Alphaliner newsletter no 38 2017 by AXSMarine

ALPHALINER

Volume 2017 Issue 38 13.09.2017 to 19.09.2017

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Chart of the week

1.1%

1.3%

2.0%

2.7%

3.0%

3.4%

3.5%

-6% ALPHALINER

-8%

-9.5%

-4%

-3.7%

-2%

-1.7%

-0.5%

HMM

MOL

Yang Ming

K Line

OOCL

NYK

Hapag-Lloyd

Maersk

COSCO

-10%

EMC

Figures in US$ millions, converted from reported results for container shipping and related businesses only. EMC not consolidated for full Evergreen Group shipping business. Results for MSC, Hamburg Süd and PIL are not available.

Wan Hai

10,169 1,401 951 2,335 6,084 11,593 4,900 2,912 2,884 2,535 2,071 3,153 1,921

ALPHALINER

Zim

CMA CGM Zim Wan Hai EMC COSCO Maersk Hapag-Lloyd NYK OOCL K Line Yang Ming MOL HMM

CMA CGM

Revenue

10%

Margin % 7.1% 5.3% 3.5% 3.4% 3.0% 2.7% 2.0% 1.3% 1.1% -0.5% -1.7% -3.7% -9.5%

Operating Margin %

Carrier

Core EBIT 724 74 34 79 185 308 97 39 31 -12 -36 -116 -183

5.3%

• 1st half 2017 Earnings Scorecard

7.1%

Main carriers’ operating profit margin : Jan-Jun 2017

1H 2017 earnings rebound INSIDE THIS ISSUE: Carriers earnings improve in 1H 2017

Corporate Updates CMA CGM tops earning table - goes for new megaships

Service Updates 4 Transpacific extra-loaders curb rate increases FMC clears the establishment of THE contingency fund Hapag-Lloyd & MSC team up on new Med-ECSA service X-Press Feeders adds Straits-Western India link Evergreen introduces two additional Intra Asia services THE Alliance shifts Savannah call on Transatlantic link CNAN Nord to relaunch regular USAlgeria service CMA CGM streamlines Guyanas & Suriname coverage UFS adds Turkey-Algeria & Tunisia service Portline enhances Cape Verde coverage Deliveries/Vessel Updates September deliveries

Port and Terminal Updates 13 Trial ops start at Yang Shan T4 DPW won’t renew Surabaya concession

Page 1

Average operating earnings for container carriers rebounded in the first half of this year to 1.1%, based on a survey of 13 of the top 16 carriers that have published their interim results for the first six months of 2017. Nine carriers posted positive first-half results, led by CMA CGM who topped the earnings table for main carriers with a 7.1% operating margin on revenues of $10.17 Bn. However, four carriers remain in the red, and Hyundai Merchant Marine (HMM) lags behind its industry peers with a -9.5% margin. Broken down by quarter, the second-quarter operating margins for carriers that reported quarterly earnings improved to +2.8%, with only two carriers (MOL and HMM) still reporting losses at operating (EBIT) level. Second-quarter results showed an improvement from the negative first quarter average margin of 1.2% and indicated the first profitable quarter for carriers since July 2015. Higher freight rates were the main driver for the improved results, with the average China Containerised Freight Index (CCFI) recording a 28% increase in the second quarter, compared to the same period last year. All of the main carriers, apart from HMM, posted rate gains of between 4% and 22% for the quarter. In contrast, Hyundai Merchant Marine’s average revenue was 6% lower than the same quarter last year, as the carrier’s failure to secure higher rates contributed to its poor performance - despite a 46% increase in total liftings. © Copyright Alphaliner 1999-2017

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ALPHALINER Weekly

2017 Issue 38

FE-EUROPE TRADE Selected carriers : Average revenue per teu by quarter - 2009-2017

1,600

CCFI Hapag-Lloyd OOCL Maersk CMA CGM HMM

1,400

ALPHALINER

2,000

Change in average revenue per teu by selected carriers

1Q14

3Q14

1Q15

3Q15

1Q14

3Q14

1Q15

3Q15

1Q17

3Q13

3Q16

1Q13

1Q16

3Q12

1Q12

3Q12

3Q11

1Q11

3Q10

1Q10

4.0 3.0 2.0 1.0

1Q17

3Q16

1Q16

1Q11

3Q10

-0.2% -5.5% -7.0% -10.5% -12.1%

1.3% 4.7% -1.1% -3.2% -1.0% 0.5% -4.3% -1.8% 0.4% 3.4% 1.0% 5.2% 2.4% -1.8% -5.9% -5.5% -9.2% -7.8% -1.2% -1.2% 2.8%

16.0% 7.4%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

Average Carrier Operating Margin

CMA CGM 2Q16 volumes include APL’s separate liftings prior to the carrier’s consolidation on 14 Jun 2016.

1Q10

0.0

10.7%

2% 22% 1% 21% 7% 19% 7% 46% 7% 7%

-1.1%

5,310 4,389 4,693 1,892 1,516 1,031 1,070 678 752 617

5.0

3Q09

5,400 5,343 4,732 2,287 1,617 1,227 1,147 986 804 659

Maersk COSCO CMA CGM H-L OOCL HMM

-11.3%

6.0

1Q09

2Q16

3Q09

600

Liftings in TEU Millions

2Q17

1,000 800

Change in total liftings by selected carriers Liftings Teu’000 Maersk COSCO CMA CGM H-L/CSAV OOCL MOL Yang Ming HMM K Line Zim

1,200

1Q09

% -6% 4% 13% 13% 16% 16% 20% 22% 28%

-17.8% -19.2% -17.5%

2Q16 1,037 1,019 966 997 749 866 801 858 650

$/teu/CCFI (1998=1,000)

2Q17 973 1,064 1,087 1,122 870 1,007 957 1,043 831

2.3% 2.2% 0.7% -1.7%

Rev $/TEU HMM Hapag-Lloyd K Line CMA CGM OOCL Zim Yang Ming Maersk CCFI

1,800

Average of CMA CGM (incl APL to 2Q 2016), CSCL (to 1Q2016), EMC, Hanjin (to 3Q 2017), Hapag-Lloyd (incl CSAV to 2014), HMM, KL, Maersk, MOL, NYK, WHL, YML, Zim

Page 2

ALPHALINER Weekly

2017 Issue 38

CORPORATE UPDATES

CMA CGM tops earning table - goes for new megaships Capacity Operated in TEU Millions

CMA CGM

2.00

CMA CGM was the top performing carrier in the first half of 2017, with operating profits (core EBIT) reaching $724 M on revenue of $10,169 M for an operating margin of 7.1%. The impressive performance was achieved on the back of a 34% increase in liftings and a 9% improvement in average revenue.

1.50

CMA CGM financial performance by quarter : 2016-2017 (including APL from 14 June 2016)

3.00 2.50

1.00 0.50

APL (included in CMA CGM from Jul 2016)

2017

2016

2015

2014

2013

2012

2011

2010

2009

0.00

in recent years CMA CGM’s rapid expansion has resulted in a significant increase in the carrier’s total debt, which has reached $8.7 Bn at the end of June, with interest expenses of some $0.5 Bn this year. However, a deleveraging and refinancing program is in place with the sale of APL’s terminal in Los Angeles for $817 M that is expected to close by the end of this year. CMA CGM has also refinanced its 2017 and 2018 bonds through a €650 M bond issue that was completed in July, with repayment due in 2022 at a 6.5% coupon.

CMA CGM Debt-Equity Ratio 300%

7,000

The positive performance has allowed CMA CGM to return to an expansion path, just one year after its acquisition of APL in June 2016. The carrier confirmed fresh orders for nine 22,000 teu ships for delivery in 2019 and 2020. This follows the announcement of CMA CGM’s planned acquisition of Mercosul from Maersk. The transaction is due to be completed by the end of 2017, subject to antitrust clearance and to the closing of Hamburg Süd’s acquisition by Maersk. CMA CGM’s newbuilding initiative brings about the first ULCS orders by any carrier after a two-year hiatus. The project will allow the French shipping line to keep pace with its partners in the OCEAN Alliance, as well as Maersk and MSC, all of which have substantial fleets of ‘Megamax’ vessels in the 18,000 - 22,000 teu range in service and/or on order. So far, CMA CGM’s pipeline for large mainline tonnage had been limited to three ships of 20,656 teu, ordered in March 2015 at the Hanjin-Philippines shipyard for delivery in 2018.

250%

No. of units >18,000 TEU by year of delivery

6,000

200%

5,000

4,000

150%

3,000

100%

2,000 50%

1,000 0

Maersk MSC

OCEAN Alliance CMA CGM COSCO Shg Evergreen OOCL

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Jun-17

Debt/Equity in US$ millions

8,000

Currency 1Q 2016 2Q 2016 3Q 2016 4Q 2016 FY 2016 1Q 2017 2Q 2017 Revenue US$ m 3,399 3,538 4,466 4,574 15,977 4,620 5,549 EBITDA 95 23 72 345 535 383 611 EBITDA Margin % 2.8% 0.7% 1.6% 7.5% 3.3% 8.3% 11.0% Core EBIT 3 -81 -86 193 29 252 472 Core EBIT Margin % 0.1% -2.3% -1.9% 4.2% 0.2% 5.5% 8.5% Net Profit -100 -129 -268 45 -452 86 219 TEU Operated (Ave.) 1,818,548 1,802,027 2,296,345 2,139,824 2,014,186 2,149,723 2,231,748 Liftings in '000 TEU 3,183 3,549 4,464 4,445 15,641 4,304 4,732 Ave. Rev ($/TEU) 1,068 997 1,000 1,029 1,021 1,081 1,122

Net Debt Equity Gearing (Net debt to equity)

Page 3

ALPHALINER

THE Alliance Hapag-Lloyd MOL K Line NYK Yang Ming

Total by Alliance 2M - 51 units OCEAN Alliance - 51 units THE Alliance - 12 units Pre-2017

2017

2018

2019

2020

ALPHALINER Weekly

2017 Issue 38

SERVICE UPDATES

Transpacific extra-loaders curb rate increases Carriers have continued to deploy additional capacity on the transpacific route, with at least nine extra-loaders launched since August to cater for the peak season demand from the Far East to the US. Details of the extra loaders announced so far are as follows:To USEC - All CMA CGM

APL

1,000

CMA CGM

1,000

COSCO

800

600

900

Evergreen

800

1,000

600

Hapag Lloyd

700

HMM

1,000

600

OOCL

800

1,000

400

K Line

1,000

800

NYK

1,000

800

Yang Ming

Page 4

►

CMA CGM MOZART (5,782 teu) - Hong Kong, Yantian, Busan, Houston, Savannah, Charleston, New York from 16 Sep for CMA CGM

►

MEMPHIS (5,085 teu) - Yantian, Hong Kong, Busan, Houston, Savannah from 27 Sep for CMA CGM

To USWC ►

COSCO HELLAS (9,469 teu) - Shanghai, Yantian, Long Beach, Prince Rupert, Ningbo from 14 Sep for COSCO

►

CMA CGM NEW JERSEY (5,078 teu) - Yantian, Shanghai, Los Angeles from 23 Sep for CMA CGM

►

ZIM SAO PAOLO (4,253 teu) - Shanghai, Ningbo, Busan, Vancouver, Busan from 29 Sep for Zim

These extra sailings are deployed just before the start of the October ‘Golden Week’ holidays in China, which marks the end of the peak season. They will be followed by void sailings in the first two weeks of October. SCFI Shanghai to USWC & USEC 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

USEC USWC

2017

1 Oct

NAVIOS AMARILO (4,250 teu) - Hong Kong, Yantian, Houston, Savannah, Charleston from 10 Sep for CMA CGM

2016

15 Sep

►

2015

1 Sep

HAZEL 1 (4,380 teu) - Hong Kong, Yantian, Houston, Savannah from 31 Aug for CMA CGM

2014

1 Aug

►

2013

Carrier

BALTIC BRIDGE (7,471 teu) - Cai Mep, Yantian, Hong Kong, Busan, Houston, Miami, Savannah, Charleston, New York from 31 Aug for CMA CGM

2012

General Rate Increase (GRI) announced in US$ per 40ft

►

2011

Transpacific Stabilisation Agreement Eastbound (Asia to USA)

CSL SOPHIE (4,800 teu) - Hong Kong, Yantian, Busan, Lazaro Cardenas, Miami, Savannah from 14 Aug for CMA CGM

2010

Carriers in the Transpacific Stabilisation Agreement (TSA) have announced further rounds of rate increases, on 15 September and 1 October but they are unlikely to be able to secure these increases in the absence of space shortages, as carriers have continued to deploy extra loaders to cater for the strong demand.

►

2009

Spot freight rates have fallen by 6% to the US West Coast and 16% to the US East Coast since the end of July.

CMA CGM SWORDFISH (5,078 teu) - Hong Kong, Yantian, Busan, Houston, Miami, Savannah from 4 Aug for CMA CGM

$/FEU

Although demand for transpacific cargo space remains very strong, carriers have so far failed to push through their planned rate increases in August and September.

►

ALPHALINER Weekly

2017 Issue 38

SERVICE UPDATES

FMC clears the establishment of THE contingency fund The U.S. Federal Maritime Commission (FMC) has approved an amendment to THE Alliance Agreement to permit the establishment of a contingency fund that can be used to help member carriers manage and recover from the insolvency or financial distress of a participating line. The scheme was first announced by THE Alliance member lines (Hapag-Lloyd, K Line, MOL, NYK and Yang Ming) in March. Each member would initially contribute $1 M into the contingency trust fund and a further $9 M in additional funds or through a letter of credit, with a total amount of $50 M to be contributed by the five members. The contingency fund would be used to ensure that any affected member carrier would continue to provide cargo operations and avoid the situation experienced last year when Hanjin’s sudden collapse resulted in thousands of Hanjin’s containers as well as those of its partners being stranded on ships and ports across the world. The fund would ensure that affected carriers would: ► continue to make port calls, and pay costs, losses or liabilities reasonably incurred as a result of the arrest of a vessel; ► to advance funds or payments related to carriage, handling, storage or delivery of containers carried by an affected carrier; ► pay claims of third parties which could lead to the arrest or detention of a vessel; ► reimburse the non-affected member carriers for costs, losses or liabilities incurred by the other members of THE Alliance. FE - North America Weekly Capacity in nominal TEU (Based on capacity deployed on 1 Sep 2017) 0

FE-N. America Capacity Share by Alliance Others 8% THE Alliance 27%

2M + HMM 23%

OCEAN Alliance 42%

Page 5

APM-Maersk CMA CGM COSCO Shg Evergreen MOL OOCL K Line Hapag-Lloyd Yang Ming Zim Hyundai M.M. NYK MSC SM Line PIL Matson Wan Hai Westwood

20,000

40,000

60,000

80,000 70,211 63,099

51,004 40,434 34,186 30,803 26,916 21,219 20,887 18,632 18,375 14,664 13,566 6,655 5,940 2,688 1,469 945

ALPHALINER Weekly

2017 Issue 38

SERVICE UPDATES

Hapag-Lloyd & MSC team up on new Med-ECSA service

As part of the restructuring of the EuropeECSA services taking place in September, Maersk will also exit its joint Med-ECSA (MED-SAEC2/Bossa Nova) service with MSC, on which it previously operated a single ship. CMA CGM, who currently takes slots on the soon obsolete MSC-Hamburg Süd joint service, will continue to cover the Med-ECSA trade through a co-operation with the Maersk Line-Hamburg Süd duo on a joint service branded 'Bossa Nova' by Maersk, 'MESA' by Hamburg Süd and 'Sirius' by CMA CGM while Zim, which also take slots on this service, has yet to unveil its options.

Hapag-Lloyd and MSC are to team up in the Med-ECSA trade with the launch in October of a weekly joint service that will call at Valencia, Barcelona, Genoa, Fos, Gioia Tauro, Valencia, Suape, Salvador, Rio de Janeiro, Santos, Paranagua, Itapoa, Montevideo, Navegantes, Santos, Rio de Janeiro, Las Palmas, Valencia. The service will turn in eight weeks with eight ships of 8,000-10,000 teu, with the first sailing planned on 19 October from Barcelona. The new MSC/H-L service will supersede for these two carriers the current Med-ECSA service that they offer through a joint operation of MSC and Hamburg Süd with Hapag-Lloyd taking slots, branded 'MEDSAEC1' by MSC, 'MESA' by Hamburg Süd and 'MSE' by Hapag-Lloyd. The Med-ECSA restructuring are taking place prior to the planned absorption of Hamburg Süd by Maersk Line during the fourth quarter as the EC ruled in April that Hamburg Süd must terminate its arrangement with MSC on the Med-ECSA 'MESA' service. Comparison of current and planned Europe-ECSA services

current services MSC/Hapag-Lloyd : SAEC1/BLX service with Hamburg Süd/Maersk/CMA CGM taking slots (SAECN 2/Safran 2/SAMEX) 7 x 5,500-6,700 teu calling at Antwerp, Rotterdam, Hamburg, Bremerhaven, Le Havre, Lisbon, Sines, Rio de Janeiro, Santos, Paranagua, Navegantes, Santos, Rio de Janeiro, Salvador, Pecem, Antwerp Hamburg Süd : SAECN 1 service with Hapag-Lloyd/MSC/Maersk/CMA CGM taking slots (BPX/SAEC2/Samba 2/Safran 1) 8 x 10,500 teu calling at Rotterdam, London-Gateway, Hamburg, Antwerp, Le Havre, Santos, Paranagua, Buenos Aires, Montevideo, Rio Grande do Sul, Itapoa, Paranagua, Santos, Tanger Med, Rotterdam Maersk : Samba 1 service with Hamburg Süd/MSC/COSCO taking slots 8 x 8,800-9,900 teu calling at Rotterdam, London-Gateway, Bremerhaven, Casablanca, Algeciras, Santos, Paranagua, Itajai, Buenos Aires, Montevideo, Rio Grande, Santos, Pecem, Algeciras, Rotterdam MSC/Hamburg Süd : Med-SAEC/MESA with Hapag/Lloyd/Maersk/CMA CGM/Zim taking slots (MSE/Sirius) 8 x 5,500-6,800 teu calling at Valencia, Gioia Tauro, Livorno, Genoa, Fos, Barcelona, Valencia, Suape, Rio de Janeiro, Santos, Buenos Aires, Montevideo, Rio Grande, Navegantes, Itapoa, Santos, Rio de Janeiro, Suape, Tanger Med, Valencia MSC/Maersk : Med-SAEC Loop 2/Bossa Nova 6 x 8,700-9,400 teu calling Algeciras (Maersk hub), Valencia-Noatum (Maersk hub), Valencia-MSC Terminal (MSC hub), Tanger Med (Maersk hub), Salvador, Itapoa, Paranagua, Navegantes, Itajai, Santos, Las Palmas (MSC hub), Algeciras (Maersk hub) new services (from September) Hamburg Süd/Maersk/CMA CGM : SAEC/Samba/Safran 8 x 10,500 teu calling at Rotterdam, London-Gateway, Hamburg, Anwerp, Le Havre, Algeciras, Santos, Paranagua, Buenos Aires, Montevideo, Itapoa, Paranagua, Santos, Pecem, Tanger Med, Rotterdam Hamburg Süd/Maersk/CMA CGM : Mesa/Bossa Nova/Sirius 8 x 8,000-10,000 teu calling at Marsaxlokk, Genoa, Barcelona, Valencia-Noatum, Algeciras (TTI), Tanger Med (APMT), Salvador, Sepetiba (Itaguai), Santos, Itapoa, Buenos Aires, Rio Grande, Itajai, Itapoa, Santos, Sepetiba (Itaguai), Tanger Med (Eurogate), Algeciras (APMT), Tanger Med (APMT), Marsaxlokk MSC/Hapag-Lloyd : ECX 9 x 8,000-10,000 teu calling at Rotterdam, London-Gateway, Bremerhaven, Hamburg, Antwerp, Le Havre, Sines, Rio de Janeiro (Itaguai), Santos, Navegantes, Buenos Aires, Montevideo, Rio Grande do Sul, Navegantes, Paranagua, Santos, Rio de Janeiro (Itaguai), Salvador, Pecem, Rotterdam MSC/Hapag-Lloyd : Med-ECSA 8 x 8,000-10,000 teu calling at Valencia, Barcelona, Genoa, Fos, Gioia Tauro, Valencia, Suape, Salvador, Rio de Janeiro, Santos, Paranagua, Itapoa, Montevideo, Navegantes, Santos, Rio de Janeiro, Las Palmas, Valencia

Page 6

ALPHALINER Weekly

2017 Issue 38

SERVICE UPDATES

X-Press Feeders adds Straits-Western India link X-Press Feeders : CWI Service Details

China-West India Express Vessels Deployed: Slots on CWI Port Rotation Singapore, Port Kelang, Nhava Sheva, Mundra, Hazira, Colombo, Port Kelang (W), Singapore

X-Press Feeders has introduced in August a further connection between the Straits and Western India through slots on the StraitsWestern India string of the ‘China West India Express' (CWI) operated jointly by Hyundai M.M., KMTC, CMA CGM, Shipping Corp. of India and Pendulum Express Line. X-Press will only participate on the following port calls : Singapore, Port Kelang, Nhava Sheva, Mundra, Hazira, Colombo, Port Kelang (W), Singapore with X-Press Feeders (first sailing on 19 August from Singapore). It retains the ‘CWI’ appellation to market the service. In particular, the ‘CWI’ will provide X-Press Feeders with direct connection between Hazira and the Straits where it can connect with the rest of its South East Asia and East Asia networks. It will also enhance its Nhava Sheva and Mundra coverage in Western India.

Evergreen introduces two additional intra-Asia loops Evergreen : CVI/PHF2 Service Details

Evergreen will introduce two additional intra-Asia services in midSeptember, offered through two slot agreements with SITC and OOCL :

China Vietnam Indonesia service Vessels Deployed: Slots on SITC Port Rotation Qingdao, Shanghai, Ningbo, Shekou, Ho Chi Minh City, Jakarta, Semarang, Xiamen, Qingdao

Philippines Feeder 2 Vessels Deployed: Slots on OOCL Port Rotation Hong Kong, Manila (S&N), Shekou, Hong Kong

‘CVI’ (slots with SITC) SITC - Rotation : Qingdao, Shanghai, Ningbo, Shekou, Ho Chi Minh City, Jakarta, Semarang, Makassar*, Xiamen, Qingdao (Evergreen will not participate in the Makassar call). It turns in four weeks using four 2,500-2,800 teu ships, of which three provided by SITC and one by K Line. The first sailing is planned on 19 September from Qingdao on SITC SURABAYA. ‘PHF2’ (slots with OOCL) - Rotation : Hong Kong, Manila (S&N), Shekou, Hong Kong. It turns in one week using the 4,200 teu OOCL YOKOHAMA. Evergreen slots coverage is limited to the Southbound leg in one direction only and its first sailing is planned on 19 September from Shekou. The ‘CVI’ will enhance Evergreen direct connections between China and Indonesia, currently ensured with the carrier’s own 'CIT' and through co-loading on the 'PCI' service jointly operated by Sinokor, Heung-A, SITC and CK Line. It will also provide a faster connection for outbound cargoes from Ho Chi Minh City in Southern Vietnam to Indonesia. The ‘PHF2’ will double Evergreen weekly sailings from Hong Kong and Shekou in South China to Manila in the Philippines, adding to Evergreen’s own 'CVM' service.

Page 7

ALPHALINER Weekly

2017 Issue 38

SERVICE UPDATES

THE Alliance shifts Savannah call on Transatlantic link THE : AL2/AL3 Services Details

Transatlantic 2/3 service Vessels Deployed: AL2 : 4 x 5,000-5,600 teu AL3 : 5 x 3,200 teu Port Rotation AL2 : London-Gateway, Le Havre, Rotterdam, Bremerhaven, New York, Charleston, Savannah, LondonGateway AL3 : Antwerp, Bremerhaven, Southampton, Charleston, Port Everglades, Houston, Savannah, Norfolk (Va), Antwerp

The members of THE Alliance are to shift one of the two Savannah transatlantic calls of their North Europe-US East Coast-US Gulf ‘AL3’ service to their North Europe-US East Coast ‘AL2’ loop next month. The 'AL2' will continue to turn in four weeks calling at LondonGateway, Le Havre, Rotterdam, Bremerhaven, New York, Charleston, Savannah, London-Gateway, using four 5,000 - 5,600 teu vessels provided by MOL and NYK. This move allows THE Alliance to improve the schedule reliability of the 'AL3' loop, especially considering the forthcoming adverse weather period on the Atlantic Ocean. The ‘AL3’ service will continue to serve Savannah on the eastbound leg with five 3,237 teu US flag vessels of Hapag-Lloyd. Its revised rotation reads : Antwerp, Bremerhaven, Southampton, Charleston, Port Everglades, Houston, Savannah, Norfolk, Antwerp.

CNAN Nord to re-launch regular US-Algeria service CNAN Nord : US-Algeria Services Details

US-Algeria mpp service Vessels Deployed: 12,000 tdw mpp vessels Port Rotation Houston to Algerian ports Final rotation to be announced

CNAN Nord Spa, the Algerian liner shipping company, will re-launch a regular liner service between the US and Algeria from October, with a focus on the US Gulf port of Houston which will be connected to most Algerian ports. The service will cater for container and breakbulk cargoes, as well as oil-related projects. A first sailing will be ensured from Houston at the beginning of October by CNAN’s 12,161 dwt, 842 teu multipurpose cargo vessel TIMGAD. CNAN’s involvement in the US-Algeria liner trade is not new, as the Algerian company have historically operated a liner service on the route, although sailings had been offered on an ad hoc basis in recent times. CNAN Nord is an affiliate of the Algerian state-owned CNAN Shipping Group (Cie Nationale Algérienne de Navigation). It focuses on liner services between North Europe and Algeria and also runs the business to the US. A sister company, CNAN Med, operates liner services between South Europe and Algeria using own and chartered roro and lolo tonnage. CNAN Nord and CNAN Med own a total of ten multipurpose cargo vessels and containerships with capacities ranging from 400 to 1,700 teu. The CNAN Group fleet was completely renewed in the last three years with the purchase of nine modern multi-purpose cargo vessels of 912,500 dwt on the secondhand market that replaced overaged conventional cargo tonnage, as well as one 1,700 teu containership newbuilding resale, the TAMANRASSET built in 2017 at Zhejiang Ouhua, which currently trades for Arkas on the carrier’s ’Constantza Arzew Express’ service.

Page 8

ALPHALINER Weekly

2017 Issue 38

SERVICE UPDATES

CMA CGM streamlines Guyanas & Suriname coverage CMA CGM : Caribbean-Guyanas Services Details

Caribbean-Guyanas service (extended) Vessels Deployed: 3 x 1,100 teu Port Rotation Kingston, Rio Haina, Philipsburg, Fort de France, Port of Spain, Paramaribo, Georgetown, Degrad des Cannes, Paramaribo, Pointe à Pitre, Kingston

Of note, the Philipsburg call can support shipments to the island of St Marteen, linked to a large-scale reconstruction program after the recent devastations of Hurricane Irma.

CMA CGM will reorganize its coverage of the Guyanas and Surinam markets at the end of September. The carrier will terminate its weekly Kingston - Guyana and Suriname 'Eldorado' relay, operated jointly with Zim (branding: 'GSE'), which calls at Kingston, Georgetown, Paramaribo, Kingston, and amalgamate this offering into its weekly standalone ‘Caribbean-Guyanas’ relay. This service currently calls at Pointe à Pitre, Fort de France, Port of Spain, Paramaribo, Georgetown, Degrad des Cannes, Paramaribo, Pointe à Pitre. By extending the latter service to Kingston, CMA CGM continues to offer the Kingston-Guyanas links so far ensured by the 'Eldorado' loop. Connections with CMA CGM’s international long haul network are offered via Kingston. Calls at Rio Haina (Dominican Republic) and Philipsburg (St Marteen) are also inserted. The extended ‘CaribbeanGuyanas’ service will henceforth call at Kingston, Rio Haina, Philipsburg, Fort de France, Port of Spain, Paramaribo, Georgetown, Degrad des Cannes, Paramaribo, Pointe à Pitre, Kingston. The extended service will turn in three weeks (versus two weeks in the current configuration), using three 'CV 1100' 1,118 teu vessels (CONTSHIP RAY, CONTSHIP NEW and BC SINGAPORE). It is expected to start on 27 September from Kingston. On its side, Zim has yet to clarify its plans. Zim already covers the Kingston - Guyana and Suriname route through slots on Caribbean Feeder Services (CFS)’ Lower Caribbean & Guyana Feeder Service.

UFS adds Turkey - Algeria and Tunisia service

UFS : Turkey-Algeria/Tunisia feeder Service Details

Turkey-Algeria/Tunisia feeder Vessels Deployed: Slots on Containerships OY Port Rotation (every 10 days) Istanbul, Piraeus (on inducement), Bizerte, Annaba, Algiers, Istanbul

Unimed Feeder Services (UFS – the intra Med affiliate of Denmarkbased Unifeeder) has added a new service connecting Turkey to Algeria and Tunisia, through slots on the relevant leg of the Turkey-North Africa service of Finnish carrier Containerships OY. This service calls at Istanbul and/or Piraeus, Aliaga, Izmir, Gemlik, Mersin, Benghazi, Misurata, El Khoms, Tripoli, Bizerte, Annaba, Algiers, Istanbul, with rotations varying according to cargo inducement. Sailings are currently provided every ten days on average, using four ships of 900-1,200 teu. UFS will commercialize the ports of Istanbul, Piraeus (on inducement), Bizerte, Annaba and Algiers as part of this new offering. UFS has been already taking slots since August on the Turkey-Libya leg of the service, connecting Istanbul and Piraeus (on inducement) with Misurata and El Khoms. This UFS offer covering Libya is adding to a Port Said-Libya service currently offered by UFS through slots on the fortnightly Egypt - Libya service of Bahari Shipping.

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ALPHALINER Weekly

2017 Issue 38

Portline enhances Cape Verde coverage PCI : Cape Verde Service Details

Las Palmas-Cape Verde service Vessels Deployed: 1 x 500 teu Port Rotation (every 10 days) Las Palmas, Palmeira, Sal Rei, Porto Praia, Las Palmas

Portuguese carrier Portline Containers International (PCI) will enhance its coverage of the Cape Verde Islands from the end of September, with the launch of a dedicated service connecting Las Palmas, Palmeira (Sal Island), Sal Rei (Boa Vista Island), Porto Praia (Santiago Island), Las Palmas. Portline’s new loop will turn in ten days, using the freshly chartered multipurpose container carrier SINA (502 teu) currently on a positioning trip from the Caribbean. The new service will be launched on 21 September from Las Palmas and will connect in Las Palmas with the PCI’s Portugal-Canary-Cape Verde-Bissau ‘Guiver Line’ operated on a fortnightly basis with two chartered vessels of 1,577 teu vessels, the MANATEE and WINDHOEK. It is unclear at this stage if Portline will alter the 'Guiver Line', which calls at Porto Praia, and will go on with the service it offers between Las Palmas, Sal and Boa Vista through slots on the relevant leg of Portuguese carrier Transinsular’s Portugal-Canary-Mauritania-Cape Verde ‘Barlovento Express’ service, branded ‘Morabeza’ by Portline.

Boluda Service Details

Canaries to Cape Verde Service

Based in Lisbon, Portline has been owned since 2015 by the Funchal, Madeira-based Grupo Sousa, a multi-faceted group involved in the shipping, logistics, port operations, energy and tourism businesses. Beside Portline, Grupo Sousa owns two other liner shipping companies, Box Lines and Empresa de Navegação Madeirense (ENM), involved in the coverage of the Azores and Madeira, and a ferry company, Porto Santo Line, which connects Madeira to the (Portuguese) island of Porto Santo.

Vessels Deployed:

Boluda Lines to expand Cape Verde presence

1 x tbn vessel Port Rotation (every 14 days) Las Palmas, Palmeira, Sal Rei, Porto Praia, Mindelo, Las Palmas

Spanish carrier Boluda Lines will launch in October a fortnightly service connecting Las Palmas with Palmeira (Sal Island), Sal Rei (Boavista Island), Porto Praia (Santiago Island), and Mindelo (São Vicente Island). Boluda Lines will market the new offering under the service name 'Cape Verde Express'. The service will turn in two weeks with transhipment opportunities to/from Spain and Portugal through connections with Boluda's Med Spain - Canary service and Northern Spain - Portugal - Canary service, as well as with other countries served by Boluda with feeder services, including Italy, the UK, Germany, the Netherland and West Africa. The 'Cape Verde Express' will cater in particular to perishable goods and fresh fruit in reefer containers.

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ALPHALINER Weekly

2017 Issue 38

DELIVERY/VESSEL UPDATES

The MILAN MAERSK (20,568 teu) is delivered APM-Maersk has received the MILAN MAERSK, fourth of eleven 'EEE Mark II'-class containerships with an intake capacity of 20,568 teu. The carrier ordered the series from Korea’s DSME Shipyard in June 2015 for a total cost of KRW 1,956.4 bn (USD 160 per unit). The new vessel follows the MOSCOW MAERSK, delivered in July, and the entire series is scheduled to complete by Q2 of 2018. Comparison of the Maersk Triple E ships First generation (Mk1) vs Second generation (Mk2) EEE-Mk1 20

EEE-Mk2 11

Maersk Line’s new second-generation ‘Megamax’ ULCS will add to the Danish carrier’s 20 DSME-built first - generation 'EEE'-class units of 18,340 teu, delivered between June 2013 (MAERSK McKINNEY MØLLER) and June 2015 (MATHILDE MAERSK).

Ordered

Feb 2011 (10) Jun 2011 (10)

June 2015 (11)

EEE Mk-1

Built Yard

2013-2015 Daewoo (DSME)

2017-2018 Daewoo (DSME)

DWT LOA (m) Beam (m) Depth (m) Draft (m)

194,500 tdw 399.00 (24 bays) 59.00 (23 rows) 30.30 16.00 2 x Doosan-MAN 8S80ME-C Mk9.2 59,360 kW

210,000 tdw 399.00 (24 bays) 58.60 (23 rows) 33.20 16.50 2 x Doosan-MAN 7G80ME-C9.5-TII 62,000 kW

Bay arrangement (fore-aft)

8/10/6

6/13/5

Tiers on deck

Ties below deck Max TEU intake

11 18,340

12 20,568

Units ordered

Main engines

EEE Mk-2

The 'EEE Mark II' vessels are substantially modified compared to the original ‘EEE’ ships. Note the revised general arrangement, deeper hull and heightened lashing bridges. Source : Alphaliner

The MILAN MAERSK is proceeding from Korea to Russia for a bunkering trip, after which she will join the Maersk-MSC Far East-Europe 'AE1/Shogun' loop, offered within the context of the '2M' agreement. On this service, the new vessel replaces the 15,550 teu EBBA MAERSK, presently the smallest ship on this loop.

The TEXAS TRIUMPH (14,000 teu) joins Evergreen Japanese trading house Shoei Kisen has taken in charge the TEXAS TRIUMPH, last of five 14,000 teu containerships ordered in January 2014 at the Imabari Shipyard, with the backing of long term charters by Evergreen. The contract was part of a chartering deal that also includes five 14,424 teu vessels chartered from Greek owner Costamare Shipping, ordered in January 2014 at the Samsung Shipyard, Korea, now all delivered. The TAIPEI TEXAS follows the TAIPEI TRIUMPH, delivered in August. The TEXAS TRIUMPH is to join later this week the OCEAN Alliance Far East-Med 'MED1' loop, branded 'MD2' by Evergreen. These Japanesebuilt ships present an Loa of 366.00 m for a breadth of 51.00 m.

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ALPHALINER Weekly

2017 Issue 38

DELIVERY/VESSEL UPDATES

The MSC AVNI (11,500 teu) is delivered China’s Jinhai Heavy Industries this week delivered the MSC AVNI, first unit in a series of 11,500 teu ships for MSC. Ordered by the Norway-based SinOceanic Shipping ASA in May 2013, the vessel will trade under a long term bareboat charter agreement with MSC.

Norway’s SinOceanic Shipping ASA, which ordered the vessels, and Jinhai Heavy Industries are both part of the Chinese HNA Group. Based at Haikou, in China’s Hainan Province, NHA Group is a multi-sector conglomerate with interests in aviation, tourism, financial services, real estate, logistics and the industrial sector. The Group is currently linked 170th on the Fortune Global 500 list. SinOceanic Shipping is the group’s main outlet for container tonnage investment and ship leasing. Other leasing firms within the HNA Group are nevertheless also engaged in the maritime sector.

Originally part of a series of ten 9,408 teu vessels, contracts for the units six through ten were later upgraded to orders for larger ships. At the same time, SinOceanic extended its pipeline at Jinhai by another five ships of the larger variant. All 15 orders are backed by long -term charter contracts with MSC. Compared to the first five vessels, the larger 11,500 teu design is not only a lengthened variant, but an entirely new type. Instead of the earlier units’ conventional layout, the larger types are built as twinisle ships with a separated forward bridge and an engine room aft. The MSC AVNI has an LoA of 314.30 m and a neo-panamax breadth of 48.20 m (19 rows). With these dimensions, the ship falls inbetween the very common 299 m-long ‘Bosphorusmaxes’ (also known as ‘compact neo-panamaxes’) and the typical ‘intermediate’ neo-panamaxes of around 330 to 335 m. This week, the new ship phases into MSC’s Far East - SAF - Middle East - ISC service 'Ingwe'. The MSC AVNI will be followed by the MSC CARLOTTA, scheduled for delivery in October.

The TS TOKYO (1,808 teu) is delivered Cellular Containership Deliveries September 2017

Name

Teu

Operator

OOCL JAPAN

21,413

OOCL

MILAN MAERSK

20,568

Maersk

MAERSK HONAM

15,282

Maersk

TEXAS TRIUMPH

14,000

Evergreen

MSC AVNI

11,500

MSC

COSCO SHIPPING RHINE

9,092

COSCO Shg

POLAR COLOMBIA

3,830

Hamburg Süd

EVER BLISS

2,926

Evergreen

TS TOKYO

1,808

TS Lines

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Hong Kong-based TS Lines (TSL) has received the 1,808 teu TS TOKYO, second of two 'Bangkokmax' ships ordered in July 2015 with CSBC Taiwan and built at CSBC's Keelung site. The ships are extra wide beam vessels with an Lbp to B ratio of only 5.9 and an Loa of 172 m. Their compact dimensions enable the ships to serve the Bangkok city terminals on the Chao Praya River, as well as other upriver ports or ports with physical constraints. At the time of the order, TSL explained the choice to strengthen its fleet in the 'Bangkokmax' sector because “this is a sector which would not be impacted by the endless overflow of cascading vessels into Intra Asia market. Even with the cascading condition in Asia now, the average freight to Bangkok can still justify its premium over Laem Chabang”, adding that “At least in the next 20 years the demand for this type of vessel will not be diminished as it is still irreplaceable by another class”. The TS TOKYO follows the TS BANGKOK, delivered in July, and is to join the TSL Hong Kong-Philippines (CPX 2) shuttle.

ALPHALINER Weekly

2017 Issue 38

PORT UPDATES ZPMC delivers new STS to DPW Dakar DP World Dakar has taken delivery of two new STS container cranes from ZPMC. The port equipment manufacturer's heavy load vessel ZHEN HUA 13 carried the cranes from Shanghai to West Africa. The shipment will increase the fleet of DP World's container cranes in the Senegal main port from four to six, installed on a 715 m pier. Malaysia: Westports Expansion kills off rivalling green field projects The Government of Malaysia will reportedly decide against the option to develop a new large-scale container terminal at Carey Island, near Port Kelang.

Shanghai Port: Trial operations begin as Yang Shan 4 gears up for year-end launch Shanghai's latest container terminal, Phase 4 of the Yang Shan Deep Water Port, this week handled its first mainline container vessel. The call is believed to be part of a series of tests and trials, which will eventually see the giant highly-automated facility terminal become operational at the end of this year. As part of the aforementioned tests, Yang Shan Phase 4 now received the 5,085 teu COSCO BOSTON. This ship had just ended service on the Ocean Alliance's Asia to Middle East loop AWE7, which typically uses Shanghai's Waigaoqiao terminals and not the deep water port.

Local media claim that the MYR 200bn (USD 45bn) project will no longer be pursued after Westports Malaysia was given in-principle approval to gradually develop a 30 Mteu expansion of its current facilities. Such a decision would also cement the current duopoly at Port Kelang, between Westports Malaysia and its smaller competitor, the MMC-controlled Northport Kelang. The latter was also a partner in the consortium that wanted to build and operate the proposed Carey Island container terminal. Boston Harbour Deepening underway The port of Boston formally kicked off a USD 350M project to dredge the Boston Harbor and its approach channels from a current depth of 12.20 m to at least 14.30 m. The move is aimed at keeping the second-tier seaport competitive with the main container gateways on the United States' Eastern Seaboard, such as New York-New Jersey or Norfolk. Above all, the three-year dredging scheme will allow larger main line container ships to call at Boston's Conley Container Terminal. Phase one of Boston's deepening project comprises the construction of an offshore deposit site to hold sediment from the harbor floor dredging. The actual dredging works of phase two will deepen the Outer Harbor Channel to 15.50 m and the so-called Reserve Channel, where the Conley Container Terminal is located, to 14.30 m. Works will be carried out over a period of three years for completion in 2020.

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ALPHALINER

Earlier test calls at Yang Shan 4 were performed by small tonnage in the size range of 370 to 650 teu. Unsurprisingly, these calls were made by vessels of the regional carrier HASCO, a subsidiary of the Shanghai International Port Group (SIPG), which also operates the Yang Shan container terminals. Once fully operational, Yang Shan 4 will feature a 2,400 m deepwater pier with an annual design capacity of 6.30 Mteu. Contrary to the earlier terminals of Shanghai Yang Shan, which operate manually with RTG-served container storage blocks in a horizontal layout, the new Phase 4 terminal is highly-automated. It features a vertical layout with 61 storage blocks. Each of these is served by two computer-controlled rail-mounted yard cranes. Containers will be shuttled between the quay and the yard on an initial fleet of 50 battery-powered Lift-AGVs. Yang Shan 4 is expected to come on stream with about 1,800 m of

ÂŠ Copyright Alphaliner 1999-2017 Subscription copy for AXSMarine. Sent to denitsa.trifonova@axsmarine.com Unauthorised re-distribution prohibited

ALPHALINER Weekly

2017 Issue 38

PORT UPDATES More in-depth coverage of this weekâ&#x20AC;&#x2122;s main events in the port and terminal sector can be found on our website at: www.alphaliner.com Our platform also includes a vast archive with thousands of news articles related to events and developments in the global container terminal market. Safiport Derince - timeline update Turkey's Safiport, developers of a new container terminal in the Marmara Sea, disclosed an updated timeline for the construction of their ULCS-ready facility at Derince. Land reclamation works, creating a total of 27 hectares of space, were completed last year, using six million tons of rock and sand material. Currently, Safiport Derince carries out piling works on a 490 meter container pier extension and on 450 m of new ro-ro and general cargo berths. Safiport's new container berth, at least 18 m deep and designed to accommodate ULCS of up to 20,000 teu, is slated for completion in February 2018. The berth's ship-to-shore gantry cranes went into production at ZPMC in China in July and they are expected to start operation at Derince in May 2018.

TPS Surabaya... The original 20-year concession to operate the then-new TPS was awarded in 1999 to P&O Ports. Seven years later, the P&O Nedlloyd group was dissolved: Maersk Line acquired the container operations, while DP World bought the Roro Ferry and terminal operating businesses. TPS subsequently became part of DPW's global portfolio of container terminal assets. It has since been run as a joint venture between PT Pelabuhan Indonesia III, one of Indonesia's state-owned regional port authorities, and DP World. Carriers at TPS include Evergreen Line, COSCO Shipping, MCC Transport, Temas Line, MSC, Samudera and several others. The terminal is typically served by ships in the size range of 1,000 to 2,800 teu. The largest scheduled callers are the 3,500 teu vessels deployed on MCC Transport's Korea - China - South East Asia loop IA-1, which serves the Indonesian ports of Jakarta and Surabaya

Page 14

quay wall and an estimated design capacity of 4.00 Mteu. Once fully completed, a fleet of 26 ultra-large ship-to-shore gantries will work on almost two and a half kilometres of pier. The new terminal module adds to about 5,600 m of deep-water pier that is already operational at Yang Shan. Not very long ago, COSCO Shipping Ports, the terminal operating arm of the Chinese COSCO Group, announced plans to acquire a 15% stake in SIPG. With a throughput of 37.13 Mteu, Shanghai is currently the largest container port in the world and the Yang Shan Deep Water Port complex is one of two main container terminal areas. It was developed in the last decade in addition to the Waigaoqiao container piers. While the latter are situated on the lower banks of the Yangtze River, Yang Shan was built in the middle of the Hangzhou Bay, about 100 kilometers south east of downtown Shanghai. Hence, the terminals are actually located about half-way between Shanghai and Ningbo-Zhoushan, the world's fourth-largest container port (21.57 Mteu). As China's first offshore deep water port, Yang Shan is connected to the mainland by the Donghai Bridge, a 33 kilometer fixed link that carries a six-lane highway.

DPW to quit TPS Surabaya after 2019 DP World will end its involvement at the Indonesian port of Surabaya in about two years' time. The Dubai-based port and terminal operator announced that it had reached a decision to end the contract for PT Terminal Petikemas Surabaya (TPS) at the end of 2019, when the terms of the current agreement will end. DP World commented that the withdrawal will have 'no material financial impact on the group'. So far, the global terminal group is a 49% shareholder in TPS, the largest container terminal in the port of Surabaya, also known as Tanjung Perak. The facility offers a 1,450 m berth and it boasts an annual design capacity of 2.10 Mteu. Apparently, DPW has been in talks with the Indonesian Government to extend the contract past 2019, but the two parties eventually did not come to an agreement. DP World commented on the talks: 'It is unfortunate that the significant positive contributions made by global terminal operators in Indonesia have not been fully recognized, despite our successful track record'. The terminal operator went on to say that it was 'disappointed that the operating contract renewal terms offered by the Indonesian authorities did not meet our threshold for continued investment'. Adhering to strict financial guidelines, DPW concluded that - despite making significant investment into TPS over the course of the years - it had no option to keep Surabaya in its portfolio after the original contract's expiry. ÂŠ Copyright Alphaliner 1999-2017

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