Responding to the latest cyber security queries, Danish shipping conglomerate Maersk reassured that no data had been lost due to the cyber attack.
“While our operations and communications have been significantly affected by this virus attack, no data breach or data loss to third-parties is known to have occurred as of this date,” Maersk said in an update.
Furthermore, the transport major added that customer systems connected to Maersk were not at risk of infection, as confirmed by cyber crime analysts and agencies. As informed, the virus spreads rapidly within a company’s network, but does not spread between networks or across the internet.
Speaking of the virus in question, Maersk added that the virus attack was a previously unseen type of malware, and updates and patches applied to both the Microsoft systems and its antivirus “were not an effective protection in this particular case.”
“Once our service has returned to more normal conditions, we will conduct a full post-mortem,” the update reads.
Maersk continues to work toward full recovery, following the cyber attack on June 27, which resulted in the shutdown of the group’s business units, including APM Terminals.
The fully automated Maasvlakte II terminal in Rotterdam had to suspend vessel operations completely for a full week, with vessels having to reroute to other terminal facilities.
The tanker market, which was counting on the implementation of the IMO Ballast Water Management Convention in September 2017 to raise scrapping levels, could now face a delay in rate recovery, according to Ocean Freight Exchange (OFE).
The recovery could be postponed as the Marine Environment Protection Committee (MEPC) recently decided to push the BWMC implementation by two years.
Demolition activity is now expected to slow down over the next few years, subsequently postponing any substantial recovery in tanker rates which have been heavily pressured by the perennial state of tonnage oversupply.
According to BIMCO, 2.6 million dwt of tanker capacity was sold for demolition in 2016 while 1.3 million dwt was demolished from January to April 2017.
“While overall demolition levels in 2017 are expected to outpace that of last year, the relentless pace of newbuild deliveries and recent uptick in orders still point to weak supply side fundamentals,” OFE said.
At present, vessels older than 15 years account for around 23% of the overall crude tanker fleet. The presence of older tonnage has weighed heavily on freight rates by offering significant discounts, with spot VLCC rates for the benchmark AG/Japan route currently around 48% lower than at the beginning of the year.
“The evident reluctance of ship owners to scrap ageing tankers spells a long way to recovery for the tanker market,” OFE added.
The number of active shipyards on a global scale has dropped by 62 percent since the beginning of 2009, according to Clarksons shipping consultancy.
Specifically, there was a total of 358 active yards, defined as having at least one unit under construction, as of July 2017, a slashed figure when compared to 934 from 2009.
The largest drop has been seen in the bulker sector, which has marked a 67 percent fall over the last eight years, standing now at 97 yards as opposed to 293 yards in 2009.
On a regional basis, the largest drop has been in China, with the number of Chinese yards with a bulker on order declining by 73% to stand at 50 at the start of July. In terms of consolidation, the ‘top 10’ yards (ranked by total dwt on order in the sector) account for 54% of the total bulker orderbook in dwt terms, Clarksons said.
In the tanker sector (10,000+ dwt), the number of active yards on order has decreased by 55% since 2009 to currently stand at 89 shipyards, only 8 yards fewer than in the bulker sector. China, Korea and Japan each have between 10 and 20 fewer active yards in the sector.
In terms of vessel types, the number of yards building crude tankers has remained steady, with the decline mainly accounted for by product and chemical tankers. Similarly to the bulker sector, the ‘top 10’ yards account for 56% of the total tanker orderbook in dwt terms.
In the containership sector, the number of active yards has declined by 40% since 2009 to 56 at the start of July. The number of active Asian shipyards has dropped from 64 to 46, while the largest decline was at European yards, with only one shipyard in Europe currently building a boxship, down 96% (German yards alone accounted for 17% of the boxship orderbook in 1998 in TEU terms). Consolidation is a little stronger in the boxship sector than in the bulker and tanker sectors, with the ‘top 10’ yards accounting for 61% of the orderbook in TEU, Clarksons further adds.
"Furthermore, 30% of currently active yards are set to complete construction of ships on their orderbook by the end of this year. With these trends in place, it will be no mystery as shipyard capacity continues to slide,” the consultancy further added.
The shipbuilding orderbook value for the first half of this year of South Korean shipbuilding major Hyundai Heavy Industries (HHI) totaled in USD 1.65 billion, up by 67 percent when compared to last year’s figures.
HHI said in its interim report for the first six months of this year that the group’s new orders amounted to USD 2.25 billion, up by 15.9 percent year-on-year.
The company’s offshore and engineering arm saw a 66.6 percent decline in orderbook value reaching USD 139 million.
HHI’s industrial plant branch was hit the hardest with 83 percent decline y-o-y standing at USD 11 million against USD 65 million from the corresponding period last year.
Finally, Hyundai’s engine and machinery business had a similar performance when compared to last year’s figures earning USD 446 million against last year’s USD 470 million, down by 5.1 percent.
SOFTimpact LTD a leading Maritime IT solutions specialist has today signed a strategic partnership agreement with Lemur Maritime based in Pireaus, Greece, to deliver cybersecurity solutions to the Greek shipping sector. SOFTimpact and Lemur will work together with their customers to address the “Cyber Threats” being faced on a daily basis.
Services will include, Risk Assessments, Cyber Defence Planning, Phishing simulation, Penetration testing and Cyber education. Oil tanker managers and owners will be pleased to hear that the partnership will also help them address the newly introduced element 13 and cybersecurity related KPIs.
Markus Schmitz, Managing Director SOFTimpact stated “With Greece being a short hop across the water and having the majority of our workforce being Greek speaking, this partnership will allow those companies in Greece struggling to understand and address the cyber threats access to our services already delivered internationally for some time. We look forward to a positive partnership with Lemur”.
Kostas Sismanidis, Managing Director Lemur stated “ We believe implementing Maritime Cyber Risk Management through ISPS, ISM and TMSA Element 13 requires strategic partnerships, that have contributed to the final text of the recently issued guidelines by BIMCO. SoftImpact is adding value to our Cyber Risk Approach and we are now able to offer a holistic effective and efficient solution to our Greek Customers.
SOFTimpact Ltd. is a leading Maritime IT solutions provider based in Cyprus for over 19 years. The firms CYBERimpact product line helps shipping to secure their data by combining consultancy, technology and education. SOFTimpact is completely dedicated to implementing Innovative IT solutions anywhere in the world. The company specializes in products like Payroll, Crewing, KPI and Cybersecurity for Martime and works with associations such as BIMCO, Intermanager and the Nautical Institute.
Lemur Lemur is a newly established Maritime Management Services Company based in Piraeus. The company specializes in delivering Maritime Educational Modules, Performance Measurement based on Tolerance and Preparedness Indexes, SMS Effectiveness Measurement and Management Audit Services. Our portfolio of services and products is expanding to e-Navigation Products including Chartroom Management, e-Learning, and Email solutions.
The Hound Of The Bulkervilles
As of the start of 2009, there were 293 yards active in the bulkcarrier sector, with almost a third of total active shipyards having a bulker on order, due to the boom in bulker ordering and the relatively lower barriers to entry in the sector. This total has now fallen by 67% to stand at 97 yards. On a regional basis, the largest drop has been in China, with the number of Chinese yards with a bulker on order declining by 73% to stand at 50 at the start of July. In terms of consolidation, the ‘top 10’ yards (ranked by total dwt on order in the sector) account for 54% of the total bulker orderbook in dwt terms.
Tanker Tailor Soldier Spy
The number of active yards in the tanker sector (10,000+ dwt) on order has decreased by 55% since 2009 to currently stand at 89 shipyards, only 8 yards fewer than in the bulker sector. China, Korea and Japan each have between 10 and 20 fewer active yards in the sector. In terms of vessel types, the number of yards building crude tankers has remained steady, with the decline mainly accounted for by product and chemical tankers. Similarly to the bulker sector, the ‘top 10’ yards account for 56% of the total tanker orderbook in dwt terms.
In the containership sector, the number of active yards has declined by 40% since 2009 to 56 at the start of July. The number of active Asian shipyards has dropped from 64 to 46, while the largest decline was at European yards, with only one shipyard in Europe currently building a boxship, down 96% (German yards alone accounted for 17% of the boxship orderbook in 1998 in TEU terms). Consolidation is a little stronger in the boxship sector than in the bulker and tanker sectors, with the ‘top 10’ yards accounting for 61% of the orderbook in TEU.
So, in total, there are currently 62% fewer yards ‘active’ than at the start of 2009. The largest drop has been in the bulker sector, but the number of active yards has also declined significantly elsewhere. Furthermore, 30% of currently active yards are set to complete construction of ships on their orderbook by the end of this year. With these trends in place, it will be no mystery as shipyard capacity continues to slide.
At the beginning of 2009, close to the peak of the current shipbuilding cycle, there were a total of 934 ‘active’ shipyards globally. This number has now dropped by 62% to stand at 358 yards as of start July 2017, the lowest number of active yards for many years. With a significant number of yards exiting the market, this month’s Shipbuilding Focus investigates the nature of the these changes.
Searching For Clues
An ‘active’ yard is defined here as one with at least one unit (1,000+ GT) on order, and a yard is active in a specific sector if it has a ship of that type on order. The number of ‘active’ yards can be a useful indicator of shipyard capacity, with the falling number of active yards contributing to the recent decline in capacity. It should be noted that many yards are active in multiple sectors, so the total number of active yards is not equal to the sum of the yards active in each sector.
The westbound Asia-Mediterranean trade will witness firm prices until the fourth quarter of the year when the anticipated phasing in of larger ships will pressurise spot rates, according to shipping consultancy Drewry.
Headhaul traffic in the first quarter 2017 was revised upwards so that it now shows growth of 5.6%, up from the original 3% assessment. New Container Trade Statistics data for April and May shows the growth story has got even better with year-to-date volumes up by 6.9% to 2.3 million TEU.
Exports out of Asia have been evenly distributed so far this year to the Western and Eastern regions of the Mediterranean, with the latter shading it by a mere 30,000 TEU. The growth rates to the two regions were more distinct with the East Med taking the spoils again with a rise of 8.9% after five months, versus 4.9% to the West Med.
Carriers have slightly reduced the available capacity on the Asia-Mediterranean route since the April start of the new alliances, primarily through void sailings, of which there were three in May and two in June, Drewry informed. For July and August capacity will again be trimmed slightly and will be down by around 1% on the same months one year ago.
Further ahead, Drewry estimates that 10 ships in the range of 5,000-9,000 TEU will be phased out to other trades, after cascading in of six 14,000 TEU ships and four 8,000 TEU ships from Asia-North Europe by the start of the fourth quarter.
“As a result, we expect net capacity on the Asia-Mediterranean route to increase by around 1% westbound in the fourth quarter over the third, which might reduce load factors and freight rates in the traditionally slower quarter,” Drewry said.
Very large gas carriers (VLGC) have seen their earnings dwindle 42 percent below trend, as the tanker market moved into negative territory in the first half of this year, Clarksons Research reported in a half-year review.
“The larger ships are feeling the biggest correction as fleet growth, particularly on the crude side, remains rapid and oil trade growth slows. Aside from a small pickup in the LNG market in recent weeks, the gas markets remain weak,” Clarksons claims.
"Some increased activity, project sanctioning and investor interest has not yet taken offshore off the ‘naughty step.'"
Ro-Ro seems to be the only sector above trend earning USD 18,458/day for a 3,500 lm vessel, 42 percent above trend.
Interest in ferry and cruise ship construction, including expedition ships, remains firm, with a record orderbook of USD 44.2bn.
Bulker earnings remain below trend, defined as the average since the financial crisis, but are showing signs of improvement. Capesize spot earnings moved from an average of USD 4,972/day in 1H 2016 to USD 13,086/day (75 percent below trend versus 33 percent below trend), Clarksons’ data shows.
“Indeed, based on the first quarter alone, Panamax earnings moved above trend for the first time since 2014 and we have certainly seen lots of S&P activity,” the review further adds.
“The containership sector has responded to the Hanjin bankruptcy with another wave of consolidation (the top ten liner companies now operate 75 percent of capacity) and some improvements, albeit with lots of volatility, in freight rates. Improved volumes, demolition and the re-alignment of liner networks, helped improve charter rates and indeed feeder containerships rates have moved above trend for the first time since 2011. Although some gains have been eroded moving into the summer, fundamentals for both these sectors suggest improvements in coming years but it may be a bumpy road!”
Clarksons is projecting full year growth of 3.4 percent (to 11.5bn tonnes and 57,000bn tonne-miles), with overall fleet growth of 2.3 percent still below trend but an increase on 1H 2016 (1.6%). Despite a pick-up in newbuild ordering to 24m dwt (up 27 percent y-o-y), this remains 52 percent below trend.
Norwegian Fosen Yard and China’s Hantong Shipbuilding agreed on July 7 to form a joint venture (JV) for building roll-on/roll-off passenger (RoPax), roll-on/roll-off (RoRo) and cruise vessels.
As informed, the new JV will be named Fosen Hantong and will become effective immediately.
The JV will utilize the technical, financial and market benefits of each party, Fosen explained.
With Hantong securing production capacity, production and financial support, Fosen Yards is to provide know-how and technical and operational solutions.
Fosen Hantong is expected to form a shipbuilding solution for the three above-mentioned sectors, offering “the joint complete value-chain.”
Hantong intends to dedicate a shipyard facility to the JV. The shipyard’s specific projects will as per the agreement between the parties be managed by Fosen.
Under the agreement, Hantong plans to cooperate exclusively with Fosen Yard for all business within the above-described segment initially for a period of eight years.
The duo is to establish a design and development company in Trondheim, Norway, with an aim to develop and provide marine design and technology.
The cruise ship fleet is set to grow by 50 percent in the following ten years as cruise liners are expected to resume their ordering spree especially for the mega cruise ships.
The current orderbook value stands at USD 47 billion, with 75 ships due for delivery by 2025.
European shipbuilders still dominate the market when it comes to constructing these floating cities, led by the major three builders, Fincantieri, Meyer Werft and STX France. Furthermore, Fincantieri is keen on cementing its foothold with the acquisition of STX France.
Fincantieri, including Vard, is building 29 of the 75 cruise ships due for delivery by 2025, Meyer Werft is contracted for 17, STX France for 12, and the new grouping owned by Genting Hong Kong – MV Werften – for six.
In total, 11 of the 75 ships on order will use LNG fuel at sea as well as in port: two for Royal Caribbean International, two for MSC Cruises, and seven for Carnival brands.
The result is that the current orderbook already represents another 250,000 berths being added to the global cruise fleet in the 10 years to 2025, increasing capacity by 40%.
With further orders inevitably to be placed for deliveries within the second half of that 10-year span, fleet capacity will probably grow at least 50% and push the global passenger total up from 24 million last year to 30 million by 2022, towards 35 million by 2026 and then 40 million by 2030.
In addition to the ever increasing number of cruise ships on order, the cruise lines are also investing heavily in refurbishment of their existing ships, with USD 1.5 billion spent on cruise ship refurbishment in 2016 alone.
“One innovation stands head and shoulders above all others when it comes to explaining the improved profitability of the cruise sector and its relentless drive for growth and that is the creation of the ‘mega-ship’. We can expect to see plenty more – and probably even larger – cruise ships in the future,” Cruise industry analyst Tony Peisley says.
According to Peisley, Genting Hong Kong’s purchase of four German yards will also eventually offer a welcome new option for other companies “frustrated by the full or fast-filling orderbooks of the other European shipbuilders.”
“Today’s order book reflects our industry’s expectation for long-term sustainable growth, with additional capacity coming in to match stronger demand for cruise holidays. Never before have cruise lines committed to new ship orders spanning over such a long period of time,” Gianni Onorato, Chief Executive Officer, MSC Cruises, said.