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21 Jun 2017

Rumours ripe over COSCO acquiring OOCL, news floats "it is almost a certain deal"

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"* China's COSCO Shipping may acquire Hong-Kong based Orient Overseas Container Line in the near future, The Loadstar reported Tuesday. * Talks of COSCO, CMA CGM and Evergreen considering the $4 billion asking price allegedly began as early as January, despite all three companies denying they were in talks. OOCL later joined all three carriers in the Ocean Alliance in April. * Despite the rampant forming of affiliations as a result of the industry downturn, a fissure between those with high market share—such as Maersk with 19% and those without it, such as OOCL with 3.3% — has appeared, causing further adjustments among the alliances, such as Maersk's purchase of Hamburg Sud. As shipping carriers continue a consolidation spree, the likelihood of COSCO's purchase of OOCL demonstrates that industry consolidation is anything but complete. COSCO and OOCL are ranked No. 4 and No. 7 respectively on the Alphaliner Top 100 list, showing that even the largest carriers are not exempt from the industry's financial struggles. The mergers and alliances further indicate the shipping industry's desire to drive down costs and deliver more products with fewer ships. Some shipping lines are pursuing M&As in order to up their revenue: Maersk Line, for example, reported a $1.9 billion loss during fiscal year 2016, then announced its plan to acquire Hamburg Sud, a German container line, in December. This may be COSCO's strategy, as the company experienced a $9.9 million loss in fiscal year 2016. Consolidation may keep some carriers afloat and drive down operating costs in the short run, but in the long run, a decline in competition could hike shipping costs for suppliers and consumers. In January, reports surfaced of a $4bn price tag put on the container line by OOIL as the Chinese state-owned line, French carrier CMA CGM and Taiwanese line Evergreen were touted as potential bidders. However, all parties denied at the time that they were in talks. Subsequently OOCL joined with Cosco, CMA CGM and Evergreen in the Ocean Alliance and saw volumes and revenues improve in the first quarter, year on year. But the gap between the top tier of carriers has widened after a spate of M&A activity in the past two years, leaving OOCL with just a 3.3% global market share, according to Alphaliner data, competing against Maersk Line’s 19% (including Hamburg Sud), MSC’s 14.7%, CMA CGM’s 11.1% and Cosco’s 8.3% share of the container market. Nevertheless, OOCL has done what it can to match its bigger peers and in 2015 placed an order with Samsung Heavy Industries for six 20,000 teu-plus ultra-large container vessels (ULCVs). In the frenzied liner M&A activity – induced by heavy industry losses – Cosco was merged with compatriot state-run China Shipping Container Lines; CMA CGM swallowed up Neptune Orient Lines; Hapag-Lloyd merged with UASC; and Maersk Line is in the process of acquiring Hamburg Sud. OOIL’s shares surged by around 30% in January on expectations of a deal to sell OOCL, which, analyst Drewry suggested, would be a “good buy”, given its long track record of producing above par results, even during industry downturns. COSCO's market share is currently 8.3%; with the addition of OOCL's 3.3%, that will rise to 11.6%, just ahead of CMA CGM’s 11.1% and somewhat behind MSC’s 14.7%. The added share will markedly improve COSCO's standing, particularly when factoring in the pending delivery of six 20,000-TEU plus ultra-large container vessels (ULCVs) that OOCL will bring to the table, which the carrier ordered from Samsung in 2015."

12 Jun 2017

World’s first class developed electronic certificate service “ClassNK e-Certificate” begins operations

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"Leading classification society ClassNK will commence operation of the world’s first comprehensive electronic certificate service for classification and statutory certificates from 15 June 2017. The service, ClassNK e-Certificate, will first be made available to Liberian-flagged vessels on the ClassNK register exclusively. ClassNK e-Certificate is the result of an innovative project aimed at reducing the workload on board and at shore by minimizing potential clerical errors and time-loss associated with paper burden. Based on the standards stipulated in IMO’s GUIDELINES FOR THE USE OF ELECTRONIC CERTIFICATES (FAL.5/Circ.39/Rev.2) released in April 2016, the system enables secure transmission of certificates from ship to shore and vice versa. Most importantly, the system includes an online function to determine the validity of certificates and that they have not been falsified or tampered with. ClassNK began trials on the system in October 2016 in cooperation with the Liberian Registry and shipping companies. In April 2017, the Liberian Registry confirmed that ClassNK e-Certificate met the requirements of the IMO Guidelines, and granted ClassNK authorization as the first Recognized Organization to issue electronic certificates to Liberian-flagged vessels on its behalf. Speaking on the occasion, Tetsuya Hayashi, Director of ClassNK’s Survey Operations Division said: “With the successful completion of operational trials, and authorization from the Liberian Registry, ClassNK has become the world’s first classification society to provide a comprehensive system for electronic certificates. We plan to expand the availability of this innovative service to even more vessels on our register in the near future in order to meet the growing needs of the industry.”"

05 Jun 2017

'Shipping Committed To Green Growth’ Ics To Tell Un Ocean Conference

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The high level United Nations Ocean Conference (5-9 June), organised by the UN General Assembly, opens today in New York. On Tuesday 6 June, the International Chamber of Shipping (ICS) will explain that the global shipping industry is fully committed to the UN Sustainable Development Goal for the protection of the Ocean. ICS says that the decision by President Trump to withdraw the U.S. from the Paris Agreement on climate change will have no impact on the shipping industry’s strong commitment to reducing its CO2 emissions. Speaking at a session on the prevention of ocean acidification, ICS will present some ambitious ‘aspirational objectives’ on CO2 reduction which the industry – responsible for moving about 90% of global trade – wants its regulator to adopt on behalf of the international shipping sector, in the same way that governments under the Paris Agreement, have adopted CO2 reduction commitments on behalf of their national economies. The industry has proposed that the UN International Maritime Organization (IMO) should agree an objective of keeping total CO2 emissions from the shipping sector below 2008 levels and then cut annual total CO2 emissions from the sector by 2050, by a percentage to be agreed by IMO. This is in addition to an existing industry commitment to cut CO2 emissions per tonne of cargo carried one kilometre by 50% by 2050, compared to 2008. ICS Director of Policy, Simon Bennett, will explain to the world’s governments attending the UN Ocean Conference that: “Shipping, because of its great size, is currently responsible for about 2.2% of annual anthropogenic CO2 emissions. According to IMO, shipping has reduced its total CO2 emissions by more than 13% between 2008 and 2012, despite increased maritime trade, but there is a perception that shipping, whose emissions cannot be attributed to individual nations, may have somehow ‘escaped’ the Paris Agreement.” In three weeks’ time, in London, the IMO will open the first of a series of meetings to develop a strategy for further reducing CO2 from ships, in order to match the ambition of the Paris Agreement. The industry has proposed that IMO should adopt some ambitious aspirational objectives on behalf of the international shipping sector as a whole. The shipping industry has made these proposals to the next session of the IMO Marine Environment Protection Committee, which meets in London at the end of June. Throughout the UN Ocean Conference, ICS will also make the case that shipping has an impressive environmental performance and is a driver of ‘green growth’. In addition to reducing CO2, the industry is committed to the implementation in 2020 of the global cap on the sulphur content of marine fuel, at an anticipated collective cost of around US$ 100 billion per annum. ICS will also press for government regulators to give equal priority to each of the three pillars of sustainable development identified by the UN: economic, social and environmental. ICS argues that understanding the importance of economic factors in achieving sustainable development is especially important in view of shipping’s role in the continuing spread of global prosperity and the movement of about 90% of trade in goods, energy and raw materials. Speaking at an IMO side event at the UN in New York, Mr Bennett explained: “The shipping industry is committed to the delivery of further environmental improvements in the interests of sustainable development. But sustainable development requires a global shipping industry that is economically sustainable too.” This message has been presented in a brochure International Shipping: Protecting the Ocean, Committed to CO2 Reduction, which is being distributed at the UN Ocean Conference.

24 May 2017

Centre plans to upgrade ship repairing facilities at 7 ports

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"The Central government has identified ship repairing facilities of seven ports for upgradation into modern units in collaboration with the Cochin Shipyard, a top official said here. “It has been decided at last week’s meeting in Goa that seven ports, which have ship repair facilities that need to be upgraded, should enter into an understanding with Cochin Shipyard Ltd for developing them into a good ship repairing facility,” Union Shipping Ministry Joint Secretary, Sagarmala Wing, Rabindra Kumar Agarwal said here. He said the respective ports and Cochin Shipyard would decide the modalities of development. Pandu (river port) in Assam, Mumbai, Goa, and Kandla are among the identified ports where redevelopment of repairing facilities would be done, Agarwal said on the sidelines of an event organised by Indian Chamber of Commerce. The aim is to have enough such repairing facilities across states, he said, adding that if ships are taken to longer distances for repairing works, it entails additional costs. “There are existing facilities with the ports but their utilisation came down over the years. Since there is space available, it will be easier for us to develop them,” he added. On connecting north eastern states, particularly Mizoram through Myanmar, Agarwal said that it was for this the Kaladan Multimodal Transit Transport Project (KMTTP) in Myanmar was conceptualised. It was being administered by the Ministry of External Affairs with a view to facilitate connectivity between the mainland and the northeastern States of the country through maritime shipping, inland waterways and roads of Myanmar. “The port project at Sittwe in Myanmar, which is being developed by India is almost completed,” Agarwal said. With the development of the route, ships coming from Haldia can go to Switte in Myanmar and from there, they can go to Paletwa (in Myanmar) through Kaladan river. There will be road connectivity from Paletwa to Mizoram, he added."

05 May 2017

British ship, port real culprits: Captain MA Pillai

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"The Directorate General of Shipping claims the investigation into two ships’ collision off the Ennore coast is over and the report will be ready in three weeks, several apprehensions are being raised and fingers are being pointed at some of the lacunae in the process. Captain MA Pillai Captain MA Pillai, a master mariner appointed by Coastal Security Group of Tamil Nadu police to provide maritime domain advice in oil spill investigation, spills the beans and makes some critical observations against BW Maple Captain Sahadevan and Kamarajar Port in an interview with Express. Captain Pillai has 30 years of experience commanding various ships from general cargo vessels to large ore carriers. He has also undergone several stints in senior positions in shore establishments in state-of-the-art container handling facilities. Excerpts... It has been three months, why is it taking so long to book the perpetrators? In places like Strait of Malacca near Singapore, where collisions occur often, the investigation takes just 15 days. The problem here is overlapping of investigating agencies. The investigation is being done by DG Shipping, Kamarjar Port and Tamil Nadu police. There is too much secrecy. Ideally, the Indian coast guard should be in charge. Shouldn’t BW Maple and Kamarajar Port take responsibility? Everyone is giving an impression that Indian vessel MT Dawn Kancheepuram is the perpetrator but, according to me, the real villain is British ship BW Maple and Kamarajar Port. According to my sources, BW Maple is in serious violation of International Regulations for Preventing Collisions at Sea (COLREGS) with respect to safe speed, lookout and taking the wrong action by altering course to port. Kamarajar Port being the custodians of the operations should have a robust Vessel Traffic Management System (VTMS) but the operation has been outsourced. The person posted there does not have a marine background. Usually, it should be a radio officer or master mariner discharging such a critical responsibility. Can you please shed light on the root cause of the accident? MT Dawn Kancheepuram was approaching from outside the marked channel, awaiting in all probability for BW Maple to exit and then making the entry into the channel. Was this manoeuvre agreed by both the vessels? The evidence is in the Simplified Voyage Data Recorder (S-VDR) as all parameters are automatically and digitally recorded. Rough estimates show BW Maple was sailing at 9 knots in the restricted approaches of Kamarajar Port, which is excessive and compromises on manoeuvrability. In any other Western nation, Captain Sahadevan and two pilots would have been arrested immediately for seriously deviating from International Safety Management (ISM) code, which includes the captain’s totally unseamanlike action of immediately disengaging from MT Dawn Kancheepuram after its bulbous bow crashed into the fully laden oil tanker. (The New Indian Express)"

05 May 2017

"MoUs Worth Rs 2 Lakh Crores Signed in the India Integrated Transport & Logistics Summit "

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"Thirty-four MoUs amounting to about Rs 2 lakh crores were signed in the three day India Integrated Transport and Logistics Summit that was concluded in New Delhi today. These MoUs were in the areas of port connectivity, Integrated Check Posts (ICP) in the states of Bihar, Uttarakhand, Uttar Pradesh, West Bengal, Manipur, access to land port in Tripura, Assam and Mizoram, development of Logistics Parks in Telengana, Andhra Pradesh, Karnataka, Madhya Pradesh, Assam, Gujarat, Mizoram, development and furthering of multi modal logistics parks in Mumbai and Bengaluru and Haryana, exploring investment opportunities in logistics sector, dredging of inland waterways, implementation of 79 port connectivity projects under Sagarmala, development of port roads to Chennai and Vishakhapatnam ports, and connectivity to airport in Navi Mumbai, among others. Some of these MoUs are between Government agencies while others are between Government to Business and Business to Business. The Summit was attended by around 3000 delegates from India and abroad, which included central and state government organizations , international organizations like World Bank and ADB, delegates, global transport and supply chain experts and representatives of private companies. The sessions focused on six major themes that included Multi Modal Logistics Parks, New developments in Urban Transportation, Freight Corridors for Economic Development, Supply Chain Transformation- Storage Innovations, GST and Role of Digitization for Decongestion and Standards and Skills for Logistics. Fifty speakers from across the globe shared their views, expertise and experience about developing the logistics and integrated multi modal transport sector in India. Speaking at the concluding session of the summit, the Minister of Road Transport & Highways and Shipping Shri Nitin Gadkari said that there is an urgent need to bring down logistics cost in the country to globally comparable rates if we hope to achieve double digit growth figures and ensure the welfare of the weakest sections of society. Shri Gadkari said that the summit is a very welcome, first step towards realizing this objective. The participation of both Government and private sector has been very encouraging, he said, and even states from the North East have come forward to sign MoUs. He said the suggestions of all stakeholders will be considered and a road map will be drawn for progress along these lines. The Rajasthan Chief Minister Vasundhara Raje spoke about the ongoing developments in the transport and logistics sector in her state and welcomed the steps being taken to develop multi modal integrated transport in the country. She said Rajasthan has the highest length of National Highways in the country. Six economic corridors pass through the state. The state has close proximity to the prosperous northern and western regions of the country. Air infrastructure in the state is also good with Jaipur, Jodhpur and Udaipur having full fledged airports. She said multi modal integrated transport and logistics would benefit Rajasthan to a great extent. Haryana Chief Minister Shri Manohar Lal Khattar also welcomed the organization of the summit and said Haryana is fully capable and prepared to participate in the upcoming transport and logistics revolution in the country. He said the state has a lot of potential to contribute to the growth of warehousing and supply chain logistics. He also informed that the state is working in a big way to enhance and modernize its transport and warehousing network. The Ministry also gave away awards to the winners of a contest for designing solar toll plazas."

04 May 2017

Shri Nitin Gadkari inaugurates India Integrated Transport and Logistics Summit

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"Road, Rail, Aviation and Shipping Sectors Come Together to Deliberate on Integrated Multi-Modal Transport Planning Food, Revenue, Commerce, Skill Development and Other Stakeholder Sectors Also Participate Integrated Multi-Modal Transport Planning Critical for Bringing Down Logistics Cost and Ensuring a Sustainable and Balanced Economic Growth The Minister of Road Transport and Highways Shri Nitin Gadkari inaugurated the three day India Integrated Transport and Logistics Summit (IITLS) organized by the Ministry of Road Transport and Highways in New Delhi today. Speaking on the occasion, he said that “Antyodaya” or the welfare of the weakest person in society is the foremost aim of this Government. To achieve this aim it is necessary to boost economic growth in the country. From the present GDP of around 7.5 percent we need to achieve double digit growth figures. Shri Gadkari said that for India, one of the major impediments to such growth is our high logistics cost. If our economy is to flourish and if we want to ensure sustainable and balanced growth in the country, we urgently need to reduce our logistics cost to globally comparable rates. The Minister further said that our high logistics costs are a result of the various modes of transport growing and developing in silos, in an un-integrated manner. Integrated, multi modal transport planning will help us to achieve a healthy modal mix of transport, which is efficient, faster, safer, import substituting, cost effective and pollution free. He also said that the logistics and transport sector has a very high potential for employment generation. It can provide jobs to the local youth after proper skill training. It can also provide employment opportunities in rural areas. The IITLS has been organized with the objective of facilitating constructive dialogue between various stakeholders for the development of multimodal infrastructure in the country. For the first time, the Ministries of Road Transport & Highways, Shipping, Civil Aviation, Railways, Consumer Affairs, Food and Public Distribution, Skill Development, Commerce, Urban Development, Finance, various state governments and industry and infrastructure experts are getting together to deliberate on various connected issue and discuss the modalities for bringing about a transformation of the logistics and transportation scenario in India. This is urgently required to improve logistics costs in India. Currently India has a very poor Logistics Performance Index due to an unfavourable modal mix of transport and a lack of seamless intermodal connectivity. In his address the Minister for Civil Aviation Shri P Ashok Gajpathi Raju said that India has witnessed explosive growth of air traffic and infrastructure in the last two to three years. He said that the Air Cargo industry is expected to register around 9% growth in the next few years. Given the circumstances, the coming up of logistics parks in the country will be very useful. The Minister for Consumer Affairs, Food and Public Distribution Shri Ram Vilas Paswan in his address said that there is an impressive growth in Road, Waterways, Air and Rail sector. He said that procurement, storage and distribution of agricultural produce need proper and efficient logistics system to plug leakages, avoid rotting of grains and other perishable items and timely transport of the produce to the market . He said that there is a need to develop a National Common Market. He said connectivity between rail, road and waterways are required, so that farmers can take their produce to market in time and get better price. Welcoming the efforts being put into the development of an integrated transport and logistics system the Minister for Railways Shri Suresh Prabhu said that there is an urgent need to integrate all transport systems. He said that with implementation of GST, trade and business will grow with much faster rate. While fiscal barriers to the movement of goods have been done away with, the physical barriers also need to be removed. The Minister said that the various transport sectors like railways, aviation, roads and shipping are seeing a lot of growth and development in the recent years. The railways have greatly enhanced their investment, and decongestion and electrification of routes are being done on a war footing. Efficiency of freight terminals is being improved, and three more dedicated freight corridors have been planned. He also said that port rail connectivity is also becoming better and more efficient with the Sagarmala programme. He added that to make transport systems in the country truly efficient we need to focus on integrated, seamless, multi-modal growth. The Minister for Skill Development Shri Rajiv Pratap Rudy said with all infrastructure and logistics development the need to develop skills of man power is also required. The employment seeker will need proper training for this area. He said that with the transport and logistics sector poised for a makeover, a lot of new jobs are likely to become available. He emphasized the need to train the youth to make the best of these upcoming opportunities. The Minister of State for Road Transport & Highways and Shipping Shri Pon Radhakrishnan proposed a vote of thanks. Earlier during the session the Minister for State for Road Transport & Highways and Shipping and Chemical & Fertilizers Shri Mansukh L. Mandaviya welcomed the delegates. Speaking on the occasion Shri Mandaviya stressed upon the need for an integrated approach for development of multi modal transport. He said the government is also working for alternatives for cargo movement from road to inland waterway and rail. He said the mission of the government is to bring down carbon emission to 10 percent. The Chairman and Chief Executive officer of DP World, H.E. Sultan Bin Sulayam also addressed the summit. Shri Sulayam said that due to lack of proper storage, nearly 10,000 tonnes of fruit and vegetables get wasted in India. If proper planning is done and proper storage facility and logistic infrastructure made available, this wastage could be stopped. He said India has huge potentials and opportunity to unlock. An MoU was signed between DP World and National Investment Infrastructure Fund (NIIF) to develop projects spanning the port and logistics sectors including opportunities under the Sagarmala initiative, the Dedicated Freight Corridors and Logistics infrastructure aimed at reducing agriculture produce losses. The inaugural session was followed by the plenary session. The session was addressed by Secretary Shipping Shri Rajive Kumar, Chairman Railway Board Shri A.K.Mittal, Commerce Secretary Smt Rita Teoatia, Secretary Civil Aviation Shri Rajive Nayan Choubey , Secretary DIPP Shri Ramesh Abhishek, Secretary Food and Public Distribution Smt Preeti Sudan and Secretary Road Transport & Highways Shri Sanjay Mitra. The secretaries all welcomed the step to organize the seminar and flagged issues relevant to their ministries. The IITLS is envisaged as a platform for all stakeholders in transport and logistics sectors to come together and initiate collaborative partnerships to realize the various greenfield and brownfield opportunities in logistic parks, freight corridors and IT solutions. The Ministry of Road Transport and Highways (MoRTH) had undertaken a study, called the Logistics Efficiency Enhancement Programme (LEEP), which has identified four key solution themes to improve the state of logistics in India. These are, freight corridor upgradation, logistics park development, seamless interstate movement and electronic toll collection systems. Taken together, these initiatives are expected to reduce India's logistics costs and bring them closer to the accepted global benchmarks from the current high levels of 13-14% of GDP. The Ministry plans to develop 35 Multimodal Logistics Parks (MMLPs) in India which will, cater to 50% of the freight movement, enable -10% reduction in transportation costs and -12% reduction in C02 emissions. Land parcels have been identified and pre-feasibility studies initiated on six of these locations. The government is also working to formulate a uniform policy for the development of MMLPs. "

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