Wsi spring 2015

COMPREHENSIVE

COVERAGE

OF

THE

SHIPPING

World Shipping / freight focus

Clear

Sky

low sulphur requirements in emission control

2015

INDUSTRY

w w w . w o r l d - s h i p p i n g . n e t

SPRING 2015

W rld Shipping SPRING

– Expanding business –

Ports in the Amsterdam, Rotterdam, Antwerp (ARA) region have been posting positive results for the past year

– Keeping in touch –

There have been a number of new developments in the communications field

– Seeking shelter –

Providing a place of refuge for casualties continues to be high on the agenda for salvors

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World Shipping SPRING 2015

W rld shipping SPRING

COMPREHENSIVE

COVERAGE

OF

THE

SHIPPING

2015

INDUSTRY

w w w . w o r l d - s h i p p i n g . n e t

COMPREHENSIVE COVERAGE OF THE SHIPPING INDUSTRY

– Expanding businEss –

Ports in the Amsterdam, Rotterdam, Antwerp (ARA) region have been posting positive results for the past year

– KEEping in touch –

There have been a number of new developments in the communications field

– sEEKing shEltEr –

Providing a place of refuge for casualties continues to be high on the agenda for salvors

Wo r l d s h i p p i n g / f r E i g h t f o c u s

Clear

Sky

FROM THE

low sulphur requirements in emission control

– EDITOR – Publisher W H Robinson Editor Sandra Speares sandra.speares@mar-media.com Project Director / world shipping David Scott david.scott@mar-media.com Project Director / freight focus John Ferris john.ferris@mar-media.com Project Consultant Alex Corboude alex.corboude@mar-media.com DESIGNER Justin Ives E-mail: justindesign@live.co.uk

Published by: Maritime Media Ltd Suite 19, Hurlingham Studios, Ranelagh Gardens, London SW6 3PA, UK Tel: +44 (0)20 7386 6100 Fax: +44 (0)20 7381 8890 E-mail: inbox@mar-media.com

www.world-shipping.net

R

egulation continues to be a major concern to the shipping industry, with the introduction of low-sulphur requirements in emission control areas (ECAs) from 1 January and the need to source low-sulphur fuel when moving through ECAs or alternatively install scrubbing technology to deal with the problem.

The likely ratification of the ballast water convention shortly is also liable to add an additional layer of costs for shipowners, who are still struggling in difficult economic conditions.

Shipping confidence continues to be affected by such issues as overtonnaging and the cost of meeting the requirements of the new regulations.

Other new developments, like EU moves on the recycling of ships, have raised concerns in Asian yards, which have been making considerable efforts to upgrade their facilities.

There have also been concerns raised that the growth in the world fleet could also result in a similar growth in shipping accidents. Salvors remain in the front line in responding to shipping accidents, and they continue to press for more attention to be paid to the issue of places of refuge, following a spate of high-profile accidents like the recent Maritime Maisie case.

Many eyes will be focused on how the Chinese economy performs in the coming year, and what the country will require in terms of imports.

Container companies are showing an increasing appetite for larger ship sizes, so filling those ships will not be easy.

Safety and security issues will continue to be paramount, not least because although piracy has been on the downturn off the east coast of Africa, there has been an alarming rise in activity on the west coast and also in SouthEast Asia.

Bank finance for shipping has been difficult in the economic climate since the crash in 2008, and private equity firms have been moving into the market, although less so in the Far East, where conventional bank finance has continued to be available. The risk profile for private equity firms is, however, very different from traditional bank finance, as they essentially take the same risks as owners, whereas banks are restricted to lending and earning interest on their money.

Safety and security for crews and ships remains of paramount concern, meaning training and education has never been more important.

Spring 2015 – 1

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World Shipping COMPREHENSIVE COVERAGE OF THE SHIPPING INDUSTRY

CONTENTS 05 – News

36 – green issues

Far East in recent months, with some high-profile visits to Hong Kong

09 – Industry view

Companies have been exploring a range of new initiatives to become more eco-friendly

60 – maritime cluster ARA

41 – costs

Ports in the Amsterdam, Rotterdam, Antwerp (ARA)region have been posting positive results for the past year

News Round up British engineering and sensor innovation

A pioneering naval weapons alignment system powered by electronic sensor technology heralds a fresh wave of British innovation in naval applications says Mike Baker, managing director, Sherborne Sensors

Green approach

Taxing times

Costs of new regulation and potential new taxes have been a source of concern to the industry in recent months

43 – registries Going green

12 – Cargo

Ship registries are expanding their fleets and getting involved in green initiatives

Later than some carriers had hoped, the new mega-alliances have now started operations in the main East-West container trades, according to Drewry Shipping Consultants

46 – classification

14 – Finance

49 – ship management

Cargo cares

Finance focus

The financial position in Asia is very different to what has been the case in Europe and the US

17 – education and training Time for training

Changing times

Classification societies are involved in the quest for alternative fuels and equipping ships to operate in US waters

Management matters

InterManager president Gerardo Borromeo has reaffirmed that his association will continue to serve as a strong voice for the ship management sector during 2015

51 – ship recycling

There have been a number of developments in education and training in recent months

Asian focus

25 – bunkering

54 – communications

Gary Byers, head of marine at Certas Energy, reviews fuel prices in 2015, the emission control area situation and the effect of cheaper oil on the marine industry

There have been a number of new developments in the communications field

ECA angle

33 – trading

Talking trade

Players are looking to new markets

Ship recycling yards have been improving their facilities

Keeping in touch

57 – Geographical focus Gibraltar Far East development

Gibraltar has been making considerable efforts to strengthen its ties with the

Expanding business

62 – Middle east ports Port progress

There has been plenty of good news for Middle Eastern port operators

65 – insurance Club class

New moves to provide additional services by insurers

67 – maritime law

Tackling regulation

Much-heralded new sulphur regulations are now in force, and the question will be how owners react to them in the months to come

69 – heavy lift Heavy duty

There have been a number of key projects for heavy-lift companies recently, as well as changes at the top

72 – salvage

Seeking shelter

Providing a place of refuge for casualties continues to be high on the agenda for salvors

74 – technology Tech talk

There have been a number of new developments in technology for ships

76 – EVENTS & EXHIBItions Spring 2015 – 3

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News

News round up Vessel orders, insurance claims and Suez Canal tolls were just some of the topics aired recently.

A steep rise in vessel orders risks bringing the recent bonanza in oil tanker shipping to an abrupt end, according to the latest edition of the Tanker Forecaster, published by shipping consultancy Drewry.

Following recent modest growth, the oil tanker fleet is expected to reach new heights by 2016, climbing to 371 million dwt according to Drewry estimates. In 2014, fleet growth was flat, inching up just 0.6% as deliveries slumped 38% to 9.1 million dwt and demolitions remained high. But capacity expansion is gathering momentum and is expected to result in annual growth of over 4% in 2016, on the back of brisk vessel ordering, which reached 22 million dwt last year.

Driving this resurgence in ship orders has been rocketing cargo demand, particularly floating storage, following the recent collapse in oil prices, coupled with moderating fleet growth. This has propelled spot rates to very high levels, with Drewry’s Tanker Earnings Index reaching 323.5 in January, its highest level since 2009.

“Notwithstanding the recent spike in demand, the primary driver of freight rate and earnings recovery in tanker shipping has been the decline in fleet growth,” said Rajesh Verma, Drewry’s tanker shipping lead analyst. “And if current ordering persists, it will prove the sector’s ruin.”

Orders have been particularly strong in the very large crude carrier (VLCC) segment on the back of growing trade on long voyage routes. The impact on capacity growth could prove particularly acute, given the anticipated decline in demolition activity as the tanker fleet is now younger.

“However, the short-term outlook remains very positive, with modest fleet supply growth and strong cargo demand anticipated for 2015, which are expected to push tonnage utilisation higher still,” added Verma. “With bunker prices projected to remain low, we expect tanker operators to make the most of a buoyant market, for the moment at least.”

Whereas the slow pace of recovery of the global economy fails to significantly ease the pain in the global shipping industry, the announcement by the Suez Canal Authority that there will be no increase in Suez Canal tolls is a welcome easing.

On 4 February, the Suez Canal Authority published its transit charges for the year 2015, stating that there will be no increase of tolls for 2015. They shall thus remain unchanged from 2014.

The only exception is an increase of 10% for liquefied natural gas (LNG) ships, as the standing 35% reduction in tolls changes to a 25% reduction from 1 May 2015.

Peter Sand, chief shipping analyst at the Baltic and International Maritime Council (Bimco), says: “As the global economics do not provide any respite, this announcement is welcome. Dry bulk shipping industry is particularly hard hit at the moment, with the Baltic Dry Index hitting a three-decade low level. Any offsetting of the cost escalation of daily operations is useful. Bunker prices are down 60% from seven months ago and now unchanged tolls are well received.

“Realizing that now is not the time for price hikes shows that the authority is aware of the serious condition of global shipping.”

Evergreen container orders The recent announcement that Evergreen has signed timecharter agreements with Shoei Kisen Kaisha Ltd for 11 ultra large container vessels (ULCVs) of 20,000 teu – the nominal capacity stated by builders Imbari Shipbuilding Co rather than Evergreen’s operational estimate of 18,000 teu – means that the total sum of ships of 18,000 teu and above, either active or on order, has now passed the 1 million teu mark, according to Drewry.

Measuring about 400 metres in length and 59 metres wide, these ships will join the CKYHE Alliance (Cosco, “K” Line, Yang Ming, Hanjin and Evergreen) services from 2018 through 2019.

Evergreen emphasised the main draw of these ships, the cost savings, with the ship’s new-generation G-type main engine developed with a longer stroke in order to sail at lower speeds, helping to reduce fuel consumption and greenhouse gas emissions by an estimated 7% compared with traditional main engines.

The 18,000 teu-plus club was formed by Maersk Line when it ordered the first tranche of 10 Triple-E Class ships in February 2011, which it followed in June of the same year with an order for 10 more.

Two years later, CSCL, MSC and UASC were [so] convinced of the competitive advantages of these leviathans that they ordered their own sets, and almost fully four years since the first Maersk order, Evergreen has become the fifth member of the club.

The G-type main engine, developed with a longer stroke in order to sail at lower speeds, helps to reduce fuel consumption and greenhouse gas emissions Spring 2015 – 5

News

Chinese rebalancing Analyst Wood Mackenzie says 2014 was a significant year for China as economic rebalancing led demand growth – for a range of major energy commodities – and GDP growth decoupled significantly for the first time. During the past two decades, commodity demand growth had maintained relatively proportionate annual increases to GDP growth. In 2014, however, the pace of power, gas, coal and diesel demand increases fell more drastically than the slight GDP moderation, beyond expectations.

Wood Mackenzie expects gas demand will recover in one to two years, as the key drivers of slower growth are mainly cyclical, but power, coal and diesel demand will see their outlook change notably over the long term, owing to major structural changes in the economy and policy. The global energy sector will need to identify which changes are structural or cyclical to determine future demand patterns and opportunities.

China’s GDP grew by 7.4% in 2014, compared with 7.7% in 2013, a modest decline. Meanwhile, compared with 2013, power demand growth fell by almost half; gas demand growth fell by more than 8 percentage points; coal demand barely grew; and diesel demand contracted for the first time in more than a decade.

Cynthia Lim, principal Asia economist for Wood Mackenzie, said: “7.4% is still a large year-on-year GDP increase for any economy, so this fall in commodity demand is counter-intuitive and we have only seen the tip of the iceberg. The Chinese government is moving away from the post-2008 investment binge and gradually moving towards a more moderate but sustainable consumptionled economic growth. There are two aspects of rebalancing: one, away from investment towards consumption, particularly in the developed coastal region; and, two, a shift in economic gravity away from the coast and towards the inland region. Both trends will have significant implications on commodity demand shifts. An important indicator for the energy industry to watch will 6 – Spring 2015

be the weakness of industry versus the strength of the consumer in China.”

The research company expects industrial recovery and related investment will remain subdued in 2015-2016 but should see robust growth through the medium term, supported by urbanisation. Key sectors such as coal and steel are weighed down by overcapacity, tighter environmental regulations and the property market slowdown. While the Chinese government has relaxed both house purchase restrictions and credit conditions through 2014, recovery in real estate will be slow as inventory levels remain high and potential buyers stay on the side line owing to market uncertainty.

Wood Mackenzie analyses which sectors will be most affected in the near (one to two years), medium (two to seven years) and long term (over eight years).

The pace of annual coal demand growth slowed to 4-5% in 2012 and 2013, particularly in coastal markets with near-zero growth in demand for power generation. However, Gavin Thompson, principal analyst for Asia Pacific gas and power research, said: “Coal remains king in China but growth has been severely reduced, due to industrial weakness as well as cyclical weather patterns that saw higher rainfall boost hydro output. Through the short term, coal-fired generation will most likely be muted by lower power demand, environmental policies and a rise in noncoal generation including hydro. Longer term, coal demand pace and patterns will be impacted by structural changes, with demand rising fastest from inland provinces and the acceleration of ultra high voltage (UHV) transmission lines to export power to the coast.”

Between 2004 and 2013, gas demand in China increased by, on average, 16% a year. Last year, however, gas demand growth slowed notably from over 13% in 2013 to around 8% in 2014. Thompson said: “This was influenced more by cyclical factors. In addition to slowing GDP growth, evolving environmental policies,

higher hydro output, mild winter weather in northern China and high domestic gas prices relative to oil were key factors that saw gas demand growth fall sharply.

In 2015, the government’s decision on domestic gas price reform will be a key influence on demand. While we expect domestic demand growth over the next few years to return to historic levels, a swift return to double-digit growth may not be achievable without lower city gate gas prices.”

2014 was the fourth straight year of a decoupling relationship between China’s GDP and oil demand growth as the effects of the 2009 stimulus began to fade. However, growth in oil demand has varied by oil product since then, given each product’s distinct drivers.

Diesel demand is estimated to have contracted 0.7% in 2014 as commercial transportation demand reduced.

Thompson said: “We believe we are now witnessing a structural change in China’s diesel demand as the economy rebalances away from heavy industry. In contrast, gasoline demand, which reflects personal car ownership, maintained a robust growth of 8% in 2014. Healthy growth momentum for gasoline demand will most likely be sustained as the economy shifts further towards consumption.”

Lim concluded: “The rebalancing of China’s economy will play an important role in shaping the energy demand outlook for 2015 and beyond. We believe a recovery in demand for power, coal and diesel in particular is closely tied to the industrial demand outlook.

While these commodities will experience a moderate recovery in the medium term as over-capacity is reduced, the ongoing transition of China’s economy away from an industry-led model suggests their relationship with GDP growth will weaken permanently in the longer run. As a result, the energy sector must keep attuned to both China’s underlying changes and also shorter-term developments to position itself for the changing opportunities the market offers.”

News

Greek elections International accountant and shipping adviser Moore Stephens says it is too soon to say whether the Syriza party’s victory in the country’s elections could, as some fear, have a damaging effect on the country’s shipping industry. Rather, it says, Greek shipping interests will need to monitor how the change of government might affect them on both a business and personal level before reviewing any long-term plans.

Moore Stephens London partner Michael Kotsapas, a shipping specialist who has been advising Greek families for over 15 years, said: “Any change of government, in any part of the world, is likely to have implications for the national shipping industry. This is particularly true of Greece, where shipping is a significant contributor to the country’s overall GDP and a major source of employment.”

Last year, the ruling government introduced a number of changes to Greece’s tax laws, including some specific to the shipping industry, such as repealing the law imposing mandatory triple tonnage tax on Greek-flag ships and foreignflag vessels managed out of Greece, replacing it with the voluntary contribution of double tonnage tax payments for the next four years. Another measure with a potential impact on the shipping community included the introduction, for the first time in Greece, of controlled foreign companies rules covering the concept of effective management and criteria for determining this.

Kotsapas concluded: “Before the election, the anti-austerity Syriza party called for a new agreement, which would involve the shipping community making a greater contribution to the national economy than it already does. It remains to be seen whether that will be the case. Shipping is a key industry in Greece, and it would be surprising and disappointing if the new government’s policy, when announced, did not reflect that.

In the meantime, the shipping community will be watching developments with keen interest.”

Shipping is a key industry in Greece, and it would be surprising and disappointing if the new government’s policy, when announced, did not reflect that

TT analysis A detailed analysis of the root causes of insurance claims show that 80% of bodily injuries at global ports and container terminals involved handling equipment or vehicles. Speaking at the Philippine Ports and Shipping Conference in Manila, TT Club’s Asia Pacific regional director, Phillip Emmanuel, emphasised the statistic and urged operators to improve their management practices in order to reduce the incidents that result in injury and sadly sometimes death to workers and others at ports and terminals.

TT Club, a leading international provider of insurance to the freight transport and cargo handling sector, has carried out root cause analysis of nearly 7,000 claims valued at more than $10,000 and totalling $425 million. The lessons to be learned for port and terminal operators in terms of minimising future risk to the workforce and third parties, equipment, ships and other property are numerous.

TT Club executives, including Emmanuel, are committed to highlighting these often avoidable dangers and to promoting safer working practices across the sector.

During his Manila speech, Emmanuel drew his audience’s attention to a comprehensive catalogue of operational issues that require careful management to control potential risk, including quay crane boom collision and adequate crane braking systems, regular equipment maintenance regimes, fire prevention systems, adoption of best practice in packing and handling of cargo, and appropriate processing of dangerous goods.

In particular, however, Emmanuel addressed the risk profile of ports and terminals as it pertains to the occurrence of accidents resulting in bodily injury.

These are costly in the sense of both the human suffering and value of claims. “Similar to many preventable incidents, those involving the workforce and third parties can very often be minimised in the simplest of ways given careful attention and the employment of sensible management practices,” emphasised Emmanuel. “Strict limits to pedestrian access to yard stacks, well indicated one-way vehicle lanes, designated safe and secure areas for truckers, and regulated on-terminal induction procedures are all easily enforced and effective procedures.”

Spring 2015 – 7

News

Casualties likely to rise As the world’s trading fleet expands, 2015 will most likely see further increases in maritime casualties, according to IHS. “Shipping safety remains an ever-present issue at the start of 2015 as industry regulators make louder calls to investigate a range of incident types and improve safety standards.

According to the latest data from IHS, a total of 1,639 maritime casualty incidents were reported during 2014, a 10% increase from 2013, when 1,489 incidents were reported.

“Notably, of all the casualty incident types, hull and machinery damage, wrecking and stranding, ship-on-ship collisions and contact damage continue to show a marked increase in incident rates, IHS Maritime & Trade data shows.

“In 2014, there was a considerable increase in all four of these categories, with a 23% yearon-year increase in collisions alone. Not surprisingly, it is the busy waters of the South China Sea that saw the highest number of collisions.”

Of note in 2014 under the fire/explosion category was the Japanese tanker Shoko Maru, which caught fire during maintenance in May 2014. However, there was a notable 26% decrease from the previous year, along with foundering, which saw a 28% drop from 2013.

Looking ahead, IHS Maritime & Trade’s fleet capacity model shows that 1,484 vessels will be added in 2015 to the main global trading fleet, which stood at 42,604 in 2014. This trend will continue at roughly 3% per year and will pass the 50,000 mark by 2020.

“As the world’s trading fleet expands, so too will port congestion and vessel ages. It is likely that 2015 will see further increases in the number of casualty incidents,” said Gary Li, senior analyst at IHS Maritime & Trade. “It is worthwhile looking back at the previous year in order to assess the trends and causes in order to better understand the risks ahead.”

For example, the main locations of incidents continue to occur in the busy maritime trading zones of Europe and Asia Pacific. IHS data shows that 2014 saw double digit year-on-year increases in the number of incidents in the top 10 trading zones – the British Isles and the North Sea saw a 19% increase alone, while the Eastern Mediterranean and the South China Sea each saw 12% increases.

“The continued growth in global maritime trade is, of course, good news, but it should go hand in hand with the safety of seafarers,” Li said. “However, the declining rate of total losses as a proportion of overall casualties is a good trend.”

The age of the vessels involved is also a factor, with the majority of those incidents occurring in Canada, Russia and the Great Lakes being vessels with the highest average ages of 28-31 years.

“One of the reasons is that these regions see many small locally operating vessels, or vessels that possess specialisms that are hard to replace, such as icebreaking tugs in the Arctic ports,” Li said. “For example, 156 Canadian-flagged vessel casualties averaged 31 years, and 127 Russian-flagged vessels averaged 26 years.”

Passenger vessels continue to be the most at risk in terms of potential fatalities, owing to the large number of passengers on board. Throughout last year, 418 people lost their lives, with another 138 missing – a far deadlier year than 2013, when 201 were killed and another 149 reported missing.

“The shipping community must not slacken in ensuring the meeting of safety regulations and the propagation of safety knowledge and best practice,” Li said. “Extra care should be taken among passenger vessels and those operating in Northern Europe and South-East Asia, which will continue to be hotspots for casualty incidents.”

8 – Spring 2015

As the world’s trading fleet expands, so too will port congestion and vessel ages.

It is likely that 2015 will see further increases in the number of casualty incidents

Industry viewpoint

British engineering and sensor innovation A pioneering naval weapons alignment system powered by electronic sensor technology heralds a fresh wave of British innovation in naval applications says Mike Baker, managing director, Sherborne Sensors

T

oday, warships may have given way to merchant ships and ocean-going liners docking at the quayside of what is now a commercial port, but Portland and Weymouth’s proud heritage of pioneering development and specialist industries endures in the form of the many precision engineering firms based in the region. One sector seeing particular growth is the application of sensor technologies for naval weaponry.

Weapons alignment In the early 1990s, British engineer Jonathan May was involved in a project to develop a ship-borne weapon alignment system that would enable naval vessels to align their weapons and security systems more quickly, more accurately and at lower cost. At that time, the use of electronic sensors was being investigated by both the US Navy and the British Royal Navy for static alignment of weapons platforms. A commercial version of an alignment system using an electrolevel sensor was also being refined.

Static alignment of weapons platforms is of critical importance to achieving weapons accuracy. A ship’s structure will bend and flex over the course of its lifetime. Exposure to rough seas, variations in temperature and changes in loading cause varying stress on the ship’s frame; refits and accidents cause even more permanent changes. All of this precipitates variations in the accuracy and precision of the alignment of weapons relative to each other and to the physical configuration of the ship.

The fundamental method for finding static alignment errors is the tilt test or roller path test.

This involves measuring the relative tilt between platforms at a series of bearings. When these individual errors are plotted against the bearings, a sine curve results, which identifies both

the magnitude of tilt and the bearing at which it occurs. To achieve the high performance demanded by modern weapons systems, these measurements have to be precise to within a few minutes of arc.

The conventional method of performing a tilt test was to use bubble clinometers (effectively, bubble spirit levels) to measure the errors between platforms. This required that the ship be secured in dock for the duration of the measurements, with maintenance activities onboard halted to minimise any movement. Even under these conditions, the ship could flex with the wind, causing movement of the bubble and hindering measurement. With a bubble clinometer, the reading is only accurate when the bubble is centred, and so an engineer had to be present on each platform to adjust the level. Manual adjustments would be made to try to centre the bubbles in all clinometers simultaneously, meaning communications between stations was also necessary.

For a ship equipped with many weapons, the conventional method could take several days to complete, and the cost of docking and downtime on the ship was substantial.

Moreover, a docked ship experiences different stresses to those experienced when fully floating. Consequently, there was also uncertainty as to how much the structure would flex when released from dock and how much error would be re-introduced.

Although the prototype system being evaluated by May was intended to automate the tilt test and remove the requirement for docking, he was convinced it was not commercially viable.

It was too big, too heavy, and too expensive. It also lacked flexibility and was difficult to use. The Royal Navy kept the first systems, but it was difficult to see many other naval forces adopting it.

Static alignment of weapons platforms is of critical importance to achieving weapons accuracy

Spring 2015 – 9

Industry viewpoint

Digital signal processing Having parted company from his firm, May remained convinced there was a better way to approach weapons system alignment, by combining the approaches of the US Navy and Royal Navy, and using electronics and signal processing.

He went on to found Electronic Measurement Systems Ltd (EMS) to pursue the concept further.

May designed a new tilt system, employing higher ranged electronic sensors with more accurate custom electronics. Much lighter and more user-friendly than the system piloted by the Royal Navy, May’s Computerised Electronic Tilt Angle Measuring System (CETAMS) comprised a set of up to eight inclinometers linked via a single electronics module to a laptop PC. The measurement process for the tilt system is as follows: the ship’s Master Level Datum located on the ship’s founding plate acts as the reference platform and a sensor is placed on it, with the remaining sensors secured on the other platforms of the weapons system.

This allows simultaneous measurement of all the ship’s platforms, and calculation of the errors between them.

The original system used single axis inclinometers capable of measuring differences in inclination to better than 1/600th of a degree (0.1 arc minutes).

In order to meet the requirements of May’s design, the inclinometers were specially modified by Sherborne Sensors to enhance the accuracy of the device and provide a low-output impedance drive suitable for driving the long cables without interference.

10 – Spring 2015

The concept of operation is essentially the same as the conventional tilt test technique described previously, but the measurement of each tilt takes just 10-15 seconds, with the system using a signal processing algorithm to calculate the tilt of each inclinometer. Tilt measurements are integrated and processed to effectively eliminate inaccuracies caused by the ship’s movement (rolling and pitching).

Accurate measurement of the tiny tilt differences between individual components allows mechanical compensation to be applied. More frequent correction factors can be entered into the ship’s Fire Control System and programmed to correct for them. This improves gun fire control and increases weapons’ accuracy.

It is now possible to perform a test in under an hour using CETAMS, whereas previously a tilt test could take three or four days to complete. Crucially, as the system compensates for small movements during measurement, it enables tilt tests to be performed while the ship is alongside dock and without affecting other activities taking place onboard.

New applications Recognising the many benefits that this new approach brings, CETAMS was purchased by various European naval forces, shipyards and also the US Navy. The reliability of the system is well proven, and EMS still regularly calibrates and services systems supplied some 20 years ago.

However, May recognised that the new method of tilt measurement could benefit other measurements carried out onboard floating vessels and that further applications were possible.

In 2009, a new application requiring additional software was presented.

During the build of recently delivered fast patrol vessels for Oman, the shipbuilders needed to position the ship’s mast structure onto the deck with a crane and weld it into place. Owing to the height, this had to be performed outside on a floating hull, which raised concerns about the accurate alignment of the two structures. Furthermore, once the mast had been initially positioned, it wasn’t known how much the welding operation might affect the final alignment.

By securing inclinometers to the reference plates of the mast and the hull, placed in pairs aligned at right angles to each other and along the fore-aft line and athwartships, both X and Y tilt measurements were made simultaneously. These were displayed on a large screen, enabling engineers to continuously monitor and adjust the positioning of the mast. The process took several days and, during this time, the recorded tilt data was logged continuously. Examination of the data subsequently showed the effect of solar radiation on the mast and how tilt varies

Industry viewpoint

throughout the day in great detail.

Although solar radiation is known to affect tilt, this provided real and accurate long-term information.

Sensor development In 2010, May commenced a significant upgrade to the system’s design that included new software and digital electronics. The purpose was to further improve the accuracy of measurement, increase functionality and ensure compatibility with modern computer operating systems. This resulted in a complete new system design that was based around a dual-axis sensor.

The key component of the system is the Sherborne Sensors’ sensor, which formed the starting point of the new design. Early prototypes were made to incorporate two analogue sensor heads into a single unit, with room to insert the digitising electronics. In addition to improved accuracy, May wanted to keep track of each inclinometer so that recorded scale factor and offset adjustments could be linked to the sensor itself. This required adding intelligence to the inclinometer and non-volatile storage on additional circuit boards. It was just after the first working prototypes of the new sensor assembly had been commissioned that the DSIC, a dual-axis digital inclinometer, became available.

The new DSIC had all the functionality being designed into May’s new sensor assembly, but in only two-thirds of the space occupied by its prototype.

However, EMS needed the best accuracy at extremely small angle increments

optimised over a particular temperature range. It also needed to be able to cope with a ship’s motion and an exposed environment. While the standard DSIC was close to meeting these requirements, EMS discussed potential changes with Sherborne Sensors, which was able to customise the design accordingly.

Consequently, the EMS systems, based around the DSIC, can offer an improved measurement capability and greater functionality for a wider range of applications. The dual-channel capability means that both standard tilt test measurements and accurate plane alignment, such as that used for mast alignment, are supported. A further benefit of the DSIC that CETAMS exploits is the internal non-volatile memory provided. Each sensor head has its own serial number that can be read remotely, which means that whenever an inclinometer is connected to the system it can immediately be identified. This is particularly useful in compensating for offset errors that may arise over the life of the inclinometer.

When the sensors are being secured to weapons components and other metal structures onboard ship, it is possible for the base to pick up grease and dirt, or be knocked, causing roughened feet. This could result in a change to the zero tilt offset, introducing a fixed error. However, by measuring the offset of a device and storing its value linked to the serial number, such errors can be compensated for in the system software.

Four years on from the initial system upgrade and 18 months since adopting

the DSIC, EMS has delivered a new CETAMS unit to the Air Warfare Destroyer Alliance for the Royal Australian Navy, and also received orders from the Royal Canadian Navy. With piracy an ever-present issue in merchant shipping, the industry could also benefit from CETAMS. Deterrents such as dazzle guns, laser warning systems and active denial systems need accurate alignment to ensure the highest level of safety for the crews.

Dynamic industry EMS is looking to collaborate further with military, commercial and shipyard customers on other innovative technologies that employ highly customised, dual-axis inclinometers.

That CETAMS in particular is a confluence of the knowledge, processes and skilled personnel manifest within firms throughout Weymouth and Portland suggests that the area’s heritage as a centre for military, naval and civil engineering excellence is set to continue.

There has also been an industry drive to recruit and train young people in the niche skills that specialist firms such as EMS require. When the Royal Navy moved away, the number of engineers employed was reduced drastically, so crucial knowledge has effectively missed a generation. It is now hoped that together, the network of dynamic firms that comprise Weymouth and Portland’s precision engineering sector can build on their reputation as industry pioneers to nurture and grow the next generation of talent and technological discovery.

Sherborne Sensors is a global leader in the design, development, manufacture and supply of high‐precision inclinometers, accelerometers, force transducers and load cells, instrumentation and accessories for civil engineering, industrial, military and aerospace customers.

Products have AS9100C Quality Accreditation and are renowned for their reliability and long‐life precision in critical applications. www.sherbornesensors.com

Spring 2015 – 11

Cargo

Cargo cares Later than some carriers had hoped, the new mega-alliances have now started operations in the main East-West container trades, according to Drewry Shipping Consultants

“

By interrogating forward schedules, Drewry has taken a close look at how things stand in the key Asia-North Europe trade and how they might develop by the end of the year.

What stands out immediately is the fact that every service is now controlled by one of the four alliances.

“Maersk and MSC’s 2M partnership is in the box seat, controlling 31% of the ‘effective’ weekly capacity, followed by the CKYHE alliance (COSCO, “K” Line, Yang Ming, Hanjin Shipping and Evergreen Line) and the G6 alliance (APL, Hapag-Lloyd, HMM, MOL, OOCL and NYK), both with 24%, and finally Ocean Three (CMA CGM, China Shipping Container Lines and United Arab Shipping Co) on 21%. Our definition of effective capacity is nominal capacity (the average size of ships per service) minus deductions for deadweight and high-cube limitations and then again for out-of-scope cargoes, ie those relayed to areas outside the range. When relevant, operational capacities have also been adjusted for slots allocated to wayport cargoes, such as when a service also makes calls in, say, South Asia or the Mediterranean.

“The total number of weekly Asia-North Europe services has been reduced from 22 to 21 since December 2014.

The number of ships required to keep these services in a fixedday weekly pattern has subsequently come down from 245 last month to 232, with smaller unwanted ships having been cascaded away from the trade.

Despite this, available capacity has largely been maintained, with westbound slots of 218,500 teu per week, down just 1% on December.

This has been achieved by the introduction of more new ultra large container vessels (ULCVs) – the average size of ship has increased from 12,400 teu to 12,600 teu – while the new schedules are more dedicated to North Europe with fewer wayport deductions.

Many feared that the formation of the mega-alliances would intensify the homogenisation of the industry, whereby carriers can only compete with one another on price as they all have the same services. However, closer inspection of the schedules reveals that the alliances are far from uniform. Between them, they have created a pretty well balanced network, with wide port coverage at both ends of the trade, Drewry said.

Marseille Fos The container and cruise sectors set new records at leading French port Marseille Fos in 2014 in a year when total cargo throughput slipped to 78.45 million tonnes – down 2% on 2013 – as the result of an ongoing decline in oil volumes stemming from the restructuring of Europe’s refinery industry.

Box traffic rose 7% to 1,174,000 teu, beating the previous record of 1,097,740 teu in 2013. Some 90% of the trade went through the two deepsea Fos 2XL terminals, where volumes rose 10%, in contrast to a 5% fall in the largely shortsea throughput handled in Marseille.

Container tonnage was up 5% to 11.27 metric tonnes (MT), leading general cargo to a 3% increase on 17.74MT – the port’s biggest area of growth last year. Steel products saw conventional trades improve 6% to 2.77MT, but ro-ro cargo was down 5% to 3.7MT following industrial disputes at financially troubled ferry operator SNCM. Dry bulks increased 2% to 13.45MT, driven by a 6% rise to 9.7MT in imports of steel industry raw materials. Agro-bulks were stable at 0.95MT, but other bulks fell 8% to 2.79MT. Liquid bulks gained 8% on 3.7MT, dominated by a 7% rise in petrochemicals to 3.63MT. Oil and gas volumes fell 5% to 43.56MT in a trend that has seen volumes down by more than 15MT since 2011. Crude

What stands out immediately is the fact that every service is now controlled by one of the four alliances

12 – Spring 2015

NB Did say ‘cokes Cargo coal’ but should this be ‘coking coal’? imports for domestic refineries were 8% lower at 22.47MT and crude for pipeline supply to Germany and Switzerland dipped 4% to 2.6MT. Refined products contributed 28% of the sector’s volumes after rising 8% to 12.04MT. Liquefied petroleum gas (LPG) was down 6% at 2MT, while liquefied natural gas (LNG) slumped 22% to 4.43MT against strong price competition from Russia – although shipments began to recover later in the year as the differential narrowed.

Passenger throughput was marked by a 12% surge in cruise numbers to 1.3 million – up by 136,300 on the previous record set in 2013 – from a total of 493 calls. However, overall passenger volumes fell 6% to 2.46 million after Corsica and North Africa ferry carryings finished 20% down on 1.16 million. The Corsica total of 680,000 passengers represented a 30% drop.

The Medlink Ports partnership of Marseille Fos, Sète and nine RhôneSaône river ports has strengthened its cooperation with inland waterways authority Voies Navigables de France and the Compagnie Nationale du Rhône by forming the Medlink Ports Development Agency to further promote modal shift from saturated road links.

The association aims to widen the partnership to shippers, hauliers, suppliers and professional bodies through four objectives – enhancing the river logistics chain by sharing best port practices; establishing Medlink Ports as an international brand offering multimodal solutions; winning new traffic by providing a free advisory service to shippers; and working closely with state and regional authorities to develop public policy favouring waterways and

intermodal options. Last year, Medlink Ports traffic totalled 8.5 million tonnes, with container volumes of 91,500 teu.

Rotterdam cargoes Rotterdam dry bulk throughput fell in 2014 by 0.7%, to 88.6 million tonnes.

The German steel industry ran at 87% capacity last year. Owing to such factors as the renovation of blast furnaces in Germany, 5.2% less ore and scrap was handled in Rotterdam.

Coal throughput fell by 0.9%.

Although the throughput of coking coal for the steel industry tends to be in line with that of ore and scrap, this increased in 2014 as a result of the concentration of incoming trade via Rotterdam. That was more than offset, however, as a mild winter and the increase in renewable energy generated in Germany meant that less coal was needed for power plants.

Agribulk throughput was up by 9.2%, mainly because more wheat was exported and more corn and soya was imported.

The category other dry bulk consists mainly of raw materials for construction and industry. 6.8% more of these goods were handled, primarily as a result of the upturn in the global economy.

Liquid bulk throughput fell by 2.1% to 202.5 million tonnes. This market sector accounts for 45% of total throughput in Rotterdam, so a limited decline can have a big impact on the total throughput figure.

Crude oil throughput was 4.8% up. There were fewer maintenance shutdowns at the refineries and the capacity utilisation was higher. The category mineral oil products fell the most in 2014, by 8.1%. The most significant factors were competition from new tank terminals in other ports and a decline in the handling of naphtha. The latter is an important feedstock for the

chemical industry. This sector is battling against difficult market conditions in Europe. Actually, there has been strong growth in the throughput of oil products during the past 10 years: in 2014, despite the decline, more than twice as many mineral oil products were handled than in 2004.

LNG throughput is still modest in scale (1.2 million tonnes), but did experience tumultuous growth of 59.5%. This was owing primarily to the re-export of LNG. The category other liquid bulk consists mainly of chemical products. The main reason behind the 7.4% decline is the fact that the European chemical industry finds it difficult to compete with overseas providers as energy and feedstocks are considerably cheaper elsewhere.

There was a 5.8% increase in the numbers of containers throughput, to 12.3 million teu, and a 5.2% increase in weight to 127.6 million tonnes. This can be explained by a combination of factors.

The economy in both the eurozone and the UK is improving. As a result, there has been an increase in the deepsea volumes on the shipping routes to Asia and North America. Moreover, the effects of the increase in scale in container shipping became visible: Rotterdam is attractive for ever-larger ships.

Breakbulk is a combination of ro-ro traffic and other mixed cargo. Throughput in this category increased by 12.1%, to 26 million tonnes. Ro-ro traffic was up by 8.1%, thanks largely to the improvement in the British economy. In the other mixed cargo category, steel, non-ferrous metals and project cargo did particularly well. Other mixed cargo, which has been on the decline for years as more and more cargo has disappeared into containers, did exceptionally well, with 28.1% growth.

Spring 2015 – 13

Finance

Finance focus The financial position in Asia is very different to what has been the case in Europe and the US Above: Harry Theochari, global head of transport at law firm Norton Rose Fulbright

T

he Far East is probably the last area to be hit by the banking crisis in relation to ship finance, says Harry Theochari, global head of transport at law firm Norton Rose Fulbright.

The banks in the Far East are still lending for shipping and are relatively strong, he says. These include the likes of HSBC and Standard Chartered, which have a presence there as well as a large global presence.

Japanese banks are also very active still, Theochari says, adding: “There is plenty of money there.” Chinese export credit agency banks have also been very busy. “I haven’t noticed any major shortfall when good owners in the Far East need to raise money. They have generally been able to use normal bank finance. It is in the West that we have been far more badly hit by the banking crisis.”

“We haven’t seen much of private equity [in the Far East], certainly nowhere near as much as in the US and Europe, but there is an increasing trend for private equity to become involved in Asia,” he adds.

Clearly, Asia hasn’t seen the level of distress present in the US and Europe, and private equity investors tend to be attracted to distressed companies, where they can buy assets at a good value and hopefully ride the market up as it comes out of recession.

However, in cases where there have been collapses in the Far East, private equity has shown some interest.

According to Theochari, the bond markets haven’t taken off in Asia. In the US and Europe, there has been a big influx of private equity, and the bond markets have been volatile, particularly in countries like Norway. “What we haven’t seen in Asia is any real bond activity, any real private equity activity and any real capital markets activity.”

He says he had hoped that, in terms of capital market activity, Shanghai or Hong Kong might “step up to the plate”, but there are very few listed companies. There are probably more family-owned and family-run shipping companies in the Far East than in Europe. Meanwhile, there has been a lot of consolidation in the US, with companies going to the capital markets or merging, such as Oaktree’s investment in Star Bulk last year.

Japanese companies are big corporates already, and the family run companies very much follow the old-fashioned Greek model and can still raise a lot of money from trading houses. They also still value their independence.

A recent report by Citibank suggested that, by 2020, trade between developed Asia – China, Korea and Japan – and developing Asia – for example, Indonesia, Malaysia, Thailand and Vietnam – would outstrip trade going from Europe to the US or Asia to Europe or the US. Another market that has gone from strength to strength is the Australian market, and Norton Rose Fulbright’s shipping and transport practice is now the biggest in the country.

Australia has no national fleet to speak of, but there is a lot of shipping and ports activity and that is really expanding.

Mining, in particular, is very important as natural resources are being shipped to China, and ports like Australia’s Newcastle have doubled in size in the space of the past decade.

Chinese interests are buying mines in the country, and Theochari says Norton Rose Fulbright is largely involved in “shipping logistics”, advising on private railway systems, for example. There is a lot of port development as well as liquefied natural gas (LNG) development on both the east and west coasts.

I haven’t noticed any major shortfall when good owners in the Far East need to raise money

14 – Spring 2015

Finance

Bimco standard The Baltic and International Maritime Council (Bimco) has announced its intention to develop a standard term sheet to assist the shipping industry in the creation of ship financing documentation. The aim is to offer lenders and borrowers a comprehensive and simple standard that would become well-known – and could replace the many individually drafted term sheets developed by banks and other financial institutions. As a result, this standard would have the potential to facilitate the provision of ship financing, increase predictability and reduce cost.

A term sheet usually contains a number of provisions for a term loan facility, revolving credit facility, or a combination of both, and further provisions on particular issues, such as currency, interest, fees, guarantee, security, prepayment and cancellation.

Angus Frew, secretary-general of Bimco, commented: “This decision is an important step towards developing a standard term sheet that will simplify ship financing documentation for our members and users of Bimco documents, saving them time and money.

“We think that both lenders and borrowers will see the benefits of having this kind of standard available.

“Bimco will now set up a dedicated sub-committee to draft the term sheet.

“Our goal is always to provide clearly drafted and balanced documents for industry to use and so the sub-committee will include both bank and shipowner representatives and their lawyers.

“We expect the first meeting of the subcommittee to be in spring 2015.”

Business confidence Moore Stephens’ most recent report on shipping confidence suggested that the likelihood of respondents making a major investment or significant development over the next 12 months was down marginally on the previous survey, from 5.4 to 5.3 on a scale of one to 10. This is the lowest figure recorded in this category since August 2012. Despite this, the figures for brokers, managers and charterers were all up, the first two by two points to 4.7 and 5.8 respectively and the latter by one point, from 5.5 to

5.6. Expectations on the part of owners in this regard, meanwhile, were down from 5.6 to 5.1.

Forty per cent of managers, as opposed to 38% last time, rated the likelihood of making a new investment over the next 12 months at seven or higher out of 10, while 38% of charterers (up from 21% in August 2014) were of like mind. Meanwhile, the 36% of owners anticipating making a new investment over the coming year was down this time on the previous figure of 41%.

Geographically, expectation levels of major investments were unchanged in Asia at 5.2, but down from 5.4 to 5.2 in Europe and from 5.6 to 5.3 in North America, where 33% of respondents rated the likelihood of making a new investment over the next 12 months at seven or higher out of 10, as opposed to 22% in the previous survey.

Comments from respondents in this regard focused largely on the growth of private equity funding in shipping.

One said: “The ongoing attack on shipping by private equity investors and outsiders is still active. Until this stops, shipping does not stand a chance of producing decent returns for the historic shipowner who invests in shipping for the long term.

“With low yields still in place around the world, returns required by public companies and private equity investors are tragically low, so they invest in projects that they really shouldn’t be investing in. In addition, the new master limited partnership (MLP) structure is reducing required returns still further.

Shipping has no place in the MLP world.”

Demand trends, competition and finance costs, in that order, once again featured as the top three factors cited by respondents overall as those likely to influence performance most significantly over the coming 12 months.

The number of respondents overall who expected finance costs to increase over the next 12 months was up by one percentage point to 40%. For both charterers and managers, the increase was 9 percentage points to 38% and 45% respectively, while for owners there was a 1 percentage point increase to 40%.

Brokers (down from 44% to 36%) were

the only category of main respondent to record a lower expectation of increased finance costs.

The number of respondents in Asia anticipating an increase in the cost of finance was up by 3 percentage points to 48%, Europe was unchanged at 35%, and in North America there was an 11 percentage point fall to 56%.

One respondent said: “In some cases, little if any of the financing loan will have been paid off against ships that are now approaching their first special survey and which will have suffered a huge depreciation in value owing to age and the current low market.”

Another noted: “There is concern about the influence wielded by irresponsible hedge funds that do not understand the nature of the business and the risks involved.”

Spring 2015 – 15

Education and training

Time for training There have been a number of developments in education and training in recent months

B

MT ARGOSS, a subsidiary of leading international design, engineering and risk management consultancy BMT Group, has developed a specialised version of its REMBRANDT real- and fast-time simulation and training tool specifically for use in scenarios involving inland waterways.

Developed to support the specialised control systems and navigation charts used by vessels working on inland waterways, REMBRANDT-INLAND is a highly accurate, capable and flexible alternative to full mission bridge (FMB) marine simulators, delivering equivalent functionality at a lower price point. REMBRANDT allows the user to load any port, river or canal and utilises high-fidelity vessel models that include over 750 parameters, ensuring that the user experiences identical vessel-to-vessel interaction, vesselto-bank interaction, squat and shallow water effects as the real vessel would in the same conditions. Simulations can be replayed in video format with track plots and data information printed or saved electronically, providing an opportunity to analyse vessel performance.

REMBRANDT-INLAND has enhanced current and wind settings to accommodate the unique features of a given location.

It can also provide Client Server, a multi-user mode which enables multiple vessels to operate in a single operational scenario; each with independent human control, making it a powerful and effective tool for real-life scenarios.

As well as providing traditional port and canal development simulations, REMBRANDTINLAND can be used to accurately

reconstruct specific incidents involving collisions in order to identify the root cause and any lessons that can be learned. The simulation uses shipboard data and radar images combined with high-fidelity ship models to produce meaningful, threedimensional simulations. Voice, radar and position datasets are automatically synchronised, together with environmental data and navigational circumstances, to present a complete and seamless reconstruction of events for in-depth analysis.

BMT’s collision reconstruction team, which includes experienced master mariners, chief engineers, navigation and hydrodynamic modellers and weather experts, has the essential skills, depth of inland waterway knowledge and crucial technology to reconstruct incidents using a visual format and readily understandable process.

REMBRANDT-INLAND provides visual simulation of proposed new infrastructure. BMT ARGOSS recently provided such a simulation as part of the public consultation into development of the ports of Spijk and Tuindorp in Holland.

“I am delighted at the initial user feedback for this specialised version of the REMBRANDT manoeuvring simulator,” commented Paul Morter, REMBRANDT business line manager. “It will enable us to deliver high-quality simulations and incident investigations to the inland waterway market.”

“Having this market-focused version of REMBRANDT available to support the specialised requirements of inland waterways – whether for development or investigative purposes – will allow BMT ARGOSS to provide valuable input to a wide variety of projects,” commented Hans Veldman, ARGOSS’s highly experienced inland waterways consultant.

Continued p20

REMBRANDT-INLAND can be used to reconstruct collisions to identify the root cause and any lessons that can be learned

Spring 2015 – 17

CBS EXECUTIVE MBA IN SHIPPING & LOGISTICS

EXECUTIVE MBA IN SHIPPING AND LOGISTICS (THE BLUE MBA) Fulfil your ambition to reach the top with the world’s premier Executive MBA designed specifically for busy professionals in the shipping and logistics industry.

Work through the internet from anywhere in the world on this unique module-based Shipping and Logistics E-MBA, joining up for just 8one-week sessions spread over 22 months.

Class start: September 2015. www.cbs.dk/mbs

Executive MBA in Shipping and Logistics The leading part-time executive MBA in the world directly addressing the challenges for the maritime sector, including:

For further information please contact Irene Rosberg by e-mail: ir.mba@cbs.dk or phone: +45 3815 6007.

• Market understanding • Leadership • Information technology • Globalization

www.cbs.dk/mbs

• Environmental issues • Strategic planning

Programme Overview The programme consists of eight one-week modules, all dealing with leadership issues and personal development, plus an Integrating Strategy Project (ISP). Each module presents theories,

gives a thorough introduction to the reading material and motivates you for your independent studies.

You will study the material in between sessions and write an assignment for each module, which will be focused on a problem related to your

own business. For the ISP, topics should be chosen for their strategic purpose and integrating nature, ensuring that your organisation gains a valuable and practical analysis and directly benefits from your studies.

Pre-MBA (optional) 16-18 Sep 2015

Copenhagen, Denmark

21-26 Sep 2015

Copenhagen, Denmark

Supply Chain Management – New Logistical Challenges

30 Nov – 04 Dec 2015

Copenhagen, Denmark

International Economics and Market Analysis + Leadership

08-13 Feb 2016

Copenhagen, Denmark

(1) Ship Design (2) The Maritime Legal Framework

04-08 Apr 2016

Singapore

Operational Management and Information Technology + Leadership

20-25 Jun 2016

Copenhagen, Denmark

Investment Analysis, Risk Management and Finance

05-09 Sep 2016

London, UK

(1) International Marketing (2) Organisation + Leadership

07-12 Nov 2016

Copenhagen, Denmark

Managing Strategy and Change – Introduction to ISP Process

16-20 Jan 2017

Copenhagen, Denmark

Presentation of Industry Analysis

16-18 Mar 2017

Copenhagen, Denmark

Presentation of the ISP with Implementation Plan (oral defence)

08-10 Aug 2017

Copenhagen, Denmark

Module 00

Accounting and International Economics

Shipping as a Business and a Market Module 01

Shipping as a Business and a Market + Leadership

Understanding the Global Environment Module 02 Module 03

Focus on Maritime Issues Module 04 Module 05

Core Management Issues Module 06 Module 07 Module 08

Integrating Strategy Project (ISP/Thesis) Presentation of Company and Issue Analysis

Graduation

18-20 May 2017 12 Aug 2017

Copenhagen, Denmark Copenhagen, Denmark

Education and training

Migrant advice In response to the continuing crisis in the Mediterranean, necessitating commercial ships to rescue tens of thousands of migrants and refugees in 2014, the International Chamber of Shipping (ICS) has published a new guidance document, “Large Scale Rescue Operations at Sea”, which can be downloaded free of charge via the ICS website.

ICS secretary-general Peter Hinchliffe explained: “The shipping industry fully accepts its humanitarian obligation to assist anyone at sea whose vessel is in distress. But the scale of the crisis, involving thousands of people attempting to get to Europe in craft that are neither fit for purpose nor seaworthy, has raised real concerns about the safety and health of ships’ crews that may be involved in rescuing as many as 200 people at a time.”

The challenges involved in rescuing large numbers of people and then accommodating them onboard ship prior to disembarkation are enormous compared with conventional rescue operations. The ICS guidelines are therefore intended to help shipping companies prepare for this eventuality, while taking full of account of the safety and security of the ship should such large-scale rescues be necessary. ICS says that experience has shown that advance preparations and the development of effective procedures, supported by regular drills, will prepare masters and their crews to manage large-scale rescue operations safely and successfully.

The issues covered by the ICS guidelines include the provision of additional personal protective equipment for ship’s crew and the safe management and accommodation of large numbers of people onboard, with an emphasis on sanitation, hygiene and ship security. The guidelines also refer to the need for companies to take full account of crew welfare in the aftermath of a large-scale rescue. Useful references are made to relevant advice produced by the World Health Organization and the International Maritime Organization.

ICS also emphasises that masters should not be expected to become 20 – Spring 2015

involved in decisions about the legal status of the people they have rescued or whether they intend to apply for asylum.

“Notwithstanding the shipping industry’s legal and humanitarian obligations to rescue people in distress at sea, it remains incumbent on the governments to find a solution to the current crisis, which is placing a very difficult burden on ship’s crews and the companies that have a duty of care for them,” said Hinchliffe.

Thome initiative Leading international ship management company Thome Group has announced that it has become self-sufficient in recruiting junior officers, thanks to its highly successful in-house cadet training programme.

Launched in 2005 under Thome’s “Human Element” initiative, the Thome global cadet programme has already trained in excess of 1,350 cadets from at least 12 countries in Asia, Europe and the Far East. Currently, there are 650 cadets at various stages of training on the programme, with another 200 due to join soon as deck, engine, electrical or catering cadets.

The success of this scheme has enabled Thome Group to fill all of its 2014 junior officer vacancies from within its own pool of trained seafarers.

Michael Elwert, director of group HR, said: “We place a great deal of importance on our cadet programme, and are delighted that it is proving so successful.”

He added: “At Thome Group, we recognise the importance of providing quality training to our seafarers and the difference it makes to them and, ultimately, the performance of the

vessels they operate. We believe that training is the key to operating safe and efficient ships on greener seas. The level of training we provide is specialised and is over and above the standard recommended by STCW.” Sartaj Gill, deputy managing director (ROHQ) and head of group training, explained: “As Thome Group continues with the large-scale and rapid expansion of its fleet, the requirement for suitably trained officers to serve onboard our tankers, bulkers, gas carriers and offshore has increased exponentially.

“Our cadet programme has a robust selection process to ensure we recruit well rounded, excellent individuals who benefit from our high-quality coaching.

Our cadets are a multinational and multicultural group, fully representative of the diversity of Thome Group. The feedback we have received from our cadets is that they view our training programme as a successful highway to fulfilling their dreams and goals.”

One of the Thome global cadet programme’s most successful graduates is chief engineer Jonathan Duenas, who graduated from the very first programme in 2005 and has since become Thome Group’s youngest chief engineer. Duenas reported: “Being able to be part of the Thome cadet programme has not only given me an amazing opportunity, it has also given me a career that I’m passionate about. It shaped me to be a better decision-maker and critical thinker.”

Maritime clusters Liverpool John Moores University has teamed up with Mersey Maritime and Vestfold University College in Norway to bring together maritime clusters from the Atlantic region. The partners were invited to lead an EUfunded workshop at the Atlantic Stakeholder Platform conference in Porto to present to stakeholders their ideas to create a common platform to support innovation, research and higher skills. This was the first in a series designed to support delivery of the Atlantic Action Plan, which is led by the directorate-general for maritime policy at Portugal’s Ministry of Agriculture and Sea in partnership

We believe that training is the key to operating safe and efficient ships on greener seas. The training we provide is specialised

Education and training

with the Directorate-General for Maritime Affairs and Fisheries (DG MARE) and the European Commission.

The plan is intended to stimulate jobs and growth in the regions of the five countries bordering the Atlantic (UK, Ireland, France, Portugal and Spain) and covers three themes: investment in innovation in small to medium-sized enterprises (SMEs); research; and skills.

Ian Jenkinson, director of the School of Engineering, Technology and Maritime Operations at Liverpool John Moores University, emphasised the importance of business clusters in economic development. The experience in Norway shows that successful clusters demonstrate high levels of innovation, based on their ability to generate and share knowledge and to develop and attract skilled employees. He said: “The Liverpool City Region has one of the largest clusters of maritime businesses outside London, and over 80% of these are SMEs whose interests Mersey Maritime represents. The aim of this partnership between Liverpool John Moores University and Mersey Maritime is to develop a model for knowledgebased industrial development, where concentrations of SMEs interact effectively with institutions in business, finance and education.”

In her opening remarks to the conference, the European Commission’s director-general for maritime affairs and fisheries, Lowri Evans, emphasised the importance of projects that supported growth and jobs, particularly in the SME sector. Chris Shirling-Rooke, acting chief executive for Mersey Maritime, said: “Mersey Maritime was very fortunate to host a visit to Merseyside

by Lowri Evans in June 2014, where she met with maritime-sector SMEs that have benefited from EU-funded support. Evans heard at first-hand how EU-supported projects such as Mersey Maritime’s sector development programme have successfully led to business growth and job creation.” He added: “Huge infrastructure projects on Merseyside, including Liverpool2, the new deep-water container terminal at the Port of Liverpool, which will open in late 2015, are set to create around 20,000 new jobs in the next decade, so ensuring

the workforce has the right skills set to meet that demand is absolutely crucial.”

The combination of Mersey Maritime, representing the maritime cluster, with its record of supporting businesses, and Liverpool John Moores University, with its long established reputation in maritime education and research, provides a good basis to lead the project.

The team plans to hold a follow-up workshop in March to move the project forward to a full funding bid.

Enclosed spaces Videotel, in conjunction with Mines Rescue Marine, has launched an innovative and unique Enclosed Space Management System. It is designed to help effectively assess, audit and manage the safety of enclosed spaces onboard ship and combat the number of accidents and fatalities that all too often occur when problem areas are overlooked.

Beneficial to crew, contractors, surveyors, port state inspectors and office staff, the companies say this is currently the only computer-based system available that enables vessels and installations to comply with the International Maritime Organization’s (IMO) adopted Resolution A.1050(27) “Revised Recommendations for Entering Enclosed Spaces Aboard Ships”, Section 3 – Safety Management for Entry into Enclosed Spaces, as well as the latest International Convention for the Safety of Life at Sea (SOLAS) recommendations for enclosed spaces.

It provides an auditing process to follow, allowing safety risks to be

identified and solutions put in place.

All crew can contribute to this ‘living’ system by adding their own comments, photographs and experiential data to each space record, ensuring that knowledge is retained and lowering the risk of safety being affected by crew changes. It also provides ready access to all essential information needed to enter and work within an enclosed space as safely as possible. This can be viewed ashore as well as onboard, and a report can be sent directly to any third party by email, as required. All data entered is stored and hosted, and the system itself is updated at regular intervals to reflect changes in laws and regulations.

The Enclosed Space Management System’s auditing process allows for the assessment of internal spaces, entry points and rescue requirements, eg the size of manholes; difficulty of entry; ability to rig a man riding winch for rescue purposes; availability and effectiveness of communications; dimensions of the space; internal design features; and the ability to operate while wearing breathing apparatus.

It also prompts the user to record the manpower and equipment requirements for both entry into and, potentially, rescue from a space. On completion of the audit, a simple traffic-light warning system is provided, based on the degree of difficulty to get into, operate inside and rescue from each space.

Nigel Cleave, chief executive of Videotel, says: “We are very proud of the Enclosed Space Management System, which, we believe, will make

Continued p24 Spring 2015 – 21

Education and training

a meaningful contribution to industry efforts in the prevention of needless loss of life. As a further extension of its allencompassing programmes on enclosed spaces, Videotel is pleased to be able to take this unique step in helping the maritime industry take a proactive approach towards a significant reduction in issues involving enclosed spaces.”

Raal Harris, director of e-learning and digital media at Videotel, explained: “We have spent two years working with Mines Rescue Marine researching and developing the Enclosed Space Management System. The Mines Rescue Service has a vast amount of experience and knowledge, as well as specialist skills in rescuing mineworkers from underground. Combined with Videotel’s expertise in training and e-learning, this has resulted in a practical, easy-to-use system designed to become an essential part of everyday life in shipping.”

Adam Allan, managing director of Mines Rescue Marine, states: ‘’This is the culmination of a two-year project

24 – Spring 2015

initiated by our realisation that one of the major problems on ships and offshore installations was the lack of detailed, audited information on enclosed spaces, and a specifically designed depository for it. We felt that if we could provide a facility that shares information with not only crew members but others working onboard, such as surveyors and contractors, it would considerably increase the safety of people entering and working in these spaces. Together with our partner Videotel, we developed the Enclosed Space Management System, the only such system in the world. We believe it will change the way in which enclosed spaces are dealt with forever.”

Power time video Xantrex, which is credited with designing some of the best-known inverters and chargers for marine, RV and commercial applications, has launched a video series for the industry. As a pioneering brand in onboard AC power technology, the team at Xantrex strongly believes in

educating the industry on the selection, installation and use of AC power products. In the past two years, Xantrex has built a massive repository of how-to and technical information in print and video formats. This complements the successful “Tech Doctor” programme, designed primarily for end-users.

“We have done a lot of work for industry education but we need to do more. From our own research and experience at consumer and trade shows, we have realised that we need to communicate consistently about some of the most commonly encountered technical, troubleshooting and installation challenges. For example, a vast majority of people do not know that UL458 with marine supplement is a regulatory standard for electrical products specific to marine applications.

Very few products meet this standard.

The new video series continues our legacy and we are proud of it,” said John McMillan, director of sales for Xantrex branded products at Schneider Electric.

Bunkering

ECA angle Gary Byers, head of marine at Certas Energy, reviews fuel prices in 2015, the emission control area situation and the effect of cheaper oil on the marine industry

Above: Gary Byers, head of marine at Certas Energy

“

As we witness the Organization of the Petroleum Exporting Countries (OPEC) continuing to flood the market, and the price of oil plummeting to its lowest in six years; it seems investors in shale gas have been hit hard and organisations across the energy industry have been left in a state of uncertainty.

“After OPEC’s secretary-general, Abdullah al-Badri, commented that the price may have found a bottom, it was somewhat relieving to see oil costs steady at just above $48 a barrel. However, banks are still predicting that a full recovery may take years, with UBS forecasting 60 months for the price of crude oil to return to pre-collapse levels.

“Despite stormy waters in the world of oil and gas, at Certas Energy we think it’s looking likely that shipowners and operators in the marine sector may start to see some financial gains from the latest market developments, if only in the short term.

“Before the 2014/15 plunge in global oil prices, many of our customers were already worried about January’s emission control area (ECA) regulations coming into effect. The high costs of scrubber retrofitting, ECA premiums and doubts around compliant fuel availability were all expected to lead to huge increases in shipping expenses.

“Those who started the process of switching from heavier fuels to marine gas oil (MGO) were facing a potential 75% increase in their bunkering costs.

However, despite the industry’s initial uproar, we’re seeing that the environmental regulation’s impact on marine fuel costs will be somewhat mitigated by the sudden drop in the price of crude.

“At Certas, throughout last year, we witnessed a notable increase in customer enquiries and orders for distillate fuels. We’re expecting this trend to continue this year.

We believe that we will start to see

a steady and general shift away from heavy marine fuels with an increasing uptake in MGO and distillate fuels along with a possible price increase in the near future.

“In order to meet our customers’ increasing demands for MGO, we continue to invest in extra storage at numerous bunkering locations around the UK. In the North-East of England, one of our newest bunkering hubs is offering North Sea marine traffic low-sulphur MGO via pipeline and truck methods.

“With a greater range of delivery options, and being readily able to offer our customers alternative lubricants, we’re able to support our clients by keeping their costs low and our prices competitive during the regulatory and sector challenges in 2015.”

IBIA says bunker quality improving Bunkers are showing an improvement in quality, thanks in part to a concerted campaign by the International Bunker Industry Association (IBIA) to get players from across the marine fuels supply chain to raise their game. Addressing an audience of over 1,000 marine fuel buyers, suppliers and traders at the association’s annual dinner in London in February, IBIA chairman Jens Maul Jørgensen said that the early results for 2015 show that there has been a marked improvement in bunker fuel quality, with 8% of samples found to be offspec compared with 10% in 2014. These results are based on samples taken by testing company Intertek ShipCare.

“Test figures for standard submitted samples during 2014 show around 10% of all samples were deemed to be offspecification based on a single test result with respect to the fuel grade purchased.”

He added: “Test figures for 2014 also showed a significant change in purchasing patterns, with a steady increase in the number of distillate fuels being tested.

The number of distillate samples

The environmental regulation’s impact on fuel costs will be somewhat mitigated by the sudden drop in the price of crude

Spring 2015 – 25

Your marine fuel partner

Certas Energy can offer a complete marine fuel and lubricants package.

Distillate, IFO and MGO grade fuels and lubricants No minimum or maximum order requirement Bespoke ordering in litres, cubes or MT Payment accepted in USD, GBP or Euros Over 150 depot locations nationwide Ex-pipe facility in Aberdeen and the Port of Tyne Barging facility on the Thames IFO grades from Dundee Coverage across the UK and Ireland

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Bunkering

being submitted for testing rose by 15% in 2014 compared with 2013.”

The IBIA chairman noted that the drop in oil price has meant that there is now less incentive for refiners to blend down their products and that there has been an increase in suppliers using the ISO2010 and ISO2012 specifications.

Improving fuel quality has been an important issue for IBIA, as the quality of bunkers delivered to ships is under increasing scrutiny. In October, the 67th session of the International Maritime Organization’s Marine Environment Protection Committee agreed to establish a correspondence group to develop draft guidance for assuring the quality of fuel oil delivered for use onboard ships, and to consider the adequacy of the legal framework in the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI for assuring the bunker quality. Tested samples that were off-spec reached an all-time high in 2013, with a quarter not reaching the required standards.

Jørgensen also congratulated the marine industry’s response to the collapse of OW Bunker in October, enabling many of the company’s former employees to quickly find new positions.

“IBIA went out [offering] free membership to the now unemployed

OWB staff; IBIA Asia arranged information meetings, and, thanks to the industry support, the majority of OWB staff found new employment: it shows that we are one big family.”

Held during International Petroleum Week, the IBIA annual dinner 2015 was a sell-out, attracting 1,069 participants.

The event also saw honorary membership awarded to one of IBIA’s founding members and the association’s first chairman, Doug Barrow.

Earlier, IBIA held its annual general meeting, at which the election of Patrick Holloway (Weber Wentzel), Nigel Draffin (LQM) and John Sterling (World Fuel Services) to the board were announced. They replace Simon Neo, Ciric Cheung and Trevor Harrison.

EMSA guidance The International Association of Independent Tanker Owners (Intertanko) welcomed the justcompleted European Maritime Safety Agency (EMSA) sulphur inspection guidance supporting the implementation of Council Directive 1999/32/EC (the EU sulphur directive).

EMSA’s guidance aims to support a harmonised approach for the inspection of ships regarding the sulphur content of marine fuels, ascertaining their

compliance, identifying non-compliance and applying control procedures for the enforcement of the directive.

“The guidelines are a result of extensive work under the European Sustainability Shipping Forum (ESSF) to ensure enforcement of the EU sulphur directive,” notes Intertanko managing director Katharina Stanzel. “We welcome these guidelines and commend the efforts to harmonise EU member states’ approaches to ships.”

The EMSA guidelines suggest that proof of fuel compliance should be taken both at delivery to the ship and also onboard, taking samples of fuels used by the ships.

Intertanko particularly supports sampling at the point of delivery to ship, because it is related to the enforcement of Article 4b.3 of the EU sulphur directive, which states: “Member states shall ensure that gas oils are not placed on the market in their territory if the sulphur content of these marine gas oils exceeds 0.10%” by mass”.

With regard to the new fuel sampling in ships’ engine rooms, Intertanko welcomes standardisation of such a practice and the request for quality evidence from laboratories running tests on fuel samples.

“Intertanko, which participates in the ESSF activities, is pleased to see harmonised enforcement, and advocates a balanced approach, not only implementing control measures on ships but also ensuring fuels delivered to ships are ECA-compliant,” said Ian Harrison, senior technical manager of Intertanko.

Intertanko is pleased to see harmonised enforcement, and advocates a balanced approach Above: Intertanko managing director Katharina Stanzel

Spring 2015 – 27

Bunkering

Exhaust gas cleaning CR Ocean Engineering (CROE®) announced an order from Bore (Finland) for one of the CROE® stateof-the-art exhaust gas cleaning systems.

The systems will use seawater to reduce sulphur dioxide emissions (SO2) from the main engine (approximately 16MW) of Bore’s Seagard ro-ro container vessel.

The system is scheduled to be online in the late spring of 2015. Once installed, the system will allow the vessel to meet low-sulphur emission control area (ECA) requirements even when burning high-sulphur heavy oil. The CROE® design has special features that allow the ship to efficiently reduce stack sulphur emissions even when operating in the lowest alkalinity/salinity waters of the eastern Baltic.

Nick Confuorto, chief operations officer of CR Ocean Engineering, said: “Scrubbers are our primary business.

We have been designing and supplying scrubbers since the 1950s and have a proud history of success. CROE® has been blessed with several contracts in 2014 and we thank the industry for such warm acceptance. Our dedication to customer satisfaction and the highest technical standards have helped us greatly throughout our history and I am glad to see that the shipping industry also values such standards. We bring our extensive experience and advanced technology to our customers to provide them with a reliable and cost-effective alternative to higher ECA-compliant fuel costs. Our customers can become more competitive by lowering their fuel costs. We are pleased and proud that Bore Ltd has entrusted us with such an important project.”

From 1 January 2015, all ships that operate in the North American and European ECAs are required to switch to 0.1% sulphur fuel or install scrubbers to meet the equivalency standard for SO2. As an alternative, the International Maritime Organization (IMO) has allowed shipowners to install scrubbing systems as an equivalent to fuel switching.

CROE® systems reduce the SO 2 content in the engine flue gas to below that found in a 0.1% sulphur fuel and therefore meet the equivalency requirement. The small dimensions of the CROE® scrubbing system make it

a perfect solution for newbuilds or as a retrofit to existing ships. The system is designed to replace existing silencers and does not require a bypass. It is an excellent choice for cruiseships, ferries, bulk carriers, containerships, ro-ro and others.

CROE® offers its scrubbing system as open loop (a once-through scrubber using seawater to reduce SO2); closed loop (a recirculating scrubber design that utilises an aqueous solution to reduce SO2); or hybrid– a combination of both designs.

BIMCO bunker clause The Baltic and International Maritime Council (Bimco) has launched the bunker non-lien clause, aimed at reducing bunker suppliers’ reliance on ship arrest as a means of resolving claims for bunkers ordered but not paid for by time charterers, often owing to bankruptcy.

If a time charterer goes out of business during the currency of a charter, owners can sometimes face a ‘double whammy’ of loss of hire for the balance of the contract and then subsequent arrest of their vessel by bunker suppliers pursuing a claim for unpaid bunkers.

Bunker suppliers are able to arrest a vessel (in some, but not all jurisdictions) by enforcing a right of lien or retention over the bunkers for the money they are owed, even though the owners, under a time charter, are not a party to the bunker supply contract.

The bunker non-lien clause is an attempt to change this process by requiring time charterers to notify their suppliers prior to purchasing bunkers that they will be bought solely on their own account, not the shipowner’s, and that no lien will arise against the vessel.

Although bunker delivery notes are frequently stamped by masters with a statement that the bunkers have been purchased by the charterers and that there is no lien against the vessel, this notice is often ineffective because the delivery of fuel has already taken place.

Grant Hunter, chief officer of legal and contractual affairs at Bimco, explained: “This clause acts as a useful safety-net for shipowners because solid time charterers should have no problem agreeing it –

they fully expect to pay for the bunkers they order.

“If the financial standing of a charter is in doubt, they may be more reluctant to accept the responsibilities and liabilities imposed by the clause – acting as a warning flag to shipowners.

“Ultimately, if a charterer fails to comply with this clause, a master has the right to refuse to take delivery of the bunkers – so it is a provision with some teeth.”

ExxonMobil expansion ExxonMobil Marine Fuels & Lubricants has expanded availability of its marine gas oil (MGO) to include the key port of Le Havre, France. This expansion is part of the company’s offer to help vessel operators meet the 0.10% sulphur limit in emission control areas (ECAs), which came into force on 1 January 2015.

ExxonMobil is the first supplier to make MGO available to vessel operators in Le Havre via dedicated barge delivery. This provides faster, more efficient refuelling than truck deliveries, and ensures that the required fuel volumes are available for vessels with small and big stem sizes, starting from 40 metric tonnes.

“We have increased availability of MGO to help marine operators comply with the new ECA legislation,” said Luca Volta, general manager, Europe, Africa and the Middle East, at ExxonMobil. “By offering MGO at Le Havre via barge delivery, marine operators will benefit from a faster and more efficient fuel delivery process.

“ExxonMobil now supplies MGO at more than 40 ports worldwide, providing marine operators with our expertise, products and services on a global level.”

The expansion of MGO availability follows the recent launch of ExxonMobil Premium HDME 50, a new category of marine fuel with the low-sulphur content associated with MGO but the higher flashpoint and lower volatility properties typically found in heavy fuel oil (HFO). The new fuel has been formulated to meet the 2015 ECA sulphur limit and can help marine engineers to safely and efficiently operate engines and boilers.

Spring 2015 – 29

Bunkering

Dual-fuel engines A specialised liquefied natural gas (LNG) bunker vessel to be built at the STX Offshore & Shipbuilding Company yard in South Korea on behalf of Shell will be powered by Wärtsilä DF dual-fuel engines. The ship will be used to deliver gas to LNG-fuelled vessels in North-West Europe. The newbuild contract is in direct response to the increasing acceptance by the shipping industry of LNG as a marine fuel. The engine order was placed with Wärtsilä in December 2014.

Wärtsilä has been at the forefront of the trend towards LNG-fuelled shipping. Its industry-leading dualfuel engine technology and gas supply and control systems have been largely responsible for the viability of gas as a fuel for ships. The environmental and economic advantages that LNG has over conventional diesel fuels are seen as being crucial to the future development of the global shipping industry.

The new Shell vessel will be based at the port of Rotterdam in the Netherlands, and will load from the new break bulk terminal and jetty to be constructed by the Gas Access to Europe (Gate) terminal. It will also be sea-going and able, therefore, to bunker customers at other locations.

It will be powered by three 8-cylinder Wärtsilä 20DF dual-fuel engines capable of operating on either gas or diesel fuels. The engines are scheduled for delivery in spring 2016.

“This new specialised vessel is an important step towards LNG becoming the fuel of choice for shipping in Europe, and Wärtsilä is pleased and honoured to cooperate with Shell and STX in this project. LNG eases compliance with both the new and anticipated future International Maritime Organization (IMO) environmental regulations, and we are proud that our development of technologies throughout the gas chain is of increasing value to the marine sector,” says Aaron Bresnahan, vice-president, sales at Wärtsilä Ship Power.

“This specialised LNG bunker vessel is a pioneering new design,” said Dr Grahaeme Henderson, vice-president, shipping and maritime, at Shell.

“It will have the capacity to carry 6,500 cubic metres of LNG fuel, and will be highly efficient and manoeuvrable. It will be able to load from big or small terminals and to bunker a broad variety of vessels. We worked closely with our customers on the specifications of this exciting new bunker vessel and will use cuttingedge technology. Shell is proud to be leading in the development of LNG fuel in shipping.”

Wärtsilä’s advanced dual-fuel technology was first launched in the early 1990s for use in land-based power plant applications. The first marine installation came a decade later. The technology enables the engine to be operated on either natural gas, light fuel oil (LFO) or heavy fuel oil (HFO), and switching between fuels can take place

seamlessly during operation, without loss of power or speed. This ensures safety and continuous installation operability.

Wärtsilä DF engines are designed to have the same output, regardless of the fuel used.

Wärtsilä’s dual-fuel engines provide superior propulsion efficiency, while the clear environmental advantages that operating on gas allows is another factor in the success of this technology. When operating in gas mode, the nitrogen oxide (NOx) emissions are at least 85% below those specified in the current IMO regulations, and CO2 emissions are some 25% less than those of a conventional marine engine running on diesel fuel.

Additionally, the sulphur oxide and particle emissions are negligible at almost 0%.

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The Maritime and Port Authority of Singapore (MPA) has revoked the bunker supplier and bunker craft operator licences of Hong Fatt Oil Trading Pte Ltd and Tankoil Marine Services Pte Ltd with effect from 9 February 2015. The two companies are no longer allowed to operate as bunker suppliers and bunker craft operators in the Port of Singapore.

As part of MPA’s ongoing regulatory efforts to ensure the safety, reliability and quality of bunker supplies in Singapore, routine checks were conducted last year on Hong Fatt Oil Trading Pte Ltd and Tankoil Marine Services Pte Ltd. MPA’s separate investigations into the two companies revealed discrepancies and wrongful declarations in the records kept onboard their bunker tankers.

There were also incidences of transfers of bunkers between bunker tankers that were carried out without MPA’s approval. MPA has therefore decided to revoke the companies’ licences as they had breached the terms and conditions of their bunker supplier and bunker craft operator licences.

MPA reminds all licensed bunker suppliers and bunker craft operators to adhere strictly to the terms and conditions of their bunker licences. MPA will take firm action against any licensee who has acted in contravention of their licences, including suspending or revoking their bunker licences, as appropriate.

Above: Wärtsilä takes dual-fuel technology to next level by introducing Wärtsilä 46DF engine

30 – Spring 2015

Bunkering

New Wärtsilä order

and to break through ice up to two Five new Arc 7 design ice-class liquefied metres thick. This requires dramatic natural gas (LNG) carriers being built variations in engine load within a at the Daewoo Shipbuilding and short timespan, and the Wärtsilä Marine Engineering (DSME) yard engines were considered as being in South Korea will be powered by a the most suitable for these extremely total of 30 Wärtsilä 50DF dual-fuel challenging conditions.

“Altogether, Wärtsilä has been engines. The vessels will operate in arctic conditions to serve the Yamal contracted within the past 12 months LNG project in Northern Russia. to supply 90 dual-fuel engines to The order was placed in January with 15 of these Arc 7 ice-class LNG Wärtsilä’s joint venture company, carriers for the Yamal project. This Wärtsilä-Hyundai Engine Company, is a clear endorsement of the very which will also build the engines in high efficiency and reliability of Wärtsilä machinery, which owners South Korea.

Each of the LNG carriers will be and shipyards around the world fitted with four 12-cylinder Wärtsilä recognise. It is a pleasure to cooperate 50DF engines and two 9-cylinder with DSME and the vessel owners Wärtsilä 50DF engines. The engines in meeting the demands of arctic will primarily utilise LNG as fuel, operations,” says Lars Anderson, vicebut are also capable of running on president, Wärtsilä Ship Power.

Yamal LNG is a Russian project, conventional marine diesel fuels.

When operating in arctic conditions, which, by the end of 2017, is expected the vessels will be required to to produce 16.5 million tonnes of LNG handle ambient temperatures as per year for shipment to European, MarinhaTotems_178x128.pdf 1 17-01-2014 11:05:35 low as minus 50 degrees Celsius, Asian and South American customers.

GAC appoints new trader GAC Bunker Fuels has strengthened its bunker trading team in Singapore with the appointment of Rafe Liam. He joins Steve Chen and Casey Han in the world’s biggest bunkering port, and brings the GAC Bunker Fuels global team to 34 in total.

Liam brings to his new role more than 10 years of experience in the bunker industry and an extensive portfolio of contacts throughout the Asia Pacific area. His prime focus is on gaining new oil and gas customers and expanding the supplier network.

The latest addition to the GAC Bunker Fuels network comes after the successful renewal of its ISO9001 audit and the addition of two new bunker traders based in Dubai.

Nicholas Browne, global director at GAC Bunker Fuels, says: “2014 was a very fruitful year for us. We are building on that growth with the addition of new traders covering strategic locations to make 2015 another positive year for GAC Bunker Fuels.”

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Tel.: +351 217 240 654 Fax: +351 217 242 957 email: bunkers@galpenergia.com

Spring 2015 – 31

Trading

Talking trade Players are looking to new markets

C

leartrade Exchange (CLTX), the Singapore regulated futures exchange for commodity derivatives, and Deutsche Börse, one of the world’s leading data and technology service providers, have announced a collaboration that gives all CLTX customers access to Deutsche Börse Group’s global trading architecture, M7.

In this move, which sees further synergies between the two companies, CLTX offers its market participants state-of-the-art technology, improved broker and trader connectivity options and functions, extended market functionalities and outstanding efficiencies. As part of Deutsche Börse’s ‘7 Market Technology’ global IT architecture, M7 is the leading trading platform for energy and commodity markets.

Richard Baker, chief executive of CLTX, commenting on this new development, said: “Moving CLTX to M7 is a part of our strategy to bring advanced trading strategies, increased liquidity, improved ease of access and robust high availability technology for the global commodities market. Market participants have demanded trading styles that are common to the listed and equities markets for some time now and we are delighted to be addressing those needs with the Deutsche Börse M7 solution.

While we focus on enabling new trading opportunities, we do this mindful that we must also satisfy the increased demands from regulators and market participants on availability, regulatory compliance and trade assurance. The combination of M7 and the CLTX CCP [Central Counterparty Clearing House] Highway infrastructure offers a truly unique ‘Best Execution’ and ‘Trade Assurance’ marketplace.”

Willy Suter, head of market solutions at Deutsche Börse Market Data + Services, said: “M7 is our leading global IT offering designed for the needs of market participants. We believe this best-

Above: Richard Baker, chief executive, CLTX

in-class technology, and our expertise in operating exchanges for various asset classes, will strengthen Cleartrade’s efforts in building a liquidity network in the commodity markets.”

As part of this cooperation, Deutsche Börse will host and operate the M7 platform, whilst Cleartrade Exchange will organise and maintain market operations for the exchange and partner marketplaces, offering straight-through-processing (STP) to multiple clearing houses, trade reconciliation and reporting services.

Trading participants will be able to access the platform via the M7 front-end ComTrader and also via partner independent software vendors from the end of April 2015.

Global clearing house LCH.Clearnet announced in December that it had classified its cleared over-the-counter (OTC) commodities derivatives contracts as block futures. LCH. Clearnet launched this initiative in response to demand from the market and clearing members. By using a regulated trading venue, market participants trading these futurised products will benefit from increased efficiency and transparency, reduced collateral costs and mitigated risk.

Baltic Exchange Derivatives Trading Limited (Baltex) and CLTX, both regulated trading venues, will be the first platforms to register dry bulk forward freight agreement (FFA) trades. CLTX

Market participants have demanded trading styles that are common to the listed and equities markets for some time

Spring 2015 – 33

Filler AD

Trading

will also process iron ore, steel, coal, fertiliser and container trades. Offering a choice of trading venues demonstrates LCH.Clearnet’s commitment to working with multiple exchanges to provide optimum choice to its members.

Isabella Kurek-Smith, director and head of freight and commodity markets at LCH.Clearnet, said at the time: “Improving efficiency is frequently at the heart of regulatory change. Teaming up with Baltex and CLTX means that our members and customers benefit from the efficiencies associated with using regulated trading venues. This is a further example of our commitment to provide an open and horizontal clearing model to our members.”

Paul Stuart-Smith, chief operating officer at Baltex, said: “As an FCA regulated platform, Baltex has a high level of regulatory compliance. Most of the major FFA brokers will be using Baltex on behalf of their clients, and we are delighted to be working with LCH. Clearnet to provide an independent service which is of real value to the freight derivatives industry.”

Baker said: “This project extends the collaboration between CLTX and LCH. Clearnet, bringing real value to our clients, who seek efficient and unencumbered integrated trading, broking and clearing solutions. The classification of futures and our STP link with LCH.Clearnet extends trading opportunities, removes risk and enables regulatory certainty for our global client base.”

In 2014, Rotterdam became the first European port to handle more than 3 million teu (20ft equivalent) container units going to or coming from China.

Port of Rotterdam Authority chief executive Allard Castelein announced this on 3 February, during the first quarterly meeting of the Rotterdam Port Promotion Council (RPPC). At the meeting, he analysed the throughput figures for 2014 and indicated trends for a large group of port entrepreneurs.

In 2008, Hamburg, in northern Germany, still handled the most ‘China containers’: 2.6 million against Rotterdam’s 2.2 million. The German port suffered greatly during the crisis of 2009, whereas Rotterdam’s throughput declined only moderately. Since then,

Rotterdam has been the main European port for China containers, though the lead on Hamburg remains small. In 2013, Hamburg handled 2.3 million teu; Rotterdam handled 2.4 million teu.

Anticipating the definitive figures, the Port of Rotterdam Authority expects an increase of at least 10% over 2014.

The Chinese share of Rotterdam’s throughput will be significant and is likely to increase again in 2015. There are currently 18 container services per week between Chinese ports and Rotterdam.

With an annual freight volume of 199 million tonnes, the port of Antwerp is the second largest in Europe. Its central location in the heart of Europe makes it possible to serve a huge consumer market very quickly: an essential advantage for exporting countries that target the European consumer.

To help convince such countries of the unique position occupied by Antwerp in the European port landscape, the Antwerp port community regularly organises missions abroad. A visit to India took place recently. This country generated a record 5 million tonnes of cargo in Antwerp in 2014.

The Port of Antwerp has long been convinced of the economic growth potential of India. In 2006, the port authority appointed its first full-time representative in the city of Mumbai.

The western Indian cities of Mumbai, Pune and Nasik together form a ‘golden triangle’, which, with industries such as IT services, carmaking, manufacturing and biotech, is one of the country’s most important economic regions. Mumbai is one of the top 10 commercial cities in the world. Antwerp Port Authority held an investment seminar here on 12 February, following on from one in Pune on 10 February.

“Exporters view ports as just one link in the overall supply chain, with the main criteria being efficiency and reliability. In other words, as a port you have to ensure that the goods are handled in a transparent way and that they reach the end customer quickly,” explains Antwerp port alderman Marc Van Peel, who is taking part in the mission.

With the Antwerp Port Community System, which offers a network of

solutions for electronic communication within the supply chain, the port is able to offer a unique tool to ensure this happens. At the end of 2014, the port of Antwerp in collaboration with the Association of Multimodal Transport Operators of India (AMTOI) launched the India Nation platform to facilitate contacts and exchange of information between Antwerp and Indian forwarders, shippers and logistics companies, thus streamlining the flow of goods through the port of Antwerp.

BP to sell oil storage terminal BP announced last month that it intends to sell its 950,000 cubic metre oil storage terminal in Amsterdam.

The BP Amsterdam Terminal, which has been owned and operated by BP since 1997, acts as an international trading hub for supplying fuels to and from Europe. The terminal also supplies diesel and gasoline to local and regional petrol stations.

Hendrik Muilerman, managing director of BP in the Netherlands, said: “Following a strategic review of our portfolio, we have concluded that it is in the long-term interests of the Amsterdam Terminal and its staff for it to be owned by an entity that is better placed to invest in its future. We will continue our trading operations and retail fuels business activities in the region by using third-party facilities rather than operating our own.”

Spring 2015 – 35

Green Issues

Green approach Companies have been exploring a range of new initiatives to become more eco-friendly

W

ith new low-sulphur requirements in emission control areas already in place, the ratification of the ballast water convention is moving closer.

As the new emission control areas come into force, Gothenburg has fitted sniffer technology to roust out offenders.

Chalmers University of Technology, in collaboration with the Port of Gothenburg, has fitted a ‘sniffer’ at the entrance to the port. The port now hopes that this technology will prove effective.

With stricter emission regulations for ships introduced in the Baltic Sea, North Sea and English Channel from 1 January, “the potential for control was thought to be limited, but here at the Port of Gothenburg the technology is already in place to sniff out vessels that are cheating with marine fuel”, said Edvard Molitor, senior manager, environment, at the Port of Gothenburg.

The sniffer has been developed by Chalmers University of Technology with support from innovation agency Vinnova, the Swedish Environmental Protection Agency and Gothenburg Port Authority.

Johan Mellqvist, associate professor at the Department of Earth and Space Sciences at Chalmers University of Technology, said: “We have worked for almost 10 years to produce methods to monitor compliance with environmental regulations at sea, both from fixed measuring stations such as this and from aircraft. We have monitoring technology that is unique and we are simply waiting for the go-ahead from the Swedish authorities before we can begin using the technology actively.”

The sniffer is about the size of a small fridge. The yellow box is 45cm high and contains hightech equipment that analyses the sulphur content in the exhaust plume. The sniffer measures the

sulphur and carbon dioxide content in the gas emissions, thus revealing the sulphur content in the fuel.

Using sniffer technology, more than 5,000 exhaust plumes have been measured in recent years at the entrance to the Port of Gothenburg. Following extensive trials, the technology is now ready for use to indicate if a ship is cheating with its fuel.

Molitor explained: “Serious shipping companies are actively looking for measures to ensure compliance with the sulphur directive. The industry is concerned that certain other parties will not follow the rules and that it will lead to a distortion in competition. Our hope is that the technology will be used to monitor compliance with the sulphur directive.”

The port has been a pioneer in encouraging green shipping, and will henceforth use two different environmental indexes as a basis for the reward system – the Environmental Ship Index (ESI) and the Clean Shipping Index (CSI). In the new port tariff for 2015, ships that are classified by ESI and have 30 points or more will receive a 10% discount based on the gross tonnage of the vessel. Ships that achieve the CSI green standard will also receive a 10% discount.

Classification society ClassNK has granted type approval in near record time to the new 28AHX-DF dual-fuel engine built

by Niigata Power Systems Co. While the adoption of emerging maritime technologies can prove challenging, partly because of the time required to gain approval, ClassNK’s streamlined approval process allowed it to complete the design approval, trial operational testing and the overhaul inspection of the 28AHX-DF in just a couple of months before granting type approval on 24 December.

General manager of ClassNK’s machinery department Yukihisa Shibata said: “At ClassNK, we aim to promote the use of innovative technologies for the benefit of the

At the Port of Gothenburg the technology is already in place to sniff out vessels that are cheating with marine fuel

36 – Spring 2015

GREEN Issues

greater maritime industry. Our highly efficient approval process minimises the time necessary for new products to gain approval, making it easier for ship manufacturers to implement new technologies into ship designs as soon as they emerge.”

Operating on both diesel fuel and liquefied natural gas (LNG), the engine will help mitigate environmental loads. It will also assist shipowners and operators in meeting the stringent Tier III nitrogen oxide (NOx) regulations in emission control areas, which the International Maritime Organization (IMO) is set to bring in on or after 1 January 2016. These reduce permitted NOx emission levels by more than 75% from the current Tier II levels.

The engine has a maximum rated power per cylinder of 320kW, with a maximum rated speed of 800 min-1, a cylinder bore of 280mm and a 390mm stroke.

Mark Riggio, product manager at Hyde Marine, said he continues to hear positive remarks from shipowners that the Ballast Water Convention will ratify at some time in the near future. As a result, many owners have become more keenly interested in retrofits recently and are conducting serious inquiries into what differentiates systems and which suppliers have real experience.

“From the US, we hear significant confusion about the interplay between the US Coast Guard (USCG) and the Environmental Protection Agency (EPA), which has led hundreds of operators to accept USCG compliance extensions only to be put in the position of violating their EPA Vessel General Permit and being obligated to report the same publicly. Of course, owners are anxious about this. Hyde Marine counsels operators to consider meeting their US compliance dates by installing and operating an Alternate Management System (AMS) from a reputable supplier.”

According to Riggio: “Hyde Marine recognises why the US established its own process for type approving systems and why it felt the need to be more definitive and restrictive as to testing methods.

Although we have been prepared and interested to undertake US type approval testing since the US Regulation

promulgated in 2012, we have been in a holding pattern waiting for the US to recognise internationally approved and scientifically proven methods of establishing system efficacy. We have worked with the Coast Guard as well as with the EPA and its Environmental Technology Verification (ETV) Program tech panel to satisfy the Coast Guard’s need to validate these test methods, but this process has significantly delayed the Type Approval testing of UV systems under the final rule. We are planning to go ahead with testing in 2015, with the expectation that this issue will be resolved shortly.”

Hyde Marine would have preferred the US to ratify the IMO Convention rather than creating its own standard with a test method that does not work for UV systems, Riggio adds.

Are there any concerns about the future testing procedure for ballast water once the IMO convention is ratified?

“Not at Hyde. It is our expectation that any changes to IMO testing requirements will be likely to mirror US type approval testing, so testing for US type approval will cover any adjustments to the G8 test protocol.

“Ballast water treatment systems will continue to evolve as we learn more about their operation on ships. Hyde

Marine continually uses the lessons learned from our 200 systems in operation to drive product refinement and insure the reliability of our product.”

So are there too many systems on the market for owners? What is Hyde Marine’s view about how the market will develop in the future?

“Owing to the delays in the IMO ratification and the issuance of extensions by the US Coast Guard, the market is getting squeezed into a shorter and shorter timeframe. As such, it is necessary to have many manufacturers available to satisfy the market demand that some anticipate will peak at about 14,000 systems per year. Once the market matures, manufacturers will consolidate or fall by the wayside, and a select group of strong companies will remain around each of the core technologies.”

Are there any gaps in the market segment for ballast water treatment systems that could bring further opportunities for Hyde Marine?

“Hyde has had significant and broad success thus far and we are particularly well positioned in our core market segments.

“As the market matures and consolidation approaches, we will most likely expand into adjacent products to maintain growth going forward.”

Spring 2015 – 37

corporate viewpoint

Hyde Marine Inc Thirty years on, you can still benefit from Hyde Marine’s pioneering spirit Hyde Marine, Inc. is a world leader in ballast water treatment systems (BWTS), designed to control the spread of non-indigenous aquatic organisms. Owners and operators committed to operating their vessels in a responsible, sustainable, and economical way rely on Hyde Marine to provide an International Maritime Organization (IMO) type approved and US Coast Guard (USCG) alternate management system (AMS) approved solution to maximise their ship’s environmental compliance.

Recognising the environmental need, Hyde Marine became a pioneer in early ballast water research, and continues its position as a technology leader and as an integral part of Calgon Carbon Corporation’s UV Technologies division. The company has more than 30 years’ experience in diverse water treatment solutions and ultraviolet treatment technology.

Through its Hyde GUARDIAN® BWTS, Hyde Marine was one of the first suppliers of a safe, chemical-free and efficient filtration and UV disinfection solution to receive IMO type approval from Lloyd’s Register on behalf of the UK’s Maritime and Coast Guard Agency in April 2009. Hyde Marine was in the first group of companies to receive AMS approval from the US Coast Guard on 15 April 2013. Additionally, the company installed one of the first treatment systems onboard a ship – the Coral Princess. This was subsequently the first BWTS accepted into the US Coast Guard’s Shipboard Technology Evaluation Program (STEP) and was the company’s first retrofit installation. Building upon the more than 12 years of shipboard experience, Hyde Marine now leads the ballast water treatment market in retrofit installations, with over 50 retrofit units installed and operating.

With more than 400 systems sold, the Hyde GUARDIAN BWTS is suitable for a broad range of treatment requirements and can be installed in newbuilds or retrofitted in situ with no downtime. UV treatment performance is unaffected by water salinity or temperature and does not produce hazardous byproducts or increase corrosion risk. Proven performance exceeds IMO D2 and USCG standards.

Hyde Marine has delivered systems to new construction shipyards around the world for all vessel types and sizes, ranging from small passenger ferries, offshore service vessels, heavy lift ships and even Suez-max tankers. The company is proud to provide robust and reliable products, giving customers comfort in knowing that their BWTS will operate properly when compliance deadlines kick in.

Hyde Marine is committed to continuous

38 – Spring 2015

2000 McClaren Woods Drive Coraopolis, PA 15108 Tel: +1-724-218-7001 E-mail: sales@hydemarine.com

product improvement and innovation. Computational fluid dynamics modelling was used to optimise the UV reactor design. In early 2014, the company introduced its IMO type approved and USCG AMS approved Hyde GUARDIAN Gold™ BWTS. This provides the smallest footprint on the market, an enhanced control system and operator interface, and external access to the system’s data log. The new system launch was the result of customer feedback and comprehensive testing and evaluation of filter technology to reduce the footprint and improve performance. It allows for improved ballast time, continuous and increased flow to ballast tanks, and reduction in power/energy requirements (30% reduction in peak power consumption during backwashing).

As Hyde Marine works to obtain USCG approval, the company is committed to supporting the improvement of the USCG Environmental Technology Verification Program to address and resolve any concerns over the efficacy of UV disinfection to ensure customers have a safe and environmentally friendly alternative for ballast water treatment.

Hyde Marine continues to establish global relationships with reliable, proven, authorised engineering and installation partners. Its strong presence, reputation and experience in the BWTS market is proof of Hyde Marine’s combined expertise and commitment to excellence.

GREEN Issues

Green coasts Norway’s minister of trade and industry Monica Mæland and state secretary for climate and environment Lars Andreas Lunde have signed a declaration of cooperation with key players in the Norwegian coastal shipping industry to achieve the world’s most environmentally friendly fleet of coastal vessels.

In the future, liquefied natural gas (LNG) and battery power are projected to comprise a considerable share of the fuel used by the global fleet. Norway already has a leading position in this field and has a good environmental and business starting point to more broadly implement these new technologies.

DNV GL has now launched the Green Coastal Shipping programme, a joint effort by industry and authorities to ensure that Norway will have one of the world’s most environmentally friendly and efficient coastal shipping industries.

“We can achieve this if we want to.

There are many examples of incentives driving forward a green shift. The technology is there, but we have to scale up its use considerably in order to maintain our international position,” said DNV GL’s deputy group chief executive, Remi Eriksen.

Both the Ministry of Trade, Industry and Fisheries and the Ministry of Climate and Environment are supporting these efforts.

“The shipping industry is very well equipped to lead the way in the green shift.

This can contribute to exports of good, future-oriented and environmentally friendly solutions. I’m sure DNV GL’s expertise and experience in shipping will help to maintain Norway’s position as a world leader in the maritime industry,” said Mæland.

“This year, the UN Climate Change Conference in Paris is to negotiate a climate agreement that will entail new obligations and the implementation of new climate measures. For this reason, more ships must use environmentally friendly fuels, such as gas and battery power, and we must see more ships with new energyefficient designs. The green shift in the maritime industry will both resolve environmental challenges

and create value,” said Tine Sundtoft, minister of climate and environment.

“We envisage a fleet of offshore vessels, tankers, cargo, container, bulk and passengerships, ferries, fishing and aquaculture vessels, tugs and other coastal vessels, run entirely or partly using batteries, LNG or other green fuels,” said DNV GL’s Narve Mjøs, who is programme director for the Green Coastal Shipping programme.

The scheme was developed to help implement the government’s new maritime strategy and will be a joint effort by several industries, ministries and state departments. It will provide an important contribution to the achievement of both national and global climate goals and will also help to reduce air pollution. At the same time, it will be a driver for innovation and green workplaces. In time, it is also expected to provide major export opportunities for the maritime, energy and supplier industries.

“We want to make Norway a world leader in, and a showcase for, green coastal shipping and to attract international attention,” said Mjøs.

In cooperation with the parties, a programme plan will be established, describing the programme’s activities in detail. The declaration has been signed by a total of 18 companies and organisations, together with the Ministry of Trade, Industry and Fisheries and the Ministry of Climate and Environment.

Mjøs underlines that more parties would be most welcome.

Hull form optimisation and hydrodynamic design from Foreship are at the core of major fuel consumption savings to be achieved by a newgeneration, coastal general cargoship.

We want to make Norway a showcase for green coastal shipping and to attract international attention

Finnish owner Meriaura Group signed for two 4,700 dwt Ice Class 1A VG EcoCoasterTM general cargo newbuilds at Dutch yard Royal Bodewes in midJanuary, with the first due for delivery at the end of July 2016. Hull form and machinery optimisation are expected to almost halve fuel consumption compared with conventional dry cargo vessels of similar type and size, in turn making a significant impact on fuel emissions.

Foreship worked with Meriaura and Aker Arctic Technology at the EcoCoaster’s concept stage, in a project that also envisages the ship using either marine gas oil (MGO) or the biofuel ‘EcoFuel’ to meet or even exceed maritime environmental regulations.

“Altogether, 45 hull alternatives were considered, of varying lengths and hydrostatics, with the aim of minimising resistance while achieving small wave formation and good wake field for the propeller,” said Risto Ajanko, senior specialist, hydrodynamics, at Foreship.

“The main dimensions of the EcoCoaster were optimised, achieving the best ratio between capacity and fuel consumption.”

Using Foreship’s advanced inhouse computational fluid dynamics tools, designers also reached the best compromise for performance in open water and in the ice channel, with Aker Arctic advising and model testing to enhance performance in ice.

In addition, analysis focused on optimising the hull’s smooth wave profile. The hull form includes a long, narrow bow that will offer lower resistance in ice channels, while flare angles minimise additional resistance in waves.

The aft shape features a narrow gondola to enhance wake field for the propeller.

The EcoCoaster’s dual fuel propulsion will be delivered by an Anglo Belgian Corporation (ABC) 8DZC medium-speed main engine, which will be suitable for biofuel and MGO. VG-Shipping (part of Meriaura) operates its own biofuel refinery in Uusikaupunki. The owner’s goal is for EcoCoasters to make up at least half of its fleet (currently 20 vessels) within five years. A larger EcoCoaster design is also under development.

Spring 2015 – 39

Green Issues

BOLT Lifesaver Supacat has delivered the refurbished BOLT Lifesaver wave energy converter to owner Fred Olsen, following a threemonth project refurbishing the converter’s ‘intelligent systems’ at the Devon engineering firm’s facilities in Dunkeswell.

Supacat, which last year acquired local heavy fabrication and machining specialist Blackhill Engineering, is a strategic partner to Fred Olsen on Lifesaver. It has provided vital design and manufacturing skills both during and after the innovative technology project, which was part-funded by Innovate UK. To develop Lifesaver, Fred Olsen turned to a collaboration of industry and academia partners centred in South-West England, which, in addition to Supacat, included the University of Exeter’s Falmouth campus.

“The commitment and expertise of the collaboration both during and subsequent to the Innovate UK programme, as well as support provided by other organisations in the region, such as RegenSW and the South West Marine Energy Park, has helped this project achieve the success it has as it moves onto the next phase of its development.

We are particularly proud of the lasting and productive relationship we have developed with the Fred Olsen team and look forward to working with them, as well as with other developers who come to the region in the future,” said Joe Wilcox, head of marine and renewables at Supacat.

“Even Hjetland, project manager for Fred Olsen, said: “When testing prototypes, problems will always present themselves, and having partners like Supacat to bring their design and manufacturing experience together with a willingness to assist has been key to the success of this stage of the project.

The Falmouth Bay Test Site, FaBTest, has presented the device with a wide range of operating conditions – including some significant storm events – that have helped to prove the robustness of the design and construction, and this helped us understand the real world operating performance. The next step is to demonstrate this experience

40 – Spring 2015

to new markets and set the scope for the next stages of the development of the technology.”

Lifesaver is a point absorber wave energy converter, capturing the energy of waves and converting it into clean, sustainable electricity.

It features: • Up to five independently operating power take-off units (PTO), each moored independently to the seabed.

During the trials in Hawaii, three PTOs will be used. Each PTO has an installed (nameplate) capacity of 80 kW. • An all-electric power conversion system.

• A patented drive train solution.

• Lifesaver’s iconic hull design, which provides buoyancy and water displacement and is shaped like a square torus of 10m inner diameter, 16m outer diameter and 1m depth.

The size increases the contribution of energy produced from roll and pitch motion, yet limits the weight and cost of the floater. The low profile of Lifesaver’s hull reduces undesired drag forces, enables controlled movements to reduce the peak loads of high-impulse sea forces during more aggressive sea states and reduces any cumulative visual impact of a collection of devices. The circular Lifesaver shape reduces unwanted yaw, sway and surge motion.

Black carbon The decision at the International Maritime Organization (IMO) to recommend to its environment committee a definition of black carbon, arrived at by scientific consensus, after four years of debate, has been welcomed by environmental nongovernmental organisation Transport & Environment. Lack of agreement at sub-committee level had been holding up technical work to calibrate and test black carbon measurement methods that could be used to evaluate control measures as well as monitoring and engine certification technology.

IMO will now focus on measures to reduce black carbon. The deposition of black carbon from ships and other sources on ice and snow in the Arctic accelerates ice melting by reducing the albedo effect – the ability to reflect sunlight back into space. IMO’s Marine Environment Protection Committee (MEPC) is set to agree in May on a definition – reached in 2013

by Dr Tami Bond and a group of 29 eminent scientists from international institutes – which identifies its four major characteristics.

Bill Hemmings, clean shipping manager at Transport & Environment, a member of the Clean Shipping Coalition (CSC) that has observer status at IMO, said: “This agreement on a definition is welcome but long overdue as increasing black carbon emissions from shipping can accelerate the melting of Arctic ice. Now IMO can focus on evaluating which measurement technologies and control measures can be deployed.”

Hemmings concluded: “As international shipping increases, particularly near and in Arctic waters owing to accelerating ice melt opening up new shipping routes, it is imperative that the shipping industry takes measures to curb black carbon emissions. The simplest way to do this is to ban the use of heavy fuel oil (HFO) to power ships.

HFO is already being phased out in certain regions and IMO plans a worldwide ban in 2020 unless scrubber technologies are used.”

Costs Left: Moore Stephens tax partner Sue Bill

Taxing times Costs of new regulation and potential new taxes have been a source of concern to the industry in recent months

C

ompanies in the offshore maritime sector could be among those hit by a 25% diverted profits tax (DPT) charge under draft UK legislation scheduled to come into force in April, according to accountants Moore Stephens.

Under draft legislation published by the UK government in December 2014, DPT could potentially apply to many UK companies transacting with overseas-connected parties. Tax partner Sue Bill says: “The legislation as currently drafted is very wide-ranging and can apply wherever a UK company has entered into arrangements with connected parties involving enterprises or transactions with ‘insufficient economic substance’. For example, this could apply where a UK company leases equipment from an overseas-connected company located in a low-tax jurisdiction, where the lessor’s staff do not carry on any significant activities and where it is reasonable to assume that the transaction or transactions were defined to secure a reduction in the UK company’s corporation tax liability.

“Companies caught by the rules will be subject to a 25% tax charge. This will not usually apply to tonnage tax companies, because any transactions with related parties are unlikely to reduce the company’s tax liability as this is based on the net tonnage of vessels owned or chartered [by] the company.

However, the new rules could potentially affect many other companies, including those operating in the offshore sector.

“HM Revenue and Customs (HMRC) has said that further consideration needs to be given in certain circumstances to the interaction of these new rules with the cap on bareboat charter payments made to an associate by a company working on the UK Continental Shelf (UKCS).

“It is therefore not yet clear whether these rules will be modified for companies working on the UKCS.”

Decline in confidence Moore Stephens shipping partner Richard Greiner commented recently: “Shipping confidence started 2014 on a six-year high and ended it on a two-year low. It is difficult to predict with any certainty what the next 12 months will bring, beyond further uncertainty. To paraphrase an old adage, shipping goes into 2015 needing to accept the things it cannot change, to change the things it can change, and to make sure it understands the difference between the two.

“Overtonnaging, meanwhile, is top of the list of things that shipping can change. Accelerated scrapping is needed, together with an acknowledgement that there are already too many ships on the market and that, [without] some form of rationalisation, freight rates will not pay the bills.

“One area where shipping can demonstrate that it knows the difference between what it can and cannot change is in its attitude to private equity. Does private equity not know what the rest of us know, or does it know something the rest of us do not? Rather than bemoaning the short-term commitment of private equity, shipping should be looking to tick the boxes which attract such investors.”

“Operating costs will go up in 2015, along with the cost of regulation, while it would be no surprise if oil prices were to go up faster than freight rates over the course of the year. Environmentalists will be happier with shipping.

There will be increased interest in risk management, without which there will be still more newbuilding disputes of the type currently sitting on the desks of arbitrators, and more companies following the unhappy route into bankruptcy taken at the end of last year by OW Bunker.”

Overall confidence levels in the shipping industry fell during the three months to November 2014 to their lowest level for two

The new diverted profits tax rules could potentially affect many companies, including those operating in the offshore sector

Spring 2015 – 41

Costs

years, according to our latest Shipping Confidence Survey. The survey revealed increasing concern about the high cost of achieving compliance with new regulations, and ongoing doubts about overtonnaging. But it was not all bad news, with charterers, managers and brokers all more confident than they were three months previously of making a new investment over the coming year.

In November 2014, the average confidence level expressed by respondents in the markets in which they operate was 5.7 on a scale of one (low) to 10 (high), down from the 6.1 recorded in August 2014. This compares with the record high of 6.8, when the survey was launched in May 2008.

A number of respondents referred to continuing uncertainty in the markets, resulting from a variety of factors. One said: “The market remains directionless.

It needs accelerated scrapping, which would make economic sense for owners of older tonnage. But, given the recent drop in fuel costs, such owners could elect to hold onto their ships for the time being.”

The cost of meeting the growing regulatory burden in the shipping industry was high on the list of concerns expressed by respondents, one of whom noted: “The ballast water treatment legislation hangs like a dark cloud over all technical ship managers. This represents a huge investment accompanied by a high level of risk.” Another observed, “Regulation is becoming stricter, and now accounts for a greater slice of operational expenses than it did a few years ago. This is bad. But it is the only way to push older tonnage out of the market.”

Other comments included: “New EU environmental regulations will have a knock-on effect beyond the primary maritime industries” and “Freight rates will not compensate completely for the additional cost involved in operating on low-sulphur fuel”.

Responses to the survey were completed before the announcement of the bankruptcy filing of OW Bunker, the industry’s largest fuel supplier. But a number of comments referred to the significant role played by fuel costs in the fortunes of the shipping industry, such as the respondents who noted: “High 42 – Spring 2015

fuel costs and operating costs kill small shipowners” and “Bunker rates will fall still further”. Another pointed out: “Bunker prices are currently low but, with new sulphur regulations coming in, customers are receiving a very mixed message. Nobody knows what the fuel price will be in six months’ time.”

Demand trends, competition and finance costs, in that order, once again featured as the top three factors cited by respondents overall as those likely to influence performance most significantly over the next year. The overall numbers for demand trends were up from 23% to 25% since last time, while those for competition and finance costs were unchanged at 20% and 14% respectively.

Tonnage supply (down one percentage point to 13%) featured in fourth place, while operating costs (unchanged at 10%) and fuel costs (down two percentage points to a four-year low of 7%) featured in fifth and sixth places respectively.

The number of respondents overall who expected finance costs to increase over the next 12 months was up by one percentage point to 40%. For both charterers and managers, the increase was nine percentage points to 38% and 45% respectively, while, for owners, there was a one percentage point increase to 40%.

Brokers (down from 44% to 36%) were the only category of main respondent to record a lower expectation of higher finance costs.

The number of respondents in Asia anticipating an increase in the cost of finance was up three percentage points to 48%, Europe was unchanged at 35%, and in North America there was an 11 percentage-point fall to 56%.

One respondent said: “In some cases, little if any of the financing loan will have been paid off against ships that are now approaching their first special survey and which will have suffered a huge depreciation in value due to age and the current low market.” Another noted: “There is concern about the influence wielded by irresponsible hedge funds that do not understand the nature of the business and the risks involved.”

Greiner commented in the most recent survey: “The cost of existing and impending regulation in shipping is

another problem that is international in nature. Such costs were a recurring theme in the responses to our survey. Sulphur emissions regulations will make shipping an even cleaner and greener industry than it already is, and will encourage the development of more eco-friendly tonnage, but they come at a hefty price.

Even that, however, may be small change compared to achieving compliance with the ballast water treatment convention, which is now very close to ratification.

To all this must be added a predicted rise in operating costs of almost 3% this year and next. But it is not all bad news.

“Shipping is still attracting investment.

It may not be the type of investment die-hard traditionalists would prefer, but private equity investors are not known for throwing their money away on lost causes. Oil (and therefore bunker) prices continue to fall, which should have a positive effect on voyage expenses for as long as it lasts. Meanwhile, cargo continues to move, if not always in the volumes and at the rates the industry would like.

“Shipping confidence began 2014 on a high. It is evident that, for now, some of that confidence has been rendered fragile and replaced by a degree of uncertainty.

Some of that uncertainty may be resolved in 2015 as the extent of regulatory costs becomes clearer, and the success of recent attempts to reduce overtonnaging can be reassessed. Nevertheless, the market is likely to remain volatile in 2015 as shipping attempts to meet the challenge of finding the right balance between risk and reward.”

Registries

Going green Ship registries are expanding their fleets and getting involved in green initiatives

Above: Scott Bergeron, chief executive of the Liberian International Ship and Corporate Registry (LISCR)

T

he Liberian Registry says it is determined to ensure that the Liberian-flag fleet remains a leader in environmental compliance. Scott Bergeron, chief executive of the Liberian International Ship and Corporate Registry (LISCR), the US-based manager of the registry, says: “The Liberian Registry is an environmentally aware and responsible maritime administration. We have launched a new initiative to help shipowners improve their green credentials and meet other corporate social responsibilities. Our aim is to ensure that Liberia remains the greenest fleet afloat.

“The Liberian administration welcomes any new technology and ship designs that improve operational efficiency and lower ship emissions to the atmosphere, including greenhouse gases.”

As part of its ongoing commitment to environmental excellence, the Liberian Registry recently entered into a partnership with US-based consultancy EfficientShip Finance (ESF) to launch an innovative environmental initiative designed to reduce global carbon emissions, enhance fleet efficiency and competitiveness, and promote a greener Liberian fleet. The Liberian Registry is also offering special tonnage tax discounts for ships participating in this green initiative. Each ship in the programme will be entitled to a 50% annual tonnage tax discount in the first year, and up to a 25% discount in both the second and third years.

ESF’s partnership with LISCR offers a complete, turnkey, energy-saving solution for ships on a global basis with an add-on specifically crafted for emission control areas (ECAs).

ESF will provide the financial capital needed for each project, and assume responsibility for technology performance and fuel volatility risk, along with the

technical supervision and monitoring to perform retrofits.

Owners and operators remit to ESF a proportion of the amount they save on fuel costs, or which they receive in the form of additional negotiated hire. The retrofit projects require no upfront capital by owners and, since the payments are always a share of the savings, there is an ongoing net benefit to customers.

Christian Mollitor, LISCR vice-president and project manager of the green initiative, says: “This represents a great opportunity for owners with ships delivered prior to the eco-boom to have their ships retrofitted with proven fuelsaving technologies. This is yet another example of Liberia’s innovative approach to helping its shipowners keep their lead in an increasingly competitive environment.”

The ESF global programme includes an optimal mix of fuel efficiency retrofit solutions for each target vessel, based on its trading pattern, age, size, speed and consumption.

The technologies used represent the most widely accepted and tested solutions in the market, including, among others, wake-improving ducts, rudder bulbs and fins, protracted tip propellers, engine improvements, smooth coatings, and performance and trim optimising software.

For ships trading within ECA zones, the programme may include the installation of exhaust scrubber systems or the conversion of engines to LNG dual-fuel, to comply with the emissions requirements that came into effect on 1 January 2015.

Mollitor says: “We are delighted to have concluded this agreement with ESF. It should help owners and operators reduce fuel costs while creating the potential to increase hire or charter rates or achieve better pool points, and increase asset values in the secondhand market.

“It should also produce improved utilisation rates and

This is yet another example of Liberia’s innovative approach to helping shipowners keep their lead

Spring 2015 – 43

service and quality are within your reach

International Registries, Inc.

in affiliation with the Marshall Islands Maritime & Corporate Administrators

tel: +1 703 620 4880 | info@register-iri.com

www.register-iri.com

Registries

marketability, and reduce port costs, freeing up funds for core business investments, including new ship acquisitions, or just facilitating the preservation of cash reserves to make it through a tough market.”

Oliver Petrakakos, chief operating officer of ESF, says: “The Liberian Registry is the perfect partner for the implementation of this fuel-saving model, given its continuous emphasis on managing a high-quality fleet. ESF is committed to helping LISCR’s fleet continue to be green pioneers, while increasing the market competitiveness and strength of its owners.”

Liberia Liberia has become the flag of choice for Greek shipowners and operators, securing the leading position for the first time in more than 40 years – since the early 1970s.

Figures produced by the Greek publication Shipping & Finance, which bases its findings on data from the Marine Information Services database for Greek and Cypriot shipping companies, confirm that the Greek merchant fleet now includes 800 Liberian-flag ships. This is 10 more than are registered under the Greek flag, and 300 more than are registered under the flag of Panama.

Scott Bergeron, chief executive of the Liberian International Ship and Corporate Registry (LISCR), the USbased manager of the Liberian Registry, says: “This news is testament to the strong links that have existed between Greek shipping and the Liberian flag [since] 1949, when the oil tanker World Peace, owned by [Greek shipping tycoon] Stavros Niarchos, became the first ship to be registered under the Liberian flag.

From that time until the present day, the Greek shipping community has supported the Liberian Registry, and vice-versa, through good times and bad.

“Liberia’s dominant presence in the Greek shipping sector owes much recently to the efforts of Michalis Pantazopoulos, senior vice-president of LISCR (Hellas) SA in Piraeus, and to the continuing support of Captain Nick Soutos, president of the Soutos Group

of Companies and consul-general of Liberia in Greece since 1971.

“The shipping ties between Greece and Liberia have become even stronger during the extremely difficult economic climate of the past six years, and it is gratifying to see that the Liberian flag is now the number-one choice of Greek owners and operators.

“Greece remains the undisputed number-one shipping nation in the world, and it is appreciable that it has demonstrated its continuing faith in the world’s leading open ship registry in such a transparent way.”

Marshall Islands Since the opening of International Registries Inc’s office in Seoul in 2007, 201 vessels owned/operated by Korean interests have been registered in the Republic of the Marshall Islands (RMI).

As of the end of October 2014, the RMI fleet stood at just over 112 million gross tonnes and 3,300 vessels. Korean owners follow Greece, the United States and Norway, in that order, as the fourth largest shipowning group in the registry.

“The growth in the number of Korean-owned vessels joining the RMI fleet has been remarkable, particularly if you consider the general downturn in the shipping sector during the past few years,” said Bill Gallagher, president of International Registries Inc (IRI). “We are grateful to our Korean owners for their continued support and look forward to strengthening our relationship with them in the years ahead,” he continued.

The RMI Registry works closely with all of its owners and operators and strives to promote the quality of vessels registered. The RMI is the only major open registry granted white-list status by both the Paris and Tokyo Memorandums of Understanding (MoUs) and to hold Qualship 21 status with the United States Coast Guard for an unprecedented 10 consecutive years.

“Personnel located in 26 worldwide offices coupled with the registry’s robust vetting process for ships entering and remaining in the RMI enables the registry to ensure that quality owners and operators make up the overall fleet of the RMI Registry,” said Annie Ng,

head of Asia for IRI. “More than 70% of the Korean-owned vessels in the RMI Registry joined the fleet as newbuilding tonnage,” said Captain Young Kim, IRI’s representative based in Seoul.

“The RMI has an average fleet age of just over nine years old, and 25% of the fleet overall is coming out of yards in Korea,” stated Kim. “The RMI’s local presence in the Korean market has not only benefited the local shipowning community but has also provided a local point of contact for registrations coming straight out of the Korean yards,” he continued. “The Korean Register of Shipping (KR) hosted the Registry’s semi-annual CSCC meeting in April [last] year,” said Kim. “KR also arranged for a tour of the Daewoo Shipbuilding & Marine Engineering (DSME) shipyard and gave members of the RMI delegation the opportunity to meet all KR department heads and build a stronger rapport for future communication,” he continued.

“The RMI Registry was relatively unknown in the Korean market until Captain Kim joined us in March 2007 and developed the market from five Korean-owned vessels in the Registry in 2007 to having registered 200 vessels in the RMI through 2014,” said Ng. “The RMI Registry is committed to our owners, operators and other industry stakeholders in Korea; we have a solid plan to expand the size of the office and increase the number of personnel to meet the growing demand of the local shipping community so that efficient and user-friendly service will continue,” concluded Ng. Recently, IRI established a second full-service office in Hong Kong, and expanded seafarer documentation services in Mumbai and London.

Increased inspection and technical resources have also been added in the Long Beach, Baltimore, New York (downtown) and Houston offices. The Greek shipping community remains the largest shipowning group, followed by the US, Norway, the Republic of Korea and Germany. IRI’s Piraeus office, central to the European and Asian markets, seeks to continue to expand the registry’s fleet while maintaining the same quality and timely service.

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Classifiation

Changing times

Classification societies are involved in the quest for alternative fuels and equipping ships to operate in US waters

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nother milestone in the quest for alternative, more fuel-efficient sources of power has been reached with the conversion of the ro-pax vessel Stena Germanica to a dual-fuel methanol propulsion system at Poland’s Remontowa shipyard.

The conversion of the 240-metre-long, 1,500-passenger ferry, which began at the end of January 2015, will make it the world’s first methanol-powered sea vessel. Approval and classification will be carried out by Lloyd’s Register (LR).

Preliminary tests on a methanol-modified Wärtsilä 6ZAL40S engine similar to Stena Germanica’s were overseen in Trieste by five surveying teams from LR’s Copenhagen, Trieste, Gothenburg, Venice and Southampton offices.

LR’s Trieste-based lead specialist, Roberto Costantino, said: “We carried out three days of tests on a modified engine at Wärtsilä’s R&D laboratory so as to understand the engine performance when running with methanol. While the test engine is a similar type to the four engines on the vessel, it has fewer cylinders. So the builders are converting the existing ones on the ship.”

The new fuel arrangement on Stena Germanica, which is owned and operated by the Swedish ferry operator Stena Line, will combine methanol as its primary fuel with marine gas oil (MGO) as a back-up power source. Sulphur oxide emissions are expected to be cut by 99%, nitrogen oxide by 60%, particulates by 95% and carbon dioxide by 25%.

Stena Line’s chief executive, Carl-Johan Hagman, said: “The emissions from methanol are comparable to liquefied natural gas (LNG), but the requirements for handling and infrastructure are much lower. The construction team are looking at and will use several different exhaust gas treatment technologies, and, if the methanol project is a success, we will convert more vessels.”

VGP updates Recent updates to the US Vessel General Permit (VGP) have brought new technical and reporting requirements for vessels operating in US waters, including the need for the preparation of a detailed annual report. DNV GL’s newly introduced VGP verification service helps to ensure compliance by providing a comprehensive review of both VGP procedures and documentation.

The VGP verification service consists of a review of companywide VGP procedures, if they exist, which are usually based on VGP or environmental best practice documentation. Onboard visits confirm that the vessel’s documentation is consistent with the onboard documentation required and that the vessel is operating within its environmental procedures and VGP requirements.

“The VGP verification service gives our customers a second set of unbiased expert eyes on their documentation procedures.

It can be tailored to exactly what the customer needs, from a desktop review or workshop outlining VGP changes, to a full onboard and shore review and plan for corrective action, even help and advice on developing a VGP plan from scratch,” says Terje Sverud, head of section environment advisory at DNV GL – Maritime.

Once the review and any necessary corrective actions have been undertaken, DNV GL provides a verification statement indicating that, as observed, the vessel’s operations and recordkeeping are consistent with VGP requirements. This verification statement also contains a list of VGP requirements and outlines how the vessel fulfils the requirements – a useful reference list for a vessel’s crew when they are demonstrating compliance during a VGP inspection.

A pilot project was carried out with Wilh. Wilhelmsen

Emissions from methanol are comparable to LNG, but the requirements for handling and infrastructure are lower

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Classification

on its ro-ro vessel, Tarago. After a full examination of Wilh. Wilhelmsen’s company-wide VGP recommended practices, DNV GL experts went onboard Tarago and conducted a careful review of the record-keeping. The ballast water management plan, deck logbook, engine-room logbook and VGP logbook were checked to ensure that all necessary records were present for VGP-related procedures. The verification confirmed Wilh. Wilhelmsen’s high standards and thorough preparation, but also identified some opportunities for improvement.

“With several port calls in the US, it was valuable for us to team up with DNV GL’s verification team to do a pilot on new technical and reporting requirements set forth by the updated US Vessels General Permit. As vessel owners, we want to ensure our operations and standards are in line with regulatory requirements,” said Filip Svensson, vicepresident of marine operations at Wilh.

Wilhelmsen.

Gaining an overview of the VGP requirements and how they apply to each vessel saves owners and operators time and energy, and minimises the chance of errors, which can result in a costly violation. Customers that don’t have a plan in place, or who need to take action, now have the chance to develop a plan in a fast and efficient manner or to correct any deficiencies in an existing plan. The verification statement of DNV GL also provides an easy way for vessel operators to demonstrate that they have taken all aspects of the VGP into consideration in the event that the vessel is inspected by US authorities.

ABS in Japan The American Bureau of Shipping (ABS) has added the first Japaneseflagged vessel to its classed fleet after having been awarded the status of a ‘recognised organization’ (RO) by the Japanese government.

Yamatogawa, a 302,488 dwt very large crude carrier owned and managed by Kawasaki Kisen Kaisha (“K” Line), recently transferred flag, a move that made ABS the first foreign classification society to class a vessel flying the Japanese flag.

“We are honoured to become the first foreign class society to include a Japanese-flagged vessel in our fleet.

This is testament to our long-term commitment to delivering the high levels of professionalism that are demanded by the top Japanese shipowners,” said Derek Novak, president and chief operating officer for ABS’s Pacific Division. “We look forward to providing our bestin-class technical services and global support to a growing part of the Japanese commercial fleet in the coming years.”

ABS, which gained status as an RO in Japan in December 2012, is the largest foreign class society in the country.

It opened its first office in Japan in 1949 and has been supporting global shipowners there ever since. Earlier this year, ABS was selected to serve as the first foreign classification society for a new construction Japanese-flagged vessel, when Offshore Japan Corporation, a joint venture between Kawasaki Kinkai Kisen Kaisha (“K” Line Kinkai) and Offshore Operation Co, announced the construction of a new anchor-

handling tug supply vessel to ABS standards. The RO designation allows ABS to provide statutory certification services to Japanese-flagged vessels on behalf of the government and it allows ABS to verify the compliance of those vessels with major international safety and environmental conventions such as the International Convention on Load Lines, The International Convention for the Safety of Life at Sea (SOLAS) and International Convention for the Prevention of Pollution from Ships (MARPOL).

Novak says choosing to class with ABS for ships being built in Japan will make owners eligible for the most knowledgeable technical support and regulatory guidance when calling in US waters.

New chairman at KR The Korean Register of Shipping (KR) has elected Dr Park Bum-shik, formerly chief operating officer of the Korea P&I Club, as its chairman and chief executive.

Park graduated from Korea Maritime and Ocean University with a bachelor’s degree in navigation science and later gained a doctorate in business administration from the same school.

His career has included being head of the maritime division at Pan Ocean Shipping Co Ltd, and executive vicepresident of Wilson Korea Insurance. He served as chief operating officer of Korea P&I Club from 2006.

On being elected, Park said: “It is my job to build on the continuing success of KR and drive its growth to become one of the top performing classification societies in the world. I plan to achieve that through facilitating a flexible organisation culture, a global business infrastructure and sustainable growth through financial stability. My role is to provide the support our staff members need to enable them to perform at the top of their game. I am delighted and honoured to be elected, and I look forward to leading the Korean Register into the next phase of its ongoing growth and development.”

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Classifiation

ClassNK developments Accessing the latest research findings or information on new technologies and regulations as they emerge can prove challenging. To help make this easier, classification society ClassNK announced the release of its technical review articles through the ClassNK homepage.

This comes in response to growing demand from the global maritime community for access to the latest technical information reports and articles. ClassNK’s technical experts review a wide variety of topics, covering international conventions and technical concepts, as well as the latest R&D projects, which are compiled and released in regular reviews.

Meanwhile, ClassNK and leading global maritime software company NAPA have announced a joint project to reduce the time and cost of designing vessels in accordance with the new International Association of Classification Societies (IACS) harmonised Common Structural Rules (HCSR). The project will enhance the data linkage between ClassNK’s PrimeShip-HULL design support software and NAPA’s 3D-model-based integrated design software, NAPA Steel.

This will greatly improve the efficiency of the ship design process and reduce the cost of designing vessels in accordance with the new rules.

48 – Spring 2015

According to ClassNK executive vice-president Yasushi Nakamura, PrimeShip-HULL is the world’s first design support software to incorporate the requirements of the HCSR. “With PrimeShipHULL, we have already succeeded in reducing the additional time needed for HCSR vessel design by roughly 50%, but our goal is to reduce the workload and, in turn, costs for ship designers and builders around the world. By improving the link to NAPA Steel and other design software, we believe we can achieve even greater results.”

Today, 95% of the world’s vessels are built by yards using NAPA’s design software, including NAPA Steel. NAPA Steel allows yards to greatly rationalise their ship design processes, reduce calculation time and rapidly create highquality finite element models.

NAPA president Juha Heikinheimo says: “Many of the world’s leading shipyards already use NAPA Steel to improve their design processes, and we see this improved data linkage as offering even greater benefits to NAPA Steel users.

Improved linkage between NAPA Steel and ClassNK’s PrimeShip-HULL will allow yards building CSR-compliant vessels to even further streamline their design process while also eliminating the need for designers to input duplicate data into multiple programmes.”

We have already succeeded in reducing the additional time needed for HCSR vessel design by roughly 50% Adopted in 2013, the IACS HCSR will be applied to all tankers over 150 metres and all bulk carriers over 90 metres contracted after 1 July 2015.

The HCSR brings new requirements for more comprehensive structural analysis at the design stage, including finite element analysis covering the entire range of cargo hold structures, as well as new formulae for buckling, fatigue and residual strength criteria to enhance safety and reliability. However, these new requirements also greatly increase the overall time needed for vessel design.

In order to help reduce the burden of the new rules on ship designers, ClassNK released PrimeShip-HULL, a multifunctional vessel design support tool that makes it easy for yards and designers to carry out rule calculations and optimise their designs in accordance with the new rules.

ship management

Management matters InterManager president Gerardo Borromeo has reaffirmed that his association will continue to serve as a strong voice for the ship management sector during 2015

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n a message to InterManager members and the wider shipping industry last month, the president, Gerardo Borromeo, said: “In this age of international legislation, and with the increasing requirements for monitoring and reporting within our industry, it is important to ensure that ship and crew managers have a voice on the world stage and I am determined that InterManager will continue to provide that loud voice.”

Highlighting the association’s achievements over the past year, he said membership of InterManager, which represents third-party and in-house ship managers, has grown by 8% – continuing the trend of recent years. InterManager members now manage more than 5,250 vessels and over 250,000 crew members worldwide.

InterManager members attended in force the association’s annual general meeting in Singapore in October, which featured a new international conference – the International Shipowner and Shipmanagement Summit – which InterManager ran in conjunction with conference specialist Shipping Innovation.

The 2015 AGM will be held in London in September, to coincide with the second London International Shipping Week.

InterManager has been at the forefront of industry projects and is delighted to announce that the Shipping KPI project, which it pioneered before it became a standalone initiative, now has more than 3,577 ships providing information to its database and 415 companies participating.

This represents a doubling on the previous year’s figures.

Working with partner organisations and member companies, the association has been instrumental in progressing research on the Martha Project, which addresses seafarer fatigue. It has also embarked on a project which exams the role of

psychometric testing, aimed at better identifying core skills and excellence in seafarers.

In terms of initiatives aimed at improving overall conditions at sea, InterManager has completed a wide-ranging Crew Communication Survey and helped produce a useful glossary of terms used in the satellite communications industry.

Over the past year in its role as a permanent representative to the International Maritime Organization (IMO), InterManager has submitted a comment paper on the port state control guidelines under the Ballast Water Management Convention; commented on issues regarding places of refuge; submitted an information paper on minimum manning levels; and contributed to a comment paper on the draft guidance on stripping operations using educators. 2015 will see the association continue to take an active role in international legislative matters on behalf of the ship management sector.

Borromeo, who is chief executive of Philippine Transmarine Carriers Inc, said: “Crew are our industry’s greatest asset and one of a ship manager’s largest costs, so it is important that we actively support initiatives which endeavour to enhance their skills and competencies, driving for enhanced efficiency and productivity in output while working to improve working conditions onboard. As managers, it is ultimately our ability to continue to effectively adapt to an ever-changing seascape that will spell the difference in our future success. We serve an industry that is the backbone of global trade. Our responsibilities are, therefore, significant and not something we take lightly.”

It is ultimately our ability to effectively adapt to an everchanging seascape that will spell the difference in our future success

Bibby moves Bibby Ship Management has formed an alliance with Singaporebased United Ship Management to capitalise on business opportunities in the growing Chinese market.

The joint venture, to be known as Bibby-USM Shipping Pte Spring 2015 – 49

Ship management

Ltd, has been set up as an independent company by both companies to help diversify operations into the North Asia region, targeting China and Taiwan for specialist sectors such as offshore, oil and gas, liquefied petroleum gas (LPG) and liquefied natural gas (LNG).

Bibby Ship Management is a prominent player in the offshore market; a sector which is highly specialised owing to its complexity. United Ship Management offers strategic partnerships with owners across the North Asian markets. Drawing on each company’s areas of expertise, Bibby-USM Shipping will offer a series of comprehensive one-stop-shop marine services such as technical management; consultancy; crew management; offshore training; surveying and marine travel.

Arvind Mohan, managing director of Bibby Ship Management’s Singapore operation, said: “We are looking forward to working with United Ship Management to venture into the Chinese market through Bibby-USM Shipping Pte Ltd. We believe the alliance will open up new opportunities for us in this fastmoving and important shipping region.

It is an exciting time for our business and for the maritime industry as we expand further afield.”

Kelvin Sun, managing director of United Ship Management, added: “Bibby Ship Management brings a wealth of knowledge and industry expertise to Bibby-USM Shipping, and we look forward to working with them. With the new joint venture, we are confident and determined to be one of the major ship managers in these specialised and niche sectors.”

Both Bibby Ship Management and United Ship Management will continue to deliver their independent strategies outside this specific target market.

Bibby Ship Management has recently recruited a new regional managing director for the UK and Isle of Man, Andrew Rodden, who brings with him a wealth of commercial and technical knowledge and experience.

Rodden will manage Bibby Ship Management’s crew and technical service delivery across the UK and Isle of Man while managing the support functions and other operational areas within each local business. He 50 – Spring 2015

will be mainly based in Bibby Ship Management’s Aberdeen office.

With 23 years of industry experience, Rodden joins Bibby Ship Management from Technip, where he was most recently based in Paris as vice-president, strategic resources. During his time at Technip, he was in a number of roles covering marine superintendent, fleet management, quality management and project management before moving to Paris. Prior to coming ashore, he had a seagoing career, starting as a dual cadet with Shell, with time spent as a deck officer on oil, gas and chemical tankers before moving into the offshore sector on diving support, pipelay and construction vessels Chris Stone, chief operating officer, said: “Andrew Rodden has a proven track record for successfully managing and leading teams. He knows the industry well, so I am sure he will be a big asset to us here at Bibby Ship Management.”

Rodden said: “I am delighted to be joining a company with such a long and distinguished history in our business at an exciting time for our industry. I look forward to adding another chapter as Bibby Ship Management enters a period of growth in multiple sectors in the next few years.”

Eco-office Thome Group has become the first ship management company to achieve EcoOffice certification in Singapore.

The international ship manager has successfully completed an environmental audit throughout its Singapore offices to achieve Eco-Office status, which is regarded as the strictest of its kind in Singapore corporate circles.

This award recognises Thome Group as an organisation which embraces its duty of care to the environment in which it operates. Sustainability through energy and environmental conservation programmes is imperative, and Thome Group does not differentiate between vessels and shore offices when it comes to adopting such programmes.

Thome Group’s audit took place throughout its corporate locations in Singapore, including Thome Ship Management Pte Ltd, Thome Offshore Management Pte Ltd and Thome Oil &

Gas Pte Ltd. The Eco-Office certification is valid until December 2016 Thome Group president, Claes Eek Thorstensen, said: “We are proud of this award but with pride comes responsibility, particularly since we are the first in our sector to achieve this certification. We owe it to ourselves, the marine fraternity in Singapore and also to our stakeholders around the globe to continue to uphold these high environmental standards.”

Eco-Office is a joint initiative between Singapore Environment Council (SEC) and City Developments Limited (CDL). One of the key programmes associated with the project is the online Eco-Office rating system, which enables offices to perform a self-audit based on supplied metrics, such as corporate environmental policy and commitment, purchasing practice, waste minimisation measures and levels of recycling, enabling companies to gauge their performance over time and to apply for an Eco-Office award (previously known as the Green Office).

Ship recycling

Asian focus Ship recycling yards have been improving their facilities

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hip recycling yards in India, Pakistan and Bangladesh need to be part of the global scheme of sound ship recycling, and those yards in Alang which have invested in fully upgrading their facilities to meet the terms of internationally agreed rules should be rewarded by winning more business.

This was the view expressed by Akihiro Tamura, director of shipbuilding policy at the Japan External Trade Organisation (Jetro), shortly after returning from a fact-finding trip to Indian recycling yards in Alang.

The four-day visit, arranged in association with cash buyer Global Marketing Systems (GMS), was attended by a 14-strong Japanese industry and government delegation, which included officials from the Ministry of Land, Infrastructure, Transport and Tourism; the Japanese Shipowners Association; Jetro; shipping companies “K” Line and JX Ocean; ClassNK; Japanese Labour Union; Japan Marine Science; as well as GMS. The delegation visited Alang with the intention of assessing the quality of beach recycling yards in the region.

Welcoming the comments from the visit, Nikos Mikelis, non-executive director of GMS, said it was up to the shipping industry and the regulators to see the improvement in conditions themselves. “We have already invited legislators from the European Commission, maritime administrations, the International Maritime Organization (IMO), as well as global shipowner representatives to visit the area, and the invitation is still open.

“Separately, IMO should be invited to hold a workshop/ seminar in India to not only raise awareness of the improvements which have been made there but to inform and educate other yards as to what is needed to conform to the terms of the Hong Kong

International Convention for the Safe and Environmentally Sound Recycling of Ships,” he said.

Amit Malhotra, trader and GMS representative in Japan, said the Japanese delegation was pleased with the changing attitude of the Ship Recycling Industries Association (SRIA) towards trying to understand and comply with the Hong Kong convention. He said: “If yards in India comply with the terms of the Hong Kong Convention and the government of India ratifies it, then Japanese owners will have no concerns sending their vessels to India.”

A strong theme running through the visit of the Japanese delegation was to encourage India to meet the standards of the Hong Kong Convention – something Tamura said the four top-level yards in the region, Leela Ship Recycling, Priya Blue Industries, Kalthia Ship Breaking and Shree Ram Vessel Scrap, seem to be very close to achieving already.

These yards have improved their working procedures and have upgraded their facilities to include concrete floors with drainage, bilge water pumps, protective clothing, hazardous-waste disposal facilities as well as segregated work areas among other things.

He said: “Our visit was very fruitful in being able to see the actual situation on the ground and the many improvements made in Alang. I am also impressed that they are very open to visitors and we even visited some yards without any prior notification, which is important. And the workers were all wearing helmets and working clothes as well as protective shoes.”

Japan is so supportive of the Indian ship recycling sector that Japan is moving towards providing Official Development Assistance to upgrade facilities and improve operations in the region.

Nothing has been officially decided yet, but the next step will be to carry out surveys of the yards to determine what support will be actually needed and to draw up

A strong theme running through the visit was to encourage India to meet the standards of the Hong Kong Convention

Spring 2015 – 51

Ship recycling Right: Nikos Mikelis, non-executive director of GMS

an agreement between both countries, Tamura stressed.

“Of course, we would like to support larger numbers of yards in the region, but naturally there is some constraint regarding budget and time. However, our ultimate wish and purpose in providing assistance to India is to encourage the Indian government to move towards accession to the Hong Kong Convention.

“The Indian recycling industry plays a vital role in international ship recycling and in order to ensure a sound and safe ship recycling industry, those beaching recycling facilities in India, Pakistan and Bangladesh should be included into the global scheme of sound ship recycling.

We want the Indian recycling yards and we want the Indian government to join the global recycling framework, or Hong Kong Convention.”

Tamura said he hoped India would continue to be open to the outside world when it came to recycling, and he wanted to send a more positive message to the outside world to invite “a lot of people to come in and see their yards. I think this is important, as is more intense monitoring of the environment in the area, which would help to give a better understanding to the outside world of what is being achieved by the yards”, he said.

He added: “We have a strategy that includes the Japanese government supporting Indian yards to upgrade, and also for ClassNK to support these yards through consultancy services and ultimately certification. Japanese shipowners will be willing to send their ships to “safe and environmentally sound” ship recycling yards in India and other countries, and the entry into force of the Hong Kong Convention is a very important step to realising this goal. Our ultimate purpose is to help all concerned to move towards accession to the Hong Kong Convention, and all our efforts will be focused in this direction,” he said.

Global Marketing Systems recently challenged the European Commission’s intention to ban ship recycling by beaching, by inviting the commission and a major representative group of top-level shipping industry stakeholders to India to witness the recycling process firsthand at one of the country’s best yards.

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Mikelis said recently that ship recycling yards were improving in South East Asia and the best way to see this was to visit the yards in person.

GMS also used a recent conference to call on Panama and the Marshall Islands to accede to the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships in order to satisfy calls by the International Chamber of Shipping and the European Community Shipowners’ Associations (ECSA) for a level playing field in global recycling. Ratification by these two large flags would speed up entry into force of the convention.

Mikelis said that while progress was being made in Indian yards, it could “come to an abrupt end through the ill-advised efforts to ban ship recycling by beaching through the Unit of Waste Management of the European Commission’s DirectorateGeneral for the Environment.

“We can only hope that the administrations of right-thinking European states will avert the tragic mistake that has been brewing in Brussels through the regulator’s lack of understanding on international shipping and ship recycling.”

He added: “Progress could also slowly come to a halt if yard owners who are investing in improvements do not realise any financial gain through the custom

of responsible shipowners seeking safe and clean recycling in the period prior to the entry into force of international requirements. As entry into force of the Hong Kong Convention is practically subject to accession by India, we have a classic ‘chicken and egg’ situation if there is no financial motivation to the yards.”

Speaking at a European Maritime Safety Agency conference in London recently, Mikelis said that a serious problem for the shipping industry is that China’s economy does not always need large quantities of ferrous scrap and, by extension, end-of-life ships for recycling. During the past few months, China has been exporting large quantities of cheap mild steel billets, providing an alternative to ferrous scrap, and these exports have been hurting the recycling industries in Turkey, Pakistan, India and Bangladesh, he told delegates. At the same time, he said, China’s recycling was suffering because of the country’s reduced needs for ferrous scrap. Prices paid for ships have halved from around $460 to $230.

Yards that are surviving do so on the basis of colossal subsidies offered by the Chinese government to Chinese owners of Chinese-flagged vessels until the end of 2015. Subsidies amount to $150/gt for recycling and, separately, another $150/gt for newbuilding replacement.

Ship recycling

Mikelis concluded that shipping, whether it resides in Europe, Japan or elsewhere, cannot rely on a near monopoly of ship recycling services by China.

Another question he raised was why Europe was not providing best practice ship recycling to international shipping, thereby creating jobs and wealth. The EU is the second largest net exporter of ferrous scrap after the US, with the vast majority of exports destined for Turkey.

IMO project coordinator Simone Leyers has been in Dhaka, Bangladesh, to establish the local project management office and kick-start activities under the Safe and Environmentally Sound Ship Recycling in Bangladesh project, funded by the Norwegian Agency for Development Cooperation. Mizanur Rahman is the newly appointed national project manager, who will be responsible for the day-to-day operational planning and implementation at a local level.

The project management office is hosted within the premises of the Ministry of Industries in Dhaka. IMO will be implementing this project in close cooperation with the Ministry of Industries of the Government of Bangladesh.

The project aims to enhance the development of safe and

environmentally sound ship recycling in Bangladesh, with the aim of improving the standards and, therefore, the sustainability of the industry.

The project also aims to facilitate the ratification/accession and effective implementation of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009.

With an annual gross tonnage capacity of more than 8.8 million, Bangladesh is one of the world’s most important ship recycling industries, second only to neighbouring India in terms of volume.

The project will consist of five work packages, covering studies on economic and environmental impacts and on the management of hazardous materials and wastes, recommendations on strengthening the government’s onestop service (in which all the various ministries with a responsibility for ship recycling – eg industries, environment, labour, shipping – offer a single point of contact for related matters), a review and upgrade of existing training courses and the development of a detailed project document for a possible follow-up project to implement the recommendations of phase one.

It will be executed by the Marine Environment Division of IMO, in partnership with the Bangladesh Ministry of Industries over the next 18 months.

The Bangladeshi ministry will coordinate input from various stakeholder ministries within the country, while IMO will also collaborate with other relevant UN agencies, including the International Labour Organization (ILO) and the United Nations Industrial Development Organization (UNIDO) to ensure successful delivery of the project.

The principal funding for the project will come from the Norwegian Agency for Development Cooperation, while the Secretariat of the Basel, Rotterdam and Stockholm Conventions (BRS) will also mobilise EU funding towards the work package related to the management of hazardous materials, which will partly be implemented by BRS. IMO, the government of Bangladesh, the Norwegian Agency for Development Cooperation and BRS have been working towards the establishment of this project for a number of years. It demonstrates a major commitment from the Bangladesh government to improve safety and environmental standards within this vital industry.

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COMMUNICATIONS

Keeping in touch There have been a number of new developments in the communications field

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VH Industries has rolled out a new dedicated voice configuration for its mini-VSAT Broadband global maritime satellite network to ensure customers always experience highquality phone calls. The network’s voice over internet protocol (VoIP) service is now delivered on a prioritised and protected data stream, separate from the network’s overall broadband data traffic. VoIP service is also prioritised onboard the vessel for quality VoIP service even during times of heaviest broadband data use.

By prioritising phone service, this enhancement is designed to maintain the crystal-clear sound quality of mini-VSAT Broadband’s VoIP service while also addressing the challenge that shipowners face in meeting increased onboard data usage. Maritime operators rely on broadband connectivity for everything from accessing email to utilising web-based applications for better voyage planning, fuel optimisation and remote systems monitoring. At the same time, vessels experience demand for VoIP services around the clock by crew and officers, given the 24/7/365 nature of commercial vessel operations.

“With this enhancement, mini-VSAT Broadband users enjoy extremely high-quality VoIP service, even during heavy data network use,” says Marc Edwards, KVH’s network operations director. “We rolled out this updated configuration to all service beams on the network, and the feedback indicates the quality of our voice service to be exceptionally good.”

VoIP, which uses an Internet connection to transmit voice signals, is the primary method for vessels to conduct phonecalls from sea. The mini-VSAT Broadband network uses spread spectrum technology, which enables low latency and contention, both factors contributing to the high voice quality of KVH’s VoIP service. A telephony measurement

known as mean opinion score (MOS) quantifies the voice quality of phone transmissions on a 1-to-5 scale, with 5 as best.

A score of 3.4 is considered good for a satellite phone call, yet mini-VSAT Broadband VoIP calls measure up to 3.75, which is the same as a land-based VoIP call. In addition, KVH’s miniVSAT Broadband network uses 32 kbps for the dedicated voice channel, which is much higher than typical satellite phones.

The mini-VSAT Broadband network provides broadband connectivity to commercial vessels and recreational yachts around the world, and is the market share leader in maritime VSAT, according to a 2014 report by industry analyst Euroconsult. KVH also designs and manufactures the TracPhone V-IP series of satellite communications antenna systems for use with the mini-VSAT Broadband network.

Sonardyne High-speed acoustic modem technology from the UK’s Sonardyne International has been used by Shell to successfully recover survey data from a network of long-life seabed sensors deployed in the North Sea. To date, the network of autonomous monitoring transponders (AMTs) has collected over a quarter of a billion measurements as part of an uninterrupted production monitoring study lasting six years.

The AMTs were originally deployed in 2010 to meet Shell’s research and production monitoring requirements. Every few hours, each AMT within the fieldwide network wakes up to gather readings from a variety of inbuilt sensors. These include: pressure, range, temperature, pitch, roll and sound velocity. The measurements are logged and time-stamped and can be recovered on-demand from the surface using a Sonardyne 6G high-power transceiver (HPT) acoustic telemetry modem.

For this latest data harvesting campaign, the Norwegian fishing

With this enhancement, mini-VSAT Broadband users enjoy extremely high-quality VoIP service, even with heavy data use

54 – Spring 2015

COMMUNICATIONS

vessel Elisabeth was chartered and a temporary over-the-side deployment pole installed. To this, engineers fitted the HPT modem to gather data from each AMT within the network.

Sonardyne’s over-the-side instrument deployment pole is designed for easy installation, disassembly and transportation. It has proven ideal for temporary use on vessels where throughhull options are not available or practical.

Once removed, it can be transferred to another vessel or stored until the next time it is required.

“As we were using a vessel of opportunity for this project, an overthe-side deployment pole was the preferred cost effective and fit-forpurpose practical solution,” commented

Phil Riddell, senior operations surveyor at Shell.

Shaun Dunn, global business manager for exploration and surveillance at Sonardyne, said: “The acoustic communication protocols within HPT enable large amounts of data to be extracted quickly and efficiently from 6G instruments such as AMT. “The data from this recent operation alone equated to a total of 105mb transferred wirelessly through the water column.

“Not losing a single byte of data demonstrates the extremely high reliability of 6G as an underwater data carrier, and we are delighted that Shell continues to benefit from this technology in its ongoing operations.”

Marlink contract Marlink has been selected to provide high-end very small aperture terminal (VSAT) services for the fleet of international dredging and offshore contractor Van Oord. The contract is expected to include 30 vessels being supported by Marlink’s customised VSAT services by the end of 2015.

Marlink’s VSAT services have provided voice and data connectivity services for three Van Oord vessels since June 2013. The company is headquartered in Rotterdam and is a leading contractor for dredging, marine engineering and offshore energy projects. Its positive experience of Marlink’s service provision and support was a key factor in selecting Marlink’s VSAT services for its fleet. The flexibility of the VSAT service is unique, as it provides real Committed Information Rates (CIR) and short-notice temporary bandwidth increases on request.

The Marlink VSAT services will provide operational benefits for Van Oord clients requiring high-end connectivity services. This is especially important for the clients in the offshore/ oil and gas segments, many of which rely on advanced software and processes for safe, efficient and environmentally friendly operation. VSAT services will also benefit Van Oord, turning all of its vessels into remote offices with high communication quality of service to ensure that voice and internet services adapt to how much bandwidth is available at any given time.

In its role as a Van Oord communication partner, Marlink is providing a number of value-added services as part of the new contract, such as support for Van Oord to run its own VOIP services, making it possible for Van Oord to integrate voice services onboard their vessels with their onshore voice service.

“Marlink VSAT services meet Van Oord’s very specific connectivity requirements for all its specialised vessels.

The difference now is that we work together as partners, where any Van Oord challenge is considered as our mutual challenge. We are proud to work strategically with Van Oord on any needs or

Above: Norwegian fishing vessel Elisabeth

Spring 2015 – 55

COMMUNICATIONS

development related to communication onboard”, said Ab Argam, sales manager, Benelux, for Marlink.

Inmarsat development From 4 February, Inmarsat is offering all post-pay IsatPhone 2 customers free-of-charge access to GEOS’s Worldwide Emergency Response Coordination service.

The service takes advantage of the IsatPhone 2’s one-press assistance button, located at the top of the handset.

GEOS’s service allows customers to contact the GEOS International Emergency Response Coordination centre simply by pressing the assistance button. Pressing the button triggers a message containing the user’s GPS coordinates, sent over Inmarsat’s global satellite network.

Once the emergency notification request is received, the response centre, which is staffed 24-7 and located in Houston, US, will contact the user directly and establish the nature of the emergency. GEOS staff will then notify the appropriate authorities based in region to begin search and rescue procedures.

“Increasingly, safety and security are paramount concerns amongst purchasers of satellite phones who often work in isolated or volatile areas,” said Greg Ewert, president, Inmarsat Enterprise. “The GEOS service is an excellent complement to the IsatPhone 2’s tracking functionality and, coupled with the global reach of Inmarsat’s reliable satellite network, will provide a welcome peace of mind for new and existing IsatPhone 2 customers.”

“We are extremely pleased to welcome Inmarsat IsatPhone 2 users to the broad global family of members all over the world protected by the GEOS global umbrella,” stated David Ruby, chief executive of GEOS Worldwide.

The service is available free-of-charge to all existing and new IsatPhone 2 post-pay customers. Pre-pay customers can also access the service, but GEOS will charge an annual fee.

GEOS also offers Inmarsat customers additional membership benefits to defray search and rescue and medivac costs.

56 – Spring 2015

SharpEyeTM Kelvin Hughes Ltd has been awarded a contract to supply SharpEyeTM radars with an agile tracker to the New Zealand Ministry of Defence as part of the Lockheed Martin Canada prime contract for the Frigate Systems Upgrade project.

Kelvin Hughes will be supplying its market leading S-Band solid state upmast 2D navigation and surveillance radar SharpEyeTM, for two ship sets along with its tactical Naval MantaDigitalTM display software and processors. The New Zealand Ministry of Defence has also selected Kelvin Hughes’ agile tracker option, providing advanced target tracking capability for low-level air and surface-based targets.

The contract covers the supply of the advanced upmast SharpEyeTM sensor, integrated housing and turning unit, antenna assembly, radar processor, software and integration with the combat management system. It also includes project deliverables from installation to sea acceptance, training and in-service support.

SharpEyeTM with its inherent solid state design (no magnetron) is highly reliable, enabling the transceiver itself to be mounted upmast with the need for maintenance access being almost completely eradicated. The innovative design of SharpEyeTM provides a very

low noise system, while the patented pulse sequence and pulse compression techniques ensure radar targets/contacts out at sea are typically detected and tracked earlier and at longer ranges than they would be by comparable systems.

The frigates Te Kaha and Te Mana are benefiting from a NZ$446 million upgrade of their combat systems plus related systems. SharpEyeTM is one of the sensors within the suite of sensors and systems being provided as part of the Lockheed Martin Canada upgrade under contract to the New Zealand Ministry of Defence.

The combat system upgrade means the Royal New Zealand Navy will be operating these highly capable and versatile ships through to the end of their service life.

Adrian Pilbeam, vice-president of Kelvin Hughes, said: “The selection of SharpEyeTM by the New Zealand Ministry of Defence and Lockheed Martin Canada is a testament to the cutting-edge SharpEyeTM technology radar. Kelvin Hughes developed SharpEyeTM as a very cost-effective package for 2D surveillance applications.

The New Zealand Ministry of Defence and Lockheed Martin Canada have recognised this in their selection of what is a critical situational awareness sensor for the Royal New Zealand Navy.”

Geographical focus Gibraltar

Far East development Gibraltar has been making considerable efforts to strengthen its ties with the Far East in recent months, with some high-profile visits to Hong Kong

G

ibraltar’s minister for tourism, commercial affairs, public transport and the port, Neil Costa, is confident of the Port of Gibraltar’s potential for further expansion, following an official visit to Hong Kong.

Costa attended meetings with key strategic stakeholders and decision-makers, as part of a campaign to build on the common ground and interests between the influential Hong Kong shipping community and the Port of Gibraltar. The ministry plans to develop and strengthen the newly established relationships, so that the port may better serve the significant fleet, owned or operated by companies in the Far East, transiting the Straits of Gibraltar every day.

The minister expressed satisfaction at seeing how much business is channelled through Gibraltar in the maritime industry and declared that the meetings with the key stakeholders of the Hong Kong shipping community had been highly engaging and constructive, providing very useful insights as to the experience had by clients using the port and how Gibraltar can best position itself to generate even more business.

Costa said: “There has been a tremendous interest not only in the Gibraltar flag, but also in the other quality professional services that the Port of Gibraltar provides, including the provision of spares, stores, crew changes and other husbandry services, apart from bunkering.”

The government delegation led by the minister included Commodore Bob Sanguinetti, captain of the port, and Diana Soussi from the Gibraltar Maritime Administration.

Before leaving on the trip, the minister reiterated that the Port of Gibraltar was a vital component of the Rock’s economic success and that he was keen to give renewed impetus to the efforts of both the government and the private sector to achieve further economic activity.

Gibraltar has also been keen to promote itself in the area of financial services.

Albert Isola, minister with responsibility for financial services, visited Hong Kong to address the 17th Hedge Funds World Asia conference. The aim was to position Gibraltar as a gateway to the European Union for Asian funds and hedge funds.

Isola also covered the dynamics of Gibraltar’s economy,

regulatory regime and competitive personal and corporate taxation, as well the government’s absolute commitment to the financial services sector.

Outside the conference, Isola, together with officials and the private-sector delegation from Gibraltar, had a further series of meetings with prime brokers, hedge funds and law firms located in the central business district. The minister also paid a courtesy call at the offices of the Hong Kong securities regulator.

Isola said: “This visit to Hong Kong over a full four-day period has exceeded my expectation, not only in terms of the number of professionals that we have interacted with but also the degree of interest shown by everyone we have met. The key factor now is that we and the private sector in Gibraltar follow up on the relationships that we are building so as to ensure that this translates into new business development for Gibraltar.”

Her Majesty’s Government of Gibraltar has recently opened its own office in Hong Kong. The new facility will be a showcase for Gibraltar and will serve as a stepping stone into the ever growing Chinese market, not only for Gibraltar’s financial services industry but also as a shop window for many other sectors of the economy.

The reverse is equally true. It is expected that the new office will encourage Chinese investors to use Gibraltar for both direct investment on the Rock and as an entry-point into European market.

Jason Cruz, a Gibraltarian who has lived in Hong Kong for over 20 years, will be appointed as Gibraltar’s representative and director of the new office.

Grimaldi Group’s Grande Angola left Gibdock shipyard recently following the on-time completion of a scheduled package of repair works. The project covered work on the second vessel in a two-vessel contract between Gibdock and Grimaldi Group, the multinational logistics group that specialises in the operation of roll-on/roll-off (ro-ro) vessels, car carriers and ferries.

Commenting on its decision to return to the Gibraltarbased yard, Ing Giancarlo Coletta, Grimaldi Group corporate purchasing director, said: “This is another example of how reliable services and competitive value form the basis of expanded business co-operation.”

Spring 2015 – 57

Port of

GIBRALTAR •

Close to main shipping routes

•

Competitively priced bunkers delivered by quality operators

•

Safe anchorage

•

Broad spectrum of marine services

•

Established, quality cruise facilities

•

Excellent international communications

•

A wide choice of shore excursions

North Mole, Gibraltar, Tel: +350 20046254, Fax: +350 20051513 Email: gpaenquiries@port.gov.gi Web: www.gibraltarport.com

Geographical focus Gibraltar

The 26,881 dwt ro-ro multipurpose vessel, built in 2008, underwent a full hull blasting and new silicone application. In total, a surface area of approximately 9,000m2 was renewed, including additional spot blasting to the topsides, cranes, accommodation block and ramp.

Gibdock employs the latest equipment and best available techniques in the application of marine coatings, including the use of environmentally friendly wet-grit blasting. The yard also benefits from a climatic advantage, with year-round temperate weather minimising downtime for vessels undergoing coating work.

While the coating renewal formed the critical path work, concurrent maintenance was carried out to the vessel’s ramp, sea valves, rudder, while hot-dip galvanised large diameter pipework was replaced. Around 5.5 tonnes of steelwork was performed with the addition of doublers to the anchor pockets.

Sister vessel Repubblica del Brasile visited the yard in July. Built in 1998, the 23,882 dwt ro-ro multipurpose vessel also underwent full blasting and silicone application. The project also covered the splitting of the ramp and replacement of the main bearings, pipework renewal and replacement of around 4.5 tonnes of steelwork to the vessel’s tanks.

Gibdock’s managing director, Richard Beards, said: “We are always pleased to welcome a returning customer as it reaffirms the fact that the service, quality and competitive value received at Gibdock is really hitting the mark.

Gibdock has been working with the Grimaldi Group since 2010, and that partnership has strengthened over the years, particularly during 2014. We hope that the relationship will continue to develop and we anticipate further projects in the foreseeable future.”

Piraeus-based Aegean Marine Petroleum Network Inc (AMPNI) has recently contracted Gibdock to carry out repairs to three of its vessels.

Aegean Princess, Halki and Nisyrus were all docked within the space of just over a month, underlining the yard’s growing success in attracting

business from the important Greek shipowner sector, based on quality of service, re-delivery time and its location.

AMPNI is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea. The company has a fleet of around 65 vessels, eight of which operate in and around Gibraltar.

Gibraltar’s bunkering superintendent John Ghio has recently been seconded by the Gibraltar Port Authority to act as a consultant for the developing bunker industry in the island nation of Mauritius.

The request to the local authority came from the State Trading Corporation of Mauritius (STCM), a governmentowned entity that regulates all trading activities in the country.

STCM expressed an interest in contracting Ghio’s services to examine and advise on how best to develop the industry and, in particular, the underlying regulatory framework and operational controls for bunkering in Mauritius.

The Government of Mauritius, through STCM, has been very keen to develop its excellent relations with Gibraltar, by drawing from the Rock’s experience in this field and applying the excellent regulatory framework and enforcement mechanisms already in place in Gibraltar, which is widely acknowledged to be at the forefront of regulations in this field.

Costa commented: “The Gibraltar government was delighted to accept this request, as this initiative once again highlights the reputation and standing of Gibraltar as one of the biggest bunkering ports in the Mediterranean, and recognises the industry-leading standards that we have in place.”

The secondment will also serve to enhance the knowledge and experience of the Gibraltar Port Authority, as it will provide Ghio with an opportunity to study the bunker industry in a different context, as an external observer in a friendly country, and to analyse the challenges faced by this industry and, in particular, the regulators of this industry in other locations.

The Gibraltar Port Authority recently announced the publication of its

revised oil spill contingency plan. It follows an in-depth review, conducted in consultation with all interested stakeholders and specialists in this field.

Taking into account developments in this area, it is tailored specifically to routine activities taking place in the port and in British Gibraltar Territorial waters, underpinning Gibraltar’s reputation as a centre of maritime excellence. The plan forms part of the Gibraltar government’s wider national contingency planning, and is a vital tool in effective oil spill response coordination.

The minister with responsibility for the port, Paul Balban, said: “The environmental protection of our waters is paramount. In keeping with this policy, this revised plan complements the Gibraltar Port Authority’s wider capabilities in ensuring that our environmental credentials remain second to none.”

Isaac Massias, ex-chief inspector at the Royal Gibraltar Police (RGP), has recently joined the risk and compliance department of Hassans, Gibraltar’s largest international law firm. This forms part of the firm’s drive to ensure that it remains at the forefront of legislative and regulatory requirements.

Massias began his career with the RGP in 1978, working his way through the ranks to reach chief inspector in 2011. In more recent years, he gained substantial experience in financial intelligence and related issues, particularly during his time as executive coordinator at the Gibraltar Coordinating Centre for Criminal Intelligence and Drugs, which includes the Gibraltar Financial Intelligence Unit.

Javier Chincotta, managing partner at Hassans, commented: “As an international law firm, Hassans prides itself on its continued efforts in ensuring that the firm has comprehensive capacity to deal with all regulatory and legislative frameworks in the financial and legal sphere.

“We are extremely fortunate that Isaac was looking to progress his career within this arena, and welcome him to the firm. A strong risk management and compliance strategy and procedures are of the utmost importance to Hassans and its continued success.”

Spring 2015 – 59

maritime cluster ARA

Expanding business Ports in the Amsterdam, Rotterdam, Antwerp (ARA)region have been posting positive results for the past year

T

he seaports in the North Sea Canal area, which includes the ports of Amsterdam, IJmuiden, Beverwijk and Zaanstad, realised record transhipment of more than 97.4 million tonnes in 2014, according to provisional figures.

This represents an increase of 1.7% compared with 2013, when transhipment stood at more than 95.8 million tonnes.

Total transhipment in the port of Amsterdam amounted to 79.7 million tonnes in 2014. This is an increase of 1.4% compared with 78.5 million tonnes in 2013 and also sets a new record.

The provisional transhipment figures for the other North Sea Canal ports are as follows. Transhipment in IJmuiden rose by 3% to 17.3 million tonnes in 2014. Transhipment in Beverwijk decreased by 9% to approximately 0.2 million tonnes, while it rose in Zaanstad by 17% to approximately 0.2 million tonnes.

The transhipment of liquid bulk cargo rose by more than 2% to 42 million tonnes (2013: 41.1 million tonnes). The transhipment of dry bulk cargo increased by approximately 1% to 34.4 million tonnes, compared with 33.7 million the previous year. Within this segment, the transhipment of coal rose by 8% and the transhipment of agribulk decreased by 5%.

Container and mixed cargo transhipment decreased by 11% to 3.3 million tonnes, with the transhipment of automobiles, roro and other mixed cargo falling by 13% and the transhipment of container cargo decreasing by 4% (57,000 teu).

Imports rose by 1% to nearly 52.8 million tonnes in Amsterdam.

Exports increased by 2% to 26.9 million tonnes.

The number of sea cruise ship calls decreased to 126 against 137 in 2013. This decrease is attributable to a combination of the Noordersluis lock, which is on the small side for the new generation of cruiseships, and

strong winds. The number of river cruiseship calls rose by 14% to 1,685 in 2014.

Dertje Meijer, chief executive of Havenbedrijf Amsterdam NV, commented: “2014 was a successful year on a number of fronts. Over the past year we saw a positive decision reached with respect to the new large sea lock, finalised our Vision 2030 in collaboration with our stakeholders and obtained a number of environmental permits that can be an impetus for our activities by, for example, providing greater scope for lighterage within the existing environmental limits. It is fantastic to be able to conclude the year with these transhipment figures. The focus in 2015 will be primarily on the preparations for SAIL Amsterdam 2015, the roll-out of our Vision 2030 and the preparations for the construction of the new large sea lock.”

BP will continue to supply its customers using third-party facilities after the sale of its Amsterdam oil terminal, which is expected to take place near the end of the year.

Rotterdam In 2014, throughput in the port of Rotterdam went up 1% to 445 million tonnes. Performance in the various market sectors was quite dissimilar, however. The container sector, up by 5.8% (volume), and breakbulk, with 12.1% growth, did exceptionally well. Oil products fell the most, by 8.1%. An extra 4.8% of crude oil passed through the port. Dry bulk fell by 0.7%. Allard Castelein, chief executive of the Port of Rotterdam Authority, commented: “In 2015 we expect the same growth in throughput as last year: 1%. This year, too, the main growth is expected in the container sector. In the coming years, we will nurture the large, existing sectors in the port, while also focusing strongly on innovation and broadening the range of activities in the port. We need both for a healthy future.”

2014 was a successful year on a number of fronts. It is fantastic to be able to conclude [it] with these transhipment figures

60 – Spring 2015

maritime cluster ARA

Castelein also paid plenty of attention to the challenges facing the port. “We are seeing major changes not only in the energy sector and the chemical industry but also in logistics,” he said. “So that the port can continue to be a strong pillar of our prosperity in the long term, we are working with business on innovation and on broadening the range of activities in the port. We can already see evidence of this in the increase in offshore activities, but the energy and chemical sector also need to become more sustainable. We are focusing on increasing efficiency in industry and on developing bio-based industry. For the container sector, the development of the hinterland connections is particularly important. This year, the new container terminals on Maasvlakte 2 will be busy starting up; from 2016 onwards, however, there will actually be extra capacity for further growth.’’

Bunkering rose for the first time since 2011 in Rotterdam, Europe’s biggest bunker port: 10.6 million tonnes, compared with 10.4 million in 2013.

The whole of the increase is accounted for by marine gas oil and diesel; sales rose from 500,000 tonnes to almost 700,000 tonnes. Sales of fuel oil stabilised – after falling for years – at 9.8 million tonnes.

In addition, 100,000 tonnes of lubricant were sold.

Sales of marine gas oil and diesel have risen because of the more stringent sulphur requirements in the emission control areas (ECAs): North Sea, Baltic Sea and the United States coasts. As of 1 January 2015, sulphur emissions in the ECAs may not exceed 0.1%. Marine gas oil and diesel were expected to provide most of the solution. Other possibilities are to use liquefied natural gas (LNG) as fuel or to fit so-called scrubbers, but the market is making little use of these options as yet.

Market parties waited until the last minute to buy marine gas oil (MGO) and diesel: sales in December were almost 125,000 tonnes (MGO and diesel together). Normally, sales are between 45,000 and 50,000 tonnes. The price has now halved, and MGO is cheaper than fuel oil was a few months ago. The graph shows the prices of fuel oil (IFO380) and MGO from 7 January 2014 to 13 January 2015: at the beginning of January 2014, a tonne of fuel oil cost $570 but by January 2015 the price is $246. The price of gas oil fell in the same period from $880 to $471.50 per tonne.

The port of Antwerp ended 2014 with an absolute record freight volume: last year it handled just under 200 million tonnes of freight, an increase of 4.3% compared with 2013.

In addition to a further rise in the volume of liquid bulk, 2014 saw robust

growth in container handling, with the volume expanding by 5.9% to 108 million tonnes. There was also a sharp rise in the reefer volume, up by 7.5% to 7.8 million tonnes. These figures underscore Antwerp’s position as a leading perishables port in Europe.

Because the port is located relatively far inland, it combines the advantages of a seaport, where the largest ships in the world can dock easily, with the characteristics of an inland hub offering proximity to the main European centres of production and consumption. In 2014, a number of shipping companies decided to expand their services by adding a first call in Antwerp, thus attracting even more import cargo and ensuring a better balance with Antwerp’s existing export activities.

Antwerp offers more than 2km of dedicated quays, plus automated warehouses and cold storage capacity for more than 90,000 pallets. And Antwerp dockworkers are able to achieve handling rates of 2,500 pallets per ship.

For reefer container handling, there are six container terminals available, with more than 10km of dedicated quays and over 7,000 reefer plugs.

In order to further streamline the flow of goods, the port of Antwerp has worked hard to refine its customs procedures to avoid any unnecessary loss of time. It also invested heavily in tools for electronic communication to improve efficiency throughout the supply chain.

Three years ago, the Port of Antwerp Fruit and Perishables Expertise Centre was founded to improve the service for fruit and perishables in the port in a sustainable way.

“The 30 members of the Expertise Centre will keep focusing on continuous improvement of the cold chain through Antwerp as well as on promotion of this vital link in the supply chain.

Focus areas are South Africa, Chile, Peru, Ecuador and Brazil. We want to increase our import volumes of fresh produce, especially in the container segment which, as everybody is aware, will account for nearly all growth in the next years,” explains Wim Dillen, senior business development manager at Antwerp Port Authority.

Spring 2015 – 61

Middle east ports

Port progress

There has been plenty of good news for Middle Eastern port operators

D

P World handled 60 million teu (20ft equivalent units) across its global portfolio of container terminals during 2014, with gross container volumes growing by 8.9% on a reported basis and 8.0% on a like-for-like basis.

New volume at London Gateway Port (UK) and Embraport (Brazil) contributed to the increase in reported volumes. Growth in 2014 was driven by the Asia Pacific and Indian subcontinent region, Europe and United Arab Emirates terminals. The UAE delivered an impressive performance, handling 15.2 million teu, representing growth of 11.8% for the year.

Chairman Sultan Ahmed Bin Sulayem commented: “With volume growth of 8.9% in 2014, we believe we have once again outperformed the expected 2014 market growth of approximately 5%. This demonstrates that a portfolio focused on origin and destination cargo and faster-growing markets continues to be the right strategy to follow. Our new developments at London Gateway and Embraport contributed to our excellent 2014 performance.

“Our flagship Jebel Ali port continues to reach record highs, with 15.2 million teu handled in 2014. The opening of an additional 2 million teu capacity in the third quarter of 2014 has alleviated constraint and will provide the capacity we need to achieve further volume growth at Jebel Ali. A further 2 million teu is expected to come online in the second half of this year, taking total Jebel Ali capacity to 19 million teu. Given the strong volume performance in 2014, we expect to meet full-year market expectations.

“As we look ahead into 2015, we have a number of exciting developments, including new capacity coming on stream in the Netherlands, Turkey, India and the UAE and the development of a logistics hub in Belgium. Further like-for-like gross container

volume does not include volumes at Embraport (Brazil) from January to June 2014 and London Gateway (UK) from January to October 2014 “Consolidated terminals are those where we have control as defined under International Financial Reporting Standard 3.

Like-for-like consolidated volume does not include volumes at London Gateway (UK) from January to October 2014 and adjusts for the deconsolidation of CT3 (Hong Kong) integrated ports and logistics solutions for our customers with the completion of our Jebel Ali Free Zone Authority (Jafza) acquisition.

“Although some of our terminals continue to operate in a challenging macro environment, market conditions across the portfolio are expected to be generally favourable in 2015. This, coupled with the addition of new capacity, stands us in good stead for volume growth in line [with] or slightly ahead of the market this year.”

Cheng Xinnong, president of Qingdao Port, said in December that Jafza has become a very important business and commercial hub for Asian companies, specifically Chinese firms, adding that the establishment of the Qingdao Free Trade Zone will add value to the already deep relations and boost trade exchange between China and Jafza.

Xinnong was leading a high-level Qingdao Port Group delegation, which included business development adviser Zhang Zaichun, Zhang Jiandong, general manager of Qiangang Company, and Xu Naishan, secretary, general office of the group to Jafza, to meet Ibrahim Mohamed Al Janahi, deputy chief executive of Jafza and chief commercial officer, Economic Zones World.

Stressing the importance of Jafza’s trade ties with China, Al Janahi explained the incentives available to companies setting up business in the Free Trade Zone.

Market conditions across the portfolio are expected to be generally favourable in 2015. This stands us in good stead for growth

62 – Spring 2015

Middle east ports

Aljanahi welcomed the delegation, stressing the importance of the historical trade relations with China, and said: “China is one of Jafza’s most important trade partners. Trade between Jafza and China has jumped from AED4 billion in 2004 to AED46 billion in 2013.”

“We expect this figure to grow in the coming years in light of the investments being made by the Chinese companies here,” he added.

Jafza has helped raise the business profile of Dubai and the UAE, and plays a key role in attracting foreign investment to the tune of 40% of all foreign direct investment (FDI) inflows to Dubai and 20% of FDI coming into the UAE. Jafza is currently home to more than 238 Chinese companies, which includes leading multinationals.

These companies play a pivotal role in advancing the national economy and promote trade relations between the two countries.

Abu Dhabi Ports has been one of the UAE’s leading government organisations in the field of aerial observation and launched its cutting-edge ‘eye in the sky’ drone camera last year to increase the surveillance at Khalifa Port, its adjacent Khalifa industrial zone, as well as at its other ports in and around Abu Dhabi.

Most recently, the company has added a further and more advanced drone camera to its surveillance equipment.

Compared with Abu Dhabi Ports’ other drone cameras, the so-called hexicopter is fitted with a six-propeller aircraft and thus has an increased mobility and flying range, while being able to provide full 360-degree camera views. The cameras are primarily used for security, but could also be deployed for search and rescue or emergency response.

Abu Dhabi Ports handled more cargo last year than ever before. Both the

number of containers handled through Khalifa Port and the volume of general and bulk cargo handled through all its other ports have increased significantly.

Khalifa Port Container Terminal, which is managed and operated by Abu Dhabi Terminals, handled more than 1 million teu in one year – a record for the emirate, with the total number of containers reaching 1,137,679 teu. This equates to a 26% year-on-year increase compared with 2013.

Meanwhile, the amount of bulk and general cargo handled was 12,821,584 freight tonnes (FT), an increase of 37% compared with the 2013 figures.

The container terminal hit some significant targets as the year progressed, including 2 million teu since the beginning of commercial operations (1 September 2012 – 30 November 2014) and the most containers ever handled in one month (December 2014, 132,297 teu).

Captain Mohamed Juma Al Shamisi, chief executive of Abu Dhabi Ports, commented on the increase, saying: “Khalifa Port has the space and the capacity to allow the businesses across the emirate to take advantage of growing global trade opportunities, by increasing their import/export trade while making use of Khalifa Ports’ excellent facilities and industry-leading productivity levels and turnaround times. There are few, if any, ports recording this pace of yearon-year growth anywhere in the world today.”

Martijn Van De Linde, chief executive of Abu Dhabi Terminals, added: “2014 has been the busiest year yet for Abu Dhabi Terminals at Khalifa Port Container Terminal, and the fifth straight year that our compound yearon-year growth has risen more than 20%. We successfully increased Khalifa

Port Container Terminal’s network to 52 international destinations and have developed strong relationships with the shipping and logistics community that have made Khalifa Port their hub.”

The general cargo and bulk cargo figures have shown an even more marked annual increase, with a record 12.8 million tonnes passing through the emirate’s ports in 2014.

The vast majority of steel imported and exported to the emirate is handled by Zayed Port, because of its good facilities and yard capacity for storage.

Zayed Port also handles the majority of the project cargo coming through to the emirate. In 2014, the Free Port, set a record for the largest-ever shipment of project cargo, with five superheavy-lift pieces for the Takreer carbon black project and weighed a total of 29,492 FT. “The volume of general cargo has more than doubled over the past four years,” said Al Shamisi. “This is directly linked to the size and number of infrastructure and oil and gas projects in the emirate”, he added.

Abu Dhabi Ports’ core objective is to facilitate trade and development across the UAE, and to promote “ease of doing business” through its ports. The year ahead will see the launch of the first applications for Maqta Gateway, the new advanced ports community system, which was announced at the end of 2014. Maqta Gateway will interlink all of those involved in export/import trade business through Abu Dhabi’s ports, providing a single point of contact and real time information 24/7.

Gulftainer, a privately owned, independent terminal operating and logistics company, marked another significant milestone, with Sharjah Container Terminal (SCT) surpassing

Above: Jebel Ali

Spring 2015 – 63

Middle east ports

Did say BDM - chk

Below: Umm Qasr in Iraq

400,000 teu in annual throughput during 2014. SCT has again recorded double-digit growth compared with last year’s volumes. The achievement was reached with an impressive safety record under challenging conditions, including space constraints.

Iain Rawlinson, group commercial director at Gulftainer, said that the professional approach of Gulftainer’s management, along with consistently high productivity levels, was a driving force behind the terminal’s success.

“SCT has always marketed itself as ‘the flexible alternative’, and the individual attention we extend to our customers offers us an advantage over competitors.”

The 400,000th unit was discharged from the Mag Container Lines (MCL) vessel, Mag Success, one of the terminal’s regular callers, which considers Sharjah as her base port. Speaking on behalf of Mag Line’s chief executive, business development manager Jamal Saleh congratulated the terminal for its achievement.

He said: “The announcement today reflects how Gulftainer and MCL have grown together over the years and, in partnership, managed to reach this target. The continuous support, flexibility and excellent operational performance MCL receives from Gulftainer, both operationally and logistically, has contributed greatly to this achievement.”

The milestone was achieved on the shift of duty superintendent Mehmood Malik, who, after 38

years, is the longest-serving employee at the terminal and was part of the team when the first teu crossed the quay.

Malik has witnessed several records and milestones and recalls handling 2,500 teu in 1976: “At that time, we could not imagine reaching the levels of throughput we have today, so this is a very special moment for me.”

SCT, which is managed and operated

by Gulftainer on behalf of Sharjah Ports Authority, has the honour of being the site of the first container terminal in the Gulf and commenced operations in 1976. SCT is located in the heart of Sharjah and is an ideal gateway for import and export cargo, with direct links throughout the Gulf, Asia, Europe, Americas and Africa.

The strong performance of Sharjah’s economy has supported the growth of many of SCT’s customers, enabling them to increase their throughput and contribute to a record year for the terminal.

The relationships built with our customers have been strengthened by

the joint efforts of Gulftainer’s sales and marketing team and the high levels of service and operational efficiency at the terminal. “When looking at the Sharjah market, the dedicated team at SCT listen to and address the many requirements of our diverse and interesting customer base,” said Rawlinson.

SCT’s figures have been further boosted with the arrival of new services throughout the year, including United Arab Shipping Company’s Gulf India Service (GIS1), which now connects Sharjah with Sohar in Oman, Mundra in India and Karachi in Pakistan, which has boosted the national carrier’s volumes through SCT in November and December.

Gulftainer’s portfolio covers UAE operations in Khorfakkan Port and Port Khalid in Sharjah as well as activities at Umm Qasr in Iraq, Recife in Brazil, Jeddah and Jubail in Saudi Arabia and in the Port of Tripoli in Lebanon, which will be operational in April 2016. It also marked another milestone in 2014 with its expansion to the US, signing a long-term agreement to operate the container and multicargo terminal at Port Canaveral, Florida.

With handling activity of over 6 million teu, the company has set an ambitious target to triple volume over the next decade via organic growth across existing businesses, exploring greenfield opportunities and potential merger and acquisition activities.

At that time, we could not imagine reaching the levels of throughput we have today, so this is a very special moment for me

64 – Spring 2015

Insurance

Club class New moves to provide additional services by insurers

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pecialist marine insurance intermediary Seacurus has developed a petro-piracy endorsement that can be added to existing kidnap and ransom (K&R) insurance cover in response to the evolving threats to ships, their cargoes and crews when transiting the South China Sea, Malacca Straits, Indonesian archipelago and Gulf of Guinea.

According to recent figures published by the International Maritime Bureau, South-East Asia accounted for three-quarters of global maritime piracy last year after a surge in tanker hijackings helped to fuel a 22% jump in armed robbery and pirate attacks on ships in the region. There were 183 actual and attempted incidents of piracy and robbery involving ships in South-East Asian waters last year, compared with 150 in 2013. In the Gulf of Guinea, meanwhile, cargo theft is likely to remain on the agenda of Nigeria-based criminal gangs throughout 2015.

Denis Nifontov, head of marine K&R at Seacurus, says: “The criminal reach demonstrated by last year’s hijack of the tanker Kerala, coupled with the number of successful and attempted attacks in 2014 and the lack of any evidence that such gangs have been neutralised, suggests that further attempts at cargo theft will take place in 2015 across the region. Seacurus has recognised the need for traditional marine K&R cover to evolve to provide all interested parties with assurance that every eventuality is covered.

“The modus operandi of SouthEast Asian and Gulf of Guinea criminal gangs differs from the Somalian piracy model. Ships’ crews are regularly exposed to lifethreatening situations as criminals take control of and ransack vessels, stealing valuable petro-chemical cargoes for commercial gain.”

The new cover from Seacurus recognises the need to protect crews against the potential for a

kidnapping situation, and ship and cargo owners against the risk of business interruption and property theft. In addition to the benefits of a $1m marine K&R policy, the cover includes as standard such additional benefits as loss of hire ($500,000), loss or theft of cargo ($500,000), loss of bunkers ($250,000), and loss or theft of money ($50,000) – all within an aggregate policy limit of $5 million.

Nifontov says: “Given that, by its very nature, criminal activity is unpredictable, Seacurus believes that, for a small additional voyage cost, cover can be arranged to give all parties to the maritime adventure peace of mind that their interests are insured. Shipowners, charterers and cargo interests (who can be added to the policy as co-insureds to cover their own interests in the voyage), can buy $5 million of cover for a sevenday voyage for a typical premium cost of $1,250, subject to an assessment of the usual underwriting information. In this way, all parties can protect their standard marine insurances and insurance records from the potential for costly claims, whilst negating the need for costly and time-consuming recovery actions and general average settlements.”

Self assessment The UK P&I Club is trialling a new self-assessment scheme for its entered ships. The scheme is designed to help the club’s shipowner members take a more hands-on role in identifying and controlling the risk of accidents on their vessels – which, in turn, could help to reduce their insurance premiums.

The trial is the latest development in the club’s claims-based approach to ship inspections. Launched four years ago, the approach focuses specifically on measures needed to control the most likely accidents on a ship as determined by the club’s unrivalled database of 12,000 major claims.

Seacurus recognises the need to protect crews against kidnapping, and owners against business interruption and theft

Spring 2015 – 65

Insurance

Using ‘bow-tie’ risk diagrams, the database reveals seven primary hazards and 76 common threats, which, if not controlled in one or more of 450 ways, could result in a major claim. For instance, for cargoships a primary hazard is carrying cargo at sea. Water ingress is a threat, and, if not controlled by measures such as watertight hatch covers, the shipowner will be sued for wet damage.

According to the UK P&I Club’s loss prevention director, Karl Lumbers: “Our bow-tie approach has proved very popular with members, with our inspectors being able to help them identify and control threats much more effectively. We have now modified the approach so that members can start using it and benefiting from it directly.”

Initially, the club will provide selfassessment facilities for up to 20 members, whose crews will score the effectiveness of 450 shipboard controls from 1 to 5.

Each member’s scores will be analysed by the club, with the effectiveness of each control being benchmarked. A formal risk assessment report will be provided to the member showing the overall risk percentage. Claims prevention advice will be made available to discuss any particular findings in the assessment.

“Where a member’s assessment of a ship reveals little difference in scoring from a gap analysis conducted by the club, there will be a reduction in the mandatory surveys required by the club on that ship,” says Lumbers.

He adds: “We hope the self-assessment scheme will enable participating members to harness the wide experience gained by the club in many years of claims handling to the benefit of their own businesses. Additionally, we believe members will find that this practical and simple system will encourage crewmembers to take more pride in their professionalism and their ships.”

North teams up with Gray Page

© The Journal Above: North’s joint managing director, Alan Wilson

66 – Spring 2015

North P&I Club has teamed up with specialist maritime intelligence, investigation and risk management company Gray Page to provide a unique online intelligence picture of maritime threats and incidents. It is based on an interactive map launched as part of North’s new website at www.nepia.com.

North’s joint managing director, Alan Wilson, says: “The new maritime threats and incidents picture is the latest stage of our collaborative relationship with Gray Page, which started in 2011 with the launch of our vetting service for armed maritime security providers.

The interactive tool provides real-time information on maritime incidents, casualties and threats to shipping worldwide, enabling our members to respond quickly and immediately to current incidents.”

Jim Mainstone, head of intelligence at Gray Page, says: “Gray Page first developed and launched the maritime threats and incidents picture back in 2013. Then, last year, North and Gray Page began jointly collecting intelligence on the ‘enduring risks’ facing shipping for the purposes of populating the database.”

Based on an interactive Google map platform, the maritime threats and

incidents picture is easy to navigate and identifies current incidents, enduring risks and danger areas. “It provides a unique combination of expert analysis and advice that is freely accessible, localised and focuses on both the commercial risks and physical security threats to shipping,” says North’s joint managing director, Paul Jennings.

Commercial risks highlighted and analysed include fraud, sanctions, cargo risk, corruption and trafficking, while physical threats to ships and seafarers include piracy, kidnap for ransom, armed robbery and hijack for cargo theft. The danger areas are based on those listed for war, piracy, terrorism and other hull perils by Lloyd’s and the International Underwriting Association’s Joint War Committee.

The jointly produced maritime threats and incidents picture is hosted on North’s new website, as well as Gray Page’s website at www.graypage.com. Mainstone says: “We are delighted to be continuing our collaboration with North. By combining our maritime intelligence expertise, which draws upon a reliable global source network, with North’s extensive knowledge and experience of worldwide shipping liabilities, we are able to present a practical and comprehensive picture of current maritime risks. We hope that by sharing reliable risk analysis freely with the shipping community, the industry will be able to mitigate some of the inherent risks in shipping.”

Nepia.com is a comprehensive redevelopment of North’s previous website, designed to ensure full compatibility with desktop and portable devices and provide significantly improved access to key data. The club has also launched an updated version of its smartphone app, which provides a simpler, quicker way to access its online databases of staff, correspondents, entered vessels and blue cards.

Jennings concludes: “The maritime threats and incident picture, new website and app are all part of our continuing drive to make North’s information and services more accessible to members and intermediaries worldwide. By collaborating with industry experts and through exploiting new technologies, we aim to continue providing the highest possible level of service to our members.”

maritime law

Tackling regulation Much-heralded new sulphur regulations are now in force, and the question will be how owners react to them in the months to come

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hips trading in designated emission control areas have to use onboard fuel oil with a sulphur content of no more than 0.10% as of 1 January 2015, against the limit of 1.00% that was in effect until 31 December 2014.

There have been suggestions that port states will not have the necessary infrastructure to police the new requirements, and on the other side of the coin that owners may try to ‘wing it’ rather than lay out large sums of money for scrubbing systems.

Speakers at a seminar organised recently by law firm Norton Rose Fulbright suggested that if, in the event of having difficulties in obtaining supplies of low-sulphur fuel, owners were seen to be trying to comply with the new rules, they might be treated more tolerantly by the authorities than those who had made no attempt to comply.

By contrast, those owners who are caught in a non-compliant situation and are shown to have made no serious efforts to comply are likely to face large fines, particularly in early cases as a means of ‘encourager les autres’.

The International Chamber of Shipping (ICS) has agreed that the shipping and bunker refining industries should work to the possibility that the global 0.5% sulphur in fuel cap, required by the International Maritime Organization (IMO), is likely to be implemented worldwide from 2020, rather than 2025.

Speaking after an ICS board meeting in London, ICS chairman, Masamichi Morooka, explained: “While postponement of the sulphur global cap until 2025 is still a possibility, the shipping and oil refining industries should not assume that this will happen simply because they are unprepared. ICS has concluded that, for better or worse, the global cap is very likely to be implemented in 2020, almost regardless of the effect that any lack of availability of compliant fuel may have on the cost of moving

world trade by sea.” ICS members have therefore agreed that they will continue to work with bunker refiners to help ensure that they will be ready, if necessary, to supply sufficient quantities of compliant fuel by 2020.

Annex VI of the IMO International Convention for the Prevention of Pollution from Ships (MARPOL) allows for the possibility that implementation of the global sulphur cap – which will dramatically increase the cost of marine fuel for the shipping industry worldwide, perhaps by as much as $50 billion a year – can be deferred until 2025. This decision is meant to be subject to the results of a fuel availability study that IMO is legally required to complete before the end of 2018.

Despite repeated ICS requests, IMO member states have so far refused to bring forward the fuel availability study. If supply problems are identified at the end of 2018, this will be far too late for governments to take action. National shipowners’ associations that are ICS members have therefore concluded that a political decision may, in effect, already have been taken – at least by the United States and the European Union, which view the global cap as a public health issue.

ICS’s position is influenced by the fact that the EU has already agreed, regardless of any decision by IMO to postpone the global cap, that a 0.5% sulphur limit will apply to international shipping within 200 miles of the coast of all EU member states.

In theory, if the global cap was not implemented until 2025, this would create a narrow corridor along the coast of North Africa in which ships could continue to burn less expensive residual fuel with a sulphur content of 3.5%.

ICS believes that the EU member states will be unlikely to permit this and will therefore push hard at IMO for global implementation of the 0.5% requirement in 2020.

The board also reviewed implementation of the 0.1%

The global cap is very likely to be implemented in 2020, almost regardless of the effect that lack of availability may have

Spring 2015 – 67

maritime law

sulphur in fuel requirements that have applied in emission control areas, in North America and North-West Europe, since 1 January. It was agreed that ICS will continue its close liaison with governments and port state control authorities to ensure a harmonised approach to implementation and enforcement that avoids unfair treatment or market distortion. ICS is particularly concerned by reports that some port states are charging to analyse fuel samples.

The ICS board reviewed the negotiations at IMO towards the establishment of a global system of data collection on CO2 emissions from international shipping.

ICS members expressed deep concern about the European Union’s decision to pre-empt the IMO negotiations by adopting a unilateral regional regulation on the monitoring, reporting and verification of individual ship emissions, in advance of IMO completing its work.

Morooka commented: “The EU regulation will have major implications for the IMO negotiations on a global data collection system, which, until now, have been progressing well. There is a real danger the EU initiative will be seen by non-EU states as an attempt to present them with a fait accompli that includes controversial elements, such as the publication of individual ship efficiency data, which had previously been rejected, for the moment at least, by the majority of governments at IMO.” ICS members agreed that when the IMO negotiations resume at the Marine Environment Protection Committee in May, it will be vital for EU member states to explain how the new EU regulation can be implemented in a way that is compatible with whatever may be agreed by IMO for global application.

ICS remains concerned that the ultimate motive behind the EU regulation is to establish a mandatory ship efficiency indexing system that will be used to penalise ships financially, in a manner that could lead to a serious market distortion throughout the global shipping industry.

“K” Line executive sentenced An executive of Japan-based Kawasaki Kisen Kaisha (“K” Line) has pleaded guilty and was sentenced to 18 months in a US prison for his involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, rolloff cargo, such as cars and trucks, to and from the United States and elsewhere, the US Department of Justice announced.

According to the one-count felony charge filed in the US district court for Maryland in Baltimore, Hiroshige Above: ICS chairman Masamichi Morooka

68 – Spring 2015

Tanioka, who was at various times an assistant manager, team leader and general manager in “K” Line’s car carrier division, conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore. Tanioka participated in the conspiracy from at least as early as April 1998 until at least April 2012.

Roll-on, roll-off cargo is noncontainerised cargo that can be both rolled onto and off an ocean-going vessel.

Examples of this type of cargo include new and used cars and trucks and construction and agricultural equipment.

“For more than a decade, this conspiracy has raised the cost of importing cars and trucks into the United States,” said assistant attorney general Bill Baer for the US Department of Justice’s antitrust division. “Today’s sentencing is a first step in our continuing efforts to ensure that the executives responsible for this misconduct are held accountable.”

The sentence was the first to be imposed against an individual in the division’s ocean shipping investigation. Previously, three corporations have agreed to plead guilty and to pay criminal fines totalling more than $136 million, including Tanioka’s employer “K” Line, which was sentenced to pay a criminal fine of $67.7 million in November 2014.

Pursuant to the plea agreement, which was accepted by the court today, Tanioka was sentenced to serve an 18-month prison term and pay a $20,000 criminal fine for his participation in the conspiracy. In addition, Tanioka has agreed to assist the department in its ongoing investigation into the ocean shipping industry.

Tanioka was charged with a violation of the Sherman Antitrust Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for an individual. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Heavy lift

Heavy duty There have been a number of key projects for heavy-lift companies recently, as well as changes at the top

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ansa Heavy Lift announced the completion of a long-term financial agreement with its core banking group for its fleet of heavy-lift vessels last month.

Commenting on the agreement, chief executive Roger Iliffe said: “We are very happy to announce that, after four years of steadily growing our business in a very difficult market, we were able to create a long-term financing arrangement acceptable to our banking partners.

“Our strong and improving performance within the heavylift market, together with the support of Oaktree Capital Management, were the key to being able to strike this longterm deal.

“We would like to thank all of those involved in this lengthy process and look forward to continued success for 2015 and beyond. Hansa Heavy Lift goes into 2015 with the right financial structure to ensure its continued growth.

“Unfortunately, despite our best efforts, we have not yet been able to agree to terms on two ships currently financed

by Norddeutsche Landesbank (NORD/LB). We are confident that in due time we will be able to announce a final economic solution for these two ships.”

Hansa Heavy Lift operates a fleet of 21 vessels, including one on long-term charter.

“To meet our customers’ requirements, we are continuing to build up our engineering capabilities around the P2 and P1 vessel classes in addition to our fleet of modern F-Class vessels,” said Joerg Roehl, chief compliance officer and managing director.

One recent job completed by the

company involved using 3D software to simulate lifts before the voyage to ensure safe loading and installation during discharge of three cranes.

HHL Venice sailed open hatch through the Bosphorus to move three cranes from Split in Croatia to Yuzhny Port in Ukraine.

One crane was shipped dismantled, while the remaining two were transported under deck and fully erected with the vessel sailing open hatch.

“Stability during the lift was critical because of the draft restrictions in the port of loading,” said Christoph Ruck, project and transport engineer.

“We undertook a motion response analysis of the vessel for this voyage and worked very closely with the crane manufacturer to ensure we had the correct sea-fastening method in place.”

The available draught alongside during the lift was, on average, only 7m, so that clearance below the keel was sometimes limited to 50cm. The cargo had challenging 28m-high lifting points.

The 3D software was used to simulate the loading and installation alongside in Yuzhny in advance of the voyage to ensure that the clearance between the vessel cranes and the cargo would be sufficient on loading.

Dealex Transport chartered the project on behalf of crane manufacturer Kirow Ardelt.

“Our fleet is ideally suited to support this type of cargo, and we are always pleased to be able to work closely with a customer to overcome this type of challenge. Our six-step process really came into play to make this a successful voyage, with the 3D simulation having an important role in the careful planning needed for this move,” said Roehl.

We are always pleased to be able to work closely with a customer to overcome this type of challenge

Spring 2015 – 69

Heavy lift

Changes at SAL After 33 years in the service of SAL Heavy Lift, and 16 years after taking over the management of the company, Lars Rolner has decided to pass on his duties as managing director and chief operating officer of SAL Heavy Lift to his colleague Toshio Yamazaki.

Yamazaki, with 29 years of experience in the shipping business, knows the company well, having spent the last four years as executive officer jointly managing SAL Heavy Lift from the German headquarters. Before this, he worked in SAL Japan as commercial general manager for four years.

As he symbolically “handed over the reins”, Rolner commented: “I have devoted most of my life to SAL. But now I have decided it is time to hand over my position, because the company is now in good shape.”

Going forward, Rolner will work as managing partner of the maritime engineering company HeavyLift@Sea, which specialises in offshore solutions and ship design.

Yamazaki commented: “We offer the utmost quality for our customers. On this basis, we will continue to develop SAL Heavy Lift further and to progress directly along the path we have chosen.”

He says that he will be building on 70 – Spring 2015

values shared by both German and Japanese colleagues and employees: “Both cultures appreciate innovation and precision. This applies to all of our people in SAL, including our onboard crew, as well as to our engineers and staff working onshore. We are all dedicated to providing innovative solutions in heavylift shipping.”

SAL Heavy Lift, a member of the “K” Line Group, is one of the leading international shipping companies in the area of heavy-lift transportation and project freight, and is based in Hamburg’s HafenCity. It operates a fleet of 18 heavy-lifters.

The company, which was founded in 1980, employs 700 people worldwide, including vessel crew.

TTS Marine TTS Marine in Gothenburg has again secured a contract to supply cargo access equipment to one of Rederi AB Gotland’s newbuildings, to be built at Guangzhou Shipyard in China.

In 1999, TTS received a contract to deliver ro-ro equipment for the same owner at the same yard for two ferries, which were delivered to the owner in 2003.

This time, the vessel is a 1,650-passenger ro-pax ferry for Rederi AB Gotland’s

service between the island of Gotland in the Baltic, with its major harbour, Visby, and the port of Oskarshamn on the Swedish mainland.

The vessel will have a length of about 200m and is a combined ro-ro and passenger ferry with optimised hull form.

It will be powered by liquefied natural gas (LNG) to improve fuel consumption and impact on the environment. The ferry will be the first LNG-powered vessel in the Baltic under the Swedish flag.

The cargo access equipment, which has a total weight of about 280 tonnes, is designed to reduce the turnaround time in port and includes three stern ramp/ doors, bow doors, a bow ramp of folding frame type, provision lifts with covers and side shell doors.

The scope delivered by TTS Marine includes design of equipment, major components and supervision of installation of ro-ro equipment on board.

Per Croner, president of TTS Marine, described the new contract as “an important continuation of TTS Marine AB’s deliveries to the Chinese shipyards for this specialised type of vessel, as well as a continuation of deliveries to Rederi AB Gotland, an important client operating in the Baltic with TTS ro-ro equipment in its previous ferries”.

Heavy lift

Below: the first shipment by RollDock

Dockwise Royal Boskalis Westminster subsidiary Dockwise successfully loaded the ENI Goliat floating production, storage and offloading vessel (FPSO) onboard its largest heavy transport vessel in preparation for its journey to Europe, at the beginning of the month.

The loading took place in Geoje, South Korea, during which time the deck of the Dockwise Vanguard was submerged to receive the cargo.

The Goliat FPSO is owned and will be operated by ENI Norge and was constructed by the Hyundai Heavy Industries (HHI) shipyard in South Korea.

Goliat is the largest cargo loaded on Dockwise Vanguard to date, and has a diameter of 107m. The cargo will be transported around the Cape of Good Hope, Africa, and will be offloaded in Northern Europe.

After delivery of Goliat, Dockwise Vanguard will be mobilised to Rotterdam in the Netherlands in preparation for its next assignment.

On behalf of Bumi Armada Offshore, Dockwise will transport the Armada Intrepid FPSO, (formerly BP’s Schiehallion) from Rotterdam to the Far East. The 42,000 metric tonne FPSO, with a length of 245m and a width of 45m, is the first ship-shaped FPSO to be transported onboard Dockwise Vanguard.

Dockwise Vanguard is a unique vessel capable of transporting extremely large assets. As the world’s largest semisubmersible heavy-lift carrier, she offers an unprecedented capability for transporting fully integrated offshore structures and units, including FPSOs. Dockwise Vanguard has a load capacity in excess of 110,000 tonnes, accommodated on an open-end, free deck space of 275m x 70m. The absence of a raised bow and conventional forward superstructure means that cargo overhang, either forward or aft, is possible. The vessel entered service in February 2013.

Optimization of the AntwerpRotterdam-Amsterdam area (OPTARA) is a refining project worth approximately e700 million.

RollDock was contracted to transport a total of 13 modules, which need to be shipped over three voyages from Tarragona in Spain to Antwerp in Belgium.

The first shipment by RollDock involved four modules which were loaded and discharged by a ro-ro operation.

Two of these modules, weighing approximately 1,000 metric tonnes, were the heaviest of the entire project as well as setting a record for Total Antwerp, the refinery company. The overall project consists of 28 modules, totalling more than 85,000 cubic metres.

BigRoll Shipping has announced recently that COSCO Dalian Shipyard

has been contracted to build two more MC-Class Module Carriers, bringing the total number of vessels under construction to four.

The first two vessels, BigRoll Barentsz and BigRoll Bering, were ordered in 2013 and are scheduled for delivery in late 2015 and early 2016.

The two additional vessels will be named BigRoll Baffin and BigRoll Beaufort. They are due for delivery in mid-2016 and early 2017 respectively.

All BigRoll vessels are named in honour of famous Arctic explorers, inspired by the ships’ suitability for shipping to Arctic areas.

The MC Class is BigRoll’s newly designed Module Carrier vessel. It is designed with particular focus on a high ballast capacity, low fuel consumption, high service speed and excellent sea keeping behaviour, which, in turn, provides lower acceleration forces on the cargo. The innovative hull design coupled to the propulsion configuration ensures safe, reliable and fast transits.

The Dutch-flag MC Class vessels are specifically designed to deliver modules and equipment for large projects and are highly suited to travel to remote areas such as the Arctic as well as directly offshore. They have FinnishSwedish 1A ice classification, and are designed and fully prepared for a DP2 dynamic positioning notation.

Spring 2015 – 71

Salvage

Seeking shelter

Providing a place of refuge for casualties continues to be high on the agenda for salvors

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laces of refuge, property salvage consultants and promoting the Lloyd’s Open Form are three issues that made it onto the International Salvage Union (ISU) agenda this year.

As ISU president Leendert Muller commented at a press lunch in December: “At this lunch last year we talked about the importance of making progress on the issue of places of refuge. And then, just three weeks later, the infamous case of Maritime Maisie occurred off the Republic of Korea. It took months before the burnt chemical carrier was admitted to port, following the intense efforts of Nishibesan and Nippon Salvage. It was a great demonstration of the difficulties we face in this matter. Nevertheless, we have continued to work with the International Union of Marine Insurance (IUMI), the International Chamber of Shipping (ICS) and the International Group of P&I Clubs on places of refuge. Although the UK secretary of state’s representative for maritime salvage and intervention (SOSREP) is working hard to get European consensus, progress internationally is slow, but we shall keep up the pressure.”

Another area Muller highlighted was the idea of introducing a so-called property salvage consultant (PSC) in Lloyd’s Open Form cases that do not involve a special compensation P&I clause (SCOPIC). A special casualty representative is always deployed during a SCOPIC Lloyd’s Open Form case, but this idea is for property interests to send a consultant to monitor the progress of the salvage services in non-SCOPIC Lloyd’s Open Form cases and send regular reports. “It is our view, and that of other parties – notably ICS, the International Group of P&I Clubs, and the Admiralty Solicitors Group – that a PSC is unnecessary,” he said.

“Salvors are engaged to use their best endeavours to save

life, protect the environment and save property. Their pay depends on their success in those objectives, taking account of the circumstances. We therefore reject the PSC proposal, because we do not see that it will add any value; it will increase bureaucracy and could even lead to interference that might hamper the conduct of operations,” said ISU general manager Mark Hoddinott. “But we do recognise the need to ensure all parties are properly briefed on the progress of operations and so we have agreed that, for a trial period, the salvage master will submit to Lloyd’s a daily salvage report (DSR) in a standard format. That report can then be circulated to all interests to keep them updated and sighted on developments.

We do not think there is any need to continue debating the matter during the trial period.”

In a keynote speech to the Salvage & Wreck Removal Conference in London in December, Muller stressed the importance of the Lloyd’s Open Form as a contract. The use of the form has been declining in recent years.

“Lloyd’s Open Form is a clear and simple contract, with standard clauses. It enables rapid intervention in an evolving casualty situation mainly because there is no need to negotiate terms “upfront” and the contract can be quickly agreed with a verbal agreement that is legally binding. It can be signed at a later stage,” he told delegates.

“Perhaps the best demonstration of the fairness of Lloyd’s Open Form is that the majority of cases are settled amicably.

If they are not, there is a clear dispute resolution process using Lloyd’s arbitrators and further possibility to appeal against an arbitrator’s award.”

“We would like to see Lloyd’s put more weight behind communicating the benefits of Lloyd’s Open Form and promoting its use to Lloyd’s underwriters. But we also recognise that there are number of other salvage contracts that

We reject the property salvage consultant proposal, because we do not see that it will add any value

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Salvage

are regularly used and which have their LOC has invited many of the world’s place. And there are, of course, cases leading marine insurers and salvage where other commercial terms are contractors, as well as shipowners and more appropriate.” government representatives, to the Muller also stressed the importance of exclusive, not-for-profit event. salvors to the shipping industry in his More than 200 senior industry remarks to journalists. “No-one wants figures are expected to attend to take to see a casualty, but when there is one, part in discussions on the challenging it is usually only our members who have issues facing the maritime industry the equipment, skill and experience to today. These include the dramatically provide the necessary services. In many escalating cost of salvage and wreck cases, those services prevent environ- removal and the salvage of megaships. mental disaster as our annual pollution Other topics will highlight the work of prevention survey demonstrates.” the International Group of P&I Clubs’ ISU is set to produce its next annual Casualty Working Group and the statistics in March. In a typical year, current thinking of a host of maritime ISU members conduct between 150 and authorities and regulators from the 200 salvage operations and somewhere region, including, but not limited to, between 25 and 45 wreck removals. Malaysia, Singapore, Australia and The gross income for members in 2013 New Zealand, as well as the United was some $800 million, from which Kingdom. salvors paid their own costs and those As one of the world’s foremost casualty of subcontractors. “Our statistics show management experts, LOC, along with income for the year it was received and other industry leaders, believes the it may well relate to jobs conducted in industry must tackle head-on issues previous years. I am bound to say that we such as places of refuge for vessels provide good value for money, and if owners or their insurers complain about the cost of salvage I should remind them that IUMI statistics show that premium income from the marine and offshore sector is, by comparison with our income, more than $30 billion annually,” he said.

An industry forum aimed at producing a practical response to the current crises in maritime casualty management was officially launched in Singapore recently.

Leading international maritime consultancy LOC Group is set to host the forum, the first of its kind, as a cornerstone gathering during the forthcoming Singapore Maritime Week (20-24 April 2015). Singapore is the perfect location for this initiative, being one of the busiest hubs for shipping and a centre of excellence for the management of casualties in the region.

The two-day meeting is aimed at global industry leaders from all parties involved in marine casualties. It takes place on Thursday 23 and Friday 24 April at Above: ISU president Leendert Muller Singapore’s Fullerton Hotel.

and improved casualty management.

Delegates will be encouraged to question these issues and also the current format of many casualty contracts – are they still fit for purpose?

Among the confirmed speakers for the First Asian Marine Casualty Forum will be senior representatives from the Maritime and Port Authority of Singapore, Maritime New Zealand (MNZ) and the Australian Maritime Safety Agency (AMSA), as well as the UK secretary of state’s representative for maritime salvage and intervention.

Senior representatives from the International Group of P&I Clubs, leading hull & machinery and property underwriters, eminent marine lawyers and ISU members will also be making presentations.

Nick Haslam, shipping director of LOC Group, is spearheading this event.

He commented: “There has never been a more crucial moment for the industry to get to grips with the issues facing it today.

“The entire process of maritime casualty management, salvage and wreck removal has changed and demands specific attention from all parts of the industry.

“Initiatives being developed to improve casualty management and create a better understanding between the parties must be heard, debated and positively supported.

“The idea was to launch the forum as an event arranged by the industry for the industry, with all parties as stakeholders having a genuine interest in finding solutions and bringing about improvements.”

Delegates attending the two-day event will experience debate of all these issues, with a mix of formal papers, group discussion and informal interaction.

LOC hopes the gathering will enable it to issue an action plan for industry reform after the forum. This will be circulated to all key parties with the aim of continued dialogue will assist in bringing about changes and a better understanding of maritime casualty management.

Spring 2015 – 73

Technology

Tech talk

There have been a number of new developments in technology for ships

A

ir lubrication

Silverstream Technologies and Shell have announced the successful sea trial of Silverstream Technologies’ new air lubrication technology for ships, the Silverstream System. The sea trials, independently verified by the Lloyd’s Register Ship Performance Team, show net energy efficiency savings in all analysed cases.

Shell funded, and, with Silverstream, oversaw the installation of the Silverstream System on the 40,000 dwt product tanker Amalienborg, owned by leading Danish shipping company Dannebrog Rederi.

“This is a landmark moment for Silverstream Technologies and the development of our air lubrication technology, confirming it as a current and commercially viable solution for reducing fuel costs and emissions within the shipping industry,” said Noah Silberschmidt, chief executive of Silverstream Technologies.

The trials verified by the Lloyd’s Register Ship Performance Team showed net average energy efficiency savings for the vessel of 4.3% and 3.8% in ballast and laden conditions respectively. The figures represent an average from all raw data captured during each trial, which included optimal and non-optimal airflows. Based on the trials, both Silverstream and Shell believe that a fully optimised system has potential to deliver more than 5% efficiency savings on an ongoing basis when deployed on a full-bodied vessel with a large flat bottom.

The Silverstream System produces a thin layer of microbubbles that creates a single ‘air carpet’ for the full flat bottom of the ship. This reduces the frictional resistance between the water and the hull and improves the vessel’s operational efficiency, reducing fuel consumption and associated emissions. The technology can be added to a newbuild design, or quickly retrofitted to an existing ship within just 14 days, as was the case for Amalienborg.

“Following this successful trial, we are confident that we can enhance the already significant savings that we have seen.

We believe these results show that the Silverstream® System can play a crucial role in supporting the shipping industry to increase operational and environmental efficiencies and reduce fuel costs,” continued Silberschmidt.

Adri Postema, Shell’s general manager responsible for shipping and maritime technology, stated: “We constantly look for ways to improve our shipping efficiency, both operationally and with innovative technology. Our maritime technical experts worked closely with Silverstream Technologies, Lloyd’s Register and a number of other parties to achieve a successful trial of this promising technology.”

Nick Brown, marine chief operating officer at Lloyd’s Register, in commenting on the project, said: “Shipowners and operators need to trust the savings and return on investment calculations that manufacturers claim. This trust can only be built by ensuring rigour and transparency within the trial process, to ensure the highest level of accuracy in the projected figures that are communicated to the market. The sea trials for the Silverstream System have been conducted in such a way, with independence ensured throughout.”

Johnny Schmoelker, chief executive of Dannebrog Rederi, commented: “Given impending stringent environmental regulations that will further increase operational costs, energy efficiency technologies that can reduce fuel consumption and associated emissions are critical in limiting the bottom line impact for shipowners and operators. We are proud to be the first owner to install the Silverstream System and demonstrate the efficiency gains.”

A BMT SMART performance monitoring system was fitted to the vessel to record data from the trials. This will continue to monitor the system’s performance over the next 12 months, during normal shipping operations.

A single ‘air carpet’ for the full flat bottom of the ship reduces the frictional resistance between the water and the hull

74 – Spring 2015

Technology

Type approval

CNG development

The Russian Maritime Register of Shipping has issued type approval for the Danelec Marine DM100 simplified voyage data recorder (S-VDR).

This certifies that the Danelec DM100 S-VDR complies with the provisions of the International Maritime Organization’s (IMO) resolution MSC.163(78) and the International Electrotechnical Commission’s IEC 61996-2 ed.2. It also clears the way for replacement of ageing S-VDRs on ships sailing under the Russian flag.

Under the IMO carriage requirements, all passenger and cargoships over 3,000 gross tonnes must be fitted with an approved VDR. S-VDRs are allowed on non-passenger ships constructed prior to 1 July 2002 instead of a full VDR. “The Danelec DM100 S-VDR is designed to provide a solid, safe and simple solution to retrofit systems installed on ships built prior to 2002,” said Hans Ottosen, chief executive of Danelec Marine.

“It is a totally new product based on the same platform as the new-generation DM100 VDR. It incorporates Danelec’s exclusive SoftWare Advanced Protection (SWAP) technology, which facilitates fast and easy shipboard service. The DM100 VDR and S-VDR use the same basic system architecture and share common parts and spares for easy service and repairs worldwide.”

The Danelec DM100 S-VDR also has type approval from the Federal Maritime and Hydrographic Agency of Germany.

The world’s first carrier vessel for compressed natural gas (CNG) is to be powered by an integrated Wärtsilä propulsion system, chosen for its energy efficiency and environmental sustainability. The vessel is being built at the Jiangsu Hantong shipyard in China, ordered

by CIMC Enric and designed by CIMC Oric for end-user Perusahaan Listrik Negara, the Indonesian stateowned energy company. The order with Wärtsilä was placed during the fourth quarter of 2014.

The new vessel will feature a ninecylinder Wärtsilä 34DF dual-fuel main engine operating primarily on gas.

Wärtsilä will also supply the controlled pitch propeller and gearbox, all of which will be fully integrated so as to optimise the propulsion efficiency.

This will be the first dual-fuel powered vessel owned by an Indonesian shipowner. The Indonesian government’s policy is to promote the use of natural gas as a marine fuel because of its environmental advantages.

“This first-ever CNG carrier to be built is indicative of the growing importance of natural gas as a fuel for both landbased and marine applications. We are proud to have been selected to provide the propulsion system for this ship, which is designed with efficiency and sustainability as the main criteria,” says Sanjay Verma, area sales director, Wärtsilä Ship Power.

“We expect that this CNG carrier will be a model for other Indonesian owners as the government’s policy is to promote energy-efficient and cleaner sea transportation through the use of gas fuelled engines. Wärtsilä has always been at the forefront of making it possible for gas to be utilised as a marine fuel, and has tremendous experience and expertise in this area,” says Suryadi Mardjoeki, head of Perusahaan Listrik Negara’s oil-based fuels and gas division.

The 110-metre-long carrier is scheduled to come into operation in May 2016 and will transport CNG from Gresik in East Java to the Indonesian island of Lombok, where the gas will be used to fuel a power plant.

The Danelec DM100 clears the way for replacement of ageing simplified voyage data recorders on ships under the Russian flag

Davit development Norway-based boat handling system and specialised davit supplier Vestdavit has designed a multiple-boat-handling system that will make boat-handling safer and simpler in the hangars and mission bays of warships, seismic craft and expedition yachts. The MissionEase system can stow, launch and retrieve up to seven different rigid inflatable boats (RIBS), daughter boats and unmanned surface vessels (USVs) in high seas from within a protected hangar.

Atle Kalve, development director at Vestdavit, says: “MissionEase is simpler,

quicker, safer and cheaper than any boat-handling system available. It brings together all our experience with naval and seismic ships to make the best use of a hangar or mission bay.”

MissionEase works on a system of hydraulic cradles to move boats safely from stowage positions to maintenance, preparation or launch areas of the mission bay. It links with dual- or single-point davits to deploy or recover boats in high seas from either side of the vessel.

Kalve explains: “The ability to deploy and recover boats safely is part of the main armament of today’s warships, and critical to seismic work and for expedition cruiseships and yachts. A midships hangar or mission bay allows the boats to be stored, maintained, prepared and launched from a safe environment with a dry, high freeboard. But existing systems rely on overhead gantries to move boats within the bay. When the ship is moving, that is dangerous, and slinging and unslinging takes time. MissionEase allows boats to be moved safely and quickly within the bay on the cradles, even in high seas or with a list on the vessel. Boats are fed directly to the davits for launch, or fed directly back into the stow when recovered.”

In addition to a wide range of boat types and sizes, MissionEase can also handle standard teu containers for stores and armament when the vessel is in port.

Vestdavit is patenting the multicradle apparatus at the heart of the MissionEase system and is in discussions with major navies about fitting it to the next generation of warships.

Spring 2015 – 75

EVENTS & EXHIBItions

LNG Shipping Conference 2015

SMM India

Nor Shipping 2015

SMM India is the world’s leading

Nor-Shipping is the leading maritime event

If you want to stay abreast of global changes

shipbuilding trade fair, which means

week. Its top-quality exhibition, high-level

in the industry and develop strategies to

experience, quality, competence,

conferences and prime networking

capitalise on new opportunities for the LNG

networking and service.

opportunities attract the cream of the

fleet, don’t miss this year’s LNG Shipping

www.10times.com/smm-india

international maritime industry to

24-25 February – london

2-4 April – MUMBAI

Conference.

www.informamaritimeevents.com/event/ LNG-Shipping-Conference

Maritime Security Management Asia

2-5 June – oslo

Oslo every other year.

Global Liner Shipping Conference 21-22 April – hamburg

www.messe.no/nor-shipping

INMEX SMM India 2015

Global Liner Shipping Conference 2014:

23-25 September – MUMBAi

Consolidation, collaboration and the future

INMEX-SMM India is the number one

25-26 February – singapore

of container shipping.

meeting place for the maritime and shipping

ACI’s 5th Maritime Security Management

www.globallinershipping.com

community in South Asia. The event

Asia: By attending, shipping companies can be updated on the evolving security threats that exist at sea.

www.wplgroup.com/aci/conferences/ eu-mps5.asp

attracts over 650 exhibitors from around

Sea Asia 2015

the world including international pavilions from Germany, Singapore, Holland, Norway,

21-23 April – singapore

Korea, Finland, and The Netherlands.

Asia’s premier maritime exhibition and

www.inmex-smm-india.com

conference will return to Singapore for its

European Shipping Week 2-6 March – BRUSSELS

European Shipping Week is intended to be a platform where policy-makers from the main EU institutions will meet and engage

5th edition in 2015 from 21-23 April.

www.sea-asia.com

East Africa Oil & Gas Expo 2015

Gastech Singapore

27-30 October – singapore One of the world’s largest and most prestigious LNG and natural gas conferences and exhibitions, Gastech, is coming to

with European shipowners and other

27-29 April – Nairobi, Kenya

Singapore in 2015, reflecting

stakeholders from the shipping sector.

The 4th Oil & Gas Africa - Int’l Trade

the country’s growing strategic

www.europeanshippingweek.com

Exhibition, 27th to 29th April 2015,

importance as a regional hub for

is a hub for key players in the oil and

the Asian gas market.

gas community, attracting leading oil,

www.gastechsingapore

CONNECTICUT MARITIME SHIPPING 2015 23-25 March – stamford

gas and petroleum companies from around the world.

www.expogr.com/kenyaoil/

Where experts from around the world speak on many issues that will shape the future of the maritime industry.

www.shipping2015.com

The 9th International FUJCON 2015

IMDEX ASIA

maritime meeting place for innovative

IMDEX Asia is Asia Pacific’s premier

technology and complex shipbuilding.

international maritime defence show and a

www.europort.nl

must-attend event in the global naval and

www.imdexasia.com/about-imdexasia.html

76 – Spring 2015

organised in the world port city of Rotterdam, will be the international

maritime security calendar.

www.cconnection.org/event/FUJCON/2013/ resources/CC14276_FUJCON2015_ Postcard_FA_WB.pdf

From 3 - 6 November 2015 Europort,

Coming to its 10th edition, the biennial

FUJCON enjoys international recognition diversified sectors of the bunkering industry.

3-5 November – Rotterdam

19-21 May – singapore

23-25 March – Fujairah, UAE and attendance from 46 countries covering

Europort 2015