Policy and Regulatioin
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2016-07-26 15:13:48

US Customs and Border Protection (CBP), the largest agency within the Department of Homeland Security, has created the National Jones Act Division of Enforcement to enhance implementation of the Jones Act.

The new division, to be known by the acronym JADE, will be dedicated to making sure that the 1920 Act is observed. The Act has been focus of some controversy in recent times.

It requires all cargo vessels on internal US routes – meaning the nation's inland waterways or on routes between US ports (including ones beyond the contiguous 48 states) – must be US-built, US-flagged, US-owned and crewed by US citizens or resident aliens.

Calls for the requirements to be loosened have come from Hawaii, Alaska and territories such as Puerto Rico and Guam, their main claim being that the Act unfairly inflates the cost of imported goods to those states and territories.

But security hawks and US maritime industry representatives say that now more than ever the Act must be preserved in light of the global terrorism threat.

2016-07-26 14:38:50

The European Community Shipowners' Associations (ECSA) has supported the European Commission's newly published communication on a European Strategy for low-emission mobility which points out that all transport sectors, including maritime shipping, need to contribute towards reducing the EU's greenhouse gas emissions and air pollutants.

The communication calls for further work on the introduction of an "Energy Efficiency Design Index" for new ships engaged in international shipping.

The EU also affirmed its commitment to securing a mandatory global agreement for the collection and reporting of greenhouse gas emissions from international shipping in the International Maritime Organisation later this year.

The measures need to be complemented soon by an international agreement on an emission reduction objective for the shipping sector, according to the communication, which should be followed by measures to mitigate emissions in the international maritime sector.

The EU already has in place legislation that will, as from 2018, require ships that use EU ports to monitor, report and verify emissions. The EU may align this legislation in the event of an international agreement on a global system.

In relation to air pollutants, the Commission supports further measures by the International Maritime Organisation to reduce these emissions, such as the designation of additional Emission Control Areas and the implementation of a global cap on sulphur in fuel in 2020.

"We believe that shipping obviously must be part of the global solutions to limit the increase in the global temperature as we clearly are also a global contributor to the carbon emissions," said ECSA Secretary General Patrick Verhoeven.

"We fully agree with the aim of the EU to secure a robust and mandatory global agreement for the collection and reporting of greenhouse gas emissions from international shipping in the International Maritime Organisation as mentioned in the Commission's communication. We also look forward to seeing a proposal to align the EU MRV Regulation with the global system. Finally, we support the Commission in ensuring that IMO timely delivers on the next steps. We believe that a global agreement is both needed and possible."

2016-07-22 11:44:51

Hong-Kong listed shipping and logistics company China COSCO Holdings Co (CCHC) received on July 18 a subsidy amounting to CNY189m (USD28.3m) from China COSCO Corporation, the indirect controlling shareholder of the company, for the decommissioning and upgrading of its vessels.

The company said the subsidy will be recognized as a non-operating income and will be included in the profit and loss for this year.

China COSCO Holdings reported in April a major rise in its net loss from CNY1bn (USD154.1m) seen in the quarter ended March 31, 2015, to CNY4.5bn (USD690m) in the corresponding period this year.

The loss was mainly attributed to a weak demand in the container shipping market as the company's container shipping business recorded a loss of approximately CNY1.4bn. The loss was also assigned to the disposal of 100 percent equity interests in China COSCO Bulk Shipping Co., and 100 percent equity interests in Florens Container Holdings Limited, as well as to an imbalance of supply and demand in the dry bulk shipping market and low levels of freight rates, which affected the company's profit.

2016-07-15 14:16:38

The South Korean shipping company Hyundai Merchant Marine (HMM) has signed a Memorandum of Understanding (MOU) to join the 2M Vessel Sharing Agreement (2M VSA) starting from April 2017, upon finalizing negotiations and approval procedures in each country.

The company signed the MOU following agreements with bond-holders to adjust debt and shipowners to adjust charter-hire.

Signed between HMM and the 2M carriers, Maersk Line and Mediterranean Shipping Company (MSC), the MOU is a binding agreement regarding HMM's entry to the 2M VSA.

"By accessing 2M VSA network, HMM will be able to strengthen its service offering and achieve improved cost competitiveness. The 2M carriers will benefit from a reinforced service competency in Asia and improved network cover in the trans-pacific area," said the company.

HMM has now completed all conditions set out in the voluntary agreement with creditors from March 2016 and in accordance with the completion of such preconditions, "the planned debt-for-equity swap by creditors will be executed as planned."

"Based on the company's sound financial structure, HMM will put its utmost efforts into improving our service offering to clients and to continue increasing operational competency in the second half of this year to continue improving profitability of our company," HMM's spokesperson said.

HMM started discussions to join the world's largest alliance 2M in June after the company reached agreements with containership owners on 20 percent charter rate cuts and with owners of bulk carriers for 25 percent charter rate reductions, which are expected to take effect over the next three and a half years.

2016-07-15 14:10:39

The adoption of a decision that renders legally binding the commitments offered by fourteen container shipping companies, which brings more transparency to the maritime transport of containers price politics, "does not solve" the price fixing problem, according to the European Shippers' Council (ESC).

The decision, adopted by the European Commission on July 7, makes legally binding the commitments which were placed in order to increase price transparency and to reduce the likelihood of coordinating prices, as well as to stop the current inquiry made by the Commission about competition breach within container transport sector.

"The liner operator practice of announcing GRIs may have harmed competition and shipper's interests. In these commitments, the carriers proposed a new model of announcements. They will stop using GRIs, but will announce freight rates that include at least the five main elements of the total price," ESC said, adding that the price announcements would be considered as maximum prices for the declared period of validity and would not be made more than 31 days before their entry into force.

The purpose of this pledge is, according to the EC, "to increase the committal value of the parties involved, especially to the customers."

"However, this increased committal value does not take away shippers' serious concern that the new model may allow the parties to explore each other's pricing intentions and to coordinate their behaviour," ESC said.

The new model still enables the liner operators to test their new price policy without incurring the risk of losing customers and monitor whether or not they can reasonably implement this new price level. It also provides the operators with the ability to reduce strategic uncertainty and reduce the risk for losing competitiveness in the market, according to ESC.

2016-07-13 11:30:30

The prospect of the United Kingdom leaving the European Union has raised a number of questions regarding the status of sulphur regulations in the UK, according to the International Bunker Industry Association (IBIA).

The EU's sulphur regulations go beyond the minimum requirements of the International Maritime Organization's (IMO) MARPOL Annex VI. Although the EU and IMO regulations are aligned regarding the 0.10% fuel sulphur limit for ships operating within an emission control areas (ECAs), the EU Sulphur Directive has three key extra requirements.

Firstly, it sets a 0.10% fuel sulphur limit for ships berth in any EU port. Secondly, outside ECAs, there is a 1.50% sulphur limit for passenger ships on regular service between EU ports until 2020. And thirdly, the EU has decided that a 0.50% will apply within EU waters from 2020 regardless of the timing of the IMO's global 0.50% sulphur cap.

Until the UK's divorce from the EU is complete, which is not likely to happen before October 2018, EU regulations will continue to apply, however, the UK could, if it wants to, decide to replace the EU sulphur regulations and go for different requirements, either more or less stringent, after exiting the EU.

"The UK, as a party to Annex VI, would have to call for an amendment to the geographical reach of the ECA if it wanted to allow ships to use fuel above 0.10% sulphur along its eastern seaboard," IBIA said, adding that this "is not considered a likely scenario."

IBIA believes that, in theory, the UK could allow vessels to use fuels with up to 3.50% sulphur while at berth in the ports that are not inside an ECA, as well as in UK waters, until the global 0.50% sulphur cap takes effect.

"Should the UK decide to ease sulphur restrictions compared to the EU Sulphur Directive, there may be a potential for the UK's west coast to attract more shipping and boost activity in ports like Liverpool and Bristol, which could develop existing container and breakbulk hubs," said IBIA.

2016-07-08 13:54:53

China's Ministry of Industry and Information Technology (MIIT) has released a bulletin asking for opinions on proposed new regulations for domestic shipyards.

The proposed new regulations intend to improve the shipyard white list, which was unveiled in 2014, through adding new requirements.

According to the release, shipyards that haven't delivered ships and received new orders and haven't had ships under construction for more than one year, shipyards that haven't delivered ships and received new orders for more than two years, shipyards that have suspended operations and declared bankruptcy, and shipyards that have been acquired and lost legal independency, will all be removed from the white list.

So far, seven of the 71 shipyards on the white list have already suspended operations or declared bankruptcy including Rongsheng Heavy Industries, Sinopacific Offshore, Mingde Heavy Industry, Sainty Marine, JES International Holdings, Zhenghe Shipbuilding and Zhejiang Shipbuilding, while four affiliate shipyards of CSIC are currently under a merger process.

The new regulations also request the shipyards to submit a self-examination report every year and authorities will conduct investigations at the shipyards every two years.

2016-06-29 17:41:53

President Park Geun-hye today urged local politicians to ratify a stimulus package worth KRW20trn (US$17bn), including KRW10trn in extra budget, as the nation fights to save its beleaguered shipbuilding and shipping industries which have been shedding thousands of jobs over the past 18 months with more to go.

"To support the suffering citizens, the government has decided to draw up a supplementary budget," the president said.

She also warned that Brexit could bring additional stress to the Korean economy in the second half of this year.

2016-06-14 13:12:44

With close to 70% of all vessels being broken up in South Asia, the shipbreaking yards in Alang, India are one of the most important centers for ship recycling, therefore responsible practices at the site should be encouraged rather than dismissed, according to the European Community Shipowners' Association (ECSA).

At European level, the EU Ship Recycling Regulation could prove to be a game-changer as the EU list for recycling yards could be the‘carrot’that enables a fundamental change in the way recycling is carried out globally, ECSA said.

"Unfortunately, the signals sent from the European Commission are all but encouraging," said ECSA's Secretary General Patrick Verhoeven.

He added that the guidelines on which recycling yards have to base their application do not differentiate between hazardous and non-hazardous waste which de facto excludes all yards in India, even the most advanced ones.

"The EU now stands at a very important crossroad as regards responsible ship recycling. It can either be an enabler of development and reward pioneering Indian yards by giving them a fair chance to be on the EU list or it can confirm the view of many EU-skeptics and completely ignore important global developments," noted ECSA.

Following a study trip to Alang, India, ECSA said it witnessed the "investments made in a number of ship recycling yards to ensure compliance with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships."

Namely, the investments have been made to place concrete flooring, effective drainage systems, appropriate downstream management and more decent housing.

"Alang and other places in South Asia have for years been criticised for poor standards – and rightly so, but, a positive development has begun and this should be supported not undermined," ECSA President, Niels Smedegaard, said, adding that, while there are yards where improvements are necessary, others have already taken the lead in changing their recycling practices to reflect advanced modern standards.

2016-06-07 11:46:14

The member national shipowners' associations of the International Chamber of Shipping (ICS) have agreed to commence a co-ordinated campaign in an effort to persuade the European Union (EU) of the vital necessity of aligning its unilateral regulation on the monitoring of shipping's CO2 emissions with the mandatory worldwide CO2 reporting regime agreed by the UN International Maritime Organization (IMO).

The campaign is aimed at EU institutions, including Member States, Parliament and the European Commission, however, in addition to working closely with the European Community Shipowners' Associations (ECSA), ICS said it intends to enlist the support of non-EU governments including the United States, China and other Asian nations.

"Shipping is a global industry requiring global rules, in order to have a truly level playing field – otherwise we have chaos. ICS members greatly welcome the IMO CO2 reporting regime that was unanimously agreed by all IMO member states in April, as a precursor to further measures that will hopefully deliver a serious contribution from shipping towards reducing the world's CO2 emissions," said ICS Chairman Esben Poulsson.

The EU regulation on the Monitoring, Reporting and Verification (MRV) of ships' CO2 emissions was adopted in 2015 and would be fully implemented in three years' time. But all ships trading to Europe, including non-EU flag ships, will be legally required to comply with some of its provisions by as early as 2017, according to ICS.

However, the EU regulation contains a provision to the effect that the European Commission can propose adjustments to ensure alignment with any similar regime adopted by IMO.

"The key thing that really concerns the shipping industry is that if the EU refuses to realign its regime with IMO, as its own regulation permits it to do, this will be perceived by other governments as a sign of bad faith, which could then potentially inhibit the consideration of any additional CO2 reduction measures by IMO," added Poulsson.

The international shipping sector has cut its total CO2 emissions by around 10 percent since 2007, despite increased maritime trade, Poulsson said, adding that with oil prices having gone up some 80% since January, this reinforces how it is truly in every shipowner's interest to do everything possible to further reduce fuel consumption and thus cut CO2.

"It's worth reiterating, yet again, the industry's strongly held view that as a global industry we need a global framework. Only IMO is equipped to provide this," said he.

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