rectify the long list of deficiencies. The German owners, Hamburg-based Johann MK Blumenthal, are notoriously anti-union and have a reputation for confrontation, says the ITF. Blumenthal manages a fleet of 28 bulk carriers, all registered unders the FOCs of Liberia and Cayman Islands, according to Equasis.

ANNA-ELISABETH management details

Source: Equasis

are found. Clearly, the only thing theSummers.

Blumenthal vessels. So right now, Blumenthal is a priority for the ITF, and we will continue to inspect their vessels in ports around the world to ensure that more than 700 seafarers across

The ITF says the incident marks the is the latest example of FOC shipping in the Australian domestic trade. FOC ships have grown to dominate the Australian coastal trade and are at the centre of a dispute between maritime unions and BHP and BlueScope after the companies replaced the last two Australian-crewed bulk ships with foreign seafarers on FOC conditions. [gCaptain /Equasis]

Bunkering: Refiners invest $1 billion to meet shift to cleaner marine fuel

27/03/2019 By Roslan Khasawneh Refiners around the world have invested about $1 billion so far to produce low-sulfur marine fuel to meet new regulations coming into force in 2020, a BP executive said. International Maritime Organization (IMO) rules will ban ships from using fuels with a sulfur content above 0.5 percent from 2020, compared with 3.5 percent now, unless they are equipped with so-called scrubbers to clean up sulfur emissions. Since the deadline for the shift was set in 2016, shippers and refiners have scrambled to prepare for the new standards.

Rotterdam, Singapore Fujairah Bunkering and Fuel Oil Forum.

ab Emirates, saying investment to deal with the shift had reached an estimated $1 billion. BP said in March it was set to sell its new very low sulfur fuel oil (VLSFO) globally, echoing announcements by oil majors such as Royal Dutch Shell and Exxon Mobil. In smaller ports lacking adequate fuel storage to hold the range of fuel grades needed, suppliers of compliant marine fuels could turn to floating storage, as land facilities adapt to the shift.

sulfur for a period of time until the

land-

[Reuters]

Casualty Norway: VIKING SKY engine failure caused by low oil pressure

27/03/2019 The Norwegian Maritime Authority (NMA) has worked with Viking Sky's classification society,

Hustadvika in challenging weather conditions on March 23. For the present, the conclusion is that the engine failure was directly caused by low oil pressure.

Source: Maritime Executive

The level of lubricating oil in the tanks was within set limits, however relatively low, when the vessel started to cross Hustadvika. The tanks were provided with level alarms, however these had not been triggered at the time. The heavy seas in Hustadvika probably caused movements in the tanks so large that the supply to the lubricating oil pumps stopped. This triggered an alarm indicating a low level of lubrication oil, which in turn shortly thereafter caused an automatic shutdown of the engines. The NMA has drawn up a general safety notice about ensuring a continuous supply of lubricating oil to engines and other critical systems in poor weather conditions. This should be

k assessments in the safety management system.

efficient investigation carried out by the NMA, and we fully understand and acknowledge their findings. We have inspected the levels on all our sister ships and are now revising our procedures to ensure that this issue could not be repeated. We will continue to work with our

The NMA granted the company a permit to sail on a single voyage to Kristiansund to have necessary repairs made. [Maritime Executive]

Port development Italy: China Communications Construction Company signs cooperation

agreements with Genoa and Trieste

27/03/2019 By Katherine Si China Communications Construction Company Limited (CCCC) has announced the signing of cooperation agreements with Italian authorities to jointly develop port projects in Italy. According to the agreement, CCCC will co-operate with Genoa port authority to establish infrastructure investment platform. The two parties will pursue comprehensive cooperation for the upgrading and reconstruction of Genoa port. Additionally, CCCC will work with the port of Trieste to evaluate local transportation network for further optimization and improvement on local sea-rail transportation facilities.

construction and design company in China. The company is principally engaged in the design and construction of transportation infrastructure, dredging and heavy machinery manufacturing business. [Seatrade Maritime News]

Port development: Iran looks to remote port to beat US sanctions 27/03/2019 With the web of US sanctions tightening, Iran faces a host of challenges as it looks to an

The port in Chabahar, only about 100 kilometers (62 miles) from the Pakistan border and

with exemptions from unilateral economic sanctions reimposed by the United States in 2018 after it pulled out of the Iran nuclear deal signed in 2015. That is due mainly to the pivotal role

Pakistan for trade with the world, especially India. Afghan trade as well as plans for a trading route by rail between central Asia and the Indian Ocean called the North-South Corridor are the main reasons the Islamic Republic has invested

say.

developed, so that we can implement the North-Development Minister Mohammad Eslami told AFP while visiting Chabahar for a development conference.

Almost 500 acres (more than two square kilometers) of land have been reclaimed from the sea for the project and over 17.5 million cubic meters (618 million cubic feet) dredged, creating a 16.5-meter (54-foot) drought. But more than a year since the new installations became operational in December 2017, business has yet to pick up. The ships that officials say have docked in the past year have only loaded and unloaded 2.1 million tonnes of cargo, a far cry fr

Only 20 ships have docked at the new section of the port and most of its three kilometers of waterfront remains unutilized, with new machinery and neatly lined-up cranes standing idle. But authorities remain upbeat about the prospects for growth. Hossein Shahdadi of the provincial ports and maritime authority said that in the first 11 months

increase in cargo handled

Oman, he said. Arun Kumar Gupta, managing director of India Ports Global Limited which has a 10-year concession at

AFP.

The Indian company began work in December and has so far handled only an average of 60,000

the volatile Sistan Baluchistan province where militant jihadists operate. In December, a suicide attack on the local police headquarters killed two policemen. During an investment conference in February, security was tight with many roads cut off and hundreds of armed security personnel deployed to protect delegates. Apart from security concerns, US sanctions banning financial transactions with Iran make it ever harder to pay or receive payments. Some like Afsaneh Rabiani, who runs a freight forwarding company, see

challenge was nothing new.

ere born with sanctions. Ever since the (1979 Islamic) revolution, we have been under

unloading of a first shipment of Afghan goods lined up to be re-exported from Chabahar. [AFP]

Terminal operators Colombia: Government signs 30-year concession contract for Puerto Antioquia

27/03/2019 By Michele Labrut The Colombian government has signed a 30-year-concession-contract for the construction of the long-awaited new port on the Caribbean Sea, in Turbo, in the department of Antioquia. The $300m-terminal will have a capacity for 6.6m tonnes of cargo and will receive container Post-panamax vessels of up 366 m in length. he concessionaire Sociedad Puerto Bahia

Works SAS (PIO SAS) company will be in charge of its development in partnership with the French shipping company CMA CGM.

The terminal will be built by a consortium made up of Eiffage Infraestructuras from France and Coimdustrial Thermotécnica de Colombia. Puerto Antioquia will feature a dock with five berths, a depth of 14.5 m and a double carriageway viaduct for the transit of trucks between the platform and the port on land, which allows the passage of up to eight heavy transport vehicles. Puerto Antioquia is expected to start operations in the second half of 2020. The terminal in Turbo, will benefit the Uraba agro-industrial sub-region, considered a strategic zone due to its geographical position, near the border with Panama. The Uraba region is one of the main producers of bananas, other fruits and cereals. The port, which will be located in the sector known as Bahía Colombia, on the banks of the Leon River, an arm of the mighty Atrato, will be connected to the rest of the country by the Mar 1 and Mar 2 highways. [Seatrade Maritime News]

Terminal operators Italy: COSCO SHIPPING Ports finalizing construction of ncontainer terminal at the Port of Vado Ligure

27/03/2019 In October 2016, COSCO SHIPPING Ports officially joined the construction and operation of a new container terminal at the Port of Vado Ligure in northern Italy, after reaching an agreement with Vado Holding B.V. The terminal, upon completion, will become Ialso the first one built in the recent three decades in the country. Currently, the construction of the container terminal is in full swing. Gantry cranes and quay cranes have been installed and started operation, and the gantry cranes are also ready for use. Site manager of Vado Holding Bruno said that nearly 80% of the project has been completed,

will have a quaBruno said, adding that it can berth the largest container vessels in the world. [EU Reporter]

Terminal operators Singapore: PSA orders 160 all-electric AGVs 27/03/2019 PSA International has ordered 160 AGV for its Tuas Mega Port project. VDL Group will be

Engineering, pursuant to its licensing agreement with Gaussin Manugistique.

The type of automated guided vehicle that VDL Automated Vehicles has already supplied to PSA. Source: VDL

PSA plans to open the first berths at Tuas in 2021, and the AGVs will be delivered between 2021 and 2023. The VDL AGVs will be fully electric machines with a maximum capacity of 65 tons, length of 15m, height of 2m and maximum speed of 25 km/h. The order follows the delivery of two VDL AGV prototypes to Singapore in 2015. The other 80 AGVs will be supplied by the Land Systems division of Singapore-based ST Engineering. These

year Gaussin announced a licensing deal with ST Engineering Land System for the territory of Singapore. ST Engineering Land Systems is financing the entire orde