The Round Table of international shipping associations has called for the establishment of a United Nations force of armed military guards to tackle the piracy crisis in the Indian Ocean, which it says is “spiralling out of control”.

The move comes as more shipping companies routinely take on private sector armed guards for ships transiting the danger areas in the Gulf of Aden. While there are now industry guidelines on the use of private guards there is still widespread unease about carrying them on merchant ships.

In a hard hitting letter to UN Secretary-General Ban Ki-Moon, the International Chamber of Shipping (ICS), BIMCO, INTERTANKO and INTERCARGO demand a "bold new strategy" to curb rising levels of piracy which have resulted in the Indian Ocean resembling "the Wild West". The letter states: "It is now abundantly clear to shipping companies that the current situation, whereby control of the Indian Ocean has been ceded to pirates, requires a bold new strategy. To be candid, the current approach is not working."

Regretting the increasing necessity for shipping companies to employ private armed guards to protect crew and ships, the letter continues: "It seems inevitable that lawlessness ashore in Somalia will continue to breed lawlessness at sea."

The shipping industry organisations - which represent more than 90% of the world merchant fleet - say they fully support the UN's long-term measures on shore aimed at helping the Somali people but are concerned that these "may take years, if not decades, to have a meaningful impact on piracy."

Asking the UN to bring the concept of a UN force of armed military guards to the attention of its Security Council, the letter says: "The shipping industry believes that the situation can only be reversed with a bold approach that targets the problem in manageable pieces. We believe that an important element in this approach would be the establishment of a UN Force of Armed Military Guards that can be deployed in small numbers onboard merchant ships. This would be an innovative force in terms of UN peacekeeping activity but it would do much to stabilise the situation, to restrict the growth of unregulated, privately contracted armed security personnel and to allow those UN Member States lacking maritime forces - including those in the region most immediately affected - to make a meaningful contribution in the area of counter-piracy."

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International charities Oxfam and WWF are lobbying EU ministers to back a proposal deal to apply a “carbon price” to international shipping at the UN climate change conference in Durban, South Africa, later this year. The European Commission and EU politicians have so far favoured an emissions trading system but the carbon price proposal is much closer to the levy preferred by much of the global shipping industry.

A new joint report claims that applying a carbon price of USD25 per tonne to bunkers would help cut emissions while generating USD25bn per year by 2020. According to the NGOs the cash generated would be used both to compensate developing countries for marginally higher import costs that could result from the carbon price, and to provide more than USD10bn per year to the Green Climate Fund (GCF). The GCF was established at last year’s UN climate conference in Cancun, Mexico, to channel funds for tackling climate change to developing countries but is currently empty. The two organisations say that the EU could “broker a deal to tackle the huge and growing greenhouse gas emissions from ships and raise billions of dollars to help developing countries tackle climate change, without unfairly hitting their economies”.

The report, “Out of the Bunker – Time for a fair deal on shipping emissions”, says the carbon price would only increase the costs of global trade by 0.2% - equivalent to just USD2 for every USD1,000 traded. South Africa whose import costs are projected to increase by 0.14 per cent as a result, would receive compensation of approximately USD200m per year, while Bangladesh whose import costs are projected to increase by 0.19% would receive USD40m per year, in addition to any revenues received from the Green Climate Fund. Oxfam and WWF argue that this money should be spent building the resilience of the poorest and most vulnerable people in each country.

An International Chamber of Shipping (ICS) spokesperson said: “ Our approach is not too dissimilar to that advocated by Oxfam and WWF. If governments decide to develop a Market Based Measure (MBM) for shipping, which is already currently part of the IMO work programme, then the industry will co-operate and play its part. If an MBM is developed by IMO, the clear preference of the majority of the global industry - as agreed amongst the member national shipowner associations of ICS - is for an environmental compensation fund linked to fuel consumption, rather than an emissions trading scheme, since this is the option that most ship operators could probably live with.”

The spokesperson stressed: “We believe such an MBM must be developed at IMO so that it applies to all ships, not just those of developed countries. While the industry is willing to play its part, and must accept the political realities that emerge, it is wrong for environmental groups or governments to view the shipping industry as a ‘cash cow’, that can somehow substitute for the efforts that must be made by other industries. Any money collected from shipping must be proportionate to shipping’s carbon emissions. We seriously doubt that raising money from shipping will somehow further incentivise emissions reduction, since the existing high price of bunkers – which is expected to increase dramatically due to the new requirements for low sulphur fuel –already provides ship operators with every incentive they need.”

The Oxfam/WWF report is dismissive of the technical measures recently agreed at IMO. It says: “Some of these technical measures [which Oxfam and WWD believe to be achievable]may be leveraged through the efficiency standards for new ships recently adopted in the IMO. But important though this step is, it applies only to new ships, and will reduce emissions by barely1% compared with business-as-usual in 2020.”

ICS says that the Oxfam/WWF report underestimates the significance of the new Ship Energy Efficiency Management Plans that must be implemented by all ships from 2013, and the fact that the industry is confident that it can deliver emission reductions, per tonne of cargo carried one km, by at least 20% by 2020.

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Shipowners must be alert to any attempt by shippers and other cargo interests to claim exemptions from the International Maritime Solid Bulk Cargoes (IMSBC) Code when carrying of DRI (Direct Reduced Iron) cargoes, the London P&I Club has warned.

The club has advised its members that any suggestion that an exemption from the requirements of the IMSBC Code will be invoked should be reported to it immediately. The club notes that long-standing concerns about the carriage of DRI - involving the possibility of a chemical reaction between the cargo and water, leading to the risk of fire and explosion - prompted the introduction of specific provisions for the carriage of DRI in the IMSBC Code. Under these provisions, DRI cargoes should have a maximum moisture content of 0.3 per cent and be carried under an inert gas blanket, and ships carrying DRI should be capable of maintaining oxygen levels of below 5 per cent throughout the voyage.

Attempts to allow certain grades of DRI – principally those shipped from Venezuela and Trinidad – to be carried with significantly higher moisture contents and/or without the need to deploy inert gas, have been rejected by IMO.

The London Club says that, despite this, it is aware that attempts have been made by a Trinidadian company to ship HBI Fines (now known as DRI C) without complying with the mandatory requirements of the IMSBC Code. The Trinidadian shipper apparently relied on a provision in Section 1.5 of the code, which contemplates the possibility of alternative carriage arrangements by stipulating, “Where this code requires that a particular provision for the transport of solid bulk cargoes shall be complied with, a competent authority or competent authorities (port state of departure, port state of arrival or flag state) may authorise any other provision by exemption if satisfied that such provision is at least as effective and safe as that required by this code.”

The Trinidadian shipper offered an exemption certificate from the competent authority in Trinidad for the carriage of DRI C with a moisture content above 0.3 per cent and suggested that the cargo could be carried safely if the holds were mechanically ventilated to prevent the build-up of hydrogen. But Ian Barr, a claims director with the club's manager A Bilbrough & Co, says the club doubts whether mechanical ventilation can ever be regarded as being ‘at least as effective and safe’ as the use of an inert gas blanket.

Writing in the latest issue of the club’s StopLoss Bulletin, Mr Barr says, “As most bulk carriers likely to carry DRI will have only ‘natural’ ventilation, hold fans would have to be fitted at the load port. The club has seen documents suggesting that, on at least one occasion, the fans proposed were not certified ‘explosion-proof’, meaning that they had not been specifically designed for use in flammable atmospheres and could be a possible source of ignition. Also, the fans appeared to be too small and were badly sited, limiting their ability to prevent the accumulation inside the hatch coaming of any hydrogen given off by the cargo.”

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Shell and engine designer and manufacturer Wärtsilä have signed a Joint an agreement aimed at promoting and accelerating the use of liquefied natural gas (LNG) as a marine fuel. The agreement was signed in August and “will run for several years”.

A statement says: “Supplies of low cost, low emissions LNG fuel will be made available to Wärtsilä natural gas powered vessel operators, and other customers by Shell. The Joint Cooperation Agreement will focus first on supplies from the US Gulf Coast, and then later expand their efforts to cover a broader geographical range.”

Wärtsilä has long been involved in the development of dual-fuel engine technology, allowing the same engine to be operated on both gas and diesel fuel. It says that, when running in gas mode, the environmental impact is minimized since nitrogen oxides (NOx) are reduced by some 85% compared to diesel operation, sulphur oxide (SOx) emissions are completely eliminated as gas contains no sulphur, and emissions of CO2 are also lowered. Natural gas has no residuals, and thus the production of particulates is practically non-existent.

"It's an exciting time for the industry to have Shell, a major player, committed to increasing the availability of clean natural gas as a marine fuel. The marine community is becoming increasingly aware of the benefits provided by Wärtsilä natural gas engines as a means of reducing both costs and the environmental footprint. Natural gas engines represent a rare win-win, capturing emissions reduction and operational savings," says Christoph Vitzthum, group vice president, Wärtsilä Services.

"Clean, safe natural gas represents a true shipping paradigm shift; years ago it was sail to steam, then came the move from steam to diesel, and now it's a new era for gas propulsion," says Jaakko Eskola, group vice president, Wärtsilä Ship Power.

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Will scrapping levels help to offset newbuilds?

London-based Braemar Seascope says its demolition brokers are working extra hard this year and this “may be good news for everyone”. The shipbroker reports that dry cargo demand growth is running at strong levels due to the twin processes of industrialisation and urbanisation in emerging markets.

Annual average demand growth between 2011 and 2015 is likely to match and may even exceed the annual 5.2% growth witnessed between 2004 and 2008 – the years of the superboom in dry cargo vessel earnings.

However, cautions Braemar, the massive amount of vessel ordering during and after the boom has led to the currently depressed freight market for dry bulk carriers. Bulker fleet gross growth (i.e. counting new deliveries but not scrapping) is likely to be in the order of 12% a year until 2013 as we add more than 3,000 newbuildings to the circa 8,100 ships that existed at the end of 2010.

“But,” says Braemar, “scrapping can make a difference in these markets. In order to bring net fleet growth (i.e. deliveries minus deletions) into line with demand growth expectations, every bulk carrier built before 1985 - nearly 1,500 ships – would have to be scrapped by the end of 2013. This would bring fleet growth down to an average 6.3% a year. In other words, to return supply and demand growth to balance, the industry must scrap 12 bulk carriers every week for the next two years and four months without ordering any further bulkers for delivery before 2014.”

Braemar says: “The good news is that demolition at these levels is less outlandish than it may seem. According to the Braemar Seascope Demometer, 409 bulk carriers totalling almost 20 million dwt were sold for demolition in 2011 up to the end of August, at a rate of over 11 a week. This amount of scrapping far exceeds previous records of 11.8m dwt in 1999 and 11.2m dwt in 2009. If scrapping continues at this rate for the balance of 2011, some 29m or 30m dwt will be removed from the bulk carrier fleet, offsetting the 85m dwt Braemar Seascope expects to be delivered in 2011.”

Braemar Seascope research manager Mark Williams, says: “There’s a good chance that bulk carrier fleet growth can be kept down to 9% this year if these levels of scrapping keep up. We just have to hope that the global economy pulls out of the doldrums and that demand keeps up with expectations.”

Meanwhile Braemar has also revealed that containership orders are increasing at a “dramatic rate”. Its figures show that since the beginning of this year 52 containerships of 10,000TEU or larger have been ordered – compared to just 10 vessels from this size band for the whole of 2010 and zero of this size in 2009. This year’s containership orders add 765,000TEU to the post-panamax boxship orderbook. As of 30 August 2011, the total number of vessels of this size on order reached 158 ships, totalling 2.13mTEU which represents 48% of the fully cellular orderbook.

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The European Council of Ministers has tightened its sanctions to restrict trade with Syria. In its latest Sanctions Update, the Standard Club warns the measures are set to have a considerable impact on EU member states and shipowners seeking to import Syrian oil or petroleum products. Performance of contractual obligations concluded before 2 September will be permitted but only up to and including 15 November.

EU Regulation 442/2011 froze the assets of persons identified by the EC as being responsible for violent repression against the civilian population. The sanctions will also now apply to persons and entities benefiting from or supporting the regime, or persons and entities associated with them.

The club warns that regulation 878/2011 also now prohibits the purchase, import or transportation of Syrian crude oil and petroleum products including gaseous hydrocarbons. This prohibition includes P&I, hull and cargo insurance and applies to all Syrian petroleum products whether or not in bulk. The move has led the Baltic Exchange to suspend its TD11 assessement (Banias-Lavera), replacing it with TD 19 a Turkey/France assessment.

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London-based law firm Ince & Co reports that the Hong Kong Court handed down two significant judgements on Friday, 26 August. Ince says that Mr Justice Anselmo Reyes, the Hong Kong Judge in charge of Admiralty cases, set aside the arrest of the vessel Hong Ming in Hong Kong by the intended purchasers for a dispute under an MOA, and ordered an inquiry into damages on grounds that the arrest was wrongful.

Ince says that, firstly, the ruling establishes that a dispute under an MOA does not usually give the intended purchaser a right to arrest the vessel under Hong Kong law. Secondly it is a rare example of an arrest being deemed wrongful entitling the shipowner to damages under Hong Kong law. Then that same day Justice Reyes handed down his judgement on liability for the collision between the vessels Pontodamon and He Da 98 following a three day hearing the week before.

According to Ince & Co, the Pontodamon/He Da 98 judgement is also significant as it was handed down after what is believed to have been the first full collision liability trial in Hong Kong and is a rare example of one vessel being found solely (100%) to blame for a collision between two vessels which were both underway and making way, and on crossing courses at the time of impact. Ince & Co’s Hong Kong office acted for the successful parties in both cases.

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Seafarers’ charity the Marine Society has launched a new web-based maths development programme designed to address the needs of ratings who seek career advancement. Mathsatsea.com has been designed by specialists in nautical education and uses examples and language to which seafarers can relate.

The Marine Society says that it recognises that many ratings have not been in a formal learning environment for some time and that the prospect of returning to a classroom can be daunting. It cites evidence shows that lack of self-confidence, particularly as far as tackling maths is concerned, can be a formidable barrier to career progression.

Marine Society director Brian Thomas said: “There is a clearly identified need for this programme that will do much to help individuals, colleges, and sponsoring companies. Feedback from those who have road-tested the programme is overwhelmingly positive. Whilst this project is intended to be primarily for ratings returning to formal learning after years away, it might be that we go forward and develop a complementary programme that supports MN Officer Trainees as a pre-joining course to nautical college.”

The charity worked closely with South Tyneside Marine College to identify common areas of weakness and specialist maritime eLearning provider CoracleOnline.com to create the content and manage online registration and assessment.

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