Shipping and the World

[from Seatrade Maritime News]

Asyad Dry Dock Expanding Capacity As Demand Grows

Oman shipyard Asyad Dry Dock is expanding its capacity by 20% with a new floating dock as its current facilities are fully utilized.

by Marcus Hand

The shipyard, formerly Oman Drydock Company, is now part of the Asyad Group, the logistics arm of the Oman government. Management of the yard has been combined with shipowner Oman Shipping Company, and overseen by Dr. Irbahim Al Nadhairi, Chief Executive Officer, Shipping & Drydock.

“We have integrated the shipping and drydocking as the shipping service. The companies are still two legal separate entities but then we share the same executive team to be more efficient,” Dr. Ibrahim told Seatrade Maritime News in an interview at Posidonia 2022.

On the shipping side of the business the group owns a fleet of 65 ships with plans to increase the fleet to over 100 vessels over the next five years. He explains that with such a size of fleet the shipowner needed a quality shipyard so it made sense to work together.

Asyad maintains most, if not all its fleet at the shipyard in Oman, accounting for around 15% of its business. While part of the same group Dr. Ibrahim says it does not send its ships to the yard “by default,” and they have to make sure it is competitive as it needs to be for their third-party customers.

Business has been growing for the shipyard and it experienced a spike in the first half of this year as Chinese capacity has been taken out of the market by COVID restrictions pushing work to yards in other parts of the world. “So, we could see there was a big hike in the number of ships, not only for Asyad Dry Dock, but the entire region as well,” Dr. Ibrahim said.

“The next 12 months I believe the ship repair industry will still continue to flourish on our side.”

The shipyard’s two 600,000 DWT drydocks are already operating at full capacity and this year sees it adding a floating dock with the capacity to handle vessels up to Panamax size.

“We’ve recently acquired a floating dock which is of Panamax size and we reckon that about 40% of the business in ship repair is within that Panamax size. The floating dock gives us around 20% extra capacity,” he said. It will increase the number of ships the yard can repair from 200 to around 240.

The floating dock is expected to arrive in Oman in the next six weeks, and following some dredging works be operational by the start of Q4 this year.

Greek owners are major clients of the shipyard and account for around 40% of business, and Dr. Ibrahim said they added two more Greek clients last week. “It seems we have a good reputation in the Greek market and between now and end of Q3 we have 27 ships in orderbook from the Greek market.”

Globally its customer base includes MSC, AP Møller-Mærsk, CMA CGM S.A., Hapag-Lloyd, and Mitsui OSK Lines (株式会社商船三井). Maersk currently has currently two vessels in the yard.

Being able to deliver services efficiently and on time is of critical importance in the financially booming container sector.

“Today when you talk about bringing a container ship into a shipyard time really is money,” Dr. Ibrahim said. If a container ship owner says a ship will be in the yard for 15 days the owner will expect work to be completed in 12 days.

‘Further Action Is Needed’ As MEPC 78 Gets Underway

IMO Secretary General Kitack Lim hailed the 78th session of the Marine Environment Protection Committee as an opportunity to be brave and lead by example on decarbonization.

by Gary Howard

MEPC 78 has a packed agenda with the opportunity to consider and progress IMO’s work on cutting greenhouse gas emissions from ships.

At the last MEPC meeting, a revision process was agreed to strengthen the IMO’s initial GHG strategy which was adopted in 2018. A strengthened version of that initial strategy is due in mid-2023 at MEPC 80.

Speaking to Seatrade Maritime News in May, Stamatis Fradelos, Vice President, Regulatory Affairs at ABS said that important influencers in the IMO like the United States, EU, Canada, Japan, Australia and New Zealand are calling for net zero emissions from shipping by 2050 and introducing a level of ambition for 2040.

“Whilst progress has been made on many of the measures set out in the Initial Strategy, I am sure that we can all agree that further action is needed. Your discussions this week will chart the way forward for the decarbonization of international shipping,” said Lim.

“It is therefore of utmost importance that IMO continues to deliver concrete progress in transitioning international shipping from fossil fuels to low and zero-carbon alternatives.”

Member states at MEPC 78 will also consider adoption of guidelines to support short-term measures on GHG emissions, including correction factors for carbon intensity, EEXI calculation methodology and revised SEEMP.

Calculations on the GHG impact of fuels will be discussed, as ISWG-GHG 11 reports progress on developing lifecycle GHG assessment guidelines. Well-to-wake and tank-to-wake calculations are in scope, with the aim of giving fuel users a full picture of the impact of the production and use of the fuels they choose.

“Your constructive discussions on these topics will enhance the Committee’s evidence-based decision making when further considering proposals for mid-term GHG reduction measures,” Lim told Member States.

“I would like to take this opportunity to express my deepest appreciation to all Member States, and observer delegations, and especially the Chair of the Working Group on reduction of GHG emissions from ships, Mr. Oftedal of Norway, for the extraordinary effort and dedication in ensuring the successful outcome of both intersessional meetings.”

Houston Begins $1.1Bn Ship Channel Widening

The Port of Houston kicked off its the long-awaited billion dollar dredging scheme, the Houston Ship Channel Widening and Improvement Project 11 last week.

by Michele Labrut

The $1.1bn expansion of the Houston Ship Channel, which has been in planning for more than a decade is finally underway.

After more than a decade of planning, Project 11 will allow the ship channel to accommodate an additional 1,400 vessels per year and could generate up to $134bn more annually in economic impact once completed. The channel currently accommodates about 8,200 vessels and 215,000 barges each year, hauling more than 247m tons of cargo.

“This project will enable Port of Houston to continue to grow and respond effectively to whatever the future demand in the supply chain has to offer,” Port of Houston Executive Director Roger Guenther said in a statement.

Port of Houston is a 40-2 km-long complex of nearly 200 private and public industrial terminals along the 583.6 km-long manmade Houston Ship Channel, which connects the port to the Gulf of Mexico.

Project 11 will widen the Houston Ship Channel by 51.8 m along its 41.8 km Galveston Bay reach, to 213.3 m wide. It will also deepen upstream segments from a current depth of 13.7 m to a depth of 14.7 m. Dredging began last week. The Houston Ship Channel winds from the Gulf of Mexico through shallow Galveston Bay and up through the port.

“This project is important on many levels, including improving the efficiency of our nation’s supply chains, promoting navigational safety, and creating environmental benefits through the innovative use of dredged material,” Michael Conner, Assistant Secretary of the Army (Civil Works), said in a statement.

Port of Houston and the Army Corps of Engineers signed an agreement in August giving the port permits to start dredging the federal waterway. Great Lakes Dredge and Dock Co. was awarded a $95m contract in October, which also includes oyster mitigation and construction of a bird island. The channel widening and deepening project is scheduled to be completed in 2025.

EU Transport Commissioner Focuses on ‘Solidarity Lanes’ and Sanctions

As the global food crisis deepens and millions of tons of Ukraine’s grain remain blocked in the Black Sea, EU Transport Commissioner Adina-Ioana Vălean has declared that all transport modes will be considered in setting up new Solidarity Lanes that bypass the Black Sea.

by Paul Bartlett

Her comments come as disrupted grain movements risk a global food crisis.

Speaking to journalists immediately prior to yesterday’s opening ceremony at Posidonia, she said that trucks, tracks, trains, transshipment and storage facilities will all contribute to new supply chains to ensure that exports from one of the world’s largest grain exporters can resume, at least in part, as soon as possible.

She said that the setting up of Solidarity Lanes would have important commercial implications for shipping and could even lead to changes in the sector’s business models

Vălean also rejected criticism from prominent Greek shipowners who had claimed earlier in the day that sanctions imposed on Russia in the wake of its invasion on Ukraine won’t work. At a Maritime Leaders Summit staged by Capital Link on Monday, George Prokopiou and Evangelos Marinakis had both said that sanctions against Iran and Venezuela had been shown not to work and similar moves against Russia would not be effective either.

However, other sources pointed to the scale of the sanctions package that has severely impacted the Russian economy by disrupting key revenue generating sectors. Energy exports are the most obvious example and although Russian oil is still easily sold in India and China, for example, it is at deep discounts to global prices.

Meanwhile, LNG exports have also been hit and development of Arctic LNG supply chains have also been severely affected. Within the next few months, Vălean said that Russian oil exports would be further disrupted by the withdrawal of insurance cover on shipping and transport arrangements.

World-Watching: Shipping Problems Webinar

Solving SMB Shipping Problems with Technology — June 14th @ 2 PM EDT

[from FreightWaves]

The supply chain challenges we hear about today likely bear little resemblance to those we envisioned at the beginning of 2020. Ongoing disruption to the global supply chain has accelerated and heightened the need to focus on risk mitigation — or face even more critical concerns.

To uncover ways small and midsized (SMB) organizations can overcome tech adoption challenges and continue to grow, FreightWaves has partnered with MyCarrier for a one-hour webinar at 2 PM EDT on Tuesday, June 14.

In this webinar, learn how SMB organizations can alleviate the pressure of industry volatility by utilizing technology to:

  1. Reduce shipping costs
  2. Maintain customer demands
  3. Source reliable capacity
  4. Ensure timely pick ups 
  5. Manage inventory
Speakers

Register for the webinar.

Education and Seeing the “Swirl” of History

The tempo and rhythm of world events and world history are not captured in the linear and bland books one reads in schools and colleges where the sense of the stormy forward turbulence of the world is not communicated. Here’s an example that does communicate this “crazy dynamics”:

The leading historian, James Joll, in his excellent Europe Since 1870: An International History talks about gold and the gold standard in this way:

“The world supply of gold was diminishing, as the effects of the gold rushes in California and Australia in the 1850s and 1860s passed. This coincided with the decision in the 1870s of many of the leading countries to follow Britain’s example to use gold rather than silver as the basis of their currencyGermany in 1871, France in 1876 for example — so that the demand for gold rose just as the supply was temporarily declining. This in turn led to some doubt about the use of a gold standard and to much discussion about ‘bi-metallism’ and about the possibility of restoring silver to its place as the metal on which the world’s currency should be based, though this movement had more success in the United States than in Europe, where gold has now established itself firmly. By the 1890s however the discovery of new gold deposits in South Africa, Western Australia and Canada put an end to these discussions and uncertainties, as far as currency was concerned, for some fifty years.”

(James Joll, Europe Since 1870: An International History, Penguin Books, 1976, page 35)

These twists and turns and accidents or contingencies don’t communicate the real semi-turmoil surrounding all the decisions, which we can infer from the comment by a German politician in 1871, “We chose gold, not because gold was gold, but because Britain was Britain.” (Ian Patrick Austin, Common Foundations of American and East Asian Modernisation: From Alexander Hamilton to Junichero Koizumi, Select Publishing, 2009, page 99.)

Professor Joll delineates the emergent primacy of England:

“The establishment of London as the most important center in the world for shipping, banking, insurance-broking and buying and selling generally, as well as the growth of British industry, had been based on a policy of free trade.”

(James Joll, Europe Since 1870: An International History, Penguin Books, 1976, page 34)

The gold standard itself, dominated from London led to intricate problems: Golden Fetters: The Gold Standard and the Great Depression, 1919-1939 (published in 1992) by Barry Eichengreen, the leading historian of monetary systems, shows the downstream pitfalls of the gold standard.

In other words, the de facto emergence of Britain/London as the world commercial and policy center and the relation of this emergence to empire and international tensions and rivalries, means it is very problematical for any country to steer a course other than staying in tandem with British moods and ideologies, such as free trade. Any country by itself would find it difficult to have a more independent policy. (Friedrich List of Germany, who died in 1846, wrestles with these difficulties somewhat.) The attempts to find “autonomy and autarky” in the interwar years (Germany, Japan, Italy) led to worse nightmares. The world seems like a “no exit” arena of ideologies and rivalries.

The “crazy dynamics” and the semi-anarchy of the system, which continues to this day and is even worse, means that policy-making is always seen through a “dark windshield.”

History in the globalizing capitalist centuries, the nineteenth and the twentieth, is a kind of turbulent swirl and not a rational “walk.”