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NOVEMBER 2019 Ɩ Volume - 03 Ɩ Issue - 11 Ɩ RNI NO: DELENG / 2017 / 70663 Ɩ ₹ 115/-

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MARITIME SAFETY AND HARNESSING THE BLUE ECONOMY Challenges and Opportunities for Maritime India

EXCLUSIVE COLUMNS

07 EXCLUSIVE INTERVIEW

EXCLUSIVE COLUMNS

CONTENT

Impact of Digitization Upon Port-development:

BY Admiral RK Dhowan PVSM, AVSM, YSM (Retd), FormerChairman National Maritime Foundation and Former Chief of the Naval Staﬀ, (Indian Navy)

THE ISRAELI PERSPECTIVE Background Israel has a 200 Km of shoreline and more than 26,000 sqm of exclusive economic zone (EEZ). Israel is highly dependent on maritime resources.

Capt. Bhuvan Julka, master of a M.T.Bochem London, an Anglo Easter Ship Management Chemical Tanker ,had recently set sail from the port of Charleston in South Carolina, USA, and was on his way to the port of New Orleans in the Mississippi river.

EXCLUSIVE COLUMNS

CLAIMS HANDELING BY OWNER/SHIP MANAGER (These obviously cover groundings, collisions, heavy weather, contacts. In most cases, it is clear what is a peril of the sea and what is not. However, take the example of cracked shell plating from an ageing but not necessarily old bulker in moderately heavy weather.

NEWS

Freight rates to ship U.S. crude to Asia continued to surge, with costs to charter a supertanker rising to a record $12 million on Thursday, shipping sources familiar with the matter said

Clean tanker owners chase dirty product opportunities for higher margins Long range clean tanker owners West of Suez are opting to load dirty petroleum products onto their vessels as they seek strong arbitrage opportunities in a market rising sharply in various basins in contrast to the relatively stiﬂed clean tanker market of recent months.

U.S. shipping sanctions deal blow to oil sought for new eco-rules ighly sought after types of oil best suited to making cleaner shipping fuel are suddenly ﬁnding they are a tougher sell for thirsty East Asian markets, traders say, in an unintended consequence of U.S. sanctions on a Chinese shipping ﬂeet.

More oil traders, vessel operators shun links to Venezuelaʼs oil More vessel operators and energy ﬁrms are shunning Venezuelan oil and the tankers that have carried it, according to brokers and traders familiar with the matter.

Shipping Costs Are Soaring as LNG Vessels Drop Out of Service The cost of chartering a liqueﬁed natural gas vessel on the short-term market has jumped the most since at least 2013.

Addressing invasive species in shipsʼ ballast water - treaty amendments enter into force The BWM Convention amendments formalizing the implementation schedule for the D-2 standard are now in force.

VLCC USGC China freight up 24% on day, up 53% since COSCO sanctions Freight rates for US Gulf Coast-loading VLCCs spiked 24% on the day Friday as position lists continued to tighten over the week after US sanctions were imposed on two aﬃliates of major Chinese shipowner COSCO Shipping Co., leaving charterers scrambling to secure ships for second decade November cargoes.

The London Protocol and London Convention How Global Regulation Can Deal Responsibly With Climate Change it igation Technologies to Protect the Marine Environment

First ever movement of container cargo on Brahmaputra (National Waterway -2) In line with Governmentʼs focus on improving connectivity to the North Eastern Region (NER),

Navios Maritime Containers L.P. Well Positioned Into 2020, Says Angeliki Frangou IMO HQ, London Navios Maritime Containers L.P., a growth vehicle dedicated to the container sector of the maritime industry, today reported its ﬁnancial results for the third quarter and nine months ended September 30, 2019

CNS Address-key Takeaways AT DRDO DIRECTORS CONFERENCE (Theme: - Navy's Perspective on the 'Way Forward for DRDO')

Perfecting port management and efficiency An intensive training on port management and operational efficiency was delivered to high-level officials and decision-makers from maritime and port authorities around the world. The annual fiveweek course, delivered by the Institut Portuaire dʼEnseignement et de Recherche (IPER), concluded on 11 October in le Havre, France.

Mexico sets high priority on IMO legal conventions The maritime authorities of the Government of Mexico have agreed to place a high priority on ratifying three important IMO legal conventions, following a workshop in Mexico City.

Glo Fouling ‒ signature event highlights environmental concernsThe GEF-UNDPIMO GloFouling Partnerships project has concluded its inaugural Research and Development Forum and Exhibition on Biofouling Management, in Melbourne, Australia (1 to 4 October).

SEA ETF: In Focus On Surging Global Freight Charges Oil tanker rates are on the rise. Per the Clarksons Research Services, rates for very large crude carriers (VLCC) surged from $50,002 to $307,888 per day, up 516% on average.

SULPHUR 2020: Stakeholders Prepare For a Sea Change From 1 January 2020. From 1 January 2020, sulphur oxide emissions from ships will be reduced considerably under a forthcoming International Maritime Organization (IMO) rule.

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ADVISORY BOARD

ADVISORY BOARD Admiral RK Dhowan (Retd), PVSM, AVSM,YSM, ADC, Former Chairman, National Maritime Foundation and Former Chief of the Naval Staﬀ

Dr. Malini V Shankar (IAS) Former Director General of shipping Member, Board of Governors, World Maritime University, Malmo, Sweden

Admiral Jayanath Colombage RSP, VSV, USP, rcds, psc Msc (DS), MA (IS), Dip in IR, Dip in CR, FNI (Lond) is the 18th Commander of the Shri Lankan Navy

Capt. Radhika Menon (World’s First women capt to receive an IMO award)

O-7 CDR (ret.) Eyal Pinko Maritime cyber and security senior consultant. Phd candidate for naval strategy

Dr. Sadanand Gupta Deputy Collector Khurja (U.P)

Capt. Sanjeev Soni (Director) Institute of Maritime Education & Training Singapore

Adv. Ravinder Singh Dhull State Media Penalist, Bhartiya Janta Party Politician

Mr. Joginder Singh Executive Director Sriram Institute of Marine Studies

From the Editor’s Desk

Amit Kumar Editor-In-Chief

v Editorial

Amit Kumar Editor-In-Chief Chesta Mishra Managing Editor

riminalisation of seafarers is a serious issue that the seafarers face. There was a time when Shipʼs officers were jailed and fined exorbitant amounts in the United States for s o m e t h i n g t h a t h a p p e n e d o u t i n t h e international waters. They were charged for “falsification of records” or “Obstruction of Printer & Publisher : Justice” or any criminal statutes they could find and slot a wrong entry in the oil record book. Amit Kumar, E-177, Ward No 2, Mehrauli, New Delhi 30. What the officers did was wrong, but those were Place of Publication : professional hazards that required an industry wide solution. While the industry did find a E-177, Ward No 2, Mehrauli,

solution by raising its awareness on matters of operational pollution in the high seas, no one ever turned back to ask the incarcerated chief engineers and officers how they were doing. The US had a very successful whistleblowing campaign that landed many officers in jail. What may have started with Capt. Hazelwood of the Exxon Valdez soon spread around the world. The US set an example giving the world an easy and prized scapegoat. Everyone wants one. The US showed them where to find one easily. The Prestige, the Erika, The Tasman Spirit and the Hebei Spirit among many more. Now, on the Adrian Darya 1 the master has been ʻblacklistedʼ by the US like they do terrorists. We sincerely hope the Adrian Darya 1 example is not another way for US to lead the way and the world to follow. Whenever the media focusses its attention on a case, or if a political vote bank is involved, then the shipʼs crew are the easiest target for authorities to show that they are taking action. Seafarers, like every other professional, have a right to undertake their work without fear of being treated unfairly, or, even worse, placed in detention without recourse to fair justice and representation or even categorized as terrorist.

New Delhi 30. Name of Printing Press : Perfect Impression Services, 43-DSIDC Complex,Kotla, Mubarak Pur, New Delhi110003

Vikas Kumar Graphic Designer Shobita Das Marketing Head (Mumbai)

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The master of the ferry Sewol was handed down 36 years for gross negligence when in fact, even the judge stated that the owners were responsible for Please Note : Views expressed in the articles are overloading the ship and structurally changing the ship making it unstable. Even in the case of the famous Costa Concordia case, we have not really heard anything those of the authors and may beyond Francesco Schettino. I donʼt think any master mariner would back what not be shared by the Editor or Capt. Schettino allegedly did after the incident, but the media hasnʼt really gone the members of the editorial board. beyond Schettino to name and shame the culture that was prevalent in the Unsolicited material will not be organisation which led him to take inexplicable decisions that led to the returned. unfortunate accident.

While many Indians have been at the receiving end, we have also been guilty of No material published in the unfair treatment of the crew on Seaman Guard Ohio. We politically played the magazine should be Enrica Lexie case. And now, we have Capt. Sidhu who is criminally held in China. reproduced or transmitted in While there is an ITF tool kit to enforce Fair Treatment Guidelines and the IMO has any form or by any means, the Casualty investigation code, merchant shipping is a legal quagmire. Many laws electronics and mechanical, are conveniently interpreted. But in no case is it to the convenience of the seafarer. including photocopy or digital A ship and the seafarer are subject to various legal jurisdictions ‒ and so we feel it is device without prior written imperative that an international agency be developed that takes up cases involving permission from the publisher. ship and her crew.

SHE @ SEA Full Name : Deepti Singh Rank. : Cheif Officer Company. : “K” LINE (INDIA) PRIVATE LIMITED

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EXCLUSIVE COLUMN

MARITIME SAFETY AND HARNESSING THE BLUE ECONOMY Challenges and Opportunities for Maritime India Admiral RK Dhowan (Retd), PVSM, AVSM,YSM, ADC, Former Chairman, National Maritime Foundation and Former Chief of the Naval Staﬀ (INDIAN NAVY)

BY Admiral RK Dhowan (Retd), PVSM, AVSM,YSM, ADC, Former Chairman, National Maritime Foundation and Former Chief of the Naval Staﬀ

(INDIAN NAVY) Ladies and Gentlemen 1. It is indeed a distinct honour for me to be present here today for the Seminar on Maritime Safety and harnessing the Blue Economy- Challenges and Opportunities for Maritime India and it is a privilege to share my thoughts with this august audience. 2. Oceans are central to life on earth. They are rich in oil and mineral resources, they are suppliers of oxygen, absorbers of carbon-dioxide, a virtual heat sink, rich in bio-diversity and have emerged as the global economic highways for transit of sea borne trade. With depletion of resources on land, humankind has turned towards the seas for resources and there is a misperception that oceans have an unending resource base and are an inﬁnite sink, but nothing could be further away from reality. Over the past few decades, we are witnessing the pollution of the seas and contamination of the natural marine habitat, resulting in an adverse impact of climate change on the oceans. Studies have indicated that almost 80% of the pollutants in the seas

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emanate from land and if the current rate of pollution continues, in a few decades we will have more plastic in the oceans than fish. The concept of 'Blue Economy' has emerged as a new paradigm and I would like to define harnessing the Blue Economy as economic development of our maritime interests by efficient utilisation of marine resources with minimum impact on the environment and ensuring sustainable development of the oceans. 3. India is essentially a maritime nation with a natural outflow towards the seas with our island territories of Andaman and Nicobar Islands in the Bay of Bengal and Lakshadweep Islands in the Arabian Sea as the virtual extended arms of India. India has a coastline of 7516 kms and Exclusive Economic Zone of over 2 million square kilometers. Approximately, 95% of India's trade by volume and 77% by value transits by seas and foreign trade accounts for nearly 30% of India's GDP.

Modi, there have been a series of i n i t i a t i v e s f o r s u s t a i n a b l e development in the maritime domain including the quest to harness the Blue Economy. The Hon'ble Prime Minister has linked the Blue Chakra or wheel on the national ﬂag to our potential to harness the Blue Economy. India's vast maritime interests are also enablers of our Blue Economy and I will highlight some of the maritime sectors, which are likely to witness signiﬁcant growth in the coming years and these will also serve as avenues for maritime cooperation to harness the B l u e E c o n o m y w i t h o t h e r neighbouring countries.

5. India has 12 major ports and 200 intermediate and minor ports. The port handing capacity of these ports which currently stands at 1500 million metric tons per annum is 4. In recent years, under the leadership of likely to increase to 2500 million Honourable Prime Minister Shri Narendra metric tons per annum over the next

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EXCLUSIVE COLUMN ten years. The Government of India has launched the ambitious Sagarmala project, which is a port-led industrialisation and coastal community development. Sagarmala actually comprises about 150 integrated projects with a planned investment of about 60 billion US Dollars. Sagarmala envisages Development of transshipment hubs and greenfield Port Infrastructure with minimum impact on the environment. Sagarmala will also ensure connectivity of ports with the hinterland through multimodal road and rail connectivity and inland waterways. 6. India currently has over 15,000 kms of navigable inland waterways and in the first phase, the government is developing 4,500 kms as five major national waterways, Currently, 94 percent of freight in India moves by road or rail and development of inland waterways will enhance transportation over water, which is cheaper (economical), safer and cleaner. The planned development of additional Inland Waterways presents a huge opportunity for investment and growth in India. 7. The mercantile marine and shipping industry is also envisaged to grow in the near future. India currently has a merchant ship fleet of approx. 1,390 ships flying the Indian flag totaling nearly 22 million Gross Registered Tons (GRT). White over 90% of India's trade by volume transits by sea, only seven percent is carried on Indian flagged ships. To enable India's growing foreign trade to be carried on Indian hulls, the Indian Government is providing incentives for Indian registered and Indian flagged shipping and has initiated measures to increase tonnage of 'Indian Controlled Shipping by promoting our ship building industry. 8. India has a vibrant shipbuilding and warship building industry with 27 shipyards. Recently, the Government of India has given a major boost to the shipbuilding industry by according it special infrastructure status and permitting 100 per cent Foreign Direct Investment (FDI) in shipbuilding. Joint venture partnership between shipyards could be avenues for future maritime cooperation, will enhance employment opportunities in the shipbuilding sector. It should be our endeavour to progressively build ships in accordance with the Energy Efficiency Designed Index, approved by the IMO and propelled by environmentally friendly fuel. 9. Another aspect I would like to mention is the warship building industry in India which is fi r m l y a n c h o r e d o n s e l f - r e l i a n c e a n d indigenization. The Indian Navy made its perspective plans in 1948, inducted naval architects into the Navy in 1955, set up its naval design directorate in 1964. India built its first indigenous naval warship, a patrol vessel INS Ajay in 1961 at Garden Reach Shipyard in Kolkata. Over the past 50 years our naval designers have designed and our indigenous shipyards have built ships for the Indian Navy resulting in our transformation from, buyers Navy to builders Navy. Today it is a matter of great pride that nearly 50, ships and submarines under construction are being built in Indian shipyards both public and private. These range from aircraft carrier to frigates, destroyers and submarines. It is our endeavour to progressively increase the indigenous content so that future warships and submarines are 100% Made in India.

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EXCLUSIVE COLUMN 10. India has over 1300 Islands and Islets as part of the Andaman and Nicobar Islands, the Lakshadweep group and Islands off the West and East Coast of India. The Government has prepared a comprehensive plan for the development of the islands, which takes into account aspects of security, economic sustenance, environmental preservation, social and cultural sustenance. This development of the I s l a n d w i l l e n s u r e g r e e n fi e l d infrastructure projects with minimum i m p a c t o n t h e e nv i r o n m e n t a n d opportunities for controlled ecotourism. Opening of the maritime tourism sector could open up a host of o p p o r t u n i t i e s i n t h e f u t u r e , f o r development of marinas and cruise t o u r i s m . T h i s w i l l e n h a n c e opportunities for marine connectivity and cruise tourism with our littoral neighbours in the Bay of Bengal, which is the largest bay in the world with seven countries located on the Rim of the bay. 11. India's EEZ also provides offshore energy resources and we have oil and

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gas exploration areas off the west and east coast of India. India has also been allocated deep sea bed mining areas in the Central Indian Ocean and these s e c t o r s a r e l i k e l y t o R E G I S T E R significant growth in the coming years. 12. Renewable ocean energy is another u n - h a r n e s s e d n i c h e s e c t o r w i t h immense scope in the future. This includes tidal and wave energy and ocean thermal energy conversion. It can therefore be seen that while there are an ocean of opportunities for development of maritime interests for economic growth, the challenges lie in ensuring that these are greenfield projects, with a minimum impact on the environment, to ensure sustainable development of the oceans. 13. The Indian Ocean is the third largest water body spanning an area of 68.5 million square km and countries on the rim of the Indian Ocean are home to onethird of humanity. 14. As a maritime nation, India sits

astride busy sea lines of communication over which nearly 120,000 ships transit every year carrying 66% of the world's oil, 50% of the world's container traffic and 33%of the world's cargo traffic. Nearly one billion tonnes of oil transits through the Indian Ocean every year and these trade routes and oil arteries lead further East to the ASEAN, and the maritime interests of the countries of the region are linked to unfettered flow of oil and trade across the Indian Ocean Region. 15. The seas are no longer a benign medium and globalization had led to vulnerability of the oceans. 16. The threats and challenges on the waters of the Indian Ocean are as wide and varied as they come. Who could have imagined that in the 21st century we would once again be grappling with pirates or that the major threat in the maritime domain could emanate from asymmetric challenges and maritime terrorism. It is a reality today and the o t h e r c h a l l e n g e s i n c l u d e a r m s

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EXCLUSIVE COLUMN trafficking, drug smuggling, human trafficking and IUU fishing. 17. Safety at sea is therefore of paramount importance and it is essential for us to ensure the Maritime Safety in the Indian Ocean Region. One of the pre requisites for providing maritime safety is an effective information sharing arrangement to enhance the Maritime Domain Awareness across the Indian Ocean Region. India has set up an extensive NC3I Network by linking up the AIS chain, the coastal radar stations and 51 stations of the Navy and the Coast Guard to provide effective MDA in our waters. 18. The Indian Navy set up the information Management Analysis Centre (IMAC) in end 2014, and the International Fusion Center in 2018. In addition the Indian Navy is signing technical agreement for exchange of white shipping information with other nations including ASEAN which will provide further boost to enhancing the MDA and assuring maritime safety at sea in coordination with the Coast Guard. 19. Another most important aspect with regard to safety at sea is Maritime ‒Transportation safety and related issues of Maritime Law and Search and Rescue. In the last 20 years shipping-traffic in the Indian Ocean has grown by over 300%. Accordingly there has been an increase in the number of mariners out at sea, whose safety is of primary importance. It is therefore necessary to focus on the journey from Safety of Life at Sea (SOLAS) Convention, to a voluntary IMO Member State Audit Scheme (VIMSAS) and then to the current mandatory Triple-l code of IMO, namely the Implementation of IMO instruments. We would need to examine the existing maritime structures in the region to see if we could give requisite thrust to safety issues, including implementation of maritime law and Search and Rescue. 20. In the Indian Ocean we have the structures at three levels at the conceptual level we have the concept of SAGAR, which is the vision of the Hon'ble Prime Minister of India, and the achromous SAGAR stands for Security and Growth for all in the Region. At the political level we have the Indian Ocean Rim Association, which was established in 1997, and around 2012 Maritime Security and Safety was added to the agenda of IORA as a focus area. At the execution level of the navies we have the IONS, which is a unique initiative taken by the Indian Navy to promote maritime security, safety and cooperation among navies of the region. There is a need for greater interaction between the existing structures to promote maritime safety across the region. 21. Another issue is that, the indiscrimate pollution of the sea has led to a detrimental impact of climate change on the oceans. Consequently a large percentage of extreme climate conditions turn into natural disaster and this places the Indian Ocean Region virtually in the eye of the storm and our navies and Coast Guard have to be ready to carry out search and rescue and provide humanitarian assistance and disaster relief. 22. This leads us to another aspect, which is Maritime Environment Safety. The United Nations document Transforming our world 2030 Agenda and the Sustainable Development Goals, particularly SDG-14 provide the template for preservation of seas and resources and sustainable development of the oceans. If the entire maritime shipping of the world was grouped together and considered as a country, it would be the world's 6th largest climate polluter in terms of CO2 emissions. In addition maritime transportation remains highly susceptible to marine oil spills. While IMO has made efforts to mitigate oil spill disasters to preserve marine environment and launched the Regional Seas Programme, 45 years ago in 1974, the actual impact at sea remains minimal. We therefore need to examine how the South Asia Seas (SAS) and East Asia Seas (EAS) programs could be harmonized to develop Regional cooperation for maritime environmental safety. This could ensure clean and healthy oceans for our future generations. 23. Sustainable fisheries is another focus area. India has 250,000 fishing boats, four million active fishermen, fourteen million part of the fishing community and our annual fish production is in the region of 11.41 MMT, which makes us the 3rd largest fishing nation in the world. However, this is only scratching the surface as 90% of fishing in Indian waters is restricted to the coastal areas, where as, we have the entire 200nm of the EEZ to be exploited. There is hardly any fishing in the deep Indian waters and it is said that fish in deep Indian waters are dying of old age. The government has promulgated the national fisheries policy 2017, for sustainable development of deep sea fishing.This provides another area for maritime cooperation between India and countries of the region to prevent IUU fishing and harness the Blue Economy by promoting an Eco system Approach to Fisheries Management (EAFM). 24. One of the most important aspects of maritime safety is the holistic safety of the Ports and harbours. As I mentioned earlier the Indian Government has launched its Flagship SAGAR MALA project, which is a port led development initiative. An important aspect of portmodernisation is to leverage technology for both on shore and off shore-security and security of the big-data connectivity as part of overall port safety.

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EXCLUSIVE COLUMN

25. The seas around us are gaining new found importance as each day goes by and I have no doubt that the current century is the century of the seas. 90% of the world's trade transits by sea and the waters of the Indian Ocean Region have emerged as global economic highways. Another unique feature of the Indian Ocean is that 80% of the oil and trade that emanates in the region is extra regional in nature. This implies that if there is any impediment to the free ﬂow of oil and trade in the region, it would have a detrimental impact not just on the economies of the region but global economy as well.

process of various departments and agencies in the maritime domain for economic development of our maritime interests and implementing Blue Economy initiatives. d) To fully implement the Honourable Prime Minister's vision of SAGAR, that is, 'Security and Growth for All In the Region', we need to draw up a detailed roadmap for maritime cooperation and maritime safety with various countries of the region to ensure safety of trade and safety of mariners so as to shape a positive and favourable maritime environment in the Indian Ocean Region. e) The Honourable Prime Minister has launched a dynamic initiative of Swach Bharat (Clean India). We need to extend the concept to Swach Sagar to ensure clean and healthy oceans for our future generations. f) India has vast maritime interests with are also enablers of our Blue Economy and have a vital relationship with the nation's economic growth. The recent initiatives and developments in the maritime domain are pointers to indicate that India has once again turned towards the seas and is destined to emerge as a resurgent maritime nation in the 21st century. Thank You Jai Hind

26.Safety of transportation and trade, safety of mariners and effective traffic management are t h e r e f o r e o f p a r a m o u n t importance and I am sure that the vibrant discussions during the conference will provide some path breaking suggestions in this very important area of Maritime Safety and assure-maritime safety in the Indian Ocean Region. 27. In conclusion, I would like to highlight five major takeaways:a) The United Nation's document 'Transforming Our World-Agenda 2 0 3 0 ' a n d t h e ' ' S u s t a i n a b l e Development Goal, SD G 14', p r o v i d e s a t e m p l a t e f o r conservation of the oceans, seas and resources. We now need to outline a perspective plan for sustainable development and growth in different avenues of the maritime sector. b) As a maritime nation, India has a significant potential to harness the Blue Economy. We need to chart a national level maritime policy to harness the Blue Economy, for sustainable development of the oceans. c) There is a requirement for an a p e x l e v e l o r g a n i z a t i o n t o coordinate and integrate planning

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EXCLUSIVE INTERVIEW

Capt. Bhuvan Julka

apt. Bhuvan Julka, master of a M.T.Bochem London, an Anglo Easter Ship Management Chemical Tanker ,had recently set sail from the port of Charleston in South Carolina, USA, and was on his way to the port of New Orleans in the Mississippi river. To him and his crew it was just another voyage to just another port. But little did they know that this journey would forever be in their memories and would form part of stories they would tell their grand kids A Haitian GROUP with a 9-month-old baby Ashton along with many other refugees ďŹ&#x201A;eeing to the US crammed into the boat along with enough food for 4 days. They had sailed out for Florida which was only few days from Haiti, but somehow lost way and soon started drifting with the strong Florida Current into the vast Atlantic Ocean.It doesn't take longer to reach Florida. It had been 8 days since they boarded what they hoped was a journey to a better future. Their food ran out 4 days earlier and now with the boat overloaded and barely aďŹ&#x201A;oat; they needed rescuing. And when they saw this large ship pass their boat, they waved franticallyin the hope that at least this large ship will stop for them unlike the many that passed by unaware or unwilling. On the 3rd of July, the third mate who was standing watch on the bridge saw this and informed Capt. Julka. Capt. Julkadeftly maneuvered the ship closer. He counted 22 lives onboard; 17 men, 5 women and a baby Ashton. They needed help. He knew he had to be the one providing it. Capt. Bhuvan called the US coast guard and appraised them of the grave situation. They instructed him to provide all assistance he could. He then called the DPA Mr.Dhillon, who was manytime zones away in Singapore. He assured the Captain of his support and urged him to do the best he could to save lives. The sun had already gone down, it was getting darker. They could just see a small mast and a single light. He mustered his crew and passed on instructions. His crew was all excited and appeared well prepared for the eventuality, as

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EXCLUSIVE INTERVIEW

apt. Bhuvan Julka, master of a M.T.Bochem London, an Anglo Easter Ship Management Chemical Tanker ,had recently set sail from the port of Charleston in South Carolina, USA, and was on his way to the port of New Orleans in the Mississippi river. To him and his crew it was just another voyage to just another port. But little did they know that this journey would forever be in their memories and would form part of stories they would tell their grand kids A Haitian GROUP with a 9-month-old baby Ashton along with many other refugees fleeing to the US crammed into the boat along with enough food for 4 days. They had sailed out for Florida which was only few days from Haiti, but somehow lost way and soon started drifting with the strong Florida Current into the vast Atlantic Ocean.It doesn't take longer to reach Florida. It had been 8 days since they boarded what they hoped was a journey to a better future. Their food ran out 4 days earlier and now with the boat overloaded and barely afloat; they needed rescuing. And when they saw this large ship pass their boat, they waved franticallyin the hope that at least this large ship will stop for them unlike the many that passed by unaware or unwilling. On the 3rd of July, the third mate who was standing watch on the bridge saw this and informed Capt. Julka. Capt. Julkadeftly maneuvered the ship closer. He counted 22 lives onboard; 17 men, 5 women and a baby Ashton. They needed help. He knew he had to be the one providing it. Capt. Bhuvan called the US coast guard and appraised them of the grave situation. They instructed him to provide all assistance he could. He then called the DPA Mr.Dhillon, who was manytime zones away in Singapore. He assured the Captain of his support and urged him to do the best he could to save lives. The sun had already gone down, it was getting darker. They could just see a small mast and a single light. He mustered his crew and passed on instructions. His crew was all excited and appeared well prepared for the eventuality, as if everything they had trained for and experienced so far was to save these 22 lives. They brought ropes, lines, lifebuoys, juices, milk, water, fruits, biscuits, bread and all they could get their hands on. They even got the two boxes of the famous American Doughnuts. As they rigged the pilot ladder, they had prepared the welcome. The bosun and his men passed their lines and hauled in the boat carefully and made her fast. And just as they were beginning to embark them onboard, the boat began to capsize and in no time, it turned turtle. Capt. Julka's first

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thoughts were about Ashton's safety. His fears were unfounded because a young man had managed to hold onto the pilot ladder with Ashton in his arms. They all heaved a sigh of relief. Then they turned to look back at the water and they saw chaos all around. The men and women in the water were shouting for help and the crew by the ships rail were trying to reassure them. Some of them climbed onto the keel of the upturned boat. Others were clinging to it. They were holding on to the lifebuoy grablines in pairs. The rope holding the boat parted. The boat kept drifting away and slowly sinking but never really going down under. It deﬁantly refused to go down until everyone were safe. The crew onboard rushed to bring more life buoys and ladders. The crew managed to pass two more ropes that were fast to an eye on the keel. The eye on the keel seemed to have no purpose but to hold this rope. Slowly, the scene appeared to be under control. The men and women came aboard ‒ all 22 of them. They almost heard a collective sigh of relief. They lay on deck exhausted, spread-eagled, breathing heavily, crying smiling, praying! Every emotion painting itself on those faces. The crew felt a sense of satisfaction and pride for having their bit. Capt. Julka was no stranger to Ashton, to whose arms he went very easily. When Ashton's mother held him, it was a sight to behold. Tears streaming down a smiling face. Ashton was soon asleep after a full tummy! The US coastguard was on their way and would be at the vessel at the break of dawn. Meanwhile the men and women were made to feel as comfortable as they could be. As the dawn broke, the USCG cutter Seneca was alongside the vessel. Two oﬃcers boarded the vessel and thanked the master and handed over a letter of appreciation from their commander for the courage and valour shone by the crew. And the refugees, well fed and rested after many forlorn days at sea stepped on to the Seneca wearing their life jackets and their hopes intact. That was on the 4th of July! Anyone who could speak a smattering of English thanked Capt. Julka and his crew. As the last person boarded, the Seneca gave a strong stern salute to the ship and her crew. They were already missing Ashton!

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EXCLUSIVE INTERVIEW Capt. Julka recalls many masters who influenced him. He had been part of a SAR operations very early in his career. This and the many experiences during his career had prepared him well to handle this very dangerous rescue mission which was appreciated by the USCG. To the youngsters looking up to a sea going captain, Capt. Julka says “Yes, just that we always stick to our foremost duty at sea ‒ to assist the ones in distress and requiring help. Never hesitate, ever. Would be great if this entire article once published inspires other fellow seamen to save lives at sea as the feeling is so immense and overwhelming once you are amongst the saved lives. Nothing could be more joyful than seeing the distressed people safe.” Migrants are risking their lives in the hope of a better future. Ships are plying round the clock across oceans carrying everything under the sun. Many of these ships are commanded by Masters who are under the pump. They have to keep times and meet laycans. There may be a CarolaRackete who defied authorities to save lives; but they are too few and in between. In such times, we salute Capt. Julka and his crew of Bochem London and their Managers ‒ Anglo Eastern Ship management for having put the primary duty of saving lives at sea above other considerations. There is a bigger story. There have been just too many migrants who have lost their lives yearning for a better future. They really do not need to have to experience this. They should not have to leave their lives in their own countries. They should not have to brave the Mediterranean Sea to sustain hope. The world should take notice of the increasing number of forcibly displaced people losing lives. The political response to this issue has to be louder and effective.

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EXCLUSIVE COLUMN

Impact of Digitization Upon Port-development:

THE ISRAELI PERSPECTIVE Background Israel has a 200 Km of shoreline and more than 26,000 sqm of exclusive economic zone (EEZ). Israel is highly dependent on maritime resources. These include most of Israel's electricity and energy (about 85%), drinking water (about half of Israel's drinking water comes from desalination plants), lines of communication (that lie on seabed) and 99% of national trade. Additionally, about 60% of Israel's population live not more than 5nm from the seashore. The sea lines of commerce to Israel go to two main ports in the Mediterranean Sea (Haifa port and Ashdod port) and one in the Red sea (Eilat port). In 2018, More than 6,000,000 tons of commodities and more than 6,500 vessels passed through Israel's commercial ports. In 2003 Israel issued an international tender for analyzing and planning the development of new ports/terminals in Israel. A Dutch company,Haskoning, won the international tender issued by the IPC (Israel Ports Development & Assets Company Ltd.) for the strategic planning of Israel's new ports. The IPC with the help of Haskoning designed and coordinated the development of the Southport Terminal in Ashdod and Bayport Terminal in Haifa (at the north part of Israel). These new port terminals have been designed to handle the largest container vessels currently being deployed (Class EEE). The construction work on the terminals is well under way, andthey are set to become operational during 2021. T h e I P C h a s s i g n e d c o n t r a c t s w i t h international operators which have received a 25-year operational license to operate and maintain the two facilities. Southport terminal will be operated by TIL-Terminal Investments Ltd. and Bayport terminal will be operated by the Chinese SIPG-Bayport Terminal Co., Ltd. Along with the developments of the ports and terminals, they become more and more sophisticated and advanced, using high-end technology, digitized and automated systems, which allow them to become more eﬀective and eﬃcient,and to reduce operating costs.

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"Anyone who understands our geographic reality and its economic and political implications will immediately grasp the value of our sea power for our existence” Israel Prime Minister, David Ben Gurion, 1950

O-7 CDR (Retd.) Eyal Pinko Maritime cyber and security senior consultant. Phd candidate for naval strategy

This paper will present the challenges Israel facesin the developments of its seaports and 2 Cybersecurity Challenges their digitization. The world of shipping and maritime transportation has Challenges e x p e r i e n c e d a m a j o r The development of ports in Israel, including transformation in recent years. their digitization and systems, when combined Especially important is the with the strategic situation in the Mediterranean g r o w t h i n c o n n e c t i v i t y , arena,presents four main challenges: security, communication, digitization cybersecurity, maritime domain awareness, and and automation, as well as the challenges arising from the construction of new integration of the information ports. and logistics systems of the seaports, vessels and shipping 1 Security Challenges companies, as well as their Israel's strategic situation includes many customers. security challenges. Regional trends of recent years include a weakening of hostile P o r t s o p e r a t e n u m e r o u s s t a t e a c t o r s ( s u c h a s S y r i a ) , a n d computerized systems for port consequently, a decline in the traditional management, loading and military threat. On the other hand, a hybrid, unloading of containers and asymmetric, and multi-faceted threat from cargo, movement and storage extremist Islamic Jihadist elements has within the port, billing and emerged. customer's services systems, physical security systems, In order to keep its sea lines and sea ports maritime control systems, etc. secure, and to maintain Israel's security and A l l t h e s e s y s t e m s a r e sovereignty, the Israeli Defense Forces and connected by means of the especially the Israeli Navy should be able to i n t e r n e t a n d s a t e l l i t e protect the Israeli shore line, ports and sea communication systems; they lines of commerce from different types of are also connected to the adversaries. These adversaries range from vessels. terror organizations (such as Hezbollah, Hamas, ISIS and others) to regular navies Vessels are also equipped with (such as the Syrian navy, if it will be restored numerous systems: detection into operational capacityafter the conclusion a n d n a v i g a t i o n s a t e l l i t e of the Syrian civil war, possiblywith the help systems (Global Navigation o f t h e R u s s i a n n a v y a n d t h e Satellite System ‒ GNSS), IranianRevolutionaryGuard Corps). identification and monitoring of ships (Automatic Tracking The challenge of securing Israeli assets at System ‒ AIS), loading of sea, the commerce lines and the sea ports, navigation maps (Electronic requires the Israeli Navy to build and Chart Display and Information maintain different operational capabilities Systems ‒ ECDIS), control of against different types of adversaries and the engines and steering, threats. These include different platforms, control of various sensors detection and command and control systems, (such as monitoring of fuel, oil, and weapon systems. All this has to be done water flow, fire/smoke, etc.), with in sign if I cant budgetary constraints. c o n t r o l o f c a r g o a n d transshipment, etc.

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EXCLUSIVE COLUMN The various systems onboard a vessel are interconnected and integrated, as well as being connected to the port and the shipping c o m p a n i e s b y m e a n s o f s a t e l l i t e communication and other channels of communication. The integration of technological advances, the multiplicity of seaport and ship systems and t h e c o n n e c t i v i t y b e t w e e n t h e m a r e increasingly exposing ports and ships to cyber threats. At the same time, global economic changes have led to the increased importance of the ports and shipping to the economies of the world, making them a very appealing target for such attacks. Cyber attackers view the ports and the shipping companies as quality targets in view of the huge amount of information they possess, the high turnover in t h e i n d u s t r y a n d t h e t e c h n o l o g i c a l vulnerability of the systems. Cyber-attackers could offer their services to criminal organizations, terror organizations, activists or nation-states. They are constantly searching for ways to exploit technological advances and systems in order to carry out cyber-attacks on the seaports, on shipping companies and even on vessels. The goals of cyber-attacks on the maritime industry and on maritime assets and infrastructure might be financial profits, influence on public opinion, reputational damage, political gain or military purposes, such as disrupting or shutting down a nation's critical assets as part of hybrid warfare strategy.

Protecting ports and shipping against cyber threats is a complex task. Following are some of the challenges: A Development of an organizational/security culture in the ports and in the shipping companies, which will ensure secure behavior and personal responsibility a m o n g t h e e m p l o y e e s a n d t h e management levels, in addition to the assimilation of procedures, awareness and work methods for the improvement of organizational preparedness against cyber-attacks. B Shipping companies manage ports, goods and cargo in many countries, with a wide geographical dispersion. This makes it diﬃcult to create a uniﬁed defense strategy that will provide protection to all of the ports and to the connectivity between them.

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C There are no unified configuration of information systems, detection and navigation systems, communication and control, etc. Therefore, it is necessary to create cyber security solutions that are on the one hand as generic and economically feasible as possible and on the other hand solve for the heterogeneous configurations of the various systems on ships and defend against the large number and variety of threats. D There are various crews operating on t h e s h i p s , w i t h a v a r i e t y o f nationalities and very often with little security awareness and no control or supervision by an information security professional. E Supervision and monitoring of threats around the clock and throughout the year, including real-time monitoring and warning and the ability to deal with a threat within the shortest time possible.

3 M a r i t i m e d o m a i n a w a r e n e s s challenges Maritime Domain Awareness (MDA)is d e fi n e d a s " t h e e ff e c t i v e u n d e r s t a n d i n g o f a n y t h i n g associated with the maritime domain, all areas and things of, on, under, relating to, adjacent to, or bordering on a sea, ocean, or other navigable waterway.2" MDA encompasses all maritime related activities, infrastructure, people, cargo, and vessels and other conveyances that could impact the s e c u r i t y, s a f e t y, e c o n o m y, o r environment of a nation state. Achieving awareness of the maritime domain is challenging. The vastness of the oceans, the great length of the shorelines, and the size of port areas provide both concealment and numerous access points to the land. A key national security requirement is the effective understanding of all activities, events and trends in the maritime domain that could threaten the safety, security, economy, or environment of the nation state. Israel has a great operational need to m a i n t a i n s e c u r i t y a l o n g i t s

shorelines, seaports and EEZ. This raises MDA challenges, including s u r ve i l l a n c e , c l a s s i fi c a t i o n a n d identification of a large number of targets, the fusion of an enormous amount of data from many sensors, and anomaly detection. The first challenge for MDA in Israel, is the ability to detect, classify and identify targets at long distance from shore, which requires fusing many t y p e s a n d s y s t e m s o f s e n s o r s , i n f o r m a t i o n a n d i n t e l l i g e n c e resources. This challenge becomes even greater with the increase of data and systems complexity. One of the biggest challenges in fusing data is the ability to detect target c h a r a c t e r i s t i c s a n d b e h a v i o r anomalies at all ranges, for example small fishing boats that sail along the shore or small islands. The second challenge is how to identify and pinpoint, accurately and in real time, a threat such as terrorists, piracy, or other adversaries. The third challenge is the ability to build and maintain a real-time and accurate maritime picture, based on fusion from many sensors, at all ranges: from near shore up to the EEZ ranges. This is especially challenging s i n c e t h e m a r i t i m e a r e n a i s characterized by dozens of small to medium targets thatare hard to detect and difficult to classify and identify. The final challenge is finding a way to secure the detection, command, control and communication systems from electronic warfare manipulation a n d c y b e r - a t t a c k s a n d e x p l o i t operations. 4 The New Ports Challenge The new terminals that are being built in the Haifa and Ashdod ports will be able to handle large ships. The depth of the water in these terminals is meant to be 17.3 meters, the turning radius will be about 600 meters and the length of the piers will be 750-800 meters. The first challenge of the new terminals is that on the one hand, the new terminals, especially in Haifa, will allow bigger ships to download and

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EXCLUSIVE COLUMN upload their cargo and thus will significantly increase the amount of maritime commerce to Israel. But on the other hand, these terminals threaten to shift a not-insignificant share of container traffic away from the Haifa and Ashdod port companies. The administrations of these port companies are concerned, and rightly so, and each of them is strategizing as the day approaches when the new terminals will go into operation. It can be assumed that once the new terminals become operational, the container traffic of the Ashdod and Haifa port companies will be reduced, in view of the better conditions at the new terminals (depth, size of ships, etc.) and the fact that the terminals are closely connected to the shipping companies. It can also be assumed that the level of service / reliability / efficiency will be superior to that of the government port companies. This is essentially the main challenge facing the Ashdod and Haifa port companies. The company that most successfully reorganizes in preparation for the new era of competition will be the one that survives and flourishes. The second major challenge is the fact that the new port terminals will be operated by foreign companies, especially the north ports which will be operated by the Chinese SIPG company. In recent months there have been calls from Israeli senior officials and the media, which raised economical and security concerns over the Chinese t a k e - o v e r o f I s r a e l i fi r m s a n d especially from the Chinese port operation. These concerns were raised also from the USA, which is concern that the Chinese will be able to spy on US Navy ships which regularly visit the existing neighboring Haifa port to the south. At an academic seminar at Haifa University in August, US Admiral (Retired) Gary Roughead, who served as the US Navy's 29th Chief of Naval Operations and today a research Fellow at the Hoover Institute, warned that the Chinese can use civilian

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infrastructures for military purposes and that this is a matter that should "concern both Israel and the US."3 Regarding the foreign port terminal operators and the cybersecurity issues, it is clear that diﬀerent types of information systems from the new terminals' operators should be integrated with the national information systems (such as customs and national terminal operating systems, which integrate all Israel's ports information). This integration between systems via internet lines imposes a real cyber threat that should be taken care of in advance.

economical perspective, and from another point of view create intelligence threats to Israel and its allies in the port of Haifa. The third and last point of view is the necessity to integrate new and foreign information systems to national information systems, and the cyber threat this imposes.

Conclusion Israel has a relatively short shoreline (but very crowded) and large EEZ. Israel's dependency on maritime resources is signiﬁcant. Most of Israel's electricity, energy, food, drinking water, lines of communication and most of national commerce depend on the sea and on sea resources. The sea lines of commerce to Israel go to three main ports which Israel depends on. In the prospective of enlarging the maritime commerce Israel started to build two new ports terminals, in the south and in the north part of Israel. The existing ports in Israel and the new ports are highly sophisticated, integrated and operated by many computerized systems. The development of Israel's ports and their digitization, along with the strategic situation at the Mediterranean arena, impose four main challenges on Israel port's development: A Security challenges for the Israeli navy and the IDF, for defending the maritime assets mainly against terror acts. B Cybersecurity challenges for defending the information systems and operational systems (such as cranes) from cyberattacks, which can be preform by diﬀerent forms and type of adversaries. C Maritime domain awareness challenges in order to build a real-time and accurate maritime picture along the Israeli shore line and at the EEZ area. D The challengeraised by ports' foreign shareholders, which from onepoint of view threaten the other ports in the

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EXCLUSIVE COLUMN

CLAIMS HANDELING BY OWNER/SHIP MANAGER 2.3.1 Perils (Institute Time Clauses, Hulls, 1.10.83) The perils covered in the Clause 6 of the Institute Time Clauses (HULLS) 1.10.83 fall into two sections. Clause 6.1 covers the following: 6.11 Perils of the seas, rivers, lakes or other navigable waters. (These obviously cover groundings, collisions, heavy weather, contacts. In most cases, it is clear what is a peril of the sea and what is not. However, take the example of cracked shell plating from an ageing but not necessarily old bulker in moderately heavy weather. Is the cause of the loss heavy weather, peril of the sea, latent defect, or is it ordinary wear and tear because of a certain amount of wastage? 6.1.2 Fire explosion. (Little comment required.) 6.1.3 Violent theft by a person from outside the vessel. (As opposed to clandestine theft or pilferage which is not covered.) 6.1.4 Jettison. (No comment.) 6.15 Piracy. (Although piracy is on the increase, it does not lead to many claims because cash and valuables seem to be the current target of the pirated and the claim may not exceed the policy deductible.) 6.1.6. Breakdown of or accident to nuclear installations or reactors. (These perils do not require further comments) 6.1.7 Contact with aircraft or similar objects, or objects falling therefore, land conveyance, dock or harbour equipment or installation. 6.1.8 Earthquake volcanic eruption or lightning. Clause 6.2 covers loss of or damage to the subject matter insured caused by: 6.2.1 Accident in loading, discharging or shifting cargo or fuel. (This is self-explanatory.) 6.2.2 Bursting of boilers, breakage of shafts or any latent defect in the machinery or hull.

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Subrat Kulshrestha BH Legal Ease Consultants Advocates and Solicitors

( it is important to note that this only covers damage caused by these items. Therefore it would be dangerous to agree that the cause of damage was latent defect in a crankshaft since only the consequential damage on the crankshaft would be paid for by the Hull Insurers not the crankshaft itself.) 6.2.3 Negligence of master, officers, crew or pilots. ( A simple definition of negligence could be an omission to do something that they ought not to do. The bulk of machinery damage claims are recoverable under this section of the policy. 6.2.4 Negligence of repairers or Charterers provided such repairers or Charterers are not an Assured hereunder. 6.2.5 Barratry of master, officers or crew. (Barratry is a wrongful act wilfully committed by the master or crew to the prejudice of the Owners) Under 1.11.95 Clauses, there has been some re-ordering of the perils, for instance, Clause 6.1.6 has been removed. Clause

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EXCLUSIVE COLUMN 6.1.7 now includes contact with helicopters, and has been moved to section 6.2 . However, the overall eﬀect of these changes is very minor. 2.3.2 Additional Perils Clause A wide cover which a available to Owners at an increased premium and may only be granted to vessels of a certain age / condition. This replaces Clause 6 of the Institute Time Clauses (Hulls 1.10.83. Clause 1.1 Cover the cost of replacing and replacing: 1.1.1 Any boiler which bursts or shaft which breaks. (This is self-explanatory and provides wider cover then the standard Institute Time Clauses (Hulls 1.10.83) 1.1.2 Any defective part which has caused loss or damage to the vessel covered by 6.2.2 of Institute Time Clauses. (This Particularly covers a latent defective part where you can only claim consequential damage on the basic Clauses.) Clause 1.2 Covers loss or damage to the vessel caused by any accident or by negligence, incompetence or error of judgment of any person whatsoever. (This is the most important additional cover given by the Clause. It is a much wider cover and you only need show was caused by an accident or by negligence etc. You would not have to establish the cause of the accident.) Clause 2 states “Except as provided in 1.1.1 and 1.1.2, nothing in these Additional perils clauses shall allow any claim for the cost of repairing or replacing any part found to be defective as a result of a fault or error in design or construction and which has not caused loss of or damage to the vessel.” (This is designed to cover the situation that occurred in the late 1970's with StoorWerkspoor bedplates damage where, though a design weakness, damage to bedplates occurred initially causing consequential damage. These claims were paid by Hull Insurers under the Liner Negligence Clause [now replaced by the Additional Perlis Clause]. However a number of similar engines were opened up for precautionary inspections and cracks were found which had not caused damage to the vessel. Insurers disputed that they were liable to pay for them since there was no consequential damage and they were not liable to pay for the remedying of the design. Therefore, under this Clause, you have to ﬁnd some consequential damage, however, minute.)

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NEWS

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NEWS

Freight rates for US Gulf Coast-loading VLCCs spiked 24% on the day Friday as position lists continued to tighten over the week after US sanctions were imposed on two affiliates of major Chinese shipowner COSCO Shipping Co., leaving charterers scrambling to secure ships for second decade November cargoes. The cost of taking a VLCC on the 270,000 mt USGC-China route was assessed at lump sum $13 million, up $2.5 million, or 24% day on day, as the market looked at an Occidental Petroleum fixture, wherein they booked the Maran Andromeda with an option for the Maran Capricorn for an Ingleside-Ningbo voyage, loading November 15-20. Freight for the route has increased almost 53% since September 25, the day before the sanctions. A number of charterers entered the market looking for a VLCC to make the long-haul voyage east late Thursday, when there were only 2-3 VLCCs in place to cover first-decade November cargoes out of the USGC, a shipbroker said. US crude exports are not expected to slow following the spike in freight rates as global firmness will prevent Asian-crude buyers from purchasing in other regions, according to S&P Global Platts Analytics. The market is expected to adjust to the higher freight costs to keep the flow of crude moving out of the

VLCC USGC China freight up 24% on day, up 53% since COSCO sanctions

USGC. Rate levels for key global VLCC markets showed similar upward movements, with 270,000 Persian Gulf-China freight moving up to w102 and the 260,000 mt West Africa-China route up to w115, up w5 and w20, respectively. The VLCC market has seen a number of supply-draining events ahead of the COSCO sanctions, including attacks on Saudi oil infrastructure, US sanctions on Iranian-origin crude, and IMO 2020 preparations. Although not all COSCO-owned ships are impacted by the sanctions, charterers have been keen on steering clear of utilizing any of the shipownerʼs 40-45 VLCCs. There were four other VLCCs booked out of the USGC for discharge in China or South Korea late Thursday and early Friday. Hyundai Oilbank placed new-build VLCC, Agios Nikolas on subjects at $12.3 million for a two-port load at East Coast Mexico and the USGC on November 13-17, discharging in South Korea. The ship was taken at an immense discount to typical market levels due to the ship embarking on its maiden voyage, shipping sources said. Equinor and SK Energy booked VLCCs for USGC-South Korea runs, with Equinor taking the Qamran at $12 million for a November 15-20 laycan, while SK replaced the Maxim with the Paciﬁc M for November 10-14 dates at $12.35 million. Phillips 66 jumpstarted the rate rally, booking the Syfnos, an older ship, for a USGC-China run at lump sum $11.9 million, loading November 15-20.

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NEWS

Attaining Carbon-Neutral Shipping is a Herculean Task Lim, secretary-general of global shipping regulator the International Maritime Organization, said in an interview last month. “Itʼs not going to be easy, but it has to be done.” Maritime shipping is the backbone of world trade. Ships move the worldʼs commodities like oil, iron ore and grains and the vast majority of manufactured goods, including cars, home appliances, clothing and food. But they also collectively contribute up to 3% of global pollution, an amount comparable to major emitting countries. To comply with the 2015 Paris climate accord, IMO members have agreed to improve fuel eﬃciency by 30% by 2025 and pledged to slash greenhouse-gas emissions by half by 2050 from 2008 levels. That eﬀort is starting to reset the fundamentals of how ships get their power, but time is short. Ships have a 25-year lifespan so any new orders over the

another form of alternate fuel for propulsion.

The international shipping industry has committed to

“We donʼt have the answers yet,” said Søren Toft, chief

nyone buying ships over the next few years

will have to think green.

next decade will have to be for vessels with new designs that will use biofuels, ammonia, hydrogen, batteries or

lower greenhouse-gas emissions by half come 2050,

operating oﬃcer of Denmarkʼs A.P. Moller-Maersk A/S,

but there is a big catch. Neither the engines nor the

the worldʼs biggest container ship operator. “It can only be

fuels are there to back the ambitious target, and tens

done if we go to a diﬀerent propulsion, a diﬀerent energy

of billions of dollars must be invested as stricter

source.”

emissions rules kick in. There is almost unanimous agreement that ships,

For now, shipowners are preoccupied with a more immediate task.

which have burned heavy oil, the most polluting propulsion bunker fuel, since they switched from coal

Starting Jan. 1, 2020, some 60,000 ocean-going ships will

in the early 20th century, must clean up. But nobody

be obliged to cut their sulfur emissions by more than 80%.

is quite sure how it can be done.

Many are preparing to switch to new low-sulfur fuel, a

“The impact on shipping in terms of cost to protect the

billion in costs over the next three to four years.

move that industry executives say will add some $50

environment will be the biggest in history,” Kitack

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NEWS Freight rates to ship U.S. crude to Asia continued to surge,

“What is happening (in the USGC tanker market) is a

with costs to charter a supertanker rising to a record $12

combination of the attacks on Saudi because they lost oil

million on Thursday, shipping sources familiar with the

(capacity) and so for the last couple of weeks you have fewer

matter said.

vessels that were ﬁxed (from Saudi) to discharge in the USG (US Gulf Coast),” said Ashok Sharma, managing director of

South Koreaʼs top reﬁner, SK Energy, tentatively chartered

shipbroker BRS Baxi in Singapore.

the supertanker Maxim to ship U.S. crude to South Korea in November for a record $10 million earlier in the week but

Separately, Phillips 66 provisionally chartered the Very

that ﬁxture has since failed, the sources said.

Large Crude Carrier (VLCC) Syfnos to ship U.S. crude to China, two sources said. Phillips 66 also chartered the

The company now has conditionally booked the Paciﬁc M at

Landbridge Glory to ship U.S. crude to South Korea in early

a new record of $12.35 million, according to two shipping

November for $10.4 million, according to a source and

sources and Reﬁnitiv Eikon shipping data.

Reﬁnitiv shipping data.

The United States last week imposed sanctions on two units

SK could not be reached for comment. Phillips 66 declined to

of Chinaʼs COSCO, alleging involvement in ferrying crude out

comment, citing competitive sensitivities.

of Iran. That sent tanker rates surging and prompted U.S. Gulf Coast exporters to hold back chartering COSCO-linked vessels, traders and shipbrokers said.

U.S. crude exports have surged since a decades-long ban was lifted in late 2015. The exports rose to an average 2.9 million barrels per day (bpd) in the ﬁrst half of 2019, according to

Tanker rates had already started to climb after attacks on

the U.S. Energy Information Administration.

Saudi Arabiaʼs oil facilities last month that temporarily cut

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Rates surpass $12 mln after U.S. sanctions on Chinese ﬁrm

The top regional destination for U.S. crude oil was Asia and Oceania at 1.3 million bpd in the ﬁrst half of 2019.

OIL TANKER

Saudi oil production by more than 5 million bpd, or about half the countryʼs output.

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Clean tanker owners chase dirty product opportunities for higher margins

Dry bulk short period ﬁxtures dry up as IMO 2020 looms

ong range clean tanker owners West of Suez are opting to load dirty petroleum products onto their vessels as they seek strong arbitrage opportunities in a market rising sharply in various basins in contrast to the relatively stifled clean tanker market of recent months. Shipowners in the clean tanker market have observed the sharp uptick in freight rates for dirty vessels, as continued tightness for Aframax vessels in particular has allowed owners to hold a strong position in commanding firmer indications in recent weeks. The La Boheme, an LR1 vessel, was reported by sources to be on subjects for a Denmark to Singapore shipment basis 60,000 mt at a lump sum of $2.5 million. The vessel will carry fuel oil. By comparison, the latest indications for LR2 tankers for Continent-Japan shipments basis 80,000 mt were heard at the same level. In another instance, the LR2 vessel Clearocean Apollon was heard on subjects for an Amsterdam-Rotterdam-Antwerp to Persian Gulf shipment carrying dirty products at a lump sum of $2.29 million, having previously carried diesel, S&P Global Platts trade flow software cFlow showed. LR owners have assessed the feasibility of converting to dirty products and highlight the sharp upturn in Aframax freight rates in the North Sea as a marker for the higher profit margins that could be made carrying dirty rather than clean. One broker suggested a lump sum of up to $4.5 million could be made for an LR2 loading in US Gulf to ship to China, compared with $2.5 million carrying clean products, equating to a $2 million profit. “There are more and more people looking at this, both on the Continent and in the US as there are some real profits to be made if you convert,” a broker said. The near-term implications in both clean and dirty markets, should a higher frequency of owners choose to convert to the clean market, is the reduced tonnage availability for LR1s and 2s and the added tonnage for Aframaxes. The UKC-UKC 80,000 mt freight rate was last assessed at $11.86/mt Tuesday, its highest since December 28 and up 94% since the 2019 low of $6.10/mt on April 8. “Weʼve waited a long time to see clean tankers switch to dirty and now the conditions are met,” said an Oslo-based Suezmax tanker broker.

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Short period (3-5 months) and two-ladenleg fixtures have dried up in the Atlantic dry bulk markets, as shipowners seek to minimize risk ahead of the January 1 implementation date of the IMO 2020 sulfur regulations. According to shipbroker sources, owners are reluctant to fix dry bulk ships on time charter for less than one year, or for twoladen legs trips that require redelivery close to the new year. “Itʼs almost impossible to get owners to consider two-three laden legs right now, as they are afraid to get their vessels back in Q1,” said one shipbroker source. “[Shipowners] are so uncertain with the new regulations in 2020.” However, some shipowners disputed this reluctance as an oversimplification, while conceding that Q1 weighs on ownersʼ minds. Two dry bulk shipowner sources confirmed a preference for longer period fixtures (one year), to avoid the “double whammy” of IMO 2020 and uncertain Q1 rates. “Q1 is terra incognita with 2020 coming up,” said one shipowner source. “Between the IMO regulations, the [US-China] trade war, uncertainty in the Middle East, and environmental problems, next year is a real hard poker game.”

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NEWS US sanctions on Chinaʼs shipping company hit Asian LNG trade flows, spot freight rates US sanctions on Chinese state-owned company COSCO Dalian Tanker Shipping are threatening to disrupt long-term trade flows from Malaysia, Indonesia and Australia to the worldʼs second largest LNG importer, and raising prompt charter demand and freight rates. Several vessels delivering LNG as part of long-term contracts from Indonesiaʼs Tangguh, Malaysiaʼs Bintulu and Australiaʼs North West Shelf, worth nearly 9 million mt/year of LNG, to state-owned CNOOCʼs LNG terminals in China are impacted by the sanctions, according to sources close to COSCO Dalian, and S&P Global Platts ship tracking software Flow. This has resulted in a spike in prompt shipping demand and freight rates, with Platts Asia Pacific LNG shipping rates rising to $88,000/day Wednesday, up 12.8% from $78,000/day Tuesday, while Chinese sources pointed to further upward pressure on freight costs. “Freight rates for LNG vessels have now gone up to around $100,000/day, double from around $50,000/day before the sanctions,” said a source with one of the charterers. “We have not decided whether to replace these vessels or buy additional spot cargoes from the market to meet our requirement,” the source said, adding that they are still in talks with COSCO Dalian on how to minimize the impact of the sanctions. Three of the COSCO Dalian-owned LNG tankers impacted by the sanctions ̶ Dapeng Sun, Dapeng Moon and Dapeng Star ̶ deliver term volumes from Australiaʼs NWS to CNOOCʼs Guangdong Dapeng LNG terminal, according to cFlow. LNG trading sources said another two LNG vessels ̶ Min Rong and Min Lu ̶ delivering term Tangguh LNG volumes to CNOOC have been rejected because of the sanctions, while a sixth vessel, Shen Hai, delivering Bintulu LNG term volumes to CNOOCʼS Yangshan terminal, has also been impacted.

Baltic index hits two-week high as vessel activity picks up

he Baltic Exchangeʼs main sea freight index, which tracks rates for ships ferrying dry bulk commodities, hit a two-week high on Thursday, as vessel rates across the board continued to strengthen. The Baltic index, which reflects rates for capesize, panamax and supramax vessels, gained 56 points, or 3%, to 1,929, highest since Sept. 26. The index is up for the fifth straight session. The capesize index jumped 111 points, or 3.5%, to 3,319, rising for a third straight session. The average daily earnings for capesizes, which typically transport 170,000-180,000 tonne cargoes such as iron ore and coal, increased by $1,049 to $26,647. D e s p i t e w e a t h e r a n d m a i n t e n a n c e disruptions, coal and iron ore flows in the Pacific are clearly up, which is the “brightest spot” for the capesize segment, shipbroker Fearnleys said in a note on Wednesday. The panamax index climbed for a fifth straight session, up 47 points, or 2.5%, at 1,899. Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 tonnes to 70,000 tonnes, rose $380 to $15,220. The supramax index rose 7 points to 1,211.

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But only around 1 percent of the worldʼs crude oil exports are heavy and sweet varieties, ideal for refining into Low-Sulphur Fuel Oil (LSFO), with West Africa providing the lionʼs share. Price offerings for Angolan Cabinda, Nigerian Forcados and Congolese Djeno ̶ all relatively heavy and sweet ̶ reached all-time highs in recent weeks, but retreated downward again due to the new costs of shipping it as far as markets in East Asia. “It just didnʼt make economic sense,” said one East Asian buyer. “Demand has been there but with freight suddenly up that high, the prices canʼt be justified and the cargoes wonʼt sell until theyʼre brought down again.”

U.S. shipping sanctions deal blow to oil sought for new eco-rules

ighly sought after types of oil best suited to making cleaner shipping fuel are suddenly finding they are a tougher sell for thirsty East Asian markets, traders say, in an unintended consequence of U.S. sanctions on a Chinese shipping fleet. With just over two months until environmental rules are set to mandate the biggest changes to ship power in over a century, certain rare types of West African oil have soared in value but have had to be marked down due to the higher costs of transport. The United States imposed sanctions on units of Chinaʼs COSCO on Sept. 25 for allegedly ferrying crude out of Iran, putting its vast fleet of oil supertankers off-limits for international companies and sending freight rates soaring. The high prices are being shouldered by buyers especially in East Asia, several traders said, and are making the purchase of oil from key far-away export regions like West Africa less attractive just when production of the new fuels should ramp up. “West African (oil) grades are commanding such a high premium as they are they are requisite feedstock for low-sulphur fuel oil (LSFO) barrels,” said Matt Stanley, oil broker at StarFuels in Dubai. “With the advent of IMO 2020 it is now time for these previously less fashionable grades to shine and for others to become weaker”, he added. The International Maritime Organization (IMO) rules effective on Jan. 1, 2020, require ships worldwide to use fuel with a maximum 0.5% sulphur content, in the biggest maritime fuel transition since ships moved from burning coal to oil.

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Flows to East Asia from the top heavy sweet oil exporters Angola, Chad and Cameroon were already down in September to near their lowest monthly levels in years partly due to the sky-high prices, traders said. While there is no indication that the ability of refiners to supply the market with compliant fuels has been undercut by the price pain and lower exports, reserves are not vast. “The issue is that with 4-7 million t o n n e s o f L S F O i n t h e G r e a t e r Singapore area, that is not a huge amount of supply,” said Alan Gelder Vice President Refining, Chemicals and Oil Markets at Energy consultancy Wood Mackenzie. “Itʼs probably around the level of several weeksʼ worth.” Not all sellers are suffering, however, as traders said Australiaʼs Santos far closer to Asia sold a cargo of heavy sweet Van Gogh oil late last week at around $13 a barrel above dated Brent, traders said, up strongly from about $8 last month.

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More oil traders, vessel operators shun links to Venezuelaʼs oil

ore vessel operators and energy firms are shunning Venezuelan oil and the tankers that have carried it, according to brokers and traders familiar with the matter. Unipec, the trading arm of Chinaʼs Sinopec, Swiss trader Trafigura AG, oil firm Equinor ASA, Exxon Mobil Corp and others are shunning contracts or vessels that might put them in jeopardy of violating U.S. sanctions on Venezuela, according to sources and documents. The United States in early August ratcheted up sanctions on Venezuela, adding measures that could punish non-U.S. firms, in efforts to squeeze President Nicolas Maduro, whose 2018 re-election is not considered legitimate by the Trump administration and most Western nations. Unipec revised its contracts afterward to stipulate vessels it charters have not called at a port in Venezuela in the past year, according to a copy of the clause viewed by Reuters. Unipec is one of the main Chinese lifters of U.S. crude. Neither Unipec nor Sinopec could immediately be reached for comment. Trafigura has not changed its contract clauses, but it has instructed its traders to do “zero business with Venezuela, not directly or indirectly,” one broker doing business with the company said.

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Trafigura declined to comment. Equinor declined to comment, but said in an emailed statement it “follows all relevant sanctions applicable to us.” Exxon revised its charter contract to bar tankers that have recently gone to Venezuela, according to a contract revision that brokers received last week. Exxon declined to comment. Exxon and Unipecʼs new clauses affect about 250 tankers, according to people familiar with the matter. The blacklisting has more than doubled freight rates for very large crude carriers routes to Asia to a record $14 million in less than a month. More than 25 foreign vessels touch Venezuelan ports per month, according to PDVSAʼs and Refinitiv Eikon data. PDVSA did not respond to a request for comment on the vessel blacklisting. Many shipping firms that were sending vessels to Venezuela after the first round of U.S. sanctions in January are no longer calling at the countryʼs ports or carrying Venezuelan oil, maritime sources said, reducing the availability of tankers for exports and adding to fast accumulation of unsold oil stocks, which forced PDVSA to cut back output last month.

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comment and didnʼt answer calls from Bloomberg.

Shipping Costs Are Soaring as LNG Vessels Drop Out of Service

he cost of chartering a liqueﬁed natural gas vessel on the shortterm market has jumped the most since at least 2013.

The day rate for a standard tanker East of the Suez Canal jumped 57% in the week to Oct. 9, as issues related to U.S. sanctions on units of Chinaʼs COSCO Shipping Corp. start to hit just as the heating season begins to boost demand. That comes on top of other factors limiting the number of ships available, including Typhoon Hagibis in Japan, the biggest buyer of the fuel, and the stockpiling of fuel on tankers. The skyrocketing rates, which have more than doubled in less than a month, show how U.S. sanctions on units of Chinaʼs largest shipper are impacting global trade flows, having already fueled steep increases in oil tanker rates. China plans to ask the U.S. to lift sanctions on the shipper at high-level trade negotiations in Washington this week. “It is a super tight market at the moment,” a spokesman at LNG tanker owner GasLog Ltd. said by phone. “We donʼt know whether the COSCO sanctions will have a meaningful impact on the LNG shipping market, but it is influencing sentiment.” Benchmark LNG spot shipping rates east of the Suez Canal jumped to $130,000 a day on Oct. 9, according to Fearnleys in London. Spark Commodities Pte Ltd., a venture between commodity tracking company Kpler SAS and the European Energy Exchange, puts the rate at $133,200. China National Offshore Oil Corp. is seeking two cargoes for prompt delivery to its Dapeng terminal because of the sanctions, according to traders with knowledge of the matter. The company didnʼt immediately respond to a request for comment. Woodside Petroleum Ltd.ʼs North West Shelf LNG venture in Australia wouldnʼt load two tankers that were meant to deliver cargoes for CNOOC because the vessels are owned by a unit of COSCO, according to the traders. The Dapeng Moon, Dapeng Sun and Dapeng Star are anchored near the terminal or off the coasts of China, according to ship-tracking data compiled by Bloomberg. A Woodside spokesman declined to comment on specific loadings, and said the company is aware of the sanctions and will comply with all legal obligations. COSCO Shipping didnʼt respond to an email seeking

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The Tangguh project in Indonesia and Bintulu in Malaysia also wouldnʼt load COSCO-owned vessels meant for CNOOC, according to a person with knowledge of the matter. CNOOC uses two COSCO vessels to transport gas from Tangguh ̶ Min Rong and Min Lu ̶ and one ̶ Shen Hai ̶ from Bintulu. All three are currently anchored, according to ship-tracking data. Five specialized ice-class vessels for Russiaʼs Yamal LNG project in the Arctic, chartered from a joint venture between COSCO unit China LNG Shipping (Holdings) Ltd. and Teekay Corp., are still on routes serving the project normally, according to ship-tracking data. Novatek PJSC, the majority shareholder of Yamal LNG, has said it has tanker capability via transshipments to fully meet its obligations should the sanctions drag on, and that it hopes the issue around sanctions will get resolved quickly. The sanctions, imposed on two COSCO shipping units last month due to alleged shipments of Iranian crude oil, came just as the stockpiling rush intensiﬁed in anticipation of higher fuel prices in the winter and price incentives to hold onto cargoes. Higher forward gas prices, known as contango, mean some LNG ships are taking long voyages and diverting to avoid quick deliveries. That absorbs vessel capacity from the spot market, which is already being aﬀected by a surge in LNG production from the U.S. “We have been predicting for some time that the 2019-2020 winter would be a structurally short LNG shipping market. Thatʼs driven primarily by the increasing supply coming out of the U.S. this year,” the GasLog spokesman said. “High European gas inventories are also leading to vessels either slow steaming or tankers idling around European terminals, exacerbating the tightness in the spot market.” Weather is also playing a role. Typhoons shut a receiving terminal in China and may cause delays in Japan, according to Per Christian Fett, director of the LNG unit of shipping data provider Fearnleys A/S. “When you canʼt discharge because of the weather then you canʼt return the vessel to load,” he said.

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Addressing invasive species in shipsʼ ballast water - treaty amendments enter into force

h e B W M C o n v e n t i o n a m e n d m e n t s formalizing the implementation schedule for the D-2 standard are now in force.

Amendments to an international treaty aimed at preventing the spread of potentially invasive species in ships' ballast water entered into force on 13 October 2019. Ships regularly take on sea water, in tanks, to ensure their stability. Known as ballast water, this can contain many aquatic species, including in microscopic or larval form. These can become invasive and harmful if the ballast water is released, unmanaged, in a new location at the end of an ocean voyage. The International Convention for the Control and Management of Ships' Ballast Water and Sediments, 2004 (the BWM Convention) was a d o p t e d b y t h e I n t e r n a t i o n a l M a r i t i m e Organization (IMO), a specialized agency of the United Nations, to address this problem. The BWM Convention entered into force in 2017. The amendments formalise an implementation schedule to ensure ships manage their ballast water to meet a speciﬁed standard ("D-2 standard" - see below) aimed at ensuring that viable organisms are not released into new sea areas, and make mandatory the Code for Approval of Ballast Water Management Systems, which sets out how ballast water management systems used to achieve the D2 standard have to be assessed and approved. This will help ensure that aquatic organisms and pathogens are removed or rendered harmless before the ballast water is released into a new location ‒ and avoid the spread of invasive species as well as potentially harmful pathogens. The amendments to the BWM Convention were adopted in April 2018. In essence, the schedule for implementation means that compliance with the D2 standard set out in the Convention will be phased-in over time for individual ships, up to 8 September 2024. Over time, more and more ships will be compliant with the D-2 standard. (See the infographic). In many cases, meeting the D-2 standard will be a c h i e v e d t h r o u g h ﬁ t t i n g b a l l a s t w a t e r management systems. There are now many such approved systems on the market, ranging from those which use physical methods such as

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ultraviolet light to treat the ballast water, to those using active substances (chemicals). Those that use active substances have to go through a thorough additional approval process. (A list of approved systems can be found here.) Other amendments to the BWM Convention entering into force on 13 October 2019 relate to survey and certification. The BWM Convention - D-2 standard The D-2 standard specifies that ships can only discharge ballast water that meets the following criteria: less than 10 viable organisms per cubic metre which are greater than or equal to 50 micrometres in minimum dimension; less than 10 viable organisms per millilitre which are between 10 micrometres and 50 micrometres in minimum dimension; less than 1 colony-forming unit (cfu) per 100 millilitres of Toxicogenic Vibrio cholerae; less than 250 cfu per 100 millilitres of Escherichia coli; and less than 100 cfu per 100 millilitres of Intestinal Enterococci. The BWM Convention and the SDGs Implementation of the Ballast Water Management Convention contributes to achieving a number of the United Nations Sustainable Development Goals (SDGs), in particular, SDG 14 on life below water, which calls for sustainable use of the oceans; and SDG 15, which includes targets relating to biodiversity and curtailing the spread of invasive species. The BWM Convention requirements Since the Convention entered into force in September 2017, ships have been required to manage their ballast water to avoid the transfer of potentially invasive aquatic species. All ships must have a ship-specific ballast water management plan and keep a ballast water record book. Ships are also required to manage their ballast water to meet either the D-1 ballast water exchange standard or the D-2 performance standard. The amendments in force from 13 October 2019 formalise the implementation schedule for the transition from the D-1 to the D-2 standard.

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In line with Governmentʼs focus on improving connectivity to the North Eastern Region (NER), a landmark container cargo consignment will sail on inland waterways from Haldia Dock Complex (HDC) to the Inland Waterways Authority of India (IWAI) terminal at Pandu in Guwahati on 4 November, 2019. Shri Gopal Krishna, Secretary (Shipping) will flag off the inland vessel MV Maheshwari carrying 53 TEUs (containers) of petrochemicals, edible oil and beverage etc. The 12-15 days voyage will be an integrated IWT movement via National Waterway-1 (river Ganga), NW-97 (Sunderbans), Indo-Bangladesh Protocol (IBP) route and NW-2 (river Brahmaputra). This is the first ever containerised cargo movement on this Inland Water Transport (IWT) route. The 1425 km long movement is expected to establish the technical and commercial viability of IWT mode using these multiple waterways even as a series of pilot movements are planned on the stretch. The latest IWT movement is aimed at providing a fillip to North East Regionʼs industrial development by opening up an alternate route for transportation of raw material and finished goods. Taking ahead the Government's vision of promoting IWT, the first consignment of containerized cargo on National Waterway-1 (Ganga-Bhagirathi-Hooghly river system) was received by the Prime Minister on 12 November 2018 when he dedicated to the nation, the Multi Modal Terminal at Varanasi. IWT on NW-1 has witnessed healthy growth with the augmentation of navigation capacity of Ganga under Jal Marg Vikas Project . The traffic on NW-1 has grown from 5.48 million tonne in 2017-18 to 6.79 million tonne in 201819. Out of the total traffic of 6.79 million tonne on NW-1, approximately 3.15 million tonne is the EXIM trade between India and Bangladesh using the Indo Bangladesh Protocol (IBP) routes.

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The Protocol on Inland Water Transit and Trade (PIWTT) between India and Bangladesh allows mutually beneďŹ cial arrangements for the use of their waterways for movement of goods between the two countries by vessels of both countries. The IBP route extends from Kolkata (India) on NW-1 to Silghat (Assam) on NW-2 (River Brahmaputra) and Karimganj (Assam) on NW-16 (River Barak).Two stretches of Bangladesh inland waterways viz. Sirajganjâ&#x20AC;&#x2019;Daikhawa & Ashuganj-Zakiganj on the IBP route are being developed at a total cost of Rs 305.84 Cr. on 80:20 cost sharing basis (80% being borne by India & 20% by Bangladesh). The development of these two stretches is expected to provide seamless navigation to and from North East India through waterways via the IBP route. The contracts for dredging on the two stretches have been awarded for achieving and maintaining requisite depth . In addition to the above, India and Bangladesh have taken major steps to enhance utilization of waterways in the recent past. These include agreement on declaration of additional Ports of Call under PIWT&T at Kolaghat, Dhulian, Maia, Sonamura in India, and Chilmari, Rajshahi, Sultanganj, Daukhandi in Bangladesh. Both countries have also agreed on the following:i. Badarpur as an extended port of call of Karimganj (Assam, India) and Ghorasal of Ashuganj in Bangladesh. ii. Tribeni as an extended port of call of Kolkata, India and Muktarpur of Pangaon in Bangladesh. iii. Protocol route no.5 & 6 i.e. Rajshahi-Godagari- Dhulian to be extended upto Aricha (Bangladesh). iv. Inclusion of Daudkhandi-Sonamura stretch on Gumti river as new route no. 9 & 10. An SOP to facilitate the movement of goods to and from India through Chattogram and Mongla Ports in Bangladesh has been signed by the two countries on 5th October 2019. The proximity of these two ports will reduce logistics cost and improve trade competitiveness of North East states

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Mansukh Mandaviya inaugurates Ease of Doing BusinessImplementation of RFID based Port Access Control System at Kolkata Dock System. 88 CCTV cameras installed at Bascule Bridge, Swing Bridge and entire Rabindra Setu and sensitive areas of KPD/NSD gates and yards. Shri Mansukh Mandaviya, Minister of State (Independent Charge) for Shipping and Chemicals and Fertilizers held a review meeting with the officials of Kolkata Port Trust (KoPT) here today. The Minister inaugurated Ease of Doing BusinessImplementation of Radio Frequency Identification (RFID) based Port Access Control System (PACS) at Kolkata Dock System (KDS). Shri Mandaviya also inaugurated CCTV operations at KDS, Rabindra Setu (Howrah Bridge) and dedicated 3 Truck Parking Terminals at KDS. As part of Green Wall Project, the Minister planted a sapling in the premises of KoPT. The Minister also inspected CCTV control room and inaugurated Riverfront Tourism Development. He encouraged KoPT to promote river front tourism in Kolkata. On this occasion, Shri Mandaviya stated that cities with ports are very important as they create jobs and bring transport synergy. He congratulated KoPT for serving the Nation for 149 years and suggested to celebrate 150 years of KoPT. He also confirmed that PM has agreed to participate in KoPTʼs 150 years celebration. The Minister later visited Maritime Archive and suggested KoPT to upgrade it further to make the new generation aware of

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Maritime history in the country. Shri Mandaviya also gave away Swachhta awards to the employees and complemented the KoPT for the campaign. Congratulating the winners, the Minister said, we must inculcate the habit to make our surroundings including homes and oďŹ&#x192;cers clean and to make the country healthy by stopping single use plastic which has already been banned. He also distributed steel water bottles among the employees and encouraged them to make the country plastic-free. For secure and systematic entry and exit of vehicles and visitors in Kolkata Dock System (NSD and KPD) and for ease of doing business with Port users, the project of RFID-based Port Access Control System (PACS) was undertaken for Kolkata Dock System (Netaji Subhas Dock, NSD and Kidderpore Dock, KPD) at a total cost of around 17 Crore. Under this project, 12 gates of NSD and KPD are equipped with RFID based PACS system. RFID devices have been installed at all gates of NSD and will go live today. All gates of KPD will also go live by 31.10.2019. RFID based Port Access Control System (PACS) will provide single window system to the Port users for obtaining permit/ pass through 100% cashless transaction. The operational eďŹ&#x192;ciency of KDS will also be increased due to system driven gate operation. To ease out road congestion near the port, Kolkata Port has developed 30,000 sq.m of its own land at Sonai, Coal Dock Road and Bhutghat into 3 truck parking terminals at an approximate cost of Rs. 6 crore. These will cater to approximately 400 trucks/trailers.

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Navios Maritime Containers L.P. Well Positioned Into 2020, Says Angeliki Frangou Navios Maritime Containers L.P., a growth vehicle dedicated to the container sector of the maritime industry, today reported its financial results for the third quarter and nine months ended September 30, 2019. Angeliki Frangou, Chairman and Chief Executive Officer, stated, “I am pleased with the results for the third quarter of 2019. Navios Containers reported $37.0 million of revenue, $16.6 million of EBITDA and $4.1 million of net income. Navios Containers also reported earnings per unit of 12 cents.” Angeliki Frangou continued, “We believe that Navios Containers is well-positioned going into 2020. It enjoys materially improved charter rates, with current market rates having increased by almost 70% since the first quarter of 2019. Navios Containers also benefits from fixed operating costs and attractive financing. ”

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CNS ADDRESS -

KEY TAKEAWAYS

AT DRDO DIRECTORS CONFERENCE (Theme: - Navy's Perspective on the 'Way Forward for DRDO') 1. At the outset I on behalf of the Navy wish to acknowledge, the rich contributions of DRDO. ❖ DRDO & the IN have had several success stories born out of a long & close relationship Ÿ Induction of indigenous weapons & sensors Ÿ Joint development success stories Ÿ Large number of projects under various stages of development. ❖ DRDO labs are therefore important for IN to maintain the technological edge which is so crucial in Naval Warfare. 2. When we discuss Warfare, Warfare and Technology are almost synonymous. Warfare is changing at rapid pace and is driven mainly by technology. Therefore there is a need to ensure…technologically up-to-date force. And what I have just said is laid down in the DRDO's mission statement. I quote “Provide Defence Services decisive edge by equipping them with internationally competitive systems and solutions” ❖ In pursuit of this mission statement…determining factors…two T's. Time' and Technology'. ❖ Time'…essence of developmental projects. Shorter incubation and execution periods…can help better harness and integrate 'contemporary' technologies that are galloping ahead. ❖ In terms of technology I would like to quote Our Hon'ble Raksha Mantrih as said not so long ago… “When nations go to war, the nation with better technology will win.”

❖ For which there is need for us to leap-frog the technology curve… ❖ I have three recommendations First ❖ Our impetus therefore, in partnership with DRDO is to focus on 'Niche' technologies. In this endeavour…need to engage adequate eﬀorts and funding towards niche technology verticals. ❖ Import substitution…best left to the Private Industry, which has matured substantially. Second ❖ Here I would like to recommend that we take a closer look at the United States…DARPA Model… Ÿ Where a focused Team. Ÿ With adequate Funding. Ÿ Provided the right direction. Ÿ And given strict timelines. Can come up with few breaking innovation for Defence... Third ❖ With India emerging as technological hub we need to encourage small-time Innovators…some of them servicing foreign requirements... ❖ DRDO can support and encourage them… harness strengths of both verticals: Ÿ DRDO…intellectual capital… institutional strength…ﬁnancial capacity… production capability. Ÿ Innovators Ideas, with …speed and agility to meet timelines.

❖ For IN, maintaining the right 'Technology' mix crucial. ❖ Ideally… Ÿ Ÿ Ÿ Ÿ

20% ships…slight vintage technology; 60% … contemporary technology; 20%…State-of-the-art technology beingimbibed. This ratio…ideal…to ensure… change management of technology as we move along.

❖ Here again the DRDO…important role in helping Navy maintain the right mix of force levels. 3. As we look into the future, we in the forces…aim to become a self-reliant force which is technologically empowered…

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4. To Conclude. On our part… Indian Navy is fully committed to Indigenisation and Self Reliance. ❖ Proud of what has been achieved in collaboration with DRDO… ❖ Also we are very lucky…several initiatives taken by GoI which is totally committed to “Make in India”…. ❖ So let us sieze this Golden Opportunity and collaborate closely to give our country a potent Navy that can deliver the punch in a future conﬂict. ❖ Whole-heartedly support DRDO in all initiatives… 5. Thank you…Jai hind!

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Perfecting port management and eﬃciency

n intensive training on port management and operational efficiency was delivered to high-level officials and decisionmakers from maritime and port authorities around the world. The annual five-week course, delivered by the Institut Portuaire dʼEnseignement et de Recherche (IPER), concluded on 11 October in le Havre, France.

The 33rd Advanced Course on Port Operations and Management welcomed 19 participants from 19 countries. Seven of these participants were women. The course includes class-based training and site visits. Lectures were delivered in French and English on a variety of ports matters, including shipping and port economy, port organization, ship call operations and management, port security, port technology and information systems, port works and maintenance, port marketing and port environment. IMO delivered a presentation on getting ports closer to IMO. The Course was sponsored, among others, by IMO, the French port Administration and the Port and Maritime Union of Le Havre. *Algeria, Bangladesh, Burkina Faso, Cameroon, Côte d'Ivoire, Djibouti, Egypt, Equatorial Guinea, Jamaica, Kenya, Madagascar, Mauritania, Mauritius, Morocco, Philippines, Senegal, Somalia, United Republic of Tanzania and Togo.

42 SEA AND COAST

NOVEMBER 2019

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Mexico sets high priority on IMO legal conventions

he maritime authorities of the Government of Mexico have agreed to place a high priority on ratifying three important IMO legal conventions, following a workshop in Mexico City.

Mexico has said it will work towards ratifying the 2003 Fund Protocol, the 2001 Bunkers Convention and the 2007 Nairobi Wreck Removal Convention. It will also consider accession to the 2010 HNS Convention. The Governments of Guatemala and Honduras expressed similar intent. Both the Fund Protocol and the Bunkers Convention deal with compensation following oil spills from ships. Together with the 1992 Civil Liability and Fund Conventions, to which Mexico is already a State Party, they provide a framework to ensure that funds are available to compensate spill victims while, at the same time, establishing limits of liability. The Nairobi Wreck Removal Convention provides the legal basis for States to remove shipwrecks that may put the safety of lives and the marine environment, as well as goods and property at sea, at risk. While all these three measures are in force and therefore legally binding on all countries that have ratified them, the 2010 HNS Convention is not yet in force. Among the criteria that have to be met for this to happen, at least 12 states have to formally ratify it. So, far, just five have done so. The HNS Convention will establish a compensation and liability regime covering accidents involving hazardous and noxious substances. Mexico confirmed its commitment to these measures at the conclusion of a marine environment seminar (4 October) organised by P&I Services Mexico, an insurance organization. Several international organizations, including IMO, were on hand to explain the benefits of ratifying the conventions and offer advice and assistance.

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Safely handling dangerous goods To transport dangerous goods in packaged form and solid bulk by ship safely, a variety of important measures must be applied. These include correct identiﬁcation, classiﬁcation, packaging, labelling, handling, storage, loading, stowage, unloading and transport. These measures are covered by IMOʼs International Maritime Dangerous Goods Code (IMDG) and the International Maritime Solid Bulk Cargo Code (IMSBC) ‒ the subject of an IMO training workshop underway in San José, Costa Rica (7-11 October). The training is enabling participants from a number of Central and South America countries* to improve their understanding of the codes and to improve implementation and good practices in applying the measures. The workshop is organized by IMO in collaboration with Prefectura Naval Argentina, run by IMOʼs Regional partner The Central American Commission of Maritime Transport (COCATRAM) and hosted by the Maritime Authority of Costa Rica. * Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama

44 SEA AND COAST

NOVEMBER 2019

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Glo Fouling ‒ signature event highlights environmental concerns

he GEF-UNDP-IMO GloFouling Partnerships project has concluded its inaugural Research and Development Forum and Exhibition on Biofouling Management, in Melbourne, Australia (1 to 4 October).

Bringing together experts, regulators and industry representatives to discuss the latest advances in research, regulations and technologies related to marine biofouling across all maritime sectors, this is set to become the projectʼs biennial “signature event”. Over 170 participants and 40 speakers took part in a programme (photos) that focused on how biofouling affects different maritime industries, including shipping, aquaculture and ocean renewable energies, and the role it plays in transferring non-indigenous species and pathogens. A session on biofouling regulations and requirements saw discussion among representatives from Australiaʼs Department of Agriculture, New Zealandʼs Ministry of Primary Industries, the US Environment Protection Agency, Transport Canada, the Maritime Authority of Chile and the California State Lands Commission. Other sessions included national perspectives from developing countries, discussions on how vessel biofouling can be a pathway for transmission of pathogens, biofouling risks in the offshore petroleum industry, and the latest research with regard to vessel efficiency and drag penalty due to hull roughness. Participants in an Industry panel chaired by the World Ocean Council highlighted the role that private sector and industry associations should play in the development of regulations. Other key aspects were also considered, such as the barriers for implementing regulations and how the private sector shares the environmental concerns related to the transfer of invasive species. More information on the event can be found on the GloFouling Project website and proceedings will be published in November 2019 in the GloFouling Knowledge hub.

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SEA ETF: IN FOCUS ON SURGING GLOBAL FREIGHT CHARGES Oil tanker rates are on the rise. Per the Clarksons Research Services, rates for very large crude carriers (VLCC) surged from $50,002 to $307,888 per day, up 516% on average. Per a Bloomberg report, importers now have to pay around four times the average for the January-through-August period to ship West African crude to Asia. Moreover, per the same report, tanker owners are making more than $300,000 a day on the industryʼs benchmark route, as of Oct 11. This compares with a monthʼs back earnings of $25,000 a day (read: ETFs That Topped & Flopped Last Week). Letʼs see whatʼs driving the rally in oil tanker prices. Whatʼs Driving the Upside? The rise in oil tanker prices begun after the Trump administration imposed sanctions on certain Chinese tanker companies, including Cosco (Dalian), on Sep 25. The U.S. Oﬃce of Foreign Asset Control (OFAC) has informed that the COSCO parent company has not been sanctioned. It added that those that are included in the sanction list are COSCO Shipping Tanker (Dalian), COSCO Shipping Tanker (Dalian) Seaman & Ship Management, Kunlun Holding Co., China Concord Petroleum, Kunlun Shipping Co. and Pegasus 88. Notably, these sanctions were levied for carrying crude to China from Iran. Moreover, fearing to violate sanctions against Iran and Venezuela, the companies had to avoid using around 300 tankers. Rising Middle East tensions have also been supporting the rising freight charge and are increasing the shipping cost for crude from the Americas, Europe, Africa and the Middle East to Asia. Price of oil tankers started to rise after the drone attacks on Saudi Arabian crude oil facilities. However, the latest incident of an Iranian ship being hit by a missile in the Red Sea has contributed to the rally. The International Maritime Organisation (IMO) 2020 rules requiring shippers to limit sulphur emissions to 0.5% will make it necessary for tankers to be either ﬁtted with the proper equipment or consume the compliant fuel. This is adding to the concern of limited supply of tankers in comparison to the demand and is playing a part in bumping up tanker prices, per a Bloomberg report (read: Oil ETFs in Focus Amid Trade War Blows & Rising US Supply).

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SULPHUR 2020: STAKEHOLDERS PREPARE FOR A SEA CHANGE FROM 1 JANUARY 2020

rom 1 January 2020, sulphur oxide emissions from ships will be reduced considerably under a forthcoming International Maritime Organization (IMO) rule. This will have signiﬁcant beneﬁts for human health and the environment ‒ but also represents a challenge for the industry.

The preparedness of all stakeholders for this significant change - as well as its challenges ‒ were highlighted during a Symposium on IMO 2020 and Alternative Fuels, held at IMO, on Thursday 17 and Friday 18 October. The symposium brought together a range of speakers, including those from Member Governments, as well as from shipping, refineries, fuel oil suppliers and legal professionals. "Collaboration among key stakeholders is essential for the smooth landing of IMO 2020," IMO Secretary-General Kitack Lim said, opening the symposium, which was attended by over 300 delegates. He highlighted the tremendous amount of work undertaken to prepare for IMO 2020 by all stakeholders, since the 2020 date was confirmed in 2016, including a series of guidance and guidelines for shipowners as well as flag and port States. From 1 January 2020, the "IMO 2020" rule means that the limit for sulphur in fuel oil used on board ships operating outside designated emission control areas will be reduced to 0.50% m/m (mass by mass) ‒ while in designated emission control areas (ECAs) the limit will remain at 0.10%. The current limit is 3.50% so the change is significant and - for most ships ‒ will mean a switch to new types of compliant fuel oils, so-called very low sulphur fuel oil (VLSFO), or marine gas/diesel oil. The VLSFO blends are new to the market. Member States speaking at the symposium, including representatives from Denmark, Japan, Marshall Islands and Singapore, said that they were ready as flag and port States to implement and enforce the sulphur 2020 limit. Stakeholder meetings were a feature in many countries, bringing together industry and government officials to ensure preparedness.

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In terms of supply of the new fuel oil needed to meet the 2020 limit, representatives from IPIECA, representing the oil and gas industry, and IBIA, representing the bunker industry, confirmed that supply of the low sulphur fuel oil was expected to be readily available in most locations and is already available in some. Many ships will be looking to load complaint fuel oil well before the end of 2019. However, there was an expectation of price volatility and supply and demand would have to find a new balance which could take time ‒ especially given that this involves many different actors, from refiners, to bunker suppliers, to ships and the shipping industry.

Simon Bennett, Deputy Secretary-General of the International Chamber of Shipping (ICS) said that the shipowner organisation was conﬁdent that IMO 2020 will be a success. "However, the huge enormity of such a regulatory game changer has never been attempted before and needs to be understood by all stakeholders."

Summing up the first day, IMO's Hiroyuki Yamada, Director of Marine Environment Division, reiterated the importance of c o o p e r a t i o n a m o n g a l l stakeholders and encouraged Member Governments, shipping, refinery, fuel oil supply and relevant industries, as well as c h a r t e r e r s , t o fi n a l i z e t h e i r preparations for IMO 2020. IMO will make every effort to support the consistent implementation of IMO 2020 on Sulphur limit.

A representative from the International Standardization Organization (ISO) outlined the recently-issued standard: ISO/PAS 23263:2019, which addresses quality considerations that apply to marine fuels in view of the implementation of the sulphur 2020 limit and the range of marine fuels that will be placed on the market in response.

Day two of the symposium focused on the role of alternative fuels in t h e d e c a r b o n i z a t i o n o f international shipping (details to follow).

"It is all going to be about market dynamics - but supply and demand will get in balance. It will not be an easy transition, but we will get there," said Eddy van Bouwel, Chair, marine fuels committee, IPIECA. Speakers touched on the challenges new blends of fuel oil might bring, including potential quality issues providing challenges, in particular to the ship's engineers, and the need for preparedness was reiterated, including crew training and reviewing clauses in charter parties.

Other speakers explained how scrubbers (which will be installed on around 4,000 ships) and - to a lesser extent ‒ LNG, are being used to meet the sulphur 2020 limit as well as the potential to reduce other emissions from ships.

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Girl: You would be a good dancer except for two things. Boy: What are the two things? Girl: Your feet.

Doctor: “I'm sorry but you suﬀer from a terminal illness and have only 10 to live." Patient: "What do you mean, 10? 10 what? Months? Weeks?!" Doctor: “Nine."

Dentist: “This will hurt a little.” Patient: “OK.” Dentist: “I’ve been having an aﬀair with your wife for a while now.”

Two donkeys are standing at a roadside, one asks the other: So, shall we cross? The other shakes his head: "No way, look at what happened to the zebra."

Job interviewer: “And where would you see yourself in five years’ time Mr. Jeffries?" Mr. Jeffries: "Personally I believe my biggest weakness is in listening."

An eskimo brings his friend to his home for a visit. When they arrive, his friend asks, puzzled – “So where’s your igloo?” The friend replies “Oh no, I must’ve left the iron on…”

I got another letter from this lawyer today. It said “Final Notice”. Good that he will not bother me anymore.

A husband and a wife sit at the table, having dinner. The woman drops a bit of tomato sauce on her white top. "Oh no, I look like a pig!"

Guest to the waiter: “Can you bring me what the lady at the next table is having?” Waiter: “Sorry, sir, but I’m pretty sure she wants to eat it herself.”

The man nods, "And you dropped tomato sauce on your top!"

"Can you please hold my hand?"A mother asks her son: "Anton, do you think I’m a bad mom?" Son: "My name is Paul."

One company owner asks another: “Tell me, Bill, how come your employees are always on time in the mornings?” Bill replies: “Easy. 30 employees and 20 parking spaces.”

I heard a report about a bad outbreak of the tummy bug, apparently 9 out of 10 people there suﬀered from diarrhea. I can’t stop thinking about that tenth person who apparently enjoyed it.

Bus conductor: Why are taking 2 tickets? Santa : Because if I lose 1 that 2 ticket will save me. Conductor: what if you lose both? Santa : Listen, I am not a fool. I already have my Pass with me.!!!

“My wife suﬀers from a drinking problem.” “Oh is she an alcoholic?” “No, I am, but she’s the one who suﬀers.”

Patient: Oh Doctor, I’m starting to forget things. Doctor: Since when have you had this condition? Patient: What condition?

“Hey, Karen, how much do you weigh?”

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