CMA CGM finally engages in scrapping
21.11.2023
French ocean carrier CMA CGM is scrapping a ship for the first time since the Covid-19-fuelled container shipping boom ended.
The 2003-built, 1,118 TEU feeder vessel, CMA CGM Tanger, owned by the French carrier’s Moroccan subsidiary, Compagnie Marocaine de Navigation (Comanav), has been sold for an undisclosed price, for recycling in Turkey. The Marseille-based company acquired Comanav in 2007, after the latter was privatised by the Moroccan government.
Cash buyers and brokers said that boxship demolition remains slow, possibly because ship owners still have substantial financial reserves from the boom years and can afford to keep elderly vessels running in the near term.
Global Marketing Systems said that market sentiments are improving in the Turkish ship recycling market, where prices have climbed to US$325/ldt, up by around US$5/ldt from the previous week. Given that CMA CGM Tanger light displacement tonnage is 5,245, the ship might fetch around US$1.7 million.
The cash buyer said, “Turkey continues to surprise the industry, with weekly ongoing improvements amidst a key depreciating fundamental that should have taken the steam entirely out of its domestic ship-recycling market.”
India mulls outsourcing mooring services to improve port charges for carriers
16.11.2023
In a significant policy modification that could spark labour pushback, the government of India is exploring a proposal to enable major port authorities to outsource many of their in-house services, especially pilotage and towage activity, for greater efficiency and cost improvements for users.
The move comes amid persistent calls by industry stakeholders, particularly ocean carriers, to lower marine charges, which they argue do not represent a competitive operating environment for regular direct calls.
According to industry arguments and estimates, Indian ports are substantially costlier than their peers like Colombo or other Asian hubs.
A long-term maritime growth plan titled “Amrit Kaal Vision 2047,” unveiled recently by the Indian government, has recognised the need for new policy measures to make domestic ports more competitive.
“Ports may also consider outsourcing of services such as pilotage and towage to third-party service providers,” said the document.
It further noted, “Major ports, being a government body, have to operate under certain restrictions, which may limit the operational performance and efficiency.”
The document went on to explain: “Outsourcing may lead to better operational efficiencies, thus reducing the cost of providing the service.”
Additionally, according to the government, some of the key global ports, including Singapore and Jebel Ali, have already adopted this “outsourcing model” of operations.
“Major ports are facing multiple challenges related to captive tugs such as high maintenance costs, low availability of owned tugs, frequent breakdowns due to lack of proper up-keep and maintenance, unionized manpower,” the vision paper suggested.
“Ports sign license contracts with towage service operators and operators directly charge vessel owners for the service,” it added.
While there has been a marked improvement in the infrastructure ecosystem, higher port call costs are increasingly seen as a deterrent for mainline carriers wishing to add more direct calls on the Indian coast.
Indian efforts to develop some of its ports into regional transshipment hubs haven’t proven successful thus far, with DP World Cochin or Vallarpadam Terminal in the greater spotlight.
“Establishment of a transshipment hub in India would also involve infrastructure development to match the requirements of shippers and vessel operators,” said the “Amrit Kaal Vision 2047” document.
“An assessment has been conducted across key parameters – availability of draft, proximity to maritime routes and hinterland connectivity to identify ports which have the potential to act as a transshipment port for India,” it also noted.
India has 12 major or publicly-owned ports and some 200 minor ports along its 4,600 miles of coastline.
According to port data obtained by Container News, Indian ports (major/minor) saw about 1.4 billion tons of freight traffic in the fiscal year 2022-23 through the end of March.
Bank of Russia to create digital ruble payment system with the UAE
08.11.2023
The Bank of Russia is ready in cooperation with the UAE regulator to build up a system of fast payments and settlements with the use of the digital ruble for individuals and the business, First Deputy Governor Olga Skorobogatova said at the Finopolis forum.
"We will work out the fast payment system and the CBDC [central banks digital currency - TASS] because the colleagues are ready with the digital ruble and we are ready. If we solve the issue of client identification, then I think we will be able to build up a normal system of payments for citizens and the business between the two our countries in a year at the least," she said.
The Finopolis forum is being held on November 8 to 10. The Bank of Russia acts as its organizer in partnership with IT and financial market champions.
IoT technology will differentiate dry container services
31.10.2023
The Internet of Things (IoT) has been a largely untapped resource for dry container shipping. ORBCOMM’s new-to-the-market dry container monitoring solution offers unprecedented transparency, cost-effective proof of compliance and untapped commercial opportunities, says Christian Allred, Executive Vice President, International Sales, ORBCOMM.
Carrying around 90% of non-bulk cargo transported by sea, dry containers are fundamentally important to global trade. Despite this, a number of operating challenges continue to beset the market, including visibility of cargo location, condition and integrity, and optimising supply chain efficiency. After weathering unprecedented volatility in 2020 and then bouncing back to post record profits in 2021, recent market conditions have brought these perennial challenges into sharp relief.
The container shipping market’s outlook changed dramatically in September 2022 when pessimistic economic forecasts and reduced consumer demand combined to send spot freight rates tumbling. Although the IMF forecasted 3.0% economic growth in both 2023 and 2024, businesses and consumers continue to face financial challenges in Q3 of 2023. In part due to these unfavourable macro-economic conditions, continued low freight rates also reflect the rapid expansion in global container ship capacity. This surge shows no signs of abating in 2024 as shipowners have continued to order new ships.
In such a market, maintaining competitive advantage is vital and shipping lines must find innovative ways to differentiate their services from peer rivals. Improving traceability and real time asset management is one such way.
Ocean Alliance’s dominant era comes after 2M breakup
25.10.2023
The Ocean Alliance comprising CMA CGM, COSCO Shipping Lines and Evergreen Marine Corporation is set to become the largest box shipping alliance once the 2M partnership ends in 2025.
2M’s extinction will leave Ocean and THE alliances as the only container shipping tie-ups on long-haul routes, but they will not be of equal scale.
Operating 303 container ships of 4.22 million TEU, the Ocean Alliance is nowadays larger than the 2M and THE Alliance, which each operate around 3.1 million TEU.
The Ocean Alliance’s market share stands at 34% in the Asia – Europe trade and at 35% on Asia – North America routes.
Its market shares on these routes are expected to further increase, as the Ocean Alliance’s member carriers have a combined orderbook of almost 2.38 million TEU for delivery from 2024 onwards.
Alphaliner stated, “Not all of these newbuildings will trade in Ocean Alliance services, but there is little doubt that the 36 ‘megamax’ ships under construction are earmarked for the Asia – Europe trade, where they can staff three weekly loops.”
The current Ocean Alliance ‘Day 7’ Product, launched in January, is based on the pro forma deployment of 353 ships of 4.62 million TEU, up 49% since its launch in April 2017, exceeding the average sector growth of 27.5%. The Ocean Alliance’s average vessel size also climbed from 9,600 TEU in April 2017 to 13,000 TEU today.
Contrary to certain media reports suggesting that the alliances will need to be adjusted following the decision by the European Commission not to extend the carriers’ exemption from regular competition law for consortia (when the market share is less than 30%), shipping alliances remain a legal way for liner operators to cooperate.
Alphaliner said, “As long as carrier groupings (even with a market share above 30%) do not unduly restrict competition and receive formal regulatory approval, they will continue to function normally. The planned expansion of the Ocean Alliance might however become a test case for how large the megaalliances will be allowed to grow.”