cyber attack

Recent cyber attack has cost Maersk

The shipping company has revealed that the cyber attack has cost $300 million in lost revenue.  

Maersk CEO Soren Skou said “In the last week of the 2nd quarter we were hit by a cyber-attack, which mainly impacted Maersk Line, APM Terminals and Damco. Business volumes were negatively affected for a couple of weeks in July and as a consequence, our Q3 results will be impacted. We expect that the cyber-attack will impact results negatively by USD 200-300m.”

The announcement that Maersk had been hit by an attack, named NotPatya, came towards the end of June.  The attack meant that workers were not able to access any systems unless they paid 300 million in bitcoin, and took two weeks to fix, in which time affected terminals could not move any cargo.

According to their interim report, as soon as A.P. Moller – Maersk became aware that systems had been affected, action to respond was initiated including closing down infected networks. The malware was contained to only impact the container related businesses of A.P. Moller – Maersk, and therefore six out of nine businesses, including all Energy businesses, could uphold normal operations. A.P. Moller – Maersk also remained in full control of all vessels throughout the situation, and all employees were safe. For Maersk Line, APM Terminals and Damco, systems had to be shut down for a period for precautionary measures, as they have global interfaces across businesses and partners.

These system shutdowns resulted in significant business interruption during the shutdown period, with limited financial impact in Q2, while the impact in Q3 is larger, due to temporary lost revenue in July. While the businesses were significantly affected by this cyber-attack, no data breach or data loss to third-parties has occurred.

The attack was contained on Wednesday 28 June and so began the technical recovery plan with key IT partners and global cyber security agencies. On Thursday 29 June, Maersk Line was able to accept bookings from customers with existing accounts and gradually progressed to more normalised operations for Maersk Line, Damco and APM Terminals during the week of 3 July to 9 July.

The report continued saying that this cyber-attack was a previously unseen type of malware, and updates and patches applied to both the Windows systems and antivirus were not an effective protection in this case. In response to this new type of malware,  different and further protective measures have been put in place.

However, the attack doesn’t seem to have had a negative affect on overall profit predictions. According to Skou  “Maersk Line is again profitable delivering in line with guidance, with revenue growing by USD 1bn year-on-year in the second quarter. The profit was USD 490m higher than the same quarter last year, based on higher rates,”

container port Southampton

Southampton on the list of top container growth in 2016

During 2016 126 ports handled more than 1 million teu containers.

According to DynaLiners report entitled millionaires roundup, 82 ports had experienced growth in the year with 5 ports showing growth of 25% or more.

These ports were Chittagong, Bangladesh (26%), London (26%), Salalah, Oman (29%), Tangshan, China (27%) and Southampton (26%).

14 ports reached over 10m teu. These included Antwerp, Belgium; Busan, South Korea; Dubai, UAE; Hong Kong; Kaohsiung, Taiwan; Port Kelang, Malaysia; Rotterdam, Netherlands; Singapore and Tianjin, Shenzhen, Guangzhou, Ningbo, Qingdao and Shanghai, China.

New entrants to the table included Itajai with 1,104,100 teu and growth of 12%, Izmit with 1,143,000 teu and growth of 16%, Port Qasim with 1,124,000 teu and growth of 16% and Qinzhou with 1,138,000 teu and growth of 24%.

No ports dropped out of the table but 43 saw negative growth on 2015, of which Freeport (Bahamas) recorded the largest decline of -14%. Lagos and Port Said each had a 12% decline, Santos had a 10% decline, Tanjung Pelepas had a 9% decline, Hai Phong had an 8% decline, Lianyungang had a 7% decline, Long Beach had a 6% decline and Kingston had a 5% decline.

The total teu handled by the ports was 589,350,800, with other ports not on the list accounting for 117,649,200.

China topped the list of teu growth by country in 2016, maintaining its position from 2015.

The Far East, North Europe and North America retained position one, two and three respectively from 2015, with the Far East seeing a 2% YoY growth, 3% for North Europe and 1% for North America.

Of the terminal operators included in the data, PSA remained in first place with 56,300,000 teu, growing 6%, Hutchinson Ports also maintained second place but with a 3% dip in growth, followed by APM Terminals also staying at number three with a 3% growth. DP World was fourth, keeping its rank but with zero growth, Cosco Shipping Ports also stayed at number five with a 4% growth.

The report took into account full and empty, loaded and discharged, including transhipment containers. It noted that “Chinese port statistics often include (large) unknown quantities of containerised river cargo. Without these, some of them might even not qualify for millionaire status.”

• Source: Port Strategy

cosco oocl

Cosco’s acquisition of OOCL may face further hurdles

Although they resumed trading on the Shanghai Stock Exchange (SSE) this week, Cosco’s take over of OOCL could still hit a stumbling block.

Cosco’s shares were suspended two months ago and the SSE issued a letter of enquiry on July 18th seeking clarification on two points of the proposed deal. The first is whether it would clear anti trust and monopoly regulators around the world, and secondly, how Cosco intend to keep OOIL listed on the Hong Kong Stock Exchange as previously agreed.

Being allowed to resume trading must mean that the assurances given were satisfactory, however, the take over does still seem to be subject to regulatory review within other countries.

According to OOIL, the offer is ‘dependent upon the satisfaction of pre-conditions, which include the necessary regulatory approvals as well as approval from Cosco Shipping Holdings shareholders. The controlling shareholder, who currently holds 68.7% of OOIL, has irrevocably undertaken to accept the offer’.

Cosco have agreed to maintain OOIL’s listing on the stock exchange, and will make sure that the public shareholding ratio of OOIL meets the requirements of the Hong Kong Stock Exchange (HKSE).

Regulatory and shareholder approval are paramount to the deal going ahead, and it presumably isn’t going to be quick. In reality it may be more difficult to adhere to the terms agreed.

For more information on the take over, please take a look at this video

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

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.

shipping alliance

The new shipping alliances are in place. How are they impacting?

The changes in shipping alliances recently put in place have have already had a big impact on European ports. Coming into effect on April 1st, shippers have experienced significant changes in their carriers’ service networks. On the trans-Pacific trade alone, the alliances will offer 18% fewer direct routes and 33% of the routes will have transit times that are shorter or longer by three or more days compared to the member carriers’ alliance offerings before April.

Rotterdam is feeling the change the most. According to CargoSmart, the Hong Kong based shipment services provider, Rotterdams services from the alliances have fallen by 3 to 23, but the number of vessels passing through and being deployed has increased by 30.  Southampton, Antwerp and Hamburg have also seen the number of deployed vessels increase by 18, 16 and 13 respectively.

Felixstowe have seen a decrease in services through the port by 21, and Bremerhaven by 17.  Bremerhaven has also seen the average vessel capacity rocket by 1000 ten, and Southampton and Le Have have both seen capacity jump by 1200 teu.

Hamburg Port Authority chief executive Axel Mattern, speaking to Container Shipping & Trade said that berth availability and hinterland connections are “key factors” when it comes to dealing with the new alliances and their services. “The challenges with the big ships are on the navigational side. You need to be able to cope with the volumes which are being churned out from all of these big ships. Facilities need to handle all these volumes in a very limited time frame. They are not designed for the storage of containers. They are designed for perfect handling. That is the challenge. You need the capability to enable the volumes to flow.”

According to the Wall Street Journal, American farmers are concerned that the restructuring will make it far harder for them to deliver US commodities abroad. Port calls have been falling since before the new alliances formed, though. Sailings to U.S. ports from Asia recently were running at a weekly rate of 57, down from 65 four years ago, according to Alphaliner, which tracks such activity. However, with larger vessels coming into use, overall capacity has risen 4% to the U.S. West Coast and 22% to the East Coast in that same period, the data show.

With the alliances only having been in place for less than 3 months, the full impact is yet to be seen. Vessels into ports and numbers of containers are bound to fluctuate whilst the alliances find their feet, but with less capacity and demand always changing, it will be interesting to see how the changes affect the ports long term.

air freight

Space issues causing trouble for shipping routes

Unusually tight capacity for the time of year is leading to rising rates, booking restrictions and backlogs for European exporters needing to ship from Europe to the Middle East and Asia.

This is in part attributed to exceptionally high levels of post Chinese New Year shipping cancellations, which have meant price increases for Europe to Asia container rates.

At this point, all bookings are being honoured, even though there seems to be a perception that this isn’t the case.

Hapag-Lloyd have introduced a US$200 peak season surcharge (PSS) for containers from Europe North Continent to East Asia, effective for sailings as of 15 March and valid until further notice. Many forwarders are recommending at least 3 weeks advanced notice of bookings.

The bankruptcy of the Hanjin shipping line last year has had a knock on effect from when it ceased to accept new cargo. Hanjin was the 7th largest container shipper in the world and the news has meant that their cargo has had to be distributed amongst an already nearly full to capacity fleet. Other shipping lines eventually took over their cargo, but at a price, with vessels already operating at high capacity.

Patrik Berglund, CEO of containerised ocean freight data specialist Xeneta said that data indicates that the current short-term rates for 40’ containers from North Europe to Asia averaged US$969. This level of pricing started in November and December ahead of Chinese New Year and had stayed high – and slightly continued to move upwards, Berglund said.
He said it was difficult to give a precise and short answer to the reasons for the current unexpected capacity crunch and high prices, but suggested it was due to a combination of carriers extracting more capacity than predicted demand and re-routing of capacity onto other corridors.

Xeneta had indicated in the lead-up to Chinese New Year that container lines operating on Asia-Europe trades were taking stronger measures than usual to maintain the recent recovery in ocean freight prices by making major cuts to capacity in the weeks after Lunar New Year. Since towards the end of 2016, the market has experienced a strong and sustained recovery, with container rates around 125% higher than they were around this time last year for Asia-Europe routes, Xeneta said. Xeneta’s sources had indicated that carriers were “taking stronger measures to deal with overcapacity to make sure the market stays up”, indicating that lines were attempting to prop up prices by reducing westbound sailings by 33% in the week immediately after Lunar new year and by around 43% from full capacity the following week. Xeneta noted at the time that this behaviour from carriers may mark a distinct difference compared with this period normally in previous years, when rates traditionally slide in the aftermath of Chinese New Year.

MOL Triumph

The worlds largest container ship takes its maiden voyage

The worlds largest container ship, the MOL Triumph, set off on her maiden voyage from Xingang, China on the 10th April. With a gross tonnage of 210678, deadweight of 197500 tonnes and length and breadth of 400m x 59m it certainly does pack a punch – with the ability to carry 20,150 twenty foot containers.

MOL will sail to Dalian, Qingdao, Shanghai, Ningbo, Hong Kong, Yantian and Singapore, before it transits through the Suez Canal. It will then continue on to Tangier, Southampton, Hamburg, Rotterdam and Le Havre before calling back at at Tangier and then Jebel Ali on the return voyage to Asia.

The new 20,000 TEU-class container ships are equipped with various highly advanced energy-saving technologies. These include low friction underwater paint, high efficiency propeller and rudder, Savor Stator as a stream fin on the hull body, and an optimised fine hull form. According to MOL, these technologies can further reduce fuel consumption and CO2 emissions per container moved by about 25-30% when compared to 14,000 TEU-class containerships. Additionally, the vessel has also been designed with the retrofit option to convert to LNG, in view of the implementation of the International Maritime Organisation’s new regulation to limit emission in marine fuels, which will come into effect in 2020.

MOL will take the delivery of the second 20,000 TEU-class vessel in May 2017. Eventually there will be six 20,000 TEU-class containerships unveiled, and they will be phased in gradually on the existing trade routes of MOL.

MOL Triumph takes the title as the world’s largest containership from the 19,224 TEU MSC Oscar and her three sister ships. The four vessels were delivered to Mediterranean Shipping Company in 2015 by South Korea’s DSME. They measure 395.4 meters in length and have a beam of 59 meters.

At this time, we are anticipating the ship arriving into Southampton on roughly the 11th May, and we will keep you updated with its progress.

china uk

6 Top Tips for importing goods from China

In the current economic climate post Brexit, leaving the EU means that foreign relations have become more important than ever. Here are our 6 top tips for importing goods from China…

1. Ensure that the goods are permitted in your country, and that they are correctly classified. International trade is heavily regulated, and Supreme Freight can make sure that all your goods have the correct classifications, such as CFSP, IPR, OPR and warehousing entries, not forgetting BTI classification.

2. Do you need an import license? Do you need to pay VAT and Duty? This is dependent on the classification of the goods. Here at Supreme we can give expert advice to help simplify the process for you to make sure that the correct documentation is in place for your shipment.

3. Choose the right method of transportation. When importing from China the usual methods are either sea or air freight. If there are no time restraints and larger quantities, then sea freight may be preferable. If you would like your goods quicker and with higher levels of security, then air freight would be recommend. If you choose sea, then we can handle all types of cargo including full container load (FCL), less container load (LCL) and NVOCC groupie shipments. If air is your preference our team at Heathrow Airport offer a range of direct and indirect shipment services. Choice and flexibility are paramount and we work closely with both our client and supplier to design a schedule and transit time that will suit your requirements.

4. Track your cargo. Make sure you choose a forwarder who can track your goods. Our tacking page offers detailed information and insight to the status and progress of your shipment, for both sea and air freight. [link to tracking page]

5. Arrange collection of your shipment. We offer a door to door service if required which is convenient and flexible, and also offer container and cargo storage which is a crucial aspect of the supply chain.

6. Don’t forget the Chinese New Year! How can you avoid delays?! By making sure that your order is placed in plenty of time, November at the latest.

Happy importing!
进口快乐

London gateway

Big changes in shipping alliances open the door to the world for London Gateway

New London Gateway services are now available to and from the Far East in the wake of big changes in shipping alliances.

The recent changes are affecting the location and timing of many international shipments, one of the notable benefits however is that the London Gateway now has deep seas connections for the first time. The Alliance will be using London Gateway for two transatlantic loops and 2 Asia – Northern Europe.

Supreme customers looking to import their shipments to London and the surrounding area can take advantage of this.

Interested in London Gateway arrivals? Please contact our import team to discuss your requirements, we’d be happy to help.