International Association of Marine and Shipping Professionals

NEWS BULLETIN 10 – 16 Dec 2018

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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.

About I.A.M.S.P

Shipping emissions: Scrubbers for containerships on the rise

INTERNATIONAL news

16/12/2018

With just over one year to go before the IMO‘s new marine fuel sulphur cap of 0.5% comes into force, more

containership owners are opting for exhaust scrubbers. Could this reap immediate supply-side benefits?

After a slow start, adoption of exhaust scrubbers as a solution to the 2020 low-sulphur regulations is picking

up. There are currently 266 containerships fitted with scrubbers with an aggregate capacity of 2.2 million teu.

While the scrubber fleet only represents 5% of the fleet in number, it accounts for twice that ratio in teu

capacity due to the emphasis towards larger ships being retrofitted. Moreover, scrubber penetration is much

more significant in the orderbook, which combined with more anticipated retrofits in time will lift the ratio

higher still.

Figure 1: Percentage of containerships with exhaust scrubbers, as of 11 December 2018

* Includes ships that are currently inactive (laid up, damaged, in repair or under arrest)

Source: Drewry Maritime Research

Reasons for the scrubber reticence are well understood. The upfront expense of the retrofit and ongoing

servicing costs, uncertainty about future environmental regulations and the availability of high-sulphur fuel

oil (HSFO) in owners‘ minds will all have weighed against any potential competitive edge to be gained from

lower fuel bill or higher charter rates.

One reason why more owners are considering scrubbers is perhaps because of warnings that if there are too

few clients for HSFO suppliers could charge a premium to keep producing such small quantities. With time

running out, it may have dawned on owners that they can no longer sit on the fence and need to demonstrate

that there will be a sufficiently large customer base for HSFO, or else risk losing it as an option altogether.

Another reason is that the capacity to get scrubbers retro fitted ahead of the deadline is getting scarcer by the

day.

Figure 2: Operators of containerships with exhaust scrubbers, current fleet or on order, as of 11

December 2018

Source: Drewry Maritime Research

Whatever the reason for the greater uptake of scrubbers, if the trend intensifies there could well be some side

benefits for ocean carriers by restricting supply during 2019. In the big picture, the new regulation is

expected to reignite the demolitions market after a down year in 2018 by weeding out more of the older, more

heavily polluting ships that will no longer be economic post-2020, but at a more macro-level a number of

trades could see deployment numbers temporarily reduced next year as more ships are taken out of service

for retrofitting.

Figure 3: Number of active containerships with exhaust scrubbers by selected trade, as of November

2018

Note: Some ships are double-counted as they operate on multi-trade services

Source: Drewry Maritime Research

Depending on the size and type of ship, an exhaust scrubber retrofit can as long as six weeks, which is a

sufficiently long time to impact the slot availability. As things stand, the penetration

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of scrubber-fitted ships is low in the major East-West trades. For example, according to Drewry research just

17% of the ships deployed in the Asia-Mediterranean trade ran with scrubbers as of November. The ratio was

even lower in the Asia-East Coast North America (10%), Asia-WCNA (9%), Transatlantic (6%) and Asia-

North Europe (5%) lanes. This means there is plenty of scope for those ships to be pulled from active duty

next year to get retrofitted, which unless replaced will reduce overall utilisation and aide spot market

freight rate inflation.

How big a factor this will be will depend on the extent of the retrofit wave, and whether lines manage the

process alongside the usual void sailings program or if it will effectively replace it altogether

Our view

Scrubber-fitted containerships will be in the minority of the fleet, but as their popularity increases there is

likely to be some temporary supply-side disruption that could affect freight rates in 2019.

[Drewry Container Insight Weekly]

15/12/2018

By Zhanna Bezpiatchuk

Times are hard at Ukraine's major trading port at Mariupol. In fact, it's almost dead - and workers say things

have not been this bad for decades.

The bridge from Russia to annexed Crimea opened in May and heightened tensions with Ukraine. Credit:

GETTY IMAGES

Terminal operators Myanmar: Thilawa multipurpose terminal to open in March 2019

Port development Ukraine: Clash with Russia leaves Mariupol port deserted

But the final and most painful blow to the local economy came last month. Three Ukrainian ships were fired

on and seized near the strait in international waters off Crimea. Three of the crew were wounded, and all 24

are being held in Moscow at the centre of an international row. For more than a week afterwards, Russia

stopped commercial vessels at the entry point to the Kerch Strait from sailing to Mariupol and another

Ukrainian port to the west, Berdyansk..

Eventually, they let vessels pass the strait, but the reprieve came too late. "There are almost no ships now,"

says port director Oleksandr Oleynyk.

And then there are the inspections. Russian officials do not tell their Ukrainian counterparts when inspections

will take place, which boats they will hold, or for how long. Each day of delay costs the shipping companies

between $15,000 and $20,000 (£12,000-£16,000). "After such big losses, companies don't want to sail here

anymore. This uncertainty is especially hard for us," Mr Oleynyk says.

[BBC]

15/12/2018

By Yuichi Nitta, Nikkei staff writer

A multipurpose terminal built just outside of Myanmar's largest city with aid from Japan is slated to open as

early as March 2019, after its completion was celebrated Friday.

Oil shipping U.S.: Gulf Coast VLCC-loading terminals move forward amid rising pressure to

export crude

The terminal is near the Thilawa special economic zone, developed jointly by Japanese and Myanmar players

25 km south of central Yangon. About 100 companies operate in the zone, and half are Japanese businesses.

Japanese logistics company Kamigumi will operate the $227 million facility near Yangon owned by Myanma

Port Authority (MPA), a state agency. Yen loans offered as development aid from Japan funded 90% of the

project.

In March 2018, Kamigumi concluded a concession agreement with MPA for the operation of the Thilawa

terminal. In 2013, Kamigumi was contracted by JICA to carry out a preliminary survey during which the

Company examined the business viability of operating this terminal from the standpoint that in the near future

logistics hubs will relocate from the Port of Yangon to the Port of Thilawa due to growing throughput

associated with Myanmar's economic growth and due to traffic congestion in downtown Yangon. This study

was integral in Kamigumi's conclusion of this concession agreement.

The terminal with a 400-meter wharf will be able to accommodate two cargo ships at a time and is equipped

to handle 200,000 TEU per year. The wharf will be extended to 1 km, with capacity quintupling to 1 million

TEU, after the second and third phases of construction.

Container port traffic in Myanmar has tripled over the past five years to about 1 million units annually, and is

expected to reach 3 million units over the next decade.

[Nikkei Asian Review / Kamigumi]

14/12/2018

By Laura Huchzermeyer

Two planned VLCC-loading projects along the Texas Gulf Coast -- one in Corpus Christi and another offshore

Freeport -- are moving forward as pressure increases to export more US crude on supertankers.

Lone Star Ports, a joint venture between The Carlyle Group and The Berry Group, was named to lead the

development of the first US onshore export terminal servicing VLCCs on Harbor Island, Texas, the Port of

Corpus Christi announced Friday.

The $1 billion-project is expected to complete in late 2020 and will be connected to Hilcorp Energy's Harvest

pipeline as well as the EPIC pipeline. The lines will carry a total of 1 million b/d of crude from the Eagle Ford

and Permian Basin. Additionally, Lone Star Ports entered into an indicative agreement with terminalling and

storage company Martin Midstream to provide services at Harbor Island.

As US crude production continues to rise, there is increasing pressure to export barrels. There are about six

ongoing projects along the US Gulf Coast that will allow for the direct loading of VLCC tankers, which can

hold roughly 2 million barrels of crude oil. Currently, all but one US facility -- the Louisiana Offshore Oil Port

-- are unable to fully load a VLCC. Giant VLCCs are just too big to be fully loaded inside US ports as the water

is too shallow. Hence, shippers rely on costly ship-to-ship transfers to load VLCCs in deeper offshore water.

Oil shipping Norway: Government postpones decision on Arctic oil terminal to serve Johan

Castberg offshore field

Oil shipping: Tanker report – Week 50

To solve the problem, some ports, such as the Lone Star Harborside project, are dredging for larger vessels.

Other projects are looking to connect onshore pipelines to offshore loading buoys located in deeper water.

Earlier this week, leaders at Enbridge talked publicly for the first time about their plans for an offshore US Gulf

Coast VLCC loading facility called Texas COLT. Along with partners Kinder Morgan and Oiltanking,

Enbridge is developing Texas COLT, which will be located 40 miles offshore Freeport, Texas.

The facility will include loading buoys connected to a pipeline, which will allow for the full loading of a VLCC

every 24 hours. The facility will be fed by the Gray Oak Pipeline, which will move some 900,000 b/d of crude

from the Permian and Eagle Ford. Enbridge also announced this week that it had acquired a 23% stake in Gray

Oak, which also is owned by Phillips66 and Marathon. Texas COLT also will have connections to Enbridge's

Seaway pipeline out of Cushing, Oklahoma.

"It's clearly a competitive environment when it comes to developing export options, but we're confident with

our position," Guy Jarvis, Enbridge's president of liquids pipelines, said. "We have the capabilities amongst our

partners to construct and operate this facility, there's strong interest from a broad base of potential customers."

Jarvis added that Texas COLT has a planned in-service date as early as late 2021 or early 2022.

[S&P Global Platts]

14/12/2018

By Terje Solsvik

The Norwegian government has postponed a decision on whether to mandate the construction of an oil

processing terminal near the Arctic tip of northern Europe until the third quarter of next year, it said on Friday.

If built, the onshore Veidnes terminal would receive crude via a pipeline from Equinor‘s offshore Johan

Castberg oilfield, which is expected to start producing in late 2022. Equinor

originally ditched plans for an onshore terminal in order to save costs, preferring instead to load oil on to crude

tankers at the field before exporting it to global markets.

Parliament earlier this year urged the government to secure the construction of an onshore terminal, however,

as it would generate significant investment and jobs in the remote region. The energy ministry said on Friday

further studies were needed into the project, which is supported by labour unions. Environmentalists, however,

oppose both the oilfield and the proposed terminal. (Reporting Editing by Mark Potter)

[Reuters]

Dry bulk shipping: Bulk report – Week 50

14/12/2018

VLCC

Middle East Gulf rates shed 11 points to WS 85/86 for 270,000mt to China, with South Korea fixed at WS 84.

Going west, 280,000mt to the US Gulf went at WS 38, but is now assessed at WS 36.5/37 Cape/Cape, down six

points from a week ago. West Africa to China basis 260,000mt lost eight points to WS 84.5. Hound Point to

South Korea went at $7.4 million, while East Coast Mexico to West Coast India fixed at $7.1 million.

Suezmax

West Africa came under renewed downward pressure with rates dropping 17.5 points to WS 97.5/100 for

130,000mt to UK-Cont. Black Sea/Mediterranean rates fell 25 points to WS 130 for 135,000mt, with South

Korea down $400,000 at $4.2 million.

Aframax

The Mediterranean market gained 20 points, as BP fixed 80,000mt from Ceyhan to Fos at WS 205.

205.UML subsequently agreed WS 212.5. Black Sea rates added 12.5 points to WS 215. Baltic rates for

100,000mt initially climbed 7.5 points to WS 152.5, before Total took Delta tonnage at WS 165. Cross North

Sea 80,000mt rates continued to firm, with a short Sture/Slagen run fixed at WS 190. The market is now

assessed at WS 195/200. There was a sharp rise in the Caribbean, with rates gaining 75 points reaching WS

210 for 70,000mt from Venezuela to the US Gulf.

Clean

Rates for 75,000mt Middle East Gulf/Japan eased 7.5 points to WS 177.5, with 55,000mt paying low-mid WS

170s, down from WS 180 the previous week.

It was another busy week on MRs, with WS 215 paid for 37,000mt, Continent/USAC, before Exxon fixed from

Port Jerome at WS 207.5. The 38,000mt backhaul trade from the US Gulf eased five points to WS 200.

[The Baltic Briefing]

14/12/2018

Capesize

A positive end to last week after a somewhat uncertain start as some gains made were eroded. Rates recovered

later for West Australia/China, nudging the high $8.00s with rumours of $9.00 for prompt positions. In

addition, there was finally action from Brazil, with a few cargoes fixed for China as the week closed out with

some early ships covered in the mid-high $16.00s and $17.25 paid for early January. Brokers said there were

fewer ships in ballast.

Atlantic trading also perked up, with fresh business increasingly evident and rates beginning to move, with the

odd weaker rate appearing. On the key Puerto Bolivar/Rotterdam run there were reports that charterers were

now bidding in the low-mid $9.00s, but so far unfixed. A Narvik/El Dekheila cargo allegedly went at $7.90 and

was said to show a timecharter equivalent of over $20,000. Much of the fronthaul fixed was largely breaching

business from St. Lawrence, and on voyage, but rates were assessed around $30,000 daily.

Panamax

A very flat week for the indices with rates mostly hovering at the same levels, however, news of fresh

concluded sales into China boosted sentiment greatly, with much more period activity evident as a result. A

Panamax open South China early January covered for a year at $12,000. Multiple short period trades were also

reported.

The Pacific continued to be propped up by impressive Indonesian volume. The news of thirty cargoes sold from

the NoPac to China, was coupled with improving rates in the North, with Kamsarmaxes fixing at $11,000 or

more for round voyages again. South American trades for December slowed, as most stems have been covered

now. However, rates remained steady, to slightly better, at around $15,750 plus $575,000 ballast bonus for

Kamsarmaxes. In the North, period interest helped increase demand and spot rates saw a slight improvement at

the end of the week.

Supramax

It was a more positive week than of late for the Baltic Supramax Index (BSI). The Index showed some strong

gains, with China buying US soybeans helping to support the market. Period activity remained across both

basins. A 66,000dwt open Indian Ocean fixing at around

$14,000 for four to six months trading. As the week came to a close a more positive sentiment appeared across

some areas.

The US Gulf showing improved activity. Brokers suggested this was due to increased enquiry from East Coast

South America. A 60,000dwt was rumoured fixed from the Gulf for a trip to the Continent in the upper

$17,000s. The Asian market made gains, with better flows for NoPac and Australian cargoes. A 63,000-tonner

fixed delivery Surabaya trip, via West Australia, redelivery China at $13,500. There was stronger demand from

SouthEast Asia, with more coal being shipped. A 63,000dwt vessel was booked delivery Gresik trip, via

Indonesia, redelivery CJK in the low $14,000s.

Handysize

The overall Baltic Handysize Index (BHSI) recorded a similar level as it achieved in December 2017. Rates

from East Coast South America improved, but negative sentiment from the US Gulf market became more

evident last week with limited cargoes. The Pacific market was again less active as Christmas approached. On

the period front, a 37,000dwt vessel open North Coast South America went for four to six months at $12,000,

with redelivery within the Atlantic.

A 32,000dwt open Canakkale fixed for a trip to the Spanish Mediterranean at $13,750, while another

34,000dwt open Otranto did a similar run at $12,500. A 37,000dwt was booked for woodpellets from US East

Coast to the Continent at $14,000 in mid-week, and later, a 38,000 tonner went for a similar trip in the mid

$12,000s. A 32,000dwt open Singapore went for a trip via Indonesia to Thailand early last week in the East. A

38,000dwt in Vietnam fixed via Indonesia to China at the same rate.

Panama Canal: Expansion builders told to repay almost $1 billion of cost overruns

[The Baltic Briefing]

14/12/2018

The Panama Canal Authority said on Wednesday that an arbitration tribunal had ordered the construction

consortium behind the waterway‘s expansion to return $848m in cost payments.

The ruling hits the group of contractors that make up the Grupo Unidos por el Canal, or GUPC, which includes

Salini Impregilo of Italy and Sacyr of Spain as well as Jan De Nul of Belgium and local firm Constructura

Urbana.

The decision, by the Miami office of the International Chamber of Commerce, puts an end to a dispute between

the authority and GUPC over who should pay for a cost overrun on the expansion project, which was completed

in 2016. The authority said the $848m accounted for

advances that had been granted to the consortium. Last year, the tribunal rejected a demand by GUPC for

$193m.

The newly built Agua Clara locks, on the Atlantic side. Credit: US Department of Transport

Altogether, the project left $5.2bn in disputes to be decided in arbitration awards between the authority and

the consortium. A first decision on this larger question is expected by the end of next year.

Salini General Manager Massimo Ferrari told Reuters on Thursday that the group would pay back $217m

Container shipping: Rates from China to the U.S. have more than doubled as trade war

sparks a 'bonanza'

with a further $117m, which relates to variation orders. This depends on a court decision expected in March.

Shares in Salini fell almost 20% on Thursday.

[Global Construction Review]

14/12/2018

Freight prices for containers going from China to the U.S. have surged over 100 percent from a year ago as of

the beginning of December, according to data from Freightos, an online freight marketplace.

The price of shipping a container from China to the United States has risen dramatically in the last year due to

uncertainty surrounding trade tensions between Washington and Beijing. That's because Chinese exporters

have been rushing to get goods to U.S. ports before new tariffs kick in, but data are suggesting that trend may

soon run out of steam.

China and the U.S., the world's two largest economies, have been locked in a tit-for-tat tariff fight over the

last year, levying duties on each other's imports worth hundreds of billions of dollars in the last few months.

Increasingly strong fears of an all-out trade war have inspired exporters to push forward shipment dates — a

phenomenon called front-loading.

In fact, freight prices for containers going from China to the U.S. have surged more than 100 percent from a

year ago as of the beginning of December, according to data from Freightos, an online freight marketplace,

"Transpacific ocean freight peak season has been a bonanza, with prices still more than double last year," said

a report on the most recent Freightos data published on the Baltic Exchange's news website. That was as

freight rates for China to the U.S. West Coast jumped 128 percent while those from China to the U.S. East

Coast surged 123 percent compared to the same period a year ago.

Source: Freightos

In contrast, China to North Europe freight rates were up just 11 percent in the same period due to pre-Christmas

cargoes. In fact, even before a September announcement that tariffs will be hiked, many importers were already

stocking up as front-loading boosted the Chinese export machinery.

"Many importers from China front-loaded in advance of the 1 January scheduled increase to the 10% trade

tariff. That boosted transpacific peak pricing, but there is a limit as to how much front-loading you can, or

should, do," Zvi Schreiber, CEO at Freightos, said in a statement cited by the Baltic Exchange's site.

Changing trade routes

American tariffs on $200 billion of Chinese imports were set to rise sharply on Jan. 1, but those have since been

put on hold following U.S. President Donald Trump and Chinese President Xi Jinping's recent meeting at the

G-20 in Argentina. There, they agreed to a 90-day ceasefire on tariff escalations while the two sides continued

to negotiate a potential agreement. However, analysts and markets are skeptical about a lasting truce given the

back-and-forth between the two economic powerhouses.

"The irony is that after ... Trump has turned up the rhetoric, the United States has started importing even more

from China," said Soren Skou, CEO of Maersk, the world's largest container shipper by capacity, according to

a November Reuters report. Maersk's data indicated China's shipments to the U.S. had grown 5 to 10 percent in

the third quarter compared to the prior year as retailers built up their inventories to avoid any new levies, Skou

said, according to Reuters.

Supply chain management departments in a range of industries have been on their toes for months. Exporters

and logistics executives have confirmed the shifting of trade routes as factories rush to fulfill orders before a

tariff hike.

Bunkering: North P&I warns owners of contaminated bunker risks

The U.S.-China tariff battle is even affecting the air cargo industry: Recently, the president and CEO of airport

ground-handler and catering solutions provider SATS told CNBC his company has seen changes in routes due

to the trade war.

Chinese data show slowing growth

Despite surprising on the upside for much of the year, Chinese data have shown the country's economy is now

coming under some pressure. In November, growth in China's manufacturing sector stalled for the first time in

over two years as new export orders shrank, an official survey of large enterprises showed. A private survey

confirmed a shrinking of export orders for small and medium companies as well.

Chinese customs data confirmed the slowing of export growth as the value of November shipments out of the

country only rose 5.4 percent from a year earlier — the weakest performance since a 3 percent contraction in

March, and well short of the 10 percent forecast in a Reuters poll. The customs data showed that annual growth

for exports to all of China's major partners slowed significantly. That was even true for exports to the United

States, which in November rose 9.8 percent from a year earlier — marking a slowdown from October's 13.2

percent year-over-year growth.

On Friday, the Chinese statistics bureau reported slower-than-expected industrial output and retail sales growth

for the month of November.

[CNBC / Reuters]

13/12/2018

By Ed Martin

The risks posed by contaminated bunkers are ―one of the biggest challenges facing the marine fuels industry,‖

according to North P&I director of freight, demurrage and defense (FD&D), Mark Church.

Speaking at the recent Tackling Global Challenges event in London, Mr Church noted the spate of

contamination problems which originated in Houston earlier this year, and which are believed to have resulted

from a contaminant known as 4-cumylphenol and other fatty acids entering the supply chain via cutter stock.

Such contamination is undetectable via conventional fuel testing methods, meaning owners are only alerted to

a problem at the point of use, potentially resulting in serious mechanical failures. Mr Church said that the total

number of affected vessels may be in the 300-400 range and that North P&I itself has dealt with claims from 40

members.

From a legal standpoint, another problem exists in that owners who take on contaminated bunkers may find it

difficult to find a remedy from suppliers, if, from a supplier‘s perspective, the bunkers are compliant with the

stated specification under ISO 8217.

Mr Church also flagged up concerns related to the strict time bars associated with bunker supply contracts. He

explained that owners may only discover a problem with their bunkers once the period for notification of such

issues to suppliers has passed.

Transparency & corruption: Nigeria files $1.1 billion London lawsuit against Shell and Eni

over oil deal

Marine pollution U.S.: Greek shipping company fined $2 million for illegal discharges

caught on camera

―It‘s not great if it‘s taking you 20 days to do the tests to establish there is something wrong and then you find

out … you have to [bring a claim] within 10-15 days after stemming the bunkers.‖

However, he also noted that the time bar itself does not prevent a claim being brought and while suppliers may

use it as a defense, owners can get around this. Given the difficulties involved in testing, it can also be difficult

to establish that the cause of an incident, and any subsequent issues, stems from organic compounds in the fuel.

There is some good news though, according to Mr Church; most contracts will have a ―fit-for-purpose‖ clause,

so if an owner can demonstrate that the bunkers are not fit for purpose, a claim may be brought against a

supplier or charterer, if they are responsible for bunkers, on this basis.

Mr Church advised owners to sample and test fuels and to check contracts and consider agreeing a specification

that deals with this specific issue. He also suggested gaining a familiarity with time limits and sampling

responsibilities and, if a concern arises, to consider debunkering.

―We would hope and expect that courts may have sympathy with an owner who decides, on reasonable

grounds, that there may be a problem with these bunkers and takes the decision to debunker, rather than run the

risk of a serious main engine problem,‖ he said.

To help avoid contamination in the first place, Mr Church advised owners to use reputable bunker suppliers,

conduct regular monitoring of the engine function and to avoid mixing fuels in storage tanks or during fuel

changeover. He warned that contamination may rise in coming years, as more blending takes place to ensure

compliance with the 2020 sulphur cap.

[Container Shipping & Trade]

13/12/2018

Lawyers for the Nigerian government said they had filed a $1.1 billion (869 million pounds) lawsuit against

Royal Dutch Shell and Eni in a commercial court in London on Thursday in relation to a 2011 oilfield deal.

The OPL 245 oilfield is also at the heart of an ongoing corruption trial in Milan in which former and current

Shell and Eni officials are on the bench.

"It is alleged that purchase monies purportedly paid to the Federal Republic of Nigeria were in fact immediately

paid through to a company controlled by Dan Etete, formerly the Nigerian minister of petroleum, and used for,

amongst other things, bribes and kickbacks," the statement said.

[Reuters]

13/12/2018

By Mike Schuler

Greek shipping company Navimax Corporation has been sentenced to pay a $2,000,000 fine by a federal

district court in the United States for violating the Act to Prevent Pollution from Ships and obstructing a Coast

Guard investigation, the U.S. Department of Justice announced Wednesday.

Navimax is incorporated in the Marshall Islands and has its main offices in Greece. According to court

documents and statements made in court, Navimax operated the Nave Cielo, a 750-foot crude oil tanker

registered in the flag of convenience country (FOC) Cayman Islands.

Source: Equasis

Prior to a formal inspection on December 7, 2017, the U.S. Coast Guard boarded the vessel near Delaware City

when a crewmember gave the officers a thumb drive containing two videos showing a high-volume discharge

of dark brown and black oil waste from a five-inch pipe, located 15-feet above water level.

A subsequent investigation and inspection on December 7, 2017, determined that the approximately 10-minute

discharge occurred on November 2, 2017, in international waters, after the ship left New Orleans en route to

Belgium. During the Coast Guard boarding on December 7, crewmembers presented the ship‘s Oil Record

Book, which did not record this discharge.

The Act to Prevent Pollution from Ships is a codification of international treaties known as the ―MARPOL

Protocol,‖ and ensures that oily waste is properly stored and processed at sea. The law requires that all ocean-

going ships entering U.S. ports must maintain an Oil Record Book in which all transfers and discharges of

oily waste, regardless of the ship‘s location in international waters, are fully recorded.

The district court ordered Navimax to pay the $2,000,000 fine immediately and placed the company on

probation for four years. ―The defendant violated environmental laws that protect our marine environment

from harmful pollution,‖ said U.S. Attorney for the District of Delaware David C. Weiss. ―The conviction and

criminal fine, reinforced by a four-year term of probation, during which the defendant‘s fleet of ships will be

monitored, ensures that defendant is held accountable. The message to the shipping industry is clear:

environmental crimes at sea will not be tolerated.‖

[gCaptain]

13/12/2018

In a new report, researchers from Macquarie University are calling for a rethink of global shipping routes, to

protect whales and sharks from becoming marine 'roadkill'.

Credit: Vanessa Pirotta

.

More than 10 billion metric tons of goods travel by sea each year, making up 80 per cent of the world's

merchandise trade. The continual growth of the shipping trade and rebounding of some whale populations

post-whaling is leading to increasing clashes between cargo ships and marine giants. Melting sea ice has

opened up new shipping routes through previously untouched whale habitats.

Marine megafauna like Great Whales, whale sharks and basking sharks are particularly vulnerable to ships

because of their size, migration routes and the whales' need to travel close to the surface for air. Deadly ship

strikes are not the only threat to the animals, with vessel noise disrupting whales' delicate communication, and

chemical pollution and heavily used routes fragmenting habitats.

Whale researcher Vanessa Pirotta from Macquarie University's Department of Biological Sciences said lessons

from the wildlife impacts of roads could be applied to the ocean, to prevent marine giants becoming 'roadkill'.

"New shipping routes through whale habitat put vulnerable species at risk, and this study provides a new

understanding of how to mitigate shipping traffic impacts on these marine giants," Ms Pirotta said.

Oceans: Whale experts call for rethink of global shipping routes to stop marine giants

becoming 'roadkill'

Oceans: Fisheries compete with shrinking seabird population for food

The authors of the report Consequences of global shipping traffic for marine giants propose limiting the

creation of new shipping routes in areas such as the Arctic and broadening shipping exclusion zones to take into

account the impact of ships beyond the marine roads themselves, such as noise pollution and chemical

contamination.

Designing cleaner and quieter ships would reduce the risk of oil spills and chemical pollution and reduce

underwater noise. In addition, implementing speed limits and detours around whale habitats at certain times of

year would mitigate some of the negative consequences.

Ms Pirotta said: "New technologies can accurately monitor whale populations and behaviour, and if combined

with data about shipping routes and intensity, could provide a clearer picture of their interaction.

"Looking at the impacts of roads on wildlife populations can then help predict what might happen if the

shipping industry continues to expand, and this can inform better management plans to protect our marine

giants."

[Macquarie University / phys.org]

13/12/2018

A pioneering study by French, Scottish and Canadian researchers has found that industrial fisheries are

competing with seabirds for seafood resources, and that a corresponding decline in available food may be a

contributing factor in the birds' plummeting population numbers.

The new report, Persisting worldwide seabird-fishery competition despite seabird community decline, was

published in the latest edition of Cell Press' Current Biology, and it finds that seabird fish consumption

decreased by nearly 20 percent between two twenty-year periods,

Oceans: Scientists decry lack of data on marine pollution

from 1970-89 and 1990-2010. Between the same time periods, global catch doubled; in the fisheries competing

geographically with seabirds, it rose by 10 percent.

The team found enhanced competition between birds and fishing boats in half of all studied areas, notably the

Southern Ocean, Asian littorals, Mediterranean Sea, Norwegian Sea, and California coast. The team described

the competitive pressure as a "severe constraint" on seabird populations, which have declined by 70 percent

between 1950 and 2010. Seabirds are now considered the most threatened bird group.

The study relies on a library of population data representing about 60 percent of the world's seabirds. Based on

regional population numbers, species-specific counts and metabolic rates, the team estimated that the bird's

overall food consumption fell by 19 percent between the two periods reviewed. Populations in the Southern

Ocean and North Atlantic were particularly affected, and diving petrels, frigatebirds and terns were the species

hardest hit. The research team compared this inferred consumption data with fishery records covering the same

geographic range to determine the proportion of the take captured by each.

While many other factors have had an impact on bird populations - like bycatch, habitat reduction, climate

change, pollution and ocean plastics - the authors noted other regional studies that show fishing's impact on

seabird populations.

"Competition with fisheries should . . . be regarded as one of the numerous stressors acting upon the fitness of

individual seabirds and, ultimately, upon population trajectories. As our study indicates, this threat should not

be neglected as it is substantial and global," the researchers concluded.

―You have more and more fishing effort for less and less potential seabird prey, consumed by fewer birds,‖ said

lead author David Grémillet, a scientist with France's National Center for Scientific Research (CNRS), in a

statement. ―The noose is tightening around seabirds - I find this terrifying.‖

[The Maritime Executive]

13/12/18

Scientific databases contain little information on pollution in marine conservation areas, according to a broad

review of research on chemical pollution and its biological effects on the ocean.

A team of researchers in Brazil found just 1,291 scientific papers on such pollution, even though litter and

toxic spillages in marine protected areas are among the main threats to ocean wildlife conservation. When the

researchers undertook a proper content analysis of the articles, only 96 papers remained that thoroughly

studied the problem, covering just 0.6 per cent of all marine protected areas around the world.

Ocean pollution is a serious threat to marine biodiversity. Credit: Panos

The studies reported problems with the sites they analysed, but levels of information on pollution were

usually insufficient to correctly diagnose threats and support further actions a review, titled Pollution status of

marine protected areas worldwide and the consequent toxic effects are unknown, published in Environmental

Pollution, pointed out.

―On face of it, we cannot estimate long-term effects of pollution in these sites, nor compare pollution to other

known threats to marine protected areas,‖ says Denis Moledo de Souza, an oceanographer at the State

University of Sao Paulo and lead author of a study.

He explains that, in the complex oceanic ecosystem, contaminants are likely to act in tandem with other

stressors, making it hard to pin down a single cause for wildlife deterioration. ―We may only speculate that

the outcome of such interactions is the loss of species and the decline of ecosystems within marine protected

areas,‖ he points out.

According to the paper, there are 13,674 marine protected areas spread out across the globe. These sites are

usually created to protect or restore marine habitats, biodiversity, ecological processes and to help maintain

fishery productivity. This, in turn, may reduce biodiversity loss and improve economic activity, as well as

boosting sustainable development. Yet, the World Wildlife Fund estimates that only 4 per cent of the world‘s

oceans are protected, and most of existing marine parks and reserves are either poorly managed or not looked

after at all.

―Marine protected areas conservation would be effective only if it is managed properly, if stressors are

controlled and if data are available to properly assess management policies,‖

Souza highlights. ―This includes information on pollution caused by chemical substances released into the

sea.‖

Alexander Turra, an oceanographer at the University of Sao Paulo‘s Oceanographic Institute, agrees that

systematic studies on marine conservation units are rare and that such monitoring is usually not part of their

management policies. ―It tends to hamper researchers working on the evaluation of the quality of marine

:

Research & development Germany: Government to provide EUR 45 million for research in

zero-emission ship engines

Research & development UK: £1.6 million grant to investigate shipping emissions in the

Arctic and North Atlantic

conservation units and whether they are reaching the goals for which they have been created‖, he tells

SciDev.Net.

Turra adds that marine protected areas are not immune to contamination, even if they are located far from a

source of pollution. That is because pollutants are able to travel long distances in the water and are carried

along by tides and ocean currents. The main pollution sources that threaten ocean health include sewage,

mining, urban drainage, sediment dredging and disposal, oil exploitation and spills, marinas and factories

using sea water.

Hudson Pinheiro, an ichthyologist at the California Academy of Sciences in the United States, says that

activities with high pollution potential are heavily regulated in developed countries, as their ecological

impacts have been known for a long time. ―However, in developing countries, even knowing the potential

polluter, environmental requirements are weaker and consequently the environment and society end up

paying the price,‖ he tells SciDev.Net.

To address the problem, Turra suggests that marine protected areas should work closely with local

universities and research centres. This would help them ―draw up proper management plans and systematic

evaluations of their conservation status‖, he says.

[SciDev.Net]

13/12/2018

By Benjamin Wehrmann

The German government has set aside EUR 45 million for research in zero-emission ship engines to ―make a

significant contribution to the energy transition at sea‖, the German economy and energy ministry (BMWi)

says in a press release.

The programme, dubbed Maritime Green Propulsion, aims to develop ships that run completely carbon-free

and in a first step explores the use of so-called e-fuels made with renewable power. Germany‘s maritime

policy coordinator, Norbert Brackmann, said there was ―a sort of gold rush atmosphere‖ for developing

cleaner engines among engine manufacturers which now had to be assisted by clearer regulation and

financial support.

[Clean Energy Wire]

13/12/2018

Scientists at the University of Birmingham have been awarded £1.6M by the Natural Environment Research

Council to lead a project investigating shipping emissions in the Arctic and North Atlantic atmosphere.

Research & development UK: £1.6 million grant to investigate shipping emissions in the

Arctic and North Atlantic

Called SEANA (Shipping Emissions in the Arctic and North Atlantic Atmosphere), the project also includes

partners from the University of Exeter, British Antarctic Survey and Cranfield University. It will run for 5

years from the start in 2019.

Dr Zongbo Shi, Professor Roy Harrison, Dr David Beddows and Dr Manuel Dall‘Osto (honorary researcher),

of Birmingham‘s School of Geography, Earth and Environmental Sciences, aim to better understand the

impact of increasing ship traffic in the Arctic and also the impact of the International Maritime

Organization‘s (IMO) emission regulation on atmospheric aerosols and the climate in the Arctic and North

Atlantic Atmosphere (ANAA).

The SEANA team has also been granted accesses to NERC‘s high-performance computer – ARCHER, as

well as a scientific expedition to the Arctic in 2021, possibly by the new £200M NERC polar ship - RRS Sir

David Attenborough.

Ship emissions are a significant source of aerosol particles in the marine atmosphere. They have a major

impact on the climate by reflecting sunlight back to space and by changing cloud properties. Quantifying the

impact of ship emissions on the climate is challenging, however, due to a lack of understanding of ocean-

derived aerosol particles (a dynamic baseline from which predictions are made) as well as uncertainty in

quantities of pollutants emitted from current and future shipping industries. This is particularly true at high-

latitudes.

Dr Zongbo Shi, lead investigator from the University of Birmingham‘s School of Geography, Earth and

Environmental Sciences, said: ‗The new IMO regulation will be implemented in January 2020 to reduce the

maximum fuel sulphur content by ships in international waters from 3.5% to 0.5%. This offers an

unprecedented and never-again opportunity to observe how our atmosphere responds to this major ‗natural‘

perturbation. Such observations will significantly enhance our understanding of the role of shipping

emissions play in the wider climate change debate. This will help us to validate and improve global climate

models to more accurately predict climate change and to find out how we can best tackle this issue.‘

SEANA will, for the first time, carry out synergistic yearlong observations at Faroe Islands and Greenland

and intensive field studies on research ships along the Northwest Passage (NWP), with a focus on aerosol and

cloud condensation nuclei (CNN) sources and processes. The new data will be integrated with recent and

ongoing measurements at existing ANAA stations in order to generate a benchmark dataset on aerosol

baselines in ANAA. SEANA will also

employ a ‗before and after‘ regulation observation to determine the ―real-world‖ impact of IMO regulation

on aerosol and CCN.

The new datasets will be used to evaluate and improve a state-of-the-art global aerosol model to represent

key aerosol sources and processes, including shipping emissions as well as model responses to emission

changes in ANAA. The researchers will apply their improved model to provide robust predictions on both the

impact of future shipping traffic and IMO regulation on aerosol and the climate in the Northwest Passage.

[University of Birmingham]

13/12/2018

The Court of Justice of the European Union (CJEU) has cancelled the approval of the Fehmarn Belt fixed

rail-road link‘s financing model.

In July 2015, the EU Commission approved the Fehmarn project‘s financing model without opening a formal

procedure. The costs of the entire project are estimated to be DKK 64.4 billion (EUR 8.7 billion), part of

which is funded by the European Union through the Connecting Europe Facility.

Port & Shipping News 50/18 (10 – 16 Dec 2018)

Credit: Alchetron

European ferry operators Scandlines and Stena Line, providing services between Europe and the

Scandinavian peninsula, appealed the decision, describing it as discriminatory and in breach of the EU State

aid rules. Following a three-year long assessment of the case, the EU court found in favor of the two ferry

companies.

―We are satisfied with the ruling of the Court of Justice of the European Union. (…) Scandlines is not against

a Fehmarn connection established with state aid. State aid may be necessary when completing such large-

scale projects,‖ says Søren Poulsgaard Jensen, CEO of Scandlines.

―However, we do expect correct procedure, which entails transparency and fair competition. The aid must

therefore be accurately and realistically defined, and it must be based on consistent assumptions and

safeguarded against abuse. It is decisive for us that the tunnel cannot use the state finances as its sees fit to

impose taxpayer-financed price pressure when traffic volumes do not live up to the optimistic prognoses and

the ferries appear competitive. For the commission, this is basically a ‗do-over‘ with a three-year delay. It is

better late than never, but it is thought provoking that we as a private company have to spend time and money

on ensuring that the EU commission complies with applicable rules.‖

Container shipping: EU consults on the future of the block exemption regulation for liner

shipping consortia

As explained, another reason behind Scandlines‘ complaint is that the commission, approved state aid for at

least 55 years following the opening of the tunnel, which is in stark contrast to the payback time of 36 years,

the company pointed out.

The arguments are in line with Stena Line‘s appeal which questioned the necessity of the aid, the duration of

the aid and the undue distortion to the market by allowing the Fehmarn fixed link to dramatically reduce

prices.

―In this case State aid has been granted illegally. That‘s why we welcome the decision from the court to annul

the aid granted by the Commission for the construction of the Fehmarn Belt connection,‖ Claes Berglund,

Director Public Affairs and Sustainability, Stena, said commenting on the ruling. ―Before we are able to see

the consequences and what actions we should take or expect the commission to take, we need to analyse the

ruling in detail.‖

[World Maritime News]

13/12/2018

By Anthony Woolich and Jeremy Kelly, HFW

The Block Exemption Regulation for Liner Shipping Consortia (Regulation) exempts certain co-operation

agreements in the liner shipping sector from the prohibition on anti-competitive agreements contained at

Article 101 of the Treaty on the Functioning of the European Union

(TFEU), provided that certain conditions set out in the Regulation are applicable. The Regulation is set to

expire on 25 April 2020.

The European Commission is currently consulting on whether the Regulation should be prolonged belonged

this date and, if so, whether its current text should be amended. Interested stakeholders can submit their

views by 20 December 2018, by responding to the questionnaire available at European Commission.

The current version of the Regulation, adopted in September 2009, gives a degree of legal certainty to liner

shipping companies that their co-operation agreements do not infringe EU competition law.

EU competition law contains a broad prohibition – at Article 101(1) TFEU – on agreements between

companies that have the object or effect of the prevention, restriction or distortion of competition. However,

this prohibition does not apply in the case of agreements between companies that meet all of the following

criteria:

•Contribute to improving the production or distribution of goods or services or to promoting technical or

economic progress.

•Allow consumers a fair share of the resulting benefit.

•Do not impose on the companies concerned restrictions which are not indispensable to the attainment of

these objectives.

•Do not afford the companies concerned the possibility of eliminating competition in respect of a substantial

part of the goods or services in question.

The Regulation provides that certain co-operation agreements between liner shipping companies to carry out

specified activities will be deemed to have met all of these exemption criteria, provided that certain

conditions apply.

Relevant types of co-operation agreements between liner shipping companies that benefit from the

Regulation include:

•The joint operation of liner shipping services, including the coordination of timetables and ports of call, slot

exchanges, pooling of vessels and certain infrastructure, and the use of joint operations offices.

•The ability to make capacity adjustments in response to fluctuations in supply and demand.

•oint operation or use of port terminals and related services such as stevedoring services.

However, the Regulation does not exempt co-operation agreements covering the following types of

activities, which will infringe EU competition law:

• Price fixing.

• Limitation of capacity and sales (other than adjustments made in response to fluctuations in supply and

demand.

• Allocation of customers and markets.

The conditions that must apply for the parties to a co-operation agreement to benefit from the Regulation are,

broadly that:

• The parties to the co-operation agreement have a combined market share of less than 30% on any market on

which they operate.

• Any party to the co-operation agreement is permitted to unconditionally exit the agreement on 6 months‘

notice.

However, if these conditions do not apply to a relevant co-operation agreement, this does not mean that the

agreement will automatically contravene EU competition law.

As the Regulation is stated to apply to companies operating set routes on the basis of a regular timetable, it is

of primary importance to the container shipping industry. Since the application of the Regulation was last

extended in 2014, there has been significant consolidation in this sector. This consolidation may be viewed as

reducing the relevance of the Regulation, as there is now a greater likelihood that the market share threshold

will be exceeded by the parties to agreements. In addition, since the Regulation was last extended, the

Commission has removed another sector-specific block exemption regulation, concerning insurance,

following a public consultation. There are those who argue that consortia have only been tolerated as a

transition to a competitive market and that companies are still losing money and ordering excess capacity.

Container shipping: World Container Index - 13 Dec 2018

It is therefore possible that the Commission will decide not to extend the application of the Regulation

beyond 25 April 2020. In this case, parties to liner shipping co-operation agreements would lose the legal

certainty provided by the Regulation, and would have to self-assess their co-operation agreements‘

compliance with EU competition law. This could be onerous as the number of consortia beyond the three

major alliances is high. Pro-competitive co-operation could be deterred and compliance costs would be

increased. It can be argued that the Regulation creates efficiencies because it is clear and creates a level

playing field with the EU‘s competing trading blocks. If the Regulation were not renewed, the influence of

the EU could arguably be reduced.

The Commission‘s public consultation is available for comment at European Commission, and will end on

20 December 2018. The consultation asks a number of targeted questions regarding the current operation of

the exemption, including:

•its effectiveness in providing legal certainty.

•itts effectiveness in promoting competition.

•its relevance given the current market conditions.

• Likely effects were the Regulation to expire.

[Lexology]

13/12/2018

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 down by 1.2% to $1,622.68 per 40ft container.

Two-year spot freight rate trend for the World Container Index:

Our detailed assessment for Thursday, 13 Dec 2018

with same period of 2017.

•The average composite index of the WCI, assessed by Drewry for year-to-date, is US

$1,516/40ft container, which is $2 higher than the five-year average of $1,514/40ft container.

•The rate drop on Transpacific trade has led to a decline in Drewry‘s composite World Container Index

(WCI) by 1.2% to touch $1,622.68 per 40ft containers. Rates on Shanghai-New York fell by $108 from

$3,449 to reach $3,341 per feu. Freight rates

from Shanghai to Los Angeles dropped by $109 over the last week to stand at $2,077 for a 40ft container.

Meanwhile, rates on Shanghai-Rotterdam went up by $25 to reach

$1,604 per feu. Similarly, rates on Shanghai-Genoa increased to $1,670 – a change of

$62 – for a 40ft box. Drewry expects rates to soften next week.

Our latest freight rate assessments on eight major East-West trades:

Spot freight rates by route - assessed by Drewry

Container shipping: Alphaliner questions instant box booking rationale

Source: Drewry Supply Chain Advisors

[Drewry]

13/12/2018

By Linton Nightingale

With CMA CGM following in the footsteps of Maersk Line and Hapag-Lloyd by offering customers instant

online booking, Alphaliner raises concerns about the viability of such platforms. The industry analyst also

points to Maersk‘s short-lived Youship product and how the factors that led to its downfall fundamentally

remain.

CMA CGM‘s decision to offer instant online bookings has led some analysts to recall the fate of a previous

attempt to create a similar platform more than a decade ago. CMA CGM announced a pilot agreement earlier

this month to sell container slots on east-west services directly to shippers on freight marketplace Freightos.

The agreement allows for online bookings, guaranteed pricing and secured capacity on the Marseille-based

line‘s China-US services, with plans in place to roll out the new product on other trades, including Asia. This

follows similar moves by its European counterparts, Maersk Line and Hapag-Lloyd, which have both

launched their own instant online freight offers in recent months. All three lines have credited their respective

platforms as a significant stride forward for container shipping, effectively allowing box booking to be as

easy as booking a flight. But this premium offer for customers is not entirely new, according to Alphaliner.

Container shipping: Carriers‟ earnings in the coming quarters will be overshadowed by

an array of challenges

In 2008, Maersk Line launched a similar product, called Youship. It granted customers guaranteed vessel

space and instant shipping confirmation. Upon payment, the freight rate was listed online.

―The Maersk initiative was one of the first attempts at taking container shipping into the digital era,‖ said

Alphaliner. ―Aimed at simplifying shipments for small businesses, it was marketed as ‗making container

shipping just as easy as ordering airline tickets, books, car rentals or takeaway food online‘.‖

Despite claims from the Danish line that the product was a success, it pulled the plug on its online booking

portal just over 18 months later after its inception. It was abandoned in October 2009. ―Maersk said at the

time that the service could work only ‗when shipping capacity was constrained‘,‖ said Alphainer. ―Although

Maersk stated that the service was ‗temporarily on hold‘, the initiative was never revived.‖

If carriers‘ latest online platforms are not to follow a similar fate, Alphaliner stresses that several key

characteristics of the container shipping market must be overcome. First, is how smaller and occasional

shippers, for which these online platforms cater, make up only a small percentage of the market — no more

than 5%, on the ‗high-volume trade lanes‘, such as the transpacific and Asia-Europe.

Alphaliner also highlighted how freight rates on such public pricing platforms are often higher than market

levels, since carriers will charge a premium for guaranteed space and the smaller volumes involved.

Furthermore, there is also the danger that shippers could use freight rates on these platforms as leverage to

negotiate a better rate with competitors.

―As Maersk succinctly pointed out back in 2009, online pricing platforms are attractive when there are

capacity constraints on trade lanes which would make it difficult for small shippers to secure attractive rates

and space guarantees,‖ said Alphaliner. The issue is when space constraints are no longer apparent, as it

would be difficult to justify rate premiums.

For CMA CGM, the litmus test for its Freightos offering will be when utilisation levels on the transpacific

fall. This scenario looks increasingly likely in the new year with volumes expected to slow after the

unprecedented volume spike because of cargo frontloading ahead of proposed tariffs.

―Several online freight platforms introduced in the past few years to cater for container shipments all failed to

take off, and transacted volumes never grew beyond a very small scale,‖ said Alphaliner.

―It remains to be seen if a platform that offers instant online container freight rate quotations,

together with the promise of guaranteed pricing and secured space, will fare better this time

.‖ [Lloyd‘s List]

13/12/2018

Maersk, COSCO and Hapag-Lloyd performed better compared to Q3 2017, with Maersk turning a profit and

COSCO and Hapag-Lloyd increasing profits, while CMA CGM, Evergreen, HMM, Yang Ming and ZIM

recorded weaker results from Q3 2017.

For the first nine months of 2018, Maersk, CMA CGM, COSCO and Hapag-Lloyd posted a net profit, while

Evergreen, HMM, Yang Ming and ZIM recorded losses, as illustrated in the chart below.

Although Japan‘s three primary liner companies — Kawasaki Kisen Kaisha (―K‖ Line), Mitsui

O.S.K. Lines (MOL) and Nippon Yusen Kabushiki Kaisha (NYK Line) — did not post results for the quarter

ending Sept. 30, they did post results for the six months ending Sept. 30. ―K‖ Line and NYK fell into the red,

while MOL posted a smaller net income compared to the corresponding prior year period.

Spot rate trends

Spot container rates have been collectively declining in recent months, illustrating the traditional, seasonal

downfall after peak season, likely coupled with the surge in moving goods from China to the U.S. ahead of

tariffs starting to dwindle down, but are still substantially higher from a year prior, according to data from

Drewry‘s World Container Index (WCI) and the Freightos Baltic Index (FBX).

The WCI measures spot container rates on routes between Asia, Europe and the United States, and the FBX

measures spot container rates on routes between Asia, Europe, North America and South America. As of the

first week of December, the WCI stood at $1,643 per FEU, down from $1,773 per FEU during the first week

of September, but still substantially higher from

$1,157 per FEU during the first week of last December, as illustrated in the chart below, which was built

using data from the WCI.

The FBX mirrors this trend, standing at $1,589 per FEU as of the first week of December, down from $1,647

as of the first week of September, but still higher from $1,016 per FEU as of the first week of December

2017, as illustrated in the chart below, which was built using data from the FBX.

Looking at routes from Asia to the East and West Coasts of North America, the WCI and FBX illustrate spot

container rates during the first week of this December were drastically higher from a year prior, but took a

sharp downturn from a week earlier, as illustrated in the charts below.

In regard to the top players on the Asia to North America trade in general, based on weekly allocated

capacity, data from BlueWater Reporting‘s Carrier Trade Route Deployment Report shows the Ocean

Network Express (the combined container operations of ―K‖ Line, NYK and MOL) comes in first at 68,292

TEUs per week, followed by Maersk at 64,231 TEUs per week, Evergreen Line at 48,124 TEUs per week,

COSCO at 46,891 TEUs per week and CMA CGM at 40,644 TEUs per week.

Capacity management

On a bright note for carriers, container volumes growth in 2019 is expected to be stronger than capacity

growth during the year, which potentially could help keep spot rates strong.

Clarksons Research said in its October issue of Container Intelligence Monthly that container trade growth is

expected to stand at 4.4 percent for 2019, while containership capacity growth is expected to total 3.3

percent.

Yang Ming said in November, ―Going forward into next year, Alphaliner‘s latest projection predicts an

increase of 4.3 percent in global throughput, which will exceed forecasted capacity growth of 3.9 percent.‖

An economic downturn

Although world trade currently remains strong, it appears that strength is expected to soon weaken.

LogIndex, the data company of global third-party logistics provider Kuehne + Nagel, said that at the end of

November, its gKNi World Trade Indicator (WTI), which measures the momentum of cross-border

merchandise trade, stood at a reading of 143.7 points, up 0.3 percent month-over-month and up 6.4 percent

year-over-year.

Measured in nominal USD terms and seasonally adjusted, the WTI summarizes LogIndex‘s export and

import estimates of prominent trade partners, accounting for more than 60 percent of international trade and

more than 75 percent of global GDP.

Commenting on the late November WTI reading, LogIndex said, ―The World Trade Indicator not only

reached a new record high, but this was also the fifth sequential increase since June. The main driver is strong

domestic demand in the United States, but also in China.‖ However, data from the World Trade Organization

(WTO), the International Monetary Fund (IMF) and the Organisation for Economic Co-Operation and

Development (OCD) illustrate an economic downturn is likely on the horizon.

In late September, the WTO said it expects growth in merchandise trade volumes will total

3.9 percent for 2018 and 3.7 percent for 2019, below the organization‘s estimates in mid- April, when it said

it expects growth in merchandise trade volumes would total 4.4 percent for 2018 and 4.0 percent for 2019.

The WTO said in September that its economists expect that ―escalating trade tensions and tighter credit

market conditions in important markets will slow trade growth for the rest of this year and in 2019.‖

Furthermore, the latest reading of the WTO‘s World Trade Outlook Indicator (WTOI), which was released

Nov. 26, illustrated the index stood at 98.6, below the prior reading of 100.3 that was released Aug. 9 and the

lowest level since October 2016.

The WTO said the latest reading signals that ―trade growth in the coming months is expected to be below

trend.‖

Readings of 100 indicate growth in line with medium-term trends, while readings over 100 suggest above-

trend growth and readings below 100 indicate a decline.

Meanwhile, the IMF said in its World Economic Outlook released in October that it expects the global

economy will grow 3.7 percent in 2018 and 3.7 percent in 2019, down from its April projection of 3.9 percent

in 2018 and 3.9 percent in 2019.

―The downward revision reflects surprises that suppressed activity in early 2018 in some major advanced

economies, the negative effects of the trade measures implemented or approved between April and mid-

September, as well as a weaker outlook for some key emerging market and developing economies arising

from country-specific factors, tighter financial conditions, geopolitical tensions and higher oil import bills,‖

the IMF said.

―Global growth is expected to remain steady at 3.7 percent in 2020, as the decline in advanced economy

growth with the unwinding if the U.S. fiscal stimulus and the fading of the favorable spillovers from U.S.

demand to trading partners is offset by a pickup in emerging market and developing economy growth,‖ the

IMF added. ―Thereafter, global growth is projected to slow to 3.6 percent by 2022-23.‖

Meanwhile, the OECD said in November it expects global GDP will expand by 3.7 percent in 2018, 3.5

percent in 2019 and 3.5 percent in 2020, compared to its September projection of

3.7 percent growth for 2018 and 3.7 percent growth for 2019 and its May projection of 3.8 percent growth for

2018 and 3.9 percent growth for 2019.

―Global economic growth remains strong but has passed its recent peak and faces escalating risks, including

rising trade tensions and tightening financial conditions,‖ the OECD said in November, adding that annual

shipping traffic growth at container ports, which represents around 80 percent of international merchandise

trade, has fallen to below 3 percent from close to 6 percent in 2017.

Maersk said when releasing its third-quarter results in November that ―the moderation of container demand

growth compared to 2017 mirrors the gradual slowdown in global macroeconomics and global export orders.

―Global container trade continued to lose momentum in Q3 2018, with growth down to around

2.7 percent compared to Q3 2017,‖ the Danish shipping conglomerate said, adding that global container trade

was projected to increase by 3 percent to 4 percent in 2018 and ―in the lower part of‖ 2 percent to 4 percent in

2019.

―Aside from the cyclical slowing of the global economy, the main risks to global container demand relate to

the introduction of additional tariffs and other trade restrictions and a sharp slowdown in global growth

because of tightening U.S. monetary policy and investors taking an increasingly risk off attitude toward some

economies,‖ Maersk added. ―The impact on global trade remains uncertain, but we estimate that the

combined effect of all trade restrictions introduced during 2018 could reduce global container trade‖ by 0.5

percent to 2 percent during 2019-20.

In particular, the future of U.S.-China trade also will continue to have a substantial impact on liner shipping,

considering data from the U.S. Trade Representative shows that China was the United States‘ third-largest

goods export market in 2017 and the United States‘ largest supplier of goods imports in 2017.

The White House issued a press release on Dec. 1 saying that President Donald Trump ―at this time‖ agreed

to leave the third tranche of Section 301 tariffs, which are on goods that collectively have an annual import

value of $200 billion, at the 10 percent rate rather than raise them to 25 percent on Jan. 1.

―China will agree to purchase a not yet agreed upon but very substantial amount of agricultural, energy,

industrial and other product from the United States to reduce the trade imbalance between the two countries.

China has agreed to start purchasing agricultural product from our farmers immediately,‖ the White House

said. ―President Trump and President Xi have agreed to immediately begin negotiations on structural

changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber

intrusions and cyber theft, services and agriculture.

―Both parties agree that they will endeavor to have this transaction completed [by March 1]. If at the end of

this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25

percent,‖ the White House added.

The OECD said in November, ―If the U.S. hikes tariffs on all Chinese goods to 25 percent, with retaliatory

action being taken by China, world economic activity could be much weaker. By 2021, world GDP would be

hit by 0.5 percent, by an estimated 0.8 percent in the U.S. and by 1 percent in China.‖

Fuel headwinds

The global average bunker price of IFO 380, which has a maximum sulfur content of 3.5 percent and is

widely used by liner carriers today, stood at $450.50 per metric ton as of last Friday, up from $393.50 per

metric ton as of Dec. 7, 2017. In recent weeks though, prices have fallen, as illustrated in the chart below,

which was constructed using data from Ship & Bunker.

Terminal operators U.S.: Seagirt Marine Terminal in Baltimore to deepen second berth to

50 feet

However, on Friday, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC

producers, including Russia, said they would collectively cut crude oil supply by 1.2 million barrels per day

for the first six months of 2019, which could drive bunker prices back up in the coming months.

Regardless, complying with the IMO‘s 2020 sulfur cap, which kicks into gear on Jan. 1, will be costly for

carriers. The sulfur cap will require them to use liquefied natural gas as a fuel, install scrubbers or use fuel

with a sulfur content of 0.5 percent or less.

CMA CGM said the cost for low-sulfur fuel oil is ―expected to be significantly higher than IFO

380.‖

In recent months, several prominent liner carriers, including Maersk Line, MSC, CMA CGM and Hapag-

Lloyd, have issued new bunker charge mechanisms from the start of 2019 to deal with higher fuel costs,

but uncertainty remains in how successful carriers will be in recovering these higher costs from their

customers.

Scrubbers also are an expensive option, with the cost to retrofit a 12,000-TEU to 14,000-TEU containership

with scrubber technology falling between $6 million and $7 million, Clarksons Research said in September

2017. To retrofit a 1,000-TEU to 1,999-TEU container vessel with scrubber technology would cost between

$1 million and $2 million.

Installing scrubber technology on a newbuild containership between 12,000 TEUs and 14,999 TEUs would

cost $5 million to $6 million, the firm added, while installing scrubber technology on a newbuilding

container vessel between 1,000 TEUs and 1,999 TEUs would cost between

$900,000 and $1.2 million.

In regard to the extra costs this will place on the industry and who will pay for it, Drewry said in October,

―Everybody knows the fuel bill will rise, but with such a variety of solutions still being considered — LSFO,

scrubbers and LNG — it is impossible to measure the quantum at this stage. The adoption rates for each

solution will have a large influence on the future prices of heavy-sulfur fuel oil (HSFO) or LSFO by

determining demand and availability of each fuel source.

―Based on independent futures prices, low-sulfur marine fuel prices per metric ton will be 55 percent higher

than current high-sulfur fuels, and Drewry considers that the probably worst- case scenario is that fuel costs

(paid by carriers) and fuel surcharges (paid by shippers) in global container shipping will increase by 55-60

percent in January 2020.‖

[American Shipper]

13/12/2018

By Paul Avery

With grant funding now secured, The Port of Baltimore is moving ahead with its Berth 3 redevelopment

project.

Operadores de terminales Costa Rica: SAAM presenta proyecto de US$150 millones para

modernizar Puerto Caldera

Operadores de terminales República Dominicana: Ampliación de DP World Caucedo

The Port of Baltimore is on a roll. In its 2018 financial year the port came very close to handling 1M TEU in

a year for the first time, processing 998,516 TEU. Baltimore has been steadily on the way to the 1M TEU

mark for some time, with annual growth averaging almost 5% from 2003 to 2017.

In 2010, the Maryland Port Administration (MPA) entered into a 50-year concession with Ports America

Chesapeake, LLC (PAC) that included redeveloping the Seagirt marine terminal. PAC constructed a new

50-foot-deep container berth (Berth 4), purchased four 22-row outreach STS cranes and modified seven

existing cranes, plus purchased new RTGs.

The MPA and PAC are now moving ahead to redevelop another berth to offer a depth of 50ft and redevelop

more of the yard area with paved runways for RTGs. The first stage of the development is a US$30.4M

project to upgrade Berth 3 to Super-post Panamax standards. The MPA has secured a BUILD grant from the

US Department of Transportation for US$6.5M, with the State contributing US$7.8M and PAC US$18.4M.

A factor in winning the BUILD grant was that Baltimore City is an economically distressed region, with an

unemployment rate over 7% percent, compared to the national average of under 5%.

There is no deadline attached to the BUILD funding, but the MPA is planning to start the work in late 2019

with completion in 2020. The Berth 3 project will be a catalyst for significantly more investment by PAC and

the MPA at Seagirt. PAC is spending US$3M this year converting the terminal operating system to Navis N4

(from SPARCS), and has plans to add four more STS cranes and additional RTGs over 2018-2020.

[World Cargo News]

13/12/2018

Plan contempla inversiones por US$150 millones busca quintuplicar la capacidad del terminal.

SAAM presentó esta mañana al Presidente de Costa Rica, Carlos Alvarado, un ambicioso proyecto para

modernizar Puerto Caldera en el Pacífico, donde la compañía chilena está presente desde 2017, cuando

SAAM Puertos adquirió el 51% de la concesionaria de Puerto Caldera por un monto de $48,5 millones.

El gerente general de SAAM, Macario Valdés, manifestó: ―Queremos proyectar el terminal hacia el futuro,

porque creemos que la Costa Pacífico de Costa Rica tiene un tremendo potencial. Hoy dimos el primer paso

para iniciar una mesa técnica que permita concretar este proyecto‖.

El ejecutivo detalló que el plan podría quintuplicar la capacidad del terminal en términos de TEUs

transferidas, pasando de las actuales 328.500 al año a 1.580.000. La iniciativa, que debe ser aprobada por las

autoridades costarricenses, contempla - entre otros puntos - profundizar los muelles de atraque, dársena de

giro y canal de acceso a 16 metros (hoy es de entre 7,5 y 13 metros), lo que lo convertirá en el más profundo

de Costa Rica, y permitiría la recalada de buques más grandes y modernos. Además, se mejorarán los patios

y se invertirá en equipos de última generación.

[MundoMarítimo]

Operadores de terminales Argentina: Gobierno lanza la licitación para concesionar el

Puerto de Buenos Aires

13/12/2018

Los trabajos abarcan la construcción de un atracadero de 400 metros de longitud, con calado de 17 metros; la

ampliación del patio de contenedores y la adquisición de tres nuevas grúas pórtico de las de mayor capacidad

del mercado.

La construcción, según se informó, se iniciará en enero del 2019 con una duración aproximada de un año.

Se prevé que estará en funcionamiento para el primer cuatrimestre del 2020, lo que convertirá a DP World

Caucedo en uno de los puertos de mayor capacidad en la región. La nueva inversión representa un 45% de

crecimiento de capacidad de la terminal, lo que implica que aumentará su capacidad de 1.4 millones a 2.2

millones de TEU.

[PortalPortuario.cl]

13/12/2018

Se prevé una inversión privada de US$ 1.370 millones y el Estado aportará otros US$ 540 millones.

El ministro de Transporte, Guillermo Dietrich, lanzó la licitación internacional para modernizar el Puerto de

Buenos Aires, que prevé una inversión privada de US$ 1.370 millones y el Estado aportará otros US$ 540

millones, en un plazo de 50 años.

"En los primeros 10 años el operador privado que gane la licitación va a tener que hacer obras por una

inversión estimada de 760 millones de dólares", dijo Dietrich, en una conferencia de

prensa. Y agregó: "Esto sirve para que el país aumente su comercio exterior, ya que nuestras cargas cayeron

en los últimos diez años, mientras que los puertos vecinos de Brasil y Uruguay crecieron".

El plan del Gobierno es que en mayo del 2020 venzan las concesiones de los tres operadores actuales y se

consolide todo en un sólo prestador de servicios portuarios, con una zona única de verificación aduanera y un

único acceso al puerto, a través del Paseo del Bajo, que está terminando de construir el gobierno porteño.

"Esto permitirá aumentar la capacidad de la terminal interior y construir una terminal exterior, con 900

metros de muelle", dijo Gonzalo Mórtola, interventor de la Administración General de Puertos (AGP). Es

que "hace falta un puerto en mejores condiciones, ya que la infraestructura del puerto lleva casi 100 años sin

cambios", añadió Mórtola, que este jueves dictó la Resolución 178, para arrancar con el cronograma de la

licitación.

A su lado estaba Alejandro Ok, gerente general de la AGP, quien explicó que las nuevas obras permitirán

pasar de una capacidad de 1,4 millón de contenedores a 2,7 millones, en el año 2030. Luego se irá ampliando

el muelle exterior, hasta tener 900 metros, en una zona de 45 hectáreas. Además, podrán entrar buques más

grandes, con mayor capacidad de carga, en línea con la tendencia internacional. Y se va a complementar con

nuevos accesos ferroviarios y una futura terminal de cruceros.

Operadores de terminales España: Concurso para el desarrollo de la nueva terminal de

contenedores en ValenciaAires

El Puerto de Buenos Aires es el tercer puerto más importante de Sudamérica. En la actualidad, concentra más

de la mitad de la carga que se transporta mediante containers en la Argentina. "En estos tres años de gestión

bajamos un 61% el costo de exportación por contenedor", aseguró el ministro Dietrich.

El gobierno anunció que el próximo lunes ya estarán los primeros pliegos de la licitación, para realizar

consultas y sugerencias, con el objetivo de publicar los pliegos definitivos a principios del año que viene. En

mayo de 2019 se hará la apertura de los sobres y en agosto será la adjudicación, según el cronograma

presentado por los funcionarios del gobierno nacional.

[Clarín]

Fuente: APV

Fuente: APV

La presentación de propuestas para participar en el concurso se realizará hasta el 8 de mayo de 2019, mientras

que la apertura de sobres se realizará el 16 y el 30 de mayo de 2019.

La terminal, según explicó el presidente de la APV, Aurelio Martínez, está concebida "para poder aprovechar

las fortalezas" del de València "como puerto import/export y de tránsito con una capacidad de unos 5

millones de TEU" y poder acoger el tráfico de contenedores esperado en el horizonte de 2050.

La futura terminal de contenedores de la ampliación norte del puerto de València contará con un muelle de

atraque de hasta 1.970 metros de longitud con calado de 20 metros al costado del buque y en toda la dársena,

una superficie de explanada adyacente y compactada de unas 137 hectáreas y un canal de acceso marítimo

Terminal operators Portugal: Chinese shipping groups interested in the port of Sines

Terminal operators Ukraine: Tenders for Olbia and Kherson port‟s concessions due in

mid-2019

con 22,50 metros de calado. La APV hará los viales de conexión viaria y ferroviaria de la parcela con la red

general del puerto.

Entre las exigencias para la nueva terminal está también el ser hasta un 100% automatizada y contar con una

terminal ferroviaria, garantizar "la protección del medio ambiente" y usar "energías no contaminantes".

[Valencia Plaza]

12/12/2018

Chinese maritime shipping groups are expected to have something to say about the port of Sines in southern

Portugal, reported the China-Lusophone Brief (CLBrief), a news service on China and the Portuguese-

speaking countries.

Their interest is mainly focused on a new terminal to be built at that port, which has been given the name

Vasco da Gama, and whose publiyc tender is expected to be launched ―soon.‖ Reportedly talks are already

underway between Portugal and China, specifically with the COSCO group.

Chinese interest is considered to be fundamental as a way of guaranteeing the development of the Sines

platform, making sense of the use of the new Panama Canal by China as the fastest and cheapest way to reach

the Atlantic markets.

CLBrief recalls that even before the signing of a memorandum of understanding under the so- called ―New

Silk Road,‖ which has both land and sea components, with a focus on infrastructure, the Portuguese

government already strongly promoted the port of Sines, which will be included on that route.

The Portuguese government recently selected attorney Eduardo Paz Ferreira to lead the team that will

renegotiate the concession of the Port of Sines (PortSines – Terminal Multipurpose

de Sines) with PSA – Sines Container Terminal, S.A., owned by PSA Singapore. The government wants the

concessionaire to make an investment of at least 100 million euros in the expansion of the container terminal,

and the Singapore group considers it essential for the concession to extend beyond 2019. In 2017 the terminal

handled 1.67 million TEU.

PSA won the concession in the late 1990‘s in a process that, according to the Portuguese Audit Court, lacked

transparency. Mitsui & Co. Portugal and P&O Ports (UK) were two of the candidates that were excluded

without a public tender.

[Macauhub / CLBrief]

12/12/2018

Terminal operators Taiwan: Evergreen to lease five berths at Kaohsiung port

Terminal operators U.S.: Port of Charleston to spend $61.4 million on four STS cranes and

other equipment

Tender procedures for the transfer of stevedoring company Olbia and the Kherson Sea Commercial Port to

concessions are scheduled to start March-April 2009, with signing set for May-June 2019.

The total amount of expected investment by the concessionaires will be UAH 17.3 billion (€550 million)

over the 35-year term of the concession for Olbia port and UAH 1.4 billion (€45 million) for the 30-year

concession of Kherson port. Investments will be focused on upgrading infrastructure and port development.

During the first three years, Olbia plans to build a new grain terminal with a capacity of 2 million tons

annually (investment UAH 1.56 billion), and an urgent asset upgrade (investment UAH 216 million) in

Kherson seaport.

Over 25 Ukrainian and foreign companies from the USA, China, France, Switzerland, Great Britain, Japan,

Turkey, Qatar and Korea have previously expressed interest in the concessions. The Ministry of

Infrastructure and the International Finance Corporation (IFC) of the World Bank Group signed an

agreement to develop public-private partnership in the port industry in November 2017.

[PortsEurope / Ukrainian Sea Ports Authority]

12/12/2018

By Katherine Si

Taiwan-based Evergreen Marine has inked an agreement with Taiwan International Port Corporation (TIPC)

to lease five berths at the 7th container handling centre in Kaohsiung port.

The terminals are currently under construction and will be equipped with automated operation facilities. The

7th container handling center at Kaohsiung port, is 2,415 m in length with 18 m draught. It will be able to

accommodate five 22,000 teu ultra-large containerhips simultaneously. The first phase of the project (2.5

berths) will be completed in 2022 and the other two and half berths delivered in 2023.

Evergreen Marine has leased container terminals at Kaohsiung port since 1986 and currently has six

terminals handling 3.6m teu last year, accounting for 35% of the total container volume of Kaohsiung port.

To meet the market demands of large-sized ships and keep upgrading its fleet structure, Evergreen Marine is

starting to operate 20,000 teu and larger boxships at Kaohsiung. The company will receive 47 newbuildings

during 2018-2011, including sixteen 2,800teu boxships, eleven 20,000 teu boxships and twenty 11,000 teu

boxships.

[Seatrade Maritime News]

Analysis of maritime accidents: Action needed on recruitment and training

12/12/2018

By David Wren

The State Ports Authority will spend $61.4 million on new cranes and other equipment to keep up with

record-setting cargo at the Port of Charleston‘s Wando Welch Terminal.

The money will pay for four supersized ship-to-shore cranes to load and unload containers from big ships

traveling through the expanded Panama Canal. The terminal, which recently reopened its third berth, will

have 15 of the 155-foot-tall cranes in operation by the end of 2020.

Jim Newsome, the port‘s authority‘s president and CEO, said it takes five cranes to efficiently move cargo to

and from ships that can carry up to 14,000 containers each. The new cranes will let the terminal serve three

big ships at the same time, with enough reach to handle a vessel carrying up to 18,000 containers.

The purchase comes as the port continues to set monthly cargo records, including 188,585 containers

measured in 20-foot increments moving through its terminals in November. That total beats the previous

record for the month set in 2016 and is 15.3 percent higher than in November 2017.

[The Post and Courier]

12/12/2018

An analysis of shipping accidents between 2002 and 2016 has highlighted recruitment and training issues as

a key factor that the industry should address.

The study, titled The causes of maritime accidents in the period 2002-2016, was conducted by researchers

from the Seafarers International Research Centre (SIRC) of Cardiff University in the U.K and involved

analysis of 693 accident investigation reports published on line by the

U.K. Marine Accident Investigation Branch (MAIB), the Australian Transport Safety Bureau (ATSB), the

National Transportation Safety Board (NTSB), the Federal Bureau of Maritime Casualty Investigation in

Germany and the Danish Maritime Accident Investigation Board (DMAIB).

The most common type of accident was ―collision, close quarters and contact‖ (35.8%), followed by

grounding (17%), fire and explosion (9.8%) and lifeboats (3.3%).

Source: SIRC: The causes of maritime accidents in the period 2002-2016 [Nov 2018]

The analysis highlighted failure of risk management systems, for example inadequate passage planning, and

failure in communication as issues relevant to recruitment and training. ―It is often not possible to discern the

underlying causes of communication failure,‖ state the study authors. ―In some incidents information is

simply not passed on and in others there may be language or hierarchical barriers at play. This is an area

where better training and recruitment practices would be expected to have a positive impact providing the

industry with a constructive way forward with regard to accident mitigation.‖

Where poor judgment is identified as a factor, the study authors believe that better training or more careful

selection procedures could serve to reduce accidents in the future. Better training could also help prevent

accidents involving ineffective use of technology, rule violation, ineffective maintenance and poor

emergency response.

Third party deficiencies were also a common accident cause, including, for example, pilot error and poor

design. ―It is arguably the case that the focus by regulators and enforcement agents on third party deficiencies

has been inadequate, to date, and that this needs urgent rectification,‖ state the study authors.

The analysis also indicates areas where shore-based managers need to place greater priority on safety and

less emphasis on commercial considerations (e.g. with regard to weather routing, crewing, loading and

ensuring that equipment manuals are readily available in appropriate languages on board).

The most common immediate causes of ―collision, close quarters and contact‖ accidents were inadequate

lookout (24.6% of cases), failure in communication (15.3%), poor judgment (14.1%), and pilot error

(12.9%). Ineffective use of technology was commonly identified by investigators and found to be a

contributory cause in 24.2% of cases.

Groundings

Failures in communication and coordination were the most common immediate cause in groundings (16.1%

of cases), followed by inadequate lookout (11.9%), poor judgment (11%), fatigue (9.3%) and technical

failure (8.5%). Third party causes of grounding such as pilot error were identified in 6.8% of cases.

Container shipping: Demurrage and detention charges

Lifeboat accidents

The most common immediate cause of lifeboat accidents was ―inappropriate/ineffective maintenance‖

(26.1% of cases), inadequate training and experience (21.7%), poor design (17.4%) and poor judgment (1

%).

Fire and explosion accidents

Inadequate risk management was the main immediate cause of fire and explosion incidents (27.3% of cases),

followed by third party deficiency (18. %), technical failure (18.2%) and inappropriate/ineffective

maintenance (16.7%).

[SAFETY4SEA / SIRC]

12/12/2018

By Jens Roemer, FIATA

Current developments appear unreasonable and contradictory to ensure an efficient and economic maritime

supply chain Demurrage and detention charges have been widely used in container shipping. Demurrage

refers to the charge that the merchant pays for the use of the container within the terminal beyond the free

time period. Detention refers to the charge that the merchant pays for the use of the container outside of the

terminal or depot, beyond the free time period.

Containers are either owned or are leased by shipping lines who provide them to their customers (shippers or

merchants) for the safe and fast door to door transport of their goods. Because the cost for using the container

during the door to door transport is included in the freight, it is essential for shipping lines to turn around their

containers as fast as possible. As a result, and with the objective to encourage merchants to move or return

their containers swiftly, shipping lines discourage merchants who exceed the free time by charging

demurrage and detention fees.

It is an obligation for shipping lines to provide a reasonable free period during which no demurrage and

detention charges apply. This free period is supposed to allow the merchant a realistic period of time for:

• The loading and delivery of the container for an export

• The pick-up, unloading and return of the empty container for an import

It should be mentioned that, in many cases, the delay in returning or picking up containers cannot be

attributed to merchant, but to bad weather conditions, labour strikes and terminal congestions that are beyond

the control of merchant.

Increase of detention and demurrage charges in recent years

During the last few years, free time periods have been reduced and tariffs for demurrage and detention

charges have been increased considerably on a global level. There are indications

that shipping lines abuse the charging of demurrage and detention to maximise profits. It is understood that

shipping lines have been suffering in a very tough business environment and do everything they can to

develop revenue streams that are not necessarily derived from freight.

In this context, the FMC (Federal Maritime Commission of the United States) started an investigation

referred to as ―Fact Finding 28‖. This investigation is focused on ―the practices of vessel operating common

carriers and marine terminal operators related to detention and demurrage charges.‖ The Commission

undertook this investigation because of a petition and testimony from a coalition of shippers, intermediaries,

and container transport interests.

An interim report released by the FMC on September 4, 2018 [i] revealed that the demurrage and detention

income of shipping lines in United States increased 90% in 2014 compared to 2013, followed by an

additional year-on-year increase of 86% in 2015, dropped 23% in 2016 and then rose again by 30% in 2017.

It was also noted that the increase in demurrage and detention charge since 2014 can only be partially

explained by weather and labour-related congestion problems, but not fully.

FIATA calls for streamlined practice on detention and demurrage

The International Federation of Freight Forwarders Associations (FIATA) works as a non- governmental

organisation, with the main object to represent, promote and protect the interests of international logistics and

freight forwarding industry. The membership of FIATA currently covers 108 freight forwarding and logistics

associations in 97 countries and regions, as well as nearly 6,000 international logistic service providers and

freight forwarders around the globe.

FIATA is concerned that the recent development of reduced free time and increased tariffs does not serve its

original purpose, but unreasonably increase the transport cost for all stakeholders in the supply chain and

particularly, for shippers and freight forwarders.

In this context, one also must keep in mind the significance of container shipping for the global supply chain,

as reported in the UNCTAD Review of Maritime Transport 2018[ii] container shipping accounts for 24.3%

of total dry cargo shipments in 2017.

Also keeping in mind, the often inferior infrastructure related terminal and hinterland connections in

developing countries and the fact that logistics cost in developing countries have generally a higher ratio of

logistics costs in relation to its GDP (Gross Domestic Product), this development is further worsening the

situation.

In view of addressing the current situation of demurrage and detention and to ensure an efficient supply

chain, FIATA Multimodal Transport Institute Working Group Sea announced the release of its first ―Best

Practice Guide‖ focusing on the charging of demurrage and detention on 3rd October 2018. These best

practices may help reduce unnecessary supply chain costs and inefficient behaviours that lead to detention

and demurrage charges. The

document aims to examine the current situation and outline best practices that could be implemented

voluntarily by all parties moving cargo through ports.

Advised practice on detention and demurrage of FIATA

In the best practice document, FIATA acknowledges that demurrage and detention charges are a valid and

important tool for shipping lines to ensure that their equipment is being returned as fast as possible and users

exceeding the contractual duration of use should be charged accordingly. However, FIATA does not believe

that merchants should be subjected to unjust and unreasonable charges of this nature, especially as delays

often occur through no fault of the forwarder / shipper.

The FIATA Working Group suggests that commercial partners review a series of issues related to demurrage

and detention charges and negotiate an agreement including, but not limited to:

• Limit the demurrage or detention accrued to a maximum amount

• Extend the free time period in case the terminal is unable to release / receive a container by the period

that is equal to the duration of the inability.

• Ensure a level playing field for containers in merchant haulage and negotiate terms to reduce unfair

differentiation.

• Support the modal shift towards more environmentally friendly modes of transport by increasing the

detention free period.

• Change the calculation of export demurrage to transfer the responsibility of vessel delays to the shipping

line.

• Ensure that demurrage and detention charges on import shipments are charged much faster, ideally

within a week

• Help relieving terminal congestion as well as land side concentration of pickups and deliveries due to

bigger vessels and higher peaks and allow merchants more flexibility by increasing demurrage free periods.

FIATA further encourages more data sharing in the maritime supply chain which would lead to more

transparency of information related to these charges.

Working Group Chair, Jens Roemer commented, ―Anti-trust and Competition Laws worldwide prohibit

representative bodies such as FIATA from any involvement in commercial action so the resolution of

disputes regarding demurrage and detention must be between the contracting parties. The Working Group

Sea is pleased to provide best practice

recommendations that National Associations and freight forwarders can use to argue their

case in commercial disputes.‖

FIATA hopes the guide can provide orientation to its members and all stakeholders as to which conditions

are adequate. FIATA also looks forward to closer collaboration with shipping lines and the various

stakeholders throughout the port supply chain. The newly published guide is accessible on FIATA website:

https://fiata.com/media/documents-for-download.html

Notes

[i] Federal Maritime Commission, Fact Finding Investigation No. 28 Interim Report, 2018, Chapter III

Transparency & corruption: Top bunker traders implicated in Petrobras bribery scandal

[ii] UNCTAD Review of Maritime Transport, 2018, Chapter 1.

[UNCTAD Transport and Trade Facilitation Newsletter]

12/12/2018

Law enforcement investigators in Brazil have unveiled new allegations regarding corruption in Petrobras' oil

and petroleum product trading, with evidence implicating several of the world's leading bunkering

companies.

"There is evidence that Vitol, Chemium, Trafigura, Cockett, Mercuria, Arcadia, Oil & Transport (OTT),

Chemoil, Glencore, Aegean, Oceanconnect and WFS would pay commissions to intermediaries in the

purchase and sale operations of fuels with Petrobras, to the benefit of the companies and to the detriment of

the state company," said State Judge Gabriela Hardt in a statement. "The criminal scheme handled at least US

$31 million in illegal amounts and undue advantages."

The alleged scheme involved illicit payments to third-party brokers, who would then pass the funds on to

Petrobras officials in the form of bribes. The Petrobras officials would then provide the payees with

commercially-advantageous information and terms.

Specifically, prosecutors allege that former World Fuel Services employee Fernando Luiz Guimarães Nicola,

a WFS executive based in Brazil who later transferred to competitor Cockett, may have entered into

arrangements with Petrobras bunker trader Jeceny Jorge Lourenço Rodrigues. Jeceny is suspected of

involvement in a million-dollar bribery scheme.

Hardt ordered Petrobras to hand over emails and calendar records from Jeceny's accounts, along with records

from former Petrobras employees Rodrigo Garcia Berkowitz, Carlos Roberto Martins Barbosa, César

Joaquim Rodrigues da Silva, Marcus Antônio Pacheco Alcoforado, Jorge de Oliveira Rodrigues and Márcio

Pinto de Magalhães.

In a statement, Petrobras said that it "collaborates with the authorities that lead Operation Lava Jato and is

recognized by the Federal Prosecutor's Office and by the Supreme Court as a victim of the crimes that have

been uncovered." The firm added that it dismisses employees involved in allegedly corrupt deals when strong

evidence suggests their culpability.

Top oil trading houses implicated

To date, the long-running Lava Jato inquiry has concentrated on Petrobras' large construction contracts, and

allegations regarding the firm's oil-trading activities are only now emerging. Prosecutors have issued 11

arrest warrants, six subpoenas, 26 search warrants and dozens of court orders in connection with this 57th

phase of the long-running investigation, which has already brought down some of Brazil's most prominent

political and business figures.

Top commodities traders Vitol, Glencore and Trafigura have been singled out by prosecutors for heavy

involvement in the alleged scheme. According to Brazil's federal police, these three firms may have made

bribery payments to Petrobras officials totaling more than $15 million. In exchange, Petrobras employees

Port development U.S.: DOT awards $1.5 billion in grants for transportation

infrastructure projects

allegedly arranged for fuel trades and storage tank rentals at non-market rates. The trades affected covered a

wide range of petroleum products, including fuel oils, vacuum gas oil, bunkers and asphalt.

Vitol, Glencore and Trafigura did tens of billions of dollars in business with Brazil's state petroleum

company over the period in question, leaving considerable room for an investigation.

[The Maritime Executive]

12/12/2018

By Chris Dupin

The U.S. Department of Transportation (DOT) has awarded $1.5 billion in discretionary grant funding to 91

road, rail, transit and port infrastructure projects projects in 49 states and the District of Columbia.

Made available through the Better Utilizing Investments to Leverage Development or BUILD transportation

grant program, the funds are designed to support road, rail, transit and port infrastructure projects across the

country. BUILD is the successor to the Transportation Infrastructure Generating Economic Recovery, or

TIGER program, which began in fiscal year 2009 and was in place for nine years.

The Coalition for America‘s Gateways and Trade Corridors (CAGTC) said freight infrastructure took 66

percent of BUILD Funding, which it said was the highest percentage in the history of the BUILD and TIGER

programs.

―Competitive grant programs provide a funding opportunity for projects that are difficult to fund or do not

qualify through traditional funding programs due to their complexity, size, or cost,‖ said Elaine Nessle,

executive director of the CAGTC.

Port-related projects will receive a total of $229.23 million, or about 15.28 percent of the $1.5 billion

awarded under BUILD. That‘s the largest number of projects and the highest dollar amount of port-related

awards ever under the TIGER or BUILD programs.

Still, the American Association of Port Authorities (AAPA) believes that percentage should be 25 percent.

Funding under the programs have ranged from 8.6 percent to 14.6 percent in prior years. Kurt Nagle,

president and chief executive officer of AAPA, said direct funding for maritime infrastructure projects,

including connections to ports, will improve freight mobility, which helps reduce transportation costs and

makes U.S. exports more attractive to overseas buyers.

―BUILD grants are one of the few federal funding programs available to public port authorities to help them

pay for critical infrastructure to move and handle freight more efficiently,‖ said Nagle. ―We‘re pleased that

port-related projects garnered nearly a sixth of the total amount in this round of BUILD. The $229-plus

million in port-related awards will help leverage nearly

$412 million in total project costs.

Port development U.S.: Spared by earthquake, Port of Alaska still needs rehabilitation

―Port-related projects should be among the leading candidates,‖ Nagle said. ―It‘s also important that projects

from the full range of port sizes and types receive grant awards in any future rounds of BUILD funding.‖

However, only a small fraction of the projects for which funding was requested are getting money. DOT says

the Consolidated Appropriations Act of 2018 allocated $1.5 billion for the program, but there were 851

applicants asking for a total of $10.9 billion.

A complete list of selected projects and award amounts is available on the USDOT website.

[American Shipper]

11/12/2018

By Chris Dupin

The Port of Alaska in Anchorage was spared from serious damage by the magnitude 7.0 earthquake that

rocked the south-central part of the state on Nov. 30. Built in the 1960s, the port says it needs more than $1

billion to replace old docks and remove what it says was earlier botched construction work.

Located on Cook Inlet in south central Alaska, the port is a key piece of infrastructure for the state.

Anchorage is the state‘s largest city and 60 percent of the state‘s population lives within two hours of the

port; 75 percent of residents are connected to the port by either road or the state-owned Alaska Railroad.

Its centrality is reflected in the fact that the name of the municipally owned port was changed from Port of

Anchorage to Port of Alaska in 2017. Today the Port of Alaska is the largest gateway for general cargo in the

state. It became so when other ports, including Seward, Kodiak, Valdez and Whittier, all suffered massive

damage from tsunamis after the 7.2 magnitude ―Good Friday‖ earthquake of March 27, 1964.

While the city of Anchorage was damaged by the 1964 earthquake, the port says, ―Upper Cook Inlet

geography virtually eliminates tsunami danger, and the 26-foot-wave that inundated Homer Spit was reduced

to a ripple by the time it reached Anchorage.‖ Once again during this year‘s earthquake, the port suffered

only minor cracking on its docks.

In 2017 the Port of Alaska handled about 3.5 million tons of cargo. About 1.6 million was containers, truck

vans and flats, and 1.8 million tons were petroleum products. Most of the remainder was cement.

In addition to petroleum products being delivered by ship and barge, a pipeline system at the port connects it

to Ted Stevens International Airport, Joint Base Elmendorf-Richardson and Tesoro Refinery in Nikiski. The

port has 3.4 million barrels of fuel storage used to hold jet fuel, ―JP-8‖ fuel used by the military, gasoline,

heating oil and aviation gas utilized by small planes that are used widely in Alaska.

Valdez, at the end of the Trans Alaska Pipeline, handles nearly 10 times as much cargo as Anchorage, but

nearly all of it is crude oil arriving from the North Slope through the Trans Alaska Pipeline System operated

by Alyeska Pipeline Service Co. to be loaded into tankers. Some refined product from Valdez is delivered to

Anchorage.

Port spokesman Jager says the Port of Alaska faces several major challenges over the next decade or so. First,

the port ―was built in 1960, so it‘s built to 1960 shipping standards. Ships have gotten bigger and

technologies have changed, and we haven‘t kept up with that,‖ says Jager. ―We‘re pushing the limits of what

we can handle.‖

While the port is large enough for the amount of cargo moving through it, he says operators of tankers and

bulkers, in particular, would like to be able to use larger ships that can draw more water than is possible

today. The current plan is to rebuild the port farther into the Knik Arm of the Cook Inlet so that ships drawing

45 feet of water can call at the docks in Anchorage, which currently is dredged to 35 feet mean low water.

The second, a ―more serious problem is that we‘re old and corroding,‖ says Jager. ―The engineers tell us that

our piles have lost about 75 percent of their original thickness near the mud lines where we have an

accelerated corrosion that is common in northern latitude ports.‖

That corrosion problem is made even more complicated by the fact that the port is ―built on very deep silt and

experiences very fast currents and ice scarring,‖ says Jager. He explains that Anchorage is essentially a river

port — located where the Cook Inlet divides into Knik Arm and Turnagain Arm — and experiences tidal

fluctuations of more than 40 feet. During the winter, the ice-clogged water around the docks becomes a

―giant slushy‖ that pushes back and forth on the docks.

[American Shipper]

11/12/2018

Dr Tristan Smith from UCL Energy Institute gives readers insight into the Danish carrier‘s big

announcement earlier this month.

Maersk‘s announcement is a major step forwards for the sector and for the future stability of world trade, and

provides a real boost for all the companies working on zero GHG solutions for shipping. At a time when

some are still misinterpreting this as something we can ease in to through incremental marginal change, and

when many of Maersk‘s competitors are still trying to find ways to argue that LNG is sufficient, Maersk

sends an unambiguous signal, not only that the future is zero emissions, but that this future is only 10 years

away.

Why Maersk’s target is an accurate interpretation of the IMO objectives

Most readers miss, whether on purpose or by accident, the fact that the IMO Objectives say ―at least‖ before

both the 2030 40% on carbon intensity, and the 2050 50% on absolute GHG. 50% is not the target. The target

is some number equal to or greater than this. The Objectives explicitly reference the IPCC‘s 1.5 report, which

was unfinalized and therefore was deemed (you can probably guess by which country) unsuitable for direct

use. IPCC‘s 1.5 report, for those that haven‘t read it, can be paraphrased as ―zero GHG before 2050‖.

We will know more in 2023 where this lands, when IMO formally revises its GHG Strategy. But before then,

its important to remember what was left in the IMO‘s Initial Strategy, and not just selectively quote whilst

keeping fingers crossed that given a range of values, the most unambitious end of the range will be chosen.

Shipping emissions: The big picture behind Maersk‟s 2050 decarbonization pledge

My guess is that between now and 2023 we will only experience more of the fundamental threats that climate

change poses, see more alignment politically on enabling decarbonization, and have further evidence of the

commercial and technological solutions to achieve it. So I think Maersk have taken a wise bet and landed at

the only realistic conclusion of what ―at least‖ means.

But even if we do land on 50%, Maersk‘s targets are still the only rational choice. Shipping tnm grew at about

4% last year. Even a projection of 3% p.a. growth gets you triple tnm by

2050, which means to meet 50% absolute emission reduction, the average ship in the fleet in 2050 will have

to be 85% less carbon intensive than the 2008 average. Our group has spent years trying to figure out how to

reduce carbon intensity at the rates implicit in IMO‘s Initial Strategy objectives, and we are confident that the

only way to get there is adopting zero emissions fuels in 2030 and seeing them grow in share rapidly

thereafter. The key here is that the 85% is an average for the global fleet. If Maersk aren‘t a little above

average, who else is going to be? Do Hapag-Lloyd and MSC really have plans to hit just 85% and have all the

hassle of keeping a small tank for fossil fuels to blend in with their hydrogen?

But why this is really about commercial opportunity and not compliance

There‘s a pattern here. In 2008, Maersk made a big fuss about slow steaming from an environmental

perspective. They helped embed something as widespread practice (whilst cunningly avoiding antitrust and

anticompetitive issues) which as we know, reduces operating costs and acts as a reduction in supply so helps

to keep ‗some‘ upwards pressure on rates. It also enabled Maersk to look good to a client/customer base that

was beginning to get interested in low environmental impact services. A triple whammy – low operating

costs, higher rate, more market share.

Ten years later, why is this not the same move? Maersk want to be there with the right technology at the right

time. Giving their suppliers and supply chains enough warning will help ensure that the solutions are mature,

reliable and the costs reduced so that when the inevitable compliance requirement comes out from the IMO‘s

process, it can be achieved without significant cost.

But the real play is that those same customers that in 2008 were seduced by the environmental PR that

Maersk managed to spin out of slow steaming, have now upped their game. Swathes of companies that use

shipping have adopted ―Science Based Targets‖ (~500 corporates/multinationals) or some equivalent

strategy. They increasingly demand zero GHG emissions from their suppliers so that they can reassure their

shareholders they‘re positioned to survive the mounting pressures of GHG regulation and related stability

threats, and so they can offer zero emissions fish, furniture, ovens, shoes to attract more customers. Guess

who is going to be front of their queues?

Why this isn’t all good

The risks in the announcement are that Maersk are clearly leaving open the option to use biofuels to reach

these targets. This creates risks for further endorsement of a fuel type that has many supply and sustainability

challenges, not least risks of creating pressure on land- use and food prices. Maersk will need to quickly

clarify how they will manage these risks, as there may be enough biofuel for Maersk but it‘s very unlikely

there is enough for the whole sector, and ultimately that means either significant unintended sustainability

impacts or a dampener on innovation for the solutions that will be needed to compliment the quantities of

biofuel that are affordable and sustainable.

[Splash 24/7]

Livestock shipping: Australian authorities take action against unstable carrier

11/12/2018

By Sam Chambers

Oaktree, the American private equity backers of bust Hamburg line Hansa Heavy Lift, has cited the dire

market conditions for its decision to wind up the seven-year-old company.

Hansa Heavy Lift became the latest casualty in German shipping when it announced its insolvency on

Monday. Founded in 2011, the company was an Oaktree supported continuation of another bust German

heavylift name, Beluga Shipping.

In a statement sent to Splash, an Oaktree spokesperson told Splash on Monday: ―Due to an extremely

challenging operating environment in the global shipping industry, Hansa Heavy Lift filed for insolvency

earlier today… [G]iven the ongoing structural challenges in the global heavy lift shipping sector, Oaktree is

supportive of the company‘s decision to file for insolvency and has decided not to make any additional

capital investments in the business.‖

Hansa Heavy Lift has a fleet of five ships, of which one has been arrested and detained in France. Court

proceedings regarding the line‘s insolvency are underway in Hamburg. Earlier discussions between Hansa

Heavy officials and compatriot MPP firm Zeaborn failed to result in a takeover.

[Splash 24/7]

11/12/2018

By Sam Chambers

The Australian Maritime Safety Authority (AMSA) has withdrawn the Australian Certificate for the Carriage

of Livestock (ACCL) for the livestock carrier, Jawan, after the ship suffered high profile stability issues

while carrying thousands of animals.

The ship has been unable to leave Australia for weeks after it was forced to return to port after it started

rolling severely.

―Where a master fails to properly determine a vessel‘s stability, or the approved information the master uses

is unreliable, there is a significant risk. It is a fundamental requirement for vessel owners and masters to have

stability information to rely on,‖ AMSA said in a statement.

Heavy lift shipping: Oaktree cites „extremely challenging operating environment‟ as Hansa

Heavy files for insolvency

Oceans: Arctic posts second warmest year on record in 2018

―It is extremely concerning that the operators are unable determine the vessel‘s stability in a loaded condition

since its recent drydocking and the operator and classification society seem unable to provide a plausible

explanation for this situation. It‘s a very basic requirement,‖ AMSA‘s CEO Mick Kinley said.

[Splash 24/7]

11/12/2018

By Richard Valdmanis

The Arctic had its second-hottest year on record in 2018, part of a warming trend that may be dramatically

changing earth‘s weather patterns, according to a report released on Tuesday by the U.S. National

Oceanographic and Atmospheric Administration (NOAA).

―Arctic air temperatures for the past five years have exceeded all previous records since 1900,‖ according to

the annual NOAA study, the 2018 Arctic Report Card, which said the year was second only to 2016 in overall

warmth in the region.

Highlights of the 2018 Arctic Report Card

• Surface air temperatures in the Arctic continued to warm at twice the rate relative to the rest of the

globe. Arctic air temperatures for the past five years (2014-18) have exceeded all previous records since

1900.

• In the terrestrial system, atmospheric warming continued to drive broad, long-term trends in declining

terrestrial snow cover, melting of the Greenland Ice Sheet and lake ice, increasing summertime Arctic river

discharge, and the expansion and greening of Arctic tundra vegetation.

• Despite increase of vegetation available for grazing, herd populations of caribou and wild reindeer

across the Arctic tundra have declined by nearly 50% over the last two decades.

• In 2018 Arctic sea ice remained younger, thinner, and covered less area than in the past. The 12 lowest

extents in the satellite record have occurred in the last 12 years.

• Pan-Arctic observations suggest a long-term decline in coastal landfast sea ice since measurements

began in the 1970s, affecting this important platform for hunting, traveling, and coastal protection for local

communities.

• Spatial patterns of late summer sea surface temperatures are linked to regional variability in sea-ice

retreat, regional air temperature, and advection of waters from the Pacific and Atlantic oceans.

• In the Bering Sea region, ocean primary productivity levels in 2018 were sometimes 500% higher than

normal levels and linked to a record low sea ice extent in the region for virtually the entire 2017/18 ice

season.

• Warming Arctic Ocean conditions are also coinciding with an expansion of harmful toxic algal blooms

in the Arctic Ocean and threatening food sources.

• Microplastic contamination is on the rise in the Arctic, posing a threat to seabirds and marine life that

can ingest debris.

The 2018 Arctic Report Card marks the latest in a series of warnings about climate change from U.S.

government bodies, even as President Donald Trump has voiced skepticism about the phenomenon and has

pushed a pro-fossil fuels agenda.

The study said the Arctic warming continues at about double the rate of the rest of the planet, and that the

trend appears to be altering the shape and strength of the jet stream air current that influences weather in the

Northern Hemisphere.

―Growing atmospheric warmth in the Arctic results in a sluggish and unusually wavy jet-stream that

coincided with abnormal weather events,‖ it said, noting that the changing patterns have often brought

unusually frigid temperatures to areas south of the Arctic Circle.

Some examples are ―a swarm of severe winter storms in the eastern United States in 2018,

and the extreme cold outbreak in Europe in March 2018 known as ‗the Beast from the East.'‖

Environmentalists have long warned of rapid warming in the Arctic, saying it threatens imperiled species like

polar bears, and is a harbinger of the broader impacts of climate change on the planet. Scientists have warned

that the region could suffer trillions of dollars‘ worth of climate change-related damage to infrastructure in

the coming decades.

But the melting of Arctic ice has piqued the interests of polar nations like the United States, Canada and

Russia by opening new shipping routes and expanding access to a region believed to be rich in petroleum and

minerals.

Declining Arctic sea ice: The 2018 Arctic Report Card found the Arctic region had the second-lowest overall

sea-ice coverage on record. The map shows the age of sea ice in the Arctic ice pack in March 1985 (left) and

March 2018 (right). Ice that is less than a year old is darkest blue. Ice that has survived at least 4 full years is

white. Maps were provided by NOAA Climate.gov and based on data provided by Mark Tschudi./University

of Colorado/CCAR.

Source: NOAA Climate.gov

The United States and Russia have both expressed an interest in boosting Arctic drilling, and Russia has

bolstered its military presence in the north.

The NOAA report comes weeks after more than a dozen U.S. government agencies released a study

concluding that climate change is driven by human consumption of fossil fuels and will cost the U.S.

economy hundreds of billions of dollars by the end of the century.

Trump, who has been rolling back Obama-era environmental and climate protections to maximize

production of domestic fossil fuels, said of the update to the National Climate Assessment: ―I don‘t believe

it.‖

Container shipping: Demurrage and detention charges

Trump last year announced his intention to withdraw the United States from the 2015 Paris Deal agreed by

nearly 200 nations to combat climate change, arguing the accord would kill jobs and provide little tangible

environmental benefit. (Writing by Richard Valdmanis; Editing by David Gregorio)

[Reuters / NOAA]

11/12/2018

By Harriet McLeod

Environmental groups opposed to offshore drilling sued the federal government on Tuesdayto prevent future

seismic tests for oil and gas deposits in Atlantic waters off the U.S. EastCoast.

Seismic testing, which uses air gun blasts, violates federal laws that protect marine mammals,endangered

species, and national environmental policy, according the lawsuit filed in U.S.District Court in Charleston,

South Carolina, against U.S. Secretary of Commerce Wilbur Ross and the National Marine Fisheries Service.

The U.S. fisheries service in November gave initial permission to five companies to conduct nseismic airgun

tests beneath a vast region off the East Coast. The permits allow marine wildlife to be harassed but not killed.

Conservationists say the testing, a precursor to oil drilling, can cause disorientation that leads to beachings of

an endangered species, the North Atlantic right whale.

U.S. President Donald Trump is pursuing increased petroleum drilling as part of an ―energy dominance‖

policy. A proposal to open nearly all U.S. waters to offshore drilling, announced in January, is pending.

―The Trump administration has steamrolled over objections of scientists, governors and thousands of coastal

communities and businesses to enable this dangerous activity,‖ Michael Jasny, a director and ocean noise

pollution expert at the Natural Resources Defense Council,said in a statement.

A federal marine biologist said last month that no seismic tests have been known to cause whale beachings. A

spokeswoman for the National Oceanic and Atmospheric Administration, an agency within the Commerce

Department, declined to discuss ongoing litigation. Plaintiffs65 in the lawsuit also included the Southern

Environmental Law Center, Sierra Club, Oceana, the Center for Biological Diversity and the North Carolina

Coastal Federation. Lawmakers from South Carolina and coastal mayors held a news conference on Tuesday

in Charleston to address the issue.

U.S. Representative-elect Joe Cunningham, a Democrat, said drilling threatens fishing industries, jobs,

recreation and a tourism industry worth $21 billion. ―I‘m here not just to say ‗no to offshore drilling‘ but ‗hell

no to offshore drilling,'‖ added Cunningham, who said he would introduce legislation next year to reinstate a

ban on U.S. offshore drilling that had been renewed by President Barack Obama. South Carolina Governor

Henry McMaster opposes drilling off the coast of his state. State Attorney General Alan Wilson will send a

letter of opposition to Commerce Secretary Ross soon, a spokesman said by phone. More than a dozen states

are seeking exemptions from offshore drilling leases.

Trump administration continues “zombie-like response” to

climate change

Transparency & corruption: How shipping deals with high corruption levels

―Oil spills don‘t respect state boundaries,‖ Catherine Wannamaker, senior attorney for the Southern

Environmental Law Center said. (Reporting by Harriet McLeod Editing by Bill Berkrot)

[Reuters]

10/12/2018

As the Trump administration, Russia, Saudi Arabia and Kuwait refuse to fully endorse a UN report to keep

global warming below 1.5 Celsius, 415 investors managing assets worth US$32 trillion have called on the

four oil producers to meet the goals of the Paris Agreement and move to a low-carbon economy.

Among specific policies, the members of the Investor Agenda group want governments to phase out thermal

coal power, put a meaningful price on carbon, and phase out fossil fuel subsidies.

―Despite the misguided policies of the Trump Administration, global efforts to address the very real threat

climate risk presents to the economy, financial markets and investment returns are ongoing,‖ explained New

York State Comptroller Thomas DiNapoli, responsible for the US$207 billion New York State Common

Retirement Fund.

Citing data from the Powering Past Coal Alliance, the Investor Agenda says EU and OECD countries must

phase out coal-fired electricity generation no later than 2030, with the rest of the world following no later

than 2050. Failure to do so, says group signatory Schroders, will result in temperature rises of around 4°C

and US$23 trillion of permanent global economic losses over the next 80 years.

―The reality is that the long-term nature of the challenge has, in our view, met a zombie-like response by

many. This is a recipe for disaster as the impacts of climate change can be sudden, severe and catastrophic,‖

added Chris Newton, an executive director for IFM Investors that has US$80 billion in assets under

management. ―We need our infrastructure assets to continue to provide essential services to communities and

economies around the world. We have a duty to our investors to act for the long term when others are clearly

sidestepping the challenge.‖

Launched by the UK and Canada, the Powering Past Coal Alliance now has 75 members, including 28

national governments, nine US states and 28 corporations and organisations.

[Freightweek]

10/12/2018

Corruption and ―greenwashing‖ show rising trends in most sectors in year 2018 with shipping

industry not being excluded.

Ship owners, Port officers, Ship Registries, Classification Societies, recycling yard owners and scrap dealers

are said to being involved in ―Greenwashing‖ operations, trying to circumvent the international maritime

legislation to their own benefit.

The 2018 Sustainability SAFETY4SEA Award Winner, Maritime Anti-Corruption Network (MACN), along

with a number of other distinguished initiatives are working hard to spread awareness in order to make the

industry safer, more profitable and sustainable. Which is, however, the industry‘s outlook on corruption? To

what extend are we interested in a more sustainable trade?

The history of International Anti-Corruption Day

Fighting corruption is one of the biggest impediments to achieving the Sustainable Development Goals

(SDGs). The 9th of December marks the International Anti- Corruption Day. Every year, the United Nations

Office on Drugs and Crimes (UNODC) and the United Nation Development Programme (UNDP) develop a

joint global campaign, focusing on how corruption affects education, health, justice, democracy, prosperity

and development

The United Nations Convention against Corruption (UNCAC) was adopted by the United Nations General

Assembly on 31 October 2003. It was opened for signature in Mérida, Yucatán, Mexico, from 9–11

December 2003 and thereafter at UN headquarters in New York City. It was signed by 140 countries. As of

August 2018, there are 186 parties, which includes 181 UN member states, the Cook Islands, Niue, the Holy

See, the State of Palestine, and the European Union.

Why criticizing corruption

Corruption can be defined as a serious crime that undermines social and economic development in all

societies. There are lots of concerns regarding the governments enabling corruption actions and lack of use of

force policy and oversight. Specifically, there are three main points that corruption infringes:

• Enforcing law and order

• Protecting assets country of origin

• Promoting transparency

―Corruption impacts the work and lives of seafarers all over the world. It makes the industry less safe, less

profitable, and less sustainable. Even petty corruption inhibits the development of countries where shipping

is the key to sustainable growth and development,‖ Cecilia Müller Torbrand, MACN, says.

Shipping Industry: Where do we stand

Even if all companies have an internal defense against unethical practices, corruption continue to exist; from

false certificates and checklists to briberies regarding safety inspections and so on. As of now, MACN has

collected over 19,000 reports of corrupt demands globally.

Ways to minimize corruption in shipping industry:

• Establish more anti-corruption bodies

• Adopt a collective action approach

• Put more pressure on enhancing transparency

• States must take measures to ensure maritime services are subject to safeguards that promote efficiency

• Promote awareness of corruption

Transparency & corruption South Africa: Port operator Transnet struggles with

irregularities, fraud and malpractice scandals

• Promote practices aimed at preventing corruption

―Regulation at the international, national, local government, and corporate levels is vital to tackling

corruption. Where there is legal and policy ambiguity there is room to abuse the system. But action must go

beyond writing new or more laws,‖ John Sypnowich, MACN, said earlier this year to SAFETY4SEA.

MACN: A significant anti-corruption initiative

MACN initiative was established in 2011 as an industry-led collective action initiative, to stamp out

corruption in the maritime industry and to promote inclusive trade. Having now grown to over 90 companies

across the maritime industry, MACN‘s members represent a significant percentage of the total global

tonnage and play a key role in ocean transport.

[SAFETY4SEA]

10/12/2018

Transnet, the state-owned operator of South Africa‘s port terminals and provider of rail freight services, has

been beset by corruption, fraud and malpractice scandals over the last three years, writes Mike Mundy.

These reached a new waypoint at the end of October with the sacking of its well-known chief executive,

Siyabonga Gama. He is understood to have been sacked following broad-based corruption investigations,

one conducted by the National Treasury, part of which alleges his involvement in corruption and

malpractice; allegations which he refutes. The Board of Transnet has also cited a loss of confidence in his

ability to lead the state-owned enterprise.

Gama has, however, not taken his dismissal sitting down. He obtained from a Labour Court a ruling

whereby the dispute between him and the Board of Transnet is referred to arbitration. This, nevertheless,

did not stop the Board from sacking him – with the Board making the point that they gave Gama 10 days in

which to detail reasons why his contract should not be terminated and that he chose not to take up this

option.

The irregularities at Transnet are serious – they include financial reports showing irregular expenditure of

R8.1bn, dubious conduct with regard to a R500m pension fund and the biggest scandal of all a major scam

in conjunction with the acquisition of locomotives worth R54bn from General Electric, Bombardier

Transport, China South Rail and China North Rail. It is this latter event that South African media are

reporting Gama is linked to.

The current strong focus on Transnet cannot be separated from an ongoing judicial inquiry into what has

been termed ‗state capture‘ – widespread corruption involving billions of rands worth of state contracts

during the presidency of Jacob Zuma which ended in February this year.

Port development Middle East: „Dangerous game‟ of chronic overcapacity and

overreliance on transhipment

Port development: The future of automated ports

It also comes at a time when Transnet is making key decisions regarding port capacity and notably has

embarked upon a major expansion scheme for the port of Durban, a key feature of which is expanding

container handling capacity and boosting the port‘s capacity to handle the larger container vessels in

service. There has been multi-faceted criticism of this project

– the economic rationale, employment opportunities, environmental etc.

Looking at Transnet overall, is it not time to raise the idea again of putting its various divisions and/or

components of these into a public-private partnership? The reasons for doing so are clearly growing

stronger.

[Port Strategy]

10/12/2018

Chronic port overcapacity hangs heavy over the Middle East region, with capacity growth more than double

that of throughput growth.

Figures from Ascela‘s infrastructure advisory team flag up handling capacity at the region's ports that has

grown by more than 10% against container throughput over the last seven years that has only risen by

4%.trans

―Putting it in perspective, back in 2011 the average utilisation rate was around 75%, but it had fallen to 66%

by 2017. That's not good,‖ said Nivesh Chaudhary, director of transport and logistics in Ascela‘s

infrastructure advisory team.

Regional overreliance on transhipment is noted as a ―dangerous game‖ by Mr Chaudhary, and one that has

already blighted the UAE's beleaguered Khorfakkan, which suffered a sharp reversal in its fortunes when

UASC shifted over from the Ocean Alliance to THE Alliance, meaning that the port lost over 40% of its

volumes to Jebel Ali.

Giovanni Moscatelli of the Boston Consulting Group added that the region is at a ―turning point‖, noting that

while investing heavily in top infrastructure has so far paid off, growing overcapacity means that regional

ports must now consider how to consolidate their inland position to be able to truly differentiate their

offerings.

―While inland connectivity solutions are generally regarded as having lower margins than port handling

operations, they are worth considering on a case-by-case basis in the Middle East,‖ said Mr Moscatelli.

[Port Strategy]

10/12/2018

By Fox Chu, Sven Gailus, Lisa Liu and Liumin Ni

The challenges are significant, but careful planning and implementation can surmount them.

Although ports have adopted automation more slowly than comparable sectors, notably mining and

warehousing, the pace is now starting to accelerate. Automated ports are safer than conventional ones. The

number of human-related disruptions falls, and performance becomes more predictable. Yet the up-front

capital expenditures are quite high, and the operational challenges—a shortage of capabilities, poor data,

siloed operations, and difficulty handling exceptions—are very significant. A McKinsey survey indicates

that while operating

expenses decline, so does productivity, and the returns on invested capital are currently lower than the

industry norm.

Shanghai Yangshan Deep Water Port, the world's biggest automated container terminal, started trial

operations in December 2017. Photo: VCG

Nonetheless, successful automated ports show that careful planning and management can surmount these

difficulties: operating expenses could fall by 25 to 55 percent and productivity could rise by 10 to 35 percent.

And in the long run, these investments will lead the way toward a new paradigm—call it Port 4.0—the shift

from asset operator to service orchestrator, part of a larger transition to Industry 4.0, or digitally enabled

efficiency gains throughout the world economy. Port 4.0 will generate more value for port operators,

suppliers, and customers alike, but that value isn‘t proportionally distributed across ports and their

ecosystems. Innovative business models and forms of collaboration will be required to realize this vision.

The difficult economics of port automation

The first automated container port was developed in Europe in the early 1990s. Since then, many

ports—more than 20 in the past six years—have installed equipment to automate at least some of the

processes in their terminals (see sidebar, ―What is port automation?‖). Almost 40 partly or fully automated

ports now do business in various parts of the world, and the best estimates suggest that at least $10 billion has

been invested in such projects. The momentum will probably accelerate: an additional $10 billion to $15

billion is expected over the next five years.

On the face of it, container ports seem ideal places to automate. The physical environment is structured and

predictable. Many activities are repetitive and straightforward. They generate

vast amounts of readily collected and processed data. Better still, the value from automation includes not

only cost savings but also performance and safety gains for ports and the companies that do business there.

Nonetheless, ports are moving more slowly than sectors with comparable complexities (Exhibit 1), in part

because the economics of automating them haven‘t lived up to expectations. In the mining sector, which is

also process driven and asset intensive, some early movers in automation have improved costs and

productivity by 20 to 40 percent. In the warehousing business, the improvements have been estimated at 10 to

30 percent. Manufacturers of cars and trucks have also successfully automated complex processes, and some

of the equipment they use, such as automated guided vehicles and materials-handling robots, are highly

relevant for ports.

Source: McKinsey & Company

Yet our recent survey of industry leaders indicates that the real-world performance of most automated ports

doesn‘t increase sufficiently in every material way. Safety improves, the number of human-related

disruptions (such as shift changes) falls significantly, and performance becomes more predictable. But

practitioners responding to the survey think that these ports, especially fully automated ones, are generally

less productive than their conventional counterparts. The return on invested capital of assets at some

automated ports is falling short by up to one percentage point from the industry norm of about 8 percent.

What the research shows

To determine the current status and future outlook of container-terminal automation in the port sector,

McKinsey hosted a forum together with the Shanghai International Port Group and conducted a survey in

2017, just before the Port of Shanghai rolled out a fully automated terminal. We collected the responses of

more than 40 participants from leading practitioners in the top ports of China, Europe, the Middle East,

Singapore, and the United States; global

suppliers of automation equipment and software; and experts from academia, port asset- management firms,

and shipping companies. More than three-quarters of the participants were senior executives or high-level

managers.

The survey clearly showed that automation has become a trend. Eighty percent of the respondents expect that

in the next five years, at least half of all greenfield port projects will be semi- or fully automated. Thirty-five

percent believe that the proportion of automated ports will rise above seven in ten. Brownfield projects—the

total or partial conversion of existing conventional ports—will probably gain momentum soon: more than

half of the participants expect at least 50 percent of the top

50 ports to initiate retrofitting plans or to add automated

equipment during the next five years.

But the survey also clearly showed that the return on

investment from port automation demands attention from

port operators and investors alike. Up-front capital outlays

arehigh. We estimate that to justify these investments, the

operating expenses of an automated greenfield terminal

would have to be 25 percent lower than those of a

conventional one or productivity would have to rise by 30

percent while operating expenses fell by 10 percent.

The respondents to McKinsey‘s survey expect automation

to cut operating expenses by 25 to 55 percent and to raise

productivity by 10 to 35 percent, in line with our estimates

of what might be possible. But today these expectations

generally aren‘t realized, especially in fully automated

projects. Our survey indicates that operating expenses at

automated ports do indeed fall, but only by 15 to 35 percent

(Exhibit 2). Worse, productivity actually falls, by 7 to 15

percent. An executive of a global port operator told us, for

example, that at fully automated terminals, the average

number of gross moves per hour for quay cranes—a key

indicator of productivity—is in the low 20s. At many

conventional terminals, it is in the high 30s. With numbers like

these, automation can‘t overcome the burden of the up-front

capital expenditures.

Barriers and solutions

Responses to our survey suggest that the major barriers (in descending order of importance) are capabilities,

data quality, siloed operations, and the handling of exceptions.

• A shortage of capabilities

Respondents who had previous experience with automation say that the top problem is filling the specialized

technical positions it requires (Exhibit 3); they add that even experienced engineers can take as long as five

years to train. Many ports have apparently underestimated the challenge of acquiring the needed capabilities,

especially in planning and implementation. Port and terminal operators must therefore step up their efforts to

acquire talent and build these capabilities.

Source: McKinsey & Company

• Poor data quality

Like organizations in other sectors, ports find that data silos and a lack of data standards are basic problems in

automation. Many interviews with managers of port operations indicate clearly that the quality of data and

the data analytics isn‘t sufficiently strong to run automated ports efficiently.

Why? The first reason is that the lack of a structured, transparent data pool makes it hard to monitor and

diagnose the operations and performance of equipment quickly. Second, the standards, formats, and

structures of the data may be misaligned or even wholly absent, so ports can‘t collect and exchange data

efficiently.

Data-infrastructure applications have huge potential. They can help to predict and forecast demand and the

arrival-and-departure patterns of container ships. They can schedule the maintenance of equipment for

optimal availability, allocate equipment and frontline staff, and adjust the allocation in real time. They can

also use machine intelligence to make plans ever more accurate. Standardizing data so that they can be used

in these ways will help to make ports and terminals more efficient. Ports are not only becoming more aware

of this reality butare also starting to upgrade and harmonize their terminal operating systems. Nonetheless,

the IT setups of most terminal operators remain fragmented.

• Siloed operations

Breaking down silos between functions is always a challenge, but it is especially difficult for ports: the basic

principle of automation is process orientation, which requires integration across the end-to-end terminal

process chain and important interfaces. Automated ports, unlike conventional ones, can‘t contain problems at

individual functions or process steps. They must therefore ensure close collaboration among activities

ranging from marine operations to crane movements to the control of yards and gates.

• Handling exceptions

Many ports find that exceptions are the greatest single challenge for raising productivity. More than 60

percent of the operators in our survey agree that when ports have large numbers of exceptions, the likely

culprit is a mistaken approach to automating manual processes. Such ports skip an important step:

simplifying processes before automating them. These processes therefore remain cumbersome even after

they are configured by automated systems.

The way forward

No one route will take all ports to the automated future, but our knowledge of the leading automated ports has

revealed general principles that others might consider.

1. Build automation-ready capabilities. As we have already noted, port automation

shouldn‘t merely run old processes with new automated equipment. The first step is to redesign the

operating model. Port operators should start with a blank slate as they think through every process from

beginning to end, across functional silos. The redesigned processes will suggest the necessary organizational

structure and capabilities, including data, the human–machine interface, and the technical infrastructure.

2. Set up a strong project-governance and communication plan — and execute with discipline.

Automation projects require a wide variety of capabilities in areas such as terminal operations, technical

engineering, software engineering, and systems integration. A collaborative project environment is essential,

and so is early input from stakeholders such as customers, shareholders, labor representatives, operations

leaders, the technical team, vendors, and external experts.

3. Make sure to leave enough time for testing, dry runs of operations, and production trials. A

normal project cycle could involve 3,000 to 5,000 incident logs that users of the terminal and the port must

handle collectively, as well as months of stabilization efforts. Throughout the journey, the case for change

should be communicated thoroughly, and stakeholders must be carefully managed. Remember too that the

capital intensity of port automation has implications for the economics of projects and for the ongoing

cost of implementation, maintenance, and operations. It therefore calls for an awareness of the total cost

of ownership and for disciplined execution.

1. Define a road map to realize value from automation. Port concessions have timelines, so realizing

the benefits of automation at a reasonable pace is important. Port executives should develop the business

case for investments and support it with solid productivity, cost, and implementation targets. Then they

should monitor performance to track the capture of value. A step-by-step approach will probably work

better than a ―big bang‖ push for a total transformation in one mighty blow.

2. Build and continually refresh your technology ecosystem. Technical functions not only support

automated ports but also control the effort to improve their productivity and asset turnarounds. An

appropriate portfolio of in-house and third-party technology providers balances strategic control of

important competitive advantages against the need to keep up with the latest developments. The choice

of technologies should reflect the business needs of the port and its customers, not the intellectual

curiosity of the technical staff.

3. Incorporate external data into your automation system. One key benefit of automation is consistent,

predictable performance. In a perfect world, machines would execute nothing except instructions. But

operational variables beyond terminals—for instance, the arrival of trucks, feeders, and ships—are also

important elements of performance; ships, for example, may arrive or depart significantly earlier or later

than planned. An advanced automated port should factor these variables (typically available through

external data) into its automation systems so it can be flexible enough to cope with changes from customers

and unlock the potential of its investment in automation.

Beyond automated machinery

Over the years, ports have evolved through several basic models of operation. In what we call Port 1.0

(―management by hero‖), they adopt individual pieces of machinery, such as yard cranes, while workers

link individual process steps and direct yard operations. The process- driven operations that define Port 2.0

(―management by process‖) demand a process-oriented approach: ports govern the steps of these processes

through a terminal operating system, while operators make most decisions in the central control tower. Port

3.0 (―management by exception‖) is a progression from Port 2.0: automated equipment and algorithms run

and optimize processes, leaving humans to dispose of exceptions.

But Port 3.0 isn‘t the end of the story. In the model of the future, Port 4.0 (―from manage to orchestrate‖),

ports will enlarge their role by orchestrating physical and information flows inside and outside terminals to

enhance the port ecosystem‘s broader, systemwide efficiency (Exhibit 4). Forward-looking ports will push

toward this next horizon, beyond automation, in the coming Port 4.0 era. Every player—terminal operators,

trucking companies, railroads, shippers, logistics companies, and freight forwarders—will be connected to

optimize not just the port itself but also its entire ecosystem.

What is port automation?

Automation has five components in ports. They can create value by implementing each component

individually but will unlock the full benefit only if all five are integrated and coordinated.

1. Automated equipment. Typically, automation requires large up-front capital investments across

functions such as ship to shore, yard operations, ground transportation, and gate automation. The technology

is relatively stable and mature for many solutions, and we have seen them implemented successfully. This

kind of equipment makes operations run more consistently and without downtime. Ports are starting to

recognize the importance of such benefits even where low factor costs seemingly make automation hard to

justify.

2. Equipment-control systems. The essential systems and processes that control machines and

equipment make operations smoother and provide more information for decision making. Although

integrating many systems and interfaces is hard, and the lack of standardization adds complexity, many ports

have begun to use such applications: ports have integrated gate-operating software with advanced optical-

character-recognition and camera technology, for example, to automate gate operations and to identify and

route containers and trucks automatically.

3. Terminal control tower. The ―brain‖ of an automated terminal comprises the terminal operating

system, decision-making tools, advanced analytics, the digital platform, and interfaces to the port community

and customers. The control tower coordinates and optimizes the management of the entire port; handles

demand forecasting, workflow management, scheduling, optimization, monitoring, and control; gives

working instructions to the equipment controls; and receives real- time feedback from them. Advanced

analytics and machine learning, which can improve the performance of ports by generating better demand

forecasts and optimizing operations, will enable these benefits.

4. Human–machine interactions. The increasing use of robots and other automated equipment

makes interactions between them and humans increasingly important in ports. These interactions take many

forms; technologies like augmented reality and virtual reality, for example, direct robots and automated

guided vehicles. Augmented reality can also speed up complex tasks such as maintenance. Humans will soon

be able to program their own experiences and judgment into these systems.

5. Interactions with the port community. A more seamless exchange of data and connectivity along

the wider value chain—both sea side and land side—makes the system more efficient. Digitization and

real-time connectivity are important for collaboration among the key stakeholders (including liners, logistics

service providers, consignees, and customs officials) and for interactions with the wider port ecosystem.

Source: McKinsey & Company

1 Earnings before interest, taxes, depreciation, and amortization

2 Ship to shore

3 Rubber-tired gantry

Source: McKinsey & Company

The cornerstone of Port 4.0 will be automation, which—if implemented and configured appropriately—can

transform ports into highly reliable and flexible logistics hubs that direct predictable physical flows and use

extensive data and advanced analytics to buffer the many variables in transportation networks. Ports, now

often seen as constraints in transportation networks, could then actively resolve problems in other parts of the

value chain.

This journey from Port 1.0 to Port 3.0 has been evolutionary, but Port 4.0 requires a leap into the future and

bold changes in the operating model. We estimate that for a six- to eight- million TEU6 port that handles both

imports and exports, the value at stake from Port 4.0 might be more than $1.5 billion a year for the port

community, including terminal operators, shipping companies, intermodal operators, freight forwarders,

shippers, and consignees. Terminal operators might capture less than 20 percent of the value pool directly,

and other parties in the ecosystem would claim the rest (Exhibit 5).

The sectorwide gain in efficiency is obvious. But the ports‘ traditional investment model, which requires

terminal operators to front-load investments, doesn‘t align with the distribution of value in Port 4.0. It will be

essential to involve the relevant stakeholders and to develop, together with them, a new business and

governance model for collaboration—a model that ties investments to the redistribution of value. Only then

will Port 4.0 unlock its full potential.

Desarrollo portuario Argentina: Llaman a licitación para terminal multipropósito en

Mar del Plata

1 Sum of revenue and cost absolute impact, rounded numbers

2 Assuming ~$1 billion in revenues for container port, 6 million–8 million twenty-foot equivalent units of

import/export generated, and ~$2 trillion trade value per annum

3 Sum of revenue and cost absolute impact, rounded numbers. The indirect impact includes customs, port

authority, towage, and pilotage

Source: McKinsey & Company

The value at stake from Port 4.0 is large but not proportionally distributed across ports and their ecosystems.

Realizing that value will require innovative business models and new collaboration frameworks. They won‘t

come easily. Yet this is surely a future worth striving for.

[McKinsey & Company]

10/12/2018

El Consorcio Portuario Regional Mar del Plata abrió el llamado a licitación nacional e internacional para el

desarrollo del denominado Plan de Concesión de Terminal Multipropósito de Ultramar - Espigón 3

Desarrollo portuario Colombia: Proyectan concretar 17 nuevas terminales

La obra implica una inversión estimada en US$20 millones sobre un predio de más de cuatro hectáreas,

comprende como primer paso la demolición del elevador de granos y silos, deteriorados en su infraestructura,

para despejar esa superficie que se asignará a la operatoria de grandes embarcaciones vinculadas al transporte

de contenedores y cargas generales.

Con amplio predominio de la actividad pesquera, el puerto de Mar del Plata buscará con esta inversión

privada generar condiciones para optimizar el volumen de exportaciones e importaciones y mejorar

condiciones operativas y comerciales para la exportación de producciones originadas en esta ciudad y la

zona.

―Hay interés concreto de firmas del país e incluso del exterior para invertir en este sector y generar más

operaciones y trabajo para el puerto‖, confirmó el presidente del Consorcio Portuario Regional Mar del Plata,

Martín Merlini. Las ofertas que se reciban se conocerán el próximo 18 de febrero de 2019.

El Plan de Concesión de Terminal Multipropósito de Ultramar prevé la definición de un área exclusiva que

incluye gran parte del tercer espigón y la asignación de dicha área a un operador privado para su puesta en

marcha como terminal portuaria, por lo que será entonces un terminal público operado por un concesionario

privado, que deberá invertir en equipamiento, infraestructura y ordenamiento operativo.

[MundoMarítimo]

10/12/2018

Un informe de la Cámara Colombiana de la Infraestructura (CCI), y datos suministrados por la Agencia

Nacional de Infraestructura (ANI) de Colombia, revelan que se estudia y se analiza la construcción de cerca

de 17 terminales portuarios, en los próximos años, que permitirán atender diferentes tipos de carga, consignó

Dinero.

Estos desarrollos se sumarían a los 60 puertos ya concesionados. De esta manera, la industria portuaria

pasaría a tener una capacidad de 514 millones de toneladas en 2021, incluida carga general y de

contenedores, hidrocarburos, gráneles y carbón, entre otros, según el estimado de la Agencia Nacional de

Infraestructura (ANI).

Entre los puertos del futuro que ya han sido otorgados, se encuentran: Puerto Bahía Colombia de Urabá, en

Turbo, Antioquia; Graneles del Golfo, en San Antero, Córdoba; y Exxon Mobil en Cartagena, Bolívar.

De acuerdo con la ANI, Puerto Antioquia, es una concesión portuaria multipropósito de uso público en

Urabá, otorgada mediante Resolución 606 de 6 de abril de 2015 por 30 años. Está pendiente la firma del

contrato de concesión, actualmente con plazo hasta el 24 de noviembre de 2018. Y en trámite, la nueva

resolución ampliando este plazo y ajustando algunas condiciones. Para este proyecto la inversión propuesta

es de US$256,3 millones.

Mientras que Pisisí, en Turbo, Antioquia, es un terminal multipropósito, que según la ANI tiene solicitud de

concesión por 30 años. Cuenta con la resolución de fijación de condiciones del 16 abril de 2016 y

actualmente se encuentra en estudio la resolución de otorgamiento. Para este terminal se propone una

inversión de US$147 millones.

Un tercer proyecto que entraría a reforzar el mapa portuario, es Graneles del Golfo, que corresponde a una

concesión portuaria multipropósito de uso público en San Antero, Córdoba, otorgada mediante Resolución

1808 del 7 de diciembre de 2016 por 20 años. En este caso la inversión propuesta alcanza los US$21,7

millones.

Para esta iniciativa está pendiente la firma del contrato de concesión, luego que la Corporación Autónoma

Regional de los Valles del Sinú y San Jorge –CVS– suspendió la licencia ambiental por posible existencia de

comunidades étnicas en la zona de influencia del proyecto. Para esos efectos el área de Certificaciones de la

Dirección de Consulta Previa del Ministerio de Interior está trabajando en esa línea.

De los 17 terminales portuarios que ingresarían los próximos años, si se conceden los permisos respectivos,

tres son privados y 14 públicos, y en su mayoría se definen como multipropósito o tienen el fin de mover

hidrocarburos. Gran parte de los nuevos terminales se ubicarán en Buenaventura y Cartagena, que hoy son

las principales ciudades portuarias si se tienen en cuenta que son las que reciben y despachan todo tipo de

carga.

Buenaventura y Barranquilla

En Buenaventura, hay tres puertos con condiciones acordadas y otros tres que han sido solicitados. Del

primer grupo, el que más recibirá inversión es el de Delta del Río Dagua, con US$246 millones, que se usarán

para construir una terminal de contenedores y carga general.

Otra iniciativa es el proyecto de Puerto Solo –PIO SAS– en Buenaventura. Se trata un terminal de

contenedores, carga general y regasificación, con una inversión de US$54 millones, en el primer año y de

cerca de US$30 millones, al quinto año.A eso se suma el proyecto de Delcop Colombia S.A.S en Manaure

para el manejo de sal, que está en proceso de solicitud.

También se avisora para un plazo de seis años, el proyecto del ‗Superpuerto en Barranquilla‘, que requeriría

US$970 millones, y consiste en construir y operar un puerto fluvial y marítimo de aguas profundas en Bocas

de Ceniza, que conecte el río Magdalena y el mar Caribe. Cabe mencionar que, en el caso de Barranquilla, se

intenta replicar el modelo holandés, el cual permite expansiones por fases y vinculando capital privado y

público.

Este proyecto se encuentra en reformulación, pero ya se conoció que hay dos firmas internacionales

interesadas en participar en la sociedad portuaria, liderada por la Alcaldía de Barranquilla, la Gobernación

del Atlántico y el Ministerio de Transporte. Firmas como Impala han manifestado su interés en esta iniciativa

que se dio a conocer hace diez años.

Pese a la gran cantidad de puertos que se proyecta hay visiones como la del gerente general de la Sociedad

Portuaria Regional Cartagena, capitán Alfonso Salas, quien señaló que la cantidad de puertos, o el tamaño de

las naves no garantiza la competitividad -es un negocio que depende de la demanda– si el escenario mundial

del comercio y la industria naviera sigue viendo a Colombia atractiva para anclar, la infraestructura portuaria

cada día está más lista y su futuro es prometedor, aseguró.

[MundoMarítimo]

Terminal operators Indonesia: ITF alleges safety shortcomings at Huchinson's Jakarta

International Container Terminal

10/12/2018

The Saudi Industrial Services Company (SISCO) has signed a contract with the Suez Canal Economic Zone

(SCZone) for the construction of a multipurpose terminal in the eastern area of the Egyptian port of Port Said.

The agreement, under which investments worth EGP 1.5 billion ($84 million/€73 million) are planned,

includes the design, construction and operation of the new terminal. The multipurpose terminal will cover an

area of 380,000 m² and will start operating in mid-2019 when the construction of a first dock of 900 linear

metres will be completed.

SISCO operates in the port sector through its subsidiary Red Sea Gateway Terminal (RSGT), which manages

the container terminal in the Saudi port of Jeddah, and through Red Sea Port Development (RSPD).

[PortSEurope]

10/12/2018

The International Transport Workers' Federation (ITF) dockers' union has set its sights on leading terminal

operator Hutchison's Jakarta International Container Terminal (JICT), alleging patterns of poor workplace

safety.

On Monday, a new ITF Dockers' safety working group met in Hong Kong to discuss patterns of workplace

incidents. Over the past year, more than 50 dockers have died in preventable incidents at ports around the

world. During its review, the meeting noted a serious accident this week at Jakarta International Container

Terminal (JICT) in which a container of dangerous

chemicals dropped from an RTG crane. No one was injured in the accident. A union investigation

concluded that equipment failure and an inexperienced operator were the main reasons for the accident.

―[We] stand united in our utter condemnation and preparedness to fight so that every worker goes home

safely,‖ said Suryansyah Bahar, deputy president of the ITF-affiliated union Serikat Pekerja Jakarta

International Container Terminal (SP JICT). ―Hutchison is the biggest stevedore in the world and has an

obvious responsibility to its global workforce to meet occupational health and safety requirements."

According to ITF, five workers have died at JICT over the past two years, and there have been more than 10

nonfatal incidents per month in 2018. ITF alleges that the accidents are a direct result of the dismissal of one

hundred experienced and unionized workers, who were allegedly replaced with inexperienced workers.

―They chose to bust the union over safety and performance at the terminal, and this has led to injury and

Terminal operators Egypt: Saudi SISCO to build and operate multipurpose terminal in

Port Said

Terminal operators Australia: ACCC takes NSW Ports to court

over „illegal‟ container terminal deals

death,‖ said ITF president Paddy Crumlin.

ITF and SP JICT have also accused Hutchison of reducing workers' wages, and other ITF- affiliated unions

have raised allegations of unsafe conditions at the firm's other Asia-Pacific facilities. Separately, ITF has

also targeted Philippine-based terminal operator ICTSI over alleged anti-union activity, safety

shortcomings and other concerns.

[The Maritime Executive]

10/12/2018

By Michael Parris

Australia‘s competition watchdog has launched legal action against NSW Ports, arguing its deal with the

state government to compensate Port Botany and Port Kembla if Newcastle develops a container terminal is

both illegal and anti-competitive.

The Australian Competition and Consumer Commission (ACCC) started proceedings in the Federal Court on

Monday against NSW Ports and its Port Botany and Port Kembla subsidiaries ―for making agreements with

the State of NSW that the ACCC alleges had an anti-competitive purpose and effect‖.

The state privatised Port Botany and Port Kembla in 2013 with 50-year deeds which oblige the government

to compensate the NSW Ports consortium if container traffic at Newcastle is above a specified cap.

ACCC chair Rod Sims said the state had used the compensation arrangement to fatten up the

$5.1 billion lease price, but the deal came at the expense of a ―long-term competitive market‖. Another

50-year deed, signed in May 2014 when the state leased Newcastle for $1.75 billion, requires Port of

Newcastle to reimburse the government for any compensation paid to NSW Ports.

The Newcastle Herald revealed the secret agreements in 2016 after repeated denials in and out of parliament

that any such limits on Newcastle‘s container trade existed. The ACCC alleges the reimbursement provision

in the Newcastle deed is an anti-competitive consequence of the Port Botany and Port Kembla agreements

and makes the development of a container terminal in Newcastle uneconomic.

A spokesman for Port of Newcastle welcomed the ACCC action and said the firm had a ―clear plan to build a

world-class container terminal and protect Australia‘s competitiveness in a global market‖. The company‘s

plans are for a terminal on the site of the former BHP steelworks on the Hunter River.

The largely automated terminal would not be a significant employer, but it would cost several hundred

million dollars to build and could spawn distribution warehouses at or near the Mayfield site.

Newcastle handles only about a third of the 30,000 containers it can receive before it must start paying

compensation, but it is keen to build a new terminal and attract new business if the cap is removed. The port

is half-owned by China Merchants Group, a Chinese state-owned enterprise with extensive experience in

developing and operating container terminals.

Terminal operators UAE: COSCO plans $200 million Abu Dhabi container terminal

expansion

―At a time when Australia risks being left behind, Newcastle is uniquely placed as a deep- water port with

mature road and rail connections to handle the ships now managing much of the task,‖ the Port of Newcastle

spokesman said. ―It is in the interests of the NSW and Australian economies that a world-class container

terminal be built in Newcastle.‖

Mr Sims said he had ―long voiced concerns about the short-term thinking of state governments when

privatising assets and making decisions primarily to boost sales proceeds‖.

The ACCC is seeking declarations that the compensation provisions in the 2013 deeds contravene the

Competition and Consumer Act 2010 (CCA), injunctions restraining the operators of Port Botany and Port

Kembla from seeking compensation under these provisions, pecuniary penalties and costs.

Mr Sims may have the government in his sights, but the Act applies to the conduct of state governments only

in certain limited circumstances. The government is not a party to the ACCC‘s proceedings and the ACCC is

not seeking orders against the state.

[Newcastle Herald]

10/12/2018

China's COSCO Shipping Ports (CSP) plans to expand its container terminal in Abu Dhabi in the next 3 to 5

years with an investment of $200 million as more Chinese companies set up in the emirate, its vice-chairman

and managing director said.

COSCO's new container terminal, with a capacity of 2.5 million TEU at Abu Dhabi's Khalifa Port, was

inaugurated on Monday. COSCO has spent $300 million on the terminal and $130 million on a container

freight station after it won a 35-year concession in 2015 from Abu Dhabi Ports.

The bulk of China's non-oil trade with the UAE currently goes through Dubai, but Abu Dhabi is hoping to

take some of that business as it invests billions in infrastructure, industry and tourism to diversify its

economy away from oil. Dubai's Jebel Ali port is much larger and only about 40 km north along the coast.

The capacity at the Abu Dhabi terminal could be expanded by one million TEUs, Zhang Wei told reporters.

One of COSCO's biggest container ships, with capacity of 20,000 TEUs, will also call on Khalifa Port, he

said, predicting more volume and lower freight costs for containers entering or leaving Abu Dhabi.

Chinese companies are increasingly seizing opportunities in the Gulf as Beijing seeks to expand overseas

with its ambitious Belt and Road trade and infrastructure plan. Foreign direct investment from Chinese

companies in Abu Dhabi's Khalifa Industrial Zone has reached $1 billion, officials said in April. With the

opening of COSCO's new terminal, total capacity at Khalifa Port will go up to 5 million TEUs.

[Reuters]

Container shipping: Moody's downgrades Maersk's credit rating amid fears for box

shipping sector

10/12/2018

By Mike Wackett

Maersk has had its credit rating cut by ratings agency Moody‘s to one grade above junk, with

the agency concerned about a ―significant downside‖ for the container industry.

Moody‘s said on Friday it was downgrading Maersk from Baa2 to Baa3, which is at the bottom of its

investment grade bond ratings, and just one notch above grades ―judged to have speculative elements and a

significant credit risk‖.

Moody‘s vice president, and senior analyst, Maria Maslovsky, added: ―The downgrade reflects our

expectation that Maersk will face increased market and execution risks and, as a result, operate at a higher

leverage than is commensurate with a Baa2 rating for a company in such a volatile and cyclical business as

container shipping.‖

Moody‘s said its expectation was that Maersk would operate with a debt/ebitda leverage ratio of 3-3.5, which

is higher than its criteria for a Baa2 rating, but the downgrade reflected the ―significant downside risks facing

the container shipping industry‖.

It added: ―As the broad economic growth globally is expected to be less robust in 2019 as compared with

2018, global trade, the key demand driver for container shipping, is also likely to come under pressure. This

trend is further exacerbated by the overhang of the US-China trade tensions.

―In addition, the container shipping industry struggled with the lag in passing through increasing bunker

costs in 2018, and will need to pass through additional increased fuel costs associated with IMO 2020.‖

However, Moody‘s said that offsetting the challenges facing the biggest ocean carrier was the fact that it was

also the fourth-largest operator of container terminals globally. It said it viewed the terminal business, which

contributes almost 20% of Maersk‘s ebitda, as ―more stable than liner operations‖, with Maersk‘s

―significant investment in terminals‖ setting it ―apart from its peers‖.

Moody‘s also positively noted: ―Maersk‘s focused and disciplined management team, its stable shareholding

and strong, public commitment to investment grade ratings.‖

The Danish transport and logistics group moved back into the black in the third quarter, with a net profit of

$251m, giving a cumulative positive of $100m for the nine-month period. Group CEO Soren Skou said the

result represented ―solid progress in our transformation‖ and predicted the fourth-quarter result would be

―very, very similar‖.

In a separate development, Maersk has issued a customer advisory with more information on its decision to

move the supply chain services offered by its forwarding arm, Damco, into Maersk Line from 1 January. It

provided clarification on the measures to split the Damco business relating to contracts with customers,

neutrality and confidentiality, which has caused some concern among customers.

Container shipping U.S.: FMC to standardize container detention and demurrage

across the country

In the transition, Maersk said, ―…there will be strict guidelines and only relevant teams within the Maersk

organisation will be able to access your sensitive information to ensure that we maintain customer

confidentiality and neutrality‖. It added: ―Damco Freight Forwarding will continue to offer freight

forwarding products and services and will do so as a separate, independent business under the Damco brand.‖

[The Loadstar]

10/12/2018

By Gavin van Marle

US shipping regulatory body the Federal Maritime Commission (FMC) is to introduce revised rules covering

container detention and demurrage practices across the country after commissioner Rebecca Dye released the

results of an eight-month investigation into how carrier and container terminal apply the charges.

The main conclusion was that demurrage and detention charges are justified to the extent that they

―incentivize cargo to move expeditiously‖ through US ports. But they need to be standardized – in terms of

when the fees are applied and by how much – across the industry.

The FMC report, titled Fact Finding Investigation No. 28 (Final Report): Conditions and Practices Relating

to Detention, Demurrage, and Free Time in International Oceanborne Commerce, also says shippers would

greatly benefit from visibility into container availability.

―An equally important finding was that focusing demurrage practices on notice of when cargo is actually

available would likely eliminate many of the circumstances that lead to the imposition of demurrage fees.‖

It said the grounds for this would be created by launching innovation teams to develop four key themes:

creating ―transparent, standardized language for demurrage and detention practices‖; developing ―clear,

simplified and accessible demurrage and detention billing practices and dispute resolution process‖; issuing

―explicit guidance regarding the types of evidence relevant to resolving demurrage and detention disputes‖;

and getting carriers and terminals to deliver ―consistent notice to cargo interests of container availability‖.

Ms Dye said: ―The hand-off of a container from carrier to terminal to trucker to destination is not a linear

process. In reality, everything is happening at once and that is why it is so daunting a task to get a handle on

these issues. ―The team process is ideally suited to creating the engagement necessary between subject matter

experts to allow for private sector driven process improvements.‖

Her report also recommends the creation of a shipper advisory board. ―It was found that the complexity of

port operations and the wide variation in port procedures and practices supported the conclusion that the

commission could benefit from the establishment of a shipper advisory board for the FMC. The fact-finding

officer also supports advisory boards for other commission stakeholders and those involved in the US

international freight delivery system.‖

[The Loadstar]

10/12/2018

The U.S. U.S. Energy Information Administration (EIA projects that U.S. liquefied natural gas (LNG) export

capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the

world behind Australia and Qatar.

Currently, U.S. LNG export capacity stands at 3.6 Bcf/d, and it is expected to end the year at

4.9 Bcf/d as two new liquefaction units (called trains) become operational.

The United States began exporting LNG from the Lower 48 states in February 2016, when the Sabine Pass

liquefaction terminal in Louisiana shipped its first cargo. Since then, Sabine Pass expanded from one to four

operating liquefaction trains, and the Cove Point LNG export facility began operation in Maryland. Two

more trains—Sabine Pass Train 5 and Corpus Christi LNG Train 1—began LNG production this year,

several months ahead of schedule, and are expected to ship their first cargos within the next few weeks.

Two more LNG export facilities—Cameron LNG in Louisiana and Freeport LNG in Texas—are currently

being commissioned. Commissioning of liquefaction facilities involves introducing natural gas feed into the

train and ultimately producing LNG. For liquefaction terminals, which use refrigeration to cool natural gas

into liquid form, commissioning also includes getting the equipment and refrigerants down to sufficiently

cold temperatures. The first LNG production from these facilities is expected in the first half of 2019. The

developers of these projects

expect all three trains at Cameron LNG and two trains at Freeport LNG to be placed in service in 2019.

The Elba Island LNG facility near Savannah, Georgia, is also scheduled to become fully operational by the

end of 2019. Elba Island LNG consists of 10 small modular liquefaction units with a combined capacity of

0.33 Bcf/d. Project developers expect LNG production from the first train to begin early next year and from

the remaining nine trains to commence sequentially through the rest of 2019. The second train at Corpus

Christi LNG is scheduled to be placed in service in the second quarter of 2019. The final two trains of the

Gas shipping U.S.: LNG export capacity to more than double by the end of 2019

Oil shipping U.S.: Texas approves $360 million Corpus Christi channel widening and

deepening project

U.S. liquefaction projects currently under construction—Freeport Train 3 and Corpus Christi Train 3—are

expected in service in the second quarters of 2020 and 2021, respectively.

Four additional export terminals—Magnolia LNG, Delfin LNG, Lake Charles, Golden Pass—and the sixth

train at Sabine Pass have been approved by both the U.S. Federal Regulatory Commission and the U.S.

Department of Energy, and they are expected to make final investment decisions in the coming months.

These proposed projects represent a combined additional LNG export capacity of 7.6 Bcf/d.

Note: Each square represents one LNG train, with the exception of Elba Island, which will deploy 10

small-scale modular liquefaction units sequentially in two phases

Source: EIA, company investor presentations

U.S. LNG exports continue to increase with the growing export capacity. EIA‘s latest Short- Term Energy

Outlook forecasts U.S. LNG exports to average 2.9 Bcf/d in 2018 and 5.2 Bcf/d in 2019 as the new

liquefaction trains are gradually commissioned and ramp up LNG production to operate at full capacity. The

latest information on the status of U.S. liquefaction facilities, including expected online dates and capacities,

is available in EIA‘s database of U.S. LNG export facilities.

[EIA]

10/12/2018

After three decades of wrangling, Texas officials have approved funding to expand the Port of Corpus

Christi, which will widen and deepen its shipping channel -- a project that will have national and

international implications.

Corpus Christi shipping channel. Credit: UPI

The $360 million Corpus Christi Channel Improvement Project is expected to be a boon to Texas oil drillers

as large oil tankers will be able to load more than 2 million barrels of crude oil at a time. The funding came

weeks after the Carlyle Group announced plans for a major crude oil export terminal on Harbor Island, near

the mouth of the port. The project aims to dredge to a depth of 75 feet, large enough to accommodate fully

loaded tankers, called Very Large Crude Carriers.

The terminal will be the first onshore location in the United States capable of exporting with VLCCs and

would further the port's position as the preeminent global crude oil export hub, Carlyle Group said in a

statement. The ship channel will also be widened more than 30 feet near the island.

The port been pushing to expand the shipping lane since 1990, but only received funding approval from the

Army Corps of Engineers in the last few weeks. The goal is to get Carlyle Group's Harbor Island project built

and dredged by 2021, port CEO Sean Strawbridge said. "We're ready to go when those pipelines come in," he

said. "The new lines will add 2.4 million barrels of takeaway capacity just from the Permian" oil fields.

The rest of the channel will be dredged to a depth of 54 feet -- up from 47 feet in most places now -- with a

mix of federal and local dollars. The Carlyle Group said it will arrange private funding to take its portion of

the channel down the additional 26 feet. Portions of the channel will be widened for safer two-way traffic.

Oil shipping China: Qingdao Port has started construction of second 300,000 tonne

VLCC terminal

Oil shipping: Diesel-loaded tankers stranded in Asia as buyers retreat

The Army Corps of Engineers announced it will include $59 million for the project in the 2019 federal

budget. It was the final piece needed to fund the large-scale dredging and widening project, Strawbridge said.

After the dredging is complete, VLCCs could travel the entire ship channel as long as they aren't fully loaded.

The timing comes three years after the federal government lifted its 40- year-old ban on crude oil exports,

which has sparked a flurry of capital investment in Corpus Christi.

[UPI]

10/12/2018

By Katherine Si

Qingdao port, the leading crude oil and ore handling port of China, has started building its second 300,000

tonne-class crude oil terminal at Dong Jia Kou port area with completion scheduled by the end of 2019.

The terminal project includes one new 300,000 tonnne-class oil berth plus one 100,000 tonne- class berth and

supporting facilities. The 25m tonne new crude oil handling capacity will be added when the terminal

launched operation.

Meanwhile, the port also started the construction of the 600,000 cu m crude oil storage tank at Dong Jia Kou.

Jointly invested by Qingdao port and PetroChina, the tank will be mainly supporting local crude oil

transportation and storage.

Qingdao port started its crude oil business in 1976 and has the country‘s top imported oil product uploading

capacity. Currently, Qingdao port has four sectors of Qingdao Dagang port area, Huangdao oil port area,

Qianwan port area and Dongjiakou port area.

The port operates the world‘s largest 400,000 tonne-class ore terminal and a 450,000 tonne- class crude oil

terminal.

[Seatrade Maritime News]

10/12/2018

By Jessica Jaganathan

Shipbreaking: Ship Recycling Transparency Initiative launches new platform to drive

responsible ship recycling

Several tankers carrying diesel fuel are floating off Taiwan and Southeast Asian waters as a steep fall in oil

prices kept buyers at bay, trade and shipping sources said on Friday, helping push rates to their highest since

January 2016.

With tanker rates also boosted by strong Chinese oil exports, it was a big relief for an industry that has been in

the doldrums for the past three years.

About seven to nine long-range tankers carrying about 5 to 7 million barrels of diesel are currently floating

off Taiwan waters largely due to a drop in bunker fuel demand from the South China Sea, several trade and

shipping sources said.

―When flat prices started dropping rapidly, the buyers pulled back as they think prices have not bottomed

out,‖ a Singapore-based middle distillates trader said.

The two global oil benchmarks, North Sea Brent and U.S. crude, had their weakest month for more than 10

years in November, each losing more than 20 percent as global supply outstripped demand. Typically, the

fourth quarter is peak demand season for middle distillates, a group of oil products including diesel used in

agriculture, industrial and power sectors.

―This year has been highly unusual and I think much of it has to do with the trade war impacting the Chinese

economy and in turn diesel demand,‖ a North Asian trader said. ―The traders storing diesel in vessels bought

the cargoes earlier to sell to end-users but demand has not been as good as expected.‖

The Ocean Explorer, carrying nearly 110,000 tonnes of diesel, has been anchored at Kaohsiung Central

anchorage since Nov. 26 while AG Neptune, carrying about 105,000 tonnes of gasoil, has been floating off

Taiwan and more recently in Malaysian waters since mid- October, Refinitiv Eikon shipping data showed.

Storage of clean oil products has also been filling up due to weak demand for gasoline, which is competing

for tank space in onshore tanks, the North Asian trader said.

‗Feels like Christmas‘

Storage of oil products on ships has pushed the rates for long-range 2 vessels on the benchmark Middle East

Gulf to Japan route to about $30,000 a day, double what it was a week ago and the highest since January

2016, said Ralph Leszczynski, head of research at shipbroker Banchero Costa in Singapore.

China‘s increased exports of oil products after Beijing issued more export quotas for state refiners also

helped lift tanker rates, a Singapore-based shipbroker said, declining to be named as he was not authorised to

speak with media. ―With the middle distillates arbitrage open from east to west recently, naphtha arbitrage

open from the west to east, China exporting, fuel in storage, all the stars are aligned,‖ he said. ―It feels like

Christmas.‖

[Reuters]

According to 2017 data released by the NGO Shipbreaking Platform in February, of the 835 large ocean-going

commercial ships that were sold for scrap in 2017, a total of 543 ships were intentionally run ashore and

dismantled by hand at shipbreaking yards in Bangladesh, India and Pakistan, where the controversial93

‗beaching‘ method continues to be the predominant means of disposal for end-oflife vessels.

10/12/2018

Shipping companies and the NGO Sustainable Shipping Initiative (SSI) announced the launch of the Ship

Recycling Transparency Initiative‘s (SRTI) online platform, a tool for sharing information on ship recycling

to drive responsible practice.

The platform comes nine months after a group of shipping companies first announced their collective effort

to use the market-drivers that transparency brings to make responsible ship recycling the norm. Demanding

transparency holds the shipping industry to account, raising the bar for current practice as well as creating

fair competition among shipowners.

In 2017, 835 ships were recycled out of a world fleet of 50,000. Despite the known risks associated with ship

recycling there is no global regulation currently in force, resulting in a wide range of approaches – ranging

from practices with adverse social and environmental consequences to responsible ship recycling practices,

which this initiative is shining the light on.

Source: gCaptain: NGO Shipbreaking Platform: 152 Ships Broken Up on South Asia‘s Beaches in First

Quarter of 2018 [27 Apr 2018]

Ship scrapping at the beaches of Alang. Pakistan.

With transparency on shipping companies‘ ship recycling policies and practices, it becomes possible for the

industry‘s stakeholders – including shippers, lenders, investors and insurers – to make informed decisions.

The importance of such decisions is increasing with the growing expectation for companies to take

responsibility for their value chain sustainability. Responsible ship recycling is good for brand value,

protecting reputation and good for business, and is key to being recognised as a responsible and sustainable

shipping industry.

The SRTI is neither a standard nor a rating tool, it is an online platform that shipping companies can use to

disclose relevant information on ship recycling. The information provided is allowed to tell its own story and

is readily available to the industry‘s stakeholders, as well as the broader public. The platform creates an onus

Propulsion: Flettner rotor exceeds expectations

for stakeholders to use the SRTI for both more informed decision-making, as well as to push for greater

transparency.

The SRTI is hosted by the Sustainable Shipping Initiative and brings together shipowners, investors, banks,

insurers, cargo owners and other key stakeholders from across the maritime industry. Its founding signatories

include shipowners The China Navigation Company, Hapag- Lloyd AG, A.P. Moeller-Maersk, NORDEN,

Stolt Tankers and Wallenius Wilhelmsen; financial stakeholders GES, Nykredit and Standard Chartered

Bank; classification society Lloyd‘s Register; and sustainability non-profit Forum for the Future.

[SRTI / gCaptain]

10/12/2018

The performance of the EcoFlettner, which is being tested on the MV Fehn Pollux since July, as exceeded the

expectations of the scientists monitoring it.

Fehn Pollux

15 companies from around Leer, Germany, have been involved in the development and construction of the

sailing system, a project funded by the E.U. and coordinated by Mariko. The rotor is 18 meters high and has

a diameter of three meters. After test runs ashore, the rotor is now being tested under real conditions on board

90-meter multi-purpose vessel MV Fehn Pollux operated by Fehn Ship Management.

Flettner rotors use the wind to create additional thrust for ship propulsion: a Flettner rotor is a high cylinder

that stands vertically on a ship and rotates on its own axis. It is driven by an electric motor. The optimum

rotational speed depends on the wind speed and direction. The interaction between rotor surface and wind

flow creates a lift force so that the ship receives additional thrust.

"The data we have evaluated so far significantly outmatch those of our model calculations," says Professor

Michael Vahs, who has been researching the topic of wind propulsion for seagoing vessels at the University

Rules & regulations: UK Supreme Court confirms carrier liability for cargo damage

of Applied Science Emden / Leer for more than 15 years. "In perfect conditions, this prototype delivers more

thrust than the main engine."

The University of Applied Sciences has developed a purpose-made measuring and control system which

enables scientists to gather transparent and reliable performance data on over 50 parameters, collected

continuously on board. A computer uses the data to calculate the optimum settings for the rotor.

"The longer the trial lasts and the more data we get, the more accurate the results will be," says Vahs. ―But the

data gathered so far allows us to say that the EcoFlettner saves a noticeable amount of fuel. We are also able

to prove that for shipowners the investment in this sailing system is worth considering, because it pays off in

a few years."

In a separate project, wind propulsion firm Norsepower installed two of its Rotor Sails aboard the LR2 tanker

Maersk Pelican. At 30 meters tall by five meters wide, they are the largest units that Norsepower has ever

built, and they are expected to reduce fuel consumption and associated emissions from the Pelican by about

7-10 percent. Lloyd's Register's Ship Performance team will collect data during a test phase and conduct an

impartial third-party assessment.

The E.U. forecasts that there could be up to 10,700 wind propulsion installations on bulkers and tankers by

2030. Gavin Allwright, Secretary of the International Windship Association, says 2018 has been a very

significant year for wind propulsion. ―We could say that a perfect storm is brewing for the uptake of primary

(wind etc.) and secondary renewable energy (alternative fuels/energy storage) in shipping. Policy, price,

perception, providers and people are all starting to align.‖

Wind Propulsion Technologies break down into seven main categories:

• Soft Sail – both traditional sail and new designs of dynarig etc.

• Hard Sail – wingsails, foils etc. Some rigs have solar panels for added ancillary power generation.

• Flettner Rotor (Rotor Sail) – rotating cylinders operated by low power motors using the Magnus effect

(difference in air pressure on different sides of a spinning object) to generate thrust.

• Suction Wings (Ventifoil, Turbosail) – non-rotating wing with vents and internal fan (or other device)

that use boundary layer suction for maximum effect.

• Kites – dynamic or passive kites off the bow of the vessel to assist propulsion or to generate a mixture of

thrust and electrical energy.

• Turbines – using marine adapted wind turbines to either generate electrical energy or a combination of

electrical energy and thrust.

• Hull Form – the redesign of ship‘s hulls to capture the power of the wind to generate thrust.

[The Maritime Executive]

10/12/2018

The legal burden of disproving a claim for negligence when cargo is lost or damaged at sea rests with the

carrier of the goods, the UK's highest court has ruled.

The unanimous judgment by the UK Supreme Court "provides authoritative analysis to the global shipping

community on the legal burden of proof for negligence resting with the carrier" under Article III, Rule 2 of

the Hague-Visby Rules, which govern the international carriage of goods by sea, according to shipping law

expert Charlotte Evenden of Pinsent Masons.

The judgment also provides useful assistance on the defences available to carriers for breaches of the Hague

and Hague-Visby Rules, particularly the defence of 'inherent vice'.

"To rely on the inherent vice defence enshrined in Article IV, Rule 2(m) of the Hague-Visby Rules, the

carrier will be required to prove that either it provided the degree of care contracted for within the

charterparty or that even if it had done, that the cargo damage would have arisen in any event," she said.

Volcafe Ltd and five other coffee companies (Volcafe) had appointed Compania Sud Americana de Vapores

SA (Compania) as carrier to transport several containers of green coffee beans from Columbia to Germany.

The bills of lading incorporated the Hague-Visby Rules and were on LCL/FCL ('less than container load/full

container load') terms, which meant that Compania was responsible for preparing and stuffing the containers.

Upon commencement of discharge in Germany, 18 of the containers were found to have suffered

condensation damage.

Coffee beans are 'hygroscopic', which means that they absorb, store and emit moisture. While they may be

carried in either ventilated or unventilated containers, beans carried in unventilated containers will inevitably

emit moisture when transported from a warm to a cooler climate. For this reason, unventilated containers

used to carry coffee beans must be 'dressed' with absorbent material. Stevedores employed by Compania

dressed the containers as was standard practice at the time. However, this did not prevent the damage

sustained during the voyage.

Volcafe brought a claim against Compania, as carrier, either for breach of duty under the common law of

bailment, or breach of Article III, Rule 2 of the Hague-Visby Rules which requires carriers "properly and

carefully to load, handle, stow, carry, keep, care for and discharge" the cargo. They also claimed Compania

had been negligent on a number of grounds, including that it had failed to adequately or sufficiently dress the

containers. Compania pleaded the defence of inherent vice at Article IV, Rule 2(m) of the Hague-Visby

Rules, on the grounds that the coffee beans were unable to withstand ordinary levels of compensation.

In the High Court, judge David Donaldson QC found in favour of Volcafe on the burden of proof question. In

the judge's view, there was a factual presumption that the damage to the cargo was caused by Compania's

negligence, and it was for Compania to rebut that presumption. The judge also made a number of findings of

fact about the paper used and commercial practice to prevent condensation of coffee cargoes during voyage.

The Court of Appeal overturned the High Court's judgment, and inserted its own findings of fact. It found

that, following the 1894 case of 'The Glendarroch', once the carrier had established a 'prima facie' case of

inherent vice, the burden of proving negligence shifted to the cargo companies. The Supreme Court

overturned the Court of Appeal's judgment, and restored the High Court's findings of fact. It held that the

Hague-Visby Rules had to be read against the common law backdrop, meaning that it was for the carrier to

prove the absence of negligence by showing that it took reasonable care of the goods or that any want of

reasonable care did not cause the loss or damage.

Marine insurance: Maersk introduces alternative cargo insurance offering

"The purpose of the [Hague] Rules was to standardise the obligations of the carrier and to limit the exceptions

on which he should be entitled to rely," said Lord Sumption, giving the judgment of the Supreme Court.

"They are accordingly concerned almost exclusively with the standard of performance ... Nothing in the

Hague Rules alters the status of a contract of carriage by sea as a species of bailment for reward on terms."

"For these reasons I consider that in principle where cargo was shipped in apparent good order and condition

but is discharged damaged, the carrier bears the burden of proving that that was not due to its breach of the

obligation in article III.2 [of the Hague Rules] to take reasonable care," he said.

The Supreme Court then considered the interaction between negligence and the inherent vice exemption in

the Hague-Visby Rules. It found that the Glendarroch case, which was decided 30 years before the Hague

Rules were adopted, was no longer good law as far as being the source of a general rule governing the burden

of proof. Lord Sumption further commented that the Glendarroch case dealt with the exception for 'perils of

the sea' in a pre-Hague Rules context, and was not relevant to the exception for inherent vice.

"A cargo does not suffer from inherent vice in the abstract, but only in relation to some assumed standard of

knowledge and diligence on the part of the carrier," he said in his judgment. "Thus the mere fact that coffee

beans are hygroscopic and emit moisture as the ambient temperature falls may constitute inherent vice if the

effects cannot be countered by reasonable care in the provision of the service contracted for, but not if they

can and should be."

Finally, the Supreme Court ruled that the Court of Appeal was not entitled to overturn the trial judge's

findings of fact "simply because [it] would have found them differently". The Supreme Court's restoration of

the factual findings of the judge at first instance serves as a pertinent reminder that the threshold for an

appellate court to interfere with primary findings of fact is high and will not be granted lightly.

The Supreme Court's ruling brings welcome clarification to the interpretation of the Hague- Visby Rules, and

overturns the previously long-standing, yet controversial, case of The Glendarroch," said shipping law expert

Charlotte Evenden. "The basis on which cargo claimants can bring a claim is now clear: they will be able to

rely on proof of damage to the cargo alone as establishing a sustainable cause of action against the carrier,

with the legal burden falling on the carrier to disprove their negligence."

[Out-Law.com]

10/12/2018

By Sam Chambers

Maersk is expanding its commercial offering, introducing Value Protect, an extended liability solution. It

offers customers an alternative to cargo insurance, which the Danish carrier claims increases shippers‘

chances of receiving full compensation in case of cargo damage in transit.

Valid while the cargo is in the care and custody of Maersk, Value Protect covers cargo loss or damage in

cases such as fire, accidents due to danger of the sea, theft, natural disasters, cyber incidents, cargo damages

caused by delay and contributions in General Average all of which would be excluded under the

conventional terms for carriage.

―We are very pleased to introduce this new solution to our customers. We take care of every container we

transport. Yet, some events might be outside of our control, such as extreme weather or perils of the sea that

may result in cargo loss or damage,‖ said Klaus Rud Sejling, head of logistics and services at Maersk.

―International conventions limit carriers‘ liability and set potential pay-out limits. By purchasing Value

Protect our customers will have peace of mind, so that even if an unpredictable event should happen, they can

rest assured knowing their business is protected,‖ Sejling continued.

Thousands of containers onboard the Maersk Honam were incinerated when a fierce fire broke out on the

15,000 teu ship earlier this year, sparking a very significant swathe of insurance claims. Marine cargo

insurance protects cargo owners from the known risk of transports; however, according to Maersk data

roughly 30% of the cargo that moves on the ocean is uninsured.

Value Protect is already available in several countries across the globe and will be gradually rolled out

worldwide over the coming six months.

[Splash 24/]

PROFESSIONAL MEMBERSHIP

Advance your career by gaining Professional Recognition.Professional recognition is a visible mark of

quality, competence and commitment, and can give you a significant advantage in today‘s competitive

environment.

All who have the relevant qualifications and the required level of experience can apply for Professional

Membership of IAMSP.

The organization offers independent validation and integrity. Each grade of membership reflects an

individual‘s professional training, experience and qualifications. You can apply for Student Membership as

per following :

Fellow (FIAMSP)

To be elected as a fellow, the candidate must satisfy the council that he/she:

Has held for at least eight (8) years consecutively a high position of responsibility in shipping or related

business.

Has distinguished himself/herself in shipping practice.

Is a principal in a firm or a director of a company in the business or profession.

Members in this grade are entitle to use the initials FIAMSP After their names.

Full Member (MIAMSP)

Individuals holding an internationally recognised marine qualification, or who can prove that they have

practiced on a full time basis for a minimum of five (5) years as a consultant or marine surveyor.

Individuals who, by producing written reports can demonstrate that they have practiced marine surveying or

consultancy for at least five (5) years.

Individuals whose qualifications or experience shall be considered appropriate by the Professional

Assessment Committee.

Members may use the initials FMIAMSP after their names.

Associate Member (AMIAMSP)

Associate Membership shall be open to any person, partnership, company, firm or other corporate that does

not own a Ship but is engaged in ship operating or ship management. Associate Members can nominate one

(1) person to represent them in the Association. Associate Members are entitled to attend General Meetings

and to participate in discussion at such meetings but shall not vote or stand for election to the Board of

Directors.

Technician (TechIAMSP)

Individuals holding a recognised qualification, for example Inspector level 2 or higher (NACE, FROSIO,

ICorr), RMCI and IRMII, NDT Technicians (CSWIP), for example gauging personnel, divers or other

surveyors with at least three years full time practical experience in a marine related field. Technician

Members may use the designation TIAMSP after their names.

Affiliate (AFFIAMSP)

Graduates who do not meet the criteria for Full or Associate Membership and are continuing to train and gain

experience prior to applying for Associate Membership

Student (SIAMSP)

Individuals who are enrolled in training programs related to the maritime or shipping will be appointed as

student members of the Association for the duration of their course.

LAST MEMBERSHIP

Fellow (FIAMSP)

M. Kirton Christopher M. Hubert Louis-philippe Mrs. HELENA ISABEL UPCOMING EVENTS SUMMARY

Portugal

CAMPOS LANÇA PALMA

France Singapore

Mr.Adolfo omar Cortes

Spain

Mr. Rajendran Sellamuthu

India

Mr. Archisman Lahiri

India

Full Member (MIAMSP)

Mr. MARTINS Jorge

Brazil

Mr.Andrianombana Lanja Achille

Madagascar

M. Subbiah Thiyagarajah

Malaysia

Affiliate (AFFIAMSP)

February 2019

GREENTECH IN SHIPPING GLOBAL FORUM 27

Hamburg, Germany

February 2019

MARITIME RECONNAISSANCE & SURVEILLANCE TECHNOLOGY 07

Rome, Italy

February 2019 12TH ARCTIC SHIPPING SUMMIT – MONTREAL

21

Montreal - venue TBC

February 2019

GREENTECH IN SHIPPING GLOBAL FORUM 27

Hamburg, Germany

April 2019 LNG2019

05

Shanghai World Expo Exhibition and Convention (SWEECC), Shanghai

April 2019 OCEAN BUSINESS 2019

11

Southampton UK.

April 2019

SINGAPORE MARITIME WEEK (SMW) 2019 12

Singapore, Singapore

April 2019 COPENHAGEN SHIPPING SUMMIT

21

The Øksne Hall Halmtorvet 11 Copenhagen, 1700 Danmark