COS Weekly News - 21 January 2011

Issue No. 141

 

VANCOUVER MARITIME MUSEUM’S NEW EXHIBIT

Canadian Pacific's legendary Empress of Japan is the centre-piece of a new exhibit at the Vancouver Maritime Museum. The Golden Age of Steamship Travel was put together largely from a collection of maritime and Canadian Pacific Railway artifacts donated by Wallace Chung. View Photos and for more information on the exhibit and hours of operation, visit: http://www.vancouvermaritimemuseum.com.

 

 

Government News

 

CBSA UPDATES MEMORANDUM D19-7-2

Requirements Concerning the Importation and Exportation of Ozone-Depleting Substances and Products

The main revisions to Memorandum D19-7-2 include additional information on controlling HCFCs, specifically HCFC-22, HCFC-141b and HCFC-142b, and reflect organizational changes within Environment Canada and Canada Border Services Agency (CBSA). Appendices C and D have also been updated to reflect the actual list of countries that are a Party to the Montreal Protocol and the list of developing countries for the export of controlled products that contain or are designed to contain an ozone-depleting substance. Memorandum D19-7-2 reflects amendments to the Ozone-depleting Substances Regulations, 1998, and outlines procedures for the importation and exportation of ozone-depleting substances.

 

 

Other News

 

QUEENSLAND BEGINS LONG HARD ROAD TO RECOVERY

The Australian port of Brisbane, which handles around 17% of the country's container throughput, was partially re-opened to shipping on Monday this week. According to the Paris-based International Energy Agency, Australia exported an estimated 259 million tons of coal in 2009 making the country the world's largest exporter of coking coal which is used for producing steel. In fact the country supplies over half the global market, with a large proportion of that coming from Queensland. Consequently, spot prices for coking coal on the international markets have risen by 10% in the past month and traders are anticipating further increases over the next few weeks. The Port of Dalrymple resumed reduced coal export shipments last weekend with 44 ships anchored waiting to be loaded.

 

Queensland also produces about 5% of the country's wheat and until a few weeks ago, the extra rainfall was welcomed as everything pointed to a bumper harvest. In the event, a significant proportion has been destroyed. Tragically, the prospect of a bumper harvest encouraged a lot of farmers to forward sell their crops, but now they cannot actually deliver and are facing financial penalties. Wheat prices are already 50% higher than they were a year ago. Likewise sugar prices have risen to 30 year highs and have forced “Queensland Sugar” to buy raw sugar from Brazil and Thailand to fulfill its own export commitments.

 

 

COST OF SOMALI PIRACY IN 2010

Diligent auditing on someone's part estimates that Somali pirates secured ransoms of $238m last year, with average payments rising from $150,000 per ship in 2005 to $5.4m in 2010. The overall cost of piracy worldwide may be as high as $12bn per year, research from US non-governmental organization “One Earth Future” claims. The group estimates that additional insurance premiums cost the industry anything up to $3.2bn a year, depending on assumptions about how many vessels take out war risk cover and the cost of naval operations off the Somali coast is put at $2Bn.

Meanwhile, the formidable capability of the South Korean Navy was pressed into action today, 800 miles off the coast of Somali, when naval commandos stormed the chemical tanker Samho Jewelry hijacked by pirates last weekend.

Samho Jewelry

All 21 members of the crew are safe however the vessel’s Master took a non life threatening bullet to the stomach. On the other hand, eight pirates were killed and five captured in the rescue mission. It is believed that the crew took refuge in a “citadel” for 24 hours after the hijacking but with no immediate prospect of rescue, they emerged from hiding.

 

 

WSC CRITICIZES COASTAL WINDFARMS

The World Shipping Council representing container and ro-ro carriers has heavily criticized a U.S. government plan that would see a series of large wind farms built off the coastline of the State of Maryland. WSC has pointed out that the area “sits immediately south of and partially overlaps the southern terminus of the current Delaware Bay Traffic Separation Scheme, where vessels approaching and leaving the port of Philadelphia have to pass through”. WSC goes on to opine that “Safety of navigation dictates that there should be no circumstances where a lease should be invited in or near the approaches to a commercial shipping channel delineated by a TSS." WSC goes on to advise legislators that the creation of a TSS is an IMO process requiring several years. Avid readers of our newsletter may recall a similar complaint against European governments in 2010.

 

 

MSC CHAIRMAN GIVES RARE INTERVIEW TO LLOYDS LIST

Mr. Gianluigi Aponte

With the first MSC container vessel to service Vancouver expected next week (ETA Vanterm January 29), the company Chairman has given a rare interview to Lloyds List. We reproduce the interview in an attachment to this week's newsletter.

 

 

SAUDI ARABIA INCREASING OIL EXPORTS

As oil prices move ever closer to $100 per barrel, Saudi Arabia is reported to be increasing output to help stave off further stress on the world economy. Current global oil demand is around 89 million barrels/day and this is forecast to increase by 2-3million barrels/day this year, primarily to satisfy Chinese demand. Average daily output from Saudi Arabia is 8-9 million barrels/day. The top 10 oil export ranking rankings are as follows:

 

1.  Saudi Arabia - 8.7 million barrels/day

2.  Russia - 4.9

3.  Iran - 2.7

4.  United Arab Emirates - 2.7

5.  Canada - 2.4

6.  Norway - 2.4

7.  Kuwait - 2.3

8.  Nigeria - 2.3

9.  European Union - 2.2

10. Venezuela - 2.2

To give this some perspective, a standard VLCC has an intake of around 2.2 – 2.3m barrels of oil

 

 

CHINA P&I CLUB TO JOIN INTERNATIONAL GROUP

The China Protection and Indemnity Club, which is seeking to join the International Group (IG) of P&I clubs, is considering adopting a set of internationally recognized accounts for its organization. The potential acceptance of China P&I Club to the IG throws up a number of challenges including the view that it is seen primarily as a vehicle for underwriting risk for national tonnage. While the IG accounts for the majority of third-party insurance for the shipping industry, it is not a foregone conclusion that all third party shipping insurers should be members and by choosing to stay outside the group, China P&I could in fact compete with the International Group clubs. For 2009,the China P&I Club total assets stood at $600m.

 

 

Market Update

Markets continue to be in pain and the paramedics have little to offer by way of a solution. Dragged further down, primarily by weak demand for Panamaxes this week, the index closed on Thursday at 1393 points compared to 1446 points last week and 1519 points the week previously.

Cape Size        Panamax         Supramax

Index                            1566                 1710                1438

Last week                     1608                 1949           1362

Spot time charter   $9,000/day      $13,600/day       $15,000/day

Last week                 $9,855/day   $15,500/day      $14,200/day

 

Tankers: Despite heavy Chinese demand for VLCC's ahead of celebrations to begin the "Year of the Rabbit", spot rates have remained steady but very weak at around $13,000 daily. To date, around 64 VLCCs have been booked from the Arabian Gulf for loading February 10-20, with probably a further 10 have yet to come. The total number of VLCCs available over the next four weeks is estimated at 80.

 

 

Upcoming Meetings and Events

 

Jan 25 ICS Board of Directors Meeting @ 12:00

Jan 26 WMC PACMAR/NANS Committee Meeting @ 10:30

Feb 1 CIABC Board Meeting @ 10:30

Feb 1 ISSC Board of Directors Meeting @ 12:00

Feb 8 COS Ship & Port Operations Committee @ 12:00

Feb 9 COS Liner Committee Meeting @ 10:00

Feb 9 COS Board of Directors Meeting @ 11:30

Feb 10 COS Owners Committee Meeting @ 12:00 (tbc)

Feb 17 COS Navigation & Pilotage Committee Meeting @ 10:00

Feb 22-23 PNCIMA IOAC Meeting

 

 

Ship of the Week

 

Spirit of Britain

New P&O superferry

P&O Ferries’ new superferry "Spirit of Britain" entered service today on the company's flagship Dover to Calais route. She will be joined by a sister vessel Spirit of France in September. The two ships are the largest ever built to service the cross-channel link.

Built by STX Europe in Rauma, Finland

LOA 213m

Beam 31.4m

GRT 49,000

Speed 22 knots

Passenger capacity 2,000

Truck capacity 180

Car capacity 1343

The two sister ships together will cost P&O Ferries some €360m ($465m).

alongside in home port Dover

 

Competition for traffic across the English Channel is fierce. Tunnel rail operator Eurotunnel saw full year 2010 freight shuttle volumes rise 42% to just over 1m trucks and has accused the Dover Strait ferry competitors of “chasing short-term volumes” in a market still 16% below pre-recession 2007 traffic flows. Eurotunnel, which operates freight and passenger shuttles between Folkestone and Calais, also acts as landlord for the Paris-Brussels Eurostar passenger trains to London and for the intercontinental freight trains between the UK and mainland Europe.