maersk

MSC, CMA CGM Present Plans for Fuel Surcharges

Following the footsteps of Maersk Line, the Swiss and French container shipping giants MSC and CMA CGM have unveiled their intention to introduce a new fuel adjustment surcharge ahead of the 2020 sulphur cap.

Mediterranean Shipping Company plans to introduce a new Global Fuel Surcharge as of January 1, 2019. The company expects its operating costs to increase significantly in preparation for the 2020 low-sulphur fuel regime.

MSC said that the cost of the various changes to the fleet and its fuel supply is in excess of USD 2 billion per year, the same as with Maersk Line.

“The new MSC Global Fuel Surcharge will replace existing bunker surcharge mechanisms and will reflect a combination of fuel prices at bunkering ports around the world and specific line costs such as transit times, fuel efficiency and other trade-related factors.”

Separately, CMA CGM informed that it decided to favor the use of 0.5% fuel oil for its fleet, and to invest significantly by using LNG to power some of its future container ships, and by ordering several scrubbers for its ships.

The company said that all these measures represent a major additional cost estimated, based on current conditions, at an average of 160 USD / TEU. The additional cost will be taken into account through the application or adjustment of fuel surcharges on a trade-by-trade basis, CMA CGM explained.

“The implementation of this new regulation, which represents a major environmental advance for our sector, will affect all players in the shipping industry. In line with its commitments, the group will comply with the regulation issued by the IMO as from 1 January 2020. In this context, we will inevitably have to review our sales policy regarding fuel surcharges,” Mathieu Friedberg, Senior Vice President Commercial Agencies Network, said.

The new International Maritime Organization (IMO) Low Sulphur Regulation will be effective from 1 January 2020 and will require all shipping companies to reduce their sulphur emissions by 85%.

Sulphur content in the fuel used for international shipping will have to be limited globally to 0.5%, compared with the current standard of 3.5%, in order to minimize the emissions.

However, Shippers have joined forwarders in condemning Maersk’s plan, pointing out that as the charge is per box, those shipping west with higher charges will end up paying for more collectively than they need to, to compensate for empties returning east. As  a result, the most profitable routes will enjoy higher-than-average surcharges.

In addition, Maersk is introducing the scheme a year before the higher fuel prices come in.

“Asking customers to contribute to new environmental costs is to be expected, but this charge lacks transparency; no data is available to let customers work out how the charge has been calculated,” said James Hookham, secretary general  of the Global Shippers’ Forum.

“Given historical experiences with surcharges, shippers are naturally suspicious over something shipping lines say is ‘fair, transparent and clear’.

“GSF will be taking this piece of financial engineering apart piece by piece, as we suspect this has more to do with rate restoration than environmental conservation.”

He added that Maersk could have chosen to fit scrubbers on all its ships, triggering a one-off expense, as some of its rivals are doing.

“For shippers, this is a better option than paying sulphur surcharges indefinitely.”

But he added that the unilateral manner in which Maersk introduced the change had also upset its customers.

“What also disappoints shippers is the lack of negotiation about the timing and the structure of the charge. It would have been better if Maersk had discussed its plans with individual customers in the course of confidential contract reviews, rather than just publishing something that wouldn’t be out of place in the puzzles section of your daily newspaper.

“We suspect that other shipping lines will be tempted to follow suit, but it would surely be of concern to competition authorities around the world if the same formula were to be used by other shipping lines, especially in the same Alliance.

“GSF would encourage Maersk to consult with customers and reconsider the strategy. These new charges may be all about low-sulphur fuel, but they still stink to us!”

Last week forwarders also revealed their anger over the “very major increases”.

“Rises of this magnitude are unjustified, and could be construed as blatant profiteering by shipping lines determined to exploit the situation,” said BIFA director general Robert Keen.

Source: The Loadstar / World Maritime News

low tariffs after brexit

A no deal Brexit could cause problems for haulage

As few as 1,224 UK hauliers could be eligible to transport goods to the EU if the country departs the union without a deal in place.

Logistics industry representatives say a UK-EU agreement on road transport must be prioritised over a trade deal.

Yesterday the UK government issued a series of technical notices outlining the situation in the event of a no-deal Brexit, which admitted that UK driving licences would no longer be valid on continental Europe’s road without an accompanying international driving permit (IDP).

The government said it was “seeking to negotiate a comprehensive agreement with the EU to cover the continued recognition and exchange of UK licences after exit”.

It added that if this approach failed it would pursue individual agreements with EU countries. However, it confirmed that EU licence holders would not be required to hold an IDP when operating in the UK.

Lorry drivers could be forced to obtain permits for the countries they visit, similar to those already used to drive in some states in the United States or Japan.

Despite reports that French Authorities may stop cross channel rail services as well as refuse UK aircraft permission to transit its air space, the Freight Transport Association said priority must be given to ensuring the haulage sector was able to continue operating.

Pauline Bastidon, head of European policy, said: “The UK’s logistics sector is the beating heart of the economy, and one on which most businesses rely for goods, services, raw materials and ingredients.  Without secure, safe and timely logistics movements between the UK and the EU, on which many schools, hospitals, shops and other businesses have come to rely, they will find it difficult to source goods in the short to medium term, while new trading arrangements are confirmed.

“That would create the very real risk of shortages and empty shelves.

“The priority now must be to secure a new UK-EU road transport agreement; an even more urgent priority than a trade deal.  Without permits there will be no trucks, and without them, no trade.”

She welcomed the proposal for a new UK-EU agreement on licences, but explained that even with this in place, the administrative burden on the industry would be enormous.

“These would still impose unwelcome burdens and cost on British hauliers seeking to acquire the necessary permits and there is no reassurance in the ‘No Deal’ papers that there would be sufficient to cover all transport moving to and fro across the UK’s borders.

“There is still a large amount to do to keep Britain trading efficiently with its biggest customer, the EU, and to suggest that these are processes which can be implemented swiftly would be to ignore the complexity of a huge administrative task now being placed on the UK’s freight industry.”

Far worse, however, would be a no-deal situation in which every UK haulier needed an IDP to operate in Europe, she said, given the lack of capacity on the part of UK authorities to issue the permits.

“The fact that the UK driving licence would only be accepted in partnership with an international driving permit would create delays and confusion for many operators, some of whom may not even be aware that they would require additional paperwork.

“Of real concern is that these permits would not be available to purchase at every post office, (the papers suggest 2,500 outlets, rather than the full network), and will not be on sale until 1 February, leaving operators little time to undertake the necessary administration ahead of Brexit day.

“At this point, we expect only 1,224 permits to be made available to UK hauliers every year if they wish to travel to the European Union. That number pales into insignificance when you consider that the port of Dover can handle up to 10,000 vehicle movements a day,” she said, adding that this could effectively break supply chains between the UK and Europe.

“Without a significant improvement in the planned number of accepted permits for HGVs travelling across the border, there is a very real threat to the integrity of the UK’s supply chain, and delays and product shortages could be a reality while alternative suppliers are sourced and arranged,” Ms Bastidon said.

Source: The Loadstar / The Independent

port of felixstowe

UK haulage crisis is tightening

Shippers are facing an anxious wait as the crisis in the UK haulage sector tightens its grip.

CMA CGM subsidiary ANL has announced a six-day delay on export collections due to a reduction in haulage availability, and HMM revising its policy.

ANL told customers the next available collection at major ports, including Felixstowe, London Gateway and Southampton, would be 17 September.

It said the reduction in haulage availability was linked to “continued issues” at Felixstowe, and rail engineering.

The delay also affects the UK ports of Immingham, Liverpool, Teesport and Tilbury, with one source noting that it was not only exports being affected.

“Clearly delays are being suffered on import collections, which apart from giving problems to the supply chain, will also increase costs linked to rent and demurrage,”

HMM has issued new rules on UK haulage, telling customers that, from 1 October, shippers must undertake all export collections and import deliveries at “their own risk”.

It blames UK haulage for the policy change.

The carrier said: “The UK road haulage market continues to face ongoing challenges as a result of road congestion, a general shortage of vehicle, driver and rail availability, plus increased cargo volumes.

“The problem is exacerbated by other external factors impacting haulage productivity such as port congestion and vessel diversions.

“Reliability and punctuality of all export collections and import deliveries has been impacted and these issues are likely to continue as many are ongoing or long-term rather than seasonal.”

Furthermore, the carrier said, it had reserved the right to be up to 90 minutes late, while still expecting any containers arriving within that period to be loaded or unloaded.

“We will give no consideration of extended free time or additional costs,” said the carrier. “Wasted journey costs will apply for any container arriving within this 90-minute period which is rejected for loading or unloading.”

To facilitate improved service and free up resource availability, HMM said it welcomed “any opportunities” to unload or deliver at night.

The issues surrounding haulage were leading to shippers being dealt a “double-whammy”.

“They are being hit twice, as not only are they not getting shipment, but they are also being charged for their goods being left quayside,” said the forwarder.

“And anyone who doubts there is an issue need only look at the number of new enquiries we have had, and how, predominantly, they have all been linked to haulage – this is a major issue.”

The forwarder said the problems, which started with Felixstowe’s failure to successfully migrate to its new IT system, were spreading. Many shipments destined for the UK’s largest box port have been rerouted to London Gateway and Southampton.

“You are seeing how Southampton is being more and more affected by issues because of all the rerouting that has occurred,” added the source.

“It is still possible to get containers delivered at short notice, but the hauliers are ramping up the prices, so they have the incentive.”

Source: The Loadstar

port of Southampton,

As peak season approaches so could crisis point

One forwarder told The Loadstar all UK ports had been affected by problems ranging from driver shortages and rail failures to issues arising from M&A activity.

Advance road bookings now require up to 10 days lead time.

“We are seeing failures on some 20% of the boxes we handle; that’s thousands of boxes, and from what we are hearing some of our competitors have it worse,” said the forwarder.

The port of Felixstowe has borne the brunt of the industry’s ire, thanks to the delays and congestion resulting from its efforts to integrate a new IT system. Last week, OOCL and CMA CGM announced they were withdrawing services and redirecting them to other UK gateways.

MSC has now announced it will divert its India/Pakistan-Europe IPAK service to London Gateway from next week.

“People are now actively avoiding Felixstowe, because of its IT issues, and redirecting services into regional ports,” the forwarder continued. “Liverpool generally does not experience any issues but even there we are seeing delays and backlogs.”

However, another forwarding source noted that while the port of Liverpool had experienced some issues, they had been relatively short-lived. He said “a few” larger ships had been diverted from southern ports into Liverpool, affecting operations for a “couple of days”.

He added: “Drivers were waiting up to eight hours to collect a container, but only in a certain area of the port – which did create some unrest.

“It didn’t take long to get back up to speed, with us collecting five to six containers per day, delivering to our warehouse, unloading and returning the empty with one driver.”

For the wider industry however, another forwarder told The Loadstar, the core issue was a lack of haulage – a view that appears to be supported by carriers demanding seven to 10 days advance booking. Those that fail to book this far in advance have been unable to get access to haulage space.

“If expectation for booking is 10 days, whereas previously the entire turnaround could be completed in three days, that tells you there isn’t the haulage capacity,” said the forwarder.

“This causes its own problems, with ‘pay and play’ taking effect and hauliers only working for the highest rates. Those unwilling to pay? Tough, the hauliers will find work elsewhere.”

Alongside the lack of available road haulage, the UK is also suffering from limited rail capacity, and with peak season approaching it is likely to get worse.

We request that you please contact us at your earliest convenience to secure your bookings.

The port of Southampton is at the moment experiencing delays which mean it can take 10-14 days to get an available space rather than the usual 2 or 3.  Planning in advance is of upmost importance.

Haulage capacity seems to have dropped quite significantly and this needs to be taken into account when planning for the next few months.

Please contact us for further information or if you require any help or assistance. We will keep you updated of any developments.

Source: The Loadstar

Beast from the East

We are now entering storm and typhoon season…

Typhoons and tropical storms have already hit Asia during July and August which have had a serious impact on port operations.

This in turn means that we may experience delays caused by the inclement weather.

The number of vessels arriving into port is likely to be disrupted with ports closing because of poor weather conditions.  Port closures will therefore lead to longer waiting times and delays.

We will keep you updated of any developments and if you have any questions or concerns please contact us at your earliest convenience.

wind propulsion

Wind propulsion technology testing begins

Norsepower, together with project partners Maersk Tankers, Energy Technologies Institute (ETI) and Shell Shipping & Maritime, today announced the installation of two Norsepower Rotor Sails onboard Maersk Pelican, a Maersk Tankers Long Range 2 (LR2) product tanker vessel.

The Rotor Sails are large, cylindrical mechanical sails that spin to create a pressure differential – called the Magnus effect – that propels the vessel forward. The Rotor Sails will provide auxiliary wind propulsion to the vessel, optimising fuel efficiency by reducing fuel consumption and associated emissions by an expected 7-10% on typical global shipping routes.

The Rotor Sails are the world’s largest at 30 metres tall by five metres in diameter and were installed on the product tanker vessel in the port of Rotterdam. The first voyage with the Rotor Sails installed will commence shortly.

“This project is breaking ground in the product tanker industry. While the industry has gone through decades of technological development, the use of wind propulsion technology onboard a product tanker vessel could take us to a new playing field. This new technology has the potential to help the industry be more cost-competitive as it moves cargoes around the world for customers and to reduce the environmental impact,” said Tommy Thomassen, Chief Technical Officer, Maersk Tankers.

The Rotor Sails have completed rigorous land testing, including thorough testing of various mechanical and performance criteria, and is the first Rotor Sails to be Class approved for use on a product tanker vessel. Extensive measurement and evaluation of the effectiveness of the Rotor Sails will now take place to test the long-term financial and technical viability of the technology. Independent experts from Lloyd’s Register’s (LR’s) Ship Performance team will acquire and analyse the performance data during the test phase to ensure an impartial assessment before technical and operational insights as well as performance studies are published.

Andrew Scott, Programme Manager HDV marine and offshore renewable energy, ETI explained: “We commissioned this project to provide a unique opportunity to demonstrate the untapped potential of Rotor Sails. Auxiliary wind propulsion is one of the few fuel-saving technologies that is expected to offer double-digit percentage improvements. The technology is projected to be particularly suitable for tankers and dry bulk carriers, and this test will assist in determining the further potential for Rotor Sails in the product tanker industry.”

Tuomas Riski, CEO, Norsepower, added: “We have great ambitions for our technology and its role in decarbonising the shipping industry. The installation of our largest ever Rotor Sails in partnership with these industry leading organisations shows that there is an appetite to apply new technologies.

“With this installation on the Maersk Pelican, there are now three vessels in daily commercial operation using Norsepower’s Rotor Sails. Each of these cases represents a very different vessel type and operational profile, demonstrating the widespread opportunity to harness the wind through Flettner rotors across the maritime industry.”

Dr Grahaeme Henderson, Vice-President, Shell Shipping & Maritime, concluded: “The shipping industry faces a major challenge in how it can economically ship the increasing amounts of goods and energy the world demands, whilst lowering its environmental impact. We see significant advantages in embracing, testing and driving innovative technologies that we believe show real promise in helping the shipping industry meet this challenge.”

Norsepower’s Rotor Sail solution is the first data-verified and commercially operational auxiliary wind propulsion technology available for the global maritime industry. When wind conditions are favourable the main engines can be throttled back, saving fuel and reducing emissions, while maintaining speed and voyage time. Each Norsepower Rotor Sail is made using lightweight composite sandwich materials, which ensure the Rotor Sail remains well-balanced and offers a hi-tech, low maintenance solution.

To view a video of the installation please go here

Source: Maersk Tankers