Maritime Matrix Today March 2021 by Marex Media Pvt Ltd

MATRIX

“Mumbai Port held a leadership position by continuously undergoing transformation,” – Mr Rajiv Jalota, Chairman, Mumbai Port Trust

ATPI acquires travel activity of Hamburg Sud 21 companies keen on running specialised vessels between Indian ports

New Bunker Procurement Service Launched Swedish government launches eco-bonus incentive to shipping firms

TODAY

MAR ITI ME

US$ 3 • ` 150 Vol 10 • Edition 03 • March 2021

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Strong support for drone delivery start-ups A

mong the range of uses being developed for drones is the opportunity to conduct ship-to-shore deliveries. The shipping industry and port authorities are showing strong support for the concept and recently a Singapore start-up raised seed capital from the shipping industry and investors to continue the development of its technology. F-drones, founded in 2019, raised seed capital to continue the development of its system designed to carry over 200-pound payloads a distance of over 60 miles. The shipping management company Eastern Pacific Shipping, which has been involved with the first test flights, lead this round of investment along with participation from shipowner/manager Schulte Group through its venture arm, Innoport. Other participating in the fundraising included SEEDS Capital, Entrepreneur First, Orient Ventures, Superangel, and a few Singapore-based angel investors. “We are very excited to be able to close the round with more 04 | Maritime Matrix Today | March 2021

capital than we initially intended. This demonstrates the industry’s confidence in our capability and vision to make maritime logistics more efficient, sustainable and safe,” says Yeshwanth Reddy, cofounder of F-drones.

said Gil Ofer, Special Advisor for Innovation at Eastern Pacific Shipping. Among the other benefits of the technology, they highlighted the ability to limit direct contact which has proven so critical during the pandemic.

F-drones is currently conducting test flights on its Hyperlaunch system capable of delivering 10-pound loads over 30 miles. In December 2019, during the first test flights, they sent nearly seven pounds of spare parts and 5.5 pounds of Christmas gifts to the crew aboard an Eastern Pacific bulker anchored in Singapore harbor. During the return flight, the drone carried fuel and fresh water samples to shore. Subsequent flights included the first commercial beyond-visualline-of-sight drone delivery to another Eastern Pacific vessel and the world’s first commercial drone delivery at night in Singapore.

F-drone is using these first systems to develop its Hyperlaunch Heavy (HLH), a fully electric and autonomous proprietary drone, capable of delivering the larger 200-pound payloads. The goal is to start test flights to ships in Singapore later this year and commence commercial drone deliveries with Hyperlaunch soon after.

“EPS is proud to lead F-drones’ first seed round. We firmly believe they will reinvent the shore-toship delivery process by being faster, cheaper, and cleaner than any existing model in use today,”

Among the other organizations working with F-drones are the Maritime and Port Authority and Civil Aviation Authority of Singapore in helping to develop the protocols for the service and test flights. Among the shipping industry, Wilhelmsen, GAC Group, Hafnia, and Throme Group, have also been working with and supporting the company. MMT

“Mumbai Port held a leadership position by continuously undergoing transformation,” – Mr Rajiv Jalota, Chairman, Mumbai Port Trust

Master of Science (Chemistry) from Lucknow University, Rajiv Jalota joined Indian Administrative Service in 1988 while pursuing Masters in International Development Policy from Duke University, USA. Having worked in senior positions at MIDC, Municipal Corporation of Greater Mumbai, Sales Tax, GST, Corona Control Room and the Higher and Technical Education department of Maharashtra, Mr Jalota joined as Chairman, Mumbai Port Trust with effect from 4th November 2020. Mr Jalota talks about his experiences and future plans for Mumbai Port to Jagdamba Pandey. Having vast knowledge and experience, what do you hope to achieve in this position? Focus will be to recoup the slide in the traffic volume in last nine months on account of COVID-19. The Port has also embarked on ambitious projects related to capacity augmentation, environmental upgradation and other measures required to improve the turnaround of the trade to bring in more business. Furthermore, various city-related

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projects especially relating to providing water transport facilities from the Eastern Water Front have been embarked upon, besides the projects to boost cruise and tourism sector. What are your future plans for the progress of Mumbai Port? Mumbai Port held a leadership position by continuously undergoing transformation in its shape, facilities, technology by adopting new policies in tune with the requirement of the trade and city. However, with a large mega polis surrounding it from all sides, there is an inevitable conflict between the Port’s cargo business and the city’s needs. To be relevant and sustainable for many more decades, MbPT has to dive deep not only to see the present, but also the future. While the mega polis is undoubtedly posing challenges to the traditional model of the Port business in terms of evacuation difficulties by road and environmental concerns of dusty polluting cargoes; it opens up many new opportunities, being a number one and prime urban space. A Master Plan in this regard has been prepared with long and intensive consultations with all stakeholders including employees and Unions. This Master Plan has three distinct characteristics: • Cargo related: Increase cargo by improving efficiency, cost reduction and using more of pipelines and water ways for evacuation while containing and stopping the dusty polluting cargoes. • Sea Tourism related: Transform the waterfront and port facilities which fall into disuse, redundancy and re-orient them for new opportunities of tourism development. • Smart City related: Use vacant and idle land which is not required for future Port business, and monetize it to secure the long term financial requirements of Port like Pension Fund, etc. Cargo Related Projects: • Expanding the POL capacity by constructing JD-5: The biggest crude oil terminal with a capacity of 22 million tonnes per annum is being constructed at Jawahar Dweep Island. • Bunkering Terminal: This project takes advantage of the over 5000 ships visiting the Mumbai Harbour annually.

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• F.S.R.U. for LNG: This shall provide clean energy upto 5 million tonnes per annum without creating stress on land side facilities as the Floating Terminal would be in sea and evacuation of LNG would be through sub-sea pipelines. • Barging of containers between JNPT and Mumbai: This project is to get more containers from JNPT through waterways, by covering only a distance of 14 kms, eliminating a long road journey of 120 kms, and, its resultant pollution and road congestion. • Indira Dock upgradation: Mumbai Port will continue to be a port for Automobile and steel and so, for efficient and cost effective facilities, improvement is being effected by repairing and refurbishing the warehouses, roads and employee’s amenities. • Ship Repair Project: Hughes Dry Dock, MbPT and four berths in Indira Dock are developed as Integrated Modern Ship Repair Facility by long term easing to Cochin Shipping Yard Ltd. Sea Tourism Related Projects: • International Cruise Terminal (ICT): The Mumbai ICT is under development at Ballard Pier extension berth at an estimated cost of Rs.495 crores. This terminal shall not only be used for cruise ships, but also by the city folks because it will have retail stores, restaurants, leisure areas and many more facilities. • Domestic Cruise Terminal (DCT): DCT helped promote a cruise ship between Mumbai and Goa, operating with high occupancy rate showing the demand for many more such services in future, not only connecting other Konkan Ports but also Gujarat Ports like Porbunder, Bhavnagar etc. • 1 km. long Mumbai Port Waterfront at Prince’s & Victoria Dock Wall: This integrated water transport hub shall have all modern requirements for leisure and commute for city folks. This facility will have Ro-Pax Terminal with sea side restaurants, skating rink and cycling tracks, amphitheatre, Domestic Cruise Terminal, marina, floating restaurants, harbour cruises etc. a) Ro-Pax Terminal: It is perfect example of harnessing water ways for commuting / tourist movements and reducing the road traffic. Ro-Pax services between Mumbai, Mandwa and Nerul have opened up. Further

important nodes will also be connected as to Navi Mumbai’s new upcoming airport. b) Marina: Mumbai’s first modern Marina will have about 310 yachts parking capacity with 102 yachts in dry stack yard with all necessary facilities. c) Floating Restaurants: Two Floating Restaurants have already been approved. d) Rope way between Sewree to Elephanta: The world’s longest rope way over the sea of approximately 8 kms. shall be built in PPP mode costing about Rs.700 crores. e) Kanhoji Angre Island Tourism: A jetty is built and internal facilities are being developed, so that this can become truly a new venue for the day trip picnic, heralding new opportunities of leisure and adventure. Smart City Related Projects: • Eastern Waterfront Smart City: About 700 acres is identified for development of Eastern Waterfront areas of Mumbai Port. A huge 300-acre park, with an ecological park for preservation of mangroves is going to be the city’s future lungs & green space. • Development of a Super Specialty Hospital: A 600 bed super specialty hospital is planned at

the existing locations of MbPT hospital on PPP basis to provide the improved health facilities to 75,000 port employees and their dependents, as also to a huge population in its catchment areas. • Ecological Mangrove Park: MbPT has planned an Ecological Mangrove protection park in Sewri. Mumbai is retaining its character as Cargo Port, but embracing new opportunities in leisure and tourism arena and also reclaiming its land and waterfront by removing the encroachments and putting up its surplus land and waterfront for revenue realization for fulfilling the pension fund to secure the future of pensioners, employees and their families. What policies should a port adopt to ensure good financial health? To ensure good financial health, ports should adopt a policy to progressively move towards landlord model to play a facilitator to use port’s geography and the regulatory role to bring interface between the efficient and cost-effective service providers’ i.e. terminal operators and the importers and exporters - the end users. MMT

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ATPI acquires travel activity of Hamburg Süd

he ATPI Group, global leader in travel management and events, today announces the acquisition of German travel agency Hamburg Süd Reiseagentur GmbH from Danish shipping conglomerate A.P. Moller - Maersk. The strategic takeover marks further expansion of ATPI’s footprint in the European corporate travel market and further strengthens its market-leading position as a specialist travel management company for the global marine industry. Hamburg Süd Reiseagentur member of the Lufthansa City Center network - is one of the leading providers of cargo ship travel. The company, founded in 1963, has developed into one of the largest independent travel agencies in Hamburg in the field of business travel management, leisure cruises, cargo ship trips and events. Following the acquisition, the team and management of Hamburg Süd Reiseagentur will transfer to ATPI, who are committed to retaining and growing the number of employees. For existing clients, it will be business as usual, with the same contacts, systems and 08 | Maritime Matrix Today | March 2021

relationships remaining in place. ATPI aims to grow the business in Germany and offer its marine and corporate travel technology platforms to the existing Hamburg Süd Reiseagentur client base. Adam Knights, regional managing director Europe & Middle East at ATPI, commented: ‘The Hamburg region has been a strategic priority for ATPI, and we are delighted to have found the right partner at the right time. Our Nordic marine businesses in Norway and Denmark, and Southern European marine businesses in Greece and Cyprus have all highlighted the need to be physically present in Hamburg. The agency staff and their knowledge based on their historic ownership was a critical requirement for ATPI. We were particularly impressed with the corporate client base of Hamburg Süd Reiseagentur and believe existing clients will benefit from the expanded global reach of the ATPI footprint along with additional technology solutions.’ Mette Christensen, Senior Director, responsible for Hamburg Süd Reiseagentur at A.P. Moller Maersk, added: ‘As part of the

strategy of A.P. Moller - Maersk we are focusing our business fully on container transport and logistics, while we have been searching for a new strong owner for the Hamburg Süd Reiseagentur. I am very pleased that with ATPI we have found the right partner to secure a strong future for the management, staff and clients of Hamburg Süd Reiseagentur. ATPI’s marine travel expertise and the strategic focus of the business, will give the Reiseagentur an exciting and very professional new home, with significant opportunity to grow and prosper.’ It is ATPI’s intention to remain a member of the Lufthansa City Center network and further build on the current relationship, both in Germany as well as internationally. The ATPI Group operates from 100+ offices worldwide, and has successful operations in corporate travel, corporate event management, online travel technology and specialist travel management for a number of key industries including the energy and shipping sectors. MMT

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Bunker Fuel Outlook

ight fuel availability in Houston could ease in the next week as suppliers work through delivery backlogs. The fog has cleared to allow more ships to pass through Houston Ship Channel. Thick sea fog closed the channel intermittently last week, leading to a build-up of over 50 ships waiting to enter the channel inbound when it reopened. As this pent-up ship traffic has been cleared to enter the channel, docks in Houston and other ports in the area have become congested. Bunker suppliers are now working through backlogs of orders and availability of prompt delivery slots is tight in Houston. Galveston Fairway Anchorage has had limited volumes recently as it awaits resupply. VLSFO remains 10 | Maritime Matrix Today | March 2021

tight at the New Orleans Outer Anchorage (NOLA) location. Fuel oil production on the US Gulf Coast has been restrained after a winter storm struck the region two weeks ago, and inventories have been drawn as refineries take time to ramp up production again. Gulf Coast fuel oil stocks fell 4% to five-week lows of 17.80 million bbls on 26 February, the latest data from the US Energy Information Administration (EIA) shows. The region’s refineries produced 23,000 b/d, or 30%, less fuel oil than in the previous week. Fuel oil production fell by 32,000 b/d on the week across the US, to 175,000 b/d. The production shortfall has been compensated by a 94,000 b/d rise in US imports, to 231,000 b/d.

Demand for imports has increased in tandem with higher fuel oil consumption, which went up by nearly a third last week. Several ports further south are still experiencing tight availability of bunker fuels. All fuel grades are tight in Bahamas’ Freeport, where the earliest delivery date has been pushed back to 15 March. Limited volumes have contributed to strengthen Freeport’s prices against other Caribbean ports, including St Eustatius and Jamaica’s Kingston. MMT

Eastern Pacific to develop methanol and ammonia as marine fuels

ingapore’s Eastern Pacific Shipping (EPS) has signed a Memorandum of Understanding (MOU) with Dutch OCI N.V. and engine manufacturer MAN Energy Solutions to develop methanol and ammonia as marine fuels. Under the MoU, the partners will select conventional vessels from EPS’ existing tanker fleet that use MAN engines to be retrofitted, allowing them to be powered by methanol and ammonia which will be supplied by the Dutch producer and distributor of nitrogen and methanol products OCI. Also, Eastern Pacific Shipping is planning to build new vessels with MAN engines powered by the same two alternative marine fuels. As informed, OCI intends to charter the first retrofitted vessel from EPS. “As a leading tonnage provider, EPS has taken a firm stance that sustainability begins with accountability. This means we have a responsibility to implement emission lowering solutions available today while simultaneously developing solutions for tomorrow,” EPS CEO Cyril Ducau said. “Converting our existing conventional fleet to burn methanol creates a unique opportunity to continue lowering our carbon footprint significantly and rapidly. In the meantime, developing ammonia-fuelled conversion and newbuilding projects will help develop more mature zero-carbon solutions in the longer-term.”

The partnership highlights the importance of cooperation at a time when the shipping industry is faced with the decarbonization challenge and growing pressure to accelerate the process and stop sitting on the sidelines. The partners said the MoU is an example of not letting the perfect be the enemy of the good, as the technology to retrofit vessels to run on methanol exists today while using methanol and ammonia on newbuilds is still a few years away. Methanol and ammonia are very interesting candidates as zerocarbon fuels for MAN as well. The company has already introduced a methanol-burning two-stroke engine, and it expects to deliver the first ammonia-fueled engine in 2024.

promising as these products are among the best-placed alternatives to help this sector decarbonize in a cost-effective way. We are confident that, in addition to the exciting developments on new-builds, existing vessels can economically convert their engines to use our low-carbon products and help the industry meet its goals,” Ahmed El-Hoshy, Chief Executive Officer of OCI NV, said. “We see this as starting with the adoption of grey/blue methanol and ammonia and then shifting to green as production costs come down, customer appetites move towards green and regulations continue to develop.” MMT

“The use of ammonia or methanol as a shipping fuel is particularly

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21 companies keen on running specialised vessels between Indian ports

ndigo Seaways, Pushpak Logistics, Adani Logistics, JM Baxi, Shreyas Shipping, Esquire Shipping and Trading are among the 21 companies that have signed MoUs with Sagarmala Development Company Limited (SDCL) to explore and operationalise running of specialised vessels along various origin and destination points along the sea or water routes. SDCL will extend all support in getting clearances, acquiring land, setting up supporting infrastructure, among others, Dilip Kumar Gupta, MD and Director (projects), SDCL, said in a conference here on Monday. 12 | Maritime Matrix Today | March 2021

Some vessel operating companies want an exclusivity clause on the routes where they operate the roll-on roll-off vessels for carrying trucks or ropax (vessels that carry cargo and passengers), said Gupta. The government thinking is to let the vessel operators have an exclusive right for a route till the vessels achieve 75 per cent capacity utilisation, Gupta said. He said over the next few months, some vessels will start operating on new routes. Also, 24 companies, including Central Warehousing Corporation, Balmer Lawrie, Hind Terminals and JM Baxi,

have signed MoUs with SDCL to develop warehouses near various ports and inland waterways. Several of these MoUs are indications of a company’s interest in the area and they will fructify after techno-feasibility study. Overall, SDCL has signed 48 MoUs which entail an investment of ₹11,870 crore. MMT

Shell plans to double its existing LNG bunkering network

lobal energy giant Shell marked another milestone for its liquefied natural gas (LNG) marine fuels business with the charter of a new LNG bunkering supply vessel being constructed in Spain. The company noted in its statement that the new charter will add further flexibility to customers on key trade routes. “Shell plans to double its existing LNG bunkering infrastructure on key international trade routes by the mid-2020s and this vessel will play an important role in that journey as we serve more customers across our global network with LNG,” Tahir Faruqui, General Manager, Shell Global Downstream LNG, said.

He added that the company completed the first LNG bunkering in Barcelona in 2019. Shell has closed the primary gaps that existed in the global LNG bunkering network with the recent arrival of bunker vessels in Singapore (FueLNG Bellina) and the east coast of North America (Q4000), meaning that customers can be served by Shell across the world through six LNG bunker vessels in service. Shell noted it has completed more than 400 ship-to-ship LNG bunkering operations across a broad range of segments in seven countries and eight ports, including Rotterdam, Barcelona, Tenerife, La Spezia, Gothenberg and most recently Jacksonville.

Shell said it will be performing its first LNG bunkering operations in Singapore in early 2021 and will begin operating in Port Canaveral soon. LNG bunkering licenses have been granted to Shell in several locations, including most recently in Gibraltar. The new bunker vessel being constructed in Spain will be operated by Knutsen OAS Shipping and will use the Enagás LNG terminal in Barcelona for the loading and supply of LNG. The cargo capacity will be 5,000 cubic meters of LNG. MMT

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Faulty Engine Caused Catastrophic Fire

he MAIB has released its report on the catastrophic engine fire aboard the freight ro/ro Finlandia Seaways, which seriously injured one crewmember and destroyed the vessel’s engine room. At 2000 hours on April 16, 2018, on a regular crossing from Zeebrugge to Rosyth, the crew aboard Finlandia Seaways noticed powerful vibrations all the way up on the bridge. The third engineer went from the engine control room out into the engine room to investigate, and as the noise and vibration grew louder, he took shelter behind one of the fuel purifiers in the purifier room. There was a loud bang, and flame and smoke came from the engine room door. The main engine had broken a connecting rod, sending several components through the side of the crankcase into the engine room and sparking a fire.

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From the heavy vibration, the master realized that something was wrong and ran up to the bridge, taking command. He pulled back the vessel’s controllable pitch propeller to zero pitch and sounded the general alarm, calling on the crew to go to muster stations. Meanwhile, the third engineer was cut off from his main escape route by the fire. He decided to use a secondary escape route at the aft end of the engine room. He ran back aft to a set of three vertical ladders that would take him to safety. At the top of the first ladder, he struggled to get past the chains on the ladder platform rail; he fell back down three times and lost his flashlight. On the next try he made a successful escape. Once the third engineer had escaped and mustered with his shipmates, the crew reacted quickly and extinguished the fire using the fixed firefighting system. At 2200 hours, an HM Coastguard helicopter rendezvoused with Finlandia Seaways to medevac the third engineer; he was flown to the Norfolk & Norwich hospital and treated for smoke-related injuries to his lungs, eyes and renal system.

The fire damage was extensive, especially at the tween deck level and the overhead. The engine itself was destroyed: the crankcase was ruptured on the port and starboard sides, with crankcase explosion relief doors and large sections of the casting thrown far across the deckplates. Cylinder A5’s connecting rod, along with the lower half of its piston and its crankcase counterweight, had been thrown through the starboard side of the crankcase. Cylinder B5’s con rod and piston had also been ejected. In a forensic investigation, the engine OEM and MAIB found evidence of a fatigue fracture on the A5 con rod small end. The con rod small ends from all the other cylinders were sent to the OEM for inspection, and it was found that seven of them had cuts or notches at the edges or internal faces of the small end eyes. The cuts were “symptomatic of the use of a disc cutter or angle grinder,” and may have been created by an improper procedure to remove the bushing in the small end eye.

manufacturer. Cylinder A5’s con rod small end bushing had been replaced in February 2017, but the contractor could not confirm that its technicians had used liquid nitrogen to cool (and shrink) the new bushing before installing it in the small end. An examination of the con rods out of a sister ship that had been serviced by the same shop found similar signs of damage, along with “localized heat marks” on several small end eyes, likely produced by a torch. “The extent of the damage caused during the piston pin bush overhauls was visually apparent and, therefore, it was obvious that [the contracted] service engineers did not appreciate the potential consequences of the stress [risers] they had introduced,” MAIB concluded. “The introduction of notches, probably caused during the bush removal process, introduced stress [risers] into the small end, increased the likelihood of fatigue crack initiation and therefore fatigue failure.” MMT

The Finlandia Seaways’ main engine had been serviced by an outside service firm, which had not certified by the engine’s

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Sino-Global reveals to accept bitcoin as payment

he US-based company SinoGlobal Shipping America revealed it will now accept bitcoin as a form of payment for its global shipping, freight, and logistics services. As explained, payments made in bitcoin will be made at the rate applicable at the payment date. “Sino-Global is adapting to digital currency industry trends by offering our customers options to use a variety of payment methods,” Lei Cao, Chief Executive Officer of SinoGlobal, commented. “Accepting bitcoin amongst other payment methods will allow our customers and business partners to take advantage of an increasingly important payment network.” In 2018, the shipping industry witnessed the first transaction for bitcoin when 300cubits completed 16 | Maritime Matrix Today | March 2021

the first trial shipment in its smart contract deployed on the ethereum blockchain. Back then, 300cubits introduced TEU tokens, described as the ” bitcoin of the shipping industry”, as a tool for solving the no-show bookings. The tool was described as a blockchain-based shipping deposit aimed at enforcing contracts. Sino-Global: Exploring non-fungible token business In February this year, SinoGlobal signed a memorandum of understanding to cooperate with the e-commerce blockchain company CyberMiles Foundation. The duo wants to jointly explore opportunities using blockchain non-fungible token (NFT) CRC-721 protocol and trading platform, which allows enterprises, institutions, and individuals to issue and trade NFTs on CyberMiles’ public blockchain.

Specifically, many cryptocurrencies like bitcoin and ethereum are considered fungible tokens. Each fungible token is identical to each other fungible token: one bitcoin is equal in value to any other one bitcoin. On the other hand, non-fungible tokens are said to be different. Each NFT is unique and not interchangeable with another. The total value of the NFT market is now estimated at $250 million. Founded in the United States in 2001, Sino-Global Shipping America, Ltd. is a company engaged in shipping, chartering, logistics and related services. Headquartered in New York, Sino-Global has offices in Los Angeles, Mainland China, Australia, Canada and Hong Kong. MMT

Global market-based measures needed for decarbonisation

BIMCO,

the world’s largest shipping association, has called on states and the shipping industry to start a dialogue on how to create a global rule set for market-based measures (MBM) to support the use of low carbon fuels and to create a level playing field for the industry. The move comes in an effort to encourage and make easier the sector’s decarbonisation. “One way we can make the current low emission technologies competitive with traditional fuels are through some form of marketbased measure,” Sadan Kaptanoglu, BIMCO president, commented. “We need a mechanism that equalizes the cost between using low carbon fuels and traditional fossil fuels.” According to the association, market-based measures for shipping should be governed by global rules, as it is critical that the industry is not required to pay for its carbon emissions multiple times.

This is relevant if market-based measures are being implemented regionally as, for example, has been announced by the European Commission. A market-based measure can be described as a rule or legal framework that encourages a desired behaviour through financial incentives. In this case, the shipping industry should be encouraged to use low carbon or zero-carbon fuels to limit CO2 emissions. But as long as using traditional fuels is dramatically cheaper, it will discourage the uptake of low carbon fuels and put the first moving companies at a significant competitive disadvantage, BIMCO pointed out. “Equalizing the cost can also spur on innovation, because the potential market grows, and speed up the installation of the required infrastructure,” Kaptanoglu added. The International Maritime Organization (IMO) is a good platform for the debate on a ruleset, Kaptanoglu believes, but it is critical that the debate begins now, in

order for the industry to make the transition in time to reach our CO2 reduction targets. The support for some form of globally regulated market-based measures was debated and agreed at BIMCO’s board of directors meeting in late January 2021. In autumn 2020, the IMO approved a number of measures aimed at cutting the shipping sector’s carbon emissions in the next decade. The measure will require new ships built from 2023 to be significantly more energy-efficient. What is more, the measures call for the introduction of carbon intensity targets to existing ships that would be calculated based on guidelines yet to be developed by the IMO, the objective being to make them mandatory by 2026. National maritime authorities and environmental organizations around the world expressed earlier their disappointment with the measures, describing them as unambitious and vague. MMT Maritime Matrix Today | March 2021 | 17

Belfast Harbour to increase digitalisation across its operations

K’s tech firm SRO Solutions has signed an agreement with Belfast Harbour to provide IBM’s Maximo asset management software licences as the port looks to increase digitalisation across its operations. The city’s port is Northern Ireland’s principal logistics and distribution hub responsible for more than two-thirds of all seaborne trade. More than 1.75 million people and over half a million freight vehicles pass through the port annually, while 24 million tonnes of goods are managed and carried by ferries, containerships and general cargo vessels. 18 | Maritime Matrix Today | March 2021

SRO Solutions carried out a usage review and has transacted additional licenses to Belfast Harbour, more than doubling the number of Maximo licences being used on site. Over the coming months, the company’s consultants will help Belfast Harbour expand its use of the software to deliver greater efficiencies. SRO, which has helped lead IBM’s expansion into the maritime and offshore industries, began working with Belfast Harbour in 2018, implementing Maximo to store information about the port’s assets

and manage the maintenance of its equipment. “We originally helped Belfast Harbour move from a largely paper-driven system of asset management to a centralised digital solution. Maximo now holds data on a range of assets at the port, everything from cranes to vehicle traffic lights, enabling greater efficiency in maintenance planning and execution,” Tony Lackey, SRO Solutions managing director, commented. “Technicians receive their work orders via mobile devices and once a repair has been completed the

system can be updated in real time. It is an always up-to-date, accurate record of the port’s assets – and with no paperwork, the potential for mistakes decreases.” “The scale of Belfast Harbour’s operation means there is great scope for it to use Maximo far more extensively across the

organisation. This agreement will give their Information Systems team the ability to harness the full power of Maximo,” Lackey added. Digital solutions are said to contribute to Belfast Harbour’s strategic goals of achieving net zero carbon emissions before 2030. With the help of digital innovation,

the port wants to help facilitate a circular economy and improve air quality. In December last year, Belfast Harbour was recognised for green leadership through 2020 Northern Ireland Environmental Benchmarking Survey. MMT

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2020 global shipping CO2 emissions down 1%

l o b a l shipping CO2 emissions decreased 1% last year as the Coronavirus pandemic curtailed 2020 shipping activity, according to maritime data provider Marine Benchmark. 20 | Maritime Matrix Today | March 2021

CO2 emissions among the ‘Big-3’ - Tankers, Bulkers and Containers - actually increased 1.2%, with a 2.4% decline in Container emissions offset by growth in the Bulker and Tanker sectors. However, the smaller sectors reversed this growth, with cruise ship emissions experiencing the greatest contraction - down 45% - and with steep declines in ferries, roro’s and vehicles carriers consistent with the weak demand. Torbjorn Rydbergh, Marine Benchmark’s CEO, noted that: “The Coronavirus pandemic has had a varied effect on shipping, with Tankers and

Bulkers generally performing well, while other sectors faced headwinds as consumer demand plummeted. Whilst the overall result is a decrease in carbon emissions for last year, the effect may be temporary as the current recovery in global economic demand points to stronger 2021 shipping activity.” Vessel CO2 emissions are calculated from the carbon content of the fuel consumed. Marine heavy fuel oil is approximately 86% carbon, which implies about 3.15 tonnes of CO2 per tonne of fuel consumed. Since the carbon content of diesel (gas oil) is slightly higher, so too are the

CO2 emissions per tonne of fuel consumed. Actual vessel fuel consumption depends on a range a range of factors, but primarily the hull, engine and propeller design, vessel displacement (draft), speed and fouling, as well as hydrological and meteorological conditions (including wind,

waves and current). Marine Benchmark’s proprietary algorithms estimate vessel fuel consumption by main and auxiliary engines, based on these factors, utilising hourly AIS data for all IMO registered ships spanning over 10-years. MMT

Maritime Matrix Today | March 2021 | 21

SEB joins Responsible ship recycling initiative

wedish financial services group SEB has joined the Responsible Ship Recycling Standards (RSRS), a joint bank initiative for ensuring environmentally and socially responsible dismantling and recycling of ships. “We want to increase awareness of the environmental and social risks associated with recycling of ships. By joining RSRS we want to demonstrate that we are dedicated to promoting responsible handling of ships throughout their lifetime,” Hans 22 | Maritime Matrix Today | March 2021

Christian Kjelsrud, Global Head of Shipping Coverage at SEB, commented. SEB becomes the twelfth member of the initiative which was started by a group of European banks active within shipping back in 2017. “Scandinavian banks have traditionally been strong within ship financing and by joining together we achieve greater leverage to work towards better sustainability standards in the global shipping industry,” he said.

RSRS is aligned with the 2010 Hong Kong Convention. This convention, which is still to be formally ratified, establishes a minimum standard for recycling of ships. In addition, the EU has formulated further requirements that apply to all vessels sailing under one of the EU Member States’ flags. The other banks that are part of the RSRS initiative are ABN AMRO, Danske Bank, DNB, Eksportkreditt, Hamburg Commercial Bank, ING, KfW IPEXBank, NIBC, Nordea, Sparebank

SR-Bank and Sparebanken Vest. SEB previously signed the Poseidon Principles, a global bank initiative to reduce the emission of greenhouse gases from shipping. The principles are consistent with the International Maritime Organisation’s (IMO) ambition that by 2050 carbon dioxide emissions from shipping shall be reduced by 50% compared with the base year 2008. Tough decade The shipping industry has had a tough decade in the wake of the economic downturn during the financial crisis. This was preceded by a strong expansion phase at the beginning of the 21st century when China joined the World Trade Organisation and started to import raw materials, take over manufacturing industries and export cheap consumer products to the West. “Then what often happens in good times occurred, namely that industry participants

rushed to the yards and ordered new ships in the belief that the good times would last for ever. Then the financial crisis hit, and the industry went into recession with an enormous surplus of new ships to be delivered. Since then, with a few exceptions, there has been a surplus of vessels over the past ten years which has put pressure on freight rates,” Kjelsrud added. Now, the orderbooks for new ships are at a historic low and there is for the most part a balance between supply and demand for vessels. With few new vessels coming onto the market at the same time as the economy is recovering from the corona crisis, the industry should experience a relatively positive market over the next two years, according to SEB. Transition for reduced emissions The big challenge going forward is the transition that is needed to achieve the ambition to halve

the emissions of greenhouse gases by 2050 compared with the base year 2008. “This must happen at the same time as sea transports are increasing which with unchanged technology would lead to an increase of up to 50% by 2050,” Kjelsrud further said. Currently there is considerable uncertainty about how the ships of the future will be powered to achieve these emission targets. “Will it be wind, LNG, hydrogen or ammonia? Does it possible to navigate in new ways where you take into account weather systems or find new triangular routes to avoid ships have to sail empty when they have unloaded? This is the big question for the industry and it naturally means that the owners are careful and waiting before ordering new vessels,” HansChristian Kjelsrud concluded. MMT

Maritime Matrix Today | March 2021 | 23

Petronav expands its tanker fleet

etrogress, Inc., a fully integrated oil commodity business that primarily serves the Mediterranean and West Africa, announced that its wholly owned subsidiary, Petronav Carriers LLC (“PCL”), on February 17, 2021, entered into a long-term lease agreement (TCH) of an FKAB MR. The TCH anticipates the longterm (4 years) lease of a 38,000 DWT Tanker of Oil Products and Chemicals, with an option to lease one more MR within the next two months. The FKAB MR is IMO type II, carrying oil products and chemicals, designed for worldwide unrestricted operations with the energy-efficient technical solutions as well as careful impact on the environment. The new MR will join Petronav’s tanker fleet the first week of March, and she will be employed in West Africa, to service Petronav’s new Affreightment (COA) project for the shipping of petroleum products within Nigeria and Europe. Petronav Carriers is a wholly-owned subsidiary of Petrogress Inc., which manages an in-house fleet of crude oil carriers and trades them in West Africa and Mediterranean. Petronav’ s leadership team, holds substantial 24 | Maritime Matrix Today | March 2021

combined shipping industry experience in managing financial, commercial and technical aspects of the business and ensures leading the company on a foundation of safe, cost-and energy-efficient and environmentally-friendly practices. The company values its team, which consists of skilled and experienced managers, port captains, technicians, ship officers, as well as specialists in the areas of safety, commercial and personnel management. Petronav retains key talent, rewards performance and continually develops its staff and holds it to high performance standards. Through qualified experience in conducting safe operations, understanding of environmental challenges, and strong leadership and coordination, Petronav shuttle fleet provides Ship-to-Ship (STS) services and/or lighting other product carriers in the area where Petronav is active. Petrogress Inc. (Delaware), is an integrated energy company, engaged in the upstream, downstream and midstream segments. The Upstream segment consists of exploration and production of crude oil in West Africa, associated with processing and storage. The

downstream segment comprises of refining of crude oil into petroleum products as well as marketing of crude oil and refined products of Gas Oil, Naphtha, Fuels and lubricants. The company operates internationally through its wholly owned subsidiaries “Petrogress Int’l LLC.” and “Petronav Carriers LLC.”. Petrogress is involved in diversified oil and gas activities throughout the U.S., Europe and Africa and has branches and representations in Greece, Cyprus, Monaco, Egypt, Ghana and Nigeria. The Company is actively seeking expansion opportunities in oil reserves and exploration in West Africa, including operating and developing natural gas production and transmission facilities along with LPG processing. Petrogress -as an independent Maritime Company- also owns and operates a fleet of tankers from its base in the historic Port of Piraeus through a series of Marshall Islands entities and provides sea-transportation services by its tankers fleet. Since last year, the company entered into the retailing market by leasing a number of Gas-fueling stations in Greece. MMT

New Bunker Procurement Service Launched

n an effort to enable more competitive and transparent pricing, Cargill and Maersk Tankers will combine their bunker volumes, and launch a new bunker procurement service for tramp shipping companies and trading houses. While the initial goal is to procure bunker fuel for Cargill and Maersk Tankers’ combined fleet, the service which launches April is also aiming to attract additional customers. Combined the two companies currently use approximately 3.5 million tons of bunker fuel annually. Cargill, which currently charters a fleet of around 700 vessels using 2.5 million tons of marine fuel per year, will leverage its in-house bunker expertise, while Maersk Tankers, which purchases about 1 million tons per year for its commercially managed fleet of more than 220 product tankers, has commercial and operational capabilities. According to the two companies, the increased scale and one voice

approach will give access to better prices and services, leveraging relationships with key suppliers in the world’s busiest bunkering hubs to ensure optimal service and bunker premiums. “As independent bunker consumers with no physical oil activity or bunker assets, we can focus on providing transparency, robust benchmarking, and a modern and digital customer experience,” said Olivier Josse, Head of Tankers and Marine Fuel at Cargill Ocean Transportation. “We are excited to collaborate with Maersk Tankers and together we have ambitious plans to become a unique provider of bunker solutions.” The new one-stop-shop the companies said will give customers enhanced access to market information, optimization of bunker logistics, and improved claims support. By digitizing, centralizing, and analyzing the large amount of available data, the service will offer increased reactivity to market

conditions and refined views on short and mid-term price outlook. “Tramp shipping companies face challenges today in a bunker market that is becoming increasingly complex,” says Claus Gronborg, Chief Investment Officer at Maersk Tankers. “Through our scale, they will get access to bunker fuel at competitive prices, while getting an experienced partner that will navigate the bunker market on their behalf.” This partnership follows a series of strategic collaborations between Cargill and Maersk Tankers. In 2019, Cargill and Maersk Tankers created a joint MR tankers pool and launched Project Njord with Mitsui & Co to bring turn-key energysaving solutions to the market. Last year, Cargill became a strategic investor in ZeroNorth, a tech startup focusing on vessel performance optimization and decarbonization founded by Maersk Tankers. MMT

Maritime Matrix Today | March 2021 | 25

Global food supply chain left ‘high and dry’

he severe shortage of sea containers – both dry and reefer – has affected the global food supply chain, leaving tonnes of perishables such as onions, meat products and millets lying uncleared in India due to the delay in shipment. Imbalance in containers As a result, people in Thailand are unable to get maize and chilly on time from Chennai, Malaysians and Indonesians are facing shortage of rose onions, and the Japanese are waiting for shrimps from the city. These are just a few examples of how the imbalance in containers is having an impact on the food chain. The imbalance started mid-last year with a number of export containers from China stuck at various ports in the US. Further, there were huge congestion at all major global ports, and slots for container storage were unavailable. This forced ships to be at the

26 | Maritime Matrix Today | March 2021

anchorage for many days, leading to delays in delivery of cargo.

for shipping export cargo, especially to the US, he added.

“It used to take 18 days to ship rose onions to Thailand from Chennai. However, due to container shortage, it is now taking over 45 days,” said P Mathan of Agrogreen Resources India, an exporter of agro products such as onions and chilly. At the company’s godown in Red Hills in Chennai’s outskirts, tonnes of onions are ready for shipment, but are awaiting containers, he added. The imbalance in container has hurt exporters badly as they had to pay for freight to South East Asian (SEA) countries, says Agri Commodities Exporters Association’s President M Madan Prakash.

However, lesser import and diversion of boxes to China led to a severe shortage of containers in India and, since January, freight to SEA is nearly $200 per TEU, said Prakash. The huge congestion at the transhipment ports led to further delay in cargo reaching the final destination, he added.

Till December, the freight was ‘zero’ from Chennai to SEA destinations as boxes were available in plenty in Chennai due to higher imports. Shipping lines quickly evacuated the boxes at ‘zero’ freight to SEA so that the containers are made available in China where, due to container shortage, companies were willing to pay a huge premium

Reefer points Seafood exporter Elias Sait said there is a huge delay in shipment of shrimps for Japan due to shortage of reefer containers. Even if containers are available, there is a shortage of reefer points at transhipment ports, he added. Agility Emerging Markets Logistics Index Survey 2021 said that the traditional sea freight peak season usually occurs in October. Shortage of containers in China was particularly acute at the start of 2021. The demand for Chinese exports was very high over the second half of 2020.

Even though China’s import demand is growing, there are few containers returning to China to be refilled and sent out again. Repercussions The repercussions are being felt across Asia, with container shortages in Japan, South Korea, India and South-East Asia expected to last at least until mid-2021, with shipping rates over the period reflecting the supply-demand imbalance, the survey said. Shipping line AP Moller-Maersk, in its 2020 annual reports, said that uncertainties related to the strength of container demand, continue to pose a risk to the developments of freight rates in 2021. MMT

Maritime Matrix Today | March 2021 | 27

Need to develop floating wind turbines

dvancing technical innovation in wind power conversion has produced turbines capable of delivering 14,000 kW of power output. Ongoing developments in offshore floating wind power generation combined with water tank vessel stability technology offer the possibility of ultra-large turbines providing ship propulsion. Windmill-powered vessels have been around for some 40 years. One example of such a vessel carrying a deck mounted windmill sailed directly into a headwind to wind a race amongst wind powered sail boats. While sailboats lean over in response to the wind, pumping water between vessel mounted tanks has proven to reduce vessel rolling tendencies. Deck mounted sails and airborne flying kite sails are very helpful to vessels either sailing with a crosswind or parallel to the wind direction. So far, windmill powered vessels have proven capable of sailing a vessel directly into a headwind. Towed Energy Source Research needs to explore the possibility of developing a floating technology capable of carrying a 28 | Maritime Matrix Today | March 2021

mega-size wind turbine that can be towed across ocean by a large vessel, while providing propulsive energy to such a vessel. In integrated/articulated tug-barge technology involves a tug unit pushing and navigation a barge. An alternative concept would involve a twin-hull catamaran vessel carrying a diesel-electric generator to provide electric power to propellers installed under the hull of the barge. There would be scope to replace the dieselelectric generator with vanadium flow-battery technology or even liquid air energy storage to provide electric power. While most of the electric power would go to the main or leading unit, a small amount of power would be allocated to electrically driven propellers installed on the towed unit. Such an arrangement would greatly reduce tension stress loadings on the towing cable and allow for relative pitching, relative roll, relative yaw and relative surge between the forward and trailing vessels. Availability of suitable winds in some regions internationally would allow for the installation of a wind turbine on the trailing

vessel, to generate electric power when the vessel combination sails into a headwind. Drag and Stability There are several methods by which to stabilize offshore floating wind turbines, the main methods being buoyancy and ballast for mobile turbines. Some racing yachts have used a hydrodynamic heavy weight installed at the bottom of the keel to offer a measure of stability when sailing in severe crosswinds. Where additional weight is allowed, transferring water amongst strategically placed tanks also offers a stabilizing method. A trio of strategically placed smallwater-area hulls may carry a mobile floating turbine, with the option of additional ballast and water transfer technology to cope with the combination of severe wind and wave conditions. The main application of towed floating wind turbines would be to provide energy when sailing into headwinds. Airborne kite sails would provide a measure of propulsion when sailing parallel to the trade winds. Mobile floating wind turbines would

be secured at special offshore mooring sites located near main ports, with energy from a local power generation assist vessel supplying propulsive energy to a ship as it moves between port and the offshore mooring site. Moored wind turbines could connect via submerged power cable to the port or local electric power grid. Scale of Turbine Offshore mooring of mobile wind turbines would allow great flexibility in terms of overall height and sailing width, where hulls might be spaced more than 300 feet apart. A single cable or multiple cables would connect between the structure of the turbine assembly and the stern of the vessel to which the turbine supplies electrical power. While the three-bladed horizontal-axis wind turbine (HAWT) would be the natural if not obvious choice, advances are occurring in the development of more efficient vertical-axis wind turbine (VAWT), with the typhoon technology from CHALLENERGY from Japan showing promise. Vertical-Axis Turbine While horizontal-axis turbines carry the electrical generator and gearing at high elevation, verticalaxis can carry much heavier electrical generation equipment and related gearing at much lower elevation and closer to water level. Traditional vertical-axis turbines have operated mainly in “push” mode on the upwind side of each section while horizontalaxis “propeller” turbines operate with the combination of “push” mode on the upwind side and “pull” mode on the downwind side, comparable to the low-pressure zone on the upper surface of the wing of an airplane in flight. However, new research is bringing about change. The CHALLENERGY vertical-axis typhoon turbine uses Flettner Rotors with trailing fins installed

at a distance from the centralaxis of a vertical driveshaft that in turn drives electrical generation equipment. Wind spins the rotors causing torque, with peak torque actually occurring at just about zero RPM. The horizontal load of a large-scale typhoon turbine assembly can be carried by a curved rail built into the mobile floating turbine carrier, with wheels installed below each Flettner Rotor to ride the circular path on the rail and carry the weight of each rotor. Competing VAWT’s have begun to appear and are being tested. Power Output Horizontal-axis propeller turbines have been developed to generate up to 14,000 kW at 40 percent conversion efficiency measured against total swept area. In mobile operation, a vertical-axis turbine carrying heavier gearing with a combination of generators placed at low elevation close to water level, can be allowed to produce greater output in powerful winds. The typhoon capable horizontalaxis turbine from General Electric offers 4,200 kW using 117 meter turbine blades. A turbine that produces 1,000 kW from a wind speed of 45 miles per hour could generate over 8,000 kW from a wind blowing at 90 miles per hour.

is an increase in power output. A ship that requires 32,000 kW of power to sail at 24 knots would require 4,000 kW to sail at 12 knots and several ship owners are sailing their vessels at that speed. Horizontal-axis and verticalaxis wind turbines are possible contenders for ship propulsion when mounted about a towed floating unit. Future research will need to develop methods by which to add low-drag mobility to floating wind turbines in a way that assists ship propulsion. While several of the GE horizontal-axis are possible contenders for future ship propulsion using the towed floating turbine method, there are ongoing developments in verticalaxis turbine technology that are overcoming the shortcomings of earlier generation verticalaxis units. Ships propelled by such technology could likely see service on trans-Pacific routes and trans-Atlantic routes. MMT

One of the builders of vertical-axis wind technology offers a slat on each curved section, to briefly produce a lowpressure zone on the surface of the downwind side of each section as the wind pushes on the upwind side. The net result Maritime Matrix Today | March 2021 | 29

Strange Q1 for dry bulk shipping

t has been a particularly strange Q1 for dry bulk shipping. Usually, the larger ships — Capesizes with capacities of around 180,000 deadweight tons (DWT) that carry iron ore and coal — do poorly all quarter. This year, they did better in January than they had in a decade before succumbing to their usual slump. Then another oddity: The smaller bulkers began earning much more money than the Capesizes. As of Tuesday, Handysize bulkers (up to 35,000 DWT) were earning $19,400 per day, according to Clarksons Platou Securities. That’s almost double the $11,700-per-day rate of Capesizes — even though Capesizes carry five times the cargo. 30 | Maritime Matrix Today | March 2021

Supramaxes (45,000-60,000 DWT) and Panamaxes (65,000-90,000 DWT) are also trumping Capes, at $20,700 and $18,800 per day, respectively. This curious market inversion recently led to a Capesize being booked for a grain cargo, something “that rarely happens, if ever,” noted Breakwave Advisors. The bullish view on all of this strangeness is that Capesizes did so well early in the quarter because the supply-demand balance is tight. They’ll rev back up again soon when seasonal headwinds wane. As for smaller bulkers, they’re a bellwether of global GDP — the shipping version of “Doctor Copper.” High

rates signal a global economic resurgence, say optimists. At least some investors agree. Dry bulk stocks have been on a roll in early 2021. On Tuesday, the Breakwave Dry Bulk Shipping ETF (NYSE: BDRY) jumped 14%. It is up 93% year-to-date. The stock of Safe Bulkers (NYSE: SB) is up 120% year to date. Grindrod Shipping (NASDAQ: GRIN) is up 63%, Eagle Bulk (NASDAQ: EGLE) 59%, Star Bulk (NASDAQ: SBLK) 55%, Genco Shipping & Trading (NYSE: GNK) 45%, and Golden Ocean (NASDAQ: GOGL) 30%. ‘Day in the sun’ for smaller bulkers “The Handys, which have been

unloved for so long, are finally having their day in the sun,” affirmed Martyn Wade, CEO of Grindrod Shipping, which owns a fleet of Handysizes and Supramaxes. Wade was speaking at the Annual Capital Link Shipping Forum on Tuesday. “The last time January finished stronger than December was actually in 2008,” Wade added. “You have to go back to the good old days of the last big market. We were looking at some of the voyage rates today and they are within a few bucks of their all-time highs.” Sub-Capesize vessels carry grains and so-called “minor bulks” (bulk cargoes excluding iron ore, coal and grains). John Wobensmith, CEO of Genco Shipping & Trading, which owns a fleet of Capesizes and Supramaxes, asked the Capital Link forum, “When was the last time we’ve seen both a strong Atlantic Basin but also a strong Pacific Basin? That is what’s really driving the minor-bulk market.” Wobensmith continued, “It’s a lot of fun to talk about all the grain.

And don’t get me wrong: That’s definitely driving a lot of the spot market. But we’re also seeing a lot of cement, a lot of petcoke, [cargo] that is infrastructure-related.” According to Wade, “Last month, between eight and 10 Ultramaxes [bulkers with capacity of 60,00065,000 DWT] of steel went from South Korea to the U.S. and a half a dozen went to the Med and the Continent. There’s a lot going on. And it’s long-haul. And I don’t want to jinx it, but it’s very, very exciting times.” Return of the Capes? Cape rates topped $26,000 per day in mid-January before retreating all the way back to $10,300 per day in mid-February. On Wednesday, current Capesize rates jumped 14.5% to $13,900 per day, closing the gap with smaller bulkers. “We’re in a little bit of a seasonal soft period,” said Wobensmith of the Capesize market. “We’re just coming out of the rainy season in Brazil. There’s [mining]

maintenance. Vale [NYSE: VALE] in particular is still ramping up on the logistics side. My personal view is that when we get to the end of March and early April, we should start to see that seasonal upturn.” Breakwave Advisors said in a new report, “Capesize rates have lagged and that is not surprising. Capesize fundamentals highly depend on iron ore that naturally exhibits the most seasonality of any other segment in dry bulk. “As we enter March and miners begin to look for April loadings — most of the global chartering for Capesizes happens one month in advance — a tighter Capesize market is about to emerge,” predicted Breakwave. “With Panamax and Supramax rates providing significant psychological support to the overall market, the odds of another leg up for Capesize rates are looking quite good.” MMT

Maritime Matrix Today | March 2021 | 31

South Korea & Saudi Arabia plan to build opportunities in hydrogen sector

audi Arabia and South Korean entered into an innovative multi-part agreement designed to build opportunities in the emerging hydrogen sector. The deal leverages Saudi Arabia’s LPG capabilities and develops shipping and manufacturing capabilities for hydrogen as well as CO2 capture. Saudi Arabia’s state-run oil company Aramco will work with divisions of South Korea’s Hyundai Heavy Industries to develop the new hydrogen projects. South Korea will benefit by gaining a source to produce the hydrogen while Saudi Arabia will use the CO2 produced in the process to increase production its oil fields. The deal accelerates the potential for hydrogen by using LPG which is easy to ship instead of waiting for future hydrogen shipping technologies. 32 | Maritime Matrix Today | March 2021

Hyundai OilBank will buy liquefied petroleum gas from Aramco, which will delivery it to South Korea on gas tankers built by Hyundai. In South Korea they will use the gas to produce blue hydrogen, so called because the CO2 released during the production is captured. Hyundai OilBank plans to supply the hydrogen for industrial applications in South Korea as well as to build a network of hydrogen filling stations for the use vehicles in South Korea. The CO2 captured in the hydrogen production will be shipped to Saudi Arabia. Unlike other projects which propose to capture and store the CO2, in this agreement Saudi Arabia will receive the byproduct of the manufacturing process. Aramco uses a process known as enhanced oil recovery where the carbon dioxide is injected into old

oil wells to release additional oil and enhance the production from those wells. To realize this concept, Hyundai’s shipbuilding division Korea Shipbuilding & Offshore Engineering Co. will be developing a new class of ships to transport the gasses. The plan is to build ships that can transport both the LPG to South Korea and return carrying the captured CO2. The carbon dioxide will be shipped as a refrigerated liquid under moderate pressure. No timeline was announced for when they expected to start the shipping and production of hydrogen. MMT

Swedish government launches eco-bonus incentive to shipping firms

Thomas Andersson, CEO, Ports of Stockholm

he Swedish government has awarded four shipping companies with an environmental bonus for innovative and sustainable projects. Three of the four projects selected to receive eco-bonus operate services to and from Ports of Stockholm: • AB Rederi Gotland won the bonus for changing from road cargo transport to sea transport between Nynäshamn and Rostock, Germany. • Wallenius Marine AB won the bonus for changing from road cargo transport to sea transport in the greater Stockholm region. • IW Line Rederi AB won the bonus for changing from road

cargo transport to sea transport between Norrköping and Kapellskär. “Many congratulations to our innovative, environmentally aware and forward-thinking customers and business partners. It is immensely pleasing to be able to be part of contributing to sustainable transport to and from the Stockholm region. Together with the shipping companies, forwarding companies and cargo owners, we now have even greater possibilities to move the transport of goods from land to sea, to the great benefit of the environment,” said Thomas Andersson, CEO Ports of Stockholm. The Swedish government is using the eco-bonus incentive to promote

new and improve existing sea transport possibilities to reduce the pressure on the Swedish road network and reduce emissions of air pollutants and greenhouse gases. Ports of Stockholm are pursuing other environmental incentives such as onshore power for cruise ships.As Offshore Energy – Green Marine reported recently, the port has been awarded funding from the Swedish Environmental Protection Agency and the EU. The project is a joint initiative the port authority is undertaking together with the Baltic Sea ports of Copenhagen/Malmö, Aarhus, and Helsinki. MMT Maritime Matrix Today | March 2021 | 33

World’s 1st remotely controlled tug to be developed

Egil Haugsdal President, Kongsberg Maritime

Ingrid Uppelschoten Snelderwaard Svitzer’s global COO

Christopher Wiernicki ABS Chairman, President and CEO

owage operator Svitzer A/S, maritime technology group Kongsberg Maritime, and classification society ABS have signed an agreement to jointly develop RECOTUG, the world’s first fully operational and fully remotely controlled tugboat. While Svitzer, part of Danish shipping major Maersk, is bringing the needed operational experience, a newly built tug with crew as well as tug-specific technical solutions, Kongsberg Maritime will provide the remote control systems and the autonomous technology and lead the integration of systems and technology. What is more, ABS will bring the guidance and expertise necessary to obtain regulatory approval. As explained, the aim of the project is to develop a remotely controlled tug that will be able to perform a full towage operation with all operations controlled from a remote operations centre.

34 | Maritime Matrix Today | March 2021

The solution and the achieved safety level shall lead to maritime authorities (class and flag) approving the technology, ultimately permitting Svitzer to conduct commercial remote tug operations in the Port of Copenhagen. The RECOTUG project is expected to run for the years to come. “At Kongsberg, we believe that digitalisation and enhanced automation are vital to ensuring a safe, sustainable and profitable future for the maritime industry, and the step forward represented by this project is of great importance in demonstrating the application,” Egil Haugsdal, President, Kongsberg Maritime, commented. The remotely controlled tug project is a continuation of the first Svitzer/Kongsberg

Maritime (formerly Rolls-Royce Marine) project announced in 2017 centred around remotely operated navigation of the Svitzer Hermod tug in the Port of Copenhagen. As a result of the project, the partners conducted a number of remotely controlled, nontowage specific manoeuvres on water. From the quay side in Copenhagen harbour, the vessel master, stationed at a remote operating centre, berthed the vessel alongside the quay, undocked, turned 360°, went for a sail and safely docked again. “While we are still several years away from seeing remotely operated tugs with no crew on board in commercial operation, there is no doubt that advanced autonomy is progressing fast across the maritime

industry,” Ingrid Uppelschoten Snelderwaard, Svitzer’s global COO, said. “As safety moves away from the things you can see and touch, to things you cannot see such as software and data, ABS has been spearheading development of next generation safety approaches that draw on our expertise as a technical integrator… Greater industry collaboration is going to be key to meeting the challenges of digitalization and maritime sustainability, so ABS is proud to be part of a team that has such a significant role to play in shaping the direction of both,” Christopher Wiernicki, ABS Chairman, President and CEO, pointed out. MMT

Maritime Matrix Today | March 2021 | 35

Asian Aframax freight rates surge to w90

framax freight rates on key ex-Asia routes have reached w90 for the first time in 2021 on the back of tight supply as several ships clean up to load refined products, many ballast to the Mediterranean and cracking margins improve for refining light crudes, market participants said March 4. The benchmark Persian-GulfEast route was assessed at w90 March 3, up 24% week on week, S&P Global Platts data showed. Rates on ex-Asia routes had hovered below w70 earlier in the year, dragging down the earnings of owners to negative, 36 | Maritime Matrix Today | March 2021

and further gains are potentially in the offing. If OPEC+ opts to increase crude output at its meeting later in the day, the Aframax freight market could receive a further boost, one broker said. When owners were losing money and losses were mounting, close to a dozen Aframaxes switched to the clean segment, reducing supply. Several companies including Maersk, Heidmar, Shell and Torm converted their doublecoated tankers to clean product haulage, market sources said. Maersk has cleaned up almost all its Aframaxes, with only a few remaining in the Singapore

region and less than a handful in the Persian Gulf, brokers said. Aframaxes in Asia have also gained spillover support from a strong Mediterranean market since mid-February after severe weather conditions across that region boosted owner sentiment. Aframax freight rates on the Mediterranean-UKC route surged from w67.5 on Feb. 15 to w127.5 on Feb 23 before easing to w107.5 on March 2, but remain significantly higher than in midFebruary, Platts data showed. Several owners with Aframaxes in the Middle East have ballasted them to the Mediterranean

to take advantage of the firm rates in that region, which has tightened supply in the Persian Gulf and Red Sea, a broker said.

being deployed in Southeast Asia, an Aframax broker said, attributing this to tighter supply and higher rates.

Charterers are finding it hard to find suitable ships for loading from the Persian Gulf and Bashayer and there has been a buildup of outstanding cargoes over the past few trading days amid the tight supply of Aframaxes.

Another broker said owners were now holding back supply in the first week of March.

“Paying up from Red Sea is very much possible,” a chartering source said. Hardly any Aframax ship is willing to ballast to the Middle East from East Asia because of the uptick in demand to load fuel oil and regional sweet crude demand in Vietnam, Malaysia and Indonesia and condensates in Australia, sources said. Several cross-harbor fixtures in North Asia absorbed the relatively older ships during the Lunar New Year and rest were

Demand for condensate loading in Australia has been very strong in recent days due to higher cracking margins for naphtha and gasoline, which has increased the appetite for ultralight crude, sources said. More than half a dozen charterers such as Hengyi, Trafigura, Shell, ExxonMobil, Total, Vitol and Mitsui are seeking tonnage to load Australian condensate, according to the list of cargoes compiled by brokers. Ample LR2s The switch of double-coated tankers to clean “will be negative for the LR2s,” another chartering source said. Ships that were earlier carrying dirty cargoes are

ready to offer discounts to get clean products, the source said. Originally clean tankers cannot give such low rates due to weak earnings, he added. Initially, these ships were picking up condensate cargoes but as their voyage history becomes cleaner, they are expected to increasingly pick up clean cargoes. “Already the LR2s have awful earnings due to too many ships,” a source with an LR2 owner said. Owners are still running into losses, with no daily earnings on several key LR2 routes and earnings of only a few hundred dollars a day on others. Few cargoes have been quoted for loading in the March 2031 window and there was a “massive” overhang of ships, he said. MMT

Maritime Matrix Today | March 2021 | 37

InfinityMAX concept S

wedish tanker shipping company Stena Bulk has unveiled a new concept hybrid bulk carrier design in an effort to push the shipping industry’s boundaries for zero-carbon, multimodal vessel design. The InfinityMAX concept, which is designed to carry both dry and wet cargoes in modular compartments, is built with several new core principles that, accumulatively, are said to represent a paradigm shift in cargo transportation. “We are extremely proud to unveil our InfinityMAX concept vessel design, which we believe pushes the boundaries for the future of our industry,” Erik Hånell, President & CEO, Stena Bulk, commented. “What we are proposing here is innovative, provocative and would radically reshape the way we think about bulk trade, rationalising two segments with complimentary expertise into one shipping segment that is ready for the challenges of the future.” As explained, the ultra-flexible, zero-emission design has been created in response to the huge challenges that the global shipping industry must overcome in the coming decades. The design envisions a world in which the shipping industry plays a crucial role in supplying the world with renewable energy, chemicals, materials, and consumables. In a proposed advancement, the creation of standardised and modular cargo units that can carry dry bulk, liquid bulk or liquified gas products – such as methane, hydrogen or ammonia – will significantly streamline the process of transporting wet and dry bulk cargoes. Specifically, each of the InfinityMAX’s modular cargo units are designed to be totally selfsufficient in terms of their energy use, with wind turbines and solar 38 | Maritime Matrix Today | March 2021

panels generating all the electricity needed for internal systems. Another interesting feature is that the modular units have been designed to be able to be dropped off outside of ports and picked up by tugs, avoiding congestion and reducing call times dramatically. The InfinityMAX concept will use hydrogen as a marine fuel and wind turbines to generate further energy. Collapsible wing sails and a shark skin hull have also been incorporated in the concept design to significantly improve efficiency. Although the vessels will be crewed for safety and flexibility reasons, Stena Bulk has designed the InfinityMAX concept to be semiautonomous and meet the future demand of efficient operations without compromising safety. InfinityMAX has also the potential to change the role of onboard crew, with less hard labour and more focus on monitoring and interaction with operators ashore. In effect, the InfinityMAX drives improved world fleet utilisation and the potential for more standardised supply chains, as well as reduces the unnecessary environmental impact of empty tanks being shipped around the world in search of new cargo, Stena further said. By 2050, the growing need for transportation of energy from areas

with abundant renewable supply to areas with large energy demand – carried as hydrogen, methanol, methane, and ammonia – will be a defining part of international trade. This, combined with the requirement to transport sustainable, edible oils and chemicals, and carbon dioxide from carbon capture facilities, as well as bulk commodities, requires a vessel design that is up to the challenge of a radically reformed global economy. With the right level of matured technologies, Stena Bulk believes that an InfinityMAX vessel could come into service between 2030 and 2035. To achieve this, a strengthened and sustained collaborative spirit between industry and technology leaders is a necessity in the coming years, according to Stena Bulk which controls a fleet of about 110 vessels. Last year, the company also decided to introduce a set of low-carbon shipping options for its clients. The options range from 20 per cent to 100 per cent biofuels and is based on an offsetting program where the biofuel is used within the Stena Bulk fleet. MMT

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