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Drewry joins the chorus warning against VLCC
overordering
( LL ) ORDERS for new very large crude carriers are rising in expectation of growing demand but risk putting the sector’s recovery at risk, according to Drewry Maritime Research.
Although the hypothesis is not new, it is another voice in the chorus calling for a halt to new orders.
According to Drewry, VLCC orders started picking up in 2013, when 26 units were ordered following the subdued contracting period of 2011-2012, during which just 21 VLCC orders were reported.
The trend gained momentum in the first quarter of 2014 with 15 VLCCs ordered, compared with only six vessels in the fourth quarter of 2013.
Drewry’s Tanker Forecaster editor Rajesh Verma explained: “Attractive yard prices, expectations of faster growth in demand for large crude carriers, amid rising trade on long-haul routes, and growing interest from private equity firms in the tanker market resulted in increased ordering in 2013.”
He added: “The recent firming in freight rates in the period market also added fuel to the fire.”
As previously reported by Lloyd’s List, demand on long-haul routes is increasing with changing trade patterns in the oil market.
The surge in US shale oil production and downstream expansions in Asia are resulting in higher crude oil exports from Latin America, the Caribbean and West Africa to Asian markets, says Drewry. By contrast, exports to the US are declining, adds the research firm.
However, trouble is brewing on the horizon.
“Tonnage utilisation in the VLCC market has not picked up sufficiently to accommodate any surge in ordering activity, putting the sector’s recovery at risk over the coming years,” warned Mr Verma.
“The recent slowdown in the Chinese economy is an additional concern for the VLCC market, as many refinery projects are being delayed or cancelled due to slowing oil demand growth in the country… So, owners need to be cautious.”
The list of new orders this year on Clarksons’ database shows owners including Navig8, Oceanbulk Maritime and DHT Holdings signing VLCC newbuilding contracts.
EXPORTS of the chemical paraxylene from northeast Asia to China are contributing to the rapid growth of the intra-Asia coastal trade, but they are seriously undermining long-haul seaborne trade, according to Drewry Maritime Research.
China’s consumption of paraxylene is becoming a key driver of global chemical shipping demand, according to Drewry in a recently published report.
Highlighting this, China’s annual import requirements of paraxylene tripled from 2.9m tonnes in 2007 to 9m tonnes in 2013, representing 21% annual growth over this period, says the report.
Paraxylene is used as a basic raw material in the manufacture of polyester, according to Chevron Phillips, one of the largest marketers of paraxylene in the world.
The proportion of China’s total paraxylene imports sourced from northeast Asia, particularly South Korea, Japan and Taiwan, grew from 28% in 2009 to 73% in 2013, indicating that a large share of global seaborne paraxylene is now being traded within the coastal trade routes of northeast Asia, Drewry said.
“One of the key implications of intra-Asia trade is weakened import requirements from other exporting regions, undermining [long-haul] demand for chemical tankers,” said Drewry report editor San Naing.
South Korea, Japan and Taiwan are increasingly capturing paraxlyene export opportunities to China, undermining exports from other regions, particularly from the US and Middle East.
The paraxylene seaborne trade between China and the Middle East has weakened since 2011, says the report.
“China’s [paraxylene] sourcing decisions are crucial drivers of future seaborne trade demand,” said Mr Naing.
He added: “Northeast Asian producers enjoy competitive advantage over other producers in the Middle East and the US because of their proximity to China and lower freight costs.
“If China opts to raise imports from Asia, it will adversely affect long-haul seaborne trade with other exporting regions.
“With further [paraxylene] production capacity coming on stream in South Korea and Southeast Asia, this trend is set to continue.”
( LL ) ODFJELL, the Norwegian chemical tanker owner, has teamed up with private equity investors Breakwater Capital and Oak Hill Advisors to create a liquefied petroleum gas and ethylene shipping joint venture.
As part of the partnership, Oslo-listed Odfjell has exercised its option for construction of four 22,000 cu m LPG/ethylene gas carriers at Nantong Sinopacific shipyard, China.
The total newbuilding price is around $200m and the vessels are scheduled for delivery between September 2016 and June 2017.
Odfjell is not new to the LPG/ethylene segment – it owns and operates two 2008-built 9,000 cu m vessels, and has four 17,000 cu m vessels under construction at Nantong Sinopacific, scheduled for delivery between October 2015 and May 2016.
Breakwater Capital and Oak Hill Advisors have jointly agreed to invest around $50m for a 50% equity interest in Odfjell’s LPG/ethylene business. All of the partners in the venture have each agreed to commit around $50m to finance the growth of the project.
It is expected that completion of the joint venture will occur within the next three months.
The partners said the aim, through consolidation and partnerships with other first-class operators, is to build a leading LPG/ethylene shipping platform built on a modern and eco-friendly fleet and a long-term market perspective.
Odfjell chief executive Jan Hammer said the partnership will act together to “enhance our growth opportunities and broaden our capabilities”.
Odfjell ranks in Clarksons’ list of top owners as one of the world’s largest tanker companies with a fleet of around 90 ships.
The ethane and ethylene shipping market, still niche, is growing as countries such as the US produce byproducts from oil and gas.
TEN posts best results since early 2010
( LL ) TANKER owner Tsakos Energy Navigation has surged back to profits in the first quarter of 2014, adding to perceptions of returning health for the sector.
The Greece-based owner posted net income of $14.6m, compared with a slender $1m profit in the first quarter of 2013.
The company had slipped back into the red in the interim three quarters.
Hailing its best results since the first quarter of 2010, TEN reported a 31.5% increase in net revenues, which reached $91.3m.
The New York-listed owner attributed the sharp improvement partly to the contribution from two new shuttle tankers which joined the fleet early last year and have commenced serving a Petrobras charter.
It also hailed a “strong crude market” that allowed its 10 conventional suezmaxes all to generate positive results, several “at exceptional levels”.
Meanwhile the company’s aframaxes also achieved higher spot results, though the results from the product tanker fleet were “mixed”.
Overall TEN’s average daily time charter equivalent improved by 31% to $22,750 per vessel per day.
The company will pay a dividend of $0.05 per common share on May 22 and has also declared an additional dividend of $0.05 per share to be paid on August 14.
Chief executive Nikolas Tsakos ascribed the return to profitability to the company’s chartering strategy taking advantage a healthier market environment.
TEN’s profile made it “a partner of choice in the crude, product, LNG and shuttle tanker sectors and as a result allow us to look the future with both confidence and anticipation”, he said.
Including ships on order, TEN’s fleet stands at 60 vessels including 44 tankers in the crude space, 14 tankers carrying products and two LNG vessels.
How to be a tanker asset player
TANKER Investments, formed in January, is an interesting beast.
Teekay Tankers and Teekay Corp created the company to “opportunistically acquire, operate and sell modern secondhand tankers to benefit from an expected recovery in the current cyclical low of the tanker market”.
That sounds very much like a company almost purely focused on asset play if ever there was one.
TI will operate the tankers it buys, exposing itself to the vagaries of the freight markets, but it appears that buying and selling assets for capital gain is the company’s raison d’etre.
All tanker owners like a bit of asset play, turning their attentions to the various segments and the gains that can be made from selling assets in one particular segment that week, month, or year.
Former Maersk Tankers’ boss Hanne Sørensen told Lloyd’s List as much when she took up the job back in February 2012.
John Fredriksen is no stranger to asset play himself, as you’d expect, having sold each of his very large gas carriers in recent months for around $10m more than he bought them, in what can only be described as a masterful display of opportunistic asset play.
Or a lucky piece of business, depending on your point of view.
But the interesting point about TI is that it appears to have been set up purely for the purpose of asset play, if its mission statement is taken at face value.
It is a bold move, then, by Teekay to be so open about its motivation, when some see asset play as something done but not really talked about unguardedly — ships are for operating and carrying cargoes across the high seas, exposed to the fluctuations of the spot or time charter markets, not for being traded between avaricious owners as unloved hunks of metal.
TI has certainly entered the tanker market at an interesting time for asset prices.
In one of the latest episodes of McQuilling TV, McQuilling Services focuses on very large crude carriers.
McQuilling Services marine financial adviser Stefanos Kazantzis pointed out that newbuilding VLCCs cost $87m in October 2013 and five-year-old VLCCs cost $57m.
By April, newbuilding prices had climbed to $103m, a rise of about 20% from October 2013, he noted.
Five-year-old VLCC prices hit $65m in April, a 14% rise.
The bigger rise for VLCCs compared with five-year-old ships is what Mr Kazantzis called an “asset contango”.
A contango normally refers to a higher future price for a commodity than the current spot price.
In the case of VLCCs, newbuildings are the future and secondhand vessels represent the current asset environment.
Projections of recovery for VLCC earnings are, therefore, why newbuilding prices have risen more impressively than secondhand prices.
In the secondhand market, things are possibly starting to take a turn for the worse.
According to Arctic Securities, the prolonged weakness in earnings appears to have halted appreciating vessel values.
Analysts at Arctic say the 2010-built VLCC Synergy Queen is being marketed for sale, attracting bids of around $80m, while, according to brokers, the owners are asking closer to $85m.
“The spread suggests that there is quite some distance between owners’ expectations and what the market is currently willing to pay, indicating that accelerating prices have slowed down,” says Arctic.
This is the intriguing asset environment in which TI now finds itself.
With the expected completion of its new $200m revolving credit facility in late May, the company plans to keep acquiring vessels — presumably with a keen eye on selling them for a higher price once the shipping recovery is in full swing.
Which goes to show there is never a dull day in tanker shipping.
Chubu Electric buys stakes in LNG carriers from Mitsubishi, NYK and MOL
CHUBU Electric has bought 40% stakes in two 153,000 cu m liquefied natural gas carriers to ship LNG cargoes from Australia to Japan to meet its own requirements from the second half of this decade.
The Japanese utilities firm has purchased 10% of the first vessel from Mitsubishi Corp and 30% from Nippon Yusen Kaisha, and 10% of the second vessel from MC and 30% from Mitsui OSK Lines.
“We think it is important for us to charter vessels in long term and become owner of them in order to take advantages such as efficient shipping, share in the profits and so on,” Chubu Electric said.
Although the companies did not give detail about the price, the deals are believed to be based on prevalent newbuilding prices.
The transactions will be made after deliveries of the two vessels, which are to be under the management of NYK and MOL, respectively.
Chubu Electric had previously agreed to charter the two ships from Mitsubishi, NYK and MOL in 2012 to carry LNG from Australia to Japan for 15-20 years.
To meet the charter demand, Mitsubishi formed a 50-50 venture with NYK to book the first ship at Mitsubishi Heavy Industries, and established another with MOL to book the second at the same yard.
The first vessel, tied to a charter period of 15 years from 2017, is due for delivery in September. The second, tied to a 20-year charter period from 2019, is to be delivered in December.
Before the vessels start to carry cargoes for Chubu in the second half of this decade, the ventures are expected to lease them out on time charters.
To meet future requirements, Chubu has sealed a series of deals to lift LNG from Australia, including up to 1.4m tonnes per annum from Gorgon project in 2014-2038, 1m tonnes from Wheatstone in 2017-2037 and 490,000 tonnes per from Ichthys in 2017-2032.
The company has also secured 2.2m tonnes a year from Freeport in the US, for which it plans to charter five LNG carriers.
Chubu, which made net losses of ¥65.3bn ($642.9m) in its last fiscal year, raised ¥20bn earlier this month via sales of five-year bonds for purposes including equipment funding and debt repayments.
Report urges Western Australia to review its FLNG plans
WESTERN Australia, off which the world’s first floating liquefied natural gas unit will be deployed, is facing new calls to review this new technology amid fears that it will have a negative impact on the local economy and jobs.
A state parliament committee said in an inquiry report that FLNG units generate less income for Western Australia than onshore processing
“This inquiry has shown that the development of FLNG technology to process Australian petroleum resources represents a particular challenge to West Australia, due largely to the limited opportunities available to local content providers,” the report said.
It found that the planned FLNG projects are for exports only, despite the fact that many industrial plants in the state are interested in using natural gas a substitute for diesel.
Shell is building the world’s first FLNG unit at Samsung Heavy Industries, to be deployed in the Prelude field off Western Australia on delivery in 2015 or 2016.
However, the committee members are calling for a state gas reservation policy, keeping more gas for Western Australia.
“FLNG technology will not provide any gas into the domestic market. It is therefore essential that the Western Australian government reviews its policies to reflect the existence of FLNG technology and continues to play an active role in energy regulation in West Australia,” the report said.
Citing a figure from the Australian Manufacturing Workers’ Union, the committee member highlighted Woodside’s decision to use FLNG technology to develop the Browse field, instead of building onshore facilities in Kimberley, saying this could have cost 32,000 jobs.
Woodside’s amendment was made possible only after former resources and energy minister Gary Gray allowed the company to vary its Browse retention lease, a decision the committee described as “unilateral”, before going on to call for a federal inquiry.
The committee has urged the state government to renegotiate with Australian federal government over tax treatments regarding the development costs and valuation of FLNG units, among other related issues.
The Maritime Union of Australia has issued a statement to support the committee’s calls, saying the use of FLNG should benefit the people of Western Australia.
“I cannot believe we have a situation where millions of tonnes of gas worth billions of dollars will be processed off the West Australia coast with almost no benefit to workers in this country,” said MUA state secretary Chris Cain. “The West Australia government has a responsibility to ensure that the people of West Australia benefit from the development of our natural resources.”
The state of is the largest exporter, producer and consumer of natural gas in Australia, holding approximately 92% of Australia’s conventional gas resources off the northwestern coast.
With forecast lacklustre fundamentals for commercial vessels, many shipowners have shown interest in entering FLNG play.
Troubled times for Australian LNG projects
TROUBLES for floating liquefaction projects off Western Australia are the latest woes to have hit liquefied natural gas export projects in the country.
Most of the issues thus far have involved the onshore export plants.
Plants face delays due to cost overruns, which many fear could leave vessels, ordered in the expectation of new LNG supply from Australia coming onto the market within a certain timeframe, without employment.
Woodside, Australia’s main producer, has acknowledged the challenges it faces getting Australian LNG export projects off the ground, and the impact that could have on the shipping industry.
Last April, it called for greater support from the government to reduce cost pressures on new Australian projects.
Cost pressures forced Woodside to kill off its Browse LNG project in Western Australia and turn it into a floating liquefaction project.
The issues are pressing because Australia has long touted itself as being the world’s largest LNG producer and exporter by the end of the decade, taking the crown away from the Qataris.
However, Australia has competition for customers.
North America is pushing ahead with its export projects and east Africa could become a significant new supplier in the next decade, and Russia intends to supply gas to major Asian markets.
For Australia to instill more confidence in the market, it needs to reduce costs and increase productivity.
The Business Council of Australia has calculated that productivity on Australian resource projects is 30%-35% lower than comparable projects in the US.
Although the Australian LNG industry faces challenges, Woodside has had some notable successes.
The Pluto LNG project, for example, is delivering high numbers of cargoes to customers.
Australia needs more of these success stories to overcome the hurdles that FLNG projects have encountered in its waters.
( LL ) THE US container gateways of Los Angeles and Long Beach both enjoyed box volume growth of around 10% in April compared with last year as shopping patterns “returned to normal”.
Leading US box port Los Angeles reported April container volumes of 706,036 teu, which represents an increase of 10.3% on a year ago. Imports for the month were up 11.4% to 486,910 teu, while exports jumped 8% to reach 160,129 teu.
At neighbouring port Long Beach, box throughput in April increased by 9.7% compared with a year ago to 569,843 teu. Exports increased 6.3% year on year to 146,498 teu and imports increased 11.9% to 295,712 teu.
The improvement in Long Beach volumes follows a “weak first quarter”. Total throughput for the first four months was up “just” 1% compared with a year ago at 2m teu.
It blamed the performance up until April on poor weather conditions.
“Following a slow March due to the harsh winter in other parts of the country, April container volumes rebounded as weather patterns and shopping patterns returned to normal,” it said.
In contrast, Los Angeles’ volumes have increased by 8.2% year on year during the first four months to reach 2.6m teu.
In March, the port’s volumes surged by 34% compared with a year earlier, but it said this reflected Chinese new year factory closures occurring slightly earlier this year.
This year, Los Angeles introduced a cargo incentive scheme to encourage box lines to use its terminals.
A container shipping line earns $5 per teu for each incremental container it ships through the port during the calendar year.
The rate jumps to $15 per teu if a shipping line’s volume grows by more than 100,000 teu during the year.
( LL ) INVESTORS remain hungry for container terminal assets, and their appetite is growing.
So far in 2014, two box lines have re-joined the investment queue. Mediterranean Shipping Co announced plans to develop a container terminal at Belgian hub Antwerp, while CMA CGM took a 25% stake in a still-to-be-built greenfield box hub in Nigeria.
Non-industry players are also snapping up port share tranches. Canadian pension fund CPPIB Credit Investments acquired a 10% equity position in Ports America.
Canada’s Brookfield Asset Management formed a joint venture with APM Terminals in New York. Its affiliate, Brookfield Infrastructure, intends to prospect for Latin American terminal concessions in partnership with Japan’s Mitsui OSK Line.
This follows Brookfield Infrastructure’s purchase of an approximate 50% equity stake in TraPac, the MOL subsidiary with terminals in the US west coast hubs of Los Angeles and Oakland.
Shipping lines with terminal businesses have the industry knowledge and experience to select their targets. Non-industry investors — such as pension funds — will hire industry expertise, but they can now also employ analytical tools to help them reach a decision that will often stretch to hundreds of millions of dollars.
There is another important difference between industry and non-industry investors. Pension funds and their ilk are less likely to invest in greenfield sites, preferring stakes in established assets with a steady cash flow from day one.
But as mature port and terminal assets battle less on the quayside and more on logistics connectivity, the competitive landscape in overlapping hinterlands requires a new set of skills and analytics to decide which port has the best investment profile.
BMT Asia Pacific, the Hong Kong based arm of the UK maritime design, engineering and risk management consultancy, has launched its Port Choice Model and Port 360° tools.
BMT says the tools apply quantitative and qualitative methodology and measure “a spectrum of criteria, defined by leading economists and technical port experts”.
Port Choice Model forecasts market share, analysing trucking time and cost from factory to port, average waiting time in ports due to customs inspection and cargo handling, frequency of sailings, specifics on the terminal handling charges and ocean-freight costs differentials.
The Port 360° tool reviews the competitive strengths of ports, or terminals within the same port, and identifies areas for improvement for the target investment. It can be used in isolation when time or availability of data is limited or in conjunction with the Port Choice Model.
It analyses 12 criteria relating to four aspects of a port: demand based on cargo throughput, physical attributes, hinterland connectivity and management and operating systems.
BMT Asia-Pacific director and chief economist Simon Su says: “Some investors have asked for more concrete criteria to use as a benchmark, or for assessment tools that produce a more scientific result.”
Dr Su makes the point that Port Choice Model and Port 360°are not new but a reorganisation of proven tools used by BMT Asia-Pacific.
His colleague, senior consultant Steve Roberts, says that port investor clients are asking common questions: “We wanted a comprehensive way of answering them, so that is why we developed these frameworks.”
Mr Roberts continues: “Competition is intense now, with many ports having overlapping hinterlands. So market share is of particular interest, with investors wanting to know how a port can improve its market share or respond to threats to its market share.
“That was the evolution of our port choice model. We can give well researched, quantified answers to those questions.”
Hutchison Port Holdings vice chairman John Meredith has recently focused on the advantage of continuous linear quays to improve turnaround times for an increasingly complex range of container vessel sizes.
BMT AsiaPacific believes that linear berthing space is important, but not the be all or end all, and that productivity has to be seen as a combination of quayside and landside operations, viewed in terms of volume handled per hour or vessel turnaround times.
Dr Su says: “Long linear quays are sometimes less preferable if the port is handling transhipment cargo and has different vessels under operation at the same time. Linear or non-linear will not be the key issue.
“But the market trend is for bigger and bigger vessels, and if you don’t have a linear quay to handle super large vessels, then that is going to be a problem.”
So how does a port investor plug in to the BMT AsiaPacific system? Firstly, an investor makes contact, outlining its interest in an individual port or selection of competing ports in a particular geography. The consultancy then decides which ports to include in a comparative study for the client, based on the potential investor’s criteria.
For a gateway port, the study will look at neighbouring competitors where hinterland access is a key factor. In the case of a transhipment hub, the study will look at where shipping routes converge and vessel diversion sailing times, for example.
The tools can also be used to assess how investment in equipment and other aspects could change the competitive arena.
The data is bespoke and confidential for each commission. “We have not added a common data pool available for any potential client to look at,” says Dr Su.
While global terminal operators have in-house data, market knowledge and operational experience, financial investors normally do not own such a rich data pool and thus prefer to use specialist consultants.
“We have a top down and bottom up approach. For top down, we look at the industrial journals, magazines and publications,” adds Dr Su. “And then we undertake consultations with our chief stakeholders, including logistics service providers, government officials, shipping companies and cargo owners. All the key industry decision makers need to be interviewed.”
A port’s catchment area and a terminal’s connectivity to it are important items on an investor’s agenda when assessing the potential of an asset.
Mr Roberts says: “We are now in an era of competition between ports because of the overlapping hinterlands. In terms of competition, you are generally looking at mature markets, so places like Europe and Asia.”
However, the cost advantages of rail and road links — the latter more common in Asia — are not simple things to evaluate. Connectivity can be subject to varying external factors, which need to be researched in depth.
“Take trucking costs, one thing we found is that you have to be very careful when you research them. You might ask a trucking association or a trucking company about rates, and you might get a standard price,” Mr Roberts says.
“But, in reality, the price that shippers pay can be very different due to their relationship or their volume, so part of our diligence is asking the right questions, and asking them in the right way. We obtain real market rates rather than the advertised or standard rate.”
Dr Su adds that some cost elements will be localised. He cites Hong Kong container haulage and its competition with ports in China: “The ports share the same hinterland and cargoes, but once a truck gets into Hong Kong, the shipper has to pay a much higher trucking cost just because of this artificial border crossing created by government policy.
“Many Chinese truckers cannot get into Hong Kong because the customer has to use Hong Kong drivers who are more expensive, and thus the costs are much higher.
“So, to a certain extent, the cost items need to be looked at from a very local perspective. You have to look at these government policies or regulations so that you can adjust cost items.”
So, do these tools work for non-container terminals in the port sector?
Mr Roberts says: “The tools are applicable to any cargo but obviously containers are more contestable, while bulk ports tend to have dedicated hinterland links, so there is not so much competition.
“But theoretically, the tools can be applied to anything, multipurpose and break-bulk ports, it just happens that most of their application is in the container port sector.”
( Caution ) Floral sues EBC over ‘unpaid’ charter hire
( Tradewinds ) A lawsuit by the Odysea Carriers affiliate says the Cairo-based operator fixed the panamax Okialos in January but has not paid more than $700,000 in charter hire and bunkers
An affiliate of Odysea Carriers has fired a legal missile at Egyptian Bulk Carriers over allegations that the Cairo-based operator failed to pay up on a voyage charter for a panamax bulker.
Floral Shipping, the owner of the Greek outfit’s 69,149-dwt Okialos (built 1994), has sued the Egyptian operator in a federal court in New Orleans that asserts $1.26m in damages, plus interest and other costs.
The lawsuit has already secured an order from District Judge Eldon Fallon approving the seizure of Egyptian Bulk’s assets.
Odysea is targeting freight payments owed to US charterer Cargill, to be paid through Southport Agencies, in connection with the 75,725-dwt bulker CF Crystal (built 2011), which was anchored in the Mississippi River at the time of writing, according to vessel tracking data.
Floral’s lawyer, Daniel Tadros of Chaffe McCall, says in court papers that, in January, the company chartered the Okialos to Egyptian Bulk for a journey between Western Canada and Umm Qasr, Iraq. The rate was set at $10,400 per day and Egyptian Bulk was obligated to pay for bunkers and other costs.
The deal was brokered by Greece’s Triton Shipbroking, which earned a 3.75% address commission.
Since the ship took on a load of wheat at Prince Rupert, British Columbia, Egyptian Bulk has not paid for nearly $305,000 in charter hire and $454,000 in bunkers, according to the lawsuit. Plus, Floral believes it will suffer additional damages of about $500,000 over the remaining length of the charter.
The Okialos is one of four bulkers in the fleet of Athens-based Odysea.
Egyptian Bulk could not be immediately reached for comment and the company has yet to file an official response to the lawsuit.
TRANSPORT and logistics insurance provider TT Club has announced a $12m surplus for the full year 2013, AM Best awarding it an A- (excellent) rating for the eighth consecutive year.
Gross written premiums at the mutual came in at $186.3m, with total assets of $641.4m and a combined ratio of 87.4%. The number of claims handled continued to decline and premium levels remain as expected at the start of the year, it added.
Chairman Knud Pontoppidan said: “A pivotal contributing factor to this positive picture is the work that we have carried out to restructure our business in order to better match the overall premium income to the TT Club.
“Cost management has been a focus area for the TT Club and this approach will continue in the current year to maintain member premiums at the lowest sustainable levels.”
Established in 1968, the TT Club’s membership comprises ship operators, ports and terminals, road, rail and airfreight operators, logistics companies and container lessors. It is managed by Thomas Miller.
THE Strike Club has decided in principle to transfer European business now conducted by its Shipowners’ Mutual Strike Insurance Association Europe affiliate to a new UK mutual, as a result of European Union regulatory measures.
The statement announcing the decision, which was taken after a recent board meeting in Hong Kong, did not explain why the mutually owned delay insurer feels the change necessary and no one was immediately available at the club to clarify the matter.
The statement did specify that the move responds to the Solvency II directive, which takes effect at the start of 2016.
Solvency II broadly does for insurance what Basel II does for banks, increasing the amount of capital insurance companies must hold by way of a safety net against insolvency.
The package is unpopular with some insurers, who resent the required increase in capital costs and what they regard as micromanagement of liabilities.
A final decision will be taken in due course so that detailed proposals can be put to members, the statement added.
Port Hedland, Australia: Threat of tugboat strike looms
Tugboat workers at Port Hedland have voted in favour of the option of staging 24 hour, 28 hour and seven-day strikes in support of their demands for improved work conditions.
The strikes are not certain, but the permission gained this week is only valid for only 30 days.
The threat of strikes on the Port Hedland tugboats is not confined to the deckhands, with two other classes of tugboat workers - engineers and masters - also inching towards strike action.
Unions in Australia must give three days' notice before they undertake any strike action. So far, this notice has not been served.
Port Hedland, Australia : Closure of BPHB berths
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In order to allow the replacement of ship loaders, the BHPB Nelson Point A & B berths at Port Hedland will be shut down, as follows:
-Nelson Point B berth - closed to all shipping from 24 May to 12 August.
-Nelson Point A Berth - closed to all shipping from 12 August to 30 November.
All other berths will remain operational during these periods.
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