Seacurus Daily: Top Ten News Stories 09/10/2018
1. Firm Passing On Costs
German container shipping giant Hapag-Lloyd said on Monday it is preparing customers for a mechanism to charge more for cleaner fuel starting next year to comply with tighter environmental rules. The Hamburg-based firm said on Monday that it has developed what it will call a marine fuel recovery mechanism (MFR), which it will gradually introduce from Jan. 1, 2019. This will entail an automatic addition of charges to cope with costlier clean fuel into 2020.
2. Hard Truth for Ports
Globally there are far too many ports competing for the same clients and not earning enough revenue to cover the infrastructure demands of ever-larger ships. This excess in port capacity has caused cargo handling rates to be flat or even decline. Too much carrier capacity in the face of demand that is growing less than supply has had the obvious effect of reduced revenue and negative return on investment when ports are in competition for the same client base.
3. India Sucks Up Iranian Oil
India will buy 9 million barrels of Iranian oil in November, two industry sources said, indicating the world’s third-biggest oil importer will continue purchasing crude from the Islamic republic despite U.S. sanctions coming into force on Nov. 4. “Refiners have placed November nominations to lift 1.25 million tonnes (about 9 million barrels) of oil from Iran,” one of the sources said. Indian Oil companies will lift 9 million barrels of Iranian oil.
4. US Blocking WTO
The United States is likely to succeed in shutting down the World Trade Organization’s supreme court because other WTO members are powerless to stop it, diplomats, lawyers and officials said at a conference in Geneva. The US has blocked appointments of judges to the Appellate Body, throwing the WTO into crisis as it runs out of legal muscle to rule on international trade disputes.
5. VLCC Joy Doesn’t Translate
This week’s big news, from a shipping market’s standpoint, was the spike of the VLCC tanker market. Shipbroker Gibson noted in its latest weekly report that “the highlight of this week’s trading has been an impressive spike in spot VLCC rates, with daily TCE earnings up to their highest level since April last year. However, these emerging signs of positivity are not really reflected in the product tanker market.
6. Investors Liking Scrubbers
The IMO 2020 clock is ticking – as 1 January 2020 looms closer, now little more than one year away, interest in scrubbers seems to have surged. Most notably, a number of public companies have joined the scrubber fray, leading financial analysts, rather than purely technical types, to look closely at their economics. Two large listed entities, Scorpio Bulk (SALT) and Scorpio Tankers (STNG) have announced their decision to install “hybrid ready” scrubbers.
7. Gas Buyout Evaporates
Andreas Sohmen-Pao’s BW LPG has dropped its pursuit of rival Dorian LPG due its “continued refusal to give a meaningful response”. BW LPG announced on Monday it was withdrawing its all share takeover offer for Dorian LPG, which had been rebuffed by Dorian’s board who had refused to put it to shareholders. BW LPG also withdrew its candidates for Dorian’s board of directors.
8. All Change At International Group
Nick Shaw, formerly global industry group leader with law firm Reed Smith, has been appointed new ceo of the International Group of P&I Clubs, to succeed Andrew Bardot who is due to retire next July. He will join the team at the London-based Group secretariat in April 2019, working alongside Bardot during a three-month handover period. Paul Jennings, ceo of the North of England P&I Club, is due to become new IG chairman in November.
9. Michael Blowing In
The National Hurricane Center has announced a Hurricane Warning is in effect for the Cuban province of Pinar del Rio. A Hurricane Watch is also in effect for the Alabama-Florida border to Suwannee River Florida. A Tropical Storm Watch is in effect for Suwannee River to Anna Maria Island Florida, including Tampa Bay and for the Alabama-Florida border to the Mississippi-Alabama border.
10. Filipino Crew Abandoned
21 Filipino crew members of MV Evangelia M, a Liberian-flagged bulk carrier, have been left stranded in Kakinada Port, India after their employer abandoned them three months ago. “The crew has been stuck on board the vessel since it was abandoned by its Greek owners in June. The seafarers requested the assistance of the DFA in facilitating their immediate repatriation and in collecting their salaries,” the Department of Foreign Affairs (DFA) of the Philippines said.
Daily news feed from Seacurus Ltd – providers of MLC crew insurance solutions www.seacurus.com