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MOL forecasts better year

Major Japanese shipowner Mitsui OSK Lines (MOL) has revised it profit forecast for fiscal year 2009, ending 31March, as its main markets show signs of recovery.

MOL now expects profits of Yen5bn (US$55.5bn) for Fiscal 2009, up 150% from its previous estimate.

The company says: “The dry bulker market is expected to hold steady thanks to China's strong demand for iron ore and coal imports. And an improvement in the tanker market is also anticipated due to recovery in demand for petroleum products and the withdrawal of single-hull VLCCs. In addition, the global economy is bottoming out and the containership business is expected to see increased cargo trade and progress toward recovery of freight rates. Therefore, the Company made an upward revision of its earlier announced consolidated business outlook for FY2009.”

Norwegian-based offshore support specialist Farstad says the UT731CD-design AHTS Far Shogun has been delivered from STX Norway Offshore AS, Langsten, to Farstad Supply, a wholly owned subsidiary of Farstad Shipping.

The company says the vessel will trade the spot market in the North Sea. It adds that a long-term facility of NKr 400m (US$68m) has been drawn with Fortis Bank (Nederland) N.V, Oslo Branch to finance the vessel. Farstad Shipping's fleet currently consists of 57 vessels (24 PSV, 30 AHTS and three Subsea vessels) and one AHTS under construction at a Norwegian yard. Farstad says: “The company's strategy is to be a major international supplier of large, modern offshore service vessels to the oil industry. We also remain committed to solid long-term charter profile for the fleet.”

The South Africa Europe Container Service (SAECS) has confirmed that it will run an additional shipping service to cater for the anticipated season increased in refrigerated exports. The first vessel in the Reefer Express (REX) service will start opertaing the route on 15 February in Cape Town.

SAECS says in a statement: “The REX service is an additional, ‘purely reefer’, container service designed to provide added capacity for refrigerated exports during the peak reefer season months of February to August.” The REX vessels will call Cape Town, Rotterdam (Uniport), Tilbury, Cape Town. Transit times for the REX service are comparable to the SAECS core service.

SAECS says that the REX service will be “flexed” in terms of frequency and ports of call according to the seasonal demands of the perishable/ refrigerated products market and will supplement the capacity provided by the main weekly SAECS Core Service.

The London P&I Club warns that out-of-date onboard charts and other nautical publications still appear to be a contributory cause of shipping accidents. In the latest issue of its StopLoss Bulletin, the club notes, “The International Convention for Safety of Life at Sea (SOLAS) requires that, ‘All ships should carry adequate and up-to-date charts, sailing directions, lists of lights, notices to mariners, tide tables, and all other nautical publications necessary for the intended voyage’.

However, London Club says, from time to time, the club receives a report from a P&II ship inspector that the charts or other nautical publications on an entered ship are out of date. Two incidents reviewed recently by the club emphasise why compliance with the requirement is imperative. “In the first case, a telecommunications company alleged that a submarine cable had been damaged by a ship’s anchor. The first assumption was that, if the anchor had contacted the cable, then it must have been because it was dragging and the ship had not been able to recover the anchor in due time. However, the club-appointed surveyor quickly established that the ship had, in fact, anchored directly over the cable but that the bridge team had been completely unaware of the hazard beneath them. The surveyor identified that the ship had used an old edition of the chart, which predated the laying of the cable. Apparently, on preparing the passage plan, the second officer had not checked that he had the current edition of the chart. “In the second case, the investigation into the circumstances in which a ship suffered damage as it struck a hazardous wreck confirmed that the current edition of the chart was in use but that it had not been properly corrected. A chart correction showing the wreck had been issued some three years previously.”

The US Office of Naval Intelligence has warned of a possible mother ship lurking around the entrance to the Red Sea.

In a warning to merchant ships the ONI says: “Possible mother ship activity noted near position 13:08N – 056:56E (approximately 153NM east of Socotra Island, Yemen) on 26 January 2010 at 1128Z.”

ONI adds: “Mariners are warned to avoid this area if possible, as it will remain high risk for at least the next 24-48 hours. If necessary to transit near this position, all counter-piracy measures should be employed.”

Shipping industry organisations, including the International Chamber of Shipping, and the International Maritime Bureau have in recent weeks stepped up calls for naval forces in the area to act effectively against pirate mother ships which allow the small skiffs used in attacks on merchant ships to operate far from land.

The US Coast Guard says that numerous vessels remain unable to transit the Sabine/Neches waterway due to its continued closure of the following last Saturday's oil spill from the Eagle Otome at Port Arthur, Texas.

According to a statement yesterday, 27 January, 14 vessels await entry and 12 vessels are waiting to depart while 70 additional vessels are now queueing to use the waterway.

To date, 5,239 barrels of crude oil have been recovered, evaporated or dispersed naturally of the 11,000 barrels spilled. Current response assets include 27 oil skimmers, 23 oil vacuum vehicles, 59,800 feet of containment boom and over 550 personnel employed.

The Coast Guard says that over flights indicate the oil slick has spread northwest, with minor penetration through the northern containment boom. Facilities south of the spill have also reported the presence of oily waste.

Norwegian offshore support specialist Havila Shipping ASA has reported much improved Q4 and whole-year results. It Q4 result before tax was NKr30.9m (US$5.3m) compared with a loss of NKr86.3m in Q4 2008. Full-year 2009 profit before tax was Nkr605.3m compared to NKr259.4m in 2008, of which NKr311.8m was profit from sale of assets.

The group had 22 vessels in operation at the end of last year. These include three managed vessels that are owned by companies outside the group. Four of the vessels are operated by a joint venture company in Singapore, Posh Havila. Commenting on the market the company says: “The spot market for offshore service vessels was weak also during fourth quarter. Day rates have been low, and excess capacity has led to low utilisation for both PSVs and AHTS. Of owned vessels, the group had two PSVs and two AHTS vessel in the spot marked during the quarter. The utilisation has been acceptable for parts of the quarter. The objective of the group is now to achieve longer contracts for several of the vessels that are operating in the spot market.”

French-based classification society Bureau Veritas says it has upgraded its dedicated maritime website to make it easier for the shipping industry to keep up with changes to statutory and class requirements. At the same time it has revamped the format to make the site clearer and easier to use and added new functionalities for shipowners who class vessels with Bureau Veritas.

"There is a torrent of information on changes to international and class rules and regulations," says Claude Maillot, director ships in service, Bureau Veritas. "It is hard for owners and operators to keep up, and also to know what is relevant to them. So we have put a continually updated class and statutory news section right in the front of our maritime website - www.veristar.com. Anyone can use it, and they can register for free to receive filtered e-mail updates. If they are only interested in specific flags or specific vessel types, for instance, then they will only get e-mail updates about those specific items."

"There is a wealth of information on the site for our clients and for the wider industry," says Mr Maillot. "For instance anyone can search for approved marine equipment and machinery and view the certificates on line. We have a large community of web users across the global shipping industry and we expect the new, sharper site with more information, better links, but less clutter will mean more people will find it a useful resource."

New York-based Seafarers & International House, which describes itself as a “Lutheran Mission for Seafarers and Sojourners” is holding its annual Awards Banquet on 22 April. The event will honour Donald Keefe, President, Marine Engineers’ Beneficial Association; Philip J Schapiro, President & CEO, Liberty Maritime Corporation and Joseph C Sweeney, Professor of Law, Fordham University School of Law. Seafarers & International House says its chaplains board merchant ships to offer pastoral care, hospitality, social assistance, advocacy and prayer “for these migrant workers of the sea”.

Event details are: Thursday, 22 April 22, 2010, 6:00 PM – 10:00 PM at New York Athletic Club, 180 Central Park South, New York City. For Banquet Reservations and Journal Ad Subscriptions, call (212-677-4800 ext. 1218) or email nfleming@sihnyc.org.

A technical paper submitted to IMO last week by the main shipping industry representative bodies refutes all the grounds on which the Korean Supreme Court found the master and mate of the VLCC Hebei Spirit guilty of criminal negligence. The paper argues that after their anchored vessel was hit by a barge the two officers “followed the good practices observed by seafarers and both acted correctly according to these good practices but were still penalised for their professional and correct actions”.

The paper, submitted jointly by BIMCO, ICS, IFSMA, IGP&I, Intercargo, Intermanager, Intertanko, ISF, IT, IUMI and SIGTTO, is for consideration at May's meeting of the Marine Environmental Protection Committee (MEPC 60)

The Korean authorities based their judgement of the officers' actions on three main points: they took soundings before doing anything else, they then injected inert gas into the cargo tanks and finally they did not use the cargo pumps at full power to transfer oil to undamaged tanks and thus list the vessel to minimise further outflow of oil. Effectively the Korean criticism of the officers is that they wasted time when the they should have acted to reduce the volume of the spill.

The shipping industry paper demonstrates in some depth that on each of these points the officers followed best pactice, including following IMO guidelines. In the matter of transferring cargo and achieving a list the paper says that the officers were having to transfer cargo into tanks that were already almost full – process that takes much longer than if empty cargo tanks are used to receive the transferred cargo. “Consequently,” the papers says, “to a person unfamiliar with tanker operations this could be mistakenly perceived as an unnecessarily slow response.” The paper also highlights the problems with listing a vessel after a rupture of cargo tanks.

The industry bodies invite MEPC 60 to “note the comments expressed in this paper and comment as appropriate”.

If a general recovery does materialise this year, it will be slow and painful, according to marine insurers meeting in London this week. International Union of Marine Insurance (IUMI) president Deirdre Littlefield told journalists that underwriters were braced to tackle new problems which were emerging as a result of the ongoing slump.

Ms Littlefied was speaking after IUMI's annual winter meeting at Lloyd's. She said: "Newbuild cancellations and deferments are increasing, but a huge amount of tonnage still is due to be delivered this year and next. Regrettably, we have not seen a significant leap in the scrapping rate of old ships, which is almost beyond belief in the present crisis.

She continued: "Understandably, owners and charterers are doing all they can to reduce costs. If this means skimped maintenance and deferred repairs, however, it's bad news for insurers who cover hull, cargo and liability risks. The situation is compounded by the emergence of new problems. These are mainly technical but could lead to big headaches for underwriters.”

The International Union of Marine Insurance's (IUMI's) executive committee has warned of the dangers associated with laying up ships and noted the death of a seafarer on a laid up vessel.

An IUMI statement says: “It has been reported that a containership laid up off Hong Kong during Typhoon Koppu in September 2009 experienced violent rolling, resulting in one crew fatality and at least $250,000 of damages.”

The insurers also noted that BMT Marine & Offshore Surveys estimates there are 150 to 200 ships lying in non-designated anchorages (outside port limits) along the Straits of Malacca and Singapore.

IUMI cautions: “Underwriters need to pay close attention to the various degrees of lay-up we are seeing, including the conditions of cover for trading for vessels which have been idle without being deactivated, or just lying at anchor or drifting awaiting firm orders, often with minimum maintenance and prone to collisions or typhoon damage.”

Cold lay-ups (six months or more) can produce huge problems according to IUMI. The bigger the ship, the bigger the problems, it says. “Many things can go wrong during lay-up and reactivation. For instance, if the ship's computers are closed down, how do you reactivate a dead ship without the computers working?”

The Marshall Islands Registry is now the world’s third largest open registry with more than 52.3 million gross tons and 2,102 registered vessels according to Clarkson Research Services' publication The World Fleet Monitor

Clarkson's also says the Marshall Islands was also the fastest growing of the top four registries last year. The Registry, which is administered by International Registries, Inc. (IRI), says it attributes its success to the continued decentralization of registry services to its 20 worldwide offices, its client service ethos and the fact that it continues to post top safety and environmental scores with global port States.

IRI says that the Marshall Islands Registry remains the only major open registry to be included on the US Coast Guard’s Qualship 21 roster for four years in a row. The Registry also maintains its white list status on both the Paris and Tokyo MoUs. Clarkson’s also notes in the World Fleet Monitor that the Marshall Islands, IRI says, has the youngest fleet among the top ten registries.

“We are delighted that the Registry’s growth trend continues to point upward and pleased to have an excellent complement of owners and operators registered with the flag. One of the trends we have been watching is the tonnage coming into the Registry and where it is coming from. In 2009, we saw more than 70% of the tonnage entering the Registry as newbuilding tonnage whereas in 2008, only 50% was newbuilds. Not surprisingly, newbuilds engaged in the energy sector of the market make up 70% of this tonnage,” said IRI president Bill Gallagher.

Norwegian shipping group Camillo Eitzen & Co (CECO) is letting an exclusivity agreement it and potential bidder Berlian Laju Tanker lapse, effectively opening the way for rival bids.

The proposed takeover by the Indonesian company was announced in October but has been held up because of objections by the Indonesian authorities.

A statement says: “Since December 2009, BLT and CECO have worked to prepare for launch of the voluntary exchange offer under the revised terms announced 14 December 2009. As the initial transaction structure proposed by BLT (which involved an issue of mandatory exchangeable bonds) failed to obtain approval from the Indonesian market regulator, the parties have been considering alternative acquisition structures to complete the offer.” It continues: “After contemplating other options allowing earlier execution of the transaction, BLT has now finally proposed a new transaction structure for completing the offer based on issuing shares in BLT as payment to CECO shareholders. According to BLT, having the exchange offer being based on a rights issue structure, which is a proven concept in Indonesia and for BLT, significantly reduces the execution risk in the transaction. Under the new structure, the transaction may be completed by mid-June 2010.” The Norwegian company says it still considers the offer, worth about US$168m for a 53% stake, to be “attractive”.

The CKYH Alliance says it is implementing slow steaming on its Asia-Europe/ Mediterranean service loops. The liner shipping consortium includes (COSCON, “K” LINE, Yang Ming and Hanjin Shipping). Slow steaming will be implemented on the eastbound leg of the services. A statement says these measures are expected to increase eco-friendliness by reducing CO2 emission. The slow steaming services will be NE1, NE2, NE4 and MD2, with MD2 having been the first to start slow steaming, in December, after passage through the Suez Canal eastbound. The remaining NE3 and MD1 services are planned to begin slow steaming during the first half of 2010.

Freak weather conditions and/or abnormal weather patterns have been reported in several parts of the world during recent months warns the American P&I Club. One of the latest examples is a significant build-up of sea ice in some major northern Chinese ports, the volume exceeding, it says, anything experienced in more than 30 years.

In an alert to its members, the club says the problem is centred around Bohai on the northern Yellow Sea coast, affecting ports such as Bayuquan and Dalian. At Bayuquan, patches of ice 500-600mm thick have formed in some places, while lesser patches have been seen in the immediate vicinity of the port.

Three icebreakers are working to avoid delays to ships, while the local Maritime Safety Authority is strictly supervising inbound and outbound vessel traffic.

Other northern ports – such as Jingtang, Caofeidian and Xingang – are said to be not so seriously affected. On January 17, the Chinese National Sea Weather Forecast Station reported that floating ice around Liaodong Gulf extended as far as some 60 nautical miles from shore, at Bohai Gulf around 22 miles, Northern Yellow Sea around 14 miles, and Laizhou Gulf around 33 miles.

However, with more cold weather fronts expected later, ice coverage around the Bohai coast could expand, according to the club’s correspondents in China, Huatai Agency & Consultant Services Ltd.

The club advises that vessels scheduled to call at northern ports, especially Bayuquan, should be ready for extreme temperatures and ensure Port State Control requirements are strictly followed to avoid unnecessary delay.

The combined effects of a global economic slowdown and rising commodity prices means shipowners are increasingly at risk of claims being made against them for bulk cargo shortages, even when they are within what is sometimes referred to as a ‘customary shortage’ warns the North of England P&I club. The warning comes in the latest issue of the club’s loss-prevention newsletter ‘Signals’, published this week. “Cargo 'loss' due to physical changes such as evaporation can occur during a voyage, added to which are measurement errors at load and discharge ports,” says the club’s head of loss prevention Tony Baker. “Yet with reduced profit margins and larger and more expensive shipments, shipowners need to ensure mate’s receipts and bills of lading are properly claused – and have very good explanations and evidence for any differences between load and discharge figures – to avoid costly claims.” According to North, the traditional notion of a “customary shortage” first arose when cargo underwriters applied a depreciation on their goods-in-transit policies and, though the figure was not determined scientifically, it was used because it was convenient. Customs authorities around the world compounded the misconception by allowing other differences between received and manifested quantities before imposing penalties. “In reality, both US and English courts reject the idea of a customary allowance but accept there are a multitude of reasons why the quantity of bulk cargoes – both wet and dry – may be different,” says Baker. “It is generally possible to defend small shortages due to physical changes in the cargo during the voyage, but this requires accurate records such as ventilation, temperatures and bilge water removal during voyages as well as a detailed understanding of what is accepted local industry practice.” North warns that measurement differences are harder to defend. “While the law and Hague Visby Rules recognise the problem and afford the carrier some leeway – for example by upholding the carrier’s right in some jurisdiction to rely on expressions such as 'weight unknown', or by placing the ultimate responsibility for bill of lading figures on the shipper – it is vital that shipowners ensure load-port draught and ullage surveys are as accurate as possible,’ says Baker. ‘However, as many mariners will note, determining the quantity of bulk cargo loaded on board is more of an art than a science.”

The US-based American Waterways Operators and Waterways Council have responded to proposed legislation that would close locks conencting US inland waterways to the Great Lakes.

A statement says: “Legislation was recently introduced in the House of Representatives that would devastate the Great Lakes economy, jeopardizing businesses and thousands of jobs in the economically strapped region. Michigan Representative Dave Camp’s CARP Act (H.R. 4472) would immediately shut down Chicago-area locks in order to prevent the invasive Asian carp from reaching the Great Lakes. Preventing the spread of invasive species is a serious environmental challenge that demands a coordinated, science-based solution. Knee-jerk actions like the CARP Act only serve to add to the hysteria without any guarantee that the carp’s spread will be stopped.” According to he waterways industry bodies: “It’s time to stop the Asian carp hysteria and craft an effective anti-carp plan that fights the fish without killing American jobs. The Administration is working with states and other stakeholders to develop a coordinated approach to prevent the spread of Asian carp and invasive species nationwide. That process offers the best way to ensure an effective, science-based solution that does not have unintended and disastrous consequences on the Great Lakes-area economy.”

A collision on Saturday involving a laden tanker has closed the important Sabine/Neches waterway in Texas. The US Coast Guard said about 462,000 gallons of oil spilled into the water Saturday when the 1994-built, 95,663 dwt Eagle Otome collided with by a two-barge train being pushed by the tug Dixie Vengeance near Port Arthur, about 90 miles east of Houston. Reports suggest that the Singapore-flag tanker slewed to port in in the waterway and hit a berthed vessel before being hit on her starboard bow by the barges. All members of the crews from the three vessels involved were reported to be safe and accounted for.

A Coast Guard statement yesterday afternoon (Sunday 24 January) said that responders from the Unified Command established to clean up the oil spill had recovered about a tenth of the total amount thought to have escape in the waterway.

A statement says: “Fifteen skimming vessels continue to comb the waterway and recover more oil, and there are about 500 responders working both in the field and at the command post.”

The safety zone established in the Sabine-Neches Waterway now extends from the North Forty at the northern tip of Pleasure Island to Texas Point by the Sabine River jetties. No vessel may enter the safety zone without the permission of the Captain of the Port or his deputy. This restricts all recreational and commercial vessels from transiting the area. West-to-northwest winds and strong ebb currents are expected to move oil south of Mesquite Point over the next 24-36 hours.

Yesterday the owner and operator of the Eagle Otome, AET, issued a statement saying it would continue to work in close cooperation with the US Coast Guard and other response agencies following yesterday’s collision and subsequent outflow of crude oil.

The statement continued: “ AET expresses deep concern over the disruption caused by this incident, both to local residents and those affected by the current closure of the Sabine River, and AET continues to offer assurance that every effort is being made to minimise the impact. The company would like to extend sincere thanks to all parties working to mitigate the impact of this very unfortunate incident.”

Major US-based shipping group Crowley Maritime Corporation carried out an experimental lightering operation at Haiti on Fiday (22 January). Working under contract with the US Transportation Command (USTRANSCOM), the company successfully discharged 12 20-foot containers of relief supplies across a beach in Port-au-Prince.

Crowley says in a statement: “The success of this operation, which involved lifting the containers from a Crowley container ship anchored in the harbour to a smaller, shallow-draft landing vessel for transport and discharge over the beach, paves the way for container shipments directly into Port-au-Prince next week.”

"Today's operation was an important milestone in re-establishing direct container shipments into the heavily damaged port," said John Hourihan, Crowley's senior vice president and general manager of Latin America services. "The port survey conducted Monday by a team from our Titan Salvage subsidiary was spot on in terms of identifying a suitable location in the port where we could safely discharge the cargo."

The Crowley container ship Marcajama, which offloaded the containers today, was scheduled to return to Port Everglades, Florida, over the weekend and load more relief cargo under contract with USTRANSCOM. The ship will then return to Port-au-Prince in the middle of this week and discharge containers via the proven lightering method utilizing two shuttle vessels.

Crowley says: “Future cargo operations in the port should improve substantially in the coming weeks. Crowley is mobilizing two 400-foot-long, 100-foot-wide flat deck barges, along with two Manitowoc 230-ton crawler cranes in the United States for USTRANSCOM that will be brought into Port-au-Prince to serve as a makeshift dock for future cargo operations. The first barge and crane in Orange, Texas should arrive in Haiti on or about 4 February. The second deck barge is being outfitted in Lake Charles, Louisiana, and will arrive by mid-February.”