port & shipping news 34/15

1 Port & Shipping News 34/15 (17 – 23 Aug 2015)

Uwe Breitling - Port, Transport & Training Consultant [email protected]

Port & Shipping News 34/15 17 – 23 Aug 2015

Reefer madness ...................................................................................................... 5

Pirates hit six vessels in Malacca and Singapore Straits in less

than 30 hours .......................................................................................................... 7

Djibouti: A hub at the Horn ................................................................................... 8

Nicaragua canal: CSA Global and HKND sign agreement to map

$50 billion project .................................................................................................. 9

First offshore pipeline crosses Arctic Circle ..................................................... 10

Offshore adrift on a sea of cheaper oil ............................................................. 12

Future of China-Pakistan economic corridor bleak? ...................................... 14

Australia: $1 billion terminal to drive Sydney top spot ................................. 16

Myanmar: China’s plan to develop a deepwater port at

Kyaukphyu faces roadblocks .............................................................................. 17

India: Larsen & Toubro drops port development project in Gujarat ........... 19

U.S lawsuit accuses Thai supplier of selling prawns produced

by slaves ................................................................................................................. 20

China: Four new fires at Tianjin explosion site, widespread

safety hazards found............................................................................................ 21

Colombia: Puerto de Buenaventura alista su quinto terminal

marítimo ................................................................................................................. 23

Spain: €466.8 million for landside access improvements of ports .............. 24

Argentina: Tender for new concession of Terminal 5 at the

Port of Buenos Aires ............................................................................................. 24

Honduras: Initiative to reactivate port in Punta Castilla .............................. 25

mailto:[email protected]



Panama Canal is about to double in capacity .................................................. 25

U.S.: Ports needed for exporting Montana coal .............................................. 27

What makes a productive port (or terminal)? ................................................. 28

UK: Marine mammals thriving in Thames ........................................................ 30

Arctic: Openings in ice cover continued to expand ........................................ 31

Australia: EIS of Abbot Point proposes spoil from dredging be

disposed of on land and re-used ........................................................................ 33

Shipowners P&I Club issues safety guide on tug and tow ............................ 35

Two new LNG Bunker barge concepts .............................................................. 35

Shipping and the problem of facilitation payments ....................................... 37

Investment pours into freight industry despite shipping slump.................. 39

Asia – Europe: Shipping giants reduce sailings on world’s

busiest route.......................................................................................................... 41

U.S.: Plans for $4.5 billion South Carolina / Georgia port near

milestone ............................................................................................................... 42

Nicaragua canal construction: We couldn't find it .......................................... 44

India: Singapore's PSA facing $61 million damages claim

from JNPT .............................................................................................................. 47

Maersk and MSC container shipping alliance blamed for

Asia-Europe trade imbalance ............................................................................. 48

New central France rail service extends Le Havre-HAROPA

multimodal offering ............................................................................................. 49

U.S. watchdog joins German investigation of alleged payment

of bribes by Ford and Schenker in Russia ........................................................ 50

Tianjin Port explosions raise more questions over Chinese logistics .......... 51

China: Confusion surrounds Tianjin Port warehouse ownership ................. 53

China: Tianjin Port warehouse executives used connections to

get safety approvals ............................................................................................. 54




Vietnam: River silt buildup threatens Ho Chi Minh port

container trade ..................................................................................................... 55

Lebanon: Rubbish crisis shuts down port of Beirut ........................................ 56

India: Adani agrees Vizhinjam port concession with Kerala state .............. 57

Challenging times ahead for LNG shipping ...................................................... 58

Oceans: Overfishing and climate change, combined, intensify threats ...... 60

Europe: The noxious effects of shipping emissions are on the rise ............. 61

Italy: Port of Livorno unveils €800 million terminal expansion plans ........ 62

Australia: Brookfield acquires port and railroad operator for

$8.8 billion ............................................................................................................. 63

Hong Kong: Safe harbour for liner cooperation? ............................................ 65

Anatomy of a port disaster: The Tianjin Port explosions .............................. 67

Accountability in China: A blast at Tianjin Port sets off an

explosion online .................................................................................................... 69

How dangerous is the sodium cyanide found at Tianjin Port

explosion site? ...................................................................................................... 71

To service global trade, today’s ships and cargo are smarter

than ever ................................................................................................................ 74

Norway: Shipowners turn their backs on shipbreaking on beaches ........... 76

Nigeria: APM Terminals announces US$2 billion port investment .............. 77

Malaysia: $500 million upgrade of Samalaju Port .......................................... 78

U.S.: Shell Arctic drilling receives final approval ............................................ 80

EU-funded project Hercules-2 launched........................................................... 80

World shipping slump deepens as China retreats........................................... 81

U.S.: Crow Tribe signs partnership in Puget Sound coal port

development .......................................................................................................... 85




What the expansion of the Suez Canal shows about shifts in

global shipping ...................................................................................................... 86

U.S.: Vessel size raising pressure on ports ...................................................... 89

Portugal: Port of Setúbal launches new development projects ................... 91

Ireland: Dublin Port borrows €100 million for upgrade ................................ 91

Shore power to become most impactful tool in making ports

more energy efficient ........................................................................................... 92

Canada: Port of Montreal to invest US$1.14 billion in infrastructure ......... 93

Oman: Phase 3 expansion of Salalah Port planned ........................................ 94

South Africa: Green light for manganese terminal at Ngqura ...................... 94

China: At least 114 dead after Tianjin Port explosions ................................. 95

China: Initial insurance losses from Tianjin Port explosions seen

at $1 billion - $1.5 billion .................................................................................... 96

North Africa: Finding Utica’s hidden harbor .................................................... 98




Reefer madness

23/08/2015

Despite a variety of adverse economic and climatic conditions, perishable reefer

cargo growth appears unstoppable, according to Drewry’s latest Reefer Shipping

Market Annual Review & Forecast.

Worldwide perishable reefer trade increased by 1.8% in 2014 – reaching almost 190 million

tonnes. Although this was barely half of the growth seen in 2013 it nevertheless represented

a continuing growth pattern. With the exception of the citrus trades, all perishable reefer

cargoes saw trade growth in 2014 (see Figure 1).

Having also reviewed key bi-lateral trades in the report for the first time, some interesting

figures are revealed – not least of which being a significant decrease in the citrus trade over

the last three years between the US and Japan.

Figure 1: Worldwide perishable reefer trade (million tonnes)

Source: Drewry Maritime Research, Reefer Shipping Market Annual Review and Forecast 2015/16

The seaborne trade growth of perishable reefer cargoes was particularly strong in 2014 –

increasing by 4.9% year-on-year, far higher than the average of the last decade. Again,

only the citrus trades failed to perform. Conversely, the fish/seafood trades had an

exceptional year in 2014 – with seaborne cargo growth in excess of 2 million tonnes.

The growth in reefer cargo is impressive not only because it has occurred consistently

throughout the last decade, but also because it has done so despite a global economic

downturn, severe weather conditions in many growing areas as well as port and terminal

strikes and other industrial actions. Regardless, it seems the perishable reefer industry is

able to withstand all of this – at least on a global basis – whereby the total seaborne volume

in 2014 exceeded 100 million tonnes of cargo for the very first time.




Figure 2: Worldwide and seaborne reefer cargoes, 2010-14 (million tonnes)


The share of cargo between the reefer containership mode and the specialised reefer mode

continued to grow in favour of the former – with over three-quarters of the perishable reefer

seaborne trade being shipped by reefer containership services in 2014. By 2019 reefer

containership services are expected to carry over 23 million tonnes more cargo than they did

in 2014.

Figure 3: Seaborne perishable reefer cargo modal split


Our view

Container carriers will continue to increase their share of the seaborne reefer trade, but

specialised carriers should only see a minimal loss of actual cargo volumes as a result of the

overall increase in reefer cargoes forecast.

[Drewry Container Insight]




Pirates hit six vessels in Malacca and Singapore Straits in less

than 30 hours

22/08/2015

Pirates hit six vessels in the Malacca and Singapore Straits in less than 30 hours

on Friday and Saturday, successfully boarding five.

According ReCAAP all the incidents took place in the eastbound lane of the traffic separation

scheme with pirates hitting three vessels in the early hours of 21 August – the first at 2-

30am, one late in the evening, and a further two in the early hours of 22 August, the sixth

incident taking place at 5-35am.

The vessels involved were the tankers Advantage Summer, Navig8 Stealth and Elbtank

Denmark; the containerships Maersk Lebu and Atout; and the bulk carrier Peace Bright. All

the attacks involved four or five pirates, armed with knives. They were successful in

boarding, except the Advantage Summer where they sighted trying to board the vessel at

the stern from a speedboat.

In all cases the pirates fled when spotted, and were only successful in stealing personal

effects in the case of the Elbtank Denmark. No seafarers were harmed in the incidents.

“Considering the close interval of time and proximity of these incidents, the perpetrators

could possibly be from the same group. From the description of the incidents, the

perpetrators operated in about four - five persons, armed with knives and were

opportunistic in nature without targeting specific vessels,” ReCAAP said in an incident alert.




“They aborted boarding when crew was alerted, and escaped empty-handed when the alarm

was raised without harming the crew.” However, the concern is there could be more attacks.

“Of concern was their persistence in ‘hovering’ in the vicinity seeking out their next target,”

ReCAAP said.

For vessels underway in the area, one of the world’s busiest sealanes, it strongly

recommended they should, “enhanced vigilance and take extra precautionary measures”.

[Seatrade Maritime News]

Djibouti: A hub at the Horn

21/08/2015

The importance of maritime links is growing in East Africa, especially for

landlocked states. The port of Djibouti on the Bab-el-Mandeb strait is set to

invest nigh-on USD 900 million in eight new terminals by 2017. Rail links to

Addis Ababa in the hinterland have already been reestablished.

Eight new terminals are being established in Djibouti.

It is no coincidence that the UN’s third international conference on financing for

development, held in mid-July, took place in the Ethiopian capital Addis Ababa. Fiata

attended the event, and presented freight forwarders’ interests for a sustainable logistics

industry at the global level. The concrete steps are due to be negotiated at a further UN

summit in New York in September, however.

In Addis Ababa the Common Market for Eastern and Southern Africa (Comesa), which now

has 19 member states with around 400 million inhabitants, pushed forward with its regional

integration efforts. In this context Djibouti, at the Horn of Africa, represents the most

important gateway for imports and exports for Ethiopia, South Sudan and Uganda. Saad




Omar Guelleh, the director general of the port, said recently that it is now set to be

expanded into a regional hub. The acquisition in 2013 of a 23.5% stake in the company Port

of Djibouti SA (PDSA) by China Merchants Holdings (International) (CMHI) was a milestone

in this process, as is DP World’s involvement since 2011 in the gateway’s Doraleh Container

Terminal (DCT).

The Doraleh Container Terminal is going to be enlarged by the addition of the new 690 ha

Doraleh Multipurpose Port for ro-ro, dry and breakbulk cargo. PDSA and CMHI will invest

USD 590 million in the project. The new port of Tadjourah, expected to commence

operations in March 2016, has been designed to export 4 million t of potash annually. The

port of Ghoubet, which will be able to handle 6 million t of salt from Lake Assal every year,

will be ready by December. And finally the new livestock port of Damerjog will be

established. There are also two airports under construction, further underlining Djibouti’s

plans to become a key hub.

The hinterland – a classic Achilles heel – is not being neglected either. A 752 km railway line

linking Djibouti and Addis Ababa was opened in June. Victor Shieh, editor-in-chief of Port

Overview Africa 2015, published for the first time in July, said the track represents

«remarkable progress». A long-awaited link from the Indian Ocean through to Guinea in

West Africa has thus overcome a first hurdle.

[International Transport Journal]

Nicaragua canal: CSA Global and HKND sign agreement to map

$50 billion project

21/08/2015

Plans to develop the $50 billion Nicaragua Canal project progressed this week

with the signing of an agreement between Australian consultants CSA Global and

HKND Group, which is managing the project,, to conduct detailed aerial mapping.

“The survey is a major step in the construction development process and supports pre-

works planning, design and engineering for the canal and infrastructure," John Murray,

senior adviser for HKND Group said.

The survey will feature “aerial mapping of topography, photography and geophysical and

geological data” and will rely on advanced Precise Point Positioning (PPP) technology to

collect data. It expected to start in September 2015 and to be completed by March 2016.

Data to challenge environmental controversy

The ambitious Nicaragua Canal project aims to provide an alternative to the Panama Canal

expansion and has largely been bankrolled by chinese investment to date. The canal is

expected to be completed by 2019 and accommodate an estimated 5,100 ships per year.




Construction on the 278 km canal started in January this year with backing from the

government but opponents have decried the fact that the concession was awarded without

a bidding process or any feasibility, socio-economic or environmental impact assessments.

Environmental scientists have added further opposition with the publication of a paper that

claims the development will irreparably damage ecosystems and cause “significant

environmental and social impairments”.

“Of particular concern are: damage to Lake Cocibolca, a unique freshwater tropical lake and

Central America’s main freshwater reservoir; damage to regional biodiversity and

ecosystems; and socio-economic impacts,” Pedro Alvarez, one of the 21 co-signed authors

of the paper published by the American Chemical Society.

It is partially to tackle these claims that the CSA survey will use high precision airborne

laser radar to detect clearly the actual topography and surface water.

“When it is applied to the section of Lake Nicaragua, the lakebed topography of 8 to 10

meters below surface can be displayed with detail. This aerial geophysical prospecting

technology can also detect materials of 150 to 200 meters below ground level, including

their hardness and 3D distributions,” Murray explained.

The survey will cover a 10 km-wide area along the 276 km proposed canal route alignment

connecting the Atlantic to the Pacific and the 2km-wide circumference of Lake Nicaragua.

The data acquired will be formatted, processed and interpreted by experts to produce high

resolution mapping for 3D topography, 1:2,000 contours, 3D geology, surface vegetation

and 3D imagery.

[Port Finance International]

First offshore pipeline crosses Arctic Circle

21/08/2015

On August 21, the Polarled gas pipeline crossed 66 degrees and 33 minutes north

of the equator becoming the first pipeline to cross the Arctic Circle.

The 482-kilometre long and 36-inch wide pipeline will run from Nyhamna in western Norway

to the Aasta Hansteen field located 300 km from land in the Norwegian Sea.

Polarled will also be the deepest pipeline on the Norwegian continental shelf as the Aasta

Hansteen field lies in water depths of 1,260 meters. Furthermore, it will be the first time a

36-inch wide pipe is laid in such deep waters anywhere in the world.




The Aasta Hansteen discovery was made in

1997 and the field is operated by Statoil.

Together with Haklang and Snefrid Sør, the

recoverable resources are estimated at 47

billion cubic meters of gas.

The world’s largest pipelaying vessel,

Solitaire, from Allseas, is carrying out the

pipelay job and is advancing slowly, exactly

24.4 meters at a time, every sixth minute or

so, around the clock.

Pipelay operations

The vessel will arrive at the Aasta Hansteen

field in September, if weather permits. Even

early in the autumn high waves and strong

wind leading to interruptions must be

expected, however, the weather has been

good for a long period now.

“We are progressing well at the moment, conditions have been good for more than 50 days

in a row, and at the end of July we set a record of laying 4.8 kilometers of pipes in one

day,” says Kenneth Aksel Kristensen, one of Statoil’s company representatives on board the

vessel.

The vessel needs a constant supply of pipes. Every pipe is 12.2 meters long, and the vessel

is laying around four kilometers of pipes a day. This means that it needs a supply of more

than 300 pipes a day, filling two to three boats every

day.

Two cranes are lifting the 12-15-tonne pipes on board,

and when one boat is empty it only takes a few hours

before the next of six shuttle boats arrives with more

pipes.

“The pipes arrive from Wasco in the city of Mo i Rana,

where they are coated. This means that they have

been given a concrete layer to protect them from

trawling and make them heavier,” explains Kristensen.

When a pipe is lifted on board the 376-meter Solitaire

it enters a huge assembly line. The pipe is sent from

station to station where specialized operators are

welding and checking the pipe before it becomes part

of the long tail behind the Solitaire.




The Solitaire crew is working around the clock. It takes around 90 minutes from when a pipe

is lifted on board and enters production until it has become part of the ever-extending

Polarled pipeline. There are 410 people on board the vessel, including two asset owner

representatives from Statoil and eight people from DNV GL – who are also part of the day

and night operation.

The pipeline is not laid in a straight line: “We have examined the seabed thoroughly in

advance to find the best route and also to avoid corals and large rocks,” says Arne Fosse,

Statoil’s head of the Polarled construction work.

Start-up

At start-up, the gas from Aasta Hansteen will be the only gas passing through Polarled, but

the pipeline has a diameter of 36 inches and capacity for more gas:

“We have therefore installed six connection points, call it future slip roads to the new gas

highway,” says Håkon Ivarjord, Statoil’s project venture manager for the Polarled

development project. “Polarled will open up for gas export to Europe from a completely new

gas province, and with the infrastructure in place it will also be more attractive to explore

the surrounding area.”

[Maritime Executive]

Offshore adrift on a sea of cheaper oil

21/08/2015

For many of the markets covered by Shipping Intelligence Weekly, the first part

of 2015 was relatively kind.

Rates for crude and product tankers were riding high, boxship charter rates picked up for

the first time in years and VLGC rates have hit levels above 2014 averages. Even Capesizes

have recently shown signs of life. But spare a thought for the offshore sector, the hardest

hit by the oil price decline.

Price drop

Back in the downturn of 2008/09, most commodity and shipping markets felt the negative

impact and the offshore markets were no exception, with dayrates dropping by an average

of around 35% (see graph).

Moving forward to the current time, however, the 50% decline in oil prices since mid-2014

has brought some relief for merchant vessels, in the form of cheaper bunkers, and

stimulated oil demand, helping trade. But cheaper oil has meanwhile put heavy pressure on

the offshore sector, where field operators already faced cashflow problems as field




developments ran late and over-budget. The response has been sharp cuts in exploration

and production (E&P) budgets. It is estimated that spending on offshore E&P will fall by

19% this year.

Investment cuts

This means investment decisions on new projects have been deferred, whilst expenditure to

enhance recovery from existing fields has also slipped. Accordingly, drilling demand has

fallen, just as deliveries of new jack-up and floating drilling rigs have accelerated. Rates for

ultra-deepwater floaters are now almost 50% below their late 2013 peak, at around

$300,000/day. This reflects the reduced demand in frontier areas for exploration and

appraisal drilling, not helped by the corruption investigations in Brazil. Meanwhile, jack-up

drilling rig rates have been equally hard hit, with shale gas production killing demand in one

of their traditional major markets, the shallow water Gulf of Mexico. Utilisation of jack-ups is

below 80%, and rates have fallen more than 35% to around $100,000/day.

Less support for vessels

This has had rapid knock-on consequences. The 5,365 vessels and 1,133 owners in the OSV

market are also exposed to the downturn in exploration drilling and operational field

maintenance. Fewer active rigs harm the AHTS market for rig towage and positioning, whilst

PSVs rely on the growth in active offshore installations (drilling rigs, plus mobile and fixed

production platforms) to add to demand. Rates for OSVs are down in all regions, by over

35% on average in terms of the index on the graph. PSVs have a further problem of a

robust supply growth to contend with (and close to 40% of the fleet on order for the largest

units over 4,000 dwt).




Of course, markets are cyclical, and the offshore sector had its moment in the sun during

2012/13, at a time when several of the merchant shipping markets were in the doldrums.

Although the current oversupply in world oil markets of around 1.5m bpd is a clear short-

term hurdle, projected demand trends suggest that higher oil prices remain a likely prospect

in the long-term, and the improvement in other sectors suggests that there will eventually

be light at the end of the tunnel for offshore too. It’s just that it could be a little way off yet.

[Clarksons]

Future of China-Pakistan economic corridor bleak?

21/08/2015

China has reportedly placed Pakistan in a financial bind, with Pakistan apparently

failing to comprehend the finer aspects of the agreement linked to the landmark

project.

Is Pakistan being pushed into a corner by China

with regard to the recently signed bilateral

economic corridor deal? It certainly appears to be

so, with highly placed sources saying the pact has

run into rough weather.

According to them, China has reportedly placed

Pakistan in a financial bind, with the latter

apparently failing to comprehend the finer

aspects of the agreement linked to the landmark

project.

These highly placed sources say that to begin

with, the funding from China will be in the form of

loans offered at very high rates of interest, in most cases, higher than other commercially

available options.

The bureaucracy in Pakistan is learnt to have fought tooth and nail to reduce the damage to

the state exchequer, but now appears to have been overwhelmed by real politick.

The sources further state that China not only wants better than market returns for the

money being invested in the proposed China Pakistan Economic Corridor (CPEC), but also

wants Islamabad to select only Chinese firms for all CPEC-related contracts.

For instance, business rivals of China are being quoted, as saying that Beijing is putting

pressure on Pakistan to make sure that work related to the Gwadar Port Development

Project is given only to a Chinese company selected by Beijing.




Officials in Pakistan have reportedly railed against such interference, but the missive from

China appears to be clear, no Chinese company means no project, and therefore, no money.

According to the highly-placed sources, Pakistan, as a result, has been left with no option

except to hold up the tendering process which was to conclude on July 30.

With the process halted because of the Chinese firms only clause, the other contenders for

the proposed economic corridor, including those from the United States, the Gulf and South

East Asia, are in commercial limbo not of their making.

The sources say that

Pakistan has lost face in the

matter is of no consequence

to China, and it is more than

obvious that Beijing won't

countenance the possibility

of a likely American presence

at the strategically important

Gwadar Port. Pakistan,

therefore, can be expected

to nominate a Chinese

company sooner than later.

The CPEC was announced by

China and Pakistan with

much fanfare in April this

year, during the visit of

Chinese President Xi Jinping.

The CPEC is a 3000-km-long

network of roads, railways

and pipelines that will

eventually link China's

Xinjiang Uygur region with

Pakistan's Gwadar Port.

This Belt and Road initiative is aimed at reviving the ancient trade routes that once spanned

Asia, Africa and Europe.

Then, the leaderships of both countries were being wholeheartedly praised. China,

especially, was being looked upon with awe for committing over $45 billion for the project.

India, on the other hand, was worried about projects in Pakistan-occupied Kashmir. Prime

Minister Modi is reported to have mentioned his concerns with President Xi Jinping when he

visited Beijing in May 2015.




Among the questions doing the rounds is why will a wily China commit such a huge amount

of money with a country as unstable as Pakistan. If looked at from Beijing's perspective for

instance, its access to the deep sea port of Gwadar in Balochistan, which is located at the

mouth of the Persian Gulf, just outside the Strait of Hormuz, is beneficial, as it serves as the

gateway for about 20 percent of the world's oil.

Through Gwadar, China gains access to oil from the Middle East, and would be in a position

to transport it via land or railway to the northwestern Chinese city of Kashgar, which located

about 3000-kilometers away. China has secured the right to operate the Gwadar Port for 40

years, and observers here are of the view that this has strong military possibilities for

Beijing.Operating out of Gwadar, also gives China access to Gulf countries, and a chance for

it to consider building a naval base on the Arabian Sea in the future, sources have said.

[dna]

Australia: $1 billion terminal to drive Sydney top spot

21/08/2015

Sydney is set to become the largest container port in Australia and will supersede

Melbourne as a result of the lack of rail connections, with Sydney looking to

focus more on rail with its US$1.5 billion rail-freight precinct to boost its

business and the potential for transporting shipping containers, according to the

Sydney Morning Herald.

The potential of strong rail connections was seen in North America recently, with Canadian

Rail outlining plans to create a rail terminal as a way to steal some of the booming rail traffic

coming into the US.

Maurice James, Managing Director of Qube Logistics, said: "We are already seeing the

growth rates of containers through Port Botany exceeding Melbourne. It's at risk of losing its

number one container port status because of the economics of moving freight and the

potential cost of going forward.” Qube is planning to concentrate on developing the

Moorebank rail freight precinct in south-west Sydney in the hope that this facility will

become the biggest intermodal freight hub in Australia.

The Sydney Intermodal Terminal Alliance will spend $1.5 billion developing the 240-hectare

Moorebank over the next 10 years in a bid to avoid the surge in transporting freight via

road. Mr James concluded: "Our master plan is to put in 850,000 square metres of

warehouse, an import and export rail terminal, and an interstate rail terminal, handling a

total of 1.5 million.

[Port Technology International]




Myanmar: China’s plan to develop a deepwater port at

Kyaukphyu faces roadblocks

21/08/2015

A new deepwater port that is planned in Myanmar could provide a big boost to

the China-backed Maritime Silk Road (MSR) initiative.

Yet, the problems being encountered in setting up the port at Kyaukphyu also show that

overcoming ‘soft’ impediments posed by a downturn in China-Myanmar diplomatic ties,

issues of human displacement, and environmental protection are equally important to reap

the full benefits of this mega project. The Hindu has learnt that ambitious plans are afoot to

develop the Kyaukphyu, which, once set up, will become Myanmar’s sole deepwater port.

The port, at Ramree Island in the Bay of Bengal, will become operational when the first

deep sea berth is set up in 2020. Five other berths will be added in the following decade.

The second phase of the project will commence in 2030 and four additional berths will be

added in the remaining six years. “The Yangon port will become saturated by 2020 and

therefore establishment of the Kyaukphyu port has become urgent,” said Kyaw Hlaing,

president and research director of Myanmar Survey Research, in a conversation with The

Hindu. Mr. Hlaing pointed out that once the port clocks a handling capacity of 7 million

twenty-foot equivalent (TEU) containers, it “will play very significant role in Maritime Silk

Road and it will be a game changer for the region, especially for Southwest Provinces of

China.”

Inspired by the successes of Shanghai and Guangzhou, the Chinese have emerged as the

architects of MSR, which will cover coastal zones that spread from parts of the Pacific and

Indian Ocean rims to stretches along the Mediterranean coast.

The project has the potential to generate millions of jobs through development of ports,

marine industry, industrial parks, smart cities, as well as tourism and entertainment centres

along a vast Eurasian maritime space.

The location of the Kyaukphyu port in the Bay of Bengal is of immense strategic significance,

as it can service trade not just with China’s Yunnan province — in itself a gateway to

Vietnam and Laos besides Myanmar — but also parts of India. In fact, the natural harbour of

Kyaukphyu at one time aided the rice trade between Kolkata and Myanmar.

The port will indeed help China avoid the ‘Malacca trap’ by channelling trade through

networks that would bypass the U.S. dominated Malacca straits — the narrow passage

between Malaysia and Sumatra that links the Indian and the Pacific Oceans. For China,

avoiding the Malacca straits has become particularly urgent, as the U.S. has strengthened its

military presence in the Pacific under its ‘Asia Pivot’ doctrine.




The Kyaukphyu deepwater project is part of a larger developmental framework that includes

the establishment of a Special Economic Zone (SEZ), with a vision of fostering a ‘mini-

Singapore’ in Myanmar’s impoverished Rakhine State.

Just 100 km away from the rich gas fields in the Bay of Bengal and 400 km northwest of

Yangon, the coastal town of Kyaukpyu fronts a natural harbor, offering a shipping route to

the Indian Ocean and onwards to south Asia, Africa and the Middle East. Already, it has

attracted billions of dollars of Chinese and South Korean investment in gas and oil.

China is already leveraging the Kyaukphyu area for its energy security, by avoiding Malacca

straits for some of its oil and gas shipments. The construction of the 2.5 US$ billion Sino-

Myanmar natural gas pipeline was completed in July 2013. The 2,520-km pipeline starts at

Kyaukpyu on Myanmar's western coast, enters China at Ruili in Yunnan province and ends at

Kunming. The pipeline was financed by the China National Petroleum Corporation (CNPC)

and Myanmar Oil and Gas Enterprise. It has an annual delivery capacity of 12 billion m3 and

is supposed to deliver 10 billion m3 a year.

Sino – Myanmar Oil and Gas Pipelines. Image source: DerSpiegel

Hiccups

As Myanmar opens out to the rest of the world, including the West, the once-thriving ties

between Myanmar and China seem to have taken a hit, obstructing big infrastructure

projects. It is now obvious that the Myanmar government has, for the moment, scuttled a




proposed rail project that would have linked Kyaukphyu port with border town of Muse, prior

to its eventual extension to Kunming. “The MoU for the rail project that was signed in 2011

expired last year. But with the development of the port and the SEZ, connectivity would be

required. So, in the future, we may also consider the construction of the rail,” observes Mr.

Hlaing.

The Myanmar government’s earlier decision in 2011 to suspend work on the 6,000

megawatt China-funded Myitsone hydropower dam had already signalled the growing

dissonance in Sino-Myanmar ties.

Nevertheless, some green shoots have emerged, suggesting that diplomatic relationship

between the two countries maybe on the mend. Last month Myanmar authorities, in a

goodwill gesture, unexpectedly released 155 Chinese nationals who had been earlier

detained for illegal logging. Party-to party-relations between the Communist Party of China

(CPC) and Myanmar’s influential National League for Democracy (NLD) party have been

activated. They were in fact on the top of the agenda, when the NLD leader and Nobel icon

Aung San Suu Kyi visited Beijing in June.

Nevertheless, the Kyaukphyu project may have to overcome environmental and human

displacement concerns. Complaints abound about low compensation paid for land acquired

for the SEZ. There are also fears that without vocational training, outsiders would benefit

more from the jobs that the project would create. These criticisms once again underscore

the point that the compelling economic logic of MSR-linked projects, including Kyaukphyu,

can prevail only when an integrated approach, respectful of local conditions and premised

on a lawful grassroots-level dialogue, is pursued.

[The Hindu]

India: Larsen & Toubro drops port development project in

Gujarat

21/08/2015

Engineering and construction firm Larsen & Toubro has decided not to pursue a

project to develop port in Kachchigarh, Gujarat, citing environment reasons.

"...pursuant to marine surveys carried out at Kachchigarh and detection of the presence of

growing coral reefs in the vicinity, it was communicated to GMB (Gujarat Maritime Board)

that the company did not seek further extension to the Letter of Intent that had expired in

August 2013," Larsen & Toubro said in a regulatory filing.

L&T Infrastructure Development Projects (L&TIDPL), a subsidiary of L&T, had incorporated

a wholly-owned subsidiary L&T Port Sutrapada Pvt Ltd to implement the project awarded by

GMB in 2008 for setting up a greenfield sea port at Sutrapada in Gujarat on build, own,

operate, transfer (BOOT) basis, it said.




While the company had geared itself for undertaking the project, GMB faced severe difficulty

in allocating the required land for the project, it said. "In July 2010, GMB approved shifting

of the location of the project site to Kachchigarh, Dwaraka District for development of the

sea port. The subsidiary was re-christened as L&T Port Kachchigarh Ltd," it added.

[NDTV]

U.S lawsuit accuses Thai supplier of selling prawns produced by

slaves

21/08/2015

A U.S. lawsuit accusing retailer Costco Wholesale Corp. of knowingly selling

frozen prawns linked to a company that uses slave labor was described on Friday

as “entirely without merit” by Thai seafood supply company CP Food Products.

A lawsuit filed in the federal court in San Francisco in California on Wednesday sought a

court order to stop Costco from selling prawns without a label stating that slave labor was

involved in the farm raised prawns.

Thai fishing industry relies on slave labor. Image source: Bluelivingideas.com

The claim, citing federal and state rules on labelling and slavery, alleged Costco was aware

the prawns bought from its Southeast Asian producers came from a supply chain dependent

on ships involved in human trafficking and labor abuses.

The exporter, CP Food Products Inc, and its parent company, Thailand’s Charoen Pokphand

Foods PCL, were also named in the lawsuit that was filed on behalf of California resident

Monica Sud, a member of Costco which is run as a warehouse club. CP Foods on Friday said

it had received a copy of a complaint filed in California concerning its shrimp business.




“CPF believes that it has complied with all applicable laws and regulations, and that the

complaint is entirely without merit,” the company said in a statement. Sud’s lawyers are

seeking class-action status for the lawsuit, which means if granted it could affect millions of

customers in California.

Costco, the third largest U.S. retailer, said these allegations over issues in the Thai seafood

industry had been well publicized for more than a year. This followed an investigation by

Britain’s Guardian newspaper into the prawn supply chain that found large numbers of men

were bought and held against their will on fishing boats off Thailand used to farm prawns

sold in some of the world’s leading supermarkets.

The investigation found Charoen Pokphand (CP) Foods, the world’s largest prawn farmer,

was buying fishmeal to feed to its farmed prawns from some suppliers that owned, operated

or bought from fishing boats manned with slaves.

In response to the allegations of labor violations, CP Foods said in a statement in March that

it had “locked down our supply to 30 by-catch fishmeal suppliers and 380 fishing vessels, for

which we have full visibility and traceability on sustainability and social issues”.

It said it had also stepped up audits and monitoring of fishmeal suppliers, while the

company’s fishmeal traceability and audit system underwent third-party verification by an

independent auditing firm.

The U.S. State Department’s 2015 Trafficking in Persons Report last month singled out the

“enslavement of fishermen in Southeast Asia”.

Costco said it has been working with and would continue to work with various stakeholders,

including the Thai government, other retailers, and Thai industry, to address the issues that

have surfaced. “In the meantime, all of our customers know that if they are dissatisfied with

any purchase from Costco Wholesale they can return the item for a full refund,” Costco said

in a statement.

[Reuters]

China: Four new fires at Tianjin explosion site, widespread

safety hazards found

21/08/2015

Four new fires have broken out at the site where two huge blasts last week killed

116 people, Chinese state media reported Friday soon after officials said safety

hazards were found at almost 70 percent of firms handling dangerous chemicals

in Beijing.




The explosions in a warehouse storing dangerous chemicals devastated an industrial park in

the northeastern port city of Tianjin late on Aug. 12. More than 700 people were injured and

thousands were evacuated because of the risk posed by chemicals stored at the site.

The official Xinhua news agency said Friday rescue crews were rushing to the site after four

new fires broke out. It said one of the “combustion points” was in a logistics site for

automobiles near last week’s blasts. The other three were within the central blast area, it

said without giving any explanation of the cause of the fires.The news agency also said the

death toll rose to 116 on Friday from a previously reported 114, and 60 people were still

missing.

State authorities have confirmed that more than 700 tonnes of the deadly chemical sodium

cyanide were stored at the Tianjin warehouse that blew up. Nationwide inspections of

facilities handling dangerous chemicals and explosives were ordered by China’s State Council

after the blasts last week. More than 100 chemical firms across seven provinces have been

told to suspend operations or shut down due to safety violations in the recent days,

announcements by regional governments show. That includes 19 companies in Hubei

province, 26 firms in Anqing city in the southeastern province of Anhui, two in the capital,

Beijing, and 39 in Zhejiang province.

In Beijing alone, an inspection of 124 sites that stored dangerous chemicals found hazards

at 85 firms, Xinhua said late on Thursday, citing Beijing’s work safety bureau.

Thousands of dead fish

The State Council said in a statement on Thursday that advanced equipment and the best

expertise must be used to prevent major environmental incidents in the future.

Pictures taken by Reuters on Thursday showed workers scooping thousands of dead fish out

of the Haihe river near Tianjin, a day after authorities had declared the city’s drinking water

was safe. Tianjin officials said the dead fish were caused by regular seasonal low oxygen

levels in the water and were not related to the blasts.

Authorities however have also warned that cyanide levels in waters around Tianjin port, the

world’s 10th-busiest and the gateway to China’s industrial north, had risen to as much as

277 times acceptable levels.

The blasts at Tianjin also prompted a nationwide review of China’s industrial safety record,

which has struggled to keep pace with the breakneck speed of China’s economic growth.

China has struggled in recent years with incidents ranging from mining disasters to factory

fires, and President Xi Jinping has vowed that authorities should learn the lessons paid for

with blood.




Executives of Tianjin Dongjiang Port Ruihai International Logistics, the firm whose

warehouse exploded, have said they used connections to obtain safety approvals. The site

was found to be too close to nearby homes.

Inspectors carrying out the safety reviews in Beijing found that security personnel at a

branch of Sinopec Corp, Asia’s largest refiner, were unfamiliar with how to handle an oil tank

fire, Xinhua said. “Companies that fail our inspections will be ordered to suspend operations,

and their warehouses will be put under 24-hour surveillance,” Xinhua quoted Qian Shan,

vice-head of the Beijing work safety bureau, as saying. Despite the infractions found at the

Sinopec branch, Xinhua did not say that the facility would be shut.

Beijing has also suspended operations at firms that make or deal in highly toxic chemicals

and explosives from Aug. 17 to Sept. 6 in preparation for a military parade and athletics

event, Xinhua said.

On Wednesday, three oil and gas firms close to residences were told by authorities in the

cities of Hangzhou and Shenzhen to halt operations.

[Reuters]

Colombia: Puerto de Buenaventura alista su quinto terminal

marítimo

21/08/2015

Para marzo del 2016 el nodo portuario de Buenaventura contará con un quinto

terminal marítimo que aumentará la competitividad de la región que sigue

invirtiendo en este sector.

Se trata de la Sociedad Puerto Industrial Aguadulce un proyecto que en este momento tiene

un avance del 70% de las obras y que se convertirá en otra opción para el empresariado de

Colombia que desde el Pacífico aspira a ampliar su comercio mundial y en especial con los

países de la Alianza (México, Chile y Perú).

El 92% de la inversión que se realiza en este puerto corresponde a capital extranjero de

compañías de Filipinas y Singapur, que cristalizaron este proyecto del que se venía hablando

en Buenaventura desde los años noventa.

La primera fase del puerto tiene un costo de US$322 millones de inversión, pero se tiene

presupuestada una segunda etapa con inversiones similares.

“Ya contamos con cuatro grúas pórtico Súper Post-Panamax con alcance para realizar

alrededor de 40 movimientos por hora y una capacidad de levante de 60 toneladas”, explicó

Miguel Abisambra, gerente de la Sociedad Puerto Industrial Aguadulce.




Las obras, cuando estén terminadas, serán la fuente de empleo de más de 600 personas de

Buenaventura. “Se ha hecho un trabajo de inversión social importante, donde se ha

capacitado en el Sena (Servicio Nacional de Aprendizaje) y Unipacífico (Universidad del

Pacífico) a las personas de la comunidad”, aseguró el empresario.

Durante la construcción del puerto, se están generando 1.800 empleos entre mano de obra

calificada y no calificada.

[Mundo Maritimo / El País]

Spain: €466.8 million for landside access improvements of ports

20/08/2015

Spain's National Ports Authority has approved a total of 29 projects to benefit

from the Port Terrestrial Accessibility Finance Fund.

These will be eligible for a total of €466.8m, which will be available until 2019, of which

€113.7m will be made available in 2016. Of the funding, €441.5m relates to rail connections

and €25.3 million to upgraded road access. A total of 50% of the profits generated by each

port will be transferred to the fund.

Up to €363.4m of the planned investment is for connections within the port area, with the

main projects at the ports of Avilés, Barcelona, Escombreras, Ferrol, Sagunto and Sevilla. A

further €102m involves upgrades to the existing network. Under this, the Algeciras-Bobadilla

rail line will be improved; a new alignment is to be built at Camarillas in Murcia; renovation

of the rail line will take place between Sagunto and Zaragoza and between Miranda and

Bilbao; while the line between Cadiz and Cabezuela will be improved.

[Port Strategy]

Argentina: Tender for new concession of Terminal 5 at the Port

of Buenos Aires

20/08/2015

Following three years of uncertainty, Argentina's General Ports Administration

(AGP) is to issue a new tender covering the operation of Terminal 5 at the Port of

Buenos Aires.

The existing BACTSSA concession officially expired in 2012, but has temporarily been

extended. The new concession will last for a minimum period of four years, with the

possibility to extend that period by a further twelve months.




Investment of $13m will have to be pledged, covering both civil works and equipment

upgrade, while the new concessionaire will be expected to maintain the present workforce at

existing labour rates and seniority levels for at least two months.

[Port Strategy]

Honduras: Initiative to reactivate port in Punta Castilla

20/08/2015

A call for expressions of interest has been made for the project "Reactivate,

modernize and develop the port terminal of Punta Castilla, Trujillo, Colón"

project.

The Commission for the Promotion of Public-Private Partnership (COALIANZA) is the

institution responsible for managing and promoting the recruitment process for the

implementation, development and management of infrastructure and public services,

enhancing the capacity to invest in the country, in order to achieve comprehensive

development of the population.

COALIANZA has received a project proposal from a private initiative to "reactivate,

modernize and develop the port terminal of Punta Castilla.” The objective of this public

works investment project is to promote employment and contribute to the development of

the region. Any rival interests have until August 27 to present their own projects, which will

be assessed by COALIANZA.

[CentralAmericaData]

Panama Canal is about to double in capacity

20/08/2015

As many may be aware, the Panama Canal is being expanded to double its

capacity. The construction of a third lane has been on track since 2007,

scheduled for completion in 2016.

The new lane will be able to support:

Containerships up 13,000 twenty-foot equivalent units (or TEUs), up from roughly

5,000 TEUs.

Bulk commodity ships like gas carriers, tankers and dry bulk, up to 120,000

deadweight tons (DWT), up from approximately 80,000 DWT.

In a report issued Thursday, Credit Suisse analyst Gregory Lewis and his team looked into

the expansion project and share some key takeaways.




According to the note, while the expansion of the Panama Canal “will provide ripples across

the maritime sector,” the experts expect to see the biggest changes in the containerships

and gas sectors. In fact, they noted, ports in the U.S. Gulf and East Coast are preparing

themselves, and have already spent more than $3 billion on infrastructure expansion, hoping

to handle more capacity going forward. Moreover, they remarked, the expansion should help

better connect Asia with the Americas, and the West Coast of South America with Europe.

The biggest winner

One obvious question regarding the expansion project is: who’s benefiting?

The analysts at Credit Suisse looked back at the beginning of the venture. When expansion

started in 2007, the North American shale revolution had not even began. However, they

assured that North American natural gas seems to be posed to benefit the most.

“NAM natural gas production growth (4 percent CAGR last 10 years) has been so robust that

the U.S. will start to export LNG next year,” the experts expounded, adding this was

inconceivable less than 10 years ago.

“The Panama Canal Authority (ACP) estimates that ~80 percent of the world’s LNG fleet

should be able to take advantage of the new lock system, reducing trip times from the U.S.

Gulf to Asia by a few week,” they continue. “LNG vessels are scheduled to have their own

toll regime for the first time, including a ballast toll reduction for round-trip voyages.”

Other canals

Finally, the analysts looked into the alternatives to the Panama Canal: the Suez Canal and

the Nicaragua Canal. The Suez Canal has been expanded recently and stands as an




alternative to the Panama Canal. Therefore, the experts think this should help moderate tolls

for the movement of containers from the Far East to USEC through the Panama Canal.

On the other hand, the Nicaragua Canal is not only costly, but quite unviable at the time.

[Benzinga]

U.S.: Ports needed for exporting Montana coal

20/08/2015

Montana’s nickname of The Treasure State is touted on our flag with ‘Oro Y

Plata’– gold and silver, based on our mineral wealth. We have far more treasures

in our state in the way of natural resources including wood products, oil and coal.

At last month’s PNWER – Pacific Northwest Economic Region – meeting at Big Sky, I

attended an excellent meeting on coal. Diverse panelists from western Canada and the

northwestern states presented their findings on this important natural resource.

One of the panelists, Del Laverdure, a senior advisor to Chairman Old Coyote of the Crow

tribe, spoke of the importance of shipping coal out of the region to world markets. Two-

thirds of their budget is derived from the sale of coal and could produce a benefit of $107

million annually to employ their members and reach economic prosperity on the reservation.

There is now a chokehold on shipping coal because of the delays in permitting two

deepwater ports in Washington state. Both future ports are going through multiple NEPA

and SEPA documents to be approved.

One of the ports will be located in Longview on the Columbia River. Longview was the first

privately planned U.S. community and is home to many manufacturing centers and

businesses located along the river.

One of the past Longview facilities, Reynolds Aluminum, is gone and now replaced with

Millennium Bulk Terminals. They have partnered with the landowner, Alcoa, to clean up the

site. They plan a state of the art rail system to supply the world with dry products, such as

coal, and are working with the federal and state governments for clearance once again.

Another port seeking approval is north of Seattle, just 20 miles south of the Canadian

border. The Gateway Pacific Terminal already has three piers in the area with this one being

the fourth. It, too, will be a dry bulk export facility and compete with the west side of British

Columbia for shipping goods to world markets. Our northern neighbor has gone ‘all in’ on

exports from the West Coast and is employing thousands of Canadians with good paying

jobs.




Making terminals the choking point for not shipping southwest Montana coal will only extend

the use of poor quality coal to Asian markets. The need for coal to make electricity in

emerging countries is not going away whether we thumb our noses or whether our

President puts on increasing demands for a cleaner power plan in the U.S.

The president’s recent rules on greenhouse gas emissions is double troubling knowing that

poor quality coal is still being used. How will these U.S. rules help the world as a whole?

Montana and the Crow Nation are home to the highest BTU, lowest sulphur content coal in

the world. Doesn’t it make sense to sell our cleaner coal to Taiwan, South Korea and Japan

to replace the poor quality coal they now buy from Indonesia? Wouldn’t this go a long way

to lowering the emissions globally and lessen the effects of greenhouse gases many are so

worried about with this resource?

The sooner the Washington ports are certified, the sooner the Earth will have a cleaner

product making electricity. The Crow Nation sees the benefit to their members just as we

should see the benefit of lower emissions from this cleaner burning fuel. Higher BTU means

less need for coal and lower emissions, thus lessening the carbon in the atmosphere.

I agree with the governor’s disappointment at the latest rulings on emission standards and

hope he, too, will be on the side of shipping a better product to all potential buyers. Now we

have to convince the President that we are in a global market and could make a difference

on the world stage.

[Ravalli Republic]

What makes a productive port (or terminal)?

20/08/2015

Many ports globally are performing at a level where they are seeing a significant

increase in their volumes year-on-year.

China is an example of a country that is seeing around a 4-5% increase in container

throughput at its ports each year, although in recent months the world’s largest, Port of

Shanghai, saw flat volumes in June, 2015 as a result of slowing at overseas markets,

suggesting a potential step-change in global economics.

The Middle East is also a region that is seeing high levels of productivity, with the Port of

Jebel Ali recently achieving a world-leading 131 moves per ship per hour in 2014, in

comparison to the 119 moves recorded in 2013. Haifa Port has also set a record for the

number of container moves with 318.8 moves per ship per hour with its six ship-to-shore

(STS) cranes. While these achievements are undoubtedly impressive, the factors which

underlie a productive port remain ambiguous and are not obvious. The reasons for high




productivity at one port may be vastly different in the case of another. So how can

productivity be defined in today’s industry?

Peter Ford, Chief Strategy Officer at Ports America and former CEO of Port of Salalah,

believes that: “For terminal operators Productivity could mean a few things. Gross moves

per hour (GMPH) that focuses on a crane’s ability to move containers over the quay wall

each hour, berth moves per hour (BMPH), that focuses on thetotal number of containers

that (ALL) cranes moved on/off a particular vessel each hour, or even man hours per move

(MHPM) which refers to the efficient use of the total labour force required for the operation

to move the containers across the quay wall.

“From the customer’s perspective, while always happy to hear about high GMPH, there is

more interest about how fast the vessel was able to be turned around in port. Their main

focus was (and is) on BMPH. A fast GMPH terminal with only two cranes would not be the

terminal of choice over an average terminal with a host of crane resources to deploy on a

single shift. BMPH analysis, however, is more complex to all parties.”

While port productivity can be defined differently between terminal operators and

customers, there is a general consensus that productivity can be greatly improved with the

help of certain tools and initiatives, such as carrier-terminal collaboration, which can be a

win-win situation for ports and shipping lines if joint-planning is implemented as a way of

optimising cargo flows from end-to-end.

Oscar Pernia, Senior Director of Product Strategy at Navis, argues that: “The traditional view

of port efficiency is focused on pure terminal operations rather than end-to-end port

operations, because terminal operations typically account for 62% of the total port stay but

there is still 38% of the port stay that vessels spend waiting for vessel services, berthing,

steaming-in and out. This time could be significantly improved by better transparency, richer

data exchange and more intelligent solutions assisting those processes.

“When a carriers and terminals do something concrete to collaborate, it has a significant

impact on vessel turn-around times and adaptability to operational changes. This has been

proven at DP World Jebel Ali, DP World Southampton and with the Maersk Hub partnership

with Algeciras and Tangiers. Take vessel stowage, the sooner the terminal can get the

stowage plans the more time they have to plan and optimise their resources.”

The richer data exchange that Mr Pernia describes could be achieved via the use of Big

Data: the term used to describe the identification and analysis of data within a given

company to improve overall performance. It could have significant application for ports and

terminals to improve performance in the near future. For example, sensor data is raw

information that could potentially be used to allow ports to create a predictive model for

tracking the reliability of equipment parts and thereby look into whether a port needs to

upgrade equipment and save on higher operational costs.




Oscar Pernia continued: “Port Authorities such as Rotterdam and Hamburg have initiated

technology projects aiming to get the whole port more efficient. For ‘pit stop’ port

operations the utilisation of generated data by VTS, AIS, TOS and other systems supporting

vessel operations will be essential to optimise overall port performance and coordination

across the different processes enabling the vessel port call.”

In summary, productivity is a term that holds many different meanings within the industry,

not only between port and terminal operators, but between the operator and its customers,

who each have their own opinions on the areas that require more focus in order to see

greater results.

In an age where customer satisfaction is becoming more and more important, ports around

the world must consider how they can increase total BMPH, and continue to optimise

operations via the methods outlined in the article.

[Port Technology International]

UK: Marine mammals thriving in Thames

20/08/2015

Ten years of public sightings show that large marine mammals are regularly

found in the River Thames.

If the mammals are in town then so must be the fish on which they feed

The Zoological Society of London (ZSL) has received records of 2,732 animals over that

period. Seals were the most common animal seen, with many spotted around London's




Canary Wharf, probably because many people spot them from its skyscrapers. In addition,

the public reported 444 porpoises and dolphins on the river, and 49 whales.

Joanna Barker, ZSL's European conservation projects manager, said: "Many people looking

into the Thames see a murky, dirty environment. "But, actually, beneath the waves, it is full

of life. We have a huge range of fish and invertebrates, and also top predators."

Just 50 years ago, the Thames was so polluted it was declared "biologically extinct", too

dirty for anything to survive there. But the public sightings confirm that the river is springing

back to life. And many animals are venturing further into the English capital's waterway.

Seals were seen as far upstream as Teddington and Hampton Court Palace, in south west

London. And dolphins and porpoises were spotted at Teddington Lock, with large pods

spotted close to Kew Gardens and Deptford. A whale even visited central London in 2006,

but the bottle-nose did not survive. Other, healthier whales have been seen around

Gravesend in Kent.

"The fact we get so many sightings in central London suggests the fish stocks are moving in

to support these marine predators," said Miss Barker. In addition to the public's reports, the

team at ZSL has also been conducting detailed seal surveys along the greater Thames

Estuary.

For the last three years, they have used planes and boats to count the number of seals

along the river. The scientists estimate there are about 670 harbour seals along the estuary.

The number of grey seals is not known, however they appear to be doing well in this stretch

of river. "We do think this area is really important," said Miss Barker.

"It's quite sheltered compared with the North Sea, and there is a whole different range of

environments and habitats for the marine mammals to use. So we think that London and

the Thames Estuary is an important environment for these species. And we are keen to get

more sightings year on year, and to build up a better picture of the places that marine

mammals are using."

[BBC News]

Arctic: Openings in ice cover continued to expand

20/08/2015

According to the U.S. National Snow & Ice Data Center (NSIDC), the Arctic sea

ice extent is now tracking below 2010, 2013, and 2014.

Openings in the ice cover have continued to expand within the Beaufort and Chukchi seas.

While the Northern Sea Route has opened, the Northwest Passage remains clogged with




considerable ice in the channels of the Canadian Archipelago. However, some data sources

indicate narrow openings in the ice where navigation may be possible.

On August 16, 2015 sea ice extent stood at 5.79 million square kilometers (2.24 million

square miles). This is 1.35 million square kilometers (521,200 square miles) below the 1981

to 2010 average, and 1.17 million square kilometers (451,700 square miles) above the level

for the same date in 2012, the year of the record low extent.

Arctic sea ice extent on August 16, 2015. Image Credit: NSIDC

The rate of ice retreat slowed compared to July, but remained faster than is typical for the

month through the first half of August. Most of the ice in Baffin and Hudson bays has finally

melted out. Large areas of open water and low concentration ice within the Beaufort and

Chukchi seas continued to expand.

Some of the low concentration ice depicted in the passive microwave data could be due to

the presence of melt ponds on higher concentration ice. However, visible imagery from the

Moderate Resolution Imaging Spectroradiometer (MODIS) sensor on the NASA Terra and

Aqua satellites confirm a very loose ice pack with considerable open water in the region.

Most of the remaining ice appears to be fairly thick multiyear floes interspersed by thinner

first-year ice that is rapidly melting out. In the eastern Arctic, the ice pack remains more

consolidated.




Conditions in context

Atmospheric temperatures at the 925 millibar level during the first half of August were

above average over the North Pole region and the Barents and Kara seas, but below

average in the Laptev, East Siberian, Beaufort and Chukchi seas. This is a notable change

from July, when above-average temperatures prevailed over most of the Arctic Ocean,

including much of the Beaufort and Chukchi seas.

Current conditions are likely due to a shift in atmospheric circulation from the July pattern of

high sea level pressure centered roughly over the pole to a pattern of high pressure

centered over the Kara and Laptev seas, and low pressure centered over the eastern

Beaufort Sea. This low pressure brought colder air from the north into the western Beaufort

Sea and the Chukchi Sea, and generally cloudier conditions to the region.

A passage to India by way of Russia

The Northern Sea Route along the Russian coast appears to be open, both in the passive

microwave imagery and in the Multisensor Analyzed Sea Ice Extent (MASIE) product that is

more adept at detecting thin and deteriorating ice. MASIE still shows considerable ice north

of the Taymyr Peninsula and the Severnaya Zemlya islands, but there is a narrow open

water passage through the ice. On the other side of the Arctic, the Northwest Passage still

contains a considerable amount of ice.

According to MASIE, there is as yet no completely open route. Some passive microwave

products, such as from the University of Bremen’s Advanced Microwave Scanning

Radiometer 2 (AMSR2), indicate an open water route along Norwegian explorer Roald

Amundsen’s historical route through the southern part of the Archipelago. The apparent

discrepancy between MASIE and the Bremen product is likely due to thin, heavily melting ice

not detected by passive microwave imagery.

[National Snow & Ice Data Center (NSIDC)]

Australia: EIS of Abbot Point proposes spoil from dredging be

disposed of on land and re-used

20/08/2015

The Queensland Government has released the third draft Environmental Impact

Statement (EIS) into the controversial Abbot Point port expansion near Bowen in

the state's north.

The expansion will enable coal to be shipped from proposed mining projects in the Galilee

Basin, like the $16 billion Carmichael mine.




The EIS proposes the spoil from dredging the port be disposed of on land near the existing

coal terminal and then re-used.

Abbot Point is located about 25 kilometres north of Bowen on the north Queensland Coast, near the

vast coal reserves of the Galilee Basin.

"This development is 19 kilometres from the nearest coral community and the disposal will

avoid direct impacts to the marine environment" and "work will only begin when

environmental approvals have been received," State Development, Natural Resources and

Mines Minister Anthony Lynham said. The dredging is within Great Barrier Reef waters.

It is the third such proposal put forward after earlier ideas to dump the dredge spoil in reef

waters or on another piece of land near wetlands were abandoned after outcry from

environmentalists and the community. The draft EIS will be open for public comment for 20

days before it is forwarded to the Commonwealth for final approval.

"We need to have a balance and that's what this very extensive environmental impact is

for," Dr Lynham said. "If we get this right, we can have development and jobs, as well as

protecting the reef and our environment.” He added that "Queensland needs the jobs" and

that the State Government was serious about progressing the Carmichael project and other

Gaililee Basin projects. But Mr Lynham admitted the Government was "still waiting for

financial closure for this project".

Adani has had time to carefully look over the EIS and make sure everything is in order. The

company was dealt a blow earlier this month when the approval of its coal mine was set

aside by the Federal Court because of a bureaucratic bungle over two vulnerable species. It




was found Federal Environment Minister Greg Hunt had not properly considered advice

about the yakka skink and the ornamental snake.

[ABC]

Shipowners P&I Club issues safety guide on tug and tow

20/08/2015

In response to the increasing numbers of claims and incidents from towage

operations

The Shipowners P&I Club has issued a loss prevention guide, titled Tugs and Tows – A

Practical Safety and Operational Guide, in response to the increasing numbers of claims and

incidents arising from towage operations which have resulted in injuries, groundings,

collisions, pollution, property damage and loss of cargo.

From 20th February 2011 to 20th February 2013 all claims incidents notified to the Club

were analysed for primary cause. Throughout the booklet we have included cases that were

highlighted in this study with the aim to share the Club’s experiences so that other Members

may prevent a similar event from occurring.

Most tug and barge safety regulations focus on hardware and yet experience shows that a

good safety record depends upon the safety culture of the entire company. The hardware

issues are important, including the proper maintenance and inspection of equipment, but

managing the human factor successfully would also lessen the number of accidents.

This guide is drawn from the accumulation of experience within the Club and from industry

sources including IMO MSC/Circ 8841 (Guidelines for Safe Ocean Towage). It highlights

good towing practices and illustrates learning points from reported incidents. It is general in

nature and is not intended to replace regulatory requirement, specific company procedures

and guidelines, or what is learnt from simulator training and is intended to assist crews to

perform a safe towing operation.

[SAFET4SEA / The Shipowners Club]

Two new LNG Bunker barge concepts

20/08/2015

Crowley Maritime Corp. subsidiary Jensen Maritime yesterday announced the

development of two new, liquefied natural gas (LNG) bunker barge concepts that

can be fully customized to meet a customer’s unique needs.

The first concept involves outfitting an existing barge with an above-deck LNG tank. The

concept can be further modified to accommodate more than one type of product, if a


http://www.safety4sea.com/images/media/pdf/2015/Shipowners_-_Tug_and_Tow_Op_Safety_2015_08.pdf

http://www.safety4sea.com/images/media/pdf/2015/Shipowners_-_Tug_and_Tow_Op_Safety_2015_08.pdf



customer has a need for multiple liquid transfers. Advantages of this design include a fast

turnaround and a reduced need to invest in specialized assets if a customer has short-term

LNG requirements.

The second concept is for a purpose-built, new bunker barge. Offering greater carrying

capacity and improved visibility, the design features a larger LNG tank that is nestled inside

of the barge. This new barge will also feature the latest safety features and efficiencies.

“We understand that customers have very different needs when it comes to LNG,” said

Johan Sperling, vice president. “Whether LNG is required for the long or short term, or in

larger or smaller quantities, Jensen has a bunkering solution. We are proud to continue

leading the way with LNG marine solutions.”

In addition to offering customers maximum flexibility and top safety features, all Jensen

designs are developed using the company’s proprietary production engineering capabilities,

which makes the outfitting, construction and assembly more efficient.

Bunker barges offer an innovative solution for the maritime industry, which is currently

struggling with the decision over which to develop first – LNG infrastructure or vessels.

These barges are an ideal resource for those who have LNG needs at ports not located near

an LNG terminal or as an alternative to over-the-road transportation.

[Jensen Maritime]




Shipping and the problem of facilitation payments

19/08/2015

The eleventh in a series of papers of the Baltic Exchange providing an overview

of topical shipping issues, this Baltic Briefing reviews the phenomenon of

facilitation payments in the shipping world and mounting combative action

against it.

In an ideal world, bribery and corruption would not exist – and in shipping, no one would

demand a facilitation payment in exchange for a service a person has a legitimate right to

anyway. Even if you had received such a demand, you would be able to report it to the

authorities without fear of incrimination. The authorities in the jurisdiction where the offence

was committed would then promptly catch the perpetrator and prosecute them for depriving

(or interfering with) the person with legitimate rights.

This is precisely what happened in 2014 in the case of a rogue surveyor at Vopak Terminal

Banyan Jetty in Singapore. The Bangladeshi surveyor, who worked for Pac Marine, had

identified some spurious high-risk defects, which would have prevented the Singapore-

registered ship from entering the terminal until they had been rectified. The Russian master

argued that they were in fact minor defects would could easily be fixed and not prevent

entry into the terminal. On asking how this could be resolved, the surveyor confirmed that

money would make the high-risk defects disappear from the inspection report. This was

paid and the defects did indeed “disappear” from the report. The master reported the

incident to the Singaporean authorities. A sting was organised where the same ship arrived

a couple of months later to the same terminal and was faced with the same surveyor and

demand – but this time with actual high-risk defects that should have been reported. They

were not reported and the surveyor was duly arrested, charged and sentenced.

Unfortunately we do not live in an ideal world. The international nature of shipping and the

consequent exposure it has to such demands is well known. And because of the lack of

progress in combatting the demand for bribes, the OECD Convention on Combating Bribery

of Foreign Public Officials in International Business Transactions (1997) also places the

blame on payers of such bribes. Many jurisdictions, including the UK, extrapolate this

principle to payers of facilitation payments, even where it is the result of depriving a person

with legitimate rights in exchange for the bribe. The UK’s Bribery Act 2010 goes even further

to criminalise UK companies where facilitation payments have been made outside of the UK

by those with no UK connections, unless the UK company in question has “adequate

procedures” to prevent such bribery.

Already there has been judicial comment on such demands in shipping, within the English

High Court judgment of Venetico Marine SA v International General Insurance Company

Limited and Nineteen Others [2013]. The case concerned claims against the hull policy for

an actual or constructive total loss of a ship which had suffered damage on its voyage from

Oman to India. After the casualty, the underwriters engaged GL Noble Denton to inspect

and report on the casualty. There had been a question of whether the ship could have been




towed to Mumbai to carry out underwater inspections. The documents disclosed during the

trial revealed that GL Noble Denton employees had discussed the possibility of “greasing the

authorities” to allow this to happen. The judge took a dim view of the fact that GL Noble

Denton employees had discussed the possibility of others paying bribes. To his mind it

raised questions about GL Noble Denton’s adequacy of its anti-corruption policies and

procedures – even though no bribe had in fact been paid by either the shipowner or the

underwriter.

In the meantime there is an increasing trend of inserting anti-corruption clauses into

charterparties, as a result of more companies taking a zero-tolerance approach. Concerns

remain on the ability for charterers to terminate unfavourable charters by exploiting the

vulnerability of shipping to demands for facilitation payments. It may be that charterers

need to take responsibility and share the burden with owners in facing such demands, and

accept the consequent delays when demands are refused – and this should somehow be

reflected within the commercial relationship.

More broadly, many more countries are taking an increasing interest in tackling corruption

from both those who demand and those who pay. Recently the Chinese Government

conducted a crackdown, having probed into the practices of the China Shipping Group and

COSCO and pulled up senior executives for deficient internal controls and inappropriate use

of funds for personal gain. Elsewhere, those who had provided services to Petrobras have

this year been drawn into the largest corruption scandal on record in Brazil.

In the background the OECD continues its work in applying pressure to those countries

which have ratified the OECD Convention. Even in the US, where there are limited

exceptions for “facilitating payments” paid to foreign public officials, regulators are taking an

ever narrowing view of their acceptability. A case earlier this year in the US provided judicial

confirmation of this narrowing view, and this should prompt companies subject to the US

Foreign and Corrupt Practices Act of 1977 to review their policies and procedures for such

payments.

With this in mind, those who wish to act ethically but continue to face demands for

facilitation payments are in a difficult position, especially if their counterparts do not share

the burden of resisting such demands. This has led to the conclusion that for those affected,

collective action is required as a tool to fight corruption. The theory is that pressure from

individuals acting together to challenge behaviour will yield more results than acting alone –

especially where acceding to a demand gives a commercial advantage over someone who

does not. Anti-corruption collective action initiatives aim to get companies together to

promote good corporate practice, resist collectively, and engage with others such as

government bodies and international institutions. It can be seen that getting involved

enhances those businesses’ reputations, and allows them to demonstrate a public

commitment to instigate change from those who demand such payments.

The Maritime Anti-Corruption Network (MACN) was founded in 2011 with this in mind. Its

membership has since grown to over 50 members comprised of shipowners, cargo owners




and maritime service providers. As well as sharing best practice, it aims to conduct projects

to target high corruption areas where ships trade, and has started in places where it

appears that the government of the afflicted jurisdiction is willing to cooperate. After much

work with the United Nations Development Programme (UNDP) it launched a joint pilot

project in Nigeria. MACN intends to use its study, which outlines the systemic problems with

corruption, to engage with the Nigerian government and donor partners to develop (and

ultimately implement) a comprehensive plan to address corruption at ports.

Collective action initiatives like MACN can only go so far in tackling the demand side of

facilitation payments, especially where demands for them are symptomatic of wider and

systemic corruption. Ultimately a consistent and long term effort to stamp out corruption

generally must come from those countries afflicted by it, possibly with support from other

governments and stakeholders who have an economic interest in ensuring high standards of

conduct. China’s recent efforts are encouraging, and in the long term it would be better for

shipping and trade if these demands were eradicated – or at least dealt with swiftly, as seen

in the case of Singapore.

[Baltic Exchange]

Investment pours into freight industry despite shipping slump

19/08/2015

Global trade and shipping figures continue to disappoint, but investment into the

freight sector continues, with logistics providers hoping better routes to market

will help buck the trend.

Port of Hamburg




In Asia, DHL has initiated an extension of its road freight service linking the previous

network of Singapore-Malaysia and Thailand up with Vietnam and China. The company will

now provide its less-than-truckload service across all five nations, which it says greatly

reduces the time it takes for goods to reach market.

Much has been made of the transport infrastructure gap in Asia, and the multi-billion dollar

net drag it has on regional trade. Under-investment, bureaucracy, security issues and

terrorism all combine to mean that sea transport can be expensive and time-consuming.

By ocean freight, it typically takes cargo 13 days to travel from Shenzhen in South China to

Bangkok. DHL says its new service will do the same distance in just five. While air transit is

quicker – four days on average – it costs significantly more.

The company’s head of operations for global freight forwarding, Asia Pacific, Charles

Kaufmann, tells GTR that the expansion was designed to coincide with the development of

China’s One Belt, One Road project, which will create new land and sea routes across Asia

and Europe.

“OBOR is expected to strengthen cross-border economic ties in markets between Europe

and Asia and we are positive about its effect on the potential trade expansion in the region.

Logistics plays a key role in infrastructure building. With the reported infrastructure gap in

Asia, DHL sees great potential in moving industrial projects and other cargo as infrastructure

investments in the region grow,” he says.

The shipping slump, meanwhile, continues. This week shipping giant Maersk announced a

7.3% drop in profits, year on year, with the company blaming the loss on the lower freight

rates on the Asia-Europe trade flow.

In a statement, the company said: “We expect the market to remain weak. We expect –

with continued over-capacity – the rates to remain under pressure. We expect global

container demand in 2015 to grow by 2-4% against a previous expectation of 3-5%.”

The Port of Hamburg this week also announced that seaborne cargo was down 6.8% over

the first half of 2015. Overall, container shipping from Asia to Europe was down 20% –

indicative of the wider trend in global trade and exports.

It has made the £4.2bn purchase of Australian logistics firm Asciano all the more eye-

opening. The freight company – which operates port, rail and sea networks – was purchased

by a group led by Brookfield Asset Management, a Canadian company, in the fifth-largest

buyout of an Australian company by foreign investors in history.

Given the precarious position of Australia’s exports sector (prices for many of its key

commodities have plummeted, as China’s demand dries up and other parts of the world turn

their back on coal), the move can be seen as something of a gamble.




The Asciano CEO John Mullen, however, is naturally bullish: “This combination will provide

Asciano the scope to leverage our industry leading expertise globally, and the financial

capacity to take advantage of the myriad of growth opportunities in our sector,” he says.

[GTR - Global Trade Review]

Asia – Europe: Shipping giants reduce sailings on world’s

busiest route

19/08/2015

A glut of ships and lower demand means fewer vessels on the Asia-Europe route

Major container shipping lines are slashing sailings on the world’s busiest shipping route

between Asia and Europe as lower growth in China and a sluggish eurozone economy hurt

container volumes.

The late summer season is normally a peak period for container shipping as retailers stock

up for Christmas sales. About 95% of the world’s manufactured goods, ranging from toys

and clothing to electronics and household goods, are moved by container ships. But a glut of

tonnage in the water, combined with lower demand, is proving to be one the industry’s

biggest challenges in recent years.

The G6 Alliance—comprising Singapore’s APL; South Korea’s Hyundai Merchant Marine ;

Japan’s Mitsui OSK and NYK; Germany’s Hapag Lloyd and Hong Kong’s OOCL—said this

week that it will cut 12 round-trip sailings from Asia to Europe, starting in September. That

is about a sixth of the capacity it normally moves on the route in a five-week period.

Earlier in August, 2M, the world’s biggest alliance in terms of capacity, consisting of

Denmark’s Maersk Line and Geneva-based Mediterranean Shipping Co., said it would

withdraw about 6,500 containers—about 10% of its normal capacity—from the route until

further notice.

“Demand has been less than anticipated, and so far it’s proving a difficult year for container

shipping,” said Jonathan Roach, a container market analyst with London-based Braemar

ACM Shipbroking. “Global container capacity will increase 8.6% this year with the addition of

new ships, while demand will only go up between 2% and 3%. This is putting a lot of

pressure on freight rates, and container lines have no choice but to cut or cancel sailings.”

Mr. Roach estimates overcapacity on the Asia to Europe trade loop at around 30%.

A senior executive with one of the shipping lines, who asked not to be named, said falling

economic growth in China is taking a toll on European exports, while demand for Chinese-

made manufactured goods in the eurozone is also falling. “It’s been the worst we’ve seen in




recent years, and I don’t think it will become any better in the next three years or so,

unless, by a miracle, the world economy takes a sudden turn for the better,” he said.

For 2015, the Chinese government expects the country’s economy to grow around 7%, the

weakest expansion in 25 years.

Freight rates between Shanghai and Rotterdam fell to a record low of $243 per container in

June, a rate that doesn’t cover the operators’ fuel cost. A general price increase in July

briefly boosted rates to $1,109 per container. But this week, rates dropped backed down to

$640, according to data from the Shanghai Containerized Freight Index.

Operators say that anything below $1,300 is unsustainable over the long term. Only a

handful of companies have been profitable in the first half of the year, with the majority

sinking deep into the red.

Container shipping is largely controlled by about 15 European and Asian operators that have

pooled their operations through alliances, sharing networks and port calls and by using

ultra-large container ships that have redrawn the scale of international shipping. With the

capability to carry nearly 19,000 containers, these ships are more than a third larger than

the biggest ships of a decade ago.

Braemar ACM Shipbroking estimates that investment in these ships, called ULCSs, translated

into 500,000 containers-worth of additional capacity in the first quarter of this year,

representing nearly half the one million boxes contracted for all of 2014.

Lars Jensen, chief executive of Copenhagen-based SeaIntel Maritime Consulting, said large

companies such as Maersk are best equipped to weather the storm. Maersk moves more

than 15% of all container capacity.

“They are less vulnerable than smaller competitors because they depend on long-term

contracts with big cargo owners at better prices,” he said. “But if you are forced to pull out

capacity from one of the major routes like Asia-Europe, there is no place to use the idle

vessels because overcapacity is everywhere. It will be like shuffling the deck chairs on the

Titanic.”

[The Wall Street Journal]

U.S.: Plans for $4.5 billion South Carolina / Georgia port near

milestone

19/08/2015

Years of planning to build a joint $4.5 billion South Carolina / Georgia container

ship terminal on the Savannah River are nearing a milestone.




In this aerial photo of the Savannah River, the dredge spoil site to the right is the area where a

Jasper port could be constructed. Photo courtesy of Paul Nurnberg, nurnbergphotography.com

Consultants told the South Carolina Ports Authority board on Wednesday that a permit will

be sought this fall so the U.S. Army Corps of Engineers can begin environmental studies of

the massive project. The two states have been working together for eight years to develop

the 1,500-acre Jasper Ocean Terminal on the South Carolina side of the river just

downstream from Savannah.

Permits for the project must be sought now because port capacity in both Charleston and

Savannah will begin running out by the mid-2020s, Michael Rieger of consulting firm of

Moffat and Nichol told the board.

Environmental studies for the new terminal are expected to take eight years, with

construction to follow. If all goes according to plan, the first phase of the terminal could be

open in 2029, he said. The completed terminal, which will be about two hours from the

open ocean by ship, is expected to cost about $4.5 billion. The first phase is expected to

cost about half of that amount.

With erths for between eight and 10 vessels, the completed terminal will be the largest

single-site container terminal in the nation, the board was told. Since preliminary plans were

drafted back in 2009, there have been some changes in the terminal design, mainly because

of the advent of larger container ships. The planned wharf has now been moved 500 feet

back from the river to accommodate larger ships.

And plans for a rail yard at the back of the terminal have been changed to leave enough

room so that a 10,000-foot long train can be assembled. The original plan called for space




to assemble a 5,000-foot-long train. There are also now plans for two truck gates to serve

the terminal instead of one.

In the coming weeks, among other tasks, the consultants will finalize the terminal layout

and update the construction schedule and costs. The already complex project is made even

more so because both the Charleston District and the Savannah District of the Army Corps

of Engineers have jurisdiction.

The Savannah District has jurisdiction over the river while the Charleston District has

jurisdiction over the land on the South Carolina side where the terminal will be built.

[Associated Press / Island Packet]

Nicaragua canal construction: We couldn't find it

19/08/2015

The town El Tue, if you listen to Nicaraguan officials, is a key point in what will

be the biggest infrastructure project the region has ever seen, the construction

of a $50 billion canal slated to run 170 miles from the country’s east to west

coast.

Deep on the southeastern side of Lake Nicaragua, along a bumpy dirt road that climbs

gently through lush-green forest, sits the tiny town of El Tule. It is quintessential rural

Central America: Chickens roam outside tin-roofed homes while pigs stand tied to trees,

awaiting slaughter; the sound of drunk locals singing along to ranchera music greeted

visitors on a recent rain-soaked afternoon.

Awarded two years ago by President Daniel Ortega to an obscure Chinese businessman

named Wang Jing, the concession calls for El Tule to be ripped up, erased essentially, in

order to make way for the canal right before it plunges into the lake and then meets the

Pacific Ocean a few miles later.

The idea is that the waterway will attract many of the larger vessels that the Panama Canal

— located just 300 miles to the southeast — has historically struggled to accomodate. A

construction deadline of 2020 has been set. Yet a four-day tour through El Tule and

surrounding areas slated for crucial initial development only seemed to corroborate the

belief, harbored by many analysts inside and outside Nicaragua, that this project isn’t going

to get done.

The townspeople haven’t seen any signs of canal workers in months. And the work that was

done was marginal. A handful of Chinese engineers were spotted late last year making field

notations on the east side of the lake; early this year, a dirt road was expanded and light

posts were upgraded at a spot on the west side where a port is to be built.




Juharling Mendoza, a 32-year-old local entrepreneur, is so convinced that the project won’t

proceed that he’s constructing a two-story house with three guest rooms and an attached

convenience store just outside of El Tule. He says bluntly: “There isn’t going to be a canal.”

It is true, as supporters of the canal quickly point out, that public works of this magnitude

tend to move in fits and starts. The Panama Canal itself was decades in the making.

However, for a project that made so little sense to so many skeptics from the very

beginning, the almost non-existent initial progress — along with the struggles to raise

financing — is only fanning those doubts.

Sverre Svenning, a shipping expert at Oslo-based Fearnley Consultants AS, notes that

Panama’s current $5 billion canal expansion will allow it to better accomodate today’s bigger

tankers. Overall traffic, he says, isn’t strong enough to sustain a second route. And then

there are the massive engineering and environmental challenges to overcome, like making

sure the country’s volcanos don’t disrupt the canal, according to Eric Farnsworth, vice

president of the Council of the Americas. “I’m very skeptical,” he said.




Conspiracy theories

Many people doubt that Ortega — a former guerrilla who rose to international fame when he

defeated U.S.-backed forces in the 1980s — and his Chinese partners ever truly intended to

build a canal.

Conspiracy theories abound as to what their real intentions are. It has become something of

its own cottage industry. A small sampling: The project is a land grab by Ortega; or a tool to

whip up support ahead of next year’s elections; or a Chinese plan to threaten U.S.

hegemony in the region by mapping out infrastructure designs so close to its shores.

While Wang, a billionaire who made his fortune largely in the telecom industry, hasn’t

received official public backing from Beijing, China watchers say it’s unlikely he’d have

signed such a deal without getting the green light at first from home.

In extending its influence throughout Latin America and the rest of the developing world,

China’s record on these mega projects is spotty. Several have been put on hold long after

companies began the work, like a $3.5 billion resort in the Bahamas and a $1.3 billion

refinery upgrade in Costa Rica.

Back in a 2013 interview, Wang made it clear he was aware of the public perception. “I

don’t want it to become a joke or an example of a failed overseas Chinese enterprise,” he

said.

In response to questions this week, Wang’s Hong Kong-based HKND Group said construction

of the port on the Pacific Coast will begin this year, a position echoed in Managua by Manuel

Colonel Kautz, the head of the country’s new canal authority. HKND said it’s waiting for the

Nicaraguans to sign off on the environmental impact study before proceeding and that it’s

held talks with companies across the globe looking to invest.

Ortega’s press office declined to comment.

The $50 billion canal would be the biggest infrastructure project the region has ever seen

with the waterway slated to run 170 miles from Nicaragua's east to west coast.

square before the information The $50 billion canal would be the biggest infrastructure

project the region has ever seen with the waterway slated to run 170 miles from Nicaragua's

east to west coast. Photographer: Susana Gonzalez/Bloomberg

Vanderbilt’s failure

The dream of a canal cutting across Nicaragua dates back centuries. Before Teddy Roosevelt

and the Americans settled on Panama, Nicaragua was the top pick for an inter-oceanic

waterway that would end the need for ships to make the long trek around Cape Horn.

Railroad magnate Cornelius Vanderbilt even took a shot at building one in the 1850s. The




mast of his dredge boat still stands as a symbol of that failure, rising out of a lagoon in

southeast Nicaragua.

The job looks no easier today really than it did then.

It will require 16 million cubic meters of concrete, nearly one million tons of rebar and steel

and the excavation of 4 billion cubic meters of rock and soil. Nearly all of these materials —

as well as the bulldozers and cranes — will have to be imported, HKND says. The $50 billion

price tag is almost five times the annual economic output in Nicaragua, the poorest nation in

Central America.

‘Go away’

In a country with little independent polling, it’s hard to gauge support for the project.

Traveling along the canal route last month, the most common concerns heard were about

eviction and, to a lesser extent, the environmental impact.

In Rio Grande, a town along the Pacific Coast, Antonia Ponce was adamant that she’s not

moving. “Only over my dead body,” she said. Her 19-year-old granddaughter, Tatiana, then

pulled out a sign she made last year when the Chinese workers showed up to work on the

road. In Chinese lettering surrounded by an axe and machete, emblems of the Nicaraguan

countryside, it reads: “Go Away, Chinamen.”

But the overriding sentiment on the ground was skepticism.

A few miles to the west of Rio Grande, in a village where oxen-pulled wooden carts pass

through empty dirt streets, a rancher named Jose Mena Cortez said he’s seen all this before

— the bold promises from politicians of public works and growth. “They always come with

big plans,” he said. “And they never do anything.”

[Bloomberg]

India: Singapore's PSA facing $61 million damages claim from

JNPT

19/08/2015

The dispute is over a failed 2011 tender for a new container terminal.

Jawaharlal Nehru Port Trust (JNPT), the operator of India's busiest port, is taking legal

action against Singapore's PSA International Pte Ltd over a failed container terminal tender,

Livemint reports. The port operator is reportedly seeking RS 400 crore ($61 million) in

damages.




In 2011, PSA International reportedly won a tender to build the facility, but failed to sign a a

concession agreement within a specified amount of time. The deal reportedly fell through as

a result, though the company won a re-tender for the project in 2013 and is still expected to

build the facility.

"The re-tendering allowed PSA to quote a 15 percent lower revenue share price bid," said an

unnamed port industry executive, in addition to a deal involving new tariff norms that are

widely viewed as more favourable to port operators.

JNPT also reportedly argued that the events had pushed back construction of the terminal

by at least four years, and had led to losses of up to RS.1,215 crore ($185.4 million). "The

port also took a legal opinion from the attorney general of India, who said that the port has

a right to claim damages against PSA," said JNPT chairman Neeraj Bansal.

Last month, the Indian government announced that it would be reducing the customs duty

on bunker fuels in an attempt to support economic growth in the country's lagging shipping

industry.

[Ship & Bunker News]

Maersk and MSC container shipping alliance blamed for Asia-

Europe trade imbalance

19/08/2015

After the humiliating failure to implement cumulative general rate increases in

excess of $7,000 per teu this year carriers plying the Asia-North Europe

tradelane are preparing to ask shippers to pay an average $1,000 per teu extra

from 1 September.

But once again, the prospect that the container lines will manage to get even a percentage

of this latest GRI to hold for longer than two weeks appears remote. Indeed, if the carriers

cannot get rate increases to stick during a peak season, what chance do they have with the

pre-holiday boom drawing to a close and seasonal weaker-demand months looming?

According to Alphaliner, after nine previous attempts to raise rates on the trade this year,

shippers have become ‘more savvy': they are holding back from bookings immediately after

a GRI is imposed, on the basis that they can obtain lower rates when the rate hike falters.

The consultant blames the Asia-Europe carriers for their inertia in terms of adjusting

capacity to meet demand. It said that the refusal of the shipping lines to remove surplus

capacity in June “effectively doomed” the July and August GRIs. Alphaliner is particularly

critical of the 2M grouping of Maersk Line and MSC for remaining “steadfast in not

withdrawing any capacity” in July and August.




The stubborn attitude of the 2M partners only softened last week when Maersk and MSC

announced that their AE9/Condor service would be replaced by “a seasonal” string – subject

to inducement – from mid-September.

But Alphaliner suggests the 2M’s belated move to join the other three alliances in cutting

capacity “comes too late to reverse the ongoing rate slide on the trade”, as vessel utilisation

levels remain stubbornly below 90%.

The 2M’s decision to cull the AE9/Condor service reversed a June decision to downgrade the

size of the vessels operating on the service from September from an average of 9,500 teu to

6,500 teu types, with some even bigger ships, of 11,000 and 13,000 teu, being deployed in

the interim.

During Maersk Group’s second-quarter results presentation last week, chief executive Nils

Andersen admitted Maersk Line had “overestimated market growth” on the tradelane and

conceded that the carrier “needed to take the proper capacity decisions”.

It is not known whether 2M partner MSC was dragging its heels in agreeing to a capacity cut

from Asia to North Europe, but it does highlight the downside of alliance membership as the

Danish carrier cannot, as it did pre-2M, adjust its east-west schedule without the consent of

the world’s second-biggest container line.

Meanwhile, Alphaliner data shows that total capacity between Asia and Europe increased by

a year-on-year 5%, as at August, with 62 new ships having been phased into the trade in

the past 12 months. The newbuilds total 880,000 teu, with 81 ships equating to 675,000

slots having been cascaded down to other trades.

[The Loadstar]

New central France rail service extends Le Havre-HAROPA

multimodal offering

19/08/2015

France’s biggest container port, Le Havre, and its partners in the HAROPA

alliance, the ports of Rouen and Paris, have extended their multimodal offering

for box traffic with the launch of a new 'next day' rail service to central France.

'Combi' operator Ferovergne, part of French road haulage group, Combronde, has begun

operating a new, three weekly round-trip service carrying containers between HAROPA and

a new €4.2 million rail-road freight consolidation and distribution hub in Vierzon, a distance

of almost 400 kilometres.

The service also offers a twice-weekly connection to Clermont Ferrand more than 200

kilometres south of Vierzon putting markets in the French regions of Auvergne, Limousin,




Aquitaine and Rhone-Alps within HAROPA's reach. In addition, the French cities of Bordeaux,

Cognac and Limoges can be served by road from the combi terminal in Vierzon.

Aimed at shippers and logistics firms based in central France seeking an alternative solution

to shipping cargo over long distances, the new HAROPA-Vierzon service offers an annual

capacity of 32,000 teu and is targeting the modal transfer of 20,000 trucks on to trains

between Vierzon, Clermont-Ferrand and Le Havre.

"Rail-road transport is innovative and economically competitive and ticks the boxes on

sustainable growth in allowing a 70% reduction in CO2 emissions," HAROPA says.

Earlier this year, HAROPA opened a €130 million multimodal terminal providing scope for the

ports to regain and extend their hinterland, and attract more business from shippers and

forwarders seeking reliable intermodal services for container traffic.

Eastern France, southern Germany and northern Switzerland were identified as key regions

for intermodal services.

The new multimodal facility allows trains and barges to be loaded in situ, without combined

transport operators having to retrieve containers from quayside terminals.

[Lloyd’s Loading List]

U.S. watchdog joins German investigation of alleged payment

of bribes by Ford and Schenker in Russia

19/08/2015

The United States’ securities watchdog is helping German prosecutors to

investigate the alleged payment of bribes by Ford to speed the passage of

containers through Russian customs, a source at the U.S. carmaker said on

Tuesday.

Ford and Schenker, the freight business of state-owned German rail company Deutsche

Bahn, have been under investigation in Germany since 2013 over suspected bribery and

other offences related to the busy Russian port of St. Petersburg. The port is Russia’s

European gateway with more than 2,000 companies using it for shipments, according to its

website, but it is also known among customers for notoriously long delays.

The U.S. Securities and Exchange Commission (SEC) has now joined investigations by

prosecutors in Cologne, where Ford’s European headquarters are based, a source at the

carmaker told Reuters, confirming a report in Tuesday’s Sueddeutsche Zeitung newspaper.

Two Ford employees, eight current and former workers at Schenker and one staffer from a

Russian contractor are under investigation, a spokesman at the Cologne prosecutor’s office




said. He said that he could neither confirm nor deny that the SEC is now aiding the

investigation. The SEC did not respond immediately to requests for comment.

“Ford is committed to legal compliance and business ethics in all of our operations around

the globe, and we expect the same from our vendors,” a spokesman at the carmaker’s

European division said in an emailed response to questions. We fully support and cooperate

with any government inquiry. We do not comment on specific matters involving ongoing

proceedings.”

The U.S. carmaker last year cut 700 jobs at its plant near St. Petersburg as it grappled with

Russia’s deteriorating economy and a weak rouble. The plant produces Ford’s Focus and

Mondeo models.

Berlin-based Deutsche Bahn said it has already dismissed members of staff over the

allegations and is continuing internal investigations of several other employees.

[Reuters]

Tianjin Port explosions raise more questions over Chinese

logistics

19/08/2015

Last week’s twin explosions at Tianjin Port have cast further shadows over the

veracity of China’s trade and logistics network.




Two devastating blasts in a warehouse holding hazardous chemicals killed more than 100

people and left many more injured, and while much trade has resumed as normal in one of

China’s most important hubs, concerns are mounting about the state of China’s trade record

keeping systems.

It was reported locally that the company in control of the warehouse at the centre of the

disaster – Tianjin Dongjiang Port Rui Hai International Logistics – was not legally permitted

to handle the materials between October 2014 and June of this year, but had done so

nonetheless. The materials included calcium carbide, sodium cyanide, potassium nitrate,

ammonium nitrate and sodium nitrate. Authorities located 700 tonnes of the extremely toxic

sodium cyanide, which is more than 70 times the legal limit.

Systematic forgery of trade invoices in 2013 was found to have grossly inflated nominal

trade figures, exposing high-level willingness to tamper with important trade data.

Furthermore, the Qingdao commodity fraud last year highlighted a practice whereby loans

were being disbursed in order to pay for collateral that did not exist.

All have combined to stymie confidence in the reliability of services and operators at some of

the world’s busiest ports.

“The latest incident, where there was uncertainty for days about the exact contents of the

hazardous materials warehouse, adds to that doubt about the systems in place for record

keeping, and in this case, digitisation and safe and accessible storage. That said, these

incidents mostly confirm existing suspicions about record keeping, rather than significantly

worsening them,” IHS’ senior economist in Beijing Brian Jackson tells GTR.

Following the Qingdao scandal, commodity firms were known to be moving their metals

stocks from warehouses in the port to Busan in Korea, as well as other parts of Southeast

Asia. The long-term impact of the Tianjin disaster remains to be seen, but the early signs

are that some business has continued as usual.

Reuters’ data showed that oil shipping resumed a matter of days after the event, with the

newswire quoting a spokesperson for Australian mining giant Fortescue as saying there has

been “no impact on iron ore cargoes going through the Port of Tianjin” to date.

Other sectors have been less fortunate. Toyota was forced to halt production at two of its

plants in the area, with Mitsubishi reporting damage to 600 vehicles. IHS estimates the

moratorium could lead to a loss in production of 2,200 cars per day. It is also thought that

up to seven pharmaceutical factories within the 2km blast radius will have been affected.

The Tianjin port network has become vital to the country’s trade economy. It accounts for

7% of China’s port tonnage and 3% of overall merchandise trade. Its proximity to

landlocked Beijing makes it one of China’s most significant trade hubs.




Much of China’s petrochemical imports enter through Tianjin and it was named as one of

three new free trade zones (FTZs) earlier this year, becoming operational in April. And while

official trade data from the FTZ has yet to arrive, officials have been keen to talk up its

importance to the economy.

Just days before the explosion, the Tianjin FTZ deputy director Jiang Guangjian told Xinhua,

China’s state-owned media, that more than 7,000 new enterprises had registered in the area

this year, with registered capital up 248% on the first six months of 2014. It is expected to

be a key hub in China’s ambitious One Belt, One Road programme, designed to revive the

ancient Silk Road trade route, spanning from Australasia to Iberia.

[GTR – Global Trade Review]

China: Confusion surrounds Tianjin Port warehouse ownership

19/08/2015

There is confusion over the true ownership of the hazardous goods warehouse

operated by Ruihai International Logistics that exploded in Tianjin last week,

according to the Financial Times (FT).

It said identifying owners of businesses in China has been complicated since exposés of the

family wealth of the Communist party’s most powerful leaders led to greater restrictions on

corporate ownership registries. The task is further complicated by the practice of individuals

legally holding shares on behalf of other, unnamed but more powerful, people, often on the

basis of a verbal agreement.

That seems to be the case for Shu Jing and Li Liang, who appear in State Administration of

Industry and Commerce records as holding 45% and 55% cent Ruihai International

Logistics, the registered owner of the warehouse at the centre of last week’s devastation,

the FT reports. Both Shu and Li told Chinese media they were holding their shares on behalf

of someone else — but would not say who, the FT said.

It said licensing to operate a hazardous goods warehouse is not easy to come by, and Ruihai

Logistics’ operation seems to have been approved after neighbouring lots had already been

auctioned to residential developers. According to one report, Tianjin’s online corporate

registry database was inaccessible for four days after the blasts. When access resumed on

Monday, a search for Ruihai Logistics yielded a gap. The company was registered in 2012

but its current legal owners only bought their shares in 2013, the FT reports. The historic list

of changes that should have reflected the previous owners did not appear.

The records reveal that many Ruihai executives are former employees of Sinochem, the

giant state-owned chemicals, fertiliser and iron ore trader that owns the largest hazardous

warehouse operation in Tianjin. Sinochem said on Friday it no longer had any ties to those




executives and that it was “strengthening safety work” at its own warehouses, which were

damaged by the blasts, the FT said.

Caijing, one of China’s most respected publications, was among news organisations that

reported on Monday that Ruihai was ultimately controlled by Dong Mengmeng, the 32-year-

old son of Dong Peijun, a former head of public security at Tianjin Port who died last year,

the FT said, adding that Dong could not be reached by the FT for comment.

The individuals named in the corporate records were just “ants”, carrying crumbs on behalf

of others, Caijing concluded. Other publications have explored family ties between other

Ruihai executives and local officials. Overseas Chinese media, which are sometimes the

battleground for partisan leaks by Chinese leadership factions, have speculated on links to

current and former national leaders who made their careers in Tianjin, the FT said.

Meanwhile, several news reports indicate that the Chinese firm whose warehouse in Tianjin

exploded last week killing at least 114 people did not have a licence to handle hazardous

chemicals until two months ago. China’s Xinhua news agency said that for eight months

before June, Tianjin International Ruihai Logistics handled hazardous chemicals without the

right documents.

[Lloyd’s Loading List]

China: Tianjin Port warehouse executives used connections to

get safety approvals

19/08/2015

Chinese state media on Wednesday appeared to convict executives of a company

whose chemical warehouse exploded last week killing 114 people of slipshod

practices at least, saying they used connections to obtain fire safety and

environmental approvals.

Public anger against the government has surged in the northeastern port of Tianjin among

residents of apartments near the blasts who believed authorities neglected to properly police

the firm, Tianjin Dongjiang Port Ruihai International Logistics.

“My connections are with police and fire. When we needed a fire inspection, I went to meet

with officials at the Tianjin port fire squad,” Dong Shexuan, 34, deputy head of the

company, told the official Xinhua state news agency while he and other executives were in

police custody. “I gave them ... the files and soon they gave me the appraisal and took care

of it.”

Company executives interviewed by Xinhua could not be reached for comment. Chinese

state media often airs confessions of those detained in high-profile criminal cases before




they are tried in court, a practice that rule of law advocates say violates the rights of the

accused to due process. Xinhua said Dong did not mention any instances of bribery.

The explosions late last Wednesday in the world’s 10th-busiest port forced the evacuation of

thousands of people after toxic chemicals were detected in the air. At least 10 people from

the company have been detained.

China has struggled in recent years with accidents ranging from mining disasters to factory

fires, and President Xi Jinping has vowed that authorities should learn the lessons paid for

with blood.

Apartment buildings and a railway station were closer to the warehouse than allowed by

Chinese regulations dealing with the storage of dangerous materials, state media has

reported. Hundreds of people who lived near the blast site have demanded that the

government arrange compensation or buy back their damaged or destroyed property.

Dong said company officials shopped around for approvals with different safety evaluation

firms until they got the result they desired. The first such firm said the warehouse was too

close to apartment buildings, he said.

China said on Tuesday it was investigating the head of its work safety regulator, who for

years allowed companies to operate without a licence for dangerous chemicals.

The People’s Daily, the ruling Communist Party’s official newspaper, said last week that

Ruihai had operated without a licence to work with dangerous chemicals because of an

administrative loophole, though Reuters could not verify that report.

Tianjin mayor Huang Xingguo told reporters at a briefing that all chemical companies would

be required to relocate 25 km (15 miles) from the port central Binhai district and that there

would be “zero-tolerance” for violations.

[Reuters]

Vietnam: River silt buildup threatens Ho Chi Minh port

container trade

19/08/2015

Ho Chi Minh City (HCMC) is seeking VND300 billion (USD13.8 million) from the

state government to clear a soil buildup on the Soai Rap River threatening its

container trade.

Soai Rap River is a key waterway for vessels transporting goods to ports in HCMC and

neighbouring localities. "If the Soai Rap River is not dredged quickly, there is no reason for

shipping lines to use the passage and Saigon Premier Container Terminal [SPCT], and DP




World is concerned about this," said Rashid Abdulla, senior vice-president and managing

director for Asia Pacific at DP World.

Ho Chi Minh City port. Image source: Mega Construcciones

The 54 km-long Soai Rap needs to be dredged each year to clear an annual accumulation of

2.5 million m3 of alluvial soil. HCMC's municipal government puts the yearly cost of

maintaining and dredging the river at VND334 billion.

But the Chinese ministry of transport, which has allocated no funds for dredging Soai Rap in

its waterway maintenance plan, has only agreed to dredging this year at a cost of about

VND300 billion, to be advanced from the city's budget.

HCMC's municipal authority has proposed to the state government that it be allowed to fund

the dredging itself, in return retaining all navigation fees from vessels using the river. In

June 2014, Soai Rap had been dredged to 9.5 m, allowing ships of 30,000-50,000 dwt to

navigate and pass through. But some terminal operators claim the depth has been not kept

uniformly at 9.5 m in some areas since November 2014.

[IHS Maritime 360]

Lebanon: Rubbish crisis shuts down port of Beirut

19/08/2015

Work in the port of Beirut stopped on August 13th as workers staged a

cautionary strike over serious health and safety concerns following the dumping

of rubbish near the port.




“We will not accept our port becoming the capital’s dumping ground. The health of all who

enter the port is at risk, workers, visitors and customers. We want the port authorities to

talk to the union; we want to avoid further escalation to open-ended strike,” said Bchara

Asmar, president of the Union of Beirut port employees.

Rubbish collection in Lebanon’s capital, Beirut, halted in July following commercial dispute

between Sukleen and the government which raised people’s concerns on health and safety.

The union reports that the Lebanese government has not provided a viable long-term waste

management solutions to date and the municipalities have resorted to temporary solutions,

according to the International Transport Workers’ Federation (ITF).

This potential environmental crisis affects the general public in Beirut and Mount Lebanon.

Reports state some 20 tons of rubbish have been dumped in the streets in the searing heat.

[World Maritime News]

India: Adani agrees Vizhinjam port concession with Kerala state

19/08/2015

Indian private port major Adani Ports and Special Economic Zone (APSEZ) signed

a concession agreement with the Kerala government on 17 August to develop

and operate the proposed Vizhinjam Port.




To be built at a cost of INR40 billion (USD625 million), the ambitious, deepwater facility in

the southern state is aimed primarily at arresting the flow of Indian containerised cargo to

Colombo in Sri Lanka.

It is estimated that annually about 1 million teu of Indian cargo is transhipped through

foreign ports such as Colombo. Development of Vizhinjam is expected to lower the costs of

transhipment and benefit Indian trade.

The timeframe for the completion of the 4 million teu facility is four years. Gautam Adani,

chairman of Adani Group, the conglomerate with interests that include power, ports and

mining, is, however, hopeful of achieving completion within 1,000 days. Adani said that the

first ship would dock at Vizhinjam Port within two years. Construction is scheduled to begin

from 1 November this year.

"Given Adani's impressive track record in completing port projects this time frame is highly

realistic," Manish Saigal, managing director of consultants Alvarez & Marsal India told IHS

Maritime.

The proposed port is located 16 km south of Thiruvananthapuram, capital of Kerala and is

strategically placed on the international shipping route connecting Europe, the Middle East

Gulf, and the Far East.

Adani operates a total of seven ports and terminals in India and is in the process of building

a fourth container terminal in Mundra in the western state of Gujarat and another container

terminal in Ennore in the southern state of Tamil Nadu.

Total cargo handled by Adani Ports during the first quarter ending on 30 June 2015 rose by

17% to 40 million tonnes. Net profit increased by 13% to INR6.4 billion.

[IHS Maritime 360]

Challenging times ahead for LNG shipping

18/08/2015

LNG carrier freight rates have come under severe pressure due to rising fleet supply and

stabilising LNG demand, as Japan prepares to restart its nuclear power plants.

Despite the general market belief that new LNG supply from Australian projects will provide

ample employment to the growing fleet, there are immediate challenges on freight rates.

This is due to 49 million tonnes per annum (mtpa) of Australian LNG cargo supply expected

to hit the market over the next two years, according to the newly launched LNG Forecaster

report published by global shipping consultancy Drewry.




Global LNG trade and Drewry LNG liquidity ratio per quarter

[2013-2015YTD]

Source: Drewry Maritime Research

There are already signs of weakness in LNG demand as 17% of global liquefaction capacity

remained unutilised during the second quarter 2015. The LNG fleet continues to rise, with

30 more vessels expected to be delivered this year and a further 41 next year. Nonetheless,

the majority are yet to secure dedicated employment; at present, around 30-40 vessels are

sitting idle.

“With Asian demand stabilising, contractual supply from Australian projects will substantially

reduce the dependency of Asian buyers on the spot market,” said Shresth Sharma, Drewry’s

lead LNG shipping analyst.

Furthermore, the impact on LNG shipping demand will be muted given Australia’s relative

proximity to Asia compared to other key sources of LNG supply such as the Middle East. This

will serve to further diminish the overall employment prospects for the LNG fleet in the short

term.

Approximately 75% of new LNG shipping capacity serving this trade has been contracted by

Asian buyers, principally the big three importers of Japan, South Korea and China.

[Drewry]




Oceans: Overfishing and climate change, combined, intensify

threats

18/08/2015

Millions of people and billions of dollars depend on healthy oceans, but human

actions create complex interactions that endanger oceans

The combination of overfishing and climate change may be putting the oceans’ health —

and our own wellbeing — at risk. As State of the World 2015 contributing author Katie Auth

explains, protecting lives and livelihoods will require urgent and concerted action to improve

the oceans’ condition.

“Our sense of the oceans’ power and omnipotence—combined with scientific ignorance—

contributed to an assumption that nothing we did could ever possibly impact it,” writes Auth.

“Over the years, scientists and environmental leaders have worked tirelessly to demonstrate

and communicate the fallacy of such arrogance.”

Three billion people worldwide depend on fish as their main source of animal protein,

essential micronutrients, and fatty acids. The livelihoods of millions of people in both

developing and high-income countries rely on the multibillion-dollar fisheries industry—a

sector that accounted for 1.5 million jobs and more than $45 billion of income in the United

States alone in 2010.

“As our negative impact on the oceans has grown, so has our understanding of the myriad

ways in which the health of the marine environment determines our own,” writes Auth. “The

combined stresses of human activities like overfishing and climate change now pose distinct

and intensified threats to marine systems.”

The United Nations Food and Agriculture Organization reported that the global share of

marine stocks considered to be fished “within biologically sustainable levels” fell from 90

percent to 71 percent between 1974 and 2011. Of that 71 percent, a large majority (86

percent) of stocks are already fished to capacity. Rapid human population growth and rising

incomes are increasing the demand for food fish and pushing wild fish populations to the

brink.

Climate-related changes in the marine ecosystem are also affecting the oceans. Over the

last 40 years, the upper 75 meters of the world’s oceans have warmed by an average of

more than 0.1 degrees Celsius per year. Temperate species are responding to this change

and other stressors, such as pollution and fishing pressures, by moving toward the poles,

possibly increasing competition with polar animals.

Further, increased carbon in the atmosphere is triggering ocean acidification. About a

quarter of human-caused carbon dioxide from the atmosphere has been absorbed into

seawater. This changes the chemistry of the water and makes it more difficult for some




marine organisms (such as oysters and corals) to form shells and skeletons. Once these

populations are affected, entire food webs are threatened.

“Marine ecosystems and individual organisms that already are weakened by overfishing

become less resilient and more vulnerable to disruption, especially because environmental

change is occurring so rapidly,” writes Auth.

Yet Auth believes that there is still hope. “Conservation efforts aimed at improving system

resiliency have proven effective in addressing the nexus between fishing and climate

change,” she writes. Changes in fishing policies, equipment, and techniques that result in

less damage to ocean-bottom habitats and that reduce bycatch also would diminish fishing

stresses. Finally, revamping the global energy system away from fossil fuels would curtail

the rise in ocean temperatures and carbon dioxide levels.

Worldwatch’s State of the World 2015 investigates hidden threats to sustainability, including

economic, political, and environmental challenges that are often underreported in the media.

State of the World 2015 highlights the need to develop resilience to looming shocks.

[Worldwatch Institute]

Europe: The noxious effects of shipping emissions are on the

rise

18/08/2015

Despite the rise of “slow steaming,” ships are still big polluters.

In Europe, one in seven particles of toxic nitrogen oxides (NOx) come from shipping

exhaust, a 30 percent increase from a decade ago when the ratio was one in nine. All of the

resulting smog and acid-rain-producing pollution contributes to shipping’s threat to global

health which, as one recent estimate found, “leads to up to 60,000 premature deaths per

year,” says Folkert Boersma, an atmospheric scientist who led a new study surveying

Europe’s shipping pollution.

From 2005 to 2012, Boersma and his colleagues used NASA’s Aura satellite to scan the air

above Europe’s shipping lanes, measuring the levels of NOx. They found that over the past

decade, European shipping emissions have experienced wild swings. Changing industry

tactics, the global economic crisis, and pollution control legislation on land have all

contributed to shipping’s increasing share of the NOx pollution pie.

Part 1 of the findings was published in the journal Atmospheric Chemistry and Physics (ACP)

on 16 August 2015: The impact of shipping emissions on air pollution in the Greater North

Sea region – Part 1: Current emissions and concentrations.


http://www.worldwatch.org/state-world-2015-confronting-hidden-threats-sustainability-0

http://www.atmos-chem-phys-discuss.net/15/11277/2015/acpd-15-11277-2015-print.pdf

http://www.atmos-chem-phys-discuss.net/15/11277/2015/acpd-15-11277-2015-print.pdf



Before the economic crisis, from 2005 to 2008, European shipping NOx emissions climbed

about 15 percent, the scientists found, reflecting a growth in world trade. But in 2008, the

global recession shook the shipping industry, sending it, and its emissions, into a sharp

decline.

The recession and the resultant drop in trade led to a sharp 12 percent cut in emissions,

partly because of decreased demand, but also because of the shipping industry’s adoption of

the practice of “slow steaming.”

To save money during the recession, ships dialed back their speeds. As Boersma found,

ships in the Mediterranean slowed down by more than 30 percent, going from a running

speed of 20 to 25 knots to about 16 to 19 knots. “The slower they go, the cooler their

engines run, and the less NOx they produce,” Boersma says. This slow steaming led to a

roughly 45 percent drop in average ship NOx emissions.

Yet despite the still-ongoing strategy of slow steaming, “ship emissions are responsible for

more and more air pollution in Europe,” says Boersma. One reason is because land-based

NOx emissions in Europe decreased by about four percent annually from 2005 to 2012, due

to pollution control policies. “Air pollution on land is cleaning up much faster than air

pollution on the sea,” says Boersma. But since the shipping industry instituted slow steaming

for economic and not environmental reasons, ship emissions could climb once more if fuel

prices drop.

“The shipping sector should do more to clean up their act, to come into step with the

enormous measures being imposed on land-based sources of air pollution,” Boersma says.

“Even if slow-steaming was initially done for economic reasons, now that it’s seen to have

environmental benefits, my hope is that the shipping sector will continue to do it, since it

could help put [the industry] in a more positive light.”

[Hakai Magazine]

Italy: Port of Livorno unveils €800 million terminal expansion

plans

18/08/2015

The Italian port of Livorno is expanding its capacity with a new €800m

deepwater container ‘platform’ that will enable it to accommodate larger ships

and growing container traffic.

The ‘Europe Platform’ project is a global project that will see the rail network improved in

order to allow the rapid transit of containers. The new facility will offer a terminal area of 72

hectares, berths of more than 1,000m and water depth up to 18m.




According to Giuliano Gallanti, president of Livorno Port Authority, the new facility will offer

stability and reliability to shipping lines, making the port a flagship in the Mediterranean.

Steve Wray, senior consultant, Ocean Shipping Consultants, told Port Strategy: "For Livorno

port, it is essential that something is done to improve the existing terminal, or it will simply

become a second rate feeder outport with declining volumes."

"By improving capacity, water depth, quay length etc., the port has an opportunity to

compete with other relatively deepwater hubs in the Mediterranean and will be able to

compete with terminals in Genoa (VTE and SECH), as well as La Spezia and Vado Ligure

(APMT), to provide access to the Italian hinterland and potential links to central Europe," he

added. But the project is not without it's challenges: an international operator is still to be

secured and links to the hinterland need to be improved to provide reliable and frequent

freight.

"However, challenges are do-able and compared to both Genoese ports, Livorno has the

greater potential to succeed with more space to expand and the required depth of water for

ULCSs. There are also customs difficulties in the region, but Livorno has an opportunity to

be better than the rest with the new facility," Mr Wray told PS.

The project is budgeted at €800m, including port expansion and land reclamation. Since the

project is key to increasing both the regional and the national container traffic, the Tuscany

Regional Administration and the Italian Government, together with the Port Authority of

Livorno, have agreed to invest €450m. The remaining amount will be searched in the private

sector and, in this regard, talks with terminal operators have already started.

In view of the launching of the international tender, planned for the end of September, the

Port Authority of Livorno and the Tuscany Region will unveil the details of the project in a

conference on 15 September at the Tuscany Region Administration office in Brussels.

Preliminary building work has already started and an EOI for the tender process is expected

to be released in September. The new facility is expected to be operational by end 2020.

[Port Strategy]

Australia: Brookfield acquires port and railroad operator for

$8.8 billion

18/08/2015

Brookfield Infrastructure Partners, a global asset manager, said on Tuesday that

a group it leads had reached an agreement to buy the Australian port and

railroad operator Asciano for about $8.8 billion in cash and stock, and that it was

shopping for ports farther afield in a push to expand.




“We would like to leverage our container platforms in the U.S., Europe and South America,”

said Sam Pollock, Brookfield’s chief executive, in an interview after announcing the Asciano

deal in Sydney. Asked if that meant Brookfield, which has $207 billion in assets, was seeking

port acquisitions, Mr. Pollock said “yes.”

Brookfield wants to acquire more ports amid forecasts that seaborne trade will increase to

as much as 24 billion tons in 2030 from about nine billion tons in 2014, according to a study

by Lloyd’s Register, QinetiQ and Strathclyde University in Scotland.

A study by Drewry Maritime Research said that PSA International of Singapore, Hutchison

Port Holdings of Hong Kong, APM Terminals of the Netherlands, DP World of the United

Arab Emirates and the COSCO Group of China are the five biggest port operators based on

container volume, controlling together 29 percent of the world’s trade.

Top 10 global/international terminal operator’s equity based throughput (2012)

Brookfield has 10 ports on the West Coast of the United States and in Europe, according to

its website, making it a fairly minor player in container terminal operations compared with

its Asian and Middle East-based rivals.

Brookfield is a serial acquirer. This month, it said that it would seek to take a stake in the

Brazilian toll road and airport company Invepar, had acquired a 50 percent stake in a 1.86-

mile Chilean tunnel and signed agreements to purchase with co-investors the largest owner

and operator of natural gas storage in North America, Niska Gas Storage Partners.




Asciano owns a national network of railroads that haul iron ore, coal and grains. It also owns

a cargo-loading company, dry bulk ports and container terminals in Australia. It had been in

exclusive negotiations with Brookfield since the beginning of July.

Brookfield, with operations based in Toronto, raised its offer for Asciano to 9.15 Australian

dollars, or $6.73, in cash and shares from a 9.05 Australian dollars cash-and-share offer on

July 1. Under the terms of the acquisition, Asciano shareholders will receive 6.94 Australian

dollars cash per Asciano share and 0.0387 of a Brookfield Infrastructure unit per Asciano

share that has an implied value of 2.21 Australian dollars per Asciano share. That values the

deal at 12 billion Australian dollars.

John Mullen, the chief executive of Asciano, said at a news conference that the company,

which is based in Melbourne, had sought to expand outside Australia and had explored a

series of deals with other companies that were unsuccessful.

“We’ve been searching quite a while to expand our horizons,” Mr. Mullen said. “Now we

become part of a much bigger machine.”

Mr. Pollock said that after Brookfield closes its acquisition of Asciano, 55 percent of its cash

flow, or earnings before interest, taxes, depreciation and amortization, will come from its

transport businesses, including rails and ports. The remaining 45 percent of the company’s

revenue will come from its utility assets that include energy investments. “We’ll continue to

look at opportunities in this market,” said Mr. Pollock at the Sydney news conference. “This

is a market we like.”

Australia is attracting some of the world’s biggest infrastructure investors, including

Canadian pension funds such as Caisse de dépôt et placement du Québec with $226 billion

in assets as well as sovereign wealth funds from the Middle East like the Abu Dhabi

Investment Authority.

As much as $93 billion worth of electricity, port, airport and rail assets may be sold by

Australian states and the federal government to plug budget deficits while using part of the

proceeds to invest in new infrastructure, according to Australian government documents.

Brookfield owns a high-rise office building and a sports stadium in the West Australian city

of Perth, a coal port in Australia’s tropical northeast and 3,417 miles of railroad in Western

Australia.

[International New York Times]

Hong Kong: Safe harbour for liner cooperation?

18/08/2015

Hong Kong’s shipping industry braces itself for new competition law, writes

Suzanne Rab, a barrister at Serle Court Chambers in London.




14 December 2015 will be a milestone in Hong Kong’s journey towards a new economy-wide

competition law when The Hong Kong Competition Ordinance (CO) of 2012 comes into full

force. For the shipping sector, the uncertainty over implementation is not over. There

remain doubts as to the legality of many forms of co-operation agreement that, up to now,

have formed the bedrock of the industry. Rate fixing, vessel sharing, joint scheduling and

agreements over services (such as the frequency of sailings, cargo carrying capacity and

ports of call) could all risk falling foul of the new rules unless they qualify for exemption.

The First Conduct Rule under the CO prohibits agreements between independent companies

– “undertakings” – that have as their object or effect the prevention, restriction or distortion

of competition in Hong Kong. The First Conduct Rule identifies four categories of “serious”

anti-competitive conduct: price fixing; market sharing (including allocation of customers,

sales, territories or markets); output limitation and bid rigging. Applied strictly, the new rules

imply that many co-operative arrangements in the shipping sector could soon be subject to

infringement proceedings before the new Competition Tribunal and without a warning from

the Competition Commission. If found to be in breach, the companies involved could be

fined up to 10 per cent of Hong Kong turnover and ordered to modify or terminate their

arrangements.

Businesses will need to determine whether their practices benefit from a specific exemption

or exclusion. For example, agreements that enhance economic efficiency are exempt from

the First Conduct Rule. An undertaking may apply to the Competition Commission to

determine the applicability of the exclusions or exemptions set out in the CO to a particular

agreement. However, to date no sector-specific exclusions or exemptions have been granted

and consistent with the sector neutral scheme of the CO. Despite industry attempts to lobby

government and persuade the Competition Commission to grant an exemption, it is far from

clear whether exemption will be granted and, if so, under what conditions.

The CO follows many international counterparts in its substantive approach to the basic

competition law prohibitions. However, the treatment of liner conferences under competition

laws globally has evolved over the years. While major trading locations such as Australia,

New Zealand, the United States, Canada, China, Japan, Korea, Singapore, and Taiwan have

afforded antitrust immunity to such agreements in varying degrees over the years, the

approaches reflect shifting policy choices.

In the European Union, until 1986 the competition law provisions of the Treaty of Rome

were not applied to maritime transport. Since then, the European Commission has

maintained sector-specific block exemptions, although price fixing between competitor

shipping lines has not been allowed since October 2008. At present, save for a more limited

block exemption relating to liner shipping conferences, the application of EU competition law

to maritime transport is now essentially the same as in other parts of the economy.

Shipping lines and associations have raised concerns that unless competition law reflects the

rationalisation and economies of scale that their co-operation agreements bring about, this


http://www.nortonrosefulbright.com/files/the-hong-kong-competition-ordinance-68029.pdf



could result in Hong Kong losing out as a transhipment hub to other destinations such as

mainland China which enjoy a more relaxed regulatory environment.

If industry is to convince the Competition Commission that an exemption is warranted, the

following are areas which would need to be substantiated with quantifiable evidence: (1) the

causal link between co-operation, risk management and reliable shipping services; (2) the

ways in which the agreements promote technical and economic progress; (3) the

alternatives available and why they are not viable; and (4) the impact on consumers and

competition. A distinction between rate-making and other forms of co-operation could prove

meaningful. Such a demarcation would be reflective of the ongoing policy debate over when

to relax the antitrust embargo and allow operators to achieve legitimate commercial

objectives, while minimising the risks to competition.

[Splash 24/7]

Anatomy of a port disaster: The Tianjin Port explosions

18/08/2015

Author: Jean-Paul Rodrigue

Successive explosions at the port of Tianjin, the third largest in the world in

terms of tonnage and the 10th largest in terms of container volumes, resulted in

deadly blasts in the Chinese port city.

"Ports are significant consumers of land involving terminal operations as well as port-centric

logistics activities, which are generating large volumes of cargo flows and the need to store

this cargo temporarily. The port of Tianjin is the third largest in the world in terms of

tonnage and the 10th largest in terms of container volumes. It is a massive industrial and

petrochemical complex accounting for about 40% of all Chinese vehicles imports and

exports.

On August 12 2015 two subsequent explosions at the Ruihai Logistics facilities dedicated to

the storage and handling of hazardous materials took place, resulting in the complete

destruction of adjacent facilities and their stored cargo (mostly container yards and

automotive storage facilities that involved close to 10,000 destroyed or damaged vehicles).

Significant damage within a radius of 1 km (or more) also took place depending on how the

infrastructure was positioned in relation to the explosions (such as blasted windows and

damaged roofs).

A rail transit station on the other side of an adjacent major highway was also severely

damaged and the transit line it serviced was closed. More than one hundred people were

killed by the blast, including firefighters that were on site trying to extinguish the fires. The

port terminals were not damaged by the explosions, which took place in an area dominated




by logistical activities (particularly empty container depots) as well as automotive storage.

Port activities were shut down for a day but resumed afterwards.

The industrial incident triggered serious concerns because of large amounts of sodium

cyanide being stored on site at the time of the explosion, which involved the risk of

contamination and permanent evacuation for nearby residential areas. Several compounding

factors have exacerbated the severity of the incident to the level of a transportation

disaster.

Improper handling of the cargo before and during the incident. The cause of

the fire that triggered the explosion is most likely the outcome of a failure in properly

handling hazardous materials. The situation may have been exacerbated by

firefighters not well informed about the chemicals stored on site.

Lack of knowledge by the authorities of the nature and extent of the

hazardous materials being stored on site. The land where the hazardous

materials were stored is leased from the port authority of Tianjin and subject to

standard regulations and reporting related to industrial land use. However, it appears

that Ruihai Logistics did not fully comply to such regulations which in turn were not

fully enforced by local authorities. The port oversees thousands of tenants operating

very different activities and the fast growth of the port of Tianjin in recent years (as

well as for Chinese ports) has made port management increasingly complex.

Incompatible land uses in port area. Under normal circumstances, residential

areas and freight intensive activities are not compatible and should not be located in

proximity. As the above map illustrates, there are significant residential areas in close

proximity to the hazardous materials site. This proximity appears in conflict with

Chinese environmental law. The site was approved for handling hazardous materials

only a few months before the explosion, implying that it has been operating

informally beforehand.

The economic consequences of this industrial accident are difficult to assess and are

contingent upon the level of contamination and how extensive the contaminated area is

going to be. As stated before, the port's major infrastructures were unaffected and the area

where the disaster took place was dominantly devoted to container storage, stuffing and de-

stuffing as well as automotive storage. These activities can be relocated relatively easily and

are not particularly capital intensive (their major inputs are space and labor). Still, the port

temporarily lost a share of its logistical capabilities since the contents of containers needs to

be processed, an activity that does not take place within terminals, but in port-centric

logistics zones.

More complex is the outcome on neighboring residential and commercial activities (including

a civic center and a major sport stadium), which are likely to be seriously impaired and see

their real estate value plummet. Traffic disruptions are also to be expected because of the

closure of a major highway servicing the port area. It is possible that maritime shipping




companies elect to divert some services and cargoes to nearby ports such as Qinhuangdao,

Qingdao or Dalian. This will result in longer and more expensive inland transportations. The

industrial accident underlines the complexity of port and logistical operations and the risk

related to the storage of hazardous materials in such a setting."

Source: Basemap adapted from Google Earth

[PortEconomics]

Accountability in China: A blast at Tianjin Port sets off an

explosion online

18/08/2015

Social media fills in the blanks left by official narratives of the Tianjin disaster

The most remarkable feature of the aftermath of the explosions in Tianjin, in northern

China, has been the extraordinary contrast between the official reaction to the crisis, which

has been profoundly flawed, and the online reaction, which has entirely dominated the

agenda.




The prime minister, Li Keqiang, visited the scene of the destruction on Sunday, August 16th.

Government officials, he said, had to have a “strong sense of responsibility” towards

people’s lives and must act “without withholding information”. Fine words. The trouble was

that Mr Li was accompanied by Yang Dongliang, the head of the state administration of

work safety, a national body. Mr Yang was in charge of the investigation team in Tianjin and

had spent 16 years working in the Tianjin government before being promoted. But today,

August 18th, he was in disgrace and placed under investigation by the government’s anti-

corruption body. It was a huge embarrassment to the government’s efforts to clean up the

city. And it was not the only one.

In the six days after the explosions, the Tianjin city government held a series of press

conferences which were also an embarrassment. They provided little information about the

nature and quantity of the dangerous chemicals kept in the industrial warehouse that

exploded. The city official in charge of industrial safety and fire prevention, He Shushan, did

not appear until the fifth day (apparently he was too busy fighting the fires). One week in

and neither the highest ranking officials of the city and port have shown up at the press

conference. Those who have appeared seemed ill informed and ill at ease. Moreover, the

televised press conferences were cut off as soon as the question-and-answer session began.

As a commentary in People's Daily said, such behaviour "fuels public distrust".

In contrast, China’s social media made all the running. Almost all the early pictures that

spread around the world came from Chinese social media. Online chat rooms first drew

attention to the safety failures revealed by the explosions. Local residents had no idea there

were dangerous chemicals on site. The warehouse was barely 600 metres away from the

nearest residential block, whereas the law says the minimum safe distance is 1km. When

asked about the legally required distance at their press conference, the local officials did not

know the answer.

Social media users also pointed out that the amount of sodium cyanide stored in the

warehouse was many times greater than the company concerned was permitted to keep or

had officially recorded. And as many accounts pointed out, no one knows how the company,

Ruihai International Logistics, had got permission to handle these dangerous substances,

nor how it managed to pass a local environmental audit in September 2014.

Social media offered the main platforms for residents demanding that the government buy

the buildings that had been damaged and for those concerned about the fate of the dozens

of firemen killed in the explosions. Both these matters led to demonstrations against the

government over the weekend.

Social v state

The state media at first mentioned only so-called official firefighters—firemen who are part

of the public-security bureau of the city government. But many of those who died were

“contract firemen”: mostly young, inexperienced, ill-trained workers hired by the port, not

the local government. As social media pointed out, many of the firemen who arrived before




the explosions—and who were killed by them—were contract workers. And as they also said

(and which Mr Li later repeated) all firemen deserved respect and gratitude, not just the

official ones.

Lastly, it was social media and an independent magazine that raised questions about

Ruihai's two owners, Shu Zheng and Li Liang. Mr Shu said he is holding shares on behalf of

an unknown third party. According to Caijing, a magazine that has occasionally fallen foul of

the censors, one possible owner is the son of a former head of public security in the port of

Taijin. If true—and the link has not been confirmed—it would be an example of the close

relationships between business and government that are common in China.

China’s communist rulers spend millions on a sophisticated operation to control and

influence internet and online traffic. The aftermath of the Tianjin explosions shows that

social media are nevertheless China’s main public square for debate and that government

attempts to influence the narrative of the disaster have failed completely.

[The Economist]

How dangerous is the sodium cyanide found at Tianjin Port

explosion site?

18/08/2015

Author: Benjamin Burke, Molecular Imaging Post-Doctoral Research Assistant at University

of Hull

Officials investigating a huge explosion at a warehouse in Tianjin in China have

discovered a store of 700 tonnes of sodium cyanide – more than 70 times the

legal limit allowed.

Image source: IXOM Safety Data Sheet

Cyanide has a particularly unpleasant reputation and finding it at a major disaster site is far

from welcome. However, if officials act fast they should be able to limit its damaging effects.




What is sodium cyanide?

The term cyanide is clearly

understood in the public

consciousness to be almost

synonymous with poison itself.

This is largely because of its use

as lethal suicide pill (L-pill) in

World War 2, most notably with

the suicide of Nazi army officer

Erwin Rommel. The cyanide

used in the L-pill was potassium

cyanide but the properties of

sodium cyanide are nearly

identical.

An inorganic and very innocent

looking white solid with deadly

properties, sodium cyanide (NaCN) can be fatal at amounts as little as 5% of a teaspoon. It

is produced from the equally dangerous gas hydrogen cyanide (HCN) in a simple process

with sodium hydroxide.

Why would a company want so much of it?

Sodium cyanide is used industrially across the globe, most frequently in the mining of gold.

Although most of us have the traditional imagery of a 19th-century gold miner panning for

nuggets, this isn’t the industrial method used today.

Most of the world’s gold is not found in nugget form but as very fine gold powders in rocks.

In fact, our cultural demand for gold forces us to mine in rocks that can be as low as

0.005% gold. This means we need industrial extraction to separate and purify gold from all

the other materials.

After mining and milling, the crude rock mixture is turned into a fine powder and added to a

solution of sodium cyanide. The gold forms strong bonds with cyanide molecules and can

then be separated from the rest of the minerals because it is then soluble in water. It then

reacts with zinc and turns back into a solid. Finally is smelted to isolate the gold and cast

into bars.

How dangerous is it?

As with the very similar potassium cyanide used in the L-pill, sodium cyanide is extremely

toxic to humans. Although there are risks with skin absorption, the biggest risk is ingestion.

Inhaling or swallowing sodium cyanide blocks oxygen transport causing serious medical

problems and ultimately death.




Deadly smoke Reuters/China Stringer Network

However, the safety of sodium cyanide changes if it is present during an explosion. Avoiding

oral ingestion should usually be relatively simple but an explosion can cause it to be inhaled

as a fine powder (this danger should have passed quickly – and face masks will also prevent

fine powder inhalation). The biggest fear is the formation of hydrogen cyanide upon

exposure to water or high temperatures. Hydrogen cyanide, as a gas, is very dangerous if

inhaled.

What if the remaining store leaks?

Contamination of water supplies could be a concern but is easily tested for. The Chinese

authorities seem to be treating the spill with hydrogen peroxide, which forms significantly

less dangerous fulminates. Waste water and other areas could be simply treated with

sodium hypochlorate (bleach) to remove cyanide ions.

The spill is (but more significantly was) very dangerous, especially at these levels. But the

nature of cyanides means we can detect them easily and monitor the process of cleaning

up. The clean-up should proceed as quickly as possible. The other heartening factor is that

after the short-term – albeit very seriously deadly – effects, there should be no slow-onset

ramifications, as you would get with a carcinogen or something harder to deal with.

All previous spills have been dealt with easily with no long-term effects and the procedures

are well known, so all the hydrogen cyanide in Tianjin should now be gone. The solid

sodium cyanide is not so dangerous in passing: you can open a bottle with 3,000 times the




lethal dose without any problems (without letting it react with moisture and convert to

hydrogen cyanide). The advice for anyone nearby would be to avoid drinking the

contaminated water and stay out of the area while the hydrogen cyanide is processed by

natural biochemical pathways and climate dilution to safe levels.

[The Conversation]

To service global trade, today’s ships and cargo are smarter

than ever

18/08/2015

Author: D John Mangan, Professor of Marine Transport and Logistics at Newcastle University

A glance at the objects around you at home or work will reveal objects brought

from across the world, from the bagged salad in your fridge (Kenya), to the

computer or smartphone upon which you’re reading this article (Taiwan, China,

the US), or the table upon which it rests (Sweden).

The enormous volume of global trade that brings us products from all over the world has

been made possible by a profound technological revolution occurring behind the scenes.

The world’s biggest container shipping firm, Maersk, estimates the cost of transporting an

apple from a field in New Zealand to a cold store in Europe is eight US cents. Logistics

experts talk of “landed costs”, the sum of all of the various costs associated with freight.

There is also an environmental cost, of course, for example bringing vegetables from afar

rather than from local farms. But the landed costs of many products have fallen such that

it’s usually cheaper to transport many items halfway around the world than to produce them

locally.

Much of this fall in costs comes from the efficiencies ushered in by containerisation which,

since it was introduced in 1956, has had a greater effect on globalisation than all the trade

agreements signed in the past 50 years.

The largest container ships today, such as the CSCL Globe and MSC Oscar carry around

19,000 TEUs (20ft equivalent unit – a standard 40ft container is two TEUs). But ships are

not likely to greatly grow beyond 20,000 TEUs for the foreseeable future – much as the

Airbus A380, currently the world’s largest passenger aircraft carrying up to 853 passengers,

is probably as big an aircraft as we will see. If a ship or aircraft is so big and expensive that

nobody can operate it (in terms of costs and system constraints) then it’s of little use. So

while there have been remarkable achievements in speed and scale, today it is the

communication technology that links systems together that has the greatest logistical

impact.




The network is the unseen hero

The internet of things (IoT) refers to small, internet-connected sensors that can detect and

transmit information. Network technology company Cisco extended this idea to the “internet

of everything” (IoE), in which the sensors talk not to a central hub but to each other,

exchanging data and making decisions autonomously based on that data. The four

components are data (how it is gathered and used), people (how they are connected),

things (network-connected devices providing data for intelligent decision making) and

process (delivering the right information to the right person or machine at the right time).

Increasingly it is not just control processes that are growing in intelligence but the ships and

cargoes themselves. For example: by law, ships above a certain size are obliged to transmit

updates on their position via Automatic Identification Systems (AIS). It is possible to see this

information online, a real-time snapshot of global shipping.

Connected ships perform better. For example, by taking smart routes around bad weather,

and allowing remote monitoring of ships for safety. Smart container technology can monitor

temperature and humidity of containers for changes that could damage the contents, or to

change the environment so as to, for example, prevent the spoiling of fruit in transit due to

delay.

Containerisation: a revolution in a box. Port by hxdyl/shutterstock.com

Details concerning individual shipments are transmitted before the ship arrives at port,

allowing customs authorities time to profile and sometimes pre-approve incoming cargo. To

the same end, eFreight initiatives cut down the paperwork associated with freight: the




International Air Transport Association (IATA) once estimated that there can be up to 25

separate documents accompanying an air freight shipment.

Better data brings more automation

An improvement is the “single window” online portal approach to which all those involved

have access. This is regarded as the key to making freight movement easier, giving those

across the supply chain the data they need, meaning product deliveries can be sped up or

slowed down so that cargoes arrive at the time and place they’re needed – the “gearbox

approach”. Why have a warehouse at the arrival end? Just deliver the product exactly when

required, straight into waiting trucks.

On arrival, container handling is done by automated cranes, which are cheaper and safer

than human operators. Better cargo tracking means freight is traceable from setting off

through to final destination. Less product is lost and damaged thanks to more accurate

handling, which means lower incidental costs. Many warehouses now use automated pick-

and-pack systems based on barcodes and RFID radio transmitting smart tags rather than

human handlers. Once considered science fiction, robots in the warehouse are becoming

affordable, while warehouse staff are equipped with augmented reality applications and

smart glasses.

Technology improvements have also found uses in the trucking industry – and convoys of

wireless-linked, semi-autonomous, driverless trucks (known as “platooning”) are a possibility

in the near future.

So next time you receive the wrong delivery it’s quite likely to be your fault (for ordering the

wrong thing), and the company who sold the item will have the data trail to prove it. On the

other hand, whether we need and can afford the vast array of goods that global logistics

systems deliver cheaply and efficiently to our door – fresh fruits and flowers all year round,

for example – is another conversation worth having.

[The Conversation]

Norway: Shipowners turn their backs on shipbreaking on

beaches

18/08/2015

In an op-ed in Dagens Næringsliv, the largest daily business paper in Norway,

the Norwegian Shipowners’ Association and their CEO Sturla Henriksen have said

a definite “no” to shipbreaking on beaches.

“The turnaround by the Norwegian Shipowners shows us that they now agree with the

principle advocated by NGOs for years. Hazardous beaching should not take place in 2015.




It is a dinosaur way of doing things, knowing that there are modern and safe solutions,”

Sigurd Enge, an advisor to NGO Bellona said.

Norway has become the first country in the world to discourage shipowners from scrapping

ships on beaches, Bellona claims. “On behalf of the NGO Shipbreaking Platform I am happy

to announce that the Norwegian Shipowners’ Association now is on our team. This is a

breakthrough in the international efforts to end the beaching,” Enge said.

In contrast to Norway’s position, the Danish Shipowners’ Association visited Alang earlier

this year and noted that positive developments are underway in some of the scrapping

facilities.

Maria Bruun Skipper, director of the Danish Shipowners’ Association (DR) said Alang is a

place which has, rightly, been regularly subject to harsh international criticism for its lack of

safety and environmental consideration.

“We visited four of the 175 or so scrapping facilities in the area, which it has to be said is a

very small proportion and therefore not representative of Alang Beach as a whole. The aim

was not to give Alang as a whole the thumbs up or down, but to take a closer look at the

improvements that by all accounts some of the facilities in Alang have put in place,” said

Skipper.

One conclusion she made is that some of the scrapping facilities in Alang Beach have

undergone a positive development in order to comply with the requirements that will be set

by the forthcoming Hong Kong Convention.

India implemented the Ship Recycling Code in 2013, which requires undertakings in relation

to the environment and the working environment – especially handling of hazardous waste,

sampling of water and soil, training of workers and health care.

[Splash 24/7]

Nigeria: APM Terminals announces US$2 billion port investment

18/08/2015

New port in Bagadry to be APM Terminal’s largest investment ever

APM Terminals (APMT) has announced that it will be investing more than US$2 billion dollars

in a new port in Nigeria, which will be the second largest port in Africa after Port Said and

will be the biggest single investment made by the terminal operator, according to the

Copenhagen Post.




APMT also operates two other ports in Nigeria, Apapa and in Onne, but operations in Nigeria

are hampered by constant traffic congestion, piles of rubbish and a general lack of effective

infrastructure. The short 40 km trip from Bagadry to Lagos can take anything from 45

minutes to four hours, depending on traffic.

APMT recently acted on its decision to invest $1.5 billion on the Port of Tema in Ghana,

Africa, with the establishment of a Greenfield port outside of the existing facility and

upgrades to the adjacent road network.

David Skov, the Managing Director for APMT in Nigeria, said: “We are currently purchasing

property from the state and will start construction later this year. The port is scheduled to

be completed in 2019.

“Globally, it will be APM Terminal’s largest ever investment and marks a strategic shift to

multi ports. It means we will supplement our own experience in container ports with the

establishment of a free zone, an oil port and a bulk port, so in other words a complete port.”

The operator has recently announced a partnership with a Colombian terminal operator to

manage the multi-purpose Cartagena terminal.

Fact File: APMT has a global terminal network of 20,600 professionals and 200 port and

inland services operations in 58 countries around the globe. APMT designs, builds and

operates port and terminal facilities, as well as providing inland cargo services for cargo

transportation between port facilities and inland locations, as well as other associated cargo

handling functions.

[Port Technology International / Copenhagen Post]

Malaysia: $500 million upgrade of Samalaju Port

17/08/2015

The $500 million upgrade of Malaysia’s Samalaju Port is on track to boost

throughput at the port by ‘around six million tons of cargo in its first full year of

operations’, according to comments from Paul Charlton, Managing Director of

BMT WBM’s Machinery Group.

The port in Malaysian Borneo is being developed by state-owned operator Bintulu Port

Holdings Bhd (BPHB) as part of the Sarawak Corridor of Renewable Energy (SCORE) .

The majority of tenders have now been awarded with BMT WBM collaborating with

Malaysian firm Muhibbah Engineering to design, fabricate, procure, install and commission

the Conveyor System Facilities (CSF).




“The CSF project is currently in the design phase and fabrication and civil works on the site

have commenced. The wharf which is currently under construction will be handed over

early 2016,” Charlton explained.

Despite confidence from BMT WBM in the handover date for the wharf there have been

some concerns in progress at the site with an overall 12% delay in the implementation

schedule. “We believe this delay can be ‘caught up’ and the port’s phase one development

which caters for handymax and handsize vessels will be completed by the third quarter of

2016,” Datuk Mior Ahmad, chief executive of BPHB said.

The port started

operations last year via

interim facilities and

received 127 vessel calls

with total cargo

throughput of 5,743

tonnes in the first eight-

months alone. Once fully

operational the port will

handle imports and

exports of raw materials

including silicon,

manganese, aluminium,

ferroalloy and phosphate

as well as coke

processing with industrial firms attracted to the area by cheap energy rates. “We target to

increase cargo throughput to under 200,000 tonnes this year,” Mior Ahmad added.

Phase 1 of the CSF project will develop a pipe conveyor approximately 2,000 metres long

dedicated to handling Alumina, 13 conventional conveyors forming three import systems as

well as three stockyards, three stackers and a control centre for the whole plant.

“There will be four conveyor lines to deliver raw materials from the port wharf to one of

three open stockpile areas, or to the industrial park user conveyor systems at the port

boundary transfer house. The material delivered to the stockpiles will be through a travelling

stacker system,” Charlton added.

“There will be many different types of materials passing through the port system, with

material densities ranging from 800 kg/m3 to 3,200 kg/m3. The ship unloading, conveying

and stockpiling systems must be designed to accommodate all of the materials and the

range of associated properties.

[Port Finance International]




U.S.: Shell Arctic drilling receives final approval

17/08/2015

The U.S. Bureau of Safety and Environmental Enforcement (BSSE} has granted

Shell its final approval to drill for oil and gas offshore Alaska in the arctic waters

of the Chukchi Sea.

According to the BSEE, Shell received approval for its Application for Permit to Modify to

conduct exploratory drilling activities into potential oil-bearing zones offshore Alaska at one

of two wells at the Burger Prospect, known Burger J. The BSEE said that Shell remains

limited to the top section of the second well, Burger V.

The approval comes after the icebreaker Fennica, carrying a required piece of containment

equipment known as the capping stack, arrived in the Chukchi Sea following repairs to fix a

hole in its hull suffered while in Dutch Harbor earlier this summer. The absence of the

Fennica on-site previously limited Shell to drilling only the top sections of wells and

prohibited the company from drilling into oil-bearing zones.

The BSEE said that the decision announced Monday came “after extensive review and under

a robust array of safety requirements”, although final approval was widely anticipated.

The Burger Prospect is located in about 140 feet of water approximately 70 miles northwest

of the village of Wainwright, located in North Slope Borough of Alaska.

Monday’s approval is the first time Shell has been granted a permit for arctic offshore drilling

since 2012.

[gCaptain]

EU-funded project Hercules-2 launched

17/08/2015

The Hercules-2 project — or Hercules-B — is Phase 2 of the original Hercules R&D

program for large-engine technologies originally conceived in 2004 by Wärtsilä

and MAN Diesel & Turbo.

The same two companies, together with Winterthur Gas & Diesel, collaborate now on this

cross-industry initiative, to develop basic technologies for use in two- and four-stroke marine

engines.

Hercules-2 aims at fostering environmentally sustainable and more efficient shipping and is

partly funded by the European Union. Altogether, 32 marine industry partners from 11

different companies, 16 universities, and five research organizations are cooperating in this

project, with the National Technical University of Athens in Greece as coordinator.




R&D efforts focus on four main areas: the application of alternative fuels and the

optimization of fuel flexibility to facilitate seamless switching between different fuels; the

development of new materials to support high-temperature component applications; the

development of adaptive control methodologies to significantly improve an engine’s

performance throughout its life span; and to achieve near-zero emissions via combined,

integrated, after-treatment of exhaust gases.

Winterthur Gas & Diesel’s vice president, R&D, Rien Hoogerbrugge, sees Hercules-2 as an

important opportunity. “This project enables the partners to combine know-how by bringing

together scientists from various fields and institutions to investigate concepts, and to

develop robust technologies for application on different types of engines.”

“The greatest of the many benefits stemming from Hercules-2 will be the development of

new technologies that have a positive impact on our customers’ profitability. Another is the

significant contribution this project will make to more environmentally sustainable shipping,”

said Ilari Kallio, vice president, R&D, Engines, speaking on behalf of Wärtsilä.

“Hercules-2 is a strong platform that will create a basis for the development of technologies

applicable to ship engines in four to five years time,” said Søren H. Jensen, vice president

and head of R&D at MAN Diesel & Turbo. “We have, therefore, positive expectations and

look forward to collaborating with so many cross-industry partners.”

The Hercules-2 project is scheduled to run for three years, and its technologies are

eventually expected to be employed aboard large ships.

[Diesel & Gas Turbine Worldwide]

World shipping slump deepens as China retreats

17/08/2015

Ports across the world suffer worst hit since the Lehman crisis as emerging

markets wilt, but trade may not matter so much to global GDP any longer

World shipping has fallen into a deep slump over the late summer, dashing hopes of a quick

recovery from the global trade recession earlier this year and heightening fears that the six-

year economic expansion may be on its last legs.

Freight rates for container shipping from Asia to Europe fell by over 20pc in the second

week of August, even though trade volumes should be picking up at this time of the year.

The Shanghai Containerized Freight Index (SCFI) for routes to north European ports crashed

by 23pc in five trading days. The storm in the shipping industry comes as the New York

state manufacturing index for July plummeted to a recessionary low of minus 14.9, the

lowest since the Great Recession and one of the steepest one-month drops ever recorded.




General business conditions seasonally adjusted

The new shipments component fell to -13.8, and new orders to -15.7. A similar drop

occurred in 2005 and proved to be a false alarm but the latest fall comes at a delicate

moment for the world economy.

There is now a full-blown August storm sweeping through global markets. The Bloomberg

commodity index dropped to a fresh 13-year low on Monday and the MSCI index of

emerging market equities touched depths not seen since August 2009.

A closely-watched gauge of emerging market currencies has fallen for the eighth week – the

longest run of unbroken declines since the beginning of the century - led by the Malaysian

Ringgit, the Russian rouble and the Turkish lira.

Asian currencies have dropped against the dollar over the last year




China’s surprise devaluation last week continues to send after-shocks through skittish global

markets, already on edge over a likely rate rise by the US Federal Reserve in September -

though this is now in doubt.

The currency move was widely taken as a warning that the Chinese economy is in deeper

trouble than admitted so far, a menacing prospect for exporters of raw materials and for

trade competitors in Asia. It threatens to transmit a fresh deflationary impulse through the

global system.

The great worry is that companies in emerging markets will struggle to service $4.5 trillion

of US dollar debt taken out in the boom years when quantitative easing by the Fed flooded

the world with cheap money, much of it at irresistible real rates of 1pc. This is up from $1

trillion in 2002.

The monetary cycle has gone into reverse since the Fed ended QE in October 2014 and cut

off the flow of fresh liquidity. While the first rate rise in eight years has been well-

telegraphed, nobody knows for sure what will happen once tightening starts in earnest.

This stress-test could prove even more painful if China really has abandoned its (crawling)

dollar peg and is seeking to protect export margins by driving down its currency.

The yuan has risen by 60pc against the Japanese yen and 105pc against the rouble since

mid-2012. Yet China nevertheless has a trade surplus of 6pc of GDP.

Data from the Port of Hamburg released on Monday show much damage this currency surge

may be doing to Chinese companies. Axel Mattern, the port’s chief executive, said a 10.9pc

drop in trade with China was the chief reason why volumes of container cargoes passing

through the port fell 6.8pc in the first six months.

“During the first six months of the years the euro was on average 19 percent lower than the

yuan, making purchase of Chinese goods costlier for European importers,” he said.

If so, this is grist to the mill of those arguing that China timed its switch to a market-driven

exchange rate in order to disguise what is really “currency warfare”, or a beggar-thy-

neighbour strategy as it used to be known. The Chinese central bank has dismissed such

claims as “nonsense”. It has intervened to stabilize the yuan over the last three days.

The port of Hamburg said trade with Russia collapsed by 36pc, the latest evidence that the

rouble crash and deepening recession has forced Russian consumers to cut back drastically

on purchases of imported cars and heavy goods.

The Dutch CPB index of world trade fell in both April and May in absolute terms, culminating

five months of dire shipping activity. It had been widely-assumed that the worst was over.




World merchandise trade

World trade has slumped

Yet more recent data from Container Trades Statistics shows that global volumes fell 3.1pc

in June from the already depressed levels the month before. This has come as shock: the

period from June to August is typically the strongest time of the year, boosted by pre-

shipments for the Christmas season.

What is even more disturbing is that fresh port data from Asia suggest that the downturn

dragged on into July, and may even have deteriorated.

Singapore – the world’s second largest entrepot – saw a 13.3pc contraction in container

volumes from a year earlier, the worst performance since the sudden-stop in trade after the

Lehman crisis.

The growth in cargo shipments for all the major ports in East Asia (that have reported so

far) fell to a new cycle-low of 0.6pc in July, according to tracking data collected by Nomura.

“The clock is ticking on the third quarter. We remain sceptical of those trying to “call a

bottom”,” it said.

It is still unclear how much of this weakness reflects recessionary conditions, and how much

stems from a more benign shift in the structure of the global economy.

China’s reliance on imported components for its export industry has fallen to 35pc from 75pc

in 1992 as the country moves up the technology ladder. The Communist Party is deliberately

weaning the economy off heavy industry and mass production, shifting to a more mature

service economy that relies less of trade. At the same time, the US and Europe have been

“re-shoring” manufacturing plant from China as Asian labour costs rise, reversing the

process of globalisation.

These changes mean that the “trade-intensity” of the global economy is falling. The trade

share of world GDP was 40pc in 1990. It rose to a peak of 61pc in 2011, and has since

drifted down to below 60pc.




China’s share of imports of parts and components in exports of merchandise and

manufacturing [%]

A recent study by the International Monetary Fund said the expansion of global supply

chains driven by the US and China in the early 2000s is “exhausted”. The implication is that

trade is no longer the pulse of the global economy. Other indicators are less worrying.

Both credit and key measures of the money supply are rising briskly in Europe, the US, and

latterly in China as well, pointing to a recovery later this year. These forces may prove to be

more powerful in the end.

[The Telegraph]

U.S.: Crow Tribe signs partnership in Puget Sound coal port

development

17/08/2015

The Crow Tribe has struck a partnership with SSA Marine to develop a Puget

Sound coal terminal in Washington state considered crucial to exporting Indian

coal.

Crow Tribal Chairman Darrin Old Coyote said he signed an agreement Aug. 7 for a 5 percent

tribal share in the Gateway Pacific Terminal. The cost of the Crow buy-in won't be

determined until the project near Bellingham, Washington, receives environmental approval

from the U.S. Army Corps of Engineers.

"We've got billions of tons of coal and we're basically investing in our future," Old Coyote

said. Crow coal reserves in southeast Montana are estimated at 17 billion tons. The tribal

Legislature, which convenes in October, will have to approve the agreement signed by Old

Coyote to make it permanent.




The terminal, if approved, would also handle farm commodities, giving income diversity to

the Crow, Old Coyote said.

Cloud Peak Energy, which owns the Spring Creek Mine on the Crow Reservation, is a 49

percent shareholder in the Gateway Pacific Terminal. The mining company is paying for up

to $30 million in permitting costs for the port, which would be a 54 million metric ton export

terminal handling coal, grain and potash.

In 2013, Cloud Peak agreed to lease 1.4 billion short tons of Crow coal adjacent to the

company’s Spring Creek Mine. The deal paid $3.75 million to the Crow in the short term,

with a potential $10 million to follow. Neighboring Spring Creek Mine shipped 18 million tons

the year the lease was signed. Cloud Peak would be able to ship at least 17 million short

tons of coal a year through the Gateway terminal, under its agreement in the partnership.

However the terminal project faces steep challenges. The Lummi Nation of Puget Sound has

fishing waters next to the terminal site. Last January, the Lummi asked the Army Corps of

Engineers to the abandon environmental review of the port proposal, which the Lummi

argue violates treaty fishing rights.

By abandoning the environmental review process, the Army Corps would kill the port

project. Two weeks ago, Republicans Sen. Steve Daines and Rep. Ryan Zinke of Montana

rushed to pressure the Army Corps to ignore the Lummi’s request and carry on.

Daines then met with Jo-Ellen Darcy, assistant secretary of the Army for civil works, to

thwart any attempt by Pacific Northwest Army Corps of Engineer staff to kill the

environmental review process.

Montana Attorney General Tim Fox said Thursday that Crow ownership in the terminal

project affirms the need for a continued environmental review process.

[Casper Star-Tribune]

What the expansion of the Suez Canal shows about shifts in

global shipping

17/08/2015

Author: Satya Savitzky, PhD Candidate, Lancaster Center for Mobilities Research at

Lancaster University

Egypt has opened a second lane to the Suez Canal amid much fanfare. The US$8

billion dollar expansion adds 35km of new channels to the existing canal and

another 35km where existing bodies of water were dredged to make way for

larger ships.




This will supposedly increase capacity from 50 transits a day to 97 and cut waiting times

from 18 to 11 hours, which the Suez Canal Authority claims will more than double annual

revenue to US$13.2 billion by 2023.

By cutting the distance between Europe and Asia by 43%, the Suez Canal’s opening in 1869

dramatically lowered the cost of moving goods between the two continents. Suez – like the

Panama Canal, which is also currently undergoing expansion – drew distant places together,

facilitated the expansion of national economies, and accelerated globalisation.

Yet in the 21st century, driven largely by growth in China’s manufacturing exports, there are

now many more ships plying the sea lanes. And these ships are increasing in size. The

world’s largest is the size of four football fields and can carry 19,000 20-foot cargo

containers. As a result, the narrow passages that provide economical links between centres

of production and consumption – like Panama, Suez and Malacca – are as much obstacles to

global trade as facilitators of it.

Imperatives to smooth the flow of commodities, as well as provide insulation from the

disruptions of piracy, are also driving the development of alternative routes. These include

the new Chinese-backed Silk Road initiative that connects China to Europe over land and

sea, and the Russian-controlled Northern Sea Route through the Arctic, which is becoming

more accessible as a result of climate change processes. The expansion of Suez is therefore

part of a much larger picture of global growth in shipping.

Laden with symbolism

Shipping routes are not purely about supply chains and economics. They are culturally and

symbolically laden – particularly because they involve re-tracing historical trade routes.

European legacies of discovery and natural conquest live on through the desire to master

routes across the Arctic. And similarly the Chinese government’s Silk Road initiative, dubbed

“one belt, one road”, invokes an imagined community of trade, linking China to both its

neighbours and its past.

As anthropologist Brian Larkin proposes, material infrastructure is often implicated in

dynamics that have little to do with their technical functions. The carving of these routes is

as caught up with the carving of national identities, as it is with extending a state’s

geopolitical reach and increasing its revenue. The recent opening of the new Suez Canal is

as much a symbolic response to terrorist threats by the Egyptian government as it is an

attempt to bolster Egypt’s global standing.

Indeed the speed of the canal’s upgrade has astonished many. Completed in just 11

months, trade routes now seem subject to the same accelerated cycles of upgrade and

obsolescence as the goods that move through them. Drummed up by their architects and

promoters, there is also a similar sense of hype and anticipation that is built around these

projects, which invariably all promise to transform global trade.




Future problems

Yet, even with the expansions, Suez and Panama will still not be able to accommodate the

world’s biggest oil tankers and container ships, making them in a sense, already obsolete. A

Chinese consortium, however, is developing a new 175-mile long canal through Nicaragua,

which will be capable of handling the world’s biggest vessels. The project will provide an

alternative to the Panama Canal, but faces vociferous opposition from the farmers, peasants

and indigenous groups whose lands are set to be annexed by this new artery of global

trade. Thousands of people were reportedly evicted from their homes to facilitate Suez’s

expansion too.

Not everyone’s happy about the growth. EPA/Mario Lopez

There are inevitable ecological implications associated with reshaping land and seascapes on

such a vast scale too. Suez’s opening in the late 19th century not only facilitated the global

movement of goods, but the massive transfer of invasive species. Some 350 non-native

species are thought to have entered the Mediterranean via the canal, many of which pose

significant threats to human health and local ecosystems.

For instance swarms of “nomad jellyfish”, which entered the Mediterranean via Suez in the

1970s, frequently make commercial fishing impossible, can close tourist beaches, and have

even temporarily disabled a power station. The enlargement of the canal, scientists have

warned, will increase the number of invasions.




Footprints in the sea

Unlike paths etched through landscapes, oceans retain no footprints. But the intensity of

modern-day dredging, as well as the largescale transfer of marine biota, means that

seascapes will bear the mark of these projects long after the activities which gave rise to

them cease.

The expansion of Panama, scheduled for completion next year, has triggered a wave of

frenetic dredging activity along the Atlantic coast, as ports are forced to expand or face

losing traffic to competitors. New York’s port alone has moved some 42m cubic yards of dirt

over a decade in anticipation of the opening of an expanded Panama Canal. Thousands of

years from now, archaeologists will be able to find the channels carved through our oceans

by all this movement.

So, while the economic significance of the expanded Suez is in doubt, its symbolic value is

certain. Its legacy is unlikely to be its consequences for global trade, but to further

contribute to such a dramatic reshaping of the planet by human activity.

[The Conversation]

U.S.: Vessel size raising pressure on ports

17/08/2015

The rise of alliances among shipping carriers and industry moves towards post-

Panamax and ultra large cargo ships are pressuring many US ports to address

access restrictions, according to ratings specialist Fitch.

The widening of the Panama Canal, slated to open in 2016, will further intensify the need to

accommodate larger ships. Some regional ports that serve secondary markets and are

unable to process larger vessels risk losing some services or being skipped completely, Fitch

Ratings says.

The combined impact of the shift to larger vessels and carrier alliances is giving shippers

significant negotiating leverage over ports.

Carriers are seeking economies of scale through higher utilisation of each vessel, which can

result in fewer vessel calls overall. Furthermore, larger vessels can limit an individual

carrier's reliance on any particular port or terminal. This has led to a reduction in the

number of ports called on each voyage, raising pressure on ports to improve terminal

capability and productivity.

Some ports which already have adequate water depth are investing to improve the

efficiency of existing terminal facilities, seeking to maintain or improve their positions by




increasing their share of first call services. Trends towards consolidating services could leave

smaller regional ports at risk of losing some services or skipped completely by carriers.

Recent challenges seen at the Port of Portland are an example of how quickly the pressure

on ports has risen. A project to deepen the 110-mile Columbia River deep-draft navigation

channel from 40 feet to 43 feet was completed in 2010, but was insufficient to

accommodate larger ships needing a 50-foot clearance. Subsequent labour disagreements

further interrupted service at the port for long enough for carriers to halt container services,

transferring cargo to other ports.

Seven US ports (Los Angeles, Long Beach, Seattle, Tacoma, Oakland, Norfolk, and

Baltimore) have been able to handle post-Panamax ships. Due to projects to deepen

channels and remove air draught restrictions, they will soon be joined by Miami, New

York/New Jersey, and Houston. Most improvements by these ports and others (Jacksonville,

Savannah, Charleston) will bring water depth to the 50-foot range, allowing access for the

larger vessels favoured by alliances. However, choosing to upgrade infrastructure may be a

difficult management decision for some ports, as capital costs are likely to require borrowing

while returns from potential new services remain questionable for all but top tier ports.

The impact of changes in depth and other terminal improvements must be considered

together with the relative importance of the port as a gateway to its region. As shippers

seek consolidated service, a port with adequate infrastructure may still fall victim to

competitive pressure should its market be one that can be efficiently served from a

neighbouring port.

Some ports may be able to avoid competitive disadvantages by engaging in regional

partnerships. The Ports of LA and Long Beach have long participated in joint marketing to

highlight the attractiveness of the overall San Pedro Bay gateway.

The Northwest Seaport Alliance between the Port of Seattle and Port of Tacoma, which has

its "soft start" this month, will go even further. The Seaport Alliance will be formed as a Port

Development Authority (PDA) -- a jointly owned, governmental entity, but with each port

retaining its existing governance structure, ownership of existing assets under Seaport

Alliance management, and obligation to repay debt to its bondholders. The Seaport Alliance

seeks to unify management and operation of both marine ports' cargo to improve the

Seattle-Tacoma gateway's competitive position in the container industry, avoiding

duplicative capital investments, and harmful pricing dynamics.

Regional cooperation between ports in close proximity (including the Ports of Savannah and

Charleston and Port of Fort Lauderdale and Port Miami) is potentially beneficial. However,

there are likely many political and operational hurdles to pursuing such cooperation.

Ports with the right combination of location and infrastructure are best positioned to benefit

from volume and revenue growth going forward. Ports with modern infrastructure but not

located in geographically attractive areas could fall behind during these transitions, perhaps




just as much as ports with inadequate water depth and landside infrastructure. Any port

that loses market share as alliances shift cargoes may find it difficult to recover quickly,

given the longer term nature of contracts between ports and shipping lines. However,

smaller and mid-sized ports play an important role in specialised markets. Ports that serve

local import/export demand or service specialised industrial centres are less exposed to

competitive pressures since their volume drivers are not linked to fungible discretionary

volumes.

[FitchRatings / Port Technology International]

Portugal: Port of Setúbal launches new development projects

17/08/2015

The Portuguese Port of Setúbal is soliciting expressions of interest in the

international market to develop one or two new port areas.

The first, in the central area of the port, located between the ro-ro terminal and the Sapec

terminal, offers the potential to develop 1900m on new quays in three phases, with a final

capacity for 1.5M TEU/year of shortsea and feeder traffic, on top of the existing port

capacity for 0.5M TEU.

The second, known as the "Blue Atlantic" project, envisages construction of 800m of new

quay between the Alstom Terminal and the Trem Naval, with the possibility of developing a

major new industrial and logistics park adjacent to SapecBay.

[WorldCargo News]

Ireland: Dublin Port borrows €100 million for upgrade

17/08/2015

The European Investment Bank (EIB) has agreed to provide a €100m loan to a

project that will upgrade Dublin Port.

The €230m plan is designed to increase the port’s ability to handle large ships. It will

deepen and lengthen 3km of its existing 7km of berths and also deepen the entrance

channel. Known as the Alexandra Basin Redevelopment Project, it is the largest single

infrastructure development project in the port’s long history and is expected to take five

years to complete.

The EIB is owned by the European Union member states. It aims to “provide finance and

expertise for sound and sustainable investment projects which contribute to furthering EU

policy objectives”. It lent a total of €77bn last year, generally financing a third of projects,

but it does provide 50pc in some cases.




Dublin Port Company CEO Eamonn O’Neill said last month that engineering design works for

the Alexandra Basin project were at an advanced stage. “We expect the first phase of works

to be tendered and a contractor ready to start by October 2015,” he said.

Trade volumes have risen, with 2015 set to be a record year. Figures show total throughput

up 5pc in the first half of the year, with imports growing 5.6pc as the Irish economy

improves.

The Alexandra Basin project is the first major scheme from the port’s masterplan for 2012 to

2040. The masterplan includes a new terminal for imported cars and a new €35m container

terminal. A redevelopment of the port’s road network is also included.

The port authorities also expect 2015 to be a record year for the cruise ship business. Nearly

100 cruise liner s will bring 200,000 visitors to Dublin this year.

[Independent]

Shore power to become most impactful tool in making ports

more energy efficient

17/08/2015

A new report by Navigant Research forecasts that shore power will become the

"most impactful tool in making ports more energy efficient."

The organisation attributes its projection to existing and growing regulatory requirements in

places such as the European Union (EU) and California, as well as the technology's

"enormous associated environmental improvements."

Navigant Research projects expected growth in the global market for shore power utility

electricity revenue in port operations of $302.7 million within the next decade, from $32.0

million in 2015 to $334.7 million in 2024.

"Shore power equipment suppliers are expected to see an increase in market opportunities

over the forecast period, particularly in these favourable regulatory environments and the

emerging markets in Asia Pacific," stated Navigant Research.

Navigant Research's report is said to examine the energy efficient port operations market,

focussing specifically on shore power and natural gas drayage trucks, as well as providing an

analysis of the drivers for energy-efficient technologies used in port operations. "Different

technologies and strategies are providing ports with the capability to drastically improve

energy efficiency and become more sustainable," explained Navigant Research.




"These include the use of shore power, upgrading or retrofitting cargo equipment to run on

electricity or natural gas, and incentive programs designed to encourage reduced and

cleaner fuel usage."

The report comes at a time of polarized opinion on the future of shore power, with some

ports continuing to spend millions of dollars on the technology as part of their emissions

reduction strategy, while other see it as expensive and ineffective.

In May, James Newsome, president and CEO of the South Carolina Ports Authority, said

shore power "has really been rendered as a last-generation solution at most major ports",

prompting several industry players to voice their support for the technology.

[Ship & Bunker News]

Canada: Port of Montreal to invest US$1.14 billion in

infrastructure

17/08/2015

The Port of Montreal is investing US$1.14 billion in infrastructure development

after receiving funding from the Government of Quebec, to turn the trade

gateway into a key cargo port for the eastern part of North America.

According to the development plan, $380 million will be used to improve marine

infrastructure, $60 million for modernisation of the road approaches to container terminals,

and $300 million for construction of two new logistics centres in the port area, reported

Maritime News online.

The port has three container terminals and is already implementing a project worth $135

million to build a new container terminal at Viau under public-private partnerships. The first

phase of the new terminal will be completed in 2016 and will raise capacity of the port for

transshipment of containerised cargo to 2.1 million TEU, up from the current 1.4 million

TEU.

During the first half of the year, the port handled 692,000 TEU, an increase of 4.8 per cent

against the previous year. The government of Quebec also intends to finance a programme

to develop short-sea shipping in the Great Lakes, which is big business for North American

trade.

[Hong Kong Shipping Gazette]




Oman: Phase 3 expansion of Salalah Port planned

17/08/2015

Three new container berths, new government berths, a dedicated cruise terminal, expanded

breakwater arms, and a new approach channel will be constructed as a part of the Phase 3

expansion of Port of Salalah, it has been reported.

Billed as the largest upgrade since the port came into operation in 1998, the Phase 3

expansion is expected to cost "several hundred million dollars to implement", Oman Daily

Observer said.

According to officials, the most significant component of the upgrade is the expansion of the

existing container terminal through the design and implementation of Quays 7, 8 and 9,

each of about 450 metres in length and 500 metres wide.

The berths, which add a further 1,350 metres of quay wall to the port's existing 2,500-

metre-long quay length, will be equipped with the backland infrastructure to support

modern, efficient container terminal operations.

The selected bidder will design and oversee the implementation of a roughly 3.7-kilometre-

long North Breakwater whose primarily function is to protect the existing and future berths

against long-wave energy responsible for moored vessel motion.

Various new structures and facilities have also been planned for design and implementation

as part of the Phase 3 expansion.

These include the construction of a 300-metre-long stub breakwater to be constructed

perpendicular to the North Breakwater to protect the government and cruise berths against

locally generated waves and other waves diffracting into the port from the harbour

entrance.

The consultancy services contract calls for the design of new berths for tugboats and pilot

boats, along with all other associated landside infrastructure, the report added. A marina for

small crafts will also be designed at a suitable site chosen on the basis of a study to be

carried out by the consultant.

[Construction Week Online]

South Africa: Green light for manganese terminal at Ngqura

17/08/2015

The issuing of a permanent operating licence to Transnet Ports Terminal to

operate the manganese terminal at the Port of Ngqura has been approved by

Cabinet.




The port is located on the east coast of South Africa, about 20km north east of Port

Elizabeth and midway between Durban and Cape Town.

In a statement on Thursday, the Government Communication and Information System

(GCIS) said the approval of the issuing of a permanent operating licence was in line with

government priorities relating to Operation Phakisa on growing the oceans economy. This

will result in relocating manganese operations from the ports of Port Elizabeth and Saldanha

to the Port of Ngqura.

This vast ocean space is relatively unexplored in terms of its economic potential. In 2010,

the ocean contributed approximately R54 billion to South Africa's gross domestic product

and accounted for approximately 316 000 jobs.

The ocean has a potential to contribute to the Gross Domestic Product up to R177 billion. It

also has a potential contribution of between 800 000 and one million direct jobs. Operation

Phakisa was first launched in Durban in July with a segment focusing on unlocking growth

and jobs in the country's ocean economy.

[SA News]

China: At least 114 dead after Tianjin Port explosions

17/08/2015

As of 17 August, a minimum of 114 people have died after the huge explosion

caused by a shipment of explosives in a warehouse for hazardous goods operated

by Ruihai Logistics, at the Chinese port of Tianjin, north of Beijing.

At least 70 people, mostly firefighters, are still missing while more than 720 people have

been taken to hospital and at least 6,000 people displaced according to state media.

The explosions at about 23:30 pm local time (17.30 UK time) last Wednesday (12 August),

sent massive fireballs into the sky and were powerful enough that the shockwaves knocked

people over several kilometres away, according to local media reports. Nearby buildings

were severely damaged, along with goods stored at the port, including rows of Volkswagen

cars that were completely burnt out.

The official Xinhua News agency said an initial explosion triggered other blasts nearby; the

National Earthquake Bureau reported two major blasts before midnight, the first with an

equivalent of three tonnes of TNT and the second with the equivalent of 21 tonnes.

At the time of the explosions the ground shook fiercely, shaking nearby buildings; many

people were injured from shattering windows. At the luxury Fifth Avenue apartment complex

about 2 km (1.2 miles) from the explosion site, the road was strewn with broken glass and

pieces of charred metal thrown from explosion; the building’s exterior was also scorched.




State broadcaster CCTV said six battalions of firefighters had brought the ensuing fire under

control, although last reports said it was still burning 36 hours after the explosions. Tianjin

Port remains partially open because the explosion was contained in just one section, but

movement in and out of the port has been slowed down by the explosion.

Port operations and shipment of the mining company BHP Billiton have been disrupted,

while the blasts have injured some workers of carmaker Toyota and agricultural machinery

maker John Deere. Toyota announced that it was halting production at its nearby factories

until 19 August, while John Deere announced that it was suspending work indefinitely.

Police confirmed that sodium cyanide, a highly toxic chemical, was found near the site of the

blasts causing Chinese authorities to order the evacuation of residents within a 3km radius

of the site.

A DP World spokesperson confirmed that the Dubai-based terminal operator’s facilities at

Tianjin Orient Container Terminal (TOCT), which is 15 km from the site of the warehouse

explosion, are safe and operational. However, she added: “Two DP World employees living

near the Tianjin explosion suffered minor injuries and have been taken to the Tanggu

Chinese Medicine Hospital where they were treated and discharged. The houses of 18 other

employees were damaged by the explosions and affected families have been transferred to

relatives’ houses within Tianjin.”

A PSA spokesperson said: “PSA’s JV terminals in Tianjin port remain fully operational.

Although our terminals are not sited within the immediate vicinity of the blast site, we have

been taking extra precautions with regards to operations and staff on the ground, working

closely with our partners, the Tianjin Port Group and the relevant government authorities”.

PSA has stakes in Tianjin Port Alliance International Container Terminal (TACT) and the

port’s largest terminal, Tianjin Port Pacific International Container Terminal (TPCT).

An APM Terminals spokesperson confirmed that operations at TACT, 5 km away from the

blast-site, was “unaffected”.

Tianjin achieved tenth position on CM’s World Top Container Ports 2015, having handled

more than 14m teu last year.

[Container Management]

China: Initial insurance losses from Tianjin Port explosions seen

at $1 billion - $1.5 billion

17/08/2015

Two explosions in the Chinese port of Tianjin last week that killed more than 100

people could generate total insurance losses of $1 billion to $1.5 billion, Credit

Suisse analysts said, citing initial estimates based on Chinese media reports.




Tianjin, the world’s third-largest port in terms of total cargo volume, was hit on Aug. 12 by

blasts that damaged a large industrial area and sent shockwaves across several kilometres.

Insurance companies including Zurich Insurance Group AG and Allianz SE said they had

received claims from clients that had been affected by the disaster but could not provide any

estimate of the potential losses. “Based on the available information, we do not anticipate

major financial claims to arise from this incident, but we continue to assess the situation,”

Allianz, Europe’s largest insurer, said in a statement. Chinese insurers are also expected to

be affected.

“It is still very early to determine the level of insured losses, but the event is likely to be

large with initial insured loss estimates of $1-$1.5 billion and a large number of insurance

companies affected,” analyst Arjan van Veen said on Monday in a note, in which he

compiled estimates from a range of Chinese media reports.

Credit Suisse said those affected would be mostly Chinese insurance companies as well as

international groups that either insure multi-nationals or provide re-insurance coverage.

As of Monday evening, global automakers had confirmed 4,950 cars were damaged in the

blast, with most saying the vehicles were insured but declining to provide additional details.

Volkswagen AG said that 2,700 of its imported vehicles had been damaged and were mostly

“unsellable,” according to a spokeswoman.

The number of cars damaged could climb above 10,000 when accounting for all the vehicles

in area as automakers struggle to assess the damage as authorities restrict access. Hyundai

Motor Co said that 4,000 of its cars were parked in the vicinity, but it couldn’t gain access to

confirm damages, while Renault’s China joint venture has only been able to confirm

damages to 1,500 of its 5,000 vehicles in the area.

Renault SA said the explosion would affect its deliveries in August and September. Ford

Motor Co, Nissan Motor Co Ltd, Toyota Motor Corp, Daimler and BMW AG each said their

vehicles were affected but they were still assessing damages.

Chinese media said several insurance companies received claims from companies hit by the

Tianjin explosions. “Transport insurers are looking at the damage to containers, warehouses

and new cars but also to the port’s infrastructure of trains, cranes and rail tracks,” Dieter

Berg, a marine expert at the world’s largest reinsurer, Munich Re, told Reuters. “In ports, we

have a massive concentration of high value (goods) which makes it hard for insurers to

make exact risk assessments.”

Tianjin’s port is China’s largest entry point for imported cars, handling roughly 40 percent of

cars imported in 2014, according to the official Xinhua news agency.

[Reuters]




North Africa: Finding Utica’s hidden harbor

17/08/2015

Archaeologists are honing in on the ancient Phoenician city’s long lost harbor.

A tile mosaic of fishermen from Utica. Photo by Nico Tondini/Robert Harding World Imagery/Corbis

In 1101 BCE, a group of Phoenician settlers stood atop a promontory on Tunisia’s north

shore, looking out to the site that would become one of their first African colonies. Down

below, the Mejerda River flowed into the Mediterranean Sea, carving a fertile valley fit for

farming wheat and raising cattle. But for this culture of sea traders and sailors, it was likely

the nearby natural harbor that made this the perfect place to set down roots. And so, the

city of Utica was founded.

Utica was one of the earliest colonies in the Western Mediterranean, and the harbor kept the

city connected—economically and culturally—to the rest of the ancient world. But the river,

the one that provided water for the fields and carried boats full of grain to far off markets,

also provided a constant flow of silt into the harbor. Over time, Utica’s harbor became

shallower and more difficult to navigate and in the fifth century CE, the once prosperous

port city was cut off from the sea.

Today, so much silt and sediment has built up at the mouth of the Mejerda that the remains

of ancient Utica now sit ten kilometers inland. And the location of the city’s harbor, now

filled in with earth, has remained a mystery—until now.

While conducting a geological survey of the land that was once the Tunisian shoreline, a

group of researchers discovered what they think is the exact location of Utica’s ancient

harbor. The researchers analyzed a series of sediment cores taken from across the area.

Looking at how the sediment in the cores changed over time allowed the researchers to




recreate the geological history of the shoreline and to see how the Mejerda River silt was

changing the depth of the harbor as well as the location of the coastline.

Columns and stone blocks stand in the ruins of ancient Utica. Photo by Roger Wood/Corbis

In the ancient world, Utica was the second most important city in North Africa, trailing only

Carthage. For the past 100 years, the city’s ruins have been of intense interest to

archaeologists.

Throughout its long history, Utica sided with, at times, both the rising Roman Republic and

the Carthaginians in a series of wars for supremacy over the Mediterranean. From 149 to

146 BCE, Utica sided with Rome in a war that ended with the Roman army razing Carthage.

In the post-war period, Rome made Utica the capital of their new province of Africa.

Nearly 100 years later, Utica became embroiled in the Roman civil war. The city became a

base for some of the legions opposed to Julius Caesar. In 46 BCE, the Utican opposition

suffered a decisive defeat at the battle of Thapsus. One of Caesar’s opponents, the

respected political leader and philosopher Cato the Younger, committed suicide in Utica

rather than live under Caesar’s rule.




Despite the political turmoil, Utica continued to prosper for another 500 years or so, growing

to a peak population of 15,000 to 30,000. Yet all through its history, the delta of the

Mejerda River was expanding out to sea, filling the harbor with silt. As the new geological

research shows, by the middle of the sixth century CE a peat bog had developed on the

northern side of the promontory atop which the settlers had once stood—a murky, thick

landscape that cut the city off from its harbor. Eventually, the harbor became impassable

and the city’s fate was sealed.

“The harbor was a vital lifeline,” says Elizabeth Fentress, an archaeologist who worked on

the project. “Its final silting up in the late-Roman period caused the abandonment of the

town.”

The new geological research shows the location of the harbor—on the northwest side of the

city—but doesn’t provide much other new information. But that should change now that

archaeologists know where to look.

“Knowledge of the port system [will be] fundamental to determining the nature of the city

during the Phoenician and Roman civilizations,” says geologist Hugo Delile. The team has

finished their planned excavations, but they will continue to explore the harbor by taking

more sediment cores in the hope that they will be able to find out more about the harbor

that connected Utica to the world.

[Hakai Magazine]


port & shipping news 34/15

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