Dry Bulk Shipping Recovery Expected in 2017

By MarEx 2015-05-15 19:22:13

The dry bulk shipping market is not expected to return to profitability until 2017, despite a modest recovery in earnings anticipated over the next two years, according to the latest edition of the Dry Bulk Forecaster, published by global shipping consultancy Drewry.

The dry bulk market has always been sensitive to demand fluctuations and seven years ago a demand-driven peak in the market made many owners cash-rich, helping them survive the weak market that has persisted since. While this market trough has been supply-driven, with the industry suffering several years of unprecedented oversupply, the more recent demand slow-down has added to market woes, demonstrated by the conversion of some dry bulk vessels to tankers in a desperate attempt by owners to return to profitability.

“Anaemic demand growth is here to stay, especially as the trade development in coal and iron ore into China is expected to decline further,” commented Rahul Sharan, Drewry’s dry bulk shipping lead analyst.

Iron ore and coal form almost two-thirds of the global dry bulk market and China has been the largest influencer. One of the main concerns in China has been deteriorating air quality, hence the Chinese government shifting its focus from polluting, coal-fired power plants to renewables and cleaner sources of energy. This is casting a shadow over the thermal coal market which will have a detrimental effect on bulk shipping demand.

On the supply side, to date 2015 has seen a record number of demolitions. The average demolition age has fallen and if this trend continues, many more recently built vessels are likely to face a similar fate. Continued high demolition, conversions and low vessel deliveries will therefore keep a check on the overall fleet size.

“We do not expect any noticeable recovery in bulk shipping freight rates this year as the market remains severely over-tonnaged,” added Sharan. “While we expect some improvement in earnings through 2016, this is unlikely to be sufficient for freight rates to reach breakeven. However, we anticipate that the sector will return to profitability by 2017, provided current rates of demolitions persist and ship owners refrain from placing new orders.”

Petrobras Bribes Estimated at $2.1 Billion

By Reuters 2015-05-15 18:46:19

Brazilian investigators believe 6.19 billion reais ($2.1 billion) in bribes were moved in the Petrobras corruption scheme, prosecutor Deltan Dallagnol said on Thursday.

Prosecutors seek to restore 6.77 billion reais to public coffers through fines and the return of stolen funds, he said at a televised press conference to present criminal charges against 13 people, including four former congressmen.

Three of the ex-lawmakers were preventively detained on April 10, the first politicians arrested in the 14-month-old probe. One is from the ruling Workers’ Party and the other three belong to the smaller opposition Party of Solidarity.

Dallagnol, speaking from the southern city of Curitiba where Brazil’s largest-ever corruption investigation began, called the charges “emblematic” and said they showed the prosecution had entered the political nucleus of the kickback scheme.

Prosecutors accused former executives at Petrobras and two dozen engineering firms of inflating the value of service contracts and funneling the excess funds into their own bank accounts and to political parties.

The Supreme Court in Brasilia is also investigating 34 sitting politicians on suspicion of receiving bribes but none have yet been formally charged. Elected officials enjoy special legal protection in Brazil.

One of the former congressmen charged on Thursday is suspected of taking bribes in exchange for helping a public relations firm and a biotech lab secure contracts with state-run bank Caixa Economica Federal and the health ministry.

Another is thought to be the main distributor of kickbacks to the Party of Solidarity.

All are tied to the Petrobras probe by Alberto Youssef, the black-market money changer who agreed to reveal beneficiaries of the corruption scheme in exchange for a lighter sentence.

Federal Judge Sergio Moro will decide whether or not to accept the charges. If he does, the former congressmen will join the 97 other people who have been indicted.

($1 = 2.99 Brazilian reais)

Air-Lubrication Ferry has Lithium Titanate Batteries

By Wendy Laursen 2015-05-15 18:36:34

A team in the E.U. is building a zero emission air supported commuter ferry capable of a speed of 30 knots. The ferry will be powered by a lithium titanate battery system, an alternative to lithium ion batteries that are faster to charge.

Partly funded by the European Commission in a project called BB GREEN, a full size demonstrator of the new battery-driven commuter ferry is expected to be launched late this summer.

An eight-partner-strong team, headed by SES Europe AS (a subsidiary of Effect Ships International), has developed the new vessel concept. Provided funding can be raised, demonstrations with the new 22m ferry will take place in several cities around Europe. The partners’ goal is to create a technological shift in waterborne commuter transport, as the variations of the design can be configured for up to 100 passengers.

The BB GREEN fast ferry will be featuring two permanent magnet motors with a continuous rating of 300kW, operating at a voltage of 720 V DC for propulsion and one motor delivering up to 80kW for the lift fan system. In a commercial application the vessel will use a 400kWh battery lithium titanate battery developed by project partner Emrol from Belgium, giving the vessel a range been recharging of the battery of approximately 14 nautical miles when operated at high speed. For the demonstrator a half size capacity battery will be fitted.

The battery technology was chosen because it allows a very high number of recharging cycles (up to 25.000 cycles even when 80 percent of the total energy storage capacity is used before recharging) and fast recharge (in less than half hour). This makes the new battery modules particularly suitable for heavy duty commercial use.

The vessel will use battery electric drivelines from Echandia Marine Sweden, who also will provide a new supercharger system for fast recharging of the battery. Echandia is the system integrator partner in the project.

The vessel, with a 400 kWh battery, 30 knots cruise speed and a return route of up to 12-14 nautical miles, will be able to operate on an hourly schedule. Assuming 10 or 12 hours of operation per day the whole year around, the battery pack is expected to last for at least five years.

The propulsion system for the ferry will be contra rotating pod propulsors as this system offers market leading high efficiency over a wide spectrum of speeds in combination with excellent maneuvering and handling of the vessel, says Ulf Tudem, General Manager of Effect Ships International.

The full-size concept demonstrator vessel is now under construction by project partners BJB/ Latitude Yachts at their yard in Latvia. Last year BJB won a European tender competition to build the demonstrator . The yard is now constructing the hull and superstructure from carbon composite sandwich and Divinycell core materials; combined with vacuum infusion technique and Vinylester resin. The resulting structures are strong, light and durable, says Tudem.

Diab AS has been responsible for the composite engineering and is supplying the materials.

DIAB has assisted and supervised the construction yard throughout the lay-up and infusion of the first vessel. According to DIAB’s representative Bjorn Abrahamsen, the main hull infusion process went fully according to plan, to the great satisfaction of the yard as well as the project coordinator – Tor Livgard from Effect Ships International.

To achieve market leading low hull water resistance air supported vessel (ASV) technology from Effect Ships International is used. This technique was developed and patented by the company and verified through extensive tank testing by SSPA Sweden.

“By means of a proprietary lift fan system, almost 80 percent of the vessel’s weight is supported on a cushion of pressurized air offering up to 40 percent reduction in resistance and reduced wake wash,” says Tudem.

ASV and carbon construction are complementary technologies, he says, because reduced operational weight will contribute to reduced energy consumption and lifetime cost.

Studio Sculli in Italy has been responsible for the topside and design of the demonstrator vessel. Sculli emphasizes that several alternative topside designs will be available on request to match local requirements and individual operators’ tastes.

The BB GREEN project end user partner is Aqualiner / Waterbus from the Netherlands. The company is already operating several commuter ferries and has joined the BB GREEN project as they predict fast battery electric ferries will be the way to go in the future.

A market study conducted in the project concluded there is a large number of current and potential routes and route networks for BB GREEN type of vessels around the coasts and on inland waterways in Europe.

“The project partners are of the opinion that a key to convince the market to go zero emission with the BB GREEN concept is to get the full size demonstrator in operation,” says Tudem. “We invite operators and politicians engaged in commuter transport handling to come on board for trials.”

Lloyds Register has been in charge of the classification and safety issues for BB GREEN.

Jotun from Sandefjord, Norway will provide the paint and the antifouling, which has already been successfully tested by Effect Ships International on a previously built ASV test vessel.

Australian Mariners Protest BP in Melbourne

By Kathryn Stone 2015-05-15 15:47:04

Maritime workers staged protests on Friday in front of BP’s Melbourne Headquarters following the company’s decision to lay off the crew of one of Australia’s last local tankers.

According to maritime union sources, the 36 crew members of the British Loyalty are set to be replaced with foreign laborers working for as little as $2 an hour. This is the third Australian tanker in the last 12 months to halt operations, leaving only two local tankers for coastal transportation.

The British Loyalty will leave Australia for Singapore where it will be re-absorbed into BP’s international shipping network.

The decision comes as BP shuts down Bulwer Island, a large East Coast domestic fuel supplier. An estimated 360 Australian jobs will be lost as a result of the closure.

Australia is highly reliant on gasoline imports with over 90 percent of fuel supplies coming into the country from foreign sources.

With the prospect of more foreign workers operating in Australian waters, the union also expressed strong concern over mariner safety qualifications. The British Loyalty has been known to navigate frequently over large stretches of the Great Barrier Reef and the union worries that a catastrophic environmental disaster could result from underqualified seafarers.

David Heindel Secretary-Treasurer of the United States Seafarer’s International Union recently stated, “The Gulf of Mexico disaster taught us that you can’t cut corners to save a few pennies. Instead, you want the best qualified, best trained professionals onboard your vessels.”

In 2010 a Chinese bulk coal carrier run aground on the Great Barrier Reef creating the largest grounding scar to date and releasing heavy fuel oil into the surrounding waters.

Polar Code Challenged over Sewage, HFO

By MarEx 2015-05-15 13:53:50

The environmental provisions for the Arctic Code were approved Friday following the week-long 68th Marine Environment Protection Committee session. Ships trading in the Polar Regions will have to comply with strict safety and environmental protocols specific to the harsh conditions in the Arctic and Antarctic in accordance with the provisions adopted today.

The Polar Code covers the full range of design, construction, equipment, operational, training, search and rescue and environmental protection matters relevant to ships operating in waters surrounding the two poles.

The newly adopted environmental provisions will:

• Prevent the discharge of oil or oily mixtures into the sea and mandate that oil fuel tanks be separated from outer shell.

• Prevent the discharge of and noxious liquid substances or mixtures containing noxious substances into the sea.

• Prevent the discharge of sewage or garbage unless in accordance with MARPOL and Polar Code regulations.

The adoption of the new environmental provisions comes at a critical time for the maritime industry as shipping through both Arctic and Antarctic waters is set to increase. Trends and forecasts indicate that due to melting ice, polar shipping will grow and diversify in coming years. According to the IMO, “these challenges need to be met without compromising either safety of life at sea or the sustainability of the polar environments.”

Campaigners Antarctic and Southern Ocean Coalition (ASOC) have said that Polar Code did not go far enough to protect the Antarctic environment from shipping, adding for instance that the regulations would continue to allow raw sewage to be discharged beyond 12 nautical miles from land.

“While some vessels will carry the necessary equipment, the Code does not explicitly spell out what should happen in the event of an oil or chemical spill,” Sian Prior of ASOC said.

“The inclusion of specific provisions in the Code could have tailored existing requirements to the special needs of polar waters.”

The adoption of the environmental provisions follows the December 2014 adoption of the safety-related requirements of the Polar Code and related amendments to make it mandatory under the International Convention for the Safety of Life at Sea (SOLAS). The complete Polar Code, encompassing the safety-related and environment-related requirements, is expected to enter into force on 1 January 2017.

The Polar Code will apply to new ships constructed on or after 1 January 2017. Ships constructed before that date will be required to meet the relevant requirements of the Polar Code by the first intermediate or renewal survey, whichever occurs first, after 1 January 2018.