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23rd September 2017

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New report examines future of autonomous maritime systems

Maritime activity over the next decade will be dominated by unmanned surface and underwater vessels, according to a report on the future of autonomous maritime systems launched today.

Written and researched by Lloyd’s Register, QinetiQ and the University of Southampton, the report is a follow-up to Global Marine Technology Trends 2030, looking at how technology trends will impact upon the regulatory and social aspects of maritime operations.

Tim Kent, Technical Director, Marine and Offshore, Lloyd’s Register, said: “Networks of autonomous surface and underwater vessels are set to radically change the nature of maritime operations. Developments widely reported in the media, such as those in autonomous shipping, are happening with greater pace than expected as little as 2 years ago. These developments enabled by technology provide new opportunities and potential for disruptive business models. However, the principal challenges will be the integration of these autonomous systems into current maritime operations, legal and regulatory requirements, and not least the impact upon seafarers.”

Bill Biggs, Senior Campaign Leader for Autonomy, QinetiQ, said: “Technological advances in consumer and adjacent markets are a real opportunity for the maritime sector. Applied artificial intelligence, low cost low size sensors, increased connectivity, improved cyber security and better energy management are all likely to drive rapid and disruptive change. Trials already undertaken by navies and transport companies demonstrate the opportunities that autonomous maritime systems present. In 2016 QinetiQ supported Unmanned Warrior, the largest demonstration of its type ever conducted, running as part of a major multinational naval exercise. It’s just one example of the steps the UK is taking to keep up with the accelerating pace of change.”

Professor Ajit Shenoi, Director of the Southampton Marine and Maritime Institute at the University of Southampton, said: “The report recognises that autonomous systems and associated technologies will require people to learn to work seamlessly with them. Crew members of the future may become shore based, managing vessels remotely from the office or the sea, creating the need for new training and skillsets. The potential for the command and control to be geographically displaced from the vessel will also require behavioural and cultural changes within the maritime community.”

David Dingle CBE, Chairman of Maritime UK said: “I’m delighted that this timely and thought-provoking report is being launched during London International Shipping Week, demonstrating the UK’s preeminent role in cutting-edge innovation and thought leadership for our global industry. This thought leadership from three world-leading companies and educational institutions, coupled with exciting developments from leading manufacturers such as Rolls Royce, ASV and a wealth of small and medium size players, mean that the UK, the world’s maritime centre, really is leading the autonomy revolution.”
Source: Lloyd’s Register

Picton pegged for NZ’s largest dry dock

Shakespeare Bay, pictured, is being mooted as the most likely location for a new floating dry dock.

Shakespeare Bay, pictured, is being mooted as the most likely location for a new floating dry dock.

A proposal to build New Zealand’s largest dry dock in Picton could create hundreds of jobs and provide a “massive benefit” for shipping in the country.

Port Marlborough is investigating the feasibility of establishing a floating dry dock in Shakespeare Bay, a deepwater port beside Picton Harbour.

The need for a new facility has been highlighted by the NZ Shipping Federation, whose director says “my guys would like it today, it couldn’t happen soon enough”.

The largest current dry dock, part of the Devonport Naval Base, in Auckland, was the biggest in the Southern Hemisphere when it was built in 1888 but is now too small to service many ships operating in New Zealand waters.

All five Cook Strait ferries, other large commercial boats and the HMNZS Canterbury have to go to navy dry docks in Sydney, or further afield to Singapore, for regular maintenance and repairs.

Shakespeare Bay is already used by the logging industry.

Shakespeare Bay is already used by the logging industry.

However, because the Australian dry dock was a navy operation New Zealand operators could struggle to secure a booking as preference was given to navy ships.

Shipping federation executive director Annabel Young said the fuel cost for the month-long return journey to Singapore was about $500,000.

“Every time you put a vessel into a dry dock you’re looking at millions of dollars of expenditure,” she said.

Installing a floating dry dock in Shakespeare Bay could potentially create hundreds of jobs in Picton.

Installing a floating dry dock in Shakespeare Bay could potentially create hundreds of jobs in Picton.

A Defence Force spokesman said the annual cost of using overseas dry docks was commercially sensitive, but noted transit time was a significant additional cost.

Future ships including the recently-commissioned HMNZS Aotearoa would be too large to be serviced at Devonport, so the Defence Force agreed a new dry dock was needed.

The spokesman said it had partnered with Port Marlborough and the shipping federation to determine the feasibility of a facility at Shakespeare Bay capable of docking ships heavier than 10,000 tonnes and longer than 200 metres.

The Devonport dry dock, built in 1888, can take ships up to 170m in length and 22.5m wide.

The Devonport dry dock, built in 1888, can take ships up to 170m in length and 22.5m wide.

“I think it’s got to the point of critical mass where people can see there’s a really good business case for a dry dock to be set up,” Young said.

The creation of a floating dry dock near Picton would be “absolutely huge” for the local economy but “how many hundreds of jobs it would create, I don’t know”, she said.

“The biggest benefit is you’d become a centre of engineering, all the trades you need to fix a ship, and in addition to that there would be accommodation needs for people that come off the ship.”

What will happen to the boat moorings in Shakespeare Bay?

What will happen to the boat moorings in Shakespeare Bay?

A large floating dry dock in New Zealand would save operators money, reduce carbon emissions, allow for urgent repairs and minimise the time ships, such as the ferries, were out of action, she said.

Young said it would also be used for in-water inspections and cleaning, and stop the need for the Ministry for Primary Industries to turn large ships away if their hulls required cleaning.

She said, ideally, the dry dock would cater for ships up to 240 metres long, adding it would be possible to secure a secondhand floating dry dock for between $60 to $80 million.

The Ovation of the Seas in Shakespeare Bay in January.

The Ovation of the Seas in Shakespeare Bay in January.

Kaikōura MP Stuart Smith said he had been working with the port, the federation and the current and former Minister of Defence over the past two years to advocate for the project.

“The earthquake has highlighted the value of coastal shipping and the blue highway, and a vital part of that is making sure our ships are serviced here,” he said.

Smith said a floating dry dock in Shakespeare Bay made strategic sense, as it was located in the middle of the country and at one end of the Cook Strait ferry route.

A decommissioned navy ship gets water-blasted at the Calliope Dry Dock, part of the Devonport Naval Base, in Auckland. ...

A decommissioned navy ship gets water-blasted at the Calliope Dry Dock, part of the Devonport Naval Base, in Auckland. (File photo)

“Are we there yet? No. But I think it’s got to the point where the business case is so strong and the strategic case is so strong that it will happen,” Smith said.

The Kaikōura MP also pointed to the economic opportunities a dry dock would create for Marlborough, estimating it would create more than 100 jobs, with more in associated service industries.

“It would have a massive benefit for New Zealand, from a strategic and an economic point of view, and at a provincial or local level the economic benefits would be massive,” he said.

A KiwiRail spokesman said the most recent dry docking of an Interislander ferry was in April, when the Kaitaki was sent to Sydney for two-yearly maintenance.

However, the Aratere was sent to Singapore last year, causing the ferry to be out of action for two months due to travel time and time spent in the dry dock.

“Naturally we would like to see a dry dock in New Zealand,” the spokesman said.

“There would be a significant benefit for Interislander and therefore its customers in having a large dry dock capable of accommodating its ships here.”

Port Marlborough chief executive Ian McNabb said the port had been looking at the option of establishing a floating dry dock in Shakespeare Bay for “quite some time”.

“We’ve looked at it for all sorts of reasons, and we’re currently working with a couple of companies in relation to looking at the feasibility of the project,” he said.

Shakespeare Bay was the best option for a floating dry dock because of its central location, and natural depth which meant less, or no dredging would be required, he said.

McNabb said it would have enormous benefits for New Zealand and for Marlborough, in terms of job creation and the ability to conduct more frequent maintenance.

“From a regional point of view there’s all the flow-on effects of having a major industrial facility based in New Zealand and not overseas,” he said.

“If the demand is there, it will happen.”

 – The Marlborough Express

Limited opportunity for lower freight emissions from coastal shipping and rail, says MoT

Coastal shipping and rail have less potential in the drive to reduce carbon emissions. Photo / 123RF

Coastal shipping and rail have less potential in the drive to reduce carbon emissions from the transport sector than the optimistic view expressed in a Productivity Commission issues paper on decarbonising the New Zealand economy, says the Ministry of Transport in a submission to the commission’s inquiry.

“We concur with your assessment that electric vehicles (EVs) are by the far greatest emissions abatement opportunity New Zealand has to lower transport emissions,” says the two-page response to the issues paper sent on September 4 by Joanna Pohau, the ministry’s acting manager, people and environment.

However, the ministry is less optimistic about the potential for coastal shipping and rail to move freight out of road-based trucking, mainly because so much of New Zealand’s freight ‘task’ involves sending goods over short distances and because customers have come to expect ‘just-in-time’ deliveries that ships and trains struggle to fulfil.

“Much of our freight moves over short distances,” the ministry says. “This is a movement that is typically only economic for road freight. As well, some cargo, for example liquid milk, best suits being moved by road” and “not all locations have access to rail and/or coastal shipping.”

The ministry expects that lower emissions from long-haul freight operations will emerge from a combination of some cargoes shifting to shipping and rail, greater collaboration among cargo owners, more fuel efficient trucks, increased use of bio-fuels and, ultimately, “adopting new fuel and vehicle technologies as they arise”.

This could include electric heavy long-haul trucks “if they become available”.

The submission coincides with the announcement of an EV car-sharing scheme in Christchurch that its backers claim is the largest in the Southern hemisphere.

From late November, some 70 of an eventual fleet of 100 EVs will be available for Canterbury businesses and residents through fleet management company Yoogo, which has been selected by Christchurch City Council to implement the services.

The company’s “electric car sharing model breaks down barriers around cost and charging infrastructure, making pure electric vehicles accessible and affordable,” Kirsten Corson, Yoogo general manager, said in a statement.

The service will be available for the CCC, Ara Institute, engineering firms Aurecon and Beca, the Canterbury District Health Board, law firm Chapman Tripp, Environment Canterbury, Meridian Energy, architects Tonkin and Taylor, and Warren and Mahoney, and, Christchurch Airport, as well as for the general public.

In its submission, MoT agrees with the Productivity Commission’s suggestion that “current policy settings may need to be revisited if we are to achieve a widespread uptake of EVs” and endorses setting fuel efficiency standards as one route to achieve that.

Transport Minister Simon Bridges announced late last month that the government was setting a target of one-in-three of the government’s car fleet being EVs by 2021.

Brian Gaynor: Winston Peters’ port plan fails to make grade

One of the more intriguing aspects of the general election campaign is New Zealand First’s policy “to move all container operations from Ports of Auckland to Northport by the end of 2027”.

According to NZ First leader Winston Peters, “the days of the Ports of Auckland as a container port and as a car yard are numbered”.

He went on to say that “New Zealand First will bring forward legislation to move all operations from Auckland to Northport. This will start with vehicles on Captain Cook Wharf ahead of the America’s Cup. Aucklanders want their harbour back while Northlanders want the jobs and opportunities that would come from Northport’s transformation”.

Peters added that this policy “is a cast iron commitment from New Zealand First but it needs New Zealand First to be in a pivotal position to demand it”.

Not surprisingly, Peters hasn’t released any details on the costs of moving Ports of Auckland to Northport.

There are three ports involved in this proposal, directly or indirectly: Ports of Auckland; Port of Tauranga, which is 220km from Auckland; and Northport, which is 144km north of the main Auckland port.


Ports of Auckland (POA) listed on the NZX in October 1993. This followed the sale of 39.8 million shares, or 20 per cent of the company, by the Waikato Regional Council at $1.60 a share. This gave Ports of Auckland a total sharemarket value of $318 million, with the Auckland Regional Services Trust retaining its 80 per cent stake.

In April 2005 Auckland Regional Holdings announced a takeover offer for POA at $8 a share, valuing the company at $848m. This compared with the pre-offer price of $6.44 a share and Grant Samuel’s value of between $7.69 and $8.55 a share.

The $8 a share bid was successful, POA delisted and is now 100 per cent owned by Auckland Council Investments.

POA has been a disappointment under 100 per cent Auckland Council ownership. In the 13 years since 2003-04, its revenue has increased by only 35 per cent, to $222.4m, and net profit after tax by 36 per cent to $60.3m.


Port of Tauranga (POT) was listed in 1992 after issuing 20 million new shares at $1.05 each and the Waikato Regional Council selling all its 12.6 million shares at the same price. After the initial public offering, the company had a sharemarket value of just $80m, based on its $1.05 issue price. The Bay of Plenty Regional Council had a 55.3 per cent holding.

POT, which now has a sharemarket value of $2,960m, has been one of the most successful listed companies over the past 25 years.

For example, since 2003-04 POT’s revenue has increased by 69 per cent to $255.9m, compared with POA’s 35 per cent rise, and POT’s net profit after tax has swelled 148 per cent to $83.4m, compared with POA’s more modest 36 per cent profit increase.


Northland Port also listed on the sharemarket in 1992, shortly after Port of Tauranga. This followed the sale of 10 million shares, representing 24.1 per cent of the company, for $1.25 a share. This gave Northland Port a sharemarket value of $52m at the $1.25 IPO price, just slightly below POT’s listing value.

The Northland company provided ship handling services to the NZ Refining jetty at Marsden Point and at Port Whangarei.

In 2002 the port activities at Marsden Point and Port Whangarei were transferred to Northport, a 50/50 joint venture between Northland Port and Port of Tauranga. NZX-listed Northland Port subsequently changed its name to Marsden Marine Holdings.

Marsden Marine is now an investment company with a 50 per cent stake in Northport, valued at $46.1m, and investment properties valued at $66.4m. These include freehold land, a marina and a commercial complex adjacent to Northport.

Its largest shareholders are Northland Regional Council, with a 53.6 per cent holding, and Ports of Auckland, with 19.9 per cent stake.

Marsden Marine has been a disappointing listed company, with a sharemarket value of only $215m. The company’s directors received $198,000 for the June 2016 year, a large figure for an investment company with few employees.

Chairman Sir John Goulter, who is also chair of the hugely disappointing Metro Performance Glass, received director’s fees of $54,000 for the June 2016 year and an additional $40,000 as chairman of Northport.

The opportunity to rationalise the port sector, and reduce commercial shipping activity at the Auckland port, was missed when Ports of Auckland withdrew from merger talks with Port of Tauranga in March 2007.

The Mount Manganui based port was clearly disappointed and chief executive Mark Cairns had this to say: “The economic and financial modelling demonstrates that the merger would generate significant financial benefits to be shared with customers and shareholders alike.

“The merger would also generate substantial public benefits: reducing CO2 emissions; facilitating better opportunities for coastal shipping; and making a start on the inevitable port rationalisation that needs to occur in New Zealand in the future with the advent of larger, faster container vessels.”

He went on to say: “In a country with a population of approximately 4 million people (similar to Sydney) New Zealand’s tax base simply cannot sustain the funding of high quality road and rail infrastructure connections to all 13 ports.”

The proposed merger between Ports of Auckland and Port of Tauranga made far more sense than the Ports of Auckland/Northport scheme. There are several reasons for this, including:

• The cost of building an extensive road and rail network from Marsden Point to Auckland would be prohibitive and take decades to complete. Coastal shipping could be an alternative, but these ships would continue to use Ports of Auckland

• Northport is small and would need substantial expenditure on its facilities, particularly container handling facilities

• The move from Ports of Auckland to Northport would put huge pressure on the Marsden Point facility. For example, 673 container ships visited Auckland in the June 2017 year compared with only 36 berthing at Northport. In addition, Auckland had 181 vehicle carrier visits while Marsden Point had none in the same 12-month period. Thus, if Ports of Auckland moved its container ship and vehicle carrier operations to Northland, the Marsden Point facility would have to facilitate 854 of these vessel arrivals every year instead of 36 at present

• There is a mismatch between Northport and Ports of Auckland because the former is a bulk port and the latter is predominantly a container port. Northport had export log volumes of 2,808,000 tonnes for the June 2017 year, representing 77 per cent of its total bulk exports, while Ports of Auckland container volumes were 952,331 TEU (one TEU equals one standard 20-foot container).

The obvious solution to the Ports of Auckland issue is the partial privatisation of the company and a listing on the NZX. There are two main reasons for this.

Port of Tauranga and Auckland International Airport have been great performers as listed companies and are paying large dividends to their council shareholders. By contrast, Ports of Auckland has been a disappointment since the Auckland Council acquired its 100 per cent holding.

Under a sharemarket listing, there is a far better chance of a merger, or a joint venture agreement, between Ports of Auckland and Port of Tauranga. This is because local body politicians, who are usually opposed to these commercial agreements, would have a limited influence.

An Auckland/Tauranga agreement could lead to a sharp reduction in commercial ship visits to Auckland and enable Auckland importers and exporters to switch their business to a well governed and well managed port facility at Mount Manganui.

A merger between Ports of Auckland and Northport doesn’t make sense from a commercial or cost point of view.

• Brian Gaynor is an executive director of Milford Asset Management.

Container Ships Lowered Emissions by 2.4% during 2016

BSR’s Clean Cargo Working Group (CCWG) announces the release of its 2016 Global Maritime Trade Lane Emissions Factors report, based on emissions reported by more than 3,200 ships from 22 of the world’s leading ocean container carriers that represent 87 percent of the global ocean container shipping industry by volume. The data show that the industry improved performance of greenhouse gas emissions by 2.4 percent (per TEU-km) from 2015 to 2016, a lower rate of improvement than in previous years.

This highlights that performance continues to improve but demonstrates the critical importance of collaboration and collective action to enable shipping to contribute to global emissions reductions targets. This was also the first year that 100 percent of carriers included in the emissions factors were verified using the CCWG procedure and guidance for verifying CO2 and SOx data.

The Clean Cargo Working Group has also reached a major milestone of 50 corporate members. The group now includes 22 container carriers and 28 of this industry’s largest customers—both global brands and freight forwarders. APL Logistics, CEVA Logistics, EFL, Expeditors International, LF Logistics, Panalpina Management Ltd., Philips Lighting, and SAT Albatros all joined in 2017. The list of all group members can be found here. “Partnerships along the value chain are key to truly conducting business sustainably. In joining CCWG, we join a group of peers dedicated to accelerating sustainability in the container shipping industry,” said Nicola Kimm, Head of Sustainability, Environment, Health & Safety at Philips Lighting, one of the new shippers to join in 2017. “Furthermore, we gain access to reliable and accurate data on individual carrier performance, enabling us to make better informed procurement decisions and drive down carbon emissions of our logistics.”

The group continues to foster environmental performance innovations for the sector, such as a pilot by members Electrolux and Hamburg Sud to reduce pollution in ports. CCWG has also kicked off a materiality assessment to prioritize the most critical social, ethical, and environmental impacts industrywide that will help CCWG to set a vision for 2030 and a three-year agenda. “CCWG provides so much more than relevant, credible data; they are also the forum to work collaboratively with our supply chain and other buyers to make progress toward the Electrolux ‘For the Better’ sustainability framework,” said Tomas Dahlman, Director, Global Energy Strategies for Electrolux. “The group works on several innovative initiatives that enable us and the shipping industry to work more sustainably.”

BSR is a global nonprofit organization that works with its network of more than 250 member companies and other partners to build a just and sustainable world. From its offices in Asia, Europe, and North America, BSR develops sustainable business strategies and solutions through consulting, research, and cross-sector collaboration
Source: BSR

Transport system for a growing New Zealand

National Party media release


Transport system for a growing New Zealand

National is committed to building the infrastructure and transport system New Zealand needs to ensure our ongoing economic prosperity is secured, National Party Transport Spokesperson Simon Bridges says.

“In Auckland, the commercial capital of New Zealand, we are bringing a number of transport projects online. The latest project, the Waterview Tunnel, has transformed the way people and freight move around our biggest city,” Mr Bridges says.

“We know more needs to be done. That’s why National is committed to ensuring Auckland’s transport needs are met.”

National will:

· Declare the $955 million Mill Road project as a State Highway, removing the responsibility from Auckland Council. This will provide funding certainty for this important project through the National Land Transport Fund and free up capital for Auckland Council to reinvest in other high priority transport projects.

· Work with Auckland Council to accelerate the AMETI Eastern Busway and associated Reeves Road flyover.

· Work with Auckland Council on a mass transit solution between the CBD and Auckland Airport and complete route protection.

· Continue construction of the $3.4 billion City Rail Link project on the fastest possible timeline.

· Start construction on the new East-West Link State Highway.

· Accelerate construction on the: Northwestern Busway; State Highway 16 and 18 interchange; Penlink; Southern Motorway widening between Papakura and Drury; widen State Highway 20B to improve eastern access to Auckland Airport; and add Airport-Manukau bus priority lanes on State Highway 20, including Puhinui interchange.

· Build the Third Main Rail Line and extend electrification to Pukekohe.

· Continue investigations for the introduction of road pricing.

“National’s transport policy will continue to see record levels of investment in Auckland to support the city’s growing transport needs. We have a track record of delivering world-class projects on time and on budget,” Mr Bridges says.

“We are today releasing our transport policy that delivers for all New Zealanders and will provide the country with the transport system it needs.

“Our plan demonstrates that we are committed to building the world-class infrastructure the country needs. We will keep people and freight moving, while supporting our strong economic and population growth,” Mr Bridges says.

National’s transport policy will:

· Deliver the $10.5 billion next generation of Roads of National Significance. These are nation-building, lead infrastructure projects which will encourage future economic growth, rather than waiting until the strain on the network becomes a handbrake on progress.

· Accelerate Regional Roading projects that are important for regional development and growth faster than otherwise planned.

· Complete our $600 million investment in fixing the worst 90 black spots around the country, reducing deaths and serious injuries by 900 over 10 years.

· Continue to invest at record levels in public transport including an additional $267 million investment in commuter rail in Auckland and Wellington.

· Grow our air links with other countries to bring on more flights and cheaper airfares.

· Continue with the $333 million Urban Cycleways Programme that will see 54 cycleway projects built in 15 centres across the country, marking the single biggest investment in cycling in New Zealand’s history.

· Accelerate the uptake of Electric Vehicles, with the Government to lead by example with 1 in 3 vehicles in the Government fleet being electric by 2021.

“National is committed to building the infrastructure and transport system New Zealand needs to ensure our ongoing economic prosperity is secured,” Mr Bridges says.

“We also know that strong transport connections are critical for our growing regions and that’s why we are investing strongly to support their growth.

“National’s plan integrates roads, railways, ports, industrial hubs and air services, ensuring that we have a coherent and balanced approach to New Zealand’s transport needs.”

Experts plan world’s biggest sailing cargo ship

The Quadriga sustainable shipping project aims to build the world’s largest cargo sailing ship, which could carry up to 2,000 cars.

Quadriga, which was first announced by German firm Sailing Cargo, aims to become the world’s first and largest sailing cargo ship. UK-based marine classification specialist Lloyd’s Register announced last week that it has joined the project.

Lloyd’s Register wrote on its website that the vessel will be equipped with four DynaRig masts, which are modern versions of sailing ships’ square-rigged masts. It is expected to operate on hybrid propulsion with sails and diesel-electric engines. In addition, when carrying peak loads, the vessel will have an optional battery system.

The vessel, which is 558-feet long, will be capable of sailing at between 10 and 12 knots. It is expected to reach 14-16 knots in the next few years, according to Lloyd’s Register.

“It’s a very exciting initiative to be involved in. It’s always motivating for us to be involved from the concept stage of any project, especially those that involve innovative technology and new ways of doing things,” said Nico Dettmann, Lloyd’s Register’s marketing and sales manager for Central and Eastern Europe, Marine & Offshore, in a statement. “We have a long history of working with and supporting our clients to bring their new and novel concepts, safely and robustly from inception to operational reality.”

Lloyd’s Register believes that wind-assisted propulsion can provide realistic renewable power in the shipping industry. According to the organization’s study Low Carbon Pathways 2050, in order to reach the Paris Agreement’s low emissions requirements, low-carbon ships will be necessary.

“We must do the right thing for the future of our industry; the Quadriga project combines traditionally proven systems with cutting edge technology and aims to provide a solution to reduce CO2 emissions,” said Uwe Köhler, founder of the Quadriga project.
Source: FoxNews

CMA CGM to build world’s largest container ships at Chinese yards

French shipping group CMA CGM plans to build nine of the world’s largest container ships at two Chinese shipyards, the China Daily newspaper reported on Wednesday.

Shanghai Waigaoqiao Shipbuilding Co confirmed that it and its sister yard Hudong-Zhonghua Shipbuilding (Group) Co, had received a letter of intent from CMA CGM for the ships, which would be capable of carrying 22,000 20-foot equivalent unit containers (TEU), the newspaper said.

The final order was subject to board approval from both sides, the newspaper said. Both yards are owned by state-run China State Shipbuilding Corporation.

Should they be built, CMA CGM’s 22,000 TEU vessels will leapfrog the OOCL Hong Kong to take the crown of the world’s largest container ships. The OOCL Hong Kong has a carrying capacity of 21,413 TEU.

Global container shipping lines in recent years have been competing to build the biggest ships in order to gain economies of scale to slash shipping costs. However, such mega-ships are also being blamed for contributing to the overcapacity glut plaguing the container industry.
Source: Reuters

OOCL Japan named, sister vessel OOCL Hong Kong achieved a Guinness World Records Title

OOCL announced that Hull number H2174, the third in their line of six 21 thousand TEU class containerships, has been named as the OOCL Japan at the Samsung Heavy Industries shipyard.

Among industry friends, colleagues and business partners at the naming event, Mr. Andy Tung, Chief Executive Officer of OOCL, thanked all those who contributed to the success of the OOCL Japan, particularly the shipyard for all their support in their contribution to OOCL’s fleet of 21,413 TEU vessels.

“Samsung Heavy Industries is one of leading shipbuilders in the world, and we have always valued their level of commitment to quality and the versatility to tackle on new challenges, just as we are doing now to build these incredible 21 thousand TEU class vessels, the largest containerships in the world to date,” said Mr. Tung.

In fact, this would be the second time that OOCL is breaking records. The last time OOCL set a Guinness World Records title was for the largest containership back in April 2003 with the OOCL Shenzhen, an 8,063 TEU vessel.

“Once again, we are very delighted to be setting yet another record with our long-time business partner because earlier this week, we have been confirmed by the Guinness World Records that the OOCL Hong Kong has officially been recorded as the world’s biggest containership by carry capacity at 21,413 TEU.”

The OOCL Japan will be serving the Asia-Europe trade lane on the LL1 service and her port rotation is: Shanghai / Ningbo / Xiamen / Yantian / Singapore / via Suez Canal / Felixstowe / Rotterdam / Gdansk / Wilhelmshaven / Felixstowe / via Suez Canal / Singapore / Yantian / Shanghai in a 77-day round trip.

OOCL is pleased to say that our network operations with our alliance partners are continuing as planned and the new products, including the LL1 service, that were launched in April are settling in well.

Commenting on the timing of the deployment of our 21,413 TEU vessels this year, Mr Tung said: “The economic growth fundamentals continue to show further improvement so far this year, and under the new industry landscape, we are seeing signs of a stronger rebound after witnessing significant volume growth, increased liftings, and more sustainable rate levels that are positively impacting revenues in the first half of 2017. We are pleased to be rolling out these new vessels under the current environment, and look forward to solid demand growth on a much stronger trajectory.”
Source: OOCL

S. Korean shipping sector still reeling from Hanjin fall

South Korea’s shipping industry is still reeling from the fallout from Hanjin Shipping Co.’s bankruptcy last year as the remaining companies have yet to fill the vacuum left by Hanjin, once the nation’s top player, analysts said Monday.

Hanjin Shipping, previously the world’s seventh-largest shipper, was put under court receivership in September last year as its creditors rejected a self-rescue plan and refused to save the failing business before it was declared bankrupt in early February.

Hanjin Shipping, established in 1977, and local shippers had been groaning under severe financial strain because of falling freight rates stemming from an oversupply of ships and a protracted slump in the world economy.

Hanjin’s bankruptcy sent shock waves through the whole shipping industry, but some rival companies inwardly welcomed it as a rare opportunity to expand their market presence.

One year after Hanjin sought court protection from creditors, however, Hyundai Merchant Marine Co. and other domestic shipping companies are still struggling to make their presence felt in the global market, despite some signs of a recovery in their business such as rising freight rates.

Some skeptics even voice concerns that South Korea, once a shipping powerhouse, could degenerate into a minnow on the global stage without concerted efforts to hone its competitive edge.

Following the court receivership, Hanjin’s vessels and routes were sold to its domestic and global rivals, with its global network, including regional headquarters and agencies across the world, fading out of existence.

Before the failure, Hanjin operated a fleet of 100 container vessels and 44 bulk carriers, ranking the container line among the world’s top seven players.

As domestic financial authorities wished, Hyundai Merchant Marine and SM Line Corp. acquired some of the Hanjin fleet, but its core assets — nine vessels with capacities of about 13,000 twenty-foot equivalent units (TEUs) — were sold to Maersk Line of Denmark and Mediterranean Shipping Company (MSC) of Switzerland.

Domestic shipping companies have also failed to purchase all 71 global routes operated by Hanjin. SM Line bought 50 U.S.-Asian and inter-Asian routes, but the remaining routes were closed.

Hyundai Merchant Marine and SM Line took over about 10 Hanjin container terminals at home and abroad, but its core flagship terminal in New York’s Long Beach was sold to Maersk.

An industry insider expressed regret over the local financial authorities’ decision on Hanjin’s bankruptcy. “Hanjin had a large amount of tangible and intangible assets, and some say it will be impossible to form a shipper of Hanjin’s scale again,” he said. “It is regrettable for the financial authorities to decide on a bankruptcy from the financial perspective without fully considering the characteristics of the shipping industry.”

Despite South Korea’s efforts to revive the shipping industry, domestic players are said to have a long way to go to catch up with global leaders in consideration of various indicators.

The combined capacity of domestic shippers catering to overseas routes — Hanjin and Hyundai Merchant Marine — stood at 1.05 million TEUs as of the end of August last year, but the number for Hyundai Merchant Marine and SM Line plunged to 390,000 TEUs a year later.

The tumble strikes a sharp contrast to global leaders’ fierce competition to increase capacity through mergers and acquisitions and placing new orders for container ships in the wake of Hanjin’s bankruptcy, according to analysts.

“Before Hanjin’s insolvency, there were growing calls that top local players Hanjin and Hyundai Merchant Marine should merge to enhance competitiveness before their financial health worsens further,” a market analyst said on the customary condition of anonymity. “In retrospect, it leaves much to be desired.”

Hyundai Merchant Marine has an ambitious plan to emerge as a global shipping line with a capacity of 1 million TEUs by placing new ship orders, but industry watchers say it can’t attain the goal immediately since it usually takes three to four years to take delivery of a ship after an order is placed.

On top of the decreased capacity, the local shippers’ share of U.S.-Asia routes has also dropped over the past year. Hanjin and Hyundai Merchant Marine had a combined share of 10.9 percent on the routes as of the end of June last year, with Hyundai Merchant Marine holding 5.8 percent a year later.

With the local shipping industry struggling in the wake of Hanjin’s bankruptcy, the South Korean government is striving to forge measures that can help domestic shippers get back on their feet.

In October last year, the government unveiled a package of steps aimed at strengthening the shipping industry’s competitiveness. The Moon Jae-in government, which began in May, set the establishment of a shipping powerhouse as one of its 100 policy goals.

The Moon administration will also provide support to a business alliance that Hyundai Merchant Marine and 13 other shippers launched early this month to work together to develop new shipping routes and operate overseas terminals. It also plans to set up a state-funded maritime promotion corporation by June next year.

Experts, however, caution that it remains to be seen whether such measures can bear fruit. “The government needs to pay closer attention to demands from the shipping industry,” a source said. “It should come up with a mid- and long-term aid package, given the traits of the shipping industry.”
Source: Yonhap