News Bulletin – 8th September 2018

1. China Is the World’s Leading Maritime Nation

7 September 2018 : China is the top international shipping nation according to a new report presented by DNV GL and Menon Economics at SMM trade fair in Hamburg on September 5.

The study, entitled “The Leading Maritime Nations of the World”, benchmarks the 30 leading maritime nations around the world in four key maritime pillars: shipping, finance and law, maritime technology and ports & logistics, in an attempt to understand the key drivers behind national maritime success.

The new report follows up the 2017 report by Menon and DNV GL on the “Leading Maritime Capitals of the World” but shifts the focus to an extensive review of the maritime industry at the national level.

The 2018 report ranks China as the world’s leading maritime nation, due to its top four ranking in all of the maritime pillars. China’s position is particularly strong on the ports and logistics pillar, with the world’s largest container and bulk ports.

2. Greek seamen strike over collective wage agreement, labour rights.

4 Sep 2018 : Greek ships remained docked at the country’s ports on Monday as seamen went on strike to demand the restoration of wages and labour rights, following the expiry of Greece’s third bailout programme last month.

The 24-hour strike was organised by Greece’s seamen federation (PNO), which said in a statement that negotiations with the sector’s employers over a new collective agreement that would include wage increases did not bear fruit.

After eight years of austerity prescribed by the country’s international lenders, the European Union and the International Monetary Fund, the left-led government has pledged to reverse unpopular labour reforms and increase the minimum wage

Traffic was very slow at Piraeus port on Monday morning. Shipping companies were forced to reschedule many trips. Passenger traffic at ports and airports picks up during the summer, the top tourism season for the Mediterranean country. Nearly 32 million tourists were expected to visit Greece this year, according to tourism industry officials.

Marine unions have strongly resisted wage cuts and reforms liberalising the shipping sector, which along with tourism is a pivotal industry for Greece, a country of seafarers.

3. Largest VLCC Growth in Decades a Major “Roadblock” in the Tanker Market’s Long-Term Recovery.

4 September 2018 : A few rays of hope can be found in the upcoming prospects of the tanker market, such as the positive impact of the coming 2020 low-sulphur marine fuel rule, which is expected to create new and lucrative trade routes. However, overall, long-term tanker earnings are predicted to be tempered by an overwhelming tonnage oversupply, as a result of heavy newbuilding ordering activity. In its latest analysis, shipbroker Charles R. Weber commented that “this month, for the first time since December 2015, all three crude tanker size classes have seen average earnings exceed levels observed during the same month a year earlier. Examining earnings in this way factors for the high degree of seasonality characteristic to the spot tanker market and thus could potentially mark an important turning point in the economic cycle.

According to CR Weber, “breaking the 32‐month long losing streak did not come easily. In December 2015, the VLCC, Suezmax and Aframax orderbooksstood, respectively, at 17%, 23% and 18% of their existing fleets at the time. As the onslaught of these deliveries continue to be worked through, crude tanker carrying capacity has expanded by 11%. Greater fleet growth levels would likely have been logged, were it not for an unexpected rise in demolition values that, against several months with earnings frequently below OPEX, hastened the exit of a number of older units that would likely have continued to trade otherwise.

VLCCs, for instance, have observed a 478% YTD Y/Y increase in demand to service US crude exports, which factors heavily into an observed 7% YTD Y/Y ton‐mile demand growth. The growth appears to be incremental as well and whereas VLCC ton‐miles contracted by 4% y/y during 1Q18, they grew by 11% y/y during 2Q18 and are poised to observe a 15% y/y rate of growth during 3Q18. The rise of US exports has exerted similar influence on Suezmax and Aframax demand. These classes have observed y/y demand gains in the USG region of 254% and 80%, respectively”.

4. Chennai port creates history by berthing giant ship.

3 September 2018 : Chennai port (ChPT) has became the first major port to handle a very large crude carrier (VLCC) inside the port basin. All other major ports, including Chennai, have so far handled such ships outside port basin considering the vessel size and difficulty in manoeuvring such ships inside the basin.

The VLCC New Diamond with a length of 333 m; beam of 60 m; dead weight tonne of 2.99 lakh and maximum draft of 21.33 m was the largest ship to be handled by the port till date. It is a major achievement for the port in its 137-year history,” said Pon Radhakrishnan, Union Minister of State for Shipping and Finance.

Indian Oil Corporation -Chennai Petroleum Corporation chartered the ship with 1.33 lakh tonne of Basra Light Crude Oil for CPCL Manali Oil Refinery.

Raveendran said this shipment was on a trial, and hoped that the consignee would bring such large ships on a regular basis. CPCL could reduce freight by 20-30 per cent. In future shipments, the ship with full load will first offload the crude at Paradip where IOC has a plant, and after that at Chennai.

5. India’s first luxury cruise line service between Mumbai-Goa to begin from October 1.

27 August 2018 : After much delay, the maiden sail of the country’s first luxury cruise line service between Mumbai and Goa will begin on October 1, Union shipping minister Nitin Gadkari today said. The ministry is investing Rs 1,000 crore to build a cruise terminal in the Mumbai port area on the east coastline of the financial capital. “The first cruise line will set sail from Mumbai on October 1 to Goa,” Gadkari told reporters at the JNPT near here.

Earlier the minister had said the cruise line services between Mumbai and Goa will begin by August which was then delayed to December. Gadkari had said earlier, the country receives around 80 cruise liners now but the government want to attract more than times of that at 950 over next five years. To achieve this he is planning to build a cruise terminal along the eastern water front of the megapolis at an investment of around Rs 1,000 crore.

6. India: Cargo movement faces difficulties.

27 August 2018 : The Nepal-bound containers that are shipped from the Kolkata Port, in India, have been facing a number of problems at the Indian port. Delay in clearance, lengthy documentation procedures and a lack of timely availability of rakes are the key problems identified by Nepali traders that has made trading costs significantly high. The Kolkata Port receives around 400-600 Nepal-bound containers every week. Of these, only around 335 containers arrive at the Dry Port in Sirsiya, Birgunj. This delay in movement of Nepal-bound containers has been compelling importers to pay demurrage charges, which has pushed logistics costs.

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