yara

The world’s first autonomous electric cargo ship

Built by Norwegian firms Kongsberg and Yara, the Yara Birkeland will be the world’s first fully electric autonomous container ship. It will use GPS, radar, cameras and sensors to navigate itself. With a cost of around £25 million, which is 3 times the cost of a standard container ship, she will hopefully pay for herself as without the need for fuel or crew the annual operating costs could be slashed by up to 90%. Its size will be small compared to modern standards, with capacity for 100-150 shipping containers.

Until 2019 it will be operated as a manual vessel before moving to remote operation and then fully autonomous from 2020. It should begin to ship products from Yara’s production plant to the Norwegian ports of Brevik and Larvik in the later part of 2018.

Svein Tore Holsether, Yara’s president, said: “Every day, more than 100 diesel truck journeys are needed to transport products from Yara’s Porsgrunn plant to ports in Brevik and Larvik where we ship products to customers around the world. With this vessel we move transport from road to sea and thereby reduce noise and dust emissions, improve the safety of local roads, and reduce emissions.”

Yara Birkeland will be over 70 metres (230 ft) long, with a beam of 15 metres (49 ft) and a depth of 12 metres (39 ft). She will have a draught of 5 metres (16 ft).

Uncrewed shipping remains unchartered territory. Much of the processes and communications are still in development, and a move to fully autonomous depends on the technology being able to catch up with the design. It could be quite a while before there is no need for any crew!

You can watch the video here

gridlock customs

Gridlock for British ports if additional customs checks approved

As government negotiations to facilitate Britain’s exit from the European Union gather pace, the UK Chamber of Shipping says the EU is ignoring the risk Brexit could bring to European ports. According to one group of MPs the increase would be five fold and confidence in border arrangements post Brexit is alarmingly low. Her Majesty’s Revenue and Customs have told the Treasury select committee that it estimates a customs declaration rise from 60million a year to over 300million a year after the UK leaves the EU.

Chief executive of the chamber, Guy Platten, said: “The EU sells £240bn of goods to the UK each year, most of which travels through ports. So the negative impact of a so-called hard Brexit on ports such as Dover will be felt just as severely if not more so by European ports. I don’t think the EU has fully grasped this yet.”

The chamber said the proposed return of border controls would lead to increased bureaucracy, “guaranteed” lorry gridlock and threats to the prosperity of both EU member states and the UK. Platten continued: “Much of the attention on the impact of leaving the customs union has been on UK ports, but major EU ports such as Calais, Zeebrugge and Dublin would find themselves equally as vulnerable. The UK government understands the importance of sorting this out around the negotiating table, but we are yet to see evidence that the EU negotiators fully understand their own vulnerability.”

Dover has no room to expand from its 2.6 million lorries a year, and Eurotunnel, which caters for 1.6 million lorries a year faces the same issue. John Keefe, its spokesman, said: “On one side of Eurotunnel we have an area of outstanding beauty, so you can’t build to the left, and on the right we have the motorway; then you have to look at moving up, down, or back along the motorway.” Earlier this year, senior freight industry leaders including Eurotunnel said the introduction of customs checks at Dover after Brexit could cause gridlock in south-east England, with lorries queueing in Kent for up to 30 miles (48km) to get across the Channel.

In the summer of 2015, a French ferry workers strike led to more than 7,000 trucks backed up the motorway almost as far as Maidstone. With as many as 16,000 trucks a day using Dover, the potential for a repeat of that episode alarms business. An emergency traffic management strategy at the time, called Operation Stack, is estimated to have cost the Kent economy £1.5m a day, with parts of the M2 turned into a vast lorry park.

Concerns that this could be the case again seem to be well founded, and there doesn’t seem to be any evidence of a hard and fast plan for the UKs customs situation. With under two years to go until this would have to come into force, decisions need to made fast.

cosco oocl

Cosco’s acquisition of OOCL could be the most expensive take over in shipping history

On Sunday 9th July a joint statement was issued by Orient Overseas International Ltd (OOIL) from Hong Kong, Chinese state owned Cisco Shipping Holdings Ltd (Cosco) and Shanghai International Port Group Co (SIPG). 

Cosco and SIPG are acquiring all of OOIL shares at an offer price of HKD 78.67 (USD 10.07) per share, an overall pace of £4.9 billion. The price represents a 31% premium on Fridays closing price of HKD 60 and values OOIL at around 42.9 billion.

On the completion of the deal, Cosco will hold 90.1% while SIPG will hold the remaining 9.9% stake in OOIL. The joint buyers said they will keep the OOIL branding, retain its listed status and maintain the companies’ global headquarters in Hong Kong along with all management. Employees will retain the existing compensation and benefits, nor will any lose jobs as a result of the transaction for at least 24 months.

It was only in May that the Orient Overseas Container Line (OOCL) had the worlds largest container ship, the OOCL Hong Kong but just months later the 7th biggest container shipping line is being sold to a Chinese rival.

China’s vision of dominating world trade seems to be becoming more of a reality with the take over, and aims to become less dependent on Hong Kong.  The take over of the OOCL parent company (OOIL) will also propel Cosco from 4th to 3rd of the global container shipping marketing share.

low tariffs after brexit

Low tariffs post Brexit for British Manufacturers and Retailers

According to the Freight Transport Association (FTA) the government’s commitment (announced on 26 June 2017) to securing existing duty free access to UK markets for 48 of the world’s developing nations will ensure that British manufacturers and retailers can continue to trade efficiently and profitably. These agreements should ensure that the price of household items, ranging from textiles to tea, can be maintained at pre-Brexit levels.

Alex Veitch, Head of Global Policy at FTA says “Imports of many of our staple household items, which reach our shores in bulk shipments from around the globe, currently benefit from reduced or zero tariff agreements.  These keep prices stable, both for retailers and for manufacturers – a key requirement when other areas of the economy are currently more volatile.  FTA lobbying of government has been relentless in the past year on behalf of the members of the British Shippers’ Council, to ensure that their opinions have been considered, and we look forward to working with the Department for International Trade in the coming months to ensure that the nation’s shopping basket continues to be as affordable as possible.”

Since the EU referendum announcement, FTA has met representatives from the Department for International Trade on three occasions to discuss the priorities of the logistics sector.  “Today’s announcement is good news for British retailers, and great for developing countries.  Trade policy is set by EU member states, so after Brexit the UK will be free to chart its own course.  By committing to a policy of duty-free access to UK markets for these states, the government has stated its intentions to ensure that Britain will keep on trading outside the European Union.

As an EU member, the UK and companies based here can sell their goods freely to customers anywhere else in the EU without those customers having to pay additional taxes to import those goods. British consumers and companies can also import from elsewhere in the EU without tariffs.  The EU also has agreements allowing free trade with countries such as Norway, Switzerland, South Africa and South Korea. Outside the EU, the UK will need to strike new deals in order to have free trade with those countries or the remaining EU members.

According to analysis by Civitas, if the UK leaves the EU without a trade deal UK exporters could face the potential impact of £5.2 billion in tariffs on goods being sold to the EU. However, EU exporters will also face £12.9 billion in tariffs on goods coming to the UK.

Brexit is still making its mark on the logistics industry, and the period of uncertainly means that global trade is at a transition. The UK will have to feel its way, and hope that the agreements made stay in place to ensure that we are in a strong position to trade.