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Month: March 2018

Shipping Fears Trade War Escalation as China Hits Back at Trump’s Tariffs

Image Courtesy: Pixabay

The trade war between China and the United States is brewing with China announcing plans to impose duties on U.S. goods worth USD 3 billion.

The move is being taken as a response to the Donald Trump’s new duties on Chinese goods worth USD 60 billion.

Trump said the U.S. was resorting to the Section 301 action, after an investigation launched in August 2017 into China’s laws and policies found that China employs “unreasonable or discriminatory practices that burden or restrict U.S. commerce, and violate intellectual property rights.”

Trump added that talks with China are ongoing together with the EU and NAFTA deal.

Impact on the shipping industry

The latest restrictions come as new tariffs on steel and aluminum are set to enter into force in the United States.

On March 1, the U.S. President announced a plan to boost domestic manufacturing by imposing tariffs of 25 pct on imported steel and 10 pct on imported aluminum.

Even though Europe managed to dodge the tariffs, European shipping community, and the maritime industry, in general, is worried what the latest trade restrictions would mean for shipping.

“There is an urgent need for new diplomatic efforts to prevent an escalation,” says Danish Shipping, commenting on the latest trade tensions between the two countries.

The United States and China are the two largest markets for the Danish shipping sector with annual total exports amounting to DKK 38.5 billion. The two countries constitute approximately 23 pct. of the Danish shipping companies’ total export activity.

The organization, which represents the interests of the shipping industry in the country, said the new duties and countermeasures were concerning for the sector.

“A trade war between the Danish shipping companies’ two largest markets is deeply worrying. The shipping industry is among Denmark’s most globalized industries and therefore entirely dependent on continued open world trade,” Jacob K. Clasen, Executive Director at Danish Shipping, said.

Clasen called on the world’s major trading blocks to strengthen dialogue and diplomacy in order to prevent any further escalation of the conflict.

“Trade between China and the USA accounts for roughly 4 percent of global trade, so a dispute between the two countries will harm trade patterns globally. In addition, increased tariffs will send a very wrong signal to the world that more market restrictions may be a plausible way forward. This is the wrong way to go and will ultimately harm consumers all over the world,” he added.

“All parties – the EU, the US and China – must look for solutions through dialogue and do everything possible to avoid a harmful trade war. It is crucial that all parties make every effort to avoid an escalation of the conflict.”

BIMCO’s Chief Analyst Peter Sand said that should the tensions escalate on a larger scale there would lasting consequences for everyone involved in global industries like shipping.

“All trade-restrictive measures are in principle bad for shipping,” Sand said.

“Overall we are seeing more trade-restrictive measures introduced. Some more high profile than others. This is a worrying trend that limits demand for shipping globally.”

Impact on the U.S.

President of the U.S. retail federation Matthew Shay said the administration’s plans to impose broad tariffs on consumer products from China would punish ordinary Americans for China’s violations.

“Middle and working-class Americans are just starting to see the benefits of tax reform in the form of bigger paychecks and higher wages. Engaging in a trade war will erase those gains and result in higher prices for a wide range of consumer products and basic household goods. And the tariffs will create uncertainty for retailers and other businesses who are prepared to reinvest savings from the tax cut in capital investments, wage increases, workforce training and new jobs in communities across the country. “

The U.S. ports, including Port Houston, Port of New Orleans and the Northwest Seaport Alliance, also expressed concern about the impact of the steel and aluminum tariffs, stressing that they would negatively affect the amount of cargo being handled by the ports.

World Maritime News Staff

Enhancing Maritime Security

With 90 percent of the world’s trade carried by sea, maritime security is a key lever of the global economy. “No shipping, no shopping,” is how Africa Center Adjunct Professor Ian Ralby sums it up. “If we don’t secure the maritime domain, our entire way of life will change.”

The Seychelles, a 115-island archipelago in the Indian Ocean, has been at the vanguard of protecting the maritime domain and prosecuting maritime crimes, not only in its territorial waters, but along much of Africa’s east coast. Since 2010 when the first trial of 11 pirates was staged in Victoria, Seychelles has mounted 17 trials and processed a total of 142 pirates, the largest number of pirates tried by any nation in the region.

Seychelles locationFrom March 19–23, the Africa Center for Strategic Studies held the latest in its long series of maritime security programs, Enhancing Maritime Security, in the Seychelles to see firsthand the country’s approach to combatting criminality on the seas and discussing common challenges and lessons learned. More than 50 maritime security officials from 34 countries and regional organizations attended.

Participants highlighted the value of a whole-of-Africa maritime dialogue; the importance of keeping pace with the dynamic nature of maritime crime beyond piracy; the challenge of legal finish (successful prosecution, conviction, and detention) to deter these crimes; and the importance of the blue economy as an economic growth engine not just for littoral states, but landlocked ones as well who must rely on their coastal neighbors for shipping and trade.

Relatedly, participants recognized that African states have a challenge with maritime wealth blindness in addition to overall marine domain awareness but were greatly inspired by Seychellois’ efforts to adopt innovative approaches on both fronts.

After his keynote address on adjudicating and penalizing maritime crimes, Judge Anthony Fernando, who serves on the Seychelles Court of Appeals and has presided over 66 maritime cases, led participants on a tour of the main courthouse and piracy court. He was joined by Supreme Court Chief Justice Mathilda Twomey and President of the Court of Appeals Francis MacGregor, who explained how cases are processed through the court system.

Program participants also had the opportunity to visit an Iranian dhow captured by the Seychelles Coast Guard in the largest ever drug seizure in the country’s territorial waters. Officials at the Regional Center for Operations Coordination—an information-sharing union including the Seychelles, Comoros, Réunion (France), Madagascar, and Mauritius—explained how cooperative operations and technology have improved the region’s ability to track criminal vessels in the Indian Ocean.

In addition, Philippe Michaud, senior fisheries advisor to the Seychelles’ vice president, gave a presentation on illegal, unreported, and unregulated fishing. Other program sessions discussed maritime security initiatives around Africa, legal harmonization, and current best practices in prosecuting maritime crimes.
Source: African Center for Strategic Studies

SMM 2018: Green Shipping Makes Headway

The countdown is on: The new 0.5 per cent sulphur limit for ship fuels will take effect on 1 January 2020. “There is no turning back. The lower sulphur limit will have a significant positive impact on the environment and on human health, especially for people living in port cities and coastal regions,” said IMO Secretary-General Kitack Lim on occasion of the meeting of the IMO’s Sub-committee on Pollution Prevention and Response in early February. LNG is one possible way to comply with this regulation: According to the SMM Maritime Industry Report (MIR), as many as 44 per cent of shipowners are considering liquefied natural gas propulsion for their newbuilds. At SMM 2018, the leading international maritime trade fair in Hamburg, industry stakeholders will be able to discuss other compliance options, as well.

LNG a clean alternative

Around the world shipowners are facing the challenge of having to make far-reaching decisions: Will low-sulphur fuel be available in sufficient quantities at reasonable prices? Are exhaust gas scrubbers a smart investment? Or would it be better to opt for LNG right away? Questions like these will be discussed at the Global Maritime Environmental Congress (gmec) which is held on 5 September as part of the SMM conference programme. Speakers such as Katharine Palmer, Global Sustainability Manager at the classification society Lloyd’s Register, will advise the industry on how to best comply with current regulations and prepare for future ones. In exhibition hall A5, which will be dedicated to the Green Propulsion theme with a special focus on LNG, decision-makers will be able to meet up with experts to get advice and study technical solutions hands-on.

As for ballast water management (BWM), the IMO is granting shipowners a transitional period before they must comply fully. Meanwhile the industry is working full speed on implementing the BWM Convention which took effect in 2017. This necessitates investments in the order of billions. In a study of the global ballast water management market between now and the year 2026, the US market research firm Stratistics MRC forecasts a growth rate of nearly 40 per cent – per year.

Understanding which types of BWM system are suitable for a specific ship type, and which of these systems meet both the IMO rules and the stricter requirements of the US Coast Guard is challenging. A gmec expert panel including Debra DiCianna of the US consulting firm Choice Ballast Systems, Tim Wilkins, Environment Director at Intertanko, the International Association of Independent Tanker Owners, Stamatis Fradelos, Principal Engineer, Operational Environmental Performance (OEP) Team, ABS and others will provide valuable insights. SMM visitors will be able to familiarise themselves first-hand with the technologies offered by relevant manufacturers from around the world. “Numerous manufacturers are reporting record numbers of incoming orders,” says Claus Ulrich Selbach, Business Unit Director – Maritime and Technology Fairs & Exhibitions at Hamburg Messe und Congress GmbH.

This year’s fair will again feature various theme-based routes to help visitors find the exhibition highlights they are looking for. “We have added a Cruise & Ferry Route to our programme,” says Selbach. “From the engine room to the bridge through to passenger cabins, this route spreads out the entire value chain before our visitors.”

Cruise industry: Pioneering sustainability

When it comes to eco-friendly ship operation, the cruise industry is one step ahead of most other shipping segments, not only in response to increased environmental awareness among passengers but also because the many highly sensitive waters visited by these ships must be protected. It is the segment’s explicit goal to minimise the effects of every trip on the marine environment and on coastal regions. Here again, LNG ship fuel plays a key role. For example, AIDA Cruises ordered their third LNG-ready cruise vessel from Meyer Werft just a few weeks ago. The Japanese NGO Peace Boat’s Ecoship concept likewise favours LNG power. Apart from its dual-fuel engine, the vessel will feature ten retractable, rigid sails doubling as photovoltaic panels as well as wind turbines, and an additional 6,000 square metres of on-deck solar panels. Further information on what may will be the ‘greenest’ cruise ship yet will be available in Hall A5.

Under the chairmanship of Andreas Chrysostomou, acting Secretary General of the European chapter of CLIA, the Cruise Lines International Association, a gmec expert panel will focus on the cruise industry’s pioneering role in environment protection. The panel will include Bud Darr, Executive Vice President, Maritime Policy and Government Affairs at MSC Cruises; Lex Nijsen, Vice President and Head of Four-Stroke Marine, MAN Diesel & Turbo; Rolf Sandvik, CEO, The Fjords and Jan-Erik Rasanen, Head of New Technologies at the Finnish engineering firm Foreship, among other experts.

This year’s gmec conference will take place on 5 September. The conference team will again be supported by its cooperation partner Seatrade. “Once again we have been able to recruit some top-level experts from all around the world for SMM,” says Mary Bond, Managing Director Publishing and Content at Seatrade. “Attendees can expect a series of fascinating discussions and an array of innovative solutions that will make shipping cleaner step by step.”
Source: SMM

Tourism operator calls for shipping suspension

A Marlborough Sounds eco tourism operator wants to see all shipping stopped in the Tory Channel, which he says is at increased risk of a large-scale disaster.

The Tory Channel.

The Tory Channel. Photo: RNZ / Tracy Neal

Peter Beech is among thousands of submitters to a Marlborough District Council review of how it might manage its land, sea and air environments.

The council is well underway with a year-long process to update its environment plan. It aims to merge the region’s policy statement and two separate resource management plans into a single resource management document for the district.

It has been billed as the biggest environmental package for Marlborough in a decade and a direction-setter for the region.

Mr Beech, who has made a submission to the chapter that deals with the district’s coastal future, said Tory Channel is a convenient short-cut for shipping across Cook Strait.

He said it was only luck that a major shipping accident had not happened at the narrow channel entrance, which has been used by the inter-island passenger and freight ferries for decades.

A long-running and ambitious plan to shift the ferry terminal to Clifford Bay in Marlborough – which offered a more direct route to Wellington, was ended by the government in 2013, but with the promise that other options would be considered.

Mr Beech has been an operator of marine eco-tours for many years and is also a long-serving environmental campaigner. He has seen a growing number of leisure boats and fewer people with knowledge of how to drive them in the confined, highly tidal area of Tory Channel.

He is now asking the council to consider shifting the shipping lane to run the length of Queen Charlotte Sound (Totaranui) and around the headland of Arapawa Island, northwest of Tory Channel.

“It’s most definitely safer coming in the northern entrance. It does add a bit of time but it’s so much safer and there’s so much more searoom. It’s a big, wide road.”

The Interislander Ferry at Picton.

The Interislander Ferry at Picton. Photo: RNZ / Tracy Neal

Mr Beech also doubted there was enough scope within Marlborough’s emergency services to cope with a large-scale rescue.

Late last year a multi-agency exercise, which was one of several that have been staged in the Marlborough Sounds, tested the scope of response using the scenario of a fire on a large passenger liner and the evacuation of 3000 passengers.

A report on the exercise said while most tasks were achieved, there were gaps, including not having a plan for managing rough ocean conditions or how to control other vessels arriving to help.

The idea to shift the shipping lane from Tory Channel has pricked up the ears of the Waikawa Boating Club. Commodore Chris Webb says it was true that more boats are now competing for less space.

“We’ve now got five ferries that ply those waterways so there’s almost always one coming or going and Tory Channel is where the Sounds are the narrowest, and there are a number of corners which effectively become blind corners.”

But Mr Webb doubted the idea would gain much traction among operators.

“It would add significantly to the costs and economics of the whole infrastructure of transporting people and freight between the two islands, so it would be a big step.”

Despite several attempts to reach KiwiRail (Interislander) and Bluebridge for comment, neither responded.

Marlborough Mayor John Leggett said submissions like that from Peter Beech opened the council’s eyes to a range of possibilities.

“We’ve seen over the years the ideas that often the idea that gets presented at a public submission process starts to get a bit of traction and people start to think about it. There are some exceptional ideas that have come out of this process.

“Peter (Beech) has been very vocal over the years and has been a great servant in reminding council and groups about their responsibilities, and opening their eyes to other possibilities as well.”

Mr Leggett said the level of public engagement in what was a complex process, was heartening.

Public discussion on Marlborough’s coastal future, which attracted more than 1000 submissions, start next month.

The entire plan review process attracted 1700 submissions.

Government forms intelligent transport group to tap $1.5b opportunity

Transport Minister Phil Twyford has announced formation of a Future Technology Leadership Group saying it will help New Zealand harness some of the $1.5 billion a year estimated value to the economy from Intelligent Transport Systems (ITS) as well as the social benefits they create.

The move follows release by Business NZ of a report commissioned from Deloitte Access Economics, Unlocking commercial opportunities from intelligent transport systems. The report said intelligent transport systems could be a sunrise tech industry for New Zealand, earning up to $1.5 billion a year.

Twyford announced formation of the group at the T-Tech Conference in Auckland on 19 March saying it would develop a 10-year Land Transport Technology Roadmap. He said New Zealand was seen as a world leader in ITS, and the group would bring together the best domestic knowledge, as well as international expertise.

“The Business NZ report focused on three areas – drones, smart logistics and autonomous self-driving vehicles – and found New Zealand has a good regulatory and business environment to benefit from ITS,” he said.

“A good example of how technology can save lives was the NZTA ‘hackathon’ Save One More Life which last weekend saw 120 developers, and tech, engineering and transport experts spend 48 hours designing ways to make our roads safer. This resulted in a new app to improve driving by teenagers and those on restricted licenses, expected to save 55 young lives a year.”

Business NZ said its report was “a call to action for both business and the Government, recognising the enormous potential for developing and manufacturing intelligent transport systems such as self-driving cars and drones in New Zealand.”

The report calls for greater collaboration between the Government and business to unlock innovation and export growth around ITS technology and services, along with data sharing, greater R&D, the upskilling of regulators, and aligning education and skills training with New Zealand’s future needs.

The chair of Business NZ’s Intelligent Transport Systems Advisory Group, David Prentice, said New Zealand was a good location for the new industry because of its growing high tech manufacturing sector, experience in manufacturing niche component parts, and reputation as a test bed for new technologies and world-class connectivity.

ITS products already produced in New Zealand included GPS systems, drones, robotic port cranes, airport baggage handling systems and wireless charging technology, according to Prentice.

He said the report highlighted the potential for New Zealand to respond to global demand and become a first mover in an innovative, high-growth industry that is set to transform transport throughout the world.

“Intelligent transport systems have the potential to significantly improve traffic flows, reduce road congestion, increase logistics productivity, lower transport emissions and improve the safety and efficiency of personal travel.

“Businesses already operating in the tech sector and new businesses looking for growth opportunities should consider the economic and social benefits to be gained from moving into this new area.”

He added: “And the business community wants to continue working with Government to develop policies that will allow an ITS ecosystem to flourish and help business and transport system users address our local transport challenges and compete on the world stage.”

Future Transport Group members

NZ Transport Agency, Ministry of Transport, Auckland Transport, Christchurch City Council, Greater Wellington Regional Council, Google, Machine zone, ITS New Zealand, ITS Australia, Ministry of Education, Local Government NZ, Fulton Hogan, Transport Accident Investigation Commission, Australia New Zealand Driverless Vehicle Initiative (ADVI), Telecom Users Association, Vodafone, KiwiRail, Toyota NZ, HMI Technologies, BECA, UShare, Road Transport Forum, Automobile Association, Westpac, Gladeye, Foodstuffs, Bike Auckland, Chapman Tripp, Uber, GoBus, Datacom, Arup, CISCO, Synapsis, L.E.K. Consulting, Business NZ,.

Port workers vote for another longer strike

Striking Lyttelton Port workers have voted on another even longer round of strike action as the industrial dispute deepens.

Rail and Maritime Transport Union  organiser John Kerr

Rail and Maritime Transport Union organiser John Kerr Photo: RNZ / Alex Harmer

The 200 members of the Rail and Maritime Transport Union are in the midst of a seven day long strike that finishes at midnight on Sunday.

They want to be paid the same as the 200 members of a rival union working at the port.

The port says it is only willing to do this if they agree to work the same flexible hours the rival union has agreed to.

Union spokesperson John Kerr said he was hoping to resume negotiations once members went back to work on Monday.

He said if these were not successful then workers would resume striking for three weeks starting 8 April.

Meanwhile, National’s workplace relations spokesperson Michael Woodhouse has accused the union of thuggish behaviour.

He said Prime Minister Jacinda Ardern should condemn the handing out of pamphlets on the streets where port company directors live.

The pamphlets handed out by port workers on Monday included the names and addresses of directors, and information about the strike.

Mr Woodhouse says they were designed to get people to approach board members directly and put pressure on them.

The workers had been emboldened by the new Labour-led government and should be reminded such bully boy tactics are not acceptable.

He says there is no place for personal attacks and abuse in negotiations over pay and conditions.

LPC’s strike update from 20 March 2018

Strike starts midnight tonight at Lyttelton Port
Strikes will begin at midnight tonight at Lyttelton Port by the Rail and Maritime Union (RMTU). The Union is striking for five days (21 to 25 March inclusive).
However, we now have certainty there will be no strikes at Lyttelton Port the following week – from Monday March 26 to Monday 2 April, inclusive. The Union must give us fourteen days’ notice of strike action and no such notices have been received for any days in that week.

We have made a generous salary increase offer to RMTU members – a workforce which is already well paid. We want to resolve the dispute but we cannot accept the Union’s unreasonable salary increase demands.

At the end of this message we have provided LPC’s Media Statement, issued today, which gives further clarity about our position.

We appreciate your continuing patience during this difficult time. If you have any questions regarding the industrial action place discuss them with your usual LPC contact.

Operations during Strike Period

Berthing Vessels
LPC will be unable to berth any vessels during the strike period. This includes Container, Coal, Bulk, Tankers and any vessel requiring pilot and/or tug assistance.

LCT Operations
The Container Terminal will not be stevedoring any container vessels or coal vessels during the strike period.

The Container Terminal and Empty Container Yard (ECY) will be open for Receival and Delivery of cargo between the hours of 0700 and 1500 Monday – Saturday.

No services will be available on Sunday.

We will be able to continue Reefer Power and Monitoring services at the Terminal.

Train capacity between KiwiRail Container Terminal and Lyttelton Container Terminal will be limited to one train per day. Customers should contact KiwiRail to discuss contingencies.

We will continue to receive cargo with a valid booking number for vessels scheduled to call at Lyttelton. However shippers should consult directly with their shipping lines to determine what contingency plans are in place for export cargo prior to bringing cargo into the Port.

Where port omissions are likely and customers have the ability to hold cargo at their facilities, or at alternate facilities, we would appreciate these options being considered to assist with potential capacity issues at the Port which could result from cargo build up.

Due to the fluid nature of this situation we will continue to monitor our approach to receiving export cargo and keep you updated.

CityDepot and MidlandPort
Neither CityDepot nor MidlandPort will be affected by the strikes. For those customers that use these facilities for full cargo, we are monitoring yard and rail capacity closely and will liaise with you if we start seeing a build-up of cargo. If vessel calls are uncertain, we would ask that cargo is held on site where possible. Train capacity between MidlandPort and LCT will be limited to one train service.


Marketing Manager

Lyttelton Port Company MEDIA STATEMENT


Lyttelton Port Company’s offer of parity with the other major Union at the Port has been refused by the Rail and Maritime Transport Union (RMTU) which will begin striking at midnight tonight. RMTU is striking from 21 to 25 March inclusive.

LPC’s Operations Manager, Paul Monk, says RMTU does not want parity with the other major Union at the Port, the Maritime Union of New Zealand (MUNZ) – it wants an unfair advantage over it.

“RMTU members want the same salary increase their MUNZ colleagues received but without making the roster changes MUNZ accepted a year ago.

“RMTU claims there’s a safety issue associated with the new roster agreed to by their MUNZ colleagues.

“MUNZ members have had no safety issues since they took it on. MUNZ is fine with it.

“The RMTU wants the same money as MUNZ but they don’t want to work the new roster – they don’t want to do equal work.

“We want to stop the enormous disruption the RMTU strikes will have on shipping lines, importers and exporters. For this reason, we have dropped our request for them to make any roster changes. We have offered them a salary rise of 3% a year each year for three years, with no changes to their roster or the way they work.

“We have made a generous offer to what is a well-paid workforce which already receives well above the average Kiwi’s wage.

“That offer is just 1% less than their MUNZ colleagues received. RMTU is hanging out for that extra 1%. They want the extra money without agreeing to the roster changes MUNZ made. This is not parity.

“When the strikes begin at midnight tonight our container wharves will be empty. Shipping is the lifeblood of our region’s trade. Lyttelton Port manages over half the South Island’s container volume. The RMTU strikes will stop the Port’s heartbeat.

“We are committed to resolving the dispute and we remain prepared to reach a settlement with the RMTU but we are faced with a Union that will not budge on any of its demands.”


Reopening of Napier-Wairoa rail delayed after heavy flooding

IMPACT: Damage sustained by the Napier rail line during heavy flooding last week is likely to delay the re-opening of the rail to Wairoa. Photo/Supplied.
IMPACT: Damage sustained by the Napier rail line during heavy flooding last week is likely to delay the re-opening of the rail to Wairoa. Photo/Supplied.

The reopening of the Napier-Wairoa rail line is expected to be delayed after heavy flooding last week left sections of rail “hanging in the air”.

Heavy rain and flash flooding last week damaged parts of the line, including one large wash-out affecting more than 100m of track, along with multiple smaller wash-outs, and debris such as trees on the line.

The impact of the weather event is still being assessed by KiwiRail, but it expects it may delay the re-opening of the Napier-Wairoa line.

Work on reopening the mothballed line had been under way for only 10 days when the rain hit.

Yesterday KiwiRail Group General Manager Network Services Henare Clarke said “for this to happen so soon after we started work is a setback, but we will overcome it”.

“The initial work that was already under way will continue while we assess the latest damage and come up with a plan,” he said.

“Where possible, we will look to combine the rebuild work that had already been programmed with the repairs to damage from last week’s severe weather”.

Parts of the rail line appear to have been shunted out of alignment. Photo/Supplied. Parts of the rail line appear to have been shunted out of alignment. Photo/Supplied.

Work began two days after the Government announced a $5 million contribution toward the line.

The first log train was expected to run on the line by the end of the year. While the damage was expected to impact the reopening, it was not known yet what any delay might be.

“This is a fairly complex process and inspections of the line are continuing, but we expect to have a clearer idea of the repairs needed in the coming week.”

This is not the first delay for the line – it was initially hoped to be opened by October 2017.

Hawke’s Bay Regional transport committee chairman Alan Dick said he did not see the need for an “inordinate” delay – as the funding had been granted, and the need for the rail was increasingly urgent.

“Other than these washouts, it’s been in pretty good condition.

“If the reopening of the line extends beyond the end of this year, it’s putting the whole deal in jeopardy, in my view.”

He also questioned how the washout was able to happen.

It appears when the Esk River broke its banks, the flooding pushed sections of rail out of alignment, or left parts “floating in the air”.

Eskdale resident Chris Geddis spotted a 30m section of Bay View rail which was running along unsupported, as the ballast underneath had been washed away.

A A “wall of water” left this Eskdale section of rail unsupported. PHOTO/CHRIS GEDDIS.

The shingle – meant to be underneath the rail line – was instead strewn over State Highway 5.

In a way it’s kind of funny, there’s supposed to be a wall of wood coming from Wairoa along it, and it was a wall of water that took it out.”

Last week’s deluge also led to the flooding of over 80 homes, and the closure of some roads for several weeks as debris is cleared.

Hawke’s Bay Regional Council had already set aside $5.4m towards the project. A spokesman said KiwiRail were responsible for the maintenance of the line.

LPC strike update 14/3/18


Wednesday 14th March 2018




This is to advise that the Rail and Transport Union (RMTU) has withdrawn its strike notices for this Thursday and Friday (15 – 16 March) at Lyttelton Port as a gesture of ‘goodwill’ as we try to resolve the current dispute.
Unfortunately, due to the late timing of this offer by the Union, there is very little operational activity planned for the Port over these days.
We are also very aware of customer feedback that the Union’s previous withdrawal of strike notices came too late to divert most shipping back to our Port.
As a result, we have today asked RMTU to extend the withdrawal of its strike notices to Tuesday 20 March.

We believe this would genuinely show some goodwill to the exporters and importers of Canterbury and allow for some meaningful shipping to occur. We have offered to pay the RMTU members who will be rostered to work on the days strike notices are withdrawn.


In order for shipping lines to make decisions on calling or omitting Lyttelton Port this weekend we have given the RMTU until 3pm this afternoon to advise us whether they will withdraw strike notices for the extended period we have requested (Thursday 15 March to Tuesday 20 March inclusive).


While we realise this does not resolve the dispute, and uncertainty would remain beyond 20 March, I am sure you will agree the withdrawal of strike notices from the 15th to 20th March would be a positive development.


We have agreed with RMTU’s request for further mediation either Thursday or Friday.


With the withdrawal of strike notices for 15 and 16 March, the Terminal will now be open for continuous Receival and Delivery from midnight Thursday 15 March to 2300 Friday 16 March.


We will advise further once we have a response from the RMTU.






Simon Munt


Marketing Manager


LPC Notices

 | Lyttelton Port Company

T: +64 3 328 8198   E: notices@lpc.co.nz

Shipping into a changing world

The International Shipping Industry still remains the only way to move the majority of minerals, energy products and manufactured goods between the nations of the world.

Indeed it is still estimated that shipping carries 90% of World Physical Trade.

However given the huge changes that have occurred in many countries there is concern that the demand for shipping services may not grow but in fact decline.

As the various conferences that meet annually at this time of year discuss the economics and operational issues of the shipping industry it is concerning that the shipping companies that are publically traded in a few stock markets represent the worst performing sector in those markets.

Furthermore the banks that have historically financed shipping have mostly withdrawn and a few of the remaining German banks are showing billions of dollars of losses and provisions.

Private equity and hedge funds looking to buy these banks are not showing support for shipping but the ability to liquidate the portfolios over the next few years at a profit.

Meanwhile the biggest financiers of shipping today are the huge Chinese Leasing companies which together with the Chinese and Korean Exim banks are financing new ships being built in China and Korea with the objective of keeping freight rates down for the benefit of Chinese and Korean industries that rely on ships for the import of raw materials and export of manufactured goods.

The arrival of the speculative equity and hedge funds at the beginning of this decade changed the way shipping companies had traditionally operated, namely as the service industry to world trade. The security of longterm time charters with major cargo interests whose own credit standing supported the cash flow was discarded in favor of the spot markets enabling the ships to be sold as soon as their values generated a profit.

The longer this speculative period went so the cash flow problems worsened as the spot markets failed to produce constant income while the operating and financing costs continued.

Furthermore the major charterers became reluctant to charter these speculative ships or allow their charters to be included in any sale. This was clear evidence of the importance of the relationships between shipowners and charterers which have always been important given the issues that always exist in operating ships in the oceans of the world.

Shipowners and particularly those that appeared in the equity markets, were encouraged to order new ships in the false belief that the Chinese would continue to pay high freight rates as their manufacturing economy continued to expand.

It took some 5 years for the cargo interests to react to the high freight rates which for instance had caused the shipping cost of a ton of iron ore from Brazil to China to reach 60% of the landed price of the cargo.

The cargo interests understood that by encouraging more newbuildings in both the raw material imports and the finished goods so the freight costs could be minimized. Thus the Chinese have got the shipping cost of iron ore from Brazil down to 10% of the landed price.

The same applies to the container sector with the giant ships pushing rates lower and the owners facing huge operating losses

Add to this the Korean and Chinese Exim bank financing and the involvement of huge Chinese leasing companies and we continue to see the orderbook grow while few shipowners show any profits.

False optimism that “dry bulk markets look positive” or that “the USA exporting crude oil will be good for the VLCC markets” simply encourage new orders for ships and will not improve the operating profits for these sectors.

Thus it is the cargo interests that control the economics of the shipping industry today and ship values will continue to depreciate if they continue to trade in the spot markets.

Consolidation of shipping companies will have no effect unless it enables the shipowners to secure period charters and improve their income streams, fully maintain the ships, employ quality crews and afford the new costs of ballast water treatment and cleaning up the engine exhausts.