Ports & Ships Maritime News

Jan 14, 2009
Author: Terry Hutson

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  • First View - LONDON

  • Speculators leasing ships gamble on oil increase

  • US Gulf Coast – South Africa trade faces tough year, says GAL

  • Nigerian importers face tough times as government tightens the screws

  • Piracy update

  • Proposed new East African railway will be financed locally - Odinga



    First View - LONDON

    The Svitzer tug LONDON (2,728-gt, built 1975), which is currently based in Cape Town, seen here on berth 704 on the harbour’s North Wall. Picture Ian Shiffman

    Speculators leasing ships gamble on oil increase

    Another five VLCCs are likely to be taken on charter during January to store crude oil, bringing the total number of supertankers brought into use as storage facilities for crude oil this month to more than 25, reports The Times, which describes the amount of oil now being stored at sea as more than enough to supply the UK for 35 days.

    The article quotes Jens Martin Jensen, acting managing director and chief executive of Norwegian shipping group Frontline as calling it the strongest demand in many years. “We are having new inquiries every day. At least 25 vessels have already been booked and I would expect the number to reach at least 30 by the end of the month.”

    Jensen says that a number of different groups including BP, Royal Dutch Shell, Eagle Vienna and US company Koch have leased tankers for this purpose.

    “It’s a new situation, there has been a very strong demand for VLCCs over the past weeks,” said a broker at Barry Rogliano Salles, the French company. He called it a speculation on the price of oil. “They are just hoping that the prices will increase.”

    The gamble follows the dramatic drop in the price of crude from over US$100 a barrel – it topped at a record $147.27 per barrel in July 2008 and is now trading for little more than US$40 a barrel.

    The forward market for oil suggests that prices are likely to rise later in 2009. But with costs of chartering a new VLCC tanker currently at between $60,000 and $90,000 a day, depending on size, it’s still quite a gamble. – source The Times

    US Gulf Coast – South Africa trade faces tough year, says GAL

    Breakbulk and project type cargo between the US Gulf Coast and Southern and West Africa face a tough year in 2009, say Gulf Africa Line’s US representative David Groves.

    Groves, who is quoted in an article in the Gulf Shipper, says that while there is a backlog of orders to fill ships in the short term, by the second quarter of 2009 things will have become a lot more difficult. He said that if commodity prices stay where they are or continue to drop, orders for project and heavy-lift cargoes and breakbulk cargo will drop accordingly.

    Mining machinery makes up about 70% of GAL’s liner cargo although the company carries a wide range of breakbulk cargo.

    Gulf Africa Line is a joint venture between Nordana Inc of the United States and Hamburg-based MACS Maritime Carrier Shipping. Nordana provides services between US Gulf ports and West Africa returning via East Coast South America, while GAL ships trade between the US Gulf ports and East Coast and southern Africa.

    Groves said that among the challenges facing ahead are a spluttering global economy, port congestion, infrastructure issues and uncertainty in the oil, gas and commodities industries.

    He said the breakbulk trade with South Africa was also directly impacted by currency values and if the US dollar rises during the year it will prove harder for South African importers to buy US-made machinery. “We just don’t know and will have to wait and see what the trend is.”

    GAL, which is represented in the US by Nordana as its general agent, operates a fleet of six multipurpose vessels handling containers, breakbulk, heavylift and project cargo on a three-weekly cycle between the ports of Jacksonville, Houston, New Orleans, Altamira, Cape Town, Durban and Richards Bay. A feeder service provided by MACS serves Maputo, Mombasa and Madagascar.

    Groves said that construction activity tied in with the 2010 Soccer World Cup tournament in South Africa could provide a boost for carriers.

    You can read the full special report by David Biederman HERE

    Nigerian importers face tough times as government tightens the screws

    Nigerian importers can expect little mercy as the Federal Government implements a new get-tough programme that aims at reducing the backlog of cargo – mainly containers – which is causing congestion at the Lagos ports.

    Federal President Yar’Adua’s recently issued an ultimatum to port users and operators to decongest the ports, with instructions that any cargo remaining in the port terminals after 60 days must be disposed of under the jurisdiction of an Overtime Cargo Disposal Committee. The committee has been established and is due to commence its work on 19 January and included in its mandate is the disposal of all containers inside the ports that have been there for more than 90 days. The committee has 45 days to complete its assignment.

    Terminal operators have been instructed to submit to the Nigerian Customs Service (NCS) a monthly list of all cargoes that have been in the terminal for 90 days and more. The list has to be submitted by the 5th working day of each month.

    In terms of its mandate the NCS is responsible for ensuring the disposal of overstayed cargoes not later than 30 days from receipt of the lists.

    The government’s plans to decongest the ports have, as might be expected, run into considerable criticism, including claims that corruption and multiple demands by various government agencies operating within the ports may compound the problem and will lead to higher prices of imported goods and services throughout Nigeria.

    It is being said in Nigeria that terminal operators and government agencies actually benefit from congestion, by way of demurrage charges, while Customs benefits by being able to auction containers of imported goods, making it less likely that the instruction will receive enthusiastic support from all quarters.

    Piracy update

    Kenya has voiced its criticism of the payment of a ransom to free the Saudi supertanker SIRIUS STAR at the weekend. The VLCC, which was carrying US$ 100 million worth of oil – an estimated two million barrels, was freed after $3 million was dropped by parachute on board the ship.

    In their subsequent departure from the tanker, five of the nine pirates were drowned when their speedboat overturned, and reports have been received of at least one body washing up on the shore with a large sum of US dollars in the man’s clothing. In other reports from Somalia local people have been seen picking up banknotes washed up along the shore.

    “I wish to register our displeasure on the payment of ransom last week where the oil tanker was released. Paying encourages criminal acts and we do not support such initiatives,” Kenya’s Foreign Minister, Moses Wetangula told journalists in Nairobi.

    He said that Kenya would oppose any payment of a ransom to free the Ukraine freighter RAINA, which is carrying a cargo of Russian-made tanks and other weapons ostensibly intended for Kenya, although most reports suggest the weapons were actually intended for South Sudan.

    “However long it takes, Kenya is not willing to pay ransom and will not pay any ransom. It is not perishable cargo, those guys can keep those tanks and weapons on that ship as long as they wish. We will not pay ransom. We will eventually get them. I have no doubt. Paying encourages criminal acts and we do not support such initiatives,” Wetangula said.

    The foreign minister failed to comment on the crew of the RAINA who are forced to remain on the ship with little water and food supplies.

    Although regarded as a Ukrainian ship, RAINA is owned by an Israeli, who has similarly shown little enthusiasm for speeding up its release.

    Meanwhile, the London P&I Club has warned ship owners to be wary of a potential increase in exposure to liability for claims as a result of pressures exerted by charterers in the current tough market conditions and against a background of continuing piracy attacks.

    The latest Club News said: “Given the prevailing market conditions, it might be expected that charterers will seek to impose onerous terms on owners, which may serve to encourage masters to expose their ships to an increased risk of piracy. In particular, members should be wary of terms that might expose them to claims for delay, or other liabilities.

    “Masters who want to deviate from their customary route in order to avoid the risk of piracy should, wherever possible, do so in co-operation with charterers and cargo owners. If this is not possible, it would be prudent to consult the club. Members should look carefully at the contractual terms of any agreement concluded with the providers of armed or unarmed guards.”

    Proposed new East African railway will be financed locally - Odinga

    East African countries appear to be determined to move ahead rapidly with the construction of a standard (European) gauge railway (1,484-mm gauge) between the port of Mombasa and Uganda.

    According to a feasibility study the railway can be built in service by 2017. Kenya would raise 80% of the cost and Uganda the other 20 percent. The Kenyan government says both Kenya and Uganda have the capacity to finance the construction of a new railway without the help of outside donors.

    The report says that the port of Mombasa is currently handling in excess of 16 million tonnes of cargo annually which is expected to rise to 30mt by 2030.

    Kenya’s Prime Minister Raila Odinga said that despite his government imposing a 24-hour day operation at the Mombasa port, containers were still being delayed and were not reaching upcountry destinations in good time because of problems with the existing railway.

    By the end of 2008 the Rift Valley Railway, which holds the concession to operate the railways in Kenya and Uganda, was carrying 7% of the port cargo.

    According to Odinga the proposed railway has the ability to unlock the potential of the region. The railway has been a lifeline for East Africa which has become an obstacle to the very trade it was built to promote. The prime minister lamented the continued reliance on an outdated railway that was both expensive to Kenya’s economy while pulling down other countries in the region.

    “It is a shame on us as a region especially for Kenya and Uganda that 100 years since the colonialists built the railway line we have not added an extra inch. All we have done is run down what we inherited,” said Odinga.

    He said that the Joint Ministerial Railway Commission which he will co-chair with Uganda Prime Minister Apollo Nsibambi will establish an organisation secretariat and staff within a few months and will put out an expression of interest ahead of budget day for the next fiscal year. – source East African Business Week


    The semi-submersible heavylift ship BLACK MARLIN (37,938-gt, built 1999), which flies the Antilles Netherlands flag has been a recent visitor at Cape Town, where this picture was taken. Picture by Ian Shiffman

    The general cargo ship JOLLY AMBRA (13,327-gt, built 1994) arrives off Durban in ballast in January 2002. The Cyprus-registered ship has undergone a number of name changes in a relatively short period of time including being the LYKES STRIKER but is currently trading as the CAPE HASTINGS. Picture Terry Hutson

    The Russian nuclear-powered cruise PYOTR VELIKY enters Cape Town harbour yesterday. The ship’s stay is just a short one and she will sail for the Indian Ocean later this afternoon (Wednesday). Picture Capt Bill Shewell

    Don’t forget to send us your news and press releases for inclusion in the News Bulletins. Shipping related pictures submitted by readers are always welcome – please email to info@ports.co.za

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