Was COP 15 a cop out

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					                                                         January/February 2010




                      Was COP 15
                       a cop out?
India   n   Classification   n   Tough year ahead   n   Seascapes
January/February 2010

Contents
                                AM CoveR stoRy
                                17 The universal scepticism, regarding an accord being
                                   reached at the vital climate change talks in Copenhagen
                                   in December 2009, was sadly almost completely justified.
                                   Much of the blame falls to the world’s two largest
                                   economies. One scrap of comfort can be taken away
                                   from the fiasco, however. The International Maritime
                                   Organization and leading participants in the shipping
                  Was COP 15
                                   industry will still push ahead with their drive to reduce the
                   a cop out?
                                   sector’s carbon footprint.

                                                 AM FeAtURes
                                                 12 India
                                                    Indian shipping companies are proving
                                                    resilient in the face of tough challenges

                                                 20 Container trades
                                                    Innovation the key

                                                 22 2010 preview
                        12                          Industry pundits dare to guess

                                                 26 Classification
                                                    Holding the hand that feeds them

                                                 AM ReGULAR CoLUMns
                                                 4 Comment
                                                   What shall we do with the year of the
                                                   seafarer?

                        22
                                                 6    Briefs
                                                      Sector by sector

                                                 8    News line
                                                      Workers go home

                                                 10 Launched
                                                    A jewel on the sea
January/February 2010                                                              asiamaritime    1
January/February 2010

Contents
                        AM ReGULAR CoLUMns

                        25 Seascapes
                           Balancing act

                        30 Events
                           Best time to show your profile


                   30   32 IMO
                           What’s happening at the house of
                           maritime

                        34 Operations
                           Look before you leap

                        35 Green Page
                           Shipping’s colour of choice

                   32   36 Ship’s store
                           Are hatch covers electric?

                        37 On the radar
                           e-navigation

                        39 Logistics
                           New truck routes

                        40 Brief encounters
                   36
                           Castles in the sand

                        42 Diary
                           Hong Kong’s watery grave

                        44 Maritime’s back pages
                           Danish blue



                   44


2   asiamaritime                                         January/February 2010
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Will 2010 be the year oF the
seaFarer or the pirate?
In January two appeals appeared in the shipping press: the                 to the STCW Convention and Code arises in Chapter VI of the Con-
first from the International Maritime Organization’s secretary             vention and relates in part to “provisions to ensure that seafarers
general Efthimios Mitropoulos; the second from Hong Kong Ship-             are properly trained to cope if their ship comes under attack.”
owners’ Association’s managing director Arthur Bowring.                         By his own admission Mr Mitropoulos concedes that some of
     Mr Mitropoulos’ appeal was for support of the IMO’s decision          the attractions in a life at sea include “traditional risks”, which, it
to make 2010 the Year of the Seafarer.                                     might be assumed, include injury or death. “Unfair treatment, de-
     The IMO is backing this gesture with what promises to be sub-         nial of shore leave and abandonment” are other perks that poten-
stantive amendments to the STCW Convention and Code due to be              tially await the budding seafarer.
adopted at a diplomatic conference in Manila in June.                           The amended Convention & Code should contribute to a re-
     The proposed amendments are many and various touching                 duction in the traditional risks. As for the other risks, the picture is
on the prevention of fraudulent certificates of competency; medi-          murkier and doesn’t get the attention it deserves in Mr Mitropou-
cal fitness standards for seafarers; marine environment awareness;         los’ generally upbeat portrayal of life at sea.
special training and competence requirements for personnel on                   Mr Bowring’s appeal, by contrast, was a plea to governments
certain types of ships including tankers, gas tankers and ro-ro pas-       to avoid 2010 becoming the Year of the Pirate. Despite concerted
senger ships; and much more.                                               lobbying by industry bodies, still, he insists, “notwithstanding the un-
     Also approved by the Sub-Committee, for submission to the             precedented degree of cooperation between the warships providing
June conference are a number of promotional schemes in the areas           protection to ships in the region” the response remains “insufficient”.
of technical cooperation; attracting new entrants and retaining sea-            Mr Bowring suggests there is a “concern that the international
farers; accommodation for trainees aboard ships; and the revision          community is not actively seeking to eliminate piracy and is in-
of model courses published by IMO. I should point out that my list         stead treating the current level of attacks…as tolerable.”
both of the proposed amendments and promotional work put for-                   This might be because “many governments seem oblivious to
ward for acceptance is not exhaustive.                                     the fact that ships carry around 90% of world trade, and that secu-
     Mr Mitropoulos calls it “an extremely significant undertak-           rity of major seaways is strategically vital to the functioning of the
ing. And this is “because, once the proposed amendments have               global economy.”
been adopted and have entered into force, the necessary global                  It is at this point where the two appeals meet in a common
standards will be in place to train and certify seafarers to operate       cause. Mr Mitropoulos wants to see the maritime community
modern ships, with their increasing technological advancement for          recognise and pay tribute to the seafarers’ unique contribution to
some time to come.”                                                        society and the vital part they play in the facilitation of world trade.
     With a head wind coming courtesy of the amendments, the               Mr Bowring wants governments to take more concerted efforts to
secretary-general claims it is [now] imperative for “shipping to           eliminate the piracy threat: a threat by the global maritime commu-
re-launch itself as a career of choice for high-calibre, high quality      nity to withdraw its souls at sea from harm’s way until something is
young people of today.”                                                    done could be the best recognition seafarers could hope to receive
     Just how realistic is this recruitment call? An important amendment   in the Year of the Seafarer. ]




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4     asiamaritime                                                                                                                 January/February 2010
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n Lines
Japan’s largest shipping companies set
a sombre tone to the New Year through
the pronouncements of their leaders in
January.
    Nippon Yusen Kaisha president Yasu-
mi Kudo led the charge into the valley
of misery by revealing that the country’s
largest logistics company would be slash-
ing its containership fleet by 50% in an
effort to stem the hemorrhaging of profits
in the years to come.
    Last year NYK had reduced its con-
tainership fleet by 45 ships to around 90
vessels or 360,000 teu. But this figure is
almost covered by the 40 boxships that                                                             NYK intends to cut its box fleet by half by 2015
are on order and will be delivered over
the next few years. However, Mr Kudo said that the slashing and         that 2009 had been the company’s worst ever year. Perhaps the
burning must continue until the NYK boxship fleet totals a mere 75      most vulnerable of the trio to adverse movements in the container
ships by 2015, giving the clearest indication yet that the company      sector, in the last 12 months the company has had to sell, recycle
is not of the “recovery is around the corner” school.                   or return 30 containerships. On the bright side, Mr Maekawa is
    Other assets that have felt the chop include 40 car carriers,       hopeful K Line will return to profitability by March 2011.
leaving a fleet of 90 such ships, plus the idling of two of its cargo      And yet, hope springs eternal in some places. So well has
jets and the disposal of 400 trucks. Truck and air cargo retrench-      Greek bulk carrier owner Diana Shipping done in its traditional
ment is a likely predecessor to a merging of the two logistics arms,    sector, it has decided to take a punt at container shipping, albeit
Mr Kudo said.                                                           at arm’s length. Diana’s chief executive and chairman Simeon Pal-
    Mitsui OSK president Akimitsu Ashida was equally downbeat           lios said in January that the company would invest $50m in a new
in his New Year address, claiming that the slump in container ship-     company in order to be come a minority stakeholder.
ping would last “three to four years”. MOL went into a remarkable          Closer to home, there is a new Korean line on the block in the
reverse as the crisis hit – original plans to boost the fleet by 140    shape of YSC Line. The new company, which is offering services in
ships became a cut back affecting 150 vessels. But with 150 ves-        Northeast Asia and as far as Indonesia, has picked up a number of
sels still on order to be delivered over three years, no doubt MOL      vessels from German owners and is reported to be operating three
will be ready for the upturn – at least at 2007 levels.                 services in the region with seven ships with capacities between
    In his address, K Line president Hiroyuki Maekawa openly declared   700 teu and 1,500 teu. ]




                                                                                   n Ports
                                                                                   Given the suffering that has been withstood at ports
                                                                                   around Asia, it might seem a little insensitive to talk
                                                                                   about the race to the top spot. But with Singapore
                                                                                   reporting that it handled 25.1m teu after a 13% drop
                                                                                   in box numbers, and Shanghai announcing through-
                                                                                   put for the year of 25m teu, might there be a call for
                                                                                   a recount?
                                                                                       Meanwhile, two Chinese ports that have been
                                                                                   given New Year boosts are Yantai and Tianjin. In
                                                                                   mid-January Baosteel, China’s largest steel group fol-
                                                                                   lowed up on its 8% investment in Zhangjiang port
Box throughput dropped more than 14% in 2009                                       with a $99m payment for a 20% stake in Yantai port.

6   asiamaritime                                                                                                           January/February 2010
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           In line with Baosteel’s core interests, expansion of Yantai is ru-      The last significant player outside of China to declare
           moured to include new bulk terminals and logistics facilities.       figures for 2009 was Busan Port, which handled 11% less
               At Tianjin port a little local maneuvering has seen Tianjin      boxes during the year, totaling 11.95m teu. Out of the total,
           Port Development Holdings arrange a HK$1.6bn ($208m) loan            transshipment boxes reached 5.37m teu, a 7% decline on
           and sale of close to a billion shares for HK$2.5bn in order to       2008.
           take a controlling stake in the similarly-named Tianjin Port            There’s a nice irony in Shanghai Zhenhua Heavy Industry’s
           Holdings.                                                            deal to build an automated container terminal at Coafeidian
               The surprise story in January was news that Malaysia’s Port      port, China’s second largest coal facility.
           of Tanjung Pelepas defying the odds in 2009 by recording a              Chief among the reasons for SZHI’s clinching of the deal
           7.5% increase in handling volumes to 6m teu. Port chairman           was the manufacturer’s claim it would develop a green auto-
           Sidik Shaik Osman said that markets would continue to be             mated terminal. SZMI will install a self-developed, energy-
           challenging in 2010: his competitors should be so lucky. But         saving, automated container loading system. The system not
           then China’s Dalian Port did not get hit too badly either as it      only lowers carbon emissions for the port, but also boosts the
           virtually equaled its 2008 total of 5.5m teu last year.              efficiency of the port’s operation.
               Although a part of China, Hong Kong faired badly. With a            The new terminal will be developed in two phases and
           14.5% drop in containers handled, the annual total dropped to        begin operations in 2011 with an annual capacity of 300,000
           20.9m teu, down from 2008’s 24.5m teu.                               teu. ]




           n shiPyards
           Even before the gun went off, announcing the 2010 race for
           newbuilding orders, South Korea’s Samsung Heavy Indus-
           tries and Daewoo Shipbuilding and Marine Engineering left
           their rivals in the dust by slipping in some significant orders
           in the dying days of 2009.
               The long-held cruise ship aspirations of Korean yards
           were finally met when SHI announced in December it had
           signed up for a $1.1bn floating residence ship from Utopia
           Residences due to be delivered in 2013.
               Then along came Daewoo Shipbuilding and Marine En-                                                       Samsung’s cool move into cruise
           gineering with two drillships and a semi-submersible drilling
           rig worth a total $1.6bn from as yet unknown owners. But the         this year and 2011. The owners cited a slipway for the vessels
           more important news was that DSME was moving in on its own           was still not built and would not be ready for the vessels to be
           cruise ship deal with Cypriot cruise company Louis Cruises. Thus     delivered on time: not that most owners are in a hurry to receive
           far Louise Cruises has sought to pour cold water on the rumours      newbuildings.
           stating that it is only “in talks” with DSME but the Korean press        South Korea’s SLS Shipbuilding joined 21st Century in a debt
           has been fizzing with optimism that a deal could be announced        restructuring bid in January, but there have been few other signs
           by the Lunar New Year.                                               in the country that its shipbuilding sector is seriously consolidat-
               At the other end of the scale, the vultures are surrounding      ing. By contrast in China, industry body China Association of the
           21st Century Shipbuilding of South Korea. In mid-January the         National Shipbuilding Industry, reported that many smaller pri-
           yard was forced to apply for debt restructuring and a workout        vate shipyards have been forced to close after failing to pick up a
           programme that is likely to put Korea Development Bank execu-        single order in 2009.
           tives on the shipyard’s board for a while to come.                       CANSI was short on numbers but insisted that where orders
               A second blow was subsequently dealt to the yard when it         could be picked up last year, owners had shifted almost exclu-
           emerged that Greek shipowners Laskarides Shipping, Primerose         sively to the state-owned yards of China State Shipbuilding Corp
           Shipping and Hellenic Star Shipping had been working together        and China Shipbuilding Industry Corp and their affiliates. Some
           to cancel seven 34,000 dwt bulk carriers contracted at 21st Cen-     65% of China’s shipbuilders failed to gain orders in 2009, CANSI
           tury for around $36m each. The vessels were due for delivery         said. ]




           January/February 2010                                                                                                asiamaritime         7
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LIFe gets Heavy at HanJIn
Hanjin Heavy Industries and Construction’s discarding of 750 workers
illustrates how deep the downfall has gone
                                                                           off of its technology headquarters (design and engineering), which
                                                                           employs 500 workers.
                                                                               According to a Seoul-based analyst: “As a result of HHIC’s
                                                                           plans to capture a slice of the offshore market for drillships and
                                                                           floating production, storage and offloading units, it is looking to
                                                                           nurture and grow its research and development capabilities.
                                                                               “HHIC would probably provoke an uproar amongst the
                                                                           unions if it was seen to be espousing the downsizing of the ship-
                                                                           yard while expanding R&D. This is what has provoked the spin-
                                                                           off decision.”
                                                                               The move toward offshore has – for the time being – saved the
                                                                           6,000 workforce at HHIC’s Subic Bay shipyard in the Philippines.
                                                                           Unofficially HHIC has said it hopes to pick up offshore orders start-
                                                                           ing this year or in 2011.
                                                                               According to analysts HHIC is not expected to see any notable
Hanjin Heavy industries and Construction’s reselling of one                improvement in its 4Q09 results (as yet unreleased when going to
of four 6,500 teu containerships ordered by CMA CGM, is perhaps            press) from its disastrous 3Q09 performance.
just the highest profile example of the trouble being experienced              The construction operating margin may edge up, but ship-
by the South Korea shipbuilder over the last 18 months.                    building will remain in the doldrums as productivity levels remain
    Looking on the bright side, CMA CGM’s default on payments              very low due to a slowdown in work progress becasue of delivery
is likely to see Hanjin Heavy quids in after reportedly selling the        delays and the continuing uncertainty surrounding the fate of the
vessel for more than the $40m outstanding from the French liner            CMA CGM orders.
company.                                                                       But it is HHIC’s inability to capture orders during the dying
    The CMA CGM fiasco, followed similar difficulties with three           days of the good times that will cause the deepest concerns in the
vessels ordered by Iranian International Shipping Lines. IRISL paid        dry months ahead.
for two of the three vessels only after HHIC threatened to put them            In 2008, orders were pouring in at the yards of its main rivals
up for auction. IRISL is expected to pay in full for the last vessel be-   Samsung Heavy Industries, Hyundai Heavy Industries, STX and
fore the end of March this year.                                           Daewoo Shipbuilding and Marine Engineering, at least until the
    But there are deeper symptoms of problems than the CMA                 summer of that year. Meanwhile, HHIC managed just 19 vessels
CGM default concerns. Thus far HHIC is the only premier league             worth $1.9bn. The ships booked included 15 capesize bulkers, two
South Korean shipbuilder to announce major lay offs. In Decem-             very large crude carriers, and two 3,400 teu containerships (later
ber 2009, the HHIC management said it was casting off at least             cancelled).
30% of the domestic workforce, which equates to 750 workers.                   When the company’s peers were rummaging around for scraps
    By the end of 2009, 350 employees had taken advantage of a             in 2009, HHIC picked up no orders, as it continued on a failed
voluntary retirement package, which included normal severance              sales policy of marketing mid-size containerships when it was the
pay of one month for each year served plus some additional one-            least desired vessel type in a boxship business slump.
off payments.                                                                  HHIC’s current order book stands at 36 vessels worth $3.3bn
    According to management plans the remaining targeted 400               at its Subic Bay yard and 35 vessels at the domestic yard in Yongdo
employees will be let go by the end of February 2010, if planned           worth $2.8bn – clearly a respectable amount for most shipyards
labour union actions do not forestall the move, if only temporarily.       but not what might be expected from one of the oldest and most
    A further shake-up is expected in the way the company oper-            respected yards that until the slump was looking to build one of
ates in light of its intended re-entry into the offshore market. It is     the largest ship construction facilities in the world in the southern
reported that efforts to ease back into offshore include the spinning      Philippines.



8   asiamaritime                                                                                                            January/February 2010
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COsCO’s bOmbsHeLL
a suggestion by China Ocean shipping group’s president that his company
was weighing up the possibility of using nuclear powered ships sent
shockwaves through the industry
in tHese days of international terrorism and piracy on the high       1976, in response to an emerging interest in the commercialisation
seas, the last thing anybody at the China Marintec conference and     of nuclear propulsion.
exhibition in December 2009 expected to hear was a call for nu-
clear powered merchant ships.                                         did you know?
    But that is what they got from Cosco president and chief ex-      Amazingly four nuclear-powered ships including the Savannah and
ecutive Wei Jiafu when he revealed that Cosco had already begun       the Otto Hahn were technically successful. The Otto Hahn was
cooperating with China’s nuclear power group to study the idea.       designed to carry passengers and ore. Powered by a single 38MW
    While solving the CO2 issue at a stroke, clearly there would be   reactor, the ship made its first call at Casablanca in 1970 and went
significant obstacles to such a radical idea achieving fruition.      on to operate under nuclear power until 1979.
    Not least of these barriers to entry, according to Intertanko         In recent years the idea has re-emerged, to the point that at least
managing director Peter Swift, would be the huge demand for a         one nuclear-powered containership, along with more numerous ex-
new breed of engineer. Mr Swift told the gathering in Shanghai that   amples of icebreakers and a lash barge carrier are now in existence.
each vessel would need at least five engineers trained to operate         Buoyed by a surge in the price of fuel oil and the possible in-
and maintain the reactor – although he seemed to jump ahead of        troduction of a carbon emissions trading scheme, Lloyd’s Register
himself when warning that no                                                                                decided to revisit the technical
less than 500,000 engineers                                                                                 challenges of nuclear propul-
would be needed to man the                                                                                  sion, as well as refueling and
entire global merchant fleet,                                                                               waste disposal issues.
the prospect of which could                                                                                     LR is conducting its re-
not be envisaged in much                                                                                    search in the face of periph-
less than 50 years when – one                                                                               eral concerns including the
would hope-other alternatives                                                                               need for a cultural sea change
would have arisen.                                                                                          in the areas of marine engi-
                                                                                                            neering. The age-old ship pur-
not in my backyard                                                                                          chase model would also have
Of course the greatest deter-                                                                               to change as the cost burden
rent would be public opinion.                                                                               begins to be felt from the mo-
It has been only in recent                                                                                  ment of commissioning.
years that the silent majority                                                                                  ”The technology is there
has accepted that nuclear en-                                                                               to commence building nu-
ergy plants can be an accept-       Capt Wei drops a bombshell                                              clear ships. The issues regard-
able alternative to environ-                                                                                ing their acceptability and
ment-damaging coal plants, even with the memory of Chernobyl          the need for a cultural step-change in shipping still need to be ad-
on their minds. The thought of a nuclear-powered container ship       dressed so that society is comfortable any risk is being managed”,
turning up at Los Angeles port in the current climate is laughable.   says John Carlton, global head, Marine Technology & Investiga-
    But the idea of nuclear-powered merchant ships is nothing         tions, Lloyd’s Register.
new. Early in 2007, classification society Lloyd’s Register began         Depending on the success of alternatives such as fuel cells,
research into the implications of nuclear propulsion for merchant     the likelihood is that nuclear propulsion will make some stealthy
ships and Germanischer Lloyd is also thought to have undertaken       progress from its nascent beginnings in icebreakers that operate
similar research.                                                     primarily out of harm’s way.
    Lloyd’s Register drew on its experience of the more traditional       Meanwhile, the possible consequences of a nuclear merchant
nuclear industries and from studies that led to its “Rules for the    fleet are more likely to be played out in the type of Hollywood
Nuclear Propulsion of Ships,” which were available from 1966 to       blockbuster that could put public acceptance back many years.

January/February 2010                                                                                                   asiamaritime       9
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The FirsT oF Noble’s gems
Noble, HoNg KoNg-headquartered, Singapore-
listed commodities supply chain group, has kicked
off a $320m fleet expansion by taking delivery
of the 92,500 dwt Ocean Garnet, the first of five
bulkers on order in Dalian, northern China.
     The ship, which was named in mid-January
was already on its maiden voyage as Asia Maritime
went to press. The Hong Kong-flagged bulker has
been chartered to Korea Line for five years. The
vessel is one of four post-panamax and one cape-
size bulkers due to be delivered between January
2010 and December 2012. The vessels, including
Ocean Garnet, are being built by Cosco Dalian.
     The four Noble post-panamax vessels, which
have been classed by Lloyd’s Register, were part of
an order for eight ships that were jointly ordered                       While the post-panamax bulkers will be deployed on long-
with Dutch shipowner Vroon. The three remaining vessels in No-       term charters, the capesize ship will be deployed on Noble’s own
ble’s share of the order are scheduled for delivery in June 2010,    trades.
March 2012 and December 2012. The capesize bulker will be                Fleet Management, Noble’s ship management offshoot, will
delivered in the fourth quarter of 2011.                             manage all eight post-panamax bulkers. ]




 K liNe’s New bulKer: Tailor-made
 For JapaNese porTs
JapaN’s KawasaKi KiseN Kaisha has boosted its dry bulk fleet             The vessel was launched in December and has been fixed on
after naming and taking delivery of the 88,106 dwt Corona Op-        long-term time charter to Japanese electricity utility, Joban Joint
timum, the latest of the Corona-series bulkers built for K Line by   Power, to transport thermal coal to the company’s Nakoso thermal
Imabari Shipbuilding.                                                power station. The current trade route of the ship is between Aus-
                                                                                               tralia and Japan.
                                                                                                   The Corona series of bulkers, which
                                                                                               feature a shallow draft and a wide
                                                                                               beam, was specially designed by K Line
                                                                                               to serve Japan’s relatively shallow draft
                                                                                               ports and terminals.
                                                                                                   The Corona Optimum, which has
                                                                                               been flagged in the Marshall Islands
                                                                                               and classed by ClassNK, has a full
                                                                                               draft of just 13.8m with a 38m wide
                                                                                               beam. Unlike most panamax vessels,
                                                                                               the Corona series have just five cargo
                                                                                               holds.
                                                                                                   K Line is planning a fleet of 15 Co-
                                                                                               rona-type bulkers, although most have
                                                                                               already been delivered. ]

10    asiamaritime                                                                                                    January/February 2010
In the coming issues of Asia Maritime you’ll
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important maritime nations – and those
emerging. You will also gain important
insights into industry sectors and the region’s
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amindia         amamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam




WayS to SurvIval aNd groWth
Shirish Nadkarni discovers that Indian shipowners are undeterred
by the downturn

After A four-yeAr                                                                                                     the desired level of 20m gt
period of unbridled pros-                                                                                             in 2012 – to merely hang
perity between 2004 and                                                                                               on to the current market
2008, when shipowners                                                                                                 share of 12% of the coun-
laughed all the way to                                                                                                try’s cargo!”
the bank and went on an                                                                                                   There is no question
ordering spree, the global                                                                                            that fiscal 2009-10 has
economic meltdown from                                                                                                thus far been a difficult
the third quarter of 2008                                                                                             time for the state-run SCI,
has meant smaller cargoes                                                                                             whose fleet has a pre-
to be carried at lower                                                                                                dominance of tankers that
freight rates, even as ship-                                                                                          have been suffering from
yards have been turning                                                                                               poor freight rates.
out increasingly larger                                                                                                         “ S C I ’s n o r m a l
vessels.                        SCI names bulk carrier Desh Virral
                                                                                                                      policy is to tie one-third
     During periods of re-                                                                                            of its fleet in contracts
cession and shipping overcapacity, different strategies have been            of affreightment with public sector refiners,” says Mr Hajara.
adopted by shipowners in order to survive. In such a cyclical in-            “A further third of our tanker fleet is chartered out for periods
dustry, assessing where the company presently stands in the cycle            extending from six months to one year, and the final one-third is
is all-important, and timing can be everything.                              retained in the spot market to take advantage of any spikes.”
     India’s largest private sector shipowner Great Eastern Shipping
Co has long indulged in judicious asset trading, maintaining cash in         Box trades
the bank for purchases when a bargain floats across the horizon. The         Even though liner shipping has been in the doldrums over the
company has of late shed a fair portion of its tanker tonnage, and is        past two years, SCI has announced that it will invest in three new
instead concentrating on shoring up the fleet of its four-year old sub-      3,250-teu containerships to take advantage of the recent recovery
sidiary, Greatship Limited, which operates in the offshore arena.            in box rates. It is also planning a slew of newbuildings in the off-
     For Indian shipping companies, the major worry is that the              shore sector, which has demonstrated huge potential in India.
share of the country’s cargo on Indian bottoms                                                          In fact, at the start of the Eleventh Five-
has dropped over the years to 12%, and is                                                           Year Plan (2007-12), the national carrier had
shrinking with each passing year. Even to main-                                                     announced that it would be acquiring 72
tain this level of cargo share by 2012, experts                                                     vessels over five years to augment its fleet as
believe that expenditure of $20bn on ship acqui-                                                    well as replace tonnage that would need to
sition is a must, with the current fleet of 9m gt                                                   be scrapped. This plan is being adhered to.
required to go up to 20m gt.                                                                            As a general policy, SCI prefers new-
     “Over the years, Indian shipowners have                                                        buildings to used vessels. However, the
built up a reserve of $600m for vessel acquisi-                                                     market currently is ideal for cherry-picking
tion – which, if one accepts a standard debt-eq-                                                    second-hand tonnage; and the company has
uity ratio of 80:20, would allow them to borrow                                                     been looking seriously at this alternative.
enough to have $3bn in the kitty for acquisition,”                                                  It has said it will be buying six used ships,
says Shipping Corporation of India (SCI) chair-                                                     comprising two tankers, two bulk carriers
man and managing director Sabyasachi Hajara.                                                        and two offshore vessels.
     “Since old vessels aggregating some 4m gt                                                          While SCI has been reasonably healthy
will have to be scrapped from the current 9m gt          Shipping Corp of India chairman and
                                                                                                    thus far, it expects heavier weather ahead
fleet, some 15m gt will need to be added to touch        managing director Sabyasachi Hajara        in 2010-11. But some of the private sector


12    asiamaritime                                                                                                            January/February 2010
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                ”Since we got into dry cargo about four years ago, we have
                built up the largest fleet of dry bulk vessels among all Indian
                owners.” Mercator lines chairman harish Kumar Mittal

           Indian shipowners have surpassed themselves in tiding over the
           shipping recession.


           Mercator Lines
           One such is Mercator Lines, the country’s second largest shipowner
           in India behind GESCO.
               Within the space of six years, the Mercator Lines fleet has
           grown from a mere 400,000 gt to over 2.4m gt. And even the basic
           character of the fleet has changed. Where Mercator was a pre-
           dominantly single-hulled tanker company until 2005, determined
           forays into bulk shipping, dredging and offshore have given its fleet
           a totally different look of late.
                “We decided to beef up our bottom-line by going in for some
           backward integration,” says Mercator Lines chairman Harish Kumar
           Mittal. “Since we got into dry cargo about four years ago, we have
           built up the largest fleet of dry bulk vessels among all Indian own-
           ers. We have acquired some coal mines in Indonesia with the idea         Mercator Lines chairman Harish Kumar Mittal

           of bringing our own coal from there for India’s power plants.”
                  The ploy has worked well for Mercator. The coal from its              The company has entered the ports sector, where it will build
           mines gets sold to Indian power plants, which are always on the          container terminals that should bring in revenues throughout
           lookout for long-term supply sources, even as its fleet gets fixed for   the year. It has also bid for bulk projects such as a coal berth at
           a long period of 12-15 years.                                            Mormugao port, an iron ore berth in Visakhapatnam and a multi-
               The company has purchased four dredgers in 2008-09, and is           purpose berth at Paradip port.
           in the process of buying more vessels to exploit this lucrative field         “We are also setting up a 30m tonne port at Hazira in Gu-
           in India. In addition, it has got into the field of oil exploration by   jarat to handle the captive import cargoes of Essar Steel,” says Mr
           purchasing some on-shore blocks.                                         Ashok. “The port will also be used to export finished products
               “We have acquired our own jack-up rig from Keppels Fels of           from the steel plant. We are also setting up a 20m tonne coal
           Singapore for our exploration business,” says Mr Mittal. “It has         berth at Salaya in Gujarat to handle the captive cargoes of Essar
           been fixed with Oil & Natural Gas Corporation through Great East-        Power.”
           ern Shipping for a period of three years. We are keen to increase            Simultaneously, ESPLL has launched a third-party logistics
           our drilling business in coming years, and expect to acquire more        business that will work mainly in-house for group companies Es-
           rigs, either new or second-hand.”                                        sar Oil and Essar Steel. Vadinar Oil Terminal will provide logistics
                                                                                    support to Essar’s 10.5m tonnes per annum refinery, and to Essar
           essar Shipping                                                           Bulk Terminal in its plans to sharpen focus on the ports sector.
           Another company to announce a slew of expansion plans in a time               “In our core shipping business, we have lined up a capital
           when recession has induced many shipping firms to offload ton-           expenditure programme of about $800m to acquire 14 ships be-
           nage, is Essar Shipping Ports & Logistics, the third largest Indian      tween 2009 and 2011,” said ESPLL’s managing director Sanjay
           shipowner in the private sector.                                         Mehta. “These will be a mix of tankers and bulk carriers.”
                “Over the past two years, we have comprehensively reorgan-              “Despite the worldwide shipping slowdown, we find that
           ised our businesses from being a mere shipping company into a            these are exciting times for us as we look ahead to consolidate
           full-fledged logistics outfit,” says ESPLL’s director V Ashok. “We       our business as well as enter into newer territories. The company
           have become an integrated player in India, a one-stop logistics          will aim to be a global services provider as well as add value to
           shop – which is unique.”                                                 its shareholders.” ]

           January/February 2010                                                                                                  asiamaritime         13
amindia         amamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam




MIxed FortuNeS For INdIa’S
ShIpyardS
Many of India’s shipyards are bearing up admirably and some are
even expanding, writes Shirish Nadkarni

InDIAn SHIpyArDS BenefIteD enormously from an order over-
flow in the period 2004-2007, due to non-availability of building
slots in East Asian shipyards. Subsequently, they were expected to
be hit by the financial meltdown in developed countries: instead
they are sporting healthy bottom-lines and order books packed
until 2013.
     India’s second-largest private sector shipbuilder Bharati
Shipyard has remained largely unaffected by the worldwide ship-
ping recession, and continues to flaunt a healthy orderbook of
Rs50.94bn ($1.06bn), including a recent Defence Ministry order
of Rs2.81bn for the supply of 15 interceptor boats for the Indian
Coast Guard.
     The synergy of operating from six locations – Ghodbunder,
                                                                         Supply vessel built at Cochin shipyard
Ratnagiri, Dabhol, Goa, Mangalore and Kolkata – on both coast-
lines of India has allowed Bharati the flexibility of constructing a
large number of vessels within a limited time period.                    order book looks perhaps the healthiest of all Indian shipyards,
     The company is currently in the process of expanding and            being packed all the way until 2013 with vessels whose aggregate
modernising its production facilities. It has plans to expand nation-    value is estimated at Rs114bn ($2.44bn).
ally, build larger vessels over 200m in length and oil exploration           “We have maintained our leadership position among Indian
rigs, the first of which is under construction at its Dabhol facility.   yards and have faced no cancellations,” says ABG group manag-
     Bharati is also attempting to push up both turnover and profit-     ing director Rishi Agarwal. “Looking at our clientele, and our track
ability with its new shiprepair facility on the recently-acquired        record of maintaining relationships, we think we should sail through
floating dock of Swan Hunter Shipyard of the UK. The dock has            this difficult phase without too many worries or cancellations.”
the capability to build aircraft carriers, navy vessels, rigs and            The group manufactures all kinds of marine ships, including
carry out shiprepair. Its machinery was upgraded recently and it is      bulk carriers, deck barges, interceptor boats, anchor handling
being commissioned at Dabhol in the Ratnagiri district of south-         supply ships, sub-sea multipurpose platform support vessels, div-
ern Maharashtra.                                                         ing support ships, tugs and rigs, for both commercial and govern-
     Bharati has made an additional investment in offshore serv-         ment interests.
ices provider Great Offshore. Bharati picked up a 43% equity                 The yard has recently added a new item to its list of offerings
stake and effective management control in the Mumbai-based               – the bulk carrier, and will build Supramax and Handysize bulk-
shipowner through creeping acquisition and open offers on the            ers – vessels in the 35,000 dwt and 54,000 dwt category. It has
Bombay Stock Exchange, following a six-month battle with ABG             bagged orders for an impressive 38 vessels from customers such
Shipyard.                                                                as Thailand-based Precious Shipping and Germany’s Vogemann.
     At the heart of the takeover war was the desire of the battling         The company has also ventured into the construction of jack-
shipyards to increase their exposure to the offshore vessel build-       up rigs capable of operating in 100m depths. Essar Oil has placed
ing market. Great Offshore alone has a fleet of over 40 floating         orders for two of these rigs.
assets, a number of which will come up for replacement over the              A third private sector Indian shipyard which could have
next three to five years. This could offer sizeable captive business     done as well as Bharati and ABG, but has hit a roadblock along
for a shipyard getting control of the firm.                              the way, is the Gujarat-based Pipavav Shipyard: its shipbuilding
                                                                         activities have been delayed by more than a year.
Swings and roundabouts                                                       The yard has on hand 22 orders for identical 74,500 dwt
ABG may have lost the battle for control of Great Offshore, but its      Panamax bulk carriers from international shipowners such as

14    asiamaritime                                                                                                        January/February 2010
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           Damaging delays at pipavav’s new drydock construction.



           Golden Ocean, Setaf SAS of France and Avgi Maritime Services                           taken by India’s Shipping Ministry to move the Visakhapatnam-
           of Greece. India’s state-run explorer-producer ONGC has ordered                        based yard out of commercial shipbuilding and into the fold of
           12 offshore supply vessels from the yard.                                              the Defence Ministry for the exclusive construction of nuclear
               The total order book is worth $920m at the originally agreed                       submarines for the Indian Navy.
           prices of $35-40m per Panamax bulker and $9-$10m per OSV.                                  The other major state-run commercial shipbuilder, Cochin
           However, thanks to the delay in setting up the drydock, the prices                     Shipyard has been making consistent profits in the past six years.
           of eight of the bulk carriers are being re-negotiated, while orders                    It has constructed a number of platform supply vessels following
           for four other ships are under arbitration.                                            the Rolls Royce UT-755-L design for global shipowners like Nor-
                                                                                                  wegian offshore service supplier Deep Sea Supply and Hellespont
           Brave move                                                                             Steamship Corporation of Greece.
           Small ship specialist, Chennai-based Tebma Shipyards, strangely                            “These ships, considered the workhorses of the offshore in-
           believes the shipbuilding boom has not run its course. It is plan-                     dustry, are highly sophisticated, and are fitted with dynamic po-
           ning to set up two yards, one each on the eastern and western                          sitioning systems, which enable them to automatically maintain
           coasts of India for an aggregate outlay of Rs10bn.                                     their position at sea accurately,” says CSL’s chairman and manag-
               “We are in the process of acquiring land up to 500 acres in                        ing director Commodore M Jitendran (Retd).
           each location,” said TSL’s chairman P K Balasubramanian. “The                              “We are in the process of constructing 20 other offshore ves-
           new yards will make our turnover grow twelve-fold, from Rs4bn                          sels for European and American clients, collectively valued at
           in 2007-2008, to around Rs50bn by the year 2015. We are also                           over Rs30bn. We hope to deliver another seven ships during the
           looking at acquiring shipyards in other Asian countries.”                              current fiscal year.”
               A m o n g t h e s t a t e - r u n ya r d s , H i n d u s t a n S h i pya r d a t       CSL was able to commission in July last year its Small Ship-
           Visakhapatnam did some fancy financial restructuring during the                        building Division, which was built for an outlay of Rs980m. CSL
           first half of the first decade of the new millennium, and appeared                     is also planning to build a new drydock that will lead to a 50%
           to have got over most of the problems that had thrust it into the                      expansion in capacity.
           red after 1995.                                                                            “We will continue to bid for coastal and naval orders,” says
                                                                                                  Commodore. Jitendran. “At the moment, we are building an air-
           Hindustan shipyard drops out                                                           craft carrier for the Indian Navy, to be delivered by 2013. Our
           However, the global economic malaise has blown a large hole                            current order-book has 18 vessels worth Rs30bn, and will keep us
           in the yard’s finances all over again. As a result, a decision was                     busy for the next four years at least.” ]

           January/February 2010                                                                                                               asiamaritime      15
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INdIaN portS SuFFer FroM
arreSted developMeNt
only after red tape was cut did Indian ports have a chance to fulfill their
potential, writes Shirish Nadkarni

At tHe StArt of the Eleventh Five-Year Plan (2007-12), the              2008-09 had been 575m tonnes, compared to the ports’ installed
Indian government had set itself an ambitious target of doubling        handling capacity of 530m tonnes and this figure is forecast to
the cargo handling capacity of the 12 major ports from 505m             rise to 690m tonnes for fiscal 2009-10.
tonnes to 1.017bn tonnes.                                                   Fortunately for the major Indian ports, the global economic
     But ambitrions have been cruelly thwarted and at about             downturn has had little impact on the cargo they handled in
halfway through the Plan’s span, the capacity addition has now          2009. An increase of 5.14% has been seen in the traffic handled
amounted to just 70m tonnes.                                            for the first three quarters of the ongoing fiscal year.
     In early-2009, the Ministry authorised port authorities to             Cargo traffic at the dozen major ports increased to 411.95m
award contracts to winning bidders in proposed public-private           tonnes for the nine months ending December 31, 2009, from
partnership projects in the ports sector without the mandatory          391.82 mt achieved in the April to December period of the previ-
prior approval of the Indian                                                                                  ous year. However, the ports
bureaucracy.                                                                                                  missed by 18.05m tonnes
     This move aided the com-                                                                                 the rather ambitious target of
pletion of 47 projects under                                                                                  430m tonnes set by the Ship-
the National Maritime Devel-                                                                                  ping Ministry at the beginning
opment Programme in 2009,                                                                                     of the year.
even as work began moving                                                                                         Interestingly, except for
in 71 others that carry an ag-                                                                                Kolkata (Kolkata Dock Sys-
gregate outlay of Rs164.88bn                                                                                  tem and Haldia Dock System
($3.53bn).                                                                                                    considered together), Ennore
     A further 68 projects out                                                                                and New Mangalore, which
of the 276 originally planned                                                                                 recorded negative growth in
under the programme, and                                                                                      cargo handling, the other nine
collectively worth Rs150bn,                                                                                   major ports saw an increase
are presently in the process                                                                                  in traffic.
of being awarded. It is forecast that the aggregate capacity of the         “It is a good sign for the ports sector, which many thought
major ports by the end of the Eleventh Plan will be around 750m         would face pressure over volumes this year due to the world eco-
tonnes, far short of the 1.017bn tonnes planned.                        nomic recession,” says K Janardhana Rao, chairman of the Indian
     In terms of investment, the government had earmarked Rs-           Ports Association.
550bn for the duration of the Eleventh Plan, but actual expendi-            The growth in volume was mainly attributed to an increase in
ture only started in 2009, when the real progress began.                the handling of ‘other cargo’ and iron ore during the nine months.
     Things began moving when an empowered committee was set                Shipments of ‘other cargo’, which includes general cargo
up to expedite the process and address issues like delays, largely      such as foodgrains, increased by nearly 20 per cent to 70 million
on account of security clearances and late finalisation of model        tonnes (from 58 million tonnes), and iron ore up by 9 per cent to
concession agreements.                                                  89 million tonnes (from 73 million tonnes).
     Now, with the capacity expansion programme in full swing,              While the handling of fertiliser (both raw and finished), con-
ports are expected to handle more traffic at the close of the cur-      tainers and coking coal saw declines in volume, the handling
rent financial year.                                                    of thermal coal and POL (petroleum, oil and lubricants) saw an
     The traffic handled at the 12 major ports for the financial year   increase. ]




16    asiamaritime                                                                                                           January/February 2010
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  Not so cool




                                                                                                                                       photo: Carnival
WaS COP 15 a COP-Out?
Hopes remain for a move forward at the International Maritime Organization
Marine Environment Protection Committee meeting in March after an
underwhelming result for all parties in Copenhagen, writes Sandra Speares

After the doors closed on the Copenhagen debate in Decem-                  He did, however, add that he greeted with “measured satis-
ber 2009, International Maritime Organization secretary-general        faction” that through the accord tabled at the end of the confer-
Efthimios Mitropoulos said the organisation would be studying the      ence, a step had been taken towards a future legally binding
outcome of the UN Climate Change Conference (COP15) in order           instrument.
to assess its impact going forward.                                        The timetable for such an instrument is likely to be a moot
    IMO is set to provide a report to the Marine Environment Pro-      point during this year’s deliberations, observers suggest.
tection Committee (EPC 60) in March on the outcome of its find-            The fact that Copenhagen has been an overwhelmingly politi-
ings “so that appropriate action - including re-adjusting our work     cal event is evident from many derogatory comments – although
plan so that the contribution of shipping is equitable, commensu-      some commentators have stressed that getting the relevant parties
rate and proportionate to that of other activities – can be taken on   to the table at all had been a move in the right direction.
a priority basis”, the secretary-general said.                             “Heads of state are firmly engaged, for the long haul,” com-
                                                                       mented Henry Derwent, president and chief executive of the Inter-
Half satisfied                                                         national Emissions Trading Association.
For his own part, Mr Mitropoulos said he had left Copenhagen               “A precedent has been set for the format and participation in
with mixed feelings and was concerned that the target – which had      highest-level climate deals. Developing countries have promised
emerged from the 2007 Bali conference – of a legally binding in-       unprecedented action and developed countries have promised a
strument had not been achieved.                                        step-change in funding. These are all advances of great significance

January/February 2010                                                                                                  asiamaritime      17
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for the future, even if they will not provide immediate new oppor-        As law firm Norton Rose put it in its blog of the event: “Much
tunities for the market,” said Mr Derwent.                            as there was a valiant effort to squeeze the Copenhagen Accord
     However, he also expressed disappointment over Copenhagen.       (which had already been described as a deal by developed coun-
     “Existing and imminent carbon pricing schemes will see no        tries) into a decision, even this proved impossible. And a decision
increase in demand as a result of the Copenhagen outcome. Useful      is no treaty. Instead, the accord was merely “noted”. This leaves the
texts on the CDM [Clean Development Mechanism] reforms were           Accord in a kind of limbo-land, though a number of parties have
fought to a standstill or more postponement on issue after issue,     emphasised their desire to make it legally binding in the future.”
often for purely political reasons.                                       The law firm says that the tight financial timetable – with
     “The development of new scaled-up private sector mecha-          $30bn to be raised within the next two years alone – means finan-
nisms made little or no progress this time round. It suited some      cial activity will need to start very quickly.
negotiators to disparage markets and private finance. The slow            “We note that the Accord devolves a number of functions to
stranglehold on the CDM market has not yet been broken.               the COP. However, as the COP was unable to marshal the con-
     “Most developed countries emphasise the importance of mar-       sensus required to adopt the Accord as a COP decision, this could
kets, but their vision is not compelling enough to overcome the       create an interesting dynamic to next year’s negotiations.”
suspicions of the developing world,” he concluded.                        Norton Rose identifies contentious areas that need to be clari-
                                                                      fied as the negotiation of a second commitment period of the Kyoto
Cool                                                                  Protocol, and the fact that the accord does not refer to entering into
Parties to the accord have agreed to hold increases in global warm-   a legally binding instrument.
ing to below 2 deg C although many delegations had been calling           “In general though, it has to be taken as a positive sign that
for a 1.5 deg C target.                                               heads of states and the world’s largest emitters are actively engaged
     Meanwhile developed countries will provide funding and tech-     in this process. Perhaps this “new approach”, which could be
nology to allow developing countries to adapt to the requirements.    described as “super top-down” is what is required to unlock the
     While Annex I signatories have committed to implementing         negotiations, which have been very difficult to move forward until
emissions targets on an                                                                                                 now,” the law firm said.
individual or joint basis                                                                                                   For its part the IMO
for 2020, targets are not                                                                                               stressed that the interna-
legally binding nor subject                                                                                             tional maritime community
to a compliance method-                                                                                                 will continue to build on
ology, as is the case with                                                                                              the 2005 action plan to put
the Kyoto Protocol.                                                                                                     in place a “comprehensive
     While non-Annex I                                                                                                  regulatory regime aimed at
countries – the develop-                                                                                                limiting or reducing green-
ing nations - will submit                                                                                               house gas emissions from
mitigation measures as an                                                                                               ships,” Mr Mitropoulos
                                                                                                          Photo: NoAA




appendix to the accord,                                                                                                 said.
it also envisages different                                                                                                 It aims to “intensify its
levels of reporting, meas-                                                                                              efforts” in order to be able
urement and verification        Smoke signals                                                                           to present “concrete re-
between developed and developing nations – a source of major          sults” of its determination to do its bit in preventing climate change
concern for IMO delegations.                                          and global warming.
     Another area of concern is finance as the developed coun-
tries are supposed to commit $30bn between 2010 and 2012 and          No clear way forward
$100bn per year by 2020.                                              MEPC59 drew up a work plan for further consideration of market
                                                                      based measures on which country delegations could build when
If it sails tax it                                                    presenting submissions to the March committee meeting.
As to where the finance is to come from, the shipping industry has        Industry bodies had hoped that the COP15 meeting would give
latched onto the use of the phrase “alternative sources of finance”   the IMO a clear mandate to lead the way on the issue of control-
which it fears may see the industry emerging as a cash cow to raise   ling emissions from ships.
funding.                                                                  However actual results from the meeting are inconclusive. If
     Many fear a “double whammy” in the form of a bunker levy         the IMO has not been stripped of its role as international regulator
coupled with other green taxes. The Copenhagen Green Climate          for shipping, the possibility still remains for unilateral regulation by
Fund will administer finance, from whatever source.                   for example the EU.

18     asiamaritime                                                                                                             January/February 2010
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               As of January 1 this year, ships at                                                                                 One of the stumbling blocks,
           berth in European Community ports                                                                                   according to the ICS, is that it
           will be requested to use marine fuels                                                                               remains unclear how the Kyoto
           with sulphur content not exceeding                                                                                  Protocol principle of ‘common but
           0.1% by mass.                                                                                                       differentiated responsibility’ should
                However, after extensive lobbying                                                                              be reconciled with the need for
           by industry bodies like Intertanko, the                                                                             global rules on CO2 reductions
           European Commission has recognised                                                                                  for the carriage of world trade. The
           that: “there may be operational prob-                                                                               common but differentiated respon-
           lems and safety risks associated with                                                                               sibility principle at ship or com-
           the use of the required fuels in ships                                                                              pany level, it argues, will not work
           that have not undergone technical                                                                                   without the possibility of “carbon
           adaptations,” the independent tanker                                                                                leakage” because about 65% of the
           owners’s organisation said.                                                                                         world’s fleet is currently registered
               According to Intertanko, the Com-                                                                               with non Annex 1 nations under
           mission is now recommending that                                                                                    the existing Kyoto Protocol.
           member states, while enforcing the                                                                                      The Chamber is particularly




                                                                                                                 Photo: NoAA
           directive, consider the existence of                                                                                concerned that in the absence of a
           detailed evidence of the steps taken by                                                                             global package of measures, uni-
           ships to ensure safe compliance with it.                                                                            lateral measures may be developed
               Member states may consider the                                                                                  which would “likely result in seri-
                                                        Smoking rooms still available
           existence of an approved retrofit plan                                                                              ous market distortions and – most
           when assessing the degree of penalties to be applied to non-com-             importantly – be far less effective in ensuring the reduction of CO2
           plying ships.                                                                emissions by the global shipping sector as a whole.”
               An open-ended outcome in Copenhagen leaves all to play for.
           MEPC60 will provide the maritime industry with a further chance              Unanswered questions
           to prove that it can pull together and build on the considerable             International Chamber of Shipping marine director Peter Hinch-
           achievements to date.                                                        liffe said that following the Copenhagen conference there were
               It will also need to ensure it is well placed to head off any uni-       a lot of questions that will not be answered before MEPC60. The
           lateral challenges.                                                          Chamber is advocating mandatory application of the energy ef-
               MEPC 59 drew up interim guidelines for the energy efficiency             ficiency design index and Mr Hinchliffe said after the last MEPC
           design index for new ships, guidelines for the voluntary verification        meeting that the ship efficiency management plan, had become a
           of the design index, for the development of a ship energy efficiency         “really good product” after the incorporation of proposals by Ja-
           management plan, and for the voluntary use of the energy efficien-           pan and the US.
           cy design indicator. However, this was not enough to ensure that                 The situation as regards market-based instruments remains less
           IMO automatically retained the lead in regulating shipping emis-             clear, however. The ICS will be going back to its members for their
           sions by the end of COP15.                                                   views on the issues.
               While the International Chamber of Shipping, which sent a                    “The IMO has to do some hard thinking,” he said. Much will de-
           delegation to the conference, acknowledged the progress made, it             pend on contributions by country delegations like China and India.
           also expressed disappointment that the text of the agreement did                 “If we can get round the common but differentiated responsi-
           not mention the treatment of international shipping in delivering            bility issue there might be progress”.
           further CO2 emission cuts.                                                       Country delegations will be submitting their papers for the next
               “For the moment at least the United Nations Framework Con-               MEPC meeting, which will give an idea of how the next meeting is
           vention on Climate Change has been unable to agree a clear man-              going to progress.
           date for the industry’s regulator, the United Nations International              “IMO has work it can do on technical and operational meas-
           Maritime Organization, on how to build upon the considerable                 ures,” Mr Hinchliffe says. “The IMO has a clear work plan”. The
           work already undertaken by IMO on a package of technical, op-                ICS, in conjunction with the International Association of Clas-
           erational and economic measures for reducing shipping emissions              sification Societies, the Cruise Lines International Association
           on a global basis – a mandate strongly advocated by the ship-                and Interferry have put forward a submission for the validation
           ping industry,” the ICS said in a statement following the end of the         of electric power tables for the Energy Efficiency Design Index to
           conference.                                                                  MEPC60. ]


           January/February 2010                                                                                                             asiamaritime       19
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2010, tHe year OF getting by
Liner companies such as Hong Kong’s Orient Overseas Container Line will
have to box clever this year, to ride out the continuing malaise

It was In the dying days of 2009 that container freight rates first        market – and therefore it is likely that 2010 will be a more interest-
began to show signs of delicate recovery – delicate even though            ing year than the sluggish 2009 [in terms of newbuilds].”
some increases, led by the Asia-Europe trades seemed significant.              Amidst what Clarkson Research Services accepts is an “impos-
     The fragility in the recovery comes from the fact that to sustain     sible imbalance” the company finds a chink of light in the ongoing
freight rate gains achieved since the end of last year, liner compa-       slippage at Asian shipyards.
nies will require remarkable discipline in the way they attempt to             “ Significant slippage last year did provide one positive for the
hold back capacity, and resist moves to gain market share.                 beleaguered boxship markets, and current estimates suggest that
                                                                           46% of capacity expected to be delivered in 2009 had not entered
worst over?                                                                the fleet by the start of 2010, restraining fleet growth to just 6.3%.
In Clarkson’s January container report, the research outfit main-          With the 2010 orderbook projected to see further slippage, fleet
tained that the worst was over for the liner business. More impor-         growth expectations for the year ahead have similarly been re-
tantly in the long run, 2009, would have no impact on later capac-         duced,” the company said in its report.
ity concerns as newbuilding orders in that year were for just seven            But despite these positives, Clarkson concludes “…it cannot
new ships, it reported.                                                    be ignored that the legacy of contracting trade in 2009 means that
     Acknowledging the ugly reality of the containership glut – 12%        global volumes are unlikely to get back to pre-recession levels until
of the existing global fleet currently lying idle – the analyst predicts   at least 2011.”
that shipyards cannot expect much improvement in 2010, although                Hong Kong-based analyst Transport Trackers has been equally
it may “throw forward some unconventional opportunities to the             cautious in interpreting what looks on the surface like an early spring

20    asiamaritime                                                                                                           January/February 2010
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           for the box trades. In its most recent January report Transport Track-
           ers says: “1Q10 is a sweet spot for momentum.” But the report goes
           on to make the point that this is largely due to “effective capacity
           reductions through slow steaming and lay ups working on increas-
           ing effective specific trade ultilizations, to the point where some may
           add capacity.” It is at this point that the report turns more cautious.
           It warns that early gains in freight rates at the end of ’09 and early
           2010, will in future be resisted. This is followed by a further warning
           directed at those who would cut rates in trades to gain market share:
           “Why cut rates if you think you are going to pressure the competitor?
           They’ll simply run to their government to get a bail out or guarantee,
           which will in turn come back to haunt you…”                               new and innovative solutions which offer our customers the maxi-
               Hong Kong-based Orient Overseas Container Line, like other            mum competitive advantage in their supply chain.”
           liner companies, has been feeling the pinch. According to various             It is not luck but years of planning that has supplied OOCL
           analyst’s reports OOCL’s parent company Orient Overseas (Inter-           with a supply-chain advantage in one of the few countries that con-
           national) Ltd is likely to report a 32% fall in total revenues to about   tinues to experience economic growth – China. Mr Ting explains:
           $4.3bn when it reports full-year results in March. Revenues in
           the 2009 calendar year fell 35.2% to $3.8bn from a 2008 high of           Bright prospects in China
           $5.9bn.                                                                   “The OOCL group is optimistic for its China business in 2010. One
               But OOIL has always boxed clever, on and off the liner busi-          of the OOCL group’s strengths is China expertise. We have built a
           ness pitch. Its sale of North American port and terminal assets in        strong network for logistics – people, organization, infrastructure,
           2006, when the market for such properties went through a moment           and service that capitalises on the knowledge and IT capabilities
           of madness, reaped the company an astonishing $2.4bn. Less spec-          of the group. Supporting the logistics business is also the shipping
           tacularly, but still an excellent example of OOCL’s ability to draw       capabilities and extensive shipping network of OOCL,” he says.
           on peripheral business to keep the core interests buoyant, was the            In China, OOCL has developed a broad network of 35 offices
           recent sale of its property portfolio for $2.2bn.                         on the mainland and Hong Kong for both liner and logistics sec-
               So how will OOCL handle the vicissitudes of 2010? OOCL                tors, covering both the coastal and inland areas. In terms of assets
           managing director (corporate planning) C L Ting has strong opin-          and facilities the company owns 39 warehouses in 20 strategic
           ions on the market share approach during difficult times: “The            locations, providing its customers with one-stop international and
           current regulatory environment has coincided with the worst eco-          domestic supply-chain services. It also operates three full service
           nomic downturn our industry has ever seen,” he says.                      container depots in Dongguan, Qingdao and Shanghai.
               “But the worst thing for carriers to do in a down market is to            “Under our warehouse-centric logistics network, we have
           fight for market share. In such a downturn, when volume shrinks,          invested in 70 container and lorry trucks in Shanghai, Tinajin,
           the rate will fall. Carriers must realise that they cannot generate       Qingdao, Xian, Guangzhou, Shenzhen and Hong Kong as assets
           more volume by reducing rates. This is definitely the wrong strat-        and manage over 200 vendors,” says Mr Ting.
           egy,” he adds.                                                                OOCL has also established specialised logistics centres for cus-
               The recipe to prevent a self-induced downward spiral in freight       tomers requiring product inspection, pick and pack facilities and
           rates, according to Mr Ting, is for all parties to take the industrial    regional distribution centres.
           load factor “seriously. A high industrial load factor is vital to main-       “Built on our knowledge of the regulatory requirements and
           tain industry stability,” he says.                                        related processes, OOCL has been granted a Class A customs li-
               OOCL’s survival strategy includes close observation of the mar-       cense. And, as part of the value-added services, we offer our in-
           ket spaces that can still offer reasonable rates, as in the intra-Asian   house developed Podium suite of logistics applications that capital-
           trades, company differentiation, and playing on key strengths.            ize on our IT strengths by offering customers global visibility and
               “Intra-Asia is a large and complex geographical area in terms         control of their cargo,” says Mr Ting.
           of shipping. Trade is growing among the trading partners in the
           region. But it makes up a complicated network of corridors that           and back to the rest of the world
           require keen attention to details.                                        Outside the Chinese haven and back on the high seas, the key is
               “With both long haul and short haul, it cannot be likened to          strict capacity control. “We shall maintain adequate tonnage to
           the main East West trades,” he says.                                      meet demand, but will not keep surplus capacity in service as lay-
               Differentiation can only come from constant innovation, ac-           ing up surplus vessels will save on voyage cost. GA has already im-
           cording to Mr Ting. “OOCL will continue to differentiate itself by        plemented winter schedules in the main East West trades and will
           offering the best and highest quality customer services, and finding      continue to manage capacity proactively. ]

           January/February 2010                                                                                                   asiamaritime       21
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  A peer into 2010




Much will depend on foresight when navigating this year’s
choppy waters
If the truth were told, the outlook for shipping in 2010 is as              “This year, however, sees the arrival of a significant newbuild-
murky as the fog that lies over Hong Kong harbour at this time of       ing orderbook, particularly in the suezmax and aframax markets,
year. But still there remain those in the industry prepared to take a   whilst the MR market may be blighted by the newbuilding binge
punt on a forecast (as long as the repercussions are limited to some    for many years to come.
light joshing if found to be incorrect).                                    “For VLCCs, 2011 is the year when the big slew of orders
                                                                        joins the market although with period charter rates at between
tankers                                                                 US$35-40,000, there would appear to be some belief that in-
One such is the chief executive of Hong Kong-based tanker spe-          creased demand - which as ever is focused on China and the
cialist Wah Kwong Shipping Tim Huxley.                                  other Asian economies - will offset increased tonnage supply.
     Mr Huxley’s offering arrived while much of the world was           Whilst imports to India in particular are expected to rise, that
struggling under a blanket of ice and snow. Unlike others, he was       short-haul route doesn’t do a huge amount for ton-miles and
filled with glee at the prospect.                                       fleet utilisation.”
     “There’s nothing quite like a bitterly cold winter to cheer the
hearts of the tanker market. As the first week of January closed,       Limited boost from demise of single hulls
rates on VLCCs shot up to around US$ 70,000 on the West Africa-         “2010 should be the year we bid farewell to all of the remaining
China route, and whilst that may not be solely attributed to the        single hull tankers, which still account for 16% of the fleet. This
weather, it is certainly a huge improvement on the US$ 18,000 the       should not be seen as something on which to pin hopes of recov-
large ships were earning in the early autumn.                           ery- trading prospects for these industry veterans have become
     “So what does 2010 hold for the tanker sector? Winter demand       increasingly limited in recent years and on many routes, they are
in the northern hemisphere has certainly helped the recovery from       simply not a factor.
the lows of 2009, and re-stocking may mean that this upturn will            “Talking to many market commentators about 2010 in the last
be sustainable for the first few weeks.                                 quarter of 2009 found them all generally gloomy. The racy start to

22    asiamaritime                                                                                                      January/February 2010
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                                                                                    Macquarie is forecasting that the reactivation of idled capacity and

            “there’s nothing quite like a                                           a move away from slow steaming could introduce a “wall of ca-
                                                                                    pacity at rates only marginally above operating breakeven.”
            bitterly cold winter to cheer the                                           “The result will be a sharp deceleration in the pace of recovery

            hearts of the tanker market.”
                                                                                    as rates recover from ruinous 2009 levels back to near breakeven,
                                                                                    then stall for a long-haul back to sustained profitability.”
                                                                                        Europe trades will increase this year by a respectable 12% to
                                                                                    87m teu before slipping back to 9% growth or 95m teu in 2011.
            the year has shown that there is only one thing you can be sure of      But the real growth will be in Asia. Macquarie predicts a rise of
            the tanker market delivering once again - volatility.”                  15% to 279m teu in 2010, followed by a 12% spurt to 313m teu in
                                                                                    2011.
            Dry bulk & liners                                                           On the supply side, delivery slippage will continue with only
            According to forecasts by Australian investment house Macquarie         69% of ships due to be delivered this year actually hitting the water
            Research 2010 will see relatively strong growth in demand for iron      but that still amounts to 1,200 new pure boxships looking for busi-
            ore but a return to more traditional trading patterns will lessen any   ness. In 2011 the position worsens with 1,400 new ships expected
            positive impact on rates for dry bulk carriage.                         to be delivered.
                Macquarie predicts that iron ore demand would increase                  Scrapping prospects too, look to be offering diminishing ben-
            12.7% to 1.03bn tonnes this year, and rise a further 8.7% to 1.1bn      efits. According to the analysts at Macquarie who suggest the high
            tones in 2011.                                                          of 792 ships scrapped in 2010, will fall to 622 this year and drop
                Demand for seaborne iron ore is expected to rise in Europe          further in 2011 to 375 vessels. The full impact of delayed vessels
            to 110m tonnes in 2010, from 82m tonnes in 2009, and to 118m            arriving is difficult to accurately estimate but Macquarie is opting
            tonnes in 2011. Increases in demand are also expected in Japan,         for a 49% delay in container deliveries in 2009.
            from 106m tonnes in 2009 to 125m tonnes in 2010.
                With China in the driving seat last year in terms of iron ore im-
            ports tonne-mile demand soared.
                This year, Macquarie predicts, “each tonne will likely travel a
            shorter distance compared to 2009…driven by the re-emergence
            of European demand and Chinese domestic iron ore production.”
                China’s seaborne iron ore demand is set to grow from 624m
            tonnes last year to 679m tonnes in 2010 and 722m tonnes in 2011.
                On the basis of the modified iron ore demand, Macquarie
            said: “We expect demand for iron ore shipping capacity to grow
            only 5.6% year-on-year, down from 16.8% year-on-year growth in
            2009, down from 16.8% year-on-year growth in 2009.”
                This is in marked contrast to the capacity supply that is likely
            to enter the market this year. Capacity is expected to follow the
            upward trajectory begun last year, hitting 61m dwt this year or
            11.8%.
                By contrast, said the analysts, total volumes across all bulk
            commodities would grow 7.3% in 2010 to nearly 3.29bn tonnes.
            In 2011, total volumes are expected to hit3.47bn tonnes after a fur-
            ther 5.6% growth in exports.


            Liner shipping
            Looking at the prospects for box shipping Macquarie concludes
            that the recent freight rate boost experienced as a result of freight
            restoration moves, most noticeably on Asia-Europe trades, are
            likely to have heralded a false dawn.
                Customer resistance to further freight rate hikes will see rev-
            enue growth suffer a “significant deceleration,” the report said.
                                                                                     Customer resistance to further freight rate hikes will see
                Although volume growth looks set to rise 13.6% year-on-              revenue growth suffer a “significant deceleration,”
            year to support an increase in total liftings to 508m teu this year,

            January/February 2010                                                                                                          asiamaritime   23
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Sale & purchase                                                                 “Presently, ship values are all over the place. Provided they are
For a wider view of the 2010 vessel market Asia Maritime turned to          of good specification mid-age vessels pricewise seem to be outper-
Clarkson Asia managing director Martin Rowe.                                forming younger ships (if compared on a straight line depreciation
     “With 2009 safely behind us, many ship sale & purchase bro-            basis).
kers are grateful not only to have survived the year but pleasantly             “Mid-age ships are easier to finance (less exposure if the mar-
surprised to find they generated a bit of profit too. This is all a great   ket turns south) and require less equity. So assuming more liquidity
change from the widespread trepidation and despondency that                 returns to the ship finance market we might expect to see the bal-
faced the S&P market 12 months ago, when the talk was of the                ance redressed and values of younger ships to firm up. However,
most challenging conditions seen since the 1980s.                           there will be a limit to that upside since more liquidity also likely
     “This is not to understate just how tough things were for some         entails delayed and postponed newbuilding deliveries accelerating,
time in 2009. Overall it was, to use footballing vernacular, ‘a game        thus capping any rally from a supply-side perspective.
of two halves’.                                                                 “On a more positive note the betting is on China having an-
     “In the first half one team (the Buyers) didn’t really come out to     other good year. Shanghai Expo 2010 is China’s “Business Olym-
play at all. Worse still, the banks threatened to take their ball back.     pics” and once again China wants to put on a great show for the
     “In the second half the expected team of mostly Greek players          world. If so, the demand side of the dry bulk equation should hold
turned out with a predominantly Chinese squad instead. The team             up well. Larger tankers too may look forward to improved pros-
sponsors changed too, the shirt logos of the western banks like             pects: the single-hull phase-out doomsday has finally arrived and
HSH and Fortis disappeared from S&P players’ shirts to be replaced          a bitterly cold winter in the northern hemisphere has added vim to
with less familiar names like China Exim Bank and Bank of China.            the scenario. But, lest we get too excited, the MR sector still faces
     “So what of the S&P market in 2010? Will China once again              many challenges in its orderbook profile.
hold up the market or, will the ship values finally succumb to an               “For containerships S&P, demand should return for the smaller
anticipated flood of newbuildings and let the vulture funds finally         ships but, larger units still face challenging times and are more
open their chequebooks?                                                     likely to be of interest as assets to the vultures rather than to the
     “Well first, it should be borne in mind that without liquidity         traditional German owners.
and a healthy NON-consensus about where the market is headed,                   “Whether 2010 will once again be a game of two halves like
ship sales tend to dry up and values stagnate. Both these factors           2009 remains to be seen. However, it should provide plenty of op-
were absent from the container vessel S&P sector in 2009 (banks             portunity for those players willing to take on a bit of risk.
couldn’t lend and everyone thought the dire demand would persist)               Expect to see a few chosen champions at the top of the table
values duly tanked and (almost) no one bought anything. Tanker              with smaller teams battling relegation. Whatever happens the S&P
S&P did a bit better, whilst bulk carriers eventually did quite nicely      market promises some excitement.” ]
thank you.



     “on a more positive note the betting is on China having
     another good year."




24    asiamaritime                                                                                                             January/February 2010
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RebalanCing China
Matthias Umlauf discusses the impact on shipping markets of China’s
transformation into a more domestically driven economy

DiScUSSioNS AboUt GlobAl imbalances                                                               larger contribution by private consumption,
– in trade, savings and investment – typically                                                    accounting for less than 40% of GDP only.
centre on China. From a political perspective,                                                    Beijing is well aware of the investment-
the most controversial imbalance is the Sino-                                                     consumption imbalance. This year we are
US trade deficit. From a shipping point of                                                        likely to see a marked slowdown in China’s
view, a major concern is if the PRC’s current                                                     government fixed investment, but more
investment boom, being the main driver for                                                        attempts to boost consumers. These might
bulker trades, will continue.                                                                     range from measures to expand the social
    Regarding the impact of China’s rebalanc-                                                     safety net to a cut in personal income tax,
ing on shipping markets, two questions loom                                                       directed at growing disposable income for
large: first, how will the PRC’s future demand                                                    lower and middle-income groups. For ship-
mix impact the need for shipping capacity,                                                        ping, the shift of emphasis should moder-
and second, will there be a new trade pattern                                                     ate the dynamic of iron ore and other bulk
emerging, impacting shipping routes?                                                              imports somewhat, but demand growth
    Since its WTO accession in 2001, China                                                        should stay at healthy levels as the industri-
has emerged as the world’s industrial power-                                                      alization process – put on a more balanced
                                                    Matthias Umlauf is senior economist at HSH
house. The arrangement has benefited all par-       Nordbank AG in Singapore                      footing – has still a long way to run.
ties: while China’s industrialization was driven
by strong exports, western consumers enjoyed goods at low prices.          Increasing diversification of trade
Commodity exporting countries boomed due to China’s hunger                 Externally, China’s rebalancing is progressing as well. The recent
for natural resources. Shipping, being the dominant means of               upsurge in trade with Southeast Asia and countries such as Brazil,
transport to facilitate this process, experienced a mega-boom. Seen        India and Africa is compensating partly the weaker export pros-
from this angle, global rebalancing must sound a warning bell to           pects to the US and Europe. The inception of a free-trade area
shipping companies.                                                        with the ASEAN nations bodes well for expanded inter-Asian trade
                                                                           dynamics. For container trades, these routes will gain importance
Domestically driven china                                                  compared to the currently dominant east-west trades with the US
The financial and economic crisis that started in autumn 2008              and Europe.
challenged China’s export-led development. Faced with the threat               However, even as China’s new export markets grow fast, the
of recession and unemployment at home and rising trade disputes            US will remain the world’s largest consumer and higher US savings
abroad, Beijing addressed the domestic issues first. As exports            severely limit the PRC’s export dynamic. Nevertheless, the biggest
slumped by 13% last year, government driven investments took               danger lies in more protectionist measures from the US despite
over as the growth factor. Commodity exporters and bulker trades           the fact that American companies produce and have deep supply
are currently the main beneficiaries of Beijing’s successful fiscal        chains in the PRC.
stimulus package, which targets infrastructure investments. Most of            A stronger Rmb together with the fall in the US-China bilateral
these investments are aimed at lower-tier cities in the hinterland,        trade deficit should help to calm tensions. As China’s total exports
transforming China from coastal export-oriented into a continental         are expected to grow by 15% this year, contributing to strong GDP
economy, similar to the process that took place in the US during           growth of about 9%, Beijing is likely to let its currency appreci-
the 19th century. Being in the early stages of development, its capi-      ate against the US dollar. The Rmb should move along the upward
tal stock per capita – despite its high investment-to-GDP ratio – is       trajectory it had between 2005 and 2008, when the financial crisis
only about 5% of America’s or Japan’s. While some inefficiencies           hit. On balance, while not being an immediate boost for shipping,
will occur, in the longer run, the biggest chunk of the infrastructure     China’s efforts to rebalance its economy should put growth on a
investment should translate into productivity gains.                       more solid base – not a bad perspective for an economy so pivotal
    Nevertheless, going forward, a stable growth path requires a           for shipping markets. ]




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PRePaRing FoR the next
uPwaRd cycLe
Lloyd’s Register sees the shipbuilding slump as the industry’s opportunity to move
up to the next level when the market returns
ParticiPants in the maritime sector might be surprised to learn             of China to come up with a 210,000 cu m liquefied natural gas
that when John Rowley was appointed to head up Lloyd’s Register             carrier.
Asia, key to his remit was a bid for growth.                                     As China attempts to raise its shipbuilding game, LR has posi-
     “Growth is a necessity; it widens our reach, strengthens our           tioned itself to support the country’s ambition. With a 38% market
company and it will enable us to provide assurance to a greater             share of the global gas ship sector, Mr Rowley says LR is well po-
proportion of the energy and transportation                                                   sitioned to support China’s drive to reduce its de-
supply chains from end to end,” Rowley said.                                                  pendence on the foreign ships built by its rivals.
     In Europe, Lloyd’s Register has been in-                                                     Construction for offshore projects is firmly on
cubating energy sector businesses, which are                                                  the LR radar as Asian shipbuilders rise to the chal-
now growing rapidly – oil and gas, power                                                      lenge of the region’s growing energy demands.
and chemicals, both upstream and down.                                                            “We are extremely bullish on the floating
Globally, the energy business now accounts                                                    offshore installation sector,” he says. “So much
for 30% of LR’s portfolio.                                                                    so that we have transferred the headquarters of
     “Shipbuilding orders may have stagnated                                                  our global FOI team to Singapore and created a
for the time being, but in China, as with the                                                 satellite team in Busan. Another satellite team for
rest of Asia, the energy business holds great                                                 China is on the cards.”
potential and the rail business is booming,”                                                      LR is bringing its considerable training re-
says Mr Rowley. “All businesses are expected                                                  sources to the region’s shipyards, particularly
                                                    John rowley: Lr is going for growth
to grow, but energy and rail will grow faster                                                 those in China, through its Shanghai-based Mari-
in the short term.”                                                                           time Training Institute (MTI).
     Such growth in China’s internal logistics networks has buffered             “We met the rapid expansion of the shipbuilding sector as a
LR from the worst of the shipping downturn. But the figures show            result of the spike in demand in 2007 by a ramping up our training
that, for LR at least, the shipbuilding slump has yet to be as bad as       services to address any potential for a thinning of talent,” says Mr
portrayed.                                                                  Rowley.
     “In 2009, the ships that Lloyd’s Register signed up to in China             Since opening in August 2008, the MTI has offered 50 courses
was equivalent to 1.6m grt, similar to what we contracted in 2006,”         and seminars to yards and owners conducted both internally and
says Mr Rowley.                                                             on-site. Meanwhile, at the yards and beyond where the ships and
     Way off, perhaps, from the boom year of 2007, when the LR              their components are built, LR’s Technical Performance Group sup-
class was assigned to 12.3m grt; but the shipping sector has come           ports the production process along the entire supply chain, ensur-
to realise that it is paying dearly for those 12 months of madness.         ing its quality and safety standards are strictly adhered to.
     With its finger on the Chinese pulse, Lloyd’s Register was quick            While there is a market perception that quality may have taken
to make its training services indispensable when, through their             a hit as a result of rapid expansion in Asia’s shipbuilding capacity,
“Revitalisation & Adjustment Plan”, state-planners called for ship-         Mr Rowley says all ships certified to LR class meet or exceed inter-
builders to raise the value equation.                                       national standards.
     The plan has been the catalyst for research and development to              “In China, we have a strong focus on 35 shipyards, and another
enhance the design of the traditional Chinese shipbuilding fare of          70 are subject to a watching brief. More than 650 Lloyd’s Register
bulkers, tankers and containerships, with a focus on environmentally        staff support our China business.
friendly innovation and life-long reduction in vessel-operating costs.      “For obvious reasons, we don’t restrict ourselves to working with
     More ambitious still, has been the drive by China to become            only the best yards in any given country. But the yards we do work
more self-reliant in transporting its energy needs, illustrated by a        with have to share our commitment to quality and our dedication
recent Yuan230m grant to the Marine Design & Research Institute             to continuous improvement.” ]



26    asiamaritime                                                                                                             January/February 2010
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            haRneSSing the wind
            the Korean Register of Shipping is embracing its clients’ rush to
            green technology
            Korean register of Shipping chairman Oh Kong-Gyun la-                          Meanwhile, back in the shipyard, KR is at the vanguard of
            ments the settling of the doldrums on the national shipbuilding          the green ship movement. Since the beginning of 2008, KR has
            industry. According to his sources delays or cancellations amount        been conducting research to develop technology relating to the
            to around 15% of newbuildings on order.                                  increased efficiency of auxiliary machinery in the engine room,
                But KR, thus far, have not felt the full impact of the downturn,     WHRS (waste heat recovery systems), application of renewable
            says Mr Oh: “Like any other class society, we have experienced           energy power generating systems for ships, and CCS (carbon cap-
            order delays and cancellations, but these have not been significant      ture and storage) technology as well as exploring the possibility of
            (single digit percentages) and they have been offset by new orders       applying these technologies onboard ships.
            secured in 2010, including a newbuilding order for eight very                  An important KR project is the eco-friendly, fuel saving concept
            large ore carriers each 400,000 dwt from Brazil’s iron ore producer      ship “Nova Green Ship”.
            Vale.”                                                                         “Shipbuilding experts agree that future ships will include elec-
                The wind may have dropped out of the sails of the shipbuilding       tric propulsion systems utilising fuel cells, and state-of-the-art ships
            industry but other opportunities abound.                                 equipped with efficient internal combustion engines. In line with
                                                                                     these developments, KR has established a “Research Group for
            reasons to be green                                                      Eco-friendly Fuel Cell Ships”.
            Mr Oh claims the reasons for the headlong dash to wind turbine                 All in all, KR is set for another busy year. Mr Oh says there are
            projects by the country’s top shipbuilders are three-fold: the sense     plans in the pipeline including recruitment of experts in energy
            of uncertainty within the shipbuilding industry, the “Low Carbon,        and environment related services; localisation and further expan-
            Green Growth”, government policy, and the rapid surge in wind            sion of its overseas network of branch
            farm projects around the world.                                          offices, together with a strengthening
                Assumedly the same reasons apply to KR’s nimble efforts to           of its research and development
            grab on to the coattails of the industry leaders. Mr Oh explains, “The   activities.
            entry by Korean shipyards into wind power and other portions of                “We will continue to ex-
            the renewable energy sector is likely to bring about expansion in        pand our business portfolio
            survey, certification and consultation services for KR.”                 and invest in areas that will
                KR has already published its own technical guidelines for the        drive future growth such as plant
            construction and maintenance of wind turbines. “This means that          inspection, new and renewable
            KR has the capability to carry out design evaluation services for        energies and other environment
            wind turbines,” says Mr Oh.                                              related services,” says Mr
                As part of a joint research project with the Korea Institute of      Oh.
            Materials Science, KR is working to establish a certification scheme
            to test wind turbine performance and investigate the development         happy birthday
            of a 5MW offshore wind turbine system.                                   KR is 50 this year
                                                                                     and the crowning
            alternatives                                                             achievement will be
            KR’s forays in to alternative energy are not limited to catching the     45m grt registered
            breeze. The organization has already developed guidelines for ocean      by the end of
            energy converters and is currently drafting rules for marine hydrogen    2010. ]
            fuel cell systems. “KR’s research is being shared with universities,
            research institutes and shipyards,” Mr Oh says. “The Society aims to
            become a global certification body for this new technology.”
                Korean Register is also at the forefront of the country’s pilot      chairman of Korean register
            greenhouse gas emissions trading scheme having been authorised           oh Kong-gyun: Kr is
                                                                                     celebrating 50 years with
            by the Ministry of Environment as a verification body.                   green initiatives



            January/February 2010                                                                                                     asiamaritime       27
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Beyond coP 15
nations of the world failed to get their climate act together in copenhagen in
december 2009, but at classnK its business as usual
in recent years Japan has prided itself as a leader in green                may be curtailed by the current downturn: rather, the opposite will
initiatives, not least in the maritime sector. And the failure by the       be the case.
world’s governments to come up with an agreement on an agenda                   “This is not the first time that Japanese shipyards have dealt
to combat climate change will not have an impact on Japan’s con-            with a market downturn. Indeed, many of the shipbuilding proc-
tinuing efforts to clean its industries.                                    esses that have become commonplace today, including welding
     ClassNK, the world’s largest classification society by tonnage         automation, streamlined block construction and outfitting, and
classed, has been at the forefront of industry-wide efforts to en-          other measures to improve efficiency were developed or improved
hance a ship’s propulsive performance under the auspices of the             upon in Japan during the last major crisis. I fully expect that this
10 Mode Performance Index.                                                                           crisis will spawn its own new efficiency
     ClassNK managing director Shosuke                                                               enhancements,” says Mr Kakubari.
Kakubari says: “In line with the objectives
of the 10 Mode Performance Index, at                                                                 growth in the face of a downturn
ClassNK we have developed a program                                                                  The shipbuilding sector may be tempo-
and issued guidelines to assess a ship’s                                                             rarily ailing but ClassNK is going from
propulsive performance under various sea                                                             strength to strength as its workload contin-
conditions.”                                                                                         ues to grow. The company expects to have
     As a result of the research, Mr Kaku-                                                           set a new record of 8m tonnes joining the
bari is hopeful that progress will be made                                                           register in 2009, with similar figures for
in ship’s designs that will be more envi-                                                            newbuildings expected in 2010..“Addi-
ronmentally friendly based on propulsive                                                             tionally, we have been more aggressive in
performance. A vital consideration has                                                               developing relationships with new clients
already arisen out of the work done thus                                                             and targeting new markets. As a result we
far. Slow steaming, much advocated by                                                                have seen an increase in owners looking
the shipping industry as a response to high                                                          to transfer ships to our society,” he says.
oil prices and vaunted as a fine example                                                             This is likely to see ClassNK become the
of green operating, is not as clear- cut as                                                          first classification society to hit 170m gt
some would like to promote it.                                                                       on its register
                                                shosuke Kakubari: classnK added 8m gt to its             In order to meet the emerging de-
                                                register in 2009
slow-steaming – the full story                                                                       mand ClassNK has stepped up its recruit-
“Slow-steaming is becoming more common, but like any other                  ment and training programmes. “For example, we have greatly
type of operation outside of the engine’s normal operating speed,           increased hiring activities in China and South Korea over the past
slow steaming presents a number of trade-offs, related to fuel ef-          few years and opened seven new offices in 2009 alone,” says Mr
ficiency, NOx emissions and engine maintenance,” explains Mr                Kakubari.
Kakubari.                                                                       Expansion of ClassNK’s service network will not slow in 2010.
     “In order to avoid these trade-offs, engine makers are putting         Two more offices will open in India and Sri Lanka this year, togeth-
great efforts into producing optimum engines for slow steaming. In          er with new branches in the Middle East and South America.
fact some engine makers are already producing such engines.                     Regarding R&D, Mr Kakubari says: “The second phase of our
     “Electronically controlled engines make it easier to balance           practical R&D program continues apace. One early result of this
these trade-offs compared with mechanically controlled engines,”            program has been the ClassNK Guidance for the 10 Mode Perform-
he adds. “Accordingly, we are likely to see an increase in the adop-        ance Index that was released in January 2010.
tion of designs of electronically controlled engines.”                          “This first guidance will provide a testing and certification
                                                                            procedure for estimating containerships and vehicle carrier per-
r&D full steam ahead                                                        formance in real ocean conditions, allowing shipbuilders to build
ClassNK dismisses fears that important research and development             better, more efficient ships,” he concludes. ]


28    asiamaritime                                                                                                           January/February 2010
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            a BRighteR Shade oF gReen
            gL insists that cop 15 will not impede shipping’s progress toward
            a cleaner environment
            executive vice PresiDent and head of Asia Pacific at Germa-           shipbuilding agenda so GL has responded accordingly.
            nischer Lloyd, Dr Volkmar Wasmansdorf thinks that the current
            slump in the shipbuilding sector will divide those with foresight     Lending a hand
            and those without, with only the former winning through.              “Naturally, expert advice and services in these two areas will be
                                                                                  in great demand and we have built up a business segment called
            foresight and no sight                                                “Maritime Solutions” providing consultancy, certification, training
            “In the face of challenges, some [shipbuilders] decided to cut        and software to cater for it,” he says.
            research & development and training budgets. Others are see-              Dr Wasmansdorf is vigourous in the defence of the industry
            ing it as an opportunity to create new designs that are more fuel     he serves, when it’s suggested that its green appetite might slow
            efficient and environmentally friendly than the vessels currently     after the impasse in Copenhagen in December. He points out
            at sea,” he says.                                                     that IMO’s environmental efforts pre-date many other more high-
                As a result the winners can look forward to some reduction in     profile schemes.
            rival shipbuilding capacity says Dr Wasmansdorf.                          “Twelve years ago, IMO agreed on a 4.5% global cap on
                And then there is the matter of delays and cancellations.         sulphur emissions from shipping even though the move had lit-
            As a leading classification society GL is in a perfect position to    tle impact,” he says. “With the introduction of Sulphur Emissions
            observe the trends. “We have already seen a large proportion of       Control Areas in the Baltic and the North Sea, a 1.5% limit on
            slippages and cancellations. This is mainly driven by a lack of fi-   sulphur emissions for ocean-going ships and a 0.5% limit on
            nancing, collateral or unavailability of charters,” he says.          ships in port have been set.”
                “However, supply will continue to outstrip demand, keeping            And progress continues, with GL’s participation: the revised
            the lid on freight rate increases and asset values for at least two   MARPOL Annex VI will see the ECA sulphur limit reduced to 1%
            years.”                                                               from 1 July 2010. Five years later, it will be 0.1%. In addition,
                                                                                  the European union and the US-state of California have an-
            shedding tonnage, shedding shipyards                                          nounced new limits on sulphur content. To help maritime
            “Independent sources indicate some 65m dwt is                                  businesses cope with these forthcoming regulations, GL
            scheduled for delivery before the end of 2010 and                               has issued relevant guidance and recommended that
            a further 24m dwt in 2011. But there is industry-                               newbuildings be redesigned to improve operating ef-
            wide anxiety over the lack of available financing. If                           ficiency.
            predictions are proved accurate the shipping industry                               Despite the air of uncertainty that COP 15 left, Dr
            is heading for a period of accelerated consolidation,”                         Wasmasdorf believes that something of use could be
            says Dr Wasmansdorf.                                                                     taken from the talks.
                On the bright side, GL is benefitting                                                         “If we were asked to draw lessons from
            from the enthusiasm for training com-                                                          Copenhagen, we would surely regard
            ing from foresighted shipbuilders. “We                                                          the UN Conference on Climate Change
            are glad to see rising demand for qual-                                                          a an eye-opener. At Copenhagen, the
            ity training courses in many markets                                                              shipping industry was identified as a
            especially in China, as shipyards are                                                               polluting sector that would be com-
            focusing on technical competency to                                                                   pelled to clean up its act and con-
            be more competitive,” he says.                                                                        tribute financially to wider climate
                GL has focused its training                                                                        change efforts. Shipping has to do
            courses on hot topics such as energy                                                                   more to be perceived by the public
            efficiency, environmental protection,                                                                 as a green, environmentally friendly
            ship delivery etc and has localised to get                                                       industry.” ]
            closer to clients.
                As ship and energy efficiency have                                                         Dr Wasmansdorf says shipping did learn
                                                                                                           from coP 15
            pushed themselves to the top of the

            January/February 2010                                                                                                  asiamaritime     29
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All FAirs in love And wAr
The crippling of the global economy has led timid companies to hide away but
those who dare win, and they are battling it out for business at major industry
events in March

                                                                        will be among a panel of experts discussing serious capacity issues
                                                                        on the ports of the China coast.
                                                                            Provincial port development with its eye for prestigious edifices
                                                                        to world trade rather than brutal efficiency, has led to overcapacity
                                                                        in key ports, exacerbated by manufacturing mobility and the global
                                                                        downturn. This panel session will look to find the winners and los-
                                                                        ers in the new paradigm.


                                                                        Asia Pacific Maritime 2010
                                                                        At the other end of the pond in Asia’s leading shipping hub of Sin-
                                                                        gapore, Asia Pacific Maritime is running its 10th event. This year
                                                                        the show (at Singapore Expo March 24-26) has attracted more than
Food after thought                                                      800 domestic and international exhibitors, and expects to welcome
                                                                        more than 8,000 visitors.
While more than 60 exhibitors vie for attention at TOC Asia                 In the conference arena this year’s line-up employs a broad
2010 (at the Shanghai International Convention Centre March 16-         brush to cover all aspects of the maritime industry in Asia: from
18) leading members of the region’s port and logistics community        the technical, Marine Propulsion & Auxiliary Machinery, to Ship
will be telling delegates just how its going to be this year.           Financing, from business, Tanker Shipping & Trade, to law, with the
                                                                        Asian Maritime Law Conference, there is an industry area covered
China concerns dominate toC asia                                        for everybody’s taste.
For reasons that do not need explaining China will be at the heart          Added extras this year include conference sessions profiling
of most of the conference discussions this year. Of particular inter-   the maritime nations of Japan, India and China.
est will be the special panel discussion focusing on China’s logis-         Meanwhile, fun comes in the shape of the opening party on
tics network, and cross-strait trade.                                   the night of March 24, lunchtime fashion parties on both days and
     A lack of a secure and efficient supply-chain from the country’s   a trip around PSA’s port for the ardent container watcher.]
interior to the coastal ports and increasingly to other important
national cities, has formed a drag on the coun-
try’s wealth. With trade to the West under pres-
sure, China is attempting to create a domestic
market from the top down which will in turn
make for a raft of opportunities for nimble 3PL
players and other logistics providers.
     Following the warming of relations between
Taiwan and the mainland that led to the return
of cross-strait ties for the first time since 1949,
another leap forward is expected in 2011, when
an economic cooperation framework agree-
ment is expected to be signed between the
two parties. Director-general of the Kaohsiung
Harbour Bureau Hsiao Ding-Hsun will lead this
discussion on the implications in Shanghai.
     Later, the president of leading port opera-
tor China Merchants Group Ltd Dr Fu Yuning                                                                                all the fun of the fair


30    asiamaritime                                                                                                        January/February 2010
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AnOther Full AgendA
Sandra Speares offers a summary of the International Maritime Organization’s
action plans for 2010-2011

A comprehensive review of the International Convention on              concerned. It also raises the concern that despite extensive guide-
Standards of Training, Certification and Watchkeeping for Seafarers    lines having been issued, these incidents continue to occur.
is to be discussed at the first IMO meeting of 2010.                      The IMO’s high-level action plan for 2010 and 2011 was set
     The aim is to adopt the amendments at a diplomatic confer-        out at the Assembly meeting in December 2009.
ence due to take place in the Philippines in June this year.               Aside from the STCW revision planned for June 2010, the
     Other agenda items for the meeting on January 11-15 include       action plan includes further work on the issue of preventing and
measures to enhance maritime security, and revision of the recom-      repressing piracy and armed robbery, notably off the coast of
mendations for entering enclosed spaces on ships.                      Somalia and the Gulf of Aden.
     This final issue continues to be of considerable concern to the       The Assembly adopted a resolution condemning piracy and
industry, following the prosecution of a master in the UK after an     acts of armed robbery against ships anywhere in the world in
onboard incident in which three men died.                              December.
     While the master was found not guilty, the case illustrates           It also adopted the revised ‘Code of Practice for the Investiga-
the need for the utmost vigilance as far as enclosed spaces are        tion of the Crimes of Piracy and Armed Robbery against Ships’.


32    asiamaritime                                                                                                     January/February 2010
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                In December 2009, the Federation of Asean Shipowners Asso-         that required under the SOLAS Convention and the 1988 protocol
           ciations issued a call for action against piracy in the Indian Ocean,   to the Load Lines Convention. The code will be applied to units
           where no convoy system exists, unlike the situation off the coast of    built on or after 1 January 2012.
           Somalia.                                                                   Other issues discussed at the assembly meeting included a new
                Other key elements on the IMO agenda for the next two years        code on alerts and indicators to replace that issued in 1995, guid-
           include efforts to address the issue of climate change, set to be       ance on issuing bunker certificates for ships in a bareboat registry,
           a matter for major debate at the Marine Environment Protection          and recognising guidelines on the resolution of stowaway cases
           Committee session in March. How to promote the message that             need to be updated.
           shipping is playing its role in protecting the environment, will also       One of the key developments - and one that may prove con-
           form part of the debate.                                                troversial in its implementation - is an agreement to make the IMO
                                                                                   member state audit scheme mandatory.
           of icebergs and other icy risks                                             The process will require a number of IMO instruments to be
           With a number of recent incidents involving groundings of pas-          updated and the timeline stretches to 2013 for the updates, with an
           senger ships in Antarctica - the most high profile of which occurred    entry into force date planned for January 2015.
           in November 2007, when the ice strengthened Explorer sank -                 Flag states have been sensitive about making a previously
           guidelines for ships operating in polar waters have been extended       voluntary scheme mandatory, with concerns that it would expose
           to cover that region.                                                   weaknesses in regulatory structures or fragmentation in responsi-
               The new rules are intended to apply to newbuildings from Jan-       bilities between different government departments.
           uary 1, 2011 onwards but the IMO is urging member governments              Others suggest that the voluntary system in place thus far
           to implement them as soon as possible.                                  has worked smoothly for those who chose to implement it and
               A new code is also to be introduced for mobile offshore drill-      provides a blueprint for the successful operation of a manda-
           ing units to ensure that they provide a level of safety equivalent to   tory regime. ]




           January/February 2010                                                                                                  asiamaritime      33
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The dark side oF carGo holds
Michael Grey laments the loss of lives in cargo holds and the lack
of drills to prevent them
What, in the 21st century, causes the largest number of deaths         cargoes of bio-mass fuels, which we are given to believe is an “up
and injuries aboard ship? Is it fire, shipwreck, or collision? Is it   and coming” cargo. “Down and deadly” might be a better descrip-
the grim depletion of lives that seem to occur in accidents involv-    tion of wood pellets and similar power station feedstock, which
ing lifeboats? Viewed worldwide it is all of these things, but high    eats up the oxygen as it lies in a hold.
up on this list of regrettable, wholly preventable accidents are           But people have died in compartments adjacent to holds
those involving entry into enclosed spaces.                            containing oxygen depleters, because nobody realised that the
     Year in, year out, they go on,                                                                     atmosphere was shared between a
gassing tragedies that take place                                                                       hold and the store next door. They
because of a moment’s inattention,                                                                      have died in cable lockers, full of
ignorance or failure to carry out                                                                       corroding anchor chain, or in deep
sensible precautions; “short cuts” to                                                                   and double bottom tanks where the
a wholly avoidable death in a com-                                                                      oxidation of steel has eaten up all
partment without sufficient oxygen                                                                      the oxygen.
to sustain life. There is a relentless                                                                      It is fast and always unexpected,
pattern to these accidents, which                                                                       witness the last act of somebody who
happen aboard well-run ships un-                                                                        dropped a torch a few feet into a
der respectable flags, and down-                                                                        tank, and jumped down to retrieve it.
at-heel operations flying flags of                                                                          Statistics of gassing tragedies
places where human life is cheap.                                                                       reveal an unsurprising difference be-
     “I’ll just nip down the hold lad-                                                                  tween accidents, which happen on
der and retrieve the deck brooms we                                                                     tankers of all kinds, and the far larger
forgot to bring up when we knocked                                                                      numbers aboard non-tank vessels.
off the other day”. But the oxygen                                                                      Tankermen expect dangers in en-
in the hold has been depleted by                                                                        closed spaces, they train to recognise
the scrap cargo, and three quarters                                                                     the problems and the safe evacua-
of the way down, the AB falls un-                                                                       tion of casualties. Dry cargo folk, it
conscious. “Quick- go and give the                                                                      seems, are always surprised by the
alarm – I’ll start hauling him out,”                                                                    turn of events, when they turn lethal.
shouts his mate, and it will be the                                                                         Everyone has enclosed space
last words he ever speaks as he de-                                                                     procedures, but not enough people
scends into the hold.                                                                                   take them sufficiently seriously. A
     Perhaps there is still ignorance                                                                   good idea has come from the Ba-
about how a cargo space can be                                                                          hamas delegation at IMO, with a
healthy to work in one day, and lethal a few hours later, after a      suggested amendment to Chapter III of SOLAS, making enclosed
cargo which depletes oxygen has been battened down under the           space entry drill a mandatory provision for all ships, along with the
hatches. There is a growing list of cargoes that turn a working        boat and fire drill that everyone is accustomed to.
space into a suffocating abyss. Soya beans are carried by bulkers          It would become a legal requirement to conduct a regular anal-
all over the world, but have accounted for a disturbing number of      ysis of hazardous and potentially hazardous spaces, ensure that ev-
casualties. On one ship coming northbound from South America           eryone knows enclosed entry procedures, and practice evacuation
with such a cargo, four seafarers died in the unventilated hold.       procedures on a regular basis.
People have died in holds full of freshly felled logs, wood chips,         Of course, even with the best will in the world, it could be a
steel turnings and scrap.                                              long time before such a SOLAS amendment comes into force. But
     Cargoes that are not obviously lethal and appear to be simple     if it has merit, there is really no reason why prudent masters, and
and problem-free can acquire deadly tendencies as they lie in un-      well-run shipping companies, could not amend their own systems
ventilated spaces. Deaths have been caused in recent months in         immediately! ]
                                                                                                                       rjmgrey@dircon.co.uk
34    asiamaritime                                                                                                        January/February 2010
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MorE tALEs FroM thE EMissions
rEduction rAcE
Leading Asian and European companies are battling
it out for the ship efficiency prize
                                                                          dynamics, deckhouse design to minimise wind resistance and anti-
                                                                          fouling coatings to reduce water friction.
                                                                              The investigation will also look at machinery and systems de-
                                                                          signs to enhance energy efficiency and to reduce environmental pol-
                                                                          lutants and methods to optimise structural designs and the distribu-
                                                                          tion of hull weight, including favourable trim and draft conditions.
                                                                              Bestway chairman and general manager Liu Nan says: “We are
                                                                          investing in green-ship technology to develop innovative solutions
                                                                          and ensure that we are in a position to meet the demand for the
                                                                          green-ship designs that are increasingly sought-after by owners.”
                                                                              Lloyd’s Register country and marine manager for China Nick
                                                                          Brown says: “In the foreseeable future, the environmental impact of
MOL’s car carrier for the 21st century
                                                                          commercial ships will increasingly influence their designs, the way
With bunker prices nearing $600 per tonne just two years ago              they’re operated and their eventual disposal.”
and ship emissions coming under the spotlight, the maritime indus-            His comments could equally apply to the work being done by
try has been taking steps to try to reduce energy consumption and         Japanese shipping line Mitsui OSK Lines which is working on two
emissions.                                                                initiatives that have been incorporated in a Japanese government
    At an industry level this has involved an on-going and some-          effort to reduce carbon dioxide emissions. The developments aim to
times acrimonious spat between different shipping related organi-         build upon the work carried out by MOL on its ‘Innovations in Sus-
sations to find consensus on what steps should be taken to offset         tainability backed by Historically proven, Integrated technologies’
emissions.                                                                programme that had led to designs of two concept vessels, a car
    But at the beachhead, shipping companies, research groups and         carrier and a ferry.
classification societies have taken a more pragmatic approach us-             The first initiative is being carried out in conjunction with Mit-
ing both existing and new technologies to reduce fuel consumption         subishi Heavy Industries and Sanyo Electric Group and involves
and hence cut emissions. For some this has involved nothing more          research and development on a hybrid car carrier using renewable
than introducing slow or super slow steaming particularly on liner        energy.
routes.                                                                       Under the plan, the three firms are working on a hybrid power
    Others though have looked at the whole gamut of hull form and         supply system that combines solar power generation technology
engine improvements, while Japan’s Nippon Yusen Kaisha and Mit-           with lithium-ion batteries with the aim of generating zero emissions
sui OSK Lines have come up with a range of concept vessels.               while the vessel is berthed.
    In the latest variation on this theme, Lloyd’s Register and China’s       MOL plans to launch a hybrid car carrier equipped with the
Shanghai Bestway Marine Engineering Design have teamed up to              system in 2012 to validate and assess the actual reduction in car-
jointly develop a fuel-efficient bulk carrier based upon a 35,000         bon dioxide emissions.
dwt handysize design that is aimed to cut emissions and improve               The project is aimed at establishing more effective carbon diox-
fuel efficiency.                                                          ide reduction technology for future vessels.
    The project will be divided into two work packages covering               The second initiative involves the development of a new range
energy-efficiency research into the ship’s hull and systems and tech-     of super slick antifouling paint in association with Nippon Paint and
nical approval and implementation of the proposed solutions.              Nippon Paint Marine Coatings.
    The research phase will look at various areas of the ship’s form          The paint will contain a gel-like membrane that will reduce the
to see where improvements can be made. These include the bow-             drag of a ship through the water. An initial assessment suggests the
shape to optimise vessel-handling and hydrodynamic resistance             paint could reduce carbon dioxide emissions by between 8%-12%
characteristics, wake-fields in the stern region to minimise the aft      compared with conventional antifouling paints. Nippon Paint said it
end resistance, propeller-rudder energy-saving devices, propeller         expects to market the product commercially in 2013. ]

January/February 2010                                                                                                      asiamaritime       35
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Macgregor’s got it covered
MacGreGor, the carGo handling                        Cargotec senior naval architect for
equipment making subsidiary of Cargotec,        bulkers Torbjörn Dahl says: “This is a signif-
has launched an electrically driven system      icant advance in electric-drive technology.”
for side-rolling hatch covers which is more          The firm says that a lever mechanism
economical and environmentally friendly         converts the electric motor’s rotating mo-
than existing operations.                       tion into a vertical movement, providing
     MacRack combines the two operations        the lifting force needed to raise the hatch
of raising a cover and moving it sideways       cover. When closing, the mechanism low-
to open or close the hatch. As a result the     ers the covers and pushes them together to         from Japan’s car industry. This led to the
system makes separate hatch cover lifters       achieve the correct amount of rubber com-          first orders in 2006. But the company said
obsolete. The combined rack-and-pinion          pression and tightness.                            further improvements to the design were
drive and lifter employ an enhanced con-             MacGregor and Cargotec started devel-         needed to improve safety and develop the
trol system and just one electric motor per     opment work on electric-drive side-rolling         technology for bulk carriers which has sub-
hatch cover panel.                              hatch covers in 2001 following inquiries           sequently led to the launch of MacRack.]



                                                                   training reviews
                                                                   Made easy
                                                                   seaGull, the coMputer-based training specialist, has launched an on-
                                                                   line version of its Seagull training administrator crew training software.
                                                                       The move will allow shore staff unlimited access to all training admin-
                                                                   istrator records and statistical reports. All 149 of Seagull’s computer based

MoL Measures up                                                    training modules will be available online, for access globally.
                                                                       Seagull managing director, Roger Ringstad, said: “We have responded
the world’s first portable liquid level gauge to measure           to the needs of customers by developing what is an intuitive online pack-
water levels in vessel ballast tanks has been developed by         age that is both easy to use and offers a comprehensive training suite”
Japanese shipping line, Mitsui OSK Lines in association with           The online training courses include ECDIS, ship security officer and
Musashino.                                                         safety officer.
     The gauge measures the level of ballast water in a tank by        Mr Ringstad says, “training results can be accessed both on screen
dropping a portable measuring tube into the sounding tube of       and in printed reports”. “Training modules can be run fully online, so
the ballast tank. A sensor detects air pressure changes in the     that results can be stored in the customer’s database,” he says and adds
tube and quickly measures the ballast water level.                 that users do not have to install any software, while multiple users can
     The conventional measurement of ballast water levels us-      access the system at the same time from different offices.
ing a sounding tape is complex, time-consuming and requires            GAC Transfer Services has teamed up with MariFlex, the Dutch of-
several crewmembers.                                               floading equipment specialist, to launch ship-to-ship transfer services at
     By comparison, the new liquid-level gauge makes the op-       locations in Asia, the Middle East Gulf, Indian Ocean and Europe.
eration quick and easy. It takes only 10-15 seconds for crew-          The alliance combines GAC’s global reach with MariFlex’s 60 years
members to check the level of each tank using a main gauge         of experience in ship-to-ship transfers of dry and liquid cargoes includ-
unit that weighs just 5kg.                                         ing crude oil, petroleum products and liquefied gas.
     The system is compatible with most vessels because the            “Transferring dry or liquid bulk from ship to ship is a highly techni-
gauge uses the vessel’s air compressor system. The gauge’s         cal and challenging operation that requires not only specialised skills
main unit can be connected with the air hose with a one-           and equipment, but also rapid mobilisation capability and in-depth ex-
touch system, while the pressure sensor automatically adjusts      perience in dealing with contingency situations”, said MariFlex manag-
for changes in temperature and atmospheric pressure.               ing director Ruud Cogels.
     MOL said the new system improves operating efficiencies           Ship-to-ship transfer operations will be offered from more than 10 bases,
and enhances the safety of loading/discharging operations. ]       including Malaysia, Vietnam, Indian Ocean, Rotterdam and Amsterdam. ]

36    asiamaritime                                                                                                            January/February 2010
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MARIS pRepAReS TO HAND OveR
ADMIRAlTy e-NAvIgATOR TO UKHO
Unveiled in December, at a special event held at the Shanghai Science and
Technology Museum, the Admiralty e-Navigator from The United Kingdom
Hydrographic Office will soon be released for general maritime use.
ExpEctations arE high that e-Navigator will revolutionise                 status of the maritime information held by the fleet. UKHO esti-
navigation, because it will address one of the key contradictions         mates that 70% of good navigation can be traced to preparation.
facing the modern mariner: technology that has been designed to               At the point of voyage planning, mariners using e-Navigator
enhance safety also brings extra administration that might compro-        will be able to identify the products needed to navigate safely and
mise that safety.                                                         compare these products with those held by the ship. The system
    In December, a milestone was passed in preparation for the full       will calculate the charts needed for a voyage, check against current
release of e-Navigator, after digital technology developer MARIS          chart holdings and advise what additional charts and which correc-
received factory acceptance for the new system.                           tions are required. It will allow new products to be ordered from
    Designed to give mariners and shore staff managers a gateway          UKHO instantly, and for their transfer to the bridge ECDIS. This will
to all Admiralty products from the UKHO, e-Navigator organises,           undoubtedly improve safety.
updates, and unifies all of the paper and digital information needed          The ‘Passage Planning’ application, which is set to be available
for safe voyage planning, including tide and weather information.         from mid-2010, works in conjunction with other e-Navigator func-
    “Clearly, ECS and ECDIS have assisted navigators on the bridge,       tionality to generate a complete voyage plan including ship load-
but it is fair to point out that the digitisation of charts has brought   ing and trim details, squat calculation, port and pilot information.
problems of its own in terms of extra administration,” said MARIS             Again, e-Navigator will give advance notification of navigation-
Chief Executive Steinar Gundersen. “Accidents due to crew fatigue         ally significant changes through Admiralty Information Overlay,
are increasing. Masters and officers interviewed by MARIS say             and allow users to view licensed ENCs, ARCS charts, and Tidal In-
that software to simplify and reduce their administrative workload        formation from TotalTide. Users will also be able to view third par-
would offer a real benefit.”                                              ty applications such as MARIS Paper Chart Update Module, MARIS
    The launch of e-Navigator marks the first stage of the UKHO’s         Weather Manager, The Lloyds Register Fairplay Ports & Terminals
plans to help mariners and shipping companies meet requirements           Guide and DNV Navigator, and update via standard email and
of a changing commercial and regulatory environment and to pro-           internet. In fact, they will be able to use the system in conjunction
vide better decision making tools to plan and execute voyages.            with a full range of third party paper chart updating services to im-
    Up until now anyone using navigational products and services          prove the management of paper chart corrections on board.
has had to work with a multitude of different information from dif-           Admiralty e-Navigator’s product catalogue and chart selection
ferent sources. Admiralty e-Navigator brings together Admiralty           and ordering tools will mean that customers will be able to buy
navigational intelligence in one place, in an approach designed to        only the navigational information they need when they need it,
make every stage of navigation and fleet management smarter, sim-         only for as long as they need it, according to UKHO.
pler and safer.                                                               Downloading the catalogue and working folio updates every
    Mike Robinson, Chief Executive of the UKHO, said: “Maritime           week via satellite at sea will take under a minute at 9600 BAUD.
navigation is undergoing a fundamental shift, from paper to digital,          Worthy of separate mention is TotalTide – which automates
from protective to proactive navigation. It is moving beyond the ba-      the tide prediction process and provides an easy means of view-
sic avoidance of risk towards the International Maritime Organiza-        ing both under-keel and safe overhead clearances. It contains tidal
tion’s vision of e-navigation, which will deliver enhanced services       information for over 7,000 ports and more than 3,000 tidal stream
to the mariner. The UKHO is at the forefront of bringing that vision      stations worldwide and is now accepted in place of the paper tide
to life. Admiralty e-Navigator will provide seafarers with not just       tables as carriage compliant by a large (and growing) number of
navigational data, but intelligence which improves their ability to       flag states.
sail safely and efficiently.”                                                 Given that UKHO Electronic Navigational Charts (ENCs) are
    Users of e-Navigator can synchronise digital charts and publi-        used by nearly 70% of international ships operating to SOLAS
cations with the latest Admiralty updates, and check the real-time        standards, e-Navigator uptake is expected to be rapid. Part of


January/February 2010                                                                                                    asiamaritime       37
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the reason for this may be the fact that one of the first new dig-             miralty e-Navigator is also a gateway to a growing number of new
ital products to be made available in e-Navigator will be Admi-                applications, datasets, products and services produced by both the
ralty Information Overlay (AIO) - the only global digital service              UKHO and other maritime information suppliers.
that includes worldwide Temporary and Preliminary Notices to                       As well as allowing the creation and maintenance records of
Mariners.                                                                      all Admiralty charts and publications, users onboard will be a able
     UKHO produces a worldwide series of some 3,300 paper nau-                 to track the status of their chart holdings, update their AVCS, ARCS,
tical charts and 160 publications under the Admiralty brand and                ECDIS Service and Admiralty Digital Publications, choose to up-
has a growing portfolio of Electronic Navigational Charts (ENCs).              date based on routes or holdings to minimise download costs, and
     The Admiralty e-Navigator has been based on the MDS (Mari-                avail themselves of automatic application of updates as soon as
time Digital Services) electronic navigation platform from MARIS,              received to keep digital holdings fully up to date. They will also be
which has already been supplied to 1,000 users. The MDS Server                 able to monitor their licence expiry dates to minimise chart costs.
pre-processes the data that every mariner needs to correct paper                   The system will also improve standards with respect to Port
charts. It includes an ARCS/ENC manager, a route manager, and its              State Control inspections, Mr Gundersen said, because it will offer
own port and document manager.                                                 a real time, accurate view of holdings and the correction status of
     However, to develop full functionality for e-Navigator, UKHO              all Admiralty products on board every ship managed.
specified 1400 new requirements, following its own close consul-                   Furthermore, as noted, MDS provided the basis for e-Navigator.
tations with mariners at every stage of e-Navigator’s evolution. The           Integral is the MARIS Port Manager, which provides data for plan-
results are reckoned to be unique, combining the flexibility and               ning a voyage to a new port. Here, information about any port in
real-time benefits of digital technology with the breadth and depth            the world can be called up from within Admiralty e-Navigator by
of information the mariner requires for sailing today.                         clicking on a port icon in the chart interface. The data is provided
     At the heart of Admiralty e-Navigator is a free Admiralty prod-           by Lloyd’s Register - Fairplay and includes VTS diagrams and call-
uct catalogue, free advanced chart optimisation and selection, real            ing point instructions, pilot information, port regulations, anchor-
time product ordering and delivery tools, a free electronic chart              age locations, port approach maps and navigation details, and
viewer and instant access to Admiralty digital product updates. Ad-            even details such as stevedore working hours. ]




                EcDis from Maris – the company will not compete for digital data business with other UKho distributors.




38     asiamaritime                                                                                                             January/February 2010
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                                                                                            Keep on trucking: Logistics patterns in asia are changing




 AsiA’s growing Free-trADe moDel
Declining demand in the west for Asian goods is pushing the region’s politicians
to free up local markets

Just a few years ago the idea of an Asian free market seemed             lateral agreements. The Economist Unit report cites a survey con-
decades away. This was due for the most part because of vastly dif-      ducted by the Asian Development bank in 2008, which revealed
ferent levels of wealth among nations and radically different eco-       that only 22% of 609 companies located in East Asia took advan-
nomic models.                                                            tage of the preferential tariffs and easier market access, available
    But as the west implodes under the weight of its own greed           under free-trade agreements.
and hubris Asia is looking within itself for trade opportunities.            As of mid-2009, the picture has changed radically with the
According to a FedEX Express commissioned report by the Econo-           number of trade deals growing to 54 pacts sealed between Asian
mist Intelligence Unit for the US courier and logistics company, a       countries in and beyond the region.
surge in free-trade agreements will democratise export-import busi-          While many of these agreements are reaping rewards it is the
ness by opening the doors to small- and medium-sized enterprises.        China-Asean agreement that has the potential to bring about a sea
    Long seen as a toothless collection of politicians devoted to the    change in trading and thus logistics models.
status quo, the Association of Southeast Asian Nations is credited           According to the report: “Much of Asia’s current intra-re-
with the drive to an increasingly free Asian market. “The Associa-       gional trade reflects different countries’ specialisation in different
tion of Southeast Asian Nations is emerging as the hub of intra-         segments of one long supply chain that snakes across national
Asian free-trade agreements, having concluded pacts with China,          borders.
Japan and South Korea,” the report stated.                                   “The bulk of the finished products, from toys to flat-panel TVs,
    The latest such agreement was the China-Asean free trade area,       are ultimately destined for store shelves in Los Angeles or London.”
which took effect in the first days of 2010, and as it did so created        But as the historical scenario depicted above, weakens, the
a common market for more than 1.7bn vendors and consumers.               study suggests that Asian small- and medium sized enterprises will
    “Under the agreement, 90% of the goods traded between Chi-           increasingly look to newly affluent China as a target for their goods.
na and Asean’s six richest member countries now enjoy zero tariffs,          “China may be able to provide this [source of final demand]
the report said.                                                         as its middle class becomes richer and policymakers seek to rebal-
    Prior to the China-Asean agreement, businesses had been              ance its economy away from a reliance on exports and towards
slow to catch on to the benefits offered by other bi-lateral or multi-   domestic demand.” Thus changing logistics patterns forever. ]


January/February 2010                                                                                                        asiamaritime          39
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A bit oF A sheiKh up
C C Kai lands in another maritime hotspot
                                                                                                 experts drifted together to form a place with
                                                                                                 real depth.
                                                                                                     Rowbottom fished around his battered
                                                                                                 briefcase to show me some artistic rendi-
                                                                                                 tion of “Project Oasis”. Down at the water-
                                                                                                 front there were to be new docks, capable
                                                                                                 of taking in general cargo, boxes, oil, gas,
                                                                                                 you name it. At this point in the enthusias-
                                                                                                 tic promotional presentation it occurred to
                                                                                                 me that Rowbottom had once been in the
                                                                                                 army. He had a soldier’s appreciation of
                                                                                                 the waterfront—a place where many crates
                                                                                                 were piled up and lost in the general need
                                                                                                 to get moving “Up country”. There seemed
                                                                                                 to be a lot of ramps on his drawings.
                                                                                                     Would this new marine centre, built
                                                                                                 from scratch on foundations driven into a
                                                                                                 part of the state which had hitherto only
                                                                                                 hosted the odd sand storm stand a chance
Better not mention the precise location of the marble-lined             against the older, established ones, I wondered. “Oh aye”, he re-
executive VIP lounge that hosted my recent meeting with one             sponded, “a nice dedicated office and admin quarter will go down
Marcus Rowbottom. As many of my esteemed readers will know,             reet capital with the shipping folk.” He tapped the side of his nose
Rowbottom is the mover and shaker behind the Sheik’s determina-         “Ah’ve spoken with a few of the bigger cheeses and we’ve spread a
tion to build a new marine centre in his Sheikdom. Rowbottom is         few options around, to sort of peak up the demand for space. And
a recognisable figure in the region and wears his tropical weight       you mustn’t underestimate how much of an attraction around the
suits with pride, especially his ultra light blue blazer with the he-   clock wagering can be for your average maritime bloke. Unlimited
raldic emblem. He needs little prompting to describe the coming         drinking and roulette opportunities will be hard to pass up, we
thing: Where once was just sand and salt water will stand a new         feel. You can’t beat our place for style and quality of life. I mean
palace of arbitration, a seat of maritime administration and count-     staying in places like Singapore or Shanghai or Hong Kong will
less blocks of office buildings to house the companies forming a        take years off you. The stress of so-so infrastructure exacts it price, I
new cluster and a whole new dockland.                                   can tell you.”
     Our flight was running late and Rowbottom’s face turned that           With this amount of development, the special demands of
fine shade of puce we associate post-prandially with the well-          banks and financiers were also to be met with buildings and facili-
seasoned expats East of Suez. Was the sandy desert necessarily          ties fit for kings. A vast new computer centre would supply con-
the ideal place to locate a new venue for dispute settlements in all    nectivity and data to the new-comers. Tax burdens be gone, your
things maritime? I asked delicately. “No problem at all”, Rowbot-       average banking bonus would go straight to Jersey or Bermuda or
tom answers, “these new- generation desalinization plants can turn      Labuan for safe keeping from the grasping governments of the old
any old bit of dried biscuit into lush garden… the arbitrators will     centres.
love it, holed up in their six star hotels. They can dispense justice       A further delay was announced. Our flight would depart in
and dispassionate hearings by day and dine, dance and swim un-          three hours.
der the stars by night. One or two of them I’m sure will take advan-        More martinis. Rowbottom dug out a pile of 35mm slides and a
tage to buy an apartment off plan in the Justice Tower which will       viewing gadget—more breathtaking vistas and towers. And before
be breaking ground any day soon, I can tell you.”                       my eyes I could see a shimmery light in the distance of my mind’s
     I had always thought that marine centres arrived after a process   eye, a row of signature buildings designed by the best in the busi-
of accumulation, a gestation of decades or even centuries when          ness and ships lining up at sea far into the distance, a little high in
traders, shipping companies, insurers, states and 1000 different        the water though… ]


40    asiamaritime                                                                                                         January/February 2010
The Shipping, Ports & Terminals Exhibition & Conference for Asia




TOC Asia 2010
16-18 March
Shanghai International Convention Centre,
Shanghai, China

www.tocevents-asia.com




Preparing for rebound
In a hugely uncertain world, TOC Asia will cut through the complexity of your
market to give you a clearer picture of what is really happening in the Asian
shipping and ports industries.

Key conference themes at TOC Asia 2010:
• Go West – linking China’s rapidly growing intermodal          • The Upside of the Downturn – re-engineering
  network with the major maritime gateways                        terminal management in the teeth of recession
• What Next for the Shanghai Region – a look at the big new     • Terminal Automation – reviewing the latest
  ports opening up close to China’s prime gateway                 developments in technology and automation
• Cross-Straits Trade – what the growing maritime links         • India’s Growth Port – a success story from the
  between China and Taiwan mean for the port industry             Subcontinent
• Health & Safety – safety at work should be seen as a way to
  increase productivity and profitability




Organised by:
                    Book your place today at www.tocevents-asia.com/book
                    For further information please contact:
                    Maria Alm | Email: maria.alm@toc-events.com | Phone: +44 (0)20 7017 4378
amdiary         amamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamama




Dearly beloveD we are gathereD
near a great seaFooD
restaurant
Who pays the ferryman could gain a modern interpretation in                 including south of the west Lamma channel on the edge of one of
Hong Kong if the scattering of human ashes at sea starts to boom.           the territory’s busiest shipping lanes.
     This follows the launch of a pilot scheme on January 23 by the             The government said there had been growing interest by the
local government’s food and environmental hygiene department.               family and friends of the deceased to scatter their ashes at sea.
     Officials are initially providing a free ferry service from Hong           The department spokesman adds: “The number of applications
Kong Island to the ashes scattering area near the island of Tung            has increased in the past three years, from 160 in 2007 to 273 in
Lung Chau, or Dragon Island.                                                2009. This shows that people have gradually accepted this environ-
     A department spokesman says: “Each ferry trip can accommo-             mentally friendly way of disposing of human ashes.”
date 10 applicants with each of them bringing no more than seven                In Greek mythology, relatives left two coins on the eyes of the
family members, relatives or friends on board. If the service is well-      newly dead to pay the ferryman, who was either Charon or Phleg-
received, additional ferry schedules will be arranged.”                     yas, to transport the souls across the River Styx which formed the
     The department has three designated areas in Hong Kong waters,         boundary between Earth and the Underworld. ]




  Cruise ship gains extenDeD Family
  While ship namings are often highly corporatised events                   fun approach, we also want people to think about our oceans,
  with invitations strictly limited to the customers and friends of         and in doing so support the important work of the New England
  the shipowner concerned, at least one Asian shipyard had in-              Aquarium.”
  vited members of the public off the street to participate.                    As part of the virtual christening, honorary godparents could
       Now, Princess Cruises has taken the whole process a stage            also watch a live web cam from the ship and watch a pictorial
  further after initiating what it said was the first-ever virtual chris-   photo book of the ship’s drydock in Singapore.
  tening for its 1999-built, 30,277 gt cruise liner, Ocean Princess.            The drydocking also saw the installation of new fuel-efficient
  The move also raised much needed cash for the leading New                 silicone paint on the ship’s hull as part of a wider commitment
  England Aquarium in the eastern United States.                            by Princess Cruises to the marine environment.
       In the virtual christening, which took place in December, peo-           If virtual christenings catch on it could do no end of good
  ple could click online to become honorary godparents. Each new            for shipping companies and shipbuilders wanting to improve
  godparent triggered a $1 donation from Princess Cruises to the            their fuzzy corporate social responsibility while raising money
  New England Aquarium, which is seen as a global leader in ocean           for good causes as well. ]
  exploration and marine conservation, to a limited of $25,000.
       The Ocean Princess, formerly the Tahitian Princess, was re-
  named following a two-week drydock at the Keppel Shipyard in
  Singapore. After coming out of drydock the ship embarked on a
  16-day Southeast Asia cruise.
       Commenting on the virtual cruise, Princess Cruises execu-
  tive vice president Jan Swartz says: “At the end of her current
  tour, we hope to have a huge group of honorary godparents for
  Ocean Princess.”
       The executive added: “In this digital age, we wanted to de-
  sign a way that all our fans worldwide could be part of the cel-
  ebration. But not only do we want to entertain people with this


42    asiamaritime                                                                                                           January/February 2010
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            portrait oF a Disaster
            asia maritime is confused by reports that five North Korean               the government delivered the medals to the bereaved relatives and
            seafarers died while saving the portraits of the hermit-kingdom’s         honoured the survivors with medals.
            father and son rulers, when their cargo ship sank off the Chinese            The five who were lost and 15 survivors were onboard the
            coast in November.                                                        1993-built, 2,232 dwt Ji Song 5 which sank during stormy weather
                Their sacrifice has been recognised by the North Korean gov-          on November 5 en-route to Dalian.
            ernment who posthumously conferred a raft of honours on the five             The five helped save the portraits of late North Korea founder
            for “defending the headquarters of the revolution”.                       Kim Il-sung and son and current leader, Kim Jong-il. While the
                The awards included ‘Labour Hero’ and the Order of the Na-            portraits are regarded as among the armed forces’ greatest treasures
            tional Flag 1st Class.                                                    which people must safeguard in war or peace, the Asia Maritime
                Praising the dead sailors for their “heroic self-sacrificing spirit   team are curious to know how the five managed to save the por-
            and their revolutionary comradeship in rough wind and waves,”             traits but not themselves. ]


                                                                                                   shipping marine & ports World expo 2010



               sailing past 60                                                         Dates       3-6 March 2010
                                                                                                   Bombay Exhibition Centre, Mumbai, India
                                                                                                   Contact: www.chemtech-online.com
               150 luminaries from South Korea’s government and
               maritime industry joined Hanjin Shipping chairwoman Choi                            China maritime
               Eun-young to celebrate publication of a new book to com-                            16-18 March 2010
               memorate the company’s 60th birthday in mid-January.                                Hong Kong Convention & Exhibition Centre
                   Published in two volumes, ‘Hanjin Shipping - History of                         Contact: www.bairdmaritime.com

               60 Years’ traces the founding and growth of Korea Shipping
                                                                                                   toC asia 2010
               Corp, which was founded in December 1949, its merger with
                                                                                                   16-18 March 2010
               Hanjin Container Lines in 1977 and the subsequent develop-
                                                                                                   Shanghai International Convention Centre
               ment of Hanjin Shipping.
                                                                                                   Contact: www.tocevents-asia.com
                   Commenting at the book launch Ms Choi said: “Hanjin
               Shipping has been growing together with the country’s econ-
                                                                                                   Vietship 2010
               omy, with the firm playing a significant role shipping necessi-
                                                                                                   17-19 March 2010
               ties to the public in the early days after the nation’s founding,
                                                                                                   National Convention Centre
               acting as guardians of national security during the Korean War
                                                                                                   Hanoi, Vietnam
               and becoming a bridge sending Korean products across the                            Contact: www.vietship-exhibition.com
               globe with the dawn of the export-oriented era.”
                   Joining Ms Choi for the launch of the 700-page tome,                            Asia Pacific Maritime 2010
               which took more than two years to produce, were Land, Trans-                        24-26 March 2010
               port and Maritime Affairs vice minister Choi Jang-hyun and                          Singapore Expo
               Korea Maritime Research Institute director Park Hyon-kyu. ]                         Contact: www.apmaritime.com/AsiaM


                                                                                                   sea Japan 2010
                                                                                                   21-23 April 2010
                                                                                                   Tokyo BIG SIGHT Exhibition Center
                                                                                                   Contact: info@seajapn.ne.jp


                                                                                                   8th asean ports & shipping 2010
                                                                                                   20-21 May 2010
                                                                                                   Windsor Plaza Hotel, Ho Chi Minh City
                                                                                                   Vietnam
                                                                                                   Contact: www.transportevents.com




            January/February 2010                                                                                                   asiamaritime      43
ammaritime’s back pages                      amamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamamam




DaNish mariNer Who set sail For
ChiNa, aND maDe his FortuNe
Nick Walker looks back on the family that captured a Blue Girl
The small BalTic port of Aabenraa has changed little over the               transhipments to and from Shanghai and Guangzhou, which
centuries. And like many such coastal settlements on the Jutland            by this time had their own Jebson branch offices.
Peninsula, this quiet Danish town with its pastel-coloured low-                 A notable success during this era of expansion was the ac-
rise buildings, has a mossy and relatively obscure graveyard in             quisition of the Blue Girl Beer brand. A brew from the northern
the shadow of the local church. But if one looks closely one can            German city of Bremen, the beer was being imported to Tsingdao,
make out, engraved on more than a few of its old and weathered              Germany’s colonial enclave on the China coast, when it caught
gravestones, the three mackerels logo of one of the Far East’s most         the shrewd eye of Jebsen, who, being a Dane, knew a thing or two
important trading companies.                                                                             about the golden nectar. Duly, in
     Today Jebsen & Co is very much at                                                                   1906 Blue Girl Beer became a Jebsen
home in Asia, and its business operations                                                                product.
mainly encompass Hong Kong, mainland                                                                         From the wistful dreams of a
China, Taiwan, Macau, and Korea. Those                                                                   young boy looking out to sea in the
final resting places belong to members                                                                   age of empire, Jebson established one
of the extended Jebsen family, as well                                                                   of the most highly regarded Danish
as long-deceased employees. Half a                                                                       global enterprises the world has ever
world away from the company’s Hong                                                                       seen. But his legacy – Jebson & Co –
Kong headquarters, the graveyard betrays                                                                 has had its ups and downs.
nothing of the scale of the vast maritime                                                                    In 1963, Communist China made
empire that Aabenraa was the centre of                                                                   another lurch to the left, and expelled
for many decades.                                                                                        all remaining foreign companies,
     The European dream of tapping into                                                                  including Jebsen & Co – prioritising
the mainland megabucks market is one                                                                     ideological purity over taking the
we often hear about, and in the late 19th                                                                foreign capitalist’s shilling. Chairman
Century a similar mindset prevailed. But                                                                 Mao and his advisors changed their
there were three key differences back                                                                    minds a few years later though, and
then: the Occidental hopefuls always ar-                                                                 Jebson & Co was one of a handful
rived by sea, the risks were even greater,                                                               of foreign firms readmitted to oper-
                                             Jacob Jebsen: “The beer’s on me”
and there were many more unknowns.                                                                       ate in “Red China”, until the country
Those eying Chinese profits during the days of Queen Victoria,              opened up to the global economy in the 1980s.
Christian IX of Denmark, and the Qing Dynasty truly required a                  Remarkably, despite the passage of time and the vicissitudes of
pioneering spirit, a quality that Jacob Jebsen happened to possess          history, Jebsen remains a family business. The late Jacob Jensen is
in abundance.                                                               the great-grandfather of current company chairman Hans Michael
     An Aabenraa native son, Jebsen co-founded Jebsen & Co with             Jebsen.
his friend and business partner Heinrich Jessen. Jebsen and Jessen              Michael joined Jebsen & Co in Hong Kong in 1981 and be-
set up a shipping agency in Hong Kong, which, within a few years            came Chairman in 2000, overseeing a diverse global giant of
of its formation, operated 14 steamers along the China coast. And           commerce. Notably, Jebsen is one of very few foreign firms to
their business swiftly blossomed into a major trading company –             have had a continuous involvement in Hong Kong and China that
a “hong” that held its own against local gigantic hongs of the day          predates air-freight. And it all began when a young Danish mari-
like Jardine Matheson and Swire.                                            ner gazed at the sea’s horizon and imagined the great riches that
     In the early 20th Century, Jebsen & Co gained a number of              lay beyond.
footholds on the mainland. It was around this time that ves-
sels bearing the insignia of the three mackerels increased their                                                       balticmedia@ymail.com



44    asiamaritime                                                                                                          January/February 2010
                               The Perfect Climate



                                      Strong as Steel
     The plum blossom flower survives and blooms even in the harshest winter conditions.
                 At OOCL, the plum blossom symbolises not only what we do,
but who we are. Our character and resilience have helped us to emerge from the economic crisis
           stronger and more dedicated to serving our customers than ever before.




                                        www.oocl.com

      North America (1) 888 388 OOCL (6625) • Asia (852) 2833 3888 • Europe (44) 207 786 6622
                                   Asia Pacic Maritime 2010
                                   24 - 26 March 2010 • Singapore Expo
                                   www.apmaritime.com/AsiaM




                      Opportunity is in your hands
With over 900 leading participating companies from more than 50 countries converging
with the latest in marine equipment, technologies and services, there are now more
reasons to take your place at this Asia Pacic’s premier exhibition.

Join us at the 11th edition of Asia Pacic Maritime!

For more information, contact us at apm@reedexpo.com.sg or +65 6780 4672




    Organised by:   A member of:   Supported by:   Endorsed by:   Ofcial Media Partner:   Logistics Partner:   Held in:

				
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