SHIPPING

Evergreen expands to outer Colombo

Evergreen line of Taiwan, one of the mega container carriers in the world, in keeping with its ambitious fleet expansion programme, launched SRS 2Service and IMMA Service in April. With the introduction of these two services, Evergreen Line's focus in the Indian sub continent will be enhanced and Colombo as the main hub port in the region will greatly benefit. This also shows Evergreen's confidence in Colombo for its conducive business environment.

Port rotation of SRS 2 (Indian Sub-Continent to South Red Sea Service)

Tanjung Pelapas/Colombo/Djibouti/Aden/Jeddah/Port Sudan/Djibouti/Colombo/Port Kelang/Tanjung Pelapas.

Frequency- Weekly.

Maiden voyage expected arrive in Colombo during the first week of May.

Port rotation of IMMA (Indian Sub- Continent to Mauritius Madagascar Africa Service)

Karachi/Mundra/Colombo/Port Louis/Tamatave/Durban/Maputo/Nacala/Karachi.

Frequency- Fortnightly.

Maiden Voyage expected to arrive in Colombo on April 28.

Greenlanka Shipping Ltd the local Agents for Evergreen Line is confident that the local shipping community will greatly benefit with the introduction of these two new services as they will be able to carry their volumes to the above destinations at faster transit times and competitive rates. Hence Greenlanka Shipping Ltd cordially invites them to be stake holders of this latest venture of Evergreen Line.

Greeks spotting rates rebound since 2008

Greek ship owners, who control more vessels than those of any other country, are buying the most iron-ore carriers since before the global recession, seizing on plunging prices in anticipation of a market recovery.

Shipping companies in the Mediterranean country ordered 12 Capesizes able to hold 160,000 metric tons of cargo each last quarter, the most since the first three months of 2008, according to data from Golden Destiny SA, a Piraeus-based ship-broker. That’s almost twice as many as in all of last year, figures show.

Record orders in 2007 and 2008, when rates were more than 50 times higher than today, led to a glut that has persisted ever since. Prices rose in March for the first time since June 2010, according to Clarkson Plc, the world’s largest ship-broker. A new Capesize costs $47 million, up 2.2 percent from an almost- 10-year low and 53 percent below the 2008 peak, data show.

“Greek owners seem to follow the hungry appetite of listed foreign investors for Capesize vessels and exploiting the excessive low new building costs for the expansion of their fleet, putting aside the threat of oversupply,” Maria Bertzeletou, an analyst at Golden Destiny, said by e-mail today. “There are hopes that upon delivery of their new buildings, the imbalance between supply and demand would have been narrowed.”

Daily rates for Capesizes fell 9.9 percent since the start of the year to $4,384, according to the Baltic Exchange, the London-based publisher of shipping costs. The vessels have earned less than the $7,758 they need to cover operating costs such as crew and maintenance for 66 out of 75 days so far this year, based on estimates from Moore Stephens LLP, a London-based consultant to the industry. Rates peaked at $234,000 in June 2008, according to the exchange.

Capesizes with record capacity of 87.3 million deadweight tons were ordered in 2007, and another 51.7 million tons followed in 2008, Clarkson data show. The fleet more than doubled since then and will expand another 6.5 percent this year, the ship-broker estimates. Outstanding orders at shipyards equal 15 percent of existing capacity, down from almost 100 percent at the end of 2008, according to IHS Fairplay, a Redhill, England-based research company.

Greeks own 16 percent of the global merchant fleet, according to the United Nations.

Source: Bloomberg

Maersk rides wave of new ship orders

They will entirely change the shipping industry's understanding of size and efficiency, when they begin entering service later this year, says Maersk.

Called the Triple-E class for “Economy of scale, Energy efficient and environmentally improved”, they will cost US$190 million (Dh697.8m) each.

At 400 metres long, 59 metres wide and 73 metres high, they will be the largest vessel of any type at sea. Their 18,000 TEU (twenty-foot equivalent unit container) capacity is 16 per cent greater (2,500 containers) than today's transoceanic cargo ships.

They will generate 30 per cent less carbon dioxide per container moved compared with the current largest container ship, Emma Mærsk, and 50 per cent less than the industry average on the Asia-Europe trade routes.

They will consume approximately 35 per cent less fuel per container carried than the 13,100 TEU vessels being delivered to other container shipping lines in the next few years.

The Triple-E's innovative design features a hull and bow shape that will guide the vessel through the water more efficiently at speed and an advanced waste-heat recovery system that captures and reuses energy from the engines’ exhaust gas for extra propulsion with additional lower fuel consumption.

To reduce the environmental impact of the vessels beyond their lifecycle, all the materials used will be documented and mapped in the vessel's “cradle-to-cradle passport”.

This means when the vessel is retired from service, this document will ensure that all materials can be reused, recycled or disposed of efficiently.

Source: The National

Low cap increase supports shipping rates

Since the shipping industry provides service that is generally undifferentiated, industry capacity is an important metric that directly impacts companies’ top line, or revenue, performances.

When capacity is growing faster than demand is, competition will rise among individual shipping firms as they try to utilize idle ships and cover fixed costs. This will lower day rates, which will negatively affect bottom line earnings, free cash flows and share prices for companies such as DryShips Inc. (DRYS), Diana Shipping Inc. (DSX), Eagle Bulk Shipping Inc. (EGLE) and Safe Bulkers Inc. (SB).

Capacity continues to rise slowly for the week ending April 12, dry bulk ship capacity rose by just 0.06% to 595.54 million dwt. One Last week’s small increase supports the on-going lower capacity increase seen since mid 2012, and was likely due to the second largest amount of scrappage seen in 2013 – 17 ships.

While a reduction in capacity is generally positive for shipping rates, scrappage is unlikely to benefit shipping rates because companies first retire older vessels that are less fuel efficient and more expensive to maintain.

Given the abundant availability of new ships that drove the large increase in capacity from 2009, as well as record low shipping rates, current market conditions probably do not take into account shipping rates for older vessels.

Shipping rates supported by fewer new ship deliveries since mid 2012, shipping rates have likely been supported by fewer new ship deliveries. With a majority of ship orders delivered in 2011 and early 2012, the pace at which new ships entered service fell, marked by the slope of the decline in the Dry Bulk Orderbook from mid 2012 onward in the chart above. Lower growth rate has also supported the baltic dry index, which is an indicator that reflects the daily equivalent shipping rate for transporting dry bulk materials in the spot market.

As supply continues to grow, dry bulk firms, such as DRYS, DSX, SB, and EGLE, will continue to face headwinds in the short to medium term. Nonetheless, the lower growth rate seen in capacity since mid 2012 is a positive development, and is a sign of better times ahead for the companies mentioned earlier. But investors should be aware that some of these firms may go bankrupt if they are unable to pay maturing debt or interest.

Thus, for a more diversified approach, investors may also want to consider the Guggenheim Shipping ETF (SEA), which invests in the largest shipping companies worldwide.

Source: Market Realist

Rickmers-Linie establishes round-the-world service

Shipping line Rickmers-Linie is launching a westbound round-the-world service, connecting areas of economic growth in Asia and South America and then on to North America. The America-Asia westbound service established in 2006 now forms a part of this new service. The Hamburg-based company announced the decision on the first day of the Breakbulk China 2013 event in Shanghai.

Ulrich Ulrichs, chief operating officer and managing director of Rickmers-Linie, said: “Having introduced our Round-The-World Pearl String Service with an eastbound rotation ten years ago, we are convinced that the time to start up a similar concept in the other direction has now come. This move further confirms our commitment to, and trust in, the Asian and South American markets.” Two or three chartered multipurpose heavy lift vessels will launch the service. The first vessel, ‘Huanghai Glory’, was built in China in 2012 and has a lifting capacity of up to 160 tonnes and a deadweight of 28,300 tonnes.

The second vessel is expected to enter service in May 2013, with the arrival of the third vessel to be announced at a later stage. Rickmers-Linie plans to run the service on a monthly schedule in the future.

Ports which will receive calls on this service will include: Yokohama, Masan, Xingang, Shanghai, Singapore, Cape Town, Buenos Aires, Santos, Rio de Janeiro, Vitoria, Philadelphia, Savannah and Houston.

On her first voyage in the new service for Rickmers-Linie, the ‘Huanghai Glory’ is scheduled to call at Bayuquan, Xingang, Dalian, Shanghai, Kaohsiung, Punta Quilla, Buenos Aires, Montevideo, Santos, Rio de Janeiro, Vitoria and Suape.

Source: bairdmaritime.com

Japan shipbuilder shares jump on merger report

Shares in Japan's Kawasaki Heavy Industries and Mitsui Engineering and Shipbuilding surged on Monday morning following a report that the shipbuilding giants are starting merger talks.

By the morning break, Mitsui Engineering was up 13.60 percent to 192 yen while Kawasaki Heavy's shares advanced 1.80 percent to 339 yen.

Earlier, the Tokyo Stock Exchange temporarily suspended trading in the firms' shares “to confirm whether the report is true or not”, it said in a statement.

However, both firms dismissed the report in the leading Nikkei business daily, with Kawasaki saying: “This is not what we have announced and there is no truth to the report.” Minutes later, Mitsui issued a similar statement, saying “this is not what we have announced”.

The Nikkei, without citing sources, said the firms will create a new company during the fiscal year ending March 2015 at the earliest in a bid to boost their flagging businesses by cutting procurement costs and boosting research and development.

The merged company would have almost 2.0 trillion yen ($20 billion) in annual sales, putting it in second spot behind Japan's Mitsubishi Heavy Industries, it said.

Shipbuilding firm delivers bulk carriers to UK

Hanjin Heavy Industries & Construction Co., Ltd. ,Philippines (HHIC-Phil Inc.) has reached yet another milestone when it held the simultaneous unveiling of two newly-built bulk carriers in its modern 30-hectare shipyard in Redondo Peninsula recently.

The vessels, named after famous explorers Christopher Columbus and Abel Tasman, were the seventh and eighth ships purchased by leading international mining group Rio Tinto Shipping Limited.

“RTM Columbus” and “RTM Tasman”, which both tip the scales at 106,796 tons, will have London in the United Kingdom as their homeport.

Last January, Hanjin also delivered to England-based Rio Tinto executives the two vessels, M/V “RTM Cabot” and M/V “RTM Drake, each worth about $60 million.

Attending the event in Hanjin's modern shipyard in Subic for the unveiling of “RTM Columbus” and “RTM Tasman” were Annbel McGagh and Wendy Smith, together with HHIC-Phil Inc. senior officials, Rio Tinto executives Alastair Fischbacher, Allan Smith and John McGagh, and representatives from classification society Lloyd’s Register.

HHIC-Phil Inc. President Jin Kyu Ahn said that the Korean shipbuilder's capacity to produce high-tech ships is largely due to its ability to remain resilient amid the growing challenges facing the global shipbuilding market today.

“We continuously harness and maximize our shipbuilding capability and resources to win our clients’ trust and confidence. We believe that these are the vital ingredients in order for us to keep on exporting commercial vessels during these difficult times,” Ahn said.

Cutting-edge technology combined with highly trained and skilled manpower of its shipyard workers, Ahn said that Hanjin is “pushing hard to sustain a cost-efficient production system and meet, if not surpass, the clients’ expectations and demands.”Ahn noted, however, that the shipbuilding industry has yet to regain its long lost ground owing to small demand this year for new vessels caused by diminished maritime activities around the world.

“HHIC-Phil Inc. is exerting its best efforts to be competitive and cope with this depressing situation, which has already created cut-throat competition among shipbuilders in the international front.

Thus, any form of short or long term support to help uplift our industry by the public sector is welcome, if only to perpetuate, or push even further, the Philippines’ current 4th place ranking in the global shipbuilding arena,” Ahn said.

But despite this daunting task of keeping its core business afloat vis-à-vis the present economic reality, the Korean shipbuilder will continue to look after the welfare of the Hanjin shipyard workforce and prevent cutting down of operations, Ahn said.

Since 2008, HHIC-Phil Inc. has now successfully delivered a total of 51 vessels amounting to over $3 billion for various overseas clients mostly engaged in international trade and maritime solutions, thereby boosting the Philippines’ export portfolio.

Source: Sun Star