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Survey shows shipowners still watching the purse strings

Though there were variations in different sizes and types of ships, industry wide all categories of expenditure were down on those for the previous 12-month period.

“This is the third successive year-on-year reduction in overall operating cost,” says Moore Stephens partner Richard Greiner. “This comes as something of a surprise, and is contrary to earlier forecasts. Shipping is clearly watching the pennies, and it may also be the case that more competitive pricing for goods and services has had a part to play in holding down expenditure. Beyond that, as always, the impact of exchange rate changes cannot be determined readily.

“By far the biggest reduction in operating costs, for example, was seen this time in the Stores category. This can be largely explained by the knock-on effect which the fall in oil prices has had on lube oil costs. Such ‘benefits’ do not come often to any industry, and are usually not without a downside, as has been the case in shipping.

“Crew costs were down, albeit marginally, for the first time in recent memory. This could be an indication of a higher level of idle tonnage during the period under review, but is nevertheless welcome news for an industry which has seen crew cost increases of more than 20% at their peak.

“Expenditure on repairs and maintenance was also marginally down on 2013, possibly attributable in part to weak steel prices and in part to the fact that poor freight rates arguably do not encourage owners and operators to engage in anything but the most essential repairs and maintenance. It is to be hoped that there is not a future price to be paid in this respect in terms of either safety or performance.

“The bill for insurance coverage was also down, which will come as little or no surprise in view of the high level of competition in the insurance market, which is arguably even fiercer than that in the shipping industry.

“A third successive annual fall in operating costs must be good news for an industry already facing serious financial challenges and preparing to meet still more. But a bigger-picture view provides an insight into just how much operating costs have increased in recent years. OpCost is now in its fifteenth year of publication. At year-end 2001, the average daily operating cost for a Panamax Bulk Carrier was $3,565. In 2014, it was $6,046. For a Handysize Product Tanker, the comparable figures were $4,164 and $7,931

.”The challenge for shipping is how to build the cost of operation into freight rates in a way which allows for a reasonable profit margin in an industry which is driven by competition and characterized by overtonnaging. Given that, over the next few years, annual seaborne trade is projected to grow at a reasonable rate, and that the cost of regulatory compliance is likely to increase significantly, one would expect operating costs to rise over the same period. Two things are certain. Firstly, the business of operating ships will remain a costly undertaking. Secondly, the impetus for higher freight rates will not come from the shipping industry’s customers.”

The 2015 edition of OpCost is available online. Running cost information is obtained on a confidential basis from clients of Moore Stephens, and from other shipowners and ship managers who submit data for inclusion. OpCost 2015 is available free to owners who submit their data for inclusion. Alternately, it can be purchased.

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Chinese crane ship completes repairs at Damen Dunkerque

The massive 3,000 tonne lift capacity mounted on the stern and the ship’s unconventional hull form meant that the shipyard had to make special dock bed arrangements to accommodate her.

A total of 225 blocks were required, along with an additional 56 steel pillars of up to 7 m in length to support the stern. Wooden wedges also had to be added to the lateral blocks to take account of the unusual hull shape and to ensure complete stability in the dry dock.

The scope of work over the 10 day period included, along with the standard work for class survey, blasting and painting the hull and the overhauling of the internal and overboard valves. The scope of the electrical works was extensive given the tight time frame, with a large number of motors removed and transported back to the workshop for overhaul before being returned and refitted. The last ones were fitted and tested on the same day of the vessel’s departure.

Wei Li Crane2The starboard propeller blades were also rebuilt. This required re-welding tips onto each of the blades followed by a full polish for both propellers.

Six generator coolers were removed for overhauling, as were their bearings, and some major repairs were made to the accommodations.

Cooperation with the project team from owner Shanghai Salvage was excellent; thanks in part to the assistance of a local Chinese national attending a nearby university who helped smooth the language differences.

“Ensuring that the Wei Li was properly supported in the dry dock was a complex project in itself,” commented Khalil Benjelloul, head of marketing and sales at Damen Shiprepair Dunkerque. “With all the blocks and pillars, plus the positions of the vessel’s thrusters, it was not easy to position her in the centerline of the dock. Once all this was accomplished, however, the work proceeded smoothly and after 10 days of hard work around the clock she was on her way again. It was a pleasure to work with Shanghai Salvage and its representatives.”

The Wei-Li was delivered by shipbuilder Zhenhua Heavy Industries in 2010 and this summer was involved in the installation of the 11,000 tonne jacket for the Ivar Aasen project in the Norwegian sector of the North Sea.

 

Jobs ax swings at Newport News Shipbuilding

“There’s no good way to do this,” the Virginian-Pilot reports Newport News Shipbuilding President Matt Mulherin as saying, adding that the swiftness of laid-off workers’ departures was largely related to the fact that the shipyard is a secure facility.”

Though the abruptness of the dismissals came as a shock, the layoffs themselves came as no great surprise.
Back in July, the shipbuilder warned workers that, as work on three major aircraft carrier projects winds down, layoffs lay ahead for both hourly paid and salaried employees. It projected that 500 jobs would go this year and another 1,500 plus in 2016.http://bit.ly/1KnifmT

In a “Dear Shibuilders” letter and accompanying FAQ, issued at that time, Mr. Mulherin said “remember that the workload valley has both a beginning and end as our workload increases again in 2017.

“”We will issue 60-day notices to all affected employees,” the workers were told. “Employees will be expected to work during the 60-day notice period.”

However, because the actual number of layoffs was kept below the 500 number, Newport News was not required to give advanced notifications and the workers separated from the company on the day they were laid off.

Seventy seven of those laid off who have the appropriate skills will have the opportunity to return to an hourly trade job.

USCG releases towing vessel safety data

AUGUST 18, 2015 — The Coast Guard has released some of the findings from the report “Towing Industry Safety Statistics: 1994 – 2014,”  which was presented at a July National Quality Steering

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Nigeria slaps ban on 113 tankers

JULY 24, 2015 — Nigeria’s state oil company, Nigerian National Petroleum Corporation (NNPC) on July 15 listed 113 tankers prohibited, with immediate effect, from “engaging in crude oil/gas … activities in any…

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MAIB: Master tried to cover up grounding

ULY 15, 2015 — The U.K. Marine Accident Investigation Branch has published a report on a November 30, 2014 incident involving the grounding of the 6,190 gt U.K. flag general cargo vessel

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“Deadliest Catch” boat gets new life

JUNE 14, 2015—Everyone who has ever seen the commercial fishing reality TV show The Deadliest Catch has a favorite captain, crew, and boat. If you’ve caught an episode or two, you realize