Seacurus Daily: Top Ten Maritime News Stories 16/11/2018
1. Shame and Influence at IMO
The UK, the Cook Islands, Marshall Islands, Panama, United Arab Emirates and the United States stand accused of holding back reforms at the IMO. The NGO Transparency International report states these registries signed and submitted an official document to the IMO last month warning that “further expansion of access to information” about the agency “could lead to outside influence”. Transparency International is urging the IMO Council to give a new working group reforming governance at the UN shipping agency a remit that allows it to effectively increase public scrutiny and civil society participation.
2. Tankers Consolidating
Crude tanker rates are predicted to consolidate by brokers Simpson Spence Young (SSY) on the back of the surprise decision by the US to show some leniency in its recently imposed sanctions on Iran. Just as US economic sanctions on Iran were coming into effect on November 5, the US government announced it was granting oil purchasing waivers to eight countries. This decision meant that China, India, South Korea, Japan, Taiwan, Turkey, Italy and Greece, who together account for around 75% of Iran’s oil exports, could continue to buy Iranian oil, albeit at reduced levels, for the next 180 days – until May 4, 2019.
3. Speculate to Accumulate
Two thirds of the LNG orders placed this year have been speculative, according to Norwegian owner Awilco LNG, in a sign of the changing scene in the historically conservative sector. A total of 42 newbuilding orders have been placed year to date of which about 27 are assumed speculative, Awilco LNG stated in its latest quarterly report. Historically the LNG sector had a very small spot market, with the hugely expensive newbuilds tending to be ordered with long term contracts already secured. However, with the entrance of many new players in recent years the ratio of long term versus spot has changed considerably in the LNG trades.
4. Slow and Low
Shipping organisations have failed to deal with politicians and let regulators do things that are not always fit for purpose. We have known this sulphur cap was coming for years. Shipping bodies should have advised IMO to get the oil refineries onboard much earlier. The industry has failed to live up to the expectations of the political environment. Why not embrace the new sentiments and do something positive about it instead of resisting and procrastinating. Scrubbers are a cheat and it is a travesty, as low sulphur fuel and slow speeding will win the day. Here ends the lesson!
5. Conclusions and Criminalisation
It hasn’t been easy, even among professionals, to have too much sympathy for Francesco Schettino, formerly master of the Costa Concordia, currently serving a 16 year prison sentence. The universal shock when this ship came to grief in 2012 with the loss of 33 lives still resounds, as it demonstrated the vulnerability of even the most modern cruise ships. Has his account of the sequence of events ever been clinically and professionally examined? There remain serious doubts about the fairness of the Italian judicial processes that convicted the master, without any meaningful recourse to professional advice.
6. New Liner Association
A.P. Moller – Maersk, CMA CGM, Hapag-Lloyd, MSC and Ocean Network Express plan to establish a container shipping association, which they say in a release today is to pave the way for digitalisation, standardisation and interoperability in the container shipping industry. IT executives from the companies – among the largest liners in the world – are currently discussing the creation of common information technology standards which shall be openly available and free of charge for all stakeholders of the wider container shipping industry. The as yet unnamed assocation will start in early 2019.
7. BREXIT Heads to Cliff
British Prime Minister Theresa May has released a hard won draft treaty on the Brexit transition, the product of years of painstaking negotiations with Brussels. It has drawn criticism from the opposition and from May’s own party, and appears unlikely to win approval in Parliament. If it should, however, it would keep the UK within the EU customs union until January 2021, and potentially longer; provide arrangements for UK and EU citizens to travel freely between Britain and the continent; bring an end to UK financial institutions’ easy access to EU markets; and end the European Court of Justice’s jurisdiction in the UK.
8. Baltic Exchange Surge
The Baltic Exchange’s main sea freight index, tracking rates for ships transporting dry bulk commodities, snapped its 12-day losing streak on Thursday, powered by a rise in demand for capesize vessels. The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, gained 11 points or 1.1 percent – after falling 12 sessions in a row – to 1,020 points. The capesize index marked its first gain in 12 days, rising 7.1 percent, or 67 points, to 1,007 points. Average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes such as iron ore and coal, increased $471 to $8,458.
9. SatComms Cyber Solutions
Inmarsat has introduced two new components to its maritime cyber security service, Fleet Secure, as it continues to develop solutions that combat ever-increasing cyber threats faced by ship owners and ship managers. Vessel operators will benefit from a powerful, multi-layered endpoint security solution, Fleet Secure Endpoint, which is based on industry leading technology from ESET, a world leader in digital security, and powered by Port-IT and protects desktop computers and other systems connected to a vessel’s network.
10. Maersk Share Bonus
Shareholders in the world’s biggest container-shipping company may get up to $8 billion in payouts next year, according to Goldman Sachs. That’s great news for equity investors in A.P. Moller-Maersk A/S, but it raises a number of questions for the Danish company’s creditors. According to Danske Bank, big shareholder rewards will push Maersk’s credit rating closer to junk. And going forward, the company will have a hard time making enough money to protect its BBB rating because trade conflicts between the U.S. and China will pressure the transport industry, according to Brian Borsting, a Danske credit analyst.
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