Naftika Chronika May 2010 by ITBox

ÍÁÕÔÉÊÁ ×ÑÏÍÉÊÁ

CMYK

N A F T I K A

C H R O N I K A

Annual English Edition

Commissioner

Maria Damanaki

MAY 2010

ÁÑ. ÖÕËËÏÕ 130 • 05/2010 www.n-c.gr 6

‘’Our country needs a real change‘’ ‘’Our focus should not be on what our partners say or do‘’ ‘’We need a new, fair and sustainable model‘’

Everything you wanted to know about Greek Shipping (and didn’t know who to ask)

The International Shipping Exhibition 7-11 June 2010

Visit us at Stand No 500 D

CMYK

ÍÁÕÔÉÊÁ ×ÑÏÍÉÊÁ

N A F T I K A

C H R O N I K A

Annual English Edition

Commissioner

Maria Damanaki ‘’Our country needs a real change‘’

ÁÑ. ÖÕËËÏÕ 130 • 05/2010 www.n-c.gr 6

‘’Our focus should not be on what our partners say or do‘’ ‘’We need a new, fair and sustainable model‘’

Everything you wanted to know about Greek Shipping

MAY 2010

(and didn’t know who to ask)

The International Shipping Exhibition 7-11 June 2010

Visit us at Stand No 500 D

C O N T E N T S >> I S S U E 1 3 0 >> M A Y 2 0 1 0 >> ΚΩΔΙΚΟΣ 1449>>

Published by Gratia Publications Ltd. Publications

Editor: Ioanna Bissias Director: Ilias Bissias Editor in Chief: Liza Marelou Creative Director: George Paraskevas Contributors: Alkis Korres George Banos John C. Pachoulis Advertising Managers: Chris Kapadais Demetra Tsakos Translations: Dora Tsepa Jonathan Smith Gratia Publications Ltd. 132 Syngrou Avenue 176 71 Athens Τel. (+30) 210 - 92.22.501, (+30) 210-92.48.006 Fax: (+30) 210 - 92.22.640 e-mail: editors@naftikachronika.gr www.naftikachronika.gr Web strategy development by ΙΤ While every effort has been taken to ensure the accuracy of the information containerd in this magazine, no responsibility can be accepted for errors, omissions or inaccuracies. Opinions expressed herein are those of the authors and are not necessarily those of Gratia Publications Ltd. Reproduction in whole or in part is prohibited without the prior written permission of the publisher.

⏐ Editorial 08⏐ ⏐ 2010 the year of the seafarer 12⏐ By By Efthimios E. Mitropoulos, Secretary-General, International Maritime Organization ⏐ The Integrated Maritime Policy is one of the 16⏐ key challenges and priorities of my mandate An exclusive interview with Commissioner for Maritime Affairs and Fisheries Maria Damanaki ⏐ 22⏐ Seas and oceans are part of our culture By Rodi Kratsa, Vice-president of the European Parliament ⏐ European Maritime Policy: Motion for a 26⏐ European Parliament resolution on strategic goals and recommendations for the EU's maritime transport policy until 2018 ⏐ A new international agenda for shipping 34⏐ policy and regulation By Albert Bressand ⏐ Asian waves over international shipping 38⏐ By John C. Pachoulis ⏐ 2010-Latest developments in Greek 40⏐ shipping By George Xiradakis ⏐ Revisiting the Greek crisis: Did the eurozone 44⏐ trade without coherence? ⏐ 48⏐ The recent Greek experience of financial warfare By Alkis Corres ⏐ Is marketing a compass or a pain 52⏐ for shipping? ⏐ Special report: The shape of things to come 56⏐ ⏐ Supporting the maritime industry 64⏐ By John Tzoannos

Ιδρυτής: Δ. Ν. Κωττάκης / Έτος Ιδρύσεως: 1931

⏐ IOPCF Oil Spill Cost Data: Empirical Analysis 68⏐ and Debate at the IMO By Christos A. Kontovas, Harilaos N. Psaraftis and Nikolaos P. Ventikos ⏐ Developments at IMO 76⏐ By Panos Zachariadis ⏐ Green Shipping 80⏐ By Emmanouel Papalexis ⏐ 84⏐ European port policy at crossroads By Thanos Pallis ⏐ People see their holidays as a necessity 86⏐ nowadays An interview with Charis Papacharalampous ⏐ Classifications societies: Entering 92⏐ (and surviving) challenging times ⏐ Sale and purchase market review 108⏐ for the first quarter of 2010 By Takis Efstratiou ⏐ LPG market overview for Q1 2010 114⏐ By Christos Triantafyllidis ⏐ Gearing up for the Cyprus Presidency 120⏐ By Vassilis Demetriadis ⏐ Cyprus shipping-National Developments 124⏐ By Thomas Kazakos ⏐ An economist's eye for the shipping guy 126⏐ By Stavros Tsolakis ⏐ Evaluation of competence of marine 130⏐ engineers on maintenance sector By D. E. Gourgoulis, C.A. Schinas, G. P. Gotzamanis, C. G. Yakinthos ⏐ Market news 134⏐

ΒΡΑΒΕΙΟ ΑΚΑΔΗΜΙΑΣ ΑΘΗΝΩΝ / ΜΕΤΑΛΛΙΟ ΠΟΛΗΣ ΑΘΗΝΩΝ / ΤΙΜΗΤΙΚΗ ΔΙΑΚΡΙΣΗ ΙΔΡΥΜΑΤΟΣ ΜΠΟΤΣΗ

EDITORIAL

Facing

our past may be the key for our future Younger people should not only be aware of their roots and past. They should also realise the importance of those financial sectors that can be counted on to hold the fort in these hard times. Shipping is one of the few sectors that quietly go about their business, continuing to bring prosperity to Europe.

reeks are number one on the sea and that is not only in Piraeus or in the coastal areas of Attica. Shipping does not only affect those employed in this economic sector either. It concerns the whole of Greek and European society, who sadly ignore the basic element that boosts not only our national economy on a local level, but also European and international commerce. Shipping is ignored, overlooked and in many ways looked down on as if it were a minor or even marginal sector of the European economy and society.

There have been many recent campaigns aimed at attracting young people to the merchant marine and at informing the public about all the possibilities offered by a career in shipping. Despite these efforts, the celebrations for both the European Maritime Day by the EU last May and by IMO last September have not been able to match the expectations of the inspired

people who instituted them. Despite the commendable enthusiasm to inform the public, the younger generation seems to ignore the importance of the sea or of maritime trade; and all this in a continent that has always depended on shipping for its economic survival. During a recent conference on Business History in Athens, lecturers from all the corners of Europe stressed the importance of studying and teaching Business History in this modern competitive environment. All the participants were of the opinion that Economic History does not only concern historians but also economists and other academics who wish to comprehend the primary sources of History and combine experience with knowledge.

EDITORIAL Greek Economic History is not merely an interesting school subject; it is also essential knowledge that will help the young to see where we have excelled as a nation and where we have been hindered. Within this school subject, Greek shipping should enjoy a prominent position.

Unfortunately, however, many students are completely disinterested in History. It might be the teaching methodology, or the fact that many of the History books are not relevant to the demands and interests of the younger generation. Many young people think that history is only names and dates and that it does not offer them any practical knowledge or skills. They do not understand that History will offer them valuable insight into modern institutions and societies, and that it will teach them about trends and experiences of the distant past. Perhaps the educational system is at fault here; or perhaps teachers need to follow a more modern methodology.

The importance of introducing Economic and Business History in all our Universities cannot be stressed enough. Nevertheless, throughout Europe, those two University courses are optional and rarely compulsory. In Greek Merchant Marine Academies, Greek Maritime History is not taught at all! Our future seafarers totally ignore our roots and traditions. Many will ask themselves why young people should need to know about the shipping tradition of the islands of Kassos, Andros, Cephallonia or Oinousses. Why should

they know who are the most important businessmen in the shipping sector? Why should they learn about past recessions? It is quite evident that knowledge of the past can act as our strength for the future and may be our shield for the present. History refers to the understanding of what a nation is and of how to solve the problems of the present based on the knowledge of past, so as to face the challenges of tomorrow. In particular, Economic History is a course that should be taught throughout Greece and Europe. In our modern society, knowledge of how the economy works is necessary to all economic sectors. Î?.Î§.10

This year European Maritime Day will be celebrated throughout Europe. Let us hope that the leaders of Europe encour-

aged by their business and academic communities will allow research of these two aspects of history, rather than contribute to their decline and disappearance. Younger people should not only be aware of their roots and past. They should also realise the importance of those financial sectors that can be counted on to hold the fort in these hard times. Shipping is one of the few sectors that quietly go about their business, continuing to bring prosperity to Europe. It is disappointing that most European countries ignore this.

In Greece, some people have completely forgotten legendary personalities and the glory of seafaring. With modern teaching methods, well-written books and inspired educationalists, the economic, business and shipping history of Greece will attract young people to the forgotten sectors of the Greek prosperity. If we do not comprehend the legendary and ispirational sea voyage of the Greeks, how will be able to maintain it in the future?

Ilias Bissias

INTL FORA

Whereas the attacks off Somalia are focused on hijacking of ships and holding of seafarers for ransom, the attacks in the Gulf of Guinea are motivated by theft; tend to be more violent; and pose a potential threat to the security of the energy supply in, and from, the region and to the marine environment.

coordinating measures to resolve the unprecedented and complex situation that, for more than five years, has rendered voyages off the coast of Somalia a very dangerous venture indeed. I hope that the implementation of the IMO and industry guidelines, together with the support of the UN Security Council and other political and military entities, will assist in tackling this modern-day scourge effectively. While we appreciate the naval operations undertaken to protect ships, the shipping industry itself must also raise its own defences by effectively making use of the recommended shipping routes (in particular, the Internationally Recommended Transit Corridor for ships transiting the Gulf of Aden); and also by making use of the reporting mechanisms and taking all necessary preventive, evasive and defensive measures. Our concern should, above Î?.Î§.14

all, be for the safety of life at sea and the wellbeing of the seafarers, fishermen and passengers involved and their families. We should, therefore, not rest unless and until all the necessary steps to suppress and eradicate piracy have been taken. In this respect, IMO is implementing a counter-piracy project and has established a special unit to support the organization's efforts to give full and effective implementation of the 2009 Djibouti Code of Conduct concerning the repression of piracy and armed robbery against ships in the western Indian Ocean and the Gulf of Aden. We are also participating fully in other international efforts to combat piracy, such as, for example, the Contact Group on Piracy off the Coast of Somalia, which was created in January 2009 pursuant to UN Security Council Resolution 1851 to address technical and legal aspects of the piracy issue.

What is happening at sea in the area surrounding Somalia is of great concern to IMO, which has played, and is determined to continue to play, a pivotal part in all efforts aimed at promoting an appropriate, coordinated international response to this disconcerting situation. The same applies to the worrying situation that, for some time now, has been observed in the Gulf of Guinea, where there has also been an unacceptably high level of acts of piracy and, more frequently, armed robbery against ships. Whereas the attacks off Somalia are focused on hijacking of ships and holding of seafarers for ransom, the attacks in the Gulf of Guinea are motivated by theft; tend to be more violent; and pose a potential threat to the security of the energy supply in, and from, the region and to the marine environment. IMO, in co operation with the 25 member States of the Maritime Organization of West and Central Africa, is seeking to address these issues through capacity building and developing a regional "coast guard function network" addressing a wide range of maritime safety, security and law enforcement challenges. While the aforementioned three themes occupy our thoughts and minds, IMO's work to enhance maritime safety and security, facilitate international maritime traffic, progress legal issues and promote our technical co-operation activities continue apace. All involved in the industry have a role to play in achieving the IMO objectives of safe, secure and efficient shipping amid clean seas - and Posidonia will provide an excellent opportunity for them to make their contribution.

EXCLUSIVE INTERVIEW

The Integrated Maritime Policy is one of the key challenges and priorities of my mandate ILIAS BISSIAS INTERVIEWS EUROPEAN COMMISSIONER FOR MARITIME AFFAIRS AND FISHERIES MARIA DAMANAKI

Ν.Χ.16

The recently appointed European Commissioner for Maritime Affairs and Fisheries Mrs Maria Damanaki is a well known Greek politician. In her new capacity, she will promote in cooperation with the Vice President of the Commisision Mr. Siim Kallas the new policies that will effect the everyday life of the European shipping industry. A hard worker, a good listener and a reasonable negotiator, Mrs Damanaki will face the challenges of our times backed by her vast knowledge of politics and international affairs.

What are the main priorities of your policies for shipping in the next four years? Do you think that the EU desires to preserve the strength of the European shipping industry? Will EU policies take into consideration the special conditions of this economic sector in comparison to the rest of the economy? The maritime sector lies at the core of European society and its economy. A very large share of the EU population relies on it, directly or indirectly. Not only should the EU aim to maintain this tradition, but it should seek to strengthen its position in the global stage. The Integrated Maritime Policy (IMP) contributes to this goal by providing coherence throughout all our sectoral policies referring to seas and oceans: transport, tourism, fisheries, energy, environment, research, and coastal development. Driving forward the IMP is one of the key challenges and priorities of my mandate. In this way, we will put the maritime sectors and coastal regions, which are traditionally at the periphery, at the centre of a new, dynamic and inclusive policy for blue growth and jobs. The main action fields we have set for the coming years are: the promotion of an Integrated Maritime Governance, the development of cross-cutting policy tools, and the promotion of co-operation and dialogue with third countries that share the same maritime basins as us. During his mandate, Commissioner Borg had

proposed the creation of a common maritime transport space without barriers. Is there still the plan for a common market, as regards shipping services in the EU? Unlike other means of transport, sea transport has not yet reaped the full benefits that the inter-

Blue Growth is about developing the policy tools that will allow us to exploit and expand all the advantages that the seas can offer us. Its three main goals are, (a) to create high quality jobs in order to tackle growing unemployment in the maritime sectors, (b) to invest in innovation in order to foster scientific and economic development, and (c) to promote a sustainable form of development.

nal open market can bring. Even intra-EU transport is subject to a set of complex administrative procedures. The Action Plan on European maritime transport space without barriers, which was communicated in 2009, aims to reduce and simplify these procedures in order to make maritime transport an attractive option and boost the sector. The Commission is planning to propose a directive on this issue next year. We are currently working on this in collaboration with the other Commissioners concerned, such as the Commissioner for Transport and for Competition. How will you manage to complete the framework for a common European maritime policy with limited funding? At the time of the establishment of the current financial framework, the Integrated Maritime Policy (IMP) did not exist as a fully fledged policy and no resources were specifically earmarked to finance it. However, we have been able to use a margin of flexibility within existing instruments to finance certain pilot projects. As the IMP develops, we will need to look at the various funding options. We are planning to propose a regulation in that respect in the course of 2010. However, I am convinced that the added value and the success will not come from the size of its funding, but from the leverage effect it can bring by creating a new, more complete set of maritime initiatives and internal coherence. 17 Î?.Î§.

EXCLUSIVE INTERVIEW

I was very glad to meet the General Secretary of the IMO for the first time since I was appointed European Commissioner. I consider it as the beginning of a regular and fruitful co-operation between our two organisations. Needless to say that the International Maritime Organisation is a major player in the global Maritime Community.

What will be your collaboration with VicePresindent Siim Kallas and in which areas are you planning to co-operate with him? We have an excellent collaboration with VicePresident Kallas, no less within the framework of the Steering Group of Commissioners for the Integrated Maritime Policy. Some of our responsibilities are very closely interlinked. This proximity gives us opportunities to co-operate and examine together different aspects of the same problems. This spirit of collaboration lies at the core of the IMP approach, and the Commission's tradition of collegiality. Obviously, in purely transport matters, Vice-President Kallas is responsible for holding talks with the Committee for Transport. All signs indicate that the Committee for Transport of the EP will be of great support to the Commission in policy areas such as maritime transport safety. Î?.Î§.18

Can you elaborate on your aspirations on the so-called Blue Growth policy? In a nutshell, Blue Growth is about developing the policy tools that will allow us to exploit and expand all the advantages that the seas can offer us. Its three main goals are, (a) to create high quality jobs in order to tackle growing unemployment in the maritime sectors, (b) to invest in innovation in order to foster scientific and economic development, and (c) to promote a sustainable form of development. To achieve these goals and the overarching objective of Blue Growth, we will deliver a vast array of policy tools and strategies. For example, by promoting one of our cross-cutting tools -maritime spatial planning- we can unleash the potential of our seas in order to develop transport, energy, fisheries and research projects in the same sea area and in the framework of an integrated sea basin strategy, as

is being done in the Baltic Sea. The integrated maritime surveillance system will facilitate the implementation of all our policies as we are now trying to do in the framework of a pilot project for the Mediterranean. As I see it, Blue Growth is not just an option. It is a necessity to drive forward and reinforce all aspects of the maritime sector. You are a chemical engineer and an expert on Greek trade and employee relations. Which is the future of the European shipbuilding industry? Are there ways of overcoming this current recession? The global recession has hit Europe very hard. The European shipping industry was no exception. Fortunately, we seem to be walking out of the tunnel, slowly but steadily. I have full confidence that the European shipping industry, with its long history and dynamism will come through the crisis. The current efforts of the European Commission to improve and simplify the regulatory framework will help the process of securing the competitiveness of the sector, by reducing operational costs and facilitating long-term planning and predictability. We have been informed that you have held discussions with the General Secretary to the IMO Mr Mitropoulos. What are your opinions about

EXCLUSIVE INTERVIEW

The greek Union of Marine Enterprises has insisted that our national legal framework should fully adopt and comply with EU Regulation 3577/92 in order to deal with the problems of passenger shipping. Are you in agreement with this request? This is a complex, ongoing matter, but we can already say that some of the issues have been solved, which for me is a positive sign of everyone's collaboration. The Commission will continue to promote the full implementation of the European legislation by finding a balanced solution. The solution needs to take into account the principle of freedom to provide services of full quality and safety and the concern of the Greek authorities regarding the completeness of maritime services with islands and the needs of servGreece is going through one of the most difficult phases in its recent history. Our European partners recognise that, and want to support us through this crisis.

the future relations between IMO and EU? I was very glad to meet the General Secretary of the IMO for the first time since I was appointed European Commissioner. I consider it as the beginning of a regular and fruitful co-operation between our two organisations. Needless to say that the International Maritime Organisation is a major player in the global Maritime Community. We fully support its work, and in fact most of our current maritime safety is based on measures introduced by the IMO. A next step that I want to work on, particularly in the context of the external dimension of the Integrated Maritime Policy of the EU, is to improve the EU visibility in the IMO. In the meantime, the EU should continue its active contribution to the work of this Organisation particularly in subjects of high political priority, such as the implementation of safety regulations, the training of seafarers, the Î?.Î§.20

reduction of greenhouse gases on a global scale or the fight against piracy. What are your suggestions for the strengthening and the promotion of the European Maritime Day? The European Maritime Day, which has been taking place in May each year since 2008, provides us with a formidable opportunity to gather all the stakeholders around the same table to discuss the progress achieved, and the future stages of all aspects of Maritime Policy. Despite its young age, this event has already proven extremely popular and fruitful. Three years into its existence and we are now examining ways to improve not only its visibility but even its organisation, so that we can make the most out of it for the stakeholders and the European citizens in general.

ice of general interest. What is the general climate towards Greece in the EU, at the moment? Do you think that the EU wants to punish or help Greece? Greece is going through one of the most difficult phases in its recent history. Our European partners recognise that, and want to support us through this crisis. In that sense, there is absolutely no doubt that the European Union wants to help Greece. However, I think our focus should not be on what our partners say or do. Our main concern, as a nation, should be to go beyond the urgent measures which the government has had to take. Our country needs a real change. We not only have to face the financial deficit but the general deficit in our perspective. We need a new, fair, and sustainable development model.

EUROPEAN MARITIME DAY

Seas and oceans are

part of our culture

BY RODI KRATSA Vice-President of the European Parliament

As every year, the European Maritime Day will be celebrated on the 20 May giving visibility to the sea and the maritime sector and raise awareness of their importance among European citizens. For Europe, shipping has been one of the key stepping stones to economic growth and prosperity throughout its history. Maritime transport services are essential in helping the European economy and European companies to compete globally. Moreover, shipping and all related maritime industries are an important source of revenues and jobs in Europe. Seas and oceans are also part of our culture and important perspective of our future as well.

Î?.Î§.22

llow me to remind you that the European Maritime Day was established, following my proposal which dates three years back, jointly by the European Council, the European Parliament and European Commission in 2008 as part of the EU intergraded maritime policy. Through this initiative, we are aiming to raise awareness of the importance of the European maritime sector for the European economy as well as to highlight its fundamental role for the economic development, social and territorial cohesion, competitiveness and more jobs. In parallel, we ought to bring out the environmental threats deriving from the land and particularly the coast activities but also from the maritime activities and commit for the promotion of a harmonic sustainable maritime development. In my capacity of Vice-President of the European Parliament, I had the honor to represent our Institution last year in May 2009, at the celebration that it was held in Rome with high level speakers included Commission President Mr. Jose Manuel Barroso, as well as around 30 ministers from EU Member States and Mediterranean countries. I also participated in the first celebration that was held in Athens in Hellenic Parliament.

This year the Maritime European World will meet again in Gijon of Spain on 18-21 May 2010 for the celebration of the European Maritime Day, where innovation for sustainable growth of maritime sectors and coastal regions will be in the heart of the discussions. I will have the privilege this year to represent the European Parliament and to highlight the importance we attach to the content and activities of the European Maritime Day. Actually, we are discussing in the European Parliament about the strategic goals of the EU's maritime transport policy until 2018. European Maritime Day is established in the framework of the coordinated European maritime policy. This message has to be clear and to reach local the

From left: Joe BORG, Commissioner for Maritime Affais, Altero MATTEOLI, Minister of Infrastructures and Transport of the Republic of Italy, Jose-Manuel Barroso, President of the European Commision and Rodi Kratsa, Vice-President of the European Parliament at the celebration of the European Maritime Day in Rome (May 2009)

citizens. European citizens are increasingly aware of the importance of our common maritime heritage and future and driving force. We cannot forget that 22 of the European Union's 27 Member States are coastal or island States, that over two thirds of the Union boundaries are maritime and that the maritime spaces under the jurisdiction of its Member States are larger than their terrestrial territory. Our Integrated Maritime Policy reflects a clear vision of how to address the challenges of maritime prosperity, sustainability and security and is intimately tied to the fight against climate change and to recovering the economic competitiveness of Europe. Furthermore, the current framework of the economic and financial crisis, the European maritime transport is expected to play a role of great importance as part of the European economy and as a driving force behind economic integration: maritime transport in the Member States is expected to increase from 3.8 billion tonnes in 2006 to 5.3 billion tonnes in 2018. That means that in ten years time the infrastructure, including ports, its links to the hinterland, and the shipping industry have to be able to handle, at

least, 1.6 billion tonnes more than at present. Passenger traffic, including ferries and cruise ships, will also grow. Territorial continuity, regional cohesion and quality standards for sea passengers will have to be ensured. Let me underline that European Maritime Day will be celebrated across Europe through the organization of events in local level: from Le Havre to Gdynia and from Turku to Trieste. Also, we encourage all the European regions, ports, cities and other maritime stakeholders to join in the celebrations and to work together so that European Maritime Day can serve in the future as the focal date launching a 'maritime week' of conferences, festivities, networking, best practice exchange and benchmarking activities throughout the EU. It is extremely encouraging that all involved cities, regions and organisations have taken ownership of European Maritime Day by organising their events in parallel to the central European conference, thus bringing a wide variety of maritime issues to the public's attention and participation across Europe.In Greece, a country with historical present and future in maritime, several events will be held as well. 23 Î?.Î§.

Joint Tripartite Declaration

Establishing a ''European Maritime Day" Strasbourg 20th May 2008 Recalling that Europe is a Maritime Continent with almost 70,000 km of coastline, Recalling that 22 of the European Union's 27 Member States are coastal or island States, Recalling that the maritime regions of the European Union account for some 40% of its GDP and of its population, Recalling that over two thirds of the Union's boundaries are maritime and that the maritime spaces under the jurisdiction of its Member States are larger than their terrestrial territory, Recalling the economic importance of, and synergies between sectors as diverse as shipbuilding and shipping, ports and fisheries, offshore energy, tourism, environment and maritime heritage, Recalling that Europe must enhance its capacity to deal with the major challenges it faces such as globalisation, climate change, energy sustainability and environmental pressures on the coasts and seas, Recalling the importance of coastal regions, islands and the outermost regions and the relevance of regional and local authorities in shaping and implementing the future European maritime policy, Recalling the importance of a healthy marine environment both for the sustainability of economic activities on the seas and for the quality of life in coastal regions, Mindful of the common heritage and the common responsibility of Europeans for the oceans and seas, Recalling the vastness of the world's oceans and the role which the EU can play in preserving them as a resource for the future of mankind, Underlining the necessity to increase awareness and visibility of the importance of the oceans, of a vibrant maritime economy and of the rich European maritime heritage the benefits of which should be celebrated each year. The European Parliament. the Council of the European Union and the European Commission Approve the establishment of a "European Maritime Dau" to be celebrated May 20th each year, around which awareness raising and networking activities will be organised.

Î?.Î§.24

EUROPEAN MARITIME DAY

Motion for a European Parliament Resolution on strategic goals and recommendations for the EU's maritime transport policy until 2018 (2009/2095(INI)) BY PETER VAN DALEN, MEP

The European Parliament, 1. Welcomes the communication on the EU's maritime transport policy until 2018; 2. Stresses the importance of the maritime transport sector to the European economy, not only as a carrier of passengers, raw materials, goods and energy products but also as the core of a wider cluster of maritime activities such as the naval industry, logistics, research, tourism, fisheries and aquaculture, and education; 3. Emphasises that EU maritime policy should take account of the fact that the maritime transport industry faces competition not only within the Union but also, and above all, globally; emphasises, also, the importance of the growth of maritime transport, as part of the wider transport sector, both within and outside the EU; 4. Hopes that EU maritime policies will henceforth be designed within the framework of a 'single European sea' and, consequently, Î?.Î§.26

calls on the Commission to develop a European maritime transport policy as part of a common maritime area;

The market 5. Urges the Commission to continue to combat abuses of flags of convenience; 6. Urges Member States, therefore, to encourage the use of their flags and to support their maritime clusters on shore, for example by providing fiscal facilities such as a tonnage tax system for ships as well as fiscal facilities for seafarers and ship owners; 7. Considers that, like any sector of the economy, the maritime sector must in principle be governed by the rules on State aid, although State aid may exceptionally be permitted for specific cases provided that it is made available temporarily and in a transparent and comprehensible manner; 8. Considers that the guidelines on State aid to shipping, which expire in 2011, must be

retained and extended, since they have contributed substantially towards maintaining the international competitiveness of European shipping, towards its ability successfully to overcome the often unfair competition from third countries, and towards maintaining its leading position worldwide, and have therefore helped to support the economies of Member States; 9. Calls on the Commission to submit the promised new rules on State aid for maritime transport in 2010, and further considers that the Commission should submit the guidelines on State aid to sea ports as quickly as possible; 10. Emphasises, in this context, that State aid should be used exclusively to support European maritime sectors that are committed to social standards, the promotion of jobs and the training of personnel in Europe, and to ensure the global competi-

tiveness of European shipping; 11. Calls on Member States speedily to sign, ratify and implement the UN Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, known as the 'Rotterdam Rules', establishing the new maritime liability system; 12. Calls on the Commission to give greater consideration to maritime transport and its landbased structures during the forthcoming revision of the Community guidelines for the development of the trans-European transport network, in particular the multimodal linking of European sea ports with the hinterland; 13. Welcomes the Commission's proposal for a directive on reporting formalities for ships arriving in or departing from ports of the Member States of the Community (COM(2009)0011), in order to simplify, reduce and eliminate administrative procedures for European short sea shipping; calls on the Commission to continue to support short sea shipping with a view to substantially increasing the performance capacities of maritime transport within the Union;

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Social aspects 14. Welcomes initiatives by Member States and the Commission to make maritime occupations more attractive to young EU citizens; emphasises the need to provide lifelong learning and retraining for seafarers at all levels, on shore and on board, with a view to strengthening the professional qualifications and skills of the workforce; advocates also that more information on the sector be provided at schools and that more traineeships be made available; 15. Calls on Member States, within the scope of international conventions such as the STCW Convention and the ILO 2006 Maritime Labour Convention, to improve and modernise existing training programmes with a

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view to further qualitative development of maritime colleges; Stresses that seafarers from third countries must comply with satisfactory training requirements in accordance with the STCW Convention and calls on ship owners and national inspectorates to guarantee and enforce this, where necessary with the assistance of the European Maritime Safety Agency (EMSA); reiterates its request for rapid ratification by Member States of the ILO 2006 Maritime Labour Convention and early adoption of the Commission's proposal, based on the industry agreement, for incorporating key elements of the Convention into EU law; Calls on Member States to encourage the use of EU seafarers in their own fleets and to create sufficient facilities to prevent the migration of seafarers outside the Union; Welcomes the Commission's suggestion that Member States should promote cooperation between European maritime institutions, and encourages Member States to harmonise their respective curricula and training schemes in order to promote and develop high levels of qualification and advanced skills among EU seafarers; Emphasises that the social dimension and the working conditions of EU seafarers are closely linked to the competitiveness of the European fleet, and that it is necessary to facilitate labour mobility in the maritime industries throughout Europe and to ensure a fully functioning internal market without barriers and without unjustified restrictions on the provision of services; Encourages the exchange of good practices in relation to employment conditions and social standards, as well as an improvement in living conditions on board vessels, particularly through the development of information and communication technologies, better access to healthcare, better safety stan-

dards and training to enable seafarers to cope with the risks inherent in their jobs; 21. Stresses that inspections must be specific and risk-based and must not generate anysuperfluous regulatory pressure on the industry; 22. Hopes that the capacity of technological developments to compensate for the declining availability of seafarers will be investigated, but warns against introducing untried technology too hastily; 23. Calls on maritime port authorities to improve facilities for seafarers on ships waiting at anchor in roadsteads, including facilities for easier transportation from ship to shore and vice versa;

The environment 24. Acknowledges that considerable progress must be made on reducing emissions of sulphur oxides and nitrogen oxides, particulates (PM10) and CO2, and that this is necessary within the framework of the EU climate protection goals; stresses that the sector can contribute to the fight against harmful emissions and climate change and that public and private investments in research and development will be of particular interest in this regard; 25. Stresses that emissions reductions must be agreed rapidly and implemented with binding force via the International Maritime Organisation (IMO) in order to limit disparities in competitive conditions, but that this must not prevent the Union from taking initiatives aimed at further reductions by the fleets of its Member States, thereby encouraging the other continents to become competitive in this area; draws attention here to the major disparities between short and long-distance sea shipping, which must be considered when reaching agreements in the IMO; 26. Calls on Member States to make more use 27 Î?.Î§.

where possible in conjunction with neighbouring countries - of the option of designating maritime emission control areas, particularly for nitrogen oxides; emphasises that the establishment of further maritime emission control areas must not lead to distortion of competition within Europe; 27. Supports measures that encourage modal shifts towards maritime transport with a view to easing congestion on major roads; invites the Union and Member States to create logistics platforms at ports, which are essential for developing intermodality and strengthening territorial cohesion; stresses that international and EU rules must not hinder the efforts undertaken by national authorities in this regard; hopes to see the rapid and extensive introduction, within the framework of the Union for the Mediterranean, of 'motorways of the sea', which will help to reduce both pollution and congestion in land networks; 28. Supports in principle the amendments to Annex VI of the MARPOL Convention to reduce sulphur oxide and nitrogen oxide emissions from ships, adopted by the IMO in October 2008; is concerned, however, about a possible shift back from short sea transport to road haulage as a result of the introduction of the 0.1% sulphur limit, envisaged as of 2015, in the sulphur emission control areas in the North Sea and the Baltic Sea; calls on the Commission, therefore, to submit a relevant impact assessment to Parliament as swiftly as possible and by the end of 2010 at the latest; 29. Considers that all modes of transport, including maritime transport, must gradually internalise their external costs; believes that the introduction of this principle will generate funds that can subsequently be used primarily for efforts to encourage innovation; 30. Calls on the Commission and Member Î?.Î§.28

31.

32.

33.

34.

35.

36.

States also to work on alternative instruments such as the introduction of a levy on bunker fuel, preferably geared to the quality and environmental performance of the fuel, or the concept of 'green ports', where clean vessels are dealt with more quickly and/or pay reduced harbour dues; Calls on Member States to work within the IMO to set and implement appropriate and globally applicable environmental standards; Notes in this connection the breakthrough in inland shipping technology which has made it possible to reduce emissions from existing ships' engines substantially and the possible use of liquid natural gas as a fuel; calls on the Commission to investigate whether these techniques can also be used in seagoing vessels and how their implementation might be accelerated; Deplores the fact that the Copenhagen Climate Summit did not succeed in reaching any conclusions with regard to reducing emissions from seagoing vessels, but stresses that intensive efforts must continue, both in the post-Kyoto process and in the IMO, to agree global measures to bring about such reductions; invites Member States to make every effort to ensure that the IMO receives a mandate for the next international climate negotiations, with quantifiable reduction targets for maritime transport; Calls on the Union to lead this process at global level, notably in the IMO, with a view to reducing emissions from the maritime sector; Stresses the importance in European ports of interoperable technical facilities for the supply of electricity from shore to ship, which can considerably reduce pollution; calls on the Commission to ascertain in which ports these facilities can be utilised efficiently; Stresses that, as part of its research and

development policy, the Commission must give priority to innovation in the area of renewable technologies for use on vessels, such as solar and wind technologies; 37. Calls on the Commission to examine the potential for reducing and monitoring pollution by using intelligent technologies in the transport sector, notably Galileo; 38. Stresses the need to promote paper-free port and customs operations and to ease cooperation at ports between the various service providers and consumers through the use of intelligent transport systems and networks such as SafeSeaNet and eCustom, with a view to speeding up port operations and reducing pollution;

Safety 39. Appreciates the adoption of the Third Maritime Safety Package, and calls on Member States to implement the package speedily; 40. Advocates stringent checks on shipbuilding, including on the quality of steel used and on vessel design and maintenance, as provided for inter alia in the amended legislation on classification societies; 41. Supports the change of course in the Paris Memorandum of Understanding (MoU) on Port State Control, which entails replacing regular inspections with risk-based inspections, so that precisely those vessels which display numerous shortcomings are tackled effectively; 42. Calls on Member States and ship owners to seek to be placed on the Paris MoU 'white list'; calls on Slovakia, in particular, to make an extra effort in this regard; 43. Calls on national inspectorates and other national authorities to cooperate more closely in exchanging data on vessels and their cargoes, so as to reduce regulatory pressure but increase the effectiveness of inspections; calls for the rapid introduction

of an integrated information management system through the use and improvement of resources already available, especially SafeSeaNet; calls on the Commission to put in place as soon as possible an EU-wide cross-border and cross-sectoral surveillance system; 44. Is aware of the danger of piracy on the high seas, notably in the Horn of Africa area and the waters off the coast of Somalia, and calls on all ship owners to cooperate with government initiatives to protect them against piracy, along the lines of the EU's successful first naval operation, Atalanta; calls on the Commission and Member States to strengthen cooperation among themselves and within the United Nations in order to protect seafarers, fishermen and passengers as well as the fleet; 45. Notes that the global approach to combating piracy cannot be limited to an international naval force but should form part of a comprehensive plan aimed at promoting peace and development in the area concerned; is aware, too, of the need for full and correct implementation by ships of the self-protection measures adopted by shipping organisations, through the Best Management Practices approved by the IMO;

49.

50.

51.

Miscellaneous 46. Stresses that shipping is a global industry and that agreements ought, for preference, to be concluded on a global scale; considers the IMO to be the most appropriate forum for this; calls on Member States to make more effort to ratify and implement quickly IMO conventions which they have signed; 47. Acknowledges fully, moreover, the Union's role in the transposition of international rules into EU law and in the implementation of and support for maritime policy, for example by EMSA; 48. Underlines the need to speed up the modÎ?.Î§.30

52.

53.

54.

ernisation and expansion of port infrastructure capacities in anticipation of the expected rise in the volume of goods transported by sea; points out that this will require huge investments, which will have to comply with transparent and fair financing rules in order to ensure fair competition among European ports; calls on the Commission to ensure that the regulatory framework is coherent in this regard; Calls on the Commission to consider its communication on the EU's maritime transport policy until 2018 and this resolution as the basis for the forthcoming review of the Transport White Paper; Calls for a policy that promotes connections between ports and inland areas (dry ports and logistics platforms) in regions suffering from congestion, this policy to be incorporated into the TEN-T review; Underlines the economic and strategic importance of shipbuilding, which makes it possible to develop and use the new technologies applicable to vessels and to preserve crucial European skills that are needed to build new generations of vessels; calls for measures to support innovation, research and development, and training, with a view to developing a competitive and innovative European shipbuilding industry; Requests that it be obligatory in port modernisation and expansion projects to equip passenger terminals and new passenger ships with facilities for people with reduced mobility; Welcomes the initiative to develop a campaign to promote best practices among passenger transport and cruise ship operators in relation to passengers' rights; Calls on the Commission to take into account during the current TEN-T review the recommendations for the EU's maritime transport policy until 2018, notably

those concerning efficient integration of the 'motorways of the sea' and inland waterway transport, as well as the network of ports of European interest as integrating nodes; 55. Calls on the Commission to draft a comparable strategy for European inland waterway transport and to coordinate it with the present strategy, in order to promote the development of an optimised transport chain linking maritime freight transport and goods transport on inland waterways; 56. Calls on the Commission to submit without delay its promised roadmap, providing essential details to supplement its communication; 57. Instructs its President to forward this resolution to the Council and the Commission.

Summary of the rapporteur's point of view The rapporteur is favourably impressed by the Communication from the Commission. As the document deals with numerous subjects, his report is confined to a few priority points. The rapporteur primarily considers that the importance of the maritime sector cannot be stressed too much. Europe's maritime sector makes a clear and vital contribution both to the Community's internal economy and to Europe's transport system. The interests of the European maritime transport sector must therefore be assigned high priority in establishing general European transport policy. It must be realised that the European maritime sector mainly operates and competes on a global market. This global market also means that policy needs to be made to measure for maritime transport. The risk of reflagging, with all its adverse consequences for the environment, the quality of shipping and the maritime cluster, must not be underestimated. The rapporteur therefore considers that the Member States should do their utmost to encourage the (existing) use of their flags, for

example by providing tax facilities for tonnage taxation and fiscal facilities for seafarers and ship owners. The rapporteur looks forward to the new rules on State aid which the Commission has promised. He calls on the Commission to submit them in 2010. As regards employment and working conditions, the rapporteur considers that maritime occupations should become more attractive for young EU citizens. Particularly if maritime transport is to grow as expected, demand for crew members will only increase. It is therefore important that young

at global level in order to combat the risk of reflagging to non-participating countries. The rapporteur advocates the development of emission control areas in European waters. To this end, he calls on the Member States, where possible with neighbouring countries, to designate such areas, particularly with the aim of limiting NOx emissions. The Commission and Member States must also devise alternative measures to improve environmental performance. These might include a levy on bunker fuel geared to the quality and environmental performance of the fuel used, and the

favourable view of the decision by the Paris MOU to switch to risk-based inspections. This will prevent unnecessary inspections, increase the effectiveness of monitoring and reduce the red tape for those subject to inspections. Lastly, on the closely related subject of security, the rapporteur wishes to express his unconditional support for the Atalanta mission which is protecting seagoing vessels against piracy around the Horn of Africa. Ship owners ought, in addition, to take up the security options available from Atalanta and other international cooperation bodies against pira-

people of all ages should receive information about the sector. It is also necessary to hold out attractive career prospects to seafarers, both at sea and on shore. At the same time, it must not be made impossible for ship owners to hire thirdcountry nationals for their maritime transport operations, although of course it is important that such employees meet the training requirements and have the requisite professional qualifications. The rapporteur also considers that the legislation adopted in the ILO must be supported, ratified and adequately enforced worldwide to keep the working conditions of all seafarers up to scratch. The maritime transport sector faces major challenges with regard to the environment. The primary task is to improve the environmental performance of seagoing ships substantially, and emissions of SOx, NOx, particulates (PM10) and CO2 must be reduced. In this connection it is very important that agreements on the subject should be reached

concept of Green Ports. Under such a 'bonus/penalty' system, cleaner vessels would be dealt with in port more quickly than more polluting vessels and/or would receive a discount on their harbour dues. The rapporteur also has high hopes of the technological development of seagoing ships. In recent years, inland waterway vessels have made great progress in their environmental performance thanks to the development of new fuels and better engines. The Commission should investigate whether these technological developments can also be applied to maritime shipping. Finally, the rapporteur considers that electricity supply facilities should be established in sea ports to reduce emissions in ports. In the field of safety, the rapporteur is very curious about the practical details of the Third Maritime Safety Package. Member States are therefore called upon to implement the package quickly and correctly. The rapporteur also takes a

cy. As soon as possible, arrangements must also be agreed for appropriate trials of pirates who have been caught. The fact that in some cases apprehended pirates are currently released because they cannot be tried anywhere is hard to accept. Finally, as maritime transport operates on a global market, primary legislative responsibility rests with the IMO. Within the IMO, the European Union should play a proactive role with a view to securing the drafting and ratification of new rules. The EU also, of course, plays a very important role in transposing IMO rules into the EU acquis and implementing them. Particularly at the implementation stage, EMSA should play the role appropriate to it. Inspections and supervision should be performed at Member State level in close consultation with the Paris MOU. The rapporteur also looks forward to the Road Map for Maritime Policy until 2018 which the Commission has promised to submit.

Î?.Î§.32

INTL FORA

A new international agenda for shipping policy and regulation he first reason for the growing importance of marine transportation is, quite simply, the further progress and transformation in economic globalisation patterns. The re-organisation of manufacturing and commerce around global supply chains centred on China and the Far East is reflected in a huge maritime conveyor belt that sees mineral ores and raw material converge upon Asia, with millions of container boxes every year carrying the transformed products from Asia to the rest of the world. One feature of this trade is the increasingly asymmetrical nature of its geographic locus in the East. Another is its surprising resistance to the economic slowdown in the West as the growth of Asia continues unabated. The importance of shipping for 21st century governments and regulators is grounded in at least two more considerations. The externalities associated with shipping are now reaching well beyond the shipping sector, presenting policymakers with challenges to be addressed in broader arenas than used to be the case. A good example is sulphur emissions. Considerable

BY ALBERT BRESSAND1

While shipping has been an essential component of economic and international life since its origin, we are at the dawn of a new era. A new international policy agenda is emerging which needs to be addressed at the highest level by key governments and regulators worldwide, with major implications for the maritime industry. To identify and contribute to this agenda, the Center for Energy, Marine Transportation and Public Policy (CEMTPP) at Columbia University in New York has put in place an ambitious programme. The Onassis Public Benefit Foundation, the Maria Tsakos Foundation and Peter John Goulandris have greatly encouraged this pace-setting effort.

Î?.Î§.34

INTL FORA

By contrast, climate change brings to the table a new type of issue for which national action only makes sense within a tightly co-ordinated global system. This means that shipping will be looked upon not simply in terms of its technical contribution to such challenges, but also regarding its role in addressing climate change at the global level (see negotiations under way in the UN context on a global tax on bunker fuels that would be a central resource for the proposed Global Adaptation Fund).

progress has been made to reduce emissions of SOx from on-shore sources, to the extent that, in a couple of years, the majority of the sulphur oxide in the European air mass will come from sea-based sources. Obviously, this is bringing sea-based emissions to the attention of policymakers and agencies that had hardly heard of shipping just a few years ago. Even if less striking, a similar process has begun regarding the emission of greenhouse gases by ships. In this case, what matters is not local pollutants but the contribution to the global carbon equation. Whereas the contribution of shipping can still be considered limited, marine transportation as a whole has a carbon footprint higher than that of Germany. Moreover, the sector's emissions under business-as-usual are projected to increase by 150% to 250% by 2050 (compared to 2007 levels). Furthermore, not only are sea-based emissions increasing more rapidly but, together with air transportation, shipping happens to be among the small number of industries to which mainstream regulators are now turning their attention. As a result, the age when ship owners could deal with a relatively limited number of regulatory and policy arenas is now over, which is a tribute both to the achievements of the industry and to the natural tendency by regulators and governments to gradually extend their reach from the familiar to the less familiar. 21st century policymakers have to confront a new set of issues and challenges that are global in nature and go beyond simpler forms of interdependence between various countries' policies. The only such issue in the previous century was the risk of nuclear annihilation, and even then Î?.Î§.36

only a relatively small number of countries were really involved. By contrast, climate change brings to the table a new type of issue for which national action only makes sense within a tightly co-ordinated global system. This means that shipping will be looked upon not simply in terms of its technical contribution to such challenges, but also regarding its role in addressing climate change at the global level (see negotiations under way in the UN context on a global tax on bunker fuels that would be a central resource for the proposed Global Adaptation Fund). Indeed, a major challenge for the shipping industry in the 2010s is whether it will be perceived as a provider of global solutions or merely as a source of global problems. How the industry interacts with the full array of regulators and policymakers -and not just with those with which it is more familiar- will be essential in shaping this perception.

Columbia University intends to be the Ivy League American University that helps both the shipping industry and policymakers with the transition to this era. To that effect, CEMTPP has convened a group of distinguished scholars and has organised interactions with policymakers and industry leaders. As we speak, this work is being translated into Scenarios for Marine Transportation in the year 2030 that will put the growing governance challenge in the broader perspective of economic, technological and political transformation. We look forward to interacting with the global Posidonia community on these essential matters.

1. The author is Aristotle Onassis Professor in the Practice of international and Public affairs and Executive Director of the Center for Energy, Marine Transportation and Public Policy at SIPA, Columbia University, New York

MARKET

Asian waves over international shipping

It is common knowledge that world trade in general and the shipping engine in particular have depended on Asian markets, which continued to positively support and promote international trade thanks to their development programmes, from the ini-

BY JOHN C. PACHOULIS, General Manager Megachart Inc. President "Hellenic Shipbrokers Association"

tial financial crisis up to presentday recovery.

China's growth, according to its government's moderate target-setting, had been expected to reach a level of 8% this year. It now seems it will surpass the 10% mark, boosted by the country's huge internal market and competition among local steel mills, which has been driving product prices up. Consequently, the respective freights for capers have been higher than anticipated.

Last year, the remarkable and positive fact was the increase of imports of iron ore. In excess of importing the expected and planned quantities of about 380 million tons, China in fact imported nearly 515 million tons. This was amongst the main reasons which resulted in the smooth recovery of the shipping market from the 773 points of Baltic Dry Indices (BDI) in January 2009 to over 3,000 points in December. Points fluctuated from 1,500 to 4,660 during the year, contrary to predictions by some analysts who insisted that the market was about to collapse. This speedy recovery of the market exemplified that shipping, being an industry that serves international trade, had the strength, agility and potential to overcome the deep economic crisis. Please bear in mind that world trade lost some 13% of its volume during 2009 and has been predicted to rise approximately 5% in 2010. Î?.Î§.38

duction of steel are boosting the shipping market. Coal is another important factor affecting the dry bulk market. Coal was the leading Chinese import and increased by nearly 170% during 2009. This is in comparison to 2008, when imports nearly reached the 100m tons mark. Australia, South Africa, USA, Russia, Venezuela, Indonesia, Colombia and -in recent years- Vietnam are the main sources of this commodity. Although demand by traditional buyers, such as Japan and Europe, has substantially decreased, production has been offset by demand from India and China, which has had a positive effect on international shipping markets. Grain and sugar trading is steady, with exporting countries seasonally increasing the demand for transportation, especially in the Atlantic, the Mediterranean and the West Coast of Canada and the USA.

Meanwhile, the developed economies grow at a moderate pace of 1.3% 1.5% despite an uneven recovery and fragile growth conditions. Fortunately, Asian markets are delivering to the developed world more than it buys.

Freightwise, the continuous demand of raw materials mainly from the Chinese market allowed the shipowning world to be optimistic, despite a great number of newbuildings which will be delivered by 2012. At the end of 2009, the world's bulk carrier fleet was standing at 448.5 million dwt and the order book was for another 258 million dwt representing close to 58 percent of the existing fleet. The expected oversupply will probably be balanced by the expected increased demand, as the economic crisis is expected to decline by the time the majority of the newbuildings will be delivered. Obviously, older tonnage will be scrapped as well, as the average scrapping age of bulkers is nowadays 30 years, representing just 4.4% of the world's bulk carriers fleet. In the meantime, 15% of them represents vessels over 25 years and 25% over 20 years. It is obvious that with the new deliveries, the average age of vessels being led to scrapyards will be younger than the over-30-year norm of today, provided that the scrap prices will remain at acceptable levels. In the meantime, global economic prospects for 2009-2010 began showing considerable improvement compared to the predictions of 16 months ago. The fall in GDP is slowly decreasing and the promising growth forecasts for the Asian, South American and other developing countries are proving to be correct. Last year's industrial production seems to be less dramatic than expected. China is leading again with an impressive growth rate of over 16% followed by India at over 9% and Vietnam at 7 %. As nearly half of the world's bulk carrier fleet is connected to the demands of the steel industry, it is easy to understand that the raw materials for the pro-

Under the present trade conditions, we can predict that the shipping market will be stable throughout 2010. We might be subjected to the usual fluctuations, which we have been experiencing during the past few years. Shipping is also dependent upon reactions by the international financial and banking institutions, which may assist by implementing stimulus packages, in order to fight the economic crisis.

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39 Ν.Χ.

ANALYSIS

2010 - Latest developments

in Greek Shipping BY GEORGE XIRADAKIS, Managing Director of XRTC Ltd Business Consultants

Table 1. uring the past years the Greek owned fleet has been increasing both in terms of numbers of ships and in its deadweight capacity mainly attributed to the fact of the large orderbook placed by shipowners. In more detail, in 2010 there were a total of 3,996 of all kinds and sizes of Greek owned vessels with a total deadweight capacity of 258.1m representing 14.9% of the world fleet in terms of dwt capacity. The average age of the Greek owned fleet is 11,6 years while world fleet average age is 12.9 years (Table 1.). The Greek fleet orderbook numbers 645 vessels of total capacity 54.1m dwt while Greek shipowners control 20.9% of world tankers fleet and 18.1% of world dry cargo fleet in terms of dwt capacity. It is interesting to note that although total world orderbook which includes 8.677 vessels (all cargo carrying types and sizes) or 28% of the current world fleet, the Greek orderbook makes up for just over 14% of this (Table 2.). In addition to increased Greek newbuilding ordering there is also considerable amount of Greek activity in the S&P market (15.3% of the worldwide activity) since this segment still proves to be the "backbone" of Greek shipping (Table 3.).

The current situation in the global and Greek ship financing scene i. The Global shipping finance market The 30 largest Global shipping banks' lending capacity at the end of 2008 reached the amount of $370bn. This total exposure was mainly offered by

Greek Worldwide % Greek

2000 171 797 21.5%

2001 227 757 30.0%

Source: Greek Statistical Bureau

Table 2. No of Vsls

8.677

World N/B Orders 2010 Capacity % world (mil.dwt) fleet dwt

490

28%

Greek N/B Orders 2010 No Capacity % world of Vsls (mil.dwt) fleet dwt

826

69,8

14%

Source: Lloyd's Register of Shipping - Fairplay

30 shipping banks with a total loan portfolio of almost 90% of the total. These totals do not include the contribution of Far Eastern and Middle Eastern banks which do not make their figures available (Table 4.). In 2009 we witnessed a severe drop in fresh lending as well as a significant reduction of loan commitments. Global lending has been reduced main-

Table 3. S & P movements of second-hand vessels 2002 2003 2004 2005 2006 308 344 300 228 242 956 1319 1658 1281 1490 32.2% 26.1% 18.1% 17.8% 16.2%

ly as a result of: • Newbuilding cancellations eliminating bank commitments • Reductions of committed facilities for newbuildings • Utilization of the natural run off of the loan book via repayments, vessel sales, pre-payments

2007 369 1987 18.6%

2008 171 1300 13.2%

2009 167 1093 15.3%

Source: Clarkson's Shipping Intelligence

Ν.Χ.40

Table 4.

• Marked slowdown in fresh lending. It is also worth noting that Global shipping volumes for syndicated loans for 2009 fell from $87bn in the corresponding figures for 2008 to $32bn (Table 5.). ii. Asian shipping finance market It is known that Japan, Korea and China account for 82% of shipbuilding industry. It was therefore more than expected and Asian banks would accelerate a dramatic shift in the centre of ship finance. According to Marine Money source the state support of Asian countries is changing the Asian ship financing environment.

Source: Marine Money

Table 5. Global shipping volume vs. new money

Source: Marine Money

Table 6. Banks financing evolution of greek shipping

Source: Petrofin

India:The Indian National Shipowners' Association repeatedly asked the government to set up a Rs 100bn ($2bn) fund that will provide shipowners loans at competitive rates and encourage them to acquire vessels from domestic shipyards Malaysia:The government has allocated an additional RM 2bn ($542m) from its 2009 budget to a RM 1bn shipping fund, managed by Bank Pembangunan and a shipping venture fund Global Maritime Ventures. Taiwan: Shipowners can take advantage of new tonnage tax system and reduce tax burden by as much as 90% S.Korea: Korea Asset Management and Korea Development Bank have launched distress funds of up to 6 trillion won ($4.8bn) for ship acquisition. Korea Asset Management will raise the money from local financial institutions and private equity investors. China: The total shipping portfolio of Chinese banks is estimated at RMB 600bn-700bn ($88bn102bn). It is worth noticing the role of Chinese in shipping finance. This is a very crucial field which is viewed as the last fort. Their banks will play an important role worldwide as China has both cash and appetite to support Shipping industry. Chinese Shipping growth that has overtaken the Greek one and the Banks' cash flow are the ingredients that will assist Chinese banks to penetrate the Shipping Finance sector. Two years ago the Chinese banks capabilities were limited into Chinese yards financing and in internal Chinese shipping financing. 41 Ν.Χ.

ANALYSIS

Table 7. Banks nationality financing greek shipping

Source: Petrofin

Table 8. Banks involved financing greek shipping GREEK BANKS NATIONAL BANK OF GREECE EMPORIKI BANK ALPHA BANK MARFIN EGNATIA PIRAEUS BANK EFG EUROBANK FIRST BUSINESS BANK ASPIS AEGEAN BALTIC BANK BANK OF CYPRUS AGRICULTURAL BANK OF GREECE PROTON

NORWEGIAN BANKS

GERMAN BANKS HSH Nordbank DEUTSCHE SCHIFFSBANK HVB DVB COMMERZBANK BREMER LANDESBANK NORD/LB KFW DB-DEUTSCHE SHIPPING DEKA BERENBERG CORNER BANK

BENELUX BANKS FORTIS BANK BELGIUM FORTIS BANK NL ING

NORDEA BANK DEN NORSKE BANK

FRENCH BANKS OTHER BANKS CALYON BNP PARIBAS NATIXIS

UK BANKS THE ROYAL BANK OF SCOTLAND HSBC LBG SHIPPING FINANCE SANTANDER/ABBEY

Ν.Χ.42

SWISS: CREDIT SUISSE USA: CITIBANK IRELAND: BANK OF IRELAND KOREA: KEXIM CHINA: CHINA EXIM

There are some foreign shipping companies including some Greek ones that managed to enter into relations with Export-Import Bank of China, Bank of China and Industrial & Commercial Bank of China in relation to the financing of shipbuilding vessels in China. The specific bank became slowly slowly more international with its participation in syndicated loans arranged by foreign banks for non Chinese companies. Therefore, the bank managed to build gradually its know-how which together with the young people forming the core of the banking executives that will finance the industry. Some of the Greek shipowners who have placed newbuilding orders in Chinese yards include: John Angelikoussis, Villy Panagiotidis, Dinos Martinos, Tomazos company, Victor Restis, George Economou, Nikolas Tsakos, Basil Papachristidis, Latsis Group, Andrew Martinos, Gregory Kallimanopoulos, Evangelos Marinakis, Haris Vafias, Nikos Fistes and Diamantis Lemos. iii. The Greek shipping finance market The Greek ship lending portfolio of drawn and committed amounts at the end of 2009 was $67.02bn while the number of banks involved in Greek shipping finance amounted to 39. These numbers show the reduction of the total portfolio compared to 2008 figures for the same reasons identified above. The number of banks has been also reduced from 41 to 39 due to mergers and acquisitions (Table 6.). Although Greek banks involved in the financing of Greek shipping are arithmetically more than of those of different nationalities, they are outweighed in terms of commitment size by the German banks Greek banks' commitment to Greek shipping finance is of almost 24% ($16 billion) of the global commitment. In contrast German banks have the largest commitment with a total of $19.3bn, an impressive participation of 29% followed by U.K banks with a total of $16.4bn and 24% participation (Table 7.). iv. The Banks financing Greek shipping The banks involved in the financing of Greek shipping are presented in Table 8 per nationality.

EUROPEAN POLICY

Revisiting the Greek crisis: Did the eurozone trade without coherence? >

Three well respected, skilled and experienced Greek Members of the European Parliament explain the reasons behind the agony for our countryâ&#x20AC;&#x2122;s financial future as well as the anxieties for Europe and its survival as we know it today.

BY ANNI PODIMATA Member of the European Parliament Vice-President of the Committee on Industry, Research and Energy, Member of the Committee on Economic and Monetary Affairs, Member of the Special Committee on the Financial, Economic and Social Crisis

After several weeks of divergent scenarios and rumours on the so called "Greek crisis" the decision of the European Parliament to hold a hearing under the auspices of its Economic and Monetary Affairs Committee had one and clear intention: to end the endless circle of unreliable rumours severely damaging not only the Greek economy but also eurozone's credibility altogether and to provide European citizens and their representatives with liable and integrated responses.

t is my belief that this is what is reflected in the outcome of this hearing. To the detriment of those who have anticipated this hearing to be a "public trial" of Greece, the presentations of the high level speakers but also the majority of

BY THEODOROS SKYLAKAKIS MEP Committee on the Environment, Public Health and Food Safety

N.X.44

the interventions of the MEPs that took the floor on the 14th of April, did not focus on putting blames but on showing the way ahead, highlighting the lessons that can be learned and the way to deal with the inefficiencies and weaknesses of the European Monetary Union that are hidden behind the Greek case. The Greek government's and above all the Greek citizens' gigantic and overwhelming efforts to implement extremely severe measures and achieve fiscal consolidation in the shortest timeframes have been widely recognized and supported by almost every speaker and participant. Commissioner Olli Rehn has stated his conviction that Greece is now back on the right track of meeting its deficit reduction targets, whereas Mr Radermacher, Director General of Eurostat, has confirmed the substantial improvement of Greek statistic data. Even on the problematic issue of the swaps' use and their controversial role regarding the national accounting reports, the Commission's representatives were rather reluctant to point fingers against only one member state, stating at the same time the community legislation loopholes existing until 2008.

What was rather common view expressed by the majority of those who intervened was that Greece is just a symptom of a weakness that affects Eurozone in its core. The events that followed the hearing, with extreme speculation pressures led from the markets and international rating agencies towards other countries like Spain and Portugal as well as high risk of spill over effects to euro's stability, have already proven that. And what I find really encouraging was the rather common view expressed on how to proceed not through "punishing or condemning one member state" but through the strengthening of economic coordination, reinforcing and adapting European tools on crisis prevention and management and implementing efficient supervisory rules that can combat speculation against national economies and the single currency. In that sense the European Parliament has through this hearing - vigorously assumed its role as a democratic accountable European institution, ready to debate on European solutions to European problems and to commit to the so long debated and hardly demonstrated in the last few months principle of European solidarity.

The latest news reports concerning the Greek economy are grave. Unfortunately, as things stand, the bail-out mechanism is the last chance for Greece, before it has to deal directly with its creditors. If we fail this time, there will be no more bail-out mechanisms; there will be no more money to borrow.

n 2009, Greece was in the unenviable position of being the country with the second largest deficit in the world, the third largest public debt in the world and the largest public debt owed to foreign creditors. It also had a huge problem in terms of its competitiveness. No other country in the world had such a lethal combination. Thus, the more the markets scrutinised our situation -and we made that easier in the way we handled our international image over the last few months- the more worried they became.

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EUROPEAN POLICY

The Greek political system will regain the confidence of the public only if it shows courage by recognising its responsibilities and carrying out its duty towards the country and the Greek people.

Obviously, we cannot solve the Greek problem through more public expenditure. A Keynesian solution cannot solve the Greek equation, because we don't have money to spend anymore. So we must find an answer despite the unavoidable recession. The IMF's usual solutions are not easily applied to the Greek economy (e.g. we can't devalue), so we need to put forward our own solutions. That is why I have asked my party to propose a wider political agreement on the basis of some necessary and important structural reforms such as:

BY NIKI TZAVELA Vice-Chair • Delegation for relations with the United States Member • Committee on Industry, Research and Energy (Coordinator) • Delegation to the EU-Turkey Joint Parliamentary Committee

1. A concrete and fully elaborated plan on further reducing public expenditures and increasing taxes (and a long-term commitment to decrease taxes to businesses when we get over the acute phase of the crisis). 2. A ten-year moratorium on hiring in the public sector. 3. Increase of the retirement age to 66 years, with no exceptions. 4. Complete liberalisation of working hours for small enterprises. 5. More flexible labour relations for all new staff. Nowadays, Greece cannot choose between pleasant and unpleasant measures. Unfortunately, the choice for our country is between being unpleasant and effective and (less) unpleasant and ineffective. The Greek political system will regain the confidence of the public only if it shows courage by recognising its responsibilities and carrying out its duty towards the country and the Greek people.

acking central economic governance, the eurozone traded without coherence, while sixteen member states developed at a onetwo-three speed scale rate, resulted in a vicious circle of fragile, terrifying interdependency. The Greek problem is a eurozone problem; and the eurozone problem is a global economy problem. Due to this, the EU is rushing to develop an economic governance system. When asked by me, the Commissioner Mr. Olli Rehn answered that "The setting up of the economic governance of the eurozone is a number-one priority." However, he avoided to breach the subject of a provisional timetable for the establishment of such a system. After an economic governance has been developed, will we see the prospect of a unified European model development. There won't be a case of "investing in a single member-state any more." The era of "investing in Europe" is rising.

Ν.Χ.46

The Greek crisis has revealed all EU weaknesses and has confirmed that the only achievement of the European Union -i.e. the euro- has not been a solid one.

Within this context, shipping will be of primary importance for a coherent European development. Continuous EU partnership is required, in order to strengthen co-operation with its Southern Mediterranean partners on the optimisation of national support schemes and the development of common positions on regulatory issues in the energy field. These are some of the issues I clearly pointed out when expressing my viewpoint on the Union for the Mediterranean, which can only be achieved through the exchange of best practice and technological progress from initiatives and partnerships such as the Barcelona Process, the European Neighbourhood Policy, the EuroMaghreb Energy Community Treaty, or the MEDENEC Project on Energy Efficiency in the Construction Sector. Energy production is becoming increasingly important in the Mediterranean area, while new key players are emerging as far as supply and demand are concerned. The Mediterranean has enormous and largely untapped potential in the field of renewable energies such as solar energy, wind energy and hydropower. This dramatic change that is upon the Mediterranean countries will transform the energy market and will lead to further innovation in processes, technologies and, perhaps most importantly, financial aspects. Shipping can benefit to a great extent by providing accessibility and transferability of energy to the Mediterranean world by linking source and destination. I am certain that we have to be very keen on this issue in the near future, as it will determine European energy policies at the micro level and international energy policies at the macro level.

ECONOMY

This situation which has been developing for some time has been identified as an opportunity for attack. There is no secret that the dollar has been a chronic problem for the last three administrations of the US and that the euro has been its principal headache after manifestations by other big international trade players that they would prefer to keep their accumulated external trade balances in euro, rather than in dollars.

It was natural that the shortcomings in the design of the euro would be seen as an opportunity to end competition between the two currencies. The dollar side also had the experience of the "Asian tigers" saga eleven years ago which has taught many a lesson to its financial warfare generals, while the euro side was totally inexperienced in that type of action and as it turns out - unable to put together any worth talking about defence. So, the case was set and Greece has been chosen as the eurozone's weakest link due to its relatively big external deficit financing requirements, but also due to the presence of a suitable political scene, i.e. a newly elected government with a strong mandate to restore the country's proper function.

The Recent Greek Experience of Financial Warfare BY DR. ALKIS JOHN CORRES, Chairman of the Hellenic Association of Maritime Economists

Greece is a small country by any standards amounting to under 3% of the eurozone's GDP. Like many other EU members it has had to live with the shortcomings of an ill designed euro which has led it to accumulated deficit, as a result of inability to manage its economy individually via the classic tools of interest rate and currency adjustment. Other country members have fallen in the same trap, ending up with excessive debt service costs.

Î?.Î§.48

During the last eight weeks, or so, the entire arsenal has been put to work, starting as before in Asia, from the rating agencies which, one after another, have downgraded Greece's rating, ultimately declaring its bonds as "junk". The ball from the agencies went to Wall Street's hedge funds which have seen an opportunity in playing along by betting on Greece's inability to escape from the financial stranglehold. Bets of all sort have been placed with intent to profit from this country's eventual failure to roll over its debt and its subsequent bankruptcy, and these were followed by numberless press reports, expert opinions and leaks intended to make the bets placed successful. Experience tells us that once this defamation spiral starts to work, it does not stop until it reaches the bitter for the country, not for those who placed the best - end.

ECONOMY

tical use if the euro had gone under in the meantime, following similar requests for assistance from of other eurozone members in debt rollover trouble, adding up to trillions of euros. Under the existing regime, one or two big country bailouts would be sufficient to put paid to the common EU currency.

The eurozone bosses finally have woken up and realized that, what appeared to be an unfortunate development in relation to one of its members, was in fact an all out attack on their euro. With the characteristic inefficiency of multilateral negotiations and long resistance from Germany, they have finally managed to assume, together with the IMF which has been asked to join - in for unknown reasons, an amount which would give comfort to Greece whose spread had reached 1,000 points rendering the servicing of its debt extremely expensive. However, this facility was tied to draconian undertakings by the Greek government which would mathematically plunge the economy in deep depression for a decade and half a million people out of work, mainly from the public sector. It therefore became evident that while the IMF's fame for tough measures is still justified, the cooperating governments' ability to judge the readiness of the Greek people to subject themselves to economic slavery left a lot to be desired. The relevant bill approving of these terms and conditions, which have been tied to a questionable delegation of sovereignity to the lenders on a bilateral basis, has been passed from the Greek parliament with the entire opposition, bar the far right party, voting against it. As always nevertheless, the fate of every bill is decided on merit by the people to whom it is addressed, rather than the parliamentarians who have voted in favour. As the facility will be made available in twelve quarterly installments, following reconfirmations of meeting the relevant targets, there is doubt this will become feasible amid protests, strikes, and generalized economic hardship to the tune of 50% off the disposable income for those still employed. Failure in reaching the targets will put further installments on hold and the prospect of a collapse will become visible. A bankrupt member of the eurozone would be the last thing Europe would like to see. After many months of delay, the EU Commission has finally pronounced its intention to investigate the role of the rating agencies and its wish to set up one of its own for EU members. It will be a welcome development which however would have little pracÎ?.Î§.50

What can the EU do then? In a recently held public opinion survey in a maritime website, the majority of opinion givers held that the best way out would be a federal - like structure in the EU, bringing together all surplus and deficit making eurozone members and issuing its own Eurobonds and ensuring that the principle of European solidarity actually works. It is widely recognized that the absence of such a mechanism has resulted in the present situation. There is now evidence that the common sense of the survey respondents is vindicated, albeit with a surprising twist. In an unusual, yet positive, display of initiative the EU has agreed to the establishment of a mega rescue package of around one trillion US dollars aspiring to stabilize the world markets and to protect the euro from the consequences of the so called "Greek" crisis which has risked repeat the global financial freeze the world had experienced back in 2008 as a result of the "toxic" bonds' crisis. In addition, and perhaps more importantly, the European Central Bank has agreed to a more active role in the secondary bonds' market through buying eurozone member governments' debt. All would be well, if the salvation recipe had retained its European flavor. Many observers have expressed surprise though at the announcement that the IMF would be a permanent participant in negotiations between eurozone country members and the two EU institutions, namely the ECB and the EU Commission. If you want my personal opinion, this is something that will create more problems in future than it will resolve. Despite the above developments, the situation in Greece will continue giving rise to concerns as the smooth progression of the Greek package of 110 billion euros rests on the assumption that the burdensome package of IMF inspiration will finally fly. Time will show. The good thing is that Europe has finally awaken to the inherent vulnerability of its present status and to the urgent need for progress as a means of retaining what it has achieved so far. Halleluiah.

INTL CONFERENCE

Is marketing a compass or a pain for shipping? Troubles, trials, and agonies characterize global economy over the past 2 years and practitioners and academics are eager to find new solutions to ensure viability in these changing times. Moreover, this turbulent climate doubts the traditional role of the shipping industry and challenges the sustainability of conventional shipping strategies in an era where these practices intertwined with social, economic, regulatory, legal, ethical, ecological and consumer concerns on a global scale. However, while the word "sustainable" is part of today's vocabulary, the way to be applied to the shipping, from mercantile and passenger ships to ports and logistic industries is not at all easy.

t requires a multi-disciplinary approach to pursue greater efficiency and increased awareness of the market environment in which each and every shipping company operates. This environment, is getting larger and larger as the global market place is continuously expanding due to changing economic climate, deregulation and advancing technologies. At the same time it contains myriad of conditions and demands posed mainly by customers or markets. It is thus paramount for the "traditional" ship owner, port authority or transportation specialist to observe the irrelevance of the traditional walls that divide shipping practices from other industries' methods, recognise their customer' needs and serve them at the best possible way.

The above provide the motive behind the formation of the International Forum on Shipping Marketing (IFOSMA) series. This IFOSMA series represents a cutting edge for professionals, practitioners and scholars from various disciplines and countries who wish to have a full appreciation for the key issues that affect the strategic and tactical activities of their firms and provide them Î?.Î§.52

with the ability for sharing ideas, theories and practices prevalent in dynamic shipping environments. It focuses on the examination and application of marketing theories and practices to bolster individual shipping companies' value and societal welfare. The 1st IFOSMA has the theme "Can marketing theories and practices relieve shipping agonies: A new dialogue" and will take place at the 11th of June 2010 in Piraeus, Greece from 10.00 am to 14.00 pm in the context of the POSIDONIA exhibition activities. It is co-organized by the European Institute of Shipping and Transport (Eu.I.S.T.), the Department of Maritime Studies of the University of Piraeus and the Greek Marketing Academy (ELAM) and it will be hosted onboard the cruise ship "CRISTAL" of Louis Hellenic Cruises (our gold sponsor). This 1st IFOSMA is organized around one track where professionals from different areas of shipping, such as passenger shipping, mercantile

BY ANGELOS PANTOUVAKIS M.Eng., M.B.A., Ph.D. Chairman, European Institute of Shipping and Transport

shipping, chartering, banks, insurance agencies and Clubs etc. will exchange views and share experiences relating to the following questions: a) how do shipping firms can best serve their customer segments? b) how can they identify other unexploited markets in order to remain not only viable but also profitable? c) how do they embrace new technologies for commercial purposes? d) how can they develop service offerings highly valued by their customers? and e) how and when can they apply the marketing thought and activities to confront the threats and enhance the opportunities of the radical and unpredictable shipping environment. It is the intention of the organizing committee that this forum will provide the opportunity for the participants not only to contribute their knowledge and sharing marketing experiences from professionals from different areas of shipping, such as passenger shipping, mercantile shipping, chartering, banks, insurance agencies and Clubs etc. and to interact with each other as well as enjoying the pleasant ambience of CRISTAL whilst onboard.

PUBLI

Rebuilding of Piston Crowns

Visit us at Posidonia Exhibition Stand 263

Rebuilding of vital components such as large 2-stoke diesel engine piston crowns, requires experience, technical know-how and proper equipment. The aim is to produce a piston crown completely identical to an OEM new piston crown that can perform similarly in any aspect.

The first step is to clean thoroughly the crown, inspect it and fill the appropriate measuring report. After that the crown is placed on a horizontal turning lathe where rough machining of grooves, diameter and combustion surface is carried out in order to remove any worn and fatigued surfaces. When the roughing out machining is done, then the crown is inspected by the means of NDT. More specifically the technical personnel of our approved and accredited Quality Control Laboratory, uses fluorescent penetrant fluids in order to inspect if there are any defects or cracks that need to be repaired before the procedure continues. After the NDT inspection the crown is placed on a programmable submerged arc welding (SAW) machine. The operator preheats the crown to 250-300οC for an hour and then he rebuilds the whole crown using appropriate filler wire. That

…The science behind Rebuilding!!! Industrial Park of SHISTO 2nd Block, 2 nd Street Perama 18863, Greece • Tel: +30(210) 4004757, Fax: +30(210) 4326399 • Web: www.kimi-sa.com Ν.Χ. 6

means that the area of the grooves will be completely restored. Moreover several layers will be deposited until the combustion surface reaches again its original geometrical profile and the total height of crown is achieved. Also the whole outer surface of the crown will be rebuilded form the lower point (maximum diameter) up to the highest point (minimum diameter). The rebuilding process using SAW requires skills and deep knowledge of welding aspects and parameters. After the SAW process, the crown is placed in a stress relieving furnace, where a programmed heating and cooling cycle takes place for several hours depending on the crown size. The purpose is to remove any residual stresses form the SAW process. The next step is the machining of the rebuilded crown back to its original dimensions. This is carried out on a vertical CNC turning lathe which is guided by a modern CAM system. The operator needs only to position and clamp tightly the crown on the lathe chuck. The rest is done by CAM. Our engineering design department produces 3-D models of all types of piston crowns according to drawings. These models are

then used to produce the machining code. The operator has only to choose the appropriate machining program depending on the type and the model of the crown to be machined. Then the machine follows exactly the pattern of the engineering model. The result is a piston crown completely identical to a new OEM crown. The grooves are machined to the original reference position according to the drawings, with appropriate allowance for the hard chrome layer. The geometric profile of the combustion surface is regenerated and vital geometrical characteristics such as the total height of the crown, the lower and upper diameter as well as the conicity are restored.

specifications, and the maximum discrepancy of the absolute parallelism between groove sides is 0.01mm. During groove grinding the operator controls the layer thickness with a special plating thickness measuring instrument.

After machining the crown once again is cleaned thoroughly and undergoes a certain procedure during which all sides of the grooves are plated with a hard chrome layer. It is an electrolytic process during which hard chrome is applied and depending on the required layer thickness it might last up to 5 days. Next, is the grooves grinding. That machining process is carried out on a special piston ring groove grinding machine, where the grooves are grinded to their final dimensions according to OEM clearance

If top quality is what you are looking for then KIMI has the cost effective solution.

The final result of the rebuilding process that described above is a crown, completely identical to an OEM new piston crown, ready to perform accordingly with the highest reliability and maximum service life. The rebuilding process is our standard and only process for piston crowns. Through this we are supplying piston crowns of the highest quality. We imply the same philosophy for exhaust valve spindles and seats, cylinder heads, piston rods and cross head pins.

SPECIAL REPORT

The shape of things to come

Five members of the Greek Shipping Community -representing the next generation of ship owners- answer questions submitted by the editorial team of Naftika Chronika, explaining current trends and scepticisms in the Greek maritime industry.

ION VAROUXAKIS, CHAIRMAN PRESIDENT & CHIEF EXECUTIVE OFFICER FREESEAS INC. • HARRY VAFIAS, PRESIDENT & CEO STEALTHGAS • GEORGE D. GOURDOMICHALIS, PRESIDENT, EXECUTIVE DIRECTOR G. BROS MARITIME S.A. • JOHN A. XYLAS, PRESIDENT & CEO ARISTON NAVIGATION CORP. • THEMIS PETRAKIS, VICE PRESIDENT IOLCOS HELLENIC MARITIME ENTERPRISES CO. LTD.

Ν.Χ. 56

01QUESTION What are the biggest challenges for a Greek ship-owner who operates from an EU State?

>> ION VAROUXAKIS CHAIRMAN PRESIDENT & CHIEF EXECUTIVE OFFICER FREESEAS INC.

I should say that this business is a challenge in itself. I could list a number of challenges at global, European, national, even personal level. However, I strongly believe that there is one very basic challenge that needs to be met: how to cater for 90% of the world's goods transportation, which as everybody knows is seaborne, in a safe and efficient way. It is true that, in our times, we are facing a changing financial environment; the pool of talent availability is becoming scarce in Europe and the shift of focus from traditional hubs to the East sets out a new dimension to international trade.

>> GEORGE D. GOURDOMICHALIS PRESIDENT, EXECUTIVE DIRECTOR G. BROS MARITIME S.A.

I will limit my response to the challenges faced by those ship owners who operate from Greece, an EU State with a host of problems, currently being dealt with under the auspices of the EU. As we all know, the Greek state provides for a very clear legal framework for ship owning and management companies to operate. Law 89, as it is widely referred to, has benefited Greek shipping and kept it domestic and has led to the creation not only of a dynamic shipping cluster in Piraeus but also to the creation of a well educated and highly trained professional force over the past forty years or so. The presence of all major shipping service providers, classification societies, banks, or insurers in Greece is unmatched by any other shipping centre. The continued evolution of common policies within EU member states has also led to the imple-

mentation of rules, regulations and laws that may have a negative effect on the established smooth operation as we know it in Greece. There are examples of minor problems, such as changes in the legal framework concerning the import/export of tax-free ship equipment, or the use of a European VAT number but these are mostly procedural and are not of great concern. There are also more serious issues, such as maritime education and its standardisation and accreditation, or general policy rules that govern banking transactions. However, the real challenges that the EU has brought about are a combination of the evolution of the Greek economy to meet EU standards and realities resulting in the fiscal chaos that we are experiencing. This inadvertently places pressure on the Greek government to succumb to pressures of the EU central policy makers and effect changes in the current modus operandi of ship owners. Along with these changes, there has to be an evolution of the Greek work force, which is either financially uncompetitive or, in certain cases, unable to compete on availability. The latter change mostly applies to shipboard personnel. Most challenging is also the difficulty of adjusting the philosophy of free markets that ship owners operate into the highly con-

trolled and complicated fiscal system we live in. One would possibly not recognise these issues, if it were not for new shipping centres growing dynamically in the vibrant economies of Dubai, Singapore and Shanghai, which have learnt from our past and are instituting flexible and tax-friendly regimes to cater for our industry. It will not be long before the ship owners in these places overtake Greek shipping as No1 and enjoy the respect of their governments in a tangible form. This is something that we lack here, due to both our government's shortcomings, but also due to the fact that historically, the EU has shown complete lack of interest towards shipping.

>> JOHN A. XYLAS PRESIDENT & CEO ARISTON NAVIGATION CORP.

The challenges Greek Shipowners will face, regardless of the location of their operation are the following: a) Excessive supply of tonnage from the reckless orders of the last 3-4 years, which will overshadow demand and push rates down. b) Lack of traditional Bank finance, as a result of the financial crisis, which whenever available, will be more expensive than historical levels. c) Lack of National Cargoes. d) Chinese central government policy encouraging local owners to invest in shipping and expand further the national fleet. e) Over-regulation of the industry, especially with regard to environmental issues. f) Over dependence on Chinese seaborne trade. In addition to the above, operating from an EU state poses two additional challenges: a) Tax concerns and b) Generally higher overheads due to the Eurozone cost of living. 57 Î?.Î§.

02QUESTION >> ION VAROUXAKIS CHAIRMAN PRESIDENT & CHIEF EXECUTIVE OFFICER FREESEAS INC.

As I usually say, shipping is a centuries-old industry with its own self-correcting mechanism, capable to adapt and face new challenges, as they emerge. However, it also calls for alertness and readiness to see forthcoming changes and needs. The Greek shipping community has always been in the forefront. Traditional expertise is where you build on. Our continuous quest for higher standard and optimised design vessels, for suitably trained and qualified crew and personnel, for keeping maritime tradition alive, provides a solid foundation for overcoming the challenges ahead.

>> GEORGE D. GOURDOMICHALIS PRESIDENT, EXECUTIVE DIRECTOR G. BROS MARITIME S.A.

If we are not prepared, then we are in serious trouble. Naturally we must look towards our experience and tradition, which provides us with a fair base to compete, but this is not sufficient on its own. Concerted efforts in ensuring that we continue to meet the rigorous demands of today's financial and operating environment are necessary. The continued replenishment of our pool of professionals -regardless of nationality- is a must, not only on shore but also at sea. We should always keep in mind that we are a global business, so it is in our interests to train and employ professionals from a global pool. Adaptability and flexibility, as well as a Î?.Î§. 58

Is the Greek shipping community prepared to meet the unanticipated challenges of the future? Do we need more than our traditional expertise to overcome any possible difficulties that may interrupt our performance? resourceful brain, have been traits that the Greek shipping community has looked to when having to cope with challenges. As these traits are dynamic, they evolve at the same time as the community is refreshed by new participants. The massive renewal of the Greek-controlled fleet over the past decade and the entry of Greek owners into segments traditionally not favoured, such as gas carriers, drill ships, cape size bulk carriers during the same period is yet another sign that the community is evolving and is meeting the challenges as those appear on the horizon. We need to see clear signals from the various international organisations as to where we are heading on issues such as carbon emission controls and this requires active participation from our community in the formulation of policy. We need to find an ally in the Greek state when it comes to formulating central EU policy. We need to find an ally in the Greek state when it comes to long overdue and necessary changes in both the Greek flag manning requirements but also in maritime education. As with international organisations such as the IMO, there needs to be industry activism to promote our positions and to ensure that our interests are safeguarded, thus curtailing possible unexpected challenges in the regulatory realm. Past performance is never a guarantee of future performance and therefore, the continuous effort to provide safe, reliable and competitive shipping services is ultimately dependant on how well-prepared we are. Preparation comes with a combination of constant upgrading of knowledge and quality -which is mostly related with the human element- and clarity as to the regulatory environment we operate in. If we, the Greek shipping community manages to master these issues, we should be well-prepared for any challenges that lie ahead.

>> JOHN A. XYLAS PRESIDENT & CEO ARISTON NAVIGATION CORP.

The Greek Shipping community has shown over the years a tremendous flexibility and adaptability to an ever changing international business environment. This has proven to be one of the most important competitive advantages we have. In this respect, I am confident the community is adequately prepared to meet the challenges as described in my answer to your previous question, as well as any unanticipated challenges the future may bring. Greek shipping has survived many difficult situations and will continue to thrive. Our 'traditional expertise', as you put it, as simple as it may sound, it certainly includes a number of unique virtues. Greek seamanship, a result of years of combined sea experience, which has become part of our DNA, our flexibility, our ability to see ahead of the others, is what has established this shipping nation as an uncontested world leader.

03QUESTION

Greece is celebrating 40 years of outstanding performance as a leader in the international shipping arena. How can our country maintain its pivotal role in shipping in these challenging times?

HARRY VAFIAS PRESIDENT & CEO STEALTHGAS

These are indeed really challenging times for all of us. Greek shipping has successfully navigated through many crises in the past but the one that the Greek economy is now facing is unprecedented. There are two schools of thought: (a) The EU and the IMF attack shipping through new taxes and measures, pushing the bulk of the Greek owners abroad; or, (b) Nothing new is introduced and shipping continues to prosper

despite the fact that Greek banks are less able and willing to lend money and life in Athens has become increasingly dangerous for businessmen in general. Moreover, I am certain that sooner or later the Chinese will overtake us as the largest shipping nation since they have enjoyed a number of advantages, including cheap labour, abundance of finance, their own cargoes, and a strong backing from their government.

THEMIS PETRAKIS VICE PRESIDENT IOLCOS HELLENIC MARITIME ENTERPRISES CO. LTD.

The answer lies within the question itself: "Greece is celebrating 40 years of outstanding performance in the international shipping arena". I firmly believe that, if a formula has been successful, there is no need to change it. Most of the traditional names in the Greek shipowning industry have been successful, not only because of their instinctive ability to foresee the markets, but also because of their conservative approach. The philosophy of reaching as far as your arm extends has been -at least in my personal opinion- what has rescued our industry during these turbulent times. Those who did not get carried away during the 2003-2008 period of great euphoria and did not invest in shipping more than they could cope within a possible downturn of the market were not only able to maintain their wealth after the market took a turn for the worse in the autumn of 2008, but were also capable of taking advantage of the opportunities that were presented shortly afterwards. Let us also not forget that shipping claims to be the most important industry in our

country, a vital asset during these troubled times that Greece is going through. In spite of any temporary cash flow requirements, it is the national duty of our elected leaders to nurture this asset and protect it, the same way that is has been protected so far, regardless of bias or petty politics. In other words, it is imperative that the industry's privileged status in the Greek legal and tax system be upheld in order to maintain its competitiveness for the benefit of Greek shipping itself and the economy of our country. Furthermore, Greece should continue to take steps to enhance the competitiveness of the Greek flag and, together with shipping companies, promote the seafaring profession to the younger generations of aspiring seamen. I believe that the experience, market sense and the true connection with the sea that exists in the older generation of shipping professionals, combined with the education and fresh ideas of the younger ones, will ensure the successful proliferation of Greece's pivotal role in shipping.

04QUESTION Can small or medium size family run Greek shipping companies maintain their competitive advantage in the near future? What changes are necessary?

>> HARRY VAFIAS

>> THEMIS PETRAKIS

PRESIDENT & CEO STEALTHGAS

VICE PRESIDENT IOLCOS HELLENIC MARITIME ENTERPRISES CO. LTD.

As time passes, smaller companies are realising that competing in a globalised market is becoming more and more difficult. Shipping is a capital intensive business and in order to keep a leading position you need continuous investment in new ships, a well-trained workforce and quality management. In Greece, we have about 850 shipping companies, 90% of which are operating fleets of less than 5 vessels. Of course, with careful strategy, these players will remain or even prosper. However, it is a fact of life that larger corporations with economies of scale, financial liquidity and the approval of major charterers are the ones that will reap the benefits when the worldwide crisis ends. It is unfortunate that with so many smaller companies we haven't seen a wave of consolidation i.e. mergers and acquisitions. I am sure it will come sooner or later but don't expect too much, since all Greeks want to be the captains of their own ships.

There is no need to mention the advantages that a small/medium-size, family-run shipping company has, as opposed to public shipping companies, or the larger private ones, since anyone whether involved with shipping or not- knows or can guess what they are. So long as a small/medium-size, privatelyowned, company continues to operate in a professional, efficient and responsible way and always manages to adapt and respond to the financial, regulatory and institutional requirements and challenges of the future there will always be a market share for such businesses. In such organisations, the shipowners usually bear a large portion of the responsibility. It is imperative that they continue to choose the right people to work with them and assist them in the smooth running of the company. Furthermore, it is important for the company to maintain excellent relations with its business partners, be it insurers, charterers, bankers, or executives, employees and crew. A financially robust and well-managed company, whether small, medium, large, private or public, will always be able to claim its fair share of the market.

POSIDONIA

Supporting the

Greek Maritime Industry

Once again our country is hosting POSIDONIA, the glamorous world maritime event which signifies the leading role of Greece and its shipping industry in the highly competitive world of international maritime transport.

ut how different are things today in the country compared to the general economic and social atmosphere two years ago, as a result of the dramatic fiscal and financial crisis which has led to the rescue package involving austerity measures and structural changes agreed between the Greek Government and the 'troika' of the IMF, the Eurogroup countries and the European Central Bank. Since then we have had the experience of the great recession in the freight markets as a consequence of the financial crisis in the West and the subsequent recession in the world economy.

B BY PROFESSOR JOHN TZOANNOS Former Member of Parliament and Secretary General of the Former Ministry of Mercantile Marine

Fortunately, the Greek Shipping industry has survived the crisis unscathed and without any significant negative impact on the employment of Greek seafarers. This is in contrast to the dramatic experience of laid up vessels and Î?.Î§.64

unemployed seafarers during the previous great depressions. The picture is now of a healthy, modern shipping industry able to sustain successfully the volatility of shipping markets, as well as the increasingly stricter regulatory environment. This is a source of hope for the future, in the sense that 'the wooden walls' of the Delphic Oracle will continue to constitute a basic pillar of support to the national economy. On the other hand for the first time in their history POSIDONIA takes place without the existence of the unified ministry of Mercantile Marine which represented an holistic system of regulation in maritime affairs. In essence the 'one stop shop' that stakeholders in the shipping industry, shipowners, seafarers, etc. were used to deal with in solving their problems has vanished. There has been a lot of debate amongst supporters and opponents of this development, but I am sure that following the experience of the last seven months all objective analysts will agree that

POSIDONIA

in terms of improving the regulatory efficiency of the Greek maritime cluster the experiment has failed. Undoubtedly the POSIDONIA event, apart from its own contribution to the balance of payments and tourist activity highlights the possibilities for sustainable growth that the Greek maritime cluster continuously offers to the national economy. It goes without saying that in the present circumstances it not only imperative to preserve these possibilities but also expend them further. One critical venue in this respect is improving the international attractiveness and competitiveness of the maritime cluster. This would be in line with the measures envisaged in the aforementioned rescue package. Bearing in mind that the shipping community values stability and regulatory simplicity more than anything else in its choice of the place from where to run its business I believe that the restoration of the regime ante in the regulation and support of maritime activities would be a right step in sustaining the maritime cluster. Furthermore such a more would be in line with the provisions of the integrated maritime policy adopted in 2008 by the European Union in Lisbon. I would like to remind the reader that this policy calls for an integrated governance framework for maritime affairs which requires 'horizontal planning tools that cut across sea-related sectional policies and support joined up policy making'. This cannot be achieved effectively with a fragmentation of responsibilities among many regulatory bodies. A critical element in the success of Greek maritime cluster is also the development locally of ship finance services. Following years of record growth in the value of loans provided through banks both Greek and international with branches in Piraeus there has been a stop or contraction of lending, initially due to the global crisis and subsequently due to the Greek fiscal crisis. Fortunately the facilities provided in the rescue package of 2008 for the Greek banks have allowed them to operate under normal conditions. It is also important for the cluster that in the new financial environment following the rescue package for the Greek economy announced on May 2nd the Greek banking sector continues unabated its ship finance activities. I would expect that in view of the benefits to the national economy generated by these activities will receive a high priority in the allocation of new loans, especially after the further injection of liquidity expected from the new Fund to be established under the new bailout package. Further strengthening of the maritime cluster will materialise also following the tackling of the remaining obstacles to Piraeus becoming a major international hub for tourism. It is a matter of economic urgency that the recent announcement by the Prime Minister concerning homeporting implemented as soon as possible, with the consensus of all stake holders. Î?.Î§.66

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IOPCF Oil Spill Cost Data:

Empirical Analysis and Debate at the IMO BY CHRISTOS A. KONTOVAS, HARILAOS N. PSARAFTIS & NIKOLAOS P. VENTIKOS Laboratory for Maritime Transport, National Technical University of Athens

This paper reports on recent analysis of oil spill cost data assembled by the International Oil Pollution Compensation Fund (IOPCF). Regression analyses of cleanup costs and total costs have been carried out, after taking care to convert to current prices and remove outliers. The results of this analysis were recently adopted by IMO/MEPC as a basis of further discussion on environmental risk evaluation criteria in Formal Safety Assessment (FSA).

1. Introduction A big chapter in Formal Safety Assessment (FSA) that has only recently opened concerns environmental risk evaluation criteria. At the 55th session of IMO's Maritime Environment Protection Committee (MEPC) which took place in October 2006, the IMO decided to act on this subject. A major topic in Annex 3 of doc. MEPC 55/18 was the definition and analysis of risk evaluation criteria for accidental releases to the environment, and specifically for releases of oil. Discussion on this matter was sparked to a significant extent by a report of EU research project SAFEDOR, which defined the criterion of CATS (for "Cost to Avert one Tonne of Spilled oil") as an environmental criterion equivalent to CAF ("Cost to Avert a Fatality"), which is already used in FSA. According to the CATS criterion, a specific Risk Control Option (RCO) for reducing environmental risk should be recommended for adoption if the value of CATS associated with it (defined as the ratio of the expected cost of implementing this RCO divided by the expected oil spill volume averted by it) is below a specified threshold, otherwise that particular RCO should not be recommended. The issue of primary importance that triggered the debate at the IMO on environmental criteria was the very CATS criterion and its suggested threshold value of 60,000 USD/tonne. At the 56th session of MEPC (July 2007) a correspondence group (CG), coordinated by the second author of this paper on behalf of Greece, was tasked to look Î?.Î§.68

Fig. 1: Excerpt of the IOPC 2007 Annual Report (IOPCF, 2007)

into all related matters, with a view to establishing environmental risk evaluation criteria within FSA. More than 2 years after, and after some considerable debate and generally divergent views (see docs. MEPC 57/1, MEPC 58/1, MEPC 59/1) the issue is far from closed, and a working group on this subject is planned for MEPC 60 (March 2010). Worthy of note in the same context has been research done in Japan (doc. MEPC 58/17/1, Yamada (2009), doc. MEPC 59/17/1). Its relevance was mainly in terms of quantifying the non-linearity of spill costs with respect to volume. A recent submission by Norway (doc. MEPC 59/INF.21, Psarros et al (2009)) presented a similar regression analysis. Also, an FSA study on crude oil tankers that used the above threshold was conducted by project SAFEDOR and submitted to MEPC by Denmark (docs MEPC 58/17/2, MEPC 58/17/INF.2). The study recommended, among other things, increased side-tank widths and double-bottom depths for tanker newbuildings. At the 59th session of MEPC (July 2009) it was decided to pursue a volume-dependent approach for CATS, that is, proceed by explicitly taking into account the non-linear relationship between spill volume and spill cost. The purpose of this paper is to report on recent regression analyses of oil spill cost data provided by the International Oil Pollution Compensation Fund (IOPCF). These analyses have been carried out by the authors and are in the same spirit as those carried out by Yamada (2009) (primarily) and Psarros et al (2009) (secondarily) but differ from them on several points. As will be seen later, these analyses and their results have provided useful insights to the discussion within the IMO on environmental risk evaluation criteria.

2. Data used Compensation for oil pollution caused by tankers is governed by four international conventions: the 1969 and the 1992 International Convention on Civil Liability for Oil Pollution Damage ("CLC 1969" and "CLC 1992") and the 1971 and 1992 conventions on the Establishment of an International fund for Compensation for Oil Pollution Damage ("1971 Fund" and "1992 Fund"). These conventions together create and international system where reasonable costs of cleanup and damages are met, first by the individual tanker owner up to the relevant CLC limit through a compulsory insurance and then by the international IOPC Funds, if the amounts claimed exceed the CLC limits. The IOPCF Annual report (2007) presents the claims that the IOPC Fund dealt with in the

past. This report includes 107 accidents that are covered by the 1971 Fund and 33 by the 1992 Fund. For each accident the time and the place of accident are known and for most of the cases the volume of oil split, as well as, the costs claimed and eventually covered by the Fund are recorded. Damages are grouped into the following categories: • Clean-up • Preventive measures • Fishery-related •Tourism-related • Farming-related • Other loss of income • Other damage to property • Environmental damage/studies Where claims are shown in the table as settled this means that the amounts have been agreed with the claimants, but not necessarily that the claims have been paid or paid in full. In our analysis we refer to cleanup cost as the cost that has been agreed (excluding cases where claims are pending) for clean-up of the damage and to total cost as the sum of all costs that are presented in the report. Figure 1 presents a sample of the IOPCF 2008 Annual Report. As one may notice, there are cases where clean-up cost is the only category that appears and, thus, the total cost is equal to the cleanup cost. Given the volume of oil spill (V), the cleanup cost (CC) and the total cost (TC), we present the results of regression analyses of CC=f(V) and TC=f(V). Entries from which at least one parameter is unknown were removed from the analysis. In order to get the necessary data to perform our analysis we followed the steps below: 1. Removed all incomplete entries 2. All claims for the cleanup and the total cost categories (in the case of multiple claims) were added up by converting them to US Dollars at the time of the accident. We note that we are aware of the fact that the year of the accident and the year when the amount agreed was paid are not the same but this was the only available information. Furthermore the exchange rates used in these conversions were found in various CIA Factbooks and in a list of foreign currency units per dollar that is compiled by Antweiler (2009) 3. The cost of the previous step were capitalized into 2009 US Dollars by using 69 Ν.Χ.

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Fig. 2: Linear Regression of Log(Spill Size) and Log (Cleanup Cost) conversion factors based on the Consumer Price Index (CPI). In this way we arrived at two datasets, one having data on the Cleanup Cost (CC) and the Volume (V) and another on the Total Cost (TC) and the Volume (V). These datasets were not disjoint. In fact, the first dataset contained 84 entries, the second had 91 entries, and 68 spills reported both CC and TC. According to Friis-Hansen and Ditlevsen (2003), the logarithm of the oil spill volume and the logarithm of the total spill cost are positively correlated, having a very high correlation coefficient. This is also observed by Hendrickx (2007) and Yamada (2009). Our analysis of possible fits concluded that the double logarithmic, the multiplicative and the double reciprocal have the highest correlation coefficients and R-squared values. Therefore, Costs (TC and CC) and Volumes (V) were Log-transformed and a linear regression was performed for the two cases.

3. Results 3.1. Cleanup Cost (CC) After removing incomplete entries, a dataset of N=84 spills for the period 19792006 was used for this regression analysis. The minimum volume is 0.2 tonnes and the maximum is 84,000 tonnes. The average spill is 4,055.82 tonnes with a standard deviation of 14,616.15 tonnes and the median is just 162.5 tonnes. Even without a histogram one can easily realize that most claims come from relatively small spills. There are only 10 spills above 5,000 tonnes and, thus, one should be very careful when using the regression formulas to estimate the cost of large spills. Furthermore, an average per tonne oil spill cleanup cost using the IOPCF database can be calculated by dividing the total amount paid by the Fund for cleanup by the total amount of oil that was spilled. According to our analysis, this value comes to 1,639 USD (2009) per tonne. The equation of the fitted model using linear regression is: LOG10(CleanupCost) = 4.64773 + 0.643615 LOG10(V) or, Cleanup Cost = 44,435 V0.644 (1)

Î?.Î§.70

Fig. 3: Linear Regression of Log(Spill Size) and Log (Total Cost) 3.2 Total Cost (TC) Following the same methodology as in the previous step a regression analysis of log(Total Cost) and log(Spill Size) was performed initially for N=91 spills (for the period 1979-2006). The analysis of the studenized residuals revealed the existence of a total number of 8 possible outliers. These outliers were removed. After three consecutive regressions we arrived at the final dataset of N=83 spills. The minimum volume here is 0.1 tonnes and the maximum is 84,000 tonnes. The average spill is 4,854.29 tonnes with a standard deviation of 16,064tonnes and the median is just 140 tonnes. There are only 11 spills above 5,000 tonnes. The equation of the fitted model using linear regression is: LOG10(TotalCost) = 4.71123 + 0.727567 LOG10(V) or, Total Cost = 51,432 V0.728 (2) As before, an average per tonne oil spill total cost using the IOPCF database can be calculated by dividing the total amount paid by the Fund by the total amount of oil that was spilled. According to our analysis, this value comes to 4,118 USD (2009) per tonne. It has to be noted that our regression analysis was very carefully performed in order to identify possible outliers given the high sensitivity of the outcome on the dataset that we chose. Outliers at both end of the spectrum were removed, that is, both for very low and for very high total spill costs per unit volume. In order to illustrate the sensitivity of including or not including such spills, we present the following for a hypothetical cost for a one tonne spill. The total cost given by the regression formula for a hypothetical oil spill of 1 tonne is 51,437 USD. The results would have changed dramatically if some outliers had not been removed. For example, let us have a look at two extreme accidents both caused by mishandling of oil supply in Japan. The 'Kifuku Maru' accident in 1982 resulted in a spillage of 32 tonnes. The amount of money (converted into 2008 USD) that was paid for compensation was just 165 USD per tonne, a very low value. On the other hand, in 1997 the accident of 'Daiwa Maru No 18' resulted in a one tonne spillage that costed more than 4.5 million USD. If the extremely high cost value of the 'Daiwa Maru No 18' had been included in the regression the for-

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Fig. 4: Total Cost/Cleanup Cost Ratio (Data from IOPCF)

Table 1: Unit and marginal cost values UCC UTC MCC

44,435

51,432

28,616

37,442

19,576

27,494

12,607

19,957

100

8,624

14,697

5,554

10,644

1,000

3,799

7,857

2,447

5,677

10,000

1,674

4,200

1,078

3,028

100,000

737

2,245

475

1,615

Table 2: Comparison of Total Cost Formulas Study Total Cost = f (V) Kontovas et al. (2009) - this paper Psarros et al. (2009) Yamada (2009)

MTC

Total Cost = 51,432V0.728

0.782

0.647

0.507

0.66

0.460

Total Cost = 60,515 V

Total Cost = 38,735 V

Table 3: Total Unit Spill Cost (Total Spill Cost/Spill Volume) USD/tonne V- tonnes Log(V) Yamada Psarros et al. Kontovas et al. Constant (2009) (2009) (2009) - this paper Unit Cost

38,735 60,515

51,432

40,000

mula would produce a total per tonne cost for the hypothetical spill of one tonne of 56,058 USD. On the other hand, the extremely low, in terms of cost, case of 'Kifuku Maru' would have pushed the same value to as low as 46,706 USD. By dividing regression formulas (1) and (2) by V one can obtain the unit costs as follows: Unit Cleanup Cost = UCC= 44,435 V-0.356 (3) Unit Total Cost = UTC= 51,432 V-0.272 (4) One can see that both unit costs are decreasing functions of V, as expected. Also, by differentiating regression formulas (1) and (2) with respect to V one can obtain the marginal costs as follows: Marginal Cleanup Cost = MCC= 28,616 V-0.356 (5) Marginal Total Cost = MTC= 37,442 V-0.272 (6) The marginal costs MCC and MTC are interpreted as the additional cost if one more tonne of oil is spilled. As expected, these are decreasing functions of V too. The table 1 shows values of these per-tonne costs for some representative values of V. V is in tonnes and the per-tonne values are in USD/tonne. The precise way such figures can be used in an FSA study is yet to be determined, and it is among the subjects of discussion at the IMO how the volumebased approach will be integrated within the FSA method. The general framework of Psaraftis (2008) might be useful in that regard, but other approaches may also be of interest. It is also worthy of note that the data provided by the 2007 IOPCF Annual report can be used to estimate an average spill total cost/spill cleanup cost ratio, for the sample of spills for which the values of both CC and TC are available. Since we are only interested in the ratio, there is no need to do the conversions discussed before (i.e to use the exchange rate and the CPI index). Furthermore, accidents for which the claimed costs were only clean-up costs had to be removed. If cleanup cost is the only cost category available, this means that the total cost (as in the analysis performed above) would be equal to the total cost and in this case the ratio will be equal to 1. In order to remove this bias, all ratios equal to 1 were removed, although this probably biases the analysis towards higher total cost to cleanup cost ratios. A ratio of 87,547 (eighty seven thousand, 'Braer' accident) was also removed as an outlier. The dataset of the N=68 ratios that were left (see Fig. 4), has a minimum ratio of 1.002, a maximum of 10.01, a mean of 1.929 and a median of 1.287. The median is the measure of center (location) of a list of numbers. Unlike the mean, the median is not influenced by a few very large values in the list and may be a more appropriate criterion for this purpose. Speaking of ratios, one should be very careful with their use. Two statistics that one should be particularly careful with are (a) the average of the ratio 'cleanup cost/spill volume', and (b) the average of the ratio 'total cost/spill volume'. For our data, these average ratios are estimated at 23,085 USD/tonne and 33,425 USD/tonne respectively.

17,705

26,845

27,494

40,000

4. Other studies using IOPCF data

100

8,093

11,909

14,697

40,000

1,000

3,699

5,283

7,857

40,000

10,000

1,691

2,343

4,200

40,000

100,000

773

1,040

2,245

40,000

Four recent cases where IOPCF data was analyzed were known to the authors prior to their own analysis. It is not our purpose to comment on these in detail here. Friis-Hansen and Ditlevsen (2003) used the 1999 Annual Report (except those accidents that belonged to the categories "loading/unloading", "mishandling of cargo", and "unknown reason" which were removed from their analysis)

Î?.Î§.72

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and converted all amounts into Special Drawing Units (SDR) by an average annual exchange rate taken from the International Financial Yearbook. Then, historic national interest rates for Money Market Rates were applied to capitalize all costs into year 2000 units followed by a conversion into 2000 USD. Hendrickx (2007) performed an analysis based on data of the 2003 Annual Report and analyzed 91 cases by converting each compensation amount into US Dollars using for each accident the exchange rate on Dec. 31 of the year of occurrence. Exchange rates of the Bank of England were used for the currencies available and for the others an online website (OANDA.com) was used. There is no report that an inflation rate was used to bring these amounts into current Dollars. Yamada (2009) performed a regression analysis of the amount spilled and the total cost by using the exchange rated provided in the Annual Report itself. These rates can be used for conversion of one currency into another as of Dec. 31, 2007 and do not take into account the time of the accident. Furthermore, no inflation rate was used to capitalize the costs into 2008 dollars. His analysis formed the basis of Japan's submissions to the MEPC and, to a large extent, the basis of the MEPC decision to recommend a volume-based approach. Last but not least, Psarros et al. (2009) used combined data from two datasets, namely the IOPCF report and the accident database developed by EU research project SAFECO II (a project that antedated SAFEDOR), and thus performed a regression analysis in 183 oil spill incidents. It is not immediately clear from their analysis what the SAFECO II database is and what (if any) biases it introduces to the analysis. The amounts were converted into 2008 US Dollars taking into account the inflation rate. Table 2 summarizes the various oil spill total cost volume-based regression formulas and the corresponding R-squared values. What is perhaps interesting in Table 2 is the higher R-squared value of our study versus those of the others, perhaps implying a better fit with the data, and possibly a more reliable representation of spill costs on a volume basis. This is mainly explained by the removal of the outliers as mentioned earlier. Table 3 shows some characteristic values of the total unit spill cost of these three functions. For comparison purposes, the total spill cost per tonne of USD40,000/tonne corresponding to a constant CATS value of USD60,000/tonne is also shown.

formula by incorporating their additional (chosen) data in the analysis. In this connection, MEPC 60 agreed to invite the interested stakeholders to submit their data for each cost component and the results of their analysis for consideration. 2) Following a more reliable establishment of the cost curve, a proposed CATS formula, to be used in the cost effectiveness step of FSA, can be established by introducing a margin or factor value (so called assurance factor) still to be agreed representing society's willingness to prevent an accident rather than simply neutralize its consequences. 3) MEPC 60 invited member governments and interested organizations to use the non-linear cost function in FSA studies with a view to gain experience with its application and provide information to the IMO which may help to improve the proposed functions.

Acknowledgments This paper is an abridged version of a more extended paper, which is available from the authors.

References 5. Recent IMO developments At the latest meeting of the MEPC (MEPC 60, March 2010), a Working Group was formed under the chairmanship of Prof. Psaraftis. Following extensive discussion as to what type of total spill cost function should be used, a majority of the members of the Group agreed that a non-linear function is more justifiable by the available data, with some other Group members supporting a constant total spill cost per tonne, and some other members not being able to take a position on this issue. After considerable debate, among the three non-linear regressions (as shown above), the one proposed by the authors of this paper was considered as more conservative and was proposed as a basis. To that effect, MEPC 60 agreed that in order to arrive at the recommended CATS criterion, the following should be considered (among other things): 1) Member governments or interested organizations having their own additional data, attempt to verify, and adjust as necessary the said regression Î?.Î§.74

Antweiler, W, (2009) "Currencies of the World", University of British Columbia. http://fx.sauder.ubc.ca. Retrieved 2009-01-01 Friis-Hansen,P., Ditlevsen,O., (2003),"Nature preservation acceptance model applied to tanker oil spill simulations", Journal of Structural Safety, Vol. 25, Issue 1,pp 1-34. Hendrickx, R., (2007), "Maritime Oil Pollution:an Empirical Analysis", in Faure, M. and Verheij, A. (Eds.) "Shifts in Compensation for Environmental Damage", Springer Verlag. IOPCF (2007), "Annual report 2007". International Oil Pollution Compensation Funds, London, UK. Psaraftis, H.N., (2008), "Environmental Risk Evaluation Criteria", WMU Journal of Maritime Affairs, Volume 7, Number 2, October 2008, pp. 409-427(19). Psarros,G., Skjong, R., Endersen, O. and E. Vanem, (2009),"A perspective on the development of Environmental Risk Acceptance Criteria related to oil spills", Annex to doc. MEPC 59/INF.21. Yamada, Y. (2009), "The Cost of Oil Spills from Tankers in Relation to Weight of Spilled Oil", Marine Technology, 46(4), pp. 219-228(10)

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Developments at IMO The New Emissions Regulations being discussed at IMO, and their potential implications on shipping.

BY PANOS ZACHARIADIS1 Technical Director Atlantic Bulk Carriers Management, Ltd.

or some time now, the delegates of IMO member states have been trying to formulate the new Green House Gas (GHG) reduction regulations which will be applicable to ships in the very near future. In practice, we are talking about reductions of CO2 emissions. The impact of these new regulations on the shipping industry is expected to be more extensive than all other prior regulations with the exception of SOLAS. Depending on the final agreed nature of these regulations, the impact to shipping may be larger than ISM or MARPOL itself. The measures will affect all ship types and sizes and all aspects of the shipping industry (i.e. designers, shipbuilders, operators, regulators etc). The measures being discussed comprise two major items. The application of Market Based Instruments on Shipping (MBIs) and the notion that ships must be designed in the future with reduced energy requirements, namely reduced fuel consumption.

MBI's Market Based Instruments are the mechanisms that will be applied in the everyday operations of the ships and shipping companies to promote the reduction of CO2 emissions. Through these mechanisms, a huge amount of money will change hands and some Î?.Î§.76

of it will be collected in a fund which subsequently will be used to promote new research and green technologies for ships. Among various options and ideas proposed and discussed only one is simple, practical and doable: a flat tax or levy on fuel. Most proposals however centre around Emissions Trading Schemes (ETS). Emissions Trading Schemes are very complex instruments. Up to now they have been applied to closed and tightly controlled industries in Europe and USA such as power plants producing electricity. The fairly small number of stationary plants, makes ETS doable in the power industry but the results of the whole exercise has been disappointing. Despite claims to the contrary by those vested in ETS, the few truly independent studies done to date show that no reductions in emissions have been achieved, but instead increases as usual. The scheme calls for the worse polluter to pay more than the efficient polluter by purchasing emission allowances, or credits, through a central stock exchange. The polluter who achieves reductions below a certain pre-determined level obtains the right to sell such allowances to the polluter who exceeds its allocated limit. The allowances/credits are bought and sold through carbon stock exchanges. Currently there are such major exchanges in

London and Chicago (with Goldman Sacks being a major shareholder) but many other smaller carbon exchanges exist, while most major stock exchanges plan to get into this lucrative action in Europe, Asia and the USA. Currently, carbon trading is a 136 billion dollar market, and with the induction of airlines and shipping it will be in the trillions. It is no wonder then that the huge interests of major world financial players are pushing ETS, presenting it as the panacea for CO2 reductions in shipping. In addition, the countries which expect to have involvement through their carbon exchanges in such a huge new financial play are the ones which support ETS for shipping. In Europe, there are now six carbon trading exchanges in Britain, Norway, Germany, Austria, the Netherlands and France. What a coincidence! These are also the strongest proponents for ETS for shipping. Apart from expanded business and financial gain, they count on the thousands of new jobs which will be created to handle such a huge new carbon credit market. Besides, we should not forget that such countries have the major classification societies (DNV of Norway, BV of France, LR of UK, GL of Germany which, along with other proponents ABS of USA, RINA of Italy, NK of Japan), which will be performing audits yearly in all ships and shipping companies of the world to ascertain how much fuel was used by each ship, how much CO2 was emitted and which company achieved emissions below or above its allocated levels (and thus sell allowances to the market for a profit or buy them in order to keep operating its ships). This new business for classification societies will be far larger and lucrative than the ISM audits they now perform. On the other hand, ship operators have of course realised that a possible application of ETS on shipping will be a managerial nightmare. What is more, the design formulae currently discussed at IMO, do not really ensure a fairplaying field (see below on EEDI). Moreover, since independent studies show that ETS does not really work to reduce emissions, operators question the need for such burden. On the contrary, studies performed for the Congress of the

United States, show that a flat tax on fuel is many times more effective than ETS in reducing CO2 emissions at a fraction of the cost. To the impartial observer, it is evident that those who will gain most from ETS are the managers of the system (stock exchanges, traders, brokers, auditors, verifiers etc) instead of the environment itself. The burden of ETS for shipping companies will be immense. A new department in each shipping company will need to be established to monitor emissions, ensure allowances are sufficient, implement corrective measures, handle bureaucracy and so on. Such burden will be heavier for smaller companies. Furthermore, the yardstick used to judge which ship is efficient and which is not, is based on a currently flawed formula (EEDI). Suffice to say that a ship actually burning less fuel than another of same type and

A new department in each shipping company will need to be established to monitor emissions, ensure allowances are sufficient, implement corrective measures, handle bureaucracy and so on. Such burden will be heavier for smaller companies.

size, may show as being less efficient according to the formula and will thus be penalised by being required to purchase emission allowances. Compare such a behemoth scheme with the simplicity and transparency of few percentage points (tax or levy) on the going market price of bunkers. The money collected goes into a fund which is administered by IMO itself and used to support advancement of ship technology of developing countries and selected green research. The incentive to be more green is there, since the less efficient ship consumes more bunkers and thus pays more than its competitors. Last but not least, it has to be mentioned that ETS seem to be prone to fraud.The latest case, uncovered in April 2010, spread throughout Europe with 27% (!) of all market transactions of the last 18 months being fraudulent (Bloomberg, April 30, 2010), while the cost to European taxpayers from this incident alone is estimated at $7 billion! Earlier this year, Australia discovered other types of fraud schemes related to carbon trading (Reuters, January 7, 2010), while similar stories have appeared regularly since 2007. Several big name auditors have been suspended at one time or another as a result of such incidents (notably SGS UK, DNV, Germany's TUEV, etc.) showing that the complexity of the instrument does not allow for easy audits and transparency.

EEDI The second major instrument for CO2 reductions being discussed at IMO centres on the idea that future ships must be less energy demanding than the current ones. To that end, various Energy Efficiency Design Index (EEDI) formulae have come into play with which future designs should comply. Here again the countries with serious research capability (Japan, Norway, Denmark etc) tried to ensure early on that such future design requirements will not create big problems for their existing national fleets or their shipping/shipbuilding industry. Thus, for instance, Denmark ensured that the requirements will be harmless for its huge containership fleet, Japan ensured that the formulae have no real design demands (thus no burden for 77 Î?.Î§.

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Among various options and ideas proposed and discussed (for a global ''green fund'') only one is simple, practical and doable: a flat tax or levy on fuel.

the shipyard designers) but instead that compliance can be achieved by operational measures such as speed reduction. An ingenious passing of the buck to operators once again, while pretending the measures aim at improved designs. The EEDI formula which was about to be approved at the last MEPC session of IMO in March, would favour slow speed/low horsepower ships and ships with as little steel as possible (to increase their DWT). This goes against safety of navigation (low speed/horsepower) and against the overall strength and safety of ships. A lot has been said and written about the insufficiency of IACS Common Structural Rules and the insufficiency of IACS Unified Requirement S11, which specifies the minimum longitudinal strength of ships. IMO's new Goal Based Standards (GBS) regulations for tankers and bulk carriers were aimed (at least originally) at more robust ships. But here comes another IMO regulation in direct contradiction to GBS, favouring lightly constructed and underpowered ships. Current bulk carrier and tanker designs are already underpowered, namely they are fitted with the smallest possible engine that will satisfy the claimed design speed at the lake conditions of sea trials. When operating in real sea conditions, to achieve the design speed, the engine needs to operate near its maximum HP with an exponential increase of fuel oil consumption (and thus CO2 emissions). The current EEDI formula, would only make things worse, since the lower the design speed and HP, the more efficient the ship would be branded. Never mind that in real sea conditions the CO2 emissions would be tremendously increased. Unless such weaknesses in the formula are corrected, the next generation ships may have 12-12.5 knots design speed (i.e. actual sea speed of 11.00 knots or less in fair weather). In bad weather, where Î?.Î§.78

speed will substantially drop further, it is doubtful that they may safely navigate. When my company was examining fuel consumption improvements for its next generation new-building programme of supramax bulk carriers, installing a larger engine than the standard was a natural move, enabling operation at the optimum point of 75% MCR (maximum HP) in real sea conditions, saving about 2.5 metric tons in daily fuel consumption at the same speed than the yards standard design. Another 1.5 tons in fuel were further saved by slightly optimising the bow hydrodynamics. Yards, in their effort to maximise deadweight and cubics, have developed very full bows which produce large resistance at the slightest wave. It was surprising to see a 1.5 ton in fuelsaving just with a small sacrifice of only 200 tons in deadweight (displacement). Certainly that proves that there are real design improvements that can be applied for fuel consumption reductions without compromising safety. However, the above-described fuel efficient ships would show as inefficient, or may not even be allowed to be built, if the current EEDI formula was already regulation. This is because of the larger engine and reduced DWT. Agreement on the existing flawed EEDI formula was averted at the last minute in the previous session of MEPC, thanks largely to the efforts of Greece, while China had expressed similar concerns. In the beginning, nobody seemed willing to listen. The reason was that everybody was in a hurry to close the issue, approve an amendment to MARPOL, adopt it at the next MEPC session in September and go to the next UN climate meeting in Mexico in December with a done deal. When it finally sunk in that Greece would not give in to a flawed EEDI and to compromises in safety and robustness, it was agreed that the issue will be reviewed again at the special MEPC session in the summer with the aim of fixing the flaws. However, the developing nations (China,

India, Venezuela, Brazil and many others) refused to take part in any Marpol amendment, claiming that there should be differentiated treatment for them, along the Kyoto principle of Common but Differentiated Responsibility (CDR). CDR is a thorny and divisive issue for IMO, since all ships must be treated equally and the IMO regulations must be equally applicable to all. For example, applying a regulation to some flags but not others, would simply create a flight of ships from the regulated to the unregulated flags. The developing nations on the other hand rightly complain. The ships produced by their shipyards will be at a technological disadvantage (exacerbated by the flawed EEDI), while they have nothing to gain from an Emissions Trading Scheme, where most of the profits will go to the intermediaries who manage the scheme. In the opinion of the author, the only option which is compatible with Kyoto's principle of Common but Differentiated Responsibility (to reduce emissions) is one where EEDI has no role whatsoever in the operational phase of ships (but only in their design). This option is the flat levy on fuel. All ships (whether efficient or not) pay the same percentage amount levy depending on bunkers purchased (Common Responsibility) while the funds collected are distributed primarily to assist the developing countries to improve their shipping research and technology (Differentiated Responsibility). Let us hope that the flaws in EEDI will be corrected for the sake of both safety and the environment and let us hope that the complex, impractical, inefficient and fraud-prone ETS will not hit the shipping industry. 1. Mr. Zachariadis is a regular member of Greece's delegation to IMO.

REGISTRO ITALIANO NAVALE (HELLAS) LTD I 47-49, Akti Miaouli - 185 36 Piraeus - Greece I Tel: 210 4292 144-8, Fax: 210 4292 950 E-mails: piraeus.office@rina.org, greece@rina.org, greece.planapproval@rina.org

ENVIRONMENT

We are all witnessing the great effort in order to make the world greener as a result of environmental protection. Nowadays, everyone is talking about Green Economy, Green Industry, Green Development, Green Technology, or Green Revolution. Undoubtedly, in most industries and in human behaviour in general, the green ideal is something new -but not in shipping. Obviously, in shipping we prefer to keep seas and skies clear blue rather than green; however, for the sake of today's manner of speaking, we're using the word green instead of blue.

Green shipping he shipping industry developed a green conscience towards the environment many years ago. The MARPOL Conventions of 1973 and 1978 were nothing less than the beginning of specific regulations for protecting the environment and making maritime transportation cleaner. The table below is a reminder of IMO Regulations, which are intended to protect the marine environment. Measures were taken many years ago to prevent marine pollution by installing on board vessels the appropriate equipment, by painting ship's hulls with the correct paint, by monitoring ballast water, by minimising atmospheric pollution and by introducing new operational practices. Nowadays, the focus is on reducing CO2, Nitrogen Oxides (NOx) and Sulphur Oxides (SOx). These pollutants are generated by the combustion of fossil fuel in a diesel engine and for this reason, low sulphur fuels are being supplied to vessels. Specific regulations have been introduced for the control of emissions in some areas, such as SECA and ECA. The first is located in Europe in the region

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of the Baltic and the North Sea, while the second is located around the coast of the USA and Canada. On 19 May 2005, the regulations contained in ANNEX VI of the MARPOL Convention came into force. These regulations set limits on Sulphur Oxide and Nitrogen Oxide emissions from ships. The regulations include a global cap of 4.5% m/m on the sulphur content of bunker fuel. They also contain provisions for the establishment of SOx Emission Control Areas, such as SECA (Baltic and North Sea) and ECA. In these areas, the sulphur content of fuel oil used onboard must not exceed 1.5% m/m. The ANNEX also sets limits on the emission of nitrogen oxides (NOx) from diesel engines and prohibits the incineration of certain products such as contaminating packaging materials. The main changes to MARPOL ANNEX VI stipulate a progressive reduction in Sulphur Oxide Emission (SOx) from ships, from 4.5% to 3.5% and comes into effect on 1st January 2012, then continues down to 0.5% , which comes into force on

BY EMMANUEL PAPALEXIS Mare Maritime Company S.A.

1st January 2020. The limits applying to SECAS areas will be reduced to 1% in July 2010 and will be further reduced to 0.10% in 2015. Innovating technologies and new operational procedures will have to be introduced in order to comply with the emission control regulations. When dealing with the new regulations we first need to achieve energy efficiency. Diesel engines are the principal source of power for the world's shipping fleet, but these engines are not the friendliest from an environmental point of view. However, the pollution levels are not the same across the working range. At the optimum operating range, fuel efficiency is considerably higher and pollution lower than at slow speeds. Therefore, the answer is to keep engines operating within the optimum range. Greater fuel efficiency can also be achieved by optimising the

ENVIRONMENT

ship's propeller, its rudder, the vessel's trim and through the use of the right paints. The issue of energy efficiency becomes a headache for the IMO when different opinions and approaches divide members over the technical and operational measures to be taken in order to increase energy efficiency. A formula has to be found and agreed on, by which the Energy Efficiency Design Index (EEDI) can be measured. Furthermore, an agreement has to be established between IMO members for which types of ship such a formula will become mandatory using the framework of MARPOL ANNEX VI. While the sixtieth session of the Marine Environmental Protection Committee (MEPC) ends without a final decision being made and MEPC 61 is being organised, the industry is continuing to prepare itself. Innovative machinery and equipment able to monitor and measure NOx, SOx and CO2 are becoming available on the market. New operational practices are being introduced by ship operators aiming to comply with expected new requirements for the reduction of emissions.

1983 ANNEX I OIL

1987 ANNEX II NOXIOUS LIQUID SUBSTANCES IN BULK

1992 ANNEX III HARMFUL SUBSTANCES IN PACKAGED FORM

2003 ANNEX IV SEWAGE

1988 ANNEX V GARBAGE

2005 ANNEX VI AIR POLLUTION

NOx emissions from Shipping represents 7% of global emissions SOx emissions represents 4% of global emissions Another interesting point is the Ship Efficiency Credit Trading Scheme (SECTS). This is a proposal for a global trading system for greenhouse gas emissions. Although a similar parallel scheme is in operation for shore-based industry (i.e. the EU Emissions Trading Scheme), there are doubts as to whether such a scheme can be successfully applied to the shipping sector. Problems such as the suitability of the controlling agency, measuring implementation, and certification would prevent such a system from operating properly. Similar existing schemes for the shore-based industry have already been criticised for their ineffectiveness. Phase 1 of the EU Emissions Trading Scheme has been an example of such ineffectiveness. We also think it important that trading within the SECTS is not open to anyone outside the ship owning/operating community. Although we are in favour of the concept of improving fuel efficiency and reducing CO2 emissions, the implementation of such a concept has to be simple and practical. Î?.Î§.82

When dealing with energy efficiency we have to examine all the ways we can achieve this. While the regulators are working to establish an agreement on how energy efficiency can be measured and where and which ships it will apply to, the industry itself forges ahead with introducing operational procedures and installing equipment through which energy efficiency can be achieved. Because of pressure to curb CO2 emissions, many companies are exploring ways to increase a ship's efficiency by improving the engines, propellers, hull and rudder, installing scrubbers and optimising the voyage by improving ship routing. The most economical way to achieve a reduction in emissions will eventually become the most popular. For a vessel to cross the Pacific, it will require US$350,000 of fuel. With proper voyage optimisation a saving of between US$ 35,000 to US$50,000 can be achieved. Reducing the friction between hull and water is another way to increase energy efficiency. Therefore, maintaining a clean hull becomes a priority. It is also vital to

paint the hull with the right antifouling paint. MOL has conducted research into high-performance antifouling paints which improve fuel efficiency and eventually lead to CO2 reduction. According to the same research, the drag of the seawater over the vessel's wetted surface accounts for 50% to 80% of all resistance, including wind and wave resistance. It is expected that such sophisticated and advanced antifouling paints for ships' bottoms will reduce CO2 emissions by 8% to 12%, compared to conventional antifouling paints. We also see that International Paint estimates that a VLCC painted with its modern generation antifouling paints can achieve a reduction in CO2 emissions by 31,000 tonnes over a five-year period. It is apparent that hull coatings have a significant role to play in promoting fuel efficiency and reducing environmental impact. Therefore, it would appear that green shipping (or blue shipping as we like it to call it) can be achieved through the various ways described above.

PORT POLICY

European port policy at crossroads

In 2007, the European Commission published a policy document continuing the search for a long-term European Port Policy (EPP). Three years and an economic-crisis later, key decisions remain to be made. Meanwhile, the 2008 credit crunch had structural effects on European seaports, necessitating initiatives to address six key issues.

BY THANOS PALLIS Assistant Professor (Jean Monnet in European Port Policy) Dept. of Shipping, Trade and Transport, University of the Aegean

he first one is the regime governing public financing of European ports. As several financial institutions that had been active in leveraging the required capital rediscover risk and are reluctant to invest, relevant authorities ask governments to intervene, or permission to borrow in order to progress developments. In Italy, authorities proposed a 'Marshall Plan for ports'. In the UK, borrowing was the means to forward the key London Gateway project. The situation leads to more calls for supranational capital mobilisation. The European Seaport Organisation (ESPO) has prioritised "sustainable development of infrastructure through a Trans-European Transport Network policy", reversing a sceptical stance towards this particular EU policy. The priority is to include significant ports in TEN-T plans. However, decisions on the details are essential and important, as this priority may seriously distort the level-playing field between competing ports.

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All these are associated with the second issue, the clarification of the rules governing state aid to ports. Until now, the Commission has never acted by itself but only when requested. Today, guidelines are desirable, in order to provide clarity and certainty. It is time to conclude whether the EU will endorse guidelines as those applied in sectors sharing similarities (i.e. airports), or continue to use existing case law as a reference and to provide guidance to investors. It also remains to be decided whether the 2010 shift of state aid policy from DG Transport to DG Competition marks the 'end of exemptionalism' of maritime transport and a new approach to competition issues, or perhaps a stricter judicial approach. This implies that every aid must be approved beforehand rather than the existing flexible approach, where more forms of aid are not considered to be state aid at all. Third, policy answers are needed regarding the mechanisms used for granting concessions to operate a terminal (e.g. terms, fees, duration, clauses assuring that the terminal operator acts in the interest of the wider community). This is not least because of the challenge to market contestability by the emergence of global terminal operators. The EU strategy can contribute in fixing regulatory problems (e.g. monopoly rights or anti-competitive pricing) like those observed in the pre2008 fast growing markets. This is when the

desire to involve private actors in terminal operations led to several sagas, including the withdrawal of the winner in Thessaloniki, and a European Commission re-examination of concession terms in Piraeus. EPP also needs to address a dimension of concessions that has received very limited attention: the likeliness of re-negotiation. Without ignoring lessons learnt by the successive failed proposals for (de)regulating European port markets via an EU directive, foremost that 'one rule doesn't fit all ports', the postcrisis environment makes apparent that the EPP can provide vital guidance on certain points. Despite the difficulties to conclude, unambiguous procedures governing private involvement in port remain the means to address unresolved regulatory issues. The same procedures also enable the realisation of the fundamentals by all investors and create the framework for future growth accommodation by European ports. A fourth key issue is the advancement of port specialisation. The new reality provides port governors the context to revisit the concept of all-purpose mega ports and develop niche markets, like ro-ro and short sea shipping as a path to prosperity. For instance ports on the periphery and smaller terminals need to enact strategies targeting operators that are active on a national or regional scale. The EPP might successfully employ the fact that independent forelands have already been

associated with overlapping hinterlands, leading to increased proximity of ports. It is time for concrete strategies, advancing the co-operation between ports (specialisation in cargo or ship types, organisation and pooling of hinterland transport facilities and improvement in output etc.) and the coordination of stakeholders in solving hinterland accessibility problems (underinvestment in inland transport facilities, peak loads at terminals, underutilisation of assets with little cargo exchange, inefficient information and documents processing, etc.) Strategic collaborations can reduce risks and produce efficient structures for all organisations in the network, and reap the real benefits of innovation via knowledge and practice integration. In turn, such collaborations can produce effective communication, organisational routines and efficient structures. The fifth issue to be addressed is the societal integration of European ports.The rapid trade growth increased local communities' discontent. Along with expanding port infrastructure and strict security measures that resulted in building fences, the port was distanced further from the port-city, environmental problems increased and societal pressures for industrial responses intensified. In the short-term, the EPP can secure that ports comply with applicable regulations, and/or prepare the ground for developing any essential rules. In the long term, it can generate the framework for any port to regain the 'social license to operate', which may again become a necessity. The importance of being pro-active in integrating economic and environmental objectives is inexorably prompting relevant initiatives beyond compliance at port level. The EPP can provide opportunities for corporate initiatives and local public policies that will achieve green cost-effective solutions without challenging the presence of a level playing operating field. The sixth issue is the one that contributes to port competitiveness while it also assists the EPP to integrate and monitor progress in all of the above policy fields. The EPP long-term strategy can be advanced via the development of sustainable, relevant and feasible port performance indicators in order to measure and monitor the multidimensional impact and the development of the European port system. The European Commission has already advanced a link with port authorities, via ESPO and the academia. They have been targeting the endorsement of indicators which measure beyond operational efficiency and are accepted by stakeholders. The ability to fully implement such performance measurement at EU level (i.e. via the establishment of a European Port Observatory) will be decisive. It will allow for both the successful implementation of the EPP initiatives taken, while it will be enacting a mechanism that enables future adjustments. World maritime trade statistics of the first part of 2010 signal the return to normalisation of throughput in European ports. Recent problems to the lately enlarged port sector are accompanied with considerable opportunities to develop corrective actions regarding operational strategies. Along with extensive consultation, these market turbulences have also led EPP closer to deciding crossroads on how to correct misallocations and on how to prepare European ports to face new challenges. Still, in several cases, choices easy are not.

CRUISE INDUSTRY

People see their holidays as a necessity Louis Cruises is the leader of cruise ships flying the Greek flag around the Mediterranean Seas. Charis Charalambous, the company’s senior general manager of sales and marketing talks to Naftika Chronika about this challenging and highly competitive industry.

AN INTERVIEW WITH CHARIS PAPACHARALAMPOUS SENIOR GENERAL MANAGER SALES & MARKETING LOUIS CRUISES

n What do you think are the key problems in

the Greek cruise market and how could they be addressed? Two are the main problems of Greek cruising, namely the vague and sometimes complex and "unfriendly" legal framework and of course the lack of infrastructure and proper organization. We see a chaotic situation with many cruise ships calling at the same island on the same day and that leads to a number of issues both from an operational perspective as well as delays for passengers themselves which affect the whole cruising experience. There is also an immediate need for restructuring naval education by providing and keeping the incentives for young people who would like to follow careers at sea. n Greek cruising depends on the Louis

Group. How are you going to deal with the impending competition from foreign companies? What problems will arise for the Greek flag ship you own? Competition is something that does not scare us since we have been operating in the European cruise market for 25 years now. Having also a solid cooperation with the leading tour operators in the European and American tourism markets, is the basis on which we build our future plans and Louis with its 75 year long history, is a trustworthy Ν.Χ.86

cruise and hospitality operator that they can depend on. Moreover It is well known that our philosophy is to operate medium sized cruise ships and for the Aegean in particular, this provides a great advantage since it enables Louis Cruises to call at islands where today's mega ships are unable or would find it hard to do so. It therefore does indeed provide for greater flexibility in terms of itineraries and their enrichment. For us the destination is not just the ships but the ports of call as well. So the passengers that choose Louis Cruises are those that are eager to visit a number of destinations and experience the rich culture and history that characterizes not only our Aegean destinations but also all our itineraries. This is precisely why we place so much emphasis on the excursion programs that we offer and provide the best possible tours. While our passengers might not venture on rock climbing or ice-skating on board, they sure are able to enjoy a high standard of service and hospitality, a cosmopolitan atmosphere and the warmth of a human scale cruise ship. Also the numbers of passengers which our vessels are bringing to the Aegean port of calls are compatible with their infrastructure and are not causing the long queuing and waiting problems experienced by the passengers of the big cruise vessels

calling in the same ports. For the Aegean in particular, we unfortunately see congestion of cruise ships at the most popular islands such as Mykonos and Santorini with thousands of passengers disembarking or even worse tendering at the same time. Given the size of the islands and the limitations of their infrastructure the disembarkation of several thousand passengers and crew at the same time is causing a serious disruption in the routine of the islands. The same principles apply for other areas as well and it should be noted that for our ex Genoa and Marseille operations, our medium sized cruise ships have successfully established themselves despite the presence of mega ships sailing in the Western and Eastern Mediterranean, placing Louis Cruises on the European Cruise Market as an operator who provides a high standard of service on board but always with a focus on destinations capitalizing on their human scale size. Regarding the issues raised by the lack of Greek flag competiveness, we have to wait and see what will be the final governmental decisions and then we are going to set our future plans. n It is true that cruise travelers belong to the

high income and high age group? Yes that was the case 15-20 years ago but this is

This year we are hoping to attract even more Greeks by our intensive campaign to further introduce cruising as a "trend" and promote the benefits of a really "value for money" holiday choice. About the "Greek tourist" I really think that he is not very different, I would say an average European tourist. He is becoming much more knowledgeable often by reviewing the product in advance through the internet and wants to combine relaxation with visiting new destinations and having new experiences.

not accurate for today. The rapid increase in passengers over the last decade and the decrease in prices have made the cruise more of a Value for Money middle class holiday than anything else. It still offers a special feeling but the majority of cruise lines actually target the middle class. n Do you think that taking a cruise has been established in the minds of Greek consumer's as an affordable way to vacation? Compared to other nationalities how do you find them as tourists? Unfortunately not yet and we surely have a long way to succeed this. Due to many reasons this has not happened although Greeks are close to the sea and feel at home there. Possibly the proximity of the islands and the multiple ferry services means that they have experienced many of the attractions and island destinations, but of course not the magic of a cruise. This year we are hoping

to attract even more Greeks by our intensive campaign to further introduce cruising as a "trend" and promote the benefits of a really "value for money" holiday choice. About the "Greek tourist" I really think that he is not very different, I would say an average European tourist. He is becoming much more knowledgeable often by reviewing the product in advance through the internet and wants to combine relaxation with visiting new destinations and having new experiences. The aspect of "Value for Money" is very important nowadays, as with everyone. They appreciate a good product and that is what makes us happy and satisfied. n In the middle of the current crisis are there

any packages available for the general public? Generally good even though numbers are expected to stay the same as for 2009, although, the Greek market will be challenging, especially with

recent developments. People however, do not see their holiday as a luxury item any more and they see it as a necessity. They may go for a shorter time or enjoy a cheaper product but most will take holidays. This is why the cruise, with its high value for money and Full board concept has a serious advantage over traditional holidays in recession times. As I also stated earlier, cruising is the fastest growing tourism sector in the world and this steady growth is ongoing for a few years now. More and more people are getting acquainted with the wonders and advantages of sailing to a number of destinations in comfort and style. We feel proud for being pioneers in introducing cruising to the mass tourism market in Europe and no other form of travel offers so much in one single price making it an ever-increasing preference for tourists' world wide. n Can cruising help to extend the touristic

season? With the appropriate assistance and support from all stakeholders this is most certainly the case and the solution for growth and further cruise development. n Have you ever participate in any meeting

with government for your notes and suggestions regarding the future of the Greek cruise? 87 Î?.Î§.

CRUISE INDUSTRY

While this season is steady in comparison with last year, the important thing is that the growing trend continues and in our opinion it will continue for many years to come as cruising has certainly moved on from being a holiday for the privileged to being a top class option for everyone.

Personally I have not participated, although as a company we have expressed our views ourselves as well as through our official sector representatives. n What are your company's future plans?

What are the objectives of your company in the coming years? What strategy will you follow to overcome international recession? We need to continue to invest in improving all the time. When the time gets tough the best prevail, therefore sometimes you have to swim against the stream. As with all forms of tourism cruising also had to face the new environment created by the financial crisis and therefore the need to follow a more aggressive pricing and marketing strategy in order to maintain its market share in the international holiday market and its growth. While this season is steady in comparison with last year, the important thing is that the growing trend continued and in our opinion it will continue for many years to come as cruising has certainly moved on Î?.Î§.88

from being a holiday for the privileged to being a top class option for everyone. Louis Cruises' strategy is to venture into winter cruising and therefore lengthen its operational time span. With the charter of MV Orient Queen to CVC last winter the first step towards that direction has been made and Louis Cruises also plans to operate a cruise ship in the Red Sea as of next winter. The Red Sea is ideal for winter cruising due to the favorable climate in the region as well as the number of interesting and enticing ports it has to offer. The company also has a plan of extending its operating period out of Piraeus (currently it starts at the beginning of March and ends towards the end of November) into a round the year one. Additionally, it has already been announced that the cruise terminal of the port of Marseille in France is now managed by Louis, Costa Cruises and MSC Cruises making it an important home port for us and our partners since we all aim at substantially increasing the number of passengers that visit this historic port,

founded in fact by the Ancient Greeks. Finally, the addition of MV Louis Majesty to the fleet and its operation ex Genoa and Marseille further materializes our strategy for the upgrade of the fleet while we remain loyal to our position in the international cruise market of offering destination rich itineraries in a friendly and high standard environment n In conclusion what is the future of the

Greek cruise? The potential for Greek cruising is endless. However its future depends on solving the infrastructure issues that handicap the overall cruising experience, correcting the issues arising from a problematic legal framework and of course making Greek cruising more competitive in order for it to survive the unfair competition it already faces. Therefore, its future could range from bright to non-existent depending on investments; will to tackle the problems and the immediate need to increase competitiveness.

PUBLI

Fuel Additive Solutions – Excessive Sludge Innospec Limited, the leading dedicated fuel additive producer and supplier in the world, markets a range of dispersant / stabiliser fuel additives which have been extensively tested and proven in the field, achieving sludge reduction of up to 70%. Less sludge in reality represents a huge saving for any vessel, but there are also many other benefits to such fuel additive treatment. Since the 1970’s the quality of residual bunker fuels has deteriorated dramatically, most notably due to secondary refining processes aimed at maximising the high value streams from a barrel of crude oil. In the midst of this we also have ever decreasing Sulphur limits being imposed by regional and international legislation such as MARPOL Annex VI, CARB legislation and EU Directive 2005/33/EC. From July 2010 the maximum allowable sulphur content to be used inside ECA’s (emission control areas) will be 1% w/w. As a result, the blending of Heavy Fuel Oil (HFO) for marine use is becoming a more complicated task, as the fuels must achieve the Sulphur content as well as the density and viscosity requirements of ISO8217. These additional blending requirements have the potential to increase stability and compatibility issues, which will manifest themselves onboard in the form of excessive sludge formation. It is important to note that fuel sludge is made up primarily of the aromatic components typically found in residual fuels, known as asphaltenes. Asphaltenes are combustible hydrocarbons, and therefore fuel sludge is in the most part, a loss of good fuel. As well as the financial aspect with the loss of fuel, excessive sludge will cause serious problems with the fuel handling system - not least rapid fouling and efficiency loss of the separators. In addition, the requirement to change over from the use of heavy fuel oil to middle distillates such as marine gas oil (MGO) is increasing. For many reasons changing over fuel types is a complicated

Sludge formulated in the storage tanks eventually enters the fuel system with negative impact to purifier’s efficiency. Finally sludge enters to engine as un-homogenized fuel destroying the spray pattern affecting negatively the combustion procedure

procedure, not least because of the incompatibility issues that can almost immediately become evident. In extreme cases, incompatibility during changeover could cause a propulsion loss as the filters become overwhelmed; this in turn posing a serious safety issue. Innospec’s dispersant / stabiliser range of fuel additives act to stabilise the asphaltenes in otherwise unstable fuel blends. The stabiliser prevents the asphaltenes from flocculating and falling out of suspension, generating sludge. The additive also helps to disperse existing agglomerations of asphaltenes, and therefore over a period of time can clean up the fuel handling system, and in turn maximise its efficiency.

The benefits of Innospec’s dispersant stabiliser fuel additives can be summarised as follows: l

Less sludge being produced equals more usable fuel. Field Trials using Innospec stabiliser / dispersant additives have typically achieved a sludge reduction of 40 – 60%. Less risk of incompatibility when changing

l l

over to MGO. Reduced load on separators thereby improving their efficiency. Less tendency for separator bowls to become blocked. Better fuel injection, atomisation and combustion. Reduced soot deposits in the combustion chamber and exhaust system maintaining an engine in the optimum design condition. Field trials have demonstrated a significant reduction in NOx, CO and Particulate Matter. Fuel Filter back flushes reduced indicating a more homogenous fuel being delivered to the engine. Reduction in operational requirement of the ships incinerator. Resulting in less diesel fuel, less man hours, fewer emissions from incinerator. Reduced costs for disposing of sludge in port. Reduced costs for periodical cleaning of fuel tanks and pipework. Cleaner engines and handling system will extend maintenance schedules.

Innospec Hellas Ltd • 11, II Merarchias Street • Piraeus 185 35, Greece • Tel: +30 210 411 0727 • Fax: +30 210 411 0748 • www.innospecinc.com Ν.Χ.90

CLASSIFICATION SOCIETIES

Classification societies Entering (and surviving) challenging times How do Classification Societies react to recent policies, regulations and competitive challenges that have changed the characteristics of this diverse industry? Naftika Chronikaâ&#x20AC;&#x2122;s editors interviewed the Managers of well respected Classification Societies and asked their thoughts and aspirations for the future of the shipping industry in general and the shape of things to come for their own Societies.

In which new services and products have you turned to in the last period for the service of your customers?

Which are the last developments you have used around this project?

Which are your company's basics regarding the protection of human life and the environment?

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BERNARD ANNE Managing Director, Marine Division, Bureau Veritas

1. 2010 has the potential to be seriously tough for the bulk and tank sectors and passenger shipyards in particular. However, it is not all gloom. Against that background, right across the marine industries, pragmatic optimists are mobilising technology and capital and are looking forward to the future. That future will be different if compared to the last few years. Ships will be more efficient, with smaller environmental footprint. New ways of generating and using energy will come forward. Oil and gas will come from colder places and deeper water. Yards will consolidate and new technologies will enter both shipping and offshore. Bureau Veritas is ready for that, and will be at the forefront of change. Challenging times are the best times for pragmatic optimists. We are pragmatic because we have been leaders in shipping for a very long time, and we know how cyclic markets work, and we were ready for this downturn. We are pragmatic because we have a very diversified fleet and expertise base, and because we are present in every sector of shipping and offshore energy and every part of the world, ready to harvest and sustain new ideas and new players, while supporting the best of the old. And we are optimistic because when the market is shaken up, it opens the way for new ideas, new technology, new ways of doing old things. If you can build on deep and diverse experience like ours, then you can help others to innovate and adapt their strategies quickly to whatever challenges and opportunities arise out of the turmoil in the markets. Yes, we are all in for a tough time, but there are a lot of reasons to be optimistic for the future. Our focus is on helping owners to reduce costs, and on helping yards to refocus designs to improve fuel efficiency. We have taken a good look at service delivery and beefed up our information handling, services for crews and services aimed at the environment, such as support for recycling, cold ironing and fuel cell development. Owners liked it, transferring substantial numbers of ships to BV class, and yards liked it, because we

took a substantial share of the world new building orders placed in 2009, with 4.6m gt, around twenty per cent of the new building ships ordered. Our classed fleet now surpasses 9,100 ships and 70.7m gt and despite the global downturn in new orders, we have a substantial orderbook of high quality tonnage totalling around 29m gt. BV has continued to grow strongly as a group, doubling in size in the last ten years. We are on track to double in size again in the next five years. That steady growth has been built on stretching for opportunities, but making sure we are standing on a safe platform as we reach out. And it has been built on helping strong and likeminded partners to grow. 2010 may throw up some tough markets, but we will be there to share our optimism based on strength and diversity. 2. As the new building market cooled, the focus of BV clients, both yards and shipowners, switched from a need for rapid approval of CSR and ever larger ship designs to a demand for assistance with cost and energy saving. BV was busy developing ways to help owners reduce costs, fuel usage and environmental footprint, and helping yards to adapt and improve designs to be more fuel efficient. There was much less focus on production and more on more efficient new vessels, ready for when the market improves again. • BV's new Fatigue Plus notation supplements the tanker CSR to give tankers a longer fatigue life. • BV's hull software tool VeriSTAR Hull was upgraded to process three hold models for all ship types. • BV published new rules for the structure and containment systems of offshore Floating LNG units. BV was involved in studies and FEED work on fourteen FLNG projects worldwide, including projects in the Arctic, off Brazil and off Australia. • BV published new guidelines for the use of fuel cells in shipping, and worked on a zero

emission tug project and ways to apply fuel cells to passenger ship auxiliary power use. • The first Energy Efficiency Design label was issued for a major cruise ship, which was able to show that it had design features on delivery giving a ten per cent reduction in energy use compared to a similar conventional ship. The Energy Efficiency Design Index will be published as a notation during 2010. • New rules on High Voltage Shore Connections will facilitate cold ironing of ships in port, cutting emissions. • New class rules for submarines and new software for corvettes underpinned BV's increas-

ing warship work. • BV issued new guidelines on laying up ships. • New rules for Fast Oil Recovery Systems were published and the first containership was delivered with this system. • A sharper focus on managing information both internally and for clients led to further implementation of VeriSTAR Project 93 Ν.Χ.

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Management and to a completely revised and clarified marine portal, www.veristar.com. 3. Protecting human life and the environment are right at the heart of Bureau Veritas philosophy and are the values which underpin all its services. An increased focus on the environment is reflected in new guidance on the use of fuel cells in marine applications, and in strengthening the teams working on delivering Green Passport to vessels to aid clean recycling, ahead of the IMO Ship Recycling Convention. A new notation on cold ironing (HVSC) and another covering Fast Oil Recovery Systems helped owners to equip their ships, in order to minimise environmental impact, while a new Emergency Response Notation service and notation clarified and strengthened the assistance BV can provide in

GEORGE TERIAKIDIS Marketing & Buisness Development Manager, DNV

the event of a casualty. Surveyors were also trained to provide vessels with US EPA Vessel General Permit certificates. The all-important human factor was addressed through the provision of new services to ease implementation of the 2006 Maritime Labour Convention and through increased training, both internally and externally. A system to audit and certify manning agencies for seafarers was established. When the Maritime Labour Convention comes into force, it will be a requirement for organisations recruiting

1. Quantum is the name of a new container ship concept introduced by DNV. The new concept is based on technical research and innovation and is designed to transport more cargo while using less fuel and with a reduced environmental impact. It is a result of an innovation initiative taken at a time when the whole shipping industry is struggling. Tor Svensen, DNV's President has repeatedly stated that it is when the times are tough that you should spend time on innovation to prepare for the future. DNV has the competence. Our technical skills are perceived as high. We also have a healthy financial platform, due to the fact that all money earned is ploughed back to the company itself. There are no shareholders to have return of their investments. This healthy financial situation for DNV is used for the best to the whole shipping industry.

and placing seafarers to conform to the standards set down. BV has had a Code for Approved Seafarer Manning Offices since 1998. Building on that experience and the requirements of the 2006 MLC, it launched a new service for the assessment of Seafarer Recruitment and Placement Systems (Seafarer Manning Offices). It will enable the best manning agencies to demonstrate their readiness for the MLC implementation, and will help owners and managers to ensure they get the right crews. BV also issued its first Statement of Compliance under the MLC to Danish shipowner HERNING SHIPPING AS. This enables HERNING SHIPPING to be at the forefront of preparation for certification when the convention comes into force.

2. The new container ship concept is designed to meet the perceived market needs. It has a design speed of 21 knots, but can operate efficiently at speeds between less than 10 knots and more than 22 knots. The need for ballast water is minimised and LNG is introduced as part of the ship's fuel, just to mention very few examples of our latest developments. 3. This question touches upon DNV's main purpose to safeguard life, property and the environment. Everything we are into is in some way linked to this purpose. For the shipping industry, the DNV class rules can be used as examples. They include requirements for how to build the vessel and later on, when the vessel is sailing, they ensure that the vessel meets these requirements at all time.

For more information on the Quantum concept ship click on http://viewer.zmags.com/publication/b14aa72b#/b14aa72b/1. Î?.Î§.94

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BY DIMITRIS SARIKLIS Business Development Manager for Greece Germanischer Lloyd

1, 2. By streamlining processes, reinforcing its global presence and leveraging synergies wherever possible, Germanischer Lloyd will continue to strengthen its competence and performance in this segment. Maritime Solutions comprises the entire range of services to the maritime industry with the exception of classification services. The new business unit has four departments: FutureShip, Systems Certification, GL Maritime Software and GL Academy. The guiding principle behind the restructuring measures was to deliver enhanced benefits to clients, enabling them to emerge from the crisis stronger than they were before. Making Efficiency Happen: FutureShip Identifying the best parameters for on-board systems and an optimal ship design are prerequisites for efficient ship operation. FutureShip, the new maritime consultancy business of the GL Group, helps shipowners and ship yards to optimise ship design and ship operation. Energy efficiency is the new buzzword in all areas of shipping. In the face of tighter environmental restrictions and rising fuel costs, ship operators have no other choice than to take advantage of whatever means can be found to optimise ship operation, on-board systems and hull designs. While there is no shortage of tools aiming at making ships more efficient by tweaking individual performance parameters here and there, Germanischer Lloyd takes a holistic approach. FutureShip offers a range of services addressing both, ships in service and planned newbuildings. Design reviews, line optimisation, trim optimisaÎ?.Î§.96

tion (ECO assistant) or operational fuel consumption analyses (ECO Practices) are examples of how GL supports substantial fuel reduction through a combination of expertise, software and procedures.The new subsidiary combines FRIENDSHIP Consulting, which was acquired in early 2009, with GL former competence centre Advanced Engineering. The new merged unit is a comprehensive, multidisciplinary consultancy that scrutinises all design aspects and onboard systems of a ship for potential energy savings. Recent activities included the publication of a new guideline, Safe Return to Port, successful validation of hydroacoustic predictions through measurements, and the introduction of efficiency monitoring, a new machine operation simulation method. To help customers cope with the crisis, GL refocused on structural issues affecting ships in operation (such as vibration, cracking, etc.) by providing simulation and on-board measurement services. FutureShip is a valuable addition to GL's portfolio as a full-service provider and consultancy for the maritime market. ECO Chances, one of the services offered by FutureShip, makes use of advanced software, including flow simulation and optimisation tools as well as powerful parametric modelling software. The models created incorporate all key aspects of a ship, including main dimensions, hull lines and, in particular, the shape of the bulbous bow, information on the main engine, the propulsion system, the type and condition of the coating, auxiliary power sources, such as waste-heat recovery systems, operations and systems monitoring, and peripheral power consuming systems such as reefer container points and thrusters. FutureShip offers advice in the fields of fleet development, ship management, ship design,

ship operation, environmental and regulatory compliance as well as certification. The number of contracts covering multiple services has increased significantly. Innovative Concepts Customers tend to expect one-stop consulting services, hoping to buy and operate the most reliable, durable, efficient and profitable ships they can get. GL services range from general consultancy (ship type, regulations) to best design (fit for purpose, means of propulsion), specific construction phase (yard assessment, owner supervision, component selection) and lifetime operation support. They may also cover staff and crew development by raising the environmental, regulatory and certification awareness. FutureShip's team of more than 70 engineers and consultants has delivered a number of industryleading efficiency solutions, such as innovative conceptual designs (e.g. Aframax tanker design, see page 41) or fleet operation concepts developed in response to the challenges of rising bunker costs and the tremendous overcapacities in the industry. With its advanced modelling and simulation-based hydrodynamic optimisation services, FutureShip helps its customers make their new designs, refits or ships in service more competitive by unlocking hidden potential for energy savings and improved efficiency. GL Maritime Software: Optimizing Business Processes The maritime industry is facing tough challenges, having to combat low demand, overcapacities and rising operating costs. Powerful software offers a unique opportunity to improve competitiveness. GL Maritime Software is a provider of specialised software solutions, system integration services and training and support to

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shipowners, shipping companies and shipyards. GL's software packages are designed to improve productivity and enhance transparency in fleet management while ensuring compliance with applicable regulations. One example is the GL ShipManager. AIDA Cruises latest newbuilt AIDAblu uses the software for ship management. GL ShipManager, a comprehensive software suite, supports scheduled maintenance, purchasing, stock control, voyage management, port clearance, incident management, and quality and safety management. The software installation process was completed while AIDAblu was still in the yard. Performing the ship software installation at an early time

allowed the applications to be used immediately upon docking out and putting the vessel into service. All ship-specific data, such as equipment, machinery and spare parts information as well as maintenance details had been captured and stored in the database before the equipment was installed. Supporting Business Processes GL continued to develop its software solutions throughout 2009, adding new functionality and features. Current highlights of the GL software portfolio include GL ShipManager, GL Î?.Î§.98

HullManager Supports (the entire hull integrity process), GL CrewManager (crewing process), GL FleetAnalyzer: (analysis, reporting and decision support) and GL SeaScout (finds the appropriate navigation course in heavy seas). For forward-thinking shipyards, design offices, designers and component manufacturers, GL offers FRIENDSHIP-Framework, the world's most advanced software for simulation-driven design. FRIENDSHIP-Framework allows engineers to model and vary a design to create a range of alternative options from which to select the optimal design. Coming Up: Shipowners need MLC certification Only recently, the Republic of the Marshall Islands extended the scope of Germanischer Lloyd authorisation as Recognised Organisation to carry out inspections and issue certificates under the Maritime Labour Convention, 2006 (MLC 2006). GL offers shipowners, managers and yards a comprehensive International Labour Organisation (ILO) certification package in order to meet the requirements and speed up the issuing of a compulsive certificate by 2011. The MLC 2006 has been introduced by the ILO. All vessels of 500 GT or above on international voyages will need to demonstrate a valid MLC 2006 certificate. GL already documented shipping companies' compliance on a voluntary basis and is prepared for a smooth transition from the MLC Statement of Compliance to the flag state certificate. To help ship owners identify necessary improvements, GL offers a self-assessment tool. In addition, with a gap analysis on board, GL can determine what needs to be improved before the ship fulfils the requirements of the MLC 2006. The GL Academy has already provided seminars and workshops on the MLC 2006 in Germany, Greece, Poland, Singapore, China and the United Arab Emirates. To ensure compliance with the requirements well

in advance, GL offers advice on flag state implementation, review of the Declaration of Maritime Labour Compliance and initial inspections on board as well as the issuance of the MLC Statement of Compliance. Furthermore, several flag states consult with GL as recognised organisation on the implementation of the MLC 2006. The MLC 2006 has been introduced by the International Labour Organisation (ILO). It regulates working and living conditions for seafarers and helps to create conditions of fair competition for ship owners. The ILO convention replaces earlier labour conventions and is seen as the "fourth pillar" of maritime regulation beside SOLAS, MARPOL and STCW conventions. The MLC 2006 will come into force twelve months after ratification by at least 30 ILO member countries with a total share of at least 33 per cent of the world's gross tonnage. Until now, the Bahamas, Liberia, Panama, Norway, the Marshall Islands, Spain, Croatia and Bosnia & Herzegovina have ratified the convention. 3. Safer, smarter, greener is Germanischer Lloyd 's mission. It is our goal to protect human life, the environment and assets and offer the best services to our clients. GL is under the obligation to uphold the very highest standards in safety and quality. Quality management is a core task for our work in ensuring the safety, reliability and economy of shipping. There are three terms that describe our corporate mission in nutshell: technical expertise, uncompromising quality, and first-class service. Superior technical expertise, excellent engineering know-how and the unceasing pursuit of technological innovation are the driving forces behind our corporate actions. Our uncompromising quality is not an end in itself, but the effective means to an end. We make every effort to improve the technical reliability and operational economy of our customers' ships and floating assets. Our services permit the optimum interaction of engineering, naval architecture and communication technology both during the newbuilding phase and in everyday ship operation.

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JAE-GEUN KWON Regional Manager of Korean Register of Shipping - Athens Office Europe Headquarters

1. Development of New SeaTrust-CSR SeaTrust-CSR is KR's widely acclaimed software package for the application of IACS common structural rules. This software is currently being used by major shipyards, design houses and universities. An updated version has been under development throughout 2009 and is on schedule to be released in June 2010. The new version will provide a variety of much-improved features and user interfaces and will support a more rapid structural design process. The objectives of the new version are to: 1. Support multiple windows operating systems 2. Provide a user-friendly interface 3. Improve prescriptive rules and DSA parts 4. Design of data structure that is more easily maintained Development of Ship Lifecycle Management System A new and ambitious project currently under development at KR is its SeaTrust-SLM (Ship Lifecycle Management). The aim of the application is to manage the entire lifecycle of a ship, from its original conception, design and building, and then throughout its operating life until disposal. SeaTrust-SLM will enable the ship operator to manage the vessel's information and conduct valuable analyses throughout its life, including: - Inspection management and prediction - Analysis of virtual hull model and real hull data Î?.Î§.100

- Easy access to information supplied by class The main features of the SeaTrust-SLM application are: - Management of hull structural data - Thickness of information - Ship information Direct Strength Assessment for 10,000TEU Container Carriers The use of classification rules and the application of direct structural assessment (DSA) are the two main methods available for assessing a ship's structural safety. Classification rules are both straightforward and mandatory, while a DSA is often complex. In general, the design of the midships section is the most important area for tankers and bulk carriers and so a DSA is usually not necessary for these types of vessels. However for ships such as container vessels, the entire length of the vessel is important and so a DSA is essential. It is particularly important for container vessels of more than 8,000TEU built before the classification rule was developed and when wave load analysis tools were poor. For these types of vessels, the confirmation of structural safety through classification rules can only be very dangerous as it means applying the rules by simple linear interpolation. KR has carried out DSA for 10,000TEU container carriers using its own SeaTrust-ISTAS applications to analyse: - Yielding and buckling evaluation based on a coarse mesh model - Yielding and buckling evaluation based on a fine mesh model - Spectral fatigue analysis - Hatch corner displacement - Bow and stern slamming analysis - Parametric roll analysis In addition, the scantling approval rule has been analysed according to new data obtained from current very large container carriers within the goal-based standards project. KR has confirmed structural safety in all aspects of study through DSA and has provided data which can be made available for ship design and operational guidance. 2. Diversification into other sectors is of major significance to us. Whilst traditional ship classification

services will always be our core focus, we believe that we need to diversify, grow and develop. This also allows us to apply our extensive and transferable skills and experience into other industry sectors. The main areas on which we intend to focus in the coming years include warship standards, new and renewable energy and plant inspections. Entry into wind power and other new/renewable forms of energy by the major shipyards is likely to bring about a rapid expansion in survey, certification and consultation services for KR. As part of a planned business diversification programme, we have continued to re-assess and grow our portfolio and invest in areas that will drive future growth. In 2008, this led to the creation of a new division -our Energy & Environmental Business Centre. Our latest activities in the environmental sector include: - Wind Energy - Ocean energy - Fuel Cell Technology - Green House Gas (GHG) 3. With the shipping and shipbuilding markets still suffering from the financial crisis, we have had to modify slightly our long-term objectives. Whilst we are confident that they will be achieved, we realise that it might take us a little longer to get there. However, by revisiting our strategies and growth plans in light of these challenging times, we still anticipate continued growth in new buildings and other related activities, albeit at a slower pace than when the market was booming. KR is celebrating its 50-year anniversary this year, and our aim is to have a classed fleet of 45 million gt by the end of this year. To achieve that goal, we need to maintain our competitive edge and that is why our management is adopting a more aggressive -rather than defensive- stance and we are adamant that we will maintain our high levels of service throughout this challenging period. This does not mean, however, that we have stopped or slowed down our investment in the traditional sector of ship classification. We have worked to find new ways to improve our technical competence and customer services and our efforts have included the development of ship lifecycle management systems, PSC detention/reduction programmes and an expansion of our global survey network.

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APOSTOLOS POULOVASSILIS Regional Marine Manager for Lloyd's Register Europe, Middle East and Africa (EMEA)

Since 1760 the core role of Lloyd's Register has been supporting marine safety. As we celebrate our 250th anniversary, we are focused on how we move classification forward to contribute to the vision we have of a safer marine industry that meets the needs of society, continually looks to reduce its environmental impact and provides ship operators and builders with the opportunity to build healthy, sustainable businesses. Improvements in safety will continue to be realised through our core role in the formulation and application of technical standards. But significant and continuous improvement in safety and sustainability will now also need to be driven by improvements in management organisation and culture across the shipping industry. Lloyd's Register is leading the way in expanding the role of class into this area. Importantly, we are also involved in supporting owners who wish to operate well beyond baseline safety compliance requirements to further improve safety and sustainability in their operations by developing risk-based approaches. We believe that these will be increasingly important to all in shipping as the dominance of prescriptive rules is challenged. One recent initiative is the approach we have taken to help support safety in container ship cargo operations, developing Lloyd's Register's Provisional Rules for Ergonomic Container Lashing (ECL). The frequency with which fatalities, serious injuries and musculoskeletal disorÎ?.Î§.102

ders occur as a result of securing container cargo on board ships is a concern. Lloyd's Register's new notation is a substantial addition to help improve safety in container ship cargo operations. In order to save lives and prevent pollution, we must prioritise those who experience difficulties in reaching minimum standards and be highly proactive in helping clients to maintain a 'quality' ship and fleet. In the last year we have instigated and refined an approach we call the Fleet Quality Programme to manage those who are either close to or are falling below minimum required levels. This programme promotes continuous improvement in our risk analysis-based approach to assessing our fleet, adding or improving processes and data as appropriate, and it enables us to engage operators at an early stage when we identify potentially sub-standard and high-risk vessels. We then seek to manage these ships towards an acceptable and sustainable level of quality. Only if this proves impossible will we look towards removing them from class through a managed class withdrawal process. We believe that this 'active' attitude is more effective than relying only on the traditional survey cycles. The ultimate sanction of withdrawing class can be easily taken but still leaves the industry with a potentially sub-standard or dangerous ship. During the past year we have seen the increased attention paid to shipping as part of the Copenhagen COP 15 process - the need to reduce CO2 - and we need to recognise that nothing will be the same again. Lloyd's Register is extremely active in assisting the industry in understanding and managing the emissions challenge. Since 2000 Lloyd's Register has been involved in the testing and certification of Marine Diesel Engines of above 130 kW, which are installed or intended to be installed onboard ships subject to MARPOL 73/78 Annex VI. The above comprises of an impartial certification system based on the requirements of Annex VI and the NOx Technical Code on Control of Emissions of Nitrogen Oxides from Marine Diesel

Engines. Moreover, we have been active in the type approval of equipment for NOx monitoring and reduction, in line with one of the IMO's NOx verification procedure, namely the direct measurement and monitoring method, which involves the installation of a fixed system that measures concentrations of NOx, O2, CO2 and CO, the most commonly known being 'MariNOx' of Martek. With strong presence in IMO and other international and regional forums and Working Groups, Lloyd's Register has contributed to the negotiations around Climate Change and the control of Greenhouse Gas Emissions. Focused in the industry of shipping, our class society has carried out research and development around the newly introduced concepts of Energy Efficiency Design Index (EEDI), Energy Efficiency Operational Indicator (EEOI) and Ship Energy Efficiency Management Plan (SEEMP). It is a priority within Lloyd's Register to continue playing a leading role in the discussions around Emissions, as this is an issue that will heavily affect the future of current and future generations and is therefore directly aligned with our mission. While climate change and carbon management monopolizes the attention of the Shipping Industry there are a lot of other environmental challenges to be met; one of the most critical being the Ballast Water regulations, mandating the retrospective installation of treatment systems on vessels with a keel laying date of 2010 onwards, when the respective International Convention becomes effective. Lloyd's Register is assisting its clients through its Ballast Water Management Services. Providing tailored solutions, Lloyd's Register helps shipowners to develop a safe, practical strategy to reduce the risks associated with ballast waste management, meet environmental responsibilities and comply with the relevant IMO guidelines. Further, Lloyd's Register has recently published the third edition of its Guide to Ballast Water Treatment Technology which provides independent and impartial information on commercially available and developing technologies

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for ballast water treatment. Lloyd's Register has recently launched its new service FOBAS Engine which offers a significant increase in day-to-day knowledge of operational engine performance. FOBAS Engine provides a clear indication of performance, lubrication and wear conditions for slow-speed two-stroke marine diesel engines. This is achieved through detailed analysis of engine performance variables combined with advanced dilution analysis of used cylinder, fuel and system lubricating oils. In the post-Copenhagen era shipping is under increasing pressure to comply with evolving regulations and become cleaner and greener;

justifying that it still remains the most efficient industry. And all of the above under the common denominator of safe operations. Environmental protection always being in the core of Lloyd's Register mission, we continuously invest in research, training and the development of new services willing to be close to our clients but also meet the commands of the "new era". But we must not forget the significant role of the human element in all of these challenges. Further to the adoption of the Maritime Labour Convention 2006 (MLC, 2006) by the International Labour Organisation (ILO), setting minimum standards in specific areas relating to

the health, safety and welfare of seafarers, Lloyd's Register has developed, led by the Hellenic Lloyd's S.A. offices in Piraeus, a dedicated consultancy service proposing to owners and managers a complete action plan looking to integrate human factors considerations into operational and safety management systems. The industry is urgently looking for expertise, experience and services in support of managing compliance with new regulations. We believe it is crucial that these are provided with the assumption that our industry needs to be sustainable - balancing economic, social and environmental issues in harmony.

SPYRIDON ZOLOTAS Country Manager RINA Hellas

products and tools for designers, shipyards and shipowners.

based on an index that accounts for any possible source of environmental impact from the ship and sets specific goals for the reduction of such impacts. A specific software tool allows for the comparison of a large number of design solutions and operational procedures contributing to the definition of the Environmental Index. The designer, yard and owner are thus assisted in the selection of the optimum mix that will lead to a result which exceeds all national and international emission requirements.

1. Our focus is on growing our services to shipowners in Greece and Asia, in China especially. We have recently strengthened our plan approval teams in Piraeus. This was set up in order to provide Greek shipowners with a quick response on all technical matters relevant to their ships. The rapid growth of the RINA-classed Greek fleet is the confirmation that Greek owners appreciate this service. With the aim to follow the needs of our clients, we have opened new survey offices at Panama, Las Palmas, Brisbane and Taiwan, in order to improve our services. I would like to mention one of the results of our efforts: last year, we finalised with the NASDAQ Global Marketlisted Greek shipowner Starbulk an agreement for classification of a total fleet of eleven dry bulk carriers with an average age of 10 years. In addition to the strengthening of RINA world-wide network, we have lately focused on increasing offshore activities, launching the new Oil & Gas business line, and on developing green Î?.Î§.104

2. In the offshore field, RINA has taken a lead in the developing market for floating LNG terminals. It has been chosen to class the first offshore Floating Storage and Regasification Unit (FSRU), the 138,000m3 Moss-type Golar Frost under conversion into a 3.75bcm per year FSRU for OLT for service offshore Livorno. RINA is providing studies and support for a number of further offshore LNG projects, including the Triton new building for GdFSuez and Hoegh which is likely to be the world's second offshore LNG FSRU. New services being provided include mooring analysis, sea keeping analysis, fatigue life assessment and site analysis, technology qualification, compliance with EN 1474-3:2008 (offshore transfer system), fire & explosion risk analysis. For what concerns the green approach to shipping industry, RINA has recently launched the new goal-based environmental additional class notation Green Plus, which allows design flexibility and rewards innovative technologies. Green Plus was developed to provide shipowners, designers and yards with a goal-based approach to environmental management. It allows them select the most cost-effective combination among various possible design solutions and operational procedures which can be applied to a ship in order to improve its environmental friendliness level, taking into account energy efficiency and CO2 and other GHG emission reduction. Instead of adopting a prescriptive approach, Green Plus is

3. At RINA, we accept no compromise on aspects like protection of the human life and the environment. Our aim is to propose solutions and tools for better management of resources to achieve always the highest standards in terms of safety and pollution prevention. The maritime world is taking more and more interest in risk assessment techniques, for example those which, among other things, allow optimisation and prioritisation of intervention in all areas of shipping operations. Mandatory rules are moving from a prescriptive to a goal-based approach, and the latest RINA voluntary certifications, such as for example Green Plus, reflect this trend in the regulatory scenario. Nowadays, RINA is closely involved in the prevention of air pollution, firstly in its institutional role through mandatory rules and tools, and especially Marpol Annex VI. Then, for those wishing to operate beyond the mandatory standards, we have also developed specific voluntary certifications related to CO2 emissions and sulphur oxide emissions.

MARKET

Sale and purchase market review for the first quarter of 2010 • Economic environment By the end of 2009, the economic indicators of the developed countries had led to the conclusion that the stimulus programmes by governments around the globe had not been as effective as had been hoped. Therefore, we could not expect much of a contribution from these countries to world growth and trade volumes during 2010.

BY ÔAKIS ÅFSTRATIOU Consultant S+P Department George Moundreas and Co S.A.

Ν.Χ.108

On the contrary, the fourth quarter growth rate indications for China, its export-import increase, its industrial production, local consumption and foreign direct investments clearly showed that China rapidly returned to previous growth rate levels and would be the driving force behind the world economy, trade and transport in 2010, offering invaluable support to the charter market. The first month of 2010 confirmed all of the above forecasts. The growth rate of China, which jumped to 10.7% in the fourth quarter of 2009, gave signs of continuing, as exports increased to 21% and imports to 85% from the previous year, whereas the fall of the inflation to 1.5% eased worries about the economy overheating. In parallel with the lead of industrial production, the Indian growth rate of 7% to 9% justifies the government's aspiration to reach the Chinese growth rates by 2014. As far as Russia is concerned, Western analyses reckon that the extensive re-

stocking needs will boost growth this year to around 7%. On the part of the developed economies, the Brazil recovery was still obvious, despite inability to create new jobs. However, there is some light at the end of the tunnel in the form of industrial production, productivity and occasionally from retail sales in the US, which gave the initial impression that the economy of the developed countries at least has stabilised. The comeback message of the BRIC growth, together with the stabilisation signs of the developed economies, were immediately reflected in the enormous investment plans of iron ore producers and their ideas for significant price increases. Within this framework, February was again characterised by worries and comments concerning a bubble in the Chinese economy due to the enormous stimulus plan which inflated the cost of

Nevertheless, the world economy shows that the growth of China, India, Russia and Brazil will return this year to the old rate of 9% to 10%, 7% to 9%, 7% and 4.5% respectively and the economies of the developed countries, although still in slow motion, will improve this year from negative growth in 2009 to growth of between 0.5% to 2.5%. This means that about 300 million tons of iron ore and coal will be added this year to world trade, which together with the other commodities is forecasted by the WTO to increase by 9.5%. This is enough to absorb most of the 900 new bulkers which are estimated to be delivered this year by the shipyards and thus maintain the above BDI fluctuation at around 3,000 for a long time ahead, given that new deliveries next year will be almost the same as for 2010. This means, that if in the meantime the developed economies do not suffer a double dip after termination of the stimulus packages and their growth proves to be sustainable and accelerated, then the volume of the world trade after its collapse by 12% in 2009, might be restored earlier than 2011 as it was initially estimated, enabling the charter market to escape from the limited range of 3,000 BDI.

n BULKERS

n TANKERS / CONTAINERS

DRY CARGO CHARTER MARKET IN BRIEF

living and especially the construction sector and real estate prices. In fact, a drop in Chinese economic activity forced the charter market below the 3,000 landmark for the last 12 months, from a peak above 3,000 during January. This proved once more that the shakey growth of the developed countries, as indicated by instability in consumption, weekly unemployment payroll, falling prices, interest rates, stagnation etc, leaves the charter market still totally dependent on the BRIC countries and especially China. This confirms the explanation of the phenomenon of the Baltic Dry Index peaking at around 3,000 for the last 12 months. In fact, without the support of the trade from the developed counties, the BRIC trade

growth is only enough to just absorb the new tonnage coming out of shipyards and maintain charter levels without potential for any boost in rates. This dependence of the charter market on China resulted in a rise of the BDI again above the 3,000 landmark during March. The reason was that the imminent price hike of iron ore by the mining companies due to a surge in demand had led the Chinese to increase imports, taking advantage of the old low prices to pile up inventories at low cost. As a result and upon signing the first new contracts for Far Eastern steel mills with the mining companies at an 80% to 97% price increase, the trade volume decreased in April and the BDI fell again below 3,000.

n BULKERS The year 2009 was the year of alternating between a tremble of fear about the imminent future of the market because of "too poor a freight market, too much new shipbuilding coming up too soon, too little decommissioning, a very weak economical future" and restrained smiles because "things are not so bad as they look, a large number of new shipbuilding projects will be cancelled, economic indices will soon be heading upwards" and the like. In spite of various positive and negative interventions including FFA contracts, the market ultimately, remained "weak but steady" between the 2,000 and 3,500 mark. By spring of 2010, the market continued within the same parameters. It is still "weak yet steady" but the mood is different. All this time, we have seen the new buildings delivered being absorbed by the freight market, regardless of the low levels of decommission activity, mainly due to healthy 109 Î?.Î§.

MARKET

growth of the BRIC economies, specially the Chinese one. Furthermore, the developed economies are not so dead as they used to be. The banking sector has been a little bit more active now than before, the new building deliveries slowed down, few were cancelled, and although new buildings are delivered every day and scrapping rates are still poor, the charter market remains steady at a satisfactory level of 3,000 in BDI unit. All in all, the future looks much brighter now. n TANKERS / CONTAINERS

This market does not enjoy the same favourable conditions as with bulkers. The weak oil prices during the winter, underline the low demand for energy for industrial use, which is in line with the slow recovery of the developed countries. The same reason was also behind the very poor charter rates for containerships, because of reduced Chinese exports to the developed countries, resulting in about 10pct (%) of the container tonnage being idle. Î?.Î§.110

SECOND HAND SHIPS SALES MARKET n BULKERS Prices always reflected expectations rather than reality. Having said that, it is very interesting to see that although the increase of resale prices from December 2009 to April 2010 was marginal (i.e.1.5%) for capes it did reach a substantial 10% for prompt delivery for the handies. However, when you look at the five-year-old and twentyyear-old ships, it is an entirely different story. One should remember that banks are not as generous as they used to be. On the contrary, they are very inflexible, albeit negative with regard to new loans, even with good, longstanding customers. Banks are suffering a lot not only from their own mistakes, or from liquidity, but also from previous loan agreements when spread agreed ranged between 0.5% and 1.5% over LIBOR. Therefore, an increase in pricing (though the freight market remains weak but steady) reflects the shipping community's optimistism for the future, backed up by savings from the old good

days, and little banking assistance. However for the 20 to 25-year-old vessels, the price increase (from 13% to even 40%) reflects, in our opinion, the over optimism of ship owners, as well as their strong desire to forget the last three months of 2008 and the first three of 2009. Maybe they believe that the golden age of 2007 - 2008 will be repeated while their new vintage acquisitions are still viable. Let's hope their dreams will come true. n TANKERS

In theory, the rule of supply and demand should prevail in this market as well. The phase-out of single hull tankers in February 2010 left some 700 tankers of about 52.0m tdw in service, out of which about 170 units are over 60,000 tdw. These vessels have not been scrapped yet, nor converted into bulkers. The fluctuation of prices has been very restricted. Even though freight market is extremely volatile and nothing fancy is expected in the near future freightwise, prices have been pushed upwards, though not as much as for bulkers.

MARKET

n S+P ACTIVITY The strong restriction in financing, the high financial cost wherever finance existed and the reborn opportunity cost mainly for bulk carriers, (back to the future), made the newly-built second hand ships more expensive than the building of new ones. At the same time the old ladies enjoyed a new era of attraction from hungry takers who actually paid out of their pocket. Î?.Î§.112

Greeks were cautious in their acquisitions, not only because of the market development, but mainly because of an inability to secure workable finance. Furthermore, a lot of new buildings are coming up between 2010 and 2012 and the cash for the conservative Greeks is necessary security if they are to avoid unpleasant surprises. These days, very few newly built ships are expected to be delivered. This might lead to the

pleasant surprise that the freight market could become a bull market once more, as long as the financial crisis in the developed world finally passes -some say between 2012 and 2013.

NB: All the details upon which the present review is based, are coming from the files of the shipbroking firm George Moundreas and Co. S.A.

A POINT OF VIEW

LPG market overview for Q1 2010 Highlights of 2009

BY CHRISTOS TRIANTAFYLLIDIS Broker OIL/GAS, STEALTH MARITIME CORP SA

Ν.Χ.114

In contrast to previous years, market volatility was generally more limited in 2009 and rates did not reach the extreme lows seen in the past. Prices for major oil products and associated gasses rose steadily throughout the year - by around 100% for crude oil, 160% for naphtha and between 100% and 110% for butane and propane. By contrast the price of natural gas, ammonia and chemical gas (ethylene, propylene, butadiene etc) fell sharply during the year, despite a brief reprise in Q2. Aside though from the effects of the economic crisis, we can note several trends during the year, including: • A growing imbalance between increasing product supply and tonnage availability, the latter resulting from the massive influx of ships ordered between 2006 and 2008. The drop in the supply of product was caused not only by further delays in the commissioning of new production units (Qatar, Abu Dhabi, Africa etc), but also by the technical problems experienced by some producers (Algeria, North Europe, Ukraine etc) plus in some of these countries production was lower than in previous years. While this tonnage overcapacity was expected, the impact of this surplus varied widely according to the different sectors. • Low natural gas prices in the US created a sig-

nificant disparity with crude oil prices, opening up the possibility of new price arbitrages with Europe and the potential for US exports. On the other hand, we witnessed a substantial decline in the transatlantic trade of ammonia from Ukraine's terminals, which were often mothballed due to the high production cost caused by steep natural gas prices. • A sharp fall in short and medium-term hire rates, of between 20% and 40% for the larger ships (22k to 80k cbm) and between 10% and 20% for the smaller sizes. Few long-term contracts were registered, except for a handful of deals either linked to NBs or 2nd hand sales. • Significant resistance was noted in the chemical gas market (propylene, butadiene, crude C4) which can be explained by fewer NB entries and the development of inter-continental arbitrages which favored long-haul voyages and thus created more tonne-miles. We note however a general downturn in freight levels from the peaks seen a year earlier, equivalent to a fall in income of about 60% on certain routes. • A "black" year for the VLGC sector, which suffered a prolonged collapse, the like of which has not been seen for many years. Even if this critical solution was expected due to the large numbers of NBs, regardless of the economic cri-

n JANUARY '10 January saw the smaller size LPGs monthly TC rates remaining at steady levels, compared to the levels reported for the close of 2009. Less harsh were the respective indicative rate figures for the ships between 8k and 35k cbm, with levels for January appearing between 1% and 4% lower than the respective figures for the close of December 2009. For the larger units (>54k cbm) we witnessed a firming in monthly rates, with an increase from 1% up to 2.5%…

12 Month Time Charter Rates

1 JANUARY '10 Monthly Daily T/C Rates T/C Rates

31 JANUARY '10 Monthly Daily T/C Rates T/C Rates

Market Changes

3,200 cbm S/R 8,250 cbm (Eth) 15,000 cbm S/R 24,000 cbm 28,000 cbm 30,000 cbm 35,000 cbm 54,000 cbm 57,000 cbm 78,000 cbm

$270,000 $520,000 $515,000 $515,000 $540,000 $590,000 $620,000 $590,000 $465,000 $445,000

$270,000 $515,000 $510,000 $510,000 $530,000 $575,000 $595,000 $600,000 $470,000 $455,000

Steady Weaker Weaker Weaker Weaker Weaker Weaker Firmer Firmer Firmer

$8,881 $17,105 $16,941 $16,941 $17,763 $19,408 $20,395 $19,408 $15,132 $14,638

$8,881 $16,941 $16,776 $16,776 $17,434 $18,914 $19,572 $19,737 $15,460 $14,967

n FEBRUARY '10 Moving into February, the scenario seen here was quite similar: the smaller units remained at steady levels throughout the month, while the levels reported for the ships ranging from 8k and up to 35k cbm were weaker. The (downwards') trend for this month was from 1% reaching up to about 2.8% during February. With regard to larger vessels, although we saw the 54k cbm units at 1.5% higher compared to end January, the 57k sector did not manage to follow the same trend and thus was seen to be 3% lower than the reported levels for January. Nevertheless, the bigger units (i.e. 78k and above) showed a resistance to this negative trend and maintained the same attitude as seen for the 54k cbm ships, i.e. monthly rates firmed up to 5.5%!

12 Month Time Charter Rates

31 JANUARY '10 Monthly Daily T/C Rates T/C Rates

28 FEBRUARY '10 Monthly Daily T/C Rates T/C Rates

Market Changes

3,200 cbm S/R 8,250 cbm (Eth) 15,000 cbm S/R 24,000 cbm 28,000 cbm 30,000 cbm 35,000 cbm 54,000 cbm 57,000 cbm 78,000 cbm

$270,000 $515,000 $510,000 $510,000 $530,000 $575,000 $595,000 $600,000 $470,000 $455,000

$270,000 $510,000 $490,000 $490,000 $515,000 $565,000 $585,000 $610,000 $455,000 $480,000

Steady Weaker Weaker Weaker Weaker Weaker Weaker Firmer Weaker Firmer

$8,881 $16,941 $16,776 $16,776 $17,434 $18,914 $19,572 $19,737 $15,460 $14,967

$8,881 $16,776 $16,118 $16,118 $16,941 $18,585 $19,243 $20,066 $14,967 $15,789

sis, its magnitude has been surprising. • In contrast to the other sectors, and despite multiple NB deliveries in 2008, the small ship and coaster sector surprised the market with its relatively strong resistance to difficult market conditions. After a somewhat slow start to the year, the market became increasingly busy over the course of the summer before firming up in Q4, thanks to the significant intra-refinery trade, increased LPG demand by the petrochemical industry due to the rising price of naphtha, sizeable tone-miles created by the long distances to the zones of consumption, and the development of a captive trade in Asia-Far East region. The close of the year recorded a further firming in spot and TC rates, and finding available tonnage in some areas proved difficult. Summing up all the above, the last year of economic crisis has been critical. Nevertheless the fall in energy prices at the start of the year, combined with state-sponsored stimulus programmes, has kept up consumption in the larger industrialized countries, leading to a better outcome than feared at the beginning of 2009. Overall, the shipping market for LPG and associated gases developed in contrasting ways depending on the individual sector - due mainly to the large influx of new tonnage, rather than lower production levels or reduced demand for product. This disparity also reduced the income gap between the different sectors. Twelvemonth hire rates for vessels between 8k cbm and 80k cbm ranged from usd450k to usd 650k per month respectively, equivalent to a ratio of 1 to 1.4 even though the original investment for these ships is 1 to 3! So, have we finally reached the lowest ebb? How long can VLGC operators operate their ships at rates below running costs? Can the new production facilities sufficiently absorb the large number of NBs? When will the economic turmoil affecting the West come to an end? And will the rise of China and the emerging countries continue to breathe life into the other world economies? There are many questions to resolve in the coming months. The answers are no doubt diverse, open-ended and not always obvious, but it is the challenge that faces us and is one of the elements that makes shipping so fascinating! Leaving 2009 behind us, let's see how Q1 of 2010 has treated this market to date… 115 Ν.Χ.

A POINT OF VIEW

n MARCH '10 The closing month for Q1 2010 did not hold any surprises for the market's players; HANDYs and medium size LPG carriers remained at a steady levels throughout March, while levels reported for the large (LGC) and very large (VLGC) units were weaker. The 35k cbm vessels were seen at about 1,7% lower compared to figures for the end of February, while the 54k and 57k cbm units lost about 4.9% and 1.1% respectively. Last but not least, the 78k cbm ships appeared at slightly lower levels compared to the previous month's closing figures i.e. 1% lower.

12 Month Time Charter Rates

28 FEBRUARY '10 Monthly Daily T/C Rates T/C Rates

31 MARCH '10 Monthly Daily T/C Rates T/C Rates

Market Changes

3,200 cbm S/R 8,250 cbm (Eth) 15,000 cbm S/R 24,000 cbm 28,000 cbm 30,000 cbm 35,000 cbm 54,000 cbm 57,000 cbm 78,000 cbm

$270,000 $510,000 $490,000 $490,000 $515,000 $565,000 $585,000 $610,000 $455,000 $480,000

$270,000 $510,000 $490,000 $490,000 $515,000 $565,000 $575,000 $580,000 $450,000 $475,000

Steady Steady Steady Steady Steady Steady Weaker Weaker Weaker Weaker

$8,881 $16,776 $16,118 $16,118 $16,941 $18,585 $19,243 $20,066 $14,967 $15,789

$8,881 $16,776 $16,118 $16,118 $16,941 $18,585 $18,914 $19,079 $14,803 $15,625

SnP / Fleet Summary / NBs Vs Scrapping VLGCs: As already mentioned, 2009 was a disastrous year for this sector and the market indicators remained permanently in the red. Despite a forecast increase in new production and the "removal" of 5 old units for demolition, the entrance of 13 NB's between now and 2013 means the outlook for this sector remains uncertain for the next 12 to 18 months or so. LGCs:With six 60k cbm vessels joining the fleet in the last 2 years and the sale of its older untis for demolition, together with the absence of any pending orders, this sector is likely to find a new lease of life in the near future. MGCs: During the past couple of years (2008 and 2009), we had several entries of NB's in this sector: 11 * 35k cbm, 10 * 22k cbm and 3 * 20,6k cbm, which were delivered into a difficult market environment. This influx of extra tonnage shook the market in the early months of 2009, although in the middle of last year there was a respite due to recovery in NH3 trade from the Middle East. Given

n LPG CARRIER NET FLEET SUMMARY

(as at end March 2010)

End Mar 10

Jan.-10

Feb.-10

Mar.-10

Ν.Χ.116

ADDIT. DELET. Net change

1-9,999 No. Cbm 6 26.738 1 2.497 5 24.241

10-19,999 No. Cbm 0 0 2 25.332 -2 -25.332

20-49,999 No. Cbm 2 58.128 0 0 2 58.128

50-69,999 No. Cbm 0 0 1 55.859 -1 -55.859

70,000+ No. Cbm 4 323.905 2 147.388 2 176.517

Total No. Cbm 12 408.771 6 231.076 6 177.695

ADDIT. DELET. Net change ADDIT. DELET. Net change ADDIT. DELET. Net change

1-9,999 No. Cbm 3 10.720 0 0 3 10.720 1 3.500 0 0 1 3.500 2 12.518 1 2.497 1 10.021

10-19,999 No. Cbm 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 25.332 -2 -25.332

20-49,999 No. Cbm 1 35.128 0 0 1 35.128 1 23.000 0 0 1 23.000 0 0 0 0 0 0

50-69,999 No. Cbm 0 0 1 55.859 -1 -55.859 0 0 0 0 0 0 0 0 0 0 0 0

70,000+ No. Cbm 3 243.112 1 75.475 2 167.637 0 0 0 0 0 0 1 80.793 1 71.913 0 8.880

Total No. Cbm 7 288.960 2 131.334 5 157.626 2 26.500 0 0 2 26.500 3 93.311 4 99.742 -1 -6.431

A POINT OF VIEW

1-9,999 No. Cbm Due for SCRAP (current)

10-19,999 No. Cbm

20-49,999 No. Cbm

15.063

39.103

50-69,999 No. Cbm 0

70,000+ No. Cbm

Total No. Cbm 2

54.166

LPG Fleet and -Mar. 10

796 2.844.940

827.498

2.866.658

21 1.224.176

New build. order book

266.818

84.400

228.200

406.793

986.211

144.850

296.500

245.000

686.350

66.500

34.300

158.000

258.800

5.000

80.026

85.026

483.168

84.400

559.000

889.819

123

2.016.387

2010 2011 2012 2013 2014+ TOTAL ON ORDER

LPG CARRIER 3

Year End

01-April-10

141 11.209.730

1.117 18.973.002

ORDERBOOK & DELIVERY SCHEDULE 3

,000m3

% Fleet

2010

2011

2012+

FLEET, 000m

2006

2007

2008

2009

No.

,000m

<5000cbm

1.323

1.374

1.404

1.447

643

1.460

135

9.2%

5-20,000cbm

1.902

2.027

2.210

2.263

266

2.242

510

22.7%

247

159

103

20-40,000cbm

2.027

2.301

2.480

2.759

2.776

468

16.9%

229

217

40-60,000cbm

1.466

1.360

1.368

1.164

0.0%

>60,000cbm

8.549

8.905

10.583

11.179

141

11.273

974

8.6%

489

243

242

15.267 15.967

18.045

18.812

1.166

18.915

134

2.087

11.0%

1.055

660

371

14,5

1.166

134

1,63

11.2%

0,83

0,51

0,28

TOTAL FLEET TOTAL M. DWT

12,4

the number of NB's to be delivered during 2010 and 2011 (8 * 35k cbm units and 10 * 22k cbm), the next 2 years seem quite open for this sector, although the flexibility of employment for these ships in the LPG, NH3 and chemical gases markets will facilitate their integration. HANDYs: With regard to fleet renewal we can count 17 NB's delivered in 2009, of which about 50% were ethylene carriers, while nearly 50 units Î?.Î§.118

are still on order for delivery between 2010 and 2012. Even taking into account the probable sale for demolition of the oldest units (i.e. 5 * 6k cbm to 8k cbm were already sold in 2009), the coming years will be challenging, while it remains to be seen if the petchem market can absorb all this tonnage. Small LPGs:In contrast to the other sectors, and despite multiple NB deliveries in the past year, as

stated above, the small ship and coaster sector surprised the market with its relatively strong resistance to difficult market conditions. Here again, we registered a large number of NBs: 25 units delivered in 2009 and around 50 to come between 2010 and 2013. However age restrictions and vetting standards will certainly play their part in the elimination of many vessels, while we should also remember the impact of growing markets in Asia and the Far East.

INTL FORA

the

2010 Year Seafarer

rom my perspective, IMO is focusing on three major themes in 2010: seafarer issues, climate change and the scourge of piracy. IMO has decided to designate 2010 as the "Year of the Seafarer". This gives the Organization, together with the international community at large and the shipping industry, in particular, the opportunity to pay tribute to the more than 1.5 million seafarers, from all over the world, for their unique contribution to society and to recognize the responsibilities they shoulder in the execution of their daily tasks and duties, in an often hostile environment. The theme should, furthermore, help to attract continued attention to some of the hazards that confront seafarers nowadays, such as pirate attacks, unwarranted detention when their ships are involved in accidents, refusal of shore leave for security purposes and abandonment, to name but a few.

of the

only at sea but also in the broader maritime industry ashore. If studies that are underway at present confirm the reported shortage of qualified merchant navy officers worldwide, it makes it ever more incumbent upon the shipping industry and the international organizations concerned (most notably IMO and ILO) to take action now to prevent a situation in which ships are inadequately manned because of the lack of sufficient skilled personnel.

The selection of 2010 as the "Year of the Seafarer" complements the "Go to Sea!" campaign that IMO launched in November 2008, with the "Round Table" of international shipping associations and the International Transport Workers' Federation, to focus attention on the urgent need to attract young people of the right calibre to the seafaring profession, by emphasizing the rewarding, stimulating and long-term prospects that seafaring offers, not Î?.Î§.12

BY EFTHIMIOS E. MITROPOULOS Secretary-General, International Maritime Organization

Posidonia has long been established as one of shipping's premier industry events, attracting people of genuine authority and influence from all sectors of this diverse industry, who will, no doubt, take the opportunity to debate and ponder - and perhaps come up with solutions for - the key issues of the day.

A key event in the "Year of the Seafarer" is the diplomatic conference to be held in Manila, Philippines, from 21 to 25 June 2010, to adopt an extensive set of amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW) and its associated Code, to bring them both up to date with developments since they were extensively revised in 1995; and to enable them to address issues that are anticipated to emerge in the foreseeable future. This is an extremely significant undertaking and should be warmly welcomed by the maritime community because, once the proposed amendments have been adopted and have entered into force, the necessary global standards will be in place to train and certify seafarers to operate modern ships, with their increasing technological advancement, for some time to come. Equally, the preservation of the environment

CYPRUS SHIPPING

Gearing up for the Cyprus Presidency BY VASSILIS PH. DEMETRIADES, Coordinator of the Cyprus Presidency to the Council of the EU on areas of Transport and Telecommunications, Ministry of Communications and Works Republic of Cyprus

From 1st July 2012, Cyprus will take over the rotating presidency of the EU Council for six months. The Cyprus presidency forms a part of the Trio Presidency with Poland and Denmark being the other two partners who will hold the Presidency in the second half of 2011 and the first half of 2012 respectively.

he trio system of presidencies is a relatively new innovation from the EU and is designed to ensure consistency of message and direction that may otherwise be compromised by the short length of presidency terms. The three Presidencies, in close cooperation with the European Commission, will formulate an 18month program of Council activities. The trio partners will also agree to work closer together during the 18 months in order to foster the implementation of the joint aims and projects. This applies in particular to issues which will be treated as priorities by all three Presidencies. The richness of maritime expertise which lies in the Maritime Directorates of the three countries, their long maritime tradition and strong shipping interests signal their active contribution towards shaping the EU maritime transport policy.

The main task of the EU Presidency is to run the agenda of the Council for six months. Approximately 85% of this agenda is "inherited". In other words, the Presidency examines the dossiers that simply "land" on the Presidency's table (i.e. examination of the incomplete dossiers, examination of the amendments of existing Community Legislation and of the new proposals submitted by the European Commission). Cyprus, together with Poland and Î?.Î§.120

CYPRUS SHIPPING

Denmark, is carrying out a screening exercise on the "inherited" agenda. The recent adoption of the third maritime safety package was a quality step towards building the EU's comprehensive maritime safety policy. As a result, the Maritime Directorates of all the EU member states are now in the process of the effective implementation of the new legislative measures. All these strict measures should be offset with positive initiatives for the EU shipping industry. Cyprus, during its Presidency, will attempt to undertake actions towards achieving and maintaining stable and predictable global competitive conditions for EU shipping and its related activities, within the framework of the European Maritime Transport Strategy of 2008-2018. Cyprus will strive to promote policy measures that will be in line with the new White Paper on EU Transport Policy for the decade 2010-2020 which is aimed to achieve transport sustainability. Furthemore, Cyprus, together with the other two partners of the trio, will continue to work towards a more efficient maritime transport sector, reducing its negative impact on the environment and minimizing the adverse effects of the economic crisis. As part of the "inherited agenda", according to the new European Commission's Work Program, will be the need to address the social dimension of shipping. This could be achieved through a legislative and non-legislative package of initiatives in maritime transport, most notably in the areas of training and certification of seafarers (STCW Convention) extended also to cover issues under the ILO Maritime Labour Convention (MLC 2006) and its effective application in the EU. Cyprus under its Presidency will have to deal with these proposals. It is obvious that the great bulk of a Presidency's programme will consist of inherited and wholly foreseeable material. It is a Î?.Î§.122

Cyprus, together with the other two partners of the trio, will continue to work towards a more efficient maritime transport sector, reducing its negative impact on the environment and minimizing the adverse effects of the economic crisis.

fact that the Presidency's capacity to set priorities in EU policy making is limited to around 10-15% of the Council's activities. In spite the above, it is worth for Cyprus to explore this potential towards influencing the EU policy agenda especially on maritime affairs. Cyprus, being the Mediterranean representative of the Trio, will possibly focus on the international and regional dimension of the EU Integrated Maritime Policy in an attempt to further develop the cooperation/synergies and the integrated approach to maritime affairs in the area of the Mediterranean. Cyprus, an island EU member state of just 0.2% of EU's total population, hopes that size does not matter when it comes to a range of challenges. History may be on its side as

small member states often run successful presidencies as they can be better at listening and brokering, key skills for an effective neutral and impartial chairing of the meetings. For Cyprus this will be a moment in the limelight, a great challenge which requires strategic planning, and intensive political and organizational activities on national and European level. A successful Presidency is the best promotion of Cyprus and an opportunity to create positive image of Cyprus both in Europe and internationally. In the area of shipping and maritime affairs, Cyprus will undoubtedly promote legislative and political decisions, brokering compromises between the member states for the benefit of EU and global shipping, proving once again its leading role in European and international shipping scene.

CYPRUS SHIPPING

Cyprus Shipping - National Developments A New Era for Cyprus Shipping

BY THOMAS KAZAKOS General Director Cyprus Shipping Chamber

The world's economy went through the toughest times the past few years, and this certainly also affected Cyprus Shipping to a certain extent. Nevertheless, while some shipping companies around the globe faced financial difficulties, we are pleased to note that our domestic industry here in Cyprus through careful, cautious and sensible management, as well as relying on the high quality services offered, sailed through the stormy waters with the least possible collateral damage. Facing up to this financial downturn, was a great challenge and a huge task. But this lead the Industry to see things from a different perspective and made them realise that there was an emerging spectrum of new opportunities waiting to be explored.

he effort to face-up to the World Financial Downturn was one thing, but a major part was concentrated on trying to resolve a number of other important issues adversely affecting Cyprus Shipping. In order to counter-balance the negative impact faced by Cyprus Shipping due to the Turkish Embargo, the Chamber has worked closely with the Government of Cyprus to provide additional financial incentives to Cyprus-based shipping companies engaged in new shipping

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activities in addition to those already existing in its "Tonnage Tax" Law. To be able to attract and more importantly to maintain within its borders a highly lucrative and financially prosperous Industry such as Shipping, Cyprus had to exploit its strengths and limit its weaknesses as an international Shipping centre. In this respect, the viability and maintenance of a com-

petitive Taxation System for Shipping companies, was a must in order to enhance the scope of the shipping activities on the island, something which would contribute to an even faster recovery from the adverse effects from the world financial downturn. Towards the above aim, as a result of ten years of coordinated efforts and close collaboration between the Cyprus Maritime

Administration (Ministry of Communications and Works, Department of Merchant Shipping) and the Cyprus Shipping Chamber, as well as other institutions and Governmental Departments, through successive and successful stages, a big triumph for Cyprus Shipping has been achieved, with the official approval by the European Commission of the new, fully revised and upgraded Cyprus Shipping Taxation System, which had been submitted for official approval in January 2010. Following the official approval by the European Commission of the new, fully revised and upgraded Cyprus Shipping Taxation System, the big success of Cyprus Shipping was completed with the approval of the relative Bill for the new Shipping Taxation System by the Plenary of the House of Representatives, ion 29 April 2010. This approval constitutes perhaps the most

important success for Cyprus Shipping since the formation of the Republic of Cyprus and ensures the viability of the Cyprus Shipping Register and the Cyprus Shipping Industry, as well as the unhindered continuation of the important contribution of the Shipping Industry to the Cyprus Economy, which according to the latest available official statistical figures, exceeds 5% of the GDP. It also marks the beginning of a "New Era" for Cyprus Shipping, which will cover in their most modern form, the main Shipping activities that are offered today in International Shipping, namely Shipowning, Shipmanagement, Crew Management and the Chartering of vessels, rendering Cyprus as one of the most advanced maritime centres internationally. In addition, the approval of the new Cyprus Shipping Taxation System automatically becomes a European Maritime legislative frame-

work, which extends and safeguards European safety rules and regulations to non-EU flag ships. Consequently, it is expected that new shipping companies, both within and outside of the European Union, will seek to benefit from this new, very competitive, and at the same time, fully compatible with the European Acquis, Cyprus Shipping Taxation System, by establishing and operating their shipping offices in Cyprus. In this respect, the labour market in Cyprus will expand and more employment opportunities will be provided. Technical know-how will reach new heights with new capable, expert and active professionals seeking employment within an enhanced and powerful Maritime Cluster. It is for these reasons that we strongly believe that 2010 will mark the beginning of a "New Era" for Cyprus Shipping!

MARKET

An Economist's Eye for the Shipping guy This article tries to analyze current shipping market affairs by utilizing economic theory. Its aim is to encourage shipping professionals to view market movements through an economist's eye thus enhancing their market understanding and financial decision making.

The Shipping Business Cycle

BY DR. STAVROS TSOLAKIS Vice-President, DST SHIPPING GROUP, Visiting Professor, Singapore Management University

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Shipping's main function is to facilitate world trade. Therefore, Shipping is a derived demand depending on World Trade developments. An increase in world trade volumes lead to an increase in demand for shipping services. Consequently, freight rates increase since there are too many cargoes chasing too few ships. Secondhand ships become profitable their owners require a premium to sell and their price increase. Owners tend to keep older ships in service and avoid scrapping. As second hand ship prices increase, newbuilding projects become viable, since new ships are more competitively priced than second hand ships. Therefore, more orders for new ships are placed and newbuilding prices increase. New ships are not readily available and there is a lead time of approximately two years between ordering and delivery.

Therefore, these orders are mostly based on expectations that demand for shipping services will remain strong and freight rates will continue to strengthen. Unfortunately, demand stagnation or reduction and over-ordering due to overestimation of future shipping needs lead to oversupply when all these ships are delivered. The consequences are devastating. Too many ships chase too few cargoes, supply is elastic to demand changes and freight rates soften. Ships become less profitable or even lose money. As a result they lose value and some of them are slow steaming or put in lay-up. Orders for new ships stop, since they do not make financial sense any more, and the least competitive, usually older ships are sold for scrap. This leads to an improved supply demand balance and causes the cycle to start again. Demand varies for each ship type. Bulk carriers depend on economic development and the state of the world economy. Tankers depend mostly on politics and seasonality. A cold winter may lead to a spike in freight rates. Also, tensions between Iran and USA may lead the later to increase its strategic oil reserves thus causing a temporary spike in freight rates without an actual increase in oil demand. Finally, containerships depend on the consumption of finished goods. As long as the American consumer, the world's greatest and most important, is confident and keeps on spending on new clothes and electronic gadgets, containerships prosper. If he lacks confidence and credit, as is the case today, containerships suffer.

Demand Externalities Externalities refer to situations where a market exchange imposes costs or benefits on others who are not party to the exchange. An externality for shipping was the collapse of Lehman Brothers in late 2008. International trade and hence shipping was brought to a halt not due to a change in market fundamentals but due to lack of funding of trade transactions. As soon as confidence on the banking system was restored and letters of credit opened again, commodity trading returned to normal and freight rates recovered. Another externality was the closure of the Suez Canal in the 1960s and 70s. In the beginning goods had to travel longer distances, hence

MARKET

demand increased (the ton-mile effect) leading to high freight rates that made extra large ships viable. However, when the Canal reopened, tonmile demand decreased. In addition, very large ships ordered in the good years came into the market and led to a protracted period of oversupply and low freight rates.

The Economic relationship between Second hand and New Ships Second-hand and new ships are substitutes since an increase in the price of second-hand ships will lead to an increase in the demand for new ships. Moreover, since it is easy for shipowners to switch from second-hand ships to newbuildings, the demand is more elastic thus making these goods close substitutes. On top of replacement and substitution however, the driving force connecting second-hand and newbuilding markets is speculation. Speculative orders of a new ship take place only because either the buyer expects the value of the ship to increase in a relatively short period of time, ideally before the vessel's delivery date or because the seller tries to take advantage of a value increase of a ship he has recently ordered. Although the extent of speculative ship sales is unclear, it is certain and evident that this type of activity exists and takes place in shipping. Therefore, the shipowner/speculator continuously compares the price of a new ship with that of a second-hand. If second-hand prices increase substantially he will be eager to pay more for a newbuilding whereas if they decrease he will ask for a lower price from the shipyard. A major difference however is that whereas secondhand ship prices are market driven, thus depending on the ship's earning power (the freight rate), newbuilding prices are cost driven. This means that they depend more on shipbuilding costs (most notably steel price) than on the freight market. Therefore, despite the significant decrease in second hand prices after the market collapsed in 2008, newbuilding prices did not follow suit because shipyards had to take into account steel price increases. Sometimes however, shipyards may offer substantially low prices either to fill their orderbook even at a loss, or to use the first installments for shipyard expansion Ν.Χ.128

(Chinese Greenfield yards in 2006-2008). They may also do it to strengthen their cash-flow and use it as a negotiating tool for debt restructuring purposes (many mid-sized Korean yards in 2010).

Ship Supply issues Ship supply is difficult to predict for the following reasons: • The secrecy of national shipbuilding associations who do not publish accurate figures of their shipbuilding capacity and the actual orderbook of their members. • The development of many Greenfield yards that lacked experience, and did not report ship orders, delays and cancellations. • The secrecy covering negotiations between yards and shipowners regarding price renegotiations, options cancellations, late deliveries and orderbook slippages. • The competition among classification societies for market share and new orders that encourage secrecy and affect the accuracy of published statistics. • Many deep-sea ships constructed by Greenfield yards are of low quality, not suitable for international trades and are employed in domestic Chinese trades thus decreasing international ship supply. • Many newly reported orders are actually the reincarnation of cancelled orders that did not go through either due to lack of finance or the bankruptcy of the shipyard. The greatest challenge today is to obtain an accurate figure of the ships expected to enter the market over the next couple of years or at least find out how many ships have actually been can-

The greatest challenge today is to obtain an accurate figure of the ships expected to enter the market over the next couple of years or at least find out how many ships have actually been cancelled. The most accurate sources of such information are the engine builders' financial reports.

celled. The most accurate sources of such information are the engine builders' financial reports. Over there, someone can find the actual number of engines ordered as well as the number of those cancelled. Nevertheless, since most of the builders do not differentiate between main and auxiliary engines, such figures shall be treated with caution.

Ship Finance Availability and Credit Crunch Credit Crunches arise from a combination of loan demand pressure and reduced supply of funds. Speculative ship lending is the major source of such economic instability. This type of lending gives rise to bubbles which when they burst, shipping markets crash. As ship prices rise, banks feel they can lend more on the basis of the collateral; as investors see prices going up they want to get in on the game before it is too late. Shipowners see quick profits by putting up newbuildings, until excess capacity results. The problem in this case is that markets can remain irrational longer than the shipowners can remain solvent. A leveraged firm may be forced to sell, while fast accumulating losses put it out of business. The kind of mistake that banks usually make during a recession by foreclosing on many loans is called the fallacy of composition. If enough firms fail to repay their loans, banks may abandon the market or even collapse. When a bank goes out of business, many of its customers will have difficulty finding an alternative supplier of credit overnight. For small companies in particular, finding a new source of funds, especially during an economic downturn, may be nearly impossible. With a large number of banks out and with those managing to survive facing an increasingly large number of loans in distress, and unwilling to take in new customers, more shipping companies find themselves without access to credit. Without credit, the one glimmer of hope without a recovery is squashed.

Conclusion This article analysed current shipping affairs. A mix of economic theory and market analysis was utilized in order to assist Shipping Professionals enhance their market understanding and with various decision making processes.

remains a key objective for IMO and, when we consider environmental issues, it is clear that slowing - and reversing - climate change is the defining challenge of our age. The world is looking to the United Nations as a whole to provide the leadership, guidance, education and information required and, ultimately, action. IMO has a key role to play in what must, of necessity, be a concerted global effort. The shipping industry is a relatively small contributor to the total volume of emissions (some 2.7% on 2007 world data, representing one-tenth of the total of the transport sector) and, on a tonne-mile basis, is a much lower emitter of greenhouse gases (GHGs) than other forms of transport. Nevertheless, IMO has still taken steps to reduce these emissions and has undertaken a multi-faceted programme to improve the industry's performance in this regard. The goal is to put in place a global regime providing for technical, operational and market-based measures resulting in even greater GHG reductions. In March this year, our Marine Environment Protection Committee established a Working Group to build on the significant progress that has been made on technical and operational measures to increase the energy efficiency of ships. To that effect a draft text has been prepared concerning technical measures that can be used as effective yardsticks to measure the energy efficiency of ships and act as the basis for systematic improvement, with its attendant reduction in harmful emissions. The members of the Organization are still engaged in deciding exactly how they want to apply these measures, but I believe that, in due course, they will take the required action, to the benefit of the environment, shipping and IMO. The Committee has also established an Expert Group to undertake a feasibility

study on, and impact assessment of, the various proposals submitted for market-based measures for international maritime transport - before the matter is further discussed during this and the next year. As I said, when addressing the Committee on climate change two months ago, if there is one challenge that we have to face together, this is it. If there is one danger that threatens our future, and the future of our children, this is it. Global issues demand global solutions and IMO is

responding properly to the challenge. This is equally true of another pressing matter, which greatly concerns IMO and the shipping industry at large. It is a source of great concern, and a genuine anathema in the 21st century, that we should currently be experiencing a period when the threat of piracy and armed robbery to international shipping is as pernicious as at any time in history. This applies, particularly, in waters off the coast of Somalia and in the Gulf of Aden, where a large number of seafarers from many

nations have been unwittingly subjected to the terrifying ordeal of attack, with armed pirates boarding their vessels and engaging in hijacking and hostage-taking for ransom. It is against such a worrying background that last year's IMO Assembly adopted two ad hoc resolutions, once again demonstrating the Organization's determination to halt these unlawful acts by, among other actions, recommending measures to prevent and suppress them. The resolutions, thus, reinforced IMO's leadership role in

It is clear that slowing - and reversing - climate change is the defining challenge of our age. The world is looking to the United Nations as a whole to provide the leadership, guidance, education and information required and, ultimately, action. IMO has a key role to play in what must, of necessity, be a concerted global effort. 13 Î?.Î§.

EDUCATION

Evaluation of competence of marine engineers on maintenance sector • Merchant Marine Academy of Makedonia, Greece Aim of the article is the short presentation of a proposed co-funded project by European Commission, under Leonardo da Vinci call, with Merchant Marine Academy of Makedonia to have the primary role of applicant organization. Scope of the project is the development of multiple choice tests for competence evaluation of maintenance marine engineers for ships.

BY D. E. GOURGOULIS C.A. SCHINAS G. P. GOTZAMANIS C. G. YAKINTHOS

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uman factors are related to crew competence in terms of decision-making, communication, operating skills. Human error is an existing parameter that often proves almost impossible to remove from the maritime safety equation. Thus, the human failures can be avoided by different ways: firstly by improving the management and crew organisation; then by doing a careful selection of the crew and thirdly by increasing the training quality and quantity, both for ordinary and emergency situations. The use of the produced multiple choice test besides with the use of engine room simulators would improve both the training and the crew selection. The shortage of innovative actions on safety and maintenance vocational training at a

European level, combined with the need to facilitate employees' training opportunities, pushes and pulls a great challenge for developing progressive learning techniques. Based on the improvements on safety and reliability reported in the other industrial fields, competitiveness of transport by ships should be increased in terms of reduction of accidents (costs and frequency) and optimization of production - operation costs. Marine engineers are on board ship to ensure the safe and efficient operation of machinery. Safe and efficient operation of any individual item of machinery requires regular maintenance. Maintenance requires manpower and time and in some cases they are not always available. Many ships now operate with only three engineers on board and short periods in port provide little time to carry out maintenance. Today during the operation of ship marine engineers follow three types of maintenance: Preventive or scheduled planned

maintenance, corrective-breakdown maintenance and finally the condition based maintenance. The focus of the project is to emphasize the immediate impact of maintenance procedures on the safety assurance in the working ship environment. The intention of the project is to develop an integrated multiple choice test on these issues, adjusted to the special needs of

European shipping and offshore enterprises. The resulting material would be a combination of the theoretical knowledge of academic institutions (Greece, Turkey, Italy) enriched with the valuable experience of consultants and companies' maintenance personnel (Greece, Germany). Experience within the aircraft and military sectors has shown that important benefits may be achieved through the application of computer based training systems. Simulation provides the particular benefit of enabling the response to emergency situations to be practiced within scenarios that would be otherwise too expensive or too dangerous to perform in reality. A very important object, through many of the proposed research project will be the establishment of techniques and processes for the minimisation of dangers that emanate from the operation of engine and subsystems in a Very Large Crude Oil Carrier (V.L.C.C.). The proposed solutions simultaneously

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will lead to the improvement of attribution of installed engineering systems to them. With basic tool of research, the installed full mission engine room simulator of Merchant Marine Academy of Makedonia, the analysis of total behaviour of main engine will be examined when the following events are caused on this:: Deteriorations in the basic sections of engine, changes on the basic parameters of operation, damage in the auxiliary instruments and parts of networks, undesirable energies and abnormalities in the electrical network and all networks that support the above. Planned maintenance is very useful because allows maintenance schedules to be organized and to be fitted in with the ship's operating schedule. However, during the operation of ship there are components that display different rate of damage and besides a defective component can damage other components. The operating marine engineer must be aware of such issues and be willing to adjust maintenance accordingly. The produced multiple choice test will be built using the continuous change on the behaviour of engine due to the programmed damages Î?.Î§.132

with the simultaneous recording-analysis of presented alarms. The multiple choice test will cover events that are presented more often during the equitable operation of engine, alarms that must be observed by the engineer of watch in charge. The produced multiple choice test will be structured having in mind the handbook by a previous Leonardo da Vinci project [Train in Main, Training Material in Maintenance Management] that all possible situations should be examined using the following steps: Consequence of failure (what happened?), the technical cause of failure (Why did it happen?), the designation of improvements/lessons learned (How can it be prevented?) The produced multiple choice test will cover maintenance topics of daily routine of marine engineers, it will help them and besides it enhances the career of marine engineers. It will be useful and valuable for the safety on board. Besides, the training package will help marine engineers to understand security data on board the vessel and on shore. The expected long term impact hinges upon the promotion of life long vocational training in shipping and offshore companies improving at the same time the quality and innovative ness of training methods for European Union's vocational education. The produced multiple choice test will be valuable for the development of a strategy for policy implementation to enhance the safety in the engine room of ships operations as well as quality of shipping. It will propose cost-effective measures for new and existing ships to address the main environmental impacts and safety concerns from correct operation and maintenance. Indeed, produced solutions are focusing directly at the a better workload for the operator by "intelligently" improving at the same time the safety of navigation and upgrading the professional skills of the officer in duty - in other words, building the "virtual" link between the shore based jobs and the seagoing ones, attracting the young ones to the profession and recovering the "Maritime Know How" that we are in risk of loosing.

MARKET NEWS

Update on the Marshall Islands Registry Greek owners now make up the largest segment, by tonnage, within the Marshall Islands Registry, which is administered by International Registries, Inc. (IRI). Theo Xenakoudis, Managing Director of IRI Piraeus office, commented that "Greek owners, who have long played a major role within the Marshall Islands Registry, helped elevate the registry to 56 million gross tons and 2165 vessels at mid-April 2010 and are responsible for 23% of the Registry today". BY THEO XENAKOUDIS Managing Director of IRI Piraeus Office

"Tank ships and bulk carriers continue to dominate the Marshall Islands commercial fleet, while the LNG segment has grown significantly in the past year," Mr. Xenakoudis observed. He also added that "the Registry works closely with owners of all sizes to foster efficient operations". One strategy designed to promote efficiency, quality and service is the network of 20 worldwide offices that allows owners/operators to contact the Registry around the clock and to routinely work with maritime professionals in their regions, who speak their language. This decentralisation philosophy is one of the main reasons the Registry has Î?.Î§.134

been able to attract and maintain quality owners and operators. The Marshall Islands Registry remains the only major open registry to be included on the US Coast Guard Qualship 21 roster for five years in a row. The Registry also maintains its white list status on both the Paris and Tokyo MoUs. "A recent trend in the Registry is the increase of newbuilding tonnage," said Mr. Xenakoudis. "In 2008 for example, 50% of the tonnage entering the fleet was newbuilding tonnage, whereas 70% was newbuilding tonnage in 2009," he continued. The average age of the Marshall Islands fleet is 10 years. In 2009, the Registry strengthened its safety and technical team by adding maritime experts in Asia, Europe and the US. In order to maintain quality tonnage within the fleet and timely service to customers, the Registry employs individuals with a strong technical and safety background throughout its worldwide offices. "Many times it's Friday morning in Europe and a ship, located in a European port, must sail in a few hours; that's the case where the European technical team can offer its expertise and relationship with the local port State Control officials to deal with the matter and assist the owners and operators before the US opens and the vessel loses its commitments," said Mr. Xenakoudis. "Through our worldwide resources, we have an opportunity to better monitor the quality of the fleet, conduct oversight during inspections and work locally with our customers," he concluded.

Crossworld Award for the top performing agency 2009 Crossworld Marine Services Inc has been awarded from POEA as the first one among the four top performing agencies for the Year 2009 with a total evaluation of 87% in quality of service, Social responsibility, HR plans and welfare programs and other strict criteria as set by the POEA.

For all of us, working for Crossworld,this is a precious reward for all our efforts throughout the years,and,a big responsibility to preserve this achievement and work harder in the future keeping low profile. It is well known that the road to the top is difficult,but,it is even more difficult to maintain yourself in the top.. Most important,It would be impossible for us to achieve this without your support,so,allow us to extend our sincere thanks and a promise: "continuously investing in people we build hand to hand a world class crew management company".

• Transas

Apollonia Beach Hotel - Limassol Cyprus five star hotel in a five star location. Right in the heart of the Limassol tourist area and situated on its own private beach ,this five star hotel is an oasis of peace and tranquility amidst lush gardens. Our facilities include • Variety of rooms and luxurious suites with breathtaking views. • Fine selection of restaurants and bars that offer indoor and outdoor dinning

• Friendly atmosphere • Apollonia leisure club with gym area, Jacuzzi, sauna, massage and indoor pool.

Blue Star Ferries now in Chania

ttica Group is pleased to announce the launch of a new service to be operated by the car-passenger ferry Blue Horizon as of Friday 23rd April 2010 in the route Piraeus - Chania. Ultramodern Blue Horizon has a speed of 23 knots per hour, capacity of 1,505 passengers, 580 of which can be accommodated in 184 cabins, and garage decks for 900 private vehicles or alternatively for 130 trucks and 70 private vehicles. Blue Horizon offers A la Carte restaurant, SelfService restaurant, Bars, shops, swimming pool, play ground, lounges, aircraft type seats and all first class facilities and services on board for a comfortable and

pleasant trip. Blue Horizon departs daily from Piraeus to Chania at 14:45 and from Chania to Piraeus at 23:00. The deployment of Blue Horizon doubles the daily itineraries in the route Piraeus-Chania. Attica Group, through the launch of Blue Horizon in Chania and the established service of Superfast XII in the route of Heraklion, strengthens its presence in Crete, by offering high standard services to the two main ports of the island and by contributing to the increase of the total traffic to Crete in a period of economic recession.

n two years, ECDIS equipment becomes mandatory for a number of vessel types. ECDIS would play a significant role in the future of Navigation and leading this change would be beneficial not only for the company itself, but also for the Captain and crew. But is it enough just to install an ECDIS onboard in order to be compliant? A lot of vital issues go along with that. Besides type-approved ECDIS, a vessel should have official Electronic Navigation Charts (ENCs) with regular updates and a crew should be trained accordingly. The need for qualified training will be huge. This is because ECDIS, apart from other Navigational equipment, is a complex system, where various suppliers have completely different MMI and operating principles. One very important factor when it comes to paperless navigation is that the crew onboard has to be certified on the system and also be well-prepared for the future vetting inspections. As an additional benefit, Transas has developed Navi-Planner 4000. This is a new product, which can be used both onboard as a back of the bridge and ashore as a management tool, easily accessed in the future via internet browser. It is an innovative solution from Transas providing a single access to all information needed for every step of navigation. Navi-Planner 4000 is a set of databases, applications and services intended for voyage planning which sets a new standard of safe and efficient voyage planning. Today, Transas is the only company in the market providing a full scope of solutions for the companies who want to be ECDIS mandatory compliant, including type-approved ECDIS, official charts supply, digital services, simulation systems and training. Visit us at Posidonia and let us lead you through this way.

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MARKET NEWS

IBS Announces the Release of a new version of Risk Manager Software

IBS Marine Consulting Group hosted a successful event at Athens Metropolitan Hotel in order to present the new release of their highly innovative and successful Risk Manager Software. The event was attended by 160 participants, representing more than 90 Ship Managers/Operators. The presentation covered the full spectrum of IBS services: 1. Risk Requirements & Safety Culture 2. Risk Management in Practice 3. Risk Manager Software Presentation 4. Improvements from existing software version 5. Integrated Risk & Incident Management 6. Job Hazards / Risk Library / Incident Library 7. Links with SMS & Real Life Following the presentation, there was an interactive session with open feedback from participants, followed by a cocktail reception. Mr Apostolos Belokas, Principal Consultant & CEO commented on the key benefits of the IBS

approach. 1. Full Service Range from SMS update, Risk/Incident Libraries in MS Word, Training, Computer Based Training and fully functional Risk Manager or Software. 2. Fully tailored approach in line with each client's feedback and needs. 3. Risk Manager Software benefits include management or Risk & Incident functions incorporating standard Hazard Map, Root Cause Map, import and export in XML format that will save costs and Risk/Incident libraries incorporated to the software. Mr Belokas also thanked the participants on their confidence in choosing IBS as a service provider and stressed IBS commitment to full support of client needs. Public Relations Contact: +30 210 4520410 Ms Angela Chatzigeorgiou

OLYMPIC CHAMPION painted with HEMPASIL X3

HEMPASIL X3 is the third generation of our pioneering HEMPASIL fouling release technology. It is also Hempel's most advanced yet, delivering unparalleled performance for unparalleled fuel efficiency. ANEK LINES is a traditional yet very progressive shipping company and a valued customer of Hempel. The company decided to apply Hempel's new silicone paint HEMPASIL X3 to their passenger vessel OLYMPIC CHAMPION, which sails between Greece and Italy. The decision was based on the fact that the product guarantees fuel savings and thereby ensures that as an environmentally responsible company ANEK LINES lowers its CO2 emissions. In 2006 OLYMPIC CHAMPION was declared "The European Champion" of passenger/car ferries by the German automobile club ADAC. Maximum fuel efficiency is Hempel's key priority both with regard to controlling costs and taking care of the environment. The application process, which took place at Elefsina Shipyard in Greece, was handled extremely professionally by Hempel's Frosio certified Coating Advisers.

To check on the most current "Marine News" click on www.n-c.gr Î?.Î§.136

CMYK

ÍÁÕÔÉÊÁ ×ÑÏÍÉÊÁ

N A F T I K A

C H R O N I K A

Annual English Edition

Commissioner

Maria Damanaki ‘’Our country needs a real change‘’

ÁÑ. ÖÕËËÏÕ 130 • 05/2010 www.n-c.gr 6

‘’Our focus should not be on what our partners say or do‘’ ‘’We need a new, fair and sustainable model‘’

Everything you wanted to know about Greek Shipping

MAY 2010

(and didn’t know who to ask)

The International Shipping Exhibition 7-11 June 2010

Visit us at Stand No 500 D

ÍÁÕÔÉÊÁ ×ÑÏÍÉÊÁ

CMYK

N A F T I K A

C H R O N I K A

Annual English Edition

Commissioner

Maria Damanaki

MAY 2010

ÁÑ. ÖÕËËÏÕ 130 • 05/2010 www.n-c.gr 6

‘’Our country needs a real change‘’ ‘’Our focus should not be on what our partners say or do‘’ ‘’We need a new, fair and sustainable model‘’

Everything you wanted to know about Greek Shipping (and didn’t know who to ask)

The International Shipping Exhibition 7-11 June 2010

Visit us at Stand No 500 D