Weekly News Week 2009/11 09.03.2009 to 15.03.2009 www.axs-alphaliner.com AXS-Alphaliner News is a weekly summary of the latest liner shipping news compiled by Alphaliner and published daily on the AXS-Alphaliner website. It is e-mailed every Monday night, and is available free of charge upon request, at our discretion. Information is given in good faith but without guarantee. Please send your feedback, comments and questions to data@alphaliner.com ** New ** - "Transpacific Capacity Falls by 13%" - ** New ** 10 Services Axed New trade survey - As carriers prepare to enter the new Transpacific contracting season on 1 May 2009, drastic capacity adjustments have been made to reflect the decline in volumes. Average weekly capacity in the Far East to North America trade has been reduced by 13% in March 2009 compared to October 2008. For the first quarter, capacity has been reduced by 8% in January-March 2009 compared to the previous quarter. A significant number of the ships displaced have been sent into lay-up by the carriers as the industry grapples with the most serious downturn in its history. Industry players have warned that rates in the Transpacific trade could fall dramatically, mirroring the rate reductions already seen on the Asia-Europe tradelane. Based upon data from AXS-Alphaliner, there are 60 dedicated liner services on the Far East to North America trade as at March 2009, down from 70 services in October 2008. 14 services have been withdrawn within the last six months while four new services were introduced, to partially replace the strings axed. Please contact AXS-Alphaliner for details and ordering Page 1 of 7
Idle fleet at 1.4 M teu The idle containership fleet reaches 484 ships for 1,410,000 teu (11.3% of the cellular fleet), according to Alphaliner records at as 16 March 2009. There is an inflexion in the rate at which ships are left aside. The idle fleet still grows, but at a lower rate than in the past three months. The traditional winter lows are behind us. It now remains to hope that the next peak season, which should kick off in May or June, maintains the positive momentum, if, and it is a big if, consumer confidence rebounds. The Austral hemisphere fruit season also has positive effect. It keeps busy some 20 extra ships totalling 35-40,000 teu, mostly in the 1,300-3,000 teu range. The ships concerned are naturally characterized by their high reefer capacity. Interestingly, there is a pause in the idling of ships above 3,000 teu and for ships of 500-1,000 teu. The figure still rises significantly for ships of 1,000-3,000 teu, freed up in large quantities as their charters expire. continue bringing some of their ships in cold lay up. Around 243 of the 484 idle ships are charter market ships without charter, awaiting employment. Their capacity adds up to 370,000 teu. 232 of these ships are smaller than 3,000 teu. The remaining 241 idle ships, aggregating 1,040,000 teu, are controlled by carriers (either owned or chartered). Idle ships by size ranges : TOTAL : 484 units for 1,410,000 teu > 7,500-10,000 teu => 24 units > 5,000-7,500 teu => 58 units > 3,000-5,000 teu => 88 units > 2,000-3,000 teu => 94 units > 1,000-2,000 teu => 134 units > 500-1,000 teu => 86 units. (Figures at 16 March 2009) Of note, the count for the 500-1,000 teu range includes only ships which are usually deployed on container services and excludes the spot multipurpose units usually deployed on breakbulk, project cargo or tramp trades. They rarely interfere on container trades. Historical figures : Carriers try to reduce their charter bills. They have recently merged services, which allows employing 3,500-4,000 teu ships where 2,000-3,000 teu ships were hitherto used. On top of adjusting overall capacity to economic reality, the move is beneficial, since the larger ships are often owned by carriers or locked for long periods, while the smaller ones are chartered for shorter periods, many of which ending during the first half 2009. As a result, the ratio of charter market ships awaiting an employment is increasing. This is logical since carriers discharge their chartered ships one after the other as charters expire. Thus, non operating owners bear the brunt of the overcapacity crisis - as they do in any crisis. Given the poor prospects in the short-to-medium term, some owners will > Idle fleet at 16 March 2009 1,410,000 teu - 484 ships > Idle fleet at 02 March 2009 1,350,000 teu - 453 ships > Idle fleet at 16 February 2009 1,100,000 teu - 392 ships > Idle fleet at 02 February 2009 800,000 teu - 303 ships > Idle fleet at 19 January 2009 675,000 teu - 255 ships > Idle fleet at 05 January 2009 550,000 teu - 210 ships > Idle fleet at 17 December 2008 420,000 teu - 165 ships > Idle fleet at 08 December 2008 300,000 teu - 135 ships > Idle fleet at 24 November 2008 270,000 teu - 115 ships > Idle fleet at 25 October 2008-150,000 teu - 70 ships Page 2 of 7
New Myanmar-India carrier KMA Shipping, a newly formed private shipping company based in Myanmar, has launched a container service connecting Yangon to Chennai, with planned expansion to Mumbai, using the 562 teu KMA 1 and KMA 2. KMA Shipping was reportedly set up last summer with the assistance of the Korea-based C& Group, which has since met difficulties and has closed its shipping services. The 29-year-old KMA 1 and KMA 2 were purchased by KMA in August 2008 and have since been lying idle at Yangon. These ships are better known under their former names CHESHAM and AMER- SHAM. They used to be employed by Sea-Land Service and later by Maersk Sealand. Various Lines News As suggested, Hanjin Shipping has taken under its banner the services operated by its former affiliate Senator Linie, which ceased to operate on 28 February : the Med Canada loops (Joint Med Canada Services - JMCS) and its slot allocation on the CSAV's North Europe-ECSA EURATLAN service. All the other services offered by Senator were already operated through co-loading with Hanjin. MSC has launched a dedicated relay service covering the Amazon, connecting its Freeport hub (Bahamas) with Manaus and Vila do Conde. MOL is to add direct calls at Durban and Maputo on the eastbound leg of its Far East-Africa WA 1 service, thus offering a direct Mozambique-Far East service. PIL is involved as slot buyer. MOL and Samudera have rationalized their SE Asia-Indian subcontinent relay services with the merger of the MOL- Samudera Singapore-Pakistan service (KEX) and of the MOL's PK-Singapore- Mumbai service (NS-2) into a single loop, the 'Straits-Nhava Sheva Karachi Express' (NKX). The NKX employs MOL FORTUNE (2,887 teu), MOL GLORY (2,638 teu) and THOMAS MANN (2,586 teu), this latter one being contributed by Samudera. The KEX employed three ships averaging 1,050 teu while the twoship NS-2 loop employed already the MOL FORTUNE and MOL GLORY. X-Press Container Line is to start a new feeder service between Rotterdam and Liverpool, commencing ex Rotterdam on the 17th March. The service uses the freshly chartered 750 teu GERD. The new service will be the only direct feeder connection between these two ports. The industrial zones around Liverpool / Manchester areas have long been served from East Coast UK ports with units subsequently trucked or railed across to the destination areas. UK-based X-Press Container Line is managed by Sea Consortium. Maersk Line is to add Port Said and Algeciras to its North Europe-Med reeferoriented service, the EuroMed, launched in January 2009. The Tangier call is dropped. Subscribe to the AXS-Alphaliner website to get the news on a daily basis with full service rotations, ships deployed and context www.axs-alphaliner.com Deliveries Hyundai Merchant Marine (HMM) has taken in charge the HYUNDAI SPLEN- DOR, third of four 8,900 teu ships ordered in April 2006 at Hyundai H.I. by Zodiac Maritime with the backing of a long term HMM charter. As planned, the HYUNDAI SPLENDOR and her three sister Page 3 of 7
ships are assigned to the New World Alliance 'Asia Europe Express' service (AEX), currently operated with HMM's 6,800 teu ships. This four ship series follows a previous batch of four similar ships delivered one year ago in HMM name (two of which currently chartered out to CMA CGM). It is expected that these eight ships replace the 6,800 teu ones on the AEX. The first 6,800 teu ships displaced are to join the transpacific HMM's PCX loop (part of NWA offer). Hamburg Süd is to receive the 5,560 teu MONTE ACONCAGUA, built at DMHI (Daewoo) s Romania yard. She is the seventh of a second series of ten similar ships ordered by Hamburg Süd to Daewoo Group shipyards DSME (Korea) and DMHI (Romania) in February and May 2005. However, six of them will be delivered as lengthened 5,900 teu versions, carrying a RIO name-prefix. The MONTE ACONCAGUA will proceed from the Med to the Far East where she is expected to join the Hamburg Süd-Maersk Line Far East-ECSA service (ASAS / NGX). The Hanjin-Philippines yard located at Subic Bay, has now delivered the 4,308 teu CMA CGM TOPAZ, fourth of six ships ordered by Greek owner Dioryx Shipping in February and May 2006. All six ships have subsequently been fixed by CMA CGM. The new ship has been assigned to the East Asia-Mexico-Caribbean-NCSA service (PEX 2). NYK is to receive the NYK LAURA, fifth of a series of ten ships of 2,664 teu, ordered in several steps at the STX Shipyard. She is assigned to the NYK's FE- WCSA 'ALEX-NEO' service. K Line has taken in charge the LOS AN- DES BRIDGE, a 2,553 teu ship built for Japanese owners at Naikai Zosen and long term chartered by K Line. She belongs to the 'Naikai 2500' series and is assigned to the Asia-ACSA 'New Andes' service. German owner Foroohari Schiffahrt has received the 1,795 teu BF IPANEMA, one of two ships purchased from Carsten Rehder, who ordered them at the Kouan Shipyard. She is believed without employment. She is the sixth unit delivered in the 'Kouan 1800' series. Pacific International Lines (PIL) has received the KOTA DESA, a 604 teu ordered at the Penglai Bohai shipyard. She is expected to join the PIL's Singapore- Calcutta service. Orders Thyssen Krupp Marine Systems announced that it has stopped work on the construction of four ships of 3,426 teu. The yard has been informed by the client (Gebab) that the banks are not going to finance the construction of these ships so that, from today's point of view, the ships will not be accepted as previously agreed. Two other hulls were earlier reported as not being built. Interestingly, TKMS does not say that the orders are cancelled, thus keeping open negotiations with other parties. Besides, such an example shows how difficult it is to assess the orderbook these days, as many orders fall in a grey zone for various reasons. In its 2008 financial report, Danaos Shipping mentions the deferring of some of its 30 containership orders. ''We have, in cooperation with our charterers, successfully delayed the delivery, so far, of five newbuildings for up to eight months while we are in the final stages of pushing back the delivery of five more newbuildings for two to seven months", says the report. Terminals Tangier The Moroccan press reports that APM Terminals (APMT) seeks to delay its second large-scale terminal development in Morocco : Tanger Med 3. The company reportedly blamed the poor state of the liner market and the very tight credit situation for its decision. Page 4 of 7
Located on the African side of the Gibraltar Strait, Tanger Med is one of the largest green field port developments in the world. It consists of three large port basins located directly next to each other. Two of these are mostly dedicated to container traffic and each of these two basins accommodates two container terminals. The first port, including the first two box terminals with a total quay length of about 1,600 metres is already operational. Two of the berths represent the first step of APMT s Moroccan involvement, while the remaining two are managed by a consortium of Eurogate, CMA CGM and MSC. Last year in July, the local planning body, the 'Tanger Med Port Development Agency (TMPDA), had awarded the operating concessions for the container terminals number three and four. Terminal Three went to a consortium of Maersk Line, APMT and their local partner, the Moroccan Akwa Group. Terminal four was awarded to PSA who jointly bid with the local Marsa Maroc and Société Nationale d'investissement. In terms of capacity, APMT s new terminal would triple the size of its facilities in Tanger Med port and add a further 1,600 metres of ULCS-ready container quay. The terminal operator is now believed to have expressed to TMPDA its wish to postpone the construction of the new terminal in Tanger Med 2. AMPT claimed that the present pipeline had been agreed upon before the ongoing economic slowdown which led to a stagnation of volumes in seaborne trade and even significant volume drops on many trades. AMPT is quoted as saying the company would not see any short-term recovery of the container market. Furthermore, APMT s parent company A.P. Moller-Maersk pointed out that its focus in terms of ports has shifted for the time being. In the recent past it was on investments and capacity building presently its lies on generating cash-flow and streamlining operations. Reportedly, AMPT also addressed the issue of concession dues, which are said to be comparatively high at Tanger. Given that fact that Tanger Med I is up and running and considering that Maersk still disposes of a major hub in Algeciras, Spain, just a few kilometres away on the northern side of the Strait, there just seems to be no need for the extra capacity right now. It is presently not known whether APMT will succeed with its intentions or to what degree TMPDA has the right to insist on the proceedings agreed under the license contract. Singapore s PSA, the developers of the neighbouring Tanger Med terminal 4, so far did not voice any intentions to re-schedule the construction of their facility. According to the original pipeline, Terminal 3 is scheduled to come on stream in 2012, whereas PSA s Terminal 4 completion is planned for 2014. *** New *** AXS-Alphaliner China Container Ports Review 2009 Detailed overview of the current conditions in the country with full profiles of all the main port operators in China. Detailed analysis of container terminal operations at all the main coastal and river ports across China. More than 100 maps, charts and tables Chennai Price : Euro 1,500.00 Despite the worldwide economic downturn, interest in Chennai s new deep water container port project remains high. Online magazine The Hindu reveals that a total of nine firms and bidding consortia showed interest in the request for Page 5 of 7
qualification and filed initial proposals. The Chennai Port Trust, supervisors of the tender process, will soon publish a shortlist of the six participants with which the state-owned port authority will then take up negotiations. The USD 750 M Chennai terminal project will be constructed on a build-operatetransfer basis with a concession period of 30 years. It will provide some 2,000 quay metres with an annual handling capacity of about 4 Mteu. Opposed to many other Indian ports, the new Chennai facility will offer a high draughty clearance, enabling it to accommodate fully laden VLCS and ULCS. A rivalling container port development takes place at Ennore, just 20 kilometres north of Chennai, where construction works recently began. Piraeus The long term lease of the port of Piraeus container terminals to COSCO Pacific, a Hong Kong-listed subsidiary of the China Ocean Shipping Company, has now received final clearance from the Greek Congress. COSCO Pacific had already won the tender last year, but the deal was still subject to government approval. The Chinese company will now take over four container berths (at Pier 2) under a 30 year license and two more (at Pier 3) under a 35-year contract. The company reportedly offered EUR 4.3 bn for the deal and agreed to another EUR 620 M in infrastructure investments. The exact total sum is however disputed, since the deal involves a complicated scheme of initial payments and additional lease costs which are due over the 30-year course of the license period. COSCO Pacific will take over operations on 1st October 2009. Thessaloniki Greece will annul the ongoing tender to privatise Thessaloniki port, according to Reuters and local reports. Greece will not entirely abandon plans to find a strategic investor and operator for the port of Thessaloniki s container facilities, reports Lloyd s List. After the Greek main port of Piraeus, which was sold to COSCO Pacific last year, Thessaloniki is the second major privatisation project in the Greek port sector. A consortium consisting of Hutchison Ports and Greek pharmaceutical company Alapis had been awarded the title of the preferred bidder as early as in summer of 2008 but eventually decided to pull out late last year, due to the tough economic climate. Ever since, not much seems to have happened and it is unclear whether the authorities continued negotiations with the first runnerup in the tender. An unnamed government source claims that the sale might be called off altogether. This might turn into a problem for OLTH, the stateowned port operator and port authority. Reportedly, OLTH has already invested considerably and started infrastructure improvements at Thessaloniki in order to speed up the port modernisation. If no sale takes place, OLTH themselves will have to pay the bills for the work, rather than passing them on to the buyers or paying them from the income generated through the sale. Hong Kong s Hutchison Port Holdings and Alapis had originally offered about EUR 3 bn in the tender. Some sources suggest that this price was a bit too optimistic in the first place, even before the recent downturn. In addition to this, the banks which backed the deal financially might have to be bailed out too. Allegedly, it has now been revealed that the Greek government plans to nullify the ongoing tender and launch a new sales procedure in the near future this information is however presently still unconfirmed. Though the government position on the sale has not changed, some voices suggest that it might not be a good idea to start a second tender right away. Since the liner market is going through a dire period, the financial yields of such an untimely sale might turn out to be rather underwhelming. Page 6 of 7
Despite some hefty opposition from trade unions, Greece is said to be determined to pursue its course of port privatisation. Last week parliament ratified a 30-year (35-year for some berths) concession deal between COSCO Pacific and the Piraeus Port Authority. The government view is that privatisation is the only way to bring the country s main port up to standard and to shoulder the huge investments needed to expand terminal capacities. Page 7 of 7