24 April 2016

Aiming for a greener blue

Frank Allen, head of Blue Ocean Environmental, said he wants to test his company’s environmentally friendly ship-dismantling techniques on the Cap’n Oscar, a 69-foot steel fishing boat abandoned at the Port of Astoria. The vessel is stored in a hangar at North Tongue Point after sinking multiple times.

Blue Ocean Environmental, the quest by locally connected environmentalist, entrepreneur and fishmonger Frank Allen to clean the world’s oceans, went online last weekend.

Allen launched the website — blueoceanenviro.com — to help call attention to ocean debris and abandoned vessels, starting with the fishing boat Cap’n Oscar at the Port of Astoria.

“Awareness is the issue,” said Allen, who is energetic, and at times frenetic, in his passion for oceans and rivers. “We have to let people know what’s going on.

“Since day one of mankind, we have used the oceans as a waste site.”

Allen is mostly known for Live Online Seafood, a company he created a decade ago, recycling fish heads, collars and other scraps not used by processors in Alaska, and shipping them to Asia for use in other foods.

Frank Allen, head of Blue Ocean Environmental, said he wants to create large ship-dismantling operations like the ones he has visited in China.

Starting locally

Along with Blue Ocean Environmental’s website, Allen has created a GoFundMe page seeking $70,000 to recycle the Cap’n Oscar. Allen sees the abandoned 69-foot fishing boat as a pilot in his plan to clean the region’s — and eventually, the world’s — waterways of derelict vessels.

Allen came to the Port about three years ago, proposing an environmentally safe way of dismantling boats and ships at North Tongue Point and shipping metals to steel mills in Oregon and Washington state. The practice is usually associated with “shipbreaking,” a term used to describe the large-scale, haphazard dismantling of vessels in places like Alang, India, and Galveston, Texas.

Allen wanted to prove the environmental safety of his methods using the Cap’n Oscar, with hopes of developing Tongue Point into a larger ship-dismantling and training center that could be recreated around the country.

But his proposal never came to fruition, and the Cap’n Oscar sank multiple times before the Port had the boat taken out of the water and stored in one of the hangars at North Tongue Point.

“It’s the best site in the world to do this project, period,” Allen said. “And Clatsop County needs the work. And that can be our flagship site.”

Allen said any extra from the Cap’n Oscar cleanup fundraiser would go into more public exposure, courting investors to help with ship-dismantling and a separate GoFundMe page he created seeking $50,000 to survey the rocket debris from the Falcon 9, a reusable rocket that crashed off the California coast while attempting to land on a barge at sea. The rocket was built by Space Exploration Technologies Corp., a company founded by Tesla Motors CEO Elon Musk developing rocket technology to reduce space travel costs.

“I like Elon Musk’s innovation, but he has to clean up his rockets, they have very harmful materials,” Allen said. “We gotta stop trashing the oceans.”

A derelict vessel sits in the Columbia River off Washington. In 2011, Washington and Oregon created the Columbia River Derelict Vessel Task Force, which identified 40 vessels of concern, many of them more than 100 feet long and with unknown levels of pollution.

Going regional

Allen’s efforts to clean up the Cap’n Oscar come as the state Marine Board has applied to the National Oceanic and Atmospheric Administration’s Marine Debris Program for money to clean up the commercial fishing vessel Western, which sank near a public dock in Coos Bay.

“The hard lesson the Cap’n Oscar taught us was that it is much better to invest in disposition of a derelict vessel while there is opportunity to do so,” read a letter of support for the state’s application written by Matt McGrath, the Port’s operations manager. “Waiting for a vessel to founder only serves to exponentially increase costs, environmental damages and public distrust.”

Meg Gardner, the environmental programs coordinator for the state Marine Board, said the state’s application specifically seeks to clean up the Western, but would also help form the Abandoned and Derelict Commercial Vessel Task Force specific to the Oregon Coast.

Gardner said Oregon’s abandoned and derelict boat removal fund pales in comparison to Washington’s.

While the cost of removing a recreational boat can run about $2,500, Gardner said, the cost for a commercial boat can reach $20,000. And while both states have a fairly robust program for removing derelict recreational boats, “there’s really no good resource to remove vessels of (a large) size when they’re rotting and not in good condition anymore,” she said.

Submitted Photo
Frank Allen, head of Blue Ocean Environmental, stands next to the crank shaft from a vessel being dismantled at a shipyard in China. Allen wants to create similar ship-dismantling yards around the U.S., starting with North Tongue Point at the Port of Astoria.

Hundreds of vessels

After Oregon and Washington spent more than $22 million cleaning up the sunken vessel Davy Crockett near Vancouver, Washington, in 2011, the states created the Columbia River Derelict Vessel Task Force, which identified 40 vessels of concern, many of them more than 100 feet long and with unknown levels of pollution.

A derelict vessel task force in Washington estimated more than 200 abandoned vessels in the state. Allen estimates about 300 in Oregon.

“To take care of all the derelict vessels in Oregon would be $30 million,” Allen said. “They spent that on the Davy Crockett.”

After taking care of abandoned vessels, Allen said a cradle-to-grave process should be created for each active ship to account for the eventual cost of disposal.

“If you do this right, and put green recycling shipyards around the world, you’ll create millions of sustainable jobs,” Allen said.

Source: daily astorian. 31 March 2016

Ship manager adds lay-up and recycling services

MARCH 31, 2016 — Bernhard Schulte Shipmanagement (BSM) is expanding its ship management services by now offering – Lay-up and Green Recycling services.

Both services have been developed to meet changing needs in the tough economic environment the shipping industry is facing.

BSM's Lay-up Services have been designed to support customers where continued operation of the vessel is deemed uneconomical. BSM will advise the owner of the best options for lay-up and the appropriate procedures that need to be followed for different types of lay-up, whether warm or cold.

From its nine Ship Management Centers around the world, BSM will manage the lay-up process, performing duties such as location selection, declaration for shareholders, ship inspections and on-board watches.With both warm or cold lay-up options, the objective is to ensure that the vessel remains secure and well preserved during the idle period whilst reducing ship owners' costs.

BSM's Green Recycling service supports customers with the responsible demolition of their assets. Fully complying with the IMO's Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009, the service will be provided by BSM's project focused business, Schulte Marine Concept.

BSM can carry out recycling management and supervision in any shipyard with the correct and compliant resources for dismantling a vessel. During the process, Schulte Marine Concept's class-approved experts will also share their expertise by performing an audit of the ship yard and ensuring that a safe working environment is maintained throughout.

Source: marine log. 31 March 2016

Forces TV A deal to sell HMS Illustrious to the Government of Gibraltar has fallen through.

Deal To Sell HMS Illustrious To Gibraltar Falters

  • A deal to sell HMS Illustrious to the Government of Gibraltar has fallen through.
  • The British Overseas Territory wanted to buy the aircraft carrier and turn it into a 'maritime attraction'.
  • A spokesman for the Gibraltar Government told Forces TV.


"HM Government of Gibraltar gave serious consideration to the idea of bringing ex-HMS Illustrious to Gibraltar but, sadly, the costs of maintaining the ship proved to be prohibitive."

HMS Illustrious has been alongside at HMNB Portsmouth since being decommissioned in August 2014.

The 22,000 tonne aircraft carrier was rushed into service three months ahead of schedule in 1982 for the Falklands War. It also served in the Gulf, the Bosnian War, and aided the Philippines after Typhoon Hayain.

One of the former commanders of the ship known as 'Lusty' said he would rather see her scrapped than rusting in port. Vice Admiral Bob Cooling told the Portsmouth News.

"Unless Lusty’s future is adequately funded to preserve her appearance and dignity as the UK’s longest-ever serving aircraft carrier then it would be better that she is scrapped rather than risk her becoming a national embarrassment."

The two other Invincible-class carriers HMS Ark Royal and HMS Invincible have already been scrapped.

An MoD spokesman told the Portsmouth News that a plan that could see the ship continue its life at sea was under consideration but did not offer more details. They also added that the Disposal Services Authority was not talking to ship recycling companies.

Source: forces tv. 11 April 2016

Dry bulk demolition jumps in 2016 Q1 but scrapping age is key: sources

The crumbling dry bulk market witnessed a demolition spree in the first quarter, but returns for shipowners are still barely able cover operational costs, market sources said this week.

While increasing the demolition rate is key to stemming the collapse in freight rates, dry bulk market watchers say the torching of slightly younger vessels along with the scrapping of older ships would have a greater impact.

The scrapping in Q1 was in the range of 12.5 million-14.5 million dwt after 145 to 180 vessels were torched; this was up 42-57% year on year on volume and up 15-23% based on the number of vessels, according to estimates Platts received from various market participants tracking the demolition.

Notably, only six vessels that were built in 2001 or later, which are considered to be relatively younger vessels, have been scrapped so far including four Capesizes and two Panamaxes, according to Eva Tzima, Intermodal Shipbrokers's head of research and valuations.

"As a charterer today, you can clearly cherry pick your vessel. So you're more likely to go for the younger ship, but that's not a legal requirement," said a research analyst with a shipbroking firm, adding that about 7% of the fleet is currently over 20 years old and it was normal for older vessels to be scrapped first.

Usually, the demolition age is dictated by market sentiment and conditions.

Past trends have indicated that the demolition age tends to get lowered when freight rates are abysmally low, like in 2013 when the average scrapping age was close to 23 years. In 2014, when the market partly recovered, the average age was around 24.5 years, according to a Baltic and International Maritime Council, or Bimco, report.

"Scrapping is the most immediate way to reduce the number of ships in the water. However in order for it to be meaningful, it needs to be a significant number of ships demolished. Its important to keep in mind that in 2016 we are expecting approximately 54 million dwt [35% slippage included] to be delivered," said Konstantinos Papazoglou at Bancosta Research. CAPESIZE, PANAMAX VESSELS GETTING THE AXE

Among the various dry bulk segments, the Panamax and Capesizes vessels were the main candidates for scrapping. More than 50 Panamax vessels adding up to about 4 million dwt and close to 50 Capesizes totaling 8 million dwt were scrapped during the first three months of 2016.

In the smaller segments, demolition has yet to gather pace, with only around 55 Supramax and Handysize vessels, totalling 2 million dwt, being scrapped over the same period.

While scrapping activity increased in Q1, expected deliveries of newbuild vessels during 2016 would still result in a net fleet growth, sources estimated.

"I expect the rate of demolition in the bigger sizes, especially in the Capesize segment, to continue at the same pace at least for the next and probably the third quarter of the year as well. The firming in demo prices that we have been witnessing in past months should also support this trend. In the geared sizes I expect the rate to gradually slow as earnings have been recovering much faster," Tzima said.

"Scrapping is a step in the right direction and coupled with minimal ordering should help, but it needs to be sustained," said Papazoglou, adding the net fleet growth for 2016 was seen at 3%, after accounting for a 35% fall in new deliveries.

Tzima estimated Capesize vessels will have a negative fleet growth of 2% by end 2016, while the Handysize, Supramax and Panamax segments were estimated to grow 3.2-3.7% over the same period.

--Shriram Sivaramakrishnan, shriram.krishnan@platts.com
--Edited by Wendy Wells, wendy.wells@platts.com

Source: platts. 8 April 2016

Baltic Dry Index Ends Two Month Rally

The Baltic Dry Index (BDI) ended its impressive two-month run on Wednesday, with the index declining two points to 669 after gaining in value every session since Feb. 10th, when it touched a historic low of 290 points.

cargo ship baltic dry index

The index has recovered nicely, it peaked at 671 points – a five-month high, but is still very depressed. The BDI peaked at above 11,000 points in 2008. While the hire rates for all the component ships that make up the BDI have seen recent strength, demand and rates for capesize ships have been the most robust. Capesize ships transport primarily iron ore and coal and they have benefitted from strength in China’s steel sector.

China’s steel sector has staged an impressive performance this year, with steel prices climbing over 40% in the first months of the year as China increased its steel operations as the country picked up infrastructure development. This fundamental change is welcome after a few years of weak property development in the nation, which contributed to the decline in BDI activity.

The pick up in steel prices has meant the ramp up of previously mothballed operations, and has resulted in increased demand for iron ore, which has buoyed the BDI. Demand for other component ships has also improved, with soft commodities transport picking up as we enter harvest season for many of the world’s major cash crops. Seasonality could contribute to increased demand through the end of May.

Demand for capesize ships fell on Wednesday and this contributed to the BDI’s overall decline.

Rates on Brazil-China and Western Australia-China runs saw the biggest falls, Atlantic and Pacific basins.

Although BDI prices are picking up, the recovery has not been enough to really impact the bottom lines of shipping companies and we may still continue to see some scrapping of ships, which would support more upside. An oversupply of ships was a major factor that drove prices lower, as a large amount of ships were built in the last economic expansion cycle and due to the time it takes to bring a ship into service they entered the market as the economy collapsed. The supply side of the market needs some major balancing; and recently there has been an increase in ship scrapping with 943 ships scrapped in the first quarter of 2016.

Source: economiccalendar.com. 20 April 2016

Worker dies at Chittagong shipbreaking yard

A worker died and another fell ill inhaling toxic gas while cleaning oil from a scrap ship at a shipbreaking yard in Sitakunda on Friday afternoon.

The deceased is Biplob Haldar, 27, son of Bijon Haldar of Pirojpur, and the injured is Md Jashim, 25. They were cleaning oil from the ship's tank at Premium Trade Corporation owned by Nurun Nabi Manik at Baraowlia of Sitakunda.

Sanjay Haldar, Biplob's maternal uncle who also works at the yard, said he heard Biplob and Jashim were injured inhaling toxic gas when they lifted the lid of a tank aboard MV Elite around 3:00pm.

They were taken to three private hospitals in the port city but were refused treatment there, Sanjay added.

Later, the management of the yard sent the duo to Chittagong Medical College Hospital. They were taken to CMCH around 8:00pm, almost five hours after the incident.

Biplob was pronounced dead on arrival, while Jashim was admitted to the hospital.

The postmortem on the body was done on Saturday afternoon, a day after the incident.

Sanjay claimed his nephew was not wearing any protective gear and the shipbreaking yard authorities only provided transport cost for the body.

Abdul Hye Khan, deputy inspector general of Department of Inspection for Factories and Establishment (DIFE), said a team from the department visited the site after the accident.

Asked if the yard secured proper certificates for dismantling the ship, he said, “The yard authorities said they would submit the necessary certificates to us in the afternoon today (Sunday).”

Shipbreaking requires two certificates from the Department of Explosives. One is needed when a ship comes at the outer anchorage and the other after beaching the ship in the yard.

Officials from the explosives department visit the ship and provide the certificates after examining if explosives and toxic gas have completely been removed, he said.

Yard owner Nurun Nabi could not be contacted over the phone. A person identifying himself as his personal secretary told this correspondent that Nabi was busy in a meeting.

Officer-in-Charge of Sitakunda police Iftekhar Hossain said an unnatural death case was filed on Friday evening.

Source: the daily star. 18 April 2016

Why commemorate Earth Day?

The 46th Earth Day was commemorated around the world on Friday, April 22. The mission of the Earth Day Network is to broaden and diversify the environmental movement worldwide, and to mobilize it as the most effective vehicle to build a healthy, sustainable environment, address climate change, and protect the Earth for future generations.

Unfortunately, the state government is notorious for failing to protect Goa's environment and the interests of citizens. In fact, the government and its environment minister are infamous for their anti-environmental measures and for openly catering to the interests of all found guilty of destroying our environment. Shame on them for abetting the destruction of Goa's ecology and environment. From Cavrem to Corlim to Cansaulim, we Goans are in shock and despair. What a sad way to be commemorating Earth Day!

The shocking case of a starred resort and a ship-breaking company abdicating all responsibility regarding a pontoon that ran aground off Arossim beach recently, stands testimony. From reports published in TOI, it appears that helpless villagers and concerned citizens have been left to their own resources to address this coastal environmental disaster in the making. The culprits responsible for this are getting away scot-free, including the ones who gave the permissions.

Goans have to suffer yet another environmental disaster. It is unacceptable that the taxpayer is being made to pay to remedy the situation. The ship-breaking company, the management of the starred resort, and those who gave illegal permissions are responsible for the damage caused to the beach. They should be held accountable for this destruction and be made to pay to restore the beach to its pristine nature.

The government of Goa has, so far, done nothing to book those guilty and no action is being taken for reasons best known to it.

Source: 24 April 2016.

18 April 2016

European Union sets a global standard for sustainable ship recycling: NGOs call on shipping companies to use EU approved yards:



Brussels, 12 April 2016 - Today, the European Commission (EC) publishes technical guidance for ship recycling facilities that want to be approved under the EU Ship Recycling Regulation. The European Union (EU) mirrors with this step the call by environmental and human rights NGOs for a relocation of ship recycling to platforms that can ensure sustainable practices. Facilities that intend to be listed as EU-approved will need to ensure safe working conditions, pollution control including proper downstream waste management and enforcement of international labour rights.

“Recycling yards that want to make it on the EU list of approved facilities need to meet high environmental and safety standards. The EC is clear in its message: an unprotected beach is never going to be an appropriate place for a high-risk heavy industry involving hazardous waste management”, said Ingvild Jenssen, Policy Director of the NGO Shipbreaking Platform.

According to the EU, ship recycling is an industrial activity that needs industrial methods, equipment and standards. Workers and the environment anywhere in the world have the same right to protection under the EU Regulation. Attempts by some Member States with strong shipping interests to water down the requirements of the Regulation, more specifically, to accept low-cost beaching facilities in South Asia as environmentally friendly and safe for workers in order to make it on the list, have not been successful.

The EU list of approved ship recycling facilities [1] will become a global reference point for sustainable ship recycling. It rewards the companies that already have or are willing to invest in the necessary infrastructure and the employment of fully trained workers to ensure safe and environmentally sound recycling practices. The yards responsible shipping companies such as Hapag Lloyd, Wilhelmsen, Grieg and Royal Dutch Boskalis work with in Europe, China and Turkey will most likely feature on the EU list after having provided evidence that they comply with the requirements and in some cases also having improved their practices in order to meet the European standard. By promising to clearly distinguishing good from bad practices [2], the EU list has also already prompted the establishment of new facilities that see opportunities for an increased market share.

For ship owners, the EU list will be the only guarantee that their end-of-life vessels are not causing harm to workers and the environment. Backed by ‘independent verifiers with qualifications’ and audits by the EC or agents acting on its behalf, a further important warranty lays in the right NGOs have to submit complaints and concerns to the EC regarding the functioning of a facility and with that prompt an on-site visit to establish whether the facility should be removed from the list.

“While only vessels sailing under an EU flag will be legally obliged to use an EU approved facility, any shipping company around the world with a responsible policy can use the EU listed facilities to prove their effort”, said Jenssen.



CONTACT

Ingvild Jenssen
Policy Director
NGO Shipbreaking Platform
ingvild@shipbreakingplatform.org
+32 2 6094 420


NOTES

[1] The EU list of approved ship recycling facilities is expected to be published by the end of 2016. Applications from facilities that want to feature on the first batch of the list need to be sent to the EC by 1 July 2016.


[2] Unlike the industry driven International Maritime Organisation (IMO) the EU is not rubberstamping the unnecessarily risky activity of managing reverse logistics of ship material management on a beach. The EU requirements go beyond the IMO’s Hong Kong Convention (HKC), a piece of law which was adopted in 2009, but so far has only been ratified by four countries and is unlikely to enter into force in due time. More than 100 global environmental and human rights organisations, the UN Special Rapporteur on Human Rights and Toxics and European policy makers have denounced the HKC for merely rubberstamping the status quo.

EU Releases Guidelines for Certified Shipbreakers

Clui

On April 12, the European Commission published new legal guidelines which – advocates suggest – may prevent South Asian beaching shipbreakers from receiving required certification for dismantling EU-flag state vessels.

The implementation document states that "applying environmentally sound management principles and compliance with regulations for recycling a ship will rely, at least partly, on developing appropriate infrastructure. Operationally, it follows . . . that the transfer of elements from the ship to the facility’s impermeable floor is done without the elements coming in contact with the sea, the intertidal zone or any other permeable surface such as sand or gravel."

Yards in the developing world handle an estimated 70 percent of the world’s obsolete tonnage; they generally rely on grounding ships onto soft beaches, where the hulks are dismantled at competitive rates through the use of migrant labor and basic implements. The operation involves cutting blocks off of the beached vessels and dropping them by gravity onto the beach, where they are winched up the shore for further scrapping. Bangladeshi safety advocates BELA suggest that over 90 workers have died carrying out these practices over the course of the last seven years; shipbreakers in the country face charges of contempt of court for failure to improve conditions.

Advocates with NGO Shipbreaking Platform suggest that the EC’s requirements will restrict shipbreaking activity to safer and less polluting yards in the developed world. As a measure of the regulation's stringency, it would disallow EU certification for some federally-regulated American shipbreaking yards, which presently rely on the use of permeable tidal beaches and adjacent land.

“Recycling yards that want to make it on the EU list of approved facilities need to meet high environmental and safety standards. The EC is clear in its message: an unprotected beach is never going to be an appropriate place for a high-risk heavy industry involving hazardous waste management”, said Ingvild Jenssen, Policy Director of the NGO Shipbreaking Platform.

However, the guidelines on facilities contain a caveat that could permit certification for yards with limited capital improvements. The hull of the scrapped ship itself can be considered an "impermeable floor," so long as its integrity is sound, pollution from dismantlement is controlled, and cut blocks are lifted clear to a separate impermeable area for scrapping. A drydock is not required to meet the minimum infrastructure standards for certification. After cutting upper blocks free, the bottom of the hull would also have to be winched clear onto an impermeable, well-drained surface in order to complete the dismantlement process.

In February, Maersk announced a partnership with four beaching yards in Alang, India, intended to win EU and Hong Kong Convention certification for their operations. Maersk Group did not immediately return a request for comment.

Source: maritime-executive. 13 April 2016

17 April 2016

EU Commission Issues Guidance for Ship Recycling Facilities Seeking Approval



The European Commission has today published technical guidance for ship recycling facilities seeking approval under EU Ship Recycling Regulation.

The document provides clarifications in accordance with the relevant Hong Kong Convention provisions and taking into account the relevant guidelines of the International Maritime Organization (IMO), the International Labour Standards (ILO) and of the Basel Convention.

Under the regulation, ship recycling facilities that intend to be listed as EU-approved will need to ensure safe working conditions, pollution control including proper downstream waste management and enforcement of international labour rights.

NGO, Shipbreaking Platform the move is inline with calls by environmental and human rights NGOs for a relocation of ship recycling to platforms that can ensure sustainable practices.

“Recycling yards that want to make it on the EU list of approved facilities need to meet high environmental and safety standards,” commented Ingvild Jenssen, policy director of the NGO Shipbreaking Platform.

“The EC is clear in its message: an unprotected beach is never going to be an appropriate place for a high-risk heavy industry involving hazardous waste management,” she added.

The NGO also noted that according to the EU, ship recycling is an industrial activity that needs industrial methods, equipment and standards. Workers and the environment anywhere in the world have the same right to protection under the EU Regulation.

The organisation added that attempts by some Member States with strong shipping interests to water down the requirements of the Regulation, more specifically, to accept low-cost beaching facilities in South Asia as environmentally friendly and safe for workers in order to make it on the list, have not been successful.

Global Reference Point
According to the Shipbreaking Platform, the EU list of approved ship recycling facilities will become a global reference point for sustainable ship recycling.

It was said to reward the companies that already have or are willing to invest in the necessary infrastructure and the employment of fully trained workers to ensure safe and environmentally sound recycling practices.

The NGO added that the recycling yards responsible shipping companies such as Hapag Lloyd, Wilhelmsen, Grieg and Royal Dutch Boskalis work with in Europe, China and Turkey will most likely feature on the EU list after having provided evidence that they comply with the requirements, and in some cases also having improved their practices in order to meet the European standard.

By promising to clearly distinguishing good from bad practices, the EU list was said to have also already prompted the establishment of new facilities that see opportunities for an increased market share.

For ship owners, the NGO said that the EU list will be the only guarantee that their end-of-life vessels are not causing harm to workers and the environment.

Backed by ‘independent verifiers with qualifications’ and audits by the EC or agents acting on its behalf, a further important warranty lays in the right NGOs have to submit complaints and concerns to the EC regarding the functioning of a facility and with that prompt an on-site visit to establish whether the facility should be removed from the list.

“While only vessels sailing under an EU flag will be legally obliged to use an EU approved facility, any shipping company around the world with a responsible policy can use the EU listed facilities to prove their effort,” concluded Jenssen.

Source: waste-management world.

Idle Containership Fleet Still Growing as 2016 Shapes Up to Be a Record Year for Scrapping

(The Loadstar) – Laid-up containership capacity “remains at an alarmingly high level”, according to the latest review by Alphaliner and, worryingly for shipowners, there are still no signs of demand picking up.

In a survey taken on 4 April, the consultant recorded 325 idle containerships at anchor – equating to 1.48m teu and 7.4% of the global cellular fleet.

According to the Alphaliner data, mothballed tonnage includes 54 vessels of 5,100-7,499 teu, and 55 of 7,500 teu and over, with their operators all desperately seeking employment for them at almost any rate.

Alphaliner said it had seen further “faltering demand” for charter tonnage in the past two weeks – a time of year when demand is normally strong – “dashing hopes of seeing overcapacity decrease in the foreseeable future”.

It is yet more evidence of the market’s severe troubles, it added: “With simply too much capacity afloat, and inadequate demand.”

It follows that it is now an operators’ market, and any fixtures being made are on daily hire rates that barely cover operating costs, with open-ended options and free positioning included.

The nightmare is worst for owners of panamax vessels of 4,000-5,000 teu and the over-panamax sector of ships up to 7,500 teu in size, but Alphaliner repotrs that the only fixture done in the 7,500-9,500 teu sector in the past fortnight was the charter of the ER Vancouver to MSC for a 12-month period at an all-time low of just $6,500 per day.

A similar sized ship would have commanded four or five times that rate a year ago.

The rock-bottom charter rates are expected to have a further impact on vessel value, eventually obliging owners to take impairment losses and potentially breaching the loan-to-value covenants of mortgages.

Workers carry a rope line to fasten a decommissioned ship at the Alang shipyard in Gujarat, India, in this March 27, 2015 file photo. REUTERS/Amit Dave/Files

The reduced ship values and dire prospects for the panamax sector – particularly once the enlarged Panama Canal opens in June – are forcing owners to reconsider scrapping as an option. The decision to send a ship to the breaker’s yard will have been made somewhat easier for owners by a recent slight increase in scrap prices to around $300 per LDT.

London-based shipbroker Braemar ACM reports that 41 container vessels, totalling 143,000 teu, have been sold for demolition so far this year – compared with the 85 (187,500 teu) scrapped in the whole of 2015 – suggesting that 2016 could be a record year for ship scrapping.

Meanwhile, Alphaliner has noted a new record for the biggest containership ever sold for demolition: claimed to be the 6,479 teu DS Kingdom, which, having been built in 2001 is also one of the youngest ships to have ended its final voyage on a beach in the Indian sub-continent.

The Loadstar is fast becoming known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.

Source: gcaptain. 13 April 2016