Danish shipping registries will soon expand with another 11 vessels which are set to fly the Danish flag.
The units in questions are the ones belonging to the fleets of Danish shipping companies TORM and Dampskibsselskabet Norden A/S, according to the Danish Maritime Authority.
“This builds on the historic milestone when Danish shipping registries recently reached 20 million GT,” the authority informed.
Even though Denmark is not the world's biggest ship registry, it is now in front when it comes to growth rate over the past year, which means that in just one month, the Danish International Shipping Register has grown from 20 to 20.5 million GT, with more than 700 ships registered in DIS.
“It is encouraging to see the Danish flag continuing its growth. Our political initiatives are having a positive effect, and we will continue the efforts to reduce administrative burdens, digitalize and improve the framework conditions and overall service for the industry,” Brian Mikkelsen, Minister of Business, Industry and Growth, said.
Since the beginning of 2018 around 230 second-hand sales have been reported in the dry bulk sector, according to Intermodal’s market insight.
Handysizes and Ultramaxes seem to have sparked the greatest interest with 160 sales in the dwt range. The high demand for such tonnage has seen asset values leap upwards.
“We recently saw a 38k dwt non-Japanese bulk carrier built in 2011 being sold for USD 11.3 million and a 33k dwt Japanese unit built in the same year fetching more than USD 15 million. Both these prices are indicative of the increasing popularity Handysize vessels above 33kdwt are currently enjoying,” Intermodal’s George Iliopoulos said.
Supramax and Ultramax bulkers were also the popular choices of owners, with Chinese and Japanese-built tonnage attracting the most buyers.
Two types of Supramaxes attracted buyers’ interest, according to Intermodal, small Supras ranging between 50,000 and 52, 000 dwt, built in the early 2000’s and bigger vessels over 55,000, built between 2006- 2012.
A 2006-built MV Darya Vishnu fetched a price in excess of USD 13 million. For the purpose of comparison, about a year ago, a sister ship of the bulker, was sold for around USD 10 million, only to be resold at the end of 2017 for slightly above USD 11.5 million.
“Prices appear to be on the rise again and the performance of the freight market during the summer season will definitely help shape expectations for the last quarter of the year,” Iliopoulos added.
The likely oil exports decline from Iran stemming from the planned reimposition of sanctions against the country by the United States could leave up to 20 Very Large Crude Carriers (VLCCs) without work, according to Drewry.
Curbing of Iran’s oil production would come at a very bad time for the tanker market with supply being very tight taking into account restrictions of OPEC production and declining Venezuelan output.
“If we consider a situation similar to the 2012 sanctions, it will wipe-out all the gains of close to 1.0 thousand barrels per day (mbpd) in Iranian production which came after the nuclear deal. The potential impact on oil and tanker market this time around would be more severe,” Drewry said.
Even in the absence of sanctions, the call on OPEC crude and stock change for the remainder of the year will be about 0.6 mbpd higher than OPEC’s March production levels of 31.8 mbpd not-withstanding the rising US-led non-OPEC production. In 2019 the situation should ease as further gains in US production will bring down the call on OPEC crude, the UK shipping consultancy said.
“Theoretically, OPEC producers have more than enough spare capacity (3.4 mbpd) to fill the possible void created by Iran sanctions. The majority of this spare capacity lies with Saudi Arabia and other Middle Eastern producers,” Drewry went on to say.
Consequently, should Middle Eastern OPEC producers ramp up production to fully compensate for any decline in Iranian supply, the sanctions would have no impact on oil trade and tanker demand.
However, if that is not the case, the market could be in deep trouble, as the gap will have to be met by inventory drawdown, which in turn will curb trade by an equivalent volume.
“In this scenario, we could see a decline in seaborne crude oil trade close to 50 million tonnes (equivalent to 2.2 pct of 2017 trade). Or put another way, 15-20 VLCCs, could be without employment,” Drewry said.
Lower charter rates pushed Navig8 Chemical Tankers deeper into loss in the first quarter of this year.
For the three months ended March 31, 2018, the company reported net loss of USD USD 4.2 million, compared to a net loss of USD 1.2 million seen in the corresponding period a year earlier.
As explained, the increase in net loss is mainly due to lower gross average daily time charter equivalent (TCE) rates achieved by the A-Class Vessels, partially offset by a rise in total operating days and increases in vessel operating expenses, depreciation and interest income.
Revenue for Q1 2018 was USD 41 million, against revenue of USD 37.9 million for the same quarter of 2017.
The company had 32 vessels operating during the three months ended March 31, 2018, all but one of which operate in pools from which they derive TCE revenue.
“Earnings have continued to move higher, particularly towards the end of the first quarter, although rates still remain under pressure,” Nicolas Busch, Chief Executive Officer of Navig8 Chemical Tankers, said.
“The market improvement has been more pronounced in larger coated and stainless steel chemical tankers, a trend we expect to continue and is supported by the longer term fundamental forecast for the industry,” he concluded.
Navig8 Chemical Tankers was established in 2013 as a joint venture between Navig8 Group and funds managed by Oaktree Capital Management. The joint venture currently has a 32-vessel fleet.
The Danish flag has recently passed a milestone as the gross tonnage in Danish ship registers went above 20 million GT for the first time ever.
The Danish government’s efforts to ensure attractive framework conditions for the maritime industry are currently yielding a very positive effect as the Danish flag continues to grow.
A recent example of this effort was the removal of the registration fee for ships in Danish registries, which the Danish Parliament adopted earlier this year.
“The results we are seeing are proof that Denmark is an attractive flag state. We will continue efforts to ensure even better conditions as a strong Danish flag benefits the whole of Denmark,” Brian Mikkelsen, Minister for Industry, Business and Financial Affairs, said.
“Plus, this is a good example of Denmark gaining from free trade – because global trade increases economic activity among shipping companies, and this becomes very fruitful when we are also having more of those companies choosing Denmark as center of gravity for this increased activity,” Mikkelsen added.
Denmark is moving steadily up the ranks, and is currently the world’s 12th largest register.
Global schedule reliability dropped by 8.1 percentage points in the first quarter of 2018, compared to the previous quarter, reaching 66.4%, according to SeaIntel Maritime Analysis.
Taiwanese container carrier Wan Hai was the most reliable carrier in the first three months of 2018 with 80.6% schedule reliability. Evergreen and APL followed with 71.3% and 71.0% schedule reliability, respectively.
None of the Top17 carriers recorded a positive quarter-on-quarter change in schedule reliability, while APL, Wan Hai, and MSC were the only carriers to record positive year-on-year change in schedule reliability, of 3.0, 2.1, 0.5 percentage points, respectively.
On a trade level, none of the major East/West trades recorded a positive quarter-on-quarter change in schedule reliability, with only the Asia-Mediterranean (MED) and Asia-North Europe (NEUR) trades recorded positive year-on-year changes.
In the first quarter of the year, the Asia-North America West Coast (NAWC) trade lane recorded 55.3% schedule reliability, down 10.9 percentage points compared to the previous quarter. HMM was the most reliable carrier on this trade lane with 68.6% schedule reliability.
The Asia-North America East Coast (Asia-NAEC) trade lane saw schedule reliability drop a staggering 21.1 percentage points from the previous quarter. OOCL was the most reliable carrier on Asia-NAEC with 46.7% on time performance.
Schedule reliability for Asia-NEUR and Asia-MED improved by 3.0 and 8.1 percentage points year-on-year, respectively, reaching 70.1% and 70.8%, however, their schedule reliability dropped on a quarterly basis. FESCO was the most reliable carrier on both trade lanes with 95.2% and 100% schedule reliability, respectively.
Both Transatlantic trades recorded massive quarterly drops in schedule reliability, of 21.7 percentage points on Transatlantic Eastbound (TA EB), and 23.7 percentage points on Transatlantic Westbound (TA WB), reaching 58.3% and 49.3%, respectively. Marfret was the most reliable carrier on TA EB with 96.0%, while ICL was the most reliable on TA WB with 87.5%.
Miami-based cruise company Norwegian Cruise Line Holdings witnessed a strong start to 2018 as its net income surged by 66.7 percent in the first quarter of the year.
The company’s net income reached USD 103.2 million for the period ended March 31, 2018, compared to USD 61.9 million in the prior year.
Total revenue was also up in the quarter, rising by 12.4 percent to USD 1.3 billion from USD 1.2 billion in 2017, driven by strong organic pricing growth across all core markets along with an increase in capacity days due to the addition of Norwegian Joy to the fleet.
“The year is off to an impressive start with yet another record quarter of earnings, which exceeded expectations,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd.
Del Rio added that the 2018 Wave Season “was stellar and has further strengthened our overall future booked position with load factor and pricing continuing to be well ahead of prior year for the remaining quarters of 2018 and throughout 2019.”
The company expects to generate record earnings for full year 2018 and has increased its outlook, with Adjusted EPS now expected to be in the range of USD 4.55 to USD 4.70.
“The strong global demand for our portfolio of brands which we experienced during 2017 has continued, as demonstrated by the successful, record-breaking launch of Norwegian Bliss, which entered the fleet as the best booked Norwegian Cruise Line newbuild in the history of our company,” said Mark Kempa, interim chief financial officer of Norwegian Cruise Line Holdings Ltd.
“While our primary focus continues to be to delever to the low 3 times by year-end 2018, our recently announced USD 1 billion share repurchase program reflects our ongoing confidence in our financial position and the long-term strength of our business as well as our commitment to provide meaningful capital returns to our shareholders,” Kempa concluded.
Japan’s Nippon Yusen Kabushiki Kaisha (NYK Line) returned to profit in the fiscal year ended March 31, 2018, mainly due to strong container shipping and dry bulk segments.
The company delivered a net profit of JPY 20.2 billion at the end of the year, compared to a net loss of JPY 265.7 billion reported in the previous fiscal year.
The company’s revenues for the year increased by 13.5 percent to JPY 2.2 trillion, from JPY 1.92 trillion reported a year earlier.
NYK Line also delivered an operating profit of JPY 27.8 billion, against an operating loss of JPY 18 billion seen in the fiscal year 2017.
“Conditions in the maritime shipping market were positive on the whole during the fiscal year,” NYK Line said.
In the container shipping market, while an upswing in spot freight rates stalled somewhat as the total supply of tonnage remained at similarly high levels as the previous year, shipping traffic was stable on the back of solid demand for container shipments.
In the dry bulk shipping market, although excess tonnage still exists, the cargo volume of iron ore, coal, and grains all increased and market conditions improved, the company informed.
From a total of 206 ships, which were broken in the first quarter of 2018, 152 ships were sold to the beaches of South Asia for breaking, according to NGO Shipbreaking Platform.
South Korean and UAE ship owners have sold the most ships to South Asian yards during the first quarter of 2018 with 14 beached vessels each, followed by Greek and Russian owners. Shipping companies from the United States beached 5 vessels.
NGO Shipbreaking Platform informed that South Korean Sinokor is, for now, “the worst corporate dumper” with seven vessels beached in South Asia in 2018. Followed by South Korean H-Line Shipping with five ships sold for scrapping on the beach.
Only 3 ships had a European flag – Belgium, Italy and Norway – when they arrived on the beach. All ships sold to the beaching yards pass via the hands of scrap-dealers, that often re-register and re-flag the vessel on its last voyage.
Almost half of the ships sold to South Asia this quarter changed flag to the grey- and black-listed registries of Comoros, Niue, Palau and St. Kitts and Nevis just weeks before hitting the beach.
Furthermore, so far this year, 10 workers have lost their lives and 2 workers have been severely injured when breaking ships in Chittagong, Bangladesh. Another two workers were reported dead after an accident at a shipbreaking yard in Alang, India.
NGO Shipbreaking Platform said that ship owners “continue to sell their ships to the beaching yards despite the well documented deplorable conditions."
Baltic Exchange and the digital container freight platform Freightos have unveiled an independent, audited benchmark for the global container shipping industry.
On April 25, during the Singapore Maritime Week, the two organisations informed that the Freightos International Freight Index will be audited by the Baltic Exchange and republished as the Freightos Baltic Indices.
The index reflects weekly spot rates for 40-foot containers based on 12 to 18 million price points collected every week on 12 main shipping trade lanes.
This will also include a new headline index – the FBX Global Container Index (FBX) – a weighted average of the 12 underlying route indexes, while setting the stage for derivative financial instruments in the future.
“Baltic Exchange benchmarks are already widely used as settlement mechanisms in the derivatives and physical markets for billions of dollars-worth of bulk freight transactions,” Mark Jackson, Baltic Exchange Chief Executive, said.
“By offering our robust auditing methodology to the FBX, we hope to provide the framework for the container shipping industry to develop sophisticated risk management tools,” Jackson added.
“This exciting endeavour means that the world’s manufacturers, distributors and retailers, and logistic services providers, will for the first time be capable of managing ocean freight rate volatility,” Freightos Founder and CEO Zvi Schreiber concluded.