Business Insights from the Maritime and Logistics Ecosystem – Maritime Weekly 20 May 2016

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Maritime Weekly

Insights for Senior Maritime & Logistics Executives
20 May 2016


Greetings from Maritime Weekly, a weekly newsletter published by Maritime World Services, a research, executive search, and events management platform for the global maritime ecosystem. Our editorial board comprising reputed maritime, logistics, and media leaders curates key maritime news and analyses once a week, to support you in making informed decisions in the week ahead.


What is topical this week


The newly formed alliance comprising six container shipping lines will cover all East-West trade lanes, Transatlantic and Asia-Middle East, Persian Gulf and Red Sea lanes, with a projected capacity of approximately 3.5 Mn TEUs or 18% share of the global container fleet capacity. Hyundai Merchant Marine may have a chance to join the alliance belatedly. Wal-Mart is exploring a two-day shipping subscription service taking on Amazon’s Prime, the 2 retailers will also compete for arrangements with shipping companies towards ensuring cost effective and timely fulfilment. China and Australia have achieved a milestone in cooperation in trade and shipping with the plans to acquire 5 containerships for the regional shipping line to focus on Australia’s coastal trades and voyages to Rizhao in northern China’s Shandong province.


The Japan International Cooperation Agency (JICA) has signed an agreement with the Government of Vietnam for funding the development of a deep sea port to the east of Haiphong. Rwanda would initially develop rail links to Indian Ocean ports transiting through Tanzania instead of Kenya, as they were cheaper and shorter.US import cargo volumes at the major retail container ports in the first half of 2016, are expected to total 9 million TEUs, up 1.4% from the same period in 2015.


The management and operations of Tanzania-Zambia Railway Authority (Tazara), would be taken over by China, as a turnaround strategy for the landmark 1,860 km single-track railway line that was built in the early 1970s by China. Azerbaijan Railways' joined the railway project Viking Train, launched in 2003. The project’s other participants are Ukraine, Belarus, Lithuania, Latvia and since 2012 Bulgaria and Azerbaijan’s participation will extend the container train route to more distant Asian countries by providing an alternative route to reach Kazakhstan and China. The Indian Railways will run a solar-powered train, wherein solar energy will be used for internal electricity gadgets.


Daewoo Shipbuilding & Marine Engineering (DSME) recently signed a memorandum of understanding (MOU) with the Iranian government, to run Iran Shipbuilding & Offshore Industries Complex and transfer manufacturing technology to the Iranian shipbuilder, towards transforming Iran into a shipbuilding industry hub in the Middle East.The International Maritime Organization (IMO) has confirmed the goal-based standards for the construction of bulk carriers and oil tankers, carriers submitted by 12 classification societies.


With the support from the ADB, India is presently investing in the development of two priority road corridors, the first will connect India with Bangladesh, Nepal and Bhutan through the ‘chicken neck’ area of North Bengal and the second road corridor will establish India-Myanmar connectivity in Manipur. DP World Yarimca, the first infrastructure project in Izmit Bay to be run by an international operator, has been operationalized. There has been opposition from California to New York, as US ports are investing billions of dollars to dredge harbors, raise bridges, add roads and connect more closely to rail yards , from the communities that look to the seaside for recreation as much as commerce.

Terex Corporation has formalised the sale of its Material Handling and Port Solutions Business to Konecranes. Japan, the world’s leading LNG importer, will open access to receiving terminal and beef up large-scale LNG storage facilities to make active LNG trading possible.


Genting Hong Kong has placed an order for ten luxury cruise ships with Germany’s Lloyd Werft Group, of which 8 mid-size ships will go to Crystal Cruises, targeting the international luxury cruise market while the 2 mega ships will go to Star Cruises who focus on the contemporary Chinese market. Despite the economic slowdown and currency fluctuations, India's outbound tourism market has increased by 29% this year as compared to last season (20%). Towards promoting Cruise Tourism in India, a Task Force on Cruise Tourism has been constituted by the Ministry of Tourism which comprises of members from the Central Ministries, State Governments, various Port Trusts and Private sector.

Have a great week ahead.
The Maritime Weekly Editorial Board.


Global Maritime Trade

‘The Alliance’ on shipping excludes Hyundai Merchant Marine for now
Hellenic Shipping News. 16 May. 3 Minute Read
Hanjin Shipping has agreed to join a “third shipping alliance” with shipping companies that have not joined the two major shipping alliances (2M Alliance, Ocean Alliance). Hyundai Merchant Marine, in contrast, has been excluded from the alliance and it is however expected that, if Hyundai can improve its financial status prior to the official launch of the youngest alliance, the company may have a chance to join the alliance belatedly.Shipping container lines Hanjin, Hapag-Lloyd, KLine, Mitsui OSK Lines, Nippon Yusen Kaisha and Yang Ming have created a new alliance, called THE Alliance, that is expected to establish a leading network in the container shipping industry with a projected capacity of approximately 3.5 million twenty foot equivalent unit (teu) or 18% share of the global container fleet capacity.

Read More

Wal-Mart is taking on Amazon with its 2-day shipping service: ShippingPass
The Verge. 12 May. 4 Minute Read
Taking on Amazon Prime, Walmart is exploring a two-day shipping subscription service, wherein customers will be eligible for two-day shipping for $49 a year. ShippingPass was launched last year with three-day shipping, but the upgrade makes it much more competitive with Amazon’s $99 Prime subscription. Wal-Mart intends to spend $2 billion on e-commerce by the end of next year and is looking to develop its online grocery business. The two mega retailers won't only be competing for customers, but also for arrangements with shipping companies, to fulfil orders within the shorter delivery window.

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Australia has a new shipping line for coastal trades
Splash 24/7. 16 May. 3 Minute Read
Great Southern Shipping Australia (GSS) and China’s Rizhao Port Group are collaborating to buy five containerships, to be flagged with the Australian International Shipping Register (AISR), This shipping line will focus on Australia’s coastal trades and voyages to Rizhao in northern China’s Shandong province. The joint venture has plans to grow the fleet to 10 ships and to move the weekly service to twice a week as business picks up. The initiative brings together China and Australia, in cooperation in trade and shipping, marking a very significant milestone for Australia’s maritime industry.

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Maritime Infrastructure


Japan to support development of Vietnam ports
JOC. 10 May. 5 Minute Read.
Vietnam- a rapidly growing Asian country would receive new loans of USD 781 M from Japan for the development of ports and road infrastructure. The Japan International Cooperation Agency (JICA) has signed an agreement with the Government of Vietnam for funding the development of a deep sea port at LachHuyen to the east of the city of Haiphong , the third largest city of Vietnam and for supporting hinterland road and bridge links.

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Rwanda to develop ocean access, linking up with Ocean Ports Via Tanzania
All Africa. 15 May. 6 Minute Read.
Rwanda would initially develop rail links to Indian Ocean ports through Tanzania because they were cheaper and shorter than the route transiting Kenya. The project is scheduled to be completed by March 2018. The railway route via Tanzania will link Kigali to a port in Tanzania's commercial capital, Dar es Salaam. A new railway is being built from Isaka in northwestern Tanzania to Kigali, with a branch to Musongati in neighbouring Burundi. The existing railway from Dar es Salaam to Isaka is being upgraded.

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US Ports expect to achieve higher import volumes.
MH&L. 15 May. 6 Minute Read
US import cargo volumes at the major retail container ports are expected to be at some of the highest levels ever during the next few months despite a falloff from last year’s record-setting numbers. Ports covered by Global Port Tracker handled 1.32 million twenty-foot equivalent units (TEUs) in March 2016. That was down 14.2% from February, partly because of a carryover from Chinese New Year factory closings. It was also down a dramatic 23.7% from the all-time record high set in March 2015 after a new contract with dockworkers ended a near-shutdown at West Coast ports and brought a flood of backlogged cargo through the ports. The first half of 2016 is expected to total 9 million TEUs, up 1.4% from the same period in 2015. Total volume for 2015 was 18.2 million TEUs, up 5.4% from 2014 .

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Port Connectivity


Africa: China to Take Over Tanzania Zambia Railway Authority ( Tazara)
All Africa. 16 May. 5 Minute Read
The management and operations of Tanzania-Zambia Railway Authority (Tazara), would be taken over by China in a major plan towardsprivitisation of the struggling corporation. Tanzania and Zambia would also be required to review their domestic laws to provide for preferential provisions in the running of Tazara, with a view to attracting more private players. China is looking to leverage its role in the railway line to push for the establishment of the Bagamoyo Port. The proposed privatisation plan is a turnaround strategy for the landmark 1,860km single-track railway line that was built in the early 1970s by China as a cold-war era gift to Tanzania and Zambia

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Azerbaijan joins Viking Train project
AZERNEWS. 16 May. 5 Minute Read.
A protocol on Azerbaijan Railways' joining the railway project Viking Train was inked on May 13. The Viking Train project was launched in 2003 and the project's participants are Ukraine, Belarus, Lithuania, Latvia and since 2012 Bulgaria. The total length of the Ilyichevsk (Ukraine)-Minsk (Belarus)-Draugyste (Lithuania) route is 1,766 kilometers. Azerbaijan’s participation in the Viking project will extend the container train route to more distant Asian countries by providing an alternative route to reach Kazakhstan and China. The Viking project has been recognized as one of the best examples of developing the East-West and North-South transport corridors.

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Indian Railways to run first Solar-powered train trial
PC-Tablet. 16 May. 5 Minute Read.
The Solar panel powered train is an experiment taken to reduce the consumption of fossil fuels by the Government. While the train will run on conventional diesel, solar energy will be used for internal electricity gadgets. In all 12 solar panels will be fitted on the top of each coach producing 36000 watts of power for the smooth running of the train. If successful, it will reduce diesel consumption by up to 90,000 litres in the country every year. Other than the solar energy the Indian Railway is also looking at usage of alternate sources of energy like CNG, Biodiesel and Natural Gas. It already has a successful example with local trains on Rohtak-Rewarisection of Delhi division are run on CNG.

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Shipbuilding

Daewoo Shipbuilding & Marine Engineering (DSME) will manage Iranian Shipbuilder
The Korea Times. 16 May. 5Minute Read
DSME recently signed a memorandum of understanding (MOU) with the Iranian government to run Iran Shipbuilding & Offshore Industries Complex. DSME will also transfer manufacturing technology to the Iranian shipbuilder. The Industrial Development and Renovation Organization of Iran (IDRO), the state-run organization in charge of the nation's strategic industries such as automobiles and shipbuilding, is seeking to form a partnership with the Korean shipbuilder. IDRO wants to acquire advanced technology and dockyard management knowhow from DSME to transform Iran into a shipbuilding industry hub in the Middle East. Hyundai Heavy Industries, Samsung Heavy Industries, and other local firms are also expected to make inroads into the Middle Eastern nation.

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IMO ushers goal-based standards for shipbuilding
Seatrade Maritime News. 09 May. 5 Minute Read
Rules for construction of oil tankers and bulk carriers submitted by 12 classification societies conform to the goals and functional requirements, set by the International Maritime Organization (IMO), marking a new development in how international standards for ship construction are determined and implemented. The philosophy behind goal-based standards for bulk carriers and oil tankers is that ships should be designed and constructed for a specified design life and that, if properly operated and maintained, they should remain safe and environmentally friendly throughout their service life .

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Maritime Nation India September 20-22, 2016 has already received support from the Prime Minister’s Office(PMO) the Minister of Road Transport, Highways & Shipping , India and,the wholehearted support from Jawaharlal Nehru Port Trust (JNPT) , Mumbai and Nava-sheva Ship Agents Association (MANSA) Federation of Freight Forwarders Associations of India (FFFAI),Indian National Ship-owners Association (INSA) and the Indian Private Ports and Terminals Association (IPPTA) and The Association of Multi-modal operators of India (AMTOI) .



The Federation of Freight Forwarders Association in India (FFFAI) is organising the International North South Transport Corridor (INSTC) - International Conference- India 2016 at the International Convention & Exhibition Centre in Navi Mumbai on 21 Sep 2016. “ This conference is being held in collaboration with Maritime World Services, who are organising Maritime Nation India 2016, International Conference and Exhibition at the same venue.


The INSTC International conference would have expert speakers and delegates from the maritime and logistics infrastructure, private operators and government officials from India, Iran, Russia, Azerbaijan , Kazakhstan, Turkmenistan and other CIS countries.
This week we are happy to welcome Rear Admiral SN Ghormade, Flag Officer Commanding Maharashtra Naval Area and Mr Max Ward, CEO ,OpenPort as our esteemed speakers.


We will keep the readers updated on key developments and events that Maritime Weekly supports.



Maritime Capital

India to improve connectivity in South Asia with the support of Asian Development Bank (ADB)
The Indian Express. 10 May. 7 Minute Read
With the support from ADB, India is presently developing two priority road corridors. The first will connect India with Bangladesh, Nepal and Bhutan through the ‘chicken neck’ area of North Bengal. The second road corridor will establish India-Myanmar connectivity in Manipur. Integrated Check Posts (ICPs) at Agartala and Petrapole on India-Bangladesh border will be operationalised. Discussions are also on for a 1,680 km mega gas pipeline project linking Turkmenistan, Afghanistan and Pakistan with India.

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DP World operationalizes container terminal in Turkey
Hellenic Shipping News. 16 May. 6 Minute Read
The new terminal can handle up to 1.3 million containers covering 460,000 square metres, enhancing Turkey’s connectivity with Europe and Asia and enabling trade from the heartland of its most industrialised region, Izmit Bay. DP World Yarimca is the first infrastructure project in Izmit Bay to be run by an international operator, and the first in the country to use remote controlled gantry cranes with automated gate operations featuring a vehicle appointment system for faster processing. It also has fast scanner x-ray machines, the first of their kind in Turkey that can scan 120 containers every hour.

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Expansion of US ports generating opposition from local communities
The Wall Street Journal. 16 May. 2 Minute Read
The opposition from California to New York comes as ports are spending billions of dollars to dredge harbors, raise bridges, add roads and connect more closely to rail yards. The community groups and local activists say unchecked seaport expansion has damaged coastal ecosystems and is choking populations with high emissions from trucks, trains and ships. While Ports and trucking companies say they’ve made progress in reducing pollution, yet a surge in cargo that some are projecting promises to push more cargo through more tightly-packed distribution channels, and that will put more freight trains and ocean container ships closer to communities that look to the seaside for recreation as much as commerce..

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People & Technology

Terex Announces Sale of Material Handling and Port Solutions Business to Konecranes
Business Wire. 16May. 9 Minute Read
Terex Corporation announced that it has agreed with KonecranesPlc to mutually terminate the Business Combination Agreement (“BCA”) the companies entered into on August 10, 2015, without payment of a fee by either party. In connection with the termination of the BCA, Terex has signed a definitive agreement to sell its Material Handling and Port Solutions business (“MHPS”) to Konecranes for total consideration of approximately $1.3 billion.

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Japan aims to be an Asian LNG Hub
Maritime Professional. 13 May. 4 Minute Read
Japan remains the world’s leading LNG importer, a position it has held since the inception of the industry over 50 years ago.In an attempt to play a role in creating a global LNG market, Japan will open access to receiving terminal and beef up large-scale LNG storage facilities to make active LNG trading possible. Many Japanese utilities are planning for not only marginal increases in LNG purchases over the next decade but also a growing sphere of LNG activities.

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Leisure & Cruise

Genting Hong Kong orders 10 luxury cruise ships with Germany’s Lloyd Werft Group
World Casino News. 16 May. 4 Minute Read
Genting operates some of the biggest cruise brands in the world including Star Cruises, Dream Cruises and Crystal Cruises.The order is for eight mid-sized ships that weigh around 50,000 gross tonnes and for two mega ships that weigh around 200,000 gross tonnes and have 5,000 lower berths. The eight mid-size ships will go to Crystal Cruises who focus on targeting the international luxury cruise market while the two mega ships will go to Star Cruises who focus on the contemporary Chinese market.

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India-Rising outbound tourists heading towards Malaysia, Singapore, Thailand, Dubai
Business Standard. 16 May. 6 Minute Read
Despite the economic slowdown and currency fluctuations, India's outbound tourism market has increased by 29% this year as compared to last season (20%), reveals the associated chamber of commerce and industry of India (ASSOCHAM) findings.Excessive heat in most parts of the country, particularly in the North, coupled with attractive packages for nearby countries like Dubai, Singapore, Thailand ,Malaysia,Europe etc are wooing the well-off middle class to opt for such destinations.

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India- Ministry of Tourism constitutes task force on cruise tourism
Travel Bizmonitor.Com. 12 May. 3 Minute Read.
Towards promoting Cruise Tourism in India, a Task Force on Cruise Tourism has been constituted by the Ministry of Tourismwhich comprises of members from the Central Ministries, State Governments, various Port Trusts and Private sector.As per the decisions taken by the Task Force on Cruise Tourism, Port Level Facilitation Committees have been set up by Port authorities under the Chairmanship of respective Port Trust Chairman for coordinating logistic issues with all concerned agencies prior to the landing of cruise vessels.

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