Search Results for: BIMCO

  • News

The unwanted ship: Break it or lay it up?

To lay-up a vessel means to stop using it for a certain period. It will simply be anchored in appropriate waters or a berth for a few weeks or even a couple of years. The reasons for the lay-up might be to postpone over-capacity or to wait for a better scrap price before selling it. However, lay-up costs need to be taken into account, too.

For example, a six-month lay-up of a Capesize bulker in Malaysia’s Labuan costs between $1,000 and $2,000 per day— far less than the cost of operation which hovers around $7,000 a day, but an investment, because the longer the vessel is in lay-up the higher scrap steel or charter prices have to rise.

Scrapping a vessel means selling it to a ship-breaking yard where workers will cut it to pieces and recycle the steel and other metals, chemicals, and equipment. The owner will receive a price based on the total light displacement ton (LDT) of scrap metal the vessel contains; equipment is taken into account, too.

The market demand defines the LDT price, which is at its lowest in many years. Just recently buyers were offering $270/LDT (as of May 2016), a year ago Capesize bulkers could easily fetch $100/LDT more, and two years ago the figure was $200/LDT more.

Can higher LDT prices be expected? Well, the number of bulkers sold for scrapping is expected to rise throughout 2016 (according to Peter Sand, BIMCO)—this is strengthening the supply. Furthermore, in Asia demand for steel is currently low.

How to lay-up a ship?
Just as the lay-up time can vary, the treatment of vessels varies too, and so do obligations and requirements assigned by class, flag state and port authorities. In general, all responsible parties should be informed. For example, some insurance companies may accept a payment hiatus if the vessel is in lay-up for more than 30 days.

The operator must first decide on either a hot or a cold lay-up. In a hot lay-up condition the ship engines and machinery keep running so that the re-commissioning of the vessel can be carried out very quickly, allowing a cheap and easy vessel preservation. However, with long-term low charter rates in mind, many opt for a cold lay-up, which has lower operational and crew costs, and requires less consumables.

In a cold lay-up vessels are only supplied with emergency energy for lights, windlass/mooring winches and fire extinguishing—often by portable generators installed on deck. Depending on the length of lay-up, three weeks or more should be expected for re-commissioning. Should the lay-up be five years or longer then the re-commissioning time is unpredictable and can last months. The main concern here is protection against humidity, leakage of chemicals and condition of the hull (sea chest/sea water lines).

A dehumidifier has to be installed and connected to the engine room; other items to keep in mind are sea-water tanks, ballast tanks and bow thruster rooms.

Classes, Flag States and Port Authorities
Many classes and port authorities expect minimum manning levels during cold lay-ups to cover at least fire, leakage, mooring and security watch. However, the Safe Manning Certificate applies only to vessels in operation or while vessels are safely at anchor, within port limits or alongside. Requirements of flag states and port authorities apply to laid-up vessels. Flag states in general require notification of vessels laid-up for longer periods—the requirements vary from short notification to a detailed lay-up plan.

In addition, during the lay-up class surveys might take place. For example, DNVGL may carry out an annual lay-up survey (covering watertight integrity, bilge system, fire hazards and equipment in use). After lay-up a number of surveys have to be carried out and expired certificates need to be renewed. Some class authorities require a sea trial when the vessel has been laid up for 12 months or longer.

Green ship breaking?
It seems more environmentally friendly to take old ships out of service than to lay them up for later usage, especially as many were built in times when speed was more important than HFO efficiency.

Indeed, ship breaking can be environmental friendly; approximately 85% of a vessel can be recycled – even the furniture and carpets are sold at local markets in Bangladesh and India. However, the problem is that many shipyards do not handle hazardous chemicals as they should, and consequently the lives of workers are endangered. Rising public awareness has prompted the involvement of authorities leading to the Hong Kong Convention and EU Ship Recycling Regulation. Only time will tell whether these efforts will actually improve environmental and working conditions.

Some yards in China, Turkey and India/Bangladesh are already pre-approved and comply with the Hong Kong Convention and/or the EU Ship Recycling Regulation. However, green recycling often only happens on paper. In this respect the , “Ship Breaking Platform” should be considered, as it does not recognize any yard in India to be green and claims it to be a marketing coup.

Conversely some yards in Europe are recognized even by the NGO as environmentally friendly. For example, Fornaes in Denmark cooperates with the Ship Breaking Platform. Keld Kokholm, Manager of Fornaes, explains: “In general, the offered price per LDT is lower than that which non-environmentally friendly yards in Asia offer due to the expensive recycling of toxic substances and higher labor costs. Furthermore, we and some other European yards are sometimes limited by the size of vessel that we can handle. For example can we recycle ships up to 10,000 tonnes GT or 25 meters in width.” Fornaes therefore focuses on local offshore and fishing ships.

Other companies involved in green ship recycling like Grieg Green AS, can handle big vessels. Grieg Green approves yards based on a list of factors including the safety of workers and downstream waste management, all influenced by the HKC and EU regulation. Here, too, responsible acting results in a current price difference of $70 – $90 per LDT. As stated by Magnus Hammerstad, Area Manager of Grieg Green, this figure is volatile and is related to the local scrap steel price.

Why go green?
Companies which plan to maximize their profit will sell their vessel to a so called cash buyer (a ship broker) who in turn will beach it somewhere in Bangladesh, India or Pakistan. This way the original ship owners avoid regulations and legal trouble.
Recently Maersk opted to recycle the Maersk Wyoming and the Maersk Georgia in a ship-breaking yard in Alang, India which is not on the EU list of green ship breaking yards. Maersk stated that it expects to generate an additional $1 million to $2 million per ship by beaching there.

“Without a strict legal framework and financial mechanism, there are very few incentives for ship owners to choose clean and safe recycling,” said Patrizia Heidegger, Executive Director of the Ship Breaking Platform. “Currently, at the EU level we are debating a ship breaking license, and a financial incentive for clean and safe recycling.”

She pointed out that in addition to new regulations, an increasing number of cargo owners as well as ship financers are demanding ship-recycling policies from ship owners. In the future ship owners may lose both financers and clients if they continue to use substandard shipbreaking.

KLP, the largest Norwegian pension fund, published a report on the human rights and environmental risks related to the current practice of ship breaking.

KLP CEO Håvard Gulbrandsen, states in the report’s foreword: “We hope that the report can help raise awareness of the severe human and environmental risks beaching can entail for shipping industry companies, their customers, and also for other investors […]”.

  • News

The Course to Career Success

 An increasingly technical world – on board and ashore – and a growing mariner shortage have conspired to make maritime education and training more important than ever. The maritime world plays a significant role in moving the global economy and its goods, people and power. Educational institutions ensure those responsible for moving the world’s assets across the seven seas are well-qualified and prepared for their roles.

According to the latest BIMCO and ICS manpower report, the industry is facing a need for nearly 150,000 officers in the next decade and is already short 16,000 officers. The need to keep men and women sailing on their licenses for longer, and to recruit and train new officers, is growing steadily. In times of high demand, it is not unknown for the quality of a product to decrease. Yet that is an unconscionable risk for the maritime industry and its regulatory agencies. In fact, requirements to earn and upgrade a license are becoming more stringent, meaning that maritime educators must take additional steps to ensure the necessary requirements are met for all entering the fleet.

Additionally, vessels and operating procedures are becoming increasingly complicated; it is imperative that the men and women in charge of them and their cargo know what they are doing.

At SUNY Maritime College in New York City, the professional education and training department is responsible for giving professional mariners the continuing education they need to stay current and qualified under changing regulations. The program also trains students for limited tonnage licenses, playing an important role in the nation’s brownwater fleet.

For more than 100 years, SUNY Maritime has educated and trained merchant mariners, changing its curriculum, facilities and program offerings to align with the needs of the industry and U.S. Coast Guard requirements. Once again, the college is working to meet the growing mariner demand and to ensure that they succeed in their pursuit of Coast Guard mariner credentials.

The changes – among others – include offering additional courses to help licensed mariners maintain and update their skills as well as building facilities to train new mariners. The Manila amendments to the International Convention on Training, Certification and Watchkeeping standards, approved in 2010, go into effect at the end of the year. Safety is, and always will be, paramount to the maritime landscape, and the Manila amendments are designed to enhance crew safety at sea.

The amendments require, among other things, that all mariners take regular courses in basic training, renew their endorsements, and pass leadership courses to upgrade and maintain their credential.

No longer is experience at sea enough.

Basic training, which covers all the subjects most important to a vessel’s safety, still teaches basic firefighting, personal survival techniques, personal safety and social responsibility, and basic first aid. But now mariners will need to take the course, or a version of it, every five years in their professional careers.

After the end of the year, mariners entering the profession will take the original 40-hour course that has been taught for years and which introduces them to onboard safety operations. A 16-hour refresher course will be required for all who have not accrued 360 days of sea time in the past five years. An 8-hour course has been designed for mariners who have accrued the 360 days in a five-year period.

Nor is it enough anymore to earn lifeboatman, fast rescue boat or tankerman-PIC endorsements once and carry them for life. Once the Manila amendments go into effect, mariners must renew these qualifications to keep them.

These courses are being developed by a variety of players, including state maritime academies like SUNY Maritime.

Industry professionals, executives and thought-leaders have always prized safety over all else—safety of their crews, their vessels and, lastly, of their cargo. But tragedies like the sinking of the El Faro serve as an unfortunate reminder to all of us of how dangerous our industry can be and how necessary these skills are for the well-being of all who sail.

Safety practices and awareness are, of course, the most important thing that maritime educators impart to their students. This is a dangerous field and there are too many things that can go wrong.

But the Manila amendments have also recognized the increasing importance of a second set of skills related to teamwork and leadership, not only for those in leadership positions but for all officers onboard a vessel.

The essence of Coast Guard licensure training, at SUNY Maritime and elsewhere, is focused on developing mates and engineers who can work together and make decisions. The Coast Guard requires a regimented lifestyle and, though interpretations of that lifestyle vary, the focus is in developing an individual’s character and leadership skills so that the safety of the crew and vessel are paramount, rather than individual wants and needs.

But the regimental program at SUNY Maritime, in keeping with STCW standards, now includes leadership and teamworking training, while professional mariners can come to the campus to take the individual course. The course will focus on case studies, workload management, maritime conventions and regulations, and situational awareness to enhance decision making skills.

STCW standards also include training for those looking to advance into personnel management positions on both the deck and engine sides of vessel operations. More training has been added to ensure that officers can work together to, once again, ensure the vessel’s operations go as smoothly and safely as possible. The 35-hour course is required for all chief mates, masters, second engineers and chief engineers. It focuses on managing and training shipboard personnel, building situational awareness, and optimizing the use of engineering and bridge resources, among other things.

These requirements are the latest expansion of the necessary training for licensed mariners.

As the scope of training expands, so too have the resources and facilities at the academies which have grown and become more sophisticated. Ships and other vessels are increasingly technical and, though training ships and cadet commercial shipping assignments offer real-world experience onboard, it is unwise to allow a future mariner to sail without previous knowledge and virtual experience.

Simulation technology has become so advanced that cadets and mariners can gain experience with nearly any situation before ever stepping onboard. In a simulator, future mariners can practice standing watch anywhere in the world on a vessel powered by any form of fuel. As the global fleet changes from steam to diesel to, increasingly, natural gas in an effort to reduce pollution, these opportunities help professional mariners gain the experience they need to sail for a variety of companies and on a variety of vessels.

All of the maritime academies have expanded their simulation centers and systems in recent years. At SUNY Maritime, in the past year programs have built or expanded a tug and barge simulator and a full mission engine room simulator, which is enhanced with a 20 desktop station classroom to allow as many students to gain experience as possible.

These technologies, as complex as they are, can only produce data from which a student can learn. The equipment allows for—indeed it requires—a large amount of human interaction.

After all, the human element is by far the most important element of any vessel at any time and in any place. Interpreting the data onboard a simulator allows a professional mariner to correctly interpret the data coming from a vessel’s systems and act based on that data to ensure the safety of the vessel, cargo and crew.

Simulators and simulation systems are imperative for cadets and mariners to become familiar with the equipment onboard a vessel and that they will someday use and be responsible for. Simulation allows them to learn, within a controlled environment, what a navigational bridge or engine room is capable of and how to harness it to move a vessel safely from one port to another. Such training exercises allow students to make mistakes and learn from them without risking millions of dollars, environmental damage and lives.

Simulators at SUNY Maritime, as at the other academies, are nothing new. SUNY Maritime has several Class A bridge simulators, radar/ARPA ECDIS labs and a liquid-cargo handling simulator. As onboard technology and simulation programs become increasingly sophisticated, maintenance and software upgrades ensure that future mariners are getting the best experience possible and that which most closely mimics the world they will be sailing in after earning their Coast Guard licenses.

Partnerships with maritime companies help to ensure not only that new mariners are getting the appropriate training, but that current mariners can also return to maintain and upgrade their credentials. The ATB simulator at Maritime College has been supported and expanded through the generosity of Bouchard Transportation Company, Inc. The latest expansion includes two Class B stations to allow coordination between up to three tugs and a barge.

Mariners and cadets working in SUNY Maritime’s engine room simulator have the additional benefit of being able to train remotely through cloud technology. The simulator is no longer bound to the room in which it is confined, and trainees are able to spend additional time with the equipment. This capability, combined with digital textbooks, means that the possibilities for training and continuing education are endless.

These simulators and additional STCW courses help our nation’s mariners adapt to and thrive in an ever-changing industry. The same way that any other professional must adapt to the changes brought on by the information revolution and a changing world, so too must the mariner. Indeed, since the mariner travels the world and plays such a large role in the functioning of the global economy, the needs for continuing education and training are perhaps even more important than most other professions.

 

 

  • News

More panamax containerships head for demolition

JULY 1, 2016 — Does the opening of the Panama Canal to larger neopanamax vessels sound the death knell for the panamax containership? Copenhagen headquartered BIMCO, the world’s largest international shipping association,

Manpower report sees seafarer shortage ahead

MAY 17, 2016 — The latest five-year BIMCO/ICS Manpower Report forecasts a serious future shortage in the supply of seafarers. The report identifies a current shortfall of about 16,500 officers (2.1%), but

ICS gears up for next MEPC meeting

APRIL 13, 2016 — The International Chamber of Shipping (ICS) has made a number of submissions to IMO’s Marine Environment Committee (MEPC) ahead of its next meeting, which will be held in

Southeast Asia maritime crime rate soars

Dryad says that the apparent impunity of maritime gangs operating in the region has led it to call upon the three nations surrounding the Singapore Strait, in particular, to provide a permanent security presence to deter criminals and protect maritime trade.

The number of reported incidents in the region has jumped from 140 in the first nine-months of 2014 to 194 in the same period of 2015.

The main focus for criminal gangs in the region has been the petty theft of ships stores as gangs look to steal engine parts and high value machinery for resale on the black market.In total 14 vessels have been hijacked in Southeast Asia in 2015 to date, with only one product tanker, the MT Joaquim targeted for the purpose of cargo theft in the last quarter (Jul-Sep), when 3000 metric tonnes of fuel oil were stolen from the vessel.

Dryad Maritime analysts have identified the Singapore Strait as a key area for increased vigilance. Between January and September they recorded 90 instances of theft or attempted theft with more than 80% of these crimes occurring in the Traffic Separation Scheme (TSS) between Pulau Karimun Kecil and Pulau Besar during the hours of darkness.

The Malaysian Maritime Enforcement Agency (MMEA) and Indonesian authorities have made repeated announcements pledging to enhance patrol cooperation and coordination in the region, yet, according to Dryad analysts, there remains little by way of a regular presence in this particular area.

Dryad Maritime analysts warn that despite the slowdown in fuel siphoning incidents during the last three months, the final quarter of 2015 is likely to see a further increase in hijackings and petty theft.

Ian Millen, Dryad Maritime’s Chief Operating Officer, says:”In Southeast Asia, the final quarter of the last three years has seen the highest numbers of incidents per quarter and we see no reason why this will not remain the same this year; a year in which we’ve already seen the highest number of incidents in the first nine months. There is a pressing need for a joined-up security effort in the Singapore Strait and other areas. Without a high visual presence from security agencies, criminal gangs will continue to operate freely with little fear of capture or prosecution.”

Dryad contrasts the worrying increase in Southeast Asia maritime crime with the good news following BIMCO’s recent announcement on a planned reduction of the BMP 4 piracy High Risk Area (HRA).

Mike Edey, Dryad Maritime’s Head of Operations, says:”By complete contrast, the worrying figures in Southeast Asia come at a time when the combined efforts of the shipping industry, naval forces, armed guards and others have resulted in the first geographical reduction of the Indian Ocean High Risk Area (HRA). This is a testament to those who have taken a multi-faceted approach to containing the threat of Somali piracy and the first sign of a long-awaited period of de-escalation in the region. This will bring significant relief to the shipping industry who can, in some cases, transition to more cost-effective and dynamic methods of risk mitigation.”

You can access Dryad Maritime’s full Q3 analysis HERE

dryad graphic tall