Seacurus Daily: Top Ten Maritime News Stories 10/11/2015
1. Maersk Expects Consolidation Trend
Maersk Line expects consolidation in the industry to speed up as freight rates fall due to too many vessels for too few goods, Chief Executive Soren Skou from Maersk Line said on Monday. "I expect a number of deals," Skou told Reuters in an interview. Singapore-based Neptune Orient Lines said on Saturday it is in preliminary discussions with France’s CMA CGM and A.P. Moller-Maersk, which controls Maersk Line, about a potential acquisition of NOL. Skou declined to comment but said Maersk Line would focus on organic growth while looking at opportunities to buy as they arose.
2. Big Profits Slide
Maersk Line’s third quarter 2015 (Q3) result was USD 264 million which is 61.4% lower than Q3 2014 (USD 685 million) as consequence of low freight rates, the company said. Revenue for the third quarter 2015 (Q3) was USD 6,018 million which is 14.9% lower than Q3 2014 (USD 7,074 million). Volumes were 1.1% higher to 2,427,000 FFE (2,401k FFE in Q3 2014). The Return On Invested Capital (ROIC) was 5.2%, down from 13.5% in Q3 2014. The result is below our ROIC target of 8.5-12%. The company says, “Our third quarter result is clearly less than satisfactory…driven by much weaker than expected demand and low rates".
3. Port Discount for Eco Ships
The Port of Rotterdam has announced that its discount programme for "clean ships", known as the Enivornmental Ship Index (ESI), will be renewed. "Ships which score 31 points on the index receive a 10 percent discount on the ship section of the port tariff. This discount is doubled if ships have relatively low nitrogen emissions," explained the Port of Rotterdam. "This means that a ship must score at least 31 points on the NOx emission section of the ESI." Overall, the port has increased tariffs for ocean-going vessels visiting Rotterdam by 0.5 percent for next year, a figure it says is equal to half of the inflation rate over the past year.
4. Assessment for New Canal
The Government of Nicaragua has approved the Environmental and Social Impact Assessment (ESIA) for the Nicaragua Interoceanic Grand Canal Project. The government signed an agreement with Chinese firm Hong Kong Nicaragua Canal Development Investment (HKND Group) to build a shipping channel across Nicaragua that would act as an alternative to Panama Canal. The ESIA was submitted to the Government of Nicaragua in May this year. Valued at $50bn, the proposed project aims to beat the Panama Canal in both size and capacity and would be built by the Nicaraguan Government, along with Chinese investors.
5. Market Rise for Tankers
The market for hedging oil tanker freight has revived sharply this year to a value of $4.5 billion after years of torpor, with ship owners looking to profit from a freight rally and more energy companies scramble to cover risk, industry sources say. Cheap oil bargain hunters after the price drop and refineries, which have been operating at unusually high levels to meet rising demand, have helped tanker markets experience their best earnings in years after a long period of losses. Rates for crude supertankers have soared in recent weeks to over $100,000 a day – their highest since 2008.
6. Pirate Victims Heading Home
Somali Government has formally handed over 4 Iranian fishermen who were rescued last week from pirate gangs to Iranian embassy in Mogadishu on Saturday night. Somalia’s internal security minister Abdirisack Omar Mohamed said that the country’s Galmudug state army freed the four Iranian fishermen from Somali pirates after an operation in Adado town. The minister stated that the troops are pursuing the pirates who still held nine other hostages, all believed to be from Iran. However, It was not immediately clear when the freed crew were seized by the Somali pirates, or which vessel they came from.
7. Fire Breaks Out On Ship
A fire broke out on Sunday, November 8th aboard a Belize-flagged general cargo ship identified as Soya Maru while sailing some 2 nautical miles west off Matsuyama, Japan. The Japanese Coast Guard dispatched at least three firefighting vessels to the scene to help extinguish the fire that had broken out in the ship’s engine room before it spread, engulfing the entire vessel. The ship’s crew of ten members of Chinese and Bangladeshi nationality abandoned the vessel in time and are reported to be safe, according to the local media. The 1989-built Soya Maru of 3000 DWT was carrying a cargo of scrap from Osaka to Haimen port in China.
8. Open Secret of Seafarer Abuse
According to a New York Times feature, sometimes even open secrets are worth exploring. Many sources mentioned so-called "manning agencies" that trick seafarers into working on the world’s ships. Stories about these scams — how they work, whom they target and with what consequence — piqued the reporters interest. The interviewed men who through manning agencies, had been duped and sent to sea, only to return penniless and often indebted from having paid broker fees to get the job. They looked at fake forms that recruiters use to trick men into paying fees for jobs that did not exist. A very depressing but interesting read. http://goo.gl/nOsSJs
9. Tackling Rogue Bunker Traders
As bunker fuel is often the largest contributor to the operational costs of a ship, it is critical that the fuel purchaser ensures the correct amount of fuel is received, or has sufficient information to substantiate their claim in the event of any dispute. As bunkering operations often take place some distance from the fuel purchaser’s office, it is in their interest to engage a surveyor to verify the quantity delivered and oversee fuel sampling for laboratory analysis. This case study shows how costly it can be for a bunker buyer who does not use an impartial and independent bunker quantity surveyor, the "Cappuccino Bunker Case Study".
10. Good Bye to a Good Shipping Man
CP Ships’ Ray Miles has died after a brief illness, he was 71. Ray, during his 43-year international transport career helped steer the course of container shipping as it evolved through its second generation, At the time of his death, he was serving as advising director at Stena AB. Mr Miles began his career in 1972 with Ocean Transport & Trading in Liverpool. In the early 1980s he was named executive vice president of Barber Blue Sea, OTT’s ro-ro shipping joint venture with Wilh Wilhelmsen of Norway and Brostroms of Sweden. In 1985 he led the ‘grey-box’ concept to improve equipment utilisation through pooling.
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