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Yemeni ship hijacked but France captures 19 suspected pirates

A SMALL Yemeni ship with a cargo of 2,000 tonnes of diesel has been hijacked by Somali pirates, according to local reports. Few other details are available and the ICC International Maritime Bureau (IMB) says it is aware of the reported hijacking on Saturday but has not yet been able to confirm the incident.

Meanwhile the French warship Jean de Vienne intervened on Sunday to stop the hijacking of two vessels, one Croatian- and the other Panamanian flag and captured 19 suspected Somali pirates in the process.

This is the second time in a week French naval forces have intervened successfully; eight suspects were captured last week when an attack on another Panamanian ship was foiled.

THOMAS Miller -managed insurer International Transport Intermediaries Club (ITIC) has advised shipbrokers against using the term ‘first-class charterers’ when conducting fixture negotiations, following a claim made by shipowners against one of its broker members in respect of the failure of charterers to perform a contracted fixture.

Writing in the latest issue of its Claims Review, ITIC explains, “Norwegian shipbrokers were involved in negotiations for a voyage charter. When entering the market, they described the charterers as ‘first-class’. It was also alleged that, during the negotiations, they made positive representations that the charterers had the money to perform the fixture. Ultimately, however, after the voyage had been fixed, the charterers did not perform the contract. The owners obtained an arbitration award but the charterers had no assets to satisfy it.

“The owners subsequently sued the shipbrokers, stating that they had been induced into the charter party because of misrepresentations made regarding the financial standing of the charterers. The claim totalled approximately US$3m.”

ITIC discourages the use of the expression ‘first-class charterers’. It says, “If, as is often the case, brokers do not wish to identify the charterers, it is better to use the more neutral term ‘private clients’ than anything that could imply a financial reference. In this case, although many of the representations were oral, lawyers advised that there was a real possibility that the broker could be held liable. Accordingly, a settlement was agreed at $650,000.”

THE president of Japanese shipping group Mitsui OSK Lines, Akimitsu Ashida, has warned in his New Year address to his company that the downturn in the shipping industry could last two years. However he stresses that there will be positive aspects to a recession.

He notes that when he became president in 2004 MOL's financial position was “rather fragile”. Thanks to the favourable shipping market continued until the middle of last year, MOL Group made about US$10 in aggregate profit during the past four and a half years. He says: “Now, our consolidated shareholders' equity has reached 750 billion yen (about US$7.5 billion) and the gearing ratio has been improved to 0.8 times.”

Noting the world economic climate has been changing drastically, he says: “ In the shipping market as well, although the dry bulk market may rebound to some extent, we need to be ready for the difficult time for about two years before the recovery of healthy market level.”

Mr Ashida counsels that this is a good time to remember a “wise saying” of Panasonic Group founder Konosuke Matsushita: "Boom is welcome. Recession is more welcome." Mr Ashida said: “This can be construed as follows: For the shipping industry, recession can be positively understood as a process to adjust current and future over-tonnage situation. And, for a respective company, recession makes its weakness apparent, which is invisible under normal circumstance, and leads to the next rapid progress if proper efforts rendered to overcome such weakness. Looking around the current circumstances, I realise that this is an exactly apt remark containing full of meaning.

He expanded: “Let me explain this a little further. It seems that there has been a series of news which sounds unfavourable for the shipping industry like that 'the rapid slowdown of world economy and the serious depression in the developed countries have a negative impact on the seaborne trade'. However, if we think calmly, the news is not all bad. Looking at demand and supply of tonnage, the over-tonnage anticipated in the near future may be prevented from happening, considering such news like that 'Chinese and Korean shipbuilding facilities which had been planning for rapid expansion are now squeezed by the financial crisis and credit crunch' and that 'many of the vessels on order have been and will be cancelled before their delivery'. If the market had dropped one or two years later, the massive volume of new vessels would have been delivered. It is not too much to say that this is an act of providence.”

“In addition,” he said, “the scrapping of aged vessels, which has been used longer than their original plan under that very strong market, will be accelerated due to the recent market deterioration. These movements will reasonably and favourably contribute to adjust demand and supply balance of world tonnage. What's more, we will have more possibility in reducing overall costs especially in maintenance and repairs, bunkers and lubricants, the price of which went up sharply due to the hike of material and crude oil prices for some years. We can also expect other issues such as shortage of seafarers and repair docks to be eased in line with the adjustment of shipping market.”

US domestic shipping company Horizon Lines, says it has been named as a defendant in a securities class action lawsuit in the Delaware District Court “purportedly on behalf of purchasers of the Company's common stock during the period from March 2, 2007 through April 25, 2008.”

Horizon says its Chief Executive Officer, as well as several former employees of the Company, were also named as defendants. It says: “The complaint alleges, among other things, that the Company made material misstatements and omissions in connection with alleged price-fixing in the Company's shipping business in Puerto Rico in violation of antitrust laws.”

The Horizon statement continues: “The Company is unable to predict the outcome of the lawsuit; however, the company believes that it has appropriate disclosure practices and intends to vigorously defend against the lawsuit.”

Horizon Lines runs a fleet of 21 US-flag containerships and and also five container terminals linking the continental US with Alaska, Hawaii, Guam, Micronesia and Puerto Rico.

TANKER operator Nordic American Tanker Shipping says it is buying a 1999-built, double-hull suezmax tanker for US$56.7m with delivery by 15 March. A statement says: “Management expects that the Company's quarterly dividend and earnings per share will be higher after the delivery of the vessel than had the purchase not taken place.” This acquisition will increase the Nordic's fleet to 15 double-hull Suezmax vessels, including two newbuildings, one to be delivered by the end of 2009 and the other by the end of April 2010.

The company says it currently has no net debt at this time and an unused credit line of $500 million. It says it expects to finance the latest acquisition from its own resources. Nordic says: “The vessel to be acquired was built in 1999 and was dry-docked in December 2008. The vessel has been controlled by one shipping group since it was delivered from the Samsung shipyard in 1999. After the acquisition, the company will own seven vessels built at this yard, facilitating further economies of scale and cost-efficient operations. The vessel is expected to be employed in the spot market.” As a matter of policy, Nordic does not predict future spot rates and is not involved in derivative contracts of any nature. The Company's Chairman and CEO, Herbjørn Hansson, said: "The acquisition of this high quality vessel will increase the dividend and earnings capacity of the Company and we expect this acquisition to be accretive. Further acquisitions are under planning. We are continuously working to enhance the Company's ability to pay quarterly dividends based upon the Company's dividend model which we expect will continue. The Company has now paid dividends for 45 consecutive quarters. We believe that our strong balance sheet, well defined and transparent operating model provide the Company with a solid competitive position going forward."

US-based mutual liability insurer American P&I Club says it has set its sights on a projected surplus of more than $40m, the largest in its history, by year-end 2008. However, because it takes time for the full impact of claims to be quantified, the precise figure will not be known until later.

The mutual, one of 13 members of the International Group of P&I Clubs, has told its members and the wider shipping community that this achievement should result from recent decisions to strengthen its accounts in years that remain open.

A surplus of the projected size would be very significantly in excess of the minimum required by the New York State Insurance Department, which would in this case be $7.5m. The figure has been conservatively calculated, said Joe Hughes, chairman and chief executive of the management company, Shipowners Claims Bureau Inc.

He added: “Above all, the club’s liquidity remains excellent, and its subscription to the International Group’s pooling and market reinsurance programme gives it unsurpassed reliability in the payment of claims of any size.”

In their most recent market presentation, in London, the managers provided much new material explaining the club’s recent decisions on supplementary calls and premium policy for 2009, and how it intended to add value to its members’ business in the tempestuous times ahead. Mr Hughes said: “The club’s robust industry position is underpinned by an international spread of entered tonnage representing a diverse and varied entry by reference to vessel type.” He said that its strategy had enabled it “to markedly outperform its competitors in pure underwriting terms in recent years.”

SOMALI pirates are widely reported to have hijacked an “Egyptian” cargo ship, the Blue Star, and its 28 crew on New Year's Day. No vessel matching this description appears on the Equasis database although a number of ships of that name appear under different flags. This latest seizure bring the number of ships being held off the Somali coast to 15.

There have also been a number of failed hijacking attempts in recent days including one on a Panamanian-flag tanker, the S Venus, which was thwarted by the French frigate Premier Maitre L'Her. Eight suspected pirates were captured and the French Navy subsequently handed them over to the authorities in the autonomous Somali province of Puntland.

"The Puntland regional government received eight pirates from the French navy, who intercepted them while they were attacking a commercial vessel," Puntland assistant minister for seaports Abdelkadir Musa Yusuf was quoted as saying. He added: "They will be charged for their crimes according to criminal law. This is the second time the French Navy has transferred captured pirates to Puntland," he said.

AN increase in annual port dues for bunker tankers over 16 years old operating in Singapore due to have been imposed yesterday has been put back to 31 December 2009.

A statement says: “In line with the Maritime and Port Authority's (MPA) continuous efforts to work with its partners to grow the bunkering industry, it is rolling out a measure that will benefit the operators of more than 100 bunker tankers.”

The increase was meant to discourage the operation of older bunker tankers due to their higher impact on the environment and lower operational efficiency.

"We hope this deferment will contribute towards helping the industry adjust to the changing business climate," said Capt M Segar, Group Director (Hub Port). "The bunkering industry is an important component of Singapore's maritime cluster, and integral to our growth as a premier hub port."

GENCO Shipping & Trading says it has fixed a capesize newbuilding at US$65,000 a day. The 170,500 dwt Genco Hadrian the sixth of nine capesize vessels is is buying from companies within the Metrostar Management Corporation group. The additional three vessels will take Genco's fleet to 35 dry bulk carriers comprising nine capesize, eight panamax, four supramax, six handymax and eight handysize vessels, with an aggregate carrying capacity of nearly 3m dwt.

Genco says the Genco Hadrian has been chartered to Cargill International, for 46 to 62 months at a gross rate of $65,000 per day, less a 5% third party brokerage commission. The charter, which is due to expire between October 2012 and February 2014, also includes a 50% index-based profit sharing component.

Genco says it has drawn upon its 10-year, $1.4bn revolving credit facility to finance the remaining balance for the Genco Hadrian of $96.8m. The Company expects the delivery of three additional newbuilding vessels by the end of 2009 and intends to utilize the undrawn portion of its credit facility as well as cash flow from operations to fund these acquisitions.

THE German frigate Karlsruhe was in action on Christmas Day in the Gulf of Aden, stopping a pirate attack on an Egyptian bulk carrier according to the London-based International Maritime Bureau (IMB). Noel Choong, chief of the IMB's Kuala Lumpur-based Piracy Reporting Centre is reported as saying: "The pirates were randomly firing at the ship, resulting in one of the crew members sustaining injuries to his leg."

The Karlsruhe sent a helicopter to the scene and the pirates fled as the chopper. The injured seafarer received medical treatment on the warship.

Mr Choong said: "Despite increased naval patrols, pirates are continuing to attack ships because the warships cannot be everywhere at the same time. But we are pleased with the quick assistance by the coalition force."

Meanwhile Andrew Mwangura of the Seafarers Assistance Programme, says that Somali pirates have released a Yemeni fishing dhow seized earlier this month in the Gulf of Aden. Kenyan-based Mr Mwangura says the Fallujah was captured on 10 December at the same time as another Yemeni fishing vessel the Kana, which has not yet been released.

A Voice of America journalist reported has filed reports from Hobyo in the Galmudug region of central Somalia which indicate that ransom money is not being diverted directly to Islamic terrorist or rebel groups, despite some media reports to that effect and that the main Islamic militia, Shabab, is clamping down on pirates. Hobyo, which has been a pirate stronghold is now under Shabab's control. Also, contrary to some reports, Alisha Ryu found that local people did not support the pirates at Hobyo and that virtually none of the ransom money was being used to their improve living conditions or benefit the local community. The growing strength of Islamic groups in the coastal area may, she says, be tied to local anger over piracy and deepening poverty.

Ms Ryu also reports that the Shabab Islamic militia which is doing much of the fighting against the central government and is is control of large areas of southern and central Somalia is strongly opposed to piracy. It fought a pitched battle with the pirates who have been operating out of Hobyo on 22 December and took control of the town.

The VOA reporter quotes a pirate as saying that all pirates in central Somalia are under severe pressure from Islamists to disband. He says that, in recent months, pirates trying to go ashore in any area controlled by the Islamists have been threatened and chased away. She says that Somali sources tell VOA that the Islamists' tough stance against piracy has prompted many poor people in coastal communities to quietly begin supporting the return of Islamist rule.

Ms Ryu notes in one of her reports: “While the loss of Hobyo to the Shabab has dealt a clear blow to piracy, it raises another troubling question, especially for the United States and its western allies. They must now decide which, pirates or militant Islamists, pose a greater threat to global security and economy.”

THE laden 126,538 cu m LNG carrier Suez Matthew broke down off Boston just before midnight on Saturday. It lost main engine power for about only an hour but reports says its was nine hours before the ship had tested its propulsion system and started to proceed to an anchorage in Broad Sound, accompanied by the US Coast Guard Cutter Jefferson Island and two commercial tugs. The Norwegian-ship, built in 1979 and originally part of the El Paso fleet, is owned by Tractebel LNG Trading and operated by Höegh LNG. The Equasis database shows that the vessel has been inspected by the US Coast guard a remarkable number of times, with 15 noted in 2008, but there are only a few deficiencies noted and the ship has never been detained.

The latest incident is the second similar one this year. In February the LNG carrier Catalunya Spirit broke down and had to be towed to a safe anchorage for engine repairs.

AN ExxonMobil Corporation subsidiary has been charged with violating the criminal provisions of the Clean Water Act in connection with a 2006 spill of about 15,000 gallons of diesel oil into the Mystic River from ExxonMobil’s oil terminal in Everett, Mass.

ExxonMobil Pipeline Company has signed a plea agreement in which it will pay a total monetary payment of more than US$6.1 million and agree to have the Everett terminal monitored by court appointed observer. The plea agreement is subject to court approval.

The spill occurred, essentially, because of poor maintenance. The company was aware that a particular valve in it delivery pipeline system was not closing properly. This defect was the cause of the spill.

The US Department of Justice says: “ExxonMobil’s negligent failure to provide adequate resources and oversight to the maintenance and operation of the Everett terminal was a direct cause of the spill.” As part of its plea agreement, ExxonMobil has agreed to pay the maximum possible fine of $359,018 (twice the cost of the clean up), the clean up costs of $179,634, and a community service payment of $5,640,982 to the North American Wetlands Conservation Act fund to be used to restore wetlands in Massachusetts.

Fine monies from the prosecutions in the Buzzards Bay oil spill case and the recent Overseas Shipholding Group prosecution were directed into this fund where they were, and are continuing to be, used in wetlands restoration projects in Massachusetts. ExxonMobil further agreed that for the next three years, the Everett facility will be monitored by an court-appointed official and will be subject to a rigorous environmental compliance programme.

JAPAN could be the next country to send warships to to counter Somali pirates. Media reports quote Foreign Ministry official Mitsuhiro Kobayashi: “We have to do something against pirates. We are considering various options, including sending Self-Defense Force ships or patrol vessels.”

China has already announced it is sending a squadron of two warships and a support vessel to join the increasing number of naval vessels in the area. While it is believed all the warships in the area communicate and cooperate there is no unified command system.

German Defence Minister Franz Josef Jung has been quoted as saying that forces on its frigate Karlsruhe, which is on its way to the region, are authorised to use force to seize back control of ships taken by pirates.

NIPPON Kaiji Kyokai (ClassNK) says the total tonnage on its register has passed the 160 million gross tonnage mark for the first time.

ClassNK says it had 7,017 ships with a total of 160,522,744 gross tonnage on its register as of the end of November 2008. IT says in a statement: “This builds upon the notable achievement made last year of becoming the first classification society ever to have more than 150 million gross tons under class. It is also expected that the gross amount of tonnage of all ships entering the ClassNK register in 2008 will exceed the previous record of 15 million gross tons achieved in 2006.”

“This accomplishment reflects the abiding trust that our clients have in the quality of our services”, noted Chairman and President Noboru Ueda. He went on to say that “this result also reflects the commitment of everyone within the Society to provide the best possible service to meet the needs of our clients around the world.”

CHINA is set to project its naval power beyond its adjacent waters for the first time in recent history as two destroyers and a support vessel get ready to head for the Gulf of Aden on Friday.

Their mission is being described as to protect Chinese merchant ships from Somali-based pirates. Officials said that two helicopters and special operations forces will be embarked.

The officials indicated that the Chinese warships would co-operate and share information with warships from the other navies now operating in the region.

Rear Admiral Xiao Xinnian is quoted as saying: "This demonstrates that the Chinese government is committed to the international community and a responsible player and a major country in the world."

FUEL testing agency Lintec Testing Services has warned that three fuel oil samples taken recently from vessels that have bunkered in Riga, Latvia, have shown the presence of Dicyclopentadiene (DCPD), a synthetic substance not naturally occurring within marine fuel.

Lintec Managing Director Geoff Jones says: “The presence of DCPD was detected by Lintec’s chemical screening service. This fuel is clearly in breach of Section 5.1 of the ISO-8217 specification, which clearly states that ‘the fuels should be homogeneous blends of hydrocarbons derived from petroleum refining. This shall not preclude the incorporation of small amounts of additives intended to improve some aspects of performance. The fuels shall be free from inorganic acids and from used lubricating oils. The fuel should not contain any added substance or chemical waste which jeopardises the safety of ships or adversely affects the performance of machinery, or is harmful to personnel, or contributes overall to air pollution.’

Mr Jones adds: “If a vessel has recently bunkered in Riga or surrounding areas, we would strongly recommend that owners and operators have knowledge of the quality of the fuel prior to its use. They should ensure that the samples are taken correctly, together with the supplier at the custody transfer point (ship's manifold) and witnessed by the ships’ crew. The seal numbers on the samples must be recorded on the Bunker Delivery Note (BDN).”

HONG Kong-based Hutchison Port Holdings (HPH) has taken control of Amsterdam-based Ceres Container Terminals Europe from Nippon Yusen Kabushiki Kaisha (NYK) in a share-swapping agreement. In exchange for the majority stake in CTE, NYK will have a minority stake in Europe Container Terminals (ECT) in Rotterdam.

Commenting on the agreement, John Meredith, group managing director of HPH, said, “The investment in CTE will help strengthen HPH’s presence in Northern Europe through the addition of extra container-handling capacity. CTE’s strategic location allows it to attract deep-sea and feeder traffic as well as inland traffic.”

NYK chairman Takao Kusakari said, “This agreement gives us the opportunity to enhance our cooperation with HPH while further tapping into HPH’s network of Northern European ports.”

GERMAN-based carrier Hamburg Süd and its affiliated Brazilian company Aliança have rejigged their service between US Gulf / Central America / Caribbean - South America East Coast (UCLA).

The companies says String 1 will offer fast and direct connections between Brazil and Colombia, Mexico and US Gulf with one of the best transit-times in the market. The new rotation will be as follows: Houston - Cartagena - Suape - Santos - Rio Grande - Navegantes - Paranaguá - Santos - Cartagena - Veracruz - Altamira - Houston.

String 2 will continue to offer direct calls at Venezuela, Cuba, Colombia, Guatemala, Panama, Mexico and Brazil. The rotation remains unchanged: Santos - Rio de Janeiro - Salvador - Puerto Cabello - Cartagena - Santo Tomas de Castilla - Havana - Veracruz - Altamira - Manzanillo - Cartagena - Puerto Cabello - Santos.

The Venezuelan port of La Guaira will continue to be serviced via Cartagena (Colombia) through a dedicated feeder service run by Hamburg Süd.

THE Nautical Institute is the latest shipping industry body to voice its anger over the Hebei Spirit jail sentences. The NI says that the the jailing of Captain Chawla and Chief Officer Chetan has “aggravated and aggrieved the entire shipping industry”. It notes that In slamming the verdict based on 'flawed, unreliable and unjust evidence' the Nautical Institute joins many respected maritime entities, including V Ships, Intertanko, the International Chamber of Shipping, (ICS), and the International Transport Workers Federation (ITF), in calling for their release.

The NI says: “As the “Hebei Spirit” suffered blow after blow from a loose Samsung Crane Barge, and as the officers reacted to the very best of their ability and with every regard to best practice and seamanship, they could surely never believe they would languish in jail for simply doing their best to save their fellow crew, the environment, cargo and the vessel itself.” It adds: “The prosecution of these two highly professional seafarers, has left us shocked and dismayed, and has ramifications for all linked to the sea. Given the misgivings surrounding the investigation and subsequent report submitted to the court, the entire case and verdict seemingly fly in the face of any concept of 'natural justice'. To many, the findings appear biased and certainly lacking good faith.”