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Alfa Laval PureSOx milestones For a decade and more, Alfa Laval PureSOx has been at the forefront of exhaust gas cleaning. What follows are some of the landmark developments in that time – key steps for the system that keeps customers a step ahead.

2009

2012

2013

2014

2017

2016

2016

2015

First PureSOx pilot system

Alfa Laval celebrates a century at sea

Second PureSOx pilot system

Global sulphur cap ratification

Lloyd’s Register approval

Alfa Laval 360° Service Portfolio

Alfa Laval Test & Training Centre

ECA 0.1%S limit

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2017

100 orders for PureSOx READ MORE

2018 PureSOx Connect

2018

1.5 million operating hours

2019

10 years of PureSOx at sea READ MORE

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1st Quarter 2019

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Containerships: leading the way for LNG TRADE ROUTE Transatlantic: the cascading impact

LAST WORD Why digitalisation is key for Hapag-Lloyd

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REGIONAL ANALYSIS The growth of Belt and Road


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Contents 1st Quarter 2019 volume 7 issue 1

Regulars

3 COMMENT 39 FLEET STATS & ANALYSIS 42 MARKET UPDATES 44 LAST WORD

Operator profile

4 Not only are TOTE’s vessels the first box ships to run on LNG, but the US operator has launched bunkering initiatives to help other container ship owners

Trade route

6 The transatlantic has been hit with congestion in ports and the cascading of larger vessels. How are ports are solving this?

Regional analysis

10 Fierce competition, capitalising on Belt and Road and expanding capacity are the dominant trends for ports in Asia

Newbuild profile

14 CST unveils the key aspects to the design and bunkering for Containerships Nord, the first dual-fuelled LNG newbuild box ship in Europe

Port and ship productivity

19 New initiatives are increasing the efficiency of cargo operations

Class societies

24 Class societies take the lead in boosting box ship LNG take up, digitalisation and stowage efficiency

Digitalisation

28 The latest digitalisation solutions include container repositioning

Ballast water management systems

33 2018 saw a record number of USCG type-approvals, but a recent change in the law could open the door to other systems

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Editor: Rebecca Moore t: +44 20 8370 7797 e: rebecca.moore@rivieramm.com Contributor: Gavin van Marle t: +44 20 7394 7209 e: gavin.vanmarle@rivieramm.com Commercial Portfolio Manager: Bill Cochrane t: +44 20 8370 1719 e: bill.cochrane@rivieramm.com Head of Sales – Asia: Kym Tan t: +65 6809 1278 e: kym.tan@rivieramm.com Senior Sales Consultant: Ed Andrews t: +44 20 8530 8322 e: ed.andrews@rivieramm.com Production Manager: Ram Mahbubani t: +44 20 8370 7010 e: ram.mahbubani@rivieramm.com Subscriptions: Sally Church t: +44 20 8370 7018 e: sally.church@rivieramm.com Chairman: John Labdon Managing Director: Steve Labdon Finance Director: Cathy Labdon Head of Content: Edwin Lampert Senior Creative Manager: Mark Lukmanji Published by: Riviera Maritime Media Ltd Mitre House 66 Abbey Road Enfield EN1 2QN UK

Manoeuvring

36 Tugowners invest in new tug designs and environmental technology for manoeuvring ever-larger container ships

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Main features include: Trade route: transpacific; Port regional analysis: Europe; Top 20 carriers; Ship operations: Communications; Propulsion; Panama Canal: Fuel efficiency; Coatings; Digitalisation

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Container Shipping & Trade | 1st Quarter 2019


COMMENT | 3

Tipping point for LNG as box ship fuel

I Rebecca Moore, Editor

THE LAUNCH OF CMA CGM'S VESSELS WILL OPEN THE DOORS TO USING LNG”

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believe that LNG is set to accelerate within the container shipping industry this year after a period of steady but slow progress. This is because two of the major challenges holding back widespread use – bunkering infrastructure and high capex costs for LNG technology – have been greatly reduced. CMA CGM-owned short sea feeder Containerships’ first LNG-fuelled vessel has started operating this year – an event that will help to break down the bunkering infrastructure challenges, as it will be the first box ship to use LNG in European ports. Containerships has set up a bunkering hub in the Port of Rotterdam and is using Shell as its bunkering partner. This will boost LNG bunkering infrastructure and will surely encourage other container carriers in Europe to consider this option as a way to meet the 2020 low sulphur directive. Our shipbuilding feature (pages 14-16) shows just how far experiences using LNG as a marine fuel for box ships have come. When the project was first discussed in 2014, WinGD’s two-stroke DF-engine was a new concept and the engine only existed in the test bed at that time. Therefore, the challenge was to get the engine performance optimised. This was achieved. Our article also illustrates how Containerships is not just looking at using LNG as fuel for the seagoing journey of its ships: the target is to create a complete, LNG-based door-to-door supply chain in Europe. In addition to LNG-powered vessels, the company is investing in LNG-fuelled trucks. This, I believe, will be emulated by other container ship owners and will help develop the landside infrastructure needed by other operators. But back to bunkering. According to the International Association of Ports and Harbors, Rotterdam port estimates that by 2020 it will have granted nine licences to

LNG bunker providers to operate at the port. As the largest European container port and at number 12 globally, this will be significant for box ship operators considering using LNG. And this is just the tip of the iceberg – many ports around the world are developing LNG bunkering facilities. The launch of CMA CGM’s LNG-fuelled mega vessels in 2020 will open the doors to using LNG as fuel – but the bunkering infrastructure will need to be up and ready before this. CMA CGM has signed contracts with Engie and Total to develop LNG bunkering at ports globally, again breaking down the bunkering barrier. Let us not forget the world’s first LNGfuelled container ships. US operator TOTE’s two Marlin-class vessels, launched in 2015, are the first box ships to use LNG. As well as setting an example to other container operators, the company is actively helping other US container ship operators use this fuel as it has introduced the first LNG bunkering barge within the US and is looking for other operators to use this barge (pages 4-5). The up-front costs needed for making a box ship run on LNG have also reduced. An independent study commissioned by SEA\ LNG about LNG in the container ship market said recent shipyard prices demonstrate substantially smaller LNG premiums over traditional vessels. Reasons include extensive LNG newbuilding experience and technology improvements leading to shipyard efficiency gains, as well as current market conditions favouring buyers of newbuildings. This is very important at a time when the container ship industry has been in a downcycle. Reduced capex costs will also encourage the LNG retrofit market. The upcoming 2020 low sulphur cap, increased bunkering infrastructure and reduced technology costs create a perfect storm for LNG to really infiltrate the container ship industry. CST

Container Shipping & Trade | 1st Quarter 2019


4 | OPERATOR PROFILE

TOTE encourages uptake of LNG in box ship industry Not only are TOTE’s vessels the first box ships to run on LNG, but the US operator has launched bunkering initiatives to help other container ship owners to use this fuel

U

S container ship operator TOTE was the world’s first operator to run container ships on LNG – and it has achieved another first by introducing the first LNG bunkering barge within the US. The company’s two 233 m Marlinclass vessels, Isla Bella and Perla del Caribe were delivered at the end of 2015 and beginning of 2016 respectively by US shipyard General Dynamics NASSCO and now operate between Jacksonville, Florida, and

San Juan, Puerto Rico. They are doing their part in encouraging other container ship operators to use LNG. Isla Bella celebrated its three-year anniversary in October 2018. TOTE former executive vice president Peter Keller said (interviewed before he left the company) “The ships have been operating extremely well, and continue to operate every day, which proves the point to the rest of the industry that it is safe to use, there have been no incidents and the ships run on schedule.”

In Q4 last year, the vessels began to be bunkered by the first LNG bunkering barge in the US. Before this, they used a temporary solution, a purpose-built transfer skid. Now the barge has arrived, TOTE hopes that it could also be used by other operators. The skid bunkered 25 LNG ISO containers a week at Jacksonville port within five hours using a purpose-built transfer skid. TOTE’s proprietary skid has reduced the time taken to bunker by around 30 hours as it can bunker from four trucks at once. Mr Keller

TOTE’s LNG box ships act as an important reference for dual-fuel propulsion for the container ship industry (credit: TOTE)

Container Shipping & Trade | 1st Quarter 2019

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OPERATOR PROFILE | 5

explained the skid-mounted loading manifold was developed to TOTE’s specification and built by Applied Cryogenics Technology in Texas. Explaining how the skid could boost the market for other operators, Mr Keller said “This is important for smaller ports and areas that do not want a barge, as it is a great system without making major adjustments and spending a lot of money. It also suits smaller container ships.” He said that he and the vendor of the skid were “actively trying to market it.” Meanwhile, TOTE has started using its LNG bunker barge, delivered by Conrad Industries. The vessel, with 2,200 m3 LNG capacity is being used in the port of Jacksonville, Florida, where the Marlin-class container ships are bunkered on their service sling between Jacksonville and San Juan, Puerto Rico. The construction and operation of the bunker barge involved both class society ABS and the US Coast Guard, and it uses GTT’s LNG membrane (an atmospheric-pressure containment) system. This is the first time this has been installed in a non self-propelled barge in the US. Explaining why the company decided to use a barge, Mr Keller said “We felt that the barge was better for the long term, as we are talking [about using it] for 25-30 years.” He said the double skids were “extremely heavy”, so the barge has its own arm to lift hoses and an automatic anchor system. And Mr Keller is hopeful the barge will also aid the take-up of LNG by container ship operators. “It has been made to support the marketplace, not just TOTE, and we intend to market our barge to other potential users.” The barge takes three hours to bunker each of TOTE’s vessels. TOTE is also converting the rest of its fleet to dual-fuel LNG: TOTE’s Orca-class roros are being retrofitted by General Dynamics NASSCO. TOTE has entered into a contract with MAN Diesel & Turbo for it to develop a conversion kit for the Orca vessels’ engines so they can operate as dual-fuel machines. The conversion kit was tested

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Peter Keller (SEA\LNG) Peter Keller joined TOTE in February 2012 as president of TOTE Maritime Puerto Rico. He left in November 2018. He is also chairman of SEA\LNG. From 2000 until 2010, Mr Keller was the executive vice president and chief operating officer of NYK Group Americas. He was also a member of the board of directors of the Pacific Maritime Association. Mr Keller was inducted into the International Maritime Hall of Fame in 2006 in New York.

at the end of last year. Delivery of the vessels is expected in 2020. Mr Keller said if the company decided to add to its fleet, it would “certainly” choose to use LNG, because “as a company we embrace LNG, as we have so much investment in this, and we see it as a strong market.”

Boosting industry LNG adoption Mr Keller is chairman of multi sector industry coalition SEA\LNG, of which TOTE is a member. It was created to accelerate LNG’s adoption as a marine fuel.

Speaking about SEA\LNG’s work, he said “Our role is to facilitate [the use of LNG] and let shipowners know that it is safe, readily available, absolutely compliant, and financially very viable, especially considering the costs of compliant fuel after 2020. LNG solves the core issue of the fuel. “People are getting comfortable with the technology. LNG really does work well, we can’t stress the safety issue too much.” He singled out that the most important activities were to provide education, additional information and data to the industry. He said “With the exception of cruise, most of the sectors are not performing terribly well, so there are not a lot of discretionary funds to build ships, and the current newbuild order for container ships compared to years past is not strong. But as we get beyond 2020 and owners see the cost of compliant fuel, and want to but may not be able to pass on the costs, that is a concern. So education, fuel costs and investment required continue to move as the market gets bigger, and the price typically becomes more competitive over time.” He summed up “If we take all those factors together, while we are not yet at a tipping point, as many have suggested, I do think we have a significant amount of initiative and that will continue to move forward.” SEA\LNG has a bunker navigator tool on its website for operators to see where LNG bunkering is available. “I am surprised to see how many ports have storage capability or lifting capability,” Mr Keller said. Meanwhile, he applauds the role that TOTE has taken in helping to introduce LNG to the container shipping industry. “Our ownership took the risk and the innovative step to move forward with LNG, and they certainly need to be congratulated for taking that risk and making it easier for others to embrace technology and say what works well and what is financially viable. More than anything, it is environmentally viable for the people that TOTE serves.” CST

Container Shipping & Trade | 1st Quarter 2019


6 | TRADE ROUTE

Bigger vessels a ‘headache’ for transatlantic The transatlantic has been hit with a double whammy – congestion in some ports due to ULCSs from Asia and the cascading of larger vessels. How are these issues being resolved? Montreal port has new post-Panamax cranes at Viau terminal so that it can be in a position to handle larger vessels

U

S East Coast ports’ struggles to accommodate larger vessels from Asia is having a knock-on effect on other US trades it is claimed – and ACL chief executive Andrew Abbott describes it and political uncertainty as “our biggest headaches.” “The ports are finding it problematic to handle these larger vessels due to antiquated infrastructure. Instead of two ships of 5,000 TEU coming in each week, there is now one big 14,000 TEU ship, and

Container Shipping & Trade | 1st Quarter 2019

the ports cannot handle it,” he said. Indeed, Mr Abbott said that his carrier was experiencing delays in most of its North American ports. “The productivity is not where it needs to be – that is the issue.” He believes one potential solution is for the US to go to 24-hour gate systems, like the major ports in Europe and Asia, to spread out pick-up and delivery times over a longer period to reduce gate congestion. US ports are also seeing a surge in volumes during the pre-Chinese New Year period due to uncertainty caused by

the US-China trade tariff war, and this has compounded the problem. The other issue on the transatlantic trade is the cascading of larger vessels. Mr Abbott explained that, “As the big alliances built mega vessels for the Asia trade, they shifted the older Asia tonnage onto trades like the transatlantic. Therefore vessel capacity has got larger.” He said that, in recent years, ships of 3,500-5,000 TEU have generally been deployed on the transatlantic – this has now jumped to vessels of 5-8,000 TEU.

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TRADE ROUTE | 7

“Right now, this situation has been ok, because westbound trade has been stable at decent volume levels, even though eastbound has been lousy for several years.” But he warned that “If westbound volumes should start tailing off due to an economic slowdown or trade war, there will be a serious overcapacity in the trade, as supply will be way higher than demand. If this happens, there will not be enough cargo around to fill these larger ships.” Mr Abbott commented that the two leading trade indicators – US housing stats and car sales – are showing signs of weakness. He noted that the eastbound market from North America to Europe is “as weak as it has ever been, despite alltime low freight rates.” He added that “People are just not buying as much from North America, and there is a worse trade imbalance compared to a year ago.” Another impact on the transatlantic trade will be the 2020 low sulphur directive. ACL is well-prepared for this as its fleet of five G4 conros are fitted with Alfa Laval scrubbers. At 3,800 TEU they have double the capacity

Andrew Abbott (ACL): “If westbound volumes should start tailing off...there will be a serious overcapacity in the trade, as supply will be way higher than demand”

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of the older ships but share the same footprint. The company started phasing the new vessels in at the start of 2016. The new fleet is more efficient and greener then the company’s previous G3 fleet. “It was a great decision to go with the scrubbers and they are working with excellent reliability so far,” Mr Abbott remarked. He said that lines without scrubbers need to be fully low sulphur compliant by 1 January 2020. To achieve compliance, those lines need to start filling up with low sulphur fuel mid-year to purge their fuel tanks of uncompliant fuel. “Everyone expects fuel costs to skyrocket once this occurs, and this will eventually get passed on to the consumer – there is no margin left to absorb anything at today’s freight rates.”

Big berths – big ships

Ports on the US East Coast have launched various schemes to deal with larger ships, which can only be positive for the transatlantic trade. At the Georgia Foreign Trade Conference, Georgia Ports Authority (GPA) executive director Griff Lynch unveiled GPA’s ‘Big Berth/Big Ship’ programme that will allow the Port of Savannah to simultaneously handle six 14,000 TEU vessels by 2024. “No other single container terminal in North America has the ability to expand berth capacity at this rate,” said Mr Lynch. Currently, Savannah’s Garden City Terminal is equipped to handle two of these vessels and by April of this year that number will increase to three. During his presentation entitled 2019: The Triple Crown? Mr Lynch told an audience of 350 logistics professionals that the Port of Savannah had the previous week achieved the busiest month ever in its history, moving 4bus year. “A strong global economy coupled with a growing awareness of Savannah’s logistical advantages is driving sustained growth at our deepwater container terminal,” GPA board chairman Jimmy Allgood said. “GPA’s Big Berth/Big Ship programme

will ensure Georgia stays ahead of demand and ahead of the competition.” Over the next five years, the authority plans to add another 21 neo-panamax ship-to-shore cranes, replacing 14 of its older models to bring the total fleet to 37. Dock upgrades are already under way to support the new, larger machines. In addition to the ship-to-shore cranes, GPA is adding a dozen new rubber-tyred gantry (RTG) cranes which will bring the number of Garden City Terminal’s container handling cranes to 158. Ten RTGs will be commissioned in July, and another two in September. Phase I of the Mason Mega Rail project will be complete in October 2019. Full completion a year later will double the Port of Savannah’s rail lift capacity to 1M containers per year. In late 2021, the Savannah harbour expansion project is slated for completion, delivering the deeper water necessary to accommodate the larger vessels now calling on the US east coast. “These advancements are necessary to handle tremendous customer demand at our terminals,” Mr Lynch said.

Domino effect

Other ports on the US East Coast are also focused on boosting productivity to cope with larger vessels. Ports America Chesapeake general manager Bayard Hogans said of the Port of Baltimore and Seagirt Marine Terminal “The overall increase in size of vessels on all trade lanes has increased the amount of vessel moves for each call. This creates a domino-effect stress level on all aspects of the terminal. When the larger ships start to stack up based on schedule degradation, the impacts are amplified.” Explaining how the port was dealing with such challenges he said “There are several aspects of the terminal that are being developed and upgraded. Additional RTG cranes and other container-handling equipment have been, and will continue to be, replaced and upgraded. Improvements to two gate complexes are underway and plans are being finalised for additional

Container Shipping & Trade | 1st Quarter 2019


8 | TRADE ROUTE

ACL’s new G4 fleet is prepared for the low sulphur directive as all five ships are fitted with scrubbers

waterside capabilities.” Speaking about boosting efficiency, Mr Hogans said “Efficiency compared to volume growth is being managed in several ways. Ancillary services such as container maintenance and repair as well as chassis are being moved to off-dock locations.The introduction of additional container handling equipment is directly connected to maintaining aggressive vessel production and truck turn times.” He summed up “Our focus is based on a two-pronged approach. The first focal point is on bringing value to the ocean carriers with very productive vessel operations that allow the vessels to turn quickly. The second is on the motor carriers and BCO community.When trucks have low turn times in our terminal, the BCOs get their cargo faster.” Ports America’s Port Newark Container Terminal has embarked on a US$500M+ expansion plan that will upgrade the terminal from a 0.85M-lift per year container terminal without ultra large container ships (ULCCs)or barge capabilities to a 1.4M-lift per year terminal with ULCSs, barges and significantly improved road and rail capabilities. Elsewhere, Port Everglades has seen “stable, consistent” growth in its operations, its chief executive Steve Cernak told Container Shipping & Trade. In 2017, its container volume hit 1.76M TEU.

Container Shipping & Trade | 1st Quarter 2019

The port is in the middle of a capital programme to boost its infrastructure. The port serves the north–south markets (predominantly the Mediterranean, North Europe and Central and South America). But once the programme is completed, Mr Cernak is hopeful the port will win an east–west service, explaining it would benefit due to its “connectivity to north–south tradelanes and the transhipment opportunities to other services.” It is also ordering custom-built cranes to handle fully-laden vessels. Nine new super-post-Panamax cranes will be added, with an option for three more. The project is expected to be completed and in operation by 2021. “The cranes are critical,” Mr Cernak commented. “We need their reach.” Port Everglades is also moving forward with a public-private partnership to build a logistics centre on port property that includes cold storage. The project is called the Port Everglades International Logistics Center, and will include design, construction, financing, operation and maintenance. Port Everglades International Logistics Center will contain a warehouse, refrigerated warehouse, office space and cross-docking facilities, which will enhance the services available to shippers using Port Everglades. The entire logistics centre will be designated as a foreign-trade zone. Construction will be completed in late 2020 or early 2021.

CETA boost

Over in Canada, Port of Montreal is focused on boosting its transatlantic trade and deriving benefits from the Comprehensive Economic and Trade Agreement (CETA). CETA is a freetrade agreement between Canada, the European Union and its member states. It has been provisionally applied, so the treaty has eliminated 98% of the tariffs between Canada and the EU). Montreal Port Authority public affairs vice president Sophie Roux said “With more than 55% of our volumes tied to northern Europe, CETA will continue to be a major growth driver in the coming years.” She said that CETA’s positive impact saw a 3.7% growth in trade between the Port of Montreal and the European Union from January to November 2017 and January to November 2018. Ms Roux added “We have always been a leader for trade with Europe, as we are the gateway for Europe to the industrial heartland of North America. We are actively working at promoting the opportunities tied with the new CETA agreement to consolidate our presence in European markets.” She said that with the announcement of new Mediterranean container services in 2017 and 2018 by CMA CGM and Maersk as well as the addition of Hamburg Süd in 2018, “our market diversification is expected to continue and the outlook is for sustained growth over the coming years.” CST

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10 | REGIONAL ANALYSIS Asia

Asia ports: competition, capacity and capitalising on Belt and Road Fierce competition, capitalising on Belt and Road and expanding capacity are the dominant trends for ports in Asia

C

hinese ports dominate the global top 20 largest container ports and are focused on boosting their intermodal links and upgrading facilities. Shanghai scooped top spot for the box port with the greatest volumes in 2017 – and for the first six months of 2018 achieved 24M TEU, up 4.4% yearon-year.

Boosting its position is its Yangshan phase four terminal, opened at the end of 2016. It is an automated facility capable of handling 4M TEU per year. The yard cranes are driverless, as are battery-powered automatically guided vehicles that transfer containers between quay cranes and yard stacks. The port has also built up its links along the Yangtze River as part of its strategy

to increase inland waterways traffic. Ningbo is at second place in the top 10 largest container ports in China. It won a clutch of new services last year, including a new central and south China-Australia Express sling to be launched in August by Evergreen, Hyundai Merchant Marine and APL. In the same month, APL announced it was adding Eagle GO Guaranteed to its Asia-Europe service network that also includes Ningbo. Shenzhen managed to retain third spot, but volumes only climbed by 1.1% for H1 2018. Plans to make it a

PSA and ONE have collaborated by forming a joint venture terminal in Singapore, which will increase service reliability (credit: PSA)

Container Shipping & Trade | 1st Quarter 2019

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Asia REGIONAL ANALYSIS | 11

free trade port by the end of 2020 will further boost its throughput. The port plans to cut its customs clearance time for cargo by one-third by 2020 through streamlining procedures and lifting some trade restrictions.

Behind Nansha’s fast growth

Its competitor Nansha was the fastest growing Chinese top 10 port in H1 last year, as volumes soared by 8.5% to 12.36M TEU. Nansha is boosting its fast growth through tapping into China's Belt and Road initiative and growing its rail infrastructure. Nansha is part of the Guangzhou Port complex in South China, in the Pearl River Delta. As well as Nansha, the international container terminal, the complex consists of three river terminals. Nansha’s Europe chief executive Johannes Nanninga told Container Shipping & Trade “Nansha was only opened in 2004 and in the last 10 years it has grown tremendously. We

have added value by opening a free trade zone.” The port directly competes with Shenzhen port, on the opposite side of the Pearl River Delta. “The big difference is that when the port of Shenzhen was built, it was not such a big city but nowadays the city consists of 15M people.” Therefore, due to space restrictions the port will struggle to grow further. But Mr Nanninga said that by contrast, Nansha is built on partially reclaimed land and away from the city centre, so has space to expand. Guangzhou port has risen to the sixth largest container port in the world for volumes, overtaking Hong Kong and Busan. Nansha’s volumes comprise 65% of Guangzhou’s total volumes. It has capacity for 20M TEU and last year handled 14M TEU, up by 12% compared to 2017. It can also handle 20,000 TEU box ships. Mr Nanninga emphasised rail developments as being crucial to the port’s growth. “Nansha is in the very

final stages of being connected to rail. This means that Nansha will be the only deepsea port in China that has an ondock railway station – all the others shunt between station and port. The trains will roll right into the terminal.” The port started work on the ondock railway in 2015, with work slated to be finished by mid-2020. Mr Nanninga added “We will be connected to the national grid and connected to the Belt and Road programme. It is so important for ports in China to have this connectivity, as in the past a lot of manufacturing and production took place in the coastal areas, therefore the system was driven by loading trucks and bringing them to port. But a lot of economic activity is countrywide now as manufacturers have moved to cheaper locations inland and in the west.” Rail is needed to access these manufacturing locations which distant from the coast. Furthermore, China is also becoming more of a consumer market

Why Australia needs a new container terminal Australia’s Port of Newcastle has recently embarked on an ambitious diversification strategy to expand and grow its trade. One component of this diversification is developing a container terminal. Container throughput at the port is currently limited. Most containers from within Port of Newcastle’s catchment area ship through ports in Sydney or Brisbane, adding to supply chain costs and reducing efficiency, said Port of Newcastle customer and strategic development executive manager Ian Doherty. Mr Doherty said “The port is developing the most productive, fully-automated and low-carbon container terminal in Australia, growing to manage 2M TEU a year within 20 years. The port already has the land, a deep channel and rail connections able to bring 1.5 km trains right to the berth to load and unload containers. That is more than twice the length of the trains servicing Port Botany in Sydney.” There is strong interest in this opportunity from a number of globally-significant port operators, demonstrating the

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economic viability of the port’s plans to diversify in this area. Australia must remain a genuine player in global trade. Mr Doherty pointed out why the port wants to build the container terminal. “International shipping lines are increasingly… building ultra-large container vessels that carry 14,000 to 18,000 TEU. These ships cannot be accommodated at the existing east coast ports.” However, Port of Newcastle has the channel depth and landside capacity to handle these larger ships through its planned container terminal. He added “Exporting and importing businesses across New South Wales rely on a congested and unpredictable transport network when shipping their goods through Port Botany in Sydney. Some freight moves through more distant ports in Brisbane, Adelaide or Melbourne. All of these routes are inefficient and not cost-effective for businesses competing in price-sensitive markets. A new container facility at the Port of Newcastle could not just lower transport costs but also improve efficiency and enhance reliability of delivery.”

Container Shipping & Trade | 1st Quarter 2019


12 | REGIONAL ANALYSIS Asia

so “better distribution channels are needed on the import side. We think a rail, barge and good road network is of paramount importance.” Indeed, Nansha is also connected to 50 barge/ feeder networks. As well as focusing on boosting connectivity in China, the port is concentrating on increasing its trade lane growth. As part of this, it appointed a managing director in the US and Mr

Nanninga as managing director for its Europe trade in 2016. He said “The Europe trade has grown very fast, especially to north Europe but to the Mediterranean as well, and there is also a very healthy export growth from Europe. We think there is room to add a new service between the Far East and Europe as our existing services have grown by up to 40% in volumes annually.”

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While Nansha is trying to boost trade with the US, its exposure is more limited than other trades it is involved with – but this works to its advantage as it is less exposed than other ports in China to the US/China trade war. However, Mr Nanninga said that trade was “up and coming” in the transpacific. He singled out the trade between Asia and the Middle East, India and Pakistan as being fast growing for Nansha. Many other Chinese ports are also hoping to capitalise on the Belt and Road initiative. In March this year, Qingdao Port International and COSCO Shipping Ports established a joint venture – Ocean Bridge International Ports Management – to boost co-operation with the Belt and Road initiative. A statement said “The two sides will make full integration of project development and management to realise the complementary advantages, raise the level of the operation and management of the terminal and achieve win-win development, to integrate into the Belt and Road initiative.” Fellow Bohai Bay port Tianjin is another Chinese port hoping to capitalise on the Belt and Road initiative: calling itself an “important hub” in the initiative, as well as in the China-Mongolia-Russia economic corridor and a strategic point of the Maritime Silk Road.

Port and carrier partnerships

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Over in southeast Asia, the world’s second largest container terminal Singapore Port has concentrated on boosting its use of big data and building partnerships with container shipping lines. PSA Singapore (PSA) and Ocean Network Express (ONE) will form a joint venture company based at Pasir Panjang Terminal in Singapore. Subject to regulatory approvals, the joint venture terminal is scheduled to commence operations in H1 2019 and operate four mega container berths with a combined annual handling capacity of 4M TEU. ONE chief executive Jeremy Nixon said “Through this joint venture in


Asia REGIONAL ANALYSIS | 13

Other ports in southeast Asia are now capable of handling bigger vessels. Laem Chabang can now handle 14,000 TEU vessels after Ocean Network Express (ONE) started phasing in its 14,000 TEU newbuilds into its FE5 service. There has been a 15% increase in vessel size to 16,000 TEU in Cai Mep. Drewry explained that there were now more direct calls at southeast Asia. CST

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the line adopting a dual-hub strategy for southeast Asia and transferring a large number of Ocean Alliance volumes from Kelang to Singapore. But it is not all bad news for Kelang – its largest trade is now intra-Asia, which saw growth of 8% and accounted for 57% of its traffic in terms of trade mix in 2017. Its CT8 and CT9 terminal expansion programmes mean the port has future long-term capacity secured.

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Singapore, ONE will further enhance its terminal and vessel planning operations in an even closer co-operation with PSA. This will improve our service reliability and benefit our customers through better service levels.” CMA CGM’s Ze Box and PSA unboXed have signed a memorandum of understanding to work on digitalisation projects. Ze Box is CMA CGM’s corporate venture capital arm that invests in start-ups with innovations that bring strategic value to the CMA CGM Group, while PSA unboXed is PSA International’s external innovation and corporate venture capital arm. A statement said the collaboration between CMA CGM’s Ze Box and PSA unboXed builds on the commercial partnership between CMA CGM Group and PSA International, such as the CMA CGM-PSA Lion Terminal in Singapore. Ze Box and PSA unboXed will collaborate through their corporate innovation programmes to address industry problems. They will leverage each other’s industry knowledge and experience in shipping and supply chain management to provide problem statements and real-life solutioning capabilities, to test ideas and to achieve better customer experience and operational efficiency. PSA International group chief executive Tan Chong Meng said “Logistics is a team sport, and PSA and CMA CGM have different and yet complementary strengths in the global supply chain. This technological collaboration will add depth and diversity to our respective innovation efforts, as we seek to co-create meaningful and impactful solutions in the face of technological disruptions and changing customer needs.” Singapore’s relationship with CMA CGM has affected Port Kelang in Malaysia. The port’s main container terminal operator Westports lost out after CMA CGM acquired Singaporeheadquartered APL in 2016. One of the stipulations of the sale of state-owned APL was that CMA CGM also take on APL’s Singapore terminals, resulting in

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14 | NEWBUILD PROFILE

Containerships: leading the way for LNG box ships CMA CGM-owned Containerships has received 1,400-TEU Containerships Nord – the first container ship newbuild in Europe to run on dual-fuel LNG

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uilt by Wenchong Shipyard in China, the 1,400-TEU feeder vessel Containerships Nord will be followed by three more gas-fuelled ships, scheduled for delivery during H1 2019. There are also options for two more vessels. “By taking this decision, we accepted the challenge of building with a new technology. It has been a rewarding project full of learning opportunities,” said Containerships’ chief executive Kari-Pekka Laaksonen. Containerships’ LNG-concept involves more than just the vessel-side of the supply chain – it spreads out from sea to land, and the target is to create a complete, LNG-based doorto-door supply chain in Europe. In addition to LNG-powered vessels, the company is investing in LNG-fuelled trucks.

The vessel was classed by ABS. Summing up the main challenges and considerations of deploying LNG on this box ship, ABS regional business development manager Daniele Bottino told CST “Using LNG as fuel on non-gas carriers creates numerous challenges and for this series of container ships, the main ones included the location and arrangement of the LNG fuel tanks and the fuel gas supply system. Space on a small container ship is at a premium so locating the fuel tanks and fuel gas supply systems to minimise the impact on the vessel’s cargo capacity and operations is important.” In this case, the vessel is designed to transport containers holding numerous types of cargo and the fleet will operate in the Baltic Sea, where Finnish and Swedish ice navigation guidelines are applicable. Another challenge was that building a ship with LNG as fuel was a new endeavour for the chosen shipyard. Mr Bottino commented “With interest in LNG as fuel growing, many yards have entered this sector with limited expertise in working with complex gas and cryogenic systems. For ABS, this required a more proactive approach than the typical supervisory role of class, helping the yard to understand the key design and construction challenges.”

Shell is supply the LNG for Containerships’ LNG vessels via ship-to-ship bunkering at the Port of Rotterdam

Container Shipping & Trade | 1st Quarter 2019

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NEWBUILD PROFILE | 15

He said the vessel was designed with a fuel gas handling room rather than the conventional tank connection space, with fabrication and welding completed on board during construction by the yard under the supervision of the vendor’s service engineer.

Engines a ‘perfect match’

control system. “This was not in our scope but when doing this project there were a lot of discussions with stakeholders including the remote-control system maker (Nabtesco) and TGE Marine from a technical and safety concept point of view as the system must be very safely designed and operated.” Highlighting the major challenge of the technical construction of the ship, Mr Rahja said “The big issue is always where to install the gas tanks and system – the engine itself is not a big difference from a conventional diesel engine.”

Gas fuel supply considerations

WinGD’s 7RT-FLEX-50DF engine on board: its optimisation was critical to the success of the project (credit: WinGD)

Containerships’ vessel deploys WinGD’s 7RT-FLEX-50DF engines, with an MCR of 10,080 kW x 124 rpm. WinGD also provided the gas valve unit and other hardware associated with the engines. WinGD general manager warranty and projects operation Erkki Rahja explained that the project was first discussed about five years ago. “Containerships wanted to reduce emissions in the entire logistics chain,” he said. WinGD’s engines were seen as a “perfect match” for the project. “When we first discussed this in 2014, the two-stroke dualfuel engine was a new concept and idea and the engine only existed in the test bed at that time. Therefore, the challenge was to get the engine performance optimised, that was critical to make a success of this project.” In 2016, WinGD’s first dual-fuel engine entered commercial operation. “This proved that the concept was going to work very well for Containerships, too,” said Mr Rahja. Containerships Nord is the first instance where WinGD’s LNG dual-fuel two-stroke engine is installed. It is also going to install the ‘big brother’ X92DF-engine of 50DF on CMA CGM’s gas-fuelled ultra large container ships. Control of the gas feeding engine is through a remote-

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TGE Marine scooped the contract to provide the gas tanks and gas fuel supply solution. TGE Marine sales engineer and LNG technology specialist Max Liese explained that three Type C tanks were placed vertically, with the gas plant placed on top of these. Mr Liese explained “This is the arrangement that gives the highest volume efficiency. With Type C tanks the issue is that volume efficiency is challenging due to their roundish shape – the tanks have to be very well integrated integrated into the hull form, which has been very well achived with vertical tanks of this container vessel.” The benefit of using type C tanks is their pressure is above atmospheric, as opposed to prismatic tanks. Mr Liese explained “That means that if gas pressure increases you can wait and give time for the boil of gas to evolve, there is no need to carry out any actions to release the boil of gas.” By contrast, in a prismatic tank, the gas pressure will reach a certain threshold and then action needs to be taken. Mr Liese said of a type C tank: “From an operational point of view it is very smooth – the big advantage comes when bunkering. When bunkering a type C tank, the pump pushes LNG into the tank and if that is done fast the pressure increase is quite fast due to heat coming from the hoses. But the pressure increase is simply handled as Type C allows you to increase the pressure in the tank. If you have a prismatic tank with a maximum design pressure of 700 millibars, which is slightly above atmospheric pressure, you have to take care of the bunker process, this reduces bunkering speed and increases time spent bunkering as crew have to reduce bunker velocity and ensure that the pressure does not increase too much.” Mr Liese said the interface between the dual-fuel engines and gas supply system has been adapted in the engineering phase based on experience gained by WinGD on the testbed. A “lot of work was invested with WinGD to optimise that interface”, which worked well in operations. The vessel will operate on LNG but the dual-fuel concept will provide safe return to port and some redundancies in the system. However, Mr Liese pointed out that the gas supply system also has redundancies including boil off gas compressors, while each tank has a pump, so if one pump fails the other can be used to push LNG from one tank to another. Mr Liese said “There are possibilities to run the LNG system even if there are failures in it. But if the entire fuel gas system fails you always have back up to use oil instead of

Container Shipping & Trade | 1st Quarter 2019


16 | NEWBUILD PROFILE

LNG for propulsion.” The safety measures in the gas engineroom include gas detectors that can close tanks and sections of the gas supply to try and detect and repair the leakage, and which can lead to emergency shutdown if needed, as well as fire detectors. These were provided by TGE. Drip trays are placed under certain connection points designed to catch LNG if there is leakage, for example at the position of a flange. Mr Liese added “The trays are equipped with temperature sensors and so once a temperature drops below a certain level you know there is a leakage and you can release emergency shutdown.” LNG cannot touch normal steel so the trays are constructed from stainless steel that can endure the low temperatures of LNG. TGE supervised the tank and gas supply system installation at Wenchong shipyard, observed the precommissioning and was present at the sea trials. Mr Liese said “We spent a lot of time during precommissioning testing all parts of the fuel gas system, explaining our system and doing onboard training for crew.”

operations of the vessel, and bunkering operations. He said “These studies cover the risk of gas and cryogenic releases in the engineroom as well as in the cargo area of the vessel. For container ships, one of the key challenges is congestion of the cargo area, which is stacked with containers. Special consideration must be given to locating and routeing the fuel gas supply systems and bunkering areas as well as the location of any tank vents and safety vents.”

LNG safety focus

Energy efficiency elsewhere

Mr Bottino opened up on the safety considerations. The IMO’s Code for Gas Fuelled Ships (the IGF Code) requires risk assessments to be performed and typically a hazard identification (HAZID) supported by gas dispersion analysis and fire risk assessment. Containerships’ new vessels are designed and are being constructed in accordance with IMO resolution MSC.285(86) 'Interim Guidelines on Safety for Natural Gas Fuelled engine Installations in Ships', which requires a risk assessment for each specific project. “The interim guidelines require a more thorough risk assessment for the whole design than the IGF Code, since the IGF Code limits the risk assessment requirement to items that are not specifically described within its requirements,” said Mr Bottino. The scope of the HAZID included the design and

A 3D view of TGE Marine’s tanks, which were placed vertically to gve the highest volume efficiency (credit: TGE Marine)

Container Shipping & Trade | 1st Quarter 2019

Space on a small container ship is at a premium, so locating the fuel tanks and fuel gas supply systems to minimise the impact on the vessel’s cargo capacity and operations is important” Daniele Bottino (ABS)

Wärtsilä provided one auxiliary engine genset (sixcylinder in-line Wärtsila 20DF dual fuel), one controllable pitch propeller, type Wärtsilä E1415and one PTO Wärtsilä shaft generator. Indeed, it is not just using LNG that makes the vessel extremely energy efficient. The hullform was optimised through CFD calculations, with tank tests carried out by SVA Potsdam in Germany. Energy saving measures include a Becker full spade twisted rudder with rudder bulb. The Containerships vessel also features a shaft generator with a controllable pitch propeller to supply the ship’s power while the main engine is running. Mr Bottino said “The shaft generator is fitted at the output side of the main engine so that whenever the main engine is running to drive the propulsion shafting, the shaft generator can produce supplementary electrical power for use on board. As a result, the use of auxiliary engines can be minimised, reducing overall fuel consumption and operating costs.” The Ice-class 1A ship has high cargo carrying flexibility, mixing the loading of 20 ft, 40 ft and 45 ft containers. As part of the agreement signed by Containerships and Shell, Shell will supply the LNG for Containerships’ LNG vessels via ship-to-ship bunkering at the Port of Rotterdam. All the newbuilds will be bunkered by Shell bunker vessels, including Cardissa. The bunkering will be carried out at a normal operational berth simultaneously with loading and discharging operations. This means no disadvantages in operative efficiency will occur compared to traditional oil burning vessels. Containerships is the first container shipping line in Europe to have carried out ship-to-ship bunkering with LNG as the fuel. CST

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Sulphur Cap 2020 Conference | Awards | Exhibition 8-9 May 2019, Amsterdam

Information critical in countdown to 2020 In less than 10 months’ time a once-in-a-generation regulatory change will shift most of the global fleet onto entirely new fuels, about which little is yet known. Others will have to look to technologies that have so far played only a small role in the maritime sector. For the well-informed shipowner or operator, IMO’s global sulphur cap is an opportunity as well as a challenge. The challenge remains the selection of the appropriate compliance method and the preparation of fleet, crew and ancillary functions. Opportunities include improving the cost base relative to competitors, investing in efficient new technologies and processes and safeguarding the fleet against future environmental regulation.

The European Sulphur Cap 2020 Conference aims to shed light on these opportunities, addressing: • Which compliance option for which vessel and trade • What your crew needs to know about low-sulphur blends • How availability and pricing of low-sulphur fuel will affect uptake and operations • When a scrubber is a good choice for your vessel or fleet • How to tackle the challenges of scrubber financing, installation and maintenance • How growing availability and lower capex demands are driving LNG uptake • Why advances in gas-fuelled technology are driving today’s engine developments • How your chosen compliance method will affect your ship engines, machinery and technical operations • Why the 2020 sulphur cap offers a path to compliance with future environmental regulation. Book your place online today at www.sulphurcap2020.com/book-now or for more information please contact Tom Kenny on +44 20 8370 7791 or at tom.kenny@rivieramm.com

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PORT AND SHIP PRODUCTIVITY | 19

Productivity for box ports and ships gains momentum New initiatives and innovative solutions are increasing the efficiency of cargo operations

The integration between Navis’ MACS3 and XVELA enables cargo stowage plans to be viewed by both crew and terminal operators, which increases vessel productivity at the port (credit: Navis)

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ort and vessel efficiency have been boosted by recent industry initiatives and cargo stowage innovations. The Port Call Optimization International Taskforce, which represents shipping, ports, suppliers of navigation, terminal operating and blockchain systems and representatives of international maritime organisations, has made strides in its aims to boost just-in-time arrivals which will have a knock-on effect on port productivity. Consensus was reached on global data standards for port call data at a workshop held by the Taskforce in December 2018. Two clauses are being created to incentivise information sharing regarding vessel arrival times and the

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potential ability for shipowners to adjust speed to suit the arrival time. This incentive would use a common-use traffic management system built around shared benefits for on-time arrival at the port prior to berthing. The International Association of Ports and Harbors (IAPH) is supporting the initiative and spreading its work to the wider port network via the 170 ports that are part of the association. IAPH managing director of policy and strategy Dr Patrick Verhoeven told Container Shipping & Trade “We are the voice of what this group of technical experts are doing and communicate to IMO and others.” In March 2018, IAPH launched the World Ports Sustainability Programme and, Dr Verhoeven said,

also supported initiatives such as Port Call Optimization which have a “big sustainability impact.” “Port call optimisation and improved port productivity have an impact on safety and the environment as well as on efficiency, so we decided to endorse this task force.” Explaining the work of the taskforce, he said “They are looking at standardising communications between ship and shore about berth availability – port efficiency will be gained if all parties work in a more standardised process. And this reduces emissions, which is where we come in with the sustainability angle. “The first thing the taskforce did was to look at the contractual arrangements between the port and the ship – there are a huge amount of parties involved in port calls and they mapped that out, which is amazing if you look at the complexity. Each element in that puzzle has the potential to be more efficient. They now want to work towards standardised communications between ship and shore and early notification between berth, stowage and pilots.” The taskforce involves eight ports: Rotterdam, Singapore, Gothenburg, Algeciras, Busan, Houston, Ningbo and Tangier Med, while on the carrier side Maersk, CMA CGM and MSC are members, as is shipping agent Inchcape. Dr Verhoeven pointed out that another link is to connect to the work of IMO. “IMO set up a global alliance to reduce greenhouse gas emissions, and port call optimisation is where you can reduce the emissions of a ship. If a ship has to wait a long time, they produce emissions, so the quicker the ship gets in and out of work, the less emissions they produce.” Singling out the importance of port

Container Shipping & Trade | 1st Quarter 2019


20 | PORT AND SHIP PRODUCTIVITY

productivity, Dr Verhoeven said “All ports are trying to find ways to increase productivity. The taskforce is mainly talking about the ship-to-shore element, but there are other areas to look at, like hinterland connections.” He said that many of IAPH’s members are port authorities, which only have an indirect influence on gate productivity. But he pointed out that port authorities can provide incentives to make sure the terminal operators leasing their land are using it in the most optimal and efficient way. IAPH is also involved in other port efficiency programmes. It is delivering a workshop to 50 ports in March this year in Geneva which will tie in with United Nations’ 17 sustainable goals. Dr Verhoeven said “We are looking at what this means for ports and where they can help through opportunities including digitalisation. Productivity is a big part of the story – the more productive, the better the positive impact on the environment and the more you can create welfare for the community.” Another port operator working on boosting productivity is DP World. DP World and industrial engineering specialist SMS group’s joint venture has developed a new technology they say will ‘revolutionise’ the way that containers are handled in ports. The joint venture chief executive Dr Mathias Dobner said “Our system will significantly increase the productivity of handling ships on the quay. This means that quay walls can be shortened by a third. [It] will greatly improve the financial performance of container ports and their overall appearance.” The High Bay Storage system was originally developed by SMS group subsidiary AMOVA for round-the-clock handling of metal coils that weigh as much as 50 tonnes each in racks as high as 50 m. And AMOVA is the first company to transfer the proven technology to the port industry. Instead of stacking containers directly on top of each other, which has been global standard practice for decades, the system places each container in

Container Shipping & Trade | 1st Quarter 2019

Navis’ computer loading screen shot shows RSCS+ on a particular leg of an AsiaEurope route. The maximum wave height is 4 m and so transversal acceleration reduction will be 0.7

an individual rack compartment. Containers are stored in an 11-storey rack, creating 200% more capacity than a conventional container terminal, effectively enabling the same storage capacity in less than a third of the space. Thanks to the rack’s design, each container can be accessed without moving another one. DP World said that costs are further cut by the ability to shorten the time taken to load and unload mega-ships by as much as 30%. The new, intelligent container storage system will be applied for the first time ever at Jebel Ali Terminal 4, in time for the Dubai Expo 2020 world fair.

Cargo stowage progress

Productivity measures are being taken not just in port, but also on the vessel. The number of existing container vessels undergoing retrofits of their cargo stowage systems has increased as operators seek to monetise their ships and so boost the amount of cargo stowed. To this end, MacGregor has noticed a “big boom” in helping customers increase payload capacity, earning potential and the operational safety of their vessels by retrofitting them with innovative solutions to improve the number of containers that can

be carried on board and a vessel’s container carrying flexibility; each boosting the earning capabilities of the ship. So far, MacGregor has retrofitted 100 container ships varying in sizes from 6,800 TEU to 19,200 TEU. A holistic approach is at the heart of MacGregor’s Cargo Boost service, which improves the earning potential of existing box ships. The company offers a MacGregor Cargo Boost service, part of its PlusPartner concept, which is designed to improve the earning potential of existing container ships. The upgrades include an individual plan for each vessel, with a focus on improving earning potential and efficiency and decreasing emissions per transported unit. At the heart of the system is the cargo handling arrangement, which must be looked at holistically along with all the elements of the system – the lashing bridge, lashing system and hatch covers – to create the most efficient and effective cargo system. Recent projects include several Cargo Boost applications. Late 2017 and early last year MacGregor carried out its Cargo Boost service on 11 10,000 TEU container vessels owned by Seaspan, known as ‘SAVER 10000s’.

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PORT AND SHIP PRODUCTIVITY | 21

MacGregor also used its Cargo Boost service on systems on board seven Hapag-Lloyd C-class Samsung 9,300 TEU series container vessels in 2018. A key factor was to allow for higher stack weights for 40 ft containers; a sector identified as holding some revenue potential. Indeed, MacGregor senior naval architect Kari Tirkkonen highlighted this as a growing trend. He said that the company has been developing solutions for improving cargo efficiency, including an invention that enables the ships to carry a mix of 20 ft boxes and 40 ft boxes together. Previously they would be carried in separate slots. “More and more 40 ft containers are being carried, especially high cubes, and this has created pressure for cargo systems to be retrofitted to allow the carriage of high cubes/40 ft containers.”

Holistic approach

Using a holistic approach is also applied to newbuilds. Mr Tirkkonen said the loading system for each vessel should be planned before the building stage to get the best possible configuration. “To create the best possible arrangements for each vessel, lashing bridges, hatch covers and lashing systems each need to be configured into the system as a whole,” said Mr Tirkkonen. As well as creating more opportunities for ships to increase their earning potential, loading and unloading in port is also easier. “If the cargo carrying capabilities of a ship are more flexible, then you can reduce restowage and moves when in port. If the cargo is not stowed flexibly enough then it might have to be restowed during loading/unloading, which is inefficient and time-consuming.” One point that MacGregor is keen to highlight is that for the cargo stowage system to be as efficient as possible, the crew on board and the personnel ashore using it “really need to understand how to use it.” MacGregor master mariner Tero Sairanen said “Crew and cargo planners must be trained by MacGregor so that they can use the system properly, explain

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to other personnel how to operate it and use it wisely to get the maximum benefit from it. If it is not understood by the people using it or if they use their own rules and restrictions, they could downgrade the vessel’s actual container capacity. We also offer online training.”

Route specific rules boost efficiency

Onboard loading computers are applying increasingly stringent and specific lashing rules for the route the ship is sailing on, leading to an increase in safety and more flexibility in creating cargo loading plans. Navis product manager for MACS3 Gerald Lange said “Route specific and weather specific lashing rules allow reduced limiting accelerations, increasing cargo intake and flexibility in container stowage.” As part of this he singled out a trend for new container lashing geometries to be applied in cargo securing systems and to be calculated on loading computers. He summed up “We are at the forefront of developments with MACS3 and there has been a lot of progress in the rules in the last few years – Route Specific Container Stowage + (RSCS+) is one of changes that we have worked on.” At SMM in September 2018, Navis launched DNV GL’s latest lashing

Dr Patrick Verhoeven (IAPH): “In all ways port efficiency will be gained if all parties work in a more standardised process”

regulation option RSCS+ on its loading computer MACS3 – and this has been launched on a Claus-Peter Offen container vessel. In Q4 last year, Navis’ ship-specific MACS3 Sealash module on board the 8,000 TEU container vessel was approved by DNV GL. The vessel, owned and managed by Hamburgbased Offen group, is now able to apply the latest update of RSCS+ lashing regulations from DNV GL, July 2018 edition. The update allows the maximum theoretical capacity for this vessel to increase by approximately 5%. As part of the upgrade in RSCS+, vessels can now access the DNV GL webpage for worldwide routes without additional approval from class. Using the class-approved lashing computer, the cargo officer can now choose between calculations for longhaul routes and shortsea voyages as part of RSCS+. As a result, more cargo can be safely loaded on the vessels based on its typical trade pattern and weather forecast for shortsea voyages. Mr Lange said “In short voyage mode a reduction factor given by the rule can be applied if a weather forecast with a maximum wave height is available, and based on this in the lashing calculation to gain more flexibility in stowing containers, allowing heavier cargo to be placed higher in the stack.” A major focus for Navis is the integration between its MACS3 onboard loading computer and its XVELA planning and collaboration platform to find the best possible loading and unloading plan. XVELA vice president global sales Martin Bardi said “The integration between MACS3 and XVELA allows the terminal to validate stowage plans by using the same criteria as the ship’s crew.” Allowing the plans to be viewed by both crew and the terminal operators “reduces the number of iterations it traditionally takes to get plans approved by the ship captain. This increases ship productivity at port.” More than 50% of box ships are using MACS3, and major liners like CMA CGM are working with Stowman Navis for stowage planning. CST

Container Shipping & Trade | 1st Quarter 2019


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HullWiper poised for growth Stricter environmental legislation and the role of a clean hull in saving bunker fuel costs, look set to combine with HullWiper Ltd’s expansion plans to propel its services further within the container ship sector

Using remotely operated vehicles means that HullWiper can carry out cleaning while the ships are carrying out cargo operations in port

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ullWiper is primed to play an ever-greater role due to sharpening focus on the issues of biofouling and invasive species, thanks to its ability to get to the root of these problems and contribute to the reduction of CO2 emissions. These are hot topics for the marine industry, evidenced by the launch of the GloFouling Partnership in November 2018. A collaboration between the Global Environment Facility, United Nations Development Programme and IMO, the five-year project focuses on implementing IMO Guidelines for the control and management of ships’ biofouling, which are currently voluntary. So far, 12 memberstates have volunteered to become drivers of the initiative. “What has been learned during the long implementation of the ballast water treatment directive is that biofouling on the hull and

in the hard to reach niche areas such as the sea chests is where the biggest risk of invasive species come from,” says HullWiper general manager Laurance Langdon. “Once an invasive species enters a new location, it can do billions of dollars-worth of damage to a country’s waters and industry.” There are three main issues at stake: invasive species, biofouling and the associated CO2 carbon emissions – the latter of particular significance as the maritime industry faces a 2050 deadline to halve its carbon emissions. If a ship is traveling with a dirty hull, this creates resistance. 1% resistance on a ship hull can lead to 3-5% extra fuel burning just to maintain the same speed, which contributes to the contribution of CO2 output.


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Mr Langdon emphasises the importance of getting to the root cause of invasive species and associated rise in CO2 emissions: “That root cause is biofouling that has been allowed to grow on vessels’ hulls.” That is where HullWiper steps in. If ship owners clean their vessels regularly, using a ROV technology like HullWiper, which causes no damage to hull-coating paint, the vessel’s performance is going to be similar as its first day on the water. Unlike traditional hull cleaning methods using divers with brushes, HullWiper’s Remotely Operated Vehicle (ROV) removes fouling with adjustable pressure sea water jets and collects it using special filters onboard the ROV, for safe disposal onshore, rather than release it into the water. In that way, the risk of crossspecies contamination and heavy metals from the coating entering the water is eliminated. “It is an inexpensive solution that can be picked up right away,” says Mr Langdon. “In some ways we are already aligned with the new regulations that are coming in to play.” HullWiper offers other cost saving benefits in addition to reducing CO2 emissions: it has almost no impact on the coating, minimises hull resistance for improved fuel efficiency, reduces expensive coating repairs and extends the time between cleans and between dry dockings.

Extending its presence

In November 2018, HullWiper launched services for vessels transiting the Strait of Gibraltar, in partnership with underwater services company SCAMP. The Port of Gibraltar’s strategic location serves as one of the Mediterranean’s largest bunker bases and is an important supply point for ships travelling eastwards through the Suez Canal. The company is expanding its geographical presence with the addition in April this year of two new locations: Port Louis in Mauritius and the Panama Canal. St Louis port offers benefits for ship operators. Mauritius sees a lot of vessels passing from South America or West Africa around the Cape of Good Hope, before heading to Asia. Cleaning can be done at anchorage, as the channels are deep enough. By eliminating the need to go into port to carry out cleaning and with 24/7 operations because no divers, there are significant cost savings to be made. HullWiper is also slated to start on the Atlantic side of the Panama Canal, in Balboa, with the Pacific side of the canal lined up for the future. It is a key location offering strong advantages for container ships. As the key transit point for vessels sailing between the Atlantic and Pacific Oceans, the Panama Canal is a main gateway to trade. “There is a prime bottleneck in the Panama as there are a lot of ships waiting to transit the Canal,” says Mr Langdon. “We can clean them while they wait, day or night.” The addition of Mauritius and Panama bring HullWiper’s network of hub locations to 10. It all started in 2013, in Jebel Ali, Dubai, and then expanded to Sweden, Singapore, Spain, Denmark, Norway, Egypt, Australia and Gibraltar. The system is also available on an ad hoc basis at other key locations across the Middle East. There are more plans to expand further and the company hopes to add another two locations over the next year. It operates a global lease network to provide its services.

Mr Langdon says “We look for the right kind of lease partner who will have the local knowledge and focus both on shore and subsea. For example, both the companies that have joined the network in Panama (subsea services provider Talleres Industriales) and Mauritius (leading diving company Immersub) have been well established for many years. They are well-respected and all the ship owners know them and use them for other services.”

Saving money

Flexibility is another of HullWiper’s benefits. As it does not use divers, cleaning can be performed 24/7, while the ships are carrying out cargo operations in port, allowing container vessels to stick to the strict timetables of their routes. As Mr Langdon explains, it is all part of HullWiper’s operandimodus centred on saving ship operators money.

Serving container shipping

HullWiper has an important role within the container ship sector. Since it first launched in Dubai, HullWiper has had a fleet contract with Maersk Line. The company also has fleet agreements with CMA CGM and Hapag-Lloyd, as well as other major container shipping lines. Its growth is set to expand as it increases its presence and as environmental legislation becomes stricter. Mr Landon sums up “Our growth will be organic through different locations and changing regulations. The message we want to get across is that we are available now and are a significant cost saving in the world of ship operations and contribute to the safety of divers, and the environment.” To see what HullWiper can do for you and your fleet, go to www.hullwiper.co

HullWiper minimises hull resistance for improved fuel efficiency and extends the time between dry dockings


24 | CLASS SOCIETIES

Class drives LNG fuel and digitalisation developments

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ontainer ship owners will increasingly turn to gas as fuel for their newbuildings as more LNG supply infrastructure comes online and the operational benefits are recognised. Classification societies will be at the forefront of aiding owners in their choice of fuel and providing advice through design, construction and operation of these gas-fuelled container liners and feeders. This was demonstrated when CMA CGM selected Bureau Veritas to class the new series of LNG-fuelled 22,000 TEU container ships that are being built at China State Shipbuilding Corp, with seven to be delivered in 2020 and two in 2021. These will be the first ultra large container ships to be powered by dual-fuel LNG and will drive other

Class societies take the lead in boosting box ship LNG take up, digitalisation and stowage efficiency

owners to consider LNG, said Bureau Veritas’ newly appointed executive vice president in charge of marine and offshore Matthieu de Tugny. Bureau Veritas was involved in this project from its inception. It aided owner, containment system designer GTT and shipbuilder to ensure requirements for safely using LNG were addressed. “It takes time to approve these designs and innovation in using LNG as fuel,” said Mr de Tugny.

DNV GL tested its Modern Deck Container Stowage solution – which will lead to higher flexibility of load distribution in the container stack – at Pella Sietas shipyard in Hamburg (Credit: DNV GL)

Container Shipping & Trade | 1st Quarter 2019

He highlighted how this project also breaks new ground in terms of scale and schedule. “This is a nine-ship project and all are to be built in just two years,” he said. One of the challenges is incorporating enough onboard LNG storage for cross-ocean voyages. Each of these ships will have 18,600 m3 capacity membrane-type tanks, which is higher than has previously been required for LNG-fuelled ships. Even though LNG is perceived as a new fuel for the container ship sector, in the long-term other fuels could be introduced to ensure the industry can attempt to meet IMO’s aspirations to cut carbon emissions in 2030 and 2050. Bureau Veritas marine marketing and sales director Gijsbert de Jong thinks LNG is one of the fuel pathways that shipowners could follow in the future. “LNG could be a stepping-stone to developing non-carbon based fuels,” he said, adding that these could include hydrogen and ammonia-based fuels. Other technology under consideration includes turning back to sails to harness wind power and using energy storage devices for hybrid propulsion. “We need to consider different propulsion, such as fuel cells, hydrogen, ammonia and biofuels,” Mr de Jong said. “We are doing pilot projects to get a regulatory framework ready for these developments.” Lloyd's Register has also highlighted using LNG as one of three main areas that container ship owners/ operators are interested in when it comes to newbuild container projects. LR global cyber TFT manager and deputy manager for Busan technical support office Sung-Gu Park said “The first is capability to use LNG as

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CLASS SOCIETIES | 25

fuel, which we are seeing more and more and on larger-sized container ships. We are working with one major shipyard and a major owner in South Korea to develop a 15,000 TEU ULCS (ultra large container ship) newbuild, which will be the first ULCS to adopt a Type B LNG tank (it will be located under the accommodation block).” LR assessed the LNG fuel system to ensure its safe operation, robustness, reliability, and has provided technical services to the operator to help them understand the gas bunkering procedure and compatibility with LNG bunkering vessels. The second is operational efficiency. This is related to hull form, propeller, rudder and other appendages, including energy saving device additions. Mr Park said “LR is delivering technical services for optimised hull and appendages that in return offers fuel consumption performance that will allow ships to stay on charter profitably, with new operational conditions. In addition, cargo intake optimisation needs to be considered for commercial benefit, looking at the length of the voyage and the duration of the cargo planning prior to departure, in combination with the limited validity of weather forecasts.”

Digitalisation future

Class societies are also at the forefront of maritime digitalisation. Mr Park said this was the third top priority for container newbuilds. “A decrease in the number of skilled industry professionals is accelerating the move towards autonomous ships and the number of crew members on board an ULCS for example, does not proportionally increase when compared with a relatively small container ship,” he said. “Furthermore, we know that labour and costs are key factors driving this pace of change. Substantial improvements in operational efficiency and safety are possible through enhanced monitoring, communication interconnectivity of equipment and assets. Therefore, major shipyards and

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Matthieu de Tugny (Bureau Veritas) Prior to his appointment as executive vice president of the Bureau Veritas Marine & Offshore Division, Matthieu de Tugny was senior vice president and chief operations officer of the division. He joined Bureau Veritas in 1994 as a design review engineer. In successive appointments and promotions he has worked in South Korea, the US, Singapore and France. He has led technical, operations, marketing and sales, offshore and marine teams and regions. Mr de Tugny graduated from Ecole Nationale de la Marine Marchande, France with a dual purpose officer's diploma and he holds a Master’s degree in electrical engineering from Ecole Supérieure d’Electricité.

owners have developed their own digital ship solutions. However, the increased blurring of software, hardware and interconnectivity also brings new challenges which need to be assessed through our cyber security services. We are working with a major owner and yard in South Korea for 23,000 TEU container ship newbuilds that will be certified to our descriptive note, accessibility level 3 (Digital SAFE AL3).” BV’s Mr de Tugny thinks societies need to embrace digital technologies to improve ship inspections, ship construction and cyber-proof IT systems. He highlighted how shipping needs digitalised classification services to optimise operations and improve ship construction. “If we don’t invest in digitalisation we will not survive, as this is part of the industry’s transformation,” said Mr de Tugny. He outlined how Bureau Veritas had developed an end-to-end digital platform for shipowners, surveyors, shipmanagers and vessel operators to use for multiple class applications and services. For example, shipowners can use a mobile device application to request class surveys and use smart checklists to prepare vessels for port state control inspections. Owners can use Veristar to manage fleet readiness and compliance. Surveyors can use another Bureau Veritas’ digital application for producing class reports and issuing e-certificates. Mr de Tugny explained how Bureau Veritas had developed cyber-related vessel notations and guidance and invested in advanced 3D modelling and computational fluid dynamics software to test ship designs against expected wind forces. These 3D models can include class comments and be used by shipyards to improve vessel construction. “Clients can benefit from these models for better visualisation of ships as there can be discrepancies between 2D design drawings and shipbuilding,” said Mr Tugny. Bureau Veritas is also developing methods of using drones with cameras and sensors to inspect ships. It is recruiting teams of IT and cyber

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26 | CLASS SOCIETIES

security experts to ensure its own systems are secure and shipowners are cyber-ready. The class society has introduced notations for ships it considers cyber secure and safe. These are required for cyber performance, which includes having remote access and control for condition-based maintenance, measuring fuel consumption and optimising routes and uptime of vessels. Future developments will include adopting blockchain programs and further levels of autonomous vessel operations, said Mr Tugny. Classification societies need to be at the centre and front of these projects to ensure they meet regulatory and safety requirements for the future.

Software for bigger ships

Elsewhere, DNV GL has made changes to its Stowlash container stowage software, to take into account the fact that, as box ships get bigger, they have more container stacks than before. DNV GL director of business development in Hamburg and executive vice president Jan-Olaf Probst explains: “Container vessels are getting bigger and so operators want to store containers up to 11 or 12 tiers. Therefore, container stacks [exhibit] a totally different behaviour [to when stacks were lower]. Until recently, the first two or three containers on the top of 11 stacks been mostly empty, depending on the loading of the vessel. But vessels do not want to carry empty containers, they want cargo. To achieve this, we need more accurate calculations.” As vessels have increased in size, so cargo-securing techniques have evolved as well to cope with the added scale. DNV GL pointed out in its latest Container Ship Update that over the past five years, external lashing has become a “quasi-standard”, especially on larger vessels, because it allows operators to transport greater weights. To address such changes, DNV GL launched its “Modern Deck Container Stowage” (MDCS) solution, which led to the development of a new StowLash software, which uses the ‘finite

Container Shipping & Trade | 1st Quarter 2019

elements’ method to calculate the forces acting upon the containers and lashing equipment. Mr Probst says this is the first time the non-linear and three-dimensional behaviour of container stack has been considered in stowage software. DNV GL tested the results at the Pella Sietas shipyard in Hamburg, where six 40-foot-high cube containers were stacked on top of each other. Steel cables were attached to put a tensile load on the stack, then released in a controlled condition to simulate the rolling of a stack. Instruments arranged around the container stack measured the forces and deflections acting on it. DNV GL said that the updated software is suitable for calculating both internal and external lashing systems. Innovations in lashing equipment can also be calculated appropriately. For example, the new software allows users to define the type of twist-lock being used, and the new computation model accounts for the fact that lashing rods transfer only tension and not compression forces. Mr Probst explained the updated software will provide shipowners with “higher flexibility of load

Jan-Olaf Probst (DNV GL): The nonlinear and three-dimensional behaviour of container stacks are now considered in stowage software

distribution in the container stack.” The new Stowlash 3D software and related rules will take effect in March 2019. In October 2018, Korean Register (KR) released the latest version of SeaTrust-LS, its container securing strength assessment software. KR said that SeaTrust-LS has been significantly enhanced by incorporating KR’s new 2018 guidance for container securing assessment and reflects practical insights and feedback from worldclass lashing makers, SEC Bremen and German Lashing Robert Böck. KR pointed out that optimal container stowage and arrangement is “more critical than ever” as the trend for ever-larger container ships persists – with ULCS now carrying stacks of 10 or more container tiers on deck. This year, KR revised its guidance for container stowage and lashing by conducting ship motion analysis for different sizes of container ships from 1,000 TEU up to 23,000 TEU. Analysis included optimising accelerations, nonlinear analysis for calculating accurate external lashing forces, and CFD analysis under various scenarios relating to reasonable wind forces. The latest version of SeaTrust-LS contains all revisions of this latest guidance. The new SeaTrust-LS applies the semi-nonlinear calculation method to consider the twistlock separation effect of external lashing. This ensures safely securing external lashing and faster computing time for lashing strength assessment. The software provides a range of useful features, including calculating optimal acceleration and wind force, together with 13 route reduction factors enabling container ships to maximise their cargo capacities while ensuring the safety of the ships themselves. SeaTrust-LS also includes a feature to identify maximum cargo capacity automatically. This assists users to optimise design stack weight, lashing and the container stowage arrangement, enabling operators to select the best stowage arrangements under specified allowable targets. CST

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28 | DIGITALISATION

Digitalisation: port calls, box repositioning and blockchain The latest digitalisation solutions range from start-ups that can help container carriers with container repositioning, to Maersk’s and IBM’s blockchain platform

CargoMate predicts the earliest time a ship can leave port, leading to large fuel savings

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he latest digitalisation offerings help container carriers to save costs and boost port and container repositioning efficiencies. Online marketplace Container xChange was launched in 2015 to allow empty containers to be repositioned and empty boxes interchanged using a digital platform. It was set up to help deal with the challenges of repositioning containers. Container xChange founder and managing director Christian Roeloffs said “More than 200M containers are being moved every year with one-third being moved empty.” This costs the industry up to US$20Bn a year, and for a typical carrier, repositioning costs represent 5% to 8% of total operating costs. He said the average saving is US$200 to US$400 per interchanged container for container shipping lines, by avoiding transportation and terminal costs. This corresponds to potential annual savings per carrier of approximately US$350M to US$700M. The company is keen to emphasise that Container xChange is the world’s first online marketplace connecting users and suppliers of container equipment on a neutral platform.

Container Shipping & Trade | 1st Quarter 2019

It connects shipping lines, forwarders, container traders and leasing companies. Shipping lines can find partners on Container xChange that reposition their empty containers to where they are needed. Almost 300 members use Container xChange as their platform for container logistics on a daily basis. Mr Roeloffs said “Carriers especially value two things on Container xChange: they always find partners that use their containers if they have capacity and they always find containers in locations where their own liquidity is low or in cases where there is more demand than supply.” He highlighted how the demand and increased interest in digital solutions had led to a growth in interest in the platform. “Yes, we definitely see a growing demand because companies realise the need for digital solutions. Of course, because it is new and people are interested and have a fear of missing out but also because sometimes processes are so time-consuming, long and expensive that the industry is open for new inspiration to increase their profit margins and flexibility.” But he warned “There are concerns we see ourselves confronted with, especially trust. It is still a challenge for

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DIGITALISATION | 29

some companies to share their data with third party service providers and we think that is okay because it is a tough decision to share your data with someone else. That’s why we created a vetting and onboarding process to make sure we only have verified companies on our platform. We use publicly available customer references and have a detailed company profile as well as credit checks.” Mr Roeloffs said this is where being neutral was “the key to create trust… would you give away your data to one of your competitors? Without trust, we will not get updated information anymore and could close up shop.” He added “Our biggest differentiator to past industry efforts is that the owner of the equipment keeps full ownership and control of the containers. There is no share equipment pool or neutral instance which decides about someone’s equipment.” Another challenge is that shipping has traditionally been a relationship-based industry. “You want to know the person you work with, that makes sense. But as the shipping market is fragmented, we are not able to have offices everywhere in the world and need to rely on digital communications sometimes,” Mr Roeloffs said. The company tried to combat these issues through a strong customer service team, regularly scheduled video calls and a 24/7 service.

Boosting slow steaming cost savings

Port call efficiency is under the spotlight more than ever. According to research conducted by the EU-funded Sea Traffic Management Validation project, container ships incurred 71,202 hours of idle time at Europe’s major ocean-going ports in 2017. This represents an annual loss of €100M (US$113M) to the container sector alone. To tackle this issue, Intelligent Cargo Systems developed CargoMate, a port call optimisation system that predicts the earliest time a ship can sail, leading to large fuel savings. The company was launched two years ago. The first version of CargoMate was a mobile device to help ship officers log cargo operations in port as they happened and to calculate how long they would take. Intelligent Cargo Systems head of growth Nick Chubb said “The system collects all data while the ship is in port and makes predictions of the earliest time the ship can leave and displays this information to the fleet management department and the agent who co-ordinates the different departments. It was originally seen as a tool to help officers on board – which it does – but the added benefit is that if you save an hour in port, the ship can sail a little bit slower to the next port and save fuel. We want to be in the position where the smallest amount of time is spent in port so that vessels can sail as slowly as possible between ports.” Mr Chubb gave an example of fuel savings: an 8,000-TEU Panamax ship, sailing between Shanghai and Suez saving one hour in port translated to US$3,000 in bunkers saved and 21 tonnes of CO2 emissions saved.

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The company is working with one of the top five liner operators and is trialling its solution with another carrier. Intelligent Cargo Systems has just launched a free selfassessment – the Port Call Calculator – to help container ship fleet management teams to better understand how much port idle time is affecting their bunker consumption. The tool calculates a port call efficiency rating, with those scoring below 80% likely to be able to make significant bunker savings through process improvements and better use of technology. “As 2020 approaches, the need to make marginal efficiency gains across every area of vessel operations is increasing,” said Mr Chubb. “A staggering amount of fuel is currently being wasted across the world through poor port call efficiency. This tool gives ship operators a quick and easy way to understand the scale of the problem and some insight into what savings can be made through using port call optimisation technology.”

IT IS STILL A CHALLENGE FOR SOME COMPANIES TO SHARE THEIR DATA WITH THIRD PARTY SERVICE PROVIDERS AND WE THINK THAT IS OK BECAUSE IT IS A TOUGH DECISION TO SHARE YOUR DATA WITH SOMEONE ELSE” Christian Roeloffs (Container xChange) He highlighted the importance of incorporating time in ports into route optimisation. “You can optimise routes but if the vessel is stuck in port all that optimisation is lost – you need to have the full holistic performance to optimise routes.” Mr Chubb said port optimisation is a huge growth area and indeed, Intelligent Cargo Systems is part of the Port Call Optimization International Taskforce, which represents shipping, ports, suppliers of navigation, terminal operating and blockchain systems (see pages 19-21).

Blockchain enters box shipping

Elsewhere, Maersk and TradeLens have launched a new platform underpinned by blockchain technology. When the digital transformation is discussed, there are certain concepts that always come up. One of these is blockchain, the distributed ledger touted as a solution to many industrial and commercial challenges, with the maritime sector no exception. Massachusetts-based consultancy Boston Consulting Group (BCG) published a report on the potential impact of blockchain on the transport and logistics industry on 29 January that illustrates that while many executives believe blockchain will cause major changes to the sector, there is reticence to explore how these changes can be leveraged. 88% of executives surveyed by BCG said they thought

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30 | DIGITALISATION

blockchain would disrupt the industry, with 59% believing this will happen in the next two to five years. However, just 16% of respondents felt they had a clear understanding of blockchain and its implementations, and only 20% said their company ranks blockchain in its top 10 strategic priorities. 60% of the executives said a lack of co-ordination and the absence of an ecosystem were the main barriers to adoption. BCG partner and co-author of the report Andrew Schmahl said “By increasing transparency, blockchain can mitigate the mistrust that often exists within the [transport and logistics] industry’s multiparty transactions. “Yet this same mistrust makes it hard to bring together the industry’s diverse participants into a common blockchain ecosystem.” “To promote industry-wide adoption, each player needs to see how blockchain can create value by relieving the points of friction in its own operations,” said BCG partner and the report’s co-author, Camille Egloff. “Then, by working with suppliers, customers, and even

REPOSITIONING COSTS COUNTDOWN

The number of containers moved per year:

200M Empty containers:

One-third Cost to industry:

US$20Bn Of total operating costs for a carrier:

5-8% Saving per interchanged container:

US$200-$400 Annual savings per carrier:

US$350M-$700M Data: Container xChange

Container Shipping & Trade | 1st Quarter 2019

competitors, a company can understand and implement solutions that address its specific business needs,” she added. An example of what this might look like is Maersk and IBM’s blockchain-based supply chain tool TradeLens, which hit the market on 11 December 2018, just four months after it was officially announced in August 2018. TradeLens is designed to be a neutral, open platform underpinned by blockchain technology that facilitates the efficient, secure exchange of information. It comprises three layers. First is the business network, comprising parties such as shippers, freight forwarders, ports and terminals, carriers, government authorities and customs brokers, that have permission to connect to the platform and provide data. Next is the platform layer, which enables users to take advantage of the data, for example by tracking shipment-related events or sharing documents with partners. Then comes the applications and services layer: TradeLens incorporates a set of documented, open APIs to enable seamless access, for example through supply-chain management software, control towers, transportation management systems, enterprise resource planning systems and terminal operating systems. At present, more than 100 organisations are involved with TradeLens, including more than 60 network members comprising ocean carriers, inland carriers, 40 ports and terminals and eight customs authorities. Saudi Customs and IT partner Tabadul has integrated TradeLens with Fasah, Saudi Arabia’s national platform that connects parties involved in cross-border trade, in a blockchain pilot programme. The governmental authority responsible for the import and export of trade goods and associated services, Saudi Customs is heavily involved with achieving Saudi Arabia’s Vision 2030 goals to diversify the kingdom’s economy and attract investment. Saudi Customs’ governor Ahmed Alhakbani said “The pilot comes in line with our strategy that aims to facilitate trade and enhance security levels, while working to establish the kingdom as one of the world’s premier logistics hubs. “The recent pilot to link Fasah to the TradeLens platform clearly illustrates we are on the right track.” In Canada, both the Port of Montreal and Canada Border and Services Agency have signed up to TradeLens. Port of Montreal sees TradeLens as a means of enhancing its business intelligence to better plan and allocate resources based in inbound traffic and upstream visibility. The port is collaborating with Montreal Gateway Terminals, whose terminals receive Maersk vessels, on the project. Montreal Gateway Terminals will provide data on the movements of Maersk’s vessels and containers, which will be integrated into TradeLens to increase visibility of cargo movements in the port’s logistics chain. Maersk Canada president Jack Mahoney said “The Port of Montreal will be better able to control delivery and operation schedules, provide easier access to clearance and billing documents and bring greater fluidity, efficiency and transparency to international shipping.” CST

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BALLAST WATER MANAGEMENT SYSTEMS | 33

Choice of ballast water management systems expanding for container ship operators 2018 saw a record number of USCG type-approvals, but a recent change in the law could open the door to other systems

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or better or worse, US Coast Guard (USCG) type-approval is seen as the gold standard, even for those vessels that may never deballast in US waters. Fortunately, 2018 was a good year for typeapproval awards by the USCG, increasing the choice of ballast water management systems (BWMS) for those vessel operators. Altogether eight BWMS received USCG type-approval in 2018. The first was Techcross, which also became the first South Korean manufacturer to obtain USCG type-approval. Its Electro-Cleen System was granted the certificate on 5 June 2018, more than seven months after it submitted its application on 31 October 2017. That is the longest interval of any of the systems and in a statement Techcross director of sales and promotion Jay Lee acknowledged the approval process “took a little longer than we expected” but suggested this “might be due to USCG scrutinising the first application tested by KR [Korea Register of Shipping].” Shortly afterwards, Samsung of South Korea received USCG typeapproval for its Purimar filtration and electrolysis system. In June 2018 BIO-UV received type approval for its BIO-SEA B ultra-violet light based BWMS. Later in the year, at SMM in Hamburg, BIO-UV announced a new sales partnership with Asian distributor Rivertrace and the option

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to power up the system to zero holding hours, an important principle for vessels that spend relatively little time in port, reducing the interference of port operations. Speaking at SMM, BIO-SEA technical supervisor Adrien Carpentier said “All other systems were designed to meet IMO requirements, and later US Coast Guard requirements.” Achieving USGC type-approval might seem a relatively easy process to a ship equipment company the size of Wärtsilä, but it had to go through the same process as every other company. The Wärtsilä Aquarius electrochlorination ballast water management system utilises proven filtration and electro-chlorination technology, while maintaining a high degree of safety, operability and reliability. It ensures compliance with regulations, even with varying levels of water quality. Safety has been a fundamental consideration in the design, and hazard analyses aimed at eliminating installation and operational risks have supported its development. The Wärtsilä range of ballast water management systems are backed by Wärtsilä’s global service network. Wärtsilä also offers a ballast water management system using filtration and ultra-violet irradiation, which is still undergoing type-approval. The next BWMS to win typeapproval was Hyundai Heavy Industries’ HiBallast unit, which is a filtration and electrolysis system with a

OUT

CONTROLLER

BW MEASURING & MONITORING MODULE

MAGNETIC FLOW METER IN

BW SAMPLING PUMP BOS Natural Ballast system: A greener BWMS technology with a low power requirement

ALL OTHER SYSTEMS WERE DESIGNED TO MEET IMO REQUIREMENTS, AND LATER US COAST GUARD REQUIREMENTS” ADRIEN CARPENTER, BIO-SEA

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34 | BALLAST WATER MANAGEMENT SYSTEMS

capacity of 75-10,000 m3/hour. Attaining type-approval has handed a marketing advantage to those manufacturers that have achieved typeapproval, but a recent change in US law will bring USCG standards in line with those of IMO. Following a bipartisan agreement on language, the USCG Authorization Act with the attached Vessel Incidental Discharge Act (VIDA) was passed by the US Senate at the end of 2018. The implications of VIDA are many but essentially brings USCG typeapproval methodologies in line with those of IMO. This includes:

• VIDA contains language that allows that organisms that can no longer reproduce after ballast water treatment are not considered ‘living’. In other words, dead now also means unable to reproduce. • Under VIDA, the USCG is required to provide details on how it will test for reproduction in grow-out organisms. • The USCG must also consider the most probable number (MPN) methodologies for determining the number of organisms in treated ballast water. This reverses an earlier USCG ruling insisting on the alternate ‘vital stain’ method.

No one-size-fits-all for BWMSs With the new year well and truly upon us, there is no escaping the Ballast Water Management Convention (BWMC) deadline. The pressure for owners is palpable and with so many misconceptions surrounding ballast water management systems (BWMS), it’s no wonder shipowners are hesitating. Owners of all eligible vessels, be it container, tanker, bulk or cruise, are entitled to unbiased, factual advice from their BWMS suppliers in order to make the best decisions for their business. Scaremongering, price wars and misinformation could ultimately leave the shipowner noncompliant and spending again to fix an unsuitable BWMS. There is no one-size-fits-all for BWMS, and it would be remiss of any supplier to infer as such. For UV treatment systems – a suitable solution for many vessels, there are size, operating expenses, and accessibility factors to consider. Installation for full flow systems must be located on the main ballast line. Systems with a flexible footprint are able to circumnavigate many installation challenges with both UV and full flow electro-chlorination systems, allowing for a more flexible, streamlined process.

Container Shipping & Trade | 1st Quarter 2019

The change in language and the passage of VIDA through the Senate is a long-term boost to the ballast water treatment industry as it opens the door to a wider range of treatment systems from different manufacturers. One of those is Trojan Marinex, whose spokesperson told Container Shipping & Trade’s sister publication, Ballast Water Treatment Technology “We are very encouraged with the US Senate’s passage of the Bill and look forward to the US House of Representative’s passage also. The Bill unequivocally requires the USCG to adopt a reproductive method based on

(writes De Nora managing director Stelios Kyriacou)

With over 95 years of knowledge and experience in electrolytic disinfection combined with their recent USCG type-approval, De Nora is the expert in electro-chlorination and water treatment. The misrepresentation that the use of electro-chlorination, like within the De Nora Balpure, causes any safety risk due to chlorine or hydrogen gas is a load of hot air. The process works to generate sodium hypochlorite, not chlorine gas, the

Stelios Kyriacou (De Nora): Debunking myths around the choice of ballast water management systems

strength of which is on a par with household cleaners. Furthermore, hydrogen is actively removed from the treated side-stream of the Balpure process before water reaches the tank, thus eliminating any risk of hydrogen gas being trapped in the ballast tank head space. With BWMS, and indeed most things in life, the cheapest option does not often lend itself to endurance. Owners must ensure that they are asking the right questions of the supplier to fully understand the whole-life financial implications of their purchase. Power usage is a good example. Murkier waters require additional power from UV systems, which increases the initial installation capital expenses as well as the ongoing fuel usage of the system. UV systems use on average 30% more power than a side-stream electro-chlorination system, which is a significant operating expense over the long-term. Ultimately, purchasing a BWMS must be based on a review of the supplier and its total offering. At De Nora, we take the time to offer unbiased, practical information to shipowners in response to requests for transparency.

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BALLAST WATER MANAGEMENT SYSTEMS | 35

best available science.” An alternative view on VIDA is posed by BIO-UV Group’s president and chief executive Benoît Gillmann who noted that the US Administration’s approval of VIDA and the possible acceptance of the MPN methodology does not alter the status quo until the US Coast Guard has drafted policy detailing reproductive methods. “For the moment, the method in force today in the US is the CMFDA process. But whatever the possible modification and/or relaxation of the US rules, the UV dose must remain significant to treat all water types and a system like BIO-SEA is and will continue to be a safe choice for shipowners while staying very competitive,” said Mr Gillmann. VIDA sets a clear, unambiguous definition of what constitutes a ‘live’ and ‘living’ ballast water organism. It defines as living any organisms capable of reproduction. If they cannot, then they are classed as ‘dead’. The US Environmental Protection Agency will have to put the standard in writing and incorporate the USCG’s final version. But irrespective of the legislation, shipowners need to very carefully evaluate system performance and limitations against their vessels’ operational scope. The latest company to enter the BWMS arena is BOS and its Natural Ballast approach. This is a truly disruptive approach in that Natural Ballast does not aim to destroy or render the species in ballast water unreproducible. According to BOS chief executive Jerry Ng, with traditional type-approved BWMS, it is assumed that they will meet the standard. But the BOS Natural Ballast system uses what he described as a quick and reliable way of testing water that “positively ensures that the discharged water meets the standard.” In an interview with Container Shipping & Trade, Jerry Ng would not reveal, for commercial reasons, exactly how the system works. It is believed the system uses a real-time scanner

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Benoît Gillmann (BIO-UV): VIDA does not alter the status quo

that measures the size of the species in the ballast water intake. Those batches of water that contain species too large for D2 standard are diverted back overboard or into another ballast water tank. The system uses AI and highspeed processors to record the location of the water and as the vessel sails, the BOS Natural Ballast water system constantly sorts through the ballast water, bringing in deep ocean water as required to meet the necessary level of compliance. One of the environmental lobbys’ problems with most BWMS is the high power requirement, that must be met by higher fuel consumption and an increase in emissions during operations. According to Jerry Ng, the BOS system has a small in-vessel footprint, and only requires power for a small pump. The BOS Natural Ballast system may be the latest entry it the BWMS arena, but US-based Hyde Marine has been working toward USCG typeapproval for years. It completed its land-based testing for USCG typeapproval in October 2018 and is still completing its shipboard testing phase for the Hyde Guardian ballast water

treatment system.When shipboard testing is completed in Q2 2019, Hyde will submit the application for its USCG type-approval. Hyde plans to continue offering an IMO type-approval version of the Hyde Guardian system separately from its USCG type-approved version for customers who do not need to deballast in US waters. This is because the USCG type-approval version requires higher power lamps to pass the stain test protocol, so the capital and operating costs for the IMO typeapproved version are lower. Hyde will soon complete installations for two newbuild cruise ships, as well as retrofits of four existing cruise ships. With implementation of the IMO regulations in September 2019, Hyde expects market demand to start increasing dramatically in the near term as shipowners work to secure compliance for vessels at their next IOPP renewal date. Efforts have been stepped up to make retrofitting BWMS easier for operators. Ballast Water Containers, based in Scotland, has developed containerised BWMS that are suitable for retrofit, sharing or as port-based solutions. The company has developed mobile containerised versions of existing treatment systems and collaborates with the following BWMS manufacturers: Erma First, Alfa Laval, Ecochlor, Optimarin and Wärtsilä. All BWMS solutions provided by BWC are available with USCG type-approval. Its chief executive Richard Lawson said “Shipowners are looking to reduce the time spent in the shipyard and have better control of budget. We can prefabricate which reduces the time spent in the yard.” As the system is encased in a standard container, this is simply placed into the vessel and takes hours rather than days. Furthermore, its space-saving benefits are attractive to container ships. Mr Ward added “If an owner does not want it permanently installed in the vessel, it can be removed and placed on another vessel, for example if a ship is scrapped.” CST

Container Shipping & Trade | 1st Quarter 2019


36 | MANOEUVRING

New tug designs enhance safety at container terminals Tugowners invest in new tug designs and environmental technology for manoeuvring ever-larger container ships while vessel masters need weather routeing to avoid devastating ocean conditions

O

wners of terminal and escort tugs are investing in new technologies to tackle the combination of giant-sized container ships being brought into service and stricter environmental regulations on emissions being introduced. Ports worldwide are expanding their facilities to accommodate ultra large container ships (ULCSs) as these are delivered from Asian shipyards. Therefore, companies that provide marine services in these ports, particularly ship escort

and berthing, needed to expand their capacities. Power and bollard pull need to be increased without affecting the tug’s stability and safety. Different fuels or propulsion technology are also being installed to comply with tighter environmental rules. However tug capacity is enhanced in these ports, container ship captains, crew and operators need to be confident it will be more than adequate to handle their vessels when they arrive at the terminal. One tug owner has invested in a radically different design and technology to improve performance and stability. Novatug worked with naval architect Robert Allan and Voith to design and build the revolutionary Carrousel RAVE tug (CRT), which incorporate a safer towage system, combining two Voith in-line propellers and a Machinefabriek Luyt-built rotating winch on a carrousel for dynamic towage. Multratug 32 and Multratug 33 came into service in Q1 and Q2 in 2018 with a towing system that revolves around the wheelhouse, minimising the risk of tugs becoming unstable,

Multratug 32 was the first CRT tug to enter service for container ship towage

Container Shipping & Trade | 1st Quarter 2019

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MANOEUVRING | 37

said Novatug managing director Julian Oggel. “Capsizing should be impossible when towing with the carrousel system,” he said. “This allows for the safe execution of manoeuvres that would be a higher risk with traditional tugs.” Both Bureau Veritas-classed, 32 m tugs have around 77 tonnes of bollard pull that come from two ABC 12VDZC engines driving two Voith 32RV5 E/250 propellers. They enable the towline force to be controlled safely from the wheelhouse. Mr Oggel told Container Shipping & Trade that these tugs have provided escort and towage in the ports of Antwerp, Rotterdam and Bremerhaven, while being operated by Multraship and Fairplay. Since July 2018, they have both been stationed in Antwerp. In that port “the unique manoeuvres which the CRT is capable of performing have been particularly evident when helping ULCSs that traditionally challenge the available room in the port,” said Mr Oggel. He specified the ability that CRTs have to “act as a spring when attached forward” of a container ship and their ability of braking and steering the tow. “Conventional tugs have a hard time assisting these ships at the speed required to negotiate the bends and fairways in the port,” he continued. “Our CRT has proved invaluable in assisting these very large ships.” These specific abilities have been recognised by tug owners as Mr Oggel said there had been firm enquiries and negotiations for more newbuildings. “Current indications are that at least six more CRTs will be ordered over the next 12 months.”Novatug is developing smaller CRT designs for other types of harbour towage tug requirements over the next five years. For Multraship managing director Leendert Muller, investment in CRTs and other high-performance tugs is essential for maintaining capabilities and safety of tug operations in container ship ports, such as Antwerp. Multraship operates a diversified fleet of tugs of varying types, capacities and configurations for harbour towage and escort operations. “We are committed to expanding that fleet when the opportunity allows and when demand dictates,” he said. “We have always invested heavily in the ships, equipment and personnel, which we believe are needed to provide the level of service required by the industry, both now and in the future. Safety must at all times be our primary objective.” Elsewhere in Europe, Boluda France is expanding its towage capabilities, specifically for container terminals, by ordering a series of multipurpose tug newbuildings from Piriou’s Vietnamese shipyard. Up to eight tugs have been ordered for delivery during the next two years. The first two tugs are due to be brought into service in June this year. These azimuthing stern drive tugs are based on Piriou’s Omni Stern Tug 30 design with an overall length of just over 30 m. Boluda France needed more powerful tugs to handle the larger container vessels and cruise ships calling at French ports, said general manager Denis Monserand. These

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Svitzer tugs assist container ships into and out of terminals in Europe

newbuilds will have a top speed of 13 knots and combined propulsion power of 4,480 kW. “This new series will be built with increased power compared to the previous generation, to reach 77 tonnes of bollard pull,” Mr Monserand said. “This will allow our crews to service vessels of ever-increasing size in the best conditions.”Each tug will have two main medium-speed, four-stroke diesel engines, rated at 2,240 kW driving two aft azimuthing propellers. Svitzer Europe invested in highly manoeuvrable tugs from Sanmar shipyard in Turkey for its UK operations that include supporting container terminals in the Thames. In November the latest in the Delicay series of tugs, Svitzer Meridian, entered service. This is an azimuth tractor drive tug with 71.5 tonnes of bollard pull and combined engine power of 4,200 kW. “Svitzer Meridian is a versatile tug and will prove useful both at London Gateway and in the [river] Medway,” said Svitzer Europe managing director Kasper Friis Nilaus. The first job for Svitzer Meridian was to assist container ship MSC Iris on its arrival in London in early November 2018. Svitzer Meridian is a sister vessel of Danish-flagged Svitzer Vale, which has worked in London and Bremerhaven, Germany over the last six months. Both tugs were built to an adapted Robert Allan TRAktor 2500-SX design and constructed to ABS class requirements. In the US, tug owners also need to comply with Environmental Protection Agency (EPA)’s Tier 4 requirements for minimising particulate, NOx and SOx emissions, for newbuildings. Owners also need to upgrade capabilities for the ULCSs scheduled to berth at ports on both east and west coasts. On the east coast, McAllister Towing expanded its fleet with powerful escort tractor tugs that comply with EPA Tier 4. The lead vessel of this Jensen Maritime Z-drive tug four-vessel series, Capt Brian McAllister, was built by Horizon Shipbuilding in 2017. The second tug, Rosemary McAllister, was brought into service in Virginia in Q3 2018. Eastern Shipbuilding Group is building the last two of this series with Ava M McAllister launched in December 2018 and Capt Jim McAllister due to be

Container Shipping & Trade | 1st Quarter 2019


38 | MANOEUVRING

delivered by the end of this year. These tugs have a pair of Caterpillar 3516E Tier 4 engines that each have a selective catalytic reduction after-treatment system for removing NOx. Combined, these engines generate 5,050 kW of power and drive two Schottel SRP 4000 fixed Rudderpropeller units for manoeuvrability. McAllister vice president and general manager Elliott Westall said in Q3 2018 that Rosemary McAllister had made a huge difference to towage capabilities in the Hampton Roads area of Virginia. “We have seen a major increase in the arrival of ULCSs, and this tug, with its power, is able to expertly handle the largest vessels in the market today,” he said. It is not just its power that influences container ship handling though. “With its tethered escort abilities, Rosemary McAllister is a real game-changer,” said Capt Westall. “Bring on the 450 m container ships, McAllister and our team are ready!” On the US west coast, Foss Maritime is also using Jensen Maritime designs for a series of up to 10 tugs for EPA Tier 4 requirements. Foss ordered four Valor tugboat design vessels from Nichols Brothers Boat Builders for delivery between Q4 2020 and Q4 2021. There are options to build six more for delivery from 2022 onwards. They will have bollard pulls of up to 90 tonnes and equipment for towing, assisting and escorting ULCSs. Each will be powered by two MTU series 4000 main engines driving twin Rolls-Royce Z-drive propulsion units. Nichols Brothers is also building a trend-setting escort tug of Jensen Maritime design for Baydelta Maritime’s US operations. It will have a Rolls-Royce hybrid propulsion system, including electric motors, shaft generators and a power management and control system, for tractor tugs. This ABS-classed tug is scheduled to enter service at US west coast container terminals in March 2019 to assist ULCSs with reduced emissions and lower operating costs.

Salvage and emergency

Tugs are not just needed for manoeuvring vessels in terminals. Sometimes they are required to assist distressed container ships far from ports. In January, tugs were mobilised to assist Hapag-Lloyd’s damaged container ship Yantian Express, which was stranded in the Atlantic off North America. Maersk Mobiliser sailed from the US east coast and Boskalisowned Union Sovereign from Rotterdam to assist with the salvage. They were towing Yantian Express to a safe port, Freeport in the Bahamas, according to AIS data. In October 2018, tugs were requested to assist container ship Iduna, which was stranded in the Baltic Sea while en route to Hamburg, Germany, due to machinery failure. Also in October, container ship Ying Hai started listing in the Taiwan Strait in rough seas. It lost containers, continued to list and then sank, south of Taiwan. This demonstrated the risk of container ships sailing in adverse weather conditions. Another illustration of the effects of high waves on container ships occurred in January 2019 when MSC Zoe suffered from a parametric wave effect.

Container Shipping & Trade | 1st Quarter 2019

Weather routeing enables masters to avoid bad weather and ocean conditions to improve fuel efficiency

This caused a damaging list on the laden ship and multiple containers toppled into the sea off the Dutch coast. There is an ongoing salvage of containers and other material on the Frisian islands and in the North Sea.

Weather avoidance

Bureau Veritas marine marketing and sales director Gijsbert de Jong said container ships should be navigated to avoid rogue waves. “The phenomenon of parametric waves can be devastating,” he said. “We recommend that captains should avoid the risk from this and from storm weather.” Container ship masters can employ weather routeing programs to avoid storms and potential rogue waves. These programs can also predict tidal conditions close to ports to reduce the risk of container ship groundings blocking shipping channels and requiring tugs to refloat them. There are several providers of weather information and e-navigation. ChartCo provides weather information as part of its OneOcean platform, launched in September 2018. ChartCo chief commercial officer Howard Stevens explained to CST that this platform delivers e-navigation, route and passage planning, environmental compliance and data management. “With this information, masters can route ships around adverse weather, avoiding ice, swells and high winds,” said Mr Stevens, adding “All this information goes into a passage plan for optimising a route for time, total costs and fuel consumption.” A voyage plan can be created by setting waypoints manually on electronic navigational charts or they can be imported from ECDIS. There is also a quick route process using OneOcean, said Mr Stevens. Weather routeing services are based on MeteoGroup’s Ship Performance Optimisation System and enables seafarers and shipmanagers to execute container ship voyages for safety and reduced operating expenditure. CST

www.containerst.com


FLEET STATS & ANALYSIS | 39

2020 low sulphur directive drives bullish feeder business An active feeder orderbook is being driven by emissions control and TEU space demands, writes Barry Luthwaite

low sulphur fuel legislation limits. In Asia the outlook is proving less certain on feeder trades as all eyes are on China with a struggling economy and declining GDP. Another sobering thought is the belated awakening of China to more self-sufficiency in feeder services within their vast hinterland. This has resulted in a growing number of feeder orders placed in Chinese yards. The policy is forcing out overseas owners through less dependency on chartered-in vessels. However, smaller Chinese builders which are allocated much of the feeder newbuildings are facing liquidity problems as the closure and bankruptcy of privately owned Zhejiang Ouhua recently demonstrated. Here was a builder with a sound reputation for feeder construction simply running out of cash flow and investment in a bullish market. Government intervention was not forthcoming and 12 feeders for export and domestic clients were abandoned. A few were renegotiated with other builders with the main beneficiary being Huangpu Wenchong, which dramatically increased its feeder backlog to 37 vessels aggregating 84,196 TEU ahead of Jiangsu New Yangzijiang with 29 ships totalling 55,483 TEU. Feeder orders are big

F

eeder business remains in good shape despite deepsea ships cascading on to other routes as the trade dispute between China and the USA escalates. European routes are still attracting high freight rates, especially in sizes up to 2,500 TEU. Feeder scrapping is showing signs of increasing which will be welcomed, with clutches of 1990s-built vessels in the cellular sector up to 1,500 TEU now meeting their end. The key reason is growing competition from younger vessels and multi-purpose freighters which have come into their own recently as newbuilding vessels have specified more TEU space. Charterers and deepsea owners are exercising more stringent due diligence inspections of vessels proposed for charter. Now, as we approach new emission control legislation at the start of 2020, it is mandatory for feeder operators to comply with the new

CONTAINER SHIPS ON ORDER UP TO 5,000 TEU (EXPECTED DELIVERY YEAR) COUNTRY OF SHIPBUILDER

TOTAL NO

TOTAL TEU

2019 NO

2019 TEU

2020 NO

2020 TEU

2021 NO

2021 TEU

2022 NO

1

160

1

160

-

-

-

-

-

-

-

-

192

384,788

106

208,129

75

163,404

11

13,255

-

-

-

-

Bangladesh China Indonesia

2022 2023 TEU NO

2023 TEU

6

600

6

600

-

-

-

-

-

-

-

-

Japan

37

76,104

13

24,416

14

33,688

4

7,200

4

7,200

2

3,600

Korea (South)

36

58,446

20

30,446

16

28,000

-

-

-

-

-

-

Norway

1

120

-

-

1

120

-

-

-

-

-

-

Philippines

4

7,600

2

3,800

2

3,800

-

-

-

-

-

-

Spain

2

210

-

-

2

210

-

-

-

-

-

-

12

31,600

2

3,600

10

28,000

-

-

-

-

-

-

USA

9

30,925

2

7,100

7

23,825

-

-

-

-

-

-

Vietnam

2

1,400

2

1,400

-

-

-

-

-

-

-

-

302

591,953

154

279,651

127

281,047

15

20,455

4

7,200

2

3,600

Taiwan

GRAND TOTAL

Credit: BRL Consultants

www.containerst.com

Container Shipping & Trade | 1st Quarter 2019


40 | FLEET STATS & ANALYSIS

business, as most are ordered in multiple units, but there are worries by some owners with Chinese builders over their ability to keep pace with demand. There has long been an acceptance of slippage on original delivery dates by most Chinese builders but excellent quality ships are delivered at the lowest prices globally.

Drive for state-of-the-art feeders

The quest for state-of-the-art feeder container ships knows no bounds at the current time. A year ago the situation stood at 238 vessels committed, but by the end of January this year the total had risen to 302, vividly underlining the continuing plethora of business. With more emissions control legislation less than a year away, the rise in numbers is expected to continue with China the big beneficiary as feeder construction falls in South Korea and Japan. All eyes are trained on the level of scrapping to balance matters out which is expected to show a substantial increase in the second half of 2019 and through 2020. Statistics show that 86 ships were sold for recycling in 2018 while brisk further trading activity accounted for 177 secondhand purchases. The order backlog of 302 vessels will eventually commission 591,953 TEU into global trading on feeder routes. Even with today’s bullish business there is still a consensus that until 2018 there had been relatively little investment in feeders, especially for smaller sizes, which are now set to prosper. Other owners wishing to make a quick impact on promising freight rates have chosen to raid the secondhand market for prompt delivery of vessels. Distress sales have tapered off today but there are still enough owners around who are coming under pressure to sell by banks as mixed vessel fleets suffer cash flow problems. When liquidity problems are known about with owners, buyers push for lower sale prices and succeed. IMO 2020 regulation is likely to herald more business for third-party managers. Some owners are keen while many others are not. There are intense efforts by reputable managers to secure commercial and technical responsibilities.

Players and their moves

Several big name owners were overcome by liquidation problems after serving the box market for decades. One such household name – Bertram Rickmers – has now returned to the business by taking over eight 1,162 TEU feeders under construction at Fujian Mawei, China. A new privately owned company Asian Spirit Steamship Co has been established by Rickmers to own the ships. The vessels were originally contracted by Germany’s Marlink Project Management to an inhouse Bengalmax design. German owners, designers and charterers still exert a strong influence on the container scene. Marlink will be heavily involved in a new commercial management company for the vessels. Long associated with quality vessels, the newbuildings will be fitted with scrubbers to comply with IMO 2020 emission legislation pushing up the price of the ships to US$20-22M apiece. Third-party technical

Container Shipping & Trade | 1st Quarter 2019

management will be undertaken by Jebsen Shipping Partners (JSP) for the first two ships due for delivery in January and February 2019. JSP is experienced in operating several feeders in this capacity range. Management is so competitive now that long-term deals are out of the question. It is believed JSP has negotiated a two-year deal with possible optional extensions. In this range most vessels are built gearless as it impairs TEU capacity. This is still an option by Rickmers at a future date. Gear decisions are very much based on trading area and charterer requirements. Fitting scrubbers at around US$1-2M per ship depending on size is a vexed issue with owners. Not many at this stage will follow Rickmers, in contrast to deepsea ships, where there is a good take up of scrubbers among newbuildings. Clean fuel and operating costs will be a key consideration in the months ahead but is not expected to tempt feeder owners initially, especially for existing ships.

ALL EYES ARE TRAINED ON THE LEVEL OF SCRAPPING TO BALANCE MATTERS OUT. THIS IS EXPECTED TO SHOW A SUBSTANTIAL INCREASE IN THE SECOND HALF OF 2019 AND THROUGH 2020” Draft, fuel consumption and TEU intake are said to make the Bengalmax very competitive in southeast Asia and persuade charterers to pay higher rates. Clean trading with new equipment such as scrubbers and ballast water treatment systems will persuade charterers to offer higher rates for green tonnage. The first move has been made to build next generation feeders operating on hydrogen fuel cells. Icelandic operator Samskip is leading the way with partners and has received a US$6.9M grant from the Norwegian Government to pursue the project. Norway will feature strongly in the trading route which will link Poland with Sweden and Oslo Fjord on a round trip. Greeks are among the biggest investors in shipping with a big box ship fleet. This is not apparent however in the feeder trades. Currently no Greek owner has a feeder on order. Greek cabotage is mainly handled by overseas owners. One owner determined to change this is Contships Management Inc which has now built up a fleet of some 30 ships based on purchasing ex-German related tonnage. Assets acquired from enforced sales is a speciality of the company run by Nikolas D Pateras who has a single-minded ambition to turn Contships Management into the leading Greek owner and operator of feeder ships. Seven ships were recently purchased in quick succession lifting the owner’s complement to over 30 vessels. Over the next two years Mr Pateras plans to double this total and consolidate its growing position as a leading player in the feeder business. CST

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Y

CM

MY

CY

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05/03/2019 10:09


42 | MARKET UPDATES

New tool to analyse container ship tonne-mile demand Container Shipping & Trade has been given exclusive access to VesselsValue’s development of a tonne-mile demand tool for the container ship trade

S

hipping data providers VesselsValue is well-known for providing instant valuations for container ships. Perhaps not so well-known, at least in container shipping circles, is its data on shipping trades. Container Shipping & Trade was given a sneak preview of VesselsValue’s latest product*: a container ship version of the established wet and dry bulk trade analysis tool – VV Trade. “Our clients are banks and shipowners who need to have an instant opinion on a ship’s value. They asked us to use our AIS data to provide wet and dry bulk trade lane analysis as part of their investment analysis,” said VesselsValue senior analyst Court Smith. Analysing a sector’s aggregate shipping movements is an investment decision tool. The problem lies in the nature of AIS data. “As many people will be aware, the AIS data broadcast by vessels can be tricky to analyse in raw form. There are multiple spellings of the same port name and changes in draft are often reported late,” said Mr Smith. VesselsValue has invested considerable resources in cleaning up the raw AIS data using a combination of algorithms and human experience. The algorithms that produce the trade data also incorporate an element of behaviour prediction. It scores the previous voyages and calculates the vector. If a vessel is consistently sailing on a certain route, but the AIS data is late or showing an out-of- parameter destination, the programme reverts to the likeliest destination.

Container Shipping & Trade | 1st Quarter 2019

The Panamax container ship lost its main purpose in 2013, but the heatmap shows its trade has repositioned to West Africa and Asia today (VV Trade)

This is one of the key features behind the new container ship movements trade module. It can show the latest aggregate movements and tonne-mile demand in a current time period with a high degree of certainty. The main question is: if the trade

module is showing movements at a fleet or individual container ship level, can it show TEU movements? “At the moment it is not possible to accurately measure TEU movements using changes in the AIS draft. We assume each container ship is full and

www.containerst.com


MARKET UPDATES | 43

www.containerst.com

be possible to compare the service reliability of liner services against the published schedules. It could show the number of late journeys into a port. Even without the published schedules, there is a rich seam of data to be mined. For instance, VesselsValue claims to be able to alter the geo-fence at a terminal level, which would reveal the throughput on a like-for-like vessel basis. “The level of visibility could be the next stage – if there is the demand from clients,” said Mr Smith. The development would require gathering data from all the liner services and assignment into the various alliances, too. As a fore-taste, VesselsValue produced the table above based on the container ship trade showing the 10 top ports ranked by ULCC movements with Singapore overtaking Yangshan in the last 12 months. Of course, such rankings are highly controversial, as Mr Smith acknowledged. “We are still playing around with the data but by using the fully-laden dwt technique, we can give an accurate indication of aggregate tonne-mile demand on a given route

port-to-port or region-to-region,” Mr Smith said. However, it is the context of its other services that makes the VesselsValue trade product unique. Coupling the tonne-mile performance of a vessel to its value produces a new investment analytic. In theory, an investor is looking for an asset that is in regular employment and working at a level at least equivalent to the peer group or higher. Speed is another metric that is discoverable in the new container ship trade tool. A small increase in average speed in a sector is an indicator that demand is growing. But is this demand growth just a seasonal adjustment or a genuine step-change? An analysis of the average speed over time using the VV Trade container ship tool will parse the seasonality in the data. CST *Given the potential of the new container trade product, VesselsValue is keen to have input from the readers of Container Shipping & Trade. Send your suggestions to: rebecca.moore@rivieramm.com

NUMBER OF ULCV PORT CALLS – PAST 12 MONTHS 1,500

1,290

1,217

1,005

900

912

876

600

537

535

Qingdao

661

Busan New Port

1,200

508

478

300

Tanjung Pelepas

Hamburg

Hong Kong

Rotterdam

Ningbo

Yantian

Yangshan

0 Singapore

analyse at the deadweight level,” said Mr Smith. This is understandable. In theory, one could nominate a weight for each TEU on the ship, and then calculate the change in the number of TEU on board from the change in draft but this would give no information about the number of boxes loaded or discharged. “From an investment point of view, our clients require data that answers the bigger questions such as: is this the right sector to invest in? Analysing aggregate movement data over time shows the growth and the changes in trade direction,” said Mr Smith. This is illustrated by the changes the Panamax container ship fleet has undergone in the last five years. The expansion of the locks in the Panama Canal in June 2016 would logically be the end of the traditional-sized Panamax container ship. As the image of the Panamax container ship heatmap shows, in 2013 this size of container ship was the workhorse of the fleet. Unsurprisingly, the heatmap glows red around the Panama Canal itself, indicating the high concentration of Panamax tonnage in the region. Postexpansion, it was widely assumed the Panamax container ship trades would disappear. However, the latest Panamax heatmap shows a concentration of Panamax container ships in West Africa and southeast Asia. Far from disappearing under the onslaught of Neo-Panamax container ships, the Panamax container ship continues to flourish in niche trades, and actually could be a cunning shortterm investment. As mentioned above, the container ship module of VV Trade is still under development by VesselsValue. One very interesting analysis that can be wrought from the data will be schedule reliability. Of course, VesselsValue would hardly be the first company to offer such a product with SeaIntel and Alphaliner (to name a few) already established in this field. In theory, using this tool it will

Credit: VesselsValue

Container Shipping & Trade | 1st Quarter 2019


LAST WORD | 44

Hapag-Lloyd: why digitalisation is key

H Pyers Tucker, Hapag-Lloyd

DIGITALISATION HAS ALWAYS UNDERPINNED EVERYTHING THAT WE DO IN THIS INDUSTRY. WE ARE JUST GETTING SMARTER ABOUT HOW TO DO THINGS, SUCH AS PUTTING DATA TOGETHER MORE QUICKLY”

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apag-Lloyd is deploying data to build a more productive relationship with terminals, improve its customer service offerings and measure and improve on-time delivery of shipments. To help achieve the latter, the carrier is establishing a central control tower to manage the schedules of its fleet of ships. Previously, instructions came from the nearest area to the individual ship. Hapag-Lloyd senior director of corporate development Pyers Tucker said “Local decision makers do not have access to all of the downstream consequences on a roundtrip. Therefore, we are putting in place a control tower where people can access all the relevant information quickly and make the right decisions for the whole organisation, rather than just locally optimised ones.” He emphasised that “digitalisation is absolutely key” to establishing the control tower. “The way forward is to connect lots of different data streams in different formats from different sources, combine them in an automated way and present the information to the control tower team so that they can quickly make good decisions.” Hapag-Lloyd has piloted how to achieve this for nine months and is building the software and user interfaces. It estimated it will take two to three years to roll out completely. Highlighting the benefits Hapag-Lloyd and its customers will reap, Mr Tucker said “It will help significantly with on-time shipments, as it means that if things go wrong, we can identify this earlier and make better decisions much more quickly about what to do about it and keep customers informed appropriately.” Another focus for Hapag-Lloyd is working more closely at an operational level with its terminal partners. Mr Tucker said “In the past, there has generally been little co-ordination.” He said rather than focus purely on price, Hapag-Lloyd wants to work actively with its terminal partners, so that both parties can find win-wins and improve efficiencies. An important part of this is deciding what data would be helpful to receive by

each party earlier, and whether this should be provided in a different format so the two can work together more efficiently. A pilot scheme was carried out at Jebel Ali and is being rolled out to other terminals. It included improving communications around arrival times, crane/tandem cranes, gangway and labour gang allocations, intermodal terminal planning, as well as around bunkering, tugs, stowage and loading requirements. Mr Tucker warned “This is not simple and is really detailed. You need to sit down and work things through with teams from both sides meeting daily, weekly and monthly.”

Web channel business boost

Elsewhere, the company has boosted its customer service offering through its web channel – Quick Quotes – which it launched last January, before going public with it in August. Mr Tucker says “Most other carriers have websites where the shipper’s request for a quotation is sent to a service centre, where a member of staff will respond later by email. “Our system is fully automated. The analogy is that it is truly like Amazon. The customer can get an immediate quotation and book a shipment there and then.” The web channel has grown in 12 months to over 6% of Hapag-Lloyd’s global business. The website is producing 120,000 quotations automatically a week. Hapag-Lloyd has introduced the channel to individual customers, inviting them to briefings to teach them how to use it and to gain feedback as to how they want to use the tool, so that this could be incorporated as the tool is refined. Mr Tucker was keen to emphasise that container shipping lines have always used digital solutions. “We have to manage 1.6M containers and 220 ships all over the world. This would be impossible without sophisticated IT solutions. Digitalisation has always underpinned everything that we do in this industry. We are just getting smarter about how to do things, such as putting data together more quickly and reliably and in innovative ways.” CST

Container Shipping & Trade | 1st Quarter 2019


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Container Shipping & Trade 1st Quarter 2019  

Container Shipping & Trade brings experienced editorial commentary to the container shipping market and provides authoritative coverage of n...

Container Shipping & Trade 1st Quarter 2019  

Container Shipping & Trade brings experienced editorial commentary to the container shipping market and provides authoritative coverage of n...