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Ports & Ships Maritime News

22 November 2011
Author: Terry Hutson

Bringing you shipping, freight, trade and transport related news of interest for Africa since 2002

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Purported to be the world’s largest trailing suction drdger, the CRISTOBAL COLON (46,373-gt, built 2009) called at Durban last week to take bunkers, sailing again at the weekend. Picture is by Trevor Jones

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Pretoria - As thousands of delegates from all over the world make their way to Durban for the 17th Conference of the Parties (COP17) to the UN Framework Convention on Climate Change (UNFCCC) this week, President Jacob Zuma says South Africa is ready to welcome them.

After months of planning, Zuma is confident that all is in place to ensure that the delegates are able to undertake their business smoothly and efficiently for the conference that starts on 28 November to 9 December.

Speaking at the New Age / SABC-organised business briefing in Durban this morning, the President, however, said the talks can’t be business as usual.

“We trust that the state parties will rise to the occasion and meet the expectations of millions around the world whose livelihoods depend on there being progress in the climate change negotiations.”

Global warming is already having a negative impact on Africa and the world at large, with changing weather patterns affecting the environment, health, natural resources, agriculture and food production, shelter as well as infrastructure worldwide.

Zuma said it was for these reasons that the parties that will meet in Durban must take a step forward to a solution to these challenges.

“In the African context, they must help to strike a balance between ensuring that climate change does not reach dangerous levels on the one hand, and the need to grow our economies to eradicate poverty on the other.”

To reach this, Zuma reiterated the five-point vision for the conference. Firstly, he said the outcome should be balanced, fair and credible and to achieve this outcome, the conference approach must be informed by the basic principles that underpin the UN climate change negotiations.

These principles, he said include multilateralism, environmental integrity, fairness and the honouring of all international commitments and undertakings made in the climate change process.

The next step, he said, should ensure that the Cancun Agreements, which include the establishment of a Green Climate Fund, must be operationalised.

The President said developing countries demand a prompt start for the Fund through its early and initial capitalization.

Thirdly, for Durban to be successful, parties have to deal with the outstanding political issues remaining from the Bali Roadmap.

This, according to Zuma, means finding a resolution to the issue of the 2nd Commitment Period under the Kyoto Protocol, and agreeing on the legal nature of a future climate change system.

Fourthly, adaptation is an essential element of the outcome of the conference as it is a key priority for many developing countries, particularly Small Island Developing States, Least Developed Countries and Africa. And lastly, he said, any outcome in Durban has to be adequate enough to adhere to the principle of environmental integrity.

“The low level of ambition in this regard is cause for concern. Parties must come to Durban expecting a credible, sustainable and implementable outcome.”

South Africa’s position during the conference will be led by the Minister of Water and Environmental Affairs, Edna Molewa, while Minister of International Relations and Cooperation, Maite Nkoana-Mashabane, is the incoming President of COP17, taking over from Mexico.

Zuma said South Africa will approach the talks “in a spirit of open consultation with all parties and stakeholders, and ensure that the discussions stay on track”.

The country was already playing its part to mitigate the impacts of climate change. Some of the plans put in place by government are the development of the Green Economy, which is stipulated in the New Growth Path. Others include the social accord on green jobs by business, government and labour this past week, and the integration of the green industries in the Industrial Policy Action Plan is an example of SA’s commitment to greening the economy. – BuaNews

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AP Moller-Maersk CEO Nils S Andersen

As container lines hunt for business amid falling freight rates, the head of AP Moller-Maersk Line says Maersk Line is well positioned and prepared to outlast its rivals.

AP Moller-Maersk chief executive Nils Andersen says the company is well positioned for a longer stretch of tough competition than during the previous downturn. “It would be natural if the smaller players in this business or their banks start questioning whether it’s a good idea to keep competing,” he told Bloomberg.

While other lines are cutting capacity on the major trade routes such as Asia/Europe, Maersk has added ships to provide daily sailings between selected ports in Asia and northern Europe, which it says will provide predictability for shippers.

Japanese giant Mitsui OSK Line (MOL) meanwhile is talking of a possible merger with Japan’s two other shipping majors, NYK and ‘K’ Line to create a ‘Japan Line’. All three Japanese lines are forecasting losses on their financial year-end results.

Other smaller container lines are scaling back on services or looking for trade sharing options. MSC, the second largest carrier behind Maersk, is, as might be expected, keeping its cards close to its chest by revealing nothing.

German carrier Hamburg Sűd, 14th in the pecking order by size, criticised the container giants for entering into a price war, the French analyst Alphaliner reported, quoting CEO Ottmar Gast. “The hunt for market share seems more important for some companies than profitability, which means some shipping lines may be pushed to their limits,” Gast told the Hamburger Abendblatt (newspaper) last week.

Analysts suggest that both MSC and CMA CGM, the two next biggest container lines will probably also try to squeeze out smaller competition, although the French company could be vulnerable itself.

“Maersk Line is willing to sacrifice some earnings in the short term for a better and more profitable market in the long term,” Jacob Pedersen, an analyst at Sydbank A/S described Maersk’s strategy to Bloomberg. “In the last crisis, Maersk Line was among those that helped the sector recover, which probably saved some weak rivals from bankruptcy. This time, Maersk is leaving it to those with the most at stake to lay up ships and improve conditions.” Pedersen has a “buy” rating on the (Maersk) shares.

Maersk’s Nils Andersen said Maersk had outperformed its peers in the first six months of this year. Earnings margin before interest and taxes was 3 percentage points higher than the industry average, giving it more scope to weather industry losses.

“There’s already overcapacity and the order books for new ships are still big, so I don’t think that freight rates will recover enough in 2012 to make it an attractive industry to be in,” Andersen said. “There’s no need for new ships in the next four years.”

Meanwhile Maersk’s global freight rates fell 12 percent in the third quarter amid a 16 percent increase in shipping volumes as too many vessels competed for orders, according to the company’s earnings report issued on 9 November.

“The beginning of next year will be quite difficult,” Andersen told Bloomberg Television in an interview also broadcast on 9 November. “The industry has to clean itself up by not placing orders in the next years.”

Alphaliner reports that this year Maersk has increased its market share from 14.5% to 15.9%. Significantly Andersen has said that his company would not hold back on offering competitive rates. source – Bloomberg, Alphaliner and own sources

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Maersk Karlskrona in Cape Town. Picture by Ian Shiffman

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British prime minister Mr David Cameron

Britain’s prime minister, David Cameron, says a conference will be held in the UK to focus on the instability in Somalia and finding ways of protecting ships from pirates in the Gulf of Aden.

Calling Somalia a ‘failed state that directly threatens British interests’, Cameron said the actions by Somali pirates included attacks on tourists and aid workers, and was causing the radicalization of young Britons by militant Muslim groups with roots in the East African region.

A month ago Cameron’s government announced that British ships sailing off the Somali coast would be permitted to carry armed guards. “Pirates aren't invincible. They are violent and lawless men in small boats and it is time we properly stood up to them,” said Cameron at a banquet to honour the new Lord Mayor of the City of London.

Speaking to the British trade paper International Freighting Weekly, Cameron said there was a real need for the international effort to be coordinated. “That is why Britain will host a major conference in London next year,” he said.

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Somali pirates approaching a merchant ship in the Indian Ocean. Note the RPG on the pirate standing to the right. Picture UN

A United Nations-backed group dedicated to fighting piracy off the Somali coast has stressed the need for the international community to provide adequate financial, human and materiel resources to successfully tackle this ongoing threat.

The Contact Group on Piracy off the Coast of Somalia “expressed its grave concern that the provision of military forces for the anti-piracy operations is likely to fall short of the numbers required; and called upon States to remedy this situation.”

The call came during the group’s tenth plenary session held last week in New York, at which it also emphasized that adequate means must be provided to the international response to piracy.

This includes sufficient military assets to ensure an effective military response; furthering efforts of law enforcement and judicial agencies to effectively investigate and prosecute all those engaged in and profiting from piracy; and stronger support from the international community for the development of prosecution and detention capacity in Somalia and in the region.

The group also noted that a solution to piracy can only be found by combining such activities with the wider efforts aimed at stabilizing Somalia, which include promoting good governance and rule of law, strengthening government institutions and fostering socio-economic development.

The Secretary-General’s Special Representative for Somalia, Augustine P Mahiga, told the meeting that despite the “exceptional” international cooperation on combating piracy, he was deeply concerned at how the threat continues to evolve, with the increase in land-based kidnappings in Kenya and Somalia, and the huge financial flows involved in ransom payments.

“We need to get ahead of the threat by deepening our understanding of how the threat is evolving and adjust our responses accordingly,” he said via video-link from Nairobi.

Combating piracy relies on a “robust and effective three-pronged, land-based strategy,” he added, beginning with countering not only the act of piracy at sea but also targeting and neutralizing those assets and infrastructure on land supporting piracy operations.

It is also necessary to collectively seek ways of promoting social and economic recovery and to generate employment opportunities, as well as to invest in peace-building and future social and economic development.

Thirdly, he said, it is vital to ensure support to the peace process through sustained political commitment to the roadmap agreed by the Somali stakeholders with support from the international community. “This is the underlying strategy for lasting peace and stability in Somalia,” he said.

The roadmap, which was agreed in September, spells out priority measures to be implemented before the current transitional governing arrangements end in August next year, including improving security, drafting a constitution, national reconciliation and good governance.

The Contact Group was established in 2009, under a Security Council resolution, to facilitate discussion and coordinate actions among States and regional organizations to suppress piracy. source – UN News Service

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Coal stacks at Richards Bay Coal Terminal. RBCT ha received over 6mt each month since August

Transnet Freight Rail has come in for some rare but welcome and deserved praise for its freight rail efficiencies from the Chamber of Mines of South Africa. The commendation refers to the increase in volume of coal delivered to the port at Richards Bay since July this year, when more than six million tonnes of coal was transported and delivered to Richards Bay Coal Terminal each month.

PORTS & SHIPS records show this should be since August – in July TFR RBCT had a total of 5.679 million tonnes delivered to it, but let’s not take away from an excellent TFR performance.

The Chamber said that similar improvements in freight rail transportation of commodities have been noted on the Sishen to Saldanha Bay railway line for iron ore, and the Hotazel to Port Elizabeth line for manganese.

In referring to Hotazel, the Chamber in its statement spells the mining centre’s name as Hot As Hell, which as many will know correctly sums it up!

Chief Executive of the Chamber of Mines, Bheki Sibiya said that the commendable increase in the number of tons transported by Transnet Freight Rail to the various ports contributes significantly to the revenues accruing from exports through foreign exchange earnings into the economy.

“This is a welcome contribution in these uncertain economic conditions when governments are under pressure to improve their economies,” Sibiya said. He said the Chamber was delighted to hear of plans to relocate the manganese loading terminal from Port Elizabeth to Ngqura where there is potential for expansion. “The mining industry depends to a large extent on efficient freight rail transportation,” Sibiya pointed out.


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South Africa’s existing rail network

Plans are afoot to build a railway line between Durban and Cape Town, running through the Eastern Cape, in a bid to open up that province for economic development and ease the congestion on the deadly N2 section between East London and Kokstad.

This emerged as President Jacob Zuma answered questions in the National Assembly on Thursday.

Responding to a question from United Democratic Movement leader Bantu Holomisa about reducing congestion on the Eastern Cape death stretch, recently singled out as the most dangerous road in the country, Zuma said there were plans to address congestion and economic development in the province, including the building of a railway.

“Plans are afoot that we need to deal with the Eastern Cape - not only to deal with the congestion, but also economic development to open up the Eastern Cape as part of changing the economic landscape,” Zuma said.

“There are also in the pipeline discussions about the railway line, which would also add to the opening up of the Eastern Cape route, particularly between Durban and Cape Town, of course with East London and other cities in between.” The N2 highway between East London and Mthatha, and between Mthatha and Kokstad, has become synonymous with road carnage.

This emerged in a road fatalities report released recently by the Road Traffic Management Corporation. The eastern half of the Eastern Cape featured six times in the top 25 most dangerous roads list.

A total of 90 deaths were reported along the East London to Mthatha stretch over a period of 12 months, while 77 deaths were recorded along the Mthatha to Kokstad route.

This was despite the fact that numbers of vehicles using these routes were significantly lower than the country's busiest national roads, such as the N3 between Johannesburg and Durban.

The other routes in the province to feature on the list of 39 included the roads from:

Port St Johns to Bizana - 33 fatalities;
King William's Town to East London - 31 fatalities;
Queenstown to Mthatha - 31 fatalities; and
Mthatha to Port St Johns - 26 fatalities.

According to statistics, more than 1 300 vehicles were involved in crashes resulting in the deaths of 8 677 people in the province in the last financial year.

Holomisa has in the past asked the Presidency to prioritise fixing the eastern part of the Eastern Cape's ‘collapsing infrastructure’.

In his question to Zuma, Holomisa suggested congestion on the N2 should be addressed by incorporating these areas into Transnet's upgrading of the country's railway system.

“It would save the government money on maintenance costs of the roads in question,” he said. He later told Independent Newspapers it was especially important that goods trains could travel through the Eastern Cape to cut down on the high number of truck accidents.


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Maersk Line’s container ship MAERSK VISBY (20,927-gt, built 2010) enters Cape Town harbour last week. Pictures by Ian Shiffman

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