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Malaysia sends warships to Gulf of Aden

AS news comes in of two more hijackings by Somali pirates, of a French yacht and an Egyptian-flag merchant ship, which happened within the past two Malaysia says it is sending three warships to protect MISC vessels transiting the vital waterway.

The latest hijacking brings to nine the number of commercial vessels now being held to ransom by Somali pirates, as well as the yacht. The total number of merchant seamen now being held is around the 200 mark. Ransoms of well over US$1m per vessel are understood to have been demanded.

The Malaysian newspaper The Star reports that the country's deputy prime minister Najib Razak said that the warships will protect five MISC ships due to sail through the area. It is understood they will not attempt to intervene to release the two MISC chemical tankers, Bunga Melati Dua and Bunga Melati 5, that are being held close to the Somali coast.

RESEARCH and Innovation hold a key to reconciling sometimes competing goals of sustainable economic growth and environmental preservation in sea-based activities, according to Brussels' officials. The European Commission has announced it has adopted "A European Strategy for Marine and Maritime Research". The Strategy's objective is to “overcome fragmentation of the European marine and maritime research landscape by capacity building, increased integration across traditional research sectors and increased cooperation of all actors in this area”.

Endorsing the new European Strategy, the European Commissioner for Science and Research, Janez Potocnik said: "When it comes to major challenges such as reconciling maritime economic activities with the preservation of marine ecosystems, science and technology can play a major role. The Strategy for marine and maritime research should therefore be seen as one of pioneer actions for the implementation of the European Research Area, which promotes scientific excellence and development of cutting-edge innovations in Europe through better integration of existing research efforts and development of new capacities.”

European Commissioner for Maritime Affairs and Fisheries, Joe Borg said, "This strategy is an essential pillar of the EU Maritime Policy. It is indispensable to allow us to realise the full potential of sea-based activities in an environmentally sustainable manner."

CARNIVAL Corp subsidiary Holland America Line says it will spend US$200m to upgrade five of its vessels. The company says public areas and cabins on the Statendam, Ryndam, Maasdam, Veendam and Rotterdam are to have a major refurbishment.

No repair yard has been announced yet but the Veendam should begin its refit next spring the last of the five should be upgraded by late 2010.

The revamp will include a new swimming pool area and extensive redecorating of cabins. The latest announcement brings the total costs of HAL's ongoing fleet refurbishment to something in the region of $525m.

THE recent spike in piracy in the Gulf of Aden has thrown a spotlight on the shambolic state of the regime for paying war risk money, and associated increased benefits, to crews of open registry ships for transiting areas of high risk.

Anderimar Shipping News understands that crews sailing on ships covered by International Bargaining Forum (IBF) agreements with the International Transport Workers' Federation (ITF) do not get war risk bonuses for transiting the Gulf of Aden unless they enter Somali territorial waters. In theory seafarers on ITF agreements that have not been negotiated through the IBF should receive such payments as London underwriters have deemed the Gulf of Aden to be an area of warlike operations.

However ITF Maritime Coordinator Steve Cotton said: "We don't deny that the long standing structures for war risk payments have been rendered almost obsolete by the sheer number of conflict zones, spiralling piracy and by the breakthrough creation of the IBF. We need and intend to get this issue put in order and the inconsistencies ironed out. The first meeting on it between myself and the JNG [Joint Negotiating Group – part of the IBF framework] takes place next week."

Asked if that meant the ITF was not taking any steps to ensure that seafarers entitled to war pay actually received the bonus an ITF spokesperson added: "However, although we hope, following debate, to bring the overall system up to date the existing ones still hold and will be enforced. If anyone feels that they are not receiving the bonuses they should we invite them to let us know and we will investigate robustly."

US-based Seafarers’ International Union endorsed the Democratic Party's candidate, Barack Obama in the country's presidential elections. In return Obama has pledged to keep maritime services out of international trade deals

SIU President Michael Sacco said: “The SIU is proud to endorse the candidacy of Senator Barack Obama for President of the United States. The union made the decision based on the candidates’ positions on matters that directly affect SIU members.”

Mr Obama stated: “It is an honour to have the endorsement of the SIU and its members. America needs a strong and vibrant US flag merchant marine. That is why you and your members can continue to count on me to support the Jones Act (which also includes the Passenger Vessel Services Act) and the continued exclusion of maritime services in international trade agreements. American merchant mariners have always answered the nation’s call from the first days of the Revolutionary War to today. In peace and in war, our mariners have stood with us and my administration will stand with them.”

He continued: “Those programmes set a firm foundation for America’s merchant mariners by providing opportunities for decent wages, good benefits and fair treatment. Certainly, a strong union movement has been and will continue to be a major contributor to the achievement of this essential national goal. I am proud to stand with and for you and your members. I consider the SIU endorsement a significant statement about what we can do, working together, for change and progress that improves the quality of life for working families.”

BELGIAN gas carrier owner Exmar says that it has sold its 25,000 cu m fully refrigerated LPG/NH3 vessel Carli Bay to ABG Sundal Collier for a net sale price of US$49.5m. Exmar says that the vessel will be delivered to the new owners during the middle of October following drydock in Europe. The Carli Bay was built by Japan's MHI in 1998.

According to the company it will realise a capital gain of about US$20m and generate a cash surplus of US$35.3m. The company operates both LPG and LNG fleets.

THE administrator of the Philippine's Maritime Industry Authority (Marina), Vicente Suazo, the country's top maritime official has resigned unexpectedly, saying he wishes to move to the private sector. Transportation Under-secretary for Maritime Affairs Elena Bautista has taken over as officer-in-charge of the agency.

Singapore Business Times reports that while Mr Suazo indicated that he had filed his resignation as early as the first week of August, the timing of his departure has raised eyebrows as it comes in the middle of the agency's investigation of the sinking of the passenger ferry, Princess of the Stars, in which at least 700 persons were killed when it sank during a heavy storm on June 21.

Marina, which has the power to stop the operations of local ship owners and operators, is set to wind up its probe on the sea tragedy this week and is expected to come up with a decision on the possible suspension of the franchise of Sulpicio Lines, owner and operator of the Princess of the Stars.

Business Times nots however that suspending the franchise of Sulpicio Lines is easier said than done. Sulpicio Lines is one the Philippine's largest domestic passenger and cargo operators, accounting for a third of the passengers and cargo carried at sea. Abruptly suspending its operations would have severe consequences on the economy where 70 per cent of domestic trade is carried by ships.

INTERNATIONAL Maritime Bureau director Pottengal Mukundan has called for warships of navies operating in the Gulf of Aden to take a much more interventionist role against pirates operating from bases in Somalia. He was speaking against the background of a surge in hijackings of large merchant ships, including a 55,000 dwt bulker and two 30,000 dwt tankers owned by MISC. The Malaysian-based company has now stopped its vessels from sailing into the region until they can be better safeguarded.

Capt Mukundan told Anderimar Shipping News: "The response has to rely upon the available assets to deal with this problem. The government of Somalia cannot deal with it. The neighbouring states don't have the the resources needed which only leaves the Coalition naval units that can do something about this problem. We know these naval vessels are doing their best given the limited resources they have against their military priorities.

“However in this highly trade-dependent world we feel governments should give a higher priority to their naval forces to protect major trade routes. The Gulf of Aden is a vital international trade route and it is intolerable for it to be disrupted by pirates in this way.

“The Kuala Lumpur-based IMB Piracy Reporting Centre receives many calls about attempted attacks and passes the information of to the naval commands in the area. These reports provide important intelligence relating to the location of the pirate mother ships. It would be extremely useful if naval vessels could deploy to these locations and interrogate and board potential mother ships. If large amounts of weapons are found these should be confiscated. The idea is to disrupt the operations of the pirates before they hijack vessels."

AS happened three years ago when Hurricanes Katrina and Rita brought a huge human and property disaster, hurricanes are in the news again just before the International Union of Marine Insurance holds its annual conference.

IUMI president Deirdre Littlefield said in New York today: “Fortunately, Hurricane Gustav did not turn as vicious as predicted, but still left a trail of destruction across the southern Caribbean and where it made landfall in the United States.”

She added: “All marine insurance markets are struggling with a whole raft of problems: reducing premium income and aggravated competition as both seaborne trade and freight rates continue to slide; dramatic reductions in company and syndicate profits and significant deflation of the investment income cushion; newbuild orders being cancelled or delayed as talk grows of ships being laid up; continuing adverse casualty experience despite a welcome slowing of total losses; and the growing shortage of experienced mariners to crew ever more complex ships.

However, the IUMI president also warned that, with another three months of the hurricane season left, further threats loom. “Hurricane Hanna is developing and could hit the Bahamas and the eastern part of the US, and more storms are said to be queuing up in the Atlantic’s Hurricane Alley,” she said.

PRIVATELY-owned US shipping company Liberty Shipping Group has made an offer for the outstanding shares of International Shipholding Corporation which runs a diverse fleet of 28 vessels and 720 barges. Liberty says it proposes to acquire all of the outstanding shares of International Shipholding common stock for $25.75 per share in cash. A statement says: “Liberty’s all-cash proposal represents a 27% premium over the closing price of International Shipholding on August 29, 2008, the last trading day prior to public disclosure of Liberty’s proposal. “

Liberty's president and CEO,Philip Shapiro says.“We believe a combination of Liberty and International Shipholding is compelling and delivers significant value to the International Shipholding stockholders. We are confident that combining our two companies would create a stronger and more competitive entity that is better positioned for future growth. We look forward to working with International Shipholding to consummate a transaction quickly.”

Liberty Shipping Group owns and operates six US-flag dry bulk vessels and also operates a 2005-built Pure Car Truck Carrier (PCTC), which is enrolled in the US government’s Maritime Security Program, through Liberty Global Logistics LLC, its logistics subsidiary. It also has two PCTC’s on order in Korea for delivery in 2009 and 2010.

FOLLOWING the hijackings two of its chemical tankers, the Bunga Melati Dua and Bunga Melati 5 and the spike of pirate attacks off the coast of Somalia, Malaysian shipowner MISC has stopped its ships entering the Gulf of Aden “until additional security measures by MISC are in place to enhance the safety of its vessels and crew.”

In a statement MISC says: “This move is in addition to the precautionary and preventive measures already in place for all of MISC’s vessels. In the case of Bunga Melati 5, such precautionary and preventive measures were carried out and despite this, Bunga Melati 5 was nevertheless overcome by pirates. The vessel was sailing in international waters bordering the coast of Yemen and at the advice of the coalition forces, Bunga Melati 5 kept within the vicinity of the designated security corridor.”

The statement adds that negotiations are ongoing for the safe release of the crew of the Bunga Melati Dua. A further statement today says: “First communication with MT Bunga Melati 5 was established today, 2 September 2008. The master of MT Bunga Melati 5 confirmed that all crew members are safe and are being treated well. We have also been informed that all Muslim crew onboard the hijacked vessel are allowed to practice their religious duties during the holy month of Ramadan.

MISC's president & CEO Dato’ Shamsul Azhar Abbas said that the safety of the crew remains the first and immediate priority of the Company. MISC stressed that the crews' family members had been briefed and they had expressed concern over “the speculations and adverse reports by the media and have requested for the media to refrain from doing so”.

NORWEGIAN-based owner Belships' says its Q2 operating income US$25.7m against $13.4m in the same period last year operating profit was US$4.9m compared to 2.8m. A statement says: “This increase in operating profit is related to Elkem Chartering's handysize operations, which also contributed a positive profit development.”

Half-year profit after tax was $8.3, down from last year's half-year figure of $9.9m which was boosted by a gain of $6.5m for a charter party termination.

The company notes that the rates for dry bulkers reached historic top levels in Q2. It says: “The build-up of stocks, particularly in China, combined with the accumulation of ships in ports of loading and discharging was the main reason for this increase in rates. Towards the end of the quarter, the market fell back somewhat. The handysize operations of Elkem Chartering (EC) achieved good results, not least thanks to good capacity utilisation of the fleet in relation to the freight portfolio.”

Looking ahead the company notes: “For the first time in 3 years, the dry bulk market entered into a quieter period during the summer. This development may possibly have been caused by suspended industrial activity in China in connection with the Olympic Games. Most market observers expect a new squeeze in the fourth quarter. In Elkem Chartering, it seems that the good results from handysize operations will continue in the present quarter. A vessel on a long-time charter will be returned to the owner earlier than originally agreed and Elkem Chartering will in return receive a compensation of just over $7m (Belships' share $3.5m). This amount will be taken to income in the 3rd quarter. The M/S Belisland will be offhire for approximately one week in connection with periodic dry-docking in the 3rd quarter. The other vessels are expected to continue without any interruptions, thereby producing a contribution on a par with that of the 2nd quarter.”

CHANNEL Islands-registered, New York-listed tanker operator DHT Maritime reports Q2 revenues of US$27.8m, compared to $20.7m in Q2, 2007, and net income of $10.3m. Until June the company was know as Double Hull Tankers but has changed the name as most tankers in the world fleet are now double-hulled.

The company says: “The second quarter of 2008 benefited from the surge in the freight market that started at the end of 2007 and has continued through first and second quarter. This is primarily a result of strong Far East demand and ample supply of OPEC oil increasing the demand for long haul transportation of crude oil. The demand for oil import to China and the industrialization of the developing economies of the Far East continue to be the key drivers for the growth in tanker demand.”

It adds that market fundamentals for transportation of crude oil “remain solid”. According to DHT, “the recent fall in the oil price is perceived good for the world economies and is expected to encourage further consumption”. Combined with low inventories and high OPEC production this bodes well, DHT believes, for a continued strong demand for oil transportation by sea.

DHT says: “A balanced tanker demand and supply is keeping freight rates at reasonable levels. The market appear to be positively affected by supply factors such as slow down in speed and port delays increasing the length of voyages and ton/mile demand. In addition, there is the increased commercial obsolescence, scrapping and banning of single hull tankers in advance of the mandatory phase out commencing in 2010. Tankers with a double hull design continue to trade at a premium rate to single hull tankers and the difference appears to be widening. Additionally, tankers of double hull design experience shorter waiting time between cargoes.”

RUSSIAN-based owner Novoship has achieved OHSAS 18001 certification covering employee safety and environmental protection. Previously, Novoship has been certified to the international management and environmental standards.

DNV Russia started the certification projects back in 2003, while the final certificate was handed over at an event held at the DNV head office in Høvik on August 28th.

“It has been interesting to follow Novoship on its way towards these targets. I’m impressed by its focus and improvements, and I’m sure the process will continue. A certificate is not a final target, it is a document showing the ongoing and continuous improvements,” said Tor Svensen, COO of DNV Maritime, when handing over the certificate to Evgeny Kostyuk, President of Novoship.

The whole of Novoship’s integrated management system was finally certified in 2008 with the scope of international shipping – sea carriage of cargoes. The audit started in the Novorossiysk office in April 2008 with a focus on OHSAS 18001:2007 requirements. Six of the shipowner’s vessels were audited during the summer period - mainly in the ports of Rotterdam and Houston.

MALAYSIAN shipping company MISC says that another of its chemical/palm oil tankers, the Bunga Melati 5 has been hijacked by unknown pirates, at 2150 hours (Local Time) last Friday in international waters off the coast of Yemen.

The ship was sailing close to the designated security corridor. According to MISC statement the vessel attempted evasive manoeuvring before being overpowered by the hijackers. MISC says: “The coalition forces within the vicinity were alerted but were unable to prevent the hijacking as safety of the crew onboard is of priority.” The statement continues: “No further details of the incident are available at this point in time. All authorities have been notified accordingly and we are working closely to render the necessary assistance and support needed.”

The ship was fully laden with 30,000 tonnes of petrochemicals and was heading towards Singapore from Yanbu, Saudi Arabia. The ship has 36 Malaysian crew and 5 Filipino temporary maintenance crew.

The hijacking is the second of a MISC, following the 21 August seizure of the Bunga Melati Dua which is still being held by Somali pirates.

IN its half-year report Belgian gas carrier operator Exmar says that Q3 started on a firm tone for the VLGC fleet due to continued tight vessel availability but “caution remains on the general outlook in the light of 14 newbuildings being delivered prior year-end and the unpredictable availability of Middle Eastern spot volumes.

Exmar's MGC fleet is covered for about 75 % for the balance of the year and results are expected “to remain stable”. All the company's LNG vessels are covered on long-term employment and results for the second semester should show improvement with no planned repair periods due and the effect of the Explorer in full operation.

Half-year turnover was US$253.6m and operating cash flow (EBITDA) was $63,5m against $247.1 and $59m respectively in the same period last year.

TANKER owner-operator AET has ordered three 6,600 dwt oil/chemical tankers from Russia’s Okskaya Shipyard using BIMCO’s Newbuildcon standard newbuilding contract. The contract for the new tankers was signed on 28 August, with the vessels due for delivery between July and December 2009.

The order for the new tankers is aimed at expanding AET’s fleet capacity and extending the geographical coverage of its operations. Long-term employment for the vessels has already been secured.

Zurina Raja Abu Bakar, AET’s legal counsel responsible for orchestrating the deal, said: “Newbuildcon provides a solid contractual platform that facilitates the placement of newbuilding contracts for both shipowners and yards. It represents an excellent standard form suitable for global use.

AET is a wholly owned subsidiary of Malaysian-based MISC and operates 12 VLCCs, 49 aframax, one Panamax and 12 product tankers. It also has a fleet of lightering support vessels in the US Gulf.

THE AP Moller-Maersk shipbuilding subsidiary Odense Steel Shipyard (Lindø) says it has put Loksa Shipyard in Estonia up for sale as part of its continuing efficiency drive, .

Loksa Shipyard became part of the Odense Steel Shipyard Group in 1994 and is now one of the world’s leading manufacturers of hatch covers. It also produces steel structures and components.

Lindo says in a statement: “The ownership of Loksa Shipyard Ltd. will not be necessary for the expected future production at Lindø and a sale will give Lind the opportunity to focus fully on shipbuilding and enhancing productivity.”

“It is no secret that we are in a difficult situation. Therefore, we continue to work hard on strengthening the Yard’s productivity and competitiveness. Selling Loksa Shipyard will give us the opportunity to concentrate on shipbuilding at Lindø and develop our subsidiary shipyard Baltija Shipbuilding Yard in Lithuania that builds superstructures and steel blocks for Lindø,” says Lindø's MD Finn Buus Nielsen.

The Maersk group has made a bid for Swedish chemical and product tanker operator Brostrom worth US$569m. According to the Danish giant, over 55% of Brostrom's shareholders had agreed to accept the offer, as recommended by the company's board.

"The scale of the combined operation will enable us to offer a superior world wide service through a large, modern and homogeneous fleet. We need scale to ensure our organisation is cost effective and for customers to have easy access to chartering offices globally. Combining Maersk Tankers and Broström’s scale with skilled and dedicated employees will further enhance our competitive position and create the world’s leading product tanker company," said Maersk Tankers CEO Søren Skou.

"From a business point of view there is a good match between our two companies," said Brostrom CEO Lennart Simonsson. "In our evaluation of various partners to team up with in the consolidation process it is our view that Maersk Tankers is one of the best partners. Both companies have a long and strong heritage in the tanker market and our combined resources give us a platform to further develop from."

Taiwan's Evergreen Marine has reported a fall in second quarter net profits to NT$829m, down from NT$1.28bn in 2007, while first half profit was down from NT$1.63bn to NT$1.2bn. High fuel costs and a slowing market caused the drop, as well as a heavy loss from EVA Airways, in which Evergreen holds a 19% stake.