Maritime CEO Issue Four 2021

ISSUE FOUR 2021

BY

The future of the dry bulk trades Nachipa’s Felipe Simian on learning to do more with less

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MANIFEST

3 At The Prow

Profiles

Economy

26 Cover Story Nachipa 29 AAL 31 Valles 33 United Ocean 35 Caravel 37 Fast Group

5 US 7 EU 9 China 11 India 13 Brazil

Markets 15 Dry Bulk 17 Tankers 19 Containers 21 Finance

Executive Debate 22 Green lanes

Recreation 38 Wine 39 Gadgets 40 Books 41 Travel

Opinion 42 Steven Jones 43 Bart van Steveninck 48 Splashback

41

AT THE PROW

An ASM publication Editorial Director: Sam Chambers sam@asiashippingmedia.com Associate Editor: Adis Adjin adis@asiashippingmedia.com Correspondents: Athens: Ionnis Nikolaou Bogota: Richard McColl Cairo: Camelia Ewiss Cape Town: Joe Cunliffe Dubai: Yousra Shaikh Genoa: Nicola Capuzzo Hong Kong: Alfred Romann London: Paul Collins New York: Suzanne Smith Oslo: Hans Thaulow San Francisco: Donal Scully Shanghai: Colin Quek Singapore: Grant Rowles Sydney: Ross White-Chinnery Taipei: David Green Tokyo: Masanori Kikuchi Contributors: Nick Berriff, Andrew CraigBennett, Paul French, Chris Garman, Lars Jensen, Jeffrey Landsberg, Dagfinn Lunde, Mike Meade, Peter Sand, Neville Smith, Eytan Uliel Editorial material should be sent to sam@asiashippingmedia.com or mailed to 24 Route de Fuilla, Sahorre, 66360, France Commercial Director: Grant Rowles grant@asiashippingmedia.com Maritime ceo advertising agents are also based in Japan, Korea, Scandinavia and Greece — to contact a local agent email grant@asiashippingmedia.com for details MEDIA KITS ARE AVAILABLE TO DOWNLOAD AT: www.asiashippingmedia.com All commercial material should be sent to grant@asiashippingmedia.com or mailed to 30 Cecil Street, #19-08 Prudential Tower Singapore 049712 Design: Mixa Liu Printers: Allion Printing, Hong Kong Subscriptions: A $120 subscription is charged for 2021’s four issues of Maritime ceo magazine.

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Copyright © Asia Shipping Media (ASM) 2021 www.asiashippingmedia.com Although every effort has been made to ensure that the information contained in this review is correct, the publishers accept no liability for any inaccuracies or omissions that may occur. All rights reserved. No part of the publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means without prior written permission of the copyright owner.

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ISSUE FOUR 2021

Shipping and the mainstream press

I

t was not all that long ago that many newspapers in the Western press had dedicated shipping journalists. Now, aside from major hubs and business-orientated titles, such areas of shipping expertise are all too rare in the mainstream media.

More’s the pity as the industry is a fascinating one to report on, and so vital to our everyday lives.

The loss of frontline shipping journos at the newsstand has coincided with a natural uptick in ignorant reporting on the topic.

We’ve all, no doubt, seen any grounded ship spewing oil being referred to as a tanker on bombastic rolling news channels, despite the clear presence of, say, containers on deck.

Then, there’s the more nuanced stories, the ones that us in the trade press might have been covering for weeks or months, but which go global late on in the news cycle and, more often than not, come with all manner of sensationalist, off kilter headlines.

In terms of recent evidence of this media trend, witness the frenzied scaremongering among many tabloids and broadsheets who should know better about families risking missing out on their Christmas shopping this year with all sorts of suggestions that we’re heading for a gloomy empty-shelved December thanks to congested supply chains.

It is poppycock, of course, but it sells newspapers. The Christmas-at-risk

“

The Christmas-at-risk headlines seem to get earlier every year

”

headlines seem to get earlier every year. Who wins from this fearmongering? The retailers, of course, and the shipping lines.

Where our peers in the mainstream do get it right however is coming in from an outsider’s perspective rather than always reporting from inside the shipping bubble.

Moreover, those reporters who file stories for mainstream titles are less likely to be swayed by potentially annoying an advertiser, but perhaps that’s a column for another time. ●

Sam Chambers Editor Maritime ceo

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ECONOMY US

The Covid economy Officials hope the recently passed infrastructure bill will move the country ahead

I

n many ways despite the hard punch the American economy has taken with Covid-19 it has also appeared surprisingly resilient.

However, recovery appears to be a little stop/start with July job growth not being repeated as robustly in August, perhaps due to the emergence of the more transmissible Delta variant. Leisure and hospitality are obviously flat due largely to the pandemic and consumer spending is not overly exciting either for many of the same reasons. In manufacturing supply chain issues remain a drag on manufacturing growth (one aspect being the seemingly widespread issue of truck driver shortages affecting the UK and EU, as well as the US). There is also some inflationary economy, though the Federal Reserve expects this to be only temporary.

So, it seems a strong recovery in 2021 is unlikely and all hopes will be pinned on 2022. Looking at this situation Justin Wolfers, an economics

professor at the University of Michigan, noted that, in America, “the virus is the economy”.

Still, on the bright(er) side wages have grown which will hopefully translate into improved consumer sentiment and spending, and interest rates remain low (due in large part to the Fed buying $120bn in government-backed bonds every month!). It actually seems that inflation, rather than Covid concerns by consumers, is the main drag on consumer spending in the States right now – spending was up just 0.3% in July over the previous month, a negligible gain. Some key spending sectors struggled that had an impact on manufacturing and imports - a decline in motor vehicle purchases for instance (partly due to the global shortage of semiconductors right now). And with consumer spending accounting for more than two-thirds of US economic activity spending slumps are particularly bad news in

US Auto Sales

by Alternative Fuel Type, 2020

Fuel Type % of Alternative sales

Diesel

45.4

Hybrid

31.5

Electric battery (BEV)

18.1

Plug-in

4.9

Fuel Cell

0.1

Total

100.0

Source: US Commerce Department

ISSUE FOUR 2021

the country.

Exports showed some recovery in the last quarter, according to the US Commerce Department the trade gap fell 4.3% while imports slipped marginally at just a 0.2% monthon-month decline as exports picked up by 1.3%. Global trade arguments benefitted US farmers who have picked up some of the slack from China’s bans on Australian beef and super-high tariffs on Aussie wine, but neither of these may be long term gains if Beijing and Canberra ever make up and play nice again (of which there is not much hope in the immediate to short term).

And just because Trump is no longer in the White House does not mean there are not still a raft of outstanding disagreements on trade between Beijing and Washington DC. The US is still detaining imported solar panels from China it believes may have been produced wholly or in part by forced labour in Xinjiang.

However, one hopeful development of the second half of 2021 between America and China should be the resumption of more calm trade talks. China has been rather on the Biden backburner since his rise to office, but US trade representative Katherine Tai said recently that the Biden administration is conducting a comprehensive review of US-China trade policy. ●

5

ECONOMY EUROPE

Headwinds prevailing There’s still plenty to worry about aside from omicron across the continent

H

eadwinds appear to be prevailing still in the European Union as the bloc recovers slowly from Covid-19 only to be hit by the omicron variant.

The recovery had been slightly faster than the bulk of analysts, or the bloc itself, believed through to the moment omicron was discovered. According to the EU’s own economists and statisticians the bloc’s economy is projected to keep expanding over the forecast horizon, achieving a growth rate of 5%, 4.3% and 2.5% in 2021, 2022 and 2023 respectively.

Major Areas of New Job Starts, EU, Q2 2021 Sector

% of over all employment

Hotel & catering

10.5

Arts & entertainment

6.2

Admin & support services

6.1

Agriculture, forestry & fishing

5.7

Construction

5.7

Transport & logistics

4.4

Retail

4.3

Other

57.1

Total

100

Source: Eurostat

ISSUE FOUR 2021

Across the bloc domestic demand appears to be the major driver of this expansion. Improvements in labour markets, job creation and a projected decline in personal savings should contribute to a sustained pace of consumer spending (though the alternative theory is that now many consumers are earning again they will save rather than spend to regroup their financial security). The implementation of the Recovery and Resilience Facility (RRF) does appear to be boosting private and public investment in most EU economies.

The major problem (aside from omicron) for the narrative of continued growth in the EU is sharply rising energy prices, particularly for natural gas, which are all now well above pre-pandemic levels. This problem is accentuated by logistics problems, especially a shortage of HGV drivers. Steep rises in fuel costs will inevitably weigh on consumption and investment while high winter fuel bills for consumers will also dampen consumer spending.

The traditionally bad jobs news in the EU looks slightly better - in the second quarter of 2021, the EU economy created approximately 1.5m new jobs, many workers exited job retention schemes and the unemployment

rate decreased. However, total headcount employment in the EU was still 1% shy of its pre-pandemic level and we should beware of getting too excited about job creation if many are simply re-hires. Still, at 6.8%, the EU unemployment rate in August 2021 stood just above the rate recorded at the end of 2019.

The jobs growth data seems to indicate that the EU is keen to boost exports post-pandemic – the major centre of jobs growth in 2021 is in small- and medium-sized companies engaged primarily in exporting. The one slightly worrying element is the slower than expected recovery of German exporting. Given the importance within the bloc of Germany’s export economy this may prove to be a lag on the bloc’s overall exports recovery if it persists.

The global supply chain crisis and rising input prices means that, after several years of low inflation, there is now a pick-up in bloc-wide inflation that has exceeded analyst predictions. Annual inflation in the euro area rose from a negative -0.3% in the last quarter of 2020, to 2.8% in the third quarter of 2021. The October inflation rate was 4.1%, the highest since records began across the bloc in 1997. ●

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ECONOMY CHINA

Recovering in isolation The PRC is shunning the outside world. For how long remains to be seen

C

hina’s economy may be maintaining its momentum but this is now within what appears will be a longg, self-imposed isolation that will certainly extend beyond the Chinese New Year holiday in February 2022 and the Winter Olympics. Certainly, it seems the economy has stabilised though is engaged in battling regional Covid-19 outbreaks, energy shortages, a collapse of travel (down domestically and at a virtual standstill internationally) and a slump in property prices while bubbles appear in major property developers such as Evergrande. Real estate is worrying given that the property market is, by some estimates, 25% of China’s GDP when related industries China’s Retail Sales Recovery, 2020-2021 Month/Year

Retail Sales growth/decline

Jan-Feb 2020

-20.5

May 2020

-2.8

August 2020

15.0

November 2020

+0.5

Jan-Feb 2021

+5.0

Columbia

+33.8

Source: National Bureau of Statistics, China

ISSUE FOUR 2021

(construction, sales, inputs, etc) are included.

Still China’s vast domestic market can support significant economic activity, both manufacturing and consumption. Industrial output rose 3.5% in October from a year earlier, while retail sales growth accelerated to 4.9%, beating economists’ forecasts. Growth in fixed-asset investment eased to 6.1% in the first 10 months of 2021, with tighter curbs on the real estate market continuing to weigh on the sector. China’s jobless rate was steady at 4.9%.

Retail sales rose 1.9% in October from a year previously, a slower pace than in September. Some Chinese analysts account for this by referring to panic bulk buying by consumers alarmed by Covid-19. Electricity shortages appear to have peaked and so consumption grew by 11% in October over a month earlier when supplies were being severely rationed. Coal imports doubled in October from a year earlier as China sought to deal with power cuts caused by a shortage of coal the amid high demand for electricity, especially from export-oriented manufacturers. In an attempt to make up for the fuel shortfall,

imports of natural gas grew significantly by 22% in the first ten months of the year.

Exports of course, despite over a decade of rebalancing towards consumer markets, remain crucial to the Chinese economy. PRC exports surged 27% in October from a year earlier, according to official Chinese customs statistics. This was the thirteenth straight month of double-digit export growth. The strong export figures lifted China’s trade surplus to a record $84.5bn in October. The US, Europe and Southeast Asia’s emergence from Covid-19 helped boost orderbooks and export demands as well as planning by retailers stocking up for the western holiday shopping season. Meanwhile, imports increased 20.6%.

Still, as fortress-like and self-isolating as 2021’s China can sometimes appear (and we should note new regulations affecting a range of sectors, especially tech, as well as services) the country is also suffering from the global shipping, logistics and supply chain disruptions despite managing to maintain strong import numbers.

Overall, GDP last quarter grew at its slowest pace in a year, up 4.9% from a year previously. ●

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ECONOMY INDIA

Doubters thwarted Can New Delhi make this year’s surprising gains more of a longterm trend?

I

ndia is now the world’s fastest-growing large economy again.

The Indian economy has significantly outperformed most analyst, and even government, expectations.

The reasons for this turnaround are myriad and debatable but do certainly include the big drop in Covid-19 cases since May 2021 (from a high of 400,000 daily cases in May to under 11,000 daily now) when things in the country looked far bleaker. Additionally, nobody predicted quite how strong the consumer rebound in spending would be. The recent Diwali, Festival of Lights, celebration was exceptionally strong in consumer spending terms – 20% year on year growth, according to Nomura Securities. Consumers India: Major Exports by Commodity, 2020 Key Sector

% of total exports

Petroleum Products

13.7

Gems & Jewellery

11.4

Machinery

6.6

Chemicals

5.7

Vehicles

4

Other

57.3

Total

100

Source AsiaLink Business

ISSUE FOUR 2021

are also driving surging demand for transportation from private cars to train and bus tickets as well as utilities demand, electricity in particular.

The Indian government now expects annual GDP growth this year to be in the region of 9.5% (as opposed to 8% in China over the same period).

Still, good news, but many are asking will the short-term surging recovery become a long-term economic improvement and serious, rather than temporary, recovery.

Pessimists point to falling industrial output during the summer largely spurred by exacerbated big cuts in car manufacturing brought on by the global semiconductor shortage. There was also a shortage of coal across the country in the late summer/autumn which led to the government deciding to prioritise consumer need and divert electricity supply from industry to households. This led to a severe cut back in steel production over the year. Additionally, the government cut taxes on petrol and diesel in the autumn. Meanwhile the country’s vaccination roll lout continues which is seen as essential to bolstering the economic recovery over the mid to long term.

The industrial slowdown has inevitably hit exports while the

global semiconductor shortage and covid has adversely affected imports into India. Notably, exports of services from India have been strong compared to merchandise exports. Exports of IT, education, technology-based healthcare and management and business services as well as e-commerce were all strong over the last two quarters.

This slowdown in hard exports is part of a longer, and not solely Covidrelated, decline in India’s exports - India slipped to eighth position in 2020 in terms of its share of merchandise exports among developing economies, according to a recent World Trade Organization (WTO) report. In terms of inbound shipments, the share of exports to 5.2 per cent in 2020 from 6.4 per cent in 2018, with India’s rank deteriorating to the fourth position from the third, again according to the WTO report.

Many now feel that Covid has shown that India was over-reliant on certain key exports and needs to restructure and diversify if it is to evince growth again. There are, of course, some areas where exports have stayed strong – sugar, for instance, with stronger than normal demand from the Middle East, Bangladesh, Somalia and Iran. ●

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ECONOMY BRAZIL

Soybean growth Beef bans have hurt this year, but other agricultural sales have leapt

T

he Brazilian economy just doesn’t seem to be able to get out of the gate and both analysts and government officials admit that GDP will shrink again next year. However, there is significant disagreement between analysts and government about what is happening. The government generally believes the economic slowdown is due to global inflationary pressure (perhaps unsurprisingly as the government cannot be held responsible for global trends) that has forced central banks, including Brazil’s, to raise base rates. Of course disrupted supply chains across the world have adversely affected Brazil’s exports and imports with the knock-on Leading Exporters of Soybeans, 2020 Country

% of global total exports

Brazil

43

USA

40

Argentina

5

Paraguay

4

Other Countries

8

Total

100

Source: Federal Reserve Bank of St Louis/US Department of Agriculture

ISSUE FOUR 2021

effects for employment and consumer spending.

The government hopes the national economy will expand by nearly 5% this year. That is expected to slump to 3.5% or at best 4% next year. This while Brazil’s central bank has increased its Selic base rate (aka the Brazilian federal funds rate) to 7.75% this year compared with 2% at the start of 2021.

Brazilian exports however remain problematic. This is largely due to China’s decision to continue to uphold a ban on meat imports from Brazil which is costing the country somewhere in the region of $450min taxes alone – a significant hit to the government treasury. Uruguay, Argentina and other Latin American countries have naturally picked up the slack, profiting from Beijing’s decision, and obviously hoping to keep those export contracts even if China lifts its ban on Brazil. The ban was due to mad cow cases detected in September in Minas Gerais and Mato Grosso. However, the US has helped out Brazil - exports of Brazilian beef to the US rose a whopping 183% during the first 10 months of this year, according to Brazil’s

Economy Ministry. Though it should be noted that this is only a fraction of the gigantic volumes China normally orders and that two other major Asian markets for Brazilian beef Japan and South Korea – have also implemented an ongoing ban.

Brazil’s other major export – soybeans – appears to be holding up. This is good news for those that back Brazil’s decision to increase its soybean-harvested area, which controversially can involve destruction of rain forest. It has increased since 2000 by 160%. Normally when we talk of Brazil’s soybean export growth it is in relation to Chinese demand. However, it should be remembered that EU demand is strong and growing - over half of the EU’s needs as soybean meal come from Brazil and Argentina. This year there has also been increasing demand from a variety of diverse markets for soybeans including Thailand, Turkey and Russia along with Vietnam, Indonesia and Algeria.

Brazil is betting on this growth being sustained - in 10 years (2030–31), Brazilian soybean production is projected to be 175.4m tonnes, an increase of almost 30%. ●

13

MARKETS DRY BULK

Freight market under pressure as China’s supports unwind The slump should be no surprise given the continued weakening of Chinese import demand, writes Alex Stuart-Grumbar from MSI

O

ctober was a month of dramatic change for the dry bulk freight market. After peaking at over $80,000 a day early in the month, the Baltic Capesize 5TC average slumped to below $30,00 a day by early November.

Sub-capesize benchmarks were initially resilient to weakening capesize market sentiment, but later in the month tumbled towards fivemonth lows. Fortunes in November have been mixed so far, with the capesize benchmark holding up at around $25,000 to $30,000 a day for the month to date, but with sub-cape benchmarks continuing to slide.

The slump in the dry bulk freight market is not surprising given the weight of evidence to support a sharp weakening in Chinese import demand; indeed, MSI has been surprised over the heights to which rates had risen to recently, given negative underlying demand dynamics,

ISSUE FOUR 2021

particularly relating to Chinese steel markets.

The most recent official data shows that Chinese steel output dropped to 73.4m tonnes in September (down 21.1% year-onyear), and October has been weaker still (down 23.3% year-on-year).

China’s iron ore imports were down 7% year-on-year in October.

Typically, this time of year usually marks a period of strong iron ore trade as exports out of Brazil and Australia reach seasonal peaks.

This year, though, loadings out of both countries have disappointed, with Brazilian exports in October – per tonne a more significant driver of capesize demand given the long distances – being the lowest monthly total since before 2017.

Falling Chinese industrial demand has more than offset a moderate uptick in global coal trade. In contrast to the commitments being made to ‘phase down’ coal at the COP26 meeting, countries around the world have increasingly relied on the fuel in recent weeks in response to a global energy crunch.

Restrictions to gas supply have been at the heart of the issue, and coal has been a key beneficiary.

Notably, China’s imports have been strong (up 50% year-on-year in October) even though domestic production has risen to record levels

“

MSI’s near term outlook for bulk market freight earnings is weak

”

- producing the most coal ever in a single day on November 12 at over 12m tonnes.

Key to the collapse in freight earnings, though, has been a significant easing of Chinese port congestion. Movements data from Oceanbolt shows that there has been a sharp drop in time at anchorage, with the average (median) days falling from 4.3 days in September to just over three days in November.

This has helped free up more tonnage across segments, thereby negatively affecting market balances.

MSI expects Chinese underlying demand to remain weak in the short term, partly related to difficulties in the property market and partly thanks to efforts to minimise pollution in the run-up to the Winter Olympics in Beijing.

This will also ease port congestion further and with commodity supply likely to weaken in Q1 as a result of seasonal disruptions to production, MSI’s near term outlook for bulk market freight earnings is weak. ●

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MARKETS TANKERS

More uncertain than ever A combination of factors has made forecasting the direction of the tanker market increasingly difficult, writes Erik Broekhuizen from Poten & Partners

O

PEC+’s move to raise oil production in January 2022 by 400,000 b/d in line with their long-term plan to unwind last years’ production cuts by September 2022 was a surprise decision. Many analysts expected the oil producing cartel to announce a production freeze against the backdrop of sharply lower oil prices due to the emergence of the new Omicron variant of Covid-19. On the face of it, this appears to be relatively good news for the tanker market, but OPEC has kept the door open to change their mind and reverse the increase or even lower crude oil output if the Omicron variant ends up having a strong negative impact on oil demand. In addition to the vagaries of future oil demand and supply in the context of a continuing global pandemic, the market also must consider government inventory releases and the potential impact of a new Iran Nuclear deal, for which the negotiations have started up again.

Last month, just before the World Health Organization declared Omicron a new variant of concern of Covid-19, a group of large oil consumers, including the United States, the

ISSUE FOUR 2021

U.K., India, Japan, South Korea and China, announced a coordinated release of oil reserves. Most of the crude (50 million barrels) is scheduled to come from the U.S. Strategic Petroleum Reserve (SPR). The Biden administration has announced that the U.S. will offer long-term loans of up to 32 million barrels of sour crude from its SPR for delivery by 30 April 2022, while separately selling 18 million barrels outright over the next “several months”. A release of oil from reserves is obviously a shortterm negative for the tanker market.

However, reserves will need to be replenished and this could be supportive of tanker rates further down the road. After the announcements were made, U.S. officials indicated that they would continue to monitor the oil markets and if prices fall significantly, they could change the terms of the SPR release.

This month, Iran and the remaining parties to the Joint Comprehensive Plan of Action (JCPOA) – China, Russia, France, Germany and the U.K. – have restarted negotiations on the possible return of the U.S. to this agreement, which limited Iran’s

nuclear activities in return for the lifting of sanctions. The U.S. is (indirectly) participating in the negotiations. The current situation is not beneficial for the tanker market. Iran’s exports are restricted by the sanctions and as a result, most of its tanker fleet remains inactive or is used for floating storage. The volumes that are smuggled out of the country are transported on a growing fleet of ageing “rogue” tankers that are widely considered a drag on the already depressed tanker market.

If a deal is negotiated and the restrictions on Iran’s oil exports are lifted, this could add about 1-1.5 million barrels per day of oil to the market, a boost to the tanker market. This would also render the rogue tanker fleet obsolete and – lacking legitimate other employment opportunities – these tankers may well be retired, providing an additional boost to the market. If the negotiations are not successful (considered the more likely outcome), this would not necessarily mean a return to the status quo.

In conclusion, the outlook for the tanker market is highly uncertain.

Oil supply and demand balances can easily swing from surplus to deficit depending on the impact of the Omicron variant on the global economy. On top of that we must consider the uncertain timing and volumes of OPEC+ production increases and SPR releases. The coming months will probably also decide the fate of the Iran Nuclear deal, the outcome of which will be key for the tanker market. Unfortunately, with so many uncertainties in 2022, it remains very difficult to predict when the tanker market will get on the road to a sustainable recovery. ●

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MARKETS CONTAINERS

Are conditions improving?

Lars Jensen from Vespucci Maritime looks into the container dwell issue

A

s of November 12 in the morning a count of container vessels outside Los Angeles/Long Beach showed 80 vessels waiting. This means there has effectively not been any improvement in the congestion seen from a vessel perspective since the beginning of October.

The latest proposal that vessels now have to wait 150 nautical miles offshore will of course in itself not alleviate the problem, but will mainly serve to remove some of the air pollution away from the immediate shoreline around Los Angeles and Long Beach.

A key to being able to resolve the vessel bottleneck is to clear the immense amounts of containers with high dwell times. The new fee structure penalising cargo with a dwell time of nine days or more appears to be making some improvement.

Data from November 10 shows Los Angeles and Long Beach combined having a decline of 31% in containers with a dwell time of nine days or more compared to November 1. That is a significant improvement – but still also leaves 48,600 containers

ISSUE FOUR 2021

with a dwell time of nine days or more. The data put forth from Long Beach does not detail the split into dwell duration, but if we apply the split used by Los Angeles and assume a similar split in Long Beach that implies 9,800 containers with a dwell time of nine to 12 days and 38,800 containers with a dwell time of 13 days or more.

If this split is the same on November 15 that implies a fee of $63m for the long-dwelling containers. A very strong incentive of course, but the challenge is in the practical realities of being able to physically move the containers.

Also, we have seen significant declines in spot rate levels on the transpacific – although to be fair we have seen similar declines in percentage terms in the past as well.

Hence it is clearly a decline, but not a particularly large decline.

Given that the vessel queues are the same and that the dwell time problem is still not resolved, the decline in rate levels can therefore not be explained as an indication of improvement of congestion issues on the destination side. The rate decline

“

The rate decline must reflect market conditions at origin

”

must therefore reflect market conditions at origin. And here we find that the first week of November had a very large increase in capacity both measured week-on-week as well as year-on-year. Hence it would appear that the decline is driven by too much capacity at origin – and this, incidentally, sets the scene for a surge of vessels arriving into the congestion ports in the coming weeks. ●

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MARKETS FINANCE

The stalled energy transition Dagfinn Lunde questions how far down shipping is on its green path

S

howered with cash like never before, what is it that containership owners know that the rest of us have yet to work out?

Newbuild prices are considerably elevated and most of the ship owning community cannot, hand on heart, say with any conviction that they know what the fuel of the future is. And yet our box ship friends have piled in with more orders for new ships than ever before.

Granted many of these new ships are alternatively fueled - for which read LNG bar a handful of Maersk methanol dual-fuelers - but really we are still so far away from being able to order tomorrow’s ships with any confidence. Where will the green methanol come from? Where will all the green hydrogen come from?

Fortunately, the dry cargo owners

ISSUE FOUR 2021

are sensible and are holding back so we can see a healthy demand-supply relationship in the dry cargo area for a few years ahead.

Shipping is obliged to become green but cannot do it on its own.

The world seems to not be joining the dots - demanding zero emissions without establishing the requisite infrastructure.

Of course, the regulatory tardiness does not help. I am very worried about EEXI and CII rules coming in.

This bodged legislation will not necessarily put us on the green path we need to be on fast. It will, however, make older ships go so slow, potentially great news for owners as rates will rally.

It’s not just shipping that has struggled to keep a resolute green path in 2021. The global energy

transition has stalled this year witness the extraordinary growth in coal use this year, in no small part due to high gas prices.

One final point relating to finance. You might have read recently about the big drop in syndicated marine loans this year. While this is a clear trend, don’t think for a moment that this translates into the finance taps being turned off for shipowners. There is still a massive inflow of capital from every other source.

Whatever project you look at these days, four or five bids come from non-banking sources. Shipping is attractive again and there will not be a lack of funding anytime soon. ●

21

EXECUTIVE IN PROFILE DEBATE

The passage towards decarbonisation Will so-called green corridors hasten shipping’s path to zero emissions?

W

ith zero emission fuels and vessels required to achieve significant decarbonisation by 2050, developing so-called green corridors can help speed up the transition to zero emission shipping, something that is now very much in focus following November’s big shipping announcement at COP26, the United Nations climate summit in Glasgow, where 22 nations signed on to support these new cleaner shipping routes.

Signatories to the Clydebank

22

Declaration have agreed to work together to support the establishment of green shipping corridors, defined as zero-emission maritime routes, between two or more port pairs.

Madeline Rose, climate campaign director, Pacific Environment, said: “Just like cars and trucks, ships will need new charging stations in a zero-emission future at the ports they frequent all around the world.

We thank the United Kingdom for leading this clean shipping initiative

“

Green corridors are essential to support first mover viability

”

and commend all first-mover nations, but warn the Clydebank framework leaves room for delay tactics and fossil fuel loopholes. We urge partner countries and ports to act quickly to set immediate, interim and ultimately mandatory maritime ceo

EXECUTIVE IN PROFILE DEBATE

benchmarks to phase out all fossil fuel ship pollution along their shared corridors.”

Commenting on the big news from Glasgow, Nick Brown, CEO of British classification society Lloyd’s Register, said: “Highlighting major port hubs and specific trade routes enables a full understanding of where the first land-based infrastructure investments in the production of new fuels could have the biggest initial impact. Green corridors are essential to support first mover viability.”

ISSUE FOUR 2021

A new study produced for the Getting to Zero Coalition, a partnership between the Global Maritime Forum, Friends of Ocean Action and World Economic Forum, looked at how green corridors – specific trade routes between major port hubs where zero emission solutions are demonstrated and supported – can be conceived, prioritised, and designed to accelerate the speed of shipping’s transition.

It found that green corridors can leverage favourable conditions for accelerated action as they allow policy makers to create an enabling ecosystem with targeted regulatory measures, financial incentives, and safety regulations. In addition, it established that they can also put conditions in place to mobilise demand for green shipping on specific routes and help to catalyse accelerated decarbonisation by creating spillover effects that will reduce shipping emissions on other corridors.

The research looked at three corridors: the Australia-Japan iron ore route, the Asia-Europe container route, and the Korea-Japan-US PCC corridor. The case studies were developed in collaboration with more than 30 companies from across the value chain, many of which are active on the routes in question. According to the findings, when applied to both routes, the green corridor concept provides sufficient scale for impact as well as the necessary specificity – across fuel pathway, cargo, policy-making environment, and vessel type – to enable a feasible, accelerated decarbonisation roadmap for the shipping industry.

Techno-economic analysis suggested that green ammonia is a likely fuel choice for the AustraliaJapan iron ore corridor, with bunkering in North West Australia for the initial zero emission vessels.

The Asia-Europe container route currently generates more greenhouse gas emissions than any other single global trading route. Green methanol and green ammonia are the two zero emission fuels likely to be deployed here.

“

Green corridors will enable us to go from ambition to action

”

“Green corridors can help simplify the challenges of zero-emission shipping, bringing solutions to the water faster and at a meaningful scale. The maritime ecosystem is embarking on a journey to a transformed, zero emission shipping sector. The task ahead is complex, but not impossible,” said Johannah Christensen, CEO of the Global Maritime Forum.

“Green corridors will enable us to go from ambition to action.

However, there will still be a cost gap between fossil-based shipping and zero-emission shipping of the order of 25% to 65%. Targeted government action to close that cost gap on corridors could pay big dividends for the transition overall,” said Faustine Delasalle, co-executive director, Mission Possible Partnership.

The study concluded that for all green corridors, the success factors are likely to be similar: corridor-level consensus on fuel pathways, policy support to help close the cost gap for higher cost zero emission fuels, and value chain initiatives to pool demand. ●

23

IN PROFILE

Catrien Scheers p.37

Felipe Simian p.26

Peter Georgiopoulos p.33

In profile this issue Maritime CEO’s 17 correspondents around the world have been in touch with many of the world’s top shipowners. Highlights are carried over the next 17 pages

24

maritime ceo

IN PROFILE

Wellington Koo p.31

Angad Banga p.35

Kyriacos Panayides p.29

ISSUE FOUR 2021

25

IN PROFILE

Can dry bulk have success without excess?

Felipe Simian, CEO of Chilean dry bulk firm Nachipa, on the markets ahead

O

ver the last two decades any sustained uptick in dry bulk freight rates has triggered a tsunami of newbuild orders. That was certainly the case when there were spikes in 2007-2008, 2010-2011, and 2013-2014.

Will this time be any different?

Can the dry bulk sector avoid undermining its opportunity for success?

Could 2021 be the next 2006 and come to be seen as the year before the next cycle’s momentum hit its stride?

Felipe Simian, CEO of Chilean dry bulk firm Nachipa, is not so sure.

“In my experience a lot of the

26

people answering, ‘yes’ to those questions are the same people who think we’ve arrived in a ‘new normal’. While I’m inclined to respond positively to those questions, I don’t believe that we’re in a new era,” says Simian, the third generation at the helm of the 73-year-old firm.

The complexities of the shipping industry are more visible than they once were, Simian argues, and that’s making a lot more people critically

“

analyse the sector in new ways.

Simian has been cautiously optimistic about the direction of dry bulk freight rates since early 2018.

Rates had bottomed in 2016 after several years of depressed conditions, and given trends in cargo and fleet growth he felt back then that the sector was at the beginning of a sustainable uplift. Unfortunately, two black swans interrupted. First the Brumadinho dam disaster in 2019,

Nobody wants to be the guy who bet the farm on newbuilds powered by the equivalent of Betamax

”

maritime ceo

COVER STORY

and then the global pandemic a year later.

So what makes him more optimistic about the timing now? Three elements: Regulation, commodity economics, and construction.

Starting with construction, Simian points out that about threefifths of the dry bulk fleet is non-eco, and approximately 10% are more than a quarter century old.

“What’s the working life of these vessels post- Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII)?”

Simian muses, going on to suggest

ISSUE FOUR 2021

that they will need to be replaced, and eventually owners will need to make a choice. However, even if they make that choice tomorrow the average lead time in recent years has been nearly two years. Moreover there are very few slots left in 2023.

“We can predict with a reasonable level of accuracy that the current state of the orderbook will mean low dry bulk fleet growth in the next couple of years,” Simian says.

As per regulation, the Chilean is convinced that the upcoming EEXI and CII requirements will mean a swathe of vintage ships will have to slow steam resulting in an effective reduction of vessel supply.

Then there’s the whole uncertainty surrounding propulsion choices.

“It’s become common to hear companies say that they’ll buy zero-emission vessels once they’re commercially viable, and there’s appropriate refuelling infrastructure in place. This is the classic chicken or the egg causality dilemma, and the result on the orderbook is equally characteristic,” Simian says. “Is it going to be ammonia? Or hydrogen?

Maybe methanol? Nobody knows, and nobody wants to be the guy who bet the farm on newbuilds powered by the equivalent of Betamax.”

In any case, Simian points out that almost all of the biggest shipping banks, apart from the Chinese, have signed the Poseidon Principles.

“So unless you’re a copper-bottomed credit you’ll be struggling to get rates much below double digits to finance newbuilds with hydrocarbon propulsion anyway,” Simian predicts.

Looking at commodity economics, Simian notes how grains, cement and clinker among others have all been strong this year.

“We’re seeing broad demand across almost all commodities and it’s leading to some very optimistic speculation,” Simian says, going on to quash talk of a supercycle.

“

The current state of the orderbook will mean low dry bulk fleet growth in the next couple of years

”

Over the medium to long term Simian expects commodities which are more integral to demand for renewable infrastructure to have a slightly more positive outlook.

Whereas those which are more reliant on Chinese growth, such as iron ore and coking coal, are likely to face headwinds.

“There are no sure things in our industry, but if I had to pick one macro challenge in the years ahead, it’s the end of the current Chinese five-year plan,” Simian warns, explaining: “Beijing has made clear its desire to bolster strategic reserves of commodities, but once those stockpiles have been accumulated we could see demand drop substantially.

As always when it comes to buying newbuildings in the years ahead, caveat emptor.”

Formed in 1948 and still family-owned, Nachipa, formerly known as Naviera Chilena Del Pacífico, unveiled a rebrand last year coinciding with the opening of the company’s first European office in Hamburg and move to an asset-light model. It currently has seven handies in its fleet with plans to add ultramax and supramax tonnage soon. ●

Spot on

Nachipa Formed in 1948 and still family-owned, Nachipa, formerly known as Naviera Chilena Del Pacífico, has a fleet of seven handy bulk carriers.

27

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IN PROFILE

Boxes as cream on top AAL Shipping has been making extra cash this year carrying containers on its MPPs

C

ypriot national Kyriacos Panayides heads up breakbulk, project cargo and heavylift operator AAL Shipping and has done since 2015, when he moved to Singapore to take over as managing director. But he has worked for Schoeller Holdings - which owns AAL together with Limassol-based Columbia Shipmanagement, as well as various local real estate ventures for a lot longer and has been involved with AAL since its founding in 1995.

Today AAL operates a core fleet of 25 multipurpose vessels (MPPs) at any given time, and short-term charters more as required, of which it owns 18 units. The average age of AAL’s own vessels is eight years, the company having completed its second major newbuilding plan in 2014.

“We’re now planning for a third generation of newbuildings to be ordered shortly,” he tells Maritime CEO. “We’re currently in discussions with shipyards. We have concluded the design – they will be state-ofthe-art 32,000 dwt heavylift MPPs with combined lifting capacity of 700 tons.”

The MPP market is currently experiencing “record highs” for a number of reasons, he explains. It all started with the soaring container market, which began absorbing MPP vessels to carry the surplus of boxes that the global liner fleet was unable to accommodate because of widescale port delays causing a global capacity crunch, which in turn created a shortage of tonnage

ISSUE FOUR 2021

supply in the MPP market.

“Then this combined with the fact that a lot of dry cargo from the timber and forest products sector has gone back to breakbulk mode, which when container rates had started to decline had switched to containerization,” he continues, “but have now switched back.”

There’s also been “continuous growth” in the offshore wind industry, he adds, with MPPs used to carry ever-larger turbine blades and towers.

Escalating container demand remains the overriding factor, however, he reiterates, ever since freight rates started to climb. Shippers have become desperate to secure space so have been keen to procure space for containers. In the last six months boxes have therefore been a “complementary” source of revenue for AAL, he says, accounting for 10-15% of its cargoes.

AAL carries containers on deck aboard all its liner and semi-liner services between Asia and Oceania,

US and Europe. The fact that most of its vessels are at the larger end of the MPP size spectrum – between 25,000 dwt to 32,000 dwt – means it has the available space to do this quite comfortably, its A Class vessels in particular being purposely designed to serve the liner model with a suitable cargo configuration to ensure maximum cargo intake and segregation.

In addition, the company’s possesses strong in-house engineering expertise across its global network of 12 offices and more than 100 shore staff worldwide thanks to its long history of dealing with heavylift and oversized cargoes.

With no one quite sure how long the current container capacity crunch will continue, it’s a fair bet that AAL’s new third generation of MPP vessels have been designed to carry on doing exactly the same, topping up its traditional diet of breakbulk and heavylift cargoes with containers as the ‘cream’ on top. ●

Spot on

AAL Singapore-based MPP operator, part of Schoeller Holdings, with a fleet of 25 vessels.

29

IN PROFILE

Priorities at the helm Wellington Koo on issues he’d like to focus on during his tenure as the head of the Hong Kong Shipowners Association

W

ellington Koo, executive director at Valles Steamship, was elected the new chairman of the Hong Kong Shipowners Association (HKSOA) last month, replacing Anglo-Eastern’s Bjorn Hojgaard who has completed his two-year term at the shipping body.

Speaking with Maritime CEO, Koo, the fourth generation at the helm of privately held Valles, said the key to ensure the southern Chinese city continues to grow as a maritime hub was to entice all strands of the industry to set up there.

Koo concedes that the commercial principals, such as shipowners, managers and traders, are the most important group to try to woo back to Hong Kong.

“They are the drivers of the maritime industry and generate business for the service companies. If more of these principals are attracted to Hong Kong, related service providers, such as brokers, insurance companies and maritime law firms, will follow,” Koo says.

Shipowners and managers may continue to leverage the support of a wide range of high value-added maritime services in Hong Kong.

Government policies and financial incentives are helpful, Koo says. Last year’s tax concessions for ship leasing and the most recent tax concessions for shipmanagement companies are good examples of this.

Koo is also happy to see greater government spending going to bolster the Hong Kong Shipping Register, the world’s fourth largest shipping flag.

ISSUE FOUR 2021

Now what Koo would like to see - ideally during his two-year tenure at the HKSOA - is a visionary, strategic plan.

“Through the Hong Kong Maritime and Port Board and in consultation with industry stakeholders, the government could formulate a comprehensive strategy to promote the long-term, sustainable development of the industry,” Koo urges, adding: “This is essential, especially as the world is now in the New Normal, there is requirement for thoughtful leadership and careful planning, as well as vision and determination.”

Another important part of Koo’s time at the top of the HKSOA will be fostering ties with southern Chinese cities as part of the Beijing-backed Greater Bay Area initiative.

“The Greater Bay Area

development plan holds the potential to resolve certain structural issues, in particular the shortage of land and manpower resources, which over the years has limited maritime development in Hong Kong,” Koo says.

The Greater Bay Area also provides a “great opportunity”, Koo says, for the transformation of Hong Kong’s maritime industry into one driven by knowledge and innovation, especially as green and smart shipping are top priorities.

Expect the HKSOA to be working hard behind the scenes to resolve many local - and international issues facing shipping while Koo is at the helm.

Once the two years are up, it’ll likely be his deputy, Angad Banga, from the Caravel Group, who will take charge - he’s profiled on page 35. ●

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IN PROFILE

Shipping needs true, transparent and timely vessel emissions data Peter Georgiopoulos on why the industry must invest more in tech

P

eter Georgiopoulos, among the most written about shipowners this century, made his return to shipowning this year with the creation with business partner Leonidas Vrondissi of United Overseas Group, which took over United Arab Chemical Carriers (UACC). Having left Gener8 Maritime in 2018, Georgiopoulos had spent much of the intervening period studying and investing in maritime tech firms. This period has been transformational in Georgiopoulos’s thinkings about shipping and tech.

The industry’s ability to comply with pollution and climate change goals demands a new, technology-driven approach, he tells Maritime CEO. “Carbon pricing, emissions trading, EEXI, CII, The Poseidon Principles, Getting to Zero and The Sea Cargo Charter. Regulators are coming for shipping and this time they are bringing the banks, charterers and civil society along with them,” Georgiopoulos says.

In just over a year, carbon pricing will be applied to shipping emissions in Europe and at the same time the EEXI and CII will enter into force.

“All three will bring new levels of scrutiny to monitoring performance and reducing emissions,” Georgiopoulos says.

This acceleration in the tempo of emissions monitoring for compliance with regulations and market measures has demonstrated an inconvenient truth, Georgiopoulos argues, pointing out that quantifying

ISSUE FOUR 2021

and collecting actual voyage and fuel consumption data is not something the industry has much experience with.

Both the IMO and the EU data collection programs collect annual vessel emission data retroactively so it’s possible to see what a ship did last year but not last week. While this is aimed at forming legislation going forward and offering good historical data on shipping’s carbon footprint, in order to make meaningful carbon changes Georgiopoulos says we need real time data. And that data needs to be accurate and not estimated or a year old.

“While we realise that to enable all market participants the initial bar has to be set low, but whether you are a charterer, owner or operator, we all need a solid regulatory platform and real data in order to make informed decisions that actually arrest climate change,” Georgiopoulos says.

The question then is this. How to deploy devices in the real world that can offer charterers and other industry players meaningful actual vessel specific real-time data and how to do

this quickly?

For this reason, Georgiopoulos invested in emissions data start-up SeaArctos to simply and cost effectively demonstrate that an owner is not only embracing new environmental regulations, but is able to confidently demonstrate compliance to all stakeholders from class and flag, banking and insurance to Port State control and Coast Guard.

“Understanding the exposure that will come from regulations and carbon pricing can help companies prepare and understand the steps they need to take, Georgiopoulos insists. ●

Spot on

United Ocean Group Founded this year by Peter Georgiopoulos and Leonidas Vrondissi. Took over United Arab Chemical Carriers in a deal giving it a fleet of 20 ships.

33

IN PROFILE

Hong Kong champion Angad Banga feels a maritime resurgence is on the cards for the Special Administrative Region

A

ngad Banga, chief operating officer at his father’s Caravel Group, has become a well known, vocal face on the local Hong Kong shipping scene, a role that is set to grow and grow in the coming years.

Elected deputy chairman of the Hong Kong Shipowners Association last month, Banga is set to be an important champion of the city’s maritime credentials going forward.

To make Hong Kong shipping great again, Banga argues that it’s a matter of setting policies and introducing initiatives designed to help the maritime industry thrive – whether that’s about creating new opportunities, fostering innovation and collaboration, or attracting and retaining top talent.

“From my perspective, the strong support we are seeing from the central government and their commitment to reinforce Hong Kong as an international financial, shipping, trading and legal services centre certainly summons a lot of optimism for Hong Kong’s future,” Banga tells Maritime CEO. With government backing, Banga believes there will be a kind of “resurgence” in terms of the perception of Hong Kong as a maritime leader.

To truly create a thriving marine cluster, Banga says the government needs to engage everyone from the cargo owners to the shipowners, service providers, financiers, and so on, and extend their support and investment in a holistic way given the interdependent relationships within the ecosystem.

“We’ve already witnessed how current policies, especially those

ISSUE FOUR 2021

“

The maritime industry is weaved into the very heart and soul of Hong Kong’s history, culture, and economy

around favourable fax policies for maritime leasing, is successfully doing just that and I’m hopeful about those potentially upcoming for commercial principals,” he says, stressing: “The maritime industry is weaved into the very heart and soul of Hong Kong’s history, culture, and economy so as a community – and with support and strong backing of the government – we should be doing more to preserve and promote this narrative that is unique to who we are as Hong Kong.”

Banga is also a firm believer that the Greater Bay Area (GBA), the Beijing-initiated closening of ties between southern Chinese cities, will strengthen Hong Kong’s existing shipping community and position as a leading maritime centre.

”

“With the GBA’s focus on logistics and shipping, Hong Kong will gain exposure to a whole new world of opportunities that will enable further development of specialised services such as marine insurance and ship finance,” Banga insists. ●

Spot on

Caravel Group Banga family owned commodities trading firm with some owned bulk carriers and owner of Fleet Management, the world’s third largest shipmanager.

35

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IN PROFILE

WISTA’s role in world shipping Catrien Scheers discusses women and maritime

C

atrien Scheers, chairwoman of Belgian breakbulk company Fast Group, recently attended the AGM of WISTA International in Hamburg. The main mission of WISTA is to promote women into leadership positions in the traditionally male-dominated shipping industry. Interviewed by Royal Belgian Shipowners Association (RBSA), she discussed the changing roles women have within the shipowning community.

It was 10 years ago, Marc Nuytemans – the managing director of the RBSA at the time - asked Scheers to join WISTA. His wife Carmen Dewilde started WISTA Belgium.

“I did not feel the need to join an all-women’s club, but Marc said I should give it a try,” Scheers said in conversation with the RBSA, adding: “I never regretted this. WISTA is an amazing network. Just imagine the wonderful energy when maritime women from 54 nations come together. We laugh and have fun while re-imagining the future of the maritime industry.”

Apart from addressing the gender gap, WISTA also organises itself around committees looking at diversity, HR, technologies, and most recently trade.

“The purpose of these committees is to offer the opportunity for dialogue between different actors in the industry and for women to weigh in on debates that shape shipping and trading,” Scheers explained.

ISSUE FOUR 2021

“ ”

Consider shipping as a career as no two days are the same WISTA provides liaison with other related institutions and organisations worldwide. It partners with the International Chamber of Shipping for example to offer scholarships to provide young women with deeper knowledge of the maritime industry. An MoU was signed between WISTA and the IMO in 2020, and as part of this collaboration, a survey will be undertaken every three years. The IMO-WISTA international survey on women in maritime is to examine the proportion and distribution of women working in the maritime sector, from support roles to executive level positions.

In terms of advice for women leaders out there who are still not members of WISTA and for any young women who are considering a career in shipping, Scheers told

the RBSA: “If you are looking for an innovative, open minded, varied, and international job, consider shipping as no two days are the same and do join WISTA. As WISTA member, you have access to an incredibly diverse network of executives in the shipping and trading field on whom you can call for referrals, connections, advice, and business collaborations.”. ●

Spot on

Fast Group Founded in 1991 and controlled by the Scheers family. Fleet today features four breakbulk ships.

37

REGULAR BOOKS WINE

Winter warmers and where to find them After another year behind the mask, we all need a break and some comfort drinking to ease us into the festive season, writes Neville Smith

I

t’s nearly that time of year again.

No I don’t mean Chinese New Year, though if you have any last minute present requests, best make them now. Hopefully by now those of us who celebrate Christmas will have all safely gathered in, including the editor’s festive pallet of wine.

There is an air of celebration about the season underway, though depending on what happens in the next few weeks, it could be that many of us will be spending it with our nearest and dearest rather than the extended mob.

This column assumes there is

a party going on somewhere and given the bumper year for containership operators, gas and bulk carrier owners, we can expect a fair degree of excess. Sorry tanker people, maybe next year.

While it might be true that you don’t want to overcomplicate things at Christmas I would always advocate for something different.

You have all year to drink the everyday, so for festive drinking, alone or in company you need something slightly unusual or an old favourite that deserves a fresh outing.

As always I will be erecting

Two (more) to try VINCONOCLASTS WILL ALREADY be familiar with the reds and whites of Le Soula and its Trigone Blanc N18, (£POA, Berry Bros & Rudd) is a rustic blend that delivers complex citrus and nuts with a slightly sherried undertone. Not everyone’s taste perhaps, but it’s your party.

38

If varietals are more your thing, Licanten Cabernet Franc, Idahue Estate La Ronciere 2018, (13.95, Corney & Barrow) from Chile’s Central Valley has all the elegance of the Loire’s finest but with a maritime influence that delivers a balanced, super smooth and very comforting glassful. ●

a cordon sanitaire around the majority of Cava and Prosecco, in favour of plenty of Crémant, English Sparkling and Champagne for the high days.

Don’t think of offering me that Sauvignon Blanc you bought on the corner, I will take Chardonnay for preference but look at where it comes from (and the alcohol level) please. Be very wary of cheap varietal Merlot, prefer Syrah over Shiraz for value and if you are feeling generous a reliable Cabernet or Pinot Noir can be sourced from the New World without too much effort.

For old fashioned class given a modern polish, look no further than Chianti Classico Badia a Coltibuono, 2018 (£16:50 Berry Bros. & Rudd - www.bbr.com). It’s a properly generous drop, classically proportioned with a grown up cherry sourness and fine tannins.

Equally reliable but sometimes overlooked is Chenin Blanc and Old Vines Cellars 2019, Stellenbosch (£12.25 Corney & Barrow - www. corneyandbarrow.com) demonstrates perfectly how to produce an intensely fruity white with a delicate touch of acidity. ● maritime ceo

GADGETS

Ever wanted to fly in a drone?

F

lying drones remotely is definitely a lot of fun, but for those who have always wanted to go a bit further, the Jetson ONE, a personal electric aerial vehicle, AKA a funky drone you ride in, might be a good option. It weighs 86kg, and its eight engines allow it to fly at a maximum speed of 102 kph with a service ceiling of around 1,500 ft, carrying a pilot weighing up to 95kg for about 20 minutes — the apocryphal average life span of WWI pilots. Production starts in summer 2022, with a build slot requiring a deposit of $22,000, although all slots for 2022, as well as most of 2023’s slots, are sold out. Why? Because it’s a drone you can fly, and why wouldn’t you want that?

Jetson ONE www.jetsonaero.com $92,000

Rugged power

B

udding Jetson pilots might do well to pack a few Goal Zero Venture 75s.

Larger than the average battery pack, it holds up to 19200 mAh in charge and supports fast charging and a 60W USB-C port. It could probably survive a crash, as it is a hugely sturdy build, with rubber coating and a protective cover for the power ports that protects it from dust, sand and submersion in up to a meter of water for at least 30 minutes. t also sports a 50 lumens torch in one corner and fully recharges in about two hours from the mains, but it is also designed to recharge with Goal Zero’s Nomad line of solar panels, although that would take longer depending on the sun and solar panels used.

I

Goal Zero Venture 75 Power Bank www.goalzero.com $120

Star printer

A

while ago we enthused over the Elegoo Mars, as an elegant Photocuring LCD Resin 3D printer solution. Their new offering, the Saturn, is a rather bigger version (290%), as the name suggests. Those up to snuff in orbital mechanics might also have surmised it should be faster, and they’d be right — it’s about 60% faster than the Mars thanks to a resolution of 3,840 x 2,400 giving a 2-3 second per layer speed.

It also sports an ethernet port, to speed up file transfer as well. The Z-axis movement now uses a double linear guide-way for smoother and more accurate movement, ensuring even better results. You might say the Saturn runs rings around the Mars.

Elegoo Saturn 3D Printer www.elegoo.com $500

ISSUE FOUR 2021

39

REGULAR BOOKS

The boundless seas Paul French with some notable tomes on the world’s oceans

T

oday, China is Latin America’s top trading partner. Of course, China had always traded with the region but in recent years things have become more focused. In 2019, Chinese companies invested $12.8bn in Latin America, up 16.5% from 2018, concentrating on regional infrastructure such as ports, roads, dams and railways.

Chinese purchases of minerals and agricultural commodities helped South America stave off the worst privations of the 2008 financial crisis. And Covid19 has only accentuated the relationship with China as a key customer and investor helping to keep embattled countries afloat. So, understanding the Latin America- China trade relationship is important. A few titles that may help are below.

Maybe a good place to start is a general book on the region and Fernando Calderon and Manuel Castells’ The New Latin America is a very useful guide. Moving from country to country the book examines the twin forces of widespread inequality and poverty, which have triggered social explosions as opposed to technological modernisation and the emergence of new middle class consumer groups. Where Chinese investment, trade and influence fits within these new societies morphing

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between old identities and new is a particular strength of the book. After reading The New Latin America and gaining some familiarity with the region it’s time to dive a little deeper.

China-Latin America and the Caribbean: Assessment and Outlook

by European editors Thierry Kellner and Sophie Wintgens is perhaps a little academic but useful for those deep-diving the Latin America/China relationship. Much more has been written on the China-Africa relationship and in many key respects the Latin AmericaChina relationship is the same, but different. The emergence of new forms of dependence based to a degree on the deindustrialisation phenomenon throughout Latin America that allows space for Chinese investment. Similarly it considers Latin America as a zone where China and the United States are engaged in a highly competitive game for influence in the region.

Looking particularly at Chinese finance and investment in the region is Stephen B Kaplan’s Globalizing Patient Capital: The Political Economy

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of Chinese Finance in the Americas.

Kaplan argues that China’s “patient capital” (another way of saying long term investing) endows national governments with more room to manoeuvre in formulating domestic policies. Though the author also notes that Chinese lenders may not react well to developing Latin American nations’ ongoing struggles with debt and dependency. Kaplan believes that by looking at how China is investing in the region we can see a new form of globalisation showing the costs and benefits of state versus market approaches to development.

And finally, China’s investments in Latin America have spawned some push back from the US. To understand why Washington is wary of Beijing, what it might do to counter growing Chinese influence and how Beijing may, in turn, respond to that the multi-authored Countering China in Latin America and Africa on Trade: A United States Foreign Policy Perspective is a useful collection of essays to mull over when considering the bigger question of the region’s trade relationships. ●

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The seas are the historic connectors of people

maritime ceo

REGULAR TRAVEL

Hitting the slopes Scandinavian style Heading to Oslo for the rescheduled Nor-Shipping? Here’s some winter sport tips

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or the intrepid making it to Scandinavia next month, there’s vast amounts of winter sport on tap. It’s time to swap the sunglasses for ski goggles.

Skiing Norway is generally for more adventurous powderhounds looking for something completely different.

Whether it is a traditional and fun ski resort near Oslo or Bergen, summer glacier skiing overlooking fjords, or remarkably wild and remote ski touring above the Arctic Circle like Narvik, Lyngen Alps (Tromso) and the island of Svalbard, Norway has it all.

Ski resorts in Norway are generally smaller and lower than those in the main European ski destinations of Austria, France, Italy or Switzerland.

That said, there is no need for a ski resort to be high elevation this far north of the equator. You can breathe easy while skiing in Norway as most ski resorts summits top out at less than 1,200 m above sea level.

ISSUE FOUR 2021

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Skiing Norway is generally for more adventurous powderhounds looking for something completely different

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Norway’s largest ski resorts are all within a 400 km radius of Oslo and the coastal city of Bergen. Trysil ski resort gets the chocolates for Norway’s biggest (and busiest) skiing area. It has over 70 km of ski trails and 30 modern lifts across its 700 m skiable vertical. Second is Hemsedal ski resort with over 44 km of trails, 18 lifts and a healthy vertical of 830 m. Norefjell, closer to Oslo, has the highest skiable vertical of over 1000 m.

Classic Norwegian ski resorts in the Telemark region near Rauland and north of the Winter Olympic host town of Lillehammer, including Hafjell and Kvitfjell, are worth a look too. East of Bergen are two great little ski resorts called Voss and Myrkdalen.

Perhaps Norway’s snowiest ski resort, Roldal, gets a not too shabby

11 m of snow every year - enough for a snorkel to be required on occasions.

Above the Arctic Circle in the land of the midnight sun and the Northern Lights (Aurora Borealis) the intriguing Narvikfjellet rises above the fjords in dramatic style. One can even ski in summer at the quirky Stryn Sommerski Centre or the Fonna Glacier ski resort.

To get the most out of Norway’s ski terrain, long late spring days and gorgeous coastal scenery, getting away from the ski lifts is essential. Ski touring in Norway opens up countless mountains where solitude, beauty and unsullied powder reign supreme.

And for those for whom time is limited from the exhibition floor, head on out to Holmenkollen, a ski resort that is a short tram trip from Oslo central. ●

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REGULAR OPINION

The bell tolls at sea Steven Jones, the compiler of the Seafarers Happiness Index, on the collective mood onboard

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ing, ding, ding, ding…No it’s not your phone, but a metaphorical ringing of the bell around the necks of seafarers that most countries would probably like them to wear. Indeed in the latest Seafarers Happiness Index, reports emerged of crews increasingly being viewed as the new lepers, pariahs to be kept as far away from the population as possible.

Unfortunately, all kinds of ‘Covid theatre’ seem to be emerging, in which seafarers are asked to do things that erode credibility and make life at sea even more exasperating and frustrating than it already is.

Seafarers feel they are being painted as “bringers of disease” when visiting nations. The self-same places are desperate to access the goods, materials, fuels and food which these crews bring to them. Why, is there such a disconnect between the good that seafarers do, and the bad reception they get when doing it?

As many nations are currently experiencing, when transport links

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are stretched or broken, shortages occur. Sadly, very few seem to be joining the dots and understanding that shop shelves are ultimately stocked by the seafarers who get the things through in the first place.

To read of seafarers stating that they feel unwelcome is as depressing as it is wrong. Alas, until the global importance of shipping is hammered home, then crews will continue to be treated badly.

In an airport, it is easy to spot seafarers, dressed in cheap paper approximations of hazmat suits and herded together, only lacking the plague bells to seemingly warn people of the dangers coming around the corner. Some have even been forced to wear plastic sauna suits.

Lest we forget, it is seafarers who are increasingly vaccinated, who are frequently tested and who actually often spend whole ocean passages as a form of quarantine. Yet, they are the people forced to dress for effect.

This is humiliating, it does little to protect anyone from the virus and is another sign that wider society and

the authorities in many nations do not understand, appreciate or recognise the importance of seafarers.

It seems there is a real problem brewing as skilled, knowledgeable and experienced seafarers decide that they will not return to the sea.

We heard from many seafarers, particularly those aged 35 and over, that they were not intending to return to sea once they eventually got home. The challenges of balancing home life with the uncertainties that the crew change crisis have seen those who may have been tentatively considering a move ashore accelerating their career change plans.

The issue of retention in an already stressed workforce is a major concern. The expertise that is potentially going to be lost should serve as a warning to all. A profession that is becoming more difficult, less enjoyable, less rewarding, and one which is talking about the death knell of unmanned ships, should not be surprised that it will become ever more difficult to attract and retain people. ● maritime ceo

REGULAR OPINION

Shipping still waiting for its blastoff moment Bart van Steveninck has been lapping up a new Netflix series, Countdown: Inspiration4 Mission to Space, while lamenting how far behind shipping is when it comes to blue sky thinking

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he space industry has always been an industry of excellence, with astronauts embodying a human being in optima forma, engineers excelling with their ingenuity, and the supportive departments undertsanding they are of similar importance, all high tech almost where man and machine becomes one.

Watching Netflix’s series about SpaceX’s Inspiration4 I see motivated people making use of all the knowledge which mankind gained over thousands of years and combining it into one purpose, sending an X amount of weight, over X amount of distance in X amount of time considering external factors such as gravity, remoteness, pressure and many more. Their mission: the road to making humanity multi-planetary.

We can see many similarities with shipping. Factors such as distance, time and weight are the main parameters with external factors like wind, currents, waves and remoteness also playing their part.

But let’s pause here. What we see and have seen in shipping is not anywhere close to space industry companies like SpaceX and RocketLab. Take the factor weight as an example, we see hundreds or even thousands of tons to be shipped from one side to the other side of the world. The word ballast says it all.

Is there no other possibility to keep your GM negative or preventing your ship to turn turtle? Aside from ballast, weight is represented in so many other things onboard.

ISSUE FOUR 2021

Let’s ship 23,000 containers in one go. Getting from point A to point B as fast as we can makes sense, right? Perfect for lean managers, keeping their inventories low. But what if a part of the containers contain commodities needed for intermediate products, required in a few months or years from now?

They go with the same speed as the containers required yesterday and unfortunately you can’t beat physics.

Let’s dump thousands of containers in one hub or vice versa. Let’s bring in 230,000 gt in to offload a couple of hundreds of containers and have it shifted hundreds of miles by truck further in the supply chain. All for the economies of scale, right?

Nothing wrong with the economics but aren’t we heading towards a disadvantage of scale when taking into account the last big invention years ago which changed shipping – the container.

Shipowners have become financial institutions with operational personnel. A team already under pressure to keep the fleet running get

thrown some cash to buy a new ship.

“It’s chartering who require a new ship and our task is to get it under budget,” say the operations team.

Life can be so complex and simple at the same time. It’s not to blame chartering or operational teams but both are acting in a bad marriage. The fact Ikea, Walmart, Amazon and many other charterers are stepping into the actual shipping business whether this is for environmental reasons or to overcome current congestions must be a sign on the wall. Why continue being a shipowner if you are just stuck in the middle leading a dull, grey experience?

The current situation in shipping can be compared to the time when Virgin Air was founded. They changed many airlines’ business models.

Another quick comparison can be made with the current position of Volkswagen. Now these are cycles we have always seen in industries, and the positive side is that every day we’re getting closer and closer to a new era where a one-eyed man will stand up in the land of the blind. ●

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SPLASHBACK REGULAR

Your thoughts You lot certainly have plenty of views on all things shipping. Below are some of the best recent reader comments to Splash articles

Tobias Koenig on Maersk’s new designs for its series of big methanol boxships: “Personally, I don’t like the design with the bridge right on the bow, but it’s ok if your ship is autonomous and operating without crew – probably a feature which will be announced at a later stage.”

David Boffey discussing the risks of a strike at US west coast ports: “International Longshore and Warehouse Union is about as international as the World Series is global.”

M.T. Vassel questioning the United Nations’ ability to crack down on shipping emissions: “The UN’s big stick is little more than a foam finger. Shipping is a laggard because the IMO and the UN allow it to be.”

Jeff Walther on the thorny issue of nuclear propulsion: “The nuclear electricity industry is the only industry that keeps track of all of its waste and pays in advance for the long term management. What’s going to happen to all those wind turbines as they wear out. Is there a fund to decommission them?”

Frank Coles on the disappointing meet up of the Marine Environmental Protection Committee at the International Maritime Organization (IMO): “The IMO, the useless body, will continue to pontificate while the Maldives and Marshall Islands sink below the waves of ineptitude.”

Alan Alberry with some career advice following our reporting of greater pollution near major hub ports thanks to congestion brought about by the pandemic: “‘…killing people who live near ports’. What nonsense. Seriously, be a real journalist or join the Democrats. You can’t be both.”

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maritime ceo

Singapore / September

Monaco / October For further information contact grant@asiashippingmedia.com or visit www.splash247.com.

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Holger Börchers

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