First reported by IHS Maritime when it kicked off
First reported by IHS Maritime when it kicked off
By MarEx 2015-10-01 20:48:22
International accountant and shipping consultant Moore Stephens says total annual operating costs in the shipping industry fell by an average of 0.8 percent in 2014. This compares with the 0.3 percent average fall in costs recorded for 2013. All categories of expenditure were down on those for the previous 12-month period, confirming that shipowners and operators continued to manage costs sensibly and to watch their cash carefully in 2014.
The findings are set out in OpCost 2015, Moore Stephens’ unique ship operating costs benchmarking tool, which reveals that total operating costs for the tanker, bulker and container ship sectors were all down in 2014, the financial year covered by the study. On a year-on-year basis, the tanker index was down by two points, or 1.1 percent, while the bulker index fell by one point, or 0.6 percent. The container ship index, meanwhile, was down by two points, or 1.2 percent. The corresponding figures in last year’s OpCost study showed a rise of two points in the tanker index, and falls of two points in the bulker and container ship indices.
There was an 0.1 percent overall average fall in 2014 crew costs, compared to the 2013 figure, which itself was 0.2 percent down on 2012. (By way of comparison, the 2008 report revealed a 21 percent increase in this category.) Tankers overall experienced a fall in crew costs of 0.4 percent on average, compared to the 1.8 percent increase recorded in 2013. Within the tanker sector, Suezmax tankers reported an overall increase of 1.6 percent in crew costs, while for operators of Handysize product tankers the increase was 0.2 percent. All other vessels in the category showed a fall in crew costs for 2014.
For bulkers, meanwhile, crew costs were unchanged, having recorded a 0.5 percent average fall for the previous year. The operators of Handymax bulkers and Handysize bulkers paid 2.3 percent and 0.5 percent more, respectively, in crew costs than in 2013, but there was a 2.0 percent fall in this respect for Capesize bulkers, and a 0.5 percent drop for Panamax bulkers.
Expenditure on crew costs was unchanged in the container ship sector, having stabilized in 2013 at the previous year’s level. The 2.5 percent increase in crew costs recorded for container ships in the 1,000 – 2,000 teu category contrasted with the 1.4 percent fall in such costs for bigger container ships (2,000 – 6,000 teu).
Expenditure on stores was down by 2.4 percent overall, compared to the fall of 1.9 percent in 2013. The biggest fall in such costs was the 5.3 percent recorded by operators of Handysize bulkers, closely followed by container ships in the 1,000 – 2,000 teu range (5.1 percent). For bulk carriers overall, stores costs fell by an average of 3.7 percent, compared to a fall of 4.1 percent in 2013, while in the tanker and container ship sectors the overall reductions in costs were 0.7 percent and 3.0 percent respectively. The only increases in stores expenditure were those recorded by Panamax tankers and Suezmax tankers (each 1.2 percent), and by the operators of dry cargo vessels in the 5,000 – 25,000 dwt range (0.8 percent).
There was an overall fall in repairs and maintenance costs of 0.6 percent, compared to the 0.4 percent reduction recorded for 2013. The most significant cost reductions here were those recorded for tankers of between 5,000 and 10,000 dwt (3.3 percent), and for 1,000 – 2,000 teu container ships (3.2 percent). Bucking the trend, VLCCs recorded an increase in repairs and maintenance costs of 2.5 percent and Capesize bulkers of 1.8 percent.
The overall drop in costs of 0.4 percent recorded for insurance compares to the 0.3 percent fall recorded for 2013, and is the lowest in this category for a number of years. There were wide divergences, even within general tonnage categories. Whereas operators of Capesize bulkers paid 5.1 percent more for their insurance in 2014, Panamax bulkers paid 3.8 percent less.
Moore Stephens partner Richard Greiner says: “This is the third successive year-on-year reduction in overall operating costs. This comes as something of a surprise, and is contrary to earlier forecasts. Shipping is clearly watching the pennies, and it may also be the case that more competitive pricing for goods and services has had a part to play in holding down expenditure. Beyond that, as always, the impact of exchange rate changes cannot be determined readily.
“By far the biggest reduction in operating costs, for example, was seen this time in the Stores category. This can be largely explained by the knock-on effect which the fall in oil prices has had on lube oil costs. Such “benefits” do not come often to any industry, and are usually not without a downside, as has been the case in shipping.
“Crew costs were down, albeit marginally, for the first time in recent memory. This could be an indication of a higher level of idle tonnage during the period under review, but is nevertheless welcome news for an industry which has seen crew cost increases of more than 20 percent at their peak.
“Expenditure on repairs and maintenance was also marginally down on 2013, possibly attributable in part to weak steel prices and in part to the fact that poor freight rates arguably do not encourage owners and operators to engage in anything but the most essential repairs and maintenance. It is to be hoped that there is not a future price to be paid in this respect in terms of either safety or performance.
“The bill for insurance coverage was also down, which will come as little or no surprise in view of the high level of competition in the insurance market, which is arguably even fiercer than that in the shipping industry.
“A third successive annual fall in operating costs must be good news for an industry already facing serious financial challenges and preparing to meet still more. But a bigger-picture view provides an insight into just how much operating costs have increased in recent years. OpCost is now in its fifteenth year of publication. At year-end 2001, the average daily operating cost for a Panamax Bulk Carrier was US$3,565. In 2014, it was US$6,046. For a Handysize Product Tanker, the comparable figures were US$4,164 and US$7,931.
“The challenge for shipping is how to build the cost of operation into freight rates in a way which allows for a reasonable profit margin in an industry which is driven by competition and characterized by over-tonnaging. Given that, over the next few years, annual seaborne trade is projected to grow at a reasonable rate, and that the cost of regulatory compliance is likely to increase significantly, one would expect operating costs to rise over the same period. Two things are certain. Firstly, the business of operating ships will remain a costly undertaking. Secondly, the impetus for higher freight rates will not come from the shipping industry’s customers.”
By Wendy Laursen 2015-10-01 20:12:56
Crowley Maritime took delivery of Ohio, the first of four new, Jones Act, 50,000 dwt product tankers this week from Aker Philadelphia Shipyard. The delivery is momentous not only for Crowley Maritime, but also for the industry because it signifies the first time a product tanker has been constructed with consideration for the future use of LNG for propulsion.
The new 50,000 dwt product tankers are based on a proven Hyundai Mipo Dockyards design which incorporates numerous fuel efficiency features, flexible cargo capability and the latest regulatory requirements. The vessel is 600 feet long and is capable of carrying crude oil or refined petroleum products. The remaining three product tankers are planned for delivery in 2016.
Designing, building and operating LNG-powered vessels is very much in line with Crowley Maritime’s overall EcoStewardship positioning and growth strategy. The company formed an LNG services group earlier this year to bring together resources to provide LNG vessel design and construction management, transportation, product sales and distribution and full-scale, project management solutions.
Added to Crowley Maritime’s construction record is the construction of the first of two LNG-powered, combination container – Roll-On/Roll-Off (ConRo) ships. The two ships, which will be named El Coquí (ko-kee) and Taíno (tahy-noh), are currently under construction at VT Halter Marine.
These Commitment Class ships have been designed to maximize the carriage of 53-foot, 102-inch-wide containers, which offer the most cubic cargo capacity in the trade. Cargo capacity will be approximately 2,400 TEU, with additional space for nearly 400 vehicles in an enclosed Ro/Ro garage. The main propulsion and auxiliary engines will be fueled by LNG. The ship design is provided by Wartsila Ship Design in conjunction with Crowley Maritime subsidiary Jensen Maritime.
El Coquí and Taíno are scheduled for delivery second and fourth quarter 2017 respectively.
The options available for LNG bunker barges grew this year with the addition of two new concepts from Jensen Maritime.
The first involves outfitting an existing barge with an above-deck LNG tank. The concept can be further modified to accommodate more than one type of product if a customer has a need for multiple liquid transfers. Advantages of this design include a fast turnaround and a reduced need to invest in specialized assets if a customer has short-term LNG requirements.
The second concept is for a purpose-built, new bunker barge. Offering greater carrying capacity and improved visibility, the design features a larger LNG tank that is nestled inside the barge.
The barges are ideal for ports not located near an LNG terminal or as an alternative to over-the-road transportation, says Jensen Maritime.
Last year, Jensen Maritime was awarded a contract to design some of the first LNG bunker barges in the U.S. for customer LNG America, a Houston-based LNG fuel supply and distribution company.
Jensen Maritime first produced prototype designs for LNG vessels in 2008. Additionally, Jensen has developed designs for an LNG tugboat and has worked on several other prototype designs of LNG bunker vessels, harbor tugs, articulated tug-barges, container ships and tankers, along with inland vessels for a variety of customers in the U.S.
A Jensen Maritime-designed, LNG-bunkering articulated tug-barge (ATB) was granted “approval in principle” by classification society American Bureau of Shipping (ABS) in July this year. The designation establishes that Jensen Maritime’s vessel concept, which is classed as an A1 Liquefied Gas Tank Barge, is compliant in principle with ABS rules and guides.
Ideal for mobile bunkering, the ATB is also oceans rated, meaning that it is not limited to the intra-coastal waterways, like many other similar types of LNG ATBs. This flexible design feature allows the vessel to facilitate the transfer and use of small-scale LNG in places with limited infrastructure, including offshore locations.
The ATB will be built with four 1,000m3 Type C LNG tanks (seven bar working pressure), enough LNG to fill up a large containership twice before having to replenish its own supply. This capacity, combined with flexible operational areas, makes it an ideal solution for a customer who has significant LNG needs at one or more ports not located near an LNG terminal, says Jensen Maritime.
The tug (under 500 GT U.S. regulatory) features two GE 6L250 engines (Tier 3), each offering at least 2,035 HP, and two Rolls Royce 205 Z-drives, with a speed of 12 knots. The ATB will carry 30,800 gallons of fresh water and 90,100 gallons of ballast water and provides enough space for 12 crewmembers.
Safety features include a double hull, designed to help to protect the ATB’s 4,000-gallon fuel tank, and firefighting capabilities. Classed as a firefighting vessel (FFV-1), the vessel is well equipped to handle emergencies on board and can satisfy most requirements to have at least one FFV-classed tug escorting LNG tankers into port. Finally, because there is no linkage between the tug and barge, the two can disconnect quickly in the event of emergency.
Expected time to build the ATB is between 18 to 30 months.
Crowley Maritime is working to support the increased use of LNG-fuelled vessels by participating in training initiatives in the industry. The company recently participated as one of several Gas Technology Institute (GTI) funding collaborators to bring LNG awareness training to 150 stakeholders and first responders in Jacksonville. The move is part of the company’s proactive training initiative ahead of the delivery of the ConRo ships.
GTI, in conjunction with the Florida State College at Jacksonville Fire Academy of the South (FAS), developed the first-of-its-kind training specifically for Port of Jacksonville area stakeholders including Jacksonville Fire and Rescue Departments, U.S. Coast Guard Sector Jacksonville and area law enforcement.
Training attendees were introduced to the basic characteristics and properties of LNG, its usefulness as a fuel, its hazards and safety precautions to take when working around the product. The group also learned basic and advanced firefighting techniques including identification of ignition sources, and what types of extinguishing agents exist and when to use them in varying situations. Upon completion, attendees satisfied basic LNG awareness as defined by the U.S. Coast Guard’s Standards of Training, Certification, and Watchkeeping (STCW).
“The goal of this training is to keep the excellent safety record maintained by the marine transport of LNG in the past and apply it to the safe bunkering process as we fuel new LNG fueled vessels into the future,” said Mark Marien, Crowley Maritime’s manager, regulatory training.
By Reuters 2015-10-01 18:48:17
China hopes the United States can scale back activities that run the risk of misunderstandings, and respect China’s core interests, the Defense Ministry on Thursday cited a senior Chinese naval commander as saying.
Each country has blamed the other for dangerous moves over several recent incidents of aircraft and ships from China and the United States facing off in the air and waters around the Asian giant.
Last year the Pentagon said a Chinese warplane flew as close as 20 to 30 feet (7 to 10m) from a U.S. Navy patrol jet and did a barrel roll over the plane.
The Pacific is an important platform for cooperation, Admiral Sun Jianguo, deputy chief of staff of the People’s Liberation Army, told Admiral Harry Harris, commander of the U.S. Pacific Command.
“The prerequisite for win-win cooperation is mutual trust,” Sun said, according to China’s Defense Ministry.
“(We) hope the U.S. side can pay great attention to China’s concerns, earnestly respect our core interests, avoid words and actions that harm bilateral ties, and reduce activities which cause misunderstandings or misjudgments,” he added.
The two officials were meeting in Hawaii on the sidelines of a gathering of Asia-Pacific defense officials.
The comments came as one of the U.S. Navy’s most advanced aircraft carriers docked in Japan at the start of a deployment that will strengthen the capability of the Seventh Fleet in Asia and boost ties between the United States and its closest regional ally.
Last week, the United States announced pacts with China on a military hotline and rules governing airborne encounters, which seek to lessen the chance of an accidental flare-up between the two militaries, despite tension in the South China Sea.
China last month said it was “extremely concerned” about a suggestion by a top U.S. commander that U.S. ships and aircraft should challenge China’s claims in the South China Sea by patrolling close to artificial islands it has built.
Beijing claims most of the South China Sea, through which $5 trillion in ship-borne trade passes every year.
By MarEx 2015-10-01 15:47:40
The final investment decision has been made on Cameroon’s floating LNG (FLNG) project that will use Golar LNG’s Hilli carrier.
The agreement between Cameroon’s state-owned oil and gas company Société Nationale des Hydrocarbures (SNH), Golar LNG, and privately-owned French oil and gas company Perenco was reached earlier this week. This final investment decision commits the project to a targeted start date for commissioning in 2017’s second quarter.
The agreement enables Golar to draw down up $700 million from the facility to fund ongoing conversion costs. It also establishes the terms under which Golar shall provide liquefaction, storage, and off-loading services to SNH and Perenco as upstream joint venture partners.
The project is premised on the allocation of 500 bcf of natural gas reserves from offshore Kribi fields which will be exported to global markets via the GoFLNG facility Golar Hilli, which is currently under construction at the Keppel Shipyard in Singapore.
Keppel was awarded the Hilli contract last year, and the project is a first-of-its-type conversion of a Moss LNG carrier, the Hilli, into an FLNG. The contract also includes options for two similar units.
Golar is one of the world’s largest independent owners and operators of LNG carriers, and delivered the world’s first Floating Storage and Regasification Units (FSRUs) based on the conversion of LNG carriers.
By MarEx 2015-10-01 15:01:11
Though the recession of the ice caps is a foreboding global issue, its one anticipated benefit has been the creation of new shipping lanes in previously unnavigable routes. But recent research from York University predicts that it will be several decades before a northern hipping route connecting Northwest Europe to countries such as Japan, China and South Korea will be a viable shipping route.
Called the Northwest Passage (NWP), would create a shipping lane between markets in the northern Pacific and Atlantic regions which would be about 2,500 miles shorter than routes through the Panama and Suez Canals.
NWP would also serve as an alternate route to the Northern Sea Route (NSR), has been ice-free in the summer since 2007 and has gained traction as an alternative shipping lane. NSR is characterized by the presence of thin first-year ice with portions of multi-year ice interspersed. The melting of first-year ice in the summer has allowed a steadily increasing number of ships to use it in recent years.
Conversely, NWP is made up of multi-year ice cold enough to survive several summers with portions of first-year ice interspersed. According to York University’s study, NWP’s multi-year ice composition makes it far too treacherous a shipping lane to consider in the near future.
According to Dr. Christian Haas, the study’s lead researcher, ice thickness plays the most important role in assessing shipping hazards.
“While everyone only looks at ice extent or area, because it is so easy to do with satellites, we study ice thickness,“ Hass said. “Ice thickness is important to assess overall changes of ice volume, and helps to understand why and where the ice is most vulnerable to summer melt.”
York University discovered a mean ice thickness of six and a half to ten feet in most regions of the NWP, and some multi-year ice regions contained ice pockets that were up to 327 feet thick.
The study also suggests further ice melting could make NWP passage more difficult because it could cause more multi-year ice to drift into the passage and make it less navigable.
Click here to read the full study.