Maersk’s Newbuilds a Sign of Market Changes

By MarEx 2015-08-13 20:36:49

Maersk Line has signed a new building contract with Hyundai Heavy Industries (HHI) to build nine vessels with a 14,000 TEU capacity and an option for up to eight additional vessels.

The contract has a value of $1.1 billion and was signed in July by Sam H. Ka, Chief Operation Officer of HHI and Søren Toft, Chief Operating Officer, Maersk Line.

“I am very pleased about this order for which we have taken a new approach,” says Søren Toft. “The vessels will be designed to operate in and perform efficiently across many trades and not just designed for one specific trade. They will help us stay competitive and make our fleet more flexible and efficient.”

Designing vessels with a flexible operational profile is a first for Maersk Line. By moving away from hulls designed with a certain speed and draft in mind, Maersk Line is strengthening its fleet with vessels which can be deployed on East-West or North-South trades where requirements differ, with no impact on fuel consumption.

According to Maersk Group Chief Economist, Graham Slack, trade flows are becoming less predictable after the financial crisis in 2008, making it harder for shipping lines to plan which vessels will sail where in their globe-crossing vessel networks.

While China remains the global manufacturing center, competitors like Mexico, Turkey and others are growing, meaning shipping lines must be prepared for new trade patterns.

“Suddenly, after 2008 and the financial crisis, there’s been a structural shift. We’re not growing at the same pace on these traditional East-West routes anymore, partly due to lower demand in U.S. and Europe but also due to changes in offshoring and near-shoring of production to get closer to these end markets and to diversify supply-chains.”

The new vessels will be 353 meters long. They will join Maersk Line’s fleet in 2017 and sail under Singaporean flag.

This is the third new-building order in Maersk Line’s investment program announced in September 2014. The order follows the seven 3,600 TEU feeder vessels and eleven 19,630 TEU Triple-E vessels announced earlier this year as part of Maersk Line’s $15 billion investment in new-buildings, retrofitting, containers and other equipment.

The vessel order book corresponds to 0.5 million TEU or approximately 16 percent of Maersk Line’s current fleet, excluding options.

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Seattle Signs 15-Year Cruise Deal

By MarEx 2015-08-13 20:21:35

The Port of Seattle has signed a 15-year lease with Norwegian Cruise Line Holdings parent company of Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. The deal secures the group’s ships in Seattle for the full term of the lease and provides passenger volume guarantees estimated to bring $73 million dollars of revenue to the port.

“This is a historic deal for the Port of Seattle,” said Port of Seattle CEO Ted Fick. “A 15-year lease for a cruise terminal is unprecedented on the West Coast. Norwegian Cruise Line is showing real vision by investing in the economic growth of this region.”

Alaska is a favorite cruise destination for guests on all three of our brands and Seattle, with its incredible culinary offerings, luxurious accommodations and outstanding attractions, makes for an ideal homeport, said Frank Del Rio, chief executive officer for Norwegian Cruise Line Holdings. “With primary use of the world-class facilities at Pier 66, we can further customize our guests’ pre- and post-cruise experience and better align it with the superior service levels offered by our three award-winning brands.”

In addition Norwegian Cruise Line Holdings will make tenant improvements to the Bell Street Cruise Terminal estimated at $30 million which will significantly expand the portion of the P66 facilities used for processing cruise passengers.

Under the new lease the group will manage the cruise operations at P66 and will have priority rights to the cruise vessel berth during the cruise season. The port will operate the facilities outside the cruise season.

The capital investment to complete the terminal improvements will be shared between the port and Norwegian Cruise Line Holdings. The 15-year business commitment is estimated to generate over $2 billion in total business revenue for the region, nearly 900 jobs, and over $65 million in state and local taxes.

Seattle’s cruise business, currently leading all cruise homeports on the U.S. west coast in passenger volume, is responsible for over 3,600 jobs, $441 million in annual business revenue, and $17.2 million annually in state and local tax revenues. Each homeport vessel call generates $2.5 million for the local economy.

Earlier this month, the ports of Tacoma and Seattle formally launched the Northwest Seaport Alliance, the first of its kind in North America. While the ports remain separate organizations that retain ownership of their respective assets, they formed a port development authority to manage the container, breakbulk, auto and some bulk terminals in Seattle and Tacoma. The airport, cruise business and some other facilities will remain outside the alliance.

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Japan’s Hydrogen-Fueled Future

By MarEx 2015-08-13 16:00:56

Harnessing offshore resources to produce clean energy has become a primary goal around the world. Japan has been particularly interested following its 2011 nuclear plant disaster in Fukushima. The Japanese have since then sought to reduce their reliance on nuclear energy and become a hydrogen-fueled nation.

This summer a group of international students arrived in Oslo to help formulate plans for offshore production, storage and transport of renewable hydrogen. The solution is named Jidai and it was presented to Japan’s ambassador to Norway, Toshio Kunikata, and DNV GL President and CEO Remi Eriksen.

Jidai is the Japanese word for “new era.” The Jidai concept uses floating offshore wind turbines to harvest hydrogen from purified seawater using a process of electrolysis. The extracted hydrogen is compressed and stored and transported to shore by tanker. The study estimate the technology could become cost-effective by 2030.

Additonally, Jidai could the dependency on fossil fuel imports and reduced CO2 emissions in Japan. The concept would also address discontinuity problems on solar and wind power as well. Instead of integrating the energy into power grids, hydrogen stores energy as it is transported.

“The world is facing an energy shift,” Eriksen said following the presentation. “The global energy demand will rise by more than 50% by 2050. We need energy to be greener, more reliable and affordable. To achieve that, we need to change the way we generate, transmit, distribute and use energy.”

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Denmark Allows Slaughter of Pilot Whales

By MarEx 2015-08-13 15:19:19

Sea Shepherd crews were arrested for interfering with the slaughter of pilot whales on the Faroe Islands known as the “grindadráp.” Yesterday’s slaughter at Sandavágur is the fifth of the year in the Faroe Islands and a total of 490 pilot whales have been killed in the archipelago since June.

The practice of killing of pilot whales is protected by Denmark, which allows the practice of “grindadráp.” The images of the July 23 slaughter and arrests Sea Shepherd crews for trying to stop the killing got worldwide attention. About 12 Sea Shepherd volunteers have been arrested in the Faroe Islands.

Sea Shepherd has been leading opposition to the grindadráp since the 1980s. Operation Sleppid Grindini is the organization’s sixth pilot whale defense campaign in the Faroe Islands.

On August 12, a Sea Shepherd boat arrived on the scene as the pod of whales was being driven to the killing beach on the island of Vágar. The boat disrupted the hunt, maneuvering between the flotilla of boats that had surrounded the whale pod. The Sea Shepherd boat managed to re-direct the pod, causing great confusion to the hunt.

Meanwhile, on the beach, five more Sea Shepherd volunteers ran into the water in order to position themselves between the whales and the awaiting hunters. All five were tackled by police and dragged back to the sand where they were handcuffed.

Initial reports said the pod as large as 200, but about 61 pilot whales were dragged onto the beach and eventually slaughtered. The frenzied killing of the whale pod took two hours. The Faroe Islands tourist industry is linked to the latest slaughter as it sells Atlantic Airways helicopter services to transport people that want to participate in the killings from the islands in the archipelago.

The location was reported by local authorities who gave the green light for the hunt to proceed.

Last week, two major German cruise-liner companies, AIDA and Hapag-Lloyd, announced that they would be cancelling upcoming trips to the Faroe Islands because of the impact of the grindadráp, and the law that protects the slaughter, on its customers. Already, this backlash from the tourism industry is estimated to have caused a loss of 6,000 tourists to the archipelago.

The August 12 slaughter at Sandavágur is the fifth of the year in the Faroe Islands. A total of 490 pilot whales have been killed in the archipelago since June.

On July 23, more than 250 pilot whales were slaughtered on the killing beaches of Bøur and Tórshavn in two separate grindadráps. Five Sea Shepherd volunteers were arrested that day for standing up in the defense of the whales. All five, four of whom are citizens of the European Union, have since been charged with breaching the Pilot Whaling Act and with public disturbance.

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Xiamen Investing In Its Cruise Port

By MarEx 2015-08-13 14:51:13

Xiamen is investing 1 billion yuan (about $16 million) on its Dongdu-area cruise ship home port. Xiamen is a port city on China’s southeast coast, across a strait from Taiwan, and is upgrading its four cruise berth terminals to accommodate ships as large as 220,000 tons. The upgraded port will cover about 470,000 square feet.

The first phase of the project includes four cruise berths at the cruise terminal , a passenger joint inspection building, a hotel cluster, an entertainment center, a business center and a cruise service center.

The city aims to make itself a global shipping hub and the Xiamen International Cruise Terminal is expected to drive tourism as well as serve as a gateway between China and Taiwan. The upgrades will be complete in 2018.

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Xiamen Investing In Its Port

By MarEx 2015-08-13 14:51:13

Xiamen is investing 1 billion yuan (about $16 million) on its Dongdu-area cruise ship home port. Xiamen is a port city on China’s southeast coast, across a strait from Taiwan, and is upgrading its four cruise berth terminals to accommodate ships as large as 220,000 tons. The upgraded port will cover about 470,000 square feet.

The first phase of the project includes four cruise berths at the cruise terminal , a passenger joint inspection building, a hotel cluster, an entertainment center, a business center and a cruise service center.

The city aims to make itself a global shipping hub and the Xiamen International Cruise Terminal is expected to drive tourism as well as serve as a gateway between China and Taiwan. The upgrades will be complete in 2018.

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USCG Increasing Arctic Presence

By MarEx 2015-08-13 12:46:45

The onset of Shell’s Arctic drilling has forced the U.S. Coast Guard to divert some of its resources. The USCG has sent five vessels, including the Waesche, a ship normally used to monitor drug trafficking, to Chukchi to ensure that the oil and gas company complies with environmental regulations.

The USCG has also established a helicopter base in Deadhorse, Alaska to support Shell’s exploration. Two Jayhawk helicopters will be stationed at the base. If Shell were to suffer an incident, the Coast Guard will extend patrols, cancel training exercises and extract resources from remote areas in response.

Shell’s Arctic drilling operations were approved July 22 amid criticism and protests, particularly in the Pacific Northwest, in regard to the environmental impact this could have on the region. Shell and the USCG have attempted to quell anxiety by implementing new disaster response strategies.

In May, Shell unveiled its worst-case scenario plans if an oil spill were ever to occur. Shell agreed that it would be subject to Bureau of Safety and Environmental Enforcement (BSEE) inspections and those inspectors arrived in Chuckchi August 7. The inspectors will be on-site at all times. MarEx reported on this and the rest of Shell’s drilling and exploration terms in an article you can read here.

The last time Shell explored the Arctic was 2012. There were several incidents, including an out of control rig running aground and being scrapped. The Coast Guard dispatched its helicopters to rescue 18 of the vessel’s crew. The USCG was critical of Shell’s safety preparedness following the incident.

But Shell’s preparedness may not be the only one in question. In 2014, the American Petroleum Institute released a report stating that the USCG did not have the necessary infrastructure in place to respond to disastrous spills.

“It is unlikely that responders could quickly react to an oil spill unless there were improved port and air access, stronger supply chains, and increased capacity to handle equipment, supplies, and personnel,” it reads.

The report also adds that exploration requires a comprehensive, collaborative, long-term oil spill and research development program.

It remains to be seen if the Coast Guard’s increased presence in addition to Shell’s new response strategies will suffice if disaster strikes.

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Investment gains save Germany’s DVB

Soaring profit from financial trading helped German ship and aviation financier DVB Bank to post stable first-half earnings despite a drop in net interest income and a major arbitration defeat.
Following a ruling by the London Court of International Arbitration, the Frankfurt-based shipping lender
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APMT invests in Colombia terminal

Maersk affiliate APM Terminals is injecting USD200 million at Cartagena Terminal in Colombia as evidence of its confidence in continuing growth in Latin America.
APMT and Compania de Puertos Asociados (Compas), a Colombia-based terminal operating company, have agreed to jointly manage and operate
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