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.
The manufacturers and stakeholders in the ballast water treatment equipment market have taken a major step forward by codifying a unified manufacturers’ association.
The Ballastwater Equipment Manufacturers’ Association (BEMA) met on April 19, 2018 for their first Annual Meeting and elected the inaugural Board of Directors.
The paramount need for this association arose from the growing demand for well-founded information on the practicability of ballast water treatment technologies, as well as on the technical and environmental aspects of implementing ballast water management regulations worldwide.
Following the announcement of a further delay of the 2004 IMO Ballast Water Convention implementation dates, which occurred at MEPC 71, a group of industry insiders gathered in New York City to draw up the framework of what was to become BEMA.
The association moved from concept to reality with their first official meeting on March 9, 2018.
The attendees at this seminal meeting, made up of representatives of equipment manufacturers, industry stakeholders, and component suppliers from all technologies and regions of the world, voted on and adopted a set of draft Bylaws as well as other formation documents, setting the stage for selecting the organization’s Board of Directors and electing the first slate of association officers.
Singapore-based Pacific International Lines (PIL) returned to profitability in 2017 due to an increase in shipping revenue, container sales and initiatives which improved operational efficiency.
The company reported a net profit of USD 119.5 million for the twelve-month period ended December 31, compared to a net loss of USD 251.4 million seen a year earlier.
The company’s turnover for the period surged by 32 percent reaching USD 4.04 billion, compared to USD 3.07 billion reported in 2016, mainly driven by an increase in shipping volume, average freight rates and container sales.
The group’s container shipping business posted increases in shipping volume and average freight rates of 12% and 9%, year-on-year, respectively. This resulted in a 21.3% growth in the shipping business’ turnover. PIL also implemented initiatives which helped to increase operational efficiencies, with shipping expenses increased by only 9.3% in FY 2017 despite the much larger growth in revenue.
PIL informed that it is “encouraged by the recovery” that led to strong financial results, and expects overall market conditions to continue to improve in 2018, driving shipping volume, freight rates and container sales.
South Korean shipbuilder Hyundai Heavy Industries has set a target of KRW 70 trillion (USD 65.2 billion) in revenues by 2022, according to The Korea Times.
The target represents a big jump compared to KRW 37 trillion earned in 2017. The shipbuilder expects a revenue of KRW 37 trillion this year as well.
HHI plans to achieve the new goal by focusing on technologies to sell value-added ships, such as liquefied natural gas and LPG carriers, and launching new businesses, Kwon Oh-gap, HHI’s Chairman and Chief Executive, said during a press conference on April 16.
The company would establish a research and development center in Pangyo, Gyeonggi Province, which would help drive the company’s future success. The center, to be established by 2021, is expected to house up to 7,000 researchers and experts.
Furthermore, HHI is to unveil a new business initiative as early as next month, the chairman said, hinting that the company’s refinery unit Hyundai Oilbank could form a joint venture. Kwon Oh-gap confirmed that Hyundai Oilbank would launch its initial public offering in September or October, as the unit is currently selecting a lead underwriter.
Following the 2008 financial crisis, the Ulsan shipyard sold a number of its non-core assets and cut its workforce through voluntary retirement programs. Due to a quiet market demand, the shipyard would continue reducing jobs this year as well, the chairman informed.
Air pollution from sulphur oxides (SOx) emitted from ships has substantially dropped over the past years, a new compliance report issued by the European Commission shows.
As explained, this positive trend is the result of joint efforts by member states and the maritime industry to implement EU rules under the Sulphur Directive and opt for cleaner fuel.
EU mechanisms to technically and financially support member states to reduce emissions were an important factor in compliance, according to the commission.
Since 2015, stricter limits in the designated ‘Sulphur Oxides Emissions Control Areas’ of the North and Baltic Seas have more than halved emissions, while the overall economic impact on the sector remained minimal, the report says.
“Environmental rules deliver and protect our citizens’ quality of life when all sides involved work together to correctly apply them. The shared commitment by member states, industry, and the maritime community as a whole is paying off. People living around protected sea areas can breathe cleaner and healthier air. And we have preserved the level playing field for industry,” Karmenu Vella, Commissioner for the Environment, Fisheries and Maritime Affairs, commented.
The report comes days after the member states of the International Maritime Organisation (IMO) reached an agreement on a strategy to reduce greenhouse gas (GHG) emissions from international shipping by at least 50% by 2050.
Both are said to illustrate the commitment of the EU to the goals of the Paris Agreement and to a Europe that protects with cleaner air for all as exhaust gases from ships are a significant source of emission and impact on citizens’ health and the environment.