Policy and Regulatioin
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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.

2016-05-25 11:36:06

Seoul has moved to ease the burden on hard-hit subcontractors working at the country's struggling shipbuilders. The government is looking to give tax cuts and waive mandatory insurance fees to subcontractors to help ease the pain as they get hit hard from the restructuring at yards in South Korea.

South Korea's Financial Service Commission has also said it will provide loans to shipyards to ensure they can complete their orderbooks amid the greatest shipbuilding crisis to hit the local yards scene in a generation.

All of the nation's largest yards have entered restructuring while a number of smaller yards have shuttered in the past 18 months.

The situation is mirrored in other yards across the world. A recent report from Danish Ship Finance (DSF) suggested some 200 yards around the world would close this year, leaving some 530 yards building ocean going ships by the end of 2016.

2016-05-17 16:31:28

Iranian oil tankers face no more obstacles when traveling to any port in world, says Ali-Akbar Safaei, managing director of the National Iranian Tanker Company (NITC).

According to Safaei, quoted by IRNA news agency, NITC has secured all the required certificates from international insurance agencies for its tankers, thus removing the insurance-related hurdles and enabling its ships to dock at any port worldwide.

Unimpeded entrance to Iran's ports by foreign tankers is also to be ensured, now that there are no pending insurance problems, he added.

As informed, talks are also nearing conclusion between Iranian shipping lines with international insurance companies on obtaining the most competitive insurance policies.

Due to the latest turn of events, NITC said that it expects to return to European ports in June this year after over four years of suspension.

2016-04-29 15:13:20

The German Shipowners' Association (VDR) endorses the resolution adopted by the International Maritime Organization (IMO) to make it mandatory in future for all vessels to record their CO2 emissions.

"In Paris, the community of states reached a consensus in December on climate protection targets within national borders – now the IMO member states have adopted the same policy for vessels sailing the global seas," said Ralf Nagel, Chief Executive Officer of the VDR. "The fact that all states on the IMO Marine Environment Protection Committee (MEPC) have adopted the mandatory CO2 data collection policy despite the controversial discussion involved once again underscores the ability of the IMO to act as a global legislator for maritime shipping."

The resolution provides for shipping companies to transmit data on fuel consumption, distances travelled and the number of operating hours of their vessels via the respective flag state of the ships to the IMO in London for evaluation purposes.

"It's important first of all to have the CO2 data of all ships collected and analysed by the IMO. Only if we have sound, solid data does the discussion really make sense regarding suitable objectives and measures to reduce the already low CO2 footprint of maritime shipping even further," said Nagel.

The official acceptance of the addendum to the International Convention for the Prevention of Pollution from Ships (MARPOL) by the MEPC in October is considered to be a mere formality.

Mandatory climate protection regulations already apply to maritime vessels. According to the relevant rules, newbuilds will need to meet ever increasing efficiency standards step by step and will be using 30% less fuel per ton-kilometre from the year 2025. Additional factors are parameters laid down for energy-efficient ship operation.

Maritime vessels are the most efficient means of transport available. With ships reflecting an average age of nine years (world fleet: 14 years), German shipping companies are reported to have one of the world's most modern maritime fleets.

2016-04-27 13:32:07

South Korean government is launching a corporate restructuring plan targeting its financially-troubled industries, including its shipping and shipbuilding sectors.

The move comes amid the need to push harder the restructuring of vulnerable industries hit by a global slowdown to reduce overcapacity and boost long competitiveness, especially since business conditions have continuously deteriorated.

In a three-track plan revealed by the country's financial regulator, the Financial Services Commission explained the steps to be taken to help the distressed companies.

Under the plan, a consultative body of government officials would set a direction for groups proceeding with restructuring, companies would be sorted out through credit evaluations and industries with overcapacity restructuring and reshuffling would be encouraged to carry out voluntary and preemptive reshuffling.

Specifically, with respect to the country's big 3 shipbuilders, the regulator said that Daewoo Shipbuilding & Marine (DSME) will be required to submit layoffs and cost savings. The shipbuilder's counterparts Hyundai Heavy Industries (HHI) and Samsung Heavy Industries (SHI) would have to pursue self-rescue plans with their creditor banks.

With respect to shipping, Hyundai Merchant Marine (HMM) is to be provided with support for business normalization from creditors, strike a deal with ship owners to lower charter rates and reach an agreement with bondholders to restructure the debt.

On the other hand, Hanjin Shipping applied for a debt restructuring agreement with creditors on April 25. The creditor group will review the proposal and make a decision on whether it will initiate the procedure or not.

As disclosed, the procedure will proceed in accordance with the same principle applied to HMM.

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