19 February 2016

Baltic Dry Index Rises for 4th Consecutive Day to 307 as Scrapping Accelerates

The Baltic Dry Index (BDI) Wednesday achieved a fourth consecutive day of positive movement, gaining 6 points to reach 307, as reports also indicated scrapping in the sector was accelerating.

In terms of average TC spot rates, both the Panamax and Supramax segments rose to $2,862 and $2,710 per day respectively.

Meanwhile, the Capesize segment saw a $6 dollar decline on daily earnings, landing at $2,799 per day.

Meanwhile the pace of dry bulk vessel demolition is reported to have accelerated over recent weeks, with Erik Nikolai Stavseth and Kurt Waldeland, shipping analysts at Oslo-based Arctic Securities AS (Arctic), estimating that about 50 million DWT will be scrapped during the 2016 year as a whole.

As Ship & Bunker previously reported, Peter Sand, chief shipping analyst at BIMCO, said dry bulker demolition sales reached 4.6 million DWT during January, representing an 84 percent increase from 2015's monthly average sales of 2.6 million DWT.

Stavseth and Waldeland suggest that while the current demolition rate may not be sustained throughout the year, demolition sales will prove to be the most significant way of restoring the market's supply and demand balance over the next few years.

The two analysts' forecast of a scrapping rate decline in coming months comes alongside a prediction of a lighter than expected influx of new tonnage during the remainder of 2016, with January alone consisting of around 21 percent of the year's orderbook.

"Our tracking of actual deliveries versus scheduled deliveries over the past five years show an average of 66 percent actually delivered and hence we stick to the view that also 2016 will see a lower influx of tonnage than the orderbook suggests," said Stavseth and Waldeland.

Last week, Ship & Bunker reported that Khalid Hashim, CEO of Precious Shipping Public Company Limited (PSL) has said that there could be wave of bankruptcies in the dry bulk sector as owners find themselves unable to secure financial backing due to banks pulling back on uncertain loans.

Source: ship and bunker. 18 February 2016

Pollution: Three steps to a green shipping industry

It is time to crack down on the emissions and destructive development caused by vast container vessels that pollute the air and seas, write Zheng Wan and colleagues (Zheng Wan, Mo Zhu, Shun Chen& Daniel Sperling).


On 26 April 1956, US entrepreneur Malcom McLean watched a converted oil tanker leave Port Newark in New Jersey carrying 58 of his inventions: the modular shipping container. By 2015, the largest container ship in the world, with a deck the area of 3.5 soccer fields, could carry about 20,000 of the units.

Ever-bigger container ships carry 90% of global consumer goods such as clothes and food (non-bulk cargo)1. The seaborne container trade has grown from 100 million tonnes in 1980 to about 1.6 billion tonnes in 2014. Standardized 20-foot (6-metre) containers are moved using automated systems that connect seaports, airports and train stations2. Bigger ships carry more containers, ideally consuming less oil and releasing fewer pollutants for each unit of goods carried.

Nonetheless, the human and environmental costs of shipping are vast. Low-grade marine fuel oil contains 3,500 times more sulfur than road diesel. Large ships pollute the air in hub ports, accounting for one-third to half of airborne pollutants in Hong Kong, for example3. Particulates emitted from ships cause 60,000 cardiopulmonary and lung-cancer deaths each year worldwide4. Expanding harbours to take vast ships destroys coastal ecosystems. And scrapping fleets of obsolete smaller ships pollutes seas and soils, and damages workers' health, especially in the developing world5.

The industry is at a crossroads. The expected profits from larger ships are being undermined by excess capacity, slowing trade and plunging transport prices. In 2015, container freight rates for the world's busiest shipping route — between Asia and northern Europe — dropped by nearly 60% in three weeks. A dozen shipping companies went bankrupt, including Denmark's Copenship and China's Nantsing. Even the giant container-conveying Danish conglomerate Maersk announced that it would lay off 4,000 employees by 2017 and delayed or cancelled orders to build mega-ships.

Companies face a dilemma. If they buck the trend of scaling up, they risk being less competitive. Yet running mega-ships only part full wipes out the benefits of economies of scale. Ships use more fuel per container when half-loaded than for a full cargo.

The future is green shipping: efficient marine transport with minimal health and ecological damage6. Cleaner practices — especially on ship scrapping, emission control and port management — are needed. Achieving this will require heroic efforts by the industry and its engineers in collaboration with regulators, port authorities and communities. Environmental impacts should be considered in determining optimal routes and modes for delivery of goods.

Pollution problem
Shipping is the most energy-efficient way to move large volumes of cargo. Yet ships emit nitrogen oxides (NOx), sulfur oxides (SOx), carbon dioxide and particulate matter (PM) into the atmosphere. Worldwide, from 2007 to 2012, shipping accounted7 for 15% of annual NOx emissions from anthropogenic sources, 13% of SOx and 3% of CO2. In Europe in 2013, ships contributed 18% of NOx emissions, 18% of SOx and 11% of particles less than 2.5 micrometres in size (PM2.5). For road transport, the figures were 33%, 0% and 12%, respectively. Aviation, by contrast, accounted for only 6%, 1% and 1%, respectively, and rail just 1%, 0% and 0%.

Shipping policies must be applied worldwide to be effective. Shipping and aviation emissions are not addressed by global climate-change agreements, including the deal made in Paris last December. The International Maritime Organization (IMO), which regulates international shipping, is engaging — slowly. Releases into the oceans of oils, noxious liquids, harmful substances, sewage and garbage have been restricted since the 1980s by the International Convention for the Prevention of Pollution from Ships (MARPOL), following a spate of oil-tanker accidents. Air-pollution limits for shipping were adopted in 1997 but came into force only in 2005.

Energy efficiency is the IMO's present focus. Starting in 2013, its Energy Efficiency Design Index and Ship Energy Efficiency Management Plan aim to lower CO2 emissions from shipping through tighter technical requirements on engines and equipment, maintenance regimes and voyage plans. No absolute emissions-reduction targets were set. Unfortunately, long-term expansion in global trade and growing ship numbers mean that even if these measures are fully implemented, total shipping emissions are projected to quadruple from 1990 to 20508.

The IMO has set up four 'emission-control areas' — the Baltic Sea, the North Sea, the US Caribbean and the coastal waters of Canada and the United States — where ships are required to minimize emissions mainly of SOx and NOx. These regions exclude the world's ten largest container ports, such as the Chinese ports of Shanghai, Shenzhen, Hong Kong and the South Korean port of Busan, which are all in Asia (see 'The dirty ten'). We estimate that these ten sites alone contribute 20% of port emissions worldwide.


A few developed countries, including the United States, the United Kingdom and Norway, limit the sulfur content of marine fuel in their national waters to within 1,000 parts per million (p.p.m.). Most developing countries, including India and China, permit dirtier fuels with 35,000 p.p.m. of sulfur. The European Union fuel standard for cars is 10 p.p.m.

Ship scrapping is heavily polluting. Asbestos, heavy metals and oils are toxic. Workers are exposed to hazardous fumes. The EU has laws requiring that ships registered in Europe be broken up only in licensed yards that meet strict guidelines. But it is easy to change a ship's registration and demolish it in a country with a more lax approach to labour and environmental protection.

India, Bangladesh, and Pakistan are popular for ship scrapping9. In Bangladesh for example, 40,000 mangroves — trees that stabilize many tropical coasts and are habitats and breeding grounds for many species — were chopped down in 2009 alone to accommodate shipbreaking yards. The pollution from scrapping there has caused an estimated 21 fish and crustacean species to become extinct. And reportedly, each week one worker dies and seven are injured in the scrap yards of Bangladesh.

Congestion adds to pollution and disruption. Large volumes of cargo overwhelm ports, surrounding roads and waterways. Hasty expansion or construction of berths and canals to take more large ships can be environmentally disastrous. Where the water in existing harbours is too shallow, port authorities may reclaim land from the sea or build artificial islands in deeper waters.

Coastal changes destroy ecosystems. Over the past three decades, about 75% of mangroves have disappeared from Shenzhen, following port expansion and land reclamation. Plans for the Porto Sul port in Brazil — slated to open in 2019 — identified 36 potential environmental impacts, including driving away dolphins and whales and killing seabed fauna.

Traditional shipping routes cannot keep up. The Panama Canal, which connects the Pacific and Atlantic oceans, can currently handle vessels carrying only up to about 5,000 standard containers. A project to expand it to accept ships with 13,000 containers (the 'New Panamax' class) should be completed by May. But the largest mega-ships, such as Maersk's E-class and Triple E-class (with capacities between 14,000 and 18,000 containers), will still be unable to cross (see 'Supersize ships'). In the meantime, heavy traffic at Panama, complicated navigation and constant maintenance have led to a ten-day delay in voyage times.


To take advantage of the business opportunity, construction is scheduled to start this year on a 280-kilometre-long canal through Nicaragua. This US$50-billion project, funded by a billionaire-owned Hong Kong company, could destroy almost 400,000 hectares of tropical forests and wetlands, home to threatened and endangered wildlife and indigenous communities10.

Public concern about the pollution and health impacts of shipping remains muted because the industry is a backbone of the global economy, and its activities happen far from where most people live and often beyond the jurisdiction of local regulators. We cannot rely only on new ship designs and engine innovation to minimize the ecological footprint of shipping: today's ships might be in use for another 20 years or more. Several issues must be addressed together to make the industry greener.

Green shipping
Implementing the following recommendations could save thousands of lives each year, ensure cleaner coastal air and reduce ecological damage from shipping.

Clean up ship scrapping. The IMO adopted the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships in 2009, but only Norway, Congo and France have acceded as of February 2016. The IMO's priority should be to ensure that the principal scrappers — India, Bangladesh and Pakistan — adhere to these guidelines. The first step is to set up local offices in these countries to collect and analyse monitoring data independently and to propose improvements to local governments. International loan or aid programmes to these countries, sponsored by the World Bank or the Asian Development Bank, for example, should demand clean ship-scrapping practices as an incentive. To discourage transfer of scrapping elsewhere, a watch list of poorly performing countries needs to be updated by IMO regularly until an international convention enters into force.

Control emissions. Stricter IMO emissions regulations are needed, including a cleaner worldwide standard for sulfur released by combustion of marine fuel. A 97% cut in SOx can be achieved by reducing the sulfur content from 35,000 p.p.m. to 1,000 p.p.m. fuel oil. Today's low oil price provides a great opportunity for this transition to happen. The current cost of 1,000-p.p.m.-grade fuel oil (around US$300 per tonne in Singapore, for example) is less than half of that of the cheapest dirty fuel four years ago.

Marine fuel is a sideline for oil refineries — only 2–4% of the total fuel market. Stricter emissions standards will stimulate demand for high-quality fuel. Incentive programmes (tax rebate and subsidies for producers) will be needed to ensure a reasonable profit margin to recover the initial high investment in developing countries, where there is little current capacity. Government interventions will be needed in countries with state-run oil companies, such as in China and India.

An alternative is to install scrubbers for exhaust-gas cleaning on ships. Scrubber units blend the exhaust gas with water or caustic soda to remove up to 99% of SOx and 98% of particulate matter from high-sulfur fuel. At the moment, scrubbers are expensive, costing $2 million for one ship. But China, for instance, could equip its entire container fleet in one year by funding a 50% subsidy for scrubbers. The total cost? Just 0.5% of the $150 billion per year it has spent since 2013 to fight pollution. Shipping companies could recoup the other 50% in one year from fuel savings. With a stricter emissions standard, the demand for scrubbers would go up, and the costs down, as production scales.

Improve port management. Port authorities should review the environmental impact of their previous construction and disclose information on their future development plans to demonstrate responsible management of public assets. They should coordinate with transport-planning bureaus to seek the most economical and environmentally friendly strategy to dispatch goods; the optimal capacities of its terminals; and how to assist ships to load and unload quickly. Making port-business statistics and the results of environmental-impact studies accessible will allow the research community to be involved in the decision-making process. Environmental non-governmental organizations should campaign to increase public awareness of port development.

After decades of loose oversight, it is time for shipping to get a whole lot greener.

Source: nature. 17 February 2016

Shipbreaking Platform brands Maersk 'hypocritical':

India: The NGO Shipbreaking Platform has heavily criticised the Maersk Group’s decision to beach its end-of-life vessels in India. ‘It is hypocritical to see Maersk’s engagement in India presented proudly in the company’s CSR Report as one that aims at promoting higher standards,’ states the NGO’s executive director Patrizia Heidegger.

The world’s largest container shipping company, Maersk last week announced a commitment to help selected ship recycling yards at Alang in India to upgrade facilities and practices to comply with the company’s standards.

According to the Shipbreaking Platform, Maersk was previously guided by a progressive policy on ship recycling: its old vessels were dismantled in modern ship recycling facilities in either China, Turkey or Europe. ‘Maersk’s decision to resort to the low-cost beaching method in India undermines European efforts to improve global conditions and the company’s position as industry leader,’ it argues.

‘The fact is that they are already selling ships now to facilities that operate under conditions that would not be allowed in Europe - they admit themselves that the decision to go to India is primarily taken to make their financial report look better,’ comments Heidegger.

Source: recycling international. 19 February 2016

The road to redemption for Alang begins with Maersk Line

The announcement by the poster boy of container shipping to use its leverage to create responsible ship recycling options is music to ears of Alang ship breakers

The number of vessels up for recycling by Maersk Group has been limited for the past decade; but in the next five years, a larger number of ships owned by the group will reach the end of their life. Photo: Bloomberg
The number of vessels up for recycling by Maersk Group has been limited for the past decade; but in the next five years, a larger number of ships owned by the group will reach the end of their life. Photo: Bloomberg

Maersk Line, the world’s biggest container shipowner, is steering the debate on responsible ship recycling to a different course by announcing last week its “commitment to help selected ship recycling yards in Alang upgrade facilities and practices to comply with the company’s standards”.

The announcement by the poster boy of container shipping to use its leverage to create more responsible ship recycling options is music to the ears of ship breakers along a 10-km stretch of beach at Alang in Gujarat state’s Bhavnagar district. The work practices followed on the beaches of Alang—the world’s largest stretch of ship breaking beaches—have often been vilified for its negative human rights impacts and environmental degradation, including child labour, frequent fatalities, inadequate working and living conditions, lack of access to hospitals and proper waste facilities.

Out of the 768 ships recycled globally in 2015, 469—representing 74% of the total gross tonnage (capacity) scrapped—were sold to facilities on beaches in India, Pakistan and Bangladesh.

Critics of Maersk such as non-governmental organization Shipbreaking Platform have dubbed the company’s decision to recycle its end-of-life ships in Alang as “rubberstamping practices that they previously denounced to boost profits in times of low freight rates”.

Since 2009, Maersk Group, which owns Maersk Line, has been pursuing a policy of recycling ships responsibly. Responsible recycling, however, is only feasible in a limited number of yards in China and Turkey. Besides, on average, using one of these yards has an added cost of $1-2 million per recycled vessel, says Annette Stube, head of sustainability at Maersk Group.

The number of vessels up for recycling by Maersk Group has been limited for the past decade; but in the next five years, a larger number of ships owned by the group will reach the end of their life. Using only responsible recycling facilities is estimated to incur extra costs of more than $150 million, compared with using upgraded facilities in India, according to Stube.

With more vessels to recycle, the current cost of sustainable ship recycling is not feasible for Maersk as it looks to shore up its profitability. It is clear that with an ageing fleet, Maersk needs more options to recycle ships cost-efficiently and responsibly. Regulatory developments are further putting pressure on the industry to push for global availability of responsible practices.

Responsible and sustainable ship recycling was intensely debated by the global shipping industry for many years, culminating in the adoption of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships by the International Maritime Organization (IMO) in 2009.

Four year later, in 2013, the European Union published its own regulation on ship recycling.

While the IMO’s Hong Kong convention does not prohibit dismantling of redundant ships by the beaching method practised in Alang, the EU regulations have banned this practice.

Under the beaching method, ships are first grounded and then broken in an unprotected marine environment. Critics say this method is polluting and unsafe for workers.

The Hong Kong convention is yet to come into force because it has not been ratified by at least 15 states, representing 40% of world merchant shipping by gross tonnage (capacity), to take effect globally.

The requirements of the EU ship recycling regulation will be phased in between now and December 2020.

A key aspect of the EU regime is the development of a list of ship recycling facilities that are compliant with its standards. Once this is compiled by December this year, ships flying the flag of an EU member-state will only be sold for recycling to facilities that are included in the list.

European fleet owners such as Maersk fear that the EU regulations would deprive them of adequate, responsible facilities, fetching lower prices while selling their old ships.

Steady improvements in conditions have been witnessed in Alang over the last two years. Four of the 167 recycling facilities located there are now certified to the standards of the Hong Kong Convention.

These four recycling facilities—Priya Blue Industries Pvt. Ltd, RL Kalthia Ship Breaking Pvt. Ltd, Leela Ship Recycling Pvt. Ltd and Shree Ram Group—do not comply with the EU regulations.

Recyclers such as RL Kalthia say it will work towards compliance with the EU regulations by filling the gaps, “if possible, within the method used for ship recycling in India (read beaching)”.

Following a couple of visits to the four IMO-certified ship recycling facilities in 2015, the Maersk Group concluded that responsible recycling can be accelerated in the area.

Maersk’s decision to look at Alang for its ship recycling needs is seen as an endorsement of the beaching method banned by the EU, without being “irresponsible,” by suitably upgrading facilities and practices that comply with the standards set by the company. The decision, though, could be a bit of an embarrassment for the EU, given Maersk’s European roots.

And, Maersk is not hiding its views behind the niceties even while reiterating its policy to “only recycle ships responsibly”.

The group says its goal is “to make more responsible ship recycling facilities available, regardless of location and method applied” by developing a standard that combines the Hong Kong convention and demands of the group’s third-party code of conduct on anti-corruption, labour, human rights and sub-contractor matters. Maersk is, however, silent on the EU regulation in its pursuit of this goal.

Maersk says it will not only work directly with the four IMO-compliant ship recyclers to upgrade their practices to comply with its standards, but also engage a broader coalition of shipowners to help upgrade a larger Alang area to get better waste facilities, hospitals and a general upgrade of all the facilities on the beach. The more shipowners that commit to engaging over this issue, the greater the leverage for change, says Stube. This could well be the road to redemption for Alang.

Source: live mint. 19 February 2016

Pollution: Three steps to a green shipping industry

It is time to crack down on the emissions and destructive development caused by vast container vessels that pollute the air and seas, write Zheng Wan and colleagues.


On 26 April 1956, US entrepreneur Malcom McLean watched a converted oil tanker leave Port Newark in New Jersey carrying 58 of his inventions: the modular shipping container. By 2015, the largest container ship in the world, with a deck the area of 3.5 soccer fields, could carry about 20,000 of the units.

Ever-bigger container ships carry 90% of global consumer goods such as clothes and food (non-bulk cargo)1. The seaborne container trade has grown from 100 million tonnes in 1980 to about 1.6 billion tonnes in 2014. Standardized 20-foot (6-metre) containers are moved using automated systems that connect seaports, airports and train stations2. Bigger ships carry more containers, ideally consuming less oil and releasing fewer pollutants for each unit of goods carried.

Nonetheless, the human and environmental costs of shipping are vast. Low-grade marine fuel oil contains 3,500 times more sulfur than road diesel. Large ships pollute the air in hub ports, accounting for one-third to half of airborne pollutants in Hong Kong, for example3. Particulates emitted from ships cause 60,000 cardiopulmonary and lung-cancer deaths each year worldwide4. Expanding harbours to take vast ships destroys coastal ecosystems. And scrapping fleets of obsolete smaller ships pollutes seas and soils, and damages workers' health, especially in the developing world5.

The industry is at a crossroads. The expected profits from larger ships are being undermined by excess capacity, slowing trade and plunging transport prices. In 2015, container freight rates for the world's busiest shipping route — between Asia and northern Europe — dropped by nearly 60% in three weeks. A dozen shipping companies went bankrupt, including Denmark's Copenship and China's Nantsing. Even the giant container-conveying Danish conglomerate Maersk announced that it would lay off 4,000 employees by 2017 and delayed or cancelled orders to build mega-ships.

Companies face a dilemma. If they buck the trend of scaling up, they risk being less competitive. Yet running mega-ships only part full wipes out the benefits of economies of scale. Ships use more fuel per container when half-loaded than for a full cargo.
The future is green shipping: efficient marine transport with minimal health and ecological damage6. Cleaner practices — especially on ship scrapping, emission control and port management — are needed. Achieving this will require heroic efforts by the industry and its engineers in collaboration with regulators, port authorities and communities. Environmental impacts should be considered in determining optimal routes and modes for delivery of goods.

Pollution problem
Shipping is the most energy-efficient way to move large volumes of cargo. Yet ships emit nitrogen oxides (NOx), sulfur oxides (SOx), carbon dioxide and particulate matter (PM) into the atmosphere. Worldwide, from 2007 to 2012, shipping accounted7 for 15% of annual NOx emissions from anthropogenic sources, 13% of SOx and 3% of CO2. In Europe in 2013, ships contributed 18% of NOx emissions, 18% of SOx and 11% of particles less than 2.5 micrometres in size (PM2.5). For road transport, the figures were 33%, 0% and 12%, respectively. Aviation, by contrast, accounted for only 6%, 1% and 1%, respectively, and rail just 1%, 0% and 0%.

Shipping policies must be applied worldwide to be effective. Shipping and aviation emissions are not addressed by global climate-change agreements, including the deal made in Paris last December. The International Maritime Organization (IMO), which regulates international shipping, is engaging — slowly. Releases into the oceans of oils, noxious liquids, harmful substances, sewage and garbage have been restricted since the 1980s by the International Convention for the Prevention of Pollution from Ships (MARPOL), following a spate of oil-tanker accidents. Air-pollution limits for shipping were adopted in 1997 but came into force only in 2005.

Energy efficiency is the IMO's present focus. Starting in 2013, its Energy Efficiency Design Index and Ship Energy Efficiency Management Plan aim to lower CO2 emissions from shipping through tighter technical requirements on engines and equipment, maintenance regimes and voyage plans. No absolute emissions-reduction targets were set. Unfortunately, long-term expansion in global trade and growing ship numbers mean that even if these measures are fully implemented, total shipping emissions are projected to quadruple from 1990 to 20508.

The IMO has set up four 'emission-control areas' — the Baltic Sea, the North Sea, the US Caribbean and the coastal waters of Canada and the United States — where ships are required to minimize emissions mainly of SOx and NOx. These regions exclude the world's ten largest container ports, such as the Chinese ports of Shanghai, Shenzhen, Hong Kong and the South Korean port of Busan, which are all in Asia (see 'The dirty ten'). We estimate that these ten sites alone contribute 20% of port emissions worldwide.

A few developed countries, including the United States, the United Kingdom and Norway, limit the sulfur content of marine fuel in their national waters to within 1,000 parts per million (p.p.m.). Most developing countries, including India and China, permit dirtier fuels with 35,000 p.p.m. of sulfur. The European Union fuel standard for cars is 10 p.p.m.

Ship scrapping is heavily polluting. Asbestos, heavy metals and oils are toxic. Workers are exposed to hazardous fumes. The EU has laws requiring that ships registered in Europe be broken up only in licensed yards that meet strict guidelines. But it is easy to change a ship's registration and demolish it in a country with a more lax approach to labour and environmental protection.

India, Bangladesh, and Pakistan are popular for ship scrapping9. In Bangladesh for example, 40,000 mangroves — trees that stabilize many tropical coasts and are habitats and breeding grounds for many species — were chopped down in 2009 alone to accommodate shipbreaking yards. The pollution from scrapping there has caused an estimated 21 fish and crustacean species to become extinct. And reportedly, each week one worker dies and seven are injured in the scrap yards of Bangladesh.

Congestion adds to pollution and disruption. Large volumes of cargo overwhelm ports, surrounding roads and waterways. Hasty expansion or construction of berths and canals to take more large ships can be environmentally disastrous. Where the water in existing harbours is too shallow, port authorities may reclaim land from the sea or build artificial islands in deeper waters.

Coastal changes destroy ecosystems. Over the past three decades, about 75% of mangroves have disappeared from Shenzhen, following port expansion and land reclamation. Plans for the Porto Sul port in Brazil — slated to open in 2019 — identified 36 potential environmental impacts, including driving away dolphins and whales and killing seabed fauna.

Traditional shipping routes cannot keep up. The Panama Canal, which connects the Pacific and Atlantic oceans, can currently handle vessels carrying only up to about 5,000 standard containers. A project to expand it to accept ships with 13,000 containers (the 'New Panamax' class) should be completed by May. But the largest mega-ships, such as Maersk's E-class and Triple E-class (with capacities between 14,000 and 18,000 containers), will still be unable to cross (see 'Supersize ships'). In the meantime, heavy traffic at Panama, complicated navigation and constant maintenance have led to a ten-day delay in voyage times.

Source: Nature. 17 February 2016

18 February 2016

Wirana welcomes Maersk Line’s shipbreaking in Alang:

Wirana welcomes Maersk Line’s shipbreaking in Alang

Vessel cash buyers Wirana Shipping Corporation has welcomed Maersk Line’s recent decision to engage four Hong Kong Convention (HKC) compliant shipbreaking yards in Alang, India to recycle ships.

Maersk Lines said it acknowledged the efforts and investments undertaken by the four yards along Alang beaches and decided to work with the yards for safe and environmentally sound ship recycling practices.

Rakesh Khetan, chief executive of Wirana, said this is a positive step in the right direction and the Maersk decision will have a long term impact on motivating other yards to worth towards HKC compliance.

Maersk Line pointed out that its engagement is not restricted to the four HKC yards only but with other yards intending to seek HKC compliance, improving local waste facilities and hospitals and upgrading housing conditions for migrant workers.

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of ships, 2009 under the aegis of IMO was adopted at a diplomatic conference held in Hong Kong. The text of HKC was developed over three and a half years with input from IMO member states and relevant non-governmental organizations and in cooperation with International Labour Organization (ILO) and the parties to Basel Convention.

Wirana believed that encouragement from shipowners such as Maersk Line would motivate more yards to strive for HKC compliance and thus help counter one of the reasons for delayed ratification of HKC by flag states with large fleets which is lack of enough HKC compliant recycling facilities.

Source: seatrade-maritime. 17 February 2016
http://www.seatrade-maritime.com/news/asia/wirana-welcomes-maersk-lines-shipbreaking-in-alang.html

Ship recycling redefined:

The Hong Kong Convention (HKC) for the Safe and Environmentally Recycling of Ships will have received a much needed endorsement with the recent reports that Maersk Line has elected to send some of their redundant ships to “compliant” shipyards in India.

The HKC could do with a bit of a boost; it was adopted by the IMO some six years ago and to date only Norway, France and the Congo have ratified it.

It is a response that will go down very well in Japan, where the government has been putting serious efforts into assisting a number of Indian demolition yards to dramatically improve their HSE efforts, with four yards now judged to be capable of providing “sustainable” ship recycling services by the ClassNK teams which have been auditing their efforts.

The fact that this has proved possible, within a reasonable timeframe, is likely to give encouragement to other sub-continental yards to similarly improve. Indeed, facilities in Bangladesh and Pakistan are in receipt of technical assistance to help them along the same route. There is some confidence that the frightful pictures of contamination and danger, which have been transmitted by various activist organisations trying to shut down sub-continental shipbreaking will fade from the memory, along with improvement.

It is happening in the nick of time, with a huge surge of tonnage, driven by disaster in the dry bulk trades, overcapacity and gigantism in container shipping and mass redundancy offshore. It has to go somewhere to be recycled, and with more than three quarters of the world’s scrapping capacity in the sub-continent and China, although rates are low and unlikely to improve in the short term, with the world awash with Chinese steel.

Shipowners have been castigated by the activists for being unfussy about the working conditions in the scrapyards once they have handed over their ships, but there is a growing number who want to dispose of their unwanted vessels in a responsible manner. There are pressures from the EU, with its ship recycling regulation which to a certain extent “gold-plates” the terms of the HKC. The EU is compiling a list of facilities that it approves of and has been making strident noises about the evils of “beaching” which is how most ships are broken as opposed to enclosed docks (which are rare as hen’s teeth outside China).

But there are shipping industry guidelines to help owners do what is right and nobody has to wait for the convention to be enforced before deciding to recycle sustainably. But the whole exercise, which some years ago was not something most owners dwelt too long upon, has become rather more complex.

The European enthusiasm for the Basel Convention, with its insistence that a redundant ship is “waste” is not seen to be helpful. Nobody particularly relishes the prospect of the activists of the NGO Shipbreaking Platform suggesting that they are environmental criminals. The arrest of ships in Europe bound for demolition has made people think rather more about “end of life” decisions. The Dutch shipmaster charged following his unwise posting on social media of the last charge of his ship onto a sub-continental (and unapproved) beach, has also been noted in shipping offices!

But the approval of the four Indian yards by the Japanese government, and the news revealed at a seminar co-organised with IMO in London this month that other yards were in the approvals pipeline, demonstrates a more positive outcome. The presence of a growing number of HKC compliant yards in the sub-continent will hopefully encourage flag states, and indeed IMO member states engaged in recycling to ratify the convention and bring it into force.

Source: seatrade-maritime. 17 February 2016
http://www.seatrade-maritime.com/news/americas/ship-recycling-redefined.html

16 February 2016

Shipping ministry to offer over 200 investment projects at Maritime India Summit:

The summit, to be held in Mumbai April 14-16 this year is targeting investments of Rs 35,000 crore - Rs 50,000 crore.

Shipping sails on, despite storm

From ports- and ship-led development to projects pertaining to connectivity and logistics, the Ministry of Shipping will showcase all its investable opportunities to domestic and global investors in the first-ever Maritime India Summit (MIS) to be held in Mumbai from April 14-16, 2016.

The ministry is likely to showcase over 200 detailed projects in the maritime sector, targeting an investment of Rs 35,000 crore – Rs 50,000 crore. The summit will be inaugurated by Prime Minister Narendra Modi on April 14. It is an attempt by the central government to attract investment in the Indian Shipping and Maritime industry from both domestic as well as international players.

South Korea will be the partner country for the summit and there will be special session by a delegation from that nation on potential areas of collaboration such as shipping, ship building, port, maritime affairs, fisheries and aquatic resources.

The ministry is seeking investment opportunities such as port-led development under the Sagarmala project and ship building under the 'Make in India' scheme. Besides, investment is likely to be sought in inland waterways, coastal and cruise shipping, specialised cargo handling and port mechanisation.

“We are going to showcase over 200 investable projects in maritime sector to the investors. We are targeting to attract an investment of Rs. 50,000 crore,” said a senior official in the shipping ministry.

In port led-development and modernization sector, the project which will be highlighted include development of four greenfield major ports in Vadhavan (Maharashtra), Sagar Island (West Nengal), Colachel (Tamil Nadu) and Dugarajapatnam (Andhra Pradesh). It will also showcase capacity augmentation and modernization projects in existing ports through public-private partnership (PPP) mode.

The ministry will also showcase flagship port led development under “Sagarmala”. The major developmental opportunities identified under the programme include setting up seven to eight coastal economic zones across the maritime states, setting up coastal cement cluster in Gujarat and Andhra Pradesh, steel cluster at Karnataka, Odisha and Andhra Pradesh. Also, smart cities have been conceptualized at Kandla and Paradeep.

The event will also showcase opportunities in ship building, ship repair and ship recycling. The ministry is seeking collaboration with foreign shipyards for modernisation and technological upgradation of Indian shipyards.

Projects related to hinterland connectivity and multi-model logistics will be showcased to attract investment in this sector. “We have identified over 100 road, rail connectivity and Inland Water Transport projects to attract investment in this sector. We are also planning to develop multi-model logistics hubs for which investment will be sought,” said a senior official.

“Since we have identified 111 National Waterways, there are opportunities for the investors for construction of jetties, terminals, transloading and warehousing facilities,’ he added.

Earlier, the ministry has asked the Inland Waterways Authority, Shipping Corporation of India and all 12 major ports to prepare a list of investable projects in their areas.

Source: business-standard. 15 February 2016