Wsi summer 2015

COMPREHENSIVE

COVERAGE

OF

THE

SHIPPING

INDUSTRY

GOING GREEN What’s the price?

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

SUMMER 2015

WORLD SHIPPING

SUMMER 2015

– ALTERNATIVE FUELS – Competitive LNG for Canada

– SHIP BUILDING – Tough Times for Far East yards?

– MISSIONS FOCUS – Jonathan Lux, mediator, arbitrator and barrister with Stone Chambers

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WORLD SHIPPING SUMMER 2015

WORLD SHIPPING

SUMMER 2015

COMPREHENSIVE

COVERAGE

OF

THE

SHIPPING

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

– ALTERNATIVE FUELS – Competitive LNG for Canada

– SHIP BUILDING – Tough Times for Far East yards?

– MISSIONS FOCUS – Jonathan Lux, mediator, arbitrator and barrister with Stone Chambers

WO R L D S H I P P I N G / F R E I G H T F O C U S

GOING GREEN What’s the price

FROM THE

– EDITOR – PUBLISHER W H ROBINSON

EDITOR SANDRA SPEARES sandra.speares@mar-media.com

PROJECT DIRECTOR DAVID SCOTT david.scott@mar-media.com

PROJECT CONSULTANT ALEX CORBOUDE alex.corboude@mar-media.com

DESIGNER JUSTIN IVES E-mail: justindesign@live.co.uk

T

here have been many issues to hit the maritime industry in recent months. Will the market recover in the short term or are we in for a long haul here?

Market pundits are taking these matters onboard and making predictions as to where the industry is going next. However, as shipowners and operators agonise about new ballast water treatment systems or whether they are going to install scrubbing technology as opposed to opting for low-sulphur fuels, some fundamental problems remain.

While green concerns have their part to play, these issues relate to safety at sea for crew members and whether they are being tackled in an effective manner.

Deaths in enclosed spaces continue, despite the amount of advice provided by specialist teams. The impulse to help your fellow crew member in a critical situation is overwhelming, but there needs to be a system – and the right equipment – in place to ensure you can do that safely.

With repeated deaths in enclosed spaces continuing to happen, it would be easy to imagine the industry is not taking the issue seriously, but this is clearly not the case.

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

One other humanitarian issue that has been on the agenda in recent months is the industry’s response to the challenge of migrants setting sail in small vessels to try and reach a place of safety from political and economic crises.

While Italy has been spearheading a massive effort to deal with the issue, it is clear that dynamic measures will have to be instigated to deal with the dilemma – and ones that do not put the onus on individual countries.

Summer 2015 – 1

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CONTENTS 05 – NEWS

35 – TOWAGE & SALVAGE

57 – BUNKERING

NEWS ROUND UP

SALVAGE SUPPORT

ALTERNATIVE OPTION

09 – SHIP MANAGEMENT Call for mandatory enclosed space training and new IMO rules

Peer van Oosterhout and Ad de Klerk from BMT Surveys share their experiences in salvaging a cargo worth several million euros from the Mediterranean seabed

There have been a number of innovations in the use of alternative fuels recently as operators seek to cut costs and deal with the new emissions legislation

11 – HEAVYLIFT

37 – REGISTRIES

BE PREPARED OR FOREWARNED IS FOREARMED

ON THE REGISTER

60 – ASIA PACIFIC

There have been some new developments with the registries recently

DOWNTURN IN THE OFFSHORE MARKET TO HIT YARDS IN THE FAR EAST

CODE ON SEAFARERS WELFARE

Sandra Speares investigates what type of legal support a heavylift and project forwarding supplier should have at its fingertips

14 – SHIP AGENCY AGENT AGENDA Agents have been moving into new markets

16 – INSURANCE REDUCING RISK Insurers have been issuing advice aimed at risk mitigation

18 – EDUCATION AND TRAINING IN TRAINING Training and education are of paramount importance in ensuring a good supply of highly qualified personnel to man the increasingly technical ships being operated, particularly at a time of crew shortage

41 – CLASSIFICATION ECO-FRIENDLY TRANSPORT Alternative transport solutions are part of the mix for class societies

43 – CANADA LIQUID POTENTIAL Canada could find itself in a position to deliver more competitive LNG, says Platts

48 – NORWAY THE EFFICIENCY OF EVERY DOLLAR Finn Bjørnstad and Birgitte Karlsen, partners at Wikborg Rein’s London law office, explore how cost continues to be a primary driver in North Sea investment decisions

51 – MARITIME SECURITY

26 – LEGAL “LONDON LEADING?”

With so many lives being lost as migrants try to flee war zones, it is clear that more action needs to be taken to stop deaths

30 – REGULATION GREEN ISSUES Global emissions have been high on the agenda in recent months along with ballast water treatment systems

54 – INTERVIEW – SINBAD THE TRANSFER TEAM WS takes a closer look at Dubai-based logistics provider Sinbad Navigation

62 – GREEN SHIPPING GREEN ATTENTION With the advent of emission control areas from 1 January, there has been much concentration on scrubber systems as a means of meeting the lowsulphur requirements

67 – MARKETS TOUGH TIMES CONTINUE Markets conditions remain difficult

70 – BOOK REVIEW

MIGRANT ACTION

Jonathan Lux, mediator, arbitrator and barrister with Stone Chambers, discusses whether London’s dominance in international commercial dispute resolution will continue

Clare Calnan and Rob Jardine-Brown, partners at Wikborg Rein’s law offices in London, look at the future for offshore construction projects

TREAD LIGHTLY Irene Rosberg takes a look at the shipping strategies for an assetlight era that are to be examined in a new book by Professor Peter Lorange

71 – PREVIEW NOR-SHIPPING Key maritime leaders will be flocking to Nor-Shipping both to do business and to network

72 – EVENTS & EXHIBITIONS

32 – TECHNOLOGY TALKING TECHNOLOGY Singapore’s port authority has recently agreed an ambitious programme of R&D development

WORLD SHIPPING

BUNKERING

GREEN SHIPPING

MARITIME SECURITY

ASIA PACIFIC

FREIGHT FOCUS

Summer 2015 – 3

NEWS

NEWS ROUND UP ISS EXPANDS IN CANADA Inchcape Shipping Services (ISS), the world-leading marine, cargo and supply chain solutions provider, has expanded its operations in North and Central America with the opening of a new office in Anchorage, Alaska.

The new office will give ISS a physical presence in this strategically important area of Alaska, with the team focusing on offshore logistics in support of the regional oil and gas industry.

Jessica Davis has been appointed as port manager for the Anchorage office. With 12 years’ experience in the shipping industry, Jessica previously worked in Dutch Harbor, Alaska.

Tod Gannett, Inchcape’s vice-president, West USA/ Canada, Alaska and Hawaii, comments: “The opening of this office will allow us to much better serve our current client base, as well as explore new business opportunities in the region.”

Matt Lee, general manager, Seattle and Alaska, added: “We are pleased to welcome Jessica, who will be managing ISS Anchorage as the gateway to Alaskan ports. She will play a key role in growing ISS’s presence in Anchorage, a key hub and pipeline to remote ports in Alaska, as well as our Dutch Harbor satellite office.”

NEW ACCOUNTING STANDARDS DELAYED Proposals to push back by 12 months the implementation dates for new international accounting standards covering revenue recognition will have implications for many companies, including those in the shipping industry.

On 28 April, the International Accounting Standards Board (IASB) tentatively decided to defer by one year implementation of the IFRS 15 “Revenue from Contracts with Customers” standard.

While the vote was not unanimous, with 11 members in favour of the change and three against, it is now extremely likely that the new standard will apply only for accounting periods beginning on or after 1 January 2018.

Before finally ratifying the decision, the IASB is proposing to issue a narrowscope exposure draft. A response period of at least 30 days is expected, with the intention to finalise the implementation dates by July 2015.

The IASB decision to defer implementation follows the 1 April decision of the US standard-setter, the Financial Accounting Standards Board (FASB), to draft a proposed accounting standards update (ASU) modifying the implementation timetable for the new revenue recognition standard, also putting back the implementation deadline by one year.

The Proposed Accounting Standard Update, Revenue from Contracts with Customers (Topic 606), was issued on 29 April. If ratified, it will accomplish the deferral and early adoption provisions which were voted upon at the 1 April meeting of the FASB. As part of the update, the FASB has also asked for feedback on specific issues in order to better inform its decision process.

Early adoption of the standard will continue to be permitted by the IASB and is now expected to be allowed by the FASB. David Chopping, technical partner at Moore Stephens, London, says: “There are many reasons why IFRS 15 is likely to be deferred, but the main issues relate to the time that some companies need to develop policies, systems and expertise in order to be able to follow the new standard.

“Changing the basis for recognition of what is the largest single figure in most companies’ accounts is always going to be a complex and time-consuming task, not least for those in the shipping industry.

“Feedback to IASB, FASB and the IASB / FASB Transition Resource Group (TRG) indicates that some preparers of accounts are convinced that it is going to take even longer than originally thought.

“There are also some possible changes to the standards being recommended by the TRG. If these go ahead, it will mean that some companies will have to amend what they are planning to do to deal with implementation based on the standards as currently in issue.

“Even if they don’t, it still has an effect – companies are understandably reluctant to commit time and resources to new standards until they are entirely confident that the new standards won’t change again before coming into force.”

Michael Halkias, a principal with MSPC, New York, says: “Given that these rules have been gestating for almost 13 years, the proposed delay is perhaps not altogether surprising. Although the decision by the FASB to change the implementation date and allow early adoption is considered tentative, the minutes of the meeting show that votes held on both the deferral and the ability to adopt early were unanimous (7-0).

“Allowing entities to adopt early is a significant change from the initial guidance, which forbade early adoption.

This also adds a considerable additional level of complexity when comparing the results of different entities, as there are now essentially four different potential adoption dates in total for publicly-listed and non-public companies which follow US reporting rules.”

Summer 2015 – 5

NEWS

PANAMA MODIFIES TOLLS STRUCTURES The Cabinet Council of the Republic of Panama has officially approved a proposal to modify the Canal tolls structure, following a recommendation from the Panama Canal Authority (ACP) board of directors.

The accepted proposal, which modifies the pricing structure for most canal segments, will better facilitate the goal of providing outstanding service and reliability to the global shipping and maritime community using the canal, while allowing the ACP to safeguard the competitiveness of the waterway.

The move follows more than a year of informal consultations with representatives from various industry segments, an open call for comments, and a public hearing to solicit industry feedback on these changes.

“After working in close cooperation with our partners in the maritime industry, I am pleased we will be able to provide a more bespoke pricing solution for our customers; one that recognises

their various needs and requests, while still appreciating the value and reliability provided by the route,” said Panama Canal Authority administrator and chief executive Jorge Quijano.

Most segments will now be priced based upon different units of measurement to meet and align with the diverse traffic transiting the locks. For instance, dry bulkers will be based on deadweight tonnage capacity and metric tonnes of cargo. Liquefied natural gas (LNG) and liquefied petroleum gas (LPG) vessels, will be based on cubic metres, and tankers will be measured and priced on the Panama Canal Universal Measurement System (PC/UMS) tons and metric tonnes of cargo. Containerships will continue to be measured and priced on teus, and passenger vessels will continue to be based on berths or PC/UMS. In addition, a new Intra Maritime Cluster segment has been created, which includes local tourism vessels, marine bunkering and container transshipment

vessels that do not compete with international trade.

The restructuring of the tolls will also be implemented alongside a customerloyalty programme for the container segment, a first for the ACP. Frequent container customers will now receive premium prices, once a particular teu volume is reached.

“The ACP deeply values the relationships we share with our customers,” Quijano continued. “As we prepare for the completion of the canal’s expansion programme, we look forward to continuing to provide the same superior reliability, service and value to our customers, as well as now accommodating longer, wider ships and the new LNG segment.”

The newly approved toll adjustments for all market segments are scheduled to come into effect on 1 April, 2016, except for the new Intra Maritime Cluster segment, which will come into effect with this approval.

WRECK REMOVAL Wreck removal has become an increasingly costly business, as evidenced by the cost of removing Costa Concordia and Rena, and 14 April saw the entry into force of the Nairobi International Convention on the Removal of Wrecks.

This places strict liability on owners for locating, marking and removing wrecks deemed to be a hazard.

It also makes state certification of insurance, or other form of financial security for such liability, compulsory for ships of 300gt and above. States parties also gain a right of direct action against insurers.

The convention aims to provide a set of uniform international rules for removing wrecks within a state’s exclusive economic zone (EEZ).

6 – Summer 2015

At the heart of the convention is the provision of a legal basis for states to remove, or have removed, wrecks that could prove a hazard to shipping or to the environment.

Other provisions contained within the convention include: • a duty on the ship’s master or operator to report to the “affected state” a maritime casualty resulting in a wreck and a duty on the affected state to warn mariners and the states concerned of the nature and location of the wreck, as well as a duty on the affected state that all practicable steps are taken to locate the wreck; • criteria for determining the hazard posed by wrecks, including depth of water above the wreck, proximity of shipping routes, traffic density

and frequency, type of traffic and vulnerability of port facilities.

Environmental criteria, such as damage likely to result from the release into the marine environment of cargo or oil, are also included; • measures to facilitate the removal of wrecks, including rights and obligations to remove hazardous wrecks, which set out when the shipowner is responsible for removing the wreck and when the affected state may intervene; • liability of the owner for the costs of locating, marking and removing wrecks – the registered shipowner is required to maintain compulsory insurance or other financial security to cover liability under the convention; • settlement of disputes.

NEWS

PASSENGERSHIP SAFETY The International Maritime Organization (IMO) conference on the enhancement of safety of ships carrying passengers on non-international voyages, held in Manila, the Philippines, on 24 April 2015, has adopted guidelines to aid the process of reducing the mounting toll of accidents involving such vessels by addressing the question of whether a ship is fit for purpose in its intended role.

The “Manila Statement”, adopted by the conference, acknowledges the urgent need to enhance the safety of ships carrying passengers on non-international voyages in certain parts of the world. It urges states to review and update national regulations in relation to their passenger ferries and to apply the guidelines, in order to address the continuing unacceptable loss of life and damage to the environment and property resulting from marine casualties and incidents involving such vessels.

Speaking at the closing session of the conference, which was hosted by the government of the Philippines, IMO secretary-general Koji Sekimizu said that domestic ferry operations played a crucial role in the movement of people and goods, and sometimes represented the only possible and/or reasonably affordable means of transport.

“The public expects safety standards on domestic passenger ferries to be as strong as those on international vessels,” Sekimizu said.

“The perils of the sea do not distinguish between ships engaged on international or non-international voyages, and the protection of life at sea is a moral

obligation. Those travelling by domestic ferries should enjoy the highest practicable standard of safety, irrespective of their citizenship.”

The Manila Statement highlights that the safety of domestic ferries is a shared responsibility between and among governments; local authorities; shipowners, shipmanagers, shipoperators; shipboard personnel; maritime education and training institutions; classification societies and organisations which governments authorise to survey and certify domestic ferries for compliance with the applicable laws, regulations and rules; insurance providers; port authorities, port terminal owners and operators; and the public and civil society as users of the services provided.

“Casualties and incidents involving domestic ferries can be avoided if adequate laws, regulations and rules are developed and effectively implemented and enforced,” Sekimizu said.

The conference was attended by representatives of 13 member states as well as observers from international organisations.

The Manila Statement strongly recommends the use of the guidelines on the safe operation of coastal and interisland passengerships not engaged in international voyages.

The guidelines address issues relating to: the purchase of a secondhand ship intended to enter into service as a domestic passengership; a change in operating limits; the conversion or modification of a ship before it enters

into service as a domestic passengership; passenger counting and voyage planning.

They can also be used to check the operation of ships which are already providing passenger services, while the guidelines relating to passenger counting and voyage planning can be used in daily operations.

The statement also urges states that need technical assistance on matters relating to the operation of domestic ferries to seek such assistance from IMO or from other states.

The outcome of the Philippines conference will be reported to IMO’s Maritime Safety Committee, Technical Cooperation Committee and SubCommittee on Implementation of IMO Instruments.

The conference was organised in the context of an ongoing programme conducted by IMO, through its technical cooperation programme, to improve the safety of sea and inland waters transport operations in several countries and regions, while recognising that the regulatory framework for domestic passenger ferries varies considerably from place to place.

Since 2006, activities relating to domestic ferries have been pursued in partnership with the international nongovernmental organisation Interferry.

This has included a series of forums on the safety of domestic ferries in the East Asia sub-region and for Pacific Island countries and territories, as well as the implementation of a national pilot project in Bangladesh and the development of training programmes.

“Casualties and incidents involving domestic ferries can be avoided if adequate laws, regulations and rules are developed… and enforced” Summer 2015 – 7

NEWS

SALVAGE SERVICES Members of the International Salvage Union (ISU) provided 216 services to vessels carrying 1,655,399 tonnes of potentially polluting cargoes during operations in 2014 in a major demonstration of the value of its work towards protecting the marine environment.

President of the ISU, Leendert Muller, said: “Yet again, our members are to be congratulated for the great benefit they have delivered in helping to protect the marine environment from potential damage. We represent a vital service to both the shipping industry and wider society. Shipping has generally become safer, but everyone in the industry should be aware that just one major casualty could cause an environmental disaster.”

The numbers are published in the ISU’s 2014 “Pollution Prevention Survey”, which has been rebased, meaning direct comparisons with previous years’ totals and some sub- categories are not appropriate. The 2013 survey showed ISU members salvaged 718,000 tonnes of potential pollutants in 190 services.

Commenting further on the results, Muller said: “For some while, ISU has been concerned that its annual pollution survey should be updated. The survey started in 1994 – an era when the threat, and fear, of pollution was driven by disasters associated with very large crude carriers (VLCCs). That threat still exists, but coastal states – and society as a whole – now consider most cargo to be potentially polluting. Since the survey began, containerised cargo has grown hugely in both total volumes and the capacity of boxships. Containers, with their mixed and sometimes hazardous contents, are undoubtedly a potential pollutant, and it is right that our survey should start to record them as such.

“ISU is careful to point out that not all of the salvaged cargo noted in the survey was at imminent risk of going into the

sea. But even with a relatively simple rescue tow, it is worth considering what the consequences might be if there was no commercial provision of salvage services.”

The new format of the survey records separately for the first time dirty or hazardous bulk cargo and containers (by tonnes equivalent). It follows debate at the 2014 annual general meeting of the ISU, at which members considered the best way to present their pollution prevention efforts. The format takes account of the International Convention on the Prevention of Pollution from Ships (MARPOL), the International Maritime Dangerous Goods Code (IMDG Code), guidance from the International Association of Dry Cargo Shipowners (Intercargo), P&I Club guidance; International Tanker Owners Pollution Federation publications; and the International Maritime Solid Bulk Cargoes Code. The attitude of coastal state authorities has also been considered, based on ISU members’ operational experience.

The figures for 2014 therefore represent a modified survey and will create a new baseline against which future years may be compared.

In 2014, ISU members provided 216 services. Variants of wreck removal contracts were used in 61 services; Lloyd’s Open Form – 29 services (44 in 2013); towage contracts – 29 services; Japanese form – 19 services; fixed price – four services; day rate – 12 services; other contracts – 32 services.

In the period 1994 to end-2013, ISU members salvaged 18,575,702 tonnes of potential pollutants, an average of just under one million tonnes per year. This consists of 13,142,007 tonnes of oil cargoes; 1,307,706 tonnes of chemicals; 1,616,101 tonnes of bunker fuel and 2,818,565 tonnes of “other pollutants”.

2014 ISU POLLUTION PREVENTION SURVEY RESULTS (TONNES) 2014

2013

216

190

Bunker fuel

83,698

106,146

Oil cargo

194,880

165,395

Chemicals

102,939

147,987

Bulk polluting/hazardous

901,373

N/A

Teu (tonnes equivalent)

356,265 (23,751teu @ 15 tonnes/teu)

Other pollutants

16,244

299,074

1,655,399

718,602

Number of services

Totals

*Note: changed survey methodology for 2014 invalidates direct comparison of totals and some sub-categories

8 – Summer 2015

SHIP MANAGEMENT/SEAFARERS WELFARE

CODE ON SEAFARERS WELFARE Call for mandatory enclosed space training and new IMO rules

N

autilus International is calling for the UK to lead a “new and concerted drive to end the appalling litany” of seafarer fatalities in enclosed spaces.

The union wrote to the then shipping minister John Hayes following the accident, in which two seafarers died in a cargohold of the Isle of Man-flagged Carisbrooke Shipping general cargo vessel Sally Ann C in March.

Investigations into the incident, which took place off the coast of West Africa, are under way, but it is known that the chief officer and chief engineer died after entering a hold where timber was stowed and the second officer had to be rescued after losing consciousness when he went to the aid of his colleagues.

In a letter to the minister, Nautilus general secretary Mark Dickinson said the case followed a “very familiar pattern of one crew member collapsing in an oxygen-deficient area, and two more being overcome after entering the space without personal protection equipment in an attempt to rescue their colleagues”.

Dickinson said there is evidence to show that more seafarers die or are injured in enclosed spaces than through any other onboard work activity. “Changes in ship design and operation, the nature of cargoes, the increasing amounts of chemicals being carried, along with reduced manning levels and radical changes in crewing practices, are all factors which have driven the increase in such incidents,” he added.

He warned the minister that simply continuing to warn seafarers of the dangers is not sufficient and he urged the UK to lead European and international efforts to develop fresh approaches to the issue.

Nautilus says mandatory training requirements are needed and that IMO rules should also ensure that all ships are equipped with oxygen meters to ensure crew can test the atmosphere in enclosed spaces.

“Better consideration should be given during the design and build stages to address some of the inherent risks – and the arrangements for rescue in particular,” Dickinson added. “We believe that requirements for oxygen meters to be positioned at the entrance to enclosed spaces would reinforce to seafarers the potential risks that they face, as well as providing ready access to information about the state of such spaces.”

The union is also calling for improvements to secure a much better standard of risk assessments – moving away from a generic assessment to one that addresses particular hazards or design features associated with each individual enclosed space.

“The tragic accidents in enclosed spaces have resulted in a spate of investigation reports and resulting recommendations, as well as a steady flow of material to reinforce the precautions that should be taken,” Dickinson told the minister. “However, the continued death toll should surely tell us that something is wrong with this approach. I hope you can support our aim to deliver innovative thinking to address the situation and to find improved ways of tackling some of the fundamental problems. We really cannot afford to continue witnessing the shocking scale of fatalities that currently blight the industry.”

Last month, four people were found unconscious in the cargohold of a general cargo ship in Hanstholm, Denmark.

One man died, and the others were taken to hospital, after wood pellet cargo-handling operations on the 7,500 dwt ship Corina. A fifth man managed to escape the cargo hold before being overcome.

Also in April, three men died after entering the cargohold of a ship in the Port of Antwerp. In this instance, the cargo had been coal.

The requirement to conduct enclosed space entry drills and training every two months became mandatory under amendments to The International Convention for

“More seafarers die or are injured in enclosed spaces than through any other onboard work activity”

Summer 2015 – 9

SHIP MANAGEMENT/SEAFARERS WELFARE

the Safety of Life at Sea (SOLAS) as of January 2015.

Videotel has backed the call by Nautilus for the UK shipping and ports minister to lead regulatory reforms to protect seafarers from the dangers of enclosed spaces.

Nigel Cleave, chief executive of Videotel, says the dangers of seafarers entering enclosed spaces without the necessary training and equipment are of the utmost concern. “Seafarers are dying unnecessarily and we will continue to hammer home the need for the industry and government to work together to ensure such incidents are a thing of the past. One death from such a situation is one death too many,” says Cleave.

According to the International Maritime Organization (IMO), enclosed spaces are characterised by having limited openings for entry and exit, inadequate ventilation, or a design not intended for continuous worker occupancy. Examples include cargo spaces, double bottoms, fuel tanks, ballast tanks, cargo pumprooms, compressor rooms, chain lockers, and any other confined spaces that may be oxygen deficient or have unsafe atmospheres.

Videotel produces “Entry into Enclosed Spaces”, an entire suite of training programmes in interactive CDROM and Videotel on Demand (VOD) format with supporting booklets.

Intended for both onboard crew and shore-based personnel, the seven-edition series explains all relevant regulations and guidelines, raises awareness of the hazards of enclosed space entry, explains enclosed space entry procedures and the equipment required for safe entry into enclosed spaces, and provides details about emergency procedures, rescue techniques, and the use of a selfcontained breathing apparatus.

To complement the “Entry into Enclosed Spaces” training series, Videotel recently launched, in conjunction with the UK’s Mines Rescue Service, the innovative and unique “Enclosed Space Management System”. The system is designed to help effectively assess, audit, and manage the safety of enclosed spaces and combat the number of accidents and fatalities that all too often occur when problem areas are overlooked.

10 – Summer 2015

“Enclosed Space Management System” is currently the only computer-based system available that enables vessels and installations to comply with the IMO’s 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 SOLAS recommendations for enclosed spaces.

“Enclosed Space Management System” provides an auditing process to follow, allowing safety risks to be identified and solutions to be put in place. The system is intended for contractors, surveyors, port state inspectors, office staff and onboard staff. All crew members 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 safety risks are lowered, even if onboard personnel change. It also provides ready access to all essential information needed to enter and work within an enclosed space as safely as possible. Gathered information can be viewed ashore as well as on the vessel and a PDF report can be sent directly to any third party by email, as required. The system itself is updated at regular intervals to reflect changes in laws and regulations.

“Given the unacceptable number of fatalities recorded in recent years, the ‘Entry into Enclosed Spaces’ series was considered so vitally important that we produced not one, but seven programs,” says Cleave. “The series plus the ‘Enclosed Space Management System’ all rate at the very top of our ‘must see’ training.”

which is caused by eating tropical fish that consumed toxin-producing algae.

“When I am onboard vessels training the crew on menu preparation and food hygiene, I give clear instructions to all crew members not to go fishing for fresh fish when ships are at anchor, as you don’t know if the fish has been caught in red tides. Nor are you able to detect whether any caught fish has toxins within their system, as that can only be obtained by laboratory examination of the product.

“Shipowners and managers should buy their fish products from reputable suppliers as this proves traceability of the product purchased and complies with due diligence procedures should anyone should become sick. This is also backed up by written food temperature controls in which any meal can be traced back to the menu,” he said.

Shipowners can find themselves privately sued for damages if a claimant can prove that the Food Safety Act 1990 has been breached and due diligence has not been carried out, Anderson warned.

FISH DANGER

Allowing seafarers to eat fish they have caught off the side of their ship is a sure way for the crew to contract food poisoning and it can take a whole ship out, according to one of the shipping industry’s leading voices on food quality and catering standards onboard ship.

This comment by Henry Anderson, consultant chef and founder of Marine Catering Services, followed recent media reports that 14 crew from a Japanese bulker in Canada were hospitalised after they contracted ciguatera fish poisoning,

Above: Henry Anderson, consultant chef

HEAVYLIFT

BE PREPARED OR FOREWARNED IS FOREARMED Sandra Speares investigates what type of legal support a heavylift and project forwarding supplier should have at its fingertips

T

here are many occasions when having access to proper legal advice can stop a problem before it starts. Cases involving cargo carried on deck can be complex and may involve arguments over the contract, the law that applies and the weight or package limitation, if there is any.

For example, it may not be clear whether the Hague Rules or the Hague-Visby Rules apply – if, indeed, either of them do.

According to Caroline Bridge, legal director at Hill Dickinson’s Manchester office, “heavylift, by its nature, is quite a complex area of transportation and so, from a loss prevention perspective, there are various things that can be looked at in advance to try and minimise that risk of something going wrong”.

That list, she says includes making sure you have the right experts on the job, including freight forwarders, carriers and insurance brokers. Another issue is making sure the right planning is in place for the job – for example, the right route, the right method of transport and making sure the carriers have the right equipment and that operators have the right methods of securing and lashing the cargo.

Another issue is to make sure the right contract is in place. It is important to ensure that obligations under the supply contract marry up with the contract of carriage that is being entered into with the logistics operators. International conventions carry standard terms and conditions, which cover the issue of what can be recovered in the event of a claim. There are obviously time bars and “that can leave quite a significant shortfall if

you are moving valuable goods around”. This is where marine cargo insurance has a vital role to play if there is a potential exposure further down the supply chain.

While there are legal cases relating to heavylift and project cargo, relatively few have been reported. One of the big issues Bridge sees from the legal perspective is the shortfall between the value of the goods and what operators are prepared to pay if something goes wrong. Also, from the operator’s perspective, they have to ensure that they have the right terms and conditions in place with specialist workings so that if something does go wrong their responsibilities are clearly defined, she says. Hill Dickinson tries to encourage parties to make sure that the contract and the terms and conditions of bespoke contracts are appropriate for the kind of work being undertaken.

So how do heavylift contracts differ from other kinds of shipping contract? She says that it is more to do with the specialist nature of the cargo. “You are obviously dealing with out-of-gauge cargo or you might, for example, have a lot of cargo being moved within a very specific timeframe.” There might also be very specific requirements in relation to the handling of the goods.

Where Hill Dickinson sees disputes is in cases where the parties are not sure who is responsible for what. The owner of the goods might expect the logistics operator to be responsible for loading or lifting the cargo, but that operator might have a clause in the contract which exempts them from liability in that situation.

“We encourage our clients to look at the contract before, not afterwards, when something has gone wrong,” says Bridge.

“We encourage our clients to look at the contract before, not afterwards, when something has gone wrong”

Summer 2015 – 11

HEAVYLIFT

There might also be cases where there is a lack of awareness of the impact of international ship conventions that apply to the carriage of goods, she adds.

Commercial and time pressures might also have a role to play. “People are trying to get a lot done and this is why it becomes very important to have good specialist freight forwarders that can be relied on to check these things.”

It is not only about risk management but also about doing things in the most cost-efficient way. Making sure one has the right experts is important from the cost perspective as well to ensure they have the planning expertise to do the job efficiently and correctly.

Insurance also needs to be in place if something does go wrong. It is worth a little expenditure at the outset to avoid a serious problem, Bridge advises. The number of insurers who write policies for heavylift operations are relatively limited and generally have their own experts involved as part of a project. “If you have specialist insurers, they may want their own marine surveyors,” she adds.

Ted Graham, a partner at Ince & Co, says that, in his experience, the main thing that trips up heavylift companies is contract terms that haven’t been sorted out properly. It’s common to reach a deal while still negotiating over the terms 12 – Summer 2015

“and it ends up not being quite tidied up”. Another problem owners could have is when they have booked in a cargo and then the shipper “flakes” and decides not to ship. Good due diligence is essential, he says, so make sure the contract is with a decent company.

One key factor from an insurance perspective could be late arrival of vital components, which then delays a project.

Graham says it is important to make sure “that your consequential losses clause is reasonably robust”, although he has not had a case like this himself. He notes a case whereby a shipowner had promised some damages for failing to deliver cargo on time, which was struck out as a penalty clause.

One of the seminal legal cases involving a heavylift ship was that of Happy Ranger, which underlined the need for due diligence on the part of the owner as well as the complexities of international laws surrounding the carriage of goods.

According to Bridge, the crucial issue from a freight forwarder perspective is understanding the scope of the services, planning the movement meticulously, engaging the correct expertise and suppliers and ensuring that there is a contract with the customer that provides adequate liability protection. It must include all relevant commercial terms;

be covered by insurers; and (as far as possible) provide a back-to-back regime with the supplier to avoid any residual liability issues.

From a practical perspective, it is important for the freight forwarder to properly assess and risk manage the project in advance and engage the services of a cargo surveyor/super cargo with appropriate experience to advise on the method of packing, stowage and securing and to supervise loading and discharge operations.

Project cargo of large, out-of-gauge cargo is carried as breakbulk both on and under deck. The Hague Rules or HagueVisby Rules may not afford protection and it is essential to review the contract with the carrier/bill of lading/charter party to determine the liability regime and whether the carrier has attempted to exclude liability for on-deck cargo.

Liability for loading/discharge may be excluded under standard liner terms (bill of lading) or under the charter party.

When referencing cargo insurance, it is essential that responsibility for arranging insurance and the level of cover required is agreed with the customer in advance. It is also essential that the freight forwarder receives a copy of the policy and ensures that all relevant conditions/warranties etc are complied with.

HEAVYLIFT

“From a cost/commercial perspective, we may wish to suggest that the project freight forwarder considers the whole multi-modal movement and ensures that demurrage and storage costs at transhipment locations are agreed with both the supplier and customer; transhipment is properly risk managed and supervised; and all customs entry documents are reviewed/approved in advance to avoid any delays, fines or seizure,” says Bridge.

The issue of multiple shipments should also be considered, as well as ensuring that a professional risk prevention mindset is adopted throughout the entire project to ensure that any problems are properly resolved and not repeated.

SIMULATIONS One safety issue with heavylift loads can be addressed before problems arise, says Ole Hympendahl, senior project engineer, team fluid engineering, at DNV GL. He recommends the use of numerical simulations to guard against a capsize resulting from the sudden loss of crane loads during heavylifts.

Regulations that would require such stability proofs are currently under discussion at the International Maritime Organization (IMO) and among classification societies.

Many heavylift ships are equipped with a quick-acting ballast system, which can pump water between wing tanks to counter the changing list that occurs during lifting a heavy load, Hympendahl says. “However, these systems cannot be expected to cope with the sudden loss of load caused by the failure of the lifting gear. Such a loss will cause the ship to immediately roll away from the side of the load. If cargo hatch covers are open during such an operation, downflooding will occur when the hatch coamings immerse.”

So far, international stability regulations have not addressed the danger of capsize in the event of a sudden loss of crane load, he says. Appropriate guidelines to ensure an adequate and uniform level of safety against capsizing under all conditions are currently under discussion at IMO and among the classification societies. Such regulations will have to consider the addition of stability pontoons, as these are often used to increase stability for heavylift operations in port.

“The safety of the lifting operation can be demonstrated by either complying with a simplified criterion based on the righting lever curve properties or by performing a time-domain simulation to assess the maximum (dynamic) heeling angle. By necessity, the simplified criterion must

MACGREGOR DELIVERY Following an order announced in October 2013, MacGregor, part of Cargotec, has delivered and commissioned 45 variable frequency drive (VFD) winches and a full control system for the recently completed heavylift crane barge Hyundai HLV10000, one of the largest heavylift vessels in the world.

Hyundai Samho Heavy Industries Co Ltd, a subsidiary of Hyundai Heavy Industries, built the large floating crane to meet the increasing demands for heavyweight shipbuilding support activities, along with offshore lifting operations.

“This delivery extends MacGregor’s heavylift vessel portfolio,” says Francis Wong, head of sales and marketing at MacGregor’s Offshore Deck Machinery division. “It also confirms our ability to meet the developing needs of specialist vessels, supported by our good track record for all types and sizes of winches and cranes – from merchant ships to offshore support vessels.

“We won this contract because we offer the most advanced winch and crane technology, underpinned by our worldwide service support organisation.”

cover a multitude of possible cases and, as a result, be overly conservative in individual cases. While the simplified criterion is still subject to debate, there is wide consensus that modern computational fluid dynamics (CFD) simulations are a suitable tool for the alternative proof of sufficient safety,” he says.

DNV GL demonstrated the feasibility of such simulations for four representative test ships, using the viscous CFD solver OpenFOAM. Both overturning (breaking) waves and buoyancy effects are automatically accounted for in such a simulation. Although computationally intensive, CFD is the only feasible simulation approach as inviscid potentialflow codes are not able to predict roll damping correctly. For the CFD simulation, the near-field around the ship (including bilge keel, rudder, and stability pontoon) was subdivided into 1.5 million cells. Grids are locally refined in areas of high-flow gradients and in the air-water interface region. This ensures computational efficiency and accuracy.

These investigations obtain a time series of the ship’s transient roll motion initiated by the sudden loss of crane load. The predicted maximum dynamic heel and the final static heel are used to assess the stability requirements for a lifting operation, the classification society explains.

MacGregor’s electric winches consume between 25% and 30% less energy than equivalent hydraulic winches. In lowering mode, they generate energy rather than consume it. Electric winches benefit from reduced installation and maintenance costs, reduced environmental impact and simplified diagnostics.

Summer 2015 – 13

SHIP AGENCY

AGENT AGENDA Agents have been moving into new markets

T

he European Community Association of Shipbrokers and Agents (ECASBA) has brought together a broad coalition of European shipping sector organisations to issue a joint statement calling on the European Parliament, Commission and member states to honour the commitments to support short sea shipping that were made in May last year in the Athens Declaration.

ECASBA general manager Jonathan Williams, who coordinated the joint letter, said that the declaration included a clear and unequivocal call by transport ministers for concerted action by Europe to allow short sea shipping to exploit its full potential as the most efficient and environmentally friendly mode of transport. One year on, however, the actions that needed to be taken to allow the declaration aims to be achieved had still not been progressed, he added.

The joint letter said that in spite of the declaration commitments, inaction by some European institutions and member state authorities continued to frustrate efforts to allow short sea shipping to compete with road and rail on a level playing field. Inaction on reducing administrative burdens, restrictions on port and terminal development, the failure by competing modes to pay their full infrastructure cost and a lack of a functioning single market in shipping, combined with environmental impediments such as the imposition of emission control areas in the North and Baltic Seas, were hampering efforts to utilise the considerable growth potential of short sea shipping.

Williams said that the signatory associations were holding Europe to account on its commitments and wanted to see positive progress sooner rather than later.

The Athens Declaration letter was jointly signed by ECASBA in concert with associations representing freight forwarders: CLECAT – the European association for forwarding,

transport, logistics and customs services; shipowners: the European Community Shipowners’ Associations (ECSA); shippers: the European Shippers’ Council (ESC); port authorities: European Sea Ports Organisation (ESPO); the European Shortsea Network (ESN); terminal operators: the Federation of European Private Port Operators (FEPORT); ferry operators: INTERFERRY; and major container lines: the World Shipping Council (WSC).

GAC OPENS OFFICE IN GREAT YARMOUTH As part of its continuing strategy to focus on growing business sectors in the UK, worldwide shipping, logistics and marine services provider GAC has opened a new quayside office in Great Yarmouth to meet the needs of the renewable energy sector in the southern North Sea for integrated shipping and logistics services.

Great Yarmouth, along with neighbouring Lowestoft, has supported offshore energy companies for over 45 years. The two ports constitute England’s largest concentration of offshore energy businesses and have been involved with many Round 2 projects.

Round 3 includes three of the world’s largest offshore wind farms, which represent over 60% of the UK’s Round 3 developments.

Adrian Henry, GAC UK’s offshore manager, says Great Yarmouth has been identified as being one of the key locations for development and notes that the new facility there reinforces GAC’s national network with an office ideally situated to meet the needs of oil and gas customers working in the southern North Sea. The area is also home to some of the UK’s largest renewable energy projects, including offshore wind farms at Gunfleet Sands and Thanet.

The UK ranks as the world’s sixth largest producer of wind power.

In January 2015, the country had 5,968 wind turbines with a total installed capacity of just under 12 gigawatts, one-third of which is generated by offshore wind farms.

GAC’s efforts to meet the growing demand of the renewable energy

Transport ministers call for concerted action by Europe to allow short sea shipping to exploit its full potential

14 – Summer 2015

SHIP AGENCY

sector for support, including transportation of large project cargoes like turbines, is now being spearheaded by the Great Yarmouth team, led by Jeanette Shoebridge.

“GAC’s presence in Great Yarmouth brings our unique single-source combination of shipping and logistics services to a wide range of energy clients,” says Shoebridge, who has worked on major installations at London Array, Walney 1 & 2 and West of Duddon Sands over the past four years. “Our prime location means we can offer all renewable clients an integrated support package tailored to their needs, including a quay for their support vessels, ship agency, project logistics, warehousing and other related services.

“Combined with the local expertise, workforce, deep water facilities and hinterland, this enables us to provide unrivalled response, flexibility and, ultimately, cost savings. GAC’s global expertise and commitment to delivering our customers’ strategies will be a significant factor in the successful completion of Round 2 in the southern North Sea, through Round 3, and beyond.”

GAC is further strengthening its focus on the worldwide energy sector with the appointment of William Hill as its executive group vice-president, oil and gas.

Group president Bengt Ekstrand says bringing a specific senior management focus on oil and gas is a clear signal of GAC’s intent. “Our aim is to be more strategic, more active and more successful in this sector. Over the decades, GAC has built up a broad suite of assets and skills in oil and gas. With Hill’s appointment, we will expand our footprint and impact as a global provider to this dynamic and demanding industry.”

Hill joined the GAC Group in 1984 and held marketing and business development roles in Kuwait and Dubai before serving as regional manager for Asia Pacific from 1995 to 2001. Before his appointment as executive group vice-president, commercial, in 2009, he was group vice-president for logistics services.

His role as group vice-president, commercial, is being taken over by Christer Sjödoff, previously group vice-president, solutions. Sjödoff’s appointment brings his accountability for group IT and the ecofriendly underwater hull cleaning system, HullWiper, under the commercial team.

Sjödoff has more than 25 years of experience in shipping, logistics and marine and has been with the GAC Group since 1993. After holding management and operations posts in the Middle East and Asia, he served as regional director for Asia Pacific and the Indian Subcontinent for five years from 2002. In 2007, he was appointed group vice-president, solutions, to develop strategic partnerships to meet the needs of the international maritime community.

Ekstrand says: “The position of group vice-president, commercial, is a good fit with Sjödoff’s energy and entrepreneurial flair. With him at the helm, we shall bring together under a single umbrella all the essential tools we need to develop our business products and services to serve the changing needs of our customers.”

Both appointments were effective from 1 May 2015.

WSS OPENS KOREAN HUB Overlooking Busan New Port in South Korea, Wilhelmsen Ships Service’s (WSS) newly opened warehouse is in excess of 3,000m2 and sits on a 6000m2 site. It will now take over from Singapore as the company’s distribution hub in North-East Asia (NEA).

Steven Leong, WSS regional supply chain manager, says that having a dedicated distribution centre to supply countries in North-East Asia makes perfect business and geographical sense.

“Customers can now benefit from even better lead times and assured information on estimated delivery dates. We chose Korea based on volumes, the easy-to-navigate customs and regulatory framework, as well as the new port area they are building up.”

Kim Jensen, WSS marine products director adds: “Improving our supply chain means accurate inventories and providing more efficient, transparent and focused interactions with our customers.

“The new distribution centre is good news for our local NEA customers. But, it also increases our operational efficiency, which will positively impact the whole region. This change frees up resources so we can better service our growing customer base across Asia.”

With Royal Caribbean’s headlinegrabbing Quantum of the Seas homeported in Shanghai for 2015 and TUI Cruises launching its inaugural Asian

season, all eyes are on Asia’s rapidly expanding cruise market.

However, while Asia may be unexplored territory for many cruise owners and ships service suppliers, WSS is established and already servicing numerous local and international cruise customers across the entire Asia Pacific region. Boasting an industry-leading, cruise-specific ships agency network, spanning over 20 countries in the region, including Australia, China, Japan, Korea, Malaysia, Taiwan and Thailand, WSS covers over 140 ports.

WSS’s cruise-dedicated teams offer a full range of agency and husbandry services, including crew change, passenger embarkation and disembarkation, crew/ passenger medical arrangements and advice on China inspection and quarantine procedures, as well as the handling of supplies and ship spares. In addition, WSS’s agency staff can organise the delivery of the company’s marine and safety products, Unitor and Nalfleet chemicals and maritime logistics, along with offering bespoke localised services.

With passenger numbers rising year on year and companies such as Princess Cruises extending its sailings in 2015, Malaysia is a key growth area for the Asian cruise market. WSS Malaysia has been servicing the cruise industry for almost 30 years from its network of 10 offices, supporting all the major cruise ports in both Malaysia and Brunei, including Malacca, Langkawi, Tioman Island, Sandakan and Muara.

Michael Tay, WSS ships agency service manager for Malaysia, believes his team’s ability to work systematically and efficiently against the clock is one of the things that sets them apart from their competitors.

“Cruise port calls are typically short, with some averaging just 12 hours. Consistently coordinating the timely and safe berthing of vessels with all the necessary local authorities for fast clearance and disembarkation of passengers is vital.”

Being able to offer additional products and services has also proved to be a strong selling point for WSS, says Tay: “In addition to consistently providing agency services, we also coordinate the delivery of supplies and services from the wider WSS portfolio. Being able to offer our cruise customers such a complete package of services and products has been a key factor in our continued success.”

Summer 2015 – 15

INSURANCE

REDUCING RISK Insurers have been issuing advice aimed at risk mitigation

T

he London P&I Club has issued a list of recommendations to owners contemplating the carriage of bauxite cargoes in the wake of renewed concerns about the dangers of cargo misdeclaration and potential liquefaction.

In the latest issue of the club’s StopLoss Bulletin, Dr Martin Jonas, of international marine consultant and surveyor Brookes Bell, notes that grades of bauxite containing a high proportion of fines capable of retaining significant moisture are potentially at risk of liquefaction, resulting in cargo shift which may cause the carrying ship to capsize. Such cargoes are classed as Group A under the International Maritime Solid Bulk Cargoes (IMSBC) Code and should be loaded only if their moisture content is less than their transportable moisture limit (TML).

The IMSBC Code does not explicitly identify bauxite as a potential Group A cargo, with the result that shippers may wrongly declare Group A bauxite as Group C, and may not provide the required TML and moisture certification.

Emphasising that shipowners should be alert to potentially misdeclared bauxite cargoes, the club has made a number of recommendations to its members. These include a warning that any cargoes which possess flow properties when wet, or which contain a high proportion of fine particles, should be considered as Group A. Moreover, any wet or damp cargoes that appear on visual inspection to contain a significant proportion of fine particles should be tested for flow properties prior to loading, even if shippers have declared them as Group C. The club recommends that masters, officers and crew should conduct frequent and regular cantesting in accordance with the method set out in the IMSBC Code, and says that, in the event of a failed can test or the presence of splatter marks on bulkheads and/or pools of free water, loading

should be suspended until the cargo has been properly tested in a laboratory for flow characteristics.

Among other things, the club also recommends that Group A bauxite cargoes should be loaded only with prior authorisation from the applicable competent authority, and in compliance with the detailed IMSBC Code regulations for sampling, testing and declaration of such cargoes.

NORTH WARNING ON MIGRANT RESCUE North P&I Club has warned its shipowner members of the need to be properly prepared to meet their moral and legal obligations to rescue migrants at sea. In a new loss prevention briefing published in April, North suggests some of the rescue practices and procedures that merchant ships should ideally have in place, given the increasing risk of being called upon to rescue large numbers of people.

The reminder comes in the wake of the tragic deaths of around 800 people in the Mediterranean following the capsize of a 20 metre fishing boat off the coast of Libya. The deaths occurred despite the attendance of a Portuguese-controlled containership that had answered a distress call but was powerless to prevent the migrant boat sinking. Only 27 people survived, including the master of the migrant boat, who has since been charged with reckless multiple homicide.

Tony Baker, head of loss prevention at North, says: “The number of unsafe sea crossings attempted by refugees, asylum seekers and economic migrants is growing rapidly, with around 350,000 people risking such journeys worldwide in 2014. Of these, over 4,500 are estimated to have died in the attempt. In 2015, more than 1,700 have already died in just the Mediterranean.

‘While merchant ships are not generally designed for rescuing large numbers of people at sea,

“Be alert to potentially misdeclared bauxite cargoes [or] any cargoes which possess flow properties when wet”

16 – Summer 2015

INSURANCE

their owners and operators may find themselves in a situation where they are morally and legally bound to do so. Some of the costs incurred may be covered by their P&I clubs. Such rescues are potentially fraught with difficulty, so it is vital that shipowners have proper procedures in place to prevent a rescue situation spiralling out of control.”

Baker says that merchant ships transiting areas where migration of large numbers of people by sea is common need to be aware that their services may be called upon at short notice to go to the aid of migrant boats in distress. Lack of preparedness for a large-scale rescue operation could lead to a myriad of difficulties, dangers and uninsured costs for those involved.

North says that in addition to nonroutine shiphandling and seamanship issues that are encountered when large merchant ships are tasked with rescue operations at sea, there are security, legal, health and safety issues − both for the crews and for those rescued − that need to be considered and planned for.

In particular, the club recommends that ships have regular, realistic drills covering large-scale rescues and detailed plans for accommodating and disembarking those rescued.

SHIP SALE COMMISSION International Transport Intermediaries Club (ITIC) has recently successfully supported a claim for ship sale commission by a shipbroker. The broker had been wrongly accused by the shipowner of incompetence.

The shipbroker had entered into an exclusive commission agreement with a shipowner, which provided for commission of 5% to be paid to the broker on the sale of any of its fleet of vessels, even if sold through another broker. The broker heard that two of the owner’s ships had been sold through another broker for e3.3m each. The owner refused to pay the broker’s commission of e303,000, lawyers were appointed, and the commission claim was brought before the courts in January 2013. The court found for the broker and awarded it the commission of e303,000, plus interest and costs.

The owner appealed the decision to the Supreme Court, alleging that the broker who had initially handled the sale had been incompetent. The owner also involved the local shipbrokers’ association in an attempt to demonstrate that the broker’s employee had fallen short of industry standards. The local association responded in favour of the shipbroker to the allegations of incompetence posed by the shipowner.

Before the expense of a trial in the Supreme Court had been incurred, the owner approached the broker with an offer of settlement at the commission amount of e303,000 without interest and without the payment of costs.

The shipbroker was willing to forgo the interest, and settlement was agreed at the commission amount of e303,000 plus the costs awarded by the first instance court of $32,300. The costs incurred in the early stages of the Supreme Court proceedings were waived.

EMISSIONS FINE International Transport Intermediaries Club (ITIC) has confirmed that a ship management company has been fined over a quarter of a million dollars in connection with a breach of clean air regulations in the United States.

ITIC reports that an inspector of the California Air Resources Board, the clean air agency of the state of California, boarded a ship in July 2011 at a terminal in Los Angeles. The chief engineer was asked if he was aware of the revised 2009 California clean air regulations, which required vessels to switch main engine, auxiliary engines and auxiliary boilers to low-sulphur fuel when in California-regulated waters. The chief engineer said he was only aware of the requirement to switch auxiliary engines to low-sulphur fuel in accordance with regulations effective from 1 January, 2007.

The master checked the vessel’s safety management system (SMS) but was unable to locate the 2009 requirement.

The inspector then examined the records of fuel switchover for the vessel’s main engine, auxiliary engines and auxiliary boilers, and ascertained that the ship had called at California ports 17 times between 2009 and 2011 without switching over the main engine or the auxiliary boilers. A penalty of $283,500

was duly imposed on the shipowner for failure to switch fuel during the 17 port calls. The owner claimed against the manager, maintaining that the manager had been negligent.

ITIC says: “In 2009, a fleet circular had been sent to all vessels by the manager, setting out the change in regulations, and asking that it be displayed in a prominent position. The manager therefore initially rejected the claim on the ground that it had resulted from crew negligence, which was excluded under the Baltic and International Maritime Council (BIMCO) management agreement. The owners, however, did not accept this rejection, maintaining instead that the manager had failed to update the SMS. As it was considered unlikely that the manager would successfully defend a claim resulting from its failure to update the SMS, the claim was paid in full.”

FUNDS DIVERSION FRAUD ITIC says fraudulent diversion of funds is on the increase in the maritime sector.

Having previously issued a warning about the fraudulent diversion of port expenses, ITIC says it is now seeing evidence of similar frauds being perpetrated across the wider marine industry. Typically, the party due to make a payment will receive a bogus message altering the recipient’s bank details. Examples have included the diversion of shipagents’ disbursements accounts. Shipmanagers are also among those who have been targeted.

The email addresses used by the fraudsters are only very slightly different to the genuine ones – perhaps a single letter being omitted. ITIC, noting that it is very difficult to spot these differences, says: “Any message changing account details should be regarded with suspicion, and steps taken to secure independent verification of instructions.

“By way of example, one shipbroker managed to frustrate an attempt to divert monthly hire payments by telephoning an owner’s accounts department to verify whether or not a request to forward funds was genuine. It wasn’t. The check should not involve replying to the suspect email, but rather using a different channel of communication or, at the very least, reentering the email address copied from a message known to be genuine.”

Summer 2015 – 17

EDUCATION AND TRAINING

IN TRAINING Training and education are of paramount importance in ensuring a good supply of highly qualified personnel to man the increasingly technical ships being operated, particularly at a time of crew shortage

Left: Nigel Cleave, chief executive of Videotel

V

ideotel™ has produced a new training programme, which tackles the often complex handling issues involved in the loading or discharge of project cargoes and heavy lifts.

This is particularly relevant if ships’ personnel are involved, as serious consequences could result if the correct loading and unloading techniques are not strictly followed.

The programme covers the planning involved in preparing for a lift both ashore and onboard; the design of vessel and cranes; maintaining stability throughout the lift and positioning of the load onboard; and the validity and condition of lifting and securing equipment.

A mixture of live action and computer animation is used, featuring a number of lifting environments and cargo types, including quayside lifts and offside floated cargo.

Nigel Cleave, chief executive of Videotel, explains the value of the new programme in protecting a company’s reputation: “If a lifting operation were to fail due to inadequately trained staff, apart from putting lives at risk and consequential costs involved where projects are delayed as a result, there is also the possibility of severe damage to the cargo, cranes and even the vessel itself, resulting in large insurance claims.”

Aimed primarily at crew and junior officers new to geared multi-purpose or heavylift vessels as well as shorebased personnel new to heavylift operations, the main topics covered in the programme are: • Planning • The vessel and its design • Lifting and securing equipment • Lifting operations from a quayside • Barges and floated cargo • Cargo care 18 – Summer 2015

“Heavy Lifts and Project Cargoes” is available in various formats – Videotel On Demand (VOD), VOD Online, DVD and e-learning computer-based training – with accompanying workbook.

Videotel has responded to major changes in international seafarer training legislation by producing a new e-learning course, which establishes effective procedures onboard ship that will help to save lives in the event of an emergency situation.

“The Crisis Management & Human Behaviour Training Course” has been produced in cooperation with the International Maritime Organization (IMO), Royal Caribbean International and Cruise Lines International Association (CLIA) in response to the 2010 Manila Amendments to the Seafarers’ Training, Certification and Watchkeeping (STCW) Code. Importantly, the course is the first to have been formally approved by the UK Maritime and Coastguard Agency (MCA) for use worldwide. To gain this approval, Videotel had to undergo and satisfy robust MCA requirements, including the maintenance of a course enrolment and certification process.

The course addresses the main factors and key measures to keep people safe during an emergency situation onboard ship.

These factors include how you assess and respond to a crisis using the resources available; how you cope with the stress involved; how you control large numbers of passengers and how you communicate effectively with them and your crew members.

These measures can be worked into a shipping company’s existing emergency procedures and practice, ensuring that those responsible are as prepared as possible should a crisis ever arise onboard ship.

“These measures can be worked into existing emergency procedures and practice, ensuring that those responsible are as prepared as possible should a crisis ever arise onboard ship”

EDUCATION AND TRAINING

ship are fully aware of the international rules and regulations and are trained accordingly. Videotel will be actively supporting this year the decision by the IMO to select ‘Maritime Education and Training’ as its World Maritime Day theme and, as such, we are delighted to start 2015 with this prestigious approval by the MCA in recognition of the rigorous safety training process engendered by this course.”

SOUTHAMPTON SOLENT UNIVERSITY

The programme is aimed at any crew member who has responsibility for personnel safety in an emergency situation, including hotel staff, masters, chief engineers, chief mates, second engineer officers, and other senior officers as appropriate. Upon successful completion of the course, seafarers will meet the requirements of the STCW code (section A-V/2, paragraph 3), which states that crew members with such responsibilities must successfully complete an approved crisis management and human behaviour training course.

The course is delivered over an estimated 4.5 guided learning hours, using interactive e-learning computerbased training. Learners follow easy on-screen instructions to progress through the course. It contains text with (optional) English language voiceover, still photographs, video clips, animations and interactive exercises. There is a multiple choice on-screen test to complete at the end of each module, plus a longer final test, comprising of randomised questions, at the end of the training course.

By the end of the course, participants will be able to:

• Describe how to control the response to an emergency • Explain how to optimise the use of resources in an emergency • Define how to control passengers and other personnel during emergency situations • Describe how to establish and maintain effective communications • Explain the importance of shipboard emergency organisational procedures and drills Cleave says: “The Manila Amendments to the STCW Convention places crew and passenger safety in the event of an emergency situation at the top of the agenda. It is essential that all those having such responsibility onboard

“It is essential that all those having such responsibility onboard ship are fully aware of the rules and are trained accordingly”

Over the past few months, Southampton Solent University has been carrying out a business review looking at the best way to invest in, develop and grow its maritime education and training, including Warsash Maritime Academy.

The university has identified two options: to invest in the existing Warsash campus; and/or to relocate and invest in new facilities at East Park Terrace in Southampton.

These options were discussed at a meeting of the University’s board of governors on Wednesday 29 April.

They endorsed the proposals: that both options will be assessed in more detail but the preferred option would be to move all or some of the delivery to East Park Terrace in Southampton city centre.

Over the coming weeks, the university will be developing a new maritime education and training strategy, which will outline its plans for long-term sustainability and growth. The university will also meet with staff, cadets/delegates, clients and the maritime industry to gather further input and feedback.

A spokesperson for the university says: “We place great value on our maritime education and training provision. This review will bring our maritime education and training onto a long-term, sustainable footing and enable us to be equipped to meet the challenges and demands ahead, including opportunities to grow our business.

“Increased competition, an uncertain future of funding, and a need to respond to the growing demands of cadets, delegates and clients mean that we need to ensure a learning experience that Summer 2015 – 19

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www.cbs.dk/mbs

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

consistently meets and exceeds expectations for maritime education and training.”

PORT OF SINGAPORE INITIATIVE MPA Academy, the training arm of the Maritime and Port Authority of Singapore (MPA), and the World Maritime University (WMU) has recently signed a memorandum of understanding (MOU) to cooperate on global maritime leadership training and capacity building for the international maritime community.

The MOU was signed by Andrew Tan, MPA chief executive, and Neil Bellefontaine, acting president of WMU. The signing ceremony, held in conjunction with the 10th Singapore Maritime Week 2015, was witnessed by Josephine Teo, senior minister of state, Ministry of Finance and Ministry of Transport, and Koji Sekimizu, secretarygeneral, IMO, and chancellor of WMU. This MOU is MPA Academy’s first strategic tie-up with a global centre of excellence in maritime education, in line with efforts to reposition the academy as a centre of excellence in global maritime leadership training. WMU is a post-graduate maritime university founded by IMO, a specialised agency of the United Nations.

The MOU provides for cooperation between the two partners on leadership development programmes, as well as exchange of faculty members. Under the agreement, MPA Academy will also continue the tradition that began in 2004 of hosting WMU students in Singapore for field study visits as a part of the port management specialisation in the WMU masters programme.

Tan says: “We are delighted that MPA Academy is collaborating with WMU to strengthen our academic offerings.

At the same time, we will be able to further contribute to WMU’s work in global maritime leadership development.

We look forward to both organisations strengthening the many areas of collaboration in training and capacity building.”

Bellefontaine states: “It is a pleasure to sign this agreement with the MPA Academy, which has been a long-time supporter of WMU through hosting field studies for our students. Being able to visit one of the busiest ports in the world 22 – Summer 2015

is an incredible opportunity that deepens their knowledge of port operations and administration, and supports the maritime capacity-building mission of WMU. We look forward to working with the MPA Academy in new areas of cooperation made possible through this agreement, including leadership development and faculty exchanges.”

BIBBY SHIP MANAGEMENT PROGRAMME The supply of competent seafarers is at the very heart of any high-quality management system, and is key to ensuring the safe and economical operation of today’s vessels.

With this in mind, seafarer training is not merely an aspect of the service at Bibby Ship Management – it underpins its entire philosophy on manning, the company explains.

“With a comprehensive knowledge of legislative, statutory and industry training requirements covering the entire maritime industry, we are fully committed to continually developing the knowledge and skills of our crew members to ensure that they are skilled for work and compliant with the necessary regulatory requirements.

“We believe in the power of partnership – on both a corporate and individual level.

Via our purpose-built training centres in Mumbai, Delhi and Sevastopol, we use our state-of-the-art facilities to deliver a range of programmes, not only to give crew members the necessary skills and competencies required to maintain the safe and efficient operation of modern vessels but to also help them get the most out of their careers, both onshore and offshore.”

Bibby Ship Management offers a range of programmes for: • Offshore, including anchor handling and dynamic positioning courses • Navigation, including ECDIS (DGS, MCA and type specific) and approved UK and Indian global maritime distress and safety system courses • Engineering, including high voltage safety, programmable logic controller automation and machinery management courses • Introductory and advanced welding • Hospitality and catering

GREEKS GO FOR BROKING Greece is witnessing a surge of enthusiasm from men and women keen to pursue shipbroking as a career. The upswing in the already popular profession in the traditionally strong shipping nation was reported by Bruce Ogilvy, president of

EDUCATION AND TRAINING

the Institute of Chartered Shipbrokers (ICS), when he addressed a meeting in London of the International Maritime Industries Forum (IMIF).

Within his theme – the work of the ICS – three developments underlined the important role of the institute in the Hellenic community.

For the first time, Greece had in 2014 overtaken London in having more students sitting exam papers than any of the 115 institute examination centres.

Given the adverse employment market in the country, often it was individuals or their parents, rather than companies, who were paying for the courses.

In June, when the institute exhibited at the Posidonia maritime exhibition in Athens, there was a steady stream of people who were looking for work enquiring how to enter the industry.

In December, when the Greek branch of the institute celebrated its 10th anniversary at the Eugenides Foundation in Athens, there was a huge audience, comprising more than 400 shipping professionals from near and far.

Ogilvy told members attending the IMIF event at the Baltic Exchange that worldwide there was healthy interest in gaining professional shipbroking qualifications. “Demand for our courses is growing,” he said, referring to last year’s 10% growth, “which is quite surprising,

bearing in mind the lousy market.” This was, said the ICS leader, a clear contrast to previous recessions, when “the first thing to go with the squeeze on operating costs was education and training – a very naïve policy. Now, in this cycle, it seems to be the opposite.”

He added: “The continual rise in numbers of students… suggests that professional qualifications are even more important today. The students themselves want to be prepared for when the market turns.”

Usually, exams are held once a year in April, with 16 subjects covered, but to meet demand the institute decided to have a second sitting in November 2014, with eight subjects. “We were amazed at the take-up. Our education and training committee is currently considering whether we should have 16 subjects twice [every] year.”

In April 2014, 2,600 students took more than 6,000 examination papers in 115 centres. In November, 900 students took 1,500 papers in 33 centres. This represents a massive logistical challenge to get all the papers out at the same time, but the system is running well, said Ogilvy. The pass rate is around 40%, a reflection of the rigour of the exams, which “are considered by certain practitioners to be of degree level”. Many people succeed on their second attempt at the exams.

To adapt to the technological revolution, the institute is considering whether to allow students to submit their papers via laptops, iPads or similar devices, which would be provided specially for the purpose. Subject to safeguards against plagiarism and cheating, Ogilvy added, “we will have to do it sooner rather than later”.

He said that the institute has 26 branches and nearly 4,000 members.

There are 17 distance-learning courses, serving candidates in regions including Asia and the Middle East. He said that under its Royal Charter, granted in 1926 and amended in 1984 to allow it to recruit overseas members, the Institute has to conduct its exams in English but has responded to requests for its materials to be translated.

The ICS president has taken his campaign for improved professional

standards to many countries: “I want to make the ICS qualifications mandatory for anyone working ashore,” he declared.

Ogilvy said that, after some earlier setbacks with casualties, which attracted strong public criticism, shipping was recovering its reputation, although “it needs an awful lot of work from everybody in the industry”. The industry had to handle the reaction of the mainstream media to major incidents, and more executives were taking training in how to respond constructively to press demands.

IMIF chairman Jim Davis, himself a former president of the institute, endorsed Ogilvy’s promotion of the ethos of professionalism. In his opinion, the onetime attitude of some shipbrokers, which he summarised as FFF (find the ships, fix ’em and forget ’em), had been replaced by a realisation that brokers should be representatives of the best interests of shipping. “Let’s get more professionalism in our great industry,” he concluded.

Bert de Groot ‘s 25 years of business experience is augmented with 10 years of academic experience being a professor at Erasmus school of Economics and former Dean and Rector Magnificus of a business school.

“My motto for educating future executives is combining profound scientific insight and outcomes of applied academic research with business relevance.

The business questions that are relevant for boardroom executives and top managers are translated into applied academic research. The results of the findings are shared with the participants and with the students in the classroom. This enables students and executives to be fully prepared to take responsible positions.

“It is this philosophy that constantly renews and augments the master program for MEL, putting the MEL program firmly in the top of most wanted programs and makes that MEL alumni grow into director or manager and board level positions (resectively. 90% and 5% of the alumni).

The program is therefore of high standard and with the support and active participation of the CEOs of the leading companies in Rotterdam, the Port of Rotterdam and City of Rotterdam.”

Summer 2015 – 23

MARITIME LAW

“LONDON LEADING?” Jonathan Lux, mediator, arbitrator and barrister with Stone Chambers, discusses whether London’s dominance in international commercial dispute resolution will continue

L

ondon stands at the pinnacle for the resolution of international commercial disputes.

English law, thanks to the calibre of English commercial judges, achieves more certainty than any other system of which I am aware. This is indeed a key factor for many business people and disputants – to have a contract that achieves certainty and a legal regime with as much certainty of outcome as can be achieved.

English jurisdiction, whether High Court or arbitration, is also the most popular internationally – thanks to the highly sophisticated infrastructure, including judges, arbitrators, mediators, barristers, solicitors, insurers, bankers, industry and traders – in short, all of those who may be party to or assisting parties in resolving disputes.

Whether London’s dominance in international commercial dispute resolution will continue turns at least partly on its attitude to some of the factors discussed in this article.

There is a rich vein of mercantile precedent going back several centuries to be found in English law. Was it ever thus? No. We started with trial by combat. Then, ‘justice’ administered by the King or Queen personally, followed by ‘justice’ administered by the King’s or Queen’s justices.

The propensity of lawyers to complicate had the result that, in Charles Dickens’ England, a litigant would be lucky to live long enough to see the final outcome of court proceedings.

The English Commercial Court was brought into existence in 1895 to enable disputes to be determined “justly, expeditiously and efficiently and without unnecessary formality” – indeed a radical departure from the practice and procedure which prevailed at the time.

In more recent years, there has been further radical overhaul of

court practice and procedure at the hands of Lord Woolf, former Lord Chief Justice, whose work will come in for mention more than once in this article.

Suffice for now to say that the Lord Woolf-inspired new Civil Procedure Rules came into force in April 1999. There is express endorsement and encouragement of mediation. Two of the key Woolf-inspired innovations are the ‘pre-action protocols’ and the ‘case management conference’. Both serve to encourage early settlement. At the case management conference, parties will face questions from the judge on whether alternative dispute resolution (ADR) should be tried. Indeed, if either party so applies or the judge considers it worthwhile, the judge may order a stay of court proceedings. While judges in England stop short of ordering mediation in practice, it makes sense to go along with a mediation proposal (see below).

Arbitration has a long history as the preferred means of dispute resolution in some industries – for example, shipping.

Arbitrators can be chosen for their industry knowledge or expertise. The proceedings are private to the parties.

Historically, there were said to be advantages also of cost and speed, although at least one High Court judge has described London arbitration as akin to “unwigged Court proceedings”.

Indeed, arbitration may be more costly in that you pay for the arbitrator and the arbitration room, whereas the parties make only a limited contribution to the cost of judge and court facilities.

When it comes to speed, in court the Civil Procedure Rules lay down a timetable that the Court will enforce. These rules don’t automatically apply in arbitration and it is for the arbitrators to set the timetable. Some arbitrators are disinclined to make robust orders for the progress of the reference and therefore arbitrations can drag on.

Two key Woolf-inspired innovations are the ‘preaction protocols’ and the ‘case management conference’. Both encourage early settlement”

26 – Summer 2015

MARITIME LAW

One particular ‘abuse’ was the possibility for either party to request the arbitrators to state their award in the form of a special case – with the almost guaranteed right of an appeal to the court. Needless to say, this had the consequence that arbitration was neither less costly nor any speedier than court proceedings.

The same winds of change that were blowing through court procedure also affected arbitration. The government’s Departmental Advisory Committee (DAC), under the chairmanship of Saville J, published its report in February 1996 and this resulted in the Arbitration Act 1996, which applies to all arbitrations commenced after 31 January 1997. This served to replace in a single statute the plethora of provisions that had been littered around a number of statutes referred to collectively as the Arbitration Acts 1950-1979. The thinking appears to be very similar to that behind the Civil Procedure Rules. Thus, section 1(a) of the 1996 Act provides: “The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense.”

Subject only to the overriding duty of the tribunal, as set out in section 33 of the Act, to act fairly and impartially and to adopt procedures suitable to the

Above: Jonathon Lux

circumstances of the case and avoiding unnecessary delay or expense, so as to provide a fair means for resolution of the matters in dispute, the Act is silent regarding the precise procedure for an arbitration, and party autonomy applies.

So, the “overriding objective” of the Civil Procedure Rules is to deal with cases “justly”, and the “overriding duty” of the arbitration tribunal is to act “fairly and impartially”. It may be thought that court and arbitration tribunal are starting from the same or a similar place.

Mediation started life as the leading type of ADR procedure, and ADR was said to stand for alternative dispute resolution – i.e. mediation as an alternative to court or arbitration proceedings. In that context, it looks odd for me to be discussing mediation linked to court/ arbitration proceedings, respectively.

Having mediated now for some 15 years I can say that it is very rare to hold a mediation before court or arbitration proceedings have been commenced.

Perhaps the philosophy is: “Administer a little pain to enjoy the benefits of gain.”

In any event, as most mediations take place against the backdrop of court or arbitration proceedings, it is relevant to examine how mediation ties in with court and arbitration, respectively.

As I have said earlier, since the

Woolf Reforms, there is clear court encouragement for mediation. The key cases include: Halsey v Milton Keynes General NHS Trust (2004) EWCA Civ 576; PGF II SA v OMFS Company Ltd (2013) EWCA Civ 1288; and Northrop Grumman Missions Systems Europe Ltd v BAE Systems (Al Diriyah C41) Ltd (No2) (2014) EWHC 3148 (TCC).

The position now reached is that a failure to engage with your opposite number’s mediation proposal (as in PGF) or a refusal to mediate (as in Northrop) may well lead to the successful party in court being deprived of some or all of their costs entitlement from winning.

This is a powerful incentive to parties to mediate in all but the rarest of cases – Northrop being an example.

Does an arbitration tribunal have the same power as the court – namely, to stay proceedings so as to enable mediation to take place where one party so applies or where the tribunal considers it just and reasonable to do so – for example, where the costs of the arbitration are likely to become disproportionate to the amount in issue?

Further, if the arbitrators can direct a stay, can they also impose costs sanctions on a party who fails to engage or refuses to mediate? Lastly, if there is such a power, might the tribunal have a duty to order a stay where the interests of justice clearly point in that direction?

The starting point is the Arbitration Act 1996, section 33, which states: “(1)The tribunal shall – (a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and (b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.

(2)The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.”

There are, of course, powerful arguments that have been raised against there being such a power (let Summer 2015 – 27

MARITIME LAW

alone duty). It is pointed out that the arbitration tribunal’s jurisdiction derives from the arbitration agreement between the parties, and the arbitrators’ duty is to proceed to an award. “Delegatus non potest delegare.” If the arbitrator is mandated to proceed to an arbitration award, then they have no right to shirk that responsibility and, in effect, subdelegate to someone new, the mediator, the task of resolving the dispute.

A case cited for the proposition that the arbitrators’ duty is to proceed to an award and that they have no power to stay the arbitration to enable mediation to take place is Hussman (Europe) Ltd v Pharaon (formerly trading as Al Ameen Development & Trade Establishment) (2003) EWCA Civ 266. However, is this case really authority for this proposition?

I suggest not. The facts of the case are somewhat involved. The claimant in the arbitration was Hussman and the respondent was either Pharaon or Al Ameen (a limited liability company).

The respondent’s counterclaim considerably exceeded Hussman’s claim.

The arbitrators made a first award in favour of Al Ameen. The court held that Al Ameen was not a party and set the award aside. The arbitrators then made a second award in favour of Pharaon.

Hussman challenged the second award.

28 – Summer 2015

There were two issues – namely: 1) was Pharaon a respondent to the arbitration which Hussman had commenced; and 2) was the Arbitration Tribunal functus officio after the first award – therefore having no jurisdiction to make the second award?

On the second issue, counsel for Pharaon submitted: “A tribunal cannot be deprived of jurisdiction by making an award which is declared by the court to be of no effect. On the contrary, such a tribunal remains under a duty, both statutory (see section 33 of the Act) and contractual to proceed to a valid award.

The same may be said of a situation where an award has been set aside. It is only a valid final award, and not a mere nullity, which deprives a tribunal of its jurisdiction.”

The Court of Appeal didn’t deal expressly with the issue of the arbitrators’ duty to proceed to an award. The court said: “A valid final award on the merits will, of course, exhaust the arbitrators’ jurisdiction, subject to any remission from the courts: but we can see no good reason in principle why an invalid final award, in excess of jurisdiction, should lead to the same result, when once that award has been declared to be of no effect by the courts.”

Therefore, the court didn’t deal expressly with the scope or nature of the arbitrators’ duty to proceed to an award or whether there might be exceptions to that duty.

The judge’s duty is to proceed to judgement and the arbitrator’s duty is to proceed to an award. The judge’s powers, so it is said, are statutory and so the judge in discharging the “overriding objective” of dealing with a particular case “justly” may order a stay to give mediation a chance. The arbitrator, on the other hand, derives his powers from the contract and his duty is to proceed straight to and only to an award. But, is this right? The arbitration reference may owe its life to the arbitration agreement, but the arbitrators’ powers, duties and obligations derive largely from the Arbitration Act. The “overriding objective” of the Civil Procedure Rules is the “overriding duty” of the Arbitration Act – a duty which is to include that to “adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined”.

This talks in terms of a fair means for the resolution of the matters falling to be determined, and resolution can, of course, encompass settlement between the parties, a mediated settlement as well as an arbitration award.

The courts have regularly upheld ADR (mediation) clauses and, very recently, have upheld the section of a multi-tier dispute resolution clause calling for “friendly discussions” – in other words, the court held that “friendly discussions” were a precondition to either party’s right to refer the dispute to arbitration.

In so doing, the courts have stressed the public good in encouraging parties to talk and/or mediate.

In many fields of international commercial law – and shipping is a key example – disputes are often referred to arbitration rather than court. It would be perverse if the acknowledged public good ceases to apply when arbitration rather than court is the chosen forum.

I submit that arbitrators in England have the power and duty to stay arbitration to enable mediation to take

MARITIME LAW

place either when both parties agree or where one party applies or it appears to the arbitrators to be in the interests of justice to do so. Further, if one party fails to engage with a mediation proposal or unreasonably refuses to mediate, then the arbitration tribunal should have the same power as the court to make an adverse costs order.

It may be said that, even without such a power, it is open to the parties to agree a hybrid or multi-tier dispute resolution clause providing for: friendly discussions between the parties; mediation; arbitration or court proceedings.

It is perfectly correct that, on the latest authorities, the provisions calling for friendly discussions and/or mediation are enforceable. The problem is that such clauses deal with matters in a sequential manner – ie: firstly, friendly discussions within a specified timescale; secondly, mediation within a specified timescale; thirdly, arbitration or court.

However, as I indicated earlier, there may well be advantages in holding mediation some time after court or arbitration proceedings have been commenced, and this is simply not catered for by such a hybrid or multi-tier dispute resolution clause.

So, what is really called for is a court / mediation / court or arbitration / mediation / arbitration procedure. We know that the courts offer this and I have suggested that arbitrators also have the power to do so. If I am wrong in this, then what about the arbitration rules of the major arbitration bodies? I have reviewed the rules of the ICC, LCIA, SIAC, HKIAC and LMAA. So far as I can see, only the ICC and SIAC have anything express to say on this subject.

The new ICC Mediation Rules (2014) are designed to work in conjunction with the ICC Arbitration Rules. The Mediation Guidance Notes issued in conjunction with the new rules actively encourage arbitrators to consider the use of ‘mediation windows’ – staying the arbitration to allow mediation to take place.

Secondly, there is Singapore, which has been very innovative in the area of dispute resolution. There is a brandnew Singapore International Mediation Centre, launched in November 2014.

The SIAC, working in conjunction with the SIMC, proposes the “Singapore arb-med-arb clause”, whereby SIAC arbitration is started and the parties then commit to SIMC mediation, and the resulting mediation settlement agreement then goes back to SIAC and forms the subject of a consent award (which can then be enforced if necessary in upwards of 150 states party to the New York Convention).

I raised the question at the beginning of this article: will London stay at the pinnacle of international dispute resolution? The answer when it comes to arbitration is largely in the hands of the LMAA. Certainly, it would be open to the LMAA to amend its rules so as to provide expressly for the power which I have suggested arbitrators anyway have under the 1996 Act. The new rule need only stipulate that at any time after commencement of the arbitration either party could apply, or the tribunal itself could direct that proceedings be stayed to enable mediation to take place and that the tribunal should be entitled to take into account a party’s refusal to mediate when dealing with the costs of the arbitration.

If the LMAA ignores this, then it may henceforth be operating at a disadvantage to Singapore, which is now offering a joined-up dispute resolution system, embracing both arbitration and mediation.

I said at the outset that I would be making further reference to Lord Woolf.

In 2009, Lord Woolf gave a talk to the Chartered Institute of Arbitrators entitled “Mediation in arbitration in the pursuit of justice”. He said: “My thesis

tonight is that litigation in the courts is very similar to litigation through the process of arbitration. They both have the same objective of obtaining a decision which resolves a dispute and brings it to an end. It is an imposed decision but, whereas now judges will regularly consider whether they can assist parties by suggesting some form of ADR, that just does not happen in arbitration.

My argument is that it should, and it is indeed my belief that it will, and that arbitrators will have to recognise the importance of their matching the courts by offering the same sort of services.”

On the view I take, arbitrators have the power (and indeed the duty in appropriate cases) to stay the arbitration so as to offer a “mediation window”. It follows that, in exercising their discretion on costs, the arbitrators should be entitled to “sanction” the successful party and deprive them of some or all of their costs by reason of their failure to engage with a mediation proposal and/ or refusal to mediate.

Of course, to put the matter beyond doubt, it would be preferable for the LMAA to amend its rules so as to provide expressly for such powers.

If I am correct in the proposition I have advanced, and/or the LMAA makes the rule change suggested, then London may continue as a leading international dispute resolution centre for many years to come. In the meantime, there is nothing to prevent parties from putting the matter to the test by applying to their arbitration tribunal for an appropriate order. Please do let me know the fate of any such applications!

Summer 2015 – 29

REGULATION

GREEN ISSUES Global emissions have been high on the agenda in recent months along with ballast water treatment systems

Left: Masamichi Morooka

I

n a submission to the International Maritime Organization (IMO), the Republic of the Marshall Islands, currently the world’s third largest shipping registry, has called for the setting of a new global target for reducing greenhouse gas emissions from international shipping, a growing sector currently left out of international climate negotiations.

The Marshall Islands’ minister of foreign affairs, Tony de Brum, issued a statement regarding the submission to the Maritime Environment Protection Committee’s 68th session in May: “The goal of keeping global temperature rise under 1.5°C to 2°C degrees requires action from all countries, and all sectors of the global economy. International shipping must be part of the action. While the sector currently contributes only 2%-3% of global emissions, its projected growth is a real cause for concern.

Without urgent action, it is estimated that the sector could soon account for between 6% and 14% of global emissions – as much as the entire European Union emits today.

“Back under the 1997 Kyoto Protocol, only industrialised countries were instructed to work with IMO to take coordinated action to limit shipping emissions. Since then, we have seen too little movement on the issue, and global shipping emissions have continued to rise unabated.

“We are an island nation and shipping is one of our lifelines – we cannot survive without it. At the same time, carbon emissions, including those from shipping, pose an existential threat to our people and our country.

“Once again, the Marshall Islands is determined to lead by example.

We want to put ourselves at the forefront of the transition towards a low-carbon transport future. We are the first country in the Pacific to set a transport efficiency target for ourselves – a 20% cut in the use of fossil fuels for domestic transport by 2020, and we are exploring other

ways to green our international registry. But the actions of one or small group of registries alone will not be enough. Ships these days can jump easily from flag to flag to avoid tougher standards.

“Cleaning up this global industry requires a global approach.

With a strong wind blowing in the climate action sails en route to Paris, the IMO must move to set a sector-wide international shipping emissions target now.”

Addressing members of the Singapore Shipping Association recently, the chairman of the International Chamber of Shipping (ICS), Masamichi Morooka, warned about the dangers of regional maritime regulation being adopted by governments at variance to the global maritime conventions adopted by IMO. “Global rules for a global shipping industry is not just a slogan,” said Morooka, before criticising the approaches to the regulation of shipping being pursued by the United States and the European Union.

Morooka began by highlighting the big problem caused by the different ballast water treatment regime that applies in the United States to that adopted by the IMO through the Ballast Water Management Convention.

“Whether we like it or not, the political reality is that the IMO convention is probably going to enter into force, sooner rather than later, and we therefore have to make it work. But the conflicting IMO and US requirements, when combined with the lack of systems fully approved by the United States, could produce an impossible dilemma in which some ships might not be able to operate in US waters if the IMO convention enters in force before US approved equipment is commercially available.”

He added: “The problem is that the United States has adopted a process for the approval of ballast treatment equipment that is different to that adopted by IMO. At the request of the shipping industry, led by ICS, IMO has

“We want to put ourselves at the forefront of the transition towards a low-carbon transport future”

30 – Summer 2015

REGULATION

agreed to make the IMO type-approval process more robust, while also advising governments not to penalise shipowners that have installed first-generation equipment in good faith. But the US will not be a party to the international convention.”

Under the current US regulations, as applied by the US Coast Guard, shipowners that have installed IMO typeapproved systems, at a cost of between $1 million and $5 million per ship, might have to replace the system completely after only five years. This is a particular concern for operators that have installed ultra-violet systems.

“This is an example of the very bad situation that can result when nations decide to adopt maritime rules unilaterally.”

Morooka then turned his sights to the European Union’s decision to preempt current IMO negotiations on a global data collection on shipping’s CO2 emissions by adopting a unilateral, regional Regulation on the Monitoring, Reporting and Verification of individual ship emissions – which will also apply to non-EU flag ships trading to Europe – in advance of IMO completing its work.

“Until now, with the industry’s support, the IMO negotiations have been progressing well,” said the ICS chairman.

“But there is a danger that the EU initiative will be seen by non-EU nations as an attempt to present them with a fait accompli.” This includes controversial elements, such as the publication of commercially sensitive individual ship efficiency data, an idea that had previously been rejected by the majority of IMO governments during a meeting of the Marine Environment Protection Committee in October 2014.

Morooka remarked: “As the IMO negotiations on additional measures to help reduce CO2 continue, it will be vital for EU member states to explain how the new EU regulation can be implemented in a way which is fully compatible with whatever might be agreed by IMO for global application, in the interests of avoiding the unhelpful complication of a separate regional regime.”

Members of the Round Table of International Shipping Organisations (which comprises the Baltic and

International Maritime Council, ICS, the International Association of Dry Cargo Shipowners and the International Association of Independent Tanker Owners) have also jointly expressed their deep concern that the international convention to regulate ships’ ballast water may come into force in the near future without a realistic implementation schedule that recognises the timetable for US type-approved ballast water management systems.

The Round Table believes that the resulting dilemma would force the international shipping industry to spend millions of dollars on ballast water management systems that may not achieve US type-approval and therefore will need to be replaced in a short period of time.

It emphasises that it supports the need for international requirements to protect local ecosystems from the impact of invasive species carried in ships’ ballast water. The Round Table also firmly believes that shipping is a global industry requiring global regulation. The Ballast Water Management Convention is developed by IMO and is therefore the best instrument to achieve this objective.

The Round Table expects the Convention will be ratified very shortly and enter into force as early as 2016.

Shipowners that have not already done so will be required to spend between $1 million and $5 million to install a ballast water management systems on each of their ships in accordance with the schedule established in Assembly Resolution A.1088(28). It is estimated that there are 50,000 ships that will be required to fit ballast water management systems over a five-year period.

However, this may also create an impossible situation for ships that trade to the United States, where unilateral national regulation is already in force. The US regulations ultimately require all ships that discharge ballast into US waters (12 miles) to treat this through a US Coast Guard (USCG) approved ballast water management system. Currently, there are a number of ballast water management systems in the USCG testing and approval process, but none have yet received type approval. The Round Table has urged the USCG to approve as many ballast

water management systems as possible, as soon as possible, and provide a pragmatic schedule for the installation of such equipment. Further meetings between the Round Table and senior leaders of the US Environmental Protection Agency (EPA) re-emphasised these points.

“There are 54 ballast water management systems approved under the IMO regime, but, worryingly, only 17 manufacturers have indicated an intent to submit their system for USCG approval testing. There is no guarantee that systems submitted will gain approval under the stringent US testing regime; consequentially, when the IMO convention enters into force, shipoperators trading to the US will be forced to fit a ballast water management system that may never achieve USCG type approval.

“If the chosen system does not obtain USCG approval, it will have to be replaced within five years in order to continue to trade to the US. A shipowner, who, in good faith, wants to comply with international and national ballast water management requirements therefore faces an unacceptable position of having to possibly invest twice in a ballast water management system through no fault of his or her own.”

The Round Table believes the safest way to avoid the problem is to ensure that there are sufficient USCG-approved ballast water management systems available on the market before the IMO Convention enters into force. This also implies that national ballast water management system manufacturers should be encouraged to apply for US approval; the low rate of application raises serious concerns over confidence in the operational capability of equipment that is already being sold.

Summer 2015 – 31

TECHNOLOGY

TALKING TECHNOLOGY

Singapore’s port authority has recently agreed an ambitious programme of R&D development

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he Maritime and Port Authority of Singapore (MPA) has signed a memorandum of understanding (MoU) with the Agency for Science, Technology and Research (A*STAR)

to collaborate in research and development (R&D) in various fields relating to maritime technologies. The agreement was signed by MPA chief executive Andrew Tan and Dr Raj Thampuran, managing director of A*STAR, at the inaugural Singapore Maritime Technology Conference.

Under the five-year MoU, MPA will leverage the capabilities of all research institutes under A*STAR’s Science and Engineering Research Council to promote multidisciplinary R&D projects in maritime technologies between the government, academia, and industry.

The MoU will, among others, cover R&D in the following areas: • Development of next-generation maritime communications technologies, which include satellite, terrestrial and wireless modes of communication, particularly enhanced applications of TV white spaces technology to improve productivity and safety.

• Research into new robotic capabilities supporting the marine industry, which includes marine-grade robots and autonomous vehicles to enhance port and maritime operations for greater productivity and safety of both personnel and the port.

• Environment technology, which consists of applied research into marine sustainability, renewable energy and the use of emission reduction technology in ports in terms of infrastructure, processes, equipment and vessels.

• Modelling, simulation and visualisation technologies to study and understand the requirements of the nextgeneration port.

Tan says: “This MOU is a further extension of our strong partnership with A*STAR in the area of maritime R&D, with a focus on new technologies and systems that will enhance the competitive edge of our port and its operations, given the increasingly complex demands and challenges. The MOU covers the latest communications systems and technology, such as TV White Space, unmanned and autonomous platforms, simulation and modelling capabilities, as well development in environment technologies.”

Thampuran adds: “This MoU signifies the deep partnership between A*STAR and MPA over the past decade. It serves as a framework to bring our partnership to a new level by delivering even more ideas and innovative technologies to the maritime and offshore industry.”

ABB AZIPOD Power and automation technology group ABB has introduced a new addition, Azipod D, to its line of Azipod electric propulsion offerings. This new product will allow a wider range of vessel types to benefit from the proven reliability and flexibility that have made Azipod the leading propulsion system across numerous ship types. ABB’s gearless Azipod propulsion system is already the preferred choice of cruise vessels, icebreakers, icegoing cargo vessels and offshore accommodation ships. With the Azipod D, shipping segments such as offshore drilling, construction and support vessels and ferries will have even more choices to benefit from the higher flexibility, reliability and energy efficiency provided by Azipod propulsion technology.

“We’re excited to expand the Azipod propulsion family and make the benefits of electric propulsion available to a wider range of ships. Shipowners and operators demand solutions that are reliable and improve

“The MOU [will] focus on new technologies and systems that will enhance the competitive edge of our port and its operations”

32 – Summer 2015

TECHNOLOGY

their competitiveness in a volatile market – the Azipod D is our answer to these demands,” says Peter Terwiesch, president of ABB’s process automation division.

The electric propulsion behind ABB’s Azipod units enables shipowners and operators to enjoy higher profitability from their vessels by lowering maintenance costs and cutting fuel consumption. Benefits of the Azipod D propulsion system also include superior manoeuvrability, competitive investment cost, ease of service and maintenance, and a significant performance increase compared with mechanical thrusters.

This new Azipod thruster family member provides designers and shipbuilders with increased design flexibility in order to accommodate a wide range of hull shapes and propeller sizes, as well as simple installation of the propulsion units. The Azipod D requires up to 25% less installed power. This is partly owing to the fact that the new hybrid cooling increases the performance of the electric motor by up to 45%.

ABB’s Azipod D propulsion power ranges from 1.6MW to 7MW per unit.

The characteristics of Azipod propulsion make it particularly appealing to the offshore shipping segments, where most vessels operate in dynamic positioning mode and require highest reliability. In conjunction with electric propulsion, an

Azipod propulsion system is the ideal solution to meet varying power demand, high propulsion efficiency and flexibility, all of which are typical requirements of the offshore industry.

According to leading shipbroker and research firm Clarksons Research, the number of vessels with electric propulsion has been growing at a pace of 12% per year over the past decade – three times faster than the world’s fleet.

Since its development by ABB in 1987, the Azipod electric propulsion system, a streamlined steerable pod motor mounted below the ship, with the propeller connected directly to the motor shaft, has become the preferred propulsion system across a range of shipping segments. The unit power of Azipod propulsion systems is available up to 22MW. Today, the total power output of all installed and ordered Azipod units is more than 4,000MW, which corresponds to the power consumption of greater London.

NAVICO RADAR LAUNCH Navico’s commercial marine division has announced the launch of Simrad HALO™ Pulse Compression Radar, the world’s most affordable solid-state, open-array radar system with pulse compression technology for non-SOLAS applications aboard commercial vessels.

Combining the advantages of Simrad

FMCW Broadband Radar™ and traditional pulse radar systems, HALO radar detects targets as close as 20 feet (six metres) – well within pulse radar’s shortrange “blind spot” – while delivering exceptional long-range performance up to 72 nautical miles.

HALO radar provides unmatched target resolution, with beam sharpening for enhanced target separation control. In dual range mode, HALO radar functions as two radars in one – monitoring two distance ranges simultaneously with independent displays, controls, miniautomatic radar plotting aid (MARPA) target tracking, and no compromises in detection at either range.

Custom harbour, offshore, weather and bird-finder modes tune HALO radar’s advanced signal processing to ensure targets are seen vividly, even in the toughest environmental conditions.

Commercial fishing fleets will find HALO radar’s bird-finder mode a powerful tool for locating flocks of birds hovering over productive catch areas.

MARPA target tracking, combined with HALO radar’s close-range performance and excellent target separation, gives operators the ability to track commercial and smaller recreational craft at close range in busy harbours, ports and unfamiliar waters. HALO radar provides 10-target MARPA tracking, or 20 targets total in Summer 2015 – 33

TECHNOLOGY

dual range operation, with closest point of approach (CPA) and time to closest point of approach (TCPA) displayed for each target. MARPA tracking requires an optional heading sensor.

The ability to be up and running in less than 30 seconds offers significant commercial advantages in reaction time and productivity. Unlike traditional pulse radar, HALO radar does not rely on a high-powered magnetron to transmit a signal, allowing it to resume full operation instantly from standby and in just 16-25 seconds from poweredoff – avoiding the two- to three-minute warm-up time associated with traditional pulse radar systems.

HALO radar is built to last, with its reliable solid-state transceiver meaning no magnetron to replace, and no manual tuning required as the magnetron heats up or ages.

Similarly, a solid-state brushless motor driver means no motor brushes to wear out and replace.

HALO radar is designed to operate at high speed in winds up to 70 knots, and is rigorously tested to exceed International Electrotechnical Commission (IEC) environmental, vibration and operational standards.

Solid-state technology also means compliance with the latest low emission and radiation standards, making it safe to run HALO radar in anchorages and marinas. In fact, HALO radar is radiation-safe to people within the swing circle of the array on all models. This makes it the ideal choice for non-SOLAS passenger vessels and smaller workboats, safe to mount almost anywhere on board and to operate in close proximity to passengers and crew.

“With the launch of the new Halo radar into the commercial market we have introduced reliable solid-state technology at a fraction of the cost of existing commercial solid state radar currently available on the market,” says Jose Herrero, managing director of Navico’s commercial marine division.

“By introducing the new radar, even the smallest fleets can take advantage of the comprehensive feature available, with a perfect mix of near and distant range, reliability and resolution without the associated warm-up time, power 34 – Summer 2015

consumption, costly maintenance or harmful emissions.”

HALO radar is exclusively compatible with Simrad NSS evo2 and NSO evo2 multifunction display systems, and connects via Ethernet with a bulkheadmounted interface box below deck.

The radar requires just 40W average in no wind, and 150W at maximum wind velocity. In standby mode, power consumption is only 6.5W, versus 10W to 15W for traditional pulse radar.

With such low power consumption, support for 12- or 24-volt systems, and availability in three-, four- and six-foot open arrays, HALO radar is ideal for a multitude of commercial craft.

EVAC SYSTEM Evac has launched the EVAC Food Waste Collection system. Evac can now supply the entire waste handling system for vessels and rigs, covering both dry and wet waste, from food waste handling to onboard sanitary and wastewater treatment systems.

EVAC provides a complete food waste handling and processing system, designed to handle waste from small to mid-size vessels. The system is ideal for

merchant vessels and offshore vessels.

The use of macerators, comminuters, shredders compactors, incinerators and other devices for shipboard garbage processing equipment makes it possible to reduce shipboard space requirements for storing garbage for discharge in ports. Here, the EVAC range of waste management products provides a convenient solution.

Evac’s food waste handling and processing systems are based on vacuum conveying technology, allowing segregated conveying of the food waste generated onboard. The entirely closed system is completely automatic.

It conveys food waste by pipe transportation into a cyclone, which feeds the food waste to a water extracting station, where water is removed from the waste.

The vacuum system is generated through a two-stage pump process, one pump for air and one pump for liquid. This generates and guarantees a stronger and more reliable vacuum, a big advantage in avoiding unwanted blockages in the piping. The footprint of the Evac vacuum pump unit and holding tank is small, and the water and energy consumption is low.

TOWAGE & SALVAGE

SALVAGE SUPPORT

Peer van Oosterhout and Ad de Klerk from BMT Surveys share their experiences in salvaging a cargo worth several million euros from the Mediterranean seabed

S

urveyors are usually engaged to investigate the cause, nature and extent of a claim, damage or incident. Their role in managing projects to salvage cargo is less known.

Recently, BMT Surveys in Rotterdam was approached by a major European underwriter to investigate the possibility of salvaging a high-value cargo from a vessel that had sunk in Mediterranean waters about 100 metres deep.

Even though the cargo value was significant, the location and other operational considerations made the salvage venture potentially marginal if it was not carefully managed with time and costs controlled.

The initial appointment was to arrange and carry out a feasibility study to assess how much cargo could potentially be recovered and to gauge whether it was commercially and operationally viable. In co-ordination with the insurer, a diving survey and salvage company was appointed with an appropriate survey vessel to conduct a sonar side beam survey of the site, which was 35 nautical miles from the shore. With BMT in attendance, a sonar side scan survey was carried out. This was then followed up by the use of a remotely operated vehicle (ROV) equipped with underwater video equipment.

Once these operations were completed, the collected data was analysed. The analysis confirmed that the majority of the cargo lay scattered on the seabed close to the ship. This allowed the cargo to be accessed without having to disturb the ship, which would have resulted in a larger and more costly operation.

The insurers were provided with a report, including video footage of the wreck site, which supported the opinion that, with the correct equipment, about 75% of the cargo could be salvaged. Subsequently, insurers decided to salvage the cargo and BMT was appointed to assist and manage this recovery process. This included; liaison and negotiations with authorities and

interested parties, finding a safe and secure port to land and store the recovered cargo and on-the-spot monitoring of the operational activity. BMT also assisted the insurers with the sale of the recovered cargo.

The operation took nearly four weeks and, eventually, 80% of the cargo was recovered. The proceeds of the salvage sale were significant and concluded a successful operation.

ISU ASSOCIATE MEMBERS’ DAY CONFERENCE Some 220 delegates registered for the International Salvage Union’s (ISU) associate members’ day conference in London.

Subjects discussed included places of refuge; criminalisation of seafarers; and the Lloyd’s open form (LOF) salvage contract.

Keynote speaker Tom Bolt, performance management director at Lloyd’s, said he recognised that many people do not properly understand LOF and added that Lloyd’s is addressing this with communication initiatives such as a new “video scribe” explaining LOF, which he showed to delegates.

Bolt also highlighted the risks presented by cyber attacks, including the implications for the operation of individual vessels. He also noted the increase in size of the largest containerships – with a capacity of more than 19,000 teu – and questioned whether there was merit in considering a joint insurance and shipping industry approach to preparing for the possibility of handling vast ships as casualties.

The UK Secretary of State’s Representative for Maritime Salvage and Intervention, (SOSREP) Hugh Shaw updated the meeting on EU initiatives on places of refuge. He said that part of the problem was to whom approaches for a place of refuge should be made. He said that a list of designated contact points and a standard formal request template would help and that, unless it was unsafe to do so, there should be no rejection of a casualty without inspection. Shaw added that new

“The operation took nearly four weeks and, eventually, 80% of the cargo was recovered.”

Summer 2015 – 35

TOWAGE & SALVAGE

guidelines should be available by the end of 2015.

The conference also included a ceremony at which the ISU’s Meritorious Service Award was presented for the second time. The award is not for bravery and is not issued annually; it is for outstanding service to the salvage industry. The award was made by ISU president Leendert Muller to the Titan/ Micoperi team responsible for the successful conduct of the largest single wreck removal ever undertaken – the parbuckling and refloating of Costa Concordia. The highly engineered, technically challenging project was carried out in full public view off the island of Giglio in Italy.

In making the award, Muller said: “It was a superbly executed job that brought credit not only to the individuals and companies involved but also to the wider salvage industry. And it therefore gives me great pleasure to make the ISU’s Meritorious Service Award to the TitanMicoperi Costa Concordia project team, including all the men and woman who played their part.”

Commenting on the success of the conference, Muller said: “It has been fantastic to have so many delegates with us today. It reinforces the importance of salvage to the shipping industry and its associated professional services. In particular, we were pleased to hear of some progress, at least in Europe, on the issue of places of refuge.”

The use of Lloyd’s Open Form also came up for discussion, and Adrian Goodger, director at brokers Samuel Stewart & Co, said he believed “LOF has a future, despite the resistance or reluctance of some underwriters and owners who have been strongly advised to only accept LOF as a last resort.

“Were underwriters to feel that salvors were becoming much more user-friendly when it comes to settlements, not immediately turning to the due process to build up their strongest and most valuable case, then they might be more willing accept LOF contracts safe in the knowledge that they don’t come away feeling like they have just sat down with Robin Hood.”

There are instances where LOF is unquestionably the best contract, he 36 – Summer 2015

said, but there are also times when a commercial contract can be considered.

With only 37 LOF contracts recorded in 2014, something radical is needed and quickly if LOF is not to wither and die, he said. Abuse of the contract had to be eradicated.

Richard Gunn, a partner with law firm Reed Smith, said he regarded LOF as “an almost perfect contract”, because it removes the ability to negotiate.

“Negotiation is essentially about assessing your own strengths against the other party’s weakness and seeking to exploit that weakness to your own benefit.”

With LOF, an independent person will decide what the salvor is paid for his services. Underwriters say that LOF is too expensive and they are being squeezed he said. The question of expense he said, needs to be looked at in a different way.

With the value of world trade estimated in trillions of dollars, if you were to cram all those dollars into a single containership which then gets into trouble, the award they would have got in 2013 would amount to less than one container on board, he suggested. He suggested that an underwriter in that position would

Above: ISU president Leendert Muller

have got a good deal. “That is why salvage isn’t expensive.” The problem is that underwriters look at the value of salvage only in relation to the funds of the ships that were saved, he told delegates, whereas salvage arbitrators are making awards based on salvors’ benefit to the industry.

He suggested that if underwriters levied on their marine policies an additional one cent in the dollar and put it into a separate bank account, the premiums incurred would be sufficient to pay the entire salvage industry, according to ISU figures, he said. Underwriters could opt in or out, but in cases where salvors asked for security, those in the fund would have that security waived.

Those who were not in the fund would pay security in the usual way. This would remove concerns of underwriters, because the risk would be being spread across the industry and everyone would benefit because they would know that there was investment in the industry which would enable responders to go out to a casualty. It would also, he felt, stimulate a more collegiate attitude because the problem was being dealt with on an industry-wide basis.

REGISTRIES

ON THE REGISTER There have been some new developments with the registries recently

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

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The Liberian Registry has developed a satellite-based Compliance Assistance Programme (CAP) which has helped ensure regulatory compliance and prevent detentions in some of the world’s most active Port State Control (PSC) areas.

In the process, it has contributed to Liberia being named as the best-performing major ship registry worldwide over the last three years, a period during which it has featured on all PSC White Lists and has been included in the prestigious US Qualship 21 programme, the registry says.

“The development further strengthens the leading role which Liberia has established over a number of years as the world’s most technologically innovative flag state. The CAP tracks ships when they enter selected jurisdictions and allows the registry’s risk analysis team to perform detailed reviews of vessels, their history, and the ports at which they are calling.

As a result, Liberian vessels have experienced a decrease in detentions in heavily trafficked PSC regions such as China.

“The CAP supplements the existing electronic services already provided by Liberia and is part of a program which adopts a uniquely proactive approach to ensuring that ships flying the Liberian flag are properly prepared for their upcoming port calls, and that any possible deficiencies are handled prior to entering port. The system is totally electronic and non-burdensome, and is provided at no extra cost to owners and managers.”

Scott Bergeron, CEO of the Liberian International Ship & Corporate Registry (LISCR), the US-based manager of the Liberian Registry, says, “The Compliance Assistance Programme is just the latest in a series of technological innovations designed to make Liberia the safest and most efficient fleet afloat. Other

examples of the registry’s pioneering approach to technology include the introduction of the online filing of seafarer credentials, enabling owners to save tens of thousands of dollars each year and streamlining the turnaround time for issuing seafarer documents.

“Liberia was also the first flag state to institute the electronic delivery of original documents, which has been hailed by the industry as a ground-breaking service that demonstrates that Liberia is up to speed with 21st century technology and its application to the shipping industry.

“Recently, Liberia also created an online application system that allows Liberian-flag owners and managers, as well as those from other non-party states, to receive their Wreck Removal Certificates without delay through the registry’s online portal.

Liberia is also the first flag state to launch its own powerful state-of-the-art mobile application (app) to enable owners, managers and operators to communicate and interact with the registry on a round-the-clock basis.

“The Liberian Registry has always been a highly proactive flag, working tirelessly to support owners and managers.

Liberia’s significant investments in technology, such as the Compliance Assistance Programme, strengthen its position as the world’s largest quality ship registry.”

Marshall Islands Registry has had a busy year surpassing the milestone of 100 million gt at the start of 2014, and closed the first quarter of 2015 with over 118 million gt.

International Registries, Inc. and its affiliates (IRI), who provide administrative and technical support to the RMI Maritime and Corporate Registries, are focused on the development of a five year plan to ensure the RMI Registry’s personnel service and standards continue to be in line with the high level of quality the industry has come to expect.

“Liberia was also the first flag state to institute the electronic delivery of original documents”

Summer 2015 – 37

service and quality are within your reach

We look forward to seeing you at Nor-Shipping 2015 Visit us at Booth D01-17 International Registries (U.K.) Limited

in affiliation with the Marshall Islands Maritime & Corporate Administrators

tel: +44 20 7638 4748 | london@register-iri.com

www.register-iri.com

REGISTRIES

“Greek, American, Korean, Norwegian, and German owners are the top five ownership groups as far as size in the RMI fleet,” said Bill Gallagher, President of IRI. According to the International Shipping Logistics (ISL) Shipping Statistics Yearbook, the RMI Registry has been the largest foreign flag in the United States and Norway, surpassing their national flags in terms of deadweight tonnage in 2010 and 2013, respectively. In addition, and based on the March 2015 Greek Shipping Cooperation Committee’s Report on Greek Controlled Shipping, the RMI flag is now the largest foreign flag in Greece in DWT and second in ranking overall only to the Greek flag in terms of DWT capacity. The sustained growth of the RMI flagged Greek controlled fleet, with market share rising from 12% in 2010 to 17% by the end of 2014, reflects that the RMI is the top foreign flag choice among Greek shipowners and operators, the registry says.

Clarksons Research Services World Fleet Monitor’s January 2015 Report showed the RMI Registry growing at 14.4% with an average fleet age of 8 years, the fastest growing and youngest

fleet among the top ten flags in terms of GT. “There are over 200 owners/ operators based in Greece that have vessels registered in the RMI, and they represent just over 35% of the overall gross tonnage of the RMI Registry,” continued Gallagher.

Theo Xenakoudis, Director, Worldwide Business Operations and Managing Director of IRI’s Piraeus office, carries on the legacy of his father, Captain Constantinos Xenakoudis, who was instrumental in laying the foundation for the success and growth of the RMI Registry within the Greek shipping community. “As my father used to say to us, if you support the Greek shipping community, they will support you,” said Xenakoudis. “With a strong Greek office offering a wide range of maritime services to Greek operators, we certainly have made that commitment,” continued Mr. Xenakoudis. “The RMI Registry moved into the world’s number three position in 2010 with just over 52 million gross tons and had 200 worldwide employees at that time,” said Gallagher. As the RMI Registry continues to grow, IRI’s vast network of regional offices

has expanded correspondingly to manage this growth. Recently, IRI established a second full-service office in Hong Kong, and expanded seafarer documentation services in the Mumbai and London offices.

In addition, increased inspection resources have also been added in the Long Beach, Baltimore, MD, and Houston, TX offices in the United States, allowing RMI inspectors to work closely with local port State control (PSC) officials, therefore maintaining the quality of the RMI fleet and saving owners and operators costly delays. “Today the RMI Registry has 350 worldwide employees and expects to continue to perfect the decentralization model of the RMI Registry’s services and make them even more accessible to stakeholders,” said Gallagher. “We are thankful for the continued support of our owners and operators and will strive to provide the best service possible from our worldwide offices,” concluded Mr. Gallagher.

Korean Register (KR) - an IACS member classification society has announced that it has been accepted by the United States Coast Guard (USCG) as an Independent Laboratory (IL)

Summer 2015 – 39

REGISTRIES

to undertake tests, inspections, and evaluations for Ballast Water Management Systems.

KR has been accepted by the USCG, as an independent laboratory, to type approve ballast water management systems in accordance with the US Code of Federal Regulation. The society is the first in Asia and the second in the world outside the US to gain this authorisation, the class society says.

To prevent the introduction and spread of non-indigenous species contained in ships’ ballast water, IMO has developed the Ballast Water Management Convention (BWMC) which will become effective as soon as it has been ratified by the required number of states.

Notwithstanding IMO’s BWMC, vessels wanting to operate in US territorial waters must be fitted with BWM systems that are USCG type approved in accordance with their implementation schedule. The USCG is well known for insisting on stricter test standards which give a greater confidence on the reliability of BWMS. This particular approval requires a high level of ability within the IL and involves the passing of at least five valid and successful test repetitions at each differing levels of salinity during land-based testing; and a higher standard of sampling and analysis.

USCG requirements are more onerous than those demanded by IMO and are expected to become the benchmark for BWM systems.

Commenting on the approval, Dr. B. S. Park, Chairman and CEO of KR said: “We are honoured and delighted to be the first Asian classification society to be selected by the USCG as an internationally renowned facility qualified to deliver high quality testing and evaluation for ballast water management systems to the world’s maritime community. This achievement is a further example of KR’s growing status on the international stage and an endorsement of our technical abilities. We are committed to the development of all relevant technologies and will continue to contribute to the implementation of US Coast Guard regulations. ”

www.worldbunkering.com

www.maritimesecurityinternational.net

AuTuMN 2014

Falling trend

Wage talks

International

www.maritimesecur

Maritime Security

ityinternational.net

a drop in piracy has fuelled A decrease in Somali at the lowest level leaving incidents attacks worldwide, for six years met in February Industry bodies wages for seafarers

AuTuMN 2014

to discuss minimum

goods the Clandestine number of initiatives to halt a drug There have been goods, including movement of clandestine smuggling

Spring 2014

BIG

WORLD BUNKE RING

SEAFUFGEE

independents

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place of refuge for Finding a suitable the has been much on ships in distress times agenda in recent

INSIDE THIS ISSUE:

Spring 2014

lubricants: Slow steaming and fuel switching pose Far east: Singapo challenges re leads way on flowmeters, Hk russia: Crucial on emissions court case won by suppliers

11/04/2014

Cover.indd 1

WINTER/S PRING 201 5

W RLD SHIPPING

WINTER/SP

COMPRE HENSIV E

COVERA GE

OF

THE

SHIPPIN G

RING 2015

INDUST RY

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

MSI Spring 2014

– 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 developme nts in the communica tions 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 ING / FREIGH T FOCUS

CLEAR

SKY

low sulphur requi rements in emission contr ol

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40 – Summer 2015

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CLASSIFICATION

ECO-FRIENDLY TRANSPORT Alternative transport solutions are part of the mix for class societies

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new, competitive and eco-friendly maritime transport concept, the Cargo Ferry project, was presented in Oslo recently. The result of more than two years of work, the concept has been developed as an alternative transport solution for containers that are carried for more than 200km on land. The project was presented onboard Nor Lines’ brandnew LNG-fuelled ship, Kvitbjørn.

The report presents a logistics solution, concept ship and market analysis, while also documenting Cargo Ferry’s potential profitability. A group of 27 companies with interests and expertise in short sea shipping, led by class society DNV GL, Shortsea Services and the Norwegian Marine Technology Research Institute (Marintek), have cooperated to develop the report with a view to moving long-distance truck cargo off the roads.

The main market for the Cargo Ferry concept is goods that are currently transported on trucks for long distances to and from coastal Norwegian towns. After conducting extensive customer analyses and interviews, the project has identified this market as covering some 17-20 million tonnes of goods each year.

“The analyses show there is a significant potential market for a maritime-based logistics solution,” says Remi Eriksen, DNV GL group executive vice-president and chief operating officer.

The Cargo Ferry concept offers transport to and from destinations that are linked together by efficient maritime transport on four main routes, including distribution to and from ports. The logistics solution covers the transport of goods from one goods terminal to another, or from one warehouse to another, but can also include transport from a sender to a recipient, or be limited to only port-to-port. The primary customers are those that, individually or collectively, fill up a container, either as a full container load or a large lessthan-container load.

Cargo Ferry is built around a concept for a new “lift-on/lift-off” (LoLo) vessel. With its own cranes and cell guides, the vessel can carry between 110 and 140 40-foot/45-foot containers. The ship has a service speed of 12-15 knots, is fuelled by liquefied natural gas (LNG), has a battery for hybrid operation and can use shore power. As a result, the vessel has an extremely low emission profile.

It also operates without assistance from shore through the use of an automated mooring system. A fully developed solution with the capacity to deal with the cargo volume identified in the report will require 14 ships transporting the equivalent of between 220,000 and 270,000 45-foot containers annually.

However, the overall transport price would be between 20% and 30% lower than if trucks were used, and the concept is flexible, punctual, eco-friendly and has daily departures. “It will be possible to transfer 5 million tonnes of cargo from roads to the sea, at a minimal cost to the authorities. This represents an annual benefit to society of NOK1.3 billion. On top of that, the reduction in road traffic means fewer accidents on the roads, less road maintenance and a dramatic drop in CO2 emissions as well as emissions of SOx and NOx, which gives a positive health outcome,” says Eriksen.

Incorporating many innovative features, can carry as much cargo as 200 trucks. Using LNG as fuel virtually eliminates sulphur and particulate emissions, as well as significantly reducing the vessel’s NOx and CO2 emissions. The DNV GL classed ship will sail on a fixed route between northern Europe along the coast of Norway to the north of the country and back.

Developed in close cooperation with Rolls-Royce, the vessel has an innovative hull design, propulsion system and power generation system onboard.

“The overall transport price would be between 20% and 30% lower than if trucks were used, and the concept is flexible, punctual, eco-friendly and has daily departures”

DNV GL STUDY Frameworks for regulation vary considerably worldwide, and may evolve in different directions, requiring oil and gas companies to align their global operating Summer 2015 – 41

CLASSIFICATION

standards towards unique local regulations.

They also need clear oversight where requirements are less developed. DNV GL’s report “Regulatory Outlook: The way forward for offshore regulatory safety regimes” outlines what it believes an effective offshore safety regime should look like, including greater sharing of lessons learned between regulators and operators, larger fines for major accident hazards and more harmonisation of Health and Safety Executive regimes.

“Occupational safety has improved greatly in recent years,” says Graham Bennett, business development manager, oil and gas, for UK and Sub-Saharan Africa at DNV GL. “However, major accidents and near misses still happen, and new ways to reduce major accident hazards need to be identified.”

“We cannot say with certainty how national or regional regimes will develop, but we have been able to present a range of possible future developments and our views on what an effective offshore safety regime should look like,” Bennett adds.

The study includes high-level case studies for the offshore regulatory frameworks in Mexico, Brazil, the EU, Angola and Australia. It also covers the Arctic from an international regulatory perspective, as well as nationally for Alaska (US), Canada, Greenland, Norway and Russia.

“DNV GL’s contribution as a risk management expert is to assist the industry, which is facing increasingly complex and demanding environments, to understand the risks of major accidents. We would like to see learning from both incidents and major accidents implemented in regulation as well as in business practice,” says Elisabeth Tørstad, chief executive, oil and gas, at DNV GL. Fatigue loading has increased as blowout preventer (BOP) systems are getting bigger, owing to regulatory development and the need for deep-water functionality.

Furthermore, rigs are taking longer to drill multilateral wells and install complex completions. The DNV GL recommended practice for wellhead fatigue analysis (DNVGL-RP-0142) provides a framework for assessing fatigue of wellhead and casing systems owing to wave-induced loading. It provides an overview of the different analysis methods, challenges and modelling details to consider.

42 – Summer 2015

Ole Rengård, senior vice-president and project manager, oil and gas, at DNV GL, says: “During all riser-connected operations, the well system is subjected to fatigue loading induced by environmental conditions and associated rig motions.

Analysis of a connected riser system, including the well system, is both complex and multidisciplinary.” Furthermore, the chairman of the Joint Industry Project (JIP) steering committee, Buba Kebadze of BP Exploration, adds: “The recommended practice will become an important industry reference and provide a methodology for assessing the fatigue of the subsea wellhead and associated riser systems, forming a common basis for exchanging data between the wellhead supplier, rig owners, analysis houses and operators.”

Ongoing JIP work involves the following participants: BP; Centrica; Chevron; Det Norske; Eni; ExxonMobil; GDF Suez; Hess; Lundin; Marathon; Nexen; Shell; Statoil; Talisman; Total; and Woodside.

The JIP’s advisory board is chaired by Statoil and consists of BP, Chevron, ExxonMobil, Hess and Marathon. Currently, the JIP is preparing for detailed studies of the uncertainties in analysis methodologies, and is investigating when and how to use different modelling methods. These studies will be carried out by different analysis houses and the results will be documented in technical reports and further annexes to the recommended practice.

“Every year, DNV GL invests up to 5% of revenue into research and innovation and manages 100 ongoing joint industry projects. Providing a neutral ground for the industry to meet and discuss its most complex challenges means we can quickly find solutions for the whole industry. Our openly accessible industry standards and recommended practices can help ensure safety, increase predictability throughout the supply chain and help the industry to manage costs, without hindering innovation,” says Tørstad.

The assessment of wellhead fatigue damage under this recommended practice is applicable during all stages (or types) of operations when riser systems interface to the well, including drilling, completion, production, workover and plugging and abandonment. Fatigue accumulation continues until the riser is ultimately disconnected from the wellhead. DNV GL

has a broad experience in analysis and in helping the industry assess the integrity of drilling systems and wells.

RINA SERVICES CONTRACT RINA Services has been awarded a contract to provide design review and third-party certification services for a major port and logistics hub development at Turkmenbashi, on the Caspian Sea coast of Turkmenistan.

The $1.5bn Turkmenbashi International Port is being built by a leading Turkish construction company, Gap İnşaat Yatırım ve Dış Ticaret A.Ş. Due for completion in 2017, the port complex will include four terminals, road and rail links, and a ship repair yard. Freight throughput is expected to reach 25 million tonnes by 2020.

Michele Francioni, chief executive at RINA Services, says: “RINA has been chosen for the project design review and construction monitoring and certification because we can bring together maritime, construction, infrastructure and project management skills. RINA has a strong footprint in Turkmenistan, which is a growing and important trading nation in a key geo-strategic location. All parties respect our independence. We will provide our services to ensure the project is delivered on specification, making it a powerful economic generator in the Caspian region and a key link in the Silk Route.”

A major pipeline is already being built to link Turkmenistan’s Galkynysh Gas Field, the world’s second-largest natural gas deposit, to Turkmenbashi. The port complex will export oil and gas products and textiles and facilitate trade between Europe and the Middle East and Asia.

Says Francioni: “RINA’s experience with and focus on the environment is a key factor. The State Service of Maritime and River Transportation of Turkmenistan intends that the new port will be built from the outset as part of a multimodal network linking road, rail and water transportation in an environmentally friendly way. We know about ports, we know how to manage environmental issues, we know Turkmenistan, we understand what they want and we have good experience of working with Turkish construction companies on major infrastructure projects.”

GEOGRAPHICAL FOCUS CANADA

LIQUID POTENTIAL Canada could find itself in a position to deliver more competitive LNG

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he huge gas resource base in North America offers significant potential for liquefied natural gas (LNG) exports, but currently it is the US, not Canada, that is building an LNG export industry, according to Wood Mackenzie’s latest analysis. However, with potentially lower LNGrelated costs in Canada owing to the oil price collapse, Canada may have the opportunity to potentially be cost-competitive with US LNG. “Some 50 million tonnes per annum of LNG production capacity is now under construction in the US, compared with none in Canada,” notes Alex Munton, principal analyst, Americas primary fuel fundamentals, at Wood Mackenzie.

Wood Mackenzie’s analysis points to cost as a key reason behind the different pace of US and Canadian LNG development. In Western Canada, where most of the large-scale project activity is focused, multiple factors add to cost: the proposed largescale developments are all on remote greenfield sites that have little of the infrastructure needed for an LNG development; the long-distance pipelines, up to 900km, required to access feed gas; and the lower labour availability relative to the US. These higher capital costs have made it difficult for projects in Western Canada to demonstrate the commercial returns necessary for investment to be sanctioned.

In the US, it is quite the opposite. LNG developers have focused on low-cost brownfield expansion, where the incremental expenditure needed for LNG exports is primarily the cost of adding liquefaction trains as well as some modifications to the existing marine facilities, storage tanks and pipelines. The facilities are typically being built in industrialised areas of the US Gulf Coast with good access to a large local labour pool.

According to Wood Mackenzie, as the level of US LNG construction activity increases, costs are rising.

Munton explains: “The availability of cheap gas feedstock has brought about a resurgence in gas industry

investments in the US, which has pushed up demand for craft labour, leading to wage pressures and overall cost increases. In addition to the nine liquefaction trains now being built on the US Gulf Coast, construction has also started on six world-scale ethane crackers in Texas and Louisiana, as well as methanol, fertiliser and other petrochemical plants. Total capital expenditure on firm developments in the petrochemicals and LNG industries in the US could exceed $130 billion over the next five to six years. Much of this investment is in the Gulf Coast region.”

Wood Mackenzie emphasises that the oil price collapse has had little effect on the level of construction activity in this area.

“Although Sasol has delayed plans to build a 96,000 barrel per day gas to liquids project in Louisiana, most of the big industrial projects are too far advanced to slow down now,” says Munton.

“Also, there is a shortage of welders, pipefitters, machinists and other technical crafts in the US Gulf Coast and we estimate that it could be at least 18 – 24 months before capital costs for new LNG developments return to the level they were at prior to this gas-fed construction boom.”

In Canada, however, the oil price collapse offers the potential for a lowering of LNG-related costs, according to Wood Mackenzie’s analysis. The local construction market in Western Canada has already started to cool with the end of a period of heavy investment in oil sands between 2011 and 2014, as 16 unique oil sands project phases got delivered into production.

Development spend in oil sands is expected to drop from over C$29 billion (US$27 billion) in 2014 to under C$20.5 billion (US$17.1 billion) in 2015.

Now the collapse in oil prices is contributing to more rapid industry cost deflation as companies defer further phases of investment, causing a sharper reduction in capital spend and greater slack in the labour market, including crafts.

Munton adds that the outlook for steel prices is also bearish.

“This improves the cost structure

“With potentially lower LNG-related costs owing to the oil price collapse, Canada may have the opportunity to [compete] with US LNG”

Summer 2015 – 43

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OPENING THE LAKES TO

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GEOGRAPHICAL FOCUS CANADA

for LNG developments in Canada to a greater extent than those in the US because of the need for long-distance feedgas pipelines. Steel is a major component of the overall cost of those pipelines and, with a slump in steel prices, cheaper pipelines help lower overall costs.”

In addition, Wood Mackenzie highlights the implications of recent tax concessions by both the federal Canadian government and the local British Columbian government in improving project profitability.

Munton concludes: “A window of opportunity is opening for Canadian LNG to become potentially cost competitive with US LNG into Asian markets. In order to proceed with Pacific North West LNG in 2015, for instance, PETRONAS will be hoping for cost reductions of at least 15% from contractors compared with levels tendered in 2014. It remains to be seen whether contractors will oblige. If they do not, then the worry will be that a rising oil price will push the costs of Western Canadian LNG back up again.”

“For the US, the reduction of the Gulf Coast’s cost advantage does not jeopardise projects close to being sanctioned – like Corpus Christi [in South Texas] – and nor does it preclude a second wave of US LNG from getting sanctioned later. There are other benefits to US LNG, such as greater operational and destination flexibility than many other supply options available. But with US LNG construction costs continuing to increase and competition between projects growing, developers will likely need to reduce expectations of returns if they are to remain competitive.”

Great Lakes against the introduction and spread of aquatic invasive species,” says Paul Pathy, president and joint chief executive of Fednav Limited.

“After extensive analysis and testing, we are confident that the technology we are choosing is an affordable and effective means to ensure that Canada meets its ballast water requirements. We are proud to be leading the way, along with government and industry partners, in establishing a level playing field for the Canadian, US and international fleets to operate together in the Great Lakes region.”

Developed by JFE Engineering Corporation, Japan, the BallastAce system will be installed on Fednav’s new lakers and will be effective in both fresh and salt water. BallastAce operates through a sophisticated filter and sodium hypochlorite injection mechanism in the ship’s ballast system.

Fednav chose this solution after years of testing. From the Federal Yukon (copper ions) to the Federal Welland (electrodialytic disinfectant) to the Federal Venture (chlorination), the company has spent millions of dollars over many years to find a reliable, effective, and economical solution to the environmental problems caused by aquatic invasive species.

The contract with JFE commits Fednav to install BallastAce systems in its 12 lakers under construction at Oshima shipyard in Japan. JFE will install its first system in the Federal Biscay, delivering in October 2015. Consequently, Fednav may well be able to introduce BallastAce to the Great Lakes at the opening of the

Saint Lawrence Seaway in 2016.

With Fednav’s encouragement, AMSapproved BallastAce is now pursuing full US Coast Guard type approval for freshwater and saltwater certification at the Great Ships Initiative (GSI) and Maritime Environmental Research Center (MERC) test facilities in Superior, Wisconsin, and Baltimore, Maryland.

The IMO’s Ballast Water Management Convention, to which Canada is a signatory, is likely to enter into force in 2016, the year the US Coast Guard and Environmental Protection Agency (EPA) require the installation of systems on ships trading in US waters.

Federal Marine Terminals Inc (FMT), recently celebrated its 50th anniversary of operation. Incorporated in 1965 in Chicago, FMT is recognised worldwide as an industry leader in North American marine terminal operations. With its 12 operations, FMT is active along the US East Coast, in the Gulf of Mexico, and on the Great Lakes. Leveraging its experience in stevedoring, terminal handling and logistics services for all types of dry cargo, FMT offers a seamless supply chain in the markets served.

“FMT is proud to have prospered from its humble beginnings to a successful contender in a very competitive market,” says Pathy, who is also chairman of FMT. Michel Tosini, executive vice-president of FMT, adds: “Through the hard work of our experienced, determined employees, to the loyalty of our customers and business partners, and through the solid long-range planning of our management team, we are pleased to be celebrating this milestone anniversary.”

FEDNAV INVESTMENT Fednav has announced an order for 12 ballast water treatment systems to equip its ships that are currently under construction. This makes Fednav the first shipping company in Canada and the Great Lakes to announce the installation of ballast water treatment systems, well before the regulatory requirement, the company says.

“Our company is committed to stimulating trade and enhancing Canada’s economy, while protecting the Summer 2015 – 45

CORPORATE VIEWPOINT

FEDNAV

Sticking to fundamentals the key to continued success Fednav has been associated with shipping in Canada for over 70 years and in the Great Lakes since the opening of the St. Lawrence Seaway in 1959. Today, the Montreal-based company operates a fleet of about 85 bulk carriers, most of which are built to offer year-round service to the St. Lawrence, Saguenay River, the Hudson Bay, and even the Arctic.

Last fall, the Nunavik, Fednav’s 30,000-HP icebreaking bulk carrier made a historic, unescorted voyage from Deception Bay in Northern Quebec to China through the Northwest Passage.

The vessel, along with the company’s Umiak I, are the most powerful icebreaking bulk carriers in the world, servicing Arctic mines 12 months each year.

Fednav operates the largest fleet of Great Lakes-suitable, ocean-going bulk carriers that ship to and from the Great Lakes—its main niche market. In fact, the company this May took delivery from Oshima Shipyard of Japan of the first of 12 lakers. These additions to the fleet demonstrate the company’s confidence in the future of shipping in the St. Lawrence Seaway and the Great Lakes.

These new-generation vessels represent a major step forward in terms of environmental benefits. With their advanced design and more efficient engines, they will produce 20% less emissions than vessels of the same dimension built by Oshima Shipyard 15 years ago and, therefore, contribute significantly to Fednav’s objectives of reducing GHG emissions in its fleet on a continuous basis. All of the vessels will receive the CLEAN DESIGN notation from the DNV classification society.

The Great Lakes in the heartland of North America, are also at the heart of Fednav’s environmental strategy. A founding member of Green Marine, a voluntary, bi-national environmental program, the carrier has recently announced the order for 12 ballast water treatment systems (BallastAce) developed by JFE Engineering Corporation in Japan, to equip its vessels currently under construction. This places Fednav as the first shipping company in Canada and the Great Lakes to announce the installation of a ballast water treatment system well before the regulatory requirement.

This news thereby highlights the company’s commitment to stimulating trade and enhancing Canada’s economy, while preventing the introduction and spread of aquatic invasive species in the Great Lakes.

For the St. Lawrence River, Hudson Bay, and West Coast bulk trade, comprised mainly of imported alumina, sugar, fertilizer, and coal products, and exported grains, industrial minerals, and wood pellets, the company employs a growing fleet of supramax and handymax vessels as well as its handy-size lakers, a fleet that remains among the newest, most energy efficient, and best managed operating internationally.

46 – Summer 2015

Transportation of breakbulk from Europe, including steels and other general cargoes such as heavy and/or bulky industrial or agricultural equipment, yachts, beer vats, and windmills, is undertaken by a Fednav Atlantic Lakes Line, or FALLine.

With roughly 60 sailing per year, FALLine is the premiere transatlantic breakbulk transportation service that has offered uninterrupted liner operations to shippers since the opening of the Seaway in 1959.

Shipping in the Great Lakes is also synonymous with Federal Marine Terminals (FMT), Fednav’s cargo-handling division, which celebrates its 50th anniversary this year. Six of FMT’s twelve dry bulk and/or general cargo operations are in the Great Lakes at the ports of Burns Harbor, Cleveland, Hamilton, Milwaukee, Thorold, and Toronto. Together with Fednav Direct, the company’s logistics service, Fednav is able to offer a complete through service to its large international customer base.

Conscious of the importance of giving back to the community—local and maritime—the company not only contributes actively to many associations and organizations and offer a number of fellowships, but has also given employees stewardship in funding community causes close to their hearts and homes.

The most significant characteristic that sets Fednav apart is the company’s unwavering commitment to delivering a higher standard in everything it does.

CORPORATE VIEWPOINT

COMPANY NEWS FEDNAV CELEBRATED ITS 70TH ANNIVERSARY Fednav recently celebrated its 70th anniversary. Established in 1944, it is the largest dry-bulk shipowning and chartering group in Canada as well as the biggest ocean-going user of the Great Lakes/Seaway System and leader in the Canadian Arctic.

According to Mark Pathy, President and Co-CEO, “sticking to the fundamentals has been key to our continued success – a prudent approach, measured growth, and, more importantly – a focus on relationships with our customers and quality and reliability in our service and fleet.”

ORDER OF LAKERS

DELIVERING A HIGHER STANDARD 1000 de La Gauchetière Street West, Suite 3500 Montreal, Quebec Canada H3B 4W5 T 514.878.6500 www.fednav.com

time satellite imagery in order to operate Enfotec’s proprietary onboard ice-navigation system, Icenav™, further enabling safe and efficient transit.

“Fednav is proud to have designed this remarkable ship and to have planned the first independent commercial voyage through the Northwest Passage,” said Paul Pathy, President and co-CEO of Fednav Limited. “It is through the extraordinary capabilities of the Fednav team, the ship’s crew, and its world-leading technology that we can undertake this journey with confidence.”

Living up to its promise to deliver a higher standard, Fednav orders a total of 16 energy-efficient handy-size bulk carriers.

Modern and environmentally friendly, these Lakes-suitable box-hold ships are third-generation vessels built by Oshima in Japan. The high-quality 34,000-DWT ice-class handies scheduled for delivery from 2015 to 2018 are designed to meet the requirements of the CLEAN DESIGN notation from the DNV classification society. These additions to the fleet demonstrate the company’s confidence in the future of shipping in the St. Lawrence Seaway and the Great Lakes.

FEDNAV HAMBURG MARKS 50 YEARS OF OPERATIONS

BALLAST TREATMENT SYSTEM GETS GREEN LIGHT

Incorporated in 1965 in Chicago, Federal Marine Terminals, Inc. (FMT) celebrated its 50th anniversary on April 23. FMT today has operations in 12 ports along the US East Coast, in the Gulf of Mexico, and on the Great Lakes. Leveraging its experience in stevedoring, terminal handling, and logistics services for all types of dry cargo, FMT offers a seamless supply chain in the markets it serves.

On April 15, 2015, Fednav announced an order for 12 ballast water treatment systems (BallastAce) developed by JFE Engineering Corporation in Japan, to equip its vessels currently under construction. This places Fednav as the first shipping company in Canada and the Great Lakes to announce the installation of a ballast water treatment system, well before the regulatory requirement. This news thereby highlights the company’s commitment to stimulating trade and enhancing Canada’s economy while protecting the Great Lakes against the introduction and spread of aquatic invasive species.

NUNAVIK FIRST TO CARRY ARCTIC CARGO THROUGH THE NORTHWEST PASSAGE Late last summer, the company’s Nunavik was one of the first commercial vessels to transit the Northwest Passage completely, and the first to do so unescorted with an Arctic cargo. The 31,700-DWT icebreaking bulk carrier sailed from Deception Bay in Northern Quebec carrying a full cargo of nickel concentrate bound for the port of Bayuquan, Liaoning Province, China.

By favouring the Northwest Passage over the conventional Panama Canal route, the Nunavik saved roughly 5,000 nautical miles (9,400 km) or 20 days of sailing and therefore, more than 1,300 tonnes of greenhouse gas emissions.

The vessel was supported by shore-based team of experienced Arctic operators and ice navigation specialists from its subsidiary, Enfotec. The vessel received regular ice charts including real-

50 years ago this past March, Fednav opened its first foreign office in Hamburg, Germany. When it was founded, Fednav Hamburg acted as both an extension of the company’s chartering team and for many years, as a liner agent for the company’s regularly scheduled trans-Atlantic general cargo service. Today, this office plays a key role representing Fednav in Europe, including in the Baltic and Black Sea regions.

FMT CELEBRATES 50 YEARS

FEDNAV TOPS IN ANNUAL EMPLOYER COMPETITIONS In 2015, Fednav was recognized for the fourth consecutive year

by The Gazette, as one of Montreal’s Top Employers and by The Globe and Mail, as one of Canada’s Top Employers for Young People for the second year running, acknowledgements that illustrate the company’s commitment to the employment and development of its employees.

FEDERAL TYNE AWARDED FIVE STARS WITH RIGHTSHIP At the end of October 2014, the Federal Tyne earned a perfect RightShip rating on all three vetting parameters: a 5-star risk rating, a 5-star environmental rating, and a greenhouse gas (GHG) emissions rating of A+. Out of about 18,000 bulk carriers currently in service, only 26 vessels have a 5-star rating on both the risk and environmental side—and 6 of those vessels are owned by Fednav. The Federal Tyne distinguishes itself by having a perfect GHG emissions score of A+, and is one of only two bulk carriers that hold this distinction in the world.

Summer 2015 –47

GEOGRAPHICAL FOCUS NORWAY

THE EFFICIENCY OF EVERY DOLLAR Finn Bjørnstad and Birgitte Karlsen, partners at Wikborg Rein’s London law office, explore how cost continues to be a primary driver in North Sea investment decisions

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eductions in the cost of exploration and production activities have been top of the agenda for oil companies on both the Norwegian and UK side of the North Sea for several years.

Recent government reports, such as the 2012 Reiten Report on the Norwegian continental shelf (NCS) and the 2014 Wood Review on the UK continental shelf (UKCS), have reinforced the view that standardisation, removal of regulatory barriers and collaboration between industry participants are of paramount importance in order to maintain profitability and attract future investment in the North Sea. The oil price fall has further emphasised the need to increase the efficiency of every dollar spent as soon as possible, and oil companies operating in the North Sea have already started to reduce their investments in new projects and to take other measures to protect their bottom line.

In 2013-2014, the offshore service industry saw a number of large engineering, procurement, construction, installation and commissioning (EPCIC) contracts for new projects in the North Sea awarded to Asian yards. The fall in the oil price has crystallised the choice facing oil companies – either cheaper Asian suppliers or more experienced, but perhaps more costly, local contractors.

This is a trend that may continue, but it has risks. With increased pressure to cut costs, both new and established contractors need to be aware of the particular regulatory requirements governing the NCS and UKCS (and the differences between them) and to arrive at a price and contract terms that strike a reasonable balance between risk and reward.

This is particularly important when tendering for new types of services, such as decommissioning projects, which are expected to generate substantial work for the offshore service industry in the North Sea. One of the main cost elements

of offshore exploration and production (E&P) activities is the rate of hire of drilling units. Since the fall in the oil price, there have been several examples of oil companies in the North Sea suspending operations under their drilling contracts, including Statoil’s recent suspension of certain drilling contracts with Saipem, Songa Offshore, Transocean and others.

The right to suspend the work of the drilling contractor is not part of Norwegian or English background law, which typically governs drilling contacts on the NCS and UKCS respectively and thus can only be exercised where there is a specific right to suspend in the drilling contract. The existence of such suspension rights raises some important considerations for drilling contractors: (i) whether the oil company can suspend drilling services only in particular circumstances or generally at its discretion; (ii) the notice period for suspension, during which the regular operating rate is payable; (iii) the rate the oil company is obliged to pay during the suspension period, and; (iv) whether the drilling contractor is entitled to terminate the contract where the suspension continues for a certain period.

Even if the wording of the drilling contracts seems, at first glance, to provide a general right for the oil company to suspend its drilling contract with limited compensation to the drilling contractor, a more detailed analysis of the relevant clauses may show that there are restrictions on the oil company’s rights in this respect.

Drilling contracts are typically agreed for either a number of wells or for a fixed period. Consequently, the employment of the rig is at the risk of the oil company, and the contractor earns its compensation based on time and on the actual performance of the rig. Both Norwegian and English law will therefore require clear contractual provisions to allow the oil company to suspend the drilling contract.

Any ambiguity in this respect should be interpreted against the interests of the oil company.

“Since the fall in the oil price, there have been several examples of oil companies in the North Sea suspending [drilling] operations”

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GEOGRAPHICAL FOCUS NORWAY

Contractual provisions stating that the suspension must be “temporary” can be interpreted as precluding the oil company’s right to invoke the clause where, in reality, this would amount to a cancellation of the remaining part of the drilling contract. However, this raises the question of when a suspension is deemed to be a cancellation, and this often needs to be considered in relation to the total duration and remaining term of the relevant contract.

Where the period of suspension is undefined and is for the oil company’s convenience, the situation is more correctly described as a “negative change order” or as a partial cancellation.

Drilling contracts normally include provision for such situations, which gives the drilling contractor protection by entitling it to full cost compensation.

It is therefore questionable whether an oil company may in fact “lay-up” the drilling unit for whatever reason by invoking suspension when the contract contains specific provisions for negative change orders or partial cancellation.

Not all cost-saving measures have a negative effect on the profitability of oil companies and the oil service industry operating in the North Sea. Taxation

can play a key role in protecting or promoting investments.

The UK government recently announced certain revisions to the tax regime applicable to operations on the UKCS which are designed to encourage investment and improve the commercial viability of less profitable fields. These changes are together worth an anticipated £1.3 billion and include the following measures: For investment expenditure for projects in both new and existing fields after 1 April 2015, oil companies will be entitled to deduct from their adjusted ring-fence profits an amount equal to 62.5% of investment expenditure incurred in respect of a field, when calculating their liability under the supplementary charge regime. It should, however, be noted that the types of investment expenditure falling within the regime are yet to be clarified.

Furthermore, the government announced a reduction in the supplementary charge on North Sea oil revenues from 30% to 20% with effect from 1 January 2015. When added to the ring fence corporation tax (RFCT) on UKCS production of 30%, the headline tax rate on revenues from oil and gas

fields not liable for petroleum revenue tax (PRT) has thus fallen from 60% to 50%.

The PRT, which is chargeable in respect of revenues from fields for which consent for development was obtained before 16 March 1993, has also been reduced from 50% to 35%, bringing the maximum marginal rate down from 81% to 67.5%. This measure is designated to target mature oil fields, which typically have high operating costs, and the aim is to ensure that such fields remain commercially viable.

The falling oil price and the cuts in E&P expenditure will be felt in the North Sea, as in other areas of drilling activity. This is likely to increase the speed at which efficiencies are introduced.

Cost-saving measures will continue to be implemented by oil majors both in terms of the construction of units at shipyards and the introduction of greater flexibility in operating contracts through improved rights for suspension of work and early termination.

The efficiency of each dollar spent will continue to be a primary driver in many of the investment decisions made concerning further exploration and production activities in the North Sea.

Summer 2015 – 49

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MARITIME SECURITY

MIGRANT ACTION With so many lives being lost as migrants try to flee war zones, it is clear that more action needs to be taken to stop deaths

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he merchant shipping industry, which in the past 16 months participated in almost 1,000 migrant rescue operations in the Mediterranean, has welcomed the decision

by EU leaders to triple the resources of border control mission Operation Triton.

“The shipping sector similarly supports the commitment of EU member states to deploy additional operational means, including vessels and planes, to achieve this objective at relatively short notice. But the fact that operation Triton remains within the mandate of Frontex, the EU border agency, raises serious questions about the extent to which these efforts will fully ensure the immediate prevention of further loss of life, which should be the absolute priority,” trade associations said in a joint statement.

In Brussels, Patrick Verhoeven, secretary-general of the European Community Shipowners’ Associations (ECSA) said: “EU leaders have agreed to increase resources and assets available for search and rescue operations, within the mandate of Frontex. Laudable as these efforts are, they still fall short of the scale and mandate of last year’s Italian Operation Mare Nostrum, which saved hundreds of thousands of people in 2014. What is needed immediately is a similar, EU-led, largescale search and rescue mission, able to operate far from the EU territorial waters, which is where most of the accidents involving migrants take place.”

Commenting on the operational capabilities of Triton, Peter Hinchliffe, secretary-general of the London-based International Chamber of Shipping (ICS) said: “We understand that the resources of Triton can be deployed in international waters when called upon by national Maritime Rescue Coordination Centres, but it remains highly doubtful whether they can rapidly reach areas near

the Libyan coast, where most incidents tend to occur. It seems that merchant ships, which are not best equipped to rescue hundreds of people at a time, will continue to be called upon frequently to respond to requests for assistance. A clear mandate for humanitarian rescue operations by EU states still appears to be outstanding.”

The secretary-general of the International Maritime Organization (IMO), Koji Sekimizu, has called for coordinated action to safeguard migrants, following the most recent incident involving large-scale loss of life in the Mediterranean.

While recognising the significant contribution of the coastguards and naval forces of Italy and Malta, Operation Triton and the merchant shipping industry in rescuing thousands of migrants, Sekimizu said: “The deaths of hundreds of migrants drowned in the Mediterranean within sight of a potential rescue ship once again highlight the need for urgent action to be taken against those unscrupulous criminals whose greed and lack of respect for human life allow them to cram hundreds of innocent, desperate people into unsuitable craft with no concern for their safety. At the same time, I call upon governments and the wider international community to expedite their efforts to take coordinated action to safeguard migrants and to manage the flow of migrants across borders in ways that do not lead to them being exploited and taken to sea in unsafe craft.”

He added: “The international maritime search and rescue system created through IMO instruments was not designed to handle the huge flows of migrants that are currently being seen in the Mediterranean. In being compelled to embark these unsafe vessels, migrants are effectively being put into extreme danger as soon as they leave shore. The fact that migrants are drowning within sight of their would-be rescuers is

“What is needed immediately is an EU-led, large-scale search and rescue mission, able to operate far from the EU territorial waters”

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testament to the dangers they face, and every effort should be taken to find safer, managed routes for migrants.”

CYBER SECURITY The Round Table of International Shipping Organisations (RT), which comprises the Baltic and International Maritime Council (BIMCO), ICS, the International Association of Dry Cargo Shipowners and the International Association of Independent Tanker Owners, is developing standards and guidelines to address the major cyber-security issues faced by the shipping industry.

Protection against malicious attacks on computer-based systems onboard ships is now hitting the top of the agenda for shipping organisations in all corners of the world. The International Maritime Organization (IMO) has already heard calls for action, and the insurance industry repeatedly lists the issue as one for concern. The Round Table has made a submission to the IMO on this vital issue, outlining the steps taken by the industry to address any vulnerabilities.

The vulnerabilities can be numerous and the threats imminent – the question of protection is a complex set of issues and not just about operating a firewall on a ship or installing virus scanning software on the onboard computers.

All of the major systems on a modern ship are controlled and monitored by software; these include the main engine, steering and navigation systems, and the ballast water and cargo handling equipment.

To address this problem and help the industry to protect itself against these risks, the Round Table is already working with industry partners on a number of complementary projects to develop standards and guidelines to address cyber-security issues. This guidance to shipowners and operators includes how to: • minimise the risk of a cyber-attack through user access management • protect onboard systems • develop contingency plans and also • manage incidents if they do occur.

The Round Table (through Bimco) and the Comité International RadioMaritime (CIRM) are also in the 52 – Summer 2015

final phase of developing a standard for the maintenance and update of programmable electronic systems.

These programmes are all interrelated and address how industry stakeholders should develop, manage, update and secure computer-based systems onboard ships. Coordination between these programmes is therefore essential and recognised by the participating organisations.

Angus Frew, secretary-general of BIMCO, said: “The Round Table representing the global shipping industry is taking cyber security seriously.

“The standards under development are intended to enable equipment manufacturers, service personnel, yards, owners and operators, as well as crew, to ensure their shipboard computer-based systems are managed securely – and kept up to date to protect against the ever-growing threat from exploitation by criminals.”

TOTAL LUBMARINE SAFETY INITIATIVES The World Day for Safety and Health at Work, run by the International Labour Organization (ILO), took place on 28 April, and global marine lubricants supplier Total Lubmarine participated by running several safety awareness initiatives. One of these was the production of a video for its global workforce, explaining and demonstrating the steps needed to ensure safe delivery of marine lubes. Issues covered include constant monitoring of weather and sea conditions, mooring, lighting and compliance with terminal regulations.

The theme of this year’s safety day was the building of a culture of prevention, based on occupational safety and health.

Dominique Bigault, global supply chain director at Total Lubmarine, commented: “Whether the workplace is at sea or on land, educating staff and customers is always the best way to ensure safety. Managing marine lubricants is becoming ever-more complex, so it is important to have a day focusing on a pure and simple aim – the continuous drive towards safety. For Total Lubmarine, the relentless improvement of health and safety standards is not just an obligation to fulfil, but a crucial aspect

of our staff care and customer service.”

Total Lubmarine has rigorous internal procedures that integrate health, safety, environmental and quality (HSEQ) considerations with all its research, production, delivery and end-of -product-life processes. Risks have been carefully analysed and mitigated against throughout Total Lubmarine’s supply chain and crisis scenarios mapped out and prepared for, the company says.

An important aspect of ensuring health and safety is the vetting of vessels receiving marine lubricants. All vessels, regardless of their size, carrying lubricants in their tanks are inspected by a Total Lubmarine vetting team.

Responsibilities of the supplier – Total Lubmarine, distributors and receivers are clearly mapped out and the operational implementation of these responsibilities ensured by customised checklists that must be completed prior to product transfer at any stage.

To ensure that all these processes, procedures and guidelines are well enforced, Lubmarine regularly audits the subcontractors in charge of manufacturing, transporting, storing and delivering its lubricants all over the world.

HIJACKS IN SOUTH-EAST ASIA A small coastal tanker is hijacked by pirates in South-East Asia every two weeks on average, a report from the International Maritime Bureau (IMB) revealed in April.

South-East Asia accounts for 55% of the world’s 54 piracy and armed robbery incidents since the start of 2015.

After a steady drop in global piracy over the past few years, attacks rose 10% in the first quarter of 2015 compared with the same period in 2014.

Worldwide, pirates took 140 hostages in the first three months of 2015, three times as many as during the same period in 2014. A total of 13 seafarers were assaulted and three injured.

In West Africa, a hotspot for violent piracy, one man was killed in the hijacking of a fishing vessel off Ghana.

Five crew members were kidnapped

by Nigerian pirates in two separate incidents, in addition to a small product tanker being reported hijacked.

MARITIME SECURITY

IMB has recorded 23 ship hijackings in South-East Asia since April 2014, with six taking place in the past three months. Most are carried out by armed gangs targeting small coastal tankers to steal their cargoes of fuel. Five tankers and an offshore tug have been hijacked in the first quarter.

“The frequency of these hijackings in South-East Asia is an increasing cause for concern. There’s a risk that the attacks and violence could increase if left unabated,” said Pottengal Mukundan, director of IMB, which has been monitoring world piracy since 1991.

Malaysian authorities have detained one gang of hijackers now awaiting trial.

IMB has commended this action and calls for a stronger, coordinated regional response to clamp down on piracy in South-East Asian waters.

The country with the highest number of attacks is Indonesia, accounting for almost 40% of 2015 attacks, with two vessels hijacked and 19 vessels boarded.

IMB reports that the overwhelming majority of incidents are low-level, opportunistic thefts, although the attackers here are usually armed with knives, machetes or guns.

With eight reports in the past three months alone, Vietnam has seen an increase in armed robbery incidents.

More and more thieves are breaking into ships at anchor in and around Haiphong and Vung Tàu.

MERIDIAN CERTIFICATION Meridian Global Consulting has been awarded accredited certification under the International Organization for Standardization’s (ISO) “gold standard” for maritime security firms. It is the first company in the US to earn this certification.

Having undergone a rigorous audit spanning three months and two continents by MSS Global, a certification body internationally accredited through the United Kingdom Accreditation Service (UKAS), Meridian has achieved accredited certification to ISO9001:2008 (quality management), ISO28000:2007 (supply chain security management) and ISO/PAS28007:2012 (private armed maritime security).

“We are honoured to be the first USbased private maritime security company to hold this prestigious rating,” Meridian

president and chief executive Jonathan McConnell said, adding “this accredited certification validates what we already knew . . . that ours is a quality operation with quality personnel.”

Tony Chattin, managing director of MSS Global, stated: “We are honoured to have been invited by Meridian to assess them and help them set the US maritime security sector defining benchmark by demonstrating conformance to this internationally credible set of standards.

“As a company based around veterans ourselves, we are adamant that the quality of security services enshrined in the military translates credibly in to the commercial arena; Meridian has demonstrated that credible translation.”

The triple certification / accreditation includes: ISO9001:2008, ISO28000: 2007 and ISO28007:2012, which was developed as a maritime industry initiative to provide guidelines for companies deploying privately contracted armed security personnel teams onboard ships.

“IMO, the global governing body for the commercial maritime industry and an arm of the United Nations, tasked the ISO with setting this standard for security firms, and Meridian is now one of an elite few worldwide to hold this accredited certification,” McConnell continued.

The ISO certifications come atop Meridian’s Stage 1 Certification from the London-based Security Association for the Maritime Industry (SAMI), which also conducted a painstaking audit of the company’s operations, reputation and stability.

SAMI is the designated international association that represents the private maritime security industry and was formed by the industry to promote excellence and quality in security operations.

Peter Cook, chief executive of SAMI, said “We are delighted that our member, Meridian, has achieved this defining standard, which sets them apart from other private maritime security companies as a provider of a high-quality service.

The ISO/PAS28007 standard requires private maritime security companies to undergo careful scrutiny at their headquarters office, and their operational teams are carefully audited while conducting operations in the Indian Ocean, which makes it the most comprehensive test for maritime security providers.”

Additionally, Meridian was vetted before being granted executive membership of the US-based Maritime Security Council.

Meridian has been in operation for six years and has protected hundreds of voyages transiting the high-risk area for piracy that spans the Indian Ocean, the Red Sea and the Gulf of Aden off the Horn of Africa and the coast of Somalia.

“We are proud of our excellent reputation and see this certification as a report card on the quality of our operation,” added McConnell, who is an attorney and decorated veteran US Marine Corps combat officer.

Most of the company’s privately contracted armed security personnel team members are also Marine Corps veterans with force protection experience who served under McConnell in Iraq.

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INTERVIEW

THE TRANSFER TEAM WS takes a closer look at Dubai-based logistics provider Sinbad Navigation

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etting maritime security personnel to the ships that they are to guard is the job of Dubaibased logistics provider Sinbad Navigation, whose general manager Steve Bayliss heads the operation.

Sinbad Navigation currently operates a fleet of four ships, and closed the deal on the fourth ship, OW267, in January this year. The other ships in the fleet are Antarctic Dream, Yasmeen and Sinbad, which is the platform in the Red Sea, where the security personnel stay, the equipment is stored and the transfers are done. Antarctic Dream acts as the platform in the Gulf of Oman. The other two vessels do runs ashore and provide logistical support to the platforms.

The purchase of OW267 means that the company is able to take passengers off and pick up provisions and she has been working since January, which, says Bayliss, “from our side was a very good planning point because, whilst the model is the same when operating in the Red Sea, the environment is very different”. OW267 also gives Sinbad Navigation the ability to conduct transfers on the shipping lane in all conditions.

“This is something that we are very proud of and a capability that no other platform provider in the region has,” he adds.

“While there are rough seas in the Gulf of Oman, it is in the most part fairly forgiving in terms of sea state, whereas in the Red Sea conditions are more difficult.” Although Sinbad Navigation does transfer personnel by high-end, bespoke rigid-hulled inflatable boats (RIBs) to client vessels, it can use the new ship for this purpose in difficult conditions because she is an all-weather vessel, Bayliss explains.

Sinbad Navigation owns all its vessels outright, which puts them in a strong position financially, because it means there is no potential for disputes between owners and operators as the

company fulfils both roles. Aside from limiting the risks, the general ethos of the business is to have full autonomy over its supply chain. “This is something that we are very proud of and a key differentiator between Sinbad Navigation and the other providers,” says Bayliss.

Sinbad Navigation has already installed top-of-the-range internet domes on the platforms – the dishes alone cost in excess of $50,000 each – with an internet connection between four and six megabits per second. “It is as good as any marine system out there, so the guys, when they are on the ship, have full connectivity.”

It is a huge expense to have the equipment fitted, and monthly bills are substantial, but the benefits speak for themselves, Bayliss says. Some security personnel and crews can be at sea for long periods of time, so “it is a massive plus point to be able to email your girlfriend; it is a definite welfare thing” he adds.

Security personnel wants and needs revolve around good food, good clean accommodation, a strong internet connection, he says. “While these may be basic things, they have a very large impact on what we do. It is something that Sinbad Navigation focuses on as a priority. Welfare for our clients is top of the agenda.”

Bayliss stresses that Sinbad Navigation takes a long-term view, and the investment it has made – millions of dollars – reflects this. “We are aiming to be the best. We are open and we are pro-legislation. It is still a taboo subject and we are doing it by the book. Although the book is not 100% clear, we are doing our best to make it as good as it can be.”

Bayliss also explains that while Sinbad Navigation is approved as a third-party logistics provider on its clients’ Open General Trade Control Licences (OGTCLs), it is currently undertaking the process to obtain its own OGTCL

“OW267 gives Sinbad Navigation the ability to conduct transfers on the shipping lane in all conditions – something we are very proud of”

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through the Department for Business Innovation & Skills (BIS) in the UK During the past year, the Red Sea has been a particular area of interest for the company, particularly Port Sudan, where it operates regularly. Bayliss says he visits the country regularly and “really loves it”. There is a very “can do” attitude across the country, he believes and a lot of infrastructure investment is going ahead in places like Khartoum and Port Sudan.

“Our Port Sudan business is maturing well, growing month on month.

Obviously, it takes a bit of time to set up and iron out the kinks. Some things are available and some things are not, and, as with all areas around the world, there are different formalities but once you understand the local formalities it is good. We are fortunate that we have a very good partner in the country,” says Bayliss.

Maritime Security Services Company (MSS), Sinbad Navigation’s local Sudan agent, has been of great assistance in helping it to set up operations, find the right people, negotiate local hurdles and make sure that ship provisions are of good quality.

Sinbad Navigation conducts crew changes in Port Sudan on a regular basis and MSS helps with visas, customs clearances and formalities as well as making sure the personnel are in good hotels. Bayliss describes it as “a very good relationship”.

While the company was setting up its Red Sea operation, it was keen to replicate the dedicated transfer vessel system from its Gulf of Oman business.

Other operators in the region don’t have this advantage, Bayliss points out.

If the client ship is at an alternative rendezvous or wants to remain on the shipping lane, he says, Sinbad can go to them, minimising delay, deviation and disruption to client vessels. OW267 also acts as a shuttle up to twice a week from the Sinbad platform to Port Sudan, allowing clients to change over their security personnel.

The shuttle service is timed to coincide with direct flights between Port Sudan to Dubai, and transfers to and from the airport at Port Sudan are organised by MSS.

Sinbad Navigation has a licence to operate its business in the region, however it has also been issued with a separate licence for the exclusive use of one of the islands off the east coast of Sudan as a recreation area. Although security equipment or controlled goods must be maintained on the platform, Sinbad Navigation can put passengers and crew onto the island for a bit of downtime. The island is about a mile by half a mile, so there is room for the crews to get time to themselves and relax. “It has gone down a storm with our clients.

They really enjoy that kind of welfare for those guys who are at sea for a long time,” Bayliss comments.

Crew members can go to the island and have a barbecue, play volleyball or go fishing. A Wi-Fi mast may also be built there, so they can communicate with families and friends. Sinbad Navigation is the only company to have this kind of licence. “There are no movements of controlled goods in the area, it is literally a recreation area for the guys. We see it as a unique selling point for our clients. It is something other people don’t offer and so far the reception has been very good,” Bayliss says.

The company runs fishing and diving competitions on both its platforms to see who, for example, can catch the biggest fish. “The island is an extension of that,” he says. “As time goes on, we have permission to develop, within reason,

the facilities on the island, perhaps including traditional Sudanese huts for the personnel.”

Bayliss says he had a tour of the shipyard in Port Sudan recently and saw equipment from a hundred years ago still in use and in perfect working order. “It’s a fascinating experience to see.”

As he puts it, Port Sudan is “open for business”, and the company has seen a lot of support from its clients, meaning business is good there.

In terms of the nationalities of security personnel, Bayliss says there has been a shift in the last year from predominantly European personnel to 60/40 nonEuropeans. “That is a definite reflection of cost-cutting by clients – they are trying to make the model as lean as possible because the competition is fierce,” he says.

Most of the Europeans still onboard are team leaders, he adds “so there is still that command and control element from the security side of things”. While there aren’t as many British companies as there used to be, for the companies that are out there the “swing is still definitely towards Europe”.

Antarctic Dream is still working in the Gulf of Oman and is doing well, Bayliss says. She is a former cruiseship and clients are happy as she provides space, good food and an excellent internet facility. Yasmeen runs the shuttle to ports in the United Arab Emirates.

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ALTERNATIVE OPTION There have been a number of innovations in the use of alternative fuels recently as operators seek to cut costs and deal with the new emissions legislation

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he market-leading Wärtsilä 50DF marine engine has been successfully tested and certified to run on ethane (LEG) fuel. The extensive and successful testing programme was carried out by Wärtsilä in close collaboration with Evergas, a world renowned owner and operator of seaborne petrochemical and liquid gas transport vessels.

“We are very pleased that the Wärtsilä engines will be capable of utilising ethane boil-off gas as fuel. It increases our operational efficiency and improves flexibility in the bunkering of fuels. All in all, it results in a significant reduction in operating costs, while also providing a minimal environmental footprint. It also enables us to offer our customers increased flexibility, which has a monetary value to them,” says Steffen Jacobsen, chief executive of Evergas.

The capability to efficiently burn ethane boil-off gas as engine fuel significantly reduces the need for gas reliquefaction during the voyage. This means that less power is needed for the cargohandling, thus providing a more efficient and environmentally sound overall system.

This technological breakthrough enables Wärtsilä’s customers to meet the International Maritime Organization’s (IMO) Tier III regulations without need of secondary emissions cleaning while using either LNG or LEG as fuel. The engines have the capability to switch seamlessly between liquefied natural gas (LNG), ethane (LEG), light fuel oil (LFO) or heavy fuel oil (HFO) without the need for any modifications to hardware and with uninterrupted operation, thereby setting a new standard in fuel flexibility.

“This is yet another significant breakthrough for Wärtsilä’s multifuel technology. The option to utilise ethane gas as a marine fuel further extends the fuel flexibility of our DF engine portfolio. It also

provides yet another option to achieve compliance with the IMO’s stringent Tier III legislation,” says Lars Anderson, vicepresident, engine sales, Wärtsilä Ship Power.

BOMIN LAUNCH IN COPENHAGEN The Bomin Group, a leading global physical supplier and trader of marine fuel oil, has announced that it is launching a physical operation in Copenhagen, Denmark. The expansion is in line with the company’s ambitious plans for growth throughout 2015.

The Copenhagen operations complement Bomin’s existing physical network in the Baltic Sea region, including Tallinn, Stockholm and Rostock. “Securing supply in key markets for our customers is an important part of the growth strategy for the Baltic region,” says Anatoli Belov, managing director, Bomin Baltic.

“Our physical offering enables us to take more control of the bunkering process, ensuring that customers are provided with quality products and at the right quantity, as well as looking at all opportunities to maximise their operational efficiencies.

We plan to phase our physical expansion within Copenhagen, beginning with providing products ex-pipe and by truck.”

Available immediately is the provision of marine gas oil delivered ex-pipe. All deliveries are supplied using a mass flow meter to ensure customers are provided with the exact quantity of gas oil that they order. Bomin will not charge customers port fees. The company can also provide smaller product quantities by truck, which can be delivered to customers directly at berth in Copenhagen, increasing efficiencies and minimising downtime, as well as into smaller ports in the Copenhagen area and South-West Sweden.

Jan Christensen, Bomin’s regional manager, North-West

“Utilising ethane boil-off gas as fuel results in a significant reduction in costs, while providing a minimal environmental footprint”

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Europe, concludes: “The development in Copenhagen is the first of several planned expansions within our network.

Despite the continued challenges within the shipping industry, Bomin is well placed, financially robust and with the strong backing of its parent company to drive growth and increase market share.”

SHELL LUBES Since the implementation of emission control areas (ECAs) on 1 January 2015, ships entering waters in the Baltic Sea; the North Sea; the North American ECA, including most of the US and Canadian coast, as well as the French overseas territories of Saint Pierre and Miquelon; and the US Caribbean ECA, including Puerto Rico and the US Virgin Islands, had to use fuels with up to 0.1% sulphur content.

Shell Marine Products (SMP) introduced a complete line of ECAapproved marine lubricants in September 2014. This portfolio includes Shell Alexia S3, formulated for use in two-stroke engines with low sulphur and distillate fuels up to 0.5% sulphur.

SMP also offers Shell Gadinia for medium-speed four-stroke engines, like the one in Harvey Energy, Shell’s new chartered offshore supply vessel (OSV) in the Gulf of Mexico.

Shell Mysella for gas-powered engines is used on Shell’s chartered barge Greenstream, the world’s first 100% LNG-powered barge, which carries goods through Europe along the Rhine.

“We have been pleasantly surprised by the demand that our ECA-approved lubricants have gotten. We have been quick to expand availability of our product

range throughout our port network.

Today, Shell Alexia S3 is available in over 330 ports in 20 countries, while Shell Gadinia and Shell Mysella are available throughout our global port network,” says Jan Toschka, general manager of Shell Marine Products.

The combination of newer highperformance engines, practices like slow steaming and now ECA zone implementation have presented increased complexity for ship operators, who tend to switch fuels and engine oils as they go in and out of ECA zones.

“We see an increased need for technical services, be that in offering used oil analysis programmes, helping to interpret and implement original equipment manufacturer requirements, cylinder oil condition monitoring or in assisting ship operators in crew development. Shell is well placed to provide this support, as we have dedicated technical experts around the world who can help solve customers’ lubrication issues and also improve equipment performance,” adds Toschka.

ABB SUPPORTS AIDA ABB Group, a leader in power and automation technologies, will deliver its energy monitoring and management system EMMA to German cruise operator AIDA’s entire fleet, consisting of 10 vessels. The EMMA advisory suite, already installed on six of AIDA’s cruiseships, is a decision-support tool to minimise overall energy costs for individual vessels and entire fleets.

AIDA’s installation of EMMA, which is compliant with the Ship Energy Efficiency Management Plan (SEEMP), will cover seven top-level categories: propulsion power, propulsion efficiency, vessel trim, hotel and auxiliary power, air conditioning power per person, specific fuel oil consumption of the main diesel generators and total fuel consumption.

By reducing fuel consumption, ABB will also help AIDA to reduce the vessel’s environmental emissions.

All data generated onboard is transferred to a cloud-based application for vessel benchmarking. This can provide management onshore with full visibility of energy consumption across the entire fleet. SEEMP is an operational measure that establishes a mechanism to improve 58 – Summer 2015

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the energy efficiency of a ship in a costeffective manner. It has been mandatory on all vessels since 2013. The installation of EMMA will support AIDA in the important SEEMP process. In addition to this, the extensive ABB analytical services, including simulations, will help AIDA in future business case analysis.

“AIDA is recognised as one of the most environmentally friendly cruise operators, and the company sets high demands for the solutions it deploys onboard the vessels. We are pleased that AIDA selected ABB’s EMMA energy monitoring and management system to further improve the environmental footprint of its fleet,” says Heikki Soljama, managing director for ABB’s marine and ports business.

“At AIDA, we’ve realised that in order to achieve maximum efficiency, we must approach energy management onboard clinically and scientifically.

This is why we installed ABB’s EMMA. The biggest benefit of having such an advanced energy management system onboard is that mathematically analysed key performance indicators are at your fingertips – not only raw data,” says Jens Lassen, senior vice-president, marine operations, at AIDA Cruises.

LASHING FORCES The latest generation of containerships have been designed not only to increase capacity but also to improve energy efficiency and environmental performance, writes Olivier van der Kruijs, risk and quality manager at BMT Surveys. The rise in fuel prices in combination with a continuing pressure on freight rates has forced shipowners and operators to look closely at the amount of fuel being used. This has resulted in economical steaming and other fuel efficiency measures. Fuel efficiency monitoring can be achieved in a number of ways; for example, by using computer and communication software, which monitors and analyses the ship’s performance and operational parameters in real time. The results of these analyses may then suggest, for example to change speed, trim and draught. The optimal trim, varies with speed, displacement, weather and underwater hull shape and can be a significant factor in saving

fuel. One study suggested that fuel consumption could be reduced by as much as 5% using this technology.

However, as an unwanted side effect, this fuel saving method may increase the calculated dynamic forces to containers and lashings, possibly exceeding maximum permissible levels.

As part of its extensive range of services to the shipping industry, BMT also carries out regular inspections of containerships.

A point of attention during these surveys is the requirement to review the lashing computer data and establish if there is a situation onboard whereby container lashing forces are exceeded.

As regards maximum permissible forces, there are limitations resulting from the strength of the container itself.

Those limitations are stipulated in ISO standards (ISO1496). It is important to appreciate that there is no safety margin on these limits. Theoretically, a container may thus distort as soon as these force limits are exceeded. This is different for the safe working loads on the lashings, which do have a safety margin.

Usually, for the preparation of a stowage plan, stability and lashing forces are calculated. These calculations take into account the usual changes to stability as a consequence of expected fuel consumption or changes to the ballast water quantity while sailing. It has become apparent that during the voyage, the ship is sometimes instructed by the owners (or the charterers) to make adjustments to improve fuel efficiency.

These (unplanned) adjustments of draught and trim have on various occasions increased the metacentric height (GM) and, as a result, also the dynamic forces acting on the containers and lashings. This could lead to a situation whereby the ship left port with the calculated lashing forces being within design limits, but exceeding the limits at a later stage when the trim adjustments were made.

For vessels enjoying a voyage with good weather, exceeding the designated maximum lashing forces is unlikely to result in any damaged cargo. However, if the ship was to encounter its “design motions criteria”, damage to the container stacks and cargo could occur as an indirect result of saving fuel.

COPEC DEVELOPMENTS Chile-based Copec started as a petroleum company in 1934 and initiated its bunker service in 1970.

At first, deliveries were made by truck; however, in 2000, Copec incorporated bunker supplies by barge, and now has a 70% share of the market.

Copec has made a large investment by increasing its fleet with two new doublehull, double-bottom bunker barges: Don Gonzalo and Don Pancho.

The fleet now boasts three bunker barges: Doña Ana (3,500 MT), Don Gonzalo (4,500 MT) and Don Pancho (4,500 MT), which cover the entire Chilean coast, incorporating the north, central and southern geographical zones.

The company is currently certified in accordance with ISO9001, ISO14001:2004 and ISO18001:2007.

It has 16 fuel plants along the coast of Chile and a cooperation agreement with ExxonMobil for lubes.

DAN-BUNKERING CHILE OFFICE Dan-Bunkering established an office in Valparaiso in Chile this year under general manager Pedro Gomez.

In addition to the office on the west coast of South America, Dan-Bunkering also launched a physical supply operation in Montevideo, Uruguay, in early January 2015, ensuring the company’s presence on the east coast.

“These two new offices will increase our strength and competitiveness in the region and we look forward to improving our market shares in the South American region” states Dan-Bunkering (America) managing director Hans Lind Dollerup.

Group chief executive Henrik Zederkof expressed his satisfaction that DanBunkering has been possible to expand at such a rate in the Americas.

“It has for many years been a part of our strategy to be present in three major time zones,” he says. Although the company has managed this for a number of years now, its presence had been very limited in the Americas. “So when the opportunity arose to carry out such extensive expansion in that particular region, we took it,” he said.

The Chilean team at DanBunkering comprises eight traders and administrative staff.

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DOWNTURN IN THE OFFSHORE MARKET TO HIT YARDS IN THE FAR EAST Clare Calnan and Rob Jardine-Brown, partners at Wikborg Rein’s law offices in London, look at the future for offshore construction projects

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HE FALL IN oil price over the past year, together with continuing cuts in the exploration and production (E&P) budgets of oil majors and national oil companies, has had – and will continue to have – a significant impact on current and future offshore construction projects.

The majority of offshore unit construction is undertaken at shipyards in the Far East and, in particular, in China, Korea and Singapore, and it is here that the impact of the current downturn in the market will be greatest.

For many years, offshore contracts were largely profitable, with the delivered units entering a market where employment contracts were plentiful and could command healthy day rates. This in turn led to more shipyards entering the offshore construction market and more buyers ordering units that were not linked to specific employment contracts.

In the jack-up rig market, the average number of units delivered between 2006 and 2013 was 19 per year. In 2015, however, Clarksons estimates that 67 jack-ups will be delivered, of which two-thirds are being built by Chinese shipyards.

In this environment, competitive pricing became the market standard, with favourable payment terms (such as 10% of the contract price payable as a first instalment and the remaining 90% payable on delivery of the unit) being offered by shipyards or demanded by buyers.

Likewise, many contracts were placed through special purpose vehicles (SPVs) in circumstances where the yards had either limited or no rights of recourse in the event of a buyer default.

While this fuels growth in the market, it also potentially poses considerable risks to the shipyard should economic events conspire to place substantial pressure on the buyer’s ability to secure take-out financing and to take delivery of the offshore unit.

With day rates for all offshore units falling over the past few

months, and with softening of the employment market expected to continue for some time to come, it is not surprising, given the oversupply of all such units, that construction projects are coming under increasing pressure.

This pressure is at its greatest when the buyer is approaching delivery time and the initial employment contract is proving difficult to secure. In these circumstances, both the shipyard and the buyers are likely to consider their options.

If the buyer does not want to take delivery of the offshore unit, the obvious option is to look to cancel the contract. However, cancellation is not always straightforward, particularly where the reason for delay is disputed or where there is a question as to whether the defects in construction are sufficient to justify a rejection of the unit.

Should the buyers get it wrong, they may open themselves up to a claim not just for the first instalment (which even at 10% of the contract price is likely to be substantial) but also for damages for breach of contract.

This may be considered a minimal commercial risk where the buyer is a SPV with limited assets, and the shipyard has no additional security. However, the offshore market is much smaller than the marine market and a buyer intentionally following this course may be reluctant to do so where there is a reputational or commercial risk associated with abandonment of the construction contract.

Should the buyer fail to take delivery of the unit, the shipyard will be left with a highly specialised asset of diminishing value and a limited ability to claim damages for the losses it has suffered. The shipyard will be anxious to manage the project in such a way as to avoid finding itself in a situation where cancellation of the construction contract is possible.

Relying on legal rights and seeking an award of damages is an expensive and lengthy route to follow, even assuming that the shipyard is ultimately able to successfully pursue a claim and

“While compromises are required, shipyards and offshore purchasers are adept at finding creative solutions to keep contracts in place”

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find assets against which to enforce any award.

Piercing the corporate veil to enable enforcement against investors and shareholders is far from straightforward.

Even where this can be done, physical assets have to be located, against which enforcement can be made.

In view of these difficulties, although “default” situations may arise, the more common solution adopted in the offshore construction market is for both parties to renegotiate the commercial terms of the contract to find a mutually beneficial outcome. While compromises are required, shipyards and offshore purchasers are adept at finding creative solutions to keep contracts in place so that they can both ride out any economic downturn that threatens the contract.

It is too early to say whether this will be the pattern that will be followed in the current downturn, and much will depend on how long the stall in drilling activity is predicted to last.

However, and at least for now, most people are confident that drilling activity will increase, although there is a great deal of uncertainty as to when that will happen and where it will start first.

It is clear, though, that the current market conditions are giving rise to more disagreements between shipyards and buyers. In better times, such issues might be more easily resolved, but there is perhaps now a greater reluctance to give up “positions” easily.

Some of these disagreements may end up in arbitration or court proceedings.

In this case, both parties will need to consider carefully what steps they take, and what written correspondence they enter into, in order to avoid prejudicing their contractual position in relation to ongoing construction projects.

There are currently few reported cancellations and, in some cases, shipyards have already agreed terms to defer delivery of certain units.

Some rather creative solutions are being explored, such as the one adopted

by Ocean Rig, which has agreed with a shipyard to convert an order for two drillships into tankers. This suggests that, for now, most participants in the offshore construction market are buying time, and that both shipyards and buyers

see the benefit of working together to find solutions to weather this particular downturn.

This is not to underestimate how tough or costly the negotiations currently taking place are, but at least for the time being we are not seeing a large number of cancellations and buyer defaults similar to those which took place in marine construction in the financial crisis in 2008. Some hope can perhaps be drawn from that.

SMART PORT INITIATIVE IN SINGAPORE The Maritime and Port Authority of Singapore (MPA) unveiled new initiatives harnessing the use of mobile technology and wireless connectivity to enhance communications, productivity and crew welfare in the Port of Singapore in March.

Andrew Tan, Chief Executive, MPA, says: “The maritime sector is undergoing significant transformation with smarter ships, just-in-time logistics and more intelligent ports being built. As a global hub port and leading international maritime centre, Singapore believes that it is well positioned to leverage on the ongoing revolution in information and communications technology, smart devices and the Internet of Things.

“We envision a more interconnected port with high-speed internet, extensive use of data analytics and innovative mobile solutions to enhance our port’s overall competitiveness. This will benefit all users at the Port of Singapore,” he continues.

Patrick Phoon, president of the Singapore Shipping Association (SSA), adds: “Shipping in Singapore is a roundthe-clock business, with an ever-growing demand for timely, accurate information to make informed decisions fast and on-the-go. SSA is pleased to support MPA’s ‘Smart Port’ initiatives, as this collaboration is an important step for our vision for Maritime Singapore – it will revolutionise work processes, increase productivity, and equip us to be future-ready.”

To address current limitations of highspeed broadband coverage in Singapore port waters, MPA is collaborating with M1 Limited to provide the maritime

community with high bandwidth, lowcost, secured and wireless 4G broadband access, with coverage up to 15km from the coastline. The M1 network has been available since the end of March.

MPA and M1 also inked a memorandum of understanding to promote the adoption of 4G broadband coverage for vessels operating within Singapore’s port waters. They will also work together on research and projects for test-bedding of new technologies that will further enhance network coverage in the port waters and benefit the Singapore maritime community.

Through the extension of the Wireless@ SG programme, MPA will provide free, basic Wi-Fi services at the Marina South Pier, Changi Point Ferry Terminal and West Coast Pier for members of the public from 1 July this year. This will further enhance passenger experience and business operations at the terminals.

In another effort to enhance customer experience, MPA launched a new mobile application or app. myMaritime@SG enables the maritime community and members of the public to conveniently access maritime information and services on their mobile phones.

With this app, port users can obtain the latest updates on ship arrivals and departures, port and marine notices and tidal information, as well as planning shipping routes and carrying out transactions at their convenience.

Members of the public can also use the app to provide feedback to MPA. myMaritime@SG is available on both iOS and Android mobile devices. The app is free and can be downloaded from iTunes App Store and Google Play Store. MPA will be making further enhancements to this app to include more applications when ready.

To encourage the development of mobile applications, MPA and SSA are jointly initiating a call for proposals to invite the maritime community and solution providers to develop innovative business-to-business apps in areas such as enhancing maritime logistics operations, ship-to-shore communications and the remote monitoring of marine operations from shore. MPA has set aside S$2 million to co-fund projects approved under this initiative.

Summer 2015 – 61

GREEN SHIPPING

GREEN ATTENTION With the advent of emission control areas from 1 January, there has been much concentration on scrubber systems as a means of meeting the low-sulphur requirements

A

lfa Laval PureSOx scrubber systems allow the continued use of heavy fuel oil (HFO) while meeting the emission limits for operation in emission control areas (ECAs).

Now, with enforcement in ECAs in place, the ability to deliver compliant systems is even higher, with technologies such as that in the Alfa Laval PureSOx H2O water cleaning unit.

The system is a specialised example of an Alfa Laval core technology: the high-speed centrifugal separator. Developed over the course of several years, it removes soot from the circulation water in closed-loop mode. The unit is completely unaffected by pitch and roll, which sets it apart from other cleaning systems on the market. It has a footprint of just 6m2 and a modular construction based on three flexibly placed skids.

A process for cleaning scrubber water with high-speed centri­ fugal separator technology as part of Alfa Laval’s PureSOx exhaust gas cleaning system has now been patented. This technology is of the utmost importance to be able to secure compliance in either hybrid or closed loop mode, especially in Belgium and Germany, where ports don’t allow open loop scrubbers.

The Alfa Laval PureSOx exhaust gas cleaning system is gaining ground in the cruiseship market. Following a lengthy selection and qualification process, four PureSOx scrubbers have been ordered by Royal Caribbean Cruises (RCL). Three of these will be PureSOx 2.0 systems, as presented at the SMM 2014 maritime trade fair, while the fourth will be the first test inline version of PureSOx. Alfa Laval’s deliveries to Royal Caribbean Cruises Ltd (RCL) will extend over the summer of 2015.

The PureSOx systems will be installed as retrofits aboard four Royal Caribbean International ships: three of the Freedom class and one of the Voyager class. Freedom of the Seas, Independence of the Seas

and Liberty of the Seas will each receive a hybrid scrubber with multiple inlets, while Adventure of the Seas will receive an inline hybrid with one main engine connected.

The contract for the Freedom class vessels was signed in Q4 2014. “SOx scrubber systems are part of our commitment to meeting or exceeding important environmental standards, as they allow compliance even where low-sulphur fuels have limited availability,” says Harri Kulovaara, executive vice-president, maritime, at RCL. “We chose Alfa Laval and PureSOx on the basis of strong references, a strong technical platform and a strong willingness to cooperate in implementing the technology on our vessels.”

“RCL is a highly capable partner with a strong interest in seeing marine scrubber technology move forward,” says René Diks, manager, marketing and sales, exhaust gas cleaning, at Alfa Laval.

“Our collaboration on both the standard and inline PureSOx installations has been valuable for both parties.”

RCL, like many in the cruise industry, has an outspoken goal of reducing environmental impact. Scrubber technology fits neatly with this ambition, yet its implementation on cruiseships can be more difficult than on other vessels. The unique cruiseship construction poses challenges in meeting space and stability limitations.

For the RCL vessels, the process of meeting those challenges was a demanding, year-long journey, involving dedicated project teams from both RCL and Alfa Laval. A detailed and initially difficult technology qualification process (TQP) was conducted, in which the two parties, sometimes supported by external integrators, discussed the technical requirements in depth. Uncertainties and concerns were identified, evaluated and carefully addressed.

“There is immense complexity in a retrofit of this size aboard a cruiseship,” says Kevin Douglas,

“Scrubber technology fits neatly with reducing environmental impact, but the unique cruiseship construction poses challenges”

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vice-president, technical projects and newbuild, at RCL. “To ensure the right solution and the smoothest possible implementation, we needed a thorough, open and systematic dialogue. Alfa Laval has worked closely and vigorously with us to merge their system knowledge with our expertise in cruiseship installations.

As a result, we have confidence the strong partnership will deliver results.”

Despite the daunting issues of space and weight on a cruiseship, the standard U-shaped configuration of PureSOx 2.0 could be successfully incorporated into all three of RCL’s Freedom class vessels.

“This is a flexible configuration that reduces installation cost by allowing mul­ tiple engines to be connected,” says Diks.

“Space for the scrubber itself was found behind the existing funnel, in front of the rock-climbing wall. The water cleaning unit and circulation tanks, which are necessary for hybrid operation, will be located high up and on the same deck, which will avoid the need for an additional booster pump.”

Hybrid operation, which offers both closed-loop and open-loop modes, was particularly important for the RCL vessels. Since their routes will take them into US coastal waters, the vessels will be subject to US Vessel General Permit (VGP) legislation, which sets discharge criteria that are even stricter than those of the International Maritime Organization (IMO). “Our cruiseships will naturally use seawater in open-loop mode when­ ever this is feasible,” says Douglas. “However, their area of operations will require a closed-loop mode with reliable water cleaning. This is where Alfa Laval’s separ­ ation expertise comes into play.”

The PureSOx installation aboard Adventure of the Seas will also be a hybrid system. However, the design of this Voyager class vessel posed additional constraints.

Because the space available was even less and the stability issues even greater than aboard the Freedom class vessels, RCL was open to finding an alternative configuration. Adventure of the Seas will thus be the first vessel to install an inline version of PureSOx, which has been under development at the Alfa Laval Test & Training Centre in Aalborg, Denmark.

“Inline scrubber configurations will be attractive or even necessary for many

cruiseships and RoPax vessels, which is why inline development has been a high priority for Alfa Laval,” says Jens Peter Hansen, Alfa Laval R&D manager. “The analysis and trials at our new test centre have focused on ensuring a safe water trap and minimising material stresses in the inline design, because the scrubber is cooled and heated with every start and stop. We were pleased to involve RCL, whose valuable insights and installation expertise have contributed to the final design, and we look forward to following up on this first inline installation.”

“We were very interested in working with Alfa Laval on the inline version of PureSOx, because it addresses the unique challenges of cruiseship building,” Douglas concurs. “We are keen to see scrubber technology develop, especially in this direction.”

With the selection and technical negotiations at an end, Alfa Laval is now well established in exhaust gas cleaning for the cruiseship market. The four-vessel commitment from RCL doubles the number of cruiseship orders in the PureSOx portfolio.

“The cruise industry, with its environmental profile and unique technical considerations, places high demands on a SOx scrubber,” Diks says. “Alfa Laval PureSOx provides a great deal of flexibility in meeting those demands, and will offer even more flexibility when the inline version is officially launched.”

Hyde Marine, meanwhile, has taken over 400 orders for its Hyde GUARDIAN® ballast water treatment system (BWTS). In December, it announced the 400th order, which will be installed on a tug boat for an articulated tug barge being built by

Summer 2015 – 63

CORPORATE VIEWPOINT

HYDE MARINE INC Experience is the best teacher

One thing shipowners and operators know is each ship is different – a unique fingerprint. Even sister vessels built at the same yard to the same design specifications will inevitably develop their own personality and set of challenges. A ship’s personality is an amalgamation of the crews, the shore-side administration, and the customers of the vessel. And, the only real truth is the further the ship gets from delivery, the more unique a ship becomes.

When designing ships’ equipment, particularly those designed for retrofit into a fleet of vessels, the unique nature of each vessel must be considered. When designing equipment to not only address the unique differences of each vessel, but the intrinsic differences between types of vessels, the challenge can seem impossible. Yet that is exactly the expectation shipowners and operators have of ballast water management system (BWMS) designers – that the designer meets the challenges associated with installation quickly, efficiently, on time, and on budget.

Ballast Water Management Systems are the disinfection systems designed to be installed onboard vessels in order to kill, remove or inactivate organisms in the ballast of vessels.

These organisms can be moved from port-to-port through the vessel’s ballast tanks. When deposited into a new waterway, these organisms can thrive and outcompete local, native species because of the lack of natural predators and other limitations on the growth of their native species.

These BWMS must be tested under both International Maritime Organization (IMO) and other local government regulations at dedicated land-based testing facilities in order to prove their performance. In addition to the land-based testing, BWMS must each be tested onboard a ship of the ballast water designer’s choosing to demonstrate the performance of the system in a real-world scenario. This combination of stress testing the units during land-based testing and verifying longterm operability in a shipboard test represents the best possible combination of practical and theoretical testing.

Unfortunately, that’s where the trouble begins.

Once systems are complete, they must then be installed on the rest of the fleet, which is far more complicated than a single vessel that the BWMS manufacturer has nearly complete control over during the installation and operation.

With application to a fleet, a myriad of shipyards, installation companies, design engineers and vessel operators step in and try and adapt the BWMS to the particular needs of their vessels and the particular difficulties of the installation location that impacts normal vessel operations the least.

With more than 50 retrofit installations already completed, Hyde Marine is no stranger to the complications of installing systems in real-world scenarios. “Each ship is an opportunity to work with shipowners and installation partners to meet the 64 – Summer 2015

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

vessel’s ballast water management goals,” says Hyde Marine Sales Director, Chris Todd. “Every owner wants a system that is simple to use, invisible to the operator and takes up the least amount of space. Coupled with the challenges of IMO and USCG discharge standards, this creates a very tight space – literally and figuratively – in which we can operate.”

Key to successfully navigating the retrofit challenges is formulating a three-pronged approach to dealing with the differences between different vessels: 1. BWMS manufacturers must establish key alliances with the engineering and installation partners that will do the installations. By bringing them all together and providing hands-on training to all key personnel, the BWMS manufacturer can insure the particular needs of the system and the requirements of the installation are met in the initial design phase. Fixing problems at this phase can save significant money and costly rework during the installation period.

2. BWMS manufacturers, such as Hyde Marine know they cannot do all of the work on their own. Trying to keep all of the knowledge and responsibility in-house not only restricts a company’s ability to learn from real-world installations, but it also will restrict a company’s ability to grow as the market demand continues to increase. For this reason, BWMS manufacturers must develop clear guidance and should publish lessons learned and other case studies, which show the honest experience of their installations in the field so their partners and customers alike can learn how to avoid known issues. These documents should take the form of drawings and O&M Manuals, as well as installation guides, pre-commissioning and commissioning checklists, and other simple instructions designed to simplify the integration of BWMS on the vessel.

3. BWMS manufacturers should pursue multiple Class and statutory approvals to insure that the process of review is as speedy as possible for the customer. Regulatory agencies are widely considered to be a key bottleneck in the successful implementation of the IMO BWM Convention (2004) once it comes into force. The review of thousands of retrofit installation drawing packages and BWM plans may cause delays and rework in the industry. Companies that can insure their equipment is Type Approved on the classification side can help ease the review burden and insure for vessel Owners that no unplanned problems will arise during the review process relating to the construction or operation of the system.

CORPORATE VIEWPOINT

TAKING THE NEXT STEP

All of these steps are critical to basic implementation of BWMS onboard vessels, but they are really only the first steps of a long journey. “We are fortunate to have had many good customers that use our system,” says John Platz, President of Hyde Marine.

“We have been able to capture learning from nearly 200 vessels in operation and we have been able to make sure our system seamlessly integrates with dozens of different types of vessels.”

This learning is so important for BWMS manufacturers because each different type of vessel brings its own challenge and its own unique character. And the very things that make BWMS hard to certify, make it more challenging to adapt to vessel needs.

Vessels operate using many different types of central power supplies: 380 / 440 / 480 / 690 Volt, 50 / 60 Hz; each vessel uses different types of central automation systems with different communication protocols: MODBUS, Industrial Ethernet, TCP/IP, etc and ships use different types of pumps: centrifugal, screw, positive displacement, educators, gravity feed; each of these different permutations needs to be captured in the sales process and adapted into the product during construction or the vessel will be forced to adapt to the treatment system. Ships also use different operational profiles where multiple pumps are used or pumps for cross-connected systems may sometimes be used for ballasting. Each of these challenges is unique for each individual order.

“Critical to our success,” states Todd, “is our ability to integrate seamlessly with the ship. We can adapt to power, communication and flow needs, handle gravity feed, deckmounted installations and hazardous areas, as well as accommodate high-lift positive displacement pumps and variable speed centrifugal pumps hooked up to educators. We can do all this because we already have done it.”

PROVEN TECHNOLOGIES EASE INSTALLATION, COMMISSIONING

One such recent example for Hyde Marine, Inc., which in late 2014, announced it recorded its 400th order for its Hyde GUARDIAN® Ballast Water Treatment System (BWTS), came in the form of a request from a specialized market segment in the United States.

With US Coast Guard regulations in place, builders of Articulated Tug-Barge units (ATBs) came to Hyde Marine to find a solution to BWMS that would work with their unique vessels. Not only would the systems require hazardous area certification because of the petroleum cargo carried on the barges, but the units would need to be capable of operating year round in a challenging marine environment where the barge is transported from port-to-port in a dead-ship condition. These types of vessels also have a very small crew and need a highly automated system.

In order to meet the requirements of this segment of the market, Hyde Marine worked closely with their US distributor, W&O Supply, as well as the shipyard and the naval architects

designing the vessels. Each of the unique vessel’s operating conditions was addressed and a fully automated Hyde GUARDIAN Gold® Ballast Water Treatment System was delivered to each vessel in time for it to be installed prior to delivery. The systems were subsequently commissioned quickly and without interference to the shipyard’s schedule.

Hyde GUARDIAN Gold relies on a proven, two-step method and uses no active substances (e.g., chemicals) to treat ballast water. The automatic-backwash filtration process removes sediment and large organisms from the ballast water before it is treated with high-intensity, medium pressure ultraviolet (UV) light to inactivate or kill remaining organisms.

The Hyde GUARDIAN Gold BWTS is ideal for retrofits as it provides the compact size required by ship owners and operators. It may be sized and configured for any type of vessel with models handling flow capacities in the range of 60 m3/ hr to 6000 m3/hr. With its flexibility in module design and ability to be skid mounted, the system may be installed in new constructions, as well as existing ships where retrofit designs are possible in crowded machinery spaces.

Bringing Class in early is key to navigating the intricacies of different vessels. With a very strict interpretation of both IMO and Class guidelines, even small changes to a BWMS can invalidate the Type Approval. Working with Class and insuring components and functional descriptions are reviewed and approved on both a vessel and a class-series basis can help ease the implementation across a broad class of vessels.

The Hyde GUARDIAN BWTS was Type Approved in 2009

by Lloyd’s Register on behalf of the UK Maritime and Coast Guard Agency (MCA), confirming compliance with IMO Resolution MEPC.174 (58) Guidelines. It was also one of the first to receive Alternative Management System (AMS) Approval from the U.S. Coast Guard on April 15, 2013. It was also the first BWTS accepted into the U.S. Coast Guard’s Shipboard Technology Evaluation Program (STEP). Hyde GUARDIAN Gold® Ballast Water Treatment System received IMO Type Approval in December 2013.

With IMO ratification pending, the time for learning is rapidly drawing to a close. BWMS manufacturers must be reaping the benefits of a large installed base now to insure that the problems inherent to adapting a system to work on various vessels around the world do not permeate into their retrofit base. By the time these systems are up and running, it may be too late to learn the valuable lessons that only experience and real-world situations can give.

Hyde Marine is a wholly owned subsidiary of Calgon Carbon Corporation (NYSE: CCC). And, Calgon Carbon’s UV Technologies Division and Hyde Marine received ISO 9001:2008 accreditation from the registrar Det Norske Veritas (DNV) and the ANAB National Accreditation Board in 2010. www.hydemarine.com

Summer 2015 –65

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VT Halter Marine at the company’s Pascagoula, Mississippi, facility in the US. John Platz, president of Hyde Marine, commenting at that time, said: “The rapid pace at which we are adding orders, particularly since spring 2014, is an indication that more shipowners and operators are seeking to responsibly address ballast water treatment compliance. And, we are pleased to collaborate with W&O and leverage their experience in helping end-users better understand the technical advantages of Hyde GUARDIAN.” Hyde Marine systems are ideal for vessel applications that have short runs, operate in multiple salinities, or require quick turnarounds, the company says. Hyde GUARDIAN systems provide a safe, efficient solution to meet ballasting needs without interfering with vessel operations or requiring extra crew time.

“Particularly, the Hyde GUARDIAN Gold BWTS is ideal for retrofits as it provides the compact size required by a growing number of shipowners and operators.

Hyde GUARDIAN Gold delivers the unique construction and technological specifications necessary to meet stringent ballast water treatment regulations.”

Hyde Marine, a wholly owned subsidiary of Calgon Carbon Corporation, is considered to be one of the most experienced BWTS organisations in the world, having delivered more than 340 Hyde GUARDIAN units, and commissioned more than 180 of them for operation on a variety of vessels around the globe – more than any other BWTS company.

Diesel power engineering specialist Royston has introduced a next-generation version of its successful Enginei fuel management system.

The new integrated system, with a range of enhanced fuel data analysis and reporting options, has been developed in consultation with vessel operators and owners, who are putting greater importance on the availability of detailed engine and mission-critical information.

To meet these demands, the new Enginei system uses powerful data collection software to significantly expand the range of fuel, engine performance and voyage data used for crucial fuel analysis and optimisation decisions.

66 – Summer 2015

Lawrence Brown, managing director of Royston Limited, explains: “Access to reliable fuel consumption data is taking on even greater importance for a wide range of fleet management issues, not only for fuel efficiency but to assess emissions compliance, plan engine maintenance and assess vessel suitability for different operations.

“Our original Enginei fuel management system has been successfully used in a wide range of vessel types around the world. We have now used this experience to develop an advanced and expanded system that reflects the industry’s increasing reliance on reliable fuel monitoring, reporting and verification systems.”

At the heart of the modular Enginei system is an expanded on board flow meter and sensor system.

This gives the upgraded system the ability to acquire comprehensive, real-time engine and vessel performance measurements, beyond the usual RPM, GPS and fuel inputs to take in a wide range of other engine control unit outputs. This includes data from torque, weather and trim sensors and other vessel performance criteria.

This increased scope means the onboard monitoring system can be configured to meet precise operator requirements to make accurate fuel analysis calculations and customised reporting formats.

The information captured onboard is made available for remote interrogation by onshore management and supervisory staff through a secure online portal and web dashboard, with enhanced data transmission between ship and shore.

Importantly, the new data options include the measurement of fuel consumption by individual engines to enable operators to more accurately determine actual

“Access to reliable fuel consumption data is taking on even greater importance”

engine load for the scheduling of service and overhaul requirements.

In addition, specific fuel burn data can be provided for different vessel operational modes, as well as consumption measurements per passage and by different captains.

All data collected by the Enginei system can be automatically incorporated into daily reports and vessel energy efficiency plans in a range of formats. The powerful data collection features and web platform are expandable, allowing additional user requirements to be incorporated as needs change.

Onboard the vessel, touchscreen monitors on the bridge and in the engine control room show all aspects of key vessel performance criteria, using simple dial displays and gauges or more complex presentations of trending graphs against voyage data.

The new upgraded Enginei fuel management system is the result of a sixfigure product development programme by Royston that has drawn on the company’s considerable experience in marine engineering.

Brown said: “We have used our specialist diesel engine technology experience to develop an advanced fuel monitoring system that meets the needs of both onboard engineers and the onshore monitors responsible for much broader fleet management decisions.

“The flexible data collection and analysis capabilities of the new system mean that the range of engine and fuel information provided can be adapted to meet individual operator needs as their requirements change and develop.”

Investment in the improved hardware and software associated with the new system has been accompanied by an expanded Enginei team within Royston to provide the necessary installation, data analysis and technical support required by an expanding customer base across all marine sectors.

The upgraded Enginei integrated fuel management system is compatible with all marine engine types and can be interfaced with newbuild engine installations or retrofitted to operating vessels.

MARKETS

TOUGH TIMES CONTINUE Markets conditions remain difficult

B

y the end 2014, the value of equity market participants in listed container leasing companies had eroded 18% compared with the previous year, which strengthens the view that container market recovery is delayed, according to Drewry Maritime Equity Research (DMER).

Global trade growth has been lower over the past few years, averaging 5.4% compound annual growth rate (CAGR) from 2010 to 2014, and is expected to remain low in the next two years. In addition, market lease rates that have been declining for the past four years continue to remain depressed, affecting lessors’ initial cash investment return (ICIR). DMER believes the ICIR will remain below 10% in 2015, should top leasing companies continue with their aggressive fleet growth.

Nilesh Tiwary, analyst at DMER, stated: “We see a fragile earnings growth outlook for the container leasing sector on the back of low container demand and sluggish macro-economic fundamentals. However, competitive lease rates should be somewhat offset by high utilisation rates. The labour dispute at US West Coast ports could also create spot container shortages that may be a net positive for container lessors. Moreover, container prices could fall further because of the decline in fuel prices in recent months.”

DMER has rated all the three companies under container leasing – Textainer Group Holdings, TAL International and CAI International – as neutral with a low-risk, high-reward potential.

Textainer Group Holdings is a market leader in the container leasing sector in terms of fleet size, with a steady earnings stream and strong balance sheet.

It has the lowest gearing and the highest operating margin among public peers. In addition, the company offers regular dividend with high current yield and high dividend growth rate. It is currently

facing near-term competition in light of the existing market conditions. DMER expects the company to report a lower net income in FY15. However, in the past, the company performed well despite these conditions and so could emerge a winner with the anticipated and eventual rise in interest rates. DMER assigns it a neutral rating with a fair value of $35 per share. Textainer Group scores an orange light on DMER’s bespoke value and a green light on its risk ranking, indicating a neutral valuation and low risk.

TAL International, which operates a fleet of more than two million teu, has a strong balance sheet and the highest fixed asset base. Compared with its public peers, TAL offers the highest dividends and best return on equity to its shareholders.

DMER expects some risk to earnings per share growth, as the leasing market environment is sending mixed signals and global macroeconomic uncertainty is still a concern. TAL’s margins should remain under pressure as the global supply-demand situation is expected to be tight in 2015/16. Global trade growth has been lower over the last few years, averaging 5.4% CAGR from 2010 to 2014, and is expected to remain low in the next two years. With a fair value estimate of $47 per share, TAL International scores an orange light on DMER’s bespoke value and a green light on risk ranking, indicating an attractive valuation and low risk. CAI International offers a strong longterm growth potential as it has ample liquidity and debt service metrics look healthy.

“Despite a slump in performance in recent years, we believe the company’s core fundamentals are intact because of its strong management and their focus on profitability. It concentrates on highly demanded dry containers (79% of the fleet in terms of cost equivalent unit), an increase in percentage of long-term contracts (83% of contracts including operating lease and long-dated finance lease), and a shift to a

“We see a fragile earnings growth outlook for the container leasing sector [with] low demand and sluggish macroeconomic fundamentals”

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MARKETS

majority-owned fleet (80% owned fleet).

In addition to strong fundamentals, it has a diverse customer base, including the largest shipping lines, and is attempting to diversify revenue streams and customers by expanding into railcar leasing in North America. However, considering a sluggish growth environment, DMER assigns a neutral view on the company with a fair value of $28 per share to the company.

CAI International scores an orange light and a green light on DMER’s bespoke value and risk ranking, indicating a neutral valuation and low risk.”

LINER SHIPPING Liner shipping service reliability across the three core East-West trades hit a fivemonth peak in March, with an aggregate on-time performance of 64%, according to Carrier Performance Insight, the online schedule reliability tool provided

by Drewry Supply Chain Advisors. The latest result represents an 8.5 percentage point gain over February and is the second best average (after October 2014) since the start of the new data series in May 2014. The improvement seen in March was the consequence of much improved services in the Asia-Europe trade and gradually easing congestion on the US West Coast following the resolution of the port labour dispute.

However, services on the Transatlantic took a backwards step in the month.

The most reliable carrier in March was Maersk Line, with an average on-time performance of 81%, followed by “K” Line (73%), Cosco and MSC (both 70%). At the bottom of the rankings were Zim (39%) and PIL (38%). “It is good news for shippers that service reliability is on the rise, although it comes from a low base and the industry average still has plenty more scope to improve. We expect the upwards trend to continue as US West Coast operations return to normal, but the sharp drop in Asia-Europe freight rates is a risk, as carriers could look to make cost savings detrimental to reliability,” says Simon Heaney, senior manager of supply chain research at Drewry. Building on Drewry’s long-established schedule reliability benchmarking that started back in 2005, the new Carrier Performance Insight provides the ability to benchmark the reliability performance of container 68 – Summer 2015

carriers on a port-to-port, trade lane, service and industry-wide basis. This information is available via a userfriendly website powered by data from global shipment management software solutions provider CargoSmart.

EVERGREEN SERVICE In light of the increasing capacity demand, Evergreen Line is set to launch its new Vietnam-Singapore-Malaysia service (VSM).

The dedicated feeder loop will utilise two A-type containerships of 1,164 teu.

The first sailing of the weekly service started from Haiphong on 10 May, calling at Ho Chi Minh City, Port Klang, Singapore, Tanjung Pelepas and then back to Haiphong.

In addition to providing efficient transportation services within its port coverage, this regional service will also connect to Evergreen’s global service network via its transhipment hubs in Singapore and Tanjung Pelepas.

Economic forecasts indicate strong momentum of trade growth in this region.

According to the International Monetary Fund’s “World Economic Outlook” report published in April 2015, the Association of Southeast Asian Nations (ASEAN) economy looks set to grow by 5.2% and 5.3% in 2015 and 2016 respectively, surpassing its performance of 4.6% last year. Alongside this, the statistics of Vietnam’s General Statistics Office show that its economic growth reached 6.03% in the first quarter of 2015, the highest first-quarter performance during the past five years. The positive indicators support expectations of steady cargo growth within intra-Asia trade.

HAMBURG SÜD PERFORMANCE While global economic growth in 2014 remained at the previous year’s level of 3.4%, container shipments increased at a considerably higher rate of 5.4% compared with the previous year (3.6%).

However, available global slot capacity onboard containerships has also increased in the past year, outpacing container transport volume. Consequently, it was not possible to reduce existing overcapacity, and freight rates in most trades declined further. A positive effect came from fuel prices, which fell sharply from the fourth quarter of the year, the

company said in a statement.

“The weak economic development in Brazil, Argentina and Venezuela contributed to the low, and in some cases negative, growth on the North-South trade lanes. Consequently, Hamburg Süd and its Brazilian subsidiary Aliança were able to increase transport volume by 2% only to around 3.4 million teu (1 teu = 20-foot standard container). With freight rates falling and a weak US dollar as the most important earnings currency, total sales fell at the same time by around 1% to e5.2 billion. Results from liner operations remained positive, albeit significantly lower than in the previous year.”

Not least driven by the declining economic momentum in China, bulk shipping once again had to contend with difficult market conditions in 2014 and was unable to move out of the red, the company said.

Despite waning momentum, with an increase of approximately 7.4%, the Chinese economy once again proved to be the engine of global growth in 2014. The situation in Brazil remains unsatisfactory, with the economy stagnating in 2014, and other South American economies, such as Argentina and Venezuela, also failed to recover. On the back of a slight upturn in Europe (+0.9%) and continued stable growth of 2.4% in the US, overall global economic growth increased by 3.4 per cent on the previous year.

Worldwide container transport in 2104 increased significantly compared with 2013 – by 5.4% – albeit to varying degrees from one market to another. While from 2012 to 2014, growth rates of between 3% and 6% a year were recorded on the Asia-Europe and Asia-North America routes, the Latin America trade lanes grew by an average of around only 1.5% a year.

Due to record deliveries of 1.5 million teu, global slot capacity (after scrappage) increased even more than worldwide container shipments – by 6.3% to 18.4 million teu.

One positive factor for the shipping industry in 2014 was the development in fuel prices, the company said. In the first half-year, the price for heavy diesel fuel remained at a relatively high level of around $600 per tonne, only to plunge by over 50% at the end of the year, and since then level out at between $250 to $350 per tonne.

MARKETS

Net capacity growth in bulk transport in 2014 stood at around 4.5% after scrappage. This went hand in hand with almost equal increases in cargo growth.

Thus it was not possible to reduce existing overcapacity in the market.

The rate level on the yearly average was considerably lower than costs. The market development for product tankers was, on the other hand, more satisfactory. The drop in crude oil prices in the fourth quarter of 2014 gave a boost to trade with oil products, and with it the demand for transport capacity.

Against a background of weak economic development in the majority of South American countries, accompanied in some cases by lower trading volumes, Hamburg Süd was able to increase its cargo volume by a modest 2.3% only to 3.375 million teu. Freight rates came under high pressure, owing to additional capacity from the medium-sized vessels displaced from the Asia trades. The cascading into the North-South trades above all severely affected the South America routes, causing an increase in tonnage capacity that could not be offset by the weak growth rates in carryings.

Although carriers attempted to reduce capacity on the South America routes especially in the off-season, capacity utilisation of the ship systems for large parts of the year was too low. Owing to stagnating and partially declining imports in Brazil and Argentina, development of activities between North and South America and from Asia to the South American east coast was especially disappointing. Ongoing overcapacity contributed to the fact that the service between India/Pakistan and Asia as well as Northern Europe continued to post unsatisfactory results.

Despite increased carryings, bunker costs were reduced in total by around 11%. In addition to fuel prices, which fell sharply from the fourth quarter of the year onwards, a further reduction in consumption through the deployment of more efficient ships and optimisations in operational flows contributed to this.

Overall, Hamburg Süd achieved a positive, albeit less than satisfactory, result from liner services despite difficult market conditions, the company said.

Given the ongoing serious overcapacity, earnings in the bulk shipping segment

remained under pressure in all ship classes throughout the year. The Panamax spot index rate fell compared with the previous year from $9,500/day to $7,700/day.

Operated by Rudolf A. Oetker, Furness Withy Chartering and Aliança Bulk, the bulk shipping activities of the shipping group again failed to produce a positive result in 2014 and thus remained at roughly the same level as in the previous year.

The time charter rates (12 months) for modern product tankers with a load capacity of around 50,000 tonnes were at roughly the same level as in the previous year with $14,300/day, although a noticeable increase could be observed towards the end of the year. This business segment generated positive earnings.

At the end of March this year, Hamburg Süd took over the liner services of Compañía Chilena de Navegación Interoceánica (CCNI) between the west coast of South America on the one hand and Asia, North America and Europe on the other. This increases the shipping group’s transport volume by slightly less than 10%, or around 300,000 teu. In certain trade lanes, Hamburg Süd achieves market leadership and is developing routes on which it has not previously operated. The integration will take place in the first half of 2015.

In order to expand the liner network and leverage the resulting logistical advantages, Hamburg Süd started operating the East-West trade lanes from the turn of the year. The collaboration with United Arab Shipping Company (UASC), with headquarters in Dubai, realised since the beginning of 2015, enables Hamburg Süd to provide slot capacity at competitive rates. In return, UASC obtains slots on selected South America routes operated

by Hamburg Süd.

Through the collaboration with UASC, Hamburg Süd is able to reduce its dependency on South America and offer its customers an extended network that is well accepted. It also allows the shipping group to tap new growth and cost reduction potential both onshore and at sea.

According to forecasts of the International Monetary Fund (IMF), the global economy and world trade are set to grow at a slightly higher rate than in 2014, by 3.5% and 3.7% respectively. The US economy in particular will continue to

gain in momentum, and growth in the eurozone is also expected to be slightly higher. China is forecast to remain the driving force behind global growth with 6.8%, albeit with a less dynamic pace.

This does not, however, imply a sustained recovery of container liner services in the coming year. On the back of low interest rates, fresh money is continuing to be pumped into shipping. As a consequence, a further acceleration of net slot growth is likely for 2015. With a rise in global container transports of around 5% and anticipated record growth in slot capacity of 8%, the overcapacity of container slots is continuing to increase. On the EastWest trades, this increase will focus on large ships with a capacity in excess of 10,000 teu.

The past few years have seen the formation of four large consortia on the major East-West routes. In light of the pressure on freight rates, these collaborations are aimed at improving the cost of ocean transport, especially by deploying larger and more consumptionefficient ships. Efforts are also being made to achieve cost benefits through smarter management of the ship systems.

Positive effects for 2015 can be expected in the short term to continue to come from low fuel prices, which, at least for the time being, can offset the fall in freight revenues. However, the industry will see sustained earnings improvements only if strict cost and capacity management is accompanied by sustained discipline in terms of rates.

In bulk shipping, the market environment is likely to further deteriorate in 2015, with charter rates and time charter equivalents currently having reached all-time low levels. Net fleet growth is forecast at around 5%. Unless China’s raw material imports increase substantially over the next few months, the growth in the volume of cargo will not be able to keep up with this figure, and group-owned tramp shipping activities would produce an even less satisfactory result than last year.

Given the relatively favourable trend in fuel prices and exchange rates, the Hamburg Süd shipping group is anticipating that operating results for 2015 will be higher than last year; however, this is to be seen against extraordinary expenses from the integration of the CCNI activities.

Summer 2015 – 69

BOOK REVIEW

TREAD LIGHTLY Irene Rosberg takes a look at the shipping strategies for an asset-light era that are to be examined in a new book by Professor Peter Lorange

S

trategic vision has been a quality sorely lacking in many parts of the shipping industry – a failure that at its worst has led to bankruptcies of quite large businesses and, as a result, to chaos among their suppliers and customers. Shipping guru Professor Peter Lorange is addressing pivotal aspects of this industry-wide weakness in his latest book, scheduled for publication in spring 2016.

Here at Copenhagen Business School, equipping the new generation of leaders in the maritime and related sectors with a full appreciation of how to react to the macro-issues, and the ability to master the minutiae, is the fundamental goal of our executive MBA in shipping and logistics – and, believe me, this has never been more urgent.

I am privileged to have been given a glimpse of the outline of the forthcoming publication by Lorange, which has the working title of Asset-Light Shipping Strategies. Every institution in the sector already has a weighty library of volumes on shipping theory and practice, so why do we need yet another book on strategy?

The answer, as Lorange explains, is that a lot has happened in shipping over the past few years – centred on the long-term crisis in most shipping markets, which, coupled with cost increases for bunker oil (until recently, anyway), has led to significant changes in efficiency, eco-design and so on. The ship financing picture has also changed significantly – traditional shipping banks do not play as important a role as they did until around 2007. In fact, China and other Asian sources have taken over as the major providers of loans to many shipping businesses. That is just the starting point for a considerably bumpy ride through a changed landscape.

Modern shipping is attempting to become “less fixed assets-intensive”, Lorange perceives, at a time when shipoperators are agonising over how to get closer to emerging and new customers.

The door to more advantageous financing might be opened by long-term charters with key customers, at times completed with “sale and lease-back” arrangements, but this depends critically on relationships with those customers.

A more specialised focus on particular business

segments is probably the key here. That then leads to relatively less dependence on the traditional way in which most shipbrokers work.

Lorange pays particular attention to the attractions of leasing, which links with the challenge on the financial side: how to take advantage of capital from others. He urges a study of leasing-type financing models “à la Seaspan” – a reference to a New York-listed independent owner and manager of containerships, which charters out tonnage on long-term, fixed-rate time charters.

He considers that Seaspan has pioneered a successful model for shipowning, which may, for others, point to the future. Its strategy is similar to what we find in the aircraft acquisition business, based on long-term lease contracts for such equipment.

Seaspan specialises in large boxships, with a fleet of around 80 of them, available for charter to major container lines, which thereby get access to modern tonnage without tying up their own capital in shipowning. The lines are thus allowed to spend their resources on primary liner business activities. Seaspan owns the ships, has them built in long, standardised series, finances them and crews them – achieving multiple advantages of scale.

Lorange goes on to look at what competencies will be needed in the future. He believes that there will be a call for integrated, cutting-edge skills: finance together with technical innovation and marketing, for example. These will no longer reside in separate departments, but will fit into project teams – spawning a totally new way of working that relies on fewer “kingdoms” and more general competencies. This will mean a rethink of classical shipping-derived competency development, resulting in what he terms as “less in-breeding and more ‘we, we, we’ teams”!

There is no getting away, though, from decisions on market timing. They are still the key ones – in or out, long or short. More sophisticated forecasting approaches have become available – such as that of Marsoft, which offers portfolio management and risk evaluation services to the ship finance industry. It provides what it calls strategic decision support tools for companies, allowing clients to draw upon Marsoft’s “extensive market expertise and gain access to its detailed databases and forward-looking information for their cycle management process”.

This will be the 19th book to be written or edited by Lorange, who is owner and president of the Lorange Institute of Business Zurich, and was previously president of the Swiss business school IMD and of the Norwegian School of Management in Oslo.

He brings strategy down to earth in his latest book through case studies of successful modern shipping companies, starting with Seaspan and moving on to others with specialities in dry bulk shipping, managing the complexities of a conglomerate, and activity in the areas of offshore, chemicals, gas carriers and storage.

Above: Shipping guru Peter Lorange

70 – Summer 2015

*Prof Lorange’s book is to be published by Cambridge University Press. *Irene Rosberg is the programme director of the executive MBA in shipping and logistics at Copenhagen Business School. Since 2001, the Blue MBA, as the programme is familiarly known, has enabled 162 executives from 35 countries to graduate, and has been praised by many shipping leaders as a key driver for the efficient modernisation of the industry.

PREVIEW: NOR SHIPPING

NOR-SHIPPING Key maritime leaders will be flocking to Nor-Shipping both to do business and to network

O

pening in June, the leading and longest-running maritime event week is celebrating its 50th anniversary with an expanded programme.

“This year’s programme offers thought-provoking conferences packed with high-profile speakers, as well as outstanding new forums that will engage the international maritime community,” says Nor-Shipping director Vidar Pederstad.

National and local dignitaries will come together with industry leaders to celebrate the official opening of Nor-Shipping 2015 on the evening of 1June at the City Hall Square in Oslo.

The largest such event this year, not only in Scandinavia but also in Europe, Nor-Shipping attracts key maritime players from across 80 countries. Shipowners, technology and service providers, regulators, financiers and many other maritime professionals will meet in Oslo to explore the future.

Nor-Shipping conferences have long been known for not shying away from the hard discussions that move the industry forward.

This year will be no exception.

Conference speakers will address issues such as the balance between innovation, investment and regulation; the smartest strategies between here and 2030; how to ensure a return on hightech investments; and other hot topics.

DNV GL Maritime chief executive Tor Svensen, IMO secretarygeneral Koji Sekimizu, BW Shipping managing director Yngvil Eriksson Åsheim, Nordea head of shipping, offshore and oil services Hans Christian Kjelsrud and many others will be speakers.

Teekay chief executive Peter Evensen, Transocean director of technology and innovation José Gutierrez, National Oilwell Varco chief executive and president Clay Williams and many others will enter the debates. Topics up for discussion include whether the offshore industry needs to reinvent itself in the light of tumbling crude oil prices; the future energy mix and its impact on business; the realignment of global power into new East-West blocs; and smart collaboration in challenging business environments.

This year, Nor-Shipping also launches many new initiatives, the major one being Ocean Industry Podium. This programme features 24 one-hour sessions on maritime finance, law, insurance or technology and innovation. Delegates can pick any of these sessions that suit their interests by popping up to the second floor of the exhibition.

“Podium is an opening up of new opportunities for Nor-Shipping to engage with the whole ocean industry,” says Pederstad. “It is one

example of how we intend to use innovative ways to include it in the future at Nor-Shipping.”

Other new Nor-Shipping 2015 initiatives include Brazil@NorShipping and Women@Nor-Shipping. Brazil@Nor-Shipping features a programme of activities that focus on the risks and rewards of doing business in Brazil, while the Women@NorShipping Waves of Change Conference will focus on leadership, the environment and the future, with women setting the agenda and men participating both on stage and in the audience.

EXHIBITION AT THE CENTRE OF IT ALL As during the past 50 years, the Nor-Shipping 2015 Exhibition showcases the best and latest in maritime technology, services and solutions over 22,500m2 spread across five halls. The main theme areas this year are IT and navigation; safety and rescue; shipbuilding and repair; maritime services and logistics; and propulsion and machinery.

New this year, the Nor-Shipping Delegate Pass gains delegates entrance to the exhibition and all Nor-Shipping events and has many other benefits, such as free public transportation.

As usual, young people have a special place at Nor-Shipping, whether they’ll be exploring future careers at Ocean Talent Camp, attending the many professional and social events on the Young@ Nor-Shipping programme or accepting Nor-Shipping’s Young Entrepreneur Award on stage at the Opening Conference.

Now that the data has been analysed, Erik Jakobsen of Menon Business Economics can reveal that there will be some “real surprises” in the company’s new report on the world’s leading maritime hubs.

Due to be released on the first day of Nor-Shipping, the report shows that “there are some cities that people do not necessarily think of as major shipping hubs that come out very high, particularly on the objective indicators”, says Jakobsen.

These indicators include publicly available statistics, which are balanced with subjective indicators, such as the opinions of industry experts.

For at least one of the cities, there is a huge gap between the subjective and objective indicators, while, for most of the others, the indicators are more or less aligned, says Jakobsen. He adds that the report has good explanations for wide discrepancies.

Summer 2015 – 71

EVENTS & EXHIBITIONS

NOR SHIPPING – OSLO

INMEX INDIA SMM – MUMBAI

Nor-Shipping is the leading maritime event

23-25 SEPTEMBER 2015

IBIA CONVENTION – CANCUN

week. Its top-quality exhibition, high-level

INMEX-SMM India is the number one

Information – Communication –

conferences and prime networking

meeting place for the maritime and shipping

Education

opportunities attract the cream of the

community in South Asia. The event

There will be something for everyone.

international maritime industry to Oslo

attracts over 650 exhibitors from around

www.ibia.net

every other year.

the world including international pavilions

www.messe.no/nor-shippin

from Germany, Singapore, Holland, Norway,

02-06 JUNE 2015

Korea, Finland, and The Netherlands.

inmex-smm-india.com

MARINTEC SOUTH AMERICA – RIO 11-13 AUGUST 2015

02-05 NOVEMBER 2015

EUROPORT – ROTTERDAM 03-06 NOVEMBER 2015

Europort has a strong focus on special

OFFSHORE MARINE AND WORKBOATS – ABU DHABI

purpose ships including offshore vessels, dredging vessels, construction vessels, naval vessels, workboats, inland vessels, fishery

Marintec South America – Navalshore,

05-07 OCTOBER

vessels and super yachts.

universally acknowledged as the strategic

3 days of exhibition, conference and

www.europort.n

event for the maritime value chain in Brazil,

networking for the workboat and offshore

provides opportunities for your company

marine sectors.

to drive new revenue with a highly qualified

www.seatradeoffshoremarine.com

audience.

events.ubm.com/event/3140/marintec-southamerica--12-navalshore

BUNKERS FOR MANAGERS – SINGAPORE 27-31 JULY 2015

INDONESIA MARITIME EXPO – JAKARTA

throughout the past three decades, the

conference in Indonesia for the world’s

exhibition is attracting an increasing number

maritime players. It’s where you need to

of high-profile exhibitors and visitors from

be to connect with 4,105 decision makers,

around the world.

shipowners, shipbuilders and other key

www.marintecchina.com

www.maritimexpo.co.id

management training course.

SEATRADE MARINE AWARDS

ship owners and traders.

ibia.net/event/ibia-forum-the-cost-of-failure/

11-12 NOVEMBER

ACI’s 7th Arctic Shipping Summit 2015 will focus on discussing the practical solutions necessary for the ship owners to decide

Celebrate maritime excellence across the

whether they should invest in utilising the

Middle East, Indian Subcontinent and Africa.

Northern Sea Route.

www.seatrade-middleeastawards.com

www://www.wplgroup.com/aci/conferences/ eu-mas7.asp

GASTECH – SINGAPORE 27-30 OCTOBER 2015

One of the world’s largest and most

ASIA PACIFIC MARITIME – SINGAPORE

prestigious LNG and natural gas conferences

16-18 MARCH 2016

and exhibitions, Gastech, is coming to

Meet 15,000 decision makers, shipowners,

Singapore in 2015, reflecting the country’s

shipbuilders and other key players from the

growing strategic importance as a regional

maritime and offshore community in 3 days.

hub for the Asian gas market.

www.apmaritime.com

www.gastechsingapore.com

72 – Summer 2015

ARCTIC SHIPPING LONDON

19 OCTOBER DUBAI

IBIA are hosting a forum entitled the cost of failure, hearing perspectives from insurers,

December 2015 in Shanghai. With increasing worldwide recognition and reputation

5-day all-inclusive bunker industry

09 SEPTEMBER 2015

Marintec China 2015 will be held on 1-4

IME is the most anticipated exhibition and

players.

IBIA FORUM – THE COST OF FAILURE LONDON

01-04 DECEMBER 2015

07-09 OCTOBER 2015

Bunkers for Managers is a comprehensive

www.petroedgeasia.com/brochures/PD170.

BunkersforManagers.JUL.SIN.pdf

MARINTEC CHINA – SHANGHAI

5-7 October 2015, Abu Dhabi National Exhibition Centre (ADNEC) United Arab Emirates Halls 7, 8 & 9

www.seatradeoffshoremarine.com

MIDDLE EAST

REGISTRATION NOW OPEN

EXHIBITION CONFERENCE FORUMS NETWORKING GOLF TOURNAMENT ●

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