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Ports & Ships Maritime News

1 November 2016
Author: Terry Hutson

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


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OCEAN SPRAY beached near I& J Sat 29 Oct2016 IMG 4

The Durban prawn trawler OCEAN SPRAY beached on the tidal sandbank outside I&J basin in Durban Bay on Saturday, 29 October 2016 (near Wilson's Wharf). After much noise and smoke, she managed to free herself, and return to her berth. This picture by Ken Malcolm

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commercial photography locations

Japan's three leading container lines announced yesterday that they were merging their worldwide container operations.

In a statement the three lines said that Kawasaki Kisen Kaisha ('K' Line), Ltd, Mitsui O.S.K. Lines Ltd (MOL), and Nippon Yusen Kabushiki Kaisha The announcement confirms rumours to this effect and the only surprise is the length of time being taken to put the new merger into operation.

Although growing modestly, the container shipping industry has struggled in recent years due to a decline in the container growth rate and the rapid influx of newly built vessels. These two factors have contributed to an imbalance of supply and demand which has destabilised the industry and has created an environment that is adverse to container line profitability. In order to combat these factors, industry participants have sought to gain scale merit through mergers and acquisitions and consequently the structure of the industry is changing through consolidation. Under these circumstances, the three companies have now decided to integrate their respective container shipping on an equal footing to ensure future stable, efficient and competitive business operations.

The new joint-venture company says it expects to create a synergy effect by utilising the best practices of the three companies. By taking advantage of scale merit of its vessel fleet totalling 1.4 million TEUs, it hopes to realise an integration effect of approximately 110 billion Japanese Yen annually and to swiftly achieve financial performance stabilisation. By strengthening the global organisation and enhancing the liner network, the new joint-venture company aims to provide higher quality and more competitive services in order to exceed clients' expectations, the group says in a joint statement.

An overview of the new joint-venture company -- Shareholders ratio reflects each contribution:
K-Line 31%
MOL 31%
NYK 38%

An approximate amount of 300 Billion JPY will form the group contribution -- this includes fleets and the sharing of terminals as investment in kind.
The combined fleet size will be approximately 1.4 Million TEU, making this the 6th largest in the market with approximately 7% of global share as for October 2016.

The Agreement was finalised and announced on 31 October 2016 and the establishment of the new joint-venture company is planned for 1 July 2017 but the business commencement will be on 1 April 2018.

The three lines bring the following owned ships to the agreement, as at 31 October 2016.

NYK Line : 68 ships and a total TEU capacity of 507,046 TEU.
MOL : 35 ships and a total TEU capacity of 307,449 TEU.
K Line: 31 ships and a total TEU capacity of 240,440 TEU.
The balance of TEU capacity comes from chartered vessels.

The announced merger of Japan's Big Three comes as no great surprise, indeed there has been much speculation concerning this likelihood. It follows a range of acquisitions, mergers, and trade alliances among the world's major shipping lines, along with the bankruptcy of South Korea's biggest container carrier, Hanjin Line, which sent shock waves across the world and tied up an estimated US$14 billion in cargo on board ships at sea or in port. Hanjin was the 6th largest container line in terms of capacity at the time of going into receivership.

The vice chairman of French shipping giant CMA CGM has meanwhile warned that Hanjin won't be the only container shipping line to go this way before the current downturn is over. Rodolphe Saade said that the only alternative was consolidation, calling it "the name of the game." Speaking to the Danish Maritime Forum Saade said there would be a price war, "but we need a 'decent' price war." Bringing freight rates to rock bottom prices was not an answer, he said.

CMA CGM was itself only just saved from receivership in 2009/10 by the intervention of Turkey's Yildirim Group which injected US$500 million into the French company, which was then restructured.

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The Tanzania Revenue Authority (TRA) says that accusations that it is ripping off importers by increasing the value of goods being imported in order to meet monthly quotas, are not true, reports the Tanzania Daily News (Dar es Salaam).

According to the TRA it has however been frequently compelled to increase the value of goods "due to under-invoicing practices by some importers." The TRA compared prices on imports to an international data base, it said.

"Some of invoices submitted to clear imported cargo have been made inside Tanzania," Richard Kayombo, the TRA's Director for Taxpayer Services and Education, told the newspaper.

The TRA was responding to allegations made by the Confederation of Tanzania Industries (CTI), which claimed that manufacturers in Tanzania are concerned with an arbitrary upliftment in the value of imported goods in order to meet their monthly target and by so doing to appease the government. The CTI claimed that in some instances the value of imported goods is inflated by as much as 100%. According to the TRA the specification of some goods being imported are found to be different from the actual goods being imported.

It said there is also an under-valuing of prices, misleading information on imports aimed at fraudulently getting tax relief, and an under-declaration of quantity of goods, contrary to the actual amount of items after physical verification at entry points. These have been some of the factors that TRA officials say forces them to make changes in the Harmonised Code.

The TRA says that even when action has been taken to increase the value of imported goods, importers retain the right to appeal against the amounts being levied. The TRA's system provides room for a client to appeal either to the Commissioner General and other outside bodies of Tax Appeal and Tax Tribunal.

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Tema Shipyard

A call has gone out to the Ghanaian government to provide the right environment for increased private sector participation in the country's marine sector.

Ing. Teddy Mensah, First-Vice Chairman of the Maritime Professionals Club (MPC), a professional body of mariners, said the best way to revive the dormant and defunct maritime structures is for government to put up a policy framework that will create the right environment for private participation to aid the revamping of dormant maritime structures to expand the economic fortunes of the buoyant sea trade sector.

Most economically viable maritime resources that were established shortly after Ghana's independence in 1957, with the exception of the Ghana Ports and Harbours Authority (GPHA) which operates the Tema and Takoradi ports, and the Regional Maritime University (RMU), are either defunct or currently operating below par.

The PSC Tema Shipyard and Dry Dock Company, State Fishing Corporation and the national shipping line, Black Star Line, are a few of such maritime enterprises that have either collapsed or are facing imminent closure, it was said.

According to the MPC, the establishment of a national shipping line, such as reviving the Black Star Line, will enhance the country's fortunes on the global trade fronts and reposition the sea trade sector to drive the economy.

"The current situation demands increased investment from the private sector to government to harness the various maritime structures to rake in the most gains from the lucrative sea trade sector as a port country," said Ing. Mensah.

He said that with the needed investments, most of these non-performing maritime infrastructures could be revamped to boost economic gains from the sector.

"The Tema Shipyard and Dry Dock Company, when revived, could provide technical support to the national shipping line, which is in the pipeline, and [provide] international vessels by way of maintenance and repair services. The facility could also produce custom vessels to ply the Volta Lake, providing a cost effective means of cargo haulage across the country aside from ensuring a dependable and navigable water transport system all year-round," he maintained.

To buttress his argument, Ing. Mensah insisted that government must ensure the inclusion and participation of qualified and experienced maritime professionals in policy formulation, technical coordination to enhance knowledge-based hands-on operations. source: bftonline.com

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MSC FLAVIA, a 13,000-TEU capacity ship diverted to South Africa due to the cascade effect. Picture: Shipspotting

As carriers' stock of ready-to-cascade Asia-Europe containerships is almost empty, the second phase of the cascade could be even more difficult for carriers to manage, shipping consultancy Drewry reports.

New Ultra Large Container Vessels (ULCVs) will force the cascade into a potentially more destructive second phase of bigger ships moving into North-South lanes as these vessels will stretch the ability of ports to handle them and trades' capacity to absorb them without dumping utilisation, the report continues.

The introduction of these leviathans and the proceeding arms race to catch up that has pushed the ceiling closer to 20,000 TEU, has had huge consequences for the industry, one of the biggest being the huge deployment headaches they have given carriers. With the biggest ships effectively locked into the Asia-Europe trade due to port handling limitations elsewhere, carriers have had to be creative in shuffling ships into new trade lanes.

The phasing of ex-Asia-Europe ships into new lanes has routinely destabilised the new homes and has been a major contributing factor towards persistently low freight rates. The slowdown in demand that coincided with the arrival of the ULCVs exacerbated the industry's overcapacity and has meant that for years carriers' deployment decisions were less than optimal.

"Deciding where to use their biggest assets has most often been based on necessity rather than demand," Drewry said, adding that the average size of vessel on the Asia-North Europe trade is nearly as big as Maersk Line's E-class units at 14,600 TEU, introduced 10 years ago. There are now only seven sub-10,000 TEU ships left on the route.

While the pressure to cascade ships is intensifying thanks to the new ULCVs, carriers in the Asia-North Europe trade now have less low-hanging fruit to easily pick off and redeploy elsewhere.

Since the first quarter of 2013, the average ship size on the Europe-South Africa trade has grown by 92%, while for Asia-West Africa the growth rate was 79% and for Asia-East Coast South America it was 64%. Some of that will have been through newbuilds going directly into the trade, but most will be down to the cascade, Drewry said.

In one recent report of the Port of Durban Bar Chart, listing the next 58 container ships expected at Durban, 19 vessels had a length of 300 metres and more -- the longest being at 366 metres in length and 14,000-TEU in capacity. This with a port that is currently designed for a maximum ship size of 10,000 TEU. source: Drewry

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Jeff Radebe
Jeff Radebe

South Africa is working to improve the promotion of competitive products in order to expand trade volumes and improve its trade structure.

"We are working towards the promotion of competitive products in order to expand trade volumes, improve trade structure and promote balanced and sustainable development of bilateral trade volumes on the current basis. This includes China giving favourable consideration in expanding its imports of the top ten value-added products from South Africa," Minister in the Presidency for Performance Monitoring and Evaluation, Jeff Radebe said.

The Minister held a meeting with a high-level Chinese delegation from the National Development and Reform Commission (NDRC) of China at the Union Buildings on Friday afternoon.

The objective of the meeting was to exchange views on issues of mutual concern relating to trade and industry agreements signed between South Africa and China during the 2015 Forum on China Africa Cooperation (FOCAC) held in Johannesburg and the 2015 Chinese State Visit to South Africa.

Minister Radebe said total imports from China in 2015 were valued at R199.4 billion compared to the total value of South African exports into China of R94.4 billion resulting in a trade deficit of R105 billion.

South Africa's agricultural exports amounted to R1.1 billion while agricultural imports from China amounted to R1.7 billion in 2015. Meanwhile, the trade balance for the mining sector remained positive.

Both South Africa and China have committed to increasing direct investment in agriculture, fishery, energy and manufacturing, among others.

South Africa wants to encourage the support of investment and cooperation into fuel cell technology for small scale power generation, human resource development as well as in the area of energy which includes nuclear, renewables and bio-fuels.

"Achieving all of the above will contribute to our own national imperatives which is embedded in our National Development Plan (NDP)," said Minister Radebe.

Referring to the recently concluded BRICS Summit in Goa, India, the Minister said China and South Africa's economic growth prospects and the increased momentum of the BRICS formation will continue to be a critical engine for growth and development objectives.

For Africa inclusive and interconnected development, industrialisation and curbing illicit financial flows remain crucial goals.

"Both at a national and continental level, infrastructure remains a critical priority focus. Reliable, efficient infrastructure is crucial to economic and social development that promotes inclusive growth."

Government has established Invest SA, which is a one-stop shop investment centre coordinated by an Inter-Ministerial Committee that is chaired by President Jacob Zuma.

The Minster told the delegation that Invest SA has identified several high impact priority projects in water, energy, ports and rail.

In addition, the Presidential Infrastructure Champion Initiative (PICI) emphasises the importance of infrastructure investment that aims to ensure job creation and the transfer of expertise.

Key projects identified by the PICI, which is also led by President Zuma, include the Grand Inga Hydro Project as well as the Lesotho Highlands Water Project-Phase 2.

SA an important role player says Chinese delegation
Speaking through an interpreter at the meeting, the Chinese delegation said they were glad to be in South Africa to discuss economic cooperation prospects.

"[South Africa] has played an important role in global governance and climate change among others," said the delegation.

The delegation said relations with mining-rich South Africa over the years has grown.

"The two countries have gone from a partnership to a strategic partnership. Cooperation between the two countries has become a template for cooperation between China and other African countries."

China has been South Africa's largest trading partner for seven consecutive years.

"In 2015 bilateral trade between the two countries amounted to 46 billion US dollars while about 140 large scale Chinese companies are [operating] in South Africa," said the delegation that arrived in South Africa on Friday morning.

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Capt John Lloyd MBA AFNI, new CEO of The Nautical Institute

The Nautical Institute has announced that it has selected a new Chief Executive Officer after interviewing a competitive shortlist of six candidates.

Captain John Lloyd MBA AFNI, currently the Institute's Chief Operating Officer, will take over from Philip Wake OBE RD MSc FNI, who is retiring in May 2017 after 14 years in the post.

Lloyd took up the COO post in November 2015 in which he has had overall responsibility for the Institute's specialised training services, including the industry-standard Dynamic Positioning Operator (DPO) accreditation and certification scheme.

His 16-year seagoing career began in 1975, gaining command in 1987 and spending two years as a marine pilot at Walvis Bay. His extensive experience in maritime education has included senior positions at Warsash Maritime Academy and Flagship Training in the UK, CEO of Vanuatu Maritime College and Professor of Maritime Training at the Australian Maritime College in Tasmania.

As Chief Executive of The Nautical Institute, Lloyd will be managing the resources of an organisation that has 7,000 members and over 50 branches around the world. He has been a member of the Institute for 30 years.

On being appointed, he said: "I am thrilled and honoured to be given the opportunity to lead the next phase of development at the world's leading body for maritime professionals -- The Nautical Institute.

"The Nautical Institute makes a real difference to professionalism through our publications, our qualifications and the special projects we lead. It is essential we continue to foster the benefits of membership and to encourage younger, fresher minds to make constructive contributions to what we mean by a 'maritime professional' in the 21st century."

Lloyd's appointment comes at a time of rapid change within the industry and increasing demand for the kind of professional standards and recognition that the Institute promotes. Part of his role will be to ensure that the organisation's governance structure, comprising committees, Council and Executive Board of Trustees, fully represents the interests of its members.

"We will continue to engage positively, helpfully and constructively with individuals, regulators and employers in our ambition to make the maritime sector safer, cleaner and more effective," Lloyd pledged.

He concluded: "I look forward to increasing our influence on matters of importance to our members and engaging with the worldwide community of maritime specialists."

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Port Louis 470
Port Louis - Indian Ocean gateway port

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.

In the case of South Africa's container ports of Durban, Ngqura, Ports Elizabeth and Cape Town links to container Stack Dates are also available.

You can access this information, including the list of ports covered, by going HERE remember to use your BACKSPACE to return to this page.

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QM2 in Cape Town. Picture by Ian Shiffman

We publish news about the cruise industry here in the general news section, but this is also available in a dedicated Cruise News section. This section will include various stories and news not covered in the general news so if you have an interest in this sector don't forget to check regularly on our CRUISE NEWS page.

This you will find here in CRUISE NEWS & REVIEWS

Naval News
SA Navy 480

Similarly you can read our regular Naval News reports and stories which also have their own dedicated section, although some stories may be duplicated in the general news section.

Find the Naval Review section HERE

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2016 oct 25 apl norway st 480

The Panamanian-flagged container ship APL NORWAY (72,807-dwt, built 2007) calls at Cape Town in recent weeks and is seen here manoeuvring in the harbour. The ship with a container capacity of 6,350 TEUs is probably ideal for most South African calls, being able to arrive or depart fully loaded at any of the four main container ports -- Durban, Ngqura, Port Elizabeth or Cape Town (see related story above). The ship is owned by Shoei Kisen and was built at the Koyo Dockyard Co in Japan as hull number 2275. These pictures are by Ian Shiffman


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