Shipping

MSC fleet to rebuild

Hiran H.SENEWIRATNE

Mercantile Shipping Company (MSC) has six ships in order book to rebuild its fleet after it sold off old vessels, its company sources said.

MSC is owning and operating a fleet of six multipurpose vessels and further six new buildings are to be erected in the next year," a company statement said. But the company had previously said that it had ordered two new cargo ships as part of efforts to renew its fleet.

However, the company sources said in May it had set up a fully-owned subsidiary called Mercantile Emerald Shipping to build two multipurpose cargo vessels in the Netherlands and borrow 16 million euro to finance their construction.

It has entered into two loan agreements , one for each vessel with Germany company Bremer Landesbank,its sources said.

The latest statement was issued to mark the arrival of the firm's vessel Mercs Mihintale in her home-port Colombo to carry out repairs and class-renewal at Colombo Dockyard after a four-year international charter.

The vessel, built in Brazil in 1983, is a multipurpose ship of 12,835 dead weight tonnes.

Therefore it was the first time the vessel arrived in Sri Lanka after her charter with Safmarine.

"The maintenance work will take approximately one month, after which the ship is bound to join our liner-trade between India and the Persian Gulf," he said in the statement.

"Colombo Dockyard was chosen for this class-renewal due to their expertise and efficiency, especially when it comes to older vessels."

"After only 10 days of repairs the vessel was handed back to the government to continue her service from Colombo and Trincomalee to KKS, carrying essential goods like food items and building materials."

Mercantile Shipping once owned a fleet of nine second-hand cargo ships that plied the coastal trade and kept Jaffna supplied with food and other cargo for many years when fighting between government forces and Tamil Tigers cut overland supply routes.

But it has sold off most of the vessels owing to age and high cost of maintenance. Sri Lankans own 51 percent of the firm's shares with the rest owned by German collaborators - D.E.G. (the German finance company for investment in developing countries) of Koln and Reederi Eugen Friedrich of Bremen.

Sri Lanka's handful of ship owners had till now bought second-hand cargo ships because of the high cost of building new vessels. However, the global shipping market has collapsed with a flood of orders for new vessels made during the boom years expected to depress the market further when they are delivered and deployed on trade routes. Top global shipping lines are expected to cancel orders for new vessels and lay up existing ones because of the present oversupply made worse by the slowdown in world trade.

Maersk to emerge from losses

AP Moller-Maersk, the world's biggest container shipping line, saw an accelerating fall in volumes on its most important route in the third quarter, in the latest sign that the industry faces one of the most severe downturns in its 50-year history.

The container shipping business of the Danish company, which mostly trades under the name Maersk Line and is nearly twice the size of its biggest competitor, saw volumes fall 3 per cent year-on-year in the key Asia-Europe trade, it said yesterday.

The fall follows a 2 per cent second-quarter decline. The route has never previously seen year-on-year falls in volumes in the 40 years since container ships started replacing general cargo ships on the route.

The declines look set to continue in the fourth quarter, when the financial shocks created by September's collapse of Lehman Brothers have been affecting the real economy.

However, Maersk said nothing about its outlook, except to trim its forecasts for full-year net profits from between $4bn and $4.6bn to between $4bn and $4.3bn.

Nils Andersen, chief executive, also signalled his willingness to accept lower prices for Asia-Europe journeys if it was necessary to maintain Maersk Line's market share on the vital route.

"We're not planning to give up defending our share in Asia-Europe," he told the Financial Times.

Despite the Asia-Europe falls, volumes for the year's first nine months were still up 5 per cent compared with the first nine months last year as emerging markets continued to grow strongly.

The third quarter also saw a surprise 16 per cent surge in volumes on trade between North America and Asia as US exports surged with the encouragement of a weakening dollar.

Lloyd's income cranks ahead

LLOYD'S Register Group says its income rose by 19.6% to o594m (US$876m) with a marginal increase in surplus before tax "generally in line with the budgeted target". LR says that the surplus for the year allowed for a significant increase in spending on projects and personnel in support of the Group's medium and long term business objectives.

Lloyd's Register chairman David Moorhouse says: "Following very strong growth in 2007, it is another year of strong underlying financial performance in 2008. While the recent global financial chaos had little effect on our results for the year to June 2008, it is clear that next year will pose a significant challenge to the Group. I am confident that if we take appropriate action in the short term the Group will achieve a positive outcome next year.

"Our charitable giving this year was o6.3 million, with o6.0 million going to the Lloyd's Register Education Trust and o0.3 million being awarded to various community charities.

"The acquisition in the year of ModuSpec represents the largest purchase ever made by Lloyd's Register and provides the opportunity for us to expand our oil and gas activity significantly in an area that has the potential to utilise other components of our Oil & Gas, Marine and Management Systems businesses. Other acquisitions in the year were Knowledge Based Management Limited (UK), Marine Container Consultants Limited (UK) and Martec Limited (Canada)" Moorhouse said.

Chief Executive Officer Richard Sadler, said: "2007/08 has seen yet more investment in client relationship management and ensuring the alignment of our services with specific client sector needs. The Group recognises the role that our clients have in complex global supply chains and we aim to be able to support them at a local and global level, dependant on their need, by providing a wide portfolio of services in the energy and transport sectors.

This vision drives our service development and acquisition strategy."

LR's Marine business achieved revenues 14.7% up on the prior year. LR notes: " The marine market, having enjoyed a six year period of exceptional growth, has moved to a period of high volatility and significant decline in the number of new ship orders. While Lloyd's Register's new construction order book looks very positive through 2010, it is conscious of the potential for high levels of existing ship order cancellation and of the need to adopt a proactive stance in this challenging market."

Colombo Engineering hits double hat trick

Colombo Engineering Enterprises, a leading ship repairing company won a double hat-trick at the National Business Excellence Awards 2008, by winning both the Gold in the Best Service Provider Awards and the Gold in the Organization Category Awards, three times in a row in the years 2006 '07 and '08, respectively at the glittering award ceremony held last week at the Colombo Hilton.

Commenting on his double win this time he said that it proves that high standards of efficiency, technology and quality are maintained in the ship repairing sector in Sri Lanka by his company. Colombo Engineering operates a large fleet of high powered crafts to encounter any ship repair requirements. State-of-the-art equipment and highly trained experienced technicians, efficiency and reliability in the field of ship repairing have largely contributed to the success story of the company.

Attapattu was presented both the Awards by the Ambassador of Netherlands, Leonie M. Cuelenaere.

 Singapore's container port throughput rises

Singapore's container ports had a good first quarter with PSA terminals here seeing a close to 12 per cent rise in throughput over the same period a year ago, while Jurong Port had a good run for March, notching up good increases in percentage terms.

Container throughput for PSA rose from 6.36 million twenty-foot equivalent units (TEUs) to 7.12 million in the first quarter till March - a jump of 11.9 per cent. March box numbers came to 2.49 million TEUs from 2.22 million previously.

Over at Jurong Port, March throughput rose 7.35 per cent from 68,000 TEUs to 73,000 while first-quarter 2008 throughput hit 207,000 TEUs, down from 220,000 previously.

Preliminary figures for March from the Maritime Port Authority show that overall throughput for Singapore rose 10.5 per cent to 2.56 million TEUs, from 2.29 million previously.

The container throughput numbers show that the container transshipment market, which plays a big part in the health of Singapore's port industry, remains largely intact.