emissions

The UK should include aviation and shipping in net zero emission goal

The aviation and shipping sectors should formally be included in Britain’s target to cut its greenhouse gas emissions to net zero by 2050, the government’s climate advisers said on Tuesday.

Britain earlier this year became the first G7 country to set a net zero emission target although the shipping and aviation sectors were not explicitly included in the goal.

Combined the two sectors account for around 5% of global greenhouse emissions but if left unchecked this is expected to grow significantly, particularly as passenger flying numbers increase.

“Now is the time to bring the UK’s international aviation and shipping emissions formally within the UK’s net-zero target. These are real emissions, requiring a credible plan to manage them to net-zero by 2050,” Chris Stark, chief executive of the Committee on Climate Change (CCC), said in an email.

The CCC said, in a letter to Britain’s transport minister, Grant Shapps on Tuesday, emissions from aviation could be reduced by around a fifth by 2050 by using sustainable biofuels, improving fuel efficiency and limiting demand growth to at most 25% above current levels.

It said zero-carbon aviation is unlikely to be feasible by 2050 and that greenhouse gas removal methods would be needed to offset remaining emissions.

The CCC said the government said could establish a market for scalable greenhouse gas removal solutions, such as bioenergy carbon capture and storage, which sees emissions from lower carbon biofuels captured and stored to prevent them going into the atmosphere.

In the shipping sector zero carbon or near zero carbon could be feasible by 2050 the CCC said, if there is a widespread adoption of cleaner and as yet mostly so far untried fuels such as hydrogen or ammonia.

The CCC advice came as several ports, banks, oil and shipping companies on Monday launched an initiative which aims to have ships and marine fuels with zero carbon emissions on the high seas by 2030.

The International Civil Aviation Organization has committed to a target of halving net emissions by 2050, compared to 2005 levels and is working on a Carbon Offsetting and Reduction Scheme for (CORSIA) which requires most airlines to limit emissions or offset them by buying credits from environmental projects.

The CCC, which is independent of the government, is chaired by former British environment secretary John Gummer and includes business and academic experts.

Source: Reuters.com

hapag lloyd

Global container fleet breaches 23m teu

A wave of ULCV deliveries this year has pushed the total containership fleet capacity over the 23m teu mark, with the last million slots added in a breath–taking 14 months, according to an Alphaliner report. 

However, the newbuilds, mostly consisting of ULCVs, have arrived at a time of softening demand growth across the major tradelanes of the world, which is already forcing carriers to blank a significant amount of headhaul voyages. 

In fact on Monday the 2M partners, Maersk and MSC advised that the “temporary suspension” of their AE2 / Swan Asia – North Europe loop would commence one week earlier than planned, with the final schedule sailing from Qingdao on 25 September also being cancelled. 

While the new ULCVs will in most cases immediately be deployed on the Asia – Europe tradelane the cascading impact of the incumbent tonnage being reassigned to secondary routes will have negative consequences on freight rates in those markets. 

Ocean carriers received some 91,000 teu of newbuild tonnage in the last week alone, including two further MSC Gulsun-series 23,000 teu + vessels; the 21,230 teu Cosco Shipping Planet and the 20,240 teu Ever Globe.

According to the Alphaliner data, 826,000 teu of cellular capacity on some 108 vessels has been received by liner operators so far this year. 

However, in contrast the scrapping of older ships has stalled, with only 165,000 teu reported to have been sold for demolition to date, due to a strong charter market driven by the demand for substitute vessels to cover scrubber installations on the existing fleet. 

 “A strong charter market gives owners little incentive to recycle ships, and several vessels that were initially bound for the breaking yards are now being kept in active service,” said the consultant. 

Indeed, London shipbrokers Braemar ACM reported this week that there have been only three demolition sales in the past 30 days. 

“Some of the demand increase since June is related to vessel downtime for scrubber installations. A total of 44 ships with an overall capacity of 465,000 teu are currently undergoing retrofit work at various shipyards,” said Alphaliner. 

However, this artificial charter market demand, caused by the looming IMO 2020 0.5% sulphur cap regulations on marine bunkers, is masking the weakening fundamentals of global trade. 

Earlier in the week, shipping association Bimco reiterated its expectation for containership scrapping at some 200,000 teu for the full year but warned that the “fundamental balance of the container shipping market will worsen this year”. 

Alphaliner said that it expected that the low scrapping rate would “persist for the remainder of the year” and as a consequence has lowered its recycling forecast to less than 250,000 teu from its previous estimate of 350,000 teu. 

Source: Alphaliner / The Loadstar

future of shipping

Scrubbers integral for IMO 2020 compliance

Scrubbers will be vital to ensure compliance to the International Maritime Organization’s low sulfur mandate despite facing skepticism from some quarters about their limitations, delegates said at an industry event this week.

By January, 1, 2020, when the IMO 2020 rule is implemented, S&P Global Platts Analytics predicts around 2,400 scrubbers to be operational worldwide. This figure is expected to ramp up to over 3,500 by the end of 2020, with more upside potential post 2020, Platts Analytics said.

Close to 70% of the VLCCs under construction and around a fourth of the overall global fleet of this category are expected to have scrubbers, according to shipping industry estimates.

Exhaust gas cleaning systems, or scrubbers, are an alternative method of compliance and ever since MARPOL Annex VI came out in 1997, regulation 4 has allowed alternative methods of compliance, Ian Adams, executive director Clean Shipping Alliance (CSA) 2020 said Wednesday at the 35th annual Asia Pacific Petroleum Conference in Singapore.

“We’ve (the industry) been using scrubbers since 2006 … so, we’ve got a lot of knowledge,” Adams said.

Scrubbers can help remove up to 99% sulfur dioxides, up to 94% of particulate matter, up to 60% of black carbon, and significant amounts of polyaromatic hydrocarbons, or PAH.

A recent study by Norway’s SINTEF, one of Europe’s largest independent research organizations, showed that the continued use of residual fuels with a scrubber can help towards global CO2 reduction.

The science behind EGCS is “absolutely sound,” Adams said.

Danish refined oil products tanker group Torm is set to use scrubbers as part of its IMO 2020 compliance strategy.

“In Torm, we don’t believe in a one-solution-fits-all approach,” Jesper Jensen, head of the technical division at the company, said, adding that Torm aims to retrofit 34 ships with scrubbers while about 48 ships will use compliant fuels.

Retrofit installations are usually more complicated than installing scrubbers on newbuildings while installation costs are creeping up at the shipyard as their capacity runs out, he said.

“Still, in my opinion it is quite an attractive solution to install scrubbers by retrofits on ships of certain types,” Jensen said.

Torm, for its part, has already inked a joint venture with ME Production, a leading scrubber manufacturer, and Guangzhou Shipyard International, part of the China State Shipbuilding Corporation Group, to provide it the flexibility to make timely decisions on retrofit installations.

Maersk, too, sees scrubbers as a part of its IMO 2020 strategy.

“We as Maersk have been pretty clear for [about] two years now on our view that the industrial logic for the best place to remove sulfur is onshore a refinery, and not onboard a ship,” Savvas Manousos, global head of trading at Maersk Oil Trading, said Monday.

“Having said that, we have installed a number [of scrubbers] on our own ships, partly as a following tactic to our competitors because others have chosen [them] and therefore we were obliged to follow to an extent,” he said.

Ultimately, some shipowners are going to take a wait-and-see approach and see what happens to the price spread, he said.

“As for owners, from our discussion, most of them are still installing open loop scrubbers on their ships based on the economics of fuel consumption at sea, and also on the price differential,” Goh Chung Hun, director (shipping), Maritime and Port Authority of Singapore said Monday.

This is despite Singapore’s announcement last year to ban the use of wash water discharge from open loop scrubbers from January 1, 2020, in its port waters.

“There is a marked preference for installing scrubbers in new rather than existing ships, and in bigger instead of smaller ships,” an executive said.

While the scrubber manufacturers are making a very strong pitch to highlight their benefits, not all shipowners are convinced or opting for them.

There are several tankers’ owners such as Ardmore Shipping and Euronav which have stayed away from installations, at least for the time being.

Euronav in early September said it had purchased VLSFO at a premium of only $47/mt to the bunker price for heavy fuel oil 3.5% sulfur content over the same procurement period, making VLSFO economics viable.

Still, Euronav said it did not dismiss scrubbers completely and continued to assess the potential retrofitting of part of its fleet with them.

“Owners do not want to put all their eggs in one basket as none is sure about the differential between low and high sulfur marine fuels” early next year, said an executive with another tankers company.”

Source: Hellenic Shipping News

Maersk and MSC to suspend AE2 Asia-North Europe loop for the second time

Alliance partners Maersk and MSC are to “temporarily suspend” their AE2/Swan Asia-North Europe loop from the end of the month until mid-November, removing up to 20,000 teu a week from the trade.

Weakening demand and plummeting freight rates have so far obliged Asia-North Europe carriers to blank two-thirds more sailings than during the same period of last year, and now the 2M alliance is to suspend the loop for the second consecutive year.

Moreover, Maersk said it would also “balance its network to match reduced market demand for the upcoming [Chinese factory shutdown] Golden Week” and withdraw its AE7, MSC’s Condor, headhaul string in week 41, thus removing around another 17,000 teu of capacity from the market that week.

MSC said the AE2/Swan suspension would “help us to match capacity with the expected weaker demand for shipping services”, and in a customer advisory, Maersk said the  service would resume “in line with demand pickup”, suggesting that the suspension could be extended if demand on the route continued to be soft.

The 2M adopted a similar strategy last year, suspending the AE2/Swan from September to December, rather than using the blanked voyage tool favoured by the Ocean and THE alliances. It  said mothballing loops was “a better option for shippers”.

However last year rival carriers took commercial advantage of the service suspension. Indeed, one rival carrier source told The Loadstar the 2M suspension was the “best news we have had in a long time”.

This year, according to Alphaliner data, a total of 42 Asia-North Europe headhaul sailings were blanked in the first three quarters, compared with just 16  in the first nine months of 2018.

Also, at the end of last month, HMM terminated its AEX service, which it operated separately to its slot charter arrangement with the 2M. This removed some 4,800 teu of weekly capacity from the trade, albeit that the South Korean carrier replaced its ‘independent’ service with a slot charter deal with THE Alliance ahead of it joining the vessel sharing group as a full member in April next year.

Until now, the 2M partners have not voided any sailings, despite the peak season proving to be a damp squib and spot rates having slumped to $757 per teu as of last week, according to the reading of the Shanghai Containerized Freight Index (SCFI) – a startling 19% below the level of a year ago and an alarming 24% drop from early January.

The planned six-week suspension of the AE2/Swan loop will see 12 17,800-20,500 teu vessels idled.

Source: The Loadstar

MSC Gulson

MSC unveils its newest box ship MSC Gulson

MSC has revised the official capacity of its new ULCV, MSC Gulsun, by an additional 805 teu, to 23,765 teu, making it more than 2,000 teu larger than the biggest ships operated by its competitors.

The liner said the new class of vessel had “been designed with a wide range of environmental, efficiency, stability and safety matters in mind”.

The MSC Gulson, it claims, features a “remarkable approach to energy efficiency” via bow design and minimised wind resistance.

Part of a series of eleven vessels, it is one of six being built by Samsung Heavy Industries (SHI) in South Korea, with the other five constructed at compatriot Daewoo Shipbuilding & Marine Engineering, the MSC Gulsuncompleted its maiden voyage from Asia to North Europe this week.

Although the same length as the 21,413 teu OOCL Hong Kong-series of ULCVs, at 399 metres, the scrubber-fitted MSC Gulson has a beam 2.7 metres wider, at 61.5 metres, enabling an extra row of containers and making 24 rows across the weather deck.

With an optimum load of light medium and heavy boxes, the MSC Gulson would need to be stowed 13 containers high on deck to achieve the 23,765 teu intake, but this is unlikely unless the vessel is topped up with empty containers for repatriation on the backhaul Asia-North Europe service.

Moreover, the extra row across its beam will exceed the outreach capabilities at some ports on its rotation. Indeed, Alphaliner noted that at the MSC Gulson’s first call, at Bremerhaven earlier in the week, the containers to be discharged at the German port were stowed only 23 across, due to the restricted reach of the terminal’s shore cranes.

There are now around 50 ULCVs of 20,000 teu or more operated by ocean carriers, all of which are deployed on Asia-North Europe, with new deliveries expected to double that number by the end of next year. South Korean carrier HMM, which will join THE Alliance next April, has an orderbook of twelve 23,000 teu scrubber-fitted vessels and Taiwanese Evergreen has just disclosed its intention to order up to eleven 23,000 teu newbuilds.

Both carriers have, like MSC, opted for scrubbers to be fitted on the new vessels to enable the continued burning of HFO (heavy fuel oil) after IMO 2020. Depending on the premium payable for low-sulphur compliant fuel after 1 January, it has been calculated that scrubbers could potentially save container lines using the exhaust gas cleaning technology some $2m per Asia-North Europe roundtrip voyage.

Source: The Loadstar

Image from NewsVideo.SU

one belt one road

RZD expands China-Europe rail freight services with new routes

RZD have begun a new container service, with a new connection between China and Germany.

Connecting Yantai and Duisburg, the service initially will operate on a limited schedule, but RZD chief executive Vyacheslav Valentik expects it to become regular by the start of Q4.

“Our cooperation with Yantai station is developing rapidly – just a month ago we launched a service to Moscow, and today we present a transit route to Germany,” he said.

“There is no doubting its successful development… Shandong ranks third in the GDP ranking of provinces in China. It is an industrial region with a high level of production and consumption, which gives us a good chance to work out the issue of reverse loading of transit trains.”

The inaugural service arrived in the German city, after a 19-day transit, on 14 August, carrying auto parts, electrical components and household products.

The carrier said the service was available to a “wide range” of shippers, with further new routes due this month: “The service will be launched on the new route from Jinan City, Shandong Province to Budapest,” it said.

“Now, RZD Logistics has container trains from various cities of the Shandong province to Moscow, St. Petersburg, Perm, Minsk and Duisburg.”

The operator has undergone a rash of expansion in recent months, last month launching a service to ship boxes from Korea to Europe via the Trans-Siberian Railway.

The decision to run the new link followed a trial in June from South Korea’s container hub of Pusan to the Polish rail terminal at Brzeg Dolny.

“Rail delivery is faster than deepsea transport and we offer our clients in the republic of Korea the chance to assess the economical efficiency of the service,” said Mr Valentik. “And the more cargo transported by Trans-Siberian land bridge, the more affordable the service is.”

Also last month, RZD and subsidiary Far East Land Bridge rolled out a container route between Moscow and Yantai.

Sales director at RZD Olga Stepanova said: “We try to find solutions that will meet the needs of our customers. At Yantai it is convenient to consolidate cargo from all over Shandong province, one of the most industrialised in China.

“It is also successfully connected to the sea terminal, with which we also plan to group and ship to Russia and Europe from other countries in the Asia-Pacific region.”

Source: The Loadstar

red cross

Carriers to fine rogue shippers for misdeclared goods in containers

Carriers are cracking down on rogue shippers by threatening significant financial penalties for misdeclared shipments, following a series of vessel fires.

Evergreen was first out of the gates announcing fines, ranging from $4,000 to $35,000, for misdeclarations (see below), with Hapag-Lloyd and OOCL following suit.

Hapag-Lloyd, which suffered as misdeclared goods caused a high-profile fire aboard its vessel Yantian Express earlier this year, said it would impose a $15,000 fine per misdeclared box, and OOCL has announced enhanced checks and a hazardous cargo misdeclaration fee.

Hong Kong-headquartered OOCL said: “We are aware that there has been an increasing number of marine incidents being reported in 2019, many of which were suspected of being caused by potentially undeclared and/or misdeclared hazardous cargo.

“Any inconsistencies between the declared cargo in the documents and what is physically inside the container will result in a hazardous cargo misdeclaration fee.”

The fee payable will depend on the extent of any disparity, with containers potentially being pulled out of service and put on hold if penalties are applicable.

The carrier said it would also strengthen its inspection policy through additional verification prior to loading by selective or random inspections on DG and potential DG cargo.

“It is the responsibility of all stakeholders in the carriage of goods to ensure all hazardous cargo are properly declared and handled according to the IMDG regulations,” it added.

Between 5% and 10% of containership cargo is declared as dangerous goods, but the extent of misdeclaring of goods is impossible to tell.

Mr Storrs-Fox said: “A key element of the campaign is to identify levers – both sticks and carrots – that are available to improve a safety culture in the unitised supply chain, including considering unintended consequences inherent in trading arrangements or fiscal/security interventions and the possibilities presented by technological innovation.

“Penalising shippers where deficiencies are found should be applauded and government enforcement agencies are encouraged to take appropriate action under national or international regulations to deter poor practices further.”

Source: The Loadstar

One Manato

ONE reports first quarterly profit

Japanese carrier Ocean Network Express (ONE) has posted its first quarterly profit since the merger of the container businesses of K Line, MOL and NYK on 1 April last year.

ONE recorded a net profit of $5m in the first quarter of its fiscal year, which ends 31 March 2020, and has upgraded its outlook to a full-year profit of $90m.

The carrier said it had achieved profitability “at a higher pace than estimated”, after taking action to reverse the $586m loss incurred in its first year.

NYK, a 38% equity holder in ONE, said that, “as a whole, the business performance greatly improved”, while 31% shareholder MOL said profitability had been achieved as a result of “the optimisation of cargo portfolio and cost reduction”.

K Line, which also owns 31%, said “freight rate increases” in long-term contracts for the US had contributed to the positive result.

ONE revenue soared 39% in Q1, compared with the same period of 2018, to reach $2.1bn, mainly attributed to a substantial improvement in liftings and vessel allocation load factors.

Utilisation levels on the two major headhaul tradelanes, Asia-US and Asia-Europe, which had both plunged to only 73% in Q1 18, recovered to reach peaks of 95% and 92% respectively in the third quarter. The botched launch of ONE resulted in a significant loss of business in the first two quarters with an estimated $400m negative impact on the bottom line.

Notwithstanding the stabilised liftings reported today, ONE also cited improvements in its cost reduction programme, product rationalisation and reduced spending on port agency and IT costs as all contributing to the turnaround.

It also said freight rates had “improved” in the US, South America and Asia, but had “deteriorated” in Europe. Specifically, ONE said Asia-US headhaul long-term contracts had improved after an earlier assumption that they would be “concluded at the same level”.

However, the Asia-Europe westbound freight market “hovered at the same low level as last year, because supply grew faster than demand”, it said, but added that demand on the route had still been “relatively strong”.

ONE is forecasting a $123m profit in Q2, but a $38m loss in Q3, to give a revised 12-month result of a $90m net profit, up from its previous $85m prediction.

The average price paid for bunker fuel in Q1 was $432 per tonne and ONE expects to pay the same amount for fuel in its second quarter, while its equation for the next six months includes a bunker price of $533 per tonne, which is around $150 higher than the current market price.

ONE is no doubt allowing for the extra cost of the low-sulphur fuel it will need to replenish the tanks of its ships before the IMO’s 0.5% sulphur cap comes into force on 1 January.

Nevertheless, the carrier said, it had “fully explained the issue to our customers” and had already reached agreement with its long-term contracts for recovery via its new bunker surcharge mechanism.

According to Alphaliner data, ONE is the sixth-largest global container carrier, with a total capacity of 1,565,000 teu on a fleet of 215 vessels, 74 of which are owned and 141 chartered-in. It has no new ships on order.

Source: The Loadstar

maersk halifax

Maersk Honam rebuilt and renamed after fire

Seventeen months after a devastating fire which resulted in the loss of 5 lives, Maersk is set to send the 15,282 teu boxship Maersk Honam back on active duty.

The owner decided to reuse the stern section in a new ship, to be constructed at a South Korean shipyard. The damaged bow section and the accommodations block were removed at Dubai Drydocks for scrapping. The stern section was taken from Jebel Ali to Geoje aboard a semi-submersible ship.

She retains the same IMO number, but she now carries a new name – Maersk Halifax

Source: Splash 247 / Maritime Executive

Southampton freight terminal expansion

Independent Container Line moves UK call from Liverpool to Southampton

Niche transatlantic carrier Independent Container Line (ICL) is to move its UK call from Liverpool to Southampton to improve schedule reliability.

The US-headquartered, privately-owned shipping line has been serving Liverpool for the past 20 years, calling at the Mersey port along with Antwerp in a two-port North European hub strategy.

However, ICL claims deteriorating weather conditions in the North Atlantic have delayed its fleet of 2,500-3,000 teu ships and compelled the carrier to switch its UK call to a southern port.

“Each winter is bringing more weather challenges in the North Atlantic and keeping schedule becomes more difficult. This change will allow us to get back to 100% reliability year-round, which is a core pillar of our service offering,” it said.

The weekly call at Southampton will shift to a Thursday pm arrival for a Friday am departure, with the first ICL vessel at the DP World Southampton facility the eastbound call of the geared 2,546 teu Independent Spirit on 25 July.

In the US, ICL calls at the privately-owned Penn Terminal in Chester, Pennsylvania, and at Wilmington, North Carolina.

“We have planned and coordinated various intermodal options that will allow your cargo to be picked up and delivered,” said ICL in a customer advisory, adding that its representatives would “be in touch” to ensure a “seamless transition” to Southampton.

The advisory, signed by managing partners and founders John Kirkland and Dale Ross, said the line’s UK headquarters would remain in Liverpool.

The loss of one of its oldest customers is a blow to the port of Liverpool, which in April celebrated winning a new WEC Lines service to Portugal, making the Dutch carrier its fourth liner capture this year.

They included Cosco’s slot share on subsidiary OOCL’s transatlantic service in April and the big one – the 2M’s TA4 transatlantic loop, for which Maersk and MSC agreed a permanent switch from Felixstowe in early January.

ICL’s USP has been the service speed of its ships, which are capable of 22 knots, but if the carrier is still unable to keep to advertised schedules then it probably all comes down to price. With a high unit cost, compared with its rivals, it would have struggled to be competitive at Liverpool.

According to Alphaliner data, ICL, with a capacity of 11,291 teu on its four chartered-in ships, is the world’s 70th-largest carrier.

Source: The Loadstar