World Maritime News
16 May 2019
- Final decisions and new beginnings for IMO at MEPC 74
The IMO Environment Protection Committee (MEPC) meets in London from May 13 to May 17 with its priority being the short-term measures it can take to reduce the sector’s GHG emissions. It is questionable how far discussions on any of measures for speed reduction will go. MEPC 74 will show to what extent regulators are able to balance the need for action to deliver the initial strategy’s targets with their obligation to honor their political commitments, especially to the more vulnerable countries.
The energy efficiency design index was once one of the most controversial issues the MEPC had to tackle. The key areas of disagreement were mostly around the requirements for ships such as LNG carriers, and cruise ships without traditional propulsion, as well as smaller container ships. This time, however, the MEPC will have no alternative but to make a decision or fail to kick off the third phase on time. The 0.5% sulphur cap comes into effect on January 1, 2020. But a few outstanding issues remain such as finalizing the guidance for the implementation of the cap and advising on what should happen if a scrubber breaks down in the middle of the voyage and a vessel only has high-sulphur fuel oil on board.
The IMO would be confronted with the question of open-loop scrubbers.
- US-China moves on tariffs concern owners and financiers
China will increase tariff rates on USD 60 billion worth of US goods starting June 1, the country’s Ministry of Finance has announced. In a widely expected retaliatory move, it means nearly 2,500 US products will see their duty rate increase to 25%, with more than 1,000 rising to 20% from either 10% or 5% previously. It comes after the US raised tariff rates on USD 200 billion of Chinese goods from 10% to 25% with effect from May 10.
Bill Guo, executive director of ICBC Financial Leasing, argued the trade war was increasing uncertainties in the market. That would encourage lessors to do more in the way of financial leasing instead of operating leasing as in an operating lease, a lessor normally bears the risk of the vessel residual value.
Xu Tinghui, deputy director of the shipping business management planning office at China Merchants Group, said a trade war between the world’s two largest economies would inevitably be felt by his industry, while container shipping would likely notice its effects the most.
- Port of Los Angeles moves to counter maritime cyber crime
The Port of Los Angeles has met a maritime stakeholder group to discuss closer co-operation against cyber security threats through the establishment of a cyber resilience center. The stakeholder group includes shipping lines, marine terminal operators, railroad companies, labor and representatives from trucking industry.
Officials said the proposed center would be a collaborative effort to share cyber threat information across a multitude of companies within the port complex to help firms prepare against myriad cyber risks that could impact the cargo supply chain system.
Tom Gazsi, the port’s deputy executive director and chief of public safety and emergency management, said “Ports are a key part of a complex system that must address cyber risks. Over the pas few years, we have seen how cyber incidents have impacted some ports across the world, threatening the operations of the entire maritime supply chain. That’s why we’re taking a collaborative approach to strengthen our cyber security posture.”
- Huawei makes inroads in smart ports
Huawei, the Chinese telecommunications giant, has smelled opportunity in port digitalization and is making determined efforts to expand its footprints in the space.
The Shenzhen-based multinational company, a leading player in 5G technologies, established a port business development division at the end of 2016, and has since then worked with a number of ports in China to digitalize their business and help them become smarter.
In Guangzhou, Huawei is making a “smart plan” for the local port, with projects that include developing a backbone computer network, cloud computing and data center. Its telecom and data technologies are also being used in other major Chinese ports, such as Shanghai, Ningbo, Shenzhen and Qingdao.” The technologies merely facilitate the digital transformation.
There should be a port ecosystem, which is “convenient, safe, intelligent, open and shared”
- Tanker ‘sabotage’ off UAE puts shipping on alert
Vessels transiting the Strait of Hormuz are keeping security levels under review after four tankers were subject to unspecified “acts of sabotage” off one of the world’s biggest bunkering hubs of Fujairah on May 12. While details of the apparent attacks remain opaque, the incident has already heightened fears that shipping lanes in the Gulf could once again become a flashpoint as tensions escalate between the US and Iran.
Intertanko confirmed the organization sent an email to its membership warning of increased shipping risk in the region, stating there were photos of two ships with holes in their sides “due to the impact of a weapon”.
Tensions between Iran, the US and its Middle East allies in Saudi Arabia and the UAE have heightened since May 2, when US sanction waivers on Iran crude oil exports ended. No Iranian crude shipments have loaded since then, vessel tracking shows.
- Qatar seeks to build 100 LNG carriers
Qatar Petroleum has issued a shipbuilding tender for as many as 100 new LNG carrier new buildings through to the next decade. The tender is expected to “initially deliver 60 LNG carriers in support of the planned production expansion, with a potential to exceed 100 new LNG carriers over the next decade”, a statement issued by Qatar Petroleum said.
The new building orders will cater for the LNG shipping needs of this new project and Ocean LNG. Ocean LNG, a 70:30 joint venture between Qatar Petroleum and Exxon Mobil, has committed to purchase LNG from the Golden Pass LNG project in the US.
- How much of Europe does China own?
It is widely believed to have been prompted by concerns over China’s economic ambitions in Europe. It will allow the European Commission to give an opinion when an investment “threatens the security or public order” of more than one-member state or undermines an EU-wide project such as the Galileo satellite project.
In March, the Europe Commission called China a “systemic rival” and “strategic competitor”.
The Chinese Ambassador to the EU urged the bloc to remain “open and welcome” to Chinese investment, and not to “discriminate”.
China’s ownership of EU businesses is relatively small, but has grown quickly over the past decade. A third of the bloc’s total assets are now in the hands of foreign-owned, non-EU companies, according to a report from the European Commission in March.
Of these, 9.5% of companies had their ownership based in China, Hong Kong or Macau, up from 2.4% in 2007.
A large proportion of Chinese direct investment, both state and private, is concentrated in the major economies, such as the UK, France and Germany. Analysis by Bloomberg last year said that China now owned, or had a stake in, four airports, six maritime ports and 13 professional football teams in Europe.
In March, Italy was the first major European economy to sign up to China’s new Silk Road program know as the Belt and Road Initiative. It involves huge infrastructure building to increase trade between China and markets in Asia and Europe. For example, China is financing the expansion of the port of Piraeus in Greece and is building roads and railways in Serbia, Montenegro, Bosnia-Herzegovina and North Macedonia. This could prove attractive to poorer Balkan and southern Europe countries, especially as demands for transparency and good governance can make EU funding appear less attractive. However, analysists point out that Chinese loans come with conditions – such as the involvement of Chinese companies – and also risk burdening these countries with large amount of debt. The US administration is taking tougher line towards China’s economic activities. Governments elsewhere are more cautions – particularly when it comes to investment in sensitive areas of the economy, such as telecommunications and defense. But there is little doubt China is now a significant player in Europe, whether through direct investments or via the BRI.
- WEF offers logistics industry-created blockchain ‘toolkit’
On May 1, The World Economic Forum (WEF) pulled together more than 100 supply chain organizations and experts – including world’s largest ocean carrier, a host of global ports, and a handful of shippers- to build what it calls a ‘toolkit’ to help companies manage the complexities of deploying blockchain technology.
The toolkit, which WEF project lead Nadia Hewett referred to as a living document, is intended to help supply chain stakeholders that feel overwhelmed by the proliferation of blockchain-based solutions coming to market. Blockchain, also known as distributed ledger technology, is a heavily encrypted and decentralized data base designed to provide greater levels of data trust.
- US moves closer to teenage trucker pilot
US regulators asking for comments on whether 18-year-olds should be allowed to drive tractor-trailers in interstate commerce should expect their inboxes to overflow. The prospect of 18 to 20-year-olds driving 80,000-pound (36.3 ton) combination vehicles across state borders, even in a limited pilot project, attracts intense opposition as well as argent supporters.
The current age limit is seen as an obstacle to drawing younger adults without college degrees to careers in trucking before they take other jobs after high school. However, under federal law, those teenagers and 20-year-olds can drive heavy trucks in interstate commerce.
- India’s private ports gain ground on public rivals
The pace of growth in cargo movement via India’s minor privately owned ports, armed with more modern infrastructure and unregulated tariffs, has been on the upswing in recent months, after signs of a slowing trend in the past year.
India has 12 publicly-owned ports and about 200 minor ports dotting its 7,400km of coastline.
Unlike terminals at major public ports, privately-built independent ports are free from complicated bureaucratic controls associated with pricing and investment.
Much of the minor ports’ growth has come from Adani Group-owned cargo terminal at Mundra, Hazira, Dahej, Kandla, Dhamra, Mormugao, Visakhpatnam and Kattupalli.