Nordic Hamburg
Wallem Germany
Fednav
bulk carrier update
News from DNV to the bulk industry
No 02 2012
contents
04 Nordic Hamburg
08 ››
Wallem Germany
12 ››
Fednav
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bulk carrier update We welcome your thoughts!
Published by DNV Maritime and Oil & Gas, Market Communications
Nordic Hamburg..................................................... 4 Wallem Germany..................................................... 8 Fednav..................................................................... 12
Editorial committee: Michael Aasland, Business Director, Bulk Carriers Magne A. Røe, Editor Lisbeth Aamodt, Production Design and layout: Coormedia.com 1207-001
Green Dolphin 38.................................................. 14
Front cover: SJN Nordic, ©Nordic Hamburg
SEEMP........................................................................ 16
Please direct any enquiries to DNVUpdates@dnv.com
DNV Rules and Standards .................................. 18
Online edition of bulk carrier update: www.dnv.com/bulkupdate
IACS Harmonised Common Structural Rules................................................. 20 Nauticus Project.................................................. 22 Maritime Labour Convention........................... 25 DNV’s Port State Control Services.................. 26 Market Update....................................................... 32
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DNV (Det Norske Veritas AS) NO-1322 Høvik, Norway Tel: +47 67 57 99 00 © Det Norske Veritas AS www.dnv.com
eDitOrial
michael aasland business Director, bulk carriers Michael.Aasland@dnv.com
DiFFicult times our industry is facing very difficult times. charter rates have been at record low levels in all size segments during the past few months. With an oversupply of tonnage due to record deliveries and a lower than expected growth in demand, most analysts expect that we will have challenging times for at least one or two more years. However, we must not forget that there is still a steady growth on the demand side and that the order book is quickly being reduced, which in time will lead to an improved supply/demand situation. What makes the current situation even more difficult is the high fuel price, which is creating new challenges for shipping companies. dNv saw these challenges early and published the dNv Fuel Saving guideline for bulk carriers - which by the way is shortlisted for the lloyd’s list global awards. We have further developed a range of advisory services based on our extensive technical know-how and have helped a number of owners to reduce their fuel consumption. We provide services to projects ranging in size from large to relatively small. the focus of these services varies from operational to purely technical aspects, but the objective is always the same - to reduce the fuel consumption in a cost-effective manner. the Seemp will become mandatory from 1 january 2013, and in this issue of bulk update you can read about how a shipping company can use the Seemp as a means to reduce its fuel costs.
bulk update for your tablet! to view this update on your tablet, scan the Qr code or go to www.dnv.com and download a pdF for your device.
www.dnv.com
When charter rates are low, it is sometimes a challenge for some companies to allocate sufficient maintenance budgets. less focus on maintenance may in turn result in poorer performance during port state inspections, and ultimately a poorer port state control record. the dNv-classed fleet rates high in all port State control mou regions but we have a continuous focus on improvement. We therefore provide a series of products, which you can read about in this issue of bulk update, to help ship owners and managers maintain their ships. because safety of life, property and the environment is always the most important! enjoy the read!
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Nordic hamburg
Bucking the trend If you can make it here, you’ll make it anywhere.
In this case, “here” refers not to New York or Hamburg, but to the challenging state of the bulk market. While some bulk owners are having to face up to a difficult market through 2012, the Nordic Hamburg Group – with its good financial position, sleek organisation and modern fleet – is on the right side of the so-called ‘two-tier’ bulk market. Text: damien devlin
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Nordic hamburg
© Nordic Hamburg
Nordic Hamburg Shipping, which manages newbuilding projects, was established in 2006 by two partners, Dr Rowil Ponta and Richard Grube. Then, in 2008, they started up a sister company, Nordic Hamburg Shipmanagement, and invited Captain Henrik Jensen in as Managing Director and partner. A Dane, Jensen relocated to Hamburg in 2008 to take up the first partnership of his career. On his first day, he was listening to the radio on the way to the office when he heard an ominous news report. Overnight, Germany’s second-largest bank, Commerzbank, was put under the administration and financial protection of the German Government. Undeterred, the partners adapted their short-term strategy. Rather than a big push from day one, they would ride out the year and then re-evaluate. They must be glad they did. Four years later, Nordic Hamburg is flourishing, despite the double whammy of a weak economy and poor bulk market. Nordic Hamburg Shipping now manages a number of newbuilding projects and Nordic Hamburg Shipmanagement operates 11 vessels, with a view to adding several more in the near future. “In many ways,” says Jensen, “it was the ideal time to enter the market. “We only had four employees, so we were able to keep costs down and start building an organisation that could adapt as the market picked up again,” he adds. Quality, not quantity In addition to keeping costs down, being a small organisation had other benefits for Nordic Hamburg. The Nordic Hamburg philosophy has always been about quality, not quantity. From the start, the company aimed to be a small, flat organisation, offering a full-range of shipping services, always with a focus on high quality. Jensen sums up Nordic Hamburg’s attention to detail by declaring that: “Although we are a manager, we treat our ships like we are an owner.” Nordic Hamburg offers supervision services and product management throughout the newbuilding process and a full range of ship management services once the vessels
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Nordic hamburg
are in service and it has also been active in arranging financing solutions. Jensen explains that this strategy was due to owners preferring not to deal with managers that sub-contract aspects of their ship management.
“In bad times, the efficient ships will still be employed and in good times there is a premium for them” Captain Henrik Jensen, Managing Director, Nordic Hamburg
“Our owners want to know that we have control over the whole newbuilding and operating processes, and this is why we run everything in-house. We have always known that having the right people both in the office and on board is critical to our success. So, rather than outsource crewing, for example, we have set up offices in Manila and Odessa to manage this process ourselves, offering customers our own, highly qualified personnel,” he says. Having worked for large shipping companies during his career, Jensen was often inspired by how small shipowners seemed better equipped to maintain a high-quality fleet and strong organisational culture. “I used to see ships from smaller owners go by and I was always so impressed by how well maintained they were. This is because they had strong company cultures and gave their staff responsibility. That’s what we wanted at Nordic. So we have tried to cultivate a flat organisation, almost like a family-run owner, because we want our employees - in the office and on board - to feel pride and ownership in what they do,” he says. Jensen adds that, since its creation, Nordic Hamburg has achieved retention levels of 100 per cent in the office and 90 per cent on board. “People can see that the company is rapidly growing and they enjoy working in an where they can see their ideas being implemented,” he states.
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Sleek organisation Starting from scratch also enabled Nordic Hamburg to order state-of-the-art newbuildings, implement a modern infrastructure and recruit skilled people. “We have a modern, fuel-efficient fleet, capable of attracting higher day rates, and are not held back by legacy procedures. We also have a modern IT system which helps us run our fleet more efficiently,” says Jensen. Nordic Hamburg’s first two vessels arrived in April 2010. Less than 18 months later, the number had grown to 10 ships and today the company’s fleet is 11 strong. The company is looking to expand with 10 more newbuildings in the near future. The current fleet includes four Handysize bulk carriers, one of which, the Nordic Malmoe, is among the first Seahorse 35 design bulk carriers ever built. DNV was involved in developing the Seahorse 35, “Green ship of the future”, which combines efficient and economical operation, ease of maintenance and loading flexibility. DNV also classes the Nordic Malmoe, and Jensen believes classification societies have an important role during the newbuilding phase. “Class societies have a big part to play in building trusting relationships between the yard, class society and owner and getting all parties to work together to ensure a good outcome,” he says. Jensen believes getting the right hull design is an essential first step towards improving fuel efficiency. “In that respect,” he says, “The Seahorse 35 is right on the cutting edge.” But, he adds: “As an operator you have to utilise the design.” By this, he means that it is no good having a vessel with an efficient design if you do not operate the vessel in the way it was intended. To that end, Nordic Hamburg trains its chief engineers in efficient operations and energy management. They have a strict maintenance plan to ensure that, over the longterm, the vessels run as the designers intended. Nordic has developed a fuel-efficiency monitoring and reporting tool which
provides reports on its fleet. “This,” Jensen notes, “is something charterers are very keen on and it gives them the peace of mind that our actual fuel efficiency is in line with our predictions.” Nordic’s fleet is also fully prepared to meet new environmental regulations coming in the next few years, including EEDI and the Ballast Water Treatment Convention. The benefits of a new fleet According to Jensen, operating a modern fleet gives Nordic Hamburg a clear market advantage over companies offering older vessels. “In bad times, the efficient ships will still be employed and in good times there is a premium for them,” he remarks. “Now, we are seeing a so-called two-tier system emerge where newer bulk carriers are achieving significantly higher day rates than the aging ones.” Testament to such comments is the fact that Nordic Hamburg’s fleet has continued to operate at full capacity. Jensen says this is a major achievement considering charterers are often reluctant to work with owners with whom they have no previous relationship. “At first it was quite a challenge to convince charterers to go into business with us because we were a new company. But we overcame this by offering them the right
“People can see that the company is rapidly growing and they enjoy working in an environment where they can see their ideas being implemented” Captain Henrik Jensen, Managing Director, Nordic Hamburg
ships that provided them with value and by showing that, although the company was new, its employees had a wealth of experience in shipping and finance,” he explains.
© Nordic Hamburg
Nordic hamburg
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Captain Henrik Jensen, Managing Director, Nordic Hamburg.
Maintaining a strong culture Just six years after establishing Nordic Hamburg Shipping, the Nordic Hamburg Group has grown to 300 employees – including 280 seafarers – and expects to double that number in the next few years. Jensen says that the biggest challenge during such rapid growth will be to maintain
the strong culture it has developed by being a small company. “Our challenge is to keep recruiting the right people who fit into the culture we have built here of focusing on quality in all matters,” he concludes. Down the years, the bulk carrier market has always been highly competitive.
But Nordic Hamburg has shown that by building a highly competent team with a modern fleet - while also being committed to its customers - swift and lasting success is achievable. Whether in New York, Hamburg or anywhere else around the world.
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Wallem Germany
Doing more with less Having opened for business in Hamburg in 2004 without a single vessel to its name, Wallem’s Germany office now manages a fleet of 36 tankers and bulk carriers. Like shipping companies everywhere, it is facing the challenge of ever-increasing quality expectations against the backdrop of a tough market. But according to Joint Managing Director Captain Joe Corcoran, doing more with less is what Wallem excels at. Text: damien devlin
Can you give us some background on the Wallem Group and Wallem Germany? “Wallem is one of the big ship managers, managing more than 400 vessels worldwide. From our Hamburg office, we fully manage 30 ships and supply the crews for six more. As well as 13 tankers, our fleet includes one Capesize, four Panamax, five Handies and seven Supramax. The Supramax bulkers are all new, while the remaining ships in the fleet are, on average, around 15 years old. As an organisation, we pride ourselves on giving our owners a fair deal. Wallem’s True North Values emphasise honesty and transparency in all our dealings.” How do owners benefit from employing a ship manager to control their fleet? “Simply put, ship managers are often better equipped to get the best out of an asset. This is because managers have more experience and resources at their disposal. Wallem manages a large pool of vessels and therefore has greater buying power with major suppliers and we pass those discounts on to our owners. They can see
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this through our open accounting system, which is accessible online 24-hours a day. “Being a global company also means we can provide assistance anywhere in the world. In particular, Wallem is one of the largest agencies in Asia and this provides big opportunities for owners at a time when the Far East is driving much of the global economic growth.”
“It is important in a downturn to keep focusing on the things that made you successful in the first place,” Captain Joe Corcoran, Joint Managing Director Wallem Shipmanagement Germany
What is your perspective on the current state of the bulk market? “Times are very tough, especially for the bigger ships, and we can’t see the market improving in the near future. But there have to be ships, so there have to be
solutions. The shipping business has always been cyclical, so the good news is that this slump will end. Having said that, this is not a traditional downturn because we’re still seeing high levels of newbuilding and too few scrappings, which is perpetuating the oversupply.” Is the market affecting ship managers in the same way that it does ship owners? “There are big consequences for both, but traditionally ship managers have been less vulnerable to the volatility of the market. In boom times, ship managers do not do as well, but in down times they don’t do as badly. Of course, there is a lot of pressure to push costs down at the moment, but we excel in offering a good service at a reasonable cost and that is a big advantage in this market. We faced cost pressure when the day-rate for Capesize vessels was ten times what it is today, so we are used to being prudent, whereas running an operation on a tight budget has come as a bit of a shock for some owners in Hamburg and they aren’t at all prepared.”
© Wallem Germany
Wallem Germany
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Captain Joe Corcoran, Joint Managing Director, Wallem Germany.
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© Wallem Germany
Wallem Germany
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Blumenau
What is your strategy for overcoming these challenges? “We’re coming up with innovative ways to help owners maximise what they’ve got. For example, we’re looking to increase the deadweight of our Handysize vessels. That will mean adding a further 1,000 tonnes to our 24,000-tonne ships, which would bring them into the standard parcel sizes and make them more viable. We work very closely with H Vogemann, which has a tremendous amount of expertise in the bulk industry, to maximise the efficiency of our bulk carriers. “It’s important in a downturn to keep focusing on the things that made you successful in the first place. Thorough training of our crew, for example, is something we continue to invest in. As well as putting
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our crew through courses, we have a policy of placing two cadets on each vessel. We have three big crewing bases in India, Manila and China, and are one of the biggest operators of Chinese-crewed ships outside Chinese companies.” Where do you see the bulk market heading in the near future? “I think there will be a lot of consolidation in the industry – driven by the banks, which want to decrease their risk – particularly in Germany. There are already examples of this consolidation, where the larger bulk companies are taking over smaller companies that don’t have the ability to withstand the market pressure. It will be very difficult for smaller companies with, say, 10 ships or fewer to survive in
this environment, especially if they have newbuildings because they will find it hard to get support from the banks. “For us, however, consolidation will bring some opportunities, because we understand how to offer good management at a reasonable cost. Many of the owners in the market have not had to face cost pressure until now and so are not as adept at running a company on a tight budget. It requires a different mindset, and we are well placed to capitalise on this.” What can fuel-efficient designs do to improve bulk carrier operations, and where can the biggest gains be made? “Fuel efficiency is the only way forward. Fuel costs are the biggest threat and
© Wallem Germany
Wallem Germany
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E.R. Bornholm
negating that threat is the industry’s best chance to get through this down cycle. If you can run a vessel on 16 or 17 tonnes of fuel oil per day – which is a saving of around 7-9 tonnes – that changes the economics of the operation. The shipyards and brokers are hoping that by offering new, highly energy-efficient vessels, they will be able to entice owners to place new orders. “The Handysize fleet is quite old, so there is some room for movement there. I think ship sizes will also increase, in that the traditional 24,000 DWT vessels will go up to above 30,000 DWT, with the majority of newbuildings being about 37,000 DWT. “The biggest efficiency gains can be made on the main engines. There are numerous contraptions and designs on the market that people are talking about,
such as the Becker Mewis Duct, which may be effective on the larger ships, and bulb rudders and so on. I’m reserving my judgement at this stage as to the effectiveness of these measures on smaller ships. But, even if they don’t live up to their touted figures, every little improvement helps and can translate into big savings.” Are there any other challenges that you see impacting the bulk carrier market in the near future? “The Ballast Water Management Convention is another issue that has people in the industry concerned. Our estimates indicate that it will cost around USD 2 million to retrofit a Capesize vessel, around USD 1 million for a Panamax or Supramax vessel, and around USD 800,000 for Handy sizes.
“We’re advising our owners to hold off installing a ballast water treatment system until they have to because of the cost and lack of certainty surrounding the technology.” Describe your relationship with DNV? “We have a very good relationship with DNV. If we take over ships which are supervised by other class societies, we usually change. DNV has excellent customer relations – its employees are knowledgeable, helpful and friendly. The most important attribute of a class surveyor is his or her ability to interpret the rules and make a decision in a way that makes commercial sense. DNV is also very flexible and has experience of all types of ships.”
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Fednav
Fednav invests in six new vessels Bulk carriers will reduce carbon emissions by 20%
© Fednav
Fednav Limited, the largest international maritime bulk carrier in Canada, recently announced the addition of six new vessels to its fleet. In partnership with Sumitomo Corporation and Oshima Shipyard, the environmentally advanced vessels will be built in Japan and are destined to become the flagships of Fednav’s fleet of over 80 ships.
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Thomas H. Paterson Senior Vice-President, Owned Fleet and Business Development.
Characteristics Located near Nagasaki, Japan, Oshima Shipyard will build the 35,000-ton bulk carriers, which are specially equipped for navigating in ice. As highly flexible vessels well suited to international trade, their size is adapted to the dimensions of the St. Lawrence Seaway.
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Environmental Benefits The new vessels represent a major step forward in terms of environmental improvements. With their advanced design and more efficient engines, they will consume 20% less fuel and produce 20% less emissions than vessels built by Oshima Shipyard for Fednav 10 years ago, ships already among the most efficient of their time. This will contribute significantly to Fednav’s objectives of reducing GHG emissions in its fleet on a continuous basis. The fuel-efficient engines will also reduce nitrogen oxide emissions by approximately 20%. All of the vessels will receive the CLEAN-DESIGN notation from the DNV classification society. “The environment is one of our top priorities when we consider the design of a new vessel,” explained Paul Pathy, Fednav President and Co-CEO, upon signing of the contract. “It is very important to us and also to our customers that our vessels not only respect but exceed environmental regulations in Canada and worldwide.” Fleet The six additional vessels will be delivered between 2015 and 2016, as part of a series of 21 new ships added
to Fednav’s fleet since January 1, 2012. Fednav has the largest fleet of ice-class vessels in the world – vessels capable of navigating demanding winter conditions along the St. Lawrence Seaway, in the Baltic Sea, and even in the Arctic.
“Working in partnership with DNV, Sumitomo and Oshima over the years allows us to design and build the most modern fuel efficient ships in their class” Thomas H. Paterson Senior Vice-President, Owned Fleet and Business Development
From Fednav Media press release 16 August 2012
Fednav
Š Fednav
The Fednav Group Fednav Limited is an international shipowning company headquartered in Montreal. Its principal activities include the transport of bulk and general cargo worldwide. The Group has offices in Antwerp, Brisbane, Hamburg, London, Rio de Janeiro, Singapore, and Tokyo, and regional offices in Canada and the United States. The Group also has terminal, logistics, ice analysis, and shipping agency services and divisions. It employs 260 people and more than 1700 crew members and stevedores.
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Green Dolphin
GREEN DOLPHIN
- a new Handysize bulk carrier concept design A new Handysize bulk carrier concept design - the Green Dolphin, created by the Shanghai Merchant Ship Design & Research Institute (SDARI) and development partners DNV and Wärtsilä was launched at Posidonia. Text: Magne Røe, DNV
The Green Dolphin concept design is a five-cargo-hold CSR double-hull bulk carrier that meets current and future expected air and water emissions regulations. The design aims to be fuel-efficient and maintenance–friendly, with high operational flexibility. The hull design has been a combined effort by SDARI and DNV. The hull is designed to provide improved overall performance at different loading conditions, speeds and sea states. The propulsion efficiency is increased through the fitting of a wake equalising duct in front of a largediameter, slow-rotating propeller. A rudder transition bulb and rudder fins reduce the hub vortex and recover rotational losses. “The focus has been on reducing the fuel consumption while giving owners different options to meet the future expected environmental regulations. The concept design is ready for the owners’ preferred choice, whether that it is to run on heavy fuel oil using emission treatment systems or to switch to low sulphur fuels or LNG,” says Hu Jin-Tao, the president of SDARI.
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“Recognising that there is more to profitable shipping than just compliance, we have consulted widely with owners and yards to ensure that Green Dolphin can be tailored to suit individual operational needs,” continues Hu Jin-Tao. Green Dolphin’s main dimensions also suit the majority of the world’s ports which receive Handysize bulk carriers. The Wärtsilä two-stroke low-speed RTflex50 main engine is Tier II compliant and can easily be retrofitted to dual-fuel engine in the near future. Multiple fuel tanks allow for strategic purchasing of heavy fuel oil, low sulphur fuel and distillates. “Design variants are available for fuel switching systems, installation of selective catalytic reduction and exhaust gas scrubbing systems and, in the near future, the use of LNG as fuel” says Giulio Tirelli, Business Development Director of Wärtsilä – Ship Power. “The concept design also includes shaft torque and exhaust gas monitoring equipment to maximise the fuel consumption optimisation possibilities while constantly monitoring emissions,” he adds.
A heavy ballast condition is achieved without using a cargo hold for ballast water and the cargo holds are equipped with compressed air, power and wash water supply. Wash water holding tanks are also included. Wide hatch openings and fully electrical deck equipment improve the loading, discharge and cleaning efficiency so port turnaround time can be minimised. A ballast water treatment system is included as well as holding tanks and treatment systems for sewage and bilge water. “We have achieved a concept design that is not only fuel efficient, safe and robust today, but is also prepared for the future, with the various design alternatives that an owner can select to comply with environmental regulations,” says Michael Aasland, DNV’s Business Director for Bulk Carriers.
© DNV/magne a. røe
GreeN DOlpHiN
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© DNV
from left: michael aasland – DNV business Director bulk carriers, wang Gangyi – sDari Director of r&D, adam larsson – DNV project manager, tor svensen – DNV coo, hu Jin-tao – sDari president, remi eriksen – DNV ceo.
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seemp
Š Getty Images
xx
THE SEEMP Why, what and how? A Ship Energy Efficiency Management Plan (SEEMP) is intended to be a practical tool for helping ship-owners manage their environmental performance and improve operational efficiency. dnv can help you reap the benefits of SEEMP for your ships – cutting fuel consumption and operating costs. TEXT: Jonathan Abrahams, DNV
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seemp
SEEMP –– Four SEEMP Foursteps stepstotosuccess success Step 1
Step 1 – Establish a baseline Establish STEP 1 a baseline is important examine data, tools and It is important toItexamine data, to tools ESTABLISH A BASELINE processes in order to determine a and processes in order to determine
It is important to examine data, tools processes credible baseline fromand which goals, plans a credible baseline from which goals, and actions all grow in order to determine a credible baseline from which plans and actions all grow.all grow. goals, plans and actions
Step 2 Step 2 – IdentifyIdentify improvement potential potential improvement
STEP 2
1
2
Step 4 – Evaluate and update
STEP 4 The progress of the different Step 4 improvement initiatives persons / EVALUATE AND UPDATE
Step 3 – Implement and monitor
Evaluate and update with the assessment of The progress of department the various improvement The progress of the various improvement performance used to modify future goals initiatives is used to modify future goals initiatives is usedand to modify future goals implementation tactics and implementation tactics. and implementation tactics.
The shipping industry has become the subject of increasing scrutiny in recent years as the general community and regulating authorities worldwide become more concerned about global carbon emissions. It is widely recognized that carbon emissions could be reduced significantly if operational efficiency were improved on a large number of ships. seemp Will beCome maNDatorY iN JaNUarY 2013 The iMo has taken a lead through MarPol and other regulatory instruments to enhance energy efficiency and GhG emission control for shipping. At the iMo MEPC 62 session in July 2011, amid mounting pressure from industry and other authorities, SEEMP was adopted and will become mandatory for all vessels at their first renewal or intermediate survey after 1 January 2013. DNV recommends companies to use this opportunity to create a momentum for reducing their fuel and operating costs. For companies that want to develop their own SEEMP, a comprehensive guideline can be downloaded from www.dnv.com/SEEMP. DNV – bringing lessons from the field to SEEMP development DNV can also assist companies in
Identify how much you can and just Identify howsave much you can save and IDENTIFY IMPROVEMENT POTENTIAL as importantly, what you need just initiatives as importantly, what to initiatives Identify how much you can save and just as undertake to realize the improvements you need to undertake to realise the importantly, what initiatives you need to improvements. undertake to realise the improvements.
4
3
STEP 3 Put the plan into action and track Step 3 performance IMPLEMENT using a variety of established AND MONITOR Implement and monitor systems / processes to help overcome Put thePut plan and track performance theinto planaction into action and track resistance to ‘new’ initiatives using a variety of established systems and processes performance using a variety of to helpestablished overcome systems resistance ‘new’ initiatives. andto processes to help overcome resistance to ‘new’ initiatives.
preparing their SEEMP, either to get started or to prepare the plan itself. We have developed SEEMPs for customers around the world bringing a systematic, structured and cost effective approach to each project. Our SEEMP development services have been built on the experience gained from the delivery of SEEMPs, detailed energy efficiency projects and complementary work conducted by the entire DNV organization in the areas of fuel management, ship design, statutory and class services. Going beyond compliance DNV believes that the way in which an SEEMP is implemented determines whether it is successful or not. Since the overall objective of having a SEEMP is to use less fuel, the benefits of a successfully deployed SEEMP include reduced maintenance costs, fewer running hours and lower emissions. A plan is essential Our approach is naturally fully compliant with the IMO guidelines, and improves on them by emphasising the delivery and implementation of the plan. By drawing on insight from leading practices in a range of shipping segments, DNV brings applied
and practical intelligence to the SEEMP development process, ensuring that the ship-owner or operator not only becomes compliant, but also reaps the benefits of lower consumption and costs.
SEEMP – What EXaCtly iS it? IMO – MEPC.1/683, Guidance for the Development of a SEEMP recognises that operational efficiencies can make a valuable contribution to reducing global carbon emissions. A Ship Energy Efficiency Management Plan’s main purpose is to establish a mechanism to improve a ship’s operational and energy efficiency – preferably linked to a broader corporate energy management policy. The SEEMP is intended to be customised to characteristics and needs of individual companies and ships. The IMO guidelines themselves can be found on the IMO website www.imo.org. Contacts For enquiries related to ship energy audit, SEEMP and energy efficiency services, contact your local customer service manager or the Energy Efficiency unit: environmentandenergyefficiency@dnv.com or seemp@dnv.com. A comprehensive guideline can be downloaded from www.dnv.com/SEEMP.
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dnv rules and standards
Easy access to DNV rules and standards on tablets and mobile devices DNV’s “Rules and Standards Online” is a library of PDF files which you easily can access from your mobile devices.
For iPad and iPhone you can easily create a bookmark on your home screen. For Android devices you can bookmark ‘Rules and Standards Online’ via an app.
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iPad and iPhone On an Apple device, you can create a bookmark icon on the home screen by following these steps: ■■
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In the “Add to Home” window, you may want to type a title of your choice, e.g. “Rules Online”. Finally, tap “Add” on the “Add to Home” window:
Open the Safari web browser and go to http://exchange.dnv.com/publishing/ Or scan this QR code to go directly there:
Tap the Share button:
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In Google play (previously named “Android Market”), search for “DNV Rules” and you should find the app called “DNV Rules and Standards”. After installing it, you should have an icon on your home screen, which takes your web browser to “Rules and Standards Online”. Note that you need to have internet access when using the app.
You should now have this icon on your home screen:
To read PDF files you can e.g. use Apple’s iBooks app. iBooks can be installed free of charge from the iTunes App Store. In iBooks, the documents you have downloaded are available also when your device is not connected to a network. iBooks is also a good tool for organizing the documents.
and then “Add to Home Screen”: Android devices On Android devices you can also easily create a bookmark for instant access to ‘Rules and Standards Online’:
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When you tap on a link to a document, you will be prompted to save it. Tap “OK” (to save), and the document will be downloaded to your device. Using “My Files”, look for the document in the folder “Download” (/Root/Download).
DNv rules aND staNDarDs
keep updated on dNv rules and standards
© DNV/Nina e: rangøy
www.dnv.com/rulesnews
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Iacs csrh
IACS Harmonised Common Structural Rules Released for Industry Review The International Association of Classification Societies (IACS) released draft IACS harmonised Common Structural Rules (CSRH) on 1 July. These draft rules are available on the IACS website. Text: OLE CHRISTIAN ASTRUP, DNV
The harmonisation project set out to achieve full compliance with the IMO Goal Based Standards (GBS) which come into force in the middle of 2016. With this objective in mind, the harmonised CSR and technical background are to be in compliance with the IMO Goal Based Standards (GBS) where Functional Requirements fall within the scope of these Rules. The harmonisation project has delivered a single set of rules comprised of common, harmonised requirements applicable to both oil tankers and bulker carriers, with specific chapters of additional requirements applicable to each individual ship type.
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The harmonised CSR are based on the current rules for tankers and bulk carriers. The harmonisation of the Rules has also involved extensive technical development work as well as testing and calibration. During the coming industry review periods, it is essential that the maritime industry and other stakeholders participate in the review, raise questions and provide observations and general feedback to IACS, as the principles of these Rules will form the basis for the structural designs of the future. As part of the agreed development process, IACS invites the industry to offer comments on all parts of the draft Rules
prior to year-end 2012. See further details at: http://iacs.org.uk/publications/CommonRulesDoc.aspx?pageid=4&sectionid=2&linkid=20 IACS will also arrange industry presentations of the draft harmonised Rules in September in Busan, Shanghai, Tokyo, Houston, London and Athens. See the IACS website for the agenda and exact schedule for these presentations: http://iacs.org.uk/publications/CommonRulesDoc.aspx?pageid=4&sectionid=2&linkid=22 The initial industry review period will be followed by a second industry review in the spring of 2013 and a review by IACS Societies’ Technical Committees in the autumn of 2013, with the scheduled adoption of
Iacs csrh
© DNV
the harmonised CSR by the IACS Council in December 2013. DNV has been heavily involved in the development, testing and calibration of the harmonised Rules and this work has been carried out by more than ten specialists with long experience and deep knowledge of hull structures and wave loads. DNV is prepared to assist the industry in reviewing the harmonised Rules and has established a comprehensive development programme for the implementation of the harmonised Rules. The programme has two main goals: to develop the necessary software tools supporting the harmonised Rules and to help the industry to assess the consequences.
It is the responsibility of each individual class society to provide the industry with software tools supporting the new harmonised Rules. DNV has carried out comprehensive software development in parallel with the harmonised Rule development. “We have both the expertise and the software tools available to assist the maritime industry in reviewing the IACS harmonised rules,” says Ole Christian Astrup, the Programme Manager for DNV’s software and implementation activities. A development version of the DNV software tool Nauticus Hull based on the July 2012 draft version of the harmonised Rules is now available. Through this, DNV offers the industry the necessary expertise
and tools for a comprehensive review and consequence assessment. We have already established Joint Industry Projects with some yards and designers. These projects include dedicated training programmes and design reviews. DNV is willing to support the maritime industry to the extent needed in order to evaluate the consequences for new designs as well as to assist the industry with training and competence building.
For more information please contact: ole.christian.astrup@dnv.com
Bulk carrier update NO. 2 2012 |
21
Nauticus project
Nauticus Project puts you in control of your newbuilding programme Nauticus Project is a service developed by DNV in close cooperation with ship owners’ newbuilding departments and site teams and aims to help owners manage large distributed projects. The service has matured over several years and is now well established with clients such as Grieg Star Shipping AS, Gearbulk Norway AS, Kristian Gerhard Jebsen Skipsrederi AS (KGJS), Knutsen OAS Shipping AS, Tritec Marine Consultants Ltd and U-Ming Marine Transport Corp (to name a few), and has been used in a number of challenging projects all over the world. Text: RICHARD TAO AND RICHARD BADHAM, DNV
In the words of one experienced user: “The stroke of genius behind Nauticus Project is not only its simplicity and flexibility but also its shift of focus towards deliverables. The project breakdown structure atomises the project into manageable deliverables. Such a project breakdown is far easier to track than one based on activities alone. It allows one to be precise about what is actually being delivered and promotes managing progress in a tangible way.” Nauticus Project screenshot The Nauticus Project service consists of three elements:
The Tool: a project-specific database accessible via the world wide web with features tailored for tracking remote newbuilding
22 | Bulk carrier update NO. 2 2012
projects from both the yard and head office. Training and facilitation: hands on training and facilitation of the team in organising project structures and activities based on your Building Specification and the yards’ Inspection and Test Plan. Advisory services: detailed project assistance drawing on DNV’s expertise in areas such as noise & vibration measurements and troubleshooting, shaft alignment, structural analysis, etc. So what do our customers say? U-Ming, currently managing several series of bulk carriers at several shipyards in China, told us that Nauticus Project was a crucial success factor in controlling so
many large projects in so many yards at the same time. “We share the same opinion!” said Magne Aunebakk, Head of Projects in Gearbulk Norway AS, when discussing Gearbulk’s experience of using Nauticus Project. “Gearbulk presently has a large newbuilding programme in several yards, and our supervision teams consist of both in-house engineers and external professionals. We also have offices in Bergen and London, where people need to have an overview of the newbuilding programme. In order to manage such a large newbuilding programme in a global organisation, we need a proper project tool. “Currently, all our site teams in the yards and our head office have access to all ongoing and past projects via Nauticus
© DNV
Nauticus project
Project. We use Nauticus Project not only to follow up inspections, but also as a ‘history book’ so that we can learn from past projects and share the experience and knowledge with new projects. “We expect to see Nauticus Project developed further to be ‘cradle to grave management tools’ for major shipowners.” When discussing his expectation of the service, Magne further commented: “By uploading as-build drawings, Nauticus Project becomes far more than a Project Management tool for newbuildings, as the vessel’s superintendents can also use the system to have access to all drawings during the vessel’s entire lifetime. This will particularly help with the ship repair and dry docking in the operational phase. The docking specification for one vessel can be
››
Nauticus Project screenshot.
Bulk carrier update NO. 2 2012 |
23
© DNV
Nauticus project
››
Magne Aunebakk, Head of Projects in Gearbulk Norway AS.
available for other vessels regardless of the location of the ship management.” “We use Nauticus Project on almost all of our newbuild supervision projects. The online database allows our clients as well as our project management team to monitor project progress at any time and from any part of the world,” says David Scott and Ron Gerlach, Project Services Managers at Tritec Marine Consultants Ltd. Grieg Star has used Nauticus Project for many years and Jan Øyvind Svardal, Vice President for Newbuilding and Projects, summed up the benefits of this during an interview by saying “Nauticus Project is a centralised database with tailor-made features for following up newbuilding
24 | Bulk carrier update NO. 2 2012
projects. By using the system, both our site team and management can easily access all the technical data and documents as well as track the project status and findings. This has helped us keep on top of all projects at any given time and makes our communication with the yard and other stakeholders very easy. In addition, the experience and knowledge we gained from the first project were easily available for subsequent projects. This allows us to focus on the right area and ensures that the quality improves as projects progress.”
For further information, please contact: richard.tao@dnv.com
Key Facts: • Developed in 2004 as Nauticus Construction, focusing on ship-owners and their site teams as a cloud solution. • More than 200 external projects completed by customers. • Independent of the shipbuilder, classification society, ship designer, etc. • All project data and files can be fully downloaded “for the record” and read-only access at the end of a project. • Special version available for shipyards • Renamed Nauticus Project in 2011 to reflect a steadily broadening interest shown by shipyards, designers, offshore companies, navies, etc. • Has become part of DNV’s internal toolbox for following up projects.
Maritime labour convention
Maritime Labour Convention to enter into force August 20th 2013 On 20 August, the International Labour Organisation (ILO) announced it had received the 30th ratification, fulfilling the last condition for the entry into force of the Maritime Labour Convention, 2006 (MLC, 2006). The charter sets out the labour rights of the world’s 1.2 million seafarers.
The ratifying countries include major flag states such as Liberia, the Marshall Islands, the Bahamas, Panama, Norway, Singapore and Cyprus and hold almost 60 per cent of the world’s tonnage. This means that the maritime industry will have a truly international standard for seafarers’ working and living conditions. The ILO has confirmed that the entry into force date for the Convention will be 20 August 2013. All ships of 500 tons and above in international trade will have to be certified as complying with the legislation developed by the flag states and identified in the Declaration of Maritime Labour Compliance as well as with the shipowners’ measures to ensure ongoing compliance with the requirements. Ships without certificates or flagged to non-ratifying states will be subject to the Convention’s “no more favourable treatment clause” and may have problems when entering the ports of ratifying states. Under the MLC, 2006 every seafarer has the right to: ■■ A safe and secure workplace that complies with safety standards ■■ Fair terms of employment ■■ Decent working and living conditions on board ship ■■ Health protection, medical care, welfare measures and other forms of social protection
©DNV/Magne A. Røe
Text: Georg Smefjell, DNV
Quite a lot of work will have to be done by authorities, ship owners, crew manning agencies, recognised organisations and ship owners before ships can be certified, and the clock is now ticking. The success of the Convention is, as always, dependent on effective implementation and we encourage the industry to start work and/or continue to work with sufficient resources. DNV has worked on these matters for a long time and we are ready to help implement the MLC, 2006 effectively by providing:
Seminars and courses An extended document review/gap analysis ■■ A voluntary declaration of compliance ■■ Statutory certification ■■ Crew Manning Office certification (regulation 1.4) ■■ Support material for self-assessment (owners, manning agents, yards and governments) ■■ ■■
For further information contact your local DNV Office or send an e-mail to MLC@dnv.com.
Bulk carrier update NO. 2 2012 |
25
pOrt state cONtrOl
dNv’s port State control Services success in a shipping company rests on a solid ground of awareness. port state control (psc) deficiencies & detentions – these words are normally associated with high stress levels, extra costs and an impact on the image of any shipping company. psc deficiencies and detentions also have a negative impact on psc target factors for ships and companies for paris mou as well as well as different vetting schemes. however, being aware and able to act on the most important issues will improve the psc performance of the ship and thus the whole company. text: hÅkon Skaret aNd yury ilchenko, dNv
1. cOmpaNy status repOrt
2. psc pOrt prOFile
pcs services
4. psc traiNiNG
26 | bulk carrier upDate NO. 2 2012
3. psc tOOlKit
Port State Control
NUMBER OF DEFECTS BY CATEGORY
During the last few decades, the maritime industry has seen a trend towards stronger enforcement of compliance with applicable rules and regulations. In addition to class and flag state inspections, Port State Controls are today a strong and important means to not only combat substandard shipping but also strictly enforce compliant ships and shipboard operations.
Sertification and documentation Life saving appliances Safety of navigations Fire safety Radio communication Working and living conditions Propulsion and machinery Emergency systems Polution prevention Water/Weather tight conditions Dangerous goods Structural conditions ISM Cargo operations including equipment ISPS
››
Figure 1
Compliance is the basic level of quality operations. However, due to the complexity of the maritime industry, compliance is an important and challenging task for most players. Quality is important to DNV, and one of the main reasons for developing our PSC Services is to help customers to be as prepared for PSC inspections as possible. Ensuring 100% compliance at any time represents a major challenge, so any PSC inspections represent a risk of deficiencies and detentions. In addition to efforts to reach the highest possible level of compliance, knowing how the PSC authorities work and what they focus on is also good risk management.
SAFETY OF NAVIGATION International code of signals – SOLAS Voyage or passage plan Establishment of working language on board Life-saving signals Bridge operation Type approval equipment Pilot ladders and hoist/pilot transfer arrangements Navigation records Radar Speed and distance indicator Rudder angle indicator Echo sounder Other (navigation) Signalling lamp Automatic Identification System (AIS) Voyage Data Recorder (VDR)/Simplified Voyage Data Gyro compass Lights, shapes, sound-signals Charts Magnetic compass Nautical publications
Below is a short description of the main elements of DNV’s PSC Services. DNV’s extensive PSC Services are organised into four main areas as shown in the illustration previous page. 0
10
20
30
40
50
60
››
70
Figure 2
1. Company Status Report: The Company Status Report has been developed to give an updated holistic overview of the quality performance of your operations, measured by the number and
Bulk carrier update NO. 2 2012 |
27
Port State Control
BULK DRY Nautical publications Ballast, fuel and other tanks Shipboard oilpollution enmergency plan (SOPEP) Emergency towing arrangements and procedures Oil record book Other (machinery) Cargo securing manual Immersion suits Lifeboats Oil filtering equipment Auxilary engine Freeboard marks Cleanliness of engine room Protection machines/parts Gauges, thermometres etc. Other (accident prevention) Garbage record book Survey report file Emergency fire pump and its pipes Emergency lightning, batteries and switches 0
››
2
4
6
8
10
12
Figure 3: PSC Port Profile. Number of PSC defects on bulk carriers in given port last year.
Quality is important to DNV, and one of the main reasons for developing our PSC Services is to help customers to be as prepared for PSC inspections as possible.
severity of findings from DNV surveys and PSC deficiencies and detentions. The latter is extracted and aggregated based on IHS Fairplay data which includes all PSC deficiencies and detentions worldwide (not only DNV-classed ships). Some of the elements in this report are: Maintenance level on individual ships in fleet (deck, accommodation, engine room.) ■■ Ships ranked by DNV’s quality parameter ■■ DNV findings benchmarked against similar ships/fleets
PSC inspections - where and how many ■■ Number of PSC inspections ■■ Ports ranked according to number of PSC inspections ■■ Ports ranked according to number of PSC deficiencies ■■ Fleet deficiencies and detentions ■■ Most frequent deficiencies in your fleet by deficiency type ■■
■■
28 | Bulk carrier update NO. 2 2012
The Company Status Report will reflect PSC performance over the last three years and current year and contain updated information on the performance of your fleet. The report can be developed upon request or as a subscription service at given
intervals. It is developed as a supporting tool to measure the quality performance of your fleet, and some basic benchmark values are also included. Its main benefits are to identify possible improvement areas in your fleet and keep an eye on trends over time. Based on an increase in the number of deficiencies in certain areas of your operations, specific ports can be picked up early and mitigating actions put in place. Some extracts of the report are shown in Figure 1 and 2 page 27. 2. PSC Port Profile Port State Controls no longer only focus on substandard and unsafe shipping but
pOrt state cONtrOl
Procedures fo r ballast water exchange
››
the psc toolkit gives you access to the essence of typical psc defficiencies through visual checklists. Guidance for new conventions will be added when coming into force.
also enforce compliant operations. to be 100% compliant in all parts of your operations at any time is a challenge. the focus areas and severity of findings vary considerably from region to region, from country to country and even from port to port within the same country. they are dynamic and change over time in the different mous. the port profile will give you updated ship-specific information on inspection frequency, defects per inspections, detention ratios and typical deficiencies and detention items per ship type (Fig 3). this will
enable you to double check that you are compliant in the areas where that specific port has seen many deficiencies. the data is based on iHS Fairplay’s database and is updated monthly. the following reports are available: ■■ Frequency of inspections and detentions by vessel type and age ■■ main areas and frequency of deficiencies ■■ detention rates per vessel type ■■ Specific deficiencies 3. pSc toolkit ■■ maintain crew awareness of typical pSc deficiencies ■■ checklists with guidance text and pictures
of all typical pSc deficiencies guidance text on typical detainable items ■■ make ship-specific checklists including pictures of your ship equipment ■■ awareness posters ■■ updated annual pSc Synopsis with frequent pSc deficiencies and dynamics ■■ use this as a channel to train new staff in pSc focus areas on your ships ■■
dNv has systematically collected and analysed the most typical pSc deficiencies and detentions over the last 15 years. the pSc toolkit gives you access to the essence of this knowledge through visual checklists with pictures. a small software
bulk carrier upDate NO. 2 2012 |
29
©DNV
Port State Control
››
DNV Port State Control course in Singapore.
application containing all this experience is included with the PSC Toolkit ring binder. This application is fully open in order to facilitate easy adjustments of the checklist to reflect specific equipment and your guidance on what to focus on during inspections. This can be used to improve the regular maintenance inspections and pre-arrival checks. The PSC Toolkit is delivered in a handy ring binder which contains a simple flow diagram showing the captain how to handle PSC deficiencies and detentions, PSC newsletters and a synopsis of PSC deficiencies and detentions over the
30 | Bulk carrier update NO. 2 2012
last few years, together with crew awareness posters for some typical PSC detention areas. Through an annual subscription for the PSC Toolkit, DNV will provide you with updated visual checklists for new conventions that are coming into force, early guidance on concentrated inspection campaigns and focused inspection campaigns and a yearly update of the dynamics of typical deficiencies and detention items. 4. PSC Training Ensuring crew competence is a challenge and a success factor for running compliant
operations. A trained crew reacts faster, responds better and has more self-confidence. Prepared officers are able to handle PSC inspections in the best professional way. Knowledge of PSC - what it is, how it works, the differences between the various MoUs, target factors, reporting obligations, etc - is essential for the shore side of your organisation too. DNV has developed three PSC training packages: ■■
A one-day classroom course. This has been run for some years with very good feedback and is updated continuously with the latest trends and developments in the field of PSC
©DNV/Magne A. Røe
Port State Control
››
DNV’s Port State Control team, from left: Head of Section Håkon Skaret, Niki Ioannidou Mowinckel, Yury Ilchenko.
A classroom course combined with an analysis of the company’s PSC performance and a special focus on the company’s improvement areas - NEW ■■ A one-day shipboard course for your officers - NEW ■■
PSC training on board The first step is to use the PSC Company Status Report to identify any possible improvement areas, including the most frequent PSC deficiencies within the company and the ships with the highest potential risk. This is used to make a tailored training programme for the shipboard organisation. DNV has a group of specially trained
surveyors who can create and carry out a PSC training programme that is tailored to a company’s needs. The training takes about 6-8 hours and the objective is to prepare the crew for the professional and smooth execution of PSC inspections. The training course consists of: ■■
■■
On completion of training, a report is sent to the company with an assessment of the vessel and the crew’s PSC knowledge, including a list of any findings observed during training.
An introduction lecture – Do It Right - how to prepare for and handle PSC inspections a ship tour with training sessions focussing on the improvement areas identified in the Company Status Report
Bulk carrier update NO. 2 2012 |
31
Market outlook
Deteriorating markets in strong delivery ďŹ nish along with softer demand In a bleak market setting with continued very strong fleet growth and a slowdown in several economies, all segments of the dry bulk market have deteriorated significantly since the last issue of this report. In the three months prior to around 10 August, the Baltic Dry Index fell back by one third. The Capesize Index ended down 28%, while the Panamax Index and Supramax Index ended down 44% and 21% respectively and the Handysize Index saw a more modest decline of 12%. Ship values are under downward pressure and, with dwindling order books, windows of opportunity may open for countercyclical investments through purchases from distressed owners. Text: shipping adviser Jarle hammer, Hammer maritime strategies
Whereas newbuilding bulk carrier prices have remained fairly stable in recent months, there have been somewhat mixed developments in second-hand prices, depending on age. Thus, for Capesize, the newbuilding price remained at USD 46.5 million. The resale price has dropped from USD 44 m to USD 42 m, the price for a 5-year-old vessel has slipped from USD 35 m to USD 33 m, and the price for a 10-year-old vessel has fallen from USD 24 m to USD 22 m. The price for a 15-year-old Capesize bulk carrier has fallen relatively more, from USD 16 m to USD 13.5 m. On 10 August, the reported Capesize spot rate index (average for different routes) stood at an extremely poor USD 3,900 per day, whereas the 1-year time charter rate
32 | Bulk carrier update NO. 2 2012
stood at USD 10,000 and the 3-year time charter rate at USD 13,500. The calculated break-even rate for a Capesize stood at USD 17,300. This is based on a 5-yearold vessel bought in today’s second-hand market, with an assumed lifetime of 25 years and an 8% return on total capital invested. The Panamax spot rate index stood at USD 6,500, with the 1-year time charter rate at USD 9,500 and the 3-year rate at USD 10,500. The calculated breakeven was also for this size significantly higher at USD 13,300. The Supramax has fetched the highest spot rates for parts of this year and the spot rate index stood at USD 9,300, with the 1-year time charter rate at USD 9,750 and the 3-year rate at USD 10,500, also below the calculated break-even of USD 12,700. The Handysize spot rate index stood at USD 7,700 per
day, whereas the 1-year time charter rate stood at USD 8,500 and the 3-year rate at USD 9,000, somewhat below the calculated break-even rate of USD 9,900. For Capesize and Panamax, the quoted future rates for the next seven years are below the calculated break-even rates, for Supramax, the quoted future rates for the next four years are below break-even, and for Handysize, future rates for the next two years are below break-even level. Again, a comparison of spot rates, time charter rates and futures quotations with calculated breakeven rates points to a continued downward pressure on bulk carrier values. The fleet growth is still overwhelming, but the order book is shrinking rapidly. Data from Fearnresearch show that the dry bulk fleet increased by 14.4% last year after
Market outlook
DRY BULK SPOT RATES AFTER 2008 CRASH Size groups more decoupled ‘000 USD/d
Source: Bartic
90 80
Capesize Panamax
70
Supramax Handysize
60 50 40 30 20 10
Okt 12
Jul 12
Apr 12
Jan 12
Okt 11
Jul 11
Apr 11
Jan 11
Okt 10
Jul 10
Apr 10
Jan 10
Jul 09
Apr 09
Jan 09
Okt 08
0
HM STRATEGIES Pig Iron Production Million tonnes. 3m av. 60 PIG IRON 6m change 2012 CHINA + 4.1% R-O-W + 0.2% World + 2.5%
EU 50
China Japan South Korea + Taiwan
40
USA 30 CRUDE STEEL 6m change 2012 CHINA + 1.8% R-O-W + 0.0% World + 0.9%
20
10
16.7% growth in the preceding year. In the first seven months of 2012, there was growth of 8.0%, with as much as 11.3% scheduled for delivery during the remainder of 2012, 7.4% in 2013, and just 2.1% in 2014 and later. The fleet growth will also depend on slippage and scrapping. Based on Fearnresearch data, it has been calculated that bulk carrier slippage has decreased from 51% in 2009 to 44% in 2010 and 31% in 2011. The bulk carrier order book as a percentage of the existing fleet has come down from 72% at the beginning of 2009 to 21% in May 2012. Year-to-date in early August, scrap sales amounted to 19.5 mdwt, as against 23.0 mdwt in the whole of 2011. New orders over the same period totalled 5.6 mdwt, as against about 33 mdwt in 2011 as a whole. Looking at size groups, the fleet development over the last 12 months shows big variations. Thus, Very Large Bulk Carriers over 200,000 dwt increased by 35% to 72.4 mdwt and had an order book of 40% at the beginning of August. Capesize in the range 100-200,000 dwt rose 13% to 201.8 mdwt and had an order book of 12%. The Panamax fleet of 60-100,000 dwt increased by 15% to 170.1 mdwt and had an order book of 30%. The Supramax fleet of 50-60,000 dwt increased by 23% to 93.7 mdwt, with an order book of 18%. Handymax vessels of 40-50,000 dwt experienced a decline of 3.5% to 40.9 mdwt, with an order book of 9%. Handysize vessels of 25-40,000 dwt are experiencing a revival and saw an increase of 7% to 68.9 mdwt, with 19% on order. Smaller bulk carriers of 10-25,000 dwt saw a decline of 3.5% to18.4 mdwt and had an order book of 4.5%. Small bulk carriers are often replaced by geared multipurpose vessels which, in addition to bulk cargoes, also carry containers and fast increasing volumes of project cargoes.
Jan 12
JAn 11
Jan 10
Jan 09
Jan 08
Jan 07
Jan 06
Jan 05
Jan 04
Jan 03
Jan 02
Jan 01
Jan 00
Jan 99
Jan 98
Jan 97
0
On the tonnage demand side, the fleet growth of 14% over the last 12 months is
Bulk carrier update NO. 2 2012 |
33
Market outlook
34 | Bulk carrier update NO. 2 2012
Million tonnes. Monthly 70 IRON ORE
60
2012 7m: +9%
50 40 30 20
COAL 2012 6m: +66%
10
Oct
Jul
Apr
Jan
Oct
Jul
Apr
Jan
Oct
Jul
Apr
Jan
0
HM STRATEGIES World Grain Exports by Type Million tonnes
Source: IGC
160 140 120 100 80 60 Soybeans and meal 40
Wheat Coarse grains
20
Soybeans
13
12
11
10
09
08
07
06
05
03
02
01
00
99
98
97
96
95
04
Rice
0 94
The coal trade is by some seen as perhaps more promising than the iron ore trade in the next few years. The estimated seaborne coal trade in 2011 was about 945 million tonnes, consisting of about 225 mt coking coal and 720 mt thermal coal. In particular, imports of coal to China have increased remarkably. In 2009, coal imports to China rose 221% from about 39 million tonnes to 126 mt, followed by growth rates of 33% in 2010 and 20% in 2011 to reach 202 mt. The first half of 2012 saw an increase of as much as 66% in China’s coal imports. In 1H 2012, China’s coal imports equalled 38% of the country’s iron ore imports, as against a share of 9% in 2008. Chinese companies have invested heavily in Australian coal mines. Coal imports from Australia rose from just 3.5 mt in 2008 to 44.6. mt in 2009, but decreased to 36.9 mt in 2010 and 32.6 mt in 2011 because of flooding at mines.
HM STRATEGIES China’s Iron Ore & Coal Imports
93
indeed a very poor match with the year-todate growth in world steel production of just 0.9%. The steel industry, through iron ore, coking coal and other steelmaking raw materials, as well as steel scrap and steel products, accounts for almost half the total dry bulk shipments. World pig iron production, which requires iron ore and coking coal, showed a year-to-date increase of 2.5%. China’s crude steel production increased by 1.8% in the first 7 months of 2012, whereas the country’s pig iron production was up 4.1% over the same period. In comparison, iron ore imports to China increased by 9.4% during the first 7 months of the year. Besides, significant increases in domestic iron ore production have contributed to further stock-building of iron ore in China. On the iron ore export side, developments have been quite mixed. Over the first 7 months, Australia’s exports rose 17% to 244 mt, whereas Brazil saw a marginal decrease to174 mt, and India had to face a decline of 46% to 28 mt, as more of the country’s iron ore is being used domestically.
Market outlook
HM STRATEGIES Dry Bulk Market. Orders & Demolition Million dwt. 3m av. (Fearnleys)
BDI
16
14,000 Demolition
14
12,000
Orders 12
BDI
10,000
10 8,000 8 6,000 6 4,000
4
Jan 12
Jan 11
Jan 10
Jan 09
Jan 08
Jan 07
Jan 06
Jan 05
Jan 04
Jan 03
Jan 02
Jan 01
Jan 00
0 Jan 99
0 Jan 98
2,000
Jan 97
2
HM STRATEGIES Bulk Carrier Fleet & Orders. August 2012 Million dtw
Source: Fearnleys
250 30%
Orders (21%)
11%
Existing
200
Indonesia seems to have established itself as the largest exporting country, well ahead of Australia, and is now China’s main supplier, with exports to this country rising from 14.1 mt in 2008 to 101.2 mt in 2011. Last year, China became the largest coal importing country, ahead of Japan, which imported 175 mt in 2011 as against 192 mt in 2008. Whereas Japan has seen stagnation and decline, South Korea has experienced a continued increase in its coal imports, reaching 129 mt in 2011. India has also seen a remarkable growth in coal imports, from about 26 mt in 2004 to 126 mt in 2011. On the grain side, the worst drought in the USA since 1956 has recently curbed exports from this country. Over the past couple of months, wheat prices are up about 50% and soybean prices up 25%. Unfavourable weather conditions have also hit the Black Sea region. In late July, the International Grains Council estimated the world trade in grains, rice, soybean and soybean meal to develop as follows: 428 mt in crop year 2010/11, 450 mt in 2011/12, and 443 mt in 2012/13. While waiting for better times in the dry bulk market, it is worth observing that although ship deliveries will soon decrease significantly, there are substantial fleet reserves tied up in slow-steaming and inefficient operations.
150 18% 100
40%
19% 9%
50
18%
4% 0 10–25
25–40
40–50
50–60
60–100 100–150 150–200 200–250
Size groups in ‘000 dwt
Bulk carrier update NO. 2 2012 |
35
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THE POWER OF BEING FUEL EFFICIENT when business conditions are tough, cutting costs becomes vital for survival.
Fuel is a major cost item today and dNv can assist with all aspects of reducing fuel consumption. our experts have experience ranging from the implementation of operational energy management services to technical solutions, such as hull optimisation for newbuildings and retrofitting of fuel saving devices on existing ships.