The views of the Publishers do not necessarily correspond to the views of Lambos Maritime Overseas Ltd. Republished by kind permission of: A&A Thorpe, 131a Furtherwick Canvey Island, Essex SS8 7AT Tel: +44 (0) 1268 511300 Fax: +44 (0) 1268 510467 shipaat@aol.com Beleaguered ship owners received no let-up this week as shipping accountants and consultancy firm Moore Stephens published figures showing likely rising trends in ship operating costs this year and next. Costs have continued to climb across the board through the course of 2011, according to Moore Stephens, and are likely to register an average 3.8% hike for all main ship types by the year end. This figure compares with 2.2% in 2010. Costs are likely to continue rising through 2012, the survey predicts, with a similar increase of 3.7% expected over the year. Moore Stephens received responses from no fewer than 351 respondents, mostly in Europe and Asia. Owners and managers represented the single largest contact group – 71% in total and 39% and 32% respectively – whilst charterers/operators, brokers and professional advisors also responded to the survey. Repairs and maintenance are likely to have risen by an average of 2.8% in 2011, according to the respondents, and are projected to climb by a further 2.6% over the next year. Drydocking costs, meanwhile, will probably have risen by an average of 2.4% this year and are likely to rise by a similar amount over 2012. Large increases of 3.1% in crew wages in each of 2011 and 2012 bear out the tight demand supply balance of seafarers while a 3.6% hike in lube oil costs and a further 3.1% next year reflect continuing high oil prices. A number of respondents to the survey were gloomy about shipping’s general outlook. They were concerned about overtonnaging and weak rates in the freight and charter markets. “Overcapacity and new building deliveries involving larger tonnage on the main routes will maintain downward pressure on rates,” commented one, whilst another noted that there was “no sign of resolving the overtonnaging problems in the dry bulk sector.” These pressures and “depressed charter rates will lead owners to seek in vain to minimise operating costs,” another commented. Moore Stephens’ shipping partner Richard Greiner...
Read MoreThe views of the Publishers do not necessarily correspond to the views of Lambos Maritime Overseas Ltd. Republished by kind permission of: A&A Thorpe, 131a Furtherwick Canvey Island, Essex SS8 7AT Tel: +44 (0) 1268 511300 Fax: +44 (0) 1268 510467 shipaat@aol.com It is a strange feature of international shipping that its fortunes can be transformed, virtually overnight, by exterior factors such as geopolitical events and natural disasters. The closure of Suez, for example, proved a catalyst in the rapid development of VLCC trades round the Cape, whilst Iranian sanctions continue to keep one of the world’s largest sources of natural gas closed to most of the world. So far this year, we have seen the dire effects of floods in various regions, as well as a changing emphasis in Asian energy shipments as a result of the Fukushima disaster. Now, as 2012 draws close, some are questioning the likely repercussions of the deepening debt crisis in Europe. It is banks in this region which are the principal lenders to much of the shipping industry. Sure, Chinese financial institutions are grabbing a bigger slice of the ship finance pie, but usually only when there is a Chinese connection in one way or another. There are prominent lenders in Japan too, and in Singapore and the US. But it is Europe’s banks who still feature as the single largest lending group. A number of European financial institutions have recently indicated, some more publicly than others, that they plan to reduce their exposure to shipping. Banks’ credit committees get spooked by asset values which shoot up and down too much and can be directly influenced by uncontrollable events. And, as asset values continue to crash, loan covenants fall into technical default and become a growing headache for so-called “risk managers” who have to deal with problem loans. The number of these is increasing across most shipping sectors. With a few small exceptions such as the LNG sector, and certain small niches in the bulk carrier and small tanker markets, there is widescale overtonnaging that has forced rates down below breakeven in some instances, causing ship values to crash and bank security packages to become virtually meaningless. Yet very few shipowners...
Read MoreThe views of the Publishers do not necessarily correspond to the views of Lambos Maritime Overseas Ltd. Republished by kind permission of: A&A Thorpe, 131a Furtherwick Canvey Island, Essex SS8 7AT Tel: +44 (0) 1268 511300 Fax: +44 (0) 1268 510467 shipaat@aol.com International accountant and shipping consultant Moore Stephens says total annual operating costs in the shipping industry increased by an average 2.2% in 2010. This compares with the 2.0% average fall in costs recorded for the previous year, which was the first time since 2002 that operating costs had fallen. All cost categories showed an overall increase this time, with the exception of stores and insurance – with the latter falling by 4.7% overall. The findings are set out in OpCost 2011, Moore Stephens’ unique ship operating costs benchmarking tool, which reveals that all individual categories of vessel covered by the research, with the exception of handy-size product tankers, experienced an increase in total operating costs in 2010, the financial year covered by the survey. Costs for the three main sectors covered – bulkers, tankers and container ships – were all up. The bulker index increased by 5 points (or 2.9%) on a year-on-year basis, while the tanker index witnessed a two index point (1.1%) rise. Meanwhile, the container ship index (with a 2002 base year, as opposed to 2000 for the other two vessel classes) was up three index points, or 1.9%. The corresponding figures in last year’s OpCost report showed falls in the bulker, tanker and container ship indexes of 1, 5 and 13 points respectively. There was a 3.2% overall increase in 2010 crew costs compared to the 2009 figure, which itself represented the most moderate increase for a number of years. In 2008, the report revealed a 21% increase in this category. Tankers overall experienced increases in crew costs of 2.7% on average, compared to 2.5% in 2009. For bulkers, meanwhile, the overall increase in crew costs was 4.0%, while for container ships it was 2.9%. For repairs and maintenance, there was an overall increase in costs of 4.5%, compared to the 11.3% decrease recorded for 2009. The biggest increase here was the 8.0% recorded in the container ship category. For bulkers the...
Read MoreThe global gas supply business may have suffered a double whammy since 2008 when demand evaporated and the world’s largest consumer, the US, turned to unconventional domestic supplies in the form or shale gas, rather than imports by sea. But energy analysts are now predicting a firmer future for gas, with the International Energy Agency’s recently released report, “Are we entering a Golden Age of Gas” suggesting that recent over-supply could disappear completely by 2015. According to industry statistics the rebound has already happened in large parts of the world. Global gas consumption in 2010 rose by 7.4% year-on-year whilst growth in the Asia-Pacific region broke through 12%, according to BP’s Statistical Review of World Energy. In a recently published report, energy analyst Infield notes the turn-round in gas fortunes, and predicts that the long-term growth trend has resumed and will continue, with global gas demand likely to reach 4,300bn m3 by 2025, giving gas a likely share in the world energy mix of close to one quarter. Meanwhile, the broadening of gas sources – and the advent of new technologies including fracking and offshore floating facilities – are likely to ensure that gas prices remain competitive for the foreseeable future, according to Infield. The analyst predicts that the link between oil and gas prices is likely to become harder to sustain in the medium term, with tighter fundamentals in the oil market likely to cause a wider de-coupling between oil and gas prices in the future. The Infield report also notes growing price variations between gas markets in the Atlantic and Pacific. In fact, this growing gap has meant that plans for various new US LNG import facilities have gone on hold, and a number of LNG carriers have been diverted from long-term US gas import trades to new short-term business, taking advantage of arbitrage opportunities between the US and Asian markets. Asian demand has, of course, been fuelled by the fall-out from Japan’s Fukushima accident. Nuclear power has provided about 30% of Japan’s energy mix in recent years, but this share is likely to fall as the country seeks to diversify its energy base. Meanwhile, the Fukishima disaster has had global repercussions – Germany, for example, is...
Read MoreSo far this year France’s Sobrena, Brest has repaired a total of ten LNG tankers. The main customers have been France’s Gaz Ocean, which has placed repair contracts with Sobrena for the 74,500 m3 GDF Suez Global Energy, and the 154,500 m3 Provalys, which is currently in the shipyard, Norway’s Hoegh LNG – the 147,200 m3 Arctic Lady and the 145,000 m3 GDF Suez Cape Anne, Norway’s BW Gas – the 145,700 m3 LNG Benue and the 141,000 m3 LNG River Niger and Algeria’s SNTM Hyproc – the 129,767 m3 Bachir Chihani and the 126,130 m3 Mourad Didouche. Also repaired this year has been STASCO’s 137,500 m3 LNG Bayelsa and K Line’s 140,000 m3 Arctic Voyager. Republished by kind permission of: A&A Thorpe, 131a Furtherwick Canvey Island, Essex SS8 7AT Tel: +44 (0) 1268 511300 Fax: +44 (0) 1268 510467 shipaat@aol.com The views of the Publishers do not necessarily correspond to the views of Lambos Maritime Services...
Read MoreThe views of the Publishers do not necessarily correspond to the views of Lambos Maritime Overseas Ltd. Republished by kind permission of: A&A Thorpe, 131a Furtherwick Canvey Island, Essex SS8 7AT Tel: +44 (0) 1268 511300 Fax: +44 (0) 1268 510467 shipaat@aol.com Norway’s OceanSaver has announced that its next generation advanced ballast water treatment system Mark II will reduce energy use by over 50% compared to its previous technology. OceanSaver’s on-going research and development initiatives have led to the introduction of the Mark II system, which features an optimised filtration step, not available at the time of the original system development. The improved filtration negates the need for cavitation and de-oxygenation of the ballast water through nitrogen super-saturation, resulting in an even more compact system. Nitrogen super-saturation remains an optional extra. It offers ship owners the potential for reduced vessel maintenance costs through the improved corrosion performance of ballast tanks and coatings and is particularly suited to newbuildings or high specification, specialist vessels. Historically the OceanSaver system has been suited to larger, more complex vessels. According to Tor Atle Eiken, Senior Vice President Sales & Marketing of OceanSaver, the new Mark II technology is an optimal solution for medium-sized vessels and retrofits where installation space is limited. “Only 1.6% of the ballast flow is required to produce the activated water used for disinfection. Mark II is an extremely reliable solution for all types of waters, whether salt, fresh, warm or cold, and is a perfect fit for medium-sized vessels ranging between 35,000 – 80,000 dwt,” he says. The retrofit market will be a strong focus area for OceanSaver. Without the need for extra piping found in the first generation unit due to the cavitation and nitrogen super-saturation steps, shipowners now have greater design flexibility and reduced capital expenses at installation time. “The Mark II system is extremely compact and flexible. Standard systems are available for flow rates from 2 x 500m3/h up to 2 x 3.000m3/h and customized systems unlimited in capacities,” says Eiken. Type approval for the new system is expected by the end of the third quarter of 2011, in time for the expected mandatory application of the IMO ballast water convention. OceanSaver is jointly owned...
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