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MATRIX Mixed responses in cargo handling at Indian Ports

$1M Emergency Fund for India launched

Indian Navy deploys 9 warships transporting oxygen, medical equipment from abroad Egyptian court rejects appeal and upholds original order

Singapore fuel oil stocks surge to over 4-year high

TODAY

M AR ITI M E

US$ 3 • ` 150 Vol 10 • Edition 05 • May 2021

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Maritime Matrix Today | May 2021 | 03

Mixed responses in cargo handling at Indian Ports

ome of the largest private ports have gone the extra mile to facilitate the movement of medical equipment and supplies, while governmentowned 12 major ports have been running operations as best they can in the face of local lockdowns imposed by state governments. “Due to Covid-related disruptions, there was a significant fall in cargo handling at the 12 major ports (that handle 61% of the country’s total seaborne traffic) during the financial year ended 31 March 2021, compared to fiscal 201904 | Maritime Matrix Today | May 2021

20,” said Minister of State for Ports, Shipping and Waterways, Mansukh Mandaviya.

extent as far as the availability of containers was concerned,” Vaswani said.

Sunil Vaswani, Executive Director of the Container Shipping Lines’ Association (CSLA), said that in the second half of fiscal 2020-21, liners had pulled out all stops to relieve the overwhelming yard scenario, including allowing extra free days that he said eventually became counterproductive on cargo fluidity.

As port leaders and other stakeholders work toward pulling the supply chain out of the pandemic woes, Indian shippers remain increasingly concerned about rocketing freight rates that they argue have reasons other than just supply-demand imbalances.

“The shipping lines have therefore been doing all that they can to try and help the situation, which had improved to an

The picture has been different at private ports like Mundra, the flagship of India’s largest ports operator, the Adani Group, which owns 12 port properties dotted along both western and eastern

Indian coastlines. Mundra, during the course of fiscal 202021, overtook JNPT to become India’s largest container port, and barge into the list of the top 30 container ports in the world. “We have concentrated on two things at all our ports – safety of our staff, and continuity of our business,” said Capt. Sandeep Mehta, President of Business Development at the listed Adani Ports & Special Economic Zone (APSEZ). “For the safety of the staff at Mundra, we are following all the necessary Covid-related protocols, including social distancing, minimum number of staff at the operating requirements, ensuring that people work in shifts, providing sanitation, keeping key people in a special area. In fact, we had made some provision for people to stay on the premises so that their rotation can be done seamlessly.” APSEZ has also organised a vaccination drive for its port

staff, in coordination with the local government agencies. “For continuity of business, we have given priority berthing to the cargo that is coming in for mitigation of Covid-related problems,” said Mehta. “Oxygen is a prime requirement, and we have given priority to any ship bringing in cryogenic tanks, liquid oxygen in cylinders. The cargo is taken off and promptly transported to the required destinations with minimal loss of time. “We have life-saving imports coming in from Dammam and Jebel Ali. All our overseas offices are coordinating the procurement of liquid oxygen, and we are coordinating the logistics to ensure that it arrives safely and is transported to the required areas. We have waived off charges for the vessels bringing in life-saving cargoes.” There has been little or no adverse effect on the normal commercial movement of vessels and cargo at the Adani-

owned ports, Mehta said that vessels had been coming in and berthing as per their normal arrangements, and Mundra had also been handling vessels that came in outside their set windows. Contrary to the 4.59% drop in cargo throughput at the staterun 12 major ports for the financial year 2020-21, there has been growth in the container trade at most of the country’s private ports. “We have informed all container lines that all our ports are open for normal business, including the ones in the Bay of Bengal, like Ennore, Katupalli and Krishnapatnam,” said Mehta. “We have cleared additional areas for cargo at Krishnapatnam, and can handle any vessels that may have experienced delays at other ports.” MMT

Maritime Matrix Today | May 2021 | 05

$1M Emergency Fund for India launched

hile the plight of seafarers during the pandemic, the challenges of crew changes, and COVID-related quarantines have fallen from the daily headlines, seafarers continue to be the invisible victims of COVID-19. Responding to the hardships faced by crewmembers and their families with the escalating crisis in India, leading seafarer welfare charities and the shipping industry have launched an emergency relief fund. The target is to raise $1 million.

UK) supported by The Mission to Seafarers, ISWAN, Sailors’ Society, and others. Highlighting the escalation of COVID-19 cases in India to more than 400,000 per day, which has brought about new lockdowns and prompted major ports to prohibit ship crew changes for seafarers with recent travel history to India, Bangladesh, Nepal, Pakistan, and Sri Lanka, the charities united in an appeal to the shipping industry to deliver urgent support to seafarers and their families in India.

The Seafarers International Relief Fund was established by bringing together leading international seafarer welfare organizations, The Seafarers’ Charity (formerly Seafarers

Speaking on behalf of the newly established relief fund, Catherine Spencer, Chief Executive of The Seafarers’ Charity, said, “We are all shocked by the scenes from India, where an already

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critical situation is getting more desperate with every passing hour. India is facing a crisis on the frontline of its fight against the pandemic and this is directly affecting seafarers and their families who have already suffered tremendously over the past 15 months. By joining forces to form the Seafarers International Relief Fund, our aim is to send a clear message about the urgency of the crisis faced by seafarers globally; pooling our resources to ensure that support can be delivered as quickly as possible.” Major shipping organizations immediately pledging their support to the fund. Among the growing list of companies are Anglo-Eastern, Ardmore

Shipping, A.P. Møller – Mærsk, Cargill, Hafnia, IRI (Marshall Islands Flag), MSC, Pacific Basin, and V.Group. Mark Cameron, COO of Ardmore Shipping, speaking on behalf of the organizations who are supporting the fund said, “As we have seen the situation in India deteriorate rapidly over the past few days, it is clear that this unprecedented crisis required an unprecedented response from all of us. Many of those at sea are desperately worried about their families, as the situation in India continues to get worse. With limited contact with home, they are caught between ongoing travel restrictions and the crew change crisis, and the understandable desire to continue working to support their families.” Global shipping organizations also immediately joined in on the calls for support adding their voices to the appeal for

donations to the fund. It often takes a crisis to bring people together,” said Esben Poulsson, Chair of the International Chamber of Shipping. “The fact that seafarer charities have come together signifies the scale of the challenge before us in the shortterm and looking further ahead. I am calling on shipowners and all those engaged in the maritime sector to support this initiative and consider increasing your contribution to seafarer charities at this time. When faced with significant challenges that maritime community always come together – this is what we do.” The Fund will be used to deliver aid through existing welfare programs run by the welfare partners in India, to make sure that support reaches seafarers and their families as quickly as possible, as well as ensuring that support can remain in place over the challenging weeks and months ahead.

Although the immediate focus of the campaign is on India, other countries also remain highly vulnerable to the pandemic. The goal of the SIRF is to stand ready to support seafarers and their families afflicted by the pandemic in other countries, should the need arise. This program is also in addition to the Seafarers Emergency Fund (SEF) administered by ISWAN available to provide immediate, essential aid to seafarers and families of seafarers, who are directly involved in sudden or unforeseen crises. To donate to the Seafarers International Relief Fund, please visit https://theseafarerscharity. enthuse.com/cf/seafarersinternational-relief-fund. MMT

Maritime Matrix Today | May 2021 | 07

Energizer, first crew transfer vessel added to fleet

apanese shipping company NYK and Sweden’s Northern Offshore Service AS (N-O-S) have concluded a bareboat charter contract for a crew transfer vessel (CTV) to service offshore wind farms. The CTV, named Energizer, is owned by NYK and will be chartered to N-O-S through a 10-year bareboat charter contract to transfer crews to offshore wind farms, mainly in Europe, under the operation of N-O-S. NYK has additionally agreed to dispatch its engineers to N-O-S to participate in operations and ship management in Europe, in

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preparation for the development of the CTV business in Japan. NOG, the parent company of N-O-S, operates over 60 CTVs in the offshore wind power market in Europe, and NYK and NOG signed an MoU in December 2019 to explore a CTV business related to offshore wind power generation. This bareboat charter contract is a partial development of that MoU and will be the first CTV owned by NYK, which will continue its efforts to contribute to the spread of offshore wind power generation through the CTV business in cooperation with NOG.

The 39-metre Energizer is equipped with a large-capacity battery that can be recharged from a power generation facility and can be switched to hybrid mode to reduce fuel consumption and emissions. The CTV, originally ordered by N-O-S, is set to be delivered in Spring 2021 after which she will be deployed on Ørsted’s 1.4 GW Hornsea Two wind farm off the UK. The NYK Group operates more than 700 vessels, both internationally and locally. MMT

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Maritime Matrix Today | May 2021 | 09

Better Understanding of Carriage Contracts

here are many ways goods can be shipped by sea. Many exporters who sell abroad regularly will ship their goods in containers. If their volumes are sufficient to fill a container then the container will contain only their goods, this is a Full Container Load (FCL) shipment. If the goods are insufficient or consists of only a small quantity then the goods are consolidated with other parties / shippers goods and shipped in a Less Container Load (LCL) form. Whilst the container themselves are carried by shipping lines with fixed schedules and voyages, often the shipments are arranged by freight forwarder. The contracts of carriage are often bills of lading or seawaybills. The forwarders who issue bills of lading issue House Bills of Lading. When they book with the shipping lines, the shipping lines will issue Master Bills of Lading.

Bills of Lading

Document of title

A bill of lading is a document signed by the shipowner, or by the master or other agent of the shipowner, which states that certain specified goods have been shipped in a particular ship, and which purports to set out the terms on which the goods have been delivered to and received by the ship. After signature, it is handed to the shipper, who may either retain it or transfer it to a third person. This person may be named in the bill of lading as the person to whom delivery of the goods is to be made on arrival at their destination, in which case he is known as the consignee; if he is not named in the bill of lading, he is usually known as the holder or indorsee of the bill of lading.

The bill of lading is a symbol of the goods specified in it. Its possession is equivalent to the possession of the goods themselves, and its transfer, being a symbolical delivery of the goods, has by commercial usage the same effect as an actual delivery in the same circumstances.

The three functions of the bill of lading are: • As a document of title; • Receipt of the goods; • Evidence of contract of shipment

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As regards the shipowner, the bill of lading is a document of title, entitling its holder on production to delivery of the goods. Accordingly, a delivery to the holder of the bill of lading, discharges the shipowner, provided that it is made in good faith without notice of any defect in the holder’s title. The shipowner is no, however, discharged, however bona fide his act may be, by delivery to the wrong person without the production of the bill of lading. By mercantile custom, a bill of lading has become a symbol of

the right of property in the goods. Its possession is equivalent to possession of the goods themselves, and its transfer has the same effect as an actual delivery. Presentation of bill of lading Arising from this function, it has been held that a carrier and his agent who delivers cargo without presentation of the original bill of lading is liable for the value of the goods to the actual goods owner, even if delivery is made to the named consignee. Carriers who release goods without the surrender of the original bill of lading will often obtain an indemnity from the person demanding release to protect against claims from the actual goods owner. In Sze Hai Tong Bank v Rambler Cycle Co the Privy Council stated the well-known principle: “It is perfectly clear law that a shipowner who delivers without production of the bill of lading does so at his peril. The contract is to deliver, on production of the bill of lading, to the person entitled under the bill of lading. The shipping company did not deliver the goods to any such person. They are therefore liable for breach of contract unless there is some term in the bill of lading protecting them. And they delivered the goods, without production of the bill of lading, to a person who was not entitled to receive them. They are, therefore, liable in conversion unless likewise so protected.” The original bills of lading are often issued in set of three. Once any one of the original bills of lading is presented by the holder in exchange for the goods, the remaining bills of lading - which can no longer be used to claim the goods - are ‘stale.’ Bill of lading as a receipt; statements about the goods A bill of lading is an acknowledgment of the receipt of the goods specified in it. This may be qualified by the wordings of the bill of lading. Some of the usual qualifying terms

found in the front of the bill of lading include – Shipped in apparent good order and condition, weight, quantity unknown Or Shippers load and count The bill of lading and the terms of the contract of carriage The terms of the contract on which the goods are carried are prima facie to be ascertained from the bill of lading. As between the shipowner and an indorsee, the bill of lading constitutes the contract, and it may also constitute the contract as between the shipowner and the shipper. Although the contract of carriage will generally be made before the goods are sent to the ship, the contract may afterwards be reduced into writing and expressed in the bill of lading. Apart from bills of lading goods can also be shipped by other contracts, e.g. contracts of affreightment or charterparties. International carriage of goods by sea and contracts of carriage are governed to a large extent by international conventions. To a large extent, carriage of goods by sea is governed by the International Conventions relating to Carriage of Goods by Sea and similar laws enacted in the Countries of shipment. The legislation governing carriage of goods at sea sometimes depends on the types of contracts that are used in the carriage. Where the seller of the goods sells in large quantities, it may charter the whole or part of the ship. The charter of a ship is the hire of the ship for the use of the charterer. The three main types of charters are: • Bareboat / Demise Charter • Time Charter • Voyage Charter

Bareboat / Demise Charter Under a bareboat / demise charter the vessel is chartered in ‘bare’ form for the use of the charterer for a period of time. The charterer is obliged to supply whatever is needed for the operations of the vessel including the crew. It has been explained in the Singapore High Court decision of Pan United Shipping Pte Ltd v. Cendrawasih Shipping Pte Ltd [87] MD 11,[2004] SGHC 32 that whether a ship has been demised depends upon whether or not the shipowner has ‘parted with the whole possession and control of the ship, and to this extent, that he has given to the charterer a power and right independent of him and without reference to him to do what he pleases with regard to the captain, the crew, and the management and employment of the ship.’ A common industry form of charter is the BARECON form of charter. Time Charter The time charter deploys the vessel for the exclusive use of the charterer for a fixed period of time. The master is obliged to sail the vessel under the instructions of the charterer (within the confines of the agreed geographical parameters). The charterer is obliged to indemnify the master and owner for the consequences of obeying the instructions of the charterer. Under a time charterparty the remuneration payable to the shipowner is called ‘hire’. The time charter is most suitable for cases where the use of the vessel is definite for the contemplated period. Eg. Petronas charter of MISC vessels. The common forms used include BALTIME , SHELLTIME. Voyage Charter Under a voyage charter, the vessel is chartered for specified voyages. The voyages can run consecutively for back to back deployment of the vessel. The voyage charter is the most common form of charter. Maritime Matrix Today | May 2021 | 11

Some common forms of charter include ASBATANKVOY, EXXON MOBIL Voy, SHELLVOY. The vessel owner is keen for the voyages to be completed as soon as possible to free the vessel for further deployment / additional charter. As such the voyage charter will often have fixed laytime and demurrage provisions to provide a financial incentive to the charterer to complete loading and discharging as soon as possible. Demurrage disputes are the most common form of disputes in voyage charters. Further the vessel owner will often shift the risks of delay under the charter provisions to the charterer. Under a voyage charterparty the remuneration payable by the voyage charterer (similarly by the shipper or consignee under a bill of lading) for the carriage of goods by sea is called ‘freight’. Chartering process Parties can negotiate directly especially if previously dealt with each other. Often the vessels are sourced by shipbrokers and the shipbrokers act as intermediary the negotiations and finalisation of the charterparty terms. Often the charter terms refer to the standard or industry forms. Even if the forms are commonly used, it is important to do the following: 1. Understand the terms. 2. Realize the fixture or recap concludes the contract – the signed detailed charterparty is the formality. 3. Sailing of or deployment of the vessel is already the performance of the charter. 4. Standard forms are adapted to transaction by use of rider clauses. 5. As a general rule: rider clauses will override the standard form wordings where inconsistent. 6. Certain terms will be implied into the charter where necessary to give business efficacy to the 12 | Maritime Matrix Today | May 2021

contract as what the parties must have intended or to impose implied obligations of the vessel owner eg. that the vessel must be seaworthy. Apart from the contractual relationship and the express and implied contractual duties, there are also obligations and responsibilities imposed by law eg. Duties under bailment, lien, maritime law eg general average, salvage. Bailment A bailment, traditionally defined, is a delivery of personal chattels on trust, usually on a contract, express or implied, that the trust shall be duly executed, and the chattels redelivered in either their original or an altered form, as soon as the time or use for, or condition on, which they were bailed shall have elapsed or been performed. Under modern law, a bailment arises whenever one person (the bailee) is voluntarily in possession of goods belonging to another person (the bailor). The legal relationship of bailor and bailee can exist independently of any contract, and is created by the voluntary taking into custody of goods which are the property of another, as in cases of subbailment or of bailment by finding. The element common to all types of bailment is the imposition of an obligation, because the taking of possession in the circumstances involves an assumption of responsibility for the safe keeping of the goods. An action against a bailee can be regarded as an action on its own, sui generis, arising out of the possession had by the bailee of the goods. Carriers are bailees of the goods carried. In the Privy Council case of The KH Enterprise v Pioneer Container [5], the Privy Council held that on receipt of the goods on board the vessel the carrier becomes bailee of them, owing a duty of care to the owners of the goods.

The bailment is founded on the consent of bailor and bailee, and the bailee’s voluntary taking into possession the property of another which creates the bailment relationship. The Court was of the opinion that a sub-bailee voluntarily takes possession of the goods of another if he has sufficient notice that a person other than the bailee is interested in the goods and therefore the sub-bailee assumes responsibility as a bailee to that other person. When loss or damage to cargo occurs in the context of carriage of goods by sea, the cargo owner has may have three choices as to the legal basis for a claim. He can either start a claim based on his contract of carriage with the carrier, he can claim in tort or he can claim in bailment. In the inaugural decision of the Malaysian Admiralty Court in the case of The Istana VI[8], the FOB buyers of cargo who were also the charterers of the Vessel requested the Carrier to release the cargo without presentation of the Original Bill. The Court granted the plaintiff’s claim under full trial on all the grounds claimed in contract, bailment and the tort of conversion. Duties of bailee Once a person has taken charge of goods as a bailee for reward, it is his duty to take reasonable care to keep them safe: and he cannot escape that duty by delegating it to his servant. If the goods are lost or damaged, whilst they are in his possession, he is liable unless he can show—and the burden is on him to show—that the loss or damage occurred without any neglect or default or misconduct of himself or of any of the servants to whom he delegated his duty. MMT

Fujairah stands to lose out

he UAE’s Port of Fujairah stands to lose out on crude oil and refined product exports and bunker sales if the spiralling COVID-19 crisis in India translates into slowing economic growth for Asia’s third-largest economy. India’s second COVID-19 wave could knock off as much as 2.8 percentage points from GDP growth in the fiscal year ended March 31, 2022, S&P Global Ratings said in a May 5 report. It said it was reconsidering its 11% GDP growth forecast, against a contraction of 8% in 2020. “Much will depend on social distancing, whether enforced or voluntary, the pace of vaccinations, and the degree to which previous infections provide immunity,” it said. “The government is responding to the latest outbreak with a series of localized lockdowns, while avoiding a nationwide lockdown, which would have more adverse economic implications.”

Fujairah is the world’s third-largest bunkering hub, with sales falling month on month since February, according to port data. India’s crude and product imports from the UAE east coast port have already slowed this year, averaging 77,200 b/d compared with 116,000 b/d for all of 2020, according to commodity data company Kpler. Analysts said India’s crude demand probably started to slow in April, continuing that trend into May as the country battles a record outbreak of COVID-19 that has led to lockdowns in many cities. “A lot will depend on what happens in the next few months, but it’s true India is an important trader with Fujairah,” said Zhuwei Wang, Middle East analyst with S&P Global Platts Analytics. “Crude demand is already affected because of a drop in oil product consumption and may slip further if the government imposes a national lockdown and that will hurt Fujairah.”

India was the fourth-largest customer of oil products and crude oil from Fujairah last year, after Japan, China and South Korea, according to Kpler. India predominately takes crude from Fujairah, with minor shipments of gasoline, fuel oils and naphtha. “The slowing COVID-hit Indian economy will surely affect shipping volumes in the region and therefore bunker demand in Fujairah,” said Apurva Mali, founder of bunker supplier Masc Co. DMCC in Dubai. Fujairah has banned crew changes at the port for vessels coming from India in the past 14 days, following a similar move by Singapore. Deck officers and marine engineers on vessels calling at Fujairah are mainly from India, while the rest of the crews come from the Philippines, Mali said. “The crew change ban will not affect bunker demand,” he said. “It will just mean the crew extend their contract by a few weeks more.” MMT Maritime Matrix Today | May 2021 | 13

Fleet-based efficiency approach is a shorter way for green transition

he path to lower CO2 emissions from ships could be shorter by choosing a fleet-based

approach to efficiency requirements, a new analysis prepared for Danish Shipping by CE Delft shows.

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If new low- and zero-emission ships are to enter into operation and more expensive climateneutral fuels are to gain acceptance by the end of this decade, CO2 regulation should be possible on the basis of a shipping company’s fleet and not of an individual ship. Specifically, instead of requiring that all ships of a company meet the required carbon intensity indicator (CII) individually, companies could opt to comply by demonstrating that their fleet (or a number of their ships) does not emit more than it would if all ships would meet the required CII. This means that the money which would otherwise have been spent on improving the CII of all non-compliant ships can be used to let ships sail on lowand zero-carbon fuels in such a way that the total emissions would not exceed the emissions of a compliant fleet, according to the study. The analysis shows that if the oldest ships are allowed to continue unaltered rather than be retrofitted, that would release funds to build completely new ships with very low or no CO2 emissions. At the same time, the approach ensures that total CO2 emissions would not be greater if the older ships are also required to be retrofitted. “We are clearly proponents of looking at a fleet in its totality when measuring the CO2 emissions of a shipping

company. Instead of spreading efforts too thinly on all ships, you should instead focus on the newest and greenest ships, and this has been confirmed with the new study,” Maria Skipper Schwenn, Executive Director for Security, Environment and Maritime Research at Danish Shipping, commented. The report found that fleetlevel compliance can contribute to the business case of using low- and zero-carbon fuels. In the best cases, over 70% of the additional costs of using low and zero-carbon fuels can be covered by not investing in the improvements of other ships in the fleet. The total emissions of the fleet will then be the same as when all ships would have had a C label. Fleets of 2 to 3 ships or more can help the business case for ships sailing exclusively on low and zero-carbon fuels. Taking into account that in some cases fuels can be blended with conventional fuels, fleet-level compliance could be an option for many shipping companies. Danish Shipping will use the analysis in the work of the UN’s maritime organisation, the International Maritime Organization (IMO). Negotiations are currently underway into how ships should meet efficiency requirements.

“The analysis states that green fuels will not be in use in this decade unless an incentive is created. That incentive can be created by the IMO adopting a fleet-wide approach – without compromising the level of ambition,” Skipper Schwenn added. The Danish Maritime Authority has submitted the analysis to the IMO – not as an actual proposal but as a set of ideas that can be included in the discussions as background information. “The analysis is part of influencing the IMO member states and making them see that a fleet-based approach is the most logical, sensible and ambitious way of pushing for the green transition for ships. The fleet-based approach can be organised in such a way that you are at least as likely to achieve the set reduction targets. We therefore believe that CO2 regulation should be possible at fleet level if the shipping company or ship operator so wishes,” Skipper Schwenn concluded. MMT

“It is extremely important that the world fleet becomes more efficient, but if we are to achieve our goal of being carbon neutral by 2050, the new fuels must also be part of the picture.” Maritime Matrix Today | May 2021 | 15

INSA developing a sense of research & innovation via Technical Paper Competition

ith an objective of developing a sense of enquiry and the concept of research and innovation among the students currently engaged in various academic programs in maritime sector, Indian National Shipowner’s Association (INSA) embarked on an initiative of holding a Technical Paper Competition every year. The initiative was spearheaded by the Research & Training Committee of INSA. The theme of the competition was Technological Advancements in Maritime sector: Benefits, Challenges & Way Forward. The sub-themes were Autonomous Ships – Pros & Cons; Emergence of Artificial Intelligence & Machine Learning in Maritime Industry; Block Chain Technology & Its Application in Shipping/ Logistics Industry; Application of Nano Technology in Shipping; Alternative Fuel – Anticipated Issues & Proposed Solutions; Compliance towards Sulphur Cap 0.5% - Prevailing 16 | Maritime Matrix Today | May 2021

Issues & Countermeasures; Regulatory changes and the impact on Maritime Industry; Application of technological advancements in Navigation/ Management in Maritime Industry. In spite of the challenges posed by COVID-19, enthusiastic response was received from the participants. Total 17 high quality technical papers were received in the preliminary round from the students from various Maritime Training Institutes. A Selection Committee of eminent professionals, namely Mr David Birwadkar, Mr Dilip Mehtotra and Mr Chitta Dash evaluated the papers. It was indeed a challenge to shortlist six papers out of 17 presented to the Committee. Considering the prevalent situation, the presentations were made online on 20 February. The final selection was made based on the presentations by the authors in front of the Selection Committee, panel of eminent individuals from the industry, faculty members

and the students. The event was inaugurated by Mr Amitabh Kumar, IRS, Director General of Shipping. The event was also graced by Dr Sujata Naik, Chairperson of INSA. Mr Amitabh Kumar and Dr Sujata Naik in their motivational speech inspired the students to participate in such events and promote the culture of learning in maritime Industry. The event was also attended by a large number from the Industry which marked the success of the campaign. The winners were given citations and cash prizes: first paper – Rs 25,000/-; second paper – Rs 18,000/-; and third paper – Rs 15,000/- respectively. The other three presenting teams were awarded Consolation Prize of Rs.7,000/- each. The Research & Training Committee, chaired by Dr BK Saxena is now planning for the second such competition. MMT

Egyptian court rejects appeal and upholds original order

court in Egypt has rejected the appeal made by Shoei Kisen Kaisha, the owner of Ever Given, for the release of the containership and return to its country of origin. The Suez Canal Authority (SCA) is persistent in its request for $916 million to be paid for the costs caused by the boxship’s blockage of the canal. “The Ismailia court of first instance in Egypt has heard the appeal made by the owners of the Ever Given against the arrest of the ship and her cargo,” liability insurance provider UK P&I Club said.

“The appeal was rejected and the Ismalia Court upheld their original order that the vessel and her cargo can only be released from arrest upon the owners’ payment of the SCA’s full claim of US$916 million, instead of releasing the vessel based on security for the claim being provided.” The abovementioned Japanese shipping company has until 20 May 2021 to appeal. To remind, on 22 April 2021, the shipowner filed the appeal against the detention of Ever Given and its cargo following the ship’s arrest earlier that month.

“The Ever Given’s interests will continue to negotiate in good faith with the SCA to reach an amicable resolution, which remains the UK Club’s priority, along with enabling the vessel and her cargo and crew to continue its intended voyage,” the insurer added. The 20,124 TEU vessel ran aground on 23 March, blocking the waterway for hundreds of ships for six days. On 29 March, the ship was finally refloated and towed to the Great Bitter Lake region and the SCA was able to resume commercial operations shortly after. MMT Maritime Matrix Today | May 2021 | 17

China pulls bunker demand

ower bunker fuel prices in China following tax changes last year that have underpinned a ramp-up in production are drawing demand away from the key regional bunkering hub of Singapore and other ports across the region, according to market sources. “Prices are so low [in China] there is no reason not to go to China now,” a Singapore-based bunker trader said. “A key factor that has depressed overall demand in Singapore is the marine fuel 0.5%S spread

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between the port of Singapore and Zhoushan. Shipowners have been maximizing stems while queuing at anchorage for cargo operations around Zhoushan, said a Singapore-based trader. Singapore typically has the most competitive prices in the region but Zhoushan marine fuel 0.5%S delivered bunker prices dropped below those in Singapore on April 12 and have remained at a discount since then. Zhoushan delivered bunker was assessed at $495/mt, $8.75/mt lower than Singapore on April 29.

The price differential between Zhoushan and Singapore averaged minus $5.18/mt over April 1-29, down from plus $5.43/mt in March, and is set to surpass the previous lowest monthly average since Platts started assessing Zhoushan bunker fuel in July 2019, which was in February this year when the differential averaged minus $4.62/mt. The trader added that this has capped bunker demand around Singapore for the whole of April. The best-case scenario is that

bunker sales in April might be on par with March volumes, but a slight reduction is more likely, the trader said. “Demand is very low, but Korean shipping companies are still taking bunker fuel at Korean ports as they have cargo works,” said a bunker fuel trader at South Korean company. Chinese refineries have significantly expanded fuel oil production ever since Beijing allowed a value-added tax rebate on domestically produced low sulfur fuel oil barrels supplied to the country’s bonded zones from February last year. China’s output of low sulfur bonded bunker fuel surged 131% year on year to 2.69 million mt in the first quarter, data from local information provider Longzhong showed.

In the delivered bunker markets of Zhoushan and Shanghai, Chimbusco and Sinopec Zhoushan are competing with each other fiercely to expand market share, fuel oil suppliers in Zhoushan said.

“Usually the end point and start point for most vessels, especially containers in Asia, is China, so it will make sense for them to take most bunkers in China now, since they don’t even have to deviate,” the trader added.

“We’ve seen demand increase a lot, volumes have risen for a single order,” a Zhoushan based supplier said.

Bunker demand in Singapore is one of the targets which Zhoushan and Shanghai can divert bunker demand from, while demand in South Korea could go to North China such as Qingdao and Dalian.

Pulling Demand China is actively expanding its bunker sales in 2021, market sources said. Zhoushan bunker sales came in at 4.72 million mt in 2020, and the port aims to expand the sales to higher than 6 million mt in 2021, according to the Zhoushan City Council. The Port of Zhoushan targets 10 million mt of bunker sales by 2025.

The cost of locally produced bunker fuel oil is lower than imported cargoes, market sources said.

“Taking bunker demand from ships on bunker-only calls is the only way to increase sales,” said the source at a trading house.

“Chinese refiners equipped desulfurization units, and they don’t need extra investment to produce low sulfur bunker fuel. That is why Chinese refiners can offer bunker fuel at competitive prices,” said a source at a trading house.

China’s advantage in bunkering is that a lot of ships go to China for cargo loading/discharging. Some of those ships have previously taken bunker fuel outside of China because prices are lower, market sources said.

Hong Kong has already seen a diversion of demand arising from bunker-only calls to Zhoushan and other neighboring ports after the government set a new regulation mid last year which mandates a 14-day quarantine for ship crews for vessels calling at its port without cargo works. Hong Kong has also implemented a ban on crew changes coming from or transiting through India, so the next best alternative for vessels is to conduct a crew change at Chinese ports. “This ban drove a further diversion of demand from Hong Kong to the Chinese ports, given the geographical proximity,” said a China-based shipbroker. MMT

Maritime Matrix Today | May 2021 | 19

Gate Rudder design to be tested

group of researchers is proceeding with trials for a revolutionary rudder design known as a gate rudder. In the next round of testing, the researchers are preparing to retro-fit the propeller to a coastal cargo ship seeking to confirm data that suggests the design is more efficient in propulsion and steering resulting in lower fuel consumption and improved environmental performance. Known as the gate ruder, the initial design was developed and patented in Japan and tested on a 2,400 gross ton container ship in November 2017. Wartsila at the beginning of 2020 licensed the technology for development and global marketing while a group of researchers and 17 partners working in Glasgow,

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Scotland at the University of Strathclyde received a €6 million ($7.2 million) EU grant under the Horizon 2020 Research and Innovation Framework Program to retrofit the rudder system to a commercial ship further demonstrating the fuel savings and improved maneuverability produced for vessels. Unlike a traditional rudder which sits behind a ship’s propellers to steer the vessel, the gate rudder is “U” shaped and sits astride the propeller. The design produces a “duct effect” acting as a nozzle to generate additional thrust. The two arms of the rudder can be independently controlled to provide better steering while underway as well as helping vessels to move sideways for example when docking.

“As a propulsor-based solution, the gate rudder offers a significant amount of powersaving that cannot be achieved by any other single energysaving device which is currently available in the market,” says Professor Mehmet Atlar, who is the project coordinator from the Department of Naval Architecture and Marine Engineering (NAOME) at Strathclyde. “An important advantage of the gate rudder system is highlyeffective maneuverability within coastal and port areas as well as navigating more efficiently in waves during oceangoing operations.” The research team, which includes the patent holder, Dr. Noriyuki Sasaki who is a Visiting Professor in NAOME at

Strathclyde, believes that the gate rudder system is simple, generic, and flexible. They report that it can be installed on new-built ships or retrofitted to existing ships, as well as integrated easily with other fuelsaving and emission reduction technologies. “GATERS demonstrates significantly reduced emissions from ships particularly within coastal and port areas, challenging and even exceeding the current and future legislative requirements of the International Marine Organisation and local regulations for emissions,” says Professor Atlar.

well as favorable performance in maneuverability and quieter operations with a reduced wake.

The first full-scale sea trials were conducted in Japan by Kamome Propeller with support from The Nippon Foundation. The tests were run with a 360foot container ship fitted with the gate rudder, while a sister ship operated alongside with a conventional rudder. These tests confirmed the superior performance producing a significant energy saving as

Research data shows the potential for a fuel-saving of 15 percent in calm waters, while it could be as high as 30 percent in rough seas. The gate rudder is also quieter than a traditional rudder system, reduces hull wake, and can help to protect the propeller from damage which would be particularly beneficial in sensitive environments such as the Arctic.

The GATERS project at the University of Strathclyde seeks to advance the concept. The researchers will use data gathered from the sea trials to demonstrate whether the system can be applied to an existing 295-foot coastal cargo ship as a retrofit. They are also exploring applications for other oceangoing vessel types and sizes. MMT

Maritime Matrix Today | May 2021 | 21

Indian Navy deploys 9 warships transporting oxygen, medical equipment from abroad

he Indian Navy has stepped up its COVID relief Operation Samudra Setu II with ships from all three Naval Commands in Mumbai, Visakhapatnam and Kochi, deployed for shipment of Liquid Medical Oxygen and associated medical equipment from friendly foreign countries in Persian Gulf and South East Asia. On the Western seaboard, Indian Naval Ship Talwar entered the port of New Mangalore in Karnataka on 5th May, ferrying two 27 tons liquid oxygen tanks from Bahrain. INS Kolkata, deployed in Persian Gulf, also departed Kuwait on 5th May after embarking two 27 ton oxygen tanks, 400 Oxygen cylinders and 47 concentrators. In addition, four warships are also enroute to Qatar and Kuwait, to embark around nine 27ton Oxygen tanks and more than 1500 oxygen cylinders from these countries. On the Eastern Seaboard, Indian Naval Ship Airavat, departed Singapore today with more than 3600 oxygen

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cylinders, eight 27 ton (216 tons) oxygen tanks, 10000 Rapid Antigen Detection Test Kits & 7 concentrators while INS Jalashwa remains deployed in the region, standing by to embark medical stores at short notice. INS Shardul, the Landing Ship Tank of the Southern Naval Command at Kochi, is also on its way to Persian Gulf to bring three liquid Oxygen filled cryogenic containers. It may be recalled that INS Jalashwa and INS Shardul, had also participated in Operation Samudra Setu last year to repatriate stranded Indian citizens from abroad. The deployment of nine warships as part of ‘Operation Samudra Setu II’ forms a part of the multiple lines of effort, by the GoI and the Indian Navy to supplement the oxygen requirement in the country. MMT

Maritime Matrix Today | May 2021 | 23

EU Ship Recycling Rules

n May 5, MEP Jens Gieseke (Transport committee/EPP) and MEP Søren Gade (Chair of EP India Delegation/Renew) cohosted an event organised by ECSA with industry representatives and NGOs on the EU Ship Recycling regulatory framework. In his opening speech, Martin Dorsman, Secretary General of ECSA, pointed out that ECSA has launched an open and constructive dialogue with all the stakeholders highlighting the contribution of the EU Ship Recycling Regulation to the significant progress made in India over the last years. The panel discussion was moderated by Martin Kröger, Managing Director of Verband Deutscher Reeder, Chair of ECSA Safety and Environment Committee. The panel featured: • N Ashok Kumar, Adviser Industry and Engineering, Embassy of India to the EU • Ingvild Jenssen, Executive Director, NGO Shipbreaking Platform

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• Simon Bergulf, Director for Regulatory Affairs of Maersk A.P. Moller “All stakeholders need to work together to extend the EU list in an uncomplicated manner. To be on it is a win-win situation for everyone: the industry, the recyclers, the workers and the environment. It is in our common interest that yards, that fulfil all necessary requirements, are on the EU list and therefore eligible to recycle European vessels.” said Jens Gieseke, Member of Transport Committee of the European Parliament with EPP. Søren Gade, Chair of the European Parliament’s Delegation on relations with India and a member of the Transport Committee with Renew Europe added that “the EU should recognise the tremendous progress made in some ship recycling facilities in India in terms of environmental protection and working conditions. The EU should support the global recycling market and higher environmental standards internationally instead of undermining open trade. A future expansion of the EU list of approved

facilities is needed and a bilateral agreement between the EU and India has become a prerequisite for it. EU Member States and the Commission should act promptly so that the negotiations between the EU and India begin as soon as possible.” Martin Dorsman, Secretary General of ECSA, pointed out that “access of EU shipowners to recycling facilities outside the EU or OECD should not be limited by any EU measures. It’s an illusion to think all EU controlled or EU flagged vessels can be recycled in Europe. There is an urgent need for the swift ratification of the Hong Kong Convention”. ECSA looks forward to a continued fruitful cooperation with EU institutions and envisages organising a follow-up event to take stock of the progress of the file and to discuss the shipping industry’s input. MMT

No short term fix in sight

t has been 15 months since the pandemic initially shut down China and since then the container shipping industry has been constantly impacted by a barrage of disruptions.

The initial wave of blank sailings prolonging the Chinese New Year capacity reductions. Then the rapid downturn in early spring as the pandemic spread globally. Then the demand surge initially on the Transpacific which led to equipment shortages and surging rate levels. We saw port congestion emerge further removing both vessels and equipment from the global balance. Vessels were temporarily removed from service as crew was tested positive for Covid. Thousands of boxes were lost overboard on multiple occasions in the Pacific. The Suez Canal got blocked for almost a week. And whilst it is never pleasant to be the bearer of bad news, it is always

more productive to have a realistic assessment of the situation when making business decisions.

minor disruptive events which have impact at a trade lane level, but not necessarily at a global level.

First of all, will the stream of disruptive events never end? The latest event in the flow of bad news was the emergence of a strike in the port of Montreal rapidly creating a line of vessels waiting at anchor. This port alone handles 5000 TEU per day and hence the disruption quickly escalates.

What will have changed, however, is that the market is entering a structural upcycle. The period 2021-2024 is likely to see 18% demand growth whereas capacity growth is more likely to be around 10% when vessel scrapping is taken into account. This means there is less overcapacity in the market, which is positive from an efficiency perspective. But it also means there is less buffer in the system to handle these normal disruptions. In turn this means that we should expect disruptions to have a stronger short-term impact on not only supply/demand but also on spot rate developments in individual trades going forward, which in turn means that shippers would be well advised to re-think their supply chain risk profiles.

But let us give pause here for a second. Such an event is actually a quite normal state of affairs in container shipping. Before the emergence of the pandemic there was also a constant stream of such minor disruptive events. Port strikes. Political turmoil closing a port here or there. Vessels breaking down. Containers falling overboard. Vessel collisions and fires. Not that any of these events are positive, but they are a normal state of affairs. Before the pandemic they came and went without much global impact.

MMT

Hence in the yearning for “returning to normality” we should remember that the normality includes all these Maritime Matrix Today | May 2021 | 25

Tool for Global Brands to Protect Seafarer Human Rights Launched

collation of United Nations organizations joining with international labor leaders and members of the shipping community launched a new due diligence tool for global brands to use to ensure that they are protecting the human rights of seafarers across their supply chains. The Human Rights Due Diligence Tool for cargo owners and charterers seeks to expand on industry-led initiatives such as the Neptune Declaration, which attached over 800 global companies committing to direct businesses and specific cargo shipments to carriers that are proactively taking steps to protect their seafarers.

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The wide-ranging human rights checklist was issued to businesses engaged with the maritime industry as part of a joint initiative by the UN Global Compact, the UN Human Rights Office, the International Labour Organization (ILO), and the International Maritime Organization (IMO). The tool is also supported by the Sustainable Shipping Initiative, the World Economic Forum, the Global Maritime Forum, the Ethical Trading Initiative, and The Consumer Goods Forum. It is anticipated that many of the global brands that are members of the Consumer Goods Forum, including Coca-Cola and Nestle,

will adopt the tool, along with the companies such as Unilever that were earlier adopters of the Neptune Declaration. “The Consumer Goods Forum welcomes this new tool to urgently support the safety, health, and wellbeing of those working at sea. As our Board of Directors wrote to the UN Secretary-General last fall, not only has the Covid-19 crisis disrupted the maritime industry’s contribution to global supply chains, but it has also inadvertently created a modern form of forced labor. This is an unacceptable situation, and we support the call for all actors across sectors to work

engaged in international trade are avoiding chartering vessels where a crew change is due, with some demanding “no crew change” clauses in charter party agreements.

collaboratively and quickly to resolve it,” said Wai-Chan Chan, Managing Director of The Consumer Goods Forum. While the impetuous for the effort was an outgrowth of the pandemic and the thousands of crewmembers that were stranded or denied access to work over the past year, the UN agencies hope the new guidance will help ensure that the working conditions and human rights of seafarers are respected and comply with international standards. The new guidance aims to ensure that seafarers have their rights safeguarded in areas such as physical and mental health, access to family life, and freedom of movement. “The impact of the COVID-19 pandemic has highlighted the fragility of global supply chains as seafarers continue to endure tremendous, and yet largely invisible, hardship and suffering,” said Sanda Ojiambo, Executive Director and CEO of the UN Global Compact, a UN initiative focused on encouraging businesses and firms worldwide to adopt sustainable and socially responsible policies. “The mental and physical wellbeing of seafarers must be a priority and this tool is an important step in building awareness of

how to address human rights abuses in the maritime sector. It sends a powerful message of the importance of incorporating maritime workers in due diligence mapping to ensure that adverse human rights impacts are identified, prevented, mitigated, and addressed.” The voluntary program supplies the companies contracting for the transportation of cargoes the questions and considerations to be explored before engaging services. It highlights the common human rights issues for seafarers and encourages companies to engage in a dialogue with the charterer or operator before hiring transportation services. The UN organizations highlighted the continuing concern that seafarers are being forced to work beyond their contracts or the maximum 11-month period established in the Maritime Labor Convention. Currently, they believe that 200,000 crew remain at sea beyond their contracts and said they fear the number could return to the peak levels of 400,000 seafarers at the height of the crew change crisis in September 2020. The UN agencies also expressed strong concern at reports that companies

“The recent Suez Canal incident has reminded governments and the markets just how important global shipping is to the supply chains,” said Guy Platten, International Chamber of Shipping Secretary General, and one of the organizations that contributed to the development of this new program. “Seafarers are continuing to work to maintain global trade through exceptional circumstances, and the Suez incident has only exacerbated the already dire crew change crisis. Seafarers must not be forgotten now the canal is open again, and we call on businesses to urgently adopt these important recommendations.” The International Transport Workers’ Federation, the International Chamber of Shipping, the Institute for Human Rights and Business, the Rafto Foundation for Human Rights, and the OECD actively contributed to the development of the tool. The UN Global Compact has made the tool available online and is distributing it to the more than 8,000 businesses that are involved with the organization. It is also anticipated that other organizations, including The Consumer Goods Forum, will be distributing it to their members along with a message of support for the use of the tool. MMT

Maritime Matrix Today | May 2021 | 27

New fuel oil survey aims to identify potential quality and quantity issues T

he International Maritime Organisation’s 2020 global sulphur limit for marine fuel oil has been in force for more than a year. BIMCO, The International Chamber of Shipping (ICS), INTERCARGO and INTERTANKO are calling on Fleet Managers, Vessel Managers, Technical Superintendents, Masters and Chief Engineers to share their insight and experiences with marine fuels in a new survey aimed at identifying potential quality and quantity issues. Following on from the industry survey conducted in the first quarter of 2020 that showed the switch to low-sulphur fuel has not been without problems, the four organisations are launching a new survey, this time with the aim to get an even greater understanding of issues encountered by the industry, particularly issues related to the bunkering and use of marine fuel oil. This Survey will run for a year until 1 May 2022 and the information gathered will help identify specific areas in the fuel supply and management chain that need improvement. 28 | Maritime Matrix Today | May 2021

The survey comprises of two different sections that can be submitted separately: • Section 1 contains questions related to fuel oil quality and are aimed only at ships using compliant fuel oil i.e., VLSFO and ULSFO. • Section 2 contains questions related to fuel oil quantity and are for ships using both compliant fuel oil and HSFO with a sulphur content exceeding 0.50% m/m in combination with scrubbers. Answers and any related evidence are invited from ships operating worldwide in our bid to

get a detailed understanding of all fuel related issues encountered by the industry. Information gained from the survey will help in improving quality, quantity, and safety standards of marine fuel oil through related work at the IMO and other fora. MMT

IRClass develops specific remote surveys

Vijay Arora

eading flag administration, Panama Maritime Authority has authorised Indian Register of Shipping (IRClass), an international ship classification society to conduct specific surveys through remote inspection techniques.

anywhere in the world. It has developed the necessary remote survey guidelines which were released earlier this year. A dedicated facility with the requisite IT infrastructure has been put in place at its head office in Mumbai.

As the maritime world continues to reel under the shadow of the pandemic induced travel restrictions, IRClass ensured that ships continue to stay compliant with various IMO conventions and sail with valid certificates. Alternative means were adopted for evidence compliance by IRClass since 2020 when the travel restrictions were first introduced.

Following this authorisation, IRClass can now conduct Interim ISM/ ISPS & MLC audits, occasional in-water surveys and radio surveys which have been attended by a radio firm for ships under Panama Flag. Any other remote surveys will be undertaken after receiving specific authorisation from Panama Flag on a case-bycase basis. IRClass shall also be approaching other flags to be able undertake such surveys.

IRClass has developed remote survey capability for specific types of inspections using an online remote survey application backed up by a dedicated team which can support vessels

remote surveys for Interim ISM/ ISPS & MLC audits, occasional in-water surveys and radio surveys. This authorisation will help us provide our services during the continued pandemic condition till the situation normalises to enable conduct of physical surveys. Our customers can benefit from access to our surveyors from any location in the world, faster completion along with documented evidence of survey completion. IRClass provides the same level of assurance as an onboard survey with the help of documentation, images, video (livestreaming and recordings), these inputs are provided by the Ship Manager and crew.” MMT

Mr Vijay Arora, Joint Managing Director of IRClass said: “We are glad to receive the authorisation from Panama flag for conduct of Maritime Matrix Today | May 2021 | 29

New Foundation to address global supply chain challenges launched

ew solutions are required to address many of the world’s most pressing societal, environmental and economic problems, and the supply chain and logistics industry will play a critical role in their development. This is the message delivered at the launch of the Foundation for Future Supply Chain by its founder John Manners-Bell.

The Foundation for Future Supply Chain has been established as a ‘not for profit’ organization, providing politicians, government agencies, intergovernmental organizations and business leaders with an independent source of thought leadership, addressing and advising on many critical policy issues. The Foundation’s research will be focused around a series of core themes including: • Sustainability • Security & Risk • Future Mobility 30 | Maritime Matrix Today | May 2021

• Innovation & Disruption • Public Policy ‘Corporate strategy and public policy can only be effectively developed through an integrated and cohesive approach, taking into account all these imperatives at a global level,’ said Manners-Bell. To achieve this, the Foundation has brought together some of the industry’s brightest and most visionary thinkers from around the world in a forum which facilitates discussion and provides a road map for future supply chain policy development. Manners-Bell went on, ‘Whether Coronavirus or Trade Wars, Climate Change or Cyber Crime,

Supply Chains are central to the challenges of the next decade and beyond. Supply Chains can be part of the problem – or the solution. More than ever there is the need for an independent source of expert advice to inform these choices.’ Through its thought-leadership, the Foundation for Future Supply Chain will challenge the ‘legacy-thinking’ which often characterizes public policy debate and corporate strategy. It will publish regular policy papers, organize webinars and provide access to a knowledge resource. MMT

Growing opportunities for LPG market

ast week FFA trading started on the Baltic Exchange’s LPG assessment BLGP3, with the first trades reported. Covering 44,000mt cargoes from Houston to Chiba, via the Panama Canal, CME now lists the contract, providing world-class clearing options. 2020 was a record year for LPG exports from the US, as Asian residential use continued to grow. LPG spot shipping rates have faced a volatile 2021, with our BLGP3 route assessment rising to $182.4 per tonne before dropping away sharply to below $60 by March. This turbulence has underlined the importance of risk management. The ability of owners and traders to manage their freight risk through FFAs is supported by the Baltic Exchange. The LPG market is a niche, but important shipping market. The Baltic Exchange has been supporting the market with daily assessments since 2002, reporting

on Middle East to Japan rates. But the rapid growth of the Houston petro-chemical complex, supported by a global customer base and the emergence of ever more Very Large Gas Carriers, has allowed the Baltic Exchange to report on two new routes from the US Gulf to Europe and Asia. To support the needs of the market, the Baltic itself needs the support of the market participants. We need greater representation from owners, charterers and brokers. The LPG shipping market is very successful: it is well serviced by brokers and there’s a well functioning spot market. But the LPG sector need only look to the clean product tanker market, or indeed the dry bulk market, to see what opportunities arise when there is a highly liquid market for FFAs. A liquid FFFA market helps open new trading opportunities and new customers.

We offer LPG market participants a seat at the table. As global LPG trading patterns change, so will the Baltic Exchange’s assessments and routes. We want to evolve with the market and to do so, we need to work the LPG industry. We have an ecosystem of working and consultative groups and advisory councils which ensures that our vessel and route descriptions are keeping pace with the physical market. We offer a neutral space for competing parties to share their views. We want to promote the FFA market and help introduce new participants. Our reach is global. We are a membership organisation whose role it is to support our members. We want to support the LPG shipping community, but to do that we need your support and participation. MMT

Maritime Matrix Today | May 2021 | 31

Drewry expects Time Charter index to reach $8,200 per day in May

he Drewry Multipurpose Time Charter Index tracks one-year period charter rates across a basket of vessel types and sizes and forecasts the market movement over the coming month. The vessel types include breakbulk and project cargo ships. The Drewry Multipurpose Time Charter Index increased to $7,992 per day in April, representing a rise of just 2.5% compared to the almost 15% rise seen in the previous month. Drewry’s Index is up 22% since the start of the year and 35% since April 2020. Drewry expects the index to rise a further 2.6% in May to reach $8,200 per day. 32 | Maritime Matrix Today | May 2021

Rates for the larger dwt sectors of the fleet continued to rise over April, albeit at a much slower rate to March. This was mainly due to a slowing in activity, as most carriers reported being fixed through to June, although this did lead to some phenomenal outlier rates for the very few spot vessels available. The sector was also adversely affected by the fall in rates on the Handy market. Meanwhile the smaller, mainly short-sea, vessel market was steady over the month with little movement as supply mostly balanced demand and rates remained firm. Drewry’s assessment is based on period charter hire rates

and, while we remain optimistic for the longer term outlook for the sector, there are some downside risks for the shorter term, not least Covid-19 related restrictions being imposed in India and Japan and the ongoing issues in Mozambique. Both of these could cause some disruption to the oil and gas sector in the medium term and consequently project cargo demand. MMT

Singapore fuel oil stocks surge to over 4-year high

ingapore residual fuel oil inventories jumped 11% to a more than four-year high in the week to May 5 despite lower net import volumes which sank to a five-week low, official data showed. This also came amid steady to lower marine fuels demand at the world’s top bunkering hub as some buyers have held off on spot purchases in anticipation of lower oil prices while others may have bunkered in China where prices have been lower recently, four trade sources said. Onshore fuel oil stocks jumped by 2.67 million barrels, or about 420,000 tonnes, to 27.23 million barrels, or 4.29 million tonnes,

Enterprise Singapore showed. O/SING1

data

The increase in volumes was the largest weekly jump in 1-1/2 years. Compared with last year, Singapore’s residual fuel stocks were 13% higher. Increased arbitrage flows into the Singapore hub since March helped lift fuel oil stocks away from a near 1-1/2-year low in February. Net import volumes fell 34% from the previous week to 476,000 tonnes and were well below above the 2021 weekly average of 806,000 tonnes. Weekly figures, however, are volatile.

The largest net imports were from the United States at 137,000 tonnes, followed by the Netherlands with 134,000 tonnes, Russia with 117,000 tonnes and Iraq with 100,000 tonnes. Weekly Singapore imports from Malaysia, where most regional floating storage is located, dove to a more than two-year low of 93,000 tonnes. Singapore’s top fuel oil net exports destinations were South Korea at 97,000 tonnes, Guam at 37,000 tonnes and Japan at 35,000 tonnes. MMT

Maritime Matrix Today | May 2021 | 33

Mission to Study Antarctic Currents

renowned French explorer made headlines around the world when he became the first man to reach the North Pole alone back in 1986. Now, at the age of 74, the doctor-scientistexplorer Jean-Louis Etienne is going to set another milestone: A two-year mission around Antarctica aboard the Polar Pod, a BV-certified international oceanographic station designed like a spar buoy. The objective is to study the Antarctic Circumpolar Current, a crucial player in the Earth’s climate which contains an immense reserve of marine biodiversity still unknown to mankind. For exploring the Southern Ocean, a wide array of factors come into play. The high winds of the Roaring 40s, Furious 50s, and Screaming 60s ravage through these waters. The Polar Pod is designed to withstand waves of up to 38 meters (125 feet) as a precaution against the high winds and gigantic swells of this notorious region. Measuring almost 330 feet high and weighing 1,000 tons, it is essentially an offshore platform on a lattice spar structure. The bottom ballast weighs around 150 tons, and the nacelle at the top is made out of aluminium. For handling the force of the violent storms, the outer shell is made out of special steel. In comparison to a traditional ship, the Polar Pod provides far more comfort. Having a 250-foot draft, the “vertical vessel” provides extreme stability. It is designed for five degrees of heel in the conditions of the Southern Ocean and a vertical movement that does not exceed 10 percent of the height of the waves. The data collected aboard the vessel will be relayed back to researchers, oceanographers, climatologists, biologists, and scientific institutions from 12 countries. “Being the trusted certification partner for a project such as Polar Pod is an exciting adventure. This demonstrates our high technical expertise and innovation capabilities while supporting research and finding ways to protect the marine biodiversity,” said Matthieu de Tugny, Executive Vice-President Marine & Offshore at Bureau Veritas.”We contribute to shaping a better and more sustainable world.” MMT

34 | Maritime Matrix Today | May 2021

Maersk reports strongest quarterly profit

openhagen-based Maersk Group reported the strongest quarterly profit in its history, with earnings driven upwards by strong demand and capacity shortages. “A.P. Moller - Maersk delivered an exceptionally strong performance in Q1 2021 with record profit for the quarter. The high growth and profitability were driven by solid demand across [the ocean freight division]. Strong demand led to bottlenecks and a lack of capacity and equipment, which drove up freight rates to recordhigh levels,” said Søren Skou, CEO of A.P. Moller - Maersk. Maersk’s EBITDA increased to $4 billion for the quarter, more than double the level it saw a year ago. Volumes were up six percent, freight rates were up 35

percent and bunker fuel prices were down, driving tremendous improvement in Maersk’s core container business. The earnings were exceptionally high, and Maersk expects them to stay that way through the fourth quarter. Global container demand will likely grow by 5-7 percent over the course of the year, mainly driven by U.S. demand for Chinese goods. The profit opportunity is large enough that the number-one container carrier has boosted its full-year EBITDA guidance to a range of $13-15 billion. The high end is nearly 50 percent over the previous maximum guidance of $10.5 billion. Some of this windfall will go into capital expenditures, and Maersk now plans to spend roughly $2 billion more than

previously expected on capex over the course of 2021-22. “We remain focused on the longterm transformation of A.P. Moller - Maersk, prioritizing customers’ demand for integrated logistics. Our integrator strategy was validated by strong customer support during Q1. As we change the conversations with customers from being shortterm transactional to becoming long-term value-based, we lay the foundation for further, stable growth,” said Skou. Maersk will use a substantial part of the remaining funds to accelerate and extend its share buy-back program, returning an additional $5 billion to its investors over the course of the next two years. MMT

Maritime Matrix Today | May 2021 | 35

HSFO sales rebound H

SFO sales are up 47.2% from Q1 2020, reaching 3.1m tonnes. This is however still less than a third of high-sulphur fuel sales in Q1 2019, before the IMO 2020 Sulphur Cap came into force.

The 1 million tonne increase in HSFO sales exceeded the fall in lowsulphur fuel oil (LSFO) and marine gas oil (MGO) sales, though only marginally, with total bunker sales in Singapore up by 0.8% in Q1. Sales of MGO fell the most compared to a year earlier, down by 25.3% and accounting for just 8.7% of total bunker sales in Singapore in Q1. LSFO sales reached 8.6m tonnes, a 5.4% drop from Q1 2020, bringing its share of total bunker sales to 66.7%, slightly down from the 71.1% share it claimed at the start of last year.

Peter Sand BIMCO’s Chief Shipping Analyst

HSFO on the rise across the board A similar development in the share of bunker fuel sales can be seen in other bunkering hubs. In Fujairah, HSFO accounted for 16.9% of total bunker sales in Q1 2021. Here, LSFO dominated with a 78.6% market share. In Panama, where total bunker sales fell by 7.2% in the first three months of this year compared with 2020, LSFO accounted for 71.6% of total bunker sales (down from 79.5% in Q1 2020). HSFO’s share has also risen from Q1 2020, to a 17.6% share, up from 7.1% in 2020, but nowhere near the dominance it enjoyed in Q1 2019. “After the quick adjustment to the global sulphur cap, the decline in HSFO’s share of total bunker sales has stopped. Although its share is much lower than any time prior to Q4 2019, the steadily rise in scrubber-fitted ships has supported demand for HSFO and 36 | Maritime Matrix Today | May 2021

will remain until new solutions and future fuels are widely introduced on the industry’s path to decarbonisation,” says Peter Sand, BIMCO’s Chief Shipping Analyst. “In addition to changing the share of fuel types being sold, the global sulphur cap has also resulted in larger bunkering hubs gaining an even larger market share, and recording growth in 2020 despite a drop in total bunker sales. This development was due to owners and charterers seeking to minimise risks by choosing the biggest bunker hubs in the face of uncertainty surrounding the new fuel types,” Sand says. Rising high-sulphur fuel sales match rise in scrubber take-up The number of scrubber-fitted ships doubled in the thirteen months after the global sulphur cap came into force, fuelling a rise in high-sulphur fuel sales. There are currently 4,006 scrubber-fitted ships, up from 2,010 ships in January 2020. Across the four major shipping segments an average of 24.1% of the fleet, when measured in DWT (and TEU for containers). The crude oil tanker fleet has the highest share, at 30.5%, while with only 13.8% of total capacity scrubber fitted the oil product tanker fleet has the lowest. At the start of 2020 the average share across these four fleets stood at just 12.9%. The pace of scrubber fittings has slowed since its peak in January 2020, during which 259 ships with a total capacity of 33.4m DWT either had a scrubber installed or were delivered with one already on board. In the first three months of this year 228 ships have joined the number of scrubber-fitted ships each month, totalling 30.5m DWT in the first quarter.

Of the 228 ships fitted with scrubbers so far this year, two-thirds (153) were new-builds being delivered with a scrubber already fitted, with only 75 ships being retrofitted. This is almost the exact opposite of the shares in 2020, when only 27.1% were newbuilds (479), while the rest (1,289) were retrofits of the total 1,768 ships to have a scrubber installed. Will we see a second wave of scrubber installations? Although the pace of scrubber installations has slowed, the economic case for a scrubber is still strong. After the ups and downs of 2020, the price spread between HSFO and LSFO has stabilised at an average of USD 100 per tonne in the major bunkering hubs. In Singapore on 27 April, a metric ton of HSFO cost USD 388, leaving VLSFO USD 106 more expensive per metric ton. In comparison, on 1 January 2020 the price of HSFO was only USD 28 per metric ton lower than currently (USD 360 per tonne), but the spread was however three times higher as a metric ton of VLSFO cost USD 710 at the time. Despite the ups and downs of the spread in 2020, when averaging the HSFO and VLSFO spread over the whole year, it stood at almost exactly USD 100 per metric ton (100.7). “With the spread now stabilising at a more normal level, a scrubber investment still represents a solid economic decision for owners, as higher earning -, thanks to lower voyage costs – are enough to cover the initial cost as well as the running costs of the scrubber within a reasonable period,” says Sand. “Low demand for certain oil products as a result of mobility restrictions has helped lower the price of LSFO. However, as demand for products such as jet fuel starts to recover, the HSFO-LSFO spread may well increase, solidifying the economic case for scrubbers.” “A return to the high levels of scrubber installations that we saw at the end of 2019 and start of 2020 is however unlikely, as the majority of owners who wanted to retrofit their ships have now done so, and the majority of scrubbers being added to the fleet now come from newbuilds, Sand says.” MMT

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Guidelines to support development of ammonia are underway

fforts are underway across the shipping industry to support the development and commercialization of ammonia as a maritime to support reducing carbon emissions from ship operations. In the latest step, classification society fuel Bureau Veritas released an AmmoniaPrepared notation. Work is also underway on a comprehensive Rule Note for ammonia as fuel. According to BV, the development of the notation and the rule note is a critical step to support the broad efforts across the industry working to develop ammonia. The efforts are to support ship owners, designers, shipyards, and charterers in advancing their journeys toward using ammonia and a zero-carbon future. “Ammonia is considered a key fuel on the road to the IMO’s 2030 and 2050 GHG and carbon reduction targets,” notes Laurent Leblanc, Senior Vice- President, Technical & Operations at Bureau Veritas. “We are working to advance its safe development and are currently involved in joint industry projects to assess the risks of ammonia. The release of these new notations

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is a major step to help shipowners, designers, shipyards, and charterers make progress in their sustainability journeys and inform their future investments.” Through the notation and guidelines, Bureau Veritas seeks to address the challenges of using ammonia in the shipping industry. While ammonia is viewed as a promising alternative fuel, BV notes that it has a lower energy density compared to other fuels (about half that of LNG and about a third of fuel oil). It has comparatively poor combustibility properties and has been seen in several accidents, ammonia’s toxicity requires stringent measures to protect crew and/or passengers from exposure. BV’s Ammonia-Prepared notation applies to new-builds and certifies that a ship has been designed and constructed to later be converted to use ammonia as fuel. The notation targets the spaces and structural components that will accommodate future ammonia fuel tanks, fuel handling equipment, and ammonia vapor treatment installations. The notation also covers specific requirements for the conversion of engines and boilers from using

fuel oil, LNG, or multiple fuels to ammonia. The notation was developed BV reports in collaboration with different stakeholders including ship owners, equipment makers, designers, and shipyards building on expertise across the value chain. Bureau Veritas recently issued its first Ammonia-Prepared approval in principle to GTT related to containment of ammonia in membrane MARK III tanks. The current release is a prelude to a full Rule Note on ammonia as fuel. BV said the rule note, which will be the next step in the process, will primarily concern the safety aspects of managing ammonia in storage tanks, fuel-piping systems, and during bunkering. Bureau Veritas is addressing the challenges of sustainability and the energy transition by providing rules and guidelines to the safety, risk, and performance requirements for innovation in future fuels and propulsion systems. In 2021, they plan to release rules that will address methanol, ammonia, and hydrogen as marine fuels. MMT

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