HMM to Set Sail for 6th Place in World by Placing Orders for 20 Super Containerships

Hyundai Merchant Marine (HMM) aims to become a top 10 global shipping company by ordering 20 super large containerships. HMM is expected to have a capacity of 800,000 TEUs and rank sixth in the world when the company secures a super large containership fleet.

According to the investment bank (IB) industry and shipping industry on November 15, HMM will order 20 large-sized container ships starting early next year. “HMM will order 20 large-sized vessels, including nine 20,000-TEU containerships and 11 11,000-TEU containerships for aggressive fleet expansion,” a high-ranking official in the IB industry said. “This strategy aims to deal with major shipping companies’ expansion through mergers and acquisitions and the introduction of super large ships.” This is twice the size of the order projected in the market (around 10 units). In terms of order sizes (350,000 to 400,000 TEUs), HMM’s order is double that (220,000 TEUs as of the end of October) of Maesk, the world’s top shipping company.

Analysis says that HMM will ramp up the number of super large ships as a strategy to cope with the global division and congregation. HMM currently has 56 vessels and its capacity (maximum shipment volume) is 43,000 TEUs, ranking 13th in the world. On the other hand, Maesk which belongs to the 2M Alliance with HMM has a capacity of 3.55 million TEUs and MSC, 3.02 million TEUs, eight times that of HMM.

In particular, next year, Japan is expected to merge its three major shipping companies (MOL, NYK, and K Line). Then the new shipping company established via the merger is expected to have a capacity of 1.7 million TEUs. China’s major shipping company Cosco (1.81 million TEUs) will finally marry OOCL (670,000 TEUs) of Hong Kong, which is the seventh largest in the world in 2019. Then Cosco’s capacity (including that of ordered ships) will exceed 3 million TEUs, jumping to second or third place in the world. In particular, China’s Cosco (Ocean Alliance) and Japanese shipping firms (THE Alliance) are expected to put 20,000-TEU containerships into the Asian market beginning next year. This means that HMM will not be able to compete in such an environment as the shipping company has a maximum capacity of 400,000 TEU and its largest container ship has a capacity of 13,100 TEUs.

Around the year of 2020, nine 20,000-TEU containerships and 11 11,000-TEU containerships to be ordered beginning next year will be delivered to HMM. Then, HMM will have a capacity of more than 800,000 TEUs, about double its current capacity. This volume exceeds that of now-defunct Hanjin Shipping and close to 1,060,000 TEUs of Evergreen, the biggest shipping company of Taiwan. At the time of the final delivery of the 20 vessels ordered, HMM will raise the number of its over-10,000-TEU vessels from 16 to 36. As HMM’s long-term plan aims at securing a one-million-TEU fleet, the shipping company may order more super large containerships depending on future business performances.

Government addresses concerns of transport industry

Transport Minister Phil Twyford (file photo).

BRADEN FASTIER
Transport Minister Phil Twyford (file photo).

New and additional sources of funding are needed to help fix Auckland’s traffic congestion and growing pains, Transport Minister Phil Twyford says.

But Twyford believes it is not fair for the rest of New Zealand to pay for its biggest city’s woes.

Rail and coastal shipping will be a focus for both Auckland and elsewhere, he said.

The newly named minister made the comments in his first address at the Road Transport Forum’s annual conference in Hamilton on Saturday. “If we had a decent passenger rail from Auckland to Hamilton paid for out of the Land Transport Fund, then I could have been here much earlier,” he joked, referring to what RTF Chief Executive Ken Shirley had said to him after arriving late to the conference, having got stuck in traffic.

During the conference at Claudelands Event Centre, Twyford outlined the government’s direction on the future of transport throughout the country.

Creating a “resilient and multi-modal transport system, reducing carbon emissions and fixing Auckland’s congestion” were the priorities.

“We know the transport system is about networks and productivity and changes to one mode can have flow-on consequences.”

Transport in New Zealand needs to be resilient in the face of shocks, such as the recent earthquakes that shut down the major north-south highway in the South Island.

To do this, changes to funding is required.

Roading is currently funded through the Land Transport Fund, from road user charges, petrol tax and vehicle registration, which generate $4 billion a year.

“We need to tackle the problem of new and additional funding sources and the challenge of dealing with Auckland’s growth pains is one of the pressures here.”

Decades of under-investment and congestion in Auckland is costing the city $1.3b a year in lost productivity, he said.

Aucklanders want it fixed, but Twyford said it will come at a cost.

“They understand that it costs money to do this.”

The Government is committed to a $15 million, 10-year programme that includes a rapid transport system in Auckland, which will join up with the road and highway system.

“We believe rapid transport should be funded in the same way as state highways and there are benefits for at least part-funding the rapid transport through the Land Transport Fund.

“We need to find additional sources of funding as well and we cannot ask the rest of New Zealand to pay the costs of Auckland’s growth.”

If asked, the Government will pass legislation to allow Auckland Council to levy a regional fuel tax, he said.

“We’ve talked about 10 cents a litre and that would generate about $150 million a year, about 10 per cent of the investment that is needed for the Auckland Transport Plan.

“Aucklanders have to be willing to chip in a bit extra.”

Income from targetted rates on what will be “massive increases” in the value of the land around the light rail network in Auckland could be reinvested in the rapid transport system, he said.

“The Government is going to continue to fund rail above and beyond the national transport fund, but what we want is to generate new and additional sources of revenue.

“In the long term, petrol excise will not be a sustainable way to fund the transport system.”

Previous governments had disproportionately invested the fund into motorway projects, leaving regional roads starved of funds, he said.

“Our coalition partner placed a very high premium on investment in the regions, so that will be a priority.”

Reducing carbon emissions

Another priority would be reducing carbon emissions from the transport industry, which make up 18 per cent of the country’s greenhouse gas emissions, he said.

Exploring coastal shipping is one way of doing this, he said.

“I believe if we level the playing field, coastal shipping can be a cost-effective way to move heavy bulk freight that is not time-dependent.”

He also addressed one of the biggest concerns from the industry – the shortage of top-class drivers.

Attendees said the driver-licensing system had become complicated and expensive.

Twyford said the government wanted to weave driver licensing into the school curriculum.

“When people don’t get their licence or never graduate to a full licence, it has downstream negative consequences for them to get jobs.”

He said stemming migrant numbers would not affect those in the transport industry.

“You’ll know the intention to change the immigration settings, as we believe the open door policy of immigration had quadrupled net migration.

“We think we can combat this by taking out the rorts and the scams in the education sector, where so-called education providers have been giving back-door visas.”

There are genuine skill shortages and regional skill lists will mean a particular regions can attract people in to live and work in that region, he said.

China marries maritime ambitions with environmental protection

Much ink has been spilled of late about China’s expanding maritime ambitions from the announcement of new projects along the Maritime Silk Road to news of Chinese icebreakers operating in the Arctic.

Less attention has been paid to the environmental impact of this expansion and to the promising steps China is taking to control air pollution from ships.

China, including Hong Kong, is the second largest emitter of greenhouse gases (GHGs) from shipping according to a new report released Tuesday 17.

The International Council on Clean Transportation (ICCT), the US-based independent environmental organisation where we work, revealed that while air pollution from ships dipped between 2008 and 2012, it is on the rise once again, along with energy use, driven in part by vessels registered to China.

Carbon emissions rising
Ships accounted for about 3 per cent of global carbon dioxide (CO2) emissions from 2007 and 2012, according to the International Maritime Organization (IMO), the United Nations agency that oversees international shipping.

However, CO2 emissions from shipping are projected to roughly double by 2050 and are concentrated in East Asia, where shipping accounts for as much as 16 per cent of total CO2emissions. Nearly half of those emissions occur in the East China and South China Seas, where 40 per cent of the world’s seaborne trade took place in 2015.

Overall, the ICCT estimate that CO2 emissions from global shipping increased from 910 to 932 million tonnes, or about 2.4 per cent, from 2013 to 2015.

This is the reversal of the trend identified by the IMO in 2014, which found that shipping energy use and air pollution fell from 2008 to 2012 in the aftermath of the global financial crisis.

GHGs and air pollution is concentrated in a handful of the Flag States that register and license ships.

The top six flag states collectively emitted over half of total shipping CO2, with China ranking second (11 per cent) after Panama. Ships registered to China and Hong Kong also emit significant amounts of local air pollutants.

Open registries, which allow a merchant ship to register far from where it is owned and operated, make it difficult to calculate the magnitude of shipping emissions. For example, The United Nations Conference on Trade and Development (UNCTAD) estimates that China was responsible for 24 per cent of container goods movement worldwide in 2014.

Committed to cleaner air
These findings are important as China moves to reduce its domestic GHG emissions and address its air quality challenges.

China has pledged to significantly reduce its carbon intensity levels and peak total carbon emissions by 2030. It has also finished a mid-term review of the first phase of its Air Pollution Control Action Plan and is considering even more ambitious goals for fine particulate matter (PM2.5) and nitrogen oxides (NOx), an important precursor of urban smog.

The mid-term review specifically identified shipping as a major source of emissions in port cities.

The silver lining for China is that there is great opportunity in cutting shipping emissions.

Policies to control air pollution from ships remain underdeveloped globally. For example, fuel quality standards for passenger cars in most major economies require virtually zero sulfur fuels, while the majority of the world’s maritime fleet still uses fuels with as much as 27,000 parts per million (ppm) sulfur. Even today, most large marine engines remain essentially uncontrolled.

China is moving ahead by putting in place a series of domestic policies to control air pollution from ships and ports. In August 2015, the Chinese Ministry of Transport (MoT) released its Action Plan to Control Air Pollution from Ships and Ports (2015-2020), which aims to reduce shipping air pollution in three coastal port clusters by up to 65 per cent by 2020.

Subsequently, MoT designated three domestic emission control areas (DECA) for the Pearl River Delta (PRD) region, the Yangtze River Delta region and the Bo Sea region within which ships are required to burn cleaner fuels starting from January 1, 2017.

Finally, in August 2016 China’s Ministry of Environmental Protection (MEP) released the nation’s first emission standards for smaller marine engines used in domestic ships.

The central government, along with leading port cities such as Shanghai and Shenzhen, is also actively promoting new technologies like “shore power”. This allows ships to use electricity rather than burning dirty fuels while “hotelling” (the time a vessel spends in port that is neither loading or unloading) at a port, along with cleaner burning liquefied natural gas (LNG).

Plenty more options
With ambitious goals set to reduce air pollution and GHGs, China still has lots of policy options in the maritime sector to help meet the targets.

Two approaches in particular deserve mentioning. For the period of 2016-2018, ships need to use cleaner fuels only while at port within China’s designated DECAs.

Beginning in 2019, that requirement will expand to all activity within China’s territorial waters (UN baseline plus 12 nautical miles) for the three areas.

Fuel use at berth accounts for less than 10 per cent of air pollution in the greater Pearl River Delta region, compared to 63 per cent within the 12 nautical mile zone. In other words, the expanded DECA requirements will cover seven times as much air pollution starting with significant air quality and health benefits.

Fortunately, leading port cities lare embracing the central government’s regulations by accelerating the implementation schedule of the DECA requirements. MoT will also consider whether the existing DECA requirements should be further strengthened by the end of 2019.

A further step would be for China to formally designate an IMO Emission Control Area (ECA) off its shores. These are currently enforced off the coast of North America and in the North and Baltic Seas in Europe. They apply tighter fuel quality and engine emission standards on ships operating up to 200 nautical miles from the applicant country’s shore.

A Chinese ECA would reduce sulfur oxide (SOx) emissions by an additional 80 per cent and could also cover NOx emissions. This would be an important step to improve local air quality and to protect human health in East Asia. An ECA would also establish an additional incentive for ships to become more energy efficient to manage fuel costs, reducing GHGs at the same time.

An ECA application to International Maritime Organization, and the environmental commitment it represents, would be a fitting complement to China’s expanding maritime ambitions.
Source: Chinadialogue

Shipping’s future on the horizon

eric.frykberg@radionz.co.nz

 

You’ve heard of self-driving cars, driverless trucks, and airliners that fly on auto-pilot – how about autonomous ships?

An artist's impression of an autonomous ship.

An artist’s impression of an autonomous ship. Photo: Rolls Royce Marine

New Zealand interest in the technology – which could allow ships to sail with no one, or just a handful of people, on board – is growing along with international developments.

The world’s first autonomous container ship, built by shipping and aerospace company Kongsberg, will carry fertiliser from next year along coastal routes in Norway, while Rolls Royce Marine has signed a deal with Google to help with the technology for piloting autonomous ships.

But these vessels won’t be modern day ghost ships, a mournful echo of the Marie Celeste.

An artist's impression of an autonomous ship. Rolls Royce Marine has signed a deal with Google to help guide autonomous ships.

Rolls Royce Marine has signed a deal with Google to help with the technology for autonomous ships. Photo: Rolls Royce Marine

New Zealand Maritime School industry training manager Kees Buckens said they would be state of the art vessels with sophisticated methods of avoiding a collision.

They would use radar and GPS, as well as new systems linked into infrared cameras that scan the water around the vessel, he said.

“These would give a very clear picture of anything that is on the water from a small log or boat to large ships,” he said.

This information would enable ships to take evasive action to avoid any obstacle.

Such vessels would be very safe, since 80 percent of marine accidents were caused by human error, Mr Buckens said.

While one or two people might be needed to keep an eye on the computers, they would not necessarily be on the vessel, but could be in an office thousands of kilometres away.

Kongsberg chief executive Geir Håøy said the company had been working on autonomy for decades.

New Zealand Shipping Federation spokesperson Annabel Young said the message from a recent Auckland seminar on the future of shipping was that there would be no “big bang” of autonomy.

“There will be an incremental development where people work out which routes and which type of cargo is best suited to an autonomous vessel.

“Some will be more suited than others.”

Ship stopped from entering NZ waters

The ship was due to arrive in the Port of Tauranga early this morning. File photo.

A container ship has been prevented from entering New Zealand waters after several moths were found on board.

The ANL Warragul was heading to the Port of Tauranga from Sydney when the insects were discovered.

A Ministry for Primary Industries spokesperson says a number of dead and live moths have been found on board the vessel.

“We haven’t identified the moths yet, so we don’t whether they’re regulated or not. The vessel is currently outside the 12 nautical mile mark, so they’re not currently in New Zealand territorial waters.

“If the moth is found to be regulated, the vessel may not be permitted to enter New Zealand.”

According to the shipping schedule, the ANL Warragul was due to arrive in port at 5am this morning, and depart for Papeete, Tahiti at 10pm.

The Port of Tauranga directed all SunLive enquiries to MPI.

Coalition deals

As at 24/10 we have very little detailed information about the nature of the transport related items in the coalition deal Labour/NZ First, and the confidence and supply deal Labour/Greens.

So far the key points relate to:

• Rail: Significant investment in regional rail. – [We’re not sure exactly what this means]

• Auckland Port: Commissioning a feasibility study on moving the Ports of Auckland to Northport – [It’s hard to imagine this flying – Auckland won’t want to lose control of their own destiny in a port/shipping sense, and it’s hard to imagine the Greens being happy with an increase in carbon miles for the transport from Northport to Auckland.  Not to mention the absolutely massive cost to upgrade rail from Northland to Auckland]

• Transport: Investigate a Green Transport Card to reduce the cost of public transport for low-income people and welfare recipients, prioritise National Land Transport Fund towards rail infrastructure as well as cycling and walking, cancel Auckland’s East-West motorway link, work towards light rail from Auckland city to airport [The East-West cancellation is a shame, and we’re surprised that the NZ First preference for heavy rail to the airport wasn’t adopted in the Labour/Green deal]

Railway from Picton to Christchurch closes again after wet start to October

KIWIRAIL
A wet start to October has caused slips to come down on the Main North Line, which is expected to remain closed until the end of the month.

The newly rebuilt railway line from Picton to Christchurch could be closed for the rest of the month after recent rain brought slips down across the tracks.

Hundreds of spectators turned up to watch the first freight train since the November earthquake take the Main North Line on September 15.

The celebration was short lived. Heavy rain closed the track after the one train went through. It reopened 10 days later, but has closed again.

Hundreds turned up to watch the first freight train since the November earthquake take to the track on September 15. The ...

KIWIRAIL

 

KiwiRail blamed the latest closure on an unusually wet start to October for the Kaikōura region.

Acting chief executive David Gordon said the “unusually heavy rainfall” caused 31 slips in the area, including three major slips onto the railway line and next to State Highway 1.

He said KiwiRail was working to “make repairs and add resilience” ahead of the peak freight period.

“At this stage we expect services to operate on the line again at the end of this month.”

KiwiRail ran two freight trains each weeknight on the line, leaving it clear during the day and over the weekend for additional repairs to the track and SH1.

Gordon said some disruption was always possible with the limited reopening, but the rain created “much greater disruption than we could reasonably predict”.

He said KiwiRail regretted the impact on customers – and that they could not take some of the freight burden away from the Lewis Pass, which is on the alternative highway route while SH1 is repaired.

KiwiRail previously claimed the Main North Line reopening would take 2000 trucks a month of the road, a figure some in the industry disputed.

At the last closure, general group manager network services Todd Moyle said the Main North Line was likely to shut up to 25 days a year, based on its current state.

MetService forecaster Cameron Coutts said Kaikōura had received 84 millimetres of rain so far in October, which was “well above” the month’s average of 57mm.

He said it should be dry and relatively warm before showers returned on Monday and Tuesday. A “settled spell” was expected for the latter half of next week.

“In saying that, we’re still in spring, so it’s still pretty changeable,” Coutts said.

 – Stuff

CentrePort to invest $63m in strengthening waterfront land after quake

Work at CentrePort to stabilise the container cranes, with a bespoke platform within the wharf.

MAARTEN HOLL/STUFF
Work at CentrePort to stabilise the container cranes, with a bespoke platform within the wharf.

CentrePort has set aside $63 million to strengthen its land on Wellington’s waterfront after November’s 7.8 magnitude quake caused significant damage.

The ratepayer-owned company is now consulting international experts to help figure out what the work will be.

To date, CentrePort has spent $28m securing 125 metres of the 585-metre wharf, which included 644 gravel columns being set in the ground to reduce any liquefaction from future earthquakes and provide resilience to the temporary works.

Chief executive Derek Nind​ said they were now looking to how to do that across the entire port.

“We try not to talk about rebuild, we talk about regeneration. And what do I mean by that?

CentrePort chief executive Derek Nind.

SUPPLIED
CentrePort chief executive Derek Nind.

“What I mean is if we go to rebuild, we’ll get what we had, which was 20th century assets and 20th century thinking,” Nind said.

“What we need is 21st century assets for the next 50 to 100 years, and we need to regenerate the port.”

To date, CentrePort has received $173.7m of insurance income, but that figure was expected to rise.

On Tuesday, insurers agreed Statistics House should be demolished, as the Kaikōura earthquake caused the partial ...

ROSS GILBIN/STUFF
On Tuesday, insurers agreed Statistics House should be demolished, as the Kaikōura earthquake caused the partial collapse of two floors.

“We got hit, but we’ve been working hard on getting the business back up and running,” Nind said.

On Tuesday, insurers agreed Statistics House should be demolished, as the Kaikōura earthquake caused the partial collapse of two floors.

Meanwhile, the future of BNZ Harbour Quays remains uncertain, as engineers continue with assessments.

CentrePort’s underlying profit, after tax and before earthquake-related income, was $8.6m for the year ending June 2017. This was down $4.7m from the previous year.

“The results show us investing in the port’s resilience. They also show strong underlying performance.”

 – Stuff

Port Taranaki 60 per cent dividend increase projected after ‘challenging’ year

Port Taranaki ceo Guy Roper forecasted stable future after challenging year.

Port Taranaki ceo Guy Roper forecasted stable future after challenging year.

Despite a $3 million drop in revenue in the past 12 months Port Taranaki remains optimistic about its prospects in the coming year.

Profits dropped 6.5 per cent in the 2016-2017 financial year and total trade dipped by 1.4 per cent resulting in a $3 million loss in revenue, from $44.7m to $41.7m, it was reported at the annual general meeting.

Reduced shipping activity, lower oil commodity prices and a fall in the stock feed market all contributed to the lower revenue and profit, Port Taranaki Ltd ceo Guy Roper said.

Increase in log exports from Port Taranaki will help shareholder returns

Increase in log exports from Port Taranaki will help shareholder returns

However, a record year for log revenue – which was up almost 30 per cent on the year before – is expected to continue and would boost the dividend paid to sole share holder the Taranaki Regional Council, Roper said.

Dividends were expected to grow by more than 60 per cent, from  $4.9 million to $8m, in the next financial year and would help offset regional rates.

Cruise ships and logs vital for Port Taranaki

Cruise ships and logs vital for Port Taranaki

Roper said the past financial year had been “challenging” for the company.

The number of ships arriving at the port dropped 10 per cent due to the international trend of larger vessels exchanging bigger parcels of cargo, which meant fewer visits, while lower LPG production also meant less ships arrived in port.

As well, the stock feed market dropped and customers reduced costs by sharing cargo space.

But the outlook for the new financial year was stable and revenue, profit and cargo volumes were forecast to be in line with the 2016-2017 results across all sectors, he said.

Under an agreement with BP New Zealand, to start in October, larger amounts of petrol and diesel could now be shipped in, stored and distributed throughout the region to reduce costs, he said.

The oil and gas industry remained Port Taranaki’s largest sector, and the ongoing challenging oil commodity price environment impacted on port business, Roper said.

Methanol volumes were strong during the year while crude, condensate and LPG volumes were weak. However, there were positive signs for future offshore exploration, he said.

Roper said log volumes were projected to lift in the coming year after another record 12 months, which saw a 36 per cent increase in industry standard log tonnage through the port and a 29 per cent increase in log revenue.

A combination of favourable market conditions, low inventory levels in China, and large numbers of harvest-ready trees in the port’s catchment area saw 460,000 JAS (Japanese Agricultural Standard) logs exported. JAS is an industry standard measurement approximately equal to 1 tonne.

The port company planned to stack logs higher and look at developing more land to accommodate growth, Roper said.

“We are also examining means to extend our forestry catchment area and service the growing demand by developing a combined road-rail transport mode for logs.

“With rail facilities direct to the Blyde Wharf we are exploring ways to make this practical and economically viable.”

The company would remain flexible and adaptable with a focus on making a return on shareholder’s funds to make a real difference to the Taranaki economy, Roper said.

“To achieve this in the current climate, we need to carefully review our costs across the business and this is something we will be assessing in the coming months.”

The forecasted lift in the milk price, to more than $6 kilogram/milksolids, would help boost dry bulk trade and the local economy.

Outgoing chairman John Auld​ said the dividend increase reflected the company’s view on the retention of capital versus returning capital to the shareholder.

Port Taranaki was vital to the Taranaki economy, he said.

​”This includes providing an appropriate return on our shareholder’s investment for the betterment of the Taranaki community.”

 

Port Taranaki financial results 2016-2017:

Revenue down 6.7 per cent, or $3m ($44.7m to $41.7m)

Net profit before tax down 6.5 per cent to $11.5m

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) down 3.3 per cent, or $0.6m ($19.6 million to $19.0 million)

Operating costs down 6.5 per cent ($29m)

Total trade down 1.4 per cent (5.2m/t to 5.08m/t).

Exports up 1 per cent.

Imports down 15 per cent.

Dairy dry bulk volume 17 per cent down, down 25 per cent revenue.

Oil and gas bulk liquids down 2 per cent .

Exploration related work down 38 per cent

 – Taranaki Daily News