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HICT WELCOMING THE FIRST DIRECT TRANS-PACIFIC SERVICE TO THE USA AND CANADA
On Apr 11th 2019, Haiphong International Container Terminal Co., Ltd (HICT) has successfully welcomed the maiden call of mother vessel Northern Jaguar deployed by Ocean Network Express (ONE) on PN2 service. Northern Jaguar is one of the large vessels operated by THE ALLIANCE of Hapag Lloyd, Ocean Network Express and Yang Ming Line on Trans-pacific route with regular call at HICT, which provides direct service from the North of Vietnam to West coast of the USA and Canada.
The PN2 has HICT – Yantian – Tacoma – Vancouver – Kaoshiung - Singapore – Laem Chabang – Cai Mep (TCIT) rotation. This service cuts down the lead time from Haiphong to West coast of the USA and Canada from 25 days to 17 days compared with the previous route calling at overseas transshipment hubs. Thus, it helps customers to significantly reduce logistics costs and take initiative in delivery of goods, without risks at transshipment hubs.
Northern Jaguar with a capacity of 8,814 TEU, LOA of 334m has successfully berthed at the terminal thanks to tremendous cooperation and support of the central government; Haiphong government authorities; investors; and strenuous efforts of HICT staffs and employees that have made in each and every step in the operation process, especially the absolute trust of THE ALLIANCE and customers. Haiphong International Container Terminal (HICT) – a joint venture between Saigon Newport Corporation, MITSUI O.S.K Lines Ltd. (Japan), Wan Hai Lines Ltd. (Taiwan) and Itochu Group (Japan), started operation since May 13th, 2018 – is the first deep water terminal of Northern key economic region with two main berths of 750m in length, channel depth of minus 14m, turning basin diameter of 660m, vessel draft at berth could reach minus 16m. The terminal is equipped with modern synchronized facilities including 8 STS cranes which are the biggest in Vietnam, 24 eRTG cranes, 2 slewing cranes for the barge berth, along with operation system “TOPS-Expert” and electronic port systems “ePORT” and “eDO”. HICT can accommodate container vessels up to 14,000 TEU (160,000 DWT), the annual container throughput of 1.1 million TEU.
In the very near future, HICT will continue welcome other direct services from Haiphong to West coast and East coast of the USA, India, Mediterranean and Europe, imprinting an international transshipment hub in the North of Vietnam on the map of transshipment hubs in the region and the world.
MOL VIETNAM CHANGES NAME SINCE APRIL 8TH 2019.
Pursuant to Decision of Sole Owner dated 31/03/2019 and Certificate of Enterprise registration No 0304491818, first register date 03/09/2008, the fifth update on 08/04/2019 MOL Vietnam will change their Legal name, effective from 08/04/2019 as follows: from MITSUI O.S.K. LINES (VIETNAM) LTD. to MOL SHIPPING (VIETNAM) COMPANY LIMITED. Beyond the above changing, Tax Code and other contact information are unchanged.
FIRE-STRICKEN YANTIAN EXPRESS TO LEAVE FREEPORT BY EARLY MAY
The fire-stricken containership Yantian Express should depart Freeport at the end of April/early May 2019, according to German shipping company Hapag-Lloyd.
The 7,506 TEU vessel, that will set sail with the remaining cargo onboard, was scheduled to reload the containers unloaded at Freeport on April 12, 2019. The company added that General Average and Salvage security has still not been posted for some of these containers.
Additionally, the company said that the departure will depend on salvage company Smit and the provision of salvage security.
Smit has declared that the granted period of 21 days for the provision of salvage security has long expired. Hapag-Lloyd explained that the salvage firm was therefore working on getting the required certification from the Lloyd‘s Arbitration to enable them to sell the cargo to satisfy their security interest, should security not be provided imminently.
In light of dependency on technical approval of vessel class, the next port of call is not finally determined as yet, the German shipping major concluded.
As World Maritime News earlier reported, Yantian Express suffered a fire while sailing in the North Atlantic, some 650 nautical miles off the Canadian coast, on January 4. The ship’s crew evacuated two days later, after the fire increased in intensity.
In February, the boxship berthed in Freeport, Bahamas, to undergo the evaluation process and prepare for cargo discharge. Around 200 containers have been identified as a total loss.
YANG MING TO CHARTER ANOTHER 11,000 TEU NEWBUILD QUARTET FROM SHOEI KISEN
Taiwanese shipping company Yang Ming Marine Transport Corp. has signed charter agreements with Japanese shipowner Shoei Kisen Kaisha, a subsidiary of Imabari Shipbuilding, for four 11,000 TEU containerships.
The signing ceremony was held in Hong Kong on April 10, 2019.
The four boxships have been ordered by Shoei Kisen Kaisha at Imabari yard, according to data provided by Asiasis.
As informed, the vessels are expected to be delivered in the first three quarters of 2022.
Yang Ming’s fleet optimization is part of the company’s strategy aimed at enhancing its mid to long-term operational efficiency and competitiveness.
“In addition to these four new 11,000 TEU containerships, Yang Ming had ordered another ten 11,000 TEU newbuildings through long-term charter agreements with Owners Costamare and Shoei Kisen since 2018, which will enable Yang Ming to have a total of fourteen 11,000 TEU newly-built full containerships during the years 2020 to 2022,” the company said in a statement.
These eco-type new containerships would gradually replace some of Yang Ming’s high-cost, older ships.
Referring to the International Maritime Organization’s (IMO) sulphur cap 2020 which will enter into force on January 1 next year, Yang Ming added:
“Every carrier has prepared accordingly to ensure a smooth transition in operation next year. All the newbuildings Yang Ming has ordered are designed in compliance with the IMO regulation with lower bunker consumption.”
ZIM JOINS TRADELENS PLATFORM
Developed by Maersk and IBM, TradeLens uses blockchain to promote exchange of shipping and trade data.
ZIM Integrated Shipping Services said Wednesday that it has signed on as a member of TradeLens, a digital shipping platform jointly developed by A.P. Møller – Maersk and IBM. ZIM is expected to begin contributing data to the platform before the end of the third quarter this year.
TradeLens uses blockchain technology “to enable trust between multiple trading partners — from carriers to freight forwarders, customs officials, port authorities and more — when transacting in a digitized global trade documentation process,” said ZIM.
“By joining TradeLens, ZIM can continue its push toward digitizing its processes to enable efficiencies and cost savings to the company and the customers by enabling greater transparency and more efficient processes,” the Israel-based carrier said.
It said more than 5 million shipments have been recorded on TradeLens.
TRADE WAR IS THE BEST THING THAT HAPPENED TO CONTAINER SHIPPING
The end of the escalating trade war between the world’s two super-powers, China and the United States, seems to be on the horizon as the two sides near a deal on ending the tit-for-tat tariffs on export and import of goods.
Following a truce at the end of 2018 and the ensuing trade talks, the focus now is on the enforcement mechanism aimed at making sure the US and China meet their commitments allowing for the tensions to cool down.
According to US Treasury Secretary Steven Mnuchin, the bilateral trade talks have resulted in a mechanism to police the yet-to-be-unveiled trade agreement, which will entail establishment of new enforcement offices and repercussions for whomever fails to meet their end of the deal.
Even though the trade tariffs have had an adverse impact on the shipping market, especially for bulkers and tankers, there are industry leaders that believe the trade tensions were favorable for the container shipping market fundamentals overall.
Speaking at Capital Link’s 13 Annual International Shipping Forum, in a panel dedicated to container shipping, George Youroukos, Executive Chairman of Global Ship Lease, said that the “trade war is the best thing that happened to container shipping in the last few years.”
“Our industry is cyclical not because we have a cyclical demand – every year the demand is bigger than the last year. The reason we have a cyclical market is because of the supply, and the trade war has put the supply in check, putting a break on the ordering of new ships,” he added.
As explained, the lack of new ordering has paved the way for the lowest order book the industry has had in decades. This is very important having in mind that the container shipping sector has been battling choppy waters over the past few years especially due to overcapacity.
Furthermore, Youroukos pointed out that he was not worried about the trade wars as he doesn’t believe the production of goods could be switched from the Far East to the Western hemisphere, hence there is no room to fear about trade wars having a major impact on the global container shipping patterns.
Commenting on the trade tariffs, Howard Finkel, Executive Vice President of COSCO Shipping Lines (North America), said that the company hasn’t seen a huge effect on trade as tariffs on certain imports that would have had a greater effect haven’t been put in place yet.
Specifically, in December 2018, Trump agreed to leave the tariffs on USD 200 billion worth of product at the 10% rate, and not raise it to 25% during the 90-day tariff ceasefire.
Nevertheless, Finkel said that there has been a great deal of overbooking over the last six months, as shippers try to beat the tariffs.
Due to overbooking, the West Coast ports of Long Beach and Los Angeles have been experiencing congestion due unprecedented import volumes as larger vessels are being deployed to accommodate increased cargo volumes as tariff deadline looms.
Every aspect of port operations, from labor and equipment supply to vessel and yard operations, to truck and rail availability is being stretched and contributing to congestion, gridlock and delays, as explained earlier by Taiwanese shipping company Yang Ming.
However, commenting on the potential outcome of the trade talks Finkel voiced his hope that “cooler heads would prevail”, allowing for the situation to normalize.
Outlook for the Container Shipping Market
Over the recent period the container shipping market has undergone numerous changes, with major consolidation wave shrinking the number of carriers present in the market and companies switching to different alliances.
Referring to claims from European authorities that container shipping alliances raise competition concerns in what has become a concentrated market, Finkel said that despite the fact that there are fewer carriers now, the market remains “brutally competitive.”
“I really believe that you need to be in a strong alliance to keep your operating costs down,” he added.
Cao Deambrosio, Managing Partner at Seamax Capital Management is bullish on the prospects of the container shipping market. Specifically, charter rates have been on the rise since the beginning of 2019 and utilization rates are going up as well, he pointed out.
“The upcoming fuel change and resulting slow-steaming, together with vessels getting taken out of service for scrubber fittings should help the supply side. Assuming the demand stays the same and people don’t get overly excited with newbuilding orders, we should be in pretty good shape for the next few years,” Deambrosio pointed out.
Youroukos added that the industry is already seeing containerships slowing down by one to two knots due to the global sulphur cap entering into force in 2020, stressing that ships trading on all services are expected to slow down. As a result, liner companies will see reduced operating costs bringing about at the same time the absorption of the extra capacity in certain trades.
Speaking on the IMO 2020, Finkel said that the industry needs to agree on the right bunker formula to avoid potential detrimental effects on ships from fuel contamination, stressing that COSCO plans to meet the new regulation by switching to low-sulphur fuel.
“The impact of the fuel switch stemming from the IMO 2020 is going be the determining factor in whether the liner companies are going to be profitable or not in 2020,” Finkel noted, highlighting the overall importance of the regulation on the container shipping market.
DREWRY: SLOWER VOLUMES DENT CARRIERS’ HOPES FOR HIGHER CONTRACTS
Following the tariff-induced cargo rush of late-2018, container shipments from Asia to West Coast North America dived in the first quarter of 2019, denting carriers’ hopes of securing higher annual contracts.
The Asia-West Coast North America trade was booming at the end of last year with eastbound spot freight rates at a six-year peak, according to shipping consultancy Drewry. However, now that the sugar rush caused by the threatened tariffs on Chinese goods has passed, the market is readjusting to life with much slower volumes and prices.
Asia to US West Coast volumes declined by 3% year-on-year, which compares unfavourably with shipments to the East and Gulf coasts that combined grew by 4%. The fall-off in Asia to USWC demand from the fourth quarter of 2018 was at nearly 19% although the West Coast market was always likely to suffer the most from a tariff hangover as shippers had prioritised that gateway as the quickest means to beat the deadline.
“There was always likely to be a hangover from the tariff-induced cargo rush of late-2018, but the sting on Asia-West Coast North America looks to be more severe than carriers expected. This misjudgement looks set to keep annual contract increases in check,” Drewry explained.
The outlook is clouded by uncertainty surrounding the ongoing China-US trade talks and a mild slowdown in the US economy. The shipping consultancy noted that the industry is unlikely to see a repeat of the front loading of so much cargo – at least not on the same scale as witnessed last year.
“The trade will not benefit from the demand sugar-rush it received last year via the tariffs; the next phase is a reduction of inventories in the US and eastbound shipments from Asia to North America in general are expected to grow at a significantly reduced pace this year.”
Source: World Maritime News, American Shipper, Vietnam Insider
