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ONE: Vessels Maintaining Normal Port Calls in Greater China
Container operations in Greater China including those at the terminals, depots, and other facilities, continue to operate as usual over the Lunar New Year holiday period, Ocean Network Express said in an advisory.
The comment comes amid the ongoing outbreak of Novel Coronavirus stemming from Wuhan, China, which has put on high alert port and maritime authorities across the board.
“For ports other than Wuhan, vessels are still maintaining their normal port calls and operations. All ONE China offices will have staff available either on-site or via remote access in order to ensure operations continue to run smoothly throughout this exceptional period and to take bookings for future shipments,” ONE said.
On the other hand, cargo operations at Wuhan port have been suspended until further notice due to local quarantine restrictions.
“New bookings to/from Wuhan are suspended, and our staff will continue to liaise with customers who have Wuhan shipments already in progress to discuss the most appropriate course of action for these,” the company added.
The International Chamber of Shipping (ICS) advised its members to take steps that limit the spread of the novel virus, reflecting advice from the World Health Organisation (WHO).
WHO believes that if certain measures are taken, there should be no “unnecessary restrictions of international traffic”, meaning ports and global shipping can continue to operate.
The measures in question include checking crew for symptoms of the infection and keeping confirmed cases under isolation and treatment, as well as carrying out health information campaigns and collaborating with public health authorities for case management on board ships.
“The shipping industry will always prioritise the health of our crew and members of the public above all else. We have recommended that all our members across the world follow the WHO measures. As an industry, we fully understand the importance of playing our role in halting the spread of viruses,” Guy Platten, the Secretary-General of ICS, commented.
“By implementing the measures in their entirety, we are avoiding the needless closure of any port. Shipping can continue to be the conduit for 90% of world trade, ensuring the steady supply of medicine, food and fuel for consumers worldwide. We are thankful that the WHO has avoided a knee jerk reaction, which would do nobody any favours.”
Port authorities across the world are issuing guidance for seafarers predominantly mandating that masters report of their previous calls to China over the past 30 days as well as potential cases of flu-like symptoms on board in order to curb the potential spread of the virus.
HMM’s 24,000 TEU Mega Ships to Start Delivery in April
Korean shipping company Hyundai Merchant Marine (HMM) is set to join the elite club of megaship owners in a few months.
Namely, HMM is scheduled to start taking delivery of its twelve 24,000 TEU boxship newbuilds, the largest containerships in the world, in April, a company spokesperson confirmed to World Maritime News, hinting that the delivery schedule may be subject to change.
The ships are undergoing final touches at the Korean shipyards Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering (DSME) and are scheduled to be deployed in the Far East-North Europe trade.
The sequential delivery of the new containerships coincides with the company’s entry into a new containership alliance – THE Alliance; comprising Hapag-Lloyd, Ocean Network Express, and Yang Ming.
According to HMM’s spokesperson, the vessel’s deployment plan for the year 2020 is still being finalized among THE Alliance members and will be unveiled once completed.
It is believed that the deployment of the giant ships will take place from Busan Newport International Terminal, the Port of Busan, which is the largest port in South Korea.
The company is expected to add around 34 ships to THE Alliance’s network in 2020, according to Alphaliner’s estimates, adding up to 519,000 TEU to the network.
The switch to a new alliance comes as Hyundai Merchant Marine exits the three-year cooperation deal it had with the 2M carriers, Maersk Line and MSC since March 2017.
Apart from the newbuildings that the South Korean major would receive in 2020, another eight 15,000 TEU newbuildings are set to join the company’s fleet in 2021. The latter are expected to be deployed on the Asia – US East Coast route from the second quarter of 2021.
Furthermore HMM’s fleet will be strengthened in April 2020 by redeliveries of nine 10,000 – 13,000 TEU ships currently (sub-)chartered out to Maersk and MSC.
Business performance and plans ahead
Over the past year, HMM was investing strenuous efforts to cut its loss by turning to cost-cutting efforts and business transformation aided by improved freight rates.
The shipping major managed to reduce its operating loss from KRW 123.1 billion (USD 105 million) in the third quarter of 2018 to KRW 46.6 billion (USD 39.8 million) in the same quarter last year.
“Last year, we laid a solid foundation to improve mid-to-long term profitability by joining THE Alliance, acquiring five new VLCCs, and securing operation rights of the Hyundai Pusan New Port terminal,” Jae Hoon Bae, President & CEO of HMM, said in his New Year message.
“We also have prepared a new leap forward through efforts to improve our profit structure, including the establishment of the SWAT (Strategic Work Activity TF), Logistics Service Strategy TF, and hiring of overseas sales specialists for back-haul business.”
“This year appears to be another year of considerable uncertainty. Geopolitical instability and an oversupplied market situation have intensified and are expected to persist, which might contribute to obstructing a positive outlook.
“From the US-China trade dispute to Brexit, uncertainties in the global trade environment have directly affected the world trade volume. The growth rate of shipping capacity is expected to increase as well.
“It is unpredictable whether the business environment approaching us will be a tailwind or headwind, nor can we control it as we wish, but let us all make a fresh resolution to reach our desired “destination.”
The company has defined its goals for the future and it aims to reach 1 million TEUs in capacity, over USD 10 billion in annual revenue by 2022.
“This goal will be realized by accomplishing our vision of ‘No.1 in customer satisfaction, No.1 in productivity, and No.1 in employee satisfaction’. (…)
“In particular, with the delivery of the mega container ships and new cooperation with THE Alliance, the year 2020 will be a turning point for HMM to set a new milestone.”
Hapag-Lloyd embarks on use of biofuel to reduce CO2 emissions
German carrier Hapag-Lloyd has embarked on the use of biofuel as marine fuel as part of the company’s efforts to reduce emissions of carbon dioxide (CO2) from its ships.
Hapag-Lloyd said it has tested a blend of 80% low sulphur fuel oil (LSFO) and 20% biodiesel based on cooking oils and fats to create a so-called B20 fuel, used for the first time on the 4,402-teu Montreal Express.
The biodiesel generates up to 90% less CO2 emissions than conventional bunker fuels.
“By the end of this year, we want to have reduced our specific CO2 emissions by 50% compared to the reference year 2008. Biofuels like ‘B20’ can help us reach this target. This is because, in addition to having a low sulphur content, the fuel also emits less climate-damaging CO2 during combustion,” explained Jorg Erdmann, senior director sustainability management at Hapag-Lloyd.
Hapag-Lloyd intends to use the test run with the Montreal Express, which operates in the St. Lawrence Coordinated Service 2 (AT 2) between Europe and Canada, to gain experience and information on the properties of the fuel in real-world use.
Jan Christensen, senior director purchasing & supply at Hapag-Lloyd, said: “We are checking to see whether the share of biodiesel has any adverse effects on the equipment and the fuel processing on board the vessel. If the test is successful, more ships from Hapag-Lloyd’s fleet could operate using the ‘B20’ fuel in future.”
ONE Reels In Profit for Third Consecutive Quarter
Ocean Network Express, the merged container shipping business of Japanese trio NYK Line, K Line and MOL, reported USD 5 million profit for the 3rd quarter of its 2019 fiscal year, remaining in the black for three consecutive quarters.
ONE made an upward adjustment of the full-year forecast to a profit of USD 81 million, marking an improvement of USD 21 million from the previous forecast.
“Cargo movement has been almost in line with our forecast for East-West trade, North-South trade and Intra-Asia trade until Lunar New Year in late January. In December, there was also some cargo rush to avoid new bunker surcharge and that sustained cargo movement. On the other hand, we expect relatively weak cargo movement after Lunar New Year, and accordingly, we plan to have additional void sailings, mainly under THE Alliance for East-West trade, in accordance with demand drop to reduce operating cost,” the company explained.
Commenting on ONE’s performance, NYK said that liftings particularly increased on the major North America and Europe trades, as well as the Intra-Asia trade. However, in the third quarter, liftings stagnated as a result of seasonally slower demand and the impact of the trade problem between the US and China.
Although freight rates were higher in the first and second quarters compared to the same period of the previous fiscal year in the North America trade, in the Europe trade, due to deterioration in the supply and demand balance, freight rates did not rise during the summer peak season and were sluggish, the company explained.
In the third quarter, freight rates deteriorated in both the North America and Europe trades compared to the same period of the previous fiscal year.
ONE added that the optimization of its cargo portfolio is improving its profitability and is going as planned at the beginning of 2020. Further progress is being marked in operation efficiency, and cost-saving through business process rationalization, aimed at bolstering ONE’s competitiveness.
As informed, its bottom line was further lifted by optimization of empty containers positioning as well as the lower price of heavy fuel oil than forecasted.
Given the said improvements, the teething problems from the previous fiscal year, and large one-time costs remain a thing of the past.
“As a result, although revenue declined year on year in the liner trade as a whole, the business performance greatly improved, and a profit was recorded,” NYK said.
The container shipping major claims that it had managed to secure a relatively smooth transition to IMO 2020 regulation with the procurement of regulation-compliant fuels in advance and micromanagement of vessel operation.
“We plan to retrofit scrubbers on board core large ships as scheduled. We are studying the expansion of target vessels, monitoring industry trends as well as the best mix of procurement of regulation-compliant fuels and retrofitting of scrubbers,” ONE noted.
As announced earlier, the company’s extra bunker cost by MARPOL2020 compliance is expected to be recovered through bunker surcharge.
ONE said that it expects the regulation-compliant fuel price after January to be almost in line with the previous forecast.
Finally, the container shipping heavyweight is maintaining its synergy targets of 96% for the fiscal year of 2019 and 100% for the fiscal year of 2020.
Six Seafarers on CMA CGM Ship Reported Ill
Six crewmembers on board a containership operated by French shipping major CMA CGM have been reported ill, with the possibility of coronavirus infection.
The Sri Lankan seafarers aboard the CMA CGM Ural were allegedly suffering from a fever and high temperature while heading towards the Suez Canal in the Gulf of Aden.
The six men might be the first mariners affected by the new disease that originated in China.
In January, the 9,400 TEU boxship visited several Chinese ports including Shenzhen, Xiamen, Ningbo-Zhousan and Yangshan.
“We are in constant contact with the CMA CGM Ural. All the necessary measures to ensure appropriate medical follow-up have been taken,” a spokesperson of CMA CGM told World Maritime News.
Despite contrary media reports, the spokeswoman reassuringly added:
“The International Radio Medical Center (CIRM Roma) confirmed yesterday that the entire crew is in good health.”
Built in 2015, the Malta-flagged Post-Panamax is owned by China International Marine Containers, VesselsValue’s data shows.
THE Alliance Unveils Expanded Service Network for 2020
- FMC filing of Hyundai Merchant Marine (HMM) to join as a full member of THE Alliance became effective.
- New service structure; 33 services; coverage of 78 ports throughout Asia, Europe including Mediterranean, North and Central America, the Middle East, Red Sea and Indian Subcontinent.
- Deployment of over 280 efficient container vessels with expanded capacity allowing the implementation of enhanced service coverage with enhanced frequency, rapid transit times, and more comprehensive port coverage.
The members of THE Alliance, Hapag-Lloyd, Ocean Network Express, and Yang Ming are happy to welcome Hyundai Merchant Marine as a new core member of THE Alliance. With the FMC acceptance of HMM membership, THE_Alliance offers an attractive upgraded product package and it will be launched around April 1st, 2020. Based on the existing comprehensive network of THE Alliance, the newly enhanced product package will offer increasing frequency particularly from South East Asia, as well as new direct port coverage and improved transit times.
The upgraded service package includes:
- A new pendulum service replacing the existing Asia-Europe FE5 and Transpacific PS7 services with a new highly efficient design. This new service, to be further named, will be operated by 18 modern 14000+ TEU ships and provides added weekly Transpacific coverage between South East Asia and Southern California, thereby expanding the number of services directly covering this lane to three, in addition to FP1 and PS3.
- A modified PS3 will offer new direct coverage of Haiphong creating more value and choice for the customers.
- Further to the enhanced Transpacific coverage of South East Asia, a new Transpacific loop, PS8, focusing on Central China and Korea (including new coverage of Incheon) will be inaugurated around 1st April 2020.
- For Asia and North Europe, the group will deploy two efficient 20,000+ TEU vessel services in a newly revised FE2 and FE4 design which will bring economies of scale and positive environmental benefits.
THE Alliance outlined its enhanced service network as follows:
Asia and North Europe
FP1 - From TPWC - Shimizu - Kobe - Nagoya - Tokyo - Singapore - (Suez Canal) - Rotterdam - Hamburg - Le Havre - (Suez Canal) - Singapore - Kobe - Nagoya - Tokyo - To TPWC
FE2 - Pusan - Shanghai - Ningbo - Yantian - Singapore - (Suez Canal) - Southampton - Le Havre - Hamburg - Rotterdam - (Suez Canal) - Port Kelang - Pusan
FE3 - Hong Kong - Xiamen - Kaohsiung - Yantian - (Suez Canal) - Rotterdam - Hamburg - Antwerp - Southampton - (Suez Canal) - Jebel Ali - Singapore - Yantian - Hong Kong
FE4 - Qingdao - Pusan - Ningbo - Shanghai - Yantian - (Suez Canal) - Algeciras - Rotterdam - Hamburg - Antwerp - London Gateway - Algeciras - (Suez Canal) - Singapore - Qingdao
FE5 - From TPWC - Laem Chabang - Cai Mep - Singapore - Colombo - (Suez Canal) - Rotterdam - Hamburg - Antwerp - Southampton - (Suez Canal) - Jeddah - Singapore - Laem Chabang - Cai Mep - Hong Kong - Yantian - To TPWC
Asia and the Mediterranean
MD1 - Qingdao - Pusan - Shanghai - Ningbo - SPRC - Singapore - Jeddah - (Suez Canal) - Damietta - Barcelona - Valencia - T angier - Genoa - Damietta - (Suez Canal) - Jeddah - Singapore - SPRC - Qingdao
MD2 - Pusan - Qingdao - Shanghai - Ningbo - Kaohsiung - SPRC - Singapore - (Suez Canal) - Piraeus - Genoa - La Spezia - Fos - Genoa - Piraeus - (Suez Canal) - Singapore - SPRC - Pusan
MD3 - Pusan - Ningbo - Shanghai - SPRC - Singapore - Jeddah - (Suez Canal) - Ashdod - Istanbul - Izmit - Aliaga - Mersin - Ashdod - (Suez Canal) - Jeddah - Singapore - Kaohsiung - Pusan
Asia and the Middle East / Red Sea
THE Alliance will provide more details of 3 Asia - Middle East products in a subsequent PR. Full rotation will also be included in the next PR.
AR1* - Pusan - Shanghai - Ningbo - Shekou - Singapore - Port Kelang - Jeddah - Aqaba - Sokhna - Jeddah - Singapore - Pusan
*HMM will not participate on the AR1
Transpacific - West Coast
PN1 - Xiamen - Kaohsiung - Ningbo - Nagoya - Tokyo - PNW - Tokyo - Kobe - Nagoya - Xiamen
PN2 - Singapore - Laem Chabang - Cai Mep - Haiphong - Yantian - PNW - T okyo - Kobe - Singapore
PN3 - Hong Kong - Yantian - Shanghai - Pusan - PNW - Pusan - Kaohsiung - Hong Kong
PN4 - Qingdao - Ningbo - Shanghai - Pusan - Prince Rupert - PNW - Pusan - Kwangyang - Qingdao
FP1 - From Europe - Singapore - Kobe - Nagoya - Tokyo - LA/LB - Oakland - Tokyo - Shimizu - Kobe - Nagoya - Tokyo - Singapore - To Europe
PS3 - Nhava Sheva - Pipavav - Colombo - Port Kelang - Singapore - Cai Mep - Haiphong - LA/LB - Oakland - Pusan - Shanghai - Ningbo - Shekou - Singapore - Port Kelang - Nhava Sheva
PS4 - Xiamen - Yantian - Kaohsiung - Keelung - LA/LB - Oakland - Keelung - Kaohsiung - Xiamen
PS5 - Shanghai - Ningbo - LA/LB - Pusan - Shanghai
PS6 - Qingdao - Ningbo - Pusan - LA/LB - Oakland - Kobe - Qingdao
PS7 - From Europe - Jeddah - Singapore - Laem Chabang - Cai Mep - Hong Kong - Yantian - LA/LB - Oakland - Japan - Hong Kong - Laem Chabang - Cai Mep - Singapore - Colombo - To Europe
PS8 - Shanghai - Kwangyang - Pusan - LA/LB - Oakland - Pusan - Kwangyang - Incheon - Shanghai
Transpacific - East Coast (via Panama and Suez Canals)
EC1 - Xiamen - Kaohsiung - Hong Kong - Yantian - Pusan - T okyo - (Panama Canal) - Manzanillo - Savannah - Jacksonville - Charleston - Norfolk - Manzanillo - (Panama Canal) - Panama Pacific Call - Tokyo - Kobe - Xiamen
EC2 - Qingdao - Ningbo - Shanghai - Pusan - (Panama Canal) - Caribbean hub - New York - Wilmington - Savannah - Charleston - Caribbean hub - (Panama Canal) - Pusan - Qingdao
EC3 - Ningbo - Shanghai - Pusan - (Panama Canal) - Caribbean hub - Savannah - Norfolk - Charleston - Caribbean hub - (Panama Canal) - Panama Pacific Call - Pusan - Ningbo
EC4 - Kaohsiung - Hong Kong - Yantian - Cai Mep - Singapore - (Suez Canal) - New York - Norfolk - Savannah - Charleston - New York - (Suez Canal) - Singapore - Kaohsiung
EC5 - Laem Chabang - Cai Mep - Singapore - Port Kelang - Colombo - (Suez Canal) - Halifax - New York - Savannah - Jacksonville - Norfolk - Halifax - (Suez Canal) - Jebel Ali - Singapore - Laem Chabang
Transatlantic*
AL1 - Rotterdam - Hamburg - Antwerp - London Gateway - Norfolk - Philadelphia - New York - Halifax - Rotterdam
AL2 - Le Havre - London Gateway - Rotterdam - Hamburg - New York - Charleston - Savannah - Le Havre
AL3 - Antwerp - Hamburg - London Gateway - Charleston - Port Everglades - Houston - Savannah - Norfolk - Antwerp
AL4 - London Gateway - Antwerp - Hamburg - Le Havre - Veracruz - Altamira - Houston - New Orleans - London Gateway
AL5 - Southampton - Le Havre - Rotterdam - Hamburg - Antwerp - Savannah - Cartagena - (Panama Canal) - Balboa - LA/LB - Oakland - Seattle - Vancouver - Oakland - LA/LB - Balboa - (Panama Canal) - Cartagena - Caucedo - Savannah - Southampton
*HMM will not participate on the Atlantic Trade
The newly upgraded service network which is expected to commence from around April 1st, 2020.
(Source: World Maritime News, American Shipper, Seatrade Maritime, ONE's Website)
