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Ports & Ships Maritime News

12 January 2016
Author: Terry Hutson

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


Click on headline to go direct to story : use the BACK key to return


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Two newish vessels at opposite ends of the scale. In the background is Hapag-Lloyd's latest luxury class cruise ship, EUROPA 2 which has been visiting South Africa recently and is seen here in Cape Town. In front is Servest's new crew boat, OCEAN SURGE which is built to the same design as about ten or so others that are at work from Cape Town to Durban and Richards Bay and even as far as Mozambique. The Durban-based boats certainly make a fine sight as they speed acros Durban Bay while going about their business and the same will be said of them elsewhere. Picture is by Aad Noorland

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Conflicting reports from Tanzania are resulting in uncertainty over the future development of a new super-port at Bagamoyo, north of Dar es Salaam.

Reports said that the US$ 10 billion project to build the super-port had been placed on hold by the new Tanzanian government. It was suggested that the suspension was because of plans to improve port capacity at Dar es Salaam and at Mtwara in the south of the country.

Professor Makame Mbarawa, Member of the Chama Cha Mapinduzi political party in Tanzania, was quoted as saying, "I do not want to reveal too much details or plans by the government on the fate of this project [Bagamoyo]. What I can say is only that we are currently concentrating on the Dar es Salaam and Mtwara ports. We are looking for funds for the Port of Dar es Salaam and then for the Mtwara Port."

It was announced last year by the government of former President Jaya Kikwete that finance worth US$ 10 billion had been secured from China and from Oman, and that the new Bagamoya port development was going ahead. However, the new government of President John Magufuli has been reappraising capital projects.

It was also announced that attention would be given to improving efficiency and increasing capacity at the port of Dar es Salaam while developments would also take place in the south at Mtwara. The latter port is expected to assume greater importance as Tanzania'a oil and gas production gets underway.

The new government has also targeted corruption at the ports, and a number of very senior port managers have been ousted.

But now a report in Tanznaina newspaper The Citizen says that the government is now saying that construction of Bagamoyo as a super-port has not been halted and will go ahead as planned. Accoording to the Ministry of Works, Transport & Communications, construction of the port will commence in July this year, following the conclusion of financial negotiations with key partners.

According to the paper, the government was currently in discussions with China Merchant Holding International (CMHI) and Oman which are expected to be concluded by March this year.

A Memorandum of Understanding was signed by the governments of Tanzania, China and Oman on 16 October last year and since then over 2000 Bagamoyo residents have received compensation for their resettlement elsewhere in order to allow construction work of the new port to commence. The statement added that a joint working team comprising technical people from the United Republic of Tanzania, China and Oman is preparing technical and commercial contracts for the implementation of the Port of Bagamoyo.

The new port will have a repoted capacity 20 times that of the Port of Dar es Salaam and will occupy an area of 800 hectares, to which another 1,700ha of portside industrial zone is to be developed.

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Nacala added to CMA CGM's Swahili Express Service

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French container line CMA CGM has included a new direct call at the Mozambique Port of Nacala as part of a revamped Swahili Express Service (SWAX).

The service operates between East Africa, Mozambique, the Indian Ocean Islands and connecting with the Indian sub-continent and Middle East Gulf. The Swahili Express Service is a weekly service and makes use of six container ships each of up to 2,800 TEU capacity.

The first call at Nacala will be performed by the vessel KUMASI on 20 January 2016.

The port rotation is as follows: Nhava Sheva -- Khor Fakkan -- Jebel Ali -- Longoni -- Dar Es Salaam -- Zanzibar -- Nacala [fortnightly call] -- Port Victoria -- Nhava Sheva.

CMA CGM Feeder Service

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CMA CGM has also announced an improvement with its North Madagascar port coverage.

In future the company's Indian Ocean Feeder North service will extend its coverage to Nossi Be and Antsiranana (Diego Suarez) in northern Madagascar in addition to Majunga in the Mozambique Channel.

The first vessel introducing the added calls will be HH SOUTH, calling at Longoni on 27 January 2016.

The Indian Ocean Feeder North will connect with the company's Swahili service at Longoni hub, allowing a faster and easy connection from Europe, Mediterranean, India and Middle East Gulf to the Indian Ocean 'North Zone'.

The fortnightly service is operated by CMA CGM with one vessel of 738 TEU nominal capacity.

Port rotation is as follows: Longoni -- Moroni -- Mutsamudu -- Nossi Be [alternate call] -- Antsiranana [alternate call] -- Majunga -- Longoni.

The birth of China Cosco Shipping Group

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The formal approval of the China Cosco Shipping Group (CSG) merger has been announced from Beijing.

The new company is a result of a merger between Cosco and China Shipping. Last year the Chinese government instructed both state-owned shipping lines to examine the ways and means of combining their interests.

The new head of CSG is Mr Xu Lirong, who has previously served with Cosco for 36 years. The previous Cosco Group chairman, Mr Ma Zehua will vacate his position while the company's general manager Li Yunpeng and his counterpart Zhang Guofa also lose their jobs.

Mr Wan Min, Cosco Group's current deputy general manager, who is highly regarded in both companies and who headed the joint working group that formulated the merger has been designated as the general manager and a board director of CCSG.

Mr Wan is also the chairman of Cosco Pacific and Cosco Shipping. The 48-year-old was the deputy general manager of China Cosco Holdings between August 2011 and March 2015.

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The Maersk Group has joined the Global Alliance for Trade Facilitation under WTO.

The new alliance was announced at the 10th WTO Ministerial Conference in Nairobi, Kenya and consists of governments, international companies such as Maersk Group, DHL and Wal-Mart, and the International Chamber of Commerce and the World Economic Forum.

The objective of the Global Alliance for Trade is to accelerate trade facilitation reforms by supporting swift and wide implementation of the WTO Trade Facilitation Agreement (TFA). In a statment, Maersk said that customs processes today can involve large amounts of documentation that typically are not digitalised. This and lack of coordination between private and government actors adds unnecessary waiting time and delays to traded goods, resulting in added inventory costs and the risks of penalties for importers and exporters.

"When fully implemented, the WTO Trade Facilitation Agreement will represent an important step toward minimising supply chain barriers and reinvigorating global trade. By joining the Alliance with governments and partners, the Maersk Group will use its local expertise to support the implementation and stimulate local growth," says Maersk Group CEO Nils S Andersen.

Reforms aiming at reducing transit time of goods across borders can increase trade flows significantly and thus drive growth and job creation in low- and middle-income countries. The WTO estimates that a full implementation of the TFA can add US$1 trillion to the global GDP annually and 21 million new jobs globally. A successful implementation will therefore benefit all countries involved, as well as importers and exporters.

The first step for the Global Alliance for Trade Facilitation is to diagnose the largest trade barriers in specific countries. With 90 percent of all traded goods moved by sea, the Maersk Group says it can support this process with the insight of its experts on local markets.

To see an example from Kenya of the complexity of the paper trail involved in shipping a container for export, please watch this short video clip:


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Crystal Espirit -- named in the Seychelles

An invigorated Crystal Cruises has officially welcomed its baby sister into the fleet, with the luxury cruise yacht CRYSTAL ESPIRIT being christened at an elegant ceremony held at Eden Island Marina in Mahe, Victoria, Seychelles.

The yacht's godmother was Lady Gaenor Anne Meakes, fiancee of Mark Richards, one of the world's most awarded and recognised yachtsmen. Richards is chief executive of Australian-based Grand Banks Yachts, and is an eight- times champion skipper of the famous Sydney to Hobart race.

Crystal Cruises' president and CEO, Edie Rodriguez was host to a distinguished audience of local dignitaries, travel partners and executives from the line's new parent company, Genting Hong Kong (GHK).

"To say today is a special day is an understatement. Since joining Crystal just over two years ago, a personal goal of mine has been to see Crystal realise the next step in continuing to pioneer luxury travel and hospitality, and today I am seeing that dream fulfilled," said Rodriguez. She thanked GHK chairman and CEO, Tan Sri Lim Kok Thay, for his and his company's support of her vision for Crystal's future.

Part of that vision includes Crystal Cruises launching its Crystal River Cruises later this year and next, with five luxury river yachts which will cruise the waterways of Europe, including the Rhine, Seine, Danube, Main, Garonne, and Dordogne Rivers.

In addition, Crystal Luxury Air will take to the skies with all-first-class outfitted Boeing 777-200LR and Boeing 787 Dreamliner aircraft taking guests on multi-week journeys to far-off destinations not typically served non-stop by major airlines.

Meanwhile, Crystal Espirit has embarked on her maiden voyage with Crystal Cruises and is set to sail to new destinations including new ways of getting there while catering for the adventurous and thrill seekers. She will sail through the waters of the Seychelles, the Emirates, and the Mediterranean and is outfitted to take care of outdoor opportunities as they are presented. This includes a two-passenger submarine, along with an assortment of water toys, four 10-passenger zodiacs and a 12-passenger Wider 32-foot super yacht tender for special boating adventures.

Her 'water toys' include water skis, wake boards, kayaks, jet skis, and fishing, scuba and snorkeling equipment. For those up to it, an acrobatic flight on a stunt plane in Croatia is also on the programme. Or if you fancy something less hair-raising and down to earth, the ship caries a range of bicycles for guests to do their own exploring.

Crystal Cruises' ships regularly take some of the top awards handed out to cruise lines. It will be interesting to watch how this evolves with new ships and under new management.

The Ultimate Abyss, tallest water slide afloat

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Talking about adventures, Royal Caribbean has unveiled The Ultimate Abyss, said to be the tallest slide at sea.

The Ultimate Abyss will intimidate the bravest of guests and challenge them into proving their courage from onboard the HARMONY OF THE SEAS when the huge ship enters service in May this year.

Towering more than 150 feet (nearly 46 metres) above sea level, overlooking the AquaTheater at the aft of the ship, the pair of side-by-side slides will release adrenalin-seeking travellers into a chilling 100 foot (32m) drop that twists and turns in a serpentine-like movement as they slide at approximately nine miles an hour (14.5km/h) from the Pool and Sports Zone on Deck 16 to the Boardwalk on Deck 6 below.

The Ultimate Abyss is designed to incite and maintain a sense of heart-pumping anticipation.

You can read the rest of this article as well as watch a short video clip in our Cruise News & Reviews section - go HERE

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To quote Charles Dickens: "It was the best of times, it was the worst of times." This seems to aptly sum up the two halves of 2015 for container lines, which began the year with optimism but are ending it again looking into a loss-making abyss, writes Mike Wackett in The LoadStar

. Bullish ocean carriers started the year eyeing improved profitability from better network optimisation of the new east-west vessel sharing alliances, as well as a reduction in unit costs by deploying newbuild 18,000 TEU-plus ultra large container vessels (ULCVs).

A better than expected peak season in 2014, which rippled through to the beginning of 2015, provided carriers with a good base for annual contract negotiations -- a situation made rosier by the continued fall in fuel prices.

Indeed, earlier fears that new regulations requiring ships to burn more expensive low-sulphur bunkers in the new SECA regions would hit the bottom line proved unfounded as oil prices tumbled.

Early January saw pomp and ceremony in full flow as the UK container port of Felixstowe welcomed the maiden call in Europe of the 19,100 TEU CSCL GLOBE. It became the world's biggest containership for a few weeks only, until usurped by the arrival of the 19,224 TEU MSC OSCAR later in the month.

It was an accolade carriers were eager to have, to garner publicity in an increasingly competitive industry. In fact the normally media-shy MSC took full advantage of every PR opportunity given by the arrival of its ULCV in North Europe, marking a major strategy change for the privately owned firm.

Meanwhile, protracted labour contract negotiations on the US west coast resulted in a considerable backlog of ships and cargo and spurred diversions to ports on the east coast to keep supply chains moving. Some canny carriers were able to mitigate the extra costs from delays by offering alternative sailings from Asia to the US east coast -- at higher freight rates.

The west coast difficulties also proved to be a silver lining for long-suffering panamax containership owners, whose previously discarded ships were suddenly in demand for more sailings to the west coast and extra east coast voyages via the Panama Canal.

Meanwhile, the members of the four east-west alliances -- 2M, G6, CKYHE and O3 -- were still engaged in a race to operate the biggest ships on the Asia-North Europe market. Increasing numbers of the 8,000-10,000 TEU 'work-horse' vessels of the trade were displaced by the 'new normal' 13,000-18,000 TEU behemoths as an armada of ULCVs sailed from Asian shipyards.

However, while the theory remains that bigger ships lower unit costs and should, therefore, offer a higher margin for carriers, in practice this only works if the vessels enjoy sufficient utilisation.

Thus it became in a race-to-the-bottom scramble for containers to fill these new ships. More so if the carrier was celebrating the maiden voyage of a new ULCV -- its decks had to be full at all costs!

The haste in which the new alliances, and the replacement of big ships with even bigger ships, contrived to significantly increase the capacity on offer on the Asia-Europe trades, which alone would have put down pressure on freight rates. But add the Russian economic crisis and a general reluctance by European consumers to open their purses, and by early summer it was obvious that carriers were sailing at full steam into a perfect storm.

The relationship of spot market cargo to ocean carriers had until now been one of an unpalatable alternative -- to be accessed only as a last resort if there were blips in regular contract customer requirements, or as top-up cargo.

However, there was a seismic shift in carrier strategy as the struggle to fill ships became acute in the summer, reversing the balance from a previous estimated 75-25 ratio, in favour of contract cargo to spot, to a 50-50 level. In fact, one carrier told The Loadstar in July that almost its entire allocation on a particular voyage from Asia to North Europe had been sourced from the spot market.

Shippers that had signed annual contracts now began demanding meetings with carriers to renegotiate the terms, pointing to the fact that spot rates were considerably below contract rates and that they were being offered much cheaper rates by other carriers -- often from within the same alliance.

Unsurprisingly both contract and spot freight rates headed south at a rapid pace, with monthly GRIs by carriers being largely ignored in the market.

Nonetheless, most carriers managed to hold onto enough revenue and were able to cut costs at the same time to record a profitable first-half result. They expected the deteriorating returns to be turned during the peak season.

Unfortunately for the container lines plying the Asia-Europe routes the 2015 peak season proved a very damp squib. The writing was on the wall pretty quickly. Unless capacity was withdrawn the only way was down for freight rates that approached record lows.

The downhill velocity of carrier fortunes in the third quarter was dramatic. Maersk Line reported that its net profit had crashed by a massive 61 percent during the period, to US$264m versus $685m the year before. The Danish carrier was obliged, not only to issue a profit warning, but to announce a number of emergency measures, including the reduction of more than 4,000 staff worldwide -- over 15 percent of its land-based workforce.

Furthermore, the cascading of bigger ships onto other trades which didn't need the extra capacity had a negative impact, ruining many previously profitable routes for carriers and further denting average rates.

Increasingly, monthly GRIs were ignored by shippers, and sometimes even by the very carriers that had proposed them. Ridiculous as it may now seem, some carriers announced a cumulative total of over $12,000 per TEU of GRIs over the course of 2015!

With chronic rate erosion and GRIs failing to stick, carriers announced increasing numbers of blanked sailings and temporary service suspensions. But it was too little and too late, and more recently larger ships have succumbed to being idled, including one of Maersk Line's Triple-Es.

The parlous state of the container liner industry in the second half has resulted in the merger plans of the two Chinese state-owned container lines and the proposed acquisition of APL by CMA CGM. However, if, after these restructures are completed, the same number of ships is deployed on services then it is difficult to see how prospects will be any better for carriers in the new year.

Nevertheless, containers will still need to be moved around the world in 2016, and for the fittest and most judicious carriers it is a question of toughing it out until recovery comes.

It goes without saying that it is in the interests of carriers and shippers, as well as all stakeholders in the industry that 2016 does not see a repeat of the extreme volatility we have seen this year. source : The Loadstar

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DCD Marine at A berth, with the TNPA port offices in the foreground (tall building). Picture: TNPA

DCD Marine Cape Town has recently enhanced its in-house engineering capacity through a strategic collaboration with 6Sigma Naval Architects & Offshore Engineering (Pty) Ltd. The agreement has cemented the collaboration between the two companies and consolidated their respective skills 'under one roof'.

Established in 2012, 6Sigma provides specialist engineering services for ship building and repair yards. Its agreement with DCD Marine Cape Town brings mutual benefits to both companies.

6Sigma is enjoying a growing portfolio, while DCD Marine is able to leverage off 6Sigma's scarce skills set, and have more influence in the design process. This is according to Jako Laubscher, Director at 6Sigma.

"The outcome of the collaboration, while mutually beneficial, is to be able to offer our clients a better service. Being under one roof now enables the client access to one dedicated engineering office, and full 24/7 engineering support from 6Sigma, without being subject to any contractor-sub-contractor limitations," says Laubscher.

Deon Truter, Business Development Manager from DCD Marine Cape Town agrees. "Ultimately, it is about offering our mutual clients an improved service. Bringing 6Sigma into the DCD Marine fold as in-house engineers has resulted in greatly improved process efficiency. This includes better communications, leading to a reduction in timelines, costs and client risk. We have worked with 6Sigma on a number of projects and we are completely aligned in our commitment to a quality output," he says.

6Sigma offers a variety of design services for steel and aluminium boats, ships and offshore structures, including FEA (finite element analysis), stability analysis, propulsion estimations, vessel modification, as well all elements of overall design including concept, basic and detail design.

The company's name was adopted from the concept of 'Six Sigma', a set of techniques and tools widely used for process improvement in organisations.

"Six Sigma focuses on identifying and eliminating potential engineering errors, being closer to the 'shop floor' and therefore being able to offer a better engineering solution and service," says Laubscher. "Being quality-focused, our two companies share a common vision, mission and direction, and therefore it was a good fit going forward."

6Sigma has sub-contracted to DCD Marine Cape Town over the past few years on various projects, including FEA analysis, offshore containers, vessel modifications, systems engineering, updating class drawings, design, fabrication, project management, surveying and class approval.

"The key focus is now on further research and development, to enable us to provide up-to-date in-house knowledge in terms of regulatory changes and the most cost-effective engineering solutions," says Laubscher.

He emphasises the scarcity of naval and offshore engineering skills in South Africa, particularly those with experience relevant to the oil and gas industry. While meeting this gap in the market, 6Sigma also leverages on the knowledge and experience of its software partners to ensure that the company remains competitive internationally.

"6Sigma is focused on 'breeding' the best maritime engineers in South Africa. We invest in training and we encourage self-development. We also give back to the country by sharing knowledge and supporting universities in gaining insight where needed," says Laubscher.

DCD Marine Cape Town, which specialises in engineering solutions for the upstream oil and gas sector as well as ship repair projects, has a growing number of international oil and gas and maritime clients.

"This industry is one of the most regulated and complex in the world and there are no shortcuts. It requires a high-level skills set and a dedication to the delivery of top quality work. We are happy to share a vision of excellence with 6Sigma, and our collaboration will further strengthen our position as a world-class service provider in the oil and gas and ship repair sector," says Truter.

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Charles Maher. Picture: Terry Hutson

Durban man Charles Maher, formerly of Southern African Shipyards and Dormac Marine, has taken up his position in Bahrain as general manager of the ship repair division of ASRY (Arab Shipbuilding & Repair Yard), one of the Gulf's largest and busiest ship and rig repair companies.

Maher, who took up his position on 4 January, was previously General Manager, Marketing and New Business Development at Southern African Shipyards in Durban. He is replacing Magdy Sharkawy, ASRY's GM who is retiring at the end of next month. ASRY's chief executive, Nils Kristian Berge said that the addition of Charles Maher to the senior management team will inject new energy and vitality into the processes of attracting new customers.


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ASRY Shipyard, Bahrain

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Ports & Ships publishes regularly updated SHIP MOVEMENT reports including ETAs for ports extending from West Africa to South Africa to East Africa and including Port Louis in Mauritius.

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The American-owned platform support vessel ENDURANCE (2,954-gt, built 1982) in Durban Harbour on 30 December 2015, on her way to the repair and maintenance quays at Bayhead. The ship was still in port yesterday but was then at berth 104 on Pier 1. Picture is by Ken Malcolm


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