Maritime Matrix Today June 2021

MATRIX

TODAY

M AR ITI M E

US$ 3 • ` 150 Vol 10 • Edition 06 • June 2021

Dr Amita Prasad

IWAI develops digital solutions to ensure ease of doing business ISWAN’s Vaccination drive aims to facilitate vaccines for seafarers across India IMO seeks holistic approach to develop MASS Code

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Time-charter rates at all time high Challenges faced by Indian seafarers & trade due to second wave Covid and way forward

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DNV affirms new tank design for LNG retrofits

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new design concept to permit the conversion of crude oil tankers and bulkers to operate on LNG gained a key preliminary class approval, providing shipowners a nearterm path to meet pending fuel regulations and the growing market pressures to reduce emissions. While so far only a few ships have been retrofitted to use LNG, UK-based Newport Shipping believes its concept can provide a cost-effective solution to make LNG retrofits more financially attractive.

Newport Shipping’s concept is based on deck-mounted LNG tanks that can be installed without major modifications to the vessel’s hull. Tank capacity, which is based on a typical ship profile and operating route, would be sufficient for a single voyage before refueling. The innovative fuel tank system, installed as part of a retrofit solution using a dual-fuel engine, reduces the installation costs. The system would also be suitable for carbonneutral methane, such as bioLNG, when these fuels become available in the future.

According to Newport, the approval-in-principle (AIP) from the DNV affirms the technical feasibility of the concept for the VLCC and Capesize vessel classes. It also paves the way for the fuel tank system to be implemented in design work on retrofits by the UK-based ship repair and retrofitting group.

Lianghui Xia, managing director of Newport Shipping believes the concept offers “a practical and cost-efficient solution” to cut fleet emissions in the near-term pending adoption of technologies 04 | Maritime Matrix Today | June 2021

for carbon-neutral fuels such as ammonia and hydrogen, as well as battery technology,” all of which he points out are still a few years away from commercial application.

With an existing global fleet of approximately 100,000 vessels, one of the challenges the shipping industry faces is a near-term solution to reducing emissions for ships in operation today. Shipping companies have been weighing the financial alternatives and operating considerations between the use of low-sulfur fuels or emerging alternative biofuels, the installation of scrubbers, or other retrofits.

Only a handful of companies has undertaken the conversion of existing ships to LNG. One of the higher-profile early adopters was Hapag-Lloyd, which recently undertook the conversion of the 15,000 TEU containership Sajir to LNG-fueled propulsion. While the vessel was designed for the conversion to LNG, Hapag’s CEO Rolf Habben Jansen said the costs at an estimated $35 million were prohibitive and would

not make economic sense for additional conversions unless the cost could be lowered by as much as 25 percent.

Newport believes that its fuel tank system addresses the cost concerns both with the lower installation cost and the lower fuel costs of LNG compared to other transitional solutions. Lianghui Xia points out that CO2 emissions can be reduced by between 20 and 30 percent just by switching to LNG without installing any other equipment.

Conversion of existing ships to the use of LNG Newport says also provides shipowners an advantage with charters and banks which are increasingly making decarbonization a condition of cargo contracts and ship finance.

Newport plans to also support shipowners undertaking the conversion, offering a long-term payment plan over five to seven years on 60 percent of the total cost to enhance the financial case for its LNG retrofit solution.

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Maritime Matrix Today | June 2021 | 05

Cover Story

IWAI develops digital solutions to ensure ease of doing business

Dr Amita Prasad

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bout 14,500 km of navigable waterways in India comprises of rivers, canals, backwaters, and creeks. And annually Inland Water Transport (IWT) moves about 55 million tonnes of cargo in an efficient and environment-friendly mode.

Shippers, Vessel Owners, Industries, Central & State Ministries, Maritime Boards and other internal and external stakeholders for the IWT sector.”

The Inland Waterways Authority of India (IWAI), under the Ministry of Ports, Shipping and Waterways is responsible for the development and regulation of inland waterways for the purposes of shipping and navigation by undertaking development and maintenance of IWT infrastructure on national waterways.

CAR-D (Cargo Data) Portal – Web portal (https:// iwaicargoportal.nic.in)

To ensure ease of doing business, Dr Amita Prasad, Chairperson, IWAI said, “IWAI has developed digital solutions to enable stakeholders to have access to key information for National Waterways using integrated digital platforms. The solutions were identified and developed in consultations with 06 | Maritime Matrix Today | June 2021

Dr Prasad elaborates on IWAI’s development of key digital solutions…

It is a web-based portal for collection & compilation, analysis and dissemination of all the cargo and cruise movement data for IWAI and its stakeholders.

It captures the traffic data for cargo and cruise from different terminal operators, regional offices & suboffices and further analysis the data against key performance indicators.

CAR-D helps in near real time capturing of cargo traffic and passenger traffic with the help of terminal operators, Maritime Boards and regional offices. It is accessible to the all the stakeholders and helps

in understanding the traffic flow patterns, key commodities and potential, key logistics players in the sector and can facilitate cargo consolidation and promotion of potential of inland waterways transport.

PANI (Portal for Asset & Navigation Information) – web portal & Mobile Apps (https://pani.iwai.nic.in ) PANI is an integrated solution bringing river navigation and infrastructure information on a single platform. It provides detailed information on various features of the National Waterways (NWs) and the assets on these NWs, such as fairway, infrastructure facility, cross river structures, connectivity at jetties, emergency services for facilitating transportation of cargo and other vessels through inland waterways. The GIS based Bharat Map portal also helps external stakeholders in voyage planning, leading to ease of business.

The open access platform brings transparency of information for timely decision making based on single source of truth and aims to facilitate transportation of cargo and other vessels through inland waterways. It also helps users in assessing the feasibility of transportation on an anticipated date of journey by simulating historical data against required draught, vertical and horizontal clearance.

Management Information and Reporting Solution (MIRS) Portal (https://mirs.iwai.nic.in ) MIRS is a web-based portal for tracking and monitoring of progress of work undertaken by IWAI under different schemes. The platform comprises of four modules Scheme, Procurement, Project & Asset. It allows all internal stakeholders across departments to have quick access to information on progress of work-flow, physical progress of projects, financial progress as well as utilisation of assets thereby leading better efficient monitoring and management of works and assets.

MIRS leads to better visibility on the execution of all the schemes at granular level. Access to real time information helps competent authorities to focus on the right areas and take timely decisions.

IBP Permission Portal (https://stagethree.ncog. gov.in/iwai) IBP Permission portal is an online application portal that has been developed for granting of permission (Inward/Outward) to vessels plying on IBP route.

The platform allows agents registration, vessels registration which are subsequently used for

Inward/Outward permission through an authoritybased approval workflow.

This significantly reduces the processing time and manual interventions by bringing in transparency and standard operation procedures in a timely manner NOC (https://ntcl.ncog.gov.in/NOC_Structure) NOC web portal assist IWAI to manage the entire process of grant approvals to stakeholders for construction of jetties or other structures on the National Waterways, starting from submission of application for construction to the completion of approval or non-approval as the case may be.

The platform captures key information specific to different structures along with general project details thereby allowing local and Head Office teams to carryout checks and capture them on the platform to enable competent authority to take decision as well provide the status to the applicants. Portal is playing a key role in removing dependencies on hardcopy and manual intervention for facilitating ease of doing business and growth of infrastructure development of inland water transportation.

In addition to the recently developed solutions, IWAI is using solutions provided by NIC or developed inhouse which includes e-office, e-HRMS, SPARROW, iwaiportal and e-Granthalaya. IWAI also intends to develop and customise other solutions, as the need arises, to enhance the capability of IWAI. The impact of these tools will be across the various activities in the IWT sector assisting all stakeholders and promoting IWT sector as an alternate mode of transport. “Single source of truth” will lead to transparency & effective decision making and will provide holistic view various activities and early warning on any issues. These solutions increase collaboration across divergent stakeholders, improve organizational consistency, increased resource agility, enhances ownership and accountability for each stakeholder leading to improved management of activities. By having public access to key work being done by IWAI for the sector, will enhance IWAI’s standing in the market and will increase trust in the sector.

The development and Beta testing of the tools has been completed and are now hosted to NIC and NeGD servers.

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ISWAN’s Vaccination drive aims to facilitate vaccines for seafarers across India

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n response to the second wave of COVID-19 in India, the International Seafarers’ Welfare and Assistance Network (ISWAN) has launched a ‘Vaccination Drive for Indian Seafarers’ in collaboration with Narayana Health and the Medica Group of Hospitals.

Over the last few weeks, ISWAN’s international helpline SeafarerHelp has received a significant number of calls from Indian seafarers who have shared the various challenges they and their families are facing in India due to the disastrous impact of the second wave of COVID-19.

Indian seafarers have reported being unable to join vessels as they could not get vaccinated, which has resulted in increased hardship for the seafarers and their families and worries that they may lose their jobs.

ISWAN’s ‘Vaccination Drive for Indian Seafarers’ will be coordinated by ISWAN South Asia and aims to facilitate vaccines for Indian seafarers as a priority in various cities around India.

The cost is amongst the lowest available – from 630 Indian rupees per dose. ISWAN’s vaccination

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drive will facilitate administration of only World Health Organizationapproved vaccines – currently COVISHIELD in India. Two doses are necessary and the government’s guidelines for the gap between the doses should be followed.

for their support, which has enabled ISWAN’s regional team in India to assist seafarers and families affected by COVID-19.

This vaccination drive has been made possible by a grant from the Seafarers International Relief Fund.

Any companies or organisations wishing to take advantage of this programme may wish to organise an on-site camp for a large number of their employees with the hospital concerned – they should contact ISWAN’s Director of Regions Chirag Bahri at chirag.bahri@iswan.org. uk and ISWAN will facilitate such arrangements.

Seafarers wishing to register for a vaccination through ISWAN’s programme should register on CoWIN at www.cowin.gov.in/home then complete ISWAN’s online form, found with instructions at t.ly/0Cm6.

ISWAN will contact applicants within three working days to notify them when their vaccination has been scheduled and seafarers will be required to pay directly at the hospital concerned. Seafarers should not contact the hospitals directly. Locations of vaccination centres can be found via the online form. Seafarers with any questions about the vaccination drive can contact SeafarerHelp – ISWAN’s free, 24-hour, multilingual helpline – for assistance by calling 000 800 050 1459 (toll free from India) or e-mailing help@seafarerhelp. org. Further contact details can be found at www.seafarerhelp.org.

Mr Bahri said: ‘It is our duty to keep exploring possibilities in ways we can try to assist our seafarers and their families undergoing tremendous hardships due to the COVID-19 situation in the country, which is unimaginable. We are pleased to be working with Narayana Health and the Medica Group of Hospitals and are very grateful to them for their wholehearted support of this initiative.’

ISWAN would like to thank its funders, especially The Seafarers’ Charity and Trafigura Foundation,

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Maritime Matrix Today | June 2021 | 09

AIS creates land of opportunity for marine traffic and commercial shipping

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IS creates land of opportunity for marine traffic and commercial shipping

In spite of errors and weaknesses the AIS in combination with low orbit satellites and affordable connectivity with low latency, will create a land of opportunity for the marine traffic and commercial shipping. The race has already started, so therefore we think everyone working in the maritime industry needs to have some basic AIS knowledge.

The short history Automatic identification system or AIS for short and the AIS technology is an old technology and operates within the VHF radio band. The marine AIS was introduced to prevent collisions among large vessels at sea where the vessels were outside the range of shore-based systems. From 2002 the IMO Convention for the Safety Of Life At Sea (SOLAS) Regulation V/19.2.4 made it mandatory for all vessels more than 300 GT trading in international water and for all passenger ships no matter if size, to carry AIS Class A equipment onboard.

From 2008 governmental organizations and large companies such as ORBCOMM, ExactEarth etc. deployed AIS transceivers on low orbit satellites, and these low orbit satellites changed the capability of the AIS technology.

The AIS system uses time-division multiple access (TDMA) radio access scheme which creates significant technical issues for the reliable reception of AIS messages from all types of transceivers. One fundamental challenge for AIS satellite operators is the ability to receive very large numbers of AIS messages simultaneously from many vessels within a limited area. However, this is something many commercial companies are looking into together with the marine industry.

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Today AIS is used for many different purposes • Collision avoidance • Fishing fleet monitoring and control • Aids to navigation • Search and rescue • Accident investigation • Fleet and cargo tracking • Statistics and economics In Maritime Optima we are using AIS as one input source for vessel data, statistics and economics, vessel and cargo tracking, calculations and several optimizing cases and predictions. We combine input from different data sources, and the main data sources are satellite data, public data and user generated data. We aim to make an efficient decision-making system for the maritime industry.

There are three different modes of operation within the AIS system • Autonomous and continuous: Each AIS unit adjusts its transmission frequency based upon its vessel’s speed, rate of turn and navigational mode.

• Assigned and controlled: The AIS reporting intervals is set by the unit/component authority • Polled: The AIS unit pull data to competent authority All three modes are in operation on today’s merchant fleet.

The AIS protocol sends data in blocks and there are 27 possible message types within the AIS system and within these message types there are 3 data types commercial shipping mostly is interested in: • Static – programmed into the equipment when it is installed. Data such as MMSI number, name of vessel, call signal etc.

• Voyage – will be changed manually by the crew.

Data such as navigation status (moored, under way using engine etc) • Dynamic. Position, true heading, time, Course over ground (COG), Speed over ground (SOG) etc.

In congested areas the time between observations may increase due to interference; two vessels that are below each other’s horizon may broadcast their signals in the same time slot making it impossible for the satellite to separate and decode signals from these two vessels.

The static and voyage data with a Class A AIS is sent every 6th minute and the frequency of the dynamic data is decided of the speed of the vessel.

In Maritime Optima the result may show up as long straight lines in a vessel’s tracks. Here is an unfortunate example of a vessel coming out of the extremely congested Malacca strait:

The AIS data is not accurate, the information might be misinterpreted, vessels might deactivate their AIS etc, so in order for shipping analysis and software products to provide relevant information they need to combine the AIS data input with other data sources in a structured machine-readable context.

AIS might also be turned off and there might be legitimate reasons to turn the AIS off; for maintenance, in waters where the vessels risk piracy attacks. There might also be other reasons for the vessels to turn off their AIS, mostly those reasons are related to trading in sanctioned countries and illegal activities.

Dynamic data constantly change as the vessel moves. Known errors in marine GPS are: • Propagation errors that arise due to signals from satellites slowing down as they pass through different layers of the atmosphere and might influence the vessel’s calculated position.

• Multi-path errors are caused by signals from the satellites not taking a direct path to the receiver and influence the distance being calculated.

• Ephemeris (Orbital) are due to slight variations in the satellite orbits and might influence the calculated positions.

• Receiver’s noise are electronic signals within the GPS receiver unit itself.

• Relativistic errors relate to satellites orbiting the earth travel so much faster than observers on earth.

Erroneous manual input Vessel destination and ETA, broadcast with a vessel’s static information, are entered manually by the crew. Although regulations recommend using 5 letter UNECE port codes to designate vessel destination – eg NOOSL for Oslo, Norway – this is not enforced or even widely adopted.

Making a software system guess where a vessel is really going based on its AIS destination text is challenging, and even the best system will sometimes guess wrong.

Here is an example where even a human would not be able to make the right guess. This vessel’s destination says “IN MAA” which is Madras, India.

Which is where the vessel has come from:

Main categories of AIS challenges 1. Offshore coverage and congestion 2. Erroneous manual input 3. Failure to update AIS information to reflect actual events 4. Multiple transceivers sending info for the same MMSI Offshore coverage and congestion Away from land based AIS receivers we have to rely on satellite receivers. Even with a large satellite fleet such as operated by ORBCOMM a ship may sail for 2-3 hours between observations.

Failure to update AIS information to reflect actual events Information that is manually maintained is Maritime Matrix Today | June 2021 | 11

sometimes not updated in a timely manner. Even on a single vessel different watch officers may do things differently; a ferry may broadcast all port arrivals during one shift but not during the next.

The typical errors of omission are: • Failure to update ETA when a vessel is delayed.

As the ETA grows stale, eg a week old, it is hard for an observer to tell whether the vessel is simply delayed or the reported destination is wrong.

• Failure to update destination when going to the next port. This is probably the explanation for the example above with the vessel from Madras.

• Failure to update navigational status when entering or leaving port. The most used status codes for merchant vessels are “Under way using engine”, “Moored” and “Anchored”. Giving correct navigational status has an important safety aspect as the code informs other vessels about what to expect. We are somewhat surprised how often vessels neglect to update this code during port visits.

Here is an example of a vessel that seems to pretty consistently neglect to update its navigational status. In Maritime Optima this shows as a long and convoluted track back to the last port where it actually reported to have moored:

If both transmitters are in the same geographical area this situation may cause navigational hazard.

In Maritime Optima duplicate active transmitters may look to the user as if a vessel is jumping back and forth between locations far apart:

In this example a vessel has sailed from Togo, around West Africa through the Mediterranean and is in the Red Sea when this picture was taken. While the vessel was steaming South West from Togo another transmitter sent positional messages claiming that this MMSI was in Singapore.

Maritime Optima have since implemented some algorithms to ignore the most extreme cases, but it is in general very hard to tell which messages to believe and which ones to disregard.

There are many new satellite programs working to improve the quality of the AIS technology The new Norwegian satellite NorSat-3, launched successfully on the 29th of April 2021, will improve monitoring of ship traffic in the Arctic, and the NorSat-3 program will provide the global maritime industry with more accurate AIS data.

NorSat-3 is more advanced than its predecessors, because in addition to the AIS receiver, it is equipped with an experimental navigation radar detector (NRD) and will contribute to a more comprehensive image of the traffic at sea. Thus, the Norwegian Coastal Administration will be able to verify the AIS information and detect ships that are not emitting AIS signals.

Multiple transceivers sending info for the same MMSI This is perhaps the most serious issue. MMSI numbers are globally unique radio identification numbers assigned by flag state authorities.

Transmitting AIS messages for an incorrect MMSI is a violation of the VHF radio license. Still this happens surprisingly often. When an incorrectly configured AIS transmitter sends messages for an MMSI that is also used – correctly – by another vessel the result may be quite confusing.

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Norwegian Space Norway, ORBCOMM, ExactEarth etc. are also testing out new and improved technologies called VDES: a two-way communication between satellites, ships and land.

This technology will, together with the expansion of the low orbit satellite infrastructure, contribute to the development of a robust small-band network enabling a more accurate monitoring of the global merchant fleet.

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Pumping new life into the Extra Masters’ Program T

here are about Indian 6000 Master Mariners and I’m sure Extra masters will help them serve Indian and world Maritime Sector well.

Background of the development of the Extra Masters program: Under the aegis of the Colombo Plan, the Indian government invested in Extra Masters in the 1960s. The initial seed group of some eminent teachers - Capt PS Barve, Capt TK Joseph, Capt SS Rewari, Capt H Subramanium, Capt TD Hazari and some others completed this program in UK and brought the program to India under their mentorship. I had the opportunity to complete my Extra Masters and my dissertation on “Oil Majors Vetting - a study of Non Conformance’s by Indian Merchant navy officers sailing on foreign flags, in 1996. Sixty other Indian Master Mariners have completed the program and their valuable dissertations adorn the library of LBSCAMSAR, IMU.

Advisor Capt. Saggi, an extra Master himself, tried to review the program, at Massa Maritime Academy, where I was the Founder Principal. However it did not find favor many Master Mariners in Decision making Body.

not under DGS approval. Under the flagship of my proprietor company, Synergistic Solutions, and the Self Generative Culture that we operate from, we found the model aptly fitted for achieving high quality learner centered teaching.

Revival of extra masters

Online conduct: We chose online conduct of the sessions since that gave our Master Mariners both ashore and Sailing on Board, and in all geographies access to high quality lectures by very accomplished teachers and Researchers who had firsthand experience in the field. We conduct classes on Weekends and Since 2021 March, Post all material and videos on Talent LMS so that participants have a 24x7 access.. This helps serve Master Mariners settled ashore who are not able to attend class on weekends, and our Sailing Masters on board or on Leave.

Thus we provide a dynamic environment to respect to adult learning and student centered learning with recorded reruns for those who required it.

Extra Masters found strong support from Capt. Jayakumar, when he took over as NA. Drawing parallels with the Institute of Marine Engineers, which was far ahead conducting Extra Chiefs for about 5 years, many master mariners urged the revival of the extra masters.

A group of experts under the leadership of Capt Jayakumar effected the revival in Jan 2019.

The syllabus was drawn out and it was mandatory for aspiring students to appear for a written exam and defend a thesis, the proposal which would be approved by Chief Examiner of Master and Mates.

Formation of IMU

Synergistic Solutions Model for Extra Masters

With the formation of IMU, this took a backseat and LBSCAMSAR did not find support from the IMU Directors and they stopped conducting it the extra master’s program in 2006. In 2006, the then Nautical

When the Extra Masters program was revived, it was planned that the examination would be controlled and managed by the DGS and the preparation for the same and conduct of classes was left upto the individual and

Extra Masters Syllabus: (as per DGS NT Exam Circular 1 of 2019 Extra Masters consists of 3 Parts with 3 papers each and part 4 being the dissertation.

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Part A

Our Faculty consists of selfless Teachers and Professionals and Includes

1. Leadership, Management and HR 2. Maritime Economics Finance: Practicing

and

3. Maritime Law Part B 1. Advanced Navigation and Cyber Security 2. Naval Architecture 3. Commercial Engineering Part C 1. Marine Environmental studies and Ocean Governance 2. Ship management 3. Port Management Dissertation after completion of Part A,B and C, theme which is proposed by candidate and approved by NA The Syllabus did not contain Research Methodology and Synergistic solutions conducts a module as part of Part D on the same and assists candidates in compiling a proposal and guiding them along with Professional subject matter guides to defend their dissertation in front of NA and a body of Extra Masters. The DGS circular does not make it mandatory for a Guide.

The online program for each Part is of 3 months duration (minimum 120 hours plus 9 hours Internal assessment) to match the MMD Exams schedule of June, October and February.

Synergistic Solutions have conducted a full round of all parts A, B and C and the second batch of Part A. We are commencing Part B in June 2020.

Our participants include DGS surveyors, Harbour Masers, Pilots, Maritime Principals & Teachers, Superintendents, 14 | Maritime Matrix Today | June 2021

Sailing Masters, even those engaged on board, Port Captains. We have an average of 12 to 16 participants every 3 Months. Classes are generally conducted between 9am and 5pm on Saturday and Sunday, on line and these sessions are recorded and repeated Monday to Thursday evening to support shore based Master Mariners.

Exam Papers are set by Nautical Adviser and his team at DGS and our expert faculty contribute to the question bank. We manage an amazing group of Experts as our faculty with regular feedback on their contribution. Till now we have a pass percentage of 64 percent in Part A and 60 Percent in Part B. and 64 percent in Part C .Candidates are welcome to attend the following batch of Part A, B or C if they cannot meet or are not ready to appear for the Exam date as scheduled by DGS. We are happy to share that Capt Saleel Ramachandran, Pilot, Kochi Port is the first to clear all Parts A, B and C in February 2021. He registered for our program in March 2019.

There are 3 more candidates on the verge of completing the Three Parts of Extra Masters.

The dissertation, as required by the NT Branch circular 1 of 2021 is being pursued by all of them and is in various states of theme acceptance.

We are happy to serve Saleel and all other Master Mariners and help them fulfill their higher dreams.

Congratulations Saleel!!!

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The Author Capt Ajay Achuthan, Synergistic Solutions

“I am working with Cochin Port Trust as Pilot for past 8 years. My sailing career was with The Shipping Corporation of India, from 1997 till 2013. To add on to my learnings and to acquire deeper knowledge in my field has always excited me. So when DG Shipping introduced Extra Masters in the new form, I was eager to join the same. The syllabus being vast and deep, the question that perturbed me was “How and Where”? The answer came in the form of “Synergistic Solution”. I take this opportunity to express my sincere gratitude to the faculty and team members of Synergistic Solution, who were my constant support in achieving this feat.

Also, I thank my Marine Department of CPT, from DC to the Pilots, who have always been a Pillar of support.” – Capt Saleel Ramachandran, Pilot, Kochi Port Maritime Matrix Today | June 2021 | 15

Seeking to comprehend the Methane Slip

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ne of the most widely discussed issues in the use of LNG as a marine fuel is emissions of the unburned gas known in the industry as methane slip. While LNG is an effective alternative to reduce carbon dioxide, nitrous oxide and sulfur emissions, it also releases methane into the atmosphere. A new academicled study is underway which the organizers say is the first time methane emissions were measured from an operating vessel and the results, when released later this year, will provide data-driven insights into the greenhouse gas (GHG) profile of LNG carriers to identify opportunities for environmental performance improvement.

“This project comes at a critical time, with policymakers seeking

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to understand both how to regulate industry and ensure that climate targets are met,” said Dr. Paul Balcombe, Lecturer in Chemical Engineering and Renewable Energy at Queen Mary University and the lead researcher for the study.

“Accomplishing this will depend on ensuring transparent, emissions-related data is available and lessons learned from studies such as this are implemented.”

Industry trade groups have said that reports of methane slip are being greatly exaggerated in the environmental debate and that the shipping industry along with motor manufacturers and others are making good progress in addressing the issue. They also argue with the measurements and criteria used in some

studies.

Environmentalists, however, recognize that while LNG can lower CO2 emissions by a quarter as well as reducing NOx, SOx, and particulate emissions, they highlight the more potent nature of methane as a greenhouse gas.

The European Commission said after a 2016 study that methane emissions from LNG-powered ships were higher than current marine fuel oils. They cited data saying that the emissions increased dramatically at lower loads. “In order to retain the climate benefits of LNG, it is important to address methane emissions, the EC said calling for more advancement in the designs. Last fall, an NGO, the International Council on Clean Transportation (ICCT), however, went further in a report saying

there is “no climate benefit from using LNG.” Many within the shipping industry took exception to the NGO’s report citing parts of its data and how the measurements were taken. Matteo Natali, General Manager of Business Intelligence at Wärtsilä, for example, said, “the methane emission levels used in the study do not reflect the latest gas engine technology. Moreover, methane’s impact is calculated based on a 20-year timeframe, whereas most scientific studies have adopted a 100-year view, as does all relevant legislation.”

The new study that seeks to provide more definitive data is being prepared by Queen Mary University London, with support from the Collaboratory to Advance Methane Science (CAMS) and Enagas. The data for the study was collected aboard the Cheniere-chartered newbuild GasLog Galveston during a round-trip voyage from Cheniere’s Corpus Christi liquefaction facility to a discharge port in Europe. Data

gathered during the voyage included measurements of engine exhaust as well as fugitive emissions.

“We are proud to be a part of the CAMS effort to measure and monitor methane emissions from the GasLog Galveston under real-world operating conditions,” said Paolo Enoizi, Chief Operating Officer of GasLog. “We view the efforts undertaken by the CAMS as critical to minimizing the environmental footprint of the global LNG shipping fleet and supporting the continued success and competitiveness of the LNG industry.”

The data were collected aboard the newly built Gaslog Galveston LNG carrier that was delivered to Gaslog by Samsung Heavy Industries’ Geoje shipyard at the beginning of 2021. Registered in Bermuda, the 88,136-dwt vessel has a capacity of 174,000m³. The newbuild features GTT’s Mark III Flex Plus containment system and WinGD’s low-pressure twostroke propulsion. It is one of six sister ships the company has

introduced since 2018, along with six larger gas carriers.

“Enagás is intensively working in the detection and quantification of methane within its assets to minimize emissions,” said Claudio Rodríguez, Gas Assets General Manager at Enagás.

“We believe improving the accuracy of the emissions data along the gas value chain is critical, and this first-of-its-kind study will shed light on methane emissions associated with the logistic supply chain – informing us of our greatest prospects for development.”

The Collaboratory to Advance Methane Science (CAMS) is a research collaboration on methane science, which includes Cheniere, Chevron, Equinor, ExxonMobil, Pioneer Natural Resources, Sempra LNG, and Shell among its members.

The results of the study are expected to be released in a peer-reviewed journal.

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IMO seeks holistic approach to develop MASS Code

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o ensure that maritime regulations keep pace with the technological advancements in autonomous shipping, the International Maritime Organization’s Maritime Safety Committee finalizes an analysis of ship safety treaties seeking to identify the issues required for regulating Maritime Autonomous Surface Ships (MASS).

The scoping exercise, which was initiated in 2017, sought to determine the actions needed by the IMO to ensure safe, secure, and environmentally sound MASS operations.

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The exercise involved assessing a substantial number of IMO treaties and identifying provisions that applied to autonomous ships. The goal was to identify which elements might prevent MASS operations as well as gaps in the regulations and areas that would need to be adapted to either enable or clarify the rules as they pertain to autonomous ships. Among the areas that were reviewed as the SOLAS Convention as well as specific codes as they pertain to operations including fire safety systems, cargoes and dangerous goods, collision regulations, ship, and port security, and other areas governed by the Maritime Safety Committee.

As part of the review, the MSC considered varying degrees of autonomy defining four categories. This includes crewed ships with automated processes and decision support; a remotely controlled ship with seafarers on board; a remotely controlled ship without seafarers on board; and fully autonomous ships.

For each, the exercise explored whether MASS could potentially be regulated by existing

agreements and regulations, if the existing rules needed to be modified or if new agreements were required.

According to the reports from the committee, the outcome highlighted several high-priority issues, cutting across several instruments that would need to be addressed at a policy level to determine future work. These involve the development of MASS terminology and definitions, including an internationally agreed definition of MASS and clarifying the meaning of the term “master,” “crew,” or “responsible person,” particularly concerning remotely controlled ships and fully autonomous ships. Other key issues include addressing the functional and operational requirements of the remotecontrol station/center and the possible designation of a remote operator as a seafarer.

Further common potential gaps and themes identified across several safety treaties related to provisions containing manual operations and alarms on the bridge, provisions related to actions by personnel such as

fire-fighting, cargoes stowage and securing and maintenance, watch-keeping, implications for search and rescue, and information required to be on board for safe operation.

The committee concluded that the best way forward to address MASS in the IMO regulatory framework would preferably be in a holistic manner through the development of a goalbased MASS instrument. Such an instrument could take the form of a “MASS Code,” with the goals, functional requirements, and corresponding regulations, suitable for all four degrees of autonomy, and addressing the various gaps and themes identified.

The Committee invited Member States to submit proposals on how to achieve the best way forward to a future session of the MSC. In addition, the IMO’s Legal and Facilitation Committees are also currently in the process of conducting regulatory scoping exercises on conventions under their purview.

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Maritime Matrix Today | June 2021 | 19

AMICIE provides valuable inputs for policy initiatives E

xperiencing a huge success with their previous webinar titled – Fuel & Environment – An Explosive Mix; Association of Maritime International Commercial Interests and Expertise (AMICIE) – a think tank of professionals in maritime trade, invited the shipping industry to deliberate out of the box topics – Reserve Indian Fleet: Embargoes & Wars; & Emergency response Fleet –

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Pollution & Natural Disaster on 05th June.

In his welcome address, Dr (Capt) K Vivekanand, Educationist, introduced AMICIE to more than 150 stalwarts present. He spoke on Mobilization of reserved Indian fleet for embargoes and wars in foreseeable future.

On the purpose of such webinars, Capt S Pullat, President, AMICIE said, “We are trying to influence

government policies. However, remember government policies work on socio-economic political vote bank issues. As a group, we may be politically and professionally correct but we need to be heard with good intent. The outcome of this webinar will be submitted to the government.”

Speaking about Reserve Indian Fleet: Merchant navy as a second line of defense, Commodore RS

Vasan R Iyengar, (Retd), Head strategy and securities studies at the center for Asia Studies, Chennai, raised issues of reserve fleet such as cost, availability, resources and manpower to maintain the reserve fleet, obsolescence, islands on both flanks for creating support and infrastructural facilities etc. so that we will be heard by the government.

Mr S Hajara, Former CMD, SCI and Former President, INSA confined his talks to the relevance of not exactly the reserved fleet, but relevance of merchant fleet for any nation.

Controlled TonnageFocal point of Maritime Ecosystem

by Mr Jagmeet Makkar, Chair, ICS, HK and Director SkillPlus focused on to build and expand the entire maritime ecosystem.

Case studies on tonnage concerns and various disasters India has faced in tonnage were explained in brief by Mr K Shankar, Former President, India Cements Shipping Division and GC Member, IMEI.

Rear Admiral Kapil Gupta, NM, IN (Rtd) gave Navy’s view on accidents and their emergency response. “Every response has a solution, and the solution is based on the incident, and the environment,” he stated.

Overview of Marine disaster Management was delivered

by Donny Michael, Inspector General CG, Deputy DG, CG Selection Board, New Delhi.

Risked involved in International Maritime Dangerous Goods (IMDG) was highlighted by Capt Suresh Amirapu, and salvor on IMDG incident on Neptune Alexandrite by Capt Imam Farhat, created awareness about the incident on MV Express Pearl and MT Prestige. Mr Ishwar Achanta, Joint Managing Director of Portman India Private Limited spoke on hurdles of emergency response.

Capt KN Ramesh and Capt Neel J Nair summarized each session respectively.

The second session had a panel discussion headed by Dr Malini V Shankar, Chairperson, NSB, VC, IMU. Capt Kamal Chadha, Managing Director, Marex Media Pvt Ltd conducted the Q&A’s.

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Appetite to Hedge

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he range of possible blending components for 0.5% sulfur fuel oil and the impact this has on the fuel parameters is undermining the market’s appetite to hedge against VLSFO price volatility some 18 months after the IMO rules came into place to ensure ships used compliant marine fuel.

The unpredictability around very low sulfur fuel oil is choking the development of a paper market for the bunker fuel, industry sources said, even when traders, suppliers and shippers are becoming more confident with using 0.5%S fuel oil in ships’ engines. So while the physical bunker market has largely weaned itself off the former dominant fuel, 3.5%S fuel oil, and onto the new fuel, the forward market has yet to catch up, the sources said.

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A financially settled derivatives contract, which can be used as a hedge against adverse swings in price, is one in which a buyer and seller agree to a strike price in relation to a defined underlying benchmark for a defined period of time.

Ever since the International Maritime Organizationmandated 0.5% sulfur cap on emissions from ships on the high seas came into force on Jan. 1, 2020, the bunker industry has had to adapt to new ways of handling the compliant fuel.

The industry has done this successfully, benefitting from careful preparation, but hedging against future volatility in the 0.5%S fuel oil market remains relatively undeveloped. “It’s still an immature market on the financial side, at least for us,” Bjarne Schieldrop, chief

analyst for Commodities at SEB said during S&P Global Platts European Bunker Fuel Virtual conference, broadcast May 20. “[It’s] still not all that easy to trade with the product in our books against different, other benchmarks and we’re still lacking in a proper market of 0.5%S versus Brent crude in crack-terms,” he said.

Rotterdam 0.5%S is traded at a differential to high sulfur fuel oil, Singapore 0.5%S, low sulfur gasoil and even 1% sulfur fuel oil. However, there appears to be insufficient appetite for a swap that would use Brent crude as a hedging mechanism for 0.5%S buyers.

An unpredictable make-up The liquidity of the 0.5%S fuel oil paper market may be limited but it is picking up. “We’ve seen

the 0.5%S contract maturing and clients becoming increasingly confident and comfortable using the 0.5%S contract. That was typically a development in the second half of 2020,” Schieldrop said.

Through 2020, the majority of contracts were based on gasoil and diesel, Jan Christensen, senior director for global fuel purchasing at Hapag-Lloyd, said. However, he agreed with Schieldrop that things are changing. “We see more and more offers now coming from physical suppliers, where the contracts are based on 0.5% instead,” Christensen said.

The basis risk involved in hedging one product, here 0.5%S FO, against another different one, such as low sulfur gasoil, which is subject to different market dynamics, alarms some players but there is no simple alternative.

If 0.5%S fuel oil were a more consistent product it would be a simpler matter to hedge paper against physical, thereby

avoiding the need to consider other products, such as LSGO. However, the varying nature of what goes into 0.5%S fuel oil is a deterrent to this.

Take-up of 0.5%S fuel oil forward contracts remains restricted, especially further down the curve. “I think its trading is mainly in the first six months of the entire curve,” Rustin Edwards, head of fuel oil procurement at Euronav said.

As far at as Cal 2023, 0.5%S fuel oil is being traded against other products such as 3.5%S fuel oil, but activity for time spreads and cracks on the Inter-Continental Exchange out that far is limited.

“Until you get that kind of volumetric increase down the curve it’s going to be hard to create that forward hedging program that a lot of shipping companies have used in the past, when they had high sulfur [fuel oil] as their main fuel base,” Edwards said.

are poor and jet fuel can find its way into 0.5%S fuel oil when its cracks are poor, sources said.

This combination of both macro and seasonal economics means unpredictability in the make-up of 0.5%S fuel oil.

This in turn means more than a higher risk of instability in fuel and the need for careful handling; it also means there is a range of parameters, such as viscosity. 3.5%S fuel oil was assumed to have a viscosity of 380 centistokes and for instances when it was less there was a market for 180 CST. Now the range can run to as low as 1 CST, sources said.

The varying characteristics of the physical fuel mean exact matches between cargoes of what is the ostensibly the same material can be hard to find and this makes developing a forward market harder.

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For example, low sulfur vacuum gasoil can find a home in the marine fuel when gasoline cracks

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Time-charter rates at all time high

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hile the global container freight markets run red hot, dry tonnage pools are prompting ocean liners to pay increasingly high prices for any available charters.

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After sinking to multi-year lows in June 2020, a result of bleak carrier outlook and premature returning of chartered vessels in the face of demand destruction brought on by the coronavirus pandemic, containership charter rates have broken through to fresh all-time highs, Harper Petersen & Co data showed.

Time-charter rates for a ship with a capacity of 8,500 twentyfoot equivalent units registered at $65,000/d June 4, a jump of more than 330% from the yearago assessment of $15,000/day.

A similar story has unfolded on the freight rates side. Biweekly general rate increases resulted in global rates trending upward before strong fundamentals cascaded into the tonnage market. The Platts Container Freight Index, a weighted average of Platts’ global assessments, was assessed June 5, 2020, at $1,141/FEU, and has since seen near weekly increases.

On June 4, 2021, the index was assessed at $5,559/FEU, an increase just shy of 387%.

And sources expect further increases as carriers desperate for additional capacity attempt to outbid one another on both price and charter length.

“It is difficult to see anything changing in the weeks ahead, as the pool of charter free tonnage reduces further and anything that does come to market results in a significant jump in pricing,” London shipbroker Braemar ACM said May 25.

The lowest assessment for the 8,500 TEU band of vessels was $12,500/d on June 12, 2020, as a ballooning charter market put pressure on rates. But as global demand for containerized goods

began to surge in the second half of the year, chartering activity quickly picked up with carriers seeking to meet demand.

Since the June 12, 2020 low, charter rates for 8,500 TEU ships have seen average growth of about 3.4% a week but reached as high as 14.3% week-on-week growth during late June.

Tonnage providers call strong market through 2021 “The low number of available ships coupled with carriers’ desperation to secure tonnage, means the latter has proven willing to accept tonnage providers’ ever more onerous demands,” said shipping group BIMCO June 2.

And many charter agreements have been extended far past the historical norm of six- to 12-month agreements, with many most now being fixed on a multi-year basis. Lengthening durations in charter contracts could indicate a shift in favor of ocean liners, as high freight rates are likely to be maintained to offset chartering costs.

“The strong container market momentum, which commenced in the second half of 2020, has shown no sign of slowing down, but has instead constantly strengthened further in 2021,” said Constantin Baack, CEO of MPC Containerships, a Norway based tonnage provider. “Charter rates are at historically high levels [while] charter periods are getting longer and longer . . . so far, in 2021 we have concluded 26 multi-year charters.”

Large order book, but few 20212022 deliveries

the order book to highs not seen since 2014.

“During [first-quarter] 2021, we estimate that 180 ships with a total capacity of 1.9 million TEU have been ordered. The biggest quarterly ordering tally of all time in terms of capacity contracted,” said Braemar ACM in the company’s Q1 briefing.

However, 2021 to 2022 deliveries are expected to provide only marginal growth to global fleet capacity, leaving shippers with poor sentiment regarding softening freight rates.

“With the majority of the newly ordered tonnage set for delivery in 2023, fleet growth should slow next year before coming back strongly in 2023 when we already expect delivery of 1.5 [million] TEU,” said BIMCO. As new-build orders continue, delivery dates are being pushed further into the future as Asian shipbuilders reach capacity.

Ships ordered Q2 2021 have been heard coming online as late as 2025, sources say.

According to Braemar ACM, 36 Ultra Large Container Ships are slated for 2021 delivery, representing a capacity of 653,600 TEU. In 2022, 39 ULCS are set to come online, with a combined capacity of 675,354 TEU. This jumps to 75 ULCS deliveries expected in 2023, showing over 1.33 million TEU carrying capacity.

In 2023, the global containership fleet is expected to grow by 6-7%, an eight-year high.

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A flurry of new build orders in the first half of 2021 has pushed Maritime Matrix Today | June 2021 | 25

Blueprint on reducing carbon emissions to be adopted

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he head of the International Maritime Organization expects a key panel to adopt a blueprint on reducing carbon emissions at a meeting next week as the global marine regulator faces rising pressure from governments and from within its own ranks over environmental goals.

The plan measurements

of

includes energy

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efficiency and of what the IMO, an arm of the United Nations, calls the carbon-intensity of oceangoing vessels. The provisions don’t include specific targets for reducing carbon emissions, effectively postponing until 2023 any consideration of more specific plans to slash emissions in half by 2050 compared with 2008 levels.

IMO Secretary-General Kitack Lim

The IMO plan does, however, include a requirement to measure how much pollution a ship emits and rate its performance. The idea would be to push shipowners to improve their fleets’ carbon-intensity by at least 40% by 2030. Carbonintensity is a measure of the C02 emissions of a ship linked to the volume of cargo moved over a voyage.

“We will adopt a series of verified steps that will take us to the 2030 target,” IMO SecretaryGeneral Kitack Lim said in a telephone interview. “I’m excited to see this. Despite arguments, especially from developing countries, all member states have agreed to meet the goal.”

The IMO’s Marine Environment Protection Committee will meet from June 10 to 17 to set the next step in a yearslong effort on cutting pollution in the shipping sector, which contributes around 2.5% of all global greenhousegas emissions, according to the IMO. The meeting comes as operators of oceangoing vessels face growing pressure to enact tougher environmental measures. The European Union is pressing for ambitious emissions-reduction targets, and policy makers there are considering adding shipping to the bloc’s carbon-trading market.

Denmark’s A.P. Moller Maersk A/S, the world’s biggest container ship operator by capacity, is proposing a carbon levy of at least $150 per ton of CO2 emitted as a prod to move ship operators toward carbonneutral fuels.

Several IMO member nations, including Brazil, Argentina, Chile and a host of African nations, want lighter targets. They argue the research on cleaner-burning fuels remains inconclusive, and that any rapid shift in industry

operations would be costly and harm their economies by making food and commodity exports more expensive.

Vessels have burned heavy oil, the world’s dirtiest propulsion fuel, since early in the 20th century, and operators have sailed around unclear rules on who enforces climate protection in international waters, which fall beyond the purview of national governments.

The U.S. and the European Union have been pushing for more ambitious goals than those laid out in the plan. IMO officials say the strategy will be reviewed after the changes go into effect in January 2023 using data that is already being collected.

Representatives from several IMO member states say there are sharp differences on the plan and its targets.

“The entire IMO plan is complicated, and it’s doubtful whether the targets can be achieved,” said a South American IMO delegate, who as all IMO delegates, is not authorized to speak on the record. “We all want clean air, but the Southern Hemisphere lives on its exports and it all adds up to higher costs.

That can’t be right.”

But an IMO representative from a Northern European country said carbon-intensity is a convoluted measure because as more ships join the global fleet, CO2 emissions will also increase.

This country prefers a 50% reduction in carbon-intensity, he said.

“We will push for higher targets and more clarity in 2023,” the representative said, acknowledging that “reconciling a more ambitious target with bigger fleets will be difficult.”

Shipping services provider Clarkson Research Services Ltd. estimates it might cost the

industry more than $3 trillion for ships to switch to new forms of power.

The concerns over costs are legitimate, said Mr. Lim, the IMO secretary-general. But there is wide consensus from ship operators, commodity traders and energy companies on the need to move forward, he added.

“If you compare a few years ago with today, the climate-change debate is totally different,” he said. “Now nobody says ‘no’ and everybody is supporting the effort.”

The proposed IMO steps include a so-called energy-efficiency ship index that will measure a vessel’s fuel efficiency compared with a baseline.

Another step in the plan would be to score ships on their carbonintensity and their progress in improving, with unspecified penalties for those ships that don’t show any progress.

Beginning in 2024, the ratings would be reviewed annually and look at 30,000 vessels of at least 5,000 metric gross tons that together account for around 85% of the CO2 emissions of international shipping.

The new regulation would be enforced by flag states and reviewed by ship-classification societies.

The introduction of alternatives to fossil fuels is expected to cut fleets’ carbon emissions, but at next week’s meeting IMO members will also look into other ways to cut C02 levels over the next decade. Among those ideas are ship-speed optimization, advanced propellers and special paints for the hull that allow a vessel to slide through the water with less friction.

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Global minimum tax rate to be introduced

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roposals for global tax reform have the potential to undermine the tax policies applied to shipping. The OECD, with increasing support from the G7, plans radical reform of taxation of large multi-national companies. The introduction of a “global minimum tax rate” seeks to prevent tax competition between states and the shifting of profits to low-tax jurisdictions.

Its application to shipping would undercut the policies behind tonnage tax systems and shipping has sought, but has not yet been granted, an industry exemption from the rules.

During the 1920s, the UK and US promoted the idea of shipping companies being taxed only in their jurisdiction of residence.

Ships, then and now, can transport goods and people around the world without triggering corporate tax charges in their ports of call (there may, of course, be freight taxes and port charges) with the shipping company’s home state retaining the right to tax profits.

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Shipping companies then discovered flags of convenience and offshore jurisdictions which were prepared to forgo their right as the home state to impose corporate taxation.

daily profit based on the tonnage of ships that are operated in that business. On the whole, tonnage tax rules work by subjecting this low daily profit figure to a country’s standard tax rate.

More recently, EU tonnage tax regimes and similar shipping tax incentive regimes in Singapore and Hong Kong have used tax to compete with the various offshore centres. In exchange for carrying out a sufficient level of economic and onshore maritime management activity in their jurisdiction, countries with high corporate tax rates are prepared to effectively give up their home state taxing right.

No tax relief is given for the large sums spent on ships, fuel, offices and people, and no tax deductions are available for the interest costs incurred in financing operations.

While not true of every shipping company, for many in the industry there is no corporate tax in the places where their services are provided and limited taxation in their home states.

Tonnage tax solution Tonnage tax systems replace the actual income and expenses of a shipping business with a deemed

Tonnage tax creates a predictable, consistent and usually low tax expense. If you know the tonnage of a ship, you can work out the corporate tax bill it will generate, fairly accurately, over a ten-year period.

An “effective tax rate” compares a company’s profits for a period with the tax bill it actually paid, so when a tonnage tax company is very profitable in any given year its effective tax rate is likely to be very low.

But how many shipping companies are profitable each and every year over a ten-year cycle?

In a year where profits are low, or losses are high, the corporate tax bill remains the same as in the best of years. So, an effective tax rate assessed over a longer period, and especially over the course of one or two turns of the shipping cycle, may end up being much higher.

Over a longer period, once you combine the impact of losses, depreciation for the costs of buying ships and tax deductions for the costs of financing and operating ships, the difference in the effective tax rates of a company operating within the mainstream corporate tax rules and a tonnage tax company in the same jurisdiction is likely small.

Global approach With backing from the new US administration and the G7 nations, ambitious proposals from the OECD to restructure the system of global taxation of multinational companies are gaining real momentum.

The proposals may even gain political approval this month, in June 2021.

The complexity of the task should not be underestimated and the number of countries who will need to agree on the measures means many challenges lie ahead. On the other hand, complex tax rules are not new; there is a global need for countries to generate larger tax receipts and the idea of having very large multinationals pay more tax is politically attractive to most people.

Shipping seems likely to be left out of one limb of the new proposals, which is aimed primarily at online businesses and seeks to have companies pay a proportion of their tax bills in the jurisdictions where their customers are based.

The other limb of the proposals is the imposition of a new global minimum effective tax rate that would apply to groups with annual gross revenues in excess

of $750m. A tax rate has not been agreed upon but a minimum figure of 15% has been proposed.

The idea is to render pointless as a tax planning technique attempts to shift group profits into low tax jurisdictions. Accordingly, countries will be prevented from using their own tax systems to attract investment. The tax advantage of basing your sales office in Ireland with its 12.5% corporate tax rate is partially lost if the parent company must top up their own corporate tax bill such that those profits arising in Ireland are eventually taxed at an effective tax rate of 15%.

Shipping has asked for, but has not yet been granted, an industry exemption from the global minimum effective tax rate.

It is understood that Germany, among others, is reluctant to risk damaging the integrity of the new tax system by granting individual industry exemptions.

There may be a queue of other industries asking for similar treatment if one is singled out for special treatment, and feelings of unfairness for those left in the new system or for jurisdictions which do not have large maritime clusters.

Shipping application If applied to shipping, the plans would cut through close to a hundred years of tax policy.

Profits would no longer be subject to tax only in the place of effective management of a shipping company. No longer could countries use their tax systems to support their ambitions to be “maritime nations”, develop their own maritime clusters, bolster their ship registries, build up maritime expertise across a range of services and train a steady stream of new recruits for their maritime industry.

That the rules will be horrendously complicated to apply (and that this complexity is almost bound to generate unexpected

opportunities for those seeking a competitive tax advantage) will not work to gain shipping an exemption, because the rules will be complicated for everyone who has to apply them.

But shipping has very strong economic, social and environmental arguments as to why it is not an industry that needs these tax avoidance rules applied to it – the OECD, EU and G7 all seem to agree that tonnage tax systems are helpful and are to be encouraged, rather than being unacceptable, harmful tax practices. Tax havens can be dealt with by economic substance rules.

Given the world needs shipping, and needs it to invest heavily in improving its environmental impact, now seems an unfortunate time to throw complex tax rules into the mix that will generate fluctuating and unpredictable tax bills for shipping groups; Given the world needs shipping, and needs it to invest heavily in improving its environmental impact, now seems an unfortunate time to throw complex tax rules into the mix that will generate fluctuating and unpredictable tax bills for shipping groups; especially when, over time, these new rules seem unlikely to actually generate any more tax payments from the industry.

The shipping industry may well find itself swept along with these plans for the perceived sake of the greater good of the integrity, simplicity and sense of fairness of this massive global tax reform.

However, for the shipping industry, the measures seem unnecessary (in that they will not generate greater tax revenues), unhelpful (in that they will detract from essential investment) and detrimental to those coastal nations that have positioned themselves as maritime centres.

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Re-evaluating maintenance management

V

essel coatings and maintenance schedules may soon have to be reevaluated as a result of the extended layups over the last year or the sudden long waits at crowded ports now that global commerce has revived.

Corrosion and biofouling wait for no man and can have dire consequences if left untended for too long, particularly given today’s stringent exhaust regulations and the intense competitive environment.

While vessel profiles may change unexpectedly, the paint community can help save on costs in inventive ways. The

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good news is that the coatings business is taking a big-picture approach including more data, improved preparation, new monitoring technologies and maintenance machinery and, of course, better coatings.

Most importantly, fuel and exhaust performance stay at optimum levels whether a vessel is moving, sitting or facing schedule disruptions. Tests have also shown that some new topside coatings and waterline paints resist abrasion and keep decks cool. Anti-corrosion prep and maintenance are also in the news, which we’ll cover after looking under the ship.

Hull bottom protection has seen challenges between antifouling and low-resistance coatings, robotic cleaning and regulations concerning invasive species, and monitoring fuel costs and pollution. While these targeted efforts have had compromises and conflicts, Jotun Paint has just introduced a complete, coordinated approach to all these issues.

Jotun’s Hull Skating Solutions package begins by applying SeaQuantumSkate, a slick antifouling coating that answers the polishing problem by matching the bottom paint to its ROV hull-cleaner’s brushes.

No biocides are released into the water during cleaning since the brushes are matched to the paint. No excessive biocide is released when the ship is moving because the paint is hard enough. The hull is maintained so well that invasive species are not carried around from port to port.

As a result, fuel use and exhaust pollution are always minimized, never worsened or compromised in any up-and-down cycles of biofouling and cleaning.

Software monitors performance and lowers costs in real time.

Initial cost is higher, but it pays for itself quickly.

Jotun, along with partners including Kongsberg, developed the HullSkater. It’s a bespoke inspection and cleaning ROV for this system only. You’ll always carry it onboard, and Jotun operates it for you. This avoids scheduling problems or the cost of getting to a port with a cleaning ROV. There are obvious savings, and overall you eliminate surprise haul-outs and irregular expenses that upset both charterers and stakeholders. The system also includes recorded data on fuel efficiency on all voyages.

To answer regulators’ concerns about fuel savings, a performance standard was developed called ISO 19030.

Published in 2016, it provides practical, transparent methods for measuring changes in shipspecific hull and propeller performance. It’s a response to industry calls for a fair method of assessing claims of efficiency gains.

Commenting on the challenges, Stein Kjølberg, Global Sales Director of Jotun Hull Performance Solutions, says the focus on energy efficiency and sustainable shipping is critical: “If you want to stay ahead of the game, customers need to

recognize you as a provider of proven and reliable services that can be measured. Irrespective of the cyclical nature of shipping, it’s the only way forward for responsible suppliers, owners and the environment.”

He adds that ISO 19030 “opens up a huge potential for owners/ operators, management companies and charterers to establish performance levels for their vessels in a very inexpensive way.”

HullWiper, Hempel, Nippon Paint and others also offer ROV inspection and cleaning systems. With new standards from BIMCO and ICS for capturing organisms from inwater cleaning of moderate and heavily fouled bottoms, HullWiper makes use of water jets to clean off growth and then filters the effluent from its ROV. This approach limits invasive species.

On the other hand, Jotun’s “always clean” goal is to arrive in a harbor with a clean bottom and to wipe off only local biofouling after a prolonged wait in a port.

All these programs also help control fouling problems when a newbuild is launched but sits in the yard during months of final fitting out.

On the coatings side, Nippon Paint has recently introduced an improved antifouling paint that works whether a vessel is moving or idle. This latest FASTAR coating can have hydro-gel added for increased fuel savings. FASTAR also has improvements in film thickness and drying time. It’s the fourth generation of its Aquaterras formula.

Rust prevention and removal will get more attention now that NACE (National Association of Corrosion Engineers) and SSPC (Society for Protective Coatings) have combined to form the newly minted AMPP (Association

for Materials Protection and Performance).

“We all know corrosion is expensive and negatively affects asset availability,” says Buddy Reams, Chief Technical/ Maritime Officer at AMPP. “One of the fundamental issues we face on asset management and integrity, particularly with ships, is that corrosion-control efforts are largely after the fact or, as some describe it, like ‘chasing rust’. Designing and building with corrosion in mind is hard because it’s perceived as being higher cost, but it almost never is if you factor in the total lifecycle cost related to corrosion.”

Reams says effective corrosion management has to include actions and decisions during the asset’s operational life: “It’s never too late to start using corrosion management because the cost savings can be significant.

Leveraging all the benefits of existing materials and methods in a strategic and coordinated fashion can help keep your crews and maintenance teams ahead of the game and ships operating. Participating in a technical exchange with groups like AMPP can help match your company’s specific needs to the many different solutions that exist in the market.”

The need to remove old paint and rust has spawned methods ranging from chipping to sand blasting and some interesting developments in between.

Since the 1970s Rustibus Worldwide has been an innovator in the business of mechanically removing old coatings and rust from decks and cargo holds, including vertical surfaces. Its most popular unit looks like a lawn mower with flailing rotating chains and an optional vacuum to collect dust. There are various sizes and larger devices for vertical surfaces like cargo hold walls on bulkers.

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“We are also working on new innovations in cargo hold cleaning methods,” says CEO Kristian Dalseide.

Demonstrating its commitment to green solutions, Rustibus in 2018 launched the nonprofit “Rustibus Clean Ocean Initiative” (RCOI), a global program to promote and collaborate with clients to reduce plastic and waste in the oceans. It pledged to “promote, endorse, and execute R&D on products that can be provided to shipowners that share our commitment to making a difference in our oceans worldwide. We will also dedicate a portion of the Rustibus Group profits and resources towards this initiative as well as seek sponsors in shipowning organizations, maritime authorities, maritime forums and foundations who share our vision of a cleaner ocean for all.”

Another big name in corrosion prevention is Singapore-based DEN-JET, which has developed a wide range of water blasters and waterjets to remove coatings and corrosion above the waterline, all the while holding dust to a minimum to prevent pollution.

With multiple offices around the world, DEN-JET products are used in marine, industrial and offshore applications.

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What’s black and feels like white paint? Answer: Black paint with special pigments that reflect solar infrared rays. Although it’s readily available for vessel decks in light to dark grey, other colors are possible too.

find places to serve on topsides that rub against lock chambers, canal seawalls, ice floes and piers. With a bit of non-skid, they go onto walkways and with more non-skid resist vehicle tires on ferry and ro-ro decks.

Marine coatings like Coolshield and Nippon Paint’s Ever Cool deck coating have been applied to vessel decks around the world. The Low Solar Absorbing pigments can be neutral in low-temperature weather but heat-reflective in hot, sunny conditions.

AkzoNobel’s International Intershield 163 Inerta 160 is a proven ice-abrasion resistant coating with high solids and low VOC content. A special mix of ingredients makes for a durable surface in cold weather to resist ice but also withstands hot weather. Intershield 163 Inerta 160 has been providing vessels that traverse icy waters with a durable, smooth surface and low frictional resistance for 40 years.

U.S. military research has led to “cool” non-skid coatings from NCP Coatings. Formulated by the Navy Research Laboratory, the SiloXoGrip Polysiloxane Non-Skid coating – beyond the temperature advantage – mixes, pours and spreads more easily than previous deck coverings based on epoxy or silicone alkyd.

In addition, NCP’s non-skid coating technologies, while performing like a conventional two-component urethane system, use no unhealthy catalysts. You get the durability advantage over epoxy deck coatings and avoid the safety concerns from urethanes.

Paints that resist abrasion, when applied properly, continue to

Fumeless coatings for tight, contained spaces are being developed in Korea, and the trend is moving around the world to other coatings companies.

Look for software developments from paint companies that will help vessel managers with maintenance and performance efficiencies, thereby avoiding expensive surprises.

MMT

Challenges faced by Indian seafarers & trade due to second wave Covid and way forward 1. Challenge: Over 75 % of Indian seafarers work on foreign flag vessels. Most of these vessels rarely call Indian ports. Indian seafarers have to join foreign flag vessels mostly on foreign shores. Due to recent highly infectious pandemic outbreak in India, most of the countries are prohibiting crew change with travel history to India in last 14 days.

Capt MM Saggi Former Nautical Advisor to Govt of India

2. Way forward: 2.1. Indian seafarers can be kept in bubble, in a dedicated hotel or offshore, on a cruise liner, under quarantine, for 14 days in a nearby country, under special arrangement, which is well connected but outside the red list, such as Dubai, Qatar, Abu Dhabi etc.

2.2. Ships on east west route via Suez or Persian Gulf Far east route can be diverted to Kochi, where a similar bubble & 14 days quarantine centre can be created for crew change.

Similar bubbles can be created in Indian ports,

where crew planned.

change

is

2.3.

A sanitised suitable vessel can also be used for transferring sanitised crew in ports, sheltered / safe waters, anchorages or at high seas, with due permission of authorities.

2.4. Indian seafarers on coast or on ships calling our ports can be replaced with due caution.

3. Challenge: There are numerous compelling reasons for priority vaccination for seafarers.

3.1. Ship managers / owners are not keen to employ Indian seafarers if they are not vaccinated.

3.2.

In enclosed ship environment, infection spreads quickly from one seafarer to whole crew.

3.3. At sea, seafarers have no access to doctor, CT scan, oxygen & intravenous medications.

3.4.

Ship with seafarers will

infected certainly

Maritime Matrix Today | June 2021 | 33

be quarantined in ports of call, seriously delaying cargo operations.

Shippers / consignees would choose only ships with safe & sanitised crew discouraging ship owners / managers to employ non-vaccinated crew.

3.5. Many countries do not even allow transit rights to seafarers if they are not vaccinated.

3.6. Ships are operated with minimum manning. One sick crew impacts ship’s safe operation.

3.7. Not vaccinating Indian seafarers has a serious bearing on their employment prospects as competing manpower supplying nations are giving priority vaccination to their seafarers.

3.8. If due to pandemic fear, seafarers stop sailing, 90 34 | Maritime Matrix Today | June 2021

percent of the world trade could come to a grinding halt.

4. Way forward: 4.1. Total number of active Indian seafarers in the country is estimated at around 2.5 lakhs. On average about 20,000 per months or 700 per day are likely join ships.

If all seafarers need to be vaccinated on priority with two dozes, only about 1400 dozes are required per day to cover entire population of Indian seafarers in an year. This is not a very large number. Seafarers can pay for vaccine at market price & recover same from employer.

4.2. Seafarers have already been notified as key workers by Ministry of Home affairs order dated 21st April 2020. Director General of Shipping vide

order dated 23rd April 2021 has notified Mumbai Port Trust Hospital as a centre for priority vaccination of seafarers.

It may be advisable if through a directive of Ministry of Home affairs, all vaccination centres across the country are directed to give walk-in priority to seafarers on showing their Continuous Discharge Certificate (CDC) as proof of their identity.

4.3.

Employer can also supplement this effort by vaccinating sailing seafarers in ports where such facilitation is available.

4.4. As a responsible member state, India can persuade International Maritime Organisation (IMO) & International labour Organisation (ILO)

to exhort member states to offer priority vaccination to all seafarer, in all ports, not only for welfare of seafarers but to also keep world trade flowing smoothly. India can take lead by walking its talk.

5. Challenge: Ships calling Indian ports are being quarantined and delayed in different jurisdictions across the world. It is apprehended by the rest of the world that crew of the ships’ calling Indian ports may have got infected, while dealing with various stake holders in Indian ports.

Consequently, many foreign ships may stop calling Indian ports. At present more than 90 percent of India’s EXIM trade is carried by foreign ships.

A boycott of Indian ports by foreign ship may cripple our trade, economy and energy supply lines.

6. Way forward: 6.1.

All authorities and stake holders in Indian ports such as customs, immigration, port health, agents, stevedores, ship chandlers, repair and service personnel, Port State Control, Flag State Inspection, Classification Societies etc. need to be advised not to breach ship’s crew safety bubble and instead deal online on all such issues, with ships calling Indian ports. Also curtail crew shore leave on all vessels, till pandemic subsides.

6.2.

These measures will comfort foreign ships & foreign ports, obviating adverse impact on entry of ships, which may have

called Indian ports. This is also safe for shore personnel.

detect, treat, isolate, report and repatriate impacted seafarers.

6.3.

If boarding of some shore personnel such as pilots etc. is unavoidable, all such persons need to be vaccinated and well protected for safety of ships’ crew and their own safety.

10.Way forward: Guidance can be developed nationally to supplement the available quality information, to deal with all above concerns including placing the requisite equipment & medications on ships and training required for seafarers. A modular standard certificate training program can be developed as value added course, covering all such aspects, by employers of Indian seafarer, in coordination with Director General of Shipping.

This course may also be completed online. This will give confidence to seafarers and comfort their employers and other stake holders.

Subsequently it can be shared with IMO as a recommended / mandatory training program for seafarers of all nationalities on all ships.

6.4.

This can be standard protocol for all ships in all ports till there are lurking fear of covid.

6.5. Chinese ports banning ships calling Indian ports in last 3 month needs to be challenged.

7. Challenge: A number of Indian seafaring jobs may be lost as most employers may prefer to replace sailing Indian crew by crew of other nationality, on completion of their tenure, as vaccinated and sanitised Indian crew to replace them are not readily available.

8. Way forward: Indian seafarers presently sailing on ships, not calling Indian ports, can be requested to voluntarily extend their service contract for a few more weeks till we put our house in order and the world is in a position to accept sanitised Indian seafarers on foreign shore to replace sailing crew. This will help save existing Indian jobs on foreign flag vessels.

MMT

9. Challenge: Seafarers do not have dedicated equipment such as oxygen, ventilators and medications on ship to treat covid patients. Indian seafarers are trained to render medical first aid but not formally trained to deal with covid to prevent, protect, Maritime Matrix Today | June 2021 | 35

Container prices surge in Europe as carriers favour loading empties

F

or European exporters looking to source shipping containers, existing shortages could deteriorate significantly in the coming weeks, according to the latest data from Container xChange, the world’s leading online platform for the leasing and trading of shipping containers.

36 | Maritime Matrix Today | June 2021

Most pricing and availability indicators now suggest carriers are continuing to favour shipping empties back to Asia as fast as possible to maximise yields on front-haul services rather than wait for less lucrative backhaul loads.

The upshot for shippers is rapidly rising prices in Europe

for containers even though CAx availability readings point to higher availability of boxes in European hubs – Container xChange figures do not track empty moves.

“The confluence of theoretical high availability and soaring prices for boxes strongly indicates that container lines

are prioritizing empty containers over export cargo from Europe,” said Dr Johannes Schlingmeier.

“There were signs of this even before the Suez Canal closure in late March. The latest figures suggest the additional disruption this caused has exacerbated the situation and made it even harder for exporters to find empties.”

The latest container trading data reveals that between January and April average prices for used 20 ft. containers across Europe rose 57% from $1348 to $2119.

In April, price increases for 20 ft. containers were especially severe. In Antwerp prices jumped by 30% compared to March. In Hamburg they rose by 16% over the same period while in Rotterdam they increased 12%.

Since the beginning of May, average prices for 20 ft. dry containers in Europe softened slightly to $2249 from $2110 in April. However, prices for 40 ft. dry containers have again increased this month, up 13% to $3112 from $2750 in April.

In Container xChange’s Container Availability Index (CAx) an index reading of below 0.5 means more containers leave a port compared to the number which enter. Above 0.5 means more containers are entering the port.

At the port of Genoa, the average CAx reading for a 20 ft. box in 2021 is 0.71, up from 0.26 through the first half of 2020. At Hamburg, in 2021 the average CAx reading has so far this year is 0.75, compared to 0.39 in 1H 2020, while at Rotterdam the reading is 0.71 so far this year, versus 0.46 a year earlier.

After a short dip in incoming containers to Europe due to the Suez Canal closure as measured by Container xChange’s Container Availability Index (CAx), inbound volumes are expected to increase again.

CAx readings for week 19 decreased by on average 4.5% to values of 0.85 across drycontainer sizes in Hamburg, 0.79 in Rotterdam, and 83.5 in Antwerp, indicating an ongoing surplus of incoming boxes.

“According to Container xChange forecasts, an increase in incoming shipping containers by 4-5% over the next weeks is likely to not only increase CAx readings but also contribute to slowly decreasing container prices again,” said Dr Schlingmeier.

“These are good times for equipment owners across Europe as indications are that even if container prices dip slightly, scarcity will remain until carriers change tack and start looking for more backloads. As a result, container prices are likely to remain at elevated levels for some time, although we do think availability for exporters will improve in the coming months.”

MMT

The Author Florian Frese Container xChange

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