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22 September 2009
A free fortnightly publication produced by Maritime London
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Difficult times
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Deirdre Littlefield, president of the International
Union of Marine Insurance (IUMI) painted a gloomy picture
of the industry on the eve of last week's IUMI annual conference
in Bruges with a prediction of more shipping companies failing.
She said: “The shipping industry generally
is admitting that conditions remain dire and short-term
prospects bleak. Every sector is in trouble despite one
or two bright spots. A lot of companies have already folded
or filed for bankruptcy, and more will follow.”
According to Ms Littlefield this is putting
considerable pressure on marine insurers who are trying
to cope with greatly reduced ship and commodity values,
and far fewer ships trading as an increasing number go into
lay-up or lie idle, not to mention a rise in claims resulting
from an increase in costly partial losses, returns of premium
for vessels in cold lay-up, and the leaking of money down
the “seemingly bottomless piracy drain”.
She continued: “The number of total losses
may have stabilised, as the facts and figures committee
will reveal on Monday, but overall the claims picture is
very worrying. Repair prices remain high, which may put
further pressure on owners to defer essential repairs and
maintenance, to the detriment of underwriters.”
As normal the London marine insurance market
was well represented at IUMI, with the largest number of
participants - underwriters and officials from Lloyd’s and
the International Underwriting Association of London. It
is believed that the 53 underwriters from Lloyd’s is a record
number for a IUMI conference; 19 IUA underwriters attended.
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International Chamber of Shipping (ICS) chairman
Spyros M Polemis has called for new thinking on piracy.
At a recent meeting of the ICS Executive Committee, ICS
members “expressed their continuing appreciation of the
determination shown by naval forces providing protection
to merchant ships that continue to be attacked by pirates
off the coast of Somalia and in the Indian Ocean”, a statement
said.
“However”, warned Mr Polemis “while the current
levels of military protection must be sustained, or better
still increased, there is a danger that the current arrangements
may become ‘institutionalised’. We agreed that some serious
new strategic thinking is needed if governments are to suppress
piracy in the near future. While we support efforts to establish
a stable government in Somalia, this could well take years
if not decades. The unacceptable situation prevailing now,
where the lives of seafarers are threatened on a daily basis,
and many pirates still operate more or less with impunity,
cannot be allowed to continue.”
In the run up to the United Nations Climate
Change Conference, in Copenhagen in December, the Committee
expressed satisfaction with “the real progress” already
made by governments, at the IMO, in developing a package
of measures to reduce shipping’s CO2 emissions, with an
agreed timetable for adoption.
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All eyes on Copenhagen
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ICS “confirmed the industry belief that the
achievement of meaningful CO2 emissions reductions will
best be achieved if nations agree that the development of
detailed measures for the international merchant fleet are
directed by governments at IMO, but in line with the outcomes
on global CO2 reduction that will hopefully be agreed by
the UN in Copenhagen”.
“All the ingredients are there, we just need
UNFCCC to provide IMO with a continuing mandate to complete
its important work.” said the ICS chairman. “Most governments
recognise that emissions from international shipping cannot
be attributed to any particular national economy,” added
Mr Polemis. “The delivery of significant emissions reductions
will therefore require that any measures adopted for shipping
are applied on a global and uniform basis in order to avoid
any ‘carbon leakage’. Such measures can only be realistically
delivered by IMO, which has a successful track record in
producing international rules for shipping that are enforced
worldwide.”
Meanwhile UK-based BAE systems has launched
a new device aimed at protecting merchant ships from pirates.
According to press reports the gadget can incapacitate at
a distance of 1,000 yards without causing permanent injury.
The Laser Dazzle System is being marketed with the Somali
pirate threat in mind seized a number of vessels off the
coast of East Africa.
According to the Telegraph
other anti-piracy systems displayed at the recent Defence
Systems & Equipment International in London included a radar
that can detect a small boat 15 miles away, and another
device that can close down a vessel's engine remotely.
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A
report in last week’s Times (17 September) highlights
the growing demand for UK specialist maritime lawyers as
the shipping industry grapples with the continuing downturn.
The report cites Maritime London members Ince & Co and Holman
Fenwick Willan as two firms taking on young lawyers to help
cope with the volume of work.
The article looks at the reasons behind the
preference for England as the preferred jurisidiction for
contracts and dispute resolution and the complex network
of relationships in the shipping sector and also features
commentary from Watson Farley & Williams, Norton Rose, Clyde
& Co.
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Provisional UK government figures show a marked decline
in traffic through British ports. Total port traffic was
7% down on the four quarters ending Q2 2009. Inward traffic
was down 8% and outward traffic down 6%. The number of units
handled was down 11%. Inward traffic was down 14% and outward
traffic down 8%. Taking the latest quarter, Q2 2009, compared
with same quarter of 2008, total traffic in quarter was
down 13%. Inwards traffic fell by 14%, whilst outwards traffic
fell by 11% Unitised traffic was down 15% compared with
the same quarter in 2008. Inwards unitised traffic was down
16% and outwards unitised traffic was down 14%.
The figures are provisional, but the Department
for Transport says: “The provisional figures for freight
traffic at each major UK port in Quarter 2 2009 are based
on those ports which had made returns for Q2 2009 at the
time of publication. Only one sender had not yet reported,
and so these figures are based on almost 100 per cent of
total expected traffic.”
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The Standard P&I Club has produced a special issue of its
Standard Safety newsletter highlighting the “fact that collisions
and groundings affect even the best managed and operated
companies that put significant resources into training and
supplying the best equipment”.
The club says that its statistics confirm
the wider industry experience that even with new technology
and various bridge training courses now available, collisions
continue to occur. Collisions happen to all types of ships,
trades and operating companies. The best operated companies
that carry out rigorous training and officer development
are also experiencing navigational incidents. The club asks
itself the question: “Is it still possible today, with the
modern technology available, to have collisions and groundings
that, when analysed, are usually caused for the simplest
of reasons?”
It further asks whether Bridge Team Management
/ Bridge Resource Management ) training courses are the
answer. The club's conclusion is that despite all the new
aids to assist the bridge navigators, the human elements
of lack of experience and knowledge, lack of correct bridge
management and leadership, and a mixture of fatigue, overconfidence,
negligence, and poor communication, training and shore management
all combine so that major navigational incidents still happen.
The club says that BRM or BTM training courses
are now often a requirement for many members.
The club says in a comment with major implications:
“Additional bridge training is of course a welcome response
to the declining standards of the navigating officers, the
increase of trade, bigger ships with deeper draughts, falling
pilotage standards, and the cultural and language diversity
of the officers on the bridge. But is it improving the basic
navigational watchkeeping standards?”
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The world fleet of oil, chemical and gas tankers is predicted
to continue to grow over the next five years, although
at a much more sluggish rate than the previous five years,
according to a Shipbuilding Market Report issued this
month by Maritime London member Lloyd’s Register - Fairplay
(LR Fairplay).
The oil tanker fleet, which currently stands at 7,516
ships, is expected to grow by 1.9 percent per year over
the next five years in terms of the number of ships. Deadweight
ton (dwt) capacity will rise by 5.7 percent annually over
the same period, reflecting a movement toward larger ships.
New shipbuilding orders for oil tankers will amount to
76 million dwt through the end of 2013, a 60 percent decrease
from the shipbuilding binge of the last five years.
“The volume of seaborne oil is set to grow next year,
although not at the same pace as fleet capacity,” said
Niklas Bengtsson, project manager and senior consultant
for LR Fairplay. “The record number of shipbuilding orders
in 2006 means that a large number of ships are being delivered
to owners this year. The gap between supply and demand
will therefore continue to grow, which is likely to generate
an increasing fleet of idle vessels.”
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Shipyards are still churning
out ships
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The chronic overcapacity in tanker tonnage will accelerate
the scrapping of older ships. Removals of oil tankers
through year-end 2013 will amount to 50 million dwt, which
is up by 10 percent compared to the previous five years.
While relatively few new orders are being placed for tanker
tonnage, the LR Fairplay report predicts new orders to
amount to 76 million dwt over the next five years – a
60 percent decrease from the last five years.
The prospect for chemical tankers is somewhat rosier,
according to the LR Fairplay study. The current fleet
of 4,619 ships will grow by 8 percent annually over the
next five years.
The growth curve for the liquefied petroleum gas (LPG)
sector will also flatten. The LPG fleet currently stands
at 1,166 ships with a total capacity of 18.7 million cubic
meters (m³). The fleet grew by 13 percent last year, but
the rate will slow to 4.6 percent this year. In 2010 and
2011, the rate will fall to 1.6 percent and 0.9 percent
respectively. New tonnage deliveries and expected delays
in LPG production will result in a rise in recycling of
older ships and use of idle ships for floating storage.
The relatively small fleet of 321 specialized liquefied
natural gas (LNG) carriers faces grim prospects with the
current utilization rates of 60-65 percent falling even
further as increasing numbers of new ships are delivered
ahead of the projects they were intended for. The oversupply
is likely to bottom out next year as the delayed liquefaction
projects come on stream, and the fleet will grow by an
average of 3.8 percent annually through 2011. Ordering
for the 2009-2013 period is forecast at 174 new LNG carriers,
10 percent lower than the last five years.
The LR Fairplay report notes that South Korea continues
to dominate the world tanker production market with 51
percent of the tonnage on order. China comes in a distant
second with 25 percent, and Japan is in third place with
16 percent. If measured in the number of ships, however,
South Korea’s market share is just 35 percent, with China
at 28 percent.
Shipbuilding Market Forecasts are published monthly by
LR Fairplay Research. Each report examines a specific
sector of the world shipping market, providing a detailed
five-year shipbuilding forecast, including new orders,
deliveries and demolitions, with a comprehensive presentation
of graphs and tables.
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North of England P&I Club
management changes
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Alan Wilson and Paul Jennings have become joint managing
directors of the North of England P&I Club following the
retirement of Rodney Eccleston after 21 years at the helm.
According to a
report by nebusiness.co.uk, the club believes it can
create around 60 jobs at its Tyneside headquarters and
grow its turnover by a third to £240m. The article reports
that the company is currently expanding its head office
and saw its annual sales from £154m to £180m in the 12
months to February 2009.
The club currently insures a global fleet of 3750 ships
entered by a total of 350 member groups. The club is based
in Newcastle-upon-Tyne with regional liaison offices in
Hong Kong, Piraeus and Singapore.
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As part of its investment in its manned model ship handling
facility at Marchwood Lake, Warsash Maritime Academy has
taken delivery of a new 1:25 scale radio controlled tug.
It represents a 32 metre long tug with a bollard pull
of 100 tons and has two steerable nozzles and twin bow
thrusters to enable various complex tug manoeuvres to
be carried out on the lake either for berthing, in emergencies
or as an assist tug for single buoy moorings.
The design and construction was carried by Mobile Marine
Models of Lincoln who are specialist model tug builders.
In the winter of next year the operation will be moved
to a new lake at Timsbury, near Romsey. The £1.5m move
and other upgrades are intended to keep the facility,
one of very few like it in the world, at the cutting edge
of maritime training.
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Maritime London will once again be showcasing a range of
UK maritime service providers at Posidonia 2010 (7-11 June)
within a trade pavilion in one of the busiest areas of the
tradeshow. Participating companies will be provided with
fully equipped booth areas and full use of a lounge area.
Most of the space within the pavilion has
already been taken up, but a couple of stands are still
available. Contact Bill Lines for further details.
E: blines@maritimelondon.com
T: 020 7369 1653
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Membership of Maritime London continues to grow with security
firm Securewest International,
accident investigators RTI
and consultancy Noble Marine joining this month.
Membership of Maritime London can be a good
way for companies active in the maritime services sector
to raise their profile with Maritime London organising a
range of overseas promotional activity and holding regular
networking events in London.
For further details, please contact Doug Barrow.
E: dbarrow@maritimelondon.com
T: 020 7929 4999
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The London Shipping Law Centre (LSLC) has moved to International
House, 2nd Floor, 1 St Katharine’s Way, E1W 1TW. It is sponsored
by Reynolds Technological Inquiries (RTI) which provides
office space to the centre.
Welcoming RTI’s support, LSLC founder Dr Aleka
Mandaraka-Sheppard and co-directors, Roger Holt, Jonathan
Lux and Struan Robertson said: “We share a commitment to
safety and high-quality in shipping services that will enable
us to work together from the City of London to increase
knowledge, enhance networking for our members and supporters
and contribute to maritime education within the shipping
industry in London and around the world. LSLC will be renamed
‘The Shipping Law & Business Centre’ to reflect its wider
than law remit”.
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