HMM OPTS FOR 2M SLOTS ONLY

Hyundai Merchant Marine (HMM) is entering into a “strategic co-operation” with Maersk Line and Mediterranean Shipping Company (MSC), that is said to involve a combination of slot exchanges and slot purchases between the three parties.

In a statement posted on the South Korean carrier’s Website on December 11, the agreement was noted to be “outside the scope of 2M vessel-sharing agreement” between Maersk and MSC.

“However, [it] will benefit the 2M network and provide new opportunities, not least in the trans-Pacific trade,” states HMM.

“The agreement is scheduled to begin in April 2017 subject to regulatory approval. The initial term of the co-operation is three years and covers key east-west trades.”

Maersk and MSC are also expected to assume various charters and operation of vessels currently chartered to HMM.

Having signed a memorandum of understanding with 2M earlier in the year, HMM had until even recently disputed speculation that it was not intending to become a fully-fledged member of the alliance.

It is understood that joining an alliance with major carriers was a condition of a debt restructuring deal struck between HMM and creditors earlier in the year. Main creditor, the state-backed Korea Development Bank, has reportedly said it has not yet decided its position on the agreement but was looking at it “in a positive light”.

SHIPPERS CITE OVERCAPACITY IN NEGOTIATIONS

United States shippers are reportedly resisting carrier moves to restore rates on the trans-Pacific (Asia-North America) tradelane, given a largely unchanged overcapacity situation in global container shipping.

With the most influential shippers in the tradelane currently paying eastbound 40-foot container rates of US$750 to the West Coast and US$1400 to the East Coast, carriers are understood to be seeking respective increases to US$1500 and US$2800.

However, overseas commentators have observed that unless the pace of vessel scrapping significantly ramps up, “the fundamental truth is that the vessels are still there”, thereby maintaining the shippers’ upper hand.

It has also been noted that carriers continue to be their own worst enemies, as evidenced in the aftermath of Hanjin Shipping’s demise, whereby increased capacity was promptly deployed in the busiest eastbound Pacific routes. Despite Hanjin providing about 7% of capacity in the tradelane, its demise consequently caused “hardly a blip” in freight rates.

However, it is not all plain sailing for shippers, with expected further carrier failures and overall consolidation lessening options. This has had the impact of prompting shippers to ensure alignment with carriers that suit their networks and are stable/have secure partners, as well as deliberately forging new carrier relationships in order to mitigate risk.

TAIC REPORTS ON ARATERE PROPELLER LOSS

A sub-optimal fit, vibration, corrosion and the uneven thrust produced by differently-pitched blades all contributed to the “fretting” which saw the Interislander ferry Aratere ultimately lose its starboard propeller shaft in Cook Strait in November 2013.

Such were the key findings of an investigation by the Transport Accident Investigation Commission (TAIC), which recommended parent company KiwiRail improve its process documentation for both the fitting of new propellers as well as on the final fit achieved.

The TAIC also urged Standards New Zealand to forward the report to the International Organization for Standardization, so as to establish if current standards for manufacturing large-diameter marine propellers are appropriate for modern, high-efficiency propellers operating closer to cavitation margins.

In response, KiwiRail group general manager Todd Moyle acknowledged the “valuable” recommendations made about the standard for advanced propeller manufacture and confirmed the Interislander had already improved document management processes.

However, having undertaken its own “extensive investigation”, KiwiRail did not accept an additional TAIC viewpoint that it had not followed manufacturer advice on the best means of fitting the propellers and therefore had potential contributed to the failure, he says.

“The proposed method of fitting the propellers was impractical because of the very long shaft fitted,” says Mr Moyle.

“The method we did use to fit the propellers was discussed with the manufacturer, who accepted it as an alternative.”

Mr Moyle adds that control of the Aratere was never lost during the incident — “and at no point were passengers or the vessel at any risk”.

RTF WELCOMES VDAM RULE

Road Transport Forum chief executive Ken Shirley has heralded the new Vehicle Dimensions and Mass (VDAM) rule as representing an “evolution rather than a revolution in heavy vehicle regulation”.

Specific VDAM changes include:

  • redefining width restrictions to enable more vehicles to operate at the 2.55-metre limit
  • increasing the general access gross mass limits from 44 tonnes to 45 and 46 tonnes, depending on vehicle configuration
  • increasing axle mass limits for various axle configurations

“The new rule is based on sound principles of having vehicles that suitably fit New Zealand’s roading network,” says Mr Shirley.

“While there will be some productivity gains out of the new mass and dimension limits priority has been given to road safety considerations, which is entirely appropriate.

“The slightly larger dimensions will allow transport operators to purchase the most modern, top-of-the-line equipment from overseas, therefore improving the vehicle technology and overall safety of New Zealand’s truck fleet.”

Furthermore, Mr Shirley says the new rule has consolidated and simplified what has historically been a very complex and confusing set of rules.

He notes that heavy vehicle drivers will need to be aware of axle spacings when carrying near the load limit and be mindful that external lashings must exist within the 2.55-metre width limit.

However, Mr Shirley’s one disappointment in the new rule was the decision to include a reduction in weight tolerance from 1500 kilograms down to 500 kilograms, which he says “will add considerable stress to freight loading and allows little margin for error.”

Thank you!

Thank you so much for your support in 2016.  It has been a pretty tough year in many respects.  Our system change mid year added a lot of workload to our already busy team.  And then the Kaikoura earthquake on 14 November basically doubled our workload overnight.

My awesome team of Andrea, Chrissy, Florence, Kalene, Mike and Neil, ably supported by our Mt Maunganui accounts team of Nicola and Cheryl, have really put in a huge amount of effort to keep NZ’s most important freight moving, while at the same time coping with a complete back office change.

It was great to have Mike Catty back with us for part of this year for his third stint at Cubic.  He did an amazing job with our new system implementation.  We were sorry to lose Jenna this year but we’re glad she’s enjoying her temporary “retirement” on her beautiful lifestyle property near Christchurch.

Thank you for your understanding of the necessity for the rate realignment process we are currently working through.  The sudden changes in cost structure on many routes has been an additional challenge at an already busy time of year.

Over the festive season Cubic will be staffed from 0800 to 1700 on every day apart from the statutory holidays.  Most of our team are working through.

On behalf of our team, best wishes to you, your teams, and your families for a safe and happy festive season.  See you on the other side.

Cheers

Dave

Strike notice received from LPC

We have received the following notification from Simon Munt at LPC.

 

This is a further update about strike action which the members of the Maritime Union of New Zealand (MUNZ) intend taking at Lyttelton Port.

Unfortunately the discussions LPC had with the Union Thursday 22nd December have not resulted in progress towards a settlement.

We have received another strike notice from MUNZ. This is for the weekend of Saturday 7 January and Sunday 8 January.

As you are aware, MUNZ has already issued a strike notice for the weekend of 31 December/1 January.

Contingency plans are in place to manage container shipping over the two weekends when strikes will occur and, as we have previously advised, no other Lyttelton Port services will be affected by the strike action.

We are disappointed to receive the strike notices, as LPC remains committed to negotiation and potential settlement.

We appreciate your patience and ongoing support during this time. We will continue to keep you updated.