Thursday, 30 June 2016

Accidents On The Docks

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ILWU Walking Boss Succumbs To Injuries Sustained in Fall On Log Ship [Longview, WA – 25 June 2016]

Blueoceana Company has been made to understand from colleagues in Washington State, that Jimmy Meadows, Jr., a Walking Boss and member of ILWU Local Union 92 at Portland, Oregon, has died of injuries originally sustained in an accident occurring aboard M/V FOREST TRADER (shown above) at the Port of Longview, Washington on the afternoon of 21 June 2016.
Very little, apart from the media account linked to here: Worker in critical condition after fall at Weyerhaeuser dock (062116), has been made available. However, the following information appears credible:
Mr. Meadows, in the employ of Stevedoring Services of America, was atop a hatch cover when he fell approximately eight (8) feet to the weather deck. In that fall, he sustained several broken vertebrae (a broken neck), broken ribs and a very likely pierced lung. He was evacuated from the ship by emergency personnel and taken to a local hospital, where he was assessed to be in critical condition and put on life support.
Subsequent neurological assessment disclosed the seriousness of his injuries and the inability to sustain life without extraordinary means. Life support was terminated yesterday, 25 June 2106.
Investigations by Federal OSHA, SSA and ILWU are ongoing, so it’s pointless and unwise to theorize as to proximate cause at the present time. When available, updates will appear at this page.

Wednesday, 29 June 2016

EU Council Approves New Port Transparency Rules

The EU Council’s Permanent Representatives Committee approved on June 29 new rules to increase the financial transparency of ports and create fair conditions for access to port services across Europe, confirming the agreement reached with the European Parliament on June 27. 
The new rules set out to make ports more efficient and ensure fair competition in the sector, aiming at boosting the competitiveness of European ports both in promoting short sea shipping as an alternative to congested roads and vis-à-vis ports located in non-EU countries.
In addition, more competitive facilities and processes should reduce costs for transport users, according to the Council of the European Union.
The regulation will apply to over 300 seaports covering 96 percent of all freight and 93 percent of all passengers handled by EU ports. Member states are free to decide whether to apply the regulation to other ports as well.
Member states may decide to leave out ports in the comprehensive network located in the outermost regions, such as Réunion, Madeira and the Canary Islands. They may also decide not to apply the rules on the separation of accounts of small ports in the comprehensive network.
When it comes to the different categories of port services, cargo handling and passenger services will be subject to the financial transparency rules, but are exempted from the access provisions. Member states will remain free to decide how to organise these services.
Furthermore, member states and port management bodies will be able to impose certain minimum requirements for the provision of port services and restrict the number of service providers in a limited number of cases set out in the regulation.
The regulation must be formally approved by the European Parliament and then by the Council and this is expected to be completed by the end of this year, according to the Council of the European Union.

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Exchange of views between ports CEOs and Transport Commissioner Bulc, 19 January 2015 Brussels

Report pdf - 419 KB [419 KB]
More photos 
Europe's ports are vital gateways, linking its transport corridors to the rest of the world. 74% of goods entering or leaving Europe go by sea, and Europe boasts some of the finest port facilities in the world. Ports also play a crucial role both in the exchange of goods within the internal market and in linking peripheral and island areas with the mainland. But ports are not only great for moving goods around, they also generate employment; 1.5 million workers are employed in European ports, with the same amount again employed indirectly across the 22 EU maritime Member States.
Nevertheless the sector is facing major challenges in terms of hinterland congestion, traffic growth and investment. The EU needs good performing ports across all maritime regions. Bottlenecks in ports and their hinterland due to the lack of high quality infrastructure or low performing port services result in congestion and extra costs for shippers, transport operators and consumers.
The new guidelines for the development of the trans-European transport network (TEN-T) have identified 329 key seaports pdf - 377 KB [377 KB] along Europe’s coastline that will become part of a unified network boosting growth and competitiveness in Europe's Single Market. The Connecting Europe Facility financial instrument will provide up to € 26 billion to support transport infrastructures, including ports and connections of port with the hinterland, for the period 2014-2020.
The Commission adopted on 23 May 2013 an initiative aimed at improving port operations and onward transport connections at these 329 key seaports. This initiative proposes an integrated strategy combining legislative measures and non-legislative measures.
  1. The legislative measures take the form of a Regulation to be adopted by the European Parliament and the Council of Ministers. The proposed Regulation will introduce common rules on the transparency of public funding and the market access of port services. The rules on the market access of ports services will however not apply to cargo handling. This Regulation will protect port operators against legal uncertainties and unfair competition and help attract investors. The adoption of the Regulation will help provide a better allocation of scarce public funding and an effective and fair application of the State aid rules in ports. It was estimated that this Regulation could save the European economy up to €10 billion by 2030 and help develop new short sea links.
  2. This proposed Regulation complements the modernization of the state aid rules by the Directorate General for Competition through the development of the case law (see list of decisions relevant to ports pdf - 214 KB [214 KB] ). The Commission is considering further clarification of the state aid rules applicable to port when the regulation will be adopted, notably by including certain port investments in the Block Exemption Regulation.
  3. As other non-legislative measures, the Commission promotes and supports the social dialogue between port workers and their employees to address issues such as health and safety at work, training and qualifications. An EU social dialogue committee has been established and met for the first time on 19 June 2013.
  4. The Commission will integrate ports in the future corridor work plans foreseen by article 46 of the TEN-T guidelines (Regulation 1315/2013) and will provide targeted grants and other forms of financial supports to port infrastructure projects by using the Connecting Europe Facility .
  5. Slideshow presentation: European ports, an engine for growthpdf - 916 KB [916 KB] 
    The Commission is undertaking a series of measures to simplify procedures in ports, in particular by avoiding unnecessary controls by customs for the movement of goods within the internal market ("Blue Belt "). The main instrument to assess the EU status of goods will be a harmonized cargo manifest to be introduced in June 2015.
  6. Finally the Commission supports initiatives to raise the environmental profile of ports by providing guidelines and promote the exchange of good practices and will define a port research and innovation agenda which can be used in the Horizon 2020 programme to encourage innovation in ports.

Container crane damaged by container ship in Bremerhaven

June 28, 2016 at 17:41 by Mikhail Voytenko in Accidents 
Container ship ITEA struck container crane at Bremerhaven Container Terminal at around 0900 LT June 27. Container crane was seriously damaged and is inoperable, vessel suffered slight damage portside. Allision was caused by error in operating bow thruster, i.e. crew’s to blame.

Could terminal partnerships answer the challenge of larger container shipping alliances?

© Daniël Leppens
Investment dilemmas and challenges for port and terminal operators have been magnified by the arrival of ultra-large container vessels (ULCVs) and the consolidation of volumes into larger alliances and bigger carriers.
Neil Davidson, senior analyst of ports and terminals at Drewry, told delegates at last week’s TOC Container Supply Chain conference in Hamburg that the primary concern of terminal operators was that volatility had worsened dramatically.
“There’s much more volatility in market share that operators have to deal with as a result of the alliances,” he said. “Look at the transhipment market in south-east Asia – Singapore’s volumes were down 9% last year while Tanjung Pelepas and Port Klang were up significantly, almost entirely due to alliance reshuffling.
“Then we heard this week that CMA CGM has done a deal with PSA which will likely see some volume going back to Singapore – so there are huge chunks of volumes that can move between ports, which leads to great uncertainty and higher risk.”

He added that this volatility was no longer just restricted to the more “inherently volatile” transhipment ports.
“Look at the North European gateway market in the last year – Rotterdam was more or less the same, Hamburg was down 9.3%, Zeebrugge down 23.3% while Antwerp was up 7.5%. Again, a big factor in this was the alliance reshuffling having a big impact on volumes in a short space of time, and in a long-term business it’s pretty hard to deal with that.”
In response, he suggested terminal operators have a number of strategies at their disposal, particularly the idea that they could look to form alliances of their own.
“There could be more alliances between terminal operators – finding ways to work together is a natural response to the way big carriers have come together, and perhaps that might go a step further and result in more M&A between operators and merging,” he said, adding that joint-ventures with shipping lines for terminal investment was another option.
“It would be one way of mitigating the risk of bigger alliances. PSA’s deals with CMA CGM and Cosco are a good example of that – as Opex and Capex is being pushed up it is certainly worth working with carriers to try and optimise the process,” he said.
One possible by-product of the larger chunks of volume is that it may allow terminal operators to raise handling rates, which traditionally have been resistant to inflationary forces.
“You could charge more for terminal handling, and while there has been a lot of talk about how the bigger alliances put pressure on terminals and drive prices down, I’m not so sure that’s the case – if you have bigger ships and bigger alliances, there’s actually less choice of ports and terminals to use and that means terminals operators have a chance to reflect that in their pricing,”
The prospect of terminal operators forming alliances has previously been mooted, but has so far gained little traction. However, Lamia Kerdjoudj-Berkaid, secretary general of the Federation of European Private Port Operators (Feport) said there could be grounds for the sector to approach competition authorities.
“While terminals cannot cooperate on prices, there are exemptions such as the sharing of slots on ships, which is common capacity management. Lines can cooperate and have an exemption to do so, which could be extended to terminal operators.
“We are not there yet, and there has been no formal request from the terminal operator community, but if we are looking at optimisation, then this would make sense.
“But it is not as of yet a request from our federation, and nor from our members,” she said.
Unless operators rise to these challenges, Mr Davidson suggested the investment in new capacity could be withheld and the ownership profile of the sector could change dramatically.
“Terminal operators could simply refuse to invest, and certainly at the moment a lot of major operators are reviewing their greenfield expansion plans very, very carefully.
“You might also see a shift in the nature of investors in the industry. Certainly the institutional investor might change in nature as the risk profile changes,” he said.

Tuesday, 28 June 2016

Hanjin to off-hire 38 chartered ships in bid to reduce outgoings and shore up cashflow

Hanjin Shipping has confirmed to The Loadstar that it intends to off-hire 38 chartered-in vessels when their charters expire this year and in 2017.
Involving 20 containerships and 18 bulk vessels, it is the latest restructuring step by the shipping group to appease its creditors by significantly reducing its charter contract liability.
Hanjin did not advise which trades the ships are deployed on, or if they would be replaced by other tonnage, which conceivably could include ships operated by its vessel sharing partners.
Hanjin currently operates a fleet of 47 chartered-in containerships and is still in negotiations with owners in an endeavour to reduce daily hire fees by around the 30% demanded by its main creditor – state-owned Korea Development Bank (KDB) – as part of its financial restructure.
Earlier this month Hanjin advised that it had completed the first round of talks with 22 shipowners, during which it had “explained the necessity” of a charter rate reduction. But it said it was “too early to comment” on how successful these negotiations would be.
However, Gerry Wang, chief executive of Seaspan, which charters and manages seven containerships to Hanjin – was clearly in no mood to concede anything when he visited the shipping line’s top officials in Seoul recently, confirming Seaspan would not accept a rate cut.
“We have never done it. We won’t tolerate a contract re-negotiation. Any call for a rate cut is illegal by international laws,” he told Bloomberg.
The seven 10,010 teu ships Seaspan charters to Hanjin are contracted for 10 years on fixed rates of $43,000 per day, and are due to expire in 2024 and 2025.
According to Seaspan, Hanjin owed $11.6m in charter hire arrears as at May, and Mr Wang said the shipowner was prepared to cancel the charters and take back the ships rather than reduce the daily hire rates.
The owner warned that vessel arrests and the termination of the charters “could materially harm Hanjin’s business and restructuring efforts”.
In an emailed response to The Loadstar, Hanjin said: “We are under continuous discussion and negotiation with Seaspan, and we are putting all our effort to bring the best visible result as soon as possible.”

Nonetheless, Hanjin maintains that it has reached a “mutual understanding” with shipowners following the brief detention of a bulk carrier in Richards Bay, South Africa last month, to resolve the arrears issues.
South Korean media reports have suggested that the carrier’s total charter hire arrears are as much as $85m.
Meanwhile, Hanjin continues its near-frantic efforts to shore up its cashflow by offloading any asset it can, and recently reached deals to sell its shareholding in three container depots in China.
For undisclosed amounts, Hanjin has divested its 60% interest in the Shandong Hanjin Logistics depot; a 50% shareholding in Dalian Haunting Logistics; and a 38% stake in Shanghai Hanjin Freight & Transportation.
Hanjin is scheduled to pay off or refinance around $420m of debt that will mature at the end of this month.

Hapag-Lloyd, UASC Agree on Merger Terms

German shipping major Hapag-Lloyd and United Arab Shipping Company (UASC) have reached an agreement on the terms and conditions of a Business Combination Agreement (BCA) providing for the contribution of all shares in UASC to Hapag-Lloyd. 
Today, the Supervisory Board of Hapag-Lloyd has approved the transaction subject to the anchor shareholders of Hapag-Lloyd and UASC agreeing to assume the commitments levied upon them in the BCA.
The conclusion of binding agreements is still subject to the consent of the shareholders of UASC.
An extraordinary general meeting of UASC to grant such consent will be held in Dubai on 29 June 2016.
The announcement comes two months after the parties first announced the discussions on the forms of cooperation, which included a potential combination of their mutual container shipping operations.
Hapag-Lloyd earlier said that in case of a business combination, “the parties are basing their discussions on a relative valuation of the two businesses at 72% (HL) and 28% (UASC).”
The merger, if concluded, would create the fourth biggest container shipping group in the world. The move would also provide the German company access to some of the biggest containerships plying the international waters today, as UASC has six 18,800 TEU ships being built at Hyundai Heavy Industries, headed by Barzan, the container shipping industry’s first LNG-ready ultra-large container vessel already delivered.
The move is said to be driven by the ever growing need for consolidation within the container shipping industry amid fleet oversupply that has pushed rates to the rock bottom.

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Brexit: How it could be beneficial


Great Britain’s decision to leave the European Union has many implications for maritime.
Clearly the important effects on the world economy will be if Brexit breeds further contagion and a breakup of the EU. This breakup could be very positive if it provides a basis for a better union, or several regional unions, of nations that benefits all economic levels of society, not just the upper classes.
Without a doubt standardised regulations, freedom of movement of people, and fewer trade barriers benefit shipping. These issues will not be examined here. The key factors discussed here are those which have resulted in decreased global economic growth: wealth inequality, dominance of the banking sector, euro issues, austerity. Some of these issues are not the result of the creation of the European Union but they feed discontent with the EU. And the major problem affecting shipping today is a lackluster global economy.
The fact that working people have been left behind during the last 40 years is probably the greatest issue leading to the vote to leave the EU by Britain. Wages have been depressed by the introduction of workers from Eastern Europe and refugees from the Middle East and Northern Africa. In a vicious cycle, the depressed wages have resulted in lower spending by workers. And workers constitute the economic class that spends the highest proportion of its income. The European Union had exacerbated the situation by expanding membership to include Eastern Europe and by taking a moral position to welcome refugees.
What has been missed is that the elites and the upper middle class who favour these policies do not have their own economic status affected while factory workers have seen theirs greatly diminished. The misery of economic deprivation is a breeding ground for prejudice against foreign immigrants and their cultures. The cycle worsens because bigotry is a symptom of hard economic times. The bigotry then often ushers right-wing governments which do not decrease the income inequality. They often make it worse.
But not all of the factors leading to income inequality have involved globalisation directly. The increased dominance of financial institutions in the economy has shifted income from middle class manufacturing jobs to higher paying banking and finance positions. These fewer higher paid professionals spend less of their income than did the factory workers. Hence growth is limited.
And it gets worse. Many businesses are not reinvesting their profits into research or capital improvements which would create more jobs. Instead they are using profits for financial transactions which are not relevant to conducting the business. For example, companies are using profits to buy back their own stock. This does not create jobs. It raises the company’s stock price which of course greatly increases the value of options in upper management’s compensation package. Also mergers and acquisitions are undertaken which often leave a company with a greater debt burden and no real business benefit.
Even though this financialisation of industries is not directly a result of the EU, it has added to the misery of the working class which drove the vote to leave the EU.
The other problem, not directly related to Great Britain, is the non-equilibrium of the euro. The German insistence on austerity has resulted in problems for southern European countries. This diminished growth in the EU has affected UK workers. Global growth simply has not recovered since the financial crisis of 2008.
So what is the great positive effect that Brexit could have? If Brexit and subsequent contagion causes a complete reorganisation of the European Union and the Eurozone, a far better Europe could result.
First, there needs to be another currency for the southern countries of Europe. With the new currency, call it the med, countries such as Italy, Spain, Greece, and Portugal can devalue the med with respect to the euro. Countries in northern Africa could be invited to join later if their finances are sound. Then there would be a trading area around the Mediterranean Sea.
Second, travel without visas could be retained for Europe, or perhaps several regions in Europe. But work permits would not be granted except under conditions which do not depress local wages.
Third, banks need to be broken up and regulations of all financial institutions need to be increased.
Brakes need to be put on short selling, derivatives need to be regulated and only traded on public exchanges, all bourses need to be nationalised, and taxes on security transactions need to be instituted to stop high-frequency trading. Exchange traded funds and mutual funds need to be eliminated because they isolate the voting rights from the person investing. Hedge funds and private equity firms need to be regulated out of existence. Their destruction of maritime needs no explanation. In short, securities ownership needs to serve businesses, not speculation. Banks from Wall Street, the City, Frankfurt, the Bahamas, Cayman Islands, etcetera, need to go away. They need to be replaced by sound retail banks and separate well-regulated investment banks, none of which approach the size of current banks.
Finally, central banks need to quit trying to repair the economy with lower interest rates at near-zero levels. They need to raise rates and scold national legislatures to abandon austerity and spend money to fund large job-creating infrastructure projects.
Brexit, if followed by a breakup of the EU, could serve as a foundation for a Europe with real growth for all. The concept of a unified Europe is a good concept. It just needs to be implemented correctly so all will benefit.

Must-Watch: Panama Canal Expansion Highlights

A video released by the Panama Canal shows the major milestones of the Panama Canal expansion, since the project began in 2007, starting with the protocol blast in Paraiso Hill, on September 3, 2007 up to the recent draw of Cosco, whose vessel will the first to make the inaugural transit.

New Paper: The Panama Canal Expansion: Completion is Finally Upon Us

The video also includes an explanation of the structural and logistics aspects of the Panama Canal, as well as how it will operate once inaugurated on June 26, 2016.

Read a feature on the Panama Canal Expansion and its impact on global industry

Uploaded on 24 Jun 2016
To commemorate the opening of the Panama Canal Expansion, EarthCam released this 4K construction time-lapse movie, showcasing progress from March 2011 to June 2016. Progress was documented for this historic transportation channel by EarthCam’s robotic time-lapse construction cameras from 142 webcam angles. Watch over 5 years of progress in just 2 minutes with HD photos and panoramic imagery.

Official Panama Canal Construction Time-Lapse